<PAGE>
NICHOLAS=APPLEGATE-Registered Trademark- MUTUAL FUNDS
SEMI-ANNUAL REPORT
SEPTEMBER 30, 1995
------------
GLOBAL PORTFOLIOS
INSTITUTIONAL SERIES
------------
WORLDWIDE GROWTH
INTERNATIONAL GROWTH
EMERGING COUNTRIES
<PAGE>
NICHOLAS=APPLEGATE-Registered Trademark- MUTUAL FUNDS
- -----------------------------------------------------------------------
600 West Broadway
San Diego, California 92101
800-551-8643
TRUSTEES OF NICHOLAS-APPLEGATE MUTUAL FUNDS
Fred C. Applegate
Dr. Arthur B. Laffer
Arthur E. Nicholas, Chairman
Charles E. Young
TRUSTEES OF NICHOLAS-APPLEGATE INVESTMENT TRUST
Dann V. Angeloff
Walter A. Auch
Theodore J. Coburn
Darlene T. DeRemer
George F. Keane
Arthur E. Nicholas, Chairman
OFFICERS
Arthur E. Nicholas, Chairman
Ashley Rabun, President
Pete J. Johnson, Vice President
Thomas Pindelski, Treasurer
E. Blake Moore, Jr., Secretary
INVESTMENT MANAGER
Nicholas-Applegate Capital Management
DISTRIBUTOR
Nicholas-Applegate Securities
CUSTODIAN
PNC Bank
TRANSFER AGENT
State Street Bank & Trust Company
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<PAGE>
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
PAGE
<S> <C>
Letter to Shareholders.................................................. 1
Organization............................................................ 2
Capital Markets Review.................................................. 3
The Portfolios' Overview, Fund Manager Q&A and the Funds' Schedules of
Investments
Worldwide Growth...................................................... 4
International Growth.................................................. 14
Emerging Countries.................................................... 24
The Portfolios'
Financial Highlights.................................................. 34
Statements of Assets and Liabilities.................................. 36
Statements of Operations.............................................. 37
Statements of Changes in Net Assets................................... 38
Notes to the Financial Statements..................................... 39
Notes to the Funds' Financial Statements................................ 44
</TABLE>
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This report is authorized for distribution to shareholders and to others only
when preceded or accompanied by a current prospectus for Nicholas-Applegate
Mutual Funds. Distributor: Nicholas-Applegate Securities.
<PAGE>
(This page intentionally left blank)
<PAGE>
LETTER TO SHAREHOLDERS
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DEAR FELLOW SHAREHOLDERS,
We are pleased to present you with this Semi-Annual Report for
Nicholas-Applegate Mutual Funds.
Global markets have, on the whole, performed well this year, although they
have been overshadowed by very strong performance in the U.S. market. Next year,
many analysts are expecting international markets to outperform the U.S. At
Nicholas-Applegate, we believe that the long-term prospects for global markets
have never looked better. The difficulty for many investors is trying to decide
which markets to be in and when. We believe it is more important to remain
broadly diversified in all world markets than to attempt to "time" them. Let me
use the U.S. stock market as an example to explain why we are so optimistic
about the world's future.
In 1932, the depths of the Depression in the United States, the Dow Jones
Industrial Average sank to a low of 40. In September, 1995, it reached a new
high of 4801. That means that over the past 63 years the Dow has multiplied in
value 120 times. And these 63 years included a terrible World War, the
assassination of world leaders, and 40 years of a Cold War that diverted the
energies of many of the world's best and brightest minds.
So what made this phenomenal increase in stock values possible? It's basically
very simple -- companies like those we look for are constantly striving to
introduce new products and services that increase productivity or improve
people's lives in some way. The fax machine. The cassette player on your hip.
The automatic teller at your bank, and in your grocery store. The personal
computer on your desk, or the computer chips under the dashboard of your car.
Shopping from home via cable television. Overnight delivery.
All these innovations add value to world economies. All are made possible by
the capital invested by people like you through equity ownership. This process
is now picking up even more steam with the opening of major new markets around
the world and the globalization of the world economy. Today many of the toys
lining our store shelves are manufactured in Mainland China, many U.S.
corporations generate a high percentage of their profits overseas, and young
Americans move to places like Budapest and Prague to make their fortunes.
At Nicholas-Applegate, we believe that change creates opportunity. In a world
where so much is changing, we think the prospects for long-term investors look
very bright indeed. Keep your eyes on your goals, stick to your financial plan,
and remember -- true wealth comes from staying invested for the long term and
being diversified throughout the globe.
Sincerely,
[SIGNATURE]
Ashley Rabun
President
Nicholas-Applegate Mutual Funds
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1
<PAGE>
ORGANIZATION
- -------------------------------------------------------------------
Nicholas-Applegate Mutual Funds (the "Trust") is organized as a diversified,
open-end management investment company which offers 43 separate series comprised
of Portfolios A, with an initial sales charge, B, with a contingent deferred
sales charge, C, with a level asset-based sales charge, Institutional, with no
load, and Qualified, with no load (each a "Portfolio" and collectively the
"Portfolios"). The Portfolios of the Trust seek to achieve their respective
investment objectives by investing all of their assets in corresponding series
of Nicholas-Applegate Investment Trust (the "Master Trust"), a diversified
open-end management investment company offering 12 investment vehicles (the
"Funds"). As of September 30, 1995, the Funds and corresponding Portfolios are
as follows:
<TABLE>
<CAPTION>
INCLUDED
IN INCLUDED IN
FUNDS OF THE PORTFOLIOS OF THIS ANOTHER
MASTER TRUST THE TRUST REPORT REPORT
- ----------------------- --------------------------------------------- ---------- -------------
<S> <C> <C> <C>
Mini-Cap Growth Mini-Cap Growth Institutional x
Emerging Growth Emerging Growth A x
Emerging Growth B x
Emerging Growth C x
Emerging Growth Institutional x
Emerging Growth Qualified x
Core Growth Core Growth A x
Core Growth B x
Core Growth C x
Core Growth Institutional x
Core Growth Qualified x
Income & Growth Income & Growth A x
Income & Growth B x
Income & Growth C x
Income & Growth Institutional x
Income & Growth Qualified x
Balanced Growth Balanced Growth A x
Balanced Growth B x
Balanced Growth C x
Balanced Growth Institutional x
Balanced Growth Qualified x
Government Income Government Income A x
Government Income B x
Government Income C x
Government Income Qualified x
Money Market Money Market Portfolio x
Worldwide Growth Worldwide Growth A x
Worldwide Growth B x
Worldwide Growth C x
Worldwide Growth Institutional x
Worldwide Growth Qualified x
International Growth International Growth A x
International Growth B x
International Growth C x
International Growth Institutional x
International Growth Qualified x
Emerging Countries Emerging Countries A x
Emerging Countries B x
Emerging Countries C x
Emerging Countries Institutional x
Emerging Countries Qualified x
Fully Discretionary Fully Discretionary Institutional x
Short-Intermediate Short-Intermediate Institutional x
</TABLE>
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2
<PAGE>
CAPITAL MARKETS REVIEW
- -------------------------------------------------------------------
The international investing environment improved significantly this summer as
a global rally in technology and telecommunications stocks helped
high-technology companies' shares worldwide. The benchmark for foreign equities,
Morgan Stanley Capital International's EAFE (Europe, Australia and Far East)
Index, advanced 4.0%, from July through September 1995.* This was a sharp break
from the four previous quarters, during which international stocks returned, on
average, only 0.4%. The reemergence of the Japanese market was the largest
factor in the increase.
Japanese stocks, which had been in a general state of decline since 1990,
advanced 4.3%, on average, in the third quarter. The turnaround was spurred by a
combination of government spending, a weakening of the yen and an easing of
monetary policy. The weakening yen helped improve prospects for Japanese
manufacturers, whose products were becoming increasingly expensive and
uncompetitive in export markets. Elsewhere in Asia, country returns were mostly
higher during spring and summer. Hong Kong and Korea enjoyed especially strong
market advances, although Taiwan suffered severe declines.
European stock markets advanced broadly during the summer. The Nordic
countries, where returns are dominated by a handful of telecommunications
companies, set the pace for world markets on the strength of a 50.5% advance in
Finland's stocks from April through September. The continent's largest equity
markets, the United Kingdom and Germany recorded solid gains for the period as
did the smaller markets of Switzerland, Spain, Ireland and Greece. The French
market was the continent's biggest disappointment. It fell 4.4% from April
through September.
Emerging market countries advanced through spring and summer, mostly on the
strength of a rebound in Latin American share prices. They rose 21.8% from April
through September with the largest gains recorded in Peru and Mexico. Average
share prices in those countries rose 50.2% and 33.8%, respectively, from April
through September.
These somewhat choppy market conditions showed a major advantage of our
bottom-up investment style, which focuses on finding successful growing
companies rather than advancing national markets. We use sophisticated
traditional and systematic research tools to sort through the ranks of the
world's companies in search of the best available investments. In this way, we
look for healthy, growing companies that are responding well to change and are
poised for growth regardless of economic conditions. We remain optimistic about
the outlook for our investment style in international markets. We continue to
find and invest in companies that are benefiting from the rapid societal and
economic changes occurring worldwide and we believe the world's capital markets
will continue to reward these companies and our investors.
- ------------
* All returns in this Capital Markets Review are
measured in U.S. dollars.
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3
<PAGE>
WORLDWIDE GROWTH PORTFOLIO
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GOAL: Seeks to maximize long-term capital appreciation through investment in a
portfolio of growth stocks of U.S. and foreign companies.
REVIEW AND OUTLOOK: The Worldwide Growth Portfolio advanced strongly through
spring and summer, outperforming the benchmark MSCI World Index. Among the best
performing issues in the Portfolio were: Diesel engine manufacturer China
Yuchai, up 33% for the period on the strength of mid-sized engine sales in
China; and Telecom Italia Mobile, a company that was spun off from Telecom
Italia in July and has risen 30% in share price on the strength of its share in
Italy's growing cellular telephone market.
As of September 30, 1995, 38% of the Portfolio's net assets were invested in
U.S. companies, 18% were in Japanese companies and 8% were in United Kingdom
companies. (This distribution includes the Global and American Depository
Receipts of non-U.S. companies as U.S. holdings.) We held 33% of assets in
equities of companies that produce goods for other manufacturers, 22% in
technology company shares and 5% in financial services companies. Other sectors
represented in the Portfolio included: consumer durable products, 7%; utilities,
5%; and retailers, 3%.
Economic growth appears to be slowing globally to a stable, sustainable level
and that has led to lower interest rates internationally. This is an attractive
market environment for the kinds of growth companies that we seek for the
Portfolio. We look for companies that we believe can grow earnings regardless of
the economic environment. In periods of slow growth, these companies can command
premium stock prices because earnings growth is relatively harder to find.
We believe the global investing environment remains positive for U.S.
investors and further improvements in the relative performances of non-U.S.
companies is likely. This should bode well for U.S. investors and cause global
investing to remain an important strategy for achieving superior long-term
returns.
REPRESENTATIVE HOLDINGS
Autoliv AB, Sweden
Fresenius Co., Germany
NTT Data Communications Systems, Japan
Micron Technology, U.S.A.
Sidel, France
Storehouse, United Kingdom
China Yuchai International LTD., Singapore
IRO AB, Sweden
Telecom Italia Mobile, Italy
Varitronix, Hong Kong
- --------------------------------------------------------------------------------
4
<PAGE>
A CONVERSATION WITH LORETTA MORRIS
- -------------------------------------------------------------------
Loretta Morris
[PHOTO] Portfolio Manager
Global Management Team
Worldwide Growth Portfolio
Q. LORETTA, THE WORLDWIDE GROWTH PORTFOLIO
PRODUCED VERY ATTRACTIVE GAINS FROM APRIL THROUGH SEPTEMBER DESPITE CHOPPY
CONDITIONS FOR GLOBAL INVESTORS. WHAT WAS HAPPENING IN THE WORLD'S EQUITY
MARKETS AND IN THE PORTFOLIO?
A. Well, a lot of the choppiness and also a lot of
the gain was rooted in the changing values of the world's currencies, especially
the U.S. dollar, the Japanese yen and the German mark. These three countries
each contributed to the global easing of monetary policy during the period, and
that had an expansionary effect on worldwide economic activity. Within that
monetary easing was a coordinated effort by these three countries, to boost the
value of the dollar at the expense of the yen and the mark. This provided an
important turning point for the export-driven Japanese economy. It made Japanese
products more competitively priced. Japanese stock prices rose with the
strengthening dollar and the Portfolio's Japanese holdings gained value.
Q. HOW DID NICHOLAS-APPLEGATE'S INVESTING STYLE
CONTRIBUTE TO THE PORTFOLIO'S STRONG RELATIVE PERFORMANCE DURING THE PERIOD?
A. We routinely analyze returns from the Portfolio
and compare them to returns from the World Index to see how we're doing on a
relative basis. We know from this analysis that our individual stock-selection
decisions made the big difference in our outperformance against the Index. These
decisions were much more important, for example, than our weightings within
countries or industries. Since we consider our expertise as investment managers
to be our stock-picking abilities, this is very satisfying.
Q. DO YOU FACTOR POLITICAL AND CURRENCY RISKS INTO
YOUR INVESTMENT DECISIONS? HOW DO YOU ACCOUNT FOR THOSE FACTORS?
A. We're bottom-up investors, so our decisions are
based on the fundamental strengths of individual companies. However, in light of
that, we have to take into account how certain economic conditions are going to
affect the companies in the Portfolio. So we do monitor and keep abreast of
conditions on a macroeconomic level and how that influences the companies we're
considering. It doesn't really lead us to make a decision to increase or
decrease the percentage of the Portfolio that is invested in a specific country.
Those country weighting decisions are really just the net result of our
individual investment decisions. They come about from the fact that we're either
finding or not finding attractive companies in these countries in light of the
economic environment.
Q. WHAT ARE SOME EXAMPLES OF STOCKS THAT YOU
ADDED OR SOLD DURING THE PERIOD?
A. We invested in SGL Carbon, a German company
that engineers and performs industrial applications to create specialty graphite
products and also produces carbon electrodes used to raise the temperatures of
the industrial blast furnaces that produce specialty steels. We think there is a
lot of room for growth in the price of this new stock. The company was spun off
from German chemical giant Hoechst and it has made some acquisitions of other
companies that add a lot of value to its core business, which is growing
rapidly. We also purchased shares of Honda Motor, a company that we have owned
in the Portfolio previously. Honda is benefiting from strong new model offerings
on the sales side and from significant offshore manufacturing capacity that
helps control expenses. We sold shares of the German airline Lufthansa during
the period because we started to see a slowdown in passenger traffic, and we
believe the benefits from the company's recent restructuring are now fully
reflected in the stock price. We also sold our position in Swedish steel maker
SSAB because of expectations that the company's earnings growth will decelerate
in 1996.
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5
<PAGE>
WORLDWIDE GROWTH INSTITUTIONAL PORTFOLIO
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COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN NICHOLAS-APPLEGATE
WORLDWIDE GROWTH INSTITUTIONAL PORTFOLIO WITH THE MSCI WORLD INDEX.
ANNUALIZED TOTAL RETURN
SINCE INCEPTION ONE YEAR TOTAL RETURN
(10/1/93 -- 9/30/95) (10/01/94 -- 09/30/95)
10.22% 11.55%
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Worldwide
Growth
Institutional MSCI World
Portfolio Index
<S> <C> <C>
10/1/93 250000 250000
12/93 250600 254061
3/94 263000 255609
6/94 258600 263297
9/94 272200 268946
12/94 258091 267012
3/95 262105 279072
6/95 277358 290979
9/95 303648 306816
</TABLE>
This graph is furnished to you in accordance with SEC regulations. It compares a
$250,000 investment in the Worldwide Growth Institutional Portfolio with the
Morgan Stanley Capital International ("MSCI") World Index from the commencement
of operations of the Portfolio on October 1, 1993 to the end of the Trust's
semi-annual period on September 30, 1995, on a cumulative basis. All return
calculations reflect the reinvestment of income dividends and capital gains
distributions, if any, as well as all fees and expenses applicable to the
Portfolio.
The total returns for the Portfolio reflect the fact that fees and expenses in
excess of certain expense limits specified in the investment management
agreement have been assumed by Nicholas-Applegate Capital Management. Total
return results would have been lower had there been no assumption of fees and
expenses in excess of expense limitations.
MSCI World Index consists of more than 1,400 securities listed on exchanges in
the U.S., Europe, Canada, Australia, New Zealand, and the Far East excluding the
United States. The Index is a market-value weighted combination of countries and
is unmanaged.
The Index reflects the reinvestment of income dividends and capital gains
distributions, if any, but does not reflect fees, brokerage commissions, or
other expenses of investing.
Past performance is no guarantee of future performance of any index or
Nicholas-Applegate Mutual Funds.
- --------------------------------------------------------------------------------
6
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1995 (UNAUDITED)
- ------------------------------------------------------------------------
WORLDWIDE
GROWTH FUND NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
COMMON STOCKS -- 92.6%
- ----------------------------------------------
<TABLE>
<S> <C> <C>
ARGENTINA -- 0.1%
Capex SA, Class A.......................... 15,000 $ 112,500
------------
AUSTRALIA -- 1.1%
Advance Bank of Australia LTD.............. 979 7,207
Broken Hill Proprietary Co. LTD............ 17,828 245,773
Capral Aluminium LTD....................... 28,000 65,815
F. H. Faulding & Co. LTD................... 46,200 207,762
ICI Australia LTD.......................... 2,200 16,628
National Australia Bank LTD................ 1,487 13,149
Pioneer International LTD.................. 98,000 259,239
Westfield Holdings LTD..................... 27,000 281,203
------------
1,096,776
------------
BELGIUM -- 0.7%
Tessenderlo Chemie S.A..................... 1,900 690,116
------------
CANADA -- 0.4%
Noranda, Inc............................... 18,000 366,711
------------
DENMARK -- 1.2%
Bang & Olufsen Holding A/S, Class B........ 1,800 636,387
East Asiatic Co., LTD*..................... 10,000 277,788
Sparekassen Bikuben
A/S*..................................... 8,300 279,970
------------
1,194,145
------------
FINLAND -- 0.4%
Kymmene OY................................. 11,500 355,337
------------
FRANCE -- 3.0%
Accor SA................................... 2,568 318,274
Club Mediterranee SA....................... 5,300 513,654
Europeenne de Propulsion SA................ 5,228 319,939
Lafarge Coppee SA.......................... 4,510 296,708
</TABLE>
NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
FRANCE (CONTINUED)
Michelin (C.G.D.E.), Class "B"............. 10,300 $ 451,820
PSA Peugeot Citroen........................ 3,400 464,911
Sidel, SA.................................. 2,030 648,372
------------
3,013,678
------------
GERMANY -- 5.2%
BASF AG.................................... 3,000 656,421
Bayer AG................................... 2,300 587,642
Fresenius AG............................... 1,370 1,170,284
Mannesmann AG.............................. 2,400 785,268
RWE AG..................................... 1,800 615,922
SGL Carbon AG*............................. 10,100 656,974
VEBA AG.................................... 20,000 793,306
------------
5,265,817
------------
HONG KONG -- 1.2%
China Light & Power Co. LTD................ 87,000 450,095
Guangdong Investments LTD.................. 468,000 279,951
Hopewell Holdings LTD...................... 11,000 7,469
San Miguel Brewery Hong Kong LTD........... 370,000 221,329
Tai Cheung Holdings LTD.................... 10,000 8,795
Varitronix International LTD............... 50,000 101,854
Yizheng Chemical Fibre Co. LTD............. 660,000 194,201
------------
1,263,694
------------
IRELAND -- 1.6%
Bank of Ireland............................ 93,353 585,041
Grafton Group PLC.......................... 69,890 507,989
Smurfit (Jefferson) Group PLC.............. 178,000 531,885
------------
1,624,915
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
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7
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1995 (UNAUDITED) -- CONTINUED
- --------------------------------------------------------------------------------
WORLDWIDE
GROWTH FUND NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
COMMON STOCKS (Continued)
- ----------------------------------------------
<TABLE>
<S> <C> <C>
ITALY -- 1.8%
Fiat SpA................................... 115,000 $ 430,760
Snia BPD SpA*.............................. 300,000 325,023
Stet Societa' Finanziaria Telefonica SpA... 155,000 471,008
Telecom Italia SpA......................... 182,000 300,794
Telecom Italia Mobile SpA*................. 182,000 303,615
------------
1,831,200
------------
JAPAN -- 17.8%
Aica Kogyo Co. LTD......................... 70,000 431,357
Aida Engineering........................... 14,000 101,121
Daiichi Corp............................... 33,000 656,733
Fujitsu LTD................................ 71,000 896,555
Gunze LTD.................................. 87,000 484,261
Hitachi LTD................................ 69,000 752,803
Honda Motor Co............................. 50,000 899,081
Hoya Corp.................................. 20,000 589,959
Izumiya Co. LTD............................ 10,000 163,653
Keyence Corp............................... 6,000 745,530
Kokusai Electric Co........................ 31,000 707,748
Kubota Corp................................ 85,000 573,593
Kureha Chemical Industry Co., LTD.......... 50,000 212,648
Kyocera Corp............................... 8,000 657,844
Life Co. LTD............................... 42,000 127,286
Minebea Co. LTD............................ 58,000 439,438
Mizuno Corp................................ 64,000 598,040
Nakayama Steel Works LTD................... 38,000 223,033
NEC Corp................................... 55,000 766,744
Nippon Steel Co............................ 133,000 464,875
Noritz Corp................................ 33,000 563,390
NTT Data Communications Systems Corp....... 500 1,166,785
Sekisui Chemical Co........................ 27,000 343,671
</TABLE>
NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
JAPAN (CONTINUED)
Sekisui Plastics Co. LTD................... 59,000 $ 296,222
Suzuki Motor Co. LTD....................... 30,000 324,275
Tokyu Corp................................. 100,000 674,816
Toshiba Corp............................... 88,000 644,510
Tostem Corp................................ 17,000 547,833
Toyoda Machine Works, LTD.................. 100,000 691,989
Xebio Co. LTD.............................. 11,000 407,819
Yamanouchi Pharmaceutical Co., LTD......... 36,000 778,261
Yodogawa Steel Works....................... 90,000 723,709
Yokogawa Electric.......................... 45,000 402,313
------------
18,057,895..
------------
KOREA -- 0.2%
Korea Mobile Telecommunications Corp.*..... 180 191,675
------------
MALAYSIA -- 0.6%
Bandar Raya Developments BHD............... 100,000 188,657
DCB Holdings BHD........................... 77,000 214,527
Malayan Banking BHD........................ 26,000 210,070
------------
613,254
------------
MEXICO -- 3.1%
Cemex S.A.................................. 194,000 868,974
Gruma S.A.*................................ 80,000 264,996
Grupo Carso S.A. de CV, Series A1*......... 64,000 400,940
Grupo Financiero Inbursa, S.A. de CV, Class
C........................................ 45,000 152,936
Grupo Modelo S.A. de CV, Series C*......... 80,000 301,958
Grupo Industria Alfa, S.A. de CV........... 22,000 295,975
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
8
<PAGE>
- -------------------------------------------------------------------
NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
COMMON STOCKS (Continued)
- ----------------------------------------------
<TABLE>
<S> <C> <C>
MEXICO (CONTINUED)
Transportacion Maritima Mexicana S.A. de
CV*...................................... 116,000 $ 813,908
------------
3,099,687
------------
NETHERLANDS -- 2.5%
Borsumij Wehry NV CVA...................... 325 7,169
Crown Van Gelder Gemeenschappelijk Bezit NV
CVA...................................... 2,700 255,624
DSM NV..................................... 3,000 240,720
Hollandsche Benton Groep NV................ 18 2,711
Koninklijke Hoogovens NV CVA............... 8,950 356,837
Koninklijke Volker Stevin NV CVA........... 5,400 360,405
NV Holdingmaatschappij De Telegraaf CVA.... 3,500 479,003
Philips Electronics NV..................... 10,100 492,313
Sphinx Kon Gustavsberg CVA................. 12,000 358,455
------------
2,553,237
------------
SINGAPORE -- 0.3%
City Developments LTD...................... 50,000 309,206
United Overseas Bank LTD................... 495 4,279
------------
313,485
------------
SPAIN -- 1.9%
Acerinox SA................................ 5,060 576,976
Gas Natural SDG, Class E................... 6,000 755,489
Hidroelectrica del Cantabrico SA, Class C.. 20,770 629,878
------------
1,962,343
------------
</TABLE>
NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
SWEDEN -- 1.3%
Ericsson................................... 19,500 $ 481,481
IRO AB*.................................... 32,000 425,096
Mo och Domsjoe AB, Class B................. 6,500 409,212
------------
1,315,789
------------
SWITZERLAND -- 2.2%
Aare-Tessin AG fur Elektrizitat............ 500 322,371
Alusuisse-Lonza Holding AG................. 600 445,002
Ascom Holding AG, Bearer*.................. 300 319,342
Landis & Gyr AG............................ 450 274,557
Merck AG................................... 500 483,773
Zurich Versicherungs-
gesellschaft............................. 1,500 420,597
------------
2,265,642
------------
THAILAND -- 0.2%
K.R. Precision Public Co., LTD*............ 25,700 152,592
------------
UNITED KINGDOM -- 7.9%
Bank of Scotland........................... 123,270 471,425
British Petroleum Co. PLC.................. 78,634 590,260
British Steel PLC.......................... 223,000 639,619
Burton Group PLC........................... 310,000 536,433
Dewhirst Group PLC......................... 100,000 304,998
GKN PLC.................................... 64,400 841,649
Imperial Chemical Industries PLC........... 46,000 583,731
London International Group*................ 100,000 208,600
Next PLC................................... 100,000 641,602
Pilkington PLC............................. 184,000 578,642
RMC Group PLC.............................. 33,200 569,780
RTZ Corp. PLC.............................. 38,000 556,676
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
9
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1995 (UNAUDITED) -- CONTINUED
- --------------------------------------------------------------------------------
WORLDWIDE
GROWTH FUND NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
COMMON STOCKS (Continued)
- ----------------------------------------------
<TABLE>
<S> <C> <C>
UNITED KINGDOM (CONTINUED)
Smith (David S.) Holdings PLC.............. 55,000 $ 537,144
Storehouse PLC............................. 97,000 454,502
Thorn EMI PLC.............................. 19,000 442,579
------------
7,957,640
------------
UNITED STATES OF AMERICA++ -- 37.9%
Alex Brown, Inc............................ 6,600 385,275
Alliance Semiconductor Corp.*.............. 22,725 903,319
Altera Corp.*+............................. 14,600 910,675
American Financial Group Inc............... 12,800 384,000
Arbed SA Sponsored ADS (Belgium)*+......... 20,000 527,540
Asarco, Inc................................ 23,600 743,400
Autoliv AB Sponsored ADS (Sweden)*+........ 20,000 1,219,820
Bear Stearns Companies, Inc................ 13,000 279,500
Boise Cascade Corp......................... 23,700 956,888
Bowater, Inc............................... 6,700 312,388
Burr Brown Corp.*.......................... 10,300 383,675
Cabletron Systems, Inc.*................... 4,450 293,144
Charter One Financial, Inc................. 10,100 297,950
China Yuchai International LTD (China)..... 29,000 355,250
Compania Cervecerias Unidas Sa Sponsored
ADR (Chile).............................. 6,000 128,250
Cognex Corp.*.............................. 6,800 328,100
Compusa, Inc.*............................. 9,000 387,000
Conner Peripherals, Inc.*.................. 25,400 422,275
Continental Airlines, Inc.*................ 11,400 417,525
</TABLE>
NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
UNITED STATES OF AMERICA++ (CONTINUED)
Credence Systems Corp.*.................... 10,000 $ 362,500
Cytec Industries, Inc.*.................... 6,500 376,188
Danaher Corp............................... 12,600 412,650
Dimon, Inc................................. 19,400 291,000
Electronics For Imaging, Inc.*............. 6,400 458,400
Federal Paper Board Co..................... 9,900 379,913
FMC Corp................................... 11,600 881,600
Fleming Companies, Inc..................... 11,600 278,400
FSI Internationa, Inc.*.................... 12,400 412,300
Gaylord Container Corp., Class A*.......... 32,800 309,550
Glatfelter (P.H.) Co....................... 15,100 339,750
Grand Casinos, Inc.*....................... 10,700 434,688
Green Tree Financial Corp.................. 1,600 97,600
Harbin Power Equipment Co. LTD (China)..... 10,500 267,801
IBP, Inc................................... 9,200 491,050
Indigo NV (Netherlands)*................... 17,500 404,687
Inversiones y Representaciones SA Sponsored
GDR (Argentina)*......................... 16,200 388,800
J&L Specialty Steel, Inc................... 12,700 266,700
Kemet Corp.*............................... 22,000 760,350
King World Productions, Inc.*.............. 6,900 252,712
Kulicke & Soffa Industries*................ 8,500 310,250
Lattice Semiconductor Corp.*+.............. 7,800 316,875
Lehman Brothers Holdings, Inc.*+........... 13,400 309,875
L.G. Electronics, Inc. Sponsored GDR (South
Korea)................................... 28,600 354,068
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
10
<PAGE>
- -------------------------------------------------------------------
NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
COMMON STOCKS (Continued)
- ----------------------------------------------
<TABLE>
<S> <C> <C>
UNITED STATES OF AMERICA++ (CONTINUED)
L.G. Electronics, Inc. Sponsored GDR New
(South Korea)*........................... 1,668 $ 28,109
Lincare Holdings, Inc.*.................... 10,400 267,800
Louisiana Land & Exploration Co............ 7,100 252,937
Lyondell Petrochemical Co.................. 24,400 631,350
Marshall Industries*....................... 10,900 411,475
McAfee Associates, Inc.*................... 8,500 437,750
Medic Computer Systems, Inc.*.............. 6,200 314,650
Micron Technology, Inc..................... 12,400 985,800
Mobile Telecommunication Technology*....... 11,000 339,625
Moneda Chile Fund (Chile)*................. 42,000 425,250
Old Republic International................. 12,300 355,162
Olin Corp.................................. 7,400 508,750
Olympic Financial, LTD*.................... 11,700 320,287
Oxford Health Plans, Inc.*................. 6,500 472,875
Petro Canada*.............................. 43,000 209,625
Potash Corporation of Saskatchewan, Inc.... 19,900 1,238,775
Rayonier, Inc.............................. 8,800 344,300
Reading & Bates Corp.*..................... 30,600 367,200
Reynolds Metals Co......................... 6,500 375,375
Rhodia-Ster SA Sponsored GDR (Brazil)...... 38,000 510,340
Robert Half International, Inc.*........... 23,200 791,700
Safeway, Inc............................... 2,200 91,850
</TABLE>
NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
UNITED STATES OF AMERICA++ (CONTINUED)
Samsung Electronics Co. LTD (Non-voting) --
New*+.................................... 3,071 $ 196,237
Samsung Electronics Co. LTD Sponsored GDS
(South Korea)(Non-voting) -- New*+....... 244 15,592
Samsung Electronics Co. LTD (Voting) --
New*+.................................... 183 19,764
Samsung Electronics Co. LTD Sponsored GDR
(South Korea) (Voting)*+................. 928 111,360
Samsung Electronics Co. LTD Sponsored GDR
(South Korea) (Non-voting)*+............. 15,520 1,101,920
Samsung Engineering & Construction*+....... 17,200 163,400
Samsung Engineering & Construction
Sponsored GDR (South Korea)*+............ 6,985 66,357
Seagate Technology*........................ 7,400 311,725
Sonat Offshore Drilling Co................. 8,900 290,363
Sterling Chemicals, Inc.................... 5,100 42,075
Sun Microsystems, Inc.*.................... 9,100 573,300
S3, Inc.*.................................. 7,300 254,587
Tele Danmark A/S Sponsored ADR (Denmark)... 20,000 517,500
Telecomunicacoes Brasileiras S/A - Telebras
Sponsored ADR (Brazil)................... 13,000 611,091
Tencor Instruments*........................ 16,800 743,400
Tidewater, Inc............................. 13,700 385,313
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
11
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1995 (UNAUDITED) -- CONTINUED
- --------------------------------------------------------------------------------
WORLDWIDE
GROWTH FUND NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
COMMON STOCKS (Continued)
- ----------------------------------------------
<TABLE>
<S> <C> <C>
UNITED STATES OF AMERICA++ (CONTINUED)
U. S. Robotics Corp.*...................... 5,200 $ 443,300
Union Camp Corp............................ 6,200 357,275
Usiminas Siderurg Minas Gerais Sponsored
ADR (Brazil)*+........................... 77,000 848,309
Valmet Corp.(Finland)...................... 12,700 414,359
Videotron Holdings PLC Sponsored ADR
(United Kingdom)*........................ 30,700 510,388
Wellman, Inc............................... 16,500 404,250
Westvaco Corp.............................. 9,500 433,437
Willamette Industries...................... 4,900 327,075
Wyle Electronics, Inc...................... 8,000 359,000
Xilinx, Inc.*.............................. 7,500 360,937
------------
38,336,980
------------
TOTAL COMMON STOCKS
(Cost $80,222,169)........................................ 93,635,108
------------
- -----------------------------------------------------------------------------
WARRANTS/RIGHTS -- 0.1%
- -----------------------------------------------------------------------------
MALAYSIA
DCB Holdings BHD, 12/28/99................. 19,250 19,461
------------
SINGAPORE
United Overseas Bank LTD, 06/17/97......... 209 818
------------
SWEDEN
Ericsson, 10/27/95......................... 1,950 22,807
------------
</TABLE>
NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
SWITZERLAND
Holderbank Financiere Glaris AG, 12/20/95.. 2,150 $ 2,512
------------
UNITED KINGDOM
RMC Group, 10/16/95........................ 8,300 17,838
------------
UNITED STATES OF AMERICA
Merrill Lynch Hong Kong Call, 12/15/95..... 18,000 11,812
------------
TOTAL WARRANTS/RIGHTS
(Cost $97,072)............................................ 75,248
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
- -----------------------------------------------------------------------
COMMERCIAL PAPER -- 3.7%
- -----------------------------------------------------------------------
JP Morgan 6.500%, 10/02/95................. $3,269,000 3,267,819
Melville 6.650%, 10/02/95.................. 525,000 524,806
------------
TOTAL COMMERCIAL PAPER
(Cost $3,792,625) ........................... 3,794,000 3,792,625
------------
TOTAL INVESTMENTS -- 96.4%
(Cost $84,111,866)..................................... 97,502,981
OTHER ASSETS LESS LIABILITIES -- 3.6%....................
3,665,836
------------
NET ASSETS -- 100.0%..................................... $101,168,817
------------
</TABLE>
- ------------
* Non-income producing security.
+ Rule 144A restricted security.
++ These securities are classified as United States securities as their
underlying currency is the U.S. Dollar.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
12
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF SEPTEMBER 30, 1995 (UNAUDITED)
- ------------------------------------------------------------------------
WORLDWIDE GROWTH FUND
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY NET ASSETS
- ---------------------------------------------- ------------
<S> <C>
Aerospace..................................... 0.3%
Agriculture................................... 1.5
Airlines...................................... 0.4
Alcohol Beverages............................. 0.6
Apparel....................................... 1.3
Automobiles................................... 2.1
Automotive Equipment.......................... 2.0
Broadcasting.................................. 0.8
Building Material Chains...................... 0.5
Building Materials............................ 3.5
Chemicals..................................... 5.3
Closed End Country Funds...................... 0.4
Clothing Chains............................... 0.4
Computer Office Automation.................... 2.8
Consumer Electricals.......................... 0.6
Containers.................................... 1.3
Contract Drilling............................. 0.7
Department/Discount Stores.................... 0.6
Drugs/Pharmaceuticals......................... 1.4
Electric Utilities............................ 2.1
Electronic Instruments........................ 7.0
Entertainment................................. 0.3
Finance Companies............................. 0.4
Gambling...................................... 0.9
Gas Utilities................................. 0.8
Grocery Products.............................. 0.5
Industrial Engineering........................ 1.0
Investment Companies.......................... 1.2
Lodging....................................... 0.6
Machinery/Equipment........................... 4.3
Managed Healthcare/HMO's...................... 0.5
Medical/Health Services....................... 0.3
Metals........................................ 4.0
<CAPTION>
PERCENT OF
INDUSTRY NET ASSETS
- ---------------------------------------------- ------------
<S> <C>
Military/Defense Technology................... 1.4%
Money-Center Banks............................ 1.6
Multi-Line Insurers........................... 0.8
Oil/Gas Production............................ 1.7
Other Consumer Industrial Services............ 1.1
Other Consumer Non-Durables................... 0.4
Other Consumer Durables....................... 0.4
Other Consumer Services....................... 0.4
Other Energy.................................. 0.4
Other Financial Services...................... 0.4
Other Health Technical Services............... 1.2
Other Manufacturing........................... 6.0
Other Transportation.......................... 0.8
Other Utilities............................... 0.5
Paper......................................... 5.0
Property-Casualty Insurance................... 0.8
Publishing.................................... 0.5
Railroads..................................... 0.7
Real Estate Brokers........................... 0.9
Recreational Products......................... 0.6
Retail/Food Distribution...................... 0.3
Savings & Loan Associations................... 0.3
Semiconductors/Elec Comp...................... 7.9
Soaps/Cosmetics............................... 0.2
Software...................................... 2.4
Specialty Chains.............................. 1.7
Telecommunications Equip...................... 1.5
Telephone..................................... 1.8
Tobacco Products.............................. 0.3
Other Assets Less Liabilities................. 3.6
-----
TOTAL......................................... 100.0%
-----
-----
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
13
<PAGE>
INTERNATIONAL GROWTH PORTFOLIO
- -------------------------------------------------------------------
GOAL: Seeks to maximize long-term capital appreciation through investment in a
portfolio of equity securities of foreign companies only.
REVIEW AND OUTLOOK: International stocks improved through spring and summer as
market conditions in the developed and emerging markets of Europe, Asia and the
Americas offered signs of renewed growth. Among the leading financial markets
and their returns for the period were Finland, 52%; Sweden, 36%; Brazil, 32%;
and Spain, 18%.
Companies contributing to the International Growth Portfolio's performance
during the period included Swedish airbag and seat-belt manufacturer Autoliv.
Among other products, Autoliv manufactures the side-impact airbag being
installed on new Volvos. Shares of British retailer Storehouse also rose. The
company grew earnings during the period through increased sales of its infants'
and children's clothing and furnishings and from its stores specializing in
clothing for mothers.
As of September 30, 1995, more than half of the Portfolio's assets were
invested in growth-oriented companies in the three largest foreign markets:
Japan, the United Kingdom and Germany. About 10% of assets were invested in
companies in emerging-markets countries. The remainder of the Portfolio was
invested in companies in the other industrialized countries of Europe, Asia and
the Americas.
We see several themes developing across world markets: economic growth is
slowing, even in the emerging markets. Inflationary forces appear to have been
dampened by fierce global competition for jobs. Finally, global export growth is
growing steadily, representing a powerful engine for prosperity. These forces
all help the type of companies that we favor in the Portfolio. We use a
company-by-company investment process to identify companies that are responding
positively to change and that are poised to grow their earnings, regardless of
the economic environment. Recently, this process has led us to excellent
opportunities among manufacturers of high-technology, industrial and consumer
products as well as among financial services companies.
We remain upbeat about the long-term prospects for international investing and
for the International Growth Portfolio. We continue to identify healthy, dynamic
companies that we believe are responding well to changes in local and global
economic environments.
REPRESENTATIVE HOLDINGS:
Autoliv AB, Sweden
SGL Carbon AG, Germany
Hoya Corp., Japan
Bang & Olufsen, Denmark
Storehouse, United Kingdom
Sidel, France
China Yuchai International Ltd., Singapore
IRO AB, Sweden
Safilo, Italy
Korea Mobile Telecom, South Korea
- --------------------------------------------------------------------------------
14
<PAGE>
A CONVERSATION WITH LORETTA MORRIS
- -------------------------------------------------------------------
Loretta Morris
[PHOTO] Portfolio Manager
Global Management Team
International Growth Portfolio
Q. LORETTA, INTERNATIONAL EQUITIES SHOWED A LOT OF
PRICE MOVEMENT, BOTH UP AND DOWN, FROM APRIL THROUGH SEPTEMBER. WHAT WAS
HAPPENING IN THE MARKETS AND HOW DID THAT IMPACT THE INTERNATIONAL GROWTH
PORTFOLIO?
A. There was quite a bit of price movement in the
period. Fortunately, markets went up more than they went down, and investors
were rewarded for their patience. There were some major developments in
international business and economics during the period. While these were largely
positive, they added to the choppiness of international financial markets. There
were some big currency moves, for example. The dollar weakened during the winter
but was supported in early summer by the governments of Japan and Germany, whose
exports were becoming quite costly to customers purchasing with dollars. There
was a global easing of monetary policy by the U.S., Japan and Germany, which had
the expansionary effect of putting money into international markets. The U.S.
and Japan resolved their trade dispute over autos and auto parts and that helped
steady the markets. Finally, the trend toward restructuring companies and
improving productivity that has been so much a part of domestic corporate
culture in the 1990s really began to take hold globally. This helped the
technology companies in the Portfolio because they supply the tools that enhance
productivity. It also helped the companies in the Portfolio that have
effectively restructured their operations and improved their operating margins.
Q. DOES YOUR RECENT PERFORMANCE REPRESENT A
DEPARTURE FROM YOUR APPROACH TO INVESTING IN THESE INTERNATIONAL MARKETS IN 1994
AND THE FIRST QUARTER OF 1995?
A. We haven't changed the way we manage the
Portfolio. We still look for and invest in companies showing positive change at
the margin -- new products, new market niches, new management plans or other
factors enabling them to improve profitability. A lot of international companies
have been improving earnings through restructuring this year but this theme is
getting a bit played out. A lot of the big gains have already been realized from
restructuring and this is now built into the stock prices. So we are finding
some of our best opportunities now in more traditional growth themes: companies
developing innovative, new products and services or finding and claiming niche
markets.
Q. THE DOMESTIC STOCK MARKET HAS BEEN VERY
STRONG THIS YEAR. GIVEN THIS, WHY WOULD YOU ADVISE U.S. INVESTORS TO REMAIN IN
INTERNATIONAL MARKETS THAT HAVE BEEN UNDERPERFORMING THEIR NATIVE MARKETS?
A. Domestic and international markets are both
subject to random cycles of advances and declines and these cycles have very low
correlation. That means that returns in domestic markets have been independent
of what has occurred internationally. We do know that the best ten-year,
fifteen-year and twenty-year stock-market performances through 1994 were turned
in by international markets. We also know that, in the past, investors have been
able to improve total returns, reduce risk and smooth out the fluctuations of a
domestic portfolio by adding international investments. So I would advise
investors to work with their financial consultants to develop
- --------------------------------------------------------------------------------
15
<PAGE>
- -------------------------------------------------------------------
investment plans that are suited to their specific needs and that are based on
the best information available. I'm confident most investors will find these
plans include a significant international component.
Q. WHAT ARE SOME EXAMPLES OF STOCKS YOU ADDED
AND SOLD DURING THE PERIOD?
A. We recently bought shares of Safilo, an Italian
manufacturer of eyeglass frames. We see growth in certain niches of global
consumer markets and Safilo's management is positioning the company to take
advantage of that growth. We also purchased shares of NTT Data Systems Corp., a
subsidiary of Nippon Telegraph and Telephone Corp. and the largest information
systems company in Japan. The company's software development business is poised
to grow as Japanese companies and public sector agencies strive to improve
productivity. We sold shares of a pair of European steel companies, Thyssen of
Germany and Hoogovens of the Netherlands, on expectations of decelerating
earnings growth for the companies in 1996.
- --------------------------------------------------------------------------------
16
<PAGE>
INTERNATIONAL GROWTH INSTITUTIONAL PORTFOLIO
- -------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN NICHOLAS-APPLEGATE
INTERNATIONAL GROWTH INSTITUTIONAL PORTFOLIO WITH THE MSCI EAFE INDEX.
ANNUALIZED TOTAL RETURN
SINCE INCEPTION ONE YEAR TOTAL RETURN
(12/31/93 -- 09/30/95) (10/01/94 -- 09/30/95)
8.42% 1.75%
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
International
Growth
Institutional
Portfolio MSCI EAFE Index
<S> <C> <C> <C> <C>
12/31/93 250000 250000
3/94 269000 258713
6/94 279600 271926
9/94 283000 272190
12/94 271530 269402
3/95 265239 274329
6/95 269292 276334
9/95 287934 287465
</TABLE>
This graph is furnished to you in accordance with SEC regulations. It compares a
$250,000 investment in the International Growth Institutional Portfolio with the
Morgan Stanley Capital International ("MSCI") EAFE Index from the commencement
of operations of the Portfolio on December 31, 1993 to the end of the Trust's
semi-annual period on September 30, 1995, on a cumulative basis. All return
calculations reflect the reinvestment of income dividends and capital gains
distributions, if any, as well as all fees and expenses applicable to the
Portfolio.
The total returns for the Portfolio reflect the fact that fees and expenses in
excess of certain expense limits specified in the investment management
agreement have been assumed by Nicholas-Applegate Capital Management. Total
return results would have been lower had there been no assumption of fees and
expenses in excess of expense limitations.
The MSCI Europe, Australia, Far East ("EAFE") Index is an unmanaged index that
is a generally accepted benchmark for major overseas markets. The MSCI EAFE
Index weightings represent the relative capitalizations of the major overseas
markets included in the index on a U.S. dollar adjusted basis.
The Index reflects the reinvestment of income dividends and capital gains
distributions, if any, but does not reflect fees, brokerage commissions, or
other expenses of investing.
Past performance is no guarantee of future performance of any index or
Nicholas-Applegate Mutual Funds.
- --------------------------------------------------------------------------------
17
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1995 (UNAUDITED)
- ------------------------------------------------------------------------
INTERNATIONAL
GROWTH FUND NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
COMMON STOCKS -- 92.2%
- ----------------------------------------------
<TABLE>
<S> <C> <C>
ARGENTINA -- 0.6%
Capex SA Class A 14,000 $ 105,000
-----------
AUSTRALIA -- 2.8%
Australian Gas Light Co. LTD............... 20,000 69,533
Caltex Australia LTD....................... 33,000 106,001
Capral Aluminium LTD....................... 44,000 103,424
F.H. Faulding & Co. LTD.................... 1,000 4,497
ICI Australia LTD.......................... 9,600 72,557
Western Mining Corp. Holdings LTD.......... 10,000 65,452
Westfield Holdings LTD..................... 8,600 89,568
-----------
511,032
-----------
BELGIUM -- 0.7%
Banque Bruxelles Lambert SA................ 380 64,131
Barco N.V.................................. 565 66,035
-----------
130,166
-----------
DENMARK -- 1.4%
Bang & Olufsen Holding A/S Class B......... 375 132,581
Ostasiatiske Kompagni A/S*................. 2,400 66,669
Sparekassen Bikuben
A/S*..................................... 1,800 60,716
-----------
259,966
-----------
FINLAND -- 0.5%
Kymmene.................................... 3,000 92,697
-----------
FRANCE -- 4.8%
Club Mediterranee.......................... 1,000 96,916
Labinal.................................... 550 84,705
Lafarge.................................... 1,353 89,012
Michelin Cgde Reg "b"...................... 2,200 96,505
PSA Peugeot Citroen........................ 710 97,084
</TABLE>
NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
FRANCE (CONTINUED)
Sidel...................................... 430 $ 137,340
Sidergie................................... 400 88,423
Societe Europeene de Propulsion SA......... 1,295 79,250
Strafor Facom SA........................... 850 101,894
-----------
871,129
-----------
GERMANY -- 5.1%
BASF AG.................................... 675 147,695
Fresenius AG............................... 255 217,827
Mannesmann AG.............................. 710 232,308
SGL Carbon AG*............................. 3,200 208,150
VEBA AG.................................... 3,000 118,996
-----------
924,976
-----------
HONG KONG -- 1.9%
China Light & Power Co. LTD................ 20,000 103,470
Hopewell Holdings LTD...................... 2,523 1,713
Paliburg International Holdings LTD........ 31,500 18,945
San Miguel Brewery Hong Kong LTD........... 110,000 65,801
Varitronix International LTD............... 50,000 101,853
Yizheng Chemical Fibre Co.................. 198,000 58,260
-----------
350,042
-----------
IRELAND -- 2.1%
Bank of Ireland............................ 23,338 146,259
Grafton Group PLC.......................... 18,116 131,674
Smurfit (Jefferson) Group PLC.............. 32,000 95,620
-----------
373,553
-----------
ITALY -- 2.0%
Safilo SpA................................. 12,000 108,651
Snia BPD SpA*.............................. 71,000 76,922
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
18
<PAGE>
- -------------------------------------------------------------------
NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
COMMON STOCKS (Continued)
- ----------------------------------------------
<TABLE>
<S> <C> <C>
ITALY (CONTINUED)
Stet Societa' Finanziaria Telefonica SpA... 21,000 $ 63,814
Telecom Italia SpA......................... 31,000 51,234
Telecom Italia Mobile SpA*................. 31,000 51,715
-----------
352,336
-----------
JAPAN -- 30.2%
Aica Kogyo Co. LTD......................... 16,000 98,596
Aida Engineering........................... 23,000 166,128
Daiichi Corp............................... 7,000 139,307
Fujitsu LTD................................ 17,000 214,668
Gunze LTD.................................. 31,000 172,553
Honda Motor Co............................. 15,000 269,724
Hoya Corp.................................. 6,000 176,987
Keyence Corp............................... 2,000 248,510
Kubota Corp................................ 27,000 182,200
Kurabo Industries.......................... 44,000 160,905
Life Co. LTD............................... 7,000 21,214
Minebea Co. LTD............................ 29,000 219,719
Mitsubishi Gas Chemical.................... 45,000 199,111
Mitsui Marine & Fire Insurance Co.......... 22,000 138,014
Nakayama Steel Works LTD................... 17,000 99,778
Nippon Steel Co............................ 36,000 125,831
Noritz Corp................................ 11,000 187,797
Sekisui Plastics Co. LTD................... 8,000 40,166
Shinko Shoji............................... 12,000 193,959
Sony Corp.................................. 3,000 155,773
Suzuki Motor Co. LTD....................... 14,000 151,328
TEC Corp.*................................. 32,000 126,720
Tokyu Construction Co...................... 36,000 169,108
Tokyu Corp................................. 33,000 222,689
Toshiba Corp............................... 4,000 29,296
Tostem Corp................................ 10,000 322,255
</TABLE>
NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
JAPAN (CONTINUED)
Toyota Tsusho Corp......................... 30,000 $ 190,928
Wacoal Corp................................ 13,000 157,592
Xebio Co. LTD.............................. 6,000 222,447
Yamanouchi Pharm Jpy....................... 11,000 237,802
Yodogawa Steel Works....................... 24,000 192,989
Yokogawa Elec.............................. 22,000 196,687
-----------
5,430,781
-----------
KOREA -- 3.6%
Korea Mobile Telecommunications*........... 60 63,892
-----------
MALAYSIA -- 1.4%
Bandar Raya Developments BHD............... 44,000 83,009
DCB Holdings BHD........................... 27,000 75,224
Genting BHD................................ 400 3,455
Malayan Banking BHD........................ 12,000 96,955
-----------
258,643
-----------
MEXICO -- 4.1%
CEMEX SA de CV Series B.................... 34,000 152,294
Gruma S.A.*................................ 50,000 165,623
Grupo Carso SA de CV Series A*............. 13,000 81,441
Groupo Industria Alfa A Share.............. 7,000 94,174
Groupo Modelo SA NPA Series A.............. 21,000 79,264
Tmmsa A Mxp*............................... 23,000 161,378
-----------
734,174
-----------
NETHERLANDS -- 3.5%
Borsumij Wehry NV CVA...................... 75 1,654
CVG CVA.................................... 700 66,273
Philips Electronics NV..................... 3,500 170,604
Randstad Holdings.......................... 3,300 141,676
Telegraaf Holdingsmij CVA.................. 1,100 150,544
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
19
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1995 (UNAUDITED) -- CONTINUED
- --------------------------------------------------------------------------------
INTERNATIONAL
GROWTH FUND NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
COMMON STOCKS (Continued)
- ----------------------------------------------
<TABLE>
<S> <C> <C>
NETHERLANDS (CONTINUED)
Volker Stevin NV........................... 1,500 $ 100,112
-----------
630,863
-----------
SINGAPORE -- 0.9%
City Developments LTD...................... 10,000 61,841
DBS Land LTD............................... 16,000 47,449
Straits Steamship Land LTD................. 19,000 52,073
-----------
161,363
-----------
SPAIN -- 1.7%
Acerinox SA................................ 880 100,344
Gas Natural SDG SA Class E................. 900 113,323
Hidroelectrica del Cantabrico SA Class C... 2,840 86,127
-----------
299,794
-----------
SWEDEN -- 2.0%
Ericsson LM B-F............................ 6,400 158,025
IRO AB*.................................... 8,000 106,274
Mo Och Domsjo AB........................... 1,500 94,434
-----------
358,733
-----------
SWITZERLAND -- 2.3%
Alusuisse-Lonza Holding AG................. 80 59,334
Ascom Holding AG*.......................... 80 85,158
Nokia-Maillefer Holding SA................. 400 198,356
Zurcher Ziegeleien......................... 100 73,561
-----------
416,409
-----------
THAILAND -- 0.2%
K.R. Precision Public Colocal*............. 6,400 38,000
-----------
</TABLE>
NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
UNITED KINGDOM -- 15.4%
Ashtead Group PLC.......................... 20,000 $ 145,388
Bank of Scotland........................... 43,144 164,997
British Petroleum Co. PLC.................. 20,162 151,344
Burton Group Ord........................... 108,000 186,886
Dewhirst Group PLC......................... 51,000 155,549
GKN Ord.................................... 13,000 169,898
Goldsmiths Group PLC....................... 34,000 95,371
Imperial Chemical Industries PLC........... 12,000 152,278
London International Group................. 68,000 141,848
Low & Bonar PLC............................ 19,000 149,828
Matthews (Bernard) PLC..................... 76,000 124,306
Pentland Group PLC......................... 70,000 132,745
Rank Organisation PLC...................... 17,000 114,177
Renold PLC................................. 20,000 87,865
RMC Group PLC.............................. 6,600 113,269
RTZ Corp. PLC.............................. 11,098 162,579
Smith (Ds) Holdings........................ 16,000 156,260
Storehouse PLC............................. 30,000 140,568
Thorn EMI.................................. 5,800 135,103
Vinten Group PLC........................... 8,000 91,278
-----------
2,771,537
-----------
UNITED STATES OF AMERICA++ -- 7.9%
Autoliv AB Sponsored ADS (Sweden)*......... 4,000 243,964
China Yuchai (China) International LTD..... 9,000 110,250
Harbin Power Equipment Co. LTD Sponsored
ADR (China)*............................. 2,200 58,333
Indigo NV (Netherlands)*................... 4,400 101,750
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
20
<PAGE>
- -------------------------------------------------------------------
NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
COMMON STOCKS (Continued)
- ----------------------------------------------
<TABLE>
<S> <C> <C>
UNITED STATES OF AMERICA++ (CONTINUED)
Inversiones y Representaciones SA Sponsored
GDR (Argentina).......................... 4,000 $ 96,000
L.G. Electronics, Inc. Sponsored GDR (South
Korea)*+................................. 6,400 79,232
L.G. Electronics, Inc. (South Korea)*+..... 372 6,269
Moneda Chile Fund Limited (Chile)*......... 8,000 81,000
Rhodia-Ster SA Sponsored GDR (Brazil)*+.... 7,000 94,010
Samsung Electronics LTD GDS (South
Korea)*.................................. 14 894
Samsung Electronics LTD Sponsored GDR
(South Korea)(non-voting)*+.............. 1,000 71,000
Samsung Electronics LTD Sponsored GDR
(South Korea)(voting)*+.................. 55 6,600
Samsung Electronics LTD Sponsored GDR
(South Korea) (new, non-voting)*+........ 197 12,588
Samsung Electronics LTD Sponsored GDR
(South Korea)(new, voting)*+............. 11 1,188
</TABLE>
NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
UNITED STATES OF AMERICA++ (CONTINUED)
Samsung Engineering & Construction
Sponsored GDR (South Korea) (voting)*+... 2000 $ 19,000
Samsung Engineering & Construction
Sponsored GDR (South Korea)
(non-voting)*+........................... 810 7,695
Tele Danmark A/S Sponsored ADR (Denmark)... 800 20,700
Telecomunicacoes Brasileiras S/A --
Telebras Sponsored ADR (Brazil).......... 3000 141,021
Usiminas Siderurg Minas Gerais Sponsored
ADR (Brazil)*+........................... 13,000 143,221
Videotron Holdings PLC Sponsored ADR
(United Kingdom)*........................ 7200 119,700
-----------
1,414,415
-----------
TOTAL COMMON STOCKS
(Cost $15,265,980)........................................ 16,549,501
-----------
- ----------------------------------------------------------------------------
RIGHTS/WARRANTS -- 0.1%
- ----------------------------------------------------------------------------
MALAYSIA
DCB Holdings BHD Warrants, 12/28/99* 6,750 6,824
SWEDEN
Ericsson LM Rights,
10/27/95 640 7,485
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
21
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1995 (UNAUDITED) -- CONTINUED
- --------------------------------------------------------------------------------
INTERNATIONAL
GROWTH FUND NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
RIGHTS/WARRANTS (Continued)
- ----------------------------------------------
<TABLE>
<S> <C> <C>
SWITZERLAND
Holderbank Financiere Glarus AG Warrants,
12/20/95* 1,000 $ 1,168
UNITED KINGDOM
RMC Group Rights, 10/16/95 1,650 3,546
-----------
TOTAL RIGHTS/WARRANTS
(Cost $1,066)............................................. 19,023
-----------
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
- ----------------------------------------------------------------------------
COMMERCIAL PAPER -- 1.8%
- ----------------------------------------------------------------------------
Melville
6.650%, 10/02/95 (Cost $329,878) $ 330,000 329,878
-----------
</TABLE>
NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS -- 94.1%
(Cost $15,596,924)........................................ $16,898,402
OTHER ASSETS LESS LIABILITIES -- 5.9%.......................
1,065,524
-----------
NET ASSETS -- 100.0%........................................ $17,963,926
-----------
</TABLE>
- ------------
* Non-income producing security.
+ Rule 144A restricted security.
++ These securities are classified as United States securities as their
underlying currency is the U.S. Dollar.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
22
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF SEPTEMBER 30, 1995 (UNAUDITED)
- ------------------------------------------------------------------------
INTERNATIONAL GROWTH FUND
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY NET ASSETS
- ------------------------------------------------ ------------
<S> <C>
Aerospace....................................... 0.9%
Agriculture..................................... 1.0
Alcoholic Beverages............................. 0.8
Apparel......................................... 4.5
Automobiles..................................... 4.0
Automotive Equipment............................ 2.8
Broadcasting.................................... 1.4
Building Material Chains........................ 0.7
Building Materials.............................. 4.9
Chemicals....................................... 5.3
Closed End Country Funds........................ 0.4
Clothing Chains................................. 1.3
Computers/Office Automation..................... 1.9
Consumer Electricals............................ 1.6
Containers...................................... 1.9
Department/Discount Stores...................... 0.8
Drugs/Pharmaceuticals........................... 1.3
Electric Utilities.............................. 2.0
Electronic Instruments.......................... 4.6
Entertainment................................... 0.6
Finance Companies............................... 0.1
Gambling........................................ 0.5
Gas Utilities................................... 1.0
Grocery Products................................ 0.7
Industrial Engineering.......................... 1.5
Investment Companies............................ 0.5
Machinery/Equipment............................. 4.3
Metals.......................................... 4.6
<CAPTION>
PERCENT OF
INDUSTRY NET ASSETS
- ------------------------------------------------ ------------
<S> <C>
Money-Center Banks.............................. 3.0%
Oil Refining/Marketing.......................... 0.6
Oil/Gas Production.............................. 0.8
Other Consumer Services......................... 4.1
Other Consumer Non-Durables..................... 0.4
Other Consumer Durables......................... 0.6
Other Consumer Services......................... 0.8
Other Financial Services........................ 0.5
Other Health Services........................... 0.8
Other Prod/Manufacturing........................ 8.4
Other Transportation............................ 0.9
Other Utilities................................. 0.7
Paper........................................... 3.1
Property-Casualty Insurance..................... 1.4
Publishing...................................... 0.8
Railroads....................................... 1.3
Real Estate Brokers............................. 1.9
Semiconductors.................................. 1.1
Soaps/Cosmetics................................. 0.8
Specialty Chains................................ 1.3
Telecommunications Equip........................ 1.5
Telephone....................................... 1.4
Textiles........................................ 0.9
Wholesale Distribution.......................... 1.1
Other Assets Less Liabilities................... 5.9
-----
TOTAL........................................... 100.0%
-----
-----
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
23
<PAGE>
EMERGING COUNTRIES PORTFOLIO
- -------------------------------------------------------------------
GOAL: Seeks long-term capital appreciation and provides geographic
diversification through investment in companies in the developing countries of
the world.
REVIEW AND OUTLOOK: The Emerging Countries Portfolio enjoyed exceptionally
strong performance for the six-month period from April through September 1995.
The Portfolio returns were nearly triple the return of the IFC Investable Index,
the World Bank's benchmark measure of emerging countries stock performance.
As of September 30, 1995, the Portfolio held about one-quarter of its assets
in the stocks of companies based in Hong Kong and Brazil. Within emerging
markets worldwide, we found the best performing companies to be those that are
adapting well to their changing social, economic, and political environments.
Some of these changes include large-scale investments in economic
infrastructure, the establishment of low-cost manufacturing operations, the
privatization of state-owned industries and the emergence of new consumer
cultures. Some of the top performing stocks in the Portfolio during the period
were Brazilian airline TAM Transport Aeros., Korean manufacturer Samsung
Electronics and the Mexican shipping company Transportacion Maratima de Mexico
(TMM). TAM, a local and regional airline, is considered one of South America's
best managed companies. It recorded solid earnings and share price growth
through the period on the strength of added capacity and routes. Samsung
benefited through the period from the improving outlook for its semiconductor
products, especially dynamic random access memory chips or DRAMs. These chips
are important components in personal computers, and Samsung is the world's
leading producer of them. TMM continued to benefit from the growth of Mexican
exports that have resulted from the North American Free Trade Agreement and the
devaluation of the Mexican peso.
The emerging markets of the world are home to some of the world's most dynamic
companies and most exciting investment opportunities. To find and take advantage
of these opportunities, we have developed a unique international investing style
that draws on the best of traditional and systematic research sources to
identify companies with great growth prospects. We remain optimistic and
confident that these emerging market opportunities will help deliver solid,
long-term investment returns to our investors.
REPRESENTATIVE HOLDINGS
TAM Transport Aereos, Brazil
Samsung Electronics, South Korea
ASM Pacific, Hong Kong
CPT Telefonica de Peru, Peru
China Hong Kong Photo, Hong Kong
Oyl Industries, Malaysia
Telec de Sao Paulo, Brazil
Transportacion Maratima Mexicana, Mexico
C&P Homes, Philippines
Korea Mobile Telecom, South Korea
- --------------------------------------------------------------------------------
24
<PAGE>
A CONVERSATION WITH LARRY SPEIDELL
- -------------------------------------------------------------------
Larry Speidell
[PHOTO] Portfolio Manager
Emerging Countries Portfolio
Q. LARRY, THE EMERGING COUNTRIES PORTFOLIO TURNED
IN OUTSTANDING PERFORMANCE IN ITS CLASS FROM APRIL THROUGH SEPTEMBER. WHAT WAS
THE NICHOLAS-APPLEGATE TEAM DOING THAT WAS SO DIFFERENT FROM OTHER
EMERGING-MARKETS PORTFOLIO MANAGERS TO ACCOUNT FOR THIS SUCCESS?
A. Our investing style is truly bottom-up in nature.
We look for companies that are growing their earnings streams in ways that can
be sustained and that will receive market recognition. To make this style work
in the emerging markets of the world, we developed tools enabling us to make
direct comparisons on a company-by-company basis across industry lines and
national boundaries. I think our performance indicates that our traditional and
systematic research tools and our investing disciplines work very well in these
markets.
Q. EMERGING-MARKET STOCKS HAVE DISPLAYED SOME
RATHER WIDE PRICE SWINGS IN RECENT YEARS. IS THIS THE NATURE OF INVESTING IN
THESE MARKETS?
A. Capital markets, whether they are domestic or
international, established or emerging, typically are subject to random,
short-term cycles of advances and declines. Some markets, such as those for
small-company domestic stocks or international emerging-market stocks, have more
pronounced price swings than others. Generally, the markets that hold out the
prospects for the greatest long-term growth also are subject to greater
short-term fluctuations. We think the prospects for long-term growth from
emerging markets are exceptional, but we also expect some fluctuation along the
way. Most importantly, we believe that, managed properly, these fluctuations can
enhance long-term returns.
Q. GIVEN THESE FREQUENT AND PRONOUNCED PRICE
SWINGS, COULD STOCKS IN EMERGING MARKET COUNTRIES BE CONSIDERED A BIT RISKY FOR
THE AVERAGE INVESTOR?
A. To me, the term "average investor" conjures an
image of someone who is working for a living and trying to save for retirement
and maybe for the college education of a child or two. I think this investor
really needs to take advantage of the long-term investment opportunities
presented by emerging-markets companies. But the average investor also needs to
be mindful of his or her investing time horizon and how emerging-market stocks
will work with the other investments in his or her portfolio. That's why I
encourage investors to discuss these choices with their financial consultant and
to remain focused on meeting their long-term goals.
Q. WHAT MAKES A GOOD EMERGING-COUNTRIES
INVESTMENT?
A. We think good emerging-countries investments
have many of the same qualities as good domestic investments. Emerging countries
are the fastest growing parts of the world economy. The best emerging countries
investments tend to be companies that are managed to take advantage of
opportunities resulting from the rapid changes accompanying that growth. Some of
those changes might result from infrastructure spending, privatization efforts,
new manufacturing opportunities or a burgeoning consumer culture. The effect is
to open up new markets or new niches. We think the best emerging
- --------------------------------------------------------------------------------
25
<PAGE>
- -------------------------------------------------------------------
countries investments are the resourceful companies that are capturing these
market opportunities and prospering from them.
Q. CAN YOU GIVE SOME EXAMPLES OF THE PORTFOLIO'S
RECENT BUYS AND SELLS?
A. Sure, we recently bought shares of K.R.
Precision, a Thailand company that manufactures suspension assemblies for
personal computer disk drives. K.R. commands a 10% share of the market for this
component but is a low-cost producer. The company's excellent product quality
has contributed to its growth in sales and earnings. We also bought Barlow, a
building materials company that we believe is poised to grow as it helps to
build a new South Africa. We sold our position in Land & General, a Malaysian
conglomerate with concentrations in real estate, mining and timber. We think the
Malaysian growth story is ultimately a good one and that Land & General is a
well-run company. However, earnings have been impacted by wet weather and slow
property sales and company fundamentals are also changing as a result of a
fairly high rate of inflation.
- --------------------------------------------------------------------------------
26
<PAGE>
EMERGING COUNTRIES INSTITUTIONAL PORTFOLIO
- -------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN NICHOLAS-APPLEGATE
EMERGING COUNTRIES INSTITUTIONAL PORTFOLIO WITH THE IFC INVESTABLE INDEX.
TOTAL RETURN SINCE INCEPTION
(11/28/94 -- 09/30/95)
6.82%
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Emerging
Countries
Institutional IFC Investable
Portfolio Index
<S> <C> <C>
11/28/94 250000 250000
12/94 237014 211506
3/95 218398 180838
6/95 251427 196621
9/95 267042 195837
</TABLE>
This graph is furnished to you in accordance with SEC regulations. It compares a
$250,000 investment in the Emerging Countries Institutional Portfolio with the
International Finance Corporation ("IFC") Investable Index from the commencement
of operations of the Portfolio on November 28, 1994 to the end of the Trust's
semi-annual period on September 30, 1995, on a cumulative basis. All return
calculations reflect the reinvestment of income dividends and capital gains
distributions, if any, as well as all fees and expenses applicable to the
Portfolio.
The total returns for the Portfolio reflect the fact that fees and expenses in
excess of certain expense limits specified in the investment management
agreement have been assumed by Nicholas-Applegate Capital Management. Total
return results would have been lower had there been no assumption of fees and
expenses in excess of expense limitations.
The IFC Investable Index is an unmanaged index that measures the performance of
more than 1,100 stocks that are legally and practically available to outside
investors in 25 emerging market countries of the world.
The Index reflects the reinvestment of income dividends and capital gains
distributions, if any, but does not reflect fees, brokerage commissions, or
other expenses of investing.
Past performance is no guarantee of future performance of any index or
Nicholas-Applegate Mutual Funds.
- --------------------------------------------------------------------------------
27
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1995 (UNAUDITED)
- ------------------------------------------------------------------------
EMERGING
COUNTRIES FUND NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
COMMON STOCKS -- 85.8%
- ----------------------------------------------
<TABLE>
<S> <C> <C>
ARGENTINA -- 3.7%
Capex S. A. -- A........................... 11,500 $ 86,250
Compania Naviera Perez Companc S. A. -- B.. 29,500 129,210
Siderca S.A. -- A.......................... 82,000 64,124
----------
279,584
----------
BRAZIL -- 6.8%
Aracruz Celulose S. A. -- Preferred B...... 36,000 74,386
Ficap Marvin S.A. -- Preferred*............ 300,000 59,157
Itausa Investimentos S.A................... 100,000 62,933
Tam Transportes Aereos Regionais S.A....... 5,030,000 164,659
Telecomunicacoes de Sao Paulo S. A. --
Preferred................................ 510,000 83,235
Unipar-Uniao de Industrias Petroquimicas S.
A. -- Preferred B........................ 51,863 66,909
----------
511,279
----------
HONG KONG -- 9.8%
ASM Pacific Technology..................... 144,000 137,822
China Hong Kong Photo Production........... 246,000 113,746
Kingboard Chemicals Holdings LTD........... 390,000 121,060
Luoyang Glass Company LTD (China).......... 96,000 38,491
Sinocan Holdings LTD....................... 458,000 168,824
Varitronix International LTD............... 78,000 158,891
----------
738,834
----------
INDONESIA -- 5.3%
PT Indorama Synthetics..................... 25,000 83,628
PT Kalbe Farma............................. 8,000 31,972
</TABLE>
NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
INDONESIA (CONTINUED)
PT Roda Vivatex............................ 34,500 $ 25,519
PT Semen Gresik............................ 26,000 73,482
PT Sorini Corporation...................... 7,000 40,185
PT Sorini Corporation Local................ 6,000 34,445
PT Tigaraksa Satria........................ 11,000 40,561
PT Wicaksana Overseas...................... 26,000 69,463
----------
399,255
----------
KOREA -- 2.3%
Korea Electric Power Corp.*................ 1,670 69,352
Korea Mobile Telecommunications, Corp.*.... 60 63,892
Samsung Electronics -- Preferred NV*....... 310 40,626
Samsung Electronics -- Preferred NV --
New...................................... 3 647
----------
174,517
----------
MALAYSIA -- 3.0%
O. Y. L. Industries BHD.................... 11,000 91,065
Sistem Televisyen Malaysia BHD............. 20,000 60,895
United Engineers LTD....................... 12,000 76,896
----------
228,856
----------
MEXICO -- 9.7%
ALFA, S.A. de C.V. -- A.................... 2,000 26,907
Cemex S.A. -- B............................ 11,000 49,272
Gruma S.A.*................................ 27,000 89,436
Grupo Carso S.A.*.......................... 17,000 106,500
Grupo Financiero Inbursa S. A. -- B........ 20,000 67,972
Grupo Modelo S.A. -- C..................... 16,000 60,392
Industrias Penoles S. A. -- CP............. 25,000 93,187
Tablex S.A. de C.V.*....................... 52,000 95,286
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
28
<PAGE>
- -------------------------------------------------------------------
NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
COMMON STOCKS (Continued)
- ----------------------------------------------
<TABLE>
<S> <C> <C>
MEXICO (CONTINUED)
Transportacion Maratima Mexicana S. A. --
A*....................................... 9,000 $ 63,148
Transportacion Maratima Mexicana S. A. --
L*....................................... 10,000 79,718
----------
731,818
----------
PERU -- 2.4%
Cementos Norte Pacasmayo*.................. 11,748 27,375
CPT Telefonica de Peru S.A. -- B........... 66,663 127,231
Enrique Ferreyros S. A..................... 24,310 29,025
----------
183,631
----------
PHILIPPINES -- 2.9%
Bankard, Inc.*............................. 90,000 33,231
C & P Homes, Inc.*......................... 107,500 67,188
Selecta Dairy Products, Inc.*.............. 200,000 21,154
Southeast Asia Cement Holdings, Inc.*...... 520,000 66,000
Steniel Manufacturing Corp................. 150,000 29,423
----------
216,996
----------
SOUTH AFRICA -- 1.4%
Barlow LTD*................................ 3,000 33,895
Dorbyl Limited............................. 2,800 33,840
Pick'n Pay Stores LTD*..................... 11,000 33,895
----------
101,630
----------
THAILAND -- 7.8%
K.R. Precision Public Co. LTD -- Local*.... 14,400 85,499
Land and House Company LTD -- Foreign...... 4,000 62,801
PTT Exploration and Production -- Foreign.. 13,000 126,400
</TABLE>
NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
THAILAND (CONTINUED)
Serm Suk Co. LTD -- Local*................. 2,000 $ 25,184
Serm Suk Co. LTD -- Foreign................ 3,000 37,776
Srithai Superware Company LTD -- Foreign... 10,000 75,314
Thai Stanley Electric Co., LTD --
Foreign*................................. 15,000 41,243
Tipco Asphalt Co. LTD -- Local............. 14,800 77,848
United Communication Industry -- Foreign... 4,000 51,963
----------
584,028
----------
TURKEY -- 2.8%
Demirbank T. A. S.*........................ 162,000 13,763
Eregli Demir Ve Celik Fabrikalari T.A.S.... 570,000 70,010
Netas Telekomunik.......................... 56,000 21,781
Tat Konserve Sanayii A. S.................. 37,000 24,616
Trakya Cam Sanayii A. S.................... 138,000 15,255
Turk Siemens Kablo Ve Elektrik Sanayii A.
S........................................ 240,000 65,097
----------
210,522
----------
UNITED STATES OF AMERICA++ -- 27.8%
Cementos Diamante S. A. (Columbia)*+....... 3,400 56,049
China Yuchai International LTD (China)..... 5,000 61,250
Coca-Cola Femsa S. A. -- ADR (Mexico)...... 3,500 69,125
Czech Republic Fund, Inc................... 3,200 41,200
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
29
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1995 (UNAUDITED) -- CONTINUED
- --------------------------------------------------------------------------------
EMERGING
COUNTRIES FUND NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
COMMON STOCKS (Continued)
- ----------------------------------------------
<TABLE>
<S> <C> <C>
UNITED STATES OF AMERICA++ (CONTINUED)
Ek Chor China Motorcycle Co. LTD (China)... 6,400 $ 104,000
Emerson Radio Corp. (Hong Kong)*........... 38,800 116,400
Erciyas Biracilik VE Malt Sanayii
(Turkey)*+............................... 4,000 49,564
Flextronics International LTD
(Singapore)*............................. 4,900 126,175
GT Chile Growth Fund....................... 1,200 47,100
Gujarat Ambuja Cements -- GDR (India)...... 3,600 30,600
Hansol Paper LTD -- GDR (South Korea)*..... 1,900 40,563
India Growth Fund, Inc.*................... 2,900 50,025
Irsa, Inversiones y Representaciones S. A.
-- GDR (Argentina)*...................... 3,000 72,000
Korea Fund, Inc............................ 1,400 30,975
L.G. Electronics, Inc. GDR (South Korea)*.. 2,800 34,664
L.G. Electronics GDR -- New (South
Korea)................................... 162 2,730
La Cementos Nacional 144A (Ecuador)*+...... 230 49,450
Moneda Chile Fund LTD*..................... 10,000 101,250
Morgan Stanley India Investment Fund,
Inc...................................... 10,000 103,750
Pakistan Investment Fund, Inc.............. 7,600 50,350
Perusahaan Perseroan Industries -- ADR
(Indonesia).............................. 800 28,100
</TABLE>
NUMBER
OF SHARES VALUE
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
UNITED STATES OF AMERICA++ (CONTINUED)
Rhodia Ster S.A. -- GDR (Brazil)........... 9,000 $ 120,870
R.O.C. Taiwan Fund*........................ 1,000 10,625
Samsung Electronics LTD -- GDS (South
Korea)*.................................. 1,600 113,600
Samsung Electronics LTD -- GDS -- New
(South Korea)*........................... 197 12,588
Samsung Electronics LTD -- GDR 144A (South
Korea)*.................................. 20 1,278
SDL, Inc.*................................. 1,950 55,088
Siliconware Precision GDR (Taiwan)*........ 9,000 148,500
Taiwan Fund, Inc........................... 3,750 83,906
Telecomunicacoes Brasileiras S.A. -- ADR
(Brazil)................................. 3,200 150,422
Tower Semiconductor LTD (Israel)*.......... 1,000 32,500
Usiminas S. A. -- ADR (Brazil)*+........... 8,200 90,339
----------
2,085,036
----------
TOTAL COMMON STOCKS
(Cost $6,048,047)...................................... 6,445,986
----------
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
- ---------------------------------------------------------------------
COMMERCIAL PAPER -- 13.1%
- ---------------------------------------------------------------------
Melville
6.650%, 10/02/95......................... $ 361,000 360,867
JP Morgan
6.500%, 10/02/95......................... 620,000 619,776
----------
TOTAL COMMERCIAL PAPER
(Cost $980,643)........................................ 980,643
----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
30
<PAGE>
- -------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS -- 98.9%
(Cost $7,028,690)...................................... $7,426,629
OTHER ASSETS
LESS LIABILITIES -- 1.1%............................... 84,337
----------
NET ASSETS -- 100.0%..................................... $7,510,966
----------
</TABLE>
- ------------
* Non-income producing security
+ Rule 144A restricted security
++ These securities are classified as United States securities as their
underlying currency is the U.S. Dollar.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
31
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF SEPTEMBER 30, 1995 (UNAUDITED)
- ------------------------------------------------------------------------
EMERGING COUNTRIES FUND
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY NET ASSETS
- ---------------------------------------------- ------------
<S> <C>
Agriculture................................... 1.3%
Airlines...................................... 2.3
Alcoholic Beverages........................... 0.9
Automobiles................................... 1.4
Beverages/Soft Drinks......................... 1.8
Broadcasting.................................. 0.8
Building Materials............................ 5.7
Closed End Country Funds...................... 7.0
Containers.................................... 3.9
Department Discount Stores.................... 0.5
Drugs/Pharmaceuticals......................... 0.4
Electric Utilities............................ 2.1
Electronic Instruments........................ 0.5
Finance Companies............................. 0.5
Gambling...................................... 0.7
Grocery Products.............................. 3.0
Home Furnishings.............................. 0.8
Homebuilding.................................. 0.9
Industrial Engineering........................ 1.5
Integrated Oil Companies...................... 1.8
<CAPTION>
PERCENT OF
INDUSTRY NET ASSETS
- ---------------------------------------------- ------------
<S> <C>
Metals........................................ 3.1%
Money-Center Banks............................ 0.2
Oil/Gas Production............................ 2.7
Other Consumer Services....................... 2.3
Other Consumer Non-Durables................... 2.9
Other Consumer Durables....................... 1.5
Other Financial Services...................... 1.7
Other Manufacturing........................... 5.1
Other Transportation.......................... 2.0
Paper......................................... 2.0
Photographic Products......................... 1.5
Real Estate Brokers........................... 3.1
Semiconductors................................ 14.2
Telecommunications Equipment.................. 3.4
Telephone..................................... 3.7
Textiles...................................... 6.0
Wholesale Distribution........................ 5.7
Other Assets Less Liabilities................. 1.1
-----
TOTAL......................................... 100.0%
-----
-----
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
32
<PAGE>
(This page intentionally left blank)
- --------------------------------------------------------------------------------
33
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------
INSTITUTIONAL SERIES PORTFOLIOS
<TABLE>
<CAPTION>
NET
ASSET
VALUES
AT NET NET REALIZED
BEGINNINING INVESTMENT AND UNREALIZED
OF INCOME GAINS (LOSSES)
PERIOD (DEFICIT) ON INVESTMENTS
<S> <C> <C> <C>
- -----------------------------------------------------------------------
WORLDWIDE GROWTH
Institutional (For the
period ended 09/30/95)#... $13.06 $(0.04) $2.03
Institutional (For the year
ended 03/31/95)........... 13.15 (0.01) (0.04)
Institutional (For the
period ended 03/31/94)*... 12.50 -- 0.65
INTERNATIONAL GROWTH
Institutional (For the
period ended 09/30/95)#... 13.09 0.06 1.06
Institutional (For the year
ended 03/31/95)........... 13.47 0.02 (0.22)
Institutional (For the
period ended 03/31/94)*... 12.50 0.01 0.96
EMERGING COUNTRIES
Institutional (For the
period ended 09/30/95)#... 10.91 0.05 2.38
Institutional (For the
period ended 03/31/95)*... 12.50 0.08 (1.66)
</TABLE>
- ------------
*Worldwide Growth Institutional Portfolio commenced operations on October 1,
1993, International Growth Institutional Portfolio commenced operations on
January 3, 1994 and Emerging Countries Institutional Portfolio commenced
operations on November 28, 1994.
**Annualized.
+Net of expense reimbursement equivalent to 1.00%, 1.15%, 2.24%, 0.38%, 0.52%,
0.95%, 2.73% and 0.49% of average net assets, respectively.
++Including expenses allocated from the Master Trust Worldwide Growth Fund,
International Growth Fund, and Emerging Countries Fund of 1.20%, 1.20%,
1.20%, 1.35%, 1.35%, 1.35%, 1.60%, and 0.54%, net of expense reimbursement
equivalent to 0.09%, 0.10%, 0.16%, 0.37%, 0.50%, 0.93%, 1.25% and 0.21% of
average net assets of the Funds, respectively.
#Unaudited.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
34
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
DISTRIBUTIONS
FROM NET NET ASSET
INVESTMENT DISTRIBUTIONS VALUES AT NET ASSETS AT
INCOME FROM CAPITAL GAINS END OF PERIOD TOTAL RETURN END OF PERIOD
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
WORLDWIDE GROWTH
Institutional (For the
period ended 09/30/95)#... $ -- $ -- $15.13 15.85% $ 4,859,736
Institutional (For the year
ended 03/31/95)........... (0.04) -- 13.06 (0.34%) 4,086,668
Institutional (For the
period ended 03/31/94)*... -- -- 13.15 5.20% 2,981,559
INTERNATIONAL GROWTH
Institutional (For the
period ended 09/30/95)#... -- -- 14.21 8.56% 16,688,689
Institutional (For the year
ended 03/31/95)........... (0.06) (0.12) 13.09 (1.54%) 16,923,561
Institutional (For the
period ended 03/31/94)*... -- -- 13.47 7.60% 3,168,113
EMERGING COUNTRIES
Institutional (For the
period ended 09/30/95)#... -- -- 13.34 22.27% 3,058,246
Institutional (For the
period ended 03/31/95)*... (0.01) -- 10.91 (12.64%) 2,020,615
<CAPTION>
RATIO OF NET
RATIO OF EXPENSES INVESTMENT INCOME
TO AVERAGE NET TO AVERAGE
ASSETS+++ NET ASSETS+++
<S> <C> <C>
- ------------------------------
WORLDWIDE GROWTH
Institutional (For the
period ended 09/30/95)#... 1.35%** 0.56%**
Institutional (For the year
ended 03/31/95)........... 1.35% 0.05%
Institutional (For the
period ended 03/31/94)*... 1.34%** 0.15%**
INTERNATIONAL GROWTH
Institutional (For the
period ended 09/30/95)#... 1.40%** 0.86%**
Institutional (For the year
ended 03/31/95)........... 1.40% 0.19%
Institutional (For the
period ended 03/31/94)*... 1.40%** 0.36%**
EMERGING COUNTRIES
Institutional (For the
period ended 09/30/95)#... 1.66%** 0.62%**
Institutional (For the
period ended 03/31/95)*... 1.65%** 1.73%**
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
35
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
STATEMENTS OF ASSETS AND LIABILITIES SEPTEMBER 30, 1995
(UNAUDITED)
- -------------------------------------------------------------------
INSTITUTIONAL SERIES PORTFOLIOS
<TABLE>
<CAPTION>
WORLDWIDE INTERNATIONAL EMERGING
GROWTH GROWTH COUNTRIES
<S> <C> <C> <C>
--------------------------------------------
ASSETS
Investment in Master Trust Fund, at value (Cost $4,191,755,
$15,538,229, and $3,037,787 respectively)........................... $ 4,855,638 $ 16,675,525 $ 3,059,359
Due from advisor...................................................... 3,831 5,890 4,249
Deferred organization costs........................................... -- 5,300 8,350
Other assets.......................................................... 267 1,974 --
--------------------------------------------
Total assets........................................................ 4,859,736 16,688,689 3,071,958
--------------------------------------------
LIABILITIES
Accrued expenses...................................................... -- -- 13,712
--------------------------------------------
Total liabilities................................................... -- -- 13,712
--------------------------------------------
NET ASSETS.............................................................. $ 4,859,736 $ 16,688,689 $ 3,058,246
--------------------------------------------
COMPOSITION OF NET ASSETS
Paid in capital....................................................... $ 4,226,362 $ 15,766,707 $ 3,040,105
Accumulated undistributed net investment income (deficit)............. (3,386) 35,661 21,664
Accumulated undistributed net realized gain (loss).................... 8,681 (518,340) (212,035)
Accumulated undistributed foreign exchange gain (loss)................ 47,835 150,636 (3,300)
Net unrealized foreign exchange gain (loss)........................... 425 25,021 (931)
Net unrealized appreciation of investments............................ 579,819 1,229,004 212,743
--------------------------------------------
Net assets.......................................................... $ 4,859,736 $ 16,688,689 $ 3,058,246
--------------------------------------------
Shares of beneficial interest, no par value, issued and outstanding
(unlimited shares authorized)....................................... 321,288 1,174,182 229,183
--------------------------------------------
COMPUTATION OF
Net asset value per share of beneficial interest (Net assets/
Outstanding shares of beneficial interest).......................... $ 15.13 $ 14.21 $ 13.34
--------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
36
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
STATEMENTS OF OPERATIONS FOR THE PERIOD ENDED SEPTEMBER 30, 1995 (UNAUDITED)
- -------------------------------------------------------------------
INSTITUTIONAL SERIES PORTFOLIOS
<TABLE>
<CAPTION>
WORLDWIDE INTERNATIONAL EMERGING
GROWTH GROWTH COUNTRIES
<S> <C> <C> <C>
---------------------------------------
INVESTMENT INCOME
Net investment income from Master Trust Fund............................... $ 15,807 $ 80,074 $ 8,806
---------------------------------------
EXPENSES
Accounting fees.......................................................... 15,600 7,800 8,580
Administration fees...................................................... 647 14,559 7,842
Audit fees............................................................... 839 3,560 3,433
Insurance................................................................ 26 105 85
Legal fees............................................................... 824 3,262 485
Miscellaneous............................................................ 76 306 45
Organization costs....................................................... -- 202 310
Registration fees........................................................ 534 2,767 14,551
Shareholder reporting fees............................................... 1,776 3 903
Transfer agent fees...................................................... 5,257 5,017 240
Trustees' fees........................................................... 93 366 55
---------------------------------------
Total expenses......................................................... 25,672 37,947 36,529
Less: Reimbursement due from advisor..................................... (22,345) (33,572) (35,874)
---------------------------------------
Net expenses........................................................... 3,327 4,375 655
---------------------------------------
Net investment income................................................ 12,480 75,699 8,151
---------------------------------------
NET REALIZED & UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on:
Security transactions.................................................. 238,368 (145,193) (36,505)
Foreign exchanges...................................................... 38,567 184,232 (3,598)
Change net in unrealized appreciation of investments and foreign
currency............................................................... 353,921 1,308,686 508,602
---------------------------------------
Net gain on investments................................................ 630,856 1,347,725 468,499
---------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS......................... $ 643,336 $ 1,423,424 $ 476,650
---------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
37
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------
INSTITUTIONAL SERIES PORTFOLIOS
<TABLE>
<CAPTION>
WORLDWIDE GROWTH INTERNATIONAL GROWTH EMERGING COUNTRIES
-------------------------- ---------------------------- ----------------------------
FOR THE FOR THE FOR THE
PERIOD ENDED FOR THE PERIOD ENDED FOR THE PERIOD ENDED FOR THE
SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, PERIOD ENDED SEPTEMBER 30, PERIOD ENDED
1995 MARCH 31, 1995 MARCH 31, 1995 MARCH 31,
(UNAUDITED) 1995 (UNAUDITED) 1995* (UNAUDITED) 1995**
------------- ---------- ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income............... $ 12,480 $ 2,250 $ 75,699 $ 25,906 $ 8,151 $ 15,831
Net realized gain (loss) from
security transactions............. 238,368 (174,128) (145,193) (280,293) (36,505) (175,530)
Net realized foreign exchange gain
(loss)............................ 38,567 12,471 184,232 (31,381) (3,598) 298
Change in net unrealized
appreciation (depreciation) on
investments and foreign
currency.......................... 353,921 53,391 1,308,686 (271,653) 508,602 (296,790)
---------------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from
operations...................... 643,336 (106,016) 1,423,424 (557,421) 476,650 (456,191)
---------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHARES OF BENEFICIAL
INTEREST
Net investment income+.............. -- (18,648) -- (69,045) -- (2,318)
Capital gains+...................... -- -- -- (134,579) -- --
---------------------------------------------------------------------------------------
Total distributions............... -- (18,648) -- (203,624) -- (2,318)
---------------------------------------------------------------------------------------
TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST
Proceeds from shares sold........... 1,008,690 3,564,133 494,680 14,291,286 584,117 3,829,066
Proceeds from shares issued for
distribution reinvestment......... -- 18,537 -- 191,482 -- 2,305
Cost of shares repurchased.......... (878,958) (2,352,897) (2,152,976) (466,275) (23,136) (1,353,247)
---------------------------------------------------------------------------------------
Increase (decrease) in net assets
from transactions in shares of
beneficial interest............... 129,732 1,229,773 (1,658,296) 14,016,493 560,981 2,478,124
---------------------------------------------------------------------------------------
Total increase (decrease) in net
assets.......................... 773,068 1,105,109 (234,872) 13,255,448 1,037,631 2,019,615
NET ASSETS:
BEGINNING OF PERIOD................... 4,086,668 2,981,559 16,923,561 3,668,113 2,020,615 1,000
---------------------------------------------------------------------------------------
END OF PERIOD......................... $4,859,736 $4,086,668 $16,688,689 $16,923,561 $3,058,246 $ 2,020,615
---------------------------------------------------------------------------------------
CHANGES IN SHARES OF BENEFICIAL INTEREST
Beginning balance..................... 312,949 226,709 1,292,929 272,380 185,138 80
Shares sold........................... 68,668 269,289 35,517 1,038,973 45,870 315,931
Shares issued for distributions
reinvested.......................... -- 1,459 -- 14,495 -- 190
Shares repurchased.................... (60,329) (184,508) (154,264) (32,919) (1,825) (131,063)
---------------------------------------------------------------------------------------
Ending Balance...................... 321,288 312,949 1,174,182 1,292,929 229,183 185,138
---------------------------------------------------------------------------------------
</TABLE>
- ---------------
*Commenced operations on August 31, 1994.
**Commenced operations on November 28, 1994.
+See Financial Highlights for per share distribution amounts.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
38
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
- -------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Nicholas-Applegate Mutual Funds (the "Trust") is organized as a diversified,
open-end management investment company which offers 43 separate series comprised
of Portfolios A, with an initial sales charge, B, with a back-end sales charge,
C, with a level asset based sales charge, Institutional, with no load, and
Qualified, with no load (each a "Portfolio" and collectively the "Portfolios").
The Portfolios of the Trust seek to achieve their respective investment
objectives by investing all of their assets in corresponding series of
Nicholas-Applegate Investment Trust (the "Master Trust"), a diversified open-end
management investment company offering twelve investment vehicles (the "Funds").
Pursuant to Rule 24f-2 under the Investment Company Act, the Trust has elected
to register an indefinite number of shares. The Trust commenced operations on
April 19, 1993.
INVESTMENT INCOME
Each Portfolio accrues income, net of expenses, daily on its investment in the
applicable Fund. All of the net investment income (deficit) and realized and
unrealized gains and losses from the security transactions and foreign currency
of the Fund are allocated pro rata among the investors in the Fund at the time
of such determination.
FEDERAL INCOME TAXES
It is the Portfolios' policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of their taxable income to their shareholders. Accordingly, no
federal income tax provisions are required if the Portfolios continue to comply
with such requirements.
The Funds are treated as partnerships for federal income tax purposes. Any
interest, dividends and gains or losses of the Funds will be deemed to have been
"passed through" to the Portfolios.
Net investment income and net realized gains for the year, (or period where
appropriate), differ for financial statement and tax purposes primarily because
of one or all of the following: deferral of wash-sale losses, passive foreign
investments, unrealized appreciation/depreciation, and capital loss
carryforwards.
The character of distributions made during the year (or period where
appropriate), from net investment income or net realized gains may differ from
their ultimate characterization for federal income tax purposes due to book/tax
differences in the character of income and expense recognition.
DEFERRED ORGANIZATION COSTS
Organization Costs incurred by the Trust have been allocated to certain
Portfolios based upon management's best estimate of the costs applicable to each
Portfolio. These costs have been deferred and will be amortized over a period of
60 months from the date the Portfolios commenced operations.
In the event that any of the initial shares are redeemed by the holder during
the period of amortization of the Portfolios organization costs, the redemption
proceeds will be reduced by any such unamortized organization costs in the same
proportion as the number of initial shares being redeemed bears to the number of
those shares outstanding at the time of redemption.
2. TRANSACTIONS WITH AFFILIATES
ADVISORY AGREEMENTS
The investment adviser to the Master Trust is Nicholas-Applegate Capital
Management ("Nicholas-
- --------------------------------------------------------------------------------
39
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) -- Continued
- --------------------------------------------------------------------------------
Applegate" or "Investment Adviser"). The advisory fee is computed daily for the
Funds based upon the percentage of each Fund's average daily net assets.
EXPENSE LIMITATIONS
Nicholas-Applegate and the Trust have undertaken to limit the Portfolio's
expenses to the following annual levels through March 31, 1996. In subsequent
years, overall operating expenses for each Portfolio will not fall below the
applicable percentage limitation until the Investment Adviser has been fully
reimbursed for fees foregone or expenses paid by the Investment Adviser under
this agreement, as each Portfolio will reimburse the Investment Adviser in
subsequent years when operating expenses (before reimbursement) are less than
the applicable percentage limitation.
<TABLE>
<CAPTION>
FUND
- ------------------------------------------------------------------------
<S> <C>
Worldwide Growth Institutional Portfolio................................ 1.35%
International Growth Institutional Portfolio............................ 1.40%
Emerging Countries Institutional Portfolio.............................. 1.65%
</TABLE>
These percentages are based on the average net assets of the Portfolios,
exclusive of interest, taxes, brokerage commissions and other costs incurred in
connection with portfolio securities transactions, capital expenditures, and
extraordinary expenses.
3. INVESTMENT TRANSACTIONS
Additions and reductions in the investments in the respective Master Trust
Funds for the period ended September 30, 1995 were as follows:
<TABLE>
<CAPTION>
ADDITIONS REDUCTIONS
(000S) (000S)
--------- ----------
<S> <C> <C>
Worldwide Growth Institutional Portfolio............... $ 1,027 $ 923
International Growth Institutional Portfolio........... 495 2,153
Emerging Countries Institutional Portfolio............. 584 23
</TABLE>
4. OFF BALANCE SHEET RISKS
The Worldwide Growth Portfolios, International Growth Portfolios and Emerging
Countries Portfolios invest in the Worldwide Growth Fund, International Growth
Fund and Emerging Countries Fund, respectively, whose investment in foreign
securities may entail risks due to the potential of political and economic
instability in the countries where the securities are being offered. In
addition, foreign exchange fluctuations could affect the value of positions
held. It is the Portfolios' policy to continuously monitor their exposure to
these risks.
- --------------------------------------------------------------------------------
40
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
NOTES TO THE FINANCIAL STATEMENTS -- Continued
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES FOR NICHOLAS-APPLEGATE INVESTMENT TRUST
SEPTEMBER 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
WORLDWIDE INTERNATIONAL EMERGING
GROWTH GROWTH COUNTRIES
FUND FUND FUNDS
<S> <C> <C> <C>
----------------------------------------------
ASSETS
Investments at value
(Cost $84,111,866, $15,596,924, and $7,028,690, respectively.)... $ 97,502,981 $ 16,898,402 $ 7,426,629
Foreign currency (Cost of $2,906,766, $1,471,664, and $132,937,
respectively.)................................................... 2,924,738 1,503,472 131,190
Cash............................................................... 2,816 266 601
Receivables:
Dividends........................................................ 304,451 56,414 4,680
Interest......................................................... 687 61 179
Investment securities sold....................................... 3,467,112 26,258 45,600
Interest sold.................................................... 73,705 20,000 125,144
Deferred organization costs and other assets....................... 16,083 1,043 --
----------------------------------------------
Total assets................................................... 104,292,573 18,505,916 7,734,023
----------------------------------------------
LIABILITIES
Payables:
Investment securities purchased.................................. 2,897,240 527,772 208,233
Interests repurchased............................................ 65,645 -- 6,333
Accrued expenses................................................... 160,871 14,218 8,491
----------------------------------------------
Total liabilities.............................................. 3,123,756 541,990 223,057
----------------------------------------------
NET ASSETS........................................................... $ 101,168,817 $ 17,963,926 $ 7,510,966
----------------------------------------------
COMPOSITION OF NET ASSETS
Paid in capital.................................................... $ 80,929,155 $ 16,757,806 $ 7,289,007
Accumulated net investment income.................................. 622,491 121,689 37,672
Accumulated net realized gain (loss)............................... 5,209,729 (405,217) (205,499)
Accumulated net realized foreign exchange gain (loss).............. 1,005,723 161,764 (6,409)
Net unrealized foreign exchange gain (loss)........................ 10,604 26,406 (1,744)
Net unrealized appreciation on investments......................... 13,391,115 1,301,478 397,939
----------------------------------------------
Net assets..................................................... $ 101,168,817 $ 17,963,926 $ 7,510,966
----------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
41
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
NOTES TO THE FINANCIAL STATEMENTS -- Continued
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS FOR NICHOLAS-APPLEGATE INVESTMENT TRUST
FOR THE PERIOD ENDED SEPTEMBER 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
WORLDWIDE INTERNATIONAL EMERGING
GROWTH GROWTH COUNTRIES
FUND FUND FUND
<S> <C> <C> <C>
------------------------------------------
INVESTMENT INCOME
INCOME
Dividends............................................................. $ 898,324 $ 197,469 $ 41,044
Interest.............................................................. 72,941 11,446 14,496
------------------------------------------
Total income........................................................ 971,265 208,915 55,540
------------------------------------------
EXPENSES
Accounting fees....................................................... 37,547 37,500 24,751
Administration fees................................................... 17,726 3,301 893
Advisory fees......................................................... 495,850 92,295 31,368
Audit fees............................................................ 10,434 1,942 544
Custodian fees........................................................ 60,100 17,720 8,616
Insurance............................................................. 1,109 210 92
Legal fees............................................................ 2,079 387 99
Miscellaneous......................................................... 4,803 894 242
Organization costs.................................................... 3,157 150 --
Trustees' fees........................................................ 4,886 4,886 4,886
------------------------------------------
Total expenses...................................................... 637,691 159,285 71,491
Less: Reimbursement from advisor...................................... (42,936) (34,686) (31,340)
------------------------------------------
Net expenses........................................................ 594,755 124,599 40,151
------------------------------------------
Net investment income............................................... 376,510 84,316 15,389
------------------------------------------
NET REALIZED & UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) on:
Security transactions................................................. 5,938,498 (153,763) 15,125
Foreign exchange...................................................... 847,654 220,908 (8,570)
Change net in unrealized appreciation of investments and foreign
currency.............................................................. 7,405,788 1,352,456 770,807
------------------------------------------
Net gain on investments............................................... 14,191,940 1,419,601 777,362
------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS...................... $ 14,568,450 $ 1,503,917 $ 792,751
------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
42
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
NOTES TO THE FINANCIAL STATEMENTS -- Continued
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS FOR NICHOLAS-APPLEGATE INVESTMENT TRUST
<TABLE>
<CAPTION>
WORLDWIDE GROWTH INTERNATIONAL GROWTH EMERGING COUNTRIES
--------------------------- -------------------------- ---------------------------
FOR THE FOR THE FOR THE
PERIOD ENDED FOR THE PERIOD ENDED FOR THE PERIOD ENDED FOR THE
SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, PERIOD ENDED
1995 MARCH 31, 1995 MARCH 31, 1995 MARCH 31,
(UNAUDITED) 1995* (UNAUDITED) 1995* (UNAUDITED) 1995*
<S> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income.................. $ 376,510 $ 240,302 $ 84,316 $ 33,806 $ 15,389 $ 22,283
Net realized gain (loss) from security
transactions......................... 5,938,498 (1,802,878) (153,763) (293,491) 15,125 (220,624)
Net realized foreign exchange gain
(loss)............................... 847,654 281,823 220,908 (30,063) (8,570) 461
Change in net unrealized appreciation
(depreciation) of investments and
foreign currency..................... 7,405,788 277,524 1,352,456 (270,042) 770,807 (372,912)
------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations.......... 14,568,450 (1,003,229) 1,503,917 (559,790) 792,751 (570,792 )
------------------------------------------------------------------------------------
TRANSACTIONS IN INTERESTS
Contributions by partners.............. 6,139,326 39,169,871 1,178,580 15,092,291 3,762,898 5,244,412
Withdrawals by partners................ (17,101,331 ) (30,285,996) (2,350,968 ) (609,534) (324,761 ) (1,393,542 )
------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from transactions in interests..... (10,962,005 ) 8,883,875 (1,172,388 ) 14,482,757 3,438,137 3,850,870
------------------------------------------------------------------------------------
Total increase in net assets......... 3,606,445 7,880,646 331,529 13,922,967 4,230,888 3,280,078
NET ASSETS:
BEGINNING OF PERIOD...................... 97,562,372 89,681,726 17,632,397 3,689,430 3,280,078 --
------------------------------------------------------------------------------------
END OF PERIOD............................ $101,168,817 $ 97,562,372 $ 17,963,926 $17,612,397 $ 7,510,966 $ 3,280,078
------------------------------------------------------------------------------------
</TABLE>
- ---------------
*Worldwide Growth Fund commenced operations on April 19, 1993, International
Growth Fund commenced operations on January 3, 1994 and Emerging Countries Fund
commenced operations on November 28, 1994.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
43
<PAGE>
NICHOLAS-APPLEGATE INVESTMENT TRUST
NOTES TO THE FUNDS' FINANCIAL STATEMENTS (UNAUDITED)
- -------------------------------------------------------------------
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Nicholas-Applegate Investment Trust (the "Master Trust"), a diversified,
open-end management investment company organized as a Delaware business trust,
is comprised of twelve investment vehicles (each a Fund and collectively the
"Funds") as of September 30, 1995. Each Fund has up to five Portfolios which
have invested in the respective series of the Master Trust to achieve their
investment objective. The Trust commenced operations on April 19, 1993.
SECURITIES TRANSACTIONS
Equity securities are valued at the last sale price (for exchange-listed
securities) or the mean between the last bid and asked price (if lacking any
sales and for over-the-counter securities). Debt securities generally are valued
at the mean between the last bid and asked prices. Securities with 60 days or
less remaining to maturity are valued on an amortized cost basis which
approximates market value.
Securities for which market quotations are not readily available are valued at
fair value determined in good faith by or under the direction of the Master
Trust's Board of Trustees.
Securities transactions are recognized on the trade date. Realized gains and
losses from securities transactions are calculated using the first-in, first-out
method. Dividend income is recognized on the ex-dividend date, and interest
income is recorded on the accrual basis. Discounts and premiums on securities
purchased are amortized over the life of the respective securities. The
prospectus for the Nicholas-Applegate Mutual Funds describes each Fund's
policies with respect to declaration and payment of dividends and distribution
of capital gains.
FOREIGN CURRENCY TRANSLATION
Foreign currency balances of the Worldwide Growth Fund, International Growth
Fund and Emerging Countries Fund other than the cost of investments, are
translated into U.S. dollar values at the bid price of such currency against the
U.S. dollar last quoted on the valuation date.
Gains and losses on securities transactions resulting from fluctuations in
foreign currency exchange rates are not isolated. The Funds report these foreign
currency related transactions as components of realized and unrealized gains for
financial reporting purposes, whereas such components are treated as ordinary
income for Federal income tax purposes.
FEDERAL INCOME TAXES
The Funds are treated as partnerships for federal income tax purposes. Any
interest, dividends and gains or losses of a Fund will be deemed to have been
"passed through" to the Portfolios.
DEFERRED ORGANIZATION COSTS
Organization costs incurred by the Master Trust have been allocated to the
various Funds based upon management's best estimate of the costs applicable to
each Fund. These costs have been deferred and will be amortized over a period of
60 months from the date the Funds commenced operations.
B. TRANSACTIONS WITH AFFILIATES
ADVISORY AGREEMENTS
The investment adviser to the Master Trust is Nicholas-Applegate Capital
Management ("Nicholas-
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44
<PAGE>
NICHOLAS-APPLEGATE INVESTMENT TRUST
NOTES TO THE FUNDS' FINANCIAL STATEMENTS (UNAUDITED) -- Continued
- --------------------------------------------------------------------------------
Applegate") The advisory fee is computed daily for the Funds based upon the
following percentages of each Fund's average daily net asset:
<TABLE>
<CAPTION>
FIRST $500 NEXT $500 EXCESS OF
FUND MILLION MILLION $1 BILLION
- -------------------------------------------------- ---------- --------- ----------
<S> <C> <C> <C>
Worldwide Growth Fund............................. 1.00% 0.90% 0.85%
International Growth Fund......................... 1.00% 0.90% 0.85%
Emerging Countries Fund........................... 1.25% 1.25% 1.25%
</TABLE>
C. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of investment securities, other than
short-term obligations, for the period ended September 30, 1995, were as
follows:
<TABLE>
<CAPTION>
FUND PURCHASES SALES
- -------------------------------------------------- ---------- -------
<S> <C> <C>
Worldwide Growth Fund............................. $ 42,231 $58,805
International Growth Fund......................... 8,688 10,497
Emerging Countries Fund........................... 4,289 1,596
</TABLE>
At September 30, 1995, the net unrealized appreciation (depreciation) based on
the cost of investments for Federal income tax purposes was as follows (in
000's):
<TABLE>
<CAPTION>
TAX GROSS GROSS NET
COST OF UNREALIZED UNREALIZED UNREALIZED
FUND INVESTMENTS APPRECIATION (DEPRECIATION) APPRECIATION
- -------------------------------------------------- ----------- ------------ -------------- ------------
<S> <C> <C> <C> <C>
Worldwide Growth Fund............................. $84,112 $16,952 $(3,561) $13,391
International Growth Fund......................... 15,597 2,048 (747) 1,301
Emerging Countries Fund........................... 7,029 694 (296) 398
</TABLE>
D. OFF BALANCE SHEET RISKS
The Worldwide Growth, International Growth and Emerging Countries Funds
investment in foreign securities may entail risks due to the potential of
political and economic instability in the countries where the securities are
being offered. In addition, foreign exchange fluctuations could affect the value
of positions held. It is the Funds policy to continuously monitor its exposure
to these risks.
- --------------------------------------------------------------------------------
45
<PAGE>
NICHOLAS-APPLEGATE INVESTMENT TRUST
NOTES TO THE FUNDS' FINANCIAL STATEMENTS -- Continued
- --------------------------------------------------------------------------------
E. SELECTED RATIO DATA
<TABLE>
<CAPTION>
RATIO OF RATIO OF NET
OPERATING INVESTMENT
EXPENSES TO INCOME
AVERAGE NET TO AVERAGE NET PORTFOLIO
ASSETS+ ASSETS+ TURNOVER RATE
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
WORLDWIDE GROWTH
For the period ended 09/30/95++........................................ 1.20%** 0.76%** 45.16%
For the year ended 03/31/95............................................ 1.20% 0.24% 98.54%
For the period ended 03/31/94*......................................... 1.20%** 0.01%** 95.09%
INTERNATIONAL GROWTH
For the period ended 09/30/95++........................................ 1.35%** 0.91%** 50.20%
For the year ended 03/31/95............................................ 1.35% 0.24% 74.88%
For the period ended 03/31/94*......................................... 1.35%** 0.41%** 23.71%
EMERGING COUNTRIES
For the period ended 09/30/95++........................................ 1.60%** 0.60%** 36.70%
For the period ended 03/31/95*......................................... 1.60%** 1.73%** 60.79%
</TABLE>
- ------------
*Worldwide Growth Fund, International Growth Fund and Emerging Countries Fund
commenced operations on April 19, 1993, January 3, 1994 and November 28, 1994,
respectively.
**Annualized.
+Net of expense reimbursement equivalent to 0.09%, 0.10%, 0.16%, 0.37%, 0.50%,
0.93%, 1.25% and 0.21% of average net assets, respectively.
++Unaudited.
- --------------------------------------------------------------------------------
46
<PAGE>
NICHOLAS=APPLEGATE-Registered Trademark- MUTUAL FUNDS
- -----------------------------------------------------------------------
600 West Broadway
San Diego, California 92101
