<PAGE>
NICHOLAS|APPLEGATE -Registered Trademark-
MUTUAL FUNDS, ANNUAL REPORT
PORTFOLIOS A, B AND C: MARCH 31, 1997
<PAGE>
JAPAN UNITED MEXICO SWITZERLAND THAILAND
STATES
<PAGE>
At Nicholas-Applegate, our unconventional perspective on investing is
changing the world of money management. Ours is a philosophy that enables us
to find companies with great potential around the world. Our bottom-up style
and team approach, along with our international analyst network/exchange
program and proprietary database, make it possible for us to seek out
promising stocks throughout the world.
COMPUTER CHIP MANUFACTURER: JAPAN -- Of the myriad of choices around the
world, the U.S.' largest computer chip maker opted for the services of a
Japanese packaging company, a company that has since become a thriving stock
in one of our portfolios.
ENTERTAINMENT: MEXICO -- The upturn in the Mexican economy has spawned an
explosive entertainment industry. Spearheading that growth is an
international promoter of live concerts that is just one of our growing
stocks.
FURNITURE MANUFACTURER: UNITED STATES -- With a complete management makeover,
a well-established furniture manufacturer and retailer has revamped its
entire business plan to aggressively pursue a younger market, making it an
archetypical Nicholas-Applegate holding.
GLOBAL TEMP AGENCY: SWITZERLAND -- Due to the streamlining of work forces
abroad, Europe's largest global temporary help agency was an ideal addition
to some of our portfolios.
PIZZA: THAILAND -- Pizza is fast becoming the most popular food among the
younger generations in Thailand, making a Thai holding company of several
fast-food chains the perfect candidate to be a Nicholas-Applegate holding.
Disclosure: International investing involves special risks, including
currency and political risks not associated with domestic investments.
Distributor: Nicholas-Applegate Securities.
<PAGE>
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
PAGE
<S> <C>
Letter to Shareholders.................................................. 1
Long-Term View of the Global Equity and Bond Markets.................... 2
The Portfolios' Review and Outlook, Performance, and the Funds'
Schedules of Investments
Emerging Growth....................................................... 3
Core Growth........................................................... 11
Income & Growth....................................................... 15
Balanced Growth....................................................... 20
Government Income..................................................... 25
Money Market.......................................................... 28
Emerging Countries.................................................... 30
International Small Cap Growth........................................ 36
International Core Growth............................................. 42
Worldwide Growth...................................................... 46
The Portfolios'
Financial Highlights.................................................. 52
Statements of Assets and Liabilities.................................. 58
Statements of Operations.............................................. 64
Statements of Changes in Net Assets................................... 70
Notes to the Financial Statements..................................... 82
Notes to the Funds' Financial Statements................................ 94
Report of Independent Auditors
Nicholas-Applegate Mutual Funds....................................... 98
Nicholas-Applegate Investment Trust................................... 99
</TABLE>
- ------------
This report is authorized for distribution to shareholders and to others only
when preceded or accompanied by a currently effective prospectus for
Nicholas-Applegate Series A, B and C Portfolios. Distributor: Nicholas-Applegate
Securities.
<PAGE>
LETTER TO SHAREHOLDERS
- ------------------------------------------------------------------------
DEAR FELLOW SHAREHOLDERS:
The recently ended fiscal year was both eventful and revealing. The U.S. stock
market continued its 1990s bull-market run, favoring the largest of U.S.
companies.
Many of the larger companies that benefited from the narrowness of the advance
did show the kinds of improving fundamental strengths that have brought
unprecedented returns to domestic stocks over the past ten years. However, other
large-company stocks appear to have enjoyed substantial returns for reasons
other than business success.
We believe the current situation has led to excellent opportunities in the
stocks of international companies and dynamic, growing small and mid-sized U.S.
companies.
Your portfolio may have become overexposed to large company stocks as a result
of their strong returns in recent years. If so, now may be an opportune time to
take advantage of other promising areas of the capital markets. I urge you to
speak with your financial consultant today about how your assets are currently
allocated.
Your asset allocation plan is vitally important to your long-term financial
success. At Nicholas-Applegate, our disciplined approach to investing results in
mutual funds that work especially well in asset allocation plans. We do this by
remaining true to style and committed to an investment plan for each fund.
Our specialty is identifying companies poised for growth. We do this on a
bottom-up, or stock-by-stock, basis, using some of the investment industry's
most refined tools. Our extensive network of analysts provides us with "eyes and
ears" around the world. And our database of more than 20,000 companies worldwide
helps us uncover and capture new opportunities anywhere and anytime they happen.
Thank you for your continued support of Nicholas-Applegate Mutual Funds.
Sincerely,
[SIGNATURE]
John D. Wylie
President
Nicholas-Applegate Mutual Funds
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1
<PAGE>
LONG-TERM VIEW OF GLOBAL EQUITY AND BOND MARKETS
- ------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
THE GROWTH OF
$1.00 INVESTED
AT YEAR-END
1969 THROUGH
DECEMBER 1996
LONG-TERM GOVERNMENT SMALL COMPANY INTERNATIONAL LARGE COMPANY
BONDS INFLATION STOCK STOCKS STOCK
<S> <C> <C> <C> <C> <C>
Dec 1969 1 1 1 1 1
Dec 1970 1.121059215 1.0549164 0.825661484 0.894879897 1.040065616
Dec 1971 1.269371876 1.0903471 0.961892527 1.174150171 1.188927419
Dec 1972 1.341548263 1.1275496 1.004544102 1.615611805 1.414539684
Dec 1973 1.326700092 1.226754 0.694095606 1.386730661 1.20715054
Dec 1974 1.384471488 1.376446 0.555657342 1.079598462 0.887643365
Dec 1975 1.511786318 1.4729922 0.849132107 1.480157725 1.217873832
Dec 1976 1.765084762 1.5438525 1.33634258 1.535504278 1.508253479
Dec 1977 1.752937265 1.64837 1.675467221 1.833772011 1.399900469
Dec 1978 1.732297675 1.7971741 2.068551129 2.462774507 1.491736529
Dec 1979 1.710920777 2.0363232 2.967633147 2.615043053 1.766805621
Dec 1980 1.643397054 2.2887604 4.150984033 3.253885817 2.339593716
Dec 1981 1.67392721 2.4933678 4.727097865 3.220297086 2.224747404
Dec 1982 2.349546704 2.589908 6.050934266 3.192647959 2.701053085
Dec 1983 2.364859959 2.6882263 8.451243074 3.978387612 3.309163144
Dec 1984 2.730867828 2.7945158 7.887625237 4.291261194 3.516525973
Dec 1985 3.576530396 2.8998879 9.832862666 6.725433675 4.647371699
Dec 1986 4.453883483 2.9326524 10.50654155 11.42914677 5.505765733
Dec 1987 4.333002093 3.0619682 9.529705152 14.27881017 5.793758911
Dec 1988 4.752133652 3.1972889 11.70955501 18.36070287 6.767648768
Dec 1989 5.612965247 3.3458762 12.90143612 20.34295824 8.898838582
Dec 1990 5.95998744 3.5501842 10.11974905 15.6249679 8.616507619
Dec 1991 7.11022832 3.6589726 14.63662624 17.5769639 11.24880574
Dec 1992 7.682876394 3.7651067 18.05418764 15.49396734 12.11161228
Dec 1993 9.084266831 3.8685871 21.84168912 20.59845037 13.32153781
Dec 1994 8.378384135 3.9720702 22.52000493 22.25896356 13.49568968
Dec 1995 11.0316799 4.0728976 30.2804398 24.83012571 18.54706335
Dec 1996 10.93 4.21 35.62 26.41 22.83
Source: Ibbotson
Associates
</TABLE>
IBBOTSON ASSOCIATES GROWTH OF $1.00 CHART
SMALL COMPANY STOCK
Small Company Stocks data represents the smallest one-fifth of NYSE stocks
from 1/1/26 through 12/31/81 and Dimensional Fund Advisors ("DFA") Small Company
Fund thereafter, with all income dividends and capital gains distributions, if
any, reinvested.
LARGE COMPANY STOCK
Large Company Stocks data represents the Standard & Poor's 500 Index which
contains 500 industrial, transportation, utility and financial companies
regarded as generally representative of the U.S. stock market.
LONG-TERM GOVERNMENT BONDS
Long Term Government Bond data is based on a one bond portfolio whose
rolling approximate maturity is twenty years.
INTERNATIONAL STOCK
International stock data represents the MSCI EAFE Index. The Index is
considered to be a generally accepted benchmark for major overseas markets.
TREASURY BILLS
Treasury bill data is measured by a portfolio having a minimum maturity of
one month.
INFLATION
The Consumer Price Index is a measure of change in consumer prices as
determined by a monthly survey of the U.S. Bureau of Labor Statistics. Many
pension and employment contracts are tied to changes in consumer prices, as
protection against inflation and reduced purchasing power.
Each equity and bond 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 (except for the DFA Small Company
Fund's returns which are net of transaction costs). All results are historical.
Past performance is no guarantee of future performance of any index or
Nicholas-Applegate Mutual Funds.
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2
<PAGE>
EMERGING GROWTH FUND
PORTFOLIOS A, B & C
- ------------------------------------------------------------------------
MANAGEMENT TEAM
Catherine Somhegyi,
Partner, Chief Investment Officer,
Global Equity Management
Thomas E. Bleakley,
Portfolio Manager
Ronald J. Krystyniak,
Portfolio Manager
John C. McCraw,
Portfolio Manager
GOAL: The Nicholas-Applegate Emerging Growth Fund seeks to maximize long-term
capital appreciation through investment primarily in U.S. equity securities of
companies with market capitalizations below $500 million.
REVIEW AND OUTLOOK: Smaller-cap growth stocks were among the market leaders
during the first half of the Fund's fiscal year. However, after a summer
sell-off in the technology sector, cautious investors began to favor
larger-companies' stocks.
Technology stocks, which contributed to strong gains earlier in the year,
experienced a difficult environment in later quarters. The pullback in
technology issues was most pronounced within smaller-cap segments. Earnings
disappointments among networking companies, increasing competition sector-wide,
and the strong U.S. dollar were key factors adversely affecting technology
stocks. The combination of technology stocks' underperformance and the Fund's
slightly higher exposure within this sector, relative to the Russell 2000 Growth
Index, negatively impacted returns.
Stock selection in the energy and retail trade sectors made a positive
contribution to the Fund's performance during the year. Varco International
Inc., a manufacturer of drilling equipment, and Trico Marine Services Inc., a
provider of marine support services to the offshore drilling industry, both
posted strong results as they capitalized on more favorable industry-wide trends
in the energy sector. Ross Stores Inc., an operator of off-price, brand-name
apparel stores, also exhibited solid gains from positive same-store sales trends
and strong earnings growth.
The Fund retains solid fundamentals. The median earnings growth rate for the
Fund's holdings as of March 31 was 36%. We continue to identify and invest in
companies we believe hold great potential for growth.
Going forward, we expect the pace of earnings growth among issues in the broad
market to slow. As a result, we believe investors will return their focus to
stocks offering consistent earnings strength. We believe our bottom-up,
growth-oriented approach should excel in such an environment.
REPRESENTATIVE HOLDINGS
Wolverine World Wide
Vitesse Semiconductor
CKE Restaurants
Ethan Allen Interiors
Trico Marine Services
St. John Knits
Varco International
Ciber
Uniphase
Pier 1 Imports
- --------------------------------------------------------------------------------
3
<PAGE>
EMERGING GROWTH PORTFOLIOS
- ------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
EMERGING GROWTH RUSSELL 2000
PORTFOLIO A GROWTH INDEX
<S> <C> <C>
7/31/85 $9,475 $10,000
12/31/85 10,520 10,697
12/31/86 11,111 11,080
12/31/87 10,606 9,919
12/31/88 13,373 11,940
12/31/89 16,934 14,348
12/31/90 15,404 11,850
12/31/91 23,886 17,916
12/31/92 26,733 19,308
12/31/93 30,796 21,887
12/31/94 29,554 21,355
12/31/95 39,860 27,988
12/31/96 47,142 31,140
3/31/97 40,214 27,853
Annualized Total Returns As of 03/31/97
1 Year 5 Years 10 Years
- -11.18% 9.85% 10.91%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
EMERGING GROWTH RUSSELL 2000
PORTFOLIO B GROWTH INDEX
<S> <C> <C> <C> <C> <C> <C>
31-Jul-85 $10,000 $10,000
31-Dec-85 $11,074 $10,697
31-Dec-86 11,619 11,080
31-Dec-87 11,019 9,919
31-Dec-88 13,805 11,940 Annualized Total Returns As of 03/31/97
31-Dec-89 17,370 14,348 1 Year 5 Years 10 Years
31-Dec-90 15,697 11,850 -11.72% 9.94% 10.73%
31-Dec-91 24,188 17,916
31-Dec-92 26,897 19,308
31-Dec-93 30,788 21,887
31-Dec-94 29,283 21,355
31-Dec-95 39,210 27,988
31-Dec-96 46,002 31,140
31-Mar-97 39,159 27,853
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
EMERGING GROWTH RUSSELL 2000
PORTFOLIO C GROWTH INDEX
<S> <C> <C> <C> <C> <C> <C>
31-Jul-85 $10,000 $10,000
31-Dec-85 11,074 10,697
31-Dec-86 11,619 11,080
31-Dec-87 11,019 9,919
31-Dec-88 13,805 11,940 Annualized Total Returns As of 03/31/97
31-Dec-89 17,370 14,348 1 Year 5 Years 10 Years
31-Dec-90 15,697 11,850 -6.81% 10.35% 10.81%
31-Dec-91 24,188 17,916
31-Dec-92 26,897 19,308
31-Dec-93 30,787 21,887
31-Dec-94 29,330 21,355
31-Dec-95 39,367 27,988
31-Dec-96 46,286 31,140
31-Mar-97 39,417 27,853
</TABLE>
The graphs compare a $10,000 investment in the Emerging Growth Portfolio A
(front load), the Emerging Growth Portfolio B (back-end load) and the Emerging
Growth Portfolio C (level load) with a similar investment in the Russell 2000
Growth Index, on a cumulative and average annual total return basis. Returns
reflect the reinvestment of income dividends and capital gains distributions, if
any, as well as all fees and expenses. Performance figures include the maximum
applicable sales charge of 5.25% for Portfolio A shares. The effect of the
maximum contingent deferred sales charge for Portfolio B shares (maximum 5%
declining to 0% over six years) is included in Portfolio B performance.
Performance is affected by a 12b-1 Plan which commenced at inception of each
Portfolio.
Performance results reflect the total returns of a predecessor limited
partnership and a pooled trust managed by Nicholas-Applegate Capital Management
prior to the effective date of the Portfolio's registration statement on
12/27/93, 5/31/95 and 12/27/93, respectively. Limited partnership/pooled trust
returns are restated to reflect all fees and expenses applicable to each
Portfolio. If the limited partnership and pooled trust had been registered as
investment companies under federal securities laws, their performance might have
been adversely affected because of the additional restrictions applicable to
registered investment companies.
Total returns reflect the fact that fees and expenses in excess of certain
expense limitations specified in the investment management agreement have been
deferred by the Adviser. Total return results would have been lower had there
been no deferral.
The Russell 2000 Growth Index is an unmanaged index comprised of stocks of
smaller U.S. companies with greater-than-average growth orientation and
represents the universe of stocks that generally have higher price-to-book and
price-earnings ratios. Its returns reflect the reinvestment of income dividends
and capital gains distributions, if any, but do not reflect fees, brokerage
commissions, or other expenses of investing.
Past performance is no indication of future performance. Investment returns and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
- --------------------------------------------------------------------------------
4
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997
- ------------------------------------------------------------------------
EMERGING GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
COMMON STOCK -- 90.9%
- ----------------------------------------------------------------------------
ADVERTISING -- 0.5%
CKS Group, Inc.*........................... 15,700 $ 329,700
Lamar Advertising Co.*..................... 30,900 625,725
Universal Outdoor Holdings, Inc.*.......... 59,000 1,711,000
------------
2,666,425
------------
AEROSPACE -- 0.3%
AAR Corp................................... 35,500 1,065,000
Doncasters PLC*............................ 27,100 525,062
------------
1,590,062
------------
AGRICULTURE -- 0.5%
Dekalb Genetics Corp. Class B.............. 48,500 2,582,625
------------
AIR FREIGHT/SHIPPING -- 0.5%
Airnet Systems, Inc.*...................... 22,400 358,400
Expeditors International of Washington,
Inc...................................... 90,400 2,169,600
------------
2,528,000
------------
AIRLINES -- 0.7%
Alaska Air Group Inc.*..................... 91,800 2,352,375
Midwest Express Holdings, Inc.*............ 25,900 980,962
------------
3,333,337
------------
APPAREL -- 3.6%
Authentic Fitness Corp..................... 54,600 805,350
Cole Kenneth Productions, Inc.*............ 121,000 2,541,000
Genesco, Inc.*............................. 41,100 462,375
Nautica Enterprises, Inc.*................. 119,350 2,998,669
Playtex Products, Inc.*.................... 40,000 435,000
St. John Knits, Inc........................ 53,900 2,331,175
Tultex Corp.*.............................. 53,600 415,400
Vans, Inc.*................................ 61,800 726,150
Wolverine Worldwide, Inc................... 199,000 7,263,500
------------
17,978,619
------------
AUTOMOTIVE EQUIPMENT -- 0.4%
Special Devices, Inc.*..................... 25,300 430,100
Tower Automotive, Inc.*.................... 43,400 1,692,600
------------
2,122,700
------------
BIOTECHNOLOGY -- 1.5%
Arqule, Inc.*.............................. 22,100 342,550
Bio-Technology General Corp.*.............. 88,400 1,105,000
Biopsys Medical, Inc.*..................... 38,000 940,500
DepoTech Corp.*............................ 8,800 133,051
Guilford Pharmaceuticals, Inc.*............ 73,300 1,520,975
Martek Biosciences Corp.*.................. 32,300 565,250
Matritech, Inc............................. 13,700 69,356
Molecular Biosystems, Inc.*................ 59,500 542,938
Pharmaceutical Product Development,
Inc.*.................................... 44,600 892,000
Sonus Pharmaceuticals, Inc.*............... 18,700 493,212
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
</TABLE>
BIOTECHNOLOGY (CONTINUED)
<TABLE>
<S> <C> <C>
Vertex Pharmaceuticals, Inc.*.............. 19,700 $ 792,925
------------
7,397,757
------------
BROADCASTING -- 1.6%
Argyle Television, Inc. Class A*........... 27,300 689,325
Emmis Broadcasting Corp. Class A*.......... 41,100 1,590,056
Evergreen Media Corp. Class A*............. 93,450 2,727,572
Saga Communications, Inc. Class A*......... 50,062 1,038,787
Telemundo Group, Inc. Class A*............. 10,000 286,250
Westwood One, Inc.*........................ 82,700 1,529,950
------------
7,861,940
------------
BUILDING MATERIALS -- 1.0%
Advanced Lighting Technologies, Inc.*...... 20,100 442,200
AFC Cable Systems, Inc.*................... 21,800 452,350
Falcon Building Products, Inc. Class A*.... 45,000 787,500
Hexcel Corp.*.............................. 115,300 2,032,163
NCI Building Systems, Inc.*................ 20,000 647,500
Northwest Pipe Co.*........................ 500 8,312
Triangle Pacific Corp.*.................... 15,200 418,000
------------
4,788,025
------------
BUILDING MATERIAL CHAIN -- 0.3%
Eagle Hardware & Garden, Inc.*............. 95,400 1,717,200
------------
CATALOG/OUTLET STORES -- 0.1%
Coldwater Creek, Inc.*..................... 14,100 195,638
Insight Enterprises, Inc.*................. 3,700 91,575
------------
287,213
------------
CHEMICALS -- 0.7%
Lilly Industries, Inc. Class A............. 12,200 221,125
Mississippi Chemical Corp.................. 60,700 1,449,212
OM Group, Inc.............................. 64,650 1,818,281
Spartech Corp.............................. 17,900 201,375
------------
3,689,993
------------
CLOTHING CHAINS -- 2.0%
99 Cents Only Stores*...................... 34,000 684,250
Buckle, Inc. (The)*........................ 7,500 200,625
Gadzooks, Inc.*............................ 52,300 1,647,450
Men's Wearhouse, Inc.*..................... 72,800 2,002,000
Pacific Sunwear of California*............. 3,700 121,175
Paul Harris Stores, Inc.*.................. 24,500 379,750
Ross Stores, Inc........................... 61,800 1,568,175
Stage Stores, Inc.*........................ 57,200 1,258,400
Stein Mart, Inc.*.......................... 69,400 1,977,900
------------
9,839,725
------------
COAL MINING -- 0.3%
Zeigler Coal Holding Co.................... 54,600 1,296,750
------------
COMMERCIAL/INDUSTRIAL SERVICES -- 0.1%
Phymatrix Corp.*........................... 52,800 699,600
------------
COMPUTER/OFFICE AUTOMATION -- 2.4%
Advanced Digital Information Corp.*........ 52,600 670,650
Brooktrout Technology, Inc.*............... 14,700 218,663
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
5
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997 -- CONTINUED
- --------------------------------------------------------------------------------
EMERGING GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK (Continued)
- ---------------------------------------------------------
COMPUTER/OFFICE AUTOMATION (CONTINUED)
<TABLE>
<S> <C> <C>
BTG, Inc.*................................. 55,900 $ 978,056
Discreet Logic, Inc.*...................... 42,300 248,512
Encad, Inc.*............................... 42,500 1,269,688
GEAC Computer Corp. LTD*................... 40,500 962,544
In Focus Systems, Inc.*.................... 52,600 907,350
Larscom, Inc. Class A*..................... 62,500 523,438
Logitech International*.................... 16,000 260,000
Microtouch Systems, Inc.*.................. 52,200 1,030,950
Network Appliance, Inc.*................... 117,000 3,802,500
Safeguard Scientifics, Inc.*............... 19,700 389,075
Splash Technology Holdings, Inc.*.......... 36,300 907,500
Sunquest Information Systems, Inc.*........ 11,300 110,175
------------
12,279,101
------------
CONTAINERS -- 0.1%
U.S. Can Corp.*............................ 20,900 318,725
------------
CONTRACTING DRILLING -- 2.0%
Atwood Oceanics, Inc.*..................... 32,500 2,019,063
Cliffs Drilling Co.*....................... 37,800 2,244,375
Marine Drilling Co., Inc.*................. 307,400 5,456,350
Unit Corp.*................................ 16,000 144,000
------------
9,863,788
------------
DEPARTMENT/DISCOUNT STORES -- 0.1%
Tuesday Morning Corp.*..................... 14,500 466,222
------------
DRUGS/PHARMACEUTICALS -- 3.8%
Alkermes, Inc.*............................ 26,200 366,800
Amylin Pharmaceuticals Inc.*............... 122,400 1,484,100
Anesta Corp.*.............................. 65,500 1,129,875
Curative Health Services, Inc.*............ 96,500 2,219,500
Dura Pharmaceuticals, Inc.*................ 67,700 2,420,275
Incyte Pharmaceuticals, Inc.*.............. 57,200 2,974,400
Inhale Therapeutic Systems*................ 15,300 292,612
Medicis Pharmaceutical Corp. Class A*...... 28,350 843,412
NBTY, Inc.*................................ 39,500 597,438
NCS Healthcare, Inc. Class A*.............. 21,500 486,438
Parexel International Corp.*............... 78,800 1,812,400
Pathogenesis Corp.*........................ 22,100 552,500
Sangstat Medical Corp.*.................... 57,000 1,546,125
Sepracor, Inc.*............................ 77,500 1,787,344
Theragencis Corp.*......................... 45,100 732,875
------------
19,246,094
------------
ELECTRONIC DATA PROCESSING -- 0.3%
Banctec, Inc.*............................. 45,300 1,155,150
Factset Research Systems, Inc.*............ 10,100 195,688
Nova Corp.*................................ 19,300 306,388
------------
1,657,226
------------
ELECTRONIC INSTRUMENTS/DIVERSIFIED -- 1.7%
Checkpoint Systems, Inc.*.................. 153,900 2,635,538
Coherent, Inc.*............................ 53,000 2,534,062
Lecroy Corp.*.............................. 25,500 663,000
Molecular Dynamics, Inc.*.................. 10,800 159,300
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
</TABLE>
ELECTRONIC INSTRUMENTS/DIVERSIFIED (CONTINUED)
<TABLE>
<S> <C> <C>
Orbotech LTD*.............................. 16,500 $ 297,000
Plexus Corp.*.............................. 45,100 1,330,450
SBS Technologies, Inc.*.................... 9,300 141,825
Veeco Instruments, Inc..................... 18,500 543,438
------------
8,304,613
------------
ENTERTAINMENT -- 0.4%
Hollywood Entertainment Corp.*............. 92,300 2,249,812
------------
ENTERTAINMENT/MUSIC CHAINS -- 0.1%
Guitar Center, Inc.*....................... 39,600 635,362
------------
ENVIRONMENTAL SERVICES -- 1.8%
Newpark Resources, Inc.*................... 36,385 1,591,844
Superior Services, Inc.*................... 44,100 981,225
Tetra Technologies, Inc.*.................. 66,100 1,454,200
United Waste Systems, Inc.*................ 130,900 4,876,025
------------
8,903,294
------------
FINANCE COMPANIES -- 2.9%
AmeriCredit Corp.*......................... 185,700 3,226,538
Imperial Credit Industries, Inc.*.......... 263,400 5,300,925
Ocwen Financial Corp.*..................... 58,500 1,696,500
Resource Bancshares Mortgage Group, Inc.... 43,500 685,125
Sirrom Capital Corp........................ 61,000 2,211,250
Southern Pacific Funding Corp.*............ 88,150 1,531,606
------------
14,651,944
------------
FOOD CHAINS -- 0.6%
Quality Food Centers, Inc.*................ 75,400 3,166,800
------------
GROCERY PRODUCTS -- 0.4%
Hudson Foods, Inc. Class A................. 55,500 867,187
Morningstar Group, Inc.*................... 62,200 1,197,350
------------
2,064,537
------------
HOMEBUILDING -- 0.1%
Diamond Home Services, Inc.*............... 5,800 103,675
Pacific Greystone Corp.*................... 21,600 270,000
------------
373,675
------------
HOME FURNISHINGS -- 1.4%
Ethan Allen Interiors, Inc................. 85,500 3,726,457
Foamex International, Inc.*................ 103,100 1,610,938
Furniture Brands International, Inc.*...... 89,500 1,342,500
O'Sullivan Industries Holdings, Inc.*...... 42,400 535,300
------------
7,215,195
------------
HOSPITALS -- 0.4%
National Surgery Centers, Inc.*............ 66,500 1,928,500
------------
INVESTMENT COMPANIES -- 0.2%
Everen Capital Corp........................ 22,200 449,550
Hambrecht & Quist Group*................... 25,600 428,800
------------
878,350
------------
LIFE INSURERS -- 0.1%
Protective Life Corp.*..................... 9,000 378,000
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
6
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK (Continued)
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
LODGING -- 0.8%
Capstar Hotel Co.*......................... 30,850 $ 863,800
Doubletree Corp.*.......................... 26,300 933,650
Singature Resorts, Inc.*................... 50,100 1,198,926
Suburban Lodges of America, Inc.*.......... 11,800 212,400
Wyndham Hotel Corp.*....................... 34,000 1,003,000
------------
4,211,776
------------
MACHINERY/EQUIPMENT -- 2.1%
Ballantyne of Omaha, Inc.*................. 10,350 159,131
CFM Technologies, Inc.*.................... 23,100 684,338
DT Industries, Inc......................... 65,200 1,711,500
Kuhlman Corp............................... 53,800 1,250,850
Magnetek, Inc.*............................ 73,800 1,190,025
Miller Industries, Inc.*................... 145,050 1,740,600
Robbins & Myers, Inc....................... 20,400 540,600
Texex Corp.*............................... 21,900 287,868
Uniphase Corp.*............................ 50,900 1,883,300
Watsco, Inc. Class A....................... 34,450 878,475
------------
10,326,687
------------
MANAGED HEALTHCARE/HMO'S/PPO'S -- 1.4%
Coventry Corp.*............................ 180,600 2,054,324
CRA Managed Care, Inc.*.................... 35,700 1,338,750
FPA Medical Management, Inc.*.............. 110,043 2,118,328
Maxicare Health Plans, Inc.*............... 32,000 804,000
OccuSystems, Inc.*......................... 21,700 488,250
------------
6,803,652
------------
MEDICAL/NURSING/HEALTH SERVICES -- 1.2%
American Homepatient, Inc.*................ 24,300 540,674
Diagnostic Health Services, Inc.*.......... 19,900 156,712
EmCare Holdings, Inc.*..................... 42,800 1,150,250
Multicare Companies, Inc.*................. 64,800 1,223,100
Rotech Med Corp.*.......................... 41,200 756,061
Pediatrix Medical Group, Inc.*............. 26,800 881,050
PMR Corp.*................................. 9,700 212,188
Sunrise Assisted Liviing, Inc.*............ 29,900 837,400
------------
5,757,435
------------
MEDICAL SPECIALTIES -- 0.7%
Cardiothoracic Systems, Inc.*.............. 15,300 325,124
Impath, Inc.*.............................. 8,500 153,000
Medical Resources, Inc.*................... 70,600 767,774
Urologix, Inc.*............................ 9,000 153,000
Vivus, Inc.*............................... 51,500 2,060,000
------------
3,458,898
------------
MEDICAL SUPPLIES -- 2.2%
Adac Laboratories*......................... 40,800 851,700
Capstone Pharmacy Services*................ 55,400 609,400
ESC Medical Systems LTD*................... 27,600 696,900
Graham Field Health Products, Inc.*........ 45,300 492,638
Hologic, Inc.*............................. 52,600 1,282,124
Keravision, Inc.*.......................... 3,000 30,374
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
</TABLE>
MEDICAL SUPPLIES (CONTINUED)
<TABLE>
<S> <C> <C>
Lunar Corp.*............................... 17,300 $ 592,524
Meridian Diagnostics, Inc.................. 4,400 48,400
Minimed, Inc.*............................. 52,200 1,344,150
Molecular Devices Corp.*................... 32,200 446,774
Penederm, Inc.*............................ 19,400 213,400
Respironics, Inc.*......................... 1,000 21,250
Sabratek Corp.*............................ 17,800 356,000
Safeskin Corp.*............................ 175,000 3,171,874
Serologicals Corp.*........................ 22,950 344,250
Ventana Medical Systems, Inc.*............. 37,400 523,600
------------
11,025,358
------------
METALS -- 0.8%
Lone Star Technologies, Inc.*.............. 26,100 495,900
Mueller Industries, Inc.*.................. 85,900 3,360,838
------------
3,856,738
------------
MILITARY /DEFENSE TECHNOLOGY -- 0.3%
Avondale Industries, Inc.*................. 22,600 389,850
Tracor, Inc.*.............................. 52,600 1,222,950
------------
1,612,800
------------
MULTI-LINE INSURERS -- 0.0%
Delphi Financial Group, Inc. Class A*...... 5,200 172,900
------------
OCEAN FREIGHT/SHIPPING -- 0.1%
OMI Corp.*................................. 71,100 693,224
------------
OIL/GAS PRODUCTION -- 1.5%
Abacan Resource Corp.*..................... 51,400 404,774
Abraxas Petroleum Corp.*................... 21,900 240,558
Brown (Tom), Inc.*......................... 47,100 871,350
Harken Energy Corp.*....................... 235,100 1,160,806
Nuevo Energy Co.*.......................... 25,200 967,050
Petsec Energy LTD*......................... 49,400 975,650
Swift Energy Co.*.......................... 45,200 1,067,850
Vintage Petroleum, Inc..................... 20,000 600,000
Western Gas Resources, Inc................. 75,300 1,355,400
------------
7,643,438
------------
OIL REFINING/MARKETING -- 0.0%
Tesoro Petroleum Corp.*.................... 21,600 226,800
------------
OILFIELD SERVICES/EQUIPMENT -- 5.4%
3DX Technology*............................ 25,400 279,400
Camco International, Inc................... 57,700 2,538,800
Energy Ventures, Inc.*..................... 35,500 2,187,688
Global Industries LTD*..................... 120,100 2,567,138
Maverick Tube Corp.*....................... 800 14,200
Oceaneering International, Inc.*........... 76,300 1,192,188
Pool Energy Services Co.*.................. 84,600 1,247,850
Pride Petroleum Services, Inc.*............ 129,400 2,685,050
Seacor Holdings, Inc.*..................... 71,200 3,818,100
Stolt Comex Seaway SA*..................... 27,700 560,924
Trico Marine Services, Inc.*............... 66,300 3,149,250
Tuboscope Vetco International, Corp.*...... 190,600 2,596,924
Varco International, Inc.*................. 106,100 2,652,500
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
7
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997 -- CONTINUED
- --------------------------------------------------------------------------------
EMERGING GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK (Continued)
- ---------------------------------------------------------
OILFIELD SERVICES/EQUIPMENT (CONTINUED)
<TABLE>
<S> <C> <C>
Veritas DGC, Inc.*......................... 77,000 $ 1,520,750
------------
27,010,762
------------
OTHER COMMERCIAL/INDUSTRIAL SERVICES -- 6.3%
Administaff, Inc.*......................... 36,900 613,462
Affiliated Computer Services, Inc. Class
A*....................................... 69,400 1,587,525
ASE Test LTD*.............................. 8,000 255,000
Billing Information Concepts*.............. 58,200 1,396,800
CareMatrix Corp.*.......................... 22,800 418,950
Caribiner International, Inc.*............. 54,200 2,533,850
CCC Information Services Group*............ 54,000 675,000
Ciber, Inc.*............................... 111,600 2,817,900
Computer Task Group, Inc................... 68,600 2,435,300
Data Processing Resources Corp.*........... 50,300 943,124
Diamond Technology Partners Class A*....... 2,310 11,983
Fine Host Corp.*........................... 17,900 420,650
Forrester Research, Inc.*.................. 21,800 397,850
G&K Services, Inc., Class A................ 17,950 538,500
ICTS International NV*..................... 3,800 30,638
Information Management Resources, Inc.*.... 36,900 580,800
Learning Tree International*............... 29,600 828,800
Meta Group, Inc.*.......................... 23,500 452,374
Metzler Group, Inc.*....................... 46,600 1,077,624
National Techteam, Inc.*................... 40,800 632,400
Norrell Corp............................... 49,200 1,211,550
On Assignment, Inc.*....................... 11,200 282,800
Perseptive Biosystems, Inc.*............... 769 6,056
Personnel Group of America, Inc.*.......... 25,900 508,288
PMT Services, Inc.*........................ 90,350 993,850
Rental Service Corp.*...................... 17,100 324,900
Romac International, Inc.*................. 66,600 1,177,988
Staffmark, Inc.*........................... 25,900 339,938
Sykes Enterprises, Inc.*................... 57,450 1,874,306
Technology Solutions Co.*.................. 54,750 1,512,469
Vincam Group, Inc.*........................ 28,400 777,450
Warrantech Corp.*.......................... 75,900 683,100
Whittman-Hart, Inc.*....................... 144,900 3,079,124
------------
31,420,349
------------
OTHER CONSUMER DURABLES -- 0.5%
Action Performance Cos., Inc.*............. 59,900 1,168,050
Sola International, Inc.*.................. 67,800 1,567,874
------------
2,735,924
------------
OTHER CONSUMER NON-DURABLES -- 0.1%
Helen of Troy LTD*......................... 15,000 356,250
------------
OTHER CONSUMER SERVICES -- 0.3%
Equity Corp. International*................ 17,800 373,800
ITT Educational Services*.................. 19,800 428,174
Memberworks, Inc.*......................... 21,400 347,750
National Education Corp.*.................. 40,100 506,262
------------
1,655,986
------------
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
OTHER FINANCIAL SERVICES -- 0.0%
Metris Companies, Inc.*.................... 2,100 $ 52,500
------------
OTHER HEALTH TECHNOLOGY/SERVICES -- 0.8%
Enterprise Systems, Inc.*.................. 51,300 1,154,250
Envoy Corp.*............................... 91,100 2,129,462
Horizon Mental Health Management, Inc.*.... 13,050 200,644
Medquist, Inc.*............................ 9,600 211,200
Premier Research Worldwide, Ltd.*.......... 15,600 257,400
Sterile Recoveries, Inc.*.................. 400 7,000
------------
3,959,956
------------
OTHER PRODUCERS/MANUFACTURING -- 2.1%
BE Aerospace, Inc.*........................ 144,700 3,545,150
Belden, Inc................................ 43,600 1,553,250
BMC Industries, Inc........................ 53,300 1,505,724
Griffon Corp.*............................. 54,300 651,600
Interface, Inc............................. 39,100 979,944
Libbey, Inc................................ 52,300 1,634,374
Rexel, Inc.*............................... 31,400 569,124
Special Metals Corp.*...................... 14,000 245,000
------------
10,684,166
------------
OTHER RETAIL TRADE -- 0.2%
RDO Equipment Co. Class A*................. 19,900 348,250
Renters Choice, Inc.*...................... 61,600 885,500
------------
1,233,750
------------
OTHER TECHNOLOGY -- 0.5%
Computer Products, Inc.*................... 87,900 1,285,538
Henry (Jack) & Associates.................. 28,050 624,113
Renaissance Solutions, Inc.*............... 26,000 656,500
------------
2,566,151
------------
OTHER TRANSPORTATION -- 0.3%
Coach USA, Inc.*........................... 35,800 1,038,200
Hvide Marine, Inc. Class A*................ 23,500 534,624
------------
1,572,824
------------
PAPER -- 0.1%
American Pad & Paper Co.*.................. 40,500 607,336
------------
PIPELINES -- 0.2%
Offshore Logistics, Inc.*.................. 52,600 841,600
------------
PRINTING/FORMS -- 0.4%
Applied Graphics Technologies, Inc.*....... 41,100 1,453,912
Consolidated Graphics, Inc.*............... 16,000 458,000
------------
1,911,912
------------
PROPERTY-CASUALTY INSURERS -- 0.5%
Capmac Holdings, Inc....................... 43,300 1,152,862
HCC Insurance Holdings, Inc................ 54,000 1,323,000
------------
2,475,862
------------
PUBLISHING -- 0.3%
Golden Books Family Entertainment, Inc.*... 90,000 832,500
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
8
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK (Continued)
- ---------------------------------------------------------
PUBLISHING (CONTINUED)
<TABLE>
<S> <C> <C>
Mecklermedia Corp.*........................ 30,800 $ 739,200
------------
1,571,700
------------
REAL ESTATE BROKERS/SERVICES -- 0.5%
CB Commercial Real Estate Services Group,
Inc.*.................................... 26,500 629,374
Redwood Trust, Inc......................... 45,200 2,090,500
------------
2,719,874
------------
RECREATIONALPRODUCTS -- 0.1%
Rockshox, Inc.*............................ 17,000 253,938
------------
REGIONAL BANKS -- 0.7%
Bay View Capital Corp...................... 17,400 887,400
Peoples Heritage Financial Group, Inc...... 52,900 1,626,674
Provident Bankshares Corp.................. 32,100 1,235,850
------------
3,749,924
------------
REAL ESTATE INVESTMENT TRUSTS -- 1.4%
American General Hospitality Corp.......... 26,400 719,400
Essex Property............................. 35,100 1,048,612
FelCor Suite Hotels, Inc................... 21,500 790,124
Golf Trust of America, Inc.*............... 43,600 1,062,750
Health Care Real Estate Investment Trust... 33,900 805,124
Kilroy Realty Corp.*....................... 37,025 985,791
Storage USA, Inc........................... 27,000 995,624
Walden Residential Properties, Inc......... 35,700 861,262
------------
7,268,687
------------
RENTAL/LEASING COMPANIES -- 0.7%
Leasing Solutions, Inc.*................... 59,200 1,110,000
Team Rental Group, Inc.*................... 25,100 527,100
Ugly Duckling Corp.*....................... 71,100 1,306,463
Winthrop Resources Corp.................... 15,700 467,075
------------
3,410,638
------------
RESTAURANTS -- 1.5%
CKE Restaurants, Inc....................... 162,950 3,605,269
Foodmaker, Inc.*........................... 168,200 1,703,025
Logan's Roadhouse, Inc.*................... 17,100 359,100
Rare Hospitality International, Inc.*...... 43,500 565,500
Showbiz Pizza Time, Inc.*.................. 62,400 1,092,000
------------
7,324,894
------------
RETAIL/FOOD DISTRIBUTION -- 0.6%
Richfood Holdings, Inc..................... 120,650 2,262,188
Suiza Foods Corp.*......................... 31,200 834,600
------------
3,096,788
------------
SAVINGS & LOAN ASSOCIATIONS -- 0.1%
MAF Bancorp, Inc........................... 15,800 616,200
------------
SEMICONDUCTORS/ELECTRONIC COMPONENTS -- 7.2%
Aavid Thermal Technologies*................ 29,400 345,450
Advanced Technology Materials, Inc.*....... 34,100 588,225
Anadigics, Inc.*........................... 39,500 1,066,500
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
</TABLE>
SEMICONDUCTORS/ELECTRONIC COMPONENTS (CONTINUED)
<TABLE>
<S> <C> <C>
Benchmarq Microelectronics, Inc.*.......... 17,800 $ 222,500
Credence Systems Corp.*.................... 71,600 1,396,200
Cymer, Inc.*............................... 44,100 1,582,088
Fusion Systems Corp.*...................... 61,300 1,455,875
Gasonics International Corp.*.............. 21,500 306,375
Hadco Corp................................. 61,100 2,367,625
Integrated Process Equipment Corp.*........ 96,700 1,619,725
Jabil Circuit, Inc.*....................... 133,700 6,024,856
JPM Co.*................................... 700 11,725
Kulicks & Soffa Industries, Inc.*.......... 77,300 1,632,962
Level One Communications, Inc.*............ 21,400 588,500
MRV Communications, Inc.*.................. 50,900 1,132,525
Photronics, Inc.*.......................... 34,600 1,016,375
Radisys Corp.*............................. 41,100 1,202,175
Sawtek, Inc.*.............................. 80,000 2,300,000
SDL, Inc.*................................. 9,900 169,538
Sipex Corp.*............................... 31,900 933,075
Smart Modular Technologies, Inc.*.......... 50,000 1,187,500
STB Systems, Inc.*......................... 17,500 511,875
Stormedia, Inc.*........................... 89,000 1,023,500
Trident Microsystems, Inc.*................ 102,000 1,377,000
Vitesse Semiconductor Corp.*............... 188,700 5,212,838
Zygo Corp.*................................ 30,200 687,050
------------
35,962,057
------------
SOAPS/COSMETICS -- 0.1%
American Safety Razor Co.*................. 22,500 347,990
------------
SOFTWARE -- 8.5%
Aspen Technology, Inc.*.................... 78,400 2,136,400
Avant Corp.*............................... 48,400 1,312,850
C Net, Inc.*............................... 27,200 666,400
CBT Group PLC Sponsored ADR*............... 80,900 4,034,888
Credit Management Solutions, Inc.*......... 5,000 51,250
Dataworks Corp.*........................... 37,500 543,750
Documentum, Inc.*.......................... 37,000 684,500
Excite, Inc.*.............................. 44,300 476,225
Geotel Communications Corp.*............... 5,100 56,100
Harbinger Corp.*........................... 101,150 2,225,300
HNC Software, Inc.*........................ 70,700 1,847,038
HPR, Inc.*................................. 12,000 135,000
Hyperion Software Corp.*................... 125,500 2,070,750
Infinity Financial Technology, Inc.*....... 17,700 305,325
Infoseek Corp.*............................ 40,500 288,562
Lycos, Inc.*............................... 45,000 632,812
Manugistics Group, Inc.*................... 36,400 1,328,600
Mercury Interactive Corp.*................. 80,200 781,950
National Instruments Corp.*................ 68,500 2,209,125
Pegasystems, Inc.*......................... 53,900 1,084,738
Perceptron, Inc.*.......................... 38,200 1,002,750
Quick Response Services, Inc.*............. 16,600 437,824
Rational Software Corp.*................... 67,200 1,386,000
Rogue Wave Software*....................... 17,800 162,424
Sapient Corp.*............................. 13,800 441,600
Saville Systems Ireland PLC*............... 72,200 2,075,750
Seibel Systems, Inc.*...................... 113,600 1,902,800
Select Software Tools Sponsored ADR*....... 70,050 700,500
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
9
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997 -- CONTINUED
- --------------------------------------------------------------------------------
EMERGING GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK (Continued)
- ---------------------------------------------------------
SOFTWARE (CONTINUED)
<TABLE>
<S> <C> <C>
SPSS, Inc.*................................ 20,100 $ 499,988
Tecnomatix Technologies Ltd.*.............. 3,300 68,475
Triteal Corp.*............................. 10,000 117,500
Trusted Information Systems, Inc.*......... 35,400 460,200
Verilink Corp.*............................ 13,600 81,600
Veritas Software Co.*...................... 57,200 1,694,550
Versant Object Technology Corp.*........... 5,000 44,375
Viasoft, Inc.*............................. 40,000 1,300,000
Videoserver, Inc.*......................... 92,300 2,180,588
Visio Corp.*............................... 75,600 2,948,400
Walker Interactive Systems, Inc.*.......... 40,800 512,550
Wind River Systems, Inc.*.................. 84,000 1,984,500
------------
42,873,937
------------
SPECIALTY CHAINS -- 2.3%
Cort Business Services Corp.*.............. 42,300 967,612
Duty Free International, Inc............... 63,300 925,762
Finish Line, Inc. Class A*................. 19,900 442,775
Linens'n Things, Inc.*..................... 107,100 2,503,462
Micro Warehouse, Inc.*..................... 107,000 1,404,375
Party City Corp.*.......................... 10,900 170,313
Pier 1 Imports, Inc........................ 130,500 2,300,062
West Coast Entertainment Corp.*............ 2,500 18,125
West Marine, Inc.*......................... 25,500 841,500
Williams-Sonoma, Inc.*..................... 72,900 2,095,875
------------
11,669,861
------------
SPECIALTY INSURERS -- 0.1%
International Alliance Services, Inc.*..... 56,800 568,000
------------
TELECOMMUNICATIONS EQUIPMENT -- 2.6%
Coherent Communications Systems Corp.*..... 41,900 722,775
Comverse Technology, Inc.*................. 48,500 1,915,750
Davox Corp.*............................... 31,400 973,400
Digital Microwave Corp.*................... 82,100 1,580,425
Gilat Satellite Networks LTD*.............. 56,800 1,718,200
Harmonic Lightwaves, Inc.*................. 88,800 1,221,000
Natural Microsystems Corp.*................ 82,400 1,637,700
Nice Systems LTD*.......................... 27,500 563,750
P Com, Inc.*............................... 52,900 1,375,400
Remec, Inc.*............................... 25,600 550,400
Spectran Corp.*............................ 13,600 176,800
Teledata Communications LTD*............... 33,500 603,000
------------
13,038,600
------------
TELECOMMUNICATION SERVICES -- 0.3%
Pacific Gateway Exchange, Inc.*............ 23,000 575,000
Pricellular Corp. Class A*................. 57,168 471,636
U. S. Long Distance Corp.*................. 35,600 413,850
------------
1,460,486
------------
TEXTILES -- 0.1%
Culp, Inc.................................. 17,400 300,150
------------
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
TOBACCO PRODUCTS -- 0.2%
General Cigar Holdings, Inc.*.............. 35,100 $ 780,975
------------
TRUCKING -- 0.7%
Knight Transportation, Inc.*............... 20,600 466,075
Swift Transportation Co.*.................. 36,400 928,200
U.S. Xpress Enterprises, Inc. Class A*..... 700 9,800
USFreightways Corp......................... 57,200 1,480,050
Yellow Corp.*.............................. 29,400 554,924
------------
3,439,049
------------
WHOLESALE DISTRIBUTION -- 1.2%
Anicom, Inc.*.............................. 49,900 422,591
Brightpoint, Inc.*......................... 191,250 3,131,719
Cellstar Corp.*............................ 75,100 1,595,875
Central Garden & Pet Co.*.................. 6,800 123,250
CHS Electronics, Inc.*..................... 28,700 584,762
------------
5,858,197
------------
TOTAL COMMON STOCKS
(Cost $409,848,367)...................................... 456,148,188
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
- --------------------------------------------------------------------------------
COMMERCIAL PAPER -- 7.0%
- --------------------------------------------------------------------------------
Associates Corp. -- 3.7%
6.75%, 04/01/97................................... $18,673,000 18,673,000
Merrill Lynch -- 3.3%
6.35%, 04/01/97................................... 16,214,000 16,214,000
-------------
TOTAL COMMERCIAL PAPER
(Cost $34,887,000)............................................. 34,887,000
-------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 4.5%
- --------------------------------------------------------------------------------
J. P. Morgan & Co., Inc. $22,666,000 at 6.25%,
(Agreement dated 03/31/97; to be repurchased at
$22,669,935 on 04/01/97; collateralized by
$23,265,000 FHMA Notes, 7.125% due 04/30/26)
(VALUE $23,811,037)
(Cost $22,666,000)................................ 22,666,000 22,666,000
-------------
- --------------------------------------------------------------------------------
RIGHTS/WARRANTS -- 0.0%
- --------------------------------------------------------------------------------
Perseptive Biosystems Class G, Warrants
(Cost $1,033)..................................... 435 1,033
-------------
TOTAL INVESTMENTS -- 102.4%
(Cost $467,402,401)............................................ 513,702,221
LIABILITIES IN EXCESS OF OTHER ASSETS (2.4%)..................... (12,139,688)
-------------
NET ASSETS 100.0%................................................ $ 501,562,533
-------------
</TABLE>
- ------------
* Non-Income Producing Security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
10
<PAGE>
CORE GROWTH FUND
PORTFOLIOS A, B & C
- ------------------------------------------------------------------------
MANAGEMENT TEAM
Jack C. Marshall, Jr.,
Partner, Chief Investment Officer,
Institutional Equity Management
Andrew B. Gallagher,
Senior Portfolio Manager
Maren Lindstrom,
Portfolio Manager
Thomas J. Sullivan,
Portfolio Manager
GOAL: The Nicholas-Applegate Core Growth Fund seeks to maximize long-term
capital appreciation by investing primarily in U.S. companies with more than
$500 million in market capitalization.
REVIEW AND OUTLOOK: Smaller-cap growth stocks were among the market leaders
during the first half of the Fund's fiscal year. However, in the last six
months, investors turned from growth stocks toward a narrow group of larger-cap
stocks. As a result, factors that contributed to strong results early in the
period impacted returns in later quarters and the Fund's performance trailed
that of the Standard & Poor's 500 Index.
Technology stocks, which had contributed to strong gains, experienced a
difficult environment. The pull-back was most pronounced within the small- and
mid-cap segments as investors moved from stocks with higher earnings growth. In
addition, underperformance among healthcare holdings and our overweighting in
this sector relative to the S&P 500 negatively affected returns.
The Fund's stock selections in energy and utility sectors contributed
positively to performance. Oilfield service companies Ensco International and BJ
Services both posted strong returns as they capitalized on more favorable trends
in the oil and gas industry.
Over the last six months, we have reduced our technology exposure on a
stock-specific basis. While there are strong pockets of opportunity in the
software, semiconductor, and wireless communications industries, we have
virtually eliminated the Fund's exposure to the computer hardware and networking
telecommunications segments due to several factors adversely affecting earnings
trends in these areas.
The Fund retains compelling fundamentals. The median earnings growth rate for
the Fund's holdings as of March 31 was 28%. Going forward, we expect the pace of
earnings growth among issues in the broad market to slow. As a result, we
believe investors will return their focus to stocks offering consistent earnings
strength. Because of our bottom-up, growth-oriented approach, we believe we
should excel in such an environment.
REPRESENTATIVE HOLDINGS
Safeway
Oxford Health Plans
USA Waste Services
EMC
Host Marriott
MGIC Investment
Associates First Capital
AES
Consolidated Stores
McKesson
- --------------------------------------------------------------------------------
11
<PAGE>
CORE GROWTH PORTFOLIOS
- ------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CORE GROWTH PORTFOLIO C S&P 500 INDEX S&P 400 MID-CAP INDEX
<S> <C> <C> <C>
9/30/85 $ 9,475.00 $ 10,000.00 $ 10,000.00
12/31/85 $ 11,802.00 $ 11,714.00 $ 11,765.38
12/31/86 $ 15,588.00 $ 13,898.00 $ 13,673.59
12/31/87 $ 16,051.00 $ 14,630.00 $ 13,394.70
12/31/88 $ 17,977.00 $ 17,050.00 $ 16,189.95
12/31/89 $ 23,935.00 $ 22,441.00 $ 21,944.35
12/31/90 $ 23,965.00 $ 21,758.00 $ 20,820.87
12/31/91 $ 37,056.00 $ 28,384.00 $ 31,255.66
12/31/92 $ 41,829.00 $ 30,548.00 $ 34,982.08
12/31/93 $ 49,805.00 $ 33,624.00 $ 39,861.97
12/31/94 $ 44,328.00 $ 34,067.00 $ 38,430.72
12/31/95 $ 61,012.00 $ 46,874.00 $ 50,324.62
12/31/96 $ 70,680.00 $ 57,634.00 $ 59,981.98
3/31/97 $ 64,816.00 $ 59,171.00 $ 59,055.94
Annualized Total Returns As of 03/31/97
1 Year 5 Years 10 Years
- -4.22% 16.26% 12.38%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CORE GROWTH PORTFOLIO B S&P 500 INDEX S&P 400 MID-CAP INDEX
<S> <C> <C> <C>
9/30/85 $ 10,000.00 $ 10,000.00 $ 10,000.00
12/31/85 $ 12,438.00 $ 11,714.00 $ 11,765.38
12/31/86 $ 16,322.87 $ 13,897.77 $ 13,673.59
12/31/87 $ 16,698.26 $ 14,629.64 $ 13,394.70
12/31/88 $ 18,581.81 $ 17,050.39 $ 16,189.95
12/31/89 $ 24,583.23 $ 22,440.53 $ 21,944.35
12/31/90 $ 24,454.51 $ 21,757.85 $ 20,820.87
12/31/91 $ 37,575.72 $ 28,384.26 $ 31,255.66
12/31/92 $ 42,142.91 $ 30,548.21 $ 34,982.08
12/31/93 $ 49,879.11 $ 33,624.00 $ 39,861.97
12/31/94 $ 44,073.23 $ 34,066.54 $ 38,430.72
12/31/95 $ 60,344.98 $ 46,873.86 $ 50,324.62
12/31/96 $ 69,499.24 $ 57,634.24 $ 59,981.98
3/31/97 $ 63,616.00 $ 59,171.41 $ 59,055.94
Annualized Total Returns As of 03/31/97
1 Year 5 Years 10 Years
- -4.51% 11.51% 12.27%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CORE GROWTH PORTFOLIO C S&P 500 INDEX S&P 400 MID-CAP INDEX
<S> <C> <C> <C>
9/30/85 $ 10,000.00 $ 10,000.00 $ 10,000.00
12/31/85 $ 12,438.00 $ 11,714.00 $ 11,765.38
12/31/86 $ 16,322.87 $ 13,897.77 $ 13,673.59
12/31/87 $ 16,698.26 $ 14,629.64 $ 13,394.70
12/31/88 $ 18,581.81 $ 17,050.39 $ 16,189.95
12/31/89 $ 24,583.23 $ 22,440.53 $ 21,944.35
12/31/90 $ 24,454.51 $ 21,757.85 $ 20,820.87
12/31/91 $ 37,575.72 $ 28,384.26 $ 31,255.66
12/31/92 $ 42,142.91 $ 30,548.21 $ 34,982.08
12/31/93 $ 49,824.11 $ 33,624.00 $ 39,861.97
12/31/94 $ 44,078.23 $ 34,066.54 $ 38,430.72
12/31/95 $ 60,300.98 $ 46,873.86 $ 50,324.62
12/31/96 $ 69,464.24 $ 57,634.24 $ 59,981.98
3/31/97 $ 63,633.72 $ 59,171.41 $ 59,055.94
Annualized Total Returns As of 03/31/97
1 Year 5 Years 10 Years
0.56% 11.78% 12.28%
</TABLE>
The graphs compare a $10,000 investment in the Core Growth Portfolio A (front
load), the Core Growth Portfolio B (back-end load) and the Core Growth Portfolio
C (level load) with a similar investment in the Standard & Poor's 500 Index
("S&P 500") and the Standard & Poor's 400 Index ("S&P 400"), on a cumulative and
average annual total return basis. Returns reflect the reinvestment of income
dividends and capital gains distributions, if any, as well as all fees and
expenses. Performance figures include the maximum applicable sales charge of
5.25% for Portfolio A shares. The effect of the maximum contingent deferred
sales charge for Portfolio B shares (maximum 5% declining to 0% over six years)
is included in Portfolio B performance. Performance is affected by a 12b-1 Plan
which commenced at inception of each Portfolio.
Performance results reflect the total returns of a predecessor limited
partnership managed by Nicholas-Applegate Capital Management prior to the
effective date of the Portfolio's registration statement on 4/19/93, 5/31/95 and
4/19/93; respectively. Limited partnership returns are restated to reflect all
fees and expenses applicable to each Portfolio class. If the limited partnership
had been registered as an investment company under federal securities laws, its
performance might have been adversely affected because of the additional
restrictions applicable to registered investment companies.
Total returns reflect the fact that fees and expenses in excess of certain
expense limitations specified in the investment management agreement have been
deferred by the Adviser. Total return results would have been lower had there
been no deferral.
The S&P 500 Index is an unmanaged index containing 500 industrial,
transportation, utility and financial companies regarded as generally
representative of the U.S. stock market. The S&P 400 Index is an unmanaged index
considered generally representative of the market for the stocks of mid-sized
U.S. companies. It consists of 400 domestic stocks chosen for market size
(median market capitalization of about $610 million), liquidity, and industry
group representation.
In future annual reports, Nicholas-Applegate will compare the Core Growth
Portfolios only to the S&P 400 for purposes of showing annualized total returns.
We believe this shift in benchmark measures is appropriate since the composition
of the Fund more closely matches the composition of the S&P 400 Index.
Index returns reflect the reinvestment of income dividends and capital gains
distributions, if any, but do not reflect fees, brokerage commissions, or other
expenses of investing.
Past performance is no indication of future performance. Investment returns and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
- --------------------------------------------------------------------------------
12
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997
- ------------------------------------------------------------------------
CORE GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
COMMON STOCKS -- 93.0%
- ---------------------------------------------------------------------------------
APPAREL -- 1.9%
Nike, Inc. -- Class B...................... 36,900 $ 2,287,800
Tommy Hilfiger Corp.*...................... 110,000 5,747,500
-------------
8,035,300
-------------
BEVERAGES/SOFT DRINKS -- 1.5%
Panamerican Beverages, Inc. -- Class A..... 120,000 6,435,000
-------------
BIOTECHNOLOGY -- 3.3%
Biogen, Inc.*.............................. 242,000 9,044,750
Centocor, Inc.*............................ 165,000 5,032,500
-------------
14,077,250
-------------
COMPUTERS/OFFICE AUTOMATION -- 2.3%
EMC Corp.*................................. 140,000 4,970,000
Read-Rite Corp.*........................... 200,000 5,050,000
-------------
10,020,000
-------------
CONTAINERS -- 0.9%
Crown Cork & Seal Co., Inc................. 77,500 4,000,938
-------------
DEPARTMENT/DISCOUNT STORES -- 2.5%
Consolidated Stores Corp.*................. 180,625 6,367,031
Costco Cos, Inc.*.......................... 167,200 4,618,900
-------------
10,985,931
-------------
DRUGS/PHARMACEUTICALS -- 5.0%
Cardinal Health, Inc....................... 162,950 8,860,406
Dura Pharmaceuticals, Inc.*................ 183,700 6,567,275
Elan Corp. PLC-Sponsored ADR*.............. 185,100 6,316,537
-------------
21,744,218
-------------
ELECTRIC UTILITIES -- 2.0%
AES Corp.*................................. 158,600 8,881,600
-------------
ENVIRONMENTAL SERVICES -- 6.7%
Republic Industries, Inc.*................. 256,900 8,911,219
United States Filter Corp.*................ 191,000 5,897,125
United Waste Systems, Inc.*................ 174,900 6,515,025
USA Waste Services, Inc.*.................. 213,700 7,586,350
-------------
28,909,719
-------------
FINANCE COMPANIES -- 1.7%
Associates First Capital Corp. -- Class
A........................................ 176,100 7,572,300
-------------
FOOD CHAINS -- 4.0%
Kroger Co.*................................ 130,000 6,597,500
Safeway, Inc.*............................. 232,600 10,786,825
-------------
17,384,325
-------------
HOSPITALS -- 3.7%
Healthsouth Corp.*......................... 504,600 9,650,475
Tenet Healthcare Corp.*.................... 257,200 6,333,550
-------------
15,984,025
-------------
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
LEASURE/GAMING -- 2.3%
Carnival Corp. -- Class A.................. 268,400 $ 9,930,800
-------------
LODGING -- 2.1%
Doubletree Corp.*.......................... 126,700 4,497,850
Host Marriott Corp.*....................... 277,000 4,709,000
-------------
9,206,850
-------------
MANAGED HEALTHCARE/HMO'S -- 1.9%
Oxford Health Plans, Inc.*................. 138,000 8,090,250
-------------
MEDICAL SUPPLIES -- 4.5%
Boston Scientific Corp.*................... 155,000 9,571,250
ESC Medical Systems LTD.*.................. 175,000 4,418,750
Safeskin Corp.*............................ 310,600 5,629,625
-------------
19,619,625
-------------
OIL/GAS PRODUCTION -- 2.4%
Burlington Resources, Inc.................. 105,900 4,527,225
Valero Energy Corp......................... 165,800 6,030,975
-------------
10,558,200
-------------
OILFIELD SERVICES/EQUIPMENT -- 6.6%
BJ Services Co.*........................... 72,500 3,470,937
Diamond Offshore Drilling, Inc.*........... 95,400 6,534,900
ENSCO International, Inc.*................. 160,800 7,919,400
Smith International, Inc.*................. 171,000 7,801,875
Tidewater, Inc............................. 41,500 1,909,000
Western Atlas, Inc.*....................... 16,000 970,000
-------------
28,606,112
-------------
OIL REFINING/MARKETING -- 1.4%
Tosco Corp................................. 216,600 6,173,100
-------------
OTHER COMMERCIAL/INDUSTRIAL SERVICES -- 1.5%
APAC Teleservices, Inc.*................... 26,300 683,800
Manpower, Inc.............................. 162,300 5,842,800
-------------
6,526,600
-------------
OTHER CONSUMER DURABLES -- 1.3%
U S Industries, Inc.*...................... 159,200 5,611,800
-------------
OTHER FINANCIAL SERVICES -- 2.7%
Equifax, Inc............................... 232,600 6,338,350
SunAmerica, Inc............................ 139,300 5,223,505
-------------
11,561,855
-------------
OTHER HEALTH TECHNOLOGY/SERVICES -- 0.9%
McKesson Corp.............................. 63,400 4,057,600
-------------
PIPELINES -- 1.2%
Williams Companies, Inc.................... 117,900 5,246,550
-------------
REGIONAL BANKS -- 1.2%
Washington Mutual, Inc..................... 110,500 5,338,531
-------------
SEMICONDUCTORS/ELECTRONIC COMPONENTS -- 1.6%
ASM Lithography Holding NV*................ 92,000 6,900,000
-------------
SOAPS/COSMETICS -- 2.1%
Revlon, Inc. -- Class A*................... 234,100 8,960,935
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
13
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997 -- CONTINUED
- --------------------------------------------------------------------------------
CORE GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- ---------------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCKS (Continued)
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
SOFTWARE -- 7.7%
BMC Software, Inc.*........................ 94,400 $ 4,354,200
Electronics for Imaging, Inc.*............. 180,400 7,193,450
McAfee Associates, Inc.*................... 128,700 5,694,975
Parametric Technology Corp.*............... 128,700 5,807,588
Peoplesoft, Inc.*.......................... 142,400 5,696,000
Rational Software Corp.*................... 220,000 4,537,500
-------------
33,283,713
-------------
SPECIALTY CHAINS -- 1.6%
Borders Group, Inc.*....................... 365,200 6,893,150
-------------
SPECIALTY INSURERS -- 1.0%
MGIC Investment Corp....................... 59,300 4,195,475
-------------
TELECOMMUNICATIONS EQUIPMENT -- 9.2%
ADC Telecommunications, Inc.*.............. 120,000 3,225,000
Andrew Corp.*.............................. 287,700 10,393,163
Ascend Communications, Inc.*............... 49,000 1,996,750
Boston Technology, Inc.*................... 256,300 4,837,662
L M Ericsson Telecommunications-Sponsored
ADR...................................... 258,400 8,737,150
Nokia Corp.-Sponsored ADR -- Class A....... 69,300 4,036,725
Tellabs, Inc.*............................. 176,600 6,379,675
-------------
39,606,125
-------------
TELEPHONE -- 3.2%
Nextel Communications, Inc. -- Class A*.... 563,600 7,538,150
Teleport Communications Group, Inc. --
Class A*................................. 268,500 6,175,500
-------------
13,713,650
-------------
TEXTILES -- 1.1%
Mohawk Industries, Inc.*................... 232,900 4,861,787
-------------
TOTAL COMMON STOCKS
(Cost $382,398,610)......................................... 402,973,314
-------------
- ---------------------------------------------------------------------------------
PREFERRED STOCKS -- 1.4%
- ---------------------------------------------------------------------------------
CONTAINERS -- 0.5%
Crown Cork & Seal, Inc., 4.5%.............. 40,000 1,970,000
-------------
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
DRUGS/PHARMACEUTICALS -- 0.4%
McKesson Corp., $2.50...................... 36,300 $ 1,942,050
-------------
PIPELINES -- 0.5%
Williams Cos, Inc., $3.50.................. 20,300 2,144,188
-------------
TOTAL PREFERRED STOCKS
(Cost $6,012,500)........................................... 6,056,238
-------------
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
- ---------------------------------------------------------------------------------
CONVERTIBLE CORPORATE BONDS -- 2.0%
- ---------------------------------------------------------------------------------
COMPUTERS/OFFICE AUTOMATION -- 0.9%
EMC Corp.,
3.25%, 03/15/02.......................... $ 3,700,000 3,792,500
-------------
ENVIRONMENTAL SERVICES -- 0.5%
Sanifill, Inc.,
5.00%, 03/01/06.......................... 1,437,000 2,044,133
-------------
OILFIELD SERVICES/EQUIPMENT -- 0.6%
Diamond Offshore Drilling, Inc. 3.75%,
02/15/07................................. 2,500,000 2,662,500
-------------
TOTAL CONVERTIBLE CORPORATE BONDS
(Cost $8,190,198)........................................... 8,499,133
-------------
- ---------------------------------------------------------------------------------
COMMERCIAL PAPER -- 2.9%
- ---------------------------------------------------------------------------------
Associates Corp. of North America 6.75%,
04/01/97................................. 12,426,000 12,426,000
-------------
TOTAL COMMERCIAL PAPER
(Cost $12,426,000)..........................................
-------------
TOTAL INVESTMENTS -- 99.3%
(Cost $409,027,308)......................................... 429,954,685
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.7%................. 2,819,246
-------------
NET ASSETS -- 100.0%.......................................... $ 432,773,931
-------------
</TABLE>
- ---------------
* Non-Income Producing Security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
14
<PAGE>
INCOME & GROWTH FUND
PORTFOLIOS A, B & C
- ------------------------------------------------------------------------
MANAGEMENT TEAM
Catherine Somhegyi,
Partner, Chief Investment Officer,
Global Equity Management
Maren Lindstrom,
Portfolio Manager
Sandra K. Durn,
Portfolio Manager
GOAL: The Nicholas-Applegate Income & Growth Fund seeks to maximize total
return through investment primarily in convertible and equity securities of U.S.
companies.
REVIEW AND OUTLOOK: The Nicholas-Applegate Income & Growth Fund finished the
fiscal year, ended March 31, 1997, with solid returns, outperforming both the
overall convertible securities market and the average mutual fund investing in
convertible securities, as represented by the First Boston Convertible Index and
the Lipper Convertible Funds Average. The Fund benefited from its extensive
holdings in financial and energy companies and flourished in the stable bond
market environment. A robust level of offerings of new convertible securities
also contributed to the Fund's advance.
During down stock-market periods in the fiscal year, the Fund participated in
only about half the downside of the overall market, as represented by the
Standard & Poor's 500 Index. While the bond market was negatively affected by
reports of strong job growth, high levels of consumer confidence, and
accelerating gains in personal income, bond values in the Income & Growth Fund
ended the year strong, even in light of the Federal Reserve's move to raise
interest rates at the end of the period.
U.S. convertible securities issuance rose to record-high levels in the period,
with the market resuming its traditional role of offering attractively priced
financing to weaker credit companies. We have been able to find a greater number
of securities offering the downside stability that we require.
We found many excellent opportunities in the financial services sector,
including, Ahmanson, the holding company for Home Savings of America, which
benefited from increased merger and acquisition activity in the sector.
Insurance services, especially life insurance companies, helped Fund
performance.
We are optimistic moving forward. We believe the convertible market continues
to offer excellent opportunities for growth as well as protection on the
downside.
REPRESENTATIVE HOLDINGS
Ericsson
Omnicom
Host Marriott
U.S. Filter
Williams
Crown Cork and Seal
Diamond Offshore Drilling
Ahmanson
Alaska Air Group
A.E.S.
- --------------------------------------------------------------------------------
15
<PAGE>
INCOME & GROWTH PORTFOLIOS
- ------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INCOME AND GROWTH PORTFOLIO A FIRST BOSTON CONVERTIBLE INDEX
<S> <C> <C> <C> <C>
12/31/86 $9,475 $10,000 Annualized Total Returns As of 03/31/97
12/31/87 9,124 9,978 1 Year
12/31/88 10,873 11,316 7.76%
12/31/89 13,878 12,873
12/31/90 14,049 11,986
12/31/91 19,325 15,476
12/31/92 21,100 18,197
12/31/93 26,687 21,572
12/31/94 24,491 20,554
12/31/95 29,799 25,429
12/31/96 35,840 28,950
3/31/97 36,316 29,100
<CAPTION>
<S> <C> <C>
12/31/86
12/31/87 5 Years 10 Years
12/31/88 12.11% 12.39%
12/31/89
12/31/90
12/31/91
12/31/92
12/31/93
12/31/94
12/31/95
12/31/96
3/31/97
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INCOME AND GROWTH PORTFOLIO B FIRST BOSTON CONVERTIBLE INDEX
<S> <C> <C> <C> <C>
12/31/86 $10,000 $10,000 Annualized Total Returns As of 03/31/97
12/31/87 9,567 9,978 1 Year
12/31/88 11,328 11,316 8.01%
12/31/89 14,367 12,873
12/31/90 14,450 11,986
12/31/91 19,750 15,476
12/31/92 21,425 18,197
12/31/93 26,892 21,572
12/31/94 24,540 20,554
12/31/95 29,672 25,429
12/31/96 35,492 28,950
3/31/97 35,909 29,100
<CAPTION>
<S> <C> <C>
12/31/86
12/31/87 5 Years 10 Years
12/31/88 12.37% 12.28%
12/31/89
12/31/90
12/31/91
12/31/92
12/31/93
12/31/94
12/31/95
12/31/96
3/31/97
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INCOME AND GROWTH PORTFOLIO C FIRST BOSTON CONVERTIBLE INDEX
<S> <C> <C> <C> <C>
12/31/86 $10,000 $10,000 Annualized Total Returns As of 03/31/97
12/31/87 9,567 9,978 1 Year
12/31/88 11,328 11,316 12.91%
12/31/89 14,367 12,873
12/31/90 14,450 11,986
12/31/91 19,750 15,476
12/31/92 21,425 18,197
12/31/93 26,892 21,572
12/31/94 24,540 20,554
12/31/95 29,651 25,429
12/31/96 35,448 28,950
3/31/97 35,843 29,100
<CAPTION>
<S> <C> <C>
12/31/86
12/31/87 5 Years 10 Years
12/31/88 12.58% 12.26%
12/31/89
12/31/90
12/31/91
12/31/92
12/31/93
12/31/94
12/31/95
12/31/96
3/31/97
</TABLE>
The graphs compare a $10,000 investment in the Income & Growth Portfolio A
(front load), the Income & Growth Portfolio B (back-end load) and the Income &
Growth Portfolio C (level load) with a similar investment in the First Boston
Convertible Index, on a cumulative and average annual total return basis.
Returns reflect the reinvestment of income dividends and capital gains
distributions, if any, as well as all fees and expenses. Performance figures
include the maximum applicable sales charge of 5.25% for Portfolio A shares. The
effect of the maximum contingent deferred sales charge for Portfolio B shares
(maximum 5% declining to 0% over six years) is included in Portfolio B
performance. Performance is affected by a 12b-1 Plan which commenced at
inception of each Portfolio.
Performance results reflect the total returns of a predecessor limited
partnership managed by Nicholas-Applegate Capital Management prior to the
effective date of the Portfolio's registration statements on 4/19/93, 5/31/95
and 4/19/93, respectively. Limited partnership returns are restated to reflect
all fees and expenses applicable to each Portfolio. If the limited partnership
had been registered as an investment company under federal securities laws, its
performance might have been adversely affected because of the additional
restrictions applicable to registered investment companies.
Total returns reflect the fact that fees and expenses in excess of certain
expense limitations specified in the investment management agreement have been
deferred by the Adviser. Total return results would have been lower had there
been no deferral.
The First Boston Convertible Index is an unmanaged market weighted index
representing the universe of convertible securities whether they are convertible
preferred stocks or convertible bonds. Index returns reflect 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 indication of future performance. Investment returns and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
- --------------------------------------------------------------------------------
16
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997
- ------------------------------------------------------------------------
INCOME & GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
COMMON STOCKS -- 11.8%
- ----------------------------------------------------------------------------
COMPUTER/OFFICE AUTOMATION -- 0.0%
Seagate Technology, Inc.*.................. 1 $ 45
------------
GAS UTILITIES -- 0.9%
MCN Corp................................... 41,860 1,177,313
------------
INVESTMENT COMPANIES -- 1.0%
Merrill 6.50% "MTG" -- Strypes............. 19,000 1,244,500
------------
MACHINERY/EQUIPMENT -- 0.7%
Cooper Industries, Inc.,
6.00% WYMN (DECS)........................ 51,100 932,575
------------
OTHER FINANCIAL SERVICES -- 0.7%
SunAmerica, Inc. (PERCS)*.................. 22,300 879,392
------------
REAL ESTATE INVESTMENT TRUSTS -- 8.5%
Bay Apartment Communities, Inc............. 38,190 1,370,066
Cali Realty Corp........................... 44,130 1,412,160
CenterPoint Properties Corp................ 38,200 1,169,875
Equity Residential Properties Trust........ 12,100 536,938
Kilroy Realty Corp.*....................... 21,300 567,113
Meridian Industrial Trust, Inc............. 38,470 889,619
Patriot American Hospitality, Inc.......... 28,460 690,155
Reckson Associates Realty Corp............. 31,930 1,472,771
Spieker Properties, Inc.................... 40,900 1,595,100
Starwood Lodging Trust..................... 36,115 1,408,485
------------
11,112,282
------------
TOTAL COMMON STOCKS
(Cost $12,831,606)....................................... 15,346,107
------------
- ----------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS -- 31.8%
- ----------------------------------------------------------------------------
CONTAINERS -- 1.8%
Crown Cork & Seal, 4.50%................... 48,250 2,376,313
------------
DRUGS/PHARMACEUTICALS -- 0.8%
McKesson Corp., $2.50*..................... 19,600 1,048,600
------------
ELECTRIC UTILITIES -- 2.5%
AES Trust I, Series A, 5.375%*............. 26,520 1,289,535
California Energy Capital Trust, 6.25%..... 27,380 1,759,165
California Energy Capital Trust 2,
6.25%*................................... 5,900 300,163
------------
3,348,863
------------
FINANCE COMPANIES -- 2.6%
HF Ahmanson & Company, Series D, 6.00%..... 20,465 1,575,805
Finova Finance Trust, 5.50%................ 34,680 1,812,030
------------
3,387,835
------------
GAS UTILITIES -- 0.8%
Noram Financing I, 6.25%................... 17,000 1,058,250
------------
INTEGRATED OIL COMPANIES -- 1.5%
Unocal Capital Trust, 6.25%................ 35,455 1,923,434
------------
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
LIFE INSURERS -- 1.3%
Penncorp Financial Group, Inc., $3.50...... 29,505 $ 1,644,904
------------
LODGING -- 2.1%
Host Marriott Financial Trust, 6.75%*...... 47,435 2,668,219
------------
MEDICAL SUPPLIES -- 0.5%
United States Surgical Corp., Series A,
$2.20.*.................................. 21,340 613,525
------------
METALS -- 0.1%
Coeur D'Alene Mines Corp., 7.00%........... 5,500 97,625
------------
MULTI-LINE INSURERS -- 0.7%
Allstate Corp., 6.7647%.................... 22,300 953,325
------------
OIL/GAS PRODUCTION -- 2.5%
Devon Financing Trust, $3.25*.............. 30,148 1,823,954
Nuevo Financing I, Series A, 5.75%......... 10,300 495,688
Valero Energy, $3.125*..................... 13,700 923,038
------------
3,242,680
------------
OIL REFINING/MARKETING -- 1.5%
Tosco Financing Trust, 5.75%*.............. 37,100 2,008,038
------------
OTHER CONSUMER SERVICES -- 1.0%
SCI Finance LLC, Series A, $3.125.......... 12,930 1,318,860
------------
OTHER PRODUCTION/MANUFACTURING -- 1.2%
Corning Delaware LP, 6.00%................. 22,130 1,568,464
------------
PIPELINES -- 1.9%
Williams Cos., $3.50....................... 23,095 2,465,391
------------
RESTAURANTS -- 1.7%
Apple South Inc., $3.50.................... 9,000 492,750
Wendy's Financing I, Series A, 5.00%....... 34,900 1,766,813
------------
2,259,563
------------
SAVINGS AND LOAN/THRIFTS -- 0.6%
Sovereign Bancorp, Inc., Series B, 6.25%... 9,610 720,750
------------
SPECIALTY INSURERS -- 1.7%
American Bankers Insurance, Series B,
$3.125................................... 36,290 2,200,081
------------
TELECOMMUNICATION EQUIPMENT -- 3.1%
LM Ericsson Telephone, 4.25%............... 619,270 2,941,533
Qualcomm Financial Trust, 5.75%............ 20,900 1,029,325
------------
3,970,858
------------
TELECOMMUNICATION SERVICES -- 0.4%
Worldcom, Inc., 8.00%...................... 6,860 538,510
------------
TELEPHONE -- 1.5%
Salomon, Inc. CSN (DECS), 6.25%............ 32,980 1,945,820
------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $37,345,556)....................................... 41,359,908
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
17
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997 -- CONTINUED
- --------------------------------------------------------------------------------
INCOME & GROWTH FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
CONVERTIBLE CORPORATE BONDS -- 54.3%
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
ADVERTISING -- 2.1%
Omnicom Group,
4.250%, 01/03/07......................... $2,534,000 $ 2,695,543
------------
AEROSPACE -- 1.1%
Morgan Stanley Group, Series MTNC*
0.000%, 09/30/00......................... 1,290,000 1,470,600
------------
AIRLINES -- 1.1%
Alaska Air Group,
6.500%, 06/15/05......................... 694,000 888,320
Continental Airlines,
6.750%, 04/15/06......................... 430,000 547,713
------------
1,436,033
------------
ALCOHOLIC BEVERAGES -- 1.0%
Grand Metropolitan PLC Euro,
6.500%, 01/31/00......................... 1,130,000 1,337,638
------------
AUTOMOBILES -- 0.2%
Volkswagen International Finance,
3.000%, 01/24/02......................... 240,000 266,700
------------
BROADCASTING -- 0.2%
Telemundo Group, Inc.,
7.000%, 02/15/06......................... 225,000 217,406
------------
BUILDING MATERIALS -- 1.4%
Cemex SA Euro,
4.250%, 11/01/97......................... 830,000 811,325
Hexcel Corp.,
7.000%, 08/01/03......................... 755,000 999,431
------------
1,810,756
------------
BUILDING MATERIAL CHAINS -- 0.8%
Home Depot, Inc.,
3.250%, 10/01/01......................... 985,000 992,388
------------
CLOTHING CHAINS -- 0.9%
Nine West Group, Inc.,
5.500%, 07/15/03......................... 1,220,000 1,186,450
------------
COMPUTERS/OFFICE AUTOMATION -- 3.3%
Comverse Technology, Inc.,
5.750 10/01/06........................... 1,263,000 1,351,410
EMC Corp.,
3.250%, 03/15/02......................... 1,190,000 1,219,750
HMT Technology Corp.,
0.000%, 01/15/04......................... 958,000 832,263
Safeguard Scientifics
6.000%, 02/01/06......................... 1,075,000 932,563
------------
4,335,986
------------
CONTRACT DRILLING -- 1.8%
Diamond Offshore Drilling
3.750%, 02/15/07......................... 1,927,000 2,052,255
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
</TABLE>
CONTRACT DRILLING (CONTINUED)
<TABLE>
<S> <C> <C>
Nabors Industries, Inc.
5.000%, 05/15/06......................... $ 251,000 $ 317,515
------------
2,369,770
------------
DRUG CHAINS -- 1.5%
Rite-Aid Corp.*
0.000%, 07/24/06......................... 2,729,000 1,883,010
------------
DRUGS/PHARMACEUTICALS -- 4.0%
Elan International Finance*
0.000%, 10/16/12......................... 1,711,000 1,272,556
Sandoz Capital BVI LTD.
2.000%, 10/06/02......................... 900,000 1,048,500
Sandoz Capital BVI LTD. Euro,
2.000%, 10/06/02......................... 1,470,000 1,721,738
Sepracor, Inc.
7.000%, 12/01/02......................... 295,000 396775
Sepracor, Inc., Euro,
7.000%, 12/01/02......................... 582,000 782,790
------------
5,222,359
------------
ELECTRIC UTILITIES -- 1.2%
AES Corp.
10.250%, 07/15/06........................ 1,385,000 1,513,113
------------
ELECTRONIC DATA PROCESSING -- 2.3%
Automatic Data Process*
0.000%, 02/20/12......................... 4,664,000 2,606,010
National Data Corp.
5.000%, 11/01/03......................... 392,000 375,830
------------
2,981,840
------------
ELECTRONIC INSTRUMENTS -- 3.1%
ADT Operations, Inc.*
0.000%, 07/06/10......................... 3,093,000 2,207,629
SCI Systems, Inc.
5.000%, 05/01/06......................... 1,499,000 1,858,760
------------
4,066,389
------------
ENVIRONMENTAL SERVICES -- 5.6%
Sanifill, Inc.
5.000%, 03/01/06......................... 1,088,000 1,547,680
United Waste Systems, Inc. Note
4.500%, 06/01/01......................... 1,060,000 1,362,100
United Waste Systems, Inc.
4.500%, 06/01/01......................... 540,000 693,900
U.S. Filter Corp.
0.000%, 12/15/01......................... 2,470,000 2,479,263
USA Waste Services, Inc.
4.000%, 02/01/02......................... 1,113,000 1,151,955
------------
7,234,898
------------
FINANCE COMPANIES -- 0.4%
Leasing Solutions, Inc.
6.875%, 10/01/03......................... 530,000 482,300
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
18
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
CONVERTIBLE CORPORATE BONDS (Continued)
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
FOOD CHAINS -- 1.0%
Starbucks Corp.
4.250%, 11/01/02......................... $ 939,000 $ 1,319,376
------------
INDUSTRIAL ENGINEERING/CONSTRUCTION -- 1.0%
Empresas ICA Sociedad
5.000%, 03/15/04......................... 1,726,000 1,311,760
------------
LIFE INSURERS -- 1.9%
American Travellers Corp.,
6.500%, 10/01/05......................... 521,000 1,454,893
Penn Treaty American Corp.,
6.250%, 12/01/03......................... 920,000 1,036,150
------------
2,491,043
------------
LODGING -- 1.9%
Hilton Hotels Corp.
5.000%, 05/15/06......................... 1,740,000 1,774,800
Prime Hospitality Corp.
7.000%, 04/15/02......................... 341,000 488,056
Signature Resorts, Inc.
5.750.%, 01/15/07........................ 277,000 235,450
------------
2,498,306
------------
MACHINERY/EQUIPMENT -- 1.7%
Intevac, Inc.
6.500%, 03/01/04......................... 445,000 403,838
Thermo Electron Corp.
4.250%, 01/03/03......................... 565,000 590,425
Thermo Electron Corp. Euro
4.250%, 01/03/03......................... 1,110,000 1,187,700
------------
2,181,963
------------
MANAGED HEALTHCARE/HMOS -- 1.0%
Tenet Healthcare
6.000%, 12/01/05......................... 1,172,000 1,353,660
------------
MEDICAL/HEALTH SERVICES -- 2.7%
FPA Medical Management
6.500%, 12/15/01......................... 500,000 490,625
Phycor, Inc.
4.500%, 02/15/03......................... 1,965,000 1,891,313
Renal Treatment Centers, Inc.
5.625%, 07/15/06......................... 1,202,000 1,117,860
------------
3,499,798
------------
MEDICAL SUPPLIES -- 0.4%
Morgan Stanley Group, Series MTN
2.000%, 03/29/02......................... 557,000 569,533
------------
OIL FIELD SERVICES/EQUIPMENT -- 2.7%
Baker Hughes, Inc.*
0.000%, 05/05/08......................... 2,520,000 1,962,450
Pride Petroleum Services, Inc.
6.250%, 02/15/06......................... 372,000 675,180
Seacor Holdings, Inc.
5.375%, 11/15/06......................... 883,000 927,150
------------
3,564,780
------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
OTHER COMMERCIAL/INDUSTRIAL SERVICES -- 1.3%
CUC International, Inc.
3.000%, 02/15/02......................... $ 735,000 $ 729,488
National Education Corp.
6.500%, 05/15/11......................... 1,129,000 987,875
------------
1,717,363
------------
OTHER PRODUCTION/MANUFACTURING -- 2.1%
ALFA S.A. DE C.V.
8.000%, 09/15/00......................... 1,000,000 1,258,750
ALFA S.A. DE C.V. Euro
8.000%, 09/15/00......................... 1,180,000 1,485,325
------------
2,744,075
------------
OTHER TRANSPORTATION -- 0.8%
Offshore Logistic
6.000%, 12/15/03......................... 1,000,000 981,250
------------
SEMICONDUCTORS/ELECTRONIC COMPONENTS -- 1.8%
Analog Devices
3.500%, 12/01/00......................... 813,000 1,022,258
Xilinx, Inc.
5.250%, 11/01/02......................... 1,178,000 1,341,448
------------
2,363,706
------------
SPECIALTY CHAINS -- 1.9%
Pep Boys*
0.000%, 09/20/11......................... 2,490,000 1,329,038
Staples, Inc.
4.500%, 10/01/00......................... 1,009,000 1,114,945
------------
2,443,983
------------
TELEPHONE -- 0.1%
Pricellular Wire Series B
14.000%, 11/15/01........................ 130,000 132,600
------------
TOTAL CONVERTIBLE CORPORATE BONDS
(Cost $66,761,391)....................................... 70,676,375
------------
- ----------------------------------------------------------------------------
COMMERCIAL PAPER -- 4.4%
- ----------------------------------------------------------------------------
Associates Corp.
6.750%, 04/01/97
(Cost $5,742,000)........................ 5,742,000 5,742,000
------------
TOTAL INVESTMENTS -- 101.9%
(Cost $122,680,553)...................................... 133,124,390
LIABILITIES IN EXCESS OF OTHER ASSETS -- (1.9%)............
(2,472,988)
------------
NET ASSETS -- 100.0%....................................... $130,651,402
------------
</TABLE>
- ---------------
* Non-Income Producing Security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
19
<PAGE>
BALANCED GROWTH FUND
PORTFOLIOS A, B & C
- ------------------------------------------------------------------------
MANAGEMENT TEAM
Catherine Somhegyi,
Partner, Chief Investment Officer,
Global Equity Management
Lawrence S. Speidell, CFA,
Partner, Director of Global/Systematic
Portfolio Management
John J. Kane,
Partner, Senior Portfolio Manager
Fred S. Robertson,
Partner, Chief Investment Officer,
Fixed Income Management
GOAL: The Nicholas-Applegate Balanced Growth Fund seeks to provide capital
appreciation and current income by investing approximately 60% of total assets
in equity and convertible securities primarily of U.S. companies and 40% of
total assets in debt securities, money market instruments, and other short-term
investments.
REVIEW AND OUTLOOK: Early in the Fund's fiscal year, strong performance by
smaller-company growth stocks contributed to gains. However, after a summer
sell-off in the technology sector, cautious investors favored larger-company
stocks.
During the 12-month period ending March 31, 1997, the Nicholas-Applegate
Balanced Growth Fund achieved more modest returns than a composite index
comprised of 60% of the S&P 500 Index and 40% of the Lehman Government/Corporate
Index.
The Fund's overweighting within the technology sector relative to the
benchmark contributed to gains. Disappointing returns in the consumer services
and consumer non-durables sectors negatively impacted returns.
One of the Fund's best performers during the period was Western Digital Corp.,
a manufacturer of disk drives for personal computers. While the company
benefited from strong demand, competitive pressures threatened the
sustainability of earnings growth and prompted us to reduce our position. Ross
Stores, Inc., the nation's third largest off-price retailer, also performed
well.
The Federal Reserve Board raised short-term interest rates in March. The Fed
cited persisting economic strength as one reason for the action, which prompted
a quarter-end sell-off.
Our long-term outlook for bonds remains positive. However, with little slack
in the economy, short periods of accelerating economic activity may prompt the
Fed to raise rates again. Thus, we believe the risk of higher near-term rates
makes a neutral stance on interest rates appropriate.
We are optimistic that the combination of our disciplined approach to
selecting dynamic growth stocks and the diversification benefits of fixed income
securities will continue to deliver solid long-term returns.
REPRESENTATIVE HOLDINGS
United States Treasury Note 7.500 5-15-02
United States Treasury Note 7.000 7-15-06
United States Treasury Note 6.250 8-31-00
Advanced Micro Devices 11.000 8-1-03
Dell Computer
TJX
Intel
Miller Herman
Jabil Circuit
Burlington Coat Factory
- --------------------------------------------------------------------------------
20
<PAGE>
BALANCED GROWTH PORTFOLIOS
- ------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ANNUALIZED TOTAL RETURNS AS OF 03/31/97
1 YEAR 5 YEARS SINCE INCEPTION
1.14% 7.84% 8.33%
Balanced Growth Portfolio A Balanced 60/40 Index
<S> <C> <C> <C>
4/19/93 $9,475 $10,000
4/30/93 10,028 9,902
5/31/93 10,157 10,059
6/30/93 10,464 10,168
7/31/93 10,441 10,170
8/31/93 10,890 10,494
9/30/93 11,058 10,461
10/31/93 10,929 10,608
11/30/93 10,525 10,499
12/31/93 10,737 10,594
1/31/94 10,928 10,874
2/28/94 10,790 10,601
3/31/94 10,361 10,220
4/30/94 10,315 10,265
5/31/94 10,069 10,358
6/30/94 9,746 10,196
7/31/94 9,969 10,479
8/31/94 10,376 10,738
9/30/94 10,250 10,516
10/31/94 10,397 10,653
11/30/94 9,996 10,413
12/31/94 10,061 10,533
1/31/95 10,007 10,778
2/28/95 10,510 11,130
3/31/95 10,694 11,358
4/30/95 10,997 11,622
5/31/95 11,176 12,096
6/30/95 11,682 12,303
7/31/95 12,425 12,529
8/31/95 12,480 12,612
9/30/95 12,605 12,982
10/31/95 12,550 13,031
11/30/95 12,652 13,460
12/31/95 12,419 13,695
1/31/96 12,553 14,008
2/29/96 12,862 13,968
3/31/96 12,850 14,001
4/30/96 13,621 14,086
5/31/96 13,987 14,294
6/30/96 13,597 14,404
7/31/96 12,878 14,036
8/31/96 13,357 14,199
9/30/96 14,092 14,780
10/31/96 14,084 15,162
11/30/96 14,655 15,962
12/31/96 14,454 15,701
1/31/97 14,795 16,298
2/28/97 14,096 16,388
3/31/97 13,716 15,904
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ANNUALIZED TOTAL RETURNS AS OF 03/31/97
1 YEAR SINCE INCEPTION
1.10% 9.15%
Balanced Growth Portfolio B Balanced 60/40 Index
<S> <C> <C>
5/31/95 $10,000 $10,000
6/30/95 10,446 10,171
7/31/95 11,111 10,358
8/31/95 11,151 10,427
9/30/95 11,254 10,733
10/31/95 11,198 10,773
11/30/95 11,278 11,128
12/31/95 11,065 11,322
1/31/96 11,178 11,581
2/29/96 11,452 11,548
3/31/96 11,445 11,575
4/30/96 12,139 11,645
5/31/96 12,454 11,818
6/30/96 12,098 11,908
7/31/96 11,442 11,604
8/31/96 11,871 11,739
9/30/96 12,526 12,219
10/31/96 12,510 12,535
11/30/96 13,021 13,196
12/31/96 12,831 12,981
1/31/97 13,124 13,474
2/28/97 12,498 13,548
3/31/97 11,744 13,149
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ANNUALIZED TOTAL RETURNS AS OF 03/31/97
1 YEAR 5 YEARS SINCE INCEPTION
6.05% 9.12% 9.20%
Balanced Growth Portfolio C Balanced 60/40 Index
<S> <C> <C> <C>
4/19/93 $10,000 $10,000
4/30/93 10,584 9,902
5/31/93 10,720 10,059
6/30/93 11,039 10,168
7/31/93 11,007 10,170
8/31/93 11,488 10,494
9/30/93 11,661 10,461
10/31/93 11,524 10,608
11/30/93 11,075 10,499
12/31/93 11,305 10,594
1/31/94 11,506 10,874
2/28/94 11,361 10,601
3/31/94 10,891 10,220
4/30/94 10,835 10,265
5/31/94 10,570 10,358
6/30/94 10,228 10,196
7/31/94 10,454 10,479
8/31/94 10,873 10,738
9/30/94 10,738 10,516
10/31/94 10,883 10,653
11/30/94 10,464 10,413
12/31/94 10,522 10,533
1/31/95 10,457 10,778
2/28/95 10,982 11,130
3/31/95 11,161 11,358
4/30/95 11,477 11,622
5/31/95 11,664 12,096
6/30/95 12,184 12,303
7/31/95 12,950 12,529
8/31/95 13,007 12,612
9/30/95 13,132 12,982
10/31/95 13,067 13,031
11/30/95 13,165 13,460
12/31/95 12,920 13,695
1/31/96 13,051 14,008
2/29/96 13,363 13,968
3/31/96 13,346 14,001
4/30/96 14,145 14,086
5/31/96 14,516 14,294
6/30/96 14,098 14,404
7/31/96 13,346 14,036
8/31/96 13,842 14,199
9/30/96 14,591 14,780
10/31/96 14,575 15,162
11/30/96 15,166 15,962
12/31/96 14,941 15,701
1/31/97 15,283 16,298
2/28/97 14,562 16,388
3/31/97 14,153 15,904
</TABLE>
The graphs compare a $10,000 investment in the Balanced Growth Portfolio A
(front load), the Balanced Growth Portfolio B (back-end load) and the Balanced
Growth Portfolio C (level load) with a similar investment in a model index
consisting of 60% Standard & Poor's 500 Index ("S&P 500") and 40% Lehman
Brothers Government/Corporate Bond Index, on a cumulative and average annual
total return basis. Returns reflect the reinvestment of income dividends and
capital gains distributions, if any, as well as all fees and expenses.
Performance figures include the maximum applicable sales charge of 5.25% for
Portfolio A shares. The effect of the maximum contingent deferred sales charge
for Portfolio B shares (maximum 5% declining to 0% over six years) is included
in Portfolio B performance. Performance is affected by a 12b-1 Plan which
commenced at inception of each Portfolio.
Total returns reflect the fact that fees and expenses in excess of certain
expense limitations specified in the investment management agreement have been
deferred by the Adviser. Total return results would have been lower had there
been no deferral.
The S&P 500 Index is an unmanaged index containing 500 industrial, utility and
financial companies regarded as generally representative of the U.S. stock
market.
The Lehman Brothers Government/Corporate Bond Index is an unmanaged
market-weighted index consisting of all public obligations of the U.S.
Government, its agencies and instrumentalities and all corporation issuers of
fixed rate, non-convertible, investment grade U.S. dollar denominated bonds
having maturities of greater than one year. It is generally regarded as
representative of the market for domestic bonds.
Index returns reflect the reinvestment of income dividends and capital gains
distributions, if any, but do not reflect fees, brokerage commissions, or other
expenses of investing.
Past performance is no indication of future performance. Investment returns and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
- --------------------------------------------------------------------------------
21
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997
- ------------------------------------------------------------------------
BALANCED GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
COMMON STOCKS -- 57.3%
- ----------------------------------------------------------------------------
AIRLINES -- 0.6%
Delta Airlines, Inc........................ 1,800 $ 151,425
------------
APPAREL -- 0.6%
Fruit of the Loom, Inc.*................... 3,500 145,250
------------
AUTOMOBILES -- 0.4%
Chrysler Corp.............................. 3,200 96,000
------------
AUTOMOTIVE EQUIPMENT -- 0.7%
SPX Corp.*................................. 4,000 181,500
------------
BIOTECHNOLOGY -- 0.3%
Quintiles Transnational Corp.*............. 1,400 75,425
------------
BUILDING MATERIALS -- 0.7%
Apogee Enterprises, Inc.................... 7,200 142,200
Eagle Hardware and Garden, Inc.*........... 1,200 22,854
------------
165,054
------------
CATALOG/OUTLET STORES -- 1.2%
CDW Computer Centers, Inc.*................ 2,500 112,656
Lands' End, Inc.*.......................... 7,300 193,450
------------
306,106
------------
CHEMICALS -- 0.7%
Cytec Industries, Inc.*.................... 4,400 166,650
------------
CLOTHING CHAINS -- 2.9%
Burlington Coat Factory*................... 8,900 160,200
Ross Stores, Inc........................... 14,400 365,400
TJX Companies.............................. 4,600 196,650
------------
722,250
------------
COAL MINING -- 0.8%
Zeigler Coal Holding Co.................... 7,900 187,625
------------
COMPUTERS/OFFICE AUTOMATION -- 6.5%
Cisco Systems, Inc.*....................... 2,200 105,875
Compaq Computer Corp.*..................... 2,300 176,237
Dell Computer Corp.*....................... 3,800 256,975
EMC Corp.*................................. 4,400 156,200
Gateway 2000, Inc.*........................ 3,200 164,000
Quantum Corp.*............................. 3,500 135,188
Seagate Technology, Inc.*.................. 3,500 157,063
Storage Technology Corp.*.................. 3,900 153,075
Western Digital Corp.*..................... 5,500 311,438
------------
1,616,051
------------
CONTRACT DRILLING -- 2.2%
Cliff's Drilling Co.*...................... 2,200 130,625
Global Marine, Inc.*....................... 11,100 238,650
Marine Drilling, Cos., Inc.*............... 10,700 189,925
------------
559,200
------------
DEPARTMENT/DISCOUNT STORES -- 1.4%
Mac Frugals Bargains Close-Outs, Inc.*..... 6,800 180,200
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
</TABLE>
DEPARTMENT/DISCOUNT STORES (CONTINUED)
<TABLE>
<S> <C> <C>
Woolworth Corp.*........................... 7,400 $ 172,975
------------
353,175
------------
DRUGS/PHARMACEUTICALS -- 1.1%
Dura Phamaceuticals, Inc.*................. 5,600 200,200
Jones Medical Industries, Inc.............. 2,650 63,600
------------
263,800
------------
ELECTRONIC INSTRUMENTS/DIVERSIFIED -- 1.2%
American Power Conversion Corp.*........... 6,800 147,050
Dynatech Corp.*............................ 4,800 144,000
------------
291,050
------------
FINANCE COMPANIES -- 2.7%
Aames Financial Corp....................... 2,100 42,525
Green Tree Financial Corp.................. 4,700 158,625
Imperial Credit Industries, Inc.*.......... 7,900 158,988
MBNA Corp.................................. 4,800 133,800
Student Loan Marketing Association......... 1,800 171,450
------------
665,388
------------
GROCERY PRODUCTS -- 0.7%
Interstate Bakeries Corp................... 3,800 179,550
------------
HOME FURNISHINGS -- 1.6%
Bed Bath & Beyond, Inc.*................... 1,500 36,281
Ethan Allen Interiors, Inc................. 4,400 191,400
Furniture Brands International, Inc.*...... 11,200 168,000
------------
395,681
------------
HOSPITALS -- 0.7%
Health Management Associates, Inc. -- Class
A*....................................... 1,700 40,375
Healthsouth Corp.*......................... 7,000 133,875
------------
174,250
------------
INVESTMENT COMPANIES -- 0.5%
Bear Stearns Co............................ 4,520 118,650
------------
LIFE INSURERS -- 1.1%
Conseco, Inc............................... 7,500 267,187
------------
LODGING -- 0.6%
HFS, Inc.*................................. 2,700 158,963
------------
MANAGED HEALTHCARE -- 1.1%
Oxford Health Plans, Inc.*................. 4,600 269,675
------------
MEDICAL SUPPLIES -- 0.2%
Guidant Corp............................... 900 55,350
------------
MONEY CENTER BANKS -- 0.6%
North Fork Bancorporation, Inc............. 4,200 151,725
------------
OILFIELD SERVICES/EQUIPMENT -- 3.1%
Camco International, Inc................... 4,700 206,800
Cooper Cameron Corp.*...................... 2,200 150,700
Rowan Cos., Inc.*.......................... 7,800 176,475
Tidewater, Inc............................. 2,200 101,200
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
22
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCKS (Continued)
- ---------------------------------------------------------
OILFIELD SERVICES/EQUIPMENT (CONTINUED)
<TABLE>
<S> <C> <C>
Varco International, Inc.*................. 5,900 $ 147,500
------------
782,675
------------
OIL/GAS PRODUCTION -- 0.5%
Swift Energy Co.*.......................... 5,500 129,938
------------
OTHER COMMERCIAL/INDUSTRIAL SERVICES -- 0.6%
Corrections Corp. of America*.............. 3,500 84,875
Robert Half International, Inc.*........... 1,600 55,800
------------
140,675
------------
OTHER FINANCIAL SERVICES -- 0.9%
Sunamerica, Inc............................ 5,800 218,225
------------
OTHER HEALTH SERVICES -- 0.7%
HBO & Company.............................. 3,600 171,000
------------
OTHER PRODUCERS/MANUFACTURING -- 1.2%
BMC Industries, Inc........................ 3,400 96,050
Miller Herman, Inc......................... 2,900 197,925
------------
293,975
------------
PAPER -- 0.8%
Fort Howard Corp.*......................... 6,400 199,200
------------
PROPERTY-CASUALTY INSURANCE -- 1.3%
Lowes Corp................................. 1,900 168,863
Orion Capital Corp......................... 2,700 166,725
------------
335,588
------------
PUBLISHING -- 0.8%
Central Newspapers, Inc.................... 3,000 150,375
Gartner Group, Inc.*....................... 1,700 36,762
------------
187,137
------------
REGIONAL/COMMERCIAL BANKS -- 0.5%
Star Banc Corp............................. 3,400 135,575
------------
SAVINGS & LOAN ASSOCIATIONS -- 1.6%
Charter One Financial, Inc................. 3,730 163,654
Greenpoint Financial Corp.................. 4,600 236,900
------------
400,554
------------
SEMICONDUCTORS/ELECTRONIC COMPONENTS -- 2.3%
Intel Corp................................. 1,500 208,688
Jabil Circuit, Inc.*....................... 3,700 166,731
Vitesse Semiconductor Corp.*............... 7,650 211,331
------------
586,750
------------
SOAPS/COSMETICS -- 1.2%
Amway Asia Pacific, LTD.................... 4,400 165,550
Herbalife International, Inc............... 7,900 143,188
------------
308,738
------------
SOFTWARE -- 6.9%
Aspen Technology, Inc.*.................... 3,000 81,750
BMC Software, Inc.*........................ 5,400 249,075
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
</TABLE>
SOFTWARE (CONTINUED)
<TABLE>
<S> <C> <C>
Cadence Design System, Inc.*............... 5,100 $ 175,312
Compuware Corp.*........................... 4,300 269,825
Keane, Inc.*............................... 4,400 144,650
McAfee Associations, Inc.*................. 6,300 278,775
Microsoft Corp.*........................... 1,600 146,700
Parametric Technology Co.*................. 3,600 162,450
Peoplesoft, Inc.*.......................... 5,400 216,000
------------
1,724,537
------------
SPECIALTY CHAINS -- 0.3%
Gap, Inc................................... 2,000 67,000
------------
TELECOMMUNICATIONS EQUIPMENT -- 2.6%
ADC Telecommunications, Inc.*.............. 4,900 131,687
Ascend Communications, Inc.*............... 5,200 211,900
Pairgain Technologies, Inc.*............... 6,000 177,750
Tellabs, Inc.*............................. 3,800 137,275
------------
658,612
------------
TEXTILES -- 0.5%
Carlisle Cos, Inc.......................... 4,500 131,625
------------
WHOLESALE DISTRIBUTION -- 0.3%
Tech Data Corp.*........................... 3,000 72,375
------------
TOTAL COMMON STOCKS
(Cost $12,268,906)....................................... 14,261,159
------------
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
- ----------------------------------------------------------------------------
CORPORATE BONDS -- 26.0%
- ----------------------------------------------------------------------------
AIRLINES -- 0.8%
US Air, Inc.
10.00%, 07/01/03......................... $ 200,000 201,750
------------
BEVERAGES/SOFT DRINKS -- 4.0%
Pepsi-Gemex SA
9.75%, 03/30/04.......................... 1,000,000 995,000
------------
BROADCASTING -- 0.3%
Telemundo Group, Inc.
7.000%, 02/15/06......................... 75,000 74,250
------------
CONTRACT DRILLING -- 0.3%
Cliffs Drilling Co. Series B
10.250%, 05/15/03........................ 80,000 83,600
------------
ELECTRONIC INSTRUMENTS -- 0.8%
Electronic Retailing Systems*
13.25%, 02/01/04......................... 300,000 205,125
------------
ENTERTAINMENT -- 4.8%
AMC Entertainment
9.5%, 03/15/09........................... 450,000 445,500
United Artists
11.5%, 05/01/02.......................... 725,000 756,719
------------
1,202,219
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
23
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997 -- CONTINUED
- --------------------------------------------------------------------------------
BALANCED GROWTH FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
CORPORATE BONDS (Continued)
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
FINANCE COMPANIES -- 1.3%
Americredit Corp., Series A
9.25%, 02/01/04.......................... $ 200,000 $ 195,000
Ocwen Financial Corp.
11.875%, 10/01/03........................ 125,000 138,750
------------
333,750
------------
GROCERY PRODUCTS -- 1.1%
Curtice-Burns Foods, Inc.
Senior Subordinated Note
12.25%, 02/01/05......................... 50,000 53,250
Fage Dairy Industries, Series A
9.0%, 02/01/07........................... 225,000 218,250
------------
271,500
------------
LEISURE/GAMING -- 2.4%
Casino Magic
13.00%, 08/15/03......................... 335,000 324,950
Majestic Star Casino
12.750%, 05/15/03........................ 250,000 271,875
------------
596,825
------------
OTHER FINANCIAL SERVICES -- 0.5%
ESAT Holdings, LTD*
12.5%, 02/01/07.......................... 225,000 124,875
------------
RESTAURANTS -- 1.4%
Foodmaker, Inc.
9.25%, 03/01/99.......................... 100,000 101,000
Rally's Hamburgers, Inc.
9.875%, 06/15/00......................... 250,000 236,563
------------
337,563
------------
SEMICONDUCTORS/ELEC. COMP. -- 4.0%
Advanced Micro Devices
11.00%, 08/01/03......................... 900,000 987,750
------------
SOAPS/COSMETICS -- 0.7%
Revlon Worldwide, Series B*
Zero Coupon, 3/15/98..................... 175,000 164,500
------------
SPECIALTY CHAINS -- 0.3%
CompUSA, Inc.
9.500%, 06/15/00......................... 75,000 75,937
------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT -- 1.3%
Echostar Communications*
Step-up, 06/01/04........................ $ 125,000 $ 105,000
Optel, Inc.
13.00%, 02/15/05......................... 225,000 215,438
------------
320,438
------------
TELEPHONE -- 2.0%
Nextel Communications*
11.5%, 09/01/03.......................... 75,000 58,688
Paging Network, Inc.
10.00%, 10/15/08......................... 250,000 225,000
PriceCellular Wire Series B*
14.000%, 11/15/01........................ 200,000 204,000
------------
487,688
------------
TOTAL CORPORATE BONDS
(Cost $6,324,643)........................................ 6,462,770
------------
- ----------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 15.0%
- ----------------------------------------------------------------------------
U.S.Treasury Notes
6.250%, 08/31/00......................... 1,000,000 988,178
7.500%, 11/15/01......................... 700,000 720,467
7.500%, 05/15/02......................... 1,000,000 1,031,910
7.000%, 07/15/06......................... 1,000,000 1,003,230
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $3,898,393)........................................ 3,743,785
------------
- ----------------------------------------------------------------------------
COMMERCIAL PAPER -- 3.5%
- ----------------------------------------------------------------------------
Associates Corp.
6.75%, 04/01/97
(Cost $860,000).......................... 860,000 860,000
------------
TOTAL INVESTMENTS -- 101.3%
(Cost $23,351,942)....................................... 25,327,714
LIABILITIES IN EXCESS OF OTHER ASSETS -- (1.3%)............ (315,744)
------------
NET ASSETS -- 100.0%....................................... $ 25,011,970
------------
</TABLE>
- ---------------
* Non-Income Producing Security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
24
<PAGE>
GOVERNMENT INCOME FUND
PORTFOLIOS A, B & C
- ------------------------------------------------------------------------
MANAGEMENT TEAM
Fred Robertson,
Partner, Chief Investment Officer,
Fixed Income Management
James E. Kellerman,
Partner, Senior Portfolio Manager
Douglas G. Forsyth, CFA,
Portfolio Manager
Susan Malone,
Portfolio Manager
GOAL: The Nicholas-Applegate Government Income Fund seeks to maximize current
income through investment primarily in intermediate term debt securities of the
U.S. Government and its agencies and instrumentalities.
REVIEW AND OUTLOOK: The Fund turned in disappointing performance in the fiscal
year ended March 31, 1997 as interest rate shifts contributed to uncertainty in
the economic environment.
During the beginning of the period, the bond market declined after a
surprisingly strong February employment report. In May, fundamental and
technical factors diverged resulting in violent interest rate shifts within a
tight range. We reduced the Fund's duration in order to avoid any negative
surprises. Recognizing a slowdown to below-average growth trends in August, we
lengthened the duration of the Fund. In December, we again shortened our
duration in response to stronger housing starts and new home sales, consumer
confidence and above average trend growth.
The first quarter of 1997 was marked by conflicting news regarding the
direction and health of the U.S. economy. Interest rates fluctuated throughout
the period as investors attempted to make sense of the conflicting reports.
Strong job growth, high levels of consumer confidence, and accelerating gains in
personal income, all negatively impacted the bond market. At the same time,
contractionary fiscal policies, stable money supply growth rates, and moderate
economic growth rates were evident.
As of March 31, 1997, 78% of the Fund was invested in U.S. Government
securities, with 22% invested in investment grade corporate bonds. Of the
government securities, 31% of the portfolio was invested in U.S. Treasury
securities, 8% in U.S. agencies' securities, and 39% in mortgage securities. We
practice active duration management to adjust the Fund's holdings for changes in
the interest rate environment. Duration is a measure of a bond's responsiveness
to changes in interest rates. The fund's managed duration target at the end of
the fiscal year was 5.4 years, similar to that of the benchmark Lehman
Government Corporate Index. This reflects our positive long-term view of the
bond market, and our concern that interest rates will rise in the near term.
We continue to seek to add value to the Fund by choosing what we believe to be
the most promising individual bonds based on our outlook for interest rates,
projected yields as well as industry trends.
- --------------------------------------------------------------------------------
25
<PAGE>
GOVERNMENT INCOME PORTFOLIOS
- ------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ANNUALIZED TOTAL RETURNS AS OF 03/31/97
1 YEAR 3 YEARS SINCE INCEPTION
-2.15% 3.66% 4.04%
Date Government Income Portfolio A Lehman Brothers Government Bond Index
<S> <C> <C> <C>
19-Apr-93 9,525.00 10,000.00
30-Apr-93 9,502.14 10,038.00
31-May-93 9,624.06 10,026.96
30-Jun-93 9,855.71 10,249.56
31-Jul-93 9,886.36 10,312.08
31-Aug-93 10,185.25 10,542.04
30-Sep-93 10,253.46 10,582.10
31-Oct-93 10,261.17 10,622.31
30-Nov-93 10,222.62 10,505.46
31-Dec-93 10,219.54 10,546.44
31-Jan-94 10,322.93 10,690.92
28-Feb-94 10,132.06 10,464.27
31-Mar-94 9,998.45 10,228.83
30-Apr-94 9,950.49 10,148.02
31-May-94 9,926.52 10,134.83
30-Jun-94 9,912.93 10,111.52
31-Jul-94 10,090.09 10,297.57
31-Aug-94 10,073.99 10,299.63
30-Sep-94 9,915.35 10,154.40
31-Oct-94 9,899.00 10,147.30
30-Nov-94 9,890.82 10,129.03
31-Dec-94 9,979.18 10,190.82
31-Jan-95 10,136.92 10,380.37
28-Feb-95 10,311.27 10,603.55
31-Mar-95 10,374.36 10,670.35
30-Apr-95 10,492.45 10,810.13
31-May-95 10,905.73 11,245.78
30-Jun-95 11,010.32 11,332.37
31-Jul-95 11,010.32 11,290.44
31-Aug-95 11,121.71 11,422.54
30-Sep-95 11,208.25 11,532.20
31-Oct-95 11,373.72 11,707.48
30-Nov-95 11,547.89 11,890.12
31-Dec-95 11,742.17 12,058.96
31-Jan-96 11,803.92 12,132.52
29-Feb-96 11,512.80 11,885.02
31-Mar-96 11,381.35 11,785.18
30-Apr-96 11,220.54 11,709.76
31-May-96 11,131.21 11,689.85
30-Jun-96 11,267.89 11,840.65
31-Jul-96 11,285.99 11,870.25
31-Aug-96 11,182.82 11,844.14
30-Sep-96 11,392.78 12,040.75
31-Oct-96 11,695.49 12,305.65
30-Nov-96 11,940.71 12,519.76
31-Dec-96 11,799.57 12,392.06
31-Jan-97 11,833.58 12,405.69
28-Feb-97 11,867.82 12,423.06
31-Mar-97 11,691.86 12,291.38
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ANNUALIZED TOTAL RETURNS AS OF 03/31/97
1 YEAR SINCE INCEPTION
-2.62% 1.44%
Date Government Income Portfolio B Lehman Brothers Government Bond Index
<S> <C> <C> <C>
31-May-95 10,000.00 10,000.00
30-Jun-95 10,089.60 10,077.00
31-Jul-95 10,081.56 10,039.72
31-Aug-95 10,186.07 10,157.18
30-Sep-95 10,260.04 10,254.69
31-Oct-95 10,423.02 10,410.56
30-Nov-95 10,594.16 10,572.96
31-Dec-95 10,767.64 10,723.10
31-Jan-96 10,825.35 10,788.51
29-Feb-96 10,545.03 10,568.43
31-Mar-96 10,423.83 10,479.65
30-Apr-96 10,257.58 10,412.58
31-May-96 10,182.77 10,394.88
30-Jun-96 10,304.96 10,528.97
31-Jul-96 10,313.36 10,555.30
31-Aug-96 10,212.58 10,532.07
30-Sep-96 10,409.40 10,706.91
31-Oct-96 10,680.65 10,942.46
30-Nov-96 10,891.98 11,132.86
31-Dec-96 10,756.47 11,019.30
31-Jan-97 10,785.08 11,031.42
28-Feb-97 10,808.58 11,046.87
31-Mar-97 10,266.51 10,929.77
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GOVERNMENT INCOME LEHMAN BROTHERS
PORTFOLIO C GOVERNMENT BOND INDEX
<S> <C> <C>
19-Apr-93 10,000.00 10,000.00
30-Apr-93 9,968.00 10,038.00
31-May-93 10,096.00 10,026.96
30-Jun-93 10,331.20 10,249.56
31-Jul-93 10,363.36 10,312.08
31-Aug-93 10,668.87 10,542.04
30-Sep-93 10,742.04 10,582.10
31-Oct-93 10,742.04 10,622.31
30-Nov-93 10,693.61 10,505.46
31-Dec-93 10,689.58 10,546.44
31-Jan-94 10,788.78 10,690.92
28-Feb-94 10,573.84 10,464.27
31-Mar-94 10,428.33 10,228.83
30-Apr-94 10,361.91 10,148.02
31-May-94 10,337.00 10,134.83
30-Jun-94 10,312.92 10,111.52
31-Jul-94 10,496.93 10,297.57
31-Aug-94 10,471.84 10,299.63
30-Sep-94 10,307.07 10,154.40
31-Oct-94 10,281.60 10,147.30
30-Nov-94 10,273.11 10,129.03
31-Dec-94 10,359.79 10,190.82
31-Jan-95 10,514.80 10,380.37
28-Feb-95 10,687.03 10,603.55
31-Mar-95 10,745.59 10,670.35
30-Apr-95 10,859.35 10,810.13
31-May-95 11,279.37 11,245.78
30-Jun-95 11,386.13 11,332.37
31-Jul-95 11,377.24 11,290.44
31-Aug-95 11,483.90 11,422.54
30-Sep-95 11,568.34 11,532.20
31-Oct-95 11,740.60 11,707.48
30-Nov-95 11,921.92 11,890.12
31-Dec-95 12,115.81 12,058.96
31-Jan-96 12,170.84 12,132.52
29-Feb-96 11,868.17 11,885.02
31-Mar-96 11,734.27 11,785.18
30-Apr-96 11,557.74 11,709.76
31-May-96 11,464.83 11,689.85
30-Jun-96 11,598.62 11,840.65
31-Jul-96 11,608.02 11,870.25
31-Aug-96 11,502.75 11,844.14
30-Sep-96 11,715.76 12,040.75
31-Oct-96 12,026.73 12,305.65
30-Nov-96 12,267.73 12,519.76
31-Dec-96 12,110.42 12,392.06
31-Jan-97 12,142.16 12,405.69
28-Feb-97 12,170.22 12,423.06
31-Mar-97 12,003.03 12,291.38
Annualized Total Returns As of 03/31/97
1 Year 3 Years Since Inception
2.29% 4.80% 4.73%
</TABLE>
The graphs compare a $10,000 investment in the Government Income Portfolio A
(front load), the Government Income Portfolio B (back-end load) and the
Government Income Portfolio C (level load) with a similar investment in the
Lehman Brothers Government Bond Index, on a cumulative and average annual total
return basis. Returns reflect the reinvestment of income dividends and capital
gains distributions, if any, as well as all fees and expenses. Performance
figures include the maximum applicable sales charge of 5.25% for Portfolio A
shares. The effect of the maximum contingent deferred sales charge for Portfolio
B shares (maximum 5% declining to 0% over six years) is included in Portfolio B
performance. Performance is affected by a 12b-1 Plan which commenced at
inception of each Portfolio.
Total returns reflect the fact that fees and expenses in excess of certain
expense limitations specified in the investment management agreement have been
deferred by the Adviser. Total return results would have been lower had there
been no deferral.
The Lehman Brothers Government Bond Index is an unmanaged index composed of all
publicly issued, non-convertible, domestic debt of the U.S. government or any
agency thereof, quasi-federal corporations or corporate debt guaranteed by the
U.S. government. Index returns reflect the reinvestment of income dividends and
capital gains distributions, if any, but do not reflect fees, brokerage
commissions, or other expenses of investing.
Past performance is no indication of future performance. Investment returns and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
- --------------------------------------------------------------------------------
26
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997
- ------------------------------------------------------------------------
GOVERNMENT INCOME FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
AGENCY OBLIGATIONS -- 54.3%
- ----------------------------------------------------------------------------
FEDERAL HOME LOAN BANK DISCOUNT NOTES -- 12.0%
5.460%, 04/03/97........................... $ 745,000 $ 744,774
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 14.4%
6.000%, 02/15/01........................... 150,000 149,016
9.000%, 06/01/06........................... 127,759 132,230
6.150%, 02/15/22........................... 150,000 139,734
6.500%, 12/01/22........................... 145,000 133,491
7.500%, 02/15/27........................... 365,000 348,803
------------
903,274
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 6.2%
6.500%, 06/25/23........................... 255,000 234,879
6.500%, 08/25/22........................... 170,000 157,091
------------
391,970
------------
GENERAL NATIONAL MORTGAGE ASSOCIATION -- 17.9%
7.500%, 08/15/23........................... 470,000 463,538
7.500%, 08/15/25........................... 666,366 655,950
------------
1,119,488
------------
TENNESSEE VALLEY AUTHORITY -- 3.8%
6.375%, 06/15/05........................... 250,000 238,825
------------
TOTAL AGENCY OBLIGATIONS
(Cost $3,455,331)........................................ 3,398,331
------------
- ----------------------------------------------------------------------------
CORPORATE BONDS -- 21.2%
- ----------------------------------------------------------------------------
AUTO -- 2.0%
Ford Motor Co.
7.400%, 11/01/46......................... 135,000 125,223
------------
BANK & INSURANCE -- 2.2%
General Global Insurance Holding Corp.
7.000%, 02/15/26......................... 150,000 136,286
------------
FINANCE -- 7.3%
AON Capital Trust A
8.205%, 01/01/27......................... 140,000 138,600
Lehman Brothers Holdings
6.250%, 06/29/98......................... 140,000 139,392
Contrywide Home Loan
7.450%, 09/16/03......................... 125,000 125,244
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
</TABLE>
FINANCE (CONTINUED)
<TABLE>
<S> <C> <C>
Conesco Finance
8.796%, 04/01/27......................... $ 50,000 $ 49,473
------------
452,709
------------
FOREIGN UTILITY (YANKEE) -- 1.0%
Hydro-Quebec
8.400%, 01/15/22......................... 60,000 62,558
------------
MEDIA -- 7.8%
British Sky Broadcasting
7.300, 10/15/06.......................... 500,000 487,960
------------
REAL ESTATE -- 0.9%
Marquette Real Estate
0.000%, 12/30/06......................... 60,000 58,309
------------
TOTAL CORPORATE BONDS
(Cost $1,357,458)........................................ 1,323,045
------------
- ----------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 30.8%
- ----------------------------------------------------------------------------
U.S. TREASURY BONDS -- 4.2%
10.625%, 08/15/15.......................... 15,000 20,198
8.125%, 08/15/21........................... 170,000 187,079
6.500%, 11/15/26........................... 60,000 55,237
------------
262,514
------------
U.S. TREASURY NOTES -- 26.6%
7.875%, 04/15/98........................... 360,000 365,513
5.125%, 11/30/98........................... 385,000 377,902
6.250%, 08/31/00........................... 305,000 301,140
7.500%, 11/15/01........................... 600,000 617,063
------------
1,661,618
------------
TOTAL U. S. TREASURY OBLIGATIONS
(Cost $1,955,628)........................................ 1,924,132
------------
TOTAL INVESTMENTS -- 106.3%
(Cost $6,768,417)........................................ 6,645,508
LIABILITIES IN EXCESS OF OTHER ASSETS -- (6.3%)............ (391,903)
------------
NET ASSETS -- 100.0%....................................... $ 6,253,605
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
27
<PAGE>
MONEY MARKET FUND
MONEY MARKET PORTFOLIO
- ------------------------------------------------------------------------
MANAGEMENT TEAM
Claudia L. Bengston,
Portfolio Manager
GOAL: The Money Market Fund seeks to obtain a high level of current income
consistent with preservation of capital and maintenance of liquidity. It invests
in high-quality, short-term, U.S. dollar-denominated money market instruments.*
REVIEW AND OUTLOOK: The Fund returned a 4.66% cumulative return for the period
ending March 31, 1997, versus a 4.22% cumulative return for the Lipper Money
Market. The current SEC 7-day yield as of March 31, 1997 was 5.08%.
- ------------
* The Money Market Fund is neither insured nor guaranteed by the U.S.
Government and there can be no assurance that the Fund will be able
to maintain a stable net asset value of $1 per share.
- --------------------------------------------------------------------------------
28
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997
- ------------------------------------------------------------------------
MONEY MARKET FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- --------------------------------------------------------------------------
AGENCY OBLIGATIONS -- 12.3%
- --------------------------------------------------------------------------
FEDERAL FARM CREDIT BANK DISCOUNT NOTES -- 2.3%
5.11%, 09/17/97............................ $ 850,000 $ 829,610
-------------
FEDERAL HOME LOAN BANK DISCOUNT NOTES -- 8.8%
5.56%, 04/30/97............................ 100,000 99,552
5.45%, 09/12/97............................ 205,000 199,910
5.40%, 09/26/97............................ 1,000,000 973,300
5.12%, 10/24/97............................ 1,000,000 970,702
5.30%, 12/05/97............................ 1,000,000 963,489
-------------
3,206,953
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 1.2%
5.34%, 05/23/97............................ 150,000 148,843
5.59%, 06/13/97............................ 300,000 296,600
-------------
445,443
-------------
TOTAL AGENCY OBLIGATIONS
(Cost $4,282,006)....................................... 4,482,006
-------------
- --------------------------------------------------------------------------
COMMERCIAL PAPER -- 54.3%
- --------------------------------------------------------------------------
AMERICAN BRANDS, INC. -- 2.7%
5.37%, 04/14/97............................ 1,000,000 998,061
ASSOCIATES CORP. -- 2.8%
5.29%, 04/03/97............................ 1,000,000 999,706
BELL ATLANTIC FINANCIAL SERVICES, INC. -- 3.3%
5.32%, 04/02/97............................ 1,198,000 1,197,823
CENTRAL ILLINOIS PUBLIC SERVICE -- 2.7%
5.33%, 04/28/97............................ 1,000,000 996,003
CARGILL, INC. -- 3.0%
5.30%, 04/11/97............................ 1,092,000 1,090,392
DUPONT DE NEMOURS AND CO., INC. -- 2.8%
5.30%, 04/04/97............................ 1,000,000 999,558
GENERAL ELECTRIC CAPITAL CORP. -- 2.8%
5.32%, 04/03/97............................ 1,000,000 999,704
GENERAL REINSURANACE CORP. -- 1.4%
5.27%, 04/07/97............................ 500,000 499,561
KAISER FOUNDATION HOSPITALS -- 2.7%
5.35%, 07/02/97............................ 1,000,000 986,328
HEINZ, H.J., CO. -- 5.5%
5.30%, 04/17/97............................ 1,000,000 997,644
5.31%, 04/17/97............................ 1,000,000 997,640
-------------
1,995,284
-------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- --------------------------------------------------------------------------
METLIFE FUNDING, INC. -- 1.4%
5.30%, 04/16/97............................ $ 500,000 $ 498,896
MORGAN, J.P. AND CO., INC. -- 2.7%
5.30%, 04/10/97............................ 1,000,000 998,675
NORTHERN ILLINOIS GAS CO. -- 2.7%
5.50%, 04/08/97............................ 1,000,000 998,931
NORWEST FINANCIAL, INC. -- 2.7%
5.29%, 04/10/97............................ 1,000,000 998,678
PHH CORP. -- 2.8%
5.52%, 04/07/97............................ 1,000,000 999,080
PITNEY BOWES CREDIT CORP. -- 2.7%
5.35%, 04/15/97............................ 1,000,000 997,919
POTOMAC ELECTRIC POWER CO. -- 2.7%
5.50%, 04/10/97............................ 1,000,000 998,625
SOUTHWESTERN PUBLIC SERVICE CO. -- 2.8%
5.30%, 04/04/97............................ 1,000,000 999,558
UNITED PARCEL SERVICE AMERICA, INC. -- 1.4%
5.30%, 04/07/97............................ 500,000 499,558
USAA CAPITAL CORP. -- 2.7%
5.34%, 05/20/97............................ 750,000 744,549
5.42%, 08/29/97............................ 250,000 244,355
-------------
988,904
-------------
TOTAL COMMERCIAL PAPER
(Cost $19,741,244)...................................... 19,741,244
-------------
- ---------------------------------------------------------
<CAPTION>
REPURCHASE AGREEMENT -- 33.5%
<S> <C> <C>
- ----------------------------------------------
Morgan J. P. & Co. $12,158,000.00 at 6.25%
(Agreement dated 03/31/97, to be
repurchased at $12,160,111 on 04/01/97;
collateralized by $12,175,000 Federal
National Mortgage Association, 6.85%, due
05/26/00) (Value $12,692,860)
(Cost $12,158,000)....................... 12,158,000 12,158,000
-------------
TOTAL INVESTMENTS -- 100.1%
(Cost $36,381,250)...................................... 36,381,250
LIABILITIES IN EXCESS OF OTHER ASSETS (0.1%).............. (32,659)
-------------
NET ASSETS 100.0%......................................... $ 36,348,591
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
29
<PAGE>
EMERGING COUNTRIES FUND
PORTFOLIOS A, B & C
- ------------------------------------------------------------------------
MANAGEMENT TEAM
Catherine Somhegyi,
Partner, Chief Investment Officer,
Global Equity Management
Lawrence S. Speidell, CFA,
Partner, Director of Global/Systematic Portfolio
Management and Research
Pedro V. Marcal,
Senior Portfolio Manager
Eswar Menon,
Portfolio Manager
Aaron M. Harris,
Portfolio Manager
Ernesto Ramos, Ph.D.,
Senior Portfolio Manager
GOAL: The Nicholas-Applegate Emerging Countries Fund seeks to provide
long-term capital appreciation by investing in companies in developing countries
around the world.
REVIEW AND OUTLOOK: The Emerging Countries Fund delivered solid results on the
strength of stock selections in some of the fastest growing markets of the
world.
During the fiscal year, the Fund's returns significantly outpaced the advance
of the MSCI Emerging Markets Free Index. The benefits of our stock selection
decisions could be no more apparent than in Thailand, where the Fund gained
approximately 17% in 1996, while the overall Thai market fell more than 36%.
Leaders of the world's emerging countries are actively pursuing reforms,
deregulating their economies, and inviting foreign investment. As a result, a
wealth of opportunities are being generated. Amid this environment, our holdings
in Russia, China, and Latin America were especially strong performers during the
fiscal year.
In Asia, many export-dependent economies were negatively impacted by slowing
consumption in Europe and Japan. We identified a number of Asian companies
capitalizing on change, including ASE Test Limited, a Taiwan-based provider of
integrated circuit testing services, and Guangnan Holdings, the sole distributor
of live and fresh foodstuffs in Hong Kong. Expanding its operations to include
food distribution in China and the development of a supermarket chain, Guangnan
is poised to benefit from increasing demand for imported foods.
Solid gains among Latin American holdings were also a significant source of
outperformance for the Fund during the period. For example, stock selection in
Brazil, specifically Telecomunicacoes Brasileires, one of the Fund's top
performers, was a positive contributor to the Fund's gains.
We remain optimistic regarding the outlook for emerging countries. Rapid
growth in these regions, combined with Nicholas-Applegate's bottom-up stock
selection process, creates promising opportunities for long-term appreciation.
REPRESENTATIVE HOLDINGS
Telecomunicacoes Brasileires, Brazil
De Beers Centenary, South Africa
Hindalco Industries, India
United Engineers, Malaysia
Corporacion Interamericana de Entretenimiento (CIE), Mexico
Pliva, Croatia
Vina Concha Y Toro, Chile
ASE Test, Taiwan
Siderar, Argentina
Guangnan Holdings, Hong Kong
- --------------------------------------------------------------------------------
30
<PAGE>
EMERGING COUNTRIES PORTFOLIOS
- ------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
EMERGING COUNTRIES PORTFOLIO A IFC INVESTABLE INDEX MSCI EMF INDEX
<S> <C> <C> <C>
11-28-94 $ 9,475.00 $ 10,000.00 $ 10,000.00
12-31-94 $ 9,052.00 $ 8,460.24 $ 8,721.60
03-31-95 $ 8,331.78 $ 7,233.52 $ 7,639.95
06-30-95 $ 9,582.68 $ 7,864.83 $ 8,432.90
09-30-95 $ 10,166.44 $ 7,833.49 $ 8,378.76
12-31-95 $ 9,625.48 $ 7,760.57 $ 8,265.82
03-31-96 $ 10,700.91 $ 8,344.26 $ 8,780.71
06-30-96 $ 11,783.97 $ 8,706.53 $ 9,147.21
09-30-96 $ 12,020.41 $ 8,509.96 $ 8,816.67
12-31-96 $ 12,274.33 $ 8,487.42 $ 8,764.70
03-31-97 $ 13,353.47 $ 9,295.55 $ 9,506.39
Annualized Total Returns As of 03/31/97
1 Year Since Inception
18.24% 13.17%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
EMERGING COUNTRIES PORTFOLIO B IFC INVESTABLE INDEX MSCI EMF INDEX
<S> <C> <C> <C>
05-31-95 $ 10,000.00 $ 10,000.00 $ 10,000.00
06-30-95 $ 10,096.00 $ 10,059.10 $ 10,030.00
09-30-95 $ 10,696.00 $ 10,019.01 $ 9,965.60
12-31-95 $ 10,112.00 $ 9,925.75 $ 9,831.28
03-31-96 $ 11,216.00 $ 10,672.28 $ 10,443.68
06-30-96 $ 12,336.00 $ 11,135.63 $ 10,879.59
09-30-96 $ 12,560.00 $ 10,884.22 $ 10,486.45
12-31-96 $ 12,806.21 $ 10,855.39 $ 10,424.63
03-31-97 $ 13,508.25 $ 11,888.99 $ 11,306.80
Annualized Total Returns As of 03/31/97
1 Year Since Inception
19.00% 17.80%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
EMERGING COUNTRIES PORTFOLIO C IFC INVESTABLE INDEX MSCI EMF INDEX
<S> <C> <C> <C>
11-28-94 $ 10,000.00 $ 10,000.00 $ 10,000.00
12-31-94 $ 9,467.90 $ 8,460.24 $ 8,721.60
03-31-95 $ 8,619.55 $ 7,233.52 $ 7,639.95
06-30-95 $ 9,876.07 $ 7,864.83 $ 8,432.90
09-30-95 $ 10,460.31 $ 7,833.49 $ 8,378.76
12-31-95 $ 9,900.08 $ 7,760.57 $ 8,265.82
03-31-96 $ 10,972.52 $ 8,344.26 $ 8,780.71
06-30-96 $ 12,068.97 $ 8,706.53 $ 9,147.21
09-30-96 $ 12,293.06 $ 8,509.96 $ 8,816.67
12-31-96 $ 12,531.94 $ 8,487.42 $ 8,764.70
03-31-97 $ 13,599.87 $ 9,295.55 $ 9,506.39
Annualized Total Returns As of 03/31/97
1 Year Since Inception
23.94% 14.06%
</TABLE>
The graphs compare a $10,000 investment in the Emerging Countries Portfolio A
(front load), the Emerging Countries Portfolio B (back-end load) and the
Emerging Countries Portfolio C (level load) with a similar investment in the
International Finance Corporation ("IFC") Investable Index and the MSCI Emerging
Markets Free Index ("EMF"), on a cumulative and average annual total return
basis. Performance returns within are calculated on a total return basis and
reflect all fees and expenses of the Portfolio with reinvestment of dividends
and capital gains, if any. Performance figures include the maximum applicable
sales charge of 5.25% for Portfolio A shares. The effect of the maximum
contingent deferred sales charge for Portfolio B (maximum 5.00% declining to 0%
over six years) is included in Portfolio B performance. Performance is affected
by a 12b-1 Plan which commenced at inception of each Portfolio.
Total returns reflect the fact that fees and expenses in excess of certain
expense limits specified in the investment management agreement have been
deferred by the Adviser. Total return results would have been lower had there
been no deferral.
The IFC Investable Index measures the performance of more than 1,100 stocks that
are legally and practically available in 25 emerging market countries of the
world. The Index is unmanaged.
The MSCI EMF Index is a market capitalization weighted index composed of
companies representative of the market structure of 22 Emerging Market countries
in Europe, Latin America, and the Pacific Basin. The Index excludes closed
markets and those shares in otherwise free markets which are not purchasable by
foreigners.
In future annual reports, Nicholas-Applegate will compare the Emerging Countries
Portfolios only to the MSCI EMF Index for purposes of showing annualized total
returns. We believe this shift in benchmark measures is appropriate since the
composition of the Fund more closely matches the composition of the MSCI EMF
Index.
Index returns reflect the reinvestment of dividends and capital gains
distributions, if any, but does not reflect fees, brokerage commissions, or
other expenses of investing.
Past performance is no indication of future performance. Investment returns and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
- --------------------------------------------------------------------------------
31
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997
- ------------------------------------------------------------------------
EMERGING COUNTRIES FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- --------------------------------------------------------------------------
COMMON STOCKS -- 91.8%
- --------------------------------------------------------------------------
ARGENTINA -- 5.1%
Bansud S.A................................. 61,000 $ 841,800
Banco Frances Rio Pla -- SP ADR............ 61,600 1,848,000
Compania Naviera Perez Companc S.A. -- B... 220,473 1,708,666
Disco S.A. -- ADR*......................... 19,400 632,925
Importadora y Exportadora de la
Patagonia S.A............................ 29,000 391,500
Siderca S.A................................ 719,900 1,529,788
Siderar S.A.I.C............................ 157,436 543,154
Telefonica De Argentina -- ADR............. 21,500 631,562
-------------
8,127,395
-------------
BRAZIL -- 12.7%
Banco Bradesco S.A......................... 207,408,000 1,697,206
Brazil Realty SA -- GDR.................... 55,100 1,460,150
Centrais Eletricas de Santa Catarina
S.A.*.................................... 307,300 351,349
Centrais Eletricas Brasileiras S.A. --
ADR...................................... 130,700 2,804,299
Companhia Brasileira de Distribuicao Grupo
Pao de Acucar -- ADR..................... 12,400 269,129
Companhia Brasileira de Distribuicao Grupo
Pao de Acucar -- GDR..................... 44,040 955,316
Companhia Energetica de Minas Gerais....... 26,530,000 1,139,364
Companhia Energetica de Minas Gerais PN.... 11,750,000 486,854
Companhia Paulista de Forca e Luz.......... 9,500,000 1,319,569
Itausa Investimentos S.A................... 654,000 556,175
Lojas Arapua S.A........................... 56,300,000 1,298,044
Lojas Renner S.A........................... 27,150,600 1,423,848
Telec de Rio Janeiro S.A.*................. 4,736,000 648,890
Telec de Rio Janeiro S.A. PN............... 5,689,496 779,530
Telecomunicacoes Brasileiras -- ADR........ 40,529 4,149,156
Telecomunicacoes do Parana S.A. --
Preferred................................ 1,200,000 765,378
-------------
20,104,257
-------------
CHILE -- 4.6%
Chilgener S.A. -- ADR...................... 43,800 1,127,850
CIA Telecom de Chile -- ADR................ 30,600 879,750
Laboratorio Chile S.A. -- ADR.............. 51,000 1,115,625
Madeco S.A. -- ADR......................... 45,200 1,199,976
Santa Isabel S.A. -- ADR................... 23,200 600,300
Sociedad Quimica Minera -- A............... 22,100 1,273,512
Vina Concha Y Toro S.A. -- SP ADR.......... 37,800 1,077,300
-------------
7,274,313
-------------
CHINA -- 0.5%
Shenzhen Expressway Co. -- H*.............. 2,428,000 759,847
-------------
COLOMBIA -- 0.4%
Banco Ganadero S.A. -- ADR................. 28,200 715,575
-------------
CROATIA -- 0.2%
Pliva d. d.*............................... 19,900 288,550
-------------
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- --------------------------------------------------------------------------
CZECHOSLOVAKIA REPUBLIC -- 0.9%
CKD Praha Holding A.S.*.................... 13,221 $ 397,539
SPT Telecom A.S.*.......................... 8,900 1,055,155
-------------
1,452,694
-------------
EGYPT -- 0.5%
Helwan Cement.............................. 18,175 427,283
Commercial International Bank of Egypt --
GDR*..................................... 15,905 359,453
-------------
786,736
-------------
GREECE -- 0.9%
Hellenic Bottling Co. S.A.................. 8,520 276,950
Intracom S.A. -- Pref...................... 13,220 311,940
Sarantis S.A............................... 58,400 834,522
-------------
1,423,412
-------------
HONG KONG -- 2.3%
Anhui Gujing Distillery Co.*............... 13,200 20,340
Beijing Datang Power Generation Co.*....... 2,940,000 1,176,182
China Overseas Land & Investment........... 1,257,000 681,318
Guangnan Holdings Ltd...................... 154,000 199,734
Guangnan Holdings Ltd. -- Warrants......... 84,857 47,089
Guangdong Investments Holdings Ltd......... 550,000 472,009
GZI Transportation Ltd.*................... 650,000 381,672
Qingling Motors Co.*....................... 634,000 337,504
Shenzhen Fangda Co. Ltd.................... 230,500 269,206
-------------
3,585,054
-------------
HUNGARY -- 1.0%
Borsodchem Rt.............................. 15,403 569,931
Graboplast Rt.............................. 12,260 549,303
Pick Szeged Rt............................. 6,560 430,359
-------------
1,549,593
-------------
INDIA -- 9.3%
Bharat Heavy Electricals Ltd............... 45,000 366,848
BSES LTD -- GDR*........................... 42,000 850,500
BSES LTD -- GDR 144A*...................... 10,000 202,500
Hindalco Industries Ltd. -- ADR............ 53,200 1,742,300
Hindalco Industries Ltd. -- GDR............ 24,900 815,475
ITC Ltd. -- GDR............................ 66,200 868,875
ITC Ltd. -- 144A........................... 20,500 269,063
Larsen & Toubro Limited -- GDR............. 21,500 306,375
Larsen & Toubro Limited -- GDR............. 29,000 413,250
Mahindra & Mahindra -- GDR*................ 12,500 146,875
Mahindra & Mahindra -- GDR, 144A........... 55,000 646,250
NIIT Ltd................................... 128,000 1,277,146
Oriental Bank of Commerce.................. 418,000 783,459
Punjab Tractors Ltd........................ 25,000 309,365
State Bank of India........................ 125,000 950,216
State Bank of India -- GDR*................ 38,000 872,100
State Bank of India -- GDR, 144A*.......... 25,900 594,405
Tata Engineering & Locomotive Co. Ltd.*.... 114,000 1,390,800
Videsh Sanchar Nigam Ltd. -- GDR, 144A*.... 99,000 1,737,450
Wockhardt Ltd. -- GDR...................... 22,000 167,750
-------------
14,711,002
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
32
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCKS (Continued)
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
INDONESIA -- 3.9%
PT Astra International -- Foreign.......... 196,000 $ 639,792
PT Bank Bire -- Foreign.................... 300,000 415,981
PT Bank International Indonesia --
Foreign.................................. 1,723,329 1,309,971
PT Bank International Indonesia -- Foreign
Warrants*................................ 74,962 26,539
PT Bimantara Citra -- Foreign.............. 884,000 1,141,417
PT Hanjaya Mandala Sampoerma -- Foreign.... 67,000 313,948
PT Indofood Sukses Makmur -- Foreign....... 126,000 278,149
PT Sierad Produca -- Foreign*.............. 800,000 274,900
PT Steady Safe Transportation -- Foreign... 340,000 403,603
PT Telekomunikasi Indonesia -- Foreign..... 610,000 933,722
PT Tempo Scan Pacific -- Foreign........... 134,000 276,274
PT Tempo Scan Pacific -- Local............. 48,000 98,964
PT Wicaksana Overseas -- Foreign........... 79,000 102,827
-------------
6,216,087
-------------
IRELAND -- 0.2%
Saville Systems Ireland PLC -- ADR*........ 10,800 310,500
-------------
ISRAEL -- 2.3%
Bank Leumi Le' Israel*..................... 321,143 512,717
Gilat Satellite Networks Ltd.*............. 29,800 901,450
Koor Industries Ltd. -- ADR................ 50,000 900,000
NICE-System, Ltd.*......................... 25,200 516,600
Orbotech Ltd.*............................. 20,600 370,800
Tecnomatix Technologies Ltd.*.............. 19,900 412,925
Teledata Communications Ltd.*.............. 500 9,000
-------------
3,623,492
-------------
KOREA -- 1.1%
Korea Housing Bank......................... 310 5,520
Korea Mobile Telecommunications Corp....... 9,270 821,603
LG Info & Communications Ltd............... 9,179 929,405
Samsung Electronics (New).................. 3 237
-------------
1,756,765
-------------
LUXEMBURG -- 0.5%
First NIS Regional Fund*................... 15,000 236,250
Gujarat Ambuja Cements -- GDR.............. 67,600 523,900
-------------
760,150
-------------
MALAYSIA -- 8.1%
AMMB Holdings BHD.......................... 17,000 146,340
Commerce Asset Holding BHD................. 76,000 533,764
Ekran BHD.................................. 79,000 250,313
Fraser & Neave Holdings BHD................ 148,000 734,773
Hume Industries BHD........................ 188,000 1,062,361
Malayan Banking BHD........................ 137,000 1,562,159
Metroplex BHD.............................. 922,000 1,079,233
Rashid Hussain BHD......................... 73,000 574,571
Road Builder (M) Holdings BHD.............. 94,000 546,357
Sime Darby BHD............................. 423,000 1,545,166
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- --------------------------------------------------------------------------
</TABLE>
MALAYSIA (CONTINUED)
<TABLE>
<S> <C> <C>
UMW Holdings BHD........................... 410,000 $ 2,267,205
United Engineers Ltd....................... 182,000 1,586,761
YTL Power BHD*............................. 600,000 967,185
-------------
12,856,188
-------------
MEXICO -- 9.7%
Cifra S.A. de C.V. -- A.................... 130,502 177,916
Cifra S.A. de C.V. -- C.................... 1,067,000 1,500,627
Coca-Cola Femsa S.A. -- ADR................ 47,400 1,706,400
Consorcio ARA S.A.*........................ 458,000 1,566,804
Corporacion GEO, S.A. de C.V. -- B*........ 102,000 488,514
Corporacion Interamericana de Entertainment
S.A.*.................................... 415,900 1,460,985
ECE S.A.*.................................. 180,000 248,134
Empresas ICA S.A. -- SP ADR................ 102,500 1,627,188
Fomento Economico Mexicano, S.A. -- B...... 408,000 1,814,482
Gruma S.A.*................................ 192,254 950,004
Grupo Radio Centro S.A. -- ADR............. 115,000 991,935
Panamerican Beverages, Inc. -- Class A..... 28,500 1,528,313
Tablex S.A. de C.V......................... 186,000 659,867
Tubos de Acero de Mexico S.A. -- ADR*...... 36,500 625,062
-------------
15,346,231
-------------
MOROCCO -- 0.6%
Banque Marocaine Commerce -- GDR, 144A*.... 47,000 893,000
-------------
PAKISTAN -- 0.8%
Fauji Fertilizer Company Ltd............... 10,000 19,586
Hub Power Company*......................... 635,000 592,540
Pakistan State Oil Company Ltd............. 35,970 251,287
SUI Northern Gas Pipelines*................ 465,750 348,615
-------------
1,212,028
-------------
PERU -- 2.4%
Cementos Norte Pacasmayo S.A............... 1 2
Compania de Minas Buenaventura S.A......... 60,700 1,305,050
Consorcio Alimentos Fabril Pacifico*....... 247,350 364,989
Consorcio Alimentos Fabril Pacifico --
Rights................................... 22,499 596
Credicorp Ltd.............................. 55,900 1,306,663
Telefonica Del Peru S.A. -- ADR............ 35,000 778,750
-------------
3,756,050
-------------
PHILIPPINES -- 3.7%
Belle Corp.*............................... 1,824,000 581,465
Empire East Land Holdings, Inc.*........... 1,200,000 466,793
Equitable Banking Corp.*................... 30,000 128,994
Far East Bank.............................. 60,800 269,966
Filinvest Land, Inc.*...................... 1,031,000 328,668
Metro Pacific Corp......................... 5,000,000 1,518,027
Metropolitan Bank & Trust Co............... 45,837 1,191,588
Music Semiconductors Corp.*................ 1,149,000 632,277
Selecta Dairy Products, Inc................ 50,000 5,598
Solid Group, Inc.*......................... 2,801,000 744,099
-------------
5,867,475
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
33
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997 -- CONTINUED
- --------------------------------------------------------------------------------
EMERGING COUNTRIES FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCKS (Continued)
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
POLAND -- 1.0%
Computerland Poland S.A.*.................. 3,600 $ 113,598
Elektrim Spolda Akcyjna S.A................ 44,600 391,737
National Investment Fund of Poland*........ 20,800 1,082,628
-------------
1,587,963
-------------
PORTUGAL -- 0.9%
Portugal Telecom S.A....................... 9,075 337,905
Sonae Investimentos S.A.................... 10,400 351,276
Telecel Comunicacaoes Pessoais S.A.*....... 8,100 664,053
-------------
1,353,234
-------------
RUSSIA -- 1.3%
Lukoil Holding -- ADR...................... 1,900 107,559
Megionneftegazgeologia -- ADR 144A*........ 70 396,900
Moscow City Tele Network -- RDC 144A*...... 167 233,800
Rostelecom -- ADR 144A*.................... 10 390,000
Rostelecom -- 144A*........................ 50 975,000
-------------
2,103,259
-------------
SINGAPORE -- 0.6%
ASA Ltd.................................... 383,000 477,093
Datacraft Asia Ltd......................... 101,000 214,120
Elec & Eltek International Co. Ltd......... 65,000 301,600
-------------
992,813
-------------
SLOVENIA -- 0.2%
SKB Bank -- 144A*.......................... 9,000 321,750
-------------
SOUTH AFRICA -- 7.0%
Amalg Banks of South Africa................ 99,300 629,149
Barlow Ltd................................. 165,700 1,839,111
De Beers Centenary AG*..................... 54,000 1,967,280
Driefontein Consolidated Ltd............... 125,700 1,140,581
King Food Holdings*........................ 181,500 64,444
Liberty Life Association of Africa Ltd..... 21,655 607,612
South African Breweries Ltd................ 108,500 3,437,196
Vaal Reefs Exploration & Mining Co.,
Ltd...................................... 22,700 1,366,325
-------------
11,051,698
-------------
TAIWAN -- 1.3%
ASE Test Limited*.......................... 15,200 487,254
China Steel Co. -- GDR*.................... 33,825 655,359
ROC Taiwan Fund*........................... 45,000 534,375
Taiwan Fund, Inc........................... 14,450 355,831
-------------
2,032,819
-------------
THAILAND -- 2.6%
Grammy Entertainment PLC -- Foreign........ 67,000 902,617
K.R. Precision Public Co., Ltd. --
Foreign.................................. 95,240 645,198
Nation Multimedia Group PLC -- Foreign..... 250,600 718,618
Pizza Co. Ltd. -- Foreign.................. 21,000 145,092
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- --------------------------------------------------------------------------
</TABLE>
THAILAND (CONTINUED)
<TABLE>
<S> <C> <C>
PTT Exploration and Production --
Foreign.................................. 76,500 $ 1,136,605
Serm Suk Co., Ltd. -- Local................ 2,000 28,637
Serm Suk Co., Ltd. -- Foreign.............. 9,400 191,763
Thai Engine -- Foreign..................... 52,000 376,289
Thai Farmers Bank -- Warrants*............. 10,250 7,398
-------------
4,152,217
-------------
TURKEY -- 1.0%
Akbank T.A.S............................... 3,513,255 283,128
Arcelik A.S................................ 2,604,000 346,358
Eczacibasi Ilac Sanayi VE TI*.............. 8,166,000 466,410
Global Menkul Degerler A.S.*............... 21,018,000 526,231
Migros Turk T. A. S........................ 25,000 25,917
-------------
1,648,044
-------------
UNITED STATES OF AMERICA -- 2.8%..........................................
Euronet Services, Inc.*.................... 56,300 717,825
Harken Energy Corp......................... 258,900 1,278,319
Pride Petroleum Services, Inc.............. 11,500 238,625
TV Filme, Inc.*............................ 126,800 1,569,150
Vitech America, Inc........................ 52,800 640,200
-------------
4,444,119
-------------
VENEZUELA -- 1.4%
Mavesa SA -- ADR........................... 157,675 1,044,879
Siderurgica Venezolana Sivensa, Saica
S.A.C.A. -- ADR.......................... 395,200 1,136,200
-------------
2,181,079
-------------
TOTAL COMMON STOCKS
(Cost $139,967,199)..................................... 145,245,389
-------------
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
- --------------------------------------------------------------------------
CONVERTIBLE CORPORATE BONDS -- 0.2%
- --------------------------------------------------------------------------
Quingling Motors Ltd.
(Cost $335,000)
3.50%, 01/22/02.......................... $ 335,000 333,744
-------------
- --------------------------------------------------------------------------
COMMERCIAL PAPER -- 1.9%
- --------------------------------------------------------------------------
Associate Corporation of North America
(Cost $3,036,000)
6.75%, 4/1/97............................ 3,036,000 3,036,000
-------------
TOTAL INVESTMENTS -- 93.9%
(Cost $143,338,199)..................................... 148,615,133
OTHER ASSETS IN EXCESS OF LIABILITIES -- 6.1%............. 9,721,751
-------------
NET ASSETS -- 100.0%...................................... $ 158,336,884
-------------
</TABLE>
- ---------------
* Non-Income Producing Security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
34
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF MARCH 31, 1997
- ------------------------------------------------------------------------
EMERGING COUNTRIES FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
- -------------------------------------------- -------------
<S> <C>
Agriculture................................. 0.6%
Alcoholic Beverages......................... 4.0
Automotive.................................. 1.8
Beverages/Soft Drinks....................... 2.4
Broadcasting................................ 1.6
Building Materials.......................... 2.4
Chemicals................................... 1.6
Closed End/Country Funds.................... 1.4
Computers/Office Automation................. 0.1
Consumer Electrical......................... 0.7
Consumer Services........................... 0.6
Department/Discount Stores.................. 2.0
Drugs/Pharmaceuticals....................... 1.3
Electric Utilities.......................... 6.3
Electronic Instruments...................... 0.4
Entertainment............................... 1.5
Food Chains................................. 1.8
Grocery Products............................ 2.9
Homebuilding................................ 1.5
Industrial Engineering/Construction......... 2.1
Integrated Oil Companies.................... 1.1
Investment Companies........................ 1.3
Life Insurers............................... 0.4
Machinery/Equipment......................... 1.6
Medical Supplies............................ 0.2
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
- -------------------------------------------- -------------
<S> <C>
Metals...................................... 5.7%
Money Center Banks.......................... 3.6
Oil/Gas Production.......................... 2.4
Oilfield Services/Equipment................. 0.2
Other Commercial/Industrial Services........ 2.0
Other Consumer Services..................... 0.4
Other Financial Services.................... 3.0
Other Transportation........................ 0.2
Other Producers/Manufacturing............... 8.3
Publishing.................................. 0.5
Real Estate Development/Investment.......... 1.8
Regional/Commercial Banks................... 6.7
Restaurants................................. 0.2
Semiconductors/Electric Companies........... 0.7
Soaps/Cosmetics............................. 0.5
Software.................................... 1.3
Telecommunication Equipment................. 1.3
Telecommunication Services.................. 2.9
Telephone................................... 7.1
Tobacco Products............................ 0.4
Water Supply................................ 0.6
Wholesale Distribution...................... 0.6
Short Term Obligations...................... 1.9
Other Assets in Excess of Liabilities....... 6.1
-----
NET ASSETS.................................. 100.0%
-----
-----
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
35
<PAGE>
INTERNATIONAL SMALL CAP GROWTH FUND
(PREVIOUSLY, INTERNATIONAL GROWTH FUND)
PORTFOLIOS A, B & C
- ------------------------------------------------------------------------
MANAGEMENT TEAM
Catherine Somhegyi,
Partner, Chief Investment Officer,
Global Equity Management
Lawrence S. Speidell, CFA,
Partner, Director of Global/Systematic Portfolio
Management and Research
Loretta J. Morris,
Senior Portfolio Manager
Alex Muromcew,
Portfolio Manager
Melisa Grigolite,
Portfolio Manager
Ernesto Ramos, Ph.D,
Senior Portfolio Manager
GOAL: The International Small Cap Growth Fund seeks to maximize long-term
capital appreciation through investment in a portfolio of equity securities
primarily of smaller foreign companies.
REVIEW AND OUTLOOK: The International Small Cap Growth Fund delivered solid
performance in the fiscal year ended March 31, 1997 on the strength of its
superior stock selection. The Fund outpaced both the Salomon EPAC/EMI Index,
representative of smaller international companies, and the Lipper International
Small Company Funds Average, a measure of peer performance.
The Fund benefited from excellent stock selections, from investments in stocks
of emerging markets countries, as well as from underweighting the weak Japanese
stock market, all resulting from our bottom-up process of managing portfolios.
Exporters were key to the Fund's success in European markets as well as in
Japan. The strong U.S. dollar helped European exporters, and demand for new car
models from European manufacturers boosted auto stocks. This helped us with our
holdings in companies such as Porsche, whose cost cutting program has resulted
in a ten-fold increase in profits and whose new Boxster model is expected to
more than double the firm's orders.
We benefited from our holdings of Sema, a UK company, showing solid growth as
outsourcing becomes an increasingly popular international trend.
We remain optimistic about the opportunities for international investing in
both the long and short term. International companies appear to be attractively
valued relative to U.S. companies and foreign economies are showing signs of
continued improvement. Long-term trends toward improved efficiency and stability
appear firmly in place.
REPRESENTATIVE HOLDINGS
Logitech, Switzerland
Porsche, Germany
Ares Serono, Switzerland
Sema Group, United Kingdom
Bertrand Faure, France
Datacraft Asia, Singapore
Games Workshop Group, United Kingdom
Qiagen, Netherlands
Tomra Systems, Norway
Ibiden, Japan
- --------------------------------------------------------------------------------
36
<PAGE>
INTERNATIONAL SMALL CAP GROWTH PORTFOLIOS
- ------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INTERNATIONAL SMALL SALOMON
CAP GROWTH PORTFOLIO A MSCI EAFE INDEX EPAC EMI
<S> <C> <C> <C>
06-07-90 9,475.00 10,000.00 10,000.00
06-30-90 9,603.62 9,911.55 10,135.00
09-30-90 7,481.77 7,810.43 7,880.19
12-31-90 7,793.29 8,632.82 8,303.82
03-31-91 8,461.75 9,274.98 9,051.40
06-30-91 8,017.65 8,768.88 8,511.83
09-30-91 8,653.45 9,520.61 9,033.08
12-31-91 8,664.16 9,680.13 8,857.15
03-31-92 7,867.33 8,531.62 7,967.30
06-30-92 8,194.00 8,711.93 8,329.44
09-30-92 7,872.99 8,843.70 7,906.76
12-31-92 7,551.02 8,502.43 7,941.40
03-31-93 8,323.98 9,521.96 8,594.15
06-30-93 9,397.92 10,479.70 9,479.41
09-30-93 9,813.75 11,174.88 10,092.36
12-31-93 9,465.10 11,271.28 9,764.47
03-31-94 10,170.77 11,664.11 10,693.45
06-30-94 10,557.20 12,259.83 11,128.80
09-30-94 10,666.80 12,271.74 11,018.18
12-31-94 10,299.72 12,146.02 10,685.83
03-31-95 10,046.59 12,368.15 10,605.69
06-30-95 10,194.98 12,458.57 10,573.78
09-30-95 10,884.53 12,960.41 10,994.72
12-31-95 10,867.27 13,484.77 11,197.92
03-31-96 11,599.40 13,874.12 11,834.25
06-30-96 12,322.71 14,093.63 12,376.53
09-30-96 12,172.75 14,076.94 12,059.30
12-31-96 12,784.04 14,301.01 11,922.57
03-31-97 13,301.04 14,077.30 11,686.63
Annualized Total Returns
As of 03/31/97
1 Year 5 Years Since Inception
8.65% 9.88% 4.27%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INTERNATIONAL SMALL SALOMON
CAP GROWTH PORTFOLIO B MSCI EAFE INDEX EPAC EMI
<S> <C> <C> <C>
6-07-90 10,000.00 10,000.00 10,000.00
6-30-90 10,130.33 9,911.55 10,135.00
9-30-90 7,878.13 7,810.43 7,880.19
12-31-90 8,192.95 8,632.82 8,303.82
3-31-91 8,881.61 9,274.98 9,051.40
6-30-91 8,401.54 8,768.88 8,511.83
9-30-91 9,053.42 9,520.61 9,033.08
12-31-91 9,049.90 9,680.13 8,857.15
3-31-92 8,203.81 8,531.62 7,967.30
6-30-92 8,530.75 8,711.93 8,329.44
9-30-92 8,183.05 8,843.70 7,906.76
12-31-92 7,835.48 8,502.43 7,941.40
3-31-93 8,623.96 9,521.96 8,594.15
6-30-93 9,721.39 10,479.70 9,479.41
9-30-93 10,135.28 11,174.88 10,092.36
12-31-93 9,759.10 11,271.28 9,764.47
3-31-94 10,470.04 11,664.11 10,693.45
6-30-94 10,850.41 12,259.83 11,128.80
9-30-94 10,949.57 12,271.74 11,018.18
12-31-94 10,473.85 12,146.02 10,685.83
3-31-95 10,200.62 12,368.15 10,605.69
6-30-95 10,325.90 12,458.57 10,573.78
9-30-95 11,012.62 12,960.41 10,994.72
12-31-95 10,970.75 13,484.77 11,197.92
3-31-96 11,690.96 13,874.12 11,834.25
6-30-96 12,394.43 14,093.63 12,376.53
9-30-96 12,226.94 14,076.94 12,059.30
12-31-96 13,000.85 14,301.01 11,922.57
3-31-97 13,506.87 14,077.30 11,686.63
Annualized Total Returns
As of 03/31/97
1 Year 5 Years Since Inception
8.96% 9.91% 4.30%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INTERNATIONAL SMALL SALOMON
CAP GROWTH PORTFOLIO C MSCI EAFE INDEX EPAC EMI
<S> <C> <C> <C>
06-07-90 10,000 10,000 10,000.00
06-30-90 10,130 9,912 10,135.00
09-30-90 7,878 7,810 7,880.19
12-31-90 8,193 8,633 8,303.82
03-31-91 8,882 9,275 9,051.40
06-30-91 8,402 8,769 8,511.83
09-30-91 9,053 9,521 9,033.08
12-31-91 9,050 9,680 8,857.15
03-31-92 8,204 8,532 7,967.30
06-30-92 8,531 8,712 8,329.44
09-30-92 8,183 8,844 7,906.76
12-31-92 7,835 8,502 7,941.40
03-31-93 8,624 9,522 8,594.15
06-30-93 9,721 10,480 9,479.41
09-30-93 10,135 11,175 10,092.36
12-31-93 9,759 11,271 9,764.47
03-31-94 10,470 11,664 10,693.45
06-30-94 10,850 12,260 11,128.80
09-30-94 11,032 12,272 11,018.18
12-31-94 10,615 12,146 10,685.83
03-31-95 10,157 12,368 10,605.69
06-30-95 10,337 12,459 10,573.78
09-30-95 11,028 12,960 10,994.72
12-31-95 10,994 13,485 11,197.92
03-31-96 11,712 13,874 11,834.25
06-30-96 12,421 14,094 12,376.53
09-30-96 12,259 14,077 12,059.30
12-31-96 12,853 14,301 11,922.57
03-31-97 13,350 14,077 11,686.63
Annualized Total Returns
As of 03/31/97
1 Year 5 Years Since Inception
13.98% 10.23% 4.33%
</TABLE>
The graphs compare a $10,000 investment in the International Small Cap Growth
Portfolio A (front load), the International Small Cap Growth Portfolio B
(back-end load) and the International Small Cap Growth Portfolio C (level load)
with a similar investment in the Morgan Stanley Capital International ("MSCI")
EAFE Index and the Salomon EPAC EMI Index, on a cumulative and average annual
total return basis. Returns reflect the reinvestment of income dividends and
capital gains distributions, if any, as well as all fees and expenses.
Performance figures include the maximum applicable sales charge of 5.25% for
Portfolio A shares. The effect of the maximum contingent deferred sales charge
for Portfolio B shares (maximum 5.00% declining to 0% over six years) is
included in Portfolio B performance. Performance is affected by a 12b-1 Plan
which commenced at inception of each Portfolio.
Performance results reflect the total returns of a predecessor limited
partnership managed by Nicholas-Applegate Capital Management prior to the
effective date of the Portfolio's registration statement on 8/31/94, 5/31/95 and
8/31/94, respectively. Limited partnership returns are restated to reflect all
fees and expenses applicable to each Portfolio. If the limited partnership had
been registered as an investment company under federal securities laws, its
performance might have been adversely affected because of the additional
restrictions applicable to registered investment companies.
Total returns reflect the fact that fees and expenses in excess of certain
expense limitations specified in the investment management agreement have been
deferred by the Adviser. Total return results would have been lower had there
been no deferral.
The MSCI EAFE Index is an unmanaged index that is a generally accepted benchmark
for major overseas markets. The Index weightings represent the relative
capitalization of the major overseas markets including in the Index on a U.S.
dollar adjusted basis.
The Salomon EPAC Extended Market Index ("EMI") is an unmanaged index. It is a
top-down, float capitalization-weighted index that includes shares of about
2,821 companies in 22 countries excluding Canada and the United States.
Companies within the Index are smaller capitalization companies with available
float market capitalizations greater than U.S. $100 million. Only issues that
are legally and practically available to outside investors are included in the
Index. Index returns reflect the reinvestment of income dividends and capital
gains distributions, if any, but do not reflect fees, brokerage commissions, or
other expenses of investing.
In future reports, Nicholas-Applegate will compare the International Small Cap
Growth Fund only to the Salomon EPAC EMI Index for purpose of showing annualized
total returns. We believe this shift in benchmark measures is appropriate since
the composition of the Fund more closely matches the composition of the Salomon
EPAC EMI.
Past performance is no indication of future performance. Investment returns and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
- --------------------------------------------------------------------------------
37
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997
- ------------------------------------------------------------------------
INTERNATIONAL SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------
COMMON STOCKS -- 95.6%
- ---------------------------------------------------------------------------
ARGENTINA -- 1.4%
Banco Frances Del Rio De La Plata S.A.-
ADR...................................... 7,015 $ 210,450
Compania Naviera Perez SA.................. 40,870 316,743
Siderar SA................................. 3,232 11,150
Siderca SA................................. 155,800 331,075
-----------
869,418
-----------
AUSTRALIA -- 0.0%
Australian Gas Light Co., Ltd.............. 1,083 6,155
-----------
BELGIUM -- 0.7%
Barco N.V.................................. 2,465 426,297
-----------
BRAZIL -- 1.5%
Centrais Electricas Brasileiras
S/A-Electrobas........................... 14,500 311,112
Lojas Arapua S.A........................... 2,616,000 60,314
Telecomunicacoes Brasileiras
Sponsored ADR............................ 3,000 307,125
TV Filme, Inc.*............................ 23,900 295,762
-----------
974,313
-----------
CANADA -- 3.1%
Abitibi-Price, Inc......................... 16,100 234,959
Jannock Ltd................................ 32,300 488,538
Prime Resource Group, Inc.................. 54,500 432,629
Royal Bank of Canada....................... 20,600 803,400
-----------
1,959,526
-----------
CHILE -- 0.6%
Quimica Minera SA-ADR...................... 3,300 190,163
Vina Concha Y Toro SA-ADR.................. 6,600 188,100
-----------
378,263
-----------
CZECHOSLOVAKIA -- 0.4%
SPT Telecom AS*............................ 2,300 272,680
-----------
DENMARK -- 0.7%
Novo Nordisk A/S-B......................... 4,200 439,566
-----------
EGYPT -- 0.4%
Commercial International Bank*............. 10,650 240,690
-----------
FINLAND -- 2.8%
Huhtamaki Oy............................... 6,700 326,044
Oy Nokia AB-ADR............................ 7,700 448,525
Raision Tehtaat Oy......................... 10,700 985,681
-----------
1,760,250
-----------
FRANCE -- 6.1%
Bertrand Faure S.A......................... 14,000 714,400
Bouygues Offshore S.A...................... 16,000 426,040
Cap Gemini Sogeti S.A...................... 12,200 741,843
Clarins S.A................................ 3,700 507,436
Lagardere Groupe S.A. (Non-voting)......... 238 7,715
Lagardere Groupe S.A....................... 20,700 671,013
Sidel S.A.................................. 5,320 416,920
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------
</TABLE>
FRANCE (CONTINUED)
<TABLE>
<S> <C> <C>
Zodiac S.A................................. 1,300 $ 341,526
-----------
3,826,893
-----------
GERMANY -- 6.9%
Fresenius AG............................... 1,050 230,396
Fresenius Medical AG-ADR*.................. 14,000 364,000
Fresenius Medical Care AG-ADR*............. 6,500 198,250
Gehe AG.................................... 4,500 312,410
Moebel Walthern AG......................... 7,700 408,543
Porsche AG................................. 900 1,033,273
Schmalbach Lubeca AG....................... 2,000 419,664
Sixt AG.................................... 850 509,592
Volkswagen AG.............................. 1,600 882,494
-----------
4,358,622
-----------
HONG KONG -- 1.5%
Dao Heng Bank Group Ltd.................... 96,100 439,028
Guangdong Investments Ltd.................. 275,000 236,004
Qingling Motors Company*................... 449,000 239,021
-----------
914,053
-----------
INDIA -- 1.4%
Hindalco Industries Ltd.................... 10,000 327,500
State Bank of India-GDR*................... 23,800 546,210
-----------
873,710
-----------
INDONESIA -- 0.4%
Bank Negara Indonesia*..................... 442,000 253,137
-----------
IRELAND -- 0.7%
Saville Systems PLC-ADR*................... 16,000 460,000
-----------
ISRAEL -- 0.9%
Gilat Satellite Network-ADR*............... 9,700 293,425
Koor Industries Ltd........................ 7,500 135,000
Tecnomatix Technologies Ltd.*.............. 6,400 132,800
-----------
561,225
-----------
ITALY -- 4.8%
Banca Fideuram SpA......................... 226,000 585,675
Brembo SpA................................. 47,000 614,637
Credito Italiano SpA....................... 456,000 648,302
Pininfarina SpA............................ 46,100 624,991
Telecom Italia Mobile SpA.................. 193,000 555,729
-----------
3,029,334
-----------
JAPAN -- 11.9%
Circle K Japan Co., Ltd.................... 4,680 196,861
Fujikura Co., Ltd.......................... 24,000 171,817
Hokuto Corp................................ 14,300 446,514
Ibiden Co., Ltd............................ 30,000 322,763
Matsumotokiyoshi Co........................ 1,000 29,526
Matsushita Kotobuki Electronics
Industries Ltd........................... 11,000 326,565
Meitec Corp................................ 30,000 601,844
Nichiei Co., Ltd........................... 6,500 504,773
Nidec Corp................................. 14,000 518,686
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
38
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCKS (Continued)
- ---------------------------------------------------------
JAPAN (CONTINUED)
<TABLE>
<S> <C> <C>
Nintendo Corp. Ltd......................... 9,800 $ 703,964
Promise Co., Ltd........................... 11,000 460,929
Rohm Co.................................... 7,000 516,421
Sumitomo Realty & Development.............. 94,000 632,648
Takeda Chemical Industries................. 24,000 502,831
TDK Corp................................... 11,000 756,350
Terumo Corp................................ 55,000 778,596
-----------
7,471,088
-----------
KOREA -- 0.4%
LG Information & Communication Ltd......... 2,500 253,133
-----------
MALAYSIA -- 2.5%
AMMB Holdings BHD.......................... 30,500 262,436
Metroplex BHD.............................. 285,000 333,602
Oriental Holdings BHD...................... 58,000 524,400
United Engineers BHD....................... 50,000 435,923
-----------
1,556,361
-----------
MEXICO -- 2.2%
Cifra SA de CV-A........................... 6,115 8,337
Cifra SA de CV-C........................... 50,000 70,320
Coca-Cola Femsa SA......................... 10,200 367,200
Fomento Economico Mexicano SA de CV........ 100,000 444,726
Gruma SA*.................................. 41,000 202,597
Tubos De Acero De Mexico-ADR*.............. 18,100 309,963
-----------
1,403,143
-----------
NETHERLANDS -- 5.6%
ASM Lithography Holdings N.V.*............. 8,900 692,101
Baan Co., N.V.*............................ 9,700 447,517
ICTS International N.V.*................... 36,800 296,700
IHC Caland N.V............................. 6,500 347,379
International-Muller N.V................... 22,000 672,356
Koninklijke Volker Stevin N.V.............. 1,500 162,409
Oce-Van Der Grinten N.V.................... 3,423 443,279
Qiagen N.V.*............................... 14,500 482,125
-----------
3,543,866
-----------
NORWAY -- 3.7%
Petroleum Geo-Services ASA-ADR*............ 14,400 619,200
Schibsted A/S.............................. 31,400 634,621
Sensonor A/S*.............................. 57,500 550,708
Tomra Systems A/S.......................... 25,800 517,549
-----------
2,322,078
-----------
PAKISTAN -- 0.4%
Fauji Fertilizer Co., Ltd.................. 7,900 15,473
Hub Power Co., Ltd.*....................... 254,000 237,016
-----------
252,489
-----------
PHILIPPINES -- 0.4%
Metropolitan Bank & Trust Co............... 10,000 259,962
-----------
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------
POLAND -- 0.3%
Elektrim Spolka Akcyjna S.A................ 23,000 $ 202,017
-----------
PORTUGAL -- 0.2%
Portugal Telecom S.A....................... 3,800 141,492
-----------
RUSSIA -- 0.7%
Oil Co. Lukoil-ADR......................... 6,450 365,135
Vimpel-Communications-SP ADR*.............. 1,500 48,000
-----------
413,135
-----------
SINGAPORE -- 4.8%
Datacraft Asia, Ltd........................ 274,000 580,880
Elec & Eltek International Co. Ltd......... 63,400 294,176
Electronic Resources Ltd................... 189,000 274,671
Lindeteves Jacoberg Ltd.................... 425,000 591,176
Singapore Technologies Aerospace Ltd....... 285,000 453,633
Super Coffeemix Manufacturing Ltd.......... 330,000 255,779
Thakral Corp. Ltd.......................... 600,000 561,000
-----------
3,011,315
-----------
SOUTH AFRICA -- 0.8%
King Food Holdings Ltd.*................... 11,200 3,976
Liberty Life Association of Africa Ltd..... 5,558 155,950
South African Breweries Ltd................ 10,300 326,296
-----------
486,222
-----------
SPAIN -- 2.2%
Acerinox SA................................ 4,200 593,078
Tele Pizza SA*............................. 18,000 783,550
-----------
1,376,628
-----------
SWEDEN -- 1.5%
Autoliv AB................................. 8,800 380,520
Lindex AB.................................. 17,000 343,270
Medical Invest Svenska AB*................. 7,000 246,426
-----------
970,216
-----------
SWITZERLAND -- 4.2%
Adecco S.A................................. 2,010 655,328
Ares Serono Group.......................... 630 829,489
Logitech International S.A................. 6,000 1,142,857
-----------
2,627,674
-----------
TAIWAN -- 0.4%
ASE Test, Ltd.*............................ 7,500 239,063
-----------
THAILAND -- 0.7%
K.R. Precision Public Co. -- Foreign....... 19,660 133,186
PTT Exploration & Production Ltd........... 20,000 297,152
Thai Farmers Bank Public Co., Ltd.......... 3,250 21,141
-----------
451,479
-----------
UNITED KINGDOM -- 16.9%
Airtours PLC............................... 36,200 587,451
Avis Europe PLC*........................... 250,000 544,906
Berkeley Group (The) PLC................... 30,700 364,873
Biocompatibles International PLC*.......... 28,000 558,478
British Aerospace PLC...................... 24,855 557,896
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
39
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997 -- CONTINUED
- --------------------------------------------------------------------------------
INTERNATIONAL SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCKS (Continued)
- ---------------------------------------------------------
UNITED KINGDOM (CONTINUED)
<TABLE>
<S> <C> <C>
Capita Group PLC........................... 59,000 $ 684,238
Caradon PLC................................ 134,100 552,589
D.F.S. Furniture Co., PLC.................. 64,000 600,622
Doncasters PLC*............................ 10,000 193,750
Dr. Solomon's Group PLC*................... 17,400 382,800
Freepages Group PLC*....................... 881,000 666,653
Games Workshop Group PLC................... 50,000 534,625
GKN PLC.................................... 215 3,539
Goldsmiths Group PLC....................... 75,000 479,312
Granada Group PLC.......................... 28,000 422,601
Iona Technologies PLC-ADR*................. 25,000 450,000
Logica PLC................................. 36,000 569,400
PizzaExpress PLC........................... 54,900 658,815
Professional Staff PLC-ADR*................ 28,000 241,500
Sema Group PLC............................. 32,000 723,800
Siebe PLC.................................. 1 17
WPP Group PLC.............................. 106,200 442,862
Zagrebacka Banka-GDR*...................... 12,400 392,150
-----------
10,612,877
-----------
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------
UNITED STATES OF AMERICA -- 1.1%
Rofin-Sinar Technologies, Inc.*............ 46,000 $ 672,750
-----------
VENEZUELA -- 0.4%
Mavesa SA-ADR.............................. 38,460 254,798
-----------
TOTAL COMMON STOCKS
(Cost $53,668,875).......................................
60,125,918
-----------
- ---------------------------------------------------------------------------
RIGHTS/WARRANTS -- 0.0%
- ---------------------------------------------------------------------------
MALAYSIA
AMMB Holdings BHD-Rights
(Cost $0)................................ 63,000 --
-----------
TOTAL INVESTMENTS -- 95.6%
(Cost $53,668,875).......................................
60,125,918
OTHER ASSETS IN EXCESS OF LIABILITIES -- 4.4%..............
2,760,626
-----------
NET ASSETS -- 100.0%.......................................
$62,886,544
-----------
</TABLE>
- ------------
* Non-Income Producing Security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
40
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF MARCH 31, 1997
- ------------------------------------------------------------------------
INTERNATIONAL SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
- -------------------------------------------- -------------
<S> <C>
Advertising................................. 0.7%
Aerospace................................... 1.9
Agriculture................................. 1.1
Alcoholic Beverages......................... 1.5
Automotive.................................. 5.3
Automotive Equipment........................ 3.0
Beverages/Soft Drinks....................... 0.6
Biotechnology............................... 2.8
Broadcasting................................ 0.5
Building Materials.......................... 2.1
Chemicals................................... 0.3
Clothing Chains............................. 0.5
Computers/Office Automation................. 3.4
Consumer Electrical......................... 1.4
Containers.................................. 0.7
Department/Discount Stores.................. 0.1
Drugs/Pharmaceuticals....................... 1.3
Electric Utilities.......................... 0.9
Electronic Instruments...................... 0.8
Finance Companies........................... 1.5
Food Chains................................. 0.4
Gas Utilities............................... 0.1
Grocery Products............................ 2.9
Home Furnishings............................ 1.5
Homebuilding................................ 0.6
Industrial Engineering/Construction......... 1.9
Integrated Oil companies.................... 0.5
Investment Companies........................ 0.4
Life Insurers............................... 0.2
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
- -------------------------------------------- -------------
<S> <C>
Machinery/Equipment......................... 3.8%
Medical Supplies............................ 3.5
Metals...................................... 2.7
Money Center Banks.......................... 2.1
Oil/Gas Production.......................... 1.1
Oilfield Services/Equipment................. 2.2
Other Commercial/Industrial Services........ 3.5
Other Consumer Services..................... 2.4
Other Financial Services.................... 1.3
Other Health Services....................... 0.3
Other Production/Manufacturing.............. 1.4
Other Technology............................ 1.1
Paper....................................... 0.4
Publishing.................................. 2.1
Real Estate Development/Investment.......... 1.5
Recreational Products....................... 2.6
Regional/Commercial Banks................... 3.9
Rental/Leasing Companies.................... 1.7
Restaurants................................. 2.3
Semiconductors/Electric Companies........... 5.5
Soaps/Cosmetics............................. 0.8
Software.................................... 5.3
Specialty Chains............................ 0.8
Telecommunication Equipment................. 1.2
Telecommunication Services.................. 0.1
Telephone................................... 2.0
Wholesale Distribution...................... 1.1
Other Assets in Excess of Liabilities....... 4.4
-----
NET ASSETS.................................. 100.0%
-----
-----
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
41
<PAGE>
INTERNATIONAL CORE GROWTH
PORTFOLIOS A, B & C
- ------------------------------------------------------------------------
MANAGEMENT TEAM
Catherine Somhegyi,
Partner, Chief Investment Officer,
Global Equity Management
Lawrence S. Speidell, CFA,
Partner, Director of Global/Systematic Portfolio
Management and Research
Loretta J. Morris,
Senior Portfolio Manager
Alex Muromcew,
Portfolio Manager
Melisa Grigolite,
Portfolio Manager
Ernesto Ramos, Ph.D,
Senior Portfolio Manager
GOAL: The Nicholas-Applegate International Core Growth Fund seeks to maximize
long-term capital appreciation by investing primarily in equity securities of
international companies.
REVIEW AND OUTLOOK: In its brief history, this new Fund has shown great
promise relative to the Morgan Stanley Capital International (MSCI) Europe,
Australasia, Far East (EAFE) Index. The Fund invests in the top 75% of market
capitalization in each country.
Stock selection, especially in Scandinavia, exposure to emerging countries,
and the Fund's underweighted position in Japan relative to the Index,
contributed positively to performance in the period.
Among the top-performing holdings in the period was Ares-Serono, a Swiss drug
company that focuses on the production of infertility drugs, growth hormones,
and new drugs to treat multiple sclerosis (MS) and AIDS. The company has a 70%
market share in infertility drugs. Strong top-line growth is expected from the
introduction of new drugs and from expanding margins due to new high-price
products and economies of scale.
Another strong performer was Volkswagen, the German auto maker. Pent-up demand
for new European automobiles contributed to Volkswagen stock's recent advance.
On March 31, more than 12% of the Fund was invested in emerging countries.
Solid gains among holdings in Latin America positively affected returns for the
Fund during the period. A political shift to democratic rule and economic
reforms has encouraged privatization and foreign investment in the region.
Structural reforms are expected to further accelerate the region's rapid growth
rate. In Brazil, for example, an economic reform plan has created a more
favorable investment environment.
We remain optimistic on the outlook for international investing. With
expectations for accelerating economic growth worldwide, we are confident the
application of our bottom-up, growth-oriented investment philosophy will reward
shareholders with solid returns.
REPRESENTATIVE HOLDINGS
Ares-Serono, Switzerland
ASE Test Limited, Taiwan
ASM Lithography, Netherlands
Volkswagen, Germany
Pininfarina, Italy
Ibiden, Japan
Portugal Telecom, Portugal
Banco Central Hispanoami, Spain
Cap Gemini, France
- --------------------------------------------------------------------------------
42
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997
- ------------------------------------------------------------------------
INTERNATIONAL CORE GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
COMMON STOCKS -- 97.6%
- ----------------------------------------------------------------------------
ARGENTINA -- 1.4%
Perez Companc S.A.......................... 2,400 $ 18,600
Siderca S.A................................ 12,200 25,925
Telefonica de Argentina S.A. -- ADR........ 700 20,563
------------
65,088
------------
BRAZIL -- 2.0%
Telecomunicacoes Brasileiras S/A -- ADR.... 900 92,138
------------
BELGIUM -- 1.0%
Banque Bruxelles Lambert SA................ 200 45,110
------------
CANADA -- 3.5%
Canadian Imperial Bank of Commerce......... 1,800 40,699
Northern Telecom Ltd....................... 700 45,762
Royal Bank of Canada....................... 1,400 54,600
Stone Consolidated Corp.*.................. 1,600 23,182
------------
164,243
------------
CHILE -- 0.4%
Laboratorio Chile -- ADR................... 1,000 21,875
------------
CHINA -- 1.2%
Shenzhen Expressway Co.*................... 180,000 56,331
------------
DENMARK -- 1.8%
Novo Nordisk A/S -- B...................... 800 83,727
------------
FINLAND -- 2.4%
Oy Nokia Corp AB -- ADR.................... 650 37,860
Raision Tehtaat OY......................... 800 73,696
------------
111,556
------------
FRANCE -- 6.6%
Cap Gemini Sogeti S.A...................... 1,400 85,130
Clarins.................................... 300 41,143
Lagardere Groupe S.A....................... 1,925 62,401
Promodes................................... 130 44,109
SGS-Thomson Microelectronics NV*........... 300 21,106
Schneider S.A.............................. 1,000 56,591
------------
310,480
------------
GERMANY -- 7.4%
BASF AG.................................... 1,750 67,041
Bayerische Motoren Werke AG................ 50 40,887
Daimler Benz AG............................ 1,150 92,800
Fresenius Medical Care AG*................. 1,150 35,075
Volkswagen AG.............................. 200 110,312
------------
346,115
------------
HONG KONG -- 4.3%
Beijing Datang Power Generation Co. Ltd.*.. 260,000 104,016
Hong Kong Telecommunications Ltd........... 11,600 19,835
HSBC Holdings Ltd.......................... 1,000 23,230
Hutchison Whampoa Ltd...................... 3,000 22,552
Qingling Motors*........................... 56,000 29,811
------------
199,444
------------
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
INDIA -- 1.5%
Videsh Sanchar Nigam Ltd.*................. 4,000 $ 70,200
------------
IRELAND -- 1.8%
Bank of Ireland............................ 1,000 9,996
Elan Corp. PLC............................. 500 17,062
Saville Systems PLC*....................... 2,000 57,500
------------
84,558
------------
ISRAEL -- 0.6%
Tecnomatix Technologies Ltd.*.............. 1,500 31,125
------------
ITALY -- 4.6%
Banca Fideuram SpA......................... 25,000 64,787
Credito Italiano SpA....................... 31,000 44,073
Pininfarina SpA............................ 5,000 67,787
Seat SpA................................... 4,000 1,392
Telecom Italia Mobile SpA.................. 13,300 38,296
------------
216,335
------------
JAPAN -- 10.5%
Familymart................................. 1,000 37,777
Ibiden Co., Ltd............................ 2,000 21,518
Kawasaki Heavy Industrial, Ltd............. 5,000 19,455
Mitsui Fudosan Co., Ltd.................... 3,000 31,063
Nichiei Co. Ltd............................ 400 31,063
Nintendo Co., Ltd.......................... 700 50,283
Orix Corp.................................. 1,000 44,087
Promise Co., Ltd........................... 1,200 50,283
Sony Corp.................................. 600 41,983
TDK Corp................................... 1,000 68,759
Terumo Corp................................ 3,000 42,469
Toyota Motor Corp.......................... 2,000 50,639
------------
489,379
------------
MALAYSIA -- 4.6%
AMMB Holdings BHD.......................... 4,400 36,585
Malayan Banking BHD........................ 2,000 22,805
Metroplex BHD.............................. 18,800 22,006
Oriental Holdings BHD...................... 4,000 36,166
Sime Darby BHD............................. 4,000 14,612
YTL Power International BHD*............... 52,400 84,601
------------
216,775
------------
MEXICO -- 3.1%
Coca-Cola Femsa S.A. -- ADR................ 800 28,800
ECE S.A.*.................................. 30,000 41,356
Empresas ICA Sociedad...................... 2,400 38,100
Tubos de Acero De Mexico -- ADR*........... 2,200 37,675
------------
145,931
------------
NETHERLANDS -- 4.9%
Aegon NV................................... 450 31,706
ASM Lithography Holding NV*................ 600 46,659
Baan Corp. NV*............................. 1,180 54,440
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
43
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997 -- CONTINUED
- --------------------------------------------------------------------------------
INTERNATIONAL CORE GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCKS (Continued)
- ---------------------------------------------------------
NETHERLANDS (CONTINUED)
<TABLE>
<S> <C> <C>
IHC Caland NV.............................. 750 $ 40,082
Oce-Van Der Grinten NV..................... 420 54,390
------------
227,277
------------
NORWAY -- 2.8%
Petroleum Geo-Services ASA -- ADR*......... 1,450 62,350
Schibsted A/S.............................. 3,300 66,696
------------
129,046
------------
PHILIPPINES -- 1.8%
Equitable Banking Corp.*................... 20,000 85,996
------------
PORTUGAL -- 0.9%
Portugal Telecom S.A....................... 1,150 42,820
------------
RUSSIA -- 0.7%
Lukoil Oil Co. -- ADR...................... 550 31,136
------------
SINGAPORE -- 1.2%
DBS Land Ltd............................... 6,000 20,512
Parkway Holdings Ltd....................... 5,000 19,031
United Overseas Bank Ltd................... 1,800 18,436
------------
57,979
------------
SOUTH AFRICA -- 1.0%
South African Breweries.................... 1,500 47,519
------------
SPAIN -- 0.9%
Banco Central Hispanoamericano S.A......... 1,500 39,815
------------
SWEDEN -- 1.9%
NetCom Systems AB*......................... 3,000 44,237
Telefonaktiebolaget LM Ericsson -- B....... 1,200 42,404
------------
86,641
------------
SWITZERLAND -- 5.1%
Adecco SA Cheserex......................... 110 35,864
Ares-Seron Group........................... 60 78,999
Novartis AG................................ 20 24,831
Roche Holding AG........................... 10 86,514
Swiss Reinsurance Corp..................... 10 10,636
------------
236,844
------------
TAIWAN -- 0.5%
ASE Test Ltd.*............................. 700 22,312
------------
UNITED KINGDOM -- 14.9%
Airtours PLC............................... 4,400 71,403
Avis Europe PLC*........................... 35,000 76,287
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
</TABLE>
UNITED KINGDOM (CONTINUED)
<TABLE>
<S> <C> <C>
Bank of Ireland............................ 2,000 $ 19,987
Berkeley Group PLC......................... 6,000 71,311
British Aerospace PLC...................... 3,100 69,583
British Airways PLC........................ 4,900 52,836
Caradon PLC................................ 11,900 49,037
Compass Group PLC.......................... 4,000 43,263
Ladbroke Group PLC......................... 21,700 80,317
Pearson PLC................................ 2,000 23,984
Sema Group PLC............................. 3,000 67,856
WPP Group PLC.............................. 16,500 68,806
------------
694,670
------------
UNITED STATES OF AMERICA -- 2.3%
ITC Limited................................ 3,400 44,625
TDK Corp................................... 900 60,525
------------
105,150
------------
TOTAL COMMON STOCKS
(Cost $4,498,875)........................................ 4,557,615
------------
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
- ----------------------------------------------------------------------------
CONVERTIBLE BONDS -- 1.7%
- ----------------------------------------------------------------------------
UTILITIES (ELECTRIC)
First Pacific Capital 144A
2.00%, 03/27/02
(Cost $78,000)........................... $ 78,000 77,805
------------
- ----------------------------------------------------------------------------
COMMERCIAL PAPER -- 6.9%
- ----------------------------------------------------------------------------
Associates Corp. -- 2.8%
6.75%, 04/01/97.......................... 130,000 130,000
Merrill Lynch -- 4.1%
6.35%, 04/01/97.......................... 194,000 194,000
------------
TOTAL COMMERCIAL PAPER
(Cost $324,000).......................................... 324,000
------------
TOTAL INVESTMENTS -- 106.2%
(Cost $4,900,875)........................................ 4,959,420
LIABILITIES IN EXCESS OF OTHER ASSETS -- (6.2%)............ (290,544)
------------
NET ASSETS -- 100.0%....................................... $ 4,668,876
------------
</TABLE>
- ------------
* Non-Income Producing Security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
44
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF MARCH 31, 1997
- ------------------------------------------------------------------------
INTERNATIONAL CORE GROWTH FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
- -------------------------------------------- -------------
<S> <C>
Advertising................................. 1.5%
Aerospace................................... 1.5
Airlines.................................... 1.1
Alcoholic Beverages......................... 1.0
Automotive.................................. 9.3
Beverages/Soft Drinks....................... 0.6
Biotechnology............................... 3.6
Building Materials.......................... 0.8
Chemicals................................... 1.4
Computers/Office Automation................. 1.2
Consumer Electrical......................... 0.9
Drugs/Pharmaceuticals....................... 3.3
Electric Utilities.......................... 2.2
Finance Companies........................... 2.0
Food Chains................................. 1.5
Grocery Products............................ 1.6
Homebuilding................................ 1.5
Industrial Engineering/Construction......... 0.8
Integrated Oil Companies.................... 0.4
Leisure/Gaming.............................. 1.7
Machinery/Equipment......................... 2.7
Medical Supplies............................ 0.9
Metals...................................... 0.6
Money Center Banks.......................... 3.5
Multi-Line Insurers......................... 0.9
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
- -------------------------------------------- -------------
<S> <C>
Oil/Gas Production.......................... 0.7%
Oilfield Services/Equipment................. 2.2
Other Commercial/Industrial Services........ 5.6
Other Consumer Services..................... 1.5
Other Financial Services.................... 2.2
Other Health Services....................... 0.8
Other Production/Manufacturing.............. 0.9
Paper....................................... 0.5
Publishing.................................. 3.3
Real Estate Development/Investment.......... 1.6
Recreational Products....................... 1.1
Regional/Commercial Banks................... 5.2
Rental/Leasing Companies.................... 2.6
Restaurants................................. 0.9
Semiconductors/Electric Companies........... 3.8
Soaps/Cosmetics............................. 0.9
Software.................................... 6.3
Telecommunication Equipment................. 2.7
Telecommunication Services.................. 1.6
Telephone................................... 5.5
Tobacco Products............................ 1.1
Water Supply................................ 1.8
Short Term Obligations...................... 6.9
Liabilities in Excess of Other Assets....... (6.2)
-----
NET ASSETS.................................. 100.0%
-----
-----
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
45
<PAGE>
WORLDWIDE GROWTH FUND
PORTFOLIOS A, B & C
- ------------------------------------------------------------------------
MANAGEMENT TEAM
Catherine Somhegyi,
Partner, Chief Investment Officer,
Global Equity Management
Lawrence S. Speidell, CFA,
Partner, Director of Global/Systematic
Portfolio Management
John J. Kane,
Partner, Senior Portfolio Manager
Loretta J. Morris,
Senior Portfolio Manager
Alex Muromcew,
Portfolio Manager
Melisa Grigolite,
Portfolio Manager
Ernesto Ramos, Ph.D,
Senior Portfolio Manager
GOAL: The Nicholas-Applegate Worldwide Growth Fund seeks to maximize long-term
capital appreciation through investment in a portfolio of growth stocks of U.S.
and international companies.
REVIEW AND OUTLOOK: The Worldwide Growth Fund delivered solid performance on
the strength of superior stock selections this year, outperforming its
respective benchmark, the MSCI World Index.
With approximately 25% of holdings in the United States, the Fund benefited
from such holdings as Merck & Co. The pharmaceuticals company continues to add
breakthrough drugs, such as Aggrastat, which treats coronary syndromes, and
Propecia, which treats male baldness, leading it to hold one of the strongest
product lines in the industry.
Superior stock selection, including our underweighting of Japanese stocks, and
investment in stocks of emerging markets countries, contributed to the Fund's
performance relative to the MSCI World Index for the period.
Throughout the world, we found excellent opportunities in the stocks of
manufacturers and exporters, which benefited from increased sales as a result of
a stronger U.S. dollar. A stronger dollar makes foreign-produced goods more
affordable to U.S. consumers.
In Europe, the Fund benefited from pent up demand for new cars, which
translated into rising shares for such holdings as Porsche. The company's
cost-cutting program has resulted in a ten-fold increase in profits. The new
Boxster model is expected to contribute to a doubling of the firm's orders.
The Fund has extensive holdings in the technology sector, which is fueling
productivity and efficiency gains abroad.
Cap Gemini, a French computer services firm, continues to show solid prospects
for growth based on their potential to provide advisory services in a changing
marketplace.
Improving economic conditions and political stability make us optimistic about
the prospects of investing in stocks worldwide.
REPRESENTATIVE HOLDINGS
Volkswagen, Germany
ASE Test, Taiwan
Intel, United States
Merck & Co., United States
Ares-Serono, Switzerland
Novo-Nordisk, Denmark
TDK, Japan
Petroleum Geo-Services, Norway
Travelers Group, United States
Telecomunicacoes Brasileires, Brazil.
- --------------------------------------------------------------------------------
46
<PAGE>
WORLDWIDE GROWTH PORTFOLIOS
- ------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ANNUALIZED TOTAL RETURNS AS OF 03/31/97
<S> <C> <C>
1 Year 3 Years Since Inception
6.61% 8.17% 11.05%
Worldwide Growth MSCI World
Date Portfolio A Index
19-Apr-93 9,475.00 10,000.00
30-Apr-93 9,588.70 10,142.07
31-May-93 10,005.60 10,373.31
30-Jun-93 9,975.28 10,283.06
31-Jul-93 10,073.82 10,492.83
31-Aug-93 10,748.44 10,971.31
30-Sep-93 10,756.02 10,765.74
31-Oct-93 10,786.34 11,059.64
30-Nov-93 10,142.04 10,432.56
31-Dec-93 10,809.08 10,940.63
31-Jan-94 11,612.56 11,659.43
28-Feb-94 11,582.24 11,506.69
31-Mar-94 11,324.52 11,007.30
30-Apr-94 11,559.50 11,345.22
31-May-94 11,316.94 11,372.45
30-Jun-94 11,127.44 11,338.33
31-Jul-94 11,407.90 11,551.49
31-Aug-94 11,877.86 11,896.88
30-Sep-94 11,680.78 11,581.61
31-Oct-94 11,749.00 11,909.37
30-Nov-94 11,172.92 11,390.13
31-Dec-94 11,073.73 11,498.33
31-Jan-95 10,641.77 11,322.41
28-Feb-95 10,924.51 11,484.77
31-Mar-95 11,222.95 12,017.66
30-Apr-95 11,654.90 12,433.48
31-May-95 11,654.90 12,536.67
30-Jun-95 11,866.95 12,530.40
31-Jul-95 12,707.30 13,136.88
31-Aug-95 12,660.18 12,841.30
30-Sep-95 12,966.47 13,212.41
31-Oct-95 12,534.52 13,001.01
30-Nov-95 12,636.61 13,449.55
31-Dec-95 12,705.93 13,839.58
31-Jan-96 12,851.98 14,087.31
29-Feb-96 13,103.50 14,170.43
31-Mar-96 13,444.27 14,402.82
30-Apr-96 14,304.31 14,738.41
31-May-96 14,458.47 14,748.72
30-Jun-96 14,369.22 14,820.99
31-Jul-96 13,590.32 14,294.85
31-Aug-96 13,898.63 14,456.38
30-Sep-96 14,369.22 15,018.73
31-Oct-96 14,369.22 15,120.86
30-Nov-96 15,036.92 15,964.60
31-Dec-96 14,983.16 15,705.98
31-Jan-97 15,493.95 15,892.88
28-Feb-97 15,323.68 16,072.47
31-Mar-97 15,126.54 15,751.02
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WORLDWIDE GROWTH MSCI WORLD
<S> <C> <C>
Portfolio B Index
05-31-95 10,000 10,000
06-30-95 10,168 9,995
09-30-95 11,104 10,539
12-31-95 10,848 11,039
03-31-96 11,472 11,489
06-30-96 12,240 11,822
09-30-96 12,216 11,980
12-31-96 12,728 12,528
03-31-97 12,416 12,564
Annualized Total Returns As of 03/31/97
1 Year Since Inception
6.72% 12.51%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ANNUALIZED TOTAL RETURNS AS OF 03/31/97
<S> <C> <C>
1 Year 3 Years Since Inception
11.81% 9.42% 11.88%
MSCI World Worldwide Growth
Index Portfolio C
04-19-93 10,000 10,000
04-30-93 10,142 10,120
05-31-93 10,373 10,552
06-30-93 10,283 10,520
07-31-93 10,493 10,608
08-31-93 10,971 11,320
09-30-93 10,766 11,320
10-31-93 11,060 11,344
11-30-93 10,433 10,664
12-31-93 10,941 11,352
01-31-94 11,659 12,200
02-28-94 11,507 12,160
03-31-94 11,007 11,888
04-30-94 11,345 12,128
05-31-94 11,372 11,864
06-30-94 11,338 11,656
07-31-94 11,551 11,952
08-31-94 11,897 12,432
09-30-94 11,582 12,224
10-31-94 11,909 12,288
11-30-94 11,390 11,680
12-31-94 11,498 11,565
01-31-95 11,322 11,103
02-28-95 11,485 11,395
03-31-95 12,018 11,711
04-30-95 12,433 12,149
05-31-95 12,537 12,141
06-30-95 12,530 12,352
07-31-95 13,137 13,219
08-31-95 12,841 13,171
09-30-95 13,212 13,479
10-31-95 13,001 13,017
11-30-95 13,450 13,122
12-31-95 13,840 13,182
01-31-96 14,087 13,331
02-29-96 14,170 13,589
03-31-96 14,403 13,930
04-30-96 14,738 14,811
05-31-96 14,749 14,961
06-30-96 14,821 14,869
07-31-96 14,295 14,046
08-31-96 14,456 14,362
09-30-96 15,019 14,844
10-31-96 15,121 14,836
11-30-96 15,965 15,520
12-31-96 15,706 15,456
01-31-97 15,893 15,971
02-28-97 16,072 15,787
03-31-97 15,751 15,576
</TABLE>
The graphs compare a $10,000 investment in the Worldwide Growth Portfolio A
(front load), the Worldwide Growth Portfolio B (back-end load) and the Worldwide
Growth Portfolio C (level load) with a similar investment in the Morgan Stanley
Capital International ("MSCI") World Index, on a cumulative and average annual
total return basis. Performance returns within are calculated on a total return
basis and reflect all fees and expenses of the Portfolio with reinvestment of
dividends and capital gains, if any. Performance figures include the maximum
applicable sales charge of 5.25% for Portfolio A shares. The effect of the
maximum contingent deferred sales charge for Portfolio B shares (maximum 5.00%
declining to 0% over six years) is included in Portfolio B performance.
Performance is affected by a 12b-1 Plan which commenced at inception of each
Portfolio.
Total returns reflect the fact that fees and expenses in excess of certain
expense limitations specified in the investment management agreement have been
deferred by the Adviser. Total return results would have been lower had there
been no deferral.
The 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. The Index
is a market-value weighted combination of countries and is unmanaged. Index
returns reflect the reinvestment of income dividends and capital gains
distributions, if any, but do not reflect fees, brokerage commissions, or other
expenses of investing.
Past performance is no indication of future performance. Investment returns and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
- --------------------------------------------------------------------------------
47
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997
- ------------------------------------------------------------------------
WORLDWIDE GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
COMMON STOCKS -- 98.9%
- ----------------------------------------------------------------------------
ARGENTINA -- 1.2%
Banco Frances del Rio de la Plata SA --
ADR...................................... 9,800 $ 294,000
Perez Companc SA........................... 42,715 331,041
Siderar SA................................. 7,728 26,662
Siderca SA................................. 193,200 410,550
Telefonica de Argentina SA -- ADR.......... 8,000 235,000
------------
1,297,253
------------
AUSTRALIA -- 0.0%
Australian Gas & Light Co., Ltd............ 3,170 18,016
------------
BRAZIL -- 1.4%
Centrais Electricas Brasileiras SA -- ADR.. 25,000 536,400
Lojas Arapua S.A........................... 4,383,000 101,054
Telecomunicacoes Brasileiras S/A-Telebras
-- ADR................................... 4,800 491,400
TV Filme, Inc. ADR*........................ 27,100 335,362
------------
1,464,216
------------
CANADA -- 2.7%
Canadian Imperial Bank of Commerce......... 44,000 994,871
Northern Telecom Ltd....................... 10,000 653,750
Royal Bank of Canada....................... 28,600 1,115,400
------------
2,764,021
------------
CHILE -- 0.6%
Quimica Minera Chile SA -- ADR............. 5,600 322,700
Vina Concha Y Toro -- ADR.................. 10,400 296,400
------------
619,100
------------
CZECH REPUBLIC -- 0.5%
SPT Telecom AS*............................ 4,000 474,227
------------
DENMARK -- 0.6%
Novo Nordisk A/S -- B...................... 5,740 600,740
------------
EGYPT -- 0.5%
Commercial International Bank*............. 21,355 482,623
------------
FINLAND -- 2.6%
Metsa-Serla Oy -- B........................ 60,600 436,888
Oy Nokia Corp. AB -- ADR................... 16,200 943,650
Raision Tehtaat Oy......................... 14,300 1,317,312
------------
2,697,850
------------
FRANCE -- 4.7%
AXA-UAP.................................... 8,000 530,484
Bouygues Offshore SA....................... 24,000 639,060
Cap Gemini Sogeti SA....................... 18,000 1,094,523
Lagardere Groupe SA (Non Trading).......... 377 12,221
Lagardere Groupe SA........................ 36,200 1,173,462
Promodes SA................................ 2,000 677,883
SGS-Thomson Microelectronics N.V.*......... 10,000 703,535
------------
4,831,168
------------
GERMANY -- 6.1%
BASF AG.................................... 40,000 1,532,374
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
</TABLE>
GERMANY (CONTINUED)
<TABLE>
<S> <C> <C>
Bayerische Motoren Werke AG................ 1,000 $ 817,746
Daimler Benz AG............................ 20,000 1,613,909
Fresenius AG............................... 2,935 644,010
Volkswagen AG.............................. 3,200 1,764,988
------------
6,373,027
------------
HONG KONG -- 2.4%
Guangdong Investments Ltd.................. 600,000 514,918
HSBC Holdings Ltd.*........................ 22,400 520,339
Hutchison Whampoa Ltd...................... 74,000 556,280
Qingling Motors Company*................... 695,000 369,977
Sun Hung Kai Properties Ltd................ 49,000 518,532
------------
2,480,046
------------
INDIA -- 1.2%
Bombay Suburban Electric Supply Co. Ltd.... 60,000 332,776
HDFC Bank Ltd.*............................ 250,000 323,997
State Bank of India*....................... 24,400 559,980
------------
1,216,753
------------
INDONESIA -- 0.4%
PT Bank Negara Indonesia*.................. 650,000 372,260
------------
IRELAND -- 1.5%
Elan Corp. PLC -- ADR*..................... 22,000 750,750
Saville Systems PLC*....................... 27,400 787,750
------------
1,538,500
------------
ISRAEL -- 0.8%
Gilat Satellite Networks*.................. 12,400 375,100
Koor Industries Ltd........................ 12,500 225,000
Tecnomatix Technologies Ltd.*.............. 12,000 249,000
------------
849,100
------------
ITALY -- 2.9%
Banca Fideuram SpA......................... 360,000 932,933
Credito Italiano SpA....................... 803,000 1,141,638
Telecom Italia Mobile SpA.................. 322,300 928,038
------------
3,002,609
------------
JAPAN -- 11.9%
Advantest Corp............................. 16,390 827,322
Bank of Tokyo-Mitsubishi................... 2,000 31,225
Bridgestone Corp........................... 40,000 750,688
Canon, Inc................................. 30,000 643,100
Fujitsu, Ltd............................... 58,000 591,166
Hirose Electric............................ 11,000 604,190
Honda Motor Co., Ltd....................... 20,000 596,991
Ibiden Co., Ltd............................ 50,000 537,939
Mitsui Fudosan Co., Ltd.................... 47,000 486,653
Nichiei Co., Ltd........................... 10,000 776,573
Nintendo Co., Ltd.......................... 10,800 775,797
Orix Corp.................................. 16,000 705,387
Promise Co., Ltd........................... 22,000 921,857
Sony Corp.................................. 16,000 1,119,560
TDK Corp................................... 19,000 1,306,423
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
48
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCKS (Continued)
- ---------------------------------------------------------
JAPAN (CONTINUED)
<TABLE>
<S> <C> <C>
Terumo Corp................................ 80,000 $ 1,132,503
Toyota Motor Corp.......................... 20,000 506,390
------------
12,313,764
------------
MALAYSIA -- 2.2%
AMMB Holdings BHD.......................... 42,500 366,584
Malayan Banking BHD........................ 33,000 376,287
Metroplex BHD.............................. 500,000 585,267
Sime Darby BHD............................. 57,000 208,214
UMW Holdings BHD........................... 61,000 337,316
United Engineers BHD....................... 50,000 435,923
------------
2,309,591
------------
MEXICO -- 2.0%
Cifra SA de CV -- Series A................. 14,676 20,008
Cifra SA de CV -- Series C................. 120,000 168,768
Coca-Cola Femsa S.A. -- ADR................ 17,200 619,200
Fomento Economico Mexicano SA de CV........ 140,000 622,616
Gruma SA -- B*............................. 69,000 340,957
Tubos de Acero De Mexico -- ADR*........... 22,000 376,750
------------
2,148,299
------------
NETHERLANDS -- 2.8%
Baan Co., N.V.*............................ 19,300 861,263
IHC Caland NV.............................. 12,900 689,413
Koninklijke Volker Stevin NV-CVA........... 5,400 584,671
Oce-Van Der Grinten NV..................... 5,955 771,174
------------
2,906,521
------------
NORWAY -- 2.7%
Petroleum Goe-Services ASA -- ADR*......... 26,300 1,130,900
Schibsted A/S.............................. 37,000 747,802
Tomra Systems A/S.......................... 44,500 892,671
------------
2,771,373
------------
PAKISTAN -- 0.2%
Fauji Fertilizer Co. Ltd................... 7,900 15,473
Hub Power Co.*............................. 254,000 237,016
------------
252,489
------------
PHILLIPPINES -- 0.4%
Metropolitan Bank & Trust Co............... 15,000 389,943
------------
POLAND -- 0.2%
Elektrim Spolka Akcyjna SA................. 26,800 235,393
------------
PORTUGAL -- 0.3%
Portugal Telecom SA........................ 9,600 357,453
------------
RUSSIA -- 0.5%
Lukoil Oil Co. -- ADR...................... 8,400 475,524
Vimpel-Communications -- ADR*.............. 2,700 86,400
------------
561,924
------------
SINGAPORE -- 1.6%
Lindeteves-Jacoberg Ltd.................... 500,000 695,502
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
</TABLE>
SINGAPORE (CONTINUED)
<TABLE>
<S> <C> <C>
Parkway Holdings Ltd....................... 124,000 $ 471,972
United Overseas Bank Ltd................... 46,495 476,212
------------
1,643,686
------------
SOUTH AFRICA -- 0.8%
Liberty Life Association of Africa Ltd..... 18,192 510,445
South African Breweries Ltd................ 10,300 326,296
------------
836,741
------------
SPAIN -- 0.8%
Banco Central Hispanoamericano SA.......... 30,000 796,291
------------
SWEDEN -- 0.9%
Telefonaktiebolaget LM Ericsson -- B....... 27,000 954,089
------------
SWITZERLAND -- 4.6%
Adecco SA.................................. 3,500 1,141,119
Ares-Serono Group.......................... 1,380 1,816,976
Novartis AG................................ 525 651,825
Roche Holding AG........................... 80 692,110
Swiss Reinsurance Co....................... 450 478,623
------------
4,780,653
------------
TAIWAN -- 1.2%
ASE Test Ltd.*............................. 36,900 1,176,188
Tuntex Distinct Corp....................... 5,725 42,823
------------
1,219,011
------------
THAILAND -- 0.5%
PTT Exploration and Production Public Co.
Ltd...................................... 35,000 520,015
Thai Farmers Bank Public Co. Ltd. --
Foreign*................................. 5,375 34,964
------------
554,979
------------
UNITED KINGDOM -- 9.4%
Airtours PLC............................... 65,000 1,054,815
Avis Europe PLC*........................... 315,000 686,582
Bank of Ireland............................ 65,000 649,569
British Aerospace PLC...................... 48,287 1,083,851
British Airways PLC........................ 74,526 803,612
Caradon PLC................................ 163,000 671,678
Compass Group PLC.......................... 71,000 767,927
GKN PLC.................................... 1,807 29,740
Granada Group PLC.......................... 23,700 357,701
Ladbroke Group PLC......................... 158,000 584,798
Pearson PLC................................ 55,000 659,563
Professional Staff PLC -- ADR*............. 47,000 405,375
WPP Group PLC.............................. 325,000 1,355,274
Zagrebacka Banka -- GDR*................... 21,250 672,031
------------
9,782,516
------------
UNITED STATES OF AMERICA -- 25.4%
Ascend Communications, Inc.*............... 1,800 73,350
BMC Industries, Inc........................ 8,000 226,000
BMC Software, Inc.*........................ 12,400 571,950
Boston Chicken, Inc.*...................... 5,400 164,700
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
49
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997 -- CONTINUED
- --------------------------------------------------------------------------------
WORLDWIDE GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCKS (Continued)
- ---------------------------------------------------------
UNITED STATES OF AMERICA (CONTINUED)
<TABLE>
<S> <C> <C>
Cadence Design Systems, Inc.*.............. 9,250 $ 317,969
Callaway Golf Co........................... 11,500 329,187
Camco International, Inc................... 9,600 422,400
Central Garden and Pet Co.*................ 8,900 161,312
Chase Manhattan Corp....................... 2,500 234,063
Children's Comprehensive Services, Inc.*... 8,800 101,200
Chrysler Corp.............................. 27,300 819,000
Cisco Systems, Inc.*....................... 6,000 288,750
Comerica, Inc.............................. 8,400 473,550
Compuware Inc.*............................ 4,300 269,825
Dell Computer Corp.*....................... 11,200 757,400
Electronics For Imaging, Inc.*............. 10,200 406,725
Encad, Inc.*............................... 7,400 221,075
Executive Risk, Inc........................ 8,300 384,913
Fannie Mae................................. 23,600 852,550
Finish Line, Inc., The*.................... 16,200 360,450
Gateway 2000, Inc.*........................ 10,500 538,125
General Electric Co........................ 1,100 109,175
Guidant Corp............................... 3,700 227,550
HBO & Co................................... 5,300 251,750
HFS, Inc.*................................. 6,500 382,688
Intel Corp................................. 9,400 1,307,775
International Specialty Products, Inc.*.... 15,500 193,750
Interstate Bakeries Corp................... 12,500 590,625
Jones Medical Industries, Inc.............. 13,625 327,000
Liz Claiborne, Inc......................... 7,500 327,188
Loews Corp................................. 9,100 808,763
MBNA Corp.................................. 25,300 705,238
McAfee Associates, Inc.*................... 6,000 265,500
Medicis Pharmaceutical Corp.*.............. 7,800 232,050
Merck & Co., Inc........................... 14,200 1,196,350
Microsoft Corp.*........................... 1,700 155,869
Molecular Devices Corp.*................... 43,000 596,625
Nautica Enterprises, Inc.*................. 7,900 198,487
NBTY, Inc.*................................ 18,900 285,862
New York Bancorp, Inc...................... 1,350 39,150
Oxford Health Plans, Inc.*................. 1,500 87,937
Pacific Sunwear of California*............. 13,650 447,037
Pairgain Technology, Inc.*................. 11,600 343,650
Peoplesoft, Inc.*.......................... 3,800 152,000
Premark International, Inc................. 10,800 214,650
Providian Corp............................. 15,600 834,600
QLogic Corp.*.............................. 26,000 513,500
Riser Foods, Inc........................... 7,600 251,750
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
</TABLE>
UNITED STATES OF AMERICA (CONTINUED)
<TABLE>
<S> <C> <C>
Robert Half International, Inc.*........... 9,400 $ 327,825
Ross Stores Inc............................ 27,200 690,200
Safeskin Corp.*............................ 10,200 184,875
Safeway, Inc.*............................. 18,100 839,387
Showbiz Pizza Time, Inc.*.................. 11,900 208,250
SPX Corp.*................................. 8,200 372,075
Student Loan Marketing Association......... 3,800 361,950
TCF Financial Corp......................... 1,000 39,625
Tellabs, Inc.*............................. 14,500 523,812
Travelers Group, Inc....................... 18,800 900,050
United Technologies Corp................... 12,200 918,050
Unocal Corp................................ 7,200 274,500
USX-Marathon Group......................... 30,900 861,337
Veritas DGC, Inc.*......................... 30,000 592,500
Zions Bancorporation....................... 2,100 249,375
------------
26,364,824
------------
VENEZUELA -- 0.4%
Mavesa SA -- ADR........................... 61,540 407,703
------------
TOTAL COMMON STOCKS
(Cost $89,964,628).......................................
102,668,752
------------
- ----------------------------------------------------------------------------
WARRANTS/RIGHTS -- 0.0%
- ----------------------------------------------------------------------------
SINGAPORE
United Overseas Bank Ltd. -- Warrants*
(Cost $1,333)............................ 208 885
------------
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
- ----------------------------------------------------------------------------
CONVERTIBLE BONDS -- 1.8%
- ----------------------------------------------------------------------------
UTILITIES (ELECTRIC)
First Pacific Capital 144A
2.00%, 3/27/02
(Cost $1,891,000)........................ $1,891,000 $ 1,886,273
------------
TOTAL INVESTMENTS -- 100.7%
(Cost $91,856,961).......................................
$104,555,910
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.7%)............ (740,534)
------------
NET ASSETS -- 100.0%....................................... $103,815,376
------------
</TABLE>
- ------------
* Non-Income Producing Security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
50
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF MARCH 31, 1997
- ------------------------------------------------------------------------
WORLDWIDE GROWTH FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
- -------------------------------------------- -------------
<S> <C>
Advertising................................. 1.3%
Aerospace................................... 1.9
Agriculture................................. 0.3
Airlines.................................... 0.8
Alcoholic Beverages......................... 1.2
Apparel..................................... 0.5
Automotive.................................. 6.3
Automotive Equipment........................ 1.1
Beverages/Soft Drinks....................... 0.6
Biotechnology............................... 2.3
Broadcasting................................ 0.3
Building Materials.......................... 1.0
Chemicals................................... 1.5
Clothing Chains............................. 1.1
Computers/Office Automation................. 4.2
Consumer Electrical......................... 1.1
Department/Discount Stores.................. 0.2
Drugs/Pharmaceuticals....................... 4.0
Electric Utilities.......................... 1.1
Electronic Instruments...................... 0.6
Finance Companies........................... 3.5
Food Chains................................. 1.7
Grocery Products............................ 2.2
Industrial Engineering/Construction......... 1.0
Investment Companies........................ 0.5
Leisure/Gaming.............................. 0.6
Life Insurers............................... 0.5
Lodging..................................... 0.4
Machinery/Equipment......................... 2.6
Managed Health care/HMO's................... 0.1
Medical Supplies............................ 2.7
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
- -------------------------------------------- -------------
<S> <C>
Metals...................................... 0.4%
Money Center Banks.......................... 3.7
Multi-Line Insurers......................... 3.1
Oil/Gas Production.......................... 2.1
Oilfield Services/Equipment................. 3.3
Other Commercial/Industrial Services........ 4.2
Other Consumer Services..................... 1.1
Other Financial Services.................... 1.3
Other Health Services....................... 0.2
Other Health Services....................... 0.2
Other Production/Manufacturing.............. 1.8
Paper....................................... 0.4
Property -- Casualty Insurance.............. 1.1
Publishing.................................. 2.5
Real Estate Development/Investment.......... 1.5
Recreational Products....................... 1.4
Regional/Commercial Banks................... 6.2
Rental/Leasing Companies.................... 1.3
Restaurants................................. 0.4
Savings & Loan/Thrifts...................... 0.1
Semiconductors/Electric Companies........... 3.7
Software.................................... 5.0
Specialty Chains............................ 0.3
Telecommunication Equipment................. 3.7
Telecommunication Services.................. 0.1
Telephone................................... 2.4
Utilities................................... 1.8
Wholesale Distribution...................... 0.2
Liabilities in Excess of Other Assets....... (0.7)
-----
NET ASSETS.................................. 100.0%
-----
-----
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
51
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------
SERIES A PORTFOLIOS+
<TABLE>
<CAPTION>
NET ASSET NET NET REALIZED DISTRIBUTIONS
VALUES AT INVESTMENT AND UNREALIZED FROM NET DISTRIBUTIONS
BEGINNING INCOME GAINS (LOSSES) INVESTMENT FROM
OF PERIOD (DEFICIT) ON INVESTMENTS INCOME CAPITAL GAINS
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
EMERGING GROWTH
Portfolio A (For the year
ended 03/31/97)........... $ 17.93 $ (0.22) $ (0.66) -- $ (1.90)
Portfolio A (For the year
ended 03/31/96)........... 13.06 (0.20) 5.09 -- (0.02)
Portfolio A (For the year
ended 03/31/95)........... 12.10 (0.16) 1.12 -- --
Portfolio A (For the period
ended 03/31/94)........... 12.50 (0.04) (0.36) -- --
CORE GROWTH
Portfolio A (For the year
ended 03/31/97)........... 18.37 (0.17) 0.57 -- (1.97)
Portfolio A (For the year
ended 03/31/96)........... 13.61 (0.18) 4.94 -- --
Portfolio A (For the year
ended 03/31/95)........... 13.25 (0.10) 0.46 -- --
Portfolio A (For the period
ended 03/31/94)........... 12.50 (0.07) 0.86 -- (0.04)
INCOME & GROWTH
Portfolio A (For the year
ended 03/31/97)........... 15.68 0.47 1.64 $ (0.48) (0.72)
Portfolio A (For the year
ended 03/31/96)........... 12.86 0.48 2.82 (0.48) --
Portfolio A (For the year
ended 03/31/95)........... 14.16 0.49 (0.89) (0.49) (0.41)
Portfolio A (For the period
ended 03/31/94)........... 12.50 0.32 2.15 (0.32) (0.49)
BALANCED GROWTH
Portfolio A (For the year
ended 03/31/97)........... 16.16 0.32 0.84 (0.32) (1.46)
Portfolio A (For the year
ended 03/31/96)........... 13.74 0.34 2.42 (0.34) --
Portfolio A (For the year
ended 03/31/95)........... 13.52 0.21 0.22 (0.21) --
Portfolio A (For the period
ended 03/31/94)........... 12.50 0.15 1.02 (0.15) --
GOVERNMENT INCOME
Portfolio A (For the year
ended 03/31/97)........... 12.74 0.71 (0.37) (0.71) (0.21)
Portfolio A (For the year
ended 03/31/96)........... 12.29 0.75 0.45 (0.75) --
Portfolio A (For the year
ended 03/31/95)........... 12.51 0.63 (0.19) (0.63) (0.03)
Portfolio A (For the period
ended 03/31/94)........... 12.50 0.29 0.34 (0.29) (0.33)
MONEY MARKET
Portfolio A (For the year
ended 03/31/97)........... 1.00 0.05 -- (0.05) --
Portfolio A (For the year
ended 03/31/96)........... 1.00 0.05 -- (0.05) --
Portfolio A (For the year
ended 03/31/95)........... 1.00 0.05 -- (0.05) --
Portfolio A (For the period
ended 03/31/94)........... 1.00 0.01 -- (0.01) --
EMERGING COUNTRIES
Portfolio A (For the year
ended 03/31/97)........... 14.03 (0.06) 3.51 -- (0.28)
Portfolio A (For the year
ended 03/31/96)........... 11.00 (0.04) 3.15 (0.02) (0.06)
Portfolio A (For the period
ended 03/31/95)........... 12.50 0.04 (1.54) -- --
INTERNATIONAL SMALL CAP GROWTH
Portfolio A (For the year
ended 03/31/97)........... 13.15 0.04 1.88 (0.01) (0.14)
Portfolio A (For the year
ended 03/31/96)........... 11.51 (0.02) 1.79 (0.13) --
Portfolio A (For the period
ended 03/31/95)........... 12.50 -- (0.98) (0.01) --
INTERNATIONAL CORE GROWTH
Portfolio A (For the period
ended 03/31/97)........... 12.50 -- 0.23 -- --
WORLDWIDE GROWTH
Portfolio A (For the year
ended 03/31/97)........... 16.57 (0.16) 2.20 -- (1.73)
Portfolio A (For the year
ended 03/31/96)........... 14.29 (0.07) 2.86 (0.12) (0.39)
Portfolio A (For the year
ended 03/31/95)........... 14.94 (0.05) (0.09) (0.02) (0.49)
Portfolio A (For the period
ended 03/31/94)........... 12.50 (0.07) 2.51 -- --
</TABLE>
- --------------------
+ All Series A Portfolios commenced operations on April 19, 1993, except
Emerging Growth Portfolio A, Emerging Countries Portfolio A, International Small
Cap Growth Portfolio A and International Core Growth Portfolio A which commenced
operations on December 27, 1993, November 28, 1994, August 31, 1994, and
February 28, 1997, respectively.
++ The Portfolio's maximum sales charge is not included in the total return
computation.
* Annualized.
** Includes expenses allocated from the Master Trust Funds. See Notes to Funds'
Financial Statements for amounts.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
52
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
RATIO OF EXPENSES TO INCOME (DEFICIT)
EXPENSES TO AVERAGE NET TO
AVERAGE NET ASSETS, BEFORE AVERAGE NET
ASSETS, AFTER EXPENSE ASSETS, AFTER
EXPENSE REIMBURSEMENT EXPENSE
NET ASSET REIMBURSEMENT (RECOUPMENT) REIMBURSEMENT
VALUES AT TOTAL NET ASSETS AT (RECOUPMENT) AND FEE (RECOUPMENT)
END OF PERIOD RETURN++ END OF PERIOD AND FEE WAIVER** WAIVER** AND FEE WAIVER**
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
EMERGING GROWTH
Portfolio A (For the year
ended 03/31/97)........... $ 15.15 (6.26%) $ 121,741,647 1.72% 1.72% (1.26%)
Portfolio A (For the year
ended 03/31/96)........... 17.93 37.48% 138,155,390 1.74% 1.74% (1.20%)
Portfolio A (For the year
ended 03/31/95)........... 13.06 7.93% 106,725,077 1.86% 1.84% (1.27%)
Portfolio A (For the period
ended 03/31/94)........... 12.10 (3.20%) 104,838,285 1.73%* 1.80%* (1.44%)*
CORE GROWTH
Portfolio A (For the year
ended 03/31/97)........... 16.80 1.09% 76,107,976 1.60% 1.56% (1.05%)
Portfolio A (For the year
ended 03/31/96)........... 18.37 35.07% 77,275,060 1.58% 1.56% (0.91%)
Portfolio A (For the year
ended 03/31/95)........... 13.61 2.72% 65,291,541 1.59% 1.63% (0.66%)
Portfolio A (For the period
ended 03/31/94)........... 13.25 6.27% 70,512,167 1.57%* 1.71%* (0.68%)*
INCOME & GROWTH
Portfolio A (For the year
ended 03/31/97)........... 16.59 13.73% 32,081,563 1.60% 1.75% 2.83%
Portfolio A (For the year
ended 03/31/96)........... 15.68 26.00% 31,712,051 1.60% 1.76% 3.29%
Portfolio A (For the year
ended 03/31/95)........... 12.86 (2.64%) 31,150,481 1.60% 1.76% 3.71%
Portfolio A (For the period
ended 03/31/94)........... 14.16 19.65% 30,447,446 1.59%* 1.83%* 2.83%*
BALANCED GROWTH
Portfolio A (For the year
ended 03/31/97)........... 15.54 6.74% 4,897,987 1.60% 3.00% 1.87%
Portfolio A (For the year
ended 03/31/96)........... 16.16 20.16% 5,902,210 1.60% 3.30% 2.16%
Portfolio A (For the year
ended 03/31/95)........... 13.74 3.22% 4,979,593 1.60% 2.78% 1.44%
Portfolio A (For the period
ended 03/31/94)........... 13.52 9.35% 6,445,901 1.59%* 3.28%* 1.30%*
GOVERNMENT INCOME
Portfolio A (For the year
ended 03/31/97)........... 12.16 2.73% 1,113,290 0.90% 7.67% 5.52%
Portfolio A (For the year
ended 03/31/96)........... 12.74 9.71% 1,297,458 0.93% 9.58% 5.78%
Portfolio A (For the year
ended 03/31/95)........... 12.29 3.68% 925,074 1.10% 8.40% 5.18%
Portfolio A (For the period
ended 03/31/94)........... 12.51 4.97% 819,919 1.10%* 20.28%* 3.07%*
MONEY MARKET
Portfolio A (For the year
ended 03/31/97)........... 1.00 5.09% 36,258,680 0.45% 1.73% 4.97%
Portfolio A (For the year
ended 03/31/96)........... 1.00 5.47% 3,129,223 0.45% 5.78% 5.35%
Portfolio A (For the year
ended 03/31/95)........... 1.00 4.58% 2,995,847 0.31% 2.49% 4.60%
Portfolio A (For the period
ended 03/31/94)........... 1.00 1.72% 47,975 0.54%* 323.24%* 1.85%*
EMERGING COUNTRIES
Portfolio A (For the year
ended 03/31/97)........... 17.20 24.79% 38,687,897 2.25% 3.08% (1.14%)
Portfolio A (For the year
ended 03/31/96)........... 14.03 28.43% 4,717,767 2.25% 6.72% (0.35%)
Portfolio A (For the period
ended 03/31/95)........... 11.00 (11.98%) 1,197,361 2.25%* 6.15%* 1.09%*
INTERNATIONAL SMALL CAP GROWTH
Portfolio A (For the year
ended 03/31/97)........... 14.92 14.67% 5,569,084 1.95% 3.76% (1.05%)
Portfolio A (For the year
ended 03/31/96)........... 13.15 15.46% 1,055,809 1.95% 10.06% (0.27%)
Portfolio A (For the period
ended 03/31/95)........... 11.51 (7.85%) 610,176 1.95%* 9.77%* (0.07%)*
INTERNATIONAL CORE GROWTH
Portfolio A (For the period
ended 03/31/97)........... 12.73 1.76% 1,642 1.95%* 4,579.78%* --
WORLDWIDE GROWTH
Portfolio A (For the year
ended 03/31/97)........... 16.88 12.51% 24,022,177 1.85% 2.17% (0.93%)
Portfolio A (For the year
ended 03/31/96)........... 16.57 19.79% 23,480,586 1.85% 2.17% (0.35%)
Portfolio A (For the year
ended 03/31/95)........... 14.29 (0.90%) 22,207,775 1.85% 2.18% (0.42%)
Portfolio A (For the period
ended 03/31/94)........... 14.94 19.52% 20,194,105 1.85%* 2.23%* (0.69%)*
<CAPTION>
RATIO OF NET
INCOME
(DEFICIT) TO
AVERAGE NET
ASSETS, BEFORE
EXPENSE
REIMBURSEMENT
(RECOUPMENT)
AND FEE
WAIVER**
<S> <C>
- ------------------------------
EMERGING GROWTH
Portfolio A (For the year
ended 03/31/97)........... (1.26%)
Portfolio A (For the year
ended 03/31/96)........... (1.20%)
Portfolio A (For the year
ended 03/31/95)........... (1.25%)
Portfolio A (For the period
ended 03/31/94)........... (1.51%)*
CORE GROWTH
Portfolio A (For the year
ended 03/31/97)........... (1.01%)
Portfolio A (For the year
ended 03/31/96)........... (0.89%)
Portfolio A (For the year
ended 03/31/95)........... (0.70%)
Portfolio A (For the period
ended 03/31/94)........... (0.82%)*
INCOME & GROWTH
Portfolio A (For the year
ended 03/31/97)........... 2.66%
Portfolio A (For the year
ended 03/31/96)........... 3.12%
Portfolio A (For the year
ended 03/31/95)........... 3.55%
Portfolio A (For the period
ended 03/31/94)........... 2.59%*
BALANCED GROWTH
Portfolio A (For the year
ended 03/31/97)........... 0.73%
Portfolio A (For the year
ended 03/31/96)........... 0.88%
Portfolio A (For the year
ended 03/31/95)........... 0.26%
Portfolio A (For the period
ended 03/31/94)........... (0.39%)*
GOVERNMENT INCOME
Portfolio A (For the year
ended 03/31/97)........... 0.22%
Portfolio A (For the year
ended 03/31/96)........... (0.75%)
Portfolio A (For the year
ended 03/31/95)........... (2.12%)
Portfolio A (For the period
ended 03/31/94)........... (16.11%)*
MONEY MARKET
Portfolio A (For the year
ended 03/31/97)........... 4.12%
Portfolio A (For the year
ended 03/31/96)........... 2.77%
Portfolio A (For the year
ended 03/31/95)........... 2.42%
Portfolio A (For the period
ended 03/31/94)........... (320.85%)*
EMERGING COUNTRIES
Portfolio A (For the year
ended 03/31/97)........... (2.00%)
Portfolio A (For the year
ended 03/31/96)........... (3.61%)
Portfolio A (For the period
ended 03/31/95)........... (4.99%)*
INTERNATIONAL SMALL CAP GROWTH
Portfolio A (For the year
ended 03/31/97)........... (2.82%)
Portfolio A (For the year
ended 03/31/96)........... (7.75%)
Portfolio A (For the period
ended 03/31/95)........... (7.89%)*
INTERNATIONAL CORE GROWTH
Portfolio A (For the period
ended 03/31/97)........... (4,576.87%)*
WORLDWIDE GROWTH
Portfolio A (For the year
ended 03/31/97)........... (1.18%)
Portfolio A (For the year
ended 03/31/96)........... (0.61%)
Portfolio A (For the year
ended 03/31/95)........... (0.75%)
Portfolio A (For the period
ended 03/31/94)........... (1.07%)*
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
53
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------
SERIES B PORTFOLIOS+
<TABLE>
<CAPTION>
NET ASSET NET NET REALIZED DISTRIBUTIONS
VALUES AT INVESTMENT AND UNREALIZED FROM NET DISTRIBUTIONS
BEGINNING INCOME GAINS (LOSSES) INVESTMENT FROM
OF PERIOD (DEFICIT) ON INVESTMENTS INCOME CAPITAL GAINS
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
EMERGING GROWTH
Portfolio B (For the year
ended 03/31/97)........... $ 16.69 $ (0.21) $ (0.97) -- --
Portfolio B (For the period
ended 03/31/96)........... 12.50 (0.14) 4.33 -- --
CORE GROWTH
Portfolio B (For the year
ended 03/31/97)........... 16.25 (0.17) 0.25 -- --
Portfolio B (For the period
ended 03/31/96)........... 12.50 (0.09) 3.84 -- --
INCOME & GROWTH
Portfolio B (For the year
ended 03/31/97)........... 14.96 0.31 1.64 $ (0.31) --
Portfolio B (For the period
ended 03/31/96)........... 12.50 0.24 2.46 (0.24) --
BALANCED GROWTH
Portfolio B (For the year
ended 03/31/97)........... 14.18 0.17 0.70 (0.17) --
Portfolio B (For the period
ended 03/31/96)........... 12.50 0.12 1.68 (0.12) --
GOVERNMENT INCOME
Portfolio B (For the year
ended 03/31/97)........... 12.53 0.56 (0.28) (0.56) $ (0.12)
Portfolio B (For the period
ended 03/31/96)........... 12.50 0.48 0.04 (0.48) (0.01)
EMERGING COUNTRIES
Portfolio B (For the year
ended 03/31/97)........... 14.02 (0.11) 3.47 -- (0.09)
Portfolio B (For the period
ended 03/31/96)........... 12.50 (0.04) 1.56 -- --
INTERNATIONAL SMALL CAP GROWTH
Portfolio B (For the year
ended 03/31/97)........... 13.96 (0.15) 2.09 (0.01) --
Portfolio B (For the period
ended 03/31/96)........... 12.50 (0.02) 1.48 -- --
INTERNATIONAL CORE GROWTH
Portfolio B (For the period
ended 03/31/97)........... 12.50 -- 0.18 -- --
WORLDWIDE GROWTH
Portfolio B (For the year
ended 03/31/97)........... 14.34 (0.14) 1.82 -- --
Portfolio B (For the period
ended 03/31/96)........... 12.50 (0.05) 1.89 -- --
</TABLE>
- --------------------
+ All Series B Portfolios commenced operations on May 31, 1995 except the
International Core Growth B Portfolio which commenced operations on February
28, 1997.
++ The Portfolio's maximum sales charge is not included in the total return
computation.
* Annualized.
** Includes expenses allocated from the Master Trust Funds. See Notes to Funds'
Financial Statements for amounts.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
54
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIO OF NET
INVESTMENT
RATIO OF RATIO OF INCOME (DEFICIT)
EXPENSES TO EXPENSES TO TO
AVERAGE NET AVERAGE NET AVERAGE NET
NET ASSETS ASSETS, AFTER ASSETS, BEFORE ASSETS, AFTER
NET ASSET AT EXPENSE EXPENSE EXPENSE
VALUES AT TOTAL END OF REIMBURSEMENT REIMBURSEMENT REIMBURSEMENT
END OF PERIOD RETURN++ PERIOD AND FEE WAIVER** AND FEE WAIVER** AND FEE WAIVER**
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
EMERGING GROWTH
Portfolio B (For the year
ended 03/31/97)........... $ 15.51 (7.07%) $28,029,591 2.61% 2.73% (2.13%)
Portfolio B (For the period
ended 03/31/96)........... 16.69 33.52% 13,625,738 2.58%* 3.26%* (2.09%)*
CORE GROWTH
Portfolio B (For the year
ended 03/31/97)........... 16.33 (0.49%) 29,002,393 2.25% 2.66% (1.69%)
Portfolio B (For the period
ended 03/31/96)........... 16.25 30.00% 11,185,978 2.22%* 3.39%* (1.61%)*
INCOME & GROWTH
Portfolio B (For the year
ended 03/31/97)........... 16.60 13.01% 12,739,703 2.25% 3.19% 2.29%
Portfolio B (For the period
ended 03/31/96)........... 14.96 21.72% 2,125,077 2.25%* 7.08%* 2.59%*
BALANCED GROWTH
Portfolio B (For the year
ended 03/31/97)........... 14.88 6.10% 2,132,890 2.25% 6.44% 1.25%
Portfolio B (For the period
ended 03/31/96)........... 14.18 14.45% 672,934 2.25%* 13.05%* 1.38%*
GOVERNMENT INCOME
Portfolio B (For the year
ended 03/31/97)........... 12.13 2.30% 1,344,705 1.29% 8.33% 5.20%
Portfolio B (For the period
ended 03/31/96)........... 12.53 4.16% 127,528 1.33%* 86.12%* 5.14%*
EMERGING COUNTRIES
Portfolio B (For the year
ended 03/31/97)........... 17.29 24.00% 24,557,521 2.90% 3.66% (1.77%)
Portfolio B (For the period
ended 03/31/96)........... 14.02 12.16% 3,557,080 2.90%* 7.58%* (1.05%)*
INTERNATIONAL SMALL CAP GROWTH
Portfolio B (For the year
ended 03/31/97)........... 15.89 13.96% 5,079,996 2.60% 4.89% (1.66%)
Portfolio B (For the period
ended 03/31/96)........... 13.96 11.68% 1,486,794 2.60%* 16.15%* (0.64%)*
INTERNATIONAL CORE GROWTH
Portfolio B (For the period
ended 03/31/97)........... 12.68 1.44% 1,027 2.59%* 16,000.25%* 0.00%*
WORLDWIDE GROWTH
Portfolio B (For the year
ended 03/31/97)........... 16.02 11.72% 5,941,869 2.50% 4.81% (1.62%)
Portfolio B (For the period
ended 03/31/96)........... 14.34 14.72% 1,972,242 2.50%* 9.50%* (1.28%)*
<CAPTION>
RATIO OF NET
INVESTMENT
INCOME (DEFICIT)
TO
AVERAGE NET
ASSETS, BEFORE
EXPENSE
REIMBURSEMENT
AND FEE WAIVER**
<S> <C>
- ------------------------------
EMERGING GROWTH
Portfolio B (For the year
ended 03/31/97)........... (2.25%)
Portfolio B (For the period
ended 03/31/96)........... (2.76%)*
CORE GROWTH
Portfolio B (For the year
ended 03/31/97)........... (2.10%)
Portfolio B (For the period
ended 03/31/96)........... (2.77%)*
INCOME & GROWTH
Portfolio B (For the year
ended 03/31/97)........... 1.32%
Portfolio B (For the period
ended 03/31/96)........... (2.22%)*
BALANCED GROWTH
Portfolio B (For the year
ended 03/31/97)........... (2.67%)
Portfolio B (For the period
ended 03/31/96)........... (8.86%)*
GOVERNMENT INCOME
Portfolio B (For the year
ended 03/31/97)........... (0.36%)
Portfolio B (For the period
ended 03/31/96)........... (67.73%)*
EMERGING COUNTRIES
Portfolio B (For the year
ended 03/31/97)........... (2.55%)
Portfolio B (For the period
ended 03/31/96)........... (5.44%)*
INTERNATIONAL SMALL CAP GROWTH
Portfolio B (For the year
ended 03/31/97)........... (3.91%)
Portfolio B (For the period
ended 03/31/96)........... (13.26%)*
INTERNATIONAL CORE GROWTH
Portfolio B (For the period
ended 03/31/97)........... (15,998.21%)*
WORLDWIDE GROWTH
Portfolio B (For the year
ended 03/31/97)........... (3.87%)
Portfolio B (For the period
ended 03/31/96)........... (8.12%)*
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
55
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------
SERIES C PORTFOLIOS+
<TABLE>
<CAPTION>
NET ASSET NET NET REALIZED DISTRIBUTIONS
VALUES AT INVESTMENT AND UNREALIZED FROM NET DISTRIBUTIONS
BEGINNING INCOME GAINS (LOSSES) INVESTMENT FROM
OF PERIOD (DEFICIT) ON INVESTMENTS INCOME CAPITAL GAINS
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
EMERGING GROWTH
Portfolio C (For the year
ended 03/31/97)........... $ 17.62 $ (0.31) $ (0.63) -- $ (1.99)
Portfolio C (For the year
ended 03/31/96)........... 12.96 (0.29) 5.03 -- (0.08)
Portfolio C (For the year
ended 03/31/95)........... 12.07 (0.22) 1.11 -- --
Portfolio C (For the period
ended 03/31/94)........... 12.50 (0.06) (0.37) -- --
CORE GROWTH
Portfolio C (For the year
ended 03/31/97)........... 18.06 (0.32) 0.62 -- (1.88)
Portfolio C (For the year
ended 03/31/96)........... 13.45 (0.27) 4.88 -- --
Portfolio C (For the year
ended 03/31/95)........... 13.18 (0.17) 0.44 -- --
Portfolio C (For the period
ended 03/31/94)........... 12.50 (0.11) 0.80 -- (0.01)
INCOME & GROWTH
Portfolio C (For the year
ended 03/31/97)........... 15.89 0.37 1.66 $ (0.37) (0.50)
Portfolio C (For the year
ended 03/31/96)........... 13.03 0.40 2.86 (0.40) --
Portfolio C (For the year
ended 03/31/95)........... 14.28 0.41 (0.89) (0.41) (0.36)
Portfolio C (For the period
ended 03/31/94)........... 12.50 0.24 2.11 (0.24) (0.33)
BALANCED GROWTH
Portfolio C (For the year
ended 03/31/97)........... 16.20 0.21 0.85 (0.21) (1.46)
Portfolio C (For the year
ended 03/31/96)........... 13.76 0.24 2.44 (0.24) --
Portfolio C (For the year
ended 03/31/95)........... 13.54 0.11 0.22 (0.11) --
Portfolio C (For the period
ended 03/31/94)........... 12.50 0.08 1.04 (0.08) --
GOVERNMENT INCOME
Portfolio C (For the year
ended 03/31/97)........... 12.63 0.62 (0.34) (0.62) --
Portfolio C (For the year
ended 03/31/96)........... 12.27 0.77 0.36 (0.77) --
Portfolio C (For the year
ended 03/31/95)........... 12.56 0.63 (0.28) (0.63) (0.01)
Portfolio C (For the period
ended 03/31/94)........... 12.50 0.25 0.29 (0.25) (0.23)
EMERGING COUNTRIES
Portfolio C (For the year
ended 03/31/97)........... 13.71 (0.10) 3.37 -- (0.17)
Portfolio C (For the year
ended 03/31/96)........... 10.79 (0.05) 2.97 -- --
Portfolio C (For the period
ended 03/31/95)........... 12.50 -- (1.70) (0.01) --
INTERNATIONAL SMALL CAP GROWTH
Portfolio C (For the year
ended 03/31/97)........... 13.05 (0.16) 1.98 -- --
Portfolio C (For the year
ended 03/31/96)........... 11.32 0.01 1.72 -- --
Portfolio C (For the period
ended 03/31/95)........... 12.50 (0.04) (1.12) (0.02) --
INTERNATIONAL CORE GROWTH
Portfolio B (For the period
ended 03/31/97)........... 12.50 -- 0.18 -- --
WORLDWIDE GROWTH
Portfolio C (For the year
ended 03/31/97)........... 16.76 (0.28) 2.23 -- (1.79)
Portfolio C (For the year
ended 03/31/96)........... 14.44 (0.21) 2.92 (0.01) (0.38)
Portfolio C (For the year
ended 03/31/95)........... 14.86 (0.15) (0.08) -- (0.19)
Portfolio C (For the period
ended 03/31/94)........... 12.50 (0.09) 2.45 -- --
</TABLE>
- --------------------
+ All Series C Portfolios commenced operations on April 19, 1993, except
Emerging Growth Portfolio C, Emerging Countries Portfolio C, International
Small Cap Growth Portfolio C and International Core Growth Portfolio C which
commenced operations on December 27, 1993, November 28, 1994, August 31, 1994
and February 28, 1997.
++ The Portfolio's maximum sales charge is not included in the total return
computation.
* Annualized.
** Includes expenses allocated from the Master Trust Funds. See Notes to Funds'
Financial Statements for amounts.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
56
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIO OF NET
INVESTMENT
RATIO OF RATIO OF INCOME (DEFICIT)
EXPENSES TO EXPENSES TO TO
AVERAGE NET AVERAGE NET AVERAGE NET
ASSETS, AFTER ASSETS, BEFORE ASSETS, AFTER
EXPENSE EXPENSE EXPENSE
NET ASSET REIMBURSEMENT REIMBURSEMENT REIMBURSEMENT
VALUES AT TOTAL NET ASSETS AT (RECOUPMENT) (RECOUPMENT) (RECOUPMENT)
END OF PERIOD RETURN++ END OF PERIOD AND FEE WAIVER** AND FEE WAIVER** AND FEE WAIVER**
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
EMERGING GROWTH
Portfolio C (For the year
ended 03/31/97)........... $ 14.69 (6.81%) $ 182,906,982 2.35% 2.35% (1.89%)
Portfolio C (For the year
ended 03/31/96)........... 17.62 37.18% 207,332,005 2.35% 2.35% (1.81%)
Portfolio C (For the year
ended 03/31/95)........... 12.96 7.37% 157,292,246 2.44% 2.44% (1.85%)
Portfolio C (For the period
ended 03/31/94)........... 12.07 (3.44%) 142,874,310 2.34%* 2.34%* (2.04%)*
CORE GROWTH
Portfolio C (For the year
ended 03/31/97)........... 16.48 0.56% 157,501,096 2.14% 2.17% (1.59%)
Portfolio C (For the year
ended 03/31/96)........... 18.06 34.28% 177,461,331 2.14% 2.14% (1.47%)
Portfolio C (For the year
ended 03/31/95)........... 13.45 2.05% 143,389,656 2.24% 2.24% (1.30%)
Portfolio C (For the period
ended 03/31/94)........... 13.18 5.54% 141,488,561 2.17%* 2.17%* (1.30%)*
INCOME & GROWTH
Portfolio C (For the year
ended 03/31/97)........... 17.05 12.91% 62,143,307 2.25% 2.29% 2.18%
Portfolio C (For the year
ended 03/31/96)........... 15.89 25.24% 58,997,309 2.25% 2.28% 2.64%
Portfolio C (For the year
ended 03/31/95)........... 13.03 (3.26%) 61,791,573 2.25% 2.29% 3.05%
Portfolio C (For the period
ended 03/31/94)........... 14.28 18.76% 69,264,807 2.22%* 2.23%* 2.28%*
BALANCED GROWTH
Portfolio C (For the year
ended 03/31/97)........... 15.59 6.05% 16,990,094 2.25% 2.83% 1.23%
Portfolio C (For the year
ended 03/31/96)........... 16.20 19.58% 16,586,339 2.25% 3.01% 1.53%
Portfolio C (For the year
ended 03/31/95)........... 13.76 2.47% 16,469,510 2.25% 2.60% 0.83%
Portfolio C (For the period
ended 03/31/94)........... 13.54 8.91% 16,248,130 2.24%* 2.73%* 0.61%*
GOVERNMENT INCOME
Portfolio C (For the year
ended 03/31/97)........... 12.29 2.29% 3,694,341 1.30% 4.98% 5.10%
Portfolio C (For the year
ended 03/31/96)........... 12.63 9.20% 2,968,287 1.33% 5.77% 5.46%
Portfolio C (For the year
ended 03/31/95)........... 12.27 2.96% 4,278,140 1.50% 2.67% 4.58%
Portfolio C (For the period
ended 03/31/94)........... 12.56 4.28% 7,345,300 1.50%* 3.86%* 2.70%*
EMERGING COUNTRIES
Portfolio C (For the year
ended 03/31/97)........... 16.81 23.94% 29,375,971 2.90% 3.12% (1.75%)
Portfolio C (For the year
ended 03/31/96)........... 13.71 27.30% 4,344,744 2.90% 6.23% (1.06%)
Portfolio C (For the period
ended 03/31/95)........... 10.79 (13.64%) 59,366 2.90%* 242.59%* (0.04%)*
INTERNATIONAL SMALL CAP GROWTH
Portfolio C (For the year
ended 03/31/97)........... 14.87 13.98% 3,592,314 2.60% 3.95% (1.67%)
Portfolio C (For the year
ended 03/31/96)........... 13.05 15.30% 933,422 2.60% 16.15% (1.02%)
Portfolio C (For the period
ended 03/31/95)........... 11.32 (9.25%) 24,066 2.61%* 75.37%* (0.76%)*
INTERNATIONAL CORE GROWTH
Portfolio B (For the period
ended 03/31/97)........... 12.68 1.44% 43,075 2.41%* 25.55%* (0.07%)*
WORLDWIDE GROWTH
Portfolio C (For the year
ended 03/31/97)........... 16.92 11.81% 70,344,561 2.50% 2.61% (1.57%)
Portfolio C (For the year
ended 03/31/96)........... 16.76 18.95% 71,155,027 2.50% 2.57% (0.99%)
Portfolio C (For the year
ended 03/31/95)........... 14.44 (1.49%) 71,200,715 2.50% 2.57% (1.06%)
Portfolio C (For the period
ended 03/31/94)........... 14.86 18.88% 66,576,743 2.44%* 2.44%* (1.24%)*
<CAPTION>
RATIO OF NET
INVESTMENT
INCOME (DEFICIT)
TO
AVERAGE NET
ASSETS, BEFORE
EXPENSE
REIMBURSEMENT
(RECOUPMENT)
AND FEE WAIVER**
<S> <C>
- ------------------------------
EMERGING GROWTH
Portfolio C (For the year
ended 03/31/97)........... (1.89%)
Portfolio C (For the year
ended 03/31/96)........... (1.81%)
Portfolio C (For the year
ended 03/31/95)........... (1.85%)
Portfolio C (For the period
ended 03/31/94)........... (2.04%)*
CORE GROWTH
Portfolio C (For the year
ended 03/31/97)........... (1.62%)
Portfolio C (For the year
ended 03/31/96)........... (1.47%)
Portfolio C (For the year
ended 03/31/95)........... (1.30%)
Portfolio C (For the period
ended 03/31/94)........... (1.30%)*
INCOME & GROWTH
Portfolio C (For the year
ended 03/31/97)........... 2.11%
Portfolio C (For the year
ended 03/31/96)........... 2.61%
Portfolio C (For the year
ended 03/31/95)........... 3.01%
Portfolio C (For the period
ended 03/31/94)........... 2.27%*
BALANCED GROWTH
Portfolio C (For the year
ended 03/31/97)........... 0.91%
Portfolio C (For the year
ended 03/31/96)........... 1.19%
Portfolio C (For the year
ended 03/31/95)........... 0.48%
Portfolio C (For the period
ended 03/31/94)........... 0.12%*
GOVERNMENT INCOME
Portfolio C (For the year
ended 03/31/97)........... 2.89%
Portfolio C (For the year
ended 03/31/96)........... 3.13%
Portfolio C (For the year
ended 03/31/95)........... 3.41%
Portfolio C (For the period
ended 03/31/94)........... 0.34%*
EMERGING COUNTRIES
Portfolio C (For the year
ended 03/31/97)........... (1.99%)
Portfolio C (For the year
ended 03/31/96)........... (4.15%)
Portfolio C (For the period
ended 03/31/95)........... (239.73%)*
INTERNATIONAL SMALL CAP GROWTH
Portfolio C (For the year
ended 03/31/97)........... (2.99%)
Portfolio C (For the year
ended 03/31/96)........... (13.95%)
Portfolio C (For the period
ended 03/31/95)........... (73.52%)*
INTERNATIONAL CORE GROWTH
Portfolio B (For the period
ended 03/31/97)........... (291.20%)*
WORLDWIDE GROWTH
Portfolio C (For the year
ended 03/31/97)........... (1.62%)
Portfolio C (For the year
ended 03/31/96)........... (1.00%)
Portfolio C (For the year
ended 03/31/95)........... (1.13%)
Portfolio C (For the period
ended 03/31/94)........... (1.24%)*
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
57
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
STATEMENTS OF ASSETS AND LIABILITIES AS OF MARCH 31, 1997
- ------------------------------------------------------------------------
SERIES A PORTFOLIOS
<TABLE>
<CAPTION>
EMERGING CORE INCOME &
GROWTH GROWTH GROWTH
<S> <C> <C> <C>
---------------------------------------------------
ASSETS
Investments in Master Trust
Fund, at value*........... $ 121,913,319 $ 76,261,029 $ 32,228,292
Receivable for shares of
beneficial interest
sold...................... 208,197 205,691 68,902
Receivable for investments
sold in Master Trust
Fund...................... 12,524,806 252,974 3,716
Due from advisor............ -- -- 5,488
Deferred organization
costs..................... 3,863 9,117 7,517
Prepaid expenses and other
assets.................... -- 3 --
---------------------------------------------------
Total assets.............. 134,650,185 76,728,814 32,313,915
---------------------------------------------------
LIABILITIES
Payable for investments
purchased in Master Trust
Fund...................... 208,197 205,691 68,902
Payable for shares of
beneficial interest
repurchased............... 12,524,806 252,974 3,716
Due to advisor.............. -- 33,938 --
Dividend payable............ -- -- 123,330
Accrued expenses............ 175,535 128,235 36,404
---------------------------------------------------
Total liabilities......... 12,908,538 620,838 232,352
---------------------------------------------------
NET ASSETS.................... $ 121,741,647 $ 76,107,976 $ 32,081,563
---------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital............. $ 105,600,700 $ 63,464,639 $ 27,002,472
Accumulated undistributed
net investment income
(deficit)................. (5,037,611) (2,306,895) (5,927)
Accumulated undistributed
net realized gain (loss)
on security
transactions.............. 10,797,806 10,442,672 2,295,209
Accumulated undistributed
foreign exchange gain
(loss).................... -- -- --
Net unrealized foreign
exchange gain (loss)...... -- -- --
Net unrealized appreciation
(depreciation) on
investments............... 10,380,752 4,507,560 2,789,809
---------------------------------------------------
Net assets................ $ 121,741,647 $ 76,107,976 $ 32,081,563
---------------------------------------------------
Shares of beneficial
interest, no par value,
issued and outstanding
(unlimited shares
authorized)............... 8,038,199 4,529,358 1,933,759
---------------------------------------------------
COMPUTATION OF
Net asset value per share of
beneficial interest (Net
assets/ Outstanding shares
of beneficial interest)... $ 15.15 $ 16.80 $ 16.59
---------------------------------------------------
MAXIMUM OFFERING PRICE PER
SHARE OF
($15.15/94.75%,
$16.80/94.75%,
$16.59/94.75%,
$15.54/94.75%,
$12.16/95.25%, $1.00,
$17.20/94.75%,
$14.92/94.75%,
$12.73/94.75%,
$16.88/94.75%,
respectively)............. $ 15.99 $ 17.73 $ 17.51
---------------------------------------------------
* Cost of investments in the
Master Trust Fund:.......... $ 86,973,981 $ 53,171,736 $ 19,544,963
---------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
58
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL
BALANCED GOVERNMENT MONEY EMERGING SMALL CAP INTERNATIONAL WORLDWIDE
GROWTH INCOME MARKET COUNTRIES GROWTH CORE GROWTH GROWTH
<S> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------
ASSETS
Investments in Master Trust
Fund, at value*........... $ 4,948,089 $ 1,149,915 $ 36,269,808 $ 38,693,186 $ 5,587,854 $ 1,643 $ 24,049,057
Receivable for shares of
beneficial interest
sold...................... 3,820 12 -- 261,535 74,166 -- 36,703
Receivable for investments
sold in Master Trust
Fund...................... 22,811 24 -- 58,893 -- -- 56,995
Due from advisor............ 10,775 13,534 44,601 36,646 8,866 6,169 8,699
Deferred organization
costs..................... 6,767 6,506 5,422 4,325 -- -- 7,078
Prepaid expenses and other
assets.................... -- -- 2,472 -- -- -- --
---------------------------------------------------------------------------------------------------
Total assets.............. 4,992,262 1,169,991 36,322,303 39,054,585 5,670,886 7,812 24,158,532
---------------------------------------------------------------------------------------------------
LIABILITIES
Payable for investments
purchased in Master Trust
Fund...................... 3,820 12 -- 261,535 74,166 -- 36,703
Payable for shares of
beneficial interest
repurchased............... 22,811 24 -- 58,893 -- -- 56,995
Due to advisor.............. -- 30,779 26,503 -- -- -- --
Dividend payable............ 40,646 4,481 1,417 -- -- -- --
Accrued expenses............ 26,998 21,405 35,703 46,260 27,636 6,170 42,657
---------------------------------------------------------------------------------------------------
Total liabilities......... 94,275 56,701 63,623 366,688 101,802 6,170 136,355
---------------------------------------------------------------------------------------------------
NET ASSETS.................... $ 4,897,987 $ 1,113,290 $ 36,258,680 $ 38,687,897 $ 5,569,084 $ 1,642 $ 24,022,177
---------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital............. $ 4,189,821 $ 1,169,852 $ 36,259,004 $ 35,477,052 $ 5,096,086 $ 1,612 $ 19,347,956
Accumulated undistributed
net investment income
(deficit)................. 217 (594) -- (196,700) (43,486) -- (677,960)
Accumulated undistributed
net realized gain (loss)
on security
transactions.............. 179,782 (32,843) (324) 2,340,091 121,999 13 2,398,574
Accumulated undistributed
foreign exchange gain
(loss).................... -- -- -- (32,331) (11,178) (2) (42,249)
Net unrealized foreign
exchange gain (loss)...... -- -- -- (2,552) (591) (1) (5,629)
Net unrealized appreciation
(depreciation) on
investments............... 528,167 (23,125) -- 1,102,337 406,254 20 3,001,485
---------------------------------------------------------------------------------------------------
Net assets................ $ 4,897,987 $ 1,113,290 $ 36,258,680 $ 38,687,897 $ 5,569,084 $ 1,642 $ 24,022,177
---------------------------------------------------------------------------------------------------
Shares of beneficial
interest, no par value,
issued and outstanding
(unlimited shares
authorized)............... 315,190 91,535 36,259,004 2,249,748 373,205 129 1,423,429
---------------------------------------------------------------------------------------------------
COMPUTATION OF
Net asset value per share of
beneficial interest (Net
assets/ Outstanding shares
of beneficial interest)... $ 15.54 $ 12.16 $ 1.00 $ 17.20 $ 14.92 $ 12.73 $ 16.88
---------------------------------------------------------------------------------------------------
MAXIMUM OFFERING PRICE PER
SHARE OF
($15.15/94.75%,
$16.80/94.75%,
$16.59/94.75%,
$15.54/94.75%,
$12.16/95.25%, $1.00,
$17.20/94.75%,
$14.92/94.75%,
$12.73/94.75%,
$16.88/94.75%,
respectively)............. $ 16.40 $ 12.77 $ 1.00 $ 18.15 $ 15.75 $ 13.44 $ 17.82
---------------------------------------------------------------------------------------------------
* Cost of investments in the
Master Trust Fund:.......... $ 3,233,889 $ 953,635 $ 36,273,795 $ 35,042,012 $ 5,051,487 $ 1,612 $ 15,005,693
---------------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
59
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
STATEMENTS OF ASSETS AND LIABILITIES AS OF MARCH 31, 1997
- ------------------------------------------------------------------------
SERIES B PORTFOLIOS
<TABLE>
<CAPTION>
EMERGING CORE INCOME &
GROWTH GROWTH GROWTH
<S> <C> <C> <C>
--------------------------------------------------
ASSETS
Investments in Master Trust
Fund, at value*........... $ 28,090,750 $ 29,086,669 $ 12,863,717
Receivable for shares of
beneficial interest
sold...................... 348,129 163,944 73,719
Receivable for investments
sold in Master Trust
Fund...................... 30,318 14,770 2,324
Due from advisor............ -- 10,226 19,359
Deferred organization
costs..................... 625 625 625
Prepaid expenses and other
assets.................... 1,476 562 187
--------------------------------------------------
Total assets.............. 28,471,298 29,276,796 12,959,931
--------------------------------------------------
LIABILITIES
Payable for investments
purchased in Master Trust
Fund...................... 348,129 163,944 73,719
Payable for shares of
beneficial interest
repurchased............... 30,318 14,770 2,324
Due to advisor.............. 1,013 -- 1,013
Dividend payable............ -- -- 24,537
Accrued expenses............ 62,247 95,689 118,635
--------------------------------------------------
Total liabilities......... 441,707 274,403 220,228
--------------------------------------------------
NET ASSETS.................... $ 28,029,591 $ 29,002,393 $ 12,739,703
--------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital............. $ 29,891,118 $ 29,488,828 $ 12,030,243
Accumulated undistributed
net investment income
(deficit)................. (623,227) (444,725) (494)
Accumulated undistributed
net realized gain (loss)
on security
transactions.............. (517,449) 763,766 293,264
Accumulated undistributed
foreign exchange gain
(loss).................... -- -- --
Net unrealized foreign
exchange gain (loss)...... -- -- --
Net unrealized appreciation
(depreciation) on
investments............... (720,851) (805,476) 416,690
--------------------------------------------------
Net assets................ $ 28,029,591 $ 29,002,393 $ 12,739,703
--------------------------------------------------
Shares of beneficial
interest, no par value,
issued and outstanding
(unlimited shares
authorized)............... 1,807,110 1,775,837 767,845
--------------------------------------------------
COMPUTATION OF
Net asset value per share of
beneficial interest (Net
assets/Outstanding shares
of beneficial interest)... $ 15.51 $ 16.33 $ 16.60
--------------------------------------------------
* Cost of investments in the
Master Trust Fund:.......... $ 29,511,738 $ 29,211,582 $ 11,876,737
--------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
60
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL
BALANCED GOVERNMENT EMERGING SMALL CAP INTERNATIONAL WORLDWIDE
GROWTH INCOME COUNTRIES GROWTH CORE GROWTH GROWTH
<S> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------
ASSETS
Investments in Master Trust
Fund, at value*........... $ 2,165,096 $ 1,357,800 $ 24,604,374 $ 5,121,693 $ 1,028 $ 5,997,862
Receivable for shares of
beneficial interest
sold...................... 1,284 11,412 435,890 78,918 -- 211,675
Receivable for investments
sold in Master Trust
Fund...................... -- -- 17,689 -- -- --
Due from advisor............ 22,322 4,409 22,419 16,324 13,784 21,383
Deferred organization
costs..................... 625 625 636 624 -- 625
Prepaid expenses and other
assets.................... -- 6,064 -- -- -- --
------------------------------------------------------------------------------------
Total assets.............. 2,189,327 1,380,310 25,081,008 5,217,559 14,812 6,231,545
------------------------------------------------------------------------------------
LIABILITIES
Payable for investments
purchased in Master Trust
Fund...................... 1,284 11,412 435,890 78,918 -- 211,675
Payable for shares of
beneficial interest
repurchased............... -- -- 17,689 -- -- --
Due to advisor.............. 1,013 1,013 1,024 -- -- 1,013
Dividend payable............ 2,080 4,571 -- 415 -- --
Accrued expenses............ 52,060 18,609 68,884 58,230 13,785 76,988
------------------------------------------------------------------------------------
Total liabilities......... 56,437 35,605 523,487 137,563 13,785 289,676
------------------------------------------------------------------------------------
NET ASSETS.................... $ 2,132,890 $ 1,344,705 $ 24,557,521 $ 5,079,996 $ 1,027 $ 5,941,869
------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital............. $ 2,105,345 $ 1,366,339 $ 22,320,139 $ 4,606,017 $ 1,008 $ 5,508,936
Accumulated undistributed
net investment income
(deficit)................. 261 (245) (213,940) (56,858) -- (68,035)
Accumulated undistributed
net realized gain (loss)
on security
transactions.............. (27,294) 5,157 1,693,237 130,577 9 193,912
Accumulated undistributed
foreign exchange gain
(loss).................... -- -- (20,233) (11,211) (3) (15,044)
Net unrealized foreign
exchange gain (loss)...... -- -- (1,807) (542) -- (1,363)
Net unrealized appreciation
(depreciation) on
investments............... 54,578 (26,546) 780,125 412,013 13 323,463
------------------------------------------------------------------------------------
Net assets................ $ 2,132,890 $ 1,344,705 $ 24,557,521 $ 5,079,996 $ 1,027 $ 5,941,869
------------------------------------------------------------------------------------
Shares of beneficial
interest, no par value,
issued and outstanding
(unlimited shares
authorized)............... 143,328 110,839 1,420,199 319,641 81 370,791
------------------------------------------------------------------------------------
COMPUTATION OF
Net asset value per share of
beneficial interest (Net
assets/Outstanding shares
of beneficial interest)... $ 14.88 $ 12.13 $ 17.29 $ 15.89 $ 12.68 $ 16.02
------------------------------------------------------------------------------------
* Cost of investments in the
Master Trust Fund:.......... $ 2,084,771 $ 1,314,047 $ 22,136,886 $ 4,601,246 $ 1,008 $ 5,508,936
------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
61
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
STATEMENTS OF ASSETS AND LIABILITIES AS OF MARCH 31, 1997
- ------------------------------------------------------------------------
SERIES C PORTFOLIOS
<TABLE>
<CAPTION>
EMERGING GROWTH CORE GROWTH INCOME & GROWTH
<S> <C> <C> <C>
---------------------------------------------------
ASSETS
Investments in Master Trust
Fund, at value*........... $ 183,263,181 $ 157,813,767 $ 62,603,075
Receivable for shares of
beneficial interest
sold...................... 556,882 116,534 36,282
Receivable for investments
sold in Master Trust
Fund...................... 949,862 655,742 692,478
Due from advisor............ -- -- 1,372
Deferred organization
costs..................... 3,862 9,484 7,585
Prepaid expenses and other
assets.................... 3 8 --
---------------------------------------------------
Total assets.............. 184,773,790 158,595,535 63,340,792
---------------------------------------------------
LIABILITIES
Payable for investments
purchased in Master Trust
Fund...................... 556,882 116,534 36,282
Payable for shares of
beneficial interest
repurchased............... 949,862 655,742 692,478
Due to advisor.............. -- 274 --
Dividend payable............ -- -- 351,978
Accrued expenses............ 360,064 321,889 116,747
---------------------------------------------------
Total liabilities......... 1,866,808 1,094,439 1,197,485
---------------------------------------------------
NET ASSETS.................... $ 182,906,982 $ 157,501,096 $ 62,143,307
---------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital............. $ 163,666,067 $ 130,204,183 $ 52,196,317
Accumulated undistributed
net investment income
(deficit)................. (10,834,513) (8,264,179) (9,138)
Accumulated undistributed
net realized gain (loss)
on security
transactions.............. 15,249,305 24,043,018 4,419,738
Accumulated undistributed
foreign exchange gain
(loss).................... -- -- --
Net unrealized foreign
exchange gain (loss)...... -- -- --
Net unrealized appreciation
(depreciation) on
investments............... 14,826,123 11,518,074 5,536,390
---------------------------------------------------
Net assets................ $ 182,906,982 $ 157,501,096 $ 62,143,307
---------------------------------------------------
Shares of beneficial
interest, no par value,
issued and outstanding
(unlimited shares
authorized)............... 12,451,381 9,555,544 3,644,102
---------------------------------------------------
COMPUTATION OF
Net asset value per share of
beneficial interest (Net
assets/Outstanding shares
of beneficial interest)... $ 14.69 $ 16.48 $ 17.05
---------------------------------------------------
* Cost of investments in the
Master Trust Fund:.......... $ 131,929,217 $ 105,661,384 $ 39,010,365
---------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
62
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL
BALANCED GOVERNMENT EMERGING SMALL CAP INTERNATIONAL WORLDWIDE
GROWTH INCOME COUNTRIES GROWTH CORE GROWTH GROWTH
<S> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
ASSETS
Investments in Master Trust
Fund, at value*........... $ 17,108,508 $ 3,744,643 $ 29,455,854 $ 3,631,890 $ 43,092 $ 70,465,668
Receivable for shares of
beneficial interest
sold...................... 10,694 17,827 257,944 42,518 8,988 94,926
Receivable for investments
sold in Master Trust
Fund...................... 95,888 9,477 4,755 7,959 -- 252,472
Due from advisor............ 10,163 14,892 -- 5,450 4,406 466
Deferred organization
costs..................... 6,914 6,599 1,524 -- -- 7,645
Prepaid expenses and other
assets.................... -- -- -- -- -- --
---------------------------------------------------------------------------------------
Total assets.............. 17,232,167 3,793,438 29,720,077 3,687,817 56,486 70,821,177
---------------------------------------------------------------------------------------
LIABILITIES
Payable for investments
purchased in Master Trust
Fund...................... 10,694 17,827 257,944 42,518 8,988 94,926
Payable for shares of
beneficial interest
repurchased............... 95,888 9,477 4,755 7,959 -- 252,472
Due to advisor.............. -- 30,779 1,218 -- -- --
Dividend payable............ 93,218 15,139 -- 315 -- --
Accrued expenses............ 42,273 25,875 80,189 44,711 4,423 129,218
---------------------------------------------------------------------------------------
Total liabilities......... 242,073 99,097 344,106 95,503 13,411 476,616
---------------------------------------------------------------------------------------
NET ASSETS.................... $ 16,990,094 $ 3,694,341 $ 29,375,971 $ 3,592,314 $ 43,075 $ 70,344,561
---------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital............. $ 15,129,007 $ 3,922,758 $ 26,616,646 $ 3,228,242 $ 43,012 $ 57,164,262
Accumulated undistributed
net investment income
(deficit)................. 622 (1,230) (264,566) (50,030) (1) (3,058,313)
Accumulated undistributed
net realized gain (loss)
on security
transactions.............. 498,640 (153,974) 2,086,672 69,532 (262) 6,867,386
Accumulated undistributed
foreign exchange gain
(loss).................... -- -- (26,576) (7,885) (17) 393,292
Net unrealized foreign
exchange gain (loss)...... -- -- (2,282) (386) (14) (16,516)
Net unrealized appreciation
(depreciation) on
investments............... 1,361,825 (73,213) 966,077 352,841 357 8,994,450
---------------------------------------------------------------------------------------
Net assets................ $ 16,990,094 $ 3,694,341 $ 29,375,971 $ 3,592,314 $ 43,075 $ 70,344,561
---------------------------------------------------------------------------------------
Shares of beneficial
interest, no par value,
issued and outstanding
(unlimited shares
authorized)............... 1,089,607 300,707 1,747,147 241,603 3,396 4,158,310
---------------------------------------------------------------------------------------
COMPUTATION OF
Net asset value per share of
beneficial interest (Net
assets/Outstanding shares
of beneficial interest)... $ 15.59 $ 12.29 $ 16.81 $ 14.87 $ 12.68 $ 16.92
---------------------------------------------------------------------------------------
* Cost of investments in the
Master Trust Fund:.......... $ 12,296,292 $ 3,077,373 $ 26,327,753 $ 3,228,172 $ 43,012 $ 44,321,024
---------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
63
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
STATEMENTS OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 1997
- ------------------------------------------------------------------------
SERIES A PORTFOLIOS
<TABLE>
<CAPTION>
EMERGING CORE INCOME & BALANCED
GROWTH GROWTH GROWTH GROWTH
<S> <C> <C> <C> <C>
-----------------------------------------------------------------
INVESTMENT INCOME
Net investment income
(deficit) from Master
Trust Fund................ $ (975,837) $ (274,897) $ 1,078,627 $ 149,477
-----------------------------------------------------------------
EXPENSES
Accounting fees........... 55,609 40,529 28,150 11,686
Administration fees....... 4,986 6,377 8,398 7,223
Audit & tax fees.......... 7,850 8,532 9,144 9,522
Co-Administration fees.... 56,024 28,391 10,633 1,865
Distribution fees......... 382,408 209,589 77,395 14,817
Insurance................. 2,870 1,555 626 120
Legal fees................ 33,727 18,310 6,704 1,327
Miscellaneous............. 3,703 1,207 446 86
Organization costs........ 2,139 9,078 7,147 6,424
Registration fees......... 15,883 9,424 3,472 2,948
Shareholder reporting
fees.................... 29,769 20,618 4,761 2,381
Shareholder servicing
fees.................... 152,545 83,836 30,958 5,927
Transfer agent fees....... 196,533 131,687 66,936 40,934
Trustees' fee............. 1,190 1,112 919 953
-----------------------------------------------------------------
Total expenses.......... 945,236 570,245 255,689 106,213
Less: Reimbursement to
(from) advisor.......... -- 62,811 (43,830) (65,824)
Less: Co-Administration
fees waived............. -- (28,391) (10,633) (1,865)
Add: Line of credit
commitment fee.......... 4,282 2,412 904 159
-----------------------------------------------------------------
Net expenses............ 949,518 607,077 202,130 38,683
-----------------------------------------------------------------
Net investment income
(deficit)........... (1,925,355) (881,974) 876,497 110,794
-----------------------------------------------------------------
NET REALIZED & UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss) on
security transactions..... 22,751,958 15,467,542 4,451,706 500,670
Net realized foreign
exchange gain (loss)...... -- -- -- --
Net unrealized foreign
exchange gain (loss)...... -- -- -- --
Change in net unrealized
appreciation
(depreciation) of
investments............... (28,323,397) (13,774,880) (1,334,608) (135,773)
-----------------------------------------------------------------
Net gain (loss) on
investments........... (5,571,439) 1,692,662 3,117,098 364,897
-----------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS.................. $ (7,496,794) $ 810,688 $ 3,993,595 $ 475,691
-----------------------------------------------------------------
</TABLE>
- -------------
+ Commenced operations on February 28, 1997.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
64
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL INTERNATIONAL
GOVERNMENT MONEY EMERGING SMALL CAP CORE WORLDWIDE
INCOME MARKET COUNTRIES GROWTH GROWTH+ GROWTH
<S> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Net investment income
(deficit) from Master
Trust Fund................ $ 79,424 $ 877,328 $ (80,377) $ (12,431) $ 1 $ (66,145)
---------------------------------------------------------------------------------------------------
EXPENSES
Accounting fees........... 10,739 18,331 27,388 11,470 -- 26,518
Administration fees....... 6,362 4,986 7,053 1,677 1 7,420
Audit & tax fees.......... 9,591 9,503 9,584 9,605 1,314 8,983
Co-Administration fees.... 492 11,483 9,479 1,546 -- 8,271
Distribution fees......... 3,408 26,500 123,152 7,047 1 60,693
Insurance................. 32 13 78 1 2 472
Legal fees................ 304 3,099 2,719 511 -- 4,971
Miscellaneous............. 20 346 530 540 -- 350
Organization costs........ 6,190 5,298 1,445 -- 111 6,723
Registration fees......... 2,156 1,593 9,398 263 1,194 4,713
Shareholder reporting
fees.................... 1,007 3,191 3,666 967 -- 5,934
Shareholder servicing
fees.................... 1,363 17,667 16,420 2,811 -- 24,277
Transfer agent fees....... 33,873 46,454 35,931 29,674 3,263 59,035
Trustees' fee............. 835 508 914 859 284 1,022
---------------------------------------------------------------------------------------------------
Total expenses.......... 76,372 148,972 247,757 66,971 6,170 219,382
Less: Reimbursement to
(from) advisor.......... (71,815) (138,467) (131,546) (48,512) (6,169) (53,309)
Less: Co-Administration
fees waived............. (492) (11,483) (9,479) (1,546) -- (8,271)
Add: Line of credit
commitment fee.......... 42 978 804 132 -- 703
---------------------------------------------------------------------------------------------------
Net expenses............ 4,107 0 107,536 17,045 1 158,505
---------------------------------------------------------------------------------------------------
Net investment income
(deficit)........... 75,317 877,328 (187,913) (29,476) -- (224,650)
---------------------------------------------------------------------------------------------------
NET REALIZED & UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss) on
security transactions..... (33,783) (2) 2,620,500 151,811 13 3,695,538
Net realized foreign
exchange gain (loss)...... -- -- (25,273) (11,302) (2) (78,051)
Net unrealized foreign
exchange gain (loss)...... -- -- (2,504) (493) (1) (4,962)
Change in net unrealized
appreciation
(depreciation) of
investments............... 4,940 -- 733,976 289,270 20 (553,127)
---------------------------------------------------------------------------------------------------
Net gain (loss) on
investments........... (28,843) (2) 3,326,699 429,286 30 3,059,398
---------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS.................. $ 46,474 $ 877,326 $ 3,138,786 $ 399,810 $ 30 $ 2,834,748
---------------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
65
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
STATEMENTS OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 1997
- ------------------------------------------------------------------------
SERIES B PORTFOLIOS
<TABLE>
<CAPTION>
EMERGING CORE INCOME & BALANCED
GROWTH GROWTH GROWTH GROWTH
<S> <C> <C> <C> <C>
-----------------------------------------------------------------
INVESTMENT INCOME
Net investment income
(deficit) from Master
Trust Fund................ $ (149,654) $ (73,074) $ 248,679 $ 43,791
-----------------------------------------------------------------
EXPENSES
Accounting fees........... 27,135 27,330 23,007 13,233
Administration fees....... 4,986 1,714 1,830 2,074
Audit & tax fees.......... 9,262 9,262 9,262 9,262
Co-Adminstration fees..... 9,543 9,821 3,562 713
Distribution fees......... 179,975 170,941 51,856 12,844
Insurance................. 263 185 41 22
Legal fees................ 5,000 4,622 1,273 352
Miscellaneous............. 5,132 4,740 1,345 655
Organization costs........ 211 212 212 212
Registration fees......... 14,992 14,827 14,106 13,978
Shareholder reporting
fees.................... 34,828 68,881 11,385 3,855
Shareholder servicing
fees.................... 59,828 56,980 17,285 4,281
Transfer agent fees....... 37,937 34,989 20,892 22,684
Trustees' fee............. 816 815 1,015 5,314
-----------------------------------------------------------------
Total expenses.......... 389,908 405,319 157,071 89,479
Less: Reimbursement from
advisor................. (19,914) (83,508) (63,625) (66,671)
Less: Co-Adminstration
fees waived............. (9,543) (9,821) (3,562) (545)
Add: Line of credit
commitment fee.......... 810 834 302 61
-----------------------------------------------------------------
Net expenses............ 361,261 312,824 90,186 22,324
-----------------------------------------------------------------
Net investment income
(deficit)........... (510,915) (385,898) 158,493 21,467
-----------------------------------------------------------------
NET REALIZED & UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss) on
security transactions..... (288,290) 765,218 298,853 (20,222)
Net realized foreign
exchange gain (loss)...... -- -- -- --
Net unrealized foreign
exchange gain (loss)...... -- -- -- --
Change in net unrealized
appreciation
(depreciation) of
investments............... (2,501,896) (1,661,676) 282,117 29,343
-----------------------------------------------------------------
Net gain (loss) on
investments........... (2,790,186) (896,458) 580,970 9,121
-----------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS.................. $ (3,301,101) $ (1,282,356) $ 739,463 $ 30,588
-----------------------------------------------------------------
</TABLE>
- -------------
+ Commenced operations on February 28, 1997.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
66
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL INTERNATIONAL
GOVERNMENT EMERGING SMALL CAP CORE WORLDWIDE
INCOME COUNTRIES GROWTH GROWTH+ GROWTH
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------
INVESTMENT INCOME
Net investment income
(deficit) from Master
Trust Fund................ $ 50,486 $ (53,916) $ (12,108) $ 1 $ (12,127)
----------------------------------------------------------------------------------
EXPENSES
Accounting fees........... 14,342 24,799 13,760 -- 21,673
Administration fees....... 3,581 5,172 1,846 1 1,152
Audit & tax fees.......... 9,262 9,262 9,262 1,289 9,262
Co-Adminstration fees..... 436 6,139 1,473 -- 1,638
Distribution fees......... 4,279 86,600 22,586 1 28,354
Insurance................. 1 47 10 2 31
Legal fees................ 163 2,052 574 -- 755
Miscellaneous............. 461 2,837 809 -- 1,089
Organization costs........ 212 212 212 16 211
Registration fees......... 13,911 14,285 14,094 1,228 14,100
Shareholder reporting
fees.................... 1,541 19,507 7,719 -- 13,055
Shareholder servicing
fees.................... 2,139 28,867 7,508 -- 9,451
Transfer agent fees....... 2,228 39,633 24,748 11,248 32,533
Trustees' fee............. 1,015 915 1,015 -- 915
----------------------------------------------------------------------------------
Total expenses.......... 53,571 240,327 105,616 13,785 134,219
Less: Reimbursement from
advisor................. (47,197) (84,081) (66,499) (13,784) (83,436)
Less: Co-Adminstration
fees waived............. (436) (6,139) (1,473) -- (1,638)
Add: Line of credit
commitment fee.......... 37 521 125 -- 139
----------------------------------------------------------------------------------
Net expenses............ 5,975 150,628 37,769 1 49,284
----------------------------------------------------------------------------------
Net investment income
(deficit)........... 44,511 (204,544) (49,877) -- (61,411)
----------------------------------------------------------------------------------
NET REALIZED & UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss) on
security transactions..... 17,066 1,803,877 139,789 9 227,470
Net realized foreign
exchange gain (loss)...... -- (17,335) (11,214) (3) (13,875)
Net unrealized foreign
exchange gain (loss)...... -- (1,898) (390) -- (1,290)
Change in net unrealized
appreciation
(depreciation) of
investments............... (24,165) 605,621 325,117 13 186,506
----------------------------------------------------------------------------------
Net gain (loss) on
investments........... (7,099) 2,390,265 453,302 19 398,811
----------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS.................. $ 37,412 $ 2,185,721 $ 403,425 $ 19 $ 337,400
----------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
67
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
STATEMENTS OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 1997
- ------------------------------------------------------------------------
SERIES C PORTFOLIOS
<TABLE>
<CAPTION>
EMERGING CORE INCOME & BALANCED
GROWTH GROWTH GROWTH GROWTH
<S> <C> <C> <C> <C>
-----------------------------------------------------------------
INVESTMENT INCOME
Net investment income
(deficit) from Master
Trust Fund................ $ (1,430,438) $ (600,962) $ 2,153,355 $ 450,981
-----------------------------------------------------------------
EXPENSES
Accounting fees........... 69,919 61,650 35,557 14,566
Administration fees....... 4,986 13,895 16,756 21,743
Audit & tax fees.......... 47,025 7,229 8,583 9,332
Co-Administration fees.... 79,040 59,139 21,350 6,029
Distribution fees......... 1,673,336 1,367,835 463,340 133,791
Insurance................. 4,482 3,676 1,176 337
Legal fees................ 39,609 40,293 13,382 3,897
Miscellaneous............. 4,218 2,630 889 757
Organization costs........ 2,139 9,001 7,216 6,577
Registration fees......... 24,552 20,734 5,900 5,005
Shareholder reporting
fees.................... 11,331 35,133 10,165 3,148
Shareholder servicing
fees.................... 556,255 455,945 154,447 44,597
Transfer agent fees....... 264,089 270,708 108,449 38,095
Trustees' fee............. 5,722 1,447 743 648
-----------------------------------------------------------------
Total expenses.......... 2,786,703 2,349,315 847,953 288,522
Less: Reimbursement to
(from) advisor.......... -- 3,285 (23,479) (50,590)
Less: Co-Administration
fees waived............. -- (59,139) (21,350) (6,029)
Add: Line of credit
commitment fee.......... 6,045 5,026 1,814 513
-----------------------------------------------------------------
Net expenses............ 2,792,748 2,298,487 804,938 232,416
-----------------------------------------------------------------
Net investment income
(deficit)........... (4,223,186) (2,899,449) 1,348,417 218,565
-----------------------------------------------------------------
NET REALIZED & UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss) on
security transactions..... 33,211,523 35,664,077 8,550,614 1,455,500
Net realized foreign
exchange gain (loss)...... -- -- -- --
Net unrealized foreign
exchange gain (loss)...... -- -- -- --
Change in net unrealized
appreciation
(depreciation) of
investments............... (42,199,307) (30,168,671) (2,403,198) (647,319)
-----------------------------------------------------------------
Net gain on
investments........... (8,987,784) 5,495,406 6,147,416 808,181
-----------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS.................. $ (13,210,970) $ 2,595,957 $ 7,495,833 $ 1,026,746
-----------------------------------------------------------------
</TABLE>
- -------------
+ Commenced operations on February 28, 1997.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
68
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL INTERNATIONAL
GOVERNMENT EMERGING SMALL CAP CORE WORLDWIDE
INCOME COUNTRIES GROWTH GROWTH+ GROWTH
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------
INVESTMENT INCOME
Net investment income
(deficit) from Master
Trust Fund................ $ 203,389 $ (63,283) $ (11,232) $ 16 $ (195,350)
----------------------------------------------------------------------------------
EXPENSES
Accounting fees........... 11,283 25,987 11,244 1 37,524
Administration fees....... 16,232 6,483 1,664 10 21,991
Audit & tax fees.......... 9,536 8,701 9,602 1,315 8,539
Co-Administration fees.... 1,279 7,478 1,220 1 24,197
Distribution fees......... 17,533 106,711 20,268 10 539,559
Insurance................. 74 56 (6) 2 1,407
Legal fees................ 754 2,544 543 -- 15,703
Miscellaneous............. 200 501 38 -- 1,037
Organization costs........ 6,267 511 -- 39 7,264
Registration fees......... 3,388 2,149 373 1,216 8,105
Shareholder reporting
fees.................... 1,319 1,346 1,330 -- 14,253
Shareholder servicing
fees.................... 8,766 35,571 6,738 3 179,853
Transfer agent fees....... 24,415 21,317 16,237 1,731 107,854
Trustees' fee............. 937 493 262 95 1,011
----------------------------------------------------------------------------------
Total expenses.......... 101,983 219,848 69,513 4,423 968,297
Less: Reimbursement to
(from) advisor.......... (76,306) (27,404) (34,513) (4,405) (8,865)
Less: Co-Administration
fees waived............. (1,279) (7,478) (1,220) (1) (24,197)
Add: Line of credit
commitment fee.......... 109 635 104 -- 2,056
----------------------------------------------------------------------------------
Net expenses............ 24,507 185,601 33,884 17 937,291
----------------------------------------------------------------------------------
Net investment income
(deficit)........... 178,882 (248,884) (45,116) (1) (1,132,641)
----------------------------------------------------------------------------------
NET REALIZED & UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss) on
security transactions..... (40,291) 2,299,477 80,654 (262) 11,316,290
Net realized foreign
exchange gain (loss)...... -- (21,984) (8,590) (17) (232,218)
Net unrealized foreign
exchange gain (loss)...... -- (2,323) (293) (14) (14,511)
Change in net unrealized
appreciation
(depreciation) of
investments............... (29,932) 696,295 278,387 357 (1,872,212)
----------------------------------------------------------------------------------
Net gain on
investments........... (70,223) 2,971,465 350,158 64 9,197,349
----------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS.................. $ 108,659 $ 2,722,581 $ 305,042 $ 63 $ 8,064,708
----------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
69
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------
SERIES A PORTFOLIOS
<TABLE>
<CAPTION>
EMERGING GROWTH CORE GROWTH
------------------------------- -------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
-----------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS OPERATIONS
Net investment income
(deficit)................. $ (1,925,355) $ (1,467,001) $ (881,974) $ (641,957)
Net realized gain (loss)
from security
transactions.............. 22,751,958 17,157,012 15,467,542 11,262,503
Net realized foreign
exchange gain (loss)...... -- -- -- --
Net unrealized foreign
exchange gain (loss)...... -- -- -- --
Change in net unrealized
appreciation
(depreciation) of
investments............... (28,323,397) 22,567,484 (13,774,880) 10,033,989
-----------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations............ (7,496,794) 38,257,495 810,688 20,654,535
-----------------------------------------------------------------
DISTRIBUTIONS TO SHARES OF
BENEFICIAL INTEREST
Net investment income*...... -- -- -- --
Capital gain*............... (15,992,011) (179,082) (8,361,898) --
-----------------------------------------------------------------
Total distributions..... (15,992,011) (179,082) (8,361,898) --
-----------------------------------------------------------------
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Proceeds from shares sold... 462,516,007 37,959,926 30,931,782 13,279,964
Proceeds from shares issued
for distribution
reinvestment.............. 4,994,971 28,673 2,545,818 --
Cost of shares
repurchased............... (460,435,916) (44,636,699) (27,093,474) (21,950,980)
-----------------------------------------------------------------
Increase (decrease) in net
assets derived from
transactions in shares
of beneficial
interest................ 7,075,062 (6,648,100) 6,384,126 (8,671,016)
-----------------------------------------------------------------
Total increase
(decrease) in net
assets................ (16,413,743) 31,430,313 (1,167,084) 11,983,519
NET ASSETS:
BEGINNING OF PERIOD......... 138,155,390 106,725,077 77,275,060 65,291,541
-----------------------------------------------------------------
END OF PERIOD............... $ 121,741,647 $ 138,155,390 $ 76,107,976 $ 77,275,060
-----------------------------------------------------------------
CHANGES IN SHARES OF
BENEFICIAL INTEREST
Beginning balance........... 7,704,965 8,170,194 4,207,526 4,798,906
Shares sold................. 26,044,720 2,374,005 1,620,624 812,501
Shares issued for
distributions
reinvested................ 280,974 1,774 136,067 --
Shares repurchased.......... (25,992,460) (2,841,008) (1,434,859) (1,403,881)
-----------------------------------------------------------------
Ending balance.......... 8,038,199 7,704,965 4,529,358 4,207,526
-----------------------------------------------------------------
</TABLE>
- -------------
* See Financial Highlights for per share distribution amounts.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
70
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
INCOME & GROWTH BALANCED GROWTH GOVERNMENT INCOME
------------------------------- ------------------------------- -------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1997 1996 1997 1996 1997 1996
<S> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS OPERATIONS
Net investment income
(deficit)................. $ 876,497 $ 1,014,246 $ 110,794 $ 120,127 $ 75,317 $ 65,740
Net realized gain (loss)
from security
transactions.............. 4,451,706 3,025,096 500,670 688,324 (33,783) 74,049
Net realized foreign
exchange gain (loss)...... -- -- -- -- -- --
Net unrealized foreign
exchange gain (loss)...... -- -- -- -- -- --
Change in net unrealized
appreciation
(depreciation) of
investments............... (1,334,608) 3,076,767 (135,773) 188,570 4,940 (44,744)
---------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations............ 3,993,595 7,116,109 475,691 997,021 46,474 95,045
---------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHARES OF
BENEFICIAL INTEREST
Net investment income*...... (886,133) (1,011,296) (110,672) (120,078) (75,947) (65,742)
Capital gain*............... (1,316,886) -- (492,706) -- (27,737) --
---------------------------------------------------------------------------------------------------
Total distributions..... (2,203,019) (1,011,296) (603,378) (120,078) (103,684) (65,742)
---------------------------------------------------------------------------------------------------
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Proceeds from shares sold... 6,259,230 3,034,140 2,150,368 1,158,459 1,068,961 789,251
Proceeds from shares issued
for distribution
reinvestment.............. 1,074,289 359,472 161,907 19,024 41,246 21,274
Cost of shares
repurchased............... (8,754,583) (8,936,855) (3,188,811) (1,131,809) (1,237,165) (467,444)
---------------------------------------------------------------------------------------------------
Increase (decrease) in net
assets derived from
transactions in shares
of beneficial
interest................ (1,421,064) (5,543,243) (876,536) 45,674 (126,958) 343,081
---------------------------------------------------------------------------------------------------
Total increase
(decrease) in net
assets................ 369,512 561,570 (1,004,223) 922,617 (184,168) 372,384
NET ASSETS:
BEGINNING OF PERIOD......... 31,712,051 31,150,481 5,902,210 4,979,593 1,297,458 925,074
---------------------------------------------------------------------------------------------------
END OF PERIOD............... $ 32,081,563 $ 31,712,051 $ 4,897,987 $ 5,902,210 $ 1,113,290 $ 1,297,458
---------------------------------------------------------------------------------------------------
CHANGES IN SHARES OF
BENEFICIAL INTEREST
Beginning balance........... 2,022,208 2,422,113 365,215 362,417 101,818 75,262
Shares sold................. 381,186 209,464 127,031 75,429 85,134 60,991
Shares issued for
distributions
reinvested................ 65,578 24,649 9,776 1,215 3,298 1,648
Shares repurchased.......... (535,213) (634,018) (186,832) (73,846) (98,715) (36,083)
---------------------------------------------------------------------------------------------------
Ending balance.......... 1,933,759 2,022,208 315,190 365,215 91,535 101,818
---------------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
71
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS -- Continued
- --------------------------------------------------------------------------------
SERIES A PORTFOLIOS
<TABLE>
<CAPTION>
MONEY MARKET EMERGING COUNTRIES
------------------------------- -------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
-----------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS OPERATIONS
Net investment income
(deficit)................. $ 877,328 $ 199,306 $ (187,913) $ (8,681)
Net realized gain (loss)
from security
transactions.............. (2) (322) 2,620,500 75,094
Net realized foreign
exchange gain (loss)...... -- -- (25,273) (7,219)
Net unrealized foreign
exchange gain (loss)...... -- -- (2,504) (9)
Change in net unrealized
appreciation
(depreciation) of
investments............... -- -- 733,976 445,591
-----------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations............ 877,326 198,984 3,138,786 504,776
-----------------------------------------------------------------
DISTRIBUTIONS TO SHARES OF
BENEFICIAL INTEREST
Net investment income*...... (877,328) (199,306) -- (3,691)
Capital gain*............... -- -- (297,905) (12,591)
-----------------------------------------------------------------
Total distributions..... (877,328) -- (297,905) (16,282)
-----------------------------------------------------------------
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Proceeds from shares sold... 523,124,504 22,041,605 35,141,939 3,534,443
Proceeds from shares issued
for distribution
reinvestment.............. 771,842 180,368 161,618 2,935
Cost of shares
repurchased............... (490,766,887) (22,088,275) (4,174,308) (505,466)
-----------------------------------------------------------------
Increase (decrease) in net
assets derived from
transactions in shares
of beneficial
interest................ 33,129,459 133,698 31,129,249 3,031,912
-----------------------------------------------------------------
Total increase
(decrease) in net
assets................ 33,129,457 133,376 33,970,130 3,520,406
NET ASSETS:
BEGINNING OF PERIOD......... 3,129,223 2,995,847 4,717,767 1,197,361
-----------------------------------------------------------------
END OF PERIOD............... $ 36,258,680 $ 3,129,223 $ 38,687,897 $ 4,717,767
-----------------------------------------------------------------
CHANGES IN SHARES OF
BENEFICIAL INTEREST
Beginning balance........... 3,129,545 2,995,847 336,371 108,885
Shares sold................. 523,124,504 22,041,605 2,155,019 264,950
Shares issued for
distributions
reinvested................ 771,842 180,368 10,441 237
Shares repurchased.......... (490,766,887) (22,088,275) (252,083) (37,701)
-----------------------------------------------------------------
Ending balance.......... 36,259,004 3,129,545 2,249,748 336,371
-----------------------------------------------------------------
</TABLE>
- -------------
* See Financial Highlights for per share distribution amounts.
+ Commenced operations on February 28, 1997.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
72
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL
INTERNATIONAL SMALL CAP GROWTH CORE GROWTH+ WORLDWIDE GROWTH
------------------------------- -------------- -------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED PERIOD ENDED YEAR ENDED YEAR ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1997 1996 1997 1997 1996
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS OPERATIONS
Net investment income
(deficit)................. $ (29,476) $ (2,260) -- $ (224,650) $ (79,808)
Net realized gain (loss)
from security
transactions.............. 151,811 2,128 $ 13 3,695,538 1,986,079
Net realized foreign
exchange gain (loss)...... (11,302) 8,121 (2) (78,051) 186,789
Net unrealized foreign
exchange gain (loss)...... (493) 4,836 (1) (4,962) (12,787)
Change in net unrealized
appreciation
(depreciation) of
investments............... 289,270 108,746 20 (553,127) 2,037,016
----------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations............ 399,810 121,571 30 2,834,748 4,117,289
----------------------------------------------------------------------------------
DISTRIBUTIONS TO SHARES OF
BENEFICIAL INTEREST
Net investment income*...... (2,119) (9,359) -- -- (164,263)
Capital gain*............... (28,766) -- -- (2,322,037) (548,948)
----------------------------------------------------------------------------------
Total distributions..... (30,885) (9,359) -- (2,322,037) (713,211)
----------------------------------------------------------------------------------
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Proceeds from shares sold... 4,459,847 462,321 612 11,772,722 2,695,773
Proceeds from shares issued
for distribution
reinvestment.............. 11,339 4,744 -- 455,819 89,275
Cost of shares
repurchased............... (326,836) (133,644) -- (12,199,661) (4,916,315)
----------------------------------------------------------------------------------
Increase (decrease) in net
assets derived from
transactions in shares
of beneficial
interest................ 4,144,350 333,421 612 28,880 (2,131,267)
----------------------------------------------------------------------------------
Total increase
(decrease) in net
assets................ 4,513,275 445,633 642 541,591 1,272,811
NET ASSETS:
BEGINNING OF PERIOD......... 1,055,809 610,176 1,000 23,480,586 22,207,775
----------------------------------------------------------------------------------
END OF PERIOD............... $ 5,569,084 $ 1,055,809 $ 1,642 $ 24,022,177 $ 23,480,586
----------------------------------------------------------------------------------
CHANGES IN SHARES OF
BENEFICIAL INTEREST
Beginning balance........... 80,298 52,991 80 1,416,819 1,553,541
Shares sold................. 313,534 37,660 49 685,931 172,676
Shares issued for
distributions
reinvested................ 800 392 -- 27,509 5,816
Shares repurchased.......... (21,427) (10,745) -- 706,830 (315,214)
----------------------------------------------------------------------------------
Ending balance.......... 373,205 80,298 129 1,423,429 1,416,819
----------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
73
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS -- Continued
- --------------------------------------------------------------------------------
SERIES B PORTFOLIOS+
<TABLE>
<CAPTION>
EMERGING GROWTH CORE GROWTH
------------------------------- -------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
-----------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS OPERATIONS
Net investment income
(deficit)................. $ (510,915) $ (112,312) $ (385,898) $ (58,827)
Net realized gain (loss)
from security
transactions.............. (288,290) (229,159) 765,218 (1,452)
Net realized foreign
exchange gain (loss)...... -- -- -- --
Net unrealized foreign
exchange gain (loss)...... -- -- -- --
Change in net unrealized
appreciation
(depreciation) of
investments............... (2,501,896) 1,781,045 (1,661,676) 856,200
-----------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations............ (3,301,101) 1,439,574 (1,282,356) 795,921
-----------------------------------------------------------------
DISTRIBUTIONS TO SHARES OF
BENEFICIAL INTEREST
Net investment income*...... -- -- -- --
Capital gain*............... -- -- -- --
-----------------------------------------------------------------
Total distributions..... -- -- -- --
-----------------------------------------------------------------
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Proceeds from sales......... 24,330,440 12,483,997 22,036,974 11,229,429
Proceeds from shares issued
for distribution
reinvestment.............. -- -- -- --
Cost of shares
repurchased............... (6,625,486) (298,833) (2,938,203) (840,372)
-----------------------------------------------------------------
Increase (Decrease) in net
assets derived from
transactions in shares
of beneficial
interest................ 17,704,954 12,185,164 19,098,771 10,389,057
-----------------------------------------------------------------
Total increase
(decrease) in net
assets................ 14,403,853 13,624,738 17,816,415 11,184,978
NET ASSETS:
BEGINNING OF PERIOD......... 13,625,738 1,000 11,185,978 1,000
-----------------------------------------------------------------
END OF PERIOD............... $ 28,029,591 $ 13,625,738 $ 29,002,393 $ 11,185,978
-----------------------------------------------------------------
CHANGES IN SHARES OF
BENEFICIAL INTEREST
Beginning balance........... 816,643 80 688,351 80
Shares sold................. 1,363,267 835,910 1,254,123 743,523
Shares issued for
distributions
reinvested................ -- -- -- --
Shares repurchased.......... (372,800) (19,347) (166,637) (55,252)
-----------------------------------------------------------------
Ending balance.......... 1,807,110 816,643 1,775,837 688,351
-----------------------------------------------------------------
</TABLE>
- -------------
* See Financial Highlights for per share distribution amounts.
+ Commenced operations on May 31, 1995.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
74
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
INCOME & GROWTH BALANCED GROWTH GOVERNMENT INCOME
------------------------------- ------------------------------- -------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1997 1996 1997 1996 1997 1996
<S> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS OPERATIONS
Net investment income
(deficit)................. $ 158,493 $ 18,883 $ 21,467 $ 4,767 $ 44,511 $ 2,096
Net realized gain (loss)
from security
transactions.............. 298,853 (5,589) (20,222) (7,072) 17,066 445
Net realized foreign
exchange gain (loss)...... -- -- -- -- -- --
Net unrealized foreign
exchange gain (loss)...... -- -- -- -- -- --
Change in net unrealized
appreciation
(depreciation) of
investments............... 282,117 134,573 29,343 25,235 (24,165) (2,381)
---------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations............ 739,463 147,867 30,588 22,930 37,412 160
---------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHARES OF
BENEFICIAL INTEREST
Net investment income*...... (159,208) (18,662) (21,202) (4,771) (44,764) (2,088)
Capital gain*............... -- -- -- -- (12,311) (43)
---------------------------------------------------------------------------------------------------
Total distributions..... (159,208) (18,662) (21,202) (4,771) (57,075) (2,131)
---------------------------------------------------------------------------------------------------
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Proceeds from sales......... 10,404,427 1,989,445 1,680,671 701,091 1,747,622 186,853
Proceeds from shares issued
for distribution
reinvestment.............. 109,978 13,947 16,798 2,978 19,774 1,394
Cost of shares
repurchased............... (480,034) (8,520) (246,899) (50,294) (530,556) (59,748)
---------------------------------------------------------------------------------------------------
Increase (Decrease) in net
assets derived from
transactions in shares
of beneficial
interest................ 10,034,371 1,994,872 1,450,570 653,775 1,236,840 128,499
---------------------------------------------------------------------------------------------------
Total increase
(decrease) in net
assets................ 10,614,626 2,124,077 1,459,956 671,934 1,217,177 126,528
NET ASSETS:
BEGINNING OF PERIOD......... 2,125,077 1,000 672,934 1,000 127,528 1,000
---------------------------------------------------------------------------------------------------
END OF PERIOD............... $ 12,739,703 $ 2,125,077 $ 2,132,890 $ 672,934 $ 1,344,705 $ 127,528
---------------------------------------------------------------------------------------------------
CHANGES IN SHARES OF
BENEFICIAL INTEREST
Beginning balance........... 142,019 80 47,473 80 10,174 80
Shares sold................. 648,630 141,568 110,729 50,735 141,955 14,683
Shares issued for
distributions
reinvested................ 6,743 963 1,106 215 1,600 110
Shares repurchased.......... (29,547) (592) (15,980) (3,557) (42,890) (4,699)
---------------------------------------------------------------------------------------------------
Ending balance.......... 767,845 142,019 143,328 47,473 110,839 10,174
---------------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
75
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS -- Continued
- --------------------------------------------------------------------------------
SERIES B PORTFOLIOS+
<TABLE>
<CAPTION>
EMERGING COUNTRIES
-------------------------------
FOR THE FOR THE
YEAR ENDED PERIOD ENDED
MARCH 31, MARCH 31,
1997 1996
<S> <C> <C>
-------------------------------
INCREASE (DECREASE) IN NET
ASSETS OPERATIONS
Net investment income
(deficit)................. $ (204,544) $ (9,396)
Net realized gain (loss)
from security
transactions.............. 1,803,877 (42,752)
Net realized foreign
exchange gain (loss)...... (17,335) (2,898)
Net unrealized foreign
exchange gain (loss)...... (1,898) 91
Change in net unrealized
appreciation
(depreciation) of
investments............... 605,621 174,504
-------------------------------
Net increase (decrease)
in net assets
resulting from
operations............ 2,185,721 119,549
-------------------------------
DISTRIBUTIONS TO SHARES OF
BENEFICIAL INTEREST
Net investment income*...... -- --
Capital gain*............... (67,888) --
-------------------------------
Total distributions..... (67,888) --
-------------------------------
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Proceeds from sales......... 19,948,661 3,604,854
Proceeds from shares issued
for distribution
reinvestment.............. 38,740 --
Cost of shares
repurchased............... (1,104,793) (168,323)
-------------------------------
Increase in net assets
derived from
transactions in shares
of beneficial
interest................ 18,882,608 3,436,531
-------------------------------
Total increase in net
assets................ 21,000,441 3,556,080
NET ASSETS:
BEGINNING OF PERIOD......... 3,557,080 1,000
-------------------------------
END OF PERIOD............... $ 24,557,521 $ 3,557,080
-------------------------------
CHANGES IN SHARES OF
BENEFICIAL INTEREST
Beginning balance........... 253,774 80
Shares sold................. 1,230,640 265,757
Shares issued for
distributions
reinvested................ 2,483 --
Shares repurchased.......... (66,698) (12,064)
-------------------------------
Ending balance.......... 1,420,199 253,773
-------------------------------
</TABLE>
- -------------
* See Financial Highlights for per share distribution amounts.
+ Commenced operations on May 31, 1995 except the International Core Growth
Portfolio which commenced operations on February 28, 1997.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
76
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL
INTERNATIONAL SMALL CAP GROWTH CORE GROWTH WORLDWIDE GROWTH
------------------------------- -------------- -------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED PERIOD ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1997 1996 1997 1997 1996
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS OPERATIONS
Net investment income
(deficit)................. $ (49,877) $ (1,795) -- $ (61,411) $ (6,624)
Net realized gain (loss)
from security
transactions.............. 139,789 (9,212) $ 9 227,470 (33,558)
Net realized foreign
exchange gain (loss)...... (11,214) 3 (3) (13,875) (1,169)
Net unrealized foreign
exchange gain (loss)...... (390) (152) -- (1,290) (73)
Change in net unrealized
appreciation
(depreciation) of
investments............... 325,117 86,896 13 186,506 136,957
----------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations............ 403,425 75,740 19 337,400 95,533
----------------------------------------------------------------------------------
DISTRIBUTIONS TO SHARES OF
BENEFICIAL INTEREST
Net investment income*...... (5,186) -- -- -- --
Capital gain*............... -- -- -- -- --
----------------------------------------------------------------------------------
Total distributions..... (5,186) -- -- -- --
----------------------------------------------------------------------------------
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Proceeds from sales......... 3,702,565 1,436,777 8 3,764,249 1,875,734
Proceeds from shares issued
for distribution
reinvestment.............. 4,495 -- -- -- --
Cost of shares
repurchased............... (512,097) (26,723) -- (132,022) (25)
----------------------------------------------------------------------------------
Increase in net assets
derived from
transactions in shares
of beneficial
interest................ 3,194,963 1,410,054 8 3,632,227 1,875,709
----------------------------------------------------------------------------------
Total increase in net
assets................ 3,593,202 1,485,794 27 3,969,627 1,971,242
NET ASSETS:
BEGINNING OF PERIOD......... 1,486,794 1,000 1,000 1,972,242 1,000
----------------------------------------------------------------------------------
END OF PERIOD............... $ 5,079,996 $ 1,486,794 $ 1,027 $ 5,941,869 $ 1,972,242
----------------------------------------------------------------------------------
CHANGES IN SHARES OF
BENEFICIAL INTEREST
Beginning balance........... 106,534 80 80 137,552 80
Shares sold................. 246,154 108,479 1 241,408 137,474
Shares issued for
distributions
reinvested................ 290 -- -- -- --
Shares repurchased.......... (33,337) (2,025) -- (8,169) (2)
----------------------------------------------------------------------------------
Ending balance.......... 319,641 106,534 81 370,791 137,552
----------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
77
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS -- Continued
- --------------------------------------------------------------------------------
SERIES C PORTFOLIOS
<TABLE>
<CAPTION>
EMERGING GROWTH CORE GROWTH
------------------------------- -------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
-----------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS OPERATIONS
Net investment income
(deficit)................. $ (4,223,186) $ (3,277,713) $ (2,899,449) $ (2,371,066)
Net realized gain (loss)
from security
transactions.............. 33,211,523 25,025,135 35,664,077 25,076,226
Net realized foreign
exchange gain (loss)...... -- -- -- --
Net unrealized foreign
exchange gain (loss)...... -- -- -- --
Change in net unrealized
appreciation
(depreciation) of
investments............... (42,199,307) 33,698,001 (30,168,671) 23,755,815
-----------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations............ (13,210,970) 55,445,423 2,595,957 46,460,975
-----------------------------------------------------------------
DISTRIBUTIONS TO SHARES OF
BENEFICIAL INTEREST
Net investment income*...... -- -- -- --
Capital gain*............... (23,811,530) (934,772) (17,382,672) --
-----------------------------------------------------------------
Total distributions..... (23,811,530) (934,772) (17,382,672) --
-----------------------------------------------------------------
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Proceeds from sales......... 67,825,520 34,428,228 35,028,635 28,016,055
Proceeds from shares issued
for distribution
reinvestment.............. 2,692,729 70,462 2,654,979 --
Cost of shares
repurchased............... (57,920,772) (38,969,582) (42,857,133) (40,405,355)
-----------------------------------------------------------------
Increase (decrease) in net
assets derived from
transactions in shares
of beneficial
interest................ 12,597,477 (4,470,892) (5,173,519) (12,389,300)
-----------------------------------------------------------------
Total increase
(decrease) in net
assets................ (24,425,023) 50,039,759 (19,960,234) 34,071,675
NET ASSETS:
BEGINNING OF PERIOD......... 207,332,005 157,292,246 177,461,331 143,389,656
-----------------------------------------------------------------
END OF PERIOD............... $ 182,906,982 $ 207,332,005 $ 157,501,097 $ 177,461,331
-----------------------------------------------------------------
CHANGES IN SHARES OF
BENEFICIAL INTEREST
Beginning balance........... 11,765,386 12,138,614 9,825,753 10,660,454
Shares sold................. 3,815,165 2,229,275 1,872,637 1,736,793
Shares issued for
distributions
reinvested................ 156,388 4,429 144,369 --
Shares repurchased.......... (3,285,558) (2,606,932) (2,287,215) (2,571,494)
-----------------------------------------------------------------
Ending balance.......... 12,451,381 11,765,386 9,555,544 9,825,753
-----------------------------------------------------------------
</TABLE>
- -------------
* See Financial Highlights for per share distribution amounts.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
78
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
INCOME & GROWTH BALANCED GROWTH GOVERNMENT INCOME
------------------------------- ------------------------------- -------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1997 1996 1997 1996 1997 1996
<S> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS OPERATIONS
Net investment income
(deficit)................. $ 1,348,417 $ 1,577,283 $ 218,565 $ 249,565 $ 178,882 $ 195,107
Net realized gain (loss)
from security
transactions.............. 8,550,614 6,045,361 1,455,500 2,116,964 (40,291) 288,875
Net realized foreign
exchange gain (loss)...... -- -- -- -- -- --
Net unrealized foreign
exchange gain (loss)...... -- -- -- -- -- --
Change in net unrealized
appreciation
(depreciation) of
investments............... (2,403,198) 5,862,603 (647,319) 505,781 (29,932) (128,268)
---------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations............ 7,495,833 13,485,247 1,026,746 2,872,310 108,659 355,714
---------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHARES OF
BENEFICIAL INTEREST
Net investment income*...... (1,361,226) (1,579,024) (218,006) (250,682) (180,214) (195,316)
Capital gain*............... (1,851,637) -- (1,482,915) -- -- --
---------------------------------------------------------------------------------------------------
Total distributions..... (3,212,863) (1,579,024) (1,700,921) (250,682) (180,214) (195,316)
---------------------------------------------------------------------------------------------------
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Proceeds from sales......... 10,562,292 5,125,006 4,321,529 2,569,236 2,994,991 2,475,860
Proceeds from shares issued
for distribution
reinvestment.............. 564,331 118,288 180,525 28,551 47,133 37,183
Cost of shares
repurchased............... (12,263,595) (19,943,781) (3,424,124) (5,102,586) (2,262,515) (3,965,294)
---------------------------------------------------------------------------------------------------
Increase (decrease) in net
assets derived from
transactions in shares
of beneficial
interest................ (1,136,972) (14,700,487) 1,077,930 (2,504,799) 779,609 (1,452,251)
---------------------------------------------------------------------------------------------------
Total increase
(decrease) in net
assets................ 3,145,998 (2,794,264) 403,755 116,829 708,054 (1,291,853)
NET ASSETS:
BEGINNING OF PERIOD......... 58,997,309 61,791,573 16,586,339 16,469,510 2,986,287 4,278,140
---------------------------------------------------------------------------------------------------
END OF PERIOD............... $ 62,143,307 $ 58,997,309 $ 16,990,094 $ 16,586,339 $ 3,694,341 $ 2,986,287
---------------------------------------------------------------------------------------------------
CHANGES IN SHARES OF
BENEFICIAL INTEREST
Beginning balance........... 3,712,379 4,741,312 1,023,861 1,196,550 236,490 348,596
Shares sold................. 628,939 353,167 256,836 163,082 241,093 192,231
Shares issued for
distributions
reinvested................ 33,465 8,002 10,900 1,833 3,781 2,908
Shares repurchased.......... (730,681) (1,390,102) (201,990) (337,604) (180,657) (307,245)
---------------------------------------------------------------------------------------------------
Ending balance.......... 3,644,102 3,712,379 1,089,607 1,023,861 300,707 236,490
---------------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
79
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS -- Continued
- --------------------------------------------------------------------------------
SERIES C PORTFOLIOS
<TABLE>
<CAPTION>
EMERGING COUNTRIES
-------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
MARCH 31, MARCH 31,
1997 1996
<S> <C> <C>
-------------------------------
INCREASE (DECREASE) IN NET
ASSETS OPERATIONS
Net investment income
(deficit)................. $ (248,884) $ (15,679)
Net realized gain (loss)
from security
transactions.............. 2,299,477 (48,875)
Net realized foreign
exchange gain (loss)...... (21,984) (4,594)
Net unrealized foreign
exchange gain (loss)...... (2,323) 45
Change in net unrealized
appreciation
(depreciation) of
investments............... 696,295 268,631
-------------------------------
Net increase (decrease)
in net assets
resulting from
operations............ 2,722,581 199,528
-------------------------------
DISTRIBUTIONS TO SHARES OF
BENEFICIAL INTEREST
Net investment income*...... -- --
Capital gain*............... (163,843) --
-------------------------------
Total distributions..... (163,843) --
-------------------------------
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Proceeds from sales......... 24,484,540 4,602,574
Proceeds from shares issued
for distribution
reinvestment.............. 63,361 --
Cost of shares
repurchased............... (2,075,412) (516,724)
-------------------------------
Increase (decrease) in net
assets derived from
transactions in shares
of beneficial
interest................ 22,472,489 4,085,850
-------------------------------
Total increase
(decrease) in net
assets................ 25,031,227 4,285,378
NET ASSETS:
BEGINNING OF PERIOD......... 4,344,744 59,366
-------------------------------
END OF PERIOD............... $ 29,375,971 $ 4,344,744
-------------------------------
CHANGES IN SHARES OF
BENEFICIAL INTEREST
Beginning balance........... 316,899 5,503
Shares sold................. 1,557,372 350,179
Shares issued for
distributions
reinvested................ 4,177 --
Shares repurchased.......... (131,301) (38,783)
-------------------------------
Ending balance.......... 1,747,147 316,899
-------------------------------
</TABLE>
- -------------
* See Financial Highlights for per share distribution amounts.
+ Commenced operations on February 28, 1997.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
80
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL
INTERNATIONAL SMALL CAP GROWTH CORE GROWTH WORLDWIDE GROWTH
------------------------------- -------------- -------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED PERIOD ENDED YEAR ENDED YEAR ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1997 1996 1997+ 1997 1996
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS OPERATIONS
Net investment income
(deficit)................. $ (45,116) $ (3,506) $ (1) $ (1,132,641) $ (703,331)
Net realized gain (loss)
from security
transactions.............. 80,654 (10,145) (262) 11,316,290 5,902,488
Net realized foreign
exchange gain (loss)...... (8,590) 660 (17) (232,218) 571,253
Net unrealized foreign
exchange gain (loss)...... (293) 181 (14) (14,511) (39,907)
Change in net unrealized
appreciation
(depreciation) of
investments............... 278,387 74,042 357 (1,872,212) 6,622,118
----------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from
operations............ 305,042 61,232 63 8,064,708 12,352,621
----------------------------------------------------------------------------------
DISTRIBUTIONS TO SHARES OF
BENEFICIAL INTEREST
Net investment income*...... (1,204) (75) -- -- (38,714)
Capital gain*............... -- -- -- (7,050,772) (1,617,540)
----------------------------------------------------------------------------------
Total distributions..... (1,204) (75) -- (7,050,772) (1,656,254)
----------------------------------------------------------------------------------
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST
Proceeds from sales......... 3,600,080 894,986 42,012 12,717,331 9,990,990
Proceeds from shares issued
for distribution
reinvestment.............. 872 53 -- 871,898 248,301
Cost of shares
repurchased............... (1,245,898) (46,840) -- (15,413,631) (20,981,346)
----------------------------------------------------------------------------------
Increase (decrease) in net
assets derived from
transactions in shares
of beneficial
interest................ 2,355,054 848,199 42,012 (1,824,402) (10,742,055)
----------------------------------------------------------------------------------
Total increase
(decrease) in net
assets................ 2,658,892 909,356 42,075 (810,466) (45,688)
NET ASSETS:
BEGINNING OF PERIOD......... 933,422 24,066 1,000 71,155,027 71,200,715
----------------------------------------------------------------------------------
END OF PERIOD............... $ 3,592,314 $ 933,422 $ 43,075 $ 70,344,561 $ 71,155,027
----------------------------------------------------------------------------------
CHANGES IN SHARES OF
BENEFICIAL INTEREST
Beginning balance........... 71,526 2,126 80 4,244,437 4,932,460
Shares sold................. 255,944 73,086 3,316 746,203 627,728
Shares issued for
distributions
reinvested................ 60 5 -- 52,366 15,968
Shares repurchased.......... (85,927) (3,691) -- (884,696) (1,331,719)
----------------------------------------------------------------------------------
Ending balance.......... 241,603 71,526 3,396 4,158,310 4,244,437
----------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
81
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
NOTES TO THE FINANCIAL STATEMENTS
- ------------------------------------------------------------------------
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 52 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 (also known as Advisory), 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 seventeen
investment vehicles (the "Funds"). For a description of the investments
objectives of each Fund, see Note A to the accompanying Funds' financial
statements.
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 AND REALIZED AND UNREALIZED GAINS AND LOSSES
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 securities 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.
As of March 31, 1997, Emerging Growth Portfolio B, Balanced Growth Portfolio
B, Government Income Portfolios A and C, Money Market Portfolio A and
International Core Growth Portfolio C had available for Federal tax purposes
$499,752, $27,294, $33,783, $155,720, $324 and $209, respectively, of unused
capital loss carryovers which expire through 2005.
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. The prospectus
for the Nicholas-Applegate Mutual Funds describe each Portfolio's policies with
respect to declaration and payment of dividends and distribution of capital
gains.
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 are amortized over a period of 60
months from the date the Portfolios commenced operations.
- --------------------------------------------------------------------------------
82
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
NOTES TO THE FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
In the event that any of the initial shares are redeemed by the holder during
the period of amortization of the Portfolio's 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.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
2. TRANSACTIONS WITH AFFILIATES
ADVISORY AGREEMENTS
The investment adviser to the Master Trust is Nicholas-Applegate Capital
Management ("Nicholas-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.
DISTRIBUTION AND SHAREHOLDER SERVICE PLAN
The Trust has approved a distribution plan whereby Nicholas Applegate
Securities (the "Distributor"), an affiliate of Nicholas-Applegate Capital
Management, is compensated for distribution-related expenses at an annual rate,
payable monthly, of 0.25%, 0.75% and 0.75% of Series A , B and C Portfolios'
average daily net assets, respectively, except for Government Income B and C
Portfolios, which is 0.50% and 0.50%, respectively.
The Money Market Portfolio compensates the Distributor at the rate of 0.15% of
average daily net assets.
Under a distribution agreement, the Distributor who is the principal
underwriter for the sale of shares of the Portfolios, retains a portion of any
contingent deferred sales load on redemptions for the Portfolios, and retains a
portion of the initial sales load imposed on purchases of shares of the Series A
Portfolios. This agreement may be terminated by either party upon 60 days'
written notice. For the fiscal year ended March 31, 1997, the Distributor earned
approximately $2,376,000 from sales loads, of which approximately $1,743,000 was
re-allowed to other brokers.
The Trust has approved a shareholder service plan under which the Distributor
is also compensated for non-distribution related expenses at an annual rate, as
follows: 0.10%, 0.25% and 0.25% of the average daily net asset value of the
Series A (including Money Market Portfolio), Series B, and Series C Portfolios,
respectively.
ADMINISTRATIVE SERVICES AGREEMENT
Effective November 15, 1996, the Trust agreed to compensate the Investment
Adviser for co-administrative services at annual rate of up to 0.10% of average
daily net assets of each of the Portfolios. These fees are in addition to the
administrative fees charged by Investment Company Administration Corporation.
The Investment Adviser has agreed to waive these fees if the related Portfolio's
expenses before reimbursement is greater than the expense limitation. In
subsequent years, each Portfolio will reimburse the Investment Adviser, up to
actual cost, when operating expenses before reimbursement are less than the
applicable expense limitation. As of March 31, 1997, Emerging Growth Portfolios
A and C owed the Investment Adviser $11,797 and $16,578, respectively, which
were included in accrued expenses.
EXPENSE LIMITATIONS
Nicholas-Applegate and the Trust have undertaken to limit the Portfolios'
expenses to the following annual levels through March 31, 1998. In subsequent
years, overall operating expenses for each Portfolio will not fall below the
applicable percentage
- --------------------------------------------------------------------------------
83
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
NOTES TO THE FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
limitation until the Investment Adviser has been fully reimbursed for fees
foregone and 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>
A B C
--------- --------- ---------
<S> <C> <C> <C>
Emerging Growth Portfolios.......... 1.95% 2.60% 2.60%
Core Growth Portfolios.............. 1.60% 2.25% 2.25%
Income & Growth Portfolios.......... 1.60% 2.25% 2.25%
Balanced Growth Portfolios.......... 1.60% 2.25% 2.25%
Government Income Portfolios........ 0.90% 1.30% 1.30%
Money Market Portfolio.............. 1.10% -- --
Emerging Countries Portfolios....... 2.25% 2.90% 2.90%
International Small Cap Growth
Portfolios........................ 1.95% 2.60% 2.60%
International Core Growth
Portfolios........................ 1.95% 2.60% 2.60%
Worldwide Growth Portfolios......... 1.85% 2.50% 2.50%
</TABLE>
During the period from November 22, 1993 to March 31, 1997,
Nicholas-Applegate, at its discretion, paid for all of the Money Market
Portfolio expenses. Nicholas-Applegate may continue to make such additional
payments for expenses within the limitation at its discretion.
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.
The cumulative unreimbursed amounts paid by Nicholas-Applegate, including
co-administrative fees, on behalf of the Portfolios, during the periods from
inception (respectively) to March 31, 1997, are as follows:
<TABLE>
<CAPTION>
A B C
--------- --------- ---------
<S> <C> <C> <C>
Emerging Growth Portfolios..... -- $ 65,692 --
Core Growth Portfolios......... $ 46,458 135,856 $ 55,854
Income & Growth Portfolios..... 204,503 102,312 95,277
Balanced Growth Portfolios..... 283,977 102,866 221,303
Government Income Portfolios... 283,963 79,686 290,668
Money Market Portfolio......... 396,479 -- --
Emerging Countries
Portfolios.................... 261,976 129,701 119,191
International Small Cap Growth
Portfolios.................... 132,827 104,001 96,551
International Core Growth
Portfolios.................... 6,169 13,784 4,406
Worldwide Growth Portfolios.... 244,075 120,764 91,831
</TABLE>
RELATED PARTIES
Certain officers of the Trust and the Master Trust are also officers of the
Investment Adviser and the Distributor.
3. INVESTMENT TRANSACTIONS
Additions and reductions in the investments in the respective Master Trust
Funds for the fiscal year ended March 31, 1997 were as follows:
<TABLE>
<CAPTION>
ADDITIONS REDUCTIONS
(000S) (000S)
----------- -----------
<S> <C> <C>
Emerging Growth Portfolio A..... $ 462,566 $ 472,415
Emerging Growth Portfolio B..... 24,356 7,009
Emerging Growth Portfolio C..... 67,934 81,916
Core Growth Portfolio A......... 30,961 33,470
Core Growth Portfolio B......... 22,134 3,314
Core Growth Portfolio C......... 35,099 59,890
Income & Growth Portfolio A..... 6,314 10,142
Income & Growth Portfolio B..... 10,404 507
Income & Growth Portfolio C..... 10,590 15,734
</TABLE>
- --------------------------------------------------------------------------------
84
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
NOTES TO THE FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ADDITIONS REDUCTIONS
(000S) (000S)
----------- -----------
<S> <C> <C>
Balanced Growth Portfolio A..... $ 2,230 $ 3,697
Balanced Growth
Portfolio B.................... 1,681 250
Balanced Growth
Portfolio C.................... 4,383 5,164
Government Income Portfolio A... 1,161 1,377
Government Income Portfolio B... 1,748 564
Government Income Portfolio C... 3,080 2,500
Money Market Portfolio.......... 524,583 492,336
Emerging Countries Portfolio
A.............................. 35,237 4,526
Emerging Countries Portfolio
B.............................. 20,013 1,313
Emerging Countries Portfolio
C.............................. 24,511 2,328
International Small Cap Growth
Portfolio A.................... 4,460 346
International Small Cap Growth
Portfolio B.................... 3,703 512
International Small Cap Growth
Portfolio C.................... 3,600 1,244
International Core Growth
Portfolio A.................... 2 --
International Core Growth
Portfolio B.................... 1 --
International Core Growth
Portfolio C.................... 43 --
Worldwide Growth Portfolio A.... 11,830 14,258
Worldwide Growth Portfolio B.... 3,764 132
Worldwide Growth Portfolio C.... 12,726 22,530
</TABLE>
4. CREDIT FACILITY
The Portfolios participate with other Nicholas-Applegate Mutual Funds
portfolios in a $75 million unsecured redemption credit facility ("Facility") to
be utilized for temporary or emergency purposes, including the financing of
redemptions. In connection therewith, the Portfolios have agreed to pay
commitment fees on its pro rata portion of the Facility. Interest is charged to
the Portfolios at rates based on prevailing market rates in effect at the time
of borrowings. At March 31, 1997, there were no outstanding borrowing under the
Facility. The maximum amount borrowed under this line of credit at any time
during the period ended March 31, 1997 was $0.
- --------------------------------------------------------------------------------
85
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
NOTES TO THE FINANCIAL STATEMENTS -- Continued
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES FOR THE NICHOLAS-APPLEGATE INVESTMENT TRUST
MARCH 31, 1997
<TABLE>
<CAPTION>
EMERGING CORE INCOME & BALANCED
GROWTH GROWTH GROWTH GROWTH
FUND FUND FUND FUND
<S> <C> <C> <C> <C>
---------------------------------------------------------
ASSETS
Investments, at value*...... $ 513,702,221 $ 429,954,685 $ 133,124,390 $ 25,327,714
Foreign currencies, at
value**................... -- -- -- --
Cash........................ 7,296 -- 1,763 514
Receivable for investment
securities sold........... 5,647,577 6,131,600 427,413 1,058,379
Receivable for interests
sold...................... 1,685,096 1,205,089 202,752 15,798
Dividends receivable........ 104,509 74,306 105,839 6,081
Interest receivable......... 3,935 27,425 718,983 187,456
Due from advisor............ -- -- -- --
Deferred organization
costs..................... 14,447 16,342 8,103 5,779
Other assets................ 119,971 466 187 2,900
---------------------------------------------------------
Total assets.............. 521,285,052 437,409,913 134,589,430 26,604,621
---------------------------------------------------------
LIABILITIES
Payable for investment
securities purchased...... 5,620,659 3,198,970 3,069,606 1,446,188
Payable for interests
repurchased............... 13,505,243 936,646 733,123 118,699
Due to advisor.............. 447,116 301,517 90,595 13,802
Accrued expenses............ 149,501 170,271 44,704 13,962
Cash overdraft.............. -- 28,578 -- --
---------------------------------------------------------
Total liabilities......... 19,722,519 4,635,982 3,938,028 1,592,651
---------------------------------------------------------
NET ASSETS $ 501,562,533 $ 432,773,931 $ 130,651,402 $ 25,011,970
---------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital............. $ 344,243,025 $ 318,631,289 $ 85,728,279 $ 18,287,185
Accumulated net investment
income (deficit).......... (9,945,231) (2,250,183) 15,837,317 2,070,209
Accumulated net realized
gain (loss)............... 120,964,919 95,465,448 18,641,969 2,678,804
Accumulated net realized
foreign exchange gain
(loss).................... -- -- -- --
Net unrealized foreign
exchange gain (loss)...... -- -- -- --
Net unrealized appreciation
(depreciation) on
investments............... 46,299,820 20,927,377 10,443,837 1,975,772
---------------------------------------------------------
Net assets................ $ 501,562,533 $ 432,773,931 $ 130,651,402 $ 25,011,970
---------------------------------------------------------
*Investments, at cost........ $ 467,402,401 $ 409,027,308 $ 122,680,553 $ 23,351,942
---------------------------------------------------------
**Foreign currencies, at
cost......................... -- -- -- --
---------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
86
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL
GOVERNMENT EMERGING SMALL CAP INTERNATIONAL WORLDWIDE
INCOME MONEY MARKET COUNTRIES GROWTH CORE GROWTH GROWTH
FUND FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
ASSETS
Investments, at value*...... $6,645,508 $ 36,381,250 $ 148,615,133 $ 60,125,918 $4,959,420 $ 104,555,910
Foreign currencies, at
value**................... -- -- 10,253,752 1,140,629 104,781 938,477
Cash........................ 8,743 736 -- -- -- --
Receivable for investment
securities sold........... 43,062 -- 14,065,771 2,505,675 231,643 5,612,574
Receivable for interests
sold...................... 29,252 -- 1,060,310 196,701 8,988 343,764
Dividends receivable........ 685 -- 130,452 81,043 5,387 184,526
Interest receivable......... 87,624 2,110 2,235 -- 21 514
Due from advisor............ 5,359 2,000 -- -- 595 25,043
Deferred organization
costs..................... 5,316 4,553 -- 529 -- 6,630
Other assets................ 4 88 2,706 -- -- --
---------------------------------------------------------------------------------------
Total assets.............. 6,825,553 36,390,737 174,130,359 64,050,495 5,310,835 111,667,438
---------------------------------------------------------------------------------------
LIABILITIES
Payable for investment
securities purchased...... 523,378 -- 13,826,788 489,820 557,913 4,518,099
Payable for interests
repurchased............... 9,501 -- 353,188 7,959 -- 311,556
Due to advisor.............. 24,688 17,137 151,114 25,225 -- 88,419
Accrued expenses............ 14,381 25,009 27,618 35,528 4,995 87,583
Cash overdraft.............. -- -- 1,434,767 605,419 79,051 2,846,405
---------------------------------------------------------------------------------------
Total liabilities......... 571,948 42,146 15,793,475 1,163,951 641,959 7,852,062
---------------------------------------------------------------------------------------
NET ASSETS $6,253,605 $ 36,348,591 $ 158,336,884 $ 62,886,544 $4,668,876 $ 103,815,376
---------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital............. $5,346,086 $ 36,348,919 $ 141,911,478 $ 53,544,182 $4,480,421 $ 67,019,886
Accumulated net investment
income (deficit).......... 1,088,938 -- (294,130) (52,729) 2,864 264,027
Accumulated net realized
gain (loss)............... (58,511) (328) 11,593,258 2,950,994 142,256 23,282,898
Accumulated net realized
foreign exchange gain
(loss).................... -- -- (138,069) (6,280) (13,888) 573,896
Net unrealized foreign
exchange gain (loss)...... -- -- (12,587) (6,666) (1,322) (24,280)
Net unrealized appreciation
(depreciation) on
investments............... (122,908) -- 5,276,934 6,457,043 58,545 12,698,949
---------------------------------------------------------------------------------------
Net assets................ $6,253,605 $ 36,348,591 $ 158,336,884 $ 62,886,544 $4,668,876 $ 103,815,376
---------------------------------------------------------------------------------------
*Investments, at cost........ $6,768,417 $ 36,381,250 $ 143,338,199 $ 53,668,875 $4,900,875 $ 91,856,961
---------------------------------------------------------------------------------------
**Foreign currencies, at
cost........................ -- -- $ 10,125,382 $ 1,140,493 $ 103,656 $ 939,277
---------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
87
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
NOTES TO THE FINANCIAL STATEMENTS -- Continued
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS FOR NICHOLAS-APPLEGATE INVESTMENT TRUST
FOR THE YEAR ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
EMERGING CORE INCOME & BALANCED
GROWTH GROWTH GROWTH GROWTH
FUND FUND FUND FUND
<S> <C> <C> <C> <C>
--------------------------------------------------------------------
INVESTMENT INCOME:
Dividends................... $ 889,913 $ 1,091,361 $ 1,998,357 $ 62,192
Interest.................... 1,793,613 1,536,884 3,344,440 847,653
--------------------------------------------------------------------
Total income............ 2,683,526 2,628,245 5,342,797 909,845
--------------------------------------------------------------------
EXPENSES:
Advisory fee.............. 5,836,182 3,594,196 902,615 196,321
Accounting fee............ 227,961 205,513 82,626 65,767
Administration fee........ 34,905 138,879 34,823 7,596
Audit & tax fees.......... 105,901 87,431 20,549 6,121
Custodian fee............. 144,315 104,051 37,891 27,971
Insurance................. 10,843 4,479 1,013 152
Legal fee................. 11,605 6,337 2,606 345
Miscellaneous............. 39,817 32,328 7,917 2,957
Organization costs........ 8,515 15,542 7,709 5,501
Trustees' fee............. 6,500 6,500 6,500 4,000
--------------------------------------------------------------------
Total expense........... 6,426,544 4,195,256 1,104,249 316,731
Less: Reimbursement to
(from) advisor.......... -- -- 39,067 (68,056)
--------------------------------------------------------------------
Net expenses............ 6,426,544 4,195,256 1,143,316 248,675
--------------------------------------------------------------------
Net investment income
(deficit)........... (3,743,018) (1,567,011) 4,199,481 661,170
--------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss)
from security
transactions.............. 96,622,117 76,538,109 15,692,945 1,969,019
Net realized foreign
exchange (loss)........... -- -- -- --
Net unrealized foreign
exchange (loss)........... -- -- -- --
Change in net unrealized
appreciation
(depreciation) of
investments............... (114,330,357) (67,826,297) (3,821,355) (768,824)
--------------------------------------------------------------------
Net gain (loss) on
investments........... (17,708,240) 8,711,812 11,871,590 1,200,195
--------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING
FROM OPERATIONS............. $ (21,451,258) $ 7,144,801 $ 16,071,071 $ 1,861,365
--------------------------------------------------------------------
</TABLE>
- -------------
+ Commenced operations on December 27, 1996.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
88
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL INTERNATIONAL
GOVERNMENT MONEY EMERGING SMALL CAP CORE WORLDWIDE
INCOME MARKET COUNTRIES GROWTH GROWTH GROWTH
FUND FUND FUND FUND FUND+ FUND
<S> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends................... -- -- $ 679,747 $ 426,462 $ 5,637 $ 891,102
Interest.................... $ 367,834 $ 960,138 149,808 54,657 4,958 61,483
----------------------------------------------------------------------------------------------
Total income............ 367,834 960,138 829,555 481,119 10,595 952,585
----------------------------------------------------------------------------------------------
EXPENSES:
Advisory fee.............. 23,112 44,318 915,695 477,212 5,726 1,028,250
Accounting fee............ 63,694 66,579 93,917 75,496 1,158 74,912
Administration fee........ 1,661 4,922 20,598 13,683 152 29,846
Audit & tax fees.......... 1,016 2,251 9,384 7,953 158 18,808
Custodian fee............. 17,758 25,866 98,062 72,779 3,985 122,467
Insurance................. 110 43 204 259 -- 1,086
Legal fee................. 78 364 1,393 656 7 1,361
Miscellaneous............. 375 923 3,908 2,982 44 6,871
Organization costs........ 5,059 4,938 -- 299 -- 6,296
Trustees' fee............. 6,500 6,500 6,500 6,500 2,197 6,500
----------------------------------------------------------------------------------------------
Total expense........... 119,363 156,704 1,149,661 657,819 13,427 1,296,397
Less: Reimbursement to
(from) advisor.......... (84,903) (76,932) 22,429 (13,583) (5,696) (62,497)
----------------------------------------------------------------------------------------------
Net expenses............ 34,460 79,772 1,172,090 644,236 7,731 1,233,900
----------------------------------------------------------------------------------------------
Net investment income
(deficit)........... 333,374 880,366 (342,535) (163,117) 2,864 (281,315)
----------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss)
from security
transactions.............. (56,975) (4) 11,849,728 3,140,492 142,256 15,788,457
Net realized foreign
exchange (loss)........... -- -- (113,212) (171,484) (13,888) (333,967)
Net unrealized foreign
exchange (loss)........... -- -- (12,593) (4,450) (1,322) (21,431)
Change in net unrealized
appreciation
(depreciation) of
investments............... (49,150) -- 3,898,413 3,921,418 58,545 (2,434,302)
----------------------------------------------------------------------------------------------
Net gain (loss) on
investments........... (106,125) (4) 15,622,336 6,885,976 185,591 12,998,757
----------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING
FROM OPERATIONS............. $ 227,249 $ 880,362 $ 15,279,801 $ 6,722,859 $ 188,455 $ 12,717,442
----------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
89
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
NOTES TO THE FINANCIAL STATEMENTS -- Continued
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS FOR NICHOLAS-APPLEGATE INVESTMENT TRUST
<TABLE>
<CAPTION>
EMERGING GROWTH FUND CORE GROWTH FUND
------------------------------- -------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, 1997 MARCH 31, 1996 MARCH 31, 1997 MARCH 31, 1996
<S> <C> <C> <C> <C>
-----------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS
Net investment income
(deficit)................. $ (3,743,018) $ (2,945,373) $ (1,567,011) $ (752,357)
Net realized gain (loss)
from security
transactions.............. 96,622,117 78,797,996 76,538,109 50,587,998
Net realized foreign
exchange gain (loss)...... -- -- -- --
Net unrealized foreign
exchange gain (loss)...... -- -- -- --
Change in net unrealized
appreciation
(depreciation) of
investments............... (114,330,357) 91,635,716 (67,826,297) 52,583,826
-----------------------------------------------------------------
Net increase (decrease) in
net assets resulting
from operations......... (21,451,258) 167,488,339 7,144,801 102,419,467
-----------------------------------------------------------------
DISTRIBUTIONS TO PARTNERS
Net investment income....... -- -- -- --
-----------------------------------------------------------------
TRANSACTIONS IN INTERESTS
Contributions by partners... 626,817,132 107,044,506 158,154,505 113,757,799
Withdrawals by partners..... (687,889,723) (161,495,614) (153,067,978) (79,489,585)
-----------------------------------------------------------------
Net increase (decrease) in
net assets from
transactions in
interests............... (61,072,591) (54,451,108) 5,086,527 34,268,214
-----------------------------------------------------------------
Total increase
(decrease) in net
assets................ (82,523,849) 113,037,231 12,231,328 136,687,681
NET ASSETS
BEGINNING OF PERIOD......... 584,086,382 471,049,151 420,542,603 283,854,922
-----------------------------------------------------------------
END OF PERIOD............... $ 501,562,533 $ 584,086,382 $ 432,773,931 $ 420,542,603
-----------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
90
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
BALANCED GROWTH FUND GOVERNMENT INCOME FUND
INCOME & GROWTH FUND ----------------------------- ---------------------------
------------------------------- FOR THE FOR THE FOR THE FOR THE
FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
YEAR ENDED YEAR ENDED MARCH 31, MARCH 31, MARCH 31, MARCH 31,
MARCH 31, 1997 MARCH 31, 1996 1997 1996 1997 1996
<S> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS
Net investment income
(deficit)................. $ 4,199,481 $ 4,142,172 $ 661,170 $ 638,909 $ 333,374 $ 291,713
Net realized gain (loss)
from security
transactions.............. 15,692,945 10,319,301 1,969,019 2,837,068 (56,975) 363,388
Net realized foreign
exchange gain (loss)...... -- -- -- -- -- --
Net unrealized foreign
exchange gain (loss)...... -- -- -- -- -- --
Change in net unrealized
appreciation
(depreciation) of
investments............... (3,821,355) 10,732,341 (768,824) 742,010 (49,150) (175,424)
---------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets resulting
from operations......... 16,071,071 25,193,814 1,861,365 4,217,987 227,249 479,677
---------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PARTNERS
Net investment income....... -- -- -- -- -- --
---------------------------------------------------------------------------------------------
TRANSACTIONS IN INTERESTS
Contributions by partners... 34,105,984 15,608,507 8,738,263 4,914,004 5,988,848 3,577,045
Withdrawals by partners..... (31,283,589) (35,130,807) (9,432,209) (7,102,941) (4,440,486) (4,912,231)
---------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets from
transactions in
interests............... 2,822,395 (19,522,300) (693,946) (2,188,937) 1,548,362 (1,335,186)
---------------------------------------------------------------------------------------------
Total increase
(decrease) in net
assets................ 18,893,466 5,671,514 1,167,419 2,029,050 1,775,611 (855,509)
NET ASSETS
BEGINNING OF PERIOD......... 111,757,936 106,086,422 23,844,551 21,815,501 4,477,994 5,333,503
---------------------------------------------------------------------------------------------
END OF PERIOD............... $ 130,651,402 $ 111,757,936 $ 25,011,970 $ 23,844,551 $ 6,253,605 $ 4,477,994
---------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
91
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
NOTES TO THE FINANCIAL STATEMENTS -- Continued
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS FOR NICHOLAS-APPLEGATE INVESTMENT TRUST
<TABLE>
<CAPTION>
EMERGING COUNTRIES FUND
MONEY MARKET FUND ------------------------------
-------------------------------- FOR THE
FOR THE FOR THE FOR THE YEAR ENDED
YEAR ENDED YEAR ENDED YEAR ENDED MARCH 31,
MARCH 31, 1997 MARCH 31, 1996 MARCH 31, 1997 1996
<S> <C> <C> <C> <C>
-----------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS
Net investment income
(deficit)................. $ 880,366 $ 200,767 $ (342,535) $ 26,122
Net realized gain (loss)
from security
transactions.............. (4) (325) 11,849,728 (35,846)
Net realized foreign
exchange gain (loss)...... -- -- (113,212) (25,318)
Net unrealized foreign
exchange gain (loss)...... -- -- (12,593) (1,712)
Change in net unrealized
appreciation
(depreciation) of
investments............... -- -- 3,898,413 1,753,151
-----------------------------------------------------------------
Net increase (decrease) in
net assets resulting
from operations......... 880,362 200,442 15,279,801 1,716,397
-----------------------------------------------------------------
DISTRIBUTIONS TO PARTNERS
Net investment income....... (880,366) (200,767) -- --
-----------------------------------------------------------------
TRANSACTIONS IN INTERESTS
Contributions by partners... 525,513,379 22,251,491 143,835,272 16,175,253
Withdrawals by partners..... (492,338,631) (22,108,039) (20,677,175) (1,272,742)
-----------------------------------------------------------------
Net increase (decrease) in
net assets from
transactions in
interests............... 33,174,748 143,452 123,158,097 14,902,511
-----------------------------------------------------------------
Total increase
(decrease) in net
assets................ 33,174,744 143,127 138,437,898 16,618,908
NET ASSETS
BEGINNING OF PERIOD......... 3,173,847 3,030,720 19,898,986 3,280,078
-----------------------------------------------------------------
END OF PERIOD............... $ 36,348,591 $ 3,173,847 $ 158,336,884 $ 19,898,986
-----------------------------------------------------------------
</TABLE>
- -------------
+ Commenced operations on December 27, 1996.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
92
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL
INTERNATIONAL SMALL CAP CORE GROWTH
GROWTH FUND FUND
----------------------------- ------------ WORLDWIDE GROWTH FUND
FOR THE FOR THE FOR THE -------------------------------
YEAR ENDED YEAR ENDED PERIOD ENDED FOR THE FOR THE
MARCH 31, MARCH 31, MARCH 31, YEAR ENDED YEAR ENDED
1997 1996 1997+ MARCH 31, 1997 MARCH 31, 1996
<S> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS
Net investment income
(deficit)................. $ (163,117) $ 73,015 $ 2,864 $ (281,315) $ 299,362
Net realized gain (loss)
from security
transactions.............. 3,140,492 61,956 142,256 15,788,457 8,223,209
Net realized foreign
exchange gain (loss)...... (171,484) 197,499 (13,888) (333,967) 792,348
Net unrealized foreign
exchange gain (loss)...... (4,450) 1,753 (1,322) (21,431) 585
Change in net unrealized
appreciation
(depreciation) of
investments............... 3,921,418 2,583,077 58,545 (2,434,302) 9,091,332
------------------------------------------------------------------------------
Net increase (decrease) in
net assets resulting
from operations......... 6,722,859 2,917,300 188,455 12,717,442 18,406,836
------------------------------------------------------------------------------
DISTRIBUTIONS TO PARTNERS
Net investment income....... -- -- -- -- --
------------------------------------------------------------------------------
TRANSACTIONS IN INTERESTS
Contributions by partners... 37,692,390 6,044,445 4,487,783 34,174,758 17,650,729
Withdrawals by partners..... (5,334,333) (2,768,514) (7,362) (43,419,850) (33,276,911)
------------------------------------------------------------------------------
Net increase (decrease) in
net assets from
transactions in
interests............... 32,358,057 3,275,931 4,480,421 (9,245,092) (15,626,182)
------------------------------------------------------------------------------
Total increase
(decrease) in net
assets................ 39,080,916 6,193,231 4,668,876 3,472,350 2,780,654
NET ASSETS
BEGINNING OF PERIOD......... 23,805,628 17,612,397 -- 100,343,026 97,562,372
------------------------------------------------------------------------------
END OF PERIOD............... $ 62,886,544 $ 23,805,628 $ 4,668,876 $ 103,815,376 $ 100,343,026
------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
93
<PAGE>
NICHOLAS-APPLEGATE INVESTMENT TRUST
NOTES TO THE FUND'S FINANCIAL STATEMENTS
- ------------------------------------------------------------------------
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 seventeen investment vehicles (each a "Fund" and collectively
the "Funds") as of March 31, 1997. Up to five Portfolios of Nicholas-Applegate
Mutual Funds invest in the respective Funds of the Master Trust to achieve their
investment objective.
The investment objectives of the Funds are as follows:
Emerging Growth Fund seeks to maximize long-term capital appreciation through
investment primarily in equity securities of U.S. companies with less than $500
million in market capitalization.
Core Growth Fund seeks to maximize long-term capital appreciation through
investment primarily in U.S. companies, generally over $500 million in total
stock market value.
Income & Growth Fund seeks to maximize total return through investment
primarily in convertible and equity securities of U.S. companies.
Balanced Growth Fund seeks to provide a balance of long-term capital
appreciation and current income by investing approximately 60% of its total
assets in equity and convertible securities of primarily U.S. companies and 40%
of its total assets in debt securities, money market instruments and other
short-term investments.
Government Income Fund seeks to maximize current income through investment
primarily in intermediate-term debt securities of the U.S. government and its
agencies and instrumentalities.
Money Market Fund seeks to achieve a high level of current income consistent
with preservation of capital and maintenance of liquidity through investment in
investment grade securities with an average maturity of 90 days.
Emerging Countries Fund seeks to maximize long-term capital appreciation
through investment primarily in equity securities of companies in developing
countries of the world.
International Small Cap Growth Fund (formerly International Growth Fund) seeks
to maximize long-term capital appreciation through investment primarily in
equity securities of international companies with smaller to middle market
capitalizations.
International Core Growth Fund seeks to maximize long-term capital
appreciation through investment primarily in equity securities of international
companies with larger market capitalizations.
Worldwide Growth Fund seeks to maximize long-term capital appreciation through
investment primarily in growth stocks of U.S. and foreign companies.
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 (net of foreign taxes withheld when applicable) is
recognized on the ex-dividend date, and interest income is recorded on the
- --------------------------------------------------------------------------------
94
<PAGE>
NICHOLAS-APPLEGATE INVESTMENT TRUST
NOTES TO THE FUND'S FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
accrual basis. Discounts and premiums on securities purchased are amortized over
the life of the respective securities.
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 are amortized over a period of 60
months from the date the Funds commenced operations.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
B. TRANSACTIONS WITH AFFILIATES
ADVISORY AGREEMENTS
The investment adviser to the Master Trust is Nicholas-Applegate Capital
Management ("Nicholas-Applegate"). The advisory fee is computed daily based upon
the following annual percentages of each Fund's average daily net assets:
<TABLE>
<CAPTION>
FIRST $500 NEXT $500 EXCESS OF
FUND MILLION MILLION $1 BILLION
- ---------------------------- ----------- ----------- -----------
<S> <C> <C> <C>
Emerging Growth Fund........ 1.00% 1.00% 1.00%
Core Growth Fund............ 0.75% 0.675% 0.65%
Income & Growth Fund........ 0.75% 0.675% 0.65%
Balanced Growth Fund........ 0.75% 0.675% 0.65%
Government Income Fund...... 0.40% 0.35% 0.35%
Money Market Fund........... 0.25% 0.2275% 0.2275%
Emerging Countries Fund..... 1.25% 1.25% 1.25%
International Small Cap
Growth Fund............... 1.00% 0.90% 0.85%
International Core Growth
Fund...................... 1.00% 0.90% 0.85%
Worldwide Growth Fund....... 1.00% 0.90% 0.85%
</TABLE>
EXPENSE LIMITATIONS
Nicholas-Applegate and the Master Trust have undertaken to limit the Funds'
and Portfolios' expenses to certain annual levels through March 31, 1998. In
subsequent years, overall operating expenses for each Fund will not fall below
the percentage limitation until the Investment Adviser has been fully reimbursed
for fees foregone and expenses paid by the Investment Adviser under this
agreement, as each Fund will reimburse the Investment Adviser in subsequent
years when operating expenses (before reimbursement) are less than the
applicable percentage limitation.
The cumulative unreimbursed amounts paid by Nicholas-Applegate on behalf of
the Funds, during the period from inception (respectively) to March 31, 1997,
are as follows:
<TABLE>
<CAPTION>
FUND
- -----------------------------------------------
<S> <C>
Balanced Growth Fund........................... $ 312,927
Government Income Fund......................... 340,580
Money Market Fund.............................. 358,833
Emerging Countries Fund........................ 89,344
International Small Cap Growth Fund............ 209,240
International Core Growth Fund................. 5,696
Worldwide Growth Fund.......................... 296,420
</TABLE>
- --------------------------------------------------------------------------------
95
<PAGE>
NICHOLAS-APPLEGATE INVESTMENT TRUST
NOTES TO THE FUND'S FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
C. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of investment securities, other than
short-term obligations, for the fiscal year ended March 31, 1997, were as
follows (in 000's):
<TABLE>
<CAPTION>
FUND PURCHASES SALES
- -------------------------------- ----------- -----------
<S> <C> <C>
Emerging Growth Fund............ $ 618,124 $ 720,027
Core Growth Fund................ 698,508 689,415
Income & Growth Fund............ 201,594 192,617
Balanced Growth Fund............ 54,281 53,566
Government Income Fund.......... 33,624 31,669
Emerging Countries Fund......... 235,294 124,478
International Small Cap Growth
Fund.......................... 125,061 94,641
International Core Growth
Fund.......................... 6,103 1,669
Worldwide Growth Fund........... 181,284 188,408
</TABLE>
At March 31, 1997, the net unrealized appreciation (depreciation) based on the
cost of investments for Federal income tax purposes was as follows (in 000's):
<TABLE>
<CAPTION>
GROSS GROSS NET UNREALIZED
TAX COST OF UNREALIZED UNREALIZED APPRECIATION
FUND INVESTMENTS APPRECIATION DEPRECIATION (DEPRECIATION)
- ------------- ----------- ------------- ------------- ---------------
<S> <C> <C> <C> <C>
Emerging
Growth
Fund....... $ 468,068 $ 77,636 $ 32,001 $ 45,635
Core Growth
Fund....... 409,134 43,158 22,337 20,821
Income &
Growth
Fund....... 122,709 12,275 1,859 10,416
Balanced
Growth
Fund....... 23,352 2,780 804 1,976
Government
Income
Fund....... 6,768 -- 123 (123)
Money Market
Fund....... 36,381 -- -- --
Emerging
Countries
Fund....... 143,340 10,716 5,441 5,275
International
Small Cap
Growth
Fund....... 53,734 8,139 1,747 6,392
International
Core Growth
Fund....... 4,907 161 108 53
Worldwide
Growth
Fund....... 91,969 15,291 2,704 12,587
</TABLE>
D. MARKET AND CREDIT RISKS AND DERIVATIVE INSTRUMENTS
The Master Trust's 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 Master Trust's policy to
continuously monitor its exposure to these risks.
Some of the Funds may utilize forward foreign currency exchange contracts as
part of their strategy of preserving capital. Upon entering into forward foreign
currency contracts, the Funds are required to deposit with the broker an amount
of cash or cash equivalents equal to the amount of the contract. The daily
changes in the contract are recorded as unrealized gains or losses. The Funds
recognize a realized gain or loss when the contract is sold.
- --------------------------------------------------------------------------------
96
<PAGE>
NICHOLAS-APPLEGATE INVESTMENT TRUST
NOTES TO THE FUNDS' FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
E. SELECTED RATIO DATA
<TABLE>
<CAPTION>
RATIO OF NET
INVESTMENT RATIO OF NET
RATIO OF RATIO OF INCOME INVESTMENT
EXPENSES TO EXPENSES TO (DEFICIT) TO INCOME (DEFICIT)
AVERAGE NET AVERAGE NET AVERAGE NET TO AVERAGE NET
ASSETS, ASSETS, ASSETS, AFTER ASSETS, BEFORE
AFTER BEFORE EXPENSE EXPENSE BROKER
REIMBURSEMENTS REIMBURSEMENTS REIMBURSEMENTS REIMBURSEMENTS PORTFOLIO COMMISSIONS
(RECOUPMENT) (RECOUPMENT) (RECOUPMENT) (RECOUPMENT) TURNOVER RATE PER SHARE
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
EMERGING GROWTH(1)
For the year ended
03/31/97.................. 1.10% 1.10% (0.64%) (0.64%) 112.90% $0.0520
For the year ended
03/31/96.................. 1.11% 1.11% (0.57%) (0.57%) 129.59% $0.0523
For the year ended
03/31/95.................. 1.12% 1.11% (0.53%) (0.52%) 100.46% --
For the period ended
03/31/94*................. 1.12% 1.16% (0.80%) (0.84%) 50.51% --
CORE GROWTH(2)
For the year ended
03/31/97.................. 0.88% 0.88% (0.33%) (0.33%) 153.20% $0.0582
For the year ended
03/31/96.................. 0.89% 0.89% (0.22%) (0.22%) 114.48% $0.0593
For the year ended
03/31/95.................. 0.89% 0.89% 0.05% 0.05% 98.09% --
For the period ended
03/31/94*................. 0.92% 0.92% (0.03%) (0.03%) 84.84% --
INCOME & GROWTH(2)
For the year ended
03/31/97.................. 0.95% 0.92% 3.49% 3.52% 166.84% $0.0154
For the year ended
03/31/96.................. 0.95% 0.94% 3.94% 3.94% 144.97% $0.0597
For the year ended
03/31/95.................. 0.93% 0.95% 4.37% 4.35% 125.51% --
For the period ended
03/31/94*................. 0.94% 0.97% 3.51% 3.48% 177.52% --
BALANCED GROWTH(2)
For the year ended
03/31/97.................. 0.95% 1.21% 2.53% 2.27% 212.95% $0.0586
For the year ended
03/31/96.................. 0.95% 1.37% 2.83% 2.37% 197.19% $0.0594
For the year ended
03/31/95.................. 0.95% 1.33% 2.13% 1.75% 110.40% --
For the period ended
03/31/94*................. 0.94% 1.37% 1.93% 1.50% 85.43% --
GOVERNMENT INCOME FUND(2)
For the year ended
03/31/97.................. 0.60% 2.07% 5.77% 4.30% 573.72% --
For the year ended
03/31/96.................. 0.60% 2.75% 6.12% 4.00% 190.47% --
For the year ended
03/31/95.................. 0.80% 2.21% 5.32% 3.91% 258.72% --
For the period ended
03/31/94*................. 0.80% 2.80% 3.43% 1.43% 159.17% --
MONEY MARKET FUND(2)
For the year ended
03/31/97.................. 0.45% 0.88% 4.97% 4.53% n/a --
For the year ended
03/31/96.................. 0.45% 3.20% 5.34% 2.59% n/a --
For the year ended
03/31/95.................. 0.31% 3.23% 4.61% 1.69% n/a --
For the period ended
03/31/94*................. 0.24% 151.02% 2.12% (148.66%) n/a --
EMERGING COUNTRIES FUND(3)
For the year ended
03/31/97.................. 1.60% 1.57% (0.47%) (0.44%) 176.20% $0.0021
For the year ended
03/31/96.................. 1.60% 2.80% 0.30% (0.90%) 118.21% $0.0022
For the period ended
03/31/95*................. 1.60% 1.81% 1.73% 1.52% 60.79% --
INTERNATIONAL SMALL CAP GROWTH
FUND(4)
For the year ended
03/31/97.................. 1.35% 1.38% (0.34%) (0.37%) 206.07% $0.0098
For the year ended
03/31/96.................. 1.35% 1.98% 0.39% (0.24%) 141.02% $0.0128
For the year ended
03/31/95.................. 1.35% 1.85% 0.24% (0.26%) 74.88% --
For the period ended
03/31/94*................. 1.35% 2.28% 0.41% (0.52%) 23.71% --
INTERNATIONAL CORE GROWTH
FUND(5)
For the period ended
03/31/97*................. 1.29% 2.25% 0.48% (0.47%) 75.53% $0.0106
WORLDWIDE GROWTH FUND(2)
For the year ended
03/31/97.................. 1.20% 1.26% (0.27%) (0.33%) 181.81% $0.0078
For the year ended
03/31/96.................. 1.20% 1.26% 0.31% 0.25% 132.20% $0.0187
For the year ended
03/31/95.................. 1.20% 1.30% 0.24% 0.14% 98.54% --
For the period ended
03/31/94*................. 1.20% 1.36% 0.01% (0.15%) 95.09% --
</TABLE>
- --------------------
(1) Commenced operations on October 1, 1993.
(2) Commenced operations on April 19, 1993.
(3) Commenced operations on November 28, 1994.
(4) Commenced operations on December 31, 1993.
(5) Commenced operations on December 27, 1996.
* Annualized
- --------------------------------------------------------------------------------
97
<PAGE>
REPORT OF INDEPENDENT AUDITORS
- ------------------------------------------------------------------------
ERNST & YOUNG LLP
515 SOUTH FLOWER STREET
LOS ANGELES, CALIFORNIA 90071
PHONE: 213 977 3200
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
NICHOLAS-APPLEGATE MUTUAL FUNDS
We have audited the accompanying statements of assets and liabilities of the
Series A, B and C Portfolios of Nicholas-Applegate Mutual Funds (comprising
respectively, Emerging Growth Portfolios A, B and C, Core Growth Portfolios A,
B, and C, Income and Growth Portfolios A, B and C, Balanced Growth Portfolios A,
B and C, Government Income Portfolios A, B and C, Money Market Portfolio,
Emerging Countries Portfolios A, B and C, International Small Cap Growth
(formerly "International Growth") Portfolios A, B and C, International Core
Growth Portfolios A, B and C, and Worldwide Growth Portfolios A, B and C)
(hereinafter the "Portfolios"), as of March 31, 1997, and the related statements
of operations for the fiscal year then ended, and the statements of changes in
net assets and the financial highlights for each of the two fiscal years in the
period then ended, except for International Core Growth Portfolios A, B and C
which are for the fiscal year then ended. These financial statements and
financial highlights are the responsibility of the Portfolios' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The financial highlights for each of
the two fiscal years in the period ended March 31, 1995 were audited by other
auditors whose report dated May 12, 1995 expressed an unqualified opinion on
those financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and the 1996 and 1997 financial
highlights referred to above present fairly, in all material respects, the
financial position of each of the respective series A, B and C Portfolios of
Nicholas-Applegate Mutual Funds as of March 31, 1997, the results of their
operations for the fiscal year then ended, and changes in their net assets and
the financial highlights for each of the two fiscal years in the period then
ended, as described in the first paragraph, in conformity with generally
accepted accounting principles.
/s/ Ernst & Young LLP
May 13, 1997
- --------------------------------------------------------------------------------
98
<PAGE>
REPORT OF INDEPENDENT AUDITORS
- ------------------------------------------------------------------------
ERNST & YOUNG LLP
515 SOUTH FLOWER STREET
LOS ANGELES, CALIFORNIA 90071
PHONE: 213 977 3200
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
NICHOLAS-APPLEGATE INVESTMENT TRUST
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of the following series of
Nicholas-Applegate Investment Trust: Emerging Growth Fund, Core Growth Fund,
Income & Growth Fund, Balanced Growth Fund, Government Income Fund, Money Market
Fund, Emerging Countries Fund, International Small Cap Growth Fund (formerly
"International Growth Fund"), International Core Growth Fund, and Worldwide
Growth Fund (hereinafter the "Funds") as of March 31, 1997, and the related
statements of operations for the fiscal year then ended, and the statements of
changes in net assets for each of the two fiscal years in the period then ended,
except for International Core Growth Fund which is for the fiscal year then
ended. These financial statements are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements based on our audits. The selected ratio data for each of the two
fiscal years in the period ended March 31, 1995 were audited by other auditors
whose report dated May 12, 1995 expressed an unqualified opinion on those
selected ratio data.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of March 31, 1997, by correspondence with
the custodians and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of each of the respective Funds of
Nicholas-Applegate Investment Trust as of March 31, 1997, the results of their
operations for the fiscal year then ended, and changes in their net assets for
each of the two fiscal years in the period then ended as described in the first
paragraph, in conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
May 13, 1997
- --------------------------------------------------------------------------------
99
<PAGE>
TRUSTEES OF NICHOLAS-APPLEGATE MUTUAL FUNDS
-------------------------------------------
Fred C. Applegate, CHAIRMAN
Dr. Arthur B. Laffer
Charles E. Young
OFFICERS
--------
John D. Wylie, PRESIDENT
Peter J. Johnson, VICE PRESIDENT
Thomas Pindelski, TREASURER
E. Blake Moore, Jr., SECRETARY
TRUSTEES OF NICHOLAS-APPLEGATE INVESTMENT TRUST
-----------------------------------------------
Arthur E. Nicholas, CHAIRMAN
Dann V. Angeloff
Walter A. Auch
Theodore J. Coburn
Darlene T. DeRemer
George F. Keane
INVESTMENT MANAGER
------------------
Nicholas-Applegate Capital Management
DISTRIBUTOR
-----------
Nicholas-Applegate Securities
CUSTODIAN
---------
PNC Bank
TRANSFER AGENT
--------------
State Street Bank & Trust Company
<PAGE>
NICHOLAS|APPLEGATE MUTUAL FUNDS
GLOBAL FUNDS
WORLDWIDE GROWTH
----------------
Portfolios A, B and C
INTERNATIONAL SMALL CAP GROWTH
------------------------------
Portfolios A, B and C
EMERGING COUNTRIES
------------------
Portfolios A, B and C
INTERNATIONAL CORE GROWTH
-------------------------
Portfolios A, B and C
DOMESTIC FUNDS
CORE GROWTH
-----------
Portfolios A, B and C
EMERGING GROWTH
---------------
Portfolios A, B and C
INCOME & GROWTH
---------------
Portfolios A, B and C
BALANCED GROWTH
---------------
Portfolios A, B and C
GOVERNMENT INCOME
-----------------
Portfolios A, B and C
NICHOLAS|APPLEGATE -Registered Trademark-
MUTUAL FUNDS
600 West Broadway
San Diego, California 92101
800-551-8043
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