<PAGE>
NICHOLAS-APPLEGATE-Registered Trademark-
MUTUAL FUNDS SEMI-ANNUAL REPORT
[PICTURE OF GLOBES]
PORTFOLIOS A, B, AND C : SEPTEMBER 30, 1997
<PAGE>
PERHAPS THE SIMPLEST WAY TO
UNDERSTAND THE NATURE OF
TODAY'S INVESTMENT CLIMATE IS
TO EXAMINE A GLOBE.
[PICTURE OF GLOBES]
<PAGE>
THERE'S MORE TO IT THAN MEETS THE EYE.
[PICTURE OF GLOBES]
A new era of exploration beckons as the 21st century approaches.
Opportunities for global investors are dramatically increasing as goods,
services and capital cross international borders more freely than ever. At
the same time, dynamic small and mid-size U.S. companies continue to offer
numerous possibilities for impressive growth. Along with these opportunities
come increased risks, including currency fluctuations, political developments
and the greater volatility associated with overseas and small company
investments.* Expert management is crucial to navigating around these risks
toward potentially higher returns.
*IN RETURN FOR THEIR ABOVE AVERAGE GROWTH POTENTIAL, THE STOCKS OF SMALLER
COMPANIES MAY ENTAIL SIGNIFICANTLY GREATER PRICE VARIABILITY THAN THOSE OF
LARGER COMPANIES.
THIS REPORT IS AUTHORIZED FOR DISTRIBUTION TO SHAREHOLDERS AND TO OTHERS WHEN
PRECEDED OR ACCOMPANIED BY A CURRENTLY EFFECTIVE PROSPECTUS FOR
NICHOLAS-APPLEGATE MUTUAL FUNDS. DISTRIBUTOR: NICHOLAS-APPLEGATE SECURITIES.
<PAGE>
Nicholas-Applegate is at the forefront of discovery. We look beneath the
surface of an investment to see its full potential, whether at home or abroad.
It's the cornerstone of our growing reputation as the global fund manager of
choice.
WHY INVEST GLOBALLY?
- - You can reduce exposure to risk and increase opportunities for long-term
returns by diversifying your investments.
- - Even though markets of different countries operate independently, the
global marketplace is becoming one interconnected financial community.
- - Markets outside the U.S. account for over 50% of world capitalization and
their share keeps growing.
[PICTURE OF A GLOBE]
WHY NICHOLAS-APPLEGATE?
By expanding our global reach, Nicholas-Applegate can help you find promising
investments worldwide. We do this by adhering to our proven and disciplined
investment style:
- - A bottom-up selection of companies that show they can adapt to changing
market conditions.
- - An open-office environment for our portfolio management team, which fosters
the free exchange of timely information.
<PAGE>
- - Our proprietary research system, which tracks over 26,000 companies
throughout the world.
- - An innovative exchange program that brings stock experts from overseas
markets into our offices and sends our analysis to theirs, providing
first-hand knowledge that helps us find investment opportunities throughout
the world.
IT WORKS.
Consider our record. Nicholas-Applegate adheres to our investment
discipline built on a few key tenets:
- Never stray from our long-term objectives to pursue short-term results.
- Select only stocks which meet our investment criteria.
- Stay fully invested, keeping all of your money at work all of the
time.
[PICTURE OF A GLOBE]
At Nicholas-Applegate, we know there's more to global investing than what
appears on the surface. To explore the world's markets with confidence, you
need to know how your investment will be managed. That's why you're with
Nicholas-Applegate. We understand how to navigate the world marketplace--and
that can make a world of difference to you.
<PAGE>
TABLE OF CONTENTS
- ------------------------------------------------------------------------
<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
Large Cap Growth...................................................... 20
Balanced Growth....................................................... 23
Government Income..................................................... 29
Money Market.......................................................... 32
Emerging Countries.................................................... 34
International Small Cap Growth........................................ 40
International Core Growth............................................. 46
Worldwide Growth...................................................... 52
The Portfolios'
Financial Highlights.................................................. 58
Statements of Assets and Liabilities.................................. 64
Statements of Operations.............................................. 70
Statements of Changes in Net Assets................................... 76
Notes to the Financial Statements..................................... 88
Notes to the Funds' Financial Statements................................ 101
</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,
We are pleased to bring you the semi-annual report of the Nicholas-Applegate
Mutual Funds for the six months ended September 30, 1997. This has been a period
during which global markets continued their steady upward climb. Within this
environment, small and mid-sized domestic companies have shown signs of renewed
vitality, providing favorable opportunities for growth style investing.
A combination of moderate economic growth, low inflation and increasing
corporate profits in the U.S. provided a positive environment for stocks as the
S&P 500 Index rose 26%. On the international front, the MSCI World Index
increased 18.34%. The economies of many European nations were restrained by
fiscal policies designed to help them meet European Monetary Union criteria.
Encouraged by lower interest rates resulting from these requirements, investors
bid many stock prices higher.
Many Latin American companies continue to benefit from the long-term
transition of government control to privatization. Our funds maintained an
overweighted position relative to the benchmark to take advantage of companies
benefiting from this trend. Conversely, Nicholas-Applegate maintained an
underweighted position in Asia to offset the effects of the Asian currency
crisis. Though we continued to find stocks benefiting from currency devaluation,
the funds eliminated their holdings in the Philippines, Malaysia, Indonesia and
Thailand by the end of the period to curtail exposure to unstable fiscal
conditions in this region.
Opportunities for global investors continue to increase. The pace at which
companies are expanding internationally is increasing daily as governments
reform their economies with free market initiatives. New investment
opportunities are constantly opening the door to new profits throughout the
world.
Nicholas-Applegate seeks maximum advantage of the market through its
disciplined, bottom-up investment style for each of our mutual funds. Our
portfolio managers do this on a stock-by-stock basis, actively seeking companies
which exhibit sustainable growth potential and adaptability to changing market
conditions. We employ the expertise of our analysts around the world, using the
most up-to-date financial technology.
Looking forward, we believe the long-term outlook for continued growth appears
positive. However, although the economy has enjoyed a favorable period, market
uncertainties will always persist. This prompts us to encourage individual
investors to maintain a long-term perspective which minimizes undue concern
caused by short-term market fluctuations. Nicholas-Applegate is committed to
helping you attain your long-term investment goals by diligently pursuing our
time-tested investment style.
Thank you for your continued support of Nicholas-Applegate Mutual Funds. We
welcome your comments and look forward to serving your investment needs in the
years ahead.
Sincerely,
[SIGNATURE]
John D. Wylie
President
Nicholas-Applegate Mutual Funds
- --------------------------------------------------------------------------------
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
DEC 1969 $1.00 $1.00 $1.00
<S> <C> <C> <C>
Dec 1970 1.121059215 1.0549164 0.825661484
Dec 1971 1.269371876 1.0903471 0.961892527
Dec 1972 1.341548263 1.1275496 1.004544102
Dec 1973 1.326700092 1.226754 0.694095606
Dec 1974 1.384471488 1.376446 0.555657342
Dec 1975 1.511786318 1.4729922 0.849132107
Dec 1976 1.765084762 1.5438525 1.33634258
Dec 1977 1.752937265 1.64837 1.675467221
Dec 1978 1.732297675 1.7971741 2.068551129
Dec 1979 1.710920777 2.0363232 2.967633147
Dec 1980 1.643397054 2.2887604 4.150984033
Dec 1981 1.67392721 2.4933678 4.727097865
Dec 1982 2.349546704 2.589908 6.050934266
Dec 1983 2.364859959 2.6882263 8.451243074
Dec 1984 2.730867828 2.7945158 7.887625237
Dec 1985 3.576530396 2.8998879 9.832862666
Dec 1986 4.453883483 2.9326524 10.50654155
Dec 1987 4.333002093 3.0619682 9.529705152
Dec 1988 4.752133652 3.1972889 11.70955501
Dec 1989 5.612965247 3.3458762 12.90143612
Dec 1990 5.95998744 3.5501842 10.11974905
Dec 1991 7.11022832 3.6589726 14.63662624
Dec 1992 7.682876394 3.7651067 18.05418764
Dec 1993 9.084266831 3.8685871 21.84168912
Dec 1994 8.378384135 3.9720702 22.52000493
Dec 1995 11.0316799 4.0728976 30.2804398
Dec 1996 10.93 4.21 35.62
Long-Term Government Bonds Inflation Small Company Stock International Stocks
Source: Ibbotson Associates
<CAPTION>
DEC 1969 $1.00 $1.00
<S> <C> <C>
Dec 1970 0.894879897 1.040065616
Dec 1971 1.174150171 1.188927419
Dec 1972 1.615611805 1.414539684
Dec 1973 1.386730661 1.20715054
Dec 1974 1.079598462 0.887643365
Dec 1975 1.480157725 1.217873832
Dec 1976 1.535504278 1.508253479
Dec 1977 1.833772011 1.399900469
Dec 1978 2.462774507 1.491736529
Dec 1979 2.615043053 1.766805621
Dec 1980 3.253885817 2.339593716
Dec 1981 3.220297086 2.224747404
Dec 1982 3.192647959 2.701053085
Dec 1983 3.978387612 3.309163144
Dec 1984 4.291261194 3.516525973
Dec 1985 6.725433675 4.647371699
Dec 1986 11.42914677 5.505765733
Dec 1987 14.27881017 5.793758911
Dec 1988 18.36070287 6.767648768
Dec 1989 20.34295824 8.898838582
Dec 1990 15.6249679 8.616507619
Dec 1991 17.5769639 11.24880574
Dec 1992 15.49396734 12.11161228
Dec 1993 20.59845037 13.32153781
Dec 1994 22.25896356 13.49568968
Dec 1995 24.83012571 18.54706335
Dec 1996 26.41 22.83
Long-Term Government Bonds Large Company Stock
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.
- --------------------------------------------------------------------------------
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 rewarded impressive returns
during the period April 1 through September 30, 1997. Marking a reversal from
their performance last spring when they significantly trailed larger-capitalized
stocks, small caps bounced back with a vengeance in May and June, continuing
their upward trek in the succeeding months.
For the six-month period ending September 30, the Nicholas-Applegate Emerging
Growth Fund climbed 46.3%, outpacing the Russell 2000 Growth Index, which was up
37.4%. Key factors positively impacting performance included superior earnings
growth and greater investor recognition of compelling valuation levels among the
Fund's holdings relative to large caps. Expectations that earnings acceleration
for many larger-cap stocks would slow also benefited small caps.
Exceptional stock selection in the technology, financial services, and energy
sectors positively impacted returns.
Maverick Tube Corporation, a manufacturer of tubular products used in the
energy industry, was among the best-performing stocks in the Fund. The company
specializes in the manufacture of products for drilling, production, and
transportation applications in the energy industry, as well as industrial tubing
products used in various industrial applications.
Cost Plus, a leading specialty retailer of casual home living products, was
also a strong performer during the period. The company benefits from its focus
on selling competitively-priced goods, showcasing a wide array of products from
around the world. Cost Plus is expected to post significant earnings growth
through the continued expansion of its West Coast and East Coast stores. In
1996, total sales increased 17% while earnings per share rose 50%.
The Emerging Growth Fund retains solid fundamentals. The projected median
earnings growth rate for the Fund's holdings as of September 30 was 39.7% versus
20.6% for the Russell 2000 Growth index.
Going forward, we believe investors will continue to focus on stocks offering
consistent earnings strength.
In this light, our Emerging Growth portfolio is poised to benefit from its
smaller-cap orientation, and better-than-benchmark earnings growth rates.
REPRESENTATIVE HOLDINGS
American Disposal
Arqule
Assisted Living Concepts
Cost Plus
Digital Microwave
Harbinger
Maverick Tube
Personnel Group of America
Rainforest Cafe
Southern Electronics
- --------------------------------------------------------------------------------
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
9/30/97 58,609 38,278
Annualized Total Returns As of 09/30/97
1 Year 5 Years 10 Years
15.30% 19.93% 14.57%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
EMERGING GROWTH RUSSELL 2000
PORTFOLIO B GROWTH INDEX
<S> <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
31-Dec-89 17,370 14,348
31-Dec-90 15,697 11,850
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
30-Sep-97 56,908 38,278
Annualized Total Returns As of 09/30/97
1 Year 5 Years 10 Years
15.92% 20.14% 14.39%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
EMERGING GROWTH RUSSELL 2000
PORTFOLIO C GROWTH INDEX
<S> <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
31-Dec-89 17,370 14,348
31-Dec-90 15,697 11,850
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
30-Sep-97 57,287 38,278
Annualized Total Returns As of 09/30/97
1 Year 5 Years 10 Years
21.02% 20.49% 14.47%
</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 guarantee 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 SEPTEMBER 30, 1997 (UNAUDITED)
- ------------------------------------------------------------------------
EMERGING GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
COMMON STOCKS -- 96.3%
- ----------------------------------------------------------------------------
ADVERTISING -- 0.1%
Abacus Direct Corp.*....................... 29,000 $ 931,625
------------
AEROSPACE -- 0.4%
AAR Corp................................... 68,800 2,296,200
Doncasters PLC Sponsored ADR*.............. 34,800 1,044,000
------------
3,340,200
------------
AGRICULTURE -- 0.7%
Dekalb Genetics Corp. Class B.............. 125,200 5,555,750
------------
AIR FREIGHT/SHIPPING -- 0.9%
Airnet Systems, Inc.*...................... 37,100 895,037
Circle International Group, Inc............ 44,100 1,311,975
Expeditors International Of Washington,
Inc...................................... 116,500 4,878,437
------------
7,085,449
------------
AIRLINES -- 0.1%
Ryanair Holdings PLC Sponsored ADR*........ 26,800 805,256
------------
ALCOHOLIC BEVERAGES -- 0.1%
Canandaigua Wine Co. Class A*.............. 23,900 1,126,287
------------
APPAREL -- 0.8%
Authentic Fitness Corp..................... 66,800 985,300
Big Dog Holdings, Inc.*.................... 15,000 210,000
Cutter & Buck, Inc.*....................... 19,300 398,062
Fossil, Inc.*.............................. 19,100 374,837
Genesco, Inc.*............................. 74,100 1,083,712
Nautica Enterprises, Inc.*................. 44,450 1,250,156
Wolverine World Wide, Inc.................. 67,200 1,696,800
------------
5,998,867
------------
AUTOMOTIVE EQUIPMENT -- 0.0%
Aftermarket Technology Corp.*.............. 15,900 377,625
------------
BIOTECHNOLOGY -- 0.5%
Arqule, Inc.*.............................. 28,400 596,400
BioReliance Corp.*......................... 5,100 133,875
Guilford Pharmaceuticals, Inc.*............ 118,450 3,494,275
------------
4,224,550
------------
BROADCASTING -- 1.3%
Chancellor Media Corp.*.................... 104,250 5,486,156
Emmis Broadcasting Corp. Class A*.......... 63,000 3,008,250
Saga Communications, Inc. Class A*......... 55,277 1,340,467
Westwood One, Inc.......................... 10,200 323,850
------------
10,158,723
------------
BUILDING MATERIALS -- 1.1%
Advance Lighting Technologies, Inc.*....... 25,800 696,600
AFC Cable Systems, Inc..................... 28,100 997,550
Comfort Systems USA, Inc.*................. 132,600 2,535,975
Hexcel Corp.*.............................. 148,500 4,260,094
Triangle Pacific Corp.*.................... 19,500 677,625
------------
9,167,844
------------
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
CATALOG/OUTLET STORES -- 0.4%
Coldwater Creek*........................... 33,700 $ 977,300
Delia's, Inc.*............................. 39,700 888,287
Insight Enterprises, Inc.*................. 43,200 1,431,000
------------
3,296,587
------------
CHEMICALS -- 0.7%
O.M. Group, Inc............................ 83,250 3,324,797
Scotts Co. (The) Class A*.................. 73,700 1,934,625
Spartech Corp.............................. 26,700 400,500
------------
5,659,922
------------
CLOTHING CHAINS -- 2.2%
99 Cents Only Stores*...................... 43,800 1,437,187
Buckle, Inc.*.............................. 19,200 468,000
Goody's Family Clothing, Inc............... 80,500 2,596,125
Men's Wearhouse, Inc.*..................... 93,800 3,494,050
Pacific Sunwear of California*............. 38,700 1,586,700
Paul Harris Stores, Inc.*.................. 24,500 676,812
Stage Stores, Inc.*........................ 108,600 4,683,375
Stein Mart Inc.*........................... 89,400 2,927,850
------------
17,870,099
------------
COAL MINING -- 0.1%
Zeigler Coal Holding Co.................... 45,700 1,068,237
------------
COMPUTER/OFFICE AUTOMATION -- 2.5%
Advanced Digital Information Corp.*........ 78,500 1,599,437
Apex PC Solutions, Inc.*................... 38,800 1,469,550
DAOU Systems, Inc.*........................ 14,000 437,500
Discreet Logic, Inc.*...................... 43,100 1,144,844
Encad, Inc................................. 42,500 1,306,875
Geac Computer Corp. LTD*................... 40,500 2,508,357
Microtouch Systems, Inc.*.................. 54,900 1,530,337
Neomagic Corp.............................. 6,300 127,181
Network Appliance, Inc.*................... 128,900 6,992,825
QLogic Corp.*.............................. 14,800 619,750
Safeguard Scientifics, Inc.*............... 12,600 368,550
Splash Technology Holdings, Inc.*.......... 52,100 2,038,412
------------
20,143,618
------------
CONTAINERS -- 0.1%
Silgan Holdings, Inc.*..................... 27,600 1,104,000
------------
CONTRACT DRILLING -- 2.5%
Atwood Oceanics, Inc.*..................... 41,900 4,718,987
Cliff's Drilling Co.*...................... 84,200 5,862,425
Marine Drilling Co., Inc.*................. 226,800 7,087,500
Patterson Energy, Inc.*.................... 37,200 1,948,350
Unit Corp.*................................ 34,300 525,219
------------
20,142,481
------------
DEPARTMENT/DISCOUNT STORES -- 0.2%
Ames Department Stores, Inc.*.............. 103,600 1,554,000
Tuesday Morning Corp.*..................... 8,950 210,884
------------
1,764,884
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
5
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1997 (UNAUDITED) -- CONTINUED
- --------------------------------------------------------------------------------
EMERGING GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCKS (Continued)
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
DRUGS/PHARMACEUTICALS -- 3.2%
Curative Health Services, Inc.*............ 68,500 $ 2,132,062
Incyte Pharmaceuticals, Inc.*.............. 73,600 6,182,400
Inhale Therapeutic Systems*................ 19,600 614,950
Kos Pharmaceuticals, Inc.*................. 46,900 1,676,675
NBTY, Inc.*................................ 55,300 1,168,212
NCS Healthcare, Inc. Class A*.............. 17,100 436,050
Paraxel International Corp.*............... 82,400 3,254,800
PathoGenesis Corp.*........................ 28,400 1,008,200
Sepracor, Inc.*............................ 110,000 3,616,250
Theragenics Corp.*......................... 101,400 5,031,975
------------
25,121,574
------------
ELECTRONIC DATA PROCESSING -- 0.0%
Factset Research Systems, Inc.*............ 12,800 380,800
------------
ELECTRONIC INSTRUMENTS/DIVERSIFIED -- 1.8%
Aehr Test Systems*......................... 46,900 829,544
Avid Technology, Inc.*..................... 84,800 2,756,000
Coherent, Inc.*............................ 26,900 1,489,587
Lecroy Corp.*.............................. 29,200 1,292,100
Lo-Jack Corp.*............................. 14,800 210,900
Molecular Dynamics, Inc.*.................. 12,400 334,800
Orbotech Ltd.*............................. 36,800 2,125,200
Plexus Corp.*.............................. 87,100 3,059,387
Southern Electronics Corp.*................ 40,400 787,800
Veeco Instruments, Inc.*................... 22,900 1,446,994
------------
14,332,312
------------
ENTERTAINMENT -- 0.2%
American Classic Voyages Co.*.............. 32,300 565,250
Cinar Films, Inc. Class B*................. 21,100 804,437
------------
1,369,687
------------
ENVIRONMENTAL SERVICES -- 1.4%
American Disposal Services, Inc.*.......... 39,800 1,243,750
Eastern Environmental Services, Inc.*...... 46,000 1,173,000
Newpark Resources, Inc.*................... 93,570 3,678,471
Superior Services, Inc.*................... 56,600 1,613,100
Tetra Tech, Inc.*.......................... 19,300 472,850
USA Waste Services, Inc.*.................. 73,852 2,944,848
------------
11,126,019
------------
FINANCE COMPANIES -- 1.8%
American Capital Strategies Ltd.*.......... 33,900 678,000
Imperial Credit Industries, Inc.*.......... 135,500 3,590,750
Jackson Hewitt, Inc.*...................... 30,600 1,170,450
New Century Financial Corp.*............... 32,100 547,706
Ocwen Financial Corp.*..................... 67,700 2,851,862
Resource Bancshares Mortgage Group, Inc.... 15,800 206,387
Sirrom Capital Corp........................ 92,000 4,772,500
Southwest Securities Group, Inc............ 14,960 344,080
------------
14,161,735
------------
FOOD CHAINS -- 0.1%
Wild Oats Markets, Inc.*................... 19,300 576,587
------------
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
GROCERY PRODUCTS -- 0.6%
Michael Foods, Inc......................... 49,500 $ 1,268,437
Morningstar Group, Inc.*................... 76,100 3,272,300
------------
4,540,737
------------
HOME FURNISHINGS -- 0.7%
Bombay Co., Inc.*.......................... 38,500 295,969
Ethan Allen Interiors, Inc................. 171,000 5,301,000
------------
5,596,969
------------
HOMEBUILDING -- 0.1%
Standard-Pacific Corp...................... 55,500 582,750
------------
HOSPITALS -- 0.2%
National Surgery Centers, Inc.*............ 64,200 1,396,350
------------
INVESTMENT COMPANIES -- 0.4%
AmeriTrade Holding Corp.*.................. 28,900 715,275
Everen Capital Corp........................ 28,600 1,161,875
Ocwen Asset Investment Corp................ 65,000 1,495,000
------------
3,372,150
------------
LIFE INSURERS -- 0.2%
ARM Financial Group, Inc. Class A.......... 54,000 1,285,875
Protective Life Corp....................... 11,600 585,800
------------
1,871,675
------------
LODGING -- 1.7%
Capstar Hotel Co.*......................... 124,850 4,190,278
Signature Resorts, Inc.*................... 118,700 5,638,250
Silverleaf Resorts, Inc.*.................. 35,900 821,212
Suburban Lodges Of America, Inc.*.......... 15,200 400,900
Trendwest Resorts, Inc.*................... 12,000 282,000
Wyndham Hotel Corp.*....................... 43,800 1,938,150
------------
13,270,790
------------
MACHINERY/EQUIPMENT -- 2.8%
Asyst Technologies, Inc.*.................. 53,000 2,353,531
DT Industries, Inc......................... 51,000 1,683,000
Helix Technology, Inc...................... 44,600 2,761,019
Kuhlman Corp............................... 70,100 2,523,600
Magnetek, Inc.*............................ 95,100 2,127,862
Motivepower Industries, Inc.*.............. 98,377 2,557,802
OmniQuip International, Inc................ 50,500 927,937
Regal Beloit Corp.......................... 65,100 2,001,825
Robbins & Myers, Inc....................... 26,200 1,008,700
Terex Corp.*............................... 72,500 1,504,375
Varlen Corp................................ 32,500 1,283,750
Watsco, Inc. Class A....................... 44,250 1,382,812
------------
22,116,213
------------
MANAGED HEALTH CARE/HMO'S/PPO'S -- 0.4%
FPA Medical Management, Inc.*.............. 55,343 1,902,416
Healthcare Recoveries, Inc.*............... 39,300 884,250
Specialty Care Network, Inc.*.............. 19,200 237,600
------------
3,024,266
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
6
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCKS (Continued)
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
MEDICAL SPECIALTIES -- 1.0%
Hanger Orthopedic Group, Inc.*............. 8,500 $ 126,969
Medical Resources, Inc.*................... 90,900 1,761,187
Urologix, Inc.*............................ 73,900 1,755,125
VISX, Inc.*................................ 86,600 2,208,300
Vivus, Inc.*............................... 55,300 2,073,750
------------
7,925,331
------------
MEDICAL SUPPLIES -- 1.8%
Capstone Pharmacy Services, Inc.*.......... 55,400 668,262
Graham-Field Health Products, Inc.*........ 86,500 1,405,625
Minimed, Inc.*............................. 61,100 2,398,175
Molecular Devices Corp.*................... 41,300 903,437
Penederm, Inc.*............................ 19,700 268,412
Respironics, Inc.*......................... 30,900 849,750
Sabratek Corp.*............................ 53,800 1,956,975
Safeskin Corp.*............................ 85,800 3,807,375
Serologicals Corp.*........................ 29,450 669,987
Spine Tech, Inc............................ 7,200 270,900
Ventana Medical Systems, Inc.*............. 29,500 475,687
Vista Medical Technologies, Inc.*.......... 28,500 423,937
Wesley Jessen VisionCare, Inc.*............ 17,000 480,250
------------
14,578,772
------------
MEDICAL/NURSING/HEALTH SERVICES -- 1.6%
ABR Information Services, Inc.............. 77,400 2,138,175
Alternative Living Services, Inc.*......... 33,500 812,375
Assisted Living Concepts, Inc.*............ 31,800 508,800
Atria Communities, Inc.*................... 20,200 363,600
CareMatrix Corp.*.......................... 38,900 987,087
Centennial Healthcare Corp.*............... 5,300 121,900
Coast Dental Services, Inc.*............... 31,600 940,100
Concentra Managed Care, Inc.*.............. 96,304 3,400,735
Diagnostic Health Services, Inc.*.......... 23,300 352,412
Ocular Sciences, Inc.*..................... 46,100 1,066,062
Sunrise Assisted Living, Inc.*............. 46,800 1,690,650
------------
12,381,896
------------
METALS -- 0.7%
Lone Star Technologies, Inc.*.............. 33,700 1,758,719
Mueller Industries, Inc.*.................. 60,800 2,762,600
Oregon Steel Mills, Inc.................... 34,700 941,237
------------
5,462,556
------------
MILITARY/DEFENSE TECHNOLOGY -- 0.4%
Electromagnetic Sciences, Inc.*............ 28,500 805,125
Tracor, Inc.*.............................. 67,800 2,084,850
------------
2,889,975
------------
MULTI-LINE INSURERS -- 0.1%
Delphi Financial Group, Inc. Class A*...... 26,452 1,135,783
------------
OCEAN FREIGHT/SHIPPING -- 0.2%
Kirby Corp................................. 14,500 278,219
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
</TABLE>
OCEAN FREIGHT/SHIPPING (CONTINUED)
<TABLE>
<S> <C> <C>
OMI Corp.*................................. 111,800 $ 1,397,500
------------
1,675,719
------------
OIL REFINING/MARKETING -- 0.1%
Tesoro Petroleum Corp.*.................... 27,900 503,944
------------
OIL/GAS PRODUCTION -- 1.7%
Abraxas Petroleum Corp.*................... 28,200 408,900
Harken Energy Corp.*....................... 271,800 1,732,725
KCS Energy, Inc............................ 52,600 1,551,700
Nuevo Energy Co.*.......................... 34,200 1,637,325
Petsec Energy Ltd.*........................ 63,600 1,637,700
St. Mary Land & Exploration Co............. 52,400 2,377,650
Swift Energy Co.*.......................... 93,500 2,635,531
Vintage Petroleum, Inc..................... 25,700 1,265,725
------------
13,247,256
------------
OILFIELD SERVICES/EQUIPMENT -- 7.4%
Cal Dive International, Inc.*.............. 47,500 1,769,375
Camco International, Inc................... 24,000 1,674,000
Eagle Geophysical, Inc.*................... 7,500 148,125
EVI, Inc................................... 63,100 4,038,400
Friede Goldman International, Inc.*........ 40,400 2,424,000
Global Industries Ltd.*.................... 112,200 4,473,975
Gulfmark Offshore, Inc.*................... 11,700 403,650
Hvide Marine, Inc. Class A*................ 46,800 1,497,600
Maverick Tube Corp.*....................... 19,100 787,875
Oceaneering International, Inc.*........... 98,600 2,347,912
Pool Energy Services Co.*.................. 109,100 3,695,762
Pride International, Inc.*................. 166,900 5,674,600
Seacor Holdings, Inc.*..................... 65,000 4,030,000
Seitel, Inc.*.............................. 10,000 443,750
Stolt Comex Seaway S.A.*................... 33,900 2,120,869
Superior Energy Services, Inc.*............ 81,900 757,575
Trico Marine Services, Inc.*............... 113,600 3,947,600
Tuboscope Vetco International Corp.*....... 245,800 7,711,975
UNIFAB International, Inc.*................ 5,000 163,750
Varco International, Inc.*................. 137,500 6,668,750
Veritas DGC, Inc.*......................... 108,300 4,609,519
------------
59,389,062
------------
OTHER COMMERCIAL/INDUSTRIAL SERVICES -- 7.2%
Administaff, Inc.*......................... 45,100 1,048,575
Affiliated Computer Services, Inc. Class
A*....................................... 89,400 2,212,650
ASE Test Ltd.*............................. 10,200 864,450
Billing Information Concepts*.............. 76,700 2,684,500
Computer Task Group, Inc................... 177,200 7,431,325
Data Processing Resources Corp.*........... 64,800 1,620,000
Fine Host Corp.*........................... 33,000 1,278,750
Forrester Research, Inc.*.................. 57,100 1,548,837
G & K Services, Inc. Class A............... 22,950 797,512
Getty Communications PLC ADR*.............. 22,000 407,000
Hall Kinion & Associates, Inc.*............ 27,400 578,825
Host Marriott Services Corp.*.............. 30,800 458,150
Information Management Resources, Inc.*.... 91,800 2,616,300
Kellstrom Industries, Inc.*................ 12,700 261,937
Lason Holdings, Inc.*...................... 54,300 1,500,037
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
7
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1997 (UNAUDITED) -- CONTINUED
- --------------------------------------------------------------------------------
EMERGING GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCKS (Continued)
- ---------------------------------------------------------
OTHER COMMERCIAL/INDUSTRIAL SERVICES (CONTINUED)
<TABLE>
<S> <C> <C>
Meta Group, Inc.*.......................... 14,000 $ 346,500
Metro Information Services, Inc.*.......... 37,500 820,313
Metzler Group, Inc.*....................... 75,900 3,045,488
NCO Group, Inc.*........................... 29,300 1,084,100
Norrell Corp.*............................. 63,400 2,179,375
Nova Corp.*................................ 22,200 564,712
On Assignment, Inc.*....................... 31,600 1,437,800
Personnel Group of America, Inc.*.......... 75,500 2,585,875
PMT Services, Inc.*........................ 104,350 1,617,425
Romac International, Inc.*................. 85,900 3,747,388
RWD Technologies, Inc.*.................... 23,600 542,800
Source Services Corp.*..................... 21,000 624,750
StaffMark, Inc.*........................... 33,400 1,273,375
Steiner Leisure Ltd.*...................... 11,600 426,300
Syntel, Inc.*.............................. 34,200 542,925
Technology Solutions Co.*.................. 87,300 2,815,425
Vestcom International, Inc.*............... 8,500 170,000
Vincam Group, Inc.*........................ 36,400 1,046,500
Warrantech Corp.*.......................... 93,000 1,057,875
Whittman-Hart, Inc.*....................... 186,900 5,700,450
Youth Services International, Inc.*........ 27,700 455,319
------------
57,393,543
------------
OTHER CONSUMER DURABLES -- 0.4%
Action Performance Cos., Inc.*............. 114,100 3,323,163
------------
OTHER CONSUMER NON-DURABLES -- 0.2%
Helen of Troy Ltd.*........................ 72,400 1,429,900
------------
OTHER CONSUMER SERVICES -- 0.5%
Bally Total Fitness Holding Corp.*......... 22,200 382,950
Equity Corp. International*................ 22,800 531,525
MemberWorks, Inc.*......................... 25,300 566,088
Strayer Education, Inc.*................... 51,500 2,343,250
Travel Services International, Inc.*....... 4,300 89,225
------------
3,913,038
------------
OTHER FINANCIAL SERVICES -- 0.1%
Healthcare Financial Partners, Inc.*....... 29,900 923,163
------------
OTHER HEALTH TECHNOLOGY/SERVICES -- 0.6%
Access Health Market, Inc.*................ 57,600 1,987,200
Envoy Corp.*............................... 83,200 2,376,400
MedQuist, Inc.*............................ 18,450 431,269
------------
4,794,869
------------
OTHER PRODUCERS/MANUFACTURING -- 1.2%
Chicago Miniature Lamp, Inc.*.............. 63,500 2,111,375
Encore Wire Corp.*......................... 63,750 2,047,969
Griffon Corp.*............................. 70,000 1,137,500
Interface, Inc............................. 50,300 1,464,988
Libbey, Inc................................ 35,900 1,281,181
Rexel, Inc.*............................... 40,500 870,750
Special Metals Corp.*...................... 17,900 335,625
------------
9,249,388
------------
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
OTHER RETAIL TRADE -- 0.4%
Cost Plus, Inc.*........................... 43,100 $ 1,249,900
Fred's, Inc................................ 27,600 572,700
RDO Equipment Co. Class A*................. 25,600 588,800
Renters Choice, Inc.*...................... 37,100 842,866
------------
3,254,266
------------
OTHER TECHNOLOGY -- 0.9%
CHS Electronics, Inc.*..................... 65,700 1,798,538
Computer Products, Inc.*................... 73,500 2,186,625
Henry(Jack) & Associates................... 88,650 2,338,144
Pegasus Systems, Inc.*..................... 6,000 108,750
Xionics Document Technologies, Inc.*....... 30,700 533,413
------------
6,965,470
------------
OTHER TRANSPORTATION -- 0.2%
Coach USA, Inc.*........................... 46,000 1,382,875
------------
PRINTING/FORMS -- 1.3%
Applied Graphics Technologies, Inc.*....... 66,300 3,729,375
Consolidated Graphics, Inc.*............... 85,200 4,238,700
Mail-Well, Inc.*........................... 98,900 2,682,663
------------
10,650,738
------------
PUBLISHING -- 0.2%
Scholastic Corp.*.......................... 50,000 1,975,000
------------
RECREATIONAL PRODUCTS -- 0.0%
Swisher International Group, Inc. Class
A*....................................... 18,500 334,156
------------
REAL ESTATE INVESTMENT TRUSTS -- 1.6%
American General Hospitality Corp.......... 31,100 905,788
FelCor Suite Hotels, Inc................... 27,800 1,141,538
Golf Trust Of America, Inc................. 48,600 1,312,200
Health Care Real Estate Investment Trust... 43,500 1,196,250
Innkeepers USA Trust....................... 118,400 2,035,000
Kilroy Realty Corp......................... 107,825 2,911,275
Price Real Estate Investment Trust......... 9,000 361,688
Storage USA, Inc........................... 34,700 1,409,688
Walden Residential Properties, Inc......... 43,600 1,100,900
------------
12,374,327
------------
REAL ESTATE BROKERS/SERVICES -- 0.4%
CB Commercial Real Estate Services Group,
Inc.*.................................... 34,200 1,094,400
Grubb & Ellis Co.*......................... 20,900 304,356
Lasalle Partners, Inc.*.................... 46,100 1,613,500
------------
3,012,256
------------
REGIONAL BANKS -- 0.9%
Bay View Capital Corp...................... 50,400 1,379,700
Peoples Heritage Financial Group, Inc...... 68,200 2,885,713
Provident Bankshares Corp.................. 50,585 2,883,345
------------
7,148,758
------------
RENTAL/LEASING COMPANIES -- 0.1%
Avis Rent A Car, Inc.*..................... 18,000 429,750
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
8
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCKS (Continued)
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
RESTAURANTS -- 2.3%
CKE Restaurants, Inc....................... 199,650 $ 8,385,300
Foodmaker, Inc.*........................... 159,000 2,991,188
Logan's Roadhouse, Inc.*................... 21,800 566,800
NPC International, Inc..................... 29,400 371,175
PJ America, Inc.*.......................... 11,000 189,750
Rainforest Cafe, Inc.*..................... 108,400 3,495,900
Sonic Corp.*............................... 76,700 2,147,600
Star Buffet, Inc.*......................... 12,000 189,000
------------
18,336,713
------------
RETAIL/FOOD DISTRIBUTION -- 0.4%
Suiza Foods Corp.*......................... 55,600 2,863,400
------------
SAVINGS & LOAN ASSOCIATIONS -- 0.1%
MAF Bancorp, Inc........................... 30,550 989,056
------------
SEMICONDUCTORS/ELECTRONIC COMPONENTS -- 10.8%
3Dlabs, Inc. Ltd........................... 16,300 525,675
Aavid Thermal Technologies, Inc.*.......... 32,700 985,088
ACT Manufacturing, Inc.*................... 42,200 1,403,150
Ade Corp.*................................. 55,900 2,242,987
Advanced Energy Industries, Inc.*.......... 39,200 1,109,850
Advanced Technology Materials, Inc.*....... 43,900 1,613,325
Anadigics, Inc.*........................... 51,314 2,530,422
Benchmark Electronics, Inc.*............... 38,400 1,082,400
Burr-Brown Corp.*.......................... 21,300 710,888
C.P. Clare Corp.*.......................... 14,200 280,450
Credence Systems Corp.*.................... 55,300 2,695,875
DII Group, Inc.*........................... 129,800 4,255,006
Electroglas, Inc.*......................... 59,600 2,026,400
General Scanning, Inc.*.................... 54,600 1,900,763
JPM Co.*................................... 30,300 730,988
Kulicke & Soffa Industries, Inc.*.......... 104,100 4,821,131
Micrel, Inc.*.............................. 59,800 2,530,288
MRV Communications, Inc.*.................. 65,500 2,390,750
Photronics, Inc.*.......................... 106,400 6,443,850
PMC-Sierra, Inc.*.......................... 112,200 2,861,100
Radisys Corp.*............................. 50,400 2,532,600
Sawtek, Inc.*.............................. 65,400 3,024,750
Semitool, Inc.*............................ 29,300 736,163
Semtech Corp.*............................. 40,000 2,765,000
Sipex Corp.*............................... 160,200 5,086,350
Speedfam International, Inc.*.............. 109,600 6,617,100
STB Systems, Inc.*......................... 44,600 1,627,900
Stormedia, Inc.*........................... 89,000 517,313
Tower Semiconductor Ltd.*.................. 81,700 1,623,788
Ultratech Stepper, Inc.*................... 93,200 3,168,800
Uniphase Corp.*............................ 65,500 5,207,250
Vitesse Semiconductor, Inc.*............... 153,700 7,617,756
Zygo Corp.*................................ 90,200 2,706,000
------------
86,371,156
------------
SOFTWARE -- 7.8%
Advantage Learning Systems, Inc.*.......... 15,000 378,750
American Software, Inc. Class A*........... 78,700 1,150,988
Applied Voice Technology, Inc.*............ 41,300 1,182,213
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
</TABLE>
SOFTWARE (CONTINUED)
<TABLE>
<S> <C> <C>
Aspen Technology, Inc.*.................... 53,800 $ 1,889,725
CBT Group PLC Sponsored ADR*............... 72,300 5,802,075
CCC Information Services Group*............ 79,600 1,691,500
Computer Learning Centers, Inc.*........... 53,700 2,094,300
Credit Management Solutions, Inc.*......... 5,300 96,725
Documentum, Inc.*.......................... 47,600 1,582,700
Geotel Communications Corp.*............... 21,100 398,263
Harbinger Corp.*........................... 130,550 4,748,756
HPR, Inc................................... 15,400 336,875
Hyperion Software Corp.*................... 58,200 1,815,113
Imnet Systems, Inc......................... 38,500 1,034,688
Industri-Matematik International Corp.*.... 29,100 712,950
ITEQ, Inc.*................................ 42,200 588,162
Manugistics Group, Inc.*................... 54,100 1,934,075
Memco Software Ltd.*....................... 42,300 930,600
National Instruments Corp.*................ 88,500 4,104,188
Open Text Corp.*........................... 87,100 1,219,400
Peerless Systems Corp.*.................... 7,400 103,600
Pegasystems, Inc.*......................... 69,300 2,104,988
Peregrine Systems, Inc.*................... 17,600 312,400
Peritus Software Services, Inc.*........... 29,400 753,375
Pervasive Software, Inc.*.................. 27,000 310,500
QAD, Inc.*................................. 53,600 998,300
QuickResponse Services, Inc.*.............. 21,200 726,100
Rogue Wave Software, Inc................... 21,700 298,375
Summit Design, Inc.*....................... 88,200 1,565,550
Tecnomatix Technologies Ltd.*.............. 9,700 371,025
Veritas Software Co.*...................... 110,400 4,850,700
Viasoft, Inc.*............................. 51,600 2,554,200
Visio Corp.*............................... 167,200 6,980,600
Walker Interactive Systems, Inc.*.......... 52,700 925,544
Wind River Systems, Inc.*.................. 129,800 5,354,250
------------
61,901,553
------------
SPECIALTY CHAINS -- 3.3%
Budget Group, Inc.*........................ 29,000 957,000
Children's Place Retail Stores, Inc.*...... 20,100 291,450
Claire's Stores, Inc....................... 31,000 693,625
Cole National Corp. Class A*............... 29,200 1,213,625
Cort Business Services Corp.*.............. 96,700 3,861,956
Garden Ridge Corp.*........................ 62,800 918,450
Guitar Center, Inc.*....................... 63,100 1,561,725
Linens 'N Things, Inc.*.................... 131,700 4,411,950
Party City Corp.*.......................... 14,100 370,125
Petco Animal Supplies, Inc.*............... 80,400 2,522,550
Pier 1 Imports, Inc........................ 252,300 4,525,631
Rental Service Corp.*...................... 71,200 1,597,550
Williams-Sonoma, Inc.*..................... 78,300 3,347,325
------------
26,272,962
------------
SPECIALTY INSURERS -- 0.1%
International Alliance Services, Inc.*..... 66,600 657,675
------------
TELECOMMUNICATIONS EQUIPMENT -- 5.4%
Cidco, Inc.*............................... 38,400 739,200
Comverse Technology, Inc.*................. 48,500 2,558,375
Davox Corp.*............................... 75,250 2,520,875
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
9
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1997 (UNAUDITED) -- CONTINUED
- --------------------------------------------------------------------------------
EMERGING GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCKS (Continued)
- ---------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT (CONTINUED)
<TABLE>
<S> <C> <C>
Digital Microwave Corp.*................... 140,300 $ 6,278,425
Gilat Satellite Networks Ltd.*............. 67,200 2,479,050
IFR Systems, Inc........................... 38,500 1,270,500
Innova Corp.*.............................. 50,900 1,202,513
Intelect Communications Systems Ltd........ 48,600 552,825
Natural Microsystems Corp.*................ 81,700 3,104,600
Nice Systems Ltd. ......................... 49,900 2,806,875
P-COM, Inc.*............................... 105,800 2,532,588
Premisys Communications, Inc.*............. 69,600 1,770,450
Remec, Inc.*............................... 57,950 2,115,175
RF Micro Devices, Inc.*.................... 5,300 98,713
Spectrain Corp.*........................... 35,000 2,244,375
Stanford Telecommunications, Inc.*......... 47,300 1,034,688
Superior TeleCom, Inc.*.................... 38,300 1,508,063
Tekelec*................................... 82,600 2,813,563
Teledata Communications Ltd.*.............. 96,700 4,363,588
World Access, Inc.*........................ 28,000 910,000
------------
42,904,441
------------
TELECOMMUNICATIONS SERVICES -- 0.3%
Dycom Industries, Inc.*.................... 42,500 942,969
Pacific Gateway Exchange, Inc.*............ 45,900 1,795,838
------------
2,738,807
------------
TEXTILES -- 0.4%
Culp, Inc.................................. 68,300 1,417,225
Novel Demim Holdings Ltd................... 45,200 1,220,400
Quaker Fabric Corp.*....................... 14,300 323,538
------------
2,961,163
------------
TOBACCO PRODUCTS -- 0.2%
General Cigar Holdings, Inc.*.............. 57,100 1,648,763
------------
TRUCKING -- 1.6%
Arkansas Best Corp.*....................... 99,900 1,130,119
Consolidated Freightways Corp.*............ 149,500 2,634,938
Knight Transportation, Inc.*............... 9,100 254,800
M.S. Carriers, Inc.*....................... 20,000 532,500
Roadway Express, Inc....................... 60,700 1,661,663
Swift Transportation Co., Inc.*............ 46,800 1,480,050
U S Xpress Enterprises, Inc. Class A*...... 700 14,000
USFreightways Corp......................... 73,600 2,474,800
Yellow Corp.*.............................. 85,300 2,777,581
------------
12,960,451
------------
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
WHOLESALE DISTRIBUTION -- 2.1%
Anicom, Inc.*.............................. 63,700 $ 1,066,975
Aviall, Inc.*.............................. 83,800 1,283,188
Brightpoint, Inc.*......................... 115,750 5,360,672
CellStar Corp.*............................ 125,700 5,845,050
Inacom Corp.*.............................. 36,400 1,353,625
Industrial Distribution Group, Inc.*....... 6,300 132,300
MicroAge, Inc.*............................ 47,100 1,365,900
------------
16,407,710
------------
TOTAL COMMON STOCKS
(Cost $506,299,513)...................................... 767,421,422
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
- --------------------------------------------------------------------------------
COMMERCIAL PAPER -- 4.0%
- --------------------------------------------------------------------------------
Associates Corp. of North America 6.370%, 10/1/97... $28,864,000 28,864,000
-------------
J.P. Morgan & Co., Inc.
6.250%, 10/1/97................................... 3,171,000 3,171,000
-------------
TOTAL COMMERCIAL PAPER
(Cost $32,035,000)............................................. 32,035,000
-------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 1.2%
- --------------------------------------------------------------------------------
J.P. Morgan & Co., Inc. $9,210,000 at 6.250%,
(Agreement dated 9/30/97; to be repurchased at
$9,211,527 on 10/01/97: collateralized by
$8,640,000 FNMA Notes, 7.125% due 04/30/26) (VALUE
$9,652,500)
(Cost $9,210,000)................................. 9,210,000 9,210,000
-------------
TOTAL INVESTMENTS -- 101.4%
(Cost $547,544,513)............................................ 808,666,422
LIABILITIES IN EXCESS OF OTHER ASSETS (1.4%)..................... (11,437,890)
-------------
NET ASSETS 100.0%................................................ $ 797,228,532
-------------
</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,
Mid/Large Cap Equities
Andrew B. Gallagher,
Portfolio Manager
Maren Lindstrom,
Portfolio Manager
Thomas J. Sullivan,
Assistant 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: Following an extended period of large-cap outperformance,
investors turned their attention back to mid-cap stocks in May. Contributing
factors included compelling earnings, growth rates, and valuations in the
mid-cap segment relative to large caps. Investors who held on to their mid-cap
stocks throughout a long period of underperformance were rewarded as mid-cap
growth investing returned to favor. While the Fund showed some volatility, its
earnings and valuations proved to be extremely attractive, and we are optimistic
about its outlook. Strict adherence to our investment philosophy rewarded
shareholders with significant appreciation. The Fund gained 30.5% in the six-
month period ending September 30, 1997. The Russell Mid Cap Growth Index was up
30.8% while the S&P 500 Index was up 26.2%.
Superior stock selection in the technology sector was a major contributor to
the Fund's performance. Through Nicholas-Applegate's bottom-up style, our
portfolio managers identified the stocks of many technology companies benefiting
from the trend in domestic businesses to improve their technology
infrastructures. For example, ASM Lithography, one of the best performers for
the Fund during the quarter, experienced increased demand in the semiconductor
industry. The company was able fulfill strong product demand and increase
shipping capacity.
The Fund also enjoyed superior stock selection in the wireless
telecommunications industry, as Nextell Communications increased its share in
the market and showed growth well ahead of expectations. Teleport Communications
also demonstrated significant growth during the period, with a gain of over 75%.
Our outlook remains positive for the Core Growth Fund with the benefits of the
capital gains tax cut, as well as high earnings growth rates and attractive
relative valuations.
REPRESENTATIVE HOLDINGS
Advanced Fibre Communication
Airborne Freight
Allied Waste Industries
BMC Software
CKE Restaurants
Four Season Hotel
Jones Apparel Group
Price/Costco
Robert Half International
Teleport Communications
- --------------------------------------------------------------------------------
11
<PAGE>
CORE GROWTH PORTFOLIOS
- ------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CORE GROWTH PORTFOLIO A RUSSELL MID CAP GROWTH INDEX S&P 400 MID CAP INDEX
<S> <C> <C> <C>
9/30/1985 $ 9,475.00 $10,000.00 $ 10,000.00
12/31/1985 $ 11,802.00 $10,000.00 $ 11,765.38
12/31/1986 $ 15,588.00 $11,755.04 $ 13,673.59
12/31/1987 $ 16,051.00 $12,079.37 $ 13,394.70
12/31/1988 $ 17,977.00 $13,640.50 $ 16,189.95
12/31/1989 $ 23,935.00 $17,935.18 $ 21,944.35
12/31/1990 $ 23,965.00 $17,014.58 $ 20,820.87
12/31/1991 $ 37,056.00 $25,016.75 $ 31,255.66
12/31/1992 $ 41,829.00 $27,196.19 $ 34,982.08
12/31/1993 $ 49,805.00 $30,240.33 $ 39,861.97
12/31/1994 $ 44,328.00 $29,585.30 $ 38,430.72
12/31/1995 $ 61,012.00 $39,641.61 $ 50,324.62
12/31/1996 $ 70,680.00 $46,571.16 $ 59,981.98
9/30/1997 $ 84,337.82 $58,703.55 $ 78,623.05
Annualized Total Returns As of 09/30/97
1 Year 5 Years 10 Years
12.45% 17.90% 14.10%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CORE GROWTH PORTFOLIO B RUSSELL MID CAP GROWTH INDEX S&P 400 MID CAP INDEX
<S> <C> <C> <C>
9/30/1985 $ 10,000.00 $10,000.00 $ 10,000.00
12/31/1985 $ 12,438.00 $10,000.00 $ 11,765.38
12/31/1986 $ 16,322.87 $11,755.04 $ 13,673.59
12/31/1987 $ 16,698.26 $12,079.37 $ 13,394.70
12/31/1988 $ 18,581.81 $13,640.50 $ 16,189.95
12/31/1989 $ 24,583.23 $17,935.18 $ 21,944.35
12/31/1990 $ 24,454.51 $17,014.58 $ 20,820.87
12/31/1991 $ 37,575.72 $25,016.75 $ 31,255.66
12/31/1992 $ 42,142.91 $27,196.19 $ 34,982.08
12/31/1993 $ 49,879.40 $30,240.33 $ 39,861.97
12/31/1994 $ 44,073.05 $29,585.30 $ 38,430.72
12/31/1995 $ 60,343.98 $39,641.61 $ 50,324.62
12/31/1996 $ 69,498.74 $46,571.16 $ 59,981.98
9/30/1997 $ 82,549.24 $58,703.55 $ 78,623.05
Annualized Total Returns As of 09/30/97
1 Year 5 Years 10 Years
12.98% 18.25% 14.00%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CORE GROWTH PORTFOLIO C RUSSELL MID CAP GROWTH INDEX S&P 400 MID CAP INDEX
<S> <C> <C> <C>
9/30/1985 $ 10,000.00 $10,000.00 $ 10,000.00
12/31/1985 $ 12,438.00 $10,000.00 $ 11,765.38
12/31/1986 $ 16,322.87 $11,755.04 $ 13,673.59
12/31/1987 $ 16,698.26 $12,079.37 $ 13,394.70
12/31/1988 $ 18,581.81 $13,640.50 $ 16,189.95
12/31/1989 $ 24,583.23 $17,935.18 $ 21,944.35
12/31/1990 $ 24,454.51 $17,014.58 $ 20,820.87
12/31/1991 $ 37,575.72 $25,016.75 $ 31,255.66
12/31/1992 $ 42,142.91 $27,196.19 $ 34,982.08
12/31/1993 $ 49,824.11 $30,240.33 $ 39,861.97
12/31/1994 $ 44,078.23 $29,585.30 $ 38,430.72
12/31/1995 $ 60,300.98 $39,641.61 $ 50,324.62
12/31/1996 $ 69,464.24 $46,571.16 $ 59,981.98
9/30/1997 $ 82,553.94 $58,703.55 $ 78,623.05
Annualized Total Returns As of 09/30/97
1 Year 5 Years 10 Years
18.04% 18.46% 14.00%
</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 Russell Mid Cap Growth Index 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. 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 Russell Mid Cap Growth Index measures the performance of those companies
among the 800 smallest companies in the Russell 1000 Index with higher than
average price-to-book ratios and forecasted growth. The average market
capitalization is $4 billion. The Russell Mid Cap Growth Index is considered
generally representative of the U.S. market for mid cap stocks. 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 Fund
only to the Russell Mid Cap Growth 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 Russell
Mid Cap Growth 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 guarantee 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 SEPTEMBER 30, 1997 (UNAUDITED)
- ------------------------------------------------------------------------
CORE GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
COMMON STOCKS -- 93.9%
- ---------------------------------------------------------------------------------
AIRFREIGHT/SHIPPING -- 1.8%
Airborne Freight Corp...................... 150,300 $ 9,102,544
-------------
APPAREL -- 1.9%
Jones Apparel Group, Inc.*................. 172,100 9,293,400
-------------
BIOTECHNOLOGY -- 3.6%
Biochem Pharma, Inc.*...................... 200,000 6,300,000
Centocor, Inc.*............................ 156,700 7,453,044
Guilford Pharmaceuticals, Inc.*............ 135,000 3,982,500
-------------
17,735,544
-------------
BROADCASTING -- 3.5%
Chancellor Media Corp.*.................... 148,000 7,788,500
Clear Channel Communications, Inc.*........ 146,800 9,523,650
-------------
17,312,150
-------------
CLOTHING CHAINS -- 1.3%
TJX Companies, Inc......................... 220,100 6,726,806
-------------
COMPUTER/OFFICE AUTOMATION -- 2.9%
Computer Horizons Corp.*................... 182,650 6,621,062
Sterling Commerce, Inc.*................... 215,100 7,730,156
-------------
14,351,218
-------------
CONTAINERS -- 1.3%
Owens-Illinois, Inc.*...................... 190,000 6,448,125
-------------
CONTRACT DRILLING -- 1.0%
Diamond Offshore Drilling, Inc............. 93,800 5,176,588
-------------
DEPARTMENT/DISCOUNT STORES -- 6.1%
Consolidated Stores Corp.*................. 205,906 8,622,314
Costco Companies, Inc.*.................... 228,800 8,608,600
Fred Meyer, Inc............................ 128,400 6,837,300
Kohls Corp.*............................... 84,100 5,971,100
-------------
30,039,314
-------------
DRUGS/PHARMACEUTICALS -- 1.8%
Elan Corp. PLC-Sponsored ADR*.............. 175,800 8,800,987
-------------
ELECTRIC UTILITIES -- 2.3%
AES Corp.*................................. 261,400 11,436,250
-------------
ELECTRONIC DATA PROCESSING -- 2.3%
Fiserv, Inc*............................... 136,300 5,980,162
E*Trade Group, Inc.*....................... 120,000 5,640,000
-------------
11,620,162
-------------
ELECTRONICS/MUSIC CHAINS -- 1.0%
CompUSA, Inc.*............................. 138,100 4,833,500
-------------
ENVIRONMENTAL SERVICES -- 3.0%
USA Waste Services, Inc.................... 172,165 6,865,079
Allied Waste Industries, Inc.*............. 407,500 7,793,438
-------------
14,658,517
-------------
GAMING -- 1.9%
Carnival Corp. -- Class A.................. 200,000 9,250,000
-------------
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
HOMEBUILDING -- 0.7%
Centex Construction Products, Inc.......... 60,100 $ 3,508,337
-------------
HOSPITALS -- 2.7%
Healthsouth Corp.*......................... 300,000 8,006,250
Vencor, Inc.*.............................. 127,400 5,255,250
-------------
13,261,500
-------------
INDUSTRIAL ENGINEERING/CONSTRUCTION -- 0.8%
Empresas ICA Sociedad Controlladora S.A. de
C.V.-ADR................................. 227,500 3,995,469
-------------
LODGING -- 2.9%
Four Seasons Hotel, Inc.................... 118,100 4,842,100
Host Marriott Corp......................... 427,100 9,716,525
-------------
14,558,625
-------------
MANAGED HEALTH CARE/HMO'S/PPO'S -- 1.6%
Wellpoint Health Networks, Inc.*........... 135,000 7,821,562
-------------
MEDICAL/HEALTH SERVICES -- 0.6%
Concentra Managed Care, Inc.*.............. 82,600 2,916,812
-------------
MEDICAL SUPPLIES -- 0.9%
Sybron International Corp.*................ 104,700 4,495,556
-------------
MULTI-LINE INSURERS -- 1.5%
Provident Companies, Inc................... 105,000 7,343,437
-------------
OIL/GAS PRODUCTION -- 4.1%
Devon Energy Corp.......................... 199,900 8,795,600
Santa Fe Energy Resources, Inc............. 440,400 5,505,000
Valero Energy Corp......................... 185,500 6,086,719
-------------
20,387,319
-------------
OILFIELD SERVICES/EQUIPMENT -- 4.1%
Camco International, Inc................... 90,000 6,277,500
Global Industries, Ltd.*................... 154,800 6,172,650
Smith International, Inc.*................. 100,000 7,768,750
-------------
20,218,900
-------------
OTHER COMMERCIAL/INDUSTRIAL SERVICES -- 4.4%
Information Management Resources, Inc.*.... 155,000 4,417,500
Mastec, Inc.*.............................. 84,400 3,692,500
Robert Half International, Inc.*........... 210,000 8,688,750
Tyco International Limited................. 60,000 4,923,750
-------------
21,722,500
-------------
OTHER HEALTH TECHNOLOGY/SERVICES -- 1.9%
McKesson Corp.............................. 91,750 9,352,766
-------------
OTHER PRODUCERS/MANUFACTURING -- 1.1%
Knoll, Inc.*............................... 170,000 5,695,000
-------------
OTHER TRANSPORTATION -- 1.3%
GATX Corp.................................. 92,700 6,263,044
-------------
PAPER -- 1.3%
Fort James Corp............................ 62,662 2,870,703
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
13
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1997 (UNAUDITED) -- CONTINUED
- --------------------------------------------------------------------------------
CORE GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- ---------------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCKS (Continued)
- ---------------------------------------------------------
PAPER (CONTINUED)
<TABLE>
<S> <C> <C>
Jefferson Smurfit Corp.*................... 185,000 $ 3,700,000
-------------
6,570,703
-------------
PRINTING/FORMS -- 1.2%
Applied Graphics Technologies, Inc.*....... 110,000 6,187,500
-------------
PUBLISHING -- 1.3%
Valassis Communications, Inc............... 195,000 6,215,625
-------------
RENTAL/LEASING COMPANIES -- 1.0%
Comdisco, Inc.*............................ 150,000 4,884,375
-------------
RESTAURANTS -- 1.6%
CKE Restaurants, Inc....................... 190,000 7,980,000
-------------
SEMICONDUCTORS/ELECTRONIC COMPONENTS -- 4.0%
Analog Devices, Inc.*...................... 193,300 6,475,550
ASM Lithography Holding NV................. 23,800 2,350,250
Integrated Process Equipment Corp.*........ 223,100 8,226,813
PRI Automation, Inc.*...................... 45,500 2,661,750
-------------
19,714,363
-------------
SOAPS/COSMETICS -- 1.6%
Revlon, Inc. -- Class A*................... 160,600 7,959,738
-------------
SOFTWARE -- 5.5%
BMC Software, Inc .*....................... 121,500 7,867,125
Compuware Corp.*........................... 134,900 8,161,450
Electronics for Imaging, Inc.*............. 131,400 6,701,400
Qad, Inc. -- Class A*...................... 128,900 2,400,763
Visio Corp.*............................... 50,000 2,087,500
-------------
27,218,238
-------------
SPECIALTY CHAINS -- 2.5%
Borders Group, Inc.*....................... 346,900 9,539,750
Zale Corp.................................. 100,000 2,593,750
-------------
12,133,500
-------------
SPECIALTY INSURERS -- 1.6%
MGIC Investment Corp.*..................... 137,600 7,886,200
-------------
TELECOMMUNICATIONS EQUIPMENT -- 4.1%
Advanced Fibre Communications, Inc.*....... 178,200 7,306,200
Nokia Corp.-Sponsored ADR -- Class A....... 65,800 6,172,863
Pairgain Technologies, Inc.*............... 243,800 6,948,300
-------------
20,427,363
-------------
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------------
TELEPHONE -- 1.8%
Nextlink Communications, Inc............... 47,000 $ 1,128,000
Teleport Communications Group, Inc. --
Class A*................................. 170,100 7,633,238
-------------
8,761,238
-------------
TRUCKING -- 1.1%
Consolidated Freightways, Inc.............. 130,200 5,671,837
-------------
WHOLESALE DISTRIBUTION -- 1.0%
Danka Business Systems-Sponsored ADR....... 107,200 4,770,400
-------------
TOTAL COMMON STOCKS
(Cost $370,517,777)......................................... 464,707,012
-------------
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
- ---------------------------------------------------------------------------------
COMMERCIAL PAPER -- 1.6%
- ---------------------------------------------------------------------------------
Associates Corp. of North America
6.370%, 10/01/97......................... $ 6,871,000 6,871,000
J.P. Morgan & Co., Inc.
6.250%, 10/01/97......................... 984,000 984,000
-------------
TOTAL COMMERCIAL PAPER
(Cost $7,855,000)........................................... 7,855,000
-------------
- ---------------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 4.8%
- ---------------------------------------------------------------------------------
J.P. Morgan & Co., Inc. $23,516,000 at
5.970%, (Agreement dated 9/30/97; to be
repurchased at $23,519,000 on 10/01/97;
collateralized by $24,080,000 FNMA Notes,
6.30% due 9/25/02) (VALUE $24,019,198)
(Cost $23,516,000)....................... 23,516,000 23,516,000
-------------
TOTAL INVESTMENTS -- 100.3%
(Cost $401,888,777)......................................... 496,078,012
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.3%)............... (1,316,671)
-------------
NET ASSETS -- 100.0%.......................................... $ 494,761,341
-------------
</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
Sandra K. Durn,
Portfolio Manager
Stan Rogers,
Portfolio Manager
GOAL: The Nicholas-Applegate Income & Growth Fund seeks to maximize total
return by investing primarily in convertible and equity securities of U.S.
companies.
REVIEW AND OUTLOOK: A buoyant bond market and the equity market's
record-breaking ascent bolstered returns for our Income & Growth Fund from April
1 through September 30, 1997. The Fund rose 21.6% during the six-month period,
versus a 19.7% gain for the First Boston Convertible Index. Issue selection and
the strong gains among smaller-cap stocks contributed to its outperforming its
benchmark.
The Fund is comprised primarily of convertible bonds issued by small- and
mid-cap companies. Reflecting the smaller-cap nature of the convertible market,
of the total number of firms issuing convertible bonds, about two-thirds have
market capitalizations less than $2 billion.
The Fund continued to deliver returns consistent with our objective of
achieving asymmetrical market participation. We seek to capture approximately
70% to 80% of the upside performance of the underlying equities with only 50% or
less of the downside exposure. Over the first six months of the fiscal year, the
Fund participated in 81.0% of the gain of the S&P 500 Index, which was up 26.2%
in the period.
As an example of downside protection, when the S&P 500 Index dipped 5.6% in
August amid the downturn in the large- and mid-cap segments of the market, the
Income & Growth Fund was off just 1.2% -- a participation rate of less than 22%.
During the first six months of the fiscal year, we increased the Fund's
allocation among select issues in the technology, retail trade, and
commercial/industrial sectors.
Among the Fund's best-performing holdings was Airtouch Communications, a major
wireless telecommunications holding company, with significant cellular interests
in the United States, Europe, and Asia. The company is one the largest providers
of paging services in the United States, and is forecast to benefit from the
projected growth in infrastructure and technology development.
Ahmanson, one of the largest thrift institutions in the country, also made a
positive contribution to the Fund during the period. Forecasts of strong
earnings for the company, combined with its recent acquisition of Coast Savings
Financial, which is expected to result in significant cost savings, should
further enhance Ahmanson's attractiveness.
We believe convertibles continue to provide investors with appreciation
potential and downside protection. Looking ahead, we remain confident of our
bottom-up approach and our ability to reward shareholders with long-term results
and limited downside risk.
REPRESENTATIVE HOLDINGS
Ahmanson
Airtouch Communications
Baker Hughes
Continental Airlines
Costco
Diamond Offshore Drilling
Hilton Hotels
Omnicom
Penn Treaty American
Worldcom
- --------------------------------------------------------------------------------
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 09/30/97
12/31/87 9,124 9,978 1 Year
12/31/88 10,873 11,316 20.28%
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
9/30/97 44,008 34,817
<CAPTION>
<S> <C> <C>
12/31/86
12/31/87 5 Years 10 Years
12/31/88 16.53% 13.97%
12/31/89
12/31/90
12/31/91
12/31/92
12/31/93
12/31/94
12/31/95
12/31/96
9/30/97
</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 09/30/97
12/31/87 9,567 9,978 1 Year
12/31/88 11,328 11,316 21.41%
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
9/30/97 43,472 34,817
<CAPTION>
<S> <C> <C>
12/31/86
12/31/87 5 Years 10 Years
12/31/88 16.90% 13.88%
12/31/89
12/31/90
12/31/91
12/31/92
12/31/93
12/31/94
12/31/95
12/31/96
9/30/97
</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 09/30/97
12/31/87 9,567 9,978 1 Year
12/31/88 11,328 11,316 26.15%
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
9/30/97 43,323 34,817
<CAPTION>
<S> <C> <C>
12/31/86
12/31/87 5 Years 10 Years
12/31/88 17.03% 13.84%
12/31/89
12/31/90
12/31/91
12/31/92
12/31/93
12/31/94
12/31/95
12/31/96
9/30/97
</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 guarantee 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 SEPTEMBER 30, 1997 (UNAUDITED)
- ------------------------------------------------------------------------
INCOME & GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
COMMON STOCKS -- 8.8%
- ----------------------------------------------------------------------------
ELECTRIC UTILITIES -- 0.0%
Pacific Gas and Electric Corp.............. 1 $ 23
------------
GAS UTILITIES -- 1.1%
MCN Energy Group, Inc...................... 69,530 2,224,960
------------
MACHINERY/EQUIPMENT -- 0.7%
Cooper Industries, 6.00%, "WYMN"........... 57,100 1,313,300
------------
OIL/GAS PRODUCTION -- 0.0%
Valero Energy Corp......................... 2 66
------------
REAL ESTATE INVESTMENT TRUSTS -- 6.0%
Bay Apartment Communities, Inc............. 32,286 1,289,422
Cali Realty Corp........................... 40,730 1,695,386
CCA Prison Realty Trust.................... 12,500 471,875
CenterPoint Properties Corp................ 42,700 1,550,544
Crescent Real Estate Equities Co........... 45,160 1,812,045
Equity Residential Properties Trust........ 27,040 1,475,370
FelCor Suite Hotels, Inc................... 20,800 854,100
Reckson Associates Realty Corp............. 69,866 1,860,182
Spieker Properties, Inc.................... 34,021 1,379,977
------------
12,388,901
------------
SPECIALTY INSURERS -- 1.0%
Merrill, 6.50%, "MTG" (Strypes)............ 21,900 2,113,350
------------
TOTAL COMMON STOCKS
(Cost $13,545,165)....................................... 18,040,600
------------
- ----------------------------------------------------------------------------
PREFERRED STOCKS -- 31.4%
- ----------------------------------------------------------------------------
BROADCASTING -- 2.4%
Chancellor Media Corp.,* Series A,
12.25%................................... 11,700 1,602,900
Evergreen Media Corp., 6.00%............... 41,310 2,463,108
Sinclair Broadcast Group, 6.00%............ 14,100 761,400
------------
4,827,408
------------
DRUGS/PHARMACEUTICALS -- 2.1%
McKesson Corp., 144A $2.50................. 60,700 4,385,575
------------
ELECTRIC UTILITIES -- 3.7%
AES Trust I, Series A, 5.375%.............. 67,920 4,635,540
Calenergy Capital Trust, 6.25%............. 44,440 2,877,490
------------
7,513,030
------------
FINANCE COMPANIES -- 3.4%
Finova Finance Trust, 5.50%................ 46,920 3,090,855
H.F. Ahmanson, Series D, 6.00%............. 32,398 3,790,566
------------
6,881,421
------------
LODGING -- 2.0%
Host Marriott Financial Trust,
6.75%, 144A.............................. 52,725 3,585,300
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
</TABLE>
LODGING (CONTINUED)
<TABLE>
<S> <C> <C>
Host Marriott Financial Trust, $13.375..... 8,010 $ 544,680
------------
4,129,980
------------
MULTI-LINE INSURERS -- 1.5%
American Bankers Insurance, Series B,
$3.125................................... 37,580 3,081,560
------------
OIL REFINING/MARKETING -- 1.4%
Tosco Financing Trust, 144A................ 41,400 2,546,100
Tosco Corp., Series F, $4.3750............. 6,400 393,600
------------
2,939,700
------------
OIL/GAS PRODUCTION -- 1.7%
Devon Financing Trust, $3.25 Pfd Cv........ 5,700 458,850
Devon Financing Trust, $6.50, 144A......... 37,876 3,053,752
------------
3,512,602
------------
OTHER CONSUMER NON-DURABLES -- 0.9%
Ralston Purina Co., 7.00%.................. 28,300 1,906,712
------------
OTHER PRODUCERS/MANUFACTURING -- 1.1%
Corning Delaware LP, 6.00%................. 29,200 2,188,175
------------
OTHER TRANSPORTATION -- 1.2%
Hvide Capital Trust, 6.50%................. 38,600 2,557,250
------------
PIPELINES -- 1.1%
Williams Companies, $3.50.................. 20,600 2,278,875
------------
PUBLISHING -- 1.3%
Houston Industries, Inc., 7.00%............ 52,800 2,745,600
------------
SAVINGS & LOAN/THRIFTS -- 0.7%
Sovereign Bancorp, Series B, 6.25%......... 13,200 1,404,150
------------
TELECOMMUNICATIONS EQUIPMENT -- 1.8%
LM Ericcson Telephone Co., ADR............. 550,470 3,646,864
------------
TELECOMMUNICATION SERVICES -- 3.9%
Airtouch Communications, Series C, 4.25%... 51,718 2,918,835
SBC Communications, Inc., 7.75%............ 51,000 2,492,625
Worldcom, Inc., 8.00%...................... 20,240 2,489,520
------------
7,900,980
------------
TRUCKING -- 1.2%
CNF Trust I, Series A, 5.00%............... 39,000 2,510,625
------------
TOTAL PREFERRED STOCKS
(Cost $53,412,622)....................................... 64,410,507
------------
<CAPTION>
PAR
VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
CORPORATE BONDS -- 56.6%
- ----------------------------------------------------------------------------
ADVERTISING -- 2.2%
Omnicom Group
4.250%, 01/03/07 $3,441,000 4,473,300
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
17
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1997 (UNAUDITED) -- CONTINUED
- --------------------------------------------------------------------------------
INCOME & GROWTH FUND
<TABLE>
<CAPTION>
PAR
VALUE VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
CORPORATE BONDS (Continued)
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
AEROSPACE -- 0.9%
Morgan Stanley Group, Series MTNC 0.000%,
09/30/00 $1,440,000 $ 1,864,800
------------
AIRLINES -- 0.3%
Continental Airlines
6.750%, 04/15/06......................... 480,000 680,400
------------
AUTOMOTIVE EQUIPMENT -- 1.0%
Tower Automotive, Inc.
5.000%, 08/01/04......................... 1,960,000 2,107,000
------------
BUILDING MATERIALS -- 1.3%
Cemex SA Euro,
4.250%, 11/01/97......................... 920,000 915,400
Hexcel Corp.
7.000%, 08/01/03......................... 844,000 1,654,240
------------
2,569,640
------------
BUILDING MATERIALS CHAINS -- 2.2%
Home Depot, Inc.
3.250%, 10/01/01......................... 3,621,000 4,490,040
------------
CLOTHING CHAINS -- 0.4%
The Men's Wearhouse, Inc.
5.250%, 03/01/03......................... 681,000 850,399
------------
COMPUTERS/OFFICE AUTOMATION -- 7.9%
Adaptec, Inc.
4.750%, 02/01/04......................... 994,000 1,120,735
Adaptec, Inc., 144A
4.750%, 02/01/04......................... 984,000 1,109,460
C-Cube Microsystems, Inc.
5.875%, 11/01/05......................... 500,000 608,125
Comverse Technology, Inc.
5.750%, 10/01/06......................... 1,408,000 1,860,320
Data General Corp.
6.000%, 05/15/04......................... 723,000 896,520
EMC Corp.
3.250%, 03/15/02......................... 2,780,000 3,898,949
Safeguard Scientifics
6.000%, 02/01/06......................... 1,245,000 1,301,025
Wind River Systems, Inc.
5.000%, 08/01/02......................... 1,727,000 1,770,175
Xerox Credit Corp., Series MTNE
2.875%, 07/01/02......................... 3,539,000 3,654,017
------------
16,219,326
------------
CONTRACT DRILLING -- 2.8%
Diamond Offshore Drilling
3.750%, 02/15/07......................... 858,000 1,231,230
Loews Corp.
3.125%, 09/15/07......................... 2,474,000 2,576,053
Nabors Industries, Inc.
5.000%, 05/15/06......................... 898,000 2,004,785
------------
5,812,068
------------
<CAPTION>
PAR
VALUE VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
DEPARTMENT/DISCOUNT STORES -- 3.0%
Costco Companies, Inc.
0.000%, 08/19/17......................... $6,678,000 $ 3,597,772
Federated Department Stores
5.000%, 10/01/03......................... 1,861,000 2,533,286
------------
6,131,058
------------
DRUG CHAINS -- 1.4%
Rite Aid Corp.
5.250%, 09/15/02......................... 2,883,000 2,951,471
------------
DRUGS/PHARMACEUTICALS -- 4.1%
Elan International Finance
0.000%, 10/16/12......................... 2,284,000 2,503,835
Sandoz Capital BVI LTD.
2.000%, 10/06/02......................... 900,000 1,320,750
Sandoz Capital BVI LTD. Euro,
2.000%, 10/06/02......................... 1,470,000 2,162,811
Sepracor, Inc. Euro,
7.000%, 12/01/02......................... 649,000 1,138,995
Sepracor, Inc.
7.000%, 12/01/02......................... 685,000 1,202,175
------------
8,328,566
------------
ELECTRONIC DATA PROCESSING -- 2.3%
Automatic Data Processing
0.000%, 02/20/12......................... 5,177,000 3,365,050
National Data Corp.
5.000%, 11/01/03......................... 1,360,000 1,411,000
------------
4,776,050
------------
ELECTRONIC INSTRUMENTS/DIVERSIFIED -- 3.4%
ADT Operations, Inc.
0.000%, 07/06/10......................... 3,358,000 3,731,577
SCI Systems, Inc.
5.000%, 05/01/06......................... 1,545,000 3,144,075
------------
6,875,652
------------
ENVIRONMENTAL SERVICES -- 2.5%
United Waste Systems, Inc., 144A
4.500%, 06/01/01......................... 45,000 63,394
US Filter Corp.
4.500%, 12/15/01......................... 897,000 1,111,159
USA Waste Services, Inc.
4.000%, 02/01/02......................... 3,498,000 3,839,055
------------
5,013,608
------------
INDUSTRIAL BONDS -- 0.9%
Tecnomatix Technologies
5.250%, 08/15/04......................... 1,612,000 1,791,335
------------
INDUSTRIAL ENGINEERING/CONSTRUCTION -- 1.2%
Empresas ICA Sociedad
5.000%, 03/15/04......................... 3,044,000 2,522,715
------------
LIFE INSURERS -- 0.7%
Penn Treaty American Corp.
6.250%, 12/01/03......................... 1,026,000 1,368,427
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
18
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR
VALUE VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
CORPORATE BONDS (Continued)
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
LODGING -- 3.9%
ARV Assisted Living
6.750%, 04/01/06......................... $1,000,000 $ 946,250
Carematrix Corp.
6.250%, 08/15/04......................... 1,014,000 1,079,910
Hilton Hotels Corp.
5.000%, 05/15/06......................... 3,219,000 3,830,610
Marriott International
0.000%, 03/25/11......................... 1,312,000 864,280
Signature Resorts, Inc.
5.750%, 01/15/07......................... 999,000 1,193,805
------------
7,914,855
------------
MACHINERY/EQUIPMENT -- 1.9%
Thermo Electron Corp.
4.250%, 01/01/03......................... 3,329,000 3,919,898
------------
MANAGED HEALTHCARE/HMO'S/PPO'S -- 1.1%
Tenet Healthcare
6.000%, 12/01/05......................... 1,879,000 2,271,241
------------
OILFIELD SERVICES/EQUIPMENT -- 1.9%
Baker Hughes, Inc.
0.000%, 05/05/08......................... 2,198,000 1,865,553
Key Energy Group, Inc.
5.000%, 09/15/04......................... 732,000 742,980
Pride Petroleum Services, Inc.
6.250%, 02/15/06......................... 414,000 1,188,698
------------
3,797,231
------------
OTHER COMMERCIAL/INDUSTRIAL SERVICES -- 1.0%
Corestaff, Inc.
2.940%, 08/15/04......................... 2,315,000 2,109,544
------------
OTHER PRODUCERS/MANUFACTURING -- 2.9%
Alfa S.A. DE C.V. Euro,
8.000%, 09/15/00......................... 1,180,000 2,340,790
Alfa S.A. DE C.V.
8.000%, 09/15/00......................... 1,000,000 1,960,000
Halter Marine Group, Inc.
4.500%, 09/15/04......................... 1,451,000 1,659,581
------------
5,960,371
------------
<CAPTION>
PAR
VALUE VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
SEMICONDUCTORS/ELECTRONIC COMPONENTS -- 2.5%
Analog Devices
3.500%, 12/01/00......................... $1,179,000 $ 1,974,825
National Semiconductor
6.500%, 10/01/02......................... 1,450,000 1,671,125
Xilinx, Inc.
5.250%, 11/01/02......................... 1,304,000 1,519,160
------------
5,165,110
------------
SPECIALTY CHAINS -- 1.7%
Staples, Inc.
4.500%, 10/01/00......................... 2,544,000 3,339,000
Staples Inc. Euro,
4.500%, 10/01/00......................... 150,000 198,375
------------
3,537,375
------------
TELECOMMUNICATIONS EQUIPMENT -- 0.7%
Motorola, Inc.
0.000%, 09/27/13......................... 1,619,000 1,380,198
------------
TELECOMMUNICATIONS SERVICES -- 0.5%
Smartalk Teleservices
5.750%, 09/15/04......................... 1,028,000 1,117,950
------------
TOTAL CORPORATE BONDS
(Cost $99,284,536)....................................... 115,999,628
------------
- ----------------------------------------------------------------------------
COMMERCIAL PAPER -- 3.9%
- ----------------------------------------------------------------------------
Associates Corp. of North America
6.370%, 10/01/97
(Cost $8,001,000)........................ 8,001,000 8,001,000
------------
TOTAL INVESTMENTS -- 100.7%
(Cost $174,243,323)...................................... 206,451,735
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.7%)............ (1,365,288)
------------
NET ASSETS -- 100.0%....................................... $205,086,447
------------
</TABLE>
- ---------------
* Non-Income Producing Security
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
19
<PAGE>
LARGE CAP GROWTH FUND
PORTFOLIOS A, B, & C
- ------------------------------------------------------------------------
MANAGEMENT TEAM
Jack C. Marshall, Jr.,
Partner, Chief Investment Officer,
Mid/Large Cap Equities
Andrew B. Gallagher,
Portfolio Manager
GOAL: The Nicholas-Applegate Large Cap Growth Fund seeks to maximize long-term
capital appreciation through investment primarily in U.S. companies generally
over $3 billion in market capitalization.
REVIEW AND OUTLOOK: As the stocks of large companies climbed to all-time highs
several times during the period April 1 through September 30, 1997, the Large
Cap Growth Fund was up 38.3% versus a 37.4% gain for its benchmark, the Russell
1000 Growth Index, as well as a 26.2% gain for the S&P 500.
The Fund's outperformance is the direct result of stock selection. U.S.
corporations continue to reap the benefits of improved efficiencies, especially
as a result of retooling their technological infrastructures.
Additionally, the worldwide personal computer market is experiencing extremely
high growth. As a result, the Fund holds several large-cap technology stocks
that are benefiting from such growth.
Relative to the S&P 500 Index, the Fund had a higher weighting in the
technology sector during the third quarter. Within the technology sector, stocks
of telecommunications and computers/office automation companies performed the
best for the Fund during the period.
For example, Nokia, a major supplier of telecommunications systems and the
world's largest maker of mobile phones, delivered strong results. Nokia is well
positioned to benefit from potential deregulation around the world. Because of
its commitment to Latin American markets, Nokia is poised to capitalize on the
strong growth expected in the region. Nextel Communications, another solid
performer, also recorded strong growth in the sales of its wireless
communications products.
Stock selection in the energy sector also contributed to the Fund's
outperformance. Santa Fe International, an oil and gas contract drilling
company, was one of the Fund's best performers. The company has shown tremendous
growth, boasting second quarter earnings by more than 166% versus the prior year
period. Operating drilling rigs in 16 countries, Santa Fe is well positioned to
capitalize on accelerating worldwide land and offshore rig activity.
Reflecting the strength of our stock selection, all of the Fund's holdings
reported second quarter earnings results which met or exceeded analysts'
consensus expectations.
We remain optimistic about the outlook for the Large Cap Growth Fund as we
continue to find promising stocks meeting our criteria in this segment.
REPRESENTATIVE HOLDINGS
Bay Networks
Compuware
Ford Motor Company
Home Depot
Lucent Technologies
Nokia
Santa Fe International
Schlumberger
Time Warner
Westinghouse
- --------------------------------------------------------------------------------
20
<PAGE>
LARGE CAP GROWTH PORTFOLIOS
- ------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LARGE CAP GROWTH PORTFOLIO A RUSSELL 1000 GROWTH INDEX
<S> <C> <C>
12-27-96 $9,475.00 $10,000.00
01-31-97 10,326.23 10,538.08
02-28-97 10,143.82 10,466.42
03-31-97 9,839.81 9,899.98
04-30-97 10,214.76 10,557.34
05-31-97 10,336.36 11,319.26
06-30-97 11,775.35 11,772.03
07-31-97 13,234.60 12,812.68
08-31-97 12,930.59 12,063.14
09-30-97 13,589.28 12,656.77
Total Return
Since Inception
As of 09/30/97
35.89%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LARGE CAP GROWTH PORTFOLIO B RUSSELL 1000 GROWTH INDEX
<S> <C> <C>
12-27-96 $10,000.00 $10,000.00
01-31-97 10,883.92 10,538.08
02-28-97 10,692.23 10,466.42
03-31-97 10,362.09 9,899.98
04-30-97 10,756.12 10,557.34
05-31-97 11,938.23 11,319.26
06-30-97 12,374.87 11,772.03
07-31-97 13,897.76 12,812.68
08-31-97 13,567.63 12,063.14
09-30-97 13,749.20 12,656.77
Total Return
Since Inception
As of 09/30/97
37.49%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LARGE CAP GROWTH PORTFOLIO C RUSSELL 1000 GROWTH INDEX
<S> <C> <C>
12-27-96 $10,000.00 $10,000.00
01-31-97 10,883.92 10,538.08
02-28-97 10,692.23 10,466.42
03-31-97 10,362.09 9,899.98
04-30-97 10,756.12 10,557.34
05-31-97 11,938.23 11,319.26
06-30-97 12,374.87 11,772.03
07-31-97 13,897.76 12,812.68
08-31-97 13,578.27 12,063.14
09-30-97 14,170.50 12,656.77
Total Return
Since Inception
As of 09/30/97
41.71%
</TABLE>
The graphs compare a $10,000 investment in the Large Cap Growth Portfolio A
(front load), the Large Cap Growth Portfolio B (back- end load) and the Large
Cap Growth Portfolio C (level load) with a similar investment in the Russell
1000 Growth Index, on a cumulative and average annual total return basis. The
Portfolios calculate their performance based upon the historical performance of
their corresponding series ("Fund") of Nicholas-Applegate Investment Trust,
adjusted to reflect sales charges and Portfolio operating expenses. The
effective date of the Portfolios' registration statements was on 7/21/97.
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 Russell 1000 Growth Index is an unmanaged index containing those companies
among the Russell 1000 Index securities with higher than average price-to-book
ratios and forecasted growth. The Russell 1000 Index contains the top 1,000
securities of the Russell 3000 Index, which comprises the 3,000 largest U.S.
securities as determined by total market capitalization. The Russell 1000 Growth
Index is considered generally representative of the U.S. market for large cap
stocks.
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 guarantee 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 SEPTEMBER 30, 1997 (UNAUDITED)
- ------------------------------------------------------------------------
LARGE CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ------------------------------------------------------------------------
COMMON STOCKS -- 97.0%
- ------------------------------------------------------------------------
APPAREL -- 0.4%
Polo Ralph Lauren Corp. Class A*........... 500 $ 13,094
------------
AUTOMOBILES -- 3.5%
Ford Motor Co.............................. 2,700 122,175
------------
BIOTECHNOLOGY -- 3.3%
Centocor, Inc.*............................ 2,400 114,150
------------
BROADCASTING -- 3.0%
Tele-Communications TCI Ventures Grp Class
A (Investment Co.)....................... 1,855 38,259
Tele-Communications, Inc. Class A*......... 3,245 66,522
------------
104,781
------------
BUILDING MATERIALS CHAINS -- 2.4%
Home Depot,Inc............................. 1,600 83,400
------------
CLOTHING CHAINS -- 2.9%
Nordstrom, Inc............................. 1,600 102,000
------------
COMPUTER/OFFICE AUTOMATION -- 5.6%
Bay Networks, Inc.*........................ 2,700 104,287
Cisco Systems, Inc .*...................... 700 51,144
Sun Microsystems, Inc.*.................... 800 37,450
------------
192,881
------------
CONTRACTING DRILLING -- 4.4%
Noble Drilling Corp.*...................... 3,700 119,325
Santa Fe International Corp.*.............. 700 32,550
------------
151,875
------------
DEPARTMENT/DISCOUNT STORES -- 9.1%
CVS Corp................................... 2,000 113,750
Dayton-Hudson Corp......................... 1,800 107,887
Wal-Mart Stores, Inc....................... 2,600 95,225
------------
316,862
------------
ELECTRONIC INSTRUMENTS/DIVERSIFIED -- 0.3%
Teradyne, Inc.............................. 200 10,762
------------
ENTERTAINMENT -- 3.3%
Time Warner, Inc........................... 2,100 113,794
------------
ENVIRONMENTAL SERVICES -- 2.6%
USA Waste Services, Inc.*.................. 2,300 91,712
------------
FINANCE COMPANIES -- 2.1%
American Express Co........................ 900 73,687
------------
HOSPITALS -- 1.0%
Healthsouth Corp.*......................... 1,300 34,694
------------
OIL/GAS PRODUCTION -- 8.2%
Anadarko Petroleum Corp.................... 1,500 107,719
Apache Corp................................ 2,800 120,050
Enron Oil & Gas Co......................... 2,600 57,850
------------
285,619
------------
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ------------------------------------------------------------------------
OILFIELD SERVICES/EQUIPMENT -- 3.4%
Schlumberger LTD........................... 1,400 $ 117,862
------------
OTHER COMMERCIAL/INDUSTRIAL SERVICES -- 2.0%
Robert Half International, Inc.*........... 1,650 68,269
------------
OTHER CONSUMER SERVICES -- 0.7%
At Home Corp. Series A*.................... 1,000 23,125
------------
OTHER HEALTH TECHNOLOGY/SERVICES -- 3.3%
HBO & Co................................... 3,000 113,250
------------
OTHER PRODUCERS/MANUFACTURING -- 2.4%
Tyco International LTD..................... 1,000 82,062
------------
OTHER TECHNOLOGY -- 3.6%
Westinghouse Electric Corp................. 4,600 124,488
------------
SOFTWARE -- 3.5%
Compuware Corp.*........................... 2,000 121,000
------------
SPECIALTY CHAINS -- 3.5%
Gap, Inc................................... 2,400 120,150
------------
SPECIALTY INSURERS -- 3.6%
MGIC Investment Corp....................... 2,200 126,088
------------
TELECOMMUNICATIONS EQUIPMENT -- 11.2%
Boston Technology, Inc.*................... 2,500 84,688
CIENA Corp................................. 1,300 64,391
Lucent Technologies, Inc................... 600 48,825
MAS Technology LTD Sponsored ADR*.......... 500 11,375
Newbridge Networks Corp.*.................. 1,300 77,838
Nokia Corp.-Sponsored ADR Class A.......... 1,100 103,194
------------
390,311
------------
TELECOMMUNICATIONS SERVICES -- 5.7%
Nextel Communications, Inc. Class A*....... 3,800 109,725
Paging Network, Inc.*...................... 7,000 88,813
------------
198,538
------------
TOBACCO PRODUCTS -- 2.0%
Philip Morris Cos., Inc.................... 1,700 70,656
------------
TOTAL COMMON STOCKS
(Cost $3,190,902)...................................... 3,367,285
------------
TOTAL INVESTMENTS -- 97.0%
(Cost $3,190,902)...................................... 3,367,285
OTHER ASSETS IN EXCESS OF LIABILITIES -- 3.0%............ 105,119
------------
NET ASSETS -- 100.0%..................................... $ 3,472,404
------------
</TABLE>
- ---------------
* Non-Income Producing Security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
22
<PAGE>
BALANCED GROWTH FUND
PORTFOLIOS A, B, & C
- ------------------------------------------------------------------------
MANAGEMENT TEAM
Catherine Somhegyi,
Partner, Chief Investment Officer,
Global Equity Management
Fred S. Robertson,
Partner, Chief Investment Officer,
Fixed Income Management
Lawrence S. Speidell, CFA,
Partner, Director of Global/Systematic
Portfolio Management
John J. Kane,
Partner, Senior Portfolio Manager
James E. Kellerman,
Partner, Portfolio Manager
Malcom S. Day, CFA,
Portfolio Manager
Susan Malone,
Portfolio Manager
GOAL: The 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: The Fund climbed 29.7% for the six-month period ending
September 30 versus an 18.4% gain for a balanced index comprised of 60% S&P 500
Index and 40% Lehman Government/ Corporate Bond Index.
Among the Fund's top performers were electronics manufacturer Avid Technology
Inc. and Unitrode Corporation, which assembles semiconductors and
telecommunications equipment.
Fluctuating interest rates affected government debt securities held by the
Fund. The Federal Reserve Board raised short-term interest rates in late March,
resulting in a mild sell-off in the first half of April. A reported increase in
real GDP to 5.9% also affected bonds negatively. Bonds did well in July
following Alan Greenspan's Humphrey-Hawkins testimony before Congress, and
leveled off in August prompted by a climb in interest rates and stronger than
expected economic reports. Lower than predicted results from the producer price
index and retail sales in early September again boosted the bond market in spite
of increased production during August. Weak housing starts spurred a rally
through the end of the period.
Our long-term outlook for fixed-income investing is positive, in spite of
short-term cyclical fluctuations in the bond market. We expect economic growth
to continue to slow over the short-term and then re-accelerate into 1998. We are
confident that the combination of our disciplined style of selecting dynamic
growth stocks and the benefits of diversification offered by fixed-income
securities will continue to deliver favorable long-term results.
REPRESENTATIVE HOLDINGS
Airborne Freight
Compaq Computer
Dell Computer
North Fork Bancorporation
Robert Half International
TJX Companies
Australian Govt. Debenture 9.50 8/15/03
Cox Communications Debenture 6.69 9/20/04
General Electric Note 7.50 8/21/35
United States Treasury Note 6.25 1/31/02
- --------------------------------------------------------------------------------
23
<PAGE>
BALANCED GROWTH PORTFOLIOS
- ------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ANNUALIZED TOTAL RETURNS AS OF 09/30/97
1 YEAR 3 YEARS SINCE INCEPTION
18.95% 17.81% 13.68%
Balanced Growth Portfolio A Balanced 60/40 Index
<S> <C> <C> <C>
4/19/1993 $9,475 $10,000
6/30/1993 10,464 10,168
9/30/1993 11,058 10,461
12/31/1993 10,737 10,594
3/31/1994 10,361 10,220
6/30/1994 9,746 10,196
9/30/1994 10,250 10,516
12/31/1994 10,061 10,533
3/31/1995 10,694 11,358
6/30/1995 11,682 12,303
9/30/1995 12,605 12,982
12/31/1995 12,419 13,695
3/31/1996 12,850 14,001
6/30/1996 13,597 14,404
9/30/1996 14,092 14,780
12/31/1996 14,454 15,701
3/31/1997 13,716 15,904
6/30/1997 15,459.1 17,775.9
9/30/1997 17,690.7 18,834.7
</TABLE>
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
20.02% 18.68% 14.22%
Balanced Growth Portfolio B Balanced 60/40 Index
<S> <C> <C> <C>
19-Apr-93 $10,000.00 $10,000.00
30-Jun-93 $11,035.45 $10,167.89
30-Sep-93 $11,660.45 $10,460.54
31-Dec-93 $11,305.97 $10,593.91
31-Mar-94 $10,886.19 $10,220.09
30-Jun-94 $10,223.88 $10,196.47
30-Sep-94 $10,736.94 $10,516.10
31-Dec-94 $10,522.39 $10,533.05
31-Mar-95 $11,156.72 $11,358.01
30-Jun-95 $12,180.97 $12,302.76
30-Sep-95 $13,122.78 $12,982.35
31-Dec-95 $12,902.86 $13,694.89
31-Mar-96 $13,345.78 $14,001.13
30-Jun-96 $14,106.25 $14,403.65
30-Sep-96 $14,606.34 $14,779.90
31-Dec-96 $14,962.03 $15,701.27
31-Mar-97 $14,160.40 $15,904.46
30-Jun-97 $15,957.09 $17,775.90
30-Sep-97 $18,061.47 $18,834.70
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ANNUALIZED TOTAL RETURNS AS OF 09/30/97
1 YEAR 3 YEARS SINCE INCEPTION
24.69% 19.22% 14.40%
Balanced Growth Portfolio C Balanced 60/40 Index
<S> <C> <C> <C>
4/19/1993 $10,000 $10,000
6/30/1993 11,039 10,168
9/30/1993 11,661 10,461
12/31/1993 11,305 10,594
3/31/1994 10,891 10,220
6/30/1994 10,228 10,196
9/30/1994 10,738 10,516
12/31/1994 10,522 10,533
3/31/1995 11,161 11,358
6/30/1995 12,184 12,303
9/30/1995 13,132 12,982
12/31/1995 12,920 13,695
3/31/1996 13,346 14,001
6/30/1996 14,098 14,404
9/30/1996 14,591 14,780
12/31/1996 14,941 15,701
3/31/1997 14,153 15,904
6/30/1997 15932.24 17775.9
9/30/1997 18194.24 18834.7
</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. Portfolio B calculates its performance based upon the
historical performance of its corresponding series ("Fund") of
Nicholas-Applegate Investment Trust, adjusted to reflect sales charges and
Portfolio operating expenses. The effective date of Portfolio B's registration
statement was on 5/31/95. 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 guarantee 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.
- --------------------------------------------------------------------------------
24
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1997 (UNAUDITED)
- ------------------------------------------------------------------------
BALANCED GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
COMMON STOCKS -- 63.3%
- ----------------------------------------------------------------------------
AIR FREIGHT/SHIPPING -- 1.5%
Airborne Freight Corp...................... 3,700 $ 224,081
Expeditors International Of Washington,
Inc...................................... 5,800 242,875
------------
466,956
------------
AIRLINES -- 0.6%
Continental Airlines Holding, Inc. *....... 4,700 185,062
------------
ALCOHOLIC BEVERAGES -- 0.7%
Canandaigua Wine Co........................ 4,800 226,200
------------
APPAREL -- 1.8%
Jones Apparel Group, Inc. *................ 3,700 199,800
Kellwood Co................................ 5,900 209,081
Stride Rite Corp........................... 11,100 150,544
------------
559,425
------------
AUTOMOTIVE EQUIPMENT -- 1.4%
Federal-Mogul Corp......................... 5,200 193,050
SPX Corp................................... 4,000 234,500
------------
427,550
------------
BROADCASTING -- 0.0%
Optel, Inc. *.............................. 225 2
------------
BUILDING MATERIALS CHAINS -- 0.6%
Centex Construction Products, Inc.......... 6,600 195,525
------------
CATALOG/OUTLET STORES -- 0.5%
Lands' End, Inc............................ 4,900 150,981
------------
CLOTHING CHAINS -- 2.8%
Burlington Coat Factory, Inc............... 8,900 188,013
Ross Stores, Inc........................... 11,400 389,025
TJX Companies, Inc......................... 9,200 281,175
------------
858,213
------------
COAL MINING -- 0.2%
Zeigler Coal Holding Co.................... 2,700 63,112
------------
COMPUTERS/OFFICE AUTOMATION -- 6.0%
Compaq Computer Corp. *.................... 5,750 429,812
Creative Tecchnology Ltd. *................ 5,600 143,150
Dell Computer Corp. *...................... 4,600 445,625
EMC Corp. *................................ 4,400 256,850
Quantum Corp. *............................ 7,000 268,187
Western Digital Corp. *.................... 7,200 288,450
------------
1,832,074
------------
CONTRACT DRILLING -- 3.3%
Cliff's Drilling Co. *..................... 4,400 306,350
Global Marine, Inc. *...................... 11,100 369,075
Marine Drilling Co., Inc. *................ 10,700 334,375
------------
1,009,800
------------
DEPARTMENT/DISCOUNT STORES -- 2.3%
Family Dollar Stores, Inc.................. 9,600 219,000
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
</TABLE>
DEPARTMENT/DISCOUNT STORES (CONTINUED)
<TABLE>
<S> <C> <C>
MacFrugals Bargains Close-Outs, Inc. *..... 6,800 $ 207,400
Shopko Stores, Inc......................... 6,500 169,000
Woolworth Corp............................. 4,300 95,137
------------
690,537
------------
ELECTRONIC INSTRUMENTS -- 1.4%
Avid Technology, Inc. *.................... 6,900 224,250
Orbotech, Ltd.............................. 3,700 213,675
------------
437,925
------------
FINANCE COMPANIES -- 1.5%
Green Tree Financial Corp.................. 1,500 70,500
MBNA Corp.................................. 3,100 125,550
Student Loan Marketing Association......... 1,800 278,100
------------
474,150
------------
GROCERY PRODUCTS -- 2.0%
Dean Foods Corp............................ 4,000 185,000
Interstate Bakeries Corp................... 3,800 260,537
Smithfield Foods, Inc. *................... 6,000 180,000
------------
625,537
------------
HOME FURNISHINGS -- 1.8%
Bed Bath and Beyond, Inc. *................ 1,500 52,687
Ethan Allen Interiors, Inc................. 8,800 272,800
Furniture Brands International, Inc. *..... 11,200 211,400
------------
536,887
------------
HOSPITALS -- 0.2%
Health Management Associates, Inc. -- Class
A *...................................... 1,700 53,762
------------
INVESTMENT COMPANIES -- 0.4%
Bear Stearns Co............................ 2,820 124,080
------------
LIFE INSURERS -- 0.2%
Conseco, Inc............................... 1,400 68,337
------------
MANAGED HEALTHCARE/HMO'S/PPO'S -- 0.9%
Oxford Health Plan, Inc. *................. 3,800 284,525
------------
METALS -- 0.5%
Bethlehem Steel Corp....................... 15,500 159,844
------------
MILITARY/DEFENSE TECHNOLOGY -- 0.8%
Rohr, Inc. *............................... 7,900 244,406
------------
MONEY-CENTER BANKS -- 0.8%
North Fork Bancorporation, Inc............. 8,000 232,000
------------
MULTI-LINE INSURERS -- 0.6%
Torchmark Corp............................. 5,000 196,250
------------
OILFIELD SERVICES/EQUIPMENT -- 4.8%
Camco International, Inc................... 4,700 327,825
Cooper Cameron Corp. *..................... 4,400 315,975
EVI, Inc................................... 4,600 294,400
Rowan Cos., Inc. *......................... 2,900 103,313
Tidewater, Inc............................. 2,200 130,350
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
25
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1997 (UNAUDITED) -- CONTINUED
- --------------------------------------------------------------------------------
BALANCED GROWTH FUND
<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 $ 286,150
------------
1,458,013
------------
OTHER COMMERCIAL/INDUSTRIAL SERVICES -- 0.3%
Robert Half International, Inc. *.......... 2,400 99,300
------------
OTHER FINANCIAL SERVICES -- 1.1%
Sunamerica, Inc............................ 8,700 340,931
------------
OTHER HEALTH TECHNOLOGY/SERVICES -- 0.9%
HBO & Co................................... 7,200 271,800
------------
OTHER PRODUCERS/MANUFACTURING -- 1.6%
Crane Co................................... 4,300 176,837
Herman Miller, Inc......................... 5,800 310,300
------------
487,137
------------
PAPER -- 1.1%
Fort James Corp............................ 7,300 334,431
------------
PROPERTY-CASUALTY INSURERS -- 0.8%
Orion Capital Corp......................... 5,400 244,688
------------
PUBLISHING -- 1.4%
Central Newspapers, Inc.................... 3,000 222,750
Valassis Communication, Inc................ 6,200 197,625
------------
420,375
------------
REGIONAL/COMMERCIAL BANKS -- 0.6%
Provident Financial Group.................. 3,600 170,325
------------
RESTAURANTS -- 0.7%
Foodmaker, Inc. *.......................... 11,500 216,344
------------
SAVINGS & LOAN ASSOCIATIONS -- 0.7%
Greenpoint Financial Corp.................. 3,500 221,813
------------
SEMICONDUCTORS/ELECTRONIC COMPONENTS -- 4.4%
Altera Corp. *............................. 2,000 102,500
Dallas Semiconductor Corp.................. 4,700 210,325
Jabil Circuit, Inc. *...................... 7,400 484,700
Unitrode Corp. Commo....................... 2,500 185,313
Vitesse Semiconductor, Inc. *.............. 7,650 379,153
------------
1,361,991
------------
SOFTWARE -- 6.5%
BMC Software, Inc . *...................... 5,400 349,650
Cadence Design Systems, Inc. *............. 1,800 96,300
Compuware Corp. *.......................... 6,100 369,050
Keane, Inc. *.............................. 8,800 279,400
McAfee Associates, Inc. *.................. 6,300 333,900
Microsoft Corp. *.......................... 1,600 211,700
Peoplesoft, Inc. *......................... 5,400 322,650
------------
1,962,650
------------
SPECIALTY CHAINS -- 1.2%
Michaels Stores, Inc. *.................... 5,900 180,319
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
</TABLE>
SPECIALTY CHAINS (CONTINUED)
<TABLE>
<S> <C> <C>
Payless Shoesource, Inc. *................. 3,000 $ 179,062
------------
359,381
------------
SPECIALTY IMPORTS -- 0.6%
Pier 1 Imports, Inc........................ 10,500 188,344
------------
TELEPHONE -- 0.6%
Airtouch Communictions, Inc. *............. 5,300 187,819
------------
TELECOMMUNICATIONS EQUIPMENT -- 2.5%
CellStar Corp. *........................... 7,600 353,400
Tekelec, Inc. *............................ 6,600 224,813
Tellabs, Inc. *............................ 3,800 195,700
------------
773,913
------------
TEXTILES -- 0.7%
Carlisle Cos., Inc......................... 4,500 199,969
------------
TOTAL COMMON STOCKS
(Cost $12,147,100)....................................... 19,402,364
------------
- ----------------------------------------------------------------------------
PREFERRED STOCK -- 0.8%
- ----------------------------------------------------------------------------
BROADCASTING -- 0.4%
Chancellor Media Corp. Series A, 12.250%
*........................................ 1,000 137,000
OTHER COMMUNICATION/INDUSTRIAL SERVICES -- 0.4%
IXC Communications, Inc. *................. 1,000 116,000
------------
TOTAL PREFERRED STOCKS
(Cost $234,000).......................................... 253,000
------------
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
- ----------------------------------------------------------------------------
CORPORATE BONDS -- 9.1%
- ----------------------------------------------------------------------------
AUTOMOBILES -- 0.3%
Chrysler Corp.
7.450%, 02/01/49......................... 100,000 101,344
------------
BANKS -- 0.8%
First Union Corp.
6.875%, 09/15/05......................... 225,000 226,758
------------
COMMERCIAL/INDUSTRIAL SERVICES -- 0.2%
Drypers Corp.
10.25%, 06/15/07......................... 50,000 50,375
------------
ELECTRONIC DATA PROCESSING -- 0.1%
Electronic Retailing Systems, Inc.
0.000%, 02/01/04......................... 50,000 33,500
------------
FINANCIAL SERVICES -- 3.6%
American Resource Corp. Services B
7.450%, 12/15/26......................... 225,000 232,020
Credit Suisse First Boston-London
7.900%, 04/29/49......................... 95,000 100,344
General Electric Capital Services
7.500%, 08/21/35......................... 200,000 213,770
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
26
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
CORPORATE BONDS (Continued)
- ---------------------------------------------------------
FINANCIAL SERVICES (CONTINUED)
<TABLE>
<S> <C> <C>
Hartford Life, Inc.
7.650%, 06/15/27......................... 125,000 $ 130,425
Ocwen Financial Corp.
11.875%, 10/01/03........................ 75,000 84,094
Resource America, Inc.
12.000%, 08/01/04........................ 50,000 52,250
Signature Resorts, Inc.*
9.750%, 10/01/07......................... 100,000 101,000
Suntrust Capital II
7.900%, 06/15/27......................... 200,000 204,640
------------
1,118,543
------------
INDUSTRIAL ENGINEERING/CONSTRUCTION -- 1.1%
Cox Communications Inc
6.690%, 09/20/04......................... 125,000 124,406
Highway Master Comm
13.750%, 09/15/05........................ 75,000 78,750
Musicland Group
9.000%, 06/15/03......................... 150,000 135,000
------------
338,156
------------
MISCELLANEOUS ASSETS -- 0.4%
Arauco
6.950%, 09/15/06......................... 125,000 124,538
------------
MONEY-CENTER BANKS -- 0.5%
ABN Amro Bank NV
7.125%, 06/18/07......................... 150,000 153,797
------------
OTHER COMMERCIAL/INDUSTRIAL SERVICES -- 0.7%
Associated Materials, Inc.
11.500%, 08/15/03........................ 100,000 106,750
Interlake Corp.
12.125%, 03/01/02........................ 100,000 104,500
------------
211,250
------------
RENTAL/LEASING COMPANIES -- 0.4%
Railcar Leasing LLC
7.125%, 01/15/13......................... 125,000 128,438
------------
RESTAURANTS -- 0.2%
Foodmaker, Inc. *
9.250%, 03/01/99......................... 71,000 72,864
------------
TELEPHONE -- 0.8%
Bellsouth Cap.
7.120%, 07/15/47......................... 100,000 100,000
Nextel Communications, Inc. Sr. Disc. Notes
0.000%, 09/01/03......................... 150,000 145,500
------------
245,500
------------
TOTAL CORPORATE BONDS
(Cost $2,743,504)........................................ 2,805,063
------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
FOREIGN BONDS -- 6.1%
- ----------------------------------------------------------------------------
AUSTRALIAN -- 1.3%
Australian Government
9.500%, 08/15/03......................... 475,000 $ 406,877
------------
CANADIAN -- 0.8%
Canadian Government
6.250%, 09/15/98......................... 310,000 228,468
------------
DENMARK -- 1.6%
Kingdom of Denmark
8.000%, 11/15/01......................... 730,000 120,108
Kingdom of Denmark
8.000%, 05/15/03......................... 2,250,000 376,516
------------
496,624
------------
GERMAN -- 2.4%
Global Federal National Mortgage
Association
5.000%, 02/16/01......................... 1,300,000 742,248
------------
TOTAL FOREIGN BONDS
(Cost $1,905,029)........................................ 1,874,217
------------
- ----------------------------------------------------------------------------
CMO'S AND ASSET BACKED SECURITIES -- 4.7%
- ----------------------------------------------------------------------------
BANKS -- 0.4%
Bank Boston Marine Trust
6.570%, 11/15/09......................... 120,000 120,563
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 2.4%
Federal National Mortgage Association
6.500%, 06/25/23......................... 350,000 345,516
Federal National Mortgage Association
6.500%, 07/25/23......................... 400,000 386,500
------------
732,016
------------
FINANCE COMPANIES -- 0.7%
Standard Credit Card Master Trust
5.900%, 02/07/01......................... 200,000 199,813
------------
FINANCIAL SERVICES -- 1.2%
EQCC Home Equity Loan Trust
6.470%, 08/15/10......................... 255,000 255,956
Honda Auto Receivables Corp. Grantor Trust
5.850%, 02/15/03......................... 55,889 55,854
Signet Credit Card Master Trust
5.400%, 02/15/02......................... 65,000 64,533
------------
376,343
------------
TOTAL CMO'S AND ASSET BACKED SECURITIES
(Cost $695,161).......................................... 1,428,735
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
27
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1997 (UNAUDITED) -- CONTINUED
- --------------------------------------------------------------------------------
BALANCED GROWTH FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS -- 13.4%
- ----------------------------------------------------------------------------
U.S. TREASURY BONDS -- 3.9%
10.625%, 08/15/15.......................... 205,000 $ 295,272
6.625%, 02/15/27........................... 890,000 911,502
------------
1,206,774
------------
U.S. TREASURY NOTES -- 9.5%
5.625%, 11/30/98........................... 400,000 399,676
6.250%, 03/31/99........................... 75,000 75,553
6.375%, 03/31/01........................... 780,000 790,085
6.250%, 01/31/02........................... 1,480,000 1,493,779
7.875%, 11/15/04........................... 130,000 142,997
------------
2,902,090
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $4,046,890)........................................ 4,108,864
------------
- ----------------------------------------------------------------------------
MUTUAL FUND -- 1.7%
- ----------------------------------------------------------------------------
Blackrock 2001 Term
(Cost $505,050).......................... 60,000 510,000
------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
COMMERCIAL PAPER -- 1.4%
- ----------------------------------------------------------------------------
J.P. Morgan & Co., Inc.
6.250%, 10/01/97
(Cost $430,000).......................... 430,000 $ 430,000
------------
- ----------------------------------------------------------------------------
WARRANTS -- 0.0%
- ----------------------------------------------------------------------------
ELECTRONIC INSTRUMENTS -- 0.0%
Electronic Retailing Systems, Inc.
(Cost $2,036)............................ 50 3,000
------------
TOTAL INVESTMENTS -- 100.5%
(Cost $23,395,200)....................................... 30,815,243
LIABILITES IN EXCESS OF ASSETS -- (0.5%)................... (147,344)
------------
NET ASSETS -- 100.0%....................................... $ 30,667,899
------------
</TABLE>
- ---------------
* Non-Income Producing Security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
28
<PAGE>
GOVERNMENT INCOME FUND
PORTFOLIOS A, B, & C
- ------------------------------------------------------------------------
MANAGEMENT TEAM
Fred Robertson,
Partner, Chief Investment Officer,
Fixed Income Management
Malcom Day,
Portfolio Manager
James E. Kellerman,
Partner, Senior Portfolio Manager
Susan Malone,
Portfolio Manager
GOAL: The Nicholas-Applegate Government Income Fund seeks to maximize current
income through investing primarily in intermediate-term debt securities of the
U.S. Government and its agencies and instrumentalities.*
REVIEW AND OUTLOOK: The Fund returned 7.83% for the six-month period ending
September 30, as compared to a 6.92% return for its benchmark, the Lehman
Government Bond Index. Performance for the Government Income Fund continued to
be affected by interest rate fluctuations in government debt securities in which
the Fund invests. The Federal Reserve Board raised short-term interest rates in
late March, resulting in a mild sell-off in the first half of April. A reported
increase in real GDP to 5.9% also affected bonds negatively. Retail and motor
vehicle sales fell in April and May, and unemployment claims rose in May and
June, contributing to declining yields.
Fixed-income performance in the third quarter improved in July following Alan
Greenspan's testimony before Congress. Bond prices were buoyed by increasing
liquidity as short-term money supply growth accelerated. Personal income and
factory orders increased more than predicted, but lower than expected results
from the producer price index, retail sales, and housing starts in early
September boosted the bond market.
In spite of short-term cyclical fluctuations in the bond market, the long-term
outlook for fixed-income securities is favorable. We expect economic growth to
continue to slow over the short-term and then to re-accelerate into 1998. The
long-term trend toward disinflation remains intact, increasing the
attractiveness of fixed-income securities, while the short-term outlook is
slightly positive.
- ------------
* The government guarantee of the Fund's portfolio securities does not
guarantee the value of the Fund's shares, which will fluctuate.
- --------------------------------------------------------------------------------
29
<PAGE>
GOVERNMENT INCOME PORTFOLIOS
- ------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ANNUALIZED TOTAL RETURNS AS OF 09/30/97
1 YEAR 3 YEARS SINCE INCEPTION
5.40% 6.59% 5.34%
Government Income Lehman Brothers Government
<S> <C> <C>
Portfolio A Bond Index
19-Apr-93 $9,525.00 $10,000.00
30-Jun-93 9,855.71 10,249.56
30-Sep-93 10,253.46 10,582.10
31-Dec-93 10,219.54 10,546.44
31-Mar-94 9,998.45 10,228.83
30-Jun-94 9,912.93 10,111.52
30-Sep-94 9,915.35 10,154.40
31-Dec-94 9,979.18 10,190.82
31-Mar-95 10,374.36 10,670.35
30-Jun-95 11,010.32 11,332.37
30-Sep-95 11,208.25 11,532.20
31-Dec-95 11,742.17 12,058.96
31-Mar-96 11,381.35 11,785.18
30-Jun-96 11,267.89 11,840.65
30-Sep-96 11,392.78 12,040.75
31-Dec-96 11,799.57 12,392.06
31-Mar-97 11,691.86 12,291.38
30-Jun-97 12,141.09 12,716.45
30-Sep-97 12,607.07 13,142.35
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ANNUALIZED TOTAL RETURNS AS OF 09/30/97
1 YEAR 3 YEARS SINCE INCEPTION
4.92% 6.93% 5.54%
Government Income Lehman Brothers Government
<S> <C> <C>
Portfolio B Bond Index
19-Apr-93 $10,000.00 $10,000.00
30-Jun-93 10,333.94 10,249.56
30-Sep-93 10,740.07 10,582.10
31-Dec-93 10,694.95 10,546.44
31-Mar-94 10,433.21 10,228.83
30-Jun-94 10,315.88 10,111.52
30-Sep-94 10,306.86 10,154.40
31-Dec-94 10,361.01 10,190.82
31-Mar-95 10,749.10 10,670.35
30-Jun-95 11,382.67 11,332.37
30-Sep-95 11,574.95 11,532.20
31-Dec-95 12,147.61 12,058.96
31-Mar-96 11,759.74 11,785.18
30-Jun-96 11,625.64 11,840.65
30-Sep-96 11,743.46 12,040.75
31-Dec-96 12,135.01 12,392.06
31-Mar-97 12,020.16 12,291.38
30-Jun-97 12,463.08 12,716.45
30-Sep-97 12,708.43 13,142.35
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ANNUALIZED TOTAL RETURNS AS OF 09/30/97
1 YEAR 3 YEARS SINCE INCEPTION
<S> <C> <C>
9.98% 7.73% 5.86%
Government Income Lehman Brothers Government
Portfolio C Bond Index
19-Apr-93 $10,000.00 $10,000.00
30-Jun-93 10,331.20 10,249.56
30-Sep-93 10,742.04 10,582.10
31-Dec-93 10,689.58 10,546.44
31-Mar-94 10,428.33 10,228.83
30-Jun-94 10,312.92 10,111.52
30-Sep-94 10,307.07 10,154.40
31-Dec-94 10,359.79 10,190.82
31-Mar-95 10,745.59 10,670.35
30-Jun-95 11,386.13 11,332.37
30-Sep-95 11,568.34 11,532.20
31-Dec-95 12,115.81 12,058.96
31-Mar-96 11,734.27 11,785.18
30-Jun-96 11,598.62 11,840.65
30-Sep-96 11,715.76 12,040.75
31-Dec-96 12,110.42 12,392.06
31-Mar-97 12,003.03 12,291.38
30-Jun-97 12,439.54 12,716.45
30-Sep-97 12,885.40 13,142.35
</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. Portfolio B calculates its performance based upon the historical
performance of its corresponding series ("Fund") of Nicholas-Applegate
Investment Trust, adjusted to reflect sales charges and Portfolio operating
expenses. The effective date of Portfolio B's registration statement was on
5/31/95. 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 guarantee 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.
- --------------------------------------------------------------------------------
30
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1997 (UNAUDITED)
- ------------------------------------------------------------------------
GOVERNMENT INCOME FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
AGENCY OBLIGATIONS -- 16.8%
- ----------------------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION -- 7.4%
Pool B00623
9.000%, 06/01/06......................... $ 106,813 $ 111,286
Pool G43
6.500%, 12/01/22......................... 145,000 142,507
Pool 1579PM
6.700%, 09/01/23......................... 210,000 205,537
------------
459,330
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 5.3%
Pool 94.27J
6.500%, 06/25/23......................... 255,000 251,733
Pool 1996-59 Class K
6.500%, 07/25/23......................... 80,000 77,300
------------
329,033
------------
TENNESSEE VALLEY AUTHORITY -- 4.1%
TVA - Global
6.375%, 06/15/05......................... 250,000 250,390
------------
TOTAL AGENCY OBLIGATIONS
(Cost $1,015,448)........................................ 1,038,753
------------
- ----------------------------------------------------------------------------
CMO'S AND ASSET-BACKED SECURITIES -- 4.0%
- ----------------------------------------------------------------------------
Community Program Loan Trust
4.500%, 04/01/29
(Cost $238,947).......................... 340,000 251,175
------------
- ----------------------------------------------------------------------------
FOREIGN BONDS -- 12.9%
- ----------------------------------------------------------------------------
AUSTRALIA -- 4.8%
Australian Government
9.500%, 08/15/03......................... 350,000 299,804
------------
CANADA -- 1.8%
Canadian Government
6.250%, 09/15/98......................... 150,000 110,549
------------
DENMARK -- 1.5%
Kingdom of Denmark
8.000%, 11/15/01......................... 550,000 90,493
------------
GERMANY -- 4.8%
Treuhandanstalt
7.750%, 10/01/02......................... 470,000 298,777
------------
TOTAL FOREIGN BONDS
(Cost $781,716).......................................... 799,623
------------
<CAPTION>
NUMBER OF
SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
MUTUAL FUNDS -- 4.7%
- ----------------------------------------------------------------------------
Blackrock 2001 Term
(Cost $286,195).......................... 34,000 $ 289,000
------------
- ----------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 59.9%
- ----------------------------------------------------------------------------
U.S. TREASURY BONDS -- 25.4%
7.500%, 02/02/00........................... 95,000 100,121
10.625%, 08/15/15.......................... 630,000 908,183
9.250%, 02/15/16........................... 335,000 435,135
8.125%, 08/15/21........................... 105,000 125,656
------------
1,569,095
------------
U.S. TREASURY NOTES -- 34.5%
5.875%, 10/31/98........................... 155,000 155,242
5.500%, 11/15/98........................... 15,000 14,965
5.125%, 11/30/98........................... 145,000 144,049
5.625%, 11/30/98........................... 375,000 374,647
6.250%, 03/31/99........................... 125,000 125,879
6.375%, 03/31/01........................... 140,000 141,772
6.250%, 01/31/02........................... 1,090,000 1,100,050
7.500%, 02/15/05........................... 75,000 80,978
------------
2,137,582
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $3,672,025)........................................ 3,706,677
------------
TOTAL INVESTMENTS -- 98.3%
(Cost $5,994,331)........................................ 6,085,228
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.7%.............. 103,020
------------
NET ASSETS -- 100.0%....................................... $ 6,188,248
------------
</TABLE>
- ---------------
* Non-Income Producing Security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
31
<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 2.61% cumulative return for the period
ending March 31, 1997, versus a 2.30% return for the Lipper Money Market. The
current SEC 7-year yield as of September 30, 1997 was 5.15%.*
- ------------
* 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.
Current annualized yield is the seven-day annualized net investment
income per share as of 9/30/97. Gains or losses are not included.
- --------------------------------------------------------------------------------
32
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1997 (UNAUDITED)
- ------------------------------------------------------------------------
MONEY MARKET FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- --------------------------------------------------------------------------
AGENCY OBLIGATIONS -- 13.7%
- --------------------------------------------------------------------------
FEDERAL FARM CREDIT BANK DISCOUNT NOTES -- 3.7%
6.420%, 08/07/98........................... $ 1,525,000 $ 1,453,825
-------------
FEDERAL HOME LOAN BANK DISCOUNT NOTES -- 9.4%
5.120%, 10/24/97........................... 1,000,000 996,729
5.300%, 12/05/97........................... 1,000,000 990,431
5.390%, 06/05/98........................... 182,000 175,269
5.380%, 06/16/98........................... 1,000,000 961,443
5.420%, 08/20/98........................... 639,000 607,926
-------------
3,731,798
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION DISCOUNT NOTES -- 0.6%
5.430%, 08/10/98........................... 100,000 95,279
5.410%, 08/21/98........................... 150,000 142,697
-------------
237,976
-------------
TOTAL AGENCY OBLIGATIONS
(Cost $5,423,599)....................................... 5,423,599
-------------
- --------------------------------------------------------------------------
COMMERCIAL PAPER -- 81.3%
- --------------------------------------------------------------------------
AMERICAN GREETINGS CORP. -- 3.4%
5.520%, 01/21/98 1,350,000 1,326,816
AMERITECH CORP. -- 3.7%
5.520%, 10/03/97........................... 1,000,000 999,693
5.510%, 10/06/97........................... 465,000 464,644
-------------
1,464,337
-------------
ASSOCIATES CORP. -- 2.5%
5.510%, 10/07/97........................... 1,000,000 999,082
AT&T CORP. -- 1.0%
5.480%, 10/16/97........................... 375,000 374,144
AVCO FINANCIAL SERVICES, INC. -- 1.3%
5.510%, 10/06/97........................... 500,000 499,617
AVNET, INC. -- 4.2%
5.530%, 10/07/97........................... 1,000,000 999,078
5.520%, 10/14/97........................... 647,000 645,710
-------------
1,644,788
-------------
BELL ATLANTIC FINANCIAL SERVICES, INC. -- 2.5%
5.530%, 10/07/97........................... 1,000,000 999,078
CARGILL, INC. -- 2.5%
5.520%, 10/02/97........................... 1,000,000 999,847
CATERPILLAR FINANCIAL SERVICES CORP. -- 3.8%
5.620%, 10/15/97........................... 1,000,000 997,814
5.500%, 02/04/98........................... 500,000 490,375
-------------
1,488,189
-------------
CENTRAL ILLINOIS PUBLIC SERVICE CO. -- 2.5%
5.500%, 10/20/97........................... 1,000,000 997,097
CHEVRON OIL FINANCE -- 2.5%
5.530%, 10/09/97........................... 1,000,000 998,771
COMMERCIAL CREDIT CORP. -- 2.5%
5.500%, 10/14/97........................... 1,000,000 998,014
DUPONT E.I. DE NEMOURS & CO., INC. -- 2.5%
5.500%, 10/03/97........................... 1,000,000 999,695
GENERAL ELECTRIC CAPITAL SERVICES, INC. -- 3.4%
5.500%, 12/09/97........................... 350,000 346,310
5.570%, 01/12/98........................... 1,000,000 984,064
-------------
1,330,374
-------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- --------------------------------------------------------------------------
GENERAL REINSURANCE CORP. -- 2.3%
5.500%, 10/03/97........................... $ 915,000 $ 914,720
GTE FUNDING, INC. -- 2.5%
5.520%, 10/20/97........................... 1,000,000 997,087
HJ HEINZ CO. -- 2.7%
5.520%, 10/28/97........................... 1,078,000 1,073,537
HOUSEHOLD FINANCE CORP. -- 2.5%
5.500%, 10/07/97........................... 1,000,000 999,083
JP MORGAN -- 2.5%
5.510%, 10/27/97........................... 1,000,000 996,021
LACLEDE GAS CO. -- 2.4%
5.550%, 10/21/97........................... 940,000 937,102
LIBRIZOL CORP. -- 1.8%
5.510%, 10/01/97........................... 700,000 700,000
METLIFE FUNDING, INC. -- 3.9%
5.520%, 10/15/97........................... 500,000 498,927
5.500%, 10/15/97........................... 1,042,000 1,039,771
-------------
1,538,698
-------------
NORWEST FINANCIAL, INC. -- 2.5%
5.510%, 10/06/97........................... 1,000,000 999,235
PETROFINA DEL., INC. -- 3.7%
5.510%, 10/10/97........................... 1,465,000 1,462,982
PITNEY BOWES CREDIT CORP. -- 1.0%
5.620%, 12/02/97........................... 406,000 402,070
POTOMAC ELECTRIC POWER CO. -- 2.5%
5.520%, 10/16/97........................... 1,000,000 997,700
PROCTER & GAMBLE CO. -- 1.8%
5.520%, 10/10/97........................... 700,000 699,034
REPUBLIC OF NEW YORK -- 2.5%
5.500%, 10/09/97........................... 1,000 998,778
USAA CAPITAL CORP. -- 1.8%
5.550%, 10/14/97........................... 700,000 698,597
WASHINGTON GAS & LIGHT CO. -- 3.6%
5.500%, 10/16/97........................... 920,000 917,892
5.530%, 10/21/97........................... 500,000 498,464
-------------
1,416,356
-------------
WISCONSIN GAS CO. -- 3.0%
5.510%, 10/02/97........................... 1,200,000 1,199,815
-------------
TOTAL COMMERCIAL PAPER
(Cost $32,150,664)...................................... 32,150,664
-------------
- ---------------------------------------------------------
<CAPTION>
REPURCHASE AGREEMENTS -- 5.7%
<S> <C> <C>
- ----------------------------------------------
J.P. Morgan & Co. $2,274,000 at 5.97%
(Agreement dated 09/30/97, to be
repurchased at $2,274,377 on 10/01/97;
collateralized by $2,280,000 Federal
National Mortgage Association, 6.96%, due
09/05/12) (Value $2,334,211)
(Cost $2,274,000)........................ 2,274,000 2,274,000
-------------
TOTAL INVESTMENTS -- 100.7%
(Cost $39,848,263)...................................... 39,848,263
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.7%)........... (295,680)
-------------
NET ASSETS -- 100%........................................ $ 39,552,583
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
33
<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
Aaron M. Harris,
Portfolio Manager
Eswar Menon,
Portfolio Manager
Ernesto Ramos, Ph.D.,
Senior Portfolio Manager
Jon Borchardt,
Assistant Portfolio Manager
Jessica Hilinski,
Assistant Portfolio Manager
Aylin Uckunkaya,
Investment Analyst
GOAL: The Emerging Countries Fund seeks to provide long-term capital
appreciation through investing in companies of developing countries around the
world.
REVIEW AND OUTLOOK: The Emerging Countries Fund delivered outstanding results
during the period April 1 through September 30, 1997 based on the strength of
stock selection. Notwithstanding the currency market debacle that sent equity
prices lower in South East Asia, the Fund rose 19.3% while its benchmark, the
MSCI Emerging Markets Free Index, declined 1.2%.
Applying our bottom-up approach, we select stocks based on their potential to
benefit from positive changes in some of the world's fastest developing
countries.
Due to the currency turmoil in the region, few stocks met our investment
criteria in South East Asia. The Fund was underweighted in the region relative
to the benchmark. During the period, we continued to pick stocks that are poised
to grow despite the unfavorable economic environment, such as export-oriented
companies that generate their revenues in U.S. dollars. For example, we own PT
Daya Guna Samudera, Indonesia's largest fully-integrated fishing company which
exports its products. The company generates 95% of its revenues in U.S. dollars
and is a direct beneficiary of the rupiah's devaluation.
Another solid performer was Peak International, a Hong Kong-based
precision-packaging materials producer with manufacturing facilities in China.
The company is a leading low-cost provider of protective packages used for
shipping integrated circuits.
Our overweighting in Latin America relative to the benchmark was a major
factor contributing to the Fund's gains in the period. We identified companies
in the region benefiting from the ongoing trend toward privatization,
deregulation, and infrastructure development. Companies including steel producer
Siderugica Venezola benefited from Venezuela's infrastructure recovery. In
Mexico, entertainment firm Corporacion Interamericana de Entretenimiento (CIE),
was a strong performer as the company continues to benefit from a consumer-led
economic recovery.
Eastern European stocks also performed well in the period. Gedeon Richter, a
Hungarian pharmaceutical company, and the Portuguese cement company, Cimpor
Cimentos, contributed significantly to the Fund's performance.
REPRESENTATIVE HOLDINGS
Banco Bradesco SA, Brazil
CIA Energetica De Minas, Brazil
Corporacion Interamericana de Entretenimiento, Mexico
Disco SA, Argentina
Ferreyros SA, Peru
Gedeon Richter, Hungary
Gulf Indonesia Resources, Indonesia
Nice Systems, Israel
NIIT, India
Peak International, China
- --------------------------------------------------------------------------------
34
<PAGE>
EMERGING COUNTRIES PORTFOLIOS
- ------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
EMERGING COUNTRIES PORTFOLIO A MSCI EMF INDEX
<S> <C> <C>
11-28-94 $ 9,475.00 $ 10,000.00
12-31-94 $ 9,052.00 $ 8,721.60
03-31-95 $ 8,331.78 $ 7,639.95
06-30-95 $ 9,582.68 $ 8,432.90
09-30-95 $ 10,166.44 $ 8,378.76
12-31-95 $ 9,625.48 $ 8,265.82
03-31-96 $ 10,700.91 $ 8,780.71
06-30-96 $ 11,783.97 $ 9,147.21
09-30-96 $ 12,020.41 $ 8,816.67
12-31-96 $ 12,274.33 $ 8,764.70
03-31-97 $ 13,353.47 $ 9,506.39
06-30-97 $15,340.97 $10,319.96
09-30-97 $15,876.66 $9,394.68
Annualized Total Returns As of 09/30/97
1 Year Since Inception
25.15% 17.69%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
EMERGING COUNTRIES PORTFOLIO B MSCI EMF INDEX
<S> <C> <C>
11-28-94 $ 10,000.00 $ 10,000.00
12-31-94 $ 8,677.62 $ 8,721.60
03-31-95 $ 9,092.33 $ 7,639.95
06-30-95 $ 10,524.26 $ 8,432.90
09-30-95 $ 9,937.40 $ 8,378.76
12-31-95 $ 10,782.47 $ 8,265.82
03-31-96 $ 11,666.67 $ 8,780.71
06-30-96 $ 11,588.42 $ 9,147.21
09-30-96 $ 11,948.36 $ 8,816.67
12-31-96 $12,525.64 $8,764.70
03-31-97 $13,603.53 $9,506.39
06-30-97 $15,601.97 $10,319.96
09-30-97 $15,836.99 $9,394.68
Annualized Total Returns As of 09/30/97
1 Year Since Inception
26.36% 17.58%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
EMERGING COUNTRIES PORTFOLIO C MSCI EMF INDEX
<S> <C> <C>
11-28-94 $ 10,000.00 $ 10,000.00
12-31-94 $ 9,467.90 $ 8,721.60
03-31-95 $ 8,619.55 $ 7,639.95
06-30-95 $ 9,876.07 $ 8,432.90
09-30-95 $ 10,460.31 $ 8,378.76
12-31-95 $ 9,900.08 $ 8,265.82
03-31-96 $ 10,972.52 $ 8,780.71
06-30-96 $ 12,068.97 $ 9,147.21
09-30-96 $ 12,293.06 $ 8,816.67
12-31-96 $ 12,531.94 $ 8,764.70
03-31-97 $ 13,599.87 $ 9,506.39
06-30-97 $15,606.27 $10,319.96
09-30-97 $16,140.24 $9,394.68
Annualized Total Returns As of 09/30/97
1 Year Since Inception
31.30% 18.37%
</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
MSCI Emerging Markets Free Index ("EMF"), on a cumulative and average annual
total return basis. Portfolio B calculates its performance based upon the
historical performance of its corresponding series ("Fund") of
Nicholas-Applegate Investment Trust, adjusted to reflect sales charges and
Portfolio operating expenses. The effective date of Portfolio B's registration
statement was on 5/31/95. 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 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.
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 guarantee 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.
- --------------------------------------------------------------------------------
35
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1997 (UNAUDITED)
- ------------------------------------------------------------------------
EMERGING COUNTRIES FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- --------------------------------------------------------------------------
COMMON STOCKS -- 94.7%
- --------------------------------------------------------------------------
ARGENTINA -- 5.6%
Banco de Galicia Y Buenos Aires S.A. de
C.V. -- ADR.............................. 22,700 $ 672,487
Banco Frances del Rio de la Plata S.A. --
ADR...................................... 29,600 967,550
Disco S.A. -- ADR*......................... 37,400 1,720,400
Perez Companc S.A.......................... 352,274 2,828,762
Siderar S.A.I.C. -- A...................... 342,836 1,902,740
Siderca S.A. -- A.......................... 1,306,714 3,920,141
YPF Sociedad Anonima -- ADR................ 75,300 2,776,687
-------------
14,788,767
-------------
BRAZIL -- 10.4%
Banco Brasileiro de Decontos SA............ 60,528,000 629,924
Centrais Eletricas Brasileiras S.A. --
ADR...................................... 137,700 3,827,234
Companhia Energetica de Minas Gerais PN.... 85,715,000 4,710,647
Companhia Energetica de Sao Paulo -- ADR... 22,000 548,196
Companhia Energetica de Sao Paulo -- SP
ADR...................................... 28,000 697,704
Companhia Paulista de Forca de Luz......... 13,614,700 2,423,650
Compania Riograndense Telecom PFA.......... 741,000 968,022
Ericsson Telecomunicacoes SA............... 29,024,000 1,391,054
Petroleo Brasiliero S.A. -- ADR............ 134,800 3,789,767
Telecomunicacoes Brasileiras SA -- ADR..... 29,229 3,763,234
Telecomunicacoes de Sao Paulo SA --
Preferred................................ 6,299,966 1,926,683
Telecomunicacoes do Parana SA --
Preferred................................ 2,643,628 1,954,846
Uniao de Bancos Brasileiros S.A. -- GDR.... 22,400 820,400
-------------
27,451,361
-------------
CHILE -- 4.3%
Chilgener S.A. -- ADR...................... 93,493 2,565,214
CIA de Telecomunicaciones de Chile S.A. --
ADR...................................... 30,300 980,963
Compania Cervecerias Unidos S.A. -- ADR.... 100,400 2,886,500
Enersis S.A. -- ADR........................ 48,200 1,786,412
Laboratorio Chile -- ADR................... 62,200 1,671,625
Vina Concha y Toro S.A. -- ADR............. 42,000 1,296,750
-------------
11,187,464
-------------
CHINA -- 4.4%
Beijing Datang Power Generation Co.,
Ltd.*.................................... 2,242,000 1,260,364
China Merchants Holdings International Co.,
Ltd...................................... 606,000 1,401,835
China Resources Enterprise Ltd............. 286,000 1,197,519
Chongqing Changan Automobile Co., Ltd...... 88,500 42,660
Guangdong Kelon Electric Holdings.......... 445,000 575,084
Hutchison Whampoa Ltd...................... 30,000 295,619
Kowloon Motor Bus Co., Ltd................. 695,900 1,861,609
Peak International Ltd..................... 62,800 1,499,350
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- --------------------------------------------------------------------------
</TABLE>
CHINA (CONTINUED)
<TABLE>
<S> <C> <C>
Qingling Motors Co......................... 163,000 $ 103,218
Shanghai Industrial Holdings Ltd........... 298,000 1,852,391
Zhejiang Southeast Electric Power Co.,
Ltd...................................... 3,741,000 1,346,760
-------------
11,436,409
-------------
COLOMBIA -- 0.5%
Banco Ganadero S.A. -- ADR................. 43,400 1,253,175
-------------
EGYPT -- 2.4%
Al-Ahram Beverages Co. S.A.E. -- GDR....... 2,600 81,900
Al-Ahram Beverages Co. S.A.E. -- GDR
144A*.................................... 43,000 1,354,500
Ameriya Cement Co.......................... 42,498 1,058,244
Arabian International Construction Co...... 29,500 697,194
Commercial International Bank of Egypt --
GDR*..................................... 53,100 1,274,400
Commercial International Bank of Egypt --
SP GDR*.................................. 3,000 72,000
Helwan Portland Cement Co.................. 19,800 428,873
Paints & Chemical Industries -- GDR
144A*.................................... 110,200 1,283,830
-------------
6,250,941
-------------
GREECE -- 3.4%
Aktor S.A.................................. 113,640 1,471,747
Attica Enterprises S.A..................... 111,200 1,394,332
Hellenic Technodomiki S.A.................. 120,800 1,614,244
Sarantis S.A............................... 88,960 1,144,149
Titan Cement Co. S.A....................... 22,600 1,364,275
Titan Cement Co. S.A. -- Preferred......... 39,600 1,857,070
-------------
8,845,817
-------------
HUNGARY -- 3.0%
Danubius Hotel and Spa Rt.................. 6,500 210,113
Gedeon Richter Rt.......................... 42,491 4,509,427
Gedeon Richter -- GDR 144A*................ 5,300 562,314
Graboplast Rt.............................. 12,560 743,104
Matav Rt................................... 1,439 619,718
Mol Magyar Olaj-Es Gazipari Rt............. 52,300 1,147,624
Tigaz Rt................................... 27,400 191,048
-------------
7,983,348
-------------
INDIA -- 6.6%
Bharat Heavy Electricals Ltd............... 45,000 450,995
BSES Ltd. -- GDR*.......................... 42,000 866,250
BSES Ltd. -- GDR 144A*..................... 30,000 618,750
Hindalco Industries Ltd. -- ADR............ 24,900 862,162
Hindalco Industries Ltd. -- GDR............ 53,200 1,842,050
ITC Limited -- GDR......................... 66,200 1,340,550
ITC Limited -- 144A*....................... 20,500 415,125
Larsen & Toubro Ltd. -- GDR................ 3,100 40,300
Larsen & Toubro Ltd. -- GDR Reg S.......... 21,500 279,500
Mahindra & Mahindra Ltd. -- ADR............ 12,500 146,875
Mahindra & Mahindra Ltd. -- GDR*........... 64,000 752,000
NIIT Ltd................................... 128,000 2,179,043
Oriental Bank of Commerce Ltd.............. 418,000 745,397
Punjab Tractors Ltd........................ 25,000 489,356
Reliance Industries -- GDR................. 55,600 1,275,325
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
36
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCKS (Continued)
- ---------------------------------------------------------
INDIA (CONTINUED)
<TABLE>
<S> <C> <C>
State Bank of India Ltd.................... 125,000 $ 956,421
State Bank of India -- ADR................. 63,600 1,478,700
State Bank of India -- GDR*................ 38,000 883,500
Videsh Sanchar Nigam Ltd. -- GDR*.......... 3,000 50,625
Videsh Sanchar Nigam Ltd. -- GDR 144A*..... 99,000 1,670,625
-------------
17,343,549
-------------
INDONESIA -- 0.5%
PT Bank Bira TBK -- Foreign................ 660,000 191,802
PT Daya Guna Samudera -- Foreign........... 600,000 1,000,306
PT Indofood Sukses Makmur -- Foreign....... 25,200 30,642
-------------
1,222,750
-------------
ISRAEL -- 7.6%
Bank Leumi Le-Israel....................... 1,176,000 1,935,233
Elbit Systems Ltd.......................... 92,100 1,266,375
Formula Systems (1985) Ltd................. 111,406 3,388,253
Gilat Satellite Networks Ltd.*............. 76,900 2,836,889
Makhteshim Chemical Works Ltd.............. 186,414 1,287,552
New Dimension Software Ltd................. 51,900 1,070,438
NICE-Systems Ltd. -- ADR*.................. 45,900 2,581,875
Tecnomatix Technologies Ltd.*.............. 65,500 2,505,375
Tefron Ltd................................. 36,600 732,000
Teledata Communications Ltd.*.............. 38,800 1,750,850
Teva Pharmaceutical Industries Ltd. --
ADR...................................... 13,000 724,750
-------------
20,079,590
-------------
KOREA -- 2.7%
Housing & Commercial Bank of Korea......... 310 5,327
LG Information & Communication Ltd......... 9,844 956,200
LG Semiconductor Co........................ 36,000 1,216,991
Pohang Iron & Steel Co..................... 23,520 1,886,040
Pohang Iron & Steel Co., Ltd. -- ADR....... 3,700 95,275
Samsung Electronics Co..................... 23,222 2,339,022
SK Telecom Co., Ltd........................ 10,570 648,516
-------------
7,147,371
-------------
MEXICO -- 14.8%
Alfa SA de C.V............................. 447,000 4,245,637
Cemex S.A. de C.V. -- B.................... 421,800 2,508,000
Cifra S.A. de C.V. -- A.................... 1,242,859 2,719,254
Cifra S.A. de C.V. -- B.................... 1,399 3,284
Cifra S.A. de C.V. -- C.................... 97,200 210,162
Coca-Cola Femsa S.A. -- ADR................ 23,000 1,335,438
Consorcio ARA S.A. de C.V.*................ 228,000 947,799
Corparacion Geo S.A. de C.V. -- B*......... 173,097 1,076,008
Corporacion Interamericana de
Entertenimiento S.A.*.................... 1,052,600 6,367,079
Fomento Economico Mexicano
S.A. -- B................................ 308,000 2,655,856
Grupo S.A. de C.V. -- B.................... 533,000 120,731
Grupo Cementos de Chihuahua S.A. de C.V.... 1,400,000 1,917,117
Grupo Elektra S.A. de C.V.................. 174,900 2,827,212
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- --------------------------------------------------------------------------
</TABLE>
MEXICO (CONTINUED)
<TABLE>
<S> <C> <C>
Grupo Financiero Bancomer S.A. de C.V...... 2,508,600 $ 1,711,143
Grupo Modelo S.A. de C.V................... 276,600 2,616,487
Organizacion Soriana S.A. de C.V. -- B..... 671,500 2,679,086
Pasteleria Francesa S.A.................... 2,744,000 1,151,279
Pepsi-Gemex S.A. -- GDR.................... 82,100 1,400,831
TV Azteca S.A. de C.V. -- ADR*............. 111,000 2,497,500
-------------
38,989,903
-------------
PAKISTAN -- 0.7%
Hub Power Co.*............................. 635,000 849,648
Pakistan State Oil Co., Ltd................ 54,970 573,198
SUI Northern Gas Pipelines*................ 465,750 371,726
-------------
1,794,572
-------------
PERU -- 1.4%
Cementos Lima S.A.......................... 54,400 1,107,308
Cementos Norte Pacasmayo S.A............... 1 1
Cervecercia Backus & Johnston S.A.......... 1,339,704 1,320,229
Enrique Ferreyros S.A...................... 532,598 583,173
Luz del Sur Servicios S.A. -- B............ 480,800 584,548
-------------
3,595,259
-------------
PHILIPPINES -- 0.9%
Metropolitan Bank & Trust Co............... 1,437 12,996
Music Corporation*......................... 5,155,000 2,312,169
Selecta Dairy Products, Inc................ 50,000 2,941
-------------
2,328,106
-------------
POLAND -- 2.4%
Amica Wronki S.A........................... 64,100 1,295,139
Debica S.A................................. 44,000 1,281,991
Elektrim Spolka Akcyjna S.A................ 125,800 1,410,876
Okocimskie Zaklady Piwowarskie S.A......... 52,200 320,996
Polish National Investment Fund............ 30,200 1,277,862
Zaklady Przemyslu Cukierniczego Jutrzenka
S.A...................................... 26,700 664,568
-------------
6,251,432
-------------
PORTUGAL -- 3.3%
BPI-SGPS, SA............................... 49,000 1,115,573
Cimpor-Cimentos de Portugal, SGPS, SA...... 95,900 2,592,079
Portugal Telecom SA........................ 112,475 4,878,261
-------------
8,585,913
-------------
RUSSIA -- 4.1%
First NIS Regional Fund.................... 15,000 292,500
Kubanelectrosvyaz.......................... 43,700 937,365
Kuzbassenergo.............................. 932,000 745,600
Lukoil Holding -- ADR...................... 15,400 1,512,665
Moscow City Tele Network -- RDC 144A*...... 554 1,301,900
Tatneft -- ADR 144A*....................... 11,700 1,858,440
Unified Energy Systems -- GDR.............. 6,159,000 2,463,600
Vimpel Communications -- ADR*.............. 39,300 1,640,775
-------------
10,752,845
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
37
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1997 (UNAUDITED) -- CONTINUED
- --------------------------------------------------------------------------------
EMERGING COUNTRIES FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCKS (Continued)
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
SINGAPORE -- 2.4%
Advanced Systems Automation Ltd............ 383,000 $ 1,096,646
Creative Technology Ltd.................... 87,000 2,223,938
Datacraft Asia Ltd......................... 292,500 930,150
Elec & Eltek International Co., Ltd........ 160,000 1,408,000
Parkway Holdings Ltd....................... 188,000 761,979
-------------
6,420,713
-------------
SOUTH AFRICA -- 2.3%
ABSA Group Ltd............................. 99,300 676,489
Barlow Ltd................................. 84,800 968,909
Bidvest Group Ltd.......................... 41,086 334,999
Dimension Data Holdings Ltd.*.............. 263,000 1,100,418
First SA Food Holdings Ltd................. 640,200 695,078
First South Africa Corp., Ltd.............. 62,500 546,875
Liberty Life Association of Africa Ltd..... 330 9,630
Meikles Africa Ltd......................... 30,000 65,250
South African Breweries Ltd.*.............. 59,334 1,721,902
-------------
6,119,550
-------------
SRI LANKA -- 0.7%
Ceylon Brewery Ltd......................... 125,700 158,180
John Keells Holdings Ltd................... 238,000 1,357,718
National Development Bank.................. 82,000 364,597
-------------
1,880,495
-------------
TAIWAN -- 2.1%
ASE Test Ltd.*............................. 30,500 2,584,875
China Steel Co. -- GDR*.................... 33,825 680,728
Compal Electronics Inc..................... 98,800 352,364
ROC Taiwan Fund*........................... 45,000 545,625
Siliconware Precision Industries -- GDR.... 21,200 377,572
Siliconware Precision Industries -- SP
GDR...................................... 39,000 694,590
Taiwan Fund Inc............................ 14,450 366,669
-------------
5,602,423
-------------
TURKEY -- 2.8%
Akbank T.A.S............................... 17,500,000 1,353,093
Aksa Akrilik Kimya Sanayii A.S............. 15,010,000 1,482,947
Aksigorta A.S.............................. 5,813,000 391,196
Brisa Bridgestone Sabanci Lastik San Ve Tic
A.S...................................... 3,066,000 1,352,131
Haci Omer Sabanci Holding A.S.*............ 27,321,000 1,204,878
Vestel Elektronik Sanayi Ve Ticaret A.S.... 16,173,000 1,482,062
-------------
7,266,307
-------------
UNITED KINGDOM -- 0.3%
Billiton PLC............................... 174,200 671,678
-------------
UNITED STATES OF AMERICA -- 1.3%
800-Jr Cigar, Inc.* 17,800 623,000
Comverse Technology, Inc.*................. 21,000 1,107,750
Harken Energy Corp.*....................... 258,900 1,650,487
-------------
3,381,237
-------------
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- --------------------------------------------------------------------------
VENEZUELA -- 3.8%
Bancaracas Mercados de Capitales S.A....... 541,705 $ 837,576
Banco Provincial S.A....................... 334,326 728,401
C.A. La Electricidad de Caracas S.A.C.A.... 810,833 1,305,799
Compania Anonima Nacional Telefonos de
Venezuela -- ADR......................... 27,600 1,262,700
Corimon C.A. S.A.C.A....................... 35,445,000 1,088,973
Corimon C.A. S.A.C.A. -- ADR............... 21,300 163,744
Corporacion Venezolana de Cementos
S.A.C.A.................................. 311,133 724,727
Siderurgica Venezolana Sivensa, Saica
S.A.C.A. -- ADR.......................... 436,100 2,568,193
Sudamtex de Venezuela -- 144A*............. 77,350 1,242,473
-------------
9,922,586
-------------
TOTAL COMMON STOCKS
(Cost $216,724,814)..................................... 248,553,561
-------------
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
- --------------------------------------------------------------------------
CORPORATE BONDS -- 0.2%
- --------------------------------------------------------------------------
UNITED STATES OF AMERICA
Siliconware Precision Industries
(Cost $610,000)
0.500%, 7/21/2004........................ $ 610,000 652,700
-------------
- --------------------------------------------------------------------------
COMMERCIAL PAPER -- 5.5%
- --------------------------------------------------------------------------
Associates Corp. of North America
6.370%, 10/01/1997....................... 12,964,000 12,964,000
J.P. Morgan & Co., Inc.
6.250%, 10/01/1997....................... 1,581,000 1,581,000
-------------
TOTAL COMMERCIAL PAPER
(Cost $14,545,000)...................................... 14,545,000
-------------
<CAPTION>
NUMBER
OF SHARES
<S> <C> <C>
- --------------------------------------------------------------------------
RIGHTS/WARRANTS -- 0.1%
- --------------------------------------------------------------------------
HONG KONG -- 0.1%
Guangnan Holdings -- Warrants
(Cost $3,872)............................ 84,857 35,092
-------------
TOTAL INVESTMENTS -- 100.5%
(Cost $231,883,686)..................................... 263,786,353
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.5%)...........
(1,302,072)
-------------
NET ASSETS -- 100%........................................ $ 262,484,281
-------------
</TABLE>
- ---------------
* Non-Income Producing Security
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
38
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF SEPTEMBER 30, 1997 (UNAUDITED)
- ------------------------------------------------------------------------
EMERGING COUNTRIES FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
- -------------------------------------------- -------------
<S> <C>
Alcoholic Beverages......................... 5.4%
Apparel..................................... 0.3
Automotive.................................. 0.4
Automotive Equipment........................ 1.0
Beverages/Soft Drinks....................... 1.2
Broadcasting................................ 0.9
Building Materials.......................... 6.2
Chemicals................................... 1.0
Closed End/Country Funds.................... 0.9
Computers/Office Automation................. 1.4
Consumer Electrical......................... 0.8
Department/Discount Stores.................. 2.2
Drugs/Pharmaceuticals....................... 2.8
Electric Utilities.......................... 10.1
Electronics/Music Chains.................... 1.6
Entertainment............................... 2.4
Finance Companies........................... 1.1
Food Chains................................. 1.4
Gas Pipelines............................... 0.1
Gas Utilities............................... 0.1
Grocery Products............................ 1.1
Homebuilding................................ 0.4
Industrial Engineering/Construction......... 1.7
Integrated Oil Companies.................... 3.6
Investment Companies........................ 0.4
Life Insurers............................... 0.0
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
- -------------------------------------------- -------------
<S> <C>
Lodging..................................... 0.1%
Machinery/Equipment......................... 1.4
Metals...................................... 4.5
Miliary/Defense............................. 0.5
Money Center Banks.......................... 0.8
Oil/Gas Production.......................... 2.6
Other Commercial/Industrial Services........ 1.3
Other Consumer Non-Durables................. 0.7
Other Consumer Services..................... 0.4
Other Energy................................ 0.3
Other Production/Manufacturing.............. 4.7
Other Transportation........................ 1.2
Property-Casualty Insurance................. 0.1
Real Estate Development/Investment.......... 0.9
Regional/Commercial Banks................... 5.3
Semiconductors/Electric Companies........... 3.6
Soaps/Cosmetics............................. 0.4
Software.................................... 3.5
Telecommunication Equipment................. 3.7
Telecommunication Services.................. 1.9
Telephone................................... 6.7
Textiles.................................... 1.0
Tobacco Products............................ 0.9
Short Term Obligations...................... 5.5
Liabilities in Excess of Other Assets....... (0.5)
-----
NET ASSETS.................................. 100.0%
-----
-----
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
39
<PAGE>
INTERNATIONAL SMALL CAP 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
Melisa Grigolite,
Portfolio Manager
Aaron Harris,
Portfolio Manager
Pedro V. Marcal,
Senior Portfolio Manager
Eswar Menon,
Portfolio Manager
Loretta J. Morris,
Senior Portfolio Manager
Alex Muromcew,
Portfolio Manager
Ernesto Ramos, Ph.D.,
Senior Portfolio Manager
John Tribolet,
Investment Analyst
GOAL: The International Small Cap Growth Fund seeks to maximize long-term
capital appreciation through investment in a portfolio of equity securities
primarily of small non-U.S. companies.
REVIEW AND OUTLOOK: The International Small Cap Growth Fund delivered strong
results for the period April 1 through September 30, 1997, outperforming its
benchmark, the Salomon EPAC/EMI (Europe Pacific Australasia Composite/Extended
Market Index), on the strength of its superior stock selection. The Fund
advanced 21.0% versus a 1.2% increase for the benchmark.
Nicholas-Applegate invests for the International Small Cap Fund utilizing our
bottom-up method of selecting the stocks of smaller-sized companies based on
their potential to benefit from positive changes in countries around the world.
The Fund's strong performance during the period can be attributed primarily to
holdings in the technology sector.
In the Netherlands, ASM Lithography and Baan, companies expected to benefit
from the robust growth in the technology industry, were among the
best-performing holdings in the Fund. ASM Lithography is forecast to enjoy
continued progress as it participates in a consortium of leading technology
firms that will develop lithography tools designed to support the next
generation of computer equipment.
Ibiden, a producer of next-generation plastic packages for Intel
microprocessors, was one of the Fund's top-performing holdings in Japan. The
company is a direct beneficiary of Intel's continued strong growth prospects.
The July 1 handover of Hong Kong to China provided many excellent
opportunities during the period. The Fund benefited from stock selection in many
"red chips," stocks of mainland Chinese companies listed in Hong Kong.
South East Asia's currency crisis presented a negative environment during the
period. We virtually eliminated our holdings in the Philippines, Malaysia,
Indonesia and Thailand prior to the crisis. Although we continue to be
underexposed to South East Asia as a whole, the Fund continues to uncover
exciting investments in export-oriented companies benefiting from the
devaluations in the region.
Despite the challenges faced by a number of the world's markets, our
International Small Cap Growth Fund continues to uncover opportunities in
regions across the globe.
REPRESENTATIVE HOLDINGS
Ares-Serono, Switzerland
Petroleum Geo Services, Norway
Tomra Systems, Norway
Raision Tehtaat, Finland
Porsche, Germany
Coflexip, France
Terumo, Japan
Ibiden, Japan
Siderar, Argentina
Ryanair Hldgs, Ireland
- --------------------------------------------------------------------------------
40
<PAGE>
INTERNATIONAL SMALL CAP GROWTH PORTFOLIOS
- ------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INTERNATIONAL SMALL SALOMON
CAP GROWTH PORTFOLIO A EPAC EMI
<S> <C> <C> <C>
06-07-90 9,475.00 10,000.00
06-30-90 9,603.62 10,135.00
09-30-90 7,481.77 7,880.19
12-31-90 7,793.29 8,303.82
03-31-91 8,461.75 9,051.40
06-30-91 8,017.65 8,511.83
09-30-91 8,653.45 9,033.08
12-31-91 8,664.16 8,857.15
03-31-92 7,867.33 7,967.30
06-30-92 8,194.00 8,329.44
09-30-92 7,872.99 7,906.76
12-31-92 7,551.02 7,941.40
03-31-93 8,323.98 8,594.15
06-30-93 9,397.92 9,479.41
09-30-93 9,813.75 10,092.36
12-31-93 9,465.10 9,764.47
03-31-94 10,170.77 10,693.45
06-30-94 10,557.20 11,128.80
09-30-94 10,666.80 11,018.18
12-31-94 10,299.72 10,685.83
03-31-95 10,046.59 10,605.69
06-30-95 10,194.98 10,573.78
09-30-95 10,884.53 10,994.72
12-31-95 10,867.27 11,197.92
03-31-96 11,599.40 11,834.25
06-30-96 12,322.71 12,376.53
09-30-96 12,172.75 12,059.30
12-31-96 12,784.04 11,922.57
03-31-97 13,301.04 11,686.63
06-30-97 15,048.37 12,529.00
09-30-97 16,046.84 11,839.87
Annualized Total Returns
As of 09/30/97
1 Year 5 Years Since Inception
24.91% 14.07% 6.68%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INTERNATIONAL SMALL SALOMON
CAP GROWTH PORTFOLIO B EPAC EMI
<S> <C> <C> <C>
6-07-90 $10,000.00 $10,000.00
6-30-90 10,130.33 10,135.00
9-30-90 7,878.13 7,880.19
12-31-90 8,192.95 8,303.82
3-31-91 8,881.61 9,051.40
6-30-91 8,401.54 8,511.83
9-30-91 9,053.42 9,033.08
12-31-91 9,049.90 8,857.15
3-31-92 8,203.81 7,967.30
6-30-92 8,530.75 8,329.44
9-30-92 8,183.05 7,906.76
12-31-92 7,835.48 7,491.40
3-31-93 8,623.96 8,594.15
6-30-93 9,721.39 9,479.41
9-30-93 10,135.28 10,092.36
12-31-93 9,759.10 9,764.47
3-31-94 10,470.04 10,693.45
6-30-94 10,850.41 11,128.80
9-30-94 10,949.57 11,018.18
12-31-94 10,473.85 10,685.83
3-31-95 10,200.62 10,605.69
6-30-95 10,325.90 10,573.78
9-30-95 11,012.62 10,994.72
12-31-95 10,970.75 11,197.92
3-31-96 11,690.96 11,834.25
6-30-96 12,394.43 12,376.53
9-30-96 12,226.94 12,059.30
12-31-96 12,824.04 11,922.57
3-31-97 13,323.17 11,686.63
6/30/1997 15,067.18 12,529.00
9/30/1997 16,048.18 11,839.87
Annualized Total Returns
As of 09/30/97
1 Year 5 Years Since Inception
26.25% 14.19% 6.68%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INTERNATIONAL SMALL SALOMON
CAP GROWTH PORTFOLIO C EPAC EMI
<S> <C> <C>
06-07-90 $10,000.00 $10,000.00
06-30-90 $10,130.33 $10,135.00
09-30-90 $7,878.13 $7,880.19
12-31-90 $8,192.95 $8,303.82
03-31-91 $8,881.61 $9,051.40
06-30-91 $8,401.54 $8,511.83
09-30-91 $9,053.42 $9,033.08
12-31-91 $9,049.90 $8,857.15
03-31-92 $8,203.81 $7,967.30
06-30-92 $8,530.75 $8,329.44
09-30-92 $8,183.05 $7,906.76
12-31-92 $7,835.48 $7,941.40
03-31-93 $8,623.96 $8,594.15
06-30-93 $9,721.39 $9,479.41
09-30-93 $10,135.28 $10,092.36
12-31-93 $9,759.10 $9,764.47
03-31-94 $10,470.04 $10,693.45
06-30-94 $10,850.41 $11,128.80
09-30-94 $11,032.00 $11,018.18
12-31-94 $10,615.09 $10,685.83
03-31-95 $10,157.46 $10,605.69
06-30-95 $10,336.92 $10,573.78
09-30-95 $11,027.85 $10,994.72
12-31-95 $10,993.78 $11,197.92
03-31-96 $11,711.74 $11,834.25
06-30-96 $12,420.73 $12,376.53
09-30-96 $12,259.19 $12,059.30
12-31-96 $12,853.30 $11,922.57
03-31-97 $13,349.57 $11,686.63
06-30-97 $15,082.18 $12,529.00
09-30-97 $16,060.73 $11,839.87
Annualized Total Returns
As of 09/30/97
1 Year 5 Years Since Inception
31.01% 14.44% 6.69%
</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 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 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.
Past performance is no guarantee 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.
- --------------------------------------------------------------------------------
41
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1997 (UNAUDITED)
- ------------------------------------------------------------------------
INTERNATIONAL SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------
COMMON STOCKS -- 97.3%
- ---------------------------------------------------------------------------
ARGENTINA -- 2.2%
Banco Frances del Rio de la Plata
S.A.-ADR................................. 7,015 $ 229,303
Disco S.A.-ADR*............................ 8,300 381,800
Siderar-A*................................. 101,232 561,838
Siderca S.A.-A............................. 94,689 284,067
-----------
1,457,008
-----------
BELGIUM -- 0.8%
Barco N.V.................................. 2,465 516,386
-----------
BRAZIL -- 2.0%
Compania Riograndense Telecom PFA.......... 379,200 495,376
Telecomunicacoes do Parna S/A-Preferred.... 652,021 482,141
Uniao de Bancos Brasileiros S.A.-GDR....... 8,600 314,975
-----------
1,292,492
-----------
CANADA -- 5.6%
ATI Technologies, Inc.*.................... 36,000 763,186
Canadian Natural Resources Ltd.*........... 31,500 928,750
Four Seasons Hotels, Inc................... 9,500 389,500
Newcourt Credit Group, Inc ................ 23,500 883,312
Suncor Energy Inc.......................... 8,400 305,101
Yogen Fruz World Wide Inc.*................ 69,800 414,123
-----------
3,683,972
-----------
CHINA -- 0.3%
China Merchants Holdings International Co.,
Ltd...................................... 52,000 120,289
Qingling Motors Co......................... 108,000 68,390
-----------
188,679
-----------
FINLAND -- 2.7%
Huhtamaki Group............................ 6,700 263,435
Oy Nokia Ab-ADR............................ 7,100 666,069
Raision Tehtaat Oy......................... 7,300 833,481
-----------
1,762,985
-----------
FRANCE -- 8.6%
Atos (Ex-Axime) S.A.*...................... 6,500 703,295
Bertrand Faure S.A......................... 13,193 862,487
Cap Gemini Sogeti SA....................... 12,200 791,607
Coflexip S.A.-ADR.......................... 15,000 843,750
Compagnie Generale de Geophysique, SA-
ADR...................................... 32,700 895,162
Dassault Systemes SA....................... 7,300 467,515
Genset SA-ADR*............................. 27,400 578,825
Zodiac S.A................................. 2,300 552,372
-----------
5,695,013
-----------
GERMANY -- 3.8%
Pfeiffer Vacuum Technology AG-ADR*......... 14,000 434,000
Porsche AG................................. 500 865,776
Schmalbach Lubeca AG....................... 2,000 435,152
Sixt AG.................................... 5,000 478,158
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------
</TABLE>
GERMANY (CONTINUED)
<TABLE>
<S> <C> <C>
Sixt AG-Preferred*......................... 3,860 $ 279,583
-----------
2,492,669
-----------
GREECE -- 0.5%
Titan Cement Company S.A................... 5,250 316,922
-----------
HONG KONG -- 2.6%
China Aerospace Intl. Hldg. Ltd............ 261,000 173,708
CNPC Hong Kong Ltd.*....................... 450,000 258,788
Cosco International Holdings Ltd.*......... 305,200 343,143
Gitic Enterprises Ltd.*.................... 530,000 333,904
Lippo China Resources...................... 352,000 322,977
Novel Denim Holdings Ltd.*................. 14,200 383,400
-----------
1,815,920
-----------
HUNGARY -- 0.6%
Gedeon Richter-GDR 144A*................... 3,800 403,169
-----------
INDIA -- 1.0%
Hindalco Industries Ltd.-GDR............... 10,000 346,250
State Bank of India-GDR*................... 12,900 299,925
-----------
646,175
-----------
IRELAND -- 0.9%
Ryanair Holdings PLC-ADR*.................. 20,700 621,970
-----------
ISRAEL -- 0.4%
Tecnomatix Technologies Ltd.*.............. 6,400 244,800
-----------
ITALY -- 4.7%
Credito Italiano SpA....................... 253,000 684,477
La Rinascente SpA.......................... 122,000 935,770
Pininfarina SpA............................ 41,800 772,482
Telecom Italia Mobile SpA.................. 176,000 698,433
-----------
3,091,162
-----------
JAPAN -- 17.6%
Circle K Japan Co., Ltd.................... 9,600 438,912
Fuji Soft ABC Inc.......................... 25,090 827,086
Fujimi Inc................................. 8,300 493,593
Hirose Electric Ltd........................ 9,900 728,960
Ibiden Co., Ltd............................ 38,000 679,836
Keyence Corp............................... 4,300 601,897
Matsumotokiyoshi Co........................ 15,000 641,073
Meitec Corp................................ 22,000 705,181
Mitsui Toatsu Chemicals, Inc............... 200,000 308,113
Net One Systems Co., Ltd................... 6,000 357,808
Nichiei Co., Ltd........................... 6,000 571,500
NTT Data Corp.............................. 160 724,893
Orix Corp.................................. 8,600 653,895
Rohm Co., Ltd.............................. 6,000 705,678
Sumitomo Realty & Development.............. 92,000 727,709
Takeda Chemical Industries................. 24,000 719,592
Terumo Corp................................ 39,000 723,568
Tokyo Seimitsu Co., Ltd.................... 16,000 430,695
Union Tool Co.............................. 23,000 611,505
-----------
11,651,494
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
42
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCKS (Continued)
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
KOREA -- 0.4%
LG Information & Communication Ltd......... 2,681 $ 260,420
-----------
MEXICO -- 3.4%
Cifra S.A. de C.V.-A....................... 239,619 524,263
Cifra S.A. de C.V.-B....................... 22 52
Consorcio ARA S.A. de C.V.*................ 94,500 392,838
Corporacion Interamericana de
Entretenimiento S.A.*.................... 89,200 539,562
Organizacion Soriana S.A. de C.V.-B........ 198,800 793,153
-----------
2,249,868
-----------
NETHERLANDS -- 6.2%
ASM Lithography Holding NV*................ 10,100 1,015,532
Baan Co., NV*.............................. 10,500 757,123
Fugro NV................................... 11,000 384,152
Internatio-Muller NV....................... 22,550 727,456
Smit International NV...................... 28,000 879,353
Volker Wessels Stevin NV................... 11,140 359,372
-----------
4,122,988
-----------
NEW ZEALAND -- 0.7%
MAS Technology Ltd.-ADR*................... 19,300 439,075
-----------
NORWAY -- 3.9%
Awilco ASA................................. 50,000 696,889
Petroleum Geo-Services ASA-ADR*............ 14,800 1,000,850
Tomra Systems ASA.......................... 38,900 895,417
-----------
2,593,156
-----------
PAKISTAN -- 0.5%
Hub Power Co., Ltd.*....................... 254,000 339,859
-----------
PHILIPPINES -- 0.4%
Music Corporation*......................... 661,000 296,478
-----------
PORTUGAL -- 0.9%
Portugal Telecom SA........................ 14,400 624,556
-----------
RUSSIA -- 1.0%
Lukoil Oil Co.-ADR......................... 2,975 292,219
Vimpel-Communications-ADR*................. 9,600 400,800
-----------
693,019
-----------
SINGAPORE -- 2.8%
Datacraft Asia Ltd......................... 106,000 337,080
Electronic Resources Ltd................... 313,500 569,739
Lindeteves-Jacoberg Ltd.................... 204,000 326,731
MMI Holdings Ltd.*......................... 479,600 294,714
Sunright Ltd............................... 179,000 291,371
-----------
1,819,635
-----------
SOUTH AFRICA -- 0.5%
Dimension Data Holdings Ltd.*.............. 71,800 300,418
Liberty Life Association of Africa Ltd..... 84 2,451
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------
</TABLE>
SOUTH AFRICA (CONTINUED)
<TABLE>
<S> <C> <C>
South African Breweries Ltd.*.............. 175 $ 5,079
-----------
307,948
-----------
SPAIN -- 3.5%
Cortefiel SA............................... 13,195 559,965
Fomento De Construcciones y Contratas
S.A...................................... 4,700 724,725
Tele Pizza S.A.*........................... 14,700 1,024,940
-----------
2,309,630
-----------
SWEDEN -- 2.8%
Ortivus AB-B*.............................. 11,800 512,881
Pricer AB*................................. 24,400 710,237
Spectra Physics AB-A....................... 20,000 608,503
-----------
1,831,621
-----------
SWITZERLAND -- 4.9%
Adecco SA.................................. 1,560 627,605
Ares Serono Group.......................... 610 1,099,099
Kuoni Reisen Holdings AG................... 200 796,369
Selectra Group*............................ 5,000 725,535
-----------
3,248,608
-----------
TAIWAN -- 1.6%
ASE Test, Ltd.*............................ 10,900 923,775
Siliconware Precision Industries Co.*...... 40,600 138,409
-----------
1,062,184
-----------
TURKEY -- 1.1%
Akbank T.A.S............................... 5,250,000 405,928
Haci Omer Sabanci Holding A.S.*............ 6,937,000 305,927
-----------
711,855
-----------
UNITED KINGDOM -- 7.2%
British Aerospace PLC...................... 155 4,160
Capita Group PLC........................... 127,000 582,909
Dixons Group PLC........................... 57,200 595,211
Doncasters PLC-ADR*........................ 21,600 648,000
Dr. Solomon's Group PLC*................... 8,200 208,075
Ecsoft Group PLC-ADR*...................... 30,600 539,325
Getty Communications PLC-ADR*.............. 16,700 308,950
GKN PLC.................................... 215 4,856
Johnson Matthey PLC........................ 69,400 757,430
Next PLC................................... 41,100 481,718
Pilkington PLC............................. 249,400 631,701
-----------
4,762,335
-----------
UNITED STATES OF AMERICA -- 0.6%
Comverse Technology, Inc.*................. 7,000 369,250
-----------
VENEZUELA -- 0.6%
C.A. La Electricidad de Caracas............ 233,333 375,769
-----------
TOTAL COMMON STOCKS
(Cost $52,712,403)....................................... 64,299,070
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
43
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1997 (UNAUDITED) -- CONTINUED
- --------------------------------------------------------------------------------
INTERNATIONAL SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
CONVERTIBLE BONDS -- 0.1%
- ---------------------------------------------------------------------------
SINGAPORE -- 0.1%
Lindeteves-Jacoberg Ltd. Loan Stock
07/28/2002
(Cost $25,771)........................... $ 85,000 $ 40,008
-----------
- ---------------------------------------------------------------------------
COMMERCIAL PAPER -- 0.7%
- ---------------------------------------------------------------------------
J.P. Morgan & Co., Inc.
6.250%, 10/01/1997
(Cost $478,000).......................... 478,000 478,000
-----------
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ---------------------------------------------------------------------------
WARRANTS/RIGHTS -- 0.2%
- ---------------------------------------------------------------------------
SINGAPORE -- 0.2%
Lindeteves-Jacoberg -- Warrants (Cost
$32,760)................................. 85,000 $ 93,352
-----------
TOTAL INVESTMENTS -- 98.3%
(Cost $53,248,934)....................................... 64,910,430
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.7%.............. 1,151,579
-----------
NET ASSETS -- 100.0%....................................... $66,062,009
-----------
</TABLE>
- ------------
* Non-Income Producing Security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
44
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF SEPTEMBER 30, 1997 (UNAUDITED)
- ------------------------------------------------------------------------
INTERNATIONAL SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
- -------------------------------------------- -------------
<S> <C>
Aerospace................................... 1.3%
Airlines.................................... 0.9
Alcoholic Beverages......................... 0.0
Automotive.................................. 2.6
Automotive Equipment........................ 1.3
Biotechnology............................... 2.5
Building Materials.......................... 2.1
Chemicals................................... 1.6
Clothing Chains............................. 0.8
Computers/Office Automation................. 2.1
Containers.................................. 0.7
Department/Discount Stores.................. 2.0
Drugs/Pharmaceuticals....................... 0.6
Electric Utilities.......................... 1.1
Electronic Instruments...................... 3.5
Electronics/Music Chains.................... 0.9
Entertainment............................... 0.8
Finance Companies........................... 2.2
Food Chains................................. 2.2
Grocery Products............................ 1.7
Homebuilding................................ 0.6
Industrial Engineering/Construction......... 3.3
Integrated Oil Companies.................... 0.5
Investment Companies........................ 0.5
Life Insurers............................... 0.0
Lodging..................................... 0.6
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
- -------------------------------------------- -------------
<S> <C>
Machinery/Equipment......................... 2.8%
Medical Supplies............................ 1.9
Metals...................................... 1.8
Money Center Banks.......................... 2.0
Oil/Gas Production.......................... 2.2
Oilfield Services/Equipment................. 3.8
Other Commercial/Industrial Services........ 7.5
Other Consumer Services..................... 1.6
Other Production/Manufacturing.............. 3.5
Other Retail Trade.......................... 2.5
Other Transportation........................ 1.3
Real Estate Development/Investment.......... 2.1
Regional/Commercial Banks................... 0.9
Rental/Leasing Companies.................... 2.1
Restaurants................................. 1.6
Semiconductors/Electric Companies........... 7.2
Software.................................... 6.1
Specialty Chains............................ 1.4
Telecommunication Equipment................. 2.2
Telecommunication Services.................. 1.4
Telephone................................... 2.7
Textiles.................................... 0.6
Wholesale Distribution...................... 1.8
Short Term Obligations...................... 0.9
Other Assets in Excess of Liabilities....... 1.7
-----
NET ASSETS.................................. 100.0%
-----
-----
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
45
<PAGE>
INTERNATIONAL CORE 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
Melisa Grigolite,
Portfolio Manager
Aaron Harris,
Portfolio Manager
Pedro V. Marcal,
Senior Portfolio Manager
Eswar Menon,
Portfolio Manager
Loretta J. Morris,
Senior Portfolio Manager
Alex Muromcew,
Portfolio Manager
Ernesto Ramos, Ph.D.,
Senior Portfolio Manager
John Tribolet,
Investment Analyst
GOAL: The International Core Growth Fund seeks to maximize long-term capital
appreciation through investment in a portfolio of equity securities primarily of
mid- to large-sized non-U.S. companies.
REVIEW AND OUTLOOK: Our International Core Growth Fund delivered outstanding
returns during the period April 1 through September 30, 1997. The Fund
registered an increase of 26.9% far outpacing its benchmark, the MSCI EAFE/EMF
Index.
Nicholas-Applegate's bottom-up stock selection approach, combined with the
Fund's underweighted position in South East Asia relative to the Index, were key
to the portfolio's strong advance during the period.
Our stock selection led us to discover companies that enjoy strong earnings
growth. One example is ASE Test, a Taiwan-based provider of circuit testing for
semiconductor manufacturers. The company, one of the Fund's best performers in
the first six months of the fiscal year, is forecast to generate increased
revenues from the expected expansion in technology spending worldwide.
In Japan, a number of holdings in the technology sector were strong
contributors to the Fund's gains. For example, Minebea, a manufacturer of ball
bearings for computer keyboards, delivered solid returns during the six-month
period.
In Hong Kong, we found many exciting opportunities as the former British-ruled
peninsula was handed over to China in July. The Fund's stock selection among
"red chips," stocks of mainland Chinese companies listed in Hong Kong, benefited
the portfolio.
The currency market turmoil raised concerns regarding the earnings
sustainability for a number of holdings in the Philippines, Malaysia, Indonesia,
and Thailand. We virtually eliminated our exposure to these countries prior to
the crisis.
Nicholas-Applegate believes that prospects for larger-cap stocks in developed
international markets remain attractive. In Europe, for example, management
teams are emulating the cost-cutting efficiencies achieved recently in the
United States. Improved earnings growth and escalating stock prices are
potential benefits of the restructuring trend.
REPRESENTATIVE HOLDINGS
ASM Lithography, Netherlands
British Aerospace, United Kingdom
Cap Gemini, France
Deutsche Bank, Germany
Ericsson, Sweden
Lloyds TSB, United Kingdom
Northern Telecom, Canada
Sony, Japan
Telecom Italia, Italy
Telecomunicacoes Brasileiras, Brazil
- --------------------------------------------------------------------------------
46
<PAGE>
INTERNATIONAL CORE GROWTH PORTFOLIOS
- ------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INTERNATIONAL CORE GROWTH PORTFOLIO A MSCI EAFE INDEX
<S> <C> <C>
12-27-96 $9,475.00 $10,000.00
01-31-97 $10,407.38 $9,629.74
02-28-97 $10,499.78 $9,787.66
03-31-97 $10,684.57 $9,822.90
04-30-97 $10,827.37 $9,874.96
05-31-97 $11,826.95 $10,517.82
06-30-97 $12,498.94 $11,097.35
07-31-97 $13,296.92 $11,277.13
08-31-97 $12,608.13 $10,434.73
09-30-97 $13,532.11 $11,019.07
Total Return
Since Inception
As of 09/30/97
35.32%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INTERNATIONAL CORE GROWTH PORTFOLIO B MSCI EAFE INDEX
<S> <C> <C>
12-27-96 $10,000.00 $10,000.00
01-31-97 $10,971.39 $9,629.74
02-28-97 $11,061.95 $9,787.66
03-31-97 $11,274.34 $9,822.90
04-30-97 $11,407.08 $9,874.96
05-31-97 $12,469.03 $10,517.82
06-30-97 $13,176.99 $11,097.35
07-31-97 $14,017.70 $11,277.13
08-31-97 $13,256.64 $10,434.73
09-30-97 $13,730.09 $11,019.07
Total Return
Since Inception
As of 09/30/97
37.30%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INTERNATIONAL CORE GROWTH PORTFOLIO C MSCI EAFE INDEX
<S> <C> <C>
12-27-96 $10,000.00 $10,000.00
01-31-97 10,964.60 9,629.74
02-28-97 11,061.95 9,787.66
03-31-97 11,221.24 9,822.90
04-30-97 11,362.83 9,874.96
05-31-97 12,415.93 10,517.82
06-30-97 13,106.19 11,097.35
07-31-97 13,929.20 11,277.13
08-31-97 13,185.84 10,434.73
09-30-97 14,050.44 11,019.07
Total Return
Since Inception
As of 09/30/97
40.50%
</TABLE>
The graphs compare a $10,000 investment in the International Core Growth
Portfolio A (front load), the B (back-end load) and the C (level load) with a
similar investment in the MSCI EAFE Index, on a cumulative and average annual
total return basis. The Portfolios calculate their performance based upon the
historical performance of their corresponding series ("Fund") of
Nicholas-Applegate Investment Trust, adjusted to reflect sales charges and
Portfolio operating expenses. The effective date of the Portfolios' registration
statements was on 2/28/97. 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 Morgan Stanley Capital International ("MSCI") Europe, Australia, Far East
("EAFE") Index is an unmanaged index that is a generally accepted benchmark for
major overseas markets. The Index weightings represent the relative
capitalizations of the major overseas markets included in the index on a U.S.
dollar adjusted basis.
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 guarantee 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 SEPTEMBER 30, 1997 (UNAUDITED)
- ------------------------------------------------------------------------
INTERNATIONAL CORE GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
COMMON STOCKS -- 101.0%
- ----------------------------------------------------------------------------
ARGENTINA -- 1.8%
Banco de Galicia y Buenos Aires S.A. de
C.V. -- ADR.............................. 9,200 $ 272,550
Perez Companc SA........................... 11,077 88,945
Siderar S.A.I.C. -- A...................... 27,200 150,960
Siderca S.A. -- A.......................... 64,739 194,218
YPF Sociedad Anonima -- ADR................ 3,000 110,625
------------
817,298
------------
AUSTRALIA -- 1.6%
Colonial Ltd.*............................. 114,500 377,926
Westpac Banking Corp., Ltd.*............... 56,000 353,658
------------
731,584
------------
BELGIUM -- 0.4%
Banque Bruxelles Lambert SA................ 660 169,931
------------
BRAZIL -- 1.8%
Centrais Eletricas Brasileiras SA -- ADR... 11,300 314,072
Petroleo Brasiliero SA -- ADR.............. 8,300 233,346
Telecomunicacoes Brasileiras SA -- ADR..... 400 51,500
Uniao de Bancos Brasileiros S.A. -- GDR.... 6,200 227,075
------------
825,993
------------
CANADA -- 6.3%
ATI Technologies, Inc.*.................... 16,000 339,194
Canadian Natural Resources Ltd.*........... 21,400 630,960
Four Seasons Hotel, Inc.................... 8,000 328,000
Newbridge Networks Corp.*.................. 8,000 479,000
Newcourt Credit Group, Inc................. 13,900 522,469
Northern Telecom Ltd....................... 3,300 342,994
Suncor Energy, Inc......................... 5,700 207,033
------------
2,849,650
------------
CHILE -- 0.1%
Laboratorio Chile -- ADR................... 2,100 56,438
------------
CHINA -- 2.9%
China Resources Enterprise Ltd............. 53,000 221,918
Hutchison Whampoa Ltd...................... 42,000 413,867
Novel Demim Holdings Ltd.*................. 11,200 302,400
Qingling Motors Co......................... 279,000 176,674
Shanghai Industrial Holdings Ltd........... 32,000 198,914
------------
1,313,773
------------
FINLAND -- 2.2%
Oy Nokia Corp. AB -- ADR................... 5,250 492,516
Raision Tehtaat Oy......................... 4,200 479,537
------------
972,053
------------
FRANCE -- 6.6%
Cap Gemini Sogeti SA....................... 8,600 558,018
Compagnie Generale de Geophysique SA --
ADR...................................... 7,100 194,362
Dassault Systemes S.A...................... 5,700 365,046
Schneider SA............................... 7,000 441,813
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
</TABLE>
FRANCE (CONTINUED)
<TABLE>
<S> <C> <C>
Elf Aquitaine SA........................... 4,600 $ 614,005
Synthelabo SA.............................. 3,400 402,258
Usinor SA.................................. 20,000 404,146
------------
2,979,648
------------
GERMANY -- 5.2%
Bayerische Motoren Werke AG................ 290 246,316
Deutsche Bank AG........................... 8,400 589,407
Deutsche Lufthansa AG...................... 19,500 383,446
Mannesmann AG.............................. 1,100 522,861
RWE AG..................................... 12,600 611,034
------------
2,353,064
------------
GREECE -- 0.5%
Titan Cement Co. S.A....................... 3,600 217,318
------------
INDIA -- 0.4%
State Bank of India -- GDR*................ 8,700 202,275
------------
IRELAND -- 1.6%
Bank of Ireland............................ 26,700 332,518
Ryanair Holdings PLC -- ADR*............... 13,300 399,623
------------
732,141
------------
ISRAEL -- 1.1%
Bank Leumi Le-Isreal....................... 50,000 82,280
New Dimension Software Ltd.*............... 8,800 181,500
Tecnomatix Technologies Ltd.*.............. 2,400 91,800
Teva Pharmaceutical Industries Ltd. --
ADR...................................... 2,200 122,650
------------
478,230
------------
ITALY -- 4.9%
Assicurazioni Generali SpA................. 19,700 445,095
Credito Italiano SpA....................... 144,600 391,207
La Rinascente SpA.......................... 35,300 270,760
Pininfarina SpA............................ 14,000 258,726
Telecom Italia Mobile SpA.................. 75,900 301,199
Telecom Italia SpA......................... 84,400 562,292
------------
2,229,279
------------
JAPAN -- 20.7%
Advantest Corp............................. 5,300 522,384
Bridgestone Corp........................... 18,000 432,352
Canon, Inc................................. 13,000 380,089
Fujitsu Ltd................................ 35,000 437,736
Hirose Electric, Ltd....................... 4,000 294,529
Ibiden Co., Ltd............................ 30,000 536,713
Keyence Corp............................... 2,500 349,940
Mitsui Fudosan Co., Ltd.................... 25,000 304,386
Mitsui Toatsu Chemicals, Inc............... 140,000 215,679
Nichiei Co., Ltd........................... 4,100 390,525
Nintendo Co., Ltd.......................... 5,000 467,967
NTT Data Corp.............................. 80 362,447
Orix Corp.................................. 5,300 402,982
Rohm Co., Ltd.............................. 4,000 470,452
Seven-Eleven Japan Co., Ltd................ 5,000 375,202
SMC Corp................................... 3,500 333,375
</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>
Sony Corp.................................. 6,400 $ 604,299
Sumitomo Bank, Ltd......................... 32,000 482,379
Takeda Chemical Industries................. 16,000 479,728
TDK Corp................................... 6,000 536,713
Terumo Corp................................ 23,000 426,720
Tokyo Electron Ltd......................... 9,000 549,385
------------
9,355,982
------------
MEXICO -- 4.7%
Alfa S.A. de C.V. -- A..................... 76,000 721,853
Cifra S.A. de C.V. -- A.................... 207,527 454,049
Cifra S.A. de C.V. -- B.................... 21 49
Cifra S.A. de C.V. -- C.................... 19,200 41,514
Corporacion Interamericana de
Entretenimiento S.A.*.................... 74,000 447,619
Organizacion Soriana S.A. de C.V. -- B..... 80,400 320,772
TV Azteca S.A. de C.V. -- ADR*............. 5,800 130,500
------------
2,116,356
------------
NETHERLANDS -- 7.2%
Aegon NV................................... 8 641
AKZO Nobel NV.............................. 2,400 410,150
ASM Lithography Holding NV*................ 4,400 442,410
Baan Co., NV*.............................. 3,180 229,300
ING Groep NV............................... 3,100 142,375
Internati -- Muller NV..................... 4,400 141,943
KLM Royal Dutch Airlines NV................ 10,085 352,197
Philips Electronics NV..................... 8,700 736,184
PolyGram NV................................ 6,400 370,795
Royal Dutch Petroleum Co................... 8,000 444,000
------------
3,269,995
------------
NORWAY -- 0.9%
Petroleum Geo-Services ASA -- ADR*......... 6,250 422,656
------------
PHILIPPINES -- 0.4%
Music Corporation*......................... 449,000 201,390
------------
POLAND -- 0.2%
Elektrim Spolka Akcyjna S.A................ 7,100 79,628
------------
PORTUGAL -- 1.3%
BPI-SGPS, SA............................... 6,300 143,431
Cimpor-Cimentos de Portugal, SGPS, SA...... 4,900 132,442
Portugal Telecom SA........................ 6,750 292,761
------------
568,634
------------
RUSSIA -- 0.6%
Lukoil Oil Co. -- ADR...................... 2,975 292,219
------------
SINGAPORE -- 1.8%
Datacraft Asia Ltd......................... 61,000 193,980
Electronic Resources Ltd................... 156,000 283,507
MMI Holding Ltd.*.......................... 118,200 72,634
Parkway Holdings Ltd....................... 31,000 125,646
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
</TABLE>
SINGAPORE (CONTINUED)
<TABLE>
<S> <C> <C>
Sunright Ltd............................... 81,000 $ 131,849
------------
807,616
------------
SOUTH AFRICA -- 0.7%
Barlow Ltd................................. 10,400 118,828
Dimension Data Holdings Ltd.*.............. 48,800 204,184
------------
323,012
------------
SPAIN -- 3.7%
Banco Central Hispano Americano SA......... 2,200 91,888
Cortefiel SA............................... 10,100 428,620
Fomento de Construcciones y Contratas SA... 1,300 200,456
Tabacalera SA -- A......................... 8,900 624,718
Tele Pizza S.A.*........................... 4,500 313,757
------------
1,659,439
------------
SWEDEN -- 2.0%
ABB AB -- A................................ 19,000 269,019
Pricer AB*................................. 10,900 317,278
Telefonaktiebolaget LM Ericsson-ADR........ 6,600 316,388
------------
902,685
------------
SWITZERLAND -- 5.0%
Adecco SA.................................. 970 390,241
Ares-Serono Group.......................... 320 576,577
Kuoni Reisen Holdings AG................... 120 477,821
Nestle SA.................................. 300 417,990
Novartis AG................................ 150 230,039
Swiss Reinsurance Co....................... 100 149,990
------------
2,242,658
------------
TAIWAN -- 0.7%
Ase Test Ltd.*............................. 3,500 296,625
------------
TURKEY -- 0.4%
Haci Omer Sabanci Holding AS*.............. 4,685,000 206,612
------------
UNITED KINGDOM -- 12.3%
Bank of Ireland............................ 10,000 124,305
Barclays PLC............................... 17,500 472,757
British Aerospace PLC...................... 15,600 418,661
BTR PLC.................................... 68,000 275,907
Dixons Group PLC........................... 40,600 422,475
Doncoasters PLC -- ADR*.................... 12,600 378,000
Glaxo Wellcome PLC......................... 18,000 404,954
J. Sainsbury PLC........................... 46,000 344,714
Johnson Matthey PLC........................ 59,700 651,564
Ladbroke Group PLC......................... 96,600 424,677
Lloyds TSB Group PLC....................... 34,300 461,780
Misys (Jersey) Ltd.*....................... 1,771 44,429
Misys PLC.................................. 14,000 353,474
Next PLC................................... 28,300 331,694
Pilkington PLC............................. 171,900 435,402
------------
5,544,793
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
49
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1997 (UNAUDITED) -- CONTINUED
- --------------------------------------------------------------------------------
INTERNATIONAL CORE GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCKS (Continued)
- ---------------------------------------------------------
<TABLE>
<S> <C> <C>
UNITED STATES OF AMERICA -- 0.5%
Syntel Inc.*............................... 12,900 $ 204,788
------------
VENEZUELA -- 0.5%
Compania Anonima Nacional Telefonos de
Venezuela -- ADR......................... 3,100 141,825
Siderurgica Venezolana S.A.C.A............. 16,600 97,757
------------
239,582
------------
TOTAL COMMON STOCKS
(Cost $41,720,975)....................................... 45,663,345
------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
COMMERCIAL PAPER -- 0.6%
- ----------------------------------------------------------------------------
J.P. Morgan & Co., Inc. 6.250%,
10/01/97
(Cost $277,000).......................... $ 277,000 $ 277,000
------------
TOTAL INVESTMENTS -- 101.6%
(Cost $41,997,975)....................................... 45,940,345
LIABILITIES IN EXCESS OF OTHER ASSETS -- (1.6%)............ (741,112)
------------
NET ASSETS -- 100.0%....................................... $ 45,199,233
------------
</TABLE>
- ------------
* Non-Income Producing Security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
50
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF SEPTEMBER 30, 1997 (UNAUDITED)
- ------------------------------------------------------------------------
INTERNATIONAL CORE GROWTH FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
- -------------------------------------------- -------------
<S> <C>
Aerospace................................... 0.7%
Airlines.................................... 2.0
Automotive.................................. 1.3
Automotive Equipment........................ 0.5
Biotechnology............................... 0.7
Broadcasting................................ 1.4
Building Materials.......................... 2.9
Chemicals................................... 1.2
Clothing Chains............................. 0.1
Computers/Office Automation................. 2.9
Consumer Electrical......................... 1.1
Department/Discount Stores.................. 3.6
Drugs/Pharmaceuticals....................... 6.0
Electric Utilities.......................... 0.8
Electric Products Miscellaneous............. 0.2
Electronic Instruments...................... 4.2
Electronics/Music Chains.................... 0.9
Entertainment............................... 0.6
Finance Companies........................... 0.5
Food Chains................................. 1.0
Grocery Products............................ 1.5
Industrial Engineering/Construction......... 0.6
Integrated Oil Companies.................... 4.0
Investment Companies........................ 1.8
Leisure/Gaming.............................. 0.6
Lodging..................................... 1.2
Machinery/Equipment......................... 2.1
Medical Supplies............................ 0.9
Metals...................................... 2.7
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
- -------------------------------------------- -------------
<S> <C>
Money Center Banks.......................... 8.2%
Multi-Line Insurers......................... 0.6
Oil/Gas Production.......................... 3.8
Oilfield Services/Equipment................. 0.1
Other Commercial/Industrial Services........ 2.9
Other Consumer Non-Durables................. 1.0
Other Consumer Services..................... 0.5
Other Energy................................ 0.3
Other Financial Services.................... 0.3
Other Production/Manufacturing.............. 5.8
Real Estate Development/Investment.......... 0.6
Regional/Commercial Banks................... 2.8
Rental/Leasing Companies.................... 0.3
Reinsurance................................. 0.3
Restaurants................................. 0.4
Retail/Food Distribution.................... 1.1
Savings & Loans/Thrifts..................... 0.4
Semiconductors/Electric Companies........... 7.3
Software.................................... 4.5
Specialty Chains............................ 0.9
Telecommunication Equipment................. 3.3
Telecommunication Services.................. 4.3
Textiles.................................... 1.5
Tobacco Products............................ 1.0
Toys........................................ 0.5
Wholesale Distribution...................... 0.3
Short Term Obligations...................... 0.6
Liabilities in Excess of Other Assets....... (1.6)
-----
NET ASSETS.................................. 100.0%
-----
-----
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
51
<PAGE>
WORLDWIDE 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
John J. Kane,
Partner, Senior Portfolio Manager
Pedro V. Marcal,
Senior Portfolio Manager
Loretta J. Morris,
Senior Portfolio Manager
Ernesto Ramos, Ph.D.,
Senior Portfolio Manager
Melisa Grigolite,
Portfolio Manager
Aaron Harris,
Portfolio Manager
Eswar Menon,
Portfolio Manager
Alex Muromcew,
Portfolio Manager
Mark Stuckelman,
Portfolio Manager
John Tribolet,
Investment Analyst
GOAL: The Nicholas-Applegate Worldwide Growth Fund seeks to maximize long-term
capital appreciation through investing in a portfolio of growth stocks of U.S.
and international companies.
REVIEW AND OUTLOOK: The Worldwide Growth Fund registered a 26.4% increase
during the period April 1 through September 30, 1997, outperforming its
benchmark, the MSCI World Index up 18.3%. Stock selection, particularly within
the technology sector in the United States and overseas, bolstered returns for
the portfolio.
As businesses around the world invest in technology infrastructure and
purchase large amounts of computer hardware and software, we continued to
identify many companies benefiting from this trend. Some of the Fund's strongest
performers during the first six months of the fiscal year were U.S.-based
technology companies Dell Computer, Intel, and Compaq Computer.
Reflecting the dramatic increase in demand for high-tech products, technology
spending as a percentage of U.S. gross domestic product has tripled during the
last five years. Other industrialized economies are expected to experience a
similar trend.
In the Netherlands, some of our best-performing holdings were also in
technology. ASM Lithography benefited from an increased demand in the
semiconductor industry, and Baan, which registered increased sales for its
business management software products.
Elsewhere in the world, we unearthed exciting stock picks in Japan, Taiwan,
Italy, and Spain. Despite Japan's economic troubles during the period,
Nicholas-Applegate's bottom-up stock selection approach helped us identify
stocks which continue to thrive despite the unfavorable domestic climate.
Healthcare shares, such as Takeda, a pharmaceutical company, and Terumo, a
medical equipment exporter, were some of the contributors to the Fund's gains.
Japan's healthcare industry is expected to benefit from an aging Japanese
population.
As we continue to find many excellent opportunities around the world using our
bottom-up method of stock selection, our outlook for the Fund remains very
positive.
REPRESENTATIVE HOLDINGS
Advantest, Japan
Ares-Serono SA, Switzerland
British Aerospace, United Kingdom
Compaq Computer, United States
Dell Computer, United States
Deutsche Bank, Germany
Lufthansa, Germany
Petroleum Geo Services, Norway
Sony, Japan
Telecom Italia, Italy
- --------------------------------------------------------------------------------
52
<PAGE>
WORLDWIDE GROWTH PORTFOLIOS
- ------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ANNUALIZED TOTAL RETURNS AS OF 09/30/97
<S> <C> <C>
1 Year 3 Years Since Inception
25.68% 15.63% 15.60%
Worldwide Growth MSCI World
Portfolio A Index
19-Apr-93 $9,475.00 $10,000.00
30-Jun-93 9,975.28 10,283.06
30-Sep-93 10,756.02 10,765.74
31-Dec-93 10,809.08 10,940.63
31-Mar-94 11,324.52 11,007.30
30-Jun-94 11,127.44 11,338.33
30-Sep-94 11,680.78 11,581.61
31-Dec-94 11,073.73 11,498.33
31-Mar-95 11,222.95 12,017.66
30-Jun-95 11,866.95 12,530.40
30-Sep-95 12,966.47 13,212.41
31-Dec-95 12,705.93 13,839.58
31-Mar-96 13,444.27 14,402.82
30-Jun-96 14,369.22 14,820.99
30-Sep-96 14,369.22 15,018.73
31-Dec-96 14,983.16 15,705.98
31-Mar-97 15,126.54 15,751.02
30-Jun-97 17,366.84 18,121.07
30-Sep-97 19,060.51 18,639.41
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ANNUALIZED TOTAL RETURNS AS OF 09/30/97
<S> <C> <C>
1 Year 3 Years Since Inception
27.02% 16.27% 16.03%
Worldwide Growth MSCI World
Portfolio B Index
19-Apr-93 $10,000.00 $10,000.00
30-Jun-93 10,514.56 10,283.06
30-Sep-93 11,310.68 10,765.74
31-Dec-93 11,349.51 10,940.63
31-Mar-94 11,883.50 11,007.30
30-Jun-94 11,650.49 11,338.33
30-Sep-94 12,223.30 11,581.61
31-Dec-94 11,563.11 11,498.33
31-Mar-95 11,708.74 12,017.66
30-Jun-95 12,339.81 12,530.40
30-Sep-95 13,475.73 13,212.41
31-Dec-95 13,165.05 13,839.58
31-Mar-96 13,922.33 14,402.82
30-Jun-96 14,854.37 14,820.99
30-Sep-96 14,825.24 15,018.73
31-Dec-96 15,446.60 15,705.98
31-Mar-97 15,553.40 15,751.02
30-Jun-97 17,854.37 18,121.07
30-Sep-97 19,372.82 18,639.41
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ANNUALIZED TOTAL RETURNS AS OF 09/30/97
<S> <C> <C>
1 Year 3 Years Since Inception
31.78% 16.97% 16.28%
Worldwide Growth MSCI World
Portfolio C Index
19-Apr-93 $10,000.00 $10,000.00
30-Jun-93 10,520.00 10,283.06
30-Sep-93 11,320.00 10,765.74
31-Dec-93 11,352.00 10,940.63
31-Mar-94 11,888.00 11,007.30
30-Jun-94 11,656.00 11,338.33
30-Sep-94 12,224.00 11,581.61
31-Dec-94 11,564.96 11,498.33
31-Mar-95 11,710.94 12,017.66
30-Jun-95 12,351.64 12,530.40
30-Sep-95 13,478.94 13,212.41
31-Dec-95 13,181.86 13,839.58
31-Mar-96 13,929.89 14,402.82
30-Jun-96 14,869.07 14,820.99
30-Sep-96 14,844.14 15,018.73
31-Dec-96 15,455.91 15,705.98
31-Mar-97 15,575.58 15,751.02
30-Jun-97 17,858.52 18,121.07
30-Sep-97 19,561.53 18,639.41
</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. Portfolio B calculates its performance based upon the
historical performance of its corresponding series ("Fund") of
Nicholas-Applegate Investment Trust, adjusted to reflect sales charges and
Portfolio operating expenses. The effective date of Portfolio B's registration
statement was on 5/31/95. 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 guarantee 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.
- --------------------------------------------------------------------------------
53
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1997 (UNAUDITED)
- ------------------------------------------------------------------------
WORLDWIDE GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
COMMON STOCKS -- 98.0%
- ----------------------------------------------------------------------------
ARGENTINA -- 1.1%
Banco Frances del Rio de la Plata S.A. --
ADR...................................... 16,100 $ 526,269
Perez Companc S.A.......................... 47,637 382,529
Siderar S.A.I.C. -- A...................... 7,728 42,890
Siderca S.A. -- A.......................... 197,566 592,698
------------
1,544,386
------------
AUSTRALIA -- 0.3%
Australian Gas & Light Co., Ltd............ 3,170 21,584
Colonial Ltd.*............................. 103,600 341,949
------------
363,533
------------
BRAZIL -- 1.2%
Centrais Electricas Brasileiras SA -- ADR.. 25,000 694,850
Telecomunicacoes Brasileiras SA -- ADR..... 1,700 218,875
Telecomunicacoes do Parana SA --
Preferred................................ 487,554 360,525
Uniao de Bancos Brasileiros S.A. -- GDR.... 11,900 435,838
------------
1,710,088
------------
CANADA -- 3.9%
Canadian Natural Resources Ltd.*........... 33,500 987,718
Four Seasons Hotels, Inc................... 14,000 574,000
Newbridge Networks Corp. -- ADR*........... 16,000 958,000
Newcourt Credit Group, Inc................. 32,500 1,221,601
Northern Telecom Ltd. -- ADR............... 10,000 1,039,375
Suncor, Inc................................ 17,800 646,523
------------
5,427,217
------------
CHINA -- 1.8%
China Resources Enterprise Ltd............. 110,000 460,584
Hutchison Whampoa Ltd...................... 118,600 1,168,681
Qingling Motors Co. Ltd.................... 500,000 316,619
Shanghai Industrial Holdings Ltd........... 81,000 503,502
------------
2,449,386
------------
FINLAND -- 2.1%
Oy Nokia Ab -- ADR......................... 16,200 1,519,763
Raision Tehtaat Oy......................... 13,000 1,484,282
------------
3,004,045
------------
FRANCE -- 4.4%
AXA-UAP.................................... 8,000 536,614
Cap Gemini Sogeti SA....................... 21,000 1,362,602
Dassault Systemes S.A...................... 10,900 698,070
Elf Aquitaine SA........................... 7,300 974,400
Schneider SA............................... 14,000 883,627
Synthelabo SA.............................. 7,000 828,179
Usinor Sacilor S.A......................... 40,000 808,292
------------
6,091,784
------------
GERMANY -- 4.4%
Bayerische Motoren Werke AG................ 2,000 1,698,732
Deutsche Bank AG........................... 18,100 1,270,032
Deutsche Lufthansa AG...................... 71,000 1,396,135
Mannesmann AG.............................. 1,700 808,058
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
</TABLE>
GERMANY (CONTINUED)
<TABLE>
<S> <C> <C>
RWE AG..................................... 21,200 $ 1,028,090
------------
6,201,047
------------
GREECE -- 0.4%
Titan Cement Co. S.A....................... 8,300 501,039
------------
INDIA -- 0.8%
Bombay Suburban Electric Supply Co.,
Ltd...................................... 8,100 43,277
HDFC Bank Ltd.............................. 250,000 480,370
State Bank of India -- GDR*................ 24,400 567,300
------------
1,090,947
------------
IRELAND -- 0.6%
Bank of Ireland............................ 65,000 807,981
------------
ISRAEL -- 1.0%
Bank Leumi Le-Israel....................... 204,000 335,704
Makhteshim Chemical Works, Ltd............. 44,700 308,741
Tecnomatix Technologies Ltd. -- ADR*....... 12,000 459,000
Teva Pharmaceutical Industries Ltd. --
ADR...................................... 4,400 245,300
------------
1,348,745
------------
ITALY -- 3.7%
Assicurazioni Generali SpA................. 40,000 903,745
Credito Italiano SpA....................... 602,000 1,628,677
Telecom Italia SpA......................... 209,300 1,394,404
Telecom Italia Mobile SpA.................. 322,300 1,279,005
------------
5,205,831
------------
JAPAN -- 12.9%
Advantest Corp............................. 17,600 1,734,708
Bank of Tokyo-Mitsubishi Ltd............... 2,000 38,100
Bridgestone Corp........................... 37,000 888,723
Canon, Inc................................. 38,000 1,111,028
Fujitsu Ltd................................ 90,000 1,125,606
Hirose Electric Ltd........................ 11,000 809,956
Ibiden Co., Ltd............................ 77,000 1,377,562
Mitsui Fudosan Co., Ltd.................... 70,000 852,280
Mitsui Toatsu Chemicals, Inc............... 300,000 462,169
Nichiei Co., Ltd........................... 15,600 1,485,899
Nintendo Co., Ltd.......................... 10,900 1,020,168
Orix Corp.................................. 19,800 1,505,479
Sony Corp.................................. 16,000 1,510,747
Sumitomo Bank, Ltd......................... 61,000 919,535
Takeda Chemical Industries................. 21,000 629,643
TDK Corp................................... 13,000 1,162,877
Terumo Corp................................ 80,000 1,484,242
------------
18,118,722
------------
MEXICO -- 0.9%
TV Azteca S.A. de C.V. -- ADR*............. 57,300 1,289,250
------------
NETHERLANDS -- 4.3%
AKZO Nobel NV.............................. 6,000 1,025,376
Baan Co., NV*.............................. 16,300 1,157,300
Philips Electronics NV..................... 13,600 1,150,817
Polygram NV................................ 12,000 695,241
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
54
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
- ----------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCKS (Continued)
- ---------------------------------------------------------
NETHERLANDS (CONTINUED)
<TABLE>
<S> <C> <C>
Royal Dutch Petroleum Co................... 24,000 $ 1,343,450
Volker Wessels Stevin NV................... 22,112 713,326
------------
6,085,510
------------
NORWAY -- 1.6%
Petroleum Geo-Services ASA -- ADR*......... 18,300 1,237,538
Tomra Systems ASA.......................... 44,500 1,024,321
------------
2,261,859
------------
PAKISTAN -- 0.2%
Hub Power Co., Ltd.*....................... 194,000 259,577
------------
POLAND -- 0.2%
Elektrim Spolka Akcyjna S.A................ 29,650 332,531
------------
PORTUGAL -- 1.3%
BPI-SGPS, S.A.............................. 26,000 591,937
Portugal Telecom SA........................ 29,000 1,257,787
------------
1,849,724
------------
RUSSIA -- 0.4%
Lukoil Oil Co. -- ADR...................... 5,950 584,439
------------
SINGAPORE -- 0.8%
Lindeteves-Jacoberg Ltd.................... 343,000 549,356
Parkway Holdings Ltd....................... 151,000 612,015
------------
1,161,371
------------
SOUTH AFRICA -- 0.0%
Liberty Life Association of Africa Ltd..... 277 8,083
South African Breweries Ltd.*.............. 175 5,079
------------
13,162
------------
SPAIN -- 2.2%
Banco Central Hispanoamericano SA.......... 14,300 597,271
Fomento de Construcciones y Contratas
S.A...................................... 7,500 1,156,476
Tabacalera SA -- A......................... 18,300 1,284,533
------------
3,038,280
------------
SWEDEN -- 1.7%
ABB AB -- A................................ 60,000 849,534
Astra AB................................... 133 2,361
Telefonaktiebolaget LM Ericsson -- ADR..... 32,000 1,534,000
------------
2,385,895
------------
SWITZERLAND -- 3.8%
Adecco SA.................................. 2,200 885,084
Ares-Serono Group.......................... 980 1,765,766
Nestle SA.................................. 600 835,981
Novartis AG................................ 525 805,137
Swiss Reinsurance Co....................... 650 974,933
------------
5,266,901
------------
TAIWAN -- 1.2%
ASE Test Ltd.*............................. 17,500 1,483,125
Siliconware Precision Industries Co.*...... 40,600 138,409
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------------
</TABLE>
TAIWAN (CONTINUED)
<TABLE>
<S> <C> <C>
Tuntex Distinct Corp.*..................... 6,131 $ 35,158
------------
1,656,692
------------
UNITED KINGDOM -- 7.3%
Barclays PLC............................... 53,500 1,445,287
British Aerospace PLC...................... 33,887 909,434
British Airways PLC........................ 526 5,758
BTR PLC.................................... 140,000 568,043
Dixons Group PLC........................... 67,900 706,553
GKN PLC.................................... 1,807 40,813
Glaxo Wellcome PLC......................... 39,000 877,401
Johnson Matthey PLC........................ 93,000 1,015,000
Ladbroke Group PLC......................... 16,800 73,857
Lloyds TSB Group PLC....................... 100,000 1,346,299
Misys (Jersey) Ltd. PLC*................... 3,285 82,410
Misys PLC.................................. 26,000 656,452
Next PLC................................... 75,300 882,563
Pilkington PLC............................. 359,500 910,571
J. Sainsbury PLC........................... 95,000 711,909
------------
10,232,350
------------
UNITED STATES OF AMERICA -- 32.7%
AirTouch Communications, Inc.*............. 26,800 949,725
AmSouth Bancorporation..................... 16,900 818,594
Applied Materials, Inc.*................... 5,900 561,975
Avid Technology, Inc.*..................... 14,200 461,500
BankAmerica Corp........................... 20,500 1,502,906
BMC Software, Inc.*........................ 8,900 576,275
Bristol-Myers Squibb Co.................... 11,700 968,175
Caterpillar, Inc........................... 21,400 1,154,262
Comerica, Inc.............................. 8,400 663,075
Compaq Computer Corp.*..................... 22,000 1,644,500
Compuware Corp.*........................... 8,600 520,300
Corning, Inc............................... 22,300 1,053,675
Costco Companies, Inc.*.................... 12,000 451,500
Dayton Hudson Corp......................... 8,800 527,450
Dell Computer Corp.*....................... 15,300 1,482,187
Electronics for Imaging, Inc.*............. 8,900 453,900
Ensco International, Inc.*................. 20,800 820,300
Exxon Corp................................. 23,800 1,524,687
Fannie Mae................................. 11,800 554,600
Federal-Mogul Corp......................... 9,200 341,550
Ford Motor Co.............................. 33,600 1,520,400
Gannett Co., Inc........................... 9,600 1,036,200
General Electric Co........................ 9,400 639,787
Home Depot, Inc............................ 20,700 1,078,987
Intel Corp................................. 4,900 452,331
International Specialty Products, Inc.*.... 15,500 231,531
Interstate Bakeries Corp................... 12,500 857,031
Jabil Circuit, Inc.*....................... 17,600 1,152,800
Liz Claiborne, Inc......................... 7,500 412,032
MBNA Corp.................................. 19,700 797,850
McAfee Associates, Inc.*................... 6,000 318,000
Merck & Co., Inc........................... 14,500 1,449,094
Microsoft Corp.*........................... 9,700 1,283,431
NBTY, Inc.*................................ 11,100 234,487
New York Bancorp, Inc...................... 1,800 53,887
Oxford Health Plans, Inc.*................. 12,200 913,475
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
55
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 1997 (UNAUDITED) -- 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>
Praxair, Inc............................... 6,700 $ 342,956
Premark International, lnc................. 10,800 345,600
QLogic Corp.*.............................. 16,000 670,000
Quaker Oats Co............................. 15,100 760,663
Robert Half International, Inc.*........... 14,100 583,388
Ross Stores, Inc........................... 27,200 928,200
SLM Holding Corp........................... 2,900 448,050
Smithfield Foods, Inc.*.................... 26,000 780,000
State Street Corp.......................... 22,600 1,377,188
Systems & Computer Technology Corp.*....... 11,900 536,244
Tekelec, Inc. *............................ 11,600 395,125
Tellabs, Inc.*............................. 3,100 159,650
Tesoro Petroleum Corp. *................... 25,600 462,400
Texas Instruments, Inc..................... 8,200 1,108,025
The Equitable Cos., Inc.................... 33,900 1,392,019
The Procter & Gamble Co.................... 19,800 1,367,438
Travelers Group, Inc....................... 15,000 1,023,750
United Technologies Corp................... 14,400 1,166,400
USX-Marathon Group......................... 30,900 1,149,094
UTI Energy Corp. *......................... 12,700 524,669
Wellpoint Health Networks, Inc.*........... 11,000 637,312
------------
45,620,630
------------
VENEZUELA -- 0.8%
C.A. La Electricidad de Caracas............ 437,500 704,568
Compania Anonima Nacional Telefonos de
Venezuela -- ADR......................... 10,500 480,375
------------
1,184,943
------------
TOTAL COMMON STOCKS
(Cost $107,799,957)......................................
137,087,865
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
- -------------------------------------------------------------------------------
CONVERTIBLE BONDS -- 0.0%
- -------------------------------------------------------------------------------
SINGAPORE
Lindeteves-Jacoberg Ltd. Loan Stock
1.500%, 7/28/02
(Cost $30,319)........................... 100,000 $ 47,068
------------
- -------------------------------------------------------------------------------
COMMERCIAL PAPER -- 3.1%
- -------------------------------------------------------------------------------
J.P. Morgan & Co., Inc.
6.250%, 10/1/97
(Cost $4,341,000)........................ 4,341 $ 4,341,000
------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER
OF SHARES
<S> <C> <C>
- -------------------------------------------------------------------------------
WARRANTS/RIGHTS -- 0.1%
- -------------------------------------------------------------------------------
SINGAPORE
Lindeteves-Jacoberg -- Warrants
(Cost $38,541) 100,000 $ 109,825
------------
TOTAL INVESTMENTS -- 101.2%
(Cost $112,209,817)........................................
$141,585,758
LIABILITIES IN EXCESS OF OTHER ASSETS -- (1.2%).............. (1,671,810)
------------
NET ASSETS -- 100.0%......................................... $139,913,948
------------
</TABLE>
- ---------------
* Non-Income Producing Security
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
56
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF SEPTEMBER 30, 1997 (UNAUDITED)
- ------------------------------------------------------------------------
WORLDWIDE GROWTH FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
- -------------------------------------------- -------------
<S> <C>
Aerospace................................... 1.5%
Airlines.................................... 1.0
Alcoholic Beverages......................... 0.1
Apparel..................................... 0.3
Automotive.................................. 2.5
Automotive Equipment........................ 0.9
Biotechnology............................... 1.3
Broadcasting................................ 0.9
Building Materials.......................... 1.8
Chemicals................................... 1.7
Clothing Chains............................. 0.7
Computers/Office Automation................. 4.3
Consumer Electrical......................... 1.1
Contract Drilling........................... 0.4
Department/Discount Stores.................. 0.7
Drugs/Pharmaceuticals....................... 4.3
Electric Utilities.......................... 1.2
Electronic Data Process..................... 0.4
Electronic Instruments...................... 2.7
Entertainment............................... 0.5
Finance Companies........................... 3.2
Gas Utilities............................... 0.1
Grocery Products............................ 3.4
Industrial Engineering/Construction......... 1.3
Investment Companies........................ 0.4
Leisure/Gaming.............................. 0.1
Life Insurers............................... 1.0
Machinery/Equipment......................... 3.8
Managed Health Care/HMOs.................... 1.1
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
- -------------------------------------------- -------------
<S> <C>
Medical Supplies............................ 1.1%
Metals...................................... 1.0
Lodging..................................... 0.4
Money Center Banks.......................... 5.3
Multi-Line Insurers......................... 1.8
Oil/Gas Production.......................... 5.4
Oilfield Services/Equipment................. 1.5
Oil Refining Marketing...................... 0.3
Other Commercial/Industrial Services........ 2.5
Other Consumer Non-Durables................. 1.3
Other Energy................................ 0.7
Other Financial Services.................... 0.3
Other Production/Manufacturing.............. 4.1
Publishing.................................. 0.7
Real Estate Development/Investment.......... 0.9
Recreational Products....................... 0.7
Regional/Commercial Banks................... 4.3
Rental/Leasing Companies.................... 1.1
Retail/Food Distribution.................... 0.5
Savings & Loans/Thrifts..................... 0.7
Semiconductors/Electric Companies........... 4.7
Software.................................... 5.4
Specialty Chains............................ 0.6
Telecommunication Equipment................. 4.0
Telephone................................... 4.2
Textiles.................................... 1.0
Tobacco Products............................ 0.9
Short Term Obligations...................... 3.1
Liabilities in Excess of Other Assets....... (1.2)
-----
NET ASSETS.................................. 100.0%
-----
-----
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
57
<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 period
ended 09/30/97)#.......... $ 15.15 $ (0.02) $ 6.95 -- --
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 period
ended 09/30/97)#.......... 16.80 (0.10) 5.16 -- --
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)
LARGE CAP GROWTH+++
Portfolio A (For the period
ended 09/30/97)#.......... 12.50 (0.01) 0.92 -- --
INCOME & GROWTH++
Portfolio A (For the period
ended 09/30/97)#.......... 16.59 0.46 3.04 $ (0.23) --
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 period
ended 09/30/97)#.......... 15.54 0.23 4.27 (0.11) --
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 period
ended 09/30/97)#.......... 12.16 0.78 0.17 (0.37) --
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 FUND++
Portfolio A (For the period
ended 09/30/97)#.......... 1.00 0.06 (0.03) (0.03) --
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 period
ended 09/30/97)#.......... 17.20 0.02 3.23 -- --
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+++++
Portfolio A (For the period
ended 09/30/97)#.......... 14.92 (0.01) 3.09 -- --
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 09/30/97)#.......... 12.73 (0.02) 3.40 -- --
Portfolio A (For the period
ended 03/31/97)........... 12.50 -- 0.23 -- --
WORLDWIDE GROWTH++
Portfolio A (For the period
ended 09/30/97)#.......... 16.88 0.01 4.38 -- --
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>
- --------------------
+ Commenced operations on December 27, 1993.
++ Commenced operations on April 19, 1993.
+++ Commenced operations on July 21, 1997.
++++ Commenced operations on November 28, 1994.
+++++ Commenced operations on August 31, 1994.
++++++ Commenced operations on February 28, 1997.
* Annualized.
** Includes expenses allocated from the Master Trust Funds. See Notes to
Funds' Financial Statements for amounts.
# Unaudited
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
58
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIO OF
RATIO OF EXPENSES TO
EXPENSES TO AVERAGE NET
AVERAGE NET ASSETS, BEFORE
ASSETS, AFTER EXPENSE
NET ASSETS EXPENSE REIMBURSEMENT
NET ASSET AT REIMBURSEMENT (RECOUPMENT)
VALUES AT TOTAL END OF (RECOUPMENT) AND FEE
END OF PERIOD RETURN PERIOD AND FEE WAIVER** WAIVER**
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
EMERGING GROWTH+
Portfolio A (For the period
ended 09/30/97)#.......... $ 22.08 45.74% 2$11,017,293 1.96%* 1.90%*
Portfolio A (For the year
ended 03/31/97)........... 15.15 (6.26%) 121,741,647 1.72% 1.72%
Portfolio A (For the year
ended 03/31/96)........... 17.93 37.48% 138,155,390 1.74% 1.74%
Portfolio A (For the year
ended 03/31/95)........... 13.06 7.93% 106,725,077 1.86% 1.84%
Portfolio A (For the period
ended 03/31/94)........... 12.10 (3.20%) 104,838,285 1.73%* 1.80%*
CORE GROWTH++
Portfolio A (For the period
ended 09/30/97)#.......... 21.86 30.12% 94,794,263 1.59%* 1.72%*
Portfolio A (For the year
ended 03/31/97)........... 16.80 1.09% 76,107,976 1.60% 1.56%
Portfolio A (For the year
ended 03/31/96)........... 18.37 35.07% 77,275,060 1.58% 1.56%
Portfolio A (For the year
ended 03/31/95)........... 13.61 2.72% 65,291,541 1.59% 1.63%
Portfolio A (For the period
ended 03/31/94)........... 13.25 6.27% 70,512,167 1.57%* 1.71%*
LARGE CAP GROWTH+++
Portfolio A (For the period
ended 09/30/97)#.......... 13.41 38.11% 331,199 1.60%* 4.89%*
INCOME & GROWTH++
Portfolio A (For the period
ended 09/30/97)#.......... 19.86 21.18% 38,880,164 1.59%* 1.72%*
Portfolio A (For the year
ended 03/31/97)........... 16.59 13.73% 32,081,563 1.60% 1.75%
Portfolio A (For the year
ended 03/31/96)........... 15.68 26.00% 31,712,051 1.60% 1.76%
Portfolio A (For the year
ended 03/31/95)........... 12.86 (2.64%) 31,150,481 1.60% 1.76%
Portfolio A (For the period
ended 03/31/94)........... 14.16 19.65% 30,447,446 1.59%* 1.83%*
BALANCED GROWTH++
Portfolio A (For the period
ended 09/30/97)#.......... 19.92 28.98% 6,219,673 1.61%* 2.64%*
Portfolio A (For the year
ended 03/31/97)........... 15.54 6.74% 4,897,987 1.60% 3.00%
Portfolio A (For the year
ended 03/31/96)........... 16.16 20.16% 5,902,210 1.60% 3.30%
Portfolio A (For the year
ended 03/31/95)........... 13.74 3.22% 4,979,593 1.60% 2.78%
Portfolio A (For the period
ended 03/31/94)........... 13.52 9.35% 6,445,901 1.59%* 3.28%*
GOVERNMENT INCOME++
Portfolio A (For the period
ended 09/30/97)#.......... 12.73 7.83% 1,038,501 0.91%* 6.19%*
Portfolio A (For the year
ended 03/31/97)........... 12.16 2.73% 1,113,290 0.90% 7.67%
Portfolio A (For the year
ended 03/31/96)........... 12.74 9.71% 1,297,458 0.93% 9.58%
Portfolio A (For the year
ended 03/31/95)........... 12.29 3.68% 925,074 1.10% 8.40%
Portfolio A (For the period
ended 03/31/94)........... 12.51 4.97% 819,919 1.10%* 20.28%*
MONEY MARKET FUND++
Portfolio A (For the period
ended 09/30/97)#.......... 1.00 2.61% 39,503,731 0.45%* 1.18%*
Portfolio A (For the year
ended 03/31/97)........... 1.00 5.09% 36,258,680 0.45% 1.73%
Portfolio A (For the year
ended 03/31/96)........... 1.00 5.47% 3,129,223 0.45% 5.78%
Portfolio A (For the year
ended 03/31/95)........... 1.00 4.58% 2,995,847 0.31% 2.49%
Portfolio A (For the period
ended 03/31/94)........... 1.00 1.72% 47,975 0.54%* 323.24%*
EMERGING COUNTRIES++++
Portfolio A (For the period
ended 09/30/97)#.......... 20.45 18.90% 61,710,036 2.26%* 2.33%*
Portfolio A (For the year
ended 03/31/97)........... 17.20 24.79% 38,687,897 2.25% 3.08%
Portfolio A (For the year
ended 03/31/96)........... 14.03 28.43% 4,717,767 2.25% 6.72%
Portfolio A (For the period
ended 03/31/95)........... 11.00 (11.98%) 1,197,361 2.25%* 6.15%*
INTERNATIONAL SMALL CAP+++++
Portfolio A (For the period
ended 09/30/97)#.......... 18.00 20.64% 11,212,074 1.96%* 2.85%*
Portfolio A (For the year
ended 03/31/97)........... 14.92 14.67% 5,569,084 1.95% 3.76%
Portfolio A (For the year
ended 03/31/96)........... 13.15 15.46% 1,055,809 1.95% 10.06%
Portfolio A (For the period
ended 03/31/95)........... 11.51 (7.85%) 610,176 1.95%* 9.77%*
INTERNATIONAL CORE
GROWTH++++++
Portfolio A (For the period
ended 09/30/97)#.......... 16.11 26.65% 3,020,429 1.96%* 4.94%*
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 period
ended 09/30/97)#.......... 21.27 26.01% 33,337,476 1.86%* 2.11%*
Portfolio A (For the year
ended 03/31/97)........... 16.88 12.51% 24,022,177 1.85% 2.17%
Portfolio A (For the year
ended 03/31/96)........... 16.57 19.79% 23,480,586 1.85% 2.17%
Portfolio A (For the year
ended 03/31/95)........... 14.29 (0.90%) 22,207,775 1.85% 2.18%
Portfolio A (For the period
ended 03/31/94)........... 14.94 19.52% 20,194,105 1.85%* 2.23%*
<CAPTION>
RATIO OF NET
INVESTMENT INCOME (DEFICIT)
INCOME (DEFICIT) TO TO
AVERAGE NET AVERAGE NET
ASSETS, AFTER ASSETS, BEFORE
EXPENSE EXPENSE
REIMBURSEMENT REIMBURSEMENT
(RECOUPMENT) (RECOUPMENT)
AND FEE WAIVER** AND FEE WAIVER**
<S> <C> <C>
- ------------------------------
EMERGING GROWTH+
Portfolio A (For the period
ended 09/30/97)#.......... (1.42%)* (1.38%)*
Portfolio A (For the year
ended 03/31/97)........... (1.26%) (1.26%)
Portfolio A (For the year
ended 03/31/96)........... (1.20%) (1.20%)
Portfolio A (For the year
ended 03/31/95)........... (1.27%) (1.25%)
Portfolio A (For the period
ended 03/31/94)........... (1.44%)* (1.51%)*
CORE GROWTH++
Portfolio A (For the period
ended 09/30/97)#.......... (0.83%)* (0.95%)*
Portfolio A (For the year
ended 03/31/97)........... (1.05%) (1.01%)
Portfolio A (For the year
ended 03/31/96)........... (0.91%) (0.89%)
Portfolio A (For the year
ended 03/31/95)........... (0.66%) (0.70%)
Portfolio A (For the period
ended 03/31/94)........... (0.68%)* (0.82%)*
LARGE CAP GROWTH+++
Portfolio A (For the period
ended 09/30/97)#.......... (0.63%)* (3.92%)*
INCOME & GROWTH++
Portfolio A (For the period
ended 09/30/97)#.......... 2.56%* 2.43%*
Portfolio A (For the year
ended 03/31/97)........... 2.83% 2.66%
Portfolio A (For the year
ended 03/31/96)........... 3.29% 3.12%
Portfolio A (For the year
ended 03/31/95)........... 3.71% 3.55%
Portfolio A (For the period
ended 03/31/94)........... 2.83%* 2.59%*
BALANCED GROWTH++
Portfolio A (For the period
ended 09/30/97)#.......... 1.26%* 0.22%*
Portfolio A (For the year
ended 03/31/97)........... 1.87% 0.73%
Portfolio A (For the year
ended 03/31/96)........... 2.16% 0.88%
Portfolio A (For the year
ended 03/31/95)........... 1.44% 0.26%
Portfolio A (For the period
ended 03/31/94)........... 1.30%* (0.39%)*
GOVERNMENT INCOME++
Portfolio A (For the period
ended 09/30/97)#.......... 5.89%* 0.61%*
Portfolio A (For the year
ended 03/31/97)........... 5.52% 0.22%
Portfolio A (For the year
ended 03/31/96)........... 5.78% (0.75%)
Portfolio A (For the year
ended 03/31/95)........... 5.18% (2.12%)
Portfolio A (For the period
ended 03/31/94)........... 3.07%* (16.11%)*
MONEY MARKET FUND++
Portfolio A (For the period
ended 09/30/97)#.......... 5.15%* 4.42%*
Portfolio A (For the year
ended 03/31/97)........... 4.97% 4.12%
Portfolio A (For the year
ended 03/31/96)........... 5.35% 2.77%
Portfolio A (For the year
ended 03/31/95)........... 4.60% 2.42%
Portfolio A (For the period
ended 03/31/94)........... 1.85%* (320.85%)*
EMERGING COUNTRIES++++
Portfolio A (For the period
ended 09/30/97)#.......... (0.05%)* (0.12%)*
Portfolio A (For the year
ended 03/31/97)........... (1.14%) (2.00%)
Portfolio A (For the year
ended 03/31/96)........... (0.35%) (3.61%)
Portfolio A (For the period
ended 03/31/95)........... 1.09%* (4.99%)*
INTERNATIONAL SMALL CAP+++++
Portfolio A (For the period
ended 09/30/97)#.......... (0.81%)* (1.70%)*
Portfolio A (For the year
ended 03/31/97)........... (1.05%) (2.82%)
Portfolio A (For the year
ended 03/31/96)........... (0.27%) (7.75%)
Portfolio A (For the period
ended 03/31/95)........... (0.07%)* (7.89%)*
INTERNATIONAL CORE
GROWTH++++++
Portfolio A (For the period
ended 09/30/97)#.......... (0.41%)* (3.39%)*
Portfolio A (For the period
ended 03/31/97)........... 0.00%* (4,576.87%)*
WORLDWIDE GROWTH++
Portfolio A (For the period
ended 09/30/97)#.......... (0.35%)* (0.60%)*
Portfolio A (For the year
ended 03/31/97)........... (0.93%) (1.18%)
Portfolio A (For the year
ended 03/31/96)........... (0.35%) (0.61%)
Portfolio A (For the year
ended 03/31/95)........... (0.42%) (0.75%)
Portfolio A (For the period
ended 03/31/94)........... (0.69%)* (1.07%)*
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
59
<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 period
ended 09/30/97)#.......... $ 15.51 $ (0.11) $ 7.14 -- --
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 period
ended 09/30/97)#.......... 16.33 (0.11) 4.97 -- --
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 -- --
LARGE CAP GROWTH++
Portfolio B (For the period
ended 09/30/97)#.......... 12.50 (0.02) 0.90 -- --
INCOME & GROWTH+
Portfolio B (For the period
ended 09/30/97)#.......... 16.60 0.32 3.17 $ (0.17) --
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 period
ended 09/30/97)#.......... 14.88 0.10 4.20 (0.05) --
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 period
ended 09/30/97)#.......... 12.13 0.64 0.25 (0.33) --
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 period
ended 09/30/97)#.......... 17.29 (0.01) 3.23 -- --
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+
Portfolio B (For the period
ended 09/30/97)#.......... 15.89 (0.06) 3.31 -- --
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 09/30/97)#.......... 12.68 (0.04) 3.44 -- --
Portfolio B (For the period
ended 03/31/97)........... 12.50 -- 0.18 -- --
WORLDWIDE GROWTH+
Portfolio B (For the period
ended 09/30/97)#.......... 16.02 (0.05) 4.19 -- --
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.
++ Commenced operations on July 21, 1997.
+++ Commenced operations on February 28, 1997.
* Annualized.
** Includes expenses allocated from the Master Trust Funds. See Notes to Funds'
Financial Statements for amounts.
# Unaudited
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
60
<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 period
ended 09/30/97)#.......... $ 22.54 45.33% $49,917,406 2.60%* 2.58%* (2.09%)*
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 period
ended 09/30/97)#.......... 21.19 29.76% 41,016,890 2.24%* 2.28%* (1.48%)*
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%)*
LARGE CAP GROWTH++
Portfolio B (For the period
ended 09/30/97)#.......... 13.38 37.51% 1,134,885 2.24%* 5.09%* (1.25%)*
INCOME & GROWTH+
Portfolio B (For the period
ended 09/30/97)#.......... 19.92 21.06% 21,147,078 2.24%* 2.75%* 1.96%*
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 period
ended 09/30/97)#.......... 19.13 28.96% 3,062,338 2.26%* 4.63%* 0.63%*
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 period
ended 09/30/97)#.......... 12.69 7.39% 1,392,963 1.31%* 4.36%* 5.32%*
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 period
ended 09/30/97)#.......... 20.51 18.62% 41,847,085 2.91%* 3.18%* (0.71%)*
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+
Portfolio B (For the period
ended 09/30/97)#.......... 19.14 20.45% 8,779,872 2.61%* 3.56%* (1.48%)*
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 09/30/97)#.......... 16.08 26.22% 4,986,872 2.61%* 6.85%* (1.08%)*
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 period
ended 09/30/97)#.......... 20.16 25.84% 9,159,667 2.51%* 3.70%* (1.03%)*
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 period
ended 09/30/97)#.......... (1.98%)*
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 period
ended 09/30/97)#.......... (1.53%)*
Portfolio B (For the year
ended 03/31/97)........... (2.10%)
Portfolio B (For the period
ended 03/31/96)........... (2.77%)*
LARGE CAP GROWTH++
Portfolio B (For the period
ended 09/30/97)#.......... (4.10%)*
INCOME & GROWTH+
Portfolio B (For the period
ended 09/30/97)#.......... 1.45%*
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 period
ended 09/30/97)#.......... (1.75%)*
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 period
ended 09/30/97)#.......... 2.27%*
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 period
ended 09/30/97)#.......... (0.98%)*
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+
Portfolio B (For the period
ended 09/30/97)#.......... (2.42%)*
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 09/30/97)#.......... (5.33%)*
Portfolio B (For the period
ended 03/31/97)........... (15,998.21%)*
WORLDWIDE GROWTH+
Portfolio B (For the period
ended 09/30/97)#.......... (2.22%)*
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.
- --------------------------------------------------------------------------------
61
<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 period
ended 09/30/97)#.......... $ 14.69 $ (0.17) $ 6.83 -- --
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 period
ended 09/30/97)#.......... 16.48 (0.13) 5.03 -- --
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)
LARGE CAP GROWTH+++
Portfolio C (For the period
ended 09/30/97)#.......... 12.50 0.00 0.90 -- --
INCOME & GROWTH++
Portfolio C (For the period
ended 09/30/97)#.......... 17.05 0.36 3.19 $ (0.18) --
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 period
ended 09/30/97)#.......... 15.59 0.11 4.34 (0.06) --
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 period
ended 09/30/97)#.......... 12.29 0.67 0.22 (0.33) --
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 period
ended 09/30/97)#.......... 16.81 (0.08) 3.22 -- --
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+++++
Portfolio C (For the period
ended 09/30/97)#.......... 14.87 (0.13) 3.15 -- --
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 C (For the period
ended 09/30/97)#.......... 12.68 (0.75) 4.06 -- --
Portfolio C (For the period
ended 03/31/97)........... 12.50 -- 0.18 -- --
WORLDWIDE GROWTH++
Portfolio C (For the period
ended 09/30/97)#.......... 16.92 (0.10) 4.43 -- --
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>
- --------------------
+ Commenced operations on December 27, 1993.
++ Commenced operations on April 19, 1993.
+++ Commenced operations on July 21, 1997.
++++ Commenced operations on November 28, 1994.
+++++ Commenced operations on August 31, 1994.
++++++ Commenced operations on February 28, 1997.
* Annualized.
** Includes expenses allocated from the Master Trust Funds. See Notes to
Funds' Financial Statements for amounts.
# Unaudited
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
62
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIO OF RATIO OF
EXPENSES TO EXPENSES TO
AVERAGE NET AVERAGE NET
NET ASSETS ASSETS, AFTER ASSETS, BEFORE
NET ASSET AT EXPENSE EXPENSE
VALUES AT TOTAL END OF REIMBURSEMENT REIMBURSEMENT
END OF PERIOD RETURN PERIOD AND FEE WAIVER** AND FEE WAIVER**
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
EMERGING GROWTH+
Portfolio C (For the period
ended 09/30/97)#.......... $ 21.35 45.34% 2$49,108,291 2.58%* 2.56%*
Portfolio C (For the year
ended 03/31/97)........... 14.69 (6.81%) 182,906,982 2.35% 2.35%
Portfolio C (For the year
ended 03/31/96)........... 17.62 37.18% 207,332,005 2.35% 2.35%
Portfolio C (For the year
ended 03/31/95)........... 12.96 7.37% 157,292,246 2.44% 2.44%
Portfolio C (For the period
ended 03/31/94)........... 12.07 (3.44%) 142,874,310 2.34%* 2.34%*
CORE GROWTH++
Portfolio C (For the period
ended 09/30/97)#.......... 21.38 29.73% 183,697,420 2.26%* 2.35%*
Portfolio C (For the year
ended 03/31/97)........... 16.48 0.56% 157,501,096 2.14% 2.17%
Portfolio C (For the year
ended 03/31/96)........... 18.06 34.28% 177,461,331 2.14% 2.14%
Portfolio C (For the year
ended 03/31/95)........... 13.45 2.05% 143,389,656 2.24% 2.24%
Portfolio C (For the period
ended 03/31/94)........... 13.18 5.54% 141,488,561 2.17%* 2.17%*
LARGE CAP GROWTH+++
Portfolio C (For the period
ended 09/30/97)#.......... 13.40 37.72% 160,692 2.24%* 6.26%*
INCOME & GROWTH++
Portfolio C (For the period
ended 09/30/97)#.......... 20.42 20.87% 73,058,960 2.24%* 2.32%*
Portfolio C (For the year
ended 03/31/97)........... 17.05 12.91% 62,143,307 2.25% 2.29%
Portfolio C (For the year
ended 03/31/96)........... 15.89 25.24% 58,997,309 2.25% 2.28%
Portfolio C (For the year
ended 03/31/95)........... 13.03 (3.26%) 61,791,573 2.25% 2.29%
Portfolio C (For the period
ended 03/31/94)........... 14.28 18.76% 69,264,807 2.22%* 2.23%*
BALANCED GROWTH++
Portfolio C (For the period
ended 09/30/97)#.......... 19.98 28.55% 20,258,853 2.26%* 2.77%*
Portfolio C (For the year
ended 03/31/97)........... 15.59 6.05% 16,990,094 2.25% 2.83%
Portfolio C (For the year
ended 03/31/96)........... 16.20 19.58% 16,586,339 2.25% 3.01%
Portfolio C (For the year
ended 03/31/95)........... 13.76 2.47% 16,469,510 2.25% 2.60%
Portfolio C (For the period
ended 03/31/94)........... 13.54 8.91% 16,248,130 2.24%* 2.73%*
GOVERNMENT INCOME++
Portfolio C (For the period
ended 09/30/97)#.......... 12.85 7.35% 3,615,549 1.31%* 3.93%*
Portfolio C (For the year
ended 03/31/97)........... 12.29 2.29% 3,694,341 1.30% 4.98%
Portfolio C (For the year
ended 03/31/96)........... 12.63 9.20% 2,968,287 1.33% 5.77%
Portfolio C (For the year
ended 03/31/95)........... 12.27 2.96% 4,278,140 1.50% 2.67%
Portfolio C (For the period
ended 03/31/94)........... 12.56 4.28% 7,345,300 1.50%* 3.86%*
EMERGING COUNTRIES++++
Portfolio C (For the period
ended 09/30/97)#.......... 19.95 18.68% 47,051,116 2.91%* 2.99%*
Portfolio C (For the year
ended 03/31/97)........... 16.81 23.94% 29,375,971 2.90% 3.12%
Portfolio C (For the year
ended 03/31/96)........... 13.71 27.30% 4,344,744 2.90% 6.23%
Portfolio C (For the period
ended 03/31/95)........... 10.79 (13.64%) 59,366 2.90%* 242.59%**
INTERNATIONAL SMALL CAP+++++
Portfolio C (For the period
ended 09/30/97)#.......... 17.89 20.31% 5,135,388 2.61%* 3.29%*
Portfolio C (For the year
ended 03/31/97)........... 14.87 13.98% 3,592,314 2.60% 3.95%
Portfolio C (For the year
ended 03/31/96)........... 13.05 15.30% 933,422 2.60% 16.15%
Portfolio C (For the period
ended 03/31/95)........... 11.32 (9.25%) 24,066 2.61%* 75.37%*
INTERNATIONAL CORE
GROWTH++++++
Portfolio C (For the period
ended 09/30/97)#.......... 15.99 26.10% 1,128,037 2.61%* 8.63%*
Portfolio C (For the period
ended 03/31/97)........... 12.68 1.44% 43,075 2.41%* 25.55%*
WORLDWIDE GROWTH++
Portfolio C (For the period
ended 09/30/97)#.......... 21.25 25.59% 86,108,629 2.51%* 2.67%*
Portfolio C (For the year
ended 03/31/97)........... 16.92 11.81% 70,344,561 2.50% 2.61%
Portfolio C (For the year
ended 03/31/96)........... 16.76 18.95% 71,155,027 2.50% 2.57%
Portfolio C (For the year
ended 03/31/95)........... 14.44 (1.49%) 71,200,715 2.50% 2.57%
Portfolio C (For the period
ended 03/31/94)........... 14.86 18.88% 66,576,743 2.44%* 2.44%*
<CAPTION>
RATIO OF NET
INCOME (DEFICIT) TO TO
AVERAGE NET AVERAGE NET
ASSETS, AFTER ASSETS, BEFORE
EXPENSE EXPENSE
REIMBURSEMENT REIMBURSEMENT
AND FEE WAIVER** AND FEE WAIVER**
<S> <C> <C>
- ------------------------------
EMERGING GROWTH+
Portfolio C (For the period
ended 09/30/97)#.......... (2.05%)* (2.03%)*
Portfolio C (For the year
ended 03/31/97)........... (1.89%) (1.89%)
Portfolio C (For the year
ended 03/31/96)........... (1.81%) (1.81%)
Portfolio C (For the year
ended 03/31/95)........... (1.85%) (1.85%)
Portfolio C (For the period
ended 03/31/94)........... (2.04%)* (2.04%)*
CORE GROWTH++
Portfolio C (For the period
ended 09/30/97)#.......... (1.49%)* (1.58%)*
Portfolio C (For the year
ended 03/31/97)........... (1.59%) (1.62%)
Portfolio C (For the year
ended 03/31/96)........... (1.47%) (1.47%)
Portfolio C (For the year
ended 03/31/95)........... (1.30%) (1.30%)
Portfolio C (For the period
ended 03/31/94)........... (1.30%)* (1.30%)*
LARGE CAP GROWTH+++
Portfolio C (For the period
ended 09/30/97)#.......... (1.27%)* (5.29%)*
INCOME & GROWTH++
Portfolio C (For the period
ended 09/30/97)#.......... 1.92%* 1.83%*
Portfolio C (For the year
ended 03/31/97)........... 2.18% 2.11%
Portfolio C (For the year
ended 03/31/96)........... 2.64% 2.61%
Portfolio C (For the year
ended 03/31/95)........... 3.05% 3.01%
Portfolio C (For the period
ended 03/31/94)........... 2.28%* 2.27%*
BALANCED GROWTH++
Portfolio C (For the period
ended 09/30/97)#.......... 0.61%* 0.10%*
Portfolio C (For the year
ended 03/31/97)........... 1.23% 0.91%
Portfolio C (For the year
ended 03/31/96)........... 1.53% 1.19%
Portfolio C (For the year
ended 03/31/95)........... 0.83% 0.48%
Portfolio C (For the period
ended 03/31/94)........... 0.61%* 0.12%*
GOVERNMENT INCOME++
Portfolio C (For the period
ended 09/30/97)#.......... 5.33%* 2.72%*
Portfolio C (For the year
ended 03/31/97)........... 5.10% 2.89%
Portfolio C (For the year
ended 03/31/96)........... 5.46% 3.13%
Portfolio C (For the year
ended 03/31/95)........... 4.58% 3.41%
Portfolio C (For the period
ended 03/31/94)........... 2.70%* 0.34%*
EMERGING COUNTRIES++++
Portfolio C (For the period
ended 09/30/97)#.......... (0.70%)* (0.78%)*
Portfolio C (For the year
ended 03/31/97)........... (1.75%) (1.99%)
Portfolio C (For the year
ended 03/31/96)........... (1.06%) (4.15%)
Portfolio C (For the period
ended 03/31/95)........... (0.04%)** (239.73%)*
INTERNATIONAL SMALL CAP+++++
Portfolio C (For the period
ended 09/30/97)#.......... (1.46%)* (2.15%)*
Portfolio C (For the year
ended 03/31/97)........... (1.67%) (2.99%)
Portfolio C (For the year
ended 03/31/96)........... (1.02%) (13.95%)
Portfolio C (For the period
ended 03/31/95)........... (0.76%)* (73.52%)*
INTERNATIONAL CORE
GROWTH++++++
Portfolio C (For the period
ended 09/30/97)#.......... (1.03%)* (7.05%)*
Portfolio C (For the period
ended 03/31/97)........... (0.07%)* (291.20%)*
WORLDWIDE GROWTH++
Portfolio C (For the period
ended 09/30/97)#.......... (1.01%)* (1.17%)*
Portfolio C (For the year
ended 03/31/97)........... (1.57%) (1.62%)
Portfolio C (For the year
ended 03/31/96)........... (0.99%) (1.00%)
Portfolio C (For the year
ended 03/31/95)........... (1.06%) (1.13%)
Portfolio C (For the period
ended 03/31/94)........... (1.24%)* (1.24%)*
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
63
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
STATEMENTS OF ASSETS AND LIABILITIES AS OF SEPTEMBER 30, 1997 (UNAUDITED)
- -------------------------------------------------------------------------------
SERIES A PORTFOLIOS
<TABLE>
<CAPTION>
EMERGING CORE LARGE CAP INCOME &
GROWTH GROWTH GROWTH GROWTH
<S> <C> <C> <C> <C>
--------------------------------------------------------
ASSETS
Investments in Master Trust Fund, at
value*.............................. $ 211,185,824 $ 94,907,956 $ 331,451 $ 39,120,345
Receivable for shares of beneficial
interest sold....................... 322,880 153,157 4,742 28,333
Receivable for investments sold in
Master Trust Fund................... 137,930 159,659 -- 135,099
Due from advisor...................... -- 8,080 400 --
Deferred organization costs........... 2,790 4,566 -- 3,933
Prepaid expenses and other assets..... 1,911 1,126 -- 468
--------------------------------------------------------
Total assets........................ 211,651,335 95,234,544 336,593 39,288,178
--------------------------------------------------------
LIABILITIES
Payable for investments purchased in
Master Trust Fund................... 322,880 153,157 4,742 28,333
Payable for shares of beneficial
interest repurchased................ 137,930 159,659 -- 135,099
Due to advisor........................ 49,915 20,774 -- 4,750
Dividend payable...................... -- -- -- 219,408
Accrued expenses...................... 123,317 106,691 652 20,424
Organizational Cost Payable........... -- -- -- --
--------------------------------------------------------
Total liabilities................... 634,042 440,281 5,394 408,014
--------------------------------------------------------
NET ASSETS.............................. $ 211,017,293 $ 94,794,263 $ 331,199 $ 38,880,164
--------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital....................... $ 131,947,447 $ 60,081,454 $ 322,957 $ 27,475,417
Accumulated undistributed net
investment income (deficit)......... (6,161,582) (2,652,554) (248) (2,468)
Accumulated undistributed net realized
gain (loss) on security
transactions........................ 18,908,961 19,676,625 410 3,871,238
Accumulated undistributed foreign
exchange gain (loss)................ -- -- -- --
Net unrealized foreign exchange gain
(loss).............................. -- -- -- --
Net unrealized appreciation
(depreciation) on investments....... 66,322,467 17,688,738 8,080 7,535,977
--------------------------------------------------------
Net assets.......................... $ 211,017,293 $ 94,794,263 $ 331,199 $ 38,880,164
--------------------------------------------------------
Shares of beneficial interest, no par
value, issued and outstanding
(unlimited shares authorized)....... 9,556,773 4,335,657 24,698 1,957,351
--------------------------------------------------------
COMPUTATION OF
Net asset value per share of
beneficial interest (Net assets/
Outstanding shares of beneficial
interest)........................... $ 22.08 $ 21.86 $ 13.41 $ 19.86
--------------------------------------------------------
MAXIMUM OFFERING PRICE PER SHARE OF
($22.08/94.75%, $21.86/94.75%,
$13.41/94.75%, $19.86/94.75%,
$19.92/94.75%, $12.73/95.25%, $1.00,
$21.27/94.75%, $18.00/94.75%,
$16.11/94.75%, $20.45/94.75%,
respectively)....................... $ 23.30 $ 23.07 $ 14.15 $ 20.96
--------------------------------------------------------
* Cost of investments in the Master
Trust Fund............................ $ 112,652,333 $ 49,454,446 $ 322,954 $ 19,543,457
--------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
64
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL
BALANCED GOVERNMENT EMERGING SMALL CAP INTERNATIONAL
GROWTH INCOME MONEY MARKET COUNTRIES GROWTH CORE GROWTH
<S> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
ASSETS
Investments in Master Trust Fund, at
value*.............................. $ 6,249,850 $ 1,085,306 $ 39,923,940 $ 61,686,337 $ 11,218,277 $3,039,437
Receivable for shares of beneficial
interest sold....................... -- -- -- 403,588 63,720 52,121
Receivable for investments sold in
Master Trust Fund................... 2,000 -- -- 51,387 -- 1,680
Due from advisor...................... 3,147 4,023 64,831 79,819 7,439 2,226
Deferred organization costs........... 3,547 3,402 2,773 3,600 -- --
Prepaid expenses and other assets..... 70 13 (2,257) 753 114 6
---------------------------------------------------------------------------------------
Total assets........................ 6,258,614 1,092,744 39,989,287 62,225,484 11,289,550 3,095,470
---------------------------------------------------------------------------------------
LIABILITIES
Payable for investments purchased in
Master Trust Fund................... -- -- -- 403,588 63,720 52,121
Payable for shares of beneficial
interest repurchased................ 2,000 -- -- 51,387 -- 1,680
Due to advisor........................ -- -- -- -- -- --
Dividend payable...................... 15,299 4,303 404,536 -- -- --
Accrued expenses...................... 21,642 49,940 81,020 60,473 13,756 21,240
Organizational Cost Payable........... -- -- -- -- -- --
---------------------------------------------------------------------------------------
Total liabilities................... 38,941 54,243 485,556 515,448 77,476 75,041
---------------------------------------------------------------------------------------
NET ASSETS.............................. $ 6,219,673 $ 1,038,501 $ 39,503,731 $ 61,710,036 $ 11,212,074 $3,020,429
---------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital....................... $ 4,141,667 $ 1,042,411 $ 39,503,352 $ 49,530,594 $ 9,112,727 $2,743,941
Accumulated undistributed net
investment income (deficit)......... (63) (71) -- (210,124) (74,216) (2,873)
Accumulated undistributed net realized
gain (loss) on security
transactions........................ 485,939 (17,987) 379 4,543,380 789,570 27,521
Accumulated undistributed foreign
exchange gain (loss)................ 24,192 1,306 -- (181,815) (50,400) (4,535)
Net unrealized foreign exchange gain
(loss).............................. (16,806) (3,310) -- (3,786) (611) (103)
Net unrealized appreciation
(depreciation) on investments....... 1,584,744 16,152 -- 8,031,787 1,435,004 256,478
---------------------------------------------------------------------------------------
Net assets.......................... $ 6,219,673 $ 1,038,501 $ 39,503,731 $ 61,710,036 $ 11,212,074 $3,020,429
---------------------------------------------------------------------------------------
Shares of beneficial interest, no par
value, issued and outstanding
(unlimited shares authorized)....... 312,212 81,575 39,503,352 3,017,128 622,924 187,435
---------------------------------------------------------------------------------------
COMPUTATION OF
Net asset value per share of
beneficial interest (Net assets/
Outstanding shares of beneficial
interest)........................... $ 19.92 $ 12.73 $ 1.00 $ 20.45 $ 18.00 $ 16.11
---------------------------------------------------------------------------------------
MAXIMUM OFFERING PRICE PER SHARE OF
($22.08/94.75%, $21.86/94.75%,
$13.41/94.75%, $19.86/94.75%,
$19.92/94.75%, $12.73/95.25%, $1.00,
$21.27/94.75%, $18.00/94.75%,
$16.11/94.75%, $20.45/94.75%,
respectively)....................... $ 21.02 $ 13.36 $ 1.00 $ 21.58 $ 19.00 $ 17.00
---------------------------------------------------------------------------------------
* Cost of investments in the Master
Trust Fund............................ $ 3,112,001 $ 802,074 $ 39,477,083 $ 48,893,145 $ 9,030,827 $2,758,694
---------------------------------------------------------------------------------------
<CAPTION>
WORLDWIDE
GROWTH
<S> <C>
ASSETS
Investments in Master Trust Fund, at
value*.............................. $ 33,350,903
Receivable for shares of beneficial
interest sold....................... 67,657
Receivable for investments sold in
Master Trust Fund................... 281,468
Due from advisor...................... 490
Deferred organization costs........... 3,707
Prepaid expenses and other assets..... 374
Total assets........................ 33,704,599
LIABILITIES
Payable for investments purchased in
Master Trust Fund................... 67,657
Payable for shares of beneficial
interest repurchased................ 281,468
Due to advisor........................ --
Dividend payable...................... --
Accrued expenses...................... 17,998
Organizational Cost Payable........... --
Total liabilities................... 367,123
NET ASSETS.............................. $ 33,337,476
COMPOSITION OF NET ASSETS
Paid-in capital....................... $ 21,933,008
Accumulated undistributed net
investment income (deficit)......... (727,726)
Accumulated undistributed net realized
gain (loss) on security
transactions........................ 5,192,579
Accumulated undistributed foreign
exchange gain (loss)................ (94,168)
Net unrealized foreign exchange gain
(loss).............................. (2,087)
Net unrealized appreciation
(depreciation) on investments....... 7,035,870
Net assets.......................... $ 33,337,476
Shares of beneficial interest, no par
value, issued and outstanding
(unlimited shares authorized)....... 1,567,156
COMPUTATION OF
Net asset value per share of
beneficial interest (Net assets/
Outstanding shares of beneficial
interest)........................... $ 21.27
MAXIMUM OFFERING PRICE PER SHARE OF
($22.08/94.75%, $21.86/94.75%,
$13.41/94.75%, $19.86/94.75%,
$19.92/94.75%, $12.73/95.25%, $1.00,
$21.27/94.75%, $18.00/94.75%,
$16.11/94.75%, $20.45/94.75%,
respectively)....................... $ 22.45
* Cost of investments in the Master
Trust Fund............................ $ 17,484,327
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
65
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
STATEMENTS OF ASSETS AND LIABILITIES AS OF SEPTEMBER 30, 1997 (UNAUDITED)
- -------------------------------------------------------------------------------
SERIES B PORTFOLIOS
<TABLE>
<CAPTION>
EMERGING CORE LARGE CAP INCOME &
GROWTH GROWTH GROWTH GROWTH
<S> <C> <C> <C> <C>
--------------------------------------------------------
ASSETS
Investments in Master Trust Fund, at
value*.............................. $ 50,004,886 $ 41,108,450 $1,136,555 $ 21,431,945
Receivable for shares of beneficial
interest sold....................... 236,306 138,011 76,000 401,581
Receivable for investments sold in
Master Trust Fund................... 15,826 35,602 -- 10,281
Due from advisor...................... -- 928 826 2,860
Deferred organization costs........... 520 519 -- 519
Prepaid expenses and other assets..... 497 484 -- 215
--------------------------------------------------------
Total assets........................ 50,258,035 41,283,994 1,213,381 21,847,401
--------------------------------------------------------
LIABILITIES
Payable for investments purchased in
Master Trust Fund................... 236,307 138,011 76,000 401,581
Payable for shares of beneficial
interest repurchased................ 15,826 35,602 -- 10,281
Due to advisor........................ 17,380 9,157 -- 640
Dividend payable...................... -- -- -- 79,625
Accrued expenses...................... 71,116 84,334 2,496 208,196
--------------------------------------------------------
Total liabilities................... 340,629 267,104 78,496 700,323
--------------------------------------------------------
NET ASSETS.............................. $ 49,917,406 $ 41,016,890 $1,134,885 $ 21,147,078
--------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital....................... $ 37,663,921 $ 32,429,415 $1,099,350 $ 17,531,636
Accumulated undistributed net
investment income (deficit)......... (1,010,222) (701,990) (1,646) (839)
Accumulated undistributed net realized
gain (loss) on security
transactions........................ (793,762) 2,076,510 5,142 739,694
Accumulated undistributed foreign
exchange gain (loss)................ -- -- -- --
Net unrealized foreign exchange gain
(loss).............................. -- -- -- --
Net unrealized appreciation
(depreciation) on investments....... 14,057,469 7,212,955 32,039 2,876,587
--------------------------------------------------------
Net assets.......................... $ 49,917,406 $ 41,016,890 $1,134,885 $ 21,147,078
--------------------------------------------------------
Shares of beneficial interest, no par
value, issued and outstanding
(unlimited shares authorized)....... 2,214,503 1,935,696 84,839 1,061,661
--------------------------------------------------------
COMPUTATION OF
Net asset value per share of
beneficial interest (Net assets/
Outstanding shares of beneficial
interest)........................... $ 22.54 $ 21.19 $ 13.38 $ 19.92
--------------------------------------------------------
* Cost of investments in the Master
Trust Fund............................ $ 37,035,229 $ 31,924,479 $1,099,327 $ 17,275,832
--------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
66
<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*.............................. $ 3,111,481 $ 1,411,230 $ 41,944,395 $ 8,825,156 $5,044,031 $ 9,226,693
Receivable for shares of beneficial
interest sold....................... -- -- 302,538 10,000 42,060 99,919
Receivable for investments sold in
Master Trust Fund................... -- -- 2,038 -- -- 10,308
Due from advisor...................... 1,951 3,394 -- 2,180 2,193 2,753
Deferred organization costs........... 519 519 530 518 -- 519
Prepaid expenses and other assets..... 28 19 453 95 12 100
----------------------------------------------------------------------------------------
Total assets........................ 3,113,979 1,415,162 42,249,954 8,837,949 5,088,296 9,340,292
----------------------------------------------------------------------------------------
LIABILITIES
Payable for investments purchased in
Master Trust Fund................... -- -- 302,538 10,000 42,060 99,919
Payable for shares of beneficial
interest repurchased................ -- -- 2,038 -- -- 10,308
Due to advisor........................ -- -- -- -- -- --
Dividend payable...................... 2,562 5,157 -- -- -- --
Accrued expenses...................... 49,079 17,042 98,293 48,077 59,364 70,398
----------------------------------------------------------------------------------------
Total liabilities................... 51,641 22,199 402,869 58,077 101,424 180,625
----------------------------------------------------------------------------------------
NET ASSETS.............................. $ 3,062,338 $ 1,392,963 $ 41,847,085 $ 8,779,872 $4,986,872 $ 9,159,667
----------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital....................... $ 2,390,125 $ 1,354,911 $ 34,178,359 $ 7,012,415 $4,573,216 $ 7,062,159
Accumulated undistributed net
investment income (deficit)......... 62 (30) (332,463) (107,960) (11,899) (106,369)
Accumulated undistributed net realized
gain (loss) on security
transactions........................ 64,494 20,870 3,067,929 754,166 34,321 695,706
Accumulated undistributed foreign
exchange gain (loss)................ 11,188 1,479 (116,815) (44,577) (8,294) (28,555)
Net unrealized foreign exchange gain
(loss).............................. (8,079) (3,822) (2,536) (371) (192) (554)
Net unrealized appreciation
(depreciation) on investments....... 604,548 19,555 5,052,611 1,165,599 399,720 1,537,280
----------------------------------------------------------------------------------------
Net assets.......................... $ 3,062,338 $ 1,392,963 $ 41,847,085 $ 8,779,272 $4,986,872 $ 9,159,667
----------------------------------------------------------------------------------------
Shares of beneficial interest, no par
value, issued and outstanding
(unlimited shares authorized)....... 160,105 109,745 2,040,239 458,712 310,098 454,330
----------------------------------------------------------------------------------------
COMPUTATION OF
Net asset value per share of
beneficial interest (Net assets/
Outstanding shares of beneficial
interest)........................... $ 19.13 $ 12.69 $ 20.51 $ 19.14 $ 16.08 $ 20.16
----------------------------------------------------------------------------------------
* Cost of investments in the Master
Trust Fund............................ $ 2,361,191 $ 1,268,843 $ 33,825,816 $ 6,967,678 $4,616,527 $ 7,024,510
----------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
67
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
STATEMENTS OF ASSETS AND LIABILITIES AS OF SEPTEMBER 30, 1997 (UNAUDITED)
- -------------------------------------------------------------------------------
SERIES C PORTFOLIOS
<TABLE>
<CAPTION>
EMERGING CORE LARGE CAP INCOME &
GROWTH GROWTH GROWTH GROWTH
<S> <C> <C> <C> <C>
-------------------------------------------------------------
ASSETS
Investments in Master Trust Fund, at
value*.............................. $ 249,378,237 $ 184,016,672 $ 160,922 $ 73,465,852
Receivable for shares of beneficial
interest sold....................... 181,207 9,879 13,114 120,076
Receivable for investments sold in
Master Trust Fund................... 568,380 172,173 -- 16,966
Due from advisor...................... -- -- 298 1,472
Deferred organization costs........... 2,789 5,221 -- 3,968
Expense Payment Reserve Account....... -- -- -- --
Prepaid expenses and other assets..... 2,765 2,360 -- 926
-------------------------------------------------------------
Total assets........................ 250,133,378 184,206,305 174,334 73,609,260
-------------------------------------------------------------
LIABILITIES
Payable for investments purchased in
Master Trust Fund................... 181,207 9,879 13,114 120,076
Payable for shares of beneficial
interest repurchased................ 568,380 172,173 -- 16,966
Due to advisor........................ 19,817 43,321 -- 3,852
Dividend payable...................... -- -- -- 297,111
Other payable......................... -- -- -- --
Accrued expenses...................... 255,683 283,512 528 112,295
-------------------------------------------------------------
Total liabilities................... 1,025,087 508,885 13,642 550,300
-------------------------------------------------------------
NET ASSETS.............................. $ 249,108,291 $ 183,697,420 $ 160,692 $ 73,058,960
-------------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital....................... $ 150,318,332 $ 112,587,385 $ 155,680 $ 51,026,395
Accumulated undistributed net
investment income (deficit)......... (12,992,301) (9,521,040) (229) (4,089)
Accumulated undistributed net realized
gain (loss) on security
transactions........................ 25,827,155 44,528,030 722 7,501,280
Accumulated undistributed foreign
exchange gain (loss)................ -- -- -- --
Net unrealized foreign exchange gain
(loss).............................. -- -- -- --
Net unrealized appreciation
(depreciation) on investments....... 85,955,105 36,103,045 4,519 14,535,374
-------------------------------------------------------------
Net assets.......................... $ 249,108,291 $ 183,697,420 $ 160,692 $ 73,058,960
-------------------------------------------------------------
Shares of beneficial interest, no par
value, issued and outstanding
(unlimited shares authorized)....... 11,670,529 8,593,297 11,992 3,578,498
-------------------------------------------------------------
COMPUTATION OF
Net asset value per share of
beneficial interest (Net assets/
Outstanding shares of beneficial
interest)........................... $ 21.35 $ 21.38 $ 13.40 $ 20.42
-------------------------------------------------------------
* Cost of investments in the Master
Trust Fund............................ $ 116,949,600 $ 86,891,941 $ 155,676 $ 36,702,529
-------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
68
<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*.............................. $20,301,618 $ 3,674,813 $47,132,744 $5,145,942 $1,131,150 $ 86,204,981
Receivable for shares of beneficial
interest sold....................... 2,112 -- 161,661 1,702 64,015 45,218
Receivable for investments sold in
Master Trust Fund................... 8,631 18,926 1,567 -- -- 73,165
Due from advisor...................... 4,997 7,583 -- 1,997 1,866 --
Deferred organization costs........... 3,616 3,457 1,268 -- -- 4,003
Expense Payment Reserve Account....... -- -- -- -- 8,508 --
Prepaid expenses and other assets..... 257 53 505 62 -- 1,045
-----------------------------------------------------------------------------
Total assets........................ 20,321,231 3,704,832 47,297,745 5,149,703 1,205,539 86,328,412
-----------------------------------------------------------------------------
LIABILITIES
Payable for investments purchased in
Master Trust Fund................... 2,112 -- 161,661 1,702 64,015 45,218
Payable for shares of beneficial
interest repurchased................ 8,631 18,926 1,567 -- -- 73,165
Due to advisor........................ -- -- -- -- -- --
Dividend payable...................... 16,222 13,940 -- -- -- --
Other payable......................... -- -- -- 2,845 -- --
Accrued expenses...................... 35,413 56,417 83,401 9,768 13,487 101,400
-----------------------------------------------------------------------------
Total liabilities................... 62,378 89,283 246,629 14,315 77,502 219,783
-----------------------------------------------------------------------------
NET ASSETS.............................. $20,258,853 $ 3,615,549 $47,051,116 $5,135,388 $1,128,037 $ 86,108,629
-----------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital....................... $13,797,328 $ 3,671,667 $38,248,058 $3,974,142 $1,030,108 $ 55,060,073
Accumulated undistributed net
investment income (deficit)......... 110 23 (397,938) (81,662 ) (2,534 ) (3,459,114)
Accumulated undistributed net realized
gain (loss) on security
transactions........................ 1,419,290 (104,389) 3,654,529 518,863 11,962 14,854,771
Accumulated undistributed foreign
exchange gain (loss)................ 80,193 4,666 (136,395) (28,932 ) (1,709 ) 245,172
Net unrealized foreign exchange gain
(loss).............................. (55,053) (11,368) (2,850) (201 ) (2 ) (5,460)
Net unrealized appreciation
(depreciation) on investments....... 5,016,985 54,950 5,685,712 753,178 90,212 19,413,187
-----------------------------------------------------------------------------
Net assets.......................... $20,258,853 $ 3,615,549 $47,051,116 $5,135,388 $1,128,037 $ 86,108,629
-----------------------------------------------------------------------------
Shares of beneficial interest, no par
value, issued and outstanding
(unlimited shares authorized)....... 1,013,894 281,303 2,358,402 287,019 70,561 4,051,311
-----------------------------------------------------------------------------
COMPUTATION OF
Net asset value per share of
beneficial interest (Net assets/
Outstanding shares of beneficial
interest)........................... $ 19.98 $ 12.85 $ 19.95 $ 17.89 $ 15.99 $ 21.25
-----------------------------------------------------------------------------
* Cost of investments in the Master
Trust Fund............................ $10,708,413 $ 2,720,860 $37,712,916 $3,917,792 $1,030,108 $ 41,674,434
-----------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
69
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
STATEMENTS OF OPERATIONS FOR THE PERIOD ENDED SEPTEMBER 30, 1997 (UNAUDITED)
- -------------------------------------------------------------------------------
SERIES A PORTFOLIOS
<TABLE>
<CAPTION>
EMERGING CORE LARGE CAP INCOME &
GROWTH GROWTH GROWTH+ GROWTH
<S> <C> <C> <C> <C>
--------------------------------------------------------
INVESTMENT INCOME
Net investment income (deficit) from
Master Trust Fund................... $ (458,717) $ (50,914) $ 7 $ 571,362
--------------------------------------------------------
EXPENSES
Accounting fees....................... 51,612 27,383 -- 11,619
Administration fees................... 2,507 3,249 244 4,169
Audit & tax fees...................... 11,898 17,241 8 8,081
Co-Administration fees................ 79,004 41,699 39 17,685
Distribution fees..................... 197,509 104,248 97 44,213
Insurance............................. 1,658 955 -- 398
Legal fees............................ 8,738 4,644 4 1,971
Miscellaneous......................... 1,747 929 -- 394
Organization costs.................... 1,073 4,551 -- 3,583
Registration fees..................... 8,438 4,775 3 1,730
Shareholder reporting fees............ 30,582 16,254 13 6,899
Shareholder servicing fees............ 78,788 41,699 39 17,685
Transfer agent fees................... 135,218 74,565 33 25,786
Trustees' fee......................... 637 637 244 637
--------------------------------------------------------
Total expenses...................... 609,409 342,829 724 144,850
Less: Reimbursement to (from)
advisor............................. 49,914 (16,602) (433) (13,815)
Less: Co-Administration fees waived... -- (34,634) (39) (14,629)
Add: Line of credit commitment fee.... 5,930 3,152 3 1,338
--------------------------------------------------------
Net expenses........................ 665,253 294,745 255 117,744
--------------------------------------------------------
Net investment income (deficit)... (1,123,970) (345,659) (248) 453,618
--------------------------------------------------------
NET REALIZED & UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on security
transactions........................ 8,111,155 9,233,953 410 1,576,029
Net realized foreign exchange gain
(loss).............................. -- -- -- --
Net unrealized foreign exchange gain
(loss).............................. -- -- -- --
Change in net unrealized appreciation
(depreciation) of investments and
foreign currency.................... 55,941,715 13,181,178 8,080 4,746,168
--------------------------------------------------------
Net gain (loss) on investments...... 64,052,870 22,415,131 8,490 6,322,197
--------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $ 62,928,900 $ 22,069,472 $ 8,242 $ 6,775,815
--------------------------------------------------------
- -------------
+ Commenced operations on July 21, 1997.
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
70
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL
BALANCED GOVERNMENT EMERGING SMALL CAP INTERNATIONAL
GROWTH INCOME MONEY MARKET COUNTRIES GROWTH CORE GROWTH
<S> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
INVESTMENT INCOME
Net investment income (deficit) from
Master Trust Fund................... $ 53,529 $ 34,824 $ 1,155,251 $ 159,997 $ (8,115) $ 1,381
---------------------------------------------------------------------------------------
EXPENSES
Accounting fees....................... 1,834 372 14,575 17,232 2,645 438
Administration fees................... 3,537 2,703 2,507 4,841 2,116 1,148
Audit & tax fees...................... 7,334 7,213 8,830 8,876 7,485 7,258
Co-Administration fees................ 2,798 562 27,072 26,376 4,072 701
Distribution fees..................... 6,996 1,404 33,648 65,939 10,179 1,752
Insurance............................. 65 14 518 550 82 15
Legal fees............................ 311 63 2,467 2,916 446 73
Miscellaneous......................... 62 15 493 583 89 14
Organization costs.................... 3,221 3,104 2,649 725 -- 725
Registration fees..................... 325 55 5,838 6,009 851 65
Shareholder reporting fees............ 1,088 222 8,633 10,206 1,562 254
Shareholder servicing fees............ 2,798 562 22,432 26,376 4,061 701
Transfer agent fees................... 11,996 9,054 24,289 25,409 26,317 11,741
Trustees' fee......................... 637 637 637 637 637 637
---------------------------------------------------------------------------------------
Total expenses...................... 43,002 25,980 154,588 196,675 60,542 25,522
Less: Reimbursement to (from)
advisor............................. (22,015) (23,732) (133,830) 280 (32,039) (20,616)
Less: Co-Administration fees waived... (2,798) (562) (22,432) (25,513) (4,072) (701)
Add: Line of credit commitment fee.... 211 43 1,674 1,979 303 49
---------------------------------------------------------------------------------------
Net expenses........................ 18,400 1,729 -- 173,421 24,734 4,254
---------------------------------------------------------------------------------------
Net investment income (deficit)... 35,129 33,095 1,155,251 (13,424) (32,849) (2,873)
---------------------------------------------------------------------------------------
NET REALIZED & UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on security
transactions........................ 306,157 14,856 703 2,203,289 667,571 27,508
Net realized foreign exchange gain
(loss).............................. 24,192 1,306 -- (149,484) (37,103) (4,533)
Net unrealized foreign exchange gain
(loss).............................. (16,806) (3,310) -- (1,234) (20) (102)
Change in net unrealized appreciation
(depreciation) of investments and
foreign currency.................... 1,056,577 39,277 -- 6,929,450 1,028,750 256,458
---------------------------------------------------------------------------------------
Net gain (loss) on investments...... 1,370,120 52,129 703 8,982,021 1,659,198 279,331
---------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $ 1,405,249 $ 85,224 $ 1,155,954 $ 8,968,597 $ 1,626,349 $ 276,458
---------------------------------------------------------------------------------------
- -------------
+ Commenced operations on July 21, 1997.
<CAPTION>
WORLDWIDE
GROWTH
<S> <C>
INVESTMENT INCOME
Net investment income (deficit) from
Master Trust Fund................... $ 43,198
EXPENSES
Accounting fees....................... 9,285
Administration fees................... 4,123
Audit & tax fees...................... 7,924
Co-Administration fees................ 14,138
Distribution fees..................... 35,345
Insurance............................. 325
Legal fees............................ 1,575
Miscellaneous......................... 315
Organization costs.................... 3,371
Registration fees..................... 1,378
Shareholder reporting fees............ 5,513
Shareholder servicing fees............ 14,138
Transfer agent fees................... 21,946
Trustees' fee......................... 637
Total expenses...................... 120,013
Less: Reimbursement to (from)
advisor............................. (14,211)
Less: Co-Administration fees waived... (13,906)
Add: Line of credit commitment fee.... 1,069
Net expenses........................ 92,965
Net investment income (deficit)... (49,767)
NET REALIZED & UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on security
transactions........................ 2,794,006
Net realized foreign exchange gain
(loss).............................. (51,919)
Net unrealized foreign exchange gain
(loss).............................. 3,542
Change in net unrealized appreciation
(depreciation) of investments and
foreign currency.................... 4,034,385
Net gain (loss) on investments...... 6,780,014
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $ 6,730,247
- -------------
+ Commenced operations on July 21, 1997.
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
71
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
STATEMENTS OF OPERATIONS FOR THE PERIOD ENDED SEPTEMBER 30, 1997 (UNAUDITED)
- -------------------------------------------------------------------------------
SERIES B PORTFOLIOS
<TABLE>
<CAPTION>
EMERGING CORE LARGE CAP INCOME &
GROWTH GROWTH GROWTH+ GROWTH
<S> <C> <C> <C> <C>
--------------------------------------------------------
INVESTMENT INCOME
Net investment income (deficit) from
Master Trust Fund................... $ (111,362) $ (22,291) $ 47 $ 262,806
--------------------------------------------------------
EXPENSES
Accounting fees....................... 12,069 11,346 -- 5,238
Administration fees................... 2,507 1,348 805 1,871
Audit & tax fees...................... 8,405 1,143 29 7,618
Co-Adminstration fees................. 18,530 17,325 129 8,026
Distribution fees..................... 138,976 129,936 972 60,197
Insurance............................. 386 372 -- 162
Legal fees............................ 2,040 1,922 12 886
Miscellaneous......................... 408 384 2 177
Organization costs.................... 105 106 -- 106
Registration fees..................... 3,969 3,769 11 1,930
Shareholder reporting fees............ 7,140 6,728 44 3,102
Shareholder servicing fees............ 46,199 43,312 324 20,066
Transfer agent fees................... 27,694 22,498 109 38,004
Trustees' fee......................... 637 637 244 637
--------------------------------------------------------
Total expenses...................... 269,065 240,826 2,681 148,020
Less: Reimbursement to (from)
advisor............................. 19,850 6,932 (868) (36,007)
Less: Co-Adminstration fees waived.... (14,668) (14,089) (129) (7,033)
Add: Line of credit commitment fee.... 1,385 1,305 9 602
--------------------------------------------------------
Net expenses........................ 275,632 234,974 1,693 105,582
--------------------------------------------------------
Net investment income (deficit)... (386,994) (257,265) (1,646) 157,224
--------------------------------------------------------
NET REALIZED & UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on security
transactions........................ (276,313) 1,312,744 5,142 446,430
Net realized foreign exchange gain
(loss).............................. -- -- -- --
Net unrealized foreign exchange gain
(loss).............................. -- -- -- --
Change in net unrealized appreciation
(depreciation) of investments and
foreign currency.................... 14,778,320 8,018,431 32,039 2,459,897
--------------------------------------------------------
Net gain (loss) on investments.... 14,502,007 9,331,175 37,181 2,906,327
--------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $ 14,115,013 $ 9,073,910 $ 35,535 $ 3,063,551
--------------------------------------------------------
- -------------
+ Commenced operations on July 21, 1997.
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
72
<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>
----------------------------------------------------------------------------------------
INVESTMENT INCOME
Net investment income (deficit) from
Master Trust Fund................... $ 25,099 $ 39,083 $ 101,224 $ (7,549) $ 1,948 $ 10,348
----------------------------------------------------------------------------------------
EXPENSES
Accounting fees....................... 851 429 10,960 2,260 686 2,435
Administration fees................... 1,640 2,602 3,077 1,805 1,787 1,082
Audit & tax fees...................... 7,132 7,085 8,193 7,283 7,179 7,296
Co-Adminstration fees................. 1,299 648 16,807 3,463 1,102 3,723
Distribution fees..................... 9,739 3,759 126,052 25,975 8,262 27,925
Insurance............................. 29 14 338 72 18 77
Legal fees............................ 144 73 1,853 383 114 412
Miscellaneous......................... 29 15 371 76 23 83
Organization costs.................... 106 106 106 106 106 106
Registration fees..................... 300 202 3,794 727 175 475
Shareholder reporting fees............ 504 255 6,487 1,339 399 1,443
Shareholder servicing fees............ 3,246 1,620 42,017 8,635 2,754 9,308
Transfer agent fees................... 20,149 689 47,447 23,085 37,975 35,866
Trustees' fee......................... 637 637 637 637 636 637
----------------------------------------------------------------------------------------
Total expenses...................... 45,805 18,134 268,139 75,846 61,216 90,868
Less: Reimbursement to (from)
advisor............................. (27,626) (12,949) (33,338) (29,090) (46,344) (38,743)
Less: Co-Adminstration fees waived.... (1,299) (648) (16,312) (3,463) (1,102) (3,723)
Add: Line of credit commitment fee.... 98 49 1,258 260 77 280
----------------------------------------------------------------------------------------
Net expenses........................ 16,978 4,586 219,747 43,553 13,847 48,682
----------------------------------------------------------------------------------------
Net investment income (deficit)... 8,121 34,497 (118,523) (51,102) (11,899) (38,334)
----------------------------------------------------------------------------------------
NET REALIZED & UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on security
transactions........................ 91,787 15,713 1,374,692 624,189 34,312 501,794
Net realized foreign exchange gain
(loss).............................. 11,188 1,479 (96,582) (33,366) (8,291) (13,511)
Net unrealized foreign exchange gain
(loss).............................. (8,079) (3,822) (729) 171 (192) 809
Change in net unrealized appreciation
(depreciation) of investments and
foreign currency.................... 549,970 46,101 4,272,486 753,586 399,707 1,213,817
----------------------------------------------------------------------------------------
Net gain (loss) on investments.... 644,866 59,471 5,549,867 1,344,580 425,536 1,702,909
----------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $ 652,987 $ 93,968 $ 5,431,344 $ 1,293,478 $ 413,637 $ 1,664,575
----------------------------------------------------------------------------------------
- -------------
+ Commenced operations on July 21, 1997.
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
73
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
STATEMENTS OF OPERATIONS FOR THE PERIOD ENDED SEPTEMBER 30, 1997 (UNAUDITED)
- -------------------------------------------------------------------------------
SERIES C PORTFOLIOS
<TABLE>
<CAPTION>
EMERGING CORE LARGE CAP INCOME &
GROWTH GROWTH GROWTH+ GROWTH
<S> <C> <C> <C> <C>
--------------------------------------------------------
INVESTMENT INCOME
Net investment income (deficit) from
Master Trust Fund................... $ (612,160) $ (97,636) $ 5 $ 1,090,087
--------------------------------------------------------
EXPENSES
Accounting fees....................... 69,155 55,459 -- 22,178
Administration fees................... 2,507 6,577 112 7,964
Audit & tax fees...................... 13,044 11,395 4 8,736
Co-Administration fees................ 105,506 84,312 18 33,723
Distribution fees..................... 791,295 632,339 134 252,923
Insurance............................. 2,471 2,030 -- 777
Legal fees............................ 11,719 9,413 2 3,764
Miscellaneous......................... 2,344 1,883 -- 855
Organization costs.................... 1,071 4,513 -- 3,617
Registration fees..................... 11,662 8,239 2 3,297
Shareholder reporting fees............ 41,016 32,947 6 13,173
Shareholder servicing fees............ 263,044 210,780 44 84,307
Transfer agent fees................... 202,384 167,903 15 43,518
Trustees' fee......................... 637 637 244 637
--------------------------------------------------------
Total expenses...................... 1,517,855 1,228,427 581 479,469
Less: Reimbursement to (from)
advisor............................. 19,819 (4,088) (330) (10,396)
Less: Co-Administration fees waived... -- (71,503) (18) (27,891)
Add: Line of credit commitment fee.... 7,954 6,389 1 2,554
--------------------------------------------------------
Net expenses........................ 1,545,628 1,159,225 234 443,736
--------------------------------------------------------
Net investment income (deficit)... (2,157,788) (1,256,861) (229) 646,351
--------------------------------------------------------
NET REALIZED & UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on security
transactions........................ 10,577,850 20,485,012 722 3,081,542
Net realized foreign exchange gain
(loss).............................. -- -- -- --
Net unrealized foreign exchange gain
(loss).............................. -- -- -- --
Change in net unrealized appreciation
(depreciation) of investments and
foreign currency.................... 71,128,982 24,584,971 4,519 8,998,984
--------------------------------------------------------
Net gain on investments........... 81,706,832 45,069,983 5,241 12,080,526
--------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $ 79,549,044 $ 43,813,122 $ 5,012 $ 12,726,877
--------------------------------------------------------
- -------------
+ Commenced operations on July 21, 1997.
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
74
<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>
---------------------------------------------------------------------------------------
INVESTMENT INCOME
Net investment income (deficit) from
Master Trust Fund................... $ 180,039 $ 115,637 $ 114,622 $ (4,374) $ 563 $ 116,845
---------------------------------------------------------------------------------------
EXPENSES
Accounting fees....................... 6,159 1,265 12,371 1,419 155 26,028
Administration fees................... 11,870 9,217 3,476 1,131 437 11,563
Audit & tax fees...................... 7,654 7,268 8,491 7,328 7,215 9,102
Co-Administration fees................ 9,367 1,914 18,967 2,168 247 39,588
Distribution fees..................... 70,250 9,655 142,254 16,258 1,847 296,912
Insurance............................. 218 46 374 44 11 911
Legal fees............................ 1,045 215 2,093 240 26 4,417
Miscellaneous......................... 209 43 418 48 5 883
Organization costs.................... 3,298 3,142 256 -- 256 3,642
Registration fees..................... 1,034 188 4,376 491 76 3,883
Shareholder reporting fees............ 3,658 753 7,325 842 90 15,458
Shareholder servicing fees............ 23,417 4,784 47,418 5,404 616 98,971
Transfer agent fees................... 16,958 6,111 18,253 5,773 6,441 47,015
Trustees' fee......................... 637 637 637 637 637 637
---------------------------------------------------------------------------------------
Total expenses...................... 155,774 45,238 266,709 41,783 18,059 559,010
Less: Reimbursement to (from)
advisor............................. (24,639) (29,926) (1,692) (12,520) (14,733) (6,338)
Less: Co-Administration fees waived... (9,367) (1,914) (18,443) (2,168) (247) (38,024)
Add: Line of credit commitment fee.... 709 146 1,420 163 17 2,998
---------------------------------------------------------------------------------------
Net expenses........................ 122,477 13,544 247,994 27,258 3,096 517,646
---------------------------------------------------------------------------------------
Net investment income (deficit)... 57,562 102,093 (133,372) (31,632) (2,533) (400,801)
---------------------------------------------------------------------------------------
NET REALIZED & UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on security
transactions........................ 920,650 49,585 1,567,857 449,331 12,224 7,987,385
Net realized foreign exchange gain
(loss).............................. 80,193 4,666 (109,819) (21,047) (1,692) (148,120)
Net unrealized foreign exchange gain
(loss).............................. (55,053) (11,368) (568) 185 12 11,056
Change in net unrealized appreciation
(depreciation) of investments and
foreign currency.................... 3,655,160 128,163 4,719,635 400,337 89,855 10,418,737
---------------------------------------------------------------------------------------
Net gain on investments........... 4,600,950 171,046 6,177,105 828,806 100,399 18,269,058
---------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $ 4,658,512 $ 273,139 $ 6,043,733 $ 797,174 $ 97,866 $ 17,868,257
---------------------------------------------------------------------------------------
- -------------
+ Commenced operations on July 21, 1997.
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
75
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
SERIES A PORTFOLIOS
<TABLE>
<CAPTION>
EMERGING GROWTH CORE GROWTH
----------------------------- -----------------------------
FOR THE FOR THE
PERIOD ENDED FOR THE PERIOD ENDED FOR THE
SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED
1997 MARCH 31, 1997 MARCH 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
<S> <C> <C> <C> <C>
-------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income (deficit)..... $ (1,123,970) $ (1,925,355) $ (345,659) $ (881,974)
Net realized gain (loss) from
security transactions............. 8,111,155 22,751,958 9,233,953 15,467,542
Net realized foreign exchange gain
(loss)............................ -- -- -- --
Net unrealized foreign exchange gain
(loss)............................ -- -- -- --
Change in net unrealized
appreciation (depreciation) of
investments....................... 55,941,715 (28,323,397) 13,181,178 (13,774,880)
-------------------------------------------------------------
Net increase (decrease) in net
assets resulting from
operations...................... 62,928,900 (7,496,794) 22,069,472 810,688
-------------------------------------------------------------
DISTRIBUTIONS TO SHARES OF BENEFICIAL
INTEREST
Net investment income*.............. -- -- -- --
Capital gain*....................... -- (15,992,011) -- (8,361,897)
-------------------------------------------------------------
Total distributions............... -- (15,992,011) -- (8,361,897)
-------------------------------------------------------------
TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST
Proceeds from shares sold........... 710,846,195 462,516,007 63,165,502 30,931,782
Proceeds from shares issued for
distribution reinvestment......... 4 4,994,971 -- 2,545,818
Cost of shares repurchased.......... (684,499,453) (460,435,916) (66,548,687) (27,093,474)
-------------------------------------------------------------
Increase (decrease) in net assets
derived from transactions in
shares of beneficial interest..... 26,346,746 7,075,062 (3,383,185) 6,384,126
-------------------------------------------------------------
Total increase (decrease) in net
assets.......................... 89,275,646 (16,413,743) 18,686,287 (1,167,083)
NET ASSETS:
BEGINNING OF PERIOD................... 121,741,647 138,155,390 76,107,976 77,275,060
-------------------------------------------------------------
END OF PERIOD......................... $ 211,017,293 $ 121,741,647 $ 94,794,263 $ 76,107,977
-------------------------------------------------------------
CHANGES IN SHARES OF BENEFICIAL INTEREST
Beginning balance..................... 8,038,199 7,704,965 4,529,358 4,207,526
Shares sold........................... 38,349,819 26,044,720 3,120,759 1,620,624
Shares issued for distributions
reinvested.......................... -- 280,974 -- 136,067
Shares repurchased.................... (36,831,245) (25,992,460) (3,314,460) (1,434,859)
-------------------------------------------------------------
Ending balance...................... 9,556,773 8,038,199 4,335,657 4,529,358
-------------------------------------------------------------
</TABLE>
- -------------
* See Financial Highlights for per share distribution amounts.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
76
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
LARGE CAP
GROWTH+ INCOME & GROWTH BALANCED GROWTH
------------- ----------------------------- -----------------------------
FOR THE FOR THE FOR THE
PERIOD ENDED PERIOD ENDED FOR THE PERIOD ENDED FOR THE
SEPTEMBER 30, SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED
1997 1997 MARCH 31, 1997 MARCH 31,
(UNAUDITED) (UNAUDITED) 1997 (UNAUDITED) 1997
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income (deficit)..... $ (248) $ 453,618 $ 876,497 $ 35,129 $ 110,794
Net realized gain (loss) from
security transactions............. 410 1,576,029 4,451,706 306,157 500,670
Net realized foreign exchange gain
(loss)............................ -- -- -- 24,192 --
Net unrealized foreign exchange gain
(loss)............................ -- -- -- (16,806) --
Change in net unrealized
appreciation (depreciation) of
investments....................... 8,080 4,746,168 (1,344,608) 1,056,577 (135,773)
-----------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from
operations...................... 8,242 6,775,815 3,993,595 1,405,249 475,691
-----------------------------------------------------------------------------
DISTRIBUTIONS TO SHARES OF BENEFICIAL
INTEREST
Net investment income*.............. -- (450,159) (886,133) (35,409) (110,672)
Capital gain*....................... -- -- (1,316,886) -- (492,706)
-----------------------------------------------------------------------------
Total distributions............... -- (450,159) (2,203,019) (35,409) (603,378)
-----------------------------------------------------------------------------
TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST
Proceeds from shares sold........... 322,967 2,987,436 6,259,230 1,149,908 2,150,368
Proceeds from shares issued for
distribution reinvestment......... -- 306,265 1,074,289 46,381 161,907
Cost of shares repurchased.......... (10) (2,820,756) (8,754,583) (1,244,443) (3,188,811)
-----------------------------------------------------------------------------
Increase (decrease) in net assets
derived from transactions in
shares of beneficial interest..... 322,957 472,945 (1,421,064) (48,154) (876,536)
-----------------------------------------------------------------------------
Total increase (decrease) in net
assets.......................... 331,199 6,798,601 369,512 1,321,686 (1,004,223)
NET ASSETS:
BEGINNING OF PERIOD................... -- 32,081,563 31,712,051 4,897,987 5,902,210
-----------------------------------------------------------------------------
END OF PERIOD......................... $ 331,199 $ 38,880,164 $ 32,081,563 $ 6,219,673 $ 4,897,987
-----------------------------------------------------------------------------
CHANGES IN SHARES OF BENEFICIAL INTEREST
Beginning balance..................... -- 1,933,759 2,022,208 315,190 365,215
Shares sold........................... 24,699 163,017 381,186 63,653 127,031
Shares issued for distributions
reinvested.......................... -- 17,364 65,578 2,870 9,776
Shares repurchased.................... (1) (156,789) (535,213) (69,501) (186,832)
-----------------------------------------------------------------------------
Ending balance...................... 24,698 1,957,351 1,933,759 312,212 315,190
-----------------------------------------------------------------------------
<CAPTION>
GOVERNMENT INCOME
-----------------------------
FOR THE
PERIOD ENDED FOR THE
SEPTEMBER 30, YEAR ENDED
1997 MARCH 31,
(UNAUDITED) 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income (deficit)..... $ 33,095 $ 75,317
Net realized gain (loss) from
security transactions............. 14,856 (33,783)
Net realized foreign exchange gain
(loss)............................ 1,306 --
Net unrealized foreign exchange gain
(loss)............................ (3,310) --
Change in net unrealized
appreciation (depreciation) of
investments....................... 39,277 4,940
Net increase (decrease) in net
assets resulting from
operations...................... 85,224 46,474
DISTRIBUTIONS TO SHARES OF BENEFICIAL
INTEREST
Net investment income*.............. (32,572) (75,947)
Capital gain*....................... -- (27,737)
Total distributions............... (32,572) (103,684)
TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST
Proceeds from shares sold........... 324,883 1,068,961
Proceeds from shares issued for
distribution reinvestment......... 21,436 41,246
Cost of shares repurchased.......... (473,760) (1,237,165)
Increase (decrease) in net assets
derived from transactions in
shares of beneficial interest..... (127,441) (126,958)
Total increase (decrease) in net
assets.......................... (74,789) (184,168)
NET ASSETS:
BEGINNING OF PERIOD................... 1,113,290 1,297,458
END OF PERIOD......................... $ 1,038,501 $ 1,113,290
CHANGES IN SHARES OF BENEFICIAL INTEREST
Beginning balance..................... 91,535 101,818
Shares sold........................... 25,961 85,134
Shares issued for distributions
reinvested.......................... 1,720 3,298
Shares repurchased.................... (37,641) (98,715)
Ending balance...................... 81,575 91,535
</TABLE>
- -------------
+ Commenced operations on July 21, 1997.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
77
<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
PERIOD ENDED FOR THE PERIOD ENDED FOR THE
SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED
1997 MARCH 31, 1997 MARCH 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
<S> <C> <C> <C> <C>
-------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income (deficit)..... $ 1,155,251 $ 877,328 $ (13,424) $ (187,913)
Net realized gain (loss) from
security transactions............. 703 (2) 2,203,289 2,620,500
Net realized foreign exchange gain
(loss)............................ -- -- (149,484) (25,273)
Net unrealized foreign exchange gain
(loss)............................ -- -- (1,234) (2,504)
Change in net unrealized
appreciation (depreciation) of
investments....................... -- -- 6,929,450 733,976
-------------------------------------------------------------
Net increase (decrease) in net
assets resulting from
operations...................... 1,155,954 877,326 8,968,597 3,138,786
-------------------------------------------------------------
DISTRIBUTIONS TO SHARES OF BENEFICIAL
INTEREST
Net investment income*.............. (1,155,251) (877,328) -- --
Capital gain*....................... -- -- -- (297,905)
-------------------------------------------------------------
Total distributions............... (1,155,251) (877,328) -- (297,905)
-------------------------------------------------------------
TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST
Proceeds from shares sold........... 925,278,783 523,124,504 24,600,951 35,141,939
Proceeds from shares issued for
distribution reinvestment......... 741,252 771,842 -- 161,618
Cost of shares repurchased.......... (922,775,687) (490,766,887) (10,547,409) (4,174,308)
-------------------------------------------------------------
Increase (decrease) in net assets
derived from transactions in
shares of beneficial interest..... 3,244,348 33,129,459 14,053,542 31,129,249
-------------------------------------------------------------
Total increase (decrease) in net
assets.......................... 3,245,051 33,129,457 23,022,139 33,970,130
NET ASSETS:
BEGINNING OF PERIOD................... 36,258,680 3,129,223 38,687,897 4,717,767
-------------------------------------------------------------
END OF PERIOD......................... $ 39,503,731 $ 36,258,680 $ 61,710,036 $ 38,687,897
-------------------------------------------------------------
CHANGES IN SHARES OF BENEFICIAL INTEREST
Beginning balance..................... 36,259,004 3,129,545 2,249,748 336,371
Shares sold........................... 925,278,783 523,124,504 1,304,723 2,155,019
Shares issued for distributions
reinvested.......................... 741,252 771,842 -- 10,441
Shares repurchased.................... (922,775,687) (490,766,887) (537,343) (252,083)
-------------------------------------------------------------
Ending balance...................... 39,503,352 36,259,004 3,017,128 2,249,748
-------------------------------------------------------------
</TABLE>
- -------------
* See Financial Highlights for per share distribution amounts.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
78
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL SMALL CAP
GROWTH INTERNATIONAL CORE GROWTH
----------------------------- -----------------------------
FOR THE FOR THE
PERIOD ENDED FOR THE PERIOD ENDED FOR THE
SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED
1997 MARCH 31, 1997 MARCH 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
<S> <C> <C> <C> <C>
-------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income (deficit)..... $ (32,849) $ (29,476) $ (2,873) --
Net realized gain (loss) from
security transactions............. 667,571 151,811 27,508 13
Net realized foreign exchange gain
(loss)............................ (37,103) (11,302) (4,533) (2)
Net unrealized foreign exchange gain
(loss)............................ (20) (493) (102) (1)
Change in net unrealized
appreciation (depreciation) of
investments....................... 1,028,750 289,270 256,458 20
-------------------------------------------------------------
Net increase (decrease) in net
assets resulting from
operations...................... 1,626,349 399,810 276,458 30
-------------------------------------------------------------
DISTRIBUTIONS TO SHARES OF BENEFICIAL
INTEREST
Net investment income*.............. -- (2,119) -- --
Capital gain*....................... -- (28,766) -- --
-------------------------------------------------------------
Total distributions............... -- (30,885) -- --
-------------------------------------------------------------
TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST
Proceeds from shares sold........... 18,270,928 4,459,847 2,805,606 612
Proceeds from shares issued for
distribution reinvestment......... -- 11,339 -- --
Cost of shares repurchased.......... (14,254,287) (326,836) (63,277) --
-------------------------------------------------------------
Increase (decrease) in net assets
derived from transactions in
shares of beneficial interest..... 4,016,641 4,144,350 2,742,329 612
-------------------------------------------------------------
Total increase (decrease) in net
assets.......................... 5,642,990 4,513,275 3,018,787 642
NET ASSETS:
BEGINNING OF PERIOD................... 5,569,084 1,055,809 1,642 1,000
-------------------------------------------------------------
END OF PERIOD......................... $ 11,212,074 $ 5,569,084 $ 3,020,429 $ 1,642
-------------------------------------------------------------
CHANGES IN SHARES OF BENEFICIAL INTEREST
Beginning balance..................... 373,205 80,298 129 80
Shares sold........................... 1,077,495 313,534 191,589 49
Shares issued for distributions
reinvested.......................... -- 800 -- --
Shares repurchased.................... (827,776) (21,427) (4,283) --
-------------------------------------------------------------
Ending balance...................... 622,924 373,205 187,435 129
-------------------------------------------------------------
<CAPTION>
WORLDWIDE GROWTH
-----------------------------
FOR THE
PERIOD ENDED FOR THE
SEPTEMBER 30, YEAR ENDED
1997 MARCH 31,
(UNAUDITED) 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income (deficit)..... $ (49,767) $ (224,650)
Net realized gain (loss) from
security transactions............. 2,794,006 3,695,538
Net realized foreign exchange gain
(loss)............................ (51,919) (78,051)
Net unrealized foreign exchange gain
(loss)............................ 3,542 (4,962)
Change in net unrealized
appreciation (depreciation) of
investments....................... 4,034,385 (553,127)
Net increase (decrease) in net
assets resulting from
operations...................... 6,730,247 2,834,748
DISTRIBUTIONS TO SHARES OF BENEFICIAL
INTEREST
Net investment income*.............. -- --
Capital gain*....................... -- (2,322,037)
Total distributions............... -- (2,322,037)
TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST
Proceeds from shares sold........... 34,190,335 11,772,722
Proceeds from shares issued for
distribution reinvestment......... -- 455,819
Cost of shares repurchased.......... (31,605,283) (12,199,661)
Increase (decrease) in net assets
derived from transactions in
shares of beneficial interest..... 2,585,052 28,880
Total increase (decrease) in net
assets.......................... 9,315,299 541,591
NET ASSETS:
BEGINNING OF PERIOD................... 24,022,177 23,480,586
END OF PERIOD......................... $ 33,337,476 $ 24,022,177
CHANGES IN SHARES OF BENEFICIAL INTEREST
Beginning balance..................... 1,423,429 1,416,819
Shares sold........................... 1,776,979 685,931
Shares issued for distributions
reinvested.......................... -- 27,509
Shares repurchased.................... (1,633,252) (706,830)
Ending balance...................... 1,567,156 1,423,429
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
79
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------
SERIES B PORTFOLIOS
<TABLE>
<CAPTION>
EMERGING GROWTH
----------------------------
FOR THE
PERIOD ENDED FOR THE
SEPTEMBER 30, YEAR ENDED
1997 MARCH 31,
(UNAUDITED) 1997
<S> <C> <C>
----------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income (deficit)..... $ (386,994) $ (510,915)
Net realized gain (loss) from
security transactions............. (278,313) (288,290)
Net realized foreign exchange gain
(loss)............................ -- --
Net unrealized foreign exchange
gains (losses).................... -- --
Change in net unrealized
appreciation (depreciation) of
investments....................... 14,778,320 (2,501,896)
----------------------------
Net increase (decrease) in net
assets resulting from
operations...................... 14,115,013 (3,301,101)
----------------------------
DISTRIBUTIONS TO SHARES OF BENEFICIAL
INTEREST
Net investment income*.............. -- --
Capital gain*....................... -- --
----------------------------
Total distributions............. -- --
----------------------------
TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST
Proceeds from sales................. 14,820,461 24,330,440
Proceeds from shares issued for
distribution reinvestment......... -- --
Cost of shares repurchased.......... (7,047,659) (6,625,486)
----------------------------
Increase (Decrease) in net assets
derived from transactions in
shares of beneficial interest... 7,772,802 17,704,954
----------------------------
Total increase (decrease) in net
assets........................ 21,887,815 14,403,853
NET ASSETS:
BEGINNING OF PERIOD................... 28,029,591 13,625,738
----------------------------
END OF PERIOD......................... $ 49,917,406 $ 28,029,591
----------------------------
CHANGES IN SHARES OF BENEFICIAL INTEREST
Beginning balance..................... 1,807,110 816,643
Shares sold........................... 798,689 1,363,267
Shares issued for distributions
reinvested.......................... -- --
Shares repurchased.................... (391,296) (372,800)
----------------------------
Ending balance.................... 2,214,503 1,807,110
----------------------------
</TABLE>
- -------------
* See Financial Highlights for per share distribution amounts.
+ Commenced operations on July 21, 1997.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
80
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
INCOME & GROWTH
CORE GROWTH LARGE CAP+ -------------------------
----------------------------- ------------- FOR THE
FOR THE FOR THE PERIOD ENDED
PERIOD ENDED FOR THE PERIOD ENDED SEPTEMBER FOR THE
SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, 30, YEAR ENDED
1997 MARCH 31, 1997 1997 MARCH 31,
(UNAUDITED) 1997 (UNAUDITED) (UNAUDITED) 1997
<S> <C> <C> <C> <C> <C>
------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income (deficit)..... $ (257,265) $ (385,898) $ (1,646) $ 157,224 $ 158,493
Net realized gain (loss) from
security transactions............. 1,312,744 765,218 5,142 446,430 298,853
Net realized foreign exchange gain
(loss)............................ -- -- -- -- --
Net unrealized foreign exchange
gains (losses).................... -- -- -- -- --
Change in net unrealized
appreciation (depreciation) of
investments....................... 8,018,431 (1,661,676) 32,039 2,459,897 282,117
------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from
operations...................... 9,073,910 (1,282,356) 35,535 3,063,551 739,463
------------------------------------------------------------------------
DISTRIBUTIONS TO SHARES OF BENEFICIAL
INTEREST
Net investment income*.............. -- -- -- (157,569) (159,208)
Capital gain*....................... -- -- -- -- --
------------------------------------------------------------------------
Total distributions............. -- -- -- (157,569) (159,208)
------------------------------------------------------------------------
TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST
Proceeds from sales................. 9,038,397 22,036,974 1,110,347 6,311,603 10,404,427
Proceeds from shares issued for
distribution reinvestment......... -- -- -- 83,863 109,978
Cost of shares repurchased.......... (6,097,810) (2,938,203) (10,997) (894,073) (480,034)
------------------------------------------------------------------------
Increase (Decrease) in net assets
derived from transactions in
shares of beneficial interest... 2,940,587 19,098,771 1,099,350 5,501,393 10,034,371
------------------------------------------------------------------------
Total increase (decrease) in net
assets........................ 12,014,497 17,816,415 1,134,885 8,407,375 10,614,626
NET ASSETS:
BEGINNING OF PERIOD................... 29,002,393 11,185,978 -- 12,739,703 2,125,077
------------------------------------------------------------------------
END OF PERIOD......................... $ 41,016,890 $ 29,002,393 $ 1,134,885 $ 21,147,078 $12,739,703
------------------------------------------------------------------------
CHANGES IN SHARES OF BENEFICIAL INTEREST
Beginning balance..................... 1,775,837 688,351 -- 767,485 142,019
Shares sold........................... 498,371 1,254,123 85,668 337,985 648,630
Shares issued for distributions
reinvested.......................... -- -- -- 4,688 6,743
Shares repurchased.................... (338,512) (166,637) (829) (48,497) (29,547)
------------------------------------------------------------------------
Ending balance.................... 1,935,696 1,775,837 84,839 1,061,661 767,845
------------------------------------------------------------------------
<CAPTION>
BALANCED GROWTH
--------------------------
FOR THE
PERIOD ENDED FOR THE
SEPTEMBER 30, YEAR ENDED
1997 MARCH 31,
(UNAUDITED) 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income (deficit)..... $ 8,121 $ 21,467
Net realized gain (loss) from
security transactions............. 91,787 (20,222)
Net realized foreign exchange gain
(loss)............................ 11,188 --
Net unrealized foreign exchange
gains (losses).................... (8,079) --
Change in net unrealized
appreciation (depreciation) of
investments....................... 549,970 29,343
Net increase (decrease) in net
assets resulting from
operations...................... 652,987 30,588
DISTRIBUTIONS TO SHARES OF BENEFICIAL
INTEREST
Net investment income*.............. (8,319) (21,202)
Capital gain*....................... -- --
Total distributions............. (8,319) (21,202)
TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST
Proceeds from sales................. 404,409 1,680,671
Proceeds from shares issued for
distribution reinvestment......... 6,089 16,798
Cost of shares repurchased.......... (125,718) (246,899)
Increase (Decrease) in net assets
derived from transactions in
shares of beneficial interest... 284,780 1,450,570
Total increase (decrease) in net
assets........................ 929,448 1,459,956
NET ASSETS:
BEGINNING OF PERIOD................... 2,132,890 672,934
END OF PERIOD......................... 3$,062,338 $2,132,890
CHANGES IN SHARES OF BENEFICIAL INTEREST
Beginning balance..................... 143,328 47,473
Shares sold........................... 24,027 110,729
Shares issued for distributions
reinvested.......................... 372 1,106
Shares repurchased.................... (7,622) (15,980)
Ending balance.................... 160,105 143,328
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
81
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS -- CONTINUED
- --------------------------------------------------------------------------------
SERIES B PORTFOLIOS
<TABLE>
<CAPTION>
GOVERNMENT INCOME
----------------------------
FOR THE
PERIOD ENDED FOR THE
SEPTEMBER 30, YEAR ENDED
1997 MARCH 31,
(UNAUDITED) 1997
<S> <C> <C>
----------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income (deficit)..... $ 34,497 $ 44,511
Net realized gain (loss) from
security transactions............. 15,713 17,066
Net realized foreign exchange gain
(loss)............................ 1,479 --
Net unrealized foreign exchange
gains (losses).................... (3,822) --
Change in net unrealized
appreciation (depreciation) of
investments....................... 46,101 (24,165)
----------------------------
Net increase (decrease) in net
assets resulting from
operations...................... 93,968 37,412
----------------------------
DISTRIBUTIONS TO SHARES OF BENEFICIAL
INTEREST
Net investment income*.............. (34,282) (44,764)
Capital gain*....................... -- (12,311)
----------------------------
Total distributions............. (34,282) (57,075)
----------------------------
TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST
Proceeds from sales................. 376,022 1,747,622
Proceeds from shares issued for
distribution reinvestment......... 23,752 19,774
Cost of shares repurchased.......... (411,202) (530,556)
----------------------------
Increase (Decrease) in net assets
derived from transactions in
shares of beneficial interest... (11,428) 1,236,840
----------------------------
Total increase (decrease) in net
assets........................ 48,258 1,217,177
NET ASSETS:
BEGINNING OF PERIOD................... 1,344,705 127,528
----------------------------
END OF PERIOD......................... $ 1,392,963 $ 1,344,705
----------------------------
CHANGES IN SHARES OF BENEFICIAL INTEREST
Beginning balance..................... 110,839 10,174
Shares sold........................... 30,089 141,955
Shares issued for distributions
reinvested.......................... 1,916 1,600
Shares repurchased.................... (33,099) (42,890)
----------------------------
Ending balance.................... 109,745 110,839
----------------------------
</TABLE>
- -------------
* See Financial Highlights for per share distribution amounts.
+ Commenced operations on July 21, 1997.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
82
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL SMALL CAP
EMERGING COUNTRIES GROWTH INTERNATIONAL CORE GROWTH
-------------------------- ---------------------------- -----------------------------
FOR THE FOR THE FOR THE
PERIOD ENDED FOR THE PERIOD ENDED FOR THE PERIOD ENDED FOR THE
SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED
1997 MARCH 31, 1997 MARCH 31, 1997 MARCH 31,
(UNAUDITED) 1997 (UNAUDITED) 1997 (UNAUDITED) 1997
<S> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income (deficit)..... $ (118,523) $ (204,544) $ (51,102) $ (49,877) $ (11,899) --
Net realized gain (loss) from
security transactions............. 1,374,692 1,803,877 624,189 139,789 34,312 9
Net realized foreign exchange gain
(loss)............................ (96,582) (17,335) (33,366) (11,214) (8,291) (3)
Net unrealized foreign exchange
gains (losses).................... (729) (1,898) 171 (390) (192) --
Change in net unrealized
appreciation (depreciation) of
investments....................... 4,272,486 605,621 753,586 325,117 399,707 13
---------------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from
operations...................... 5,431,344 2,185,721 1,293,478 403,425 413,637 19
---------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHARES OF BENEFICIAL
INTEREST
Net investment income*.............. -- -- -- (5,186) -- --
Capital gain*....................... -- (67,888) -- -- -- --
---------------------------------------------------------------------------------------
Total distributions............. -- (67,888) -- (5,186) -- --
---------------------------------------------------------------------------------------
TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST
Proceeds from sales................. 14,699,340 19,948,661 2,900,372 3,702,565 4,650,896 8
Proceeds from shares issued for
distribution reinvestment......... -- 38,740 3 4,495 -- --
Cost of shares repurchased.......... (2,841,120) (1,104,793) (493,977) (512,097) (78,688) --
---------------------------------------------------------------------------------------
Increase (Decrease) in net assets
derived from transactions in
shares of beneficial interest... 11,858,220 18,882,608 2,406,398 3,194,963 4,572,208 8
---------------------------------------------------------------------------------------
Total increase (decrease) in net
assets........................ 17,289,564 21,000,441 3,699,876 3,593,202 4,985,845 27
NET ASSETS:
BEGINNING OF PERIOD................... 24,557,521 3,557,080 5,079,996 1,486,794 1,027 1,000
---------------------------------------------------------------------------------------
END OF PERIOD......................... $41,847,085 $24,557,521 $ 8,779,872 $ 5,079,996 $ 4,986,872 $ 1,027
---------------------------------------------------------------------------------------
CHANGES IN SHARES OF BENEFICIAL INTEREST
Beginning balance..................... 1,420,199 253,774 319,641 106,534 81 80
Shares sold........................... 767,194 1,230,640 166,265 246,154 315,151 1
Shares issued for distributions
reinvested.......................... -- 2,483 -- 290 -- --
Shares repurchased.................... (147,154) (66,698) (27,194) (33,337) (5,134) --
---------------------------------------------------------------------------------------
Ending balance.................... 2,040,239 1,420,199 458,712 319,641 310,098 81
---------------------------------------------------------------------------------------
<CAPTION>
WORLDWIDE GROWTH
---------------------------
FOR THE
PERIOD ENDED FOR THE
SEPTEMBER 30, YEAR ENDED
1997 MARCH 31,
(UNAUDITED) 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income (deficit)..... $ (38,334) $ (61,411)
Net realized gain (loss) from
security transactions............. 501,794 227,470
Net realized foreign exchange gain
(loss)............................ (13,511) (13,875)
Net unrealized foreign exchange
gains (losses).................... 809 (1,290)
Change in net unrealized
appreciation (depreciation) of
investments....................... 1,213,817 186,506
Net increase (decrease) in net
assets resulting from
operations...................... 1,664,575 337,400
DISTRIBUTIONS TO SHARES OF BENEFICIAL
INTEREST
Net investment income*.............. -- --
Capital gain*....................... -- --
Total distributions............. -- --
TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST
Proceeds from sales................. 1,944,092 3,764,249
Proceeds from shares issued for
distribution reinvestment......... -- --
Cost of shares repurchased.......... (390,869) (132,022)
Increase (Decrease) in net assets
derived from transactions in
shares of beneficial interest... 1,553,223 3,632,227
Total increase (decrease) in net
assets........................ 3,217,798 3,969,627
NET ASSETS:
BEGINNING OF PERIOD................... 5,941,869 1,972,242
END OF PERIOD......................... $ 9,159,667 $ 5,941,869
CHANGES IN SHARES OF BENEFICIAL INTEREST
Beginning balance..................... 370,791 137,552
Shares sold........................... 104,657 241,408
Shares issued for distributions
reinvested.......................... -- --
Shares repurchased.................... (21,118) (8,169)
Ending balance.................... 454,330 370,791
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
83
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------
SERIES C PORTFOLIOS
<TABLE>
<CAPTION>
EMERGING GROWTH CORE GROWTH
----------------------------- -----------------------------
FOR THE FOR THE
PERIOD ENDED FOR THE PERIOD ENDED FOR THE
SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED
1997 MARCH 31, 1997 MARCH 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
<S> <C> <C> <C> <C>
-------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income (deficit)..... $ (2,157,788) $ (4,223,186) $ (1,256,861) $ (2,899,449)
Net realized gain (loss) from
security transactions............. 10,577,850 33,211,523 20,485,012 35,664,077
Net realized foreign exchange gain
(loss)............................ -- -- -- --
Net unrealized foreign exchange gain
(loss)............................ -- -- -- --
Change in net unrealized
appreciation (depreciation) of
investments....................... 71,128,982 42,199,307 24,584,971 (30,168,671)
-------------------------------------------------------------
Net increase (decrease) in net
assets resulting from
operations.................... 79,549,044 (13,210,970) 43,813,122 2,595,957
-------------------------------------------------------------
DISTRIBUTIONS TO SHARES OF BENEFICIAL
INTEREST
Net investment income*.............. -- -- -- --
Capital gain*....................... -- (23,811,530) -- (17,382,672)
-------------------------------------------------------------
Total distributions............. -- (23,811,530) -- (17,382,672)
-------------------------------------------------------------
TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST
Proceeds from sales................. 30,191,279 67,825,520 14,311,404 35,028,635
Proceeds from shares issued for
distribution reinvestment......... -- 2,692,729 -- 2,654,979
Cost of shares repurchased.......... (43,539,014) (57,920,772) (31,928,202) (42,857,133)
-------------------------------------------------------------
Increase (decrease) in net assets
derived from transactions in
shares of beneficial interest... (13,347,735) 12,597,477 (17,616,798) (5,173,519)
-------------------------------------------------------------
Total increase (decrease) in net
assets........................ 66,201,309 (24,425,023) 26,196,324 (19,960,234)
NET ASSETS:
BEGINNING OF PERIOD................... 182,906,982 207,332,005 157,501,096 177,461,331
-------------------------------------------------------------
END OF PERIOD......................... $ 249,108,291 $ 182,906,982 $ 183,697,420 $ 157,501,097
-------------------------------------------------------------
CHANGES IN SHARES OF BENEFICIAL INTEREST
Beginning balance..................... 12,451,381 11,765,386 9,555,544 9,825,753
Shares sold........................... 1,716,859 3,815,165 766,729 1,872,637
Shares issued for distributions
reinvested.......................... -- 156,388 -- 144,369
Shares repurchased.................... (2,497,711) (3,285,558) (1,728,976) (2,287,215)
-------------------------------------------------------------
Ending balance.................. 11,670,529 12,451,381 8,593,297 9,555,544
-------------------------------------------------------------
</TABLE>
- -------------
* See Financial Highlights for per share distribution amounts.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
84
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
LARGE CAP
GROWTH+ INCOME & GROWTH BALANCED GROWTH
------------- ----------------------------- -----------------------------
FOR THE FOR THE FOR THE
PERIOD ENDED PERIOD ENDED FOR THE PERIOD ENDED FOR THE
SEPTEMBER 30, SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED
1997 1997 MARCH 31, 1997 MARCH 31,
(UNAUDITED) (UNAUDITED) 1997 (UNAUDITED) 1997
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income (deficit)..... $ (229) $ 646,351 $ 1,348,417 $ 57,562 $ 218,565
Net realized gain (loss) from
security transactions............. 722 3,081,542 8,550,614 920,650 1,455,500
Net realized foreign exchange gain
(loss)............................ -- -- -- 80,193 --
Net unrealized foreign exchange gain
(loss)............................ -- -- -- (55,053) --
Change in net unrealized
appreciation (depreciation) of
investments....................... 4,519 8,998,984 (2,403,198) 3,655,160 (647,319)
-----------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from
operations.................... 5,012 12,726,877 7,495,833 4,658,512 1,026,746
-----------------------------------------------------------------------------
DISTRIBUTIONS TO SHARES OF BENEFICIAL
INTEREST
Net investment income*.............. -- (641,302) (1,361,226) (58,074) (218,006)
Capital gain*....................... -- -- (1,851,637) -- (1,482,915)
-----------------------------------------------------------------------------
Total distributions............. -- (641,302) (3,212,863) (58,074) (1,700,921)
-----------------------------------------------------------------------------
TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST
Proceeds from sales................. 155,698 4,645,257 10,562,292 1,252,316 4,321,529
Proceeds from shares issued for
distribution reinvestment......... -- 583,192 564,331 119,370 180,525
Cost of shares repurchased.......... (18) (6,398,371) (12,263,595) (2,703,365) (3,424,124)
-----------------------------------------------------------------------------
Increase (decrease) in net assets
derived from transactions in
shares of beneficial interest... 155,680 (1,169,922) (1,136,972) (1,331,679) 1,077,930
-----------------------------------------------------------------------------
Total increase (decrease) in net
assets........................ 160,692 10,915,653 3,145,998 3,268,759 403,755
NET ASSETS:
BEGINNING OF PERIOD................... -- 62,143,307 58,997,309 16,990,094 16,586,339
-----------------------------------------------------------------------------
END OF PERIOD......................... $ 160,692 $ 73,058,960 $ 62,143,307 $ 20,258,853 $ 16,990,094
-----------------------------------------------------------------------------
CHANGES IN SHARES OF BENEFICIAL INTEREST
Beginning balance..................... -- 3,644,102 3,712,379 1,089,607 1,023,861
Shares sold........................... 11,993 248,024 628,939 71,166 256,836
Shares issued for distributions
reinvested.......................... -- 32,698 33,465 7,395 10,900
Shares repurchased.................... (1) (346,326) (730,681) (154,274) (201,990)
-----------------------------------------------------------------------------
Ending balance.................. 11,992 3,578,498 3,644,102 1,013,894 1,089,607
-----------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
85
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS -- CONTINUED
- --------------------------------------------------------------------------------
SERIES C PORTFOLIOS
<TABLE>
<CAPTION>
GOVERNMENT INCOME EMERGING COUNTRIES
----------------------------- -----------------------------
FOR THE FOR THE
PERIOD ENDED FOR THE PERIOD ENDED FOR THE
SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED
1997 MARCH 31, 1997 MARCH 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
<S> <C> <C> <C> <C>
-------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income (deficit)..... $ 102,093 $ 178,882 $ (133,372) $ (248,884)
Net realized gain (loss) from
security transactions............. 49,585 (40,291) 1,567,857 2,299,477
Net realized foreign exchange gain
(loss)............................ 4,666 -- (109,819) (21,984)
Net unrealized foreign exchange gain
(loss)............................ (11,368) -- (568) (2,323)
Change in net unrealized
appreciation (depreciation) of
investments....................... 128,163 (29,932) 4,719,635 696,295
-------------------------------------------------------------
Net increase (decrease) in net
assets resulting from
operations.................... 273,139 108,659 6,043,733 2,722,581
-------------------------------------------------------------
DISTRIBUTIONS TO SHARES OF BENEFICIAL
INTEREST
Net investment income*.............. (100,840) (180,214) -- --
Capital gain*....................... -- -- -- (163,843)
-------------------------------------------------------------
Total distributions............. (100,840) (180,214) -- (163,843)
-------------------------------------------------------------
TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST
Proceeds from sales................. 675,312 2,994,991 14,191,886 24,484,540
Proceeds from shares issued for
distribution reinvestment......... 78,343 47,133 -- 63,361
Cost of shares repurchased.......... (1,004,746) (2,262,515) (2,560,474) (2,075,412)
-------------------------------------------------------------
Increase (decrease) in net assets
derived from transactions in
shares of beneficial interest... (251,091) 779,609 11,631,412 22,472,489
-------------------------------------------------------------
Total increase (decrease) in net
assets........................ (78,792) 708,054 17,675,145 25,031,227
NET ASSETS:
BEGINNING OF PERIOD................... 3,694,341 2,986,287 29,375,971 4,344,744
-------------------------------------------------------------
END OF PERIOD......................... $ 3,615,549 $ 3,694,341 $ 47,051,116 $ 29,375,971
-------------------------------------------------------------
CHANGES IN SHARES OF BENEFICIAL INTEREST
Beginning balance..................... 300,707 236,490 1,747,147 316,899
Shares sold........................... 53,903 241,093 751,322 1,557,372
Shares issued for distributions
reinvested.......................... 6,242 3,781 -- 4,177
Shares repurchased.................... (79,549) (180,657) (140,067) (131,301)
-------------------------------------------------------------
Ending balance.................. 281,303 300,707 2,358,402 1,747,147
-------------------------------------------------------------
</TABLE>
- -------------
* See Financial Highlights for per share distribution amounts.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
86
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL SMALL CAP
GROWTH INTERNATIONAL CORE GROWTH
----------------------------- -----------------------------
FOR THE FOR THE
PERIOD ENDED FOR THE PERIOD ENDED FOR THE
SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED
1997 MARCH 31, 1997 MARCH 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
<S> <C> <C> <C> <C>
-------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income (deficit)..... $ (31,632) $ (45,116) $ (2,533) $ (1)
Net realized gain (loss) from
security transactions............. 449,331 80,654 12,224 (262)
Net realized foreign exchange gain
(loss)............................ (21,047) (8,590) (1,692) (17)
Net unrealized foreign exchange gain
(loss)............................ 185 (293) 12 (14)
Change in net unrealized
appreciation (depreciation) of
investments....................... 400,337 278,387 89,855 357
-------------------------------------------------------------
Net increase (decrease) in net
assets resulting from
operations.................... 797,174 305,042 97,866 63
-------------------------------------------------------------
DISTRIBUTIONS TO SHARES OF BENEFICIAL
INTEREST
Net investment income*.............. -- (1,204) -- --
Capital gain*....................... -- -- -- --
-------------------------------------------------------------
Total distributions............. -- (1,204) -- --
-------------------------------------------------------------
TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST
Proceeds from sales................. 1,439,421 3,600,080 1,036,873 42,012
Proceeds from shares issued for
distribution reinvestment......... -- 872 -- --
Cost of shares repurchased.......... (693,521) (1,245,898) (49,777) --
-------------------------------------------------------------
Increase (decrease) in net assets
derived from transactions in
shares of beneficial interest... 745,900 2,355,054 987,096 42,012
-------------------------------------------------------------
Total increase (decrease) in net
assets........................ 1,543,074 2,658,892 1,084,962 42,075
NET ASSETS:
BEGINNING OF PERIOD................... 3,592,314 933,422 43,075 1,000
-------------------------------------------------------------
END OF PERIOD......................... $ 5,135,388 $ 3,592,314 $ 1,128,037 $ 43,075
-------------------------------------------------------------
CHANGES IN SHARES OF BENEFICIAL INTEREST
Beginning balance..................... 241,603 71,526 3,396 80
Shares sold........................... 86,989 255,944 70,783 3,316
Shares issued for distributions
reinvested.......................... -- 60 -- --
Shares repurchased.................... (41,573) (85,927) (3,618) --
-------------------------------------------------------------
Ending balance.................. 287,019 241,603 70,561 3,396
-------------------------------------------------------------
<CAPTION>
WORLDWIDE GROWTH
-----------------------------
FOR THE
PERIOD ENDED FOR THE
SEPTEMBER 30, YEAR ENDED
1997 MARCH 31,
(UNAUDITED) 1997
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income (deficit)..... $ (400,801) $ (1,132,641)
Net realized gain (loss) from
security transactions............. 7,987,385 11,316,290
Net realized foreign exchange gain
(loss)............................ (148,120) 232,218
Net unrealized foreign exchange gain
(loss)............................ 11,056 (14,511)
Change in net unrealized
appreciation (depreciation) of
investments....................... 10,418,737 1,872,212
Net increase (decrease) in net
assets resulting from
operations.................... 17,868,257 8,064,708
DISTRIBUTIONS TO SHARES OF BENEFICIAL
INTEREST
Net investment income*.............. -- --
Capital gain*....................... -- (7,050,772)
Total distributions............. -- (7,050,772)
TRANSACTIONS IN SHARES OF BENEFICIAL
INTEREST
Proceeds from sales................. 4,598,568 12,717,331
Proceeds from shares issued for
distribution reinvestment......... -- 871,898
Cost of shares repurchased.......... (6,702,757) (15,413,631)
Increase (decrease) in net assets
derived from transactions in
shares of beneficial interest... (2,104,189) (1,824,402)
Total increase (decrease) in net
assets........................ 15,764,068 (810,466)
NET ASSETS:
BEGINNING OF PERIOD................... 70,344,561 71,155,027
END OF PERIOD......................... $ 86,108,629 $ 70,344,561
CHANGES IN SHARES OF BENEFICIAL INTEREST
Beginning balance..................... 4,158,310 4,244,437
Shares sold........................... 242,378 746,203
Shares issued for distributions
reinvested.......................... -- 52,366
Shares repurchased.................... (349,377) (884,696)
Ending balance.................. 4,051,311 4,158,310
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
87
<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 commenced operation on April 19,
1993. The Trust offers 57 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 Advisory (formerly
Qualified), with no load (each a "Portfolio" and collectively the "Portfolios").
The Portfolios of the Trust seek to achieve their respective investment
objectives by investing all of their assets in corresponding series of Nicholas-
Applegate Investment Trust (the "Master Trust"), a diversified open-end
management investment company offering eighteen investment vehicles (the
"Funds"). For a description of the investments objectives of each Fund, see Note
A to the accompanying Funds' financial statements.
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.
PORTFOLIO SHARE VALUATION
The net asset value per portfolio share is determined each business day at the
close of regular trading on the New York Stock Exchange by dividing a
portfolio's net assets by the number of its shares outstanding.
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.
The Funds are treated as partnerships for federal income tax purposes. Any
interest, dividends and gains or losses of the Funds will be deemed to have been
"passed through" to the Portfolios.
Net investment income and net realized gains for the year (or period where
appropriate) differ for financial statement and tax purposes primarily because
of one or all of the following: deferral of wash-sale losses, passive foreign
investments, unrealized appreciation/depreciation, and capital loss
carryforwards.
The character of distributions made during the year (or period where
appropriate) from net investment income or net realized gains may differ from
their ultimate characterization for federal income tax purposes due to book/tax
differences in the character of income and expense recognition. The prospectus
for the Nicholas-Applegate Mutual Funds describes 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.
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.
- --------------------------------------------------------------------------------
88
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
NOTES TO THE FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
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 adopted 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, for which the rate is 0.50%. 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.
The Trust has adopted 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 pay the Adviser for
administrative services at annual rate of 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.
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 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%
Large Cap 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 September 30, 1997,
Nicholas-Applegate, at its discretion, paid for all of the Money Market
Portfolio
- --------------------------------------------------------------------------------
89
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
NOTES TO THE FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
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-administration fees, on behalf of the Portfolios, during the periods from
inception (respectively) to September 30, 1997, are as follows:
<TABLE>
<CAPTION>
A B C
--------- --------- ---------
<S> <C> <C> <C>
Emerging Growth Portfolios...... -- $ 31,053 --
Core Growth Portfolios.......... $ 132,114 49,684 --
Large Cap Growth Portfolios..... 472 997 $ 348
Income & Growth Portfolios...... 178,484 78,165 88,735
Balanced Growth Portfolios...... 241,101 64,575 198,690
Government Income Portfolios.... 235,950 45,650 244,923
Money Market Portfolio.......... 402,791 -- --
Emerging Countries Portfolios... 146,184 89,131 104,444
International Small Cap Growth
Portfolios.................... 118,880 68,582 75,506
International Core Growth
Portfolios.................... 21,317 47,446 14,980
Worldwide Growth Portfolios..... 210,612 78,156 103,331
</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 six month period ended September 30, 1997 were as follows:
<TABLE>
<CAPTION>
ADDITIONS REDUCTIONS
(000S) (000S)
----------- -----------
<S> <C> <C>
Emerging Growth Portfolio A..... $ 710,846 $ 685,168
Emerging Growth Portfolio B..... 14,851 7,297
<CAPTION>
ADDITIONS REDUCTIONS
(000S) (000S)
----------- -----------
<S> <C> <C>
Emerging Growth Portfolio C..... 30,191 45,112
Core Growth Portfolio A......... 63,195 66,912
Core Growth Portfolio B......... 9,050 6,337
Core Growth Portfolio C......... 14,360 33,129
Large Cap Growth Portfolio A.... 323 --
Large Cap Growth Portfolio B.... 1,110 11
Large Cap Growth Portfolio C.... 1,556 --
Income & Growth Portfolio A..... 3,006 2,884
Income & Growth Portfolio B..... 6,312 888
Income & Growth Portfolio C..... 4,661 6,617
Balanced Growth Portfolio A..... 1,221 1,303
Balanced Growth
Portfolio B.................... 445 166
Balanced Growth
Portfolio C.................... 1,394 2,888
Government Income Portfolio A... 367 515
Government Income Portfolio B... 388 429
Government Income Portfolio C... 1,059 1,400
Money Market Portfolio.......... 903,545 900,088
Emerging Countries Portfolio
A.............................. 24,676 10,825
Emerging Countries Portfolio
B.............................. 14,755 3,066
Emerging Countries Portfolio
C.............................. 14,193 2,808
International Small Cap Growth
Portfolio A.................... 18,300 14,321
International Small Cap Growth
Portfolio B.................... 2,936 570
</TABLE>
- --------------------------------------------------------------------------------
90
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
NOTES TO THE FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ADDITIONS REDUCTIONS
(000S) (000S)
----------- -----------
<S> <C> <C>
International Small Cap Growth
Portfolio C.................... 1,453 763
International Core Growth
Portfolio A.................... 2,825 67
International Core Growth
Portfolio B.................... 4,695 79
International Core Growth
Portfolio C.................... 1,037 50
Worldwide Growth Portfolio A.... 34,213 31,734
Worldwide Growth Portfolio B.... 1,996 481
Worldwide Growth Portfolio C.... 4,610 7,256
</TABLE>
4. CREDIT FACILITY
The Portfolios participate in a $75 million 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 September 30, 1997, there was no outstanding borrowing
under the Facility. The maximum amount borrowed under this line of credit at any
time during the period ended September 30, 1997 was $0.
- --------------------------------------------------------------------------------
91
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
NOTES TO THE FINANCIAL STATEMENTS -- Continued
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES FOR THE NICHOLAS-APPLEGATE INVESTMENT TRUST
SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
EMERGING CORE INCOME &
GROWTH GROWTH LARGE CAP GROWTH
FUND FUND GROWTH FUND FUND
<S> <C> <C> <C> <C>
-------------------------------------------------------------
ASSETS
Investments, at value *............... $ 808,666,422 $ 496,078,012 $ 3,367,285 $ 206,451,735
Foreign currencies, at value**........ -- -- -- --
Cash.................................. 8,155 2,952 90,038 2,290
Receivable for investment securities
sold................................ 1,681,667 4,869,013 -- 452,850
Receivable for interests sold......... 862,828 301,047 93,856 567,490
Dividends receivable.................. 136,874 21,207 1,555 125,657
Interest receivable................... 1,527 3,899 -- 904,603
Due from advisor...................... -- -- 5,390 --
Deferred organization costs........... 10,178 8,549 -- 4,239
Prepaid Expenses...................... 11,604 8,874 39 3,019
Other assets.......................... 55,052 23,696 -- 187
-------------------------------------------------------------
Total assets........................ 811,434,307 501,317,249 3,558,163 208,512,070
-------------------------------------------------------------
LIABILITIES
Payable for investment securities
purchased........................... 12,707,153 5,625,325 62,551 3,092,605
Payable for interests repurchased..... 722,136 418,684 10,509 162,345
Due to advisor........................ -- -- -- --
Accrued expenses...................... 776,486 449,345 12,699 170,673
Dividend Payable...................... -- -- -- --
Forward Currency Contracts............ -- -- -- --
Other Payables........................ -- 62,554 -- --
-------------------------------------------------------------
Total liabilities................... 14,205,775 6,555,908 85,759 3,425,623
-------------------------------------------------------------
NET ASSETS.............................. $ 797,228,532 $ 494,761,341 $ 3,472,404 $ 205,086,447
-------------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital....................... $ 396,047,330 $ 261,646,858 $ 2,856,982 $ 129,572,089
Accumulated net investment income
(deficit)........................... (11,781,536) (2,510,594) (1,507) 18,378,314
Accumulated net realized gain
(loss).............................. 151,840,829 141,435,842 440,546 24,927,632
Accumulated net realized foreign
exchange gain (loss)................ -- -- -- --
Net unrealized foreign exchange gain
(loss).............................. -- -- -- --
Net unrealized appreciation
(depreciation) on investments....... 261,121,909 94,189,235 176,383 32,208,412
-------------------------------------------------------------
Net assets.......................... $ 797,228,532 $ 494,761,341 $ 3,472,404 $ 205,086,447
-------------------------------------------------------------
* Investments, at cost................. $ 547,544,513 $ 401,888,777 $ 3,190,902 $ 174,243,323
-------------------------------------------------------------
** Foreign currencies, at cost.......... -- -- -- --
-------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
92
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
BALANCED MONEY EMERGING INTERNATIONAL
GROWTH GOVERNMENT MARKET COUNTRIES SMALL CAP
FUND INCOME FUND FUND FUND GROWTH FUND
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------
ASSETS
Investments, at value *............... $ 30,815,243 $ 6,085,228 $ 39,848,263 $ 263,786,353 $ 64,910,430
Foreign currencies, at value**........ 39 8 189,401 46,153
Cash.................................. 315 79,093 925 2,678 1,212
Receivable for investment securities
sold................................ 351,013 -- 3,336,889 959,042
Receivable for interests sold......... 2,112 -- -- 956,139 75,422
Dividends receivable.................. 4,807 1,461 -- 548,502 90,701
Interest receivable................... 132,915 89,806 377 598 117
Due from advisor...................... -- 5,663 -- -- --
Deferred organization costs........... 3,021 2,780 2,085 -- 405
Prepaid Expenses...................... 588 135 740 -- --
Other assets.......................... -- -- 87 6,901 1,442
-----------------------------------------------------------------------------
Total assets........................ 31,310,053 6,264,174 39,852,477 268,827,461 66,084,924
-----------------------------------------------------------------------------
LIABILITIES
Payable for investment securities
purchased........................... 522,750 -- -- 6,022,148 --
Payable for interests repurchased..... 10,632 18,926 -- 57,563 --
Due to advisor........................ -- -- -- --
Accrued expenses...................... 26,025 36,368 55,846 263,469 22,915
Dividend Payable...................... -- -- 244,048 -- --
Forward Currency Contracts............ 82,747 20,632 -- -- --
Other Payables........................ -- -- -- -- --
-----------------------------------------------------------------------------
Total liabilities................... 642,154 75,926 299,894 6,343,180 22,915
-----------------------------------------------------------------------------
NET ASSETS.............................. $ 30,667,899 $ 6,188,248 $ 39,552,583 $ 262,484,281 $ 66,062,009
-----------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital....................... $ 16,841,897 $ 4,807,882 $ 39,552,207 $ 210,726,060 $ 44,051,647
Accumulated net investment income
(deficit)........................... 2,337,379 1,278,741 -- 347,259 (107,792)
Accumulated net realized gain
(loss).............................. 4,031,799 21,807 376 20,252,633 10,798,689
Accumulated net realized foreign
exchange gain (loss)................ 119,339 7,471 -- (728,440) (338,747)
Net unrealized foreign exchange gain
(loss).............................. (82,597) (18,550) -- (15,898) (3,284)
Net unrealized appreciation
(depreciation) on investments....... 7,420,082 90,897 -- 31,902,667 11,661,496
-----------------------------------------------------------------------------
Net assets.......................... $ 30,667,899 $ 6,188,248 $ 39,552,583 $ 262,484,281 $ 66,062,009
-----------------------------------------------------------------------------
* Investments, at cost................. $ 23,395,161 $ 5,994,331 $ 39,848,263 $ 231,883,686 $ 53,248,934
-----------------------------------------------------------------------------
** Foreign currencies, at cost.......... $ 39 $ 8 -- $ 192,338 $ 48,789
-----------------------------------------------------------------------------
<CAPTION>
INTERNATIONAL WORLDWIDE
CORE GROWTH GROWTH
FUND FUND
<S> <C> <C>
ASSETS
Investments, at value *............... $ 45,940,345 $ 141,585,758
Foreign currencies, at value**........ -- 43,405
Cash.................................. 360 1,698
Receivable for investment securities
sold................................ 109,243 806
Receivable for interests sold......... 158,212 232,152
Dividends receivable.................. 52,678 239,485
Interest receivable................... -- 138
Due from advisor...................... -- 54,750
Deferred organization costs........... -- 3,474
Prepaid Expenses...................... -- --
Other assets.......................... 306 2,390
Total assets........................ 46,261,144 142,164,056
LIABILITIES
Payable for investment securities
purchased........................... 1,028,359 1,687,699
Payable for interests repurchased..... 2,324 364,941
Due to advisor........................ -- --
Accrued expenses...................... 31,170 197,468
Dividend Payable...................... -- --
Forward Currency Contracts............ -- --
Other Payables........................ -- --
Total liabilities................... 1,061,853 2,250,108
NET ASSETS.............................. $ 45,199,291 $ 139,913,948
COMPOSITION OF NET ASSETS
Paid-in capital....................... $ 40,711,623 $ 74,771,180
Accumulated net investment income
(deficit)........................... 30,082 439,155
Accumulated net realized gain
(loss).............................. 598,345 34,985,209
Accumulated net realized foreign
exchange gain (loss)................ (81,245) 351,205
Net unrealized foreign exchange gain
(loss).............................. (1,884) (8,742)
Net unrealized appreciation
(depreciation) on investments....... 3,942,370 29,375,941
Net assets.......................... $ 45,199,291 $ 139,913,948
* Investments, at cost................. $ 41,997,975 $ 112,209,817
** Foreign currencies, at cost.......... -- $ 45,090
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
93
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
NOTES TO THE FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS FOR THE NICHOLAS-APPLEGATE INVESTMENT TRUST
FOR THE PERIOD ENDED SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
EMERGING CORE LARGE CAP INCOME &
GROWTH GROWTH GROWTH GROWTH
FUND FUND FUND FUND
<S> <C> <C> <C> <C>
--------------------------------------------------------
INVESTMENT INCOME
Dividends............................. $ 793,458 $ 748,472 $ 5,455 $ 1,402,224
Interest.............................. 875,447 986,263 2,790 1,858,162
--------------------------------------------------------
Total income........................ 1,668,905 1,734,735 8,245 3,260,386
--------------------------------------------------------
EXPENSES
Advisory fee.......................... 3,137,539 1,688,653 7,691 585,852
Accounting fee........................ 170,338 131,621 11,645 50,921
Administration fee.................... 17,500 55,784 249 19,242
Audit & tax fees...................... 42,940 31,089 198 10,681
Custodian fee......................... 100,905 56,507 8,070 17,765
Insurance............................. 7,848 5,518 23 1,827
Legal fee............................. 3,434 2,487 9 854
Miscellaneous......................... 17,176 12,436 61 4,272
Organization costs.................... 4,270 7,791 -- 3,864
Trustees' fee......................... 3,260 3,260 3,260 3,260
--------------------------------------------------------
Total expense....................... 3,505,210 1,995,146 31,206 698,538
Less: Reimbursement to (from)
advisor............................. (21,466) 20,851
--------------------------------------------------------
Net expenses........................ 3,505,210 1,995,146 9,740 719,389
--------------------------------------------------------
Net investment income (deficit)... (1,836,305) (260,411) (1,495) 2,540,997
--------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) from security
transactions........................ 30,875,910 45,970,394 367,545 6,285,663
Net realized foreign exchange gain
(loss).............................. -- -- -- --
Net unrealized foreign exchange gain
(loss).............................. -- -- -- --
Change in net unrealized appreciation
(depreciation) of investments and
foreign currencies.................. 214,822,089 73,261,858 212,123 21,764,575
--------------------------------------------------------
Net gain (loss) on investments.... 245,697,999 119,232,252 579,668 28,050,238
--------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING
FROM OPERATIONS....................... $ 243,861,694 $ 118,971,841 $ 578,173 $ 30,591,235
--------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
94
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL INTERNATIONAL
BALANCED GOVERNMENT MONEY EMERGING SMALL CAP CORE
GROWTH INCOME MARKET COUNTRIES GROWTH GROWTH
FUND FUND FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends............................. $ 42,848 -- -- $ 2,056,127 $ 367,531 $ 113,240
Interest.............................. 356,709 $208,831 $ 1,258,252 239,137 33,088 43,834
-------------------------------------------------------------------------------
Total income........................ 399,557 208,831 1,258,252 2,295,264 400,619 157,074
-------------------------------------------------------------------------------
EXPENSES
Advisory fee.......................... 104,516 12,686 56,149 1,292,090 337,541 96,189
Accounting fee........................ 23,781 20,506 26,028 73,386 30,207 13,523
Administration fee.................... 3,449 789 5,507 25,441 8,380 2,294
Audit & tax fees...................... 1,921 441 3,117 14,110 4,677 1,793
Custodian fee......................... 11,848 8,840 11,106 210,883 71,519 6,100
Insurance............................. 363 71 386 2,386 830 199
Legal fee............................. 154 35 244 1,129 374 91
Miscellaneous......................... 768 176 1,221 5,644 1,871 548
Organization costs.................... 2,757 2,535 2,468 -- 150 --
Trustees' fee......................... 3,260 3,260 3,260 3,259 3,259 3,259
-------------------------------------------------------------------------------
Total expense....................... 152,817 49,339 109,486 1,628,328 458,808 123,996
Less: Reimbursement to (from)
advisor............................. (20,429) (30,311) (8,418) 25,547 (3,127) 5,860
-------------------------------------------------------------------------------
Net expenses........................ 132,388 19,028 101,068 1,653,875 455,681 129,856
-------------------------------------------------------------------------------
Net investment income (deficit)... 267,169 189,803 1,157,184 641,389 (55,062) 27,218
-------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) from security
transactions........................ 1,352,996 80,318 704 8,659,375 7,847,694 456,089
Net realized foreign exchange gain
(loss).............................. 119,339 7,471 -- (590,371) (332,467) (67,357)
Net unrealized foreign exchange gain
(loss).............................. (82,597) (18,550) -- (3,311) 3,382 (562)
Change in net unrealized appreciation
(depreciation) of investments and
foreign currencies.................. 5,444,310 213,805 -- 26,625,733 5,204,454 3,883,825
-------------------------------------------------------------------------------
Net gain (loss) on investments.... 6,834,048 283,044 704 34,691,426 12,723,063 4,271,995
-------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING
FROM OPERATIONS....................... $ 7,101,217 $472,847 $ 1,157,888 $ 35,332,815 $ 12,668,001 $4,299,213
-------------------------------------------------------------------------------
<CAPTION>
WORLDWIDE
GROWTH
FUND
<S> <C>
INVESTMENT INCOME
Dividends............................. $ 833,314
Interest.............................. 69,657
Total income........................ 902,971
EXPENSES
Advisory fee.......................... 606,536
Accounting fee........................ 41,224
Administration fee.................... 15,002
Audit & tax fees...................... 8,350
Custodian fee......................... 74,541
Insurance............................. 1,473
Legal fee............................. 668
Miscellaneous......................... 3,340
Organization costs.................... 3,157
Trustees' fee......................... 3,259
Total expense....................... 757,550
Less: Reimbursement to (from)
advisor............................. (29,707)
Net expenses........................ 727,843
Net investment income (deficit)... 175,128
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) from security
transactions........................ 11,702,311
Net realized foreign exchange gain
(loss).............................. (222,691)
Net unrealized foreign exchange gain
(loss).............................. 15,538
Change in net unrealized appreciation
(depreciation) of investments and
foreign currencies.................. 16,676,992
Net gain (loss) on investments.... 28,172,150
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING
FROM OPERATIONS....................... $ 28,347,278
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
95
<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
PERIOD ENDED FOR THE PERIOD ENDED FOR THE
SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED
1997 MARCH 31, 1997 MARCH 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
<S> <C> <C> <C> <C>
-----------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income (deficit)..... $ (1,836,305) $ (3,743,018) $ (260,411) $ (1,567,011)
Net realized gain (loss) from
security transactions and foreign
exchange.......................... 30,875,910 96,622,117 45,970,394 76,538,109
Change in net unrealized
appreciation (depreciation) of
investments and foreign
currency.......................... 214,822,089 (114,330,357) 73,261,858 (67,826,297)
-----------------------------------------------------------------
Net increase (decrease) in net
assets resulting from
operations...................... 243,861,694 (21,451,258) 118,971,841 7,144,801
-----------------------------------------------------------------
DISTRIBUTIONS TO PARTNERS
Net investment income............... -- -- -- --
-----------------------------------------------------------------
TRANSACTIONS IN INTERESTS
Contributions by partners........... 856,592,631 626,817,132 99,500,567 158,154,504
Withdrawals by partners............. (804,788,326) (687,889,723) (156,484,998) (153,067,978)
-----------------------------------------------------------------
Net increase (decrease) in net
assets from transactions in
interests....................... 51,804,305 (61,072,591) (56,984,431) 5,086,526
-----------------------------------------------------------------
Total increase (decrease) in net
assets........................ 295,665,999 (82,523,849) 61,987,410 12,231,327
NET ASSETS
BEGINNING OF PERIOD................... 501,562,533 584,086,382 432,773,931 420,542,603
-----------------------------------------------------------------
END OF PERIOD......................... $ 797,228,532 $ 501,562,533 $ 494,761,341 $ 432,773,931
-----------------------------------------------------------------
</TABLE>
- -------------
+ Commenced operations on December 27, 1996.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
96
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
LARGE CAP GROWTH FUND INCOME & GROWTH FUND BALANCED GROWTH FUND
-------------------------- ---------------------------- ---------------------------
FOR THE FOR THE FOR THE
PERIOD ENDED FOR THE PERIOD ENDED FOR THE PERIOD ENDED FOR THE
SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED
1997 MARCH 31, 1997 MARCH 31, 1997 MARCH 31,
(UNAUDITED) 1997+ (UNAUDITED) 1997 (UNAUDITED) 1997
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income (deficit)..... $ (1,495) $ (12) $ 2,540,997 $ 4,199,481 $ 267,169 $ 661,170
Net realized gain (loss) from
security transactions and foreign
exchange.......................... 367,545 73,001 6,285,663 15,692,945 1,472,335 1,969,019
Change in net unrealized
appreciation (depreciation) of
investments and foreign
currency.......................... 212,123 (35,740) 21,764,575 (3,821,355) 5,361,713 (768,824)
-------------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from
operations...................... 578,173 37,249 30,591,235 16,071,071 7,101,217 1,861,365
-------------------------------------------------------------------------------------
DISTRIBUTIONS TO PARTNERS
Net investment income............... -- -- -- -- -- --
-------------------------------------------------------------------------------------
TRANSACTIONS IN INTERESTS
Contributions by partners........... 2,234,347 1,347,861 57,798,093 34,105,984 3,007,351 8,738,263
Withdrawals by partners............. (659,274) (65,952) (13,954,283) (31,283,589) (4,452,639) (9,432,209)
-------------------------------------------------------------------------------------
Net increase (decrease) in net
assets from transactions in
interests....................... 1,575,073 1,281,909 43,843,810 2,822,395 (1,445,288) (693,946)
-------------------------------------------------------------------------------------
Total increase (decrease) in net
assets........................ 2,153,246 1,319,158 74,435,045 18,893,466 5,655,929 1,167,419
NET ASSETS
BEGINNING OF PERIOD................... 1,319,158 -- 130,651,402 111,757,936 25,011,970 23,844,551
-------------------------------------------------------------------------------------
END OF PERIOD......................... $3,472,404 $ 1,319,158 $ 205,086,447 $ 130,651,402 $30,667,899 $ 25,011,970
-------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
97
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
NOTES TO THE FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS FOR NICHOLAS-APPLEGATE INVESTMENT TRUST
<TABLE>
<CAPTION>
GOVERNMENT INCOME FUND MONEY MARKET FUND
---------------------------- -------------------------------
FOR THE FOR THE
PERIOD ENDED FOR THE PERIOD ENDED FOR THE
SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED
1997 MARCH 31, 1997 MARCH 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
<S> <C> <C> <C> <C>
--------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income (deficit)..... $ 189,803 $ 333,374 $ 1,157,184 $ 880,366
Net realized gain (loss) from
security transactions and foreign
exchange.......................... 87,789 (56,975) 704 (4)
Change in net unrealized
appreciation (depreciation) of
investments and foreign
currency.......................... 195,255 (49,150) -- --
--------------------------------------------------------------
Net increase (decrease) in net
assets resulting from
operations...................... 472,847 227,249 1,157,888 880,362
--------------------------------------------------------------
DISTRIBUTIONS TO PARTNERS
Net investment income............... -- -- (1,157,184) (880,366)
--------------------------------------------------------------
TRANSACTIONS IN INTERESTS
Contributions by partners........... 1,829,877 5,988,848 926,192,740 525,513,379
Withdrawals by partners............. (2,368,081) (4,440,486) (922,989,452) (492,338,631)
--------------------------------------------------------------
Net increase (decrease) in net
assets from transactions in
interests....................... (538,204) 1,548,362 3,203,288 33,174,748
--------------------------------------------------------------
Total increase (decrease) in net
assets........................ (65,357) 1,775,611 3,203,992 33,174,744
NET ASSETS
BEGINNING OF PERIOD................... 6,253,605 4,477,994 36,348,591 3,173,847
--------------------------------------------------------------
END OF PERIOD......................... $ 6,188,248 $ 6,253,605 $ 39,552,583 $ 36,348,591
--------------------------------------------------------------
</TABLE>
- -------------
+ Commenced operations on December 27, 1996.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
98
<PAGE>
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL INTERNATIONAL
EMERGING COUNTRIES FUND SMALL CAP GROWTH FUND CORE GROWTH FUND
---------------------------- --------------------------- --------------------------
FOR THE FOR THE FOR THE
PERIOD ENDED FOR THE PERIOD ENDED FOR THE PERIOD ENDED FOR THE
SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, YEAR ENDED
1997 MARCH 31, 1997 MARCH 31, 1997 MARCH 31,
(UNAUDITED) 1997 (UNAUDITED) 1997 (UNAUDITED) 1997+
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income (deficit)..... $ 641,389 $ (342,535) $ (55,062) $ (163,117) $ 27,218 $ 2,864
Net realized gain (loss) from
security transactions and foreign
exchange.......................... 8,069,004 11,736,516 7,515,227 2,969,008 388,732 128,368
Change in net unrealized
appreciation (depreciation) of
investments and foreign
currency.......................... 26,622,422 3,885,820 5,207,836 3,916,968 3,883,263 57,223
-------------------------------------------------------------------------------------
Net increase (decrease) in net
assets resulting from
operations...................... 35,332,815 15,279,801 12,668,001 6,722,859 4,299,213 188,455
-------------------------------------------------------------------------------------
DISTRIBUTIONS TO PARTNERS
Net investment income............... -- -- -- -- -- --
-------------------------------------------------------------------------------------
TRANSACTIONS IN INTERESTS
Contributions by partners........... 91,518,985 143,835,272 30,758,007 37,692,390 37,822,378 4,487,783
Withdrawals by partners............. (22,704,403) (20,677,175) (40,250,543) (5,334,333) (1,591,176) (7,362)
-------------------------------------------------------------------------------------
Net increase (decrease) in net
assets from transactions in
interests....................... 68,814,582 123,158,097 (9,492,536) 32,358,057 36,231,202 4,480,421
-------------------------------------------------------------------------------------
Total increase (decrease) in net
assets........................ 104,147,397 138,437,898 3,175,465 39,080,916 40,530,415 4,668,876
NET ASSETS
BEGINNING OF PERIOD................... 158,336,884 19,898,986 62,886,544 23,805,628 4,668,876 --
-------------------------------------------------------------------------------------
END OF PERIOD......................... $ 262,484,281 $ 158,336,884 $ 66,062,009 $ 62,886,544 $45,199,291 $ 4,668,876
-------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
99
<PAGE>
NICHOLAS-APPLEGATE MUTUAL FUNDS
NOTES TO THE FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS FOR NICHOLAS-APPLEGATE INVESTMENT TRUST
<TABLE>
<CAPTION>
WORLDWIDE GROWTH FUND
-----------------------------
FOR THE
PERIOD ENDED FOR THE
SEPTEMBER 30, YEAR ENDED
1997 MARCH 31,
(UNAUDITED) 1997
<S> <C> <C>
-----------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income (deficit)..... $ 175,128 $ (281,315)
Net realized gain (loss) from
security transactions and foreign
exchange.......................... 11,479,620 15,454,490
Change in net unrealized
appreciation (depreciation) of
investments and foreign
currency.......................... 16,692,530 (2,455,733)
-----------------------------
Net increase (decrease) in net
assets resulting from
operations...................... 28,347,278 12,717,442
-----------------------------
DISTRIBUTIONS TO PARTNERS
Net investment income............... -- --
-----------------------------
TRANSACTIONS IN INTERESTS
Contributions by partners........... 62,930,452 34,174,758
Withdrawals by partners............. (55,179,158) (43,419,850)
-----------------------------
Net increase (decrease) in net
assets from transactions in
interests....................... 7,751,294 (9,245,092)
-----------------------------
Total increase (decrease) in net
assets........................ 36,098,572 3,472,350
NET ASSETS
BEGINNING OF PERIOD................... 103,815,376 100,343,026
-----------------------------
END OF PERIOD......................... $ 139,913,948 $ 103,815,376
-----------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
100
<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 eighteen investment vehicles (each a "Fund" and collectively the
"Funds") as of September 30, 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.
Large Cap Growth Fund seeks to maximize long-term capital appreciation through
investment primarily in equity securities of U.S. companies with market
capitalizations above $3 billion whose earnings and prices are expected to grow
faster than the Standard & Poor's 500 Stock Price Index.
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 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 and
NASDAQ national market system securities) or the mean between the closing bid
and asked prices (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.
- --------------------------------------------------------------------------------
101
<PAGE>
NICHOLAS-APPLEGATE INVESTMENT TRUST
NOTES TO THE FUND'S FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
Securities transactions are accounted for on the trade date. Realized gains
and losses from securities transactions are reported on an identified cost
basis. Dividend income is recognized on the ex-dividend date, except that
certain dividends from foreign securities are recorded as soon as the
information is available to the Funds. Interest income is recorded on the
accrual basis. Discounts and premiums on securities purchased are amortized over
the life of the respective securities.
FOREIGN CURRENCY TRANSLATIONS
Values of investments denominated in foreign currencies are converted into
U.S. dollars using the spot market rate of exchange at the time of valuation.
Purchases and sales of investments and dividend and interest income are
translated into U.S. dollars using the spot market rate of exchange prevailing
on the respective dates of such translations. The gain or loss resulting from
changes in foreign exchange rates is included with net realized and unrealized
gain or loss from investments, as appropriate.
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 respective Fund 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 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%
Large Cap 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'
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 or 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.
- --------------------------------------------------------------------------------
102
<PAGE>
NICHOLAS-APPLEGATE INVESTMENT TRUST
NOTES TO THE FUND'S FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
The cumulative unreimbursed amounts paid by Nicholas-Applegate on behalf of
the Funds, during the period from inception (respectively) to September 30,
1997, are as follows:
<TABLE>
<CAPTION>
FUND
- -----------------------------------------------
<S> <C>
Large Cap Growth Fund.......................... $ 21,466
Balanced Growth Fund........................... 265,300
Government Income Fund......................... 285,988
Money Market Fund.............................. 290,319
Emerging Countries Fund........................ 86,226
International Small Cap Growth Fund............ 198,784
International Core Growth Fund................. 5,860
Worldwide Growth Fund.......................... 263,630
</TABLE>
C. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of investment securities, other than
short-term obligations, for the six month period ended September 30, 1997, were
as follows (in 000's):
<TABLE>
<CAPTION>
FUND PURCHASES SALES
- -------------------------------- ----------- -----------
<S> <C> <C>
Emerging Growth Fund............ $ 354,023 $ 288,342
Core Growth Fund................ 428,265 500,283
Large Cap Growth Fund........... 6,736 5,253
Income & Growth Fund............ 158,609 115,889
Balanced Growth Fund............ 37,169 37,973
Government Income Fund.......... 10,030 8,287
Emerging Countries Fund......... 277,080 208,710
International Small Cap Growth
Fund.......................... 67,445 76,182
International Core Growth
Fund.......................... 52,815 16,126
Worldwide Growth Fund........... 110,994 106,683
</TABLE>
At September 30, 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>
NET
GROSS GROSS UNREALIZED
TAX COST OF UNREALIZED UNREALIZED APPRECIATION
FUND INVESTMENTS APPRECIATION DEPRECIATION (DEPRECIATION)
- ------------- ----------- ----------- ------------- -------------
<S> <C> <C> <C> <C>
Emerging
Growth
Fund....... $ 547,545 $ 265,560 $ 4,439 $ 261,121
Core Growth
Fund....... 401,887 96,527 2,338 94,189
Large Cap
Growth
Fund....... 3,191 213 37 176
Income &
Growth
Fund....... 174,243 32,620 412 32,208
Balanced
Growth
Fund....... 23,395 7,472 135 7,337
Government
Income
Fund....... 5,994 80 8 72
Money Market
Fund....... 39,848 -- -- --
Emerging
Countries
Fund....... 232,076 36,643 4,757 31,886
International
Small Cap
Growth
Fund....... 53,298 13,084 1,426 11,658
International
Core Growth
Fund....... 41,998 4,186 246 3,940
Worldwide
Growth
Fund....... 112,255 30,058 691 29,367
</TABLE>
- --------------------------------------------------------------------------------
103
<PAGE>
NICHOLAS-APPLEGATE INVESTMENT TRUST
NOTES TO THE FUND'S FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
D. OFF BALANCE SHEET 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.
- --------------------------------------------------------------------------------
104
<PAGE>
NICHOLAS-APPLEGATE INVESTMENT TRUST
NOTES TO THE FUNDS' FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
E. SELECTED RATIO DATA
<TABLE>
<CAPTION>
RATIO OF NET
RATIO OF RATIO OF INVESTMENT RATIO OF NET
EXPENSES TO EXPENSES TO INCOME INVESTMENT
AVERAGE NET AVERAGE NET (DEFICIT) TO INCOME (DEFICIT)
ASSETS, ASSETS, AVERAGE NET TO AVERAGE NET
AFTER BEFORE ASSETS, AFTER ASSETS, BEFORE
EXPENSE EXPENSE 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 period ended
09/30/97*#................ 1.12% 1.12% (0.59%) (0.59%) 46.99% $0.0531
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 period ended
09/30/97*#................ 0.89% 0.89% (0.12%) (0.12%) 99.41% $0.0581
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% --
LARGE CAP GROWTH(3)
For the period ended
09/30/97*#................ 0.95% 3.04% (0.15%) 2.24% 269.87% $0.0599
INCOME & GROWTH(2)
For the period ended
09/30/97*#................ 0.92% 0.89% 3.25% 3.28% 76.54% $0.0599
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 period ended
09/30/97*#................ 0.95% 1.10% 1.92% 1.77% 136.75% $0.0600
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 period ended
09/30/97*#................ 0.60% 1.56% 5.98% 5.03% 133.34% --
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 period ended
09/30/97*#................ 0.45% 0.49% 5.15% 5.11% n/a --
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(4)
For the period ended
09/30/97*#................ 1.60% 1.58% 0.62% 0.65% 119.86% $0.0022
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(5)
For the period ended
09/30/97*#................ 1.35% 1.36% (0.16%) (0.17%) 103.72% $0.0091
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(3)
For the period ended
09/30/97*#................ 1.35% 1.29% 0.28% 0.34% 89.81% $0.0111
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 period ended
09/30/97*#................ 1.20% 1.25% 0.29% 0.24% 90.09% $0.0111
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 December 27, 1996.
(4) Commenced operations on November 28, 1994.
(5) Commenced operations on December 31, 1993.
* Annualized
# Unaudited
- --------------------------------------------------------------------------------
105
<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-Registered Trademark-
MUTUAL FUNDS
600 West Broadway
San Diego, California 92101
800 - 551 - 8643
Nicholas-Applegate Securities, Distributor
www.nacm.com
