<PAGE>
NICHOLAS-APPLEGATE-Registered
Trademark-
INSTITUTIONAL FUNDS
Annual Report
Institutional Shares
MARCH 31, 2000
<PAGE>
LETTER TO SHAREHOLDERS
------------------------------------------------------------------------
DEAR FELLOW SHAREHOLDER,
We are pleased to bring you the Nicholas-Applegate Institutional Funds Annual
Report for fiscal year ended March 31, 2000. During the period, we
commemorated the close of the millennium amid unparalleled developments in the
world's capital markets. The year also marked a successful celebration of
Nicholas-Applegate's 15th year anniversary.
In the United States, a strong economy, subdued inflation and the robust
growth in technology and telecommunications drove unprecedented gains in the
equity market. 1999 capped the best decade ever for US stock investors. The S&P
500 Index climbed 433.0% or 18.2% on an annualized basis -- for the decade.
Strong returns among technology stocks helped growth stocks significantly
outperform value stocks, especially within the smaller-cap segment. Spurred by
accelerating growth in wireless communications and Internet-related commerce,
technology stocks emerged as investor favorites for the most part of the period.
Despite a sell-off triggered by concerns over high valuations in the sector
toward the end of the fiscal year, we believe technology will continue to play
an important role in driving global economic growth in years to come.
Overseas, signs of economic re-acceleration, corporate restructurings, strong
growth in technology and telecommunications, as well as brisk merger and
acquisition activity boosted returns for stocks in Europe, Japan and emerging
markets. Favorable developments in international markets have created a global
market environment with unmatched opportunities. For instance, in 1970, the US
market accounted for 66% of the world's market capitalization. Today, the United
States represents less than half.
Fixed income markets were negatively affected by rising short-term interest
rates during much of the period. The Federal Reserve raised short-term interest
rates five times in the fiscal year. At the same time, inflation remained
subdued despite investor worries. US economic growth was solid and the Fed
remains committed to fighting inflation -- all positive signs for bonds over the
long-term.
It was in this dynamic market environment that Nicholas-Applegate celebrated
its 15th anniversary in 1999. Over the last 12 months, Nicholas-Applegate has
continued to achieve solid performance results by adhering to our investment
philosophy and process. To ensure continued strong performance and dedicated
client service, we implemented a number of initiatives during the fiscal year.
These include hiring additional talented professionals across various areas of
the firm and enhancing infrastructure to strengthen our position as a leader in
investment technology.
As we continue to sharpen our competitive focus, I believe Nicholas-Applegate
is better positioned to deliver superior long-term performance results and
responsive client service than at any point in our 15-year history.
And as we mark the beginning of a new century, we look forward to the
opportunity to contribute to the success of your investment goals. Thank you for
your support of the Nicholas-Applegate Institutional Funds. We welcome your
comments and look forward to continuing our work with you in the coming years.
Sincerely Yours,
/S/ ART NICHOLAS
Art Nicholas
Chairman
--------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
The Funds' Review and Outlook, Performance and Schedule of
Investments
Worldwide Growth.......................................... 1
Global Blue Chip.......................................... 7
Global Growth & Income.................................... 12
Global Technology......................................... 17
Global Health Care........................................ 22
International Core Growth................................. 26
International Small Cap Growth............................ 32
Emerging Countries........................................ 38
Pacific Rim............................................... 43
Latin America............................................. 47
Large Cap Growth.......................................... 51
Mid Cap Growth............................................ 54
Small Cap Growth.......................................... 58
Mini Cap Growth........................................... 66
Value..................................................... 71
Convertible............................................... 75
Short Intermediate........................................ 80
High Quality Bond......................................... 85
High Yield Bond........................................... 92
The Funds'
Financial Highlights...................................... 98
Statement of Assets and Liabilities....................... 104
Statement of Operations................................... 108
Statement of Changes in Net Assets........................ 112
Notes to the Financial Statements......................... 119
Report of Independent Auditors............................ 127
</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 Institutional Funds. Distributor: Nicholas-Applegate
Securities.
<PAGE>
WORLDWIDE GROWTH FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: ANDREW B. GALLAGHER, Partner, Portfolio Manager; LORETTA J.
MORRIS, Partner, Portfolio Manager; RANDALL S. KAHN, CFA, Portfolio Manager;
LAWRENCE S. SPEIDELL, CFA, Partner, Director of Global/Systematic Portfolio
Management and Research; PEDRO V. MARCAL, Partner, Portfolio Manager; ERNESTO
RAMOS, PH.D., Portfolio Manager; MELISA A. GRIGOLITE, Portfolio Manager.
CHIEF INVESTMENT OFFICER: CATHERINE SOMHEGYI
GOAL: The Worldwide Growth Fund seeks to maximize long-term capital
appreciation through investment in growth-oriented companies around the world
including the United States.
MARKET OVERVIEW: World stock markets surged in the 12-month period ended
March 31, 2000.
US stocks performed well despite the fact that during the fiscal year, the
Federal Reserve hiked interest rates on five separate occasions by a total of
1.25%. Investor concerns over higher rates were offset by optimism about the
vigorous economy, strong corporate earnings and productivity gains. These
positive factors propelled US stocks higher, particularly technology issues.
Mirroring the trend in the United States, overseas markets also profited from
investors' continued preference for technology names.
In developed non-US countries, stocks benefited from improving economies and
an increased focus by corporate managements on enhancing shareholder value.
Restructurings and record levels of merger and acquisition activity
characterized European markets. Amid renewed inflationary pressures in its
region, the European Central Bank raised key short-term interest rates for the
11 countries in the European Monetary Union in November 1999 and March 2000.
Stocks in Japan, the world's second largest economy, posted solid gains. The
MSCI Japan Index climbed 45.1% in the fiscal year, driven by signs of a pick-up
in economic growth, increased consumer confidence and structural reform.
Structural reforms were also implemented in many of the emerging countries of
the world, paving the way for solid stock market returns.
PERFORMANCE: For the 12-month period ended March 31, 2000, the fund was up
73.8% versus 21.9% for the MSCI World Index.
PORTFOLIO SPECIFICS: Stock selection, particularly in the technology sector,
contributed to outperformance during the period. In the United States, some of
the fund's top performers were Cisco, a leading supplier of networking products
and services, and Qualcomm, a provider of digital wireless communications
products, technologies and services based on its Code Division Multiple Access
(CDMA) technology. Overseas, major contributors to performance included NTT
Mobile Communications Network, a Japanese wireless communications company; ARM
Holdings PLC, a UK-based designer of reduced instruction set computing (RISC)
microprocessors; and Biovail, a global pharmaceutical company located in Canada.
MARKET OUTLOOK: Many of the positive themes driving gains in worldwide stock
markets during the period remain intact, specifically:
- Accelerating economic growth and corporate profitability
- Heightened interest in technology and wireless communications, which drives
productivity gains
- The brisk pace of mergers and acquisitions activity
- Ongoing trends of deregulation and privatization
All of these factors bode well for continued strength in global markets,
creating exciting investment opportunities for the Worldwide Growth Fund.
--------------------------------------------------------------------------------
1
<PAGE>
WORLDWIDE GROWTH FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN WORLDWIDE GROWTH FUND
INSTITUTIONAL SHARES WITH THE MSCI WORLD INDEX.
<TABLE>
<S> <C> <C>
ANNUALIZED TOTAL RETURNS
As of 3/31/00 SINCE
1 YEAR 5 YEARS INCEPTION
73.81% 33.84% 26.57%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WORLDWIDE GROWTH FUND INSTITUTIONAL SHARES MSCI WORLD INDEX
<S> <C> <C>
4/19/93 $250,000.00 $250,000.00
4/93 252,968.04 253,551.70
5/93 264,155.25 259,332.68
6/93 263,470.32 257,076.48
7/93 266,210.05 262,320.84
8/93 284,018.26 274,282.68
9/93 284,474.89 269,143.44
10/93 285,388.13 276,491.06
11/93 268,493.15 260,814.01
12/93 286,073.06 273,515.66
1/94 307,534.25 291,485.63
2/94 306,849.32 287,667.17
3/94 300,228.31 275,182.42
4/94 306,392.69 283,630.52
5/94 300,228.31 284,311.23
6/94 295,205.48 283,458.30
7/94 302,968.04 288,787.31
8/94 315,296.80 297,422.05
9/94 310,730.59 289,540.37
10/94 312,328.77 297,734.36
11/94 297,031.96 284,753.14
12/94 294,624.53 287,458.30
1/95 283,169.45 283,060.19
2/95 290,729.80 287,119.27
3/95 299,206.56 300,441.60
4/95 310,890.73 310,836.88
5/95 310,890.73 313,416.83
6/95 316,618.27 313,260.12
7/95 339,070.22 328,421.91
8/95 338,153.81 321,032.42
9/95 346,630.57 330,310.26
10/95 334,946.39 325,025.29
11/95 337,924.71 336,238.66
12/95 339,841.23 345,989.58
1/96 343,811.88 352,182.80
2/96 350,818.92 354,260.68
3/96 360,161.63 360,070.55
4/96 383,284.85 368,460.20
5/96 387,489.07 368,718.12
6/96 385,153.39 370,524.84
7/96 364,599.42 357,371.21
8/96 373,007.86 361,409.50
9/96 385,620.53 375,468.33
10/96 385,854.09 378,021.51
11/96 403,887.01 399,115.11
12/96 402,739.61 392,649.45
1/97 416,508.48 397,321.98
2/97 412,205.71 401,811.72
3/97 407,616.08 393,775.48
4/97 417,655.89 406,573.19
5/97 444,333.08 431,577.44
6/97 468,715.47 453,026.83
7/97 503,998.21 473,820.77
8/97 476,173.61 442,027.39
9/97 515,185.42 465,985.28
10/97 473,305.09 441,381.25
11/97 473,717.48 449,105.43
12/97 474,947.92 454,494.69
1/98 485,099.00 467,084.19
2/98 518,320.75 498,603.04
3/98 550,619.67 519,594.22
4/98 570,306.63 524,592.72
5/98 571,844.67 517,940.88
6/98 588,763.15 530,164.29
7/98 597,902.68 529,209.99
8/98 500,111.79 458,560.46
9/98 510,612.83 466,585.27
10/98 538,178.05 508,671.26
11/98 579,280.14 538,835.46
12/98 655,343.88 565,076.75
1/99 711,146.09 577,395.43
2/99 692,545.35 561,978.97
3/99 739,379.36 585,301.09
4/99 771,930.65 608,303.43
5/99 762,298.12 585,990.86
6/99 816,107.40 613,239.43
7/99 822,086.21 611,319.99
8/99 823,746.99 610,152.37
9/99 836,701.08 604,154.57
10/99 888,517.42 635,449.78
11/99 1,006,432.82 653,244.28
12/99 1,223,995.03 706,026.42
1/00 1,150,256.38 665,513.92
2/00 1,308,030.51 667,228.95
3/31/00 1,285,111.74 713,267.74
</TABLE>
The graph above shows the value of a hypothetical $250,000 investment in the
Fund's Class I shares compared with the Morgan Stanley Capital International
("MSCI") World Index over the periods indicated. The Fund's Class I shares
calculate their performance based upon the historical performance of their
corresponding series of Nicholas-Applegate Mutual Funds (renamed Pilgrim Mutual
Funds), adjusted to reflect all fees and expenses applicable to the Fund's Class
I shares. The Nicholas-Applegate Institutional Funds' Class I shares were first
available on May 7, 1999. Average annual total return figures include changes in
principal value, reinvested dividends, and capital gain distributions. Absent
expense limitations, total returns would have been slightly lower. Past
performance cannot guarantee future results.
The unmanaged MSCI World Index tracks the performance of approximately 1,450
securities representing the stock markets of 22 countries, and is designed to
measure stock market performance. The unmanaged Index differs from the Fund in
composition, does not pay management fees or expenses and includes reinvested
dividends. One cannot invest directly in an index.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions, currency volatility and the social,
economic and political climates of countries where the Fund invests. You may
have a gain or loss when you sell your shares.
--------------------------------------------------------------------------------
2
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000
------------------------------------------------------------------------
WORLDWIDE GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
--------------------------------------------------------------
COMMON STOCK -- 96.0%
--------------------------------------------------------------
AUSTRALIA -- 0.4%
News Corp., Ltd. -- ADR......... 13,600 $ 765,000
------------
BELGIUM -- 0.4%
Fortis (B)...................... 31,000 794,993
------------
BRAZIL -- 0.9%
Petroleo Brasileiro S.A. --
ADR........................... 24,400 664,182
Tele Norte Leste Participacoes
S.A. -- ADR................... 20,700 551,138
Telesp Celular Participacoes
S.A. -- ADR................... 8,400 476,175
------------
1,691,495
------------
CANADA -- 5.4%
Abitibi Consolidated, Inc....... 54,300 519,244
Anderson Exploration, Ltd.*..... 35,600 514,947
Ballard Power Systems, Inc.*.... 9,500 802,750
Biovail International Corp.*.... 14,600 646,963
Bombardier, Inc. Cl. B.......... 20,900 524,731
Certicom Corp.*................. 12,500 1,257,491
Nortel Networks Corp............ 38,100 4,800,599
Precision Drilling Corp.*....... 18,700 624,113
QLT PhotoTherapeutics, Inc.*.... 9,500 524,875
------------
10,215,713
------------
DENMARK -- 0.6%
Tele Denmark AS................. 12,000 1,079,622
------------
FINLAND -- 3.6%
Helsingin Puhelin OYJ Series
E............................. 16,400 1,585,009
Nokia OYJ -- ADR*............... 21,000 4,562,250
Sonera Group OYJ Cl. R.......... 8,700 593,575
------------
6,740,834
------------
FRANCE -- 5.3%
Alcatel......................... 3,500 767,960
Bouygues........................ 1,280 1,014,161
Dassault Systemes S.A. --
ADR*.......................... 4,500 409,500
Genset S.A. -- ADR*............. 8,800 285,863
Lagardere S.C.A................. 12,400 1,006,793
Pechiney S.A. Cl. A............. 8,700 426,658
Rhodia S.A...................... 21,400 382,932
Societe Television Francaise
1............................. 3,000 2,210,439
Total Fina Elf S.A.*............ 11,837 1,772,648
Vivendi S.A..................... 14,600 1,683,474
------------
9,960,428
------------
GERMANY -- 3.1%
Bayerische Motoren Werke AG..... 21,300 671,586
EM.TV & Merchandising AG........ 12,600 1,024,840
Epcos AG*....................... 10,400 1,373,343
Intershop Communications AG*.... 2,300 1,159,858
Siemens AG...................... 5,700 820,877
Thyssen Krupp AG*............... 31,800 783,558
------------
5,834,062
------------
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
HONG KONG -- 0.9%
China Telecom (Hong Kong), Ltd.
-- ADR*....................... 2,800 $ 496,300
HSBC Holdings PLC............... 44,800 523,573
Hutchison Whampoa, Ltd.......... 34,000 613,498
------------
1,633,371
------------
HUNGARY -- 0.3%
Matav Tovkozlesi -- ADR......... 13,100 584,588
------------
ITALY -- 1.8%
Alleanza Assicurazioni SpA*..... 48,000 471,254
Mediaset SpA*................... 75,100 1,491,880
Telecom Italia Mobile SpA*...... 62,800 770,396
Telecom Italia SpA*............. 46,200 689,657
------------
3,423,187
------------
JAPAN -- 6.3%
FANUC, Ltd...................... 10,600 1,112,036
Ito-Yokado Co., Ltd............. 9,000 644,079
Keyence Corp.................... 2,000 799,493
Murata Manufacturing Co.,
Ltd........................... 3,000 729,781
Nippon Telegraph and Telephone
Corp.......................... 35 556,233
Nomura Securities Co., Ltd...... 30,000 979,866
NTT DoCoMo, Inc................. 35 1,436,651
Softbank Corp................... 1,300 1,159,752
Sony Corp....................... 4,200 593,770
Sony Corp. -- ADR............... 4,500 1,260,563
Sony Corp. (New Shares)......... 4,200 597,865
TDK Corp........................ 5,000 681,519
Tokyo Electron, Ltd............. 3,000 453,371
Toyoda Gosei Co., Ltd........... 12,000 877,492
------------
11,882,471
------------
MEXICO -- 0.8%
Telefonos de Mexico S.A. --
ADR........................... 23,100 1,547,700
------------
NETHERLANDS -- 5.1%
ASM Lithography Holding N.V. --
ADR*.......................... 13,400 1,497,450
Equant N.V.*.................... 5,800 481,187
Equant N.V. Regd.*.............. 7,300 620,956
Koninklijke Philips Electronics
N.V. --
ADR........................... 8,800 1,507,550
KPN N.V......................... 14,800 1,694,498
KPNQwest N.V. Series C*......... 16,000 851,258
Qiagen N.V.*.................... 1,900 272,717
STMicroelectronics N.V.......... 7,100 1,329,031
United Pan-Europe Communications
N.V.*......................... 18,100 845,730
VNU N.V......................... 8,400 494,736
------------
9,595,113
------------
PORTUGAL -- 0.5%
Portugal Telecom S.A............ 72,700 932,193
------------
RUSSIA -- 0.3%
OAO Lukoil Holding -- ADR....... 8,000 499,200
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
3
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000 -- CONTINUED
--------------------------------------------------------------------------------
WORLDWIDE GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK (Continued)
---------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
SINGAPORE -- 1.0%
Chartered Semiconductor
Manufacturing, Ltd.*.......... 102,000 $ 966,033
Flextronics International,
Ltd.*......................... 13,800 972,038
------------
1,938,071
------------
SOUTH KOREA -- 0.7%
Korea Electric Power Corp....... 22,400 638,408
Samsung Electronics -- GDR...... 2,410 730,468
------------
1,368,876
------------
SPAIN -- 2.1%
Altadis S.A..................... 83,000 1,111,918
Banco Santander Central
Hispano....................... 82,000 881,171
Endesa S.A...................... 37,500 860,133
Telefonica S.A.................. 48,000 1,212,584
------------
4,065,806
------------
SWEDEN -- 2.6%
LM Ericsson Telephone Co. Cl. B
-- ADR........................ 25,100 2,354,694
NetCom AB*...................... 8,800 758,796
Skandia Forsakrings AB.......... 38,300 1,813,044
------------
4,926,534
------------
SWITZERLAND -- 0.3%
UBS AG*......................... 2,000 525,651
------------
UNITED KINGDOM -- 10.8%
ARM Holdings PLC -- ADR*........ 9,000 1,599,750
BG Group PLC.................... 111,000 625,529
Billiton PLC.................... 163,200 766,089
British Aerospace PLC........... 124,384 702,441
British Airways PLC............. 130,700 687,026
British Telecom PLC ORD......... 38,000 712,301
Cable & Wireless PLC............ 37,300 700,965
Centrica PLC.................... 327,100 1,249,765
CMG PLC......................... 21,600 1,852,488
Colt Telecom Group PLC*......... 18,100 861,917
Energis PLC*.................... 8,600 401,023
Invensys PLC.................... 291,000 1,292,887
Logica PLC...................... 13,800 462,538
Marconi PLC..................... 31,300 373,997
Nycomed Amersham PLC............ 22,900 187,046
Pearson PLC..................... 23,100 803,730
Reuters Group PLC -- ADR........ 8,100 966,938
Rolls-Royce PLC................. 119,000 385,851
Shell Transport & Trading Co.... 159,900 1,326,460
Shire Pharmaceuticals PLC --
ADR*.......................... 15,100 773,875
Thus PLC*....................... 59,400 443,954
Vodafone AirTouch PLC........... 585,352 3,254,336
------------
20,430,906
------------
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
UNITED STATES -- 42.8%
Aether Systems, Inc.*........... 8,900 $ 1,615,350
Agilent Technologies, Inc.*..... 21,800 2,267,200
Amdocs, Ltd.*................... 17,800 1,311,638
Amgen, Inc.*.................... 34,700 2,129,713
Applied Materials, Inc.*........ 32,400 3,053,699
AT&T Corp....................... 48,600 2,733,750
AT&T Corp.-Liberty Media
Group Cl. A*.................. 49,000 2,903,250
Charles Schwab Corp............. 26,100 1,482,806
Chase Manhattan Corp............ 28,400 2,476,125
CIENA Corp.*.................... 10,700 1,349,538
Cisco Systems, Inc.*............ 40,400 3,123,424
Citigroup, Inc.................. 50,900 3,019,006
Corning, Inc.................... 15,300 2,968,200
Dell Computer Corp.*............ 59,100 3,187,705
Efficient Networks, Inc.*....... 8,700 1,355,025
Enron Corp...................... 39,500 2,957,563
Genentech, Inc.*................ 15,400 2,340,800
General Motors Corp. Cl. H*..... 20,100 2,502,450
Home Depot, Inc................. 41,450 2,673,525
Intel Corp...................... 24,100 3,179,694
MGM Grand, Inc.................. 132,700 3,184,799
Motorola, Inc................... 17,200 2,448,850
Nextel Communications, Inc. Cl.
A*............................ 19,600 2,905,700
Nextel Partners, Inc. Cl. A*.... 26,400 765,600
Oracle Corp.*................... 38,900 3,036,630
Qwest Communications
International, Inc.*.......... 58,400 2,832,400
Schlumberger, Ltd............... 47,400 3,626,100
Sun Microsystems, Inc.*......... 30,600 2,867,315
Texas Instruments, Inc.......... 18,700 2,992,000
TIBCO Software, Inc.*........... 3,300 268,950
Veritas Software Corp.*......... 19,500 2,554,500
Wal-Mart Stores, Inc............ 53,100 2,947,050
Weatherford International,
Inc.*......................... 28,200 1,662,038
------------
80,722,393
------------
TOTAL COMMON STOCK
(Cost: $125,849,130)......................... 181,158,207
------------
--------------------------------------------------------------
PREFERRED STOCK -- 1.2%
--------------------------------------------------------------
BRAZIL -- 0.2%
Banco Bradesco S.A.............. 47,636,000 392,553
------------
GERMANY -- 1.0%
Prosieben Media AG.............. 6,300 720,402
SAP AG.......................... 1,600 1,152,108
------------
1,872,510
------------
TOTAL PREFERRED STOCK
(Cost: $2,362,521)........................... $ 2,265,063
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
4
<PAGE>
-------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------
<S> <C> <C>
FOREIGN CORPORATE BOND -- 0.0%
--------------------------------------------------------------
UNITED KINGDOM -- 0.0%
British Aerospace PLC
7.450%, 11/29/03
(Cost: $2).................... $ 1 $ 2
------------
--------------------------------------------------------------
TIME DEPOSIT -- 0.7%
--------------------------------------------------------------
HSBC Holdings PLC
5.625%, 04/03/00
(Cost: $1,359,964)............ 1,359,964 1,359,964
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 97.9%
(Cost: $129,571,617)........................ 184,783,236
OTHER ASSETS IN EXCESS OF LIABILITIES --
2.1%.......................................... 3,947,364
------------
NET ASSETS -- 100.0%.......................... $188,730,600
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
5
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF MARCH 31, 2000
------------------------------------------------------------------------
WORLDWIDE GROWTH FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Aerospace/Defense............... 0.6%
Airlines........................ 0.4
Audio/Video Products............ 1.0
Auto Manufacturers.............. 1.7
Auto Parts & Equipment.......... 0.5
Banking......................... 0.7
Biotechnology................... 2.7
Broadcasting.................... 2.1
Building & Construction......... 0.5
Chemicals....................... 0.2
Commercial Banks................ 0.7
Computer Services............... 1.4
Computer Software............... 4.2
Computers....................... 4.9
Diversified Financial
Services...................... 2.5
Diversified Manufacturing....... 3.4
Diversified Operations.......... 1.8
Drilling........................ 0.3
Drugs/Pharmaceuticals........... 1.0
Electronic
Components/Semiconductors..... 10.2
Electronics..................... 0.7
Energy.......................... 1.2
Insurance....................... 1.2
Internet Software............... 0.8
Investment Companies............ 1.4
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Leisure/Gaming.................. 1.7%
Machinery....................... 1.6
Medical Products................ 0.1
Metal Fabrication & Hardware.... 0.2
Mining.......................... 0.4
Money Center Banks.............. 1.9
Multimedia...................... 1.3
Networking Products............. 1.7
Oil & Gas Producers............. 2.5
Oil & Gas Services.............. 3.8
Paper & Related Products........ 0.3
Pipelines....................... 1.6
Publishing...................... 0.3
Retail - Building Products...... 1.4
Retail - Discount............... 1.6
Retail - Miscellaneous.......... 0.3
Telecommunications.............. 16.8
Telecommunications Equipment.... 10.4
Telecommunications Services..... 0.5
Television...................... 2.8
Tobacco......................... 0.6
Other Assets in Excess of
Liabilities................... 2.1
-----
NET ASSETS...................... 100.0%
=====
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
6
<PAGE>
GLOBAL BLUE CHIP FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: CATHERINE SOMHEGYI, Partner, Chief Investment Officer, Global
Equity Management; LAWRENCE S. SPEIDELL, CFA, Partner, Director of
Global/Systematic Portfolio Management and Research; LORETTA J. MORRIS, Partner,
Portfolio Manager; RANDALL S. KAHN, CFA, Portfolio Manager; MELISA A. GRIGOLITE,
Portfolio Manager; PEDRO V. MARCAL, Partner, Portfolio Manager; ERNESTO RAMOS,
PH.D., Portfolio Manager.
GOAL: The Global Blue Chip Fund seeks to maximize long-term capital
appreciation by investing globally in blue-chip companies with large stock
market capitalizations.
MARKET OVERVIEW: World stock markets trekked higher in the year ended
March 31, 2000 with blue-chip issues of large companies performing particularly
well.
Despite the fact that the Federal Reserve raised short-term interest rates by
a total of 1.25% during the period, investor fears of higher rates were
counteracted by confidence in the enduring economic expansion, strong corporate
earnings and gains in productivity. These favorable influences sent US stocks
higher, particularly technology names.
Improving economies, the robust growth in technology and an increased focus by
corporate managements on enhancing shareholder value fueled stock markets in
developed non-US markets.
Amid the pick-up in economic growth in its region, the European Central Bank
raised interest rates a total of 75 basis points during the fiscal year. But
higher interest rates did not dampen accelerating economic growth in Europe
where the markets were characterized by restructuring and record levels of
merger and acquisition activity.
The second-largest economy in the world, Japan, showed signs of improvement
due to increased consumer confidence and government efforts to jump-start GDP
growth. And in the world's emerging countries, structural reforms paved the way
for strong stock market results.
PERFORMANCE: The Fund returned 110.6% versus 21.9% for the MSCI World Index
during the 12 months ended March 31, 2000.
PORTFOLIO SPECIFICS: Stock selection, primarily in the US technology sector,
was critical to the fund's strong performance relative to its benchmark.
Major contributors to the fund's outperformance included Qualcomm, Sun
Microsystems, Broadcom, and Veritas Software.
During the period, we increased the fund's exposure to the
semiconductors/electronics component and telecommunications equipment companies
due to stock selection and significant price appreciation among existing
holdings. We decreased the fund's holdings in financial services companies as we
identified better candidates in other sectors. We made no significant changes to
the fund's country weightings in this fiscal year.
MARKET OUTLOOK: We are optimistic about the world's stock markets as many of
the positive themes driving gains during the year remain in place. Global
economic growth is accelerating, corporate earnings are strong and technology
continues to contribute to productivity. Moreover, the trends of consolidation,
restructuring and deregulation all bode well for the Global Blue Chip Fund.
--------------------------------------------------------------------------------
7
<PAGE>
GLOBAL BLUE CHIP FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN GLOBAL BLUE CHIP FUND
INSTITUTIONAL SHARES WITH THE MSCI WORLD INDEX.
<TABLE>
<S> <C> <C>
SINCE
1 YEAR ANNUALIZED TOTAL RETURNS INCEPTION
110.64% As of 3/31/00 64.68%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GLOBAL BLUE CHIP FUND INSTITUTIONAL SHARES MSCI WORLD INDEX
<S> <C> <C> <C>
9/30/97 $250,000.00 $250,000.00
12/97 247,000.00 243,835.33
3/98 296,200.00 278,761.07
6/98 325,800.00 284,431.89
9/98 286,800.00 250,321.89
12/98 361,060.62 303,162.34
3/99 413,332.67 314,012.65
6/99 463,384.67 329,001.51
9/99 507,785.64 324,127.50
12/99 828,075.34 378,781.51
3/31/00 870,638.69 382,666.46
</TABLE>
The graph above shows the value of a hypothetical $250,000 investment in the
Fund's Class I shares compared with the Morgan Stanley Capital International
("MSCI") World Index over the periods indicated. The Fund's Class I shares
calculate their performance based upon the historical performance of their
corresponding series of Nicholas-Applegate Mutual Funds (renamed Pilgrim Mutual
Funds), adjusted to reflect all fees and expenses applicable to the Fund's
Class I shares. The Nicholas-Applegate Institutional Funds' Class I shares were
first available on May 7, 1999. Average annual total return figures include
changes in principal value, reinvested dividends, and capital gain
distributions. Absent expense limitations, total returns would have been
slightly lower. Past performance cannot guarantee future results.
The unmanaged MSCI World Index tracks the performance of approximately 1,450
securities representing the stock markets of 22 countries, and is designed to
measure stock market performance. The unmanaged Index differs from the Fund in
composition, does not pay management fees or expenses and includes reinvested
dividends. One cannot invest directly in an index.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions, currency volatility and the social,
economic and political climates of countries where the Fund invests. You may
have a gain or loss when you sell your shares.
--------------------------------------------------------------------------------
8
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000
------------------------------------------------------------------------
GLOBAL BLUE CHIP FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
------------------------------------------------------------------
COMMON STOCK -- 96.0%
------------------------------------------------------------------
AUSTRALIA -- 0.5%
The News Corp., Ltd. -- ADR........... 2,300 $ 129,375
------------
BRAZIL -- 0.5%
Telesp Celular Participacoes S.A. --
ADR................................. 2,000 113,375
------------
CANADA -- 1.5%
Nortel Networks Corp.................. 3,000 378,000
------------
FINLAND -- 1.1%
Nokia OYJ -- ADR...................... 1,200 260,700
------------
FRANCE -- 2.9%
Genset S.A. -- ADR*................... 2,000 64,969
Societe Television Francaise 1........ 300 221,044
Total Fina Elf S.A.................... 1,000 149,755
Vivendi S.A........................... 2,500 288,266
------------
724,034
------------
GERMANY -- 5.0%
Aixtron AG............................ 900 206,690
EM.TV & Merchandising AG.............. 1,900 154,539
Epcos AG*............................. 2,000 264,105
Intershop Communications AG*.......... 400 201,715
ProSieben Media AG.................... 1,900 217,264
Software AG*.......................... 1,800 199,801
------------
1,244,114
------------
HONG KONG -- 0.5%
China Telecom (Hong Kong), Ltd. --
ADR*................................ 300 53,175
HSBC Holdings PLC..................... 5,600 65,447
------------
118,622
------------
ITALY -- 1.6%
Mediaset SpA.......................... 10,100 200,639
Telecom Italia Mobile SpA............. 16,000 196,279
------------
396,918
------------
JAPAN -- 5.3%
FANUC, Ltd............................ 1,400 146,873
Ito-Yokado Co., Ltd................... 2,000 143,129
Keyence Corp.......................... 330 131,916
Nomura Securities Co., Ltd............ 4,000 130,649
NTT DoCoMo, Inc....................... 4 164,189
Softbank Corp......................... 200 178,422
Sony Corp............................. 500 70,687
Sony Corp. (New Shares)............... 500 71,174
TDK Corp.............................. 1,000 136,304
Toyoda Gosei Co., Ltd................. 2,000 146,249
------------
1,319,592
------------
<CAPTION>
NUMBER
OF SHARES VALUE
------------------------------------------------------------------
<S> <C> <C>
MALAYSIA -- 0.9%
Malayan Banking Berhad................ 16,000 $ 70,316
Tenaga Nasional Berhad................ 46,000 154,947
------------
225,263
------------
NETHERLANDS -- 5.0%
ASM Lithography Holding N.V. Regd.*... 2,300 257,025
Equant N.V.*.......................... 1,100 91,260
Equant N.V. Regd.*.................... 1,300 110,581
Koninklijke Philips Electronics N.V.
-- ADR.............................. 1,500 256,969
KPN N.V............................... 2,300 263,333
STMicroelectronics N.V................ 1,400 262,063
------------
1,241,231
------------
NORWAY -- 0.8%
Schibsted ASA......................... 8,100 200,600
------------
PORTUGAL -- 0.8%
Portugal Telecom S.A.................. 14,600 187,208
------------
SINGAPORE -- 2.8%
Chartered Semiconductor Manufacturing,
Ltd.*............................... 20,000 189,418
Datacraft Asia, Ltd................... 21,000 196,350
Flextronics International, Ltd.*...... 4,400 309,925
------------
695,693
------------
SOUTH KOREA -- 1.0%
Samsung Electronics................... 280 84,868
Samsung Electronics -- GDR 144A*...... 900 160,605
------------
245,473
------------
SPAIN -- 1.7%
Endesa S.A............................ 8,700 199,551
Telefonica S.A. -- ADR*............... 8,500 214,728
------------
414,279
------------
SWEDEN -- 2.6%
Enea Data AB.......................... 1,600 305,556
LM Ericsson Telephone Co. Cl.B --
ADR................................. 3,500 328,343
------------
633,899
------------
TAIWAN -- 1.2%
Macronix International Co., Ltd. --
ADR*................................ 1,800 52,200
United Microelectronics Corp.,
Ltd.*............................... 65,000 252,054
------------
304,254
------------
UNITED KINGDOM -- 8.8%
ARM Holdings PLC*..................... 3,800 229,755
Baltimore Technologies PLC............ 900 123,476
British Telecommunications PLC........ 13,900 260,552
Cable & Wireless PLC.................. 9,200 172,892
Colt Telecom Group PLC*............... 4,500 214,289
Nycomed Amersham PLC.................. 5,700 46,557
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
9
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000 -- CONTINUED
--------------------------------------------------------------------------------
GLOBAL BLUE CHIP FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
------------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK (Continued)
---------------------------------------------------------
UNITED KINGDOM (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
------------------------------------------------------------------
<S> <C> <C>
Psion PLC............................. 2,200 $ 146,072
Reuters Group PLC -- ADR.............. 1,800 214,875
Shire Pharmaceuticals Group PLC --
ADR*................................ 3,800 194,750
Vodafone AirTouch PLC................. 102,454 569,606
------------
2,172,824
------------
UNITED STATES -- 51.5%
AES Corp.*............................ 3,200 252,000
Amdocs, Ltd.*......................... 3,900 287,381
American Express Co................... 1,000 148,938
Analog Devices, Inc.*................. 3,600 290,025
Applied Materials, Inc.*.............. 3,400 320,450
BJ Services Co.*...................... 6,400 472,799
Brinker International, Inc.*.......... 9,500 282,031
Broadcom Corp. Cl. A*................. 1,700 412,887
Chase Manhattan Corp.................. 1,400 122,063
Cisco Systems, Inc.*.................. 4,200 324,713
Citigroup, Inc........................ 3,900 231,319
Conexant Systems, Inc.*............... 2,300 163,300
Corning, Inc.......................... 1,100 213,400
CTS Corp.............................. 4,300 245,100
Dell Computer Corp.*.................. 3,700 199,569
EMC Corp.*............................ 2,100 262,500
Enron Corp............................ 6,200 464,224
Exodus Communications, Inc.*.......... 2,600 365,300
Inktomi Corp.*........................ 1,300 253,500
Intel Corp............................ 3,400 448,587
IVAX Corp.*........................... 9,650 262,963
JDS Uniphase Corp.*................... 2,200 265,238
Juniper Networks, Inc.*............... 800 210,850
MGM Grand, Inc........................ 10,600 254,400
Metro-Goldwyn-Mayer, Inc.............. 8,569 217,974
Motorola, Inc......................... 1,500 213,563
Nextel Communications, Inc. Cl. A*.... 1,100 163,075
Nextel Partners, Inc. Cl.A*........... 7,400 214,600
Oracle Corp.*......................... 4,100 320,056
Qwest Communications International,
Ltd.*............................... 2,600 126,100
Ross Stores, Inc...................... 19,000 457,187
Safeway, Inc.*........................ 5,600 253,400
<CAPTION>
NUMBER
OF SHARES VALUE
------------------------------------------------------------------
<S> <C> <C>
</TABLE>
UNITED STATES (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
------------------------------------------------------------------
<S> <C> <C>
Saks, Inc.*........................... 17,300 $ 250,850
Schlumberger, Ltd..................... 3,600 275,400
Scientific-Atlanta, Inc............... 4,200 266,438
Starbucks Corp.*...................... 7,300 327,131
Sun Microsystems, Inc.*............... 2,900 271,739
Sycamore Networks, Inc.*.............. 1,500 193,500
Symbol Technologies, Inc.............. 2,600 214,013
Texas Instruments, Inc................ 2,500 400,000
Tiffany & Co.......................... 4,700 393,037
TJX Companies, Inc.................... 12,000 266,250
VERITAS Software Corp.*............... 2,900 379,900
Viacom, Inc. Cl. A*................... 5,000 267,188
Walt Disney Co........................ 6,800 281,350
Waters Corp.*......................... 2,500 238,125
------------
12,744,413
------------
TOTAL COMMON STOCK
(Cost: $17,598,333)............................... 23,749,867
------------
------------------------------------------------------------------
PREFERRED STOCK -- 0.9%
------------------------------------------------------------------
BRAZIL -- 0.9%
Banco Bradesco S.A
(Cost: $251,024).................... 29,000,000 238,980
------------
<CAPTION>
PRINCIPAL
AMOUNT
------------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 0.7%
------------------------------------------------------------------
Citibank Nassau
5.625%, 04/03/00
(Cost: $167,936).................... $ 167,936 167,936
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 97.6%
(Cost: $18,017,293)............................. 24,156,783
OTHER ASSETS IN EXCESS OF LIABILITIES -- 2.4%..... 584,829
------------
NET ASSETS -- 100.0%.............................. $ 24,741,612
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
10
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF MARCH 31, 2000
------------------------------------------------------------------------
GLOBAL BLUE CHIP FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Audio/Video Products............ 0.6%
Auto Parts & Equipment.......... 0.6
Banking......................... 0.7
Biotechnology................... 0.3
Broadcasting.................... 0.6
Casinos/Hotels.................. 1.0
Commercial Banks................ 0.3
Computer Services............... 1.7
Computer Software............... 3.6
Computers....................... 6.8
Diversified Financial
Services...................... 2.8
Diversified Manufacturing....... 0.9
Diversified Operations.......... 1.2
Drugs/Pharmaceuticals........... 1.8
Electric........................ 3.4
Electronic
Components/Semiconductors..... 18.3
Entertainment................... 2.0
Instruments - Scientific........ 1.0
Internet Software............... 3.3
Machinery....................... 1.3
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Medical Products................ 0.2%
Money Center Banks.............. 1.7
Multimedia...................... 2.5
Networking Products............. 2.2
Oil & Gas Producers............. 0.6
Oil & Gas Services.............. 4.9
Publishing...................... 0.8
Retail - Apparel................ 1.8
Retail - Discount............... 1.1
Retail - Food................... 1.0
Retail - Jewelry................ 1.5
Retail - Major Department
Stores........................ 1.0
Retail - Miscellaneous.......... 0.6
Retail - Restaurants............ 2.5
Telecommunications Equipment.... 7.5
Telecommunications.............. 12.9
Television...................... 2.6
Other Assets in Excess of
Liabilities................... 2.4
-----
NET ASSETS...................... 100.0%
=====
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
11
<PAGE>
GLOBAL GROWTH & INCOME FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: CATHERINE SOMHEGYI, Partner, Chief Investment Officer, Global
Equity Management; LAWRENCE S. SPEIDELL, CFA, Partner, Director of
Global/Systematic Portfolio Management and Research; LORETTA J. MORRIS, Partner,
Portfolio Manager; RANDALL S. KAHN, CFA, Portfolio Manager; : PEDRO V. MARCAL,
Partner, Portfolio Manager; ERNESTO RAMOS, PH.D., Portfolio Manager; MELISA A.
GRIGOLITE, Portfolio Manager.
GOAL: The Global Growth & Income Fund seeks to deliver total return consisting
of long-term capital appreciation and current income from a diversified
portfolio of stocks and fixed income securities of companies located throughout
the world.
MARKET OVERVIEW: During the 12 months ended March 31, 2000, economic growth
and strong corporate profits drove stock prices higher across the globe.
The US market advanced despite the fact that during the fiscal year, the
Federal Reserve hiked interest rates by a total of 1.25%. Fears over higher
rates were offset by the promise of enduring economic strength, productivity
gains and low inflation. These positive factors fueled stock market gains,
particularly in the technology sector. Paralleling the trend in the United
States, overseas markets also benefited from investors' persistent fondness for
technology names.
In developed non-US countries, stocks benefited from improving economies and
an increased focus by corporate managements on enhancing shareholder value.
In Europe, restructuring and record levels of merger and acquisition activity
stimulated the markets. Signs of renewed inflationary pressures prompted the
European Central Bank to raise key short-term interest rates for the 11
countries in the European Monetary Union twice during the fiscal year.
Stocks in Japan, the world's second-largest economy, posted solid gains. The
MSCI Japan Index rose 45.1% during the period, driven by signs of a pick-up in
economic growth, increased consumer confidence and structural reform. In the
world's emerging countries, structural reforms also paved the way for solid
stock market returns.
PERFORMANCE: During the 12 months ended March 31, 2000, the Fund returned
55.7% versus 21.9% for its benchmark, the MSCI World Index.
PORTFOLIO SPECIFICS: The fund's strong gains this period were mainly
attributable to stock selection, especially in the US technology sector.
One of the fund's best-performing names was Qualcomm, a provider of digital
wireless communications products, technologies and services based on its Code
Division Multiple Access (CDMA) technology.
MARKET OUTLOOK: Many of the positive trends driving this period's worldwide
stock markets gains remain in place, namely:
- Accelerating economic growth and corporate profitability
- Growth in technology and wireless communications, which drives productivity
gains
- The vigorous pace of mergers and acquisitions activity
- Ongoing themes of consolidation, restructuring and deregulation.
These factors point to continued strength in the world's stock markets. As a
result, we are optimistic in our outlook for the Global Growth & Income Fund.
--------------------------------------------------------------------------------
12
<PAGE>
GLOBAL GROWTH & INCOME FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN GLOBAL GROWTH & INCOME
FUND INSTITUTIONAL SHARES WITH THE MSCI WORLD INDEX.
<TABLE>
<S> <C> <C>
SINCE
1 YEAR ANNUALIZED TOTAL RETURNS INCEPTION
55.69% As of 3/31/00 37.47%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GLOBAL GROWTH &
INCOME FUND MSCI WORLD INDEX
INSTITUTIONAL SHARES
<S> <C> <C> <C>
6/30/97 $250,000.00 $250,000.00
9/97 318,200.00 257,151.03
12/97 311,683.44 250,810.03
3/98 340,620.39 286,734.79
6/98 354,921.78 292,567.82
9/98 311,071.61 257,482.14
12/98 355,716.41 311,834.04
3/99 385,350.69 322,994.72
6/99 408,979.74 338,412.31
9/99 427,523.55 333,398.89
12/99 610,612.71 389,616.22
3/31/00 599,960.67 393,612.30
</TABLE>
The graph above shows the value of a hypothetical $250,000 investment in the
Fund's Class I shares compared with the Morgan Stanley Capital International
("MSCI") World Index over the periods indicated. The Fund's Class I shares
calculate their performance based upon the historical performance of their
corresponding series of Nicholas-Applegate Mutual Funds (renamed Pilgrim Mutual
Funds), adjusted to reflect all fees and expenses applicable to the Fund's Class
I shares. The Nicholas-Applegate Institutional Funds' Class I shares were first
available on May 7, 1999. Average annual total return figures include changes in
principal value, reinvested dividends, and capital gain distributions. Absent
expense limitations, total returns would have been slightly lower. Past
performance cannot guarantee future results.
The unmanaged MSCI World Index tracks the performance of approximately 1,450
securities representing the stock markets of 22 countries, and is designed to
measure stock market performance. The unmanaged Index differs from the Fund in
composition, does not pay management fees or expenses and includes reinvested
dividends. One cannot invest directly in an index.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions, currency volatility and the social,
economic and political climates of countries where the Fund invests. You may
have a gain or loss when you sell your shares.
--------------------------------------------------------------------------------
13
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000
------------------------------------------------------------------------
GLOBAL GROWTH & INCOME FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
---------------------------------------------------------------
COMMON STOCK & EQUIVALENTS -- 86.2%
---------------------------------------------------------------
AUSTRALIA -- 1.0%
News Corp., Ltd. -- ADR.............. 1,400 $ 78,750
----------
BRAZIL -- 0.4%
Telesp Celular Participacoes S.A. --
ADR................................ 600 34,013
----------
CANADA -- 1.1%
Nortel Networks Corp................. 700 88,200
----------
DENMARK -- 1.6%
Tele Danmark AS Cl. B................ 1,500 134,953
----------
FINLAND -- 1.1%
Nokia OYJ -- ADR..................... 400 86,900
----------
FRANCE -- 4.5%
Bouygues SA.......................... 125 99,039
Bouygues SA -- Rts.*................. 13 62
Genset SA -- ADR*.................... 600 19,491
Societe Television Francaise 1....... 100 73,681
Total Fina Elf SA.................... 500 74,877
Vivendi SA........................... 900 103,777
----------
370,927
----------
GERMANY -- 4.4%
Aixtron AG........................... 300 68,897
Epcos AG............................. 500 66,026
Intershop Communications AG*......... 200 100,857
ProSieben Media AG................... 600 68,610
Software AG*......................... 500 55,500
----------
359,890
----------
HONG KONG -- 0.2%
HSBC Holdings PLC.................... 1,600 18,699
----------
ITALY -- 1.9%
Mediaset SpA......................... 4,600 91,380
Telecom Italia Mobile SpA............ 5,500 67,471
----------
158,851
----------
JAPAN -- 7.4%
Fast Retailing Co., Ltd.............. 100 44,021
Ito-Yokado Co., Ltd.................. 1,000 71,564
Kyocera Corp......................... 100 16,731
Mitsubishi Electric Corp............. 2,000 18,876
Mitsui Fudosan Co., Ltd.............. 2,000 19,110
NEC Corp............................. 1,000 29,542
Nikon Corp........................... 1,000 38,415
Nippon Steel Corp.................... 8,000 19,110
Nomura Securities Co., Ltd........... 1,000 32,662
Softbank Corp........................ 100 89,212
Sony Corp. -- ADR.................... 400 112,050
Sumitomo Bank........................ 1,000 14,917
Sumitomo Corp........................ 2,000 24,258
Toshiba Corp......................... 2,000 20,397
Yamato Transport Co., Ltd............ 2,000 57,330
----------
608,195
----------
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
NETHERLANDS -- 4.0%
ASM Lithography Holding N.V. --
ADR................................ 600 $ 67,050
Koninklijke KPN NV................... 700 80,145
Koninklijke Philips Electronics
N.V................................ 400 67,213
KPNQwest NV Cl. C*................... 1,000 53,204
United Pan-Europe Communications N.V.
*.................................. 1,300 60,743
----------
328,355
----------
NORWAY -- 1.0%
Schibsted ASA........................ 3,200 79,249
----------
PORTUGAL -- 0.8%
Portugal Telecom SA.................. 5,000 64,112
----------
SINGAPORE -- 0.8%
Chartered Semiconductor
Manufacturing, Ltd................. 7,000 66,296
----------
SOUTH KOREA -- 1.0%
Samsung Electronics.................. 100 30,310
Samsung Electronics -- 144A.......... 300 53,535
----------
83,845
----------
SPAIN -- 1.4%
Endesa SA............................ 2,600 59,636
Telefonica SA........................ 2,300 58,103
----------
117,739
----------
SWEDEN -- 2.3%
Enea Data AB......................... 500 95,486
LM Ericsson Telephone Co. -- ADR..... 1,000 93,813
----------
189,299
----------
TAIWAN -- 0.2%
Macronix International Co., Ltd. --
ADR*............................... 500 14,500
----------
UNITED KINGDOM -- 7.5%
Baltimore Technologies PLC*.......... 400 54,878
British Telecom PLC.................. 3,200 59,983
Cable & Wireless PLC................. 2,800 52,619
Colt Telecom Group PLC*.............. 1,300 61,906
Nycomed Amersham PLC................. 1,600 13,069
Pearson PLC.......................... 2,000 69,587
Psion PLC*........................... 1,400 92,955
Shire Pharmaceuticals PLC -- ADR*.... 1,100 56,375
Vodafone AirTouch PLC................ 26,982 150,010
----------
611,382
----------
UNITED STATES -- 43.6%
AES Corp............................. 1,500 118,124
Amdocs, Ltd.*........................ 1,200 88,425
American Express..................... 800 119,150
Applied Materials, Inc.*............. 1,000 94,250
BJ Services Co.*..................... 1,700 125,587
Brinker International, Inc.*......... 3,000 89,063
Chase Manhattan Corp................. 1,000 87,188
Citigroup, Inc....................... 1,600 94,900
Corning, Inc......................... 700 135,800
Costco Wholesale Corp................ 1,600 84,100
Dell Computer Corp.*................. 1,300 70,119
Enron Corp........................... 2,000 149,678
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
14
<PAGE>
-------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK & EQUIVALENTS (Continued)
---------------------------------------------------------
UNITED STATES (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
Exodus Communications, Inc.*......... 900 $ 126,449
Home Depot, Inc...................... 1,051 67,790
Intel Corp........................... 800 105,550
Juniper Networks, Inc.*.............. 300 79,069
Metro-Goldwyn-Mayer, Inc.*........... 5,313 135,148
MGM Grand Inc.*...................... 3,200 76,800
Motorola, Inc........................ 500 71,188
Nextel Communications, Inc. Cl. A*... 900 133,425
Ross Stores, Inc..................... 5,900 141,968
Safeway, Inc.*....................... 1,700 76,925
Saks, Inc.*.......................... 5,400 78,300
Schlumberger, Ltd.................... 2,000 153,000
Scientific-Atlanta, Inc.............. 1,200 76,125
Starbucks Corp.*..................... 2,400 107,550
Sycamore Networks, Inc.*............. 600 77,400
Symbol Technologies, Inc............. 800 65,850
Texas Instruments, Inc............... 400 64,000
Tiffany & Co......................... 1,000 83,625
Time Warner Telecom Inc. Cl. A*...... 1,500 119,250
TJX Cos., Inc........................ 3,700 82,094
Viacom, Inc. Cl. A*.................. 2,000 106,875
Walt Disney Co....................... 2,300 95,163
Waters Corporation*.................. 800 76,200
Weatherford International, Inc.*..... 2,000 117,875
----------
3,574,003
----------
TOTAL COMMON STOCK & EQUIVALENTS
(Cost: $5,587,280).............................. 7,068,158
----------
---------------------------------------------------------------
CONVERTIBLE PREFERRED STOCK -- 1.8%
---------------------------------------------------------------
UNITED STATES -- 1.8%
Houston Industries, Inc.
(convertible)
7.000% (ACES)...................... 450 71,550
Morgan Stanley Dean Witter & Co.
(convertible) 6.000% (PERQS)....... 500 75,438
----------
TOTAL CONVERTIBLE PREFERRED STOCK
(Cost: $73,358)................................. 146,988
----------
<CAPTION>
PRINCIPAL
AMOUNT
---------------------------------------------------------------
<S> <C> <C>
CORPORATE BONDS -- 6.1%
---------------------------------------------------------------
UNITED STATES -- 6.1%
Costco Cos., Inc.
0.000%, 08/19/17................... $110,000 131,450
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------------------------------------------------------------
<S> <C> <C>
</TABLE>
UNITED STATES (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------------------------------------------------------------
<S> <C> <C>
Electronic Data Systems Corp.
7.125%, 10/25/09................... $ 40,000 $ 39,364
Ford Motor Credit Co.
7.375%, 10/28/09................... 75,000 73,466
GE Global Insurance Holding
6.450%, 03/01/19................... 130,000 115,964
General Motors Corp.
7.750%, 01/19/10................... 40,000 40,182
Wal-Mart Stores, Inc.
6.875%, 08/10/09................... 100,000 97,275
----------
TOTAL CORPORATE BONDS
(Cost: $453,512)................................ 497,701
----------
---------------------------------------------------------------
AGENCY OBLIGATION -- 1.1%
---------------------------------------------------------------
UNITED STATES -- 1.1%
Federal National Mortgage Association
6.000%, 05/15/08
(Cost: $102,750)................... 100,000 92,710
----------
---------------------------------------------------------------
FOREIGN CORPORATE BOND -- 1.0%
---------------------------------------------------------------
UNITED KINGDOM -- 1.0%
KFW International Finance, Inc.
7.250%, 07/23/07
(Cost: $92,680).................... 50,000 83,245
----------
---------------------------------------------------------------
US TREASURY OBLIGATION -- 1.0%
---------------------------------------------------------------
US TREASURY BOND
6.500%, 10/15/06
(Cost: $87,400).................... 80,000 80,708
----------
---------------------------------------------------------------
TIME DEPOSITS -- 5.2%
---------------------------------------------------------------
Morgan Guaranty London
5.625%, 04/03/00
(Cost: $430,986)................... 430,986 430,986
----------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 102.4%
(Cost: $6,827,966)............................ 8,400,496
LIABILITIES IN EXCESS OF OTHER ASSETS --
(2.4%).......................................... (198,155)
----------
NET ASSETS -- 100.0%............................ $8,202,341
----------
----------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
15
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF MARCH 31, 2000
------------------------------------------------------------------------
GLOBAL GROWTH & INCOME FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Audio/Video Products............ 1.4%
Banking......................... 5.2
Biotechnology................... 0.4
Cable TV........................ 0.7
Computer Services............... 2.3
Computer Software............... 0.7
Computers....................... 3.3
Distribution/Wholesale.......... 1.3
Diversified Financial
Services...................... 9.2
Drugs/Pharmaceuticals........... 0.7
Electric........................ 2.2
Electric Products............... 1.0
Electronic
Components/Semiconductors..... 5.6
Electronics..................... 0.8
Engineering & Construction...... 1.2
Entertainment................... 3.0
Financial Services.............. 1.1
Hotels - Gaming................. 0.9
Identification
System/Development............ 0.8
Instruments - Scientific........ 0.9
Insurance....................... 1.4
Internet Software............... 2.8
Medical Products................ 0.2
Miscellaneous Manufacturing..... 1.7
Money Center Banks.............. 1.5
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Multimedia...................... 3.0%
Networking Products............. 1.0
Oil & Gas Producers............. 2.7
Oil & Gas Services.............. 4.8
Other Commercial Services....... 1.3
Photo Equipment & Supplies...... 0.5
Publishing...................... 1.8
Real Estate Development......... 0.2
Retail - Apparel................ 2.2
Retail - Building Products...... 0.8
Retail - Department Stores...... 1.0
Retail - Discount............... 3.8
Retail - Food................... 0.9
Retail - Jewelry................ 1.0
Retail - Miscellaneous.......... 0.9
Retail - Restaurants............ 2.4
Steel........................... 0.2
Telecommunication Equipment..... 6.0
Telecommunications.............. 14.1
Television...................... 2.8
Transportation.................. 0.7
Liabilities in Excess of Other
Assets........................ (2.4)
-----
NET ASSETS...................... 100.0%
=====
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
16
<PAGE>
GLOBAL TECHNOLOGY FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: CATHERINE SOMHEGYI, Partner, Chief Investment Officer, Global
Equity Management; ANDREW B. GALLAGHER, Partner, Portfolio Manager; LORETTA J.
MORRIS, Partner, Portfolio Manager; PEDRO V. MARCAL, Partner, Portfolio Manager;
RANDALL S. KAHN, CFA, Portfolio Manager; CHRISTOPHER ANGIOLETTI, Portfolio
Manager; JASON CAMPBELL, Portfolio Manager; EVAN LUNDQUIST, Investment Analyst.
GOAL: The Global Technology Fund seeks to maximize long-term capital
appreciation by investing primarily in common and preferred stocks, warrants and
convertible securities of companies with business operations in technology and
technology-related industries worldwide.
MARKET OVERVIEW: Despite a sell-off late in the period, technology stocks
around the world posted record-breaking results during the 12 months ended
March 31, 2000.
The major thrust behind these stunning returns was accelerating growth in
wireless communications and the Internet. During the period, technology mutual
funds enjoyed record levels of cash inflows. During a one-week period in
November, contributions into tech funds accounted for 74% of all US equity
mutual fund inflows.
Within the sector, gains were broadly based, with all major component
industries enjoying robust returns. Piggybacking on the success of US business
models, international technology issues also performed well, particularly those
of European Internet, telecommunications and media companies.
PERFORMANCE: For the 12-month period ended March 31, 2000, the fund was up
259.9% versus 160.1% for the Merrill Lynch Global Technology
100 Index.
PORTFOLIO SPECIFICS: Stock selection, particularly in the United States, Japan
and the United Kingdom, was responsible for the fund's extraordinary returns
this fiscal year.
Some of the period's major contributors to performance were technology names
including Qualcomm, Exodus Communications, and GlobeSpan in the United States;
and Vodafone Airtouch PLC in the United Kingdom.
During the period, on a stock-by-stock basis, we adjusted the fund's country
weightings, including decreasing our US exposure by 5.9%. However, US companies
continue to represent the majority of the fund's holdings.
MARKET OUTLOOK: We remain enthusiastic about the long-term prospects for
technology since accelerating global demand for Internet commerce and wireless
communications shows no signs of abating. Strong demand should continue to drive
earnings growth and support ongoing gains in the technology sector.
In the future, as the market tests new highs, we believe investors'
preferences for technology issues will become more discriminating -- an
environment conducive to our bottom-up approach. We are optimistic that our
focus on individual security selection will lead us to those growth-oriented
technology issues displaying the strongest fundamental characteristics.
--------------------------------------------------------------------------------
17
<PAGE>
GLOBAL TECHNOLOGY FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN GLOBAL TECHNOLOGY FUND
INSTITUTIONAL SHARES WITH THE MERRILL LYNCH GLOBAL TECHNOLOGY 100 INDEX.
<TABLE>
<S> <C> <C>
SINCE
1 YEAR ANNUALIZED TOTAL RETURNS INCEPTION
259.92% As of 3/31/00 362.11%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GLOBAL TECHNOLO- MERRILL LYNCH
GY GLOBAL TECHNOLOGY
FUND INSTITUTIONAL 100 INDEX
SHARES
<S> <C> <C> <C>
7/31/1998 $250,000.00 $250,000.00
8/98 205,800.00 193,380.00
9/98 236,000.00 225,106.12
10/98 244,000.00 248,224.29
11/98 361,400.00 281,915.52
12/98 454,200.00 333,884.40
1/99 638,200.00 379,446.26
2/99 668,000.00 335,658.16
3/99 893,000.00 371,607.15
4/99 980,800.00 388,325.38
5/99 940,000.00 397,027.76
6/99 1,097,800.00 459,104.24
7/99 1,154,200.00 448,503.06
8/99 1,292,000.00 472,907.46
9/99 1,364,800.00 486,011.25
10/99 1,609,600.00 833,879.96
11/99 2,008,791.24 643,912.62
12/99 2,696,739.78 791,571.44
1/00 2,702,522.80 778,391.77
2/00 3,705,299.17 1,013,699.61
3/31/2000 3,214,090.00 966,349.70
</TABLE>
The graph above shows the value of a hypothetical $250,000 investment in the
Fund's Class I shares compared with the Merrill Lynch Global Technology 100
Index over the periods indicated. The Fund's Class I shares calculate their
performance based upon the historical performance of their corresponding series
of Nicholas-Applegate Mutual Funds (renamed Pilgrim Mutual Funds), adjusted to
reflect all fees and expenses applicable to the Fund's Class I shares. The
Nicholas-Applegate Institutional Funds' Class I shares were first available on
May 7, 1999. Average annual total return figures include changes in principal
value, reinvested dividends, and capital gain distributions. Absent expense
limitations, total returns would have been slightly lower. Past performance
cannot guarantee future results.
The unmanaged Merrill Lynch Global Technology Index tracks the performance of
the 100th largest securities in the global technology sector. The Index differs
from the Fund in composition, does not pay management fees or expenses and
includes reinvested dividends. One cannot invest directly in an index.
The Fund's historical performance was affected by special market factors,
including the Fund's investments in IPOs, which had a material impact on
performance. As the assets of the fund increase, gains attributable to hot IPOs
will have a decreasing effect on overall fund performance. Accordingly, there is
no guarantee that, as the Fund's assets grow, it will continue to experience
substantially similar performance.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions, currency volatility and the social,
economic and political climates of countries where the Fund invests. You may
have a gain or loss when you sell your shares.
--------------------------------------------------------------------------------
18
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000
------------------------------------------------------------------------
GLOBAL TECHNOLOGY FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
--------------------------------------------------------------
COMMON STOCK & EQUIVALENTS -- 98.1%
--------------------------------------------------------------
AUSTRALIA -- 0.4%
Davnet, Ltd.*................... 472,300 $ 1,548,105
------------
BRAZIL -- 1.5%
Telemig Celular Participacoes
S.A. -- ADR* ................. 33,800 2,993,413
Telesp Celular Participacoes
S.A. -- ADR* ................. 56,100 3,180,169
------------
6,173,582
------------
BRITISH VIRGIN ISLANDS -- 0.8%
OpenTV Corp. Cl. A.............. 28,500 3,373,688
------------
CANADA -- 3.1%
Cell-Loc, Inc................... 39,800 1,425,541
C-Mac Industries, Inc........... 66,800 2,875,740
Cognos, Inc..................... 64,700 4,047,794
Jetform Corp.................... 108,600 785,439
Nortel Networks Corp............ 27,300 3,439,800
------------
12,574,314
------------
FINLAND -- 1.3%
Helsingin Puhelin OYJ Series
E............................. 20,500 1,981,261
Nokia OYJ -- ADR................ 15,700 3,410,825
------------
5,392,086
------------
FRANCE -- 0.5%
Business Objects S.A. -- ADR.... 18,700 1,860,650
------------
GERMANY -- 5.8%
Aixtron AG...................... 21,200 4,868,707
Dialog Semiconductor PLC........ 25,100 1,986,304
Epcos AG........................ 13,800 1,822,320
Intershop Communications AG..... 8,000 4,034,290
Ixos Software AG................ 40,900 1,682,900
Poet Holdings, Inc.............. 29,800 3,313,515
Software Darmstadt AG........... 35,900 3,984,915
Suess Microtec AG............... 52,500 1,909,016
------------
23,601,967
------------
HONG KONG -- 0.3%
Lai Sun Development Co., Ltd.... 16,334,000 881,048
Online Credit International,
Ltd........................... 6,388,000 242,016
------------
1,123,064
------------
INDIA -- 0.6%
Infosys Technologies, Ltd....... 11,650 2,378,345
------------
ISRAEL -- 2.7%
Batm Advanced Communications,
Ltd........................... 30,800 2,803,165
Check Point Software
Technologies, Ltd............. 10,700 1,830,369
M-Systems Flash Disk Pioneers,
Ltd........................... 40,600 2,151,800
Orckit Communications, Ltd.*.... 60,600 4,060,200
------------
10,845,534
------------
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
ITALY -- 0.5%
Gruppo Editoriale L' Espresso... 61,300 $ 1,203,075
Telecom Italia Mobile SpA*...... 78,600 964,222
------------
2,167,297
------------
JAPAN -- 2.8%
Disco Corp...................... 6,600 1,190,465
Disco Corp. (New Shares)........ 3,300 601,667
NTT Mobile Communications*...... 53 2,175,498
TDK Corp........................ 31,000 4,225,418
Tokyo Electron, Ltd............. 13,000 1,964,608
Yahoo Japan Corp................ 2 1,214,839
------------
11,372,495
------------
NETHERLANDS -- 2.9%
ASM Lithography Holding N.V. --
ADR........................... 19,300 2,156,775
BE Semiconductor Industries
N.V........................... 114,800 1,938,890
Koninklijke Philips Electronics
N.V. -- ADR................... 16,400 2,809,525
KPNQwest N.V.................... 16,500 877,860
STMicroElectronics N.V.......... 13,400 2,508,313
Versatel Telecom International
N.V........................... 31,500 1,460,095
------------
11,751,458
------------
SINGAPORE -- 0.7%
Chartered Semiconductor ADR..... 30,400 2,865,200
------------
SOUTH KOREA -- 0.4%
Cybertek Holdings, Inc.......... 24,200 983,108
Serome Technology, Inc.......... 8,570 437,320
------------
1,420,428
------------
SWEDEN -- 3.1%
Effnet Group AB................. 28,900 2,107,292
Enea Data AB.................... 24,000 4,583,333
LM Ericsson Telephone Co. Cl.B
--
ADR *......................... 61,500 5,769,469
------------
12,460,094
------------
SWITZERLAND -- 1.1%
SEZ Holding AG.................. 5,200 4,503,518
------------
TAIWAN -- 0.5%
Macronix International Co., Ltd.
-- ADR........................ 69,300 2,009,700
------------
UNITED KINGDOM -- 7.1%
ARM Holdings PLC -- ADR*........ 20,800 1,257,607
Baltimore Technologies PLC...... 11,500 1,577,752
British Telecom PLC ORD......... 164,700 3,087,264
Cable & Wireless PLC............ 170,900 3,211,661
Filtronic PLC................... 56,800 1,714,852
International Quantum Epitaxi
PLC........................... 26,800 2,144,000
NXT PLC......................... 81,200 2,396,460
Psion PLC....................... 47,700 3,167,107
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
19
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000 -- CONTINUED
--------------------------------------------------------------------------------
GLOBAL TECHNOLOGY FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK & EQUIVALENTS (Continued)
---------------------------------------------------------
UNITED KINGDOM (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
Reuters Group PLC -- ADR........ 36,400 $ 4,345,250
Vodafone AirTouch PLC........... 1,068,660 5,941,345
------------
28,843,298
------------
UNITED STATES -- 62.0%
Akamai Technologies, Inc.*...... 11,300 1,817,181
Allscripts, Inc.*............... 23,800 1,430,975
Alteon Websystems, Inc.*........ 56,500 4,633,000
Amdocs, Ltd.*................... 68,000 5,010,749
American Mobile Satellite
Corp.*........................ 72,200 1,732,800
Applied Films Corp.*............ 84,600 1,692,000
Ariba, Inc.*.................... 18,700 3,919,988
Arrowpoint Communications,
Inc.*......................... 6,000 710,906
Art Technology Group, Inc.*..... 61,400 4,033,213
Aspect Communications Corp.*.... 26,600 985,863
Avanex Corp.*................... 8,100 1,229,175
Broadcom Corp. Cl. A*........... 23,400 5,683,274
Brocade Communications Systems,
Inc.*......................... 24,000 4,303,500
CTS Corp........................ 81,900 4,668,300
Celera Genomics*................ 18,500 1,693,906
Celeritek, Inc.*................ 40,500 2,561,625
CIENA Corp.*.................... 21,700 2,736,913
Commerce One, Inc.*............. 14,400 2,149,200
Corning, Inc.................... 24,600 4,772,400
Credence Systems Corp.*......... 23,800 2,977,975
Crossroads Systems, Inc.*....... 17,100 1,765,575
Cypress Semiconductor Corp.*.... 58,100 2,865,056
Dell Computer Corp.*............ 109,300 5,895,369
Efficient Networks, Inc.*....... 38,500 5,996,375
Emcore Corp.*................... 22,000 2,531,375
Emulex Corp.*................... 4,800 523,800
Entrust Technologies, Inc.*..... 40,800 3,471,186
E-Tek Dynamics, Inc.*........... 30,500 7,175,125
Exodus Communications, Inc.*.... 26,700 3,751,350
Fastnet Corp.*.................. 48,200 584,425
Finisar Corp.*.................. 31,400 4,600,590
Gasonics International Corp.*... 110,200 4,370,113
Globespan, Inc.*................ 70,800 7,217,175
Harmonic Inc.*.................. 13,800 1,148,850
HNC Software, Inc.*............. 46,000 3,314,875
Infonet Services Corp. Cl. B*... 100,900 2,282,863
Inktomi Corp.*.................. 22,100 4,309,500
Insilicon Corp.*................ 40,300 637,244
Intel Corp...................... 54,300 7,164,206
Juniper Networks, Inc.*......... 20,700 5,455,743
Lam Research Corp.*............. 112,200 5,056,012
LSI Logic Corp.*................ 51,400 3,732,925
LTX Corp.*...................... 61,800 2,792,588
Manugistics Group, Inc.*........ 65,800 3,306,450
Motorola Inc.................... 29,100 4,143,113
NaviSite, Inc.*................. 14,500 1,765,375
Network Appliance, Inc.*........ 54,400 4,501,600
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
UNITED STATES (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
Newport Corp.................... 28,900 $ 3,901,500
Next Level Communications,
Inc........................... 15,900 1,729,125
Nextel Communications, Inc. Cl.
A*............................ 26,000 3,854,500
Nextel Partners, Inc. Cl. A.*... 141,600 4,106,400
Niku Corp.*..................... 34,400 1,627,550
Opus360 Corp. Rts............... 480 0
Osicom Technologies, Inc.*...... 21,500 2,413,375
Peregrine Systems, Inc.*........ 59,700 4,003,631
Pivotal Corp.*.................. 33,900 1,089,038
PRI Automation, Inc.*........... 30,900 1,888,763
Project Software & Development,
Inc.*......................... 19,800 1,118,700
Qlogic Corp.*................... 22,300 3,021,650
Quest Software, Inc.*........... 16,600 1,871,650
Redback Networks, Inc.*......... 13,500 4,049,156
Register.Com, Inc.*............. 60,400 4,197,800
RF Micro Devices, Inc.*......... 35,000 4,703,125
Sagent Technology, Inc.*........ 148,900 4,290,181
Scientific-Atlanta, Inc......... 77,600 4,922,750
SDL, Inc.*...................... 27,000 5,747,624
Silicon Storage Technology,
Inc.*......................... 44,700 3,302,213
Silknet Software, Inc.*......... 13,500 1,404,000
Tektronix, Inc.................. 62,300 3,488,800
Telaxis Communications,
Corp.*........................ 74,900 4,502,194
Teradyne, Inc.*................. 59,400 4,885,650
Tollgrade Communications,
Inc.*......................... 38,800 2,056,400
Turnstone Systems, Inc.*........ 4,700 540,500
Verisign, Inc.*................. 22,200 3,318,900
Veritas Software Corp.*......... 25,425 3,330,675
Versata, Inc.*.................. 8,900 535,669
Vishay Intertechnology, Inc.*... 54,100 3,009,313
Watchguard Technologies,
Inc.*......................... 25,300 2,277,000
Worldquest Networks Inc.*....... 47,100 1,148,063
------------
251,437,696
------------
TOTAL COMMON STOCK & EQUIVALENTS
(Cost: $339,240,200)......................... 397,702,519
------------
<CAPTION>
PRINCIPAL
AMOUNT
--------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 0.6%
--------------------------------------------------------------
Citibank Nassau
5.625%, 04/03/00
(Cost: $2,409,911)............ $ 2,409,911 2,409,911
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 98.7%
(Cost: $341,650,111)........................ 400,112,430
OTHER ASSETS IN EXCESS OF LIABILITIES --
1.3%........................................ 5,206,031
------------
NET ASSETS -- 100.0%.......................... $405,318,461
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
20
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF MARCH 31, 2000
------------------------------------------------------------------------
GLOBAL TECHNOLOGY FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Banking......................... 0.6%
Biotechnology................... 0.4
Computer Services............... 4.9
Computer Software............... 11.0
Computers....................... 6.8
Diversified Operations.......... 0.1
Electronic
Components/Semiconductors..... 18.6
Electronics..................... 5.4
Industrial
Automation/Robotics........... 0.5
Instruments..................... 1.0
Internet Content................ 1.8
Internet Software............... 9.4
Machinery....................... 2.0
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Medical Supplies................ 0.4%
Miscellaneous Manufacturing..... 1.6
Multimedia...................... 1.1
Networking Products............. 4.0
Other Commercial Services....... 0.4
Publishing...................... 0.3
Real Estate Development......... 0.2
Telecommunication Equipment..... 12.1
Telecommunication Services...... 0.3
Telecommunications.............. 15.8
Other Assets in Excess of
Liabilities................... 1.3
-----
NET ASSETS...................... 100.0%
=====
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
21
<PAGE>
GLOBAL HEALTH CARE FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: PAUL E. CLUSKEY, Portfolio Manager; TRISHA C. SCHUSTER, CFA,
Portfolio Manager; MELISA A. GRIGOLITE, Portfolio Manager.
CHIEF INVESTMENT OFFICER: CATHERINE SOMHEGYI
GOAL: The Global Health Care Fund seeks to maximize long-term capital
appreciation by investing primarily in the equity securities of companies with
business operations in health care and health care-related industries worldwide.
MARKET OVERVIEW: Since the fund's September 1, 1999 inception, healthcare has
been an exciting sector of the market. Recently, the worldwide environment for
healthcare companies has been improving, driven by favorable demographics and
new scientific breakthroughs in the area of biotechnology.
One of the most fascinating areas in healthcare has been genomics -- a
sub-sector of biotechnology that involves studying the structure and function of
genes. The scientific community is very enthusiastic about the completion of the
human genome sequence. The knowledge gained by the completion of this project
should lead to substantial increases in research productivity and eventually to
major advances to human health. The anticipation of these advances is generating
a great deal of investor interest in healthcare.
PERFORMANCE: The Nicholas-Applegate Global Health Care Fund returned 147.4%
from its inception on September 1, 1999 through March 31, 2000. The fund
outpaced the returns for two of its benchmarks: the Russell 3000 Healthcare
Index, which declined 1.7%, and the S&P 500, which rose 17.9%. The fund's
results also compared favorably to the Lipper Health/Biotechnology Funds Average
which gained 14.7% during the seven-month period.
PORTFOLIO SPECIFICS: The fund's results during the period demonstrate our
excellent stock picking skill within the healthcare sector. We have focused on
innovative companies which can best benefit from the recent technological
advances.
Because genomics is in its infancy, we believe it will first stimulate an
increase in research, followed by the development of new products. We look to
own stocks poised to benefit from research activity. Our early identification of
these stocks contributed to the fund's exceptional returns. For example,
Invitrogen, which sells tools to drug discovery labs, performed very well in the
quarter.
During the period, many biotechnology stocks became extended, and we used the
opportunity to take some profits. We have been finding additional attractive
healthcare companies outside of the biotechnology industry. Specialty
pharmaceutical companies like Teva Pharmaceutical provide attractive growth
opportunities. Teva is an Israeli generic producer and benefits as patents
expire on many leading drugs. Teva also has one of the best selling branded
drugs for multiple sclerosis.
MARKET OUTLOOK: In the near term, we expect to see some volatility in the
healthcare sector. The election year rhetoric on healthcare reform offsets some
of the positive fundamentals in the sector. Overall, we are very optimistic that
our bottom-up stock selection process will lead us to the most promising
healthcare investment opportunities around the world.
Looking farther out, we expect global demand for healthcare to grow at an
accelerating pace. As a result, we are very excited about the opportunities in
the healthcare sector.
--------------------------------------------------------------------------------
22
<PAGE>
GLOBAL HEALTH CARE FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN GLOBAL HEALTH CARE
FUND INSTITUTIONAL SHARES WITH THE RUSSELL 3000 HEALTHCARE INDEX.
<TABLE>
<S> <C> <C>
TOTAL RETURN
SINCE INCEPTION (NOT ANNUALIZED)
As of 3/31/00
147.42%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GLOBAL HEALTH RUSSELL 3000
CARE HEALTH-
FUND INSTITUTIONAL CARE
SHARES INDEX
<S> <C> <C>
9/1/99 $250,000.00 $250,000.00
9/99 $246,000.00 $230,314.50
10/99 253,400.00 252,920.67
11/99 275,000.00 256,798.55
12/99 385,807.57 241,108.15
1/00 473,854.94 257,093.63
2/00 791,826.01 244,393.20
3/31/00 618,539.00 245,761.80
</TABLE>
The graph above shows the value of a hypothetical $250,000 investment in the
Fund's Class I shares compared with the Russell 3000 Healthcare Index over the
periods indicated. Average annual total return figures include changes in
principal value, reinvested dividends, and capital gain distributions. Absent
expense limitations, total returns would have been slightly lower. Past
performance cannot guarantee future results.
The unmanaged Russell 3000 Healthcare Index tracks the performance of companies
involved in medical services or healthcare in the Russell 3000 Index. The
healthcare sector is composed of biotechnology research and production, drugs,
hospital supplies, medical services and miscellaneous healthcare industries. The
unmanaged Index differs from the Fund in composition, does not pay management
fees or expenses and includes reinvested dividends. One cannot invest directly
in an index.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions, currency volatility and the social,
economic and political climates of countries where the Fund invests. You may
have a gain or loss when you sell your shares.
--------------------------------------------------------------------------------
23
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000
------------------------------------------------------------------------
GLOBAL HEALTH CARE FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
--------------------------------------------------------------
COMMON STOCK -- 93.7%
--------------------------------------------------------------
CANADA -- 2.1%
Biovail Corp.*.................. 58,100 $ 2,574,556
------------
ISRAEL -- 3.0%
Teva Pharmaceutical Industries,
Ltd. -- ADR*.................. 101,300 3,779,756
------------
SWEDEN -- 3.0%
Nobel Biocare AB................ 66,200 1,777,593
Ortivus AB Cl. B*............... 88,500 455,816
Perbio Science AB*.............. 206,900 1,556,539
------------
3,789,948
------------
SWITZERLAND -- 1.3%
Tecan AG........................ 2,400 1,685,933
------------
UNITED KINGDOM -- 1.2%
Celltech Chiroscience PLC*...... 61,200 1,109,103
Nycomed Amersham PLC............ 48,100 392,878
Oxford GlycoSciences PLC*....... 0 12
------------
1,501,993
------------
UNITED STATES -- 83.1%
Affymetrix, Inc.*............... 11,700 1,736,719
Albany Molecular Research,
Inc.*......................... 24,100 1,406,838
Alkermes, Inc.*................. 16,400 1,517,000
Allscripts, Inc.*............... 46,500 2,795,813
American Home Products Corp..... 85,000 4,558,124
Amgen, Inc. *................... 101,500 6,229,562
Andrx Corp.*.................... 16,000 1,848,000
Barr Laboratories, Inc.*........ 49,500 2,079,000
Beckman Coulter, Inc............ 25,900 1,662,456
Bio-Technology General Corp.*... 57,500 891,250
Bristol-Myers Squibb Co......... 45,300 2,616,075
Celera Genomics................. 17,500 1,602,344
COR Therapeutics, Inc.*......... 42,000 2,768,720
Cubist Pharmaceuticals, Inc.*... 38,700 1,620,563
Eli Lilly & Co.................. 40,300 2,538,900
Forest Laboratories, Inc. Cl.
A*............................ 64,500 5,450,250
Genentech, Inc.*................ 24,700 3,754,400
Guidant Corp.*.................. 39,900 2,346,619
IDEC Pharmaceuticals Corp.*..... 25,200 2,475,900
ILEX Oncology, Inc.*............ 19,700 827,400
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
UNITED STATES (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
Invitrogen Corp.*............... 34,700 $ 2,014,769
IVAX Corp.*..................... 73,500 2,002,875
Jones Pharma, Inc............... 46,800 1,421,550
Maxim Pharmaceuticals, Inc.*.... 38,700 1,816,481
Medtronic, Inc.................. 139,700 7,185,818
Merck & Co., Inc................ 40,500 2,516,063
Mettler-Toledo International,
Inc.*......................... 36,900 1,510,594
Millennium Pharmaceuticals,
Inc.*......................... 12,000 1,558,500
MiniMed, Inc.*.................. 29,200 3,781,400
OSI Pharmaceuticals, Inc.*...... 100,800 1,965,600
Oxford Health Plans, Inc.*...... 73,500 1,120,875
PE Corp.-PE Biosystems Group*... 35,400 3,416,100
Pfizer, Inc..................... 177,700 6,497,156
Pharmacia & Upjohn, Inc......... 70,000 4,147,500
Pharmacopeia, Inc.*............. 36,200 1,773,800
Schering-Plough Corp............ 106,000 3,895,500
Sepracor, Inc.*................. 13,800 1,004,813
Techne Corp.*................... 22,600 1,559,400
United Therapeutics Corp.*...... 18,000 1,399,500
Waters Corp.*................... 29,300 2,790,825
------------
104,105,052
------------
TOTAL COMMON STOCK
(Cost: $114,586,926)......................... 117,437,238
------------
<CAPTION>
PRINCIPAL
AMOUNT
--------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 10.0%
--------------------------------------------------------------
Citibank Nassau
5.625%, 04/03/00
(Cost: $12,534,814)........... $12,534,814 12,534,814
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 103.7%
(COST: $127,121,740)........................ 129,972,052
LIABILITIES IN EXCESS OF OTHER ASSETS --
(3.7)%...................................... (4,616,800)
------------
NET ASSETS -- 100.0%.......................... $125,355,252
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
24
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF MARCH 31, 2000
------------------------------------------------------------------------
GLOBAL HEALTH CARE FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Banking......................... 10.0%
Biotechnology................... 24.1
Contract Research &
Development................... 1.1
Drugs/Pharmaceuticals........... 44.9
Instruments - Scientific........ 2.2
Medical Information Systems..... 2.2
Medical Instruments............. 5.1
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Medical Products................ 10.6%
Medical Supplies/Equipment...... 1.9
Medical - HMO................... 0.9
Therapeutics.................... 0.7
Liabilities in Excess of Other
Assets........................ (3.7)
-----
NET ASSETS...................... 100.0%
=====
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
25
<PAGE>
INTERNATIONAL CORE GROWTH FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: LORETTA J. MORRIS, Partner, Portfolio Manager; RANDALL S.
KAHN, CFA, Portfolio Manager; LAWRENCE S. SPEIDELL, CFA, Partner, Director of
Global/Systematic Portfolio Management and Research; ERNESTO RAMOS, PH.D.,
Portfolio Manager; CHRISTOPHER ANGIOLETTI, Portfolio Manager; MELISA A.
GRIGOLITE, Portfolio Manager; PEDRO V. MARCAL, Partner, Portfolio Manager; JON
BORCHARDT, Investment Analyst; JOHN L. BRACKEN, JR., Investment Analyst; DAVID
LOPEZ, Investment Analyst; JACOB POZHARNY, PH.D., Investment Analyst; ROLF
SCHILD, Investment Analyst.
CHIEF INVESTMENT OFFICER: CATHERINE SOMHEGYI
GOAL: The International Core Growth Fund seeks to maximize long-term capital
appreciation through investments primarily in companies located outside the
United States with market capitalizations corresponding to the top 75% of
publicly-traded companies as measured by stock market capitalizations within
each country.
MARKET OVERVIEW: Developed non-US stock markets produced strong results in the
12-month period ended March 31, 2000.
During the fiscal year, the European Central Bank raised interest rates 75
basis points for the 11 members of the European Monetary Union. But higher
interest rates did not dampen accelerating economic growth in Europe where the
investment environment was characterized by corporate restructuring and record
levels of merger and acquisition activity.
The Japanese equity market posted impressive results due to signs of a pick-up
in economic growth, increased consumer confidence and structural reform.
The market succumbed to selling pressure in the first quarter of 2000 due to
profit taking and portfolio positioning in anticipation of Japan's March 31st
fiscal year end. However, for the period as a whole, the MSCI Japan Index
climbed 45.1%.
PERFORMANCE: For the 12-month period ended March 31, 2000, the fund gained
61.7% versus 25.1% for the MSCI EAFE Index.
PORTFOLIO SPECIFICS: Stock selection, especially among Japanese technology
companies, contributed to the fund's outperformance during the period. NTT
Mobile Communications of Japan, a provider of wireless communications, was one
of the fund's top performers.
ARM Holdings PLC in the United Kingdom also performed well. The company
designs reduced instruction set computing (RISC) microprocessors and licenses
and sells its products to Alcatel, Intel, Lucent, Samsung and Sony.
MARKET OUTLOOK: Many of the favorable themes that drove developed
international stock markets during the fiscal year remain in place. As a result,
we believe the prospects for these markets remain compelling. Our bottom-up
stock selection continues to uncover promising investment opportunities in the
developed non-US countries.
--------------------------------------------------------------------------------
26
<PAGE>
INTERNATIONAL CORE GROWTH FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN INTERNATIONAL CORE
GROWTH FUND INSTITUTIONAL SHARES WITH THE MSCI EAFE INDEX.
<TABLE>
<S> <C> <C>
SINCE
1 YEAR ANNUALIZED TOTAL RETURNS INCEPTION
61.69% As of 3/31/00 35.08%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INTERNATIONAL CORE GROWTH MSCI EAFE INDEX
FUND INSTITUTIONAL SHARES
<S> <C> <C>
12/27/96 $250,000.00 $250,000.00
12/96 252,400.00 249,475.00
1/97 274,600.00 240,743.38
2/97 277,200.00 244,691.57
3/97 282,600.00 245,572.46
4/97 286,600.00 246,873.99
5/97 313,200.00 262,945.49
6/97 331,200.00 277,433.78
7/97 352,400.00 281,928.21
8/97 334,000.00 260,868.17
9/97 358,600.00 275,476.79
10/97 328,800.00 254,292.63
11/97 325,131.31 251,698.84
12/97 329,722.39 253,888.62
1/98 341,826.12 265,491.33
2/98 365,198.85 282,527.91
3/98 386,902.09 291,229.77
4/98 398,171.08 293,536.31
5/98 407,979.28 292,112.66
6/98 412,779.04 294,332.71
7/98 431,143.32 297,305.47
8/98 369,372.55 260,469.33
9/98 351,843.00 252,472.92
10/98 358,312.24 278,780.60
11/98 379,862.12 293,054.16
12/98 400,733.67 304,600.50
1/99 416,178.61 303,686.69
2/99 399,063.94 296,458.95
3/99 411,795.59 308,821.29
4/99 426,823.10 321,328.55
5/99 410,334.58 304,780.45
6/99 442,685.47 316,663.84
7/99 457,295.55 326,068.76
8/99 464,391.88 327,258.91
9/99 471,488.20 330,554.41
10/99 502,378.09 342,950.20
11/99 567,497.31 354,866.00
12/99 677,509.49 386,715.78
1/00 629,265.14 362,144.25
2/00 705,704.25 371,893.17
3/31/00 665,813.89 386,322.62
</TABLE>
The graph above shows the value of a hypothetical $250,000 investment in the
Fund's Class I shares compared with the Morgan Stanley Capital International
Europe, Australasia, Far East Index ("MSCI EAFE") over the periods indicated.
The Fund's Class I shares calculate their performance based upon the historical
performance of their corresponding series of Nicholas-Applegate Mutual Funds
(renamed Pilgrim Mutual Funds), adjusted to reflect all fees and expenses
applicable to the Fund's Class I shares. The Nicholas-Applegate Institutional
Funds' Class I shares were first available on May 7, 1999. Average annual total
return figures include changes in principal value, reinvested dividends, and
capital gain distributions. Absent expense limitations, total returns would have
been slightly lower. Past performance cannot guarantee future results.
The unmanaged MSCI EAFE Index includes approximately 1,000 companies
representing the stock markets of 20 countries in Europe, Australia, New Zealand
and the Far East. The average company has a market capitalization of over $3
billion. The unmanaged Index differs from the Fund in composition, does not pay
management fees or expenses and includes reinvested dividends. One cannot invest
directly in an index.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions, currency volatility and the social,
economic and political climates of countries where the Fund invests. You may
have a gain or loss when you sell your shares.
--------------------------------------------------------------------------------
27
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000
------------------------------------------------------------------------
INTERNATIONAL CORE GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
--------------------------------------------------------------
COMMON STOCK & EQUIVALENTS -- 93.2%
--------------------------------------------------------------
AUSTRALIA -- 0.7%
The News Corp., Ltd. -- ADR.... 39,100 $ 2,199,375
------------
BELGIUM -- 1.3%
Fortis (B)..................... 55,200 1,415,600
Lernout & Hauspie Speech
Products N.V.*............... 23,500 2,596,750
------------
4,012,350
------------
BERMUDA -- 0.1%
FLAG Telecom Holdings, Ltd.*... 19,000 429,875
------------
BRAZIL -- 1.3%
Petroleo Brasileiro S.A. ADR... 56,200 1,529,797
Tele Norte Leste Participacoes
S.A. -- ADR.................. 52,300 1,392,488
Telesp Celular Participacoes
S.A. ADR..................... 23,800 1,349,163
------------
4,271,448
------------
CANADA -- 5.0%
Abitibi-Consolidated, Inc...... 148,400 1,419,075
Anderson Exploration, Ltd.*.... 94,900 1,372,710
Ballard Power Systems, Inc.*... 25,800 2,180,100
Biovail Corp.*................. 41,400 1,834,538
Bombardier, Inc. -- Cl. B...... 67,000 1,682,153
Falconbridge, Ltd.............. 60,200 895,661
Nortel Networks................ 31,200 3,931,199
Precision Drilling Corp.*...... 41,800 1,395,075
QLT PhotoTherapeutics, Inc.*... 23,800 1,314,950
------------
16,025,461
------------
DENMARK -- 1.0%
Tele Denmark AS B Shares....... 34,000 3,058,929
------------
FINLAND -- 2.9%
Helsingin Puhelin OYJ Series
E............................ 31,800 3,073,371
Nokia OYJ -- ADR............... 21,600 4,692,601
Sonera Group OYJ............... 23,300 1,589,688
------------
9,355,660
------------
FRANCE -- 8.9%
Alcatel........................ 8,900 1,952,813
Axa............................ 8,600 1,218,765
Bouygues S.A................... 2,773 2,197,085
Bouygues S.A. -- Rts.*......... 5 24
Dassault Systemes S.A. A Shares
-- ADR....................... 16,100 1,465,100
Genset S.A. -- ADR*............ 23,700 769,880
Lagardere S.C.A................ 35,700 2,898,589
Pechiney S.A. A Shares......... 29,000 1,422,193
Rhodia S.A..................... 93,000 1,664,145
Societe Television Francaise
1............................ 7,400 5,452,416
Total Fina Elf S.A............. 36,107 5,407,197
Vivendi S.A.................... 33,000 3,805,113
------------
28,253,320
------------
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
GERMANY -- 6.3%
Bayerische Motoren Werke AG.... 53,600 $ 1,690,000
EM.TV & Merchandising AG....... 36,100 2,936,248
Epcos AG*...................... 21,400 2,825,917
Intershop Communications AG*... 10,300 5,194,149
MobilCom AG.................... 6,800 962,373
SAP AG......................... 4,400 3,168,297
Siemens AG..................... 9,400 1,353,726
Thyssen Krupp AG*.............. 78,300 1,929,326
------------
20,060,036
------------
HONG KONG -- 1.5%
China Telecom (Hong Kong), Ltd.
-- ADR*...................... 8,600 1,524,350
HSBC Holdings PLC.............. 136,000 1,589,418
Hutchison Whampoa, Ltd......... 96,000 1,732,228
------------
4,845,996
------------
HUNGARY -- 0.4%
Magyar Tavkoziesi -- ADR....... 26,300 1,173,638
------------
INDIA -- 0.2%
Infosys Technologies, Ltd. --
ADR.......................... 2,700 521,100
------------
ITALY -- 3.2%
Alleanza Assicurazioni SpA..... 160,000 1,570,847
Mediaset SpA................... 155,400 3,087,059
Seat-Pagine Gialle SpA......... 270,700 1,341,790
Telecom Italia Mobile SpA...... 178,800 2,193,421
Telecom Italia SpA............. 130,100 1,942,086
------------
10,135,203
------------
JAPAN -- 19.0%
FANUC, Ltd..................... 33,900 3,556,418
Fast Retailing Co., Ltd........ 6,400 2,817,335
Ito-Yokado Co., Ltd............ 25,000 1,789,109
Keyence Corp................... 5,630 2,250,573
Kyocera Corp................... 10,900 1,823,663
Mitsubishi Electric Corp....... 173,000 1,632,760
Mitsui Fudosan Co., Ltd........ 219,000 2,092,527
Murata Manufacturing Co.,
Ltd.......................... 9,000 2,189,343
NEC Corp....................... 71,000 2,097,499
Nikon Corp..................... 47,000 1,805,489
Nippon Steel Corp.............. 773,000 1,846,488
Nippon Telegraph and Telephone
Corp......................... 88 1,398,528
Nomura Securities Co., Ltd..... 112,000 3,658,168
NTT DoCoMo, Inc................ 84 3,447,960
OMRON Corp..................... 56,000 1,594,306
Pioneer Electronics Corp....... 67,000 1,900,941
Promise Co., Ltd............... 27,700 2,136,275
Softbank Corp.................. 3,800 3,390,045
Sony Corp...................... 12,000 1,696,485
Sony Corp. (New Shares)........ 12,000 1,708,185
Sumitomo Bank, Ltd............. 120,000 1,790,084
Sumitomo Corp.................. 180,000 2,183,201
TDK Corp....................... 16,000 2,180,861
Tokyo Electron, Ltd............ 9,000 1,360,113
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
28
<PAGE>
-------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK & EQUIVALENTS (Continued)
---------------------------------------------------------
JAPAN (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
Toshiba Corp................... 204,000 $ 2,080,476
Toyoda Gosei Co., Ltd.......... 36,000 2,632,477
Toyota Motor Corp.............. 36,000 1,884,854
Yamato Transport Co., Ltd...... 64,000 1,834,544
------------
60,778,707
------------
MEXICO -- 1.2%
Telefonos de Mexico S.A. Series
L -- ADR..................... 57,200 3,832,400
------------
NETHERLANDS -- 8.1%
ASM Lithography Holding N.V. --
ADR*......................... 28,900 3,229,575
Equant N.V.*................... 23,600 1,957,932
Equant N.V. (Regd.)*........... 9,600 816,600
Koninklijke Philips Electronics
N.V. -- ADR.................. 24,600 4,214,288
KPN N.V........................ 37,500 4,293,491
KPNQwest N.V. Series C*........ 40,400 2,149,427
QIAGEN N.V.*................... 5,300 760,736
STMicroelectronics N.V......... 25,100 4,698,405
United Pan-Europe
Communications N.V. A
shares*...................... 55,100 2,574,571
VNU N.V........................ 21,000 1,236,841
------------
25,931,866
------------
PORTUGAL -- 0.7%
Portugal Telecom S.A........... 175,300 2,247,777
------------
RUSSIA -- 0.4%
OAO Lukoil Holding -- ADR...... 19,200 1,198,080
------------
SINGAPORE -- 1.9%
Chartered Semiconductor
Manufacturing, Ltd........... 260,000 2,462,438
Flextronics International,
Ltd.*........................ 52,900 3,726,144
------------
6,188,582
------------
SOUTH KOREA -- 1.8%
Korea Electric Power Corp...... 60,890 1,735,386
Samsung Electronics............ 7,510 2,276,272
SK Telecom Co., Ltd............ 540 1,758,878
------------
5,770,536
------------
SPAIN -- 3.4%
Altadis (ex Tabacalera S.A.)... 237,300 3,179,013
Banco Santander Central Hispano
S.A.......................... 245,000 2,632,767
Endesa S.A..................... 105,700 2,424,430
Telefonica S.A.*............... 106,000 2,677,789
------------
10,913,999
------------
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
SWEDEN -- 3.8%
LM Ericson Telephone Co. Cl. B.
-- ADR....................... 61,800 $ 5,797,612
Netcom AB B shares*............ 25,400 2,190,162
Skandia Forsakrings AB......... 86,000 4,071,065
------------
12,058,839
------------
SWITZERLAND -- 0.4%
UBS AG......................... 4,800 1,261,563
------------
UNITED KINGDOM -- 17.7%
ARM Holdings PLC -- ADR*....... 74,100 4,480,224
BG Group PLC................... 317,700 1,790,366
Billiton PLC................... 380,000 1,783,785
British Aerospace PLC.......... 379,197 2,141,463
British Airways PLC............ 375,200 1,972,244
British Telecom PLC -- ADR..... 157,800 2,957,926
Cable & Wireless PLC........... 112,700 2,117,930
Centrica PLC................... 921,400 3,520,433
CMG PLC*....................... 40,400 3,464,838
Colt Telecom Group PLC*........ 52,700 2,509,558
Energis PLC*................... 21,300 993,232
Invensys PLC*.................. 836,700 3,717,383
Logica PLC..................... 39,500 1,323,931
Marconi Electronics PLC........ 118,700 1,418,322
Nycomed Amersham PLC ORD....... 65,100 531,733
Pearson PLC ORD................ 58,000 2,018,023
Reuters Group PLC -- ADR....... 23,100 2,757,563
Rolls-Royal PLC ORD............ 322,000 1,044,068
Saatchi & Saatchi PLC.......... 87,400 504,734
Shell Transport & Trading
Co........................... 399,900 3,317,394
Shire Pharmaceuticals PLC --
ADR*......................... 42,900 2,198,625
Thus PLC*...................... 132,900 993,292
Vodafone Airtouch PLC.......... 1,591,606 8,848,726
------------
56,405,793
------------
UNITED STATES -- 2.0%
Amdocs, Ltd.*.................. 56,000 4,126,499
Schlumberger Ltd............... 30,800 2,356,200
------------
6,482,699
------------
TOTAL COMMON STOCK & EQUIVALENTS
(Cost: $230,289,962)......................... 297,413,232
------------
--------------------------------------------------------------
PREFERRED STOCK -- 1.2%
--------------------------------------------------------------
BRAZIL -- 0.3%
Banco Bradesco S.A............. 119,136,000 981,763
------------
GERMANY -- 0.9%
ProSieben Media AG............. 23,600 2,698,649
------------
TOTAL PREFERRED STOCK
(Cost: $4,677,192)........................... 3,680,412
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
29
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000 -- CONTINUED
--------------------------------------------------------------------------------
INTERNATIONAL CORE GROWTH FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------
<S> <C> <C>
FOREIGN CORPORATE BOND -- 0.0%
--------------------------------------------------------------
UNITED KINGDOM -- 0.0%
British Aerospace PLC
7.450%, 11/30/03
(Cost: $3)................... $ 2 $ 3
------------
--------------------------------------------------------------
TIME DEPOSIT -- 9.1%
--------------------------------------------------------------
HSBC Holdings PLC
5.625%, 04/03/00
(Cost: $29,094,722).......... 29,094,722 29,094,722
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 103.5%
(Cost: $264,061,879)........................ 330,188,369
LIABILITIES IN EXCESS OF OTHER ASSETS --
(3.5)%...................................... (11,081,166)
------------
NET ASSETS -- 100.0%.......................... $319,107,203
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
30
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF MARCH 31, 2000
------------------------------------------------------------------------
INTERNATIONAL CORE GROWTH FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Advertising..................... 0.2%
Aerospace & Defense............. 1.0
Airlines........................ 0.6
Applications Software........... 0.2
Audio/Video Products............ 1.7
Auto Manufacturers.............. 1.1
Auto Parts & Equipment.......... 0.8
Banking......................... 9.1
Biotechnology................... 0.5
Broadcasting.................... 0.9
Building & Construction......... 0.7
Chemicals....................... 0.5
Computer Services............... 2.0
Computer Software............... 1.0
Computers....................... 2.6
Distribution/Wholesale.......... 0.7
Diversified Financial
Services...................... 3.3
Diversified Manufacturing....... 2.2
Diversified Operations.......... 3.2
Drilling........................ 0.4
Drugs/Pharmaceuticals........... 1.7
Electric........................ 1.8
Electronic
Components/Semiconductors..... 11.1
Electronics..................... 2.6
Insurance....................... 2.1
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Internet Software............... 1.6%
Medical Products................ 0.2
Metals.......................... 0.7
Mining.......................... 0.6
Money Center Banks.............. 1.8
Multimedia...................... 2.2
Oil & Gas Producers............. 4.7
Oil & Gas Services.............. 2.4
Paper & Related Products........ 0.4
Photo Equipment & Supplies...... 0.6
Publishing...................... 0.8
Real Estate Development......... 0.7
Regional/Commercial Banks....... 0.8
Retail - Apparel................ 0.9
Retail - Miscellaneous.......... 0.6
Steel........................... 0.6
Telecommunication Equipment..... 4.5
Telecommunications.............. 21.5
Television...................... 4.3
Tobacco......................... 1.0
Transportation.................. 0.6
Liabilities in Excess of Other
Assets........................ (3.5)
-----
NET ASSETS...................... 100.0%
=====
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
31
<PAGE>
INTERNATIONAL SMALL CAP GROWTH FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: LORETTA J. MORRIS, Partner, Portfolio Manager; RANDALL S.
KAHN, CFA, Portfolio Manager; LAWRENCE S. SPEIDELL, CFA, Partner, Director of
Global/Systematic Portfolio Management and Research; PEDRO V. MARCAL, Partner,
Portfolio Manager; ERNESTO RAMOS, PH.D., Portfolio Manager; CHRISTOPHER
ANGIOLETTI, Portfolio Manager; MELISA A. GRIGOLITE, Portfolio Manager; JON
BORCHARDT, Investment Analyst; JOHN L. BRACKEN, JR., Investment Analyst; DAVID
LOPEZ, Investment Analyst; JACOB POZHARNY, PH.D., Investment Analyst; ROLF
SCHILD, Investment Analyst.
CHIEF INVESTMENT OFFICER: CATHERINE SOMHEGYI
GOAL: The International Small Cap Growth Fund seeks to maximize long-term
capital appreciation through investments primarily in companies located outside
the United States with market capitalizations corresponding to the bottom 25% of
publicly-traded companies as measured by this market capitalization in each
country.
MARKET OVERVIEW: Developed non-US stock markets posted impressive gains in the
12-month period ended March 31, 2000.
Smaller-capitalization stocks benefited from the positive themes of global
economic recovery, the technology revolution, structural reforms and changing
business landscapes. In the technology sector, nimble smaller-cap companies,
those forming alliances with large companies instead of competing directly,
emerged as winners.
Significant changes in the areas of structural reform and corporate
restructuring and consolidation helped smaller companies thrive in Japan and
elsewhere in Asia.
In Europe, the advent of the Economic Monetary Union (EMU) created a favorable
environment for smaller companies as EMU fosters increased competition and a
heightened desire among companies to boost efficiency.
PERFORMANCE: For the 12-month period ended March 31, 2000, the fund gained
143.8% versus its benchmark, the Salomon EPAC/EMI Index, which advanced 23.6%.
PORTFOLIO SPECIFICS: Technology companies in Japan, the United Kingdom, and
Europe drove the fund's outperformance during the fiscal year.
One of the fund's major contributors to performance during the period was
Yaskawa Electric, a Japanese manufacturer of industrial robots, servo motors and
other automation equipment. Other top performers included Dialog Semiconductor,
a German chip manufacturer supplying the mobile communications industry, and ARM
Holdings PLC, a UK-based designer of reduced instruction set computing (RISC)
microprocessors.
MARKET OUTLOOK: We expect the positive themes of global economic recovery, the
technology revolution and structural reform to continue. As a result, we remain
optimistic in our outlook for international small-cap stocks. With our bottom-up
approach to stock selection and our focus on companies benefiting from positive
change, we are confident that we will continue to find exciting growth
opportunities in the world's developed markets.
--------------------------------------------------------------------------------
32
<PAGE>
INTERNATIONAL SMALL CAP GROWTH FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN INTERNATIONAL SMALL
CAP GROWTH FUND INSTITUTIONAL SHARES WITH THE SALOMON EPAC EMI INDEX.
<TABLE>
<S> <C> <C>
ANNUALIZED TOTAL RETURNS
As of 3/31/00 SINCE
1 YEAR 5 YEARS INCEPTION
143.81% 39.44% 19.40%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INTERNATIONAL SMALL CAP SALOMON
GROWTH FUND INSTITUTIONAL SHARES EPAC
EMI INDEX
<S> <C> <C>
6/7/90 $250,000.00 $250,000.00
6/90 253,508.33 253,375.00
7/90 262,592.38 266,043.75
8/90 231,247.60 232,043.36
9/90 197,793.78 197,004.81
10/90 227,469.45 231,953.47
11/90 209,211.23 210,010.67
12/90 206,310.17 207,595.54
1/91 209,432.33 205,042.12
2/91 232,916.67 234,322.13
3/91 224,306.52 226,284.88
4/91 226,377.62 229,452.87
5/91 225,592.84 225,299.78
6/91 212,831.81 212,795.64
7/91 220,947.79 218,456.00
8/91 214,702.34 209,215.31
9/91 230,017.77 225,827.01
10/91 231,796.57 226,775.48
11/91 220,956.22 213,055.57
12/91 230,619.37 221,428.65
1/92 228,689.86 217,775.08
2/92 222,705.81 213,898.68
3/92 209,707.21 199,182.45
4/92 211,266.03 200,975.09
5/92 225,491.28 217,093.30
6/92 218,711.51 208,235.89
7/92 209,576.66 195,158.68
8/92 215,074.55 202,945.51
9/92 210,436.11 197,668.92
10/92 199,500.45 184,365.81
11/92 199,946.00 184,826.72
12/92 202,112.08 187,284.92
1/93 202,684.73 188,933.02
2/93 206,968.14 195,073.35
3/93 223,097.85 214,853.78
4/93 245,660.48 235,135.98
5/93 258,885.20 247,504.13
6/93 252,214.60 236,985.21
7/93 256,611.54 244,782.02
8/93 272,863.60 257,510.69
9/93 263,731.77 252,308.97
10/93 260,312.04 250,744.65
11/93 238,402.45 229,105.39
12/93 254,717.12 244,111.79
1/94 280,392.61 269,206.49
2/94 279,781.29 271,683.19
3/94 274,075.62 267,336.25
4/94 283,856.76 275,810.81
5/94 279,985.06 271,646.07
6/94 284,875.63 278,219.91
7/94 287,728.46 281,252.50
8/94 294,452.99 284,149.40
9/94 288,339.78 275,454.43
10/94 294,452.99 280,798.25
11/94 279,985.06 263,613.39
12/94 276,653.41 267,145.81
1/95 265,298.24 258,597.15
2/95 259,723.88 254,382.01
3/95 270,253.22 265,142.37
4/95 281,195.48 273,096.65
5/95 277,892.16 267,880.50
6/95 274,382.38 264,344.48
7/95 292,344.20 280,020.10
8/95 289,247.34 272,767.58
9/95 293,376.49 274,867.89
10/95 282,640.69 267,034.16
11/95 285,944.01 269,517.58
12/95 293,256.86 279,947.91
1/96 297,214.16 284,874.99
2/96 300,963.18 289,148.11
3/96 313,459.92 295,856.35
4/96 327,206.34 311,536.74
5/96 330,330.52 308,826.37
6/96 333,246.43 309,413.14
7/96 319,500.01 297,779.20
8/96 322,624.20 300,012.55
9/96 329,913.96 301,482.61
10/96 330,955.36 299,191.34
11/96 346,855.62 303,589.45
12/96 346,834.50 298,064.13
1/97 356,598.50 290,135.62
2/97 361,268.25 295,445.10
3/97 361,480.51 292,165.66
4/97 359,357.90 287,812.39
5/97 383,980.18 305,973.36
6/97 409,451.50 313,224.92
7/97 425,795.60 307,117.04
8/97 408,177.93 293,327.48
9/97 437,257.69 297,170.07
10/97 406,267.58 285,521.01
11/97 398,120.21 274,128.72
12/97 395,704.11 267,439.98
1/98 405,100.07 279,956.17
2/98 446,979.20 300,689.72
3/98 495,301.28 314,822.14
4/98 521,878.42 317,343.86
5/98 534,764.31 324,674.51
6/98 536,106.59 315,518.69
7/98 547,288.71 314,774.06
8/98 460,817.09 277,882.54
9/98 454,523.27 269,501.60
10/98 472,583.80 288,774.02
11/98 505,473.53 298,255.25
12/98 539,503.77 305,264.25
1/99 582,110.73 304,064.56
2/99 571,043.99 298,442.40
3/99 584,324.08 309,117.69
4/99 619,184.32 324,963.06
5/99 595,114.16 316,289.80
6/99 660,961.28 326,986.72
7/99 717,955.01 339,585.52
8/99 764,712.01 344,794.76
9/99 787,398.83 343,681.07
10/99 841,072.54 340,824.39
11/99 1,033,636.30 352,795.51
12/99 1,230,678.44 375,381.48
1/00 1,269,363.27 365,692.88
2/00 1,604,446.22 378,748.12
3/31/00 1,424,659.19 382,005.35
</TABLE>
The graph above shows the value of a hypothetical $250,000 investment in the
Fund's Class I shares compared with the Salomon EPAC EMI Index for the periods
indicated. The Fund's Class I shares calculate their performance based upon the
historical performance of their corresponding series of Nicholas-Applegate
Mutual Funds (renamed Pilgrim Mutual Funds), adjusted to reflect all fees and
expenses applicable to the Fund's Class I shares. [The Fund's performance
includes historical performance of comparable managed institutional separate
accounts managed by the Investment Adviser prior to the Nicholas-Applegate
Mutual Fund's inception.] The Nicholas-Applegate Institutional Funds' Class I
shares were first available on May 7, 1999. Average annual total return figures
include changes in principal value, reinvested dividends, and capital gain
distributions. Absent expense limitations, total returns would have been
slightly lower. Past performance cannot guarantee future results.
The unmanaged Salomon EPAC EMI Index 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 market capitalizations greater than
$100 million. The unmanaged Index differs from the Fund in composition, does not
pay management fees or expenses and includes reinvested dividends. One cannot
invest directly in an index.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions, currency volatility and the social,
economic and political climates of countries where the Fund invests. You may
have a gain or loss when you sell your shares.
--------------------------------------------------------------------------------
33
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000
------------------------------------------------------------------------
INTERNATIONAL SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
--------------------------------------------------------------
COMMON STOCK & EQUIVALENTS -- 88.6%
--------------------------------------------------------------
AUSTRALIA -- 0.3%
Davnet, Ltd..................... 281,500 $ 922,701
------------
BRAZIL -- 0.0%
Telec do Rio Janeiro S.A.*...... 1,000 20
------------
BRITISH VIRGIN ISLANDS -- 0.8%
OpenTV Corp. Cl. A*............. 17,200 2,036,050
------------
CANADA -- 5.4%
Anderson Exploration, Ltd.*..... 114,200 1,651,880
Cell-Loc, Inc.*................. 58,200 2,084,585
Certicom Corp.*................. 19,000 1,911,386
Clearnet Communications, Inc.
Cl. A*........................ 26,500 1,091,469
C-MAC Industries, Inc.*......... 47,800 2,057,790
Cognos, Inc.*................... 35,900 2,245,994
GT Group Telecom, Inc. Cl. B*... 26,200 546,925
Petro-Canada.................... 69,600 1,157,763
QTL Phototherapeutics, Inc.*.... 19,000 1,049,750
Visible Genetics, Inc.*......... 22,800 843,600
------------
14,641,142
------------
DENMARK -- 1.6%
Vestas Wind Systems AS*......... 11,700 4,255,639
------------
FINLAND -- 2.1%
Eimo OYJ........................ 20,500 794,466
JOT Automation Group OYJ........ 237,300 2,134,480
Perlos OYJ...................... 73,700 2,623,475
------------
5,552,421
------------
FRANCE -- 10.8%
Altran Technologies S.A......... 13,000 3,172,124
Bouygues S.A.*.................. 2,956 2,342,078
Bouygues S.A. -- Rts.*.......... 12 57
Business Objects S.A. -- ADR*... 22,800 2,268,600
Coflexip S.A.................... 14,200 1,562,618
Devoteam S.A.*.................. 6,700 1,045,030
FI System*...................... 11,300 1,054,265
Galeries Lafayette.............. 11,000 2,105,180
Havas Advertising............... 4,300 2,324,789
Hermes International............ 16,300 2,261,633
Integra-Net S.A.*............... 30,500 1,079,862
Liberty Surf Group S.A.*........ 3,800 212,719
Metropole Television -M6........ 5,400 3,689,424
Rhodia S.A...................... 86,500 1,547,834
Usinor S.A...................... 129,000 2,049,106
Wavecom S.A.-- ADR*............. 21,000 2,394,000
------------
29,109,319
------------
GERMANY -- 17.9%
ADVA AG*........................ 5,000 3,157,770
Aixtron......................... 24,400 5,603,606
Ce Consumer Electronics AG...... 16,300 3,244,274
Dialog Semiconductor PLC*....... 27,300 2,160,403
EM. TV & Merchandising AG....... 21,800 1,773,136
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
GERMANY (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
Epocs AG*....................... 28,700 $ 3,789,898
FAG Kugelfischer George
Schaefer...................... 95,700 849,819
Heidelberg Zement AG............ 23,459 1,322,182
Intershop Communications AG*.... 8,200 4,135,148
Ixos Software AG*............... 56,800 2,337,133
Kamps AG........................ 36,640 2,131,698
Primacom AG*.................... 16,600 1,270,763
Senator Film AG*................ 20,300 2,329,066
SGL Carbon AG*.................. 16,700 1,278,418
Singulus Technologies AG*....... 39,000 3,842,001
Software AG*.................... 30,700 3,407,711
Suess MicroTec AG*.............. 50,900 1,850,836
Telegate AG*.................... 34,300 3,938,600
------------
48,422,462
------------
HONG KONG -- 3.2%
China Aerospace International,
Ltd.*......................... 298,600 94,912
China.com Corp. Cl. A*.......... 20,800 1,684,800
Computer & Technologies
Holdings, Ltd.*............... 1,012,000 1,923,534
Giordano International, Ltd..... 1,252,000 1,519,476
Global Tech (Holdings), Ltd..... 602,000 989,610
Legend Holdings, Ltd.*.......... 1,296,000 2,022,269
Sino-i.com, Ltd.*............... 4,085,000 388,223
------------
8,622,824
------------
INDONESIA -- 0.0%
PT Lippo Bank TBK............... 500 10
------------
ISRAEL -- 1.4%
BATM Advanced Communications.... 23,400 2,129,678
Nice Systems, Ltd. -- ADR*...... 22,000 1,567,500
------------
3,697,178
------------
ITALY -- 2.7%
Class Editori SpA............... 110,900 1,729,759
Gruppo Editoriale L'Espresso.... 194,732 3,821,814
I.Net SpA*...................... 1,300 218,939
Saipem SpA...................... 295,700 1,443,072
------------
7,213,584
------------
JAPAN -- 11.2%
Alpha Systems, Inc.............. 7,800 1,711,110
Alps Electric Co., Ltd.......... 110,000 1,503,632
Bank of Yokohama, Ltd.*......... 129,000 523,219
Capcom Co., Ltd.*............... 7,450 323,234
Citizen Watch Co., Ltd.......... 109,000 919,271
Disco Corp...................... 6,700 1,208,502
Disco Corp. (New Shares)*....... 6,150 1,121,289
Drake Beam Morin-Japan, Inc..... 4,000 1,212,889
Fukuyama Transporting Co.,
Ltd........................... 194,000 1,284,317
Funai Electric Co., Ltd......... 2,600 1,622,386
Jafco Co., Ltd.................. 7,000 1,569,736
JUSTSYSTEM Corp................. 24,900 1,917,906
Kubota Corp..................... 66,000 227,154
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
34
<PAGE>
-------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK & EQUIVALENTS (Continued)
---------------------------------------------------------
JAPAN (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
Mazda Motor Corp................ 236,000 $ 805,343
Mitsukoshi, Ltd.*............... 109,000 471,857
Nippon System Development....... 9,360 907,116
Nitto Denko Corp.*.............. 35,000 1,399,113
NKK Corp.*...................... 688,000 442,724
Softbank Technology Corp.*...... 1,000 438,746
Sumitomo Metal Industries,
Ltd.*......................... 1,172,000 914,152
Sunkus & Associates, Inc........ 15,600 898,903
Toyo Communication Equipment
Co., Ltd...................... 93,000 2,180,715
Toyo Trust and Banking Co.,
Ltd........................... 190,000 722,469
Tsuruha Co., Ltd................ 12,200 915,907
Yaskawa Electric Corp.*......... 364,000 4,965,008
------------
30,206,698
------------
MEXICO -- 0.4%
Corporacion Interamericana de
Entretenimiento S.A. Cl. B*... 241,000 1,210,064
------------
NETHERLANDS -- 3.9%
ASM International N.V.*......... 76,400 2,215,600
BE Semiconductor Industries
N.V.*......................... 102,100 1,724,396
Completel Europe N.V. *......... 64,300 1,280,412
Completel Europe N.V. (New
Shares)*...................... 30,300 604,106
Meta4 N.V.*..................... 49,800 905,419
Versatel Telecom International
N.V........................... 82,700 3,833,330
------------
10,563,263
------------
NORWAY -- 2.1%
Frontline, Ltd.*................ 150,300 1,282,302
NetCom ASA*..................... 42,600 2,130,202
Schibsted ASA................... 91,900 2,275,938
------------
5,688,442
------------
SINGAPORE -- 0.8%
Datacraft Asia, Ltd............. 243,100 2,272,985
------------
SOUTH KOREA -- 0.3%
Mirae Corp...................... 105,600 592,373
SEROME Technology, Inc.......... 4,050 206,668
------------
799,041
------------
SPAIN -- 0.4%
Acerinox S.A.................... 26,000 1,027,519
------------
SWEDEN -- 5.8%
Allgon AB Cl. B................. 35,800 890,856
Effnet Group AB*................ 23,000 1,677,083
Enea Data AB.................... 25,100 4,793,403
Framtidsfabriken AB*............ 48,900 1,194,201
Modern Times Group AB Cl. B*.... 56,900 2,765,972
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
SWEDEN (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
Nobel Biocare AB................ 51,400 $ 1,380,185
Ortivus AB Cl. B*............... 58,900 303,362
Rottneros AB.................... 801,700 890,778
Tele1 Europe Holding AB*........ 25,200 476,875
Telelogic AB*................... 15,300 1,381,250
------------
15,753,965
------------
SWITZERLAND -- 3.8%
Ascom Holding AG................ 600 2,363,625
Gretag Imaging Holdings AG...... 6,400 1,281,771
Kudelski S.A.*.................. 320 3,993,505
Sez Holdings AG................. 1,500 1,299,092
Straumann Holding AG............ 500 421,002
Synthes-Stratec, Inc.*.......... 1,800 866,061
------------
10,225,056
------------
TAIWAN -- 0.2%
Macronix International Co., Ltd.
-- ADR*....................... 18,000 522,000
------------
UNITED KINGDOM -- 13.4%
ARM Holdings PLC*............... 29,000 1,753,394
Autonomy Corp. PLC*............. 20,400 3,468,000
Baltimore Technologies PLC*..... 14,400 1,975,620
Bowthorpe PLC................... 31,800 587,967
Cambridge Antibody Technology
Group PLC*.................... 23,600 767,100
Capital Radio PLC............... 53,300 1,454,004
Celltech Chiroscience Group
PLC........................... 153,500 2,781,820
CMG PLC*........................ 32,100 2,753,002
Cookson Group PLC............... 443,400 1,285,620
Eidos PLC*...................... 227,600 1,426,945
Filtronic PLC................... 18,200 549,477
Independent Energy Holdings PLC
-- ADR*....................... 32,900 1,476,388
Jazztel PLC -- ADR*............. 25,000 2,023,438
Kingston Communication (Hull)
PLC*.......................... 79,300 1,270,133
NXT PLC*........................ 34,600 1,021,152
Oxford GlycoSciences PLC*....... 46,800 1,287,886
Pace Microtechnology PLC........ 226,000 3,396,265
Powderject Pharmaceuticals
PLC*.......................... 82,400 864,302
Psion PLC....................... 35,800 2,376,991
Saatchi & Saatchi PLC........... 76,800 443,519
Scoot.com PLC*.................. 338,700 1,248,158
Shire Pharmaceuticals PLC --
ADR*.......................... 43,000 2,203,750
------------
36,414,931
------------
UNITED STATES -- 0.1%
Via Net.Works, Inc.*............ 12,500 332,031
------------
TOTAL COMMON STOCK & EQUIVALENTS
(Cost: $177,967,977)......................... 239,489,345
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
35
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000 -- CONTINUED
--------------------------------------------------------------------------------
INTERNATIONAL SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
PREFERRED STOCK -- 1.9%
--------------------------------------------------------------
GERMANY -- 1.9%
Marschollek, Lautenschlaeger &
Partner AG
(Cost $2,689,185)............. 8,400 $ 4,983,535
------------
<CAPTION>
PRINCIPAL
AMOUNT
--------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 9.6%
--------------------------------------------------------------
Citibank Nassau
5.625%, 04/03/00
(Cost: $25,961,732)........... $25,961,732 25,961,732
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 100.1%
(Cost: $206,618,894)........................ 270,434,612
LIABILITIES IN EXCESS OF OTHER ASSETS --
(0.1%)........................................ (275,807)
------------
NET ASSETS -- 100.0%.......................... $270,158,805
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
36
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF MARCH 31, 2000
------------------------------------------------------------------------
INTERNATIONAL SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Advertising..................... 1.0%
Apparel......................... 0.8
Application Software............ 2.3
Banking......................... 9.6
Biotechnology................... 1.1
Broadcasting.................... 2.5
Building & Construction......... 2.0
Building Materials.............. 0.5
Chemicals....................... 1.0
Computers....................... 3.9
Computer Services............... 4.6
Computer Software............... 5.7
Consulting Services............. 0.8
Data Processing................. 1.3
Distribution/Wholesale.......... 0.4
Diversified Financial
Services...................... 2.3
Diversified Manufacturing....... 0.8
Drugs/Pharmaceuticals........... 2.2
Electric........................ 1.9
Electronic
Components/Semiconductors..... 12.9
Electronics..................... 0.5
Entertainment................... 0.4
Entertainment Software.......... 0.5
Food............................ 0.8
Industrial
Automation/Robotics........... 0.8
Internet Content................ 0.6
Internet Software............... 3.2
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Machinery....................... 2.6%
Medical Products................ 1.6
Metal Fabrication & Hardware.... 0.5
Metals.......................... 0.8
Networking Products............. 0.8
Oil & Gas Producers............. 1.0
Oil & Gas Services.............. 1.1
Paper & Related Products........ 0.3
Power Equipment & Supplies...... 1.6
Publishing...................... 2.9
Retail - Apparel................ 0.6
Retail - Automobiles............ 0.3
Retail - Convenience Stores..... 0.3
Retail - Department Stores...... 1.0
Retail - Drug Stores............ 0.3
Retail - Jewelry................ 0.3
Steel........................... 0.4
Telecommunications.............. 6.6
Telecommunications Equipment.... 5.0
Telecommunications Services..... 2.7
Television...................... 2.9
Therapeutics.................... 0.4
Transportation - Other.......... 1.0
Venture Capital................. 0.7
Liabilities in Excess of Other
Assets........................ (0.1)
-----
NET ASSETS...................... 100.0%
=====
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
37
<PAGE>
EMERGING COUNTRIES FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: PEDRO V. MARCAL, Partner, Portfolio Manager; ERNESTO RAMOS,
PH.D., Portfolio Manager; LAWRENCE S. SPEIDELL, CFA, Partner, Director of
Global/Systematic Portfolio Management and Research; JASON CAMPBELL, Portfolio
Manager; JESSICA GONCALVES, Portfolio Manager; THEODORA JAMISON, Investment
Analyst; JOHN MAZUR, Investment Analyst; ANDREW PARMET, Investment Analyst.
CHIEF INVESTMENT OFFICER: CATHERINE SOMHEGYI
GOAL: The Emerging Countries Fund seeks to maximize long-term capital
appreciation through investments in companies located in developing countries
around the world.
MARKET OVERVIEW: Following the economic and currency crises in 1997 and 1998,
structural reform and improving economies paved the way for solid stock market
returns in the world's emerging countries. Although performance weakened in the
third quarter of 1999 after severe earthquakes in Greece, Turkey and Taiwan,
emerging markets rebounded decisively in the six months that followed.
Themes of economic revitalization and restructuring have encouraged continued
investor interest in markets in Asia, Latin America and The Europe, Middle East,
and Africa (EMEA) region. During the period, countries in Asia exhibited signs
that they are on the road to recovery, with most countries expecting real GDP
growth to move into positive territory in 2000. Financial fundamentals in Latin
America continue to improve. And the economies of Eastern Europe are on firm
ground as stronger European Union growth boosts exports throughout the region.
PERFORMANCE: For the 12-month period ended March 31, 2000, the fund gained
76.1% versus 51.5% for the MSCI Emerging Markets Free Index.
PORTFOLIO SPECIFICS: The fund's strong returns during the period can be
attributed to stock selection, particularly in the technology sector.
One of the fund's best-performing stocks was Datacraft Asia of Singapore, an
information technology service provider and the premier Asian systems integrator
for Cisco Systems and Ascend Communications. In the last few years, the company
has benefited from a focus on China.
Infosys Technologies of India, a software contract programmer whose client
list includes blue-chip US companies, was also a major contributor to fund
performance as was Samsung Electronics of South Korea, the world's largest maker
of dynamic random access memory (DRAM) chips.
The fund's holdings were diversified across the world's emerging market
regions throughout the period.
MARKET OUTLOOK: We continue to identify excellent opportunities for growth in
the emerging countries of the world. We are seeing improvements in demand and
productivity in Latin America as technology advances reach the region and are
embraced by individuals and businesses. The outlook for growth among
resource-oriented companies in emerging countries is also improving as prices
stabilize and demand continues to grow. Overall, we believe that emerging
countries will continue to provide opportunities that are best identified
through an investment style focused on stock selection supported by fundamental
research.
--------------------------------------------------------------------------------
38
<PAGE>
EMERGING COUNTRIES FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN EMERGING COUNTRIES
FUND INSTITUTIONAL SHARES WITH THE MSCI EMERGING MARKETS FREE INDEX.
<TABLE>
<S> <C> <C>
ANNUALIZED TOTAL RETURNS
As of 3/31/00 SINCE
1 YEAR 5 YEARS INCEPTION
76.13% 19.57% 15.27%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
EMERGING COUNTRIES MSCI EMF
FUND INSTITUTIONAL SHARES INDEX
<S> <C> <C>
11/28/94 $250,000.00 $250,000.00
12/94 237,014.39 234,359.19
6/95 251,427.42 226,601.59
12/95 253,510.75 222,111.98
6/96 310,806.99 245,795.83
12/96 324,695.98 235,517.31
6/97 406,782.05 277,308.82
12/97 357,562.74 208,217.12
6/98 331,317.54 168,935.51
12/98 281,673.68 155,462.35
6/99 378,794.77 217,444.40
12/99 504,083.22 285,413.34
3/31/00 533,827.96 264,770.80
</TABLE>
The graph above shows the value of a hypothetical $250,000 investment in the
Fund's Class I shares compared with the Morgan Stanley Capital International
Emerging Markets Free Index ("MSCI EMF") for the periods indicated. The Fund's
Class I shares calculate their performance based upon the historical performance
of their corresponding series of Nicholas-Applegate Mutual Funds (renamed
Pilgrim Mutual Funds), adjusted to reflect all fees and expenses applicable to
the Fund's Class I shares. The Nicholas-Applegate Institutional Funds' Class I
shares were first available on May 7, 1999. Average annual total return figures
include changes in principal value, reinvested dividends, and capital gain
distributions. Absent expense limitations, total returns would have been
slightly lower. Past performance cannot guarantee future results.
The unmanaged MSCI EMF Index is composed of approximately 900 companies which
represent the stock markets of 25 countries, including South Korea, Brazil and
South Africa. The unmanaged Index differs from the Fund in composition, does not
pay management fees or expenses and includes reinvested dividends. One cannot
invest directly in an index.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions, currency volatility and the social,
economic and political climates of countries where the Fund invests. Emerging
markets involve heightened risks related to the same factors, in addition to
those associated with their relatively small size and lesser liquidity. You may
have a gain or loss when you sell your shares.
--------------------------------------------------------------------------------
39
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000
------------------------------------------------------------------------
EMERGING COUNTRIES FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
--------------------------------------------------------------
COMMON STOCK -- 94.4%
--------------------------------------------------------------
ARGENTINA -- 0.5%
Telecom Argentina Stet-France
Telecom S.A. -- ADR........... 41,100 $ 1,428,225
------------
BRAZIL -- 11.2%
Banco Bradesco S.A.............. 255,502,000 2,105,512
CIA Vale do Rio Doce A*......... 55,500 1,510,745
Electropaulo
Metropolitana-Electricidad de
Sao Paulo S.A.*............... 58,625,000 4,387,636
Embratel Participacoes S.A...... 126,800 3,249,250
Globo Cabo S.A.*................ 118,400 2,220,000
Petroleo Brasileiro S.A......... 21,312,600 5,764,784
Tele Centro Sul Participacoes
S.A. -- ADR................... 44,300 3,588,300
Tele Norte Leste Participacoes
S.A........................... 119,100 3,171,038
Telecomunicacoes Brasileiras
S.A. -- ADR................... 14,200 2,125,563
Telesp Celular Participacoes
S.A. -- ADR................... 99,100 5,617,731
------------
33,740,559
------------
BRITISH VIRGIN ISLANDS -- 0.6%
MIH, Ltd.*...................... 28,300 1,726,300
------------
CZECH REPUBLIC -- 1.6%
Ceske Radiokomunikace -- GDR
144A*......................... 39,700 2,054,475
Cesky Telecom A.S.*............. 127,587 2,804,778
------------
4,859,253
------------
DOMINICAN REPUBLIC -- 0.3%
Tricom S.A. -- ADR*............. 29,800 715,200
------------
EGYPT -- 0.9%
Al-Ahram Beverages Co. -- GDR
144A*......................... 50,900 923,835
Mobinil-Egyptian Mobile Phone
Services*..................... 37,200 1,799,694
------------
2,723,529
------------
GREECE -- 1.4%
Panafon Hellenic Telecom S.A.... 291,200 4,287,127
------------
HONG KONG -- 2.3%
China Telecom (Hong Kong), Ltd
Cl. H*........................ 468,000 4,117,126
Giordano International, Ltd..... 1,177,000 1,428,453
PetroChina Co., Ltd.*........... 8,604,000 1,414,386
------------
6,959,965
------------
HUNGARY -- 2.0%
EGIS............................ 25,500 1,265,743
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
HUNGARY (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
Magyar Tavkozlesi -- ADR........ 67,200 $ 2,998,800
Tiszai Vegyi Kombinat........... 86,900 1,593,403
------------
5,857,946
------------
INDIA -- 9.5%
Gujarat Ambuja Cements, Ltd. --
GDR 144A...................... 109,900 522,025
Himachal Futuristic
Communications, Ltd.*......... 105,200 4,084,114
ICICI Ltd. -- ADR*.............. 65,500 1,473,750
Infosys Technologies, Ltd.*..... 51,020 10,415,721
NIIT, Ltd....................... 150 7,055
Reliance Industries, Ltd........ 683,100 4,926,842
Satyam Computer Services,
Ltd........................... 48,300 4,905,543
Videsh Sanchar Nigam, Ltd.
144A.......................... 63,900 1,710,923
Zee Telefilms, Ltd.............. 24,700 578,911
------------
28,624,884
------------
ISRAEL -- 6.5%
Bank Hapoalim, Ltd.............. 733,100 2,335,067
Bezeq Israeli Telecommunication
Corp., Ltd.................... 2,600 14,051
Check Point Software
Technologies, Ltd.*........... 17,600 3,010,700
Ectel, Ltd.*.................... 25,300 502,838
Gilat Satellite Networks,
Ltd.*......................... 18,300 2,145,675
Leumi Bank Le Israel............ 1,065,000 2,466,598
M-Systems Flash Disk Pioneers,
Ltd.*......................... 18,300 969,900
Orckit Communications, Ltd.*.... 45,100 3,021,700
RADWARE, Ltd.*.................. 33,200 1,286,500
Teva Pharmaceutical Industries,
Ltd........................... 99,600 3,716,325
------------
19,469,354
------------
MALAYSIA -- 3.9%
AMMB Holdings Berhad............ 550,000 2,055,263
Malayan Banking Berhad.......... 688,000 3,023,579
Tenaga Nasional Berhad.......... 1,947,000 6,558,316
------------
11,637,158
------------
MEXICO -- 13.5%
Carso Global Telecom S.A.*...... 2,688,000 8,268,763
Cemex S.A. -- ADR*.............. 59,300 1,341,663
Coca-Cola Femsa S.A. L Shares --
ADR........................... 77,800 1,444,163
Controladora Comercial Mexicana
S.A........................... 1,322,000 1,797,612
Corporacion Interamericana de
Entretenimiento S.A. Cl. B*... 1,366,000 6,858,701
Fomento Economica Mexicano S.A.
-- ADR........................ 30,700 1,381,500
Grupo Financiero Banamex Accival
S.A.*......................... 705,000 3,228,370
Grupo Mexico S.A. B Shares...... 390,000 1,823,726
Grupo Radio Centro S.A.......... 45,500 590,931
Grupo Televisa S.A. -- GDR
144A*......................... 45,200 3,073,600
Telefonos de Mexico S.A. Cl. L
-- ADR*....................... 115,500 7,738,500
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
40
<PAGE>
-------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK (Continued)
---------------------------------------------------------
MEXICO (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
Tubos de Acero de Mexico S.A. --
ADR........................... 200 $ 3,275
TV Azteca S.A. de C.V. -- ADR... 196,300 2,895,425
------------
40,446,229
------------
POLAND -- 1.5%
Optimus S.A. O Shares........... 23,200 1,415,764
Prokom Software S.A............. 24,000 1,365,783
Softbank S.A. -- GDR............ 28,000 1,782,200
------------
4,563,747
------------
REPUBLIC OF CHINA -- 1.0%
United Microelectronics Corp.,
Ltd........................... 478,000 1,853,565
Yizheng Chemical Fibre Co.,
Ltd.*......................... 6,333,000 1,211,863
------------
3,065,428
------------
RUSSIA-- 2.9%
Golden Telecom, Inc.*........... 27,800 1,264,900
OAO Lukoil Holding.............. 56,100 3,500,640
Surgutneftegaz.................. 124,600 1,794,240
Vimpel-Communications -- ADR*... 51,500 2,179,094
------------
8,738,874
------------
SINGAPORE -- 2.6%
Datacraft Asia, Ltd............. 502,000 4,693,700
International Press Softcom,
Ltd.*......................... 2,097,000 1,005,285
Natsteel Electronics, Ltd....... 305,000 1,997,077
------------
7,696,062
------------
SOUTH AFRICA -- 3.6%
DataTec, Ltd.*.................. 150,000 2,658,518
Dimension Data Holdings,
Ltd.*......................... 412,660 3,675,794
Impala Platinum Holdings,
Ltd........................... 53,500 1,855,539
Ixchange Technology Holdings,
Ltd.*......................... 279,700 1,100,424
M-Cell, Ltd..................... 271,600 1,493,904
------------
10,784,179
------------
SOUTH KOREA -- 10.6%
Cybertek Holdings, Inc.*........ 16,560 672,738
Hanwha Chemical Corp.*.......... 179,830 1,374,860
Housing & Commercial Bank....... 7,369 143,346
Jang Media Interactive Corp..... 10,210 693,753
Korea Electric Power Corp....... 64,050 1,825,447
Korea Next Education Service,
Inc.*......................... 4,970 714,979
LG Home Shopping, Inc........... 6,180 659,796
Mirae Co........................ 169,530 950,994
Pohang Iron & Steel Co., Ltd.
.............................. 4,890 471,192
Pohang Iron & Steel Co., Ltd. --
ADR........................... 73,300 2,015,750
Samsung Electronics............. 47,887 14,514,495
SEROME Technology, Inc.......... 12,970 661,848
SK Telecom Co., Ltd............. 1,950 6,351,504
Turbo Tek Co., Ltd.............. 31,670 667,642
------------
31,718,344
------------
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
TAIWAN -- 11.1%
Accton Technology Corp.*........ 341,000 $ 1,333,520
Ambit Microsystems Corp......... 152,000 1,793,230
Asustek Computer, Inc........... 176,800 2,213,631
Choice Lithograph, Inc.*........ 876,000 762,866
D-Link Corp..................... 656,000 2,845,613
Hon Hai Precision Industry Co.,
Ltd.*......................... 470,800 5,461,465
Systex Corp.*................... 461,000 4,453,960
Taiwan Semiconductor -- ADR*.... 1,201,000 8,090,864
Windbond Electronics Corp. --
GDR 144A*..................... 113,500 3,385,138
Yageo Corp. -- GDR 144A......... 104,000 765,565
Zyxel Communications Corp....... 443,000 2,256,490
------------
33,362,342
------------
TURKEY -- 3.8%
Arcelik A.S..................... 19,782,000 1,108,423
Dogan Sirketler Grubu Holding
A.S.*......................... 55,653,100 2,031,652
Dogan Yayin Holding A.S.*....... 73,414,700 1,776,313
Hurriyet Gazetecilik ve
Matbaacilik A.S............... 83,707,000 1,883,212
Turkiye Garanti Bankasi A.S.*... 200,000,000 2,546,906
Yapi ve Kredi Bankasi........... 80,535,000 2,153,708
------------
11,500,214
------------
UNITED KINGDOM -- 0.6%
Antofagasta Holdings PLC........ 302,100 1,898,844
------------
UNITED STATES -- 2.5%
Amdocs, Ltd.*................... 18,500 1,363,219
Comverse Technology, Inc.*...... 17,300 3,269,700
IMPSAT Fiber Networks, Inc.*.... 106,100 2,970,800
------------
7,603,719
------------
TOTAL COMMON STOCK
(Cost: $216,956,521)......................... 283,407,482
------------
<CAPTION>
PRINCIPAL
AMOUNT
--------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 2.9%
--------------------------------------------------------------
Citibank Nassau
5.625%, 04/03/00
(Cost: $8,642,692)............ $ 8,642,692 8,642,692
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 97.3%
(Cost: $225,599,213)........................ 292,050,174
OTHER ASSETS IN EXCESS OF LIABILITIES --
2.7%.......................................... 8,035,133
------------
NET ASSETS -- 100.0%.......................... $300,085,307
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
41
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF MARCH 31, 2000
------------------------------------------------------------------------
EMERGING COUNTRIES FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Appliances...................... 0.4%
Banking & Investments........... 8.3
Beverages....................... 0.8
Broadcasting.................... 1.2
Building Materials.............. 0.6
Chemicals....................... 3.0
Computers....................... 4.6
Computer Services............... 1.3
Computer Software............... 5.8
Diversified Financial
Services...................... 3.0
Diversified Operations.......... 1.1
Drugs/Pharmaceuticals........... 1.7
Electric........................ 4.3
Electronic
Components/Semiconductors..... 5.8
Electronics..................... 6.6
Entertainment................... 2.3
Internet Content................ 0.2
Internet Software............... 1.3
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Metals.......................... 1.2%
Mining.......................... 1.1
Miscellaneous Manufacturing..... 0.5
Networking Products............. 2.3
Oil & Gas Producers............. 4.2
Power Equipment................. 0.6
Printing........................ 0.3
Publishing...................... 0.6
Retail-Apparel.................. 0.5
Retail-Hypermarkets............. 0.6
Retail-Miscellaneous............ 0.2
Steel........................... 0.8
Telecommunications.............. 26.1
Telecommunications Equipment.... 3.5
Television...................... 2.5
Other Assets in Excess of
Liabilities................... 2.7
-----
NET ASSETS...................... 100.0%
=====
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
42
<PAGE>
PACIFIC RIM FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: PEDRO V. MARCAL, Partner, Portfolio Manager; RANDALL KAHN,
CFA, Portfolio Manager; LAWRENCE S. SPEIDELL, CFA, Partner, Director of
Global/Systematic Portfolio Management and Research; CHARLES D'AGOSTINO,
Investment Analyst; JOHN L. BRACKEN, JR., Investment Analyst; THEODORA JAMISON,
Investment Analyst; DAVID LOPEZ, Investment Analyst; ANDREW PARMET, Investment
Analyst.
CHIEF INVESTMENT OFFICER: CATHERINE SOMHEGYI
GOAL: The Pacific Rim Fund seeks to maximize total return through investments
in stocks of companies located within the Pacific Rim region including
Australia, China, Japan, India, Indonesia, South Korea, Malaysia, New Zealand,
the Philippines, Singapore and Taiwan.
MARKET OVERVIEW: Economic recovery led to strong stock market performance in
the Pacific Rim during the 12-month period ended March 31, 2000. Improving
consumer demand, increasing exports and banking reform stimulated the economies
of emerging Asian countries, propelling stock markets higher in the region.
Investors have shown interest in Malaysian equities in anticipation of the
country's May 2000 reinstatement in the MSCI EMF Index. Following an economic
crisis, Malaysia had been removed from the MSCI EMF Index in September 1998.
Despite uncertainties about a meaningful recovery in Japan, the Japanese
equity market turned in impressive results with the MSCI Japan Index climbing
45.1%. Favorable influences included:
- Signs of a pick-up in economic growth
- Increased consumer confidence from a newly stabilized real estate market
- Reduction in cross-shareholdings that increased share flotation and
opportunities for mergers and acquisitions.
PERFORMANCE: During the fiscal year, the Pacific Rim Fund was up 136.9% while
the MSCI Pacific Index gained 41.5%.
PORTFOLIO SPECIFICS: The fund's outstanding gains were attributable to stock
selection, especially in Japan. Since the beginning of the period, on a
stock-by-stock basis, we significantly increased the fund's exposure to Japan.
Japanese companies that performed well included Mutata Manufacturing, a circuit
board maker; and Seven-Eleven Japan, a convenience store chain.
China Telecom, a provider of cellular telecommunications in Mainland China's
most economically developed provinces; Kalbe Farma, an Indonesian pharmaceutical
firm; and Unisem, a Malaysian semiconductor packaging company were also major
contributors to the fund's outperformance. Samsung Electronics of South Korea,
the world's largest maker of dynamic random access memory (DRAM) chips, also
posted strong gains.
MARKET OUTLOOK: The investment outlook is bright in the dynamic Pacific Rim
region. Countries such as South Korea, the Philippines, Thailand and Indonesia
are expected to post significant economic recoveries in 2000. And the future of
Japan shows promise as young, progressive companies are expected to prosper
despite tough economic times.
--------------------------------------------------------------------------------
43
<PAGE>
PACIFIC RIM FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN PACIFIC RIM FUND
INSTITUTIONAL SHARES WITH THE MSCI PACIFIC INDEX.
<TABLE>
<S> <C> <C>
SINCE
1 YEAR ANNUALIZED TOTAL RETURNS INCEPTION
136.92% As of 3/31/00 45.79%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PACIFIC RIM FUND INSTITUTIONAL SHARES MSCI PACIFIC INDEX
<S> <C> <C>
12/31/97 $250,000.00 $250,000.00
3/98 253,200.00 260,654.95
6/98 193,600.00 232,816.08
9/98 192,200.00 201,782.74
12/98 233,600.00 254,632.18
3/99 246,400.00 281,969.61
6/99 355,200.00 312,920.98
9/99 405,000.00 345,052.83
12/99 566,340.09 400,748.11
3/31/00 583,773.00 398,908.65
</TABLE>
The graph above shows the value of a hypothetical $250,000 investment in the
Fund's Class I shares compared with the Morgan Stanley Capital International
Pacific Index ("MSCI Pacific") for the periods indicated. The Fund's Class I
shares calculate their performance based upon the historical performance of
their corresponding series of Nicholas-Applegate Mutual Funds (renamed Pilgrim
Mutual Funds), adjusted to reflect all fees and expenses applicable to the
Fund's Class I shares. The Nicholas-Applegate Institutional Funds' Class I
shares were first available on May 7, 1999. Average annual total return figures
include changes in principal value, reinvested dividends, and capital gain
distributions. Absent expense limitations, total returns would have been
slightly lower. Past performance cannot guarantee future results.
The unmanaged MSCI Pacific Index includes over 400 companies and the five
countries of Australia, Hong Kong, Japan, New Zealand, and Singapore. The
average company has a market capitalization of about $5.1 billion. The unmanaged
Index differs from the Fund in composition, does not pay management fees or
expenses and includes reinvested dividends. One cannot invest directly in an
index.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions, currency volatility and the social,
economic and political climates of countries where the Fund invests. Emerging
markets involve heightened risks related to the same factors, in addition to
those associated with their relatively small size and lesser liquidity. You may
have a gain or loss when you sell your shares.
--------------------------------------------------------------------------------
44
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000
------------------------------------------------------------------------
PACIFIC RIM FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
---------------------------------------------------------------
COMMON STOCK -- 89.6%
---------------------------------------------------------------
AUSTRALIA -- 0.7%
Davnet, Ltd.......................... 8,300 $ 27,206
----------
BERMUDA -- 1.2%
Soundwill Holdings, Ltd.*............ 870,000 48,045
----------
HONG KONG -- 16.0%
Cheung Kong (Holdings), Ltd.......... 6,000 89,771
China Aerospace International,
Ltd.*.............................. 38,200 12,142
China Telecom (Hong Kong), Ltd. Cl.
H*................................. 12,000 105,567
Computer & Technologies Holdings,
Ltd.*.............................. 20,000 38,015
HSBC Holdings PLC.................... 9,600 112,194
Hutchison Whampoa, Ltd............... 5,000 90,220
Lai Sun Development Co., Ltd.*....... 272,000 14,672
Legend Holdings, Ltd.*............... 32,000 49,933
Online Credit International, Ltd.*... 147,000 5,569
PetroChina Co., Ltd.*................ 475,000 78,084
Prosten Technology Holdings, Ltd.*... 31,000 13,934
----------
610,101
----------
INDIA -- 6.0%
ICICI, Ltd. -- ADR*.................. 1,000 22,500
Infosys Technologies, Ltd............ 400 77,200
NIIT, Ltd............................ 1,000 47,036
Satyam Computer Services, Ltd........ 800 81,251
----------
227,987
----------
JAPAN -- 40.8%
CAC Corp............................. 2,000 116,999
Daifuku Co., Ltd..................... 5,000 45,045
Disco Corp........................... 100 18,037
Disco Corp. (New Shares)*............ 100 18,232
Fast Retailing Co., Ltd.............. 200 88,042
Hitachi, Ltd......................... 7,000 83,196
Itochu Techno-Science Corp.*......... 100 103,350
Ito-Yokado Co., Ltd.................. 1,000 71,564
Lux Corp.*........................... 10,000 78,974
Mitsukoshi, Ltd.*.................... 5,000 21,645
Moritex Corp......................... 1,000 81,704
Net One Systems Co., Ltd............. 1 36,075
Nippon Broadcasting System, Inc...... 1,000 79,169
Nippon Broadcasting System, Inc. (New
Shares)*........................... 1,000 79,169
Oracle Corp. Japan................... 100 83,849
Sanyo Electric Co., Ltd.............. 16,000 95,471
TDK Corp............................. 1,000 136,305
Toppan Forms Co., Ltd................ 5,000 106,762
Toyo Communication Equipment Co.,
Ltd.*.............................. 4,000 93,794
Yamaichi Electronics Co., Ltd........ 1,100 35,821
Yamato Transport Co., Ltd............ 3,000 85,994
----------
1,559,197
----------
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
MALAYSIA -- 3.3%
Unisem (M) Berhad.................... 12,000 $ 124,737
----------
SINGAPORE -- 5.2%
Datacraft Asia, Ltd.*................ 8,200 76,670
International Press Softcom, Ltd.*... 94,000 45,063
Singapore Airlines, Ltd.............. 8,000 74,832
----------
196,565
----------
SOUTH KOREA -- 5.9%
Bit Computer Company, Ltd............ 1,262 18,954
Cybertek Holdings, Inc.*............. 400 16,250
Haansoft, Inc.*...................... 840 19,760
Housing & Commercial Bank, Korea..... 120 2,334
Jang Media Interactive Corp.*........ 470 31,936
Samsung Electronics.................. 320 96,992
Serome Technology, Inc.*............. 140 7,144
SK Telecom Co., Ltd. -- ADR.......... 4 151
Turbo Tek Co., Ltd................... 1,510 31,833
----------
225,354
----------
TAIWAN -- 9.9%
Accton Technology Corp.*............. 20,000 78,212
Ambit Microsystems Corp.............. 7,000 82,583
Choice Lithograph Communications,
Inc.*.............................. 18,000 15,675
Hon Hai Precision Industry Co.,
Ltd.*.............................. 6,000 69,602
Macronix International Co., Ltd...... 3,400 98,600
Ulead Systems, Inc.*................. 5,000 34,834
----------
379,506
----------
THAILAND -- 0.6%
Shin Corp. PCL....................... 3,300 24,089
----------
TOTAL COMMON STOCK
(Cost: $3,119,995).............................. 3,422,787
----------
<CAPTION>
PRINCIPAL
AMOUNT
---------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 2.8%
---------------------------------------------------------------
Morgan Guaranty London
5.625%, 04/03/00
(Cost: $107,830)................... $107,830 107,830
----------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 92.4%
(Cost: $3,227,825)............................ 3,530,617
OTHER ASSETS IN EXCESS OF LIABILITIES -- 7.6%... 290,165
----------
NET ASSETS -- 100.0%............................ $3,820,782
----------
----------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
45
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF MARCH 31, 2000
------------------------------------------------------------------------
PACIFIC RIM FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Airlines........................ 2.0%
Applications Software........... 2.6
Banking......................... 2.8
Broadcasting.................... 4.1
Communications Software......... 0.2
Computer Services............... 1.0
Computer Software............... 7.9
Computers....................... 13.1
Diversified Financial
Services...................... 0.6
Diversified Operations.......... 2.8
Electronic
Components/Semiconductors..... 6.3
Electronics..................... 12.0
Instruments - Scientific........ 2.1
Internet Software............... 0.4
Machinery....................... 2.5
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Medical Information Systems..... 0.5%
Money Center Banks.............. 3.0
Networking Products............. 2.0
Oil & Gas Producers............. 2.0
Power Equipment................. 2.2
Printing........................ 3.2
Real Estate Development......... 4.1
Retail - Apparel................ 2.3
Retail - Major Department
Stores........................ 0.6
Retail - Miscellaneous.......... 1.9
Telecommunications.............. 7.9
Transportation.................. 2.3
Other Assets in Excess of
Liabilities................... 7.6
-----
NET ASSETS...................... 100.0%
=====
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
46
<PAGE>
LATIN AMERICA FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: ERNESTO RAMOS, PH.D., Portfolio Manager; JASON CAMPBELL,
Portfolio Manager; LAWRENCE S. SPEIDELL, CFA, Partner, Director of
Global/Systematic Portfolio Management and Research.
CHIEF INVESTMENT OFFICER: CATHERINE SOMHEGYI
GOAL: The Latin America Fund seeks to provide long-term capital appreciation
primarily through investment in the securities of companies located in the Latin
American countries of South America, Central America, and Mexico.
MARKET OVERVIEW: Latin America generated strong stock market returns for the
year ended March 31, 2000. During the third quarter of 1999, there was a
sell-off triggered by concerns over higher US interest rates and domestic fiscal
and political worries. But performance quickly bounced back, and the region's
markets were up over 38.5% in the last six months of the period.
Latin America has officially staged a recovery from the difficulties emerging
markets faced in the late 1990s. The region's biggest economies -- Mexico and
Brazil -- continue to benefit from sound fundamentals and increasing investor
recognition. Interest rates are dropping, inflation is declining and corporate
earnings are rebounding.
A major theme driving economic growth is the strong demand for technology and
telecommunications products and services. Companies are embarking on building
the infrastructure needed to make Latin America competitive in the global
technology arena.
PERFORMANCE: From April 1, 1999 through March 31, 2000, the Latin America Fund
posted a 78.7% gain versus a 44.4% increase in the MSCI EMF Latin America Index.
PORTFOLIO SPECIFICS: The fund's strong performance was attributable to stock
selection, especially in Brazil and Mexico.
One of the fund's best-performing holdings was Globo Cabo, Brazil's largest
cable television operator. The company controls close to 20 cable TV systems and
one wireless pay-TV system. Another major contributor to performance was Grupo
Televisa S.A., a Mexican media company having interests in television and radio
broadcasting, movie production and music recording.
During the period, on a company-by-company basis, we increased our exposure to
Brazil by 6.7% to capitalize on the positive themes of growing industrial
production and consumer demand. We decreased holdings in Argentina by 8.8% as a
result of the country's debt problems.
MARKET OUTLOOK: Despite uncertainties over Argentina's debt and budget
problems, we expect overall strength in Latin America. We believe the region
will continue to benefit from rising commodity prices, expectations for
accelerating earnings growth and a technology revolution.
In particular, the outlook for Brazil and Mexico remains bright. Robust
production should sustain GDP growth in Brazil. Domestic demand and rising
exports to the US should continue to drive Mexico's expanding economy.
Amid this positive investment backdrop, we are optimistic about the prospects
for the Latin America Fund.
--------------------------------------------------------------------------------
47
<PAGE>
LATIN AMERICA FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN LATIN AMERICA FUND
INSTITUTIONAL SHARES WITH THE MSCI EMF LATIN AMERICA INDEX.
<TABLE>
<S> <C> <C>
SINCE
1 YEAR ANNUALIZED TOTAL RETURNS INCEPTION
78.67% As of 3/31/00 24.91%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LATIN AMERICA FUND MSCI EMF LATIN AMERICA INDEX
INSTITUTIONAL SHARES
<S> <C> <C>
11/30/1997 $250,000.00 $250,000.00
12/97 268,400.00 266,600.00
1/98 241,600.00 236,986.07
2/98 255,800.00 249,434.95
3/98 279,200.00 267,119.89
4/98 283,200.00 261,000.17
5/98 247,400.00 227,242.41
6/98 239,000.00 213,812.38
7/98 257,400.00 224,391.82
8/98 163,400.00 146,554.79
9/98 172,800.00 161,560.53
10/98 189,400.00 174,049.16
11/98 204,800.00 187,485.75
12/98 192,012.73 172,993.11
1/99 175,130.25 152,510.72
2/99 187,537.86 162,240.91
3/99 235,134.23 195,224.48
4/99 273,984.27 223,346.57
5/99 258,118.81 213,541.65
6/99 265,644.73 223,712.64
7/99 232,489.99 206,486.77
8/99 223,540.24 200,271.52
9/99 233,303.60 203,535.94
10/99 247,338.43 208,115.50
11/99 279,882.96 234,365.32
12/99 378,330.17 271,254.49
1/00 370,397.44 259,656.73
2/00 411,078.10 279,585.39
3/31/2000 420,114.00 281,905.95
</TABLE>
The graph above shows the value of a hypothetical $250,000 investment in the
Fund's Class I shares compared with the Morgan Stanley Capital International
Latin America Index ("MSCI Latin America") for the periods indicated. The Fund's
Class I shares calculate their performance based upon the historical performance
of their corresponding series of Nicholas-Applegate Mutual Funds (renamed
Pilgrim Mutual Funds), adjusted to reflect all fees and expenses applicable to
the Fund's Class I shares. The Nicholas-Applegate Institutional Funds' Class I
shares were first available on May 7, 1999. Average annual total return figures
include changes in principal value, reinvested dividends, and capital gain
distributions. Absent expense limitations, total returns would have been
slightly lower. Past performance cannot guarantee future results.
The unmanaged MSCI Latin America Index is composed of companies representative
of the market structure of 7 Latin American countries including, Argentina,
Chile, Colombia, Brazil, Mexico, Peru and Venezuela. The unmanaged Index differs
from the Fund in composition, does not pay management fees or expenses and
includes reinvested dividends. One cannot invest directly in an index.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions, currency volatility and the social,
economic and political climates of countries where the Fund invests. Emerging
markets involve heightened risks related to the same factors, in addition to
those associated with their relatively small size and lesser liquidity. You may
have a gain or loss when you sell your shares.
--------------------------------------------------------------------------------
48
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000
------------------------------------------------------------------------
LATIN AMERICA FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
--------------------------------------------------------------
COMMON STOCK -- 71.0%
--------------------------------------------------------------
ARGENTINA -- 3.7%
IMPSAT Fiber Network, Inc.*...... 7,000 $ 196,000
------------
BRAZIL -- 22.3%
Embratel Participacoes S.A. --
ADR............................ 9,400 240,875
Globo Cabo S.A. -- ADR........... 10,200 191,250
Tele Centro Sul Participacoes --
ADR............................ 3,000 243,000
Tele Norte Leste Participacoes
S.A. -- ADR.................... 11,100 295,538
Telemig Celular Participacoes
S.A............................ 2,300 203,694
------------
1,174,357
------------
MEXICO -- 42.8%
Coca-Cola Femsa S.A. -- ADR...... 13,300 246,881
Fomento Economico Mexicano S.A.
-- ADR......................... 5,300 238,500
Grupo Financiero Banamex Accival,
S.A. Cl. O*.................... 20,000 91,585
Grupo Financiero Banorte S.A. Cl.
O*............................. 203,000 307,528
Grupo Radio Centro, S.A. --
ADR............................ 9,300 120,784
Grupo Televisa S.A. -- GDR
144A*.......................... 3,100 210,800
Grupo Tribasa S.A.*.............. 49,000 12,143
Grupo Tribasa S.A. -- ADR*....... 461,100 216,164
Telefonos de Mexico -- ADR....... 7,600 509,200
TV Azteca S.A. -- ADR............ 20,600 303,850
------------
2,257,435
------------
UNITED KINGDOM -- 2.2%
Antofagasta Holdings PLC......... 18,700 117,539
------------
TOTAL COMMON STOCK
(Cost: $3,130,687)........................... 3,745,331
------------
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
PREFERRED STOCK -- 24.4%
--------------------------------------------------------------
BRAZIL -- 24.4%
Banco Bradesco S.A............... 24,482,000 $ 201,749
Eletropaulo S.A.................. 3,900,000 291,885
Lojas Americanas S.A............. 100 0
Petroleo Brasileiro S.A.......... 976,200 264,050
Saraiva S.A. Livreiros
Editores*...................... 3,700 25,465
Tele Centro Oeste Celular
Participacoes S.A.............. 43,700 508,013
------------
TOTAL PREFERRED STOCK
(Cost: $1,029,250)........................... 1,291,162
------------
<CAPTION>
PRINCIPAL
AMOUNT
--------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 7.7%
--------------------------------------------------------------
Wachovia Bank N.A.
5.625%, 04/03/00
(Cost: $406,198)............... $ 406,198 406,198
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 103.1%
(Cost: $4,566,135).......................... 5,442,691
LIABILITIES IN EXCESS OF OTHER ASSETS --
(3.1)%........................................ (165,816)
------------
NET ASSETS -- 100.0%.......................... $ 5,276,875
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
49
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF MARCH 31, 2000
------------------------------------------------------------------------
LATIN AMERICA FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Banking......................... 11.5%
Beverages....................... 4.7
Broadcasting.................... 9.8
Building - Construction......... 4.3
Cable TV........................ 3.6
Diversified Operations.......... 4.5
Electric........................ 5.5
Finance......................... 7.6
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Mining.......................... 2.2%
Oil & Gas Producers............. 5.0
Publishing...................... 0.5
Radio........................... 2.3
Telecommunications.............. 41.6
Liabilities in Excess of Other
Assets........................ (3.1)
-----
NET ASSETS...................... 100.0%
=====
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
50
<PAGE>
LARGE CAP GROWTH FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: ANDREW B. GALLAGHER, Partner, Portfolio Manager; WILLIAM H.
CHENOWETH, CFA, Partner, Portfolio Manager; KENNETH LEE, Portfolio Manager;
TRISHA C. SCHUSTER, CFA, Portfolio Manager; EVAN LUNDQUIST, Investment Analyst;
THOMAS J. SMITH, CFA, Investment Analyst; LIANNE NELSON, Investment Analyst.
CHIEF INVESTMENT OFFICER: CATHERINE SOMHEGYI
GOAL: The Large Cap Growth Fund seeks to maximize long-term capital
appreciation by investing primarily in stocks from a universe of large US
companies with market capitalizations corresponding to the upper 90% of the
Russell 1000 Growth Index at time of purchase.
MARKET OVERVIEW: US large-cap stocks delivered impressive results in the
12-month period ended March 31, 2000. Returns were driven by many factors,
including:
- The continuation of the longest economic expansion in US history sustained
by strong corporate profits, high levels of consumer spending, productivity
gains and low inflation
- Exceptional returns for technology stocks
- Massive cash flows into mutual funds
The Federal Reserve raised interest rates on five separate occasions by a
total of 1.25% during the period. Amid interest rate worries, the market
suffered a broad-based decline in the third quarter of 1999. However, investors
ultimately perceived these rate hikes as a positive sign that the Fed remains
vigilant in keeping economic growth on track and inflation under control. As a
result, stocks -- particularly growth issues -- rebounded strongly in the six
months that followed.
PERFORMANCE: From April 1, 1999 through March 31, 2000, the fund was up 85.4%
versus 34.0% for the Russell 1000 Growth Index.
PORTFOLIO SPECIFICS: The fund's outstanding performance was due to stock
selection, particularly in the technology sector. The best-performing stocks
during the period included technology names such as Qualcomm, Oracle, Sun
Microsystems, and Nokia. In other industries, Genentech, Corning, and Sony also
performed well.
MARKET OUTLOOK: Despite lingering concerns over higher interest rates, a
number of factors support the case for continued appreciation among large-cap
stocks:
- Ongoing US economic expansion and productivity gains
- Low inflation
- Positive outlook for corporate earnings
In this environment, we are optimistic that the application of our strict
investment philosophy will lead us to find high-growth companies with strong
fundamentals. As a result, we are confident about the outlook for the Large Cap
Growth Fund.
--------------------------------------------------------------------------------
51
<PAGE>
LARGE CAP GROWTH FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN LARGE CAP GROWTH FUND
INSTITUTIONAL SHARES WITH THE RUSSELL 1000 GROWTH INDEX.
<TABLE>
<S> <C> <C>
SINCE
1 YEAR ANNUALIZED TOTAL RETURNS INCEPTION
85.42% As of 3/31/00 65.55%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LARGE CAP GROWTH FUND INSTITUTIONAL SHARES RUSSELL 1000 GROWTH INDEX
<S> <C> <C>
12/27/1996 $250,000.00 $250,000.00
12/96 247,200.00 246,184.68
1/97 272,400.00 263,452.07
2/97 267,800.00 261,660.59
3/97 260,000.00 247,499.52
4/97 270,000.00 263,933.49
5/97 300,200.00 282,981.57
6/97 311,400.00 294,300.83
7/97 350,200.00 320,317.03
8/97 342,200.00 301,578.48
9/97 359,600.00 316,419.16
10/97 359,200.00 304,711.65
11/97 354,896.62 317,652.75
12/97 361,073.21 321,210.46
1/98 366,477.73 330,814.66
2/98 400,191.62 355,698.54
3/98 424,640.63 369,876.68
4/98 438,280.60 374,995.77
5/98 427,214.20 364,353.39
6/98 458,097.16 386,670.04
7/98 448,284.00 384,110.28
8/98 373,570.00 326,455.33
9/98 420,006.82 351,533.63
10/98 451,656.50 379,796.93
11/98 494,720.82 408,699.48
12/98 580,590.04 445,564.17
1/99 645,964.79 471,718.79
2/99 632,474.76 450,161.24
3/99 697,590.09 473,884.74
4/99 730,134.16 474,500.79
5/99 735,294.12 459,933.61
6/99 770,228.70 492,128.96
7/99 760,111.18 476,479.26
8/99 755,700.97 484,245.88
9/99 769,969.27 474,076.71
10/99 825,745.35 509,869.50
11/99 920,953.81 536,841.60
12/99 1,138,610.22 592,673.13
1/00 1,089,838.58 564,876.76
2/00 1,248,865.26 592,499.23
3/31/2000 1,293,444.00 634,922.18
</TABLE>
The graph above shows the value of a hypothetical $250,000 investment in the
Fund's Class I shares compared with the Russell 1000 Growth Index for the
periods indicated. The Fund's Class I shares calculate their performance based
upon the historical performance of their corresponding series of Nicholas
Applegate Mutual Funds (renamed Pilgrim Mutual Funds), adjusted to reflect all
fees and expenses applicable to the Fund's Class I shares. The
Nicholas-Applegate Institutional Funds' Class I shares were first available on
May 7, 1999. Average annual total return figures include changes in principal
value, reinvested dividends, and capital gain distributions. Absent expense
limitations, total returns would have been slightly lower. Past performance
cannot guarantee future results.
The unmanaged Russell 1000 Growth Index measures the stock performance of 1000
of the largest U.S. companies. The unmanaged Index differs from the Fund in
composition, does not pay management fees or expenses and includes reinvested
dividends. One cannot invest directly in an index.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions. You may have a gain or loss when you sell
your shares.
--------------------------------------------------------------------------------
52
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000
------------------------------------------------------------------------
LARGE CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
--------------------------------------------------------------
COMMON STOCK -- 98.3%
--------------------------------------------------------------
AUDIO/VIDEO PRODUCTS -- 1.3%
Sony Corp. -- ADR................ 5,700 $ 1,596,713
------------
AUTOMOTIVE -- 2.6%
General Motors Corp. Cl. H*...... 25,500 3,174,750
------------
BANKING -- 6.5%
Chase Manhattan Corp............. 44,500 3,879,844
Citigroup, Inc................... 67,200 3,985,800
------------
7,865,644
------------
BIOTECHNOLOGY -- 4.8%
Amgen, Inc.*..................... 44,000 2,700,500
Genentech, Inc.*................. 20,800 3,161,600
------------
5,862,100
------------
BROADCASTING -- 3.4%
AT&T Corp. -- Liberty Media Group
Cl. A*......................... 68,900 4,082,325
------------
COMPUTER SOFTWARE -- 6.5%
Oracle Corp.*.................... 53,900 4,207,569
Veritas Software Corp.*.......... 28,650 3,753,150
------------
7,960,719
------------
COMPUTERS -- 8.1%
Dell Computer Corp.*............. 78,400 4,228,700
Efficient Networks, Inc.*........ 12,200 1,900,150
Sun Microsystems, Inc.*.......... 39,600 3,710,643
------------
9,839,493
------------
ELECTRONIC COMPONENTS/SEMICONDUCTORS -- 10.3%
Applied Materials, Inc.*......... 43,400 4,090,450
Intel Corp....................... 33,600 4,433,099
Texas Instruments, Inc........... 25,300 4,048,000
------------
12,571,549
------------
ELECTRONICS -- 2.5%
Agilent Technologies, Inc........ 29,500 3,068,000
------------
FINANCE-INVESTMENTS -- 2.6%
Charles Schwab Corp.*............ 54,700 3,107,644
------------
INTERNET SOFTWARE -- 0.3%
Tibco Software, Inc.*............ 4,500 366,750
------------
LEISURE/GAMING -- 3.6%
MGM Grand, Inc................... 181,100 4,346,400
------------
NETWORKING PRODUCTS -- 3.5%
Cisco Systems, Inc.*............. 55,600 4,298,575
------------
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
OIL & GAS PRODUCERS -- 6.8%
Enron Corp....................... 60,500 $ 4,529,937
Schlumberger, Ltd................ 49,500 3,786,750
------------
8,316,687
------------
OIL FIELD SERVICES -- 2.5%
Weatherford International,
Inc.*.......................... 52,600 3,100,113
------------
RETAIL-BUILDING PRODUCTS -- 3.1%
Home Depot, Inc.................. 59,200 3,818,400
------------
RETAIL-DISCOUNT -- 3.6%
Wal-Mart Stores, Inc............. 78,200 4,340,099
------------
TELECOMMUNICATIONS -- 17.8%
AT&T Corp........................ 71,400 4,016,250
CIENA Corp.*..................... 14,500 1,828,813
Corning, Inc..................... 20,800 4,035,200
Nextel Communications, Inc. Cl.
A*............................. 26,500 3,928,625
Nortel Networks Corp............. 32,100 4,044,600
Qwest Communications
International, Inc.*........... 78,200 3,792,700
------------
21,646,188
------------
TELECOMMUNICATIONS EQUIPMENT -- 8.5%
Aether Systems, Inc.*............ 12,000 2,178,000
Motorola, Inc.................... 21,800 3,103,775
Nextel Partners, Inc. Cl. A*..... 35,800 1,038,200
Nokia OYJ -- ADR................. 18,600 4,040,850
------------
10,360,825
------------
TOTAL COMMON STOCK
(Cost: $89,189,850).......................... 119,722,974
------------
<CAPTION>
PRINCIPAL
AMOUNT
--------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 2.5%
--------------------------------------------------------------
Wachovia Bank N.A.
5.625%, 04/03/00
(Cost: $2,992,570)............. $2,992,570 2,992,570
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 100.8%
(COST: $92,182,420)......................... 122,715,544
LIABILITIES IN EXCESS OF OTHER ASSETS --
(0.8%)........................................ (948,388)
------------
NET ASSETS -- 100.0%.......................... $121,767,156
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
53
<PAGE>
MID CAP GROWTH FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: WILLIAM H. CHENOWETH, CFA, Partner, Portfolio Manager;
ANDREW B. GALLAGHER, Partner, Portfolio Manager; KENNETH LEE, Portfolio Manager;
TRISHA C. SCHUSTER, CFA, Portfolio Manager; EVAN LUNDQUIST, Investment Analyst;
THOMAS J. SMITH, CFA, Investment Analyst; LIANNE NELSON, Investment Analyst.
CHIEF INVESTMENT OFFICER: CATHERINE SOMHEGYI
GOAL: The Mid Cap Growth Fund seeks to maximize long-term capital appreciation
through investments in US securities with market capitalizations corresponding
to the middle 90% of the Russell Midcap Growth Index at the time of purchase.
MARKET OVERVIEW: During the 12-month period ended March 31, 2000, US mid-cap
growth stocks delivered stellar results, providing the strongest returns of any
market-cap segment within the domestic equity market. Performance was driven by
many positive factors, including:
- The continuance of the longest economic expansion in US history supported by
strong corporate profits, high levels of consumer spending, productivity
gains and low inflation
- Exceptional returns for technology stocks
- Massive cash flows into mutual funds
US stock markets succumbed to a broad-based decline in the third quarter of
1999 after the Federal Reserve raised interest rates by a total of 1.25% during
the period. However, the market ultimately perceived these rate hikes as a
positive sign that the Fed is committed to keeping inflation under control. As a
result, stocks -- particularly growth issues -- bounced back strongly in the
last two quarters of the fiscal year.
PERFORMANCE: For the 12-month period ended March 31, 2000, the fund gained
116.5% versus 77.2% for the Russell Midcap Growth Index.
PORTFOLIO SPECIFICS: Stock selection, particularly in technology and
commercial/industrial issues contributed to the fund's outperformance during the
period. Top performers included Network Appliance, a leading data storage and
access company; Veritas Software, a supplier of enterprise data storage
management solutions; and Network Solutions, a worldwide Internet domain name
registration service provider.
On a company-specific basis, we increased the fund's technology exposure
during the period. However, much of the 30% increase in the fund's technology
weighting was due to market appreciation of existing holdings. As such, at
March 31, 2000, the fund was only slightly overweighted in technology relative
to its benchmark.
We decreased the fund's holdings in financial services and retail companies as
we identified better candidates in other sectors.
MARKET OUTLOOK: Despite lingering concerns over higher interest rates, a
number of factors support the case for ongoing gains in the mid-cap segment of
the US equity market, including:
- Attractive relative valuations
- Robust US economy and low inflation
- Durability of corporate earnings
In this environment, we are confident that the application of our strict
investment philosophy will lead us to find exciting growth opportunities in the
mid-cap market.
--------------------------------------------------------------------------------
54
<PAGE>
MID CAP GROWTH FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN MID CAP GROWTH FUND
INSTITUTIONAL SHARES WITH THE RUSSELL MID CAP GROWTH INDEX.
<TABLE>
<S> <C> <C>
ANNUALIZED TOTAL RETURNS
As of 3/31/00
1 YEAR 5 YEARS 10 YEARS
116.48% 37.69% 25.89%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
MID CAP GROWTH RUSSELL MID
FUND INSTITUTIONAL CAP GROWTH
SHARES INDEX
<S> <C> <C>
9/30/85 $250,000.00 $250,000.00
10/85 263,066.67 250,000.00
11/85 289,075.19 250,000.00
12/85 311,844.68 250,000.00
1/86 325,056.50 254,807.50
2/86 353,130.55 277,271.33
3/86 388,396.52 293,918.70
4/86 386,014.35 297,128.29
5/86 420,047.95 315,779.03
6/86 437,507.94 320,667.29
7/86 413,911.68 295,148.59
8/86 435,669.64 308,539.48
9/86 388,689.93 282,970.82
10/86 426,535.37 300,053.76
11/86 426,862.38 302,871.27
12/86 414,298.40 293,875.99
1/87 479,743.74 334,695.37
2/87 504,626.45 359,630.17
3/87 508,798.02 364,485.18
4/87 503,489.57 355,008.56
5/87 505,637.79 357,298.37
6/87 523,217.13 371,922.59
7/87 560,975.96 388,848.79
8/87 578,628.01 404,892.69
9/87 570,276.48 395,948.61
10/87 410,751.14 287,173.61
11/87 376,686.18 267,197.81
12/87 429,183.67 301,984.30
1/88 414,233.77 305,043.40
2/88 445,494.62 330,063.06
3/88 439,955.63 331,554.94
4/88 443,944.56 333,428.23
5/88 447,747.69 327,526.55
6/88 488,925.55 352,277.73
7/88 470,867.90 338,944.02
8/88 452,959.23 326,033.64
9/88 478,445.73 338,931.53
10/88 482,735.80 336,884.38
11/88 467,079.06 328,775.58
12/88 483,551.39 341,012.60
1/89 513,031.90 361,111.89
2/89 500,496.82 358,150.77
3/89 509,489.08 362,538.11
4/89 536,525.97 383,188.29
5/89 569,665.39 403,547.08
6/89 542,074.60 398,139.55
7/89 603,744.62 429,333.78
8/89 625,700.80 445,953.29
9/89 637,943.67 445,797.21
10/89 619,358.25 427,211.92
11/89 641,324.82 437,324.03
12/89 647,588.43 448,379.58
1/90 609,035.33 406,828.25
2/90 635,690.78 415,192.63
3/90 655,820.98 432,593.36
4/90 640,452.91 420,627.83
5/90 744,313.03 463,885.19
6/90 753,889.85 469,614.17
7/90 728,383.25 454,642.87
8/90 669,141.41 401,772.45
9/90 618,532.01 374,556.39
10/90 604,532.57 367,555.93
11/90 644,411.57 406,895.44
12/90 652,316.35 425,364.42
1/91 716,025.92 457,271.01
2/91 782,807.27 497,529.15
3/91 822,078.10 523,530.02
4/91 801,991.99 518,870.60
5/91 839,658.88 545,104.70
6/91 785,304.96 515,396.50
7/91 844,961.96 541,398.25
8/91 884,985.00 558,316.94
9/91 886,371.47 557,674.88
10/91 913,819.44 570,189.10
11/91 873,763.69 551,384.27
12/91 1,014,497.89 625,418.63
1/92 1,022,275.71 630,984.86
2/92 1,039,006.96 632,347.79
3/92 987,749.28 606,370.94
4/92 959,664.28 594,765.00
5/92 949,651.78 595,924.79
6/92 919,326.23 578,196.03
7/92 953,770.32 603,972.01
8/92 929,226.63 596,066.01
9/92 964,692.12 609,125.82
10/92 1,019,936.82 627,472.69
11/92 1,099,151.91 667,122.69
12/92 1,151,984.48 679,904.76
1/93 1,184,316.84 687,920.84
2/93 1,169,591.84 666,739.75
3/93 1,226,044.14 686,048.54
4/93 1,194,788.41 657,872.52
5/93 1,273,544.56 688,917.53
6/93 1,305,239.10 686,086.08
7/93 1,319,645.72 683,924.91
8/93 1,391,678.78 723,688.30
9/93 1,408,006.28 732,350.85
10/93 1,405,124.95 744,149.02
11/93 1,349,419.38 726,840.12
12/93 1,379,769.31 756,008.21
1/94 1,402,023.66 775,460.30
2/94 1,374,711.51 768,775.83
3/94 1,282,659.45 732,543.43
4/94 1,292,775.06 730,756.02
5/94 1,271,532.28 731,822.93
6/94 1,208,815.49 700,339.90
7/94 1,230,058.27 719,739.32
8/94 1,290,751.94 762,671.77
9/94 1,268,497.60 750,095.31
10/94 1,284,682.57 763,056.96
11/94 1,205,780.81 729,406.15
12/94 1,234,649.94 739,632.42
1/95 1,211,552.75 748,522.80
2/95 1,280,844.33 788,351.70
3/95 1,324,938.97 819,617.73
4/95 1,350,135.91 826,494.32
5/95 1,371,133.36 846,867.41
6/95 1,472,970.98 885,408.34
7/95 1,591,606.56 941,127.09
8/95 1,626,252.35 951,432.43
9/95 1,659,848.27 972,611.32
10/95 1,642,000.44 948,033.43
11/95 1,673,496.61 990,505.33
12/95 1,710,915.34 991,040.20
1/96 1,729,728.77 1,008,541.97
2/96 1,799,449.12 1,046,664.86
3/96 1,799,449.12 1,054,912.58
4/96 1,916,756.38 1,105,875.40
5/96 1,994,223.44 1,128,435.26
6/96 1,945,529.86 1,094,356.52
7/96 1,798,342.45 1,009,434.45
8/96 1,882,449.54 1,064,004.48
9/96 2,000,863.48 1,131,590.04
10/96 1,974,303.34 1,118,350.44
11/96 2,041,311.77 1,184,221.28
12/96 1,992,539.17 1,164,278.99
1/97 2,075,809.46 1,215,798.34
2/97 1,941,387.42 1,189,050.77
3/97 1,830,756.88 1,121,857.51
4/97 1,833,136.03 1,149,343.02
5/97 1,990,160.02 1,252,335.65
6/97 2,065,103.28 1,287,025.35
7/97 2,275,658.16 1,410,193.68
8/97 2,242,350.05 1,396,373.78
9/97 2,389,857.42 1,467,030.29
10/97 2,249,487.50 1,393,532.07
11/97 2,249,940.26 1,408,178.10
12/97 2,324,431.52 1,426,667.47
1/98 2,266,662.78 1,400,987.46
2/98 2,484,055.66 1,532,708.30
3/98 2,608,714.51 1,596,959.43
4/98 2,578,309.91 1,618,646.14
5/98 2,427,807.15 1,552,071.23
6/98 2,579,830.14 1,595,979.32
7/98 2,467,593.58 1,527,607.57
8/98 1,935,212.64 1,235,987.28
9/98 2,126,364.25 1,329,477.36
10/98 2,180,076.28 1,427,326.89
11/98 2,326,994.46 1,523,671.46
12/98 2,665,064.26 1,681,523.82
1/99 2,938,363.68 1,731,969.54
2/99 2,695,079.80 1,647,276.23
3/99 3,028,410.30 1,739,029.51
4/99 3,148,472.48 1,818,329.26
5/99 3,003,134.06 1,794,872.81
6/99 3,243,258.40 1,920,154.93
7/99 3,194,285.67 1,859,094.01
8/99 3,249,577.46 1,839,759.43
9/99 3,246,417.93 1,824,121.47
10/99 3,630,300.93 1,965,126.06
11/99 4,093,172.20 2,168,713.12
12/99 5,306,432.04 2,544,334.24
1/00 5,336,447.58 2,543,825.37
2/00 7,345,909.19 3,078,537.46
3/31/00 6,556,026.48 3,081,616.00
</TABLE>
The graph above shows the value of a hypothetical $250,000 investment in the
Fund's Class I shares compared with the Russell Mid Cap Growth Index for the
periods indicated. The Fund's Class I shares calculate their performance based
upon the historical performance of their corresponding series of
Nicholas-Applegate Mutual Funds (renamed Pilgrim Mutual Funds), adjusted to
reflect all fees and expenses applicable to the Fund's Class I shares. [The
Fund's performance includes historical performance of comparable managed
institutional separate accounts managed by the Investment Adviser prior to the
Nicholas-Applegate Mutual Fund's inception.] The Nicholas-Applegate
Institutional Funds' Class I shares were first available on May 7, 1999. Average
annual total return figures include changes in principal value, reinvested
dividends, and capital gain distributions. Absent expense limitations, total
returns would have been slightly lower. Past performance cannot guarantee future
results.
The unmanaged Russell Mid Cap Growth Index measures the stock performance of the
800 smallest companies in the Russell 1000 Index. The average market
capitalization is $4 billion. The Index incepted on 12/31/85. The unmanaged
Index differs from the Fund in composition, does not pay management fees or
expenses and includes reinvested dividends. One cannot invest directly in an
index.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions. You may have a gain or loss when you sell
your shares.
--------------------------------------------------------------------------------
55
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000
------------------------------------------------------------------------
MID CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
--------------------------------------------------------------
COMMON STOCK -- 98.4%
--------------------------------------------------------------
APPLICATIONS SOFTWARE -- 2.3%
BroadVision, Inc.*............... 42,600 $ 1,911,675
Peregrine Systems, Inc.*......... 59,400 3,983,513
------------
5,895,188
------------
BIOTECHNOLOGY -- 5.1%
Celera Genomics*................. 31,900 2,920,844
Genentech, Inc.*................. 21,000 3,192,000
Immunex Corp.*................... 41,700 2,645,344
Medimmune, Inc.*................. 16,700 2,907,888
Millennium Pharmaceuticals,
Inc.*.......................... 10,200 1,324,725
------------
12,990,801
------------
BROADCASTING -- 2.3%
Hispanic Broadcasting Corp.*..... 12,300 1,392,975
InfoSpace.com, Inc.*............. 18,200 2,646,963
Univision Communications, Inc.
Cl. A*......................... 15,500 1,751,500
------------
5,791,438
------------
COMPUTER HARDWARE -- 2.4%
Brocade Communications Systems,
Inc.*.......................... 19,200 3,442,800
Redback Networks, Inc.*.......... 8,400 2,519,475
------------
5,962,275
------------
COMPUTER SERVICES -- 1.3%
Digitas, Inc.*................... 4,800 117,600
Qlogic Corp.*.................... 23,800 3,224,900
------------
3,342,500
------------
COMPUTER SOFTWARE -- 12.3%
Ariba, Inc.*..................... 12,200 2,557,425
BEA Systems, Inc.*............... 22,100 1,621,588
Citrix Systems, Inc.*............ 40,100 2,656,625
E.piphany, Inc.*................. 5,800 774,663
i2 Technologies, Inc.*........... 12,500 1,526,563
Mercury Interactive Corp.*....... 36,400 2,884,700
Siebel Systems, Inc.*............ 28,900 3,451,744
Universal Access, Inc.*.......... 36,000 1,206,000
VeriSign, Inc.*.................. 26,200 3,916,900
Veritas Software Corp.*.......... 70,175 9,192,924
Vitria Technology, Inc.*......... 11,700 1,179,506
------------
30,968,638
------------
DRUGS/PHARMACEUTICALS -- 5.8%
Affymetrix, Inc.*................ 11,100 1,647,656
Alkermes, Inc.*.................. 18,700 1,729,750
Enzon, Inc.*..................... 27,700 1,043,944
Forest Laboratories, Inc. Cl.
A*............................. 31,400 2,653,300
IDEC Pharmaceuticals Corp.*...... 17,200 1,689,900
Pe Corp.*........................ 44,600 4,303,900
Sepracor, Inc.*.................. 21,900 1,594,594
------------
14,663,044
------------
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
ELECTRIC -- 1.5%
AES Corp.*....................... 28,800 $ 2,268,000
Calpine Corp.*................... 15,200 1,428,800
------------
3,696,800
------------
ELECTRONIC COMPONENTS/SEMICONDUCTORS -- 20.4%
Analog Devices, Inc.*............ 62,600 5,043,213
Applied Micro Circuits Corp.*.... 32,800 4,922,050
Broadcom Corp.*.................. 19,200 4,663,200
Conexant Systems, Inc.*.......... 29,500 2,094,500
Credence Systems Corp.*.......... 23,000 2,877,875
JDS Uniphase Corp.*.............. 83,400 10,054,912
Lam Research Corp.*.............. 63,100 2,843,444
LSI Logic Corp.*................. 74,600 5,417,825
Maxim Integrated Products,
Inc.*.......................... 37,300 2,650,631
PMC-Sierra, Inc.*................ 20,900 4,257,069
Waters Corp.*.................... 32,200 3,067,050
Xilinx, Inc.*.................... 44,800 3,710,000
------------
51,601,769
------------
ELECTRONICS -- 1.2%
Teradyne, Inc.*.................. 37,000 3,043,250
------------
FINANCIAL SERVICES -- 0.4%
eSpeed, Inc.*.................... 19,500 1,021,313
------------
INTERNET CONTENT -- 5.3%
CMGI, Inc.*...................... 32,800 3,716,650
Doubleclick, Inc.*............... 12,200 1,142,225
Inktomi Corp.*................... 6,900 1,345,500
Internet Capital Group, Inc.*.... 22,500 2,032,031
Network Solutions, Inc. Cl. A*... 33,200 5,102,943
------------
13,339,349
------------
INTERNET SOFTWARE -- 3.9%
Covad Communications Group,
Inc.*.......................... 23,800 1,725,500
Exodus Communications, Inc.*..... 34,600 4,861,300
Niku Corp.*...................... 19,900 941,519
Vignette Corp.*.................. 13,700 2,195,425
------------
9,723,744
------------
NETWORKING PRODUCTS -- 3.7%
ArrowPoint Communications,
Inc.*.......................... 5,700 675,361
Network Appliance, Inc.*......... 103,400 8,556,350
------------
9,231,711
------------
OIL & GAS SERVICES -- 5.9%
BJ Services Co.*................. 45,700 3,376,087
ENSCO International, Inc.*....... 63,300 2,286,713
National-Oilwell, Inc.*.......... 53,600 1,654,900
Rowan Companies, Inc.*........... 73,600 2,166,600
Smith International, Inc.*....... 33,300 2,580,750
Weatherford International,
Inc.*.......................... 49,100 2,893,831
------------
14,958,881
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
56
<PAGE>
-------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK (Continued)
---------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
PRINTERS & RELATED PRODUCTS -- 1.0%
Lexmark International Group, Inc.
Cl. A*......................... 23,000 $ 2,432,250
------------
PUBLISHING -- 0.7%
TV Guide, Inc.*.................. 37,900 1,821,569
------------
RETAIL -- 0.9%
Starbucks Corp.*................. 51,800 2,321,288
------------
RETAIL-DEPARTMENT STORES -- 0.7%
Kohls Corp.*..................... 17,600 1,804,000
------------
TELECOMMUNICATIONS -- 14.9%
Adaptive Broadband Corp.*........ 20,600 1,102,100
Avanex Corp.*.................... 5,800 880,150
CIENA Corp.*..................... 56,200 7,088,224
Crown Castle International
Corp.*......................... 72,700 2,753,512
EchoStar Communications Corp.*... 34,400 2,717,600
E-Tek Dynamics, Inc.*............ 10,400 2,446,600
Metromedia Fiber Network, Inc.
Cl. A*......................... 37,600 3,635,449
Nextel Communications, Inc. Cl.
A*............................. 35,400 5,248,049
Nextlink Communications, Inc. Cl.
A*............................. 19,200 2,374,800
Voicestream Wireless Corp.*...... 55,500 7,149,093
Winstar Communications, Inc.*.... 37,750 2,265,000
------------
37,660,577
------------
TELECOMMUNICATIONS EQUIPMENT -- 4.9%
Comverse Technology, Inc.*....... 12,000 2,268,000
Nextel Partners, Inc. Cl. A*..... 42,000 1,218,000
RF Micro Devices, Inc.*.......... 32,000 4,300,000
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
TELECOMMUNICATIONS EQUIPMENT (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
Scientific-Atlanta, Inc.*........ 38,100 $ 2,416,968
SDL, Inc.*....................... 10,100 2,150,038
------------
12,353,006
------------
TELECOMMUNICATIONS SERVICES -- 1.5%
McLeodUSA, Inc.*................. 28,300 2,400,194
Time Warner Telecom, Inc. Cl.
A*............................. 16,600 1,319,700
------------
3,719,894
------------
TOTAL COMMON STOCK
(Cost: $125,479,070)......................... 248,343,285
------------
<CAPTION>
PRINCIPAL
AMOUNT
--------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 1.7%
--------------------------------------------------------------
Citibank Nassau
5.625%, 04/03/00
(Cost: $4,167,102)............. $4,167,102 4,167,102
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 100.1%
(COST: $129,646,172)........................ 252,510,387
LIABILITIES IN EXCESS OF OTHER ASSETS --
(0.1)%........................................ (118,931)
------------
NET ASSETS -- 100.0%.......................... $252,391,456
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
57
<PAGE>
SMALL CAP GROWTH FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: THOMAS BLEAKLEY, Partner, Portfolio Manager; JOHN C. MCCRAW,
Partner, Portfolio Manager; PAUL E. CLUSKEY, Portfolio Manager.
CHIEF INVESTMENT OFFICER: CATHERINE SOMHEGYI
GOAL: The Small Cap Growth Fund seeks to maximize long-term capital
appreciation through investments primarily in US companies with market
capitalizations corresponding to the middle 90% of the Russell 2000 Growth Index
at time of purchase.
MARKET OVERVIEW: The performance of small-cap growth stocks was exceptional
during the 12-month period ended March 31, 2000. In the fourth quarter of 1999,
the Russell 2000 Growth Index returned 33.4% -- its best quarter on record. The
following factors positively influenced small-cap stocks during the fiscal year:
- High exposure to Internet companies
- Robust IPO issuance reflecting investor confidence and strong demand
- Increased share buybacks motivated by attractive small-cap valuations
- Significant cash flows into mutual funds
Small-cap growth stocks rebounded sharply in the last six months of the period
following a third quarter 1999 decline triggered by interest rate concerns.
Market leadership was narrow, with a minority of companies responsible for the
majority of returns.
PERFORMANCE: The fund posted a gain of 103.8% for the 12-month period ended
March 31, 2000 versus 59.1% for the Russell 2000 Growth Index.
PORTFOLIO SPECIFICS: The fund's outstanding performance during the period was
due to stock selection, particularly in the technology sector. Among the fund's
best-performing holdings were software companies like Mercury Interactive,
Business Objects, and ISS Group. Other technology names that were major
contributors to the fund's outperformance included InfoSpace, an Internet and
online content provider, and Macrovision, a developer of video scrambling and
copy protection products.
MARKET OUTLOOK: Looking ahead, we are optimistic that small-cap growth stocks
will continue to perform well due to a number of positive factors:
- Attractive relative valuations
- Enduring US economic expansion
- Strong revenue growth and a bright outlook for corporate earnings
Because we expect the market's advance to remain narrow, our company-specific
focus will prove essential in selecting stocks with the most exciting prospects
for growth.
--------------------------------------------------------------------------------
58
<PAGE>
SMALL CAP GROWTH FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN SMALL CAP GROWTH FUND
INSTITUTIONAL SHARES WITH THE RUSSELL 2000 GROWTH INDEX.
<TABLE>
<S> <C> <C>
ANNUALIZED TOTAL RETURNS
As of 3/31/00 SINCE
1 YEAR 5 YEARS INCEPTION
103.75% 31.67% 23.98%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SMALL CAP RUSSELL 2000
GROWTH FUND INSTITUTIONAL SHARES GROWTH INDEX
<S> <C> <C>
10/1/1993 $250,000.00 $250,000.00
10/93 250,400.00 257,230.00
11/93 237,400.00 246,825.05
12/93 249,920.00 256,564.76
1/94 257,143.12 263,394.52
2/94 255,285.75 262,235.58
3/94 234,854.63 246,126.45
4/94 235,473.76 246,503.02
5/94 229,076.14 240,978.89
6/94 217,519.14 230,681.86
7/94 222,678.51 233,969.08
8/94 237,743.88 251,137.73
9/94 240,633.13 252,190.00
10/94 243,935.13 254,875.82
11/94 231,552.63 244,563.54
12/94 241,146.93 250,325.46
1/95 231,007.29 245,226.33
2/95 243,351.19 256,558.24
3/95 255,254.24 264,052.31
4/95 259,442.35 268,023.65
5/95 261,426.19 271,534.76
6/95 284,571.01 290,246.22
7/95 312,124.36 312,868.01
8/95 313,006.06 316,728.81
9/95 319,618.87 323,250.25
10/95 307,054.54 307,349.57
11/95 320,721.00 320,965.16
12/95 327,708.03 328,077.75
1/96 323,033.16 325,361.26
2/96 342,667.60 340,197.74
3/96 352,952.30 346,923.45
4/96 389,649.99 373,556.76
5/96 411,388.11 392,720.22
6/96 386,377.58 367,193.41
7/96 341,966.37 322,359.09
8/96 372,352.99 346,223.33
9/96 397,129.77 364,053.84
10/96 379,832.77 348,363.12
11/96 383,573.74 358,047.61
12/96 389,595.30 365,029.54
1/97 394,412.55 373,863.25
2/97 351,960.52 351,281.91
3/97 332,992.58 326,491.95
4/97 327,874.25 322,704.64
5/97 379,960.80 371,207.15
6/97 407,660.00 383,791.07
7/97 436,864.59 403,441.17
8/97 445,294.78 415,544.41
9/97 487,144.67 448,704.85
10/97 452,520.66 421,737.69
11/97 435,016.67 411,683.47
12/97 436,748.43 411,914.01
1/98 426,704.25 406,435.55
2/98 464,802.85 442,319.75
3/98 490,779.16 460,875.06
4/98 490,779.16 463,700.22
5/98 452,334.22 430,012.40
6/98 468,959.06 434,407.13
7/98 429,194.63 398,134.13
8/98 325,072.58 306,244.78
9/98 358,956.36 337,924.93
10/98 363,544.79 354,901.73
11/98 401,943.53 382,442.10
12/98 455,853.84 417,053.11
1/99 500,962.47 435,820.50
2/99 447,785.63 395,942.93
3/99 495,828.16 410,038.50
4/99 525,167.10 446,244.90
5/99 504,263.10 446,958.89
6/99 566,975.09 470,513.62
7/99 569,542.25 455,974.75
8/99 564,774.67 438,921.29
9/99 581,644.57 447,392.48
10/99 637,021.82 458,845.72
11/99 720,228.25 507,345.72
12/99 882,812.21 596,790.77
1/00 860,760.60 591,240.61
2/00 1,159,018.07 728,822.30
3/31/00 1,010,263.09 652,223.08
</TABLE>
The graph above shows the value of a hypothetical $250,000 investment in the
Fund's Class I shares compared with the Russell 2000 Growth Index for the
periods indicated. The Fund's Class I shares calculate their performance based
upon the historical performance of their corresponding series of
Nicholas-Applegate Mutual Funds (renamed Pilgrim Mutual Funds), adjusted to
reflect all fees and expenses applicable to the Fund's Class I shares. The
Nicholas-Applegate Institutional Funds' Class I shares were first available on
May 7, 1999. Average annual total return figures include changes in principal
value, reinvested dividends, and capital gain distributions. Absent expense
limitations, total returns would have been slightly lower. Past performance
cannot guarantee future results.
The unmanaged Russell 2000 Growth Index is a widely regarded small-cap index of
the 2,000 smallest securities in the Russell 3000 Growth Index, which comprises
the 3,000 largest U.S. securities. The unmanaged Index differs from the Fund in
composition, does not pay management fees or expenses and includes reinvested
dividends. One cannot invest directly in an index.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions. You may have a gain or loss when you sell
your shares.
--------------------------------------------------------------------------------
59
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000
------------------------------------------------------------------------
SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
--------------------------------------------------------------
COMMON STOCK -- 97.8%
--------------------------------------------------------------
ADVERTISING -- 0.3%
24/7 Media, Inc.*............... 4,700 $ 185,650
Avenue A, Inc.*................. 2,000 61,000
Getty Images, Inc.*............. 20,000 718,750
------------
965,400
------------
AEROSPACE/DEFENSE -- 0.6%
Aeroflex, Inc.*................. 14,300 707,850
Newport Corp.................... 4,400 594,000
Photon Dynamics, Inc.*.......... 7,000 483,000
------------
1,784,850
------------
AIRLINES -- 0.1%
Skywest, Inc.................... 7,000 273,875
------------
APPAREL -- 0.3%
Timberland Co. Cl. A*........... 16,400 836,400
------------
APPLICATIONS SOFTWARE -- 2.3%
Exchange Applications, Inc.*.... 17,000 899,672
HNC Software, Inc.*............. 12,500 900,781
National Instruments Corp.*..... 15,950 748,653
OnDisplay, Inc.*................ 3,000 247,875
OpenTV Corp. Cl. A*............. 4,700 556,363
Peregrine Systems, Inc.*........ 42,000 2,816,625
SilverStream Software, Inc.*.... 4,300 317,663
------------
6,487,632
------------
AUCTIONS -- 0.1%
Sothebys Holding, Inc. Cl. A.... 15,100 278,406
------------
AUTO-TRUCKS -- 0.1%
Oshkosh Truck Co. Cl. B......... 7,000 217,438
------------
BATTERY SYSTEMS -- 0.1%
Valence Technology, Inc.*....... 16,400 386,425
------------
BEVERAGES-ALCOHOLIC -- 0.2%
Canandaigua Brands, Inc. Cl.
A*............................ 12,300 627,300
------------
BIOTECHNOLOGY -- 3.5%
Abgenix, Inc.*.................. 6,100 842,563
Affymetrix, Inc.*............... 4,700 697,656
Aurora Biosciences Corp.*....... 13,700 559,988
Cephalon, Inc.*................. 37,500 1,406,250
CuraGen Corp.*.................. 25,000 1,168,750
Diversa Corp.*.................. 2,600 122,200
Gene Logic, Inc.*............... 2,500 105,156
Genzyme Transgenics Corp.*...... 17,300 346,000
Imclone Systems, Inc.*.......... 8,900 684,188
Intermune Pharmaceuticals,
Inc.*......................... 11,100 221,306
Invitrogen Corp.*............... 5,200 301,925
Lynx Therapeutics, Inc.*........ 4,600 136,850
Maxim Pharmaceuticals, Inc.*.... 3,600 168,975
Maxygen, Inc.*.................. 3,600 234,675
Millennium Pharmaceuticals,
Inc.*......................... 12,300 1,597,462
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
BIOTECHNOLOGY (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
Myriad Genetics, Inc.*.......... 500 $ 30,125
Protein Design Labs, Inc.*...... 6,800 540,600
Trimeris, Inc.*................. 9,500 474,406
Visible Genetics, Inc.*......... 9,600 355,200
------------
9,994,275
------------
BROADCASTING -- 3.9%
Citadel Communications Corp.*... 24,400 1,029,375
Cumulus Media, Inc. Cl. A*...... 1,700 24,438
Emmis Communications Corp. Cl.
A*............................ 44,600 2,073,900
Entercom Communications
Corp.*........................ 21,000 1,071,000
Pegasus Communications Corp. Cl.
A*............................ 17,200 2,420,899
Price Communications Corp.*..... 25,300 581,900
Radio One, Inc.*................ 11,400 759,525
Saga Communications, Inc. Cl.
A*............................ 26,825 513,028
SBS Broadcasting S.A.*.......... 15,100 928,650
Sirius Satellite Radio, Inc.*... 16,700 951,900
TCI Satellite Entertainment,
Inc.*......................... 11,500 219,938
XM Satellite Radio Holdings,
Inc.*......................... 10,300 359,213
------------
10,933,766
------------
CHEMICALS -- 0.5%
Georgia Gulf Corp............... 18,700 486,200
Spartech Corp................... 8,300 285,313
Symyx Technologies*............. 2,000 86,250
Uniroyal Technology Corp.*...... 9,600 451,200
------------
1,308,963
------------
COMMUNICATIONS SOFTWARE -- 0.7%
Apropos Technology, Inc.*....... 1,700 62,900
AVT Corp.*...................... 32,400 382,725
Puma Technology, Inc.*.......... 27,400 1,387,125
Witness Systems, Inc.*.......... 7,800 236,925
------------
2,069,675
------------
COMPUTER SERVICES -- 2.2%
Aspen Technology, Inc.*......... 15,900 641,962
eLoyalty Corp.*................. 12,100 288,888
Entrust Technologies, Inc.*..... 13,700 1,165,568
Inforte Corp.*.................. 1,100 53,900
Jacada, Ltd.*................... 2,900 42,413
McAfee.com Corp. Cl. A*......... 8,300 429,006
M-Systems Flash Disk Pioneers,
Ltd.*......................... 16,300 863,900
MTI Technology Corp.*........... 11,700 308,588
Predictive Systems, Inc.*....... 2,900 132,131
QRS Corp.*...................... 9,000 677,250
Silicon Storage Technology,
Inc.*......................... 4,500 332,438
SonicWALL, Inc.*................ 15,500 1,032,687
Technology Solutions Co.*....... 16,300 148,738
------------
6,117,469
------------
COMPUTER SOFTWARE -- 8.0%
BindView Development Corp.*..... 42,200 1,310,838
Broadbase Software, Inc.*....... 11,500 917,125
Business Objects S.A. -- ADR*... 34,500 3,432,749
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
60
<PAGE>
-------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK (Continued)
---------------------------------------------------------
COMPUTER SOFTWARE (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
E.Piphany, Inc.*................ 2,400 $ 320,550
Harbinger Corp.*................ 48,100 1,400,913
ISS Group, Inc.*................ 33,900 3,949,349
Macromedia, Inc.*............... 21,000 1,896,563
Mercury Interactive Corp.*...... 77,100 6,110,174
Metasolv Software, Inc.*........ 3,700 218,531
Mission Critical Software,
Inc.*......................... 9,200 562,350
Pivotal Corp.*.................. 3,700 118,863
Proxicom, Inc.*................. 19,000 841,938
Quest Software, Inc............. 900 101,475
Sagent Technology, Inc.*........ 25,500 734,719
Scient Corp.*................... 2,200 199,513
Selectica, Inc.*................ 2,400 211,800
Transaction Systems Architects,
Inc. Cl. A*................... 9,800 282,975
------------
22,610,425
------------
COMPUTERS -- 1.4%
Affiliated Computer Services,
Inc. Cl. A* .................. 17,300 657,400
Concurrent Computer Corp.*...... 18,500 234,719
Creative Computers, Inc.*....... 19,100 208,906
Extended Systems, Inc.*......... 19,800 2,178,000
Globix Corp.*................... 18,300 697,688
------------
3,976,713
------------
CONSULTING SERVICES -- 0.1%
Management Network Group,
Inc.*......................... 7,200 193,950
------------
CONSUMER SERVICES -- 0.3%
Forrester Research, Inc.*....... 12,900 699,825
Western Gas Resources, Inc...... 9,400 149,225
------------
849,050
------------
CRUISE LINES -- 0.1%
American Classic Voyages Co.*... 11,200 282,100
------------
DATA PROCESSING/MANAGEMENT SOFTWARE -- 2.2%
Advanced Digital Information*... 30,000 1,027,500
Documentum, Inc.*............... 25,200 1,965,600
Factset Research Systems,
Inc........................... 12,500 338,281
Polycom, Inc.*.................. 12,400 981,925
Reynolds & Reynolds Co. Cl. A... 26,200 707,400
TSI International Software,
Ltd.*......................... 14,600 1,212,713
------------
6,233,419
------------
DISTRIBUTION/WHOLESALE -- 0.1%
Brightpoint, Inc.*.............. 22,600 276,850
------------
DIVERSIFIED FINANCIAL SERVICES -- 0.4%
London Pacific Group, Ltd. --
ADR*.......................... 18,400 427,800
Metris Cos., Inc.*.............. 17,600 684,200
------------
1,112,000
------------
DRILLING -- 1.1%
Atwood Oceanics, Inc.*.......... 5,600 371,350
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
DRILLING (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
Marine Drilling Co.*............ 41,500 $ 1,138,656
Nabors Industries*.............. 18,362 712,675
Precision Drilling Corp.*....... 11,400 380,475
Unit Corp.*..................... 9,500 104,500
UTI Energy Corp.*............... 9,200 347,300
------------
3,054,956
------------
DRUGS/PHARMACEUTICALS -- 3.8%
Alkermes, Inc.*................. 16,600 1,535,500
Alpharma, Inc. Cl. A............ 19,100 701,925
Antigenics, Inc.*............... 11,600 236,350
Celgene Corp.*.................. 6,500 647,156
Cubist Pharmaceuticals, Inc.*... 6,000 251,250
IDEC Pharmaceuticals Corp.*..... 20,500 2,014,125
Jones Medical Industries,
Inc........................... 71,950 2,185,481
Medarex, Inc.*.................. 2,000 100,500
Medicis Pharmaceutical Corp. Cl.
A*............................ 32,400 1,296,000
NBTY, Inc.*..................... 17,200 235,425
Pharmacopeia, Inc.*............. 13,700 671,300
Titan Pharmaceuticals, Inc.*.... 5,100 158,738
United Therapeutics Corp.*...... 7,800 606,450
------------
10,640,200
------------
E-COMMERCE -- 0.1%
PurchasePro.com, Inc.*.......... 3,300 239,250
SciQuest.com, Inc.*............. 3,400 87,550
------------
326,800
------------
EDUCATIONAL SOFTWARE -- 0.6%
Lightspan Partnership, Inc.*.... 11,100 197,025
SmartForce Public Ltd., Co. --
ADR*.......................... 33,300 1,527,638
------------
1,724,663
------------
ELECTRONIC COMPONENTS/SEMICONDUCTORS -- 14.8%
ACT Manufacturing, Inc.*........ 7,500 419,531
Alpha Industries, Inc.*......... 18,700 1,776,500
Applied Materials, Inc.*........ 13,109 1,235,523
Burr Brown Corp.*............... 18,550 1,008,656
C-Cube Microsystems, Inc.*...... 19,600 1,427,125
Cypress Semiconductor Corp.*.... 23,800 1,173,638
Electronic Scientific
Industries, Inc.*............. 40,200 2,331,600
EMCORE Corp.*................... 23,500 2,703,969
Exar Corp.*..................... 7,500 536,719
Fairchild Semiconductor
International Cl. A*.......... 11,500 419,750
Globespan, Inc.*................ 19,100 1,947,006
Ibis Technology Corp.*.......... 4,600 414,000
Integrated Device Technology,
Inc.*......................... 17,600 697,400
Integrated Silicon Solution*.... 7,300 213,981
International Rectifier*........ 20,200 770,125
Kent Electronics Corp.*......... 9,500 277,281
Kopin Corp*..................... 30,300 2,083,124
LAM Research Corp.*............. 47,000 2,117,938
LTX Corp.*...................... 16,000 723,000
Mattson Technology, Inc.*....... 9,000 383,625
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
61
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000 -- CONTINUED
--------------------------------------------------------------------------------
SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK (Continued)
---------------------------------------------------------
ELECTRONIC COMPONENTS/SEMICONDUCTORS (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
MEMC Electronic Materials,
Inc.*......................... 15,100 $ 303,888
Metalink, Ltd.*................. 6,400 245,600
Methode Electronics, Inc. Cl.
A............................. 20,700 1,045,350
Micrel, Inc.*................... 21,700 2,083,200
Microsemi Corp.*................ 15,500 530,875
MIPS Technologies, Inc.*........ 7,100 394,938
Photronics, Inc.*............... 13,300 469,656
Power Integrations, Inc.*....... 25,500 637,500
Qlogic Corp.*................... 33,400 4,525,699
Quantum Effect Devices, Inc.*... 2,200 175,175
Rudolph Technologies, Inc.*..... 9,800 441,000
S3, Inc.*....................... 26,700 560,700
Semtech Corp.*.................. 14,200 909,688
St Assembly Test Services, Ltd.
-- ADR*....................... 1,900 92,150
Transwitch Corp.*............... 23,125 2,222,891
Triquint Semiconductor, Inc.*... 18,500 1,359,750
Varian Semiconductor Equipment
Association, Inc.*............ 27,900 1,775,138
Virata Corp.*................... 15,000 1,498,125
------------
41,931,814
------------
ELECTRONICS -- 3.8%
Amphenol Corp. Cl. A*........... 9,600 981,600
Credence Systems Corp.*......... 12,500 1,564,063
CTS Corp........................ 15,300 872,100
Cymer, Inc.*.................... 20,900 1,045,000
DII Group, Inc.*................ 11,000 1,243,688
Harmonic Lightwaves, Inc.*...... 5,100 424,575
Mechanical Technology, Inc.*.... 13,800 979,800
Northeast Optic Network,
Inc.*......................... 5,400 456,638
Power One, Inc.*................ 18,200 1,098,825
Robotic Vision Systems, Inc.*... 10,100 161,600
Veeco Instruments, Inc.*........ 14,100 1,043,400
Zygo Corp.*..................... 15,100 728,575
------------
10,599,864
------------
ENGINEERING & CONSTRUCTION -- 0.3%
Dycom Industries, Inc.*......... 17,300 843,375
------------
ENTERPRISE SOFTWARE -- 1.1%
Aspect Development, Inc.*....... 27,200 1,751,000
JDA Software Group, Inc.*....... 20,500 299,813
Manugistics Group, Inc.*........ 18,300 919,575
------------
2,970,388
------------
ENTERTAINMENT -- 1.5%
Macrovision Corp.*.............. 45,800 3,944,525
SFX Entertainment, Inc. Cl.
A*............................ 10,100 412,206
------------
4,356,731
------------
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
FOOD -- 0.2%
Hain Food Group, Inc.*.......... 14,900 $ 421,856
Michael Foods, Inc.............. 7,900 165,900
------------
587,756
------------
HEALTH CARE -- 0.1%
Hooper Holmes, Inc.............. 8,500 291,656
------------
HOME FURNISHINGS -- 0.2%
Ethan Allen Interiors, Inc...... 25,650 641,250
------------
INDUSTRIAL AUTOMATION/ROBOTICS -- 0.2%
PRI Automation, Inc.*........... 9,400 574,575
------------
INSTRUMENTS -- 0.9%
Microchip Technology, Inc.*..... 21,000 1,380,750
Therma-Wave, Inc.*.............. 6,900 234,600
Varian, Inc.*................... 25,200 967,050
------------
2,582,400
------------
INSURANCE -- 0.0%
HealthExtras, Inc.*............. 8,300 37,350
------------
INTERNET CONTENT -- 2.1%
About.com, Inc.*................ 8,200 722,624
Ask Jeeves, Inc.*............... 7,500 458,438
Digital Insight Corp.*.......... 5,900 302,375
eMerge Interactive, Inc. Cl.
A*............................ 5,500 165,688
FairMarket, Inc.*............... 1,400 31,850
GetThere.com, Inc.*............. 2,600 39,975
Internet Pictures Corp.*........ 7,100 240,956
Lante Corp.*.................... 2,900 88,088
MedicaLogic, Inc.*.............. 4,700 81,663
MyPoints.com, Inc.*............. 2,700 72,394
NaviSite, Inc.*................. 7,100 864,425
S1 Corp.*....................... 21,600 1,850,848
SportsLine.com, Inc.*........... 10,100 297,319
Switchboard, Inc.*.............. 1,600 55,000
Telescan, Inc.*................. 21,700 512,662
Vicinity Corp.*................. 5,400 187,650
------------
5,971,955
------------
INTERNET SOFTWARE -- 9.1%
724 Solutions, Inc.*............ 2,400 298,800
Allaire Corp.*.................. 17,200 1,300,750
Appnet Systems, Inc.*........... 22,300 1,048,100
Art Technology Group, Inc.*..... 15,600 1,024,725
Backweb Technologies, Ltd.*..... 7,700 264,688
Be Free, Inc.*.................. 9,000 198,000
CacheFlow, Inc.*................ 5,200 616,200
Chordiant Software, Inc.*....... 6,900 112,125
Clarent Corp.*.................. 9,900 892,856
Commtouch Software, Ltd.*....... 4,500 211,781
Concentric Network Corp.*....... 18,100 995,500
CyberSource Corp.*.............. 21,300 793,425
Digital Impact, Inc.*........... 8,900 316,506
Digital Island, Inc.*........... 5,300 322,969
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
62
<PAGE>
-------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK (Continued)
---------------------------------------------------------
INTERNET SOFTWARE (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
Digital River, Inc.*............ 11,400 $ 245,100
Eprise Corp.*................... 3,600 56,700
Etinuum, Inc.*.................. 3,600 34,200
Extensity, Inc.*................ 2,200 105,600
F5 Networks, Inc.*.............. 7,800 528,450
FirePond, Inc.*................. 2,800 114,625
HearMe, Inc.*................... 13,700 345,925
HotJobs.com, Ltd.*.............. 5,000 126,250
Interliant, Inc.*............... 4,100 115,825
InterWorld Corp.*............... 6,700 378,550
ITXC Corp.*..................... 11,300 531,806
Keynote Systems, Inc.*.......... 6,700 685,075
Liquid Audio*................... 10,000 132,500
Loudeye Technologies, Inc.*..... 1,900 66,263
Mail.com, Inc.*................. 14,300 246,675
MatrixOne, Inc.*................ 1,900 75,881
Mediaplex, Inc.*................ 2,600 135,200
N2H2, Inc.*..................... 4,500 63,563
National Information Consortium,
Inc.*......................... 4,500 156,375
Netegrity, Inc.*................ 9,700 664,450
Netobjects, Inc.*............... 13,900 316,225
Netopia, Inc.*.................. 19,100 1,374,005
Netsolve, Inc.*................. 2,900 93,525
Open Market, Inc.*.............. 9,500 244,625
PC-Tel, Inc.*................... 9,700 729,924
Preview Systems, Inc.*.......... 4,000 189,250
Primus Knowledge Solutions,
Inc.*......................... 4,600 395,600
Razorfish, Inc. Cl. A*.......... 21,100 580,250
Register.Com, Inc.*............. 4,700 326,650
Retek, Inc.*.................... 4,200 172,988
Shopnow.com, Inc.*.............. 12,300 179,888
Silknet Software, Inc.*......... 9,400 977,600
Software.com, Inc.*............. 10,900 1,404,737
Spyglass, Inc.*................. 9,000 697,922
Stamps.com, Inc.*............... 4,700 90,769
Symantec Corp.*................. 24,900 1,870,611
Talk.com, Inc.*................. 30,700 491,200
Versata, Inc.*.................. 11,000 662,063
Viant Corp.*.................... 8,900 298,150
Vitria Technology, Inc.*........ 5,900 594,794
WatchGuard Technologies,
Inc.*......................... 3,600 324,000
webMethods, Inc.*............... 1,100 265,513
Xpedior, Inc.*.................. 6,500 146,250
------------
25,631,977
------------
INVESTMENT COMPANIES -- 0.3%
American Capital Strategies..... 10,400 263,900
SEI Investment Co............... 4,700 533,156
------------
797,056
------------
MACHINERY-DIVERSIFIED -- 1.4%
Asyst Technologies, Inc.*....... 18,100 1,058,850
Brooks Automation, Inc.*........ 9,000 562,500
GaSonics International Corp.*... 11,400 452,081
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
MACHINERY-DIVERSIFIED (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
Helix Technology Corp........... 2,400 $ 144,150
Kulicke & Soffa Industries*..... 22,400 1,435,000
Semitool, Inc.*................. 9,200 167,325
------------
3,819,906
------------
MEDICAL INSTRUMENTS -- 1.0%
Allscripts, Inc.*............... 4,800 288,600
Molecular Devices Corp.*........ 18,500 1,419,874
Resmed, Inc.*................... 9,800 699,475
Techne Corp.*................... 4,500 310,500
------------
2,718,449
------------
MEDICAL SUPPLIES/EQUIPMENT -- 0.1%
Zoll Medical Corp.*............. 5,100 261,375
------------
METAL FABRICATION/HARDWARE -- 0.2%
Mueller Industries, Inc.*....... 16,700 507,263
------------
MISCELLANEOUS MANUFACTURING -- 0.1%
Simpson Manufacturing, Inc.*.... 4,700 185,650
------------
NETWORK SOFTWARE -- 0.1%
Packeteer, Inc.*................ 4,200 147,000
------------
NETWORKING PRODUCTS -- 1.3%
Black Box Corp.*................ 10,200 706,191
Crossroads Systems, Inc.*....... 1,800 185,850
Elbit, Ltd.*.................... 16,400 213,200
Emulex Corp.*................... 7,000 763,875
Network Peripherals, Inc.*...... 9,700 344,350
ODS Networks, Inc.*............. 14,200 340,800
Optibase, Ltd.*................. 2,600 61,750
Turnstone Systems, Inc.*........ 1,700 195,500
Visual Networks Inc.*........... 15,900 902,325
------------
3,713,841
------------
OIL & GAS PRODUCERS -- 0.3%
Chieftain International,
Inc.*......................... 4,600 92,575
Forest Oil Corp.*............... 10,700 113,688
Louis Dreyfus Natural Gas
Corp.*........................ 9,200 312,800
Stone Energy Corp.*............. 5,200 256,100
------------
775,163
------------
OIL & GAS SERVICES -- 2.0%
BJ Services, Co.*............... 20,600 1,521,824
CAL Dive International, Inc.*... 14,900 756,175
Global Industries, Ltd.*........ 42,300 618,638
Maverick Tube Corp.*............ 4,300 139,481
Pride International, Inc.*...... 48,200 1,099,563
Seitel, Inc.*................... 9,000 71,438
Smith International, Inc.*...... 10,200 790,500
Tuboscope, Inc.*................ 24,200 411,400
Varco International, Inc.*...... 10,200 128,775
------------
5,537,794
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
63
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000 -- CONTINUED
--------------------------------------------------------------------------------
SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK (Continued)
---------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
OPTICAL RECOGNITION SOFTWARE -- 0.2%
Optimal Robotics Corp. Cl. A*... 9,200 $ 432,400
------------
OTHER COMMERCIAL SERVICES -- 0.8%
Korn-Ferry International*....... 21,700 645,575
NOVA Corp.*..................... 18,300 532,988
On Assignment, Inc.*............ 8,900 400,500
TeleTech Holding, Inc.*......... 11,100 382,950
Xceed, Inc.*.................... 9,400 225,600
------------
2,187,613
------------
PHOTO EQUIPMENT & SUPPLIES -- 0.2%
Concord Camera Corp.*........... 9,500 522,500
------------
PRINTING-COMMERCIAL -- 0.0%
Mail-Well, Inc.*................ 13,000 112,938
------------
PUBLISHING -- 0.2%
Information Holdings, Inc.*..... 10,200 319,388
Playboy Enterprises Cl. B*...... 14,600 290,175
------------
609,563
------------
RECREATIONAL PRODUCTS -- 0.2%
Monaco Coach Corp.*............. 8,900 169,100
National R.V. Holding, Inc.*.... 12,800 202,400
Winnebago Industries, Inc....... 18,100 326,931
------------
698,431
------------
RETAIL-APPAREL -- 0.8%
Genesco, Inc.*.................. 7,200 94,500
Kenneth Cole Productions, Inc.
Cl. A*........................ 15,150 594,638
Pacific Sunwear of California,
Inc.*......................... 26,300 1,012,549
The Men's Wearhouse, Inc.*...... 22,500 666,563
------------
2,368,250
------------
RETAIL-BEDDING -- 0.2%
Linens 'N Things, Inc.*......... 16,400 561,700
------------
RETAIL-COMPUTER EQUIPMENT -- 0.4%
CDW Computer Centers, Inc.*..... 5,200 439,075
Insight Enterprises, Inc.*...... 18,500 674,094
------------
1,113,169
------------
RETAIL-DISCOUNT -- 0.0%
Factory 2-U Stores, Inc.*....... 5,000 125,000
------------
RETAIL-ELECTRONICS -- 0.1%
InterTAN, Inc.*................. 14,100 193,875
------------
RETAIL-INTERNET -- 0.1%
Ubid, Inc.*..................... 13,231 387,834
------------
RETAIL-MAIL ORDER -- 0.4%
Valuevision International, Inc.
Cl. A*........................ 28,700 1,187,463
------------
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
RETAIL-RESTAURANTS -- 0.2%
Jack in the Box, Inc.*.......... 18,500 $ 394,282
Sonic Corp.*.................... 11,500 108,531
------------
502,813
------------
RETAIL-SUNGLASSES -- 0.1%
Sunglass Hut International,
Inc.*......................... 23,600 184,375
------------
SUPERCONDUCTOR PRODUCTS & SYSTEMS -- 0.2%
American Superconductor
Corp.*........................ 13,800 614,100
------------
TELECOMMUNICATIONS -- 5.6%
Adaptive Broadband Corp.*....... 20,200 1,080,700
Alamosa PCS Holdings, Inc.*..... 2,800 105,700
American Mobile Satellite
Corp.*........................ 19,100 458,400
Caprock Communications Corp.*... 11,600 568,400
C-COR.net Corp.*................ 14,500 710,500
Digital Microwave Corp.*........ 24,900 843,488
Finisar Corp.*.................. 3,600 527,456
Focal Communications Corp.*..... 20,900 1,170,400
Intermedia Communications,
Inc.*......................... 7,700 372,006
International FiberCom, Inc.*... 23,900 567,625
InterWAVE Communications
International, Ltd.*.......... 11,500 346,438
MRV Communications, Inc.*....... 11,400 1,044,525
NetOptix Corp.*................. 13,700 2,352,974
Pac-West Telecomm, Inc.*........ 6,200 193,750
Pinnacle Systems, Inc.*......... 18,600 618,450
Startek, Inc.*.................. 10,100 744,875
US LEC Corp. Cl. A*............. 12,300 488,925
ViaSat, Inc.*................... 4,500 324,000
Viatel, Inc.*................... 28,000 1,405,250
Western Wireless Corp. Cl. A*... 10,200 467,288
Winstar Communications, Inc.*... 22,550 1,353,000
------------
15,744,150
------------
TELECOMMUNICATIONS EQUIPMENT -- 9.9%
Advanced Fibre Communications,
Inc.*......................... 18,700 1,172,256
Aether Systems, Inc.*........... 4,500 816,750
Airnet Communications Corp.*.... 4,700 164,206
American Tower Systems Cl. A*... 25,500 1,259,063
Anaren Microwave, Inc.*......... 5,200 498,550
Antec Corp.*.................... 8,100 362,981
Audiocodes, Ltd.*............... 14,500 1,455,438
Aware, Inc.*.................... 16,900 678,113
Com21, Inc.*.................... 7,200 338,400
Commscope, Inc.*................ 18,200 830,375
Corsair Communications, Inc.*... 12,000 229,500
Digital Lightwave, Inc.*........ 22,000 1,370,875
Ditech Communications Corp.*.... 16,200 1,718,213
DSP Group, Inc.*................ 30,300 1,999,800
Efficient Networks, Inc.*....... 9,400 1,464,050
Glenayre Technologies, Inc.*.... 33,900 595,369
Natural Microsystems Corp.*..... 10,300 883,225
Net2000 Communications, Inc.*... 11,800 280,250
Netro Corp.*.................... 17,100 1,111,765
Orckit Communications, Ltd.*.... 17,200 1,152,400
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
64
<PAGE>
-------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK (Continued)
---------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
Pairgain Technologies, Inc.*.... 26,600 $ 497,088
Paradyne Networks, Inc.*........ 4,200 130,200
P-Com, Inc.*.................... 25,500 471,750
Pinnacle Holdings, Inc.*........ 26,500 1,464,124
Powerwave Technologies, Inc.*... 23,000 2,875,000
Proxim, Inc.*................... 10,100 1,208,843
Telaxis Communications Corp.*... 5,200 312,569
Tollgrade Communications,
Inc.*......................... 13,800 731,400
TUT Systems, Inc.*.............. 19,600 1,167,424
Westell Technologies, Inc. Cl.
A*............................ 19,000 605,625
------------
27,845,602
------------
TELECOMMUNICATIONS SERVICES -- 3.2%
Adelphia Business Solutions,
Inc.*......................... 15,100 930,536
Aspect Communications Corp.*.... 40,700 1,508,443
Choice One Communications,
Inc.*......................... 5,500 195,250
Clearnet Communications, Inc.
Cl. A*........................ 30,400 1,252,100
Ectel, Ltd.*.................... 5,800 115,275
GST Telecommunications, Inc.*... 19,700 120,663
iBasis, Inc.*................... 7,500 307,969
ICG Communications, Inc.*....... 9,800 354,025
INET Technologies, Inc.*........ 14,600 772,888
Leap Wireless International,
Inc.*......................... 10,000 986,875
MasTec, Inc.*................... 6,100 542,900
MGC Communications, Inc.*....... 12,700 908,050
Network Plus Corp.*............. 22,900 927,450
Z-Tel Technologies, Inc.*....... 5,500 231,000
------------
9,153,424
------------
TOYS/GAMES/HOBBIES -- 0.0%
WMS Industries, Inc.*........... 12,700 125,413
------------
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
TRANSPORTATION--AIR FREIGHT -- 0.3%
Expeditors International,
Inc........................... 20,800 $ 826,800
------------
TRANSPORTATION--TRUCKS -- 0.5%
American Freightways Corp.*..... 17,600 262,900
Forward Air Corp.*.............. 11,450 271,222
Swift Transportation Co.,
Inc.*......................... 15,700 321,850
USFreightways Corp.............. 18,300 685,106
------------
1,541,078
------------
TRAVEL SERVICES -- 0.0%
Hotel Reservations Network, Inc.
Cl. A*........................ 500 8,875
------------
TOTAL COMMON STOCK
(Cost: $156,014,472)......................... 276,094,954
------------
<CAPTION>
PRINCIPAL
AMOUNT
--------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 0.8%
--------------------------------------------------------------
Citibank Nassau
5.625%, 04/03/00
(Cost: $2,277,105)............ $ 2,277,105 2,277,105
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 98.6%
(COST: $158,291,577)........................ 278,372,059
OTHER ASSETS IN EXCESS OF LIABILITIES --
1.4%.......................................... 4,045,292
------------
NET ASSETS -- 100.0%.......................... $282,417,351
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
65
<PAGE>
MINI CAP GROWTH FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: THOMAS BLEAKLEY, Partner, Portfolio Manager; JOHN C. MCCRAW,
Partner, Portfolio Manager; PAUL E. CLUSKEY, Portfolio Manager.
CHIEF INVESTMENT OFFICER: CATHERINE SOMHEGYI
GOAL: The Mini Cap Growth Fund seeks to maximize long-term capital
appreciation by investing primarily in US companies with market capitalizations
corresponding to the bottom 5% of the Russell 2000 Growth Index at time of
purchase.
MARKET OVERVIEW: During the year ended March 31, 2000, mini-cap growth stocks
produced exceptional returns. Results were driven by many factors, including:
- High exposure to Internet companies
- Robust IPO issuance reflecting investor confidence and strong demand
- Increased share buybacks motivated by attractive valuations
- Significant cash flows into mutual funds
Following a third quarter 1999 sell-off triggered by interest rate worries,
mini-cap growth stocks bounced back strongly in the last six months of the
period. But gains were not broad-based, and a small number of companies
generated the majority of return.
PERFORMANCE: For the 12-month period ended March 31, 2000, the fund gained
151.8% compared to its Russell 2000 Growth Index benchmark, which was up 59.1%.
PORTFOLIO SPECIFICS: Stock selection, especially among technology and
healthcare companies contributed to outperformance during the period. Within
technology, telecommunications names like Ortel, Adaptive Broadband, Tollgrade
Communications, and Ditech Communications, were top performers.
In healthcare, Medarex was a major contributor to the fund's results. Medarex
is a biotechnology company that develops therapeutic products for cancer,
autoimmune disease and other life-threatening diseases. Digene, another top
performer, manufactures DNA and RNA testing systems for the screening,
monitoring and diagnosis of human diseases.
MARKET OUTLOOK: Looking ahead, we believe mini-cap growth stocks will continue
to perform well due to a number of positive factors, including:
- Attractive relative valuations
- Robust US economy and low inflation
- Strong revenue growth and a bright outlook for corporate earnings
Applying our bottom-up approach to stock selection, we are optimistic that we
will continue to find promising opportunities with exceptional earnings growth
in the mini-cap segment.
--------------------------------------------------------------------------------
66
<PAGE>
MINI CAP GROWTH FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN MINI CAP GROWTH FUND
INSTITUTIONAL SHARES WITH THE RUSSELL 2000 GROWTH INDEX.
<TABLE>
<S> <C> <C>
SINCE
1 YEAR ANNUALIZED TOTAL RETURNS INCEPTION
151.76% As of 3/31/00 39.60%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
MINI CAP GROWTH RUSSELL 2000
FUND INSTITUTIONAL GROWTH
SHARES INDEX
<S> <C> <C>
7/12/1995 $250,000.00 $250,000.00
7/95 261,400.00 259,625.00
8/95 266,200.00 262,828.77
9/95 275,600.00 268,240.42
10/95 270,200.00 255,045.67
11/95 278,200.00 266,344.19
12/95 287,000.00 272,246.38
1/96 284,600.00 269,992.18
2/96 301,400.00 282,303.82
3/96 317,000.00 287,884.97
4/96 365,200.00 309,985.90
5/96 408,800.00 325,888.18
6/96 371,600.00 304,705.45
7/96 319,000.00 267,500.91
8/96 340,600.00 287,304.00
9/96 359,600.00 302,100.16
10/96 349,200.00 289,079.64
11/96 361,192.85 297,116.06
12/96 369,458.13 302,909.82
1/97 384,748.90 310,240.24
2/97 358,919.90 291,501.73
3/97 329,371.51 270,930.45
4/97 319,659.80 267,787.66
5/97 374,830.57 308,036.14
6/97 408,924.86 318,478.57
7/97 444,878.84 334,784.67
8/97 477,320.07 344,828.21
9/97 522,779.12 372,345.50
10/97 488,271.57 349,967.54
11/97 483,440.44 341,624.31
12/97 480,997.70 341,815.62
1/98 473,447.41 337,269.47
2/98 510,088.51 367,046.99
3/98 556,278.50 382,444.62
4/98 565,605.32 384,789.00
5/98 533,405.57 356,834.08
6/98 542,066.19 360,580.92
7/98 498,760.72 330,380.77
8/98 371,076.17 254,128.89
9/98 402,940.81 279,895.01
10/98 416,726.22 294,505.53
11/98 459,693.80 317,359.16
12/98 521,539.20 346,080.17
1/99 536,704.36 361,653.77
2/99 472,963.31 328,562.45
3/99 479,598.07 340,259.28
4/99 516,563.13 370,304.17
5/99 495,237.13 370,896.66
6/99 544,523.89 390,442.91
7/99 539,784.78 378,378.23
8/99 560,873.82 364,226.88
9/99 582,436.78 371,256.46
10/99 634,093.09 380,760.62
11/99 751,037.74 421,007.02
12/99 963,916.92 495,230.56
1/00 1,001,951.33 490,624.92
2/00 1,347,950.96 604,793.33
3/31/2000 1,207,450.70 541,229.56
</TABLE>
The graph above shows the value of a hypothetical $250,000 investment in the
Fund's Class I shares compared with the Russell 2000 Growth Index for the
periods indicated. The Fund's Class I shares calculate their performance based
upon the historical performance of their corresponding series of
Nicholas-Applegate Mutual Funds (renamed Pilgrim Mutual Funds), adjusted to
reflect all fees and expenses applicable to the Fund's Class I shares. The
Nicholas-Applegate Institutional Funds' Class I shares were first available on
May 7, 1999. Average annual total return figures include changes in principal
value, reinvested dividends, and capital gain distributions. Absent expense
limitations, total returns would have been slightly lower. Past performance
cannot guarantee future results.
The unmanaged Russell 2000 Growth Index is a widely regarded small-cap index of
the 2,000 smallest securities in the Russell 3000 Growth Index, which comprises
the 3,000 largest U.S. securities. The unmanaged Index differs from the Fund in
composition, does not pay management fees or expenses and includes reinvested
dividends. One cannot invest directly in an index.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions. You may have a gain or loss when you sell
your shares.
--------------------------------------------------------------------------------
67
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000
------------------------------------------------------------------------
MINI CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
---------------------------------------------------------------
COMMON STOCK -- 101.1%
---------------------------------------------------------------
ADVERTISING -- 0.1%
Interep National Radio Sales, Inc.
Cl. A*........................... 15,200 $ 101,650
------------
AEROSPACE/DEFENSE -- 1.9%
Newport Corp....................... 11,100 1,498,499
OYO Geospace Corp.*................ 16,200 263,250
------------
1,761,749
------------
APPAREL -- 1.0%
Cutter & Buck, Inc.*............... 11,800 158,563
Gildan Activewear, Inc. Cl. A*..... 13,900 453,487
Steven Madden, Ltd.*............... 17,400 330,600
------------
942,650
------------
APPLICATIONS SOFTWARE -- 0.6%
Caminus Corporation*............... 1,300 26,000
Optio Software, Inc.*.............. 10,600 133,825
Prime Response, Inc.*.............. 2,600 39,650
Symix Systems, Inc.*............... 11,600 232,000
Webhire, Inc.*..................... 7,700 126,088
------------
557,563
------------
AUDIO/VIDEO PRODUCTS -- 0.5%
California Amplifier, Inc.*........ 15,800 489,800
------------
BIOTECHNOLOGY -- 7.7%
Creative Biomolecules, Inc.*....... 57,900 573,569
Digene Corp.*...................... 58,700 2,700,199
Genome Therapeutics Corp.*......... 75,000 1,767,188
Invitrogen Corp.*.................. 7,700 447,081
Lynx Therapeutics, Inc.*........... 10,200 303,450
Trimeris, Inc.*.................... 9,100 454,431
Universal Electronics, Inc......... 35,900 870,575
------------
7,116,493
------------
BROADCASTING -- 0.6%
Radio Unica Corp.*................. 5,900 69,694
Regent Communications, Inc.*....... 35,800 443,025
------------
512,719
------------
COMMUNICATIONS SOFTWARE -- 1.0%
AVT Corp.*......................... 16,400 193,725
SeaChange International, Inc.*..... 12,200 751,825
------------
945,550
------------
COMPUTER SERVICES -- 5.0%
Diversinet Corp.*.................. 16,100 287,788
Manhattan Associates, Inc.*........ 23,300 798,025
MSI Holdings, Inc.*................ 23,700 675,450
Pilot Network Services, Inc.*...... 23,900 790,194
Silicon Storage Technology, Inc.... 21,000 1,551,374
Tanning Technology Corp............ 11,800 508,138
------------
4,610,969
------------
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
COMPUTER SOFTWARE -- 4.1%
Clickaction, Inc................... 15,800 $ 784,075
Cysive, Inc.*...................... 12,800 876,800
Level 8 Systems, Inc.*............. 26,000 1,215,499
Mission Critical Software, Inc..... 5,100 311,738
Pivotal Corp....................... 10,800 346,950
Scientific Learning Corp........... 9,400 240,875
------------
3,775,937
------------
COMPUTERS -- 5.2%
Blue Wave Systems, Inc.*........... 44,900 718,400
Echelon Corp.*..................... 16,500 1,080,749
eSoft, Inc.*....................... 33,600 613,200
Immersion Corp.*................... 22,000 1,320,000
Netsolve, Inc...................... 28,200 909,450
SmartDisk Corp.*................... 4,600 121,900
------------
4,763,699
------------
DATA PROCESSING/MANAGEMENT SOFTWARE -- 0.9%
InterCept Group, Inc.*............. 20,100 517,575
Novadigm, Inc.*.................... 20,400 331,500
------------
849,075
------------
DISTRIBUTION/WHOLESALE -- 1.3%
Daisytek International Corp.*...... 2,100 33,206
Miami Computer Supply Corp.*....... 13,400 420,425
Scansource, Inc.*.................. 13,400 475,700
SCP Pool Corp.*.................... 9,700 297,063
------------
1,226,394
------------
DIVERSIFIED FINANCIAL SERVICES -- 0.1%
Lendingtree, Inc.*................. 8,600 116,100
------------
DRILLING -- 2.1%
Patterson Energy, Inc.*............ 27,500 873,125
Unit Corp.*........................ 36,700 403,700
UTI Energy Corp.*.................. 17,800 671,950
------------
1,948,775
------------
DRUGS/PHARMACEUTICALS -- 3.1%
Axys Pharmaceuticals, Inc.*........ 23,600 181,425
Biocryst Pharmaceuticals, Inc.*.... 9,000 245,813
ILEX Oncology, Inc.*............... 13,100 550,200
OraPharma, Inc.*................... 11,500 212,750
Titan Pharmaceuticals, Inc.*....... 13,700 426,413
United Therapeutics Corp.*......... 16,100 1,251,774
------------
2,868,375
------------
ELECTRONIC COMPONENTS/SEMICONDUCTORS -- 9.6%
ACT Manufacturing, Inc.*........... 19,300 1,079,594
Caliper Technologies Corp.*........ 6,100 493,338
Elantec Semiconductor, Inc.*....... 23,100 1,699,294
inSilicon Corp.*................... 22,800 360,525
Interlink Electronics, Inc.*....... 16,100 1,535,537
Mattson Technology, Inc.*.......... 22,400 954,800
Metalink, Ltd.*.................... 3,600 138,150
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
68
<PAGE>
-------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK (Continued)
---------------------------------------------------------
ELECTRONIC COMPONENTS/SEMICONDUCTORS (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
Metron Technology N.V.*............ 6,000 $ 126,000
Pericom Semiconductor Corp.*....... 17,000 606,688
PSi Technologies Holdings, Inc.*... 21,200 352,450
Sage, Inc.*........................ 6,900 151,800
Three-Five Systems, Inc.*.......... 22,499 1,349,940
------------
8,848,116
------------
ELECTRONICS -- 1.7%
Integrated Silicon Solution,
Inc.*............................ 30,400 891,100
Zoran Corp.*....................... 11,800 664,488
------------
1,555,588
------------
FOOD -- 0.4%
Hain Food Group, Inc.*............. 14,600 413,363
------------
HUMAN RESOURCES -- 1.3%
Hall, Kinion & Associates, Inc.*... 20,200 486,063
Heidrick & Struggles International,
Inc.*............................ 17,800 714,225
------------
1,200,288
------------
INSTRUMENTS -- 4.1%
Meade Instruments Corp.*........... 22,500 1,552,500
Nanometrics, Inc.*................. 23,900 1,165,125
Photon Dynamics, Inc.*............. 15,700 1,083,300
------------
3,800,925
------------
INTERNET SOFTWARE -- 10.2%
C-Bridge Internet Solutions,
Inc.*............................ 5,100 290,700
click2learn.com, Inc.*............. 35,300 503,025
Commtouch Software, Ltd.*.......... 5,000 235,313
Digital River, Inc.*............... 4,860 104,490
eGain Communications Corp.*........ 8,400 327,600
Egreetings Network, Inc.*.......... 9,600 54,600
Exactis.com, Inc.*................. 23,300 512,600
FASTNET Corp.*..................... 27,200 329,800
GRIC Communications, Inc.*......... 5,100 172,125
Hotjobs.Com, Ltd.*................. 16,500 416,625
Integrated Information Systems,
Inc.*............................ 3,100 67,570
Internet Pictures Corp.*........... 10,867 368,799
L90, Inc.*......................... 12,400 235,600
Landacorp, Inc.*................... 11,100 119,325
Liquid Audio, Inc.*................ 3,300 43,725
N2H2, Inc.*........................ 8,200 115,825
net.Genesis Corp.*................. 8,500 380,375
Netegrity, Inc.*................... 8,100 554,850
Netiq Corp.*....................... 8,400 561,225
Netopia, Inc.*..................... 15,600 1,122,224
Netzee, Inc.*...................... 23,400 348,075
Promotions.com, Inc.*.............. 10,500 89,250
SkillSoft Corp.*................... 7,000 203,438
US Interactive, Inc.*.............. 14,800 529,100
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
</TABLE>
INTERNET SOFTWARE (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
Watchguard Technologies, Inc.*..... 16,900 $ 1,521,000
XCare.net, Inc.*................... 11,200 161,000
------------
9,368,259
------------
LASER SYSTEMS -- 0.7%
II-VI, Inc.*....................... 17,900 680,200
------------
MACHINERY-DIVERSIFIED -- 2.8%
Applied Science & Technology,
Inc.*............................ 5,100 154,275
Brooks Automation, Inc.*........... 13,600 850,000
FSI International, Inc.*........... 33,600 688,800
Semitool, Inc.*.................... 46,600 847,538
------------
2,540,613
------------
MEDICAL PRODUCTS -- 3.1%
Aspect Medical Systems, Inc.*...... 8,100 290,588
Endocare, Inc.*.................... 24,400 466,650
Fusion Medical Technologies,
Inc.*............................ 17,700 345,150
InnerDyne, Inc.*................... 48,700 298,288
Polymedica Corp.*.................. 12,400 728,500
Zoll Medical Corp.*................ 14,300 732,875
------------
2,862,051
------------
MEDICAL SUPPLIES -- 1.9%
Accredo Health, Inc.*.............. 27,000 894,375
Allscripts, Inc.*.................. 14,400 865,800
------------
1,760,175
------------
MISCELLANEOUS MANUFACTURING -- 0.6%
Applied Films Corp.*............... 21,300 426,000
Simpson Manufacturing Co., Inc.*... 2,300 90,850
------------
516,850
------------
NETWORKING PRODUCTS -- 1.0%
Optibase, Ltd.*.................... 28,400 674,500
Tricord Systems, Inc.*............. 23,400 223,763
------------
898,263
------------
OIL & GAS PRODUCERS -- 1.3%
Basin Exploration, Inc.*........... 29,200 436,175
BayCorp Holdings, Ltd.*............ 18,200 395,850
Swift Energy Co.*.................. 18,200 325,325
------------
1,157,350
------------
OIL FIELD SERVICES -- 0.6%
Maverick Tube Corp.*............... 15,600 506,025
------------
OPTICAL RECOGNITION SOFTWARE -- 1.6%
Digimarc Corp.*.................... 6,400 281,600
Optimal Robotics Corp.*............ 26,300 1,236,100
------------
1,517,700
------------
OPTICAL SUPPLIES -- 0.6%
Precision Optics Corp., Inc.*...... 23,100 531,300
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
69
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000 -- CONTINUED
--------------------------------------------------------------------------------
MINI CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK (Continued)
---------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
OTHER COMMERCIAL SERVICES -- 2.3%
Corporate Executive Board Co.*..... 11,300 $ 573,475
eBenx, Inc.*....................... 17,100 504,450
Hooper Holmes, Inc................. 21,700 744,581
ReSourcePhoenix.Com, Inc.*......... 25,100 326,300
------------
2,148,806
------------
PHOTO EQUIPMENT & SUPPLIES -- 1.4%
Concord Camera Corp.*.............. 23,700 1,303,500
------------
PRINTING-COMMERCIAL -- 0.6%
Creo Products Inc.*................ 7,100 309,738
T/R Systems, Inc.*................. 12,200 271,450
------------
581,188
------------
RECREATIONAL PRODUCTS -- 0.7%
Monaco Coach Corp.*................ 25,625 486,875
Travis Boats & Motors, Inc.*....... 8,600 113,950
------------
600,825
------------
RETAIL - AUTOMOBILE -- 0.5%
Lithia Motors, Inc. Cl. A*......... 9,100 138,775
Sonic Automotive, Inc.*............ 36,000 339,750
------------
478,525
------------
RETAIL - CONSUMER ELECTRONICS -- 1.8%
Tweeter Home Entertainment Group,
Inc.*............................ 38,500 1,703,625
------------
RETAIL - DISCOUNT -- 0.4%
Factory 2-U Stores, Inc.*.......... 13,500 337,500
------------
RETAIL - INTERNET -- 0.7%
Freeshop.com, Inc.*................ 16,700 325,650
FTD.com, Inc.*..................... 13,100 39,300
iPrint.com, Inc.*.................. 12,700 244,475
------------
609,425
------------
RETAIL - JEWELRY -- 0.5%
Whitehall Jewellers, Inc.*......... 18,400 432,400
------------
RETAIL - RESTAURANTS -- 0.2%
Taco Cabana Cl. A*................. 29,500 175,156
------------
SUPERCONDUCTORS -- 0.8%
Conductus, Inc.*................... 8,000 259,500
Illinois Superconductor Corp.*..... 14,800 101,750
Superconductor Technologies,
Inc.*............................ 8,700 364,856
------------
726,106
------------
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
TELECOMMUNICATIONS -- 4.4%
Celeritek, Inc.*................... 20,900 $ 1,321,925
Eloquent, Inc.*.................... 6,000 122,250
Globecomm Systems, Inc.*........... 23,100 616,481
SpectraLink Corp................... 23,300 419,400
Telaxis Communications Corp........ 7,600 456,831
ViaSat, Inc........................ 15,800 1,137,600
------------
4,074,487
------------
TELECOMMUNICATIONS EQUIPMENT -- 9.2%
Adaptive Broadband Corp............ 11,000 588,500
AirGate PCS, Inc.*................. 10,700 1,128,850
Corsair Communications, Inc.*...... 29,200 558,450
CTC Communications Group, Inc.*.... 14,400 613,800
Davox Corp.*....................... 26,200 700,850
Interspeed, Inc.*.................. 10,100 215,888
MCK Communications, Inc.*.......... 7,400 354,275
Northeast Optic Network, Inc.*..... 14,000 1,183,874
P-Com, Inc.*....................... 34,700 641,950
Radyne ComStream, Inc.*............ 21,900 584,456
Tollgrade Communications, Inc.*.... 36,200 1,918,600
------------
8,489,493
------------
TRANSPORTATION - TRUCKS -- 0.9%
Arkansas Best Corp................. 19,900 208,950
Forward Air Corp.*................. 27,100 641,931
------------
850,881
------------
TOTAL COMMON STOCK
(Cost: $56,196,932)........................... 93,256,481
------------
<CAPTION>
PRINCIPAL
AMOUNT
---------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 0.0%
---------------------------------------------------------------
Brown Brothers Harriman & Co.
5.625%, 04/03/00
(Cost: $639)..................... $ 639 639
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 101.1%
(Cost: $56,197,571)......................... 93,257,120
LIABILITIES IN EXCESS OF OTHER ASSETS --
(1.1%)...................................... (1,036,085)
------------
NET ASSETS -- 100.0%.......................... $ 92,221,035
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
70
<PAGE>
VALUE FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: MARK STUCKELMAN, Portfolio Manager; JOHN J. KANE, Partner,
Portfolio Manager; LAWRENCE S. SPEIDELL, CFA, Partner, Director of
Global/Systematic Portfolio Management and Research; JOHN GRAVES, Investment
Analyst.
CHIEF INVESTMENT OFFICER: CATHERINE SOMHEGYI
GOAL: The Value Fund seeks long-term capital appreciation through investments
in a diversified portfolio comprised predominantly of US companies with larger
market capitalizations.
MARKET OVERVIEW: Following a brief period of outperformance relative to growth
stocks in the beginning of the fiscal year, value stocks underperformed for much
of the 12-month period ending March 31, 2000.
However, in March of 2000, value stocks staged an impressive rally due to a
number of factors, including improving earnings prospects; historically low
valuations; and industry-specific developments. For instance, bank stocks
performed well in anticipation that the Federal Reserve was close to finishing
its round of interest rate hikes (5 since June of 1999) and would raise rates
only one or two more times in the near future. And insurance companies rallied
on the potential for further consolidation in the industry following Citicorp's
decision to purchase its remaining interest in Travelers Property Casualty.
PERFORMANCE: During the 12-month period ended March 31, 2000, the fund was up
4.7% versus 6.3% for the Russell 1000 Value Index and 17.9% for the S&P 500.
PORTFOLIO SPECIFICS: During the fiscal year, we increased our exposure to the
energy sector on a stock-specific basis and reduced the fund's weightings in
utility and financial service companies.
The fund underperformed during the period as holdings like MCI WorldCom,
Textron, Hasbro, and Ford Motor negatively impacted results.
Companies that were positive contributors to the fund's performance included
Citigroup, Chase Manhattan Bank, and TRW. Banks, whose shares had traded down
significantly following the Fed's interest rate hikes during the period, rallied
in anticipation that the interest rate increases would soon be over.
MARKET OUTLOOK: We believe that a number of fundamentals support the case for
the continued improvement in performance among value stocks, namely:
- Better-than-expected earnings
- Acceleration in global economic growth which stimulates demand for
manufactured goods
- Rising productivity as many value-oriented companies use the Internet to cut
costs
We are optimistic that the combination of these factors will benefit the Value
Fund as value stocks recapture investor favor.
--------------------------------------------------------------------------------
71
<PAGE>
VALUE FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN VALUE FUND
INSTITUTIONAL SHARES WITH THE S&P 500 INDEX.
<TABLE>
<S> <C> <C>
SINCE
1 YEAR ANNUALIZED TOTAL RETURNS INCEPTION
4.68% As of 3/31/00 22.10%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
VALUE FUND INSTITUTIONAL
SHARES S&P 500 INDEX
<S> <C> <C>
4/30/96 $250,000.00 $250,000.00
5/96 256,600.00 256,450.00
6/96 263,800.00 257,424.51
7/96 257,600.00 246,046.35
8/96 264,800.00 251,235.46
9/96 278,800.00 265,375.00
10/96 288,600.00 272,694.04
11/96 311,580.76 293,306.98
12/96 310,622.05 287,496.57
1/97 327,247.49 305,459.36
2/97 331,246.01 307,854.16
3/97 316,935.51 295,204.43
4/97 333,350.49 312,828.13
5/97 358,183.42 331,873.11
6/97 369,758.09 346,741.03
7/97 412,900.04 374,331.21
8/97 403,429.86 353,361.17
9/97 428,683.68 372,714.77
10/97 412,268.70 360,266.09
11/97 425,854.22 376,942.81
12/97 436,586.20 373,414.92
1/98 434,531.14 387,655.49
2/98 469,923.85 415,613.20
3/98 500,064.74 436,896.75
4/98 502,804.82 441,291.93
5/98 500,749.76 433,706.13
6/98 511,938.43 451,323.27
7/98 501,864.37 446,516.68
8/98 424,288.37 381,959.30
9/98 448,322.65 406,427.61
10/98 479,971.75 439,502.95
11/98 502,997.40 466,141.22
12/98 524,486.61 493,000.28
1/99 530,983.34 513,617.55
2/99 512,742.51 497,654.32
3/99 522,237.74 517,565.47
4/99 563,217.16 537,595.25
5/99 554,471.55 524,902.63
6/99 570,213.64 554,034.73
7/99 558,969.29 536,748.84
8/99 538,979.33 534,065.10
9/99 516,990.37 519,426.37
10/99 553,222.18 552,295.67
11/99 531,483.09 563,507.28
12/99 571,041.13 596,697.85
1/00 535,602.40 566,743.62
2/00 492,372.17 556,015.17
3/31/00 546,661.29 610,393.45
</TABLE>
The graph above shows the value of a hypothetical $250,000 investment in the
Fund's Class I shares compared with the S&P 500 Index for the periods indicated.
The Fund's Class I shares calculate their performance based upon the historical
performance of their corresponding series of Nicholas-Applegate Mutual Funds
(renamed Pilgrim Mutual Funds), adjusted to reflect all fees and expenses
applicable to the Fund's Class I shares. The Nicholas-Applegate Institutional
Funds' Class I shares were first available on May 7, 1999. Average annual total
return figures include changes in principal value, reinvested dividends, and
capital gain distributions. Absent expense limitations, total returns would have
been slightly lower. Past performance cannot guarantee future results.
The unmanaged S&P 500 Index contains 500 industrial, transportation, utility and
financial companies. The Index is considered to be generally representative of
the U.S. stock market. The unmanaged Index differs from the Fund in composition,
does not pay management fees or expenses and includes reinvested dividends. One
cannot invest directly in an index.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions. You may have a gain or loss when you sell
your shares.
--------------------------------------------------------------------------------
72
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000
------------------------------------------------------------------------
VALUE FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
---------------------------------------------------------------
COMMON STOCK -- 100.4%
---------------------------------------------------------------
AEROSPACE/DEFENSE -- 3.8%
Boeing Co........................... 18,000 $ 682,875
United Technologies Corp............ 7,600 480,225
-----------
1,163,100
-----------
AIRLINES -- 2.1%
Delta Air Lines, Inc................ 11,900 633,675
-----------
AUTO MANUFACTURER -- 5.0%
Ford Motor Co....................... 18,700 859,031
General Motors Corp................. 8,200 679,063
-----------
1,538,094
-----------
AUTOMOTIVE & TRANSPORT EQUIPMENT -- 1.5%
TRW, Inc............................ 7,800 456,300
-----------
CHEMICALS -- 4.8%
Dow Chemical Corp................... 7,300 832,200
PPG Industries, Inc................. 12,500 653,906
-----------
1,486,106
-----------
COMPUTER SERVICES -- 1.9%
Electronic Data Systems Corp........ 9,300 596,944
-----------
COMPUTERS -- 3.4%
International Business Machines
Corp.............................. 3,700 436,600
Pitney Bowes, Inc................... 13,800 616,688
-----------
1,053,288
-----------
DIVERSIFIED FINANCIAL SERVICES -- 11.8%
Ambac Financial Group, Inc.......... 9,100 458,413
Citigroup, Inc...................... 25,500 1,512,468
J.P. Morgan & Co., Inc.............. 6,600 869,550
Lehman Brothers Holdings, Inc....... 8,300 805,100
-----------
3,645,531
-----------
DIVERSIFIED MANUFACTURING -- 3.6%
Dover Corp.......................... 13,500 646,313
Textron, Inc........................ 7,600 462,650
-----------
1,108,963
-----------
ELECTRIC -- 5.6%
Allegheny Energy, Inc............... 13,200 363,825
Energy East Corp.................... 15,800 313,038
PECO Energy Co...................... 10,500 387,187
Texas Utilities Co.................. 6,600 195,938
Unicom Corp......................... 12,500 456,250
-----------
1,716,238
-----------
FOOD -- 2.1%
General Mills, Inc.................. 18,100 654,994
-----------
HEALTH PRODUCTS & SERVICES -- 2.0%
Baxter International, Inc........... 9,900 620,606
-----------
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
INSTRUMENTS-CONTROLS -- 1.5%
Johnson Controls, Inc............... 8,500 $ 459,531
-----------
INSURANCE -- 4.5%
American International Group,
Inc............................... 3,875 424,313
CIGNA Corp.......................... 8,400 636,300
Lincoln National Corp............... 10,200 341,700
-----------
1,402,313
-----------
MEDIA -- 2.3%
Walt Disney Co...................... 17,500 724,063
-----------
METALS -- 1.6%
Reynolds Metals Co.................. 7,300 488,188
-----------
MONEY CENTER BANKS -- 2.7%
Chase Manhattan Corp................ 9,600 837,000
-----------
OIL & GAS PRODUCERS -- 12.1%
Conoco, Inc......................... 23,000 589,375
Exxon Mobil Corp.................... 17,605 1,369,889
Kerr-McGee Corp..................... 10,000 577,500
Phillips Petroleum Co............... 12,500 578,125
USX-Marathon Group.................. 23,400 609,863
-----------
3,724,752
-----------
OIL & GAS SERVICES -- 2.2%
ENSCO International, Inc............ 9,400 339,575
Noble Drilling Corp.*............... 8,100 335,644
-----------
675,219
-----------
REGIONAL/COMMERCIAL BANKS -- 3.9%
FleetBoston Financial Corp.......... 21,600 788,400
M & T Bank Corp..................... 900 401,850
-----------
1,190,250
-----------
RETAIL -- DEPARTMENT STORES -- 2.1%
Federated Department Stores,
Inc.*............................. 15,900 663,825
-----------
RETAIL -- DISCOUNT STORES -- 1.2%
TJX Cos., Inc....................... 17,400 386,063
-----------
RETAIL -- DURABLES -- 2.0%
Whirlpool Corp...................... 10,500 615,563
-----------
TELECOMMUNICATIONS -- 11.4%
Alltel Corp......................... 9,100 573,868
AT&T Corp........................... 11,600 652,499
BellSouth Corp...................... 8,900 418,299
GTE Corp............................ 10,100 717,100
MCI WorldCom, Inc.*................. 17,500 792,968
SBC Communications, Inc............. 9,000 378,000
-----------
3,532,734
-----------
TELECOMMUNICATIONS EQUIPMENT -- 2.0%
Motorola, Inc....................... 4,400 626,449
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
73
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000 -- CONTINUED
--------------------------------------------------------------------------------
VALUE FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK (Continued)
---------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
TRANSPORTATION-TRAINS -- 3.3%
Kansas City Southern Industries,
Inc............................... 5,300 $ 455,469
Union Pacific Corp.................. 14,300 559,487
-----------
1,014,956
-----------
TOTAL COMMON STOCK
(Cost: $31,087,393)............................ 31,014,745
-----------
<CAPTION>
PRINCIPAL
AMOUNT
---------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 3.2%
---------------------------------------------------------------
Morgan Guaranty London
5.625%, 04/03/00
(Cost: $970,531)................ $970,531 970,531
-----------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 103.6%
(COST: $32,057,924).......................... 31,985,276
LIABILITIES IN EXCESS OF OTHER ASSETS --
(3.6%)......................................... (1,099,962)
-----------
NET ASSETS -- 100.0%........................... $30,885,314
-----------
-----------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
74
<PAGE>
CONVERTIBLE FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: DOUGLAS FORSYTH, CFA, Partner, Portfolio Manager; WILLIAM
STICKNEY, Portfolio Manager; MICHAEL P. CARROLL, Portfolio Manager; MICHAEL E.
YEE, Portfolio Manager.
CHIEF INVESTMENT OFFICER: CATHERINE SOMHEGYI
GOAL: The Convertible Fund seeks to maximize total return consisting of
capital appreciation and current income by investing primarily in convertible
and equity securities of US companies with market capitalizations generally
above $500 million.
MARKET OVERVIEW: Convertible bonds delivered outstanding results during the
year ended March 31, 2000.
Following positive returns in the second quarter of 1999, returns in the third
quarter were essentially flat due to fears of rising inflation. However, during
the last six months of the fiscal year, convertible bonds posted gains. For the
entire 12-month period, convertible bonds dramatically outperformed bonds and
beat many of the major US equity indices including the S&P 500 (+17.9%), the
Russell 1000 (+21.2%) and the Russell 2000 (+37.3%).
Technology was by far the biggest factor driving these strong returns. Gains
in technology were broad-based, and all of the sector's major industries --
software, telecommunications, and semiconductors -- produced exceptional
results.
Mirroring the equity market, growth outperformed value. However, in contrast
to stocks, convertible returns were strongest in large-cap issues.
PERFORMANCE: The fund posted a gain of 59.2% for the 12-month period ended
March 31, 2000 versus 45.8% for the First Boston Convertible Index.
PORTFOLIO SPECIFICS: The fund's weighting in technology was just slightly
higher than its benchmark during the 12-month period. However, skillful issue
selection within the technology sector was the primary reason for the fund's
strong relative performance this period.
Some of the fund's top-performing holdings included semiconductor names like
STMicroelectronics, Atmel and Credence Systems and software companies including
BEA Systems, Exodus Communications and Veritas Software. Telecommunications
issues like Qualcomm, Crown Castle and Winstar Communications also performed
well.
MARKET OUTLOOK: We believe there is potential for convertibles to benefit from
increased recognition among investors seeking equity market participation with
significant downside protection. Other positives for the convertible market
include strong corporate profits, the ongoing health of the US economy, and a
global economic recovery.
--------------------------------------------------------------------------------
75
<PAGE>
CONVERTIBLE FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN CONVERTIBLE FUND
INSTITUTIONAL SHARES WITH THE CS FIRST BOSTON CONVERTIBLE INDEX.
<TABLE>
<S> <C> <C>
ANNUALIZED TOTAL RETURNS
As of 3/31/00
1 YEAR 5 YEARS 10 YEARS
59.19% 29.52% 20.68%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CONVERTIBLE FUND FIRST BOSTON
INSTITUTIONAL SHARES CONVERTIBLE INDEX
<S> <C> <C>
12/86 250,000.00 250,000.00
01/87 274,316.67 267,975.00
02/87 285,197.89 279,069.17
03/87 282,650.13 281,943.58
04/87 278,259.63 281,999.97
05/87 280,365.13 282,845.97
06/87 283,327.65 288,757.45
07/87 299,354.55 300,538.75
08/87 305,960.31 306,549.53
09/87 298,974.21 302,043.25
10/87 232,382.69 245,228.91
11/87 235,465.64 237,357.06
12/87 242,192.10 249,438.54
01/88 244,945.02 256,372.93
02/88 252,824.09 268,166.09
03/88 256,810.28 267,254.32
04/88 265,199.41 272,786.49
05/88 265,482.29 270,085.90
06/88 277,738.73 280,484.21
07/88 274,840.99 277,567.17
08/88 271,423.80 272,654.23
09/88 277,006.08 277,534.74
10/88 280,154.71 281,059.43
11/88 285,972.59 276,478.16
12/88 290,338.44 282,892.46
01/89 309,258.83 295,594.33
02/89 315,650.18 295,535.21
03/89 324,951.34 299,377.17
04/89 335,403.94 309,436.24
05/89 344,549.29 315,717.80
06/89 343,056.24 313,413.06
07/89 356,389.69 322,408.01
08/89 362,935.38 329,500.99
09/89 363,685.45 326,634.33
10/89 358,218.05 316,312.68
11/89 366,086.90 321,468.58
12/89 372,774.09 321,822.20
01/90 365,268.90 309,013.67
02/90 378,296.83 313,092.65
03/90 390,389.72 317,882.97
4/90 378,508.86 310,794.18
5/90 413,735.41 325,867.70
6/90 412,935.53 325,476.66
7/90 407,388.42 322,579.92
8/90 386,679.51 303,999.31
9/90 365,476.59 290,714.54
10/90 351,247.36 279,841.82
11/90 368,587.28 293,526.08
12/90 379,632.61 299,660.78
1/91 399,057.14 313,115.55
2/91 421,630.48 331,808.55
3/91 436,752.96 339,937.85
4/91 438,878.49 343,371.23
5/91 463,133.84 353,535.02
6/91 444,500.42 343,671.39
7/91 466,710.62 356,730.90
8/91 486,250.24 370,036.96
9/91 492,798.41 369,370.90
10/91 497,020.05 374,689.84
11/91 492,331.50 365,659.81
12/91 525,252.06 386,904.65
1/92 535,844.65 398,086.19
2/92 541,828.24 408,237.39
3/92 528,860.49 405,298.08
4/92 515,885.78 410,202.19
5/92 525,154.53 417,339.71
6/92 509,644.96 415,378.21
7/92 514,418.64 425,721.13
8/92 515,636.09 423,039.08
9/92 529,747.33 431,499.87
10/92 542,443.61 432,535.47
11/92 563,580.83 445,035.74
12/92 576,918.91 454,915.53
1/93 590,399.58 469,108.90
2/93 569,125.52 470,703.87
3/93 600,579.19 488,214.05
4/93 607,790.25 488,067.59
5/93 632,101.86 496,608.77
6/93 652,313.87 501,326.55
7/93 658,540.06 506,490.22
8/93 696,855.12 520,368.05
9/93 709,451.20 526,248.21
10/93 727,803.24 538,667.67
11/93 711,382.99 530,533.78
12/93 733,163.96 539,287.59
1/94 758,079.88 554,765.15
2/94 749,597.86 545,944.38
3/94 716,093.91 523,669.85
4/94 710,211.14 514,139.06
5/94 703,258.77 515,270.16
6/94 683,417.78 509,447.61
7/94 692,602.05 523,814.03
8/94 706,108.34 534,133.17
9/94 697,896.52 524,679.01
10/94 696,803.49 529,191.25
11/94 676,036.02 509,981.61
12/94 677,511.21 513,857.47
1/95 672,826.60 513,189.46
2/95 681,610.24 529,970.75
3/95 701,636.93 543,961.98
4/95 709,919.33 556,309.92
5/95 723,526.11 572,721.06
6/95 751,212.97 593,568.11
7/95 786,500.84 614,639.77
8/95 799,060.93 621,093.49
9/95 817,602.01 630,347.78
10/95 804,307.67 610,996.11
11/95 821,227.74 632,258.77
12/95 828,291.41 635,736.19
1/96 851,451.87 649,785.96
2/96 875,221.82 667,265.21
3/96 888,874.31 672,870.23
4/96 912,864.69 688,548.11
5/96 941,161.03 703,902.73
6/96 920,307.86 687,220.24
7/96 870,662.12 660,418.65
8/96 924,031.29 684,986.22
9/96 967,781.59 702,864.36
10/96 969,032.77 707,222.12
11/96 994,433.60 729,287.45
12/96 1,002,375.72 723,744.87
1/97 1,040,721.64 746,759.96
2/97 1,026,594.19 742,876.80
3/97 1,016,637.71 727,499.25
4/97 1,028,182.69 734,847.00
5/97 1,081,153.80 768,870.41
6/97 1,124,209.80 791,244.54
7/97 1,193,276.21 834,604.74
8/97 1,178,232.04 835,188.97
9/97 1,235,810.18 870,433.94
10/97 1,211,066.49 846,584.05
11/97 1,214,519.82 841,504.55
12/97 1,235,942.36 846,216.97
1/98 1,223,825.28 845,963.11
2/98 1,281,559.61 883,777.66
3/98 1,339,721.60 915,682.03
4/98 1,355,533.77 923,831.60
5/98 1,324,628.17 897,225.25
6/98 1,376,377.08 901,890.82
7/98 1,386,306.10 881,327.71
8/98 1,185,964.39 773,188.80
9/98 1,252,764.46 785,869.10
10/98 1,280,030.51 814,081.80
11/98 1,361,091.74 852,913.50
12/98 1,502,171.25 901,614.86
1/99 1,591,232.79 930,917.34
2/99 1,512,561.76 898,614.51
3/99 1,606,750.81 936,715.77
4/99 1,657,498.16 974,652.75
5/99 1,630,631.92 965,685.95
6/99 1,708,640.29 990,000.00
7/99 1,657,770.09 994,010.56
8/99 1,670,487.64 996,992.59
9/99 1,677,943.42 999,584.77
10/99 1,784,885.96 1,034,170.41
11/99 1,946,805.99 1,113,594.69
12/99 2,275,956.27 1,282,861.09
1/00 2,288,827.61 1,263,489.89
2/00 2,673,453.62 1,396,156.32
3/31/2000 2,557,757.52 1,366,138.96
</TABLE>
The graph above shows the value of a hypothetical $250,000 investment in the
Fund's Class I shares compared with the CS First Boston Convertible Index for
the periods indicated. The Fund's Class I shares calculate their performance
based upon the historical performance of their corresponding series of
Nicholas-Applegate Mutual Funds (renamed Pilgrim Mutual Funds), adjusted to
reflect all fees and expenses applicable to the Fund's Class I shares. [The
Fund's performance includes historical performance of comparable managed
institutional separate accounts managed by the Investment Adviser prior to the
Nicholas-Applegate Mutual Fund's inception.] The Nicholas-Applegate
Institutional Funds' Class I shares were first available on May 7, 1999. Average
annual total return figures include changes in principal value, reinvested
dividends, and capital gain distributions. Absent expense limitations, total
returns would have been slightly lower. Past performance cannot guarantee future
results.
The unmanaged CS First Boston Index is a market weighted index representing the
universe of convertible securities including convertible preferred stocks or
convertible bonds. The unmanaged Index differs from the Fund in composition,
does not pay management fees or expenses and includes reinvested dividends. One
cannot invest directly in an index.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions. You may have a gain or loss when you sell
your shares.
--------------------------------------------------------------------------------
76
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000
------------------------------------------------------------------------
CONVERTIBLE FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
--------------------------------------------------------------
CONVERTIBLE PREFERRED STOCK -- 23.7%
--------------------------------------------------------------
BROADCASTING -- 3.2%
Cox Communications, Inc.
0.250%......................... 22,407 $ 1,254,792
Emmis Communications Corp. A
6.250%......................... 12,766 823,407
Unitedglobalcom, Inc. C 144A
7.000%......................... 3,519 336,065
Unitedglobalcom, Inc. D 7.000%... 19,321 1,313,827
------------
3,728,091
------------
DIVERSIFIED FINANCIAL SERVICES -- 0.8%
Morgan Stanley Dean Witter 6.000%
(PERQS)........................ 6,384 963,186
------------
DRUGS/PHARMACEUTICALS -- 1.2%
Cephalon, Inc. 7.250%............ 12,871 1,388,459
------------
ELECTRIC -- 1.4%
Calpine Capital Trust 5.750%..... 18,603 1,625,437
------------
INTERNET SERVICES -- 1.6%
PSInet, Inc. 144A 7.000%......... 21,901 966,381
PSInet, Inc. C 6.750%............ 12,964 829,696
------------
1,796,077
------------
MISCELLANEOUS MANUFACTURING -- 0.8%
Sealed Air Corp. A............... 16,656 865,071
------------
OIL & GAS PRODUCERS -- 1.6%
Apache Corp. 6.500%.............. 9,996 449,820
Coastal Corp. 5.580%............. 13,519 329,526
Coastal Corp. 6.625%............. 38,878 1,100,733
------------
1,880,079
------------
OIL & GAS SERVICES -- 2.0%
EVI, Inc. 5.000%................. 46,346 2,241,988
------------
RENTAL AUTO/EQUIPMENT -- 0.1%
United Rentals Trust I
6.500% (QUIPS)................. 1,485 49,191
United Rentals Trust I 144A
6.500% (QUIPS)................. 2,301 76,221
------------
125,412
------------
TELECOMMUNICATIONS -- 5.2%
Global Crossing, Ltd. 144A
6.375%......................... 9,563 1,032,804
McLeodUSA, Inc. A................ 2,769 2,048,714
Omnipoint Corp. 7.000%........... 5,595 1,040,670
Winstar Communications, Inc. A
6.000%......................... 1,780 162,203
Winstar Communications, Inc. D
7.000%......................... 17,755 1,664,531
------------
5,948,922
------------
TELECOMMUNICATIONS SERVICES -- 4.6%
Crown Castle Decs Trust VI
International Corp. 6.250%..... 24,915 2,099,088
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
TELECOMMUNICATIONS SERVICES (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
Crown Castle Decs Trust V
7.250%......................... 49,366 $ 1,635,249
Qwest Trends Trust 144A 5.750%... 19,092 1,498,722
------------
5,233,059
------------
TELEVISION -- 1.2%
Pegasus Communications Corp. 144A
6.500%......................... 11,026 1,349,307
------------
TOTAL CONVERTIBLE PREFERRED STOCK
(Cost: $22,075,537).......................... 27,145,088
------------
<CAPTION>
PRINCIPAL
AMOUNT
--------------------------------------------------------------
<S> <C> <C>
CONVERTIBLE CORPORATE BONDS -- 72.5%
--------------------------------------------------------------
ADVERTISING -- 3.7%
Doubleclick, Inc. 144A
4.750%, 03/15/06............... $ 437,000 1,000,730
Interpublic Group Co., Inc. 144A
1.870%, 06/01/06............... 565,000 572,769
Interpublic Group Co., Inc.
1.870%, 06/01/06............... 234,000 237,218
Lamar Advertising Co.
5.250%, 09/15/06............... 739,000 831,375
Omnicom Group, Inc.
2.250%, 01/06/13............... 853,000 1,659,084
------------
4,301,176
------------
APPLICATIONS SOFTWARE -- 3.3%
Citrix Systems, Inc. 144A
0.000%, 03/22/19............... 1,086,000 1,053,420
Citrix Systems, Inc.
0.000%, 03/22/19............... 351,000 340,470
HNC Software, Inc.
4.750%, 03/01/03............... 588,000 974,610
Rational Software Corp. 144A
5.000%, 02/01/07............... 1,092,000 1,365,000
------------
3,733,500
------------
BIOTECHNOLOGY -- 3.0%
Affymetrix, Inc. 144A
4.750%, 02/15/07............... 1,917,000 1,341,900
Human Genome Sciences, Inc.
3.750%, 03/15/07............... 1,631,000 994,910
Millennium Pharmaceuticals, Inc.
144A
5.250%, 01/15/07............... 1,185,000 1,054,649
------------
3,391,459
------------
BROADCASTING -- 2.5%
AT&T Corp.--Liberty Media Corp
4.000%, 11/15/29............... 210,000 328,388
AT&T Corp.-Liberty Media Corp
144A
4.000%, 11/15/29............... 675,000 1,055,530
Clear Channel Communications
1.500%, 12/01/02............... 877,000 813,418
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
77
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000 -- CONTINUED
--------------------------------------------------------------------------------
CONVERTIBLE FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
CONVERTIBLE CORPORATE BONDS (Continued)
---------------------------------------------------------
BROADCASTING (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------
<S> <C> <C>
Clear Channel Communications
2.625%, 04/01/03............... $ 513,000 $ 632,273
------------
2,829,609
------------
COMPUTER SOFTWARE -- 1.7%
Siebel Systems, Inc. 144A
5.500%, 09/15/06............... 633,000 1,651,339
Siebel Systems, Inc.
5.500%, 09/15/06............... 100,000 260,875
------------
1,912,214
------------
COMPUTERS -- 8.5%
ASM Lithography Holding N.V.
4.250%, 11/30/04............... 1,230,000 1,439,100
Comverse Technology, Inc. 144A
4.500%, 07/01/05............... 335,000 1,493,263
Comverse Technology, Inc.
4.500%, 07/01/05............... 151,000 673,083
Hewlett Packard Co.
0.000%, 10/14/17............... 2,447,000 1,890,307
Redback Networks 144A
5.000%, 04/01/07............... 1,165,000 1,118,400
Veritas Software Corp.
6.500%, 08/13/06............... 226,000 867,275
Veritas Software Corp. 144A
5.250%, 11/01/04............... 155,000 2,216,500
------------
9,697,928
------------
DATA PROCESSING/MANAGEMENT SOFTWARE -- 1.9%
Affiliated Computer Services,
Inc.
4.000%, 03/15/05............... 497,000 507,561
Affiliated Computer Services,
Inc. 144A
4.000%, 03/15/05............... 330,000 337,013
Automatic Data Processing
0.000%, 02/20/12............... 1,095,000 1,390,649
------------
2,235,223
------------
DIVERSIFIED FINANCIAL SERVICES -- 1.3%
Morgan Stanley Dean Witter & Co.
0.000%, 07/29/05............... 373,000 1,448,173
------------
DRILLING -- 1.4%
Diamond Offshore Drilling
3.750%, 02/15/07............... 1,431,000 1,643,861
------------
DRUGS/PHARMACEUTICALS -- 4.1%
Alkermes, Inc. 144A
3.750%, 02/15/07............... 1,598,000 1,322,345
Alkermes, Inc.
3.750%, 02/15/07............... 281,000 232,528
Alpharma, Inc.
5.750%, 04/01/05............... 578,000 802,698
Alpharma, Inc. 144A
5.750%, 04/01/05............... 320,000 444,400
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
DRUGS/PHARMACEUTICALS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------
<S> <C> <C>
Alpharma, Inc. Cl.A
3.000%, 06/01/06............... $ 154,000 $ 190,190
Roche Holdings AG 144A
0.000%, 01/19/15............... 2,086,000 1,765,277
------------
4,757,438
------------
ELECTRIC -- 2.8%
AES Corp.
4.500%, 08/15/05............... 1,382,000 2,147,283
Calpine Capital Trust 144A
5.500%, 02/01/30............... 18,223 1,020,488
------------
3,167,771
------------
ELECTRONIC COMPONENTS/SEMICONDUCTORS -- 13.1%
Amkor Tech, Inc.
5.000%, 03/15/07............... 991,000 1,080,190
Atmel Corp.
0.000%, 04/21/18............... 206,000 301,275
Atmel Corp. 144A
0.000%, 04/21/18............... 1,113,000 1,627,763
Conexant Systems, Inc. 144A
4.000%, 02/01/07............... 1,493,000 1,366,095
Cymer, Inc.
3.500% (until 08/06/00,
thereafter
7.250% to maturity),
08/06/04....................... 1,296,000 1,516,320
Cypress Semiconductor
4.000%, 02/01/05............... 1,491,000 1,893,569
LAM Research Corp.
5.000%, 09/01/02............... 1,009,000 1,701,426
LSI Logic Corp.
4.250%, 03/15/04............... 357,000 1,659,158
LSI Logic Corp. 144A
4.250%, 03/15/04............... 95,000 441,513
Oak Industries, Inc.
4.875%, 03/01/08............... 357,000 1,610,548
STMicroelectronics N.V.
0.000%, 06/10/08............... 251,000 817,005
Simicroelectronics N.V.
0.000%, 09/22/09............... 606,000 984,750
------------
14,999,612
------------
ELECTRONICS -- 2.6%
Credence Systems Corp.
5.250%, 09/15/02............... 1,076,000 2,149,310
Solectron Corp.
0.000%, 01/27/19............... 1,260,000 845,775
------------
2,995,085
------------
INTERNET SOFTWARE -- 4.3%
America Online, Inc.
0.000%, 12/06/19............... 3,421,000 1,881,550
BEA Systems, Inc.
4.000%, 12/15/06............... 1,036,000 1,267,805
Exodus Communications, Inc.
4.750%, 07/15/08............... 158,000 325,678
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
78
<PAGE>
-------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
CONVERTIBLE CORPORATE BONDS (Continued)
---------------------------------------------------------
INTERNET SOFTWARE (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------
<S> <C> <C>
Exodus Communications, Inc. 144A
4.750%, 07/15/08............... $ 722,000 $ 1,488,222
------------
4,963,255
------------
MISCELLANEOUS MANUFACTURING -- 1.3%
Sanmina Corp.
4.250%, 05/01/04............... 940,000 1,541,600
------------
NETWORKING PRODUCTS -- 1.6%
Juniper Networks, Inc.
4.750%, 03/15/07............... 1,876,000 1,871,310
------------
OIL & GAS PRODUCERS -- 0.9%
Devon Energy Corp.
4.900%, 08/15/08............... 1,032,000 1,038,450
------------
PRINTING-COMMERCIAL -- 2.3%
Mail-Well, Inc.
5.000%, 11/01/02............... 337,000 272,549
News America Holdings
0.000%, 03/11/13............... 1,487,000 1,710,050
World Color Press, Inc.
6.000%, 10/01/07............... 674,000 615,868
------------
2,598,467
------------
RETAIL-DISCOUNT STORES -- 1.6%
Costco Cos., Inc.
0.000%, 08/19/17............... 1,582,000 1,890,490
------------
TELECOMMUNICATIONS -- 6.6%
Aether Systems, Inc.
6.000%, 03/22/05............... 1,373,000 1,318,080
American Tower Corp. 144A
5.000%, 02/15/10............... 998,000 1,138,968
Echostar Communications Corp.
144A
4.875%, 01/01/07............... 1,341,000 2,264,614
Global Telesystems Group, Inc.
5.750%, 07/01/10............... 930,000 871,875
Nextel Communications, Inc. 144A
5.250%, 01/15/10............... 1,629,000 1,948,691
------------
7,542,228
------------
TELECOMMUNICATIONS EQUIPMENT -- 2.6%
CommScope, Inc. 144A
4.000%, 12/15/06............... 803,000 959,585
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
TELECOMMUNICATIONS EQUIPMENT (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------
<S> <C> <C>
CommScope, Inc.
4.000%, 12/15/06............... $ 260,000 $ 310,700
Efficient Networks 144A
5.000%, 03/15/05............... 1,679,000 1,695,789
------------
2,966,074
------------
TELECOMMUNICATIONS SERVICES -- 1.4%
NTL, Inc.
7.000%, 12/15/08............... 635,000 1,560,100
------------
TOTAL CONVERTIBLE CORPORATE BONDS
(Cost: $71,683,648).......................... 83,085,023
------------
<CAPTION>
NUMBER
OF SHARES
--------------------------------------------------------------
<S> <C> <C>
COMMON STOCK -- 1.5%
--------------------------------------------------------------
COMPUTERS -- 1.5%
EMC Corp......................... 13,899 1,737,375
------------
TELECOMMUNICATIONS -- 0.0%
McLeodUSA, Inc................... 151 12,807
Winstar Communications, Inc.*.... 158 9,480
------------
22,287
------------
TOTAL COMMON STOCK
(Cost: $467,818)............................. 1,759,662
------------
<CAPTION>
PRINCIPAL
AMOUNT
--------------------------------------------------------------
<S> <C> <C>
TIME DEPOSITS -- 2.4%
--------------------------------------------------------------
Citibank Nassau
5.625%, 04/03/00
(Cost: $2,802,278)............. $2,802,278 2,802,278
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 100.1%
(Cost: $97,029,281)......................... 114,792,051
LIABILITIES IN EXCESS OF OTHER ASSETS --
(0.1%)........................................ (136,964)
------------
NET ASSETS -- 100.0%.......................... $114,655,087
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
79
<PAGE>
SHORT INTERMEDIATE FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
SUB-ADVISORY MANAGEMENT TEAM: FRED S. ROBERTSON, III, Chief Investment
Officer, Fixed Income; JAMES E. KELLERMAN, Portfolio Manager; SUSAN MALONE,
Portfolio Manager.
GOAL: The Short Intermediate Fund seeks to preserve principal and provide
liquidity while seeking a relatively high level of current income. The fund
invests primarily in a portfolio of short-to-intermediate-term investment-grade,
fixed-income securities. The duration of the fund will generally be between one
and four years.
MARKET OVERVIEW: Robust GDP growth and worldwide economic recoveries failed to
trigger higher inflation in the United States. However, the threat of inflation
from surging economies and tight US labor markets prompted the Federal Reserve
to raise interest rates by 25 basis points on five separate occasions during the
year ended March 31, 2000. In this environment, the bond market languished,
generating low single-digit returns.
Rising interest rates took the greatest toll in the Treasury sector. As a
result, throughout most of 1999, mortgages, asset-backed securities and
corporate bonds were among the best-performing sectors of the domestic fixed
income market. In contrast, Treasury securities outperformed in early 2000 when
prospects for further Fed rate increases and a shortage in supply of
longer-maturity Treasuries caused an inversion in the yield curve and a widening
of non-Treasury yield spreads.
PERFORMANCE: For the 12-month period ended March 31, 2000, the fund gained
3.8% versus 3.7% for the Merrill Lynch 1-3 Year Government Index.
PORTFOLIO SPECIFICS: Two factors helped fund performance this period. First,
in 1999, the fund benefited from being overweighted in corporate bonds,
mortgages and asset-backed securities, sectors that outperformed Treasuries.
Second, in the beginning of 2000, we increased the fund's exposure to Treasury
securities and extended the fund's duration. Because the inverted yield curve
negatively impacted the performance of shorter-maturity, non-Treasury
securities, this move had a positive impact on the fund's results.
MARKET OUTLOOK: Improving global economic growth, coupled with a robust US
economy, increase the risk of a cyclical rise in inflation. However, inflation
should rise only slightly as high productivity growth and strong global
competition act as restraining influences. In the near term, prospects are high
for further rate increases by the Federal Reserve, creating an unfavorable
environment for bonds. However, the long-term outlook for the Short Intermediate
Fund remains positive given our expectation that US economic growth will slow in
the second half of 2000 to a more sustainable 3% rate. We believe the seeds of
economic growth moderation have been sown by the Fed's tighter monetary policy
that started in 1999.
--------------------------------------------------------------------------------
80
<PAGE>
SHORT INTERMEDIATE FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN SHORT INTERMEDIATE
FUND INSTITUTIONAL SHARES WITH THE MERRILL LYNCH 1-3 YEAR TREASURY INDEX.
<TABLE>
<S> <C> <C>
SINCE
1 YEAR ANNUALIZED TOTAL RETURNS INCEPTION
3.80% As of 3/31/00 6.11%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SHORT INTERMEDIATE
FUND MERRILL LYNCH 1-3 YEAR
INSTITUTIONAL SHARES TREASURY INDEX
<S> <C> <C>
8/31/95 $250,000.00 $250,000.00
9/95 255,700.00 251,200.00
10/95 258,313.29 253,310.08
11/95 260,323.51 255,539.21
12/95 262,368.17 257,506.86
1/96 264,601.96 259,695.67
2/96 263,383.53 258,604.95
3/96 263,322.61 258,372.20
4/96 263,322.61 258,578.90
5/96 263,734.37 259,121.92
6/96 265,628.48 260,987.59
7/96 266,673.44 262,005.45
8/96 267,718.40 262,896.26
9/96 270,100.91 265,288.62
10/96 273,073.72 268,286.38
11/96 274,984.81 270,352.19
12/96 275,090.98 270,352.19
1/97 276,598.92 271,622.84
2/97 277,460.60 272,247.57
3/97 277,288.26 272,138.68
4/97 279,478.53 274,370.21
5/97 281,449.77 276,235.93
6/97 283,596.24 278,141.96
7/97 286,271.67 281,201.52
8/97 286,494.63 281,454.60
9/97 288,701.86 283,593.66
10/97 290,285.65 285,692.25
11/97 291,190.67 286,377.91
12/97 293,441.74 288,325.28
1/98 296,592.33 291,122.04
2/98 296,985.32 291,384.05
3/98 298,077.52 292,578.72
4/98 299,666.02 293,953.84
5/98 301,474.35 295,511.79
6/98 303,315.78 297,048.46
7/98 304,805.84 298,444.58
8/98 307,737.12 302,204.99
9/98 311,275.02 306,194.09
10/98 311,489.77 307,694.44
11/98 311,654.87 307,417.52
12/98 313,549.43 308,493.48
1/99 315,144.12 309,727.45
2/99 314,156.69 308,209.79
3/99 316,010.88 310,367.26
4/99 317,795.12 311,360.43
5/99 317,296.22 311,173.62
6/99 317,468.35 312,138.25
7/99 317,972.67 313,137.10
8/99 318,476.99 314,045.19
9/99 321,016.30 316,086.49
10/99 322,042.73 316,939.92
11/99 322,812.56 317,542.11
12/99 323,578.88 317,986.67
1/00 324,099.10 317,859.47
2/00 326,179.99 319,989.13
3/31/00 328,033.03 321,973.06
</TABLE>
The graph above shows the value of a hypothetical $250,000 investment in the
Fund's Class I shares compared with the Merrill Lynch 1-3 year Treasury Index
for the periods indicated. The Fund's Class I shares calculate their performance
based upon the historical performance of their corresponding series of Nicholas-
Applegate Mutual Funds (renamed Pilgrim Mutual Funds), adjusted to reflect all
fees and expenses applicable to the Fund's Class I shares. The
Nicholas-Applegate Institutional Funds' Class I shares were first available on
May 7, 1999. Average annual total return figures include changes in principal
value, reinvested dividends, and capital gain distributions. Absent expense
limitations, total returns would have been slightly lower. Past performance
cannot guarantee future results.
The unmanaged Merrill Lynch 1-3 Year Treasury Index consists of all public US
Treasury Index obligations having maturities from one to 2.99 years. The
unmanaged Index differs from the Fund in composition, does not pay management
fees or expenses and includes reinvested income and dividends. One cannot invest
directly in an index.
Bond prices, and thus the Fund's share price, generally move in the opposite
direction from interest rates. Since markets can go down as well as up,
investment return and principal value will fluctuate with market conditions. You
may have a gain or loss when you sell your shares.
--------------------------------------------------------------------------------
81
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000
------------------------------------------------------------------------
SHORT INTERMEDIATE FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
--------------------------------------------------------------
CORPORATE BONDS -- 6.1%
--------------------------------------------------------------
FINANCIAL SERVICES -- 0.9%
Union Acceptance Corp. 1997 D A5
6.410%, 05/10/05............... $ 180,000 $ 176,808
------------
MONEY CENTER BANKS -- 1.1%
J.P. Morgan & Co., Inc.
5.750%, 02/25/04............... 250,000 235,800
------------
OIL & GAS PRODUCERS -- 3.0%
Kerr-McGee Corp. 144A
6.415%, 08/01/01............... 500,000 500,000
KN Energy, Inc.
6.300%, 03/01/01............... 135,000 133,492
------------
633,492
------------
TELEPHONE -- 1.1%
Sprint Capital
5.875%, 05/01/04............... 250,000 236,025
------------
TOTAL CORPORATE BONDS
(Cost: $1,287,136)........................... 1,282,125
------------
--------------------------------------------------------------
AGENCY OBLIGATIONS -- 9.5%
--------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORP. -- 5.7%
Pool # 380032
10.000%, 10/01/03.............. 31,702 32,187
Pool # 380062
9.500%, 11/01/04............... 81,503 83,468
Pool # 380078
9.000%, 04/01/05............... 174,773 177,370
Pool # 504019
9.000%, 03/01/06............... 69,949 70,570
Pool # 504132
9.000%, 07/01/06............... 111,842 112,835
Pool # 555287
9.750%, 05/01/11............... 142,789 148,973
Pool # B00455
9.000%, 12/01/03............... 152,215 153,539
Pool # B00511
9.500%, 05/01/06............... 106,023 108,676
Pool # B00623
9.000%, 06/01/06............... 164,878 167,105
Pool # G10453
9.000%, 06/01/07............... 152,388 155,131
------------
1,209,854
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 1.7%
Pool # 200112
9.500%, 11/01/05............... 39,111 39,731
Pool # 2454
14.750%, 10/01/12.............. 3,017 3,482
Pool # 303758
9.500%, 07/01/06............... 96,952 99,244
Pool # 303920
9.500%, 10/01/03............... 87,957 89,482
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
FEDERAL NATIONAL MORTGAGE ASSOCIATION (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------
<S> <C> <C>
Pool # 50155
10.000%, 12/01/03.............. $ 2,610 $ 2,686
Pool # 70722
9.000%, 01/01/06............... 117,528 120,097
------------
354,722
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 2.1%
Pool # 200947
9.500%, 12/15/17............... 4,090 4,332
Pool # 59779
11.500%, 03/15/13.............. 1,373 1,524
Pool # 64054
11.500%, 02/15/13.............. 823 858
Pool # 780179
12.000%, 10/15/15.............. 24,663 27,685
Pool # 780182
9.000%, 01/15/08............... 155,872 158,343
Pool # 780306
9.000%, 11/15/06............... 105,123 106,790
Pool # 780328
10.000%, 10/15/06.............. 138,235 142,674
------------
442,206
------------
TOTAL AGENCY OBLIGATIONS
(Cost: $2,023,699)........................... 2,006,782
------------
--------------------------------------------------------------
FOREIGN CORPORATE BOND -- 0.3%
--------------------------------------------------------------
CAYMAN ISLANDS -- 0.3%
Pemex Finance, Ltd. 144A
6.125%, 11/15/03
(Cost: $69,993)................ 70,000 66,570
------------
--------------------------------------------------------------
CMO'S AND ASSET-BACKED SECURITIES -- 52.0%
--------------------------------------------------------------
AUTOMOBILES -- 2.1%
Ford Credit Auto Owner Trust 1999
A B
5.790%, 06/16/03............... 230,000 220,189
Hyundai Auto Receivables Trust
1998 A A2
6.050%, 07/15/04............... 235,000 232,448
------------
452,637
------------
BOATS -- 2.1%
BankBoston Marine Asset Backed
Trust 1997 2 A6
6.640%, 08/15/10............... 290,000 285,786
Distribution Financial Services
Trust 1999 2 A4
6.480%, 10/15/13............... 170,000 163,280
------------
449,066
------------
MORTGAGE-COMMERCIAL -- 20.9%
Allied Capital Commercial
Mortgage 1998 1 A
6.310%, 09/25/03............... 65,478 64,026
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
82
<PAGE>
-------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
CMO'S AND ASSET-BACKED SECURITIES (Continued)
---------------------------------------------------------
MORTGAGE-COMMERCIAL (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------
<S> <C> <C>
CRIIMI MAE Commercial Mortgage
Trust
1998-1 A1 144A
5.697%, 10/20/01............... $ 529,902 $ 502,413
DLJ Commercial Mortgage Corp.
1998 CF1 CP
0.906%, 04/15/05............... 3,000,000 108,399
DLJ Mortgage Acceptance Corp.
144A 1996 CF1 S
0.710%, 03/12/06............... 4,168,591 72,788
Enterprise Mortgage Acceptance
Co. 1998 1 A1
6.110%, 07/15/03............... 202,093 196,283
Federal Home Loan Mortgage Corp.
5.500%, 05/15/02............... 2,500,000 2,429,687
Federal National Mortgage
Association Aces 1996 M5 Cl. XS
0.534%, 01/25/13............... 5,155,394 124,857
Federal National Mortgage
Association Aces 1997 M4 Cl. V
7.623%, 12/17/04............... 346,434 348,288
Federal National Mortgage
Association Aces 1997 M8 Cl. X1
0.653%, 10/25/02............... 16,870,000 247,778
Federal National Mortgage
Association Aces 1998 M7 Cl. A
6.167%, 05/25/14............... 171,829 165,351
Morgan Stanley Capital I 1997 C1
A1A
6.850%, 02/15/20............... 149,440 148,389
------------
4,408,259
------------
MORTGAGE-RESIDENTIAL -- 23.3%
Aames Mortgage Trust 1998-B A3F
6.335%, 08/15/24............... 225,000 219,437
Advanta Mortgage Loan Trust 1997
4 A4
6.660%, 03/25/22............... 210,000 207,900
Amortizing Residential Collateral
Trust 2000 BC1 Cl. A1
6.445%, 04/25/29............... 253,150 253,071
BancOne Home Equity Trust 1999 2
A5
7.310%, 06/25/29............... 160,000 155,400
BankBoston Home Equity Loan Trust
1998 2 A4
6.110%, 09/25/13............... 365,000 350,400
Centex Home Equity Trust 1999 2
A8
6.040%, 06/25/30............... 410,000 402,313
Contimortgage Home Equity Loan
Trust
1997-3 A7
7.280%, 05/15/24............... 500,000 497,187
Federal Home Administration
Mortgage Series
5.150%, 01/01/07............... 111,723 104,601
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
MORTGAGE-RESIDENTIAL (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------
<S> <C> <C>
GE Capital Mortgage Services 1999
HE 1 A5
6.285%, 08/25/26............... $ 420,000 $ 397,819
Residential Asset Securities
Corp. 1999 KS1 AI3
6.110%, 05/25/25............... 190,000 182,229
Residential Asset Securities
Corp. 2000 KS1 AI1
7.615%, 12/25/14............... 490,225 490,378
Residential Funding Mortgage
Security I 1993 S47 A8
5.650%, 12/25/23............... 61,059 60,333
Saxon Asset Securities Trust 1999
1 AF3
6.170%, 08/25/21............... 420,000 405,759
Saxon Asset Securities Trust 1999
2 AF4
6.445%, 08/25/26............... 310,000 290,092
Sunlife Commercial Mortgage Trust
1997 C1. A
6.875%, 07/25/04............... 168,027 164,955
The Money Store Home Equity Trust
1996 C A14
7.785%, 12/15/22............... 340,000 340,797
UCFC Home Equity Loan Services
1997 D A3
6.510%, 01/15/16............... 400,000 397,500
------------
4,920,171
------------
RECEIVABLES -- 3.6%
Fingerhut Master Trust 1998 2 A
6.230%, 02/15/07............... 205,000 199,683
Green Tree Recreational,
Equipment & Consumer Trust 1999
A A6
6.840%, 03/15/10............... 380,000 373,750
Heller Equipment Asset
Receivables Trust 1999 1 A3
5.500%, 07/13/03............... 190,000 186,794
------------
760,227
------------
TOTAL CMO'S AND ASSET-BACKED SECURITIES
(Cost: $11,227,495).......................... 10,990,360
------------
--------------------------------------------------------------
COMMERCIAL PAPER -- 20.0%
--------------------------------------------------------------
Du Pont
0.000%, 04/25/00............... 975,000 970,917
National Rural Utility
0.000%, 04/10/00............... 263,000 262,554
Smithkline Beech
0.000%, 04/04/00............... 1,000,000 999,365
USAA Capital Corp.
0.000%, 04/19/00............... 500,000 498,409
USAA Capital Corp.
0.000%, 04/03/00............... 500,000 499,823
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
83
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000 -- CONTINUED
--------------------------------------------------------------------------------
SHORT INTERMEDIATE FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMERCIAL PAPER (Continued)
---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------
<S> <C> <C>
Washington Gas
0.000%, 04/03/00............... $1,000,000 $ 999,467
------------
TOTAL COMMERCIAL PAPER
(Cost: $4,230,536)........................... 4,230,535
------------
--------------------------------------------------------------
US TREASURY OBLIGATIONS -- 18.8%
--------------------------------------------------------------
US TREASURY NOTE
6.125%, 12/31/01
(Cost: $3,972,334)............. 4,000,000 3,973,760
------------
--------------------------------------------------------------
TIME DEPOSIT -- 3.1%
--------------------------------------------------------------
Wachovia Bank N.A.
5.625%, 04/03/00
(Cost: $663,009)............... 663,009 663,009
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 109.8%
(Cost: $23,474,202)......................... 23,213,141
LIABILITIES IN EXCESS OF OTHER ASSETS --
(9.8%)........................................ (2,076,832)
------------
NET ASSETS -- 100.0%.......................... $ 21,136,309
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
84
<PAGE>
HIGH QUALITY BOND FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
SUB-ADVISORY MANAGEMENT TEAM: FRED S. ROBERTSON, III, Chief Investment
Officer, Fixed Income; JAMES E. KELLERMAN, Portfolio Manager; MALCOM S. DAY,
Portfolio Manager; SUSAN MALONE, Portfolio Manager.
GOAL: The High Quality Bond Fund seeks to maximize long-term total return from
a portfolio utilizing multiple sectors of the bond market including a broad
range of investment-grade issues, as well as, on an opportunistic basis,
developed country international bonds and below-investment grade corporate
issues. The dollar-weighted average portfolio duration of the fund will
generally range from two to eight years.
MARKET OVERVIEW: The enduring US economic expansion and global economic
strength did not serve as catalysts to higher US inflation. However, the
potential for price increases from robust economies and tight US labor markets
caused the Federal Reserve to raise interest rates by a total of 1.25% during
the 12-month period ended March 31, 2000. Given these conditions, the bond
market produced only slightly positive returns.
Rising rates had the biggest negative impact on Treasury securities. As a
result, during the majority of the period, mortgages, asset-backed securities
and corporate bonds were some of the best-performing sectors within the US fixed
income market. However, in the first quarter of 2000, expectations for further
rate increases and a reduced supply of longer-maturity Treasuries created a
strongly inverted yield curve and caused a widening of non-Treasury yield
spreads. In this environment, Treasuries outperformed other fixed income
sectors.
PERFORMANCE: During the fiscal year ended March 31, 2000, the fund was up 1.6%
compared to its Lehman Aggregate Bond Index benchmark, which posted a 1.9% gain.
PORTFOLIO SPECIFICS: In the second quarter of 1999, the fund's duration was
longer than that of its benchmark. Since longer-duration securities
underperformed early in the period, this negatively impacted the fund's results
and was the primary reason the fund modestly trailed its benchmark for the
entire 12-month period.
However, there were two factors that helped fund performance during the fiscal
year. First, in 1999, the fund benefited from being overweighted in corporate
bonds, mortgages and asset-backed securities, sectors that outperformed
Treasuries. Second, in the beginning of 2000, we increased the fund's exposure
to Treasury securities and extended the fund's duration. Because the inverted
yield curve negatively impacted the performance of shorter-maturity and
non-Treasury securities, this move had a positive impact on the fund's results.
MARKET OUTLOOK: Improving global economic growth increases the risk of a
cyclical rise in inflation. However, inflation should rise only slightly as high
productivity gains and strong global competition act as restraining influences.
In the near term, we expect the Fed will continue to push rates higher until
broader signs of moderation in economic growth emerge. However, we are
optimistic about the prospects for the bond market over the longer term.
--------------------------------------------------------------------------------
85
<PAGE>
HIGH QUALITY BOND FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN HIGH QUALITY BOND FUND
INSTITUTIONAL SHARES WITH THE LEHMAN AGGREGATE BOND INDEX.
<TABLE>
<S> <C> <C>
SINCE
1 YEAR ANNUALIZED TOTAL RETURNS INCEPTION
1.62% As of 3/31/00 6.68%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
HIGH QUALITY BOND FUND INSTITUTIONAL SHARES LEHMAN AGGREGATE BOND INDEX
<S> <C> <C>
8/31/95 $250,000.00 $250,000.00
9/95 257,840.00 252,425.00
10/95 262,060.30 255,706.53
11/95 267,084.46 259,542.12
12/95 272,016.18 263,175.71
1/96 271,811.19 264,912.67
2/96 265,456.63 260,303.19
3/96 263,734.75 258,481.07
4/96 262,283.38 257,033.58
5/96 261,661.36 256,519.51
6/96 264,958.05 259,956.87
7/96 265,800.52 260,658.75
8/96 264,747.43 260,215.63
9/96 269,991.83 264,743.39
10/96 275,786.57 270,620.69
11/96 280,722.82 275,248.30
12/96 278,233.23 272,688.49
1/97 278,233.23 273,533.83
2/97 280,200.32 274,217.66
3/97 276,856.27 271,173.85
4/97 280,609.51 275,241.45
5/97 283,479.63 277,856.25
6/97 287,277.02 281,162.74
7/97 294,700.78 288,754.13
8/97 291,551.31 286,299.72
9/97 296,747.94 290,536.96
10/97 300,397.41 294,749.74
11/97 302,031.29 296,105.59
12/97 304,716.75 299,096.26
1/98 309,330.83 302,924.69
2/98 310,084.72 302,682.35
3/98 311,741.66 303,711.47
4/98 312,907.72 305,290.77
5/98 315,754.51 308,191.03
6/98 317,198.51 310,810.66
7/98 318,039.46 311,463.36
8/98 319,869.55 316,540.21
9/98 326,463.44 323,947.25
10/98 322,323.23 322,230.33
11/98 328,623.41 324,067.04
12/98 330,743.30 325,039.25
1/99 334,219.82 327,347.02
2/99 328,273.47 321,618.45
3/99 330,864.70 323,387.35
4/99 333,284.98 324,422.19
5/99 329,616.75 321,567.28
6/99 327,584.62 320,538.26
7/99 325,469.46 319,192.00
8/99 323,883.09 319,032.40
9/99 328,069.25 322,733.18
10/99 329,144.88 323,927.29
11/99 330,489.43 323,894.90
12/99 329,768.34 322,340.21
1/00 328,674.58 321,276.48
2/00 332,229.29 325,163.93
3/31/00 336,230.66 329,456.09
</TABLE>
The graph above shows the value of a hypothetical $250,000 investment in the
Fund's Class I shares compared with the Lehman Aggregate Bond Index for the
periods indicated. The Fund's Class I shares calculate their performance based
upon the historical performance of their corresponding series of
Nicholas-Applegate Mutual Funds (renamed Pilgrim Mutual Funds), adjusted to
reflect all fees and expenses applicable to the Fund's Class I shares. The
Nicholas-Applegate Institutional Funds' Class I shares were first available on
May 7, 1999. Average annual total return figures include changes in principal
value, reinvested dividends, and capital gain distributions. Absent expense
limitations, total returns would have been slightly lower. Past performance
cannot guarantee future results.
The unmanaged Lehman Aggregate Bond Index consists of securities from the Lehman
Brothers Government/ Corporate Bond Index, Mortgage-Backed Securities Index, and
Asset-Backed Securities Index. The unmanaged Index differs from the Fund in
composition, does not pay management fees or expenses and includes reinvested
income and dividends. One cannot invest directly in an index.
Bond prices, and thus the Fund's share price, generally move in the opposite
direction from interest rates. Since markets can go down as well as up,
investment return and principal value will fluctuate with market conditions. You
may have a gain or loss when you sell your shares.
--------------------------------------------------------------------------------
86
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000
------------------------------------------------------------------------
HIGH QUALITY BOND FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
----------------------------------------------------------------
CORPORATE BONDS -- 28.4%
----------------------------------------------------------------
AEROSPACE/DEFENSE -- 0.6%
Rockwell International Corp.
5.200%, 01/15/98............. $ 210,000 $ 138,608
----------------
AIRLINES -- 3.6%
Atlas Air, Inc. 1991 A A1
7.200%, 01/02/19............. 247,246 227,970
Continental Airlines, Inc. 1991
A
6.545%, 02/02/19............. 262,950 247,123
Continental Airlines, Inc.
8.048%, 11/01/20............. 90,000 93,591
Northwest Airlines Corp. 1992 A
7.575%, 03/01/19............. 248,710 247,803
----------------
816,487
----------------
AUTO MANUFACTURERS -- 0.5%
Daimler Chrysler NA Holding
7.200%, 09/01/09............. 75,000 73,110
Ford Motor Co. 6.625%,
10/01/28..................... 50,000 43,367
----------------
116,477
----------------
AUTO PARTS & EQUIPMENT -- 0.4%
Collins & Aikan Products
11.500%, 04/15/06............ 100,000 97,875
----------------
BEVERAGES-ALCOHOLIC -- 0.4%
J Seagram & Sons
6.800%, 12/15/08............. 90,000 83,163
----------------
BROADCASTING -- 1.3%
CD Radio, Inc. 0.000% (until
12/01/02, thereafter 15.000%
to maturity), 12/01/07....... 50,000 27,438
Echostar DBS Corp.
9.375%, 02/01/09............. 100,000 96,500
Liberty Media Group 144A
8.250%, 02/01/30............. 75,000 72,649
News America Holdings
8.875%, 04/26/23............. 100,000 105,525
----------------
302,112
----------------
CHEMICALS -- 0.3%
Dow Chemical Corp.
7.375%, 11/01/29............. 75,000 72,675
----------------
COMPUTER SERVICES -- 0.7%
Computer Sciences Corp.
6.250%, 03/15/09............. 170,000 156,033
----------------
COMPUTER SOFTWARE -- 0.5%
Computer Associates
International
6.375%, 04/15/05............. 110,000 102,988
----------------
COMPUTERS -- 1.2%
Apple Computer, Inc.
6.500%, 02/15/04............. 50,000 46,562
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMPUTERS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
Sun Microsystems, Inc.
7.650%, 08/15/09............. $ 150,000 $ 149,091
Unisys Corp.
12.000%, 04/15/03............ 70,000 74,200
----------------
269,853
----------------
DISTRIBUTION/WHOLESALE -- 0.2%
United Stationer Supply
12.750%, 05/01/05............ 50,000 53,125
----------------
DIVERSIFIED FINANCIAL SERVICES -- 3.7%
Abbey National PLC
7.950%, 10/26/29............. 125,000 123,406
ACME Intermediate Holdings Cl.
B
0.000% (until 09/30/02,
thereafter 12.000% to
maturity), 09/30/05.......... 100,000 67,350
Countrywide Capital III
8.050%, 06/15/27............. 50,000 48,440
Discover Card
6.850%, 07/17/07............. 350,000 342,125
Ford Motor Credit Co.
7.375%, 10/28/09............. 150,000 146,931
GS Escrow Corp.
6.750%, 08/01/01............. 120,000 116,550
----------------
844,802
----------------
DRUGS/PHARMACEUTICALS -- 0.4%
Warner Chilcott, Inc. 144A
12.625%, 02/15/08............ 100,000 99,000
----------------
E-COMMERCE -- 0.3%
Amazon.com, Inc.
0.000% (until 05/01/03,
thereafter 10.000% to
maturity), 05/01/08.......... 125,000 73,750
----------------
ELECTRIC -- 0.5%
Calpine Corp.
10.500%, 05/15/06............ 100,000 104,875
----------------
ENTERTAINMENT -- 0.3%
Ascent Entertainment Group
0.000% (until 12/01/02,
thereafter 11.875% to
maturity), 12/15/04.......... 100,000 79,000
----------------
HEALTHCARE -- 0.5%
Abbey Health Care Group
9.500%, 11/01/02............. 120,000 116,100
----------------
INSURANCE -- 0.7%
Florida Windstorm Under
7.125%, 02/25/19............. 100,000 98,815
Lumermens Mutual Casualty
8.300%, 12/01/37............. 60,000 49,947
----------------
148,762
----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
87
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000 -- CONTINUED
--------------------------------------------------------------------------------
HIGH QUALITY BOND FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
</TABLE>
CORPORATE BONDS (Continued)
---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
INVESTMENT COMPANIES -- 2.3%
Barclays Bank PLC
7.400%, 12/15/09............. $ 75,000 $ 73,830
Dryden Investor Trust
7.157%, 07/23/08............. 177,256 161,764
Fidelity Investments
7.570%, 06/15/29............. 200,000 192,700
Merrill Lynch & Co.
6.000%, 02/17/09............. 100,000 89,492
----------------
517,786
----------------
MEDICAL SUPPLIES/EQUIPMENT -- 0.7%
Guidant Corp.
6.150%, 02/15/06............. 180,000 164,394
----------------
METALS-DIVERSIFIED -- 0.7%
Scotia Pacific Co. LLC
6.550%, 01/20/07............. 165,012 153,048
----------------
OIL & GAS PRODUCERS -- 0.5%
Deeptech International, Inc.
12.000%, 12/15/00............ 100,000 105,250
----------------
OIL FIELD MACHINERY & EQUIPMENT -- 1.7%
Halliburton Company
8.750%, 02/15/21............. 350,000 392,875
----------------
PACKAGING & CONTAINERS -- 0.7%
Stone Container Corp.
9.875%, 02/01/00............. 150,000 149,625
----------------
PUBLISHING -- 0.1%
American Lawyer Media
9.750%, 12/15/07............. 20,000 18,775
----------------
RECREATIONAL CENTERS -- 0.2%
Bally Total Fitness Holdings
9.875%, 10/15/07............. 40,000 36,400
----------------
RENTAL AUTO/EQUIPMENT -- 0.1%
United Rentals, Inc.
9.500%, 06/01/08............. 20,000 18,350
----------------
RETAIL-DISCOUNT -- 0.8%
Tuesday Morning Corp.
11.000%, 12/15/07............ 100,000 98,000
Wal-Mart Stores, Inc.
6.875%, 08/10/09............. 95,000 92,411
----------------
190,411
----------------
RETAIL-MUSIC STORE -- 0.2%
Musicland Stores Corp.
9.875%, 03/15/08............. 50,000 43,438
----------------
RETAIL-RESTAURANTS -- 0.3%
Jack In The Box, Inc.
8.375%, 04/15/08............. 75,000 67,500
----------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
RETAIL-VIDEO RENTAL -- 0.4%
Hollywood Entertainment Corp.
10.625%, 08/15/04............ $ 100,000 $ 88,750
----------------
TELECOMMUNICATIONS -- 3.1%
Crown Castle International
Corp.
10.625%, 11/15/07............ 100,000 69,375
Global Telesystems Group, Inc.
9.875%, 02/15/05............. 50,000 41,625
Microcell Telecommunications,
Inc.
0.000% (until 12/01/01,
thereafter
14.000% to maturity),
06/01/06..................... 150,000 133,500
Northeast Optic Network, Inc.
12.750%, 08/15/08............ 50,000 51,000
Pacific West
Telecommunications, Inc.
13.500%, 02/01/09............ 100,000 102,500
Spectrasite Holdings, Inc. 144A
0.000% (until 3/15/05,
thereafter 12.875% to
maturity), 03/15/10.......... 100,000 49,000
Sprint Capital Corp.
6.875%, 11/15/28............. 120,000 108,000
Winstar Communications, Inc.
144A
12.750%, 04/15/10............ 150,000 149,249
----------------
704,249
----------------
TELECOMMUNICATIONS EQUIPMENT -- 0.1%
Covad Communications Group,
Inc.
0.000% (until 03/15/03,
thereafter 13.500% to
maturity),
03/15/08..................... 60,000 33,825
----------------
TELEVISION -- 0.4%
Frontiervision LP
11.000%, 10/15/06............ 100,000 102,000
----------------
TOTAL CORPORATE BONDS
(Cost: $6,680,195)......................... 6,462,361
----------------
----------------------------------------------------------------
FOREIGN CORPORATE BONDS -- 4.8%
----------------------------------------------------------------
BERMUDA -- 0.5%
Sea Containers
12.500%, 12/01/04............ 110,000 102,025
----------------
CANADA -- 0.6%
Teleglobe Inc.
7.200%, 07/20/09............. 130,000 124,937
----------------
CHILE -- 0.9%
Chilgener S.A.
6.500%, 01/15/06............. 70,000 63,021
Empresa Nacional de
Electricidad
8.125%, 02/01/49............. 120,000 99,060
Enersis S.A.
6.600%, 12/01/26............. 35,000 33,068
----------------
195,149
----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
88
<PAGE>
-------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
</TABLE>
FOREIGN CORPORATE BONDS (Continued)
---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
JAPAN -- 0.4%
Bank Of Tokyo-Mitsubishi, Ltd.
8.400%, 04/15/10............. $ 90,000 $ 91,230
----------------
MEXICO -- 1.0%
Pemex Finance, Ltd.
6.300%, 05/15/10............. 170,000 157,515
Pemex Finance, Ltd.
9.690%, 08/15/09............. 75,000 80,336
----------------
237,851
----------------
UNITED KINGDOM -- 0.3%
United Utilities PLC
6.875%, 08/15/28............. 90,000 73,269
----------------
VENEZUELA -- 1.1%
Cerro Negro Finance, Ltd.
7.330%, 12/01/09............. 70,000 59,185
PDVSA Finance Ltd. 144A
8.750%, 02/15/04............. 110,000 108,689
PDVSA Finance Ltd. 1998 1
7.500%, 11/15/28............. 120,000 88,842
----------------
256,716
----------------
TOTAL FOREIGN CORPORATE BONDS
(Cost: $1,114,110)......................... 1,081,177
----------------
----------------------------------------------------------------
US TREASURY OBLIGATIONS -- 20.6%
----------------------------------------------------------------
US TREASURY BONDS -- 20.3%
8.875%, 08/15/17............... 1,873,000 2,396,260
12.000%, 08/15/13.............. 350,000 473,284
8.000%, 11/15/21............... 1,305,000 1,588,837
6.375%, 05/15/00............... 150,000 150,047
----------------
4,608,428
----------------
US TREASURY NOTES -- 0.1%
4.750%, 11/15/08............... 20,000 18,056
----------------
US TREASURY STRIPS -- 0.2%
6.875%, 08/15/25............... 200,000 46,224
----------------
TOTAL US TREASURY OBLIGATIONS
(Cost: $4,500,181)......................... 4,672,708
----------------
----------------------------------------------------------------
AGENCY OBLIGATIONS -- 19.8%
----------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORP. -- 0.2%
Gold Pool # B00632
9.000%, 06/01/06............. 14,548 14,745
Pool # 380032
10.000%, 10/01/03............ 17,399 17,665
----------------
32,410
----------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 9.7%
Pool # 200112
9.500%, 11/01/05............. $ 41,665 $ 42,325
Pool # 303262
9.500%, 05/01/07............. 22,727 23,121
Pool # 303481
10.000%, 10/01/05............ 18,396 18,932
Pool # 303758
9.500%, 07/01/06............. 17,455 17,867
Pool # 323425
6.000%, 12/01/28............. 162,600 148,627
Pool # 323551
6.000%, 02/01/29............. 1,003,569 917,325
Pool # 363503
9.500%, 06/01/05............. 20,757 21,247
Pool # 481427
6.000%, 01/01/29............. 169,677 155,095
To Be Announced
6.000%, 10/01/12............. 920,000 866,094
----------------
2,210,633
----------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 9.9%
30YR To Be Announced
6.500%, 03/15/29............. 550,000 518,719
Pool # 064054
11.500%, 02/15/13............ 422 441
Pool # 299705
8.500%, 02/15/21............. 4,173 4,289
Pool # 467362
6.500%, 12/15/28............. 369,963 346,378
Pool # 481520
6.000%, 09/15/28............. 820,153 750,694
Pool # 492388
6.000%, 11/15/28............. 49,446 45,258
Pool # 497386
6.500%, 12/15/28............. 538,533 492,925
Pool # 503872
6.500%, 03/15/29............. 99,510 93,850
Pool# 68958
11.500%, 07/15/13............ 1,082 1,197
----------------
2,253,751
----------------
TOTAL AGENCY OBLIGATIONS
(Cost: $4,542,219)......................... 4,496,794
----------------
----------------------------------------------------------------
FOREIGN GOVERNMENT BONDS -- 4.5%
----------------------------------------------------------------
ARGENTINA -- 0.5%
Federal Republic of Argentina
0.000%, 10/15/04............. 175,000 109,375
----------------
GERMANY -- 3.6%
Federal Republic of Germany
Unity Bond
8.000%, 02/21/02............. 190,000 192,410
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
89
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000 -- CONTINUED
--------------------------------------------------------------------------------
HIGH QUALITY BOND FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
</TABLE>
FOREIGN GOVERNMENT BONDS (Continued)
---------------------------------------------------------
GERMANY (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
Federal Republic of Germany
7.375%, 01/03/05............. $ 600,000 $ 631,382
----------------
823,792
----------------
ISRAEL -- 0.4%
State Of Israel
7.750%, 03/15/10............. 100,000 99,175
----------------
TOTAL FOREIGN GOVERNMENT BONDS
(Cost: $1,149,171)......................... 1,032,342
----------------
----------------------------------------------------------------
CMO'S AND ASSET-BACKED SECURITIES -- 18.5%
----------------------------------------------------------------
FINANCIAL SERVICES -- 1.4%
MBNA Master Credit Card
Trust 2000 A
7.350%, 04/15/00............. 310,000 313,609
----------------
MORTGAGE-COMMERCIAL -- 15.0%
Allied Capital Commercial
Mortgage 1998 1 144A
6.710%, 12/25/04............. 190,000 181,450
ARG Funding Corp. 1999 1A A3
6.020%, 05/20/05............. 370,000 351,963
Asset Securitization Corp. 1996
D2 A1
6.920%, 02/14/29............. 183,541 177,690
Capco America Securitization
1998 D7
5.860%, 04/15/00............. 206,155 193,539
Comed Transitional Funding
Trust 1998 1 A6
5.630%, 06/25/09............. 150,000 137,068
Comed Transitional Funding
Trust 1998 1 A7
5.740%, 12/25/10............. 250,000 224,414
Commercial Mortgage Asset Trust
6.250%, 04/17/00............. 179,877 171,051
CRIIMI MAE Commercial Mortgage
Trust 1998 C1 A2 144A
7.000%, 03/02/11............. 180,000 156,263
DLJ Commercial Mortgage Corp.
1998 CF1 CP
.9064%, 04/15/05............. 3,360,000 121,406
DLJ Mortgage Acceptance Corp.
144A 1996 CF1 S
.6097%, 03/12/06............. 3,911,380 68,296
DLJ Mortgage Acceptance Corp.
1998 A A2
6.418%, 05/28/28............. 3,516 3,233
Federal National Mortgage
Association
Aces 1996 M5 Class XS
.5382%, 01/25/13............. 5,910,064 143,134
Federal National Mortgage
Association
Aces 1997 M8 Cl X1
.6535%, 10/25/02............. 8,630,000 126,753
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
</TABLE>
MORTGAGE-COMMERCIAL (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
Global Franchise Trust 1998 A1
6.349%, 04/10/04............. $ 299,395 $ 290,975
GS Mortgage Securities Corp.
1998 C1 A1
6.060%, 10/18/30............. 160,736 152,097
Host Marriott Pool Trust 1999 A
6.980%, 04/03/00............. 115,182 113,652
JP Morgan Commercial Mortgage
Finance Corp. 1998 C6 A2
6.533%, 01/15/30............. 330,000 317,921
Mortgage Capital Funding, Inc.
1998 MC3
6.001%, 11/18/31............. 494,640 469,136
----------------
3,400,041
----------------
MORTGAGE-RESIDENTIAL -- 2.1%
BankBoston Home Equity
Loan Trust 1998 A4
6.110%, 09/25/13............. 400,000 384,000
Saxon Asset Securities Trust
1999 1 AF3
6.170%, 08/25/21............. 100,000 96,609
----------------
480,609
----------------
TOTAL CMO'S AND ASSET-BACKED SECURITIES
(Cost: $4,290,052)......................... 4,194,259
----------------
<CAPTION>
NUMBER
OF
SHARES
----------------------------------------------------------------
<S> <C> <C>
MUTUAL FUNDS -- 5.3%
----------------------------------------------------------------
INVESTMENT COMPANIES -- 5.3%
Blackrock 2001 Term Trust...... 68,200 605,275
Blackrock Strategic Term
Trust........................ 69,000 599,438
----------------
TOTAL MUTUAL FUNDS
(Cost: $1,256,263)......................... 1,204,713
----------------
<CAPTION>
PRINCIPAL
AMOUNT
----------------------------------------------------------------
<S> <C> <C>
COMMERCIAL PAPER-- 4.1%
----------------------------------------------------------------
Peoples Gas
0.000%, 04/03/00............. $ 569,000 568,704
Procter and Gamble
0.000%, 04/05/00............. 366,000 365,691
----------------
TOTAL COMMERCIAL PAPER
(Cost: $934,395)........................... 934,395
----------------
----------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
90
<PAGE>
-------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 1.8%
----------------------------------------------------------------
Citibank Nassau
5.625%, 04/03/00
(Cost: $419,021)............. $ 419,021 $ 419,021
----------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 107.8%
(Cost: $24,885,607)...................... 24,497,770
LIABILITIES IN EXCESS OF OTHER ASSETS --
(7.8%)..................................... (1,778,545)
----------------
NET ASSETS -- 100.0%....................... $ 22,719,225
----------------
----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
91
<PAGE>
HIGH YIELD BOND FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: DOUGLAS FORSYTH, CFA, Partner, Portfolio Manager; WILLIAM
STICKNEY, Portfolio Manager; MICHAEL P. CARROLL, Portfolio Manager; MICHAEL E.
YEE, Portfolio Manager.
CHIEF INVESTMENT OFFICER: CATHERINE SOMHEGYI
GOAL: The High Yield Bond Fund seeks to deliver total return via high current
income and long-term capital appreciation from a diversified portfolio
consisting primarily of lower-rated US corporate fixed income securities.
MARKET OVERVIEW: A robust US economy and tight labor market led the Federal
Reserve to raise interest rates a total of 1.25% on five separate occasions
during the fiscal year ended March 31, 2000. Other unfavorable factors impacting
the high yield bond market were investor concerns about rising inflation and,
late in the period, a pick-up in stock market volatility. In this environment,
the high yield bond market posted flat returns for the fiscal year.
PERFORMANCE: For the fiscal year ended March 31, 2000, the fund gained 6.0%
while its benchmark, the CS First Boston High Yield Index, was up 0.3%.
PORTFOLIO SPECIFICS: The fund's outperformance during the period was
attributable to issue selection. The fund also benefited from numerous credit
upgrades. In the month of March 2000 alone, seven of the fund's holdings were
upgraded including Musicland, a retailer of home audio and video products;
United Rentals, the largest equipment rental company in North America; and
Tuesday Morning, a closeout retailer of upscale home furnishings and gifts. By
contrast, the universe of high yield bonds was dominated by credit downgrades
this period.
MARKET OUTLOOK: Given expectations for a continued robust US economy and
strong corporate profits, the outlook for high yield bonds remains promising.
Another positive factor is that, on a historical basis, yields look attractive
relative to Treasury securities. We are confident that through the application
of our disciplined investment philosophy and process, we will continue to
uncover high yield bonds of growing, credit-worthy companies.
--------------------------------------------------------------------------------
92
<PAGE>
HIGH YIELD BOND FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN HIGH YIELD BOND FUND
INSTITUTIONAL SHARES WITH THE CS FIRST BOSTON HIGH YIELD INDEX.
<TABLE>
<S> <C> <C>
SINCE
1 YEAR ANNUALIZED TOTAL RETURNS INCEPTION
5.99% As of 3/31/00 12.50%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
HIGH YIELD CS FIRST
BOND FUND BOSTON HIGH
INSTITUTIONAL SHARES YIELD INDEX
<S> <C> <C>
7/31/1996 $250,000.00 $250,000.00
8/96 256,780.00 252,725.00
9/96 265,701.85 257,071.87
10/96 268,926.78 259,231.27
11/96 273,926.48 263,275.28
12/96 278,313.50 268,409.15
1/97 283,685.20 270,368.54
2/97 289,776.34 275,451.46
3/97 284,739.55 272,366.41
4/97 285,969.10 274,790.47
5/97 298,355.30 280,313.76
6/97 305,704.82 284,126.03
7/97 315,197.53 290,149.50
8/97 318,278.57 291,716.30
9/97 331,437.95 297,492.29
10/97 332,536.76 297,462.54
11/97 336,208.54 299,574.52
12/97 337,881.57 302,300.65
1/98 349,161.58 307,439.76
2/98 353,473.83 309,837.79
3/98 357,326.30 311,386.98
4/98 360,502.68 313,722.38
5/98 361,563.77 314,663.55
6/98 363,444.19 315,324.34
7/98 366,798.21 317,531.61
8/98 346,503.88 295,971.22
9/98 338,199.43 295,941.62
10/98 329,808.97 290,052.38
11/98 349,777.75 304,758.04
12/98 353,159.03 304,057.09
1/99 361,234.10 306,915.23
2/99 360,705.26 306,270.71
3/99 363,377.04 309,057.77
4/99 374,002.22 315,887.95
5/99 369,987.45 312,476.36
6/99 372,229.78 312,632.60
7/99 374,482.50 312,788.91
8/99 372,185.91 310,005.09
9/99 371,424.65 307,618.05
10/99 372,224.38 306,110.72
11/99 380,164.47 310,273.83
12/99 386,897.20 314,028.14
1/00 387,057.46 312,772.03
2/00 390,727.39 314,711.22
3/31/2000 385,157.00 309,990.55
</TABLE>
The graph above shows the value of a hypothetical $250,000 investment in the
Fund's Class I shares compared with the CS First Boston High Yield Index for the
periods indicated. The Fund's Class I shares calculate their performance based
upon the historical performance of their corresponding series of
Nicholas-Applegate Mutual Funds (renamed Pilgrim Mutual Funds), adjusted to
reflect all fees and expenses applicable to the Fund's Class I shares. The
Nicholas-Applegate Institutional Funds' Class I shares were first available on
May 7, 1999. Average annual total return figures include changes in principal
value, reinvested dividends, and capital gain distributions. Absent expense
limitations, total returns would have been slightly lower. Past performance
cannot guarantee future results.
The unmanaged CS First Boston High Yield Index includes over 180 U.S. domestic
issues with an average maturity range of seven to ten years and with a minimum
issue size of $100 million. The unmanaged Index differs from the Fund in
composition, does not pay management fees or expenses and includes reinvested
income and dividends. One cannot invest directly in an index.
Bond prices, and thus the Fund's share price, generally move in the opposite
direction from interest rates. Since markets can go down as well as up,
investment return and principal value will fluctuate with market conditions. You
may have a gain or loss when you sell your shares.
--------------------------------------------------------------------------------
93
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000
------------------------------------------------------------------------
HIGH YIELD BOND FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
--------------------------------------------------------------
CORPORATE BONDS -- 87.9%
--------------------------------------------------------------
AIRLINES -- 1.5%
Atlas Air, Inc.
9.250%, 04/15/08................ $ 350,000 $ 325,500
-----------
APPAREL -- 1.2%
Perry Ellis International, Inc.
Ser. B
12.250%, 04/01/06............... 265,000 253,075
-----------
APPLIANCES -- 1.6%
Salton, Inc.
10.750%, 12/15/05............... 350,000 350,875
-----------
AUTO/TRUCK PARTS & EQUIPMENT -- 1.6%
Collins & Aikan Corp.
11.500%, 04/15/06............... 350,000 342,563
-----------
BEVERAGES-NON-ALCOHOLIC -- 1.5%
Triarc Consumer Beverage 144A
10.250%, 02/15/09............... 340,000 320,450
-----------
BROADCASTING -- 8.0%
Capstar Broadcasting Partners,
Inc.
12.000%, 07/01/09............... 309,000 353,419
CD Radio, Inc.
14.500%, 05/15/09............... 350,000 323,750
Echostar DBS Corp.
9.375%, 02/01/09................ 400,000 386,000
Spanish Broadcasting System, Inc.
9.625%, 11/01/09................ 350,000 336,875
United International Holdings
0.000% (until 02/15/03,
thereafter 10.750% to maturity),
02/15/08........................ 460,000 316,250
-----------
1,716,294
-----------
CASINOS/HOTELS -- 1.5%
Venetian Casino
12.250%, 11/15/04............... 335,000 315,738
-----------
CONTAINERS-PAPER/PLASTIC -- 1.4%
Smurfit-Stone Container Corp.
12.250%, 04/01/02............... 300,000 300,000
-----------
DIVERSIFIED FINANCIAL SERVICES -- 4.0%
ACME Intermediate Holdings Cl. B
0.000% (until 09/30/01,
thereafter 12.000% to maturity),
09/30/05........................ 400,000 269,400
GS Escrow Corp.
6.750%, 08/01/01................ 385,000 373,931
Resource America, Inc.
12.000%, 08/01/04............... 280,000 220,150
-----------
863,481
-----------
DRUGS/PHARMACEUTICALS -- 1.8%
Twin Laboratories, Inc.
10.250%, 05/15/06............... 40,000 39,450
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
DRUGS/PHARMACEUTICALS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------
<S> <C> <C>
Warner Chilcott, Inc. 144A
12.625%, 02/15/08............... $ 350,000 $ 346,500
-----------
385,950
-----------
ELECTRIC -- 1.6%
AES Corp.
9.500%, 06/01/09................ 350,000 335,125
-----------
ELECTRONIC COMPONENTS-SEMICONDUCTORS -- 2.8%
Advanced Micro Devices, Inc.
11.000%, 08/01/03............... 300,000 305,250
Amkor Technology, Inc.
10.500%, 05/01/09............... 300,000 291,750
-----------
597,000
-----------
ENTERTAINMENT -- 3.7%
Ascent Entertainment Group
0.000% (until 12/15/02,
thereafter 11.875% to maturity),
12/15/04........................ 505,000 398,950
SFX Entertainment, Inc.
9.125%, 02/01/08................ 405,000 400,950
-----------
799,900
-----------
HEALTH CARE -- 1.8%
Abbey Healthcare Group
9.500%, 11/01/02................ 395,000 382,163
-----------
INTERNET SOFTWARE -- 2.7%
Exodus Communications
11.250%, 07/01/08............... 275,000 274,312
PSInet, Inc.
10.000%, 02/15/05............... 325,000 306,313
-----------
580,625
-----------
OIL & GAS PRODUCTION -- 2.8%
Ocean Energy, Inc. Class B
8.875%, 07/15/07................ 300,000 288,750
Stone Energy Corp.
8.750%, 09/15/07................ 350,000 324,625
-----------
613,375
-----------
PUBLISHING -- 1.6%
American Lawyer Media
9.750%, 12/15/07................ 375,000 352,031
-----------
RECREATIONAL CENTERS -- 1.2%
Bally Total Fitness Holdings
9.875%, 10/15/07................ 285,000 259,350
-----------
RENTAL AUTO/EQUIPMENT -- 1.4%
United Rentals, Inc.
9.500%, 06/01/08................ 340,000 311,950
-----------
RESORTS/THEME PARKS -- 1.1%
Premier Parks Inc.
9.750%, 06/15/07................ 250,000 232,813
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
94
<PAGE>
-------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
CORPORATE BONDS (Continued)
---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------
<S> <C> <C>
RETAIL-ARTS & CRAFTS -- 1.8%
Michaels Stores, Inc.
10.875%, 06/15/06............... $ 365,000 $ 378,231
-----------
RETAIL-DISCOUNT -- 2.2%
Tuesday Morning Corp.
11.000%, 12/15/07............... 484,000 474,320
-----------
RETAIL-INTERNET -- 1.2%
Amazon.com, Inc.
0.000% (until 05/01/03,
thereafter 10.000% to maturity),
05/01/08........................ 420,000 247,800
-----------
RETAIL-MUSIC STORES -- 2.4%
Musicland Stores Corp.
9.000%, 06/15/03................ 380,000 336,300
Musicland, Inc.
9.875%, 03/15/08................ 210,000 182,438
-----------
518,738
-----------
RETAIL-RESTAURANTS -- 1.6%
Foodmaker, Inc.
8.375%, 04/15/08................ 390,000 351,000
-----------
RETAIL-VIDEO RENTAL -- 1.2%
Hollywood Entertainment Corp.
10.625%, 08/15/04............... 300,000 266,250
-----------
TELECOMMUNICATIONS EQUIPMENT -- 4.0%
Covad Communications Group
0.000% (until 03/15/03,
thereafter 13.500% to maturity),
03/15/08........................ 390,000 219,863
Global Telesystems Group, Inc.
9.875%, 02/15/05................ 390,000 324,675
Northeast Optic Network
12.750%, 08/15/08............... 320,000 326,400
-----------
870,938
-----------
TELECOMMUNICATIONS -- 19.1%
Crown Castle International Corp.
0.000% (until 11/15/02,
thereafter 10.625% to maturity),
11/15/07........................ 400,000 277,500
Crown Castle International Corp.
0.000% (until 05/15/04,
thereafter 10.375% until
maturity), 05/15/11............. 300,000 169,500
Global Crossing, Ltd. 144A
9.500%, 11/15/09................ 300,000 290,250
ICG Holdings, Inc. 144A
0.000% (until 09/15/00,
thereafter 13.500% until
maturity), 09/15/05............. 310,000 291,400
Intercel, Inc.
0.000% (until 02/01/01,
thereafter 12.000% to maturity),
02/01/06........................ 290,000 262,812
International Cabletel Inc.
0.000% (until 02/01/01,
thereafter 11.500% to maturity),
02/01/06........................ 350,000 328,562
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
TELECOMMUNICATIONS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------
<S> <C> <C>
International Cabletel Inc. Ser. A
0.000% (until 04/15/00,
thereafter 12.750% to maturity),
04/15/05........................ $ 300,000 $ 306,750
Nextel Partners, Inc. 144A
11.000%, 03/15/10............... 350,000 336,000
Nextlink Communications
0.000% (until 06/01/04,
thereafter 12.250% to maturity),
06/01/09........................ 400,000 225,500
Pac-West Telecomm, Inc.
13.500%, 02/01/09............... 340,000 348,499
Spectrasite Holdings, Inc.
0.000% (until 04/15/04,
thereafter 11.250% to maturity),
04/15/09........................ 500,000 259,375
Spectrasite Holdings, Inc. 144A
10.750%, 03/15/10............... 300,000 285,374
Winstar Communications, Inc.
15.000%, 03/01/07............... 270,000 432,000
Winstar Communications, Inc. 144A
12.750%, 04/15/10............... 300,000 298,500
-----------
4,112,022
-----------
TELEPHONE -- 2.8%
Nextel Communications, Inc.
0.000% (until 10/31/02,
thereafter 9.750% to maturity),
10/31/07........................ 360,000 248,400
Viatel, Inc.
11.250%, 04/15/08............... 390,000 353,925
-----------
602,325
-----------
TELEVISION -- 5.4%
ACME Television
0.000% (until 09/30/00,
thereafter 10.875% to maturity),
09/30/04........................ 250,000 224,688
Adelphia Communications Corp. 144A
8.375%, 02/01/08................ 400,000 361,000
Frontiervision L.P.
11.000%, 10/15/06............... 250,000 255,000
Pegasus Communications Corp.
9.625%, 10/15/05................ 140,000 134,400
Pegasus Communications Corp.
Series B
9.750%, 12/01/06................ 200,000 192,000
-----------
1,167,088
-----------
VITAMINS & NUTRITION PRODUCTS -- 1.4%
NBTY, Inc. Series B
8.625%, 09/15/07................ 350,000 307,125
-----------
TOTAL CORPORATE BONDS
(Cost: $19,555,711)........................... 18,934,095
-----------
--------------------------------------------------------------
FOREIGN CORPORATE BONDS -- 7.0%
--------------------------------------------------------------
AUSTRALIA -- 0.6%
Bulong Operations 144A
12.500%, 12/15/08............... 180,000 135,000
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
95
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000 -- CONTINUED
--------------------------------------------------------------------------------
HIGH YIELD BOND FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
FOREIGN CORPORATE BONDS (Continued)
---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------
<S> <C> <C>
CANADA -- 1.2%
Microcell Telecomm., Inc.
0.000% (until 12/01/01,
thereafter 14.000% to maturity),
06/01/06........................ $ 300,000 $ 267,000
-----------
LUXEMBOURG -- 1.6%
Millicom International Cellular
S.A.
0.000% (until 06/01/01,
thereafter 13.500% to maturity),
06/01/06........................ 400,000 351,000
-----------
NETHERLANDS -- 2.3%
United Pan-Europe Communications
NV 144A
0.000% (until 08/01/05,
thereafter 13.750% to maturity),
02/01/10........................ 400,000 197,500
Versatel Telecommunications
11.875%, 07/15/09............... 300,000 294,000
-----------
491,500
-----------
UNITED KINGDOM -- 1.3%
Colt Telecom Group PLC
0.000% (until 12/15/01,
thereafter 12.000% to maturity),
12/15/06........................ 330,000 287,925
-----------
TOTAL FOREIGN CORPORATE BONDS
(Cost: $1,601,149)............................ 1,532,425
-----------
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
PREFERRED STOCK -- 0.1%
--------------------------------------------------------------
INTERNET SOFTWARE -- 0.1%
Concentric Network Corp.
(Cost: $6,587).................. 177 $ 18,187
-----------
<CAPTION>
PRINCIPAL
AMOUNT
--------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 4.4%
--------------------------------------------------------------
Morgan Guaranty London
5.625%, 04/03/00
(Cost: $931,959)................ $ 931,959 931,959
-----------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 99.4%
(COST: $22,095,406).......................... 21,416,666
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.6%.. 134,978
-----------
NET ASSETS -- 100.0%........................... $21,551,644
-----------
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
96
<PAGE>
(This page intentionally left blank)
--------------------------------------------------------------------------------
97
<PAGE>
Nicholas-Applegate Institutional Funds
Financial Highlights
For a share outstanding during the period indicated
<TABLE>
<CAPTION>
DISTRIBUTIONS FROM:
-------------------------
NET ASSET NET NET REALIZED NET NET NET ASSET
VALUE, INVESTMENT AND UNREALIZED INVESTMENT REALIZED VALUE,
BEGINNING INCOME (LOSS) (1) GAINS (LOSS) INCOME CAPITAL GAINS ENDING
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------
GLOBAL EQUITY FUNDS
WORLDWIDE GROWTH
For the period 5/7/99
through 3/31/00 $23.77 ($0.14) $ 15.07 $ - $ - $ 38.70
For the period 4/1/99
through 5/7/99 (4) 22.26 (0.02) 1.53 - - 23.77
For the year ended
3/31/99 17.90 0.67 5.16 (0.64) (0.83) 22.26
For the year ended
3/31/98 14.21 0.25 4.56 - (1.12) 17.90
For the year ended
3/31/97 15.42 (0.12) 2.08 - (3.17) 14.21
For the year ended
3/31/96 13.06 0.06 2.58 (0.28) - 15.42
GLOBAL BLUE CHIP
For the year ended
3/31/00 $20.48 ($0.21) $ 19.90 $ - ($ 8.26) $ 31.91
For the year ended
3/31/99 14.81 (0.05) 5.86 - (0.14) 20.48
9/30/97 (commenced) to
3/31/98 12.50 - 2.31 - - 14.81
GLOBAL GROWTH & INCOME
For the year ended
3/31/00 $15.21 $ 0.07 $ 7.66 ($0.12) ($ 3.67) $ 19.15
For the year ended
3/31/99 14.25 0.22 1.55 (0.13) (0.68) 15.21
6/30/97 (commenced) to
3/31/98 12.50 0.34 3.86 (0.34) (2.11) 14.25
GLOBAL TECHNOLOGY
For the year ended
3/31/00 $44.64 ($1.09) $108.81 $ - ($13.41) $138.95
7/31/98 (commenced) to
3/31/99 12.50 (0.05) 32.19 - - 44.64
GLOBAL HEALTH CARE
9/1/99 (commenced) to
3/31/00 $12.50 ($0.10) $ 18.52 ($0.01) $ - $ 30.91
INTERNATIONAL EQUITY FUNDS
INTERNATIONAL CORE GROWTH
For the period 5/7/99
through 3/31/00 $20.61 $(0.09) $ 11.38 ($0.02) $ - $ 31.88
For the period 4/1/99
through 5/7/99 (4) 19.73 (0.02) 0.90 - - 20.61
For the year ended
3/31/99 18.55 - 1.18 - - 19.73
For the year ended
3/31/98 14.13 (0.02) 5.12 - (0.68) 18.55
12/27/96 (commenced) to
3/31/97 12.50 - 1.63 - - 14.13
INTERNATIONAL SMALL CAP
GROWTH
For the period 5/7/99
through 3/31/00 $22.38 ($0.24) $ 29.26 $ - ($ 0.21) $ 51.19
For the period 4/1/99
through 5/7/99 (4) 21.12 (0.01) 1.27 - - 22.38
For the year ended
3/31/99 18.45 0.03 3.22 - (0.58) 21.12
For the year ended
3/31/98 17.02 (0.13) 5.50 - (3.94) 18.45
For the year ended
3/31/97 15.05 - 2.28 (0.08) (0.23) 17.02
For the year ended
3/31/96 13.09 0.06 2.02 (0.12) - 15.05
EMERGING COUNTRIES
For the period 5/7/99
through 3/31/00 $15.88 ($0.10) $ 7.91 $ - $ - $ 23.69
For the period 4/1/99
through 5/7/99 (4) 13.44 (0.02) 2.46 - - 15.88
For the year ended
3/31/99 17.15 (0.01) (3.63) - (0.07) 13.44
For the year ended
3/31/98 17.45 0.09 1.23 - (1.62) 17.15
For the year ended
3/31/97 14.02 (0.06) 3.67 (0.05) (0.13) 17.45
For the year ended
3/31/96 10.91 - 3.16 (0.05) - 14.02
PACIFIC RIM
For the year ended
3/31/00 $12.33 ($0.11) $ 16.15 $ - ($ 2.92) $ 25.45
For the year ended
3/31/99 12.66 (0.07) (0.26) - - 12.33
12/31/97 (commenced) to
3/31/98 12.50 0.02 0.14 - - 12.66
LATIN AMERICA
For the year ended
3/31/00 $11.56 $ 0.03 $ 9.06 $ - $ - $ 20.65
For the year ended
3/31/99 13.92 0.06 (2.27) (0.15) - 11.56
11/28/97 (commenced) to
3/31/98 12.50 0.15 1.27 - - 13.92
</TABLE>
----------------------------------
(1) Prior to April 1, 1999, net investment income per share was calculated by
taking the difference in undistributed net investment income per share at
the beginning and end of the period, adjusted for per share distributions.
Beginning April 1, 1999, net investment income per share is calculated by
dividing net investment income for the period by the average shares
outstanding during the period.
(2) Total returns are not annualized for periods less than one year.
(3) Ratios are annualized for periods of less than one year. Expense
reimbursements reflect voluntary reductions to total expenses, as discussed
in the notes to financial statements. Such amounts would decrease net
investment income (loss) ratios had such reductions not occurred.
(4) Unaudited.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
98
<PAGE>
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS (3)
------------------------------------------------------ FUND'S
NET EXPENSE PORTFOLIO NET ASSETS,
TOTAL INVESTMENT TOTAL (REIMBURSEMENTS)/ NET TURNOVER ENDING
RETURN (2) INCOME (LOSS) EXPENSES RECOUPMENT EXPENSES RATE (IN 000'S)
<S> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------
GLOBAL EQUITY FUNDS
WORLDWIDE GROWTH
For the period 5/7/99
through 3/31/00 62.81% (0.54%) 1.42% (0.05%) 1.37% 168% $188,731
For the period 4/1/99
through 5/7/99 (4) 6.78% (0.84%) 1.29% - 1.29% 21% 108,457
For the year ended
3/31/99 34.28% 0.19% 1.51% (0.17%) 1.34% 247% 74,523
For the year ended
3/31/98 35.08% (0.31%) 1.87% (0.51%) 1.36% 202% 11,686
For the year ended
3/31/97 13.18% (0.43%) 3.05% (1.70%) 1.35% 182% 2,656
For the year ended
3/31/96 20.37% 0.20% 2.60% (1.25%) 1.35% 132% 3,613
GLOBAL BLUE CHIP
For the year ended
3/31/00 110.64% (0.81%) 1.82% (0.49%) 1.33% 348% $ 24,742
For the year ended
3/31/99 39.55% (0.31%) 3.14% (1.81%) 1.33% 419% 10,414
9/30/97 (commenced) to
3/31/98 18.48% (0.06%) 2.14% (0.94%) 1.20% 238% 7,320
GLOBAL GROWTH & INCOME
For the year ended
3/31/00 55.69% 0.42% 3.06% (1.68%) 1.38% 295% $ 8,202
For the year ended
3/31/99 13.13% 1.64% 4.37% (2.96%) 1.41% 328% 5,589
6/30/97 (commenced) to
3/31/98 36.25% 7.13% 2.45% (1.09%) 1.36% 413% 6,065
GLOBAL TECHNOLOGY
For the year ended
3/31/00 259.92% (1.06%) 1.42% - 1.42% 357% $405,318
7/31/98 (commenced) to
3/31/99 257.20% (0.84%) 4.12% (2.69%) 1.43% 254% 24,094
GLOBAL HEALTH CARE
9/1/99 (commenced) to
3/31/00 147.42% (0.69%) 1.45% (0.04%) 1.41% 327% $125,355
INTERNATIONAL EQUITY FUNDS
INTERNATIONAL CORE GROWTH
For the period 5/7/99
through 3/31/00 54.78% (0.36%) 1.38% 0.02% 1.40% 171% $303,536
For the period 4/1/99
through 5/7/99 (4) 4.46% (0.97%) 1.39% - 1.39% 30% 117,365
For the year ended
3/31/99 6.43% (0.01%) 1.59% (0.24%) 1.35% 214% 107,890
For the year ended
3/31/98 36.91% (0.12%) 1.92% (0.51%) 1.41% 274% 32,305
12/27/96 (commenced) to
3/31/97 13.04% 0.43% 3.14% (1.74%) 1.40% 76% 4,593
INTERNATIONAL SMALL CAP
GROWTH
For the period 5/7/99
through 3/31/00 130.09% (0.73%) 1.45% (0.04%) 1.41% 151% $270,159
For the period 4/1/99
through 5/7/99 (4) 5.97% (0.37%) 1.39% - 1.39% 23% 71,738
For the year ended
3/31/99 17.97% (0.30%) 1.53% (0.15%) 1.38% 146% 69,077
For the year ended
3/31/98 37.02% (0.91%) 1.94% (0.53%) 1.41% 198% 42,851
For the year ended
3/31/97 15.25% (0.38%) 1.68% (0.28%) 1.40% 206% 48,505
For the year ended
3/31/96 15.99% 0.34% 2.44% (1.04%) 1.40% 141% 20,245
EMERGING COUNTRIES
For the period 5/7/99
through 3/31/00 49.18% (0.62%) 1.77% (0.10%) 1.67% 180% $300,085
For the period 4/1/99
through 5/7/99 (4) 18.07% (1.22%) 1.64% - 1.64% 34% 178,902
For the year ended
3/31/99 (21.22%) 0.11% 1.97% (0.30%) 1.67% 213% 140,318
For the year ended
3/31/98 8.77% 1.15% 2.02% (0.36%) 1.66% 243% 88,063
For the year ended
3/31/97 25.48% (0.52%) 1.87% (0.22%) 1.65% 176% 56,918
For the year ended
3/31/96 29.06% 0.29% 3.59% (1.94%) 1.65% 118% 6,878
PACIFIC RIM
For the year ended
3/31/00 136.92% (0.55%) 6.25% (4.63%) 1.62% 424% $ 3,821
For the year ended
3/31/99 (2.69%) (0.67%) 14.68% (13.11%) 1.57% 450% 1,099
12/31/97 (commenced) to
3/31/98 1.28% 0.74% 4.50% (3.10%) 1.40% 86% 1,197
LATIN AMERICA
For the year ended
3/31/00 78.67% 0.20% 3.93% (2.17%) 1.76% 463% $ 5,277
For the year ended
3/31/99 (15.78%) 0.95% 14.61% (12.97%) 1.64% 575% 1,774
11/28/97 (commenced) to
3/31/98 11.14% 3.33% 5.20% (3.55%) 1.65% 188% 1,184
</TABLE>
----------------------------------
(1) Prior to April 1, 1999, net investment income per share was calculated by
taking the difference in undistributed net investment income per share at
the beginning and end of the period, adjusted for per share distributions.
Beginning April 1, 1999, net investment income per share is calculated by
dividing net investment income for the period by the average shares
outstanding during the period.
(2) Total returns are not annualized for periods less than one year.
(3) Ratios are annualized for periods of less than one year. Expense
reimbursements reflect voluntary reductions to total expenses, as discussed
in the notes to financial statements. Such amounts would decrease net
investment income (loss) ratios had such reductions not occurred.
(4) Unaudited.
--------------------------------------------------------------------------------
99
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
FINANCIAL HIGHLIGHTS
For a share outstanding during the period indicated
<TABLE>
<CAPTION>
DISTRIBUTIONS FROM:
-------------------------
NET ASSET NET NET REALIZED NET NET NET ASSET
VALUE, INVESTMENT AND UNREALIZED INVESTMENT REALIZED VALUE,
BEGINNING INCOME (LOSS) (1) GAINS (LOSS) INCOME CAPITAL GAINS ENDING
<S> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------
U.S. EQUITY FUNDS
LARGE CAP GROWTH
For the period 5/7/99
through 3/31/00 $29.18 ($0.14) $20.82 $ - $ - $49.86
For the period 4/1/99
through 5/7/99 (4) 26.89 (0.01) 2.30 - - 29.18
For the year ended
3/31/99 16.50 0.01 10.53 - (0.15) 26.89
For the year ended
3/31/98 13.00 (0.02) 7.55 - (4.03) 16.50
12/27/96 (commenced) to
3/31/97 12.50 - 0.50 - - 13.00
MID CAP GROWTH
For the period 5/7/99
through 3/31/00 $19.44 ($0.15) $22.22 $ - $ - $41.51
For the period 4/1/99
through 5/7/99 (4) 19.17 (0.01) 0.28 - - 19.44
For the year ended
3/31/99 17.16 (0.10) 2.76 - (0.65) 19.17
For the year ended
3/31/98 15.39 (0.07) 6.00 - (4.16) 17.16
For the year ended
3/31/97 16.26 (0.08) 0.49 - (1.28) 15.39
For the year ended
3/31/96 12.62 (0.03) 4.47 - (0.80) 16.26
SMALL CAP GROWTH
For the period 5/7/99
through 3/31/00 $14.02 ($0.12) $13.51 $ - ($0.38) $27.03
For the period 4/1/99
through 5/7/99 (4) 13.53 (0.01) 0.50 - - 14.02
For the year ended
3/31/99 14.17 (0.14) 0.17 - (0.67) 13.53
For the year ended
3/31/98 11.06 (0.03) 5.10 - (1.96) 14.17
For the year ended
3/31/97 15.10 (0.08) (0.31) - (3.65) 11.06
For the year ended
3/31/96 11.58 (0.11) 4.45 - (0.82) 15.10
MINI CAP GROWTH
For the year ended
3/31/00 $20.24 ($0.35) $27.92 $ - ($5.27) $42.54
For the year ended
3/31/99 25.05 (0.42) (3.05) - (1.34) 20.24
For the year ended
3/31/98 15.94 (0.17) 10.93 - (1.65) 25.05
For the year ended
3/31/97 15.85 (0.17) 0.84 - (0.58) 15.94
7/12/95 (commenced) to
3/31/96 12.50 (0.05) 3.40 - - 15.85
VALUE
For the period 5/7/99
through 3/31/00 $22.99 $ 0.18 ($1.30) ($0.13) $ - $21.74
For the period 4/1/99
through 5/7/99 (4) 20.90 (0.01) 2.10 - - 22.99
For the year ended
3/31/99 21.90 0.13 0.80 (0.12) (1.81) 20.90
For the year ended
3/31/98 15.06 - 8.27 - (1.43) 21.90
4/30/96 (commenced) to
3/31/97 12.50 1.50 3.11 (1.44) (0.61) 15.06
CONVERTIBLE
For the period 5/7/99
through 3/31/00 $22.21 $ 0.49 $11.44 ($0.47) $ - $33.67
For the period 4/1/99
through 5/7/99 (4) 21.53 0.05 0.63 - - 22.21
For the year ended
3/31/99 18.64 0.50 3.11 (0.54) (0.18) 21.53
For the year ended
3/31/98 14.97 0.47 4.20 (0.47) (0.53) 18.64
For the year ended
3/31/97 14.45 0.51 1.51 (0.52) (0.98) 14.97
For the year ended
3/31/96 11.86 0.53 2.59 (0.53) - 14.45
U.S. FIXED INCOME FUNDS
SHORT INTERMEDIATE
For the year ended
3/31/00 $12.72 $ 0.76 ($0.29) ($0.75) $ - $12.44
For the year ended
3/31/99 12.76 0.79 (0.04) (0.79) - 12.72
For the year ended
3/31/98 12.66 0.83 0.10 (0.83) - 12.76
For the year ended
3/31/97 12.79 0.79 (0.13) (0.79) - 12.66
8/31/95 (commenced) to
3/31/96 12.50 0.37 0.29 (0.37) - 12.79
HIGH QUALITY BOND
For the period 5/8/99
through 3/31/00 $12.66 $ 0.73 ($0.56) ($0.72) $ - $12.11
For the period 4/1/99
through 5/7/99 (4) 12.71 0.08 (0.05) (0.08) - 12.66
For the year ended
3/31/99 13.10 0.83 (0.05) (0.78) (0.39) 12.71
For the year ended
3/31/98 12.54 0.84 0.70 (0.84) (0.14) 13.10
For the year ended
3/31/97 12.72 0.79 (0.17) (0.80) - 12.54
8/31/95 (commenced) to
3/31/96 12.50 0.45 0.47 (0.44) (0.26) 12.72
</TABLE>
----------------------------------
(1) Prior to April 1, 1999, net investment income per share was calculated by
taking the difference in undistributed net investment income per share at
the beginning and end of the period, adjusted for per share distributions.
Beginning April 1, 1999 net investment income per share is calculated by
dividing net investment income for the period by the average shares
outstanding during the period.
(2) Total returns are not annualized for periods less than one year.
(3) Ratios are annualized for periods of less than one year. Expense
reimbursements reflect voluntary reductions to total expenses, as discussed
in the notes to financial statements. Such amounts would decrease net
investment income (loss) ratios had such reductions not occurred.
(4) Unaudited.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
100
<PAGE>
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS (3)
------------------------------------------------------ FUND'S
NET EXPENSE PORTFOLIO NET ASSETS,
TOTAL INVESTMENT TOTAL (REIMBURSEMENTS)/ NET TURNOVER ENDING
RETURN (2) INCOME (LOSS) EXPENSES RECOUPMENT EXPENSES RATE (IN 000'S)
<S> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------
U.S. EQUITY FUNDS
LARGE CAP GROWTH
For the period 5/7/99
through 3/31/00 70.86% (0.44%) 1.20% (0.19%) 1.01% 154% $ 37,982
For the period 4/1/99
through 5/7/99 (4) 8.52% (0.40%) 0.98% - 0.98% 18% 6,043
For the year ended
3/31/99 64.28% (0.01%) 1.63% (0.65%) 0.98% 253% 5,940
For the year ended
3/31/98 63.32% (0.17%) 3.67% (2.66%) 1.01% 306% 2,556
12/27/96 (commenced) to
3/31/97 4.00% (0.06%) 4.99% (3.99%) 1.00% 321% 1,293
MID CAP GROWTH
For the period 5/7/99
through 3/31/00 113.48% (0.60%) 1.09% (0.08%) 1.01% 110% $252,377
For the period 4/1/99
through 5/7/99 (4) 1.41% (0.70%) 0.99% - 0.99% 25% 128,710
For the year ended
3/31/99 16.09% (0.44%) 1.04% (0.08%) 0.96% 154% 165,014
For the year ended
3/31/98 42.49% (0.72%) 1.19% (0.22%) 0.97% 200% 169,412
For the year ended
3/31/97 1.74% (0.45%) 1.02% (0.02%) 1.00% 153% 156,443
For the year ended
3/31/96 35.81% (0.32%) 1.06% (0.08%) 0.98% 114% 149,969
SMALL CAP GROWTH
For the period 5/7/99
through 3/31/00 96.49% (0.68%) 1.38% (0.19%) 1.19% 84% $276,556
For the period 4/1/99
through 5/7/99 (4) 3.70% (0.87%) 1.17% - 1.17% 18% 197,120
For the year ended
3/31/99 1.03% (0.71%) 1.35% (0.10%) 1.25% 90% 213,149
For the year ended
3/31/98 47.38% (1.16%) 1.44% (0.25%) 1.19% 92% 257,599
For the year ended
3/31/97 (5.66%) (0.72%) 1.26% (0.09%) 1.17% 113% 167,230
For the year ended
3/31/96 38.27% (0.62%) 1.20% (0.04%) 1.16% 130% 224,077
MINI CAP GROWTH
For the year ended
3/31/00 151.76% (1.32%) 1.76% (0.19%) 1.57% 141% $ 92,221
For the year ended
3/31/99 (13.78%) (1.18%) 1.70% (0.11%) 1.59% 115% 53,593
For the year ended
3/31/98 68.89% (2.51%) 1.83% (0.26%) 1.57% 113% 82,122
For the year ended
3/31/97 3.90% (1.08%) 1.99% (0.43%) 1.56% 164% 28,712
7/12/95 (commenced) to
3/31/96 26.80% (0.98%) 2.46% (0.91%) 1.55% 107% 25,237
VALUE
For the period 5/7/99
through 3/31/00 (4.87%) 0.97% 1.26% (0.24%) 1.02% 143% $ 23,185
For the period 4/1/99
through 5/7/99 (4) 10.00% 0.45% 2.48% (1.50%) 0.98% 7% 27,818
For the year ended
3/31/99 4.43% 0.87% 2.11% (1.12%) 0.99% 147% 15,322
For the year ended
3/31/98 57.78% 2.33% 2.46% (1.45%) 1.01% 55% 10,260
4/30/96 (commenced) to
3/31/97 26.77% 1.64% 3.34% (2.34%) 1.00% 139% 3,062
CONVERTIBLE
For the period 5/7/99
through 3/31/00 54.31% 2.02% 1.27% (0.24%) 1.03% 149% $114,655
For the period 4/1/99
through 5/7/99 (4) 3.16% 2.15% 0.99% - 0.99% 11% 90,843
For the year ended
3/31/99 19.93% 2.67% 1.07% (0.11%) 0.96% 138% 88,590
For the year ended
3/31/98 31.78% 6.25% 1.20% (0.23%) 0.97% 160% 80,084
For the year ended
3/31/97 14.37% 3.43% 1.37% (0.37%) 1.00% 167% 18,344
For the year ended
3/31/96 26.69% 3.88% 1.53% (0.53%) 1.00% 145% 17,239
U.S. FIXED INCOME FUNDS
SHORT INTERMEDIATE
For the year ended
3/31/00 3.80% 6.03% 0.95% (0.61%) 0.34% 162% $ 21,136
For the year ended
3/31/99 6.02% 6.11% 1.34% (1.00%) 0.34% 104% 18,467
For the year ended
3/31/98 7.50% 13.03% 1.51% (1.15%) 0.36% 197% 13,535
For the year ended
3/31/97 5.30% 6.18% 2.86% (2.51%) 0.35% 132% 5,364
8/31/95 (commenced) to
3/31/96 5.33% 5.81% 3.17% (2.82%) 0.35% 114% 4,726
HIGH QUALITY BOND
For the period 5/8/99
through 3/31/00 1.41% 6.67% 1.14% (0.67%) 0.47% 161% $ 19,909
For the period 4/1/99
through 5/7/99 (4) 0.26% 6.45% 0.39% - 0.39% 22% 18,187
For the year ended
3/31/99 6.14% 6.41% 1.15% (0.72%) 0.43% 274% 15,735
For the year ended
3/31/98 12.60% 12.80% 1.64% (1.18%) 0.46% 407% 15,759
For the year ended
3/31/97 4.98% 6.12% 3.74% (3.29%) 0.45% 190% 15,865
8/31/95 (commenced) to
3/31/96 5.49% 6.39% 6.45% (6.00%) 0.45% 60% 4,413
</TABLE>
----------------------------------
(1) Prior to April 1, 1999, net investment income per share was calculated by
taking the difference in undistributed net investment income per share at
the beginning and end of the period, adjusted for per share distributions.
Beginning April 1, 1999 net investment income per share is calculated by
dividing net investment income for the period by the average shares
outstanding during the period.
(2) Total returns are not annualized for periods less than one year.
(3) Ratios are annualized for periods of less than one year. Expense
reimbursements reflect voluntary reductions to total expenses, as discussed
in the notes to financial statements. Such amounts would decrease net
investment income (loss) ratios had such reductions not occurred.
(4) Unaudited.
--------------------------------------------------------------------------------
101
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
FINANCIAL HIGHLIGHTS
For a share outstanding during the period indicated
<TABLE>
<CAPTION>
DISTRIBUTIONS FROM:
-------------------------
NET ASSET NET NET REALIZED NET NET NET ASSET
VALUE, INVESTMENT AND UNREALIZED INVESTMENT REALIZED VALUE,
BEGINNING INCOME (LOSS)(1) GAINS (LOSS) INCOME CAPITAL GAINS ENDING
<S> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------
U.S. FIXED INCOME FUNDS (CONTINUED)
HIGH YIELD BOND
For the period 5/7/99
through 3/31/00 $12.58 $1.05 ($0.64) ($1.04) $ - $11.95
For the period 4/1/99
through 5/7/99 (4) 12.37 0.13 0.18 (0.10) - 12.58
For the year ended
3/31/99 13.46 1.25 (1.06) (1.28) - 12.37
For the year ended
3/31/98 13.20 1.11 2.02 (1.15) (1.72) 13.46
7/31/96 (commenced) to
3/31/97 12.50 0.74 0.95 (0.73) (0.26) 13.20
</TABLE>
----------------------------------
(1) Prior to April 1, 1999, net investment income per share was calculated by
taking the difference in undistributed net investment income per share at
the beginning and end of the period, adjusted for per share distributions.
Beginning April 1, 1999, net investment income per share is calculated by
dividing net investment income for the period by the average shares
outstanding during the period.
(2) Total returns are not annualized for periods less than one year.
(3) Ratios are annualized for periods of less than one year. Expense
reimbursements reflect voluntary reductions to total expenses, as discussed
in the notes to financial statements. Such amounts would decrease net
investment income (loss) ratios had such reductions not occurred.
(4) Unaudited.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
102
<PAGE>
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS (3)
------------------------------------------------------ FUND'S
NET EXPENSE PORTFOLIO NET ASSETS,
TOTAL INVESTMENT TOTAL (REIMBURSEMENTS)/ NET TURNOVER ENDING
RETURN (2) INCOME (LOSS) EXPENSES RECOUPMENT EXPENSES RATE (IN 000'S)
<S> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------
U.S. FIXED INCOME FUNDS (CONTINUED)
HIGH YIELD BOND
For the period 5/7/99
through 3/31/00 3.39% 9.97% 1.31% (0.50%) 0.81% 113% $ 21,552
For the period 4/1/99
through 5/7/99 (4) 2.52% 10.66% 0.58% (0.02%) 0.56% 25% 11,412
For the year ended
3/31/99 1.69% 9.79% 1.09% (0.41%) 0.68% 242% 11,319
For the year ended
3/31/98 25.49% 8.28% 2.66% (1.90%) 0.76% 484% 10,771
7/31/96 (commenced) to
3/31/97 13.90% 8.47% 1.95% (1.20%) 0.75% 465% 4,608
</TABLE>
----------------------------------
(1) Prior to April 1, 1999, net investment income per share was calculated by
taking the difference in undistributed net investment income per share at
the beginning and end of the period, adjusted for per share distributions.
Beginning April 1, 1999, net investment income per share is calculated by
dividing net investment income for the period by the average shares
outstanding during the period.
(2) Total returns are not annualized for periods less than one year.
(3) Ratios are annualized for periods of less than one year. Expense
reimbursements reflect voluntary reductions to total expenses, as discussed
in the notes to financial statements. Such amounts would decrease net
investment income (loss) ratios had such reductions not occurred.
(4) Unaudited.
--------------------------------------------------------------------------------
103
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2000
<TABLE>
<CAPTION>
GLOBAL
WORLDWIDE GLOBAL GROWTH & GLOBAL
GROWTH BLUE CHIP INCOME TECHNOLOGY
<S> <C> <C> <C> <C>
ASSETS
Investments, at value* $184,783,236 $24,156,783 $8,400,496 $400,112,430
Foreign currencies, at
value** -- 2,773 63,275 --
Cash 20,029,562 1,163,192 201,700 47,294,988
Receivables:
Investment securities
sold 7,979,188 1,579,993 349,675 27,070,910
Capital shares sold 1,176 41,185 216 6,908,402
Dividends 173,980 10,743 5,520 68,401
Interest 13 -- 15,407 --
From investment advisor 3,313 5,705 35,495 --
Unrealized gain on
forward currency
contracts -- -- 326 --
Other assets 15,549 374 -- 47,468
------------ ----------- ---------- ------------
Total Assets 212,986,017 26,960,748 9,072,110 481,502,599
------------ ----------- ---------- ------------
LIABILITIES
Payables:
Bank overdraft $ 173,062 $ 8 $ 1,322 $ 4,129,424
Investments purchased 3,706,801 988,969 621,082 14,330,072
Capital shares
purchased -- 17,085 -- 6,489,355
Collateral on
securities loaned 20,029,562 1,163,192 201,700 47,294,988
Loan -- -- -- 3,255,000
Dividends -- -- -- 16,986
To investment advisor 167,795 17,633 6,107 407,612
Unrealized loss on
forward currency
contracts -- -- -- --
Other liabilities 178,197 32,249 39,558 260,701
------------ ----------- ---------- ------------
Total Liabilities 24,255,417 2,219,136 869,769 76,184,138
------------ ----------- ---------- ------------
NET ASSETS $188,730,600 $24,741,612 $8,202,341 $405,318,461
------------ ----------- ---------- ------------
------------ ----------- ---------- ------------
* Investments, at cost $129,571,617 $18,017,293 $6,827,966 $341,650,111
------------ ----------- ---------- ------------
------------ ----------- ---------- ------------
** Foreign currencies,
at cost $ (173,052) $ 2,751 $ 62,719 $ (4,152,947)
------------ ----------- ---------- ------------
------------ ----------- ---------- ------------
NET ASSETS CONSIST OF:
Paid-in capital $107,662,314 $13,052,110 $5,325,562 $264,160,145
Undistributed net
investment income
(loss) (1,459) (23,718) (590) (314,874)
Accumulated net realized
gain (loss) on
investments and foreign
currencies 25,888,663 5,573,259 1,308,450 82,832,299
Net unrealized
appreciation
(depreciation) of
investments and of
other assets and
liabilities denominated
in foreign currencies 55,181,082 6,139,961 1,568,919 58,640,891
------------ ----------- ---------- ------------
Net assets applicable to
all shares outstanding $188,730,600 $24,741,612 $8,202,341 $405,318,461
------------ ----------- ---------- ------------
------------ ----------- ---------- ------------
Net Assets of
Institutional Shares $188,730,600 $24,741,612 $8,202,341 $405,318,461
Net Assets of Retirement
Shares NA NA NA NA
------------ ----------- ---------- ------------
------------ ----------- ---------- ------------
Institutional Shares
outstanding 4,876,729 775,264 428,211 2,917,113
Retirement Shares
outstanding NA NA NA NA
------------ ----------- ---------- ------------
------------ ----------- ---------- ------------
Net Asset Value --
Institutional Share $ 38.70 $ 31.91 $ 19.15 $ 138.95
Net Asset Value --
Retirement Share NA NA NA NA
------------ ----------- ---------- ------------
------------ ----------- ---------- ------------
</TABLE>
----------------------------------
(1) Commenced operations on 9/1/99.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
104
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL
GLOBAL INTERNATIONAL SMALL CAP EMERGING PACIFIC
HEALTH CARE(1) CORE GROWTH GROWTH COUNTRIES RIM
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at value* $129,972,052 $330,188,369 $270,434,612 $292,050,174 $3,530,617
Foreign currencies, at
value** -- -- 4,493,544 12,248,350 38,858
Cash -- 44,238,137 42,562,871 26,066,518 68,400
Receivables:
Investment securities
sold 12,126,581 18,559,174 23,209,433 8,286,972 446,687
Capital shares sold 130,129 6,620,489 10,485,438 4,946,750 85
Dividends 20,523 384,004 88,174 647,668 9,091
Interest -- 24 53 185 --
From investment advisor -- -- -- -- 26,336
Unrealized gain on
forward currency
contracts -- -- -- -- --
Other assets 28,898 15,153 18,417 24,888 --
------------ ------------ ------------ ------------ ----------
Total Assets 142,278,183 400,005,350 351,292,542 344,271,505 4,120,074
------------ ------------ ------------ ------------ ----------
LIABILITIES
Payables:
Bank overdraft $ 12 $ 342,143 $ 1,682 $ 5,027,205 $ --
Investments purchased 16,049,407 29,033,101 26,873,943 7,742,830 205,741
Capital shares
purchased 667,066 6,754,001 11,195,905 4,701,423 --
Collateral on
securities loaned -- 44,238,137 42,562,871 26,066,518 68,400
Loan -- -- -- -- --
Dividends -- -- -- -- --
To investment advisor 139,071 304,559 270,483 347,812 3,240
Unrealized loss on
forward currency
contracts -- -- -- -- --
Other liabilities 67,375 226,206 228,853 300,410 21,911
------------ ------------ ------------ ------------ ----------
Total Liabilities 16,922,931 80,898,147 81,133,737 44,186,198 299,292
------------ ------------ ------------ ------------ ----------
NET ASSETS $125,355,252 $319,107,203 $270,158,805 $300,085,307 $3,820,782
------------ ------------ ------------ ------------ ----------
------------ ------------ ------------ ------------ ----------
* Investments, at cost $127,121,740 $264,061,879 $206,618,894 $225,599,213 $3,227,825
------------ ------------ ------------ ------------ ----------
------------ ------------ ------------ ------------ ----------
** Foreign currencies,
at cost $ (12) $ (342,142) $ 4,486,850 $ 12,204,036 $ 38,858
------------ ------------ ------------ ------------ ----------
------------ ------------ ------------ ------------ ----------
NET ASSETS CONSIST OF:
Paid-in capital $104,927,579 $238,538,177 $157,131,010 $209,843,543 $2,337,827
Undistributed net
investment income
(loss) 350,427 (529,318) (1,195,825) (864,040) (8,934)
Accumulated net realized
gain (loss) on
investments and foreign
currencies 17,212,975 15,414,362 50,304,096 24,608,301 1,187,090
Net unrealized
appreciation
(depreciation) of
investments and of
other assets and
liabilities denominated
in foreign currencies 2,864,271 65,683,982 63,919,524 66,497,503 304,799
------------ ------------ ------------ ------------ ----------
Net assets applicable to
all shares outstanding $125,355,252 $319,107,203 $270,158,805 $300,085,307 $3,820,782
------------ ------------ ------------ ------------ ----------
------------ ------------ ------------ ------------ ----------
Net Assets of
Institutional Shares $125,355,252 $303,535,834 $270,158,805 $300,084,638 $3,820,782
Net Assets of Retirement
Shares NA 15,571,369 NA 669 NA
------------ ------------ ------------ ------------ ----------
------------ ------------ ------------ ------------ ----------
Institutional Shares
outstanding 4,055,453 9,520,126 5,277,591 12,666,145 150,153
Retirement Shares
outstanding NA 489,017 NA 28 NA
------------ ------------ ------------ ------------ ----------
------------ ------------ ------------ ------------ ----------
Net Asset Value --
Institutional Share $ 30.91 $ 31.88 $ 51.19 $ 23.69 $ 25.45
Net Asset Value --
Retirement Share NA $ 31.84 NA $ 23.67 NA
------------ ------------ ------------ ------------ ----------
------------ ------------ ------------ ------------ ----------
</TABLE>
----------------------------------
(1) Commenced operations on 9/1/99.
--------------------------------------------------------------------------------
105
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
STATEMENT OF ASSETS AND LIABILITIES -- CONTINUED
MARCH 31, 2000
<TABLE>
<CAPTION>
LATIN LARGE CAP MID CAP SMALL CAP MINI CAP
AMERICA GROWTH GROWTH GROWTH GROWTH
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at value* $5,442,691 $122,715,544 $252,510,387 $278,372,059 $ 93,257,120
Foreign currencies, at
value** -- -- -- -- --
Cash 409,000 5,779,900 19,450,700 24,811,407 6,343,737
Receivables:
Investment securities
sold 45,138 1,020,602 1,110,963 1,852,611 1,007,754
Capital shares sold 13 2,314,652 123,947 4,127,854 1,058,933
Dividends 22,121 40,241 5,610 12,576 --
Interest -- -- -- -- --
From investment advisor 1,768 22,331 -- 22,355 --
Unrealized gain on
forward currency
contracts -- -- -- -- --
Other assets 1,257 3,373 19,147 25,044 9,614
---------- ------------ ------------ ------------ ------------
Total Assets 5,921,988 131,896,643 273,220,754 309,223,906 101,677,158
---------- ------------ ------------ ------------ ------------
LIABILITIES
Payables:
Bank overdraft $ 1,568 $ -- $ 5 $ -- $ 8
Investments purchased 214,596 2,257,898 977,450 1,498,963 1,040,759
Capital shares
purchased 10 1,928,317 24,640 -- 1,099,034
Collateral on
securities loaned 409,000 5,779,900 19,450,700 24,811,400 6,343,737
Loan -- -- -- -- 760,000
Dividends -- -- -- -- --
To investment advisor 5,670 75,954 203,774 278,908 121,426
Unrealized loss on
forward currency
contracts -- -- -- -- --
Other liabilities 14,269 87,418 172,729 217,284 91,159
---------- ------------ ------------ ------------ ------------
Total Liabilities 645,113 10,129,487 20,829,298 26,806,555 9,456,123
---------- ------------ ------------ ------------ ------------
NET ASSETS $5,276,875 $121,767,156 $252,391,456 $282,417,351 $ 92,221,035
---------- ------------ ------------ ------------ ------------
---------- ------------ ------------ ------------ ------------
* Investments, at cost $4,566,135 $ 92,182,420 $129,646,172 $158,291,577 $ 56,197,571
---------- ------------ ------------ ------------ ------------
---------- ------------ ------------ ------------ ------------
** Foreign currencies,
at cost $ (7) $ -- $ -- $ -- $ --
---------- ------------ ------------ ------------ ------------
---------- ------------ ------------ ------------ ------------
NET ASSETS CONSIST OF:
Paid-in capital $3,113,965 $ 87,591,001 $112,406,208 $129,383,946 $ 24,617,969
Undistributed net
investment income
(loss) (6,720) -- -- -- --
Accumulated net realized
gain (loss) on
investments and foreign
currencies 1,293,128 3,643,031 17,121,033 32,952,924 30,543,518
Net unrealized
appreciation
(depreciation) of
investments and of
other assets and
liabilities denominated
in foreign currencies 876,502 30,533,124 122,864,215 120,080,481 37,059,548
---------- ------------ ------------ ------------ ------------
Net assets applicable to
all shares outstanding $5,276,875 $121,767,156 $252,391,456 $282,417,351 $ 92,221,035
---------- ------------ ------------ ------------ ------------
---------- ------------ ------------ ------------ ------------
Net Assets of
Institutional Shares $5,276,875 $ 37,981,888 $252,377,132 $276,556,310 $ 92,221,035
Net Assets of Retirement
Shares NA 83,785,268 14,324 5,861,041 NA
---------- ------------ ------------ ------------ ------------
---------- ------------ ------------ ------------ ------------
Institutional Shares
outstanding 255,486 761,795 6,079,914 10,231,544 2,167,987
Retirement Shares
outstanding NA 1,683,282 345 216,710 NA
---------- ------------ ------------ ------------ ------------
---------- ------------ ------------ ------------ ------------
Net Asset Value --
Institutional Share $ 20.65 $ 49.86 $ 41.51 $ 27.03 $ 42.54
Net Asset Value --
Retirement Share NA $ 49.77 $ 41.51 $ 27.05 NA
---------- ------------ ------------ ------------ ------------
---------- ------------ ------------ ------------ ------------
</TABLE>
----------------------------------
(1) Commenced operations on 9/1/99.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
106
<PAGE>
<TABLE>
<CAPTION>
SHORT HIGH QUALITY HIGH YIELD
VALUE CONVERTIBLE INTERMEDIATE BOND BOND
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at value* $31,985,276 $114,792,051 $23,213,141 $24,497,770 $21,416,666
Foreign currencies, at
value** -- -- -- -- --
Cash 970,408 29,900 -- -- 931,921
Receivables:
Investment securities
sold 327,214 156,851 -- 117,154 --
Capital shares sold -- 25,382 758,133 25,879 14,179
Dividends 67,601 43,992 -- 2,731 --
Interest -- 381,822 189,719 295,247 439,845
From investment advisor 7,479 31,066 23,023 20,740 15,569
Unrealized gain on
forward currency
contracts -- -- 694 -- --
Other assets 3,528 15,119 3,410 4,893 2,670
----------- ------------ ----------- ----------- -----------
Total Assets 33,361,506 115,476,183 24,188,120 24,964,414 22,820,850
----------- ------------ ----------- ----------- -----------
LIABILITIES
Payables:
Bank overdraft $ -- $ 21 $ 4,661 $ 996 $ --
Investments purchased 2,274,773 627,896 1,515,088 2,196,918 1,231,959
Capital shares
purchased 133,242 -- 1,490,616 -- --
Collateral on
securities loaned -- 29,900 -- -- --
Loan -- -- -- -- --
Dividends 10 9 8,818 133 --
To investment advisor 21,943 73,433 4,447 8,493 10,879
Unrealized loss on
forward currency
contracts -- -- -- 4,813 --
Other liabilities 46,224 89,837 28,181 33,836 26,368
----------- ------------ ----------- ----------- -----------
Total Liabilities 2,476,192 821,096 3,051,811 2,245,189 1,269,206
----------- ------------ ----------- ----------- -----------
NET ASSETS $30,885,314 $114,655,087 $21,136,309 $22,719,225 $21,551,644
----------- ------------ ----------- ----------- -----------
----------- ------------ ----------- ----------- -----------
* Investments, at cost $32,057,924 $ 97,029,281 $23,474,202 $24,885,607 $22,095,406
----------- ------------ ----------- ----------- -----------
----------- ------------ ----------- ----------- -----------
** Foreign currencies,
at cost $ -- $ -- $ -- $ -- $ --
----------- ------------ ----------- ----------- -----------
----------- ------------ ----------- ----------- -----------
NET ASSETS CONSIST OF:
Paid-in capital $32,724,026 $ 89,795,701 $21,654,660 $23,632,563 $22,205,049
Undistributed net
investment income
(loss) 85,603 3,263 14,956 15,863 25,280
Accumulated net realized
gain (loss) on
investments and foreign
currencies (1,851,668) 7,093,353 (272,941) (504,817) 55
Net unrealized
appreciation
(depreciation) of
investments and of
other assets and
liabilities denominated
in foreign currencies (72,647) 17,762,770 (260,366) (424,384) (678,740)
----------- ------------ ----------- ----------- -----------
Net assets applicable to
all shares outstanding $30,885,314 $114,655,087 $21,136,309 $22,719,225 $21,551,644
----------- ------------ ----------- ----------- -----------
----------- ------------ ----------- ----------- -----------
Net Assets of
Institutional Shares $23,185,421 $114,655,087 $21,136,309 $19,909,403 $21,551,644
Net Assets of Retirement
Shares 7,699,893 NA NA 2,809,822 NA
----------- ------------ ----------- ----------- -----------
----------- ------------ ----------- ----------- -----------
Institutional Shares
outstanding 1,066,333 3,405,469 1,699,143 1,644,686 1,802,809
Retirement Shares
outstanding 354,225 NA NA 231,775 NA
----------- ------------ ----------- ----------- -----------
----------- ------------ ----------- ----------- -----------
Net Asset Value --
Institutional Share $ 21.74 $ 33.67 $ 12.44 $ 12.11 $ 11.95
Net Asset Value --
Retirement Share $ 21.74 NA NA $ 12.12 NA
----------- ------------ ----------- ----------- -----------
----------- ------------ ----------- ----------- -----------
</TABLE>
----------------------------------
(1) Commenced operations on 9/1/99.
--------------------------------------------------------------------------------
107
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 2000
<TABLE>
<CAPTION>
GLOBAL
WORLDWIDE GLOBAL GROWTH & GLOBAL GLOBAL
GROWTH(1) BLUE CHIP INCOME TECHNOLOGY HEALTH CARE(2)
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends, net of foreign
taxes* $ 646,055 $ 66,174 $ 42,909 $ 123,607 $ 41,498
Interest 388,545 7,453 75,817 336,300 153,186
Securities lending 108,780 12,406 3,191 32,420 --
----------- ----------- ---------- ------------ -----------
Total Income 1,143,380 86,033 121,917 492,327 194,684
----------- ----------- ---------- ------------ -----------
EXPENSES
Advisory fee 1,391,630 128,590 57,511 1,390,764 271,020
Accounting and
administration fees 93,599 10,848 6,522 118,107 10,391
Custodian fees 169,273 74,679 72,905 114,763 33,341
Transfer agent fees and
expenses 49,703 20,776 15,688 52,023 11,672
Distribution and
shareholder servicing
fees 1 -- -- -- --
Administrative services 139,164 14,949 6,193 136,095 27,098
Professional fees 48,042 9,195 39,361 43,649 19,162
Shareholder reporting 10,500 1,522 643 9,470 9,103
Registration fees 28,688 5,322 3,796 63,776 4,631
Trustees' fees and
expenses 9,153 1,045 448 8,049 1,273
Interest and credit
facility fee 13,206 23,377 1,780 11,152 840
Insurance 321 74 41 133 --
Miscellaneous 17,898 3,773 2,781 19,462 5,729
----------- ----------- ---------- ------------ -----------
Total Expenses 1,971,178 294,150 207,669 1,967,443 394,260
Expenses
(reimbursed)/recouped (73,822) (78,076) (113,801) (2,985) (11,443)
----------- ----------- ---------- ------------ -----------
Net Expenses 1,897,356 216,074 93,868 1,964,458 382,817
----------- ----------- ---------- ------------ -----------
NET INVESTMENT INCOME
(LOSS) (753,976) (130,041) 28,049 (1,472,131) (188,133)
----------- ----------- ---------- ------------ -----------
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Realized gain (loss)
from:
Securities 26,947,769 7,936,836 2,214,175 95,907,804 17,784,741
Foreign currency
transactions (306,589) (68,607) (18,529) (484,953) (23,859)
----------- ----------- ---------- ------------ -----------
Net realized gain
(loss) 26,641,180 7,868,229 2,195,646 95,422,851 17,760,882
----------- ----------- ---------- ------------ -----------
Change in unrealized
appreciation
(depreciation) of:
Investments 55,211,619 4,587,718 881,137 54,105,656 2,850,312
Other assets and
liabilities
denominated in
foreign currencies (30,537) 471 (8,373) 177,790 13,959
----------- ----------- ---------- ------------ -----------
Net unrealized
appreciation
(depreciation) 55,181,082 4,588,189 872,764 54,283,446 2,864,271
----------- ----------- ---------- ------------ -----------
NET GAIN (LOSS) ON
INVESTMENTS 81,822,262 12,456,418 3,068,410 149,706,297 20,625,153
----------- ----------- ---------- ------------ -----------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS $81,068,286 $12,326,377 $3,096,459 $148,234,166 $20,437,020
----------- ----------- ---------- ------------ -----------
----------- ----------- ---------- ------------ -----------
*Foreign taxes
withheld $ 47,873 $ 6,024 $ 5,402 $ 16,341 $ 1,280
----------- ----------- ---------- ------------ -----------
</TABLE>
------------------------------
(1) Commenced operations on 5/7/99.
(2) Commenced operations on 9/1/99.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
108
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL INTERNATIONAL EMERGING PACIFIC LATIN LARGE CAP
CORE GROWTH(1) SMALL CAP GROWTH(1) COUNTRIES(1) RIM AMERICA GROWTH(1)
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends, net of foreign
taxes* $ 1,038,438 $ 336,315 $ 1,690,682 $ 17,032 $ 61,568 $ 136,679
Interest 433,147 372,947 149,750 8,012 11,310 118,168
Securities lending 304,512 187,373 252,156 2,483 2,288 12,323
----------- ------------ ----------- ---------- ---------- -----------
Total Income 1,776,097 896,635 2,092,588 27,527 75,166 267,170
----------- ------------ ----------- ---------- ---------- -----------
EXPENSES
Advisory fee 1,730,163 1,315,748 2,497,173 25,526 47,846 344,335
Accounting and
administration fees 110,921 79,786 134,018 9,927 4,714 26,367
Custodian fees 190,385 234,384 457,245 82,969 64,389 49,450
Transfer agent fees and
expenses 60,920 45,263 65,754 15,314 14,627 27,614
Distribution and
shareholder servicing
fees 19,059 -- 1 -- -- 82,300
Administrative services 173,017 131,575 199,774 2,430 3,570 45,911
Professional fees 58,478 43,543 68,372 10,052 8,390 14,864
Shareholder reporting 12,781 9,517 14,943 191 324 10,600
Registration fees 20,305 22,164 31,951 5,575 1,944 10,714
Trustees' fees and
expenses 11,141 8,296 13,026 166 251 2,832
Interest and credit
facility fee 15,391 5,098 19,912 5,534 2,378 1,276
Insurance 355 212 522 9 17 62
Miscellaneous 20,832 16,123 26,491 1,893 2,098 8,440
----------- ------------ ----------- ---------- ---------- -----------
Total Expenses 2,423,748 1,911,709 3,529,182 159,586 150,548 624,765
Expenses
(reimbursed)/recouped 35,051 (56,558) (207,942) (118,127) (83,077) (73,763)
----------- ------------ ----------- ---------- ---------- -----------
Net Expenses 2,458,799 1,855,151 3,321,240 41,459 67,471 551,002
----------- ------------ ----------- ---------- ---------- -----------
NET INVESTMENT INCOME
(LOSS) (682,702) (958,516) (1,228,652) (13,932) 7,695 (283,832)
----------- ------------ ----------- ---------- ---------- -----------
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Realized gain (loss)
from:
Securities 16,711,692 54,184,259 26,204,843 1,639,149 1,532,740 3,926,863
Foreign currency
transactions (996,366) (743,502) (1,231,930) (27,714) (18,587) --
----------- ------------ ----------- ---------- ---------- -----------
Net realized gain
(loss) 15,715,326 53,440,757 24,972,913 1,611,435 1,514,153 3,926,863
----------- ------------ ----------- ---------- ---------- -----------
Change in unrealized
appreciation
(depreciation) of:
Investments 66,126,490 63,815,718 66,450,961 158,507 590,679 30,533,124
Other assets and
liabilities
denominated in
foreign currencies (442,508) 103,806 46,542 2,517 250 --
----------- ------------ ----------- ---------- ---------- -----------
Net unrealized
appreciation
(depreciation) 65,683,982 63,919,524 66,497,503 161,024 590,929 30,533,124
----------- ------------ ----------- ---------- ---------- -----------
NET GAIN (LOSS) ON
INVESTMENTS 81,399,308 117,360,281 91,470,416 1,772,459 2,105,082 34,459,987
----------- ------------ ----------- ---------- ---------- -----------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS $80,716,606 $116,401,765 $90,241,764 $1,758,527 $2,112,777 $34,176,155
----------- ------------ ----------- ---------- ---------- -----------
----------- ------------ ----------- ---------- ---------- -----------
*Foreign taxes
withheld $ 114,306 $ 42,290 $ 302,203 $ 2,781 $ 18,085 $ 2,751
----------- ------------ ----------- ---------- ---------- -----------
<CAPTION>
MID CAP SMALL CAP
GROWTH(1) GROWTH(1)
<S> <C> <C>
INVESTMENT INCOME
Dividends, net of foreign
taxes* $ 108,234 $ 163,711
Interest 285,999 321,123
Securities lending 248,155 510,768
------------ ------------
Total Income 642,388 995,602
------------ ------------
EXPENSES
Advisory fee 1,172,637 2,019,763
Accounting and
administration fees 101,086 135,487
Custodian fees 100,448 187,905
Transfer agent fees and
expenses 52,113 70,455
Distribution and
shareholder servicing
fees 1 7,358
Administrative services 156,352 201,977
Professional fees 52,356 68,655
Shareholder reporting 11,443 15,005
Registration fees 26,826 19,830
Trustees' fees and
expenses 9,975 13,080
Interest and credit
facility fee 5,437 19,358
Insurance 379 578
Miscellaneous 21,203 26,617
------------ ------------
Total Expenses 1,710,256 2,786,068
Expenses
(reimbursed)/recouped (131,914) (388,726)
------------ ------------
Net Expenses 1,578,342 2,397,342
------------ ------------
NET INVESTMENT INCOME
(LOSS) (935,954) (1,401,740)
------------ ------------
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Realized gain (loss)
from:
Securities 18,056,987 38,511,301
Foreign currency
transactions -- --
------------ ------------
Net realized gain
(loss) 18,056,987 38,511,301
------------ ------------
Change in unrealized
appreciation
(depreciation) of:
Investments 122,864,215 120,080,481
Other assets and
liabilities
denominated in
foreign currencies -- --
------------ ------------
Net unrealized
appreciation
(depreciation) 122,864,215 120,080,481
------------ ------------
NET GAIN (LOSS) ON
INVESTMENTS 140,921,202 158,591,782
------------ ------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS $139,985,248 $157,190,042
------------ ------------
------------ ------------
*Foreign taxes
withheld -- --
------------ ------------
</TABLE>
------------------------------
(1) Commenced operations on 5/7/99.
(2) Commenced operations on 9/1/99.
--------------------------------------------------------------------------------
109
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
STATEMENT OF OPERATIONS -- CONTINUED
YEAR ENDED MARCH 31, 2000
<TABLE>
<CAPTION>
MINI CAP SHORT HIGH QUALITY HIGH YIELD
GROWTH VALUE(1) CONVERTIBLE(1) INTERMEDIATE BOND(1) BOND(1)
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends, net of foreign
taxes* $ 15,195 $ 623,378 $ 408,698 $ 32,766 $ 52,699 $ 9,543
Interest 102,037 32,590 1,285,443 1,165,970 1,292,443 1,529,817
Securities lending 62,720 -- 6,974 -- -- --
----------- ----------- ----------- ---------- ---------- ----------
Total Income 179,952 655,968 1,701,115 1,198,736 1,345,142 1,539,360
----------- ----------- ----------- ---------- ---------- ----------
EXPENSES
Advisory fee 880,167 246,907 417,743 55,899 84,863 85,360
Accounting and
administration fees 45,754 25,531 35,889 16,729 13,333 9,420
Custodian fees 121,573 40,940 112,825 34,694 48,772 41,190
Transfer agent fees and
expenses 44,231 25,663 25,932 20,533 20,708 14,717
Distribution and
shareholder servicing
fees -- 16,338 -- -- 5,930 --
Administrative services 64,713 32,920 55,699 16,608 18,814 14,227
Professional fees 23,709 11,567 18,327 14,588 6,564 4,922
Shareholder reporting 6,932 6,400 4,005 2,322 2,724 1,076
Registration fees 28,684 14,852 9,281 12,321 9,788 2,309
Trustees' fees and
expenses 5,022 2,204 3,492 1,367 1,251 938
Interest and credit
facility fee 6,187 2,893 15,269 1,070 1,737 7,183
Insurance 855 154 146 93 57 31
Miscellaneous 10,824 7,034 10,899 4,564 5,605 5,473
----------- ----------- ----------- ---------- ---------- ----------
Total Expenses 1,238,651 433,403 709,507 180,788 220,146 186,846
Expenses
(reimbursed)/recouped (130,916) (79,755) (134,536) (113,807) (126,523) (71,322)
----------- ----------- ----------- ---------- ---------- ----------
Net Expenses 1,107,735 353,648 574,971 66,981 93,623 115,524
----------- ----------- ----------- ---------- ---------- ----------
NET INVESTMENT INCOME
(LOSS) (927,783) 302,320 1,126,144 1,131,755 1,251,519 1,423,836
----------- ----------- ----------- ---------- ---------- ----------
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Realized gain (loss)
from:
Securities 42,644,433 (1,851,668) 7,093,353 (133,941) (504,817) 55
Foreign currency
transactions -- -- (4,940) 14,117 8,910 --
----------- ----------- ----------- ---------- ---------- ----------
Net realized gain
(loss) 42,644,433 (1,851,668) 7,088,413 (119,824) (495,907) 55
----------- ----------- ----------- ---------- ---------- ----------
Change in unrealized
appreciation
(depreciation) of:
Investments 22,774,301 (72,647) 17,762,770 (345,042) (387,837) (678,740)
Other assets and
liabilities
denominated in
foreign currencies -- -- -- 694 (36,547) --
----------- ----------- ----------- ---------- ---------- ----------
Net unrealized
appreciation
(depreciation) 22,774,301 (72,647) 17,762,770 (344,348) (424,384) (678,740)
----------- ----------- ----------- ---------- ---------- ----------
NET GAIN (LOSS) ON
INVESTMENTS 65,418,734 (1,924,315) 24,851,183 (464,172) (920,291) (678,685)
----------- ----------- ----------- ---------- ---------- ----------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS $64,490,951 $(1,621,995) $25,977,327 $ 667,583 $ 331,228 $ 745,151
----------- ----------- ----------- ---------- ---------- ----------
----------- ----------- ----------- ---------- ---------- ----------
*Foreign taxes
withheld -- -- -- -- -- --
----------- ----------- ----------- ---------- ---------- ----------
</TABLE>
------------------------------
(1) Commenced operations on 5/7/99.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
110
<PAGE>
(This page intentionally left blank)
--------------------------------------------------------------------------------
111
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
STATEMENT OF CHANGES IN NET ASSETS
YEARS ENDED MARCH 31
<TABLE>
<CAPTION>
WORLDWIDE GROWTH GLOBAL BLUE CHIP
----------------------------------------------
2000(1) 2000 1999
---------------- ------------- -------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income
(loss) $ (753,976) $ (130,041) $ (25,030)
Net realized gain
(loss) 26,641,180 7,868,229 2,439,966
Net unrealized
appreciation
(depreciation) 55,181,082 4,588,189 383,318
------------ ----------- -----------
Net increase
(decrease) in net
assets from
investment
operations 81,068,286 12,326,377 2,798,254
------------ ----------- -----------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Institutional Class -- -- --
Retirement Class -- -- --
From net realized gains
Institutional Class -- (4,422,006) (69,327)
Retirement Class -- -- --
------------ ----------- -----------
Total distributions -- (4,422,006) (69,327)
------------ ----------- -----------
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares
sold
Institutional Class 146,406,133 10,550,201 3,234,669
Retirement Class -- -- --
Distributions
reinvested
Institutional Class -- 4,233,563 69,075
Retirement Class -- -- --
Cost of shares redeemed
Institutional Class (38,743,819) (8,360,095) (2,938,697)
Retirement Class -- -- --
------------ ----------- -----------
Net increase
(decrease) in net
assets from share
transactions 107,662,314 6,423,669 365,047
------------ ----------- -----------
Net Increase
(Decrease) in Net
Assets 188,730,600 14,328,040 3,093,974
NET ASSETS
Beginning -- 10,413,572 7,319,598
------------ ----------- -----------
Ending $188,730,600 $24,741,612 $10,413,572
------------ ----------- -----------
------------ ----------- -----------
Undistributed net
investment income
(loss), ending $ (1,458) $ (23,718) $ (26,611)
------------ ----------- -----------
------------ ----------- -----------
INSTITUTIONAL CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 5,947,950 379,085 194,931
Distributions
reinvested -- 188,410 4,408
Shares redeemed (1,071,221) (300,726) (184,922)
------------ ----------- -----------
Net Institutional
Share Activity 4,876,729 266,769 14,417
------------ ----------- -----------
------------ ----------- -----------
RETIREMENT CLASS --
CAPITAL SHARE ACTIVITY
Shares sold -- -- --
Distributions
reinvested -- -- --
Shares redeemed -- -- --
------------ ----------- -----------
Net Retirement Share
Activity -- -- --
------------ ----------- -----------
------------ ----------- -----------
</TABLE>
------------------------------
(1) Commenced operations on 5/7/99.
(2) Commenced operations on 7/31/98.
(3) Commenced operations on 9/1/99.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
112
<PAGE>
<TABLE>
<CAPTION>
GLOBAL GROWTH & INCOME GLOBAL TECHNOLOGY GLOBAL HEALTH CARE
-------------------------------------------------------------------------------
2000 1999 2000 1999(2) 2000(3)
------------- ------------ --------------- ------------- ------------------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income
(loss) $ 28,049 $ 89,397 $ (1,472,131) $ (25,089) $ (188,133)
Net realized gain
(loss) 2,195,646 270,179 95,422,851 3,644,794 17,760,882
Net unrealized
appreciation
(depreciation) 872,764 247,919 54,283,446 4,357,445 2,864,271
----------- ----------- ------------- ----------- ------------
Net increase
(decrease) in net
assets from
investment
operations 3,096,459 607,495 148,234,166 7,977,150 20,437,020
----------- ----------- ------------- ----------- ------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Institutional Class (47,530) (56,460) -- -- (9,347)
Retirement Class -- -- -- -- --
From net realized gains
Institutional Class (1,330,289) (270,030) (15,053,000) -- --
Retirement Class -- -- -- -- --
----------- ----------- ------------- ----------- ------------
Total distributions (1,377,819) (326,490) (15,053,000) -- (9,347)
----------- ----------- ------------- ----------- ------------
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares
sold
Institutional Class 566,038 174,943 395,262,091 17,468,706 145,842,989
Retirement Class -- -- -- -- --
Distributions
reinvested
Institutional Class 1,362,502 324,756 11,464,659 -- 8,402
Retirement Class -- -- -- -- --
Cost of shares redeemed
Institutional Class (1,034,297) (1,256,256) (158,683,863) (1,351,448) (40,923,812)
Retirement Class -- -- -- -- --
----------- ----------- ------------- ----------- ------------
Net increase
(decrease) in net
assets from share
transactions 894,243 (756,557) 248,042,887 16,117,258 104,927,579
----------- ----------- ------------- ----------- ------------
Net Increase
(Decrease) in Net
Assets 2,612,883 (475,552) 381,224,053 24,094,408 125,355,252
NET ASSETS
Beginning 5,589,458 6,065,010 24,094,408 -- --
----------- ----------- ------------- ----------- ------------
Ending $ 8,202,341 $ 5,589,458 $ 405,318,461 $24,094,408 $125,355,252
----------- ----------- ------------- ----------- ------------
----------- ----------- ------------- ----------- ------------
Undistributed net
investment income
(loss), ending $ (590) $ 32,609 $ (314,873) $ (25,089) $ 350,427
----------- ----------- ------------- ----------- ------------
----------- ----------- ------------- ----------- ------------
INSTITUTIONAL CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 31,689 12,201 3,436,245 600,526 5,339,519
Distributions
reinvested 85,461 23,627 135,503 -- 455
Shares redeemed (56,394) (93,861) (1,194,324) (60,837) (1,284,521)
----------- ----------- ------------- ----------- ------------
Net Institutional
Share Activity 60,756 (58,033) 2,377,424 539,689 4,055,453
----------- ----------- ------------- ----------- ------------
----------- ----------- ------------- ----------- ------------
RETIREMENT CLASS --
CAPITAL SHARE ACTIVITY
Shares sold -- -- -- -- --
Distributions
reinvested -- -- -- -- --
Shares redeemed -- -- -- -- --
----------- ----------- ------------- ----------- ------------
Net Retirement Share
Activity -- -- -- -- --
----------- ----------- ------------- ----------- ------------
----------- ----------- ------------- ----------- ------------
</TABLE>
------------------------------
(1) Commenced operations on 5/7/99.
(2) Commenced operations on 7/31/98.
(3) Commenced operations on 9/1/99.
--------------------------------------------------------------------------------
113
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
STATEMENT OF CHANGES IN NET ASSETS -- CONTINUED
YEARS ENDED MARCH 31
<TABLE>
<CAPTION>
INTERNATIONAL CORE GROWTH INTERNATIONAL SMALL CAP GROWTH
---------------------------------------------------------
2000(1) 2000(1)
------------------------- ------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income
(loss) $ (682,702) $ (958,516)
Net realized gain
(loss) 15,715,326 53,440,757
Net unrealized
appreciation
(depreciation) 65,683,982 63,919,524
------------ ------------
Net increase
(decrease) in net
assets from
investment
operations 80,716,606 116,401,765
------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Institutional Class (145,725) --
Retirement Class (1,855) --
From net realized gains
Institutional Class -- (778,916)
Retirement Class -- --
------------ ------------
Total distributions (147,580) (778,916)
------------ ------------
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares
sold
Institutional Class 284,041,615 233,012,381
Retirement Class 25,716,559 --
Distributions
reinvested
Institutional Class 124,755 712,206
Retirement Class 1,855 --
Cost of shares redeemed
Institutional Class (56,751,676) (79,188,631)
Retirement Class (14,594,931) --
------------ ------------
Net increase
(decrease) in net
assets from share
transactions 238,538,177 154,535,956
------------ ------------
Net Increase
(Decrease) in Net
Assets 319,107,203 270,158,805
NET ASSETS
Beginning -- --
------------ ------------
Ending $319,107,203 $270,158,805
------------ ------------
------------ ------------
Undistributed net
investment income
(loss), ending $ (529,318) $ (1,195,825)
------------ ------------
------------ ------------
INSTITUTIONAL CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 11,515,928 6,870,154
Distributions
reinvested 3,880 20,147
Shares redeemed (1,999,682) (1,612,710)
------------ ------------
Net Institutional
Share Activity 9,520,126 5,277,591
------------ ------------
------------ ------------
RETIREMENT CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 964,480 --
Distributions
reinvested 58 --
Shares redeemed (475,521) --
------------ ------------
Net Retirement Share
Activity 489,017 --
------------ ------------
------------ ------------
</TABLE>
------------------------------
(1) Commenced operations on 5/7/99.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
114
<PAGE>
<TABLE>
<CAPTION>
EMERGING COUNTRIES PACIFIC RIM LATIN AMERICA LARGE CAP GROWTH
--------------------------------------------------------------------------------------------------
2000(1) 2000 1999 2000 1999 2000(1)
------------------ -------------- ------------- -------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income
(loss) $ (1,228,652) $ (13,932) $ (6,756) $ 7,695 $ 9,173 $ (283,832)
Net realized gain
(loss) 24,972,913 1,611,435 (111,135) 1,514,153 (261,412) 3,926,863
Net unrealized
appreciation
(depreciation) 66,497,503 161,024 83,997 590,929 173,802 30,533,124
------------ ----------- ---------- ----------- ---------- ------------
Net increase
(decrease) in net
assets from
investment
operations 90,241,764 1,758,527 (33,894) 2,112,777 (78,437) 34,176,155
------------ ----------- ---------- ----------- ---------- ------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Institutional Class -- -- -- -- (13,199) --
Retirement Class -- -- -- -- -- --
From net realized gains
Institutional Class -- (290,076) -- -- -- --
Retirement Class -- -- -- -- -- --
------------ ----------- ---------- ----------- ---------- ------------
Total distributions -- (290,076) -- -- (13,199) --
------------ ----------- ---------- ----------- ---------- ------------
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares
sold
Institutional Class 235,356,729 3,053,456 122,463 3,619,962 746,937 33,199,870
Retirement Class 438 -- -- -- -- 64,848,074
Distributions
reinvested
Institutional Class -- 275,340 -- -- 13,198 --
Retirement Class -- -- -- -- -- --
Cost of shares redeemed
Institutional Class (25,513,624) (2,075,329) (186,769) (2,230,193) (78,001) (4,706,518)
Retirement Class -- -- -- -- -- (5,750,425)
------------ ----------- ---------- ----------- ---------- ------------
Net increase
(decrease) in net
assets from share
transactions 209,843,543 1,253,467 (64,306) 1,389,769 682,134 87,591,001
------------ ----------- ---------- ----------- ---------- ------------
Net Increase
(Decrease) in Net
Assets 300,085,307 2,721,918 (98,200) 3,502,546 590,498 121,767,156
NET ASSETS
Beginning -- 1,098,864 1,197,064 1,774,329 1,183,831 --
------------ ----------- ---------- ----------- ---------- ------------
Ending $300,085,307 $ 3,820,782 $1,098,864 $ 5,276,875 $1,774,329 $121,767,156
------------ ----------- ---------- ----------- ---------- ------------
------------ ----------- ---------- ----------- ---------- ------------
Undistributed net
investment income
(loss), ending $ (864,040) $ (8,934) $ (4,660) $ (6,720) $ 8,719 $ --
------------ ----------- ---------- ----------- ---------- ------------
------------ ----------- ---------- ----------- ---------- ------------
INSTITUTIONAL CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 13,836,324 141,141 11,462 269,455 75,004 891,596
Distributions
reinvested -- 14,607 -- -- 1,459 --
Shares redeemed (1,170,179) (94,720) (16,908) (167,405) (8,069) (129,801)
------------ ----------- ---------- ----------- ---------- ------------
Net Institutional
Share Activity 12,666,145 61,028 (5,446) 102,050 68,394 761,795
------------ ----------- ---------- ----------- ---------- ------------
------------ ----------- ---------- ----------- ---------- ------------
RETIREMENT CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 28 -- -- -- -- 1,826,395
Distributions
reinvested -- -- -- -- -- --
Shares redeemed -- -- -- -- -- (143,113)
------------ ----------- ---------- ----------- ---------- ------------
Net Retirement Share
Activity 28 -- -- -- -- 1,683,282
------------ ----------- ---------- ----------- ---------- ------------
------------ ----------- ---------- ----------- ---------- ------------
</TABLE>
------------------------------
(1) Commenced operations on 5/7/99.
--------------------------------------------------------------------------------
115
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
STATEMENT OF CHANGES IN NET ASSETS -- CONTINUED
YEARS ENDED MARCH 31
<TABLE>
<CAPTION>
MID CAP GROWTH SMALL CAP GROWTH
--------------------------------
2000(1) 2000(1)
-------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income
(loss) $ (935,954) $ (1,401,740)
Net realized gain
(loss) 18,056,987 38,511,301
Net unrealized
appreciation
(depreciation) 122,864,215 120,080,481
------------ ------------
Net increase
(decrease) in net
assets from
investment
operations 139,985,248 157,190,042
------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Institutional Class -- --
Retirement Class -- --
From net realized gains
Institutional Class -- (4,096,925)
Retirement Class -- (59,712)
------------ ------------
Total distributions -- (4,156,637)
------------ ------------
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares
sold
Institutional Class 164,024,433 229,057,661
Retirement Class 15,448 4,632,423
Distributions
reinvested
Institutional Class -- 3,913,443
Retirement Class -- 59,711
Cost of shares redeemed
Institutional Class (51,633,673) (107,190,111)
Retirement Class -- (1,089,181)
------------ ------------
Net increase
(decrease) in net
assets from share
transactions 112,406,208 129,383,946
------------ ------------
Net Increase
(Decrease) in Net
Assets 252,391,456 282,417,351
NET ASSETS
Beginning -- --
------------ ------------
Ending $252,391,456 $282,417,351
------------ ------------
------------ ------------
Undistributed net
investment income
(loss), ending $ -- $ --
------------ ------------
------------ ------------
INSTITUTIONAL CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 7,728,872 15,406,294
Distributions
reinvested -- 199,564
Shares redeemed (1,648,958) (5,374,314)
------------ ------------
Net Institutional
Share Activity 6,079,914 10,231,544
------------ ------------
------------ ------------
RETIREMENT CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 345 275,474
Distributions
reinvested -- 3,045
Shares redeemed -- (61,809)
------------ ------------
Net Retirement Share
Activity 345 216,710
------------ ------------
------------ ------------
</TABLE>
------------------------------
(1) Commenced operations on 5/7/99.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
116
<PAGE>
<TABLE>
<CAPTION>
MINI CAP GROWTH VALUE CONVERTIBLE SHORT INTERMEDIATE
---------------------------------------------------------------------------------------------
2000 1999 2000(1) 2000(1) 2000 1999
-------------- -------------- -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income
(loss) $ (927,783) $ (867,250) $ 302,320 $ 1,126,144 $ 1,131,755 $ 904,872
Net realized gain
(loss) 42,644,433 5,442,273 (1,851,668) 7,088,413 (119,824) (39,072)
Net unrealized
appreciation
(depreciation) 22,774,301 (12,989,539) (72,647) 17,762,770 (344,348) (23,068)
------------ ------------ ------------ ------------ ------------ -----------
Net increase
(decrease) in net
assets from
investment
operations 64,490,951 (8,414,516) (1,621,995) 25,977,327 667,583 842,732
------------ ------------ ------------ ------------ ------------ -----------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Institutional Class -- -- (180,191) (1,117,941) (1,133,472) (907,270)
Retirement Class -- -- (36,526) -- -- --
From net realized gains
Institutional Class (12,874,595) (4,923,430) -- -- -- --
Retirement Class -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ -----------
Total distributions (12,874,595) (4,923,430) (216,717) (1,117,941) (1,133,472) (907,270)
------------ ------------ ------------ ------------ ------------ -----------
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares
sold
Institutional Class 54,433,243 42,216,905 39,557,331 143,946,204 31,550,914 6,153,060
Retirement Class -- -- 10,605,176 -- -- --
Distributions
reinvested
Institutional Class 11,152,871 4,872,195 162,222 670,389 531,578 907,267
Retirement Class -- -- 36,526 -- -- --
Cost of shares redeemed
Institutional Class (78,574,475) (62,280,044) (14,894,948) (54,820,892) (28,947,587) (2,063,058)
Retirement Class -- -- (2,742,281) -- -- --
------------ ------------ ------------ ------------ ------------ -----------
Net increase
(decrease) in net
assets from share
transactions (12,988,361) (15,190,944) 32,724,026 89,795,701 3,134,905 4,997,269
------------ ------------ ------------ ------------ ------------ -----------
Net Increase
(Decrease) in Net
Assets 38,627,995 (28,528,890) 30,885,314 114,655,087 2,669,016 4,932,731
NET ASSETS
Beginning 53,593,040 82,121,930 -- -- 18,467,293 13,534,562
------------ ------------ ------------ ------------ ------------ -----------
Ending $ 92,221,035 $ 53,593,040 $ 30,885,314 $114,655,087 $ 21,136,309 $18,467,293
------------ ------------ ------------ ------------ ------------ -----------
------------ ------------ ------------ ------------ ------------ -----------
Undistributed net
investment income
(loss), ending $ -- $ (2,148,020) $ 85,603 $ 3,263 $ 14,956 $ (2,869)
------------ ------------ ------------ ------------ ------------ -----------
------------ ------------ ------------ ------------ ------------ -----------
INSTITUTIONAL CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 1,627,656 2,151,115 1,756,417 5,721,713 2,460,442 481,478
Distributions
reinvested 434,640 244,133 7,193 37,603 83,059 70,965
Shares redeemed (2,542,833) (3,025,658) (697,277) (2,353,847) (2,295,789) (161,326)
------------ ------------ ------------ ------------ ------------ -----------
Net Institutional
Share Activity (480,537) (630,410) 1,066,333 3,405,469 247,712 391,117
------------ ------------ ------------ ------------ ------------ -----------
------------ ------------ ------------ ------------ ------------ -----------
RETIREMENT CLASS --
CAPITAL SHARE ACTIVITY
Shares sold -- -- 480,770 -- -- --
Distributions
reinvested -- -- 1,620 -- -- --
Shares redeemed -- -- (128,165) -- -- --
------------ ------------ ------------ ------------ ------------ -----------
Net Retirement Share
Activity -- -- 354,225 -- -- --
------------ ------------ ------------ ------------ ------------ -----------
------------ ------------ ------------ ------------ ------------ -----------
</TABLE>
------------------------------
(1) Commenced operations on 5/7/99.
--------------------------------------------------------------------------------
117
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
STATEMENT OF CHANGES IN NET ASSETS -- CONTINUED
YEARS ENDED MARCH 31
<TABLE>
<CAPTION>
HIGH QUALITY BOND HIGH YIELD BOND
----------------------------------
2000(1) 2000(1)
----------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income
(loss) $ 1,251,519 $ 1,423,836
Net realized gain
(loss) (495,907) 55
Net unrealized
appreciation
(depreciation) (424,384) (678,740)
----------- -----------
Net increase
(decrease) in net
assets from
investment
operations 331,228 745,151
----------- -----------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Institutional Class (1,094,677) (1,398,556)
Retirement Class (149,889) --
From net realized gains
Institutional Class -- --
Retirement Class -- --
----------- -----------
Total distributions (1,244,566) (1,398,556)
----------- -----------
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares
sold
Institutional Class 24,431,234 24,021,970
Retirement Class 3,758,674 --
Distributions
reinvested
Institutional Class 1,093,702 953,475
Retirement Class 149,887 --
Cost of shares redeemed
Institutional Class (4,797,271) (2,770,396)
Retirement Class (1,003,663) --
----------- -----------
Net increase
(decrease) in net
assets from share
transactions 23,632,563 22,205,049
----------- -----------
Net Increase
(Decrease) in Net
Assets 22,719,225 21,551,644
NET ASSETS
Beginning -- --
----------- -----------
Ending $22,719,225 $21,551,644
----------- -----------
----------- -----------
Undistributed net
investment income
(loss), ending $ 15,863 $ 25,280
----------- -----------
----------- -----------
INSTITUTIONAL CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 1,950,011 1,951,452
Distributions
reinvested 90,095 78,264
Shares redeemed (395,420) (226,907)
----------- -----------
Net Institutional
Share Activity 1,644,686 1,802,809
----------- -----------
----------- -----------
RETIREMENT CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 303,597 --
Distributions
reinvested 10,619 --
Shares redeemed (82,441) --
----------- -----------
Net Retirement Share
Activity 231,775 --
----------- -----------
----------- -----------
</TABLE>
------------------------------
(1) Commenced operations on 5/7/99.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
118
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS
------------------------------------------------------------------------
NOTE A -- ORGANIZATION
Nicholas-Applegate Institutional Funds (formerly Nicholas-Applegate Investment
Trust) (the "Trust") is an open-end management investment company. The Trust was
established as a Delaware business trust on December 17, 1992 and consists of
nineteen separate portfolios (collectively the "Funds" and each a "Fund"). Each
Fund's investment objectives, strategies and risks are discussed in the Funds'
current prospectuses. All of the Funds offer Institutional shares ("Class I")
and seven Funds offer Retirement shares ("Class R"). The Class R shares have no
sales charge or distribution fee but have a shareholder servicing fee. The
nineteen Funds offering Class I shares are covered in this report with each
Fund's operations accounted for separately.
REORGANIZATION
On May 7, 1999, the Trust was renamed Nicholas-Applegate Institutional Funds
to be the successor entity to the institutional assets of Nicholas-Applegate
Mutual Funds (NAMF). On that date, substantially all of the institutional assets
of the single-class series of NAMF were transferred to the renamed Trust in a
tax-free exchange for Class I shares of the corresponding Funds of the Trust,
which for accounting purposes is treated as a continuation of the portfolios.
Concurrently, substantially all institutional shareholders of the multi-class
series of NAMF exchanged their shares for corresponding Class I shares of the
respective Funds of the Trust, which has been accounted for as a taxable
exchange and a commencement of operations of those Funds.
The investment objectives, policies and limitations of the Funds of the Trust
were identical in every respect to the corresponding portfolios of the NAMF. The
investment management fees and expense limitations are also identical. The Trust
is authorized to issue an unlimited number of shares.
NOTE B -- SIGNIFICANT ACCOUNTING POLICIES
Significant accounting policies consistently followed by the Funds in
preparing these financial statements are described below. The policies conform
with accounting principles generally accepted in the United States.
SECURITY VALUATIONS
The Funds value equity securities traded on national or international
exchanges and market systems at the last sales price reported by the security's
primary market at the time of daily valuation. If a last sales price is not
available, these securities are valued at the mean between last reported bid and
ask prices. Debt securities are valued at bid prices obtained from independent
pricing services or from one or more dealers making markets in the securities.
Security prices quoted in a foreign currency are translated using the current
U.S. dollar exchange rate. Short-term securities maturing within 60 days are
valued at amortized cost which approximates market value. When market quotations
for securities are not readily available, a fair value is determined by
Management in accordance with procedures established by the Board of Trustees.
SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are accounted for as of trade date. Realized gains and
losses from security transactions are determined on an identified-cost basis.
Dividend income is recorded on the ex-dividend date or, for certain foreign
securities, when the information becomes available to the Funds. Interest income
is recorded on an accrual basis. Discounts and premiums on debt securities are
accreted and amortized on the same basis as used for federal tax reporting.
FOREIGN CURRENCY TRANSACTIONS
At each net asset valuation date, the value of assets and liabilities
denominated in foreign currencies are translated into U.S. dollars using the
current
--------------------------------------------------------------------------------
119
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
--------------------------------------------------------------------------------
exchange rate. Security transactions, income and expenses are converted at the
prevailing exchange rate on the day of the event. The effect of changes in
exchange rates on securities denominated in a foreign currency is included with
the net realized and unrealized gain or loss of the associated security. Other
foreign currency gains or losses are reported separately.
Certain Funds may use forward foreign currency contracts to reduce their
exposure to currency fluctuations of their foreign securities. These contracts
are commitments to purchase or sell a foreign currency at a specified rate on a
future date. When the contract is fulfilled or closed, gains or losses are
realized. Until then, the gain or loss is included in unrealized appreciation or
depreciation of investments. The contract commitment is fully collateralized by
cash or securities of the Fund. Foreign denominated assets and forward currency
contracts may involve more risks than domestic transactions, including currency
risk, political and economic risk, regulatory and market risk. Evaluating and
monitoring such risk exposure is a part of the Funds' management strategy.
FUTURES CONTRACTS
Each Fund may enter into futures contracts involving foreign currency,
interest rates, securities, and securities indices, for hedging purposes only. A
futures contract obligates the seller of the contract to deliver and the
purchaser of the contract to take delivery of the type of foreign currency,
financial instrument or security called for in the contract at a specified
future time for a specified price. Upon entering into such a contract, a Fund is
required to deposit and maintain as collateral such initial margin as required
by the exchange on which the contract is traded. Pursuant to the contract, a
Fund agrees to receive from or pay to the broker an amount equal to the daily
fluctuations in the value of the contract. Such receipts or payments are known
as variation margin and are recorded as unrealized gains or losses by the Fund.
When the contract is closed, the Fund records a realized gain or loss equal to
the difference between the value of the contract at the time it was opened and
the value at the time it was closed.
FUND EXPENSES AND MULTI-CLASS ALLOCATIONS
Each Fund bears expenses incurred specifically on its behalf plus an
allocation of its share of Trust level expenses. Each share offered by a Fund
has equal rights to assets but incurs certain Class specific expenses. The Funds
allocate income, gains and losses, both realized and unrealized, and expenses,
except for Class specific expenses, based on the relative net assets of each
share class.
SECURITIES LENDING
Each Fund may temporarily loan securities up to 30% of its total assets to
brokers, dealers or other financial institutions in exchange for a negotiated
lender's fee. The borrower fully collateralizes the loans with cash.
The market value of securities on loan and the related collateral at March 31,
2000 were:
<TABLE>
<CAPTION>
MARKET VALUE COLLATERAL
FUND (IN 000'S) (IN 000'S)
---- ------------ -----------
<S> <C> <C>
Worldwide Growth.......................... $19,111 $20,030
Global Blue Chip.......................... 1,129 1,163
Global Growth & Income.................... 193 202
Global Technology......................... 45,250 47,295
International Core Growth................. 42,035 44,238
International Small Cap Growth............ 38,902 42,563
Emerging Countries........................ 25,075 26,067
Pacific Rim............................... 67 68
Latin America............................. 383 409
Large Cap Growth.......................... 5,587 5,780
Mid Cap Growth............................ 18,939 19,451
Small Cap Growth.......................... 24,146 24,811
Mini Cap Growth........................... 6,117 6,344
Convertible............................... 29 30
</TABLE>
CREDIT FACILITY
The Trust has a $30 million credit facility available to fund temporary or
emergency borrowing. Each Fund pays its pro-rata share of an annual commitment
fee plus interest on its specific borrowings. On December 31, 1999 International
Core
--------------------------------------------------------------------------------
120
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
--------------------------------------------------------------------------------
Growth Fund borrowed $12,200,000 for four days at an interest rate of 5.158%. On
March 31, 2000 the Global Technology Fund and Mini Cap Fund borrowed a total of
$4,015,000 at an interest rate of 6.610%. These were the only uses of the credit
facility during the periods presented.
FEDERAL INCOME TAXES
The Funds intend 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 shareholders. Accordingly, no provision for federal
income taxes is required. A Fund investing in foreign securities records any
foreign taxes on income and gains on such investments in accordance with the
applicable tax rules. The Funds' tax accounting treatment of loss deferrals,
passive foreign investment companies and expiration of capital loss
carryforwards are different from the financial statement recognition of income
and gains.
Capital loss carryforwards may be used to offset current or future capital
gains until expiration. The following table reflects the capital loss
carryforwards as of March 31, 2000.
<TABLE>
<CAPTION>
CAPITAL LOSS
CARRYFORWARDS EXPIRATION
FUND (IN 000'S) DATE
---- ------------- ----------
<S> <C> <C>
Value.................................... $710 3/31/2008
Short Intermediate....................... 35 3/31/2008
39 3/31/2007
52 3/31/2006
48 3/31/2005
High Quality Bond........................ 279 3/31/2008
</TABLE>
DISTRIBUTIONS TO SHAREHOLDERS
The Funds record distributions to shareholders on the ex-dividend date.
Distributions are determined in accordance with income tax regulations that may
differ from generally accepted accounting principles. Accordingly, the Funds'
capital accounts are periodically reclassified to reflect income and gains
available for distribution under income tax regulations. The Funds make income
and capital gain distributions at least annually. Funds with income objectives
make distributions either quarterly or monthly in accordance with the
prospectuses.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from these
estimates.
NOTE C -- TRANSACTIONS WITH AFFILIATES
Nicholas-Applegate Capital Management, as the Investment Advisor of the Funds,
receives the following annual fees payable monthly based on the average daily
net assets of each Fund.
<TABLE>
<S> <C>
Mini Cap Growth, Emerging Countries
and Latin America................. 1.25%
Small Cap Growth, International Core
Growth, International Small Cap
Growth, Pacific Rim Worldwide
Growth, Global Technology and
Global Healthcare................. 1.00%
Global Growth & Income.............. 0.85%
Global Blue Chip.................... 0.80%
Large Cap Growth, Value, Mid Cap
Growth and Convertible............ 0.75%
High Yield Bond..................... 0.60%
High Quality Bond................... 0.45%
Short Intermediate.................. 0.30%
</TABLE>
The fees are reduced on Mid Cap Growth, Convertible, High Quality Bond, Short
Intermediate, International Core Growth, International Small Cap Growth and
Worldwide Growth when the average net assets exceed $500 million ($250 million
for Short Intermediate). For Short Intermediate Fund and High Quality Bond Fund,
the Investment Advisor has entered into an agreement with Criterion Investment
Management LLC ("the subadvisor").
--------------------------------------------------------------------------------
121
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
--------------------------------------------------------------------------------
The agreeement states that the subadvisor will receive a fee paid by the advisor
at an annualized rate of 0.25% of each of the Fund's daily net assets.
Under an Administrative Services agreement the Investment Advisor provides
operational support services to the Funds at an annual fee on average daily net
assets of 0.10%.
The Investment Advisor has agreed to limit the Fund's expenses to certain
levels through March 31, 2000. Expenses reimbursed by the Investment Advisor
prior to July 24, 1998 may be recouped from the Funds within five years of that
date. Expenses reimbursed by the Investment Advisor from July 24, 1998 through
May 7, 1999 may be recouped from the Funds within five years after the year in
which they are reimbursed. Any expenses reimbursed after May 7, 1999 may be
recouped within three years after the year in which they are reimbursed. The
Investment Advisor will recover such reimbursements to the extent of the
differences between a Fund's actual expenses (exclusive of interest expense,
taxes and brokerage) when they fall below the limit, and the voluntary limit.
<TABLE>
<CAPTION>
EXPENSE LIMIT
-------------------------- UNREIMBURSED
INSTITUTIONAL RETIREMENT AMOUNTS AT
FUND CLASS CLASS 3/31/00
----------------------------- ------------- ---------- -------------
<S> <C> <C> <C>
Worldwide Growth............. 1.35% - $ 326,892
Global Blue Chip............. 1.20% - 254,571
Global Growth & Income....... 1.35% - 313,614
Global Technology............ 1.40% - 87,005
Global Health Care........... 1.40% - 11,329
International Core Growth.... 1.40% 1.65% 236,220
International Small Cap
Growth...................... 1.40% -- 711,894
Emerging Countries........... 1.65% 1.90% 1,021,568
Pacific Rim.................. 1.40% - 259,600
Latin America................ 1.65% - 220,370
Large Cap Growth............. 1.00% 1.25% 139,357
Mid Cap Growth............... 1.00% 1.25% 950,145
Small Cap Growth............. 1.17% 1.42% 1,651,050
Mini Cap Growth.............. 1.56% - 590,567
Value........................ 1.00% 1.25% 311,946
Convertible.................. 1.00% - 671,157
Short Intermediate........... 0.35% - 606,735
High Quality Bond............ 0.45% 0.70% 609,097
High Yield Bond.............. 0.75% - 128,631
</TABLE>
The Class R shares have a shareholder servicing agreement. The shareholder
servicing plan is a compensation plan, which compensates the Distributor for
expenses in connection with non-distribution shareholder services provided by
the Distributor to other financial institutions. The Class R shares pay an
annual fee on average daily net assets of up to 0.25% under the shareholder
servicing agreement.
Certain officers of the Trust are also officers of the Investment Advisor and
Distributor. The Trustees who are not affiliated with the Investment Advisor
receive annual compensation of approximately $18,000 each from the Trust.
NOTE D -- INVESTMENT TRANSACTIONS
The following table presents purchases and sales of securities, excluding
short-term investments, during the year ended March 31, 2000 to indicate the
volume of transactions in each Fund. The tax cost of securities held at March
31, 2000, and the related gross and net unrealized appreciation and
depreciation, provide aggregate information on a tax basis against which future
gains and losses on these investments are measured for distribution purposes.
--------------------------------------------------------------------------------
122
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET
GROSS GROSS UNREALIZED
PURCHASES UNREALIZED UNREALIZED APPRECIATION
(IN SALES TAX COST APPRECIATION DEPRECIATION (DEPRECIATION)
FUND $000'S) (IN $000'S) (IN $000'S) (IN $000'S) (IN $000'S) (IN $000'S)
---- --------- ----------- ----------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Worldwide Growth..... 274,446 278,930 129,842 58,561 3,620 54,941
Global Blue Chip..... 56,445 56,005 18,056 6,788 687 6,101
Global Growth &
Income.............. 19,342 19,893 6,844 1,831 275 1,556
Global Technology.... 716,540 490,693 343,600 85,440 28,928 56,512
Global Health Care... 264,690 167,888 129,396 6,502 5,926 576
Int'l Core Growth.... 425,398 322,135 265,185 75,742 10,739 65,003
Int'l Small Cap
Growth.............. 275,699 217,735 209,004 74,584 13,153 61,431
Emerging Countries... 423,972 409,738 226,839 75,477 10,266 65,211
Pacific Rim.......... 11,041 10,469 3,261 480 210 270
Latin America........ 17,542 16,322 4,568 970 95 875
Large Cap Growth..... 160,433 80,420 92,182 31,095 561 30,534
Mid Cap Growth....... 213,392 232,280 129,946 128,017 5,453 122,564
Small Cap Growth..... 202,313 280,119 159,498 127,283 8,409 118,874
Mini Cap Growth...... 98,660 126,355 56,368 41,247 4,358 36,889
Value................ 55,337 49,781 32,521 1,876 2,412 (536)
Convertible.......... 122,466 119,204 97,431 21,147 3,786 17,361
Short Intermediate
Fixed Income........ 30,281 26,102 23,474 9 270 (261)
High Quality Bond.... 42,191 35,444 24,903 203 608 (405)
High Yield Bond...... 34,546 25,353 22,102 175 860 (685)
</TABLE>
Gains and losses resulting from redemptions-in-kind are included in the
realized gain/loss from securities and foreign currency transactions. During the
period, International Small Cap had a redemption-in-kind valued at $9,697,505.
NOTE E -- FINANCIAL INSTRUMENTS
During the period, several of the Funds have been party to financial
instruments with off-balance sheet risks, including forward foreign currency
contracts and futures contracts, primarily in an attempt to minimize the risk to
the Fund, in respect of its portfolio transactions. These instruments involve
market and/or credit risk in excess of the amount recognized in the Statement of
Assets and Liabilities. Risks arise from the possible inability of
counterparties to meet the terms of their contracts and from unexpected movement
in currencies, securities values and interest rates. The contract amounts
indicate the extent of the Funds' involvement in such contracts.
FORWARDS
When entering a forward currency contract, the Fund agrees to receive or
deliver a fixed quantity of foreign currency for an agreed upon price on an
agreed upon future date.
At March 31, 2000, Global Growth & Income, Short Intermediate and High Quality
Bond had outstanding forward contracts for the purchase and sale of currencies
as set out below. The contracts are reported in the financial statements at the
Fund's net equity, as measured by the difference between the forward foreign
exchange rates at the dates of entry into the contracts and the forward rates at
the reporting date, or the date an offsetting position, if any, has been entered
into.
<TABLE>
<CAPTION>
NET
UNREALIZED
LOCAL SETTLEMENT MARKET APPRECIATION/
CURRENCY DATE VALUE (DEPRECIATION)
-------- --------------- -------- --------------
US$ US$
<S> <C> <C> <C> <C>
GLOBAL GROWTH & INCOME
To Buy:
New Zealand Dollar*..................... 107,000 May 10, 2000 53,155 461
To Sell:
British Pound........................... 55,000 May 10, 2000 87,757 476
New Zealand Dollar*..................... 107,000 May 10, 2000 51,155 (611)
------
Net equity in foreign currency exchange
contracts.............................. 326
======
</TABLE>
--------------------------------------------------------------------------------
123
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET
UNREALIZED
LOCAL SETTLEMENT MARKET APPRECIATION/
CURRENCY DATE VALUE (DEPRECIATION)
-------- --------------- -------- --------------
US$ US$
<S> <C> <C> <C> <C>
SHORT INTERMEDIATE
To Buy:
European Euro*......................... 895,000 May 10, 2000 858,542 (16,096)
To Sell:
European Euro*......................... (895,000) May 10, 2000 (858,542) 16,790
-------
Net equity in foreign currency exchange
contracts. 694
=======
</TABLE>
<TABLE>
<CAPTION>
NET
UNREALIZED
LOCAL SETTLEMENT MARKET APPRECIATION/
CURRENCY DATE VALUE (DEPRECIATION)
-------- --------------- -------- --------------
US$ US$
<S> <C> <C> <C> <C>
HIGH QUALITY BOND
To Buy:
Australian Dollar...................... 340,000 May 10, 2000 206,467 (10,137)
European Euro.......................... 200,000 May 10, 2000 191,853 (9,782)
To Sell:
Australian Dollar...................... 170,000 May 10, 2000 (103,233) 1,223
European Euro.......................... 435,000 May 10, 2000 (417,280) 8,161
European Euro.......................... 115,000 May 10, 2000 (110,315) 3,029
European Euro.......................... 175,000 May 10, 2000 (167,871) 2,325
European Euro.......................... 135,000 May 10, 2000 (129,501) 368
-------
Net equity in foreign currency exchange
contracts............................. (4,813)
=======
</TABLE>
* The Fund has entered into offsetting forward currency contracts.
FUTURES
At March 31, 2000, High Quality Bond had outstanding futures contracts as
follows:
<TABLE>
<CAPTION>
MATURITY VALUE AT UNREALIZED
UNITS DATE OPEN VALUE 3/31/2000 GAIN (LOSS)
----------- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
United States Treasury Bond 12 6/16/2000 $1,133,062 $ 1,172,250 $39,188
United States Treasury Bond (20) 6/16/2000 (1,899,375) (1,961,563) (62,188)
-----------
Total Futures ($ 23,000)
===========
</TABLE>
At March 31, 2000, the following securities, included in the accompanying
schedule of investments, were deposited in a segregated custodian account as
collateral for the futures contracts.
<TABLE>
<CAPTION>
PRINCIPAL VALUE AT
AMOUNT 3/31/2000
--------- ---------
<S> <C> <C>
GNMA Pool # 467362, 6.5%, 12/15/28 $369,963 $346,378
United States Treasury Bond, 8.875%, 8/15/17 250,000 319,843
--------
Total collateral for futures contracts $666,221
========
</TABLE>
NOTE F -- CAPITAL ACTIVITY (UNAUDITED)
The Trust has unlimited shares of no par value beneficial interest authorized.
The following table shows the net assets of the Funds immediately before and
after the reorganization described in Note A. The reorganization, which
represented a change in corporate form, is accounted for by pooling the net
assets and results of operations of the combined Funds.
<TABLE>
<CAPTION>
NET ASSETS
-----------------------
BEFORE AFTER
FUND (IN 000'S) (IN 000'S)
---- ---------- ----------
<S> <C> <C>
Global Blue Chip............................. $ 11,337 $ 11,337
Global Growth & Income....................... 5,688 5,688
Global Technology............................ 29,025 29,025
Pacific Rim.................................. 1,382 1,382
Latin America................................ 4,914 4,914
Mini Cap Growth.............................. 57,541 57,541
Short Intermediate........................... 20,667 20,667
</TABLE>
NOTE G -- SPECIAL MEETINGS OF SHAREHOLDERS
A Special meeting of shareholders of the Latin America Fund (the "Fund") was
held at the offices of the Trust on March 20, 2000. Shareholders of the Fund
were asked to approve a change in the Fund's fundamental investment policies
with respect to diversification of its portfolio securities thereby
reclassifying the Fund from a "diversified" fund to a "non-diversified" fund as
those terms are defined under the Investment Company Act of 1940. In the matter
of approving the change to the Fund's fundamental investment policies,
241,216,506 shares voted in favor, 0 shares voted against and 0 shares abstained
from voting.
--------------------------------------------------------------------------------
124
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
--------------------------------------------------------------------------------
NOTE H -- ADDITIONAL FEDERAL TAX INFORMATION (UNAUDITED)
The amounts which represent income derived from sources within, and taxes paid
to foreign countries or possessions of the United States are as follows:
<TABLE>
<CAPTION>
FOREIGN SOURCE
FUND: INCOME: FTC TOTAL:
----- ------- ----------
<S> <C> <C>
Worldwide Growth $0 $0
Global Blue Chip 0 0
Global Growth & Income 0 0
Global Technology 0 0
Global Health Care 0 0
International Core Growth 1,055,509 131,906
International Small Cap Growth 372,035 39,442
Emerging Countries 0 0
Pacific Rim 19,864 2,340
Latin America 0 0
Large Cap Growth 0 0
Mid Cap Growth 0 0
Small Cap Growth 0 0
Mini Cap Growth 0 0
Value 0 0
Convertible 0 0
Short Intermediate Fixed 0 0
High Quality 0 0
High Yield 0 0
</TABLE>
--------------------------------------------------------------------------------
125
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
--------------------------------------------------------------------------------
The percentage of ordinary dividends paid by the Funds during the year ended
3/31/00, which qualify for the Dividends Received Deduction available to
corporate shareholders was:
<TABLE>
<CAPTION>
FUND: PERCENTAGE: FUND: PERCENTAGE:
----- ----------- ----- -----------
<S> <C> <C> <C>
Worldwide Growth 0.82% Large Cap Growth 3.16%
Global Blue Chip 0.25% Mid Cap Growth 0.59%
Global Growth & Income 0.88% Small Cap Growth 0.41%
Global Technology 0.02% Mini Cap Growth 0.05%
Global Health Care 0.17% Value 100.00%
International Core Growth 0.00% Convertible 4.67%
International Small Cap Growth 0.00% Short Intermediate Fixed 2.63%
Emerging Countries 0.00% High Quality 4.20%
Pacific Rim 0.00% High Yield 0.67%
Latin America 0.00%
</TABLE>
The Funds hereby designate the following approximate amounts as capital gains
distributions for the purpose of the Dividends Paid Deduction:
<TABLE>
<CAPTION>
FUND: AMOUNTS: FUND: AMOUNTS:
----- -------- ----- --------
<S> <C> <C> <C>
Worldwide Growth $0 Large Cap Growth $0
Global Blue Chip 563,278 Mid Cap Growth 0
Global Growth & Income 71,311 Small Cap Growth 0
Global Technology 78,319 Mini Cap Growth 8,634,151
Global Health Care 0 Value 0
International Core Growth 0 Convertible 0
International Small Cap Growth 0 Short Intermediate Fixed 0
Emerging Countries 0 High Quality 0
Pacific Rim 57,199 High Yield 0
Latin America 0
</TABLE>
--------------------------------------------------------------------------------
126
<PAGE>
REPORT OF INDEPENDENT AUDITORS
------------------------------------------------------------------------
ERNST & YOUNG LLP
725 SOUTH FIGUEROA STREET
LOS ANGELES, CALIFORNIA 90017
PHONE: 213 977 3200
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of the following series of
Nicholas-Applegate Institutional Funds: Worldwide Growth Fund, Global Blue Chip
Fund, Global Growth & Income Fund, Global Technology Fund, Global Health Care
Fund, International Core Growth Fund, International Small Cap Growth Fund,
Emerging Countries Fund, Pacific Rim Fund, Latin America Fund, Large Cap Growth
Fund, Mid Cap Growth Fund, Small Cap Growth Fund, Mini Cap Growth Fund, Value
Fund, Convertible Fund, Short Intermediate Fund, High Quality Bond Fund and High
Yield Bond Fund (hereinafter the "Funds") as of March 31, 2000 and the related
statements of operations, the statements of changes in net assets and the
financial highlights for the respective periods indicated therein. These
financial statements and financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of March 31, 2000, by correspondence with
the custodians and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective Funds of Nicholas-Applegate Institutional Funds, named above,
as of March 31, 2000, the results of their operations, changes in their net
assets and the financial highlights for the periods indicated therein, in
conformity with accounting principles generally accepted in the United States.
/s/ Ernst & Young LLP
May 5, 2000
--------------------------------------------------------------------------------
127
<PAGE>
TRUSTEES OF NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
Arthur E. Nicholas
Walter E. Auch
Darlene T. DeRemer
George F. Keane
OFFICERS
John J.P. McDonnell, PRESIDENT
E. Blake Moore, Jr., SECRETARY
C. William Maher, TREASURER
INVESTMENT ADVISER
Nicholas-Applegate Capital Management
DISTRIBUTOR
Nicholas-Applegate Securities
CUSTODIAN
Brown Brothers Harriman & Co., Private Bankers
TRANSFER AGENT
State Street Bank & Trust Company
<PAGE>
NICHOLAS-APPLEGATE-Registered
Trademark-
INSTITUTIONAL FUNDS
600 West Broadway
San Diego, California 92101
800 - 551 - 8643
Nicholas-Applegate Securities, Distributor
ANN300INST
<PAGE>
NICHOLAS-APPLEGATE-Registered
Trademark-
INSTITUTIONAL FUNDS
Annual Report
Retirement Shares
MARCH 31, 2000
<PAGE>
LETTER TO SHAREHOLDERS
------------------------------------------------------------------------
DEAR FELLOW SHAREHOLDER:
We are pleased to bring you the Nicholas-Applegate Institutional Funds Annual
Report for fiscal year ended March 31, 2000. During the period, we commemorated
the close of the millennium amid unparalleled developments in the world's
capital markets. The year also marked a successful celebration of
Nicholas-Applegate's 15th year anniversary.
In the United States, a strong economy, subdued inflation and the robust
growth in technology and telecommunications drove unprecedented gains in the
equity market. 1999 capped the best decade ever for US stock investors. The S&P
500 Index climbed 433.0% or 18.2% on an annualized basis -- for the decade.
Strong returns among technology stocks helped growth stocks significantly
outperform value stocks, especially within the smaller-cap segment. Spurred by
accelerating growth in wireless communications and Internet-related commerce,
technology stocks emerged as investor favorites for the most part of the period.
Despite a sell-off triggered by concerns over high valuations in the sector
toward the end of the fiscal year, we believe technology will continue to play
an important role in driving global economic growth in years to come.
Overseas, signs of economic re-acceleration, corporate restructurings, strong
growth in technology and telecommunications, as well as brisk merger and
acquisition activity boosted returns for stocks in Europe, Japan and emerging
markets. Favorable developments in international markets have created a global
market environment with unmatched opportunities. For instance, in 1970, the US
market accounted for 66% of the world's market capitalization. Today, the United
States represents less than half.
Fixed income markets were negatively affected by rising short-term interest
rates during much of the period. The Federal Reserve raised short-term interest
rates five times in the fiscal year. At the same time, inflation remained
subdued despite investor worries. US economic growth was solid and the Fed
remains committed to fighting inflation -- all positive signs for bonds over the
long-term.
It was in this dynamic market environment that Nicholas-Applegate celebrated
its 15th anniversary in 1999. Over the last 12 months, Nicholas-Applegate has
continued to achieve solid performance results by adhering to our investment
philosophy and process. To ensure continued strong performance and dedicated
client service, we implemented a number of initiatives during the fiscal year.
These include hiring additional talented professionals across various areas of
the firm and enhancing infrastructure to strengthen our position as a leader in
investment technology.
As we continue to sharpen our competitive focus, I believe Nicholas-Applegate
is better positioned to deliver superior long-term performance results and
responsive client service than at any point in our 15-year history.
And as we mark the beginning of a new century, we look forward to the
opportunity to contribute to the success of your investment goals. Thank you for
your support of the Nicholas-Applegate Institutional Funds. We welcome your
comments and look forward to continuing our work with you in the coming years.
Sincerely Yours,
/S/ ART NICHOLAS
Art Nicholas
Chairman
--------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
The Funds' Review and Outlook, Performance and Schedule of
Investments
International Core Growth................................. 1
Emerging Countries........................................ 7
Large Cap Growth.......................................... 12
Mid Cap Growth............................................ 15
Small Cap Growth.......................................... 19
Value..................................................... 27
High Quality Bond......................................... 31
The Funds'
Financial Highlights...................................... 38
Statement of Assets and Liabilities....................... 40
Statement of Operations................................... 42
Statement of Changes in Net Assets........................ 44
Notes to Financial Statements............................. 46
Report of Independent Auditors............................ 52
</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 Institutional Funds Retirement Shares. Distributor: Nicholas-
Applegate Securities.
<PAGE>
INTERNATIONAL CORE GROWTH FUND RETIREMENT SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: LORETTA J. MORRIS, Partner, Portfolio Manager; RANDALL S.
KAHN, CFA, Portfolio Manager; LAWRENCE S. SPEIDELL, CFA, Partner, Director of
Global/Systematic Portfolio Management and Research; ERNESTO RAMOS, PH.D.,
Portfolio Manager; CHRISTOPHER ANGIOLETTI, Portfolio Manager; MELISA A.
GRIGOLITE, Portfolio Manager; PEDRO V. MARCAL, Partner, Portfolio Manager; JON
BORCHARDT, Investment Analyst; JOHN L. BRACKEN, JR., Investment Analyst; DAVID
LOPEZ, Investment Analyst; JACOB POZHARNY, PH.D., Investment Analyst; ROLF
SCHILD, Investment Analyst.
CHIEF INVESTMENT OFFICER: CATHERINE SOMHEGYI
GOAL: The International Core Growth Fund seeks to maximize long-term capital
appreciation through investments primarily in companies located outside the
United States with market capitalizations corresponding to the top 75% of
publicly-traded companies as measured by stock market capitalizations within
each country.
MARKET OVERVIEW: Developed non-US stock markets produced strong results in the
12-month period ended March 31, 2000.
During the fiscal year, the European Central Bank raised interest rates 75
basis points for the 11 members of the European Monetary Union. But higher
interest rates did not dampen accelerating economic growth in Europe where the
investment environment was characterized by corporate restructuring and record
levels of merger and acquisition activity.
The Japanese equity market posted impressive results due to signs of a pick-up
in economic growth, increased consumer confidence and structural reform.
The market succumbed to selling pressure in the first quarter of 2000 due to
profit taking and portfolio positioning in anticipation of Japan's March 31st
fiscal year end. However, for the period as a whole, the MSCI Japan Index
climbed 45.1%.
PERFORMANCE: For the 12-month period ended March 31, 2000, the fund gained
61.3% versus 25.1% for the MSCI EAFE Index.
PORTFOLIO SPECIFICS: Stock selection, especially among Japanese technology
companies, contributed to the fund's outperformance during the period. NTT
Mobile Communications of Japan, a provider of wireless communications, was one
of the fund's top performers.
ARM Holdings PLC in the United Kingdom also performed well. The company
designs reduced instruction set computing (RISC) microprocessors and licenses
and sells its products to Alcatel, Intel, Lucent, Samsung and Sony.
MARKET OUTLOOK: Many of the favorable themes that drove developed
international stock markets during the fiscal year remain in place. As a result,
we believe the prospects for these markets remain compelling. Our bottom-up
stock selection continues to uncover promising investment opportunities in the
developed non-US countries.
--------------------------------------------------------------------------------
1
<PAGE>
INTERNATIONAL CORE GROWTH FUND RETIREMENT SHARES
------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN INTERNATIONAL CORE
GROWTH FUND RETIREMENT SHARES WITH THE MSCI EAFE INDEX.
<TABLE>
<S> <C> <C>
SINCE
1 YEAR ANNUALIZED TOTAL RETURNS INCEPTION
61.32% As of 3/31/00 34.76%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INTERNATIONAL CORE
GROWTH FUND MSCI EAFE
RETIREMENT SHARES INDEX
<S> <C> <C>
12/27/96 $250,000.00 $250,000.00
12/96 252,489.63 249,475.00
1/97 274,481.33 240,743.38
2/97 277,178.42 244,691.57
3/97 282,365.15 245,572.46
4/97 286,307.05 246,873.99
5/97 312,863.07 262,945.49
6/97 330,705.39 277,433.78
7/97 351,867.22 281,928.21
8/97 333,402.49 260,868.17
9/97 357,883.82 275,476.79
10/97 328,215.77 254,292.63
11/97 324,481.33 251,698.84
12/97 328,838.17 253,888.62
1/98 340,871.37 265,491.33
2/98 364,107.88 282,527.91
3/98 385,684.65 291,229.77
4/98 396,887.97 293,536.31
5/98 406,639.00 292,112.66
6/98 411,203.32 294,332.71
7/98 429,460.58 297,305.47
8/98 367,842.32 260,469.33
9/98 350,207.47 252,472.92
10/98 356,639.00 278,780.60
11/98 378,008.30 293,054.16
12/98 398,755.19 304,600.50
1/99 414,107.88 303,686.69
2/99 396,887.97 296,458.95
3/99 409,543.57 308,821.29
4/99 424,273.86 321,328.55
5/99 408,091.29 304,780.45
6/99 440,248.96 316,663.84
7/99 454,356.85 326,068.76
8/99 461,410.79 327,258.91
9/99 468,257.26 330,554.41
10/99 498,962.66 342,950.20
11/99 563,485.48 354,866.00
12/99 672,482.42 386,715.78
1/00 624,551.71 362,144.25
2/00 700,286.38 371,893.17
3/31/00 660,655.36 386,322.62
</TABLE>
The graph above shows the value of a hypothetical $250,000 investment in the
Fund's Class R shares compared with the Morgan Stanley Capital International
Europe, Australasia, Far East Index ("MSCI EAFE") over the periods indicated.
The Fund's Class R shares calculate their performance based upon the historical
performance of their corresponding series of Nicholas-Applegate Mutual Funds
(renamed Pilgrim Mutual Funds), adjusted to reflect all fees and expenses
applicable to the Fund's Class R shares. The Nicholas-Applegate Institutional
Funds' Class R shares were first available on May 21, 1999. Average annual total
return figures include changes in principal value, reinvested dividends, and
capital gain distributions. Absent expense limitations, total returns would have
been slightly lower. Past performance cannot guarantee future results.
The unmanaged MSCI EAFE Index includes approximately 1,000 companies
representing the stock markets of 20 countries in Europe, Australia, New Zealand
and the Far East. The average company has a market capitalization of over $3
billion. The unmanaged Index differs from the Fund in composition, does not pay
management fees or expenses and includes reinvested dividends. One cannot invest
directly in an index.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions, currency volatility and the social,
economic and political climates of countries where the Fund invests. You may
have a gain or loss when you sell your shares.
--------------------------------------------------------------------------------
2
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000
------------------------------------------------------------------------
INTERNATIONAL CORE GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
--------------------------------------------------------------
COMMON STOCK & EQUIVALENTS -- 93.2%
--------------------------------------------------------------
AUSTRALIA -- 0.7%
The News Corp., Ltd. -- ADR.... 39,100 $ 2,199,375
------------
BELGIUM -- 1.3%
Fortis (B)..................... 55,200 1,415,600
Lernout & Hauspie Speech
Products N.V.*............... 23,500 2,596,750
------------
4,012,350
------------
BERMUDA -- 0.1%
FLAG Telecom Holdings, Ltd.*... 19,000 429,875
------------
BRAZIL -- 1.3%
Petroleo Brasileiro S.A. ADR... 56,200 1,529,797
Tele Norte Leste Participacoes
S.A. -- ADR.................. 52,300 1,392,488
Telesp Celular Participacoes
S.A. ADR..................... 23,800 1,349,163
------------
4,271,448
------------
CANADA -- 5.0%
Abitibi-Consolidated, Inc...... 148,400 1,419,075
Anderson Exploration, Ltd.*.... 94,900 1,372,710
Ballard Power Systems, Inc.*... 25,800 2,180,100
Biovail Corp.*................. 41,400 1,834,538
Bombardier, Inc. -- Cl. B...... 67,000 1,682,153
Falconbridge, Ltd.............. 60,200 895,661
Nortel Networks................ 31,200 3,931,199
Precision Drilling Corp.*...... 41,800 1,395,075
QLT PhotoTherapeutics, Inc.*... 23,800 1,314,950
------------
16,025,461
------------
DENMARK -- 1.0%
Tele Denmark AS B Shares....... 34,000 3,058,929
------------
FINLAND -- 2.9%
Helsingin Puhelin OYJ Series
E............................ 31,800 3,073,371
Nokia OYJ -- ADR............... 21,600 4,692,601
Sonera Group OYJ............... 23,300 1,589,688
------------
9,355,660
------------
FRANCE -- 8.9%
Alcatel........................ 8,900 1,952,813
Axa............................ 8,600 1,218,765
Bouygues S.A................... 2,773 2,197,085
Bouygues S.A. -- Rts.*......... 5 24
Dassault Systemes S.A. A Shares
-- ADR....................... 16,100 1,465,100
Genset S.A. -- ADR*............ 23,700 769,880
Lagardere S.C.A................ 35,700 2,898,589
Pechiney S.A. A Shares......... 29,000 1,422,193
Rhodia S.A..................... 93,000 1,664,145
Societe Television Francaise
1............................ 7,400 5,452,416
Total Fina Elf S.A............. 36,107 5,407,197
Vivendi S.A.................... 33,000 3,805,113
------------
28,253,320
------------
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
GERMANY -- 6.3%
Bayerische Motoren Werke AG.... 53,600 $ 1,690,000
EM.TV & Merchandising AG....... 36,100 2,936,248
Epcos AG*...................... 21,400 2,825,917
Intershop Communications AG*... 10,300 5,194,149
MobilCom AG.................... 6,800 962,373
SAP AG......................... 4,400 3,168,297
Siemens AG..................... 9,400 1,353,726
Thyssen Krupp AG*.............. 78,300 1,929,326
------------
20,060,036
------------
HONG KONG -- 1.5%
China Telecom (Hong Kong), Ltd.
-- ADR*...................... 8,600 1,524,350
HSBC Holdings PLC.............. 136,000 1,589,418
Hutchison Whampoa, Ltd......... 96,000 1,732,228
------------
4,845,996
------------
HUNGARY -- 0.4%
Magyar Tavkoziesi -- ADR....... 26,300 1,173,638
------------
INDIA -- 0.2%
Infosys Technologies, Ltd. --
ADR.......................... 2,700 521,100
------------
ITALY -- 3.2%
Alleanza Assicurazioni SpA..... 160,000 1,570,847
Mediaset SpA................... 155,400 3,087,059
Seat-Pagine Gialle SpA......... 270,700 1,341,790
Telecom Italia Mobile SpA...... 178,800 2,193,421
Telecom Italia SpA............. 130,100 1,942,086
------------
10,135,203
------------
JAPAN -- 19.0%
FANUC, Ltd..................... 33,900 3,556,418
Fast Retailing Co., Ltd........ 6,400 2,817,335
Ito-Yokado Co., Ltd............ 25,000 1,789,109
Keyence Corp................... 5,630 2,250,573
Kyocera Corp................... 10,900 1,823,663
Mitsubishi Electric Corp....... 173,000 1,632,760
Mitsui Fudosan Co., Ltd........ 219,000 2,092,527
Murata Manufacturing Co.,
Ltd.......................... 9,000 2,189,343
NEC Corp....................... 71,000 2,097,499
Nikon Corp..................... 47,000 1,805,489
Nippon Steel Corp.............. 773,000 1,846,488
Nippon Telegraph and Telephone
Corp......................... 88 1,398,528
Nomura Securities Co., Ltd..... 112,000 3,658,168
NTT DoCoMo, Inc................ 84 3,447,960
OMRON Corp..................... 56,000 1,594,306
Pioneer Electronics Corp....... 67,000 1,900,941
Promise Co., Ltd............... 27,700 2,136,275
Softbank Corp.................. 3,800 3,390,045
Sony Corp...................... 12,000 1,696,485
Sony Corp. (New Shares)........ 12,000 1,708,185
Sumitomo Bank, Ltd............. 120,000 1,790,084
Sumitomo Corp.................. 180,000 2,183,201
TDK Corp....................... 16,000 2,180,861
Tokyo Electron, Ltd............ 9,000 1,360,113
Toshiba Corp................... 204,000 2,080,476
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
3
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000 -- CONTINUED
--------------------------------------------------------------------------------
INTERNATIONAL CORE GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK & EQUIVALENTS (Continued)
---------------------------------------------------------
JAPAN (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
Toyoda Gosei Co., Ltd.......... 36,000 $ 2,632,477
Toyota Motor Corp.............. 36,000 1,884,854
Yamato Transport Co., Ltd...... 64,000 1,834,544
------------
60,778,707
------------
MEXICO -- 1.2%
Telefonos de Mexico S.A. Series
L -- ADR..................... 57,200 3,832,400
------------
NETHERLANDS -- 8.1%
ASM Lithography Holding N.V. --
ADR*......................... 28,900 3,229,575
Equant N.V.*................... 23,600 1,957,932
Equant N.V. (Regd.)*........... 9,600 816,600
Koninklijke Philips Electronics
N.V. -- ADR.................. 24,600 4,214,288
KPN N.V........................ 37,500 4,293,491
KPNQwest N.V. Series C*........ 40,400 2,149,427
QIAGEN N.V.*................... 5,300 760,736
STMicroelectronics N.V......... 25,100 4,698,405
United Pan-Europe
Communications N.V. A
shares*...................... 55,100 2,574,571
VNU N.V........................ 21,000 1,236,841
------------
25,931,866
------------
PORTUGAL -- 0.7%
Portugal Telecom S.A........... 175,300 2,247,777
------------
RUSSIA -- 0.4%
OAO Lukoil Holding -- ADR...... 19,200 1,198,080
------------
SINGAPORE -- 1.9%
Chartered Semiconductor
Manufacturing, Ltd........... 260,000 2,462,438
Flextronics International,
Ltd.*........................ 52,900 3,726,144
------------
6,188,582
------------
SOUTH KOREA -- 1.8%
Korea Electric Power Corp...... 60,890 1,735,386
Samsung Electronics............ 7,510 2,276,272
SK Telecom Co., Ltd............ 540 1,758,878
------------
5,770,536
------------
SPAIN -- 3.4%
Altadis (ex Tabacalera S.A.)... 237,300 3,179,013
Banco Santander Central Hispano
S.A.......................... 245,000 2,632,767
Endesa S.A..................... 105,700 2,424,430
Telefonica S.A.*............... 106,000 2,677,789
------------
10,913,999
------------
SWEDEN -- 3.8%
LM Ericson Telephone Co. Cl. B.
-- ADR....................... 61,800 5,797,612
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
SWEDEN (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
Netcom AB B shares*............ 25,400 $ 2,190,162
Skandia Forsakrings AB......... 86,000 4,071,065
------------
12,058,839
------------
SWITZERLAND -- 0.4%
UBS AG......................... 4,800 1,261,563
------------
UNITED KINGDOM -- 17.7%
ARM Holdings PLC -- ADR*....... 74,100 4,480,224
BG Group PLC................... 317,700 1,790,366
Billiton PLC................... 380,000 1,783,785
British Aerospace PLC.......... 379,197 2,141,463
British Airways PLC............ 375,200 1,972,244
British Telecom PLC -- ADR..... 157,800 2,957,926
Cable & Wireless PLC........... 112,700 2,117,930
Centrica PLC................... 921,400 3,520,433
CMG PLC*....................... 40,400 3,464,838
Colt Telecom Group PLC*........ 52,700 2,509,558
Energis PLC*................... 21,300 993,232
Invensys PLC*.................. 836,700 3,717,383
Logica PLC..................... 39,500 1,323,931
Marconi Electronics PLC........ 118,700 1,418,322
Nycomed Amersham PLC ORD....... 65,100 531,733
Pearson PLC ORD................ 58,000 2,018,023
Reuters Group PLC -- ADR....... 23,100 2,757,563
Rolls-Royal PLC ORD............ 322,000 1,044,068
Saatchi & Saatchi PLC.......... 87,400 504,734
Shell Transport & Trading
Co........................... 399,900 3,317,394
Shire Pharmaceuticals PLC --
ADR*......................... 42,900 2,198,625
Thus PLC*...................... 132,900 993,292
Vodafone Airtouch PLC.......... 1,591,606 8,848,726
------------
56,405,793
------------
UNITED STATES -- 2.0%
Amdocs, Ltd.*.................. 56,000 4,126,499
Schlumberger Ltd............... 30,800 2,356,200
------------
6,482,699
------------
TOTAL COMMON STOCK & EQUIVALENTS
(Cost: $230,289,962)......................... 297,413,232
------------
--------------------------------------------------------------
PREFERRED STOCK -- 1.2%
--------------------------------------------------------------
BRAZIL -- 0.3%
Banco Bradesco S.A............. 119,136,000 981,763
------------
GERMANY -- 0.9%
ProSieben Media AG............. 23,600 2,698,649
------------
TOTAL PREFERRED STOCK
(Cost: $4,677,192)........................... 3,680,412
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
4
<PAGE>
-------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------------------------------------------
<S> <C> <C>
FOREIGN CORPORATE BOND -- 0.0%
--------------------------------------------------------------
UNITED KINGDOM -- 0.0%
British Aerospace PLC
7.450%, 11/30/03
(Cost: $3)................... $ 2 $ 3
------------
--------------------------------------------------------------
TIME DEPOSIT -- 9.1%
--------------------------------------------------------------
HSBC Holdings PLC
5.625%, 04/03/00
(Cost: $29,094,722).......... 29,094,722 29,094,722
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 103.5%
(Cost: $264,061,879)........................ 330,188,369
LIABILITIES IN EXCESS OF OTHER ASSETS --
(3.5)%...................................... (11,081,166)
------------
NET ASSETS -- 100.0%.......................... $319,107,203
------------
------------
---------------
</TABLE>
<TABLE>
<C> <S>
* Non-income producing securities.
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
5
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF MARCH 31, 2000
------------------------------------------------------------------------
INTERNATIONAL CORE GROWTH FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Advertising..................... 0.2%
Aerospace & Defense............. 1.0
Airlines........................ 0.6
Applications Software........... 0.2
Audio/Video Products............ 1.7
Auto Manufacturers.............. 1.1
Auto Parts & Equipment.......... 0.8
Banking......................... 9.1
Biotechnology................... 0.5
Broadcasting.................... 0.9
Building & Construction......... 0.7
Chemicals....................... 0.5
Computer Services............... 2.0
Computer Software............... 1.0
Computers....................... 2.6
Distribution/Wholesale.......... 0.7
Diversified Financial
Services...................... 3.3
Diversified Manufacturing....... 2.2
Diversified Operations.......... 3.2
Drilling........................ 0.4
Drugs/Pharmaceuticals........... 1.7
Electric........................ 1.8
Electronic
Components/Semiconductors..... 11.1
Electronics..................... 2.6
Insurance....................... 2.1
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Internet Software............... 1.6%
Medical Products................ 0.2
Metals.......................... 0.7
Mining.......................... 0.6
Money Center Banks.............. 1.8
Multimedia...................... 2.2
Oil & Gas Producers............. 4.7
Oil & Gas Services.............. 2.4
Paper & Related Products........ 0.4
Photo Equipment & Supplies...... 0.6
Publishing...................... 0.8
Real Estate Development......... 0.7
Regional/Commercial Banks....... 0.8
Retail - Apparel................ 0.9
Retail - Miscellaneous.......... 0.6
Steel........................... 0.6
Telecommunication Equipment..... 4.5
Telecommunications.............. 21.5
Television...................... 4.3
Tobacco......................... 1.0
Transportation.................. 0.6
Liabilities in Excess of Other
Assets........................ (3.5)
-----
NET ASSETS...................... 100.0%
-----
-----
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
6
<PAGE>
EMERGING COUNTRIES FUND RETIREMENT SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: PEDRO V. MARCAL, Partner, Portfolio Manager; ERNESTO RAMOS,
PH.D., Portfolio Manager; LAWRENCE S. SPEIDELL, CFA, Partner, Director of
Global/Systematic Portfolio Management and Research; JASON CAMPBELL, Portfolio
Manager; JESSICA GONCALVES, Portfolio Manager; THEODORA JAMISON, Investment
Analyst; JOHN MAZUR, Investment Analyst; ANDREW PARMET, Investment Analyst.
CHIEF INVESTMENT OFFICER: CATHERINE SOMHEGYI
GOAL: The Emerging Countries Fund seeks to maximize long-term capital
appreciation through investments in companies located in developing countries
around the world.
MARKET OVERVIEW: Following the economic and currency crises in 1997 and 1998,
structural reform and improving economies paved the way for solid stock market
returns in the world's emerging countries. Although performance weakened in the
third quarter of 1999 after severe earthquakes in Greece, Turkey and Taiwan,
emerging markets rebounded decisively in the six months that followed.
Themes of economic revitalization and restructuring have encouraged continued
investor interest in markets in Asia, Latin America and The Europe, Middle East,
and Africa (EMEA) region. During the period, countries in Asia exhibited signs
that they are on the road to recovery, with most countries expecting real GDP
growth to move into positive territory in 2000. Financial fundamentals in Latin
America continue to improve. And the economies of Eastern Europe are on firm
ground as stronger European Union growth boosts exports throughout the region.
PERFORMANCE: For the 12-month period ended March 31, 2000, the fund gained
75.9% versus 51.5% for the MSCI Emerging Markets Free Index.
PORTFOLIO SPECIFICS: The fund's strong returns during the period can be
attributed to stock selection, particularly in the technology sector.
One of the fund's best-performing stocks was Datacraft Asia of Singapore, an
information technology service provider and the premier Asian systems integrator
for Cisco Systems and Ascend Communications. In the last few years, the company
has benefited from a focus on China.
Infosys Technologies of India, a software contract programmer whose client
list includes blue-chip US companies, was also a major contributor to fund
performance as was Samsung Electronics of South Korea, the world's largest maker
of dynamic random access memory (DRAM) chips.
The fund's holdings were diversified across the world's emerging market
regions throughout the period.
MARKET OUTLOOK: We continue to identify excellent opportunities for growth in
the emerging countries of the world. We are seeing improvements in demand and
productivity in Latin America as technology advances reach the region and are
embraced by individuals and businesses. The outlook for growth among
resource-oriented companies in emerging countries is also improving as prices
stabilize and demand continues to grow. Overall, we believe that emerging
countries will continue to provide opportunities that are best identified
through an investment style focused on stock selection supported by fundamental
research.
--------------------------------------------------------------------------------
7
<PAGE>
EMERGING COUNTRIES FUND RETIREMENT SHARES
------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN EMERGING COUNTRIES
FUND RETIREMENT SHARES WITH THE MSCI EMERGING MARKETS FREE INDEX.
<TABLE>
<S> <C> <C>
ANNUALIZED TOTAL RETURNS
As of 3/31/00 SINCE
1 YEAR 5 YEARS INCEPTION
75.85% 19.31% 15.01%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
EMERGING COUNTRIES FUND MSCI EMF
RETIREMENT SHARES INDEX
<S> <C> <C>
11/28/94 $250,000.00 $250,000.00
11/94 251,782.53 254,738.25
12/94 236,853.83 234,359.19
1/95 217,691.62 209,517.12
2/95 215,463.46 204,069.67
3/95 218,137.25 205,294.09
4/95 230,837.79 214,511.79
5/95 248,440.29 225,923.82
6/95 251,114.08 226,601.59
7/95 267,825.31 231,677.47
8/95 266,265.60 226,209.88
9/95 266,488.41 225,146.69
10/95 253,565.06 216,523.57
11/95 247,994.65 212,669.46
12/95 252,896.61 222,111.98
1/96 275,846.70 237,904.14
2/96 279,857.40 234,121.47
3/96 280,971.48 235,947.61
4/96 298,796.79 245,385.52
5/96 309,046.35 244,281.28
6/96 309,491.98 245,795.83
7/96 297,682.71 229,007.97
8/96 310,383.24 234,870.58
9/96 315,953.65 236,913.95
10/96 307,709.45 230,588.35
11/96 319,741.53 234,462.23
12/96 323,083.78 235,517.31
1/97 346,925.13 251,579.59
2/97 357,620.32 262,347.20
3/97 351,604.28 255,447.47
4/97 354,500.89 255,907.27
5/97 375,668.45 263,226.22
6/97 404,188.95 277,308.82
7/97 423,573.98 281,440.72
8/97 391,042.78 245,641.46
9/97 418,894.83 252,445.73
10/97 352,049.91 211,019.39
11/97 342,023.17 203,317.18
12/97 354,723.71 208,217.12
1/98 334,224.60 191,886.66
2/98 360,962.57 211,915.78
3/98 381,461.68 221,112.93
4/98 393,716.58 218,705.01
5/98 352,718.36 188,733.68
6/98 328,431.37 168,935.51
7/98 343,360.07 174,290.77
8/98 242,869.88 123,903.31
9/98 243,092.69 131,762.49
10/98 263,368.98 145,637.08
11/98 276,960.78 157,749.72
12/98 278,743.32 155,462.35
1/99 287,210.34 152,954.74
2/99 281,417.11 154,442.99
3/99 299,910.87 174,798.58
4/99 333,778.97 196,424.66
5/99 332,219.25 195,281.86
6/99 374,777.18 217,444.40
7/99 366,532.98 211,529.91
8/99 366,310.16 213,454.83
9/99 360,962.57 206,240.06
10/99 367,424.24 210,630.91
11/99 408,422.46 229,517.13
12/99 499,108.73 285,413.34
1/00 491,978.61 259,953.48
2/00 542,557.93 263,479.75
3/31/00 527,406.42 264,770.80
</TABLE>
The graph above shows the value of a hypothetical $250,000 investment in the
Fund's Class R shares compared with the Morgan Stanley Capital International
Emerging Markets Free Index ("MSCI EMF") for the periods indicated. The Fund's
Class R shares calculate their performance based upon the historical performance
of their corresponding series of Nicholas-Applegate Mutual Funds (renamed
Pilgrim Mutual Funds), adjusted to reflect all fees and expenses applicable to
the Fund's Class R shares. The Nicholas-Applegate Institutional Funds' Class R
shares were first available on May 21, 1999. Average annual total return figures
include changes in principal value, reinvested dividends, and capital gain
distributions. Absent expense limitations, total returns would have been
slightly lower. Past performance cannot guarantee future results.
The unmanaged MSCI EMF Index is composed of approximately 900 companies which
represent the stock markets of 25 countries, including South Korea, Brazil and
South Africa. The unmanaged Index differs from the Fund in composition, does not
pay management fees or expenses and includes reinvested dividends. One cannot
invest directly in an index.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions, currency volatility and the social,
economic and political climates of countries where the Fund invests. Emerging
markets involve heightened risks related to the same factors, in addition to
those associated with their relatively small size and lesser liquidity. You may
have a gain or loss when you sell your shares.
--------------------------------------------------------------------------------
8
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000
------------------------------------------------------------------------
EMERGING COUNTRIES FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
--------------------------------------------------------------
COMMON STOCK -- 94.4%
--------------------------------------------------------------
ARGENTINA -- 0.5%
Telecom Argentina Stet-France
Telecom S.A. -- ADR........... 41,100 $ 1,428,225
------------
BRAZIL -- 11.2%
Banco Bradesco S.A.............. 255,502,000 2,105,512
CIA Vale do Rio Doce A*......... 55,500 1,510,745
Electropaulo
Metropolitana-Electricidad de
Sao Paulo S.A.*............... 58,625,000 4,387,636
Embratel Participacoes S.A...... 126,800 3,249,250
Globo Cabo S.A.*................ 118,400 2,220,000
Petroleo Brasileiro S.A......... 21,312,600 5,764,784
Tele Centro Sul Participacoes
S.A. -- ADR................... 44,300 3,588,300
Tele Norte Leste Participacoes
S.A........................... 119,100 3,171,038
Telecomunicacoes Brasileiras
S.A. -- ADR................... 14,200 2,125,563
Telesp Celular Participacoes
S.A. -- ADR................... 99,100 5,617,731
------------
33,740,559
------------
BRITISH VIRGIN ISLANDS -- 0.6%
MIH, Ltd.*...................... 28,300 1,726,300
------------
CZECH REPUBLIC -- 1.6%
Ceske Radiokomunikace -- GDR
144A*......................... 39,700 2,054,475
Cesky Telecom A.S.*............. 127,587 2,804,778
------------
4,859,253
------------
DOMINICAN REPUBLIC -- 0.3%
Tricom S.A. -- ADR*............. 29,800 715,200
------------
EGYPT -- 0.9%
Al-Ahram Beverages Co. -- GDR
144A*......................... 50,900 923,835
Mobinil-Egyptian Mobile Phone
Services*..................... 37,200 1,799,694
------------
2,723,529
------------
GREECE -- 1.4%
Panafon Hellenic Telecom S.A.... 291,200 4,287,127
------------
HONG KONG -- 2.3%
China Telecom (Hong Kong), Ltd
Cl. H*........................ 468,000 4,117,126
Giordano International, Ltd..... 1,177,000 1,428,453
PetroChina Co., Ltd.*........... 8,604,000 1,414,386
------------
6,959,965
------------
HUNGARY -- 2.0%
EGIS............................ 25,500 1,265,743
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
HUNGARY (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
Magyar Tavkozlesi -- ADR........ 67,200 $ 2,998,800
Tiszai Vegyi Kombinat........... 86,900 1,593,403
------------
5,857,946
------------
INDIA -- 9.5%
Gujarat Ambuja Cements, Ltd. --
GDR 144A...................... 109,900 522,025
Himachal Futuristic
Communications, Ltd.*......... 105,200 4,084,114
ICICI Ltd. -- ADR*.............. 65,500 1,473,750
Infosys Technologies, Ltd.*..... 51,020 10,415,721
NIIT, Ltd....................... 150 7,055
Reliance Industries, Ltd........ 683,100 4,926,842
Satyam Computer Services,
Ltd........................... 48,300 4,905,543
Videsh Sanchar Nigam, Ltd.
144A.......................... 63,900 1,710,923
Zee Telefilms, Ltd.............. 24,700 578,911
------------
28,624,884
------------
ISRAEL -- 6.5%
Bank Hapoalim, Ltd.............. 733,100 2,335,067
Bezeq Isreali Telecommunication
Corp., Ltd.................... 2,600 14,051
Check Point Software
Technologies, Ltd.*........... 17,600 3,010,700
Ectel, Ltd.*.................... 25,300 502,838
Gilat Satellite Networks,
Ltd.*......................... 18,300 2,145,675
Leumi Bank Le Israel............ 1,065,000 2,466,598
M-Systems Flash Disk Pioneers,
Ltd.*......................... 18,300 969,900
Orckit Communications, Ltd.*.... 45,100 3,021,700
RADWARE, Ltd.*.................. 33,200 1,286,500
Teva Pharmaceutical Industries,
Ltd........................... 99,600 3,716,325
------------
19,469,354
------------
MALAYSIA -- 3.9%
AMMB Holdings Berhad............ 550,000 2,055,263
Malayan Banking Berhad.......... 688,000 3,023,579
Tenaga Nasional Berhad.......... 1,947,000 6,558,316
------------
11,637,158
------------
MEXICO -- 13.5%
Carso Global Telecom S.A.*...... 2,688,000 8,268,763
Cemex S.A. -- ADR*.............. 59,300 1,341,663
Coca-Cola Femsa S.A. L Shares --
ADR........................... 77,800 1,444,163
Controladora Comercial Mexicana
S.A........................... 1,322,000 1,797,612
Corporacion Interamericana de
Entretenimiento S.A. Cl. B*... 1,366,000 6,858,701
Fomento Economica Mexicano S.A.
-- ADR........................ 30,700 1,381,500
Grupo Financiero Banamex Accival
S.A.*......................... 705,000 3,228,370
Grupo Mexico S.A. B Shares...... 390,000 1,823,726
Grupo Radio Centro S.A.......... 45,500 590,931
Grupo Televisa S.A. -- GDR
144A*......................... 45,200 3,073,600
Telefonos de Mexico S.A. Cl. L
-- ADR*....................... 115,500 7,738,500
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
9
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000 -- CONTINUED
--------------------------------------------------------------------------------
EMERGING COUNTRIES FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK (Continued)
---------------------------------------------------------
MEXICO (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
Tubos de Acero de Mexico S.A. --
ADR........................... 200 $ 3,275
TV Azteca S.A. de C.V. -- ADR... 196,300 2,895,425
------------
40,446,229
------------
POLAND -- 1.5%
Optimus S.A. O Shares........... 23,200 1,415,764
Prokom Software S.A............. 24,000 1,365,783
Softbank S.A. -- GDR............ 28,000 1,782,200
------------
4,563,747
------------
REPUBLIC OF CHINA -- 1.0%
United Microelectronics Corp.,
Ltd........................... 478,000 1,853,565
Yizheng Chemical Fibre Co.,
Ltd.*......................... 6,333,000 1,211,863
------------
3,065,428
------------
RUSSIA-- 2.9%
Golden Telecom, Inc.*........... 27,800 1,264,900
OAO Lukoil Holding.............. 56,100 3,500,640
Surgutneftegaz.................. 124,600 1,794,240
Vimpel-Communications -- ADR*... 51,500 2,179,094
------------
8,738,874
------------
SINGAPORE -- 2.6%
Datacraft Asia, Ltd............. 502,000 4,693,700
International Press Softcom,
Ltd.*......................... 2,097,000 1,005,285
Natsteel Electronics, Ltd....... 305,000 1,997,077
------------
7,696,062
------------
SOUTH AFRICA -- 3.6%
DataTec, Ltd.*.................. 150,000 2,658,518
Dimension Data Holdings,
Ltd.*......................... 412,660 3,675,794
Impala Platinum Holdings,
Ltd........................... 53,500 1,855,539
Ixchange Technology Holdings,
Ltd.*......................... 279,700 1,100,424
M-Cell, Ltd..................... 271,600 1,493,904
------------
10,784,179
------------
SOUTH KOREA -- 10.6%
Cybertek Holdings, Inc.*........ 16,560 672,738
Hanwha Chemical Corp.*.......... 179,830 1,374,860
Housing & Commercial Bank....... 7,369 143,346
Jang Media Interactive Corp..... 10,210 693,753
Korea Electric Power Corp....... 64,050 1,825,447
Korea Next Education Service,
Inc.*......................... 4,970 714,979
LG Home Shopping, Inc........... 6,180 659,796
Mirae Co........................ 169,530 950,994
Pohang Iron & Steel Co., Ltd.
.............................. 4,890 471,192
Pohang Iron & Steel Co., Ltd. --
ADR........................... 73,300 2,015,750
Samsung Electronics............. 47,887 14,514,495
SEROME Technology, Inc.......... 12,970 661,848
SK Telecom Co., Ltd............. 1,950 6,351,504
Turbo Tek Co., Ltd.............. 31,670 667,642
------------
31,718,344
------------
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
TAIWAN -- 11.1%
Accton Technology Corp.*........ 341,000 $ 1,333,520
Ambit Microsystems Corp......... 152,000 1,793,230
Asustek Computer, Inc........... 176,800 2,213,631
Choice Lithograph, Inc.*........ 876,000 762,866
D-Link Corp..................... 656,000 2,845,613
Hon Hai Precision Industry Co.,
Ltd.*......................... 470,800 5,461,465
Systex Corp.*................... 461,000 4,453,960
Taiwan Semiconductor -- ADR*.... 1,201,000 8,090,864
Windbond Electronics Corp. --
GDR 144A*..................... 113,500 3,385,138
Yageo Corp. -- GDR 144A......... 104,000 765,565
Zyxel Communications Corp....... 443,000 2,256,490
------------
33,362,342
------------
TURKEY -- 3.8%
Arcelik A.S..................... 19,782,000 1,108,423
Dogan Sirketler Grubu Holding
A.S.*......................... 55,653,100 2,031,652
Dogan Yayin Holding A.S.*....... 73,414,700 1,776,313
Hurriyet Gazetecilik ve
Matbaacilik A.S............... 83,707,000 1,883,212
Turkiye Garanti Bankasi A.S.*... 200,000,000 2,546,906
Yapi ve Kredi Bankasi........... 80,535,000 2,153,708
------------
11,500,214
------------
UNITED KINGDOM -- 0.6%
Antofagasta Holdings PLC........ 302,100 1,898,844
------------
UNITED STATES -- 2.5%
Amdocs, Ltd.*................... 18,500 1,363,219
Comverse Technology, Inc.*...... 17,300 3,269,700
IMPSAT Fiber Networks, Inc.*.... 106,100 2,970,800
------------
7,603,719
------------
TOTAL COMMON STOCK
(Cost: $216,956,521)......................... 283,407,482
------------
<CAPTION>
PRINCIPAL
AMOUNT
--------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 2.9%
--------------------------------------------------------------
Citibank Nassau
5.625%, 04/03/00
(Cost: $8,642,692)............ $ 8,642,692 8,642,692
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 97.3%
(Cost: $225,599,213)........................ 292,050,174
OTHER ASSETS IN EXCESS OF LIABILITIES --
2.7%.......................................... 8,035,133
------------
NET ASSETS -- 100.0%.......................... $300,085,307
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
10
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF MARCH 31, 2000
------------------------------------------------------------------------
EMERGING COUNTRIES FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Appliances...................... 0.4%
Banking & Investments........... 8.3
Beverages....................... 0.8
Broadcasting.................... 1.2
Building Materials.............. 0.6
Chemicals....................... 3.0
Computers....................... 4.6
Computer Services............... 1.3
Computer Software............... 5.8
Diversified Financial
Services...................... 3.0
Diversified Operations.......... 1.1
Drugs/Pharmaceuticals........... 1.7
Electric........................ 4.3
Electronic
Components/Semiconductors..... 5.8
Electronics..................... 6.6
Entertainment................... 2.3
Internet Content................ 0.2
Internet Software............... 1.3
Metals.......................... 1.2%
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Mining.......................... 1.1
Miscellaneous Manufacturing..... 0.5
Networking Products............. 2.3
Oil & Gas Producers............. 4.2
Power Equipment................. 0.6
Printing........................ 0.3
Publishing...................... 0.6
Retail-Apparel.................. 0.5
Retail-Hypermarkets............. 0.6
Retail-Miscellaneous............ 0.2
Steel........................... 0.8
Telecommunications.............. 26.1
Telecommunications Equipment.... 3.5
Television...................... 2.5
Other Assets in Excess of
Liabilities................... 2.7
-----
NET ASSETS...................... 100.0%
-----
-----
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
11
<PAGE>
LARGE CAP GROWTH FUND RETIREMENT SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: ANDREW B. GALLAGHER, Partner, Portfolio Manager; WILLIAM H.
CHENOWETH, CFA, Partner, Portfolio Manager; KENNETH LEE, Portfolio Manager;
TRISHA C. SCHUSTER, CFA, Portfolio Manager; EVAN LUNDQUIST, Investment Analyst;
THOMAS J. SMITH, CFA, Investment Analyst; LIANNE NELSON, Investment Analyst.
CHIEF INVESTMENT OFFICER: CATHERINE SOMHEGYI
GOAL: The Large Cap Growth Fund seeks to maximize long-term capital
appreciation by investing primarily in stocks from a universe of large US
companies with market capitalizations corresponding to the upper 90% of the
Russell 1000 Growth Index at time of purchase.
MARKET OVERVIEW: US large-cap stocks delivered impressive results in the
12-month period ended March 31, 2000. Returns were driven by many factors,
including:
- The continuation of the longest economic expansion in US history sustained
by strong corporate profits, high levels of consumer spending, productivity
gains and low inflation
- Exceptional returns for technology stocks
- Massive cash flows into mutual funds
The Federal Reserve raised interest rates on five separate occasions by a
total of 1.25% during the period. Amid interest rate worries, the market
suffered a broad-based decline in the third quarter of 1999. However, investors
ultimately perceived these rate hikes as a positive sign that the Fed remains
vigilant in keeping economic growth on track and inflation under control. As a
result, stocks--particularly growth issues--rebounded strongly in the six months
that followed.
PERFORMANCE: From April 1, 1999 through March 31, 2000, the fund was up 85.0%
versus 34.0% for the Russell 1000 Growth Index.
PORTFOLIO SPECIFICS: The fund's outstanding performance was due to stock
selection, particularly in the technology sector. The best-performing stocks
during the period included technology names such as Qualcomm, Oracle, Sun
Microsystems, and Nokia. In other industries, Genentech, Corning, and Sony also
performed well.
MARKET OUTLOOK: Despite lingering concerns over higher interest rates, a
number of factors support the case for continued appreciation among large-cap
stocks:
- Ongoing US economic expansion and productivity gains
- Low inflation
- Positive outlook for corporate earnings
In this environment, we are optimistic that the application of our strict
investment philosophy will lead us to find high-growth companies with strong
fundamentals. As a result, we are confident about the outlook for the Large Cap
Growth Fund.
--------------------------------------------------------------------------------
12
<PAGE>
LARGE CAP GROWTH FUND RETIREMENT SHARES
------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN LARGE CAP GROWTH FUND
RETIREMENT SHARES WITH THE RUSSELL 1000 GROWTH INDEX.
<TABLE>
<S> <C> <C>
SINCE
1 YEAR ANNUALIZED TOTAL RETURNS INCEPTION
85.04% As of 3/31/00 65.19%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LARGE CAP GROWTH FUND RUSSELL 1000
RETIREMENT SHARES GROWTH INDEX
<S> <C> <C>
12/27/96 $250,000.00 $250,000.00
12/96 247,420.02 246,184.68
1/97 272,445.82 263,452.07
2/97 267,801.86 261,660.59
3/97 260,061.92 247,499.52
4/97 269,865.84 263,933.49
5/97 300,051.60 282,981.57
6/97 311,145.51 294,300.83
7/97 349,845.20 320,317.03
8/97 341,847.27 301,578.48
9/97 359,133.13 316,419.16
10/97 358,617.13 304,711.65
11/97 354,231.17 317,652.75
12/97 360,423.12 321,210.46
1/98 365,583.08 330,814.66
2/98 399,122.81 355,698.54
3/98 423,632.61 369,876.68
4/98 437,048.50 374,995.77
5/98 425,954.59 364,353.39
6/98 456,656.35 386,670.04
7/98 446,852.43 384,110.28
8/98 372,291.02 326,455.33
9/98 418,472.65 351,533.63
10/98 449,690.40 379,796.93
11/98 492,518.06 408,699.48
12/98 577,915.38 445,564.17
1/99 642,930.86 471,718.79
2/99 629,256.97 450,161.24
3/99 694,014.45 473,884.74
4/99 730,134.16 474,500.79
5/99 735,294.12 459,933.61
6/99 766,253.87 492,128.96
7/99 755,933.95 476,479.26
8/99 751,289.99 484,245.88
9/99 765,479.88 474,076.71
10/99 820,691.43 509,869.50
11/99 915,118.68 536,841.60
12/99 1,131,320.95 592,673.13
1/00 1,082,301.34 564,876.76
2/00 1,240,196.08 592,499.23
3/31/00 1,284,184.73 634,922.18
</TABLE>
The graph above shows the value of a hypothetical $250,000 investment in the
Fund's Class R shares compared with the Russell 1000 Growth Index for the
periods indicated. The Fund's Class R shares calculate their performance based
upon the historical performance of their corresponding series of
Nicholas-Applegate Mutual Funds (renamed Pilgrim Mutual Funds), adjusted to
reflect all fees and expenses applicable to the Fund's Class R shares. The
Nicholas-Applegate Institutional Funds' Class R shares were first available on
May 21, 1999. Average annual total return figures include changes in principal
value, reinvested dividends, and capital gain distributions. Absent expense
limitations, total returns would have been slightly lower. Past performance
cannot guarantee future results.
The unmanaged Russell Growth 1000 Index measures the stock performance of 1000
of the largest U.S. companies. The unmanaged Index differs from the Fund in
composition, does not pay management fees or expenses and includes reinvested
dividends. One cannot invest directly in an index.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions. You may have a gain or loss when you sell
your shares.
--------------------------------------------------------------------------------
13
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000
------------------------------------------------------------------------
LARGE CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
--------------------------------------------------------------
COMMON STOCK -- 98.3%
--------------------------------------------------------------
AUDIO/VIDEO PRODUCTS -- 1.3%
Sony Corp. -- ADR................ 5,700 $ 1,596,713
------------
AUTOMOTIVE -- 2.6%
General Motors Corp. Cl. H*...... 25,500 3,174,750
------------
BANKING -- 6.5%
Chase Manhattan Corp............. 44,500 3,879,844
Citigroup, Inc................... 67,200 3,985,800
------------
7,865,644
------------
BIOTECHNOLOGY -- 4.8%
Amgen, Inc.*..................... 44,000 2,700,500
Genentech, Inc.*................. 20,800 3,161,600
------------
5,862,100
------------
BROADCASTING -- 3.4%
AT&T Corp. -- Liberty Media Group
Cl. A*......................... 68,900 4,082,325
------------
COMPUTER SOFTWARE -- 6.5%
Oracle Corp.*.................... 53,900 4,207,569
Veritas Software Corp.*.......... 28,650 3,753,150
------------
7,960,719
------------
COMPUTERS -- 8.1%
Dell Computer Corp.*............. 78,400 4,228,700
Efficient Networks, Inc.*........ 12,200 1,900,150
Sun Microsystems, Inc.*.......... 39,600 3,710,643
------------
9,839,493
------------
ELECTRONIC COMPONENTS/SEMICONDUCTORS -- 10.3%
Applied Materials, Inc.*......... 43,400 4,090,450
Intel Corp....................... 33,600 4,433,099
Texas Instruments, Inc........... 25,300 4,048,000
------------
12,571,549
------------
ELECTRONICS -- 2.5%
Agilent Technologies, Inc........ 29,500 3,068,000
------------
FINANCE-INVESTMENTS -- 2.6%
Charles Schwab Corp.*............ 54,700 3,107,644
------------
INTERNET SOFTWARE -- 0.3%
Tibco Software, Inc.*............ 4,500 366,750
------------
LEISURE/GAMING -- 3.6%
MGM Grand, Inc................... 181,100 4,346,400
------------
NETWORKING PRODUCTS -- 3.5%
Cisco Systems, Inc.*............. 55,600 4,298,575
------------
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
OIL & GAS PRODUCERS -- 6.8%
Enron Corp....................... 60,500 $ 4,529,937
Schlumberger, Ltd................ 49,500 3,786,750
------------
8,316,687
------------
OIL FIELD SERVICES -- 2.5%
Weatherford International,
Inc.*.......................... 52,600 3,100,113
------------
RETAIL-BUILDING PRODUCTS -- 3.1%
Home Depot, Inc.................. 59,200 3,818,400
------------
RETAIL-DISCOUNT -- 3.6%
Wal-Mart Stores, Inc............. 78,200 4,340,099
------------
TELECOMMUNICATIONS -- 17.8%
AT&T Corp........................ 71,400 4,016,250
CIENA Corp.*..................... 14,500 1,828,813
Corning, Inc..................... 20,800 4,035,200
Nextel Communications, Inc. Cl.
A*............................. 26,500 3,928,625
Nortel Networks Corp............. 32,100 4,044,600
Qwest Communications
International, Inc.*........... 78,200 3,792,700
------------
21,646,188
------------
TELECOMMUNICATIONS EQUIPMENT -- 8.5%
Aether Systems, Inc.*............ 12,000 2,178,000
Motorola, Inc.................... 21,800 3,103,775
Nextel Partners, Inc. Cl. A*..... 35,800 1,038,200
Nokia OYJ -- ADR................. 18,600 4,040,850
------------
10,360,825
------------
TOTAL COMMON STOCK
(Cost: $89,189,850).......................... 119,722,974
------------
<CAPTION>
PRINCIPAL
AMOUNT
--------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 2.5%
--------------------------------------------------------------
Wachovia Bank N.A.
5.625%, 04/03/00
(Cost: $2,992,570)............. $2,992,570 2,992,570
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 100.8%
(COST: $92,182,420)......................... 122,715,544
LIABILITIES IN EXCESS OF OTHER ASSETS --
(0.8%)........................................ (948,388)
------------
NET ASSETS -- 100.0%.......................... $121,767,156
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
14
<PAGE>
MID CAP GROWTH FUND RETIREMENT SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: WILLIAM H. CHENOWETH, CFA, Partner, Portfolio Manager; ANDREW
B. GALLAGHER, Partner, Portfolio Manager; KENNETH LEE, Portfolio Manager; TRISHA
C. SCHUSTER, CFA, Portfolio Manager; EVAN LUNDQUIST, Investment Analyst; THOMAS
J. SMITH, CFA, Investment Analyst; LIANNE NELSON, Investment Analyst.
CHIEF INVESTMENT OFFICER: CATHERINE SOMHEGYI
GOAL: The Mid Cap Growth Fund seeks to maximize long-term capital appreciation
through investments in US securities with market capitalizations corresponding
to the middle 90% of the Russell Midcap Growth Index at the time of purchase.
MARKET OVERVIEW: During the 12-month period ended March 31, 2000, US mid-cap
growth stocks delivered stellar results, providing the strongest returns of any
market-cap segment within the domestic equity market. Performance was driven by
many positive factors, including:
- The continuance of the longest economic expansion in US history supported by
strong corporate profits, high levels of consumer spending, productivity
gains and low inflation
- Exceptional returns for technology stocks
- Massive cash flows into mutual funds
US stock markets succumbed to a broad-based decline in the third quarter of
1999 after the Federal Reserve raised interest rates by a total of 1.25% during
the period. However, the market ultimately perceived these rate hikes as a
positive sign that the Fed is committed to keeping inflation under control. As a
result, stocks -- particularly growth issues -- bounced back strongly in the
last two quarters of the fiscal year.
PERFORMANCE: For the 12-month period ended March 31, 2000, the fund gained
117.2% versus 77.2% for the Russell Midcap Growth Index.
PORTFOLIO SPECIFICS: Stock selection, particularly in technology and
commercial/industrial issues contributed to the fund's outperformance during the
period. Top performers included Network Appliance, a leading data storage and
access company; Veritas Software, a supplier of enterprise data storage
management solutions; and Network Solutions, a worldwide Internet domain name
registration service provider.
On a company-specific basis, we increased the fund's technology exposure
during the period. However, much of the 30% increase in the fund's technology
weighting was due to market appreciation of existing holdings. As such, at March
31, 2000, the fund was only slightly overweighted in technology relative to its
benchmark.
We decreased the fund's holdings in financial services and retail companies as
we identified better candidates in other sectors.
MARKET OUTLOOK: Despite lingering concerns over higher interest rates, a
number of factors support the case for ongoing gains in the mid-cap segment of
the US equity market, including:
- Attractive relative valuations
- Robust US economy and low inflation
- Durability of corporate earnings
In this environment, we are confident that the application of our strict
investment philosophy will lead us to find exciting growth opportunities in the
mid-cap market.
--------------------------------------------------------------------------------
15
<PAGE>
MID CAP GROWTH FUND RETIREMENT SHARES
------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN MID CAP GROWTH FUND
RETIREMENT SHARES WITH THE RUSSELL MID CAP GROWTH INDEX.
<TABLE>
<S> <C> <C>
ANNUALIZED TOTAL RETURNS
As of 3/31/00
1 YEAR 5 YEARS 10 YEARS
117.16% 37.51% 25.65%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
MID CAP GROWTH RUSSELL MID CAP
FUND RETIREMENT SHARES GROWTH INDEX
<S> <C> <C>
9/30/85 $250,000.00 $250,000.00
10/85 263,803.68 n/a
11/85 289,877.30 n/a
12/85 311,349.69 n/a
1/86 325,153.37 254,807.50
2/86 352,760.74 277,271.33
3/86 388,036.81 293,918.70
4/86 386,503.07 297,128.29
5/86 420,245.40 315,779.03
6/86 437,116.56 320,667.29
7/86 414,110.43 295,148.59
8/86 435,582.82 308,539.48
9/86 388,036.81 282,970.82
10/86 426,380.37 300,053.76
11/86 426,380.37 302,871.27
12/86 414,110.43 293,875.99
1/87 478,527.61 334,695.37
2/87 503,067.48 359,630.17
3/87 507,668.71 364,485.18
4/87 501,533.74 355,008.56
5/87 504,601.23 357,298.37
6/87 521,472.39 371,922.59
7/87 558,282.21 388,848.79
8/87 576,687.12 404,892.69
9/87 567,484.66 395,948.61
10/87 409,509.20 287,173.61
11/87 374,233.13 267,197.81
12/87 426,380.37 301,984.30
1/88 412,576.69 305,043.40
2/88 443,251.53 330,063.06
3/88 437,116.56 331,554.94
4/88 441,717.79 333,428.23
5/88 444,785.28 327,526.55
6/88 486,196.32 352,277.73
7/88 467,791.41 338,944.02
8/88 449,386.50 326,033.64
9/88 475,460.12 338,931.53
10/88 480,061.35 336,884.38
11/88 463,190.18 328,775.58
12/88 480,061.35 341,012.60
1/89 509,202.45 361,111.89
2/89 496,932.52 358,150.77
3/89 506,134.97 362,538.11
4/89 532,208.59 383,188.29
5/89 564,417.18 403,547.08
6/89 536,809.82 398,139.55
7/89 598,159.51 429,333.78
8/89 619,631.90 445,953.29
9/89 631,901.84 445,797.21
10/89 613,496.93 427,211.92
11/89 634,969.33 437,324.03
12/89 641,104.29 448,379.58
1/90 602,760.74 406,828.25
2/90 628,834.36 415,192.63
3/90 648,773.01 432,593.36
4/90 633,435.58 420,627.83
5/90 736,196.32 463,885.19
6/90 745,398.77 469,614.17
7/90 720,858.90 454,642.87
8/90 661,042.94 401,772.45
9/90 611,963.19 374,556.39
10/90 598,159.51 367,555.93
11/90 636,503.07 406,895.44
12/90 644,171.78 425,364.42
1/91 707,055.21 457,271.01
2/91 773,006.13 497,529.15
3/91 811,349.69 523,530.02
4/91 791,411.04 518,870.60
5/91 828,220.86 545,104.70
6/91 774,539.88 515,396.50
7/91 832,822.09 541,398.25
8/91 872,699.39 558,316.94
9/91 874,233.13 557,674.88
10/91 900,306.75 570,189.10
11/91 860,429.45 551,384.27
12/91 1,000,000.00 625,418.63
1/92 1,007,668.71 630,984.86
2/92 1,023,006.13 632,347.79
3/92 972,392.64 606,370.94
4/92 944,785.28 594,765.00
5/92 934,049.08 595,924.79
6/92 904,907.98 578,196.03
7/92 938,650.31 603,972.01
8/92 914,110.43 596,066.01
9/92 949,386.50 609,125.82
10/92 1,003,067.48 627,472.69
11/92 1,081,288.34 667,122.69
12/92 1,131,901.84 679,904.76
1/93 1,164,110.43 687,920.84
2/93 1,148,773.01 666,739.75
3/93 1,203,987.73 686,048.54
4/93 1,173,312.88 657,872.52
5/93 1,250,000.00 688,917.53
6/93 1,280,674.85 686,086.08
7/93 1,294,478.53 683,924.91
8/93 1,365,030.67 723,688.30
9/93 1,381,901.84 732,350.85
10/93 1,378,834.36 744,149.02
11/93 1,323,619.63 726,840.12
12/93 1,352,760.74 756,008.21
1/94 1,374,233.13 775,460.30
2/94 1,346,625.77 768,775.83
3/94 1,256,134.97 732,543.43
4/94 1,266,871.17 730,756.02
5/94 1,245,398.77 731,822.93
6/94 1,184,049.08 700,339.90
7/94 1,203,987.73 719,739.32
8/94 1,263,803.68 762,671.77
9/94 1,240,797.55 750,095.31
10/94 1,257,668.71 763,056.96
11/94 1,179,447.85 729,406.15
12/94 1,207,055.21 739,632.42
1/95 1,184,049.08 748,522.80
2/95 1,251,533.74 788,351.70
3/95 1,294,478.53 819,617.73
4/95 1,319,018.40 826,494.32
5/95 1,338,957.06 846,867.41
6/95 1,438,650.31 885,408.34
7/95 1,553,680.98 941,127.09
8/95 1,587,423.31 951,432.43
9/95 1,619,631.90 972,611.32
10/95 1,602,760.74 948,033.43
11/95 1,633,435.58 990,505.33
12/95 1,668,711.66 991,040.20
1/96 1,687,116.56 1,008,541.97
2/96 1,754,601.23 1,046,664.86
3/96 1,754,601.23 1,054,912.58
4/96 1,868,098.16 1,105,875.40
5/96 1,943,251.53 1,128,435.26
6/96 1,895,705.52 1,094,356.52
7/96 1,751,533.74 1,009,434.45
8/96 1,832,822.09 1,064,004.48
9/96 1,947,852.76 1,131,590.04
10/96 1,921,779.14 1,118,350.44
11/96 1,986,196.32 1,184,221.28
12/96 1,938,650.31 1,164,278.99
1/97 2,019,938.65 1,215,798.34
2/97 1,888,036.81 1,189,050.77
3/97 1,780,674.85 1,121,857.51
4/97 1,782,208.59 1,149,343.02
5/97 1,934,049.08 1,252,335.65
6/97 2,007,668.71 1,287,025.35
7/97 2,211,656.44 1,410,193.68
8/97 2,177,914.11 1,396,373.78
9/97 2,320,552.15 1,467,030.29
10/97 2,184,049.08 1,393,532.07
11/97 2,184,049.08 1,408,178.10
12/97 2,256,134.97 1,426,667.47
1/98 2,199,386.50 1,400,987.46
2/98 2,409,509.20 1,532,708.30
3/98 2,530,674.85 1,596,959.43
4/98 2,500,000.00 1,618,646.14
5/98 2,354,294.48 1,552,071.23
6/98 2,501,533.74 1,595,979.32
7/98 2,391,104.29 1,527,607.57
8/98 1,875,766.87 1,235,987.28
9/98 2,059,815.95 1,329,477.36
10/98 2,111,963.19 1,427,326.89
11/98 2,253,067.48 1,523,671.46
12/98 2,579,754.60 1,681,523.82
1/99 2,845,092.02 1,731,969.54
2/99 2,608,895.71 1,647,276.23
3/99 2,930,981.60 1,739,029.51
4/99 3,046,012.27 1,818,329.26
5/99 2,915,644.17 1,794,872.81
6/99 3,148,773.01 1,920,154.93
7/99 3,101,226.99 1,859,094.01
8/99 3,154,907.98 1,839,759.43
9/99 3,151,840.49 1,824,121.47
10/99 3,524,539.88 1,965,126.06
11/99 3,976,993.87 2,168,713.12
12/99 5,154,907.98 2,544,334.24
1/00 5,185,582.82 2,543,825.37
2/00 7,130,368.10 3,078,537.46
3/31/00 6,365,030.67 3,081,616.00
</TABLE>
The graph above shows the value of a hypothetical $250,000 investment in the
Fund's Class R shares compared with the Russell Mid Cap Growth Index for the
periods indicated. The Fund's Class R shares calculate their performance based
upon the historical performance of their corresponding series of
Nicholas-Applegate Mutual Funds (renamed Pilgrim Mutual Funds), adjusted to
reflect all fees and expenses applicable to the Fund's Class R shares. The
Fund's performance includes historical performance of comparable managed
institutional separate accounts managed by the Investment Adviser prior to the
Nicholas-Applegate Mutual Fund's inception. The Nicholas-Applegate Institutional
Funds' Class R shares were first available on May 21, 1999. Average annual total
return figures include changes in principal value, reinvested dividends, and
capital gain distributions. Absent expense limitations, total returns would have
been slightly lower. Past performance cannot guarantee future results.
The unmanaged Russell Mid Cap Growth Index measures the stock performance of the
800 smallest companies in the Russell 1000 Index. The average market
capitalization is $4 billion. The Index incepted on 12/31/85. The unmanaged
Index differs from the Fund in composition, does not pay management fees or
expenses and includes reinvested dividends. One cannot invest directly in an
index.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions. You may have a gain or loss when you sell
your shares.
--------------------------------------------------------------------------------
16
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000
------------------------------------------------------------------------
MID CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
--------------------------------------------------------------
COMMON STOCK -- 98.4%
--------------------------------------------------------------
APPLICATIONS SOFTWARE -- 2.3%
BroadVision, Inc.*............... 42,600 $ 1,911,675
Peregrine Systems, Inc.*......... 59,400 3,983,513
------------
5,895,188
------------
BIOTECHNOLOGY -- 5.1%
Celera Genomics*................. 31,900 2,920,844
Genentech, Inc.*................. 21,000 3,192,000
Immunex Corp.*................... 41,700 2,645,344
Medimmune, Inc.*................. 16,700 2,907,888
Millennium Pharmaceuticals,
Inc.*.......................... 10,200 1,324,725
------------
12,990,801
------------
BROADCASTING -- 2.3%
Hispanic Broadcasting Corp.*..... 12,300 1,392,975
InfoSpace.com, Inc.*............. 18,200 2,646,963
Univision Communications, Inc.
Cl. A*......................... 15,500 1,751,500
------------
5,791,438
------------
COMPUTER HARDWARE -- 2.4%
Brocade Communications Systems,
Inc.*.......................... 19,200 3,442,800
Redback Networks, Inc.*.......... 8,400 2,519,475
------------
5,962,275
------------
COMPUTER SERVICES -- 1.3%
Digitas, Inc.*................... 4,800 117,600
Qlogic Corp.*.................... 23,800 3,224,900
------------
3,342,500
------------
COMPUTER SOFTWARE -- 12.3%
Ariba, Inc.*..................... 12,200 2,557,425
BEA Systems, Inc.*............... 22,100 1,621,588
Citrix Systems, Inc.*............ 40,100 2,656,625
E.piphany, Inc.*................. 5,800 774,663
i2 Technologies, Inc.*........... 12,500 1,526,563
Mercury Interactive Corp.*....... 36,400 2,884,700
Siebel Systems, Inc.*............ 28,900 3,451,744
Universal Access, Inc.*.......... 36,000 1,206,000
VeriSign, Inc.*.................. 26,200 3,916,900
Veritas Software Corp.*.......... 70,175 9,192,924
Vitria Technology, Inc.*......... 11,700 1,179,506
------------
30,968,638
------------
DRUGS/PHARMACEUTICALS -- 5.8%
Affymetrix, Inc.*................ 11,100 1,647,656
Alkermes, Inc.*.................. 18,700 1,729,750
Enzon, Inc.*..................... 27,700 1,043,944
Forest Laboratories, Inc. Cl.
A*............................. 31,400 2,653,300
IDEC Pharmaceuticals Corp.*...... 17,200 1,689,900
Pe Corp.*........................ 44,600 4,303,900
Sepracor, Inc.*.................. 21,900 1,594,594
------------
14,663,044
------------
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
ELECTRIC -- 1.5%
AES Corp.*....................... 28,800 $ 2,268,000
Calpine Corp.*................... 15,200 1,428,800
------------
3,696,800
------------
ELECTRONIC COMPONENTS/SEMICONDUCTORS -- 20.4%
Analog Devices, Inc.*............ 62,600 5,043,213
Applied Micro Circuits Corp.*.... 32,800 4,922,050
Broadcom Corp.*.................. 19,200 4,663,200
Conexant Systems, Inc.*.......... 29,500 2,094,500
Credence Systems Corp.*.......... 23,000 2,877,875
JDS Uniphase Corp.*.............. 83,400 10,054,912
Lam Research Corp.*.............. 63,100 2,843,444
LSI Logic Corp.*................. 74,600 5,417,825
Maxim Integrated Products,
Inc.*.......................... 37,300 2,650,631
PMC-Sierra, Inc.*................ 20,900 4,257,069
Waters Corp.*.................... 32,200 3,067,050
Xilinx, Inc.*.................... 44,800 3,710,000
------------
51,601,769
------------
ELECTRONICS -- 1.2%
Teradyne, Inc.*.................. 37,000 3,043,250
------------
FINANCIAL SERVICES -- 0.4%
eSpeed, Inc.*.................... 19,500 1,021,313
------------
INTERNET CONTENT -- 5.3%
CMGI, Inc.*...................... 32,800 3,716,650
Doubleclick, Inc.*............... 12,200 1,142,225
Inktomi Corp.*................... 6,900 1,345,500
Internet Capital Group, Inc.*.... 22,500 2,032,031
Network Solutions, Inc. Cl. A*... 33,200 5,102,943
------------
13,339,349
------------
INTERNET SOFTWARE -- 3.9%
Covad Communications Group,
Inc.*.......................... 23,800 1,725,500
Exodus Communications, Inc.*..... 34,600 4,861,300
Niku Corp.*...................... 19,900 941,519
Vignette Corp.*.................. 13,700 2,195,425
------------
9,723,744
------------
NETWORKING PRODUCTS -- 3.7%
ArrowPoint Communications,
Inc.*.......................... 5,700 675,361
Network Appliance, Inc.*......... 103,400 8,556,350
------------
............................................... 9,231,711
------------
OIL & GAS SERVICES -- 5.9%
BJ Services Co.*................. 45,700 3,376,087
ENSCO International, Inc.*....... 63,300 2,286,713
National-Oilwell, Inc.*.......... 53,600 1,654,900
Rowan Companies, Inc.*........... 73,600 2,166,600
Smith International, Inc.*....... 33,300 2,580,750
Weatherford International,
Inc.*.......................... 49,100 2,893,831
------------
14,958,881
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
17
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000 -- CONTINUED
--------------------------------------------------------------------------------
MID CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK (Continued)
---------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
PRINTERS & RELATED PRODUCTS -- 1.0%
Lexmark International Group, Inc.
Cl. A*......................... 23,000 $ 2,432,250
------------
PUBLISHING -- 0.7%
TV Guide, Inc.*.................. 37,900 1,821,569
------------
RETAIL -- 0.9%
Starbucks Corp.*................. 51,800 2,321,288
------------
RETAIL-DEPARTMENT STORES -- 0.7%
Kohls Corp.*..................... 17,600 1,804,000
------------
TELECOMMUNICATIONS -- 14.9%
Adaptive Broadband Corp.*........ 20,600 1,102,100
Avanex Corp.*.................... 5,800 880,150
CIENA Corp.*..................... 56,200 7,088,224
Crown Castle International
Corp.*......................... 72,700 2,753,512
EchoStar Communications Corp.*... 34,400 2,717,600
E-Tek Dynamics, Inc.*............ 10,400 2,446,600
Metromedia Fiber Network, Inc.
Cl. A*......................... 37,600 3,635,449
Nextel Communications, Inc. Cl.
A*............................. 35,400 5,248,049
Nextlink Communications, Inc. Cl.
A*............................. 19,200 2,374,800
Voicestream Wireless Corp.*...... 55,500 7,149,093
Winstar Communications, Inc.*.... 37,750 2,265,000
------------
37,660,577
------------
TELECOMMUNICATIONS EQUIPMENT -- 4.9%
Comverse Technology, Inc.*....... 12,000 2,268,000
Nextel Partners, Inc. Cl. A*..... 42,000 1,218,000
RF Micro Devices, Inc.*.......... 32,000 4,300,000
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
TELECOMMUNICATIONS EQUIPMENT (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
Scientific-Atlanta, Inc.*........ 38,100 $ 2,416,968
SDL, Inc.*....................... 10,100 2,150,038
------------
12,353,006
------------
TELECOMMUNICATIONS SERVICES -- 1.5%
McLeodUSA, Inc.*................. 28,300 2,400,194
Time Warner Telecom, Inc. Cl.
A*............................. 16,600 1,319,700
------------
3,719,894
------------
TOTAL COMMON STOCK
(Cost: $125,479,070)......................... 248,343,285
------------
<CAPTION>
PRINCIPAL
AMOUNT
--------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 1.7%
--------------------------------------------------------------
Citibank Nassau
5.625%, 04/03/00
(Cost: $4,167,102)............. $4,167,102 4,167,102
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 100.1%
(COST: $129,646,172)........................ 252,510,387
LIABILITIES IN EXCESS OF OTHER ASSETS --
(0.1)%........................................ (118,931)
------------
NET ASSETS -- 100.0%.......................... $252,391,456
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
18
<PAGE>
SMALL CAP GROWTH FUND RETIREMENT SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: THOMAS BLEAKLEY, Partner, Portfolio Manager; JOHN C. MCCRAW,
Partner, Portfolio Manager; PAUL E. CLUSKEY, Portfolio Manager.
CHIEF INVESTMENT OFFICER: CATHERINE SOMHEGYI
GOAL: The Small Cap Growth Fund seeks to maximize long-term capital
appreciation through investments primarily in US companies with market
capitalizations corresponding to the middle 90% of the Russell 2000 Growth Index
at time of purchase.
MARKET OVERVIEW: The performance of small-cap growth stocks was exceptional
during the 12-month period ended March 31, 2000. In the fourth quarter of 1999,
the Russell 2000 Growth Index returned 33.4%--its best quarter on record. The
following factors positively influenced small-cap stocks during the fiscal year:
- High exposure to Internet companies
- Robust IPO issuance reflecting investor confidence and strong demand
- Increased share buybacks motivated by attractive small-cap valuations
- Significant cash flows into mutual funds
Small-cap growth stocks rebounded sharply in the last six months of the period
following a third quarter 1999 decline triggered by interest rate concerns.
Market leadership was narrow, with a minority of companies responsible for the
majority of returns.
PERFORMANCE: The fund posted a gain of 103.5% for the 12-month period ended
March 31, 2000 versus 59.1% for the Russell 2000 Growth Index.
PORTFOLIO SPECIFICS: The fund's outstanding performance during the period was
due to stock selection, particularly in the technology sector. Among the fund's
best-performing holdings were software companies like Mercury Interactive,
Business Objects, and ISS Group. Other technology names that were major
contributors to the fund's outperformance included InfoSpace, an Internet and
online content provider, and Macrovision, a developer of video scrambling and
copy protection products.
MARKET OUTLOOK: Looking ahead, we are optimistic that small-cap growth stocks
will continue to perform well due to a number of positive factors:
- Attractive relative valuations
- Enduring US economic expansion
- Strong revenue growth and a bright outlook for corporate earnings
Because we expect the market's advance to remain narrow, our company-specific
focus will prove essential in selecting stocks with the most exciting prospects
for growth.
--------------------------------------------------------------------------------
19
<PAGE>
SMALL CAP GROWTH FUND RETIREMENT SHARES
------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN SMALL CAP GROWTH FUND
RETIREMENT SHARES WITH THE RUSSELL 2000 GROWTH INDEX.
<TABLE>
<S> <C> <C>
ANNUALIZED TOTAL RETURNS
As of 3/31/00 SINCE
1 YEAR 5 YEARS INCEPTION
103.52% 31.21% 23.53%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SMALL CAP GROWTH RUSSELL 2000
FUND RETIREMENT SHARES GROWTH INDEX
<S> <C> <C>
10/1/93 $250,000.00 $250,000.00
10/93 250,358.17 257,230.00
11/93 237,106.02 246,825.05
12/93 249,641.83 256,564.76
1/94 256,805.16 263,394.52
2/94 255,014.33 262,235.58
3/94 234,240.69 246,126.45
4/94 234,957.02 246,503.02
5/94 228,510.03 240,978.89
6/94 216,690.54 230,681.86
7/94 222,063.04 233,969.08
8/94 236,747.85 251,137.73
9/94 239,613.18 252,190.00
10/94 242,836.68 254,875.82
11/94 230,300.86 244,563.54
12/94 239,971.35 250,325.46
1/95 229,584.53 245,226.33
2/95 241,762.18 256,558.24
3/95 253,581.66 264,052.31
4/95 257,879.66 268,023.65
5/95 259,670.49 271,534.76
6/95 282,593.12 290,246.22
7/95 309,813.75 312,868.01
8/95 310,530.09 316,728.81
9/95 316,977.08 323,250.25
10/95 304,441.26 307,349.57
11/95 317,693.41 320,965.16
12/95 324,498.57 328,077.75
1/96 319,842.41 325,361.26
2/96 339,183.38 340,197.74
3/96 349,212.03 346,923.45
4/96 385,386.82 373,556.76
5/96 406,876.79 392,720.22
6/96 381,805.16 367,193.41
7/96 337,750.72 322,359.09
8/96 367,836.68 346,223.33
9/96 392,191.98 364,053.84
10/96 375,000.00 348,363.12
11/96 378,581.66 358,047.61
12/96 384,312.32 365,029.54
1/97 388,968.48 373,863.25
2/97 347,063.04 351,281.91
3/97 328,080.23 326,491.95
4/97 323,065.90 322,704.64
5/97 374,283.67 371,207.15
6/97 401,146.13 383,791.07
7/97 429,799.43 403,441.17
8/97 438,037.25 415,544.41
9/97 478,868.19 448,704.85
10/97 444,842.41 421,737.69
11/97 427,650.43 411,683.47
12/97 429,083.09 411,914.01
1/98 419,054.44 406,435.55
2/98 456,303.72 442,319.75
3/98 481,733.52 460,875.06
4/98 481,375.36 463,700.22
5/98 443,409.74 430,012.40
6/98 459,885.39 434,407.13
7/98 420,487.11 398,134.13
8/98 318,409.74 306,244.78
9/98 351,361.03 337,924.93
10/98 356,017.19 354,901.73
11/98 393,266.48 382,442.10
12/98 445,916.91 417,053.11
1/99 489,971.35 435,820.50
2/99 437,679.08 395,942.93
3/99 484,598.85 410,038.50
4/99 512,893.98 446,244.90
5/99 492,478.51 446,958.89
6/99 554,083.09 470,513.62
7/99 556,232.09 455,974.75
8/99 551,575.93 438,921.29
9/99 567,335.24 447,392.48
10/99 621,418.34 458,845.72
11/99 702,604.32 507,345.72
12/99 860,845.25 596,790.77
1/00 840,062.46 591,240.61
2/00 1,130,292.37 728,822.30
3/31/00 986,271.24 652,223.08
</TABLE>
The graph above shows the value of a hypothetical $250,000 investment in the
Fund's Class R shares compared with the Russell 2000 Growth Index for the
periods indicated. The Fund's Class R shares calculate their performance based
upon the historical performance of their corresponding series of
Nicholas-Applegate Mutual Funds (renamed Pilgrim Mutual Funds), adjusted to
reflect all fees and expenses applicable to the Fund's Class R shares. The
Nicholas-Applegate Institutional Funds' Class R shares were first available on
May 21, 1999. Average annual total return figures include changes in principal
value, reinvested dividends, and capital gain distributions. Absent expense
limitations, total returns would have been slightly lower. Past performance
cannot guarantee future results.
The unmanaged Russell 2000 Growth Index is a widely regarded small-cap index of
the 2,000 smallest securities in the Russell 3000 Growth Index, which comprises
the 3,000 largest U.S. securities. The unmanaged Index differs from the Fund in
composition, does not pay management fees or expenses and includes reinvested
dividends. One cannot invest directly in an index.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions. You may have a gain or loss when you sell
your shares.
--------------------------------------------------------------------------------
20
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000
------------------------------------------------------------------------
SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
--------------------------------------------------------------
COMMON STOCK -- 97.8%
--------------------------------------------------------------
ADVERTISING -- 0.3%
24/7 Media, Inc.*............... 4,700 $ 185,650
Avenue A, Inc.*................. 2,000 61,000
Getty Images, Inc.*............. 20,000 718,750
------------
965,400
------------
AEROSPACE/DEFENSE -- 0.6%
Aeroflex, Inc.*................. 14,300 707,850
Newport Corp.................... 4,400 594,000
Photon Dynamics, Inc.*.......... 7,000 483,000
------------
1,784,850
------------
AIRLINES -- 0.1%
Skywest, Inc.................... 7,000 273,875
------------
APPAREL -- 0.3%
Timberland Co. Cl. A*........... 16,400 836,400
------------
APPLICATIONS SOFTWARE -- 2.3%
Exchange Applications, Inc.*.... 17,000 899,672
HNC Software, Inc.*............. 12,500 900,781
National Instruments Corp.*..... 15,950 748,653
OnDisplay, Inc.*................ 3,000 247,875
OpenTV Corp. Cl. A*............. 4,700 556,363
Peregrine Systems, Inc.*........ 42,000 2,816,625
SilverStream Software, Inc.*.... 4,300 317,663
------------
6,487,632
------------
AUCTIONS -- 0.1%
Sothebys Holding, Inc. Cl. A.... 15,100 278,406
------------
AUTO-TRUCKS -- 0.1%
Oshkosh Truck Co. Cl. B......... 7,000 217,438
------------
BATTERY SYSTEMS -- 0.1%
Valence Technology, Inc.*....... 16,400 386,425
------------
BEVERAGES-ALCOHOLIC -- 0.2%
Canandaigua Brands, Inc. Cl.
A*............................ 12,300 627,300
------------
BIOTECHNOLOGY -- 3.5%
Abgenix, Inc.*.................. 6,100 842,563
Affymetrix, Inc.*............... 4,700 697,656
Aurora Biosciences Corp.*....... 13,700 559,988
Cephalon, Inc.*................. 37,500 1,406,250
CuraGen Corp.*.................. 25,000 1,168,750
Diversa Corp.*.................. 2,600 122,200
Gene Logic, Inc.*............... 2,500 105,156
Genzyme Transgenics Corp.*...... 17,300 346,000
Imclone Systems, Inc.*.......... 8,900 684,188
Intermune Pharmaceuticals,
Inc.*......................... 11,100 221,306
Invitrogen Corp.*............... 5,200 301,925
Lynx Therapeutics, Inc.*........ 4,600 136,850
Maxim Pharmaceuticals, Inc.*.... 3,600 168,975
Maxygen, Inc.*.................. 3,600 234,675
Millennium Pharmaceuticals,
Inc.*......................... 12,300 1,597,462
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
BIOTECHNOLOGY (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
Myriad Genetics, Inc.*.......... 500 $ 30,125
Protein Design Labs, Inc.*...... 6,800 540,600
Trimeris, Inc.*................. 9,500 474,406
Visible Genetics, Inc.*......... 9,600 355,200
------------
9,994,275
------------
BROADCASTING -- 3.9%
Citadel Communications Corp.*... 24,400 1,029,375
Cumulus Media, Inc. Cl. A*...... 1,700 24,438
Emmis Communications Corp. Cl.
A*............................ 44,600 2,073,900
Entercom Communications
Corp.*........................ 21,000 1,071,000
Pegasus Communications Corp. Cl.
A*............................ 17,200 2,420,899
Price Communications Corp.*..... 25,300 581,900
Radio One, Inc.*................ 11,400 759,525
Saga Communications, Inc. Cl.
A*............................ 26,825 513,028
SBS Broadcasting S.A.*.......... 15,100 928,650
Sirius Satellite Radio, Inc.*... 16,700 951,900
TCI Satellite Entertainment,
Inc.*......................... 11,500 219,938
XM Satellite Radio Holdings,
Inc.*......................... 10,300 359,213
------------
10,933,766
------------
CHEMICALS -- 0.5%
Georgia Gulf Corp............... 18,700 486,200
Spartech Corp................... 8,300 285,313
Symyx Technologies*............. 2,000 86,250
Uniroyal Technology Corp.*...... 9,600 451,200
------------
1,308,963
------------
COMMUNICATIONS SOFTWARE -- 0.7%
Apropos Technology, Inc.*....... 1,700 62,900
AVT Corp.*...................... 32,400 382,725
Puma Technology, Inc.*.......... 27,400 1,387,125
Witness Systems, Inc.*.......... 7,800 236,925
------------
2,069,675
------------
COMPUTER SERVICES -- 2.2%
Aspen Technology, Inc.*......... 15,900 641,962
eLoyalty Corp.*................. 12,100 288,888
Entrust Technologies, Inc.*..... 13,700 1,165,568
Inforte Corp.*.................. 1,100 53,900
Jacada, Ltd.*................... 2,900 42,413
McAfee.com Corp. Cl. A*......... 8,300 429,006
M-Systems Flash Disk Pioneers,
Ltd.*......................... 16,300 863,900
MTI Technology Corp.*........... 11,700 308,588
Predictive Systems, Inc.*....... 2,900 132,131
QRS Corp.*...................... 9,000 677,250
Silicon Storage Technology,
Inc.*......................... 4,500 332,438
SonicWALL, Inc.*................ 15,500 1,032,687
Technology Solutions Co.*....... 16,300 148,738
------------
6,117,469
------------
COMPUTER SOFTWARE -- 8.0%
BindView Development Corp.*..... 42,200 1,310,838
Broadbase Software, Inc.*....... 11,500 917,125
Business Objects S.A. -- ADR*... 34,500 3,432,749
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
21
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000 -- CONTINUED
--------------------------------------------------------------------------------
SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK (Continued)
---------------------------------------------------------
COMPUTER SOFTWARE (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
E.Piphany, Inc.*................ 2,400 $ 320,550
Harbinger Corp.*................ 48,100 1,400,913
ISS Group, Inc.*................ 33,900 3,949,349
Macromedia, Inc.*............... 21,000 1,896,563
Mercury Interactive Corp.*...... 77,100 6,110,174
Metasolv Software, Inc.*........ 3,700 218,531
Mission Critical Software,
Inc.*......................... 9,200 562,350
Pivotal Corp.*.................. 3,700 118,863
Proxicom, Inc.*................. 19,000 841,938
Quest Software, Inc............. 900 101,475
Sagent Technology, Inc.*........ 25,500 734,719
Scient Corp.*................... 2,200 199,513
Selectica, Inc.*................ 2,400 211,800
Transaction Systems Architects,
Inc. Cl. A*................... 9,800 282,975
------------
22,610,425
------------
COMPUTERS -- 1.4%
Affiliated Computer Services,
Inc. Cl. A* .................. 17,300 657,400
Concurrent Computer Corp.*...... 18,500 234,719
Creative Computers, Inc.*....... 19,100 208,906
Extended Systems, Inc.*......... 19,800 2,178,000
Globix Corp.*................... 18,300 697,688
------------
3,976,713
------------
CONSULTING SERVICES -- 0.1%
Management Network Group,
Inc.*......................... 7,200 193,950
------------
CONSUMER SERVICES -- 0.3%
Forrester Research, Inc.*....... 12,900 699,825
Western Gas Resources, Inc...... 9,400 149,225
------------
849,050
------------
CRUISE LINES -- 0.1%
American Classic Voyages Co.*... 11,200 282,100
------------
DATA PROCESSING/MANAGEMENT SOFTWARE -- 2.2%
Advanced Digital Information*... 30,000 1,027,500
Documentum, Inc.*............... 25,200 1,965,600
Factset Research Systems,
Inc........................... 12,500 338,281
Polycom, Inc.*.................. 12,400 981,925
Reynolds & Reynolds Co. Cl. A... 26,200 707,400
TSI International Software,
Ltd.*......................... 14,600 1,212,713
------------
6,233,419
------------
DISTRIBUTION/WHOLESALE -- 0.1%
Brightpoint, Inc.*.............. 22,600 276,850
------------
DIVERSIFIED FINANCIAL SERVICES -- 0.4%
London Pacific Group, Ltd. --
ADR*.......................... 18,400 427,800
Metris Cos., Inc.*.............. 17,600 684,200
------------
1,112,000
------------
DRILLING -- 1.1%
Atwood Oceanics, Inc.*.......... 5,600 371,350
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
DRILLING (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
Marine Drilling Co.*............ 41,500 $ 1,138,656
Nabors Industries*.............. 18,362 712,675
Precision Drilling Corp.*....... 11,400 380,475
Unit Corp.*..................... 9,500 104,500
UTI Energy Corp.*............... 9,200 347,300
------------
3,054,956
------------
DRUGS/PHARMACEUTICALS -- 3.8%
Alkermes, Inc.*................. 16,600 1,535,500
Alpharma, Inc. Cl. A............ 19,100 701,925
Antigenics, Inc.*............... 11,600 236,350
Celgene Corp.*.................. 6,500 647,156
Cubist Pharmaceuticals, Inc.*... 6,000 251,250
IDEC Pharmaceuticals Corp.*..... 20,500 2,014,125
Jones Medical Industries,
Inc........................... 71,950 2,185,481
Medarex, Inc.*.................. 2,000 100,500
Medicis Pharmaceutical Corp. Cl.
A*............................ 32,400 1,296,000
NBTY, Inc.*..................... 17,200 235,425
Pharmacopeia, Inc.*............. 13,700 671,300
Titan Pharmaceuticals, Inc.*.... 5,100 158,738
United Therapeutics Corp.*...... 7,800 606,450
------------
10,640,200
------------
E-COMMERCE -- 0.1%
PurchasePro.com, Inc.*.......... 3,300 239,250
SciQuest.com, Inc.*............. 3,400 87,550
------------
326,800
------------
EDUCATIONAL SOFTWARE -- 0.6%
Lightspan Partnership, Inc.*.... 11,100 197,025
SmartForce Public Ltd., Co. --
ADR*.......................... 33,300 1,527,638
------------
1,724,663
------------
ELECTRONIC COMPONENTS/SEMICONDUCTORS -- 14.8%
ACT Manufacturing, Inc.*........ 7,500 419,531
Alpha Industries, Inc.*......... 18,700 1,776,500
Applied Materials, Inc.*........ 13,109 1,235,523
Burr Brown Corp.*............... 18,550 1,008,656
C-Cube Microsystems, Inc.*...... 19,600 1,427,125
Cypress Semiconductor Corp.*.... 23,800 1,173,638
Electronic Scientific
Industries, Inc.*............. 40,200 2,331,600
EMCORE Corp.*................... 23,500 2,703,969
Exar Corp.*..................... 7,500 536,719
Fairchild Semiconductor
International Cl. A*.......... 11,500 419,750
Globespan, Inc.*................ 19,100 1,947,006
Ibis Technology Corp.*.......... 4,600 414,000
Integrated Device Technology,
Inc.*......................... 17,600 697,400
Integrated Silicon Solution*.... 7,300 213,981
International Rectifier*........ 20,200 770,125
Kent Electronics Corp.*......... 9,500 277,281
Kopin Corp*..................... 30,300 2,083,124
LAM Research Corp.*............. 47,000 2,117,938
LTX Corp.*...................... 16,000 723,000
Mattson Technology, Inc.*....... 9,000 383,625
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
22
<PAGE>
-------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK (Continued)
---------------------------------------------------------
ELECTRONIC COMPONENTS/SEMICONDUCTORS (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
MEMC Electronic Materials,
Inc.*......................... 15,100 $ 303,888
Metalink, Ltd.*................. 6,400 245,600
Methode Electronics, Inc. Cl.
A............................. 20,700 1,045,350
Micrel, Inc.*................... 21,700 2,083,200
Microsemi Corp.*................ 15,500 530,875
MIPS Technologies, Inc.*........ 7,100 394,938
Photronics, Inc.*............... 13,300 469,656
Power Integrations, Inc.*....... 25,500 637,500
Qlogic Corp.*................... 33,400 4,525,699
Quantum Effect Devices, Inc.*... 2,200 175,175
Rudolph Technologies, Inc.*..... 9,800 441,000
S3, Inc.*....................... 26,700 560,700
Semtech Corp.*.................. 14,200 909,688
St Assembly Test Services, Ltd.
-- ADR*....................... 1,900 92,150
Transwitch Corp.*............... 23,125 2,222,891
Triquint Semiconductor, Inc.*... 18,500 1,359,750
Varian Semiconductor Equipment
Association, Inc.*............ 27,900 1,775,138
Virata Corp.*................... 15,000 1,498,125
------------
41,931,814
------------
ELECTRONICS -- 3.8%
Amphenol Corp. Cl. A*........... 9,600 981,600
Credence Systems Corp.*......... 12,500 1,564,063
CTS Corp........................ 15,300 872,100
Cymer, Inc.*.................... 20,900 1,045,000
DII Group, Inc.*................ 11,000 1,243,688
Harmonic Lightwaves, Inc.*...... 5,100 424,575
Mechanical Technology, Inc.*.... 13,800 979,800
Northeast Optic Network,
Inc.*......................... 5,400 456,638
Power One, Inc.*................ 18,200 1,098,825
Robotic Vision Systems, Inc.*... 10,100 161,600
Veeco Instruments, Inc.*........ 14,100 1,043,400
Zygo Corp.*..................... 15,100 728,575
------------
10,599,864
------------
ENGINEERING & CONSTRUCTION -- 0.3%
Dycom Industries, Inc.*......... 17,300 843,375
------------
ENTERPRISE SOFTWARE -- 1.1%
Aspect Development, Inc.*....... 27,200 1,751,000
JDA Software Group, Inc.*....... 20,500 299,813
Manugistics Group, Inc.*........ 18,300 919,575
------------
2,970,388
------------
ENTERTAINMENT -- 1.5%
Macrovision Corp.*.............. 45,800 3,944,525
SFX Entertainment, Inc. Cl.
A*............................ 10,100 412,206
------------
4,356,731
------------
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
FOOD -- 0.2%
Hain Food Group, Inc.*.......... 14,900 $ 421,856
Michael Foods, Inc.............. 7,900 165,900
------------
587,756
------------
HEALTH CARE -- 0.1%
Hooper Holmes, Inc.............. 8,500 291,656
------------
HOME FURNISHINGS -- 0.2%
Ethan Allen Interiors, Inc...... 25,650 641,250
------------
INDUSTRIAL AUTOMATION/ROBOTICS -- 0.2%
PRI Automation, Inc.*........... 9,400 574,575
------------
INSTRUMENTS -- 0.9%
Microchip Technology, Inc.*..... 21,000 1,380,750
Therma-Wave, Inc.*.............. 6,900 234,600
Varian, Inc.*................... 25,200 967,050
------------
2,582,400
------------
INSURANCE -- 0.0%
HealthExtras, Inc.*............. 8,300 37,350
------------
INTERNET CONTENT -- 2.1%
About.com, Inc.*................ 8,200 722,624
Ask Jeeves, Inc.*............... 7,500 458,438
Digital Insight Corp.*.......... 5,900 302,375
eMerge Interactive, Inc. Cl.
A*............................ 5,500 165,688
FairMarket, Inc.*............... 1,400 31,850
GetThere.com, Inc.*............. 2,600 39,975
Internet Pictures Corp.*........ 7,100 240,956
Lante Corp.*.................... 2,900 88,088
MedicaLogic, Inc.*.............. 4,700 81,663
MyPoints.com, Inc.*............. 2,700 72,394
NaviSite, Inc.*................. 7,100 864,425
S1 Corp.*....................... 21,600 1,850,848
SportsLine.com, Inc.*........... 10,100 297,319
Switchboard, Inc.*.............. 1,600 55,000
Telescan, Inc.*................. 21,700 512,662
Vicinity Corp.*................. 5,400 187,650
------------
5,971,955
------------
INTERNET SOFTWARE -- 9.1%
724 Solutions, Inc.*............ 2,400 298,800
Allaire Corp.*.................. 17,200 1,300,750
Appnet Systems, Inc.*........... 22,300 1,048,100
Art Technology Group, Inc.*..... 15,600 1,024,725
Backweb Technologies, Ltd.*..... 7,700 264,688
Be Free, Inc.*.................. 9,000 198,000
CacheFlow, Inc.*................ 5,200 616,200
Chordiant Software, Inc.*....... 6,900 112,125
Clarent Corp.*.................. 9,900 892,856
Commtouch Software, Ltd.*....... 4,500 211,781
Concentric Network Corp.*....... 18,100 995,500
CyberSource Corp.*.............. 21,300 793,425
Digital Impact, Inc.*........... 8,900 316,506
Digital Island, Inc.*........... 5,300 322,969
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
23
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000 -- CONTINUED
--------------------------------------------------------------------------------
SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK (Continued)
---------------------------------------------------------
INTERNET SOFTWARE (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
Digital River, Inc.*............ 11,400 $ 245,100
Eprise Corp.*................... 3,600 56,700
Etinuum, Inc.*.................. 3,600 34,200
Extensity, Inc.*................ 2,200 105,600
F5 Networks, Inc.*.............. 7,800 528,450
FirePond, Inc.*................. 2,800 114,625
HearMe, Inc.*................... 13,700 345,925
HotJobs.com, Ltd.*.............. 5,000 126,250
Interliant, Inc.*............... 4,100 115,825
InterWorld Corp.*............... 6,700 378,550
ITXC Corp.*..................... 11,300 531,806
Keynote Systems, Inc.*.......... 6,700 685,075
Liquid Audio*................... 10,000 132,500
Loudeye Technologies, Inc.*..... 1,900 66,263
Mail.com, Inc.*................. 14,300 246,675
MatrixOne, Inc.*................ 1,900 75,881
Mediaplex, Inc.*................ 2,600 135,200
N2H2, Inc.*..................... 4,500 63,563
National Information Consortium,
Inc.*......................... 4,500 156,375
Netegrity, Inc.*................ 9,700 664,450
Netobjects, Inc.*............... 13,900 316,225
Netopia, Inc.*.................. 19,100 1,374,005
Netsolve, Inc.*................. 2,900 93,525
Open Market, Inc.*.............. 9,500 244,625
PC-Tel, Inc.*................... 9,700 729,924
Preview Systems, Inc.*.......... 4,000 189,250
Primus Knowledge Solutions,
Inc.*......................... 4,600 395,600
Razorfish, Inc. Cl. A*.......... 21,100 580,250
Register.Com, Inc.*............. 4,700 326,650
Retek, Inc.*.................... 4,200 172,988
Shopnow.com, Inc.*.............. 12,300 179,888
Silknet Software, Inc.*......... 9,400 977,600
Software.com, Inc.*............. 10,900 1,404,737
Spyglass, Inc.*................. 9,000 697,922
Stamps.com, Inc.*............... 4,700 90,769
Symantec Corp.*................. 24,900 1,870,611
Talk.com, Inc.*................. 30,700 491,200
Versata, Inc.*.................. 11,000 662,063
Viant Corp.*.................... 8,900 298,150
Vitria Technology, Inc.*........ 5,900 594,794
WatchGuard Technologies,
Inc.*......................... 3,600 324,000
webMethods, Inc.*............... 1,100 265,513
Xpedior, Inc.*.................. 6,500 146,250
------------
25,631,977
------------
INVESTMENT COMPANIES -- 0.3%
American Capital Strategies..... 10,400 263,900
SEI Investment Co............... 4,700 533,156
------------
797,056
------------
MACHINERY-DIVERSIFIED -- 1.4%
Asyst Technologies, Inc.*....... 18,100 1,058,850
Brooks Automation, Inc.*........ 9,000 562,500
GaSonics International Corp.*... 11,400 452,081
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
MACHINERY-DIVERSIFIED (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
Helix Technology Corp........... 2,400 $ 144,150
Kulicke & Soffa Industries*..... 22,400 1,435,000
Semitool, Inc.*................. 9,200 167,325
------------
3,819,906
------------
MEDICAL INSTRUMENTS -- 1.0%
Allscripts, Inc.*............... 4,800 288,600
Molecular Devices Corp.*........ 18,500 1,419,874
Resmed, Inc.*................... 9,800 699,475
Techne Corp.*................... 4,500 310,500
------------
2,718,449
------------
MEDICAL SUPPLIES/EQUIPMENT -- 0.1%
Zoll Medical Corp.*............. 5,100 261,375
------------
METAL FABRICATION/HARDWARE -- 0.2%
Mueller Industries, Inc.*....... 16,700 507,263
------------
MISCELLANEOUS MANUFACTURING -- 0.1%
Simpson Manufacturing, Inc.*.... 4,700 185,650
------------
NETWORK SOFTWARE -- 0.1%
Packeteer, Inc.*................ 4,200 147,000
------------
NETWORKING PRODUCTS -- 1.3%
Black Box Corp.*................ 10,200 706,191
Crossroads Systems, Inc.*....... 1,800 185,850
Elbit, Ltd.*.................... 16,400 213,200
Emulex Corp.*................... 7,000 763,875
Network Peripherals, Inc.*...... 9,700 344,350
ODS Networks, Inc.*............. 14,200 340,800
Optibase, Ltd.*................. 2,600 61,750
Turnstone Systems, Inc.*........ 1,700 195,500
Visual Networks Inc.*........... 15,900 902,325
------------
3,713,841
------------
OIL & GAS PRODUCERS -- 0.3%
Chieftain International,
Inc.*......................... 4,600 92,575
Forest Oil Corp.*............... 10,700 113,688
Louis Dreyfus Natural Gas
Corp.*........................ 9,200 312,800
Stone Energy Corp.*............. 5,200 256,100
------------
775,163
------------
OIL & GAS SERVICES -- 2.0%
BJ Services, Co.*............... 20,600 1,521,824
CAL Dive International, Inc.*... 14,900 756,175
Global Industries, Ltd.*........ 42,300 618,638
Maverick Tube Corp.*............ 4,300 139,481
Pride International, Inc.*...... 48,200 1,099,563
Seitel, Inc.*................... 9,000 71,438
Smith International, Inc.*...... 10,200 790,500
Tuboscope, Inc.*................ 24,200 411,400
Varco International, Inc.*...... 10,200 128,775
------------
5,537,794
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
24
<PAGE>
-------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK (Continued)
---------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
OPTICAL RECOGNITION SOFTWARE -- 0.2%
Optimal Robotics Corp. Cl. A*... 9,200 $ 432,400
------------
OTHER COMMERCIAL SERVICES -- 0.8%
Korn-Ferry International*....... 21,700 645,575
NOVA Corp.*..................... 18,300 532,988
On Assignment, Inc.*............ 8,900 400,500
TeleTech Holding, Inc.*......... 11,100 382,950
Xceed, Inc.*.................... 9,400 225,600
------------
2,187,613
------------
PHOTO EQUIPMENT & SUPPLIES -- 0.2%
Concord Camera Corp.*........... 9,500 522,500
------------
PRINTING-COMMERCIAL -- 0.0%
Mail-Well, Inc.*................ 13,000 112,938
------------
PUBLISHING -- 0.2%
Information Holdings, Inc.*..... 10,200 319,388
Playboy Enterprises Cl. B*...... 14,600 290,175
------------
609,563
------------
RECREATIONAL PRODUCTS -- 0.2%
Monaco Coach Corp.*............. 8,900 169,100
National R.V. Holding, Inc.*.... 12,800 202,400
Winnebago Industries, Inc....... 18,100 326,931
------------
698,431
------------
RETAIL-APPAREL -- 0.8%
Genesco, Inc.*.................. 7,200 94,500
Kenneth Cole Productions, Inc.
Cl. A*........................ 15,150 594,638
Pacific Sunwear of California,
Inc.*......................... 26,300 1,012,549
The Men's Wearhouse, Inc.*...... 22,500 666,563
------------
2,368,250
------------
RETAIL-BEDDING -- 0.2%
Linens 'N Things, Inc.*......... 16,400 561,700
------------
RETAIL-COMPUTER EQUIPMENT -- 0.4%
CDW Computer Centers, Inc.*..... 5,200 439,075
Insight Enterprises, Inc.*...... 18,500 674,094
------------
1,113,169
------------
RETAIL-DISCOUNT -- 0.0%
Factory 2-U Stores, Inc.*....... 5,000 125,000
------------
RETAIL-ELECTRONICS -- 0.1%
InterTAN, Inc.*................. 14,100 193,875
------------
RETAIL-INTERNET -- 0.1%
Ubid, Inc.*..................... 13,231 387,834
------------
RETAIL-MAIL ORDER -- 0.4%
Valuevision International, Inc.
Cl. A*........................ 28,700 1,187,463
------------
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
RETAIL-RESTAURANTS -- 0.2%
Jack in the Box, Inc.*.......... 18,500 $ 394,282
Sonic Corp.*.................... 11,500 108,531
------------
502,813
------------
RETAIL-SUNGLASSES -- 0.1%
Sunglass Hut International,
Inc.*......................... 23,600 184,375
------------
SUPERCONDUCTOR PRODUCTS & SYSTEMS -- 0.2%
American Superconductor
Corp.*........................ 13,800 614,100
------------
TELECOMMUNICATIONS -- 5.6%
Adaptive Broadband Corp.*....... 20,200 1,080,700
Alamosa PCS Holdings, Inc.*..... 2,800 105,700
American Mobile Satellite
Corp.*........................ 19,100 458,400
Caprock Communications Corp.*... 11,600 568,400
C-COR.net Corp.*................ 14,500 710,500
Digital Microwave Corp.*........ 24,900 843,488
Finisar Corp.*.................. 3,600 527,456
Focal Communications Corp.*..... 20,900 1,170,400
Intermedia Communications,
Inc.*......................... 7,700 372,006
International FiberCom, Inc.*... 23,900 567,625
InterWAVE Communications
International, Ltd.*.......... 11,500 346,438
MRV Communications, Inc.*....... 11,400 1,044,525
NetOptix Corp.*................. 13,700 2,352,974
Pac-West Telecomm, Inc.*........ 6,200 193,750
Pinnacle Systems, Inc.*......... 18,600 618,450
Startek, Inc.*.................. 10,100 744,875
US LEC Corp. Cl. A*............. 12,300 488,925
ViaSat, Inc.*................... 4,500 324,000
Viatel, Inc.*................... 28,000 1,405,250
Western Wireless Corp. Cl. A*... 10,200 467,288
Winstar Communications, Inc.*... 22,550 1,353,000
------------
15,744,150
------------
TELECOMMUNICATIONS EQUIPMENT -- 9.9%
Advanced Fibre Communications,
Inc.*......................... 18,700 1,172,256
Aether Systems, Inc.*........... 4,500 816,750
Airnet Communications Corp.*.... 4,700 164,206
American Tower Systems Cl. A*... 25,500 1,259,063
Anaren Microwave, Inc.*......... 5,200 498,550
Antec Corp.*.................... 8,100 362,981
Audiocodes, Ltd.*............... 14,500 1,455,438
Aware, Inc.*.................... 16,900 678,113
Com21, Inc.*.................... 7,200 338,400
Commscope, Inc.*................ 18,200 830,375
Corsair Communications, Inc.*... 12,000 229,500
Digital Lightwave, Inc.*........ 22,000 1,370,875
Ditech Communications Corp.*.... 16,200 1,718,213
DSP Group, Inc.*................ 30,300 1,999,800
Efficient Networks, Inc.*....... 9,400 1,464,050
Glenayre Technologies, Inc.*.... 33,900 595,369
Natural Microsystems Corp.*..... 10,300 883,225
Net2000 Communications, Inc.*... 11,800 280,250
Netro Corp.*.................... 17,100 1,111,765
Orckit Communications, Ltd.*.... 17,200 1,152,400
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
25
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000 -- CONTINUED
--------------------------------------------------------------------------------
SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK (Continued)
---------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT (CONTINUED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
Pairgain Technologies, Inc.*.... 26,600 $ 497,088
Paradyne Networks, Inc.*........ 4,200 130,200
P-Com, Inc.*.................... 25,500 471,750
Pinnacle Holdings, Inc.*........ 26,500 1,464,124
Powerwave Technologies, Inc.*... 23,000 2,875,000
Proxim, Inc.*................... 10,100 1,208,843
Telaxis Communications Corp.*... 5,200 312,569
Tollgrade Communications,
Inc.*......................... 13,800 731,400
TUT Systems, Inc.*.............. 19,600 1,167,424
Westell Technologies, Inc. Cl.
A*............................ 19,000 605,625
------------
27,845,602
------------
TELECOMMUNICATIONS SERVICES -- 3.2%
Adelphia Business Solutions,
Inc.*......................... 15,100 930,536
Aspect Communications Corp.*.... 40,700 1,508,443
Choice One Communications,
Inc.*......................... 5,500 195,250
Clearnet Communications, Inc.
Cl. A*........................ 30,400 1,252,100
Ectel, Ltd.*.................... 5,800 115,275
GST Telecommunications, Inc.*... 19,700 120,663
iBasis, Inc.*................... 7,500 307,969
ICG Communications, Inc.*....... 9,800 354,025
INET Technologies, Inc.*........ 14,600 772,888
Leap Wireless International,
Inc.*......................... 10,000 986,875
MasTec, Inc.*................... 6,100 542,900
MGC Communications, Inc.*....... 12,700 908,050
Network Plus Corp.*............. 22,900 927,450
Z-Tel Technologies, Inc.*....... 5,500 231,000
------------
9,153,424
------------
TOYS/GAMES/HOBBIES -- 0.0%
WMS Industries, Inc.*........... 12,700 125,413
------------
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
TRANSPORTATION--AIR FREIGHT -- 0.3%
Expeditors International,
Inc........................... 20,800 $ 826,800
------------
TRANSPORTATION--TRUCKS -- 0.5%
American Freightways Corp.*..... 17,600 262,900
Forward Air Corp.*.............. 11,450 271,222
Swift Transportation Co.,
Inc.*......................... 15,700 321,850
USFreightways Corp.............. 18,300 685,106
------------
1,541,078
------------
TRAVEL SERVICES -- 0.0%
Hotel Reservations Network, Inc.
Cl. A*........................ 500 8,875
------------
TOTAL COMMON STOCK
(Cost: $156,014,472)......................... 276,094,954
------------
<CAPTION>
PRINCIPAL
AMOUNT
--------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 0.8%
--------------------------------------------------------------
Citibank Nassau
5.625%, 04/03/00
(Cost: $2,277,105)............ $ 2,277,105 2,277,105
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 98.6%
(COST: $158,291,577)........................ 278,372,059
OTHER ASSETS IN EXCESS OF LIABILITIES --
1.4%.......................................... 4,045,292
------------
NET ASSETS -- 100.0%.......................... $282,417,351
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
26
<PAGE>
VALUE FUND RETIREMENT SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: MARK STUCKELMAN, Portfolio Manager; JOHN J. KANE, Partner,
Portfolio Manager; LAWRENCE S. SPEIDELL, CFA, Partner, Director of
Global/Systematic Portfolio Management and Research; JOHN GRAVES, Investment
Analyst
CHIEF INVESTMENT OFFICER: CATHERINE SOMHEGYI
GOAL: The Value Fund seeks long-term capital appreciation through investments
in a diversified portfolio comprised predominantly of US companies with larger
market capitalizations.
MARKET OVERVIEW: Following a brief period of outperformance relative to growth
stocks in the beginning of the fiscal year, value stocks underperformed for much
of the 12-month period ending March 31, 2000.
However, in March of 2000, value stocks staged an impressive rally due to a
number of factors, including improving earnings prospects; historically low
valuations; and industry-specific developments. For instance, bank stocks
performed well in anticipation that the Federal Reserve was close to finishing
its round of interest rate hikes (5 since June of 1999) and would raise rates
only one or two more times in the near future. And insurance companies rallied
on the potential for further consolidation in the industry following Citicorp's
decision to purchase its remaining interest in Travelers Property Casualty.
PERFORMANCE: During the 12-month period ended March 31, 2000, the fund was up
4.4% versus 6.3% for the Russell 1000 Value Index and 17.9% for the S&P 500.
PORTFOLIO SPECIFICS: During the fiscal year, we increased our exposure to the
energy sector on a stock-specific basis and reduced the fund's weightings in
utility and financial service companies.
The fund underperformed during the period as holdings like MCI WorldCom,
Textron, Hasbro, and Ford Motor negatively impacted results.
Companies that were positive contributors to the fund's performance included
Citigroup, Chase Manhattan Bank, and TRW. Banks, whose shares had traded down
significantly following the Fed's interest rate hikes during the period, rallied
in anticipation that the interest rate increases would soon be over.
MARKET OUTLOOK: We believe that a number of fundamentals support the case for
the continued improvement in performance among value stocks, namely:
- Better-than-expected earnings
- Acceleration in global economic growth which stimulates demand for
manufactured goods
- Rising productivity as many value-oriented companies use the Internet to cut
costs
We are optimistic that the combination of these factors will benefit the Value
Fund as value stocks recapture investor favor.
--------------------------------------------------------------------------------
27
<PAGE>
VALUE FUND RETIREMENT SHARES
------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN VALUE FUND RETIREMENT
SHARES WITH THE S&P 500 INDEX.
<TABLE>
<S> <C> <C>
SINCE
1 YEAR ANNUALIZED TOTAL RETURNS INCEPTION
4.36% As of 3/31/00 21.81%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
VALUE FUND S&P 500
RETIREMENT SHARES INDEX
<S> <C> <C>
4/30/96 250,000.00 250,000.00
5/96 256,696.43 256,450.00
6/96 263,640.87 257,424.51
7/96 257,440.48 246,046.35
8/96 264,632.94 251,235.46
9/96 278,521.83 265,375.00
10/96 288,194.44 272,694.04
11/96 311,259.92 293,306.98
12/96 310,267.86 287,496.57
1/97 326,636.90 305,459.36
2/97 330,605.16 307,854.16
3/97 316,220.24 295,204.43
4/97 332,589.29 312,828.13
5/97 357,390.87 331,873.11
6/97 368,799.60 346,741.03
7/97 411,706.35 374,331.21
8/97 402,033.73 353,361.17
9/97 427,331.35 372,714.77
10/97 410,714.29 360,266.09
11/97 424,355.16 376,942.81
12/97 434,771.83 373,414.92
1/98 432,787.70 387,655.49
2/98 467,757.94 415,613.20
3/98 497,767.86 436,896.75
4/98 500,496.03 441,291.93
5/98 498,263.89 433,706.13
6/98 509,176.59 451,323.27
7/98 499,255.95 446,516.68
8/98 421,875.00 381,959.30
9/98 445,684.52 406,427.61
10/98 477,182.54 439,502.95
11/98 499,751.98 466,141.22
12/98 521,081.35 493,000.28
1/99 527,529.76 513,617.55
2/99 509,176.59 497,654.32
3/99 518,601.19 517,565.47
4/99 559,027.78 537,595.25
5/99 550,595.24 524,902.63
6/99 565,972.22 554,034.73
7/99 554,563.49 536,748.84
8/99 534,722.22 534,065.10
9/99 512,896.83 519,426.37
10/99 548,611.11 552,295.67
11/99 527,033.73 563,507.28
12/99 566,244.54 596,697.85
1/00 530,869.82 566,743.62
2/00 488,021.58 556,015.17
3/31/00 541,581.88 610,393.45
</TABLE>
The graph above shows the value of a hypothetical $250,000 investment in the
Fund's Class R shares compared with the S&P 500 Index for the periods indicated.
The Fund's Class R shares calculate their performance based upon the historical
performance of their corresponding series of Nicholas-Applegate Mutual Funds
(renamed Pilgrim Mutual Funds), adjusted to reflect all fees and expenses
applicable to the Fund's Class R shares. The Nicholas-Applegate Institutional
Funds' Class R shares were first available on May 21, 1999. Average annual total
return figures include changes in principal value, reinvested dividends, and
capital gain distributions. Absent expense limitations, total returns would have
been slightly lower. Past performance cannot guarantee future results.
The unmanaged S&P 500 Index contains 500 industrial, transportation, utility and
financial companies. The Index is considered to be generally representative of
the U.S. stock market. The unmanaged Index differs from the Fund in composition,
does not pay management fees or expenses and includes reinvested dividends. One
cannot invest directly in an index.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions. You may have a gain or loss when you sell
your shares.
--------------------------------------------------------------------------------
28
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000
------------------------------------------------------------------------
VALUE FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
---------------------------------------------------------------
COMMON STOCK -- 100.4%
---------------------------------------------------------------
AEROSPACE/DEFENSE -- 3.8%
Boeing Co........................... 18,000 $ 682,875
United Technologies Corp............ 7,600 480,225
-----------
1,163,100
-----------
AIRLINES -- 2.1%
Delta Air Lines, Inc................ 11,900 633,675
-----------
AUTO MANUFACTURER -- 5.0%
Ford Motor Co....................... 18,700 859,031
General Motors Corp................. 8,200 679,063
-----------
1,538,094
-----------
AUTOMOTIVE & TRANSPORT EQUIPMENT -- 1.5%
TRW, Inc............................ 7,800 456,300
-----------
CHEMICALS -- 4.8%
Dow Chemical Corp................... 7,300 832,200
PPG Industries, Inc................. 12,500 653,906
-----------
1,486,106
-----------
COMPUTER SERVICES -- 1.9%
Electronic Data Systems Corp........ 9,300 596,944
-----------
COMPUTERS -- 3.4%
International Business Machines
Corp.............................. 3,700 436,600
Pitney Bowes, Inc................... 13,800 616,688
-----------
1,053,288
-----------
DIVERSIFIED FINANCIAL SERVICES -- 11.8%
Ambac Financial Group, Inc.......... 9,100 458,413
Citigroup, Inc...................... 25,500 1,512,468
J.P. Morgan & Co., Inc.............. 6,600 869,550
Lehman Brothers Holdings, Inc....... 8,300 805,100
-----------
3,645,531
-----------
DIVERSIFIED MANUFACTURING -- 3.6%
Dover Corp.......................... 13,500 646,313
Textron, Inc........................ 7,600 462,650
-----------
1,108,963
-----------
ELECTRIC -- 5.6%
Allegheny Energy, Inc............... 13,200 363,825
Energy East Corp.................... 15,800 313,038
PECO Energy Co...................... 10,500 387,187
Texas Utilities Co.................. 6,600 195,938
Unicom Corp......................... 12,500 456,250
-----------
1,716,238
-----------
FOOD -- 2.1%
General Mills, Inc.................. 18,100 654,994
-----------
HEALTH PRODUCTS & SERVICES -- 2.0%
Baxter International, Inc........... 9,900 620,606
-----------
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
INSTRUMENTS-CONTROLS -- 1.5%
Johnson Controls, Inc............... 8,500 $ 459,531
-----------
INSURANCE -- 4.5%
American International Group,
Inc............................... 3,875 424,313
CIGNA Corp.......................... 8,400 636,300
Lincoln National Corp............... 10,200 341,700
-----------
1,402,313
-----------
MEDIA -- 2.3%
Walt Disney Co...................... 17,500 724,063
-----------
METALS -- 1.6%
Reynolds Metals Co.................. 7,300 488,188
-----------
MONEY CENTER BANKS -- 2.7%
Chase Manhattan Corp................ 9,600 837,000
-----------
OIL & GAS PRODUCERS -- 12.1%
Conoco, Inc......................... 23,000 589,375
Exxon Mobil Corp.................... 17,605 1,369,889
Kerr-McGee Corp..................... 10,000 577,500
Phillips Petroleum Co............... 12,500 578,125
USX-Marathon Group.................. 23,400 609,863
-----------
3,724,752
-----------
OIL & GAS SERVICES -- 2.2%
ENSCO International, Inc............ 9,400 339,575
Noble Drilling Corp.*............... 8,100 335,644
-----------
675,219
-----------
REGIONAL/COMMERCIAL BANKS -- 3.9%
FleetBoston Financial Corp.......... 21,600 788,400
M & T Bank Corp..................... 900 401,850
-----------
1,190,250
-----------
RETAIL -- DEPARTMENT STORES -- 2.1%
Federated Department Stores,
Inc.*............................. 15,900 663,825
-----------
RETAIL -- DISCOUNT STORES -- 1.2%
TJX Cos., Inc....................... 17,400 386,063
-----------
RETAIL -- DURABLES -- 2.0%
Whirlpool Corp...................... 10,500 615,563
-----------
TELECOMMUNICATIONS -- 11.4%
Alltel Corp......................... 9,100 573,868
AT&T Corp........................... 11,600 652,499
BellSouth Corp...................... 8,900 418,299
GTE Corp............................ 10,100 717,100
MCI WorldCom, Inc.*................. 17,500 792,968
SBC Communications, Inc............. 9,000 378,000
-----------
3,532,734
-----------
TELECOMMUNICATIONS EQUIPMENT -- 2.0%
Motorola, Inc....................... 4,400 626,449
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
29
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000 -- CONTINUED
--------------------------------------------------------------------------------
VALUE FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMMON STOCK (Continued)
---------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
TRANSPORTATION-TRAINS -- 3.3%
Kansas City Southern Industries,
Inc............................... 5,300 $ 455,469
Union Pacific Corp.................. 14,300 559,487
-----------
1,014,956
-----------
TOTAL COMMON STOCK
(Cost: $31,087,393)............................ 31,014,745
-----------
<CAPTION>
PRINCIPAL
AMOUNT
---------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 3.2%
---------------------------------------------------------------
Morgan Guaranty London
5.625%, 04/03/00
(Cost: $970,531).................... $970,531 970,531
-----------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 103.6%
(COST: $32,057,924).......................... 31,985,276
LIABILITIES IN EXCESS OF OTHER ASSETS --
(3.6%)......................................... (1,099,962)
-----------
NET ASSETS -- 100.0%........................... $30,885,314
-----------
-----------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
30
<PAGE>
HIGH QUALITY BOND FUND RETIREMENT SHARES
------------------------------------------------------------------------
SUB-ADVISORY MANAGEMENT TEAM: FRED S. ROBERTSON, III, Chief Investment
Officer, Fixed Income; JAMES E. KELLERMAN, Portfolio Manager; MALCOM S. DAY,
Portfolio Manager; SUSAN MALONE, Portfolio Manager.
GOAL: The High Quality Bond Fund seeks to maximize long-term total return from
a portfolio utilizing multiple sectors of the bond market including a broad
range of investment-grade issues, as well as, on an opportunistic basis,
developed country international bonds and below-investment grade corporate
issues. The dollar-weighted average portfolio duration of the fund will
generally range from two to eight years.
MARKET OVERVIEW: The enduring US economic expansion and global economic
strength did not serve as catalysts to higher US inflation. However, the
potential for price increases from robust economies and tight US labor markets
caused the Federal Reserve to raise interest rates by a total of 1.25% during
the 12-month period ended March 31, 2000. Given these conditions, the bond
market produced only slightly positive returns.
Rising rates had the biggest negative impact on Treasury securities. As a
result, during the majority of the period, mortgages, asset-backed securities
and corporate bonds were some of the best-performing sectors within the US fixed
income market. However, in the first quarter of 2000, expectations for further
rate increases and a reduced supply of longer-maturity Treasuries created a
strongly inverted yield curve and caused a widening of non-Treasury yield
spreads. In this environment, Treasuries outperformed other fixed income
sectors.
PERFORMANCE: During the fiscal year ended March 31, 2000, the fund was up 1.5%
compared to its Lehman Aggregate Bond Index benchmark, which posted a 1.9% gain.
PORTFOLIO SPECIFICS: In the second quarter of 1999, the fund's duration was
longer than that of its benchmark. Since longer-duration securities
underperformed early in the period, this negatively impacted the fund's results
and was the primary reason the fund modestly trailed its benchmark for the
entire 12-month period.
However, there were two factors that helped fund performance during the fiscal
year. First, in 1999, the fund benefited from being overweighted in corporate
bonds, mortgages and asset-backed securities, sectors that outperformed
Treasuries. Second, in the beginning of 2000, we increased the fund's exposure
to Treasury securities and extended the fund's duration. Because the inverted
yield curve negatively impacted the performance of shorter-maturity,
non-Treasury securities, this move had a positive impact on the fund's results.
MARKET OUTLOOK: Improving global economic growth increases the risk of a
cyclical rise in inflation. However, inflation should rise only slightly as high
productivity gains and strong global competition act as restraining influences.
In the near term, we expect the Fed will continue to push rates higher until
broader signs of moderation in economic growth emerge. However, we are
optimistic about the prospects for the bond market over the longer term.
--------------------------------------------------------------------------------
31
<PAGE>
HIGH QUALITY BOND FUND RETIREMENT SHARES
------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN HIGH QUALITY BOND FUND
RETIREMENT SHARES WITH THE LEHMAN AGGREGATE BOND INDEX.
<TABLE>
<S> <C> <C>
SINCE
1 YEAR ANNUALIZED TOTAL RETURNS INCEPTION
1.52% As of 3/31/00 6.89%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
HIGH QUALITY BOND LEHMAN AGGREGATE
FUND RETIREMENT SHARES BOND INDEX
<S> <C> <C>
8/31/95 $250,000.00 $250,000.00
9/95 257,944.92 252,425.00
10/95 262,182.20 255,706.53
11/95 267,213.98 259,542.12
12/95 272,245.76 263,175.71
1/96 271,980.93 264,912.67
2/96 265,889.83 260,303.19
3/96 264,036.02 258,481.07
4/96 262,711.86 257,033.58
5/96 262,182.20 256,519.51
6/96 265,625.00 259,956.87
7/96 266,419.49 260,658.75
8/96 265,360.17 260,215.63
9/96 270,921.61 264,743.39
10/96 276,747.88 270,620.69
11/96 281,779.66 275,248.30
12/96 279,396.19 272,688.49
1/97 279,396.19 273,533.83
2/97 281,514.83 274,217.66
3/97 278,072.03 271,173.85
4/97 282,044.49 275,241.45
5/97 284,957.63 277,856.25
6/97 288,665.25 281,162.74
7/97 296,345.34 288,754.13
8/97 293,167.37 286,299.72
9/97 298,463.98 290,536.96
10/97 302,171.61 294,749.74
11/97 304,025.42 296,105.59
12/97 306,673.73 299,096.26
1/98 311,440.68 302,924.69
2/98 312,235.17 302,682.35
3/98 314,088.98 303,711.47
4/98 315,413.14 305,290.77
5/98 318,326.27 308,191.03
6/98 319,650.42 310,810.66
7/98 320,709.75 311,463.36
8/98 322,563.56 316,540.21
9/98 329,449.15 323,947.25
10/98 325,211.86 322,230.33
11/98 331,567.80 324,067.04
12/98 333,951.27 325,039.25
1/99 337,394.07 327,347.02
2/99 331,567.80 321,618.45
3/99 334,216.10 323,387.35
4/99 336,864.41 324,422.19
5/99 333,421.61 321,567.28
6/99 331,039.30 320,538.26
7/99 329,169.02 319,192.00
8/99 327,565.93 319,032.40
9/99 331,510.89 322,733.18
10/99 332,596.92 323,927.29
11/99 333,954.46 323,894.90
12/99 333,010.52 322,340.21
1/00 331,907.83 321,276.48
2/00 335,491.56 325,163.93
3/31/00 339,312.82 329,456.09
</TABLE>
The graph above shows the value of a hypothetical $250,000 investment in the
Fund's Class R shares compared with the Lehman Aggregate Bond Index for the
periods indicated. The Fund's Class R shares calculate their performance based
upon the historical performance of their corresponding series of
Nicholas-Applegate Mutual Funds (renamed Pilgrim Mutual Funds), adjusted to
reflect all fees and expenses applicable to the Fund's Class R shares. The
Nicholas-Applegate Institutional Funds' Class R shares were first available on
May 21, 1999. Average annual total return figures include changes in principal
value, reinvested dividends, and capital gain distributions. Absent expense
limitations, total returns would have been slightly lower. Past performance
cannot guarantee future results.
The unmanaged Lehman Aggregate Bond Index consists of securities from the Lehman
Brothers Government/ Corporate Bond Index, Mortgage-Backed Securities Index, and
Asset-Backed Securities Index. The unmanaged Index differs from the Fund in
composition, does not pay management fees or expenses and includes reinvested
income and dividends. One cannot invest directly in an index.
Bond prices, and thus the Fund's share price, generally move in the opposite
direction from interest rates. Since markets can go down as well as up,
investment return and principal value will fluctuate with market conditions, and
you may have a gain or loss when you sell your shares.
--------------------------------------------------------------------------------
32
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000
------------------------------------------------------------------------
HIGH QUALITY BOND FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
----------------------------------------------------------------
CORPORATE BONDS -- 28.4%
----------------------------------------------------------------
AEROSPACE/DEFENSE -- 0.6%
Rockwell International Corp.
5.200%, 01/15/98............. $ 210,000 $ 138,608
----------------
AIRLINES -- 3.6%
Atlas Air, Inc. 1991 A A1
7.200%, 01/02/19............. 247,246 227,970
Continental Airlines, Inc. 1991
A
6.545%, 02/02/19............. 262,950 247,123
Continental Airlines, Inc.
8.048%, 11/01/20............. 90,000 93,591
Northwest Airlines Corp. 1992 A
7.575%, 03/01/19............. 248,710 247,803
----------------
816,487
----------------
AUTO MANUFACTURERS -- 0.5%
Daimler Chrysler NA Holding
7.200%, 09/01/09............. 75,000 73,110
Ford Motor Co. 6.625%,
10/01/28..................... 50,000 43,367
----------------
116,477
----------------
AUTO PARTS & EQUIPMENT -- 0.4%
Collins & Aikan Products
11.500%, 04/15/06............ 100,000 97,875
----------------
BEVERAGES-ALCOHOLIC -- 0.4%
J Seagram & Sons
6.800%, 12/15/08............. 90,000 83,163
----------------
BROADCASTING -- 1.3%
CD Radio, Inc. 0.000% (until
12/01/02, thereafter 15.000%
to maturity), 12/01/07....... 50,000 27,438
Echostar DBS Corp.
9.375%, 02/01/09............. 100,000 96,500
Liberty Media Group 144A
8.250%, 02/01/30............. 75,000 72,649
News America Holdings
8.875%, 04/26/23............. 100,000 105,525
----------------
302,112
----------------
CHEMICALS -- 0.3%
Dow Chemical Corp.
7.375%, 11/01/29............. 75,000 72,675
----------------
COMPUTER SERVICES -- 0.7%
Computer Sciences Corp.
6.250%, 03/15/09............. 170,000 156,033
----------------
COMPUTER SOFTWARE -- 0.5%
Computer Associates
International
6.375%, 04/15/05............. 110,000 102,988
----------------
COMPUTERS -- 1.2%
Apple Computer, Inc.
6.500%, 02/15/04............. 50,000 46,562
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
</TABLE>
COMPUTERS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
Sun Microsystems, Inc.
7.650%, 08/15/09............. $ 150,000 $ 149,091
Unisys Corp.
12.000%, 04/15/03............ 70,000 74,200
----------------
269,853
----------------
DISTRIBUTION/WHOLESALE -- 0.2%
United Stationer Supply
12.750%, 05/01/05............ 50,000 53,125
----------------
DIVERSIFIED FINANCIAL SERVICES -- 3.7%
Abbey National PLC
7.950%, 10/26/29............. 125,000 123,406
ACME Intermediate Holdings Cl.
B
0.000% (until 09/30/02,
thereafter 12.000% to
maturity), 09/30/05.......... 100,000 67,350
Countrywide Capital III
8.050%, 06/15/27............. 50,000 48,440
Discover Card
6.850%, 07/17/07............. 350,000 342,125
Ford Motor Credit Co.
7.375%, 10/28/09............. 150,000 146,931
GS Escrow Corp.
6.750%, 08/01/01............. 120,000 116,550
----------------
844,802
----------------
DRUGS/PHARMACEUTICALS -- 0.4%
Warner Chilcott, Inc. 144A
12.625%, 02/15/08............ 100,000 99,000
----------------
E-COMMERCE -- 0.3%
Amazon.com, Inc.
0.000% (until 05/01/03,
thereafter 10.000% to
maturity), 05/01/08.......... 125,000 73,750
----------------
ELECTRIC -- 0.5%
Calpine Corp.
10.500%, 05/15/06............ 100,000 104,875
----------------
ENTERTAINMENT -- 0.3%
Ascent Entertainment Group
0.000% (until 12/01/02,
thereafter 11.875% to
maturity), 12/15/04.......... 100,000 79,000
----------------
HEALTHCARE -- 0.5%
Abbey Health Care Group
9.500%, 11/01/02............. 120,000 116,100
----------------
INSURANCE -- 0.7%
Florida Windstorm Under
7.125%, 02/25/19............. 100,000 98,815
Lumermens Mutual Casualty
8.300%, 12/01/37............. 60,000 49,947
----------------
148,762
----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
33
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000 -- CONTINUED
--------------------------------------------------------------------------------
HIGH QUALITY BOND FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
</TABLE>
CORPORATE BONDS (Continued)
---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
INVESTMENT COMPANIES -- 2.3%
Barclays Bank PLC
7.400%, 12/15/09............. $ 75,000 $ 73,830
Dryden Investor Trust
7.157%, 07/23/08............. 177,256 161,764
Fidelity Investments
7.570%, 06/15/29............. 200,000 192,700
Merrill Lynch & Co.
6.000%, 02/17/09............. 100,000 89,492
----------------
517,786
----------------
MEDICAL SUPPLIES/EQUIPMENT -- 0.7%
Guidant Corp.
6.150%, 02/15/06............. 180,000 164,394
----------------
METALS-DIVERSIFIED -- 0.7%
Scotia Pacific Co. LLC
6.550%, 01/20/07............. 165,012 153,048
----------------
OIL & GAS PRODUCERS -- 0.5%
Deeptech International, Inc.
12.000%, 12/15/00............ 100,000 105,250
----------------
OIL FIELD MACHINERY & EQUIPMENT -- 1.7%
Halliburton Company
8.750%, 02/15/21............. 350,000 392,875
----------------
PACKAGING & CONTAINERS -- 0.7%
Stone Container Corp.
9.875%, 02/01/00............. 150,000 149,625
----------------
PUBLISHING -- 0.1%
American Lawyer Media
9.750%, 12/15/07............. 20,000 18,775
----------------
RECREATIONAL CENTERS -- 0.2%
Bally Total Fitness Holdings
9.875%, 10/15/07............. 40,000 36,400
----------------
RENTAL AUTO/EQUIPMENT -- 0.1%
United Rentals, Inc.
9.500%, 06/01/08............. 20,000 18,350
----------------
RETAIL-DISCOUNT -- 0.8%
Tuesday Morning Corp.
11.000%, 12/15/07............ 100,000 98,000
Wal-Mart Stores, Inc.
6.875%, 08/10/09............. 95,000 92,411
----------------
190,411
----------------
RETAIL-MUSIC STORE -- 0.2%
Musicland Stores Corp.
9.875%, 03/15/08............. 50,000 43,438
----------------
RETAIL-RESTAURANTS -- 0.3%
Jack In The Box, Inc.
8.375%, 04/15/08............. 75,000 67,500
----------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
RETAIL-VIDEO RENTAL -- 0.4%
Hollywood Entertainment Corp.
10.625%, 08/15/04............ $ 100,000 $ 88,750
----------------
TELECOMMUNICATIONS -- 3.1%
Crown Castle International
Corp.
10.625%, 11/15/07............ 100,000 69,375
Global Telesystems Group, Inc.
9.875%, 02/15/05............. 50,000 41,625
Microcell Telecommunications,
Inc.
0.000% (until 12/01/01,
thereafter
14.000% to maturity),
06/01/06..................... 150,000 133,500
Northeast Optic Network, Inc.
12.750%, 08/15/08............ 50,000 51,000
Pacific West
Telecommunications, Inc.
13.500%, 02/01/09............ 100,000 102,500
Spectrasite Holdings, Inc. 144A
0.000% (until 3/15/05,
thereafter 12.875% to
maturity), 03/15/10.......... 100,000 49,000
Sprint Capital Corp.
6.875%, 11/15/28............. 120,000 108,000
Winstar Communications, Inc.
144A
12.750%, 04/15/10............ 150,000 149,249
----------------
704,249
----------------
TELECOMMUNICATIONS EQUIPMENT -- 0.1%
Covad Communications Group,
Inc.
0.000% (until 03/15/03,
thereafter 13.500% to
maturity),
03/15/08..................... 60,000 33,825
----------------
TELEVISION -- 0.4%
Frontiervision LP
11.000%, 10/15/06............ 100,000 102,000
----------------
TOTAL CORPORATE BONDS
(Cost: $6,680,195)......................... 6,462,361
----------------
----------------------------------------------------------------
FOREIGN CORPORATE BONDS -- 4.8%
----------------------------------------------------------------
BERMUDA -- 0.5%
Sea Containers
12.500%, 12/01/04............ 110,000 102,025
----------------
CANADA -- 0.6%
Teleglobe Inc.
7.200%, 07/20/09............. 130,000 124,937
----------------
CHILE -- 0.9%
Chilgener S.A.
6.500%, 01/15/06............. 70,000 63,021
Empresa Nacional de
Electricidad
8.125%, 02/01/49............. 120,000 99,060
Enersis S.A.
6.600%, 12/01/26............. 35,000 33,068
----------------
195,149
----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
34
<PAGE>
-------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
</TABLE>
FOREIGN CORPORATE BONDS (Continued)
---------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
JAPAN -- 0.4%
Bank Of Tokyo-Mitsubishi, Ltd.
8.400%, 04/15/10............. $ 90,000 $ 91,230
----------------
MEXICO -- 1.0%
Pemex Finance, Ltd.
6.300%, 05/15/10............. 170,000 157,515
Pemex Finance, Ltd.
9.690%, 08/15/09............. 75,000 80,336
----------------
237,851
----------------
UNITED KINGDOM -- 0.3%
United Utilities PLC
6.875%, 08/15/28............. 90,000 73,269
----------------
VENEZUELA -- 1.1%
Cerro Negro Finance, Ltd.
7.330%, 12/01/09............. 70,000 59,185
PDVSA Finance Ltd. 144A
8.750%, 02/15/04............. 110,000 108,689
PDVSA Finance Ltd. 1998 1
7.500%, 11/15/28............. 120,000 88,842
----------------
256,716
----------------
TOTAL FOREIGN CORPORATE BONDS
(Cost: $1,114,110)......................... 1,081,177
----------------
----------------------------------------------------------------
US TREASURY OBLIGATIONS -- 20.6%
----------------------------------------------------------------
US TREASURY BONDS -- 20.3%
8.875%, 08/15/17............... 1,873,000 2,396,260
12.000%, 08/15/13.............. 350,000 473,284
8.000%, 11/15/21............... 1,305,000 1,588,837
6.375%, 05/15/00............... 150,000 150,047
----------------
4,608,428
----------------
US TREASURY NOTES -- 0.1%
4.750%, 11/15/08............... 20,000 18,056
----------------
US TREASURY STRIPS -- 0.2%
6.875%, 08/15/25............... 200,000 46,224
----------------
TOTAL US TREASURY OBLIGATIONS
(Cost: $4,500,181)......................... 4,672,708
----------------
----------------------------------------------------------------
AGENCY OBLIGATIONS -- 19.8%
----------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORP. -- 0.2%
Gold Pool # B00632
9.000%, 06/01/06............. 14,548 14,745
Pool # 380032
10.000%, 10/01/03............ 17,399 17,665
----------------
32,410
----------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 9.7%
Pool # 200112
9.500%, 11/01/05............. $ 41,665 $ 42,325
Pool # 303262
9.500%, 05/01/07............. 22,727 23,121
Pool # 303481
10.000%, 10/01/05............ 18,396 18,932
Pool # 303758
9.500%, 07/01/06............. 17,455 17,867
Pool # 323425
6.000%, 12/01/28............. 162,600 148,627
Pool # 323551
6.000%, 02/01/29............. 1,003,569 917,325
Pool # 363503
9.500%, 06/01/05............. 20,757 21,247
Pool # 481427
6.000%, 01/01/29............. 169,677 155,095
To Be Announced
6.000%, 10/01/12............. 920,000 866,094
----------------
2,210,633
----------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 9.9%
30YR To Be Announced
6.500%, 03/15/29............. 550,000 518,719
Pool # 064054
11.500%, 02/15/13............ 422 441
Pool # 299705
8.500%, 02/15/21............. 4,173 4,289
Pool # 467362
6.500%, 12/15/28............. 369,963 346,378
Pool # 481520
6.000%, 09/15/28............. 820,153 750,694
Pool # 492388
6.000%, 11/15/28............. 49,446 45,258
Pool # 497386
6.500%, 12/15/28............. 538,533 492,925
Pool # 503872
6.500%, 03/15/29............. 99,510 93,850
Pool# 68958
11.500%, 07/15/13............ 1,082 1,197
----------------
2,253,751
----------------
TOTAL AGENCY OBLIGATIONS
(Cost: $4,542,219)......................... 4,496,794
----------------
----------------------------------------------------------------
FOREIGN GOVERNMENT BONDS -- 4.5%
----------------------------------------------------------------
ARGENTINA -- 0.5%
Federal Republic of Argentina
0.000%, 10/15/04............. 175,000 109,375
----------------
GERMANY -- 3.6%
Federal Republic of Germany
Unity Bond
8.000%, 02/21/02............. 190,000 192,410
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
35
<PAGE>
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 2000 -- CONTINUED
--------------------------------------------------------------------------------
HIGH QUALITY BOND FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
</TABLE>
FOREIGN GOVERNMENT BONDS (Continued)
---------------------------------------------------------
GERMANY (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
Federal Republic of Germany
7.375%, 01/03/05............. $ 600,000 $ 631,382
----------------
823,792
----------------
ISRAEL -- 0.4%
State Of Israel
7.750%, 03/15/10............. 100,000 99,175
----------------
TOTAL FOREIGN GOVERNMENT BONDS
(Cost: $1,149,171)......................... 1,032,342
----------------
----------------------------------------------------------------
CMO'S AND ASSET-BACKED SECURITIES -- 18.5%
----------------------------------------------------------------
FINANCIAL SERVICES -- 1.4%
MBNA Master Credit Card
Trust 2000 A
7.350%, 04/15/00............. 310,000 313,609
----------------
MORTGAGE-COMMERCIAL -- 15.0%
Allied Capital Commercial
Mortgage 1998 1 144A
6.710%, 12/25/04............. 190,000 181,450
ARG Funding Corp. 1999 1A A3
6.020%, 05/20/05............. 370,000 351,963
Asset Securitization Corp. 1996
D2 A1
6.920%, 02/14/29............. 183,541 177,690
Capco America Securitization
1998 D7
5.860%, 04/15/00............. 206,155 193,539
Comed Transitional Funding
Trust 1998 1 A6
5.630%, 06/25/09............. 150,000 137,068
Comed Transitional Funding
Trust 1998 1 A7
5.740%, 12/25/10............. 250,000 224,414
Commercial Mortgage Asset Trust
6.250%, 04/17/00............. 179,877 171,051
CRIIMI MAE Commercial Mortgage
Trust 1998 C1 A2 144A
7.000%, 03/02/11............. 180,000 156,263
DLJ Commercial Mortgage Corp.
1998 CF1 CP
.9064%, 04/15/05............. 3,360,000 121,406
DLJ Mortgage Acceptance Corp.
144A 1996 CF1 S
.6097%, 03/12/06............. 3,911,380 68,296
DLJ Mortgage Acceptance Corp.
1998 A A2
6.418%, 05/28/28............. 3,516 3,233
Federal National Mortgage
Association
Aces 1996 M5 Class XS
.5382%, 01/25/13............. 5,910,064 143,134
Federal National Mortgage
Association
Aces 1997 M8 Cl X1
.6535%, 10/25/02............. 8,630,000 126,753
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
</TABLE>
MORTGAGE-COMMERCIAL (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
Global Franchise Trust 1998 A1
6.349%, 04/10/04............. $ 299,395 $ 290,975
GS Mortgage Securities Corp.
1998 C1 A1
6.060%, 10/18/30............. 160,736 152,097
Host Marriott Pool Trust 1999 A
6.980%, 04/03/00............. 115,182 113,652
JP Morgan Commercial Mortgage
Finance Corp. 1998 C6 A2
6.533%, 01/15/30............. 330,000 317,921
Mortgage Capital Funding, Inc.
1998 MC3
6.001%, 11/18/31............. 494,640 469,136
----------------
3,400,041
----------------
MORTGAGE-RESIDENTIAL -- 2.1%
BankBoston Home Equity
Loan Trust 1998 A4
6.110%, 09/25/13............. 400,000 384,000
Saxon Asset Securities Trust
1999 1 AF3
6.170%, 08/25/21............. 100,000 96,609
----------------
480,609
----------------
TOTAL CMO'S AND ASSET-BACKED SECURITIES
(Cost: $4,290,052)......................... 4,194,259
----------------
<CAPTION>
NUMBER
OF SHARES
----------------------------------------------------------------
<S> <C> <C>
MUTUAL FUNDS -- 5.3%
----------------------------------------------------------------
INVESTMENT COMPANIES -- 5.3%
Blackrock 2001 Term Trust...... 68,200 605,275
Blackrock Strategic Term
Trust........................ 69,000 599,438
----------------
TOTAL MUTUAL FUNDS
(Cost: $1,256,263)......................... 1,204,713
----------------
<CAPTION>
PRINCIPAL
AMOUNT
----------------------------------------------------------------
<S> <C> <C>
COMMERCIAL PAPER -- 4.1%
----------------------------------------------------------------
Peoples Gas
0.000%, 04/03/00............. $ 569,000 568,704
Proctor and Gamble
0.000%, 04/05/00............. 366,000 365,691
----------------
TOTAL COMMERCIAL PAPER
(Cost: $934,395)........................... 934,395
----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
36
<PAGE>
-------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 1.8%
----------------------------------------------------------------
Citibank Nassau
5.625%, 04/03/00
(Cost: $419,021)............. $ 419,021 $ 419,021
----------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 107.8%
(COST: $24,885,607)...................... 24,497,770
LIABILITIES IN EXCESS OF OTHER ASSETS --
(7.8%)................................... (1,778,545)
----------------
NET ASSETS -- 100.0%....................... $ 22,719,225
----------------
----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
37
<PAGE>
Nicholas-Applegate Institutional Funds
Financial Highlights
For a share outstanding during the period indicated
<TABLE>
<CAPTION>
DISTRIBUTIONS FROM:
-------------------------
NET ASSET NET NET REALIZED NET NET NET ASSET
VALUE, INVESTMENT AND UNREALIZED INVESTMENT REALIZED VALUE,
BEGINNING INCOME (LOSS)(1) GAINS (LOSS) INCOME CAPITAL GAINS ENDING
<S> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------
INTERNATIONAL EQUITY FUNDS
INTERNATIONAL CORE GROWTH
6/1/99 (commenced) to
3/31/00 $20.01 $(0.20) $12.03 $ - $ - $31.84
EMERGING COUNTRIES
6/1/99 (commenced) to
3/31/00 $15.26 $(0.17) $ 8.58 $ - $ - $23.67
U.S. EQUITY FUNDS
LARGE CAP GROWTH
6/1/99 (commenced) to
3/31/00 $28.61 $(0.21) $21.37 $ - $ - $49.77
MID CAP GROWTH
6/1/99 (commenced) to
3/31/00 $18.94 $(0.09) $22.66 $ - $ - $41.51
SMALL CAP GROWTH
6/1/99 (commenced) to
3/31/00 $13.86 $(0.15) $13.69 $ - ($0.35) $27.05
VALUE
6/1/99 (commenced) to
3/31/00 $22.33 $ 0.12 ($0.71) $ - $ - $21.74
U.S. FIXED INCOME FUNDS
HIGH QUALITY BOND
6/1/99 (commenced) to
3/31/00 $12.66 $ 0.65 ($0.51) ($0.68) $ - $12.12
</TABLE>
----------------------------------
(1) Net investment income per share is calculated by dividing net investment
income for the period by the average shares outstanding during the period.
(2) Total returns are not annualized for periods less than one year.
(3) Ratios are annualized for periods of less than one year. Expense
reimbursements reflect voluntary reductions to total expenses, as discussed
in the notes to financial statements. Such amounts would decrease net
investment income (loss) ratios had such reductions not occurred.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
38
<PAGE>
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS (3)
------------------------------------------------------ FUND'S
NET EXPENSE PORTFOLIO NET ASSETS,
TOTAL INVESTMENT TOTAL (REIMBURSEMENTS)/ NET TURNOVER ENDING
RETURN (2) INCOME (LOSS) EXPENSES RECOUPMENT EXPENSES RATE (IN 000'S)
<S> <C> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------
INTERNATIONAL EQUITY FUNDS
INTERNATIONAL CORE GROWTH
6/1/99 (commenced) to
3/31/00 59.14% (0.82%) 1.61% 0.04% 1.65% 158% $ 15,571
EMERGING COUNTRIES
6/1/99 (commenced) to
3/31/00 55.11% (1.26%) 1.99% (0.05%) 1.94% 178% $ 1
U.S. EQUITY FUNDS
LARGE CAP GROWTH
6/1/99 (commenced) to
3/31/00 73.98% (0.69%) 1.42% (0.15%) 1.27% 154% $ 83,785
MID CAP GROWTH
6/1/99 (commenced) to
3/31/00 119.11% (0.73%) 1.23% (0.21%) 1.02% 115% $ 14
SMALL CAP GROWTH
6/1/99 (commenced) to
3/31/00 98.68% (0.91%) 1.62% (0.20%) 1.42% 88% $ 5,861
VALUE
6/1/99 (commenced) to
3/31/00 (2.21%) (0.70%) 1.52% (0.26%) 1.26% 140% $ 7,700
U.S. FIXED INCOME FUNDS
HIGH QUALITY BOND
6/1/99 (commenced) to
3/31/00 1.20% 6.47% 1.39% (0.69%) 0.70% 162% $ 2,810
</TABLE>
----------------------------------
(1) Net investment income per share is calculated by dividing net investment
income for the period by the average shares outstanding during the period.
(2) Total returns are not annualized for periods less than one year.
(3) Ratios are annualized for periods of less than one year. Expense
reimbursements reflect voluntary reductions to total expenses, as discussed
in the notes to financial statements. Such amounts would decrease net
investment income (loss) ratios had such reductions not occurred.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
39
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2000
<TABLE>
<CAPTION>
INTERNATIONAL EMERGING
CORE GROWTH COUNTRIES
<S> <C> <C>
ASSETS
Investments, at value* $330,188,369 $292,050,174
Foreign currencies, at
value** -- 12,248,350
Cash 44,238,137 26,066,518
Receivables:
Investment securities
sold 18,559,174 8,286,972
Capital shares sold 6,620,489 4,946,750
Dividends 384,004 647,668
Interest 24 185
From investment advisor -- --
Unrealized gain on
forward currency
contracts -- --
Other assets 15,153 24,888
------------ ------------
Total Assets 400,005,350 344,271,505
------------ ------------
LIABILITIES
Payables:
Bank overdraft $ 342,143 $ 5,027,205
Investments purchased 29,033,101 7,742,830
Capital shares
purchased 6,754,001 4,701,423
Collateral on
securities loaned 44,238,137 26,066,518
Loan -- --
Dividends -- --
To investment advisor 304,559 347,812
Unrealized loss on
forward currency
contracts -- --
Other liabilities 226,206 300,410
------------ ------------
Total Liabilities 80,898,147 44,186,198
------------ ------------
NET ASSETS $319,107,203 $300,085,307
------------ ------------
------------ ------------
* Investments, at cost $264,061,879 $225,599,213
------------ ------------
------------ ------------
** Foreign currencies,
at cost $ (342,142) $ 12,204,036
------------ ------------
------------ ------------
NET ASSETS CONSIST OF:
Paid-in capital $238,538,177 $209,843,543
Undistributed net
investment income
(loss) (529,318) (864,040)
Accumulated net realized
gain (loss) on
investments and foreign
currencies 15,414,362 24,608,301
Net unrealized
appreciation
(depreciation) of
investments and of
other assets and
liabilities denominated
in foreign currencies 65,683,982 66,497,503
------------ ------------
Net assets applicable to
all shares outstanding $319,107,203 $300,085,307
------------ ------------
------------ ------------
Net Assets of Retirement
Shares $ 15,571,369 $ 669
Net Assets of
Institutional Shares 303,535,834 300,084,638
------------ ------------
------------ ------------
Retirement Shares
outstanding 489,017 28
Institutional Shares
outstanding 9,520,126 12,666,145
------------ ------------
------------ ------------
Net Asset Value --
Retirement Share $ 31.84 $ 23.67
Net Asset Value --
Institutional Share $ 31.88 $ 23.69
------------ ------------
------------ ------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
40
<PAGE>
<TABLE>
<CAPTION>
LARGE CAP MID CAP SMALL CAP HIGH QUALITY
GROWTH GROWTH GROWTH VALUE BOND
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at value* $122,715,544 $252,510,387 $278,372,059 $31,985,276 $24,497,770
Foreign currencies, at
value** -- -- -- -- --
Cash 5,779,900 19,450,700 24,811,407 970,408 --
Receivables:
Investment securities
sold 1,020,602 1,110,963 1,852,611 327,214 117,154
Capital shares sold 2,314,652 123,947 4,127,854 -- 25,879
Dividends 40,241 5,610 12,576 67,601 2,731
Interest -- -- -- -- 295,247
From investment advisor 22,331 -- 22,355 7,479 20,740
Unrealized gain on
forward currency
contracts -- -- -- -- --
Other assets 3,373 19,147 25,044 3,528 4,893
------------ ------------ ------------ ----------- -----------
Total Assets 131,896,643 273,220,754 309,223,906 33,361,506 24,964,414
------------ ------------ ------------ ----------- -----------
LIABILITIES
Payables:
Bank overdraft $ -- $ 5 $ -- $ -- $ 996
Investments purchased 2,257,898 977,450 1,498,963 2,274,773 2,196,918
Capital shares
purchased 1,928,317 24,640 -- 133,242 --
Collateral on
securities loaned 5,779,900 19,450,700 24,811,400 -- --
Loan -- -- -- -- --
Dividends -- -- -- 10 133
To investment advisor 75,954 203,774 278,908 21,943 8,493
Unrealized loss on
forward currency
contracts -- -- -- -- 4,813
Other liabilities 87,418 172,729 217,284 46,224 33,836
------------ ------------ ------------ ----------- -----------
Total Liabilities 10,129,487 20,829,298 26,806,555 2,476,192 2,245,189
------------ ------------ ------------ ----------- -----------
NET ASSETS $121,767,156 $252,391,456 $282,417,351 $30,885,314 $22,719,225
------------ ------------ ------------ ----------- -----------
------------ ------------ ------------ ----------- -----------
* Investments, at cost $ 92,182,420 $129,646,172 $158,291,577 $32,057,924 $24,885,607
------------ ------------ ------------ ----------- -----------
------------ ------------ ------------ ----------- -----------
** Foreign currencies,
at cost $ -- $ -- $ -- $ -- $ --
------------ ------------ ------------ ----------- -----------
------------ ------------ ------------ ----------- -----------
NET ASSETS CONSIST OF:
Paid-in capital $ 87,591,001 $112,406,208 $129,383,946 $32,724,026 $23,632,563
Undistributed net
investment income
(loss) -- -- -- 85,603 15,863
Accumulated net realized
gain (loss) on
investments and foreign
currencies 3,643,031 17,121,033 32,952,924 (1,851,668) (504,817)
Net unrealized
appreciation
(depreciation) of
investments and of
other assets and
liabilities denominated
in foreign currencies 30,533,124 122,864,215 120,080,481 (72,647) (424,384)
------------ ------------ ------------ ----------- -----------
Net assets applicable to
all shares outstanding $121,767,156 $252,391,456 $282,417,351 $30,885,314 $22,719,225
------------ ------------ ------------ ----------- -----------
------------ ------------ ------------ ----------- -----------
Net Assets of Retirement
Shares $ 83,785,268 $ 14,324 $ 5,861,041 $ 7,699,893 $ 2,809,822
Net Assets of
Institutional Shares 37,981,888 252,377,132 276,556,310 23,185,421 19,909,403
------------ ------------ ------------ ----------- -----------
------------ ------------ ------------ ----------- -----------
Retirement Shares
outstanding 1,683,282 345 216,710 354,225 231,775
Institutional Shares
outstanding 761,795 6,079,914 10,231,544 1,066,333 1,644,686
------------ ------------ ------------ ----------- -----------
------------ ------------ ------------ ----------- -----------
Net Asset Value --
Retirement Share $ 49.77 $ 41.51 $ 27.05 $ 21.74 $ 12.12
Net Asset Value --
Institutional Share $ 49.86 $ 41.51 $ 27.03 $ 21.74 $ 12.11
------------ ------------ ------------ ----------- -----------
------------ ------------ ------------ ----------- -----------
</TABLE>
--------------------------------------------------------------------------------
41
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 2000
<TABLE>
<CAPTION>
INTERNATIONAL EMERGING
CORE GROWTH(1) COUNTRIES(1)
<S> <C> <C>
INVESTMENT INCOME
Dividends, net of foreign
taxes* $ 1,038,438 $ 1,690,682
Interest 433,147 149,750
Securities lending 304,512 252,156
----------- -----------
Total Income 1,776,097 2,092,588
----------- -----------
EXPENSES
Advisory fee 1,730,163 2,497,173
Accounting and
administration fees 110,921 134,018
Custodian fees 190,385 457,245
Transfer agent fees and
expenses 60,920 65,754
Distribution and
shareholder servicing
fees 19,059 1
Administrative services 173,017 199,774
Professional fees 58,478 68,372
Shareholder reporting 12,781 14,943
Registration fees 20,305 31,951
Trustees' fees and
expenses 11,141 13,026
Interest and credit
facility fee 15,391 19,912
Insurance 355 522
Miscellaneous 20,832 26,491
----------- -----------
Total Expenses 2,423,748 3,529,182
Expenses
(reimbursed)/recouped 35,051 (207,942)
----------- -----------
Net Expenses 2,458,799 3,321,240
----------- -----------
NET INVESTMENT INCOME
(LOSS) (682,702) (1,228,652)
----------- -----------
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Realized gain (loss)
from:
Securities 16,711,692 26,204,843
Foreign currency
transactions (996,366) (1,231,930)
----------- -----------
Net realized gain
(loss) 15,715,326 24,972,913
----------- -----------
Change in unrealized
appreciation
(depreciation) of:
Investments 66,126,490 66,450,961
Other assets and
liabilities
denominated in
foreign currencies (442,508) 46,542
----------- -----------
Net unrealized
appreciation
(depreciation) 65,683,982 66,497,503
----------- -----------
NET GAIN (LOSS) ON
INVESTMENTS 81,399,308 91,470,416
----------- -----------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS $80,716,606 $90,241,764
----------- -----------
----------- -----------
*Foreign taxes withheld $ 114,306 $ 302,203
----------- -----------
</TABLE>
------------------------------
(1) Commenced operations on 5/7/99.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
42
<PAGE>
<TABLE>
<CAPTION>
LARGE CAP MID CAP SMALL CAP HIGH QUALITY
GROWTH(1) GROWTH(1) GROWTH(1) VALUE(1) BOND(1)
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends, net of foreign
taxes* $ 136,679 $ 108,234 $ 163,711 $ 623,378 $ 52,699
Interest 118,168 285,999 321,123 32,590 1,292,443
Securities lending 12,323 248,155 510,768 -- --
----------- ------------ ------------ ----------- ----------
Total Income 267,170 642,388 995,602 655,968 1,345,142
----------- ------------ ------------ ----------- ----------
EXPENSES
Advisory fee 344,335 1,172,637 2,019,763 246,907 84,863
Accounting and
administration fees 26,367 101,086 135,487 25,531 13,333
Custodian fees 49,450 100,448 187,905 40,940 48,772
Transfer agent fees and
expenses 27,614 52,113 70,455 25,663 20,708
Distribution and
shareholder servicing
fees 82,300 1 7,358 16,338 5,930
Administrative services 45,911 156,352 201,977 32,920 18,814
Professional fees 14,864 52,356 68,655 11,567 6,564
Shareholder reporting 10,600 11,443 15,005 6,400 2,724
Registration fees 10,714 26,826 19,830 14,852 9,788
Trustees' fees and
expenses 2,832 9,975 13,080 2,204 1,251
Interest and credit
facility fee 1,276 5,437 19,358 2,893 1,737
Insurance 62 379 578 154 57
Miscellaneous 8,440 21,203 26,617 7,034 5,605
----------- ------------ ------------ ----------- ----------
Total Expenses 624,765 1,710,256 2,786,068 433,403 220,146
Expenses
(reimbursed)/recouped (73,763) (131,914) (388,726) (79,755) (126,523)
----------- ------------ ------------ ----------- ----------
Net Expenses 551,002 1,578,342 2,397,342 353,648 93,623
----------- ------------ ------------ ----------- ----------
NET INVESTMENT INCOME
(LOSS) (283,832) (935,954) (1,401,740) 302,320 1,251,519
----------- ------------ ------------ ----------- ----------
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Realized gain (loss)
from:
Securities 3,926,863 18,056,987 38,511,301 (1,851,668) (504,817)
Foreign currency
transactions -- -- -- -- 8,910
----------- ------------ ------------ ----------- ----------
Net realized gain
(loss) 3,926,863 18,056,987 38,511,301 (1,851,668) (495,907)
----------- ------------ ------------ ----------- ----------
Change in unrealized
appreciation
(depreciation) of:
Investments 30,533,124 122,864,215 120,080,481 (72,647) (387,837)
Other assets and
liabilities
denominated in
foreign currencies -- -- -- -- (36,547)
----------- ------------ ------------ ----------- ----------
Net unrealized
appreciation
(depreciation) 30,533,124 122,864,215 120,080,481 (72,647) (424,384)
----------- ------------ ------------ ----------- ----------
NET GAIN (LOSS) ON
INVESTMENTS 34,459,987 140,921,202 158,591,782 (1,924,315) (920,291)
----------- ------------ ------------ ----------- ----------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS $34,176,155 $139,985,248 $157,190,042 $(1,621,995) $ 331,228
----------- ------------ ------------ ----------- ----------
----------- ------------ ------------ ----------- ----------
*Foreign taxes withheld $ 2,751 -- -- -- --
----------- ------------ ------------ ----------- ----------
</TABLE>
------------------------------
(1) Commenced operations on 5/7/99.
--------------------------------------------------------------------------------
43
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED MARCH 31
<TABLE>
<CAPTION>
INTERNATIONAL CORE GROWTH EMERGING COUNTRIES
2000(1) 2000(1)
------------------------- ------------------
<S> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income
(loss) $ (682,702) $ (1,228,652)
Net realized gain
(loss) 15,715,326 24,972,913
Net unrealized
appreciation
(depreciation) 65,683,982 66,497,503
------------ ------------
Net increase
(decrease) in net
assets from
investment
operations 80,716,606 90,241,764
------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Retirement Class (1,855) --
Institutional Class (145,725) --
From net realized gains
Retirement Class -- --
Institutional Class -- --
------------ ------------
Total distributions (147,580) --
------------ ------------
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares
sold
Retirement Class 25,716,559 438
Institutional Class 284,041,615 235,356,729
Distributions
reinvested
Retirement Class 1,855 --
Institutional Class 124,755 --
Cost of shares redeemed
Retirement Class (14,594,931) --
Institutional Class (56,751,676) (25,513,624)
------------ ------------
Net increase
(decrease) in net
assets from share
transactions 238,538,177 209,843,543
------------ ------------
Net Increase
(Decrease) in Net
Assets 319,107,203 300,085,307
NET ASSETS
Beginning -- --
------------ ------------
Ending $319,107,203 $300,085,307
------------ ------------
------------ ------------
Undistributed net
investment income
(loss), ending $ (529,318) $ (864,040)
------------ ------------
------------ ------------
RETIREMENT CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 964,480 28
Distributions
reinvested 58 --
Shares redeemed (475,521) --
------------ ------------
Net Retirement Share
Activity 489,017 28
------------ ------------
------------ ------------
INSTITUTIONAL CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 11,515,928 13,836,324
Distributions
reinvested 3,880 --
Shares redeemed (1,999,682) (1,170,179)
------------ ------------
Net Institutional
Share Activity 9,520,126 12,666,145
------------ ------------
------------ ------------
</TABLE>
------------------------------
(1) Commenced operations on 5/7/99.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
44
<PAGE>
<TABLE>
<CAPTION>
LARGE CAP GROWTH MID CAP GROWTH SMALL CAP GROWTH VALUE HIGH QUALITY BOND
2000(1) 2000(1) 2000(1) 2000(1) 2000(1)
---------------- -------------- ---------------- -------------- -----------------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income
(loss) $ (283,832) $ (935,954) $ (1,401,740) $ 302,320 $ 1,251,519
Net realized gain
(loss) 3,926,863 18,056,987 38,511,301 (1,851,668) (495,907)
Net unrealized
appreciation
(depreciation) 30,533,124 122,864,215 120,080,481 (72,647) (424,384)
------------ ------------ ------------ ------------ -----------
Net increase
(decrease) in net
assets from
investment
operations 34,176,155 139,985,248 157,190,042 (1,621,995) 331,228
------------ ------------ ------------ ------------ -----------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Retirement Class -- -- -- (36,526) (149,889)
Institutional Class -- -- -- (180,191) (1,094,677)
From net realized gains
Retirement Class -- -- (59,712) -- --
Institutional Class -- -- (4,096,925) -- --
------------ ------------ ------------ ------------ -----------
Total distributions -- -- (4,156,637) (216,717) (1,244,566)
------------ ------------ ------------ ------------ -----------
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares
sold
Retirement Class 64,848,074 15,448 4,632,423 10,605,176 3,758,674
Institutional Class 33,199,870 164,024,433 229,057,661 39,557,331 24,431,234
Distributions
reinvested
Retirement Class -- -- 59,711 36,526 149,887
Institutional Class -- -- 3,913,443 162,222 1,093,702
Cost of shares redeemed
Retirement Class (5,750,425) -- (1,089,181) (2,742,281) (1,003,663)
Institutional Class (4,706,518) (51,633,673) (107,190,111) (14,894,948) (4,797,271)
------------ ------------ ------------ ------------ -----------
Net increase
(decrease) in net
assets from share
transactions 87,591,001 112,406,208 129,383,946 32,724,026 23,632,563
------------ ------------ ------------ ------------ -----------
Net Increase
(Decrease) in Net
Assets 121,767,156 252,391,456 282,417,351 30,885,314 22,719,225
NET ASSETS
Beginning -- -- -- -- --
------------ ------------ ------------ ------------ -----------
Ending $121,767,156 $252,391,456 $282,417,351 $ 30,885,314 $22,719,225
------------ ------------ ------------ ------------ -----------
------------ ------------ ------------ ------------ -----------
Undistributed net
investment income
(loss), ending $ -- $ -- $ -- $ 85,603 $ 15,863
------------ ------------ ------------ ------------ -----------
------------ ------------ ------------ ------------ -----------
RETIREMENT CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 1,826,395 345 275,474 480,770 303,597
Distributions
reinvested -- -- 3,045 1,620 10,619
Shares redeemed (143,113) -- (61,809) (128,165) (82,441)
------------ ------------ ------------ ------------ -----------
Net Retirement Share
Activity 1,683,282 345 216,710 354,225 231,775
------------ ------------ ------------ ------------ -----------
------------ ------------ ------------ ------------ -----------
INSTITUTIONAL CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 891,596 7,728,872 15,406,294 1,756,417 1,950,011
Distributions
reinvested -- -- 199,564 7,193 90,095
Shares redeemed (129,801) (1,648,958) (5,374,314) (697,277) (395,420)
------------ ------------ ------------ ------------ -----------
Net Institutional
Share Activity 761,795 6,079,914 10,231,544 1,066,333 1,644,686
------------ ------------ ------------ ------------ -----------
------------ ------------ ------------ ------------ -----------
</TABLE>
------------------------------
(1) Commenced operations on 5/7/99.
--------------------------------------------------------------------------------
45
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS
------------------------------------------------------------------------
NOTE A -- ORGANIZATION
Nicholas-Applegate Institutional Funds (formerly Nicholas-Applegate Investment
Trust, the "Trust") is an open-end management investment company. The Trust was
established as a Delaware business trust on December 17, 1992 and consists of
nineteen separate portfolios (collectively the "Funds" and each a "Fund"). Each
Fund's investment objectives, strategies and risks are discussed in the Funds'
current prospectuses. All of the Funds offer Institutional shares ("Class I")
and seven Funds offer Retirement shares ("Class R"). The Class R shares have no
sales charge and distribution fees but have a shareholder servicing fee. The
seven Funds offering Class R shares are covered in this report with each Fund's
operations accounted for separately.
REORGANIZATION
On May 7, 1999, the Trust was renamed Nicholas-Applegate Institutional Funds
to be the successor entity to the institutional assets of Nicholas-Applegate
Mutual Funds (NAMF). On that date, substantially all of the institutional assets
of the single-class series of NAMF were transferred to the renamed Trust in a
tax-free exchange for Class I shares of the corresponding Funds of the Trust,
which for accounting purposes is treated as a continuation of the portfolios.
Concurrently, substantially all institutional shareholders of the multi-class
series of NAMF exchanged their shares for corresponding Class I shares of the
respective Funds of the Trust, which has been accounted for as a taxable
exchange and a commencement of operations of those Funds.
The investment objectives, policies and limitations of the Funds of the Trust
are identical in every respect to the corresponding portfolios of the NAMF. The
investment management fees and expense limitations are also identical. The Trust
is authorized to issue an unlimited number of shares. Class R shares were first
available on May 21, 1999.
NOTE B -- SIGNIFICANT ACCOUNTING POLICIES
Significant accounting policies consistently followed by the Funds in
preparing these financial statements are described below. The policies conform
with accounting principles generally accepted in the United States.
SECURITY VALUATIONS
The Funds value equity securities traded on national or international
exchanges and market systems at the last sales price reported by the security's
primary market at the time of daily valuation. If a last sales price is not
available, these securities are valued at the mean between last reported bid and
ask prices. Debt securities are valued at bid prices obtained from independent
pricing services or from one or more dealers making markets in the securities.
Security prices quoted in a foreign currency are translated using the current
U.S. dollar exchange rate. Short-term securities maturing within 60 days are
valued at amortized cost which approximates market value. When market quotations
for securities are not readily available, a fair value is determined by
Management in accordance with procedures established by the Board of Trustees.
SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are accounted for as of trade date. Realized gains and
losses from security transactions are determined on an identified-cost basis.
Dividend income is recorded on the ex-dividend date or, for certain foreign
securities, when the information becomes available to the Funds. Interest income
is recorded on an accrual basis. Discounts and premiums on debt securities are
accreted and amortized on the same basis as used for federal tax reporting.
FOREIGN CURRENCY TRANSACTIONS
At each net asset valuation date, the value of assets and liabilities
denominated in foreign currencies are translated into U.S. dollars using the
current
--------------------------------------------------------------------------------
46
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
--------------------------------------------------------------------------------
exchange rate. Security transactions, income and expenses are converted at the
prevailing exchange rate on the day of the event. The effect of changes in
exchange rates on securities denominated in a foreign currency is included with
the net realized and unrealized gain or loss of the associated security. Other
foreign currency gains or losses are reported separately.
Certain Funds may use forward foreign currency contracts to reduce their
exposure to currency fluctuations of their foreign securities. These contracts
are commitments to purchase or sell a foreign currency at a specified rate on a
future date. When the contract is fulfilled or closed, gains or losses are
realized. Until then, the gain or loss is included in unrealized appreciation or
depreciation of investments. The contract commitment is fully collateralized by
cash or securities of the Fund. Foreign denominated assets and forward currency
contracts may involve more risks than domestic transactions, including currency
risk, political and economic risk, regulatory and market risk. Evaluating and
monitoring such risk exposure is a part of the Funds' management strategy.
FUTURES CONTRACTS
Each Fund may enter into futures contracts involving foreign currency, interest
rates, securities, and securities indices, for hedging purposes only. A futures
contract obligates the seller of the contract to deliver and the purchaser of
the contract to take delivery of the type of foreign currency, financial
instrument or security called for in the contract at a specified future time for
a specified price. Upon entering into such a contract, a Fund is required to
deposit and maintain as collateral such initial margin as required by the
exchange on which the contract is traded. Pursuant to the contract, a Fund
agrees to receive from or pay to the broker an amount equal to the daily
fluctuations in the value of the contract. Such receipts or payments are known
as variation margin and are recorded as unrealized gains or losses by the Fund.
When the contract is closed, the Fund records a realized gain or loss equal to
the difference between the value of the contract at the time it was opened and
the value at the time it was closed.
FUND EXPENSES AND MULTI-CLASS ALLOCATIONS
Each Fund bears expenses incurred specifically on its behalf plus an
allocation of its share of Trust level expenses. Each share offered by a Fund
has equal rights to assets but incurs certain Class specific expenses. The Funds
allocate income, gains and losses, both realized and unrealized, and expenses,
except for Class specific expenses, based on the relative net assets of each
share class.
SECURITIES LENDING
Each Fund may temporarily loan securities up to 30% of its total assets to
brokers, dealers or other financial institutions in exchange for a negotiated
lender's fee. The borrower fully collateralizes the loans with cash.
The market value of securities on loan and the related collateral at
March 31, 2000 were:
<TABLE>
<CAPTION>
MARKET VALUE COLLATERAL
FUND (IN 000'S) (IN 000'S)
---- ------------ -----------
<S> <C> <C>
International Core Growth................. $ 42,035 $ 44,238
Emerging Countries........................ 25,075 26,067
Large Cap Growth.......................... 5,587 5,780
Mid Cap Growth............................ 18,939 19,451
Small Cap Growth.......................... 24,146 24,811
</TABLE>
CREDIT FACILITY
The Trust has a $30 million credit facility available to fund temporary or
emergency borrowing. Each Fund pays its pro-rata share of an annual commitment
fee plus interest on its specific borrowings. On December 31, 1999 International
Core Growth Fund borrowed $12,200,000 for four days at an interest rate of
5.158%. On March 31, 2000 the
--------------------------------------------------------------------------------
47
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
--------------------------------------------------------------------------------
Global Technology Fund and Mini Cap Fund borrowed a total of $4,015,000 at an
interest rate of 6.610%. These were the only uses of the credit facility during
the periods presented.
FEDERAL INCOME TAXES
The Funds intend 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 shareholders. Accordingly, no provision for federal
income taxes is required. A Fund investing in foreign securities records any
foreign taxes on income and gains on such investments in accordance with the
applicable tax rules. The Funds' tax accounting treatment of loss deferrals,
passive foreign investment companies and expiration of capital loss
carryforwards are different from the financial statement recognition of income
and gains.
Capital loss carryforwards may be used to offset current or future capital
gains until expiration. The following table reflects capital loss carryforwards
as of March 31, 2000.
<TABLE>
<CAPTION>
CAPITAL LOSS
CARRYFORWARD EXPIRATION
FUND (IN 000'S) DATE
---- ------------ ----------
<S> <C> <C>
Value.................................... $ 710 3/31/2008
High Quality Bond........................ 279 3/31/2008
</TABLE>
DISTRIBUTIONS TO SHAREHOLDERS
The Funds record distributions to shareholders on the ex-dividend date.
Distributions are determined in accordance with income tax regulations that may
differ from generally accepted accounting principles. Accordingly, the Funds'
capital accounts are periodically reclassified to reflect income and gains
available for distribution under income tax regulations. The Funds make income
and capital gain distributions at least annually. Funds with income objectives
make distributions either quarterly or monthly in accordance with the
prospectuses.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from these
estimates.
NOTE C -- TRANSACTIONS WITH AFFILIATES
Nicholas-Applegate Capital Management, as the Investment Advisor of the Funds,
receives the following annual fees payable monthly based on the average daily
net assets of each Fund.
<TABLE>
<S> <C>
Emerging Countries.................. 1.25%
Small Cap Growth and International
Core Growth....................... 1.00%
Large Cap Growth, Value and Mid Cap
Growth............................ 0.75%
High Quality Bond................... 0.45%
</TABLE>
The fees are reduced on Mid Cap Growth, High Quality Bond and International
Core Growth when the average net assets exceed $500 million.
Under an Administrative Services agreement the Investment Advisor provides
operational support services to the Funds at an annual fee on average daily net
assets of 0.10%. For High Quality Bond Fund, the Investment Advisor has entered
into an agreement with Criterion Investment Management LLC, ("the subadvisor").
The agreement states that the subadvisor will receive a fee paid by the advisor
at an annualized rate of 0.25% of each of the Fund's daily net assets.
The Investment Advisor has agreed to limit the Fund's expenses to certain
levels through March 31, 2000. Expenses reimbursed by the Investment Advisor
prior to July 24, 1998 may be recouped from the Funds within five years of that
date. Expenses reimbursed by the Investment Advisor from July 24,
--------------------------------------------------------------------------------
48
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
--------------------------------------------------------------------------------
1998 through May 7, 1999 may be recouped from the Funds within five years after
the year in which they are reimbursed. Any expenses reimbursed after May 7, 1999
may be recouped within three years after the year in which they are reimbursed.
The Investment Advisor will recover such reimbursements to the extent of the
differences between a Fund's actual expenses (exclusive of interest expense,
taxes and brokerage) when they fall below the limit, and the voluntary limit.
<TABLE>
<CAPTION>
EXPENSE LIMIT
-------------------------- UNREIMBURSED
INSTITUTIONAL RETIREMENT AMOUNTS
FUND CLASS CLASS AT 3/31/00
----------------------------- ------------- ---------- -------------
<S> <C> <C> <C>
International Core Growth.... 1.40% 1.65% $ 236,220
Emerging Countries........... 1.65% 1.90% 1,021,568
Large Cap Growth............. 1.00% 1.25% 139,357
Mid Cap Growth............... 1.00% 1.25% 950,145
Small Cap Growth............. 1.17% 1.42% 1,651,050
Value........................ 1.00% 1.25% 311,946
High Quality Bond............ 0.45% 0.70% 609,097
</TABLE>
The Class R shares have a shareholder servicing agreement with the
Distributor. The shareholder servicing plan is a compensation plan, which
compensates the Distributor for expenses in connection with non-distribution
shareholder services provided by the Distributor to other financial
institutions. The Retirement Class pays an annual fee on its average daily net
assets of up to 0.25% under the shareholder servicing agreement.
Certain officers of the Trust are also officers of the Investment Advisor and
Distributor. The Trustees who are not affiliated with the Investment Advisor
receive annual compensation of approximately $18,000 each from the Trust.
NOTE D -- INVESTMENT TRANSACTIONS
The following table presents purchases and sales of securities, excluding
short-term investments, during the year ended March 31, 2000 to indicate the
volume of transactions in each Fund. The tax cost of securities held at
March 31, 2000 and the related gross and net unrealized appreciation and
depreciation, provide aggregate information on a tax basis against which future
gains and losses on these investments are measured for distribution purposes.
<TABLE>
<CAPTION>
NET
GROSS GROSS UNREALIZED
PURCHASES UNREALIZED UNREALIZED APPRECIATION
(IN SALES TAX COST APPRECIATION DEPRECIATION (DEPRECIATION)
FUND $000'S) (IN $000'S) (IN $000'S) (IN $000'S) (IN $000'S) (IN $000'S)
---- --------- ----------- ----------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Int'l Core Growth.... 425,398 322,135 265,185 75,742 10,739 65,003
Emerging Countries... 423,972 409,738 226,839 75,477 10,266 65,211
Large Cap Growth..... 160,433 80,420 92,182 31,095 561 30,534
Mid Cap Growth....... 213,392 232,280 129,946 128,017 5,453 122,564
Small Cap Growth..... 202,313 280,119 159,498 127,283 8,409 118,874
Value................ 55,337 49,781 32,521 1,876 2,412 (536)
High Quality Bond.... 42,191 35,444 24,903 203 608 (405)
</TABLE>
NOTE E -- FINANCIAL INSTRUMENTS
During the period, several of the Funds have been party to financial
instruments with off-balance sheet risks, including forward foreign currency
contracts and futures contracts, primarily in an attempt to minimize the risk to
the Fund, in respect of its portfolio transactions. These instruments involve
market and/or credit risk in excess of the amount recognized in the Statement of
Assets and Liabilities. Risks arise from the possible inability of
counterparties to meet the terms of their contracts and from unexpected movement
in currencies, securities values and interest rates. The contract amounts
indicate the extent of the Funds' involvement in such contracts.
FORWARDS
When entering a forward currency contract, the Fund agrees to receive or
deliver a fixed quantity of foreign currency for an agreed upon price on an
agreed upon future date.
At March 31, 2000, High Quality Bond Fund had outstanding forward contracts
for the purchase and sale of currencies as set out below. The contracts are
reported in the financial statements at the Fund's net equity, as measured by
the difference between the forward foreign exchange rates at the dates of
--------------------------------------------------------------------------------
49
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
--------------------------------------------------------------------------------
entry into the contracts and the forward rates at the reporting date, or the
date an offsetting position, if any, has been entered into.
<TABLE>
<CAPTION>
NET
UNREALIZED
LOCAL SETTLEMENT MARKET APPRECIATION/
CURRENCY DATE VALUE (DEPRECIATION)
--------- ---------------- -------- --------------
US$ US$
<S> <C> <C> <C> <C>
HIGH QUALITY BOND
To Buy:
Australian Dollar.................... 340,000 May 10, 2000 206,467 $(10,137)
European Euro........................ 200,000 May 10, 2000 191,853 (9,782)
To Sell:
Australian Dollar.................... 170,000 May 10, 2000 (103,233) 1,223
European Euro........................ 435,000 May 10, 2000 (417,280) 8,161
European Euro........................ 115,000 May 10, 2000 (110,315) 3,029
European Euro........................ 175,000 May 10, 2000 (167,871) 2,325
European Euro........................ 135,000 May 10, 2000 (129,501) 368
--------
Net equity in foreign currency
exchange contracts.................. $ (4,813)
========
</TABLE>
FUTURES
At March 31, 2000, High Quality Bond Fund had outstanding futures contracts as
follows:
<TABLE>
<CAPTION>
MATURITY VALUE AT UNREALIZED
UNITS DATE OPEN VALUE 3/31/2000 GAIN (LOSS)
-------- --------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
United States Treasury Bond....... 12 6/16/2000 $1,133,062 $ 1,172,250 $ 39,188
United States Treasury Bond....... (20) 6/16/2000 (1,899,375) (1,961,563) (62,188)
--------
Total Futures..................... $(23,000)
========
</TABLE>
At March 31, 2000, the following securities, included in the accompanying
schedule of investments, were deposited in a segregated custodian account as
collateral for the futures contracts:
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT AT 3/31/2000
--------- ------------
<S> <C> <C>
GNMA Pool #467362, 6.5%, 12/15/28........................ $369,963 $346,378
United States Treasury Bond, 8.875%, 8/15/17............. 250,000 319,843
--------
Total collateral for futures contracts................... $666,221
========
</TABLE>
--------------------------------------------------------------------------------
50
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
--------------------------------------------------------------------------------
NOTE F -- ADDITIONAL FEDERAL TAX INFORMATION (UNAUDITED)
The amounts which represent income derived from sources within, and taxes paid
to foreign countries or possessions of the United States are as follows:
<TABLE>
<CAPTION>
FOREIGN SOURCE
FUND: INCOME: FTC TOTAL:
----- ------- ----------
<S> <C> <C>
International Core Growth $1,055,509 $131,906
Emerging Countries $0 $0
Large Cap Growth 0 0
Mid Cap Growth 0 0
Small Cap Growth 0 0
Value 0 0
High Quality 0 0
</TABLE>
The percentage of ordinary dividends paid by the Funds during the year ended
3/31/00, which qualify for the Dividends Received Deduction available to
corporate shareholders was:
<TABLE>
<CAPTION>
FUND: PERCENTAGE:
----- -----------
<S> <C>
International Core Growth 0.00%
Emerging Countries 0.00%
Large Cap Growth 3.16%
Mid Cap Growth 0.59%
Small Cap Growth 0.41%
Value 100.00%
High Quality 4.20%
</TABLE>
The Funds hereby designate the following approximate amounts as capital gains
distributions for the purpose of the Dividends Paid Deduction:
<TABLE>
<CAPTION>
FUND: AMOUNTS:
----- --------
<S> <C>
International Core Growth $0
Emerging Countries 0
Large Cap Growth 0
Mid Cap Growth 0
Small Cap Growth 0
Value 0
High Quality 0
</TABLE>
--------------------------------------------------------------------------------
51
<PAGE>
REPORT OF INDEPENDENT AUDITORS
------------------------------------------------------------------------
ERNST & YOUNG LLP
725 SOUTH FIGUEROA STREET
LOS ANGELES, CALIFORNIA 90017
PHONE: 213 977 3200
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of the following series of
Nicholas-Applegate Institutional Funds: International Core Growth Fund, Emerging
Countries Fund, Large Cap Growth Fund, Mid Cap Growth Fund, Small Cap Growth
Fund, Value Fund and High Quality Bond Fund (hereinafter the "Funds") as of
March 31, 2000 and the related statements of operations, the statements of
changes in net assets and the financial highlights for the respective periods
indicated therein. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of March 31, 2000, by correspondence with
the custodians and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective Funds of Nicholas-Applegate Institutional Funds, named above,
as of March 31, 2000, the results of their operations, changes in their net
assets and the financial highlights for the periods indicated therein, in
conformity with accounting principles generally accepted in the United States.
/s/ Ernst & Young LLP
May 5, 2000
--------------------------------------------------------------------------------
52
<PAGE>
TRUSTEES OF NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
Arthur E. Nicholas
Walter E. Auch
Darlene T. DeRemer
George F. Keane
OFFICERS
John J.P. McDonnell, PRESIDENT
E. Blake Moore, Jr., SECRETARY
C. William Maher, TREASURER
INVESTMENT ADVISER
Nicholas-Applegate Capital Management
DISTRIBUTOR
Nicholas-Applegate Securities
CUSTODIAN
Brown Brothers Harriman & Co., Private Bankers
TRANSFER AGENT
State Street Bank & Trust Company
<PAGE>
NICHOLAS-APPLEGATE-Registered
Trademark-
INSTITUTIONAL FUNDS
600 West Broadway
San Diego, California 92101
800 - 551 - 8643
Nicholas-Applegate Securities, Distributor
ANN300RET
