<PAGE>
NICHOLAS|APPLEGATE-REGISTERED TRADEMARK-
INSTITUTIONAL FUNDS
SEMI-ANNUAL REPORT
(Unaudited)
INSTITUTIONAL SHARES
SEPTEMBER 30, 2000
<PAGE>
LETTER TO SHAREHOLDERS
------------------------------------------------------------------------
DEAR FELLOW SHAREHOLDER,
Focus on the developments taking place around the world today, and it's apparent
that powerful changes are reshaping the global investment landscape. These
dynamic forces presented opportunities and challenges for investors during the
six-month period ended September 30, 2000.
In the United States, concerns about the pace of economic growth and the
impact of higher interest rates, rising oil prices and a weak euro on corporate
earnings sent stock prices lower. Technology issues suffered the brunt of the
market's decline, as investors tried to reconcile lofty valuations with
expectations for a deceleration in earnings growth. During the period, the US
Federal Reserve raised interest rates by half a percentage point in May. Amid
mounting evidence of a slowdown in domestic economic growth, US fixed income
investors became confident that the rate increase in May was the last in the
Federal Reserve's round of tightening. As a result, bond prices climbed higher
during the period.
The majority of international equity markets moved in tandem with the US
market and were affected by similar themes. In both developed and emerging
foreign countries, worries about the faltering euro, higher energy costs and
rising interest rates overshadowed positive factors such as ongoing reform and
restructuring efforts -- which are designed to increase competitiveness and
enhance shareholder value. Not all of the world's equity markets registered
losses, however. Israel, Canada and China are examples of countries where equity
prices trekked higher during the period.
Several positive milestone events took place in various countries around the
globe. Germany and France announced wide-sweeping tax reform packages designed
to stimulate economic growth and investment. China made significant progress
toward transforming itself into a market-driven economy within the World Trade
Organization. And Mexico ended 71 years of one-party rule by electing a new
president with substantial private sector experience.
In June, a partnership of scientists from around the world announced they had
completed an initial sequencing of the human genome, the genetic blueprint for
mankind. This historic achievement marked a turning point for genomics -- the
study of the structure and function of genes -- and sparked heightened investor
interest in biotechnology stocks.
With the goal of aligning with a global leader in the financial services
industry, Nicholas-Applegate Capital Management agreed in October to be acquired
by Allianz AG, one of the world's leading insurance and asset management
companies. The transaction was negotiated with our clients foremost in mind and
it promises to bring significant client benefits. It provides access to a
greater depth of resources while preserving operational autonomy. This will
enable us to retain the information edge and the client focus that are hallmarks
of Nicholas-Applegate. We will be able to improve the depth and breadth of our
product offerings, continue to hire and train the best people in the industry
and to provide strong results for our clients. Finally, the transaction provides
long-term contracts for partners and financial incentives for all employees,
assuring continuity of our investment philosophy, process and culture.
On behalf of everyone at Nicholas-Applegate, we appreciate the opportunity to
contribute to your financial success, and thank you for your participation in
the Nicholas-Applegate Institutional Funds.
Best Regards,
/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........................................ 31
Emerging Countries.................................................... 37
Pacific Rim........................................................... 42
Latin America......................................................... 46
Large Cap Growth...................................................... 50
Mid Cap Growth........................................................ 53
Small Cap Growth...................................................... 57
Mini Cap Growth....................................................... 64
Value................................................................. 69
Convertible........................................................... 73
Short Intermediate.................................................... 78
High Quality Bond..................................................... 82
High Yield Bond....................................................... 88
The Funds'
Financial Highlights.................................................. 94
Statement of Assets and Liabilities................................... 98
Statement of Operations............................................... 102
Statement of Changes in Net Assets.................................... 106
Notes to the Financial Statements..................................... 113
</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 Class I Shares. Distributor: Nicholas-
Applegate Securities.
<PAGE>
WORLDWIDE GROWTH FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: CATHERINE SOMHEGYI, Partner, Chief Investment Officer, Global
Equities; ANDREW B. GALLAGHER, Partner, Portfolio Manager; LORETTA J. MORRIS,
Partner, Portfolio Manager; RANDALL S. KAHN, CFA, Partner, Portfolio Manager;
LAWRENCE S. SPEIDELL, CFA, Partner, Director of Quantitative Research and
Portfolio Management; PEDRO V. MARCAL, Partner, Portfolio Manager; ERNESTO
RAMOS, PH.D., Partner, Portfolio Manager; MELISA GRIGOLITE, Portfolio Manager.
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: Following strong results in 1999 and the first quarter of
2000, most of the world's stock markets drifted lower in the six-month period
ended September 30, 2000, driven by concerns over:
- Higher energy prices. Oil prices surged to their highest levels since the
Gulf War.
- A decline in the euro. The currency has fallen over 25% versus the US dollar
and Japanese yen since its January 1999 debut.
- Rising interest rates. In the United States, the Federal Reserve raised
short-term interest rates by half a percentage point in May--its sixth rate
hike since June of last year. The European Central Bank boosted rates a
total of 1% for its 11 member countries on three separate occasions during
the period. And in Japan, the country's central bank hiked rates for the
first time in over 10 years.
Technology stocks suffered the brunt of the world equity market's decline,
amid worries about valuations and corporate profit growth. In the United States,
the tech-heavy Nasdaq Composite dropped 19.7% during the six-month period; in
Europe and Japan, the tech-laden Easdaq and Jasdaq indices tumbled 42.0% and
29.5%, respectively.
PERFORMANCE: The Fund declined 10.9% during the six-month period ended
September 30, 2000 versus the MSCI World Index, which fell 8.4%.
PORTFOLIO SPECIFICS: The Fund modestly underperformed its benchmark during the
period as positions such as Dell Computer in the United States, Vodafone
Airtouch in the United Kingdom and Skandia Forsakring in Sweden unfavorably
impacted results.
Holdings benefiting Fund performance included telecommunications equipment
companies like CIENA, JDS Uniphase and Corning in the United States and Nokia
and Ericsson, which are headquartered in Finland and Sweden, respectively.
During the period, on a stock-by-stock basis, we modestly increased the Fund's
exposure to North America and the health care sector, while decreasing holdings
in Europe and the commercial/industrial services sector.
MARKET OUTLOOK: Consensus expectations are for a slowdown in global economic
expansion and corporate profit growth--conditions where investors typically
reward companies delivering strong earnings. This type of environment is
conducive to our bottom-up investment approach focused on the early
identification of high-growth companies with outstanding earnings visibility. As
a result, we are optimistic in our outlook for the Worldwide Growth Fund.
--------------------------------------------------------------------------------
1
<PAGE>
WORLDWIDE GROWTH FUND INSTITUTIONAL SHARES -- UNAUDITED
------------------------------------------------------------------------
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 9/30/00 SINCE
1 YEAR 5 YEARS INCEPTION
36.80% 26.99% 22.66%
</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
04/93 $252,968.04 $253,551.70
05/93 $264,155.25 $259,332.68
06/93 $263,470.32 $257,076.48
07/93 $266,210.05 $262,320.84
08/93 $284,018.26 $274,282.68
09/93 $284,474.89 $269,143.44
10/93 $285,388.13 $276,491.06
11/93 $268,493.15 $260,786.36
12/93 $286,073.06 $273,486.66
01/94 $307,534.25 $291,454.73
02/94 $306,849.32 $287,636.68
03/94 $300,228.31 $275,153.25
04/94 $306,392.69 $283,600.45
05/94 $300,228.31 $284,281.09
06/94 $295,205.48 $283,428.25
07/94 $302,968.04 $288,756.70
08/94 $315,296.80 $297,390.52
09/94 $310,730.59 $289,509.68
10/94 $312,328.77 $297,702.80
11/94 $297,031.96 $284,722.96
12/94 $294,624.53 $287,427.83
01/95 $283,169.45 $283,030.18
02/95 $290,729.80 $287,088.83
03/95 $299,206.56 $300,840.39
04/95 $310,890.73 $311,249.46
05/95 $310,890.73 $313,832.84
06/95 $316,618.27 $313,675.92
07/95 $339,070.22 $329,296.98
08/95 $338,153.81 $321,887.80
09/95 $346,630.57 $331,190.35
10/95 $334,946.39 $325,891.31
11/95 $337,924.71 $337,134.56
12/95 $339,841.23 $346,911.46
01/96 $343,811.88 $353,121.18
02/96 $350,818.92 $355,204.59
03/96 $360,161.63 $361,029.95
04/96 $383,284.85 $369,441.94
05/96 $387,489.07 $369,700.55
06/96 $385,153.39 $371,512.09
07/96 $364,599.42 $358,323.41
08/96 $373,007.86 $362,372.46
09/96 $385,620.53 $376,468.75
10/96 $385,854.09 $379,028.74
11/96 $403,887.01 $400,178.54
12/96 $402,739.61 $393,695.65
01/97 $416,508.48 $398,380.63
02/97 $412,205.71 $402,882.33
03/97 $407,616.08 $394,824.68
04/97 $417,655.89 $407,656.48
05/97 $444,333.08 $432,727.36
06/97 $468,715.47 $454,233.91
07/97 $503,998.21 $475,083.24
08/97 $476,173.61 $443,205.16
09/97 $515,185.42 $467,226.88
10/97 $473,305.09 $442,557.30
11/97 $473,717.48 $450,302.05
12/97 $474,947.92 $455,705.68
01/98 $485,099.00 $468,328.72
02/98 $518,320.75 $499,931.55
03/98 $550,619.67 $520,978.66
04/98 $570,306.63 $525,990.48
05/98 $571,844.67 $519,320.92
06/98 $588,763.15 $531,576.89
07/98 $597,902.68 $530,620.06
08/98 $500,111.79 $459,782.28
09/98 $510,612.83 $467,828.47
10/98 $538,178.05 $510,026.60
11/98 $579,280.14 $540,271.17
12/98 $655,343.88 $566,582.38
01/99 $711,146.09 $578,933.87
02/99 $692,545.35 $563,476.34
03/99 $739,379.36 $586,860.61
04/99 $771,930.65 $609,924.23
05/99 $762,298.12 $587,552.21
06/99 $816,107.40 $614,873.39
07/99 $822,086.21 $612,948.83
08/99 $823,746.99 $611,778.10
09/99 $836,701.08 $605,764.32
10/99 $888,517.42 $637,142.91
11/99 $1,006,432.82 $654,984.83
12/99 $1,223,995.03 $707,907.60
01/00 $1,150,256.38 $667,287.16
02/00 $1,308,030.51 $669,006.75
03/00 $1,285,111.74 $715,168.22
04/00 $1,171,514.37 $684,847.23
05/00 $1,097,443.57 $667,452.11
06/00 $1,192,772.36 $689,845.13
07/00 $1,137,634.45 $670,342.52
08/00 $1,237,281.27 $692,064.97
9/30/00 $1,144,609.73 $655,184.83
</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 SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
WORLDWIDE GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
----------------------------------------------------------------
COMMON STOCK & EQUIVALENTS -- 96.4%
----------------------------------------------------------------
BERMUDA -- 1.3%
TyCom, Ltd.*........................ 54,900 $ 2,106,788
------------
BRAZIL -- 0.4%
Petroleo Brasileiro S.A. -- ADR*.... 24,200 727,513
Tele Norte Leste Participacoes
S.A. -- ADR....................... 0 0
Telesp Celular Participacoes
S.A. -- ADR Rts................... 188 0
------------
727,513
------------
CANADA -- 6.6%
Abitibi Consolidated, Inc........... 57,900 542,813
Alberta Energy Co., Ltd............. 16,500 684,850
Anderson Exploration, Ltd.*......... 35,600 778,439
Ballard Power Systems, Inc.*........ 5,300 579,108
Biovail International Corp.*........ 14,600 1,188,988
Bombardier, Inc. Cl. B.............. 36,000 622,092
Celestica, Inc.*.................... 16,900 1,164,220
Certicom Corp.*..................... 14,400 570,411
C-MAC Industries, Inc.*............. 7,000 402,500
Magna International, Inc. Cl. A..... 2,200 95,773
Nortel Networks Corp................ 62,800 3,740,525
Precision Drilling Corp.*........... 11,400 406,125
------------
10,775,844
------------
DENMARK -- 0.5%
Novo Nordisk AS Cl. B............... 4,000 887,133
------------
FINLAND -- 0.6%
Elsia Communications OYJ............ 11,057 395,071
Nokia OYJ -- ADR.................... 14,400 573,300
------------
968,371
------------
FRANCE -- 4.2%
Accor S.A........................... 14,000 519,622
Alcatel............................. 10,800 690,958
Aventis S.A......................... 9,600 720,079
France Telecom S.A.................. 7,600 814,184
Group Danone........................ 2,200 302,080
Sanofi-Synthelabo S.A............... 24,200 1,300,537
Schneider Electric S.A.............. 8,500 535,559
Societe Television Francaise 1...... 12,300 705,519
Total Fina Elf S.A.................. 5,237 766,227
Vivendi Environnement*.............. 16,600 615,244
------------
6,970,009
------------
GERMANY -- 1.6%
Bayerische Motoren Werke AG......... 24,600 840,110
Dresdner Bank AG.................... 16,700 727,267
Intershop Communications AG*........ 5,500 358,186
Veba AG............................. 13,000 669,956
------------
2,595,519
------------
GREECE -- 0.5%
Alpha Bank S.A...................... 18,400 727,452
------------
<CAPTION>
NUMBER
OF SHARES VALUE
----------------------------------------------------------------
<S> <C> <C>
HONG KONG -- 2.0%
Cheung Kong (Holdings), Ltd.*....... 84,000 $ 1,012,717
Citic Pacific, Ltd.................. 44,000 190,179
HSBC Holdings PLC................... 68,000 955,001
Hutchison Whampoa, Ltd.............. 82,400 1,093,826
------------
3,251,723
------------
IRELAND -- 0.9%
Allied Irish Banks PLC.............. 58,600 631,915
Elan Corp. PLC -- ADR*.............. 16,000 876,000
------------
1,507,915
------------
ISRAEL -- 0.6%
Teva Pharmaceutical Industries,
Ltd. -- ADR....................... 13,600 995,350
------------
ITALY -- 2.8%
Alleanza Assicurazioni SpA.......... 63,000 833,915
Edison SpA*......................... 84,800 834,374
ENI SpA............................. 112,500 595,654
Finmeccanica SpA*................... 612,300 725,115
Mediaset SpA*....................... 47,400 706,059
Riunione Adriatica di Sicurta
SpA*.............................. 70,600 928,284
------------
4,623,401
------------
JAPAN -- 8.4%
Daikin Industries, Ltd.............. 23,000 443,781
FANUC, Ltd.......................... 10,300 1,139,043
Fujitsu, Ltd........................ 30,000 696,835
Furukawa Electric Co., Ltd.......... 26,000 718,212
Hitachi, Ltd........................ 37,000 429,373
Itochu Techno-Science Corp.......... 3,800 696,280
Konami Co., Ltd..................... 12,000 990,561
Mitsubishi Electric Corp............ 108,000 894,503
Mitsui Fudosan Co., Ltd............. 46,000 576,383
NEC Corp............................ 19,000 431,658
Nippon Sheet Glass Co., Ltd......... 49,000 786,739
Nippon Telegraph and Telephone
Corp.............................. 33 323,709
Nomura Securities Co., Ltd.......... 29,000 630,668
NTT DoCoMo, Inc..................... 22 631,131
Pioneer Electronics Corp............ 27,000 1,099,389
Sanyo Electric Co., Ltd............. 98,000 861,558
Sony Corp........................... 9,100 922,969
Toshiba Corp........................ 129,000 1,039,783
Trend Micro, Inc.*.................. 4,000 537,109
------------
13,849,684
------------
MEXICO -- 0.2%
Telefonos de Mexico S.A. -- ADR..... 4,700 249,981
------------
NETHERLANDS -- 2.7%
Akzo Nobel N.V.*.................... 11,400 480,865
ASM Lithography Holding N.V. --
ADR*.............................. 25,500 823,969
Koninklijke Ahold N.V............... 14,100 399,779
Koninklijke Numico N.V.............. 13,500 692,745
Koninklijke (Royal) Philips
Electronics N.V. -- ADR........... 19,959 848,258
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
3
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- CONTINUED
--------------------------------------------------------------------------------
WORLDWIDE GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
----------------------------------------------------------------
<S> <C> <C>
COMMON STOCK & EQUIVALENTS (Continued)
----------------------------------------------------------------
Netherlands (Continued)
Qiagen N.V.*........................ 9,000 $ 428,871
STMicroelectronics N.V.............. 14,900 709,613
------------
4,384,100
------------
REPUBLIC OF CHINA -- 0.3%
PetroChina Co., Ltd. Cl. H.......... 2,636,000 537,556
------------
RUSSIA -- 0.3%
OAO Lukoil Holding -- ADR........... 8,000 460,800
------------
SINGAPORE -- 1.0%
Flextronics International, Ltd.*.... 14,800 1,215,450
Singapore Airlines, Ltd............. 40,000 379,245
------------
1,594,695
------------
SOUTH KOREA -- 0.3%
Korea Electric Power Corp........... 19,930 520,076
------------
SPAIN -- 1.2%
Altadis S.A......................... 45,100 650,705
Banco Santander Central Hispano..... 84,500 927,614
Endesa S.A.......................... 22,500 422,914
------------
2,001,233
------------
SWEDEN -- 1.4%
LM Ericsson Telephone Co. Cl. B --
ADR............................... 49,500 733,219
Nordic Baltic Holding (NBH) AB...... 82,500 590,937
Svenska Handelsbanken AB Cl. A...... 60,900 979,913
------------
2,304,069
------------
SWITZERLAND -- 2.8%
Nestle S.A.......................... 400 833,140
Serono S.A. -- ADR*................. 63,300 1,914,825
Serono S.A. Cl. B................... 500 610,391
UBS A............................... 4,200 558,898
Zurich Allied AG*................... 1,510 698,039
------------
4,615,293
------------
UNITED KINGDOM -- 7.7%
Amevescap PLC....................... 47,600 1,030,313
BAA PLC............................. 62,400 493,582
Barclays PLC........................ 16,500 456,679
BG Group PLC........................ 168,000 1,067,447
Billiton PLC........................ 158,900 567,952
British Aerospace PLC............... 103,826 560,300
Cable & Wireless PLC................ 43,400 619,211
Centrica PLC........................ 243,400 781,811
CMG PLC............................. 41,500 803,173
<CAPTION>
NUMBER
OF SHARES VALUE
----------------------------------------------------------------
<S> <C> <C>
United Kingdom (Continued)
Energis PLC*........................ 73,000 $ 515,908
Logica PLC.......................... 45,800 1,506,664
Reuters Group PLC -- ADR............ 5,600 629,300
Rio Tinto PLC....................... 37,800 548,254
Royal Bank of Scotland Group PLC.... 52,700 1,112,654
SEMA Group PLC...................... 34,500 591,696
Shell Transport & Trading Co........ 98,000 798,360
Vodafone AirTouch PLC............... 160,100 597,687
------------
12,680,991
------------
UNITED STATES -- 48.1%
AES Corp.*.......................... 42,600 2,918,100
Amdocs, Ltd.*....................... 9,000 561,375
American International
Group, Inc........................ 17,900 1,712,806
Amgen, Inc.*........................ 17,700 1,235,957
Ariba, Inc.*........................ 15,500 2,220,617
AT&T Corp.-Liberty Media Group
Cl. A*............................ 119,400 2,149,200
CIENA Corp.*........................ 26,700 3,279,094
Cisco Systems, Inc.*................ 60,700 3,353,675
Citigroup, Inc...................... 66,800 3,611,375
Comverse Technology, Inc.*.......... 4,500 486,000
Corning, Inc........................ 7,977 2,369,169
Corvis Corp.*....................... 24,600 1,501,754
EMC Corp.*.......................... 27,500 2,725,938
Enron Corp.......................... 44,800 3,925,600
Genentech, Inc.*.................... 13,400 2,488,213
Intel Corp.......................... 51,700 2,148,781
JDS Uniphase Corp.*................. 9,600 909,000
Juniper Networks, Inc.*............. 11,200 2,452,100
MGM Grand, Inc...................... 105,500 4,028,780
Network Appliance, Inc.*............ 16,300 2,076,213
Nextel Communications, Inc. Cl.
A*................................ 37,500 1,753,125
Oracle Corp.*....................... 32,300 2,543,625
Pfizer, Inc......................... 67,600 3,037,775
Qwest Communications
International, Inc.*.............. 50,300 2,417,544
Santa Fe International Corp......... 73,700 3,321,106
Siebel Systems, Inc.*............... 35,400 3,940,463
Sun Microsystems, Inc.*............. 22,300 2,603,525
Transocean Sedco Forex, Inc......... 10,100 592,113
VeriSign, Inc.*..................... 14,952 3,028,715
Veritas Software Corp.*............. 25,000 3,550,000
Viacom, Inc. Cl. A*................. 44,400 2,597,400
Wal-Mart Stores, Inc................ 48,800 2,348,500
Weatherford International, Inc...... 26,500 1,139,500
------------
79,027,138
------------
TOTAL COMMON STOCK & EQUIVALENTS
(Cost: $131,706,134)............................
158,362,634
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
4
<PAGE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
----------------------------------------------------------------
<S> <C> <C>
PREFERRED STOCK -- 1.2%
----------------------------------------------------------------
BRAZIL -- 0.7%
Banco Bradesco S.A.................. 96,470,000 $ 797,904
Telecomunicacoes Brasileiras
S.A. -- ADR....................... 4,700 371,888
------------
1,169,792
------------
GERMANY -- 0.5%
SAP AG.............................. 3,500 858,624
------------
TOTAL PREFERRED STOCK
(Cost: $2,015,893)..............................
2,028,416
------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 1.9%
----------------------------------------------------------------
Bank One Grand Cayman
6.110%, 10/02/00
(Cost: $3,140,078)................ $3,140,078 $ 3,140,078
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 99.5%
(Cost: $136,862,105)............................ 163,531,128
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.5%..... 715,850
------------
NET ASSETS -- 100.0%.............................. $164,246,978
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
5
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
WORLDWIDE GROWTH FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Aerospace/Defense............... 0.8%
Airlines........................ 0.2
Airport
Development/Maintenance....... 0.3
Audio/Video Products............ 1.2
Auto Manufacturers.............. 0.5
Auto Parts & Equipment.......... 0.1
Banking......................... 3.7
Biotechnology................... 3.8
Broadcasting.................... 1.3
Chemicals....................... 0.3
Commercial Banks................ 1.1
Computer -- Integrated
Systems....................... 0.4
Computer Services............... 3.4
Computer Software............... 7.6
Computers....................... 2.9
Diversified Financial
Services...................... 3.2
Diversified Manufacturing....... 3.9
Diversified Operations.......... 1.2
Drilling........................ 0.2
Drugs/Pharmaceuticals........... 5.9
Electric........................ 3.5
Electronic
Components/Semiconductors..... 3.7
Electronics..................... 2.0
Energy.......................... 0.9
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Food............................ 0.6%
Hotels/Motels................... 0.3
Insurance....................... 2.5
Internet Software............... 3.4
Leisure/Gaming.................. 2.5
Mining.......................... 0.7
Money Center Banks.............. 2.3
Multimedia...................... 2.0
Networking Products............. 5.7
Oil & Gas Producers............. 3.3
Oil & Gas Services.............. 4.2
Paper & Related Products........ 0.3
Pipelines....................... 2.4
Real Estate Development......... 1.0
Retail -- Discount.............. 1.4
Retail -- Food.................. 0.2
Telecommunications.............. 5.6
Telecommunications Equipment.... 7.7
Television...................... 0.9
Tobacco......................... 0.4
Other Assets in Excess of
Liabilities................... 0.5
-----
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 Quantitative
Research and Portfolio Management; LORETTA J. MORRIS, Partner, Portfolio
Manager; RANDALL S. KAHN, CFA, Partner, Portfolio Manager; PEDRO V. MARCAL,
Partner, Portfolio Manager; ERNESTO RAMOS, PH.D., Partner, Portfolio Manager;
MELISA GRIGOLITE, 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: After posting strong gains in 1999 and early this year, the
majority of the world's equity markets registered losses during the six-month
period ended September 30, 2000.
In the United States, concerns over rising interest rates, high valuations
among technology stocks and signs of resurgent inflation dragged equity prices
down early in the period. Following a brief summer rally, stocks again traded
lower due to uncertainty over the impact that higher oil prices, a weak euro and
upcoming US elections would have on corporate profitability. Technology stocks
were at the forefront of the market's decline, with the tech-heavy Nasdaq
Composite losing 19.7% during the six-month period.
Overseas markets moved in tandem with the US market. In Europe, worries about
oil prices, the ailing euro and higher interest rates sent markets lower, most
notably for technology issues. And in Japan, the central bank's decision to
raise interest rates for the first time in over 10 years added to concerns over
the economy's fledgling recovery. Weakness in the technology sector also
contributed to the market's decline.
PERFORMANCE: For the six-month period ended September 30, 2000, the Fund
declined 9.3% versus an 8.4% drop in the MSCI World Index.
PORTFOLIO SPECIFICS: Stock selection in the United States and within the
commercial/industrial services sector unfavorably impacted the Fund's results
during the period.
Exposure to Israel, one of the world's best-performing equity markets, and
stock selection in the utilities and technology sectors contributed positively
to returns.
Examples of US stocks that helped performance in this period are AES
Corporation, an electric utility company, and JDS Uniphase, an optical component
vendor. Overseas, top performers included Koninklijke Philips Electronics, the
Dutch parent company of consumer electronics maker, Philips; as well as Nokia
and Ericsson, telecommunications equipment manufacturers based in Finland and
Sweden, respectively.
MARKET OUTLOOK: Despite prevailing concerns, there are many positive themes
influencing world stock markets, including:
- Productivity-enhancing technological advances
- Tax and pension reform, particularly in Europe, which stand to boost
economic growth and stimulate demand for equities
- Deregulation, privatization and restructuring, which increase global
competitiveness
- The breakdown of country barriers, which increases trade among nations
As a result, we remain confident about the prospects for the Global Blue Chip
Fund.
--------------------------------------------------------------------------------
7
<PAGE>
GLOBAL BLUE CHIP FUND INSTITUTIONAL SHARES -- UNAUDITED
------------------------------------------------------------------------
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
55.45% As of 9/30/00 46.70%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GLOBAL BLUE CHIP FUND INSTITUTIONAL SHARES MSCI WORLD INDEX
<S> <C> <C>
09/30/97 $250,000.00 $250,000.00
10/97 $235,000.00 $236,800.00
11/97 $236,200.00 $240,944.00
12/97 $247,000.00 $243,835.33
01/98 $255,800.00 $250,589.57
02/98 $275,000.00 $267,499.35
03/98 $296,200.00 $278,761.07
04/98 $310,400.00 $281,442.75
05/98 $311,200.00 $277,874.06
06/98 $325,800.00 $284,431.89
07/98 $334,000.00 $283,919.91
08/98 $277,000.00 $246,016.60
09/98 $286,800.00 $250,321.89
10/98 $298,200.00 $272,900.93
11/98 $319,686.98 $289,083.95
12/98 $361,060.62 $303,162.34
01/99 $397,186.86 $309,771.28
02/99 $377,610.07 $301,500.39
03/99 $413,332.67 $314,012.65
04/99 $428,469.36 $326,353.35
05/99 $414,745.42 $314,382.71
06/99 $463,384.67 $329,001.51
07/99 $473,677.62 $327,971.73
08/99 $491,841.65 $327,345.31
09/99 $507,785.64 $324,127.50
10/99 $557,635.82 $340,917.31
11/99 $652,092.28 $350,464.01
12/99 $828,075.34 $378,781.51
01/00 $772,142.74 $357,046.64
02/00 $903,652.56 $357,966.75
03/00 $870,638.69 $382,666.46
04/00 $805,975.14 $366,442.55
05/00 $766,140.22 $357,134.91
06/00 $816,070.29 $369,116.78
07/00 $792,060.20 $358,681.48
08/00 $854,813.85 $370,304.56
9/30/00 $789,331.78 $350,571.03
</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 SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
GLOBAL BLUE CHIP FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
----------------------------------------------------------------
COMMON STOCK -- 97.9%
----------------------------------------------------------------
BRAZIL -- 2.9%
Embraer -- Empresa Brasileira de
Aeronautica S.A. -- ADR*............ 5,000 $ 155,000
Petroleo Brasileiro S.A. -- ADR*...... 4,700 141,294
Tele Norte Leste Participacoes S.A.
(Telemar) -- ADR.................... 6,300 144,113
Uniao de Bancos Brasileiros S.A.
(Unibanco) -- GDR................... 4,400 145,200
-----------
585,607
-----------
CANADA -- 5.8%
Biovail Corp.*........................ 3,700 301,319
Bombardier, Inc. Cl. B................ 14,200 245,381
C-MAC Industries, Inc.*............... 3,100 177,190
Nortel Networks Corp.................. 7,500 446,719
-----------
1,170,609
-----------
FRANCE -- 4.1%
Alcatel............................... 2,900 185,535
Aventis S.A........................... 6,000 450,050
Total Fina Elf S.A.................... 1,300 190,203
-----------
825,788
-----------
GERMANY -- 5.2%
Bayerische Motoren Werke (BMW) AG..... 6,300 215,150
Dresdner Bank AG...................... 6,800 296,133
E.On AG............................... 4,000 206,140
SAP AG -- ADR......................... 5,500 338,250
-----------
1,055,673
-----------
HONG KONG -- 3.4%
Cheung Kong (Holdings), Ltd.*......... 18,000 217,011
HSBC Holdings PLC..................... 16,400 230,324
Hutchison Whampoa, Ltd................ 19,000 252,217
-----------
699,552
-----------
IRELAND -- 1.0%
Allied Irish Banks PLC................ 19,900 214,592
-----------
ISRAEL -- 1.9%
Teva Pharmaceutical Industries,
Ltd. -- Spn. ADR.................... 5,200 380,575
-----------
JAPAN -- 4.1%
Furukawa Electric Co., Ltd............ 8,000 220,988
NEC Corp.............................. 8,000 181,751
Nippon Sheet Glass Co., Ltd........... 13,000 208,727
Nomura Securities Co., Ltd............ 10,000 217,472
-----------
828,938
-----------
SINGAPORE -- 1.6%
Flextronics International, Ltd.*...... 4,000 328,500
-----------
SWEDEN -- 0.6%
Handelsbanken AB -- Cl. A............. 7,500 120,679
-----------
<CAPTION>
NUMBER
OF SHARES VALUE
----------------------------------------------------------------
<S> <C> <C>
Sweden (Continued)
SWITZERLAND -- 1.5%
Credit Suisse Group -- Regd........... 1,000 $ 186,878
Nestle S.A. -- Regd................... 60 124,971
-----------
311,849
-----------
UNITED KINGDOM -- 5.8%
Amvescap PLC ......................... 12,600 272,730
BG Group PLC.......................... 32,400 205,865
Logica PLC............................ 7,900 259,883
Royal Bank of Scotland Group PLC...... 13,600 287,137
Shell Transport & Trading Co. PLC..... 17,600 143,379
-----------
1,168,994
-----------
UNITED STATES -- 60.0%
AES Corp.*............................ 6,200 424,700
ALZA Corp.*........................... 4,800 415,200
American International Group, Inc..... 2,700 258,356
Apache Corp........................... 6,500 384,313
AT&T Corp. -- Liberty Media Corp.
Cl. A*.............................. 8,700 156,600
Avanex Corp.*......................... 2,000 215,375
Bank One Corp......................... 5,400 208,575
BJ Services Co.*...................... 3,400 207,825
CIENA Corp.*.......................... 2,800 343,875
CIGNA Corp............................ 2,400 250,560
Cisco Systems, Inc.*.................. 4,900 270,725
Citigroup, Inc........................ 8,266 446,881
Commerce One, Inc.*................... 4,000 314,000
Conexant Systems, Inc.*............... 4,500 188,438
CONSOL Energy, Inc.................... 11,400 183,113
Corvis Corp.*......................... 2,300 140,408
Countrywide Credit
Industries, Inc..................... 5,800 218,950
EMC Corp.*............................ 2,100 208,163
Enron Corp............................ 5,100 446,886
Exodus Communications, Inc.*.......... 3,900 192,562
Genentech, Inc.*...................... 1,500 278,531
Goldman Sachs Group, Inc.............. 1,700 193,694
Human Genome Sciences, Inc.*.......... 1,100 190,437
Juniper Networks, Inc.*............... 2,600 569,237
MGM Mirage, Inc....................... 6,500 248,219
Oracle Corp.*......................... 4,400 346,500
Palm, Inc.*........................... 7,800 412,912
PE Corp-PE Biosystems Group........... 2,500 291,250
QUALCOMM, Inc.*....................... 2,700 192,375
Sanmina Corp.*........................ 4,100 383,862
Schlumberger, Ltd..................... 4,900 403,331
Scientific-Atlanta, Inc............... 3,800 241,775
Stilwell Financial, Inc.*............. 6,500 282,750
StorageNetworks, Inc.*................ 1,600 163,500
Sun Microsystems, Inc.*............... 4,000 467,000
Tenet Healthcare Corp.*............... 12,000 436,500
Ultramar Diamond Shamrock Corp........ 11,900 301,962
UnitedHealth Group, Inc............... 2,900 286,375
VERITAS Software Corp.*............... 1,400 198,800
Vitria Technology, Inc.*.............. 4,500 209,812
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
9
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- CONTINUED
--------------------------------------------------------------------------------
GLOBAL BLUE CHIP FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
----------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (Continued)
----------------------------------------------------------------
United States (Continued)
Waste Management, Inc................. 13,800 $ 240,638
Waters Corp.*......................... 4,200 373,800
-----------
12,188,765
-----------
TOTAL COMMON STOCK
(Cost: $17,480,005)..............................
19,880,121
-----------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 2.9%
----------------------------------------------------------------
HSBC Holding PLC
6.110%, 10/2/00
(Cost: $583,277).................... $583,277 $ 583,277
-----------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 100.8%
(Cost: $18,063,282)............................. 20,463,398
LIABILITIES IN EXCESS OF OTHER
ASSETS -- (0.8)%.................................. (165,351)
-----------
NET ASSETS -- 100.0%.............................. $20,298,047
-----------
-----------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
10
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
GLOBAL BLUE CHIP FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Aerospace/Defense............... 0.8%
Auto Manufacturers.............. 1.1
Banking......................... 2.9
Biotechnology................... 2.3
Building & Construction......... 1.0
Casinos/Hotels.................. 1.2
Commercial Banks................ 3.4
Computer Services............... 2.1
Computer Software............... 4.4
Computers....................... 3.3
Diversified Financial
Services...................... 8.0
Diversified Manufacturing....... 2.8
Diversified Operations.......... 1.2
Drugs/Pharmaceuticals........... 7.6
E-commerce...................... 1.5
Electric........................ 2.1
Electronic
Components/Semiconductors..... 7.3
Energy.......................... 0.9
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Gas/Distribution................ 1.0%
Instruments -- Scientific....... 3.3
Insurance....................... 2.5
Internet Software............... 2.0
Medical -- HMO.................. 3.7
Money Center Banks.............. 4.9
Networking Products............. 4.8
Oil & Gas Producers............. 4.2
Oil & Gas Services.............. 5.2
Oil Refining & Marketing........ 1.5
Real Estate Development......... 1.1
Telecommunications Equipment.... 8.0
Telecommunications.............. 1.5
Waste Disposal.................. 1.2
Wireless Equipment.............. 2.0
Liabilities in Excess of Other
Assets........................ (0.8)
-----
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 Quantitative
Research and Portfolio Management; LORETTA J. MORRIS, Partner, Portfolio
Manager; RANDALL S. KAHN, CFA, Partner, Portfolio Manager; PEDRO V. MARCAL,
Partner, Portfolio Manager; ERNESTO RAMOS, PH.D., Partner, Portfolio Manager;
MELISA 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: After posting strong advances in 1999 and the first quarter
of 2000, many of the world's stock markets declined in the six-month period
ended September 30, 2000, due to concerns over:
- Rising energy prices. Oil prices surged to their highest levels since the
Gulf War.
- A weakening euro. The ailing currency has fallen over 25% versus the US
dollar and Japanese yen since it was introduced in January 1999.
- Higher interest rates. In the United States, the Federal Reserve raised
short-term interest rates by one half of a percentage point in May -- its
sixth rate hike since June of last year. The European Central Bank hiked
rates three times during the period, raising rates a total of 1% for its 11
member countries. And the Bank of Japan boosted interest rates for the first
time in over 10 years.
Technology stocks were at the forefront of the world equity market's decline,
as worries about valuations and corporate profit growth created selling
pressure. In the United States, the tech heavy Nasdaq Composite dropped 19.7% in
the six-month period; in Europe and Japan, the tech-laden Easdaq and Jasdaq
indices tumbled 42.0% and 29.5%, respectively.
PERFORMANCE: From April 1, 2000 through September 30, 2000, the Fund fell
10.8% versus its MSCI World Index benchmark, which lost 8.4%.
PORTFOLIO SPECIFICS: Stock selection in the United States and within the
commercial/industrial services sector detracted from the Fund's results this
period.
On the positive side, exposure to Israel helped the Fund, since Israel was one
of the world's best-performing stock markets this period. Stock selection in the
technology and utility sectors also helped returns.
In the United States, top-performing holdings included AES Corporation, an
electric utility company, and JDS Uniphase, an optical component vendor.
Overseas, stocks that favorably impacted performance included Koninklijke
Philips Electronics, the Dutch parent company of consumer electronics maker,
Philips; and Nokia and Ericsson, telecommunications equipment manufacturers
headquartered in Finland and Sweden, respectively.
MARKET OUTLOOK: Our long-term outlook for the world equity markets remains
positive as structural reform, technological innovation and corporate
restructuring transform the global investment landscape. In the near term,
however, consensus expectations are for a slowdown in worldwide economic growth
and corporate profitability. In this environment, we remain confident that
consistent application of our bottom-up investment process will lead us to
companies with the best earnings prospects.
--------------------------------------------------------------------------------
12
<PAGE>
GLOBAL GROWTH & INCOME FUND INSTITUTIONAL SHARES -- UNAUDITED
------------------------------------------------------------------------
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
25.20% As of 9/30/00 26.38%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
GLOBAL GROWTH &
INCOME FUND
INSTITUTIONAL SHARES MSCI WORLD INDEX
<S> <C> <C>
6/30/97 $250,000.00 $250,000.00
07/97 $286,200.00 $261,475.00
08/97 $285,000.00 $243,930.03
09/97 $318,200.00 $257,151.03
10/97 $298,200.00 $243,573.46
11/97 $304,209.44 $247,836.00
12/97 $311,683.44 $250,810.03
01/98 $314,057.27 $257,757.47
02/98 $325,926.40 $275,150.94
03/98 $340,620.39 $286,734.79
04/98 $346,830.86 $289,493.18
05/98 $344,394.44 $285,822.41
06/98 $354,921.78 $292,567.82
07/98 $361,302.73 $292,041.20
08/98 $303,343.75 $253,053.70
09/98 $311,071.61 $257,482.14
10/98 $319,880.28 $280,707.02
11/98 $335,735.87 $297,352.95
12/98 $355,716.41 $311,834.04
01/99 $370,874.78 $318,632.02
02/99 $359,506.00 $310,124.55
03/99 $385,350.69 $322,994.72
04/99 $397,004.95 $335,688.41
05/99 $384,337.28 $323,375.36
06/99 $408,979.74 $338,412.31
07/99 $411,265.97 $337,353.08
08/99 $417,362.56 $336,708.74
09/99 $427,523.55 $333,398.89
10/99 $453,688.09 $350,668.95
11/99 $508,099.33 $360,488.73
12/99 $610,612.71 $389,616.22
01/00 $563,305.11 $367,259.66
02/00 $618,758.39 $368,206.08
03/00 $599,960.67 $393,612.30
04/00 $556,725.91 $376,924.32
05/00 $534,168.64 $367,350.45
06/00 $555,002.52 $379,675.05
07/00 $532,739.71 $368,941.26
08/00 $573,189.04 $380,896.80
09/30/00 $535,248.19 $360,598.81
</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 SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
GLOBAL GROWTH & INCOME FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
------------------------------------------------------------
COMMON STOCK -- 93.9%
------------------------------------------------------------
BRAZIL -- 2.8%
Petroleo Brasileiro S.A. -- ADR*... 1,700 $ 51,106
Tele Norte Leste Participacoes --
ADR.............................. 1,500 34,313
Uniao de Bancos Brasileiros S.A.... 1,800 59,400
----------
144,819
----------
CANADA -- 3.9%
Bombardier, Inc. Cl. B............. 3,100 53,569
C-MAC Industries, Inc.*............ 800 45,726
Nortel Networks Corp............... 1,700 101,256
----------
200,551
----------
FRANCE -- 3.4%
Alcatel Alsthom S.A. -- ADR........ 600 37,725
Aventis S.A........................ 1,300 97,511
Total Fina Elf SA.................. 300 43,893
----------
179,129
----------
GERMANY -- 4.2%
Bayerische Motoren Werke AG........ 1,400 47,811
Dresdner Bank AG................... 1,500 65,323
SAP AG............................. 900 55,350
Veba AG............................ 1,000 51,535
----------
220,019
----------
HONG KONG -- 3.0%
Cheung Kong (Holdings), Ltd........ 4,000 48,225
HSBC Holdings PLC.................. 4,000 56,177
Hutchison Whampoa, Ltd............. 4,000 53,098
----------
157,500
----------
IRELAND -- 1.0%
Allied Irish Banks PLC............. 5,000 53,918
----------
ISRAEL -- 1.6%
Teva Pharmaceutical Industries,
Ltd. -- ADR...................... 1,100 80,506
----------
JAPAN -- 6.0%
Furukawa Electric Co., Ltd......... 2,000 55,247
Itochu Techno-Science Corp......... 400 73,293
NEC Corp........................... 3,000 68,157
Nippon Sheet Glass Co., Ltd........ 3,000 48,168
Nomura Securities Co., Ltd......... 3,000 65,242
----------
310,107
----------
SINGAPORE -- 1.3%
Flextronics International, Ltd..... 800 65,700
----------
SWEDEN -- 1.1%
Svenska Handelsbanken AB Cl. A..... 3,600 57,926
----------
<CAPTION>
NUMBER
OF SHARES VALUE
------------------------------------------------------------
<S> <C> <C>
SWITZERLAND -- 1.9%
Credit Suisse Group................ 200 $ 37,376
Nestle S.A......................... 30 62,486
----------
99,862
----------
UNITED KINGDOM -- 5.3%
Amvescap PLC....................... 3,000 64,936
BG Group PLC....................... 8,100 51,466
Logica PLC......................... 1,800 59,214
Royal Bank of Scotland Group PLC... 3,200 67,561
Shell Transport & Trading Co.
PLC.............................. 4,200 34,215
----------
277,392
----------
UNITED STATES -- 58.4%
AES Corp.*......................... 1,800 123,299
ALZA Corp.*........................ 1,300 112,450
American International
Group, Inc....................... 1,000 95,688
Apache Corp........................ 1,600 94,600
AT&T Corp. -- Liberty Media Corp.
Cl. A*........................... 2,800 50,400
Avanex Corp.*...................... 500 53,844
Bank One Corp...................... 1,300 50,213
BJ Services Co.*................... 900 55,013
Burlington Resources, Inc.......... 1,300 47,856
CIENA Corp.*....................... 600 73,688
CIGNA Corp......................... 900 93,960
Cisco Systems, Inc.*............... 1,238 68,400
Citigroup, Inc..................... 1,866 100,880
Commerce One, Inc.*................ 1,000 78,500
Conexant Systems, Inc.*............ 1,100 46,063
Corvis Corp.*...................... 600 36,628
Countrywide Credit
Industries, Inc.................. 1,300 49,075
Enron Corp......................... 1,300 113,912
Genentech, Inc.*................... 400 74,275
Goldman Sachs Group, Inc........... 400 45,575
Human Genome Sciences, Inc.*....... 300 51,938
Juniper Networks, Inc.*............ 700 153,255
MGM Grand, Inc..................... 2,900 110,743
Oracle Corp.*...................... 1,300 102,375
Palm, Inc.*........................ 1,900 100,581
PE Corp-PE Biosystems Group........ 600 69,900
Qualcomm, Inc.*.................... 700 49,875
Sanmina Corp.*..................... 800 74,900
Schlumberger, Ltd.................. 1,300 107,006
Scientific-Atlanta, Inc............ 800 50,900
Stilwell Financial, Inc.*.......... 1,600 69,600
StorageNetworks, Inc.*............. 800 81,750
Sun Microsystems, Inc.*............ 1,000 116,749
Tenet Healthcare Corp.*............ 3,000 109,125
UnitedHealth Group, Inc............ 800 79,000
VERITAS Software Corp.*............ 400 56,800
Vitria Technology, Inc.*........... 1,100 51,288
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
14
<PAGE>
-------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (Continued)
---------------------------------------------------------
UNITED STATES (CONTINUED)
Waste Management, Inc.............. 3,800 $ 66,263
Waters Corp.*...................... 800 71,200
----------
3,037,567
----------
TOTAL COMMON STOCK
(Cost: $4,323,909)............................ 4,884,996
----------
<CAPTION>
PRINCIPAL
AMOUNT
------------------------------------------------------------
<S> <C> <C>
CORPORATE BOND -- 2.0%
------------------------------------------------------------
UNITED STATES -- 2.0%
HCA -- Columbia HCA HealthCare
Corp.
8.750%, 09/01/10
(Cost: $100,625)................. $100,000 102,125
----------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------
<S> <C> <C>
US TREASURY OBLIGATION -- 2.0%
------------------------------------------------------------
US TREASURY BOND -- 2.0%
6.500%, 10/15/06
(Cost: $103,344)................. $100,000 $ 102,750
----------
------------------------------------------------------------
TIME DEPOSIT -- 1.0%
------------------------------------------------------------
Brown Brothers Harriman & Co.
6.110%, 10/02/00
(Cost: $53,544).................. 53,544 53,544
----------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 98.9%
(Cost: $4,581,422).............................. 5,143,415
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.1%..... 56,856
----------
NET ASSETS -- 100.0%.............................. $5,200,271
----------
----------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
15
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
GLOBAL GROWTH & INCOME FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Auto -- Cars/Light Trucks....... 0.9%
Banking......................... 5.3
Biotechnology................... 2.4
Broadcasting.................... 1.0
Building Products............... 0.9
Computer Services............... 2.5
Computer Software............... 3.0
Computers....................... 4.9
Diversified Financial
Services...................... 3.2
Diversified Manufacturing....... 1.0
Diversified Operations.......... 1.0
Drug Delivery Systems........... 2.2
Drugs/Pharmaceuticals........... 3.4
E-Commerce...................... 1.5
Electric........................ 2.4
Electronic
Components/Semiconductors..... 2.2
Electronics..................... 3.6
Financial Services.............. 1.8
Food -- Miscellaneous........... 1.2
Hotels -- Gaming................ 2.1
Instruments -- Scientific....... 2.7
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Insurance....................... 3.6%
Internet Software............... 1.0
Investment Management........... 2.6
Medical -- HMO.................. 1.5
Medical -- Hospitals............ 4.1
Miscellaneous................... 2.0
Miscellaneous Manufacturing..... 1.0
Money Center Banks.............. 4.4
Networking Products............. 5.0
Non-hazardous Waste Disposal.... 1.3
Oil & Gas Producers............. 7.4
Oil & Gas Services.............. 4.1
Real Estate Development......... 0.9
Telecommunications Equipment.... 7.1
Telecommunications.............. 0.7
Wire & Cable Products........... 1.1
Wireless Equipment.............. 1.9
Other Assets in Excess of
Liabilities................... 1.1
-----
NET ASSETS...................... 100.0%
=====
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
16
<PAGE>
GLOBAL TECHNOLOGY FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: ANDREW B. GALLAGHER, Partner, Portfolio Manager; LORETTA J.
MORRIS, Partner, Portfolio Manager; RANDALL S. KAHN, CFA, Partner, Portfolio
Manager; CHRISTOPHER ANGIOLETTI, Portfolio Manager; JASON CAMPBELL, Portfolio
Manager; EVAN LUNDQUIST, Portfolio Manager.
CHIEF INVESTMENT OFFICER: CATHERINE SOMHEGYI
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: Following outstanding results in 1999 and early 2000,
technology stocks around the world declined during the six months ended
September 30, 2000.
Continuing a downturn that started in March, US technology stocks traded lower
in April and May. Weakness was precipitated by investor concerns about
valuations, and stocks with the highest P/E ratios and P/E-to-growth ratios were
the hardest hit. The US sell-off infected technology stocks around the world,
triggering losses in Europe, Japan and South Korea. Throughout much of the
summer, technology issues rallied, buoyed by growing confidence that after six
interest rate hikes the US Federal Reserve had adopted a course of steady
monetary policy. However, warnings of lower-than-expected third quarter earnings
from market leaders like Intel and Apple Computer, dragged technology stocks
down in September.
PERFORMANCE: For the six-month period ended September 30, 2000, the Fund fell
9.2% versus a 13.9% drop in the Merrill Lynch Global Technology 100 Index.
PORTFOLIO SPECIFICS: The Fund 's outperformance relative to its benchmark this
period was due to stock selection, particularly in the United States.
Top-performing holdings included CIENA, a supplier of optical network
equipment; JDS Uniphase, an optical component vendor; and Juniper Networks, an
Internet infrastructure company.
During the period, on a company-specific basis, we increased the Fund's
holdings in the software and computers/office automation industries and reduced
exposure to telecommunication services companies. We also reduced the Fund's
exposure to Europe while adding to Pacific Rim holdings.
MARKET OUTLOOK: Despite its recent sell-off, the long-term potential of the
technology sector remains strong due to:
- The continued build-out of the Internet and wireless communications
- Implementation of e-business models
- Development of major new markets like China, Brazil and India.
As a result, we are confident that our bottom-up approach and global research
perspective will lead us to technology companies with the strongest fundamentals
and earnings visibility.
--------------------------------------------------------------------------------
17
<PAGE>
GLOBAL TECHNOLOGY FUND INSTITUTIONAL SHARES -- UNAUDITED
------------------------------------------------------------------------
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
113.78% As of 9/30/00 210.74%
</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>
7/31/98 $250,000.00 $250,000.00
08/98 $205,800.00 $193,370.00
09/98 $236,000.00 $225,062.18
10/98 $244,000.00 $248,156.04
11/98 $361,400.00 $281,810.22
12/98 $454,200.00 $333,722.76
01/99 $638,200.00 $379,272.24
02/99 $668,000.00 $335,504.23
03/99 $893,000.00 $371,327.69
04/99 $980,800.00 $388,033.35
05/99 $940,000.00 $396,729.18
06/99 $1,097,800.00 $450,426.87
07/99 $1,154,200.00 $440,026.06
08/99 $1,292,000.00 $463,969.20
09/99 $1,364,800.00 $476,825.32
10/99 $1,609,600.00 $523,789.28
11/99 $2,008,791.24 $631,742.25
12/99 $2,696,739.78 $776,610.23
01/00 $2,702,522.80 $763,679.67
02/00 $3,705,299.17 $994,540.03
03/00 $3,212,816.85 $948,085.06
04/00 $2,759,196.44 $853,238.63
05/00 $2,429,795.39 $745,670.84
06/00 $2,953,274.73 $848,347.48
07/00 $2,789,730.81 $789,696.13
08/00 $3,227,158.74 $929,527.62
9/30/00 $2,917,651.30 $816,526.80
</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 SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
GLOBAL TECHNOLOGY FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
------------------------------------------------------------------
COMMON STOCK & EQUIVALENTS -- 100.4%
------------------------------------------------------------------
BRITISH VIRGIN ISLANDS -- 0.7%
OpenTV Corp. Cl. A*................... 62,500 $ 2,078,125
------------
CANADA -- 8.6%
AimGlobal Technologies Co., Inc.*..... 165,000 1,228,233
ATS Automation Tooling
Systems, Inc.*...................... 65,700 1,347,099
Celestica, Inc........................ 59,600 4,105,769
Certicom Corp......................... 87,300 3,458,115
C-MAC Industries, Inc.(CAD)*.......... 74,600 4,263,990
C-MAC Industries, Inc. (USD)*......... 17,500 1,006,250
Cognos, Inc.*......................... 104,600 4,262,450
Nortel Networks Corp.................. 103,600 6,170,675
Roctest, Ltd.......................... 47,100 516,516
------------
26,359,097
------------
DENMARK -- 1.4%
GN Store Nord AS...................... 30,200 4,286,627
------------
FRANCE -- 0.9%
Alcatel............................... 41,800 2,674,265
------------
GERMANY -- 3.3%
ADVA AG Optical Networking*........... 44,800 4,249,879
Aixtron AG............................ 11,400 1,428,510
Intershop Communications AG*.......... 16,000 1,041,997
SAP AG Pfd............................ 13,800 3,385,431
------------
10,105,817
------------
HONG KONG -- 1.5%
Computer & Tech Holdings, Ltd.*....... 2,348,000 1,761,711
Hutchison Whampoa, Ltd.*.............. 206,000 2,734,566
------------
4,496,277
------------
ISRAEL -- 1.9%
Check Point Software Technologies,
Ltd.*............................... 37,400 5,890,500
------------
JAPAN -- 7.7%
Furukawa Electric Co., Ltd............ 105,000 2,900,472
Hikari Tsushin, Inc.*................. 17,900 687,442
Itochu Techno-Science Corp............ 9,600 1,759,023
Mitsubishi Electric Corp.............. 173,000 1,432,862
NEC Corp.............................. 67,000 1,522,164
Nippon Sheet Glass Co................. 141,000 2,263,882
Oki Electric Industry Co., Ltd.*...... 225,000 1,557,468
Sanyo Electric Company Co., Ltd....... 195,000 1,714,325
Softbank Corp......................... 15,900 1,486,119
Sony Corp............................. 29,600 3,002,184
Sumitomo Osaka Cement Co., Ltd........ 583,000 2,487,165
Toshiba Corp.......................... 356,000 2,869,480
------------
23,682,586
------------
REPUBLIC OF KOREA -- 2.3%
Hyundai Electronic Industies Co.,
Ltd.*............................... 243,300 3,479,922
LG Cable, Ltd......................... 241,900 3,687,665
------------
7,167,587
------------
SINGAPORE -- 2.0%
Datacraft Asia, Ltd.*................. 322,400 2,675,920
<CAPTION>
NUMBER
OF SHARES VALUE
------------------------------------------------------------------
<S> <C> <C>
Singapore (Continued)
Flextronics International, Ltd.*...... 20,700 $ 1,699,988
NatSteel Electronics, Ltd............. 617,000 1,595,415
------------
5,971,323
------------
SOUTH KOREA -- 0.6%
Samsung Electronics*.................. 9,490 1,719,033
------------
TAIWAN -- 1.7%
Taiwan Semiconductor Manufacturing
Co., Ltd. -- ADR*................... 137,008 2,791,538
United Microelectronics Corp. --
ADR*................................ 88,000 1,045,000
United Microelectronics Corp.*........ 599,000 1,280,977
------------
5,117,515
------------
UNITED KINGDOM -- 6.4%
Baltimore Technologies PLC*........... 324,200 3,307,375
Bookham Technology PLC -- ADR*........ 59,000 2,529,625
International Quantum Epitaxi PLC*.... 227,000 1,816,000
Logica PLC*........................... 148,000 4,868,701
Spirent PLC*.......................... 407,300 4,034,693
Vodafone AirTouch PLC................. 843,800 3,150,085
------------
19,706,479
------------
UNITED STATES -- 61.4%
Agile Software Corp.*................. 51,700 4,649,769
Applied Micro Circuits Corp.*......... 34,900 7,226,481
Art Technology Group, Inc.*........... 54,600 5,173,350
Avanex Corp.*......................... 51,300 5,524,369
Avici Systems, Inc.*.................. 24,250 2,306,781
Broadcom Corp.*....................... 17,400 4,241,250
Broadvision, Inc.*.................... 71,000 1,823,812
Brocade Communications
Systems, Inc.*...................... 35,800 8,448,800
Cacheflow, Inc.*...................... 37,500 5,362,500
CIENA Corp.*.......................... 41,100 5,047,593
Conexant Systems, Inc.*............... 64,900 2,717,687
Corvis Corp.*......................... 19,800 1,208,728
Cosine Communications, Inc.*.......... 16,100 894,556
Critical Path, Inc.*.................. 25,300 1,536,975
Descartes Systems Group, Inc.*........ 40,400 1,999,800
Efficient Networks, Inc.*............. 51,800 1,932,787
EMC Corp.*............................ 44,200 4,381,325
Emulex Corp.*......................... 36,400 4,459,000
Exodus Communications, Inc.*.......... 32,900 1,624,437
Extreme Networks, Inc.*............... 32,800 3,755,600
Finisar Corp.*........................ 74,600 3,608,775
Globespan, Inc.*...................... 27,800 3,391,600
I2 Technologies, Inc.*................ 32,800 6,135,650
Interwoven, Inc.*..................... 17,500 1,978,594
JDS Uniphase Corp.*................... 28,920 2,738,363
Juniper Networks, Inc.*............... 23,700 5,188,819
Maxim Integrated Products, Inc.*...... 38,900 3,129,019
Network Appliance, Inc.*.............. 37,100 4,725,613
Newport Corp.......................... 18,500 2,946,414
Nuance Communications, Inc.*.......... 12,800 1,557,600
Oracle Corp.*......................... 30,100 2,370,375
PMC -- Sierra, Inc.*.................. 30,000 6,457,500
Quest Software, Inc.*................. 87,000 5,403,518
Redback Networks, Inc.*............... 18,300 3,001,200
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
19
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- CONTINUED
--------------------------------------------------------------------------------
GLOBAL TECHNOLOGY FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK & EQUIVALENTS (Continued)
------------------------------------------------------------------
United States (Continued)
SDL, Inc.*............................ 21,800 $ 6,743,013
Siebel Systems, Inc.*................. 54,200 6,033,138
StorageNetworks, Inc.*................ 16,150 1,650,328
Sun Microsystems, Inc.*............... 25,500 2,977,125
Sycamore Networks, Inc.*.............. 41,200 4,449,600
Tollgrade Communications, Inc.*....... 10,800 1,499,175
TranSwitch Corp.*..................... 71,300 4,545,375
Turnstone Systems, Inc.*.............. 111,700 5,180,088
Verisign, Inc.*....................... 41,687 8,444,223
Veritas Software Corp.*............... 70,525 10,014,548
Webmethods, Inc.*..................... 48,800 5,618,100
Xilinx, Inc.*......................... 39,500 3,382,187
------------
187,485,540
------------
TOTAL COMMON STOCK & EQUIVALENTS
(Cost: $257,619,306)..............................
306,740,771
------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 0.0%
------------------------------------------------------------------
Brown Brothers Harriman & Co.
6.112%, 10/02/00
(Cost: $6,774)...................... $6,774 $ 6,774
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 100.4%
(Cost: $257,626,080)............................ 306,747,545
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.4%)... (1,153,972)
------------
NET ASSETS -- 100.0%.............................. $305,593,573
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
20
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
GLOBAL TECHNOLOGY FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Computer Services............... 12.5%
Computer Software............... 11.6
Computers....................... 3.7
Diversified Operations.......... 1.3
Electronic
Components/Semiconductors..... 23.2
Electronics..................... 0.9
Instruments..................... 1.0
Internet Content................ 0.5
Internet Software............... 11.6
Machinery....................... 0.4
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Miscellaneous Manufacturing..... 4.2%
Multimedia...................... 1.0
Networking Products............. 10.0
Other Commercial Services....... 0.5
Telecommunication Equipment..... 11.5
Telecommunications.............. 6.5
Liabilities in Excess of Other
Assets........................ (0.4)
-----
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: Global health care stocks posted strong gains during the
six-months ended September 30, 2000, fueled by:
- Completion of the initial sequencing of the human genome, mankind's genetic
blueprint. This historic achievement sets the stage for new ways to prevent,
diagnose, treat and cure disease.
- Several strong product launches and promising test results for drugs in the
pipeline within the specialty pharmaceutical industry.
- Gains in large-cap pharmaceutical stocks as the prospects for a slowdown in
worldwide economic expansion attracted investors seeking stable earnings
growth.
PERFORMANCE: The Fund gained 38.0% from April 1, 2000 through September 30,
2000, outperforming the Russell 3000 Healthcare Index, which was up 22.2%.
PORTFOLIO SPECIFICS: The Fund's strong performance relative to its benchmark
was primarily due to stock selection and an overweighting in specialty
pharmaceutical and biotechnology companies. The Fund benefited from
participation in the initial public offerings of health care companies in the
period.
Among the Fund's best-performing United States holdings were Dyax, a provider
of technologies and products that accelerate drug discovery; OSI
Pharmaceuticals, a research and development firm that discovers new drug
candidates for major pharmaceutical companies; and Cell Therapeutics, a company
that focuses on identifying new, less toxic ways to treat cancer. Outside the
United States, top performers included Straumann Holdings, a maker of oral
implants and restorative dentistry products based in Switzerland, and Teva
Pharmaceuticals, the world's leading generic drug company headquartered in
Israel.
We are pleased to report that the Nicholas-Applegate Health Care Fund
(inception date 9/1/99) marked its one-year anniversary in August with
exceptional results. For the 12-month period ended August 31, 2000, the Fund
advanced 213.0% versus 15.8% for the Russell 3000 Healthcare Index. As of
August 31,2000, the Nicholas-Applegate Global Health Care Fund was ranked second
among 68 funds in the Lipper Health and Biotechnology category for the 12 months
ended August 31.
MARKET OUTLOOK: We believe the outlook for global health care stocks remains
outstanding as scientific and technological breakthroughs speed up innovation in
this dynamic sector. Near term, while still positive, we expect upside
volatility as investors reconcile companies' strong fundamentals with relatively
high valuations. Despite changing market conditions, we remain focused on
identifying and investing in health care companies worldwide exhibiting strong
fundamentals.
--------------------------------------------------------------------------------
22
<PAGE>
GLOBAL HEALTH CARE FUND INSTITUTIONAL SHARES -- UNAUDITED
------------------------------------------------------------------------
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>
SINCE
1 YEAR ANNUALIZED TOTAL RETURNS INCEPTION
247.10% As of 9/30/00 211.12%
</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
09/99 $246,000.00 $230,545.75
10/99 $253,400.00 $253,221.77
11/99 $275,000.00 $257,443.99
12/99 $385,807.57 $241,880.73
01/00 $473,854.94 $258,100.52
02/00 $791,826.01 $245,681.50
03/00 $618,732.89 $247,226.10
04/00 $583,113.72 $261,278.93
05/00 $592,118.57 $273,740.36
06/00 $686,769.49 $297,183.21
07/00 $684,968.52 $279,702.60
08/00 $782,420.95 $289,579.74
9/30/00 $853,859.39 $302,209.76
</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.
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.
--------------------------------------------------------------------------------
23
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
GLOBAL HEALTH CARE FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
-------------------------------------------------------------------
COMMON STOCK -- 93.7%
-------------------------------------------------------------------
CANADA -- 2.3%
Biovail Corp.*........................ 47,700 $ 3,884,569
------------
FRANCE -- 1.0%
Aventis S.A........................... 21,800 1,635,180
------------
GERMANY -- 1.0%
Altana AG............................. 10,200 1,152,127
UMS United Medical Systems
International AG *.................. 28,000 531,235
------------
1,683,362
------------
ISRAEL -- 1.9%
Teva Pharmaceutical Industries,
Ltd. -- ADR......................... 44,100 3,227,569
------------
NETHERLANDS -- 0.9%
Koninklijke Numico N.V................ 30,000 1,539,434
------------
SWEDEN -- 1.2%
Perbio Science*....................... 67,600 659,649
PyroSequencing AB*.................... 87,900 1,313,983
------------
1,973,632
------------
SWITZERLAND -- 3.4%
Serono SA -- ADR*..................... 61,600 1,863,400
Straumann AG.......................... 600 1,336,496
Synthes-Stratec, Inc.*................ 2,000 1,358,482
Unilabs AG............................ 1,400 1,087,827
------------
5,646,205
------------
UNITED STATES -- 82.0%
Abbott Laboratories................... 67,200 3,196,200
Abgenix, Inc.*........................ 19,500 1,575,844
Allergan, Inc......................... 40,000 3,377,500
Alza Corp.*........................... 61,300 5,302,450
American Home Products Corp........... 56,000 3,167,500
AmeriSource Health Corp. Cl. A*....... 40,200 1,889,400
Andrx Corp-Andrx Group*............... 37,100 3,464,213
Applied Molecular Evolution*.......... 16,900 678,113
Barr Laboratories, Inc.*.............. 22,200 1,472,137
Bristol-Myers Squibb Co............... 55,200 3,153,300
Bruker Daltonics, Inc.*............... 28,000 1,242,500
Celera Genomics*...................... 27,800 2,769,575
Cell Therapeutics, Inc.*.............. 21,700 1,447,119
Charles River Laboratories
International, Inc.*................ 35,800 1,217,200
Ciphergen Biosystems, Inc.*........... 8,800 281,600
Connetics Corporation*................ 37,800 911,925
COR Therapeutics, Inc.*............... 52,400 3,265,175
Curon Medical, Inc.*.................. 17,900 205,850
Durect Corp.*......................... 4,300 64,500
Dyax Corp.*........................... 14,400 630,000
Enzon, Inc.*.......................... 77,600 5,121,600
Forest Laboratories, Inc. -- Cl. A*... 22,500 2,580,469
Genencor International, Inc.*......... 14,600 432,525
<CAPTION>
NUMBER
OF SHARES VALUE
-------------------------------------------------------------------
<S> <C> <C>
United States (Continued)
Genentech, Inc.*...................... 24,400 $ 4,530,775
Genomic Solutions, Inc.*.............. 49,700 854,219
Genzyme Corp.*........................ 29,900 2,038,806
Gilead Sciences, Inc.*................ 30,700 3,367,406
HCA-The Healthcare Company............ 139,100 5,164,087
Human Genome Sciences, Inc.*.......... 29,100 5,037,937
ICOS Corp*............................ 34,700 1,878,137
IDEC Pharmaceuticals Corp.*........... 20,500 3,594,868
Invitrogen Corp.*..................... 50,000 3,556,250
IVAX Corp.*........................... 27,700 1,274,200
King Pharmaceuticals, Inc.*........... 24,150 807,516
Large Scale Biology Corp.*............ 55,400 1,814,350
McKesson HBOC, Inc.................... 163,600 5,000,025
Medarex, Inc.*........................ 13,100 1,536,794
Medimmune, Inc.*...................... 20,000 1,545,000
Millennium Pharmaceuticals, Inc.*..... 10,600 1,548,262
MiniMed, Inc.*........................ 38,600 3,449,875
Mylan Laboratories, Inc............... 54,000 1,454,625
Myriad Genetics, Inc.*................ 13,500 1,161,000
Neopharm, Inc.*....................... 32,200 1,271,900
NPS Pharmaceuticals Inc*.............. 27,900 1,578,094
OSI Pharmaceuticals, Inc.*............ 25,800 1,806,000
PE Corp. -- PE Biosystems Group....... 43,800 5,102,700
PerkinElmer, Inc...................... 16,500 1,722,187
Pfizer, Inc........................... 89,100 4,003,931
Praecis Pharmaceuticals, Inc.*........ 48,600 2,065,500
Protein Design Labs, Inc.*............ 20,900 2,518,450
Schering-Plough Corp.................. 35,200 1,636,800
Sepracor, Inc.*....................... 38,100 4,674,394
Tenet Healthcare Corp.*............... 93,100 3,386,512
Thermo Electron Corp.*................ 31,700 824,200
Titan Pharmaceuticals, Inc.*.......... 27,900 1,813,500
Universal Health Services, Inc. Cl.
B*.................................. 18,800 1,609,750
Vertex Pharmaceuticals, Inc.*......... 27,300 2,306,850
Waters Corp.*......................... 47,300 4,209,700
------------
137,591,295
------------
TOTAL COMMON STOCK
(Cost: $117,643,442)............................... 157,181,246
------------
<CAPTION>
PRINCIPAL
AMOUNT
-------------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 8.6%
-------------------------------------------------------------------
HSBC Holdings PLC
6.110%, 10/02/00
(Cost: $14,459,425)................. $14,459,425 14,459,425
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 102.3%
(Cost: $132,102,867)............................ 171,640,671
LIABILITIES IN EXCESS OF OTHER ASSETS -- (2.3%)... (3,865,583)
------------
NET ASSETS -- 100.0%.............................. $167,775,088
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
24
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
GLOBAL HEALTH CARE FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Banking......................... 8.6%
Biotechnology................... 36.5
Drugs/Pharmaceuticals........... 26.7
E-Commerce...................... 3.0
Health Care..................... 1.9
Instruments -- Controls......... 0.5
Instruments -- Scientific....... 1.0
Internet Software............... 1.1
Medical Instruments............. 5.9
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Medical Products................ 10.1%
Medical -- Drugs................ 1.7
Medical -- Hospitals............ 1.0
Medical -- Wholesale Drug
Distribution.................. 1.1
Optical Supplies................ 0.9
Therapeutics.................... 2.3
Liabilities in Excess of Other
Assets........................ (2.3)
-----
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, Partner, Portfolio Manager; LAWRENCE S. SPEIDELL, CFA, Partner,
Director of Quantitative Research and Portfolio Management; CHRISTOPHER
ANGIOLETTI, Portfolio Manager; MELISA GRIGOLITE, Portfolio Manager; PEDRO V.
MARCAL, Partner, Portfolio Manager; ERNESTO RAMOS, PH.D., Partner, Portfolio
Manager; JON BORCHARDT, Investment Analyst; CHRISTOPHER A. HERRERA, Investment
Analyst; DAVID LOPEZ, Investment Analyst; JACOB POZHARNY, PH.D., Investment
Analyst; ERIC SAGMEISTER, 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: Reflecting US stock market activity, international
equities -- led by technology issues -- traded lower during the six-month period
ended September 30, 2000.
In Europe, favorable developments such as the announcement of tax reforms in
Germany and France did little to inspire investors. Instead, worries about
rising oil prices, a falling euro and diminished corporate earnings visibility
sent bourses lower. Attempting to combat inflationary pressures brought on by
higher energy costs and a weakening currency, the European Central Bank (ECB)
raised short-term interest rates a total of 1%. In late September, the ECB, US
Federal Reserve and the Bank of Japan (BOJ) intervened to prop up the faltering
euro.
In Japan, stocks also posted losses, amid mixed reports of the country's
economic health. In August, the BOJ raised interest rates for the first time in
over 10 years, prompting concerns that higher rates might threaten the country's
fragile economy.
PERFORMANCE: The Fund's value declined 14.9% during the six-month period ended
September 30, 2000, compared to its MSCI EAFE Index benchmark, which fell 11.7%.
PORTFOLIO SPECIFICS: The Fund modestly lagged its benchmark this period. The
majority of the shortfall occurred in April and May, when markets worldwide fell
under pressure from high valuations in technology stocks. The resulting
correction was most pronounced in telecommunications, electronics, software,
semiconductors, computers and other technology industries. Investor sentiment
was undiscriminating with financial markets punishing the deserving along with
the many fundamentally sound and growing companies in these industries.
Exposure to Canadian stocks, which currently have a zero weighting in the
Fund's benchmark, helped performance since the MSCI Canada Index gained 7.3%
during the period. Stock selection within the health care and energy sectors
also benefited the Fund.
During the period, on a stock-by-stock basis, we reduced exposure to
technology and telecommunication services companies and increased holdings in
financial services and energy.
MARKET OUTLOOK: Near term, we expect oil prices, the euro and weakness in the
technology sector to continue to weigh on developed non-US stock markets. We
remain excited about longer-term prospects for international markets, however,
as tax and pension reform, corporate restructuring and the technology revolution
transform the global investment landscape.
--------------------------------------------------------------------------------
26
<PAGE>
INTERNATIONAL CORE GROWTH FUND INSTITUTIONAL SHARES -- UNAUDITED
------------------------------------------------------------------------
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
20.22% As of 9/30/00 24.33%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INTERNATIONAL CORE GROWTH
FUND INSTITUTIONAL SHARES MSCI EAFE INDEX
<S> <C> <C>
12/27/96 $250,000.00 $250,000.00
12/96 $252,400.00 $249,475.00
01/97 $274,600.00 $240,743.38
02/97 $277,200.00 $244,691.57
03/97 $282,600.00 $245,572.46
04/97 $286,600.00 $246,873.99
05/97 $313,200.00 $262,945.49
06/97 $331,200.00 $277,433.78
07/97 $352,400.00 $281,928.21
08/97 $334,000.00 $260,868.17
09/97 $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
01/98 $341,826.12 $265,491.33
02/98 $365,198.85 $282,527.91
03/98 $386,902.09 $291,229.77
04/98 $398,171.08 $293,536.31
05/98 $407,979.28 $292,112.66
06/98 $412,779.04 $294,332.71
07/98 $431,143.32 $297,305.47
08/98 $369,372.55 $260,469.33
09/98 $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
01/99 $416,178.61 $303,686.69
02/99 $399,063.94 $296,458.95
03/99 $411,795.59 $308,821.29
04/99 $426,823.10 $321,328.55
05/99 $410,334.58 $304,780.45
06/99 $442,685.47 $316,663.84
07/99 $457,295.55 $326,068.76
08/99 $464,391.88 $327,258.91
09/99 $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
01/00 $629,265.14 $362,144.25
02/00 $705,704.25 $371,893.17
03/00 $665,813.89 $386,309.23
04/00 $610,886.33 $365,980.48
05/00 $578,514.58 $357,041.78
06/00 $609,633.23 $371,002.11
07/00 $582,691.58 $355,447.96
08/00 $606,082.78 $358,533.25
9/30/00 $566,818.98 $341,075.55
</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 SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
INTERNATIONAL CORE GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
-------------------------------------------------------------------
COMMON STOCK & EQUIVALENTS -- 93.9%
-------------------------------------------------------------------
BRAZIL -- 1.7%
Petroleo Brasileiro S.A. -- ADR*...... 86,600 $ 2,603,413
Tele Norte Leste Participacoes
S.A. -- ADR......................... 66,323 1,517,139
Telecomunicacoes Brasileiras S.A...... 13,100 1,036,538
Telesp Celular Participacoes S.A. --
Rts.*............................... 680 0
------------
5,157,090
------------
CANADA -- 8.4%
Abitibi-Consolidated, Inc............. 207,000 1,940,625
Alberta Energy Co., Ltd............... 61,700 2,560,923
Anderson Exploration, Ltd.*........... 117,900 2,578,034
Ballard Power Systems, Inc.*.......... 16,200 1,770,103
Biovail Corp.*........................ 57,100 4,650,081
Bombardier, Inc. -- Cl. B............. 129,100 2,230,892
Celestica, Inc.*...................... 60,400 4,160,880
Magna International, Inc. Cl. A....... 8,200 356,972
Nortel Networks Corp.................. 67,300 4,008,556
Precision Drilling Corp.*............. 41,100 1,464,188
------------
25,721,254
------------
DENMARK -- 1.1%
Novo Nordisk AS Cl. B................. 15,300 3,393,284
------------
FINLAND -- 1.2%
Elisa Communications OYJ.............. 42,155 1,506,215
Nokia OYJ -- ADR...................... 51,600 2,054,325
------------
3,560,540
------------
FRANCE -- 8.6%
Accor S.A............................. 43,300 1,607,116
Alcatel............................... 41,100 2,629,480
Aventis S.A........................... 29,100 2,182,740
Axa -- Rts.*.......................... 4 6
France Telecom S.A.................... 27,000 2,892,495
Group Danone.......................... 8,200 1,125,936
Sanofi-Synthelabo S.A................. 91,800 4,933,443
Schneider Electric S.A................ 37,200 2,343,858
Societe Television Francaise 1........ 46,800 2,684,413
Total Fina Elf S.A.................... 20,007 2,927,228
Vivendi Environnement*................ 84,400 3,128,109
------------
26,454,824
------------
GERMANY -- 3.5%
Bayerische Motoren Werke AG........... 94,000 3,210,177
Dresdner Bank AG...................... 86,200 3,753,916
Intershop Communications AG*.......... 19,500 1,269,934
Veba AG*.............................. 49,300 2,540,679
------------
10,774,706
------------
GREECE -- 0.9%
Alpha Bank S.A........................ 68,900 2,723,993
------------
<CAPTION>
NUMBER
OF SHARES VALUE
-------------------------------------------------------------------
<S> <C> <C>
HONG KONG -- 4.1%
Cheung Kong (Holdings), Ltd........... 299,000 $ 3,604,789
China Mobile (Hong Kong), Ltd.*....... 126,000 840,339
Citic Pacific, Ltd.................... 157,000 678,595
HSBC Holdings PLC..................... 242,800 3,409,916
Hutchison Whampoa, Ltd................ 294,600 3,910,695
------------
12,444,334
------------
IRELAND -- 1.8%
Allied Irish Banks PLC................ 219,700 2,369,144
Elan Corp. PLC*....................... 57,300 3,137,175
------------
5,506,319
------------
ISRAEL -- 1.7%
Teva Pharmaceutical Industries,
Ltd. -- ADR......................... 71,700 5,247,544
------------
ITALY -- 5.9%
Alleanza Assicurazioni SpA............ 304,700 4,033,238
Edison SpA*........................... 304,600 2,997,056
ENI SpA............................... 421,700 2,232,775
Finmeccanica SpA*..................... 2,347,800 2,780,377
Mediaset SpA*......................... 181,400 2,702,090
Riunione Adriatica di Sicurta SpA..... 253,500 3,333,146
------------
18,078,682
------------
JAPAN -- 17.7%
Daikin Industries, Ltd................ 99,000 1,910,189
FANUC, Ltd............................ 36,800 4,069,590
Fujitsu, Ltd.......................... 103,000 2,392,467
Furukawa Electric Co., Ltd............ 96,000 2,651,860
Hitachi, Ltd.......................... 137,000 1,589,839
Hoya Corp............................. 9,700 760,309
Itochu Techno-Science Corp............ 14,400 2,638,534
Konami Co., Ltd....................... 44,000 3,632,056
Mitsubishi Electric Corp.............. 406,000 3,362,669
Mitsui Fudosan Co., Ltd............... 174,000 2,180,233
NEC Corp.............................. 114,000 2,589,950
Nippon Sheet Glass Co., Ltd........... 183,000 2,938,229
Nippon Telegraph and Telephone Corp... 119 1,167,314
Nomura Securities Co., Ltd............ 110,000 2,392,190
NTT DoCoMo, Inc....................... 82 2,352,397
Pioneer Electronics Corp.............. 91,000 3,705,349
Sanyo Electric Co., Ltd............... 367,000 3,226,448
Sony Corp............................. 33,900 3,438,311
Sony Corp. -- ADR..................... 10,700 1,080,031
Toshiba Corp.......................... 484,000 3,901,203
Trend Micro, Inc.*.................... 15,000 2,014,159
------------
53,993,327
------------
MEXICO -- 0.5%
Telefonos de Mexico S.A. Series L --
ADR................................. 27,100 1,441,381
------------
NETHERLANDS -- 5.4%
Akzo Nobel N.V........................ 40,800 1,720,989
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
28
<PAGE>
-------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
-------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK & EQUIVALENTS (Continued)
---------------------------------------------------------
NETHERLANDS (Continued)
ASM Lithography Holding N.V. --
ADR*................................ 98,100 $ 3,169,855
Koninklijke Ahold N.V................. 50,500 1,431,832
Koninklijke Numico N.V................ 48,400 2,483,620
Koninklijke (Royal) Philips
Electronics N.V. -- ADR............. 72,529 3,082,483
QIAGEN N.V.*.......................... 32,300 1,539,169
STMicroelectronics N.V................ 67,600 3,219,450
------------
16,647,398
------------
REPUBLIC OF CHINA -- 0.7%
PetroChina Co., Ltd. Cl. H............ 9,881,300 2,015,079
------------
RUSSIA -- 0.6%
OAO Lukoil Holding -- ADR............. 33,900 1,952,640
------------
SINGAPORE -- 1.7%
Flextronics International, Ltd.*...... 45,200 3,712,050
Singapore Airlines, Ltd............... 143,000 1,355,801
------------
5,067,851
------------
SOUTH KOREA -- 0.5%
Korea Electric Power Corp............. 60,890 1,588,933
------------
SPAIN -- 2.7%
Altadis (ex Tabacalera S.A.).......... 161,400 2,328,688
Banco Santander Central Hispano S.A... 301,800 3,313,063
Endesa S.A............................ 142,800 2,684,095
------------
8,325,846
------------
SWEDEN -- 3.0%
LM Ericson Telephone Co. Cl. B. --
ADR................................. 236,500 3,503,156
Nordic Baltic Holding (NBH) AB........ 270,700 1,938,991
Svenska Handelsbanken AB Cl. A........ 235,100 3,782,882
------------
9,225,029
------------
SWITZERLAND -- 4.5%
Nestle S.A............................ 1,400 2,915,992
Serono S.A. -- ADR.................... 44,100 1,334,025
Serono S.A. Cl. B..................... 1,600 1,953,252
Swatch Group AG....................... 1,100 1,591,067
UBS AG................................ 22,100 2,940,870
Zurich Allied AG*..................... 6,440 2,977,064
------------
13,712,270
------------
UNITED KINGDOM -- 15.0%
Amevescap PLC......................... 171,000 3,701,336
BAA PLC............................... 191,700 1,516,342
Barclays PLC.......................... 59,400 1,644,045
BG Group PLC.......................... 638,600 4,057,571
Billiton PLC.......................... 594,600 2,125,263
British Aerospace PLC................. 371,239 2,003,401
<CAPTION>
NUMBER
OF SHARES VALUE
-------------------------------------------------------------------
<S> <C> <C>
Cable & Wireless PLC.................. 122,100 $ 1,742,065
Centrica PLC.......................... 795,900 2,556,464
CMG PLC............................... 167,900 3,249,464
Energis PLC*.......................... 235,300 1,662,919
Logica PLC............................ 165,100 5,431,233
Reuters Group PLC -- ADR.............. 20,100 2,258,738
Rio Tinto PLC......................... 135,800 1,969,655
Royal Bank of Scotland Group PLC...... 188,200 3,973,463
SEMA Group PLC........................ 121,000 2,075,223
Shell Transport & Trading Co.......... 372,000 3,030,510
Shire Pharmaceuticals PLC -- ADR*..... 13,200 681,450
Vodafone Airtouch PLC................. 572,300 2,136,518
------------
45,815,660
------------
UNITED STATES -- 2.7%
Amdocs, Ltd.*......................... 32,200 2,008,475
Comverse Technology, Inc.*............ 17,000 1,836,000
Santa Fe International Corp........... 46,000 2,072,875
Transocean Sedco Forex, Inc........... 37,800 2,216,025
------------
8,133,375
------------
TOTAL COMMON STOCK & EQUIVALENTS -- 93.9%
(Cost: $266,499,608)............................... 286,981,359
------------
-------------------------------------------------------------------
PREFERRED STOCK -- 2.0%
-------------------------------------------------------------------
BRAZIL -- 1.0%
Banco Bradesco S.A.................... 344,880,000 2,852,503
------------
GERMANY -- 1.0%
SAP AG................................ 12,700 3,115,578
------------
TOTAL PREFERRED STOCK
(Cost: $5,586,877)................................. 5,968,081
------------
<CAPTION>
PRINCIPAL
AMOUNT
-------------------------------------------------------------------
<S> <C> <C>
TIME DEPOSITS -- 4.5%
-------------------------------------------------------------------
Chase Manhattan Bank
6.110%, 10/02/00.................... $12,050,740 12,050,740
Citibank Nassau
6.110%, 10/02/00.................... 1,886,624 1,886,624
------------
TOTAL TIME DEPOSITS
(Cost: $13,937,364)................................ $ 13,937,364
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 100.4%
(Cost: $286,023,849)............................ 306,886,804
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.4)%... (1,309,864)
------------
NET ASSETS -- 100.0%.............................. $305,576,940
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
29
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
INTERNATIONAL CORE GROWTH FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Aerospace & Defense............. 1.6%
Airlines........................ 0.4
Airport
Development/Maintenance....... 0.5
Audio/Video Products............ 2.7
Auto Manufacturers.............. 1.1
Auto Parts & Equipment.......... 0.1
Banking......................... 8.0
Biotechnology................... 0.9
Chemicals....................... 0.6
Computer Services............... 2.8
Computer Software............... 2.9
Computers....................... 3.4
Diversified Financial
Services...................... 2.0
Diversified Manufacturing....... 5.3
Diversified Operations.......... 3.3
Drilling........................ 1.2
Drugs/Pharmaceuticals........... 8.5
Electric........................ 3.5
Electronic
Components/Semiconductors..... 3.6
Electronics..................... 6.1
Food............................ 1.2
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Hotels/Motels................... 0.5%
Insurance....................... 3.4
Internet Software............... 0.4
Mining.......................... 1.3
Money Center Banks.............. 6.1
Multimedia...................... 0.7
Oil & Gas Producers............. 7.1
Oil & Gas Services.............. 2.8
Paper & Related Products........ 0.6
Real Estate Development......... 1.9
Regional/Commercial Banks....... 1.1
Retail -- Food.................. 0.5
Retail -- Jewelry............... 0.5
Telecommunications.............. 6.6
Telecommunications Equipment.... 4.6
Television...................... 1.8
Tobacco......................... 0.8
Liabilities in Excess of Other
Assets........................ (0.4)
-----
NET ASSETS...................... 100.0%
=====
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
30
<PAGE>
INTERNATIONAL SMALL CAP GROWTH FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: LORETTA J. MORRIS, Partner, Portfolio Manager; RANDALL S.
KAHN, CFA, Partner, Portfolio Manager; LAWRENCE S. SPEIDELL, CFA, Partner,
Director of Quantitative Research and Portfolio Management; CHRISTOPHER
ANGIOLETTI, Portfolio Manager; MELISA GRIGOLITE, Portfolio Manager; PEDRO V.
MARCAL, Partner, Portfolio Manager; ERNESTO RAMOS, PH.D., Partner, Portfolio
Manager; JON BORCHARDT, Investment Analyst; CHRISTOPHER A. HERRERA, Investment
Analyst; DAVID LOPEZ, Investment Analyst; JACOB POZHARNY, PH.D., Investment
Analyst; ERIC SAGMEISTER, 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 the market capitalization in each
country.
MARKET OVERVIEW: Moving in tandem with US markets, international equities --
most notably technology issues -- posted losses during the six-month period
ended September 30, 2000.
Positive events in Europe, such as the announcement of tax reforms in Germany
and France, weren't able to propel stocks higher. Instead, worries about
persistent weakness in the euro, rising oil prices and the likelihood of a
deceleration in corporate profit growth sent bourses lower. The European Central
Bank (ECB) raised short-term interest rates a total of 1% for its 11 member
countries on three separate occasions, attempting to combat inflationary
pressures brought on by higher energy costs and a weakening currency. In late
September, the ECB, the US Federal Reserve and the Bank of Japan (BOJ)
unexpectedly intervened to stabilize the euro.
Japanese markets also registered losses, as reports of the country's economic
health were mixed. In August, the BOJ raised interest rates for the first time
in over 10 years, prompting concerns that higher rates might threaten the
country's fragile economy.
PERFORMANCE: The Fund declined 13.4% during the six-months ended
September 30,2000 versus a 7.7% loss for its Salomon EPAC/EMI Index.
PORTFOLIO SPECIFICS: A broad, global sell off in technology and communications
industries in April and May contributed to the Fund's underperformance in the
period. The resulting correction was most pronounced in telecommunications,
electronics, software, semiconductors, computers and other technology
industries. Investor sentiment was undiscriminating with financial markets
punishing the deserving along with the many fundamentally sound and growing
companies in these industries.
Stock selection in Switzerland and Denmark and within the energy, technology
and transportation sectors favorably impacted results. Top-performing holdings
included Petro-Canada, Telelogic, Frontline, Vestas Wind Systems and Straumann
Holding.
MARKET OUTLOOK: While this year has been challenging, we remain optimistic
about the prospects for international small-cap companies. Looking forward, we
believe they will benefit from powerful catalysts for growth including
deregulation and privatization, tax and pension reform, rising equity cultures
in Europe and Asia, and the emergence of stock exchanges geared toward smaller,
high-growth companies.
--------------------------------------------------------------------------------
31
<PAGE>
INTERNATIONAL SMALL CAP GROWTH FUND INSTITUTIONAL SHARES -- UNAUDITED
------------------------------------------------------------------------
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 9/30/00 SINCE
1 YEAR 5 YEARS INCEPTION
56.61% 33.27% 16.73%
</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
06/90 $253,508.33 $253,375.00
07/90 $262,592.38 $266,043.75
08/90 $231,247.60 $232,043.36
09/90 $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
01/91 $209,432.33 $205,042.12
02/91 $232,916.67 $234,322.13
03/91 $224,306.52 $226,284.88
04/91 $226,377.62 $229,452.87
05/91 $225,592.84 $225,299.78
06/91 $212,831.81 $212,795.64
07/91 $220,947.79 $218,456.00
08/91 $214,702.34 $209,215.31
09/91 $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
01/92 $228,689.86 $217,775.08
02/92 $222,705.81 $213,898.68
03/92 $209,707.21 $199,182.45
04/92 $211,266.03 $200,975.09
05/92 $225,491.28 $217,093.30
06/92 $218,711.51 $208,235.89
07/92 $209,576.66 $195,158.68
08/92 $215,074.55 $202,945.51
09/92 $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
01/93 $202,684.73 $188,933.02
02/93 $206,968.14 $195,073.35
03/93 $223,097.85 $214,853.78
04/93 $245,660.48 $235,135.98
05/93 $258,885.20 $247,504.13
06/93 $252,214.60 $236,985.21
07/93 $256,611.54 $244,782.02
08/93 $272,863.60 $257,510.69
09/93 $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
01/94 $280,392.61 $269,206.49
02/94 $279,781.29 $271,683.19
03/94 $274,075.62 $267,336.25
04/94 $283,856.76 $275,810.81
05/94 $279,985.06 $271,646.07
06/94 $284,875.63 $278,219.91
07/94 $287,728.46 $281,252.50
08/94 $294,452.99 $284,149.40
09/94 $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
01/95 $265,298.24 $258,597.15
02/95 $259,723.88 $254,382.01
03/95 $270,253.22 $265,142.37
04/95 $281,195.48 $273,096.65
05/95 $277,892.16 $267,880.50
06/95 $274,382.38 $264,344.48
07/95 $292,344.20 $280,020.10
08/95 $289,247.34 $272,767.58
09/95 $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
01/96 $297,214.16 $284,874.99
02/96 $300,963.18 $289,148.11
03/96 $313,459.92 $295,856.35
04/96 $327,206.34 $311,536.74
05/96 $330,330.52 $308,826.37
06/96 $333,246.43 $309,413.14
07/96 $319,500.01 $297,779.20
08/96 $322,624.20 $300,012.55
09/96 $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
01/97 $356,598.50 $290,135.62
02/97 $361,268.25 $295,445.10
03/97 $361,480.51 $292,165.66
04/97 $359,357.90 $287,812.39
05/97 $383,980.18 $305,973.36
06/97 $409,451.50 $313,224.92
07/97 $425,795.60 $307,117.04
08/97 $408,177.93 $293,327.48
09/97 $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
01/98 $405,100.07 $279,956.17
02/98 $446,979.20 $300,689.72
03/98 $495,301.28 $314,822.14
04/98 $521,878.42 $317,343.86
05/98 $534,764.31 $324,674.51
06/98 $536,106.59 $315,518.69
07/98 $547,288.71 $314,774.06
08/98 $460,817.09 $277,882.54
09/98 $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
01/99 $582,110.73 $304,064.56
02/99 $571,043.99 $298,442.40
03/99 $584,324.08 $309,117.69
04/99 $619,184.32 $324,963.06
05/99 $595,114.16 $316,289.80
06/99 $660,961.28 $326,986.72
07/99 $717,955.01 $339,585.52
08/99 $764,712.01 $344,794.76
09/99 $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
01/00 $1,269,363.27 $365,692.88
02/00 $1,604,446.22 $378,748.12
03/00 $1,424,659.19 $382,005.35
04/00 $1,278,825.74 $357,977.22
05/00 $1,196,724.85 $351,927.40
06/00 $1,290,514.68 $374,697.10
07/00 $1,254,056.32 $361,545.23
08/00 $1,315,005.80 $371,126.18
9/30/00 $1,233,183.21 $352,681.21
</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.
--------------------------------------------------------------------------------
32
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
INTERNATIONAL SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
-------------------------------------------------------------------
COMMON STOCK & EQUIVALENTS -- 87.2%
-------------------------------------------------------------------
AUSTRALIA -- 0.1%
Open Telecommunications, Ltd.*........ 371,200 $ 385,965
------------
AUSTRIA -- 0.4%
Austria Technologies & Systemtechnik
AG.................................. 33,600 1,008,111
------------
BRAZIL -- 0.8%
Ebraer-Empresa Brasileira d
Aeronautica S.A. -- ADR*............ 73,200 2,269,200
Telec do Rio Janeiro S.A.*............ 1,000 23
------------
2,269,223
------------
BRITISH VIRGIN ISLANDS -- 0.5%
OpenTV Corp. Cl. A*................... 41,900 1,393,175
------------
CANADA -- 7.5%
Anderson Exploration, Ltd.*........... 144,900 3,168,424
ATS Automation Tooling
Systems, Inc.*...................... 38,300 785,295
Canadian Hunter Exploration, Ltd.*.... 59,100 1,433,703
Certicom Corp......................... 75,000 2,970,889
C-MAC Industries, Inc.*............... 40,400 2,315,067
Cognos, Inc.*......................... 88,100 3,590,075
Descartes Systems Gruop, Inc.*........ 21,300 1,058,205
Petro-Canada.......................... 125,800 2,800,944
Pivotal Corp.*........................ 17,400 925,163
Rio Alto Exploration, Ltd.*........... 35,300 750,764
Tesco Corp.*.......................... 90,900 930,387
------------
20,728,916
------------
DENMARK -- 4.7%
GN Store Nord AS...................... 28,700 4,073,715
ISS AS*............................... 35,300 2,192,106
NEG Micon AS*......................... 37,800 2,012,018
Vestas Wind Systems AS................ 91,600 4,680,656
------------
12,958,495
------------
FINLAND -- 1.5%
F-Secure OYJ*......................... 174,900 1,148,293
Perlos OYJ............................ 54,900 1,448,551
Sampo Insurance Co., Ltd. Cl. A....... 32,300 1,579,074
------------
4,175,918
------------
FRANCE -- 5.1%
Altran Technologies S.A............... 8,700 1,835,646
Business Objects S.A. -- ADR*......... 16,700 1,888,144
Coflexip S.A.......................... 14,900 1,873,662
Galeries Lafayette.................... 11,000 1,910,328
Groupe Air France..................... 74,200 1,308,901
Integra-Net S.A.*..................... 65 711
Metropole Television-M6............... 17,100 854,843
Pechiney S.A. Cl. A................... 30,000 1,199,250
Rexel S.A............................. 11,200 838,116
Wavecom S.A.-- ADR*................... 21,000 2,541,000
------------
14,250,601
------------
GERMANY -- 9.7%
ADVA AG............................... 35,200 3,339,191
<CAPTION>
NUMBER
OF SHARES VALUE
-------------------------------------------------------------------
<S> <C> <C>
Germany (Continued)
Aixtron............................... 32,600 $ 4,085,038
Altana AG............................. 10,200 1,152,127
Ce Consumer Electronics AG*........... 29,700 912,065
D. Logistics AG*...................... 16,800 1,126,712
DePfa Deutsche Pfandbriefbank AG...... 20,600 1,673,328
Direkt Anlage Bank AG*................ 27,900 1,378,740
Intershop Communications AG*.......... 17,000 1,107,122
Intertainment AG...................... 11,280 577,334
Merck KGaA............................ 21,900 757,566
Schneider Rundfunkwerke AG*........... 22,900 1,273,111
Senator Film AG....................... 140,000 2,594,403
SGL Carbon AG*........................ 28,100 1,785,373
Singulus Technologies AG.............. 44,000 2,069,522
Suess MicroTec AG*.................... 29,800 967,730
Telesens AG*.......................... 30,300 2,188,255
------------
26,987,617
------------
HONG KONG -- 2.6%
China Resources Enterprise, Ltd....... 1,765,000 2,105,273
Cosco Pacific, Ltd.................... 2,914,000 2,205,070
Giordano International, Ltd........... 1,490,000 864,740
New World Development Co., Ltd........ 1,356,000 1,930,472
------------
7,105,555
------------
IRELAND -- 0.4%
Parthus Technologies PLC*............. 269,200 1,056,722
------------
ISRAEL -- 1.3%
BATM Advanced Communications, Ltd..... 214,900 2,025,527
Nice Systems, Ltd. -- ADR*............ 22,000 1,584,000
------------
3,609,527
------------
ITALY -- 4.0%
Autogrill SpA......................... 230,000 2,687,237
Class Editori SpA..................... 187,500 3,011,361
Mondadori Editore SpA................. 158,000 1,879,477
Parmalat Finaziaria SpA............... 1,029,900 1,504,122
Saipem SpA............................ 357,200 1,985,830
------------
11,068,027
------------
JAPAN -- 15.8%
All Nippon Airways Co., Ltd.*......... 432,000 1,439,200
Alps Electric Co., Ltd................ 170,000 3,712,752
Citizen Watch Co., Ltd................ 396,000 4,254,636
Credit Saison Co., Ltd................ 64,000 1,391,819
Daiichi Pharmaceutical Co., Ltd....... 69,000 1,752,776
Disco Corp............................ 50 6,668
Fujikura, Ltd......................... 317,000 2,610,864
Hikari Tsushin, Inc................... 15,100 579,909
Hitachi Cable, Ltd.................... 170,000 1,935,036
Komatsu, Ltd.......................... 656,000 3,988,451
Meitec Corp........................... 74,600 3,451,786
NGK Insulators, Ltd................... 285,000 4,088,007
Nippon Electric Glass Co., Ltd........ 121,000 2,799,371
Nippon System Development............. 16,900 1,925,217
Nitto Denko Corp...................... 48,000 1,799,001
Obic Business Consultants, Ltd........ 3,000 274,847
Oki Electric Industry Company,
Ltd.*............................... 391,000 2,706,533
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
33
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- CONTINUED
--------------------------------------------------------------------------------
INTERNATIONAL SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
-------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK & EQUIVALENTS (Continued)
-------------------------------------------------------------------
Japan (Continued)
Ono Pharmaceutical Co., Ltd........... 31,000 $ 1,273,737
Sumitomo Osaka Cement Co., Ltd........ 440,000 1,877,105
Ushio, Inc............................ 87,000 1,875,902
------------
43,743,617
------------
LUXEMBOURG -- 1.1%
Thiel Logistik*....................... 20,800 3,065,278
------------
MEXICO -- 0.4%
Cieb Cl. B -- Rts*.................... 41,476 0
Corporacion Interamericana de
Entretenimiento S.A.-- Cl. B*....... 241,000 1,167,487
------------
1,167,487
------------
NETHERLANDS -- 1.7%
ASM International N.V.*............... 85,200 1,491,000
Fugro N.V............................. 18,600 1,066,061
Unique International N.V.............. 35,900 728,639
Versatel Telecom International
N.V.*............................... 58,400 1,345,066
------------
4,630,766
------------
NORWAY -- 3.9%
Frontline, Ltd.*...................... 118,700 1,850,121
Schibstad ASA*........................ 91,900 1,614,616
Smedvig ASA Cl. B..................... 53,200 949,336
Storebrand ASA........................ 339,000 2,408,532
TGS Nopec Geophysical Company ASA*.... 65,000 887,827
Tomra Systems ASA..................... 96,000 3,156,521
------------
10,866,953
------------
SINGAPORE -- 2.3%
Datacraft Asia, Ltd................... 6,684 55,477
NaSteel Electronics, Ltd.............. 360,000 930,874
Omni Industries, Ltd.................. 925,000 1,461,673
Overseas Union Bank, Ltd.............. 277,000 1,289,260
Venture Manufacturing, Ltd............ 284,000 2,741,596
------------
6,478,880
------------
SOUTH KOREA -- 0.4%
Hankuk Electric Glass Co., Ltd........ 22,170 1,252,486
------------
SPAIN -- 2.1%
Acciona S.A........................... 40,900 1,352,014
Centros Comerciales Carrefour, S.A.... 18,200 248,779
Grupo Dragados S.A.................... 208,900 1,660,938
Indra Sistemas S.A.................... 60,000 1,297,202
Sol Melia S.A......................... 137,100 1,339,292
------------
5,898,225
------------
SWEDEN -- 1.8%
Enea Data AB.......................... 327,000 1,883,993
HiQ International AB.................. 99,800 813,277
Metro International S.A. Cl. A*....... 2,789 31,848
<CAPTION>
NUMBER
OF SHARES VALUE
-------------------------------------------------------------------
<S> <C> <C>
Sweden (Continued)
Metro International S.A. Cl. B*....... 6,509 $ 81,084
PyroSequencing AB*.................... 59,500 889,443
Teleogic AB*.......................... 153,000 1,222,983
------------
4,922,628
------------
SWITZERLAND -- 9.8%
Ascom Holding AG...................... 400 1,341,125
Gretag Imaging Group.................. 13,700 3,115,077
Julius Baer Holdings AG Cl. B......... 560 2,904,652
Kudelski S.A.*........................ 1,670 2,555,629
Kudelski S.A. -- Rts.*................ 88 92,013
Leica Geosystems AG*.................. 2,200 688,614
Logitech International S.A.*.......... 6,740 2,121,361
Sez Holdings AG....................... 3,000 2,299,815
Straumann Holding AG.................. 1,300 2,895,742
Swisslog Holding AG................... 4,700 2,904,189
Synthes-Stratec, Inc.................. 3,400 2,309,419
Tecan AG.............................. 1,600 1,703,309
Unaxis Holding AG*.................... 8,000 2,230,965
------------
27,161,910
------------
UNITED KINGDOM -- 8.8%
Autonomy Corp. PLC*................... 47,700 2,671,200
Baltimore Technology PLC*............. 167,300 1,706,736
Bookham Technology PLC*............... 17,400 762,773
Celltech Chiroscience Group PLC*...... 93,000 1,854,882
Cookson Group PLC..................... 289,500 811,109
Eidos PLC*............................ 344,400 1,726,172
Enterprise Oil PLC.................... 289,200 2,366,667
Future Network PLC*................... 99,700 862,328
Matalan PLC........................... 213,900 1,739,381
Pharmagene PLC*....................... 222,000 1,099,560
Psion PLC............................. 133,600 1,461,704
Safeway PLC........................... 720,900 3,058,991
Spirent PLC........................... 428,900 4,248,661
------------
24,370,164
------------
UNITED STATES -- 0.5%
Descartes Systems Group, Inc.*........ 26,000 1,287,000
------------
TOTAL COMMON STOCK & EQUIVALENTS
(Cost: $213,541,369)...............................
241,843,246
------------
-------------------------------------------------------------------
PREFERRED STOCK -- 2.8%
-------------------------------------------------------------------
GERMANY -- 2.8%
Henkel KGaA........................... 30,900 1,878,745
Marschollek, Lautenschlaeger & Partner
AG.................................. 16,700 2,497,907
Porsche AG............................ 510 1,845,203
ProSieben Media AG.................... 13,600 1,548,170
------------
TOTAL PREFFERED STOCK
(Cost: $6,322,181).................................
7,770,025
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
34
<PAGE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-------------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 10.4%
-------------------------------------------------------------------
Chase Manhattan Bank
6.110%, 10/02/00
(Cost: $28,745,619)................. $28,745,619 $ 28,745,619
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 100.4%
(Cost: $248,609,169)............................ 278,358,890
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.4)%... (1,125,998)
------------
NET ASSETS -- 100.0%.............................. $277,232,892
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
35
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
INTERNATIONAL SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Aerospace/Defense............... 0.8%
Airlines........................ 1.0
Application Software............ 1.4
Audio/Video Products............ 0.5
Auto -- Cars/Light Trucks....... 0.7
Banking......................... 12.4
Biotechnology................... 0.7
Broadcasting.................... 1.1
Building & Construction......... 2.4
Building Materials.............. 0.7
Chemicals....................... 1.3
Commercial Services............. 1.6
Computer Services............... 2.1
Computer Software............... 4.4
Computers....................... 5.3
Consulting Services............. 1.1
Data Processing................. 1.3
Distribution/Wholesale.......... 0.3
Diversified Financial
Services...................... 1.9
Diversified Manufacturing....... 0.3
Diversified Operations.......... 0.8
Drugs/Pharmaceuticals........... 2.4
Electronic
Components/Semiconductors..... 7.4
Electronics..................... 3.9
Entertainment................... 0.4
Entertainment Software.......... 0.6
Food............................ 1.6
Hospitality..................... 0.5
Housewares...................... 0.5
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Human Resources................. 0.3%
Industrial
Automation/Robotics........... 1.0
Insurance....................... 1.4
Internet Software............... 0.4
Lighting Products............... 0.7
Machinery....................... 2.8
Medical Products................ 3.6
Metals.......................... 0.4
Networking Products............. 0.7
Oil & Gas Producers............. 3.8
Oil & Gas Services.............. 2.4
Power Equipment & Supplies...... 2.4
Publishing...................... 2.7
Recycling....................... 1.1
Retail -- Apparel............... 0.9
Retail -- Department Stores..... 0.7
Retail -- Hypermarkets.......... 0.1
Retail -- Jewelry............... 1.5
Retail -- Restaurants........... 1.0
Rubber & Plastics............... 0.5
Telecommunications.............. 1.0
Telecommunications Equipment.... 8.4
Television...................... 0.9
Transportation -- Other......... 0.7
Wire & Cable Products........... 1.6
Liabilities in Excess of Other
Asset......................... (0.4)
-----
NET ASSETS...................... 100.0%
=====
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
36
<PAGE>
EMERGING COUNTRIES FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: PEDRO V. MARCAL, Partner, Portfolio Manager; ERNESTO RAMOS,
PH.D., Partner, Portfolio Manager; LAWRENCE S. SPEIDELL, CFA, Partner, Director
of Quantitative Research and Portfolio Management; JASON CAMPBELL, Portfolio
Manager; JESSICA GONCALVES, Portfolio Manager; REBECCA HAGSTROM, CFA, Investment
Analyst; THEODORA JAMISON, Investment Analyst; JOHN CASARIETTI, 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: After posting strong gains in 1999 and the first quarter of
2000, stock markets in the world's emerging countries posted declines during the
six-months ended September 30, 2000.
Emerging markets in Asia, Latin America and the Europe, Middle East and Africa
(EMEA) region mirrored movements in the United States, drifting lower amid
uncertainty about the impact of higher interest rates, rising oil prices and a
falling euro. As was the case in developed markets, technology and
telecommunications stocks led market declines in emerging nations.
These selling pressures overshadowed a number of positive developments in the
world's emerging countries. For example, in Latin America, the economies of
Mexico and Brazil showed impressive strength. In Asia, China benefited from
rising consumer spending and exports, with the MSCI China Index climbing 4.4% in
the six-month period. And in the EMEA region, the MSCI Israel Index advanced
30.4%, driven by growth in technology-related exports, a stable exchange rate
and relatively low inflation.
PERFORMANCE: The Fund declined 24.9% in the six-month period ended
September 30, 2000 versus a 21.8% loss for the MSCI Emerging Markets Free Index.
For the 12-month period ended September 30, 2000, the Fund advanced 9.9%,
outpacing the 0.4% gain for the Index.
PORTFOLIO SPECIFICS: The Fund underperformed its benchmark this period as a
result of the worldwide correction in technology stocks in April and May. Our
overweighting in telecommunications, computer, software and other technology
company stocks during this period of negative investor sentiment toward tech
stocks caused us to fall behind the index. On a 12-month trailing basis, the
Fund has continued to significantly outperform its benchmark. Being overweighted
in Israel helped performance as did stock selection within the health care
sector. The Fund's top-performing holdings included Israeli-based Teva
Pharmaceuticals, the world's leading generic drug company; Chinadotcom, a
premier pan-Asian Internet company; and Yapi Kredi Bank, Turkey's largest
private commercial bank.
MARKET OUTLOOK: Despite the difficult environment this year for emerging
market equities, we believe they continue to hold great potential for investors.
Moving forward, we believe these stocks will benefit from a multitude of
factors, including:
- Government reform, privatization and corporate restructuring
- Higher commodity prices
- Strong manufacturing output, decreasing inflation, and rising consumption
and export growth in select countries in the EMEA region
- Robust domestic demand, a rebuilding of inventories and increasing exports
in a number of Asia's developing nations
--------------------------------------------------------------------------------
37
<PAGE>
EMERGING COUNTRIES FUND INSTITUTIONAL SHARES -- UNAUDITED
------------------------------------------------------------------------
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 9/30/00 SINCE
1 YEAR 5 YEARS INCEPTION
9.88% 8.46% 8.42%
</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
11/94 $251,800.00 $254,738.25
12/94 $237,014.39 $234,359.19
01/95 $217,797.00 $209,517.12
02/95 $215,595.01 $204,069.67
03/95 $218,397.55 $205,294.09
04/95 $231,008.95 $214,511.79
05/95 $248,825.07 $225,923.82
06/95 $251,427.42 $226,601.59
07/95 $268,242.63 $231,677.47
08/95 $266,841.37 $226,209.88
09/95 $267,041.55 $225,146.69
10/95 $254,229.96 $216,523.57
11/95 $248,624.89 $212,669.46
12/95 $253,510.75 $222,111.98
01/96 $276,630.29 $237,904.14
02/96 $280,651.07 $234,121.47
03/96 $281,857.31 $235,947.61
04/96 $299,950.86 $245,385.52
05/96 $310,203.87 $244,281.28
06/96 $310,806.99 $245,795.83
07/96 $298,945.66 $229,007.97
08/96 $311,812.19 $234,870.58
09/96 $317,441.29 $236,913.95
10/96 $309,198.68 $230,588.35
11/96 $321,453.08 $234,462.23
12/96 $324,695.98 $235,517.31
01/97 $348,815.10 $251,579.59
02/97 $359,557.22 $262,347.20
03/97 $353,679.46 $255,447.47
04/97 $356,719.68 $255,907.27
05/97 $378,001.25 $263,226.22
06/97 $406,782.05 $277,308.82
07/97 $426,442.16 $281,440.72
08/97 $393,810.42 $245,641.46
09/97 $421,983.17 $252,445.73
10/97 $354,692.87 $211,019.39
11/97 $344,552.30 $203,317.18
12/97 $357,562.74 $208,217.12
01/98 $336,925.49 $191,886.66
02/98 $363,843.64 $211,915.78
03/98 $384,705.20 $221,112.93
04/98 $397,042.69 $218,705.01
05/98 $355,768.19 $188,733.68
06/98 $331,317.54 $168,935.51
07/98 $346,571.30 $174,290.77
08/98 $245,168.77 $123,903.31
09/98 $245,394.11 $131,762.49
10/98 $265,899.96 $145,637.08
11/98 $279,645.63 $157,749.72
12/98 $281,673.68 $155,462.35
01/99 $290,236.56 $152,954.74
02/99 $284,377.75 $154,442.99
03/99 $303,080.88 $174,798.58
04/99 $337,557.74 $196,424.66
05/99 $335,755.03 $195,281.86
06/99 $378,794.77 $217,444.40
07/99 $370,457.23 $211,529.91
08/99 $370,231.89 $213,454.83
09/99 $364,823.75 $206,240.06
10/99 $371,133.24 $210,630.91
11/99 $412,595.61 $229,517.13
12/99 $504,083.22 $258,707.17
01/00 $496,647.03 $260,249.03
02/00 $547,573.64 $263,686.14
03/00 $533,827.96 $264,972.93
04/00 $459,240.77 $239,855.35
05/00 $435,129.50 $229,949.33
06/00 $460,367.46 $238,049.29
07/00 $430,622.72 $225,806.54
08/00 $443,016.37 $226,916.83
9/30/00 $400,877.98 $207,103.36
</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.
--------------------------------------------------------------------------------
38
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
EMERGING COUNTRIES FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
------------------------------------------------------------------
COMMON STOCK & EQUIVALENTS -- 94.2%
------------------------------------------------------------------
BERMUDA -- 0.5%
Cosco Pacific, Ltd.................... 1,756,000 $ 1,328,793
------------
BRAZIL -- 11.4%
Aracruz Celulose S.A. -- ADR.......... 69,000 1,142,813
Companhia Brasileira de Distribuicao
Grupo Paode Acucar -- ADR........... 90,900 3,380,344
Embraer-Empresa Brasileira de
Aeronautica S.A. -- ADR............. 42,400 1,314,400
Embratel Participacoes S.A............ 245,300 4,538,050
Globo Cabo S.A........................ 116,500 1,558,188
Petroleo Brasileiro S.A. -- ADR*...... 443,600 13,335,725
Tele Celular Sul Part S.A. -- ADR..... 36,900 1,107,000
Tele Norte Leste Participacoes S.A.... 89,777 2,053,649
Telesp Celular Participacoes S.A. --
ADR................................. 25,200 830,025
Telesp Celular Participacoes S.A. --
ADR -- Rts.*........................ 8,430 0
Uniaode Bancos Brasileiros S.A. --
GDR................................. 92,000 3,036,000
------------
32,296,194
------------
CZECH REPUBLIC -- 0.7%
CeskeRadiokomunikace--GDR 144A*....... 53,500 2,011,600
------------
DOMINICAN REPUBLIC -- 1.0%
Tricom S.A. -- ADR*................... 184,900 2,819,725
------------
EGYPT -- 0.2%
Mobinil-Egyptian Mobile Phone
Services*........................... 19,600 434,578
------------
GREECE--3.6%
Alpha Credit Bank S.A................. 97,400 3,850,754
Intracom S.A.......................... 71,790 2,434,920
National Bankof Greece S.A............ 92,870 3,823,839
------------
10,109,513
------------
HONG KONG -- 7.9%
China Merchants Holdings International
Co., Ltd.*.......................... 1,022,000 779,918
China Telecom (HongKong), Ltd.
Cl. H*.............................. 811,000 5,408,851
Giordano International, Ltd........... 2,980,000 1,729,481
Hutchison Whampoa, Ltd.*.............. 110,000 1,460,205
Legend Holders, Ltd................... 1,421,000 1,348,673
Li & Fung, Ltd.*...................... 716,000 1,510,636
PetroChina Co., Ltd................... 37,671,700 7,682,334
Shanghai Industrial Holdings, Ltd..... 1,257,000 2,434,406
------------
22,354,504
------------
HUNGARY -- 0.6%
EGIS.................................. 36,800 1,645,353
------------
INDIA -- 5.0%
Infosys Technologies, Ltd............. 41,320 6,591,453
Reliance Industries, Ltd.............. 629,900 4,687,819
Satyam Computer Services, Ltd.*....... 267,000 2,826,018
------------
14,105,290
------------
ISRAEL -- 9.9%
AudioCodes, Ltd.*..................... 22,600 1,923,825
<CAPTION>
NUMBER
OF SHARES VALUE
------------------------------------------------------------------
<S> <C> <C>
Israel (Continued)
Bank Hapoalim, Ltd.................... 994,900 $ 3,050,961
Check Point Software Technologies,
Ltd.*............................... 70,500 11,103,750
M-Systems Flash Disk Pioneers,
Ltd.*............................... 70,400 2,688,400
Orbotech, Ltd.*....................... 27,500 1,503,906
Teva Pharmaceutical Industries,
Ltd................................. 104,600 7,655,413
------------
27,926,255
------------
MALAYSIA -- 3.0%
Malayan Banking Berhad................ 712,000 2,735,579
Tenaga Nasional Berhad................ 1,947,000 5,789,763
------------
8,525,342
------------
MEXICO -- 13.8%
Cemex S.A. -- ADR..................... 26,000 521,625
Cieb B Shares Mxn -- Rts.............. 300,486 0
Coca-Cola Femsa S.A. -- ADR........... 159,500 3,190,000
Corporacion Interamericana de
Entretenimiento S.A. Cl. B*......... 1,746,000 8,458,227
Fomento Economica Mexicano S.A. --
ADR................................. 17,400 678,600
Grupo Financiero Banamex Accival
S.A.*............................... 717,000 3,287,389
Grupo Iusacell S.A. de C.V.*.......... 74,900 889,438
Grupo Televisa S.A. -- GDR 144A*...... 24,200 1,396,038
Panamerican Beverages, Inc. Cl A...... 83,000 1,411,000
TV Azteca S.A. de C.V. -- ADR......... 466,800 6,010,050
TV Azteca S.A. de C.V. -- CPO
Shares.............................. 738,000 587,649
Telefonos de Mexico
S.A. Cl. L -- ADR................... 200,400 10,658,775
Wal-Mart de Mexico S.A. de C.V. --
Ser V*.............................. 829,000 1,720,500
------------
38,809,291
------------
POLAND -- 0.4%
Prokom Software S.A................... 27,800 1,248,094
------------
REPUBLIC OF CHINA -- 5.0%
China Southern Airlines Company,
Ltd.*............................... 3,400,000 1,057,478
China Unicom, Ltd. -- ADR*............ 88,400 1,928,225
United Microelectronics Corp.,
Ltd.*............................... 5,189,800 11,098,519
------------
14,084,222
------------
RUSSIA -- 4.4%
Golden Telecom, Inc.*................. 5,600 97,300
OAO Lukoil Holding.................... 138,200 7,960,320
Surgutneftegaz*....................... 298,000 4,358,250
------------
12,415,870
------------
SINGAPORE -- 4.7%
Chartered Semiconductor Manufacturing,
Ltd. -- ADR*........................ 43,400 2,633,838
Datacraft Asia, Ltd................... 1,192,320 9,896,256
Natsteel Electronics, Ltd............. 306,000 791,243
------------
13,321,337
------------
SOUTH AFRICA -- 3.8%
Dimension Data Holdings PLC*.......... 701,460 6,489,064
Impala Platinum Holdings, Ltd......... 95,100 4,111,649
------------
10,600,713
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
39
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- CONTINUED
--------------------------------------------------------------------------------
EMERGING COUNTRIES FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK & EQUIVALENTS (Continued)
------------------------------------------------------------------
SOUTH KOREA -- 12.0%
Hyundai Electronics Industries Co.,
Ltd.*............................... 269,850 $ 3,859,667
Hyundai Motor Co., Ltd................ 197,580 2,569,080
Kookmin Bank.......................... 255,660 3,049,166
Korea Electric Power Corp............. 187,360 4,889,186
Korea Telecom Corp.................... 79,450 4,759,234
Samsung Electronics................... 53,797 9,744,872
SK Telecom Co., Ltd.*................. 20,830 5,080,716
------------
33,951,921
------------
TAIWAN -- 5.1%
Hon Hai Precision Industry Co., Ltd... 402,540 2,646,768
Taiwan Semiconductor -- ADR*.......... 3,406,640 11,308,349
Via Technologies, Inc.*............... 42,000 443,728
------------
14,398,845
------------
THAILAND -- 0.5%
Thai Farmers Bank Public Co., Ltd.*... 2,885,700 1,470,377
------------
TURKEY -- 0.4%
Hurriyet Gazetecilik ve
Matbaacilik A.S.*................... 128,615,400 1,217,501
------------
UNITED KINGDOM -- 0.3%
Dimension Data Holdings PLC*.......... 92,200 854,707
------------
TOTAL COMMON STOCK & EQUIVALENTS
(Cost: $254,705,627)..............................
265,930,025
------------
PREFERRED STOCK -- 2.8%
------------------------------------------------------------------
BRAZIL -- 2.2%
CIA Vale do Rio Doce A*............... 136,500 3,425,448
<CAPTION>
NUMBER
OF SHARES VALUE
------------------------------------------------------------------
<S> <C> <C>
Brazil (Continued)
Banco Itau S.A.*...................... 17,520,000 $ 1,557,333
Petroleo Brasileiro S.A............... 49,200 1,405,333
------------
6,388,114
------------
THAILAND -- 0.6%
Siam Commercial Bank Public Co.,
Ltd.*............................... 4,203,500 1,618,838
------------
TOTAL PREFERRED STOCK
(Cost: $8,913,074)................................
8,006,952
------------
<CAPTION>
PRINCIPAL
AMOUNT
------------------------------------------------------------------
<S> <C> <C>
TIME DEPOSITS -- 2.6%
------------------------------------------------------------------
Bank One Grand Cayman
6.110%, 10/02/00.................... $5,596,535 5,596,535
Chase Manhattan Bank
6.110%, 10/02/00.................... 1,771,954 1,771,954
------------
TOTAL TIME DEPOSITS
(Cost: $7,368,489)................................
7,368,489
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 99.6%
(Cost: $270,987,190)............................ 281,305,466
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.4%..... 1,011,910
------------
NET ASSETS -- 100.0%.............................. $282,317,376
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
40
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
EMERGING COUNTRIES FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Aerospace/Defense............... 0.5%
Airlines........................ 0.4
Auto Manufacturers.............. 0.9
Banking & Investments........... 11.0
Beverages -- Non-Alcoholic...... 1.6
Broadcasting.................... 0.5
Building Materials.............. 0.2
Chemicals....................... 1.7
Computer Products............... 1.5
Computer Services............... 3.9
Computer Software............... 3.8
Computers....................... 1.4
Distribution/Wholesale.......... 0.5
Diversified Financial
Services...................... 1.2
Diversified Operations.......... 1.6
Drugs/Pharmaceuticals........... 3.3
Electric........................ 3.8
Electronic
Components/Semiconductors..... 9.7
Electronics..................... 4.4
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Entertainment................... 3.0%
Metals.......................... 1.5
Mining.......................... 1.2
Networking Products............. 2.6
Oil & Gas Producers............. 12.3
Paint & Related Products........ 0.3
Paper & Related Products........ 0.4
Publishing...................... 0.4
Retail -- Apparel............... 0.6
Retail -- Discount.............. 0.6
Retail -- Hypermarkets.......... 1.2
Retail -- Miscellaneous......... 0.5
Telecommunications.............. 18.7
Telecommunications Equipment.... 1.5
Television...................... 2.9
Other Assets in Excess of
Liabilities................... 0.4
-----
NET ASSETS...................... 100.0%
=====
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
41
<PAGE>
PACIFIC RIM FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: RANDALL KAHN, CFA, Partner, Portfolio Manager; PEDRO V.
MARCAL, Partner, Portfolio Manager; LAWRENCE S. SPEIDELL, CFA, Partner, Director
of Quantitative Research and Portfolio Management; JASON CAMPBELL, Portfolio
Manager; 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: Stock markets registered losses in most Pacific Rim countries
during the six-month period ended September 30, 2000. While fundamentals
continued to gradually improve throughout much of the region, several negative
factors weighed heavily on the markets.
In May, the US Federal Reserve raised interest rates by half a percentage
point, hurting dollar-linked economies such as Hong Kong. Weakness in US
equities -- particularly among technology stocks -- had a ripple effect
overseas, most notably in Korea and Japan. Also in Japan, the country's central
bank raised short-term interest rates for the first time in over 10 years, a
move that added to cautiousness among investors over the country's fledgling
economic recovery. Finally, concerns about the impact of rising oil prices and a
falling euro on the global economy contributed to the deterioration of stock
prices in the region this period.
PERFORMANCE: From April 1, 2000 through September 30, 2000, the Pacific Rim
Fund declined 17.4% while the MSCI Pacific Index fell 14.7%.
PORTFOLIO SPECIFICS: Stock selection in Japan, Singapore and Hong Kong and
within the consumer, commercial/industrial and financial services sectors
contributed to the Fund's underperformance this period. An overweighting in the
technology sector also hurt the Fund's performance relative to its benchmark.
On a positive note, Sanyo Electric, Toys R Us Japan and Daiichi Pharmaceutical
were examples of holdings that favorably affected results.
During the period, on a stock-by-stock basis, we increased the Fund's exposure
to the consumer durables and producers/manufacturing sectors and reduced
holdings in the financial services and commercial/industrial services sectors.
MARKET OUTLOOK: We remain positive on our outlook for the Pacific Rim. The
technology revolution should significantly boost growth in the region,
particularly in Singapore, Hong Kong and Taiwan. Many countries are poised to
reap the benefits of government reform, privatization and corporate
restructuring. While closely monitoring events in Japan, we are optimistic that
the country's economy is on the road to recovery, as demand shifts from the
public to the private sector. Amid this favorable environment, we are confident
that our focus on company-specific fundamentals will lead us to exciting
investment opportunities for the Pacific Rim Fund.
--------------------------------------------------------------------------------
42
<PAGE>
PACIFIC RIM FUND INSTITUTIONAL SHARES -- UNAUDITED
------------------------------------------------------------------------
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
19.11% As of 9/30/00 27.02%
</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
01/98 $252,000.00 $261,601.25
02/98 $258,600.00 $274,525.92
03/98 $253,200.00 $260,654.95
04/98 $241,200.00 $253,590.16
05/98 $207,400.00 $233,540.05
06/98 $193,600.00 $232,816.08
07/98 $197,400.00 $229,653.27
08/98 $178,200.00 $201,018.26
09/98 $192,200.00 $201,782.74
10/98 $208,200.00 $235,362.41
11/98 $225,600.00 $247,782.49
12/98 $233,600.00 $254,632.18
01/99 $238,200.00 $256,358.59
02/99 $229,400.00 $251,617.50
03/99 $246,400.00 $281,969.61
04/99 $285,400.00 $303,653.07
05/99 $293,800.00 $285,616.08
06/99 $355,200.00 $312,920.98
07/99 $384,400.00 $329,224.16
08/99 $396,600.00 $329,783.84
09/99 $405,000.00 $345,052.83
10/99 $415,400.00 $358,406.38
11/99 $485,827.59 $376,183.34
12/99 $566,340.09 $400,756.83
01/00 $558,541.16 $381,412.90
02/00 $639,741.80 $373,041.46
03/00 $583,773.00 $398,916.50
04/00 $507,159.96 $371,179.28
05/00 $474,129.19 $349,596.54
06/00 $514,500.13 $376,560.34
07/00 $453,714.34 $340,711.79
08/00 $536,520.64 $359,246.52
9/30/00 $482,386.88 $340,314.22
</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.
--------------------------------------------------------------------------------
43
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
PACIFIC RIM FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
---------------------------------------------------------------
COMMON STOCK -- 99.4%
---------------------------------------------------------------
AUSTRALIA -- 1.7%
Open Telecommunications, Ltd.*........ 37,800 $ 39,304
----------
HONG KONG -- 8.0%
Cheung Kong (Holdings), Ltd........... 3,000 36,168
China Resources Enterprise, Ltd....... 18,000 21,470
Electronics & Eltek International
Holdings, Ltd....................... 335,000 41,247
Hongkong.com Corp.*................... 249,200 18,538
Johnson Electric Holdings, Ltd........ 22,000 47,263
PetroChina Co., Ltd.*................. 109,000 22,228
----------
186,914
----------
INDONESIA -- 2.5%
Gulf Indonesia Resources, Ltd.*....... 5,400 58,725
----------
JAPAN -- 56.7%
Bridgestone Corp...................... 4,000 48,121
CKD Corp.............................. 4,000 36,646
CRESCO, Ltd........................... 1,000 68,480
Daiichi Pharmaceutical Co., Ltd....... 2,000 50,805
Fujikara, Ltd......................... 4,000 32,945
Furukawa Electric Co., Ltd............ 2,000 55,247
Hitachi Cable, Ltd.................... 4,000 45,530
Honda Tsushin Kogyo Co., Ltd.......... 1,250 53,211
Itochu Techno-Science Corp............ 600 109,939
Komatsu, Ltd.......................... 10,000 60,800
Livin' on the EDGE Co., Ltd.*......... 3 52,748
Moritex Corp.......................... 1,000 118,453
Net One Systems Co., Ltd.............. 3 85,230
Nippon Electric Glass Co., Ltd........ 3,000 69,406
NTT DoCoMo, Inc....................... 2 57,376
OBIC Business Counsultants, Inc....... 300 27,485
Pioneer Corp.......................... 2,000 81,436
Sanyo Electric Co., Ltd............... 12,000 105,497
Sony Corp............................. 400 40,570
Sumitomo Osaka Cement Co., Ltd........ 13,000 55,460
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
Japan (Continued)
Suruga Seiki Co., Ltd................. 1,000 $ 60,152
Takasago Electric Industry Co.,
Ltd................................. 90 4,164
----------
1,319,701
----------
SINGAPORE -- 12.0%
Flextronics International, Ltd.*...... 1,200 98,550
Omni Industries, Ltd.................. 26,000 41,085
JIT Holdings, Ltd..................... 24,000 60,128
Natsteel Electronics, Ltd............. 12,000 31,029
Venture Manufacturing, Ltd............ 5,000 48,268
----------
279,060
----------
SOUTH KOREA -- 18.1%
Hankuk Electric Glass Co., Ltd........ 1,620 91,521
Hyundai Precision Industry Co.,
Ltd.*............................... 8,360 38,084
Kia Motors Corp.*..................... 7,160 39,166
Korea Telecom Freetel*................ 1,040 45,511
Kumgang Korea Chemical Co., Ltd....... 1,880 84,294
Samsung Electronics................... 350 63,400
Samsung SDI Co., Ltd.................. 1,520 60,110
----------
422,086
----------
TAIWAN -- 0.4%
Hon Hai Precision Industry Co.,
Ltd................................. 1,500 9,863
----------
TOTAL COMMON STOCK
(Cost: $2,307,940)............................... 2,315,653
----------
TOTAL INVESTMENTS -- 99.4%
(Cost: $2,307,940)............................... 2,315,653
----------
</TABLE>
<TABLE>
<S> <C>
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.6%..... 14,039
----------
NET ASSETS -- 100.0%.............................. $2,329,692
----------
----------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
44
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
PACIFIC RIM FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Applications Software........... 4.1%
Audio/Video Products............ 5.2
Auto -- Cars/Light Trucks....... 1.7
Building Products............... 2.4
Communications Software......... 1.7
Computers....................... 8.4
Diversified Operations.......... 0.9
Drugs/Pharmaceuticals........... 2.2
Electronic
Components/Semiconductors..... 13.6
Electronics..................... 15.8
Housewares...................... 3.9
Instruments-Scientific.......... 5.1
Internet Content................ 3.1
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Machinery....................... 8.4%
Miscellaneous Manufacturing..... 0.2
Oil & Gas Producers............. 3.5
Paint & Related Products........ 3.6
Real Estate Development......... 1.6
Rubber & Plastics............... 1.8
Rubber -- Tires................. 2.1
Telecommunications.............. 4.4
Wire & Cable Products........... 5.7
Other Assets in Excess of
Liabilities................... 0.6
-----
NET ASSETS...................... 100.0%
=====
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
45
<PAGE>
LATIN AMERICA FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: ERNESTO RAMOS, PH.D., Partner, Portfolio Manager; THEODORA
JAMISON, Investment Analyst; LAWRENCE S. SPEIDELL, CFA, Partner, Director of
Quantitative Research and Portfolio Management.
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: Mirroring the downturn in US equity markets, stocks in Latin
America weakened during the six-month period ended September 30, 2000.
Uncertainties over the prospects for global economic growth and a worldwide
sell-off in technology stocks sent the majority of the region's bourses lower,
eclipsing many positive local developments.
In Mexico, for example, investors greeted the July 2nd presidential election
of Vicente Fox, the former head of Coca-Cola operations in Mexico, with
resounding approval. Fox's election marked the end of 71 years of rule by the
Institutional Revolutionary Party (PRI) and the beginning of a more democratic
landscape.
Prompted by a lack of inflationary pressure and the desire to stimulate
economic growth, Brazil's central bank cut interest rates on several occasions
during the period. In addition, the country reported generally positive economic
data, improved its debt profile and received news that Moody's was considering
upgrading its sovereign debt rating. However, these favorable events were
overshadowed by the sell-off in global equity markets.
PERFORMANCE: During the six months ended September 30, 2000, the Latin America
Fund declined 16.6% versus a 12.6% drop in the MSCI EMF Latin America Index.
PORTFOLIO SPECIFICS: The telecommunications and media companies that had
delivered such significant outperformance for the Fund in recent quarters fell
sharply during the period. Negative investor sentiment, triggered in part by
high bid prices in Europe's auction in April of 3G telecommunications licenses,
caused stocks to decline broadly and globally across the industries, including
those of many fundamentally sound companies.
Stocks that positively impacted performance included Unibanco, a Brazilian
financial services firm engaged in banking, insurance and asset management;
Coca-Cola FEMSA, a Mexican company which produces and distributes several
Coca-Cola beverages; and Telesp Celular Participaciones, a Brazilian provider of
cellular telecommunications services to municipalities in Sao Paulo.
MARKET OUTLOOK: Factors contributing to a strong outlook for Latin America
include:
- Privatization and restructuring trends
- Resurgence in consumer and business demand
- Higher commodity prices, which benefit Brazil, a major exporter of iron ore,
as well as oil exporters Mexico and Venezuela
- New political leadership in Mexico
On a bottom-up basis, we continue to identify many fundamentally strong
companies within the region, paving the way for strong results for the Latin
America Fund.
--------------------------------------------------------------------------------
46
<PAGE>
LATIN AMERICA FUND INSTITUTIONAL SHARES -- UNAUDITED
------------------------------------------------------------------------
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
50.31% As of 9/30/00 12.66%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LATIN AMERICA FUND MSCI EMP LATIN AMERICA
INSTITUTIONAL SHARES INDEX
<S> <C> <C>
11/30/97 $250,000.00 $250,000.00
12/97 $268,400.00 $266,600.00
01/98 $241,600.00 $236,986.07
02/98 $255,800.00 $249,434.95
03/98 $279,200.00 $267,119.89
04/98 $283,200.00 $261,000.17
05/98 $247,400.00 $227,242.41
06/98 $239,000.00 $213,812.38
07/98 $257,400.00 $224,391.82
08/98 $163,400.00 $146,554.79
09/98 $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
01/99 $175,130.25 $152,510.72
02/99 $187,537.86 $162,240.91
03/99 $235,134.23 $195,224.48
04/99 $273,984.27 $223,346.57
05/99 $258,118.81 $213,541.65
06/99 $265,644.73 $223,712.64
07/99 $232,489.99 $206,486.77
08/99 $223,540.24 $200,271.52
09/99 $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
01/00 $370,397.44 $259,656.73
02/00 $411,078.10 $279,585.39
03/00 $420,434.65 $281,904.83
04/00 $362,057.90 $251,484.48
05/00 $324,428.29 $239,212.03
06/00 $377,719.96 $261,068.84
07/00 $364,295.34 $255,651.69
08/00 $375,482.52 $261,819.79
9/30/00 $350,667.31 $246,387.35
</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.
--------------------------------------------------------------------------------
47
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
LATIN AMERICA FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
----------------------------------------------------------------
COMMON STOCK -- 80.3%
----------------------------------------------------------------
BRAZIL -- 42.1%
Companhia Brasileira de Distribuicao
Grupo Pao de Acucar -- ADR.......... 6,700 $ 249,155
Embraer - Empresa Brasileira de
Aeronautica S.A. -- ADR*............ 5,200 161,200
Embratel Participacoes S.A. -- ADR.... 9,100 168,350
Globo Cabo S.A. -- ADR*............... 16,200 216,675
Petroleo Brasileiro S.A.-Petrobras --
ADR*................................ 15,500 465,969
Tele Centro Oeste Celular
Participacoes S.A. -- ADR........... 21,000 223,126
Telesp Celular Participacoes S.A. --
ADR................................. 2,700 88,931
Telesp Celular Participacoes S.A. --
ADR Rts*............................ 950 0
Uniao de Bancos Brasileiros S.A.
(Unibanco) -- GDR................... 9,000 297,000
----------
1,870,406
----------
MEXICO -- 38.2%
Cemex S.A. -- ADR..................... 4,200 84,263
Coca-Cola Femsa S.A. -- ADR........... 15,800 316,000
Corporacion Interamericana de
Entretenimiento S.A. (CIE) Cl. B*... 17,000 82,354
Grupo Financiero Banamex Accival S.A.
Cl. O*.............................. 25,000 114,623
Grupo Iusacell S.A. -- ADR*........... 7,700 91,438
Grupo Televisa S.A. -- GDR 144A*...... 1,500 86,531
Telefonos de Mexico S.A. -- ADR....... 12,800 680,800
TV Azteca S.A. -- ADR................. 18,600 239,475
----------
1,695,484
----------
TOTAL COMMON STOCK
(Cost: $3,298,564)................................ 3,565,890
----------
<CAPTION>
NUMBER
OF SHARES VALUE
----------------------------------------------------------------
<S> <C> <C>
PREFERRED STOCK -- 9.2%
----------------------------------------------------------------
BRAZIL -- 9.2%
Banco Itau S.A........................ 2,600,000 $ 231,111
Lojas Americanas S.A.................. 100 0
Petroleo Brasileiro S.A.-Petrobras.... 6,300 179,951
----------
TOTAL PREFERRED STOCK
(Cost: $411,526).................................. 411,062
----------
----------------------------------------------------------------
RIGHTS -- 0.0%
----------------------------------------------------------------
MEXICO -- 0.0%
Cieb Cl. B Rts........................ 8,088 0
----------
<CAPTION>
PRINCIPAL
AMOUNT
----------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 14.5%
----------------------------------------------------------------
Brown Brothers Harriman & Co.
6.110%, 10/2/00
(Cost: $642,994).................... $642,994 642,994
----------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 104.0%
(Cost:$4,353,084)............................... 4,619,946
LIABILITIES IN EXCESS OF OTHER ASSETS -- (4.0%)... (177,214)
----------
NET ASSETS -- 100.0%.............................. $4,442,732
----------
----------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
48
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
LATIN AMERICA FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Aerospace/Defense............... 3.6%
Banking......................... 26.4
Beverages....................... 7.1
Broadcasting.................... 7.3
Building Products............... 1.9
Cable TV........................ 4.9
Entertainment................... 1.9
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Finance......................... 2.6%
Oil & Gas Producers............. 14.5
Retail -- Food.................. 5.6
Telecommunications.............. 28.2
Liabilities in Excess of Other
Assets........................ (4.0)
-----
NET ASSETS...................... 100.0%
=====
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
49
<PAGE>
LARGE CAP GROWTH FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: ANDREW B. GALLAGHER, Partner, Portfolio Manager; WILLIAM H.
CHENOWETH, CFA, Partner, Portfolio Manager; MICHAEL CARROLL, Portfolio Manager;
KENNETH H. LEE, Portfolio Manager; TRISHA C. SCHUSTER, CFA, Portfolio Manager;
EVAN LUNDQUIST, Portfolio Manager; 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: Following five calendar years of double-digit gains and a
strong first quarter 2000, US large-cap growth stocks took a breather during the
six-month period ended September 30, 2000.
In April and May, worries over rising interest rates, high valuations of
technology stocks and signs of resurgent inflation sent equities lower. In an
attempt to slow the robust US economy and stifle inflation, the Federal Reserve
raised short-term interest rates by half a percentage point in May -- its sixth
rate increase in less than a year. Optimistic that reports of slowing GDP growth
would preempt additional rate hikes, investors bid stock prices higher in June
and in August.
The summer's rallies were short lived, however, as investors turned their
attention from interest rates to corporate earnings and concerns that these
would be negatively affected by rising oil prices and a weaker euro. Uncertainty
surrounding the upcoming US elections also weighed on investor sentiment.
Throughout the period, technology issues led the market's decline, with the
tech-heavy Nasdaq Composite tumbling 19.7%.
PERFORMANCE: For the six-month period ended September 30, 2000, the Fund
declined 5.7%, outperforming its Russell 1000 Growth Index benchmark, which fell
7.9%.
PORTFOLIO SPECIFICS: Stock selection, especially in the technology and
consumer services sectors, was responsible for much of the Fund's outperformance
relative to its benchmark during the period.
Holdings that positively impacted results included CIENA, JDS Uniphase, Intel,
Sun Microsystems and Siebel Systems. Outside of the technology sector,
Metro-Goldwyn-Mayer (MGM) and Genentech also helped Fund performance.
During the period, on a company-specific basis, we decreased the Fund's
holdings in the retail and financial services sectors and increased holdings in
health care and technology. Although we boosted technology exposure during the
period, at September 30, 2000 the Fund's technology weighting was slightly below
its benchmark.
MARKET OUTLOOK: Our outlook for large-cap stocks remains positive. Corporate
earnings growth, although showing signs of slowing, is expected to remain solid.
The Federal Reserve is unlikely to raise interest rates amid economic reports
indicative of a deceleration in GDP growth. While we continue to closely monitor
oil prices, these have had little impact on inflation over the last 10 years.
The combination of solid earnings, steady interest rates and tame inflation
bodes well for US equities. Most importantly, we remain focused on finding and
investing in companies that will prevail despite changing macroeconomic
conditions.
--------------------------------------------------------------------------------
50
<PAGE>
LARGE CAP GROWTH FUND INSTITUTIONAL SHARES -- UNAUDITED
------------------------------------------------------------------------
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
58.32% As of 9/30/00 52.42%
</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>
12/27/96 $250,000.00 $250,000.00
12/96 $247,200.00 $246,184.68
01/97 $272,400.00 $263,452.07
02/97 $267,800.00 $261,660.59
03/97 $260,000.00 $247,499.52
04/97 $270,000.00 $263,933.49
05/97 $300,200.00 $282,981.57
06/97 $311,400.00 $294,300.83
07/97 $350,200.00 $320,317.03
08/97 $342,200.00 $301,578.48
09/97 $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
01/98 $366,477.73 $330,814.66
02/98 $400,191.62 $355,698.54
03/98 $424,640.63 $369,876.68
04/98 $438,280.60 $374,995.77
05/98 $427,214.20 $364,353.39
06/98 $458,097.16 $386,670.04
07/98 $448,284.00 $384,110.28
08/98 $373,570.00 $326,455.33
09/98 $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
01/99 $645,964.79 $471,718.79
02/99 $632,474.76 $450,161.24
03/99 $697,590.09 $473,884.74
04/99 $730,134.16 $474,500.79
05/99 $735,294.12 $459,933.61
06/99 $770,228.70 $492,128.96
07/99 $760,111.18 $476,479.26
08/99 $755,700.97 $484,245.88
09/99 $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
01/00 $1,089,838.58 $564,876.76
02/00 $1,248,865.26 $592,499.23
03/00 $1,292,448.42 $634,922.18
04/00 $1,193,089.18 $604,712.58
05/00 $1,117,078.06 $574,235.06
06/00 $1,235,115.80 $617,762.08
07/00 $1,180,636.85 $592,001.40
08/00 $1,334,734.47 $645,577.53
9/30/00 $1,219,031.54 $584,505.90
</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.
--------------------------------------------------------------------------------
51
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
LARGE CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
------------------------------------------------------------------
COMMON STOCK -- 99.0%
------------------------------------------------------------------
APPLICATION SOFTWARE -- 4.7%
Siebel Systems, Inc.*................. 64,000 $ 7,124,000
------------
BANKING -- 4.2%
Citigroup, Inc........................ 116,600 6,303,688
------------
BIOTECHNOLOGY -- 6.7%
Amgen, Inc.*.......................... 31,900 2,227,516
Genentech, Inc.*...................... 28,200 5,236,388
Serono S.A. -- ADR*................... 91,900 2,779,975
------------
10,243,879
------------
BROADCASTING -- 5.8%
AT&T Corp.-Liberty Media Group
Cl. A*.............................. 216,300 3,893,400
Viacom, Inc. Cl. A*................... 85,000 4,972,500
------------
8,865,900
------------
COMPUTER SOFTWARE -- 9.7%
Ariba, Inc.*.......................... 28,100 4,025,763
Oracle Corp.*......................... 58,400 4,599,000
Veritas Software Corp.*............... 43,650 6,198,300
------------
14,823,063
------------
COMPUTERS -- 6.4%
EMC Corp*............................. 49,900 4,946,338
Sun Microsystems, Inc.*............... 40,400 4,716,700
------------
9,663,038
------------
DRUGS/PHARMACEUTICALS -- 3.6%
Pfizer, Inc........................... 122,800 5,518,325
------------
ELECTRIC -- GENERATION -- 3.5%
AES Corp.*............................ 77,400 5,301,900
------------
ELECTRONIC COMPONENTS/SEMICONDUCTORS -- 2.6%
Intel Corp............................ 95,500 3,969,219
------------
INSURANCE -- 2.1%
American International Group, Inc..... 32,600 3,119,413
------------
INTERNET SOFTWARE -- 2.7%
VeriSign, Inc.*....................... 20,282 4,108,373
------------
LEISURE/GAMING -- 4.6%
MGM Grand, Inc........................ 183,900 7,022,681
------------
NETWORKING PRODUCTS -- 9.4%
Cisco Systems, Inc.*.................. 110,300 6,094,074
Juniper Networks, Inc.*............... 20,300 4,444,431
Network Appliance, Inc*............... 29,600 3,770,300
------------
14,308,805
------------
<CAPTION>
NUMBER
OF SHARES VALUE
------------------------------------------------------------------
<S> <C> <C>
OIL & GAS PRODUCERS -- 7.7%
Enron Corp............................ 81,000 $ 7,097,625
Santa Fe International Corp........... 103,100 4,645,944
------------
11,743,569
------------
OIL FIELD SERVICES -- 1.4%
Weatherford International, Inc.*...... 47,800 2,055,400
------------
RETAIL-DISCOUNT -- 2.8%
Wal-Mart Stores, Inc.................. 88,100 4,239,813
------------
TELECOMMUNICATIONS -- 12.2%
CIENA Corp.*.......................... 48,400 5,944,124
Corning, Inc.......................... 14,388 4,273,236
Nextel Communications, Inc.*.......... 67,700 3,164,975
Qwest Communications
International, Inc.*................ 106,400 5,113,850
------------
18,496,185
------------
TELECOMMUNICATIONS EQUIPMENT -- 8.9%
Corvis Corporation*................... 44,500 2,716,587
JDS Uniphase Corp.*................... 19,400 1,836,938
Nortel Networks Corporation........... 85,600 5,098,549
TyCom, Ltd.*.......................... 99,100 3,802,963
------------
13,455,037
------------
TOTAL COMMON STOCK
(Cost: $124,241,651).............................. 150,362,288
------------
<CAPTION>
PRINCIPAL
AMOUNT
------------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 3.3%
------------------------------------------------------------------
HSBC Holdings PLC
6.110%, 10/02/00
(Cost: $4,979,038).................. $4,979,038 4,979,038
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 102.3%
(Cost: $129,220,689)............................ 155,341,326
LIABILITIES IN EXCESS OF OTHER ASSETS -- (2.3)%... (3,499,857)
------------
NET ASSETS -- 100.0%.............................. $151,841,469
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
52
<PAGE>
MID CAP GROWTH FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: WILLIAM H. CHENOWETH, CFA, Partner, Portfolio Manager; ANDREW
B. GALLAGHER, Partner, Portfolio Manager; KENNETH H. LEE, CFA, Portfolio
Manager; TRISHA C. SCHUSTER, CFA, Portfolio Manager; EVAN LUNDQUIST, Portfolio
Manager; MICHAEL CARROLL, Portfolio Manager; 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: The US stock market was turbulent during the six months ended
September 30, 2000. In April and May, worries over rising interest rates, high
valuations of technology stocks and signs of resurgent inflation sent
equities -- particularly technology issues -- lower. Stocks advanced in June and
August, reflecting sentiment that the Federal Reserve's May interest rate
increase was the last in its series of tightening moves. Despite the summer's
rallies, however, equities --once again led by technology shares -- drifted
lower in September. The sell-off was prompted by concerns about the impact of
rising oil prices and a weakening euro on corporate earnings and uncertainty
surrounding the outcome of upcoming US elections.
Within the universe of US growth stocks, mid-cap issues represented the
best-performing capitalization segment during the period. The relative strength
of mid-cap growth stocks was driven by attractive valuations combined with the
ability to deliver double-digit earnings growth in the face of rising capital
costs.
PERFORMANCE: The Fund declined 1.9% during the six-month period ended
September 30, 2000, outperforming its Russell Midcap Growth Index, which
declined 5.1%.
PORTFOLIO SPECIFICS: The Fund's outperformance relative to its benchmark was
primarily due to stock selection in the technology sector.
Among the Fund's best-performing technology holdings were CIENA, a
manufacturer of optical networking equipment; Network Appliance, a data storage
and access company; and Mercury Interactive, a provider of Web-management
solutions that enable businesses to test and monitor Internet applications. Top
performers outside of the technology arena included Medimmune, a biotechnology
firm, and Kohl's, a department store chain.
During the period, on a stock-by-stock basis, we increased the Fund's
weighting in health care stocks and decreased holdings in the
commercial/industrial services sector.
MARKET OUTLOOK: Looking forward, there are many factors supporting continued
strong performance by US mid-cap equities, including:
- Sound fundamentals
- Attractive valuations
- Ongoing brisk pace of mergers and acquisitions activity
In this environment, we are optimistic that our forward-looking investment
philosophy will continue to lead us to high-growth, mid-sized companies poised
to materially outperform.
--------------------------------------------------------------------------------
53
<PAGE>
MID CAP GROWTH FUND INSTITUTIONAL SHARES -- UNAUDITED
------------------------------------------------------------------------
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 9/30/00
1 YEAR 5 YEARS 10 YEARS
98.20% 31.13% 26.39%
</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
01/86 $325,056.50 $254,807.50
02/86 $353,130.55 $277,271.33
03/86 $388,396.52 $293,918.70
04/86 $386,014.35 $297,128.29
05/86 $420,047.95 $315,779.03
06/86 $437,507.94 $320,667.29
07/86 $413,911.68 $295,148.59
08/86 $435,669.64 $308,539.48
09/86 $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
01/87 $479,743.74 $334,695.37
02/87 $504,626.45 $359,630.17
03/87 $508,798.02 $364,485.18
04/87 $503,489.57 $355,008.56
05/87 $505,637.79 $357,298.37
06/87 $523,217.13 $371,922.59
07/87 $560,975.96 $388,848.79
08/87 $578,628.01 $404,892.69
09/87 $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
01/88 $414,233.77 $305,043.40
02/88 $445,494.62 $330,063.06
03/88 $439,955.63 $331,554.94
04/88 $443,944.56 $333,428.23
05/88 $447,747.69 $327,526.55
06/88 $488,925.55 $352,277.73
07/88 $470,867.90 $338,944.02
08/88 $452,959.23 $326,033.64
09/88 $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
01/89 $513,031.90 $361,111.89
02/89 $500,496.82 $358,150.77
03/89 $509,489.08 $362,538.11
04/89 $536,525.97 $383,188.29
05/89 $569,665.39 $403,547.08
06/89 $542,074.60 $398,139.55
07/89 $603,744.62 $429,333.78
08/89 $625,700.80 $445,953.29
09/89 $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
01/90 $609,035.33 $406,828.25
02/90 $635,690.78 $415,192.63
03/90 $655,820.98 $432,593.36
04/90 $640,452.91 $420,627.83
05/90 $744,313.03 $463,885.19
06/90 $753,889.85 $469,614.17
07/90 $728,383.25 $454,642.87
08/90 $669,141.41 $401,772.45
09/90 $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
01/91 $716,025.92 $457,271.01
02/91 $782,807.27 $497,529.15
03/91 $822,078.10 $523,530.02
04/91 $801,991.99 $518,870.60
05/91 $839,658.88 $545,104.70
06/91 $785,304.96 $515,396.50
07/91 $844,961.96 $541,398.25
08/91 $884,985.00 $558,316.94
09/91 $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
01/92 $1,022,275.71 $630,984.86
02/92 $1,039,006.96 $632,347.79
03/92 $987,749.28 $606,370.94
04/92 $959,664.28 $594,765.00
05/92 $949,651.78 $595,924.79
06/92 $919,326.23 $578,196.03
07/92 $953,770.32 $603,972.01
08/92 $929,226.63 $596,066.01
09/92 $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
01/93 $1,184,316.84 $687,920.84
02/93 $1,169,591.84 $666,739.75
03/93 $1,226,044.14 $686,048.54
04/93 $1,194,788.41 $657,872.52
05/93 $1,273,544.56 $688,917.53
06/93 $1,305,239.10 $686,086.08
07/93 $1,319,645.72 $683,924.91
08/93 $1,391,678.78 $723,688.30
09/93 $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
01/94 $1,402,023.66 $775,460.30
02/94 $1,374,711.51 $768,775.83
03/94 $1,282,659.45 $732,543.43
04/94 $1,292,775.06 $730,756.02
05/94 $1,271,532.28 $731,822.93
06/94 $1,208,815.49 $700,339.90
07/94 $1,230,058.27 $719,739.32
08/94 $1,290,751.94 $762,671.77
09/94 $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
01/95 $1,211,552.75 $748,522.80
02/95 $1,280,844.33 $788,351.70
03/95 $1,324,938.97 $819,617.73
04/95 $1,350,135.91 $826,494.32
05/95 $1,371,133.36 $846,867.41
06/95 $1,472,970.98 $885,408.34
07/95 $1,591,606.56 $941,127.09
08/95 $1,626,252.35 $951,432.43
09/95 $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
01/96 $1,729,728.77 $1,008,541.97
02/96 $1,799,449.12 $1,046,664.86
03/96 $1,799,449.12 $1,054,912.58
04/96 $1,916,756.38 $1,105,875.40
05/96 $1,994,223.44 $1,128,435.26
06/96 $1,945,529.86 $1,094,356.52
07/96 $1,798,342.45 $1,009,434.45
08/96 $1,882,449.54 $1,064,004.48
09/96 $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
01/97 $2,075,809.46 $1,215,798.34
02/97 $1,941,387.42 $1,189,050.77
03/97 $1,830,756.88 $1,121,857.51
04/97 $1,833,136.03 $1,149,343.02
05/97 $1,990,160.02 $1,252,335.65
06/97 $2,065,103.28 $1,287,025.35
07/97 $2,275,658.16 $1,410,193.68
08/97 $2,242,350.05 $1,396,373.78
09/97 $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
01/98 $2,266,662.78 $1,400,987.46
02/98 $2,484,055.66 $1,532,708.30
03/98 $2,608,714.51 $1,596,959.43
04/98 $2,578,309.91 $1,618,646.14
05/98 $2,427,807.15 $1,552,071.23
06/98 $2,579,830.14 $1,595,979.32
07/98 $2,467,593.58 $1,527,607.57
08/98 $1,935,212.64 $1,235,987.28
09/98 $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
01/99 $2,938,363.68 $1,731,969.54
02/99 $2,695,079.80 $1,647,276.23
03/99 $3,028,410.30 $1,739,029.51
04/99 $3,148,472.48 $1,818,329.26
05/99 $3,003,134.06 $1,794,872.81
06/99 $3,243,258.40 $1,920,154.93
07/99 $3,194,285.67 $1,859,094.01
08/99 $3,249,577.46 $1,839,759.43
09/99 $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
01/00 $5,336,447.58 $2,543,825.37
02/00 $7,345,909.19 $3,078,537.46
03/00 $6,556,026.48 $3,081,616.00
04/00 $5,608,167.23 $2,782,483.53
05/00 $5,011,015.90 $2,579,640.48
06/00 $5,897,264.30 $2,853,350.34
07/00 $5,573,412.39 $2,672,723.90
08/00 $6,521,271.64 $3,075,770.66
9/30/00 $6,434,384.54 $2,925,365.47
</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.
--------------------------------------------------------------------------------
54
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
MID CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
------------------------------------------------------------------
COMMON STOCK -- 98.7%
------------------------------------------------------------------
APPLICATIONS SOFTWARE -- 0.6%
BroadVision, Inc.*.................... 55,700 $ 1,430,794
------------
AUTOMOBILES -- 0.9%
Harley-Davidson, Inc.................. 42,900 2,053,838
------------
BIOTECHNOLOGY -- 8.0%
Celera Genomics *..................... 16,500 1,643,813
Genzyme Corp.-General Division*....... 19,200 1,309,200
Gilead Sciences, Inc.*................ 11,900 1,305,281
Human Genome Sciences, Inc.*.......... 17,000 2,943,125
Immunex Corp.*........................ 44,600 1,940,100
Medimmune, Inc.*...................... 48,100 3,715,725
Millennium Pharmaceuticals, Inc.*..... 13,700 2,001,056
Protein Design Labs, Inc.*............ 16,400 1,976,200
Vertex Pharmaceuticals, Inc.*......... 28,800 2,433,599
------------
19,268,099
------------
COMPUTER HARDWARE -- 4.0%
Brocade Communications
Systems, Inc.*...................... 26,600 6,277,600
Redback Networks, Inc. *.............. 20,800 3,411,200
------------
9,688,800
------------
COMPUTER SERVICES -- 0.7%
StorageNetworks, Inc.*................ 16,600 1,696,313
------------
COMPUTER SOFTWARE -- 10.1%
Ariba, Inc.*.......................... 34,000 4,871,030
i2 Technologies, Inc.*................ 16,900 3,161,356
Mercury Interactive Corp.*............ 44,100 6,912,675
Micromuse, Inc.*...................... 14,200 2,853,313
Nuance Communications, Inc.*.......... 14,700 1,788,806
ONI Systems Corp.*.................... 19,300 1,665,831
Quest Software, Inc.*................. 22,600 1,403,672
Vitria Technology, Inc.*.............. 36,700 1,711,138
------------
24,367,821
------------
CONTRACT DRILLING -- 2.3%
Global Marine, Inc.*.................. 64,700 1,997,613
Diamond Offshore Drilling, Inc........ 37,200 1,525,200
Noble Drilling Corp.*................. 38,200 1,919,550
------------
5,442,363
------------
DRUGS/PHARMACEUTICALS -- 8.0%
Abgenix, Inc.*........................ 28,500 2,303,155
ALZA Corp.*........................... 36,700 3,174,550
Andrx Corp. -- Andrx Group*........... 24,600 2,297,024
COR Therapeutics, Inc.*............... 35,600 2,218,325
Forest Laboratories, Inc. Cl. A*...... 20,800 2,385,500
IDEC Pharmaceuticals Corp.*........... 16,700 2,928,501
King Pharmaceuticals, Inc.*........... 39,200 1,310,750
Sepracor, Inc.*....................... 21,000 2,576,437
------------
19,194,242
------------
ELECTRIC -- 3.8%
Calpine Corp.*........................ 56,100 5,855,438
<CAPTION>
NUMBER
OF SHARES VALUE
------------------------------------------------------------------
<S> <C> <C>
Electric (Continued)
NRG Energy, Inc.*..................... 38,700 $ 1,412,550
Southern Energy, Inc.*................ 62,800 1,970,350
------------
9,238,338
------------
ELECTRONIC COMPONENTS/SEMICONDUCTORS -- 14.8%
Applied Micro Circuits Corp.*......... 31,800 6,584,587
Conexant Systems, Inc.*............... 50,400 2,110,499
GlobeSpan, Inc.*...................... 16,100 1,964,200
Maxim Integrated Products, Inc.*...... 43,800 3,523,162
Micrel, Inc.*......................... 25,300 1,695,100
PMC-Sierra, Inc.*..................... 13,600 2,927,400
Sanmina Corp.*........................ 28,800 2,696,400
Semtech Corp.*........................ 39,400 1,699,124
TranSwitch Corp.*..................... 39,500 2,518,124
Virata Corp.*......................... 17,800 1,177,025
Vitesse Semiconductor Corp.*.......... 36,500 3,246,218
Waters Corp.*......................... 61,200 5,446,800
------------
35,588,639
------------
ELECTRONIC INSTRUMENTS -- 1.9%
Keithley Instruments, Inc............. 26,800 1,876,000
Newport Corp.......................... 16,300 2,596,029
------------
4,472,029
------------
INTERNET SOFTWARE -- 5.3%
Agile Software Corp.*................. 27,400 2,464,288
Art Technology Group, Inc.*........... 18,000 1,705,500
CacheFlow, Inc.*...................... 20,100 2,874,300
Interwoven, Inc.*..................... 19,000 2,148,188
TIBCO Software, Inc.*................. 25,600 2,161,600
Vignette Corp.*....................... 46,100 1,377,238
------------
12,731,114
------------
MEDICAL SUPPLIES/EQUIPMENT -- 3.1%
MiniMed, Inc.*........................ 29,000 2,591,875
PE Corp.-PE Biosystems Group.......... 42,800 4,986,200
------------
7,578,075
------------
MULTIMEDIA -- 0.4%
Entravision Communications Corp.
Cl. A*.............................. 56,300 978,213
------------
NETWORKING PRODUCTS -- 5.8%
Avici Systems, Inc.*.................. 16,900 1,607,613
Emulex Corp.*......................... 20,000 2,450,000
Extreme Networks, Inc.*............... 17,700 2,026,650
Network Appliance, Inc.*.............. 49,100 6,254,113
Turnstone Systems, Inc.*.............. 34,500 1,599,938
------------
13,938,314
------------
OIL & GAS SERVICES -- 7.2%
Anadarko Petroleum Corp............... 27,000 1,794,420
Baker Hughes, Inc..................... 44,300 1,644,638
BJ Services Co.*...................... 43,900 2,683,388
ENSCO International, Inc.............. 60,900 2,329,425
Nabors Industries, Inc.*.............. 26,800 1,404,320
National-Oilwell, Inc.*............... 49,700 1,553,125
Rowan Companies, Inc.*................ 70,700 2,050,300
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
55
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- CONTINUED
--------------------------------------------------------------------------------
MID CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (Continued)
------------------------------------------------------------------
Oil & Gas Services (Continued)
Smith International, Inc.*............ 32,000 $ 2,610,000
UTI Energy Corp.*..................... 28,300 1,262,888
------------
17,332,504
------------
OPTICAL SUPPLIES -- 1.1%
Allergan, Inc......................... 32,200 2,718,888
------------
PIPELINES -- 1.0%
Dynegy, Inc. Cl. A.................... 41,800 2,382,600
------------
RETAIL -- 0.6%
Starbucks Corp.*...................... 36,400 1,458,275
------------
RETAIL -- DEPARTMENT STORES -- 1.1%
Kohls Corp.*.......................... 44,500 2,567,094
------------
RETAIL -- DISCOUNT -- 0.7%
Dollar Tree Stores, Inc.*............. 40,500 1,642,781
------------
TELECOMMUNICATIONS -- 6.5%
Avanex Corp.*......................... 18,900 2,035,294
CIENA Corp.*.......................... 74,200 9,112,688
Crown Castle International Corp.*..... 78,500 2,438,406
Metromedia Fiber Network, Inc. Cl.
A*.................................. 29,200 709,925
Nextlink Communications, Inc. Cl.
A*.................................. 36,800 1,294,900
------------
15,591,213
------------
TELECOMMUNICATIONS EQUIPMENT -- 7.5%
Comverse Technology, Inc.*............ 35,700 3,855,600
Corvis Corp.*......................... 21,100 1,288,090
Cosine Communications, Inc.*.......... 21,200 1,177,925
Finisar Corp.*........................ 56,900 2,752,538
Natural MicroSystems Corp.*........... 26,800 1,441,757
Nextel Partners, Inc. Cl. A*.......... 52,000 1,514,500
<CAPTION>
NUMBER
OF SHARES VALUE
------------------------------------------------------------------
<S> <C> <C>
Telecommunications Equipment (Continued)
Scientific-Atlanta, Inc............... 22,500 $ 1,431,563
SDL, Inc.*............................ 14,600 4,515,963
------------
17,977,936
------------
TELECOMMUNICATIONS SERVICES -- 0.8%
McLeodUSA, Inc.*...................... 81,500 1,166,469
Time Warner Telecom, Inc. Cl. A*...... 16,100 777,831
------------
1,944,300
------------
WIRELESS EQUIPMENT -- 2.5%
Netro Corp.*.......................... 25,600 1,516,800
Palm, Inc.*........................... 86,300 4,568,506
------------
6,085,306
------------
TOTAL COMMON STOCK
(Cost: $163,756,518)..............................
237,367,889
------------
<CAPTION>
PRINCIPAL
AMOUNT
------------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 1.7%
------------------------------------------------------------------
HSBC Holdings PLC
6.110%, 10/02/00
(Cost: $4,054,280).................. $4,054,280 4,054,280
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 100.4%
(Cost: $167,810,798)............................ 241,422,169
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.4)%... (976,924)
------------
NET ASSETS -- 100.0%.............................. $240,445,245
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
56
<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; MICHAEL P.
GIGGIE, Investment Analyst; JOHN MAZUR, Investment Analyst.
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: Despite strong gains in June and August, when the Russell
2000 Growth Index climbed 12.9% and 10.5%, respectively, small-cap growth stocks
drifted lower during the six-month period ended September 30, 2000.
In April and May, worries over rising interest rates, high valuations of
technology stocks and signs of resurgent inflation sent equities lower.
The Federal Reserve raised interest rates by one-half percentage point in May
-- its sixth increase in a series of moves beginning June 30, 1999 and totaling
1.75%. Amid reports of slowing economic growth, investors grew confident that
the rate hike in May was the last in the Federal Reserve's round of tightening,
sending stocks higher. However, equities resumed their downward trend late in
the period amid concerns that rising oil prices and a weakening euro would take
their toll on corporate profitability. In addition, the uncertain outcome of
upcoming US elections dampened investor enthusiasm.
Technology issues bore the brunt of the market's decline, with the tech-laden
Nasdaq Composite tumbling 19.7% during the six-month period.
PERFORMANCE: From April 1, 2000 through September 30, 2000, the Fund declined
12.2%. During the same period, the Russell 2000 Growth Index fell 11.1%.
PORTFOLIO SPECIFICS: The Fund's slight underperformance relative to its
benchmark during the period was due to stock selection in the
commercial/industrial and consumer services sectors, an overweighting in
technology and an underweighting in health care and financial services
stocks-two sectors that performed relatively well.
Stock selection within the technology sector positively contributed to this
period's results. Among the Fund's best-performing holdings were Powerwave
Technologies, a manufacturer of ultra-linear radio frequency (RF) power
amplifiers for use in wireless communications; Micrel, a provider of analog and
mixed-signal semiconductor devices; and MMC Networks, a supplier of
network-processor chip sets to customers like Cisco and Nortel.
MARKET OUTLOOK: We are optimistic that the following positive factors will
create a favorable environment for small-cap growth stock investing:
- Attractive valuations
- Expectations for solid operating earnings
- High levels of cash holdings by aggressive growth mutual funds, pointing
toward strong future demand for small cap growth stocks
As a result, we are confident that our bottom-up investment process will
continue to identify promising small-cap growth investment opportunities.
--------------------------------------------------------------------------------
57
<PAGE>
SMALL CAP GROWTH FUND INSTITUTIONAL SHARES -- UNAUDITED
------------------------------------------------------------------------
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 9/30/00 SINCE
1 YEAR 5 YEARS INCEPTION
52.49% 22.65% 19.84%
</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>
10/1/93 $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
01/94 $257,143.12 $263,394.52
02/94 $255,285.75 $262,235.58
03/94 $234,854.63 $246,126.45
04/94 $235,473.76 $246,503.02
05/94 $229,076.14 $240,978.89
06/94 $217,519.14 $230,681.86
07/94 $222,678.51 $233,969.08
08/94 $237,743.88 $251,137.73
09/94 $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
01/95 $231,007.29 $245,226.33
02/95 $243,351.19 $256,558.24
03/95 $255,254.24 $264,052.31
04/95 $259,442.35 $268,023.65
05/95 $261,426.19 $271,534.76
06/95 $284,571.01 $290,246.22
07/95 $312,124.36 $312,868.01
08/95 $313,006.06 $316,728.81
09/95 $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
01/96 $323,033.16 $325,361.26
02/96 $342,667.60 $340,197.74
03/96 $352,952.30 $346,923.45
04/96 $389,649.99 $373,556.76
05/96 $411,388.11 $392,720.22
06/96 $386,377.58 $367,193.41
07/96 $341,966.37 $322,359.09
08/96 $372,352.99 $346,223.33
09/96 $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
01/97 $394,412.55 $373,863.25
02/97 $351,960.52 $351,281.91
03/97 $332,992.58 $326,491.95
04/97 $327,874.25 $322,704.64
05/97 $379,960.80 $371,207.15
06/97 $407,660.00 $383,791.07
07/97 $436,864.59 $403,441.17
08/97 $445,294.78 $415,544.41
09/97 $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
01/98 $426,704.25 $406,435.55
02/98 $464,802.85 $442,319.75
03/98 $490,779.16 $460,875.06
04/98 $490,779.16 $463,700.22
05/98 $452,334.22 $430,012.40
06/98 $468,959.06 $434,407.13
07/98 $429,194.63 $398,134.13
08/98 $325,072.58 $306,244.78
09/98 $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
01/99 $500,962.47 $435,820.50
02/99 $447,785.63 $395,942.93
03/99 $495,828.16 $410,038.50
04/99 $525,167.10 $446,244.90
05/99 $504,263.10 $446,958.89
06/99 $566,975.09 $470,513.62
07/99 $569,542.25 $455,974.75
08/99 $564,774.67 $438,921.29
09/99 $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
01/00 $860,760.60 $591,240.61
02/00 $1,159,018.07 $728,822.30
03/00 $1,010,263.09 $652,223.08
04/00 $867,488.21 $586,368.11
05/00 $762,088.95 $535,002.27
06/00 $918,319.06 $604,124.56
07/00 $822,263.71 $552,351.08
08/00 $942,613.21 $610,458.42
9/30/00 $886,923.53 $580,118.64
</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.
--------------------------------------------------------------------------------
58
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
-----------------------------------------------------------------
COMMON STOCK -- 94.9%
-----------------------------------------------------------------
ADVERTISING -- 0.3%
Getty Images, Inc.*................. 22,600 $ 687,888
------------
AEROSPACE/DEFENSE -- 3.0%
Aeroflex, Inc.*..................... 20,100 977,363
Newport Corp........................ 31,100 4,953,159
Photon Dynamics, Inc.*.............. 7,900 298,225
Remec, Inc.*........................ 41,450 1,220,184
Teledyne Technologies, Inc.*........ 17,800 518,425
------------
7,967,356
------------
AIRLINES -- 0.4%
Atlantic Coast Airlines
Holdings, Inc.*................... 10,300 331,531
Skywest, Inc........................ 14,800 758,500
------------
1,090,031
------------
APPAREL -- 0.6%
Columbia Sportswear Co.*............ 13,900 637,663
Timberland Co. Cl. A*............... 25,400 1,041,400
------------
1,679,063
------------
APPLICATIONS SOFTWARE -- 2.3%
Exchange Applications, Inc.*........ 32,800 148,623
EXE Technologies, Inc.*............. 15,900 238,500
HNC Software, Inc.*................. 14,100 1,153,556
Iona Technologies PLC*.............. 20,900 1,452,550
National Instruments Corp.*......... 17,950 792,044
OpenTV Corp. Cl. A*................. 35,346 1,175,255
Resonate, Inc.*..................... 6,300 248,850
SilverStream Software, Inc.*........ 4,900 147,613
WebTrends Corp.*.................... 20,300 758,713
------------
6,115,704
------------
ATHLETIC EQUIPMENT -- 0.1%
Direct Focus, Inc.*................. 9,400 373,650
------------
AUCTIONS -- 0.2%
Sothebys Holding, Inc. Cl. A........ 17,100 425,363
------------
AUTO-TRUCKS -- 0.1%
Oshkosh Truck Co. Cl. B............. 7,900 306,125
------------
BATTERY SYSTEMS -- 0.1%
Valence Technology, Inc.*........... 18,500 319,125
------------
BEVERAGES-ALCOHOLIC -- 0.3%
Constellation Brands, Inc. Cl. A*... 13,900 754,944
------------
BIOTECHNOLOGY -- 5.5%
Abgenix, Inc.*...................... 8,200 662,663
Arena Pharmaceuticals, Inc.*........ 6,300 270,900
Aurora Biosciences Corp.*........... 12,300 836,400
Aviron*............................. 17,900 1,043,794
CuraGen Corp.*...................... 28,200 1,502,530
Deltagen, Inc.*..................... 10,700 331,031
Enzon, Inc.*........................ 48,500 3,201,000
Genencor International, Inc.*....... 8,400 248,850
Genzyme Transgenics Corp.*.......... 19,500 687,375
Illumina, Inc.*..................... 5,600 254,100
<CAPTION>
NUMBER
OF SHARES VALUE
-----------------------------------------------------------------
<S> <C> <C>
Biotechnology (Continued)
Invitrogen Corp.*................... 46,600 $ 3,314,425
Large Scale Biology Corp.*.......... 6,900 225,975
Myriad Genetics, Inc.*.............. 5,100 438,600
Sangamo Biosciences, Inc.*.......... 10,500 406,875
Trimeris, Inc.*..................... 10,100 706,369
Visible Genetics, Inc.*............. 10,800 436,050
------------
14,566,937
------------
BROADCASTING -- 1.4%
Pegasus Communications Corp. Cl.
A*................................ 18,200 879,288
Price Communications Corp.*......... 28,500 557,531
Radio One, Inc.
Cl. D*............................ 25,600 180,800
SBS Broadcasting S.A.*.............. 17,100 680,794
Sirius Satellite Radio, Inc.*....... 18,900 999,338
XM Satellite Radio
Holdings, Inc.*................... 11,700 503,831
------------
3,801,582
------------
CASINO SERVICES -- 0.3%
Anchor Gaming*...................... 9,500 755,844
------------
CHEMICALS -- 0.1%
Georgia Gulf Corp................... 31,100 355,706
------------
COMMUNICATIONS SOFTWARE -- 0.7%
Puma Technology, Inc.*.............. 30,900 627,656
Seachange International, Inc.*...... 7,100 236,963
SignalSoft Corp.*................... 7,000 284,375
SpeechWorks International, Inc.*.... 2,800 173,600
Ulticom, Inc.*...................... 5,600 263,900
Witness Systems, Inc.*.............. 8,800 158,950
------------
1,745,444
------------
COMPUTER SERVICES -- 2.7%
Aspen Technology, Inc.*............. 18,600 839,325
eLoyalty Corp.*..................... 12,800 163,200
Entrust Technologies, Inc.*......... 15,500 428,188
Internet Security Systems, Inc.*.... 33,600 2,524,200
McAfee.com Corp. Cl. A*............. 9,300 138,338
M-Systems Flash Disk Pioneers,
Ltd.*............................. 54,200 2,069,763
Silicon Storage
Technology, Inc.*................. 7,600 206,625
SonicWALL, Inc.*.................... 25,200 718,200
------------
7,087,839
------------
COMPUTER SOFTWARE -- 7.0%
BindView Development Corp.*......... 47,600 359,975
Broadbase Software, Inc.*........... 26,000 352,625
Business Objects S.A. -- ADR*....... 32,000 3,618,000
Kana Communications, Inc.*.......... 9,604 213,689
Mercury Interactive Corp.*.......... 79,300 12,430,274
NetIQ Corp.*........................ 9,224 605,902
Numerical Technologies, Inc.*....... 6,800 195,925
Pivotal Corp.*...................... 11,200 588,000
Transaction Systems
Architects, Inc. Cl. A*........... 11,000 178,750
------------
18,543,140
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
59
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- CONTINUED
--------------------------------------------------------------------------------
SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
-----------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (Continued)
-----------------------------------------------------------------
COMPUTERS -- 1.3%
Adept Technology, Inc.*............. 14,200 $ 746,388
Affiliated Computer Services, Inc.
Cl. A*............................ 19,500 972,563
Concurrent Computer Corp.*.......... 28,000 532,000
Extended Systems, Inc.*............. 10,400 559,000
Globix Corp.*....................... 27,500 641,094
------------
3,451,045
------------
CONSULTING SERVICES -- 0.1%
Management Network Group, Inc.*..... 8,200 171,175
------------
CONSUMER SERVICES -- 0.5%
Forrester Research, Inc.*........... 14,500 924,375
Western Gas Resources, Inc.......... 14,000 350,875
------------
1,275,250
------------
CRUISE LINES -- 0.1%
American Classic Voyages Co.*....... 12,600 184,275
------------
DATA PROCESSING/MANAGEMENT SOFTWARE -- 1.6%
Documentum, Inc.*................... 21,700 1,761,769
Polycom, Inc.*...................... 28,000 1,875,126
Reynolds & Reynolds Co. Cl. A....... 29,600 588,300
------------
4,225,195
------------
DISTRIBUTION/WHOLESALE -- 0.2%
United Stationers, Inc.*............ 23,700 636,938
------------
DIVERSIFIED FINANCIAL SERVICES -- 0.2%
London Pacific Group, Ltd. -- ADR... 27,900 554,513
------------
DRILLING -- 1.8%
Atwood Oceanics, Inc.*.............. 6,400 266,800
Marine Drilling Co.*................ 60,300 1,722,319
Nabors Industries*.................. 20,762 1,087,929
Patterson Energy, Inc.*............. 14,000 481,250
Precision Drilling Corp.*........... 12,800 456,000
Unit Corp.*......................... 10,700 157,825
UTI Energy Corp.*................... 10,400 464,100
------------
4,636,223
------------
DRUGS/PHARMACEUTICALS -- 6.7%
Advance Paradigm, Inc.*............. 24,500 1,033,594
Alexion Pharmaceuticals, Inc.*...... 13,900 1,584,600
Alpharma, Inc. Cl. A................ 21,500 1,314,188
Cubist Pharmaceuticals, Inc.*....... 5,600 291,550
Dura Pharmaceuticals, Inc.*......... 49,200 1,740,450
ImmundGen, Inc.*.................... 8,100 276,919
King Pharmaceuticals, Inc.*......... 15,656 523,498
Medarex, Inc.*...................... 20,600 2,416,637
Medicis Pharmaceutical Corp. Cl.
A*................................ 36,500 2,244,749
NBTY, Inc.*......................... 18,300 119,521
NeoPharm, Inc.*..................... 36,300 1,433,850
OSI Pharmaceuticals, Inc.*.......... 33,200 2,324,000
OXMA, Ltd.*......................... 1,500 21,656
Pharmacopeia, Inc.*................. 15,500 395,250
Priority Healthcare Corp. Cl. B*.... 14,400 1,098,000
<CAPTION>
NUMBER
OF SHARES VALUE
-----------------------------------------------------------------
<S> <C> <C>
Drugs/Pharmaceuticals (Continued)
Titan Pharmaceuticals, Inc.*........ 5,700 $ 370,500
United Therapeutics Corp.*.......... 6,300 550,463
------------
17,739,425
------------
E-COMMERCE -- 0.8%
PurchasePro.com, Inc.*.............. 25,000 2,196,874
------------
EDUCATIONAL SOFTWARE -- 0.4%
SmartForce Public Ltd., Co. --
ADR*.............................. 19,700 933,288
------------
ELECTRONIC COMPONENTS/SEMICONDUCTORS -- 11.3%
ACT Manufacturing, Inc.*............ 15,500 817,625
Alpha Industries, Inc.*............. 42,200 1,437,438
Benchmark Electronics, Inc.*........ 10,400 540,800
C-Cube Mircosystems, Inc.*.......... 22,100 453,050
Electronic Scientific
Industries, Inc.*................. 36,800 1,292,600
EMCORE Corp......................... 59,800 2,486,370
Exar Corp.*......................... 8,500 1,028,500
Fairchild Semiconductor
International Cl. A*.............. 7,100 199,688
Globespan, Inc.*.................... 16,700 2,037,400
Integrated Device
Technology, Inc.*................. 19,800 1,791,900
Integrated Silicon Solution*........ 8,300 117,756
International Rectifier*............ 22,800 1,152,825
Kent Electronics Corp.*............. 31,300 747,288
LTX Corp.*.......................... 18,000 340,875
MEMC Electronic Materials, Inc.*.... 17,100 220,163
Methode Electronics, Inc. Cl. A..... 23,300 1,032,481
Micrel, Inc.*....................... 48,900 3,276,299
Microsemi Corp.*.................... 24,500 934,063
Microtune, Inc.*.................... 1,400 74,988
Photronics, Inc.*................... 15,000 327,188
Pixelworks, Inc.*................... 20,800 991,900
Power Integrations, Inc.*........... 28,700 400,006
PSi Technologies Holdings, Inc.*.... 6,900 87,975
Qlogic Corp.*....................... 27,800 2,446,400
S3, Inc.*........................... 28,400 292,875
Semtech Corp.*...................... 32,000 1,380,000
Transwitch Corp.*................... 38,850 2,476,688
Tvia, Inc.*......................... 7,200 129,150
Varian Semiconductor Equipment
Association, Inc.*................ 22,500 842,344
Virata Corp.*....................... 8,800 581,900
------------
29,938,535
------------
ELECTRONICS -- 3.9%
Active Power, Inc.*................. 7,100 440,200
Amphenol Corp. Cl. A*............... 28,600 1,628,413
Artesyn Technologies, Inc.*......... 27,400 798,025
Cymer, Inc.*........................ 38,500 1,181,469
DDi Corp.*.......................... 24,000 1,062,000
Excalibur Technologies Corp.*....... 13,700 920,469
Mechanical Technology, Inc.*........ 25,600 276,800
Merix Corp.*........................ 5,100 330,544
SMTC Corp.*......................... 6,400 137,600
TTM Technologies, Inc.*............. 12,600 296,100
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
60
<PAGE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
-----------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (Continued)
-----------------------------------------------------------------
Electronics (Continued)
Veeco Instruments, Inc.*............ 15,900 $ 1,689,623
Zygo Corp.*......................... 17,100 1,487,700
------------
10,248,943
------------
ENGINEERING & CONSTRUCTION -- 0.3%
Dycom Industries, Inc.*............. 19,500 811,688
------------
ENTERPRISE SOFTWARE -- 1.3%
AvantGo, Inc.*...................... 2,000 40,000
JDA Software Group, Inc.*........... 23,100 294,525
Manugistics Group, Inc.*............ 30,900 3,032,062
------------
3,366,587
------------
ENTERTAINMENT -- 1.6%
Macrovision Corp.*.................. 51,700 4,187,699
------------
FOOD -- 0.1%
Michael Foods, Inc.................. 8,900 208,038
------------
GAMBLING (NON-HOTEL) -- 0.1%
Argosy Gaming Co.*.................. 10,700 193,938
------------
HEALTH CARE -- 0.3%
Oxford Health Plans, Inc.*.......... 26,100 802,168
------------
HOME FURNISHINGS -- 0.8%
Ethan Allen Interiors, Inc.......... 43,050 1,218,853
Williams Sonoma*.................... 27,000 938,250
------------
2,157,103
------------
HOSPITALITY -- 0.2%
Orient Express Hotels, Ltd. Cl.
A*................................ 24,000 462,000
------------
HUMAN RESOURCES -- 0.5%
Administaff, Inc.*.................. 17,600 1,332,320
------------
INSTRUMENTS -- 0.4%
Microchip Technology, Inc.*......... 22,050 729,028
Therma-Wave, Inc.*.................. 7,700 221,375
------------
950,403
------------
INTERNET CONTENT -- 0.3%
CNET Networks, Inc.*................ 6,500 158,336
Internet Pictures Corp.*............ 7,600 41,325
NaviSite, Inc.*..................... 16,000 431,000
S1 Corp.*........................... 5,800 69,238
SportsLine.com, Inc.*............... 10,800 149,175
------------
849,074
------------
INTERNET SOFTWARE -- 4.8%
Art Technology Group, Inc.*......... 14,300 1,354,925
Backweb Technologies, Ltd.*......... 8,700 88,223
CacheFlow, Inc.*.................... 14,500 2,073,499
Commtouch Software, Ltd.*........... 34,100 645,769
HotJobs.com, Ltd.*.................. 23,100 394,144
Netegrity, Inc.*.................... 16,350 1,144,500
Netopia, Inc.*...................... 21,500 236,500
PC-Tel, Inc.*....................... 10,900 253,425
<CAPTION>
NUMBER
OF SHARES VALUE
-----------------------------------------------------------------
<S> <C> <C>
Internet Software (Continued)
Radware, Ltd.*...................... 17,400 $ 522,000
Retek, Inc.*........................ 4,800 254,400
Saba Software, Inc.*................ 10,100 282,800
Software.com, Inc.*................. 12,300 2,231,680
Symantec Corp.*..................... 28,100 1,236,400
TeleCommunication Systems, Inc.*.... 7,000 133,875
Versata, Inc.*...................... 15,900 421,350
Vitria Technology, Inc.*............ 13,300 620,113
WatchGuard Technologies, Inc.*...... 13,900 834,000
------------
12,727,603
------------
INVESTMENT COMPANIES -- 0.5%
American Capital Strategies......... 11,800 279,513
SEI Investment Co................... 15,900 1,124,925
------------
1,404,438
------------
MACHINERY-DIVERSIFIED -- 0.7%
Brooks Automation, Inc.*............ 9,600 318,000
GaSonics International Corp.*....... 38,700 474,075
National-Oilwell, Inc.*............. 26,700 834,375
Semitool, Inc.*..................... 10,400 133,250
Universal Compression
Holdings, Inc.*................... 5,700 176,344
------------
1,936,044
------------
MEDICAL-GENERIC DRUGS -- 0.2%
Barr Laboratories, Inc.*............ 9,100 603,444
------------
MEDICAL-HMO -- 0.1%
Mid Atlantic Medical
Services, Inc.*................... 15,700 237,463
------------
MEDICAL-HOSPITAL -- 0.0%
Triad Hospitals, Inc.*.............. 2,000 58,750
------------
MEDICAL INSTRUMENTS -- 0.5%
Bruker Daltonics Inc.*.............. 8,400 372,750
Varian, Inc.*....................... 19,200 826,800
------------
1,199,550
------------
MEDICAL LABORATORY & TESTING SERVICES -- 0.0%
Laboratory Corporation Of America
Holdings*......................... 600 71,850
------------
MEDICAL SUPPLIES/EQUIPMENT -- 0.5%
Accredo Health, Inc.*............... 9,800 478,975
Caliper Technologies Corp.*......... 6,900 399,769
Immunomedics, Inc.*................. 9,600 201,000
Owens & Minor, Inc.................. 14,000 220,500
------------
1,300,244
------------
MEDICAL-WHOLESALE DRUG DISTRIBUTION -- 0.2%
Amerisource Health Corp.*........... 9,100 427,700
------------
MISCELLANEOUS MANUFACTURING -- 0.1%
Simpson Manufacturing, Inc.*........ 5,300 236,844
------------
NETWORKING PRODUCTS -- 1.6%
Anixter International, Inc.*........ 27,800 809,675
Black Box Corp.*.................... 11,500 536,188
Elbit, Ltd.......................... 18,500 168,813
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
61
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- CONTINUED
--------------------------------------------------------------------------------
SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
-----------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (Continued)
-----------------------------------------------------------------
Networking Products (Continued)
MMC Networks, Inc.*................. 20,600 $ 2,605,900
Optibase, Ltd.*..................... 3,000 52,688
Turnstone Systems, Inc.*............ 3,800 176,225
------------
4,349,489
------------
OIL & GAS PRODUCERS -- 1.2%
Chieftain International, Inc.*...... 5,200 107,575
Forest Oil Corp.*................... 29,200 472,675
Louis Dreyfus Natural Gas Corp.*.... 20,400 808,350
Stone Energy Corp.*................. 19,600 1,078,000
Swift Energy Corp.*................. 14,300 594,344
------------
3,060,944
------------
OIL & GAS SERVICES -- 2.6%
BJ Services, Co.*................... 23,200 1,418,100
CAL Dive International, Inc.*....... 23,900 1,366,779
Global Industries, Ltd.*............ 47,700 596,250
Maverick Tube Corp.*................ 4,900 131,994
Pride International, Inc.*.......... 54,300 1,438,950
Seitel, Inc.*....................... 10,200 146,625
Smith International, Inc.*.......... 11,500 937,969
Varco International, Inc.*.......... 46,966 977,480
------------
7,014,147
------------
OPTICAL RECOGNITION SOFTWARE -- 0.2%
Optimal Robotics Corp. Cl. A*....... 10,400 418,600
------------
OTHER COMMERCIAL SERVICES -- 0.7%
Korn-Ferry International*........... 24,500 926,406
NOVA Corp.*......................... 20,700 354,488
On Assignment, Inc.*................ 20,000 627,500
------------
1,908,394
------------
PHOTO EQUIPMENT & SUPPLIES -- 0.2%
Concord Camera Corp.*............... 21,400 548,375
------------
PUBLISHING -- 0.2%
Information Holdings, Inc.*......... 4,800 170,100
Playboy Enterprises Cl. B*.......... 15,500 231,531
------------
401,631
------------
RECREATIONAL PRODUCTS -- 0.2%
Monaco Coach Corp.*................. 9,500 156,750
Winnebago Industries, Inc........... 20,400 255,000
------------
411,750
------------
RENTAL AUTO/EQUIPMENT -- 0.2%
Rent-A-Center, Inc.*................ 17,200 596,625
------------
RETAIL-APPAREL -- 3.1%
Abercrombie & Fitch Co. Cl. A*...... 83,800 1,597,438
American Eagle Outfitters, Inc.*.... 43,000 1,354,500
AnnTaylor Stores Corp.*............. 62,000 2,383,123
Children's Place Retail
Stores, Inc.*..................... 17,300 445,475
Genesco, Inc.*...................... 8,200 138,888
Kenneth Cole Productions, Inc. Cl.
A*................................ 17,150 605,609
<CAPTION>
NUMBER
OF SHARES VALUE
-----------------------------------------------------------------
<S> <C> <C>
Retail-Apparel (Continued)
The Men's Wearhouse, Inc.*.......... 39,200 $ 1,109,850
Too, Inc.*.......................... 20,100 477,375
------------
8,112,258
------------
RETAIL-COMPUTER EQUIPMENT -- 0.8%
CDW Computer Centers, Inc.*......... 14,200 979,800
Insight Enterprises, Inc.*.......... 46,350 1,263,037
------------
2,242,837
------------
RETAIL-DISCOUNT -- 0.1%
Factory 2-U Stores, Inc.*........... 12,400 378,975
------------
RETAIL-ELECTRONICS -- 0.1%
InterTAN, Inc.*..................... 15,900 229,556
------------
RETAIL-RESTAURANTS -- 0.2%
Jack in the Box, Inc.*.............. 20,900 448,044
Sonic Corp.*........................ 12,900 107,231
------------
555,275
------------
RETAIL-SUNGLASSES -- 0.1%
Sunglass Hut
International, Inc.*.............. 25,100 163,933
------------
SUPERCONDUCTOR PRODUCTS & SYSTEMS -- 0.3%
American Superconductor Corp.*...... 15,600 766,837
------------
TELECOMMUNICATIONS -- 2.5%
Airspan Networks, Inc.*............. 4,800 55,200
Alamosa PCS Holdings, Inc.*......... 16,800 271,950
C-COR.net Corp.*.................... 16,300 249,594
Focal Communications Corp.*......... 23,500 362,781
International FiberCom, Inc.*....... 40,600 593,775
Liberty Satellite &
Technology, Inc. Cl. A*........... 12,900 137,063
MasTec, Inc.*....................... 24,550 767,188
Motient Corp.*...................... 21,500 303,688
MRV Communications, Inc.*........... 25,600 1,160,000
OmniSky Corp.*...................... 10,800 219,375
Powertel, Inc.*..................... 17,400 1,323,488
Startek, Inc.*...................... 6,800 197,200
ViaSat, Inc.*....................... 10,200 228,225
Viatel, Inc.*....................... 31,600 323,900
Western Wireless Corp Cl. A*........ 11,500 409,688
------------
6,603,115
------------
TELECOMMUNICATIONS EQUIPMENT -- 10.1%
Advanced Fibre
Communications, Inc.*............. 9,200 348,450
Airnet Communications Corp.*........ 15,600 348,075
American Tower Systems Cl. A*....... 28,700 1,081,630
Anaren Microwave, Inc.*............. 19,650 2,665,028
Antec Corp.*........................ 9,100 268,450
Audiocodes, Ltd.*................... 21,400 1,821,674
Aware, Inc.*........................ 19,100 735,350
BreezeCom, Ltd.*.................... 17,400 573,113
Commscope, Inc.*.................... 20,600 504,700
Corsair Communications, Inc.*....... 23,800 185,938
Digital Lightwave, Inc.*............ 24,800 1,801,100
Ditech Communications Corp.*........ 25,300 1,037,300
DMC Stratex Networks, Inc.*......... 31,300 502,756
DSP Group, Inc.*.................... 34,200 1,278,225
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
62
<PAGE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
-----------------------------------------------------------------
<S> <C> <C>
TELECOMMUNICATIONS EQUIPMENT (Continued)
Glenayre Technologies, Inc.*........ 38,200 $ 415,425
Integrated Telecom
Express, Inc.*.................... 3,500 72,625
Natural Microsystems Corp.*......... 23,300 1,253,467
NEON Communications, Inc.*.......... 6,000 209,250
Netro Corp.*........................ 18,200 1,078,350
Osicom Technologies, Inc.*.......... 6,900 170,775
Peco II, Inc.*...................... 3,500 163,844
Pinnacle Holdings, Inc.*............ 29,900 796,088
Powerwave Technologies, Inc.*....... 33,500 1,271,953
Sierra Wireless, Inc.*.............. 12,000 738,000
Tollgrade Communications, Inc.*..... 15,100 2,096,069
Triton Network Systems, Inc.*....... 4,400 57,750
TUT Systems, Inc.*.................. 36,100 3,115,879
Vyyo, Inc.*......................... 18,300 549,000
Westell Technologies, Inc. Cl. A*... 21,400 275,525
WJ Communications, Inc.*............ 36,500 1,350,499
------------
26,766,288
------------
TELECOMMUNICATIONS SERVICES -- 0.3%
iBasis, Inc.*....................... 22,100 350,838
INET Technologies, Inc.*............ 16,400 479,700
Z-Tel Technologies, Inc.*........... 6,300 45,675
------------
876,213
------------
THERAPEUTICS -- 1.3%
Cell Therapeutics, Inc.*............ 50,300 3,354,379
------------
TOYS/GAMES/HOBBIES -- 0.2%
WMS Industries, Inc.*............... 24,600 553,500
------------
TRANSPORTATION-AIR FREIGHT -- 0.7%
Atlas Air Inc.*..................... 17,000 718,250
Expeditors International, Inc....... 26,000 1,171,624
------------
1,889,874
------------
<CAPTION>
NUMBER
OF SHARES VALUE
-----------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (Continued)
-----------------------------------------------------------------
TRANSPORTATION-MARINE -- 0.1%
Knightsbridge Tankers, Ltd.......... 7,100 $ 155,313
------------
TRANSPORTATION-TRUCKS -- 0.3%
American Freightways Corp.*......... 18,600 295,275
Forward Air Corp.*.................. 12,850 452,159
Swift Transportation Co., Inc.*..... 7,800 101,888
------------
849,322
------------
VENTURE CAPITAL -- 0.1%
Acacia Research Corp.*.............. 7,200 251,100
------------
TOTAL COMMON STOCK -- 94.9%
(Cost: $180,533,366).............................
250,751,098
------------
<CAPTION>
PRINCIPAL
AMOUNT
-----------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 6.5%
-----------------------------------------------------------------
Bank One Grand Cayman
6.110%, 10/02/00
(Cost: $17,258,790)............... $17,258,790 17,258,790
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 101.4%
(Cost: $197,792,156)............................ 268,009,888
LIABILITIES IN EXCESS OF OTHER ASSETS -- (1.4)%... (3,742,229)
------------
NET ASSETS -- 100.0%.............................. $264,267,659
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
63
<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; MICHAEL P.
GIGGIE, Investment Analyst; JOHN MAZUR, Investment Analyst.
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
of $350 million and less at time of purchase.
MARKET OVERVIEW: Strong gains in June and August weren't enough to leave
small-cap growth stocks in positive territory for the six-month period ended
September 30, 2000.
Concerns over rising interest rates, signs of resurgent inflation and lofty
valuations of technology stocks sent equity prices lower in April and May.
The Federal Reserve raised interest rates by one half of a percentage point in
May -- its sixth increase in a series of actions beginning June 30, 1999 and
totaling 1.75%. As economic data reported a slowdown in GDP growth, investors
grew confident that the rate increase in May was the last in the round of the
Federal Reserve's tightening, sending equities higher in June and August. Stock
prices resumed their downward trend late in the period, however, amid concerns
that rising oil prices and a weakening euro would take their toll on corporate
profitability. Uncertainty surrounding the outcome of upcoming US elections also
weighed on equity prices.
Technology issues bore the brunt of the market's decline, with the tech-laden
Nasdaq Composite tumbling 19.7% during the six-month period.
PERFORMANCE: For the six-month period ended September 30, 2000, the Fund
declined 13.2% compared to its Russell 2000 Growth Index benchmark which fell
11.1%.
PORTFOLIO SPECIFICS: Stock selection within the health care sector was the
primary reason for the Fund's underperformance versus its benchmark this period.
Also detracting from results was stock selection in the producers/manufacturing
sector and an underweighting in financial services -- a sector that performed
relatively well.
Holdings in the technology and commercial/ industrial services sectors
contributed positively to performance. Specific stocks favorably affecting
results included Stanford Microdevices, a designer and supplier of
high-performance radio frequency (RF) components for wireless communications
equipment; Merix, a manufacturer of interconnect solutions for use in electronic
equipment; and the Corporate Executive Board Company, a provider of "best
practices" research to many of world's largest corporations.
MARKET OUTLOOK: We are excited about the prospects for mini-cap growth stock
investing, given attractive valuations and expectations for solid operating
earnings. Moreover, high levels of cash holdings by aggressive growth mutual
funds point toward strong future demand. Looking forward, we are optimistic that
the combination of these factors will benefit the Mini Cap Growth Fund.
--------------------------------------------------------------------------------
64
<PAGE>
MINI CAP GROWTH FUND INSTITUTIONAL SHARES -- UNAUDITED
------------------------------------------------------------------------
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
80.02% As of 9/30/00 31.61%
</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>
7/12/95 $250,000.00 $250,000.00
07/95 $261,400.00 $259,625.00
08/95 $266,200.00 $262,828.77
09/95 $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
01/96 $284,600.00 $269,992.18
02/96 $301,400.00 $282,303.82
03/96 $317,000.00 $287,884.97
04/96 $365,200.00 $309,985.90
05/96 $408,800.00 $325,888.18
06/96 $371,600.00 $304,705.45
07/96 $319,000.00 $267,500.91
08/96 $340,600.00 $287,304.00
09/96 $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
01/97 $384,748.90 $310,240.24
02/97 $358,919.90 $291,501.73
03/97 $329,371.51 $270,930.45
04/97 $319,659.80 $267,787.66
05/97 $374,830.57 $308,036.14
06/97 $408,924.86 $318,478.57
07/97 $444,878.84 $334,784.67
08/97 $477,320.07 $344,828.21
09/97 $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
01/98 $473,447.41 $337,269.47
02/98 $510,088.51 $367,046.99
03/98 $556,278.50 $382,444.62
04/98 $565,605.32 $384,789.00
05/98 $533,405.57 $356,834.08
06/98 $542,066.19 $360,580.92
07/98 $498,760.72 $330,380.77
08/98 $371,076.17 $254,128.89
09/98 $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
01/99 $536,704.36 $361,653.77
02/99 $472,963.31 $328,562.45
03/99 $479,598.07 $340,259.28
04/99 $516,563.13 $370,304.17
05/99 $495,237.13 $370,896.66
06/99 $544,523.89 $390,442.91
07/99 $539,784.78 $378,378.23
08/99 $560,873.82 $364,226.88
09/99 $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
01/00 $1,001,951.33 $490,624.92
02/00 $1,347,950.96 $604,793.33
03/00 $1,207,450.70 $541,229.56
04/00 $988,327.06 $486,581.61
05/00 $853,219.75 $443,957.06
06/00 $1,113,216.18 $501,316.31
07/00 $993,436.17 $458,353.50
08/00 $1,094,482.82 $506,572.29
9/30/00 $1,048,500.91 $481,395.65
</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.
--------------------------------------------------------------------------------
65
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
MINI CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
-----------------------------------------------------------------
COMMON STOCK -- 93.3%
-----------------------------------------------------------------
ADVERTISING -- 0.0%
Interep National Radio
Sales, Inc. -- Cl. A*............... 12,000 $ 37,500
-----------
AEROSPACE/DEFENSE -- 1.5%
OYO Geospace Corp.*................... 21,600 540,000
Photon Dynamics, Inc.*................ 20,900 788,975
-----------
1,328,975
-----------
APPAREL -- 1.1%
Cutter & Buck, Inc.*.................. 29,700 369,394
Gildan Activewear, Inc. Cl. A*........ 18,500 617,437
-----------
986,831
-----------
BIOTECHNOLOGY -- 8.3%
Applied Molecular Evolution*.......... 14,500 581,812
ArQule, Inc.*......................... 31,700 540,881
Charles River Laboratories
International, Inc.*................ 46,100 1,567,400
Ciphergen Biosystems, Inc.*........... 4,700 150,400
Digene Corp.*......................... 38,900 1,400,400
Eden Bioscience Corp.*................ 7,200 237,600
Read-Rite Corp.*...................... 54,300 610,875
Transgenomic, Inc.*................... 13,100 297,206
Trimeris, Inc.*....................... 12,100 846,244
Universal Electronics, Inc.*.......... 47,800 1,156,162
Variagenics, Inc.*.................... 11,400 255,075
-----------
7,644,055
-----------
BROADCASTING -- 0.3%
Regent Communications, Inc.*.......... 42,200 234,737
-----------
COMMUNICATIONS SOFTWARE -- 0.6%
SeaChange International, Inc.*........ 16,300 544,012
-----------
COMPUTER SERVICES -- 3.2%
Diversinet Corp.*..................... 19,000 111,625
Manhattan Associates, Inc.*........... 31,000 1,898,750
MCSi, Inc.*........................... 17,900 601,887
Pilot Network Services, Inc.*......... 31,900 330,962
-----------
2,943,224
-----------
COMPUTER SOFTWARE -- 1.1%
Clickaction, Inc.*.................... 20,600 187,975
Level 8 Systems, Inc.*................ 3,000 55,125
Pivotal Corp.*........................ 14,400 756,000
Scientific Learning Corp.*............ 11,100 60,356
-----------
1,059,456
-----------
COMPUTERS -- 1.1%
Blue Wave Systems, Inc.*.............. 52,900 266,150
Immersion Corp.*...................... 25,400 393,700
Planar Systems, Inc.*................. 7,100 132,238
SmartDisk Corp.*...................... 13,600 195,500
-----------
987,588
-----------
DATA PROCESSING/MANAGEMENT SOFTWARE -- 1.5%
InterCept Group, Inc.*................ 26,800 624,775
<CAPTION>
NUMBER
OF SHARES VALUE
-----------------------------------------------------------------
<S> <C> <C>
DATA PROCESSING MANAGEMENT SOFTWARE (Continued)
Novadigm, Inc.*....................... 24,100 $ 373,174
Precise Software Solutions, Ltd.*..... 8,400 362,250
-----------
1,360,199
-----------
DISTRIBUTION/WHOLESALE -- 1.7%
Scansource, Inc.*..................... 17,900 955,412
SCP Pool Corp.*....................... 19,350 573,244
-----------
1,528,656
-----------
DRILLING -- 3.4%
Patterson Energy, Inc.*............... 36,600 1,258,125
Unit Corp.*........................... 55,300 815,675
UTI Energy Corp.*..................... 23,700 1,057,612
-----------
3,131,412
-----------
DRUGS/PHARMACEUTICALS -- 7.3%
Aradigm Corp.*........................ 27,600 633,075
Biocryst Pharmaceuticals, Inc.*....... 12,000 249,750
First Horizon Pharmaceutical Corp.*... 28,600 518,375
ILEX Oncology, Inc.*.................. 8,100 244,012
Inspire Pharmaceuticals, Inc.*........ 13,700 411,000
Intrabiotics
Pharmaceuticals, Inc.*.............. 6,900 112,125
Matrix Pharmaceutical, Inc.*.......... 31,200 485,550
MGI Pharma, Inc.*..................... 29,800 894,000
OraPharma, Inc.*...................... 13,500 181,406
Pain Therapeutics, Inc.*.............. 21,400 423,987
Praecis Pharmaceuticals, Inc.*........ 32,200 1,368,500
Titan Pharmaceuticals, Inc.*.......... 18,300 1,189,500
-----------
6,711,280
-----------
ELECTRONIC COMPONENTS/SEMICONDUCTORS -- 7.7%
ACT Manufacturing, Inc.*.............. 26,200 1,382,050
inSilicon Corp.*...................... 30,400 440,800
Interlink Electronics, Inc.*.......... 32,150 622,906
Nu Horizons Electronics Corp.*........ 27,600 767,625
O2Micro International, Ltd.*.......... 25,500 438,679
OmniVision Technologies, Inc.*........ 11,500 416,156
Pericom Semiconductor Corp.*.......... 45,400 1,705,338
PSI Technologies Holdings, Inc.*...... 28,300 360,825
Trikon Technologies, Inc.*............ 39,500 557,938
Tvia, Inc.*........................... 22,800 408,975
-----------
7,101,292
-----------
ELECTRONICS -- 5.0%
Engineered Support System, Inc........ 23,100 441,787
Integrated Silicon Solution, Inc.*.... 40,600 576,012
Merix Corp.*.......................... 43,050 2,790,178
Zoran Corp.*.......................... 15,700 765,375
-----------
4,573,352
-----------
FOOD -- 0.5%
Panera Bread Co. Cl. A*............... 22,800 475,950
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
66
<PAGE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
-----------------------------------------------------------------
<S> <C> <C>
HUMAN RESOURCES -- 2.4%
Hall Kinion & Associates, Inc.*....... 33,300 946,969
Heidrick & Struggles
International, Inc.*................ 23,700 1,217,587
-----------
2,164,556
-----------
<CAPTION>
NUMBER
OF SHARES VALUE
-----------------------------------------------------------------
<S> <C> <C>
INSTRUMENTS -- 3.1%
BEI Technologies, Inc................. 31,500 $ 1,315,125
Meade Instruments Corp.*.............. 30,700 619,756
Nanometrics, Inc.*.................... 16,800 897,750
-----------
2,832,631
-----------
INTERNET SOFTWARE -- 5.4%
@Road, Inc.*.......................... 13,800 99,187
C-Bridge Internet Solutions, Inc.*.... 6,000 112,500
Click Commerce, Inc.*................. 22,200 949,050
Click2Learn.Com, Inc.*................ 47,000 690,312
Commtouch Software, Ltd.*............. 17,000 321,937
Hotjobs.Com, Ltd.*.................... 29,400 501,637
iAsiaWorks, Inc.*..................... 34,700 347,000
Internet Pictures Corp.*.............. 12,867 69,964
Mainspring, Inc.*..................... 10,200 75,862
Navidec, Inc.*........................ 37,500 290,625
Netopia, Inc.*........................ 20,800 228,800
Skillsoft Corp.*...................... 9,300 170,888
Support.Com, Inc.*.................... 23,900 731,938
Watchguard Technologies, Inc.*........ 6,600 396,000
-----------
4,985,700
-----------
LASER SYSTEMS -- 1.0%
II-VI, Inc.*.......................... 47,800 892,517
-----------
MACHINERY-DIVERSIFIED -- 0.8%
Applied Science &
Technology, Inc.*................... 6,800 100,300
Brooks Automation, Inc.*.............. 6,400 212,000
Semitool, Inc.*....................... 32,300 413,844
-----------
726,144
-----------
MEDICAL INSTRUMENTS -- 0.6%
Curon Medical, Inc.*.................. 12,100 139,150
Vascular Solutions, Inc.*............. 20,700 388,448
-----------
527,598
-----------
MEDICAL PRODUCTS -- 1.6%
American Medical Systems
Holdings, Inc.*..................... 13,700 214,063
BioSource International, Inc.*........ 13,800 427,800
InnerDyne, Inc.*...................... 57,400 401,800
Physiometrix, Inc.*................... 18,500 409,313
-----------
1,452,976
-----------
MEDICAL SUPPLIES/EQUIPMENT -- 1.0%
Genomic Solutions, Inc.*.............. 31,200 536,250
Rosetta Inpharmatics, Inc.*........... 12,400 345,843
-----------
882,093
-----------
MISCELLANEOUS MANUFACTURING -- 1.0%
Applied Films Corp.*.................. 28,400 770,350
Simpson Manufacturing Co., Inc.*...... 3,100 138,531
-----------
908,881
-----------
NETWORK SOFTWARE -- 0.2%
Talarian Corp.*....................... 7,500 143,906
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
67
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- CONTINUED
--------------------------------------------------------------------------------
MINI CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
-----------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (Continued)
-----------------------------------------------------------------
NETWORKING PRODUCTS -- 1.2%
Optibase, Ltd.*....................... 37,900 $ 665,619
Tricord Systems, Inc.*................ 31,100 464,556
-----------
1,130,175
-----------
OIL & GAS PRODUCERS -- 4.5%
Basin Exploration, Inc.*.............. 39,000 760,500
BayCorp Holdings, Ltd.*............... 24,300 209,588
Comstock Resources, Inc.*............. 51,200 582,400
Evergreen Resources, Inc.*............ 24,000 834,000
OSCA, Inc. Cl A*...................... 13,500 224,438
Swift Energy Co.*..................... 35,600 1,479,625
-----------
4,090,551
-----------
OIL FIELD SERVICES -- 1.1%
Maverick Tube Corp.*.................. 36,100 972,444
-----------
OPTICAL RECOGNITION SOFTWARE -- 1.7%
Digimarc Corp.*....................... 8,600 160,175
Optimal Robotics Corp.*............... 35,000 1,408,750
-----------
1,568,925
-----------
OPTICAL SUPPLIES -- 0.3%
Precision Optics Corp., Inc........... 30,700 241,763
-----------
OTHER COMMERCIAL SERVICES -- 1.3%
Corporate Executive Board Co.*........ 30,000 1,207,500
-----------
OTHER-NON-FERROUS -- 0.3%
Engineered Materials, Inc............. 14,000 302,750
-----------
<CAPTION>
NUMBER
OF SHARES VALUE
-----------------------------------------------------------------
<S> <C> <C>
PHOTO EQUIPMENTS & SUPPLIES -- 1.8%
Concord Camera Corp.*................. 63,100 1,616,938
-----------
PRINTING-COMMERCIAL -- 0.5%
Creo Products Inc.*................... 9,400 319,600
T/R Systems, Inc.*.................... 16,300 144,663
-----------
464,263
-----------
RECREATIONAL PRODUCTS -- 0.6%
Monaco Coach Corp.*................... 34,025 561,413
-----------
RETAIL -- APPAREL -- 0.9%
Gadzooks, Inc.*....................... 13,900 248,463
Genesco, Inc.*........................ 32,200 545,388
-----------
793,851
-----------
RETAIL -- AUTOMOBILE -- 0.6%
Lithia Motors, Inc. Cl. A*............ 10,700 129,738
Sonic Automotive, Inc.*............... 48,000 399,000
-----------
528,738
-----------
RETAIL -- CATALOG SHOPPING -- 0.9%
Coldwater Creek, Inc.*................ 29,800 804,600
-----------
RETAIL -- CONSUMER ELECTRONICS -- 1.8%
Tweeter Home Entertainment
Group, Inc.*........................ 45,400 1,648,588
-----------
RETAIL -- DISCOUNT -- 1.0%
Factory 2-U Stores, Inc.*............. 30,500 932,156
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
68
<PAGE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
-----------------------------------------------------------------
<S> <C> <C>
RETAIL -- RESTAURANTS -- 0.7%
California Pizza Kitchen, Inc.*....... 23,500 $ 658,000
-----------
SUPERCONDUCTORS -- 0.2%
Superconductors
Technologies, Inc.*................. 11,600 209,525
-----------
TELECOMMUNICATIONS -- 2.2%
Globecomm Systems, Inc.*.............. 27,200 350,200
RMH Teleservices, Inc.*............... 30,300 486,694
SpectraLink Corp.*.................... 31,000 292,563
ViaSat, Inc.*......................... 42,000 939,750
-----------
2,069,207
-----------
TELECOMMUNICATIONS EQUIPMENT -- 5.1%
AirGate PCS, Inc.*.................... 14,200 637,225
Corsair Communications, Inc.*......... 39,000 304,688
Interspeed, Inc.*..................... 36,400 250,250
MCK Communications, Inc.*............. 9,800 221,725
Neon Communications, Inc.*............ 18,700 652,163
Peco II, Inc.*........................ 19,800 926,888
Radyne ComStream, Inc.*............... 39,900 311,719
Stanford Microdevices, Inc.*.......... 25,900 1,385,650
-----------
4,690,308
-----------
THERAPEUTICS -- 1.7%
Dyax Corp.*........................... 14,000 612,500
NeoRx Corp.*.......................... 39,600 970,200
-----------
1,582,700
-----------
<CAPTION>
NUMBER
OF SHARES VALUE
-----------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (Continued)
-----------------------------------------------------------------
TRANSPORTATION -- TRUCKS -- 2.2%
Arkansas Best Corp.*.................. 50,000 $ 768,750
Forward Air Corp.*.................... 36,200 1,273,788
-----------
2,042,538
-----------
WASTE DISPOSAL -- 1.3%
Waste Connections, Inc.*.............. 47,500 1,217,188
-----------
TOTAL COMMON STOCK
(Cost: $68,186,976)............................... 85,499,642
-----------
<CAPTION>
PRINCIPAL
AMOUNT
-----------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 6.9%
-----------------------------------------------------------------
Morgan Guaranty London
6.110%, 10/02/00
(Cost: $6,325,652).................. $6,325,652 6,325,652
-----------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 100.2%
(Cost: $74,512,628)............................. 91,825,294
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.2%)... (215,650)
-----------
NET ASSETS -- 100.0%.............................. $91,609,644
-----------
-----------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
69
<PAGE>
VALUE FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: MARK STUCKELMAN, Partner, Portfolio Manager; KELLY KO, CFA,
Portfolio Manager; JOHN J. KANE, Partner, Portfolio Manager; LARRY SPEIDELL,
CFA, Partner, Director of Quantitative Research and Portfolio Management; 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: The US stock market was turbulent during the six months ended
September 30, 2000.
In April and May, worries over rising interest rates, high valuations of
technology stocks and signs of resurgent inflation sent equity prices lower.
Stocks rallied in June and August, reflecting sentiment that the Federal
Reserve's May interest rate increase was the last in its series of tightening
moves. Despite August's rally, equities drifted lower during the last three
months of the period due to the uncertain impact of rising oil prices and a
weakening euro on corporate earnings. In addition, investors grew increasingly
anxious about the outcome of upcoming US elections.
Amid this volatile backdrop, there was a rotation from growth stocks to value
stocks. Indicative of this shift in investor preference, large-cap value stocks
posted gains during the period, driven by:
- Increasing investor attention in response to the major sell-off within the
high-growth technology sector
- Expectations that the Federal Reserve was done raising interest rates
- Consolidation within value-oriented industries like financial services,
brokerage and insurance
- The positive impact of rising oil prices on the energy sector, particularly
oilfield service companies
PERFORMANCE: For the six-month period ended September 30, 2000, the Fund
gained 5.8% versus a 2.8% increase in the Russell 1000 Value Index and a 3.7%
decline in the S&P 500 Index.
PORTFOLIO SPECIFICS: Stock selection was the main driver of the Fund's
outperformance during the period. Among the Fund's best-performing holdings were
Boeing, which benefited from an increase in the rate of 737 passenger jet
production and the announcement of a new CFO; Citigroup, which demonstrated
strength in its global consumer, corporate and investment banking businesses;
Peco Energy, which profited from stronger volumes and higher electricity
pricing; and Unicom, which showed improvement in nuclear capacity and operating
expense levels.
MARKET OUTLOOK: While we are closely monitoring the impact of rising oil
prices and a weakening euro on large-cap value stocks, we remain positive on our
outlook for this market segment due to:
- Attractive valuations
- The consensus view that the Federal Reserve has engineered a soft landing
for the US economy, which should benefit value companies in the
producers/manufacturing and financial services sectors
- The likelihood that oil prices will stabilize or decline, a favorable
development for transportation and basic materials companies
--------------------------------------------------------------------------------
69
<PAGE>
VALUE FUND INSTITUTIONAL SHARES -- UNAUDITED
------------------------------------------------------------------------
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
11.86% As of 9/30/00 22.66%
</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
05/96 $256,600.00 $256,450.00
06/96 $263,800.00 $257,424.51
07/96 $257,600.00 $246,046.35
08/96 $264,800.00 $251,235.46
09/96 $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
01/97 $327,247.49 $305,459.36
02/97 $331,246.01 $307,854.16
03/97 $316,935.51 $295,204.43
04/97 $333,350.49 $312,828.13
05/97 $358,183.42 $331,873.11
06/97 $369,758.09 $346,741.03
07/97 $412,900.04 $374,331.21
08/97 $403,429.86 $353,361.17
09/97 $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
01/98 $434,531.14 $387,655.49
02/98 $469,923.85 $415,613.20
03/98 $500,064.74 $436,896.75
04/98 $502,804.82 $441,291.93
05/98 $500,749.76 $433,706.13
06/98 $511,938.43 $451,323.27
07/98 $501,864.37 $446,516.68
08/98 $424,288.37 $381,959.30
09/98 $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
01/99 $530,983.34 $513,617.55
02/99 $512,742.51 $497,654.32
03/99 $522,237.74 $517,565.47
04/99 $563,217.16 $537,595.25
05/99 $554,471.55 $524,902.63
06/99 $570,213.64 $554,034.73
07/99 $558,969.29 $536,748.84
08/99 $538,979.33 $534,065.10
09/99 $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
01/00 $535,602.40 $566,743.62
02/00 $492,372.17 $556,015.17
03/00 $546,661.29 $610,393.45
04/00 $546,661.29 $592,026.71
05/00 $545,655.94 $579,878.32
06/00 $521,276.10 $594,172.32
07/00 $539,623.81 $584,903.23
08/00 $569,784.44 $621,231.57
9/30/00 $578,329.95 $588,436.76
</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.
--------------------------------------------------------------------------------
70
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
VALUE FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
-----------------------------------------------------------------
COMMON STOCK -- 97.0%
-----------------------------------------------------------------
AEROSPACE/DEFENSE -- 2.7%
Boeing Co............................. 9,700 $ 611,100
United Technologies Corp.............. 8,700 602,475
-----------
1,213,575
-----------
AIRLINES -- 1.6%
Delta Air Lines, Inc.................. 16,500 732,187
-----------
AUTO MANUFACTURER -- 1.9%
Ford Motor Co......................... 33,040 836,325
-----------
AUTOMOTIVE & TRANSPORT EQUIPMENT -- 0.7%
TRW, Inc.............................. 7,900 320,938
-----------
BEVERAGES-NON-ALCOHOLIC -- 1.9%
PepsiCo, Inc.......................... 18,200 837,200
-----------
BROADCASTING -- 2.0%
AT&T Corp. -- Liberty Media Corp.
Cl. A*.............................. 20,200 363,600
Cablevision Systems Corp. Cl. A*...... 7,800 517,237
-----------
880,837
-----------
CHEMICALS -- 1.2%
Dow Chemical Co....................... 21,900 546,131
-----------
COMMERCIAL SERVICES -- 0.8%
Cendant Corp.*........................ 34,300 373,012
-----------
COMPUTER SERVICES -- 0.5%
Arrow Electronics, Inc.*.............. 6,100 207,781
-----------
COMPUTER SOFTWARE -- 0.5%
Microsoft Corp.*...................... 3,500 210,875
-----------
COMPUTERS -- 2.5%
Hewlett-Packard Co.................... 5,500 533,500
International Business Machines
Corp................................ 5,000 562,500
-----------
1,096,000
-----------
COSMETICS & TOILETRIES -- 2.8%
Kimberly-Clark Corp................... 11,200 625,100
Procter & Gamble Co................... 9,100 609,700
-----------
1,234,800
-----------
DIVERSIFIED FINANCIAL SERVICES -- 13.6%
A.G. Edwards, Inc..................... 4,400 230,175
Ambac Financial Group, Inc............ 8,700 637,275
Citigroup, Inc........................ 40,933 2,212,940
Fannie Mae............................ 12,200 872,300
Freddie Mac........................... 9,800 529,812
J.P. Morgan & Co., Inc................ 6,900 1,127,288
Merrill Lynch & Co, Inc............... 3,300 217,800
Morgan Stanley Dean Witter & Co....... 2,400 219,450
-----------
6,047,040
-----------
DIVERSIFIED MANUFACTURING -- 6.2%
Clorox Company........................ 12,200 482,662
Dover Corp............................ 15,800 741,612
General Electric Co................... 13,900 801,856
<CAPTION>
NUMBER
OF SHARES VALUE
-----------------------------------------------------------------
<S> <C> <C>
Diversified Manufacturing (Continued)
Honeywell International, Inc.......... 12,500 $ 445,312
Textron, Inc.......................... 6,500 299,813
-----------
2,771,255
-----------
DRUGS/PHARMACEUTICALS -- 5.0%
Abbott Laboratories................... 13,200 627,825
ICN Pharmaceuticals, Inc.............. 7,900 262,675
Johnson & Johnson..................... 6,800 638,775
King Pharmaceuticals, Inc.*........... 6,800 227,375
Merck & Co., Inc...................... 6,500 483,844
-----------
2,240,494
-----------
ELECTRIC -- 5.0%
Allegheny Energy, Inc................. 11,900 454,431
Energy East Corp...................... 20,200 457,025
PECO Energy Co........................ 13,400 811,537
Unicom Corp........................... 9,000 505,688
-----------
2,228,681
-----------
ELECTRONIC COMPONENTS -- 1.0%
Intel Corp............................ 5,000 207,812
Vishay Intertechnology, Inc.*......... 7,200 221,400
-----------
429,212
-----------
FOOD -- 0.5%
General Mills, Inc.................... 6,700 237,850
-----------
HEALTH CARE -- 1.4%
HEALTHSOUTH Corp.*.................... 74,100 602,062
-----------
HEALTH PRODUCTS & SERVICES -- 2.3%
Baxter International, Inc............. 5,600 446,950
Tenet Healthcare Corp.*............... 16,500 600,188
-----------
1,047,138
-----------
INSTRUMENTS-CONTROLS -- 1.1%
Johnson Controls, Inc................. 8,800 468,050
-----------
INSURANCE -- 6.5%
Allstate Corp......................... 18,400 639,400
American International Group, Inc..... 11,062 1,058,495
Jefferson-Pilot Corp.................. 8,100 549,788
Lincoln National Corp................. 13,100 630,438
-----------
2,878,121
-----------
MEDIA -- 2.0%
Walt Disney Co........................ 23,400 895,050
-----------
METALS -- 1.0%
Alcoa, Inc............................ 18,076 457,549
-----------
OIL & GAS PRODUCERS -- 8.9%
Conoco, Inc. Cl. B.................... 29,200 786,575
Exxon Mobil Corp...................... 26,505 2,362,258
USX-Marathon Group.................... 29,100 825,713
-----------
3,974,546
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
71
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- CONTINUED
--------------------------------------------------------------------------------
VALUE FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
-----------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (Continued)
-----------------------------------------------------------------
REGIONAL/COMMERCIAL BANKS -- 9.3%
Comerica, Inc......................... 10,600 $ 619,437
FleetBoston Financial Corp............ 31,800 1,240,200
M & T Bank Corp....................... 900 459,000
Mellon Financial Corp................. 12,300 570,413
U.S. Bancorp.......................... 21,700 493,675
Union Planters Corp................... 6,800 224,825
Washington Mutual, Inc................ 13,500 537,469
-----------
4,145,019
-----------
RETAIL -- DEPARTMENT STORES -- 2.8%
Federated Department Stores, Inc.*.... 20,200 527,725
Sears, Roebuck &Co.................... 22,300 722,966
-----------
1,250,691
-----------
TELECOMMUNICATIONS -- 9.3%
AT&T Corp............................. 14,900 437,688
BellSouth Corp........................ 18,300 736,575
SBC Communications, Inc............... 23,300 1,165,000
Sprint Corp........................... 7,900 231,569
Verizon Communications................ 17,938 868,872
WorldCom, Inc.*....................... 24,200 735,075
-----------
4,174,779
-----------
<CAPTION>
NUMBER
OF SHARES VALUE
-----------------------------------------------------------------
<S> <C> <C>
TOBACCO -- 1.0%
Philip Morris Co., Inc................ 15,600 $ 459,225
-----------
TRANSPORTATION -- TRAINS -- 1.0%
Union Pacific Corp.................... 11,100 431,513
-----------
TOTAL COMMON STOCK
(Cost: $41,349,410)...............................
43,227,936
-----------
<CAPTION>
PRINCIPAL
AMOUNT
-----------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 4.5%
-----------------------------------------------------------------
Brown Brothers Harriman & Co.
6.110%, 10/2/00
(Cost: $2,018,951).................. $2,018,951 2,018,951
-----------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 101.5%
(Cost: $43,368,361)............................. 45,246,887
LIABILITES IN EXCESS OF OTHER ASSETS -- (1.5)%.... (680,731)
-----------
NET ASSETS -- 100.0%.............................. $44,566,156
-----------
-----------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
72
<PAGE>
CONVERTIBLE FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: DOUGLAS G. FORSYTH, CFA, Partner, Portfolio Manager; WILLIAM
STICKNEY, Portfolio Manager; MICHAEL E. YEE, Portfolio Manager; JUSTIN KASS,
Investment Analyst.
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: During the six-month period ended September 30, 2000, the
First Boston Convertible Index slipped a modest 1.3%, outperforming the S&P 500,
which fell 3.7% and the tech-heavy Nasdaq Composite which tumbled 19.7%.
In April and May, worries over rising interest rates, high valuations of
technology stocks and signs of resurgent inflation sent US equities --
particularly technology issues -- lower. Convertible securities also registered
losses, especially large-cap, growth-oriented names. In response to a growing
belief among investors that the Federal Reserve's May interest rate increase was
the last in its series of tightening moves, convertibles posted gains in June.
The second half of the period witnessed a continuation of June's rally. From
July 1, 2000 through September 30, 2000, the First Boston Convertible Index
climbed 3.0%, outpacing many major US stock market indices.
Throughout the six-month period, issues within the traditionally defensive
utility, financial services and energy sectors were the market's strongest
performers. Credit quality was also a deciding factor with respect to
performance, as investment-grade issues outperformed speculative-grade
securities.
PERFORMANCE: The Fund dipped 0.4% during the six-month period ended
September 30, 2000 versus a 1.3% loss for the First Boston Convertible Index.
PORTFOLIO SPECIFICS: Top-performing holdings during the period included
software companies BEA Systems and Rational Software, Calpine in the utilities
sector and Alpharma, a specialty pharmaceutical firm.
On a bottom-up basis, we continue to find many attractive convertible
securities poised to benefit from positive change. For example, due to higher
oil and gas prices, on an issue-specific basis we've identified several exciting
investment opportunities within the energy sector. Similarly, we've uncovered a
number of dynamic enterprise software companies thriving amid strong demand for
software applications.
MARKET OUTLOOK: We remain optimistic in our outlook for convertible
securities. In an environment of persistent US stock market volatility,
convertibles should benefit from greater recognition among investors seeking
equity market participation with limited downside risk.
--------------------------------------------------------------------------------
73
<PAGE>
CONVERTIBLE FUND INSTITUTIONAL SHARES -- UNAUDITED
------------------------------------------------------------------------
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 9/30/00
1 YEAR 5 YEARS 10 YEARS
51.88% 25.53% 18.40%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CONVERTIBLE FUND FIRST BOSTON
INSTITUTIONAL SHARES CONVERTIBLE INDEX
<S> <C> <C>
12/31/86 $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
04/90 $378,508.86 $310,794.18
05/90 $413,735.41 $325,867.70
06/90 $412,935.53 $325,476.66
07/90 $407,388.42 $322,579.92
08/90 $386,679.51 $303,999.31
09/90 $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
01/91 $399,057.14 $313,115.55
02/91 $421,630.48 $331,808.55
03/91 $436,752.96 $339,937.85
04/91 $438,878.49 $343,371.23
05/91 $463,133.84 $353,535.02
06/91 $444,500.42 $343,671.39
07/91 $466,710.62 $356,730.90
08/91 $486,250.24 $370,036.96
09/91 $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
01/92 $535,844.65 $398,086.19
02/92 $541,828.24 $408,237.39
03/92 $528,860.49 $405,298.08
04/92 $515,885.78 $410,202.19
05/92 $525,154.53 $417,339.71
06/92 $509,644.96 $415,378.21
07/92 $514,418.64 $425,721.13
08/92 $515,636.09 $423,039.08
09/92 $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
01/93 $590,399.58 $469,108.90
02/93 $569,125.52 $470,703.87
03/93 $600,579.19 $488,214.05
04/93 $607,790.25 $488,067.59
05/93 $632,101.86 $496,608.77
06/93 $652,313.87 $501,326.55
07/93 $658,540.06 $506,490.22
08/93 $696,855.12 $520,368.05
09/93 $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
01/94 $758,079.88 $554,765.15
02/94 $749,597.86 $545,944.38
03/94 $716,093.91 $523,669.85
04/94 $710,211.14 $514,139.06
05/94 $703,258.77 $515,270.16
06/94 $683,417.78 $509,447.61
07/94 $692,602.05 $523,814.03
08/94 $706,108.34 $534,133.17
09/94 $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
01/95 $672,826.60 $513,189.46
02/95 $681,610.24 $529,970.75
03/95 $701,636.93 $543,961.98
04/95 $709,919.33 $556,309.92
05/95 $723,526.11 $572,721.06
06/95 $751,212.97 $593,568.11
07/95 $786,500.84 $614,639.77
08/95 $799,060.93 $621,093.49
09/95 $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
01/96 $851,451.87 $649,785.96
02/96 $875,221.82 $667,265.21
03/96 $888,874.31 $672,870.23
04/96 $912,864.69 $688,548.11
05/96 $941,161.03 $703,902.73
06/96 $920,307.86 $687,220.24
07/96 $870,662.12 $660,418.65
08/96 $924,031.29 $684,986.22
09/96 $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
01/97 $1,040,721.64 $746,759.96
02/97 $1,026,594.19 $742,876.80
03/97 $1,016,637.71 $727,499.25
04/97 $1,028,182.69 $734,847.00
05/97 $1,081,153.80 $768,870.41
06/97 $1,124,209.80 $791,244.54
07/97 $1,193,276.21 $834,604.74
08/97 $1,178,232.04 $835,188.97
09/97 $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
01/98 $1,223,825.28 $845,963.11
02/98 $1,281,559.61 $883,777.66
03/98 $1,339,721.60 $915,682.03
04/98 $1,355,533.77 $923,831.60
05/98 $1,324,628.17 $897,225.25
06/98 $1,376,377.08 $901,890.82
07/98 $1,386,306.10 $881,327.71
08/98 $1,185,964.39 $773,188.80
09/98 $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
01/99 $1,591,232.79 $930,917.34
02/99 $1,512,561.76 $898,614.51
03/99 $1,606,750.81 $936,715.77
04/99 $1,657,498.16 $974,652.75
05/99 $1,630,631.92 $965,685.95
06/99 $1,708,640.29 $1,000,307.01
07/99 $1,657,770.09 $994,010.56
08/99 $1,670,487.64 $996,992.59
09/99 $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
01/00 $2,288,827.61 $1,263,489.89
02/00 $2,673,453.62 $1,396,156.32
03/00 $2,557,757.52 $1,366,138.96
04/00 $2,389,873.82 $1,299,471.38
05/00 $2,237,183.22 $1,229,819.71
06/00 $2,405,318.89 $1,309,758.00
07/00 $2,311,396.91 $1,270,203.30
08/00 $2,550,401.61 $1,367,881.94
9/30/00 $2,548,504.53 $1,348,458.02
</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.
--------------------------------------------------------------------------------
74
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
CONVERTIBLE FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCK -- 23.7%
------------------------------------------------------------------
BROADCASTING -- 0.6%
Unitedglobalcom, Inc. C 7.000%........ 4,089 $ 174,036
Unitedglobalcom, Inc. D 7.000%........ 24,361 803,913
------------
977,949
------------
DRUGS/PHARMACEUTICALS -- 2.0%
Biovail Corp. 6.750%.................. 41,454 3,109,050
------------
ELECTRIC -- 2.2%
Calpine Capital Trust 5.500%.......... 32,168 3,389,703
------------
ENERGY -- 1.8%
Southern Energy, Inc. 6.250%.......... 40,764 2,710,806
------------
INSURANCE -- 3.5%
ACE, Ltd. 8.250%...................... 31,851 2,627,708
Metlife Capital Trust 8.000%.......... 31,479 2,675,715
------------
5,303,423
------------
MISCELLANEOUS MANUFACTURING -- 1.1%
Sealed Air Corp. A 2.000%............. 36,206 1,629,270
------------
OIL & GAS PRODUCERS -- 1.5%
Coastal Corp. 6.625%.................. 56,569 2,354,685
------------
OIL & GAS SERVICES -- 0.8%
EVI, Inc. 5.000%...................... 24,273 1,162,070
------------
REAL ESTATE INVESTMENT TRUST -- 2.7%
AES Trust 144A 6.000%................. 28,753 2,336,181
Equity Office Properties Trust B
5.250%.............................. 19,186 882,556
General Growth Properties, Inc.
7.250%.............................. 22,146 491,364
Vornado Realty Trust A 6.500%......... 8,898 465,477
------------
4,175,578
------------
TELECOMMUNICATIONS -- 4.2%
Crown Castle International Corp.
6.250%.............................. 10,740 549,083
Global Crossing, Ltd. 144A 6.375%..... 9,563 828,395
Global Crossing, Ltd. 6.375%.......... 845 73,198
Global Crossing, Ltd. 6.750%.......... 4,980 1,249,357
McLeodUSA, Inc. A 6.750%.............. 3,499 1,447,273
NEXTLINK Communications, Inc.
6.500%.............................. 10,063 1,665,427
Winstar Communications, Inc. A
6.000%.............................. 2,267 59,084
Winstar Communications, Inc. D
7.000%.............................. 17,448 525,621
------------
6,397,438
------------
TELECOMMUNICATIONS SERVICES -- 3.3%
Crown Castle Decs Trust VI
International Corp. 6.250%.......... 31,580 1,421,100
Crown Castle Decs Trust V
International Corp. 7.250%.......... 62,181 1,822,681
Qwest Trends Trust 144A 5.750%........ 22,877 1,827,300
------------
5,071,081
------------
TOTAL CONVERTIBLE PREFERRED STOCK
(Cost: $33,328,999)...............................
36,281,053
------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------------
<S> <C> <C>
CONVERTIBLE CORPORATE BONDS -- 72.6%
------------------------------------------------------------------
ADVERTISING -- 1.7%
Lamar Advertising Co.
5.250%, 09/15/06.................... $ 969,000 $ 971,423
Omnicom Group, Inc.
2.250%, 01/06/13.................... 1,081,000 1,660,686
------------
2,632,109
------------
APPLICATIONS SOFTWARE -- 1.7%
Rational Software Corp.
5.000%, 02/01/07.................... 1,244,000 2,584,410
------------
BIOTECHNOLOGY -- 1.6%
Millennium Pharmaceuticals, Inc.
5.500%, 01/15/07.................... 1,240,000 2,372,275
------------
BROADCASTING -- 2.1%
Clear Channel Communications
1.500%, 12/01/02.................... 1,112,000 1,041,110
Clear Channel Communications
2.625%, 04/01/03.................... 1,089,000 1,195,177
Liberty Media Group
4.000%, 11/15/29.................... 1,042,000 978,178
------------
3,214,465
------------
BUILDING/CONSTRUCTION -- 1.0%
Lennar Corp.
0.000%, 07/29/18.................... 3,204,000 1,549,935
------------
COMPUTER SOFTWARE -- 3.9%
Mercury Interactive Corp. 144A
4.750%, 07/01/07.................... 1,724,000 2,667,890
Siebel Systems, Inc.
5.500%, 09/15/06.................... 668,000 3,228,944
------------
5,896,834
------------
COMPUTERS -- 6.9%
ASM Lithography Holding N.V.
4.250%, 11/30/04.................... 1,550,000 1,734,063
Comverse Technology, Inc.
4.500%, 07/01/05.................... 616,000 3,142,370
Hewlett Packard Co.
0.000%, 10/14/17.................... 2,367,000 1,739,745
Veritas Software Corp.
1.856%, 08/13/06.................... 226,000 928,860
Veritas Software Corp.
5.250%, 11/01/04.................... 195,000 3,010,312
------------
10,555,350
------------
DATA PROCESSING/MANAGEMENT SOFTWARE -- 1.6%
Automatic Data Processing
0.000%, 02/20/12.................... 1,380,000 2,433,975
------------
DIVERSIFIED FINANCIAL SERVICES -- 1.0%
Morgan Stanley Dean Witter & Co.
0.000%, 07/29/05.................... 513,000 1,454,355
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
75
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- CONTINUED
--------------------------------------------------------------------------------
CONVERTIBLE FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------------
<S> <C> <C>
CONVERTIBLE CORPORATE BONDS (Continued)
------------------------------------------------------------------
DRILLING -- 2.8%
Diamond Offshore Drilling
3.750%, 2/15/07..................... $2,198,000 $ 2,491,983
Transocean Sedco Forex, Inc.
0.000%, 05/24/20.................... 2,878,000 1,816,738
------------
4,308,721
------------
DRUGS/PHARMACEUTICALS -- 8.2%
Alpharma, Inc. Cl.A
3.000%, 06/01/06.................... 1,125,000 2,304,844
ALZA Corp.
0.000%, 07/14/14.................... 2,941,000 3,349,063
Elan Finance Corp., Ltd.
0.000%, 12/14/18.................... 2,584,000 2,080,120
Roche Holding AG 144A
0.000%, 01/19/15.................... 2,641,000 2,522,155
Vertex Pharmaceuticals, Inc. 144A
5.000%, 09/19/07.................... 2,107,000 2,328,235
------------
12,584,417
------------
ELECTRONIC COMPONENTS/SEMICONDUCTORS -- 12.0%
Amkor Technology, Inc.
5.000%, 03/15/07.................... 879,000 694,410
Atmel Corp.
0.000%, 04/21/18.................... 1,649,000 1,471,733
Celestica, Inc.
0.000%, 08/01/20.................... 4,208,000 2,104,000
Cirrus Logic, Inc.
6.000%, 12/15/03.................... 1,634,000 2,879,924
Cymer, Inc.
7.250%, 08/06/04.................... 1,375,000 1,328,594
Cypress Semiconductor
4.000%, 02/01/05.................... 1,374,000 1,562,925
International Rectifier Corp. 144A
4.250%, 07/15/07.................... 1,348,000 1,250,270
Oak Industries, Inc.
4.875%, 03/01/08.................... 389,000 2,515,371
Solectron Corp.
0.000%, 05/08/20.................... 4,029,000 2,709,501
STMicroelectronics N.V.
0.000%, 09/22/09.................... 156,000 211,380
TranSwitch Corp. 144A
4.500%, 09/12/05.................... 1,303,000 1,609,205
------------
18,337,313
------------
INSTRUMENTS-SCIENTIFIC -- 0.8%
PerkinElmer, Inc.
0.000%, 08/07/20.................... 1,837,000 1,262,938
------------
INTERNET SOFTWARE -- 7.1%
America Online, Inc.
0.000%, 12/06/19.................... 5,534,000 2,863,845
BEA Systems, Inc.
6.750%, 03/31/25.................... 1,308,000 3,139,200
Exodus Communications, Inc.
4.750%, 07/15/08.................... 1,066,000 1,656,298
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------------
<S> <C> <C>
Internet Software (Continued)
i2 Technologies, Inc.
5.250%, 12/15/06.................... $1,221,000 $ 3,249,385
------------
10,908,728
------------
MEDICAL-HOSPITALS -- 1.8%
Universal Health Services, Inc. 144A
0.426, 06/23/20..................... 4,837,000 2,744,998
------------
MISCELLANEOUS MANUFACTURING -- 1.8%
Sanmina Corp.
4.250%, 05/01/04.................... 1,190,000 2,684,938
------------
NETWORKING PRODUCTS -- 3.6%
Juniper Networks, Inc.
4.750%, 03/15/07.................... 1,942,000 2,993,108
Redback Networks, Inc.
5.000%, 04/01/07.................... 2,174,000 2,434,880
------------
5,427,988
------------
OIL & GAS PRODUCERS -- 3.4%
Anadarko Petroleum Corp.
0.000%, 03/07/20.................... 2,891,000 2,413,985
Devon Energy Corp.
4.900%, 08/15/08.................... 1,082,000 1,046,835
Kerr-McGee Corp. 144A
5.250%, 02/15/10.................... 1,374,000 1,714,065
------------
5,174,885
------------
PRINTING-COMMERCIAL -- 2.0%
News America Holdings
0.000%, 03/11/13.................... 1,882,000 2,131,365
World Color Press, Inc.
6.000%, 10/01/07.................... 912,000 934,800
------------
3,066,165
------------
REAL ESTATE -- 0.9%
EOP Operating LP 144A
7.250%, 11/15/08.................... 1,392,000 1,433,760
------------
RETAIL-DEPARTMENT STORES -- 1.0%
Kohl's Corp. 144A
0.000%, 06/12/20.................... 2,602,000 1,528,675
------------
TELECOMMUNICATIONS -- 3.1%
EchoStar Communications Corp.
4.875%, 01/01/07.................... 1,572,000 2,088,794
Nextel Communications, Inc.
5.250%, 01/15/10.................... 2,834,000 2,671,045
------------
4,759,839
------------
TELECOMMUNICATIONS EQUIPMENT -- 0.6%
Efficient Networks, Inc.
5.000%, 03/15/05.................... 1,346,000 861,440
------------
TELECOMMUNICATIONS SERVICES -- 0.8%
NTL, Inc. 144A
5.750%, 12/15/09.................... 1,777,000 1,239,458
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
76
<PAGE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------------
<S> <C> <C>
CONVERTIBLE CORPORATE BONDS (Continued)
------------------------------------------------------------------
WIRELESS EQUIPMENT -- 1.2%
American Tower Corp. Cl. A
5.000%, 02/15/10.................... $1,935,000 $ 1,840,669
------------
TOTAL CONVERTIBLE CORPORATE BONDS
(Cost: $92,660,223)...............................
110,858,640
------------
<CAPTION>
NUMBER
OF SHARES
------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK -- 2.5%
------------------------------------------------------------------
COMPUTERS -- 1.8%
EMC Corp.*............................ 28,000 2,775,500
------------
NETWORKING PRODUCTS -- 0.0%
Cisco Systems, Inc.*.................. 2 111
------------
OIL & GAS PRODUCERS -- 0.7%
Enron Corp............................ 11,300 990,162
------------
TELECOMMUNICATIONS -- 0.0%
McLeodUSA, Inc.*...................... 885 12,667
Winstar Communications, Inc.*......... 938 14,539
------------
27,206
------------
TOTAL COMMON STOCK
(Cost: $3,811,877)................................
3,792,979
------------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 0.2%
------------------------------------------------------------------
Morgan Guaranty
6.110%, 10/02/00
(Cost: $295,169).................... $ 295,169 $ 295,169
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 99.0%
(Cost: $130,096,268)............................ 151,227,841
OTHER ASSETS IN EXCESS OF LIABILITIES -- 1.0%..... 1,503,038
------------
NET ASSETS -- 100.0%.............................. $152,730,879
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
77
<PAGE>
SHORT INTERMEDIATE FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: CRITERION INVESTMENT MANAGEMENT, SUB ADVISORS: 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.
MARKET OVERVIEW: Bond prices climbed higher during the six-month period ended
September 30, 2000. Following a half a percentage interest-rate increase in May,
the Federal Reserve appeared to have adopted a more neutral monetary policy,
leaving rates unchanged at its final two policy meetings of the period.
May's rate hike was the sixth increase in a round of tightening moves that
began on June 30, 1999. The lagged effect of higher rates became evident during
the period, and bond investors welcomed signs of a slowdown in housing,
manufacturing and consumer spending. Despite higher oil prices, inflation
remained in check, with government reports near the end of the period showing
declines in both wholesale and consumer prices.
PERFORMANCE: During the six-month period ended September 30, 2000, the Short
Intermediate Fund was up 4.0%. The Merrill Lynch 1-3 Year Government Index
posted a 3.9% gain.
PORTFOLIO SPECIFICS: We maintained a slightly longer-than-benchmark
sensitivity to interest rates throughout the period. The Fund's longer duration
positively impacted results.
At the beginning of July, we moved the Fund to an overweight position in
non-Treasury sectors. Our goal was to take advantage of the compelling
valuations of non-Treasury securities and expectations that yield spreads would
tighten as the Treasury yield curve reached maximum inversion. This view proved
correct, and the Fund's non-Treasury holdings favorably affected returns.
MARKET OUTLOOK: The following factors point to a promising outlook for
interest rates and an improvement in the cyclical outlook for bonds:
- Strong evidence that the rate of US GDP growth is slowing to a more moderate
3% to 4% pace.
- Prospects for a slowdown in global economic expansion
- Continued benign inflation amid strong productivity gains and a competitive
pricing environment
This favorable environment sets the stage for falling interest rates and the
likelihood of a less inverted yield curve. As this occurs, yield spreads of
non-Treasury securities should continue to narrow, a positive for the Short
Intermediate Fund.
--------------------------------------------------------------------------------
78
<PAGE>
SHORT INTERMEDIATE FUND INSTITUTIONAL SHARES -- UNAUDITED
------------------------------------------------------------------------
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>
ANNUALIZED TOTAL RETURNS
As of 9/30/00 SINCE
1 YEAR 5 YEARS INCEPTION
6.23% 5.93% 6.30%
</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
09/95 $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
01/96 $264,601.96 $259,695.67
02/96 $263,383.53 $258,604.95
03/96 $263,322.61 $258,372.20
04/96 $263,322.61 $258,578.90
05/96 $263,734.37 $259,121.92
06/96 $265,628.48 $260,987.59
07/96 $266,673.44 $262,005.45
08/96 $267,718.40 $262,896.26
09/96 $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
01/97 $276,598.92 $271,622.84
02/97 $277,460.60 $272,247.57
03/97 $277,288.26 $272,138.68
04/97 $279,478.53 $274,370.21
05/97 $281,449.77 $276,235.93
06/97 $283,596.24 $278,141.96
07/97 $286,271.67 $281,201.52
08/97 $286,494.63 $281,454.60
09/97 $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
01/98 $296,592.33 $291,122.04
02/98 $296,985.32 $291,384.05
03/98 $298,077.52 $292,578.72
04/98 $299,666.02 $293,953.84
05/98 $301,474.35 $295,511.79
06/98 $303,315.78 $297,048.46
07/98 $304,805.84 $298,444.58
08/98 $307,737.12 $302,204.99
09/98 $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
01/99 $315,144.12 $309,727.45
02/99 $314,156.69 $308,209.79
03/99 $316,010.88 $310,367.26
04/99 $317,795.12 $311,360.43
05/99 $317,296.22 $311,173.62
06/99 $317,468.35 $312,138.25
07/99 $317,972.67 $313,137.10
08/99 $318,476.99 $314,045.19
09/99 $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
01/00 $324,099.10 $317,859.47
02/00 $326,179.99 $319,989.13
03/00 $328,033.03 $321,973.06
04/00 $328,824.11 $322,810.19
05/00 $329,878.87 $324,133.71
06/00 $333,213.26 $327,472.29
07/00 $335,361.29 $329,535.37
08/00 $338,046.33 $331,973.93
9/30/00 $341,031.48 $334,364.14
</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.
--------------------------------------------------------------------------------
79
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
SHORT INTERMEDIATE FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
-----------------------------------------------------------------
CORPORATE BONDS -- 18.3%
-----------------------------------------------------------------
CHEMICALS -- 2.7%
DuPont EI De Nemours
6.750%, 10/15/04.................... $ 540,000 $ 538,126
-----------
DIVERSIFIED FINANCIAL SERVICES -- 2.1%
General Electric Capital Corp.
7.500%, 06/05/03.................... 425,000 433,415
-----------
FINANCIAL SERVICES -- 0.9%
Union Acceptance Corp. 1997 D A5
6.410%, 05/10/05.................... 180,000 178,875
-----------
MACHINERY -- 2.5%
Emerson Electric Co.
7.875%, 06/01/05.................... 480,000 500,155
-----------
MONEY CENTER BANKS -- 1.2%
J.P. Morgan & Co., Inc.
5.750%, 02/25/04.................... 250,000 241,200
-----------
OIL & GAS PRODUCERS -- 0.7%
KN Energy, Inc.
6.300%, 03/01/01.................... 135,000 134,437
-----------
REGIONAL BANKS -- 5.0%
Bank of America Corp.
6.240%, 10/26/01.................... 500,000 501,135
Wells Fargo Co.
7.250%, 08/24/05.................... 500,000 505,225
-----------
1,006,360
-----------
TELEPHONE -- 3.2%
Sprint Capital
5.875%, 05/01/04.................... 250,000 239,460
WorldCom, Inc.
6.920%, 11/26/01.................... 400,000 400,784
-----------
640,244
-----------
TOTAL CORPORATE BONDS
(Cost: $3,637,033)................................ 3,672,812
-----------
-----------------------------------------------------------------
AGENCY OBLIGATIONS -- 13.8%
-----------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORP. -- 4.9%
Pool #200112
9.500%, 11/01/05.................... 30,642 31,547
Pool #380032
10.000%, 10/01/03................... 24,276 24,747
Pool #380062
9.500%, 11/01/04.................... 68,590 70,615
Pool #380078
9.000%, 04/01/05.................... 150,892 154,857
Pool #504019
9.000%, 03/01/06.................... 52,976 53,816
Pool #504132
9.000%, 07/01/06.................... 85,165 86,959
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-----------------------------------------------------------------
<S> <C> <C>
FEDERAL HOME LOAN MORTGAGE CORP. (Continued)
Pool #555287
9.750%, 05/01/11.................... $ 128,860 $ 133,841
Pool #B00455
9.000%, 12/01/03.................... 93,339 93,834
Pool #B00511
9.500%, 05/01/06.................... 78,087 79,929
Pool #B00623
9.000%, 06/01/06.................... 121,128 122,580
Pool #G10453
9.000%, 06/01/07.................... 128,252 131,541
-----------
984,266
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 7.3%
Federal Home Loan Mortgage
5.750%, 04/15/03.................... 500,000 490,860
Federal Home Loan Mortgage
6.500%, 08/15/04.................... 740,000 737,381
Pool #303758
9.500%, 07/01/06.................... 70,947 72,080
Pool #303920
9.500%, 10/01/03.................... 64,319 64,802
Pool #50155
10.000%, 12/01/03................... 1,872 1,924
Pool #70722
9.000%, 01/01/06.................... 100,184 102,056
Pool #2454
14.750%, 10/01/12................... 2,273 2,626
-----------
1,471,729
-----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 1.6%
Pool #200947
9.500%, 12/15/17.................... 2,136 2,224
Pool #780179
12.000%, 10/15/15................... 22,479 24,967
Pool #780182
9.000%, 01/15/08.................... 113,990 115,364
Pool #780306
9.000%, 11/15/06.................... 76,743 77,667
Pool #780328
10.000%, 10/15/06................... 104,669 106,810
Pool #59779
11.500%, 03/15/13................... 1,202 1,324
Pool #64054
11.500%, 02/15/13................... 696 721
-----------
329,077
-----------
TOTAL AGENCY OBLIGATIONS
(Cost: $2,786,080)................................ 2,785,072
-----------
-----------------------------------------------------------------
CMO'S AND ASSET-BACKED SECURITIES -- 39.4%
-----------------------------------------------------------------
AUTOMOBILES -- 6.0%
Ford Credit Auto Owner Trust 1999 A B
5.790%, 06/16/03.................... 230,000 225,831
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
80
<PAGE>
-------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-----------------------------------------------------------------
<S> <C> <C>
AUTOMOBILES (Continued)
Hyundai Auto Receivables Trust 1998 A
A2
6.050%, 07/15/04.................... $ 495,145 $ 492,978
Premier Auto Trust PRAT 1998-4 A3
5.690%, 06/08/02.................... 490,727 488,729
-----------
1,207,538
-----------
BOATS -- 2.2%
BankBoston Marine Asset Backed Trust
1997 2 A6
6.640%, 08/15/10.................... 290,000 288,052
Distribution Financial Services Trust
1999 2 A4
6.480%, 10/15/13.................... 170,000 166,919
-----------
454,971
-----------
MORTGAGE-COMMERCIAL -- 12.2%
DLJ Commercial Mortgage Corp. 1998
CF1 CP
0.906%, 04/15/05.................... 3,000,000 101,250
DLJ Mortgage Acceptance Corp. 144A
1996 CF1 S
0.707%, 03/12/06.................... 4,055,005 62,092
Federal Home Loan Mortgage Corp.
5.500%, 05/15/02.................... 2,000,000 1,968,126
Federal National Mortgage Association
Aces 1997 M8 Cl. X1
0.653%, 10/25/02.................... 16,870,000 202,967
Federal National Mortgage Association
Aces 1996 M5 Cl. XS
0.534%, 01/25/13.................... 5,011,778 115,897
Morgan Stanley Capital I 1997 C1 A1A
6.850%, 02/15/20.................... 2,451 2,450
-----------
2,452,782
-----------
MORTGAGE-RESIDENTIAL -- 7.4%
Aames Mortgage Trust 1998-B A3F
6.335%, 08/15/24.................... 225,000 222,249
BankBoston Home Equity Loan Trust
1998 2 A4
6.110%, 09/25/13.................... 365,000 351,327
Centex Home Equity Trust 1999 2 A8
6.040%, 06/25/30.................... 410,000 405,315
Federal Home Administration Mortgage
Series
5.150%, 01/01/07.................... 99,705 92,228
Residential Asset Securities Corp.
2000
KS1 AI1
7.615%, 12/25/14.................... 384,927 384,626
Residential Funding Mortgage Security
I 1993
S47 A8
5.650%, 12/25/23.................... 37,347 36,985
-----------
1,492,730
-----------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-----------------------------------------------------------------
<S> <C> <C>
RECEIVABLES -- 11.6%
American Express Credit Account 97-1
6.400%, 04/15/05.................... $ 354,000 $ 352,230
Commonwealth Edison Co. 1998-1 A3
5.340%, 03/25/04.................... 875,000 859,687
Discover Card Master Trust I 1998 6 A
5.850%, 01/17/06.................... 440,000 429,273
Green Tree Recreational, Equipment &
Consumer Trust 1999 A A6
6.840%, 03/15/10.................... 380,000 375,963
PECO Energy Co. 1999A A2
5.630%, 03/01/05.................... 320,000 313,398
-----------
2,330,551
-----------
TOTAL CMO'S AND ASSET-BACKED SECURITIES
(Cost: $7,995,386)................................ 7,938,572
-----------
-----------------------------------------------------------------
US TREASURY OBLIGATIONS -- 27.9%
-----------------------------------------------------------------
US TREASURY NOTE -- 27.9%
US Treasury Note
6.375%, 03/31/01.................... 1,250,000 1,249,800
US Treasury Note
6.125%, 12/31/01.................... 1,480,000 1,478,387
US Treasury Note
6.375%, 04/30/02.................... 1,600,000 1,606,256
US Treasury Note
5.500%, 02/28/03.................... 1,000,000 989,370
US Treasury Note
5.875%, 11/15/04.................... 300,000 299,673
-----------
5,623,486
-----------
TOTAL US TREASURY OBLIGATIONS
(Cost: $5,593,707)................................ 5,623,486
-----------
-----------------------------------------------------------------
TIME DEPOSIT -- 0.9%
-----------------------------------------------------------------
HSBC Holdings PLC
6.110%, 10/02/00
(Cost: $180,717).................... 180,717 180,717
-----------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 100.3%
(Cost: $20,192,923)............................. 20,200,659
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.3%)... (64,672)
-----------
NET ASSETS -- 100.0%.............................. $20,135,987
-----------
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
81
<PAGE>
HIGH QUALITY BOND FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: CRITERION INVESTMENT MANAGEMENT, SUB ADVISORS: FRED S.
ROBERTSON, III, Chief Investment Officer, Fixed Income; JAMES E. KELLERMAN,
Portfolio Manager; MALCOM S. DAY, CFA, 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.
MARKET OVERVIEW: During the six-month period ended September 30, 2000, bond
prices climbed higher amid a growing belief that the Federal Reserve was
adopting a more neutral monetary policy. Following a half-percentage point
interest rate hike in May, the Federal Reserve left short-term interest rates
unchanged at its two final policy meetings of the period.
The Federal Reserve's action in May marked the sixth in a series of interest
rate increases since June 1999 that lifted short-term interest rates by 1.75%.
Investors bid bond prices higher during the period as reports indicated that
rising rates were having a dampening effect on US economic growth. Government
data released late in the period reinforced the view that inflation remained
under control, another plus for the fixed income markets.
PERFORMANCE: The Fund gained 4.0% during the six-month period ended
September 30, 2000, while its benchmark, the Lehman Aggregate Bond Index, was up
4.8%.
PORTFOLIO SPECIFICS: The Fund had a slightly longer-than-benchmark sensitivity
to interest rates throughout the period. This relatively longer duration had a
positive effect on the Fund's results.
We moved to an overweight position in non-Treasury securities at the beginning
of July. Our aim was to capitalize on the compelling valuations of non-Treasury
securities and expectations that yield spreads would tighten as the Treasury
yield curve reached maximum inversion. Our forecast proved correct, and the
Fund's non-Treasury holdings favorably impacted returns.
However, the relative underperformance of international and high yield sectors
versus high-grade issues detracted from the Fund's performance this period.
MARKET OUTLOOK: Evidence that US GDP growth is slowing to a more moderate 3%
to 4% rate, the prospects for a downturn in global economic expansion, and tame
inflation amid strong productivity gains and a competitive pricing environment
all bode well for the bond market.
In this favorable environment, we expect that interest rates will fall and the
yield curve will become less inverted. As this occurs, the Fund should benefit
as yield spreads of non-Treasury securities should continue to narrow.
--------------------------------------------------------------------------------
82
<PAGE>
HIGH QUALITY BOND FUND INSTITUTIONAL SHARES -- UNAUDITED
------------------------------------------------------------------------
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>
ANNUALIZED TOTAL RETURNS
As of 9/30/00 SINCE
1 YEAR 5 YEARS INCEPTION
6.59% 6.28% 6.83%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
HIGH QUALITY BOND FUND LEHMAN AGGREGATE
INSTITUTIONAL SHARES BOND INDEX
<S> <C> <C>
8/31/95 $250,000.00 $250,000.00
09/95 $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
01/96 $271,811.19 $264,912.67
02/96 $265,456.63 $260,303.19
03/96 $263,734.75 $258,481.07
04/96 $262,283.38 $257,033.58
05/96 $261,661.36 $256,519.51
06/96 $264,958.05 $259,956.87
07/96 $265,800.52 $260,658.75
08/96 $264,747.43 $260,215.63
09/96 $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
01/97 $278,233.23 $273,533.83
02/97 $280,200.32 $274,217.66
03/97 $276,856.27 $271,173.85
04/97 $280,609.51 $275,241.45
05/97 $283,479.63 $277,856.25
06/97 $287,277.02 $281,162.74
07/97 $294,700.78 $288,754.13
08/97 $291,551.31 $286,299.72
09/97 $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
01/98 $309,330.83 $302,924.69
02/98 $310,084.72 $302,682.35
03/98 $311,741.66 $303,711.47
04/98 $312,907.72 $305,290.77
05/98 $315,754.51 $308,191.03
06/98 $317,198.51 $310,810.66
07/98 $318,039.46 $311,463.36
08/98 $319,869.55 $316,540.21
09/98 $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
01/99 $334,219.82 $327,347.02
02/99 $328,273.47 $321,618.45
03/99 $330,864.70 $323,387.35
04/99 $333,284.98 $324,422.19
05/99 $329,616.75 $321,567.28
06/99 $327,584.62 $320,538.26
07/99 $325,469.46 $319,192.00
08/99 $323,883.09 $319,032.40
09/99 $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
01/00 $328,674.58 $321,276.48
02/00 $332,229.29 $325,163.93
03/00 $336,230.66 $329,456.09
04/00 $334,007.65 $328,500.67
05/00 $333,451.90 $328,336.42
06/00 $339,844.30 $335,165.82
07/00 $342,671.62 $338,215.83
08/00 $348,326.27 $343,119.95
9/30/00 $349,704.31 $345,281.61
</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.
--------------------------------------------------------------------------------
83
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
HIGH QUALITY BOND FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
-----------------------------------------------------------------
CORPORATE BONDS -- 26.6%
-----------------------------------------------------------------
AIRLINES -- 2.2%
Continental Airlines, Inc. 1999 1 A
6.545%, 02/02/19.................... $ 262,423 $ 242,077
Northwest Airlines Corp. 1999 2 A
7.575%, 03/01/19.................... 246,769 240,155
-----------
482,232
-----------
AUTO MANUFACTURERS -- 0.3%
Daimler Chrysler NA Holding
7.200%, 09/01/09.................... 75,000 73,166
-----------
AUTO PARTS & EQUIPMENT -- 0.4%
Collins & Aikan Products
11.500%, 04/15/06................... 100,000 96,000
-----------
BROADCASTING -- 0.9%
Clear Channel Communications, Inc.
7.65%, 9/15/10...................... 90,000 89,063
Viacom, Inc. Cl. B
7.700%, 07/30/10.................... 100,000 102,046
-----------
191,109
-----------
COMPUTER SOFTWARE -- 0.5%
Computer Associates International
6.375%, 04/15/05.................... 110,000 102,117
-----------
COMPUTERS -- 0.7%
Sun Microsystems, Inc.
7.650%, 08/15/09.................... 150,000 150,314
-----------
CONSTRUCTION PRODUCTS -- 0.3%
Associated Materials, Inc.
9.250%, 3/01/08..................... 70,000 66,850
-----------
DIVERSIFIED FINANCIAL SERVICES -- 4.0%
ACME Intermediate Holdings Cl. B
0.000% (until 09/30/02, thereafter
12.000% to maturity), 09/30/05...... 100,000 68,000
Bank of America Corp.
7.800%, 02/15/10.................... 100,000 103,092
Boeing Cap Corp.
7.375%, 9/27/10..................... 80,000 80,694
Discover Card
6.850%, 07/17/07.................... 220,000 219,656
Ford Motor Credit Co.
7.375%, 10/28/09.................... 150,000 146,553
Ford Motor Credit Co.
7.875%, 6/15/10..................... 60,000 60,621
Household Finance Corp.
7.880%, 03/01/07.................... 30,000 30,772
Lehman Brothers Holding, Inc.
8.250%, 6/15/07..................... 100,000 103,550
RBF Finance Co.
11.375%, 3/15/09.................... 50,000 57,563
-----------
870,501
-----------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-----------------------------------------------------------------
<S> <C> <C>
DRILLING SERVICES -- 0.7%
Parker Drilling Co.
5.500%, 08/01/04.................... $ 180,000 $ 152,550
-----------
DRUGS/PHARMACEUTICALS -- 0.5%
Warner Chilcott, Inc. 144A
12.625%, 02/15/08................... 100,000 103,000
-----------
ELECTRIC -- 1.0%
Duke Energy Corp.
7.375%, 3/1/10...................... 100,000 101,106
FPL Group Capital, Inc.
7.375%, 06/01/09.................... 115,000 113,356
-----------
214,462
-----------
ELECTRICITY & GAS PRODUCERS -- 0.9%
Enron Corp.
7.375%, 05/15/19.................... 150,000 143,469
Sempra Energy
7.950%, 03/01/10.................... 50,000 50,485
-----------
193,954
-----------
FOOD-MISC/DIVERSIFIED -- 0.5%
ConAgra Foods, Inc.
8.250%, 9/15/30..................... 100,000 99,859
-----------
HEALTHCARE -- 0.7%
Abbey Health Care Group
9.500%, 11/01/02.................... 150,000 149,813
-----------
INSURANCE -- 2.4%
American General Corp.
7.500%, 08/11/10.................... 110,000 109,976
Florida Windstorm Under 144A
7.125%, 02/25/19.................... 100,000 94,000
Hartford Financial Service Group
7.900%, 06/15/10.................... 135,000 139,016
John Hancock Global 144A
7.900%, 07/02/10.................... 130,000 134,189
Lumermens Mutual Casualty 144A
8.300%, 12/01/37.................... 60,000 46,513
-----------
523,694
-----------
INTERNET SOFTWARE -- 0.8%
Exodus Communications, Inc.
10.750%, 12/15/09................... 120,000 116,400
Exodus Communications, Inc. 144A
11.250%, 07/01/08................... 50,000 49,625
-----------
166,025
-----------
INVESTMENT COMPANIES -- 0.0%
Dryden Investor Trust 144A
7.157%, 07/23/08.................... 7,407 6,968
-----------
MACHINERY & EQUIPMENT -- 0.6%
Flowserve Corp. 144A
12.250%, 8/15/10.................... 120,000 122,700
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
84
<PAGE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-----------------------------------------------------------------
<S> <C> <C>
CORPORATE BONDS (Continued)
-----------------------------------------------------------------
MEDICAL-HOSPITALS -- 1.2%
Iasis Healthcare Corp. 144A
13.000%, 10/15/09................... $ 180,000 $ 185,850
Triad Hospitals Holdings, Inc.
11.000%, 05/15/09................... 60,000 61,500
-----------
247,350
-----------
METALS-DIVERSIFIED -- 0.9%
Alcoa, Inc.
7.375%, 08/01/10.................... 40,000 40,336
Scotia Pacific Co. LLC
6.550%, 01/20/07.................... 161,565 153,487
-----------
193,823
-----------
OIL & GAS PRODUCERS -- 1.1%
Gothic Production Corp. 144A
11.130%, 05/01/05................... 50,000 52,375
Phillips Petroleum Co.
8.750%, 5/25/10..................... 30,000 32,700
Tesoro Petroleum Corp. 144A
9.000%, 07/01/08.................... 150,000 146,625
-----------
231,700
-----------
PACKAGING & CONTAINERS -- 1.4%
Four M Corp. Cl. B 144A
12.000%, 06/01/06................... 170,000 160,650
Stone Container Corp.
12.250%, 04/01/02................... 130,000 130,000
-----------
290,650
-----------
RENTAL AUTO/EQUIPMENT -- 0.5%
Hertz Corp.
7.625%, 08/15/07.................... 110,000 109,028
-----------
RETAIL-BUILDING PRODUCTS -- 0.3%
Lowe's Companies, Inc.
8.250%, 06/01/10.................... 60,000 62,830
-----------
TELECOMMUNICATIONS -- 3.8%
Global Crossing Holding, Ltd. 144A
9.630%, 05/15/08.................... 120,000 120,000
Intercel, Inc.
0.000% (until 02/01/01, thereafter
12.000% to maturity), 02/01/06...... 10,000 10,100
Microcell Telecommunications, Inc.
Cl. B 144A
0.000% (until 06/01/04, thereafter
12.000% to maturity), 06/01/09...... 90,000 64,575
NTL, Inc.
0.000% (until 02/01/01, thereafter
11.500% to maturity), 02/01/06...... 110,000 103,950
NTL, Inc. 144A
5.750%, 12/15/09.................... 70,000 46,957
Price Communications Wireless, Inc.
144A
9.130%, 12/15/06.................... 40,000 40,400
TeleCorp PCS, Inc. 144A
0.000% (until 04/15/04, thereafter
11.625% to maturity), 04/15/09...... 260,000 176,150
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-----------------------------------------------------------------
<S> <C> <C>
Telecommunications (Continued)
Triton PCS Holdings, Inc. 144A
0.000% (until 05/01/03, thereafter
11.000% to maturity), 05/01/08...... $ 270,000 $ 202,500
WorldCom, Inc.
8.250%, 05/15/10.................... 60,000 63,717
-----------
828,349
-----------
TOTAL CORPORATE BONDS
(Cost: $5,828,153)................................
5,729,044
-----------
-----------------------------------------------------------------
FOREIGN CORPORATE BONDS -- 9.4%
-----------------------------------------------------------------
CANADA -- 2.6%
360 Networks, Inc. 144A
13.000%, 05/01/08................... 170,000 154,700
Abitibi-Consolidated, Inc.
8.550%, 8/1/10...................... 80,000 81,400
Repap New Brunswick, Inc.
10.630%, 04/15/05................... 190,000 195,700
Teleglobe Inc.
7.200%, 07/20/09.................... 130,000 125,938
-----------
557,738
-----------
CHILE -- 1.5%
Celulosa Arauco
7.200%, 09/15/09.................... 60,000 54,932
Celulosa Arauco
8.625%, 8/15/10..................... 50,000 49,660
Chilgener S.A.
6.500%, 01/15/06.................... 120,000 110,747
Empresa Nacional de Electricidad
8.125%, 02/01/49.................... 120,000 97,003
-----------
312,342
-----------
MEXICO -- 0.7%
Pemex Finance, Ltd.
6.300%, 05/15/10.................... 170,000 159,414
-----------
NETHERLANDS -- 0.9%
Koninklijke (Royal) KPN NV 144A
8.000%, 10/1/10..................... 100,000 100,341
Netia Holdings BV Ser B 144A
0.000% (until 11/01/01, thereafter
11.250% to maturity), 11/01/07...... 130,000 85,150
-----------
185,491
-----------
UNITED KINGDOM -- 3.1%
Amvescap PLC 144A
6.600%, 05/15/05.................... 110,000 104,689
Barclays Bank PLC
7.400%, 12/15/09.................... 85,000 84,312
Energis PLC 144A
9.750%, 06/15/09.................... 60,000 59,100
ONO Finance PLC 144A
13.000%, 05/01/09................... 180,000 162,000
Telewest Communications PLC 144A
0.000% (until 04/15/04, thereafter
9.250% to maturity), 04/15/09....... 370,000 197,950
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
85
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- CONTINUED
--------------------------------------------------------------------------------
HIGH QUALITY BOND FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-----------------------------------------------------------------
<S> <C> <C>
FOREIGN CORPORATE BONDS (Continued)
-----------------------------------------------------------------
United Kingdom (Continued)
United Utilities PLC
6.875%, 08/15/28.................... $ 90,000 $ 72,396
-----------
680,447
-----------
VENEZUELA -- 0.6%
Cerro Negro Finance, Ltd. 144A
7.330%, 12/01/09.................... 70,000 60,900
PDVSA Finance Ltd. 1998 1
7.500%, 11/15/28.................... 80,000 60,634
-----------
121,534
-----------
TOTAL FOREIGN CORPORATE BONDS
(Cost: $2,059,495)................................
2,016,966
-----------
-----------------------------------------------------------------
US TREASURY OBLIGATIONS -- 2.8%
-----------------------------------------------------------------
US TREASURY BONDS -- 1.9%
8.875%, 08/15/17...................... 60,000 77,185
8.000%, 11/15/21...................... 280,000 341,950
-----------
419,135
-----------
US TREASURY NOTES -- 0.7%
5.750%, 11/15/00...................... 150,000 149,883
-----------
US TREASURY STRIPS -- 0.2%
6.875%, 08/15/25...................... 200,000 45,042
-----------
TOTAL US TREASURY OBLIGATIONS
(Cost: $593,031)..................................
614,060
-----------
-----------------------------------------------------------------
AGENCY OBLIGATIONS -- 31.6%
-----------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORP. -- 8.7%
Federal National Mortgage Association
6.000% 5/15/08...................... 500,000 477,655
Federal National Mortgage Association
5.250%, 01/15/09.................... 1,490,000 1,346,826
Pool #200112
9.500%, 11/01/05.................... 32,643 33,607
Pool #380032
10.000%, 10/01/03................... 13,324 13,582
Gold Pool #B00632
9.000%, 06/01/06.................... 10,688 10,816
-----------
1,882,486
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 15.0%
Pool #252959
6.000%, 10/01/29.................... 185,263 173,048
Pool #303262
9.500%, 05/01/07.................... 17,299 17,677
Pool #303481
10.000%, 10/01/05................... 14,449 14,855
Pool #303758
9.500%, 07/01/06.................... 12,773 12,977
Pool #323821
6.000%, 07/01/29.................... 609,765 569,564
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-----------------------------------------------------------------
<S> <C> <C>
Federal National Mortgage Association (Continued)
Pool #323980
6.000%, 04/01/14.................... $ 638,599 $ 614,447
Pool #363503
9.500%, 06/01/05.................... 15,859 16,112
Pool #489833
6.000%, 6/01/14..................... 84,476 81,281
Pool #490619
6.000%, 04/01/29.................... 473,079 441,889
Pool #491000
6.000%, 05/01/14.................... 1 0
Pool #494776
6.500%, 05/01/29.................... 199,980 192,043
Pool #503641
6.000%, 07/01/29.................... 186,711 174,401
Pool #505482
6.000%, 07/01/14.................... 660,516 635,535
Pool #509659
6.000%, 08/01/29.................... 94,495 88,265
Pool #514500
7.000%, 11/01/29.................... 199,980 195,917
-----------
3,228,011
-----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 7.9%
Pool #064054
11.500%, 02/15/13................... 366 379
Pool #299705
8.500%, 02/15/21.................... 4,065 4,188
Pool #434312
6.000%, 04/15/14.................... 240,160 231,978
Pool #460449
6.500%, 06/15/28.................... 155,997 150,244
Pool #467362
6.500%, 12/15/28.................... 367,848 354,282
Pool #467841
6.500%,12/15/28..................... 303,520 292,326
Pool #482794
6.500%,10/15/28..................... 682,211 657,051
Pool#68958
11.500%, 07/15/13................... 663 726
-----------
1,691,174
-----------
TOTAL AGENCY OBLIGATIONS
(Cost: $6,693,994)................................
6,801,671
-----------
-----------------------------------------------------------------
FOREIGN GOVERNMENT BONDS -- 5.4%
-----------------------------------------------------------------
ARGENTINA -- 0.5%
Federal Republic of Argentina
0.000%,10/15/04..................... 175,000 111,563
-----------
GERMANY -- 4.9%
Federal Republic of Germany
7.375%, 01/03/05.................... 1,100,000 1,050,570
-----------
TOTAL FOREIGN GOVERNMENT BONDS
(Cost: $1,314,308)................................
1,162,133
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
86
<PAGE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-----------------------------------------------------------------
<S> <C> <C>
CMO'S AND ASSET-BACKED SECURITIES -- 19.3%
-----------------------------------------------------------------
MORTGAGE-COMMERCIAL -- 17.0%
Asset Securitization Corp. 1996 D2 A1
6.920%, 02/14/29.................... $ 181,294 $ 179,638
Bank Of America 2000 1 A2A
7.333% 10/15/09..................... 140,000 140,263
Capco America Securitization 1998 D7
5.860%, 04/15/00.................... 197,952 188,490
Chase Manhattan Bank
7.439%, 8/15/31..................... 230,000 234,029
Comed Transitional Funding Trust 1998
1 A6
5.630%, 06/25/09.................... 150,000 140,438
Comed Transitional Funding Trust 1998
1 A7
5.740%, 12/25/10.................... 250,000 234,336
Commercial Mortgage Asset Trust
6.250%, 04/17/00.................... 174,418 170,058
CS First Boston Securities Corp. Ser
2000 C1 A2
7.545%, 04/15/10.................... 110,000 111,461
DLJ Commercial Mortgage Corp. 1998 CF1
CP
.9064%, 04/15/05.................... 3,360,000 113,400
DLJ Mortgage Acceptance Corp. 144A
1996 CF1 S
.6097%, 03/12/06.................... 3,804,802 58,261
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.................... 5,745,425 132,863
Federal National Mortgage Association
Aces 1997 M8 c1 X1
.6535%, 10/25/02.................... 8,630,000 103,830
Global Franchise Trust 1998 A1
6.349%, 04/10/04.................... 238,928 235,792
GMAC Commercial Mortgage
Securities, Inc. 1999 C3
7.273%, 8/15/09..................... 200,000 199,843
GMAC Commercial Mortgage
Securities, Inc. 2000 C2 c1 A2
7.455%, 06/16/10.................... 120,000 122,963
GS Mortgage Securities Corp. 1998
C1 A1
6.060%, 10/18/30.................... 136,625 132,784
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-----------------------------------------------------------------
<S> <C> <C>
Mortgage-Commercial (Continued)
Heller Financial 2000 PH1 A2
7.750%, 11/15/09.................... $ 210,000 $ 217,459
Host Marriott Pool Trust 1999 A
6.980%, 04/03/00.................... 110,882 110,553
Morgan Stanley Capital 144A 1997 HF1
A2
7.270%, 01/15/07.................... 160,000 161,400
Mortgage Capital Funding, Inc. 1998
MC3
6.001%, 11/18/31.................... 478,412 461,071
Prudential Securities 1999 NRF1 A2
6.480%, 1/15/09..................... 230,000 220,478
-----------
3,672,643
-----------
MORTGAGE-RESIDENTIAL -- 2.3%
BankBoston Home Equity
Loan Trust 1998 A4
6.110%, 09/25/13.................... 400,000 385,016
CNL Funding Series 2000 AA Cl. A2
8.044%, 04/25/17.................... 105,000 107,773
-----------
492,789
-----------
TOTAL CMO'S AND ASSET-BACKED SECURITIES
(Cost: $4,047,485)................................
4,165,432
-----------
-----------------------------------------------------------------
PREFERRED STOCK -- 0.5%
-----------------------------------------------------------------
TELECOMMUNICATIONS -- 0.5%
Broadwing Communications Ser B
12.500%, 08/15/09
(Cost: $103,675).................... 100,000 102,500
-----------
-----------------------------------------------------------------
TIME DEPOSIT -- 3.5%
-----------------------------------------------------------------
Chase Manhattan Bank
6.110%, 10/02/00
(Cost: $757,134).................... 757,134 757,134
-----------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 99.1%
(Cost: $21,397,275)............................. 21,348,940
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.9%..... 202,284
-----------
NET ASSETS -- 100.0%.............................. $21,551,224
-----------
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
87
<PAGE>
HIGH YIELD BOND FUND INSTITUTIONAL SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: DOUGLAS G. FORSYTH, CFA, Partner, Portfolio Manager; WILLIAM
STICKNEY, Portfolio Manager; MICHAEL E. YEE, Portfolio Manager; JUSTIN KASS,
Investment Analyst.
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: From April 1, 2000 to September 30, 2000, high yield bond
prices posted positive results, outpacing many major US equity indices.
In April and May, the high yield bond market was quiet, characterized by
minimal new issue volume, light secondary trading and a modest price decline.
The market rallied in June, however, amid the most significant flow of new deals
since the first quarter of 2000. The CS First Boston High Yield Index advanced
2.2% in June, led by gains in technology, energy and gaming issues.
Following June's advance, the market traded in a narrow range throughout the
last three months of the period as a lack of mutual fund inflows and new
issuance dampened investor enthusiasm.
PERFORMANCE: The Fund advanced 1.3% during the six-months ended September 30,
2000 versus the CS First Boston High Yield Index which gained 1.1%.
PORTFOLIO SPECIFICS: During the period, the Fund slightly outperformed its
benchmark, benefiting from many credit upgrades of issuers across multiple
industries. One notable example was Triarc Beverage Group. Triarc was upgraded
seven ratings levels after the company's September announcement that it had
agreed to sell Snapple to Cadbury Schweppes.
MARKET OUTLOOK: Looking forward, the high yield bond market continues to offer
attractive return opportunities. The consensus view among market participants is
that the Federal Reserve has completed its tightening cycle. This bodes well for
high yield bond investors since over the last decade, the end of a tightening
cycle has generally led to strong high yield bond performance. In addition, an
increase in new issuance activity across a diverse range of industries is
indicative of heightened investor demand. In this environment, we are optimistic
that the application of our strict investment philosophy will lead us to
outstanding investment candidates within the high yield bond market.
--------------------------------------------------------------------------------
88
<PAGE>
HIGH YIELD BOND FUND INSTITUTIONAL SHARES -- UNAUDITED
------------------------------------------------------------------------
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
5.31% As of 9/30/00 11.34%
</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>
7/31/96 $250,000.00 $250,000.00
08/96 $256,780.00 $252,725.00
09/96 $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
01/97 $283,685.20 $270,368.54
02/97 $289,776.34 $275,451.46
03/97 $284,739.55 $272,366.41
04/97 $285,969.10 $274,790.47
05/97 $298,355.30 $280,313.76
06/97 $305,704.82 $284,126.03
07/97 $315,197.53 $290,149.50
08/97 $318,278.57 $291,716.30
09/97 $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
01/98 $349,161.58 $307,439.76
02/98 $353,473.83 $309,837.79
03/98 $357,326.30 $311,386.98
04/98 $360,502.68 $313,722.38
05/98 $361,563.77 $314,663.55
06/98 $363,444.19 $315,324.34
07/98 $366,798.21 $317,531.61
08/98 $346,503.88 $295,971.22
09/98 $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
01/99 $361,234.10 $306,915.23
02/99 $360,705.26 $306,270.71
03/99 $363,377.04 $309,057.77
04/99 $374,002.22 $315,887.95
05/99 $369,987.45 $312,476.36
06/99 $372,229.78 $312,632.60
07/99 $374,482.50 $312,788.91
08/99 $372,185.91 $310,005.09
09/99 $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
01/00 $387,057.46 $312,772.03
02/00 $390,727.39 $314,711.22
03/00 $386,069.53 $309,990.55
04/00 $389,146.42 $309,525.56
05/00 $385,409.43 $304,573.15
06/00 $395,091.29 $311,395.59
07/00 $397,567.20 $314,322.71
08/00 $397,746.02 $316,428.67
9/30/00 $391,184.82 $313,517.53
</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.
--------------------------------------------------------------------------------
89
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
HIGH YIELD BOND FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
----------------------------------------------------------------
CORPORATE BONDS -- 87.5%
----------------------------------------------------------------
AIRLINES -- 2.1%
Atlas Air, Inc.
10.750%, 08/01/05................... $250,000 $ 258,750
Atlas Air, Inc.
9.250%, 04/15/08.................... 200,000 199,250
-----------
458,000
-----------
APPAREL -- 1.4%
Supreme International Corp.
12.250%, 04/01/06................... 340,000 316,200
-----------
APPLIANCES -- 1.8%
Salton, Inc.
10.750%, 12/15/05................... 400,000 392,000
-----------
AUTO/TRUCK PARTS & EQUIPMENT -- 0.7%
Collins & Aikan Corp.
11.500%, 04/15/06................... 150,000 144,000
-----------
BEVERAGES-NON-ALCOHOLIC -- 1.7%
Triarc Consumer Beverage 144A
10.250%, 02/15/09................... 340,000 378,250
-----------
BROADCASTING -- 7.5%
Capstar Broadcasting Partners, Inc.
12.000%, 07/01/09................... 309,000 358,440
CD Radio, Inc.
14.500%, 05/15/09................... 350,000 310,625
Echostar DBS Corp.
9.375%, 02/01/09.................... 400,000 392,000
Spectrasite Holdings, Inc.
0.000% (until 04/15/04, thereafter
11.250% to maturity), 04/15/09...... 500,000 272,500
United International Holdings
0.000% (until 02/15/03, thereafter
10.750% to maturity), 02/15/08...... 460,000 315,100
-----------
1,648,665
-----------
BUILDING & CONSTRUCTION -- 3.9%
K Hovanian Enterprises, Inc. 144A
10.500%, 10/01/07................... 285,000 279,300
Nortek, Inc.
9.875%, 03/01/04.................... 325,000 313,625
Ryland Group, Inc.
9.750%, 09/01/10.................... 270,000 268,650
-----------
861,575
-----------
BUSINESS SERVICES -- 1.0%
Iron Mountain, Inc. 144A
8.750%, 09/30/09.................... 100,000 95,500
SITEL Corp. 144A
9.250%, 03/15/06.................... 145,000 134,850
-----------
230,350
-----------
CASINOS/HOTELS -- 6.9%
Argosy Gaming Co. 144A
10.750%, 06/01/09................... 250,000 261,563
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
Casinos/Hotels (Continued)
Autotote Corp. 144A Rt. Cl. A
12.500%, 08/15/10................... $355,000 $ 360,324
Extended Stay America, Inc. 144A
9.150%, 03/15/08.................... 240,000 226,800
Park Place Entertainment Corp.
8.875%, 09/15/08.................... 240,000 237,600
Prime Hospitality Corp. 144A Ser. B
9.750%, 04/01/07.................... 70,000 69,650
Venetian Casino
12.250%, 11/15/04................... 360,000 369,000
-----------
1,524,937
-----------
CHEMICALS -- 1.5%
Lyondell Chemical Co. 144A Ser. B
9.875%, 05/01/07.................... 340,000 331,925
-----------
CIRCUITS -- 1.6%
Hadco Corp.
9.500%, 05/15/08.................... 350,000 353,063
-----------
DIVERSIFIED FINANCIAL SERVICES -- 4.6%
ACME Intermediate Holdings Cl. B
0.000% (until 09/30/01, thereafter
12.000% to maturity), 09/30/05...... 400,000 272,000
GS Escrow Corp.
6.750%, 08/01/01.................... 385,000 379,225
Metris Cos., Inc. 144A
10.125%, 07/15/06................... 370,000 355,200
-----------
1,006,425
-----------
DRUGS/PHARMACEUTICALS -- 1.8%
Twin Laboratories, Inc.
10.250%, 05/15/06................... 40,000 38,000
Warner Chilcott, Inc. 144A
12.625%, 02/15/08................... 350,000 360,500
-----------
398,500
-----------
ELECTRIC -- 1.6%
AES Corp.
9.500%, 06/01/09.................... 350,000 356,125
-----------
ELECTRONIC COMPONENTS-SEMICONDUCTORS -- 1.8%
Amkor Technology, Inc.
10.500%, 05/01/09................... 400,000 405,500
-----------
ENTERTAINMENT -- 1.9%
Ascent Entertainment Group 0.000%
(until 12/01/02, thereafter
11.875% to maturity), 12/15/04...... 505,000 419,150
-----------
HEALTH CARE -- 3.0%
Abbey Healthcare Group
9.500%, 11/01/02.................... 325,000 324,594
Triad Hospitals Holdings, Inc. 144A
Ser. B
11.000%, 05/15/09................... 325,000 333,125
-----------
657,719
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
90
<PAGE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
CORPORATE BONDS (Continued)
----------------------------------------------------------------
INTERNET SOFTWARE -- 3.3%
Exodus Communications
11.250%, 07/01/08................... $385,000 $ 382,113
Globix Corp. 144A
12.500%, 02/01/10................... 200,000 144,000
PSInet, Inc.
10.000%, 02/15/05................... 325,000 211,250
-----------
737,363
-----------
OIL & GAS PRODUCTION -- 1.0%
Stone Energy Corp.
8.750%, 09/15/07.................... 220,000 214,500
-----------
PUBLISHING -- 1.6%
American Lawyer Media
9.750%, 12/15/07.................... 375,000 354,375
-----------
RECREATIONAL CENTERS -- 1.5%
Bally Total Fitness Holdings
9.875%, 10/15/07.................... 355,000 337,250
-----------
RENTAL AUTO/EQUIPMENT -- 3.8%
Rent-A-Center, Inc. 144A
11.000%, 08/15/08................... 350,000 346,500
United Rentals, Inc. 144A Ser. B
9.000%,04/01/09..................... 210,000 187,950
United Rentals, Inc.
9.500%, 06/01/08.................... 340,000 311,100
-----------
845,550
-----------
RESORTS/THEME PARKS -- 1.5%
Premier Parks Inc.
9.750%, 06/15/07.................... 350,000 327,250
-----------
RETAIL-ARTS & CRAFTS -- 1.7%
Michaels Stores, Inc.
10.875%, 06/15/06................... 365,000 377,775
-----------
RETAIL-AUTOMOBILE -- 1.3%
Sonic Automotive, Inc. 144A Ser. B
11.000%, 08/01/08................... 325,000 292,500
-----------
RETAIL-DISCOUNT -- 2.1%
Tuesday Morning Corp.
11.000%, 12/15/07................... 484,000 467,060
-----------
RETAIL-INTERNET -- 1.0%
Amazon.com, Inc. 0.000% (until
05/01/03, thereafter
10.000% to maturity), 05/01/08...... 420,000 220,500
-----------
RETAIL-MUSIC STORES -- 2.4%
Musicland Stores Corp.
9.000%, 06/15/03.................... 380,000 353,400
Musicland, Inc.
9.875%, 03/15/08.................... 210,000 176,400
-----------
529,800
-----------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
RETAIL-RESTAURANTS -- 1.8%
Foodmaker, Inc.
8.375%, 04/15/08.................... $420,000 $ 394,800
-----------
RETAIL-VIDEO RENTAL -- 1.4%
Hollywood Entertainment Corp.
10.625%, 08/15/04................... 400,000 308,000
-----------
TELECOMMUNICATIONS -- 11.1%
Crown Castle International Corp.
0.000% (until 11/15/02, thereafter
10.625% to maturity), 11/15/07...... 440,000 343,200
Crown Castle International Corp.
10.750%, 08/01/11................... 75,000 77,063
ICG Holdings, Inc. 144A
13.500%, 09/15/05................... 360,000 79,200
International Cablenote, Inc.
12.750%, 04/15/05................... 350,000 351,750
McLeodUSA, Inc. 144A Cl.A
9.500%, 11/01/08.................... 340,000 317,900
Nextlink Communications
0.000% (until 06/01/04, thereafter
12.250% to maturity), 06/01/09...... 400,000 224,000
NTL Communications Corp. 144A
11.875%, 10/01/10................... 170,000 166,813
NTL, Inc.
0.000% (until 02/01/01, thereafter
11.500% to maturity), 02/01/06...... 265,000 250,424
Pac-West Telecomm, Inc.
13.500%, 02/01/09................... 340,000 299,200
Winstar Communications, Inc. 144A
12.750%, 04/15/10................... 477,000 345,824
-----------
2,455,374
-----------
TELECOMMUNICATIONS EQUIPMENT -- 2.1%
Global Telesystems Group, Inc.
9.875%, 02/15/05.................... 440,000 189,200
Northeast Optic Network
12.750%, 08/15/08................... 320,000 265,600
-----------
454,800
-----------
TELEPHONE -- 2.4%
Nextel Communications, Inc.
10.250%, 02/15/09................... 460,000 361,100
Viatel, Inc.
11.250%, 04/15/08................... 390,000 179,400
-----------
540,500
-----------
TELEVISION -- 2.7%
ACME Television 0.000% (until
09/30/00, thereafter
10.875% to maturity), 09/30/04...... 250,000 237,500
Frontiervision L.P.
11.000%, 10/15/06................... 350,000 349,125
-----------
586,625
-----------
TOTAL CORPORATE BONDS
(Cost: $20,731,917)..............................
19,326,406
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
91
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- CONTINUED
--------------------------------------------------------------------------------
HIGH YIELD BOND FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
FOREIGN CORPORATE BONDS -- 7.7%
----------------------------------------------------------------
AUSTRALIA -- 0.4%
Bulong Operations 144A
12.500%, 12/15/08................... $180,000 $ 90,000
-----------
CANADA -- 1.4%
Alliance Atlantis Communications Corp.
13.000%, 12/15/09................... 300,000 310,500
-----------
NETHERLANDS -- 2.7%
United Pan-Europe Communications N.V.
144A Ser. B
11.500%, 02/01/10................... 340,000 294,950
Versatel Telecommunications
11.875%, 07/15/09................... 350,000 302,750
-----------
597,700
-----------
SINGAPORE -- 1.6%
Flextronics International, Ltd. 144A
9.875%, 07/01/10.................... 350,000 359,625
-----------
UNITED KINGDOM -- 1.6%
Colt Telecom Group PLC
0.000% (until 12/15/01, thereafter
12.000% to maturity), 12/15/06...... 375,000 341,250
-----------
TOTAL FOREIGN CORPORATE BONDS
(Cost: $1,839,341)...............................
1,699,075
-----------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------------------------------------------------------------
<S> <C> <C>
PREFERRED CORPORATE BOND -- 0.0%
----------------------------------------------------------------
TELECOMMUNICATIONS -- 0.0%
NEXTLINK Communications, Inc.
Ser. B 13.500%, 06/01/10
(Cost: $6,587)...................... $ 177 $ 13,983
-----------
----------------------------------------------------------------
TIME DEPOSIT -- 2.4%
----------------------------------------------------------------
Bank One Grand Cayman
6.110%, 10/02/00
(Cost: $525,866).................... 525,866 525,866
-----------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 97.6%
(Cost: $23,103,711)............................. 21,565,330
OTHER ASSETS IN EXCESS OF LIABILITIES -- 2.4%..... 532,693
-----------
NET ASSETS -- 100.0%.............................. $22,098,023
-----------
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
92
<PAGE>
(This page intentionally left blank)
--------------------------------------------------------------------------------
93
<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 (LOSSES) INCOME CAPITAL GAINS ENDING
<S> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------
GLOBAL EQUITY FUNDS
WORLDWIDE GROWTH
For the period ended
9/30/00 (4) $ 38.70 $(0.06) $ (4.18) $ -- $ -- $ 34.46
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 period ended
09/30/00 (4) $ 31.91 $ -- $ (2.98) $ -- $ -- $ 28.93
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 period ended
9/30/00 (4) $ 19.15 $ 0.01 $ (2.08) $(0.01) $ -- $ 17.07
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 period ended
9/30/00 (4) $138.95 $(0.65) $(12.17) $ -- $ -- $126.13
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
For the period ended
9/30/00 (4) $ 30.91 $(0.11) $ 11.87 $ -- $ -- $ 42.67
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 ended
9/30/00 (4) $ 31.88 $ 0.06 $ (4.80) $ -- $ -- $ 27.14
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 ended
9/30/00 (4) $ 51.19 $(0.04) $ (6.84) $ -- $ -- $ 44.31
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 ended
9/30/00 (4) $ 23.69 $(0.24) $ (5.66) $ 0.00 $ -- $ 17.79
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 period ended
9/30/00 (4) $ 25.45 $(0.18) $ (4.24) $ -- $ -- $ 21.03
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 period ended
9/30/00 (4) $ 20.65 $(0.04) $ (3.37) $ -- $ -- $ 17.24
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.
(5) Net expenses include certain items not subject to expense reimbursement.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
94
<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(5) RATE (IN 000'S)
<S> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------------
GLOBAL EQUITY FUNDS
WORLDWIDE GROWTH
For the period ended
9/30/00 (4) (10.93%) (0.34%) 1.33% 0.03% 1.36% 97% $164,247
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 period ended
09/30/00 (4) (9.34%) 0.01% 1.72% (0.46%) 1.26% 182% $ 20,298
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 period ended
9/30/00 (4) (10.79%) 0.09% 2.57% (1.14%) 1.43% 163% $ 5,200
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 period ended
9/30/00 (4) (9.19%) (1.07%) 1.36% 0.05% 1.41% 192% $305,594
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
For the period ended
9/30/00 (4) 38.00% (0.64%) 1.31% 0.02% 1.33% 371% $167,775
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 ended
9/30/00 (4) (14.87%) 0.38% 1.31% 0.10% 1.41% 118% $305,577
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 ended
9/30/00 (4) (13.44%) (0.18%) 1.33% 0.08% 1.41% 87% $277,233
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 ended
9/30/00 (4) (24.91%) (0.21%) 1.71% (0.03%) 1.68% 99% $282,317
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 period ended
9/30/00 (4) (17.37%) (1.66%) 8.68% (6.63%) 2.05% 861% $ 2,330
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 period ended
9/30/00 (4) (16.59%) (0.41%) 3.55% (1.83%) 1.72% 245% $ 4,443
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>
--------------------------------------------------------------------------------
95
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
FINANCIAL HIGHLIGHTS -- CONTINUED
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 (LOSSES) INCOME CAPITAL GAINS ENDING
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------
U.S. EQUITY FUNDS
LARGE CAP GROWTH
For the period ended
9/30/00 (4) $49.86 $(0.19) $(2.68) $ -- $ -- $46.99
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 ended
9/30/00 (4) $41.51 $(0.13) $(0.65) $ -- $ -- $40.73
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 ended
9/30/00 (4) $27.03 $(0.03) $(3.27) $ -- $ -- $23.73
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 period ended
9/30/00 (4) $42.54 $(0.20) $(5.40) $ -- $ -- $36.94
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 ended
9/30/00 (4) $21.74 $ 0.10 $ 1.17 $ -- $ -- $23.01
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 ended
9/30/00 (4) $33.67 $ 0.36 $(0.49) $(0.34) $ -- $33.20
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 period ended
9/30/00 (4) $12.44 $ 0.42 $ 0.07 $(0.45) $ -- $12.48
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 ended
9/30/00 (4) $12.11 $ 0.41 $ 0.06 $(0.43) $ -- $12.15
For the period 5/7/99
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
HIGH YIELD BOND
For the period ended
9/30/00 (4) $11.95 $ 0.61 $(0.45) $(0.60) $ -- $11.51
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.
(5) Net expenses include certain items not subject to expense reimbursement.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
96
<PAGE>
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS (3)
---------------------------------------------------------
EXPENSE FUND'S
NET (REIMBURSEMENTS) PORTFOLIO NET ASSETS,
TOTAL INVESTMENT TOTAL ---------------- NET TURNOVER ENDING
RETURN (2) INCOME (LOSS) EXPENSES RECOUPMENT EXPENSES (5) RATE (IN 000'S)
<S> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------------
U.S. EQUITY FUNDS
LARGE CAP GROWTH
For the period ended
9/30/00 (4) (5.68%) (0.68%) 1.03% (0.03%) 1.00% 63% $ 67,951
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 ended
9/30/00 (4) (1.86%) (0.70%) 1.02% (0.01%) 1.01% 75% $240,426
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 ended
9/30/00 (4) (12.21%) (0.24%) 1.33% (0.14%) 1.19% 45% $258,691
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 period ended
9/30/00 (4) (13.16%) (1.10%) 1.62% (0.04%) 1.58% 54% $ 91,610
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 ended
9/30/00 (4) 5.79% 0.93% 1.29% (0.24%) 1.05% 71% $ 35,511
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 ended
9/30/00 (4) (0.36%) 2.30% 1.04% (0.03%) 1.01% 51% $152,731
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 period ended
9/30/00 (4) 3.96% 6.48% 0.92% (0.53%) 0.39% 236% $ 20,136
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 ended
9/30/00 (4) 4.01% 6.93% 1.33% (0.86%) 0.47% 155% $ 17,385
For the period 5/7/99
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
HIGH YIELD BOND
For the period ended
9/30/00 (4) 1.32% 10.33% 1.22% (0.45%) 0.77% 60% $ 22,098
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) 2.75% 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>
--------------------------------------------------------------------------------
97
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
GLOBAL
WORLDWIDE GLOBAL GROWTH & GLOBAL
GROWTH BLUE CHIP INCOME TECHNOLOGY
<S> <C> <C> <C> <C>
ASSETS
Investments, at value* $163,531,128 $20,463,398 $5,143,415 $306,747,545
Foreign currencies, at
value** 390,140 223,686 61,500 71,133
Cash 18,175,115 1,317,114 386,101 32,951,350
Receivables:
Investment securities
sold 9,192,451 1,481,657 405,124 6,917,663
Capital shares sold 132,132 2,683 51 229,366
Dividends 156,195 10,628 4,021 43,916
Interest 13 -- 4,105 --
From investment advisor -- 7,702 6,795 --
Unrealized gain on
forward currency
contracts -- -- -- --
Other assets 5,124 279 127 24,585
------------ ----------- ---------- ------------
Total Assets 191,582,298 23,507,147 6,011,239 346,985,558
------------ ----------- ---------- ------------
LIABILITIES
Payables:
Bank overdraft $ -- $ -- $ -- $ 1,987,602
Investments purchased 12,904,453 2,390,943 447,883 3,929,320
Capital shares
purchased 10,372 2,683 46 2,007,638
Collateral on
securities loaned 14,109,095 753,900 302,500 32,951,350
Dividends -- -- -- 16,986
To investment advisor 144,501 13,383 3,925 256,249
Unrealized loss on
forward currency
contracts -- -- -- --
Other liabilities 166,899 48,191 56,614 242,840
------------ ----------- ---------- ------------
Total Liabilities 27,335,320 3,209,100 810,968 41,391,985
------------ ----------- ---------- ------------
NET ASSETS $164,246,978 $20,298,047 $5,200,271 $305,593,573
------------ ----------- ---------- ------------
------------ ----------- ---------- ------------
* Investments, at cost $136,862,105 $18,063,282 $4,581,422 $257,626,080
------------ ----------- ---------- ------------
------------ ----------- ---------- ------------
** Foreign currencies,
at cost $ 411,501 $ 228,287 $ 62,762 $ 71,774
------------ ----------- ---------- ------------
------------ ----------- ---------- ------------
NET ASSETS CONSIST OF:
Paid-in capital $103,044,513 $10,866,306 $3,293,996 $210,866,435
Undistributed net
investment income
(loss) 461,305 124,071 85,545 (822,235)
Accumulated net realized
gain (loss) on
investments and foreign
currencies 34,050,741 6,907,002 1,258,152 46,426,472
Net unrealized
appreciation
(depreciation) of
investments and of
other assets and
liabilities denominated
in foreign currencies 26,690,419 2,400,668 562,578 49,122,901
------------ ----------- ---------- ------------
Net assets applicable to
all shares outstanding $164,246,978 $20,298,047 $5,200,271 $305,593,573
------------ ----------- ---------- ------------
------------ ----------- ---------- ------------
Net Assets of
Institutional Shares $164,246,978 $20,298,047 $5,200,271 $305,593,573
Net Assets of Retirement
Shares NA NA NA NA
------------ ----------- ---------- ------------
------------ ----------- ---------- ------------
Institutional Shares
outstanding 4,766,370 701,536 304,621 2,422,907
Retirement Shares
outstanding NA NA NA NA
------------ ----------- ---------- ------------
------------ ----------- ---------- ------------
Net Asset Value --
Institutional Share $ 34.46 $ 28.93 $ 17.07 $ 126.13
Net Asset Value --
Retirement Share NA NA NA NA
------------ ----------- ---------- ------------
------------ ----------- ---------- ------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
98
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL
GLOBAL INTERNATIONAL SMALL CAP EMERGING PACIFIC
HEALTH CARE CORE GROWTH GROWTH COUNTRIES RIM
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at value* $171,640,671 $306,886,804 $278,358,890 $281,305,466 $2,315,653
Foreign currencies, at
value** -- -- 183,713 3,217,571 60
Cash 21,001,111 52,167,642 68,009,865 29,628,714 9,750
Receivables:
Investment securities
sold 13,778,979 9,149,049 6,792,168 10,830,670 160,319
Capital shares sold 719,736 7,845,352 11,869,894 778,362 91
Dividends 5,649 577,366 208,413 619,912 2,656
Interest -- -- -- 6 --
From investment advisor -- -- -- -- 16,751
Unrealized gain on
forward currency
contracts -- -- -- -- --
Other assets 34,844 6,983 36,686 27,829 --
------------ ------------ ------------ ------------ ----------
Total Assets 207,180,990 376,633,196 365,459,629 326,408,530 2,505,280
------------ ------------ ------------ ------------ ----------
LIABILITIES
Payables:
Bank overdraft $ -- $ 151,649 $ -- $ -- $ 34,376
Investments purchased 26,190,760 27,846,892 35,801,271 19,824,711 80,685
Capital shares
purchased 666,130 7,821,245 10,248,453 293,944 140
Collateral on
securities loaned 12,344,450 34,744,493 41,722,821 23,362,400 9,750
Dividends -- -- -- -- --
To investment advisor 123,185 273,108 238,091 289,289 1,962
Unrealized loss on
forward currency
contracts -- -- -- -- --
Other liabilities 81,377 218,869 216,101 320,810 48,675
------------ ------------ ------------ ------------ ----------
Total Liabilities 39,405,902 71,056,256 88,226,737 44,091,154 175,588
------------ ------------ ------------ ------------ ----------
NET ASSETS $167,775,088 $305,576,940 $277,232,892 $282,317,376 $2,329,692
------------ ------------ ------------ ------------ ----------
------------ ------------ ------------ ------------ ----------
* Investments, at cost $132,102,867 $286,023,849 $248,609,169 $270,987,190 $2,307,940
------------ ------------ ------------ ------------ ----------
------------ ------------ ------------ ------------ ----------
** Foreign currencies,
at cost $ -- $ (151,245) $ 183,703 $ 3,235,144 $ 60
------------ ------------ ------------ ------------ ----------
------------ ------------ ------------ ------------ ----------
NET ASSETS CONSIST OF:
Paid-in capital $102,224,834 $274,640,578 $201,135,178 $274,439,084 $1,470,918
Undistributed net
investment income
(loss) 474,703 345,814 (1,095,100) 359,306 56,979
Accumulated net realized
gain (loss) on
investments and foreign
currencies 25,537,758 9,561,263 47,367,959 (2,764,201) 794,151
Net unrealized
appreciation
(depreciation) of
investments and of
other assets and
liabilities denominated
in foreign currencies 39,537,793 21,029,285 29,824,855 10,283,187 7,644
------------ ------------ ------------ ------------ ----------
Net assets applicable to
all shares outstanding $167,775,088 $305,576,940 $277,232,892 $282,317,376 $2,329,692
------------ ------------ ------------ ------------ ----------
------------ ------------ ------------ ------------ ----------
Net Assets of
Institutional Shares $167,775,088 $291,186,946 $277,232,892 $282,317,205 $2,329,692
Net Assets of Retirement
Shares NA 14,389,994 NA 171 NA
------------ ------------ ------------ ------------ ----------
------------ ------------ ------------ ------------ ----------
Institutional Shares
outstanding 3,931,750 10,727,648 6,256,288 15,871,280 110,782
Retirement Shares
outstanding NA 531,384 NA 10 NA
------------ ------------ ------------ ------------ ----------
------------ ------------ ------------ ------------ ----------
Net Asset Value --
Institutional Share $ 42.67 $ 27.14 $ 44.31 $ 17.79 $ 21.03
Net Asset Value --
Retirement Share NA $ 27.08 NA $ 17.10 NA
------------ ------------ ------------ ------------ ----------
------------ ------------ ------------ ------------ ----------
</TABLE>
--------------------------------------------------------------------------------
99
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
STATEMENT OF ASSETS AND LIABILITIES -- CONTINUED
SEPTEMBER 30, 2000 (UNAUDITED)
<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* $4,619,946 $155,341,326 $241,422,169 $268,009,888 $ 91,825,294
Foreign currencies, at
value** 13,180 -- -- -- --
Cash 1,874,705 20,500,923 25,321,837 51,375,805 16,325,530
Receivables:
Investment securities
sold 600,278 7,962,966 6,285,761 1,154,972 509,306
Capital shares sold -- 2,342,242 5,070 251,152 3,499,556
Dividends 976 14,672 2,555 12,267 1,680
Interest -- -- -- -- --
From investment advisor 6,913 351 -- 16,471 --
Unrealized gain on
forward currency
contracts -- -- -- -- --
Other assets 1,974 17,292 10,541 9,656 5,592
---------- ------------ ------------ ------------ ------------
Total Assets 7,117,972 186,179,772 273,047,933 320,830,211 112,166,958
---------- ------------ ------------ ------------ ------------
LIABILITIES
Payables:
Bank overdraft $ -- $ -- $ -- $ -- $ --
Investments purchased 1,414,787 17,267,581 12,725,279 26,801,649 7,426,327
Capital shares
purchased 10 2,314,353 -- 180,430 2,788,717
Collateral on
securities loaned 1,223,600 14,564,900 19,573,500 29,142,150 10,154,400
Dividends -- -- -- -- --
To investment advisor 4,595 92,302 149,504 215,332 95,540
Unrealized loss on
forward currency
contracts -- -- -- -- --
Other liabilities 32,248 99,167 154,405 222,991 92,330
---------- ------------ ------------ ------------ ------------
Total Liabilities 2,675,240 34,338,303 32,602,688 56,562,552 20,557,314
---------- ------------ ------------ ------------ ------------
NET ASSETS $4,442,732 $151,841,469 $240,445,245 $264,267,659 $ 91,609,644
---------- ------------ ------------ ------------ ------------
---------- ------------ ------------ ------------ ------------
* Investments, at cost $4,353,084 $129,220,689 $167,810,798 $197,792,156 $ 74,512,628
---------- ------------ ------------ ------------ ------------
---------- ------------ ------------ ------------ ------------
** Foreign currencies,
at cost $ 13,333 $ -- $ -- $ -- $ --
---------- ------------ ------------ ------------ ------------
---------- ------------ ------------ ------------ ------------
NET ASSETS CONSIST OF:
Paid-in capital $3,130,733 $125,021,375 $105,718,629 $144,886,605 $ 35,626,095
Undistributed net
investment income
(loss) (33,144) (261,847) 168,556 1,086,442 2,624,807
Accumulated net realized
gain (loss) on
investments and foreign
currencies 1,079,112 961,304 60,946,689 48,076,880 36,046,076
Net unrealized
appreciation
(depreciation) of
investments and of
other assets and
liabilities denominated
in foreign currencies 266,031 26,120,637 73,611,371 70,217,732 17,312,666
---------- ------------ ------------ ------------ ------------
Net assets applicable to
all shares outstanding $4,442,732 $151,841,469 $240,445,245 $264,267,659 $ 91,609,644
---------- ------------ ------------ ------------ ------------
---------- ------------ ------------ ------------ ------------
Net Assets of
Institutional Shares $4,442,732 $ 67,951,489 $240,425,750 $258,691,050 $ 91,609,644
Net Assets of Retirement
Shares NA 83,889,980 19,495 5,576,609 NA
---------- ------------ ------------ ------------ ------------
---------- ------------ ------------ ------------ ------------
Institutional Shares
outstanding 257,667 1,446,072 5,902,556 10,901,821 2,480,166
Retirement Shares
outstanding NA 1,790,046 479 235,226 NA
---------- ------------ ------------ ------------ ------------
---------- ------------ ------------ ------------ ------------
Net Asset Value --
Institutional Share $ 17.24 $ 46.99 $ 40.73 $ 23.73 $ 36.94
Net Asset Value --
Retirement Share NA $ 46.86 $ 40.70 $ 23.71 NA
---------- ------------ ------------ ------------ ------------
---------- ------------ ------------ ------------ ------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
100
<PAGE>
<TABLE>
<CAPTION>
SHORT HIGH QUALITY HIGH YIELD
VALUE CONVERTIBLE INTERMEDIATE BOND BOND
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at value* $45,246,887 $151,227,841 $20,200,659 $21,348,940 $21,565,330
Foreign currencies, at
value** -- -- -- -- --
Cash 2,961,804 601,741 143,723 655,574 707,243
Receivables:
Investment securities
sold -- 7,429,145 -- 511,850 488,172
Capital shares sold 65,370 21 207,654 21,069 8,212
Dividends 73,507 65,083 -- -- --
Interest -- 501,981 278,326 314,140 553,853
From investment advisor 5,964 -- 8,416 16,202 9,049
Unrealized gain on
forward currency
contracts -- -- -- -- --
Other assets 4,659 8,098 3,560 11,286 29,636
----------- ------------ ----------- ----------- -----------
Total Assets 48,358,191 159,833,910 20,842,338 22,879,061 23,361,495
----------- ------------ ----------- ----------- -----------
LIABILITIES
Payables:
Bank overdraft $ -- $ -- $ -- $ -- $ --
Investments purchased 3,121,877 6,866,008 180,715 1,239,900 1,151,594
Capital shares
purchased 44,438 -- 468,789 12,488 8,212
Collateral on
securities loaned 537,300 -- -- -- --
Dividends 10 35,869 13,603 1,106 53,989
To investment advisor 26,214 90,977 4,967 7,690 10,729
Unrealized loss on
forward currency
contracts -- -- -- 5,729 --
Other liabilities 62,196 110,177 38,277 60,924 38,948
----------- ------------ ----------- ----------- -----------
Total Liabilities 3,792,035 7,103,031 706,351 1,327,837 1,263,472
----------- ------------ ----------- ----------- -----------
NET ASSETS $44,566,156 $152,730,879 $20,135,987 $21,551,224 $22,098,023
----------- ------------ ----------- ----------- -----------
----------- ------------ ----------- ----------- -----------
* Investments, at cost $43,368,361 $130,096,268 $20,192,923 $21,397,275 $23,103,711
----------- ------------ ----------- ----------- -----------
----------- ------------ ----------- ----------- -----------
** Foreign currencies,
at cost $ -- $ -- $ -- $ -- $ --
----------- ------------ ----------- ----------- -----------
----------- ------------ ----------- ----------- -----------
NET ASSETS CONSIST OF:
Paid-in capital $43,982,463 $127,191,614 $20,537,821 $22,375,823 $23,593,938
Undistributed net
investment income
(loss) 258,374 (5,595) 32,148 20,525 48,430
Accumulated net realized
gain (loss) on
investments and foreign
currencies (1,553,207) 4,413,287 (441,718) (744,058) (5,964)
Net unrealized
appreciation
(depreciation) of
investments and of
other assets and
liabilities denominated
in foreign currencies 1,878,526 21,131,573 7,736 (101,066) (1,538,381)
----------- ------------ ----------- ----------- -----------
Net assets applicable to
all shares outstanding $44,566,156 $152,730,879 $20,135,987 $21,551,224 $22,098,023
----------- ------------ ----------- ----------- -----------
----------- ------------ ----------- ----------- -----------
Net Assets of
Institutional Shares $35,511,256 $152,730,879 $20,135,987 $17,385,368 $22,097,863
Net Assets of Retirement
Shares 9,054,900 NA NA 4,165,856 160
----------- ------------ ----------- ----------- -----------
----------- ------------ ----------- ----------- -----------
Institutional Shares
outstanding 1,543,494 4,600,969 1,613,861 1,431,040 1,920,018
Retirement Shares
outstanding 394,161 NA 342,443 14
----------- ------------ ----------- ----------- -----------
----------- ------------ ----------- ----------- -----------
Net Asset Value --
Institutional Share $ 23.01 $ 33.20 $ 12.48 $ 12.15 $ 11.51
Net Asset Value --
Retirement Share $ 22.97 NA NA $ 12.17 $ 11.43
----------- ------------ ----------- ----------- -----------
----------- ------------ ----------- ----------- -----------
</TABLE>
--------------------------------------------------------------------------------
101
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
STATEMENT OF OPERATIONS
PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
GLOBAL
WORLDWIDE GLOBAL GROWTH & GLOBAL GLOBAL
GROWTH BLUE CHIP INCOME TECHNOLOGY HEALTH CARE
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends, net of foreign
taxes* $ 620,544 $ 52,382 $ 20,673 $ 156,623 $ 140,102
Interest 92,279 1,675 29,576 214,404 249,706
Securities lending 167,424 80,997 5,843 184,640 59,745
------------ ----------- ----------- ------------ -----------
Total Income 880,247 135,054 56,092 555,667 449,553
------------ ----------- ----------- ------------ -----------
EXPENSES
Advisory fee 860,795 84,930 31,281 1,581,117 658,026
Accounting and
administration fees 43,690 23,221 23,669 56,888 34,058
Custodian fees 84,903 41,350 24,432 155,870 35,690
Transfer agent fees and
expenses 20,578 8,665 6,165 40,583 18,195
Distribution and
shareholder servicing
fees -- -- -- -- --
Administrative services 86,079 10,616 3,680 158,415 65,803
Professional fees 19,536 2,870 977 38,854 13,354
Shareholder reporting 2,693 381 142 5,022 2,646
Registration fees 10,887 2,673 943 17,083 22,170
Trustees' fees and
expenses 2,190 316 118 3,883 1,526
Interest and credit
facility fee 7,149 5,856 1,386 46,583 2,017
Insurance 113 -- -- 36 --
Miscellaneous 7,349 1,469 1,695 54,036 8,370
------------ ----------- ----------- ------------ -----------
Total Expenses 1,145,962 182,347 94,488 2,158,370 861,855
Expenses
(reimbursed)/recouped 24,039 (48,473) (41,840) 87,005 11,329
------------ ----------- ----------- ------------ -----------
Net Expenses 1,170,001 133,874 52,648 2,245,375 873,184
------------ ----------- ----------- ------------ -----------
NET INVESTMENT INCOME
(LOSS) (289,754) 1,180 3,444 (1,689,708) (423,631)
------------ ----------- ----------- ------------ -----------
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Realized gain (loss)
from:
Securities 9,255,431 1,512,171 203,817 (34,691,448) 8,974,017
Foreign currency
transactions (340,835) (31,819) (15,952) (532,033) (101,327)
------------ ----------- ----------- ------------ -----------
Net realized gain
(loss) 8,914,596 1,480,352 187,865 (35,223,481) 8,872,690
------------ ----------- ----------- ------------ -----------
Change in unrealized
appreciation
(depreciation) of:
Investments (28,484,590) (3,738,906) (1,006,055) (9,517,773) 36,673,533
Other assets and
liabilities
denominated in
foreign currencies (6,073) (387) (286) (217) (11)
------------ ----------- ----------- ------------ -----------
Net unrealized
appreciation
(depreciation) (28,490,663) (3,739,293) (1,006,341) (9,517,990) 36,673,522
------------ ----------- ----------- ------------ -----------
NET GAIN (LOSS) ON
INVESTMENTS (19,576,067) (2,258,941) (818,476) (44,741,471) 45,546,212
------------ ----------- ----------- ------------ -----------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS $(19,865,821) $(2,257,761) $ (815,032) $(46,431,179) $45,122,581
------------ ----------- ----------- ------------ -----------
------------ ----------- ----------- ------------ -----------
*Foreign taxes
withheld: $ 61,002 $ 2,753 $ 941 $ 19,507 $ 5,695
------------ ----------- ----------- ------------ -----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
102
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL INTERNATIONAL EMERGING PACIFIC LATIN LARGE CAP MID CAP
CORE GROWTH SMALL CAP GROWTH COUNTRIES RIM AMERICA GROWTH GROWTH
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends, net of foreign
taxes* $ 1,747,022 $ 660,443 $ 1,382,926 $ 1,636 $ 13,457 $ 98,415 $ 32,409
Interest 661,154 700,979 494,627 329 6,985 85,079 138,074
Securities lending 351,450 222,692 171,391 3,087 9,223 28,490 163,500
------------ ------------ ------------ --------- --------- ----------- ------------
Total Income 2,759,626 1,584,114 2,048,944 5,052 29,665 211,984 333,983
------------ ------------ ------------ --------- --------- ----------- ------------
EXPENSES
Advisory fee 1,546,441 1,288,605 1,730,843 13,101 28,358 490,698 822,211
Accounting and
administration fees 65,272 54,562 61,030 22,905 22,978 36,675 55,314
Custodian fees 124,907 138,348 280,470 58,024 16,594 20,790 34,499
Transfer agent fees and
expenses 32,379 27,363 28,834 5,767 6,001 18,455 27,325
Distribution and
shareholder servicing
fees 17,900 -- -- -- -- 100,967 17
Administrative services 154,644 128,860 138,984 1,298 2,269 65,426 109,629
Professional fees 35,103 30,303 33,765 694 684 14,151 24,053
Shareholder reporting 4,960 3,947 4,681 55 237 1,802 3,487
Registration fees 20,126 13,611 23,104 3,203 1,718 11,838 19,728
Trustees' fees and
expenses 3,733 2,996 3,223 54 79 1,444 2,618
Interest and credit
facility fee 1,777 1,451 35,682 7,729 662 1,643 4,212
Insurance 101 69 149 -- 2 17 107
Miscellaneous 17,581 22,966 35,867 856 905 9,565 13,028
------------ ------------ ------------ --------- --------- ----------- ------------
Total Expenses 2,024,924 1,713,081 2,376,632 113,686 80,487 773,471 1,116,228
Expenses
(reimbursed)/recouped 160,534 100,744 (38,554) (86,826) (41,608) (15,807) (14,847)
------------ ------------ ------------ --------- --------- ----------- ------------
Net Expenses 2,185,458 1,813,825 2,338,078 26,860 38,879 757,664 1,101,381
------------ ------------ ------------ --------- --------- ----------- ------------
NET INVESTMENT INCOME
(LOSS) 574,168 (229,711) (289,134) (21,808) (9,214) (545,680) (767,398)
------------ ------------ ------------ --------- --------- ----------- ------------
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Realized gain (loss)
from:
Securities (4,473,275) (2,341,598) (25,504,237) (289,974) (258,974) (2,397,894) 44,761,610
Foreign currency
transactions (1,078,860) (264,103) (355,785) (50,685) 4,121 -- --
------------ ------------ ------------ --------- --------- ----------- ------------
Net realized gain
(loss) (5,552,135) (2,605,701) (25,860,022) (340,659) (254,853) (2,397,894) 44,761,610
------------ ------------ ------------ --------- --------- ----------- ------------
Change in unrealized
appreciation
(depreciation) of:
Investments (44,636,485) (34,091,583) (56,210,160) (297,145) (610,479) (4,412,487) (49,252,844)
Other assets and
liabilities
denominated in
foreign currencies (18,212) (3,086) (4,156) (10) 8 -- --
------------ ------------ ------------ --------- --------- ----------- ------------
Net unrealized
appreciation
(depreciation) (44,654,697) (34,094,669) (56,214,316) (297,155) (610,471) (4,412,487) (49,252,844)
------------ ------------ ------------ --------- --------- ----------- ------------
NET GAIN (LOSS) ON
INVESTMENTS (50,206,832) (36,700,370) (82,074,338) (637,814) (865,324) (6,810,381) (4,491,234)
------------ ------------ ------------ --------- --------- ----------- ------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS $(49,632,664) $(36,930,081) $(82,363,472) $(659,622) $(874,538) $(7,356,061) $ (5,258,632)
------------ ------------ ------------ --------- --------- ----------- ------------
------------ ------------ ------------ --------- --------- ----------- ------------
*Foreign taxes
withheld: $ 177,762 $ 71,333 $ 116,214 $ (286) $ 1,910 $ 762 $ --
------------ ------------ ------------ --------- --------- ----------- ------------
<CAPTION>
SMALL CAP
GROWTH
<S> <C>
INVESTMENT INCOME
Dividends, net of foreign
taxes* $ 59,716
Interest 587,914
Securities lending 542,228
------------
Total Income 1,189,858
------------
EXPENSES
Advisory fee 1,268,137
Accounting and
administration fees 58,306
Custodian fees 106,203
Transfer agent fees and
expenses 30,934
Distribution and
shareholder servicing
fees 6,517
Administrative services 126,805
Professional fees 27,205
Shareholder reporting 4,255
Registration fees 22,500
Trustees' fees and
expenses 3,127
Interest and credit
facility fee 18,011
Insurance 164
Miscellaneous 15,640
------------
Total Expenses 1,687,804
Expenses
(reimbursed)/recouped (182,648)
------------
Net Expenses 1,505,156
------------
NET INVESTMENT INCOME
(LOSS) (315,298)
------------
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Realized gain (loss)
from:
Securities 16,525,696
Foreign currency
transactions --
------------
Net realized gain
(loss) 16,525,696
------------
Change in unrealized
appreciation
(depreciation) of:
Investments (49,862,749)
Other assets and
liabilities
denominated in
foreign currencies --
------------
Net unrealized
appreciation
(depreciation) (49,862,749)
------------
NET GAIN (LOSS) ON
INVESTMENTS (33,337,053)
------------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS $(33,652,351)
------------
------------
*Foreign taxes
withheld: $ 4,944
------------
</TABLE>
--------------------------------------------------------------------------------
103
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
STATEMENT OF OPERATIONS -- CONTINUED
PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
MINI CAP SHORT HIGH QUALITY HIGH YIELD
GROWTH VALUE CONVERTIBLE INTERMEDIATE BOND BOND
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends, net of foreign
taxes* $ 2,969 $ 351,621 $ 570,690 $ -- $ 4,376 $ 37
Interest 141,490 33,266 1,527,756 807,346 792,416 1,218,334
Securities lending 49,094 3,716 18,354 -- -- 3,716
------------ ---------- ----------- --------- --------- ----------
Total Income 193,553 388,603 2,116,800 807,346 796,792 1,222,087
------------ ---------- ----------- --------- --------- ----------
EXPENSES
Advisory fee 511,111 147,739 480,569 35,265 48,413 66,096
Accounting and
administration fees 25,264 27,417 32,287 23,289 32,052 23,239
Custodian fees 28,042 20,825 37,885 14,743 24,538 13,743
Transfer agent fees and
expenses 14,437 11,486 14,718 6,761 10,383 7,308
Distribution and
shareholder servicing
fees -- 10,291 -- -- 4,326 --
Administrative services 40,889 19,699 64,076 11,755 10,758 11,016
Professional fees 8,433 3,626 13,518 2,449 2,234 2,320
Shareholder reporting 1,397 303 2,047 345 259 368
Registration fees 20,029 11,865 5,163 7,252 10,578 5,793
Trustees' fees and
expenses 1,133 492 1,548 437 312 299
Interest and credit
facility fee 5,953 7,788 711 3,848 1,615 606
Insurance 122 -- 42 -- 16 10
Miscellaneous 4,730 2,491 11,011 1,763 1,854 3,080
------------ ---------- ----------- --------- --------- ----------
Total Expenses 661,540 264,022 663,575 107,907 147,338 133,878
Expenses
(reimbursed)/recouped (16,940) (48,190) (20,850) (62,568) (92,194) (49,875)
------------ ---------- ----------- --------- --------- ----------
Net Expenses 644,600 215,832 642,725 45,339 55,144 84,003
------------ ---------- ----------- --------- --------- ----------
NET INVESTMENT INCOME
(LOSS) (451,047) 172,771 1,474,075 762,007 741,648 1,138,084
------------ ---------- ----------- --------- --------- ----------
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Realized gain (loss)
from:
Securities 7,613,232 298,461 (2,685,006) (150,363) (203,347) (6,019)
Foreign currency
transactions -- -- -- 694 (26,984) --
------------ ---------- ----------- --------- --------- ----------
Net realized gain
(loss) 7,613,232 298,461 (2,685,006) (149,669) (230,331) (6,019)
------------ ---------- ----------- --------- --------- ----------
Change in unrealized
appreciation
(depreciation) of:
Investments (19,746,882) 1,951,173 3,368,803 268,102 377,496 (859,641)
Other assets and
liabilities
denominated in
foreign currencies -- -- -- -- (54,178) --
------------ ---------- ----------- --------- --------- ----------
Net unrealized
appreciation
(depreciation) (19,746,882) 1,951,173 3,368,803 268,102 323,318 (859,641)
------------ ---------- ----------- --------- --------- ----------
NET GAIN (LOSS) ON
INVESTMENTS (12,133,650) 2,249,634 683,797 118,433 92,987 (865,660)
------------ ---------- ----------- --------- --------- ----------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS $(12,584,697) $2,422,405 $ 2,157,872 $ 880,440 $ 834,635 $ 272,424
------------ ---------- ----------- --------- --------- ----------
------------ ---------- ----------- --------- --------- ----------
*Foreign taxes
withheld: $ -- $ -- $ -- $ -- $ 180 $ 468
------------ ---------- ----------- --------- --------- ----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
104
<PAGE>
(This page intentionally left blank)
--------------------------------------------------------------------------------
105
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
STATEMENT OF CHANGES IN NET ASSETS
PERIODS ENDED SEPTEMBER 30, 2000 AND MARCH 31, 2000
<TABLE>
<CAPTION>
WORLDWIDE GROWTH GLOBAL BLUE CHIP
-----------------------------------------------------------------
SEPTEMBER 30, SEPTEMBER 30,
2000 MARCH 31, 2000 MARCH 31,
(UNAUDITED) 2000(1) (UNAUDITED) 2000
---------------- -------------- ---------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income
(loss) $ (289,754) $ (753,976) $ 1,180 $ (130,041)
Net realized gain
(loss) 8,914,596 26,641,180 1,480,352 7,868,229
Net unrealized
appreciation
(depreciation) (28,490,663) 55,181,082 (3,739,293) 4,588,189
------------ ------------ ----------- -----------
Net increase
(decrease) in net
assets from
investment
operations (19,865,821) 81,068,286 (2,257,761) 12,326,377
------------ ------------ ----------- -----------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Institutional Class -- -- -- --
Retirement Class -- -- -- --
From net realized gains
Institutional Class -- -- -- (4,422,006)
Retirement Class -- -- -- --
------------ ------------ ----------- -----------
Total distributions -- -- -- (4,422,006)
------------ ------------ ----------- -----------
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares
sold
Institutional Class 10,996,629 146,406,133 4,018,436 10,550,201
Retirement Class -- -- -- --
Distributions
reinvested
Institutional Class -- -- -- 4,233,563
Retirement Class -- -- -- --
Cost of shares redeemed
Institutional Class (15,614,430) (38,743,819) (6,204,240) (8,360,095)
Retirement Class -- -- -- --
------------ ------------ ----------- -----------
Net increase
(decrease) in net
assets from share
transactions (4,617,801) 107,662,314 (2,185,804) 6,423,669
------------ ------------ ----------- -----------
Net Increase
(Decrease) in Net
Assets (24,483,622) 188,730,600 (4,443,565) 14,328,040
NET ASSETS
Beginning $188,730,600 $ -- $24,741,612 $10,413,572
------------ ------------ ----------- -----------
Ending $164,246,978 $188,730,600 $20,298,047 $24,741,612
------------ ------------ ----------- -----------
------------ ------------ ----------- -----------
Undistributed net
investment income
(loss), ending $ 461,305 $ (1,458) $ 124,071 $ (23,718)
------------ ------------ ----------- -----------
------------ ------------ ----------- -----------
INSTITUTIONAL CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 316,269 5,947,950 135,731 379,085
Distributions
reinvested -- -- -- 188,410
Shares redeemed (426,628) (1,071,221) (209,459) (300,726)
------------ ------------ ----------- -----------
Net Institutional Share
Activity (110,359) 4,876,729 (73,728) 266,769
------------ ------------ ----------- -----------
------------ ------------ ----------- -----------
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.
--------------------------------------------------------------------------------
106
<PAGE>
<TABLE>
<CAPTION>
GLOBAL GROWTH & INCOME GLOBAL TECHNOLOGY GLOBAL HEALTH CARE
----------------------------------------------------------------------------------------------------
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2000 MARCH 31, 2000 MARCH 31, 2000 MARCH 31,
(UNAUDITED) 2000 (UNAUDITED) 2000(2) (UNAUDITED) 2000(3)
---------------- -------------- ---------------- -------------- ---------------- --------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income
(loss) $ 3,444 $ 28,049 $ (1,689,708) (1,472,131) $ (423,631) $ (188,133)
Net realized gain
(loss) 187,865 2,195,646 (35,223,481) 95,422,851 8,872,690 17,760,882
Net unrealized
appreciation
(depreciation) (1,006,341) 872,764 (9,517,990) 54,283,446 36,673,522 2,864,271
----------- ----------- ------------ ------------ ------------ ------------
Net increase
(decrease) in net
assets from
investment
operations (815,032) 3,096,459 (46,431,179) 148,234,166 45,122,581 20,437,020
----------- ----------- ------------ ------------ ------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Institutional Class (6,645) (47,530) -- -- -- (9,347)
Retirement Class -- -- -- -- -- --
From net realized gains
Institutional Class -- (1,330,289) -- (15,053,000) -- --
Retirement Class -- -- -- -- -- --
----------- ----------- ------------ ------------ ------------ ------------
Total distributions (6,645) (1,377,819) -- (15,053,000) -- (9,347)
----------- ----------- ------------ ------------ ------------ ------------
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares
sold
Institutional Class 408,010 566,038 86,603,642 395,262,091 41,978,316 145,842,989
Retirement Class -- -- -- -- -- --
Distributions
reinvested
Institutional Class 6,645 1,362,502 -- 11,464,659 -- 8,402
Retirement Class -- -- -- -- -- --
Cost of shares redeemed
Institutional Class (2,595,048) (1,034,297) (139,897,351) (158,683,863) (44,681,061) (40,923,812)
Retirement Class -- -- -- -- -- --
----------- ----------- ------------ ------------ ------------ ------------
Net increase
(decrease) in net
assets from share
transactions (2,180,393) 894,243 (53,293,709) 248,042,887 (2,702,745) 104,927,579
----------- ----------- ------------ ------------ ------------ ------------
Net Increase
(Decrease) in Net
Assets (3,002,070) 2,612,883 (99,724,888) 381,224,053 42,419,836 125,355,252
NET ASSETS
Beginning $ 8,202,341 $ 5,589,458 $405,318,461 $ 24,094,408 $125,355,252 $ --
----------- ----------- ------------ ------------ ------------ ------------
Ending $ 5,200,271 $ 8,202,341 $305,593,573 $405,318,461 $167,775,088 $125,355,252
----------- ----------- ------------ ------------ ------------ ------------
----------- ----------- ------------ ------------ ------------ ------------
Undistributed net
investment income
(loss), ending $ 85,545 $ (590) $ (806,551) $ (314,873) $ 474,703 $ 350,427
----------- ----------- ------------ ------------ ------------ ------------
----------- ----------- ------------ ------------ ------------ ------------
INSTITUTIONAL CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 23,350 31,689 701,894 3,436,245 1,270,556 5,339,519
Distributions
reinvested 378 85,461 -- 135,503 -- 455
Shares redeemed (147,318) (56,394) (1,196,101) (1,194,324) (1,394,259) (1,284,521)
----------- ----------- ------------ ------------ ------------ ------------
Net Institutional Share
Activity (123,590) 60,756 (494,207) 2,377,424 (123,703) 4,055,453
----------- ----------- ------------ ------------ ------------ ------------
----------- ----------- ------------ ------------ ------------ ------------
RETIREMENT CLASS --
CAPITAL SHARE ACTIVITY
Shares sold -- -- -- -- -- --
Distributions
reinvested -- -- -- -- -- --
Shares redeemed -- -- -- -- -- --
----------- ----------- ------------ ------------ ------------ ------------
----------- ----------- ------------ ------------ ------------ ------------
Net Retirement Share
Activity -- -- -- -- -- --
----------- ----------- ------------ ------------ ------------ ------------
----------- ----------- ------------ ------------ ------------ ------------
<CAPTION>
INTERNATIONAL CORE GROWTH
--------------------------------
SEPTEMBER 30,
2000 MARCH 31,
(UNAUDITED) 2000(1)
---------------- --------------
<S> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
FROM INVESTMENT OPERATION
Net investment income
(loss) $ 574,168 $ (682,702)
Net realized gain
(loss) (5,552,135) 15,715,326
Net unrealized
appreciation
(depreciation) (44,654,697) 65,683,982
------------ ------------
Net increase
(decrease) in net
assets from
investment
operations (49,632,664) 80,716,606
------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Institutional Class -- (145,725)
Retirement Class -- (1,855)
From net realized gains
Institutional Class -- --
Retirement Class -- --
------------ ------------
Total distributions -- (147,580)
------------ ------------
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares
sold
Institutional Class 117,931,652 284,041,615
Retirement Class 5,598,984 25,716,559
Distributions
reinvested
Institutional Class -- 124,755
Retirement Class -- 1,855
Cost of shares redeemed
Institutional Class (83,012,126) (56,751,676)
Retirement Class (4,416,109) (14,594,931)
------------ ------------
Net increase
(decrease) in net
assets from share
transactions 36,102,401 238,538,177
------------ ------------
Net Increase
(Decrease) in Net
Assets (13,530,263) 319,107,203
NET ASSETS
Beginning $319,107,203 $ --
------------ ------------
Ending $305,576,940 $319,107,203
------------ ------------
------------ ------------
Undistributed net
investment income
(loss), ending $ 345,814 $ (529,318)
------------ ------------
------------ ------------
INSTITUTIONAL CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 4,070,765 11,515,928
Distributions
reinvested -- 3,880
Shares redeemed (2,863,243) (1,999,682)
------------ ------------
Net Institutional Share
Activity 1,207,522 9,520,126
------------ ------------
------------ ------------
RETIREMENT CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 197,328 964,480
Distributions
reinvested -- 58
Shares redeemed (154,961) (475,521)
------------ ------------
------------ ------------
Net Retirement Share
Activity 42,367 489,017
------------ ------------
------------ ------------
</TABLE>
--------------------------------------------------------------------------------
107
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
STATEMENT OF CHANGES IN NET ASSETS -- CONTINUED
PERIODS ENDED SEPTEMBER 30, 2000 AND MARCH 31, 2000
<TABLE>
<CAPTION>
INTERNATIONAL SMALL CAP GROWTH EMERGING COUNTRIES
------------------------------------------------------------------
SEPTEMBER 30, SEPTEMBER 30,
2000 MARCH 31, 2000 MARCH 31,
(UNAUDITED) 2000(1) (UNAUDITED) 2000(1)
---------------- -------------- ---------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income
(loss) $ (229,711) $ (958,516) $ (289,134) $ (1,228,652)
Net realized gain
(loss) (2,605,701) 53,440,757 (25,860,022) 24,972,913
Net unrealized
appreciation
(depreciation) (34,094,669) 63,919,524 (56,214,316) 66,497,503
------------ ------------ ------------ ------------
Net increase
(decrease) in net
assets from
investment
operations (36,930,081) 116,401,765 (82,363,472) 90,241,764
------------ ------------ ------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Institutional Class -- -- -- --
Retirement Class -- -- -- --
From net realized gains
Institutional Class -- (778,916) -- --
Retirement Class -- -- -- --
------------ ------------ ------------ ------------
Total distributions -- (778,916) -- --
------------ ------------ ------------ ------------
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares
sold
Institutional Class 93,257,564 233,012,381 78,723,580 235,356,729
Retirement Class -- -- -- 438
Distributions
reinvested
Institutional Class -- 712,206 -- --
Retirement Class -- -- -- --
Cost of shares redeemed
Institutional Class (49,253,396) (79,188,631) (14,127,663) (25,513,624)
Retirement Class -- -- (376) --
------------ ------------ ------------ ------------
Net increase
(decrease) in net
assets from share
transactions 44,004,168 154,535,956 64,595,541 209,843,543
------------ ------------ ------------ ------------
Net Increase
(Decrease) in Net
Assets 7,074,087 270,158,805 (17,767,931) 300,085,307
NET ASSETS
Beginning $270,158,805 $ -- $300,085,307 $ --
------------ ------------ ------------ ------------
Ending $277,232,892 $270,158,805 $282,317,376 $300,085,307
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Undistributed net
investment income
(loss), ending $ (1,095,100) $ (1,195,825) $ 359,306 $ (864,040)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
INSTITUTIONAL CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 2,056,801 6,870,154 3,920,480 13,836,324
Distributions
reinvested -- 20,147 -- --
Shares redeemed (1,078,104) (1,612,710) (715,345) (1,170,179)
------------ ------------ ------------ ------------
Net Institutional Share
Activity 978,697 5,277,591 3,205,135 12,666,145
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
RETIREMENT CLASS --
CAPITAL SHARE ACTIVITY
Shares sold -- -- -- 28
Distributions
reinvested -- -- -- --
Shares redeemed -- -- (18) --
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net Retirement Share
Activity -- -- (18) 28
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
------------------------------
(1) Commenced operations on 5/7/99.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
108
<PAGE>
<TABLE>
<CAPTION>
PACIFIC RIM LATIN AMERICA LARGE CAP GROWTH
-------------------------------------------------------------------------------------------------
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2000 MARCH 31, 2000 MARCH 31, 2000 MARCH 31,
(UNAUDITED) 2000 (UNAUDITED) 2000 (UNAUDITED) 2000(1)
---------------- ------------- ---------------- ------------ ---------------- --------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income
(loss) $ (21,808) $ (13,932) $ (9,214) $ 7,695 $ (545,680) $ (283,832)
Net realized gain
(loss) (340,659) 1,611,435 (254,853) 1,514,153 (2,397,894) 3,926,863
Net unrealized
appreciation
(depreciation) (297,155) 161,024 (610,471) 590,929 (4,412,487) 30,533,124
----------- ----------- ---------- ---------- ------------ ------------
Net increase
(decrease) in net
assets from
investment
operations (659,622) 1,758,527 (874,538) 2,112,777 (7,356,061) 34,176,155
----------- ----------- ---------- ---------- ------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Institutional Class -- -- -- -- -- --
Retirement Class -- -- -- -- -- --
From net realized gains
Institutional Class -- (290,076) -- -- -- --
Retirement Class -- -- -- -- -- --
----------- ----------- ---------- ---------- ------------ ------------
Total distributions -- (290,076) -- --
----------- ----------- ---------- ---------- ------------ ------------
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares
sold
Institutional Class 1,103,267 3,053,456 62,992 3,619,962 38,453,344 33,199,870
Retirement Class -- -- -- -- 9,525,711 64,848,074
Distributions
reinvested
Institutional Class -- 275,340 -- -- -- --
Retirement Class -- -- -- -- -- --
Cost of shares redeemed
Institutional Class (1,934,735) (2,075,329) (22,597) (2,230,193) (6,153,658) (4,706,518)
Retirement Class -- -- -- -- (4,395,023) (5,750,425)
----------- ----------- ---------- ---------- ------------ ------------
Net increase
(decrease) in net
assets from share
transactions (831,468) 1,253,467 40,395 1,389,769 37,430,374 87,591,001
----------- ----------- ---------- ---------- ------------ ------------
Net Increase
(Decrease) in Net
Assets (1,491,090) 2,721,918 (834,143) 3,502,546 30,074,313 121,767,156
NET ASSETS
Beginning $ 3,820,782 $ 1,098,864 $5,276,875 $1,774,329 $121,767,156 $ --
----------- ----------- ---------- ---------- ------------ ------------
Ending $ 2,329,692 $ 3,820,782 $4,442,732 $5,276,875 $151,841,469 $121,767,156
----------- ----------- ---------- ---------- ------------ ------------
----------- ----------- ---------- ---------- ------------ ------------
Undistributed net
investment income
(loss), ending $ 56,979 $ (8,934) $ (33,144) $ (6,720) $ (261,847) $ --
----------- ----------- ---------- ---------- ------------ ------------
----------- ----------- ---------- ---------- ------------ ------------
INSTITUTIONAL CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 50,112 141,141 3,449 269,455 817,801 891,596
Distributions
reinvested -- 14,607 -- -- -- --
Shares redeemed (89,483) (94,720) (1,268) (167,405) (133,524) (129,801)
----------- ----------- ---------- ---------- ------------ ------------
Net Institutional Share
Activity (39,371) 61,028 2,181 102,050 684,277 761,795
----------- ----------- ---------- ---------- ------------ ------------
----------- ----------- ---------- ---------- ------------ ------------
RETIREMENT CLASS --
CAPITAL SHARE ACTIVITY
Shares sold -- -- -- -- 203,386 1,826,395
Distributions
reinvested -- -- -- -- -- --
Shares redeemed -- -- -- -- (96,622) (143,113)
----------- ----------- ---------- ---------- ------------ ------------
----------- ----------- ---------- ---------- ------------ ------------
Net Retirement Share
Activity -- -- -- -- 106,764 1,683,282
----------- ----------- ---------- ---------- ------------ ------------
----------- ----------- ---------- ---------- ------------ ------------
<CAPTION>
MID CAP GROWTH
--------------------------------
SEPTEMBER 30,
2000 MARCH 31,
(UNAUDITED) 2000(1)
---------------- --------------
<S> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
FROM INVESTMENT OPERATION
Net investment income
(loss) $ (767,398) $ (935,954)
Net realized gain
(loss) 44,761,610 18,056,987
Net unrealized
appreciation
(depreciation) (49,252,844) 122,864,215
------------ ------------
Net increase
(decrease) in net
assets from
investment
operations (5,258,632) 139,985,248
------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Institutional Class -- --
Retirement Class -- --
From net realized gains
Institutional Class -- --
Retirement Class -- --
------------ ------------
Total distributions --
------------ ------------
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares
sold
Institutional Class 22,079,604 164,024,433
Retirement Class 5,947 15,448
Distributions
reinvested
Institutional Class -- --
Retirement Class -- --
Cost of shares redeemed
Institutional Class (28,772,175) (51,633,673)
Retirement Class (955) --
------------ ------------
Net increase
(decrease) in net
assets from share
transactions (6,687,579) 112,406,208
------------ ------------
Net Increase
(Decrease) in Net
Assets (11,946,211) 252,391,456
NET ASSETS
Beginning $252,391,456 $ --
------------ ------------
Ending $240,445,245 $252,391,456
------------ ------------
------------ ------------
Undistributed net
investment income
(loss), ending $ 168,556 $ --
------------ ------------
------------ ------------
INSTITUTIONAL CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 610,565 7,728,872
Distributions
reinvested -- --
Shares redeemed (787,923) (1,648,958)
------------ ------------
Net Institutional Share
Activity (177,358) 6,079,914
------------ ------------
------------ ------------
RETIREMENT CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 159 345
Distributions
reinvested -- --
Shares redeemed (25) --
------------ ------------
------------ ------------
Net Retirement Share
Activity 134 345
------------ ------------
------------ ------------
</TABLE>
--------------------------------------------------------------------------------
109
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
STATEMENT OF CHANGES IN NET ASSETS -- CONTINUED
PERIODS ENDED SEPTEMBER 30, 2000 AND MARCH 31, 2000
<TABLE>
<CAPTION>
SMALL CAP GROWTH MINI CAP GROWTH
------------------------------------------------------------------
SEPTEMBER 30, SEPTEMBER 30,
2000 MARCH 31, 2000 MARCH 31,
(UNAUDITED) 2000(1) (UNAUDITED) 2000
---------------- -------------- ---------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income
(loss) $ (315,298) $ (1,401,740) $ (451,047) $ (927,783)
Net realized gain
(loss) 16,525,696 38,511,301 7,613,232 42,644,433
Net unrealized
appreciation
(depreciation) (49,862,749) 120,080,481 (19,746,882) 22,774,301
------------ ------------ ------------ ------------
Net increase
(decrease) in net
assets from
investment
operations (33,652,351) 157,190,042 (12,584,697) 64,490,951
------------ ------------ ------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Institutional Class -- -- -- --
Retirement Class -- -- -- --
From net realized gains
Institutional Class -- (4,096,925) -- (12,874,595)
Retirement Class -- (59,712) -- --
------------ ------------ ------------ ------------
Total distributions -- (4,156,637) -- (12,874,595)
------------ ------------ ------------ ------------
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares
sold
Institutional Class 24,345,419 229,057,661 35,898,860 54,433,243
Retirement Class 1,186,012 4,632,423 -- --
Distributions
reinvested
Institutional Class -- 3,913,443 -- 11,152,871
Retirement Class -- 59,711 -- --
Cost of shares redeemed
Institutional Class (9,263,929) (107,190,111) (23,925,554) (78,574,475)
Retirement Class (764,843) (1,089,181) -- --
------------ ------------ ------------ ------------
Net increase
(decrease) in net
assets from share
transactions 15,502,659 129,383,946 11,973,306 (12,988,361)
------------ ------------ ------------ ------------
Net Increase
(Decrease) in Net
Assets (18,149,692) 282,417,351 (611,391) 38,627,995
NET ASSETS
Beginning $282,417,351 $ -- $ 92,221,035 $ 53,593,040
------------ ------------ ------------ ------------
Ending $264,267,659 $282,417,351 $ 91,609,644 $ 92,221,035
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Undistributed net
investment income
(loss), ending $ 1,086,442 $ -- $ 2,624,807 $ --
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
INSTITUTIONAL CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 1,063,535 15,406,294 989,434 1,627,656
Distributions
reinvested -- 199,564 -- 434,640
Shares redeemed (393,258) (5,374,314) (677,255) (2,542,833)
------------ ------------ ------------ ------------
Net Institutional Share
Activity 670,277 10,231,544 312,179 (480,537)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
RETIREMENT CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 51,640 275,474 -- --
Distributions
reinvested -- 3,045 -- --
Shares redeemed (33,124) (61,809) -- --
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net Retirement Share
Activity 18,516 216,710 -- --
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
------------------------------
(1) Commenced operations on 5/7/99.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
110
<PAGE>
<TABLE>
<CAPTION>
VALUE CONVERTIBLE SHORT INTERMEDIATE
----------------------------------------------------------------------------------------------------
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2000 MARCH 31, 2000 MARCH 31, 2000 MARCH 31,
(UNAUDITED) 2000(1) (UNAUDITED) 2000(1) (UNAUDITED) 2000
---------------- -------------- ---------------- -------------- ---------------- --------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income
(loss) $ 172,771 $ 302,320 $ 1,474,075 $ 1,126,144 $ 762,007 $ 1,131,755
Net realized gain
(loss) 298,461 (1,851,668) (2,685,006) 7,088,413 (149,669) (119,824)
Net unrealized
appreciation
(depreciation) 1,951,173 (72,647) 3,368,803 17,762,770 268,102 (344,348)
----------- ------------ ------------ ------------ ------------ ------------
Net increase
(decrease) in net
assets from
investment
operations 2,422,405 (1,621,995) 2,157,872 25,977,327 880,440 667,583
----------- ------------ ------------ ------------ ------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Institutional Class -- (180,191) (1,477,993) (1,117,941) (764,469) (1,133,472)
Retirement Class -- (36,526) -- -- -- --
From net realized gains
Institutional Class -- -- -- -- -- --
Retirement Class -- -- -- -- -- --
----------- ------------ ------------ ------------ ------------ ------------
Total distributions -- (216,717) (1,477,993) (1,117,941) (764,469) (1,133,472)
----------- ------------ ------------ ------------ ------------ ------------
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares
sold
Institutional Class 17,310,104 39,557,331 43,520,893 143,946,204 65,361,496 31,550,914
Retirement Class 1,728,872 10,605,176 -- -- -- --
Distributions
reinvested
Institutional Class -- 162,222 1,408,874 670,389 759,683 531,578
Retirement Class -- 36,526 -- -- -- --
Cost of shares redeemed
Institutional Class (6,913,608) (14,894,948) (7,533,854) (54,820,892) (67,237,472) (28,947,587)
Retirement Class (866,931) (2,742,281) -- -- -- --
----------- ------------ ------------ ------------ ------------ ------------
Net increase
(decrease) in net
assets from share
transactions 11,258,437 32,724,026 37,395,913 89,795,701 (1,116,293) 3,134,905
----------- ------------ ------------ ------------ ------------ ------------
Net Increase
(Decrease) in Net
Assets 13,680,842 30,885,314 38,075,792 114,655,087 (1,000,322) 2,669,016
NET ASSETS
Beginning $30,885,314 $ -- $114,655,087 $ -- $ 21,136,309 $ 18,467,293
----------- ------------ ------------ ------------ ------------ ------------
Ending $44,566,156 $ 30,885,314 $152,730,879 $114,655,087 $ 20,135,987 $ 21,136,309
----------- ------------ ------------ ------------ ------------ ------------
----------- ------------ ------------ ------------ ------------ ------------
Undistributed net
investment income
(loss), ending $ 258,374 $ 85,603 $ (5,595) $ 3,263 $ 32,148 $ 14,956
----------- ------------ ------------ ------------ ------------ ------------
----------- ------------ ------------ ------------ ------------ ------------
INSTITUTIONAL CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 793,126 1,756,417 1,395,091 5,721,713 5,234,028 2,460,442
Distributions
reinvested -- 7,193 43,493 37,603 61,080 83,059
Shares redeemed (315,965) (697,277) (243,084) (2,353,847) (5,380,390) (2,295,789)
----------- ------------ ------------ ------------ ------------ ------------
Net Institutional Share
Activity 477,161 1,066,333 1,195,500 3,405,469 (85,282) 247,712
----------- ------------ ------------ ------------ ------------ ------------
----------- ------------ ------------ ------------ ------------ ------------
RETIREMENT CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 80,184 480,770 -- -- -- --
Distributions
reinvested -- 1,620 -- -- -- --
Shares redeemed (40,249) (128,165) -- -- -- --
----------- ------------ ------------ ------------ ------------ ------------
----------- ------------ ------------ ------------ ------------ ------------
Net Retirement Share
Activity 39,935 354,225 -- -- -- --
----------- ------------ ------------ ------------ ------------ ------------
----------- ------------ ------------ ------------ ------------ ------------
<CAPTION>
HIGH QUALITY BOND
-------------------------------
SEPTEMBER 30,
2000 MARCH 31,
(UNAUDITED) 2000(1)
---------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
FROM INVESTMENT OPERATION
Net investment income
(loss) $ 741,648 $ 1,251,519
Net realized gain
(loss) (230,331) (495,907)
Net unrealized
appreciation
(depreciation) 323,318 (424,384)
------------ -----------
Net increase
(decrease) in net
assets from
investment
operations 834,635 331,228
------------ -----------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Institutional Class (605,865) (1,094,677)
Retirement Class (140,031) (149,889)
From net realized gains
Institutional Class -- --
Retirement Class -- --
------------ -----------
Total distributions (745,896) (1,244,566)
------------ -----------
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares
sold
Institutional Class 8,594,287 24,431,234
Retirement Class 1,577,824 3,758,674
Distributions
reinvested
Institutional Class 604,894 1,093,702
Retirement Class 140,029 149,887
Cost of shares redeemed
Institutional Class (11,803,225) (4,797,271)
Retirement Class (370,549) (1,003,663)
------------ -----------
Net increase
(decrease) in net
assets from share
transactions (1,256,740) 23,632,563
------------ -----------
Net Increase
(Decrease) in Net
Assets (1,168,001) 22,719,225
NET ASSETS
Beginning $ 22,719,225 $ --
------------ -----------
Ending $ 21,551,224 $22,719,225
------------ -----------
------------ -----------
Undistributed net
investment income
(loss), ending $ 20,525 $ 15,863
------------ -----------
------------ -----------
INSTITUTIONAL CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 709,993 1,950,011
Distributions
reinvested 50,134 90,095
Shares redeemed (973,773) (395,420)
------------ -----------
Net Institutional Share
Activity (213,646) 1,644,686
------------ -----------
------------ -----------
RETIREMENT CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 129,587 303,597
Distributions
reinvested 11,591 10,619
Shares redeemed (30,510) (82,441)
------------ -----------
------------ -----------
Net Retirement Share
Activity 110,668 231,775
------------ -----------
------------ -----------
</TABLE>
--------------------------------------------------------------------------------
111
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
STATEMENT OF CHANGES IN NET ASSETS -- CONTINUED
PERIODS ENDED SEPTEMBER 30, 2000 AND MARCH 31, 2000
<TABLE>
<CAPTION>
HIGH YIELD BOND
-------------------------------
SEPTEMBER 30,
2000 MARCH 31,
(UNAUDITED) 2000(1)
---------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income
(loss) $ 1,138,084 $ 1,423,836
Net realized gain
(loss) (6,019) 55
Net unrealized
appreciation
(depreciation) (859,641) (678,740)
----------- -----------
Net increase
(decrease) in net
assets from
investment
operations 272,424 745,151
----------- -----------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income
Institutional Class (1,114,931) (1,398,556)
Retirement Class (3) --
From net realized gains
Institutional Class -- --
Retirement Class -- --
----------- -----------
Total distributions (1,114,934) (1,398,556)
----------- -----------
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares
sold
Institutional Class 3,987,152 24,021,970
Retirement Class 162 --
Distributions
reinvested
Institutional Class 684,841 953,475
Retirement Class 2 --
Cost of shares redeemed
Institutional Class (3,283,268) (2,770,396)
Retirement Class -- --
----------- -----------
Net increase
(decrease) in net
assets from share
transactions 1,388,889 22,205,049
----------- -----------
Net Increase
(Decrease) in Net
Assets 546,379 21,551,644
NET ASSETS
Beginning $21,551,644 $ --
----------- -----------
Ending $22,098,023 $21,551,644
----------- -----------
----------- -----------
Undistributed net
investment income
(loss), ending $ 48,430 $ 25,280
----------- -----------
----------- -----------
INSTITUTIONAL CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 334,718 1,951,452
Distributions
reinvested 58,252 78,264
Shares redeemed (275,761) (226,907)
----------- -----------
Net Institutional Share
Activity 117,209 1,802,809
----------- -----------
----------- -----------
RETIREMENT CLASS --
CAPITAL SHARE ACTIVITY
Shares sold 14 --
Distributions
reinvested -- --
Shares redeemed -- --
----------- -----------
----------- -----------
Net Retirement Share
Activity 14 --
----------- -----------
----------- -----------
</TABLE>
------------------------------
(1) Commenced operations on 5/7/99.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
112
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
------------------------------------------------------------------------
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 eight 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 the
Investment Adviser 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
--------------------------------------------------------------------------------
113
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED) -- 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
September 30, 2000 were:
<TABLE>
<CAPTION>
MARKET VALUE COLLATERAL
FUND (IN 000'S) (IN 000'S)
---- ------------ -----------
<S> <C> <C>
Worldwide Growth.......................... $13,262 $14,109
Global Blue Chip.......................... 736 754
Global Growth & Income.................... 296 303
Global Technology......................... 31,527 32,951
International Core Growth................. 32,059 34,744
International Small Cap Growth............ 39,623 41,723
Emerging Countries........................ 22,062 23,362
Pacific Rim............................... 9 10
Latin America............................. 1,153 1,224
Large Cap Growth.......................... 14,004 14,565
Mid Cap Growth............................ 19,061 19,574
Small Cap Growth.......................... 27,289 29,142
Mini Cap Growth........................... 9,511 10,154
Global Health Care........................ 11,931 12,344
Value..................................... 520 537
</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
--------------------------------------------------------------------------------
114
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED) -- CONTINUED
--------------------------------------------------------------------------------
commitment fee plus interest on its specific borrowings. During the period, none
of the Funds had made use of the credit facility.
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.
NICHOLAS-APPLEGATE SOUTHEAST ASIA FUND, LTD.
The Emerging Countries Fund, Global Technology Fund, and International Small
Cap Growth Fund invest in the Indian stock markets through Nicholas-Applegate
Southeast Asia Fund Ltd., a limited life company incorporated under the laws of
Mauritius (the "Mauritius Subsidiary"). The Mauritius Subsidiary is entitled to
benefit from the double taxation treaty between India and Mauritius and invest
in India in what the Investment Adviser considers to be the most efficient way
currently available. Each Fund holds a 100% interest in a separate class of
securities issued by the Mauritius Subsidiary, represented by a separate
underlying portfolio of securities. The accounts of the Mauritius Subsidiary are
reflected in the Funds using consolidation accounting principles.
--------------------------------------------------------------------------------
115
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED) -- CONTINUED
--------------------------------------------------------------------------------
NOTE C -- TRANSACTIONS WITH AFFILIATES
Nicholas-Applegate Capital Management, as the Investment Adviser 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 Adviser has entered into an agreement with Criterion Investment
Management LLC ("the subadviser"). The agreeement states that the subadviser
will receive a fee paid by the adviser at an annualized rate of 0.25% of each of
the Fund's daily net assets.
Under an Administrative Services agreement the Investment Adviser provides
operational support services to the Funds at an annual fee on average daily net
assets of 0.10%.
The Investment Adviser has agreed to limit the Funds' expenses to certain
levels through March 31, 2001. Expenses reimbursed by the Investment Adviser
prior to July 24, 1998 may be recouped from the Funds within five years of that
date. Expenses reimbursed by the Investment Adviser 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 Adviser will recover such reimbursements to the extent of the
differences between a Fund's actual expenses (exclusive of interest expense,
taxes, brokerage, and the cost of establishing and maintaining The Mauritius
investment company) when they fall below the limit, and the voluntary limit.
<TABLE>
<CAPTION>
EXPENSE LIMIT
-------------------------- UNREIMBURSED
INSTITUTIONAL RETIREMENT AMOUNTS AT
FUND CLASS CLASS 9/30/00
----------------------------- ------------- ---------- -------------
<S> <C> <C> <C>
Worldwide Growth............. 1.35% -- $ 302,854
Global Blue Chip............. 1.20% -- 303,044
Global Growth & Income....... 1.35% -- 358,363
Global Technology............ 1.40% -- 0
Global Health Care........... 1.40% -- 0
International Core Growth.... 1.40% 1.65% 75,687
International Small Cap
Growth...................... 1.40% -- 611,150
Emerging Countries........... 1.65% 1.90% 1,060,124
Pacific Rim.................. 1.40% -- 346,426
Latin America................ 1.65% -- 261,986
Large Cap Growth............. 1.00% 1.25% 155,163
Mid Cap Growth............... 1.00% 1.25% 964,970
Small Cap Growth............. 1.17% 1.42% 1,833,701
Mini Cap Growth.............. 1.56% -- 607,507
Value........................ 1.00% 1.25% 360,134
Convertible.................. 1.00% -- 692,015
Short Intermediate........... 0.35% -- 669,303
High Quality Bond............ 0.45% 0.70% 701,291
High Yield Bond.............. 0.75% 1.00% 178,507
</TABLE>
Certain officers of the Trust are also officers of the Investment Adviser and
Distributor. The Trustees who are not affiliated with the Investment Adviser
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 six months ended September 30, 2000 to
indicate the volume of transactions in each Fund.
--------------------------------------------------------------------------------
116
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED) -- CONTINUED
--------------------------------------------------------------------------------
The tax cost of securities held at September 30, 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
UNREALIZED UNREALIZED APPRECIATION
PURCHASES SALES TAX COST APPRECIATION DEPRECIATION (DEPRECIATION)
FUND (IN 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...... $165,018 $166,911 $136,862 $32,083 $5,393 $26,690
Global Blue Chip...... 39,079 40,961 18,063 3,117 716 2,401
Global Growth &
Income............... 11,514 13,581 4,581 729 166 563
Global Technology..... 618,506 671,248 257,626 66,820 17,697 49,123
Global Health Care.... 467,820 471,699 132,103 39,862 324 39,538
International Core
Growth............... 385,598 344,637 290,525 34,827 13,798 21,029
International Small
Cap Growth........... 249,090 208,377 248,609 45,961 16,136 29,825
Emerging Countries.... 338,990 267,052 270,987 30,025 19,742 10,283
Pacific Rim........... 22,114 22,721 2,308 180 172 8
Latin America......... 10,905 11,044 4,353 364 98 266
Large Cap Growth...... 119,453 82,003 129,221 30,777 4,656 26,121
Mid Cap Growth........ 164,095 170,085 167,811 78,259 4,648 73,611
Small Cap Growth...... 117,696 109,450 197,792 88,787 18,569 70,218
Mini Cap Growth....... 48,486 43,750 74,513 26,923 9,610 17,313
Value................. 37,552 27,219 43,368 4,944 3,065 1,879
Convertible........... 104,015 63,731 130,096 27,455 6,323 21,132
Short Intermediate.... 52,222 50,533 20,193 109 101 8
High Quality Bond..... 32,374 33,762 21,397 305 406 (101)
High Yield Bond....... 14,000 12,362 23,104 207 1,745 (1,538)
</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 Core Growth Fund had a redemption-in-kind valued at
$705,310.
NOTE E -- FINANCIAL INSTRUMENTS
During the period, several of the Funds have been party to financial
instruments with off-balance sheet risks, including forward foreign currency
contracts and futures contracts, primarily in an attempt to minimize the risk to
the Fund, in respect of its portfolio transactions. These instruments involve
market and/or credit risk in excess of the amount recognized in the Statement of
Assets and Liabilities. Risks arise from the possible inability of
counterparties to meet the terms of their contracts and from unexpected movement
in currencies, securities values and interest rates. The contract amounts
indicate the extent of the Funds' involvement in such contracts.
FORWARDS
When entering a forward currency contract, the Fund agrees to receive or
deliver a fixed quantity of foreign currency for an agreed upon price on an
agreed upon future date.
At September 30, 2000, High Quality Bond had outstanding forward contracts for
the purchase and sale of currencies as set out below. The contracts are reported
in the financial statements at the Fund's net equity, as measured by the
difference between the forward foreign exchange rates at the dates of entry into
the contracts and the forward rates at the reporting date, or the date an
offsetting position, if any, has been entered into.
<TABLE>
<CAPTION>
NET
UNREALIZED
LOCAL SETTLEMENT MARKET APPRECIATION/
CURRENCY DATE VALUE (DEPRECIATION)
-------- ---------------- -------- --------------
US$ US$
<S> <C> <C> <C> <C>
HIGH QUALITY BOND
To Buy:
European Euro........................ 118,000 November 8, 2000 104,322 (6,285)
European Euro........................ 100,000 November 8, 2000 88,408 (2,672)
To Sell:
European Euro........................ 200,000 November 8, 2000 (176,816) 6,809
European Euro........................ 380,000 November 8, 2000 (335,951) 3,237
European Euro........................ 350,000 November 8, 2000 (309,428) (6,818)
------
Net equity in foreign currency
exchange contracts.................. (5,729)
======
</TABLE>
--------------------------------------------------------------------------------
117
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED) -- CONTINUED
--------------------------------------------------------------------------------
FUTURES
At September 30, 2000, High Quality Bond had outstanding futures contracts as
follows:
<TABLE>
<CAPTION>
MATURITY VALUE AT UNREALIZED
UNITS DATE OPEN VALUE 9/30/2000 GAIN (LOSS)
----------- ---------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C>
United States Treasury Bonds 6 12/01/00 $590,250 $591,938 $ 1,688
United States Treasury Bonds 7 12/01/00 $702,844 $690,594 (12,250)
United States Treasury Bonds 6 12/01/00 $586,688 $591,938 5,250
-----------
Total Futures $ (5,312)
===========
</TABLE>
At September 30, 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 9/30/2000
--------- ---------
<S> <C> <C>
United States Treasury Notes, 5.75%,
11/15/2000 $149,361 $149,859
--------
Total collateral for futures contracts $149,859
========
</TABLE>
--------------------------------------------------------------------------------
118
<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-
I N S T I T U T I O N A L F U N D S
600 West Broadway
San Diego, California 92101
800 - 551 - 8643
Nicholas-Applegate Securities, Distributor
SEMIANN900INST
<PAGE>
NICHOLAS|APPLEGATE-REGISTERED TRADEMARK-
INSTITUTIONAL FUNDS
SEMI-ANNUAL REPORT
(Unaudited)
RETIREMENT SHARES
SEPTEMBER 30, 2000
<PAGE>
LETTER TO SHAREHOLDERS
------------------------------------------------------------------------
DEAR FELLOW SHAREHOLDER:
Focus on the developments taking place around the world today, and it's apparent
that powerful changes are reshaping the global investment landscape. These
dynamic forces presented opportunities and challenges for investors during the
six-month period ended September 30, 2000.
In the United States, concerns about the pace of economic growth and the
impact of higher interest rates, rising oil prices and a weak euro on corporate
earnings sent stock prices lower. Technology issues suffered the brunt of the
market's decline, as investors tried to reconcile lofty valuations with
expectations for a deceleration in earnings growth. During the period, the US
Federal Reserve raised interest rates by half a percentage point in May. Amid
mounting evidence of a slowdown in domestic economic growth, US fixed income
investors became confident that the rate increase in May was the last in the
Federal Reserve's round of tightening. As a result, bond prices climbed higher
during the period.
The majority of international equity markets moved in tandem with the US
market and were affected by similar themes. In both developed and emerging
foreign countries, worries about the faltering euro, higher energy costs and
rising interest rates overshadowed positive factors such as ongoing reform and
restructuring efforts -- which are designed to increase competitiveness and
enhance shareholder value. Not all of the world's equity markets registered
losses, however. Israel, Canada and China are examples of countries where equity
prices trekked higher during the period.
Several positive milestone events took place in various countries around the
globe. Germany and France announced wide-sweeping tax reform packages designed
to stimulate economic growth and investment. China made significant progress
toward transforming itself into a market-driven economy within the World Trade
Organization.
And Mexico ended 71 years of one-party rule by electing a new president with
substantial private sector experience.
In June, a partnership of scientists from around the world announced they had
completed an initial sequencing of the human genome, the genetic blueprint for
mankind. This historic achievement marked a turning point for genomics -- the
study of the structure and function of genes -- and sparked heightened investor
interest in biotechnology stocks.
With the goal of aligning with a global leader in the financial services
industry, Nicholas-Applegate Capital Management agreed in October to be acquired
by Allianz AG, one of the world's leading insurance and asset management
companies. The transaction was negotiated with our clients foremost in mind and
it promises to bring significant client benefits. It provides access to a
greater depth of resources while preserving operational autonomy. This will
enable us to retain the information edge and the client focus that are hallmarks
of Nicholas-Applegate. We will be able to improve the depth and breadth of our
product offerings, continue to hire and train the best people in the industry
and to provide strong results for our clients. Finally, the transaction provides
long-term contracts for partners and financial incentives for all employees,
assuring continuity of our investment philosophy, process and culture.
On behalf of everyone at Nicholas-Applegate, we appreciate the opportunity to
contribute to your financial success, and thank you for your continued
participation in the Nicholas-Applegate Institutional Funds.
Best Regards,
/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.................................................... 6
Large Cap Growth...................................................... 11
Mid Cap Growth........................................................ 14
Small Cap Growth...................................................... 18
Value................................................................. 25
High Quality Bond..................................................... 29
High Yield Bond....................................................... 35
The Funds'
Financial Highlights.................................................. 40
Statement of Assets and Liabilities................................... 42
Statement of Operations............................................... 44
Statement of Changes in Net Assets.................................... 46
Notes to Financial Statements......................................... 49
</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, Partner, Portfolio Manager; LAWRENCE S. SPEIDELL, CFA, Partner,
Director of Quantitative Research and Portfolio Management; CHRISTOPHER
ANGIOLETTI, Portfolio Manager; MELISA GRIGOLITE, Portfolio Manager; PEDRO V.
MARCAL, Partner, Portfolio Manager; ERNESTO RAMOS, PH.D., Partner, Portfolio
Manager; JON BORCHARDT, Investment Analyst; CHRISTOPHER A. HERRERA, Investment
Analyst; DAVID LOPEZ, Investment Analyst; JACOB POZHARNY, PH.D., Investment
Analyst; ERIC SAGMEISTER, 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: Reflecting US stock market activity, international
equities -- led by technology issues -- traded lower during the six-month period
ended September 30, 2000.
In Europe, favorable developments such as the announcement of tax reforms in
Germany and France did little to inspire investors. Instead, worries about
rising oil prices, a falling euro and diminished corporate earnings visibility
sent bourses lower. Attempting to combat inflationary pressures brought on by
higher energy costs and a weakening currency, the European Central Bank (ECB)
raised short-term interest rates a total of 1%. In late September, the ECB, US
Federal Reserve and the Bank of Japan (BOJ) intervened to prop up the faltering
euro.
In Japan, stocks also posted losses, amid mixed reports of the country's
economic health. In August, the BOJ raised interest rates for the first time in
over 10 years, prompting concerns that higher rates might threaten the country's
fragile economy.
PERFORMANCE: The Fund's value declined 15.0% during the six-month period ended
September 30, 2000, compared to its MSCI EAFE Index benchmark, which fell 11.7%.
PORTFOLIO SPECIFICS: The Fund modestly lagged its benchmark this period. The
majority of the shortfall occurred in April and May, when markets worldwide fell
under pressure from high valuations in technology stocks. The resulting
correction was most pronounced in telecommunications, electronics, software,
semiconductors, computers and other technology industries. Investor sentiment
was undiscriminating with financial markets punishing the deserving along with
the many fundamentally sound and growing companies in these industries.
Exposure to Canadian stocks, which currently have a zero weighting in the
Fund's benchmark, helped performance since the MSCI Canada Index gained 7.3%
during the period. Stock selection within the health care and energy sectors
also benefited the Fund.
During the period, on a stock-by-stock basis, we reduced exposure to
technology and telecommunication services companies and increased holdings in
financial services and energy.
MARKET OUTLOOK: Near term, we expect oil prices, the euro and weakness in the
technology sector to continue to weigh on developed non-US stock markets. We
remain excited about longer-term prospects for international markets, however,
as tax and pension reform, corporate restructuring and the technology revolution
transform the global investment landscape.
--------------------------------------------------------------------------------
1
<PAGE>
INTERNATIONAL CORE GROWTH FUND RETIREMENT SHARES -- UNAUDITED
------------------------------------------------------------------------
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
20.00% As of 9/30/00 24.04%
</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
01/97 274,481.33 240,743.38
02/97 277,178.42 244,691.57
03/97 282,365.15 245,572.46
04/97 286,307.05 246,873.99
05/97 312,863.07 262,945.49
06/97 330,705.39 277,433.78
07/97 351,867.22 281,928.21
08/97 333,402.49 260,868.17
09/97 357,883.82 275,476.79
10/97 328,215.77 254,292.63
11/97 324,481.33 251,698.84
12/97 328,838.17 253,888.62
01/98 340,871.37 265,491.33
02/98 364,107.88 282,527.91
03/98 385,684.65 291,229.77
04/98 396,887.97 293,536.31
05/98 406,639.00 292,112.66
06/98 411,203.32 294,332.71
07/98 429,460.58 297,305.47
08/98 367,842.32 260,469.33
09/98 350,207.47 252,472.92
10/98 356,639.00 278,780.60
11/98 378,008.30 293,054.16
12/98 398,755.19 304,600.50
01/99 414,107.88 303,686.69
02/99 396,887.97 296,458.95
03/99 409,543.57 308,821.29
04/99 424,273.86 321,328.55
05/99 408,091.29 304,780.45
06/99 440,248.96 316,663.84
07/99 454,356.85 326,068.76
08/99 461,410.79 327,258.91
09/99 468,257.26 330,554.41
10/99 498,962.66 342,950.20
11/99 563,485.48 354,866.00
12/99 672,482.42 386,715.78
01/00 624,551.71 362,144.25
02/00 700,286.38 371,893.17
03/00 660,655.36 386,309.23
04/00 606,084.90 365,980.48
05/00 573,716.10 357,041.78
06/00 604,424.96 371,002.11
07/00 577,658.46 355,447.96
08/00 600,690.10 358,533.25
9/30/00 561,889.05 341,075.55
</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 SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
INTERNATIONAL CORE GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
---------------------------------------------------------------
COMMON STOCK & EQUIVALENTS -- 93.9%
---------------------------------------------------------------
BRAZIL -- 1.7%
Petroleo Brasileiro S.A. --
ADR*........................... 86,600 $ 2,603,413
Tele Norte Leste Participacoes
S.A. -- ADR.................... 66,323 1,517,139
Telecomunicacoes Brasileiras
S.A............................ 13,100 1,036,538
Telesp Celular Participacoes
S.A. -- Rts.*.................. 680 0
------------
5,157,090
------------
CANADA -- 8.4%
Abitibi-Consolidated, Inc........ 207,000 1,940,625
Alberta Energy Co., Ltd.......... 61,700 2,560,923
Anderson Exploration, Ltd.*...... 117,900 2,578,034
Ballard Power Systems, Inc.*..... 16,200 1,770,103
Biovail Corp.*................... 57,100 4,650,081
Bombardier, Inc. -- Cl. B........ 129,100 2,230,892
Celestica, Inc.*................. 60,400 4,160,880
Magna International, Inc. Cl.
A.............................. 8,200 356,972
Nortel Networks Corp............. 67,300 4,008,556
Precision Drilling Corp.*........ 41,100 1,464,188
------------
25,721,254
------------
DENMARK -- 1.1%
Novo Nordisk AS Cl. B............ 15,300 3,393,284
------------
FINLAND -- 1.2%
Elisa Communications OYJ......... 42,155 1,506,215
Nokia OYJ -- ADR................. 51,600 2,054,325
------------
3,560,540
------------
FRANCE -- 8.6%
Accor S.A........................ 43,300 1,607,116
Alcatel.......................... 41,100 2,629,480
Aventis S.A...................... 29,100 2,182,740
Axa -- Rts.*..................... 4 6
France Telecom S.A............... 27,000 2,892,495
Group Danone..................... 8,200 1,125,936
Sanofi-Synthelabo S.A............ 91,800 4,933,443
Schneider Electric S.A........... 37,200 2,343,858
Societe Television Francaise 1... 46,800 2,684,413
Total Fina Elf S.A............... 20,007 2,927,228
Vivendi Environnement*........... 84,400 3,128,109
------------
26,454,824
------------
GERMANY -- 3.5%
Bayerische Motoren Werke AG...... 94,000 3,210,177
Dresdner Bank AG................. 86,200 3,753,916
Intershop Communications AG*..... 19,500 1,269,934
Veba AG*......................... 49,300 2,540,679
------------
10,774,706
------------
GREECE -- 0.9%
Alpha Bank S.A................... 68,900 2,723,993
------------
HONG KONG -- 4.1%
Cheung Kong (Holdings), Ltd...... 299,000 3,604,789
China Mobile (Hong Kong),
Ltd.*.......................... 126,000 840,339
Citic Pacific, Ltd............... 157,000 678,595
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
Hong Kong (Continued)
HSBC Holdings PLC................ 242,800 $ 3,409,916
Hutchison Whampoa, Ltd........... 294,600 3,910,695
------------
12,444,334
------------
IRELAND -- 1.8%
Allied Irish Banks PLC........... 219,700 2,369,144
Elan Corp. PLC*.................. 57,300 3,137,175
------------
5,506,319
------------
ISRAEL -- 1.7%
Teva Pharmaceutical Industries,
Ltd. -- ADR.................... 71,700 5,247,544
------------
ITALY -- 5.9%
Alleanza Assicurazioni SpA....... 304,700 4,033,238
Edison SpA*...................... 304,600 2,997,056
ENI SpA.......................... 421,700 2,232,775
Finmeccanica SpA*................ 2,347,800 2,780,377
Mediaset SpA*.................... 181,400 2,702,090
Riunione Adriatica di Sicurta
SpA............................ 253,500 3,333,146
------------
18,078,682
------------
JAPAN -- 17.7%
Daikin Industries, Ltd........... 99,000 1,910,189
FANUC, Ltd....................... 36,800 4,069,590
Fujitsu, Ltd..................... 103,000 2,392,467
Furukawa Electric Co., Ltd....... 96,000 2,651,860
Hitachi, Ltd..................... 137,000 1,589,839
Hoya Corp........................ 9,700 760,309
Itochu Techno-Science Corp....... 14,400 2,638,534
Konami Co., Ltd.................. 44,000 3,632,056
Mitsubishi Electric Corp......... 406,000 3,362,669
Mitsui Fudosan Co., Ltd.......... 174,000 2,180,233
NEC Corp......................... 114,000 2,589,950
Nippon Sheet Glass Co., Ltd...... 183,000 2,938,229
Nippon Telegraph and Telephone
Corp........................... 119 1,167,314
Nomura Securities Co., Ltd....... 110,000 2,392,190
NTT DoCoMo, Inc.................. 82 2,352,397
Pioneer Electronics Corp......... 91,000 3,705,349
Sanyo Electric Co., Ltd.......... 367,000 3,226,448
Sony Corp........................ 33,900 3,438,311
Sony Corp. -- ADR................ 10,700 1,080,031
Toshiba Corp..................... 484,000 3,901,203
Trend Micro, Inc.*............... 15,000 2,014,159
------------
53,993,327
------------
MEXICO -- 0.5%
Telefonos de Mexico S.A.
Series L -- ADR................ 27,100 1,441,381
------------
NETHERLANDS -- 5.4%
Akzo Nobel N.V................... 40,800 1,720,989
ASM Lithography Holding N.V. --
ADR*........................... 98,100 3,169,855
Koninklijke Ahold N.V............ 50,500 1,431,832
Koninklijke Numico N.V........... 48,400 2,483,620
Koninklijke (Royal) Philips
Electronics N.V. -- ADR........ 72,529 3,082,483
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
3
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- CONTINUED
--------------------------------------------------------------------------------
INTERNATIONAL CORE GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
COMMON STOCK & EQUIVALENTS (Continued)
---------------------------------------------------------------
Netherlands (Continued)
QIAGEN N.V.*..................... 32,300 $ 1,539,169
STMicroelectronics N.V........... 67,600 3,219,450
------------
16,647,398
------------
REPUBLIC OF CHINA -- 0.7%
PetroChina Co., Ltd. Cl. H....... 9,881,300 2,015,079
------------
RUSSIA -- 0.6%
OAO Lukoil Holding -- ADR........ 33,900 1,952,640
------------
SINGAPORE -- 1.7%
Flextronics International,
Ltd.*.......................... 45,200 3,712,050
Singapore Airlines, Ltd.......... 143,000 1,355,801
------------
5,067,851
------------
SOUTH KOREA -- 0.5%
Korea Electric Power Corp........ 60,890 1,588,933
------------
SPAIN -- 2.7%
Altadis (ex Tabacalera S.A.)..... 161,400 2,328,688
Banco Santander Central Hispano
S.A............................ 301,800 3,313,063
Endesa S.A....................... 142,800 2,684,095
------------
8,325,846
------------
SWEDEN -- 3.0%
LM Ericson Telephone Co. Cl.
B. -- ADR...................... 236,500 3,503,156
Nordic Baltic Holding (NBH) AB... 270,700 1,938,991
Svenska Handelsbanken AB Cl. A... 235,100 3,782,882
------------
9,225,029
------------
SWITZERLAND -- 4.5%
Nestle S.A....................... 1,400 2,915,992
Serono S.A. -- ADR............... 44,100 1,334,025
Serono S.A. Cl. B................ 1,600 1,953,252
Swatch Group AG.................. 1,100 1,591,067
UBS AG........................... 22,100 2,940,870
Zurich Allied AG*................ 6,440 2,977,064
------------
13,712,270
------------
UNITED KINGDOM -- 15.0%
Amevescap PLC.................... 171,000 3,701,336
BAA PLC.......................... 191,700 1,516,342
Barclays PLC..................... 59,400 1,644,045
BG Group PLC..................... 638,600 4,057,571
Billiton PLC..................... 594,600 2,125,263
British Aerospace PLC............ 371,239 2,003,401
Cable & Wireless PLC............. 122,100 1,742,065
Centrica PLC..................... 795,900 2,556,464
CMG PLC.......................... 167,900 3,249,464
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
United Kingdom (Continued)
Energis PLC*..................... 235,300 $ 1,662,919
Logica PLC....................... 165,100 5,431,233
Reuters Group PLC -- ADR......... 20,100 2,258,738
Rio Tinto PLC.................... 135,800 1,969,655
Royal Bank of Scotland Group
PLC............................ 188,200 3,973,463
SEMA Group PLC................... 121,000 2,075,223
Shell Transport & Trading Co..... 372,000 3,030,510
Shire Pharmaceuticals PLC --
ADR*........................... 13,200 681,450
Vodafone Airtouch PLC............ 572,300 2,136,518
------------
45,815,660
------------
UNITED STATES -- 2.7%
Amdocs, Ltd.*.................... 32,200 2,008,475
Comverse Technology, Inc.*....... 17,000 1,836,000
Santa Fe International Corp...... 46,000 2,072,875
Transocean Sedco Forex, Inc...... 37,800 2,216,025
------------
8,133,375
------------
TOTAL COMMON STOCK & EQUIVALENTS -- 93.9%
(Cost: $266,499,608)..........................
286,981,359
------------
---------------------------------------------------------------
PREFERRED STOCK -- 2.0%
---------------------------------------------------------------
BRAZIL -- 1.0%
Banco Bradesco S.A............... 344,880,000 2,852,503
------------
GERMANY -- 1.0%
SAP AG........................... 12,700 3,115,578
------------
TOTAL PREFERRED STOCK
(Cost: $5,586,877)............................
5,968,081
------------
<CAPTION>
PRINCIPAL
AMOUNT
---------------------------------------------------------------
<S> <C> <C>
TIME DEPOSITS -- 4.5%
---------------------------------------------------------------
Chase Manhattan Bank
6.110%, 10/02/00............... $12,050,740 12,050,740
Citibank Nassau
6.110%, 10/02/00............... 1,886,624 1,886,624
------------
TOTAL TIME DEPOSITS
(Cost: $13,937,364)...........................
13,937,364
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 100.4%
(Cost: $286,023,849)........................ 306,886,804
LIABILITIES IN EXCESS OF OTHER ASSETS --
(0.4)%........................................ (1,309,864)
------------
NET ASSETS -- 100.0%.......................... $305,576,940
------------
------------
---------------
</TABLE>
<TABLE>
<C> <S>
* Non-income producing securities.
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
4
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
INTERNATIONAL CORE GROWTH FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Aerospace & Defense............. 1.6%
Airlines........................ 0.4
Airport
Development/Maintenance....... 0.5
Audio/Video Products............ 2.7
Auto Manufacturers.............. 1.1
Auto Parts & Equipment.......... 0.1
Banking......................... 8.0
Biotechnology................... 0.9
Chemicals....................... 0.6
Computer Services............... 2.8
Computer Software............... 2.9
Computers....................... 3.4
Diversified Financial
Services...................... 2.0
Diversified Manufacturing....... 5.3
Diversified Operations.......... 3.3
Drilling........................ 1.2
Drugs/Pharmaceuticals........... 8.5
Electric........................ 3.5
Electronic
Components/Semiconductors..... 3.6
Electronics..................... 6.1
Food............................ 1.2
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Hotels/Motels................... 0.5%
Insurance....................... 3.4
Internet Software............... 0.4
Mining.......................... 1.3
Money Center Banks.............. 6.1
Multimedia...................... 0.7
Oil & Gas Producers............. 7.1
Oil & Gas Services.............. 2.8
Paper & Related Products........ 0.6
Real Estate Development......... 1.9
Regional/Commercial Banks....... 1.1
Retail -- Food.................. 0.5
Retail -- Jewelry............... 0.5
Telecommunications.............. 6.6
Telecommunications Equipment.... 4.6
Television...................... 1.8
Tobacco......................... 0.8
Liabilities in Excess of Other
Assets........................ (0.4)
-----
NET ASSETS...................... 100.0%
=====
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
5
<PAGE>
EMERGING COUNTRIES FUND RETIREMENT SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: PEDRO V. MARCAL, Partner, Portfolio Manager; ERNESTO RAMOS,
PH.D., Partner, Portfolio Manager; LAWRENCE S. SPEIDELL, CFA, Partner, Director
of Quantitative Research and Portfolio Management; JASON CAMPBELL, Portfolio
Manager; JESSICA GONCALVES, Portfolio Manager; REBECCA HAGSTROM, CFA, Investment
Analyst; THEODORA JAMISON, Investment Analyst; JOHN CASARIETTI, 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: After posting strong gains in 1999 and the first quarter of
2000, stock markets in the world's emerging countries posted declines during the
six months ended September 30, 2000.
Emerging markets in Asia, Latin America and the Europe, Middle East and Africa
(EMEA) region mirrored movements in the United States, drifting lower amid
uncertainty about the impact of higher interest rates, rising oil prices and a
falling euro. As was the case in developed markets, technology and
telecommunications stocks led market declines in emerging nations.
These selling pressures overshadowed a number of positive developments in the
world's emerging countries. For example, in Latin America, the economies of
Mexico and Brazil showed impressive strength. In Asia, China benefited from
rising consumer spending and exports, with the MSCI China Index climbing 4.4% in
the six-month period. And in the EMEA region, the MSCI Israel Index advanced
30.4%, driven by growth in technology-related exports, a stable exchange rate
and relatively low inflation.
PERFORMANCE: The Fund declined 25.2% in the six-month period ended
September 30, 2000 versus a 21.8% loss for the MSCI Emerging Markets Free Index.
For the 12-month period ended September 30, 2000, the Fund advanced 9.3%,
outpacing the 0.4% gain for the Index.
PORTFOLIO SPECIFICS: The Fund underperformed its benchmark this period as a
result of the worldwide correction in technology stocks in April and May. Our
overweighting in telecommunications, computer, software and other technology
company stocks during this period of negative investor sentiment toward tech
stocks caused us to fall behind the index. On a 12-month trailing basis, the
Fund has continued to significantly outperform its benchmark. Being overweighted
in Israel helped performance as did stock selection within the health care
sector. The Fund's top-performing holdings included Israeli-based Teva
Pharmaceuticals, the world's leading generic drug company; Chinadotcom, a
premier pan-Asian Internet company; and Yapi Kredi Bank, Turkey's largest
private commercial bank.
MARKET OUTLOOK: Despite the difficult environment this year for emerging
market equities, we believe they continue to hold great potential for investors.
Moving forward, we believe these stocks will benefit from a multitude of
factors, including:
- Government reform, privatization and corporate restructuring
- Higher commodity prices
- Strong manufacturing output, decreasing inflation, and rising consumption
and export growth in select countries in the EMEA region
- Robust domestic demand, a rebuilding of inventories and increasing exports
in a number of Asia's developing nations.
--------------------------------------------------------------------------------
6
<PAGE>
EMERGING COUNTRIES FUND RETIREMENT SHARES -- UNAUDITED
------------------------------------------------------------------------
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 9/30/00 SINCE
1 YEAR 5 YEARS INCEPTION
9.32% 8.17% 8.13%
</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
01/95 $217,691.62 $209,517.12
02/95 $215,463.46 $204,069.67
03/95 $218,137.25 $205,294.09
04/95 $230,837.79 $214,511.79
05/95 $248,440.29 $225,923.82
06/95 $251,114.08 $226,601.59
07/95 $267,825.31 $231,677.47
08/95 $266,265.60 $226,209.88
09/95 $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
01/96 $275,846.70 $237,904.14
02/96 $279,857.40 $234,121.47
03/96 $280,971.48 $235,947.61
04/96 $298,796.79 $245,385.52
05/96 $309,046.35 $244,281.28
06/96 $309,491.98 $245,795.83
07/96 $297,682.71 $229,007.97
08/96 $310,383.24 $234,870.58
09/96 $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
01/97 $346,925.13 $251,579.59
02/97 $357,620.32 $262,347.20
03/97 $351,604.28 $255,447.47
04/97 $354,500.89 $255,907.27
05/97 $375,668.45 $263,226.22
06/97 $404,188.95 $277,308.82
07/97 $423,573.98 $281,440.72
08/97 $391,042.78 $245,641.46
09/97 $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
01/98 $334,224.60 $191,886.66
02/98 $360,962.57 $211,915.78
03/98 $381,461.68 $221,112.93
04/98 $393,716.58 $218,705.01
05/98 $352,718.36 $188,733.68
06/98 $328,431.37 $168,935.51
07/98 $343,360.07 $174,290.77
08/98 $242,869.88 $123,903.31
09/98 $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
01/99 $287,210.34 $152,954.74
02/99 $281,417.11 $154,442.99
03/99 $299,910.87 $174,798.58
04/99 $333,778.97 $196,424.66
05/99 $332,219.25 $195,281.86
06/99 $374,777.18 $217,444.40
07/99 $366,532.98 $211,529.91
08/99 $366,310.16 $213,454.83
09/99 $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 $258,707.17
01/00 $491,978.61 $260,249.03
02/00 $542,557.93 $263,686.14
03/00 $527,406.42 $264,972.93
04/00 $453,877.01 $239,855.35
05/00 $430,258.47 $229,949.33
06/00 $455,213.90 $238,049.29
07/00 $425,579.32 $225,806.54
08/00 $436,942.96 $226,916.83
9/30/00 $394,607.84 $207,103.36
</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.
--------------------------------------------------------------------------------
7
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
EMERGING COUNTRIES FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
--------------------------------------------------------------
COMMON STOCK & EQUIVALENTS -- 94.2%
--------------------------------------------------------------
BERMUDA -- 0.5%
Cosco Pacific, Ltd............... 1,756,000 $ 1,328,793
------------
BRAZIL -- 11.4%
Aracruz Celulose S.A. -- ADR..... 69,000 1,142,813
Companhia Brasileira de
Distribuicao Grupo Paode
Acucar -- ADR.................. 90,900 3,380,344
Embraer-Empresa Brasileira de
Aeronautica S.A. -- ADR........ 42,400 1,314,400
Embratel Participacoes S.A....... 245,300 4,538,050
Globo Cabo S.A................... 116,500 1,558,188
Petroleo Brasileiro S.A. --
ADR*........................... 443,600 13,335,725
Tele Celular Sul Part S.A. --
ADR............................ 36,900 1,107,000
Tele Norte Leste Participacoes
S.A............................ 89,777 2,053,649
Telesp Celular Participacoes
S.A. -- ADR.................... 25,200 830,025
Telesp Celular Participacoes
S.A. -- ADR -- Rts.*........... 8,430 0
Uniaode Bancos Brasileiros
S.A. -- GDR.................... 92,000 3,036,000
------------
32,296,194
------------
CZECH REPUBLIC -- 0.7%
CeskeRadiokomunikace--GDR 144A*.... 53,500 2,011,600
------------
DOMINICAN REPUBLIC -- 1.0%
Tricom S.A. -- ADR*.............. 184,900 2,819,725
------------
EGYPT -- 0.2%
Mobinil-Egyptian Mobile Phone
Services*...................... 19,600 434,578
------------
GREECE--3.6%
Alpha Credit Bank S.A............ 97,400 3,850,754
Intracom S.A..................... 71,790 2,434,920
National Bankof Greece S.A....... 92,870 3,823,839
------------
10,109,513
------------
HONG KONG -- 7.9%
China Merchants Holdings
International Co., Ltd.*....... 1,022,000 779,918
China Telecom (HongKong), Ltd.
Cl. H*......................... 811,000 5,408,851
Giordano International, Ltd...... 2,980,000 1,729,481
Hutchison Whampoa, Ltd.*......... 110,000 1,460,205
Legend Holders, Ltd.............. 1,421,000 1,348,673
Li & Fung, Ltd.*................. 716,000 1,510,636
PetroChina Co., Ltd.............. 37,671,700 7,682,334
Shanghai Industrial Holdings,
Ltd............................ 1,257,000 2,434,406
------------
22,354,504
------------
HUNGARY -- 0.6%
EGIS............................. 36,800 1,645,353
------------
INDIA -- 5.0%
Infosys Technologies, Ltd........ 41,320 6,591,453
Reliance Industries, Ltd......... 629,900 4,687,819
Satyam Computer Services,
Ltd.*.......................... 267,000 2,826,018
------------
14,105,290
------------
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
ISRAEL -- 9.9%
AudioCodes, Ltd.*................ 22,600 $ 1,923,825
Bank Hapoalim, Ltd............... 994,900 3,050,961
Check Point Software
Technologies, Ltd.*............ 70,500 11,103,750
M-Systems Flash Disk Pioneers,
Ltd.*.......................... 70,400 2,688,400
Orbotech, Ltd.*.................. 27,500 1,503,906
Teva Pharmaceutical Industries,
Ltd............................ 104,600 7,655,413
------------
27,926,255
------------
MALAYSIA -- 3.0%
Malayan Banking Berhad........... 712,000 2,735,579
Tenaga Nasional Berhad........... 1,947,000 5,789,763
------------
8,525,342
------------
MEXICO -- 13.8%
Cemex S.A. -- ADR................ 26,000 521,625
Cieb B Shares Mxn -- Rts......... 300,486 0
Coca-Cola Femsa S.A. -- ADR...... 159,500 3,190,000
Corporacion Interamericana de
Entretenimiento
S.A. Cl. B*.................... 1,746,000 8,458,227
Fomento Economica Mexicano
S.A. -- ADR.................... 17,400 678,600
Grupo Financiero Banamex Accival
S.A.*.......................... 717,000 3,287,389
Grupo Iusacell S.A. de C.V.*..... 74,900 889,438
Grupo Televisa S.A. --
GDR 144A*...................... 24,200 1,396,038
Panamerican Beverages, Inc.
Cl A........................... 83,000 1,411,000
TV Azteca S.A.
de C.V. -- ADR................. 466,800 6,010,050
TV Azteca S.A. de C.V. -- CPO
Shares......................... 738,000 587,649
Telefonos de Mexico
S.A. Cl. L -- ADR.............. 200,400 10,658,775
Wal-Mart de Mexico S.A. de
C.V. -- Ser V*................. 829,000 1,720,500
------------
38,809,291
------------
POLAND -- 0.4%
Prokom Software S.A.............. 27,800 1,248,094
------------
REPUBLIC OF CHINA -- 5.0%
China Southern Airlines Company,
Ltd.*.......................... 3,400,000 1,057,478
China Unicom, Ltd. -- ADR*....... 88,400 1,928,225
United Microelectronics Corp.,
Ltd.*.......................... 5,189,800 11,098,519
------------
14,084,222
------------
RUSSIA -- 4.4%
Golden Telecom, Inc.*............ 5,600 97,300
OAO Lukoil Holding............... 138,200 7,960,320
Surgutneftegaz*.................. 298,000 4,358,250
------------
12,415,870
------------
SINGAPORE -- 4.7%
Chartered Semiconductor
Manufacturing, Ltd. -- ADR*.... 43,400 2,633,838
Datacraft Asia, Ltd.............. 1,192,320 9,896,256
Natsteel Electronics, Ltd........ 306,000 791,243
------------
13,321,337
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
8
<PAGE>
-------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
COMMON STOCK & EQUIVALENTS (Continued)
--------------------------------------------------------------
SOUTH AFRICA -- 3.8%
Dimension Data Holdings PLC*..... 701,460 $ 6,489,064
Impala Platinum Holdings, Ltd.... 95,100 4,111,649
------------
10,600,713
------------
SOUTH KOREA -- 12.0%
Hyundai Electronics Industries
Co., Ltd.*..................... 269,850 3,859,667
Hyundai Motor Co., Ltd........... 197,580 2,569,080
Kookmin Bank..................... 255,660 3,049,166
Korea Electric Power Corp........ 187,360 4,889,186
Korea Telecom Corp............... 79,450 4,759,234
Samsung Electronics.............. 53,797 9,744,872
SK Telecom Co., Ltd.*............ 20,830 5,080,716
------------
33,951,921
------------
TAIWAN -- 5.1%
Hon Hai Precision Industry Co.,
Ltd............................ 402,540 2,646,768
Taiwan Semiconductor -- ADR*..... 3,406,640 11,308,349
Via Technologies, Inc.*.......... 42,000 443,728
------------
14,398,845
------------
THAILAND -- 0.5%
Thai Farmers Bank Public Co.,
Ltd.*.......................... 2,885,700 1,470,377
------------
TURKEY -- 0.4%
Hurriyet Gazetecilik ve
Matbaacilik A.S.*.............. 128,615,400 1,217,501
------------
UNITED KINGDOM -- 0.3%
Dimension Data Holdings PLC*..... 92,200 854,707
------------
TOTAL COMMON STOCK & EQUIVALENTS
(Cost: $254,705,627)......................... 265,930,025
------------
PREFERRED STOCK -- 2.8%
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
--------------------------------------------------------------
BRAZIL -- 2.2%
CIA Vale do Rio Doce A*.......... 136,500 $ 3,425,448
Banco Itau S.A.*................. 17,520,000 1,557,333
Petroleo Brasileiro S.A.......... 49,200 1,405,333
------------
6,388,114
------------
THAILAND -- 0.6%
Siam Commercial Bank Public Co.,
Ltd.*.......................... 4,203,500 1,618,838
------------
TOTAL PREFERRED STOCK
(Cost: $8,913,074)........................... 8,006,952
------------
<CAPTION>
PRINCIPAL
AMOUNT
--------------------------------------------------------------
<S> <C> <C>
TIME DEPOSITS -- 2.6%
--------------------------------------------------------------
Bank One Grand Cayman
6.110%, 10/02/00............... $5,596,535 5,596,535
Chase Manhattan Bank
6.110%, 10/02/00............... 1,771,954 1,771,954
------------
TOTAL TIME DEPOSITS
(Cost: $7,368,489)........................... 7,368,489
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 99.6%
(Cost: $270,987,190)........................ 281,305,466
OTHER ASSETS IN EXCESS OF LIABILITIES --
0.4%.......................................... 1,011,910
------------
NET ASSETS -- 100.0%.......................... $282,317,376
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
9
<PAGE>
SCHEDULE OF INVESTMENTS BY INDUSTRY AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
EMERGING COUNTRIES FUND
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Aerospace/Defense............... 0.5%
Airlines........................ 0.4
Auto Manufacturers.............. 0.9
Banking & Investments........... 11.0
Beverages -- Non-Alcoholic...... 1.6
Broadcasting.................... 0.5
Building Materials.............. 0.2
Chemicals....................... 1.7
Computer Products............... 1.5
Computer Services............... 3.9
Computer Software............... 3.8
Computers....................... 1.4
Distribution/Wholesale.......... 0.5
Diversified Financial
Services...................... 1.2
Diversified Operations.......... 1.6
Drugs/Pharmaceuticals........... 3.3
Electric........................ 3.8
Electronic
Components/Semiconductors..... 9.7
Electronics..................... 4.4
</TABLE>
<TABLE>
<CAPTION>
PERCENTAGE OF
INDUSTRY NET ASSETS
-------- -------------
<S> <C>
Entertainment................... 3.0%
Metals.......................... 1.5
Mining.......................... 1.2
Networking Products............. 2.6
Oil & Gas Producers............. 12.3
Paint & Related Products........ 0.3
Paper & Related Products........ 0.4
Publishing...................... 0.4
Retail -- Apparel............... 0.6
Retail -- Discount.............. 0.6
Retail -- Hypermarkets.......... 1.2
Retail -- Miscellaneous......... 0.5
Telecommunications.............. 18.7
Telecommunications Equipment.... 1.5
Television...................... 2.9
Other Assets in Excess of
Liabilities................... 0.4
-----
NET ASSETS...................... 100.0%
=====
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
10
<PAGE>
LARGE CAP GROWTH FUND RETIREMENT SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: ANDREW B. GALLAGHER, Partner, Portfolio Manager; WILLIAM H.
CHENOWETH, CFA, Partner, Portfolio Manager; MICHAEL CARROLL, Portfolio Manager;
KENNETH H. LEE, CFA, Portfolio Manager; TRISHA C. SCHUSTER, CFA, Portfolio
Manager; EVAN LUNDQUIST, Portfolio Manager; 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: Following five calendar years of double-digit gains and a
strong first quarter 2000, US large-cap growth stocks took a breather during the
six-month period ended September 30, 2000.
In April and May, worries over rising interest rates, high valuations of
technology stocks and signs of resurgent inflation sent equities lower. In an
attempt to slow the robust US economy and stifle inflation, the Federal Reserve
raised short-term interest rates by half a percentage point in May -- its sixth
rate increase in less than a year. Optimistic that reports of slowing GDP growth
would preempt additional rate hikes, investors bid stock prices higher in June
and in August.
The summer's rallies were short lived, however, as investors turned their
attention from interest rates to corporate earnings and concerns that these
would be negatively affected by rising oil prices and a weaker euro. Uncertainty
surrounding the upcoming US elections also weighed on investor sentiment.
Throughout the period, technology issues led the market's decline, with the
tech-heavy Nasdaq Composite tumbling 19.7%.
PERFORMANCE: For the six-month period ended September 30, 2000, the Fund
declined 5.8%, outperforming its Russell 1000 Growth Index benchmark, which fell
7.9%.
PORTFOLIO SPECIFICS: Stock selection, especially in the technology and
consumer services sectors, was responsible for much of the Fund's outperformance
relative to its benchmark during the period.
Holdings that positively impacted results included CIENA, JDS Uniphase, Intel,
Sun Microsystems and Siebel Systems. Outside of the technology sector,
Metro-Goldwyn-Mayer (MGM) and Genentech also helped Fund performance.
During the period, on a company-specific basis, we decreased the Fund's
holdings in the retail and financial services sectors and increased holdings in
health care and technology. Although we boosted technology exposure during the
period, at September 30, 2000 the Fund's technology weighting was slightly below
its benchmark.
MARKET OUTLOOK: Our outlook for large-cap stocks remains positive. Corporate
earnings growth, although showing signs of slowing, is expected to remain solid.
The Federal Reserve is unlikely to raise interest rates amid economic reports
indicative of a deceleration in GDP growth. While we continue to closely monitor
oil prices, these have had little impact on inflation over the last 10 years.
The combination of solid earnings, steady interest rates and tame inflation
bodes well for US equities. Most importantly, we remain focused on finding and
investing in companies that will prevail despite changing macroeconomic
conditions.
--------------------------------------------------------------------------------
11
<PAGE>
LARGE CAP GROWTH FUND RETIREMENT SHARES -- UNAUDITED
------------------------------------------------------------------------
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
57.94% As of 9/30/00 52.09%
</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
01/97 $272,445.82 $263,452.07
02/97 $267,801.86 $261,660.59
03/97 $260,061.92 $247,499.52
04/97 $269,865.84 $263,933.49
05/97 $300,051.60 $282,981.57
06/97 $311,145.51 $294,300.83
07/97 $349,845.20 $320,317.03
08/97 $341,847.27 $301,578.48
09/97 $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
01/98 $365,583.08 $330,814.66
02/98 $399,122.81 $355,698.54
03/98 $423,632.61 $369,876.68
04/98 $437,048.50 $374,995.77
05/98 $425,954.59 $364,353.39
06/98 $456,656.35 $386,670.04
07/98 $446,852.43 $384,110.28
08/98 $372,291.02 $326,455.33
09/98 $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
01/99 $642,930.86 $471,718.79
02/99 $629,256.97 $450,161.24
03/99 $694,014.45 $473,884.74
04/99 $730,134.16 $474,500.79
05/99 $735,294.12 $459,933.61
06/99 $766,253.87 $492,128.96
07/99 $755,933.95 $476,479.26
08/99 $751,289.99 $484,245.88
09/99 $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
01/00 $1,082,301.34 $564,876.76
02/00 $1,240,196.08 $592,499.23
03/00 $1,283,281.73 $634,922.18
04/00 $1,184,726.52 $604,712.58
05/00 $1,109,133.13 $574,235.06
06/00 $1,226,006.19 $617,762.08
07/00 $1,171,568.63 $592,001.40
08/00 $1,324,045.41 $645,577.53
9/30/00 $1,208,978.33 $584,505.90
</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.
--------------------------------------------------------------------------------
12
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
LARGE CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
--------------------------------------------------------------
COMMON STOCK -- 99.0%
--------------------------------------------------------------
APPLICATION SOFTWARE -- 4.7%
Siebel Systems, Inc.*............ 64,000 $ 7,124,000
------------
BANKING -- 4.2%
Citigroup, Inc................... 116,600 6,303,688
------------
BIOTECHNOLOGY -- 6.7%
Amgen, Inc.*..................... 31,900 2,227,516
Genentech, Inc.*................. 28,200 5,236,388
Serono S.A. -- ADR*.............. 91,900 2,779,975
------------
10,243,879
------------
BROADCASTING -- 5.8%
AT&T Corp.-Liberty Media Group
Cl. A*......................... 216,300 3,893,400
Viacom, Inc. Cl. A*.............. 85,000 4,972,500
------------
8,865,900
------------
COMPUTER SOFTWARE -- 9.7%
Ariba, Inc.*..................... 28,100 4,025,763
Oracle Corp.*.................... 58,400 4,599,000
Veritas Software Corp.*.......... 43,650 6,198,300
------------
14,823,063
------------
COMPUTERS -- 6.4%
EMC Corp*........................ 49,900 4,946,338
Sun Microsystems, Inc.*.......... 40,400 4,716,700
------------
9,663,038
------------
DRUGS/PHARMACEUTICALS -- 3.6%
Pfizer, Inc...................... 122,800 5,518,325
------------
ELECTRIC -- GENERATION -- 3.5%
AES Corp.*....................... 77,400 5,301,900
------------
ELECTRONIC COMPONENTS/SEMICONDUCTORS -- 2.6%
Intel Corp....................... 95,500 3,969,219
------------
INSURANCE -- 2.1%
American International
Group, Inc..................... 32,600 3,119,413
------------
INTERNET SOFTWARE -- 2.7%
VeriSign, Inc.*.................. 20,282 4,108,373
------------
LEISURE/GAMING -- 4.6%
MGM Grand, Inc................... 183,900 7,022,681
------------
NETWORKING PRODUCTS -- 9.4%
Cisco Systems, Inc.*............. 110,300 6,094,074
Juniper Networks, Inc.*.......... 20,300 4,444,431
Network Appliance, Inc*.......... 29,600 3,770,300
------------
14,308,805
------------
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
OIL & GAS PRODUCERS -- 7.7%
Enron Corp....................... 81,000 $ 7,097,625
Santa Fe International Corp...... 103,100 4,645,944
------------
11,743,569
------------
OIL FIELD SERVICES -- 1.4%
Weatherford
International, Inc.*........... 47,800 2,055,400
------------
RETAIL-DISCOUNT -- 2.8%
Wal-Mart Stores, Inc............. 88,100 4,239,813
------------
TELECOMMUNICATIONS -- 12.2%
CIENA Corp.*..................... 48,400 5,944,124
Corning, Inc..................... 14,388 4,273,236
Nextel Communications, Inc.*..... 67,700 3,164,975
Qwest Communications
International, Inc.*........... 106,400 5,113,850
------------
18,496,185
------------
TELECOMMUNICATIONS EQUIPMENT -- 8.9%
Corvis Corporation*.............. 44,500 2,716,587
JDS Uniphase Corp.*.............. 19,400 1,836,938
Nortel Networks Corporation...... 85,600 5,098,549
TyCom, Ltd.*..................... 99,100 3,802,963
------------
13,455,037
------------
TOTAL COMMON STOCK
(Cost: $124,241,651)......................... 150,362,288
------------
<CAPTION>
PRINCIPAL
AMOUNT
--------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 3.3%
--------------------------------------------------------------
HSBC Holdings PLC
6.110%, 10/02/00
(Cost: $4,979,038)............. $4,979,038 4,979,038
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 102.3%
(Cost: $129,220,689)........................ 155,341,326
LIABILITIES IN EXCESS OF OTHER ASSETS --
(2.3)%........................................ (3,499,857)
------------
NET ASSETS -- 100.0%.......................... $151,841,469
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
13
<PAGE>
MID CAP GROWTH FUND RETIREMENT SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: WILLIAM H. CHENOWETH, CFA, Partner, Portfolio Manager; ANDREW
B. GALLAGHER, Partner, Portfolio Manager; KENNETH H. LEE, CFA, Portfolio
Manager; TRISHA C. SCHUSTER, CFA, Portfolio Manager; EVAN LUNDQUIST, Portfolio
Manager; MICHAEL CARROLL, Portfolio Manager; 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: The US stock market was turbulent during the six months ended
September 30, 2000. In April and May, worries over rising interest rates, high
valuations of technology stocks and signs of resurgent inflation sent equities-
particularly technology issues-lower. Stocks advanced in June and August,
reflecting sentiment that the Federal Reserve's May interest rate increase was
the last in its series of tightening moves. Despite the summer's rallies,
however, equities -- once again led by technology shares -- drifted lower in
September. The sell-off was prompted by concerns about the impact of rising oil
prices and a weakening euro on corporate earnings and uncertainty surrounding
the outcome of upcoming US elections.
Within the universe of US growth stocks, mid-cap issues represented the
best-performing capitalization segment during the period. The relative strength
of mid-cap growth stocks was driven by attractive valuations combined with the
ability to deliver double-digit earnings growth in the face of rising capital
costs.
PERFORMANCE: The Fund declined 2.0% during the six-month period ended
September 30, 2000, outperforming its Russell Midcap Growth Index, which
declined 5.1%.
PORTFOLIO SPECIFICS: The Fund's outperformance relative to its benchmark was
primarily due to stock selection in the technology sector.
Among the Fund's best-performing technology holdings were CIENA, a
manufacturer of optical networking equipment; Network Appliance, a data storage
and access company; and Mercury Interactive, a provider of Web-management
solutions that enable businesses to test and monitor Internet applications. Top
performers outside of the technology arena included Medimmune, a biotechnology
firm, and Kohl's, a department store chain.
During the period, on a stock-by-stock basis, we increased the Fund's
weighting in health care stocks and decreased holdings in the
commercial/industrial services sector.
Market Outlook: Looking forward, there are many factors supporting continued
strong performance by US mid-cap equities, including:
- Sound fundamentals
- Attractive valuations
- Ongoing brisk pace of mergers and acquisitions activity
In this environment, we are optimistic that our forward-looking investment
philosophy will continue to lead us to high-growth, mid-sized companies poised
to materially outperform.
--------------------------------------------------------------------------------
14
<PAGE>
MID CAP GROWTH FUND RETIREMENT SHARES -- UNAUDITED
------------------------------------------------------------------------
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 9/30/00
1 YEAR 5 YEARS 10 YEARS
98.00% 30.97% 26.14%
</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 $250,000.00
11/85 $289,877.30 $250,000.00
12/85 $311,349.69 $250,000.00
01/86 $325,153.37 $254,807.50
02/86 $352,760.74 $277,271.33
03/86 $388,036.81 $293,918.70
04/86 $386,503.07 $297,128.29
05/86 $420,245.40 $315,779.03
06/86 $437,116.56 $320,667.29
07/86 $414,110.43 $295,148.59
08/86 $435,582.82 $308,539.48
09/86 $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
01/87 $478,527.61 $334,695.37
02/87 $503,067.48 $359,630.17
03/87 $507,668.71 $364,485.18
04/87 $501,533.74 $355,008.56
05/87 $504,601.23 $357,298.37
06/87 $521,472.39 $371,922.59
07/87 $558,282.21 $388,848.79
08/87 $576,687.12 $404,892.69
09/87 $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
01/88 $412,576.69 $305,043.40
02/88 $443,251.53 $330,063.06
03/88 $437,116.56 $331,554.94
04/88 $441,717.79 $333,428.23
05/88 $444,785.28 $327,526.55
06/88 $486,196.32 $352,277.73
07/88 $467,791.41 $338,944.02
08/88 $449,386.50 $326,033.64
09/88 $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
01/89 $509,202.45 $361,111.89
02/89 $496,932.52 $358,150.77
03/89 $506,134.97 $362,538.11
04/89 $532,208.59 $383,188.29
05/89 $564,417.18 $403,547.08
06/89 $536,809.82 $398,139.55
07/89 $598,159.51 $429,333.78
08/89 $619,631.90 $445,953.29
09/89 $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
01/90 $602,760.74 $406,828.25
02/90 $628,834.36 $415,192.63
03/90 $648,773.01 $432,593.36
04/90 $633,435.58 $420,627.83
05/90 $736,196.32 $463,885.19
06/90 $745,398.77 $469,614.17
07/90 $720,858.90 $454,642.87
08/90 $661,042.94 $401,772.45
09/90 $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
01/91 $707,055.21 $457,271.01
02/91 $773,006.13 $497,529.15
03/91 $811,349.69 $523,530.02
04/91 $791,411.04 $518,870.60
05/91 $828,220.86 $545,104.70
06/91 $774,539.88 $515,396.50
07/91 $832,822.09 $541,398.25
08/91 $872,699.39 $558,316.94
09/91 $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
01/92 $1,007,668.71 $630,984.86
02/92 $1,023,006.13 $632,347.79
03/92 $972,392.64 $606,370.94
04/92 $944,785.28 $594,765.00
05/92 $934,049.08 $595,924.79
06/92 $904,907.98 $578,196.03
07/92 $938,650.31 $603,972.01
08/92 $914,110.43 $596,066.01
09/92 $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
01/93 $1,164,110.43 $687,920.84
02/93 $1,148,773.01 $666,739.75
03/93 $1,203,987.73 $686,048.54
04/93 $1,173,312.88 $657,872.52
05/93 $1,250,000.00 $688,917.53
06/93 $1,280,674.85 $686,086.08
07/93 $1,294,478.53 $683,924.91
08/93 $1,365,030.67 $723,688.30
09/93 $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
01/94 $1,374,233.13 $775,460.30
02/94 $1,346,625.77 $768,775.83
03/94 $1,256,134.97 $732,543.43
04/94 $1,266,871.17 $730,756.02
05/94 $1,245,398.77 $731,822.93
06/94 $1,184,049.08 $700,339.90
07/94 $1,203,987.73 $719,739.32
08/94 $1,263,803.68 $762,671.77
09/94 $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
01/95 $1,184,049.08 $748,522.80
02/95 $1,251,533.74 $788,351.70
03/95 $1,294,478.53 $819,617.73
04/95 $1,319,018.40 $826,494.32
05/95 $1,338,957.06 $846,867.41
06/95 $1,438,650.31 $885,408.34
07/95 $1,553,680.98 $941,127.09
08/95 $1,587,423.31 $951,432.43
09/95 $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
01/96 $1,687,116.56 $1,008,541.97
02/96 $1,754,601.23 $1,046,664.86
03/96 $1,754,601.23 $1,054,912.58
04/96 $1,868,098.16 $1,105,875.40
05/96 $1,943,251.53 $1,128,435.26
06/96 $1,895,705.52 $1,094,356.52
07/96 $1,751,533.74 $1,009,434.45
08/96 $1,832,822.09 $1,064,004.48
09/96 $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
01/97 $2,019,938.65 $1,215,798.34
02/97 $1,888,036.81 $1,189,050.77
03/97 $1,780,674.85 $1,121,857.51
04/97 $1,782,208.59 $1,149,343.02
05/97 $1,934,049.08 $1,252,335.65
06/97 $2,007,668.71 $1,287,025.35
07/97 $2,211,656.44 $1,410,193.68
08/97 $2,177,914.11 $1,396,373.78
09/97 $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
01/98 $2,199,386.50 $1,400,987.46
02/98 $2,409,509.20 $1,532,708.30
03/98 $2,530,674.85 $1,596,959.43
04/98 $2,500,000.00 $1,618,646.14
05/98 $2,354,294.48 $1,552,071.23
06/98 $2,501,533.74 $1,595,979.32
07/98 $2,391,104.29 $1,527,607.57
08/98 $1,875,766.87 $1,235,987.28
09/98 $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
01/99 $2,845,092.02 $1,731,969.54
02/99 $2,608,895.71 $1,647,276.23
03/99 $2,930,981.60 $1,739,029.51
04/99 $3,046,012.27 $1,818,329.26
05/99 $2,915,644.17 $1,794,872.81
06/99 $3,148,773.01 $1,920,154.93
07/99 $3,101,226.99 $1,859,094.01
08/99 $3,154,907.98 $1,839,759.43
09/99 $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
01/00 $5,185,582.82 $2,543,825.37
02/00 $7,130,368.10 $3,078,537.46
03/00 $6,365,030.67 $3,081,616.00
04/00 $5,446,319.02 $2,782,483.53
05/00 $4,865,030.67 $2,579,640.48
06/00 $5,720,858.90 $2,853,350.34
07/00 $5,406,441.72 $2,672,723.90
08/00 $6,325,153.37 $3,075,770.66
9/30/00 $6,240,797.55 $2,925,365.47
</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.
--------------------------------------------------------------------------------
15
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
MID CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
--------------------------------------------------------------
COMMON STOCK -- 98.7%
--------------------------------------------------------------
APPLICATIONS SOFTWARE -- 0.6%
BroadVision, Inc.*............... 55,700 $ 1,430,794
------------
AUTOMOBILES -- 0.9%
Harley-Davidson, Inc............. 42,900 2,053,838
------------
BIOTECHNOLOGY -- 8.0%
Celera Genomics *................ 16,500 1,643,813
Genzyme Corp.-General
Division*...................... 19,200 1,309,200
Gilead Sciences, Inc.*........... 11,900 1,305,281
Human Genome Sciences, Inc.*..... 17,000 2,943,125
Immunex Corp.*................... 44,600 1,940,100
Medimmune, Inc.*................. 48,100 3,715,725
Millennium
Pharmaceuticals, Inc.*......... 13,700 2,001,056
Protein Design Labs, Inc.*....... 16,400 1,976,200
Vertex Pharmaceuticals, Inc.*.... 28,800 2,433,599
------------
19,268,099
------------
COMPUTER HARDWARE -- 4.0%
Brocade Communications
Systems, Inc.*................. 26,600 6,277,600
Redback Networks, Inc. *......... 20,800 3,411,200
------------
9,688,800
------------
COMPUTER SERVICES -- 0.7%
StorageNetworks, Inc.*........... 16,600 1,696,313
------------
COMPUTER SOFTWARE -- 10.1%
Ariba, Inc.*..................... 34,000 4,871,030
i2 Technologies, Inc.*........... 16,900 3,161,356
Mercury Interactive Corp.*....... 44,100 6,912,675
Micromuse, Inc.*................. 14,200 2,853,313
Nuance Communications, Inc.*..... 14,700 1,788,806
ONI Systems Corp.*............... 19,300 1,665,831
Quest Software, Inc.*............ 22,600 1,403,672
Vitria Technology, Inc.*......... 36,700 1,711,138
------------
24,367,821
------------
CONTRACT DRILLING -- 2.3%
Global Marine, Inc.*............. 64,700 1,997,613
Diamond Offshore
Drilling, Inc.................. 37,200 1,525,200
Noble Drilling Corp.*............ 38,200 1,919,550
------------
5,442,363
------------
DRUGS/PHARMACEUTICALS -- 8.0%
Abgenix, Inc.*................... 28,500 2,303,155
ALZA Corp.*...................... 36,700 3,174,550
Andrx Corp. -- Andrx Group*...... 24,600 2,297,024
COR Therapeutics, Inc.*.......... 35,600 2,218,325
Forest Laboratories, Inc. Cl.
A*............................. 20,800 2,385,500
IDEC Pharmaceuticals Corp.*...... 16,700 2,928,501
King Pharmaceuticals, Inc.*...... 39,200 1,310,750
Sepracor, Inc.*.................. 21,000 2,576,437
------------
19,194,242
------------
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
ELECTRIC -- 3.8%
Calpine Corp.*................... 56,100 $ 5,855,438
NRG Energy, Inc.*................ 38,700 1,412,550
Southern Energy, Inc.*........... 62,800 1,970,350
------------
9,238,338
------------
ELECTRONIC COMPONENTS/SEMICONDUCTORS -- 14.8%
Applied Micro Circuits Corp.*.... 31,800 6,584,587
Conexant Systems, Inc.*.......... 50,400 2,110,499
GlobeSpan, Inc.*................. 16,100 1,964,200
Maxim Integrated
Products, Inc.*................ 43,800 3,523,162
Micrel, Inc.*.................... 25,300 1,695,100
PMC-Sierra, Inc.*................ 13,600 2,927,400
Sanmina Corp.*................... 28,800 2,696,400
Semtech Corp.*................... 39,400 1,699,124
TranSwitch Corp.*................ 39,500 2,518,124
Virata Corp.*.................... 17,800 1,177,025
Vitesse Semiconductor Corp.*..... 36,500 3,246,218
Waters Corp.*.................... 61,200 5,446,800
------------
35,588,639
------------
ELECTRONIC INSTRUMENTS -- 1.9%
Keithley Instruments, Inc........ 26,800 1,876,000
Newport Corp..................... 16,300 2,596,029
------------
4,472,029
------------
INTERNET SOFTWARE -- 5.3%
Agile Software Corp.*............ 27,400 2,464,288
Art Technology Group, Inc.*...... 18,000 1,705,500
CacheFlow, Inc.*................. 20,100 2,874,300
Interwoven, Inc.*................ 19,000 2,148,188
TIBCO Software, Inc.*............ 25,600 2,161,600
Vignette Corp.*.................. 46,100 1,377,238
------------
12,731,114
------------
MEDICAL SUPPLIES/EQUIPMENT -- 3.1%
MiniMed, Inc.*................... 29,000 2,591,875
PE Corp.-PE Biosystems Group..... 42,800 4,986,200
------------
7,578,075
------------
MULTIMEDIA -- 0.4%
Entravision Communications Corp.
Cl. A*......................... 56,300 978,213
------------
NETWORKING PRODUCTS -- 5.8%
Avici Systems, Inc.*............. 16,900 1,607,613
Emulex Corp.*.................... 20,000 2,450,000
Extreme Networks, Inc.*.......... 17,700 2,026,650
Network Appliance, Inc.*......... 49,100 6,254,113
Turnstone Systems, Inc.*......... 34,500 1,599,938
------------
13,938,314
------------
OIL & GAS SERVICES -- 7.2%
Anadarko Petroleum Corp.......... 27,000 1,794,420
Baker Hughes, Inc................ 44,300 1,644,638
BJ Services Co.*................. 43,900 2,683,388
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
16
<PAGE>
-------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (Continued)
--------------------------------------------------------------
Oil & Gas Services (Continued)
ENSCO International, Inc......... 60,900 $ 2,329,425
Nabors Industries, Inc.*......... 26,800 1,404,320
National-Oilwell, Inc.*.......... 49,700 1,553,125
Rowan Companies, Inc.*........... 70,700 2,050,300
Smith International, Inc.*....... 32,000 2,610,000
UTI Energy Corp.*................ 28,300 1,262,888
------------
17,332,504
------------
OPTICAL SUPPLIES -- 1.1%
Allergan, Inc.................... 32,200 2,718,888
------------
PIPELINES -- 1.0%
Dynegy, Inc. Cl. A............... 41,800 2,382,600
------------
RETAIL -- 0.6%
Starbucks Corp.*................. 36,400 1,458,275
------------
RETAIL -- DEPARTMENT STORES -- 1.1%
Kohls Corp.*..................... 44,500 2,567,094
------------
RETAIL -- DISCOUNT -- 0.7%
Dollar Tree Stores, Inc.*........ 40,500 1,642,781
------------
TELECOMMUNICATIONS -- 6.5%
Avanex Corp.*.................... 18,900 2,035,294
CIENA Corp.*..................... 74,200 9,112,688
Crown Castle International
Corp.*......................... 78,500 2,438,406
Metromedia Fiber Network, Inc.
Cl. A*......................... 29,200 709,925
Nextlink Communications, Inc. Cl.
A*............................. 36,800 1,294,900
------------
15,591,213
------------
TELECOMMUNICATIONS EQUIPMENT -- 7.5%
Comverse Technology, Inc.*....... 35,700 3,855,600
Corvis Corp.*.................... 21,100 1,288,090
Cosine Communications, Inc.*..... 21,200 1,177,925
Finisar Corp.*................... 56,900 2,752,538
<CAPTION>
NUMBER
OF SHARES VALUE
--------------------------------------------------------------
<S> <C> <C>
Telecommunications Equipment (Continued)
Natural MicroSystems Corp.*...... 26,800 $ 1,441,757
Nextel Partners, Inc. Cl. A*..... 52,000 1,514,500
Scientific-Atlanta, Inc.......... 22,500 1,431,563
SDL, Inc.*....................... 14,600 4,515,963
------------
17,977,936
------------
TELECOMMUNICATIONS SERVICES -- 0.8%
McLeodUSA, Inc.*................. 81,500 1,166,469
Time Warner Telecom, Inc. Cl.
A*............................. 16,100 777,831
------------
1,944,300
------------
WIRELESS EQUIPMENT -- 2.5%
Netro Corp.*..................... 25,600 1,516,800
Palm, Inc.*...................... 86,300 4,568,506
------------
6,085,306
------------
TOTAL COMMON STOCK
(Cost: $163,756,518)......................... 237,367,889
------------
<CAPTION>
PRINCIPAL
AMOUNT
--------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 1.7%
--------------------------------------------------------------
HSBC Holdings PLC
6.110%, 10/02/00
(Cost: $4,054,280)............. $4,054,280 4,054,280
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 100.4%
(Cost: $167,810,798)........................ 241,422,169
LIABILITIES IN EXCESS OF OTHER ASSETS --
(0.4)%........................................ (976,924)
------------
NET ASSETS -- 100.0%.......................... $240,445,245
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
17
<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; MICHAEL P.
GIGGIE, Investment Analyst; JOHN MAZUR, Investment Analyst.
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: Despite strong gains in June and August, when the Russell
2000 Growth Index climbed 12.9% and 10.5%, respectively, small-cap growth stocks
drifted lower during the six-month period ended September 30, 2000.
In April and May, worries over rising interest rates, high valuations of
technology stocks and signs of resurgent inflation sent equities lower.
The Federal Reserve raised interest rates by one-half percentage point in May
-- its sixth increase in a series of moves beginning June 30, 1999 and totaling
1.75%. Amid reports of slowing economic growth, investors grew confident that
the rate hike in May was the last in the Federal Reserve's round of tightening,
sending stocks higher. However, equities resumed their downward trend late in
the period amid concerns that rising oil prices and a weakening euro would take
their toll on corporate profitability. In addition, the uncertain outcome of
upcoming US elections dampened investor enthusiasm.
Technology issues bore the brunt of the market's decline, with the tech-laden
Nasdaq Composite tumbling 19.7% during the 6-month period.
PERFORMANCE: From April 1, 2000 through September 30, 2000, the Fund declined
12.4%. During the same period, the Russell 2000 Growth Index fell 11.1%.
PORTFOLIO SPECIFICS: The Fund's slight underperformance relative to its
benchmark during the period was due to stock selection in the
commercial/industrial and consumer services sectors, an overweighting in
technology and an underweighting in health care and financial services
stocks -- two sectors that performed relatively well.
Stock selection within the technology sector positively contributed to this
period's results. Among the Fund's best-performing holdings were Powerwave
Technologies, a manufacturer of ultra-linear radio frequency (RF) power
amplifiers for use in wireless communications; Micrel, a provider of analog and
mixed-signal semiconductor devices; and MMC Networks, a supplier of
network-processor chip sets to customers like Cisco and Nortel.
MARKET OUTLOOK: We are optimistic that the following positive factors will
create a favorable environment for small-cap growth stock investing:
- Attractive valuations
- Expectations for solid operating earnings
- High levels of cash holdings by aggressive growth mutual funds, pointing
toward strong future demand for small-cap growth stocks.
As a result, we are confident that our bottom-up investment process will
continue to identify promising small-cap growth investment opportunities.
--------------------------------------------------------------------------------
18
<PAGE>
SMALL CAP GROWTH FUND RETIREMENT SHARES -- UNAUDITED
------------------------------------------------------------------------
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 9/30/00 SINCE
1 YEAR 5 YEARS INCEPTION
52.38% 22.22% 19.40%
</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
01/94 $256,805.16 $263,394.52
02/94 $255,014.33 $262,235.58
03/94 $234,240.69 $246,126.45
04/94 $234,957.02 $246,503.02
05/94 $228,510.03 $240,978.89
06/94 $216,690.54 $230,681.86
07/94 $222,063.04 $233,969.08
08/94 $236,747.85 $251,137.73
09/94 $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
01/95 $229,584.53 $245,226.33
02/95 $241,762.18 $256,558.24
03/95 $253,581.66 $264,052.31
04/95 $257,879.66 $268,023.65
05/95 $259,670.49 $271,534.76
06/95 $282,593.12 $290,246.22
07/95 $309,813.75 $312,868.01
08/95 $310,530.09 $316,728.81
09/95 $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
01/96 $319,842.41 $325,361.26
02/96 $339,183.38 $340,197.74
03/96 $349,212.03 $346,923.45
04/96 $385,386.82 $373,556.76
05/96 $406,876.79 $392,720.22
06/96 $381,805.16 $367,193.41
07/96 $337,750.72 $322,359.09
08/96 $367,836.68 $346,223.33
09/96 $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
01/97 $388,968.48 $373,863.25
02/97 $347,063.04 $351,281.91
03/97 $328,080.23 $326,491.95
04/97 $323,065.90 $322,704.64
05/97 $374,283.67 $371,207.15
06/97 $401,146.13 $383,791.07
07/97 $429,799.43 $403,441.17
08/97 $438,037.25 $415,544.41
09/97 $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
01/98 $419,054.44 $406,435.55
02/98 $456,303.72 $442,319.75
03/98 $481,733.52 $460,875.06
04/98 $481,375.36 $463,700.22
05/98 $443,409.74 $430,012.40
06/98 $459,885.39 $434,407.13
07/98 $420,487.11 $398,134.13
08/98 $318,409.74 $306,244.78
09/98 $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
01/99 $489,971.35 $435,820.50
02/99 $437,679.08 $395,942.93
03/99 $484,598.85 $410,038.50
04/99 $512,893.98 $446,244.90
05/99 $492,478.51 $446,958.89
06/99 $554,083.09 $470,513.62
07/99 $556,232.09 $455,974.75
08/99 $551,575.93 $438,921.29
09/99 $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
01/00 $840,062.46 $591,240.61
02/00 $1,130,292.37 $728,822.30
03/00 $986,271.24 $652,223.08
04/00 $846,625.44 $586,368.11
05/00 $743,440.69 $535,002.27
06/00 $895,847.85 $604,124.56
07/00 $801,778.36 $552,351.08
08/00 $918,818.31 $610,458.42
9/30/00 $864,491.36 $580,118.64
</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.
--------------------------------------------------------------------------------
19
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
---------------------------------------------------------------
COMMON STOCK -- 94.9%
---------------------------------------------------------------
ADVERTISING -- 0.3%
Getty Images, Inc.*.............. 22,600 $ 687,888
------------
AEROSPACE/DEFENSE -- 3.0%
Aeroflex, Inc.*.................. 20,100 977,363
Newport Corp..................... 31,100 4,953,159
Photon Dynamics, Inc.*........... 7,900 298,225
Remec, Inc.*..................... 41,450 1,220,184
Teledyne Technologies, Inc.*..... 17,800 518,425
------------
7,967,356
------------
AIRLINES -- 0.4%
Atlantic Coast Airlines
Holdings, Inc.*................ 10,300 331,531
Skywest, Inc..................... 14,800 758,500
------------
1,090,031
------------
APPAREL -- 0.6%
Columbia Sportswear Co.*......... 13,900 637,663
Timberland Co. Cl. A*............ 25,400 1,041,400
------------
1,679,063
------------
APPLICATIONS SOFTWARE -- 2.3%
Exchange Applications, Inc.*..... 32,800 148,623
EXE Technologies, Inc.*.......... 15,900 238,500
HNC Software, Inc.*.............. 14,100 1,153,556
Iona Technologies PLC*........... 20,900 1,452,550
National Instruments Corp.*...... 17,950 792,044
OpenTV Corp. Cl. A*.............. 35,346 1,175,255
Resonate, Inc.*.................. 6,300 248,850
SilverStream Software, Inc.*..... 4,900 147,613
WebTrends Corp.*................. 20,300 758,713
------------
6,115,704
------------
ATHLETIC EQUIPMENT -- 0.1%
Direct Focus, Inc.*.............. 9,400 373,650
------------
AUCTIONS -- 0.2%
Sothebys Holding, Inc. Cl. A..... 17,100 425,363
------------
AUTO-TRUCKS -- 0.1%
Oshkosh Truck Co. Cl. B.......... 7,900 306,125
------------
BATTERY SYSTEMS -- 0.1%
Valence Technology, Inc.*........ 18,500 319,125
------------
BEVERAGES-ALCOHOLIC -- 0.3%
Constellation Brands, Inc. Cl.
A*............................. 13,900 754,944
------------
BIOTECHNOLOGY -- 5.5%
Abgenix, Inc.*................... 8,200 662,663
Arena Pharmaceuticals, Inc.*..... 6,300 270,900
Aurora Biosciences Corp.*........ 12,300 836,400
Aviron*.......................... 17,900 1,043,794
CuraGen Corp.*................... 28,200 1,502,530
Deltagen, Inc.*.................. 10,700 331,031
Enzon, Inc.*..................... 48,500 3,201,000
Genencor International, Inc.*.... 8,400 248,850
Genzyme Transgenics Corp.*....... 19,500 687,375
Illumina, Inc.*.................. 5,600 254,100
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
Biotechnology (Continued)
Invitrogen Corp.*................ 46,600 $ 3,314,425
Large Scale Biology Corp.*....... 6,900 225,975
Myriad Genetics, Inc.*........... 5,100 438,600
Sangamo Biosciences, Inc.*....... 10,500 406,875
Trimeris, Inc.*.................. 10,100 706,369
Visible Genetics, Inc.*.......... 10,800 436,050
------------
14,566,937
------------
BROADCASTING -- 1.4%
Pegasus Communications Corp. Cl.
A*............................. 18,200 879,288
Price Communications Corp.*...... 28,500 557,531
Radio One, Inc.
Cl. D*......................... 25,600 180,800
SBS Broadcasting S.A.*........... 17,100 680,794
Sirius Satellite Radio, Inc.*.... 18,900 999,338
XM Satellite Radio
Holdings, Inc.*................ 11,700 503,831
------------
3,801,582
------------
CASINO SERVICES -- 0.3%
Anchor Gaming*................... 9,500 755,844
------------
CHEMICALS -- 0.1%
Georgia Gulf Corp................ 31,100 355,706
------------
COMMUNICATIONS SOFTWARE -- 0.7%
Puma Technology, Inc.*........... 30,900 627,656
Seachange
International, Inc.*........... 7,100 236,963
SignalSoft Corp.*................ 7,000 284,375
SpeechWorks
International, Inc.*........... 2,800 173,600
Ulticom, Inc.*................... 5,600 263,900
Witness Systems, Inc.*........... 8,800 158,950
------------
1,745,444
------------
COMPUTER SERVICES -- 2.7%
Aspen Technology, Inc.*.......... 18,600 839,325
eLoyalty Corp.*.................. 12,800 163,200
Entrust Technologies, Inc.*...... 15,500 428,188
Internet Security
Systems, Inc.*................. 33,600 2,524,200
McAfee.com Corp. Cl. A*.......... 9,300 138,338
M-Systems Flash Disk Pioneers,
Ltd.*.......................... 54,200 2,069,763
Silicon Storage
Technology, Inc.*.............. 7,600 206,625
SonicWALL, Inc.*................. 25,200 718,200
------------
7,087,839
------------
COMPUTER SOFTWARE -- 7.0%
BindView Development Corp.*...... 47,600 359,975
Broadbase Software, Inc.*........ 26,000 352,625
Business Objects S.A. -- ADR*.... 32,000 3,618,000
Kana Communications, Inc.*....... 9,604 213,689
Mercury Interactive Corp.*....... 79,300 12,430,274
NetIQ Corp.*..................... 9,224 605,902
Numerical Technologies, Inc.*.... 6,800 195,925
Pivotal Corp.*................... 11,200 588,000
Transaction Systems
Architects, Inc. Cl. A*........ 11,000 178,750
------------
18,543,140
------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
20
<PAGE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (Continued)
---------------------------------------------------------------
COMPUTERS -- 1.3%
Adept Technology, Inc.*.......... 14,200 $ 746,388
Affiliated Computer
Services, Inc. Cl. A*.......... 19,500 972,563
Concurrent Computer Corp.*....... 28,000 532,000
Extended Systems, Inc.*.......... 10,400 559,000
Globix Corp.*.................... 27,500 641,094
------------
3,451,045
------------
CONSULTING SERVICES -- 0.1%
Management Network
Group, Inc.*................... 8,200 171,175
------------
CONSUMER SERVICES -- 0.5%
Forrester Research, Inc.*........ 14,500 924,375
Western Gas Resources, Inc....... 14,000 350,875
------------
1,275,250
------------
CRUISE LINES -- 0.1%
American Classic Voyages Co.*.... 12,600 184,275
------------
DATA PROCESSING/MANAGEMENT SOFTWARE -- 1.6%
Documentum, Inc.*................ 21,700 1,761,769
Polycom, Inc.*................... 28,000 1,875,126
Reynolds & Reynolds Co. Cl. A.... 29,600 588,300
------------
4,225,195
------------
DISTRIBUTION/WHOLESALE -- 0.2%
United Stationers, Inc.*......... 23,700 636,938
------------
DIVERSIFIED FINANCIAL SERVICES -- 0.2%
London Pacific Group, Ltd. --
ADR............................ 27,900 554,513
------------
DRILLING -- 1.8%
Atwood Oceanics, Inc.*........... 6,400 266,800
Marine Drilling Co.*............. 60,300 1,722,319
Nabors Industries*............... 20,762 1,087,929
Patterson Energy, Inc.*.......... 14,000 481,250
Precision Drilling Corp.*........ 12,800 456,000
Unit Corp.*...................... 10,700 157,825
UTI Energy Corp.*................ 10,400 464,100
------------
4,636,223
------------
DRUGS/PHARMACEUTICALS -- 6.7%
Advance Paradigm, Inc.*.......... 24,500 1,033,594
Alexion
Pharmaceuticals, Inc.*......... 13,900 1,584,600
Alpharma, Inc. Cl. A............. 21,500 1,314,188
Cubist Pharmaceuticals, Inc.*.... 5,600 291,550
Dura Pharmaceuticals, Inc.*...... 49,200 1,740,450
ImmundGen, Inc.*................. 8,100 276,919
King Pharmaceuticals, Inc.*...... 15,656 523,498
Medarex, Inc.*................... 20,600 2,416,637
Medicis Pharmaceutical Corp. Cl.
A*............................. 36,500 2,244,749
NBTY, Inc.*...................... 18,300 119,521
NeoPharm, Inc.*.................. 36,300 1,433,850
OSI Pharmaceuticals, Inc.*....... 33,200 2,324,000
OXMA, Ltd.*...................... 1,500 21,656
Pharmacopeia, Inc.*.............. 15,500 395,250
Priority Healthcare Corp. Cl.
B*............................. 14,400 1,098,000
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
Drugs/Pharmaceuticals (Continued)
Titan Pharmaceuticals, Inc.*..... 5,700 $ 370,500
United Therapeutics Corp.*....... 6,300 550,463
------------
17,739,425
------------
E-COMMERCE -- 0.8%
PurchasePro.com, Inc.*........... 25,000 2,196,874
------------
EDUCATIONAL SOFTWARE -- 0.4%
SmartForce Public Ltd., Co. --
ADR*........................... 19,700 933,288
------------
ELECTRONIC COMPONENTS/SEMICONDUCTORS -- 11.3%
ACT Manufacturing, Inc.*......... 15,500 817,625
Alpha Industries, Inc.*.......... 42,200 1,437,438
Benchmark Electronics, Inc.*..... 10,400 540,800
C-Cube Mircosystems, Inc.*....... 22,100 453,050
Electronic Scientific
Industries, Inc.*.............. 36,800 1,292,600
EMCORE Corp...................... 59,800 2,486,370
Exar Corp.*...................... 8,500 1,028,500
Fairchild Semiconductor
International Cl. A*........... 7,100 199,688
Globespan, Inc.*................. 16,700 2,037,400
Integrated Device
Technology, Inc.*.............. 19,800 1,791,900
Integrated Silicon Solution*..... 8,300 117,756
International Rectifier*......... 22,800 1,152,825
Kent Electronics Corp.*.......... 31,300 747,288
LTX Corp.*....................... 18,000 340,875
MEMC Electronic
Materials, Inc.*............... 17,100 220,163
Methode Electronics, Inc. Cl.
A.............................. 23,300 1,032,481
Micrel, Inc.*.................... 48,900 3,276,299
Microsemi Corp.*................. 24,500 934,063
Microtune, Inc.*................. 1,400 74,988
Photronics, Inc.*................ 15,000 327,188
Pixelworks, Inc.*................ 20,800 991,900
Power Integrations, Inc.*........ 28,700 400,006
PSi Technologies
Holdings, Inc.*................ 6,900 87,975
Qlogic Corp.*.................... 27,800 2,446,400
S3, Inc.*........................ 28,400 292,875
Semtech Corp.*................... 32,000 1,380,000
Transwitch Corp.*................ 38,850 2,476,688
Tvia, Inc.*...................... 7,200 129,150
Varian Semiconductor Equipment
Association, Inc.*............. 22,500 842,344
Virata Corp.*.................... 8,800 581,900
------------
29,938,535
------------
ELECTRONICS -- 3.9%
Active Power, Inc.*.............. 7,100 440,200
Amphenol Corp. Cl. A*............ 28,600 1,628,413
Artesyn Technologies, Inc.*...... 27,400 798,025
Cymer, Inc.*..................... 38,500 1,181,469
DDi Corp.*....................... 24,000 1,062,000
Excalibur Technologies Corp.*.... 13,700 920,469
Mechanical Technology, Inc.*..... 25,600 276,800
Merix Corp.*..................... 5,100 330,544
SMTC Corp.*...................... 6,400 137,600
TTM Technologies, Inc.*.......... 12,600 296,100
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
21
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- CONTINUED
--------------------------------------------------------------------------------
SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (Continued)
---------------------------------------------------------------
Electronics (Continued)
Veeco Instruments, Inc.*......... 15,900 $ 1,689,623
Zygo Corp.*...................... 17,100 1,487,700
------------
10,248,943
------------
ENGINEERING & CONSTRUCTION -- 0.3%
Dycom Industries, Inc.*.......... 19,500 811,688
------------
ENTERPRISE SOFTWARE -- 1.3%
AvantGo, Inc.*................... 2,000 40,000
JDA Software Group, Inc.*........ 23,100 294,525
Manugistics Group, Inc.*......... 30,900 3,032,062
------------
3,366,587
------------
ENTERTAINMENT -- 1.6%
Macrovision Corp.*............... 51,700 4,187,699
------------
FOOD -- 0.1%
Michael Foods, Inc............... 8,900 208,038
------------
GAMBLING (NON-HOTEL) -- 0.1%
Argosy Gaming Co.*............... 10,700 193,938
------------
HEALTH CARE -- 0.3%
Oxford Health Plans, Inc.*....... 26,100 802,168
------------
HOME FURNISHINGS -- 0.8%
Ethan Allen Interiors, Inc....... 43,050 1,218,853
Williams Sonoma*................. 27,000 938,250
------------
2,157,103
------------
HOSPITALITY -- 0.2%
Orient Express Hotels, Ltd. Cl.
A*............................. 24,000 462,000
------------
HUMAN RESOURCES -- 0.5%
Administaff, Inc.*............... 17,600 1,332,320
------------
INSTRUMENTS -- 0.4%
Microchip Technology, Inc.*...... 22,050 729,028
Therma-Wave, Inc.*............... 7,700 221,375
------------
950,403
------------
INTERNET CONTENT -- 0.3%
CNET Networks, Inc.*............. 6,500 158,336
Internet Pictures Corp.*......... 7,600 41,325
NaviSite, Inc.*.................. 16,000 431,000
S1 Corp.*........................ 5,800 69,238
SportsLine.com, Inc.*............ 10,800 149,175
------------
849,074
------------
INTERNET SOFTWARE -- 4.8%
Art Technology Group, Inc.*...... 14,300 1,354,925
Backweb Technologies, Ltd.*...... 8,700 88,223
CacheFlow, Inc.*................. 14,500 2,073,499
Commtouch Software, Ltd.*........ 34,100 645,769
HotJobs.com, Ltd.*............... 23,100 394,144
Netegrity, Inc.*................. 16,350 1,144,500
Netopia, Inc.*................... 21,500 236,500
PC-Tel, Inc.*.................... 10,900 253,425
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
Internet Software (Continued)
Radware, Ltd.*................... 17,400 $ 522,000
Retek, Inc.*..................... 4,800 254,400
Saba Software, Inc.*............. 10,100 282,800
Software.com, Inc.*.............. 12,300 2,231,680
Symantec Corp.*.................. 28,100 1,236,400
TeleCommunication
Systems, Inc.*................. 7,000 133,875
Versata, Inc.*................... 15,900 421,350
Vitria Technology, Inc.*......... 13,300 620,113
WatchGuard
Technologies, Inc.*............ 13,900 834,000
------------
12,727,603
------------
INVESTMENT COMPANIES -- 0.5%
American Capital Strategies...... 11,800 279,513
SEI Investment Co................ 15,900 1,124,925
------------
1,404,438
------------
MACHINERY-DIVERSIFIED -- 0.7%
Brooks Automation, Inc.*......... 9,600 318,000
GaSonics International Corp.*.... 38,700 474,075
National-Oilwell, Inc.*.......... 26,700 834,375
Semitool, Inc.*.................. 10,400 133,250
Universal Compression
Holdings, Inc.*................ 5,700 176,344
------------
1,936,044
------------
MEDICAL-GENERIC DRUGS -- 0.2%
Barr Laboratories, Inc.*......... 9,100 603,444
------------
MEDICAL-HMO -- 0.1%
Mid Atlantic Medical
Services, Inc.*................ 15,700 237,463
------------
MEDICAL-HOSPITAL -- 0.0%
Triad Hospitals, Inc.*........... 2,000 58,750
------------
MEDICAL INSTRUMENTS -- 0.5%
Bruker Daltonics Inc.*........... 8,400 372,750
Varian, Inc.*.................... 19,200 826,800
------------
1,199,550
------------
MEDICAL LABORATORY & TESTING SERVICES -- 0.0%
Laboratory Corporation Of America
Holdings*...................... 600 71,850
------------
MEDICAL SUPPLIES/EQUIPMENT -- 0.5%
Accredo Health, Inc.*............ 9,800 478,975
Caliper Technologies Corp.*...... 6,900 399,769
Immunomedics, Inc.*.............. 9,600 201,000
Owens & Minor, Inc............... 14,000 220,500
------------
1,300,244
------------
MEDICAL-WHOLESALE DRUG DISTRIBUTION -- 0.2%
Amerisource Health Corp.*........ 9,100 427,700
------------
MISCELLANEOUS MANUFACTURING -- 0.1%
Simpson Manufacturing, Inc.*..... 5,300 236,844
------------
NETWORKING PRODUCTS -- 1.6%
Anixter International, Inc.*..... 27,800 809,675
Black Box Corp.*................. 11,500 536,188
Elbit, Ltd....................... 18,500 168,813
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
22
<PAGE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (Continued)
---------------------------------------------------------------
Networking Products (Continued)
MMC Networks, Inc.*.............. 20,600 $ 2,605,900
Optibase, Ltd.*.................. 3,000 52,688
Turnstone Systems, Inc.*......... 3,800 176,225
------------
4,349,489
------------
OIL & GAS PRODUCERS -- 1.2%
Chieftain
International, Inc.*........... 5,200 107,575
Forest Oil Corp.*................ 29,200 472,675
Louis Dreyfus Natural Gas
Corp.*......................... 20,400 808,350
Stone Energy Corp.*.............. 19,600 1,078,000
Swift Energy Corp.*.............. 14,300 594,344
------------
3,060,944
------------
OIL & GAS SERVICES -- 2.6%
BJ Services, Co.*................ 23,200 1,418,100
CAL Dive International, Inc.*.... 23,900 1,366,779
Global Industries, Ltd.*......... 47,700 596,250
Maverick Tube Corp.*............. 4,900 131,994
Pride International, Inc.*....... 54,300 1,438,950
Seitel, Inc.*.................... 10,200 146,625
Smith International, Inc.*....... 11,500 937,969
Varco International, Inc.*....... 46,966 977,480
------------
7,014,147
------------
OPTICAL RECOGNITION SOFTWARE -- 0.2%
Optimal Robotics Corp. Cl. A*.... 10,400 418,600
------------
OTHER COMMERCIAL SERVICES -- 0.7%
Korn-Ferry International*........ 24,500 926,406
NOVA Corp.*...................... 20,700 354,488
On Assignment, Inc.*............. 20,000 627,500
------------
1,908,394
------------
PHOTO EQUIPMENT & SUPPLIES -- 0.2%
Concord Camera Corp.*............ 21,400 548,375
------------
PUBLISHING -- 0.2%
Information Holdings, Inc.*...... 4,800 170,100
Playboy Enterprises Cl. B*....... 15,500 231,531
------------
401,631
------------
RECREATIONAL PRODUCTS -- 0.2%
Monaco Coach Corp.*.............. 9,500 156,750
Winnebago Industries, Inc........ 20,400 255,000
------------
411,750
------------
RENTAL AUTO/EQUIPMENT -- 0.2%
Rent-A-Center, Inc.*............. 17,200 596,625
------------
RETAIL-APPAREL -- 3.1%
Abercrombie & Fitch Co. Cl. A*... 83,800 1,597,438
American Eagle
Outfitters, Inc.*.............. 43,000 1,354,500
AnnTaylor Stores Corp.*.......... 62,000 2,383,123
Children's Place Retail
Stores, Inc.*.................. 17,300 445,475
Genesco, Inc.*................... 8,200 138,888
Kenneth Cole Productions, Inc.
Cl. A*......................... 17,150 605,609
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
Retail-Apparel (Continued)
The Men's Wearhouse, Inc.*....... 39,200 $ 1,109,850
Too, Inc.*....................... 20,100 477,375
------------
8,112,258
------------
RETAIL-COMPUTER EQUIPMENT -- 0.8%
CDW Computer Centers, Inc.*...... 14,200 979,800
Insight Enterprises, Inc.*....... 46,350 1,263,037
------------
2,242,837
------------
RETAIL-DISCOUNT -- 0.1%
Factory 2-U Stores, Inc.*........ 12,400 378,975
------------
RETAIL-ELECTRONICS -- 0.1%
InterTAN, Inc.*.................. 15,900 229,556
------------
RETAIL-RESTAURANTS -- 0.2%
Jack in the Box, Inc.*........... 20,900 448,044
Sonic Corp.*..................... 12,900 107,231
------------
555,275
------------
RETAIL-SUNGLASSES -- 0.1%
Sunglass Hut
International, Inc.*........... 25,100 163,933
------------
SUPERCONDUCTOR PRODUCTS & SYSTEMS -- 0.3%
American Superconductor Corp.*... 15,600 766,837
------------
TELECOMMUNICATIONS -- 2.5%
Airspan Networks, Inc.*.......... 4,800 55,200
Alamosa PCS Holdings, Inc.*...... 16,800 271,950
C-COR.net Corp.*................. 16,300 249,594
Focal Communications Corp.*...... 23,500 362,781
International FiberCom, Inc.*.... 40,600 593,775
Liberty Satellite &
Technology, Inc. Cl. A*........ 12,900 137,063
MasTec, Inc.*.................... 24,550 767,188
Motient Corp.*................... 21,500 303,688
MRV Communications, Inc.*........ 25,600 1,160,000
OmniSky Corp.*................... 10,800 219,375
Powertel, Inc.*.................. 17,400 1,323,488
Startek, Inc.*................... 6,800 197,200
ViaSat, Inc.*.................... 10,200 228,225
Viatel, Inc.*.................... 31,600 323,900
Western Wireless Corp Cl. A*..... 11,500 409,688
------------
6,603,115
------------
TELECOMMUNICATIONS EQUIPMENT -- 10.1%
Advanced Fibre
Communications, Inc.*.......... 9,200 348,450
Airnet Communications Corp.*..... 15,600 348,075
American Tower Systems Cl. A*.... 28,700 1,081,630
Anaren Microwave, Inc.*.......... 19,650 2,665,028
Antec Corp.*..................... 9,100 268,450
Audiocodes, Ltd.*................ 21,400 1,821,674
Aware, Inc.*..................... 19,100 735,350
BreezeCom, Ltd.*................. 17,400 573,113
Commscope, Inc.*................. 20,600 504,700
Corsair Communications, Inc.*.... 23,800 185,938
Digital Lightwave, Inc.*......... 24,800 1,801,100
Ditech Communications Corp.*..... 25,300 1,037,300
DMC Stratex Networks, Inc.*...... 31,300 502,756
DSP Group, Inc.*................. 34,200 1,278,225
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
23
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- CONTINUED
--------------------------------------------------------------------------------
SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (Continued)
---------------------------------------------------------------
Telecommunications Equipment (Continued)
Glenayre Technologies, Inc.*..... 38,200 $ 415,425
Integrated Telecom
Express, Inc.*................. 3,500 72,625
Natural Microsystems Corp.*...... 23,300 1,253,467
NEON Communications, Inc.*....... 6,000 209,250
Netro Corp.*..................... 18,200 1,078,350
Osicom Technologies, Inc.*....... 6,900 170,775
Peco II, Inc.*................... 3,500 163,844
Pinnacle Holdings, Inc.*......... 29,900 796,088
Powerwave Technologies, Inc.*.... 33,500 1,271,953
Sierra Wireless, Inc.*........... 12,000 738,000
Tollgrade
Communications, Inc.*.......... 15,100 2,096,069
Triton Network Systems, Inc.*.... 4,400 57,750
TUT Systems, Inc.*............... 36,100 3,115,879
Vyyo, Inc.*...................... 18,300 549,000
Westell Technologies, Inc. Cl.
A*............................. 21,400 275,525
WJ Communications, Inc.*......... 36,500 1,350,499
------------
26,766,288
------------
TELECOMMUNICATIONS SERVICES -- 0.3%
iBasis, Inc.*.................... 22,100 350,838
INET Technologies, Inc.*......... 16,400 479,700
Z-Tel Technologies, Inc.*........ 6,300 45,675
------------
876,213
------------
THERAPEUTICS -- 1.3%
Cell Therapeutics, Inc.*......... 50,300 3,354,379
------------
TOYS/GAMES/HOBBIES -- 0.2%
WMS Industries, Inc.*............ 24,600 553,500
------------
TRANSPORTATION-AIR FREIGHT -- 0.7%
Atlas Air Inc.*.................. 17,000 718,250
Expeditors
International, Inc............. 26,000 1,171,624
------------
1,889,874
------------
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
TRANSPORTATION-MARINE -- 0.1%
Knightsbridge Tankers, Ltd....... 7,100 $ 155,313
------------
TRANSPORTATION-TRUCKS -- 0.3%
American Freightways Corp.*...... 18,600 295,275
Forward Air Corp.*............... 12,850 452,159
Swift Transportation
Co., Inc.*..................... 7,800 101,888
------------
849,322
------------
VENTURE CAPITAL -- 0.1%
Acacia Research Corp.*........... 7,200 251,100
------------
TOTAL COMMON STOCK -- 94.9%
(Cost: $180,533,366)..........................
250,751,098
------------
<CAPTION>
PRINCIPAL
AMOUNT
---------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 6.5%
---------------------------------------------------------------
Bank One Grand Cayman
6.110%, 10/02/00
(Cost: $17,258,790)............ $17,258,790 17,258,790
------------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 101.4%
(Cost: $197,792,156)........................ 268,009,888
LIABILITIES IN EXCESS OF OTHER ASSETS --
(1.4)%........................................ (3,742,229)
------------
NET ASSETS -- 100.0%.......................... $264,267,659
------------
------------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
24
<PAGE>
VALUE FUND RETIREMENT SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: MARK STUCKELMAN, Partner, Portfolio Manager; KELLY KO, CFA,
Portfolio Manager; JOHN J. KANE, Partner, Portfolio Manager; LARRY SPEIDELL,
CFA, Partner, Director of Quantitative Research and Portfolio Management; 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: The US stock market was turbulent during the six months ended
September 30, 2000.
In April and May, worries over rising interest rates, high valuations of
technology stocks and signs of resurgent inflation sent equity prices lower.
Stocks rallied in June and August, reflecting sentiment that the Federal
Reserve's May interest rate increase was the last in its series of tightening
moves. Despite August's rally, equities drifted lower during the last three
months of the period due to the uncertain impact of rising oil prices and a
weakening euro on corporate earnings. In addition, investors grew increasingly
anxious about the outcome of upcoming US elections.
Amid this volatile backdrop, there was a rotation from growth stocks to value
stocks. Indicative of this shift in investor preference, large-cap value stocks
posted gains during the period, driven by:
- Increasing investor attention in response to the major sell-off within the
high-growth technology sector
- Expectations that the Federal Reserve was done raising interest rates
- Consolidation within value-oriented industries like financial services,
brokerage and insurance
- The positive impact of rising oil prices on the energy sector, particularly
oilfield service companies
PERFORMANCE: For the six-month period ended September 30, 2000, the Fund
gained 5.7% versus a 2.8% increase in the Russell 1000 Value Index and a 3.6%
decline in the S&P 500 Index.
PORTFOLIO SPECIFICS: Stock selection was the main driver of the Fund's
outperformance during the period. Among the Fund's best-performing holdings were
Boeing, which benefited from an increase in the rate of 737 passenger jet
production and the announcement of a new CFO; Citigroup, which demonstrated
strength in its global consumer, corporate and investment banking businesses;
Peco Energy, which profited from stronger volumes and higher electricity
pricing; and Unicom, which showed improvement in nuclear capacity and operating
expense levels.
MARKET OUTLOOK: While we are closely monitoring the impact of rising oil
prices and a weakening euro on large-cap value stocks, we remain positive on our
outlook for this market segment due to:
- Attractive valuations
- The consensus view that the Federal Reserve has engineered a soft landing
for the US economy, which should benefit value companies in the
producers/manufacturing and financial services sectors
- The likelihood that oil prices will stabilize or decline, a favorable
development for transportation and basic materials companies
--------------------------------------------------------------------------------
25
<PAGE>
VALUE FUND RETIREMENT SHARES -- UNAUDITED
------------------------------------------------------------------------
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
11.57% As of 9/30/00 20.61%
</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
05/96 $256,696.43 $256,450.00
06/96 $263,640.87 $257,424.51
07/96 $257,440.48 $246,046.35
08/96 $264,632.94 $251,235.46
09/96 $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
01/97 $326,636.90 $305,459.36
02/97 $330,605.16 $307,854.16
03/97 $316,220.24 $295,204.43
04/97 $332,589.29 $312,828.13
05/97 $357,390.87 $331,873.11
06/97 $368,799.60 $346,741.03
07/97 $411,706.35 $374,331.21
08/97 $402,033.73 $353,361.17
09/97 $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
01/98 $432,787.70 $387,655.49
02/98 $467,757.94 $415,613.20
03/98 $497,767.86 $436,896.75
04/98 $500,496.03 $441,291.93
05/98 $498,263.89 $433,706.13
06/98 $509,176.59 $451,323.27
07/98 $499,255.95 $446,516.68
08/98 $421,875.00 $381,959.30
09/98 $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
01/99 $527,529.76 $513,617.55
02/99 $509,176.59 $497,654.32
03/99 $518,601.19 $517,565.47
04/99 $559,027.78 $537,595.25
05/99 $550,595.24 $524,902.63
06/99 $565,972.22 $554,034.73
07/99 $554,563.49 $536,748.84
08/99 $534,722.22 $534,065.10
09/99 $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
01/00 $530,869.82 $566,743.62
02/00 $488,021.58 $556,015.17
03/00 $541,581.88 $610,393.45
04/00 $541,581.88 $592,026.71
05/00 $540,585.41 $579,878.32
06/00 $516,421.00 $594,172.32
07/00 $534,357.47 $584,903.23
08/00 $564,002.48 $621,231.57
9/30/00 $572,223.36 $588,436.76
</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.
--------------------------------------------------------------------------------
26
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
VALUE FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
<S> <C> <C>
---------------------------------------------------------------
COMMON STOCK -- 97.0%
---------------------------------------------------------------
AEROSPACE/DEFENSE -- 2.7%
Boeing Co.......................... 9,700 $ 611,100
United Technologies Corp........... 8,700 602,475
-----------
1,213,575
-----------
AIRLINES -- 1.6%
Delta Air Lines, Inc............... 16,500 732,187
-----------
AUTO MANUFACTURER -- 1.9%
Ford Motor Co...................... 33,040 836,325
-----------
AUTOMOTIVE & TRANSPORT EQUIPMENT -- 0.7%
TRW, Inc........................... 7,900 320,938
-----------
BEVERAGES-NON-ALCOHOLIC -- 1.9%
PepsiCo, Inc....................... 18,200 837,200
-----------
BROADCASTING -- 2.0%
AT&T Corp. -- Liberty Media Corp.
Cl. A*........................... 20,200 363,600
Cablevision Systems Corp. Cl. A*... 7,800 517,237
-----------
880,837
-----------
CHEMICALS -- 1.2%
Dow Chemical Co.................... 21,900 546,131
-----------
COMMERCIAL SERVICES -- 0.8%
Cendant Corp.*..................... 34,300 373,012
-----------
COMPUTER SERVICES -- 0.5%
Arrow Electronics, Inc.*........... 6,100 207,781
-----------
COMPUTER SOFTWARE -- 0.5%
Microsoft Corp.*................... 3,500 210,875
-----------
COMPUTERS -- 2.5%
Hewlett-Packard Co................. 5,500 533,500
International Business Machines
Corp............................. 5,000 562,500
-----------
1,096,000
-----------
COSMETICS & TOILETRIES -- 2.8%
Kimberly-Clark Corp................ 11,200 625,100
Procter & Gamble Co................ 9,100 609,700
-----------
1,234,800
-----------
DIVERSIFIED FINANCIAL SERVICES -- 13.6%
A.G. Edwards, Inc.................. 4,400 230,175
Ambac Financial Group, Inc......... 8,700 637,275
Citigroup, Inc..................... 40,933 2,212,940
Fannie Mae......................... 12,200 872,300
Freddie Mac........................ 9,800 529,812
J.P. Morgan & Co., Inc............. 6,900 1,127,288
Merrill Lynch & Co, Inc............ 3,300 217,800
Morgan Stanley Dean Witter & Co.... 2,400 219,450
-----------
6,047,040
-----------
DIVERSIFIED MANUFACTURING -- 6.2%
Clorox Company..................... 12,200 482,662
Dover Corp......................... 15,800 741,612
General Electric Co................ 13,900 801,856
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
Diversified Manufacturing (Continued)
Honeywell International, Inc....... 12,500 $ 445,312
Textron, Inc....................... 6,500 299,813
-----------
2,771,255
-----------
DRUGS/PHARMACEUTICALS -- 5.0%
Abbott Laboratories................ 13,200 627,825
ICN Pharmaceuticals, Inc........... 7,900 262,675
Johnson & Johnson.................. 6,800 638,775
King Pharmaceuticals, Inc.*........ 6,800 227,375
Merck & Co., Inc................... 6,500 483,844
-----------
2,240,494
-----------
ELECTRIC -- 5.0%
Allegheny Energy, Inc.............. 11,900 454,431
Energy East Corp................... 20,200 457,025
PECO Energy Co..................... 13,400 811,537
Unicom Corp........................ 9,000 505,688
-----------
2,228,681
-----------
ELECTRONIC COMPONENTS -- 1.0%
Intel Corp......................... 5,000 207,812
Vishay Intertechnology, Inc.*...... 7,200 221,400
-----------
429,212
-----------
FOOD -- 0.5%
General Mills, Inc................. 6,700 237,850
-----------
HEALTH CARE -- 1.4%
HEALTHSOUTH Corp.*................. 74,100 602,062
-----------
HEALTH PRODUCTS & SERVICES -- 2.3%
Baxter International, Inc.......... 5,600 446,950
Tenet Healthcare Corp.*............ 16,500 600,188
-----------
1,047,138
-----------
INSTRUMENTS-CONTROLS -- 1.1%
Johnson Controls, Inc.............. 8,800 468,050
-----------
INSURANCE -- 6.5%
Allstate Corp...................... 18,400 639,400
American International
Group, Inc....................... 11,062 1,058,495
Jefferson-Pilot Corp............... 8,100 549,788
Lincoln National Corp.............. 13,100 630,438
-----------
2,878,121
-----------
MEDIA -- 2.0%
Walt Disney Co..................... 23,400 895,050
-----------
METALS -- 1.0%
Alcoa, Inc......................... 18,076 457,549
-----------
OIL & GAS PRODUCERS -- 8.9%
Conoco, Inc. Cl. B................. 29,200 786,575
Exxon Mobil Corp................... 26,505 2,362,258
USX-Marathon Group................. 29,100 825,713
-----------
3,974,546
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
27
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- CONTINUED
--------------------------------------------------------------------------------
VALUE FUND
<TABLE>
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (Continued)
---------------------------------------------------------------
REGIONAL/COMMERCIAL BANKS -- 9.3%
Comerica, Inc...................... 10,600 $ 619,437
FleetBoston Financial Corp......... 31,800 1,240,200
M & T Bank Corp.................... 900 459,000
Mellon Financial Corp.............. 12,300 570,413
U.S. Bancorp....................... 21,700 493,675
Union Planters Corp................ 6,800 224,825
Washington Mutual, Inc............. 13,500 537,469
-----------
4,145,019
-----------
RETAIL -- DEPARTMENT STORES -- 2.8%
Federated Department
Stores, Inc.*.................... 20,200 527,725
Sears, Roebuck &Co................. 22,300 722,966
-----------
1,250,691
-----------
TELECOMMUNICATIONS -- 9.3%
AT&T Corp.......................... 14,900 437,688
BellSouth Corp..................... 18,300 736,575
SBC Communications, Inc............ 23,300 1,165,000
Sprint Corp........................ 7,900 231,569
Verizon Communications............. 17,938 868,872
WorldCom, Inc.*.................... 24,200 735,075
-----------
4,174,779
-----------
<CAPTION>
NUMBER
OF SHARES VALUE
---------------------------------------------------------------
<S> <C> <C>
TOBACCO -- 1.0%
Philip Morris Co., Inc............. 15,600 $ 459,225
-----------
TRANSPORTATION -- TRAINS -- 1.0%
Union Pacific Corp................. 11,100 431,513
-----------
TOTAL COMMON STOCK
(Cost: $41,349,410)............................
43,227,936
-----------
<CAPTION>
PRINCIPAL
AMOUNT
---------------------------------------------------------------
<S> <C> <C>
TIME DEPOSIT -- 4.5%
---------------------------------------------------------------
Brown Brothers Harriman & Co.
6.110%, 10/2/00
(Cost: $2,018,951)............... $2,018,951 2,018,951
-----------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 101.5%
(Cost: $43,368,361).......................... 45,246,887
LIABILITES IN EXCESS OF OTHER ASSETS --
(1.5)%......................................... (680,731)
-----------
NET ASSETS -- 100.0%........................... $44,566,156
-----------
-----------
---------------
</TABLE>
* Non-income producing securities.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
28
<PAGE>
HIGH QUALITY BOND FUND RETIREMENT SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: CRITERION INVESTMENT MANAGEMENT, SUB ADVISORS: FRED S.
ROBERTSON, III, Chief Investment Officer, Fixed Income; JAMES E. KELLERMAN,
Portfolio Manager; MALCOM S. DAY, CFA, 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 range
from two to eight years.
MARKET OVERVIEW: During the six-month period ended September 30, 2000, bond
prices climbed higher amid a growing belief that the Federal Reserve was
adopting a more neutral monetary policy. Following a half-percentage point
interest rate hike in May, the Federal Reserve left short-term interest rates
unchanged at its two final policy meetings of the period.
The Federal Reserve's action in May marked the sixth in a series of interest
rate increases since June 1999 that lifted short-term interest rates by 1.75%.
Investors bid bond prices higher during the period as reports indicated that
rising rates were having a dampening effect on US economic growth. Government
data released late in the period reinforced the view that inflation remained
under control, another plus for the fixed income markets.
PERFORMANCE: The Fund gained 3.9% during the six-month period ended
September 30, 2000, while its benchmark, the Lehman Aggregate Bond Index, was up
4.8%.
PORTFOLIO SPECIFICS: The Fund had a slightly longer-than-benchmark sensitivity
to interest rates throughout the period. This relatively longer duration had a
positive effect on the Fund's results.
We moved to an overweight position in non-Treasury securities at the beginning
of July. Our aim was to capitalize on the compelling valuations of non-Treasury
securities and expectations that yield spreads would tighten as the Treasury
yield curve reached maximum inversion. Our forecast proved correct, and the
Fund's non-Treasury holdings favorably impacted returns.
However, the relative underperformance of international and high yield sectors
versus high-grade issues detracted from the Fund's performance this period.
MARKET OUTLOOK: Evidence that US GDP growth is slowing to a more moderate 3%
to 4% rate, the prospects for a downturn in global economic expansion, tame
inflation amid strong productivity gains and a competitive pricing environment
all bode well for the bond market.
In this favorable environment, we expect that interest rates will fall and the
yield curve will become less inverted. As this occurs, the Fund should benefit
as yield spreads of non-Treasury securities should continue to narrow.
--------------------------------------------------------------------------------
29
<PAGE>
HIGH QUALITY BOND FUND RETIREMENT SHARES -- UNAUDITED
------------------------------------------------------------------------
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>
ANNUALIZED TOTAL RETURNS
As of 9/30/00 SINCE
1 YEAR 5 YEARS INCEPTION
6.34% 6.45% 7.00%
</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
09/95 $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
01/96 $271,980.93 $264,912.67
02/96 $265,889.83 $260,303.19
03/96 $264,036.02 $258,481.07
04/96 $262,711.86 $257,033.58
05/96 $262,182.20 $256,519.51
06/96 $265,625.00 $259,956.87
07/96 $266,419.49 $260,658.75
08/96 $265,360.17 $260,215.63
09/96 $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
01/97 $279,396.19 $273,533.83
02/97 $281,514.83 $274,217.66
03/97 $278,072.03 $271,173.85
04/97 $282,044.49 $275,241.45
05/97 $284,957.63 $277,856.25
06/97 $288,665.25 $281,162.74
07/97 $296,345.34 $288,754.13
08/97 $293,167.37 $286,299.72
09/97 $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
01/98 $311,440.68 $302,924.69
02/98 $312,235.17 $302,682.35
03/98 $314,088.98 $303,711.47
04/98 $315,413.14 $305,290.77
05/98 $318,326.27 $308,191.03
06/98 $319,650.42 $310,810.66
07/98 $320,709.75 $311,463.36
08/98 $322,563.56 $316,540.21
09/98 $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
01/99 $337,394.07 $327,347.02
02/99 $331,567.80 $321,618.45
03/99 $334,216.10 $323,387.35
04/99 $336,864.41 $324,422.19
05/99 $333,421.61 $321,567.28
06/99 $331,039.30 $320,538.26
07/99 $329,169.02 $319,192.00
08/99 $327,565.93 $319,032.40
09/99 $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
01/00 $331,907.83 $321,276.48
02/00 $335,491.56 $325,163.93
03/00 $339,312.82 $329,456.09
04/00 $337,073.13 $328,500.67
05/00 $336,233.25 $328,336.42
06/00 $342,532.38 $335,165.82
07/00 $345,379.70 $338,215.83
08/00 $351,074.34 $343,119.95
9/30/00 $352,524.19 $345,281.61
</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.
--------------------------------------------------------------------------------
30
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
HIGH QUALITY BOND FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
---------------------------------------------------------------
CORPORATE BONDS -- 26.6%
---------------------------------------------------------------
AIRLINES -- 2.2%
Continental Airlines, Inc. 1999 1 A
6.545%, 02/02/19................. $ 262,423 $ 242,077
Northwest Airlines Corp. 1999 2 A
7.575%, 03/01/19................. 246,769 240,155
-----------
482,232
-----------
AUTO MANUFACTURERS -- 0.3%
Daimler Chrysler NA Holding
7.200%, 09/01/09................. 75,000 73,166
-----------
AUTO PARTS & EQUIPMENT -- 0.4%
Collins & Aikan Products
11.500%, 04/15/06................ 100,000 96,000
-----------
BROADCASTING -- 0.9%
Clear Channel Communications, Inc.
7.65%, 9/15/10................... 90,000 89,063
Viacom, Inc. Cl. B
7.700%, 07/30/10................. 100,000 102,046
-----------
191,109
-----------
COMPUTER SOFTWARE -- 0.5%
Computer Associates International
6.375%, 04/15/05................. 110,000 102,117
-----------
COMPUTERS -- 0.7%
Sun Microsystems, Inc.
7.650%, 08/15/09................. 150,000 150,314
-----------
CONSTRUCTION PRODUCTS -- 0.3%
Associated Materials, Inc.
9.250%, 3/01/08.................. 70,000 66,850
-----------
DIVERSIFIED FINANCIAL SERVICES -- 4.0%
ACME Intermediate Holdings Cl. B
0.000% (until 09/30/02,
thereafter 12.000% to maturity),
09/30/05......................... 100,000 68,000
Bank of America Corp.
7.800%, 02/15/10................. 100,000 103,092
Boeing Cap Corp.
7.375%, 9/27/10.................. 80,000 80,694
Discover Card
6.850%, 07/17/07................. 220,000 219,656
Ford Motor Credit Co.
7.375%, 10/28/09................. 150,000 146,553
Ford Motor Credit Co.
7.875%, 6/15/10.................. 60,000 60,621
Household Finance Corp.
7.880%, 03/01/07................. 30,000 30,772
Lehman Brothers Holding, Inc.
8.250%, 6/15/07.................. 100,000 103,550
RBF Finance Co.
11.375%, 3/15/09................. 50,000 57,563
-----------
870,501
-----------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------------------------------------------------------------
<S> <C> <C>
DRILLING SERVICES -- 0.7%
Parker Drilling Co.
5.500%, 08/01/04................. $ 180,000 $ 152,550
-----------
DRUGS/PHARMACEUTICALS -- 0.5%
Warner Chilcott, Inc. 144A
12.625%, 02/15/08................ 100,000 103,000
-----------
ELECTRIC -- 1.0%
Duke Energy Corp.
7.375%, 3/1/10................... 100,000 101,106
FPL Group Capital, Inc.
7.375%, 06/01/09................. 115,000 113,356
-----------
214,462
-----------
ELECTRICITY & GAS PRODUCERS -- 0.9%
Enron Corp.
7.375%, 05/15/19................. 150,000 143,469
Sempra Energy
7.950%, 03/01/10................. 50,000 50,485
-----------
193,954
-----------
FOOD-MISC/DIVERSIFIED -- 0.5%
ConAgra Foods, Inc.
8.250%, 9/15/30.................. 100,000 99,859
-----------
HEALTHCARE -- 0.7%
Abbey Health Care Group
9.500%, 11/01/02................. 150,000 149,813
-----------
INSURANCE -- 2.4%
American General Corp.
7.500%, 08/11/10................. 110,000 109,976
Florida Windstorm Under 144A
7.125%, 02/25/19................. 100,000 94,000
Hartford Financial Service Group
7.900%, 06/15/10................. 135,000 139,016
John Hancock Global 144A
7.900%, 07/02/10................. 130,000 134,189
Lumermens Mutual Casualty 144A
8.300%, 12/01/37................. 60,000 46,513
-----------
523,694
-----------
INTERNET SOFTWARE -- 0.8%
Exodus Communications, Inc.
10.750%, 12/15/09................ 120,000 116,400
Exodus Communications, Inc. 144A
11.250%, 07/01/08................ 50,000 49,625
-----------
166,025
-----------
INVESTMENT COMPANIES -- 0.0%
Dryden Investor Trust 144A
7.157%, 07/23/08................. 7,407 6,968
-----------
MACHINERY & EQUIPMENT -- 0.6%
Flowserve Corp. 144A
12.250%, 8/15/10................. 120,000 122,700
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
31
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- CONTINUED
--------------------------------------------------------------------------------
HIGH QUALITY BOND FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------------------------------------------------------------
<S> <C> <C>
CORPORATE BONDS (Continued)
---------------------------------------------------------------
MEDICAL-HOSPITALS -- 1.2%
Iasis Healthcare Corp. 144A
13.000%, 10/15/09................ $ 180,000 $ 185,850
Triad Hospitals Holdings, Inc.
11.000%, 05/15/09................ 60,000 61,500
-----------
247,350
-----------
METALS-DIVERSIFIED -- 0.9%
Alcoa, Inc.
7.375%, 08/01/10................. 40,000 40,336
Scotia Pacific Co. LLC
6.550%, 01/20/07................. 161,565 153,487
-----------
193,823
-----------
OIL & GAS PRODUCERS -- 1.1%
Gothic Production Corp. 144A
11.130%, 05/01/05................ 50,000 52,375
Phillips Petroleum Co.
8.750%, 5/25/10.................. 30,000 32,700
Tesoro Petroleum Corp. 144A
9.000%, 07/01/08................. 150,000 146,625
-----------
231,700
-----------
PACKAGING & CONTAINERS -- 1.4%
Four M Corp. Cl. B 144A
12.000%, 06/01/06................ 170,000 160,650
Stone Container Corp.
12.250%, 04/01/02................ 130,000 130,000
-----------
290,650
-----------
RENTAL AUTO/EQUIPMENT -- 0.5%
Hertz Corp.
7.625%, 08/15/07................. 110,000 109,028
-----------
RETAIL-BUILDING PRODUCTS -- 0.3%
Lowe's Companies, Inc.
8.250%, 06/01/10................. 60,000 62,830
-----------
TELECOMMUNICATIONS -- 3.8%
Global Crossing Holding, Ltd. 144A
9.630%, 05/15/08................. 120,000 120,000
Intercel, Inc.
0.000% (until 02/01/01,
thereafter
12.000% to maturity), 02/01/06... 10,000 10,100
Microcell Telecommunications, Inc.
Cl. B 144A
0.000% (until 06/01/04,
thereafter
12.000% to maturity), 06/01/09... 90,000 64,575
NTL, Inc.
0.000% (until 02/01/01,
thereafter
11.500% to maturity), 02/01/06... 110,000 103,950
NTL, Inc. 144A
5.750%, 12/15/09................. 70,000 46,957
Price Communications
Wireless, Inc. 144A
9.130%, 12/15/06................. 40,000 40,400
TeleCorp PCS, Inc. 144A
0.000% (until 04/15/04,
thereafter
11.625% to maturity), 04/15/09... 260,000 176,150
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------------------------------------------------------------
<S> <C> <C>
Telecommunications (Continued)
Triton PCS Holdings, Inc. 144A
0.000% (until 05/01/03,
thereafter
11.000% to maturity), 05/01/08... $ 270,000 $ 202,500
WorldCom, Inc.
8.250%, 05/15/10................. 60,000 63,717
-----------
828,349
-----------
TOTAL CORPORATE BONDS
(Cost: $5,828,153).............................
5,729,044
-----------
---------------------------------------------------------------
FOREIGN CORPORATE BONDS -- 9.4%
---------------------------------------------------------------
CANADA -- 2.6%
360 Networks, Inc. 144A
13.000%, 05/01/08................ 170,000 154,700
Abitibi-Consolidated, Inc.
8.550%, 8/1/10................... 80,000 81,400
Repap New Brunswick, Inc.
10.630%, 04/15/05................ 190,000 195,700
Teleglobe Inc.
7.200%, 07/20/09................. 130,000 125,938
-----------
557,738
-----------
CHILE -- 1.5%
Celulosa Arauco
7.200%, 09/15/09................. 60,000 54,932
Celulosa Arauco
8.625%, 8/15/10.................. 50,000 49,660
Chilgener S.A.
6.500%, 01/15/06................. 120,000 110,747
Empresa Nacional de Electricidad
8.125%, 02/01/49................. 120,000 97,003
-----------
312,342
-----------
MEXICO -- 0.7%
Pemex Finance, Ltd.
6.300%, 05/15/10................. 170,000 159,414
-----------
NETHERLANDS -- 0.9%
Koninklijke (Royal) KPN NV 144A
8.000%, 10/1/10.................. 100,000 100,341
Netia Holdings BV Ser B 144A
0.000% (until 11/01/01,
thereafter
11.250% to maturity), 11/01/07... 130,000 85,150
-----------
185,491
-----------
UNITED KINGDOM -- 3.1%
Amvescap PLC 144A
6.600%, 05/15/05................. 110,000 104,689
Barclays Bank PLC
7.400%, 12/15/09................. 85,000 84,312
Energis PLC 144A
9.750%, 06/15/09................. 60,000 59,100
ONO Finance PLC 144A
13.000%, 05/01/09................ 180,000 162,000
Telewest Communications PLC 144A
0.000% (until 04/15/04,
thereafter
9.250% to maturity), 04/15/09.... 370,000 197,950
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
32
<PAGE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------------------------------------------------------------
<S> <C> <C>
FOREIGN CORPORATE BONDS (Continued)
---------------------------------------------------------------
United Kingdom (Continued)
United Utilities PLC
6.875%, 08/15/28................. $ 90,000 $ 72,396
-----------
680,447
-----------
VENEZUELA -- 0.6%
Cerro Negro Finance, Ltd. 144A
7.330%, 12/01/09................. 70,000 60,900
PDVSA Finance Ltd. 1998 1
7.500%, 11/15/28................. 80,000 60,634
-----------
121,534
-----------
TOTAL FOREIGN CORPORATE BONDS
(Cost: $2,059,495).............................
2,016,966
-----------
---------------------------------------------------------------
US TREASURY OBLIGATIONS -- 2.8%
---------------------------------------------------------------
US TREASURY BONDS -- 1.9%
8.875%, 08/15/17................... 60,000 77,185
8.000%, 11/15/21................... 280,000 341,950
-----------
419,135
-----------
US TREASURY NOTES -- 0.7%
5.750%, 11/15/00................... 150,000 149,883
-----------
US TREASURY STRIPS -- 0.2%
6.875%, 08/15/25................... 200,000 45,042
-----------
TOTAL US TREASURY OBLIGATIONS
(Cost: $593,031)...............................
614,060
-----------
---------------------------------------------------------------
AGENCY OBLIGATIONS -- 31.6%
---------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORP. -- 8.7%
Federal National Mortgage
Association
6.000% 5/15/08................... 500,000 477,655
Federal National Mortgage
Association
5.250%, 01/15/09................. 1,490,000 1,346,826
Pool #200112
9.500%, 11/01/05................. 32,643 33,607
Pool #380032
10.000%, 10/01/03................ 13,324 13,582
Gold Pool #B00632
9.000%, 06/01/06................. 10,688 10,816
-----------
1,882,486
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 15.0%
Pool #252959
6.000%, 10/01/29................. 185,263 173,048
Pool #303262
9.500%, 05/01/07................. 17,299 17,677
Pool #303481
10.000%, 10/01/05................ 14,449 14,855
Pool #303758
9.500%, 07/01/06................. 12,773 12,977
Pool #323821
6.000%, 07/01/29................. 609,765 569,564
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------------------------------------------------------------
<S> <C> <C>
Federal National Mortgage Association (Continued)
Pool #323980
6.000%, 04/01/14................. $ 638,599 $ 614,447
Pool #363503
9.500%, 06/01/05................. 15,859 16,112
Pool #489833
6.000%, 6/01/14.................. 84,476 81,281
Pool #490619
6.000%, 04/01/29................. 473,079 441,889
Pool #491000
6.000%, 05/01/14................. 1 0
Pool #494776
6.500%, 05/01/29................. 199,980 192,043
Pool #503641
6.000%, 07/01/29................. 186,711 174,401
Pool #505482
6.000%, 07/01/14................. 660,516 635,535
Pool #509659
6.000%, 08/01/29................. 94,495 88,265
Pool #514500
7.000%, 11/01/29................. 199,980 195,917
-----------
3,228,011
-----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 7.9%
Pool #064054
11.500%, 02/15/13................ 366 379
Pool #299705
8.500%, 02/15/21................. 4,065 4,188
Pool #434312
6.000%, 04/15/14................. 240,160 231,978
Pool #460449
6.500%, 06/15/28................. 155,997 150,244
Pool #467362
6.500%, 12/15/28................. 367,848 354,282
Pool #467841
6.500%,12/15/28.................. 303,520 292,326
Pool #482794
6.500%,10/15/28.................. 682,211 657,051
Pool#68958
11.500%, 07/15/13................ 663 726
-----------
1,691,174
-----------
TOTAL AGENCY OBLIGATIONS
(Cost: $6,693,994).............................
6,801,671
-----------
---------------------------------------------------------------
FOREIGN GOVERNMENT BONDS -- 5.4%
---------------------------------------------------------------
ARGENTINA -- 0.5%
Federal Republic of Argentina
0.000%,10/15/04.................. 175,000 111,563
-----------
GERMANY -- 4.9%
Federal Republic of Germany
7.375%, 01/03/05................. 1,100,000 1,050,570
-----------
TOTAL FOREIGN GOVERNMENT BONDS
(Cost: $1,314,308).............................
1,162,133
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
33
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- CONTINUED
--------------------------------------------------------------------------------
HIGH QUALITY BOND FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------------------------------------------------------------
<S> <C> <C>
CMO'S AND ASSET-BACKED SECURITIES -- 19.3%
---------------------------------------------------------------
MORTGAGE-COMMERCIAL -- 17.0%
Asset Securitization Corp. 1996 D2
A1
6.920%, 02/14/29................. $ 181,294 $ 179,638
Bank Of America 2000 1 A2A
7.333% 10/15/09.................. 140,000 140,263
Capco America Securitization 1998
D7
5.860%, 04/15/00................. 197,952 188,490
Chase Manhattan Bank
7.439%, 8/15/31.................. 230,000 234,029
Comed Transitional Funding Trust
1998 1 A6
5.630%, 06/25/09................. 150,000 140,438
Comed Transitional Funding Trust
1998 1 A7
5.740%, 12/25/10................. 250,000 234,336
Commercial Mortgage Asset Trust
6.250%, 04/17/00................. 174,418 170,058
CS First Boston Securities Corp.
Ser 2000 C1 A2
7.545%, 04/15/10................. 110,000 111,461
DLJ Commercial Mortgage Corp. 1998
CF1 CP
.9064%, 04/15/05................. 3,360,000 113,400
DLJ Mortgage Acceptance Corp. 144A
1996 CF1 S
.6097%, 03/12/06................. 3,804,802 58,261
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................. 5,745,425 132,863
Federal National Mortgage
Association
Aces 1997 M8 c1 X1
.6535%, 10/25/02................. 8,630,000 103,830
Global Franchise Trust 1998 A1
6.349%, 04/10/04................. 238,928 235,792
GMAC Commercial Mortgage
Securities, Inc. 1999 C3
7.273%, 8/15/09.................. 200,000 199,843
GMAC Commercial Mortgage
Securities, Inc. 2000 C2 c1 A2
7.455%, 06/16/10................. 120,000 122,963
GS Mortgage Securities Corp. 1998
C1 A1
6.060%, 10/18/30................. 136,625 132,784
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------------------------------------------------------------
<S> <C> <C>
Mortgage-Commercial (Continued)
Heller Financial 2000 PH1 A2
7.750%, 11/15/09................. $ 210,000 $ 217,459
Host Marriott Pool Trust 1999 A
6.980%, 04/03/00................. 110,882 110,553
Morgan Stanley Capital 144A 1997
HF1 A2
7.270%, 01/15/07................. 160,000 161,400
Mortgage Capital Funding, Inc. 1998
MC3
6.001%, 11/18/31................. 478,412 461,071
Prudential Securities 1999 NRF1 A2
6.480%, 1/15/09.................. 230,000 220,478
-----------
3,672,643
-----------
MORTGAGE-RESIDENTIAL -- 2.3%
BankBoston Home Equity
Loan Trust 1998 A4
6.110%, 09/25/13................. 400,000 385,016
CNL Funding Series 2000 AA Cl. A2
8.044%, 04/25/17................. 105,000 107,773
-----------
492,789
-----------
TOTAL CMO'S AND ASSET-BACKED SECURITIES
(Cost: $4,047,485).............................
4,165,432
-----------
---------------------------------------------------------------
PREFERRED STOCK -- 0.5%
---------------------------------------------------------------
TELECOMMUNICATIONS -- 0.5%
Broadwing Communications Ser B
12.500%, 08/15/09
(Cost: $103,675)................. 100,000 102,500
-----------
---------------------------------------------------------------
TIME DEPOSIT -- 3.5%
---------------------------------------------------------------
Chase Manhattan Bank
6.110%, 10/02/00
(Cost: $757,134)................. 757,134 757,134
-----------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 99.1%
(Cost: $21,397,275).......................... 21,348,940
OTHER ASSETS IN EXCESS OF LIABILITIES --
0.9%........................................... 202,284
-----------
NET ASSETS -- 100.0%........................... $21,551,224
-----------
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
34
<PAGE>
HIGH YIELD BOND FUND RETIREMENT SHARES
------------------------------------------------------------------------
MANAGEMENT TEAM: DOUGLAS G. FORSYTH, CFA, Partner, Portfolio Manager; WILLIAM
STICKNEY, Portfolio Manager; MICHAEL E. YEE, Portfolio Manager; JUSTIN KASS,
Investment Analyst.
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: From April 1, 2000 to September 30, 2000, high yield bond
prices posted positive results, outpacing many major US equity indices.
In April and May, the high yield bond market was quiet, characterized by
minimal new issue volume, light secondary trading and a modest price decline.
The market rallied in June, however, amid the most significant flow of new deals
since the first quarter of 2000. The CS First Boston High Yield Index advanced
2.2% in June, led by gains in technology, energy and gaming issues.
Following June's advance, the market traded in a narrow range throughout the
last three months of the period as a lack of mutual fund inflows and new
issuance dampened investor enthusiasm.
PERFORMANCE: The Fund advanced 1.2% during the six months ended September 30,
2000 versus the CS First Boston High Yield Index, which gained 1.1%.
PORTFOLIO SPECIFICS: During the period, the Fund slightly outperformed its
benchmark, benefiting from many credit upgrades of issuers across multiple
industries. One notable example was Triarc Beverage Group. Triarc was upgraded
seven ratings levels after the company's September announcement that it had
agreed to sell Snapple to Cadbury Schweppes.
MARKET OUTLOOK: Looking forward, the high yield bond market continues to offer
attractive return opportunities. The consensus view among market participants is
that the Federal Reserve has completed its tightening cycle. This bodes well for
high yield bond investors since over the last decade, the end of a tightening
cycle has generally led to strong high yield bond performance. In addition, an
increase in new issuance activity across a diverse range of industries is
indicative of heightened investor demand. In this environment, we are optimistic
that the application of our strict investment philosophy will lead us to
outstanding investment candidates within the high yield bond market.
--------------------------------------------------------------------------------
35
<PAGE>
HIGH YIELD BOND FUND RETIREMENT SHARES -- UNAUDITED
------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN HIGH YIELD BOND FUND
RETIREMENT SHARES WITH THE CS FIRST BOSTON HIGH YIELD INDEX.
<TABLE>
<S> <C> <C>
SINCE
1 YEAR ANNUALIZED TOTAL RETURNS INCEPTION
5.06% As of 9/30/00 11.05%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
HIGH YIELD CS FIRST
BOND FUND BOSTON HIGH
RETIREMENT SHARES YIELD INDEX
<S> <C> <C>
7/31/96 $250,000.00 $250,000.00
08/96 $256,605.02 $252,725.00
09/96 $265,521.80 $257,071.87
10/96 $268,494.06 $259,231.27
11/96 $273,447.82 $263,275.28
12/96 $277,741.08 $268,409.15
01/97 $283,025.10 $270,368.54
02/97 $289,299.87 $275,451.46
03/97 $284,015.85 $272,366.41
04/97 $285,336.86 $274,790.47
05/97 $297,556.14 $280,313.76
06/97 $304,821.66 $284,126.03
07/97 $314,068.69 $290,149.50
08/97 $317,371.20 $291,716.30
09/97 $330,250.99 $297,492.29
10/97 $331,241.74 $297,462.54
11/97 $334,874.50 $299,574.52
12/97 $336,525.76 $302,300.65
01/98 $347,754.29 $307,439.76
02/98 $351,717.31 $309,837.79
03/98 $355,680.32 $311,386.98
04/98 $358,652.58 $313,722.38
05/98 $359,643.33 $314,663.55
06/98 $361,624.83 $315,324.34
07/98 $364,597.09 $317,531.61
08/98 $344,451.78 $295,971.22
09/98 $336,195.51 $295,941.62
10/98 $327,608.98 $290,052.38
11/98 $347,424.04 $304,758.04
12/98 $350,726.55 $304,057.09
01/99 $358,652.58 $306,915.23
02/99 $357,992.07 $306,270.71
03/99 $360,634.08 $309,057.77
04/99 $371,202.11 $315,887.95
05/99 $367,239.10 $312,476.36
06/99 $369,220.61 $312,632.60
07/99 $371,532.36 $312,788.91
08/99 $368,560.11 $310,005.09
09/99 $368,229.85 $307,618.05
10/99 $368,890.36 $306,110.72
11/99 $376,816.38 $310,273.83
12/99 $383,421.40 $314,028.14
01/00 $383,421.40 $312,772.03
02/00 $387,054.16 $314,711.22
03/00 $382,430.65 $309,990.55
04/00 $385,402.91 $309,525.56
05/00 $381,439.89 $304,573.15
06/00 $391,017.17 $311,395.59
07/00 $393,328.93 $314,322.71
08/00 $393,423.00 $316,428.67
9/30/00 $386,849.68 $313,517.53
</TABLE>
The graph above shows the value of a hypothetical $250,000 investment in the
Fund's Class R shares compared with the CS First Boston High Yield 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
July 24, 2000. 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.
--------------------------------------------------------------------------------
36
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- UNAUDITED
------------------------------------------------------------------------
HIGH YIELD BOND FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
---------------------------------------------------------------
CORPORATE BONDS -- 87.5%
---------------------------------------------------------------
AIRLINES -- 2.1%
Atlas Air, Inc.
10.750%, 08/01/05................. $250,000 $ 258,750
Atlas Air, Inc.
9.250%, 04/15/08.................. 200,000 199,250
-----------
458,000
-----------
APPAREL -- 1.4%
Supreme International Corp.
12.250%, 04/01/06................. 340,000 316,200
-----------
APPLIANCES -- 1.8%
Salton, Inc.
10.750%, 12/15/05................. 400,000 392,000
-----------
AUTO/TRUCK PARTS & EQUIPMENT -- 0.7%
Collins & Aikan Corp.
11.500%, 04/15/06................. 150,000 144,000
-----------
BEVERAGES-NON-ALCOHOLIC -- 1.7%
Triarc Consumer Beverage 144A
10.250%, 02/15/09................. 340,000 378,250
-----------
BROADCASTING -- 7.5%
Capstar Broadcasting Partners, Inc.
12.000%, 07/01/09................. 309,000 358,440
CD Radio, Inc.
14.500%, 05/15/09................. 350,000 310,625
Echostar DBS Corp.
9.375%, 02/01/09.................. 400,000 392,000
Spectrasite Holdings, Inc.
0.000% (until 04/15/04, thereafter
11.250% to maturity), 04/15/09.... 500,000 272,500
United International Holdings
0.000% (until 02/15/03, thereafter
10.750% to maturity), 02/15/08.... 460,000 315,100
-----------
1,648,665
-----------
BUILDING & CONSTRUCTION -- 3.9%
K Hovanian Enterprises, Inc. 144A
10.500%, 10/01/07................. 285,000 279,300
Nortek, Inc.
9.875%, 03/01/04.................. 325,000 313,625
Ryland Group, Inc.
9.750%, 09/01/10.................. 270,000 268,650
-----------
861,575
-----------
BUSINESS SERVICES -- 1.0%
Iron Mountain, Inc. 144A
8.750%, 09/30/09.................. 100,000 95,500
SITEL Corp. 144A
9.250%, 03/15/06.................. 145,000 134,850
-----------
230,350
-----------
CASINOS/HOTELS -- 6.9%
Argosy Gaming Co. 144A
10.750%, 06/01/09................. 250,000 261,563
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------------------------------------------------------------
<S> <C> <C>
Casinos/Hotels (Continued)
Autotote Corp. 144A Rt. Cl. A
12.500%, 08/15/10................. $355,000 $ 360,324
Extended Stay America, Inc. 144A
9.150%, 03/15/08.................. 240,000 226,800
Park Place Entertainment Corp.
8.875%, 09/15/08.................. 240,000 237,600
Prime Hospitality Corp. 144A Ser. B
9.750%, 04/01/07.................. 70,000 69,650
Venetian Casino
12.250%, 11/15/04................. 360,000 369,000
-----------
1,524,937
-----------
CHEMICALS -- 1.5%
Lyondell Chemical Co. 144A Ser. B
9.875%, 05/01/07.................. 340,000 331,925
-----------
CIRCUITS -- 1.6%
Hadco Corp.
9.500%, 05/15/08.................. 350,000 353,063
-----------
DIVERSIFIED FINANCIAL SERVICES -- 4.6%
ACME Intermediate Holdings Cl. B
0.000% (until 09/30/01, thereafter
12.000% to maturity), 09/30/05.... 400,000 272,000
GS Escrow Corp.
6.750%, 08/01/01.................. 385,000 379,225
Metris Cos., Inc. 144A
10.125%, 07/15/06................. 370,000 355,200
-----------
1,006,425
-----------
DRUGS/PHARMACEUTICALS -- 1.8%
Twin Laboratories, Inc.
10.250%, 05/15/06................. 40,000 38,000
Warner Chilcott, Inc. 144A
12.625%, 02/15/08................. 350,000 360,500
-----------
398,500
-----------
ELECTRIC -- 1.6%
AES Corp.
9.500%, 06/01/09.................. 350,000 356,125
-----------
ELECTRONIC COMPONENTS-SEMICONDUCTORS -- 1.8%
Amkor Technology, Inc.
10.500%, 05/01/09................. 400,000 405,500
-----------
ENTERTAINMENT -- 1.9%
Ascent Entertainment Group 0.000%
(until 12/01/02, thereafter
11.875% to maturity), 12/15/04.... 505,000 419,150
-----------
HEALTH CARE -- 3.0%
Abbey Healthcare Group
9.500%, 11/01/02.................. 325,000 324,594
Triad Hospitals Holdings, Inc. 144A
Ser. B
11.000%, 05/15/09................. 325,000 333,125
-----------
657,719
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
37
<PAGE>
SCHEDULE OF INVESTMENTS AS OF SEPTEMBER 30, 2000 -- CONTINUED
--------------------------------------------------------------------------------
HIGH YIELD BOND FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------------------------------------------------------------
<S> <C> <C>
CORPORATE BONDS (Continued)
---------------------------------------------------------------
INTERNET SOFTWARE -- 3.3%
Exodus Communications
11.250%, 07/01/08................. $385,000 $ 382,113
Globix Corp. 144A
12.500%, 02/01/10................. 200,000 144,000
PSInet, Inc.
10.000%, 02/15/05................. 325,000 211,250
-----------
737,363
-----------
OIL & GAS PRODUCTION -- 1.0%
Stone Energy Corp.
8.750%, 09/15/07.................. 220,000 214,500
-----------
PUBLISHING -- 1.6%
American Lawyer Media
9.750%, 12/15/07.................. 375,000 354,375
-----------
RECREATIONAL CENTERS -- 1.5%
Bally Total Fitness Holdings
9.875%, 10/15/07.................. 355,000 337,250
-----------
RENTAL AUTO/EQUIPMENT -- 3.8%
Rent-A-Center, Inc. 144A
11.000%, 08/15/08................. 350,000 346,500
United Rentals, Inc. 144A Ser. B
9.000%,04/01/09................... 210,000 187,950
United Rentals, Inc.
9.500%, 06/01/08.................. 340,000 311,100
-----------
845,550
-----------
RESORTS/THEME PARKS -- 1.5%
Premier Parks Inc.
9.750%, 06/15/07.................. 350,000 327,250
-----------
RETAIL-ARTS & CRAFTS -- 1.7%
Michaels Stores, Inc.
10.875%, 06/15/06................. 365,000 377,775
-----------
RETAIL-AUTOMOBILE -- 1.3%
Sonic Automotive, Inc. 144A Ser. B
11.000%, 08/01/08................. 325,000 292,500
-----------
RETAIL-DISCOUNT -- 2.1%
Tuesday Morning Corp.
11.000%, 12/15/07................. 484,000 467,060
-----------
RETAIL-INTERNET -- 1.0%
Amazon.com, Inc. 0.000% (until
05/01/03, thereafter
10.000% to maturity), 05/01/08.... 420,000 220,500
-----------
RETAIL-MUSIC STORES -- 2.4%
Musicland Stores Corp.
9.000%, 06/15/03.................. 380,000 353,400
Musicland, Inc.
9.875%, 03/15/08.................. 210,000 176,400
-----------
529,800
-----------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------------------------------------------------------------
<S> <C> <C>
RETAIL-RESTAURANTS -- 1.8%
Foodmaker, Inc.
8.375%, 04/15/08.................. $420,000 $ 394,800
-----------
RETAIL-VIDEO RENTAL -- 1.4%
Hollywood Entertainment Corp.
10.625%, 08/15/04................. 400,000 308,000
-----------
TELECOMMUNICATIONS -- 11.1%
Crown Castle International Corp.
0.000% (until 11/15/02, thereafter
10.625% to maturity), 11/15/07.... 440,000 343,200
Crown Castle International Corp.
10.750%, 08/01/11................. 75,000 77,063
ICG Holdings, Inc. 144A
13.500%, 09/15/05................. 360,000 79,200
International Cablenote, Inc.
12.750%, 04/15/05................. 350,000 351,750
McLeodUSA, Inc. 144A Cl.A
9.500%, 11/01/08.................. 340,000 317,900
Nextlink Communications
0.000% (until 06/01/04, thereafter
12.250% to maturity), 06/01/09.... 400,000 224,000
NTL Communications Corp. 144A
11.875%, 10/01/10................. 170,000 166,813
NTL, Inc.
0.000% (until 02/01/01, thereafter
11.500% to maturity), 02/01/06.... 265,000 250,424
Pac-West Telecomm, Inc.
13.500%, 02/01/09................. 340,000 299,200
Winstar Communications, Inc. 144A
12.750%, 04/15/10................. 477,000 345,824
-----------
2,455,374
-----------
TELECOMMUNICATIONS EQUIPMENT -- 2.1%
Global Telesystems Group, Inc.
9.875%, 02/15/05.................. 440,000 189,200
Northeast Optic Network
12.750%, 08/15/08................. 320,000 265,600
-----------
454,800
-----------
TELEPHONE -- 2.4%
Nextel Communications, Inc.
10.250%, 02/15/09................. 460,000 361,100
Viatel, Inc.
11.250%, 04/15/08................. 390,000 179,400
-----------
540,500
-----------
TELEVISION -- 2.7%
ACME Television 0.000% (until
09/30/00, thereafter
10.875% to maturity), 09/30/04.... 250,000 237,500
Frontiervision L.P.
11.000%, 10/15/06................. 350,000 349,125
-----------
586,625
-----------
TOTAL CORPORATE BONDS
(Cost: $20,731,917)............................
19,326,406
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
38
<PAGE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------------------------------------------------------------
<S> <C> <C>
FOREIGN CORPORATE BONDS -- 7.7%
---------------------------------------------------------------
AUSTRALIA -- 0.4%
Bulong Operations 144A
12.500%, 12/15/08................. $180,000 $ 90,000
-----------
CANADA -- 1.4%
Alliance Atlantis Communications
Corp.
13.000%, 12/15/09................. 300,000 310,500
-----------
NETHERLANDS -- 2.7%
United Pan-Europe Communications
N.V. 144A Ser. B
11.500%, 02/01/10................. 340,000 294,950
Versatel Telecommunications
11.875%, 07/15/09................. 350,000 302,750
-----------
597,700
-----------
SINGAPORE -- 1.6%
Flextronics International, Ltd. 144A
9.875%, 07/01/10.................. 350,000 359,625
-----------
UNITED KINGDOM -- 1.6%
Colt Telecom Group PLC
0.000% (until 12/15/01, thereafter
12.000% to maturity), 12/15/06.... 375,000 341,250
-----------
TOTAL FOREIGN CORPORATE BONDS
(Cost: $1,839,341).............................
1,699,075
-----------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------------------------------------------------------------
<S> <C> <C>
PREFERRED CORPORATE BOND -- 0.0%
---------------------------------------------------------------
TELECOMMUNICATIONS -- 0.0%
NEXTLINK Communications, Inc.
Ser. B 13.500%, 06/01/10
(Cost: $6,587).................... $ 177 $ 13,983
-----------
---------------------------------------------------------------
TIME DEPOSIT -- 2.4%
---------------------------------------------------------------
Bank One Grand Cayman
6.110%, 10/02/00
(Cost: $525,866).................. 525,866 525,866
-----------
</TABLE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS -- 97.6%
(Cost: $23,103,711).......................... 21,565,330
OTHER ASSETS IN EXCESS OF LIABILITIES --
2.4%........................................... 532,693
-----------
NET ASSETS -- 100.0%........................... $22,098,023
-----------
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
39
<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)(1) INCOME CAPITAL GAINS ENDING
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------------------------------
INTERNATIONAL EQUITY FUNDS
INTERNATIONAL CORE GROWTH
For the period
9/30/00 (4) $31.84 $ 0.02 ($4.78) $ -- $ -- $27.08
6/1/99 (commenced) to
3/31/00 20.01 (0.20) 12.03 -- -- 31.84
EMERGING COUNTRIES
For the period ended
09/30/00 (4) $23.67 ($0.34) ($5.62) $ -- $ -- $17.71
6/1/99 (commenced) to
3/31/00 15.26 (0.17) 8.58 -- -- 23.67
U.S. EQUITY FUNDS
LARGE CAP GROWTH
For the period ended
9/30/00 (4) $49.77 ($0.22) ($2.69) $ -- $ -- $46.86
6/1/99 (commenced) to
3/31/00 28.61 (0.21) 21.37 -- -- 49.77
MID CAP GROWTH
For the period ended
9/30/00 (4) $41.51 ($0.17) ($0.65) $ -- $ -- $40.69
6/1/99 (commenced) to
3/31/00 18.94 (0.09) 22.66 -- -- 41.51
SMALL CAP GROWTH
For the period ended
9/30/00 (4) $27.05 ($0.06) ($3.28) $ -- $ -- $23.71
6/1/99 (commenced) to
3/31/00 13.86 (0.15) 13.69 -- (0.35) 27.05
VALUE
For the period ended
9/30/00 (4) $21.74 $ 0.07 $ 1.16 $ -- $ -- $22.97
6/1/99 (commenced) to
3/31/00 22.33 0.12 (0.71) -- -- 21.74
U.S. FIXED INCOME FUNDS
HIGH QUALITY BOND
For the period ended
9/30/00 (4) $12.12 $ 0.40 $ 0.07 $(0.42) $ -- $12.17
6/1/99 (commenced) to
3/31/00 12.66 0.65 (0.51) (0.68) -- 12.12
HIGH YIELD BOND
8/14/00 (commenced) to
9/30/00 (4) $ -- $ 0.15 $11.57 $(0.21) $ -- $11.51
</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.
(4) Unaudited.
(5) This calculation includes expenses not part of the expense reimbursement
calculation.
(6) Actual amount.
(7) Return for one month only. Fund commenced operations on 8/14/00.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
40
<PAGE>
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS (3)
--------------------------------------------------------
EXPENSE FUND'S
NET (REIMBURSEMENTS) PORTFOLIO NET ASSETS
TOTAL INVESTMENT TOTAL ---------------- NET TURNOVER ENDING
RETURN(2) INCOME (LOSS) EXPENSES RECOUPMENT EXPENSES(5) RATE (IN 000'S)
<S> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------
INTERNATIONAL EQUITY FUNDS
INTERNATIONAL CORE GROWTH
For the period
9/30/00 (4) (14.95%) 0.11% 1.56% 0.10% 1.66% 118% $14,390
6/1/99 (commenced) to
3/31/00 59.14% (0.82%) 1.61% 0.04% 1.65% 158% 15,571
EMERGING COUNTRIES
For the period ended
09/30/00 (4) (25.81%) (0.31%) 1.90% 0.00% 1.90% 99% $ 171(6)
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
For the period ended
9/30/00 (4) (5.79%) (0.93%) 1.28% (0.02%) 1.26% 63% $83,890
6/1/99 (commenced) to
3/31/00 73.98% (0.69%) 1.42% 0.15% 1.27% 154% 83,785
MID CAP GROWTH
For the period ended
9/30/00 (4) (1.95%) (0.94%) 1.27% (0.02%) 1.25% 75% $ 19
6/1/99 (commenced) to
3/31/00 119.11% (0.73%) 1.23% (0.21%) 1.02% 115% 14
SMALL CAP GROWTH
For the period ended
9/30/00 (4) (12.35%) (0.50%) 1.57% (0.14%) 1.43% 45% $ 5,577
6/1/99 (commenced) to
3/31/00 98.68% (0.91%) 1.62% (0.20%) 1.42% 88% 5,861
VALUE
For the period ended
9/30/00 (4) 5.66% 0.67% 1.55% (0.25%) 1.30% 71% $ 9,055
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
For the period ended
9/30/00 (4) 3.89% 6.71% 1.59% (0.87%) 0.72% 155% $ 4,166
6/1/99 (commenced) to
3/31/00 1.20% 6.47% 1.39% (0.69%) 0.70% 162% 2,810
HIGH YIELD BOND
8/14/00 (commenced) to
9/30/00 (4) 1.16%(7) 12.69% 1.48% (0.47%) 1.01% 60% $ 160(6)
</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.
(4) Unaudited.
(5) This calculation includes expenses not part of the expense reimbursement
calculation.
(6) Actual amount.
(7) Return for one month only. Fund commenced operations on 8/14/00.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
41
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
INTERNATIONAL EMERGING
CORE GROWTH COUNTRIES
<S> <C> <C>
ASSETS
Investments, at value* $306,886,804 $281,305,466
Foreign currencies, at value** -- 3,217,571
Cash 52,167,642 29,628,714
Receivables:
Investment securities sold 9,149,049 10,830,670
Capital shares sold 7,845,352 778,362
Dividends 577,366 619,912
Interest -- 6
From investment advisor -- --
Unrealized gain on forward currency contracts -- --
Other assets 6,983 27,829
------------ ------------
Total Assets 376,633,196 326,408,530
------------ ------------
LIABILITIES
Payables:
Bank overdraft $ 151,649 $ --
Investments purchased 27,846,892 19,824,711
Capital shares purchased 7,821,245 293,944
Collateral on securities loaned 34,744,493 23,362,400
Dividends -- --
To investment advisor 273,108 289,289
Unrealized loss on forward currency contracts -- --
Other liabilities 218,869 320,810
------------ ------------
Total Liabilities 71,056,256 44,091,154
------------ ------------
NET ASSETS $305,576,940 $282,317,376
------------ ------------
------------ ------------
* Investments, at cost $286,023,849 $270,987,190
------------ ------------
------------ ------------
** Foreign currencies, at cost $ (151,245) $ 3,235,144
------------ ------------
------------ ------------
NET ASSETS CONSIST OF:
Paid-in capital $274,640,578 $274,439,084
Undistributed net investment income (loss) 345,814 359,306
Accumulated net realized gain (loss) on investments and
foreign currencies 9,561,263 (2,764,201)
Net unrealized appreciation (depreciation) of investments
and of other assets and liabilities denominated in foreign
currencies 21,029,285 10,283,187
------------ ------------
Net assets applicable to all shares outstanding $305,576,940 $282,317,376
------------ ------------
------------ ------------
Net Assets of Retirement Shares 14,389,994 171
Net Assets of Institutional Shares $291,186,946 $282,317,205
------------ ------------
------------ ------------
Retirement Shares outstanding 531,384 10
Institutional Shares outstanding 10,727,648 15,871,280
------------ ------------
------------ ------------
Net Asset Value -- Retirement Share $ 27.08 $ 17.10
Net Asset Value -- Institutional Share $ 27.14 $ 17.79
------------ ------------
------------ ------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
42
<PAGE>
<TABLE>
<CAPTION>
LARGE CAP MID CAP SMALL CAP HIGH QUALITY HIGH YIELD
GROWTH GROWTH GROWTH VALUE BOND BOND
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments,
at value* $155,341,326 $241,422,169 $268,009,888 $45,246,887 $21,348,940 $21,565,330
Foreign
currencies,
at
value** -- -- -- -- -- --
Cash 20,500,923 25,321,837 51,375,805 2,961,804 655,574 707,243
Receivables:
Investment
securities
sold 7,962,966 6,285,761 1,154,972 -- 511,850 488,172
Capital
shares
sold 2,342,242 5,070 251,152 65,370 21,069 8,212
Dividends 14,672 2,555 12,267 73,507 -- --
Interest -- -- -- -- 314,140 553,853
From
investment
advisor 351 -- 16,471 5,964 16,202 9,049
Unrealized
gain on
forward
currency
contracts -- -- -- -- -- --
Other
assets 17,292 10,541 9,656 4,659 11,286 29,636
------------ ------------ ------------ ----------- ----------- -----------
Total
Assets 186,179,772 273,047,933 320,830,211 48,358,191 22,879,061 23,361,495
------------ ------------ ------------ ----------- ----------- -----------
LIABILITIES
Payables:
Bank
overdraft $ -- $ -- $ -- $ -- $ -- $ --
Investments
purchased 17,267,581 12,725,279 26,801,649 3,121,877 1,239,900 1,151,594
Capital
shares
purchased 2,314,353 -- 180,430 44,438 12,488 8,212
Collateral
on
securities
loaned 14,564,900 19,573,500 29,142,150 537,300 -- --
Dividends -- -- -- 10 1,106 53,989
To
investment
advisor 92,302 149,504 215,332 26,214 7,690 10,729
Unrealized
loss on
forward
currency
contracts -- -- -- -- 5,729 --
Other
liabilities 99,167 154,405 222,991 62,196 60,924 38,948
------------ ------------ ------------ ----------- ----------- -----------
Total
Liabilities 34,338,303 32,602,688 56,562,552 3,792,035 1,327,837 1,263,472
------------ ------------ ------------ ----------- ----------- -----------
NET
ASSETS $151,841,469 $240,445,245 $264,267,659 $44,566,156 $21,551,224 $22,098,023
------------ ------------ ------------ ----------- ----------- -----------
------------ ------------ ------------ ----------- ----------- -----------
*
Investments,
at cost $129,220,689 $167,810,798 $197,792,156 $43,368,361 $21,397,275 $23,103,711
------------ ------------ ------------ ----------- ----------- -----------
------------ ------------ ------------ ----------- ----------- -----------
**
Foreign
currencies,
at cost $ -- $ -- $ -- $ -- $ -- $ --
------------ ------------ ------------ ----------- ----------- -----------
------------ ------------ ------------ ----------- ----------- -----------
NET
ASSETS
CONSIST
OF:
Paid-in
capital $125,021,375 $105,718,629 $144,886,605 $43,982,463 $22,375,823 $23,593,938
Undistributed
net
investment
income
(loss) (261,847) 168,556 1,086,442 258,374 20,525 48,430
Accumulated
net
realized
gain
(loss) on
investments
and
foreign
currencies 961,304 60,946,689 48,076,880 (1,553,207) (744,058) (5,964)
Net
unrealized
appreciation
(depreciation)
of
investments
and of other
assets and
liabilities
denominated
in
foreign
currencies 26,120,637 73,611,371 70,217,732 1,878,526 (101,066) (1,538,381)
------------ ------------ ------------ ----------- ----------- -----------
Net
assets
applicable
to all
shares
outstanding $151,841,469 $240,445,245 $264,267,659 $44,566,156 $21,551,224 $22,098,023
------------ ------------ ------------ ----------- ----------- -----------
------------ ------------ ------------ ----------- ----------- -----------
Net
Assets
of
Retirement
Shares 83,889,980 19,495 5,576,609 9,054,900 4,165,856 160
Net
Assets
of
Institutional
Shares $ 67,951,489 $240,425,750 $258,691,050 $35,511,256 $17,385,368 $22,097,863
------------ ------------ ------------ ----------- ----------- -----------
------------ ------------ ------------ ----------- ----------- -----------
Retirement
Shares
outstanding 1,790,046 479 235,226 394,161 342,443 14
Institutional
Shares
outstanding 1,446,072 5,902,556 10,901,821 1,543,494 1,431,040 1,920,018
------------ ------------ ------------ ----------- ----------- -----------
------------ ------------ ------------ ----------- ----------- -----------
Net
Asset
Value
--
Retirement
Share $ 46.86 $ 40.70 $ 23.71 $ 22.97 $ 12.17 $ 11.43
Net
Asset
Value
--
Institutional
Share $ 46.99 $ 40.73 $ 23.73 $ 23.01 $ 12.15 $ 11.51
------------ ------------ ------------ ----------- ----------- -----------
------------ ------------ ------------ ----------- ----------- -----------
</TABLE>
--------------------------------------------------------------------------------
43
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
STATEMENT OF OPERATIONS
PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
INTERNATIONAL EMERGING
CORE GROWTH COUNTRIES
<S> <C> <C>
INVESTMENT INCOME
Dividends, net of foreign taxes* $ 1,747,022 $ 1,382,926
Interest 661,154 494,627
Securities lending 351,450 171,391
------------ ------------
Total Income 2,759,626 2,048,944
------------ ------------
EXPENSES
Advisory fee 1,546,441 1,730,843
Accounting and administration fees 65,272 61,030
Custodian fees 124,907 280,470
Transfer agent fees and expenses 32,379 28,834
Distribution and shareholder servicing fees 17,900 --
Administrative services 154,644 138,984
Professional fees 35,103 33,765
Shareholder reporting 4,960 4,681
Registration fees 20,126 23,104
Trustees' fees and expenses 3,733 3,223
Interest and credit facility fee 1,777 35,682
Insurance 101 149
Miscellaneous 17,581 35,867
------------ ------------
Total Expenses 2,024,924 2,376,632
Expenses (reimbursed)/recouped 160,534 (38,554)
------------ ------------
Net Expenses 2,185,458 2,338,078
------------ ------------
NET INVESTMENT INCOME (LOSS) 574,168 (289,134)
------------ ------------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Realized gain (loss) from:
Securities (4,473,275) (25,504,237)
Foreign currency transactions (1,078,860) (355,785)
------------ ------------
Net realized gain (loss) (5,552,135) (25,860,022)
------------ ------------
Change in unrealized appreciation (depreciation) of:
Investments (44,636,485) (56,210,160)
Other assets and liabilities denominated in foreign
currencies (18,212) (4,156)
------------ ------------
Net unrealized appreciation (depreciation) (44,654,697) (56,214,316)
------------ ------------
NET GAIN (LOSS) ON INVESTMENTS (50,206,832) (82,074,338)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $(49,632,664) $(82,363,472)
------------ ------------
------------ ------------
*Foreign taxes withheld: $ 177,762 $ 116,214
------------ ------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
44
<PAGE>
<TABLE>
<CAPTION>
LARGE CAP MID CAP SMALL CAP HIGH QUALITY HIGH YIELD
GROWTH GROWTH GROWTH VALUE BOND BOND
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT
INCOME
Dividends,
net of
foreign
taxes* $ 98,415 $ 32,409 $ 59,716 $ 351,621 $ 4,376 $ 37
Interest 85,079 138,074 587,914 33,266 792,416 1,218,334
Securities
lending 28,490 163,500 542,228 3,716 -- 3,716
----------- ------------ ------------ ---------- --------- ----------
Total
Income 211,984 333,983 1,189,858 388,603 796,792 1,222,087
----------- ------------ ------------ ---------- --------- ----------
EXPENSES
Advisory
fee 490,698 822,211 1,268,137 147,739 48,413 66,096
Accounting
and
administration
fees 36,675 55,314 58,306 27,417 32,052 23,239
Custodian
fees 20,790 34,499 106,203 20,825 24,538 13,743
Transfer
agent
fees
and
expenses 18,455 27,325 30,934 11,486 10,383 7,308
Distribution
and
shareholder
servicing
fees 100,967 17 6,517 10,291 4,326 --
Administrative
services 65,426 109,629 126,805 19,699 10,758 11,016
Professional
fees 14,151 24,053 27,205 3,626 2,234 2,320
Shareholder
reporting 1,802 3,487 4,255 303 259 368
Registration
fees 11,838 19,728 22,500 11,865 10,578 5,793
Trustees'
fees
and
expenses 1,444 2,618 3,127 492 312 299
Interest
and
credit
facility
fee 1,643 4,212 18,011 7,788 1,615 606
Insurance 17 107 164 -- 16 10
Miscellaneous 9,565 13,028 15,640 2,491 1,854 3,080
----------- ------------ ------------ ---------- --------- ----------
Total
Expenses 773,471 1,116,228 1,687,804 264,022 147,338 133,878
Expenses
(reimbursed)/recouped (15,807) (14,847) (182,648) (48,190) (92,194) (49,875)
----------- ------------ ------------ ---------- --------- ----------
Net
Expenses 757,664 1,101,381 1,505,156 215,832 55,144 84,003
----------- ------------ ------------ ---------- --------- ----------
NET
INVESTMENT
INCOME
(LOSS) (545,680) (767,398) (315,298) 172,771 741,648 1,138,084
----------- ------------ ------------ ---------- --------- ----------
NET
REALIZED
AND
UNREALIZED
GAIN
(LOSS)
ON
INVESTMENTS
Realized
gain
(loss)
from:
Securities (2,397,894) 44,761,610 16,525,696 298,461 (203,347) (6,019)
Foreign
currency
transactions -- -- -- -- (26,984) --
----------- ------------ ------------ ---------- --------- ----------
Net
realized
gain
(loss) (2,397,894) 44,761,610 16,525,696 298,461 (230,331) (6,019)
----------- ------------ ------------ ---------- --------- ----------
Change
in
unrealized
appreciation
(depreciation)
of:
Investments (4,412,487) (49,252,844) (49,862,749) 1,951,173 377,496 (859,641)
Other
assets
and
liabilities
denominated
in foreign
currencies -- -- -- -- (54,178) --
----------- ------------ ------------ ---------- --------- ----------
Net
unrealized
appreciation
(depreciation) (4,412,487) (49,252,844) (49,862,749) 1,951,173 323,318 (859,641)
----------- ------------ ------------ ---------- --------- ----------
NET
GAIN
(LOSS)
ON
INVESTMENTS (6,810,381) (4,491,234) (33,337,053) 2,249,634 92,987 (865,660)
----------- ------------ ------------ ---------- --------- ----------
NET
INCREASE
(DECREASE)
IN NET
ASSETS
RESULTING
FROM
OPERATIONS $(7,356,061) $ (5,258,632) $(33,652,351) $2,422,405 $ 834,635 $ 272,424
----------- ------------ ------------ ---------- --------- ----------
----------- ------------ ------------ ---------- --------- ----------
*Foreign
taxes
withheld: $ 762 $ -- $ 4,944 $ -- $ 180 $ 468
----------- ------------ ------------ ---------- --------- ----------
</TABLE>
--------------------------------------------------------------------------------
45
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
STATEMENT OF CHANGES IN NET ASSETS
PERIODS ENDED SEPTEMBER 30, 2000 AND MARCH 31, 2000
<TABLE>
<CAPTION>
INTERNATIONAL CORE GROWTH EMERGING COUNTRIES
------------------------------------------------------------------
SEPTEMBER 30, SEPTEMBER 30,
2000 MARCH 31, 2000 MARCH 31,
(UNAUDITED) 2000(1) (UNAUDITED) 2000(1)
-------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income (loss) $ 574,168 $ (682,702) $ (289,134) $ (1,228,652)
Net realized gain (loss) (5,552,135) 15,715,326 (25,860,022) 24,972,913
Net unrealized appreciation (depreciation) (44,654,697) 65,683,982 (56,214,316) 66,497,503
------------ ------------ ------------ ------------
Net increase (decrease) in net assets from investment
operations (49,632,664) 80,716,606 (82,363,472) 90,241,764
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Institutional Class -- (145,725) -- --
Retirement Class -- (1,855) -- --
From net realized gains
Institutional Class -- -- -- --
Retirement Class -- -- -- --
------------ ------------ ------------ ------------
Total distributions -- (147,580) -- --
------------ ------------ ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
Institutional Class 117,931,652 284,041,615 78,723,580 235,356,729
Retirement Class 5,598,984 25,716,559 -- 438
Distributions reinvested
Institutional Class -- 124,755 -- --
Retirement Class -- 1,855 -- --
Cost of shares redeemed
Institutional Class (83,012,126) (56,751,676) (14,127,663) (25,513,624)
Retirement Class (4,416,109) (14,594,931) (376) --
------------ ------------ ------------ ------------
Net increase (decrease) in net assets from share
transactions 36,102,401 238,538,177 64,595,541 209,843,543
------------ ------------ ------------ ------------
Net Increase (Decrease) in Net Assets (13,530,263) 319,107,203 (17,767,931) 300,085,307
NET ASSETS
Beginning $319,107,203 $ -- $300,085,307 $ --
------------ ------------ ------------ ------------
Ending $305,576,940 $319,107,203 $282,317,376 $300,085,307
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Undistributed net investment income (loss), ending $ 345,814 $ (529,318) $ 359,306 $ (864,040)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
RETIREMENT CLASS -- CAPITAL SHARE ACTIVITY
Shares sold 197,328 964,480 -- 28
Distributions reinvested -- 58 -- --
Shares redeemed (154,961) (475,521) (18) --
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net Retirement Share Activity 42,367 489,017 (18) 28
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
INSTITUTIONAL CLASS -- CAPITAL SHARE ACTIVITY
Shares sold 4,070,765 11,515,928 3,920,480 13,836,324
Distributions reinvested -- 3,880 -- --
Shares redeemed (2,863,243) (1,999,682) (715,345) (1,170,179)
------------ ------------ ------------ ------------
Net Institutional Share Activity 1,207,522 9,520,126 3,205,135 12,666,145
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
------------------------------
<TABLE>
<C> <S>
(1) Commenced operations on 5/7/99.
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
46
<PAGE>
<TABLE>
<CAPTION>
LARGE CAP GROWTH MID CAP GROWTH SMALL CAP GROWTH VALUE
-----------------------------------------------------------------------------------------------------------------
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2000 MARCH 31, 2000 MARCH 31, 2000 MARCH 31, 2000
(UNAUDITED) 2000(1) (UNAUDITED) 2000(1) (UNAUDITED) 2000(1) (UNAUDITED)
-------------- ------------- -------------- ------------- -------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
INCREASE
(DECREASE)
IN NET
ASSETS
FROM INVESTMENT OPERATIONS:
Net
investment
income
(loss) $ (545,680) $ (283,832) $ (767,398) $ (935,954) $ (315,298) $ (1,401,740) $ 172,771
Net
realized
gain
(loss) (2,397,894) 3,926,863 44,761,610 18,056,987 16,525,696 38,511,301 298,461
Net
unrealized
appreciation
(depreciation) (4,412,487) 30,533,124 (49,252,844) 122,864,215 (49,862,749) 120,080,481 1,951,173
------------ ------------ ------------ ------------ ------------ ------------ -----------
Net
increase
(decrease)
in
net
assets
from
investment
operations (7,356,061) 34,176,155 (5,258,632) 139,985,248 (33,652,351) 157,190,042 2,422,405
------------ ------------ ------------ ------------ ------------ ------------ -----------
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 38,453,344 33,199,870 22,079,604 164,024,433 24,345,419 229,057,661 17,310,104
Retirement
Class 9,525,711 64,848,074 5,947 15,448 1,186,012 4,632,423 1,728,872
Distributions
reinvested
Institutional
Class -- -- -- -- -- 3,913,443 --
Retirement
Class -- -- -- -- -- 59,711 --
Cost
of
shares
redeemed
Institutional
Class (6,153,658) (4,706,518) (28,772,175) (51,633,673) (9,263,929) (107,190,111) (6,913,608)
Retirement
Class (4,395,023) (5,750,425) (955) -- (764,843) (1,089,181) (866,931)
------------ ------------ ------------ ------------ ------------ ------------ -----------
Net
increase
(decrease)
in
net
assets
from
share
transactions 37,430,374 87,591,001 (6,687,579) 112,406,208 15,502,659 129,383,946 11,258,437
------------ ------------ ------------ ------------ ------------ ------------ -----------
Net
Increase
(Decrease)
in
Net
Assets 30,074,313 121,767,156 (11,946,211) 252,391,456 (18,149,692) 282,417,351 13,680,842
NET
ASSETS
Beginning $121,767,156 $ -- $252,391,456 $ -- $282,417,351 $ -- $30,885,314
------------ ------------ ------------ ------------ ------------ ------------ -----------
Ending $151,841,469 $121,767,156 $240,445,245 $252,391,456 $264,267,659 $282,417,351 $44,566,156
------------ ------------ ------------ ------------ ------------ ------------ -----------
------------ ------------ ------------ ------------ ------------ ------------ -----------
Undistributed
net
investment
income
(loss),
ending $ (261,847) $ -- $ 168,556 $ -- $ 1,086,442 $ -- $ 258,374
------------ ------------ ------------ ------------ ------------ ------------ -----------
------------ ------------ ------------ ------------ ------------ ------------ -----------
RETIREMENT
CLASS --
CAPITAL
SHARE
ACTIVITY
Shares
sold 203,386 1,826,395 159 345 51,640 275,474 80,184
Distributions
reinvested -- -- -- -- -- 3,045 --
Shares
redeemed (96,622) (143,113) (25) -- (33,124) (61,809) (40,249)
------------ ------------ ------------ ------------ ------------ ------------ -----------
------------ ------------ ------------ ------------ ------------ ------------ -----------
Net
Retirement
Share
Activity 106,764 1,683,282 134 345 18,516 216,710 39,935
------------ ------------ ------------ ------------ ------------ ------------ -----------
------------ ------------ ------------ ------------ ------------ ------------ -----------
INSTITUTIONAL
CLASS --
CAPITAL
SHARE
ACTIVITY
Shares
sold 817,801 891,596 610,565 7,728,872 1,063,535 15,406,294 793,126
Distributions
reinvested -- -- -- -- -- 199,564 --
Shares
redeemed (133,524) (129,801) (787,923) (1,648,958) (393,258) (5,374,314) (315,965)
------------ ------------ ------------ ------------ ------------ ------------ -----------
Net
Institutional
Share
Activity 684,277 761,795 (177,358) 6,079,914 670,277 10,231,544 477,161
------------ ------------ ------------ ------------ ------------ ------------ -----------
------------ ------------ ------------ ------------ ------------ ------------ -----------
<CAPTION>
VALUE
-------------
MARCH 31,
2000(1)
-------------
<S> <C>
INC
(DE
IN
ASS
FRO
Net
inv
$ 302,320
Net
rea
( (1,851,668)
Net
unr
app
(de (72,647)
------------
Net
inc
(de
inv
ope (1,621,995)
------------
DIS
T
SHA
F
(180,191)
(36,526)
F
--
--
------------
(216,717)
------------
FRO
CAP
S
T
P
39,557,331
10,605,176
D
162,222
36,526
C
sha
red
(14,894,948)
(2,742,281)
------------
Net
inc
(de
32,724,026
------------
Net
Inc
(De
30,885,314
NET
ASS
B $ --
------------
E $ 30,885,314
------------
------------
Und
n
i
i
(
e $ 85,603
------------
------------
RET
CL
C
S
A
S
1,756,417
D
7,193
S
red (697,277)
------------
------------
Net
Ret
A 1,066,333
------------
------------
INS
C
C
S
A
S
480,770
D
1,620
S
red (128,165)
------------
Net
Ins
354,225
------------
------------
</TABLE>
------------------------------
<TABLE>
<C> <S>
(1) Commenced operations on 5/7/99.
</TABLE>
--------------------------------------------------------------------------------
47
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
STATEMENT OF CHANGES IN NET ASSETS -- CONTINUED
PERIODS ENDED SEPTEMBER 30, 2000 AND MARCH 31, 2000
<TABLE>
<CAPTION>
HIGH QUALITY BOND HIGH YIELD BOND
-----------------------------------------------------------------
SEPTEMBER 30, SEPTEMBER 30,
2000 MARCH 31, 2000 MARCH 31,
(UNAUDITED) 2000(1) (UNAUDITED)(2) 2000(1)
-------------- ------------- -------------- ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income (loss) $ 741,648 $ 1,251,519 $ 1,138,084 $ 1,423,836
Net realized gain (loss) (230,331) (495,907) (6,019) 55
Net unrealized appreciation (depreciation) 323,318 (424,384) (859,641) (678,740)
----------- ------------ ----------- -----------
Net increase (decrease) in net assets from investment
operations 834,635 331,228 272,424 745,151
----------- ------------ ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Institutional Class (605,865) (1,094,677) (1,114,931) (1,398,556)
Retirement Class (140,031) (149,889) (3) --
From net realized gains
Institutional Class -- -- -- --
Retirement Class -- -- -- --
----------- ------------ ----------- -----------
Total distributions (745,896) (1,244,566) (1,114,934) (1,398,556)
----------- ------------ ----------- -----------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
Institutional Class 8,594,287 24,431,234 3,987,152 24,021,970
Retirement Class 1,577,824 3,758,674 162 --
Distributions reinvested
Institutional Class 604,894 1,093,702 684,841 953,475
Retirement Class 140,029 149,887 2 --
Cost of shares redeemed
Institutional Class (11,803,225) (4,797,271) (3,283,268) (2,770,396)
Retirement Class (370,549) (1,003,663) -- --
----------- ------------ ----------- -----------
Net increase (decrease) in net assets from share
transactions (1,256,740) 23,632,563 1,388,889 22,205,049
----------- ------------ ----------- -----------
Net Increase (Decrease) in Net Assets (1,168,001) 22,719,225 546,379 21,551,644
NET ASSETS
Beginning $22,719,225 $ -- $21,551,644 $ --
----------- ------------ ----------- -----------
Ending $21,551,224 $ 22,719,225 $22,098,023 $21,551,644
----------- ------------ ----------- -----------
----------- ------------ ----------- -----------
Undistributed net investment income (loss), ending $ 20,525 $ 15,863 $ 48,430 $ 25,280
----------- ------------ ----------- -----------
----------- ------------ ----------- -----------
RETIREMENT CLASS -- CAPITAL SHARE ACTIVITY
Shares sold 129,587 303,597 14 --
Distributions reinvested 11,591 10,619 -- --
Shares redeemed (30,510) (82,441) -- --
----------- ------------ ----------- -----------
----------- ------------ ----------- -----------
Net Retirement Share Activity 110,668 231,775 14 --
----------- ------------ ----------- -----------
----------- ------------ ----------- -----------
INSTITUTIONAL CLASS -- CAPITAL SHARE ACTIVITY
Shares sold 709,993 1,950,011 334,718 1,951,452
Distributions reinvested 50,134 90,095 58,252 78,264
Shares redeemed (973,773) (395,420) (275,761) (226,907)
----------- ------------ ----------- -----------
Net Institutional Share Activity (213,646) 1,644,686 117,209 1,802,809
----------- ------------ ----------- -----------
----------- ------------ ----------- -----------
</TABLE>
------------------------------
<TABLE>
<C> <S>
(1) Commenced operations on 5/7/99.
(2) Commenced operations on 8/14/00.
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
48
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
------------------------------------------------------------------------
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 eight Funds offer Retirement shares ("Class R"). The Class R shares have no
sales charge and distribution fees but have a shareholder servicing fee. The
eight 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 the
Investment Adviser 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
--------------------------------------------------------------------------------
49
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED) -- CONTINUED
--------------------------------------------------------------------------------
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 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 September
30, 2000 were:
<TABLE>
<CAPTION>
MARKET VALUE COLLATERAL
FUND (IN 000'S) (IN 000'S)
---- ------------ -----------
<S> <C> <C>
International Core Growth................. $ 32,059 $ 34,744
Emerging Countries........................ 22,062 23,362
Large Cap Growth.......................... 14,004 14,565
Mid Cap Growth............................ 19,061 19,574
Small Cap Growth.......................... 27,289 29,142
Value..................................... 520 537
</TABLE>
--------------------------------------------------------------------------------
50
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED) -- CONTINUED
--------------------------------------------------------------------------------
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. During the period, none of the
Funds had made use of the credit facility.
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 Fund............................... $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.
NICHOLAS-APPLEGATE SOUTHEAST ASIA FUND, LTD.
The Emerging Countries Fund, Global Technology Fund, and International Small
Cap Growth Fund invest in the Indian stock markets through Nicholas-Applegate
Southeast Asia Fund Ltd., a limited life company incorporated under the laws of
Mauritius (the "Mauritius Subsidiary"). The Mauritius Subsidiary is entitled to
benefit from the double taxation treaty between India and Mauritius and invest
in India in what the Investment Adviser considers to be the most efficient way
currently available. Each Fund holds a 100% interest in a separate class of
securities issued by the Mauritius Subsidiary, represented by a separate,
underlying portfolio of securities. The accounts of the Mauritius Subsidiary are
reflected in the Funds using consolidation accounting principles.
--------------------------------------------------------------------------------
51
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED) -- CONTINUED
--------------------------------------------------------------------------------
NOTE C -- TRANSACTIONS WITH AFFILIATES
Nicholas-Applegate Capital Management, as the Investment Adviser 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%
High Yield Bond..................... 0.60%
</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 Adviser 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 Adviser has entered
into an agreement with Criterion Investment Management LLC, ("the subadviser").
The agreement states that the subadviser will receive a fee paid by the
Investment Adviser at an annualized rate of 0.25% of each of the Fund's daily
net assets.
The Investment Adviser has agreed to limit the Fund's expenses to certain
levels through March 31, 2001. Expenses reimbursed by the Investment Adviser
prior to July 24, 1998 may be recouped from the Funds within five years of that
date. Expenses reimbursed by the Investment Adviser 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 Adviser will recover such reimbursements to the extent of the
differences between a Fund's actual expenses (exclusive of interest expense,
taxes, brokerage, and the costs of establishing and maintaining the Mauritius
entity) when they fall below the limit, and the voluntary limit.
<TABLE>
<CAPTION>
EXPENSE LIMIT
-------------------------- UNREIMBURSED
INSTITUTIONAL RETIREMENT AMOUNTS
FUND CLASS CLASS AT 9/30/00
----------------------------- ------------- ---------- -------------
<S> <C> <C> <C>
International Core Growth.... 1.00% 1.25% $ 75,687
Emerging Countries........... 1.65% 1.90% 1,060,124
Large Cap Growth............. 1.00% 1.25% 155,163
Mid Cap Growth............... 1.00% 1.25% 964,970
Small Cap Growth............. 1.17% 1.42% 1,833,701
Value........................ 1.00% 1.25% 360,134
High Quality Bond............ 0.45% 0.70% 701,291
High Yield Bond.............. 0.75% 1.00% 178,507
</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 Adviser and
Distributor. The Trustees who are not affiliated with the Investment Adviser
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 six-month ended September 30, 2000 to
indicate the volume of transactions in each Fund. The tax cost of securities
held at September 30, 2000 and the related gross and net unrealized appreciation
and depreciation, provides aggregate
--------------------------------------------------------------------------------
52
<PAGE>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED) -- CONTINUED
--------------------------------------------------------------------------------
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>
International
Core Growth......... $385,598 $344,637 $290,525 $34,827 $13,798 $21,029
Emerging Countries... 338,990 267,052 270,987 30,025 19,742 10,283
Large Cap Growth..... 119,453 82,003 129,221 30,777 4,656 26,121
Mid Cap Growth....... 164,095 170,085 167,811 78,259 4,648 73,611
Small Cap Growth..... 117,696 109,450 197,792 88,787 18,569 70,218
Value................ 37,552 27,219 43,368 4,944 3,065 1,879
High Quality Bond.... 32,374 33,762 21,397 305 406 (101)
High Yield Bond...... 14,000 12,362 23,104 207 1,745 (1,538)
</TABLE>
NOTE E -- FINANCIAL INSTRUMENTS
During the period, several of the Funds have been party to financial
instruments with off-balance sheet risks, including forward foreign currency
contracts and futures contracts, primarily in an attempt to minimize the risk to
the Fund, in respect of its portfolio transactions. These instruments involve
market and/or credit risk in excess of the amount recognized in the Statement of
Assets and Liabilities. Risks arise from the possible inability of
counterparties to meet the terms of their contracts and from unexpected movement
in currencies, securities values and interest rates. The contract amounts
indicate the extent of the Funds' involvement in such contracts.
FORWARDS
When entering a forward currency contract, the Fund agrees to receive or
deliver a fixed quantity of foreign currency for an agreed upon price on an
agreed upon future date.
At September 30, 2000, High Quality Bond Fund had outstanding forward
contracts for the purchase and sale of currencies as set out below. The
contracts are reported in the financial statements at the Fund's net equity, as
measured by the difference between the forward foreign exchange rates at the
dates of entry into the contracts and the forward rates at the reporting date,
or the date an offsetting position, if any, has been entered into.
<TABLE>
<CAPTION>
NET
UNREALIZED
LOCAL SETTLEMENT MARKET APPRECIATION/
CURRENCY DATE VALUE (DEPRECIATION)
--------- ---------------- -------- --------------
US$ US$
<S> <C> <C> <C> <C>
HIGH QUALITY BOND
To Buy:
European Euro........................ 118,000 November 8, 2000 104,322 (6,285)
European Euro........................ 100,000 November 8, 2000 88,408 (2,672)
To Sell:
European Euro........................ 200,000 November 8, 2000 (176,816) 6,809
European Euro........................ 380,000 November 8, 2000 (335,951) 3,237
European Euro........................ 350,000 November 8, 2000 (309,428) (6,818)
------
Net equity in foreign currency
exchange contracts.................. (5,729)
======
</TABLE>
FUTURES
At September 30, 2000, High Quality Bond had outstanding futures contracts as
follows:
<TABLE>
<CAPTION>
MATURITY VALUE AT UNREALIZED
UNITS DATE OPEN VALUE 9/30/00 GAIN (LOSS)
-------- --------- ----------- -------- -----------
<S> <C> <C> <C> <C> <C>
United States Treasury Bonds 6 12/01/00 $590,250 $591,938 $ 1,688
United States Treasury Bonds 7 12/01/00 $702,844 $690,594 (12,250)
United States Treasury Bonds 6 12/01/00 $586,688 $591,938 5,250
--------
Total Futures $ (5,312)
========
</TABLE>
At September 30, 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 9/30/00
--------- -----------
<S> <C> <C>
United States Treasury Notes, 5.75%, 11/15/2000 $149,361 $149,859
--------
Total collateral for futures contracts $149,859
========
</TABLE>
--------------------------------------------------------------------------------
53
<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-
I N S T I T U T I O N A L F U N D S
600 West Broadway
San Diego, California 92101
800 - 551 - 8643
Nicholas-Applegate Securities, Distributor
SEMIANN900RET
