<PAGE>
[LOGO PACIFIC
CAPITAL FUNDS]
- ----------------
Annual Report
To Shareholders
July 31, 1996
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<PAGE>
PACIFIC CAPITAL FUNDS
JULY 31, 1996
LETTER TO SHAREHOLDERS
Dear Shareholders:
The past 12 months have been a productive time for the Pacific Capital Funds,
as we continue to grow in directions that will serve you better. The Funds' net
assets grew 27% to $805 million during the period, reflecting growing investor
interest in our diversified array of Funds.
The recent period was a volatile one for both the stock and bond markets, as
investors debated the likely direction of the economy, inflation and long-term
interest rates. Such fluctuations are an important reminder of some crucial
investment principles.
First, investors should allocate their savings among a variety of asset
classes to help moderate price volatility under different market conditions.
Second, it's essential to understand your own investment time horizon. If you
are investing toward long-term goals, it can make sense to take advantage of
the growth potential of stocks and other growth-oriented assets. Seasoned
investors know that it's generally unwise to time the market, especially as a
long-term investor. History has shown that people able to ride out short-term
gyrations in the markets have tended to come out ahead--over the long term.
Third, regular contributions to a portfolio of well-managed mutual funds can
be an excellent way to combat inflation and taxes over time.
Increasingly, Americans are recognizing the role that mutual funds can play
in their future. Total mutual fund assets grew from $2.5 trillion to $3.2
trillion during the recent 12-month period. Most of that growth took place in
stock funds, as investors became more comfortable putting their money to work
in long-term growth investments.
In that favorable environment, we have worked hard to increase the Pacific
Capital Funds' assets, creating economies of scale that will benefit
shareholders. For example, this past year Merrill Lynch and Wedbush Morgan
Securities joined Bancorp Investment Group to make Pacific Capital Funds more
readily available to retail investors.
Moreover, distribution sales forces have designed new products and services
that use the Pacific Capital Funds. Among them:
. The Pacific Capital Funds IRA, a service that lets investors purchase any
of six long-term Pacific Capital Funds and two money market funds for
their IRAs. The service is available through Bancorp Investment Group.
. Life$pan, a mutual fund asset allocation product managed by Hawaiian
Trust Company. Research has shown that asset allocation, not the
selection of individual securities, is the primary determining factor in
investment results.* Life$pan offers an account invested in a fixed
number of Pacific Capital Funds and other mutual funds. The mix of funds
is driven by market conditions as well as each shareholders' investment
approach, which can range from conservative to aggressive.
. Future Horizons 401(k) Retirement Plan, administered by Hawaiian Trust
Company, which makes Pacific Capital Funds and other mutual funds
available to participants in 401(k) plans. (Bank of Hawaii has also made
Pacific Capital Funds available to its employees enrolled in the company-
sponsored 401(k) plan.)
1
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We thank you for investing in the Pacific Capital Funds and will continue to
look for new ways to further increase the Funds' assets, thereby creating added
shareholder value. If you have questions or would like a Fund prospectus,
please contact your registered representative or call the Funds' transfer agent
at 1-800-258-9232.
Sincerely,
/s/ Deborah G. Patterson
Deborah G. Patterson
Senior Vice President, Bank of Hawaii
Trustee, The Pacific Capital Funds
*Brinson, Beebower & Hood, 1991
AS WITH ALL MUTUAL FUNDS, SHARES IN THE PACIFIC CAPITAL FUNDS
.ARE NOT FDIC INSURED
.HAVE NO BANK GUARANTEE
.MAY LOSE VALUE
2
<PAGE>
LETTER FROM THE INVESTMENT ADVISER
The 12-month period ended July 31, 1996, was marked by uncertainty about the
strength of the economy, the outlook for inflation and the likely direction of
interest rates. That uncertainty led to volatility in both the stock and bond
markets. Although stock prices posted gains during the year, different sectors
of the market experienced losses at various times, and bonds suffered
significant setbacks late in the period.
PROSPECTS FOR SLOWER GROWTH
Losses in bonds occurred after the economy rebounded sharply this spring and
interest rates rose. The economy grew at a revised annualized rate of 4.8% in
the second quarter of 1996, a significant jump from around 2% during the first
quarter, bringing the average growth rate to over 3% for the first half of
1996.
Nevertheless, we believe that economic growth will slow during the second
half of the year to less than 2% on an annual basis. One reason: consumer
spending, which makes up some two-thirds of the U.S. economy, will slow.
Although consumer confidence remains high, individuals are burdened with
mounting debt problems. In fact, consumer installment debt payments as a
percentage of personal income are at a 35-year high. So it's not surprising
that we already have seen increases in credit card and mortgage delinquencies.
Consumers aren't the only ones approaching their spending limits. Capital
spending also is down. Moreover, our exports are declining as the economies of
our major trading partners remain weak. Thus, overseas demand won't compensate
for slower spending in the United States.
The good news is that a weaker economy means lower inflationary pressures.
Leading inflation forecasts from the Economic Cycle Research Institute and the
Columbia Center for International Business Cycle Research suggest that
inflation will remain under control during the coming months.
BONDS AND STOCKS OFFER OPPORTUNITIES
Yields on long-term Treasury bonds moved up to 7.2% this spring before
retreating to around 7.0% at the end of July. We believe that bonds are
attractive at recent yield levels, since long-term interest rates could fall
below 6.4% as the economy continues to slow during the remainder of the year.
As a result, we believe that this a good time to lock in current yields.
We also continue to believe that stocks are still a good long-term
investment, although they appear to have entered a correction phase that could
last several months. Some sort of correction was long overdue, as stock prices
have been rising without much significant interruption since 1990.
At the same time, it seems likely that corporate earnings growth will slow
during the coming months. And while declining bond yields will help offset the
impact of lower earnings on stock prices, we have shifted our stock portfolios
toward slightly more defensive positions. Broadly diversified portfolios of
high-quality stocks should help the Funds weather short-term volatility while
providing opportunity for long-term results that may help you meet your goals
as an investor. We will take advantage of market corrections that occur to
purchase undervalued securities that we believe can improve the Funds'
prospects.
Sincerely,
/s/ William J. Barton
William J. Barton
Senior Vice President, Manager
Investment Management Group
Hawaiian Trust Company, Ltd.
3
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FUND PERFORMANCE REPORT
PACIFIC CAPITAL GROWTH STOCK FUND
"We expect high-quality growth stocks to perform well in a slow-growth
environment." -- Christopher Sullivan, Portfolio Manager
PACIFIC CAPITAL GROWTH STOCK FUND+
GROWTH OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
Average Annual Total Return
07/31/96 1 Year 5 Year 10 Year
<S> <C> <C> <C>
Retail (A)* 3.90% 8.88% 10.77%
Institutional (B) 8.53% 10.02% 11.52%
</TABLE>
10/14/94, Commencement of operations
of Institutional Class
11/1/93, Commencement of operations
of Retail Class
<TABLE>
<CAPTION>
S&P/BARRA Growth Index++ Retail (A)* Institutional (B) No Load
<S> <C> <C> <C>
7/31/86 10000 9591 10000
7/31/87 13819 12974 13586
7/31/88 11595 10776 11310
7/31/89 15455 13341 14046
7/31/90 17286 15323 16184
7/31/91 19962 17435 18483
7/31/92 22414 19181 20391
7/31/93 22745 20108 21425
7/31/94 23900 21326 22748
7/31/95 31245 25682 27443
7/31/96 36750 27801 29784
</TABLE>
*Reflects 4.0% Maximum Sales Charge
Past performance is not predictive of future results.
+The quoted performance of the Pacific Capital Growth Stock Fund ("Fund")
includes the performance of certain common trust fund ("Commingled") accounts
advised by Hawaiian Trust Company and managed the same as the Fund in all
material respects, for periods dating back to July 31, 1986 and prior to the
Fund's commencement of operations on November 1, 1993, for the Retail Class,
and on October 14, 1994, for the Institutional Class as adjusted to reflect
the expenses associated with the Fund. The Commingled accounts were not
registered with the Securities and Exchange Commission under the Investment
Company Act of 1940 and therefore were not subject to the investment
restrictions imposed by law on registered mutual funds. If the Commingled
accounts had been registered, the Commingled accounts' performance may have
been adversely affected.
++The Standard & Poor's BARRA Growth Index, is unmanaged and is generally
representative of the performance of the growth stock universe. The index does
not reflect the deduction of fees associated with a mutual fund, such as
investment management and fund accounting fees. The Fund's performance
reflects the deduction of fees for these value-added services.
Investment return and NAV will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than the original cost.
The Fund returned 8.25% during the 12 months ended July 31, 1996 (Returns are
for Retail Class without the sales charge). That performance lagged the return
of the Fund's benchmark, the S&P/BARRA Growth Index, since much of the index's
performance was fueled by strong gains among shares of technology firms and
other companies whose fortunes are closely linked to the strength of the
economy. Prices of such stocks rose sharply as the economy gained momentum in
early 1996.
In contrast, the Fund continued to adhere to its long-term strategy, which
calls for a commitment to shares of high-quality growth companies. The
portfolio's largest holdings recently included General Electric, Coca-Cola,
American International Group, Procter & Gamble and Johnson & Johnson. Such
companies
4
<PAGE>
generally share one or more of the following qualities: strong management; the
ability to be a low-cost provider to customers; a leading market share;
technological leadership; low or moderate debt.
Shares of these kinds of high-quality firms generally lag the market during
periods like the past 12 months, when economically sensitive stocks are in
favor and corporate earnings are growing strongly. But we expect that quite
different conditions will prevail during the coming months.
Most important, it seems likely that earnings growth for many companies will
slow along with the economy. If that occurs, investors will be paying a premium
for shares of companies that can generate consistent earnings growth--the kinds
of companies we focus on. We will continue to maintain a broadly diversified
portfolio of such companies, confident that our approach will deliver solid
returns over the long term.
As of July 31, 1996, the Fund's top five holdings as a percent of total
assets were General Electric (3.73%), Coca-Cola (3.58%), Procter & Gamble
(2.83%), Philip Morris (2.65%) and Johnson & Johnson (2.64%).+
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+The composition of the Fund's holdings is subject to change.
5
<PAGE>
PACIFIC CAPITAL GROWTH AND INCOME FUND
"We emphasized individual stocks rather than made large bets on a particular
sector of the market." -- Roger Khlopin, Portfolio Manager
PACIFIC CAPITAL GROWTH AND INCOME FUND+
GROWTH OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
Average Annual Total Return
07/31/96 1 Year 5 Year 10 Year
<S> <C> <C> <C>
Retail (A)* 7.45% 8.06% 9.62%
Institutional (B) 12.29% 9.20% 10.33%
</TABLE>
10/14/94, Commencement of operations of the
Retail and Institutional Classes
<TABLE>
<CAPTION>
S&P 500 Stock Index++ Retail (A)* Institutional (B) No Load
<S> <C> <C> <C>
7/31/86 10000 9596 10000
7/31/87 13924 12212 12761
7/31/88 12299 11039 11554
7/31/89 16219 13981 14663
7/13/90 17267 15135 15931
7/31/91 19473 16327 17219
7/31/92 21959 17942 18978
7/31/93 23863 18462 19571
7/31/94 25101 18769 19939
7/31/95 31641 22375 23805
7/31/96 36878 25051 26730
</TABLE>
* Reflects 4.0% Maximum Sales Charge
Past performance is not predictive of future results.
+ The quoted performance of the Pacific Capital Growth and Income Fund ("Fund")
includes the performance of certain common trust fund ("Commingled") accounts
advised by Hawaiian Trust Company and managed the same as the Fund in all
material respects, for periods dating back to July 31, 1986 and prior to the
Fund's commencement of operations on October 14, 1994, as adjusted to reflect
the expenses associated with the Fund. The Commingled accounts were not
registered with the Securities and Exchange Commission under the Investment
Company Act of 1940 and therefore were not subject to the investment
restrictions imposed by law on registered mutual funds. If the Commingled
accounts had been registered, the Commingled accounts' performance may have
been adversely affected.
++The Standard & Poor's 500 Stock Index, is unmanaged and is generally
representative of the performance of the domestic stock universe. The index
does not reflect the deduction of fees associated with a mutual fund, such as
investment management and fund accounting fees. The Fund's performance
reflects the deduction of fees for these value-added services.
Investment return and NAV will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than the original cost.
During the 12 months ended July 31, 1996, the Fund delivered a total return
of 11.96% (Returns are for Retail Class without the sales charge) reflecting
market conditions as well as strategic changes in the portfolio.
Performance was helped as the Fund became more fully invested and reduced its
cash position to around 2.5% during the period. In addition, we found a number
of bargains in the technology sector when those stocks sustained losses. As a
result, the Fund's allocation to technology shares climbed from around 9% of
the portfolio a year ago to 13.5% at the end of the period on July 31. The
portfolio also included a significant stake in shares of firms in the
industrial and basic materials sectors. Thus, it was well positioned for an
environment of economic growth.
We reduced the Fund's exposure to utility shares and other interest-rate-
sensitive stocks during late 1995 because their prices seemed high relative to
the stocks' underlying fundamentals. This helped the Fund's performance when
interest rates climbed in 1996. However, as rising rates caused utility share
prices to decline, we took advantage of the opportunity to buy back such stocks
at attractive price levels.
6
<PAGE>
There was considerable uncertainty among investors about the outlook for the
economy, and, as a result, certain sectors of the stock market experienced a
great deal of volatility. We resisted the temptation to make large bets on
particular sectors. Instead, the Fund emphasized individual stock picks,
searching for long-term value. We will continue to take a stock-by-stock
approach in the months ahead, maintaining a solid core of blue-chip stocks
mixed with shares of more rapidly growing firms in a wide variety of sectors.
As of July 31, 1996, the Fund's top five holdings as a percent of total
assets were Philip Morris (2.89%), General Electric (2.87%), Southern Co.
(2.23%), SBC Communications (2.22%) and Hormel Foods (1.93%).+
- --------
+The composition of the Fund's holdings is subject to change.
7
<PAGE>
PACIFIC CAPITAL NEW ASIA GROWTH FUND/1/
"We expect long-term economic growth rates to be relatively high in the
region." -- Tim Greaton, Portfolio Manager
PACIFIC CAPITAL NEW ASIA GROWTH FUND
GROWTH OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
Average Annual Total Return
Since
Inception
07/31/96 1 Year (2/15/95)
<S> <C> <C>
Retail (A)* -3.62% 5.46%
Institutional (B) 1.99% 9.68%
</TABLE>
<TABLE>
<CAPTION>
MSCI Far East Index (excluding Japan) Retail (A)* Institutional (B) No Load
<S> <C> <C> <C>
2/15/95 10000 9479 10000
7/31/95 11629.24 10626 11220
1/31/96 12106 11527 12183
7/31/96 13729 10807 11444
</TABLE>
* Reflects 5.25% Maximum Sales Change
Past performance is not predictive of future results.
The performance of the Pacific Capital New Asia Growth Fund is measured against
the Morgan Stanley Capital International (MSCI) Far East Index (excluding
Japan), which is unmanaged and is generally representative of the performance
of stock markets in that region. The index does not reflect the deduction of
fees associated with a mutual fund, such as investment management and fund
accounting fees. The Fund's performance reflects the deduction of fees for
these value-added services. Investment return and NAV will fluctuate, so that
an investor's shares, when redeemed, may be worth more or less than the
original cost.
During the 12 months ended July 31, the Fund's first full year of operation,
the Fund had a total return of 1.71% (Returns are for Retail Class without the
sales charge). During the period, the benchmark MSCI Far East Index (excluding
Japan), returned 7.64%.
The Asian markets posted gains during much of the period but experienced
sharp declines in July due to a sea of change in investor sentiment toward the
U.S. market. When evidence of economic strength and rising labor costs raised
the prospect of higher U.S. interest rates, stock prices in the United States
fell--and the decline in the U.S. markets had an immediate effect on the
smaller markets in Asia.
Some investors also became concerned that economic growth in Asia was
slowing. But despite slower growth in recent months, we believe long-term
economic growth rates will be relatively high in the region. The recent
slowdown was caused in part by declining demand for electronic goods, which
make up a hefty percentage of many developing economies' exports. But we are
confident that demand will pick up in the second half of 1996, and the managers
of electronics companies in the region seem to share our optimism.
In addition, some countries in Asia are at very different stages of the
economic cycle than the United States. China, for example, has been trying for
the past two to three years to slow its growth rate to avoid a resurgence of
inflation. These measures recently have been fruitful: Inflation in China has
fallen from above 20% in early 1995 to the mid-single digits. It now appears
there is ample room for a relaxation of monetary policy, which would accelerate
growth.
The Fund remains focused on areas of growth, where we think earnings will be
relatively stable regardless of fluctuations in the macroeconomic prospects of
any one country or group of countries. As a result, more than half the Fund's
assets are invested in infrastructure, financial services, retail and consumer
products.
8
<PAGE>
Looking forward, we remain confident in our positive outlook for the region
and the Fund. We will continue to hold a diversified portfolio of promising
growth stocks in the region and take advantage of market fluctuations to buy
such shares at attractive prices.
As of July 31, 1996, the Fund's top five holdings as a percentage of total
assets were Sunrise Berhad (Malaysia, 3.80%), Henderson Land (Hong Kong,
3.23%), Fil-Estate Land (Philippines, 3.21%), Dong-Ah Construction (Korea,
3.18%) and Co-Generation (Thailand, 2.81%).+
- --------
/1/International investing is subject to certain risk factors, such as
currency exchange-rate volatility, possible political, social or economic
instability, foreign taxation and differences in auditing and other financial
standards.
+The composition of the Fund's holdings is subject to change.
9
<PAGE>
PACIFIC CAPITAL U.S. TREASURY SECURITIES FUND
"We have worked to lower the Fund's price sensitivity to fluctuations in the
bond market." -- Dave Todani, Portfolio Manager
PACIFIC CAPITAL U.S. TREASURY SECURITIES FUND+
GROWTH OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
Average Annual Total Return
07/31/996 1 Year 5 Year 10 Year
<S> <C> <C> <C>
Retail (A)* -0.68% 6.34% 6.08%
Institutional (B) 3.71% 7.40% 6.72%
</TABLE>
10/14/94, Commencement of operations
of Institutional Class
11/1/93 Commencement of operations
of Retail Class
<TABLE>
<CAPTION>
Merrill Lynch 10-15 Yr. Govt./U.S. Treas. Index++ Retail (A)* Institutional (B) No Load
<S> <C> <C> <C>
7/31/86 10000 9592 10000
7/31/87 10059 9490 9910
7/31/88 10710 9813 10251
7/31/89 12851 11208 11742
7/31/90 13414 11684 12244
7/31/91 14809 12738 13393
7/31/92 17569 14677 15458
7/31/93 20208 16378 17271
7/31/94 19787 15826 16707
7/31/95 22211 17438 18460
7/31/96 23324 18036 19144
</TABLE>
* Retail 4.0% Maximum Sales Charge
Past performance is not predictive of future results.
+The quoted performance of the Pacific Capital U.S. Treasury Securities Fund
("Fund") includes the performance of certain common trust fund ("Commingled")
accounts advised by Hawaiian Trust Company and managed the same as the Fund in
all material respects, for periods dating back to July 31, 1986 and prior to
the Fund's commencement of operations on November 1, 1993, for the Retail
Class, and on October 14, 1994, for the Institutional Class, as adjusted to
reflect the expenses associated with the Fund. The Commingled accounts were
not registered with the Securities and Exchange Commission under the
Investment Company Act of 1940, and therefore were not subject to the
investment restrictions imposed by law on registered mutual funds. If the
Commingled accounts had been registered, the Commingled accounts' performance
may have been adversely affected.
++The Merrill Lynch 10-15 Year Government/U.S. Treasury Index, is unmanaged and
is generally representative of the performance of long-term Treasury bonds.
The index does not reflect the deduction of fees associated with a mutual
fund, such as investment management and fund accounting fees. The Fund's
performance reflects the deduction of fees for these value-added services.
Investment return and NAV will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than the original cost.
The Fund began the fiscal year with a long average maturity of 17.1 years for
its securities. The Fund's duration, which is a measure of the securities'
price sensitivity to movements in interest rates, was also long at 8.5 years.
Both measures were greater than those of the portfolio's benchmark because we
expected a slower economy and lower interest rates, which would increase the
value of longer-maturity securities. As the economy slowed and the Federal
Reserve lowered the federal funds rate--the benchmark for short-term rates--our
strategy worked extremely well and enabled the Fund to post strong returns
during calendar 1995.
Early in 1996, however, the momentum of the bond market shifted. Although
economic data continued to look weak, and even though the Federal Reserve eased
the federal funds rate to 5.25% at the end of January, the market began to sell
off as investors became concerned over potentially stronger growth and the
threat of inflation later in the year. We also became concerned about the
growing strength of the economic data and the reaction of the bond market and
thus began to reduce the Fund's sensitivity to the market decline. By the end
of our fiscal year in July, we had shortened the Fund's maturity to 11.7 years
and its duration to 6.4 years. This action helped to cushion the Fund's value
from the extreme price volatility of the market through the end of
10
<PAGE>
July. Our investment strategy resulted in a total return of 3.43% for the Fund
for the 12 months ended July 31, 1996 (Returns are for Retail Class without the
sales charge).
Although the 12-month period ended July 31 has been a difficult environment
for bond funds, we are optimistic that the coming year will be better, with
increasing signs of a moderate to slower economy and little in the way of
inflation. We believe that the Fund is well positioned to benefit from this
course of events.
11
<PAGE>
PACIFIC CAPITAL SHORT INTERMEDIATE U.S. TREASURY SECURITIES FUND
"We reduced the Fund's average maturity, which boosted returns late in the
period." -- Dave Todani, Portfolio Manager
PACIFIC CAPITAL SHORT INTERMEDIATE U.S. TREASURY SECURITIES FUND
GROWTH OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
Average Annual Total Return
Since
Inception
07/31/96 1 Year (12/13/93)
<S> <C> <C>
Retail (A)* 1.57% 1.86%
Institutional (B) 4.18% 2.95%
</TABLE>
<TABLE>
<CAPTION>
Merrill Lynch 3-5 Year U.S. Treasury Index Retail (A)* Institutional (B) No Load
<S> <C> <C> <C>
12/13/93 10000 9775 10000
1/31/94 10111 9869 10096
7/31/94 9841 9506 9724
1/31/95 9904 9459 9692
7/31/95 10722 10103 10363
1/31/96 11405 10695 10998
7/31/96 11255 10497 10797
</TABLE>
* Reflects 2.25% Maximum Sales Charge
Past performance is not predictive of future results.
The performance of the Pacific Capital Short Intermediate U.S. Treasury
Securities Fund is measured against the Merrill Lynch 3-5 Year U.S. Treasury
Index, which is unmanaged and is generally representative of the performance of
short-term Treasury bonds. The index does not reflect the deduction of fees
associated with a mutual fund, such as investment management and fund
accounting fees. The Fund's performance reflects the deduction of fees for
these value-added services. Investment return and NAV will fluctuate, so that
an investor's shares, when redeemed, may be worth more or less than the
original cost.
Since longer-term issues perform better when interest rates decline, the
Short Intermediate U.S. Treasury Securities Fund's portfolio benefited in 1995
when interest rates fell. But early this year, reports of stronger economic
growth pushed rates higher, leading us to reduce the Fund's average maturity
from around 4.0 years in July 1995 to 3.3 years by July 1996. The reason: It
seemed unlikely that the Federal Reserve Board would act to lower short-term
interest rates with the economy showing such strong growth. Despite a difficult
bond market, the strategy boosted the Fund's returns during the spring and
early summer and resulted in a positive return of 3.90% during the 12 months
ended July 31, 1996 (Returns are for Retail Class without the sales charge).
Over the course of the year, we actively reduced the Fund's price sensitivity
to the decline in the bond market and at the same time improved its cash flow.
This latter activity was accomplished by trading out of lower-coupon, longer-
maturity securities and purchasing shorter-maturity, higher-coupon issues. We
expect that this will improve the Fund's cash distributions while reducing
price volatility.
Although long-term rates will likely decline during the coming months as the
economy slows, the direction of short-term rates lies largely in the hands of
the Federal Reserve. Thus, we will likely maintain a relatively short average
maturity for the Fund until we see signs of significantly slower economic
growth that could induce the Federal Reserve to lower short-term rates. When
this occurs, we would likely increase the Fund's maturity to capture potential
gains.
12
<PAGE>
PACIFIC CAPITAL DIVERSIFIED FIXED INCOME FUND
"We invested most of the Fund's new assets in government securities" -- Janet
Katakura, Portfolio Manager
PACIFIC CAPITAL DIVERSIFIED FIXED INCOME FUND+
GROWTH OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
Average Annual Total Return
07/31/96 1 Year 5 Year 10 Year
<S> <C> <C> <C>
Retail (A)* -0.48% 6.69% 6.70%
Institutional (B) 3.85% 7.97% 7.45%
</TABLE>
10/14/94, Commencement of operations of the
Retail and Institutional Classes
<TABLE>
<CAPTION>
Merrill Lynch Corporate & Government Master Index++ Retail (A)* Institutional (B) No Load
<S> <C> <C> <C>
7/31/86 10000 9607 10000
7/31/87 10364 9460 9878
7/31/88 11103 10049 10504
7/31/89 12812 11637 12209
7/31/90 13601 12111 12730
7/31/91 14995 13273 14000
7/31/92 17333 15368 16244
7/31/93 19247 17381 18417
7/31/94 19253 16727 17757
7/31/95 21229 18438 19774
7/31/96 22347 19118 20535
</TABLE>
* Reflects 4.0% Maximum Sales Charge
Past performance is not predictive of future results.
+The quoted performance of the Pacific Capital Diversified Fixed Income Fund
("Fund") includes the performance of certain common trust fund ("Commingled")
accounts advised by Hawaiian Trust Company and managed the same as the Fund in
all material respects, for periods dating back to July 31, 1986 and prior to
the Fund's commencement of operations on October 14, 1994, as adjusted to
reflect the expenses associated with the Fund. The Commingled accounts were
not registered with the Securities and Exchange Commission under the
Investment Company Act of 1940 and therefore were not subject to the
investment restrictions imposed by law on registered mutual funds. If the
Commingled accounts had been registered, the Commingled accounts' performance
may have been adversely affected.
++The Merrill Lynch Corporate and Government Master Index, is unmanaged and is
generally representative of the performance of corporate and U.S. Government
bonds. The index does not reflect the deduction of fees associated with a
mutual fund, such as investment management and fund accounting fees. The
Fund's performance reflects the deduction of fees for these value-added
services.
Investment return and NAV will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than the original cost.
From August to December, 1995 (the first five months of the Fund's fiscal
year), interest rates declined, continuing the trend of early 1995. The
direction of interest rates changed sharply in 1996, however, with 30-Year
Treasury bond rates moving from below 6% in January to a high of 7.20% in early
July. Bond prices move in the opposite direction to interest rates, so the rate
increase caused bond prices--and therefore, the Fund's value--to decline.
While we believe that this increase is temporary, evidence of stronger
economic growth, coupled with low inflation, has resulted in a very volatile
bond market. To reduce the impact of this instability on the portfolio, the
Fund's duration, which measures volatility, was shortened from 7.23 years at
the end of fiscal year 1995 to 5.76 years at the end of July 1996. This was,
however, a gradual process, and the Fund's longer-than-index duration caused it
to underperform the index. The Fund returned 3.69% for the 12 months ended July
31, 1996 (Returns are for Retail Class without the sales charge).
13
<PAGE>
We invested most of the Fund's new assets in government agency and treasury
securities. We continued to favor high-quality issues on the grounds that the
slightly higher yields available from corporate bonds do not justify additional
credit risk, however minimal.
We remain optimistic that by the end of 1996 we will see lower interest
rates, reflecting moderating economic growth and low inflation. As rates
decline, we anticipate lengthening the Fund's duration to capture potential
gains inherent to longer-term issues.
14
<PAGE>
PACIFIC CAPITAL TAX-FREE SECURITIES FUND*
"Low supply and falling interest rates should create a favorable environment
for the Fund." -- Yvonne Lim, Portfolio Manager
PACIFIC CAPITAL TAX-FREE SECURITIES FUND+
GROWTH OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
Average Annual Total Return
07/31/96 1 Year 5 Year 10 Year
<S> <C> <C> <C>
Retail (A)* 1.31% 5.69% 6.56%
Institutional (B) 5.73% 6.86% 7.28%
</TABLE>
10/14/94, Commencement of operations of the
Retail and Institutional Classes
<TABLE>
<CAPTION>
Lehman Brothers 20-Year Municipal Bond Index++ Retail (A)* Institutional (B) No Load
<S> <C> <C> <C>
7/31/86 10000 9607 10000
7/31/87 10906 10180 10627
7/31/88 11671 10852 11359
7/31/89 13091 12115 12700
7/31/90 13999 12738 13397
7/31/91 15222 13738 14477
7/31/92 17314 15541 16429
7/31/93 18844 16902 17909
7/31/94 19203 16754 17788
7/31/95 20716 17879 19083
7/31/96 22452 18869 20176
</TABLE>
* Reflects 4.0% Maximum Sales Charge
Past performance is not predictive of future results.
+The quoted performance of the Pacific Capital Tax-Free Securities Fund
("Fund") includes the performance of certain common trust fund ("Commingled")
accounts advised by Hawaiian Trust Company and managed the same as the Fund in
all material respects, for periods dating back to July 31, 1986 and prior to
the Fund's commencement of operations on October 14, 1994, as adjusted to
reflect the expenses associated with the Fund. The Commingled accounts were
not registered with the Securities and Exchange Commission under the
Investment Company Act of 1940 and therefore were not subject to the
investment restrictions imposed by law on registered mutual funds. If the
Commingled accounts had been registered, the Commingled accounts' performance
may have been adversely affected.
++The Lehman Brothers 20-Year Municipal Bond Index, is unmanaged and is
generally representative of the performance of long-term municipal bonds. The
Index does not reflect deduction of fees associated with a mutual fund, such
as investment management and fund accounting fees. The Fund's performance
reflects the deduction of fees for these value-added services.
Investment return and NAV will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than the original cost.
During the 12 months ended July 31, 1996, the Fund benefited from falling
interest rates in the first six months of the period, but gave up some gains in
early 1996, resulting in a total return of 5.54% for the fiscal year (Returns
are for Retail Class without the sales charge).
The bond markets were unfavorably affected when economic data for the first
quarter of 1996 indicated stronger-than-expected economic growth. Municipal
bonds underperformed taxable bonds during 1995 due to flat-tax concerns, but
after the presidential primaries, when a flat tax no longer seemed viable, the
municipal market started outperforming the taxable market. For example, the
yield on a AAA-rated, 30-year general obligation bond declined 20 basis points,
compared to an increase in the 30-Year Treasury bond yield of 12 basis points.
A dearth of supply in the municipal market also served to boost the performance
of the municipal market relative to the taxable bond market.
In anticipation of falling interest rates, the Fund was structured with a
relatively long duration.
However, it was structured in a manner that was much more defensive relative
to its benchmark, the Lehman Brothers 20-Year Municipal Bond Index, because of
its income orientation and, therefore, did not gain as much as the index.
Conversely, the Fund would have likely outperformed its benchmark in a
declining
15
<PAGE>
market environment. Since income and principal stability are key to the Fund's
objectives, the Fund's quality was further improved through the purchase of
secondary municipal bond insurance and the selection of high-quality
securities. We believe that this strategy will serve to benefit shareholders in
the long run, as high-quality credits maintain their value better, especially
during uncertain times.
Looking ahead, we anticipate the economy to slow down, accompanied by lower
interest rates. Municipal issuance is also expected to remain low, as taxpayer
resistance will likely keep debt issuance limits at a minimum. The combination
of these factors should give strong support to the municipal market and the
performance of the Fund.
- --------
* The Fund's income may be subject to the federal alternative minimum tax and
to certain state and local taxes.
16
<PAGE>
PACIFIC CAPITAL TAX-FREE SHORT INTERMEDIATE SECURITIES FUND*
"We increased the Fund's credit quality to help shelter it from volatility."
- -- Yvonne Lim, Portfolio Manager
PACIFIC CAPITAL TAX-FREE SHORT INTERMEDIATE SECURITIES FUND+
GROWTH OF A $10,000 INVESTMENT
<TABLE>
<CAPTION>
Average Annual Total Return
Since
Inception
07/31/96 1 Year 5 Year (3/31/88)
<S> <C> <C> <C>
Retail (A)* 1.11% 3.67% 4.24%
Institutional (B) 3.67% 4.45% 4.81%
</TABLE>
10/14/94, Commencement of operations of the
Retail and Institutional Classes
<TABLE>
<CAPTION>
Lehman Brothers 3-Year Lehman Brothers 5-Year
Municipal Bond Index++ Municipal Bond Index++ Retail (A) Institutional (B) No Load
<S> <C> <C> <C> <C>
3/31/88 10000 10000 9776 10000
7/31/88 10260 10132 9750 9975
7/31/89 11510 10943 10197 10469
7/31/90 12309 11707 10829 11140
7/31/91 13384 12713 11540 11908
7/31/92 15223 14309 12461 12881
7/31/93 16568 15254 12987 13464
7/31/94 16879 15679 13197 13715
7/31/95 18208 16848 13671 14278
7/31/96 22452 17614 14137 14803
</TABLE>
* Reflects 2.25% Maximum Sales Charge
Past performance is not predictive of future results.
+The quoted performance of the Pacific Capital Tax-Free Short Intermediate
Securities Fund ("Fund") includes the performance of certain common trust fund
("Commingled") accounts advised by Hawaiian Trust Company and managed the same
as the Fund in all material respects for periods dating back to March 31,
1988, and prior to the Fund's commencement of operations on October 14, 1994,
as adjusted to reflect the expenses associated with the Fund. The Commingled
accounts were not registered with the Securities and Exchange Commission under
the Investment Company Act of 1940 and therefore were not subject to the
investment restrictions imposed by law on registered mutual funds. If the
Commingled accounts had been registered, the Commingled accounts' performance
may have been adversely affected.
++The Lehman Brothers 3-Year Municipal Bond Index, which has been in existence
since December 31, 1989, is unmanaged and generally representative of the
performance of short-term municipal bonds. Until recently, the Fund's
performance was measured against this index. To provide a comparison of the
Fund's performance since the inception of the Commingled accounts (March 31,
1988), the Fund is now being measured against the Lehman Brothers 5-Year
Municipal Bond Index. This index tracks bonds with a maturity range of four to
six years. It's important to note that the Fund may only invest in bonds with
a maturity range of five years or less. Neither index reflects the deduction
of fees associated with a mutual fund, such as investment management and fund
accounting fees. The Fund's performance reflects the deduction of fees for
these value-added services.
Investment return and NAV will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than the original cost. Past performance
is not indicative of future results.
The Fund gave up much of its 1995 gains when first quarter 1996 economic
growth pointed to an unexpectedly resilient economy, effectively dashing
expectations of a decrease in interest rates. Although the Federal Reserve
Board has remained neutral since it last eased rates at the end of January,
many believe that
17
<PAGE>
the next move will be a tightening rather than an easing. As a result, short-
term tax-exempt rates have gone up, albeit not as much as their taxable
counterparts. Short-term municipals have continued to outperform short-term
taxable bonds primarily because of a lack of supply. In 1995, short-term
municipal bonds benefited from flat-tax concerns, which drove investors from
long-term bonds to the relatively safer haven of short-term bonds.
Consistent with our interest-rate outlook, the average maturity of the Fund
was extended throughout the 12 months ended July 31, 1996, in order to capture
higher yields and position the Fund for a bond market rally. As the scenario of
a further Federal Reserve board ease did not materialize, short-term rates
increased, and the Fund experienced negative returns, albeit not as much as its
benchmark, the Lehman Brothers 5-Year Municipal Bond Index, which has a longer
duration. Conversely, the Fund also did not gain as much during the first half
of the fiscal year when interest rates declined because of its shorter
duration. For the 12 months ended July 31, 1996, the Fund posted a total return
of 3.41% (Returns are for Retail Class without the sales charge).
Looking ahead, we are still convinced that the economy will slow down in the
second half of 1996 as the combination of high consumer-debt levels, fiscal and
monetary restraint and the absence of inflationary pressures continue to create
a favorable environment for the bond market. The high quality and longer
maturity of the Fund should benefit its performance when this happens.
- --------
* The Fund's income may be subject to the federal alternative minimum tax and
to certain state and local taxes.
18
<PAGE>
TABLE OF CONTENTS
Report of Independent Auditors
Page 20
Statements of Assets and Liabilities
Page 21
Statements of Operations
Page 23
Statements of Changes in Net Assets
Page 25
Schedules of Portfolio Investments
Page 28
Notes to Financial Statements
Page 46
Financial Highlights
Page 58
19
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Shareholders and Trustees of Pacific Capital Funds
We have audited the accompanying statements of assets and liabilities,
including the schedules of portfolio investments of the Pacific Capital Funds
(comprising, respectively, Growth Stock Fund, U.S. Treasury Securities Fund,
Short Intermediate U.S. Treasury Securities Fund, Growth and Income Fund,
Diversified Fixed Income Fund, Tax-Free Securities Fund, Tax-Free Short
Intermediate Securities Fund, and New Asia Growth Fund) as of July 31, 1996,
and the related statements of operations, the statements of changes in net
assets, and the financial highlights for the periods presented herein. These
financial statements and financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of July 31, 1996, by correspondence with the custodian and brokers.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
respective portfolios constituting the Pacific Capital Funds at July 31, 1996,
the results of their operations, and the changes in their net assets and
financial highlights for the periods presented herein, in conformity with
generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
Columbus, Ohio
September 13, 1996
20
<PAGE>
PACIFIC CAPITAL FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
JULY 31, 1996
<TABLE>
<CAPTION>
SHORT INTERMEDIATE
GROWTH U.S. TREASURY U.S. TREASURY
STOCK SECURITIES SECURITIES GROWTH AND
FUND FUND FUND INCOME FUND
------------ ------------- ------------------ -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value
(Cost $149,647,144;
$23,093,188;
$24,650,387; and
$70,381,459
respectively).......... $178,920,521 $23,694,556 $24,444,242 $76,207,067
Interest and dividends
receivable............. 256,999 572,461 277,389 99,538
Receivable for capital
shares issued.......... 34,755 -- -- 26,023
Receivable from brokers
for investments sold... 1,553,567 -- -- 1,112,135
Prepaid expenses and
other assets........... -- 3,246 12,307 8
------------ ----------- ----------- -----------
Total Assets.......... 180,765,842 24,270,263 24,733,938 77,444,771
------------ ----------- ----------- -----------
LIABILITIES:
Dividends payable....... -- 7,794 7,368 --
Payable to brokers for
investments purchased.. 2,732,781 -- -- 1,764,988
Accrued expenses and
other payables:
Investment advisory
fees.................. 121,054 12,798 6,364 51,489
Administration fees.... 24,211 3,413 3,182 10,298
Distribution fees--Re-
tail Class............ 1,117 211 243 233
Fund accounting and
transfer agent fees... 9,668 4,671 4,605 6,740
Other.................. 51,615 13,928 10,768 23,950
------------ ----------- ----------- -----------
Total Liabilities..... 2,940,446 42,815 32,530 1,857,698
------------ ----------- ----------- -----------
NET ASSETS:
Capital................. 152,835,520 27,535,547 25,006,372 66,385,781
Undistributed net
investment income...... 49,694 -- -- 22,307
Accumulated
undistributed net
realized gains (losses)
from investment
transactions........... (4,333,195) (3,909,467) (98,819) 3,353,377
Unrealized appreciation
(depreciation) from
investments............ 29,273,377 601,368 (206,145) 5,825,608
------------ ----------- ----------- -----------
Net Assets............ $177,825,396 $24,227,448 $24,701,408 $75,587,073
============ =========== =========== ===========
Net Assets
Retail Class........... $ 5,260,653 $ 979,045 $ 1,155,979 $ 1,159,979
Institutional Class.... 172,564,743 23,248,403 23,545,429 74,427,094
------------ ----------- ----------- -----------
Total................. $177,825,396 $24,227,448 $24,701,408 $75,587,073
============ =========== =========== ===========
Outstanding units of
beneficial interest
(shares)
Retail Class........... 442,493 107,197 122,898 94,173
Institutional Class.... 14,508,629 2,543,733 2,498,684 6,043,467
------------ ----------- ----------- -----------
Total................. 14,951,122 2,650,930 2,621,582 6,137,640
============ =========== =========== ===========
Net Asset Value
Retail Class--redemp-
tion price per share.. $ 11.89 $ 9.13 $ 9.41 $ 12.32
============ =========== =========== ===========
Retail Class--maximum
sales charge.......... 4.00% 4.00% 2.25% 4.00%
------------ ----------- ----------- -----------
Retail Class--maximum
offering price per
share (100%/(100%--
maximum sales charge)
of net asset value
adjusted to nearest
cent)...... $ 12.39 $ 9.51 $ 9.63 $ 12.83
============ =========== =========== ===========
Institutional Class--
offering and redemp-
tion price per share.. $ 11.89 $ 9.14 $ 9.42 $ 12.32
============ =========== =========== ===========
</TABLE>
See notes to financial statements.
21
<PAGE>
PACIFIC CAPITAL FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
JULY 31, 1996
<TABLE>
<CAPTION>
TAX-FREE
DIVERSIFIED TAX-FREE SHORT INTERMEDIATE
FIXED INCOME SECURITIES SECURITIES NEW ASIA
FUND FUND FUND GROWTH FUND
------------ ------------ ------------------ -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value
(Cost $162,770,301;
$274,682,887;
$38,846,656; and
$9,467,465
respectively).......... $159,036,837 $286,298,801 $39,138,168 $ 9,029,235
Cash.................... -- -- -- 1,316,661
Foreign currency (Cost
$52,561)............... -- -- -- 52,561
Interest and dividends
receivable............. 3,297,828 3,556,991 505,359 10,451
Receivable for capital
shares issued.......... 2,651 -- -- 37,143
Receivable from brokers
for investments sold... 728,000 -- 2,395,696 54,722
Receivable from invest-
ment adviser........... -- -- -- 17,930
Prepaid expenses and
other assets........... 63 487 21 12,728
------------ ------------ ----------- -----------
Total Assets.......... 163,065,379 289,856,279 42,039,244 10,531,431
------------ ------------ ----------- -----------
LIABILITIES:
Dividends payable....... 50,682 77,168 8,280 --
Payable to brokers for
investments purchased.. -- -- 2,042,120 52,561
Payable for forward for-
eign currency con-
tracts................. -- -- -- 308
Accrued expenses and
other payables:
Investment advisory
fees.................. 82,569 146,386 16,839 --
Administration fees.... 22,019 39,036 5,052 1,389
Distribution fees--Re-
tail Class............ 226 128 95 433
Fund accounting and
transfer agent fees... 9,025 15,089 6,325 4,313
Other.................. 66,634 75,808 37,392 14,024
------------ ------------ ----------- -----------
Total Liabilities..... 231,155 353,615 2,116,103 73,028
------------ ------------ ----------- -----------
NET ASSETS:
Capital................. 165,226,478 276,300,982 39,648,587 10,778,400
Undistributed (distribu-
tion in excess of) net
investment income...... -- -- -- (25,243)
Accumulated
undistributed net
realized gains (losses)
from investment
transactions........... 1,341,210 1,585,768 (16,958) 187,744
Accumulated net realized
losses from foreign
currency transactions.. -- -- -- (44,379)
Unrealized appreciation
(depreciation) from
investments............ (3,733,464) 11,615,914 291,512 (438,381)
Unrealized appreciation
from translation of
assets and liabilities
in foreign currency.... -- -- -- 262
------------ ------------ ----------- -----------
Net Assets............ $162,834,224 $289,502,664 $39,923,141 $10,458,403
============ ============ =========== ===========
Net Assets
Retail Class........... $ 1,092,537 $ 568,866 $ 451,202 $ 1,989,666
Institutional Class.... 161,741,687 288,933,798 39,471,939 8,468,737
------------ ------------ ----------- -----------
Total................. $162,834,224 $289,502,664 $39,923,141 $10,458,403
============ ============ =========== ===========
Outstanding units of
beneficial interest
(shares)
Retail Class........... 104,506 54,465 44,881 179,099
Institutional Class.... 15,364,087 27,610,200 3,915,452 760,450
------------ ------------ ----------- -----------
Total................. 15,468,593 27,664,665 3,960,333 939,459
============ ============ =========== ===========
Net Asset Value
Retail Class--redemp-
tion price per share.. $ 10.45 $ 10.44 $ 10.05 $ 11.11
============ ============ =========== ===========
Retail Class--maximum
sales charge.......... 4.00% 4.00% 2.25% 5.25%
------------ ------------ ----------- -----------
Retail Class--maximum
offering price per
share (100%/(100%--
maximum sales charge)
of net asset value
adjusted to nearest
cent)................. $ 10.89 $ 10.88 $ 10.28 $ 11.73
============ ============ =========== ===========
Institutional Class--
offering and redemp-
tion price per share.. $ 10.53 $ 10.46 $ 10.08 $ 11.14
============ ============ =========== ===========
</TABLE>
See notes to financial statements.
22
<PAGE>
PACIFIC CAPITAL FUNDS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 1996
<TABLE>
<CAPTION>
SHORT INTERMEDIATE
U.S. TREASURY U.S. TREASURY GROWTH AND
GROWTH STOCK SECURITIES SECURITIES INCOME
FUND FUND FUND FUND
------------ ------------- ------------------ ----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income......... $ 563,003 $1,930,202 $ 1,230,870 $ 162,495
Dividend income......... 2,741,023 10,605 15,129 1,436,098
----------- ---------- ----------- ----------
Total Income.......... 3,304,026 1,940,807 1,245,999 1,598,593
----------- ---------- ----------- ----------
EXPENSES:
Investment advisory
fees................... 1,359,262 172,954 102,679 503,952
Administration fees..... 339,659 57,425 41,071 126,053
Distribution fees--Re-
tail Class............. 35,002 7,880 6,511 4,658
Custodian fees.......... 15,607 5,841 6,363 12,582
Accounting fees......... 53,199 9,579 7,486 21,384
Legal and audit fees.... 64,906 8,372 8,447 23,350
Organization costs...... 6,717 12,827 1,023 --
Trustees' fees and ex-
penses................. 14,826 1,260 1,809 5,643
Transfer agent fees..... 16,405 11,863 12,991 13,640
Registration and filing
fees................... 21,674 766 4,682 8,692
Printing costs.......... 20,088 1,974 1,982 8,856
Other................... 4,686 1,891 564 1,318
----------- ---------- ----------- ----------
Total expenses before
voluntary fee reduc-
tions................ 1,952,031 292,632 195,608 730,128
Expenses voluntarily
reduced.............. (92,335) (16,992) (55,692) (28,733)
----------- ---------- ----------- ----------
Net Expenses.......... 1,859,696 275,640 139,916 701,395
----------- ---------- ----------- ----------
Net Investment Income... 1,444,330 1,665,167 1,106,083 897,198
----------- ---------- ----------- ----------
REALIZED/UNREALIZED
GAINS (LOSSES) FROM
INVESTMENTS:
Net realized gains
(losses) from invest-
ment transactions...... 2,853,413 610,897 (66,180) 4,517,339
Net change in unrealized
appreciation
(depreciation)
from investments....... 9,013,715 (980,793) (370,513) 1,140,677
----------- ---------- ----------- ----------
Net realized/unrealized
gains (losses) from in-
vestments.............. 11,867,128 (369,896) (436,693) 5,658,016
----------- ---------- ----------- ----------
Change in net assets re-
sulting from opera-
tions.................. $13,311,458 $1,295,271 $ 669,390 $6,555,214
=========== ========== =========== ==========
</TABLE>
See notes to financial statements.
23
<PAGE>
PACIFIC CAPITAL FUNDS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 1996
<TABLE>
<CAPTION>
TAX-FREE
DIVERSIFIED TAX-FREE SHORT INTERMEDIATE NEW ASIA
FIXED INCOME SECURITIES SECURITIES GROWTH
FUND FUND FUND FUND
------------ ----------- ------------------ ---------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income......... $8,655,304 $16,628,597 $1,902,245 $ --
Dividend income......... 111,905 44,333 10,960 120,313
Foreign tax withholding. -- -- -- (5,420)
---------- ----------- ---------- ---------
Total Income.......... 8,767,209 16,672,930 1,913,205 114,893
---------- ----------- ---------- ---------
EXPENSES:
Investment advisory
fees................... 814,802 1,724,513 202,701 52,972
Administration fees..... 271,954 574,229 80,987 11,772
Distribution fees--
Retail Class........... 4,367 6,100 2,609 8,046
Custodian fees.......... 11,411 19,709 6,495 38,321
Accounting fees......... 45,603 106,514 18,454 1,761
Legal and audit fees.... 52,263 112,998 15,819 4,681
Organization costs...... -- -- -- 23,424
Trustees' fees and
expenses............... 13,731 22,959 3,790 594
Transfer agent fees..... 16,051 18,669 12,951 15,738
Registration and filing
fees................... 11,969 56,423 8,718 1,682
Printing costs.......... 16,800 28,424 4,177 15,884
Other................... 2,040 9,376 1,297 366
---------- ----------- ---------- ---------
Total expenses before
voluntary fee
reductions and
reimbursements........ 1,260,991 2,679,914 357,998 175,241
Expenses voluntarily
reduced............... (58,083) (120,799) (21,916) (8,337)
Expenses reimbursed.... -- -- -- (47,974)
---------- ----------- ---------- ---------
Net Expenses.......... 1,202,908 2,559,115 336,082 118,930
---------- ----------- ---------- ---------
Net Investment Income
(Loss)................. 7,564,301 14,113,815 1,577,123 (4,037)
---------- ----------- ---------- ---------
REALIZED/UNREALIZED
GAINS (LOSSES) FROM
INVESTMENTS AND FOREIGN
CURRENCIES:
Net realized gains from
investment
transactions........... 1,793,439 2,578,744 247,802 187,718
Net realized losses from
foreign currency
transactions........... -- -- -- (55,916)
Net change in unrealized
depreciation from
investments............ (6,350,290) (505,505) (381,865) (603,577)
Net change in unrealized
appreciation from
translation of assets
and liabilities in
foreign currencies..... -- -- -- 3,412
---------- ----------- ---------- ---------
Net realized/unrealized
gains (losses) from
investments and foreign
currencies............. (4,556,851) 2,073,239 (134,063) (468,363)
---------- ----------- ---------- ---------
Change in net assets
resulting from
operations............. $3,007,450 $16,187,054 $1,443,060 $(472,400)
========== =========== ========== =========
</TABLE>
See notes to financial statements.
24
<PAGE>
PACIFIC CAPITAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SHORT INTERMEDIATE
U.S. TREASURY U.S. TREASURY
GROWTH STOCK FUND SECURITIES FUND SECURITIES FUND
-------------------------- -------------------------- --------------------------
FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
JULY 31, JULY 31, JULY 31, JULY 31, JULY 31, JULY 31,
1996 1995 1996 1995 1996 1995
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income.. $ 1,444,330 $ 1,414,887 $ 1,665,167 $ 3,360,178 $ 1,106,083 $ 739,009
Net realized gains
(losses) from
investment
transactions.......... 2,853,413 2,291,705 610,897 (4,219,260) (66,180) 5,148
Net change in
unrealized
appreciation
(depreciation) from
investments........... 9,013,715 20,099,233 (980,793) 6,833,930 (370,513) 344,160
------------ ------------ ------------ ------------ ----------- -----------
Change in net assets
resulting from
operations............. 13,311,458 23,805,825 1,295,271 5,974,848 669,390 1,088,317
------------ ------------ ------------ ------------ ----------- -----------
DISTRIBUTIONS TO RETAIL
CLASS SHAREHOLDERS:
From net investment
income (a)............ -- (135,165)(b) -- (786,481)(b) -- (40,812)(b)
From net investment
income (a)............ -- (29,334)(c) -- (40,655)(c) -- (19,044)(c)
From net investment
income................ (26,967) -- (58,924) -- (44,406) --
In excess of net
investment income..... -- -- (9,639) -- (3,140) --
From net realized
gains................. (73,928) -- -- -- -- --
In excess of net
realized gains........ (168,943) -- -- -- (2,008) --
DISTRIBUTIONS TO
INSTITUTIONAL CLASS
SHAREHOLDERS:
From net investment
income (a)............ -- (1,224,225)(c) (2,520,822)(c) -- (613,328)(c)
From net investment
income................ (1,401,180) -- (1,606,243) -- (1,061,677) --
In excess of net
investment income..... -- -- (262,742) -- (75,078) --
From net realized
gains................. (2,779,485) -- -- -- -- --
In excess of net
realized gains........ (6,351,795) -- -- -- (35,758) --
------------ ------------ ------------ ------------ ----------- -----------
Change in net assets
from shareholder
distributions.......... (10,802,298) (1,388,724) (1,937,548) (3,347,958) (1,222,067) (673,184)
------------ ------------ ------------ ------------ ----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued................ 133,828,085 82,513,604 1,647,781 2,718,467 18,121,546 16,852,167
Dividends reinvested... 6,438,745 713,011 1,902,174 3,339,073 158,516 190,790
Cost of shares
redeemed.............. (105,692,774) (21,022,651) (30,979,541) (16,510,086) (9,729,562) (4,173,175)
------------ ------------ ------------ ------------ ----------- -----------
Change in net assets
from share
transactions........... 34,574,056 62,203,964 (27,429,586) (10,452,546) 8,550,500 12,869,782
------------ ------------ ------------ ------------ ----------- -----------
Change in net assets.... 37,083,216 84,621,066 (28,071,863) (7,825,656) 7,997,823 13,284,915
NET ASSETS:
Beginning of period.... 140,742,180 56,121,115 52,299,311 60,124,967 16,703,585 3,418,670
------------ ------------ ------------ ------------ ----------- -----------
End of period.......... $177,825,396 $140,742,180 $ 24,227,448 $ 52,299,311 $24,701,408 $16,703,585
============ ============ ============ ============ =========== ===========
SHARE TRANSACTIONS:
Issued................. 11,098,985 8,237,688 173,866 307,618 1,882,513 1,803,713
Reinvested............. 541,450 68,923 200,813 375,250 16,520 20,407
Redeemed............... (8,707,702) (1,998,212) (3,272,020) (1,785,560) (1,016,011) (444,724)
------------ ------------ ------------ ------------ ----------- -----------
Change in shares........ 2,932,733 6,308,399 (2,897,341) (1,102,692) 883,022 1,379,396
============ ============ ============ ============ =========== ===========
</TABLE>
- ------
(a) On October 13, 1994, the Trust identified those Institutional shareholders
that were part of the Retail class and transferred these shareholders into
the Institutional class effective October 14, 1994.
(b) For the period August 1, 1994 through October 13, 1994.
(c) For the period October 14, 1994 through July 31, 1995.
See notes to financial statements.
25
<PAGE>
PACIFIC CAPITAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
DIVERSIFIED FIXED
GROWTH AND INCOME FUND INCOME FUND TAX-FREE SECURITIES FUND
------------------------- -------------------------- --------------------------
FOR THE YEAR OCTOBER 14, OCTOBER 14, FOR THE YEAR OCTOBER 14,
ENDED 1994 TO FOR THE YEAR 1994 TO ENDED 1994 TO
JULY 31, JULY 31, ENDED JULY 31, JULY 31, JULY 31,
1996 1995 (A) JULY 31, 1996 1995 (A) 1996 1995 (A)
------------ ----------- ------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
FROM INVESTMENT
ACTIVITIES:
OPERATIONS:
Net investment income.. $ 897,198 $ 676,590 $ 7,564,301 $ 2,357,474 $ 14,113,815 $ 10,774,359
Net realized gains from
investment
transactions.......... 4,517,339 276,982 1,793,439 741,453 2,578,744 2,569,877
Net change in
unrealized
appreciation
(depreciation) from
investments........... 1,140,677 4,684,931 (6,350,290) 2,616,826 (505,505) 12,121,419
------------ ----------- ------------ ----------- ------------ ------------
Change in net assets
resulting from
operations............. 6,555,214 5,638,503 3,007,450 5,715,753 16,187,054 25,465,655
------------ ----------- ------------ ----------- ------------ ------------
DISTRIBUTIONS TO RETAIL
CLASS SHAREHOLDERS:
From net investment
income................ (6,661) (2,751) (29,853) (454) (36,401) (18,362)
In excess of net
investment income..... (198) -- (1,073) -- (3,016) --
From net realized
gains................. (10,087) -- -- -- (5,488) --
In excess of net
realized gains........ -- -- (5,216) -- (2,095) --
DISTRIBUTIONS TO
INSTITUTIONAL CLASS
SHAREHOLDERS:
From net investment
income................ (890,537) (624,885) (7,534,448) (2,085,093) (14,077,414) (9,586,530)
In excess of net
investment income..... (26,449) -- (270,854) -- (1,166,451) --
From net realized
gains................. (1,430,857) -- -- -- (2,573,256) --
In excess of net
realized gains........ -- -- (1,188,466) -- (982,014) --
------------ ----------- ------------ ----------- ------------ ------------
Change in net assets
from shareholder
distributions.......... (2,364,789) (627,636) (9,029,910) (2,085,547) (18,846,135) (9,604,892)
------------ ----------- ------------ ----------- ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued................ 51,831,280 40,974,709 199,818,303 56,868,583 29,212,660 293,909,646
Dividends reinvested... 1,252,724 3,296 891,166 2,354 3,570,050 16,515
Cost of shares
redeemed.............. (23,786,655) (3,889,573) (86,706,905) (5,647,023) (22,829,691) (27,578,198)
------------ ----------- ------------ ----------- ------------ ------------
Change in net assets
from share
transactions........... 29,297,349 37,088,432 114,002,564 51,223,914 9,953,019 266,347,963
------------ ----------- ------------ ----------- ------------ ------------
Change in net assets.... 33,487,774 42,099,299 107,980,104 54,854,120 7,293,938 282,208,726
NET ASSETS:
Beginning of period.... 42,099,299 -- 54,854,120 -- 282,208,726 --
------------ ----------- ------------ ----------- ------------ ------------
End of period.......... $ 75,587,073 $42,099,299 $162,834,224 $54,854,120 $289,502,664 $282,208,726
============ =========== ============ =========== ============ ============
SHARE TRANSACTIONS:
Issued................. 4,307,112 4,055,447 18,193,814 5,603,737 2,767,223 29,476,881
Reinvested............. 105,986 312 80,018 219 333,366 1,626
Redeemed............... (1,958,541) (372,676) (7,867,181) (542,014) (2,160,738) (2,753,693)
------------ ----------- ------------ ----------- ------------ ------------
Change in shares........ 2,454,557 3,683,083 10,406,651 5,061,942 939,851 26,724,814
============ =========== ============ =========== ============ ============
</TABLE>
- ------
(a) Period from commencement of operations.
See notes to financial statements.
26
<PAGE>
PACIFIC CAPITAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
TAX-FREE SHORT
INTERMEDIATE SECURITIES
FUND NEW ASIA GROWTH FUND
------------------------- --------------------------
FOR THE YEAR OCTOBER 14, FOR THE YEAR FEBRUARY 15,
ENDED 1994 TO ENDED 1995 TO
JULY 31, JULY 31, JULY 31, JULY 31,
1996 1995(A) 1996 1995(A)
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income
(loss)................... $ 1,577,123 $ 1,220,408 $ (4,037) $ 10,915
Net realized gains
(losses) from investment
transactions............. 247,802 (264,760) 187,718 78,817
Net realized losses from
foreign currency
transactions............. -- -- (55,916) (11,617)
Net change in unrealized
appreciation
(depreciation) from
investments.............. (381,865) 673,377 (603,577) 165,196
Net change in unrealized
appreciation
(depreciation) from
translation
of assets and liabilities
in foreign currencies.... -- -- 3,412 (3,150)
----------- ----------- ----------- ----------
Change in net assets
resulting from operations. 1,443,060 1,629,025 (472,400) 240,161
----------- ----------- ----------- ----------
DISTRIBUTIONS TO RETAIL
CLASS SHAREHOLDERS:
From net investment
income................... (12,490) (2,044) -- --
In excess of net
investment income........ (1,065) -- (1,121) --
From net realized gains... -- -- (15,201) --
DISTRIBUTIONS TO
INSTITUTIONAL CLASS
SHAREHOLDERS:
From net investment
income................... (1,564,633) (1,083,945) -- --
In excess of net
investment income........ (133,354) -- (7,846) --
From net realized gains... -- -- (63,590) --
----------- ----------- ----------- ----------
Change in net assets from
shareholder distributions. (1,711,542) (1,085,989) (87,758) --
----------- ----------- ----------- ----------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued................... 7,865,169 46,135,652 10,749,362 2,962,039
Dividends reinvested...... 9,183 755 59,730 --
Cost of shares redeemed... (7,982,805) (6,379,367) (2,981,295) (11,436)
----------- ----------- ----------- ----------
Change in net assets from
share transactions........ (108,453) 39,757,040 7,827,797 2,950,603
----------- ----------- ----------- ----------
Change in net assets....... (376,935) 40,300,076 7,267,639 3,190,764
NET ASSETS:
Beginning of period....... 40,300,076 -- 3,190,764 --
----------- ----------- ----------- ----------
End of period............. $39,923,141 $40,300,076 $10,458,403 $3,190,764
=========== =========== =========== ==========
SHARE TRANSACTIONS:
Issued.................... 773,603 4,615,684 910,887 285,421
Reinvested................ 907 76 5,614 --
Redeemed.................. (788,553) (641,384) (261,382) (1,081)
----------- ----------- ----------- ----------
Change in shares........... (14,043) 3,974,376 655,119 284,340
=========== =========== =========== ==========
</TABLE>
- ------
(a) Period from commencement of operations.
See notes to financial statements.
27
<PAGE>
PACIFIC CAPITAL FUNDS
GROWTH STOCK FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JULY 31, 1996
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ----------------------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS (90.1%):
Banks (0.7%):
15,000 BankAmerica Corp..................................... $ 1,196,250
------------
Beverages (5.9%):
138,000 Coca-Cola Co......................................... 6,468,750
125,800 PepsiCo, Inc......................................... 3,978,425
------------
10,447,175
------------
Chemicals (1.7%):
29,000 Avery Dennison Corp.................................. 1,500,750
111,000 Crompton & Knowles................................... 1,665,000
------------
3,165,750
------------
Computers & Peripherals (5.1%):
54,500 Cabletron Systems (b)................................ 3,120,125
25,000 Cisco Systems (b).................................... 1,293,750
26,000 Compaq Computer Corp. (b)............................ 1,423,500
73,400 Hewlett Packard Co................................... 3,229,600
------------
9,066,975
------------
Electrical Equipment (4.3%):
81,800 General Electric Co.................................. 6,738,275
23,825 SCI Systems Inc. (b)................................. 830,897
------------
7,569,172
------------
Electronic & Electrical (1.7%):
77,700 AMP, Inc............................................. 3,001,162
------------
Entertainment (1.1%):
36,000 Walt Disney Co....................................... 2,002,500
------------
Financial Services (1.3%):
59,000 Automatic Data Processing, Inc....................... 2,337,875
------------
Food Distributors (4.0%):
96,000 Albertsons, Inc...................................... 3,936,000
110,000 Sysco Corp........................................... 3,190,000
------------
7,126,000
------------
Food Processing & Packaging (7.8%):
88,300 ConAgra, Inc......................................... 3,752,750
82,500 Pioneer Hi-Bred International, Inc................... 4,434,375
133,050 Sara Lee Corp........................................ 4,257,600
28,000 Wm. Wrigley Jr. Co................................... 1,445,500
------------
13,890,225
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ----------------------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Funeral Services (1.9%):
62,000 Service Corp. International.......................... $ 3,417,750
------------
Health Care (1.9%):
66,250 Columbia HCA Healthcare.............................. 3,395,313
------------
Insurance (2.5%):
48,000 American International Group, Inc.................... 4,518,000
------------
Manufacturing (1.9%):
28,000 Illinois Tool Works, Inc............................. 1,802,500
24,400 Minnesota Mining &
Manufacturing Co.................................... 1,586,000
------------
3,388,500
------------
Medical Supplies (3.2%):
181,000 Biomet, Inc. (b)..................................... 2,782,875
60,000 Medtronic, Inc....................................... 2,842,500
------------
5,625,375
------------
Metal & Mineral Production (1.2%):
75,000 Barrick Gold Corp.................................... 2,090,625
------------
Oil & Gas Exploration (1.6%):
25,000 Mobil Corp........................................... 2,759,375
------------
Oilfield Equipment & Services (0.4%):
10,000 Schlumberger Ltd..................................... 800,000
------------
Paint, Varnishes, Enamels (1.7%):
65,000 Sherwin Williams Co.................................. 2,941,250
------------
Pharmaceuticals (14.4%):
102,625 Abbott Laboratories.................................. 4,515,500
34,000 American Home Products Corp.......................... 1,929,500
61,200 Eli Lilly & Co....................................... 3,427,200
100,018 Johnson & Johnson, Inc............................... 4,775,860
65,000 Merck & Co., Inc..................................... 4,176,250
51,000 Pfizer, Inc.......................................... 3,563,625
81,000 Pharmacia & Upjohn, Inc.............................. 3,341,250
------------
25,729,185
------------
Publishing (1.6%):
67,000 Readers Digest....................................... 2,772,125
------------
Restaurants (1.2%):
46,900 McDonald's Corp...................................... 2,174,987
------------
</TABLE>
Continued
28
<PAGE>
PACIFIC CAPITAL FUNDS
GROWTH STOCK FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JULY 31, 1996
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ----------------------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Retail (3.1%):
50,000 Dollar General Corp.................................. $ 1,293,750
62,550 Kohl's Corp. (b)..................................... 1,962,506
96,000 Wal-Mart Stores, Inc................................. 2,304,000
------------
5,560,256
------------
Semiconductors (2.3%):
53,900 Intel Corp........................................... 4,049,238
------------
Soaps & Cleaning Agents (2.9%):
57,300 Procter & Gamble Co.................................. 5,121,187
------------
Software & Computer Services (3.6%):
20,250 Computer Associates
International, Inc.................................. 1,030,219
38,000 Microsoft (b)........................................ 4,479,250
24,000 Oracle Systems Corp. (b)............................. 939,000
------------
6,448,469
------------
Steel (0.5%):
18,000 Nucor Corp........................................... 843,750
------------
Telecommunications (1.8%):
117,875 Alltel Corp.......................................... 3,226,828
------------
Tobacco & Tobacco Products (2.7%):
45,800 Philip Morris Cos., Inc.............................. 4,791,825
------------
Transportation--Air (1.4%):
97,000 Southwest Airlines Co................................ 2,400,750
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------ ------------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Utilities--Telecommunications (4.7%):
54,425 Century Telephone Enterprises Inc..................... $ 1,734,797
5,050 Frontier Corp......................................... 142,031
50,000 GTE Corp.............................................. 2,062,500
92,150 SBC Communications.................................... 4,503,831
------------
8,443,159
------------
Total Common Stocks 160,301,031
------------
U.S. GOVERNMENT AGENCIES (2.8%):
Federal National Mortgage Assoc.:
5,000,000 5.23%, 8/23/96........................................ 4,983,293
------------
Total U.S. Government Agencies 4,983,293
------------
U.S. Treasury Bills (2.2%):
4,000,000 5.14%, 8/15/96........................................ 3,991,708
------------
Total U.S. Treasury Bills 3,991,708
------------
Investment Companies (5.4%):
4,583,551 Banc One Prime Money Market, Fiduciary Shares......... 4,583,551
79,000 S & P 500 Depository Receipt (b)...................... 5,060,938
------------
Total Investment Companies 9,644,489
------------
Total (Cost--$149,647,144) (a) $178,920,521
============
</TABLE>
- ------
Percentages are based on net assets of $177,825,396.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized apprecia-
tion................ $32,212,995
Unrealized deprecia-
tion................ (2,939,618)
-----------
Net unrealized appre-
ciation............. $29,273,377
===========
</TABLE>
(b) Non-income producing securities.
See notes to financial statements.
29
<PAGE>
PACIFIC CAPITAL FUNDS
U.S. TREASURY SECURITIES FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JULY 31, 1996
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- -------------------------------------------------------- -----------
<C> <S> <C>
U.S. TREASURY BILLS (6.1%):
1,500,000 5.11%, 9/19/96.......................................... $ 1,489,242
-----------
Total U.S. Treasury Bills 1,489,242
-----------
U.S. TREASURY BONDS (48.2%):
2,150,000 7.63%, 2/15/07.......................................... 2,224,605
6,800,000 7.25%, 5/15/16.......................................... 6,928,180
2,500,000 7.13%, 2/15/23.......................................... 2,513,250
-----------
Total U.S Treasury Bonds 11,666,035
-----------
U.S. TREASURY NOTES (41.9%):
3,000,000 7.13%, 2/29/00.......................................... 3,061,620
4,160,000 7.75%, 2/15/01.......................................... 4,356,352
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- -------------------------------------------------------- -----------
<C> <S> <C>
980,000 8.00%, 5/15/01.......................................... $ 1,037,869
1,000,000 7.50%, 2/15/05.......................................... 1,047,370
650,000 6.50%, 8/15/05.......................................... 638,241
-----------
Total U.S Treasury Notes 10,141,452
-----------
INVESTMENT COMPANIES (1.6%):
397,827 Bank One Treasury Money
Market, Fiduciary Shares............................... 397,827
-----------
Total Investment Companies 397,827
-----------
Total (Cost--$23,093,188) (a) $23,694,556
===========
</TABLE>
- ------
Percentages are based on net assets of $24,227,448.
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting purposes in excess of federal income tax reporting
of $55,550. Cost for federal income tax purposes differs from value by net
unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized apprecia-
tion.................. $735,323
Unrealized deprecia-
tion.................. (189,505)
--------
Net unrealized appreci-
ation................. $545,818
========
</TABLE>
See notes to financial statements.
30
<PAGE>
PACIFIC CAPITAL FUNDS
SHORT INTERMEDIATE U.S. TREASURY SECURITIES FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JULY 31, 1996
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
U.S. TREASURY NOTES (97.8%):
3,400,000 6.00%, 12/31/97........................................ $ 3,399,762
2,000,000 6.13%, 5/31/97......................................... 2,004,520
1,100,000 7.25%, 2/15/98......................................... 1,118,106
1,350,000 6.50%, 4/30/99......................................... 1,355,171
800,000 6.75%, 6/30/99......................................... 808,120
651,000 7.13%, 9/30/99......................................... 663,864
1,000,000 7.88%, 11/15/99........................................ 1,042,370
5,500,000 6.25%, 5/31/00......................................... 5,455,175
1,950,000 6.13%, 7/31/00......................................... 1,923,909
1,700,000 5.63%, 11/30/00........................................ 1,642,574
3,100,000 5.50%, 12/31/00........................................ 2,978,945
1,800,000 6.25%, 2/15/03......................................... 1,762,218
-----------
Total U.S. Treasury Notes 24,154,734
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------- -----------
<C> <S> <C>
INVESTMENT COMPANIES (1.2%):
289,508 Bank One Treasury
Money Market, Fiduciary Shares $ 289,508
-----------
Total Investment Companies 289,508
-----------
Total (Cost--$24,650,387) (a) $24,444,242
===========
</TABLE>
- ------
Percentages are based on net assets of $24,701,408.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized apprecia-
tion................. $ 111,841
Unrealized deprecia-
tion................. (317,986)
---------
Net unrealized appre-
ciation.............. $(206,145)
=========
</TABLE>
See notes to financial statements.
31
<PAGE>
PACIFIC CAPITAL FUNDS
GROWTH AND INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JULY 31, 1996
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS (95.8%):
Aerospace/Defense (2.4%):
7,306 Boeing Co.............................................. $ 646,581
22,400 Rockwell International Corp............................ 1,176,000
-----------
1,822,581
-----------
Automotive Parts (1.9%):
43,375 Echlin, Inc............................................ 1,447,641
-----------
Banking (4.6%):
21,560 Bank of Boston Corp.................................... 1,142,680
16,225 BankAmerica Corp....................................... 1,293,944
23,004 Wachovia Corp.......................................... 1,017,926
-----------
3,454,550
-----------
Beverages (2.4%):
24,000 Coca-Cola Co........................................... 1,125,000
23,108 PepsiCo, Inc........................................... 730,791
-----------
1,855,791
-----------
Chemicals (3.8%):
51,025 Crompton & Knowles..................................... 765,375
16,469 E.I. Du Pont De Nemours Co............................. 1,329,872
14,200 Sigma-Aldrich.......................................... 745,500
-----------
2,840,747
-----------
Computers & Peripherals (4.2%):
12,175 Cisco Systems (b)...................................... 630,056
28,738 Hewlett Packard Co..................................... 1,264,472
22,925 Sun Microsystems, Inc. (b)............................. 1,252,278
-----------
3,146,806
-----------
Containers--Metal, Glass, Paper, Plastic (1.0%):
23,150 Bemis, Inc............................................. 755,269
-----------
Electrical Equipment (5.1%):
30,675 DSC Communications Corp. (b)........................... 920,250
27,008 General Electric Co.................................... 2,224,783
21,000 SCI Systems, Inc. (b).................................. 732,375
-----------
3,877,408
-----------
Electronic & Electrical (1.3%):
24,609 AMP, Inc............................................... 950,523
-----------
Financial Services (3.6%):
46,137 MBNA Corp.............................................. 1,286,069
19,756 Student Loan Marketing Assoc........................... 1,442,188
-----------
2,728,257
-----------
</TABLE>
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Food Distributors (1.0%):
18,761 Albertsons, Inc........................................ $ 769,201
-----------
Food Processing & Packaging (3.0%):
18,450 Conagra, Inc........................................... 784,125
66,450 Hormel Foods Corp...................................... 1,495,125
-----------
2,279,250
-----------
Forest Products--Lumber, Paper (1.3%):
26,300 International Paper Co................................. 996,113
-----------
Funeral Services (1.2%):
16,825 Service Corp. International............................ 927,478
-----------
Health Care (1.4%):
20,950 Columbia HCA Healthcare................................ 1,073,688
-----------
Heavy Machinery--Industrial, Farm, Construction (2.2%):
29,850 Harnischfeger Industries, Inc.......................... 925,350
17,825 Ingersoll-Rand Co...................................... 759,791
-----------
1,685,141
-----------
Insurance (2.9%):
10,150 American International Group, Inc...................... 955,369
30,200 Travelers, Inc......................................... 1,275,950
-----------
2,231,319
-----------
Leisure--Recreation, Gaming (1.2%):
33,875 Carnival Corp. Cruise Lines............................ 910,391
-----------
Medical Supplies (0.9%):
14,825 Medtronic, Inc......................................... 702,334
-----------
Oil & Gas Exploration, Production, & Services (7.9%):
19,150 Amoco Corp............................................. 1,280,656
17,050 Exxon Corp............................................. 1,402,363
12,884 Mobil Corp............................................. 1,422,071
35,850 Phillips Petroleum Co.................................. 1,416,075
10,450 Williams Co., Inc...................................... 479,394
-----------
6,000,559
-----------
Oilfield Equipment & Services (1.0%):
9,104 Schlumberger Ltd....................................... 728,320
-----------
Paint, Varnishes, Enamels (1.0%):
16,450 Sherwin Williams Co.................................... 744,363
-----------
Pharmaceuticals (7.4%):
20,723 American Home Products Corp............................ 1,176,030
31,160 Johnson & Johnson, Inc................................. 1,487,890
20,650 Pfizer, Inc............................................ 1,442,919
</TABLE>
Continued
32
<PAGE>
PACIFIC CAPITAL FUNDS
GROWTH AND INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JULY 31, 1996
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Pharmaceuticals, continued:
35,475 Pharmacia & Upjohn, Inc................................ $ 1,463,343
-----------
5,570,182
-----------
Publishing, Except Newspaper (1.6%):
30,950 McGraw Hill, Inc....................................... 1,207,050
-----------
Restaurants (1.9%):
83,175 Wendy's International.................................. 1,413,975
-----------
Retail (4.0%):
26,675 Dollar General Corp.................................... 690,216
29,909 May Department Stores.................................. 1,342,165
31,775 Walgreen Co............................................ 1,008,856
-----------
3,041,237
-----------
Semiconductors (1.5%):
14,650 Intel Corp............................................. 1,100,581
-----------
Soaps & Cleaning Agents (1.8%):
15,100 Procter & Gamble Co.................................... 1,349,563
-----------
Software & Computer Services (3.3%):
13,280 Broderbund Software, Inc. (b).......................... 436,580
18,760 Computer Associates International, Inc................. 954,415
9,175 Microsoft Corp. (b).................................... 1,081,503
-----------
2,472,498
-----------
Steel (1.1%):
18,200 Nucor Corp............................................. 853,125
-----------
Tobacco & Tobacco Products (3.0%):
21,362 Philip Morris Cos., Inc................................ 2,234,999
-----------
</TABLE>
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Toys & Bicycles--Manufacturing (1.2%):
35,900 Mattel, Inc............................................ $ 888,525
-----------
Transportation (1.0%):
25,425 Illinois Central Corp.................................. 730,969
-----------
Transportation Leasing & Trucking (0.8%):
25,950 Comair Holdings, Inc................................... 629,288
-----------
Utilities--Electric (4.9%):
41,875 Illinova Corp.......................................... 1,078,281
76,275 Southern Co............................................ 1,725,722
33,239 Wisconsin Energy Corp.................................. 884,988
-----------
3,688,991
-----------
Utilities--Telecommunications (7.0%):
23,450 Century Telephone Enterprises, Inc..................... $747,469
49,900 Frontier Corp.......................................... 1,403,438
34,661 GTE Corp............................................... 1,429,766
35,150 SBC Communications..................................... 1,717,956
-----------
5,298,629
-----------
Total Common Stocks 72,407,342
-----------
INVESTMENT COMPANIES (5.0%):
1,948,006 Banc One Prime Money Market, Fiduciary Shares.......... 1,948,006
500,000 Parkstone Prime Money Market, Institutional Shares..... 500,000
21,100 S & P 500 Depository Receipt (b)....................... 1,351,719
-----------
Total Investment Companies 3,799,725
-----------
Total (Cost--$70,381,459) (a) $76,207,067
===========
</TABLE>
- ------
Percentages are based on net assets of $75,587,073.
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting purposes in excess of federal income tax reporting
of $52,014. Cost for federal income tax purposes differs from value by net
unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized apprecia-
tion................ $ 8,012,176
Unrealized deprecia-
tion................ (2,238,582)
-----------
Net unrealized appre-
ciation............. $ 5,773,594
===========
</TABLE>
(b) Non income producing securities.
See Notes to Financial Statements.
33
<PAGE>
PACIFIC CAPITAL FUNDS
DIVERSIFIED FIXED INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JULY 31, 1996
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ----------------------------------------------------- ------------
<C> <S> <C>
CORPORATE BONDS (42.5%):
Banking (0.9%):
1,600,000 Wachovia Corp., 6.38%, 2/1/09........................ $ 1,472,000
------------
Banking--Foreign (10.4%):
5,000,000 Abbey National PLC, 6.69%, 10/17/05.................. 4,787,500
5,000,000 Bayerische Landesbank-NY, 6.20%, 2/9/06.............. 4,662,500
5,000,000 Dresdner Bank-NY, 6.63%, 9/15/05..................... 4,768,750
700,000 Interamerican Development Bank, 8.50%, 3/15/11....... 779,625
2,000,000 Swiss Bank Corp., 6.75%, 7/15/05..................... 1,927,500
------------
16,925,875
------------
Electric Services (6.8%):
5,000,000 Con Edison-Ambac, 6.63%, 7/1/05...................... 4,793,750
1,500,000 Duke Power Co., 8.00%, 11/1/99....................... 1,558,125
1,500,000 National Rural Utility, 6.45%, 4/1/01................ 1,471,875
3,500,000 National Rural Utility, 5.95%, 1/15/03............... 3,285,625
------------
11,109,375
------------
Electrical & Electronic (2.9%):
5,000,000 Emerson Electric, 6.30%, 11/1/05..................... 4,706,250
------------
Financial Services (9.5%):
5,000,000 Associates Corp., 6.38%, 11/15/05.................... 4,675,000
500,000 General Electric Capital Corp., 8.10%, 1/26/99....... 517,500
1,000,000 General Electric Capital Corp., 6.88%, 4/15/00....... 1,005,000
5,000,000 General Electric Capital Corp., 7.88%, 12/1/06....... 5,237,500
4,000,000 Norwest Financial Inc., 7.50%, 4/15/05............... 4,060,000
------------
15,495,000
------------
Health Care (2.2%):
3,300,000 Johnson & Johnson, 8.72%, 11/1/24.................... 3,543,375
------------
Industrial Goods & Services (0.2%):
350,000 Societe Nationale Elf Aquitaine, 8.00%, 10/15/01..... 367,063
------------
Insurance (1.7%):
350,000 MBIA Inc., 8.20%, 10/1/22............................ 372,313
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ----------------------------------------------------- ------------
<C> <S> <C>
CORPORATE BONDS, CONTINUED:
Insurance, continued:
1,500,000 MBIA Inc., 7.00%, 12/15/25........................... $ 1,378,125
1,000,000 St. Paul Cos., 7.29%, 8/28/07........................ 982,500
------------
2,732,938
------------
Investment Companies (0.4%):
700,000 Merrill Lynch & Co. Inc., 7.00%, 4/27/08............. 673,750
------------
Oil & Gas Exploration & Production Services (1.9%):
1,050,000 Amoco Canada, 7.95%, 10/1/22......................... 1,061,812
2,000,000 Shell Oil Co., 6.70%, 8/15/02........................ 1,982,500
------------
3,044,312
------------
Restaurants (2.9%):
5,000,000 McDonald's Corp., 6.63%, 9/1/05...................... 4,800,000
------------
Retail Stores (0.9%):
1,400,000 Wal-Mart Stores, 8.00%, 9/15/06...................... 1,477,000
------------
Telecommunications (1.8%):
650,000 BellSouth Telecommunications, 6.25%, 5/15/03......... 628,063
795,000 BellSouth Telecommunications, 7.00%, 2/1/05.......... 789,037
1,500,000 New England Telephone & Telegraph, 6.25%, 3/15/03.... 1,438,125
------------
2,855,225
------------
Total Corporate Bonds 69,202,163
------------
U.S. GOVERNMENT AGENCIES (10.5%):
Agency for International Development:
3,000,000 Israel, 6.05%, 8/15/00............................... 2,921,250
Federal Home Loan Mortgage Corp.:
3,000,000 7.35%, 5/16/05....................................... 2,978,460
1,000,000 7.23%, 5/17/05....................................... 984,870
Federal National Mortgage Assoc.:
3,000,000 Discount, 8/5/96..................................... 2,997,825
3,000,000 7.90%, 4/10/02....................................... 3,014,220
1,400,000 7.40%, 7/1/04........................................ 1,427,510
2,000,000 7.25%, 3/21/11....................................... 1,959,220
Tennessee Valley Authority:
750,000 8.63%, 11/15/29...................................... 797,812
------------
Total U.S. Government Agencies 17,081,167
------------
</TABLE>
Continued
34
<PAGE>
PACIFIC CAPITAL FUNDS
DIVERSIFIED FIXED INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JULY 31, 1996
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ----------------------------------------------------- ------------
<C> <S> <C>
U.S. TREASURY BONDS (9.4%):
15,000,000 7.25%, 5/15/16....................................... $ 15,282,750
------------
Total U.S. Treasury Bonds 15,282,750
------------
U.S. TREASURY NOTES (35.2%):
15,000,000 5.88%, 8/15/98....................................... 14,904,600
9,500,000 6.75%, 4/30/00....................................... 9,582,745
13,500,000 6.25%, 2/15/03....................................... 13,216,635
7,500,000 7.25%, 8/15/04....................................... 7,738,725
12,000,000 6.50%, 5/15/05....................................... 11,794,080
------------
Total U.S. Treasury Notes 57,236,785
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ----------------------------------------------------- ------------
<C> <S> <C>
INVESTMENT COMPANIES (0.1%):
233,972 Banc One Prime Money Market, Fiduciary Shares........ $ 233,972
------------
Total Investment Companies 233,972
------------
Total (Cost--$162,770,301) (a) $159,036,837
============
</TABLE>
- ------
Percentages are based on net assets of $162,834,224.
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting purposes in excess of federal income tax reporting
of $11,085. Cost for federal income tax purposes differs from value by net
unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized apprecia-
tion............... $780,368
Unrealized deprecia-
tion............... (4,524,917)
-----------
Net unrealized de-
preciation......... $(3,744,549)
===========
</TABLE>
PLC Public Limited Company
See Notes to Financial Statements.
35
<PAGE>
PACIFIC CAPITAL FUNDS
TAX-FREE SECURITIES FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JULY 31, 1996
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ---------------------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS (79.0%):
California (4.8%):
1,500,000 Metropolitan Water District, 5.00%, 7/1/15, MBIA.... $ 1,376,250
3,000,000 Metropolitan Water District, Southern California,
5.75%, 7/1/21, MBIA................................ 2,985,000
2,565,000 Northern California Transmission, Oregon
Transmission Project, Series A, 7.00%, 5/1/13,
MBIA............................................... 2,968,988
1,735,000 San Francisco, Bay Area Rapid Transit, District
Sales Tax Revenue, 5.50%, 7/1/15, FGIC............. 1,695,962
5,000,000 State Department Water, Series P, 6.00%, 12/1/20,
FGIC............................................... 5,043,750
------------
14,069,950
------------
Colorado (0.3%):
1,000,000 Adams & Arapaho County, 5.35%, 12/1/15, FGIC........ 953,750
------------
Connecticut (0.3%):
1,000,000 Connecticut State, Special Tax Obligation Revenue,
6.25%, 10/1/14, FGIC............................... 1,041,250
------------
Florida (7.4%):
1,000,000 Dade County, Water & Sewer, 5.50%, 10/1/15, FGIC.... 976,250
3,000,000 Florida State, Board of Education, Series A, 5.50%,
6/1/17............................................. 2,910,000
2,205,000 Florida State, Board of Education, Series E, 5.75%,
6/1/19............................................. 2,191,219
2,000,000 Florida State, Bond Finance Department, General
Services Environmental Revenue, 5.75%, 7/1/13,
AMBAC.............................................. 2,012,500
2,000,000 Florida State, General Services Division, Facilities
Management Revenue, Series B, 5.70%, 9/1/20, AMBAC. 1,980,000
3,500,000 Florida State, Turnpike Authority Revenue,
Department of Transportation, 5.50%, 7/1/17, FGIC.. 3,421,250
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ---------------------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Florida, continued:
2,000,000 Florida State, Turnpike Revenue, Department of
Transportation, 5.50%, 7/1/21, FGIC................ $ 1,937,500
2,875,000 Orange County, Public Tax Service, 6.00%, 10/1/24,
FGIC............................................... 2,932,500
2,565,000 Orlando, Utilities Community Water & Electric
Revenue Refunding, Series D, 6.75%, 10/1/17........ 2,949,750
------------
21,310,969
------------
Georgia (2.9%):
1,285,000 Georgia State, Municipal Electric Authority Revenue,
Series B, 6.13%, 1/1/14, FGIC...................... 1,325,156
1,605,000 Metropolitan Atlanta, Rapid Transportation
Authority, Sales Tax Revenue, Series P, 6.25%,
7/1/11, AMBAC...................................... 1,739,419
4,690,000 Municipal Electric Authority, Third Crossover,
6.60%, 1/1/18, MBIA................................ 5,194,175
------------
8,258,750
------------
Hawaii (38.3%):
5,000,000 Hawaii, GO, 6.05%, 1/1/08, FGIC..................... 5,206,250
640,000 Hawaii, GO, 5.50%, 6/1/08, FGIC..................... 643,200
1,345,000 Hawaii, GO, Series BT, 6.38%, 2/1/09, Pre-refunded
on 2/1/01 @ 101.................................... 1,450,919
640,000 Hawaii, GO, 5.50%, 6/1/09, FGIC..................... 640,800
1,035,000 Hawaii, GO, 5.00%, 7/1/09, FGIC..................... 984,544
2,000,000 Hawaii, GO, 6.00%, 10/1/09, FGIC.................... 2,125,000
4,490,000 Hawaii, GO, 6.13%, 2/1/10, Pre-refunded on 2/1/01 @
101................................................ 4,793,075
640,000 Hawaii, GO, Series CE, 5.50%, 6/1/10, FGIC.......... 638,400
4,000,000 Hawaii, GO, Series CK, 5.25%, 9/1/10, FGIC.......... 3,890,000
3,145,000 Hawaii, GO, 5.25%, 6/1/13, FGIC..................... 3,015,268
1,000,000 Hawaii, GO, Series CL, 5.25%, 3/1/16, FGIC.......... 943,750
1,315,000 Hawaii County, GO, 4.50%, 2/1/03.................... 1,287,056
1,375,000 Hawaii County, GO, Series A, 4.50%, 2/1/04, FGIC.... 1,330,313
</TABLE>
Continued
36
<PAGE>
PACIFIC CAPITAL FUNDS
TAX-FREE SECURITIES FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JULY 31, 1996
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ------------------------------------------------------ ------------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Hawaii, continued:
1,810,000 Hawaii County, GO, Series A, 5.00%, 2/1/10, FGIC...... $ 1,710,450
1,305,000 Hawaii County, GO, Series A, 7.30%, 6/1/10, Pre-
refunded on 6/1/00 @ 101............................. 1,443,655
2,095,000 Hawaii County, GO, Series A, 5.10%, 2/1/13............ 1,966,681
415,000 Hawaii County, GO, Series A, 5.60%, 5/1/13, FGIC...... 416,038
2,320,000 Hawaii County, GO, 5.20%, 2/1/15...................... 2,180,800
1,455,000 Hawaii Department Budget & Finance, Queens Health
System, 5.88%, 7/1/11................................ 1,458,638
1,745,000 Hawaii Department Budget & Finance, Queens Health
System, 6.05%, 7/1/16................................ 1,755,906
1,170,000 Hawaii Department Budget & Finance, Special Purpose
Mortgage, Kapiolani Health Care System, 6.30%,
7/1/08, MBIA......................................... 1,237,275
2,535,000 Hawaii Department Budget & Finance, Special Purpose
Mortgage, Kapiolani Health Care System, 6.40%,
7/1/13, MBIA......................................... 2,652,244
1,385,000 Hawaii Department Budget & Finance, Special Purpose
Mortgage Revenue, 6.90%, 7/1/04, FGIC................ 1,464,637
3,680,000 Hawaii Department Budget & Finance, Special Purpose
Mortgage Revenue, 7.00%, 7/1/08, FGIC................ 3,891,600
2,535,000 Hawaii Department Budget & Finance, Special Purpose
Mortgage Revenue, 6.88%, 4/1/12, MBIA................ 2,620,480
965,000 Hawaii Department Budget & Finance, Special Purpose
Mortgage Revenue, 6.88%, 4/1/12, MBIA................ 997,540
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ---------------------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Hawaii, continued:
1,605,000 Hawaii Department Budget & Finance, Special Purpose
Mortgage Revenue, 6.50%, 7/1/12, FGIC.............. $ 1,641,113
2,820,000 Hawaii Department Budget & Finance, Special Purpose
Mortgage Revenue, 7.20%, 12/1/14, MBIA............. 3,094,950
1,285,000 Hawaii Department Budget & Finance, Special Purpose
Mortgage Revenue, Series A, 6.25%, 3/1/21.......... 1,315,519
965,000 Hawaii Department Transportation, Special Facility
Revenue, 5.75%, 3/1/13............................. 936,050
965,000 Hawaii Harbor Capital Improvement Revenue, 6.20%,
7/1/08, MBIA....................................... 1,015,663
4,525,000 Hawaii Housing Finance & Development Corp., 5.85%,
7/1/17............................................. 4,496,719
1,925,000 Hawaii Housing Finance & Development Corp., Federal
National Mortgage Assoc., 5.70%, 7/1/13............ 1,903,343
4,185,000 Hawaii Housing Finance & Development Corp., Federal
National Mortgage Assoc., 7.00%, 7/1/31............ 4,331,475
1,580,000 Hawaii Housing Finance & Development Corp., Single
Family Mortgage Purchase Revenue, Series B, 6.90%,
7/1/16............................................. 1,639,250
2,340,000 Hawaii Housing Finance & Development Corp.,
University of Hawaii Housing, 5.70%, 10/1/25,
AMBAC.............................................. 2,316,600
2,565,000 Honolulu City & County, Series A, 7.35%, 7/1/06,
FGIC............................................... 3,004,256
3,000,000 Honolulu City & County, Series A, 6.00%, 1/1/11,
FGIC............................................... 3,153,750
3,000,000 Honolulu City & County, Series A, 5.75%, 4/1/11,
FGIC............................................... 3,063,750
</TABLE>
Continued
37
<PAGE>
PACIFIC CAPITAL FUNDS
TAX-FREE SECURITIES FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JULY 31, 1996
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ----------------------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Hawaii, continued:
1,605,000 Honolulu City & County, Series A, 5.75%, 4/1/12,
FGIC................................................ $ 1,641,113
1,380,000 Honolulu City & County, GO, Series A, 5.00%, 11/1/12,
MBIA................................................ 1,281,674
2,890,000 Honolulu City & County, Series A, 5.75%, 4/1/13,
FGIC................................................ 2,944,188
1,480,000 Honolulu City & County, Series C, 7.15%, 6/1/10, Pre-
refunded on 6/1/00 @ 101............................ 1,629,850
1,055,000 Honolulu City & County Water, 6.00%, 12/1/10, FGIC... 1,114,344
1,595,000 Honolulu City & County Water, 6.00%, 12/1/11, FGIC... 1,680,731
640,000 Honolulu City & County Water, 6.00%, 12/1/14, FGIC... 670,400
1,280,000 Honolulu City & County Refunding & Improvement,
Series B, 5.50%, 10/1/11, FGIC...................... 1,283,200
640,000 Honolulu City & County Refunding & Improvement,
Series B, 5.25%, 10/1/12, FGIC...................... 620,800
630,000 Kauai County, 5.35%, 8/1/02.......................... 648,113
535,000 Kauai County, 7.20%, 8/1/02, AMBAC, Pre-refunded on
8/1/00 @ 101........................................ 591,844
695,000 Kauai County, 5.55%, 8/1/04.......................... 721,063
740,000 Kauai County, 5.65%, 8/1/05.......................... 770,525
780,000 Kauai County, 5.75%, 8/1/06.......................... 814,124
710,000 Kauai County, 7.40%, 8/1/06, AMBAC, Pre-refunded on
8/1/00 @ 101........................................ 790,763
690,000 Kauai County, 7.50%, 8/1/08, AMBAC, Pre-refunded on
8/1/00 @ 101........................................ 771,075
925,000 Kauai County, Series C, 5.90%, 8/1/09, AMBAC......... 965,469
1,020,000 Maui County, GO, 5.90%, 6/1/14....................... 1,039,125
1,605,000 Maui County, Series A, 6.80%, 12/1/07, Pre-refunded
on 12/1/00 @ 101.................................... 1,763,494
645,000 Maui County Refunding, 5.25%, 9/1/06................. 645,805
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ---------------------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Hawaii, continued:
890,000 Maui County Refunding, 5.13%, 12/15/10.............. $ 854,400
355,000 Maui County Water, Series A, 6.10%, 12/1/02, Pre-
refunded on 12/1/01 @ 101, FGIC.................... 382,956
375,000 Maui County Water, Series A, 6.20%, 12/1/03, FGIC... 406,406
400,000 Maui County Water, Series A, 6.30%, 12/1/04, Pre-
refunded on 12/1/01 @ 101, FGIC.................... 435,500
425,000 Maui County Water, Series A, 6.40%, 12/1/05, Pre-
refunded on 12/1/01 @ 101, FGIC.................... 464,313
390,000 Maui County Water, Series A, 6.50%, 12/1/06, Pre-
refunded on 12/1/01 @ 101, FGIC.................... 428,025
380,000 Maui County Water, Series A, 6.60%, 12/1/07, Pre-
refunded on 12/1/01 @ 101, FGIC.................... 418,950
520,000 Maui County Water, Series A, 6.65%, 12/1/08, Pre-
refunded on 12/1/01 @ 101, FGIC.................... 574,600
455,000 Maui County Water, Series A, 6.65%, 12/1/09, Pre-
refunded on 12/1/01 @ 101, FGIC.................... 502,775
595,000 Maui County Water, Series A, 6.70%, 12/1/10, Pre-
refunded on 12/1/01 @ 101, FGIC.................... $658,963
535,000 Maui County Water, Series A, 6.70%, 12/1/11, Pre-
refunded on 12/1/01 @ 101, FGIC.................... 592,513
------------
110,764,058
------------
Kansas (1.7%):
2,565,000 Burlington Pollution Control Refunding, Kansas Gas &
Electric Co. Project, 7.00%, 6/1/31................ 2,808,675
2,000,000 Kansas City, Utilities System Revenue Refunding &
Improvement, 6.38%, 9/1/23......................... 2,090,000
------------
4,898,675
------------
</TABLE>
Continued
38
<PAGE>
PACIFIC CAPITAL FUNDS
TAX-FREE SECURITIES FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JULY 31, 1996
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ---------------------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Maine (0.7%):
1,925,000 Maine State Turnpike Authority, Turnpike Revenue,
6.00%, 7/1/14...................................... $ 1,958,688
------------
Massachusetts (2.4%):
3,790,000 Commonwealth of Massachusetts, Series B, 5.50%,
7/1/15............................................. 3,676,300
2,375,000 Massachusetts State Health & Educational Authority,
Series P, 5.60%, 11/1/16........................... 2,363,125
1,000,000 Massachusetts State Water Pollution Abatement Trust,
5.70%, 2/1/13...................................... 1,000,000
------------
7,039,425
------------
Michigan (2.3%):
4,000,000 Michigan Environmental Protection Program, GO,
5.40%, 11/1/19..................................... 3,810,000
1,545,000 Michigan Strategic Obligations Revenue, 6.95%,
5/1/11............................................. 1,757,437
1,250,000 Saline Area Schools, GO, 5.50%, 5/1/15, FGIC........ 1,221,875
------------
6,789,312
------------
Minnesota (0.8%):
2,000,000 North St. Paul, Maplewood, Independent School
District, No. 622, Series A, 6.88%, 2/1/15, Pre-
refunded on 2/1/05 @ 100........................... 2,260,000
------------
New Jersey (1.3%):
2,000,000 New Jersey Wastewater Treatment Trust, Series B,
6.38%, 4/1/14...................................... 2,120,000
1,500,000 South Brunswick Township Board of Education, 6.40%,
8/1/14, FGIC....................................... 1,593,750
------------
3,713,750
------------
New Mexico (1.5%):
2,000,000 Rio Rancho Water & Waste Water Systems Revenue,
Series A, 5.90%, 5/15/15, FSA...................... 2,007,500
2,085,000 Santa Fe Revenue, 6.25%, 6/1/15, Pre-refunded on
6/1/04 @ 100....................................... 2,267,437
------------
4,274,937
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ---------------------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
North Carolina (1.2%):
3,085,000 North Carolina Easton Municipal Power, 6.50%,
1/1/18............................................. $ 3,447,488
------------
Ohio (0.7%):
1,120,000 Cleveland Waterworks Revenue, 6.25%, 1/1/16......... 1,157,800
1,000,000 Ohio Water Development Authority Pollution Control,
5.50%, 12/1/15, MBIA............................... 972,500
------------
2,130,300
------------
Oregon (0.6%):
1,605,000 Umatilla County, School District Number 016R,
Pendleton, 6.00%, 7/1/14, AMBAC.................... 1,671,206
------------
Pennsylvania (1.1%):
3,150,000 Southeastern Pennsylvania Transportation Authority,
Series A, 6.00%, 3/1/15, FGIC...................... 3,216,938
------------
South Carolina (0.9%):
2,285,000 Piedmont Municipal Power Agency, South Carolina
Electric Refunding, Series A, 6.50%, 1/1/14, FGIC.. 2,490,650
------------
Tennessee (3.2%):
1,000,000 Johnson City, School Sales Tax, 6.70%, 5/1/21....... 1,078,750
1,965,000 Shelby County School, Series B, 6.00%, 3/1/19....... 1,989,562
6,300,000 Shelby County Refunding, Series A, 5.63%, 4/1/15.... 6,229,125
------------
9,297,437
------------
Texas (2.2%):
1,520,000 Harris County, Certificates of Obligation, 6.00%,
10/1/15............................................ 1,567,500
1,280,000 Texas State Public Financial Authority, Series A,
6.00%, 10/1/12..................................... 1,316,800
1,400,000 Texas State, Series Correction, 5.75%, 8/1/18....... 1,398,250
</TABLE>
Continued
39
<PAGE>
PACIFIC CAPITAL FUNDS
TAX-FREE SECURITIES FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JULY 31, 1996
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ---------------------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Texas, continued:
2,000,000 Texas State Refunding, Public Finance Authority,
Series A, 5.95%, 10/1/15........................... $ 2,032,500
------------
6,315,050
------------
Virginia (4.4%):
3,500,000 Commonwealth of Virginia Public School Authority,
5.63%, 6/1/15...................................... 3,469,375
2,995,000 Fairfax County Public Improvement, Series A, 5.50%,
6/1/14............................................. 2,972,538
1,925,000 Fairfax County Refunding, Series C, 5.40%, 5/1/11... 1,929,812
2,750,000 Norfolk Water Revenue, 5.75%, 11/1/13, MBIA......... 2,763,750
1,750,000 Richmond Refunding, 5.20%, 1/15/14.................. 1,662,500
------------
12,797,975
------------
Total Municipal Bonds 228,700,558
------------
DAILY DEMAND NOTES (0.4%):
Idaho (0.4%):
1,200,000 Idaho Health Facilities, St. Luke Medical Center,
3.65%, 5/1/22, LOC: Credit Suisse *................ 1,200,000
------------
Total Daily Demand Notes 1,200,000
------------
ALTERNATIVE MINIMUM TAX PAPER (19.2%):
Hawaii (18.7%):
740,000 Hawaii Airports System Revenue, 7.00%, 7/1/10, FGIC,
AMT................................................ 809,375
510,000 Hawaii Airports System Revenue, 7.38%, 7/1/11,
AMBAC, AMT......................................... 558,450
640,000 Hawaii Airports System Revenue, 7.30%, 7/1/20,
AMBAC, AMT......................................... 698,400
320,000 Hawaii Airports System Revenue, Second Series,
7.50%, 7/1/09 FGIC, AMT............................ 352,000
10,585,000 Hawaii Airports System Revenue, Second Series,
6.90%, 7/1/12, MBIA, AMT........................... 11,934,588
1,890,000 Hawaii Airports System Revenue, Second Series,
7.00%, 7/1/18, MBIA, AMT........................... 2,045,925
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ----------------------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Hawaii, continued:
2,320,000 Hawaii Airports System Revenue, Second Series, 7.50%,
7/1/20, FGIC, AMT................................... $ 2,546,200
1,500,000 Hawaii Airports System Revenue, Second Series, 6.75%,
7/1/21, AMT, MBIA................................... 1,582,500
425,000 Hawaii Department Budget & Finance, Series C, 7.38%,
9/1/18, AMT......................................... 430,078
3,205,000 Hawaii Department Budget & Finance, Special Purpose
Mortgage Revenue, 6.60%, 7/1/22, AMT................ 3,317,175
1,475,000 Hawaii Department Budget & Finance, Special Purpose
Mortgage Revenue, 6.55%, 12/1/22, MBIA, AMT......... 1,539,531
7,000,000 Hawaii Department Budget & Finance, Special Purpose
Mortgage Revenue, Series A, 6.60%, 1/1/25, MBIA,
AMT................................................. 7,341,250
3,000,000 Hawaii Department Budget & Finance, Special Purpose
Revenue, Series A, 6.20%, 5/1/26, MBIA, AMT......... 3,052,500
1,825,000 Hawaii Harbor Capital Improvement Revenue, 6.10%,
7/1/07, FGIC, AMT................................... 1,911,688
1,605,000 Hawaii Harbor Capital Improvement Revenue, 7.25%,
7/1/10, MBIA, AMT................................... 1,747,443
2,245,000 Hawaii Harbor Capital Improvement Revenue, 7.00%,
7/1/17, MBIA, AMT................................... 2,416,181
1,350,000 Hawaii Harbor Capital Improvement Revenue, 6.50%,
7/1/19, FGIC, AMT................................... 1,402,313
3,205,000 Hawaii Harbor Capital Improvement Revenue, 6.38%,
7/1/24, FGIC, AMT................................... 3,313,169
</TABLE>
Continued
40
<PAGE>
PACIFIC CAPITAL FUNDS
TAX-FREE SECURITIES FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JULY 31, 1996
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ---------------------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Hawaii, continued:
3,205,000 Hawaii Housing Finance & Development Corp., Single
Family Mortgage Revenue, Series A, 6.00%, 7/1/26,
AMT................................................ $ 3,160,931
2,500,000 Hawaii Student Loan, 3.65%, 9/1/10, AMT, LOC: Nat
West*.............................................. 2,500,000
1,445,000 Honolulu City & County, Series B, 7.25%, 2/1/08,
FGIC, AMT.......................................... 1,556,988
------------
54,216,685
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ---------------------------------------------------- ------------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Oregon (0.5%):
1,500,000 Portland Airports Revenue, International Airport
Series 10, 5.88%, 7/1/15, AMT...................... $ 1,516,875
------------
Total Alternative Minimum Tax Paper 55,733,560
------------
INVESTMENT COMPANIES (0.2%):
664,684 Nuveen Tax Free Money Market........................ 664,683
------------
Total Investment Companies 664,683
------------
Total (Cost--$274,682,887) (a) $286,298,801
============
</TABLE>
- ------
Percentages are based on net assets of $289,502,664.
* Variable rate securities having liquidity sources through bank letters of
credit or other credit and/or liquidity agreements. The interest rate, which
will change periodically, is based upon bank prime rates or an index of
market interest rates. The rate reflected on the Schedule of Portfolio
Investments is the rate in effect at July 31, 1996.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized
appreciation........ $12,655,660
Unrealized
depreciation........ (1,039,746)
-----------
Net unrealized
appreciation........ $11,615,914
===========
</TABLE>
AMBAC Indemnity Corporation
AMT Alternative Minimum Tax Paper
GO General Obligation
FGIC Insured by Financial Guaranty Insurance Corp.
FSA Insured by Financial Security Assurance
MBIA Insured by Municipal Bond Insurance Association
See notes to financial statements.
41
<PAGE>
PACIFIC CAPITAL FUNDS
TAX-FREE SHORT INTERMEDIATE SECURITIES FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JULY 31, 1996
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------ -----------
<C> <S> <C>
ALTERNATIVE MINIMUM TAX PAPER (19.5%):
Florida (2.6%):
1,000,000 Dade County, Aviation Revenue, 5.75%, 10/1/99......... $ 1,040,000
-----------
Hawaii (11.7%):
1,000,000 Hawaii State Airports System, Revenue Refunding,
5.15%, 7/1/98........................................ 1,015,000
1,050,000 Hawaii State Airports System, Revenue, 5.30%, 7/1/99,
AMT.................................................. 1,072,312
2,000,000 Hawaii State Airports System, Revenue, Second Series,
5.45%, 7/1/00, AMT, MBIA............................. 2,047,840
550,000 Hawaii State Housing Finance & Development, Series A,
4.40%, 7/1/98, AMT................................... 549,313
-----------
4,684,465
-----------
Texas (5.2%):
550,000 Brazos, Higher Education Authority, Series A-2, 5.60%,
6/1/99, AMT.......................................... 563,063
1,500,000 Texas State College Student Loan, 5.10%, 8/1/99, AMT.. 1,518,750
-----------
2,081,813
-----------
Total Alternative Minimum Tax Paper 7,806,278
-----------
MUNICIPAL BONDS (77.3%):
Alaska (2.5%):
1,000,000 Alaska State Housing Finance Corp., 4.60%, 6/1/00..... 1,001,250
-----------
Arizona (8.3%):
750,000 Arizona State Transportation Board, 5.50%, 1/1/00..... 775,313
1,000,000 Phoenix, 5.70%, 7/1/99................................ 1,036,250
1,500,000 Salt River Project, Arizona Agricultural, Series B,
4.45%, 1/1/00........................................ 1,488,750
-----------
3,300,313
-----------
Hawaii (43.2%):
2,500,000 Hawaii State Airport System Revenue, 5.55%, 7/1/00,
MBIA................................................. 2,581,250
1,500,000 Hawaii State Airport System Revenue Refunding, 5.40%,
7/1/99............................................... 1,539,375
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------ -----------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Hawaii, continued:
270,000 Hawaii State Community Development Authority, Special
Tax Assessment, 4.20%, 7/1/97........................ $ 269,198
120,000 Hawaii State Community Development Authority, District
#1, Special Tax Assessment, 4.45%, 7/1/98............ 120,300
165,000 Hawaii State Community Development Authority, District
#2, Special Tax Assessment, 4.45%, 7/1/98............ 165,413
3,000,000 Hawaii State, GO, 5.50%, 1/1/00....................... 3,086,250
2,500,000 Hawaii State, GO, Series Cd, 4.60%, 2/1/00............ 2,503,125
1,500,000 Hawaii State, GO, Series Ck, 5.00%, 9/1/00, FGIC...... 1,522,500
1,200,000 Hawaii State, GO, Series Cl, 4.50%, 3/1/01, FGIC...... 1,191,000
700,000 Honolulu, City & County GO, Series A, 5.10%, 1/1/00,
FGIC................................................. 711,375
1,000,000 Honolulu, City & County GO, Series A, 4.40%, 11/1/00,
MBIA................................................. 991,250
750,000 Honolulu, City & County GO, Series B, 5.10%, 6/1/00,
FGIC................................................. 763,125
375,000 Honolulu, City & County Improvement District, 5.85%,
10/15/97............................................. 383,906
370,000 Honolulu, City & County Improvement District, 6.05%,
10/15/98............................................. 382,950
370,000 Honolulu, City & County Improvement District, 6.20%,
10/15/99............................................. 387,575
620,000 Maui County, GO, Series A, 5.35%, 6/1/00.............. 636,275
-----------
17,234,866
-----------
Massachusetts (3.2%):
1,265,000 Massachusetts State Construction, Series D, 5.13%,
11/1/00.............................................. 1,288,719
-----------
</TABLE>
Continued
42
<PAGE>
PACIFIC CAPITAL FUNDS
TAX-FREE SHORT INTERMEDIATE SECURITIES FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JULY 31, 1996
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------ -----------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Minnesota (5.6%):
700,000 Minnesota State, GO, 5.00%, 8/1/00.................... $ 714,000
1,500,000 Minnesota State Revenue, Series A, 5.00%, 6/30/01,
AMBAC................................................ 1,518,750
-----------
2,232,750
-----------
New Jersey (2.5%):
1,000,000 New Jersey State Transit Authority, Series B, 4.50%,
6/15/00, MBIA........................................ 998,750
-----------
Oregon (2.5%):
1,000,000 Oregon State, GO, Higher Education, Series C, 4.60%,
3/1/00............................................... 1,005,000
-----------
Puerto Rico (2.5%):
1,000,000 University of Puerto Rico, University Revenue
Refunding, Series N, 4.63%, 6/1/00, MBIA............. 1,005,000
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------ -----------
<C> <S> <C>
MUNICIPAL BONDS, CONTINUED:
Rhode Island (3.2%):
1,250,000 Rhode Island Housing & Mortgage Financial Corp., MFH
Series A, 5.00%, 7/1/00, AMBAC....................... $ 1,278,125
-----------
Texas (1.3%):
500,000 Tarrant County Texas Health Facilities Development,
4.75%, 9/1/00, AMBAC................................. 501,250
-----------
Wisconsin (2.5%):
1,000,000 Milwaukee, GO, 5.00%, 2/1/01.......................... 1,015,000
-----------
Total Municipal Bonds 30,861,023
-----------
INVESTMENT COMPANIES (1.2%):
470,867 Nuveen Tax Free Money Market.......................... 470,867
-----------
Total Investment Companies 470,867
-----------
Total (Cost--$38,846,656) (a) $39,138,168
===========
</TABLE>
- ------
Percentages are based on net assets of $39,923,141.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized apprecia-
tion.................. $391,984
Unrealized deprecia-
tion.................. (100,472)
--------
Net unrealized appreci-
ation................. $291,512
========
</TABLE>
AMBAC Insured by AMBAC Indemnity Corporation
AMT Alternative Minimum Tax Paper
FGIC Insured by Financial Guarantey Imsurance Corporation
GO General Obligation
MBIA Insured by Municipal Bond Insurance Association
MFH Multi-Family Housing
See notes to financial statements.
43
<PAGE>
PACIFIC CAPITAL FUNDS
NEW ASIA GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
JULY 31, 1996
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------- ----------------------------------------------------------- ----------
<C> <S> <C>
COMMON STOCKS (86.2%):
Hong Kong (30.3%):
Consumer Goods (1.1%):
500,000 Tingyi (Cayman Islands) Holding Co. (b).................... $ 109,914
----------
Diversified-Conglomerates, Holding Companies (7.6%):
67,000 Citic Pacific Ltd.......................................... 276,376
170,000 First Pacific Co. Ltd...................................... 258,299
43,000 Hutchison Whampoa Ltd...................................... 256,889
----------
791,564
----------
Electrical Equipment (1.1%):
590,000 Elec & Eltek (Bermuda) International Holdings (b).......... 111,388
----------
Financial Services (2.6%):
13,200 Dah Sing Financial Holdings Ltd............................ 38,576
14,800 HSBC Holdings PLC.......................................... 236,355
----------
274,931
----------
Food Distributors & Wholesalers (2.8%):
600,000 NG Fung Hong Ltd........................................... 290,950
----------
Real Estate (9.6%):
140,000 Amoy Properties Ltd........................................ 155,690
41,000 Cheung Kong Holdings Ltd. (b).............................. 279,667
514,000 Fairyoung Holdings Ltd. (b)................................ 222,660
48,000 Henderson Land Development Co. Ltd......................... 342,933
----------
1,000,950
----------
Textile Manufacturing (1.3%):
500,000 Chaifa Holdings Ltd. (b)................................... 140,626
----------
Utilities-Electric (2.4%):
147,000 Consolidated Electric Power Asia Ltd. (b).................. 253,766
----------
Wholesale & International Trade (1.8%):
227,000 Goldlion Holdings Ltd. (b)................................. 190,798
----------
Total Hong Kong 3,164,887
----------
Indonesia (6.6%):
Chemicals (1.6%):
120,000 PT Budi Acid Jaya.......................................... 172,230
----------
Construction (2.0%):
90,000 PT Semen Gresik (Persero).................................. 203,806
----------
Technology (0.5%):
55,000 PT Bukaka Teknik Utama..................................... 49,118
----------
Tobacco & Tobacco Products (0.7%):
20,000 PT Gudang Garam............................................ 71,869
----------
</TABLE>
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------- ------------------------------------- ----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Indonesia, continued:
Transportation (1.8%):
204,000 PT Steady Safe (b)................... $ 190,857
----------
Total Indonesia 687,880
----------
Malaysia (15.6%):
Chemicals (1.5%):
60,000 Metacorp Berhad...................... 153,877
----------
Construction (3.9%):
180,000 Sunrise Berhad (b)................... 403,927
----------
Engineering, Industrial Construction (2.0%):
55,000 Ekran Berhad (b)..................... 207,173
----------
Financial Services (3.1%):
200,000 Berjaya Capital Berhad (b)........... 180,325
100,000 Public Finance Berhad (b)............ 145,862
----------
326,187
----------
Holding Companies (1.7%):
50,000 Arab Malaysian Corp. Berhad (b)...... 181,326
----------
Real Estate (2.0%):
85,000 Malaysian Resources Corp. Berhad (b). 212,883
----------
Retail (1.4%):
120,000 LARUT Consolidated Berhad (b)........ 150,030
----------
Total Malaysia 1,635,403
----------
Phillipines (6.7%):
Automotive Parts (2.0%):
644,000 Republic Glass Holdings Corp......... 208,891
----------
Real Estate (4.7%):
325,000 Fil-Estate Land, Inc................. 341,061
760,000 Robinson's Land Corp., Series B (b).. 150,811
----------
491,872
----------
Total Phillipines 700,763
----------
Singapore (1.5%):
Hotels & Motels (1.5%):
45,000 Orchard Parade Holdings Ltd.......... 162,409
----------
Total Singapore 162,409
----------
Thailand (13.3%):
Chemicals (0.2%):
4,700 Thai Plastic & Chemical PLC (b)...... 24,007
----------
</TABLE>
Continued
44
<PAGE>
PACIFIC CAPITAL FUNDS
NEW ASIA GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
JULY 31, 1996
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------- ----------------------------------------------------------- ----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Thailand, continued:
Electrical Services (2.9%):
74,000 Cogeneration PLC (b)....................................... $ 298,871
----------
Financial Services (5.6%):
26,000 Finance One................................................ 133,835
26,700 Krung Thai Bank PLC........................................ 103,607
9,000 National Finance & Securities.............................. 26,727
27,500 Phatra Thanakit PLC........................................ 172,045
22,000 Thai Farmers Bank PLC (b).................................. 145,476
----------
581,690
----------
Manufacturing-Consumer Goods (1.6%):
170,000 Aromatics Thailand PLC (b)................................. 164,918
----------
Mining (2.2%):
8,500 Banpu PLC.................................................. 230,212
----------
Oil & Gas Exploration, Production & Services (0.8%):
7,100 PTT Exploration & Production PLC........................... 88,838
----------
Total Thailand 1,388,536
----------
United States (12.2%):
Automobiles (1.7%):
12,000 Tata Engineering & Locomotive Co. GDR (b).................. 180,000
----------
Computers & Peripherals (1.2%):
11,200 Macronix International Co. Ltd. ADR (b).................... 126,700
----------
</TABLE>
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
------- ----------------------------------------------------------- ----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
United States, continued:
Construction & Housing (3.2%):
15,200 Dong-Ah Construction Industrial Co. EDR (b)................ $ 338,200
----------
Electrical Equipment (4.8%):
8,000 Bombay Suburban Electric
Supply Ltd. (b)........................................... 146,000
60,000 Elec & Eltek International Co. Ltd......................... 163,200
542 Sams E-GD96NV-N (b)........................................ 11,721
16 Sams EL-GD96V-N (b)........................................ 692
54 Samsung Electronics GDR N (b).............................. 2,335
1,800 Samsung Electronics GDR US................................. 45,000
19,200 Silicone Precision GDR (b)................................. 129,984
----------
498,932
----------
Food Processing & Packaging (1.3%):
60,000 Want Want Holdings Ltd. (b)................................ 138,600
----------
Total United States 1,282,432
----------
Total Common Stocks 9,022,310
----------
RIGHTS/WARRANTS (0.1%):
Malaysia (0.1%):
32,000 Public Finance Berhad Rights............................... 6,925
----------
United States (0.0%):
15,200 Dong Ah Construction Ind 96-tech EDR....................... --
----------
Total Rights/Warrants 6,925
----------
Total (Cost--$9,467,465)(a) $9,029,235
==========
</TABLE>
FORWARD CURRENCY CONTRACTS:
<TABLE>
<CAPTION>
CONTRACT
DELIVERY CONTRACT VALUE (U.S.
DATE PRICE DOLLARS) DEPRECIATION
-------- -------- ----------- ------------
<S> <C> <C> <C> <C>
CURRENCY PURCHASED:
Phillipine Peso...................... 8/1/96 $26.24 $22,088 $ (29)
Thai Bahts........................... 8/1/96 25.37 32,536 (148)
------- -----
$54,624 $(177)
======= =====
</TABLE>
<TABLE>
<CAPTION>
CONTRACT
DELIVERY CONTRACT VALUE (U.S.
DATE PRICE DOLLARS) DEPRECIATION
-------- -------- ----------- ------------
<S> <C> <C> <C> <C>
CURRENCY SOLD:
Malaysian Dollar..................... 8/5/96 $2.488 $39,879 $(128)
Thai Bahts........................... 8/1/96 25.072 435 (3)
------- -----
$40,314 $(131)
======= =====
</TABLE>
- ------
Percentages are based on net assets of $10,458,403.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized apprecia-
tion................. $ 115,094
Unrealized deprecia-
tion................. (553,324)
---------
Net unrealized depre-
ciation.............. $(438,230)
=========
</TABLE>
(b) Represents non-income producing security.
ADR American Depository Receipt
EDR European Depository Receipt
GDR Global Depository Receipt
PLC Public Limited Company
See Notes to Financial Statements.
45
<PAGE>
PACIFIC CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1996
1. ORGANIZATION
Pacific Capital Funds (the "Trust") was organized on October 30, 1992, and
is registered under the Investment Company Act of 1940, as amended, ("the
1940 Act"), as a diversified, open-end management investment company
established as a Massachusetts business trust. The Trust currently consists
of the following investment portfolios (individually, a "Fund" and
collectively, the "Funds"): Growth Stock Fund, U.S. Treasury Securities
Fund, Short Intermediate U.S. Treasury Securities Fund, Growth and Income
Fund, Diversified Fixed Income Fund, Tax-Free Securities Fund, Tax-Free
Short Intermediate Securities Fund, and New Asia Growth Fund. The Trust is
authorized to issue for each Fund an unlimited number of shares without par
value in two classes of shares: Retail Class and Institutional Class. The
Institutional Class commenced operations October 14, 1994 when the Trust
identified those Institutional Shareholders that were part of the Retail
Class (as of October 13, 1994) and transferred the Shareholders into the
Institutional Class. Retail Class Shares are subject to initial sales
charges, imposed at the time of purchase, in accordance with the Funds'
prospectuses. Each class of shares for each Fund has identical rights and
privileges except with respect to distribution (12b-1) fees paid by Retail
Class Shares, voting rights on matters affecting a single class of shares
and the exchange privileges of each class of shares.
The Funds' investment objectives are as follows. Growth Stock Fund seeks
long-term capital appreciation; U.S. Treasury Securities Fund and Short
Intermediate U.S. Treasury Securities Fund seek a high level of current
income consistent with prudent risk of capital. Growth and Income Fund seeks
primarily current income and secondarily capital appreciation. Diversified
Fixed Income Fund seeks a high level of current income. Tax-Free Securities
Fund and Tax-Free Short Intermediate Securities Fund seek a high level of
current income exempt from federal and Hawaii income taxes. New Asia Growth
Fund seeks long-term growth of capital.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Trust in the preparation of its financial statements. The policies are
in conformity with generally accepted accounting principles. The preparation
of financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of income and
expenses for the period. Actual results could differ from those estimates.
SECURITIES VALUATION
Investments of the Funds for which the primary market is a national
securities exchange or the National Association of Securities Dealers
Automated Quotation National Market System ("NASDAQ") are valued at last
reported sale price on the day of valuation. In the absence of any sale of
such securities on the valuation date, the valuations are based on the mean
of the latest quoted bid and asked prices. Securities, including thinly
traded, unlisted, and restricted securities, for which market quotations
are not readily available, are valued at fair market value by the
investment adviser under the supervision of the Fund's Board of Trustees.
Investments in investment companies are valued at their respective net
asset values as reported by such companies. Money market instruments and
other debt securities maturing in 60 days or less are valued at amortized
cost, which approximates market value. Investments in foreign securities,
currency holdings and other assets and liabilities of New Asia Growth Fund
are valued based on quotations from the primary market in which they are
traded and translated from the local currency into U.S. dollars using
current exchange rates. The differences between the cost and market values
of securities are reflected as either unrealized appreciation or
depreciation.
Continued
46
<PAGE>
PACIFIC CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JULY 31, 1996
SECURITIES TRANSACTIONS AND RELATED INCOME
Securities transactions are accounted for on the date the security is
purchased or sold (trade date). Interest income is recognized on the
accrual basis and includes, where applicable, the pro rata amortization of
premium or accretion of discount. Dividend income is recorded on the ex-
dividend date and is reduced by applicable foreign taxes withheld. Gains or
losses realized from sales of securities are determined by comparing the
identified cost of the security lot sold with the net sales proceeds.
FOREIGN CURRENCY TRANSLATION
The New Asia Growth Fund isolates that portion of the results of operations
resulting from changes in currency exchange rates from the fluctuation
arising from changes in market prices of securities held.
Purchases and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the exchange rate on the dates of the
transactions. Reported net realized foreign exchange gains or losses arise
from sales and maturities of portfolio securities, sales of foreign
currencies, currency exchange fluctuations between the trade and settlement
dates of securities transactions, and the difference between the amounts of
assets and liabilities recorded and the U.S. dollar equivalent of the
amounts actually received or paid. Net unrealized foreign currency
appreciation or depreciation arises from changes in the value of assets and
liabilities, including investments in securities, resulting from changes in
currency exchange rates.
RISKS ASSOCIATED WITH FOREIGN SECURITIES AND CURRENCIES
Investments in securities of foreign issuers carry certain risks not
ordinarily associated with investments in securities of domestic issuers.
Such risks include future political and economic developments, and the
possible imposition of exchange controls or other foreign governmental laws
and restrictions. In addition, with respect to certain countries, there is
the possibility of expropriation of assets, confiscatory taxation,
political or social instability or diplomatic developments which could
adversely affect investments in those countries.
Certain countries may also impose substantial restrictions on investments
in their capital markets by foreign entities, including restrictions on
investments in issuers of industries deemed sensitive to relevant national
interests. These factors may limit the investment opportunities available
in the New Asia Growth Fund and result in a lack of liquidity and a high
price volatility with respect to securities of issuers from developing
countries.
Withholding taxes on foreign dividends have been provided for in accordance
with the New Asia Growth Fund's understanding of applicable countries' tax
rules and rates.
FORWARD CURRENCY EXCHANGE CONTRACTS
The New Asia Growth Fund may from time to time enter into foreign currency
exchange transactions to convert to and from different foreign currencies.
The Fund may enter into currency exchange transactions on a spot (i.e.,
cash) basis at the spot rate prevailing in the foreign currency exchange
market, or use forward currency contracts to purchase or to sell foreign
currencies. A forward foreign currency contract is an obligation by the
Fund to purchase or to sell a specific currency at a future date at a price
set at the time of the contract. The Fund may use forward foreign currency
exchange contracts in order to protect against uncertainty in fluctuations
of future foreign exchange rates. The use of such forward
Continued
47
<PAGE>
PACIFIC CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JULY 31, 1996
contracts is limited to hedging against movements in the value of foreign
currencies relative to the U.S. dollar in connection with specific
portfolio transactions or with respect to portfolio positions. The forward
foreign currency exchange contracts are adjusted by the daily exchange rate
of the underlying currency and any appreciation or depreciation is recorded
for financial statement purposes as unrealized until the contract
settlement date, at which time the Fund records realized gains or losses
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. The Fund could be
exposed to risk if a counterparty is unable to meet the terms of a forward
foreign exchange currency contract or if the value of the foreign currency
changes unfavorably.
WHEN-ISSUED AND FORWARD COMMITMENTS
The Funds may purchase securities on a "when-issued" basis and may also
purchase or sell securities on a forward commitment. The Funds record when-
issued securities on the trade date and maintain security positions such
that sufficient liquid assets will be available to make payment for the
securities purchased. The value of securities underlying when-issued or
forward commitments to purchase securities, and any subsequent fluctuation
in their value, is taken into account when determining the net asset value
of the Funds commencing with the date the funds agree to purchase the
securities. The Funds do not accrue interest or dividends on when-issued
securities until the underlying securities are received.
REPURCHASE AGREEMENTS
The Funds may acquire securities from member banks of the Federal Deposit
Insurance Corporation and from registered broker-dealers which Hawaiian
Trust Company, Limited ("Hawaiian Trust") deems creditworthy under
guidelines approved by the Board of Trustees, subject to the seller's
agreement to repurchase such securities at a mutually agreed-upon date and
price ("repurchase agreement"). The repurchase price generally equals the
price paid by a Fund plus interest negotiated on the basis of current
short-term rates, which may be more or less than the rate on the underlying
portfolio securities. The seller, under a repurchase agreement, is required
to maintain the value of collateral held pursuant to the agreement at not
less than 102% of the repurchase price (including accrued interest).
Securities subject to repurchase agreements will be held by the Trust's
custodian or another qualified custodian or in the Federal Reserve/Treasury
book-entry system. Repurchase agreements are considered to be loans by a
Fund under the 1940 Act.
DIVIDENDS TO SHAREHOLDERS
Dividends from net investment income are declared daily and paid monthly
for the U.S. Treasury Securities Fund, Short Intermediate U.S. Treasury
Securities Fund, Diversified Fixed Income Fund, Tax-Free Securities Fund,
and Tax-Free Short Intermediate Securities Fund. Dividends from net
investment income are declared and paid monthly for the Growth Stock Fund
and Growth and Income Fund. Dividends from net investment income are
declared and paid quarterly for the New Asia Growth Fund. Distributable net
realized capital gains, if any, are declared and distributed annually.
Dividends from net investment income and net realized capital gains are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are primarily
due to differing treatments of foreign currency transactions and deferrals
of certain losses. Permanent book and tax basis differences are reflected
in the components of net assets.
Continued
48
<PAGE>
PACIFIC CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JULY 31, 1996
FEDERAL INCOME TAXES
Each Fund intends to continue to qualify as a regulated investment company
by complying with the provisions available to certain investment companies
as defined in applicable sections of the Internal Revenue Code, and to make
distributions of net investment income and net realized capital gains
sufficient to relieve it from all, or substantially all, federal income
taxes.
ORGANIZATION COSTS
Costs incurred by the Trust in connection with organization, registration
and the initial public offering of shares have been deferred and are
amortized using the straight-line method over a period of two years from
the commencement of the public offering of shares of each Fund. In the
event that any of the initial shares of a Fund are redeemed during such
period by any holder thereof, the Trust will reduce the redemption proceeds
otherwise payable to such holder to cover any unamortized organizational
expenses of the Trust in the same proportion as the number of initial
shares of the Fund being redeemed bears to the number of initial shares of
the Trust outstanding at the time of redemption.
CONCENTRATION OF CREDIT RISK
The Tax-Free Securities Fund and the Tax-Free Short Intermediate Securities
Fund have a majority of their investments in the securities of issuers in
Hawaii. Such concentration may subject the Fund to the effects of economic
changes occurring within that State.
OTHER
Expenses that are directly related to one Fund are charged directly to that
Fund. Other operating expenses for the Funds or the Trust are prorated to
the Funds on the basis of relative net assets or other appropriate basis.
3.PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding short-term securities) for the
year ended July 31, 1996 are as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
------------ -----------
<S> <C> <C>
Growth Stock Fund.................................... $127,216,990 $93,331,275
U.S. Treasury Securities Fund........................ 4,293,385 34,368,828
Short Intermediate U.S. Treasury Securities Fund..... 15,669,617 9,168,899
Growth and Income Fund............................... 79,843,714 46,845,973
Diversified Fixed Income Fund........................ 209,733,272 77,472,503
Tax-Free Securities Fund............................. 74,992,960 70,042,525
Tax-Free Short Intermediate Securities Fund.......... 22,073,029 21,863,212
New Asia Growth Fund................................. 11,714,868 4,574,925
</TABLE>
Continued
49
<PAGE>
PACIFIC CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JULY 31, 1996
4. RELATED PARTY TRANSACTIONS
Investment advisory services are provided to the Trust by Hawaiian Trust
(the "Adviser"). Under the terms of the investment advisory agreement with
the Trust, the Adviser is entitled to receive fees based on a percentage of
the average net assets of the Fund. Hawaiian Trust also served the Trust as
custodian prior to November 1995. Under the terms of the custodian
agreement, the custodian is entitled to receive fees based on a percentage
of the average net assets of each Fund and is entitled to be reimbursed for
its reasonable out-of-pocket expenses incurred in the performance of its
duties under the agreement. November 1995, Bank One became custodian
pursuant to a custodian agreement with the Trust. The custodian agreement
entitles Bank One to receive fees based on transaction volume.
BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services ("BISYS"),
an Ohio Limited Partnership, and BISYS Fund Services Ohio, Inc. ("BISYS
Ohio") are subsidiaries of The BISYS Group, Inc. BISYS, with whom certain
officers and a trustee of the Trust are affiliated, serves the Trust as
principal underwriter and administrator. Such officers and trustee are not
paid any fees directly by the Funds for serving as officers and trustee of
the Trust. Under the terms of the management and administration agreement,
BISYS's fees are computed at an annual rate of 0.20% of the average daily
net assets of each Fund.
BISYS also serves as the Trust's distributor and receives fees for providing
distribution services in accordance with a Distribution Agreement (the
"Agreement") pursuant to Rule 12b-1 under the 1940 Act. Under the Agreement,
Retail Class Shares pay BISYS a fee not to exceed, on an annual basis, 0.75%
of the average daily net assets attributable to the Retail Class of shares
of each Fund for payments BISYS makes to banks, including the Adviser, other
institutions and broker/dealers, and for expenses BISYS and any of its
affiliates or subsidiaries incur for providing distribution or shareholder
service assistance. For the year ended July 31, 1996, BISYS, as the Trust's
principal underwriter, received approximately $149,309 from commissions on
sales of Retail Class shares of which $128,062 was reallowed to affiliated
dealers of the Trust's shares and $18,390 was reallowed to other dealers of
the Trust's shares.
BISYS Ohio serves the Trust as fund accountant. Under the terms of the fund
accounting agreement, BISYS Ohio is entitled to receive fees based on a
percentage of the average net assets of each Fund and is reimbursed for
certain out-of-pocket expenses incurred in providing fund accounting
services.
Fees may be voluntarily reduced or expenses reimbursed to assist the Funds
in maintaining competitive expense ratios.
Continued
50
<PAGE>
PACIFIC CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JULY 31, 1996
Information regarding these transactions for the year ended July 31,1996 is
as follows:
<TABLE>
<CAPTION>
INVESTMENT ADVISORY FEES
---------------------------
ANNUAL FEE AS A ADMINISTRATION 12B-1 FEES
PERCENTAGE OF FEES FEES VOLUNTARILY
AVERAGE DAILY VOLUNTARILY VOLUNTARILY REDUCED-- EXPENSES ACCOUNTING
NET ASSETS REDUCED REDUCED (RETAIL CLASS) REIMBURSED FEES
--------------- ----------- -------------- -------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Growth Stock Fund....... 0.80% $ -- $69,003 $23,332 $ -- $53,199
U.S. Treasury Securities
Fund................... 0.60% -- 11,742 5,250 -- 9,579
Short Intermediate U.S.
Treasury Securities
Fund................... 0.50% 41,079 10,271 4,342 -- 7,486
Growth and Income Fund.. 0.80% -- 25,623 3,110 -- 21,384
Diversified Fixed Income
Fund................... 0.60% -- 55,166 2,917 -- 45,603
Tax-Free Securities
Fund................... 0.60% -- 116,727 4,072 -- 106,514
Tax-Free Short
Intermediate Securities
Fund................... 0.50% -- 20,177 1,739 -- 18,454
New Asia Growth Fund.... 0.90% -- 2,965 5,372 47,974 1,761
</TABLE>
Continued
51
<PAGE>
PACIFIC CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JULY 31, 1996
5. CAPITAL SHARE TRANSACTIONS:
Transactions in capital shares for the Trust were as follows:
<TABLE>
<CAPTION>
U.S. TREASURY
GROWTH STOCK FUND SECURITIES FUND
------------------------- ------------------------
AMOUNT SHARES AMOUNT SHARES
------------- ---------- ------------ ----------
FOR THE YEAR ENDED FOR THE YEAR ENDED
JULY 31, 1996 JULY 31, 1996
------------------------- ------------------------
<S> <C> <C> <C> <C>
RETAIL CLASS SHARES:
Shares issued........... $ 2,212,900 181,079 $ 120,008 12,543
Dividends reinvested.... 269,722 22,667 60,138 6,342
Shares redeemed......... (1,174,009) (94,879) (205,941) (21,534)
------------- ---------- ------------ ----------
Net increase............ $ 1,308,613 108,867 $ (25,795) (2,649)
============= ========== ============ ==========
INSTITUTIONAL CLASS
SHARES:
Shares issued........... $ 131,615,185 10,917,906 $ 1,527,773 161,323
Dividends reinvested.... 6,169,023 518,783 1,842,036 194,471
Shares redeemed......... (104,518,765) (8,612,823) (30,773,600) (3,250,486)
------------- ---------- ------------ ----------
Net increase............ $ 33,265,443 2,823,866 $(27,403,791) (2,894,692)
============= ========== ============ ==========
<CAPTION>
FOR THE YEAR ENDED FOR THE YEAR ENDED
JULY 31, 1995(A) JULY 31, 1995(A)
------------------------- ------------------------
<S> <C> <C> <C> <C>
RETAIL CLASS SHARES:
Exchange out to Institu-
tional Class (a)....... $ (53,141,072) (5,373,213) $(57,119,258) (6,595,757)
Shares issued........... 2,302,509 232,372 713,608 79,829
Dividends reinvested.... 164,056 16,321 822,476 92,953
Shares redeemed......... (2,510,546) (251,844) (1,047,673) (118,142)
------------- ---------- ------------ ----------
Net increase............ $ (53,185,053) (5,376,364) $(56,630,847) (6,541,117)
============= ========== ============ ==========
INSTITUTIONAL CLASS
SHARES:
Exchange in from Retail
Class (a).............. $ 53,141,072 5,373,213 $ 57,119,258 6,595,757
Shares issued........... 80,211,095 8,005,315 2,004,859 227,789
Dividends reinvested.... 548,955 52,603 2,516,597 282,297
Shares redeemed......... (18,512,105) (1,746,368) (15,462,413) (1,667,418)
------------- ---------- ------------ ----------
Net increase............ $ 115,389,017 11,684,763 $ 46,178,301 5,438,425
============= ========== ============ ==========
</TABLE>
- ------
(a) On October 13, 1994, the Trust identified those institutional shareholders
that were part of the Retail class and transferred these shareholders into
the Institutional class effective October 14, 1994.
Continued
52
<PAGE>
PACIFIC CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JULY 31, 1996
<TABLE>
<CAPTION>
SHORT INTERMEDIATE U.S.
TREASURY SECURITIES FUND GROWTH AND INCOME FUND
-------------------------- ------------------------
AMOUNT SHARES AMOUNT SHARES
------------ ------------ ------------ ----------
FOR THE YEAR ENDED FOR THE YEAR ENDED
JULY 31, 1996 JULY 31, 1996
-------------------------- ------------------------
<S> <C> <C> <C> <C>
RETAIL CLASS SHARES:
Shares issued........... $ 747,638 76,883 $ 924,629 74,394
Dividends reinvested.... 47,554 4,976 16,890 1,409
Shares redeemed......... (95,449) (9,947) (128,162) (10,325)
------------ ----------- ------------ ----------
Net increase............ $ 699,743 71,912 $ 813,357 65,478
============ =========== ============ ==========
INSTITUTIONAL CLASS
SHARES:
Shares issued........... $ 17,373,908 1,805,630 $ 50,906,651 4,232,718
Dividends reinvested.... 110,962 11,544 1,235,834 104,577
Shares redeemed......... (9,634,113) (1,006,064) (23,658,493) (1,948,216)
------------ ----------- ------------ ----------
Net increase............ $ 7,850,757 811,110 $ 28,483,992 2,389,079
============ =========== ============ ==========
<CAPTION>
OCTOBER 14, 1994
FOR THE YEAR ENDED THROUGH
JULY 31, 1995(A) JULY 31, 1995(B)
-------------------------- ------------------------
<S> <C> <C> <C> <C>
RETAIL CLASS SHARES:
Exchange out to Institu-
tional Class (a)....... $ (2,996,089) (322,160)
Shares issued........... 122,119 12,825 $ 295,585 28,572
Dividends reinvested.... 57,771 6,162 2,751 260
Shares redeemed......... (47,185) (5,005) (1,461) (137)
------------ ----------- ------------ ----------
Net increase............ $ (2,863,384) (308,178) $ 296,875 28,695
============ =========== ============ ==========
INSTITUTIONAL CLASS
SHARES:
Exchange in from Retail
Class (a).............. $ 2,996,089 322,160
Shares issued........... 16,730,048 1,790,888 $ 40,679,124 4,026,875
Dividends reinvested.... 133,019 14,245 545 52
Shares redeemed......... (4,125,990) (439,719) (3,888,112) (372,539)
------------ ----------- ------------ ----------
Net increase............ $ 15,733,166 1,687,574 $ 36,791,557 3,654,388
============ =========== ============ ==========
</TABLE>
- ------
(a) On October 13, 1994, the Trust identified those institutional shareholders
that were part of the Retail class and transferred these shareholders into
the Institutional class effective October 14, 1994.
(b) Period from commencement of operations.
Continued
53
<PAGE>
PACIFIC CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JULY 31, 1996
<TABLE>
<CAPTION>
DIVERSIFIED FIXED TAX-FREE
INCOME FUND SECURITIES FUND
------------------------ ------------------------
AMOUNT SHARES AMOUNT SHARES
------------ ---------- ------------ ----------
FOR THE YEAR ENDED FOR THE YEAR ENDED
JULY 31, 1996 JULY 31, 1996
------------------------ ------------------------
<S> <C> <C> <C> <C>
RETAIL CLASS SHARES:
Shares issued.......... $ 1,199,728 107,934 $ 619,694 58,332
Dividends reinvested... 35,296 3,293 17,516 1,652
Shares redeemed........ (100,216) (9,260) (608,257) (58,984)
------------ ---------- ------------ ----------
Net increase........... $ 1,134,808 101,967 $ 28,953 1,000
============ ========== ============ ==========
INSTITUTIONAL CLASS
SHARES:
Shares issued.......... $198,618,575 18,085,880 $ 28,592,966 2,708,891
Dividends reinvested... 855,870 76,725 3,552,534 331,714
Shares redeemed........ (86,606,689) (7,857,921) (22,221,434) (2,101,754)
------------ ---------- ------------ ----------
Net increase........... $112,867,756 10,304,684 $ 9,924,066 938,851
============ ========== ============ ==========
<CAPTION>
OCTOBER 14, 1994 OCTOBER 14, 1994
THROUGH THROUGH
JULY 31, 1995(A) JULY 31, 1995(A)
------------------------ ------------------------
<S> <C> <C> <C> <C>
RETAIL CLASS SHARES:
Shares issued.......... $ 25,920 2,495 $ 528,482 54,846
Dividends reinvested... 454 44 10,172 1,019
Shares redeemed........ -- -- (25,416) (2,400)
------------ ---------- ------------ ----------
Net increase........... $ 26,374 2,539 $ 513,238 53,465
============ ========== ============ ==========
INSTITUTIONAL CLASS
SHARES:
Shares issued.......... $ 56,842,663 5,601,242 $293,381,164 29,422,035
Dividends reinvested... 1,900 175 6,343 607
Shares redeemed........ (5,647,023) (542,014) (27,552,782) (2,751,293)
------------ ---------- ------------ ----------
Net increase........... $ 51,197,540 5,059,403 $265,834,725 26,671,349
============ ========== ============ ==========
</TABLE>
- ------
(a) Period from commencement of operations.
Continued
54
<PAGE>
PACIFIC CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JULY 31, 1996
<TABLE>
<CAPTION>
TAX-FREE
SHORT INTERMEDIATE NEW ASIA
SECURITIES FUND GROWTH FUND
---------------------- --------------------
AMOUNT SHARES AMOUNT SHARES
----------- --------- ---------- --------
FOR THE YEAR ENDED FOR THE YEAR ENDED
JULY 31, 1996 JULY 31, 1996
---------------------- --------------------
<S> <C> <C> <C> <C>
RETAIL CLASS SHARES:
Shares issued.................. $ 194,515 19,329 $1,841,034 156,856
Dividends reinvested........... 2,672 265 13,647 1,284
Shares redeemed................ (52,273) (5,147) (101,353) (8,592)
----------- --------- ---------- --------
Net increase................... $ 144,914 14,447 $1,753,328 149,548
=========== ========= ========== ========
INSTITUTIONAL CLASS SHARES:
Shares issued.................. $ 7,670,654 754,274 $8,908,328 754,031
Dividends reinvested........... 6,511 642 46,083 4,330
Shares redeemed................ (7,930,532) (783,406) (2,879,942) (252,790)
----------- --------- ---------- --------
Net increase................... $ (253,367) (28,490) $6,074,469 505,571
=========== ========= ========== ========
<CAPTION>
OCTOBER 14, 1994 FEBRUARY 15, 1995
THROUGH THROUGH
JULY 31, 1995(A) JULY 31, 1995(A)
---------------------- --------------------
<S> <C> <C> <C> <C>
RETAIL CLASS SHARES:
Shares issued.................. $ 304,476 30,574 $ 309,769 29,601
Dividends reinvested........... 83 9 -- --
Shares redeemed................ (1,469) (149) (1,510) (140)
----------- --------- ---------- --------
Net increase................... $ 303,090 30,434 $ 308,259 29,461
=========== ========= ========== ========
INSTITUTIONAL CLASS SHARES:
Shares issued.................. $45,831,176 4,585,110 $2,652,270 255,820
Dividends reinvested........... 672 67 -- --
Shares redeemed................ (6,377,898) (641,235) (9,926) (941)
----------- --------- ---------- --------
Net increase................... $39,453,950 3,943,942 $2,642,344 254,879
=========== ========= ========== ========
</TABLE>
- ------
(a) Period from commencement of operations.
6. FEDERAL INCOME TAXES (UNAUDITED)
For federal income tax purposes, the following Funds have capital loss
carryforwards as of July 31, 1996, which are available to offset future
capital gains, if any:
<TABLE>
<CAPTION>
AMOUNT EXPIRES
---------- -------
<S> <C> <C>
U.S. Treasury Securities Fund.............................. $ 288,915 2002
U.S. Treasury Securities Fund.............................. 326,761 2003
U.S. Treasury Securities Fund.............................. 3,238,241 2004
Tax-Free Short Intermediate Securities Fund................ 2,005 2003
Tax-Free Short Intermediate Securities Fund................ 14,953 2004
</TABLE>
Continued
55
<PAGE>
PACIFIC CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JULY 31, 1996
Under current tax law, capital losses realized after October 31 may be
deferred and treated as occurring on the first day of the fiscal year ended
July 31, 1997. Growth Stock Fund and Short Intermediate U.S. Treasury
Securities Fund deferred such losses of $4,333,996 and $98,889,
respectively. Similarly, New Asia Growth Fund deferred foreign currency
losses of $20,918.
The following table presents distributions from long-term capital gains for
the following Funds for the year ended July 31, 1996:
<TABLE>
<S> <C>
Growth Stock Fund.................................................. $2,436,884
Growth and Income Fund............................................. 3,839,756
Diversified Fixed Income Fund...................................... 1,353,238
Tax-Free Securities Fund........................................... 1,539,060
New Asia Growth Fund............................................... 91,852
</TABLE>
Pacific Capital Funds designates the following eligible distribution for the
dividends received deduction for corporations for the Fund's taxable year
ended July 31, 1996.
<TABLE>
<CAPTION>
GROWTH AND
GROWTH STOCK INCOME
FUND FUND
------------ ---------------
<S> <C> <C>
RETAIL CLASS:
Dividend income.................................. $ 2,741,023 $1,436,098
Dividends income per share....................... $0.072 $0.160
INSTITUTIONAL CLASS:
Dividend income.................................. $2,741,023 $1,436,098
Dividend income per share........................ $0.104 $0.184
The Pacific Capital Funds designate the following exempt-interest dividends
for the Fund's taxable year ended July 31, 1996.
<CAPTION>
TAX-FREE
TAX-FREE SHORT
SECURITIES INTERMEDIATE
FUND SECURITIES FUND
------------ ---------------
<S> <C> <C>
RETAIL CLASS:
Exempt-interest distributions.................... $ 39,417 $13,555
Exempt-interest distributions per share.......... $0.530 $0.400
INSTITUTIONAL CLASS:
Exempt-interest distributions.................... $15,243,865 $1,697,987
Exempt-interest distributions per share.......... $0.561 $0.427
</TABLE>
Continued
56
<PAGE>
PACIFIC CAPITAL FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
JULY 31, 1996
Exempt-interest distributions include amounts subject to the Federal
alternative minimum tax of $10,798 and $1,351 for the Tax-Free Securities
Fund and the Tax-Free Short Intermediate Securities Fund, respectively.
The percentage break-down of the exempt-interest income by state for the
Tax-Free Securities Fund the Tax-Free Short Intermediate Securities Fund for
the taxable year ended July 31, 1996 were as follows:
<TABLE>
<CAPTION>
TAX-FREE
TAX-FREE SHORT
SECURITIES INTERMEDIATE
STATE FUND SECURITIES FUND
----- ---------- ---------------
<S> <C> <C>
Alaska............................................. -- % 1.7%
Arizona............................................ 0.2 8.0
California......................................... 3.2 --
Colorado........................................... 0.2 --
Connecticut........................................ 0.4 --
Florida............................................ 8.5 3.1
Georgia............................................ 3 --
Hawaii............................................. 56.8 57.6
Idaho.............................................. 0.1 --
Iowa............................................... 0.1 --
Kansas............................................. 1.8 --
Maine.............................................. 0.7 --
Massachusetts...................................... 2.6 2.9
Michigan........................................... 2.1 --
Minnesota.......................................... 1.1 3.2
Mississippi........................................ -- 0.1
New Jersey......................................... 1.3 2.6
New Mexico......................................... 1.7 0.4
New York........................................... 0.3 --
North Carolina..................................... 1.2 --
Ohio............................................... 0.7 4.7
Oregon............................................. 1.4 2.8
Pennsylvania....................................... 1.1 --
Puerto Rico........................................ -- 2.5
Rhode Island....................................... -- 3.3
South Carolina..................................... 0.9 --
Tennessee.......................................... 3.4 --
Texas.............................................. 2.3 6.0
Virginia........................................... 4.2 --
Wisconsin.......................................... 0.7 1.1
----- -----
Total............................................ 100.0% 100.0%
===== =====
</TABLE>
57
<PAGE>
PACIFIC CAPITAL FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GROWTH STOCK FUND
-------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED NOVEMBER 1,
JULY 31, 1996 JULY 31, 1995 1993 TO
------------------------ ---------------------------- JULY 31,
RETAIL INSTITUTIONAL RETAIL (C) INSTITUTIONAL (B) 1994 (A)
------ ------------- ---------- ----------------- -----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGIN-
NING OF PERIOD......... $11.71 $ 11.71 $ 9.83 $ 9.89 $ 10.00
------ -------- ------ -------- -------
Investment Activities
Net investment income.. 0.07 0.10 0.12 0.11 0.07
Net realized and
unrealized gain (loss)
from investments...... 0.89 0.89 1.87 1.83 (0.18)
------ -------- ------ -------- -------
Total from Investment
Activities........... 0.96 0.99 1.99 1.94 (0.11)
------ -------- ------ -------- -------
Distributions
Net investment income.. (0.07) (0.10) (0.11) (0.12) (0.06)
Net realized gains..... (0.22) (0.22) -- -- --
In excess of net real-
ized gains............ (0.49) (0.49) -- -- --
------ -------- ------ -------- -------
Total Distributions... (0.78) (0.81) (0.11) (0.12) (0.06)
------ -------- ------ -------- -------
NET ASSET VALUE, END OF
PERIOD................. $11.89 $ 11.89 $11.71 $ 11.71 $ 9.83
====== ======== ====== ======== =======
Total Return (excludes
sales charges)......... 8.25%(f) 8.53%(f) 20.43% 20.64%(d) (1.05)%(f)
ANNUALIZED
RATIOS/SUPPLEMENTARY
DATA:
Net assets at end of pe-
riod (000)............. $5,261 $172,565 $3,905 $136,837 $56,121
Ratio of expenses to av-
erage net assets....... 1.34%(e) 1.09%(e) 1.36% 1.13%(e) 1.41%(e)
Ratio of net investment
income to average net
assets................. 0.60%(e) 0.86%(e) 1.12% 1.30%(e) 0.98%(e)
Ratio of expenses to av-
erage net assets*...... 1.88%(e) 1.13%(e) 1.98% 1.21%(e) 2.31%(e)
Ratio of net investment
income to average net
assets*................ 0.06%(e) 0.82%(e) 0.50% 1.23%(e) 0.07%(e)
Portfolio turnover (g).. 61.30% 61.30% 32.40% 32.40% 25.89%
Average Commission Rate
paid (h)............... $0.0895 $0.0895
</TABLE>
- ------
* During the period, certain fees were voluntarily reduced. In addition, the
investment adviser reimbursed expenses. If such voluntary fee reductions
and expense reimbursements had not occurred, the ratios would have been as
indicated.
(a) Period from commencement of operations.
(b) On October 13, 1994, the Trust identified those Institutional shareholders
that were part of the Retail Class and transferred these shareholders into
the Institutional Class at the prevailing net asset value effective
October 14, 1994. The Financial Highlights presented for the Institutional
Class reflects operations and distributions for the period from October
14, 1994 through July 31, 1995.
(c) The Financial Highlights presented for the Retail Class reflects
operations and distributions for the Fund, as a whole, for the period from
August 1, 1994 through October 13, 1994 combined with the operations and
distributions of the Retail Class only for the period from October 14,
1994 through July 31, 1995.
(d) Represents total return for the Fund, as a whole, for the period from
August 1, 1994 through October 13, 1994 plus total return for the
Institutional Class for the period from October 14, 1994 through July 31,
1995.
(e) Annualized.
(f) Not annualized.
(g) Portfolio turnover is calculated on the basis of the Fund, as a whole,
without distinguishing between the classes of shares issued.
(h) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of portfolio shares purchased and
sold for which commissions were charged.
See notes to financial statements.
58
<PAGE>
PACIFIC CAPITAL FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
U.S TREASURY SECURITIES FUND
------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED NOVEMBER 1,
JULY 31, 1996 JULY 31, 1995 1993 TO
------------------------ ---------------------------- JULY 31,
RETAIL INSTITUTIONAL RETAIL (C) INSTITUTIONAL (B) 1994 (A)
------ ------------- ---------- ----------------- -----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGIN-
NING OF PERIOD......... $9.42 $ 9.43 $ 9.04 $ 8.66 $ 10.00
----- ------- ------ ------- -------
Investment Activities
Net investment income.. 0.53 0.59 0.50 0.44 0.31
Net realized and
unrealized gain (loss)
from investments...... (0.20) (0.24) 0.38 0.76 (1.00)
----- ------- ------ ------- -------
Total from Investment
Activities........... 0.33 0.35 0.88 1.20 (0.69)
----- ------- ------ ------- -------
Distributions
Net investment income.. (0.53) (0.55) (0.50) (0.43) (0.27)
In excess of net in-
vestment income....... (0.09) (0.09) -- -- --
----- ------- ------ ------- -------
Total Distributions... (0.62) (0.64) (0.50) (0.43) (0.27)
----- ------- ------ ------- -------
NET ASSET VALUE, END OF
PERIOD................. $9.13 $ 9.14 $ 9.42 $ 9.43 $ 9.04
===== ======= ====== ======= =======
Total Return (excludes
sales charges)......... 3.43%(f) 3.71%(f) 10.18% 10.49%(d) (6.95%)(f)
ANNUALIZED
RATIOS/SUPPLEMENTARY
DATA:
Net assets at end of pe-
riod (000)............. $ 979 $23,248 $1,035 $51,264 $60,125
Ratio of expenses to av-
erage net assets....... 1.20%(e) 0.95%(e) 1.19% 1.02%(e) 1.15%(e)
Ratio of net investment
income to average net
assets................. 5.55%(e) 5.81%(e) 5.57% 5.78%(e) 4.62%(e)
Ratio of expenses to av-
erage net assets*...... 1.74%(e) 0.99%(e) 1.81% 1.09%(e) 2.09%(e)
Ratio of net investment
income to average net
assets*................ 5.01%(e) 5.77%(e) 4.96% 5.71%(e) 3.68%(e)
Portfolio turnover (g).. 15.75% 15.75% 80.98% 80.98% 11.36%
</TABLE>
- ------
* During the period, certain fees were voluntarily reduced. In addition, the
investment adviser reimbursed expenses. If such voluntary fee reductions
and expense reimbursements had not occurred, the ratios would have been as
indicated.
(a) Period from commencement of operations.
(b) On October 13, 1994, the Trust identified those Institutional shareholders
that were part of the Retail Class and transferred these shareholders into
the Institutional Class at the prevailing net asset value effective
October 14, 1994. The Financial Highlights presented for the Institutional
Class reflects operations and distributions for the period from October
14, 1994 through July 31, 1995.
(c) The Financial Highlights presented for the Retail Class reflects
operations and distributions for the Fund, as a whole, for the period from
August 1, 1994 through October 13, 1994 combined with the operations and
distributions of the Retail Class only for the period from October 14,
1994 through July 31, 1995.
(d) Represents total return for the Fund, as a whole, for the period from
August 1, 1994 through October 13, 1994 plus total return for the
Institutional Class for the period from October 14, 1994 through July 31,
1995.
(e) Annualized.
(f) Not annualized.
(g) Portfolio turnover is calculated on the basis of the Fund, as a whole,
without distinguishing between the classes of shares issued.
See notes to financial statements.
59
<PAGE>
PACIFIC CAPITAL FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SHORT INTERMEDIATE U.S. TREASURY SECURITIES FUND
------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED NOVEMBER 1,
JULY 31, 1996 JULY 31, 1995 1993 TO
------------------------ ---------------------------- JULY 31,
RETAIL INSTITUTIONAL RETAIL (C) INSTITUTIONAL (B) 1994 (A)
------ ------------- ---------- ----------------- -----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD................ $ 9.60 $ 9.61 $ 9.52 $ 9.30 $ 10.00
------ ------- ------ ------- -------
Investment Activities
Net investment income.... 0.48 0.53 0.52 0.44 0.24
Net realized and
unrealized gain (loss)
from investments........ (0.11) (0.13) 0.05 0.31 (0.52)
------ ------- ------ ------- -------
Total from Investment
Activities............. 0.37 0.40 0.57 0.75 (0.28)
------ ------- ------ ------- -------
Distributions
Net investment income.... (0.50) (0.53) (0.49) (0.44) (0.20)
In excess of net invest-
ment income............. (0.04) (0.04) -- -- --
In excess of net realized
gains................... (0.02) (0.02) -- -- --
------ ------- ------ ------- -------
Total Distributions..... (0.56) (0.59) (0.49) (0.44) (0.20)
------ ------- ------ ------- -------
NET ASSET VALUE, END OF
PERIOD................... $ 9.41 $ 9.42 $ 9.60 $ 9.61 $ 9.52
====== ======= ====== ======= =======
Total Return (excludes
sales charges)........... 3.90%(f) 4.18%(f) 6.28% 6.57%(d) (2.76%)(f)
ANNUALIZED
RATIOS/SUPPLEMENTARY DA-
TA:
Net assets at end of pe-
riod (000)............... $1,156 $23,545 $489 $16,214 $3,419
Ratio of expenses to aver-
age net assets........... 0.92%(e) 0.67%(e) 0.99% 0.75%(e) 1.00%(e)
Ratio of net investment
income to average net as-
sets..................... 5.14%(e) 5.40%(e) 5.51% 5.84%(e) 3.96%(e)
Ratio of expenses to aver-
age net assets*.......... 1.67%(e) 0.92%(e) 1.78% 0.99%(e) 5.39%(e)
Ratio of net investment
income to average net
assets*.................. 4.39%(e) 5.15%(e) 4.72% 5.61%(e) (0.43%)(e)
Portfolio turnover (g).... 47.17% 47.17% 62.73% 62.73% 0.00%
</TABLE>
- ------
* During the period, certain fees were voluntarily reduced. In addition, the
investment adviser reimbursed expenses. If such voluntary fee reductions
and expense reimbursements had not occurred, the ratios would have been as
indicated.
(a) Period from commencement of operations.
(b) On October 13, 1994, the Trust identified those Institutional shareholders
that were part of the Retail Class and transferred these shareholders into
the Institutional Class at the prevailing net asset value effective
October 14, 1994. The Financial Highlights presented for the Institutional
Class reflects operations and distributions for the period from October
14, 1994 through July 31, 1995.
(c) The Financial Highlights presented for the Retail Class reflects
operations and distributions for the Fund, as a whole, for the period from
August 1, 1994 through October 13, 1994 combined with the operations and
distributions of the Retail Class only for the period from October 14,
1994 through July 31, 1995.
(d) Represents total return for the Fund, as a whole, for the period from
August 1, 1994 through October 13, 1994 plus total return for the
Institutional Class for the period from October 14, 1994 through July 31,
1995.
(e) Annualized.
(f) Not annualized.
(g) Portfolio turnover is calculated on the basis of the Fund, as a whole,
without distinguishing between the classes of shares issued.
See notes to financial statments.
60
<PAGE>
PACIFIC CAPITAL FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GROWTH AND INCOME FUND
---------------------------------------------------
FOR THE YEAR ENDED OCTOBER 14, 1994 TO
JULY 31, 1996 JULY 31, 1995 (A)
------------------------- ------------------------
RETAIL INSTITUTIONAL RETAIL INSTITUTIONAL
------- ------------- ------ -------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD................ $ 11.44 $11.43 $10.00 $10.00
------- ------- ------ -------
Investment Activities
Net investment income.... 0.16 0.17 0.17 0.20
Net realized and
unrealized gain from
investments............. 1.19 1.21 1.44 1.42
------- ------- ------ -------
Total from Investment
Activities............. 1.35 1.38 1.61 1.62
------- ------- ------ -------
Distributions
Net investment income.... (0.15) (0.17) (0.17) (0.19)
In excess of net
investment income....... (0.01) (0.01) -- --
Net realized gains....... (0.31) (0.31) -- --
------- ------- ------ -------
Total Distributions..... (0.47) (0.49) (0.17) (0.19)
------- ------- ------ -------
NET ASSET VALUE, END OF
PERIOD................... $ 12.32 $12.32 $11.44 $11.43
======= ======= ====== =======
Total Return (excludes
sales charges)........... 11.96%(b) 12.29%(b) 16.35%(b) 16.41%(b)
ANNUALIZED
RATIOS/SUPPLEMENTARY
DATA:
Net assets at end of
period (000)............. $ 1,160 $74,427 $328 $41,771
Ratio of expenses to
average net assets....... 1.37%(c) 1.11%(c) 1.40%(c) 1.14%(c)
Ratio of net investment
income to average net
assets................... 1.03%(c) 1.43%(c) 2.08%(c) 2.47%(c)
Ratio of expenses to
average net assets*...... 1.91%(c) 1.15%(c) 1.99%(c) 1.22%(c)
Ratio of net investment
income to average net
assets*.................. 0.49%(c) 1.39%(c) 1.49%(c) 2.39%(c)
Portfolio turnover (d).... 80.83% 80.83% 12.78% 12.78%
Average Commission Rate
paid (e)................. $0.0921 $0.0921
</TABLE>
- ------
* During the period, certain fees were voluntarily reduced.
If such voluntary fee reductions had not occurred, the ratios would have
been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund, as a whole,
without distinguishing between the classes of shares issued.
(e) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of portfolio shares purchased and
sold for which commissions were charged.
See notes to financial statements.
61
<PAGE>
PACIFIC CAPITAL FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
DIVERSIFIED FIXED INCOME FUND
---------------------------------------------------
FOR THE YEAR ENDED OCTOBER 14, 1994 TO
JULY 31, 1996 JULY 31, 1995 (A)
------------------------ ------------------------
RETAIL INSTITUTIONAL RETAIL INSTITUTIONAL
------ ------------- ------ -------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD................. $10.75 $10.84 $10.00 $10.00
------ -------- ------ -------
Investment Activities
Net investment income..... 0.59 0.58 0.49 0.55
Net realized and
unrealized gain (loss)
from investments......... (0.19) (0.16) 0.74 0.78
------ -------- ------ -------
Total from Investment Ac-
tivities................ 0.40 0.42 1.23 1.33
------ -------- ------ -------
Distributions
Net investment income..... (0.58) (0.61) (0.48) (0.49)
In excess of net invest-
ment income.............. (0.02) (0.02) -- --
In excess of net realized
gains.................... (0.10) (0.10) -- --
------ -------- ------ -------
Total Distributions...... (0.70) (0.73) (0.48) (0.49)
------ -------- ------ -------
NET ASSET VALUE, END OF PE-
RIOD...................... $10.45 $10.53 $10.75 $10.84
====== ======== ====== =======
Total Return (excludes
sales charges)............ 3.69%(b) 3.85%(b) 12.66%(b) 13.70%(b)
ANNUALIZED
RATIOS/SUPPLEMENTARY DATA:
Net assets at end of period
(000)..................... $1,093 $161,742 $27 $54,827
Ratio of expenses to aver-
age net assets............ 1.15%(c) 0.88%(c) 1.18%(c) 0.93%(c)
Ratio of net investment in-
come to average net as-
sets...................... 5.31%(c) 5.56%(c) 6.25%(c) 6.71%(c)
Ratio of expenses to aver-
age net assets*........... 1.69%(c) 0.92%(c) 1.77%(c) 1.01%(c)
Ratio of net investment in-
come to average net as-
sets*..................... 4.77%(c) 5.52%(c) 5.66%(c) 6.63%(c)
Portfolio turnover (d)..... 58.86% 58.86% 60.47% 60.47%
</TABLE>
- ------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund, as a whole,
without distinguishing between the classes of shares issued.
See notes to financial statements.
62
<PAGE>
PACIFIC CAPITAL FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
TAX-FREE SECURITIES FUND
---------------------------------------------------
FOR THE YEAR ENDED OCTOBER 14, 1994 TO
JULY 31, 1996 JULY 31, 1995 (A)
------------------------ ------------------------
RETAIL INSTITUTIONAL RETAIL INSTITUTIONAL
------ ------------- ------ -------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD................. $10.53 $10.56 $10.00 $10.00
------ -------- ------ --------
Investment Activities
Net investment income..... 0.50 0.52 0.39 0.42
Net realized and
unrealized gain from
investments.............. 0.07 0.07 0.50 0.51
------ -------- ------ --------
Total from Investment
Activities.............. 0.57 0.59 0.89 0.93
------ -------- ------ --------
Distributions
Net investment income..... (0.49) (0.52) (0.36) (0.37)
In excess of net
investment income........ (0.04) (0.04) -- --
Net realized gains........ (0.09) (0.09) -- --
In excess of net realized
gains.................... (0.04) (0.04) -- --
------ -------- ------ --------
Total Distributions...... (0.66) (0.69) (0.36) (0.37)
------ -------- ------ --------
NET ASSET VALUE, END OF
PERIOD.................... $10.44 $10.46 $10.53 $10.56
====== ======== ====== ========
Total Return (excludes
sales charges)............ 5.54%(b) 5.73%(b) 9.06%(b) 9.54%(b)
ANNUALIZED
RATIOS/SUPPLEMENTARY DATA:
Net assets at end of period
(000)..................... $569 $288,934 $563 $281,646
Ratio of expenses to
average net assets........ 1.14%(c) 0.89%(c) 1.15%(c) 0.89%(c)
Ratio of net investment
income to average net
assets.................... 4.66%(c) 4.92%(c) 4.93%(c) 5.16%(c)
Ratio of expenses to
average net assets*....... 1.68%(c) 0.93%(c) 1.74%(c) 0.98%(c)
Ratio of net investment
income to average net
assets*................... 4.12%(c) 4.88%(c) 4.34%(c) 5.07%(c)
Portfolio turnover (d)..... 24.78% 24.78% 49.17% 49.17%
</TABLE>
- ------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund, as a whole,
without distinguishing between the classes of shares issued.
See notes to financial statements.
63
<PAGE>
PACIFIC CAPITAL FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
TAX-FREE SHORT INTERMEDIATE SECURITIES FUND
--------------------------------------------------
FOR THE YEAR ENDED OCTOBER 14, 1994 TO
JULY 31, 1996 JULY 31, 1995 (A)
------------------------ ------------------------
RETAIL INSTITUTIONAL RETAIL INSTITUTIONAL
------ ------------- ------ -------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD................. $10.11 $10.14 $10.00 $10.00
------ ------- ------ -------
Investment Activities
Net investment income..... 0.37 0.40 0.30 0.32
Net realized and
unrealized gain (loss)
from investments......... (0.03) (0.03) 0.08 0.11
------ ------- ------ -------
Total from Investment
Activities.............. 0.34 0.37 0.38 0.43
------ ------- ------ -------
Distributions
Net investment income..... (0.37) (0.40) (0.27) (0.29)
In excess of net
investment income........ (0.03) (0.03) -- --
------ ------- ------ -------
Total Distributions...... (0.40) (0.43) (0.27) (0.29)
------ ------- ------ -------
NET ASSET VALUE, END OF
PERIOD.................... $10.05 $10.08 $10.11 $10.14
====== ======= ====== =======
Total Return (excludes
sales charges)............ 3.41%(b) 3.67%(b) 3.90%(b) 4.36%(b)
ANNUALIZED
RATIOS/SUPPLEMENTARY DATA:
Net assets at end of period
(000)..................... $451 $39,472 $308 $39,993
Ratio of expenses to
average net assets........ 1.08%(c) 0.83%(c) 1.05%(c) 0.85%(c)
Ratio of net investment
income to average net
assets.................... 3.64%(c) 3.90%(c) 3.82%(c) 4.03%(c)
Ratio of expenses to
average net assets*....... 1.63%(c) 0.88%(c) 1.64%(c) 0.94%(c)
Ratio of net investment
income to average net
assets*................... 3.09%(c) 3.85%(c) 3.23%(c) 3.94%(c)
Portfolio turnover (d)..... 54.70% 54.70% 89.98% 89.98%
</TABLE>
- ------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund, as a whole,
without distinguishing between the classes of shares issued.
See notes to financial statements.
64
<PAGE>
PACIFIC CAPITAL FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
NEW ASIA GROWTH FUND
------------------------------------------------------
FOR THE YEAR ENDED FEBRUARY 15, 1995 TO
JANUARY 31, 1996 JULY 31, 1995(A)
-------------------------- -------------------------
RETAIL INSTITUTIONAL RETAIL INSTITUTIONAL
------- ------------- ------ -------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGIN-
NING OF PERIOD......... $ 11.21 $11.22 $10.00 $10.00
------- ------- ------ ------
Investment Activities
Net investment income
(loss)................ (0.02) (0.01) 0.02 0.04
Net realized and
unrealized gain from
investments........... 0.20 0.22 1.19 1.18
------- ------- ------ ------
Total from Investment
Activities........... 0.18 0.21 1.21 1.22
------- ------- ------ ------
Distributions
In excess of net in-
vestment income....... (0.02) (0.03) -- --
Net realized gains..... (0.26) (0.26) -- --
------- ------- ------ ------
Total Distributions... (0.28) (0.29) -- --
------- ------- ------ ------
NET ASSET VALUE, END OF
PERIOD................. $ 11.11 $11.14 $11.21 $11.22
======= ======= ====== ======
Total Return (excludes
sales charges)......... 1.71%(b) 1.99%(b) 12.10%(b) 12.20%(b)
ANNUALIZED
RATIOS/SUPPLEMENTARY
DATA:
Net assets at end of pe-
riod (000)............. $ 1,990 $8,469 $330 $2,861
Ratio of expenses to av-
erage net assets....... 2.22%(c) 1.98%(c) 2.24%(c) 1.97%(c)
Ratio of net investment
income (loss) to aver-
age net assets......... (0.28%)(c) (0.02%)(c) 0.80%(c) 1.18%(c)
Ratio of expenses to av-
erage net assets*...... 3.58%(c) 2.84%(c) 3.51%(c) 2.74%(c)
Ratio of net investment
income (loss) to aver-
age net assets*........ (1.64%)(c) (0.88%)(c) (0.47%)(c) 0.42%(c)
Portfolio turnover (d).. 86.53% 86.53% 55.62% 55.62%
Average Commission Rate
paid (e) $0.0069 $0.0069
</TABLE>
- ------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund, as a whole,
without distinguishing between the classes of shares issued.
(e) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of portfolio shares purchased and
sold for which commissions were charged.
See notes to financial statements.
65
<PAGE>
Investment Adviser
Hawaiian Trust Company
111 S. King Street
Honolulu, Hawaii 96513
Administrator and Distributor
BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio 43219
Legal Counsel
Shereff, Friedman, Hoffman & Goodman, LLP
919 Third Avenue
New York, New York 10022
Auditors
Ernst & Young LLP
One Columbus, Suite 2400
Columbus, Ohio 43215
Transfer Agent
Administrative Data Management Corp.
10 Woodbridge Center Drive
Woodbridge, New Jersey 07095
For more complete information on the Pacific Capital Funds, including fees,
expenses and sales charges, please call 1-800-258-9232 for a prospectus, which
you should read carefully before you invest or send money. The Pacific Capital
Funds are distributed by BISYS Fund Services.
