<PAGE>
[LOGO] Alleghany Funds
Annual Report
ALLEGHANY/BLAIRLOGIE EMERGING MARKETS FUND
ALLEGHANY/BLAIRLOGIE INTERNATIONAL DEVELOPED FUND
APRIL 30, 1999
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Letter from the President...................................... 1
Management Discussion & Analysis:
Alleghany/Blairlogie Emerging Markets Fund.................. 2
Alleghany/Blairlogie International Developed Fund........... 3
Summary Information............................................ 4
Schedule of Investments:
Alleghany/Blairlogie Emerging Markets Fund.................. 5
Alleghany/Blairlogie International Developed Fund........... 8
Statement of Assets and Liabilities............................ 12
Statement of Operations........................................ 13
Statement of Changes in Net Assets............................. 14
Financial Highlights........................................... 16
Notes to Financial Statements.................................. 20
Independent Auditors' Report................................... 24
</TABLE>
ALLEGHANY FUNDS GOES INTERNATIONAL
We are pleased to announce two new funds: Alleghany/Blairlogie Emerging Markets
Fund and Alleghany/Blairlogie International Developed Fund, previously available
as the PIMCOEmerging Markets Fund and PIMCO International Developed Fund.
Blairlogie Capital Management, based in Edinburgh, Scotland, specializes in
managing international and emerging markets portfolios. The firm is led by a
seasoned team of international specialists and currently has more than $900
million under management. More importantly, Blairlogie adheres to the same
values as Alleghany Funds' other three investment managers: a commitment to
discipline, risk managment, expense control, and seasoned management.
BLAIRLOGIE INVESTMENT STRATEGY.
Blairlogie uses a top-down (country allocation) and bottom-up (security
selection) active portfolio management process in seeking to outperform while
controlling risk. The firm emphasizes large-cap equities and does not utilize
currency hedges. Individual stock selection is implemented by country
specialists who provide in-depth quality, valuation, and liquidity analysis.
FUND MANAGER.
James Smith is portfolio manager of Alleghany/Blairlogie Emerging Markets Fund
and Alleghany/Blairlogie International Developed Fund. He is Chief Investment
Officer at Blairlogie, responsible for setting investment policy, determining
asset allocation, and managing the investment team. Mr. Smith has more than 20
years of investment management experience; he was previously with Murray
Johnstone International. Mr. Smith holds a BSc in Economics from London
University and an MBA from Edinburgh University. He is an Associate of the
Institute of Investment Management and Research and a Fellow of The Chartered
Insurance Institute.
<PAGE>
[LOGO] ALLEGHANY FUNDS
April 30, 1999
Dear Shareowner,
With this annual report, we would once again like to welcome investors in
Alleghany/Blairlogie Emerging Markets Fund and Alleghany/Blairlogie
International Developed Fund to the Alleghany family of funds. We are excited
about adding the outstanding investment managers from Blairlogie to Alleghany
Funds .
A strong case can be made that investing globally potentially enhances
return and reduces volatility in a portfolio. Yet investing abroad obviously has
risks, and that's why we've chosen Blairlogie's international investment
management team to complement our domestic funds. They've posted a strong
history of managing international investments with a disciplined, consistent
institutional style--attributes very much in keeping with the rest of Alleghany
Funds. You will find specific, detailed historical performance information on
both funds later in this report.
These are certainly interesting times for international investors. For the
past few years, international stocks have not performed as well as their
advocates have hoped. But one thing we have learned over the years is that
markets recognize opportunity, and as recent crises overseas begin to recede, we
could be on the cusp of an exciting, rewarding period in international
investing.
We are pleased to offer Blairlogie's experienced international investment
management, providing careful attention to country allocation and individual
stock research. Thank you for your investment in Alleghany/Blairlogie Funds.
Sincerely,
/s/ Kenneth C. Anderson
Kenneth C. Anderson
President
Alleghany Funds are no-load mutual funds distributed by First Data Distributors,
Inc., Westborough, MA 01581. This is not an offer to sell or a solicitation of
an offer to buy shares of any of the Funds described. Investment return and
[Bprincipal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost. This
information must be accompanied or preceded by a prospectus.
Shareholder Services 800 992 8151 www.alleghanyfunds.com
The Chicago Trust Company.Montag & Caldwell.Veredus Asset Management.Blairlogie
Capital Management
<PAGE>
Alleghany Funds
Alleghany/Blairlogie Emerging Markets Fund
Management Discussion & Analysis April 30, 1999
- --------------------------------------------------------------------------------
Emerging markets was the place to invest during the first four months of 1999,
with the MSCI Emerging Market Index returning 26.3% and the Alleghany/Blairlogie
Emerging Markets Fund returning 23.3%. Far East stocks, for which the Fund was
underweighted, did well for the period.
India, Taiwan and Korea were all strong movers. India did well for a number of
reasons: the market was oversold at the end of 1998, sanctions related to
nuclear testing were lifted by the United States and certain taxes on mutual
funds were abolished.
Turkey's favorable politics caused a rise and Mexico benefited from U.S.
economic strength and market contagion. Foreign direct investment and job
creation are energetic in Mexico and earnings, outside the banking sector, are
strong. The South African market also rose. The main trigger there was a long-
expected fall in interest rates, which is likely to be a long-term trend.
We believe Asia's markets should continue to grow stronger. We bought stocks in
Korea and Taiwan, where economic recovery is underway. We sold in Brazil, where
the strong market after the devaluation of the Real provided a trimming
opportunity. Going forward, we expect to underweight the buoyant market in Latin
America.
We sold in Poland because of the model downgrade and the war in Serbia. We plan
to keep a close watch on emerging European countries. The Balkan conflict in the
region bodes badly for these countries. For example, Hungary is now part of NATO
and Russian convoys need to pass through to get supplies to Serbia. Higher
energy and commodity prices should benefit Russia, but on balance the tensions
in the regions cannot be good for the markets if they persist. Conversely, a
resolution would be excellent for the region, as billions of dollars of aid find
their way into rebuilding the Balkan infrastructure.
Emerging Markets Fund - Class N
<TABLE>
<CAPTION>
DATE CLASS N MSCI Emerging Markets Free Index
<S> <C> <C>
10/20/94 $10,000.00 $10,000
01/31/95 $7,120.61 $ 7,791
04/30/95 $7,002.45 $ 7,982
07/31/95 $7,481.30 $ 8,621
10/31/95 $7,019.52 $ 8,057
01/31/96 $7,754.14 $ 8,852
04/30/96 $7,891.94 $ 9,130
07/31/96 $7,246.80 $ 8,521 Class N
10/31/96 $7,290.65 $ 8,580 ____ MSCI Emerging Markets
01/31/97 $8,036.00 $ 9,361 ==== Free Index
04/30/97 $8,042.26 $ 9,522
07/31/97 $8,737.50 $10,473
10/31/97 $7,040.11 $ 7,852
01/31/98 $6,795.84 $ 7,140
04/30/98 $7,729.09 $ 8,138
07/31/98 $6,614.20 $ 6,485
10/31/98 $5,079.65 $ 5,419
01/31/99 $5,179.87 $ 5,691
04/30/99 $6,527.76 $ 7,308
</TABLE>
Emerging Markets Fund - Class I
<TABLE>
<CAPTION>
DATE CLASS I MSCI Emerging Markets Free
<S> <C> <C>
06/01/93 $10,000.00 $10,000
09/30/93 $11,710.00 $11,880
12/31/93 $15,646.48 $15,753
03/31/94 $14,942.34 $14,329
06/30/94 $14,455.65 $14,123
09/30/94 $17,562.16 $17,054
12/31/94 $14,429.39 $14,601
03/31/95 $11,700.68 $12,794
06/30/95 $12,944.97 $14,120
09/30/95 $12,846.74 $14,030
12/31/95 $12,620.55 $13,840
03/31/96 $13,457.52 $14,702
06/30/96 $13,942.08 $15,317 Class I
09/30/96 $13,347.39 $14,762 ____ MSCI Emerging Markets
12/31/96 $13,229.33 $14,675 ==== Free Index
03/31/97 $14,369.60 $15,918
06/30/97 $15,454.52 $17,280
09/30/97 $14,369.60 $15,731
12/31/97 $12,963.64 $12,975
03/31/98 $13,572.52 $13,778
06/30/98 $11,269.84 $10,527
09/30/98 $ 8,424.71 $ 8,210
12/31/98 $ 9,413.47 $ 9,687
03/31/99 $10,314.76 $10,892
04/30/99 $11,607.73 $12,239
</TABLE>
- ------------------
Past performance is not an indication of future results. These line graphs
assume the investment of $10,000 on the commencement dates compared to the Mogan
Stanley Capital International (MSCI) Emerging Markets Free Index, an unmanaged
index.
2
<PAGE>
Alleghany Funds
Alleghany/Blairlogie International Developed Fund
Management Discussion & Analysis April 30, 1999
- --------------------------------------------------------------------------------
For the four months of 1999, the Alleghany/Blairlogie International Developed
Fund returned -1.8%, compared with the MSCI EAFE Index, which returned 5.6%. The
Euro, originally touted as a currency powerful enough to rival the U.S dollar,
instead sagged against it. This influenced dollar-translated returns.
Unfortunately, the Fund was overweighted in Europe and underweighted in Japan,
which turned out to be the best performer for the quarter.
Japan was a pleasant surprise to most of its investors. It enjoyed a recovery
from its low base, initiated some banking reforms and reaped the benefits of
several major company reorganizations.
We added to our buys in Australia and Norway, which were both beneficiaries of
stronger commodity prices. We sold in Germany and Italy, where we believe
economic sluggishness may continue.
We continually review economic changes in each country. While sentiment in Japan
is healthier, we think that huge structural problems remain. Major Japanese
banks continue to struggle with bad real estate loans, with less than 25%
recovered in 1998, and property values are 75% below their 1991 peaks. But if
the market is an accurate discounter, we believe a more tangible economic
recovery should occur in the early 2000s.
War in Serbia has depressed Europe, but a resolution to the war could boost it.
Europe looks cheap right now, but its lack of leadership and economic confidence
is likely to hold markets back for at least a couple of quarters. On the plus
side, some monster corporate takeovers are in the pipeline; they may help keep
markets buoyant.
Dollar strength should eventually feed into higher earnings for Europe's
multinationals so we remain optimistic about some markets, notably France and
Spain. On a micro level, there is large-scale rationalizing, with multi-billion
dollar takeovers announced in banking, telecoms, autos and energy in France, the
United Kingdom, Germany and Italy. Such corporate activity, and an overdue
respect for shareholder value, should help to keep markets buoyant.
Another opportunity and concern in continental Europe is the status of pension
funding. By the early 2000s, annual unfunded pension liabilities in France,
Germany, Spain and Italy will likely exceed Gross National Product. Governments
should have little choice but to provide incentives to encourage tax-advantaged
savings plans. This should start to make an impact on equity markets and we
believe it should lead to long-term sustained cash flows in to European
equities.
International Developed Fund - Class N
DATE CLASS N MSCI EAFE Index
11/30/94 $ 10,000.00 $ 10,000
02/28/95 $ 9,780.81 $ 9,648
05/31/95 $ 10,606.70 $ 10,509
08/31/95 $ 11,098.53 $ 10,549
11/30/95 $ 11,352.26 $ 10,757
02/29/96 $ 11,798.98 $ 11,274
05/31/96 $ 12,251.65 $ 11,630
08/31/96 $ 11,858.02 $ 11,379
11/30/96 $ 12,458.31 $ 12,022
02/28/97 $ 12,156.70 $ 11,639
05/31/97 $ 12,922.97 $ 12,507
08/31/97 $ 12,550.19 $ 12,409
11/30/97 $ 12,363.80 $ 11,974
02/28/98 $ 14,015.33 $ 13,441
05/31/98 $ 15,410.33 $ 13,897
08/31/98 $ 13,742.87 $ 12,392
11/30/98 $ 14,941.70 $ 13,943
02/28/99 $ 14,896.08 $ 14,106
04/30/99 $ 15,751.13 $ 15,290
__B___ Class N
===== MSCI EAFE Index
International Developed Fund - Class I
DATE CLASS I MSCI EAFE Index
06/08/93 $ 10,000.00 $ 10,000
09/30/93 $ 10,480.00 $ 10,497
12/31/93 $ 10,597.21 $ 10,588
03/31/94 $ 11,051.37 $ 10,958
05/30/94 $ 11,646.83 $ 11,518
09/30/94 $ 11,626.85 $ 11,529
12/31/94 $ 11,344.09 $ 11,411
03/31/95 $ 11,722.93 $ 11,624
06/30/95 $ 11,828.17 $ 11,708
09/30/95 $ 12,796.31 $ 12,196
12/31/95 $ 13,287.52 $ 12,690
03/31/96 $ 13,701.01 $ 13,057
06/30/96 $ 14,013.92 $ 13,263
09/30/96 $ 13,835.11 $ 13,247
12/31/96 $ 14,061.82 $ 13,457
03/31/97 $ 13,873.70 $ 13,247
06/30/97 $ 15,425.68 $ 14,988
09/30/97 $ 15,143.50 $ 14,850
12/31/97 $ 14,331.65 $ 13,697
03/31/98 $ 17,048.31 $ 15,711
06/30/98 $ 17,845.69 $ 15,876
09/30/98 $ 15,016.97 $ 13,821
12/31/98 $ 17,758.95 $ 18,435
03/31/99 $ 17,683.06 $ 16,664
04/30/99 $ 18,062.84 $ 17,339
_____ Class I
===== MSCI EAFE Index
________________________
Past performance is not an indication of future results. These line graphs
assume the investment of $10,000 on the commencement dates compared to the Mogan
Stanley Capital International (MSCI) EAFE (Europe, Australia, Far East) Index,
an unmanaged index.
3
<PAGE>
Alleghany Funds -- Summary Information
Performance for the Ten Months Ended April 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Alleghany/Blairlogie Emerging Markets Fund
Class N Class I
<S> <C> <C>
Total Returns:
Period 07/01/98 - 04/30/99 2.76% 2.98%
1 Year (15.56)% (15.39)%
Three Year Average Annual (6.14)% (5.86)%
Five Year Average Annual N/A (4.38)%
Average Annual Since Inception (8.99)% 2.55%
Value of $10,000 $6,527 $11,606
from Inception Date 10/20/94 06/01/93
<CAPTION>
<S> <C> <C>
Top Ten Holdings as of April 30, 1999
Company and Telefonos de Mexico SA, SP ADR 4.44%
% of Total Net Maggav Tavkozlesi, Rights 2.64%
Assets Telefonica del Peru SAA, Class B 2.48%
Taiwan Fund, Inc. 2.31%
Korea Fund 2.16%
Korea Electric Power Corp. 1.94%
Telecomunicacoes Brasileiras SA, Pfd Block, SP ADR 1.79%
Turkiye Is Bankasi, Class C 1.75%
YPF SA, SP ADR 1.73%
Compania Anonima Nacional Telefonos de Venuela, ADR 1.59%
</TABLE>
<TABLE>
<CAPTION>
Alleghany/Blairlogie International Developed Fund
Class N Class I
<S> <C> <C> <C>
Total Returns:
Period 07/01/98 - 04/30/99 1.05% 1.31%
1 Year 4.11% 4.52%
Three Year Average Annual 7.96% 8.29%
Five Year Average Annual N/A 9.42%
Average Annual Since Inception 10.83% 10.57%
Value of $10,000 $15,749 $18,080
from Inception Date 11/30/94 06/08/93
Top Ten Holdings as of April 30, 1999
Company and Nokia Oyj 2.91%
% of Total Net Webs Japan Index Series 2.59%
Assets Royal Dutch Petroleum Co. 1.55%
France Telecom SA 1.53%
Allied Irish Banks Plc 1.45%
EDP-Electricidade de Portugal 1.42%
ENI SpA 1.40%
Telefonica SA 1.34%
Total SA, Class B 1.31%
Lloyds TSB Group Plc 1.30%
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Alleghany Funds
Alleghany/Blairlogie Emerging Markets Fund
Schedule of Investments April 30, 1999
- --------------------------------------------------------------------------------
Market
Shares Value
------ -----
<S> <C>
COMMON STOCKS - 92.85%
Argentina - 5.56%
29,750 Astra Cia Argentina de Petroleo SA.................. $ 42,560
11,089 Banco de Galicia y Buenos Aires SA, Class B......... 64,342
6,120 Banco Frances SA.................................... 52,042
929 IRSA Inversiones y Representaciones SA,
SP GDR............................................. 31,122
3,876 Molinos Rio de la Plata SA.......................... 6,669
10,712 Perez Companc SA, SP ADR *.......................... 133,307
11,160 Renault Argentina SA................................ 17,082
1,488 Siderar S.A.I.C., Class A........................... 4,570
37,216 Siderca SA.......................................... 62,920
7,133 Telefonica de Argentina, SP ADR..................... 266,596
23,900 Transportadora de Gas del Sur SA,
Class B............................................ 45,668
7,850 YPF SA, SP ADR...................................... 329,700
-----------
1,056,578
-----------
Brazil - 7.39%
23,400 Aracruz Celulose SA, Class B........................ 46,518
14,494,507 Banco Bradesco SA................................... 76,838
217,700 Banco Itau SA....................................... 114,752
8,881,620 Centrais Electricas Brasileiras SA, Class B......... 187,263
80,000 Companhia Cervejaria Brahma......................... 37,880
2,532,245 Companhia Energetica de Minas Geraus................ 61,018
547,900 Companhia Paulista de Forca e Luz................... 36,306
28,980 Companhia Paulista de Forca e Luz,
Ord PRF............................................. 1,850
3,322,000 Companhia Siderurgica Nacional...................... 71,844
29,662 Companhia Vale do Rio Doce,
Bonus Shares........................................ 0
6,562 Companhia Vale do Rio Doce, Class A *............... 124,303
721,600 Petroleo Brasliero SA............................... 116,933
6,200 Souza Cruz SA....................................... 41,271
1,634,000 Telecomunicacoes Brasileiras........................ 84,653
1,634,000 Telecomunicacoes Brasileiras SA *................... 59
3,730 Telecomunicacoes Brasileiras SA,
Pfd Block, SP ADR................................... 340,129
3,730 Telecomunicacoes Brasileiras SA,
SP ADR *............................................ 291
22,219 Usinas Siderurgicas de Minas Gerais,
Class A *........................................... 62,775
-----------
1,404,683
-----------
Chile - 5.97%
7,900 Banco Santander Chile, SP ADR....................... 136,275
9,351 Cia. Telecomunicaciones de Chile SA,
SP ADR.............................................. 247,217
3,100 Companhia Cerveceria Unidas SA,
SP ADR.............................................. 76,144
Chile (continued)
16,950 Empresa Nacional de Electricidad SA,
SP ADR.............................................. $ 237,300
5,502 Enersis SA, SP ADR.................................. 105,570
5,328 Gener SA, SP ADR.................................... 106,560
4,957 Madeco SA, SP ADR................................... 45,852
5,290 Maderas y Sinteticos SA, SP ADR..................... 50,942
3,330 Sociedad Quimica y Minera de Chile SA,
SP ADR.............................................. 122,794
192 Sociedad Quimica y Minera de Chile SA,
SP ADR, Class A..................................... 6,708
-----------
1,135,362
-----------
Hungary - 5.16%
1,210 Danubius Hotel and Spa, Rights *.................... 20,105
1,975 Gedeon Richter, Rights *............................ 72,555
89,850 Maggav Tavkozlesi, Rights........................... 500,810
10,430 MOL Magyar Olaj-es Gazipari, Rights................. 232,320
3,340 OTP Bank, Rights.................................... 140,895
460 Pick Szeged, Rights................................. 14,588
-----------
981,273
-----------
India - 2.68%
2,500 Bajaj Auto Ltd., SP GDR............................. 40,950
2,700 BSES Ltd., GDR...................................... 26,392
3,380 EIH Ltd., SP GDR.................................... 16,225
2,800 Gujarat Ambuja Cement Ltd., SP GDR.................. 21,000
4,610 Hindalco Industries Ltd., SP GDR.................... 66,845
3,530 Indian Hotels Co., Ltd, SP GDR...................... 22,062
8,225 Indian Rayon & Industries Ltd., SP GDR.............. 13,406
1,780 Larsen & Tourbo Ltd., GDR........................... 16,465
6,900 Mahanagar Telephone Nigam Ltd., GDR................. 71,760
7,200 Reliance Industries Ltd., GDR....................... 54,000
5,100 State Bank of India, GDR............................ 45,390
9,724 Tata Engineering & Locomotive Co., Ltd.
SP GDR.............................................. 31,895
6,900 Videsh Sanchar Nigam Ltd., GDR...................... 82,800
-----------
509,190
-----------
Israel - 7.34%
9,200 Agis Industries Ltd. *.............................. 52,907
76,600 Bank Hapoalim....................................... 183,022
38,600 Bank Leumi Le-Israel................................ 66,128
40,700 Bezeq Israeli Telecommunications
Corp. Ltd. *........................................ 158,353
5,920 Blue Square Chain Investments and
Properties Ltd. *................................... 87,888
5,170 ECI Telecom Ltd., ADR............................... 190,645
2,550 Elite Industries Ltd................................ 97,988
3,390 Formula Systems Ltd. *.............................. 85,648
</TABLE>
See accompanying Notes to Financial Statements.
5
<PAGE>
Alleghany Funds
Alleghany/Blairlogie Emerging Markets Fund
Schedule of Investments - continued April 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Value
------ ------
<S> <C>
Israel (continued)
72,300 Israel Chemicals Ltd...................... $ 86,808
1,220 Koor Industries Ltd....................... 132,098
14,000 Supersol Ltd.............................. 37,898
4,650 Teva Pharmaceuticals Industries Ltd....... 215,605
-----------
1,394,988
-----------
Mexico - 13.32%
30,300 Alfa SA de CV............................. 119,140
29,223 Cemex SA de CV............................ 135,397
116,137 Cifra SA de CV, Series V *................ 220,748
37,700 Desc SA de CV, Series B................... 48,070
3,100 Fomento Economico Mexicano, SP ADR........ 112,764
26,400 Grupo Carso SA de CV, Series A1 *......... 127,300
36,107 Grupo Financiero Banamex Accival,
SA de CV, Class L *....................... 85,496
38,964 Grupo Industrial Bimbo SA de CV,
Series A.................................. 82,384
28,910 Grupo Mexico SA, Series B................. 112,115
91,900 Grupo Modelo SA de CV, Series C........... 240,904
3,240 Grupo Televisa SA, SP GDR *............... 132,840
12,100 Industrias Penoles SA *................... 40,790
26,500 Kimberley-Clark de Mexico SA, Class A..... 102,770
15,500 Savia SA de CV *.......................... 97,984
11,150 Telefonos de Mexico SA, SP ADR............ 844,614
4,000 TV Azteca SA de CV, SP ADR *.............. 28,000
-----------
2,531,316
-----------
Peru - 5.17%
25,200 Banco Wiese, SP ADR *..................... 50,400
12,643 Cementos Lima SA.......................... 17,623
10,947 Compania de Minas Buenaventura,
Class A.................................. 82,037
1,574 Compania de Minas Buenaventura,
Class B................................... 12,268
16,816 Credicorp Ltd............................. 170,263
21,738 Ferreyros SA.............................. 15,183
64,100 Luz del Sur SAA, Class B.................. 37,277
3,868 Minsur SA *............................... 7,664
2,200 Southern Peru Ltd......................... 8,045
316,238 Telefonica del Peru SAA, Class B.......... 472,081
256,283 Union de Cervecerias Backus y Johnston SAA 109,857
-----------
982,698
-----------
Poland - 4.34%
8,000 Bank Handlowy w Warszawie................. 97,093
530 Bank Przemyslowo-Handlowy SA.............. 27,070
2,715 Bank Rozwoju Eksportu SA.................. 60,410
1,310 Bank Slaski SA w Katowicach............... 59,290
27,500 BIG Bank Gdanski SA....................... 48,325
2,130 Debica SA................................. 26,120
8,471 Elektrim Spolka Akcyjna SA................ 100,666
1,180 Softbank SA............................... 36,250
5,240 Stomil Olsztyn SA......................... $ 24,510
45,500 Telekomunikacja Polska SA, GDR *.......... 283,465
11,158 Wielkopolski Bank Kredytowy SA............ 60,938
-----------
824,137
-----------
Portugal - 2.56%
1,770 Banco Comercial Portugues SA, Class R..... 49,964
1,166 Banco Espirito Santo e Comercial de
Lisboa SA................................. 28,043
900 BPI-SGPS SA............................... 24,273
500 Brisa-Auto Estradas de Portugal SA........ 21,205
955 Cimpor-Cimentos de Portugal SGPS SA....... 26,262
800 Companhia de Seguros Mundial
Confianca SA *............................ 22,592
6,600 EDP-Electricidade de Portugal SA.......... 124,252
800 Investec-Consultadoria Internacional SA... 26,560
715 Jeronimo Martins, SGPS SA................. 23,557
321 Jeronimo Martins, SGPS SA, New *.......... 10,287
2,440 Portugal Telecom SA....................... 101,808
780 Sonae Investimentos-Sociedade Gestora de
Participacoes Sociais SA.................. 27,875
-----------
486,678
-----------
South Africa - 5.65%
6,780 ABSA Group Ltd............................ 35,713
1,050 Anglo American Corp. of South Africa Ltd.. 54,340
4,200 Anglo American Platinum Corp. Ltd......... 76,740
1,140 AngloGold Ltd............................. 53,669
12,170 Barlow Ltd................................ 73,120
15,430 C.G.Smith Ltd............................. 39,622
5,820 De Beers.................................. 145,619
5,100 Driefontein Consolidated Ltd.............. 20,609
452 Edgars Stores Ltd......................... 2,306
34,400 FirstRand Ltd............................. 37,939
4,450 Liberty Life Association of Africa Ltd.... 64,241
7,000 Naspers Ltd., Class N..................... 36,872
5,110 Nedcor Ltd., GDR, Class S................. 113,059
16,340 Rembrandt Group Ltd....................... 124,399
8,800 Sasol Ltd................................. 62,288
11,680 South African Breweries Plc *............. 96,708
4,300 Woolworths Holdings Ltd., GDR............. 36,550
-----------
1,073,794
-----------
South Korea - 8.64%
2,300 Hyundai Motor Co. Ltd. *.................. 38,414
1,549 Hyundia Motor Co.Ltd., Rights............. 8,670
7,000 Kookmin Bank.............................. 95,414
12,800 Korea Electric Power Corp................. 368,330
32,800 Korea Fund *.............................. 410,000
2,500 Korea Telecom Corp........................ 109,382
6,483 L.G. Chemical Ltd......................... 111,823
1,700 Samsung Display Devices Co................ 87,253
</TABLE>
See accompanying Notes to Financial Statements.
6
<PAGE>
Alleghany Funds
Alleghany/Blairlogie Emerging Markets Fund
Schedule of Investments - continued April 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Value
------ ------
<S> <C>
South Korea (continued)
2,609 Samsung Electronics........................... $ 200,643
2,200 Shinsegae Department Store Co................. 75,894
6,500 SK Corp....................................... 136,727
-----------
1,642,550
-----------
Taiwan - 9.00%
8,000 Advanced Semiconductor Engineering, Inc.,
GDR *......................................... 128,000
12,500 Asia Cement Corp., SP GDR..................... 115,625
21,500 Asustek Computer, Inc., GDR *................. 290,788
9,500 China Steel Corp., SP GDR *................... 150,338
18,500 Evergreen Marine Corp., SP GDR................ 275,650
14,000 Standard Foods Taiwan Ltd., GDR *............. 100,800
27,000 Taiwan Fund, Inc. *........................... 438,750
20,386 Winbond Electronic Corp., GDR *............... 209,975
-----------
1,709,926
-----------
Thailand - 1.45%
27,500 Bangkok Bank Public Co. Ltd. *................ 82,278
8,900 Electricity Generating Public Co. Ltd. *...... 19,792
5,300 PTT Exploration & Production Public Co. Ltd. * 48,857
2,000 Siam Cement Public Co. Ltd. *................. 59,083
23,500 Thai Farmers Bank Public Co. Ltd. *........... 65,242
-----------
275,252
-----------
Turkey - 6.45%
1,231,455 Adana Cimento Sanayii Turk Anomin Sirketi,
Class A...................................... 40,040
1,029,682 Akbank TAS.................................... 32,824
1,547,500 Arcelik AS.................................... 61,170
491,000 Aygaz AS...................................... 42,573
718,000 Brisa Bridgestone Sabanci Lastik
San. ve Tic AS................................ 21,973
45,000 Cukurova Elektrik AS.......................... 55,657
497,000 Ege Biracilik ve Malt Sanayii AS.............. 50,697
5,164,000 Eregli Demir ve Celik Fabrikalari TAS *....... 94,817
1,781,500 Haci Omer Sabanci Holding AS.................. 48,838
102,400 Migros Turk TAS............................... 141,015
662,600 Netas Northern Electric
Telekomunikasyon AS........................... 15,545
3,062,250 Turkiye Garanti Bankasi AS *.................. 138,615
6,779,500 Turkiye Is Bankasi, Class C *................. 332,813
6,183,044 Yapi ve Kredi Bankasi SA...................... 148,218
-----------
1,224,795
-----------
Venezuela - 2.17%
4,565 C.A. La Electricidad de Caracas, ADR.......... $ 98,376
11,000 Compania Anonima Nacional Telefonos
de Venuela, ADR............................... 302,500
3,850 Mavesa SA, SP ADR............................. 11,550
-----------
412,426
-----------
Total Common Stocks........................... 17,645,646
-----------
(Cost $16,774,792)
Par Value
---------
CORPORATE NOTES AND BONDS - 0.84%
Industrial - 0.84%
$ 36,000 Far East Department Stores
3.0000% 07-06-2001........................... 32,895
52,000 Formosa Chemical & Fibre Corp.
1.7500% 07-19-2001........................... 60,190
57,000 Nan Ya Plastics Corp. Conv
1.7500% 07-19-2001........................... 66,690
-----------
Total Corporate Notes and Bonds............... 159,775
-----------
(Cost $157,918)
Total Investments - 93.69%.................................. 17,805,421
-----------
(Cost $16,932,710)**
Net Other Assets and Liabilities - 6.31%.................... 1,198,697
-----------
Net Assets - 100.00%........................................ $19,004,118
===========
</TABLE>
- ---------------------------
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is $17,087,690.
<TABLE>
<S>.............................................. <C>
Gross unrealized appreciation.................... $ 3,285,798
Gross unrealized depreciation.................... (2,568,067)
-----------
Net unrealized appreciation for
federal tax purposes.......................... $ 717,731
===========
</TABLE>
ADR American Depositary Receipts
GDR Global Depositary Receipts
SP ADR Sponsored American Depositary Receipts
SP GDR Sponsored Global Depositary Receipts
See accompanying Notes to Financial Statements.
7
<PAGE>
Alleghany Funds
Alleghany/Blairlogie International Developed Fund
Schedule of Investments April 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Value
------ -----
<S> <C>
COMMON STOCKS - 100.73%
Australia - 4.80%
60,956 Amcor Ltd....................................... $ 328,110
64,610 Broken Hill Proprietary Co. Ltd................. 729,996
102,100 Foster's Brewing Group Ltd...................... 297,645
71,454 Leighton Holdings Ltd........................... 269,360
49,300 National Australia Bank Ltd..................... 959,226
62,684 News Corp. Ltd.................................. 525,000
101,300 Southcorp Ltd................................... 415,368
34,451 TABCORP Holdings Ltd............................ 280,018
112,300 Telstra Corp. Ltd............................... 609,010
90,697 Westpac Banking Corp............................ 691,957
------------
5,105,690
------------
Finland - 4.73%
11,500 Fortum Corp., The Ivo-Neste Group............... 61,424
24,340 Metsa-Serla Oyj, Class B........................ 208,520
40,128 Nokia Oyj....................................... 3,096,098
13,828 Okobank, Class A................................ 122,852
11,620 Oy Hartwall AB.................................. 130,273
400 Rauma Oyj....................................... 5,373
20,898 Rautaruukki Oyj................................. 148,089
10,730 Sonera Group Oyj................................ 213,354
11,723 UPM-Kymmene Oyj................................. 355,226
4,000 Viking Line Oyj................................. 158,647
6,110 Werner Soderstrom Osakeyhtio-WSOY,
Class B......................................... 419,981
10,780 YIT-Yhtyma Oyj.................................. 107,173
------------
5,027,010
------------
France - 15.69%
6,410 Alcatel......................................... 787,783
4,900 Axa............................................. 633,300
14,810 Banque Nationale de Paris....................... 1,228,825
1,720 Carrefour SA *.................................. 1,364,368
3,200 Castorama Dubois................................ 766,585
3,600 Compagnie de Saint Gobain....................... 618,725
2,800 Compagnie Gen Des Eaux, Warrant *,
expires 05/02/2001.............................. 6,189
2,000 Danone.......................................... 535,170
7,627 Elf Aquitaine SA................................ 1,185,805
1,450 Essilor International SA........................ 478,480
20,126 France Telecom SA............................... 1,627,335
6,010 Groupe GTM...................................... 573,673
7,370 Hermes International............................ 608,000
6,756 Lafarge SA...................................... 657,385
820 L'OREAL......................................... 525,568
10,920 Pechiney SA, Class A............................ 461,982
4,250 Pinault-Printemps-Redoute SA.................... 705,717
3,305 PSA Peugeot Citroen............................. $ 548,798
4,990 Suez Lyonnaise des Eaux......................... 849,705
10,131 Total SA, Class B............................... 1,388,670
20,880 Usinor SA....................................... 323,307
3,490 Vevendi......................................... 816,125
------------
16,691,495
------------
Germany - 8.03%
2,527 Allianz AG...................................... 806,349
9,854 BASF AG......................................... 430,433
15,091 Bayer AG........................................ 638,439
12,784 DaimlerChrysler AG.............................. 1,251,369
5,837 Deutsche Bank AG................................ 337,382
648 Deutsche Bank AG, New *......................... 36,462
10,000 Deutsche Telekom AG............................. 398,205
5,653 Dresdner Bank AG................................ 243,938
6,240 HypoVereinsbank................................. 412,484
5,575 Mannesmann AG................................... 730,564
3,560 Metro AG........................................ 259,424
1,950 Muenchener Rueckversicherungs-
Gesellschaft AG................................. 399,077
750 Muenchener Rueckversicherungs-
Gesellschaft AG, New *.......................... 151,905
6,029 RWE AG.......................................... 277,380
815 SAP AG.......................................... 301,695
8,546 Siemens AG...................................... 629,995
10,130 Veba AG......................................... 554,450
430 Viag AG......................................... 217,163
6,520 Volkswagen AG................................... 461,334
------------
8,538,048
------------
Ireland - 3.07%
95,300 Allied Irish Banks Plc.......................... 1,542,148
32,300 CRH Plc......................................... 637,125
31,459 Irish Life & Permanent Plc...................... 455,835
28,300 Kerry Group Plc, Class A........................ 372,048
94,000 Smurfit (Jefferson) Group Plc................... 256,502
------------
3,263,658
------------
Italy - 7.52%
21,175 Assicurazioni Generali.......................... 825,283
89,490 Banca Commerciale Italiana *.................... 737,317
30,000 Banca Popolare di Milano........................ 255,423
164,000 Benetton Group SpA *............................ 294,872
36,300 Burgo (Cartiere) SpA............................ 259,150
14,000 Edison SpA *.................................... 124,380
226,215 ENI SpA......................................... 1,490,567
188,656 Fiat SpA........................................ 632,516
40,780 Instituto Bancario San Paolo di Torino *........ 612,460
</TABLE>
See accompanying Notes to Financial Statements.
8
<PAGE>
Alleghany Funds
Alleghany/Blairlogie International Developed Fund
Schedule of Investments April 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Value
------ -----
<S> <C>
Italy (continued)
46,600 Instituto Nazionale delle Assicurazioni......... $ 123,216
59,000 Italcementi SpA................................. 286,422
53,000 Italgas Spa..................................... 235,994
400,500 Montedison SpA.................................. 302,867
133,600 Telecom Italia Mobile SpA....................... 796,943
86,820 Telecom Italia SpA.............................. 924,679
165,000 Unione Immobiliare SpA.......................... 94,585
------------
7,996,674
------------
Japan - 14.72%
17,900 Aoyamma Trading Co. Ltd......................... 498,035
87,000 Asahi Chemical Industry Co. Ltd................. 506,726
61,000 Bank of Tokyo-Mitsubishi Ltd.................... 900,750
22,000 Bridgestone Corp................................ 589,986
21,000 Canon, Inc...................................... 513,890
20,000 Fanuc Ltd....................................... 871,570
16,000 Fuji Photo Film................................. 604,735
44,000 Fujisawa Pharmaceutical Co. Ltd................. 722,733
67,000 Hitachi Ltd..................................... 489,620
93,000 Kirin Brewery Co. Ltd........................... 1,052,169
35,000 Matsushita Electric Industrial Co. Ltd.......... 665,829
139,000 Mitsubishi Heavy Industries Ltd................. 609,236
201,000 Mitsui O.S.K Lines Ltd.......................... 463,230
14,000 Murata Manufacturing Co. Ltd.................... 801,340
66,000 NEC Corp........................................ 788,736
95 Nippon Telegraph & Telephone Corp............... 1,034,988
23,000 Sankyo Co. Ltd.................................. 482,840
31,000 Sega Enterprises Ltd............................ 552,064
96,000 Sekisui Chemical Co. Ltd........................ 642,011
27,000 Sharp Corp...................................... 316,781
38,000 Shiseido Co. Ltd................................ 598,701
60,000 Tokio Marine & Fire Insurance Co. Ltd........... 699,435
26,700 Tokyo Electric Power Co......................... 570,585
24,000 Toyota Motor Corp............................... 681,835
------------
15,657,825
------------
Netherlands - 6.13%
15,479 ABN AMRO Holding NV............................. 369,175
2,500 AEGON NV........................................ 239,954
4,304 Akzo Nobel NV................................... 194,603
21,150 Elsevier NV..................................... 316,525
13,808 Fortis (NL) NV.................................. 492,155
3,800 Heineken NV..................................... 190,905
13,011 ING Groep NV.................................... 802,272
4,744 Kininjkuhje (Royal) Philips Electronics NV...... 408,925
5,400 Koninklijke Ahold NV............................ 200,752
6,161 KPN NV.......................................... 257,390
28,357 Royal Dutch Petroleum Co........................ 1,652,548
6,661 TNT Post Group NV............................... 179,648
12,620 Unilever NV..................................... 864,920
8,519 VNU NV.......................................... 345,088
------------
6,514,860
------------
Norway - 2.36%
58,220 Christiania Bank Og Kreditkasse................. $ 223,783
54,150 Den Norske Bank ASA............................. 195,650
16,800 Hafslund ASA, Class B........................... 62,423
11,820 Merkantildata ASA............................... 118,126
17,110 Norsk Hydro ASA................................. 766,178
5,230 Norske Skogindustrier ASA....................... 162,833
18,920 Orkla ASA, Class B.............................. 277,562
14,510 Petroleum Geo-Services *........................ 244,470
32,500 Storebrand ASA *................................ 235,268
6,300 Tandberg Television ASA *....................... 59,731
2,920 Tomra Systems ASA............................... 115,978
6,270 Unitor ASA...................................... 51,413
------------
2,513,415
------------
Portugal - 5.10%
23,813 Banco Comercial Portugues SA, Class R........... 672,210
9,550 Banco Espirito Santo e Comercial de
Lisboa SA....................................... 229,687
7,800 BPI-SGPS SA..................................... 210,367
4,261 Brisa-Auto Estradas de Portugal SA.............. 180,717
14,732 Cimpor-Cimentos de Portugal SGPS SA............. 405,113
8,400 Companhia de Seguros Mundial
Confianca SA *.................................. 237,210
80,427 EDP-Electricidade de Portugal SA................ 1,514,132
12,708 Jeronimo Martins, SGPS SA....................... 418,675
4,236 Jeronimo Martins, SGPS SA, New *................ 135,750
27,075 Portugal Telecom SA............................. 1,129,685
8,178 Sonae Investimentos-Sociedade Gestora de
Participacoes Sociais SA........................ 292,265
------------
5,425,811
------------
Spain - 5.84%
26,968 Argentaria, Caja Postal y Banco Hipotacario
de Espana, SA................................... 634,915
26,096 Autopistas, Concesionaria Espanola SA........... 330,101
53,878 Banco Bilbao Vizcaya SA......................... 806,894
32,283 Banco Santander Central Hispano SA.............. 702,003
30,195 Endesa SA....................................... 671,929
5,880 Gas Natural SDG SA, Class E..................... 474,820
3,932 Gas y Electridad SA............................. 324,377
34,982 Iberdrola SA.................................... 490,232
20,274 Repsol SA....................................... 330,220
30,274 Telefonica SA................................... 1,420,055
31,274 Telefonica SA, Bonus Rights *................... 29,107
------------
6,214,653
------------
Switzerland - 5.22%
194 ABB AG.......................................... 283,169
6 Ciba Specialty Chemicals AG *................... 494
315 Clariant AG..................................... 161,184
1,926 Credit Suisse Group............................. 382,205
255 Holderbank Financiere Glarus AG................. 307,637
</TABLE>
See accompanying Notes to Financial Statements.
9
<PAGE>
Alleghany Funds
Alleghany/Blairlogie International Developed Fund
Schedule of Investments - continued April 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Value
- ------ ------
<S> <C>
Switzerland (continued)
361 Nestle SA............................... $ 668,549
671 Novartis AG............................. 982,938
114 Roche Holding AG........................ 1,341,660
67 Schindler Holding AG.................... 105,928
3,040 TAG Heuer International SA.............. 304,629
2,025 UBS AG.................................. 688,129
500 Zurich Allied AG........................ 322,433
-------------
5,548,955
-------------
United Kingdom - 14.93%
38,972 Abbey National Plc...................... 881,235
23,496 AstraZeneca Group Plc................... 915,212
44,360 Boots Co. Plc........................... 586,430
67,203 BP Amoco Plc............................ 1,273,174
62,300 British Telecommunications Plc.......... 1,045,024
24,500 Cable & Wireless Plc.................... 347,527
33,000 Cadbury Schweppes Plc................... 442,623
35,934 CGU Plc................................. 565,195
39,900 Diageo Plc.............................. 462,660
27,865 Glaxo Wellcome Plc...................... 821,887
19,672 HSBC Holdings Plc....................... 747,594
65,229 IMI Plc................................. 311,567
85,720 Lloyds TSB Group Plc.................... 1,379,282
28,900 Marks & Spencer Plc..................... 198,114
50,100 National Power Plc...................... 401,859
53,131 Prudential Corp. Plc.................... 758,350
44,577 Scottish & Newcastle Plc................ 557,038
64,858 Scottish Power Plc...................... 531,448
56,537 Shell Transport & Trading Plc........... 423,258
81,152 SmithKline Beecham Plc.................. 1,072,814
180,245 Tesco Plc............................... 534,102
82,888 Unilever Plc *.......................... 737,174
16,500 Vodafone Group Plc...................... 301,981
65,074 Wolsely Plc............................. 581,883
-------------
15,877,431
-------------
United States - 2.59%
230,000 WEBS Japan Index Series................. 2,760,000
-------------
Total Common Stocks..................... 107,135,525
-------------
(Cost $89,147,746)
Total Investments -100.73%............................ 107,135,525
-------------
(Cost $89,147,746)**
Liabilities Net of Cash and Other
Assets - (0.73)%...................................... (773,218)
-------------
Net Assets - 100.00%.................................. $ 106,362,307
=============
</TABLE>
_______________
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is $89,242,392.
Gross unrealized appreciation............... $ 20,499,077
Gross unrealized depreciation............... (2,605,944)
-------------
Net unrealized appreciation for
federal tax purposes..................... $ 17,893,133
=============
See accompanying Notes to Financial Statements.
10
<PAGE>
This page intentionally left blank.
11
<PAGE>
Alleghany Funds
Statement of Assets and Liabilities April 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Alleghany/Blairlogie Alleghany/Blairlogie
Emerging International
Markets Fund Developed Fund
-------------------- --------------------
<S> <C> <C>
ASSETS:
Investments:
Investments at cost............................................. $ 16,932,710 $ 89,147,746
Net unrealized appreciation..................................... 872,711 17,987,779
--------------- ------------------
Total investments at value...................................... 17,805,421 107,135,525
Cash.............................................................. 1,366,750 --
Foreign currency (cost $51,052 and $1,327,106, respectively)...... 51,075 1,325,948
Receivables:
Investments and foreign currency sold........................... -- 677,704
Dividends and interest.......................................... 66,393 415,019
Fund shares sold................................................ 287 56,847
Other........................................................... -- 44,465
--------------- ------------------
Total assets.................................................. 19,289,926 109,655,508
--------------- ------------------
Liabilities:
Payables:
Investments and foreign currency purchased...................... 87,242 229,271
Bank overdraft.................................................. -- 1,884,504
Fund shares purchased........................................... 198,566 1,179,426
--------------- ------------------
Total liabilities............................................. 285,808 3,293,201
--------------- ------------------
Net Assets........................................................... $ 19,004,118 $ 106,362,307
=============== ==================
Net Assets consist of:
Capital paid-in................................................... $ 36,113,578 $ 88,316,830
Accumulated undistributed (distribution in excess of)
net investment income .......................................... (1,001) (4,476)
Accumulated net realized gain (loss) on investments............... (17,976,654) 71,874
Net unrealized appreciation on investments........................ 868,195 17,978,079
--------------- ------------------
Total Net Assets..................................................... $ 19,004,118 $ 106,362,307
=============== ==================
Class N:
Net Assets........................................................ $ 960,831 $ 5,278,369
Shares of beneficial interest outstanding......................... 92,189 415,559
--------------- ------------------
Net Asset Value
Offering and redemption price per share
(Net Assets/Shares Outstanding)................................. $ 10.42 $ 12.70
=============== ==================
Class I:
Net Assets........................................................ $ 18,043,287 $ 101,083,938
Shares of beneficial interest outstanding......................... 1,729,551 7,958,222
--------------- ------------------
Net Asset Value
Offering and redemption price per share
(Net Assets/Shares Outstanding)................................. $ 10.43 $ 12.70
=============== ==================
</TABLE>
See accompanying Notes to Financial Statements.
12
<PAGE>
Alleghany Funds
Statement of Operations
For the Ten Months Ended April 30, 1999 and the Year Ended June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Alleghany/Blairlogie Alleghany/Blairlogie
Emerging Markets Fund International Developed Fund
----------------------------- ------------------------------
Ten Months Ten Months
Ended Year Ended Ended Year Ended
04/30/99 06/30/98 04/30/99 06/30/98
-------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends, net of foreign taxes................................ $ 388,035 $ 684,051 $ 1,031,052 $ 2,006,395
Interest....................................................... 34,267 107,781 187,723 541,299
-------------- ------------- -------------- --------------
Total investment income...................................... 422,302 791,832 1,218,775 2,547,694
-------------- ------------- -------------- --------------
EXPENSES:
Investment advisory fees....................................... 151,716 349,026 611,052 653,050
Distribution and servicing fees ............................... 11,205 22,008 82,795 71,984
Administration fees ........................................... 91,107 208,654 522,631 555,314
Trustees fees ................................................. 1,739 4,374 9,489 9,892
Other expenses................................................. 12,773 12,314 46,231 3,592
-------------- ------------- -------------- --------------
Total expenses............................................... 268,540 596,376 1,272,198 1,293,832
-------------- ------------- -------------- --------------
Net investment income (loss)..................................... 153,762 195,456 (53,423) 1,253,862
-------------- ------------- -------------- --------------
Net realized and unrealized
gain (loss) on investments:
Net realized gain (loss) on investments sold................... (4,719,790) (2,910,266) 14,045,047 2,148,622
Net realized gain (loss) on future contracts .................. -- -- 311,306 (293,621)
Net realized (loss) on foreign exchange contracts
and foreign currency ........................................ (68,780) (134,213) (1,149,976) (177,122)
Net change in unrealized appreciation (depreciation) on
investments.................................................. 3,734,773 (10,779,659) (9,468,547) 16,501,063
Net change in unrealized appreciation (depreciation) on future
contracts ................................................... -- -- (117,229) 117,229
Net change in unrealized appreciation (depreciation) on
foreign currency............................................. 392 (5,107) 324,491 (306,792)
-------------- ------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS............................................... (1,053,405) (13,829,245) 3,945,092 17,989,379
-------------- ------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS......................................... $ (899,643) $ (13,633,789) $ 3,891,669 $ 19,243,241
============== ============= ============== ==============
</TABLE>
See accompanying Notes to Financial Statements.
13
<PAGE>
Alleghany Funds
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Alleghany/Blairlogie
Emerging Markets Fund
-----------------------------------------------
Ten Months
Ended Year Ended Year Ended
04/30/99 06/30/98 06/30/97
------------- ------------- -------------
<S> <C> <C> <C>
NET ASSETS at beginning of period........................................ $ 27,569,318 $ 55,175,256 $ 80,913,382
------------- ------------- -------------
Increase (decrease) in net assets from operations:
Net investment income................................................ 153,762 195,456 282,163
Net realized gain (loss) on investments.............................. (4,788,570) (3,044,479) 3,040,112
Net change in unrealized appreciation (depreciation)
on investments.................................................... 3,735,165 (10,784,766) 1,584,847
------------- ------------- -------------
Net increase (decrease) in net assets from operations................ (899,643) (13,633,789) 4,907,122
------------- ------------- -------------
Distributions to shareowners:
From net investment income:
Class N........................................................... (1,704) -- (310,022)
Class I........................................................... (81,016) -- --
Return of Capital Distributions:
Class N........................................................... (549) -- --
Class I........................................................... (26,128) -- --
------------- ------------- -------------
Total distributions............................................... (109,397) -- (310,022)
------------- ------------- -------------
Capital share transactions: Net proceeds from sales of shares:
Class N (after conversion)........................................ 4,825,690 5,950,664 2,901,422
Class I........................................................... 23,834,837 23,186,970 12,783,823
Issued to shareowners in reinvestment of distributions:
Class N (after conversion)........................................ 4,501 -- --
Class I........................................................... 93,520 -- 222,233
Cost of shares repurchased:
Class N (after conversion)........................................ (6,805,094) (4,095,422) (912,811)
Class I........................................................... (29,509,614) (39,014,361) (45,329,893)
------------- ------------- -------------
Net decrease from
capital share transactions................................... (7,556,160) (13,972,149) (30,335,226)
------------- ------------- -------------
Total decrease in net assets.................................... (8,565,200) (27,605,938) (25,738,126)
------------- ------------- -------------
NET ASSETS at end of period (including line A)........................... $ 19,004,118 $ 27,569,318 $ 55,175,256
============= ============= =============
(A) Undistributed (distribution in excess of) net investment income...... $ (1,001) $ (3,263) $ (68,971)
------------- ------------- -------------
Other Information:
Share transactions, restated to reflect share conversion
on April 30, 1999
(See Note 1):
Class N:
Sold............................................................ 561,023 497,628 219,000
Issued to shareowners in reinvestment of distributions.......... 159 -- --
Repurchased..................................................... (795,208) (346,442) (73,123)
------------- ------------- -------------
Net increase (decrease) in shares outstanding................... (234,026) 151,186 145,877
============= ============= =============
Class I:
Sold............................................................ 2,801,577 1,946,376 1,007,887
Issued to shareowners in reinvestment of distributions.......... 10,113 -- 18,597
Repurchased..................................................... (3,463,865) (3,340,803) (3,611,795)
------------- ------------- -------------
Net decrease in shares outstanding.............................. (652,175) (1,394,427) (2,585,311)
============= ============= =============
</TABLE>
See accompanying Notes to Financial Statements.
14
<PAGE>
Allegany Funds
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Alleghany/Blairlogie
International Developed Fund
------------------------------------------------
Ten Months
Ended Year Ended Year Ended
04/30/99 06/30/98 06/30/97
------------- ------------- -------------
<S> <C> <C> <C>
NET ASSETS at beginning of period.......................................... $ 138,750,570 $ 100,313,146 $ 75,830,630
------------- ------------- -------------
Increase in net assets from operations:
Net investment income (loss)........................................... (53,423) 1,253,862 728,889
Net realized gain on investments....................................... 13,206,377 1,677,879 3,807,415
Net change in unrealized appreciation (depreciation)
on investments...................................................... (9,261,285) 16,311,500 4,764,506
------------- ------------- -------------
Net increase in net assets from operations............................. 3,891,669 19,243,241 9,300,810
------------- ------------- -------------
Distributions to shareowners:
From net investment income:
Class N............................................................. -- (37,910) --
Class I............................................................. (461,778) (833,712) --
From realized gain on investments:
Class N............................................................. (948,765) (384,865) (255,386)
Class I............................................................. (12,721,855) (4,187,682) (4,188,571)
------------- ------------- -------------
Total distributions................................................. (14,132,398) (5,444,169) (4,443,957)
------------- ------------- -------------
Capital share transactions:
Net proceeds from sales of shares:
Class N (after conversion).......................................... 112,028,851 72,268,195 5,977,477
Class I............................................................. 88,175,722 66,711,810 43,647,770
Issued to shareowners in reinvestment of distributions:
Class N (after conversion).......................................... 808,014 382,709 255,381
Class I............................................................. 12,916,908 4,241,759 3,448,517
Cost of shares repurchased:
Class N (after conversion).......................................... (123,609,614) (64,166,601) (6,090,443)
Class I............................................................. (112,467,415) (54,799,520) (27,613,039)
------------- ------------- -------------
Net increase (decrease) from
capital share transactions..................................... (22,147,534) 24,638,352 19,625,663
------------- ------------- -------------
Total increase (decrease) in net assets........................... (32,388,263) 38,437,424 24,482,516
------------- ------------- -------------
NET ASSETS at end of period (including line A)............................. $ 106,362,307 $ 138,750,570 $ 100,313,146
============= ============= =============
(A) Undistributed (distributions in excess of) net investment income....... $ (4,476) $ 456,779 $ 1,129,312
------------- ------------- -------------
OTHER INFORMATION:
Share transactions, restated to reflect share conversion on
April 30, 1999 (Note 1):
Class N:
Sold.............................................................. 8,379,342 5,291,704 487,975
Issued to shareowners in reinvestment of distributions............ 62,711 32,851 21,997
Repurchased....................................................... (9,182,886) (4,642,525) (485,197)
------------- ------------- -------------
Net increase (decrease) in shares outstanding..................... (740,833) 682,030 24,775
============= ============= =============
Class I:
Sold.............................................................. 6,455,344 5,096,974 3,568,011
Issued to shareowners in reinvestment of distributions............ 1,009,365 366,765 296,010
Repurchased....................................................... (8,037,843) (4,102,996) (2,293,759)
------------- ------------- -------------
Net increase (decrease) in shares outstanding..................... (573,134) 1,360,743 1,570,262
============= ============= =============
</TABLE>
See accompanying Notes to Financial Statements.
15
<PAGE>
Alleghany Funds
Financial Highlights April 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Alleghany/Blairlogie
Emerging Markets Fund
------------------------------------------------------------------------
Class N
------------------------------------------------------------------------
Ten Months Year Year Eight Months Year
Ended Ended Ended Ended Ended
04/30/99 06/30/98 06/30/97 06/30/96 10/31/95
----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.............. $ 10.14 $ 13.95 $ 12.63 $ 11.24 $ 16.95
----------- ----------- ----------- ----------- ------------
Income from Investment Operations:
Net investment income ....................... 0.05 0.09 -- 0.02 --
Net realized and unrealized gain (loss)
on investments............................. 0.23 (3.90) 1.32 1.40 (4.95)
----------- ----------- ----------- ----------- ------------
Total from investment operations........... 0.28 (3.81) 1.32 1.42 (4.95)
----------- ----------- ----------- ----------- ------------
Less Distributions:
Distributions from net investment
income..................................... -- -- -- (0.03) (0.05)
Distributions from net realized
gain on investments........................ -- -- -- -- (0.71)
----------- ----------- ----------- ----------- ------------
Total distributions...................... -- -- -- (0.03) (0.76)
----------- ----------- ----------- ----------- ------------
Net increase (decrease) in net asset value........ 0.28 (3.81) 1.32 1.39 (5.71)
----------- ----------- ----------- ----------- ------------
Net Asset Value, End of Period.................... $ 10.42 $ 10.14 $ 13.95 $ 12.63 $ 11.24
=========== =========== =========== =========== ============
Total Return/(1)/................................. 2.76% (27.31)% 10.45% 12.70% (27.96)%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's)/(2)/...... $ 961 $ 1,339 $ 117 $ 368 $ 830
Ratio of expenses to average net assets/(3)/... 1.68% 1.65% 1.69% 1.61% 1.62%
Ratio of net investment income to average
net assets/(3)/.............................. 0.69% 0.81% 0.02% 0.18% 0.02%
Portfolio Turnover/(1)/........................ 38% 52% 74% 74% 118%
</TABLE>
__________________________________________________________
(1) Not Annualized
(2) Net Assets at end of period do not reflect Class A,B, or C net assets
prior to April 30, 1999.
(3) Annualized
See accompanying Notes to Financial Statements.
16
<PAGE>
Alleghany Funds
Financial Highlights April 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Alleghany/Blairlogie
Emerging Markets Fund
----------------------------------------------------------------------------
Class I
----------------------------------------------------------------------------
Ten Months Year Year Eight Months Year Year
Ended Ended Ended Ended Ended Ended
04/30/99 06/30/98 06/30/97 06/30/96 10/31/95 10/31/94
---------- ----------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........... $ 10.18 $ 13.96 $ 12.66 $ 11.27 $ 16.53 $ 12.27
----------- ----------- ---------- ----------- ---------- -----------
Income from Investment Operations:
Net investment income (loss).............. 0.06 0.06 0.06 0.03 0.07 (0.01)
Net realized and unrealized gain (loss)
on investments.......................... 0.23 (3.84) 1.30 1.40 (4.55) 4.45
----------- ----------- ---------- ----------- ---------- -----------
Total from investment operations........ 0.29 (3.78) 1.36 1.43 (4.48) 4.44
----------- ----------- ---------- ----------- ---------- -----------
Less Distributions:
Distributions from net investment
income ................................. (0.03) -- (0.06) (0.04) (0.06) --
Distributions from net realized
gain on investments..................... -- -- -- -- (0.72) (0.18)
Return of capital distributions .......... (0.01) -- -- -- -- --
----------- ----------- ---------- ----------- ---------- -----------
Total distributions................... (0.04) -- (0.06) (0.04) (0.78) (0.18)
----------- ----------- ---------- ----------- ---------- -----------
Net increase (decrease) in net asset value..... 0.25 (3.78) 1.30 1.39 (5.26) 4.26
----------- ----------- ---------- ----------- ---------- -----------
Net Asset Value, End of Period................. $ 10.43 $ 10.18 $ 13.96 $ 12.66 $ 11.27 $ 16.53
=========== =========== ========== =========== ========== ===========
Total Return(1)................................ 2.98% (27.08)% 10.85% 12.70% (27.70)% 36.31%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's)........ $ 18,043 $ 24,251 $ 52,703 $ 80,545 $ 73,539 $ 79,620
Ratio of expenses to average net assets(2).. 1.43% 1.39% 1.45% 1.35% 1.35% 1.35%
Ratio of net investment income to average
net assets(2)............................. 0.94% 0.52% 0.45% 0.84% 0.57% (0.06)%
Portfolio Turnover(1)....................... 38% 52% 74% 74% 118% 79%
</TABLE>
- ---------------------------------
(1) Not Annualized
(2) Annualized
See accompanying Notes to Financial Statements.
17
<PAGE>
Alleghany Funds
Financial Highlights April 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Alleghany/Blairlogie
International Developed Fund
----------------------------------------------------------------
Class N
----------------------------------------------------------------
Eleven
Ten Months Year Year Eight Months Months
Ended Ended Ended Ended Ended
04/30/99 06/30/98 06/30/97 06/30/96 10/31/95*
----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................. $ 14.30 $ 13.05 $ 12.51 $ 11.73 $ 11.21
----------- ----------- ----------- ----------- ------------
Income from Investment Operations:
Net investment income (loss).................... (0.02) 0.17 0.06 0.69 0.02
Net realized and unrealized gain
on investments................................ 0.16 1.69 1.09 0.72 1.01
----------- ----------- ----------- ----------- ------------
Total from investment operations.............. 0.14 1.86 1.15 1.41 1.03
----------- ----------- ----------- ----------- ------------
Less Distributions:
Distributions from net investment
income ..................................... -- (0.03) -- (0.42) (0.08)
Distributions from net realized
gain on investments........................... (1.74) (0.58) (0.61) (0.21) (0.43)
----------- ----------- ----------- ----------- ------------
Total distributions......................... (1.74) (0.61) (0.61) (0.63) (0.51)
----------- ----------- ----------- ----------- ------------
Net increase (decrease) in net asset value........... (1.60) 1.25 0.54 0.78 0.52
----------- ----------- ----------- ----------- ------------
Net Asset Value, End of Period....................... $ 12.70 $ 14.30 $ 13.05 $ 12.51 $ 11.73
=========== =========== =========== =========== ============
Total Return(1)...................................... 1.05% 15.33% 9.77% 12.33% 9.61%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's)(2)........... $ 5,278 $ 6,299 $ 2,302 $ 5,624 $ 675
Ratio of expenses to average net assets(3)........ 1.41% 1.36% 1.38% 1.35% 1.34%
Ratio of net investment income to average
net assets(3)................................... (0.21)% 1.31% 0.52% 1.04% 0.50%
Portfolio Turnover(1)............................. 36% 60% 77% 60% 58%
</TABLE>
- ---------------------------------
(1) Not Annualized
(2) Net Assets at end of period do not reflect Class A, B, or C net assets
prior to April 30, 1999.
(3) Annualized
* Alleghany/Blairlogie International Developed Fund - Class N commenced
operations on November 30, 1994.
See accompanying Notes to Financial Statements.
18
<PAGE>
ALLEGHANY FUNDS
Financial Highlights April 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Alleghany/Blairlogie
International Developed Fund
--------------------------------------------------------------------------
Class I
--------------------------------------------------------------------------
Ten Months Year Year Eight Months Year Year
Ended Ended Ended Ended Ended Ended
04/30/99 06/30/98 06/30/97 06/30/96 10/31/95 10/31/94
---------- -------- -------- ------------ -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........... $ 14.32 $ 13.12 $ 12.54 $ 11.74 $ 11.86 $ 10.69
--------- --------- ----------- -------- --------- --------
Income from Investment Operations:
Net investment income .................... -- 0.16 0.10 0.72 0.10 0.09
Net realized and unrealized gain
on investments.......................... 0.17 1.73 1.09 0.72 0.30 1.15
--------- --------- ----------- -------- --------- --------
Total from investment operations........ 0.17 1.89 1.19 1.44 0.40 1.24
--------- --------- ----------- -------- --------- --------
Less Distributions:
Distributions from net investment
income ................................. (0.05) (0.11) -- (0.43) (0.09) (0.03)
Distributions from net realized
gain on investments..................... (1.74) (0.58) (0.61) (0.21) (0.43) (0.04)
--------- --------- ----------- -------- --------- --------
Total distributions................... (1.79) (0.69) (0.61) (0.64) (0.52) (0.07)
--------- ---------- ----------- -------- --------- --------
Net increase (decrease) in net asset value..... (1.62) 1.20 0.58 0.80 (0.12) 1.17
--------- --------- ----------- -------- --------- --------
Net Asset Value, End of Period................. $ 12.70 $ 14.32 $ 13.12 $ 12.54 $ 11.74 $ 11.86
========= ========= =========== ======== ========= ========
Total Return(1)................................ 1.31% 15.69% 10.07% 12.54% 3.83% 11.68%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's)........ $ 101,084 $ 122,126 $ 94,044 $ 70,207 $ 63,607 $ 22,569
Ratio of expenses to average net assets(2).. 1.16% 1.11% 1.13% 1.10% 1.10% 1.10%
Ratio of net investment income to average
net assets(2)............................. 0.04% 1.20% 0.85% 0.81% 1.10% 1.12%
Portfolio Turnover(1)....................... 36% 60% 77% 60% 63% 89%
</TABLE>
___________________________________________
(1) Not Annualized
(2) Annualized
See accompanying Notes to Financial Statements.
19
<PAGE>
ALLEGHANY FUNDS
Notes to Financial Statements April 30, 1999
- --------------------------------------------------------------------------------
1. Organization
Alleghany Funds (the "Company") operates as a series company, two series of
which are covered by these financial statements: Alleghany/Blairlogie Emerging
Markets Fund and Alleghany/Blairlogie International Developed Fund (each, a
"Fund" and collectively, the "Funds"). The Company is an open-end management
investment company, registered under the Investment Company Act of 1940, as
amended (the "Act"). The Company was organized as a Delaware business trust on
September 10, 1993.
After the close of business on April 30, 1999, pursuant to an agreement and plan
of reorganization in a tax free business combination, the assets and liabilities
of PIMCO Emerging Markets Fund and the PIMCO International Developed Fund (the
"Acquired Funds") were transferred to the newly formed series of the Company,
the Alleghany/Blairlogie Emerging Markets Fund and the Alleghany/Blairlogie
International Developed Fund (the "Acquiring Funds"), in exchange for shares of
the Acquiring Funds. Holders of the Institutional class of shares of the
Acquired Funds received Class I Shares of the corresponding Acquiring Fund and
holders of the Administrative Class of the Acquired Fund received Class N Shares
of the corresponding Acquiring Fund. In addition, at the date of transfer for
the Alleghany/Blairlogie Emerging Markets Fund, 39,668 of Class A Shares, 21,554
of Class B Shares and 31,837 of Class C Shares converted to 39,559, 21,149 and
31,255 of Class N Shares of the Acquiring Fund at conversion rates of 0.99724,
0.98121 and 0.98170, respectively. At the date of transfer for the
Alleghany/Blairlogie International Developed Fund, 75,505 of Class A Shares,
122,227 of Class B Shares and 221,270 of Class C Shares converted to 75,200,
119,741 and 216,942 of Class N Shares of the Acquiring Fund at conversion rates
of 0.99597, 0.97966 and 0.98044, respectively. Prior year share information has
been restated to reflect the share conversions at April 30, 1999.
The Alleghany/Blairlogie Emerging Markets Fund ("Emerging Markets Fund") seeks
long-term growth of capital with investments primarily in common stocks of
companies located in emerging market countries. Blairlogie Capital Management is
the Adviser for the Fund.
The Alleghany/Blairlogie International Developed Fund ("International Developed
Fund") seeks long-term growth of capital through investment primarily in a
diversified portfolio of international equity securities. Blairlogie Capital
Management is the Adviser for the
Fund.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Company in the preparation of financial statements in conformity
with generally accepted accounting principles. The preparation of financial
statements in accordance with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
those estimates.
Security Valuation: Portfolio securities and other financial instruments for
which market quotations are readily available are stated at market value. Market
value is determined on the basis of last reported sales prices, or if no sales
are reported, as is the case for most securities traded over-the-counter, the
mean between representative bid and asked quotations obtained from a quotation
reporting system or from established market makers. Short-term investments
having a maturity of 60 days or less are valued at amortized cost, which
approximates market value. Certain fixed income securities for which daily
market quotations are not readily available may be valued, pursuant to
guidelines established by the Board of Trustees, with reference to fixed income
securities whose prices are more readily obtainable.
Securities Transactions and Investment Income: Securities transactions are
recorded as of the trade date. Securities purchased or sold on a when-issued or
delayed delivery basis may be settled a month or more after the trade date.
Realized gains and losses from securities sold are recorded on the identified
cost basis. Dividend income is recorded on the ex-dividend date, except for
certain dividends from foreign securities where the ex-dividend date may have
passed, which are recorded as soon as a Fund is informed of the ex-dividend
date. Interest income, adjusted for the accretion of discounts and amortization
of premiums, is recorded on the accrual basis.
20
<PAGE>
ALLEGHANY FUNDS
Notes to Financial Statements April 30, 1999
- --------------------------------------------------------------------------------
Foreign Currency: Foreign currencies, investments, and other assets and
liabilities are translated into U.S. dollars at the exchange rates prevailing at
the end of the period. Fluctuations in the value of these assets and liabilities
resulting from changes in exchange rates are recorded as unrealized foreign
currency gains (losses). Realized gains (losses) and unrealized appreciation
(depreciation) on investment securities and income and expenses are translated
on the respective dates of such transactions. The effect of changes in foreign
currency exchange rates on investments in securities are not segregated in the
statement of operations from the effects of changes in market prices of those
securities, but are included with the net realized and unrealized gain or loss
on investment securities.
Dividends and Distributions to Shareowners: Dividends from net investment
income, if any, are declared and paid at least annually to shareowners of
record. Net long-term capital gains earned by a Fund, if any, will be
distributed no less frequently than once each year. Income dividends and capital
gain distributions are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles. These
differences are primarily due to differing treatments for such items as wash
sales, foreign currency transactions, net operating losses and capital loss
carryforwards. At April 30, 1999, certain amounts have been reclassified between
undistributed net investment income, accumulated undistributed net realized
gains or losses and paid in capital to more appropriately conform financial
accounting and tax characterizations of dividend distributions. Permanent book
and tax basis differences relating to net currency losses totaling $68,780 and
$1,149,976 were reclassified from accumulated net realized gain on investments
to accumulated undistributed net investment income in the Emerging Markets Fund
and International Developed Fund, respectively. In addition, permanent book and
tax differences in the International Developed Fund relating to the sale of
Passive Foreign Investment Company securities and other corporate actions
totaling $90,550 were reclassified from accumulated net realized gain on
investments to accumulated undistributed net investment income. The
International Developed Fund had net operating losses for tax purposes, net of
short-term capital gains, of $298,107 which were reclassified from undistributed
net investment income to capital paid-in.
Multiclass Operations: Each class offered by the Funds has equal rights as to
assets. Income, non-class specific expenses and realized and unrealized capital
gains and losses are allocated to each class of shares based on the relative net
assets of each class.
Federal Income Taxes: Each Fund intends to qualify as a regulated investment
company and distribute all of its taxable income and net realized gains, if
applicable, to shareholders. Accordingly, no provision for Federal income taxes
has been made.
Foreign Taxes on Dividends: Dividend income in the statement of operations is
shown net of foreign taxes withheld on dividends from foreign securities.
Foreign taxes withheld were $48,876 and $150,859 for the ten months ended April
30, 1999 and $54,600 and $203,465 for the year ended June 30, 1998 for the
Emerging Markets Fund and International Developed Fund, respectively.
Futures and Options: Each Fund is authorized to enter into futures contracts and
options. A Fund may use futures contracts to manage its exposure to the markets
or to movements in interest rates and currency values. The primary risks
associated with the use of futures contracts and options are imperfect
correlation between the change in market value of the securities held by a Fund
and the prices of futures contracts and options, the possibility of an illiquid
market, and the inability of the counterparty to meet the terms of the contract.
Futures contracts and purchased options are valued based upon their quoted daily
settlement prices. The premium received for a written option is recorded as an
asset with an equal liability which is marked-to-market based on the option's
quoted daily settlement price. Fluctuations in the value of such instruments are
recorded as unrealized appreciation (depreciation) until terminated, at which
time realized gains and losses are recognized.
Forward Currency Transactions: Each Fund is authorized to enter into forward
foreign exchange contracts for the purpose of hedging against foreign exchange
risk arising from the Fund's investment or anticipated investment in securities
denominated in foreign currencies. A Fund may also enter into these contracts
for purposes of increasing exposure to a foreign currency or to shift exposure
to foreign currency fluctuations from one country to another. All commitments
are marked-to-market daily at the applicable translation rates and any resulting
unrealized gains or losses are recorded. Realized gains or losses are recorded
at the time the forward contract matures or by delivery of the currency. Risks
may arise upon entering these contracts from the potential inability of
counterparties to meet the terms of their contracts and from unanticipated
movements in the value of a foreign currency relative to the U.S. dollar.
21
<PAGE>
ALLEGHANY FUNDS
Notes to Financial Statements April 30, 1999
- --------------------------------------------------------------------------------
3. Fees, Expenses, and Related Party Transactions
Investment Advisory Fee: PIMCO Advisors L.P. ("PIMCO Advisors") served as
investment adviser to the Funds through April 30, 1999, pursuant to an
Investment Advisory Agreement. PIMCO Advisors received from the Funds a fee
based on an annual percentage of the average daily net assets of each Fund as
follows: 0.85% for the Emerging Markets Fund and 0.60% for the International
Developed Fund. Each Fund also had Blairlogie as the sub-adviser which, under
the supervision of PIMCO Advisors, directed the investments of the Fund's
assets. Through April 30, 1990, the sub-adviser was an affiliate of PIMCO
Advisors. The advisory fees received by PIMCO Advisors were paid in all or in
part to the sub-advisers in accordance with the portfolio management agreements.
Administration Fee: For the period covered by these financial statements, PIMCO
provided administrative services to the Funds for which it received from each
Fund a monthly administrative fee based on each share class's average daily net
assets. The Administration Fees for the Institutional and Administrative Classes
were charged at the annual rate of 0.50% for the Emerging Markets and
International Developed Funds.
Distribution and Servicing Fees: PIMCO Funds Distributors LLC ("PFD"), formerly
PIMCO Funds Distribution Company, a wholly-owned subsidiary of PIMCO Advisors
L.P., served as the distributor of the Funds' shares for the period covered by
these financial statements.
The Funds were permitted to reimburse out of the Administrative Class assets of
each Fund, in an amount up to 0.25% on an annual basis of the average daily net
assets of that class, financial intermediaries that provided services in
connection with the distribution of shares or administration of plans or
programs that used Fund shares as their funding medium. The effective rate paid
to PFD was 0.25% during the current fiscal period.
Expenses: The Funds were also responsible for their proportionate share of the
following expenses: (i) salaries and other compensation of any of PIMCO Funds
executive officers and employees who were not officers, directors, stockholders
or employees of PIMCO Advisors, PIMCO, or its subsidiaries or affiliates; (ii)
taxes and governmental fees; (iii) brokerage fees and commissions and other
portfolio transaction expenses; (iv) the cost of borrowing money, including
interest expenses; (v) fees and expenses of the Trustees who are not "interested
persons" of PIMCO Advisors, PIMCO, the sub-adviser, or the PIMCO Funds, and any
counsel retained exclusively for their benefit; (vi) extraordinary expenses,
including costs of litigation and indemnification expenses; (vii) expenses such
as organizational expenses, which are capitalized in accordance with generally
accepted accounting principles; and (viii) any expenses allocated or allocable
to a specific class of shares, which include service fees payable with respect
to the Administrative Class shares and may include certain other expenses as
permitted by the PIMCO Funds Multiple Class Plan adopted pursuant to Rule 18f-3
under the Act and subject to review and approval by the Trustees.
Each unaffiliated Trustee of PIMCO Funds received an annual retainer of $45,000,
plus $2,000 for each Board of Trustees meeting attended, and $500 for each Audit
and Performance Committee meeting attended, plus reimbursement of related
expenses. Each Audit and Performance Committee member received an additional
annual retainer of $1,000, the Chairman of the Audit and Performance Committees
received an additional annual retainer of $2,000, the Chairman of the
Independent Trustees received an additional annual retainer of $6,000, and each
Vice Chairman of the entire Board received an additional annual retainer of
$3,000. These expenses were allocated to the Funds and the other series of PIMCO
Funds according to their respective net assets.
Subsequent to their reorganization, the Funds will operate under new investment
advisory, administrative, and distribution agreements, as described in the
Funds' prospectus.
22
<PAGE>
ALLEGHANY FUNDS
Notes to Financial Statements April 30, 1999
- --------------------------------------------------------------------------------
4. Purchases and Sales of Securities
Cost of purchases and proceeds from sales of securities (excluding short-term
investments) for the following periods were as follows:
<TABLE>
<CAPTION>
Ten Months Ended April 30, 1999 Year Ended June 30, 1998
------------------------------- ------------------------
Cost of Proceeds from Cost of Proceeds from
Purchases Sales Purchases Sales
--------- ------------- --------- -------------
<S> <C> <C> <C> <C>
Emerging Markets Fund $ 7,645,746 $ 15,800,753 $ 20,179,467 $ 32,657,231
International Developed Fund 40,031,862 60,172,797 62,861,670 58,330,036
</TABLE>
5. Federal Income Tax Matters
As of April 30, 1999, the Emerging Markets Fund had remaining capital loss
carryforwards that can be utilized in future years as shown below. The Emerging
Markets Fund will resume capital gain distribution in the future to the extent
gains are realized in excess of the available carryforwards.
<TABLE>
<CAPTION>
Capital Loss Carryforwards
--------------------------
Realized Losses Expiration
--------------- ----------
<S> <C>
$ 10,098,326 04/30/03
2,693,763 04/30/06
5,029,591 04/30/07
</TABLE>
6. Shareowner Voting Results (unaudited): At a Special Shareowner Meeting held
on February 26, 1999, shareowners of each of the PIMCO Emerging Markets Fund and
PIMCO International Developed Fund approved an Agreement and Plan of
Reorganization providing, with respect to each PIMCO Fund, for the transfer of
assets and stated liabilities of such PIMCO Fund to a newly formed portfolio of
Alleghany Funds in exchange for shares of designated classes of such
corresponding Alleghany Fund. The results of the voting were as follows:
<TABLE>
<CAPTION>
For Against Withheld
<S> <C> <C> <C>
PIMCO Emerging Markets Fund 1,164,693 4,620 855
PIMCO International Developed Fund 4,320,500 1,213,000 1,357,000
</TABLE>
7. Year 2000 Compliance (unaudited): The Company utilizes a number of computer
programs across its entire operation relying on both internal software systems
as well as external software systems provided by third parties. Like other
businesses around the world, the Company could be adversely affected if these or
other systems are unable to perform their intended functions effectively after
1999 because of the systems' inability to distinguish the year 2000 from the
year 1900. This is commonly known as the "Year 2000 problem." The Company has
completed its assessment of all mission critical systems. All mission critical
hardware and software systems utilized by the Company in its business have been
certified as Year 2000 compliant by the appropriate vendor. The Company is in
the process of validation testing of all such systems. Testing is scheduled to
be completed by June 30, 1999. There can be no assurance, however, that these
steps will be sufficient to avoid any adverse impact on the Funds' from this
problem, but we do not anticipate that the move to Year 2000 will have a
material impact on the Funds' operations.
23
<PAGE>
ALLEGHANY FUNDS
Independent Auditors' Report April 30, 1999
- -------------------------------------------------------------------------------
The Board of Trustees and Shareowners of
Alleghany/Blairlogie Emerging Markets Fund and
Alleghany/Blairlogie International Developed Fund:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of the Alleghany/Blairlogie Emerging Markets Fund
and Alleghany/Blairlogie International Developed Fund (the "Funds") as of April
30, 1999, and the related statements of operations, statements of changes in net
assets and financial highlights, for the ten-month period ended April 30, 1999.
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. The
accompanying statements of operations for the year ended June 30, 1998,
statements of changes in net assets for the two-year period ended June 30, 1998,
and financial highlights of the Funds for the periods presented through June 30,
1998 were audited by other auditors whose report thereon, dated August 17, 1998,
expressed an unqualified opinion.
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 and financial highlights. Our procedures included confirmation of
securities owned as of April 30, 1999, by correspondence with the custodians and
brokers and by the application of alternative procedures where broker replies
were not received. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the Funds as of April 30, 1999 and the results of their operations, the
changes in their net assets and the financial highlights for the ten-month
period then ended, in conformity with generally accepted accounting principles.
/s/ KPMG LLP
Chicago, Illinois
June 25, 1999
24
<PAGE>
GUIDE TO SHAREHOLDER BENEFITS
We're delighted to offer all Alleghany Funds shareholders a variety of services
and convenient options. To receive more information about any of these benefits,
simply call a Shareholder Services Representative Monday through Friday, 9 a.m.
- - 7 p.m. ET.
The Easy Way to Grow Your Account:
Start an Automatic Investment Plan/1/
Systematic investing is an easy, effortless way to help reach any investment
goal. Just choose a fixed amount, and we'll automatically deduct it from your
checking or savings account on a regular schedule and invest it in your
Alleghany Funds account. The service is free, and the minimum initial investment
is $50.
Compound Your Earnings with Automatic Dividend Reinvestment
By automatically reinvesting dividends into your Alleghany Funds account, your
profits can mount. Monthly and quarterly dividends, and annual capital gain
distributions, are reinvested at no charge.
Free, Flexible Exchange Privileges
As your personal needs change, so can your Alleghany Funds investment. Transfers
between our funds are free of charge, and it only takes a telephone call.
Low Minimum Initial Investments
The minimum initial investment for all Alleghany Funds is just $2,500 ($500 for
IRAs). And subsequent investments can be as low as $50.
Free Check Writing Services Available
If you are an investor of the Alleghany/Chicago Trust Money Market Fund, you can
take advantage of free check writing privileges. The minimum amount for each
check is $500.
Access Information and Make Transactions Online at Our Web Site
You can access account balances, obtain fund information and make transactions
online 24 hours a day, 7 days a week -- in complete security. Alleghany Funds
was among the first mutual fund companies to provide these capabilities.
www.alleghanyfunds.com
Our Shareholder Services Line is
at Your Service 24 Hours a Day
- --------------------------------------------------------------------------------
Shareholder Services Representatives are available to assist you Monday - Friday
9 a.m. to 7 p.m., ET. Or, call any time, day or night, for automated account
information to make exchanges or check fund performance.
/1/PERIODIC INVESTMENT PLANS INVOLVE CONTINOUS INVESTMENTS IN SECURITIES
REGARDLESS OF PRICE. YOU SHOULD CONSIDER YOUR FINANCIAL ABILITY TO CONTINUE TO
PURCHASE SHARES THROUGH PERIODS OF BOTH HIGH AND LOW PRICE LEVELS.
<PAGE>
[LOGO] Alleghany Funds
TRUSTEES
Leonard F. Amari*
Stuart D. Bilton, Chairman
Gregory T. Mutz*
Nathan Shapiro*
*Unaffiliated Trustee
ADVISERS
The Chicago Trust Company
171 North Clark Street
Chicago, IL 60601
Montag & Caldwell, Inc.
3455 Peachtree Road, NE, Suite 1200
Atlanta, GA 30326
Veredus Asset Management LLC
6900 Bowling Boulevard, Suite 250
Louisville, KY 40207
Blairlogie Capital Management
125 Princes Street
Edinburgh EH2 4AD
Scotland
SHAREHOLDER SERVICES
First Data Investor Services Group, Inc.
4400 Computer Drive
Westborough, MA 01581
DISTRIBUTORS
First Data Distributors, Inc.
4400 Computer Drive
Westborough, MA 01581
OFFICERS
Kenneth C. Anderson, President
Debra Bunde Comsudes, Vice President
Gerald F. Dillenburg, Vice President,
Secretary and Treasurer
Laura M. Hlade, Assistant Treasurer
CUSTODIAN
Bankers Trust
One Bankers Trust Place
New York, NY 10001
LEGAL COUNSEL
Sonnenschein Nath & Rosenthal
8000 Sears Tower
Chicago, IL 60606
AUDITOR
KPMG LLP
303 East Wacker Drive
Chicago, IL 60601
THIS REPORT IS SUBMITTED FOR GENERAL INFORMATION TO THE SHAREHOLDERS OF THE
FUNDS. IT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE
FUNDS UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS WHICH INCLUDES
DETAILS REGARDING THE FUNDS' OBJECTIVES, POLICIES, EXPENSES AND OTHER
INFORMATION.
