[RAINIER LOGO]
ANNUAL REPORT
INCLUDES AUDITED FINANCIAL STATEMENTS
MARCH 31, 2000
[LOGO] SMALL/MID CAP EQUITY PORTFOLIO
[LOGO] CORE EQUITY PORTFOLIO
[LOGO] BALANCE PORTFOLIO
[LOGO] INTERMEDIATE FIXED INCOME PORTFOLIO
<PAGE>
TABLE OF CONTENTS
LETTER TO SHAREHOLDERS ..................................................... 2
COMMENTS FROM INVESTMENT ADVISOR ........................................... 3
PORTFOLIO INVESTMENT RETURNS
SMALL/MID CAP EQUITY PORTFOLIO ........................................ 4
CORE EQUITY PORTFOLIO ................................................. 5
BALANCED PORTFOLIO .................................................... 6
INTERMEDIATE FIXED INCOME PORTFOLIO ................................... 7
SCHEDULES OF INVESTMENTS
SMALL/MID CAP EQUITY PORTFOLIO ........................................ 8
CORE EQUITY PORTFOLIO ................................................. 11
BALANCED PORTFOLIO .................................................... 14
INTERMEDIATE FIXED INCOME PORTFOLIO ................................... 18
STATEMENTS OF ASSETS AND LIABILITIES ....................................... 20
STATEMENTS OF OPERATIONS ................................................... 21
STATEMENTS OF CHANGES IN NET ASSETS ........................................ 22
FINANCIAL HIGHLIGHTS ....................................................... 24
NOTES TO FINANCIAL STATEMENTS .............................................. 28
INDEPENDENT AUDITORS' REPORT ............................................... 31
DIRECTORY OF FUNDS' SERVICE PROVIDERS ...................................... 31
INDEX DESCRIPTIONS ......................................................... 32
[RAINIER LOGO]
601 Union Street, Suite 2801
Seattle, Washington 98101
(800) 248-6314
www.rainierfunds.com
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE PROVIDED FOR THE
GENERAL INFORMATION OF THE SHAREHOLDERS OF THE RAINIER INVESTMENT MANAGEMENT
MUTUAL FUNDS. THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE
INVESTORS IN THE FUNDS UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE
PROSPECTUS. FOR MORE INFORMATION ON ANY FUND, INCLUDING CHARGES AND EXPENSES,
VISIT OUR WEB SITE OR CALLTHE NUMBER ABOVE TO RECEIVE A FREE PROSPECTUS. READ IT
CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
<PAGE>
LETTER TO SHAREHOLDERS
Dear Shareholders,
As Chairman of Rainier Investment Management Mutual Funds and a fellow
shareholder in the Funds, I'd like to express our appreciation for your valued
investment in one of the four portfolios covered in this report. If you are a
new shareholder, welcome! This report, known as the "Annual Report,"contains
audited financial statements for the fiscal year ending March 31, 2000. The
audit of the financial statements was performed by KPMG LLP.
As you review this Report, you will find commentary describing the equity
and fixed-income capital markets for the year ending March 31, 2000. Also, you
will see commentaries for each of the four Portfolios, which cover the last
twelve months, followed by investment total returns. Finally, this Report
contains financial statements detailing the expenses and holdings of the
Portfolios.
The tenacious U.S. Economic expansion, now the longest in history, and its
nearly constant companion, the bull market, both continued unabated as we closed
our March 31 fiscal year. Investment returns in all of the rainier funds were
outstanding. The Small/Mid Cap Equity Portfolio returned over 45% for the year
and the Core Equity Portfolio over 32%. The Core Equity outperformed the S&P 500
Stock Index by over 14 percent, a remarkable margin for a fully diversified
portfolio. Our Balanced Portfolio, with approximately 60% in stock investments
returned nearly 20%, one of its best showings ever.
Both the Small/Mid Cap and Core Equity Portfolios were named to the "A"
list in Business Week's Annual Guide to Mutual Funds. Only 121 equity funds
earned "A"s for delivering the best risk-adjusted total returns over the past
five years. Also, last summer the Core Equity Portfolio was featured in Money as
one of "The World's Best Mutual Funds."
To ensure that our research capabilities keep pace in a market environment
where dozens of new companies have been created, particularly in the technology
sector, we are adding additional investment professionals to our equity team.
The new resources, coupled with our state of the art information and trading
systems, will provide a firm foundation to the steady asset growth that we
envision.
Finally, all our back office operations are running smoothly, and the Web
site that we installed this year at www.rainierfunds.Com has been a popular
place to find fund information quickly.
Thank you again for your investment in the Rainier Investment Management
Mutual Funds.
Sincerely,
/s/ J. Glenn Haber
J. Glenn Haber
Chairman
Rainier Investment Management Mutual Funds
2
<PAGE>
COMMENTS FROM INVESTMENT ADVISOR
ABOUT THE ADVISOR: THE INVESTMENT ADVISOR TO THE FUNDS IS RAINIER
INVESTMENT MANAGEMENT, INC.(R) (RIM) LOCATED IN SEATTLE,WASHINGTON. RIM IS ONE
OF AMERICA'S LEADING INVESTMENT ADVISORY FIRMS, MANAGING $6.0 BILLION OF
DISCRETIONARY ASSETS FOR PRIMARILY INSTITUTIONAL CLIENTS.
EQUITY COMMENTS
The twelve-month period ending March 31, 2000 witnessed excellent
investment returns for most equity indices, and spectacular results for the
NASDAQ Index. The explosive growth of internet-related technology, combined with
the overnight large-cap status achieved by numerous companies fresh to the
public markets, fueled an unprecedented wave of enthusiasm. As the first quarter
of 2000 came to a close, however, signs that the euphoria had gone too far began
to appear, and investors increasingly questioned the underlying value of their
"new economy" investments.
We are pleased to report that the Core Equity, Small/Mid Cap Equity and
Balanced Portfolios performed well during this period. Although the high
valuations of large sections of the equity markets presented us with a
challenging environment, we were able to participate in numerous rewarding
investments. Technology stocks were among the primary contributors to investment
performance, but financial services and consumer cyclical issues also produced
notable winners.
While we remain enthusiastic about the improved efficiency and higher
profitability that can result from investment in technology providers, we are
concerned that investors are overestimating the growth potential of companies
that hold great promise but are unproven in the marketplace and are not yet
profitable. The valuation gap between unprofitable "new" and cash-generating
"old" economy stocks seems excessive, and we anticipate further corrections for
some high-flying growth companies in the months ahead. Conversely, we see
opportunity in selective "old" economy issues that have only recently been
re-embraced by investors after, in many cases, years of neglect.
James R. Margard, CFA; David A.Veterane, CFA;
Peter M. Musser, CFA; Mark H. Dawson, CFA
FIXED INCOME COMMENTS
The major fixed-income indices returned low single-digit performance for
the year ending March 31, 2000. The Federal Reserve raised overnight lending
rates five separate times during the year, taking the Funds rate from 4 3/4 % to
6%. Inflation overall has remained low, although some individual components of
the indicators have begun to build a minor upward trend. The domestic economy
continues to be on fire with expansion entering its 108th month. Employment
stands at historically high levels. Interest rates rose through-out the calendar
year and then fell, as concern of a Y2K meltdown became a non-event. The U.S.
Treasury announced a buy back plan for longer dated issues and began to
implement the reverse auction in February, creating a perceived scarcity value
in maturities of over ten years. With a current budget surplus, the paydowns of
maturing debt and elimination of existing debt have created divergent market
forces. Because the Fed has maintained a tightening bias, short intermediate
interest rate levels were rising as long rates fell.
Liquidity has become a more important factor in the credit markets.
Volatility in equities has demanded a flight to a quality alternative and
Treasury issues play that role. As a result, yield spread differentials to
corporates have widened over the year. We continue to remain optimistic
long-term that as the growth of the economy begins to slow the gradualist
strategies currently in place will positively impact the bond market. The near
certainty of further rate hikes will impact returns short-term but slightly
higher interest rate levels and attractive spreads of corporate issues should
provide good returns into the next year.
Patricia L. Frost, CEO;
Michael E. Raney, CFA
3
<PAGE>
PORTFOLIO INVESTMENT RETURNS
[LOGO]
SMALL/MID CAP EQUITY PORTFOLIO
OBJECTIVE: The Small/Mid Cap Equity Portfolio seeks to PROVIDE INVESTORS
WITH MAXIMUM LONG-TERM CAPITAL APPRECIATION. The Investment Advisor constructs a
diversified portfolio of small and medium capitalization common stocks.
COMMENTARY: The Small/Mid Cap Equity Portfolio participated fully in the
sharp rebound of small stocks in the year ending March 31, rising 45.4% compared
to the 43.5% increase in the Russell 2500(TM) Index. Technology stocks were the
big winners. Health care, producer durables and energy stocks also delivered
strong returns. Check Point Software, Citrix Systems, Symantec and Vitesse
Semiconductors were among the top performers in the technology group. Other
names that performed exceptionally well included MedImmune, Teva Pharmaceutical,
Symbol Technologies and Kansas City Southern. Following several years of small
stocks lagging larger issues, it was certainly a relief to see a reversal in the
fortunes of these shares. We anticipate further gains ahead, with the caveat
that a meaningful slowdown in the rate of economic growth would
disproportionately hurt small stocks. While this is not our forecast, we are
keeping a watchful eye on Federal Reserve monetary policy, and continue to favor
mid-cap stocks over small-cap shares.
SMALL/MID CAP EQUITY PORTFOLIO:
Small/Mid Russell Consumer
Cap Equity 2500(TM) Price
Portfolio Index Index
--------- ----- -----
5/10/1994 $10,000 10,000 $10,000
3/31/1995 11,938 10,999 10,272
3/31/1996 16,520 14,279 10,563
3/31/1997 18,197 15,519 10,855
3/31/1998 28,138 22,015 11,004
3/31/1999 23,303 19,095 11,194
3/31/2000 33,879 27,392 11,608
<TABLE>
<CAPTION>
TOTAL RETURNS Inception
FOR PERIODS ENDING MARCH 31, 2000 6 Months 1 Year 3 Years* 5 Years* to 3/31/00*
--------------------------------- -------- ------ -------- -------- -----------
<S> <C> <C> <C> <C> <C>
Small/Mid Cap Equity Portfolio 36.8% 45.4% 21.4% 23.2% 23.0%
Russell 2500(TM) Index 31.7 43.5 20.9 20.0 18.6
Russell Midcap(TM) Index 29.0 30.8 23.1 21.8 20.6
Russell 2000(R) Index 26.8 37.3 17.8 17.2 15.9
Consumer Price Index 1.9 3.7 2.3 2.5 2.6
</TABLE>
*ANNUALIZED RETURNS. INCEPTION DATE 5/10/94.
SEE PAGE 32 FOR INDEX DESCRIPTIONS. TOTAL RETURN ASSUMES REINVESTMENT OF
DIVIDENDS AND DISTRIBUTIONS. PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE
RESULTS. INVESTMENT RETURN WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. SMALL-COMPANY
INVESTING MAY INVOLVE GREATER RISKS AND VOLATILITY, AND THE VALUE OF
SMALL-COMPANY STOCKS MAY BE ADVERSELY AFFECTED BY LESS-LIQUID MARKETS.
4
<PAGE>
[LOGO]
CORE EQUITY PORTFOLIO
OBJECTIVE: The Core Equity Portfolio seeks to MAXIMIZE LONG-TERM CAPITAL
APPRECIATION. The Fund invests primarily in a diversified portfolio of common
stocks of U.S. companies.
COMMENTARY: The Core Equity Portfolio performed well in the year ending
March 31, rising 32.1% compared to the 17.9% increase in the Standard & Poor's
500 Stock Index. The largest contribution to returns came from phenomenal gains
in the technology component of the Portfolio, although consumer cyclical,
capital goods and financial services companies also posted solid results.
Increases in technology issues such as Sun Microsystems, Nortel Networks, Nokia
and Intel dwarfed the gains recorded by other issues, as global corporations
rushed to invest in web-enabling infrastructure, networks and software.
Non-technology stocks that performed well included General Electric, Bell
Atlantic, Nextel Communications, Home Depot and Time Warner. We anticipate that
our broadly diversified approach may be of benefit in the upcoming months, as
money that has been concentrated in aggressive funds is reallocated to funds
that offer exposure to other areas of the economy.
Core Equity Standard & Poor's Consumer
Portfolio 500 Stock Index Price Index
--------- --------------- -----------
5/10/1994 $10,000 $10,000 $10,000
3/31/1995 11,787 11,495 10,272
3/31/1996 16,341 15,190 10,563
3/31/1997 19,263 18,186 10,855
3/31/1998 28,826 26,915 11,004
3/31/1999 31,318 31,881 11,194
3/31/2000 41,358 37,602 11,608
<TABLE>
<CAPTION>
TOTAL RETURNS Inception
FOR PERIODS ENDING MARCH 31, 2000 6 Months 1 Year 3 Years* 5 Years* to 3/31/00*
--------------------------------- -------- ------ -------- -------- -----------
<S> <C> <C> <C> <C> <C>
Core Equity Portfolio 29.6% 32.1% 29.0% 28.5% 27.2%
Standard & Poor's 500 Stock Index 17.5 17.9 27.4 26.8 25.2
Russell 1000(R) Index 21.1 21.2 28.0 26.8 25.1
Consumer Price Index 1.9 3.7 2.3 2.5 2.6
</TABLE>
*ANNUALIZED RETURNS. INCEPTION DATE 5/10/94.
SEE PAGE 32 FOR INDEX DESCRIPTIONS. TOTAL RETURN ASSUMES REINVESTMENT OF
DIVIDENDS AND DISTRIBUTIONS. PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE
RESULTS. INVESTMENT RETURN WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
5
<PAGE>
Portfolio Investment Returns, continued
[LOGO]
BALANCED PORTFOLIO
OBJECTIVE: The Balanced Portfolio seeks to PROVIDE INVESTORS WITH A BALANCE
OF LONG-TERM CAPITAL APPRECIATION AND CURRENT INCOME. The Fund invests primarily
in a diversified portfolio of common stocks of U.S. companies, investment grade
intermediate-term debt securities and cash equivalent securities.
COMMENTARY: The Balanced Portfolio finished the year ending March 31 with a
gain of 19.6%, nearly identical to its five-year annualized average of 19.4%,
and well ahead of a representative balanced index. While these returns fell
short of our two equity funds, they were achieved with a considerably lower
level of risk, and still came in well above the long-term average for an
all-stock portfolio. Results were achieved by maintaining an exposure of between
55% and 65% in stocks, with the remaining portion invested in high quality
intermediate-term bonds and short-term investments. The equity component is
virtually identical to the Core Equity Portfolio, and was therefore paced by
large technology names such as Oracle, Seibel Systems and Texas Instruments. We
continue to view this Portfolio as an excellent alternative for investors
seeking meaningful exposure to the upside potential of the stock market,
tempered by a high-income component to cushion the impact of market volatility.
Balanced Balanced Consumer
Portfolio Index Price Index
--------- ----- -----------
5/10/1994 $10,000 $10,000 $10,000
3/31/1995 11,223 11,034 10,272
3/31/1996 14,094 13,241 10,563
3/31/1997 15,762 15,044 10,855
3/31/1998 21,209 18,896 11,004
3/31/1999 22,741 21,346 11,194
3/31/2000 27,196 23,558 11,608
<TABLE>
<CAPTION>
TOTAL RETURNS Inception
FOR PERIODS ENDING MARCH 31, 2000 6 Months 1 Year 3 Years* 5 Years* to 3/31/00*
--------------------------------- -------- ------ -------- -------- -----------
<S> <C> <C> <C> <C> <C>
Balanced Portfolio 18.1% 19.6% 19.9% 19.4% 18.5%
Balanced Index (50/40/10) 9.6 10.4 16.6 16.4 15.7
Standard & Poor's 500 Stock Index 17.5 17.9 27.4 26.8 25.2
Lehman Brothers Govt./Corp.
Intermediate Bond Index 1.5 2.1 6.1 6.5 6.5
Consumer Price Index 1.9 3.7 2.3 2.5 2.6
</TABLE>
*ANNUALIZED RETURNS. INCEPTION DATE 5/10/94.
SEE PAGE 32 FOR INDEX DESCRIPTIONS. TOTAL RETURN ASSUMES REINVESTMENT OF
DIVIDENDS AND DISTRIBUTIONS. PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE
RESULTS. INVESTMENT RETURN WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE ADVISOR IS
CURRENTLY LIMITING THE PORTFOLIO'S EXPENSES, WHICH ENHANCES RETURN.
6
<PAGE>
[LOGO]
INTERMEDIATE FIXED INCOME PORTFOLIO
OBJECTIVE: The Intermediate Fixed Income Portfolio seeks to PROVIDE
INVESTORS WITH CURRENT INCOME. The Fund invests primarily in a diversified
portfolio of investment grade, intermediate-term debt securities providing
current income. The Portfolio does not use risky derivative instruments.
COMMENTARY: The Intermediate Fixed Income Portfolio performed in line with
the market indices for the year ending March 31. Interest rates rose between 25
and 160 basis points. The greatest movement occurred in the shorter maturities
as the Federal Reserve raised the funds rate 125 basis points to 6%. The longest
maturities held the bid due to the buy back of bonds by the U.S.Treasury. The
Portfolio benefited from a strong representation of U.S. Treasuries as the
market tended to place a premium upon liquidity. High quality short corporate
issues with an emphasis on the finance sector offered incremental return at a
lower risk. A slightly higher cash position going into the series of Federal
Reserve rate hikes protected the Portfolio and will allow investment at higher
coupon levels. While the markets may exhibit continued volatility near term, we
expect that the current asset allocation and possible commitment in the future
to slightly extended duration will provide good risk-adjusted returns.
Lehman
Intermediate Government/Corporate Consumer
Fixed Income Intermediate Price
Portfolio Bond Index Index
5/10/1994 $10,000 $10,000 $10,000
3/31/1995 10,492 10,607 10,272
3/31/1996 11,421 11,622 10,563
3/31/1997 11,803 12,180 10,855
3/31/1998 12,880 13,358 11,004
3/31/1999 13,716 14,138 11,194
3/31/2000 13,977 14,411 11,608
<TABLE>
<CAPTION>
TOTAL RETURNS Inception
FOR PERIODS ENDING MARCH 31, 2000 6 Months 1 Year 3 Years* 5 Years* to 3/31/00*
--------------------------------- -------- ------ -------- -------- -----------
<S> <C> <C> <C> <C> <C>
Intermediate Fixed Income Portfolio 1.4% 1.9% 5.8% 5.9% 5.8%
Lehman Brothers Govt./Corp.
Intermediate Bond Index 1.5 2.1 6.1 6.5 6.5
91-Day Treasury Bill Index 2.6 5.0 5.0 5.2 5.2
Consumer Price Index 1.9 3.7 2.3 2.5 2.6
</TABLE>
*ANNUALIZED RETURNS. INCEPTION DATE 5/10/94.
SEE PAGE 32 FOR INDEX DESCRIPTIONS. TOTAL RETURN ASSUMES REINVESTMENT OF
DIVIDENDS AND DISTRIBUTIONS. PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE
RESULTS. INVESTMENT RETURN WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE ADVISOR IS
CURRENTLY LIMITING THE PORTFOLIO'S EXPENSES, WHICH ENHANCES RETURN.
7
<PAGE>
SCHEDULE OF INVESTMENTS
[LOGO]
SMALL/MID CAP EQUITY PORTFOLIO
MARCH 31, 2000
COMMONSTOCKS
(98.66%) SHARES VALUE
--------------------------------------------------------------------------------
AUTOS AND TRANSPORTATION (3.95%)
AIR TRANSPORTATION (0.23%)
Expeditors International of Washington, Inc. 28,350 $ 1,126,913
--------------
AUTO PARTS/ORIGINAL EQUIPMENT (0.98%)
Arvin Industries, Inc. 201,875 4,567,422
--------------
RAILROADS (0.68%)
Kansas City Southern Industries, Inc. 36,825 3,164,648
--------------
TRUCKERS (2.06%)
US Freightways Corp. 257,975 9,657,939
--------------
TOTAL AUTOS AND TRANSPORTATION 18,516,922
--------------
CONSUMER DISCRETIONARY (11.41%)
ADVERTISING AGENCIES (0.42%)
Interpublic Group of Companies, Inc. 41,800 1,975,050
--------------
CABLE TELEVISION SERVICES (0.30%)
Charter Communications, Inc.* 98,250 1,407,738
--------------
CONSUMER ELECTRONICS (0.72%)
Infospace.com* 23,200 3,374,150
--------------
CONSUMER PRODUCTS (0.07%)
Jore Corp.* 49,050 331,088
--------------
HOUSEHOLD EQUIPMENT AND PRODUCTS (0.59%)
Black & Decker Corp. 73,350 2,755,209
--------------
HOUSEHOLD FURNISHINGS (1.51%)
Mohawk Industries, Inc.* 316,293 7,077,056
--------------
JEWELRY, WATCHES AND GEMSTONES (0.66%)
Tiffany & Co. 37,175 3,108,759
--------------
PUBLISHING/MISCELLANEOUS (0.43%)
McGraw-Hill Companies, Inc. 44,075 2,005,413
--------------
RENTAL AND LEASING SERVICES (0.94%)
Dollar Thrifty Automotive Group, Inc.* 255,500 $ 4,391,406
--------------
RESTAURANTS (0.93%)
CEC Entertainment, Inc.* .5 14
Jack In The Box, Inc.* 203,575 4,338,692
--------------
Total Restaurants 4,338,706
--------------
RETAIL (4.27%)
Fastenal Co. 140,650 6,733,619
Family Dollar Stores, Inc. 131,875 2,744,648
The Men's Wearhouse, Inc.* 354,650 10,506,506
--------------
Total Retail 19,984,773
--------------
SERVICES/COMMERCIAL (0.57%)
Interim Services, Inc.* 143,475 2,663,255
--------------
TOTAL CONSUMER DISCRETIONARY 53,412,603
--------------
CONSUMER STAPLES (3.39%)
BEVERAGES (2.03%)
Canandaigua Brands, Inc. Cl. A* 72,650 3,705,150
Suiza Foods Corp.* 144,475 5,815,119
--------------
Total Beverages 9,520,269
--------------
FOODS (1.36%)
Earthgrains Co. 32,925 489,759
McCormick and Co., Inc. 143,575 4,630,294
The Quaker Oats Co. 20,200 1,224,625
--------------
Total Foods 6,344,678
--------------
TOTAL CONSUMER STAPLES 15,864,947
--------------
ENERGY (4.02%)
MACHINERY/OIL WELL EQUIPMENT AND SERVICES (0.93%)
Rowan Companies, Inc.* 147,225 4,333,936
--------------
OIL/CRUDE PRODUCERS (3.09%)
Apache Corp. 291,300 14,492,175
--------------
TOTAL ENERGY 18,826,111
--------------
See Accompanying Notes to Financial Statements.
8
<PAGE>
FINANCIAL SERVICES (12.83%)
BANKS (3.98%)
City National Corp. 166,825 $ 5,619,917
Compass Bancshares, Inc. 244,175 4,868,239
Pacific Century Financial Corp. 88,400 1,795,625
Zions Bancorporation 153,200 6,376,950
--------------
Total Banks 18,660,731
--------------
FINANCE COMPANIES (0.57%)
Capital One Financial Corp.* 55,400 2,655,738
--------------
FINANCIAL/MISCELLANEOUS (1.36%)
Nationwide Financial Services, Inc. 218,075 6,378,694
--------------
FINANCIAL/SMALL LOANS (1.04%)
SLM Holdings Corp. 145,600 4,850,300
--------------
INSURANCE (0.67%)
Aon Corp. 96,850 3,123,413
--------------
INVESTMENT MANAGEMENT COMPANIES (1.79%)
Affiliated Managers Group* 53,300 2,531,750
SEI Investments Co. 51,425 5,833,523
--------------
Total Investment Management Companies 8,365,273
--------------
REAL ESTATE INVESTMENT TRUSTS (0.94%)
Avalonbay Communities, Inc. 120,250 4,404,156
--------------
SAVINGS AND LOANS (1.69%)
Bank United Corp. Cl. A 196,840 6,212,763
Dime Bancorp, Inc. 93,050 1,721,425
--------------
Total Savings and Loans 7,934,188
--------------
SECURITIES BROKERAGES (0.79%)
Lehman Brothers Holdings* 37,925 3,678,725
--------------
TOTAL FINANCIAL SERVICES 60,051,218
--------------
HEALTHCARE (9.67%)
BIOTECHNOLOGY RESEARCH (2.14%)
Corixa Corp.* 101,900 4,203,375
Invitrogen Corp.* 99,850 5,797,541
--------------
Total Biotechnology Research 10,000,916
--------------
DRUGS AND PHARMACEUTICALS (5.78%)
Allergan 109,025 5,451,250
Forest Laboratories, Inc.* 20,575 1,738,588
Medimmune, Inc.* 59,200 10,308,200
Teva Pharmaceuticals Industries ADR* 255,750 $ 9,542,672
--------------
Total Drugs and Pharmaceuticals 27,040,710
--------------
MEDICAL AND DENTAL INSTRUMENTS AND SUPPLIES (1.75%)
Inamed Corp.* 165,950 8,214,525
--------------
TOTAL HEALTHCARE 45,256,151
--------------
INTEGRATED OILS (5.04%)
OIL/INTEGRATED DOMESTIC (5.04%)
Amerada Hess Corp. 263,150 17,006,069
Coastal Corp. 100,250 4,611,500
USX-Marathon Group 75,950 1,979,447
--------------
TOTAL INTEGRATED OILS 23,597,016
--------------
MATERIALS AND PROCESSING (4.01%)
CHEMICALS (0.03%)
OM Group, Inc. 3,350 152,425
--------------
PAPER (3.98%)
Bowater, Inc. 51,600 2,754,150
The Mead Corp. 223,475 7,807,658
Willamette Industries, Inc. 200,925 8,062,116
--------------
Total Paper 18,623,924
--------------
TOTAL MATERIALS AND PROCESSING 18,776,349
--------------
PRODUCER DURABLES (10.86%)
DIVERSIFIED PRODUCTION (2.58%)
Dover Co. 252,525 12,089,634
--------------
IDENTIFICATION CONTROL AND FILTER DEVICES (1.59%)
American Power Conversion Corp.* 117,275 5,028,166
Parker Hanifin Corp. 59,000 2,437,433
--------------
Total Identification Control and Filter Devices 7,465,599
--------------
PRODUCTION TECHNOLOGY EQUIPMENT (5.94%)
Electroglas, Inc.* 160,500 5,497,125
Electro Scientific Industries, Inc.* 231,700 13,438,600
Teradyne, Inc.* 108,200 8,899,450
--------------
Total Production Technology Equipment 27,835,175
--------------
TELECOMMUNICATIONS EQUIPMENT (0.75%)
C-Cor.net Corp. 71,475 3,502,275
--------------
TOTAL PRODUCER DURABLES 50,892,683
--------------
See Accompanying Notes to Financial Statements.
9
<PAGE>
SCHEDULE OF INVESTMENTS--SMALL/MID CAP EQUITY PORTFOLIO, CONTINUED
TECHNOLOGY (27.06%)
COMMUNICATIONS TECHNOLOGY (8.64%)
ADC Telecommunications, Inc.* 102,875 $ 5,542,391
Copper Mountain Networks, Inc.* 77,625 6,360,398
F5 Networks, Inc.* 88,325 5,984,019
Go2Net, Inc.* 104,050 8,382,528
Panamsat Corp.* 107,900 5,293,844
RealNetworks, Inc.* 83,575 4,758,552
Visual Networks, Inc.* 72,325 4,104,444
--------------
Total Communications Technology 40,426,176
--------------
COMPUTER SERVICES, SOFTWARE AND SYSTEMS (8.24%)
Check Point Software
Technologies, Inc.* 23,050 3,942,991
Great Plains Software, Inc.* 165,050 8,809,544
Macromedia, Inc.* 60,650 5,477,453
Metasolv Software, Inc.* 67,925 4,011,820
Onyx Software Corp.* 125,600 4,003,500
Peregrine Systems, Inc.* 28,725 1,926,370
Symantec Corp.* 107,400 8,068,425
Zoran Corp.* 41,600 2,342,600
--------------
Total Computer Services, Software and Systems 38,582,703
--------------
COMPUTER TECHNOLOGY (2.06%)
Computer Sciences Corp.* 60,775 4,808,822
Radisys Corp.* 80,775 4,856,597
--------------
Total Computer Technology 9,665,419
--------------
ELECTRONICS/SEMI-CONDUCTORS (5.06%)
Celestica, Inc.* 62,425 3,312,427
LSI Logic Corp.* 200,400 14,554,050
SDL, Inc.* 27,400 5,832,775
--------------
Total Electronics/Semi-Conductors 23,699,252
--------------
ELECTRONIC SYSTEMS (3.06%)
Symbol Technologies, Inc. 174,150 14,334,722
--------------
TOTAL TECHNOLOGY 126,708,272
--------------
UTILITIES (6.42%)
UTILITIES/ELECTRICAL (2.51%)
PECO Energy Co. 236,975 8,738,453
Pinnacle West Capital Corp. 107,700 3,035,794
--------------
Total Utilities/Electrical 11,774,247
--------------
UTILITIES/TELECOMMUNICATIONS (3.91%)
Altigen Communications, Inc.* 74,950 $ 852,556
CenturyTel, Inc. 286,888 10,650,716
McLeodUSA, Inc.* 38,925 3,301,327
Price Communications Corp.* 67,250 1,546,750
Telephone & Data, Inc. 17,450 1,936,950
-------------
Total Utilities/Telecommunications 18,288,299
--------------
TOTAL UTILITIES 30,062,546
--------------
TOTAL COMMON STOCKS (COST $395,943,232) $ 461,964,818
--------------
SHORT-TERM INVESTMENTS
(1.29%) PAR VALUE VALUE
--------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES** (1.29%)
American Family Financial Services
5.77% 12-21-2000 $1,722,630 $ 1,722,630
General Mills, Inc. 5.74% 12-03-2000 317,456 317,456
Sara Lee Corp. 5.73% 01-22-2001 3,287,000 3,287,000
Warner Lambert Co. 5.77% 05-19-2000 99,414 99,414
Wisconsin Corp. Central Credit Union
5.80% 01-02-2001 133,000 133,000
Wisconsin Electric Power Co.
5.77% 01-02-2001 493,000 493,000
--------------
TOTAL VARIABLE RATE DEMAND NOTES
(COST $6,052,500) 6,052,500
--------------
TOTAL SHORT-TERM INVESTMENTS (COST $6,052,500) $ 6,052,500
--------------
TOTAL INVESTMENTS IN SECURITIES (99.95%)
(COST $401,995,732)*** $ 468,017,318
--------------
OTHER ASSETS LESS LIABILITIES (0.05%) $ 220,630
--------------
NET ASSETS (100.00%) $ 468,237,948
==============
* NON-INCOME PRODUCING SECURITY.
** THE VARIABLE-RATE SECURITIES ARE SUBJECT TO A DEMAND FEATURE WHICH REDUCES
THE REMAINING MATURITY.
*** AGGREGATE COST FOR FEDERAL INCOME TAX PURPOSES IS $403,522,805.
See Accompanying Notes to Financial Statements.
10
<PAGE>
[LOGO]
CORE EQUITY PORTFOLIO
MARCH 31, 2000
COMMON STOCKS
(98.20%) SHARES VALUE
--------------------------------------------------------------------------------
BASIC INDUSTRY (2.99%)
METALS (1.01%)
Alcoa, Inc. 145,260 $ 10,204,515
--------------
PAPER AND FOREST PRODUCTS (1.98%)
Bowater, Inc. 68,050 3,632,169
The Mead Corp. 229,650 8,023,397
Weyerhaeuser Co. 82,450 4,699,650
Willamette Industries, Inc. 88,700 3,559,088
--------------
Total Paper and Forest Products 19,914,304
--------------
TOTAL BASIC INDUSTRY 30,118,819
--------------
CAPITAL GOODS (5.15%)
DIVERSIFIED/MANUFACTURING (1.26%)
Dover Co. 140,700 6,736,013
Tyco International, Ltd. 118,325 5,901,459
--------------
Total Diversified/Manufacturing 12,637,472
--------------
ELECTRIC EQUIPMENT (3.89%)
General Electric Co. 252,075 39,118,889
--------------
TOTAL CAPITAL GOODS 51,756,361
--------------
COMMUNICATION SERVICES (6.68%)
COMMUNICATIONS (4.93%)
ALLTEL Corp. 172,875 10,901,930
CenturyTel, Inc. 256,772 9,532,661
Nextel Communications, Inc. Cl. A* 74,800 11,089,100
Qwest Communications International* 156,300 7,580,550
US West, Inc. 40,925 2,972,178
Voicestream Wireless Corp.* 58,300 7,509,769
--------------
Total Communications 49,586,188
--------------
TELECOMMUNICATIONS (1.16%)
General Motors Corp. Cl. H* 93,450 11,634,525
--------------
TELEPHONE (0.59%)
McLeodUSA, Inc.* 69,725 $ 5,913,552
--------------
TOTAL COMMUNICATION SERVICES 67,134,265
--------------
CONSUMER CYCLICAL (7.94%)
ADVERTISING (0.78%)
Interpublic Group Companies, Inc. 164,450 7,770,263
--------------
AUTOS AND AUTO PARTS (0.63%)
Ford Motor Co. 137,875 6,333,633
--------------
CONSUMER CYCLICAL/MISCELLANEOUS (0.17%)
Mohawk Industries, Inc.* 77,475 1,733,503
--------------
HOUSEHOLD EQUIPMENT AND PRODUCTS (0.26%)
Black & Decker Corp. 70,100 2,633,131
--------------
PUBLISHING (0.42%)
McGraw-Hill Companies, Inc. 93,300 4,245,150
--------------
RETAIL (5.68%)
Costco Wholesale Corp.* 266,575 14,011,848
Home Depot Inc. 242,855 15,664,115
The Men's Wearhouse, Inc.* 151,637 4,492,246
Staples, Inc.* 13,725 274,500
Target Corp. 214,400 16,026,400
Tiffany & Co. 79,625 6,658,641
--------------
Total Retail 57,127,750
--------------
TOTAL CONSUMER CYCLICAL 79,843,430
--------------
CONSUMER STAPLES (9.93%)
DRUGS (1.74%)
Bristol-Myers Squibb Co. 103,975 6,004,556
Merck & Co., Inc. 185,525 11,525,741
--------------
Total Drugs 17,530,297
--------------
ENTERTAINMENT (3.18%)
Fox Entertainment Group, Inc. Cl. A* 126,250 3,779,609
Time Warner, Inc. 178,400 17,840,000
USA Networks, Inc.* 210,300 4,744,894
The Walt Disney Co. 136,975 5,667,341
--------------
Total Entertainment 32,031,844
--------------
See Accompanying Notes to Financial Statements.
11
<PAGE>
SCHEDULE OF INVESTMENTS--CORE EQUITY PORTFOLIO, CONTINUED
FOODS/BEVERAGES (3.48%)
Anheuser-Busch Companies, Inc. 197,500 $ 12,294,375
Canandaigua Brands, Inc. Cl. A* 65,775 3,354,525
Coca-Cola Co. 154,550 7,254,191
PepsiCo, Inc. 207,835 7,183,297
The Quaker Oats Co. 81,775 4,957,609
--------------
Total Foods/Beverages 35,043,997
--------------
HOSPITAL SUPPLIES (1.25%)
Baxter International, Inc. 200,725 12,582,948
--------------
HOUSEHOLD PRODUCTS/COSMETICS (0.28%)
The Procter & Gamble Co. 49,925 2,808,281
--------------
TOTAL CONSUMER STAPLES 99,997,367
--------------
ENERGY (5.93%)
OIL/CRUDE PRODUCERS (1.59%)
Apache Corp. 321,200 15,979,700
--------------
OIL/INTEGRATED DOMESTIC (0.33%)
Amerada Hess Corp. 50,650 3,273,256
--------------
OIL/INTEGRATED INTERNATIONAL (4.01%)
Chevron Corp. 73,050 6,752,559
Conoco, Inc. Cl. A 116,050 2,857,731
Conoco, Inc. Cl. B 314,407 8,056,679
Exxon Mobil Corp. 194,288 15,118,035
Texaco, Inc. 141,700 7,598,663
--------------
Total Oil/Integrated International 40,383,667
--------------
TOTAL ENERGY 59,636,623
--------------
FINANCIAL (12.44%)
BANKS (1.86%)
The Chase Manhattan Bank 101,250 8,827,734
Fleet Boston Financial Group 272,075 9,930,738
--------------
Total Banks 18,758,472
--------------
DIVERSIFIED FINANCIAL SERVICES (2.76%)
Citigroup, Inc. 343,825 20,393,120
Federal Home Loan Mortgage Corp. 166,625 7,362,742
--------------
Total Diversified Financial Services 27,755,862
--------------
FINANCIAL SERVICES (4.33%)
American Express Co. 49,950 7,439,428
Kansas City Southern Industries, Inc. 140,750 12,095,703
Marsh & McLennan Companies, Inc. 217,499 $ 23,992,858
--------------
Total Financial Services 43,527,989
--------------
INSURANCE (1.27%)
American International Group, Inc. 116,224 12,726,528
--------------
INVESTMENT BANKING/BROKERAGE (2.22%)
Goldman Sachs Group, Inc. 42,700 4,488,838
Morgan Stanley Dean Witter & Co. 219,100 17,870,344
--------------
Total Investment Banking/Brokerage 22,359,182
--------------
TOTAL FINANCIAL 125,128,033
--------------
HEALTHCARE (5.00%)
BIOTECHNOLOGY (1.77%)
Amgen, Inc.* 93,000 5,707,875
Genetech, Inc.* 42,450 6,452,400
Medimmune, Inc.* 32,575 5,672,122
--------------
Total Biotechnology 17,832,397
--------------
DRUGS (2.45%)
Johnson & Johnson Co. 123,525 8,654,470
Pharmacia & Upjohn, Inc. 161,700 9,580,725
Teva Pharmaceuticals Industries ADR* 171,125 6,385,102
--------------
Total Drugs 24,620,297
--------------
HEALTH CARE DIVERSIFIED (0.78%)
Allergan 157,825 7,891,250
--------------
TOTAL HEALTHCARE 50,343,944
--------------
TECHNOLOGY (36.88%)
AEROSPACE (0.97%)
United Technologies Corp. 154,025 9,732,455
--------------
COMMUNICATION EQUIPMENT (0.24%)
JDS Uniphase Corp.* 20,350 2,453,447
--------------
COMPUTER PERIPHERALS (1.59%)
EMC Corp.* 128,000 16,000,000
--------------
COMPUTER SOFTWARE/SERVICES (12.44%)
Citrix Systems, Inc.* 127,400 8,440,250
Computer Sciences Corp.* 137,800 10,903,425
Comverse Technology* 14,925 2,820,825
Exodus Communications, Inc.* 56,825 7,983,913
Inktomi Corp.* 37,350 7,283,250
See Accompanying Notes to Financial Statements.
12
<PAGE>
Microsoft Corp.* 403,735 $ 42,896,844
Oracle Systems* 259,600 20,265,025
Peregrine Systems, Inc.* 116,950 7,842,959
RealNetworks, Inc.* 73,675 4,194,870
Siebel Systems, Inc.* 89,250 10,659,797
Verisign, Inc.* 12,725 1,902,388
--------------
Total Computer Software/Services 125,193,546
--------------
COMPUTER SYSTEMS (3.75%)
Hewlett-Packard Co. 58,900 7,807,931
Sun Microsystems, Inc.* 319,700 29,956,889
--------------
Total Computer Systems 37,764,820
--------------
ELECTRONICS/SEMI-CONDUCTORS (5.78%)
Analog Devices, Inc.* 81,900 6,598,069
Intel Corp. 165,675 21,858,745
Texas Instruments, Inc. 131,050 20,968,000
Vitesse Semiconductor Corp.* 90,750 8,734,688
--------------
Total Electronics/Semi-Conductors 58,159,502
--------------
ELECTRONIC SYSTEMS (1.25%)
Symbol Technologies, Inc. 152,737 12,572,164
--------------
NETWORKING/COMMUNICATIONS EQUIPMENT (9.96%)
Cisco Systems, Inc.* 593,348 45,931,202
Copper Mountain Networks, Inc.* 76,150 6,239,541
Nokia Corp. Cl. A, ADR 97,600 21,203,600
Nortel Networks Corp. 212,655 26,794,530
--------------
Total Networking/Communications Equipment 100,168,873
--------------
PRODUCT TECHNOLOGY EQUIPMENT (0.90%)
Teradyne, Inc.* 109,825 9,033,106
--------------
TOTAL TECHNOLOGY 371,077,913
--------------
TRANSPORTATION (0.84%)
AIRLINES/AIR FREIGHT (0.84%)
Expeditors International of Washington, Inc. 60,800 2,416,800
Southwest Airlines Co. 290,677 6,049,715
--------------
TOTAL TRANSPORTATION 8,466,515
--------------
UTILITIES (4.42%)
COMMUNICATIONS (2.81%)
Bell Atlantic Corp. 164,009 10,025,050
MCI Worldcom, Inc.* 401,662 18,200,308
--------------
Total Communications 28,225,358
--------------
ELECTRIC/NATURAL GAS (1.61%)
AES Corp.* 141,025 $ 11,105,718
Duke Energy Corp. 97,750 5,131,875
--------------
Total Electric/Natural Gas 16,237,593
--------------
TOTAL UTILITIES 44,462,951
--------------
TOTAL COMMON STOCKS (COST $659,277,228) $ 987,966,221
--------------
SHORT-TERM INVESTMENTS
(1.46%) PAR VALUE VALUE
--------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES** (1.46%)
American Family Financial Services
5.77% 12-21-2000 $7,586,646 $ 7,586,646
Sara Lee Corp. 5.73% 01-22-2001 526,085 526,085
Warner-Lambert Co. 5.77% 05-19-2000 3,033,844 3,033,844
Wisconsin Corp. Central Credit Union
5.80% 01-02-2001 1,539,000 1,539,000
Wisconsin Electric Power Co.
5.77% 01-02-2001 2,032,581 2,032,581
--------------
TOTAL VARIABLE RATE DEMAND NOTES
(COST $14,718,156) 14,718,156
--------------
TOTAL SHORT-TERM INVESTMENTS (COST $14,718,156) $ 14,718,156
--------------
TOTAL INVESTMENTS IN SECURITIES (99.66%)
(COST $673,995,384)*** $1,002,684,377
--------------
OTHER ASSETS LESS LIABILITIES (0.34%) $ 3,363,809
--------------
NET ASSETS (100.00%) $1,006,048,186
==============
* NON-INCOME PRODUCING SECURITY.
** THE VARIABLE-RATE SECURITIES ARE SUBJECT TO A DEMAND FEATURE WHICH REDUCES
THE REMAINING MATURITY.
*** AGGREGATE COST FOR FEDERAL INCOME TAX PURPOSES IS $675,339,934.
See Accompanying Notes to Financial Statements.
13
<PAGE>
Schedules of Investments -- continued
[LOGO]
BALANCED PORTFOLIO
MARCH 31, 2000
LONG-TERM DEBT SECURITIES
(27.75%) PAR VALUE VALUE
--------------------------------------------------------------------------------
CORPORATE BONDS (17.59%)
FINANCE (16.03%)
AUTOMOBILE (1.26%)
Ford Motor Credit Co. 6.125% 04-28-2003 $ 190,000 $ 183,127
GMAC 5.500% 12-15-2001 500,000 483,883
5.750% 11-10-2003 1,000,000 945,977
--------------
Total Automobile 1,612,987
--------------
BANKS (2.37%)
Bank of America Corp. 6.625% 06-15-2004 800,000 777,840
Citicorp 7.125% 06-01-2003 1,000,000 988,442
NationsBank Corp. 6.125% 07-15-2004 1,350,000 1,282,256
--------------
Total Banks 3,048,538
--------------
CONSUMER (2.51%)
Avco Financial Services 6.000% 08-15-2002 800,000 776,396
Beneficial Corp. 6.350% 12-03-2001 850,000 837,716
Sears Roebuck & Co. 6.670% 07-07-2003 1,000,000 968,732
Sears Roebuck Acceptance Corp.
Medium-Term Note 7.110% 06-19-2001 650,000 646,953
--------------
Total Consumer 3,229,797
--------------
DIVERSIFIED (2.56%)
Associates Corp. of North America
6.000% 06-15-2000 25,000 24,951
7.500% 04-15-2002 100,000 99,972
5.750% 11-01-2003 1,000,000 947,465
Associates Corp. of North America
Medium-Term Note 6.840% 07-03-2001 $ 850,000 $ 847,079
Commercial Credit Corp. 6.875% 05-01-2002 200,000 197,976
6.500% 06-01-2005 1,150,000 1,102,768
General Electric Capital 6.660% 05-01-2018 75,000 74,978
--------------
Total Diversified 3,295,189
--------------
INSURANCE (2.47%)
Hartford Life Inc. 6.900% 06-15-2004 1,000,000 976,306
Reliastar Financial Corp. 6.500% 11-15-2008 1,600,000 1,459,979
Travelers Property & Casualty Corp.
6.750% 04-15-2001 750,000 745,252
--------------
Total Insurance 3,181,537
--------------
LEASING COMPANIES (0.73%)
International Lease Finance 6.250% 10-15-2000 500,000 497,760
International Lease Finance
Medium-Term Note 6.340% 02-01-2002 450,000 442,716
--------------
Total Leasing Companies 940,476
--------------
OTHER FINANCE (4.13%)
Dean Witter Discovry and Co. 6.750% 08-15-2000 300,000 299,696
Goldman Sachs Group 6.650% 05-15-2009 2,000,000 1,856,488
Merrill Lynch 7.375% 08-17-2002 30,000 29,935
6.000% 02-12-2003 500,000 481,876
5.880% 01-15-2004 700,000 661,800
Morgan Stanley Group 6.125% 10-01-2003 215,000 206,665
Morgan Stanley Group Medium-Term Note
5.750% 02-15-2001 500,000 494,337
Salomon Smith Barney Holdings, Inc.
6.625% 07-01-2002 1,300,000 1,277,795
--------------
Total Other Finance 5,308,592
--------------
TOTAL FINANCE 20,617,116
--------------
See Accompanying Notes to Financial Statements.
14
<PAGE>
INDUSTRIAL (1.56%)
ENERGY AND RELATED GOODS AND SERVICES (0.31%)
Texaco Capital Medium-Term Note
7.250% 08-01-2002 $ 400,000 $ 398,263
--------------
MEDICAL AND RELATED GOODS AND SERVICES (0.15%)
SmithKline Beecham PLC Corp.
Medium-Term Note 6.625% 10-01-2005 200,000 193,582
--------------
TELEPHONE (1.10%)
AT&T Corp. 5.625% 03-15-2004 1,500,000 1,413,772
--------------
TOTAL INDUSTRIAL 2,005,617
--------------
TOTAL CORPORATE BONDS 22,622,733
--------------
U.S. TREASURY NOTES (9.38%)
6.750% 04-30-2000 1,000,000 1,001,250
5.750% 10-31-2000 700,000 698,032
7.750% 02-15-2001 970,000 981,519
7.500% 11-15-2001 400,000 406,125
6.375% 08-15-2002 2,500,000 2,493,750
6.250% 02-15-2003 425,000 422,875
5.750% 08-15-2003 700,000 686,657
7.000% 07-15-2006 2,750,000 2,846,250
6.500% 10-15-2006 2,500,000 2,525,783
--------------
TOTAL U.S. TREASURY NOTES 12,062,241
--------------
FOREIGN BONDS (U.S. DOLLAR DENOMINATED) (0.78%)
Hydro Quebec 7.375% 02-01-2003 350,000 349,727
Ontario Global Bond 7.375% 01-27-2003 650,000 652,358
--------------
TOTAL FOREIGN BONDS 1,002,085
--------------
TOTAL LONG-TERM DEBT SECURITIES (COST $36,821,991) $ 35,687,059
--------------
COMMON STOCKS
(62.17%) SHARES VALUE
--------------------------------------------------------------------------------
BASIC INDUSTRY (1.90%)
METALS (0.65%)
Alcoa, Inc. 11,925 $ 837,731
--------------
PAPER AND FOREST PRODUCTS (1.25%)
Bowater, Inc. 5,625 300,234
The Mead Corp. 15,000 524,063
Weyerhaeuser Co. 6,950 396,150
Willamette Industries, Inc. 9,775 392,222
--------------
Total Paper and Forest Products 1,612,669
--------------
TOTAL BASIC INDUSTRY 2,450,400
--------------
CAPITAL GOODS (2.85%)
DIVERSIFIED/MANUFACTURING (0.95%)
Dover Co. 14,925 714,534
Tyco International, Ltd. 10,150 506,231
--------------
Total Diversified/Manufacturing 1,220,765
--------------
MULTI-SECTOR COMPANIES (1.90%)
General Electric Co. 15,725 2,440,323
--------------
TOTAL CAPITAL GOODS 3,661,088
--------------
COMMUNICATION SERVICES (4.29%)
COMMUNICATIONS (3.17%)
ALLTEL Corp. 16,200 1,021,613
CenturyTel, Inc. 19,162 711,389
Nextel Communications, Inc. Cl. A* 6,000 889,500
Qwest Communications International* 12,650 613,525
US West Inc. 3,425 248,740
Voicestream Wireless Corp.* 4,650 598,978
--------------
Total Communications 4,083,745
--------------
TELECOMMUNICATIONS (0.75%)
General Motors Corp. Cl. H* 7,700 958,650
--------------
TELEPHONE (0.37%)
McLeodUSA, Inc.* 5,625 477,070
--------------
TOTAL COMMUNICATION SERVICES 5,519,465
--------------
CONSUMER CYCLICAL (5.23%)
ADVERTISING (0.49%)
Interpublic Group Companies, Inc. 13,250 626,063
--------------
See Accompanying Notes to Financial Statements.
15
<PAGE>
SCHEDULE OF INVESTMENTS -- BALANCED PORTFOLIO, CONTINUED
AUTOS AND AUTO PARTS (0.38%)
Ford Motor Co. 10,750 $ 493,828
--------------
CONSUMER CYCLICAL/MISCELLANEOUS (0.11%)
Mohawk Industries, Inc.* 6,500 145,438
--------------
HOUSEHOLD EQUIPMENT AND PRODUCTS (0.27%)
The Black & Decker Corp. 9,275 348,392
--------------
PUBLISHING (0.29%)
McGraw-Hill Companies, Inc. 8,100 368,550
--------------
RETAIL (3.69%)
Costco Wholesale Corp.* 22,050 1,159,003
Home Depot, Inc. 20,125 1,298,030
The Men's Wearhouse, Inc.* 17,975 532,509
Staples, Inc.* 6,575 131,500
Target Corp. 16,825 1,257,669
Tiffany & Co. 4,425 370,041
--------------
Total Retail 4,748,752
--------------
TOTAL CONSUMER CYCLICAL 6,731,023
--------------
CONSUMER STAPLES (6.46%)
DRUGS (1.15%)
Bristol-Myers Squibb Co. 8,250 476,438
Merck & Co., Inc. 16,150 1,003,319
--------------
Total Drugs 1,479,757
--------------
ENTERTAINMENT (1.99%)
Fox Entertainment Group, Inc. Cl. A* 9,700 290,394
Time Warner, Inc. 14,075 1,407,500
USA Networks, Inc.* 17,050 384,691
The Walt Disney Co. 11,475 474,778
--------------
Total Entertainment 2,557,363
--------------
FOODS/BEVERAGES (2.27%)
Anheuser-Busch Companies, Inc. 15,125 941,531
Canandaigua Brands Inc. Cl. A* 5,900 300,900
Coca-Cola Co. 13,100 614,881
PepsiCo, Inc. 17,925 619,533
The Quaker Oats Co. 7,325 444,078
--------------
Total Foods/Beverages 2,920,923
--------------
HOSPITAL SUPPLIES (0.83%)
Baxter International, Inc. 16,975 1,064,120
--------------
HOUSEHOLD PRODUCTS/COSMETICS (0.22%)
The Procter & Gamble Co. 5,000 281,250
--------------
TOTAL CONSUMER STAPLES 8,303,413
--------------
ENERGY (4.22%)
OIL/CRUDE PRODUCERS (1.13%)
Apache Corp. 29,300 $ 1,457,675
--------------
OIL/INTEGRATED DOMESTIC (0.20%)
Amerada Hess Corp. 3,925 253,653
--------------
OIL/INTEGRATED INTERNATIONAL (2.89%)
Chevron Corp. 6,100 563,869
Conoco, Inc. Cl. A 15,175 373,684
Conoco, Inc. Cl. B 23,772 609,158
Exxon Mobil Corp. 16,979 1,321,178
Texaco, Inc. 15,700 841,913
Total Oil/Integrated International 3,709,802
--------------
TOTAL ENERGY 5,421,130
--------------
FINANCIAL (7.87%)
BANKS (1.23%)
The Chase Manhattan Bank 8,075 704,039
Fleet Boston Financial Group 24,025 876,913
--------------
Total Banks 1,580,952
--------------
DIVERSIFIED FINANCIAL SERVICES (1.73%)
Citigroup, Inc. 28,112 1,667,393
Federal Home Loan Mortgage Corp. 12,700 561,181
--------------
Total Diversified Financial Services 2,228,574
--------------
FINANCIAL SERVICES (2.75%)
American Express Co. 4,000 595,750
Kansas City Southern Industries, Inc. 11,725 1,007,617
Marsh & McLennan Companies, Inc. 17,512 1,931,793
--------------
Total Financial Services 3,535,160
--------------
INSURANCE (0.76%)
American International Group, Inc. 8,980 983,310
--------------
INVESTMENT BANKING/BROKERAGE (1.40%)
Goldman Sachs Group, Inc. 3,450 362,681
Morgan Stanley Dean Witter & Co. 17,600 1,435,500
--------------
Total Investment Banking/Brokerage 1,798,181
--------------
TOTAL FINANCIAL 10,126,177
--------------
See Accompanying Notes to Financial Statements.
16
<PAGE>
HEALTHCARE (3.16%)
BIOTECHNOLOGY (0.94%)
Amgen, Inc.* 7,500 $ 460,313
Genentech, Inc.* 2,950 448,400
Medimmune, Inc.* 1,700 296,013
--------------
Total Biotechnology 1,204,726
--------------
DRUGS (1.67%)
Johnson & Johnson Co. 13,350 935,334
Pharmacia & Upjohn, Inc. 12,800 758,400
Teva Pharmaceutical Industries ADR* 12,350 460,809
--------------
Total Drugs 2,154,543
--------------
HEALTH CARE DIVERSIFIED (0.55%)
Allergan 14,200 710,000
--------------
TOTAL HEALTHCARE 4,069,269
--------------
TECHNOLOGY (22.83%)
AEROSPACE (0.69%)
United Technologies Corp. 14,050 887,784
--------------
COMMUNICATIONS EQUIPMENT (0.16%)
JDS Uniphase Corp.* 1,650 198,928
--------------
COMPUTER PERIPHERALS (0.98%)
EMC Corp.* 10,050 1,256,250
--------------
COMPUTER SOFTWARE/SERVICES (7.48%)
Citrix Systems, Inc.* 10,350 685,688
Computer Sciences Corp.* 11,250 890,156
Comverse Technology* 1,200 226,800
Exodus Communications, Inc.* 4,525 635,763
Inktomi Corp.* 450 87,750
Microsoft Corp.* 31,225 3,317,656
Oracle Systems* 20,700 1,615,894
Peregrine Systems, Inc.* 9,200 616,975
RealNetworks, Inc.* 9,225 525,248
Siebel Systems, Inc.* 7,275 868,908
Verisign, Inc.* 1,025 153,238
--------------
Total Computer Software/Services 9,624,076
--------------
COMPUTER SYSTEMS (2.39%)
Hewlett-Packard Co. 4,900 649,556
Sun Microsystems, Inc.* 25,875 2,424,568
--------------
Total Computer Systems 3,074,124
--------------
ELECTRONIC SYSTEMS (0.84%)
Symbol Technologies, Inc. 13,175 $ 1,084,467
--------------
ELECTRONICS/SEMI-CONDUCTORS (3.58%)
Analog Devices, Inc.* 5,700 459,206
Intel Corp. 13,175 1,738,277
Texas Instruments, Inc. 10,550 1,688,000
Vitesse Semiconductor Corp.* 7,475 719,469
--------------
Total Electronics/Semi-Conductors 4,604,952
--------------
NETWORKING/COMMUNICATIONS EQUIPMENT (6.07%)
Cisco Systems Inc.* 46,296 3,579,260
Copper Mountain Networks, Inc.* 6,350 520,303
Nokia Corp. Cl. A, ADR 7,650 1,661,963
Nortel Networks Corp. 16,250 2,047,500
--------------
Total Networking/Communications Equipment 7,809,026
--------------
PRODUCTION TECHNOLOGY EQUIPMENT (0.64%)
Teradyne, Inc.* 10,000 822,500
--------------
TOTAL TECHNOLOGY 29,362,107
--------------
TRANSPORTATION (0.63%)
AIRLINES/AIR FREIGHT (0.63%)
Expeditors International of Washington, Inc. 8,600 341,850
Southwest Airlines Co. 22,250 463,078
--------------
TOTAL TRANSPORTATION 804,928
--------------
UTILITIES (2.73%)
COMMUNICATIONS (1.71%)
Bell Atlantic Corp. 12,996 794,381
MCI Worldcom Inc. 30,900 1,400,154
--------------
Total Communications 2,194,535
--------------
ELECTRIC/NATURAL GAS (1.02%)
AES Corp. 11,475 903,656
Duke Energy Co. 7,925 416,063
--------------
Total Electric/Natural Gas 1,319,719
--------------
TOTAL UTILITIES 3,514,254
--------------
TOTAL COMMON STOCKS (COST $55,995,966) $ 79,963,254
--------------
See Accompanying Notes to Financial Statements.
17
<PAGE>
SCHEDULE OF INVESTMENTS -- BALANCED PORTFOLIO, CONTINUED
SHORT-TERM INVESTMENTS
(9.84%) PAR VALUE VALUE
--------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES ** (9.84%)
American Family Financial Services
5.77% 12-21-2000 $ 2,946,103 $ 2,946,103
General Mills, Inc. 5.74% 12-03-2000 1,406,885 1,406,885
Sara Lee Corp. 5.73% 01-22-2001 3,123,907 3,123,907
Warner Lambert Co. 5.77% 05-19-2000 1,431,165 1,431,165
Wisconsin Corp. Central Credit Union
5.80% 01-02-2001 2,498,504 2,498,504
Wisconsin Electric Power Co.
5.77% 01-02-2001 1,247,896 1,247,896
--------------
TOTAL VARIABLE RATE DEMAND NOTES
(COST $12,654,460) 12,654,460
--------------
TOTAL SHORT-TERM INVESTMENTS (COST $12,654,460) $ 12,654,460
--------------
TOTAL INVESTMENTS IN SECURITIES (99.76%)
(COST $105,472,417)*** $ 128,304,773
--------------
OTHER ASSETS LESS LIABILITIES (0.24%) $ 307,208
--------------
NET ASSETS (100.00%) $ 128,611,981
==============
* NON-INCOME PRODUCING SECURITY.
** THE VARIABLE-RATE SECURITIES ARE SUBJECT TO A DEMAND FEATURE WHICH REDUCES
THE REMAINING MATURITY.
*** AGGREGATE COST FOR FEDERAL INCOME TAX PURPOSES IS $105,548,320.
[LOGO]
INTERMEDIATE FIXED INCOME PORTFOLIO
MARCH 31, 2000
LONG-TERM DEBT SECURITIES
(81.64%) PAR VALUE VALUE
--------------------------------------------------------------------------------
CORPORATE BONDS (32.76%)
FINANCE (29.20%)
AUTOMOBILE (2.52%)
Ford Motor Credit Co. 6.125% 04-28-2003 $ 125,000 $ 120,478
GMAC Medium-Term Note 6.500% 12-06-2004 500,000 480,095
--------------
Total Automobile 600,573
--------------
BANKS (3.26%)
Banc One Corp. 7.375% 12-01-2002 780,000 776,406
--------------
CONSUMER (6.10%)
Beneficial Corp. Medium-Term Note
6.510% 12-03-2003 500,000 485,073
Sears Roebuck & Co. 6.670% 07-07-2003 $1,000,000 $ 968,732
--------------
Total Consumer 1,453,805
--------------
DIVERSIFIED (4.04%)
Associates Corp. of North America
Medium-Term Note 6.840% 07-03-2001 350,000 348,797
Commercial Credit TRV 6.500% 06-01-2005 400,000 383,572
General Electric Capital 6.660% 05-01-2018 230,000 229,932
--------------
Total Diversified 962,301
--------------
INVESTMENT BANKING/BROKERAGE (12.45%)
Goldman Sachs Group 6.650% 05-15-2009 600,000 556,946
Merrill Lynch 5.880% 01-15-2004 475,000 449,078
See Accompanying Notes to Financial Statements.
18
<PAGE>
Morgan Stanley Dean Witter 6.125% 10-01-2003 $ 200,000 $ 192,246
6.375% 12-05-2003 175,000 169,266
5.625% 01-20-2004 500,000 470,467
Salomon Smith Barney Holdings 6.625% 07-01-2002 1,150,000 1,130,357
--------------
Total Investment Banking/Brokerage 2,968,360
--------------
LEASING COMPANIES (0.83%)
International Lease Finance 6.250% 10-15-2000 200,000 199,104
--------------
TOTAL FINANCE 6,960,549
--------------
INDUSTRIAL (3.56%)
TELEPHONE (3.56%)
AT&T Corp. 5.625% 03-15-2004 900,000 848,266
--------------
TOTAL INDUSTRIAL 848,266
--------------
TOTAL CORPORATE BONDS 7,808,815
--------------
U.S. TREASURY NOTES (46.82%)
7.750% 02-15-2001 50,000 50,594
7.500% 11-15-2001 600,000 609,188
6.625% 03-31-2002 1,000,000 1,001,875
6.375% 08-15-2002 1,300,000 1,296,750
6.250% 02-15-2003 75,000 74,625
5.750% 08-15-2003 1,500,000 1,471,407
7.250% 05-15-2004 1,000,000 1,031,250
7.000% 07-15-2006 2,400,000 2,484,000
6.500% 10-15-2006 2,100,000 2,121,657
6.625% 05-15-2007 1,000,000 1,019,688
--------------
TOTAL U.S. TREASURY NOTES 11,161,034
--------------
FOREIGN BONDS (U.S.DOLLAR DENOMINATED) (2.06%)
Hydro Quebec 7.375% 02-01-2003 200,000 199,844
Ontario Global Bond 7.375% 01-27-2003 290,000 291,052
--------------
TOTAL FOREIGN BONDS 490,896
--------------
TOTAL LONG-TERM DEBT SECURITIES
(COST $20,088,623) $ 19,460,745
--------------
SHORT-TERM INVESTMENTS
(17.33%) PAR VALUE VALUE
--------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES ** (17.33%)
American Family Financial Services
5.77% 12-21-2000 $ 907,904 $ 907,904
General Mills, Inc. 5.74% 12-03-2000 907,863 907,863
Sara Lee Corp. 5.73% 01-22-2001 276,773 276,773
Warner Lambert Co. 5.77% 05-19-2000 276,415 276,415
Wisconsin Corp. Central Credit Union
5.80% 01-02-2001 854,278 854,278
Wisconsin Electric Power Co.
5.77% 01-02-2001 906,723 906,723
--------------
TOTAL VARIABLE RATE DEMAND NOTES
(COST $4,129,956) 4,129,956
--------------
TOTAL SHORT-TERM INVESTMENTS (COST $4,129,956) $ 4,129,956
--------------
TOTAL INVESTMENTS IN SECURITIES (98.97%)
(COST $24,218,579)*** $ 23,590,701
--------------
OTHER ASSETS LESS LIABILITIES (1.03%) $ 245,687
--------------
NET ASSETS (100.00%) $ 23,836,388
==============
** THE VARIABLE-RATE SECURITIES ARE SUBJECT TO A DEMAND FEATURE WHICH REDUCES
THE REMAINING MATURITY.
*** AGGREGATE COST FOR FEDERAL INCOME TAX PURPOSES IS $24,218,579.
See Accompanying Notes to Financial Statements.
19
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
RAINIER INVESTMENT MANAGEMENT MUTUAL FUNDS
MARCH 31, 2000
<TABLE>
<CAPTION>
Small/Mid Intermediate
Cap Equity Core Equity Balanced Fixed Income
Portfolio Portfolio Portfolio Portfolio
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
ASSETS
Investments in securities
at market value (Note 2)
(cost of $401,995,732, $673,995,384,
$105,472,417 and $24,218,579 respectively) $ 468,017,318 $1,002,684,377 $ 128,304,773 $ 23,590,701
Cash -- 6,763 518 --
Receivables
Investment securities sold 15,216,986 3,969,029 243,762 --
Dividends and interest 310,377 594,311 804,655 381,053
Fund shares sold 118,884 835,095 13,259 --
Prepaid expenses -- 33,493 19,383 4,901
-------------- -------------- -------------- --------------
Total assets 483,663,565 1,008,123,068 129,386,350 23,976,655
-------------- -------------- -------------- --------------
LIABILITIES
Payables
Payables for investment
securities purchased 14,690,228 770,997 -- --
Fund shares redeemed 236,012 344,472 63,068 --
Distributions to shareholders -- -- 568,373 102,390
Due to Investment Advisor (Note 3) 335,944 623,828 61,434 19,192
Due under Distribution Plan (Note 3) 98,807 207,943 26,850 1,829
Accrued expenses 55,603 112,604 51,636 13,848
Deferred trustees compensation (Note 5) 9,023 15,038 3,008 3,008
-------------- -------------- -------------- --------------
Total liabilities 15,425,617 2,074,882 774,369 140,267
-------------- -------------- -------------- --------------
NET ASSETS $ 468,237,948 $1,006,048,186 $ 128,611,981 $ 23,836,388
============== ============== ============== ==============
COMPOSITION OF NET ASSETS
Paid-in capital $ 346,153,411 $ 642,334,452 $ 103,462,138 $ 24,462,042
Accumulated undistributed net
investment income (loss) 11,470 302 (512) 2,791
Accumulated undistributed net
realized gain on investments 56,051,481 32,024,439 2,317,999 (567)
Net unrealized appreciation
(depreciation) on investments 66,021,586 328,688,993 22,832,356 (627,878)
-------------- -------------- -------------- --------------
Net assets $ 468,237,948 $1,006,048,186 $ 128,611,981 $ 23,836,388
============== ============== ============== ==============
Number of shares issued and outstanding
(unlimited shares authorized) no par value 16,259,565 31,879,690 6,839,632 2,015,552
============== ============== ============== ==============
Net asset value per share $ 28.80 $ 31.56 $ 18.80 $ 11.83
============== ============== ============== ==============
</TABLE>
See Accompanying Notes to Financial Statements.
20
<PAGE>
STATEMENTS OF OPERATIONS
RAINIER INVESTMENT MANAGEMENT MUTUAL FUNDS
FOR THE FISCAL YEAR ENDING MARCH 31, 2000
<TABLE>
<CAPTION>
Small/Mid Core Intermediate
Cap Equity Equity Balanced Fixed Income
Portfolio Portfolio Portfolio Portfolio
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
INCOME
Dividend income $ 3,922,994 $ 8,304,742 $ 598,505 $ --
Interest income 309,756 809,749 2,314,351 1,254,461
------------- ------------- ------------- -------------
Total income 4,232,750 9,114,491 2,912,856 1,254,461
------------- ------------- ------------- -------------
EXPENSES
Investment advisory fees (Note 3) 3,602,997 6,853,758 718,521 96,445
Custodian fees 113,244 204,698 35,974 5,287
Administration fees (Note 3) 217,411 363,904 100,209 21,432
Fund accounting fees 49,196 80,193 34,645 23,307
Transfer agent fees 39,124 70,381 17,285 12,026
Legal fees 4,532 10,552 1,398 282
Distribution fees (Note 3) 1,059,705 2,284,586 256,615 21,432
Audit fees 22,260 37,883 7,378 7,419
Reports to shareholders 68,116 103,483 22,829 6,030
Registration expense 59,506 136,221 38,623 1,252
Trustee fees 14,178 23,667 4,391 4,390
Amortization of deferred organization costs 1,586 1,586 1,586 1,586
Miscellaneous expense 18,974 36,297 9,662 1,048
------------- ------------- ------------- -------------
Total expenses 5,270,829 10,207,209 1,249,116 201,936
Less: fees waived and expenses
absorbed (Note 3) -- -- (19,754) (84,019)
------------- ------------- ------------- -------------
Net expenses 5,270,829 10,207,209 1,229,362 117,917
------------- ------------- ------------- -------------
NET INVESTMENT INCOME (LOSS) (1,038,079) (1,092,718) 1,683,494 1,136,544
------------- ------------- ------------- -------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) on investments 85,726,484 72,990,860 5,471,283 (566)
Net change in unrealized appreciation
(depreciation) on investments 75,339,005 183,448,956 12,272,961 (732,319)
------------- ------------- ------------- -------------
NET GAIN (LOSS) ON INVESTMENTS 161,065,489 256,439,816 17,744,244 (732,885)
------------- ------------- ------------- -------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 160,027,410 $ 255,347,098 $ 19,427,738 $ 403,659
============= ============= ============= =============
</TABLE>
See Accompanying Notes to Financial Statements.
21
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
RAINIER INVESTMENT MANAGEMENT MUTUAL FUNDS
<TABLE>
<CAPTION>
SMALL/MID CAP EQUITY PORTFOLIO CORE EQUITY PORTFOLIO
---------------------------------- ----------------------------------
For the fiscal For the fiscal For the fiscal For the fiscal
year ending year ending year ending year ending
03/31/00 03/31/99 03/31/00 03/31/99
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income (loss) $ (1,038,079) $ (203,782) $ (1,092,718) $ 1,827,996
Net realized gain (loss) on investments sold 85,726,484 (28,570,141) 72,990,860 31,449,581
Net change in unrealized appreciation
(depreciation) on investments 75,339,005 (79,168,758) 183,448,956 37,171,114
--------------- --------------- --------------- ---------------
Increase (decrease) in net assets
resulting from operations 160,027,410 (107,942,681) 255,347,098 70,448,691
--------------- --------------- --------------- ---------------
Distributions to shareholders
From net investment income -- (42,403) (95,818) (2,181,041)
From net realized gain on investments sold -- (19,938,706) (51,779,011) (42,700,545)
--------------- --------------- --------------- ---------------
Total distributions -- (19,981,109) (51,874,829) (44,881,586)
--------------- --------------- --------------- ---------------
Capital share transactions
Proceeds from shares sold 103,535,228 278,151,655 254,130,029 408,690,850
Net asset value of shares issued on
reinvestment of distributions -- 19,640,243 51,272,679 43,346,167
Cost of shares redeemed (225,352,240) (255,522,649) (413,414,237) (265,681,232)
--------------- --------------- --------------- ---------------
Net increase (decrease) from
capital share transactions (121,817,012) 42,269,249 (108,011,529) 186,355,785
--------------- --------------- --------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS 38,210,398 (85,654,541) 95,460,740 211,922,890
NET ASSETS
Beginning of period 430,027,550 515,682,091 910,587,446 698,664,556
--------------- --------------- --------------- ---------------
End of period $ 468,237,948 $ 430,027,550 $ 1,006,048,186 $ 910,587,446
=============== =============== =============== ===============
CHANGE IN SHARES OUTSTANDING
Shares sold 4,421,836 12,280,568 9,152,362 17,068,322
Shares issued on reinvestment of distributions -- 967,976 1,843,015 1,878,898
Shares redeemed (9,868,285) (12,232,763) (15,046,220) (11,335,251)
--------------- --------------- --------------- ---------------
Net increase (decrease) in shares
outstanding (5,446,449) 1,015,781 (4,050,843) 7,611,969
=============== =============== =============== ===============
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
INTERMEDIATE FIXED
BALANCED PORTFOLIO INCOME PORTFOLIO
------------------------------ ------------------------------
For the fiscal For the fiscal For the fiscal For the fiscal
year ending year ending year ending year ending
03/31/00 03/31/99 03/31/00 03/31/99
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income (loss) $ 1,683,494 $ 1,510,728 $ 1,136,544 $ 1,002,694
Net realized gain (loss) on
investments sold 5,471,283 4,358,246 (566) 422,596
Net change in unrealized appreciation
(depreciation) on investments 12,272,961 2,497,259 (732,319) (301,373)
------------- ------------- ------------- -------------
Increase (decrease) in net assets
resulting from operations 19,427,738 8,366,233 403,659 1,123,917
------------- ------------- ------------- -------------
Distributions to shareholders
From net investment income (1,675,733) (1,518,814) (1,130,637) (1,002,770)
From net realized gain on investments sold (4,460,597) (5,222,707) -- (450,583)
------------- ------------- ------------- -------------
Total distributions (6,136,330) (6,741,521) (1,130,637) (1,453,353)
------------- ------------- ------------- -------------
Capital share transactions
Proceeds from shares sold 38,160,255 36,319,404 13,774,522 8,934,910
Net asset value of shares issued on
reinvestment of distributions 5,993,660 6,517,285 1,117,851 1,450,801
Cost of shares redeemed (25,677,221) (20,341,670) (10,734,159) (9,612,188)
------------- ------------- ------------- -------------
Net increase (decrease) from
capital share transactions 18,476,694 22,495,019 4,158,214 773,523
------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS 31,768,102 24,119,731 3,431,236 444,087
NET ASSETS
Beginning of period 96,843,879 72,724,148 20,405,152 19,961,065
------------- ------------- ------------- -------------
End of period $ 128,611,981 $ 96,843,879 $ 23,836,388 $ 20,405,152
============= ============= ============= =============
CHANGE IN SHARES OUTSTANDING
Shares sold 2,166,562 2,295,716 1,156,168 705,059
Shares issued on reinvestment of distributions 344,984 412,053 93,467 115,787
Shares redeemed (1,471,182) (1,241,975) (900,613) (758,029)
------------- ------------- ------------- -------------
Net increase (decrease) in shares
outstanding 1,040,364 1,465,794 349,022 62,817
============= ============= ============= =============
</TABLE>
See Accompanying Notes to Financial Statements.
23
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand each
Portfolio's financial performance for the past five years. Certain information
reflects financial results for a single Portfolio share. The total returns in
the table represent the rate that an investor would have earned or lost on an
investment in the Portfolio (assuming reinvestment of all dividends and
distributions). This information has been audited by KPMG LLP, whose report,
along with each Portfolio's financial statements, is included in this annual
report.
RAINIER INVESTMENT MANAGEMENT MUTUAL FUNDS FOR A SHARE
OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
SMALL/MID CAP EQUITY PORTFOLIO
---------------------------------------------------------------------------
For the fiscal For the fiscal For the fiscal For the fiscal For the fiscal
year ending year ending year ending year ending year ending
03/31/00 03/31/99 03/31/98 03/31/97 03/31/96
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 19.81 $ 24.92 $ 18.54 $ 17.89 $ 13.89
Income from investment operations
Net investment income (loss) (0.06) (0.01) (0.01) 0.05 0.05
Net realized and unrealized gain (loss)
on investments 9.05 (4.24) 8.71 2.43 5.17
----------- ----------- ----------- ----------- -----------
Total from investment operations 8.99 (4.25) 8.70 2.48 5.22
----------- ----------- ----------- ----------- -----------
Distributions
From net investment income -- (0.01) (0.01) (0.06) (0.06)
From net realized gains -- (0.85)1 (2.31) (1.77) (1.16)
----------- ----------- ----------- ----------- -----------
Total distributions -- (0.86) (2.32) (1.83) (1.22)
----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 28.80 $ 19.81 $ 24.92 $ 18.54 $ 17.89
=========== =========== =========== =========== ===========
Total return 45.38% (17.18%) 48.68% 14.57% 38.38%
=========== =========== =========== =========== ===========
Net assets at end of period (in 000's) $ 468,238 $ 430,028 $ 515,682 $ 136,341 $ 79,495
=========== =========== =========== =========== ===========
Ratio of expenses to average net assets
Before fees waived and expenses absorbed 1.25% 1.25% 1.26% 1.33% 1.46%
After fees waived and expenses absorbed n/a n/a n/a 1.40% 1.48%
=========== =========== =========== =========== ===========
Ratio of net investment income (loss)
to average net assets, after fees waived
and expenses absorbed (0.24%) (0.04%) (0.06%) 0.27% 0.66%
=========== =========== =========== =========== ===========
Portfolio turnover rate 199.04% 143.70% 107.17% 130.54% 151.37%
=========== =========== =========== =========== ===========
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
CORE EQUITY PORTFOLIO
-------------------------------------------------------------------------------
For the fiscal For the fiscal For the fiscal For the fiscal For the fiscal
year ending year ending year ending year ending year ending
03/31/00 03/31/99 03/31/98 03/31/97 03/31/96
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 25.34 $ 24.67 $ 18.97 $ 17.53 $ 13.84
Income from investment operations
Net investment income (loss) (0.03) 0.05 0.07 0.13 0.11
Net realized and unrealized gain
on investments 7.93 1.95 8.86 2.86 5.13
------------- ------------- ------------- ------------- -------------
Total from investment operations 7.90 2.00 8.93 2.99 5.24
------------- ------------- ------------- ------------- -------------
Distributions
From net investment income -- (0.07) (0.07) (0.13) (0.11)
From net realized gains (1.68) (1.26)2 (3.16) (1.42) (1.44)
------------- ------------- ------------- ------------- -------------
Total distributions (1.68) (1.33) (3.23) (1.55) (1.55)
------------- ------------- ------------- ------------- -------------
Net asset value, end of period $ 31.56 $ 25.34 $ 24.67 $ 18.97 $ 17.53
============= ============= ============= ============= =============
Total return 32.06% 8.64% 49.64% 17.88% 38.64%
============= ============= ============= ============= =============
Net assets at end of period (in 000's) $ 1,006,048 $ 910,587 $ 698,665 $ 260,629 $ 107,665
============= ============= ============= ============= =============
Ratio of expenses to average net assets
Before fees waived and expenses absorbed 1.11% 1.13% 1.14% 1.18% 1.30%
After fees waived and expenses absorbed n/a n/a n/a 1.22% 1.29%
============= ============= ============= ============= =============
Ratio of net investment income (loss)
to average net assets, after fees waived
and expenses absorbed (0.12%) 0.23% 0.37% 0.74% 1.07%
============= ============= ============= ============= =============
Portfolio turnover rate 82.98% 132.91% 119.88% 146.12% 138.02%
============= ============= ============= ============= =============
</TABLE>
(1) Of this amount, the fund designates $0.17 as a capital gain dividend per
IRC Section 852(b)(3).
(2) Of this amount, the fund designates $0.68 as a capital gain dividend per
IRC Section 852(b)(3).
See Accompanying Notes to Financial Statements.
25
<PAGE>
Financial Highlights, continued
RAINIER INVESTMENT MANAGEMENT MUTUAL FUNDS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
BALANCED PORTFOLIO
---------------------------------------------------------------------------
For the fiscal For the fiscal For the fiscal For the fiscal For the fiscal
year ending year ending year ending year ending year ending
03/31/00 03/31/99 03/31/98 03/31/97 03/31/96
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 16.70 $ 16.78 $ 14.76 $ 14.53 $ 12.96
Income from investment operations
Net investment income 0.28 0.28 0.35 0.37 0.38
Net realized and unrealized gain
on investments 2.90 0.85 4.46 1.28 2.82
----------- ----------- ----------- ----------- -----------
Total from investment operations 3.18 1.13 4.81 1.65 3.20
----------- ----------- ----------- ----------- -----------
Distributions
From net investment income (0.28) (0.28) (0.35) (0.37) (0.37)
From net realized gains (0.80) (0.93)1 (2.44) (1.05) (1.26)
----------- ----------- ----------- ----------- -----------
Total distributions (1.08) (1.21) (2.79) (1.42) (1.63)
----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 18.80 $ 16.70 $ 16.78 $ 14.76 $ 14.53
=========== =========== =========== =========== ===========
Total return 19.59% 7.22% 34.57% 11.83% 25.58%
=========== =========== =========== =========== ===========
Net assets at end of period (in 000's) $ 128,612 $ 96,844 $ 72,724 $ 40,630 $ 32,080
=========== =========== =========== =========== ===========
Ratio of expenses to average net assets
Before fees waived and expenses absorbed 1.21% 1.22% 1.28% 1.31% 1.50%
After fees waived and expenses absorbed 1.19% 1.19% 1.19% 1.19% 1.19%
=========== =========== =========== =========== ===========
Ratio of net investment income
to average net assets, after fees waived
and expenses absorbed 1.63% 1.78% 2.09% 2.50% 2.76%
=========== =========== =========== =========== ===========
Portfolio turnover rate 67.55% 108.28% 102.98% 133.68% 114.85%
=========== =========== =========== =========== ===========
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
INTERMEDIATE FIXED INCOME PORTFOLIO
--------------------------------------------------------------------------
For the fiscal For the fiscal For the fiscal For the fiscal For the fiscal
year ending year ending year ending year ending year ending
03/31/00 03/31/99 03/31/98 03/31/97 03/31/96
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 12.24 $ 12.45 $ 12.08 $ 12.33 $ 12.00
Income from investment operations
Net investment income 0.63 0.68 0.71 0.65 0.70
Net realized and unrealized gain (loss)
on investments (0.41) 0.11 0.37 (0.25) 0.34
---------- ---------- ---------- ---------- ----------
Total from investment operations 0.22 0.79 1.08 0.40 1.04
---------- ---------- ---------- ---------- ----------
Distributions
From net investment income (0.63) (0.68) (0.71) (0.64) (0.70)
From net realized gains -- (0.32)2 -- (0.01) (0.01)
---------- ---------- ---------- ---------- ----------
Total distributions (0.63) (1.00) (0.71) (0.65) (0.71)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 11.83 $ 12.24 $ 12.45 $ 12.08 $ 12.33
========== ========== ========== ========== ==========
Total return 1.90% 6.49% 9.11% 3.35% 8.85%
========== ========== ========== ========== ==========
Net assets at end of period (in 000's) $ 23,836 $ 20,405 $ 19,961 $ 19,303 $ 9,740
========== ========== ========== ========== ==========
Ratio of expenses to average net assets
Before fees waived and expenses absorbed 0.94% 1.04% 1.19% 1.53% 2.17%
After fees waived and expenses absorbed 0.55% 0.55% 0.55% 0.95% 0.95%
========== ========== ========== ========== ==========
Ratio of net investment income
to average net assets, after fees waived
and expenses absorbed 5.31% 5.39% 5.73% 5.42% 5.69%
========== ========== ========== ========== ==========
Portfolio turnover rate 8.18% 54.59% 15.99% 8.37% 15.49%
========== ========== ========== ========== ==========
</TABLE>
(1) Of this amount, the fund designates $0.45 as a capital gain dividend per
IRC Section 852(b)(3).
(2) Of this amount, the fund designates $0.24 as a capital gain dividend per
IRC Section 852(b)(3).
See Accompanying Notes to Financial Statements.
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NOTES TO FINANCIAL STATEMENTS
RAINIER INVESTMENT MANAGEMENT MUTUAL FUNDS
MARCH 31, 2000
NOTE 1. ORGANIZATION
Rainier Investment Management Mutual Funds (the "Trust") was organized as a
business trust in Delaware on December 15, 1993 and is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as a diversified,
open-end management investment company. The Trust consists of four separate
series of portfolios: Small /Mid Cap Equity Portfolio, Core Equity Portfolio,
Balanced Portfolio, and Intermediate Fixed Income Portfolio (each a "Fund" and
collectively the "Funds").
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies are consistently followed by
the Funds in the preparation of their financial statements, and such policies
are in conformity with generally accepted accounting principles for investment
companies.
A) SECURITY VALUATION: The Funds invest in a range of securities, generally
including equities and U.S. Government securities. Equity securities are valued
at the last sale price (for exchange-listed securites) or the last bid price (if
lacking any sales and for over-the-counter securities). Debt securities
generally are valued at the mean between the last bid and asked prices. Debt
securities with 60 days or less remaining tomaturity are valued on an amortized
cost basis.
Securities for which market quotations are not readily available are valued
at fair value as determined in good faith by or under the direction of the Board
of Trustees. There were no such securities held during the year ending March 31,
2000.
B) SECURITY TRANSACTIONS, DIVIDENDS AND DISTRIBUTIONS: Security
transactions are recorded ontrade date. Dividend income is recognized on the
ex-dividend date, and interest income is recorded on an accrual basis. Realized
gains or losses are reported onthe basis of identified cost of securities
delivered. Bond discounts are accreted and premiums are amortized. Distributions
to shareholders are recorded on the ex-dividend date.
C) FEDERAL INCOME TAXES: The Funds intend tocomply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of their net investment income and any net realized
capital gains to shareholders of the Funds. Therefore, no provision is made for
Federal income or excise taxes. Due to the timing of dividend distributions and
the differences in accounting for income and realized gains (losses) for
financial statement and federal income tax purposes, the fiscal year in which
amounts are distributed may differ from the year inwhich the income and realized
gains (losses) are recorded by the Funds.
On the Statement of Assets and Liabilities, as a result of permanent
book-to-tax differences, reclassification adjustments have been made between the
paid-in capital, undistributed net investment income and undistributed net
realized gain (loss) on investment accounts.
As of March 31, 2000, t he Intermediate Fixed Income Portfolio has a
capital loss carryforward of $566 expiring on March 31, 2008.
D) DEFERRED ORGANIZATION COSTS: Organiza- tion costs of $22,375 have been
capitalized for each Fund as of April 8, 1994, and are being amortized over a
period of 60 months beginning on the date the Funds' registration became
effective. Rainier Investment Management, Inc.(R) (the "Investment Advisor") has
agreed that, in the event any of the initial shares are redeemed during the
60-month period for amortizing the Funds' organization costs, the proceeds will
be reduced for the unamortized balances of such costs in the same proportion as
the number of shares redeemed bears to the number of initial shares outstanding
at the time of redemption. As of March 31, 2000, the organization costs for each
Fund have been fully amortized.
E) USE OF ESTIMATES: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amount of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
28
<PAGE>
NOTE 3. INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
A) INVESTMENT MANAGEMENT AGREEMENT: The Trust, on behalf of the Funds, has
entered into aninvestment management agreement with the Investment Advisor.
Under the terms of the agreement, the Trust will pay a fee equal to the
following annual percentages of average daily net assets:
Small/Mid Cap Equity Portfolio 0.85%
Core Equity Portfolio 0.75%
Balanced Portfolio 0.70%
Intermediate Fixed Income Portfolio 0.50%
Effective April 1, 1997, the Investment Advisor has voluntarily undertaken
to limit the management fee for the Intermediate Fixed Income Portfolio to 0.45%
of the Portfolio's average annual net assets.
Although not required to do so, the Investment Advisor has contractually
agreed to reimburse each Fund to the extent necessary so that its ratio of
operating expenses to average daily net assets will not exceed the following
levels. Overall operating expenses for each Fund will not fall below the
applicable percentage limitation until the Investment Advisor has been fully
reimbursed for fees foregone and expenses paid by the Investment Advisor under
this agreement:
Small/Mid Cap Equity Portfolio 1.48%
Core Equity Portfolio 1.29%
Balanced Portfolio 1.19%
Intermediate Fixed Income Portfolio 0.55%
These percentages are based on the average daily net assets of the Funds,
exclusive of interest, taxes, brokerage commissions, extraordinary expenses and
sales charges.
This contract has a one-year term, renewable at the end of each fiscal
year. The agreement may be terminated by either party upon 60 days' written
notice.
B) DISTRIBUTION PLAN: The Trust, on behalf of the Funds, has approved a
Distribution Plan (the"Plan") inaccordance with Rule 12b-1 under the 1940 Act.
The Plan provides that the Funds will pay a fee to the Investment Advisor (as
the distribution coordinator) at an annual rate of up to 0.25% ofeach Fund's
average daily net assets. The fee is paid to the Investment Advisor as
reimbursement for, or inanticipation of, expenses incurred for
distribution-related activities.
Effective April 1, 1997, the Investment Advisor has voluntarily undertaken
to limit the distribution fee for the Intermediate Fixed Income Portfolio to
0.10% of the Portfolio's average annual net assets.
C) ADMINISTRATIVE SERVICES AGREEMENT: The Trust, on behalf of the Funds,
has entered into an administrative services agreement with an unrelated third
party. Under the terms of the agreement, each Fund will pay a monthly fee based
on the greater of $40,000 annual minimum or the annual rate of:
0.10% of first $100 million of average daily net assets
0.05% of next $100 million of average daily net assets
0.03% of average net assets over $200 million.
Effective April 1, 1998, the Intermediate Fixed Income Portfolio is not
subject to the $40,000 annual minimum.
NOTE 4. PURCHASES AND SALES OF SECURITIES
The aggregate security purchases and sales, other than short-term
obligations and U.S. Government securities, for the year ending March 31, 2000
were as follows:
FUND PURCHASES SALES
---- ------------ ------------
Small/Mid Cap Equity $829,899,787 $955,773,895
Core Equity 741,775,659 914,421,100
Balanced 67,012,094 64,685,772
Intermediate Fixed Income 1,491,739 1,490,299
The Balanced Portfolio and Intermediate Fixed Income Portfolio purchased
$752,031 and $1,456,141, and sold $400,000 and $0, respectively, of U.S.
Government securities. There were no purchases or sales of U.S. Government
securities by the Small/Mid Cap Equity Portfolio and Core Equity Portfolio.
29
<PAGE>
Notes to Financial Statements, continued
The aggregate unrealized appreciation and depreciation of portfolio
securities at March 31, 2000, based on costs for federal income tax purposes,
were as follows:
GROSS GROSS NET
UNREALIZED UNREALIZED UNREALIZED
FUND APPRECIATION DEPRECIATION APPR./(DEPR.)
---- ------------- ------------- -------------
Small/Mid Cap Equity $ 68,512,990 $ 4,018,477 $ 64,994,513
Core Equity 328,688,993 1,344,550 327,344,443
Balanced 23,967,283 1,210,830 22,756,453
Intermediate Fixed Income 0 627,878 (627,878)
NOTE 5. RELATED PARTY TRANSACTIONS
Certain officers and Trustees of the Funds arealso officers and/or
directors of the Investment Advisor. Outside Trustees are compensated by the
Trust at the total rate of $6,000 per year plus $1,500 for each meeting of the
Board of Trustees attended and any travel expenses incurred in such meetings,
which is allocated among the Funds.
On December 10, 1998the Trust approved a Deferred Compensation Plan for
Trustees (the "Plan"). Trustees can elect to receive payment in cash or defer
payments provided for in the Plan.If a trustee elects to defer payment, the Plan
provides for the creation of a deferred payment account (phantom share account).
This account accumulates the deferred fees earned and the value of the account
is adjusted to reflect a value which would have been earned if the account had
been invested in a designated investment. The Funds recognize as trustee expense
amounts accrued as meetings are attended plus the change in the value of the
phantom share account.
30
<PAGE>
INDEPENDENT AUDITORS' REPORT
THE BOARD OF TRUSTEES AND SHAREHOLDERS
RAINIER INVESTMENT MANAGEMENT MUTUAL FUNDS
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of Rainier Investment Management Mutual
Funds (comprised of the Small/Mid Cap Equity, Core Equity, Balanced and
Intermediate Fixed Income Portfolios) as of March 31, 2000, and the related
statements of operations for the year then ended, the statements of changes in
net assets for each of the years in the two-year period then ended, and
financial highlights for the periods indicated herein. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards required that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of March 31, 2000, by correspondence with the custodian and
other appropriate audit procedures. 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 aforementioned Funds of Rainier Investment Management Mutual Funds
as of March 31, 2000, the results of their operations, thechanges in their net
assets, and their financial highlights for the periods indicated herein, in
conformity with accounting principles generally accepted in the United States of
America.
/s/ KPMG LLP
Seattle, Washington
May 5, 2000
DIRECTORY OF FUNDS' SERVICE PROVIDERS
INVESTMENT ADVISOR
Rainier Investment Management, Inc.,(R)601 Union Street, Suite 2801, Seattle, WA
98101
DISTRIBUTOR
First Fund Distributors, Inc., 4455 E. Camelback Road, Suite 261-E, Phoenix, AZ
85018
ADMINISTRATOR
Investment Company Administration,LLC,2020 E. Financial Way, Suite 100,
Glendora, CA 91741
CUSTODIAN, TRANSFER AGENT AND FUND ACCOUNTANT
Firstar Mutual Fund Services, LLC, 615 E. Michigan Street, Milwaukee, WI 53202
INDEPENDENT AUDITORS
KPMG LLP, 3100 Two Union Square, 601 Union Street, Seattle, WA 98101
LEGAL COUNSEL
Paul, Hastings, Janofsky & Walker, LLP,345 California Street, San Francisco, CA
94104
31
<PAGE>
INDEX DESCRIPTIONS
The Standard & Poor's 500 Stock Index is an unmanaged index composed of 500
industrial, utility, transportation and financial companies of the U.S. markets.
The Index represents about 75% of New York Stock Exchange ("NYSE") market
capitalization and 30% of NYSE issues. It is a capitalization-weighted index
calculated on a total return basis with dividends reinvested.
The Russell 1000(R) Index, the Russell Midcap(TM) Index, the Russell 2500(TM)
Index and the Russell 2000(R) Index are unmanaged indices composed of the
equities of companies ranging in value from approximately $1.4 to $407.2
billion, $1.4 billion to $11.2 billion, $178.2 million to $3.8 billion, and
$178.2 million to $1.3 billion, respectively, as of May 31, 1999.
The Lehman Brothers Government/Corporate Intermediate Bond Index ("Lehman
Intermediate Bond Index") is an unmanaged index composed of all bonds covered by
the Lehman Brothers Government/Corporate Index with maturities between one and
9.99 years.
The Consumer Price Index ("CPI") is a measure of change in consumer prices as
determined by a monthly survey of the U.S. Bureau of Labor Statistics.
The Salomon Brothers 3-Month Treasury Bill Index ("91-Day U.S. Treasury Bill
Index") is an unmanaged index of equal dollar amounts of three-month Treasury
bills purchased at the beginning of each of three consecutive months.
The "Balanced Index" consists of 50% Standard & Poor's 500 Stock Index, 40%
Lehman Brothers Government/Corporate Intermediate Bond Index, 10% 91-Day U.S.
Treasury Bill Index.
32
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Seattle, Washington 98101
(800) 248-6314
www.rainierfunds.com
