Transamerica Premier Funds
1998 Annual Report
Table of Contents
President's Report 1
Investment Adviser Outlook 2
Transamerica Premier Aggressive Growth Fund 4
Transamerica Premier Small Company Fund 6
Transamerica Premier Equity Fund 8
Transamerica Premier Value Fund 10
Transamerica Premier Index Fund 12
Transamerica Premier Balanced Fund 20
Transamerica Premier High Yield Bond Fund 23
Transamerica Premier Bond Fund 26
Transamerica Premier Cash Reserve Fund 28
Financial Statements
Statements of Assets and Liabilities 31
Statements of Operations 32
Statements of Changes in Net Assets 33
Financial Highlights 35
Notes to Financial Statements 40
Prresident's Report
Dear Fellow Shareholders
I would like to begin by saying, "Welcome!" For many of you, this is your first
Annual Report from the Transamerica Premier Funds. At the end of 1998, the
number of shareholders in the Transamerica Premier Funds had increased almost
200%, when compared to year-end 1997. With so many mutual fund companies from
which to choose, we are extremely proud that you have included the Transamerica
Premier Funds in your investment portfolio.
We often ask shareholders, "How did you hear about the Transamerica Premier
Funds?" It may have been one of our ads in Kiplinger's magazine, an article in
Smart Money, or a recommendation by a trusted friend or family member. Or
perhaps it was hard not to notice the exceptional performance Transamerica
Premier Funds achieved in 1998, earning mentions in various financial
publications throughout the year, as several Funds moved into the top 10 of
their categories.
By year-end, the 1998 results were outstanding. Five of the Transamerica Premier
Funds ranked in the top 10 within their respective categories, according to
Lipper Analytical Services, Inc. (see table). The Transamerica Premier Small
Company Fund ranked first among 637 small company funds for the year ended 1998.
This Fund returned a phenomenal 80.27% for the year! Although the Transamerica
Premier Small Company and the Transamerica Premier Aggressive Growth Funds were
just launched on June 30, 1997, they have consistently achieved high rankings.
Also in the spotlight during 1998 were three Transamerica Premier Funds that
were first introduced in October 1995. The Transamerica Premier Equity, Index
and Balanced Funds earned the coveted OFive-Star' rating from Morningstar in
October 1998. Morningstar, a widely recognized industry source for unbiased
mutual fund information, uses the Ostar system' to represent a fund's historical
risk-adjusted performance, compared with the other funds in its class. If the
fund scores in the top 10% of its class, it receives five stars.*
With the increasing popularity of the internet, many of you are accessing
important Premier Fund information through our web site. As a result, in
November, we introduced a new and improved web site. At
www.Transamericafunds.com., the account look-up capability allows shareholders
to view account balances and recent account activity. This feature will be
extended in the near future to service full transactions, including buying,
selling and exchanging shares. The site is also updated each business day by
posting the most up-to-date fund information, such as closing net asset values
(including dollar and percentage change for each net asset value) and
year-to-date performance. In addition, annualized performance vs. fund
benchmarks, as well as top fund holdings, will be updated quarterly.
As a Transamerica Premier Funds shareholder, we hope you will realize that we
remain steadfast in our commitment to you. We will continue to bring you the
investment management expertise of Transamerica, a financial institution that
has-for decades-delivered solid returns for shareholders through not only mutual
funds, but insurance separate accounts, variable annuities and retirement plans.
The Investment Outlook from Transamerica Investment Services, the Investment
Adviser for the Transamerica Premier Funds, is provided on the Pages that
follow. It is our hope that whether the market is climbing to new highs, or
correcting itself, you will come to trust the Transamerica Premier Funds with
your long-term investments.
We wish you a healthy and prosperous New Year!
Sincerely,
Nicki Bair
President
* Among 2,802 domestic equity funds as of December 31, 1998. Past performance is
no guarantee of future results. Morningstar proprietary ratings reflect
historical risk-adjusted performance. These ratings may change monthly and are
calculated in excess of 90-day Treasury bill returns. Morningstar ratings are
calculated from a fund's three year average annual returns in excess of 90-day
treasury bill returns with appropriate fee adjustments, and a risk factor that
reflects fund performance below 90-day t-bill returns.
<TABLE>
<CAPTION>
Transamerica Premier Funds
Year ended December 31, 1998
Category Rank Total
<S> <C> <C>
Premier Aggressive Growth Capital Appreciation 5 250
Premier Small Company Small Cap 1 637
Premier Balanced Balanced 10 409
Premier Bond Corporate Debt BBB 7 99
Premier Cash Reserve Money Market 6 308
Source: Lipper Analytical Services, Inc.
</TABLE>
Page 1
Transamerica Premier Funds 1998 Annual Report
Transamerica Investment Adviser Outlook
Following unprecedented market volatility in the second half of 1998, the U.S.
financial environment is notably upbeat at the beginning of 1999. Our economy is
on solid footing, bolstered by a strong labor market, high levels of consumer
confidence, and low rates for interest and inflation.
The robust growth of 1998 marked seven consecutive years of expansion. Although
our economy will probably grow more slowly in 1999, especially during the second
half of the year, we do not anticipate a recession, and we remain positive about
both the corporate bond and stock markets.
Factors in Slower Economic Growth
Consumer spending and capital investments in business, factors that fueled
economic growth in recent years, should slow in 1999. In addition, the swelling
trade imbalance should continue to hamper growth.
Moderate Consumer Spending
Most economic indicators point toward continued strong consumer spending
throughout 1999. The current savings rate remains very low, however, despite
favorable interest rates and employment statistics. We expect a gradual shift to
higher savings levels that will limit consumer spending.
The strength of the stock market has created a "wealth effect" for most
households, with the rise in equity prices significantly bolstering many
individuals' net worth. As the market continued to register solid gains, many
households felt less of a need to save, and consumed more of their income.
During 1998, the savings rate drifted downward to essentially zero. In 1999, we
believe that spending habits will slow as individuals depend less on the gains
of the stock market and contribute more towards personal savings.
Home purchases have been one of the strongest segments of recent consumer
spending. The levels of both new and existing home sales remain around their
record highs, while home building has lagged the brisk pace of sales, and new
home inventories are fairly low. The relationship of strong housing demand and
limited supply is expected to support economic growth during the first half of
1999.
Reduced Capital Investment
Our economic expansion has also been fueled by an increase in capital outlays by
businesses that invested in technology to increase productivity. The drop in
utilization measures to the lower 80% level, however, indicates that the need to
add capacity has greatly diminished. At the same time, given the outlook for
slower growth in corporate profits, business will likely reduce capital
investments. Although firms will continue to seek productivity gains, most of
these gains will be derived from previously initiated investment programs. Thus,
capital outlays should slow in 1999, as less additional capacity is needed and
the outlook for corporate profits remains uncertain.
Lagging Trade Sector
The trade deficit widened to over $150 billion in 1998, and the trade sector
will no doubt continue to hamper economic growth in 1999. Since both the Asian
and Latin American economies continue to face difficulties, the inexpensive
goods from these regions should have an adverse impact on net exports.
Inflation to Remain in Check
Inexpensive foreign goods should keep international competition intense and
price levels in check in 1999. In addition, global weakness and excess supplies
in many industries will cause commodity prices to remain depressed. Despite the
pressure on labor costs, we expect inflation to continue to be restrained, as
lower material prices and increased efficiencies offset higher wages.
Intense Global Competition
Today, companies compete on an increasingly global basis, and many businesses
have lost their pricing power due to foreign competition. The intense
competition of international trade should continue to impose downward pressure
on prices, as the excess supply of tradable goods keeps competition fierce and
prices low.
Steadfast Commodity Prices
Prices for tradable goods, especially oil, fell substantially in 1998. The
downward pressure should continue in 1999, as weak foreign economies create
excess supply. At the same time, the inability to cut oil production will
contribute to steady commodity prices.
Higher Labor Costs
During 1998, a tight labor market coexisted with low inflation. Although recent
economic reports show that the labor market remains healthy, the strength of the
labor market is gradually translating into higher wages. So far businesses have
offset higher labor costs with lower material prices and productivity gains.
This has allowed firms to keep price levels fairly low and still maintain profit
margins, causing inflation to remain subdued, a trend we expect to continue in
1999.
Low Interest Rates Interest rate levels should stay low as economic growth
moderates. We believe that the monetary policy will remain on hold during the
first quarter of 1999, as economic reports continue to show a steady U. S.
economic expansion. At the same time, the fragile global market should keep
policy makers from raising rates.
Steady Monetary Policy
Since recent statistics show that our economy remains strong, further easing in
monetary policy appears unlikely. At the same time, relative stability has
returned to the financial markets and a credit crunch seems remote. Given the
fragile state of the global economy and the low level of inflation, a rate
increase also appears unlikely. We believe that the strength of the U.S.
economy, offset by weakness overseas, will keep policymakers on hold during the
first quarter of 1999.
Stable Financial Markets
As the continued strength of the U.S. economy becomes more apparent and
corporate credit risk diminishes, bond investors will gradually shift from
Treasuries to corporates. A favorable economic climate characterized by steady
growth, low interest rates and benign inflation will also help support current
stock market valuations.
Strengthening Bond Market
During the second half of 1998, Treasury yields fell sharply as a flight to
quality occurred. The threat of an economic slowdown and a credit crunch caused
bond investors to shift out of corporate bonds and into Treasury securities. As
relative stability returns to financial markets, the quality premium in Treasury
bonds should continue to dissipate. In addition, as it becomes more apparent
that the economy will continue to expand, although at a slower pace, a shift
into corporate bonds will push Treasury yields higher and corporate bond spreads
tighter.
Highly-Valued Stock Market
Equity valuations remain high, including the Standard & Poor's 500 Stock Index
with a price/earnings ratio of 27 times projected earnings. During 1999, market
volatility should remain as investors closely watch corporate earnings. Heavy
global competition has inhibited many companies' ability to raise prices, and
most firms will focus on cutting costs in order to drive profits. We expect to
see continued consolidation and corporate downsizing, as well as gains in
productivity derived from technological advancement. These factors should lead
to lower unit costs and help sustain profit margins.
Positive Environment for Stocks and Bonds
In 1999, we believe that U.S. economic growth should ease from its current
robust pace. Despite global pressures, the U. S. economy should be able to avoid
a recession and continue to expand at a steady pace. Given this economic
outlook, we remain fairly bullish on both the corporate bond and stock markets.
We will continue to maintain our long-term holdings in technology, financial
services, and productivity enhancing products and services.
Transamerica Premier funds 1998 annual report Page 2
Page 3 Transamerica Premier Funds 1998 Annual Report
Transamerica Premier aggressive growth Fund
Portfolio Manager: Philip W. Treick
Fund Performance
The Transamerica Premier Aggressive Growth Fund (Investor Class) performed
exceptionally well in 1998. For the 12-month period ended December 31, 1998, the
Fund ranked fourth among 250 capital appreciation funds in the country,
according to Lipper Analytical Services, Inc. The Fund's total return for the
12-month period ended December 31, 1998 was 84.07%, in comparison to a 28.58%
advance by the S&P500 for the same period. Since its inception on June 30, 1997,
the Fund has earned an annualized total return of 71.05%, while the S&P500 has
returned 26.36%.
Portfolio Manager Comments
The Fund invests in companies leading their respective industry sectors. Each
company in the portfolio possesses exceptional products or services led by
management teams focused on strategies designed to enhance growth and
profitability. During the year, market volatility enabled us to purchase shares
of superior companies at distressed prices. Consistent execution of the Fund's
investment policy, combined with strategic response to market movements, enabled
the Fund to turn in extraordinary returns for 1998. An example of this was Envoy
Corporation, one of the Fund's largest holdings. A leading healthcare
transaction processor, Envoy experienced large movements in valuation during the
year offering the opportunity to buy a leading company at a distressed
valuation. However, Envoy is now merging with Quintiles, the leading company
specializing in clinical trials research. We believe the merger strengthens both
companies and look forward to owning the new combined company. Other large
positions continue to be the leading computer vendor Dell, and the leading
Internet merchant Amazon.com.
Portfolio Asset Mix
[pie chart goes here]
Going Forward
We will continue to focus on investing, versus trading. Currently, this
portfolio is concentrated with large positions in less than 30 exceptional
companies, each painstakingly selected for its capacity to perform. It is
unlikely that market conditions will present us with an opportunity to repeat
our performance of 1998. However, we hope to hold each investment over a long
period of time and would encourage the same approach by investors in this Fund.
Thank you for your continued investment in the Transamerica Premier Aggressive
Growth Fund.
comparison of change in value of a $10,000 investment in Transamerica
Premier aggressive growth fund with the S&P500 index**
[mountain chart]
Total Returns Annualized
As of December 31, 1998 Since Inception* One Year
Investor Class 71.05% 84.07%
Class A 64.86% 74.24%
Class M 69.37% 81.67%
S&P500 Index 26.36% 28.58% Investor Class ($22,420 at 12/31/98) Class A ($21,212
at 12/31/98) Class M ($22,089 at 12/31/98) S&P500 Index ($14,218 at 12/31/98)
The Standard & Poor's 500 Composite Stock Price Index ("S&P500") consists of 500
widely held, publicly traded common stocks. The S&P500 Index does not reflect
any commissions or fees which would be incurred by an investor purchasing the
securities it represents.
* Investor Class - June 30, 1997. Class A and Class M - June 30, 1998.
** Hypothetical illustration of $10,000 invested at inception, assuming
reinvestment of dividends and capital gains at net asset value through December
31, 1998. Note: All performance information represents past performance and is
not indicative of future results. If the Investment Adviser had not waived fees
and the Administrator had not reimbursed expenses, the aggregate total return of
the Fund would have been lower. Performance shown for Class A and Class M prior
to June 30, 1998 is based on the Investor Class of this Fund, but is
recalculated using the current maximum sales charge for each class. Annualized
returns are based on the July 1, 1997 commencement date for the Investor Class.
Transamerica Premier Funds 1998 Annual Report Page 4
Transamerica Premier Aggressive Growth Fund
Schedule of Investments - December 31, 1998 Market
Shares Value
Shares or Market
Principal Amount Value
COMMON STOCKS - 96.8%
Aerospace & Defense - 2.4%
Gulfstream Aerospace Corporation (a) 80,000 $ 4,260,000
Broadcasting - 3.1%
Clear Channel Communications, Inc. (a) 100,000 5,450,000
Business Services - 9.2%
Envoy Corporation (a) 250,000 14,562,500
First Data Corporation 55,000 1,742,812
16,305,312
Chemicals - 6.5%
Minerals Technologies, Inc. 80,000 3,275,000
Monsanto Company 175,000 8,312,500
11,587,500
Commercial Services - 3.1%
Sodexho Marriott Services, Inc. 200,000 5,537,500
Computers & Business Equipment - 8.8%
Cisco Systems, Inc. (a) 50,000 4,640,625
Dell Computer Corporation (a) 150,000 10,978,125
15,618,750
Divesified Operations - 6.6%
Berkshire Hathaway, Inc. (a) 5,000 11,748,825
Drugs & Health Care - 5.4%
Alternative Living Services, Inc. (a) 279,000 9,555,750
Electronics - 8.3%
Applied Materials, Inc. (a) 136,500 5,826,844
Intel Corporation 75,000 8,892,187
14,719,031
Leisure & Entertainment - 6.6%
Pixar, Inc. (a) 110,000 3,850,000
Speedway Motorsports, Inc. (a) 275,000 7,837,500
11,687,500
Retail - 18.9%
Amazon.com, Inc. (a) 67,000 $ 21,523,750
Fred Meyer, Inc. (a) 65,000 3,916,250
Hollywood Entertainment Corporation (a) 297,000 8,093,250
33,533,250
Software - 15.0%
i2 Technologies, Inc. (a) 135,000 4,100,625
Microsoft Corporation (a) 55,000 7,627,812
ProBusiness Services, Inc. (a) 205,500 9,350,250
SAP AG ADR (b) 155,000 5,589,688
26,668,375
Transportation - 2.9%
Kansas City Southern Industries, Inc. 105,000 5,164,688
Total Common Stocks
(cost $124,363,863) 171,836,481
U.S. GOVERNMENT AGENCY SECURITY - 4.3%
Federal Home Loan Mortgage Corporation
(cost $7,542,328) 4.250% 01/04/99 $7,545,000 7,542,328
Total Investments - 101.1%
(cost $131,906,191)* 179,378,809
Liabilities in Excess of Other Assets - (1.1)% (1,883,121)
Net Assets - 100.0% $ 177,495,688
(a) Non-income producing security
(b) ADR - American Depositary Receipts
Aggregate cost for Federal tax purposes. Aggregate gross unrealized appreciation
for all securities in which there is an excess of value over tax cost and
aggregate gross unrealized depreciation for all securities in which there is an
excess of tax cost over value were $50,257,654 and $2,785,036, respectively. Net
unrealized appreciation for tax purposes is $47,472,618.
See notes to financial statements Page 5
Transamerica Premier Funds 1998 Annual Report
Transamerica Premier Small Company Fund
Portfolio Manager: Philip W. Treick
Fund Performance
The Transamerica Premier Small Company Fund (Investor Class) performed
exceptionally well in 1998. For the 12-month period ended December 31, 1998, the
Fund ranked first among 637 capital appreciation funds in the country, according
to Lipper Analytical Services, Inc. The Fund's total return for the 12-month
period ended December 31, 1998 was 80.27%, in comparison to a -2.55% decline by
the Russell 2000 Index for the same period. Since its inception on June 30,
1997, the Fund has earned an annualized total return of 71.53%, while the
Russell 2000 has returned 5.38%.
Portfolio Manager Comments
Securities selection was key in generating the superior results in the Premier
Small Company Fund. Excellent investment recommendations were made by the
investment team of Dan Prislin, Tim Gaumer, Chris Bonavico and Jeff Van Harte.
Given the fact that most small companies will remain small, we are relentless in
trying to identify small companies with large opportunities. In 1998, nearly
every company in the portfolio performed well, and some may no longer even
qualify as small companies! How do we deal with this admittedly good problem?
Gary Rolle', our chief investment officer, has often said, "one has to be
careful not to pick the flowers then water the weeds." My strategy is to invest
fund inflows in small companies, thereby diluting the percentage of the
portfolio allocated to newly minted large capitalization companies. This, in
effect, keeps your tax burden low, and the portfolio turnover at a minimum. At
the same time, there is exposure to some fantastic companies. In the short run,
however, it is possible for a company like Amazon.com to appreciate faster than
the overall growth in fund inflows. When investing, patience is a virtue.
Portfolio Asset Mix
[pie chart]
Going Forward
We do not subscribe to the belief that small companies in general are poised to
appreciate in price merely because of a couple of years of under performance. We
believe security selection is still the most important factor in achieving
success in this type of portfolio. Our strategy will remain the same in 1999. We
will continue to focus on small companies that we feel have the greatest
probability of successfully executing against large opportunities.
Thank you for your continued investment in the Transamerica Premier Small
Company Fund.
comparison of change in value of a $10,000 investment in Transamerica Premier
small company fund with the Russell 2000 Index**
[mountain chart]
Total Returns Annualized
As of December 31, 1998 Since Inception* One Year
Investor Class 71.53% 80.27%
Class A 65.38% 70.72%
Class M 69.84% 77.92%
Russell 2000 Index 5.38% -2.55% Investor Class ($22,516 at 12/31/98) Class A
($21,313 at 12/31/98) Class M ($22,183 at 12/31/98) Russell 2000 Index ($10,821
at 12/31/98) The Russell 2000 Index measures the performance of the 2,000
smallest companies (approximately 7%) in the Russell 3000 Index (an index
composed of the 3000 largest U.S. companies by market capitalization,
representing approximately 98% of the U.S. equity market).
* Investor Class - June 30, 1997. Class A and Class M - June 30, 1998
** Hypothetical illustration of $10,000 invested at inception, assuming
reinvestment of dividends and capital gains at net asset value through December
31, 1998. Note: All performance information represents past performance and is
not indicative of future results. If the Investment Adviser had not waived fees
and the Administrator had not reimbursed expenses, the aggregate total return of
the Fund would have been lower. Performance shown for Class A and Class M prior
to June 30, 1998 is based on the Investor Class of this Fund, but is
recalculated using the current maximum sales charge for each class. Annualized
returns are based on the July 1, 1997 commencement date for the Investor Class.
Transamerica Premier funds 1998 annual report Page 6
Transamerica Premier Small Company Fund
Schedule of Investments - December 31, 1998
Shares or Market
Principal Amount Value
COMMON STOCKS - 87.6%
Auto Repair Centers - 4.5%
Midas, Inc. 300,000 $ 9,337,500
Biological Products - 3.4%
Millipore Corporation 250,000 7,109,375
Business Services - 10.8%
Envoy Corporation (a) 250,000 14,562,500
Nielsen Media Research 450,000 8,100,000
22,662,500
Chemicals - 5.7%
Eco Soil Systems, Inc. (a) 683,500 5,980,625
Minerals Technologies, Inc. 147,500 6,038,282
12,018,907
Drugs & Health Care - 10.2%
Alternative Living Services, Inc. (a) 385,000 13,186,250
ChiRex, Inc. (a) 385,000 8,229,375
21,415,625
Electronics - 4.0%
Level One Communications, Inc. (a) 235,000 8,342,500
Food & Beverages - 1.7%
Dreyer's Grand Ice Cream, Inc. 238,000 3,599,750
Leisure & Entertainment - 7.1%
Pixar, Inc. (a) 65,000 2,275,000
Speedway Motorsports, Inc. (a) 300,000 8,550,000
Vail Resorts, Inc. (a) 185,000 4,070,000
14,895,000
Retail - 10.1%
Amazon.com, Inc. (a) 40,000 12,850,000
Hollywood Entertainment Corporation (a) 300,000 8,175,000
21,025,000
Software - 16.4%
HNC Software, Inc. (a) 200,000 $ 8,087,500
i2 Technologies, Inc. (a) 223,000 6,773,625
ProBusiness Services, Inc. (a) 211,500 9,623,250
Transaction Systems Architects, Inc. (a) 197,000 9,850,000
34,334,375
Technology - 11.1%
Cymer, Inc. (a) 500,000 7,312,500
Exodus Communications, Inc. (a) 180,000 11,565,000
VeriSign, Inc. (a) 75,000 4,434,375
23,311,875
Transportation - 2.6%
C.H. Robinson Worldwide, Inc. 207,500 5,382,031
Total Common Stocks
(cost $137,018,557) 183,434,438
U.S. GOVERNMENT AGENCY SECURITY - 12.3%
Federal Home Loan Mortgage Corporaton
(cost $25,814,854) 4.250% 01/04/99$25,824,000 25,814,854
Total Investments - 99.9%
(cost $162,833,411)* 209,249,292
Other Assets Less Liabilities - 0.1% 141,118
Net Assets - 100.0% $209,390,410
(a) Non-income producing security
* Aggregate cost for Federal tax purposes. Aggregate gross unrealized
appreciation for all securities in which there is an excess of value over tax
cost and aggregate gross unrealized depreciation for all securities in which
there is an excess of tax cost over value were $48,094,599 and $1,858,139,
respectively. Net unrealized appreciation for tax purposes is $46,236,460.
See notes to financial statements Page 7
Transamerica Premier Funds 1998 Annual Report
Transamerica Premier Equity Fund
Portfolio Manager: Jeffrey S. Van Harte
Fund Performance
The Premier Equity Fund (Investor Class) performed extremely well in 1998. The
Fund generated a total return of 33.85% for the year compared to a 28.58%
advance by the S&P500 for the same period. Since its inception in October 1995,
the fund has earned an annualized total return of 32.59% while the S&P500 has
returned 28.06%.
Portfolio Manager Comments
A few large cap stocks were the key drivers contributing to the strong success
of the Fund over the past year. The reason is that there are very few companies
that have learned to deal with deflation, or the decline in the prices of goods
and services. Those companies that have learned to make deflation their friend
are winning the battle for customers, market share and profit growth. These are
new winners in the stock market and we seek to own them.
Great examples of companies that have learned to deal with deflation are found
within the Fund's top two holdings, Dell Computer and Charles Schwab. Dell has
mastered the direct model of delivering desktop PC's by holding little inventory
and custom manufacturing so as to always deliver the best technology at the
lowest price to their customers. Schwab made a remarkable transition this year.
The company chose to go to their flat rate pricing for electronic trading over
the internet and telephone. Average revenue per trade dropped from over $70 to
around $50, yet the company's profitability blossomed. This is how companies win
in the world of deflation-delivering the best possible customer service or
product, at a low price.
Portfolio Asset Mix
[pie chart]
Going Forward
We expect weaker world economies and continued pressure on prices in 1999. Given
our outlook, our equity selection strategy is focused on high quality companies
that have the wherewithal to withstand weak economies, and have a business model
that works well in a deflationary environment. Thank you for your continued
interest in Transamerica Premier Equity Fund. comparison of change in value of a
$10,000 investment in Transamerica Premier equity fund with the S&P500 index**
[mountain chart]
Total Returns Annualized
As of December 31, 1998 Since Inception* One Year
Investor Class 32.59% 33.85%
Class A 30.17% 26.78%
Class M 31.57% 31.97%
S&P500 Index 28.06% 28.58% Investor Class ($25,024 at 12/31/98) Class A ($23,575
at 12/31/98) Class M ($24,404 at 12/31/98) S&P500 Index ($22,354 at 12/31/98)
The Standard & Poor's 500 Composite Stock Price Index ("S&P500") consists of 500
widely held, publicly traded common stocks. The S&P500 Index does not reflect
any commissions or fees which would be incurred by an investor purchasing the
securities it represents.
* Investor Class - October 2, 1995. Class A and Class M - June 30, 1998.
** Hypothetical illustration of $10,000 invested at inception, assuming
reinvestment of dividends and capital gains at net asset value through December
31, 1998. Note: All performance information represents past performance and is
not indicative of future results. If the Investment Adviser had not waived fees
and the Administrator had not reimbursed expenses, the aggregate total return of
the Fund would have been lower. Performance shown for Class A and Class M prior
to June 30, 1998 is based on the Investor Class of this Fund, but is
recalculated using the current maximum sales charge for each class. Transamerica
Premier funds 1998 annual report Page 8
Transamerica Premier Equity Fund
Schedule of Investments - December 31, 1998
Market
Shares Value
Shares or Market
Principal Amount Value
Common Stocks - 98.1%
Business Services - 6.3%
Envoy Corporation (a) 180,000 $ 10,485,000
First Data Corporation 250,000 7,921,875
18,406,875
Chemicals - 6.4%
Minerals Technologies, Inc. 175,000 7,164,062
Monsanto Company 240,000 11,400,000
18,564,062
Commercial Services - 4.1%
Sodexho Marriott Services, Inc. 430,000 11,905,625
Computers & Business Equipment - 13.6%
Cisco Systems, Inc. (a) 150,000 13,921,875
Dell Computer Corporation (a) 350,000 25,615,625
39,537,500
Conglomerates - 3.1%
Gillette Company 185,000 8,937,812
Diversified Operations - 3.8%
Berkshire Hathaway, Inc. (a) 4,725 11,103,750
Drugs & Health Care - 7.9%
McKesson Corporation 70,000 5,534,375
Merck & Company, Inc. 55,000 8,122,813
Pfizer, Inc. 75,000 9,407,812
23,065,000
Electronics - 7.8%
Applied Materials, Inc. (a) 250,000 10,671,875
Intel Corporation 100,000 11,856,250
22,528,125
Financial Services - 10.9%
Charles Schwab Corporation 375,000 21,070,312
Franklin Resources, Inc. 100,000 3,200,000
Merrill Lynch & Company, Inc. 110,000 7,342,500
31,612,812
Hotels & Restaurants - 4.0%
McDonald's Corporation 150,000 11,493,750
Human Resources - 2.7%
Robert Half International, Inc. (a) 175,000 $ 7,820,313
Leisure & Entertainment - 3.0%
Pixar, Inc. (a) 250,000 8,750,000
Retail - 5.2%
Fred Meyer, Inc. (a) 250,000 15,062,500
Retail Grocery - 3.2%
Safeway, Inc. (a) 155,000 9,445,313
Software - 12.7%
HBO & Company 100,000 2,868,750
IMS Health, Inc. 175,000 13,201,562
Microsoft Corporation (a) 120,000 16,642,500
SAP AG ADR (b) 115,000 4,147,188
36,860,000
Transportation - 3.4%
Kansas City Southern Industries, Inc. 200,000 9,837,500
Total Common Stocks
(cost $202,864,200) 284,930,937
repurchase agreement - 1.6%
State Street Bank and Trust Company, 4.00% due 01/04/99, (collateralized by
$4,500,000 par value U.S. Treasury Note, 6.375%, due 03/31/01, with a
value of
$4,737,038, cost $4,640,000) $4,640,000 4,640,000
Total Investments - 99.7%
(cost $207,504,200)* 289,570,937
Other Assets Less Liabilities - 0.3% 749,884
Net Assets - 100.0% $ 290,320,821
(a) Non-income producing security (b) ADR - American Depositary Receipts *
Aggregate cost for Federal tax purposes. Aggregate gross unrealized appreciation
for all securities in which there is an excess of value over tax cost and
aggregate gross unrealized depreciation for all securities in which there is an
excess of tax cost over value were $88,397,679 and $6,330,942, respectively. Net
unrealized appreciation for tax purposes is $82,066,737. See notes to financial
statements Page 9 Transamerica Premier Funds 1998 Annual Report
Transamerica Premier value Fund
Portfolio Manager: Christopher J. Bonavico
Fund Performance
The Transamerica Premier Value Fund (Investor Class) was launched on March 31,
1998. The Fund's investment strategy showed its merit by year end. In the fourth
quarter, the Fund generated a 26.87% total return, compared to fourth quarter
results of 21.30% for the S&P500 Index.
Portfolio Manager Comments
The Fund's goal is to find well managed businesses that are not the current wall
street favorites that also are taking action to increase their share price. The
primary factor we seek to find is fundamental change - either in management or
competitive structure - that will create value for shareholders.
The Fund also invests in companies which are simply out of favor. Companies in
this category have typically fallen out of favor in the short term, but hold
significant promise due to the strength of their long term franchise.
Strong performers in the Transamerica Premier Value portfolio include Midas,
Monsanto and Niagara-Mohawk, among others. Midas put in place experienced
management who are taking actions to make it a stronger competitor in the
automotive services market place. We recognized the company's potential for
profit gains and began buying shares. Monsanto was investing for years in new
growth businesses of pharmaceuticals and agricultural sciences. Our research
revealed that Monsanto was beginning to see a large return on those investments.
The company recently received FDA approval to market a breakthrough arthritis
drug with large profit potential. Niagara-Mohawk is a New York State utility
that is anything but boring. New management eliminated unprofitable contracts
for power generation. It now focuses solely on the more stable and profitable
business line of power distribution, and is returning those profits to
shareholders. As a result of beneficial changes in all of these companies, their
equity values have demonstrated rapid appreciation.
Portfolio Asset Mix
[pie chart]
Going Forward
We continue to be optimistic in our outlook for the stock market. We expect the
combination of low inflation, low interest rates, and profit gains by better
companies to continue in 1999. Increasingly, however, security selection will be
important to achieve good returns in the stock market. Competition is increasing
in many sectors of the U.S. economy and only the best managed companies will
continue to thrive in this environment. The Transamerica Premier Value Fund will
continue to offer investors a vehicle to own shares in well managed companies
trading at attractive valuations. Thank you for your continued interest in the
Transamerica Premier Value Fund.
Comparison of change in value of a $10,000 investment in Transamerica Premier
value fund with the S&P500 index**
[mountain chart]
Total Returns
As of December 31, 1998 Since Inception* One Year
Investor Class 6.19% N/A
Class A 0.54% N/A
Class M 4.86% N/A
S&P500 Index 12.84% 28.58% Investor Class ($10,619 at 12/31/98) Class A ($10,054
at 12/31/98) Class M ($10,486 at 12/31/98) S&P500 Index ($11,284 at 12/31/98)
The Standard & Poor's 500 Composite Stock Price Index ("S&P500") consists of 500
widely held, publicly traded common stocks. The S&P500 Index does not reflect
any commissions or fees which would be incurred by an investor purchasing the
securities it represents.
* Investor Class - March 31, 1998. Class A and Class M - June 30, 1998.
** Hypothetical illustration of $10,000 invested at inception, assuming
reinvestment of dividends and capital gains at net asset value through December
31, 1998. Note: All performance information represents past performance and is
not indicative of future results. If the Investment Adviser had not waived fees
and the Administrator had not reimbursed expenses, the aggregate total return of
the Fund would have been lower. Performance shown for Class A and Class M prior
to June 30, 1998 is based on the Investor Class of this Fund, but is
recalculated using the current maximum sales charge for each class.
Transamerica Premier funds 1998 annual report Page 10
Transamerica Premier Value Fund
Schedule of Investments - December 31, 1998
Market
Shares Value
Market
Shares Value
Common Stocks - 99.3%
Auto Repair Centers - 5.6%
Midas, Inc. 16,500 $ 513,562
Banking - 2.4%
Fifth Third Bancorp 3,000 213,938
Biological Products - 3.1%
Millipore Corporation 10,000 284,375
Business Services - 7.8%
First Data Corporation 9,500 301,031
The Dun & Bradstreet Corporation 13,000 410,313
711,344
Chemicals - 6.1%
Minerals Technologies, Inc. 9,000 368,437
Monsanto Company 3,900 185,250
553,687
Commercial Services - 4.6%
Sodexho Marriott Services, Inc. 15,000 415,312
Conglomerates - 2.1%
Gillette Company 4,000 193,250 Containers & Packaging - 2.0% Sealed Air
Corporation (a) 3,500 178,719 Diversified Operations - 8.1%
Berkshire Hathaway, Inc. (a) 315 740,250
Drugs & Health Care - 3.6%
Alternative Living Services, Inc. (a) 9,500 325,375
Electric Utilities - 9.4%
IPALCO Enterprises, Inc. 5,000 277,187
Niagara Mohawk Power Corporation (a) 36,000 580,500
857,687
Electrical Equipment - 2.8%
Raychem Corporation 8,000 258,500
Electronics - 13.4%
Applied Materials, Inc. (a) 10,000 426,875
Intel Corporation 4,000 474,250
Level One Communications, Inc. (a) 9,000 319,500
1,220,625
Financial Services - 4.0%
Merrill Lynch & Company, Inc. 5,500 $ 367,125
Food & Beverages - 2.5%
Dreyer's Grand Ice Cream, Inc. 15,000 226,875
Hotels & Restaurants - 4.2%
McDonald's Corporation 5,000 383,125
Human Resources - 1.5%
Robert Half International, Inc. (a) 3,000 134,063
Office Furnishings & Supplies - 2.0%
Standard Register Company 6,000 185,625
Retail - 6.6%
Fred Meyer, Inc. (a) 10,000 602,500
Software - 2.1%
IMS Health, Inc. 2,500 188,594
Transportation - 5.4%
Kansas City Southern Industries, Inc. 10,000 491,875
Total Common Stocks
(cost $7,588,623) 9,046,406
preferred stock - 1.4%
Sealed Air Corporation
(cost $154,185) 2,500 129,688
Total Investments - 100.7%
(cost $7,742,808)* 9,176,094
Liabilities in Excess of Other Assets - (0.7)% (62,263)
Net Assets - 100.0% $ 9,113,831
(a) Non- income producing security
* Aggregate cost for Federal tax purposes. Aggregate gross unrealized
appreciation for all securities in which there is an excess of value over tax
cost and aggregate gross unrealized depreciation for all securities in which
there is an excess of tax cost over value were $1,564,303 and $140,753,
respectively. Net unrealized appreciation for tax purposes is $1,423,550. See
notes to financial statements Page 11
Transamerica Premier Funds 1998 Annual Report
Transamerica Premier Index Fund
Portfolio Manager: Lisa L. Hansen
Fund Performance
The Transamerica Premier Index Fund (Investor Class) earned a total return of
28.45% for the year ended December 31, 1998, in comparison to a total return of
28.58% for the S&P500 Index. Since its inception in October 1995, the Fund has
earned an annualized total return of 27.71%, relative to a 28.06% return for the
S&P500. This performance is consistent with the Fund's long-term goal of
tracking overall stock market returns, as measured by the S&P500 Index.
Portfolio Manager Comments
The broad equity markets provided unparalleled returns to investors in 1998.
Although our domestic markets experienced volatility in the third quarter, the
fourth quarter brought with it a strong resurgence in upward price movements,
taking the U.S. stock market to new all time highs.
To achieve its goal, the Fund invests in a portfolio of approximately 500 stocks
which closely mirror the composition of the S&P500 Index. The Fund's holdings
are weighted in accordance with the stocks of the S&P500, so that as closely as
possible, the Fund's performance will conform to that of the Index. Investors
seeking to capture the approximate returns of the broad U.S. stock market can
expect to do so through this fund. Broad diversification within the portfolio
also enhances share price stability during periods of rapid market change.
While the Fund's performance will not match that of the S&P500 Index exactly, in
general, when the S&P500 is rising, the value of Fund shares should also rise.
Conversely, when the Index is declining, the value of the Fund shares should
also decline. The Fund continuously benefits from weighting adjustments which
enable its performance to stay aligned with that of the S&P500 Index.
Portfolio Asset Mix
[pie chart]
Going Forward
We expect the broad market to continue moving upwards, although at a more
moderate pace than that which we witnessed during 1998. Low interest rates
combined with low inflation continue to benefit the U.S. stock market. We
anticipate market downtrends from time to time, but believe overall, that the
U.S. equities market will show an upward bias for some time to come. Thank you
for your continued interest in the Transamerica Premier Index Fund.
Comparison of change in value of a $10,000 investment in Transamerica Premier
index fund with the S&P500 index**
[mountain chart]
Total Returns Annualized
As of December 31, 1998 Since Inception* One Year
Investor Class 27.71% 28.45%
Class A 25.31% 21.33%
Class M 26.74% 26.59%
S&P500 Index 28.06% 28.58% Investor Class ($22,154 at 12/31/98) Class A ($20,831
at 12/31/98) Class M ($21,611 at 12/31/98) S&P500 Index ($22,354 at 12/31/98)
The Standard & Poor's 500 Composite Stock Price Index ("S&P500") consists of 500
widely held, publicly traded common stocks. The S&P500 Index does not reflect
any commissions or fees which would be incurred by an investor purchasing the
securities it represents.
* Investor Class - October 2, 1995. Class A and Class M - June 30, 1998.
** Hypothetical illustration of $10,000 invested at inception, assuming
reinvestment of dividends and capital gains at net asset value through December
31, 1998.
Note: All performance information represents past performance and is
not indicative of future results. If the Investment Adviser had not waived fees
and the Administrator had not reimbursed expenses, the aggregate total return of
the Fund would have been lower. Performance shown for Class A and Class M prior
to June 30, 1998 is based on the Investor Class of this Fund, but is
recalculated using the current maximum sales charge for each class.
Transamerica Premier funds 1998 annual report Page 12
Transamerica Premier Index Fund
Schedule of Investments - December 31, 1998 Market
Shares Value
Market
Shares Value Common Stocks - 89.8%
Advertising - 0.1%
Omnicom Group, Inc. 532 $ 30,856
Aerospace & Defense - 1.1%
Boeing Company 3,292 107,401
Computer Sciences Corporation 447 28,804
General Dynamics Corporation 420 24,623
Lockheed Martin Corporation 648 54,918
Northrop Grumman Corporation 186 13,601
Raytheon Company, Class B 866 46,115
TRW, Inc. 427 23,992
United Technologies Corporation 775 84,281
383,735
Agricultural Biotechnology - 0.1%
Pioneer Hi-Bred International, Inc. 815 22,005
Agricultural Machinery - 0.1%
Deere & Company 840 27,825
Air Travel - 0.3%
AMR Corporation (a) 552 32,775
Delta Air Lines, Inc. 456 23,712
Southwest Airlines Company 1,074 24,098
US Airways Group, Inc. (a) 244 12,688
93,273
Aluminum - 0.2%
Alcan Aluminum Ltd. 738 19,972
Aluminum Company of America 579 43,172
Reynolds Metals Company 221 11,644
74,788
Apparel & Textiles - 0.2%
Fruit of the Loom, Inc. (a) 242 3,342
Liz Claiborne, Inc. 233 7,354
Nike, Inc. 944 38,291
Reebok International Ltd. (a) 185 2,752
Russell Corporation 130 2,641
Springs Industries, Inc. 68 2,818
VF Corporation 424 19,875
77,073
Auto Parts - 0.2%
Dana Corporation 520 21,255
Eaton Corporation 245 17,318
Genuine Parts Company 596 19,929
58,502
Automobiles - 1.1%
Ford Motor Company 3,763 220,841
General Motors Corporation 2,370 169,603
PACCAR, Inc. 265 10,898
401,342
Banking - 5.1%
Banc One Corporation 3,601 183,876
Bank of New York Company, Inc. 2,564 103,201
BankAmerica Corporation 5,924 356,180
BankBoston Corporation 961 37,419
Bankers Trust New York Corporation 266 $ 22,726
BB&T Corporation 827 33,338
Comerica, Inc. 545 37,162
Fifth Third Bancorp 787 56,123
First Union Corporation 3,040 184,870
Fleet Financial Group, Inc. 1,774 79,276
Huntington Bancshares, Inc. 553 16,625
J.P. Morgan & Company, Inc. 604 63,458
KeyCorp 1,502 48,064
MBNA Corporation 2,470 61,596
Mellon Bank Corporation 867 59,606
Mercantile Bancorporation, Inc. 433 19,972
National City Corporation 1,013 73,442
Northern Trust Corporation 370 32,306
PNC Bank Corporation 1,076 58,239
Providian Financial Corporation 458 34,313
Republic New York Corporation 367 16,721
Summit Bancorp 592 25,863
SunTrust Banks, Inc. 1,028 78,642
Synovus Financial Corporation 738 17,989
US Bancorp 2,494 88,537
Wachovia Corporation 656 57,359
1,846,903
Biological Products - 0.0%
Millipore Corporation 146 4,152
Broadcasting - 0.5%
Clear Channel Communications, Inc. (a) 609 33,191
Comcast Corporation 1,016 59,626
Viacom, Inc. (a) 1,183 87,542
180,359
Building Construction - 0.1%
Centex Corporation 197 8,877
Fluor Corporation 280 11,918
Kaufman & Broad Home Corporation 123 3,536
Pulte Corporation 158 4,394
28,725
Business Services - 1.2%
Automatic Data Processing, Inc. 974 78,103
Deluxe Corporation 276 10,091
Ecolab, Inc. 430 15,561
Electronic Data Systems Corporation 1,618 81,305
First Data Corporation 1,465 46,422
H & R Block, Inc. 348 15,660
Humana, Inc. (a) 547 9,743
Interpublic Group Companies, Inc. 405 32,299
Laidlaw, Inc. 1,019 10,254
Paychex, Inc. 533 27,416
R.R. Donnelley & Sons Company 480 21,030
Service Corporation International 802 30,526
Solectron Corporation (a) 400 37,175
The Dun & Bradstreet Corporation 566 17,864
433,449
Chemicals - 1.5%
Air Products and Chemicals, Inc. 747 $ 29,880
B.F. Goodrich Company 186 6,673
Dow Chemical Company 797 72,477
E.I. du Pont de Nemours and Company 3,686 195,588
Eastman Chemical Company 269 12,038
FMC Corporation (a) 128 7,168
Great Lakes Chemical Corporation 210 8,400
Hercules, Inc. 334 9,143
Mallinckrodt, Inc. 236 7,272
Monsanto Company 1,937 92,007
Morton International, Inc. 465 11,393
Nalco Chemical Company 219 6,789
Octel Corporation (a) 38 527
PPG Industries, Inc. 607 35,358
Praxair, Inc. 490 17,273
Rohm & Haas Company 626 18,858
Sigma-Aldrich Corporation 337 9,899
Union Carbide Corporation 436 18,530
W.R. Grace & Company (a) 269 4,220
563,493
Communication Services - 3.3%
America Online, Inc. 1,525 244,000
Lucent Technologies, Inc. 3,160 347,600
MediaOne Group, Inc. 1,811 85,117
Northern Telecom Ltd. 2,092 104,861
SBC Communications, Inc. 6,406 343,522
Tele-Communications, Inc. (a) 1,471 81,365
1,206,465
Computers & Business Equipment - 6.8%
3Com Corporation (a) 871 39,032
Apple Computer, Inc. (a) 416 17,030
Cabletron Systems, Inc. (a) 494 4,137
Ceridian Corporation (a) 232 16,197
Cisco Systems, Inc. (a) 4,842 449,398
Compaq Computer Corporation 5,064 212,371
Data General Corporation (a) 133 2,186
Dell Computer Corporation (a) 4,819 352,691
EMC Corporation (a) 1,527 129,795
Gateway 2000, Inc. (a) 433 22,164
Hewlett-Packard Company 3,367 230,008
International Business Machines Corporation 3,417 631,291
Pitney Bowes, Inc. 952 62,891
Seagate Technology, Inc. (a) 753 22,778
Sun Microsystems, Inc. (a) 1,216 104,120
Tandy Corporation 385 15,857
Unisys Corporation (a) 648 22,316
Xerox Corporation 1,072 126,496
2,460,758
Conglomerates - 1.5%
Aeroquip-Vickers, Inc. 88 2,635
AlliedSignal, Inc. 1,849 81,934
CBS Corporation 2,096 68,644
Cendant Corporation (a) 2,546 $ 48,533
Gillette Company 3,591 173,490
Harcourt General, Inc. 232 12,339
Minnesota Mining & Manufacturing Company 1,358 96,588
Tenneco, Inc. 572 19,484
Textron, Inc. 542 41,158
544,805
Construction & Mining Equipment - 0.3%
Case Corporation 233 5,082
Caterpillar, Inc. 1,265 58,190
Dover Corporation 740 27,102
Foster Wheeler Corporation 136 1,794
Harnischfeger Industries, Inc. 154 1,569
93,737
Construction Materials - 0.2%
Armstrong World Industries, Inc. 132 7,961
Masco Corporation 1,067 30,677
Owens Corning 165 5,847
Sherwin-Williams Company 568 16,685
61,170
Consumer Products - 0.0%
American Greetings Corporation 239 9,814
Containers & Glass - 0.1%
Ball Corporation 92 4,209
Bemis Company, Inc. 167 6,335
Crown Cork & Seal Company, Inc. 421 12,972
Owens-Illinois, Inc. (a) 483 14,792
Temple-Inland, Inc. 192 11,388
49,696
Containers & Packaging - 0.0%
Sealed Air Corporation (a) 289 14,757
Cosmetics & Toiletries - 0.2%
Alberto-Culver Company 193 5,151
Avon Products, Inc. 878 38,851
International Flavors & Fragances, Inc. 362 15,996
59,998
Drugs & Health Care - 10.7%
Abbott Laboratories 5,124 251,076
Allergan, Inc. 214 13,856
Alza Corporation 279 14,578
American Home Products Corporation 4,214 237,301
Amgen, Inc. (a) 873 91,283
Bausch & Lomb, Inc. 195 11,700
Baxter International, Inc. 913 58,717
Becton, Dickinson & Company 819 34,961
Biomet, Inc. 371 14,933
Bristol-Myers Squibb Company 3,297 441,180
C.R. Bard, Inc. 196 9,702
Cardinal Health, Inc. 558 42,338
Columbia / HCA Healthcare Corporation 2,173 53,782
Eli Lilly & Company 3,636 323,149
Guidant Corporation 481 53,030
HCR Manor Care, Inc. (a) 355 10,428
HEALTHSOUTH Corporation (a) 1,153 $ 17,799
Johnson & Johnson 4,395 368,631
Medtronic, Inc. 1,539 114,271
Merck & Company, Inc. 3,989 589,125
Pfizer, Inc. 4,233 530,977
Pharmacia & Upjohn, Inc. 1,665 94,281
Schering-Plough Corporation 4,819 266,250
St. Jude Medical, Inc. (a) 267 7,393
Tenet Healthcare Corporation (a) 966 25,357
United Healthcare Corporation 607 26,139
Warner-Lambert Company 2,677 201,277
3,903,514
Electric Utilities - 2.2%
AES Corporation (a) 552 26,151
Ameren Corporation 447 19,081
American Electric Power Company 626 29,461
Baltimore Gas & Electric Company 491 15,160
Carolina Power & Light Company 504 23,720
Central & South West Corporation 698 19,151
CINergy Corporation 516 17,738
Consolidated Edison Company of New York, Inc. 781 41,295
Dominion Resources, Inc. 607 28,377
DTE Energy Company 485 20,794
Duke Energy Corporation 1,179 75,530
Edison International 1,356 37,799
Entergy Corporation 772 24,029
FirstEnergy Corporation 580 18,886
FPL Group, Inc. 599 36,913
GPU, Inc. 405 17,896
Houston Industries, Inc. 1,091 35,048
New Century Energies, Inc. 395 19,256
Niagara Mohawk Power Corporation (a) 522 8,417
Northern States Power Company 467 12,959
P P & L Resources, Inc. 328 9,145
Pacificorp 961 20,241
PECO Energy Company 729 30,345
PG & E Corporation 1,330 41,895
Public Service Enterprise Group, Inc. 791 31,640
Southern Company 2,242 65,158
Texas Utilities Company 832 38,844
Unicom Corporation 713 27,495
792,424
Electrical Equipment - 3.6%
Boston Scientific Corporation (a) 1,226 32,872
Cooper Industries, Inc. 368 17,549
Emerson Electric Company 1,465 88,632
General Electric Company 10,864 1,108,807
Johnson Controls, Inc. 277 16,343
National Service Industries, Inc. 152 5,776
Raychem Corporation 290 9,371
W.W. Grainger, Inc. 324 13,487
1,292,837
Electronics - 3.3%
Advanced Micro Devices, Inc. (a) 460 $ 13,311
AMP, Inc. 653 33,997
Andrew Corporation (a) 292 4,818
Applied Materials, Inc. (a) 1,197 51,097
EG & G, Inc. 152 4,228
Harris Corporation 268 9,816
Honeywell, Inc. 423 31,857
Intel Corporation 5,430 643,794
KLA Tencor Corporation (a) 276 11,971
LSI Logic Corporation (a) 441 7,111
Micron Technology, Inc. (a) 697 35,242
Motorola, Inc. 1,950 119,072
National Semiconductor Corporation (a) 467 6,305
Perkin-Elmer Corporation 144 14,049
Rockwell International Corporation 695 33,751
Scientific-Atlanta, Inc. 245 5,589
Silicon Graphics, Inc. (a) 599 7,712
Tektronix, Inc. 159 4,780
Tellabs, Inc. (a) 605 41,480
Texas Instruments, Inc. 1,262 107,980
Thomas & Betts Corporation 169 7,320
1,195,280
Financial Services - 6.0%
American Express Company 1,564 159,919
Associates First Capital Corporation 2,182 92,462
Capital One Financial Corporation 207 23,805
Charles Schwab Corporation 1,408 79,112
Chase Manhattan Corporation 2,849 193,910
Citigroup, Inc. 7,176 355,212
Countrywide Credit Industries, Inc. 349 17,515
Equifax, Inc. 484 16,547
Federal Home Loan Mortgage Corporation 2,317 149,302
Federal National Mortgage Association 3,514 260,036
Firstar Corporation 750 69,938
Franklin Resources, Inc. 809 25,888
Household International, Inc. 1,554 61,577
Lehman Brothers Holdings, Inc. 345 15,202
Merrill Lynch & Company, Inc. 1,138 75,961
Morgan Stanley Dean Witter & Co. 2,465 175,015
Regions Financial Corporation 690 27,816
SLM Holding Corporation 552 26,496
State Street Corporation 555 38,607
The Bear Stearns Companies, Inc. 395 14,763
Union Planters Corporation 414 18,759
Washington Mutual, Inc. 1,600 61,100
Wells Fargo Company 5,423 216,581
2,175,523
Food & Beverages - 4.4%
Archer-Daniels-Midland Company 1,966 33,791
Bestfoods 949 50,534
Campbell Soup Company 1,557 85,635
Coca Cola Enterprises, Inc. 1,342 47,976
Coca-Cola Company 8,191 547,773
ConAgra, Inc. 1,598 $ 50,337
General Mills, Inc. 522 40,586
H.J. Heinz Company 1,200 67,950
Hershey Foods Corporation 508 31,591
Kellogg Company 1,380 47,092
PepsiCo, Inc. 5,057 207,021
Quaker Oats Company 442 26,299
Ralston-Ralston Purina Group 1,040 33,670
Sara Lee Corporation 3,142 88,565
Sysco Corporation 1,159 31,800
Unilever NV and PLC 2,103 174,418
Wm. Wrigley Jr. Company 377 33,765
1,598,803
Gas & Pipeline Utilities - 0.5%
Coastal Corporation 700 24,456
Columbia Gas System, Inc. 275 15,881
Consolidated Natural Gas Company 304 16,416
Eastern Enterprises 68 2,975
Enron Corporation 951 54,266
NICOR, Inc. 159 6,718
ONEOK, Inc. 86 3,107
People's Energy Corporation 122 4,865
Sonat, Inc. 304 8,227
The Williams Companies, Inc. 1,365 42,571
179,482
Gas Exploration and Distribution - 0.2%
Anadarko Petroleum Corporation 375 11,578
Apache Corporation 296 7,493
Burlington Resources, Inc. 582 20,843
Occidental Petroleum Corporation 1,089 18,377
Oryx Energy Company (a) 350 4,703
Union Pacific Resources Group, Inc. 770 6,978
69,972
Gold & Mining - 0.2%
Barrick Gold Corporation 1,200 23,400
Battle Mountain Gold Company 719 2,966
Cyprus Amax Minerals Company 301 3,010
Freeport-McMoRan Copper & Gold, Inc. 641 6,690
Homestake Mining Company 554 5,090
Newmont Mining Corporation 522 9,429
Phelps Dodge Corporation 218 11,091
Placer Dome, Inc. 790 9,085
70,761
Hotels & Restaurants - 0.7%
Darden Restaurants, Inc. 493 8,874
Hilton Hotels Corporation 819 15,663
Marriott International, Inc. 819 23,751
McDonald's Corporation 2,270 173,939
Mirage Resorts, Inc. (a) 552 8,246
Tricon Global Restaurants, Inc. (a) 511 25,614
Wendy's International, Inc. 415 9,052
265,139
Household Appliances & Products - 1.9%
Black & Decker Corporation 293 $ 16,426
Clorox Company 345 40,300
Colgate-Palmolive Company 959 89,067
Corning, Inc. 765 34,425
Maytag Corporation 328 20,418
Newell Company 519 21,409
Procter & Gamble Company 4,475 408,623
Rubbermaid, Inc. 509 16,002
Snap-On, Inc. 205 7,137
The Stanley Works 293 8,131
Tupperware Corporation 206 3,386
Whirlpool Corporation 237 13,124
678,448
Industrial Machinery - 0.7%
Briggs & Stratton Corporation 85 4,239
Crane Company 220 6,641
Cummins Engine Company, Inc. 133 4,721
Illinois Tool Works, Inc. 793 45,994
Ingersoll-Rand Company 548 25,722
ITT Industries, Inc. 384 15,264
Milacron, Inc. 126 2,426
NACCO Industries, Inc. 21 1,932
Pall Corporation 403 10,201
Parker Hannifin Corporation 365 11,954
Thermo Electron Corporation (a) 502 8,503
Timken Company 209 3,945 Tyco International Ltd. 1,592 120,096
261,638
Insurance - 3.0%
Aetna Life & Casualty Company 497 39,077
Allstate Corporation 2,882 111,317
American General Corporation 797 62,166
American International Group, Inc. 3,490 337,221
Aon Corporation 543 30,069
Chubb Corporation 577 37,433
CIGNA Corporation 739 57,134
Cincinnati Financial Corporation 542 19,851
Conseco, Inc. 753 23,013
Hartford Financial Services Group, Inc. 785 43,077
Jefferson-Pilot Corporation 353 26,475
Lincoln National Corporation 346 28,307
Loews Corporation 378 37,138
Marsh & McLennan Companies, Inc. 792 46,282
MBIA, Inc. 311 20,390
MGIC Investment Corporation 413 16,443
Progressive Corporation Ohio 232 39,295
Provident Companies, Inc. 414 17,181
Safeco Corporation 420 18,034
St. Paul Companies, Inc. 771 26,792
Torchmark Corporation 460 16,244
UNUM Corporation 461 26,911
1,079,850
Investment Companies - 0.6%
Standard and Poor's Depository Receipts 1,745 $ 214,635
Leisure & Entertainment - 0.9%
Brunswick Corporation 331 8,192
Carnival Corporation 1,900 91,200
Harrah's Entertainment, Inc. (a) 344 5,396
King World Productions, Inc. (a) 237 6,977
The Walt Disney Company 6,696 200,880
312,645
Liquor - 0.5%
Adolph Coors Company 130 7,337
Anheuser-Busch Companies, Inc. 1,640 107,625
Brown-Forman Corporation 225 17,030
The Seagram Company Ltd. 1,348 51,224
183,216
Manufacturing - 0.1%
Danaher Corporation 414 22,485
Mobile Homes - 0.0%
Fleetwood Enterprises, Inc. 73 2,537
MultiMedia - 0.6%
Time Warner, Inc. 3,248 201,579
Newspapers - 0.4%
Dow Jones & Company, Inc. 310 14,919
Gannett Company, Inc. 931 60,050
Knight-Ridder, Inc. 307 15,695
New York Times Company 639 22,165
Times Mirror Company 327 18,312
Tribune Company 419 27,654
158,795
Non-Ferrous Metals - 0.0%
Asarco, Inc. 142 2,139
Engelhard Corporation 483 9,419
Inco Ltd. 587 6,200
17,758
Office Furnishings & Supplies - 0.1%
Avery Dennison Corporation 351 15,817
Ikon Office Solutions, Inc. 429 3,673
Moore Corporation Ltd. 307 3,377
22,867
Oil - 4.5%
Amerada Hess Corporation 302 15,025
Ashland, Inc. 221 10,691
Atlantic Richfield Company 1,066 69,556
Chevron Corporation 2,156 178,813
Exxon Corporation 8,140 595,237
Kerr-McGee Corporation 159 6,082
Mobil Corporation 2,579 224,695
Phillips Petroleum Company 866 36,913
Royal Dutch Petroleum Company 7,050 337,519
Sempra Energy 815 20,681
Sunoco, Inc. 257 9,268
Texaco, Inc. 1,772 $ 93,694
Unocal Corporation 811 23,671
USX-Marathon Group 964 29,041
1,650,886
Paper & Forest Products - 0.8%
Boise Cascade Corporation 175 5,425
Champion International Corporation 309 12,514
Fort James Corporation 398 15,920
Georgia-Pacific Corporation 299 17,510
International Paper Company 988 44,275
Kimberly-Clark Corporation 1,830 99,735
Louisiana-Pacific Corporation 359 6,574
Mead Corporation 353 10,347
Potlatch Corporation 90 3,319
Union Camp Corporation 227 15,322
Westvaco Corporation 341 9,143
Weyerhaeuser Company 658 33,435
Willamette Industries, Inc. 363 12,161
285,680
Petroleum Services - 0.4%
Baker Hughes, Inc. 985 17,422
Halliburton Company 1,392 41,238
Helmerich & Payne, Inc. 158 3,061
McDermott International, Inc. 190 4,691
Rowan Companies, Inc. (a) 282 2,820
Schlumberger Ltd. 1,761 81,226
150,458
Photography - 0.2%
Eastman Kodak Company 1,103 79,416
Polaroid Corporation 147 2,747
82,163
Pollution Control - 0.3%
Browning-Ferris Industries, Inc. 669 19,025
Waste Management, Inc. 1,869 87,156
106,181
Publishing - 0.1%
Jostens, Inc. 131 3,430
McGraw-Hill Companies, Inc. 339 34,536
Meredith Corporation 171 6,477
44,443
Railroads & Equipment - 0.3%
Burlington Northern Santa Fe 1,467 49,511
CSX Corporation 709 29,424
Union Pacific Corporation 750 33,797
112,732
Retail - 5.0%
AutoZone, Inc. (a) 484 15,942
Circuit City Stores-Circuit City Group 332 16,579
Consolidated Stores Corporation (a) 345 6,965
Costco Companies, Inc. (a) 680 49,087
CVS Corporation 976 53,680
Dayton Hudson Corporation 1,430 $ 77,577
Dillard's, Inc. 370 10,499
Dollar General Corporation 589 13,915
Federated Department Stores, Inc. (a) 687 29,927
Fred Meyer, Inc. (a) 533 32,113
Gap, Inc. 2,053 115,481
Home Depot, Inc. 4,771 291,926
J.C. Penney Company, Inc. 775 36,328
Kmart Corporation (a) 1,551 23,750
Kohl's Corporation (a) 533 32,746
Limited, Inc. 190 5,534
Longs Drug Stores Corporation 135 5,062
Lowe's Companies, Inc. 1,108 56,716
May Department Stores Company 783 47,274
Nordstrom, Inc. 523 18,142
Pep Boys-Manny, Moe & Jack 206 3,232
Rite-Aid Corporation 712 35,288
Sears, Roebuck & Company 1,291 54,867
Staples, Inc. (a) 966 42,202
SUPERVALU, Inc. 409 11,452
TJX Companies, Inc. 986 28,594
Toys "R" Us, Inc. (a) 906 15,289
Wal-Mart Stores, Inc. 7,481 609,234
Walgreen Company 1,633 95,633
1,835,034
Retail Grocery - 0.7%
Albertson's, Inc. 821 52,287
American Stores Company 940 34,721
Great Atlantic & Pacific Tea Company, Inc. 131 3,881
Kroger Company (a) 835 50,518
Safeway, Inc. (a) 1,518 92,503
Winn-Dixie Stores, Inc. 500 22,438
256,348
Savings & Loan - 0.0%
Golden West Financial Corporation 199 18,246
Software - 4.4%
Adobe Systems, Inc. 228 10,659
Ascend Communications, Inc. (a) 690 45,367
Autodesk, Inc. 152 6,489
BMC Software, Inc. (a) 671 29,901
Computer Associates International, Inc. 1,798 76,640
Compuware Corporation (a) 600 46,875
HBO & Company 1,509 43,289
IMS Health, Inc. 661 49,864
Microsoft Corporation (a) 7,918 1,098,128
Novell, Inc. (a) 1,176 21,315
Oracle Corporation (a) 3,215 138,647
Parametric Technology Corporation (a) 882 14,333
PeopleSoft, Inc. (a) 690 13,067
Shared Medical Systems Corporation 77 3,840
1,598,414
Steel - 0.1%
Allegheny Teldyne, Inc. 600 12,263
Bethlehem Steel Corporation (a) 387 3,241
Nucor Corporation 289 $ 12,499
USX-US Steel Group 281 6,463
Worthington Industries, Inc. 302 3,775
38,241
Telecommunications - 6.4%
AirTouch Communications, Inc. (a) 1,855 133,792
Alltel Corporation 884 52,874
Ameritech Corporation 3,630 230,051
AT&T Corporation 5,933 446,458
Bell Atlantic Corporation 5,148 272,844
BellSouth Corporation 6,534 325,883
Frontier Corporation 515 17,510
GTE Corporation 3,174 206,310
MCI WorldCom, Inc. (a) 5,278 378,697
Nextel Communications, Inc. (a) 847 20,010
Sprint Corporation (Fon Group) 1,457 122,570
Sprint Corporation (PCS Group) (a) 1,399 32,352
US West, Inc. 1,620 104,693
2,344,044
Telecommunications Equipment - 0.0%
General Instrument Corporation (a) 538 18,258
Tires & Rubber - 0.1%
Cooper Tire & Rubber Company 274 5,600
Goodyear Tire & Rubber Company 507 25,572
31,172
Tobacco - 1.4%
Fortune Brands, Inc. 583 18,437
Philip Morris Companies, Inc. 8,097 433,189
RJR Nabisco Holdings Corp. 1,085 32,211
UST, Inc. 612 21,344
505,181
Toys & Amusements - 0.1%
Hasbro, Inc. 431 15,570
Mattel, Inc. 933 21,284
36,854
Transportation - 0.1%
Norfolk Southern Corporation 1,256 39,799
Trucking & Freight Forwarding - 0.1%
FDX Corporation (a) 484 43,076
Navistar International Corporation (a) 235 6,697
Ryder System, Inc. 247 6,422
56,195
Total Common Stocks
(cost $23,324,443) 32,638,197
U.S. GOVERNMENT AGENCY SECURITY - 0.7%
United States Treasury Bill
(cost $247,699)* 4.360% 03/18/99 $ 250,000 $ 247,699
repurchase agreement - 9.9%
State Street Bank & Trust Company, 4.00%, due 01/04/99, (collateralized by
$3,480,000 par value U.S. Treasury Note, 6.375%, due 03/31/01, with a
value of
$3,663,309, cost $3,587,000) 3,587,000 3,587,000
Total Investments - 100.4%
(cost $27,159,142)** 36,472,896
Liabilities in Excess of Other Assets - (0.4)% (127,906)
Net Assets - 100.0% $ 36,344,990
(a) Non-income producing security
* $247,699 market value of securities has been pledged as
collateral for initial margin for futures contracts.
** Aggregate cost for Federal tax purposes. Aggregate gross unrealized
appreciation for all securities in which there is an excess of value over tax
cost and aggregate gross unrealized depreciation for all securities in which
there is an excess of tax cost over value were $9,652,675 and $513,504,
respectively. Net unrealized appreciation for tax purposes is $9,139,171.
12 S&P500 $3,736,500 $124,250
March 1999 (Long)
See notes to financial statements Page 13
Transamerica Premier Funds 1998 Annual Report
1998 Annual ReportTransamerica Premier index Fund (concluded)
See notes to financial statements
Page 19 Transamerica Premier Funds 1998 Annual Report
Transamerica Premier Balanced Fund
Portfolio Manager: Gary U. Rolle
Fund Performance
The Transamerica Premier Balanced Fund returned a record 29.30% for the year
ended December 31, 1998, in comparison to the benchmark index (50% S&P 500
Index/50% Lehman Brothers Government/ Corporate Bond Index) return of 19.44% for
the same period. For the one-year period ended December 31, 1998, the Fund
ranked sixth among the 409 balanced funds as tracked by Lipper Analytical
Services, Inc. Since the Fund's inception on October 2, 1995, it has achieved an
annualized total return of 24.97% relative to the benchmark index return of
18.13%.
Portfolio Managers Comments
The Balanced Fund had an exceptionally good year. The Fund not only outperformed
the fixed income markets; it also outperformed the S&P500 Index for the third
consecutive year, and since inception. This unusual accomplishment for a
balanced fund occurred due to superior performing assets in both the stock and
bond components of the portfolio. We actively manage the asset allocation of the
Fund's holdings, and this year, changed our portfolio mix in July from 70%
equities to slightly under 50% equities.
The portfolio benefited from an increased bond allocation, as stocks declined
sharply for approximately the duration of the third quarter. We purchased high
yielding, high quality corporate bonds which also presented the probability of
credit upgrades. In the fourth quarter, the Fund reversed its positions and
returned to a portfolio more heavily weighted in stocks. We effected this shift
just prior to the equity market's surge to new highs in November. Dell, Intel,
Microsoft, Cisco Systems, Fred Meyer and Charles Schwab were among the
portfolio's top performers at year's end.
Portfolio Asset Mix
[pie chart]
Going Forward
In the coming months, the Fund will hold a portfolio weighted at approximately
60%-70% stocks and 30%-40% bonds. Stocks we hold represent companies that have
shown higher than expected earnings growth. Such growth derives from the ability
of these companies to benefit from some or all of these factors: low inflation,
high investment in technology and/or rapid growth in the financial industry. The
Fund invests almost exclusively in companies that are market leaders in their
industry group. Typically, these companies have strong cash flow and a quality
balance sheet.
The Fund will continue to pursue its objective by identifying and investing in
companies that meet our stringent selection criteria. Going forward, we
anticipate long-term interest rates to decline further, which will effectively
increase the valuations of high quality corporate bonds, such as those held in
the Transamerica Premier Balanced Fund portfolio.
Thank you for your continued interest in the Transamerica Premier Balanced Fund.
Comparison of change in value of a $10,000 investment in Transamerica Premier
Balanced Fund with 50% lehman brothers government/corporate bond index and 50%
S&P500 index**
[mountain chart]
Total Returns Annualized
As of December 31, 1998 Since Inception* One Year
Investor Class 24.97% 29.30%
Class A 22.70% 22.45%
Class M 24.03% 27.56%
50% Lehman Brothers Government/
Corporate Bond Index
50% S&P500 Index 18.13% 19.44% Investor Class ($20,643 at 12/31/98) Class A
($19,449 at 12/31/98) Class M ($20,147 at 12/31/98) 50% Lehman Brothers
Government/Corporate Bond Index 50% S&P500 Index ($17,190 at 12/31/98) The
Standard & Poor's 500 Composite Stock Price Index ("S&P500") consists of 500
widely held, publicly traded common stocks. The Lehman Brothers
Government/Corporate Bond Index is a broad-based unmanaged index of all
government and corporate bonds that are investment grade with at least one year
to maturity. These indexes do not reflect any commissions or fees which would be
incurred by an investor purchasing the securities represented by each index.
* Investor Class - October 2, 1995. Class A and Class M - June 30, 1998.
** Hypothetical illustration of $10,000 invested at inception, assuming
reinvestment of dividends and capital gains at net asset value through December
31, 1998.
Note: All performance information represents past performance and is
not indicative of future results. If the Investment Adviser had not waived fees
and the Administrator had not reimbursed expenses, the aggregate total return of
the Fund would have been lower. Performance shown for Class A and Class M prior
to June 30, 1998 is based on the Investor Class of this Fund, but is
recalculated using the current maximum sales charge for each class.
Transamerica Premier funds 1998 annual report
Page 20 Transamerica Premier Balanced Fund
Schedule of Investments - December 31, 1998
Market
Shares Value
Shares or Market
Principal Amount Value
COMMON STOCKS - 58.6%
Banking - 1.2%
Fifth Third Bancorp 10,000 $ 713,125
Chemicals - 2.5%
Minerals Technologies, Inc. 20,000 818,750
Monsanto Company 15,000 712,500
1,531,250
Commercial Services - 2.2%
Sodexho Marriott Services, Inc. 50,000 1,384,375
Computers & Business Equipment - 8.3%
Cisco Systems, Inc. (a) 15,750 1,461,797
Dell Computer Corporation (a) 50,000 3,659,375
5,121,172
Conglomerates - 1.4%
Gillette Company 18,000 869,625
Diversified Operations - 2.0%
Berkshire Hathaway, Inc. (a) 525 1,233,750
Drugs & Health Care - 4.2%
McKesson Corporation 15,000 1,185,937
Merck & Company, Inc. 5,000 738,438
Pfizer, Inc. 5,500 689,906
2,614,281
Electronics - 6.6%
Applied Materials, Inc. (a) 26,000 1,109,875
Intel Corporation 13,000 1,541,312
Level One Communications, Inc. (a) 40,000 1,420,000
4,071,187
Financial Services - 6.0%
Charles Schwab Corporation 30,750 1,727,766
Franklin Resources, Inc. 30,000 960,000
Merrill Lynch & Company, Inc. 15,000 1,001,250
3,689,016
Hotels & Restaurants - 1.7%
Crestline Capital Corporation (a) 2,000 29,250
Host Marriott Corporation (a) 20,000 276,250
McDonald's Corporation 10,000 766,250
1,071,750
Human Resources - 1.8%
Robert Half International, Inc. (a) 25,000 1,117,188
Insurance - 2.3%
American International Group, Inc. 15,000 1,449,375
Leisure & Entertainment - 1.1%
Pixar, Inc. (a) 20,000 700,000
Publishing - 0.8%
McGraw-Hill Companies, Inc. 5,000 509,375
Retail - 5.1%
Fred Meyer, Inc. (a) 52,500 3,163,125
Retail Grocery - 2.0%
Safeway, Inc. (a) 20,000 1,218,750
Software - 6.6%
HBO & Company 20,000 $ 573,750
IMS Health, Inc. 10,000 754,375
Microsoft Corporation (a) 16,000 2,219,000
SAP AG ADR (b) 15,000 540,937
4,088,062
Transportation - 2.8%
Kansas City Southern Industries, Inc. 35,000 1,721,563
Total Common Stocks
(cost $21,208,051) 36,266,969
preferred stock - 2.0%
Monsanto Company
(cost $1,000,000) 25,000 1,225,000
corporate bonds - 24.0%
Advertising - 0.9%
Valassis Communications, Inc.
9.550% 12/01/03 $ 500,000 573,625
Broadcasting - 0.9%
Viacom, Inc.
7.750% 06/01/05 500,000 542,415
Electric Utilities - 5.6%
Cleveland Electric Illuminating Company
7.430% 11/01/09 500,000 514,155
7.880% 11/01/17 500,000 516,760
Commonwealth Edison Company
7.000% 07/01/05 300,000 319,617
Niagara Mohawk Power Corporation
7.625% 10/01/05 1,000,000 1,053,390
Pennsylvania Power & Light Company
8.500% 05/01/22 500,000 547,930
Western Massachusetts Electric Company
6.875% 01/01/00 500,000 502,245
3,454,097
Finance & Banking - 3.1%
General Motors Acceptance Corporation
7.375% 05/28/99 300,000 302,523
Key Bank, N.A.
7.125% 08/15/06 500,000 539,400
Mellon Bank Corporation
7.000% 03/15/06 300,000 322,227
Sears Roebuck Acceptance Corporation
7.260% 04/21/03 500,000 529,815
The Money Store, Inc.
8.375% 04/15/04 200,000 224,698
1,918,663
Financial Services - 1.7%
Chase Manhattan Corporation
7.125% 03/01/05 500,000 534,280 Merrill Lynch & Company, Inc.
6.640% 09/19/02 500,000 517,845
1,052,125
Gas & Pipeline Utilities - 1.3%
KN Energy, Inc.
6.650% 03/01/05 $500,000 $ 505,215
The Williams Companies, Inc.
7.500% 09/15/99 300,000 303,450
808,665
Gas Exploration and Distribution - 2.1%
Gulf Canada Resources Ltd.
8.250% 03/15/17 390,000 356,144
Occidental Petroleum Corporation
6.500% 04/01/05 500,000 489,555
Triton Energy Ltd.
9.250% 04/15/05 500,000 463,540
1,309,239
Hotels & Restaurants - 0.5%
Mirage Resorts, Inc.
6.750% 02/01/08 300,000 289,179 Leisure & Entertainment - 1.7% Premier
Parks, Inc.
9.750% 01/15/07 975,000 1,033,500
Multimedia - 1.0%
Time Warner, Inc.
9.125% 01/15/13 500,000 632,980
Retail - 1.0%
Dayton Hudson Corporation
6.400% 02/15/03 300,000 308,865
Shoppers Food Warehouse Corporation
9.750% 06/15/04 275,000 298,375
607,240
Retail Grocery - 1.6%
Stater Brothers Holdings, Inc.
9.000% 07/01/04 1,000,000 970,000
Telecommunications - 0.8%
MCI Communications Corporation
6.125% 04/15/02 500,000 507,610
Transportation - 1.8%
Norfolk Southern Corporation
9.000% 03/01/21 500,000 646,355
Union Pacific Corporation
6.400% 02/01/06 500,000 505,035
1,151,390
Total Corporate Bonds
(cost $14,651,677) 14,850,728
U.S. GOVERNMENT SECURITies - 7.8%
U.S. Treasury Bond
6.375% 08/15/27 $1,200,000 $ 1,379,244
U.S. Treasury Notes
6.375% 08/15/02 400,000 421,936
5.875% 11/15/05 1,370,000 1,461,406
5.625% 05/15/08 1,500,000 1,600,545
Total U.S. Government Securities
(cost $4,630,233) 4,863,131
repurchase agreement - 5.8%
State Street Bank and Trust Company,
4.00%, due 01/04/99, (collateralized by
$3,490,000 par value U.S. Treasury Note,
6.375%, due 03/31/01, with a value of
$3,673,836, cost $3,601,000) 3,601,000 3,601,000
Total Investments - 98.2%
(cost $45,090,961)* 60,806,828
Other Assets Less Liabilities - 1.8% 1,115,612
Net Assets - 100.0% $ 61,922,440
(a) Non-income producing security
(b) ADR - American Depositary Receipts
* Aggregate cost for Federal tax purposes. Aggregate gross unrealized
appreciation for all securities in which there is an excess of value over tax
cost and aggregate gross unrealized depreciation for all securities in which
there is an excess of tax cost over value were $16,506,223 and $790,356,
respectively. Net unrealized appreciation for tax purposes
is $15,715,867.
See notes to financial statements Page 21
Transamerica Premier Funds 1998 Annual Report
Transamerica Premier balanced Fund (concluded)
Schedule of Investments - December 31, 1998 Principal Market
Amount Value
Principal Market
Amount Value
See notes to financial statements Transamerica Premier funds 1998 annual
report Page 22
Transamerica Premier HIGH YIELD BOND Fund
Portfolio Manager: Heather E. Creeden
Fund Performance
The Transamerica Premier High Yield Bond Fund (Investor Class) was launched on
June 30, 1998. By year's end, the Fund accomplished its objective of providing
high current income and the opportunity for capital appreciation to its
investors. In the fourth quarter, the Fund generated a 3.46% total return,
compared to fourth quarter results of 2.87% for the Merrill Lynch High Yield
Bond Fund Index, the Fund's benchmark for comparison.
Since 1990, Transamerica has managed a high yield bond fund separate account for
institutional clients. When adjusted to reflect fees and expenses for the
Transamerica Premier High Yield Bond Fund (Investor Class), the Fund performed
quite well compared to the benchmark. For the year-ended December 31, 1998, the
Transamerica Premier High Yield Bond Fund (Investor Class) had a total return of
5.73%, while the benchmark had a return of 3.66%. Since inception on September
1990, the Fund's annualized return was 13.21%, compared to 12.84% for the
benchmark.
Portfolio Manager Comments
In the first half of the year, the high yield bond market moved forward at a
record pace, turning in an unusually strong performance. By the third quarter,
turmoil overseas generated a liquidity crisis in the bond markets. The Federal
Reserve Board intervened by instituting the first of three consecutive
reductions in the Federal Funds Rate. These actions restored liquidity and
confidence to the U.S. financial markets, and we saw stock and bond markets snap
back strongly.
The Transamerica Premier High Yield Bond Fund particularly benefited from its
holdings in the rapidly consolidating grocery store industry. Ralph's bought
back bonds owned by the Fund at a substantial premium, due to a tender offer. We
then purchased bond issued by Fred Meyer, which was acquired by Kroger, a more
financially stable company.
We also purchased bonds issued by Valassis, a company that prints and circulates
coupons for consumer product companies. Solid industry position, along with
reduced costs have led to dramatic improvements in the company's credit ratings.
These improvements were recognized by major rating agencies, which in turn, led
to an increase in Valassis's bond prices.
Portfolio Asset Mix
[pie chart]
Going Forward
In 1999, we anticipate an increase in the number of companies coming to the high
yield market. Currently, corporate defaults account for 3% of corporate bond
issuers. This percentage may increase slightly to approximately 3.5%. Having
noted this, the Transamerica Premier High Yield Bond Fund will continually
strive to meet its objective by conducting extensive research and analysis, and
meeting with company management, to ensure that the portfolio holdings meet the
strict standards for the Fund.
Thank you for your continued interest in the Transamerica Premier High Yield
Bond Fund.
Comparison of change in value of a $10,000 investment in Transamerica Premier
high yield bond fund with the merrill lynch high yield master index**
[mountain chart]
Total Returns Annualized
As of December 31, 1998 Since Inception* One Year
Investor Class 13.21% 5.73%
Merrill Lynch High Yield Master Index 12.84% 3.66% Investor Class ($28,136 at
12/31/98) Merrill Lynch High Yield Master Index ($27,358 at 12/31/98) The
Merrill Lynch High Yield Master Index provides a broad-based measure of the
performance of the non-investment grade U.S. domestic bond market.
* Investor Class - June 30, 1998
** Hypothetical illustration of $10,000 invested at inception, assuming
reinvestment of dividends and capital gains at net asset value through December
31, 1998.
Note: All performance information represents past performance and is not
indicative of future results. If the Investment Adviser had not waived fees and
the Administrator had not reimbursed expenses, the aggregate total return of the
Fund would have been lower.
The performance of the Transamerica High Yield Bond Fund (Investor
Class) prior to June 30, 1998 is the performance of the Transamerica Premier
High Yield Bond Fund separate account recalculated to reflect the fees of the
new Fund. The separate account was not registered under the 1940 Act and,
therefore, was not subject to certain investment restrictions that are imposed
by the Act. If the separate account had been registered under the 1940 Act, the
separate account's performance may have been adversely affected. Page 23
Transamerica Premier Funds 1998 Annual Report
Transamerica Premier high yield bond Fund
Schedule of Investments - December 31, 1998 Principal Market
Amount Value
Principal Market
Amount Value Corporate Bonds - 88.0%
Advertising - 10.5%
Lamar Advertising Company
8.625% 09/15/07 $ 2,500,000 $2,650,000
Outdoor Systems, Inc.
9.375% 10/15/06 250,000 270,000
R H Donnelley Corporation
9.125% 06/01/08 1,000,000 1,047,500
Valassis Communications, Inc.
9.550% 12/01/03 3,205,000 3,676,936
7,644,436
Air Travel - 1.8%
GPA Holland BV
9.750% 12/10/01 250,000 263,125
9.640% 02/06/07 1,000,000 1,050,000
1,313,125
Auto Parts - 1.7%
Lear Corporation
8.250% 02/01/02 1,250,000 1,250,000
Broadcasting - 10.9%
Ackerly Group, Inc. (c)
9.000% 01/15/09 500,000 508,125
American Telecasting, Inc. (a) (b)
0.000% 06/15/04 1,075,790 182,884
Australis Media Ltd. (a) (b)
0.000% 05/15/03 8,930 45
Big City Radio, Inc. (b)
0.000% 03/15/05 1,000,000 660,000
CF Cable TV, Inc.
11.625% 02/15/05 1,260,000 1,393,623
9.125% 07/15/07 1,500,000 1,599,525
Chancellor Media Corporation (c)
9.375% 10/01/04 1,000,000 1,050,000
Citadel Broadcasting Company
9.250% 11/15/08 500,000 515,000
Sinclair Broadcast Group, Inc.
8.750% 12/15/07 1,000,000 1,010,000
Young Broadcasting, Inc.
10.125% 02/15/05 1,000,000 1,047,500
7,966,702
Drugs & Health Care - 1.3%
Integrated Health Services, Inc.
9.250% 01/15/08 1,000,000 940,000
Food & Beverages - 2.2%
Beatrice Foods, Inc.
1.000% 11/19/26 494,000 74,100
CFP Holdings, Inc.
11.625% 01/15/04 1,500,000 1,230,000
Stroh Brewery Company
11.100% 07/01/06 421,000 303,120
1,607,220
Hotels & Restaurants - 1.4%
John Q. Hammons Hotels, Inc.
8.875% 02/15/04 $ 600,000 $ 558,000
Trump Atlantic City Associates
11.250% 05/01/06 500,000 440,000
998,000
Industrial - 3.2%
Bucyrus International, Inc.
9.750% 09/15/07 500,000 410,000 Cambridge Industries, Inc.
10.250% 07/15/07 2,500,000 1,950,000
2,360,000
Leisure & Entertainment - 7.1%
Aztar Corporation
13.750% 10/01/04 500,000 555,000
Boyd Gaming Corporation
9.250% 10/01/03 1,270,000 1,320,800
Premier Parks, Inc.
9.750% 01/15/07 3,100,000 3,286,000
5,161,800
Newspapers - 4.3%
Affiliated Newspapers Investments, Inc. (a) (b)
0.000% 07/01/06 2,000,000 2,055,000
Garden State Newspapers, Inc.
12.000% 07/01/04 1,000,000 1,095,000
3,150,000
Oil & Gas Exploration - 5.0%
Forcenergy, Inc.
8.500% 02/15/07 400,000 290,000
Gulf Canada Resources Ltd.
9.250% 01/15/04 1,000,000 1,024,680
Nuevo Energy Company
9.500% 04/15/06 500,000 487,500
Petroleos Mexicanos
8.850% 09/15/07 500,000 445,000
9.375% (c) 12/02/08 500,000 493,750
Pride Pete Services, Inc.
9.375% 05/01/07 1,000,000 910,000
3,650,930
Retail - 9.7%
Fred Meyer, Inc.
7.450% 03/01/08 3,000,000 3,236,940
Jitney-Jungle Stores of America, Inc.
12.000% 03/01/06 500,000 555,000
Shoppers Food Warehouse Corporation
9.750% 06/15/04 3,000,000 3,255,000
7,046,940
Retail Grocery - 9.7%
Pathmark Stores, Inc.
9.625% 05/01/03 2,750,000 2,667,500
Stater Brothers Holdings, Inc.
11.000% 03/01/01 3,715,000 3,882,175
9.000% 07/01/04 500,000 485,000
7,034,675
Steel - 0.5%
Hylsa SA de CV (c)
9.250% 09/15/07 $ 500,000 $ 370,000
Telecommunications - 9.8%
Facilicom International, Inc.
10.500% 01/15/08 500,000 395,000
Intermedia Communications, Inc. (a) (b)
0.000% 05/15/06 2,000,000 1,560,000
International CableTel, Inc. (a) (b)
0.000% 04/15/05 1,000,000 910,000
MCI WorldCom, Inc.
9.375% 01/15/04 35,000 36,263
8.875% 01/15/06 37,000 40,440
NEXTLINK Communications, Inc.
9.000% 03/15/08 2,000,000 1,870,000
Rogers Cantel Mobile Communications, Inc.
9.375% 06/01/08 613,000 646,715
Videotron Group Ltd.
10.625% 02/15/05 500,000 541,380
WinStar Communications, Inc. (a)
14.500% 10/15/05 1,000,000 1,110,000
7,109,798
Telecommunications Equipment - 3.6%
L-3 Communications Holdings, Inc.
10.375% 05/01/07 1,500,000 1,646,250
Paging Network, Inc.
10.125% 08/01/07 1,000,000 960,000
2,606,250
Telecommunications Services - 4.0%
Metromedia Fiber Network, Inc. (c)
10.000% 11/15/08 400,000 410,000
Metronet Communications Corp. (a) (b)
0.000% 11/01/07 2,000,000 1,320,000
0.000% 06/15/08 2,000,000 1,200,000
2,930,000
Transportation - 1.3%
MTL, Inc. (c)
10.000% 06/15/06 1,000,000 970,000
Total Corporate Bonds
(cost $66,502,738) 64,109,876
common stock - 2.2%
Auto Parts - 0.3%
Harvard Industries, Inc. (a) 27,466 209,428
Newspapers - 0.3%
Affiliated Newspapers Investments, Inc. (a) 2,000 220,000
Retail - 1.4%
Fred Meyer, Inc. (a) 17,222 1,037,626
Telecommunications - 0.2%
Nextel Communications, Inc. (a) 4,956 117,085
Total Common Stocks
(cost $1,324,148) 1,584,139
preferred stock - 5.8%
Broadcasting - 0.8%
CSC Holdings, Inc. 5,480 $ 605,572
Financial Services - 1.5%
Sinclair Capital 10,000 1,060,000
Leisure & Entertainment - 0.8%
Station Casinos, Inc. 15,000 596,250
Telecommunications Services - 2.7%
Global Crossing Ltd. (a) 20,000 1,930,000
Total Preferred Stock
(cost $4,195,172) 4,191,822
warrants - 0.0%
Broadcasting - 0.0%
American Telecasting, Inc. (a) 5,000 0
Food & Beverages - 0.0%
Stroh Brewery Company (a) 2,516 2,516
Telecommunications - 0.0%
Nextel Communications, Inc. (a) 2,315 0
Total Warrants
(cost $2,516) 2,516
repurchase agreement - 1.2%
State Street Bank and Trust Company, 4.00%,
due 01/04/99, (collateralized by
$845,000 par value U.S. Treasury Note,
6.375%, due 03/31/01, with a value of
$889,510, cost $867,000) $867,000867,000
Total Investments - 97.2%
(cost $72,891,574)* 70,755,353
Other Assets Less Liabilities - 2.8% 2,061,428
Net Assets - 100.0% $ 72,816,781
(a) Non-income producing security
(b) Step Bond - coupon rate increases in increments to maturity. Rate disclosed
is as of December 31, 1998. Maturity date disclosed is the final maturity date.
(c) Pursuant to Rule 144A under the Act of 1933, these securities may be resold
in transactions exempt from registration, normally to qualified institutional
buyers. At December 31, 1998, these securities aggregated $6,745,625 or 9.3% of
the net assets of the Fund.
Aggregate cost for Federal tax purposes. Aggregate gross unrealized appreciation
for all securities in which there is an excess of value over tax cost and
aggregate gross unrealized depreciation for all securities in which there is an
excess of tax cost over value were $1,461,794 and $3,598,015, respectively. Net
unrealized depreciation for tax purposes is $2,136,221.
See notes to financial statements
Transamerica Premier funds 1998 annual report Page 24
Shares or Market
Principal Amount Value
Shares or Market
Principal Amount Value See notes to financial statements
Page 25
Transamerica Premier Funds 1998 Annual Report
Transamerica Premier Bond Fund
Portfolio Manager: Matthew W. Kuhns
Fund Performance
The Transamerica Premier Bond Fund (Investor Class) earned a total return of
9.58% for the year ended December 31, 1998. In comparison, the Fund's benchmark,
the Lehman Brothers Government/Corporate Index returned 9.47% for the same
period. According to Lipper Analytical Services, Inc., the Fund ranked 6th among
99 Funds in the bond category for the year-ended December 31, 1998.
Portfolio Manager Comments
In general, 1998 was an extremely volatile year for the fixed income markets.
Problems in Asia spread to other financial markets such as Brazil and the rest
of Latin America, as well as Russia. In August Russia defaulted on their GKOs
(the Russian equivalent of U.S. Treasury bills). U.S. stock markets were also
adversely impacted last summer by these extraordinary events. The financial
market turmoil caused a global flight to quality. Investors began purchasing
U.S. Treasuries to safeguard their assets, which drove up Treasury bond prices
markedly. The flight to quality was also a flight from risk which caused
corporate bonds to underperform U.S. Treasuries significantly. To stabilize the
U.S. financial markets, the Federal Reserve reduced interest rates three times
last fall.
Despite the difficult circumstances confronted by the corporate bond market, the
Premier Bond Fund had a very good year. The strong returns earned by the Fund
are attributable to being over-weighted in sectors which performed especially
well, such as the utility and supermarket sectors. The Fund was also
under-weighted in other sectors such as finance companies and yankees (U.S.
dollar issues of foreign companies) which were two of the worst performing
sectors in the corporate bond market last year.
Portfolio Asset Mix
[pie chart]
Going Forward
In 1999 we expect moderate economic growth and low inflation. We also believe
that long-term interest rates will continue to decline. The Fund is well
positioned in 1999 to continue to benefit from the positive credit trends in the
sectors in which it is invested.
Thank you for your continued interest in the Transamerica Premier Bond Fund.
Note: Matthew W. Kuhns has been named the Primary Manager for the Transamerica
Premier Bond Fund. Prior to his role
as the Primary Manager, Mr. Kuhns was the
Co-Manager for the Fund. He joined Transamerica in 1991.
Comparison of change in value of a $10,000 investment in Transamerica Premier
bond fund with the lehman brothers government/corporate bond index**
[mountain chart]
Total Returns Annualized
As of December 31, 1998 Since Inception* One Year
Investor Class 7.83% 9.58%
Class A 6.01% 4.17%
Class M 7.07% 8.21%
Lehman Brothers Government/
Corporate Bond Index 8.25% 9.47% Investor Class ($12,779 at 12/31/98) Class A
($12,090 at 12/31/98) Class M ($12,488 at 12/31/98) Lehman Brothers Government/
Corporate Bond Index ($12,939 at 12/31/98) The Lehman Brothers
Government/Corporate Bond Index is a broad-based unmanaged index of all
government and corporate bonds that are investment grade with at least one year
to maturity. The Index does not reflect any commissions or fees which would be
incurred by an investor purchasing the securities it represents. * Investor
Class - October 2, 1995. Class A and Class M - June 30, 1998. ** Hypothetical
illustration of $10,000 invested at inception, assuming reinvestment of
dividends and capital gains at net asset value through December 31, 1998.
Note: All performance information represents past performance and is
not indicative of future results. If the Investment Adviser had not waived fees
and the Administrator had not reimbursed expenses, the aggregate total return of
the Fund would have been lower. Performance shown for Class A and Class M prior
to June 30, 1998 is based on the Investor Class of this Fund, but is
recalculated using the current maximum sales charge for each class.
Transamerica Premier Funds 1998 annual report
Page 26 Transamerica Premier Bond Fund
Schedule of Investments - December 31, 1998
Principal Market
Amount Value
Shares or Market
Principal Amount Value Corporate Bonds - 74.9%
Advertising - 3.3%
Valassis Communications, Inc.
9.550% 12/01/03 $ 500,000 $ 573,625
Aerospace & Defense - 5.9%
Boeing Company
8.625% 11/15/31 400,000 508,656
Raytheon Company
6.150% 11/01/08 500,000 509,185
1,017,841
Air Travel - 2.1%
AMR Corporation
9.750% 08/15/21 300,000 371,310
Automobiles - 2.5%
General Motors Corporation
9.625% 12/01/00 400,000 430,840
Broadcasting - 3.1%
CF Cable TV, Inc.
11.625% 02/15/05 240,000 265,452
TCI Communications, Inc.
7.250% 08/01/05 250,000 271,228
536,680
Electric Utilities - 13.2%
Cleveland Electric Illuminating Company
9.500% 05/15/05 500,000 546,005
Commonwealth Edison Company
7.000% 07/01/05 300,000 319,617
Niagara Mohawk Power Corporation
7.750% 05/15/06 300,000 329,397
7.750% 10/01/08 500,000 546,395
Pennsylvania Power & Light Company
8.500% 05/01/22 500,000 547,930
2,289,344
Financial Services - 6.0%
Household Finance Corporation
6.500% 11/15/08 500,000 520,260 Merrill Lynch & Company, Inc.
6.375% 10/15/08 500,000 517,425
1,037,685
Gas Exploration and Distribution - 7.7%
Burlington Resources, Inc.
9.125% 10/01/21 300,000 384,447
Gulf Canada Resources Ltd.
8.250% 03/15/17 500,000 456,595
Occidental Petroleum Corporation
6.500% 04/01/05 500,000 489,555
1,330,597
Hotels & Restaurants - 2.2%
Mirage Resorts, Inc.
6.750% 08/01/07 400,000 387,380
Multimedia - 4.2%
News America Holdings, Inc.
7.750% 12/01/45 300,000 317,700
Time Warner, Inc.
6.625% 05/15/29 400,000 406,984
724,684
Retail - 9.3%
Fred Meyer, Inc.
7.450% 03/01/08 $ 500,000 $ 539,490
Kmart Corporation
8.125% 12/01/06 500,000 532,500
Shoppers Food Warehouse Corporation
9.750% 06/15/04 500,000 542,500
1,614,490
Retail Grocery - 8.8%
American Stores Company
7.900% 05/01/17 300,000 344,832
8.000% 06/01/26 150,000 176,604
Safeway, Inc.
6.500% 11/15/08 500,000 514,610
Stater Brothers Holdings, Inc.
9.000% 07/01/04 500,000 485,000
1,521,046
Telecommunications - 3.7%
Bellsouth Capital Funding Corporation
7.120% 07/15/27 100,000 111,469
British Telecommunications Plc
9.625% 02/15/19 300,000 315,543
WorldCom, Inc.
6.950% 08/15/28 200,000 214,728
641,740
Transportation - 2.9%
Union Pacific Corporation
6.400% 02/01/06 500,000 505,035
Total Corporate Bonds
(cost $12,725,084) 12,982,297
U.S. GOVERNMENT SECURITies - 13.5%
U.S. Treasury Bonds
7.500% 11/15/16 750,000 931,642
6.125% 11/15/27 250,000 279,843
U.S. Treasury Note
7.250% 05/15/04 1,000,000 1,120,780
Total U.S. Government Securities
(cost $2,223,504) 2,332,265
preferred stock - 3.5%
Monsanto Company
(cost $500,000) 12,500 612,500
repurchase agreement - 7.2%
State Street Bank and Trust Company, 4.00%,
due 01/04/99,(collateralized by
$1,215,000 par value U.S. Treasury Note,
6.375%,due 03/31/01, with a value of
$1,279,000, cost $1,252,000) $1,252,000 1,252,000
Total Investments - 99.1%
(cost $16,700,588)* 17,179,062
Other Assets Less Liabilities - 0.9% 163,455
Net Assets - 100.0% $ 17,342,517
* Aggregate cost for Federal tax purposes. Aggregate gross unrealized
appreciation for all securities in which there is an excess of value over tax
cost and aggregate gross unrealized depreciation for all securities in which
there is an excess of tax cost over value were $622,957 and $144,483,
respectively. Net unrealized appreciation for tax purposes is $478,474. See
notes to financial statements Page 27
Transamerica Premier Funds 1998 Annual Report
Transamerica Premier Cash Reserve Fund
Portfolio Manager: Kevin J. Hickam
Fund Performance
The Transamerica Premier Cash Reserve Fund (Investor Class) delivered excellent
results during 1998. The fund ranked sixth among 308 money market funds for the
12-month period ended December 31, 1998, as tracked by Lipper Analytical
Services, Inc.
The Fund's annualized yield (12-month return) as of December 31, 1998 was 5.45%
in comparison to the IBC Money Fund Report return of 4.97%. The seven-day
current and effective yields were 5.00% and 5.13% respectively, as of December
31, 1998. The Fund's annualized total return since inception in October 1995 is
5.44%.
Portfolio Manager Comments
The Transamerica Premier Cash Reserve Fund has demonstrated superior performance
since its inception in October of 1995, consistently placing in the top 10 of
all domestic money market funds. During the third quarter, in response to
economic turmoil in Latin America, Asia and Eastern Europe, the Federal Reserve
Board cut the Federal Funds Rate from 5.50% to 4.75% as of year end. They did
this with a series of 25 basis point rate cuts beginning in late September. The
Federal Reserve Board's strategy was successful in increasing liquidity and
restoring confidence to the U.S. financial markets. By actively monitoring
economic activity, anticipating the actions taken by the Feberal Reserve, and
actively searching out attractive investment opportunities, we were able to
achieve excellent results for our shareholders.
Portfolio Asset Mix
[pie chart]
Going Forward
Over the next six months, the United States is expected to continue to enjoy
solid economic growth, although the rate of growth is expected to be more
moderate than that of 1998. Economic data indicates that the low inflation
environment that we are presently experiencing is likely to continue. Prices on
consumer goods are expected to remain stable or perhaps go even lower. The
Fund's objective will remain the same: to provide safety, liquidity and
performance.
Thank you for your continued investments in the Transamerica Premier Cash
Reserve Fund.
Comparison of change in value of a $10,000 investment in Transamerica Premier
cash reserve fund with the ibc's money fund report**
[mountain chart]
Total Returns Annualized
As of December 31, 1998 Since Inception* One Year
Investor Class 5.44% 5.45%
Class A 5.07% 5.09%
Class M 4.80% 4.79%
The IBC's Money Fund Report(a) 4.97% 4.96% Investor Class ($11,879 at 12/31/98)
Class A ($11,745 at 12/31/98) Class M ($11,647 at 12/31/98) The IBC's Money Fund
Report(a) ($11,710 at 12/31/98) The IBC's Money Fund ReportTM -All Taxable,
First Tier is a composite of taxable money market funds that meet the SEC's
definition of first tier securities contained in Rule 2a-7 under the Investment
Company Act of 1940. It does not reflect any commissions or fees which would be
incurred by an investor purchasing the securities it represents.
The Fund is neither insured nor guaranteed by the U.S. government, and
there can be no assurance that the Fund will be able to maintain a stable net
asset value of $1.00 per share.
The Investment Adviser agreed to waive its Adviser Fee and the
Administrator agreed to assume certain other operating expenses for the Fund.
Otherwise, the current and effective yields would have been 4.91% and 5.03%,
respectively.
* Investor Class - October 2, 1995. Class A and Class M - June 30, 1998.
** Hypothetical illustration of $10,000 invested at inception, assuming
reinvestment of dividends and capital gains at net asset value through December
31, 1998.
Note: All performance information represents past performance and is
not indicative of future results. If the Investment Adviser had not waived fees
and the Administrator had not reimbursed expenses, the aggregate total return of
the Fund would have been lower. Performance shown for Class A and Class M prior
to June 30, 1998 is based on the Investor Class of this Fund, but is
recalculated using the current maximum sales charge for each class.
Transamerica Premier funds 1998 annual report Page 28
Transamerica Premier Cash Reserve Fund
Schedule of Investments - December 31, 1998
Principal Amortized
Amount Cost
Principal Amortized
Amount Cost Commercial Paper - Domestic - 98.8%
Agricultural Machinery - 4.4%
Deere & Company
5.170% 01/14/99 $ 800,000 $ 798,506
5.000% 01/15/99 500,000 499,028
5.100% 03/05/99 800,000 792,860
5.030% 03/09/99 1,300,000 1,287,830
3,378,224
Banking - 4.8%
J.P. Morgan & Company, Inc.
5.090% 01/27/99 1,400,000 1,394,854
5.100% 02/19/99 2,300,000 2,284,034
3,678,888
Chemicals - 4.3%
E. I. du Pont de Nemours and Company
4.860% 02/25/99 3,300,000 3,275,498
Commercial Financial Services - 18.3%
Assets Securitization Cooperative Corporation
5.500% 01/20/99 2,600,000 2,592,453
5.220% 03/12/99 1,200,000 1,187,820
Associates Corporation of North America
5.110% 01/14/99 3,300,000 3,293,911
5.270% 01/14/99 200,000 199,619
5.280% 01/14/99 300,000 299,428
General Electric Capital Corporation
5.330% 01/08/99 500,000 499,482
5.280% 01/21/99 200,000 199,413
5.470% 02/02/99 2,200,000 2,189,303
5.240% 02/09/99 350,000 348,013
5.490% 02/24/99 950,000 942,177
IBM Credit Corporation
5.250% 03/04/99 1,900,000 1,882,821
John Deere Finance Ltd.
5.280% 01/21/99 300,000 299,120
13,933,560
Computers & Business Equipment - 2.6%
IBM Corporation
5.290% 01/07/99 700,000 699,383
Xerox Corporation
4.850% 02/08/99 1,300,000 1,293,345
1,992,728
Conglomerate - 4.8%
Gillette Company
5.120% 01/04/99 1,200,000 1,199,488
5.120% 01/08/99 2,500,000 2,497,511
3,696,999
Consumer Financial Services - 13.5%
Ford Motor Credit Company
5.370% 01/08/99 $3,500,000 $ 3,496,345
5.290% 01/14/99 400,000 399,236
5.010% 01/28/99 250,000 249,061
Motorola Credit Corporation
4.980% 02/05/99 500,000 497,579
Toyota Motor Credit Corporation
5.000% 01/15/99 700,000 698,639
USAA Capital Corporation
4.900% 02/08/99 3,700,000 3,680,863
Xerox Credit Corporation
5.050% 01/12/99 1,250,000 1,248,071
10,269,794
Consumer Products - 1.0%
The Procter & Gamble Company
5.000% 01/26/99 800,000 797,222
Electronics - 1.8%
Motorola, Inc.
5.140% 01/28/99 800,000 796,916
5.080% 02/25/99 600,000 595,343
1,392,259
Financial Services - 14.5%
Caterpillar Financial Services
5.100% 01/08/99 185,000 184,817
5.120% 01/25/99 1,400,000 1,395,221
5.150% 01/25/99 958,000 954,711
5.220% 03/10/99 500,000 495,070
Export Development Corporation
5.150% 01/04/99 3,800,000 3,798,369
Merrill Lynch & Company, Inc.
5.080% 01/13/99 400,000 399,323
5.350% 01/13/99 400,000 399,287
5.500% 01/14/99 875,000 873,262
5.400% 01/15/99 760,000 758,404
5.480% 01/15/99 1,200,000 1,197,443
5.060% 01/29/99 300,000 298,819
5.170% 01/29/99 280,000 278,874
11,033,600
Food & Beverages - 4.4%
Coca Cola Company
5.170% 01/15/99 400,000 399,196
5.000% 02/09/99 2,000,000 1,989,166
4.950% 04/09/99 1,000,000 986,525
3,374,887
Food Processing - 4.1%
Cargill, Inc.
5.210% 02/12/99 1,450,000 1,441,186
5.000% 03/17/99 1,700,000 1,682,292
3,123,478
Insurance - 2.6% AIG Funding, Inc.
5.030% 01/22/99 1,950,000 1,944,278
Leisure & Entertainment - 3.8%
The Walt Disney Company
5.200% 01/11/99 $ 500,000 $ 499,278
5.050% 02/05/99 2,400,000 2,388,216
2,887,494
Oil - 5.5%
Chevron Corporation
5.250% 01/15/99 2,200,000 2,195,508
5.200% 01/22/99 500,000 498,483
5.100% 02/03/99 1,500,000 1,492,988
4,186,979
Photography - 4.6%
Eastman Kodak Company
5.050% 01/25/99 3,500,000 3,488,217
Telecommunications - 3.8%
BellSouth Telecommunications, Inc.
4.930% 02/23/99 2,900,000 2,878,952
Total Commercial Paper - Domestic
(amortized cost $75,333,057) 75,333,057
Commercial Paper - Foreign - 1.3% Toronto Dominion Holdings (amortized cost
$997,275)
5.450% 01/19/99 $ 1,000,000 $ 997,275
REPURCHASE AGREEMENT - 0.5%
State Street Bank and Trust Company, 4.00%, due 01/04/99, (collateralized by
$415,000 par value U.S. Treasury Note, 6.375%, due 03/31/01, with a value of
$436,860, cost $425,000) 425,000 425,000
Total Investments - 100.6%
(amortized cost $76,755,332) 76,755,332
Liabilities in Excess of Other Assets - (0.6)% (486,433)
Net Assets - 100.0% $ 76,268,899
See notes to financial statements Page 29
Transamerica Premier Funds 1998 Annual Report
Transamerica Premier cash reserve Fund (concluded)
Schedule of Investments - December 31, 1998 Principal Amortized
Amount Cost
Principal Amortized
Amount Cost See notes to financial statements
Transamerica Premier funds 1998 annual report P
age 30
<TABLE>
<CAPTION>
Statements of Assets and Liabilities
December 31, 1998 Transamerica Transamerica Transamerica Transamerica Transamerica
Transamerica Transamerica Transamerica Transamerica
Premier Premier Premier Premier Premier Premier Premier Premier Premier
Aggressive Small Company Equity Value Index Balanced High Yield Bond Cash
Reserve
Growth Fund Fund Fund Fund Fund Fund Bond Fund Fund Fund
Assets
<S> <C> <C> <C> <C>
Investments, at cost $ 131,906,191 $ 162,833,411 $ 207,504,200 $
7,742,808 $ 27,159,142 $ 45,090,961 $ 72,891,574 $ 16,700,588
$ 76,755,332
Investments, at value $ 179,378,809 $ 209,249,292 $289,570,937 $
9,176,094 $ 36,472,896 $ 60,806,828 $ 70,755,353 $ 17,179,062
$ 76,755,332
Cash 1,126 683 287 - 857 674
319 436 183
Receivables:
Dividends and interest 3,620 43,620 59,091 6,622
34,740 455,371 1,545,547 236,369 47
Variation margin - - - - 10,200
Securities sold - 1,167,461 1,180,587 114,000
293,984 - 475,000 - -
Fund shares sold 3,476,749 7,439,044 1,196,743
4,108 148,146 1,345,895 44 2,202 75,577
Due from Administrator 16,498 15,532 4,684 13,094
29,215 4,901 12,603 7,463 34,180
Other receivables - - - - -
- - 162,387 - -
Prepaid expenses and other assets 8,595 20,813 16,974 12,740
10,836 11,898 6,136 11,016 21,398
182,885,397 217,936,445 292,029,303 9,326,658
37,000,874 62,625,567 72,957,389 17,436,548 76,886,717
Liabilities
Payables:
Securities purchased 3,698,610 6,802,073 715,012
102,192 492,657 492,410 - - -
Payable due to custodian - - - 9,712 -
- - - - -
Fund shares redeemed 1,366,682 1,440,931 388,216
3,579 12,596 44,603 3,191 1,229 444,522
Advisory fees 109,731 117,961 196,965 5,823 8,813
38,175 33,967 8,887 23,971
Directors fees 1,941 1,923 3,758 198 449
643 1,401 139 992
Distribution fees 32,275 34,695 57,932 1,942
2,939 12,725 297 3,703 4
Payable to Adviser 17,152 17,152 17,152 34,327
17,152 17,152 12,374 17,152 17,152
Other accrued expenses 163,318 131,300 329,447 55,054 121,278
97,419 89,378 62,921 131,177
5,389,709 8,546,035 1,708,482 212,827
655,884 703,127 140,608 94,031 617,818
Total Net Assets $ 177,495,688 $ 209,390,410 $ 290,320,821 $ 9,113,831
$ 36,344,990 $ 61,922,440 $ 72,816,781 $ 17,342,517 $
76,268,899
Net Assets Consist Of:
Paid in capital $ 133,571,575 $ 163,315,654 $208,452,038 $ 8,543,870
$ 26,194,997 $ 46,157,851 $ 75,567,922 $ 16,746,499 $
76,268,899
Undistributed net investment
income (loss) - - - - -
31,508 12,502 762 -
Accumulated net realized
gain (loss) on investments
and futures transactions (3,548,505) (341,125) (197,954)
(863,325) 711,989 17,214 (627,422) 116,782 -
Net unrealized appreciation
(depreciation) of investments and
futures contracts 47,472,618 46,415,881 82,066,737
1,433,286 9,438,004 15,715,867 (2,136,221) 478,474
- -
Total Net Assets $ 177,495,688 $ 209,390,410 $ 290,320,821 $ 9,113,831
$ 36,344,990 $ 61,922,440 $ 72,816,781 $ 17,342,517 $
76,268,899
Investor Class
Net Assets $ 177,492,776 $ 209,387,510 $ 290,318,271 $ 9,111,311
$ 36,342,419 $ 61,919,880 $ 1,401,715 $ 17,340,071 $
76,266,569
Shares outstanding 7,916,080 9,521,241 11,717,457
859,978 1,950,617 3,218,591 145,497 1,666,284
76,266,569
Net Asset Value Per Share $ 22.42 $ 21.99 $ 24.78 $ 10.59 $ 18.63 $
19.24 $ 9.63 $ 10.41 $ 1.00
Institutional Class
Net Assets - - - - - -
$ 71,415,066 - -
Share Outstanding - - - - - -
7,430,059 - -
Net Asset Value Per Share - - - - -
- - $ 9.61 - -
Class A
Net Assets $ 1,434 $ 1,429 $ 1,289 $ 1,260 $ 1,322 $
1,290 - $ 1,248 $ 1,154
Share Outstanding 64 65 52 119 71 67
- - 120 1,154
Net Asset Value Per Share $ 22.41 $ 21.99 $ 24.79 $ 10.59 $ 18.62 $
19.25 - $ 10.40 $ 1.00
Class M
Net Assets $ 1,478 $ 1,471 $ 1,261 $ 1,260 $ 1,249 $
1,270 - $ 1,198 $ 1,176
Share Outstanding 66 67 51 119 67 66
- - 115 1,176
Net Asset Value Per Share $ 22.39 $ 21.96 $ 24.73 $ 10.59 $ 18.64 $
19.24 - $ 10.42 $ 1.00 See notes to financial statements Page 31
Transamerica Premier Funds 1998 Annual Report
Statements of Operations
For the year ended December 31, 1998 Transamerica Transamerica Transamerica Transamerica
Transamerica Transamerica Transamerica Transamerica Transamerica
Premier Premier Premier Premier Premier Premier Premier Premier Premier
Aggressive Small Company Equity Value Index Balanced High Yield Bond Cash
Reserve
Growth Fund Fund Fund Fund** Fund Fund Bond Fund*** Fund
Fund
Investment Income
Interest income $ 215,089 $ 265,774 $ 436,787 $ 15,518 $ 426,860 $
1,145,275 $ 3,236,131 $ 1,133,847 $ 3,701,645
Dividend income 66,073 75,857 667,327 58,659 330,547*
119,363 105,062 1,980 -
Total Income 281,162 341,631 1,104,114 74,177 757,407
1,264,638 3,341,193 1,135,827 3,701,645
Expenses
Investment adviser fee 502,217 400,544 2,029,581 48,002
90,474 313,648 190,256 94,177 233,663
Transfer agent fees 153,290 101,950 390,493 50,452 97,885
101,331 21,044 60,548 150,403 Distribution fees:
Investor class 147,708 117,799 596,933 15,997 30,159
104,541 867 39,233 -
Class A 2 2 2 2 2 2
- - 2 2
Class M 6 5 5 5 4 4
- - 4 4
Custodian fees 52,148 45,707 155,062 23,066 108,333
50,169 29,779 34,695 56,501
Registration fees 65,868 64,689 107,984 4,874 16,877
22,425 21,695 15,429 33,811
Audit fees 20,258 20,369 65,697 2,004 9,347
10,300 14,769 1,228 13,948
Legal fees 6,836 6,934 15,559 693 2,739
4,014 5,470 1,478 6,477
Printing 7,292 4,247 20,175 1,117 2,599 3,073
3,000 679 4,911
Directors' fees and expenses 5,923 4,506 26,732 596
2,679 3,683 2,831 1,350 5,512
Amortization of deferred
registration fees 8,648 8,648 8,648 21,587 8,648
8,648 6,238 8,648 8,836
Other expenses 2,333 2,375 12,893 508 2,835
2,813 1,017 1,580 4,387
Total expenses before waiver
and reimbursement 972,529 777,775 3,429,764 168,903
372,581 624,651 296,966 259,051 518,455
Reimbursed and waived expenses (145,344) (118,099) (27,335)
(92,093) (297,181) (27,547) (71,179) (55,004) (351,450)
Net Expenses 827,185 659,676 3,402,429 76,810 75,400
597,104 225,787 204,047 167,005
Net Investment Income (Loss) (546,023) (318,045) (2,298,315)
(2,633) 682,007 667,534 3,115,406 931,780 3,534,640
Net Realized and Unrealized
Gain (Loss) on Investments
Net realized gain (loss) on
investments and futures contracts (3,525,357) (154,132) (197,954)
(863,325) 1,256,928 2,033,279 (565,418) 523,889
- -
Change in net unrealized
appreciation (depreciation) of
investments and futures contracts 46,190,155 46,064,490 58,001,638
1,433,286 5,309,621 7,873,490 (2,136,221) (16,451)
- -
Net Realized and Unrealized
Gain (Loss) on Investments 42,664,798 45,910,358 57,803,684
569,961 6,566,549 9,906,769 (2,701,639) 507,438 -
Net Increase in Net Assets
Resulting From Operations $ 42,118,775 $ 45,592,313 $ 55,505,369 $
567,328 $ 7,248,556 $ 10,574,303 $ 413,767 $ 1,439,218 $
3,534,640
* Net of foreign withholding taxes, the amount that was withheld in the Index Fund was $1,806.
** Inception - March 31, 1998.
*** Inception - June 30, 1998.
See notes to financial statements
Transamerica Premier funds 1998 annual report Page 32
Statements of Changes in Net Assets
Transamerica
Transamerica Premier Transamerica Premier Transamerica Premier Premier
Aggressive Growth Fund Small Company Fund Equity Fund Value Fund
Year Ended Period Ended Year Ended Period Ended Year Ended Year Ended
Period Ended
December 31, December 31, December 31, December 31, December 31, December
31, December 31,
1998 1997* 1998 1997* 1998 1997 1998**
Increase in Net Assets
Operations:
Net investment loss $ (546,023) $ (29,665) $ (318,045) $ (19,581) $
(2,298,315) $ (453,467) $ (2,633)
Net realized gain (loss) on
investments and futures
transactions (3,525,357) (5,049) (154,132) 651,499
(197,954) 1,028,129 (863,325)
Net change in unrealized appreciation
(depreciation) of investments 46,190,155 1,282,463 46,064,490
351,391 58,001,638 18,094,426 1,433,286
Net increase in net assets resulting
from operations 42,118,775 1,247,749 45,592,313
983,309 55,505,369 18,669,088 567,328
Dividends/Distributions
to Shareholders
Net investment income:
Investor class - - - - -
- - (24,596)
Institutional class - - - - -
- - -
Class A - - - - - -
(3)
Class M - - - - - -
(1)
Net realized gains:
Investor class (620) - (830,079) -
(262,088) (762,199) -
Institutional class - - - - -
- - -
Class A - - - - - -
- -
Class M - - - - - -
- -
Net decrease in net assets resulting
from distributions (620) - (830,079) -
(262,088) (762,199) (24,600)
Fund Share Transactions 122,597,180 11,531,604 153,506,055
10,137,812 123,510,486 62,593,208 8,571,103
Net increase in net assets 164,715,335 12,779,353 198,268,289
11,121,121 178,753,767 80,500,097 9,113,831
Net Assets
Beginning of period 12,780,353 1,000 11,122,121 1,000
111,567,054 31,066,957 -
End of period (1) $ 177,495,688 $ 12,780,353 $ 209,390,410 $ 11,122,121
$ 290,320,821 $ 111,567,054 $ 9,113,831
(1) Includes undistributed net
investment loss of: $ - $ - $ - $ - $ -
$ - $ -
* Inception - June 30, 1997.
** Inception - March 31, 1998.
See notes to financial statements Page 33 Transamerica Premier Funds 1998 Annual Reportstatements of
changes in net assets (concluded)
Transamerica
Transamerica Premier Transamerica Premier Premier High Transamerica Premier
Transamerica Premier
Index Fund Balanced Fund Yield Bond Bond Fund Cash Reserve Fund
Year Ended Year Ended Year Ended Year Ended Period Ended Year Ended
Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31, December 31, December 31,
December 31, December 31, December 31,
1998 1997 1998 1997 1998* 1998 1997 1998 1997
Increase in Net Assets
Operations:
Net investment income $ 682,007 $ 400,539 $ 667,534 $ 176,260 $ 3,115,406
$ 931,780 $ 827,786 $ 3,534,640 $ 2,260,400
Net realized gain (loss) on
investments and futures
transactions 1,256,928 1,010,570 2,033,279
16,730 (565,418) 523,889 (204,704) - -
Net change in unrealized appreciation
(depreciation) of investments
and futures contracts 5,309,621 2,901,178 7,873,490
5,682,201 (2,136,221) (16,451) 670,280 - -
Net increase in net assets resulting
from operations 7,248,556 4,312,287 10,574,303
5,875,191 413,767 1,439,218 1,293,362 3,534,640
2,260,400
Dividends/Distributions
to Shareholders
Net investment income:
Investor class (689,572) (398,741) (636,780)
(175,486) (36,503) (931,741) (825,680) (3,534,586)
(2,258,470)
Institutional class - - - -
(3,069,899) - - - -
Class A/Adviser Class (18) (400) (11) - -
(33) (1,373) (28) (1,930)
Class M (16) - (9) - -
(33) - (26) -
Net realized gains:
Investor class (1,499,922) (109,162) (1,875,029) -
(1,245) (187,616) - - -
Institutional class - - - -
(63,702) - - - -
Class A/Adviser Class (19) - (40) - -
(14) - - -
Class M (18) - (40) - -
(13) - - -
Net decrease in net assets resulting
from distribution (2,189,565) (508,303) (2,511,909)
(175,486) (3,171,349) (1,119,450) (827,053) (3,534,640)
(2,260,400)
Fund Share Transactions 7,293,877 9,280,981 27,061,075
4,999,432 75,574,363 2,786,596 1,108,065 25,022,731
19,002,190
Net increase in net assets 12,352,868 13,084,965 35,123,469
10,699,137 72,816,781 3,106,364 1,574,374 25,022,731
19,002,190
Net Assets
Beginning of period 23,992,122 10,907,157 26,798,971
16,099,834 - 14,236,153 12,661,779 51,246,168
32,243,978
End of period (1) $ 36,344,990 $ 23,992,122 $ 61,922,440 $ 26,798,971
$ 72,816,781 $ 17,342,517 $ 14,236,153 $ 76,268,899 $
51,246,168
(1) Includes undistributed net
investment income (loss) of: $ - $ 1,398 $ 31,508 $ 774 $
12,502 $ 762 $ 770 $ - $ -
*Inception - June 30, 1998.
See notes to financial statements Transamerica Premier funds 1998 annual report Page 34
Financial Highlights
The following table includes selected data for a share outstanding throughout each period and other performance
information derived from the financial statements. Transamerica
Transamerica Premier Transamerica Premier Premier
Aggressive Growth Fund Small Company Fund Transamerica Premier Equity Fund Value Fund
Investor Class Investor Class Investor Class Investor Class
Year Ended Period Ended Year Ended Period Ended Year Ended Year Ended
Year Ended Period Ended Period Ended
December 31, December 31, December 31, December 31, December 31, December 31,
December 31, December 31, December 31,
1998 1997* 1998 1997* 1998 1997 1996 1995** 1998***
Net Asset Value
Beginning of period $ 12.18 $ 10.00 $ 12.49 $ 10.00 $ 18.53 $
12.65 $ 9.82 $ 10.00 $ 10.00
Operations:
Net investment income (loss) 1 (0.04) (0.03) (0.02) (0.02)
(0.15) (0.04) (0.06) 0.02 0.00
Net realized and unrealized gain (loss) 10.28 2.21 9.93 2.51
6.42 6.05 2.91 (0.20) 0.62
Total from investment operations 10.24 2.18 9.91 2.49
6.27 6.01 2.85 (0.18) 0.62
Dividends/Distributions
to Shareholders:
Net investment income - - - - -
- - (0.02) - (0.03)
Net realized gains - - (0.41) - (0.02)
(0.13) - - -
Total dividends/distributions - - (0.41) -
(0.02) (0.13) (0.02) - (0.03)
Net Asset Value
End of period $ 22.42 $ 12.18 $ 21.99 $ 12.49 $ 24.78 $
18.53 $ 12.65 $ 9.82 $ 10.59
Total Return2 84.07% 21.80% 80.27% 24.90% 33.85%
47.51% 29.07% (1.80)% 6.19%
Ratios and Supplemental Data:
Expenses to average net assets:
After reimbursement/fee waiver 1.40% 1.40% 1.40% 1.40%
1.42% 1.49% 1.50% 0.25% 1.20%
Before reimbursement/fee waiver 1.60% 2.08% 1.59% 2.12%
1.42% 1.51% 1.95% 2.39% 2.21%
Net investment income (loss), after
reimbursement/fee waiver (0.92)% (0.59)% (0.67)% (0.43)%
(0.96)% (0.71)% (0.66)% 1.51% (0.04)%
Portfolio turnover rate 32% 17% 26% 74% 59%
13% 60% - 72%
Net assets, end of period
(in thousands) $ 177,493 $ 12,780 $ 209,388 $ 11,122 $ 290,318 $
111,567 $ 30,454 $ 11,070 $ 9,111
Annualized
* Inception (Investor Class) - June 30, 1997.
** Inception (Investor Class) - October 2, 1995.
*** Inception (Investor Class) - March 31, 1998.
1 Net investment income (loss) is after waiver of fees by the Adviser
and reimbursement of certain expenses by the Administrator (Note 2). If the
Adviser had not waived fees and the Administrator had not reimbursed expenses,
net investment loss per share would have been $(0.05) and $(0.06) for the
Aggressive Growth Fund, $(0.03) and $(0.06) for the Small Company Fund, for the
periods ended December 31, 1998 and 1997, respectively; $(0.15), $(0.04),
$(0.10) and $(0.01), for the Equity Fund for the periods ended December 31,
1998, 1997, 1996 and 1995, respectively and $(0.08) for the Value Fund for the
period ended December 31, 1998.
2 Total return represents aggregate total return for the period
indicated and is not annualized, for periods less than one year.
See notes to financial statements Page 35 Transamerica Premier Funds 1998 Annual Reportfinancial
highlights (continued)
The following table includes selected data for a share outstanding throughout each period and other performance
information derived from the financial statements. Transamerica
Premier
High Yield
Transamerica Premier Index Fund Transamerica Premier Balanced Fund Bond Fund
Investor Class Investor Class Investor Class
Year Ended Year Ended Year Ended Period Ended Year Ended Year Ended
Year Ended Period Ended Period Ended
December 31, December 31, December 31, December 31, December 31, December 31,
December 31, December 31, December 31,
1998 1997 1996 1995* 1998 1997 1996 1995* 1998**
Net Asset Value
Beginning of period $ 15.49 $ 11.96 $ 10.59 $ 10.00 $ 15.54 $
11.57 $ 10.23 $ 10.00 $ 10.00
Operations:
Net investment income 1 0.37 0.32 0.27 0.06 0.23
0.11 0.14 0.06 0.73
Net realized and unrealized gain (loss) 3.98 3.60 2.06 0.53
4.31 3.97 1.40 0.17 (0.68)
Total from investment operations 4.35 3.92 2.33 0.59
4.54 4.08 1.54 0.23 0.05
Dividends/Distributions
to Shareholders:
Net investment income (0.37) (0.32) (0.33) - (0.22)
(0.11) (0.20) - (0.41)
Net realized gains (0.84) (0.07) (0.63) - (0.62)
- - - - (0.01)
Total dividends/distributions (1.21) (0.39) (0.96) -
(0.84) (0.11) (0.20) - (0.42)
Net Asset Value
End of period $ 18.63 $ 15.49 $ 11.96 $ 10.59 $ 19.24 $
15.54 $ 11.57 $ 10.23 $ 9.63
Total Return2 28.45% 33.14% 22.33% 5.90% 29.30%
35.38% 15.28% 2.30% 0.58%
Ratios and Supplemental Data:
Expenses to average net assets:
After reimbursement/fee waiver 0.25% 0.25% 0.35% 0.25%
1.43% 1.45% 1.45% 0.25% 0.90%
Before reimbursement/fee waiver 1.14% 1.57% 2.29% 4.12%
1.43% 1.62% 1.94% 2.12% 6.50%
Net investment income, after
reimbursement/fee waiver 2.26% 2.31% 2.48% 2.70%
1.60% 0.83% 1.34% 3.12% 23.97%
Portfolio turnover rate 32% 11% 94% 4% 32%
23% 19% 16% 22%
Net assets, end of period
(in thousands) $ 36,342 $ 23,992 $ 10,814 $ 6,934 $ 61,920 $
26,799 $ 16,041 $ 12,084 $ 1,402
Annualized
* Inception (Investor Class) - October 2, 1995.
** Inception (Investor Class) - June 30, 1998.
1 Net investment income (loss) is after waiver of fees by the Adviser
and reimbursement of certain expenses by the Administrator (Note 2). If the
Adviser had not waived fees and the Administrator had not reimbursed expenses,
net investment income (loss) per share would have been $0.22, $0.14, $0.06 and
($0.03) for the Index Fund and $0.23, $0.09, $0.09 and $0.02, for the Balanced
Fund for the periods ended December 31, 1998, 1997, 1996 and 1995, respectively
and $0.56 for the High Yield Bond Fund for the period ended December 31, 1998.
2 Total return represents aggregate total return for the period
indicated and is not annualized, for periods less than one year.
See notes to financial statements Transamerica Premier funds 1998 annual report Page 36
Transamerica
Premier
High Yield
Transamerica Premier Bond Fund Transamerica Premier Cash Reserve Fund Bond Fund
Institutional Investor Class Investor Class Class
Year Ended Year Ended Year Ended Period Ended Year Ended Year Ended
Year Ended Period Ended Period Ended
December 31, December 31, December 31, December 31, December 31, December 31,
December 31, December 31, December 31,
1998 1997 1996 1995* 1998 1997 1996 1995* 1998**
Net Asset Value
Beginning of period $ 10.19 $ 9.86 $ 10.37 $ 10.00 $ 1.00 $
1.00 $ 1.00 $ 1.00 $ 10.00
Operations:
Net investment income 1 0.61 0.62 0.56 0.16 0.05
0.05 0.05 0.01 0.42
Net realized and unrealized gain (loss) 0.33 0.33 (0.46) 0.32
- - - - - (0.38)
Total from investment operations 0.94 0.95 0.10 0.48
0.05 0.05 0.05 0.01 0.04
Dividends/Distributions
to Shareholders:
Net investment income (0.61) (0.62) (0.61) (0.11) (0.05)
(0.05) (0.05) (0.01) (0.42)
Net realized gains (0.11) - - - -
- - - - (0.01)
Total dividends/distributions (0.72) (0.62) (0.61) (0.11)
(0.05) (0.05) (0.05) (0.01) (0.43)
Net Asset Value
End of period $ 10.41 $ 10.19 $ 9.86 $ 10.37 $ 1.00 $
1.00 $ 1.00 $ 1.00 $ 9.61
Total Return2 9.58% 9.99% 1.16% 4.82% 5.45%
5.48% 5.34% 1.39% 0.51%
Ratios and Supplemental Data:
Expenses to average net assets:
After reimbursement/fee waiver 1.30% 1.30% 1.30% 0.25%
0.25% 0.25% 0.25% 0.25% 0.65%
Before reimbursement/fee waiver 1.47% 1.64% 1.81% 1.93%
0.73% 0.95% 1.09% 1.37% 0.80%
Net investment income, after
reimbursement/fee waiver 5.94% 6.25% 5.66% 6.55%
5.29% 5.35% 5.21% 5.55% 8.81%
Portfolio turnover rate 165% 99% 7% 19% -
- - - - 22%
Net assets, end of period
(in thousands) $ 17,340 $ 14,236 $ 12,553 $ 11,827 $ 76,267 $
51,246 $ 32,041 $ 27,996 $ 71,415
Annualized
* Inception (Investor Class) - October 2, 1995.
** Inception (Institutional Class) - June 30, 1998.
1 Net investment income (loss) is after waiver of fees by the Adviser
and reimbursement of certain expenses by the Administrator (Note 2). If the
Adviser had not waived fees and the Administrator had not reimbursed expenses,
net investment income per share would have been $0.59, $0.58, $0.50 and $0.12
for the Bond Fund and $0.05, $0.05, $0.04 and $0.01, for the Cash Reserve Fund
for the periods ended December 31, 1998, 1997, 1996 and 1995, respectively and
$0.41 for the High Yield Bond Fund for the period ended December 31, 1998.
2 Total return represents aggregate total return for the period
indicated and is not annualized, for periods less than one year.
See notes to financial statements Page 37 Transamerica Premier Funds 1998 Annual Reportfinancial
highlights (continued)
The following table includes selected data for a share outstanding throughout
each period and other performance
information derived from the financial statements. Transamerica Transamerica Transamerica
Transamerica Transamerica Transamerica Transamerica Transamerica
Premier Premier Premier Premier Premier Premier Premier Premier
Aggressive Small Company Equity Value Index Balanced Bond Cash Reserve
Growth Fund Fund Fund Fund Fund Fund Fund Fund
Class A Class A Class A Class A Class A Class A Class A Class A
Period Ended Period Ended Period Ended Period Ended Period Ended Period Ended
Period Ended Period Ended December 31, December 31, December 31, December 31,
December 31, December 31, December 31, December 31,
1998* 1998* 1998* 1998* 1998* 1998* 1998* 1998*
Net Asset Value
Beginning of period $ 17.55 $ 17.20 $ 22.86 $ 9.71 $ 17.59 $
17.99 $ 10.32 $ 1.00
Operations:
Net investment income (loss) 1 (0.11) (0.08) (0.16) (0.02)
0.19 0.18 0.29 0.02
Net realized and unrealized gain 4.97 4.87 2.09 0.92
1.39 1.87 0.19 -
Total from investment operations 4.86 4.79 1.93 0.90
1.58 2.05 0.48 0.02
Dividends/Distributions
to Shareholders:
Net investment income - - - (0.02) (0.27)
(0.17) (0.29) (0.02)
Net realized gains - - - - (0.28)
(0.62) (0.11) -
Total dividends/distributions - - - (0.02)
(0.55) (0.79) (0.40) (0.02)
Net Asset Value
End of period $ 22.41 $ 21.99 $ 24.79 $ 10.59 $ 18.62 $
19.25 $ 10.40 $ 1.00
Total Return2 27.69% 27.85% 8.44% 9.31% 8.94%
11.41% 4.80% 2.50%
Ratios and Supplemental Data:
Expenses to average net assets:
After reimbursement/fee waiver 1.50% 1.50% 1.60% 1.30%
0.50% 1.55% 1.40% 0.60%
Before reimbursement/fee waiver 2091.85% 2146.03% 2133.52% 2553.76%
2141.94% 2068.27% 2353.12% 2413.01%
Net investment income (loss), after
reimbursement/fee waiver (1.07%) (0.79%) (1.26%) (0.42%)
2.04% 1.73% 5.66% 4.85%
Portfolio turnover rate 32% 26% 59% 72% 32%
32% 165% -
Net assets, end of period
(in thousands) $ 1 $ 1 $ 1 $ 1 $ 1 $
1 $ 1 $ 1
Annualized
* Inception (Class A) - June 30, 1998.
1 Net investment loss is after waiver of fees by the Adviser and
reimbursement of certain expenses by the Administrator (Note 2). If the Adviser
had not waived fees and the Administrator had not reimbursed expenses, net
investment loss per share would have been $(221.25) for the Aggressive Growth
Fund, $(212.68) for the Small Company Fund, $(269.96) for the Equity Fund,
$(116.09) for the Value Fund, $(203.55) for the Index Fund, $(214.50) for the
Balanced Fund, $(120.85) for the Bond Fund and $(12.31) for the Cash Reserve
Fund for the period ended December 31, 1998.
2 Total return represents aggregate total return for the period
indicated and is not annualized, for periods less than one year.
See notes to financial statements Transamerica Premier funds 1998 annual report Page 38
Transamerica Transamerica Transamerica Transamerica Transamerica Transamerica
Transamerica Transamerica
Premier Premier Premier Premier Premier Premier Premier Premier
Aggressive Small Company Equity Value Index Balanced Bond Cash Reserve
Growth Fund Fund Fund Fund Fund Fund Fund Fund
Class M Class M Class M Class M Class M Class M Class M Class M
Period Ended Period Ended Period Ended Period Ended Period Ended Period Ended
Period Ended Period Ended December 31, December 31, December 31, December 31,
December 31, December 31, December 31, December 31,
1998* 1998* 1998* 1998* 1998* 1998* 1998* 1998*
Net Asset Value
Beginning of period $ 17.55 $ 17.20 $ 22.86 $ 9.71 $ 17.59 $
17.99 $ 10.32 $ 1.00
Operations:
Net investment income (loss )1 (0.18) (0.14) (0.25) (0.05)
0.16 0.14 0.28 0.02
Net realized and unrealized gain 5.02 4.90 2.12 0.94
1.41 1.87 0.21 -
Total from investment operations 4.84 4.76 1.87 0.89
1.57 2.01 0.49 0.02
Dividends/Distributions
to Shareholders:
Net investment income - - - (0.01) (0.24)
(0.14) (0.28) (0.02)
Net realized gains - - - - (0.28)
(0.62) (0.11) -
Total dividends/distributions - - - (0.01)
(0.52) (0.76) (0.39) (0.02)
Net Asset Value
End of period $ 22.39 $ 21.96 $ 24.73 $ 10.59 $ 18.64 $
19.24 $ 10.42 $ 1.00
Total Return2 27.58% 27.67% 8.18% 9.17% 8.92%
11.22% 4.87% 2.35%
Ratios and Supplemental Data:
Expenses to average net assets:
After reimbursement/fee waiver 1.75% 1.75% 1.85% 1.55%
0.75% 1.80% 1.65% 0.85%
Before reimbursement/fee waiver 1559.17% 1554.70% 1618.88% 1654.81%
2385.32% 2322.86% 2292.61% 2402.67%
Net investment income (loss), after
reimbursement/fee waiver (1.32%) (1.05%) 1.49% (0.74%)
1.77% 1.48% 5.42% 4.61%
Portfolio turnover rate 32% 26% 59% 72% 32%
32% 165% -
Net assets, end of period
(in thousands) $ 1 $ 1 $ 1 $ 1 $ 1 $
1 $ 1 $ 1
</TABLE>
Annualized
* Inception (Class M) - June 30, 1998.
1 Net investment income (loss) is after waiver of fees by the Adviser
and reimbursement of certain expenses by the Administrator (Note 2). If the
Adviser had not waived fees and the Administrator
had not reimbursed expenses, net investment loss per share would have
been $(207.97) for the Aggressive Growth Fund, $(203.30) for the Small Company
Fund, $(269.54) for the Equity Fund, $(115.93) for the Value Fund, $(212.42) for
the Index Fund, $(215.60) for the Balanced Fund, $(118.62) for the Bond Fund and
$(12.07) for the Cash Reserve Fund for the period ended
December 31, 1998.
2 Total return represents aggregate total return for the period
indicated and is not annualized, for periods less than one year.
See notes to financial statements
Page 39 Transamerica Premier Funds 1998 Annual Report
Notes to Financial Statements
December 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES
Transamerica Investors, Inc. (the "Company") is registered under the Investment
Company Act of 1940 (the "1940 Act") as an open-end, management investment
company. The Company is composed of nine Funds: Transamerica Premier Aggressive
Growth Fund (the "Aggressive Growth Fund") which is non-diversified,
Transamerica Premier Small Company Fund (the "Small Company Fund"), Transamerica
Premier Equity Fund (the "Equity Fund"), Transamerica Premier Value Fund (the
"Value Fund"), Transamerica Premier Index Fund (the "Index Fund"), Transamerica
Premier Balanced Fund (the "Balanced Fund"), Transamerica Premier High Yield
Bond Fund ( the "High Yield Fund"), Transamerica Premier Bond Fund (the "Bond
Fund"), and Transamerica Premier Cash Reserve Fund (the "Cash Reserve Fund")
which are diversified, (collectively referred to as the "Funds"). For
information of investment objectives and strategies, please refer to the Funds'
prospectus.
Prior to April 30, 1997, each Fund had two classes of shares, Investor Class and
Adviser Class. Each share of each class represented an identical legal interest
in the same investments of a Fund, except that Adviser Class shares had higher
distribution fees. Each class had certain other expenses related solely to that
class. On April 30, 1997, the Adviser Class of each series was terminated by the
Board of Directors.
On June 30, 1998, all of the Premier Funds with the exception of the High Yield
Bond Fund launched two additional classes, Class A and Class M. The High Yield
Bond Fund was launched on June 30, 1998 on both the Investor and newly formed
Institutional Class shares. Each share of each class of a Fund represents an
identical legal interest in the investment of the Fund. The Investor,
Institutional, Class A and Class M shares differ with respect to distribution
and certain other class-specific expenses and waivers; these classes commenced
operations on the business day following inception.
The following is a summary of significant accounting policies followed by each
Fund in the preparation of its financial statements in accordance with generally
accepted accounting principles.
(A) Valuation of Securities
Equity securities listed on a principal exchange (U.S. or foreign), NASDAQ and
over-the-counter securities are valued at the last sale price, or, if no sale
occurs, at the mean between the closing bid and the closing asked prices. Debt
securities with a maturity of 61 days or more are valued on the basis of
valuations obtained from a commercial pricing service or dealer-supplied
quotations. Debt securities with a maturity of 60 days or less, and all
investments in the Cash Reserve Fund, are valued at amortized cost, which
approximates market value. Futures contracts are valued at the last sale price
on the market where the contract is principally traded. Securities for which
market quotations are not readily available are valued at the fair value as
determined in good faith pursuant to procedures established by the Company's
Board of Directors.
(B) Repurchase Agreement
Each Fund may enter into repurchase agreements with Federal Reserve System
member banks or U.S. securities dealers. A repurchase agreement occurs when, at
the time the Fund purchases an interest-bearing debt obligation, the seller
agrees to repurchase the debt obligation on a specified date in the future at an
agreed-upon price. If the seller is unable to make timely repurchase, the Fund's
expected proceeds could be delayed, or the Fund could suffer a loss in principal
or current interest, or incur costs in liquidating the collateral.
(C) Futures Contracts
The Index Fund uses S&P500 index futures as part of its strategy to track the
return of the S&P500 Index. Upon entering into a futures contract, the Fund is
required to deposit with the broker an amount of cash or cash equivalents equal
to a certain percentage of the contract amount. This is known as the initial
margin. Subsequent payments ("variation margin") are made or received by the
Fund each day, depending on the daily fluctuations of the value of the contract.
The daily changes in the contract are recorded as unrealized gains or losses.
The Fund recognizes a realized gain or loss when the contract is closed.
The use of futures contracts involves several risks. The change in value of
futures contracts corresponds primarily with the value of their underlying
instruments, which may not correlate with the change in value of the hedged
investments. In addition, the Fund may not be able to enter into a closing
transaction because of an illiquid secondary market.
(D) Securities Transactions, Investment Income and Expenses
Securities transactions are recorded as of the trade date. Gains and losses on
sales of investments are determined on the identified cost basis for both
financial statement and Federal income tax purposes. Interest income and
operating expenses are recorded daily on an accrual basis. Dividend income is
recorded on the ex-dividend date. Expenses not directly chargeable to a specific
Fund/class are allocated primarily on the basis of relative average daily net
assets.
(E) Dividends and Distributions
Dividends from net investment income on shares of the Cash Reserve Fund are
declared daily and paid monthly. Dividends from net investment income on shares
of the Bond Fund and High Yield Bond Fund are declared and paid monthly.
Dividends from net investment income, if any, on shares of the Equity Fund, the
Value Fund, the Index Fund, the Balanced Fund, the Aggressive Growth Fund and
the Small Company Fund are declared and paid annually. Each Fund distributes net
realized capital gains, if any, annually. Dividends and distributions paid by
each Fund are recorded on the ex-dividend date, except for the Cash Reserve
Fund, which records dividends daily. 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 of income and gains on various investment
securities held by the Funds, timing differences and differing characterization
of distributions made by the Funds. Dividends from net investment income are
determined on a class level. Capital gains are determined on a Fund level.
(F) Federal Income Taxes
Each Fund intends to qualify as a regulated investment company
by complying with the requirements of the Internal Revenue Code applicable to
regulated investment companies and by distributing to shareholders substantially
all of their taxable income. Therefore, no Federal income or excise tax
provision is required. As of December 31, 1998 for Federal income tax purposes,
the Aggressive Growth Fund, the Small Company Fund, the Equity Fund and the
Value Fund have capital loss carryforwards of $3,548,505, $161,704, $197,954,
$853,589, respectively, expiring in 2006. The High Yield Bond Fund has elected
to defer current year post October losses as though the losses were incurred on
the first day of the next calendar year, the amount deferred was $630,365. On
June 29,1998, the Equity and Index Fund paid a capital gains distribution of
$262,088 and $0.020 per share and $509,871 and $0.292 per share, respectively.
On December 29, 1998, the Index Fund, the Balanced Fund and the Bond Fund paid a
capital gain distribution of $154,504 and $0.082 per share, $1,875,109 and
$0.619 per share and $187,642 and $0.114 per share, respectively.
Net investment income distributions and capital gains distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are due to differing
treatments for items such as deferral of wash sales, net operating losses and
capital loss carryforwards. Permanent items identified in the period ended
December 31, 1998, have been reclassified among components of net assets as
follows:
Undistributed Undistributed
Net Investment Net Realized
Fund Income Gains and Losses Paid-In Capital
Aggressive Growth Fund 546,023 - (546,023)
Small Company Fund 318,045 - (318,045)
Equity Fund 2,298,315 - (2,298,315)
Value Fund 27,233 - (27,233)
Index Fund 6,201 (6,201) -
Balanced Fund - - -
High Yield Fund 3,498 2,943 (6,441)
Bond Fund 19 (19) -
Cash Reserve Fund - - -
(G) Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
reflect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
2. INVESTMENT ADVISORY FEES AND OTHER
TRANSACTIONS WITH AFFILIATES
The Company has entered into an Investment Advisory and Administrative Services
Agreement (the "Agreement") with Transamerica Investment Services, Inc. (the
"Investment Adviser"), a wholly owned subsidiary of Transamerica Corporation, on
behalf of each Fund. For its services to the Funds, the Investment Adviser
receives a monthly fee, based on an annual percentage of the average daily net
assets of each Fund. The annual fee for the Funds are as follows:
First Next In Excess of
Fund $1 Billion $1 Billion $2 Billion
Aggressive Growth Fund 0.85% 0.82% 0.80%
Small Company Fund 0.85% 0.82% 0.80%
Equity Fund 0.85% 0.82% 0.80%
Value Fund 0.75% 0.72% 0.70%
Index Fund 0.30% 0.30% 0.30%
Balanced Fund 0.75% 0.72% 0.70%
High Yield Fund 0.55% 0.52% 0.50%
Bond Fund 0.60% 0.57% 0.55%
Cash Reserve Fund 0.35% 0.35% 0.35%
The Company's Administrator is Transamerica Occidental Life Insurance Company
(the "Administrator"), a wholly owned subsidiary of Transamerica Insurance
Corporation of California, which in turn is a wholly owned subsidiary of
Transamerica Corporation. The Administrator provides the Funds with
administrative and clerical services. The Administrator receives its fee
directly from the Investment Adviser, and receives no compensation from the
Funds.
The Investment Adviser has agreed to waive its fee, and the Administrator has
agreed to assume any other operating expenses (other than certain extraordinary
or non-recurring expenses) which together exceed a specified percentage of the
average daily net assets of that Fund. These waivers and subsidies may be
terminated at any time without notice. The specified percentages are as follows:
Investor Institutional
Fund Class Class Class A Class M
Aggressive Growth Fund 1.40% - 1.50% 1.75%
Small Company Fund 1.40% - 1.50% 1.75%
Equity Fund 1.50% - 1.60% 1.85%
Value Fund 1.20% - 1.30% 1.55%
Index Fund 0.25% - 0.50% 0.75%
Balanced Fund 1.45% - 1.55% 1.80%
High Yield Fund 0.90% 0.65% - -
Bond Fund 1.30% - 1.40% 1.65%
Cash Reserve Fund 0.25% - 0.60% 0.85%
Transamerica Securities Sales Corporation ("TSSC") is the principal underwriter
and distributor of the shares of each of the Funds. TSSC is a wholly-owned
subsidiary of Transamerica Insurance Corporation of California.
No officer, director, or employee of the Investment Adviser, the Administrator
or any of their respective affiliates receives any compensation from the Funds
for acting as a director or officer of the Company. Each director of the Company
who is not an "interested person" (as that term is defined in the 1940 Act)
receives from the Funds a $10,000 annual fee, $1,000 for each meeting of the
Company's Board attended, and $500 for each Board committee meeting attended,
and is reimbursed for expenses incurred in connection with such attendance. For
the year ended December 31, 1998, the Funds expensed aggregate fees of $53,812
to all directors who are not affiliated persons of the Adviser.
Certain directors and officers of the fund are also directors and officers of
the Adviser and other affiliated Transamerica entities.
As of December 31, 1998, Transamerica Corporation and its affiliates held the
following percentages of outstanding shares:
Fund
Aggressive Growth Fund 8.75%
Small Company Fund 6.99%
Equity Fund 20.05%
Value Fund 58.30%
Index Fund 70.61%
Balanced Fund 41.30%
High Yield Bond Fund 0%
Bond Fund 83.25%
Cash Reserve Fund 40.99%
3. Distribution Plans
The 12b-1 plans of distribution and related distribution contracts require the
Funds to pay distribution fees to TSSC as compensation for its activities, not
as reimbursement for specific expenses. For the Investor Shares, there is an
annual 12b-1 distribution fee of 0.25% of the average daily net assets, except
for the Index Fund and the Cash Reserve Fund, which pay a distribution fee of
0.10% of the average daily net assets. On November 1, 1997, TSSC agreed to waive
the distribution fees for the Cash Reserve Fund. For the Institutional Shares,
there is no annual 12b-1 distribution fees. For the Class A and Class M shares,
there is an annual 12b-1 distribution fee of 0.35% and 0.60%, respectively.
4. Security Transactions
The aggregate cost of purchases and proceeds from sales of securities, excluding
short-term investments, for the year ended December 31, 1998 were as follows:
<TABLE>
<CAPTION>
U.S. U.S.
Government ProceedsGovernment
Fund Purchases Purchases from Sales Sales
<S> <C> <C> <C> <C>
Aggressive Growth Fund $ 136,005,466 $ - $ 18,375,574 $ -
Small Company Fund 139,543,870 - 11,896,875 -
Equity Fund 253,013,630 - 133,724,470 -
Value Fund 14,087,700 - 5,481,567 -
Index Fund 14,972,833 103,736 7,232,557 -
High Yield Fund 19,686,854 - 13,151,871 -
Balanced Fund 32,516,169 1,588,750 12,452,666 -
Bond Fund 23,921,780 3,661,164 20,359,094 4,285,811
5. Capital Stock Transactions
At December 31, 1998, there were two billion shares of $0.001 par value stock authorized. The tables below summarize
the transactions in Fund shares for the periods and class indicated.
TRANSAMERICA PREMIER
AGGRESSIVE Growth fund Authorized Shares - 60,000,000
Year Ended Period Ended
December 31, 1998 December 31, 1997*
Investor Class Shares Shares Amount Shares Amount
Capital stock sold 12,567,050 $ 220,057,887 1,182,281 $ 13,130,142
Capital stock issued
upon reinvestment of
dividends and
distributions 37 649 - -
Capital stock redeemed (5,700,247) (97,462,828) (133,141) (1,598,538)
Net increase 6,866,840 $ 122,595,708 1,049,140 $ 11,531,604
*Inception - June 30, 1997.
TRANSAMERICA PREMIER
AGGRESSIVE Growth fund
Period Ended
December 31, 1998**
Class A Shares Shares Amount
Capital stock sold 125 $ 2,285
Capital stock issued
upon reinvestment of
dividends and
distributions - -
Capital stock redeemed (61) (1,255)
Net increase 64 $ 1,030
**Inception - June 30, 1998.
TRANSAMERICA PREMIER
AGGRESSIVE Growth fund
Period Ended
December 31, 1998**
Class M Shares Shares Amount
Capital stock sold 174 $ 2,661
Capital stock issued
upon reinvestment of
dividends and
distributions - -
Capital stock redeemed (108) (2,219)
Net increase 66 $ 442
**Inception - June 30, 1998.
TRANSAMERICA PREMIER
SMALL COMPANY fund Authorized Shares - 60,000,000
Year Ended Period Ended
December 31, 1998 December 31, 1997*
Investor Class Shares Shares Amount Shares Amount
Capital stock sold 14,176,467 $ 249,749,475 1,477,867 $ 17,273,937
Capital stock issued
upon reinvestment of
dividends and
distributions 43,140 738,126 - -
Capital stock redeemed (5,588,738) (96,982,795) (587,595) (7,136,125)
Net increase 8,630,869 $ 153,504,806 890,272 $ 10,137,812
*Inception - June 30, 1997.
TRANSAMERICA PREMIER
SMALL COMPANY fund
Period Ended
December 31, 1998**
Class A Shares Shares Amount
Capital stock sold 113 $ 1,935
Capital stock issued
upon reinvestment of
dividends and
distributions - -
Capital stock redeemed (48) (948)
Net increase 65 $ 987
**Inception - June 30, 1998.
TRANSAMERICA PREMIER
SMALL COMPANY fund
Period Ended
December 31, 1998**
Class M Shares Shares Amount
Capital stock sold 185 $ 2,605
Capital stock issued
upon reinvestment of
dividends and
distributions - -
Capital stock redeemed (118) (2,343)
Net increase 67 $ 262
**Inception - June 30, 1998.
TRANSAMERICA PREMIER
EQUITY fund Authorized Shares - 100,000,000
Year Ended Year Ended
December 31, 1998 December 31, 1997
Investor Class Shares Shares Amount Shares Amount
Capital stock sold 13,980,385 $298,503,722 4,549,326 $ 80,027,236
Capital stock issued
upon reinvestment of
dividends and
distributions 11,728 265,226 39,406 729,460
Capital stock redeemed (8,295,617) (175,260,229) (975,133) (17,534,999)
Net increase 5,696,496 $ 123,508,719 3,613,599 $ 63,221,697
TRANSAMERICA PREMIER
EQUITY fund
Period Ended
December 31, 1998**
Class A Shares Shares Amount
Capital stock sold 91 $ 1,991
Capital stock issued
upon reinvestment of
dividends and
distributions - -
Capital stock redeemed (39) (913)
Net increase 52 $ 1,078
**Inception - June 30, 1998.
TRANSAMERICA PREMIER
EQUITY fund
Period Ended
December 31, 1998**
Class M Shares Shares Amount
Capital stock sold 142 $ 2,800
Capital stock issued
upon reinvestment of
dividends and
distributions - -
Capital stock redeemed (91) (2,111)
Net increase 51 $ 689
**Inception - June 30, 1998.
TRANSAMERICA PREMIER
VALUE fund Authorized Shares - 50,000,000
Period Ended
December 31, 1998**
Investor Class Shares Shares Amount
Capital stock sold 1,144,521 $ 11,326,374
Capital stock issued
upon reinvestment of
dividends and
distributions 2,282 23,819
Capital stock redeemed (286,825) (2,781,038)
Net increase 859,978 $ 8,569,155
**Inception - March 31, 1998.
TRANSAMERICA PREMIER
VALUE fund
Period Ended
December 31, 1998**
Class A Shares Shares Amount
Capital stock sold 119 $ 1,150
Capital stock issued
upon reinvestment of
dividends and
distributions - 3
Capital stock redeemed - -
Net increase 119 $ 1,153
**Inception - June 30, 1998.
TRANSAMERICA PREMIER
VALUE fund
Period Ended
December 31, 1998**
Class M Shares Shares Amount
Capital stock sold 303 $ 2,640
Capital stock issued
upon reinvestment of
dividends and
distributions - 1
Capital stock redeemed (184) (1,846)
Net increase 119 $ 795
**Inception - June 30, 1998.
TRANSAMERICA PREMIER
INDEX fund Authorized Shares - 60,000,000
Year Ended Year Ended
December 31, 1998 December 31, 1997
Investor Class Shares Shares Amount Shares Amount
Capital stock sold 650,076 $ 11,205,373 695,991 $ 10,118,205
Capital stock issued
upon reinvestment of
dividends and
distributions 118,635 2,151,698 35,103 506,892
Capital stock redeemed (366,825) (6,065,538) (86,530) (1,248,940)
Net increase 401,886 $ 7,291,533 644,564 $ 9,376,157
TRANSAMERICA PREMIER
INDEX fund
Period Ended
December 31, 1998**
Class A Shares Shares Amount
Capital stock sold 106 $ 1,828
Capital stock issued
upon reinvestment of
dividends and
distributions 2 34
Capital stock redeemed (37) (684)
Net increase 71 $ 1,178
**Inception - June 30, 1998.
TRANSAMERICA PREMIER
INDEX fund
Period Ended
December 31, 1998**
Class M Shares Shares Amount
Capital stock sold 81 $ 1,410
Capital stock issued
upon reinvestment of
dividends and
distributions 1 33
Capital stock redeemed (15) (277)
Net increase 67 $ 1,166
**Inception - June 30, 1998.
TRANSAMERICA PREMIER
BALANCED fund Authorized Shares - 60,000,000
Year Ended Year Ended
December 31, 1998 December 31, 1997
Investor Class Shares Shares Amount Shares Amount
Capital stock sold 1,996,396 $ 35,766,272 455,997 $ 6,756,401
Capital stock issued
upon reinvestment of
dividends and
distributions 126,519 2,408,985 12,231 174,166
Capital stock redeemed (629,185) (11,116,532) (129,262) (1,870,703)
Net increase 1,493,730 $ 27,058,725 338,966 $ 5,059,864
TRANSAMERICA PREMIER
BALANCED fund
Period Ended
December 31, 1998**
Class A Shares Shares Amount
Capital stock sold 105 $ 1,915
Capital stock issued
upon reinvestment of
dividends and
distributions 3 48
Capital stock redeemed (41) (798)
Net increase 67 $ 1,165
**Inception - June 30, 1998.
TRANSAMERICA PREMIER
BALANCED fund
Period Ended
December 31, 1998**
Class M Shares Shares Amount
Capital stock sold 77 $ 1,384
Capital stock issued
upon reinvestment of
dividends and
distributions 2 47
Capital stock redeemed (13) (246)
Net increase 66 $ 1,185
**Inception - June 30, 1998.
TRANSAMERICA PREMIER
HIGH YIELD bond fund Authorized Shares - 50,000,000
Period Ended
December 31, 1998**
Investor Class Shares Shares Amount
Capital stock sold 209,068 $ 2,123,135
Capital stock issued
upon reinvestment of
dividends and
distributions 3,661 35,236
Capital stock redeemed (67,232) (862,188)
Net increase 145,497 $ 1,296,183
**Inception - June 30, 1998.
TRANSAMERICA PREMIER
HIGH YIELD bond fund
Period Ended
December 31, 1998**
Institutional Class Shares Shares Amount
Capital stock sold 7,104,572 $ 71,144,583
Capital stock issued
upon reinvestment of
dividends and
distributions 325,487 3,133,597
Capital stock redeemed - -
Net increase 7,430,059 $ 74,278,180
**Inception - June 30, 1998.
TRANSAMERICA PREMIER
BOND fund Authorized Shares - 60,000,000
Year Ended Year Ended
December 31, 1998 December 31, 1997
Investor Class Shares Shares Amount Shares Amount
Capital stock sold 376,335 $ 3,888,749 132,704 $ 1,318,618
Capital stock issued
upon reinvestment of
dividends and
distributions 107,537 1,108,252 83,092 820,341
Capital stock redeemed (214,402) (2,212,826) (92,679) (925,179)
Net increase 269,470 $ 2,784,175 123,117 $ 1,213,780
TRANSAMERICA PREMIER
BOND fund
Period Ended
December 31, 1998**
Class A Shares Shares Amount
Capital stock sold 129 $ 1,330
Capital stock issued
upon reinvestment of
dividends and
distributions 4 44
Capital stock redeemed (13) (140)
Net increase 120 $ 1,234
**Inception - June 30, 1998.
TRANSAMERICA PREMIER
BOND fund
Period Ended
December 31, 1998**
Class M Shares Shares Amount
Capital stock sold 139 $ 1,436
Capital stock issued
upon reinvestment of
dividends and
distributions 4 44
Capital stock redeemed (28) (293)
Net increase 115 $ 1,187
**Inception - June 30, 1998.
TRANSAMERICA PREMIER
CASH RESERVE fund Authorized Shares - 510,000,000
Year Ended Year Ended
December 31, 1998 December 31, 1997
Investor Class Shares Shares Amount Shares Amount
Capital stock sold 123,020,893 $ 123,020,893 43,510,804 $ 43,510,804
Capital stock issued
upon reinvestment of
dividends and
distributions 3,475,945 3,475,945 2,249,117 2,249,117
Capital stock redeemed (101,476,437) (101,476,437) (26,554,372) (26,554,372)
Net increase 25,020,401 $ 25,020,401 19,205,549 $ 19,205,549
</TABLE>
TRANSAMERICA PREMIER
CASH RESERVE fund
Period Ended
December 31, 1998**
Class A Shares Shares Amount
Capital stock sold 1,315 $ 1,315
Capital stock issued
upon reinvestment of
dividends and
distributions 27 27
Capital stock redeemed (188) (188)
Net increase 1,154 $ 1,154
**Inception - June 30, 1998.
TRANSAMERICA PREMIER
CASH RESERVE fund
Period Ended
December 31, 1998**
Class M Shares Shares Amount
Capital stock sold 1,210 $ 1,210
Capital stock issued
upon reinvestment of
dividends and
distributions 26 26
Capital stock redeemed (60) (60)
Net increase 1,176 $ 1,176
**Inception - June 30, 1998. Transamerica Premier funds 1998 annual report Page
40 Page 41 Transamerica Premier Funds 1998 Annual Reportnotes to financial
statements (continued) December 31, 1998 Transamerica Premier funds 1998 annual
report Page 42 Page 43 Transamerica Premier Funds 1998 Annual Reportnotes to
financial statements (continued) December 31, 1998 Transamerica Premier funds
1998 annual report Page 44 Page 45 Transamerica Premier Funds 1998 Annual
Reportnotes to financial statements (concluded) December 31, 1998 Transamerica
Premier funds 1998 annual report Page 46 To the Shareholders and Board of
Directors of Transamerica Investors, Inc. We have audited the accompanying
statements of assets and liabilities, including the schedules of investments, of
Transamerica Investors, Inc. (comprising respectively, the Transamerica Premier
Aggressive Growth Fund, Transamerica Premier Small Company Fund, Transamerica
Premier Equity Fund, Transamerica Premier Value Fund, Transamerica Premier Index
Fund, Transamerica Premier Balanced Fund, Transamerica Premier High Yield Bond
Fund, Transamerica Premier Bond Fund, and Transamerica Premier Cash Reserve
Fund) (the "Funds") as of December 31, 1998, and the related statements of
operations for the fiscal year then ended, changes in net assets for each of the
two fiscal years in the period then ended, and financial highlights for each of
the four fiscal years in the period then ended. These financial statements and
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of December 31, 1998, by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective funds constituting Transamerica Investors, Inc., as of
December 31, 1998, and the results of their operations for the fiscal year then
ended, the changes in their net assets for each of the two fiscal years in the
period then ended and their financial highlights for each of the four fiscal
years in the period then ended, in conformity with generally accepted accounting
principles.
Los Angeles, California
February 10, 1999
Page 47 Transamerica Premier Funds
1998 Annual ReportTransamerica Premier Funds
Board of Directors and Officers
Transamerica Premier
Funds Directors
Nooruddin S. Veerjee
Chairman of the Board
Sidney E. Harris
Charles C. Reed
Gary U. Rolle'
Carl R. Terzian
Transamerica Premier
Funds Officers
Nooruddin S. Veerjee
Chief Executive Officer
Nicki A. Bair
President
Sandy C. Brown
Senior Vice President
E. Joy Heckendorf
Senior Vice President
Susan R. Hughes
Treasurer
Reid A. Evers
Secretary
H. Michael Kim
Vice President
Donald P. Radisich
Vice President
Christopher W. Shaw
Assistant Vice President
Investment Adviser
Transamerica Investment Services, Inc.
1150 South Olive Street
Los Angeles, California 90015
Distributor
Transamerica Securities Sales Corporation
1150 South Olive Street
Los Angeles, California 90015
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
Transfer Agent
State Street Bank/Boston Financial Data Services
Two Heritage Drive
North Quincy, Massachusetts 02171
Transamerica Premier funds 1998 annual report
Page 48 This report is for the information of the shareholders of Transamerica
Premier Funds. Its use in connection with any offering of the Funds' shares is
authorized only if accompanied or preceded by a current Transamerica Premier
Funds prospectus that contains more complete investment information, including
risks and expenses. Please read the prospectus thoroughly before you invest.
Call 1-800-892-7587 for more information.
These Funds are neither insured nor guaranteed by the U.S. government. There can
be no assurance that the Transamerica Premier Cash Reserve Fund will be able to
maintain a stable net asset value of $1.00 per share.
(C)1999 Transamerica Securities Sales Corporation, Distributor
Page 49 Transamerica Premier funds 1998
annual report
Transamerica Securities Sales Corporation, Distributor
1-800-89-ASK-US (1-800-892-7587)
http://Transamericafunds.com
e-mail: [email protected]
TPF 387-299
