UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number | 811-07527 |
|
Turner Funds |
(Exact name of registrant as specified in charter) |
|
|
|
1205 Westlakes Drive, Suite 100
Berwyn, PA | | 19312 |
(Address of principal executive offices) | | (Zip code) |
|
Michael P. Malloy
Drinker Biddle & Reath LLP
One Logan Square, Suite 2000
Philadelphia, PA 19103 |
(Name and address of agent for service) |
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Registrant’s telephone number, including area code: | 1-800-224-6312 | |
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Date of fiscal year end: | September 30, 2010 | |
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Date of reporting period: | September 30, 2010 | |
| | | | | | | | |
Item 1. Reports to Stockholders.
Annual Report
September 30, 2010
Long/short equity fund
Turner Spectrum Fund
U.S. growth equity funds
Turner Concentrated Growth Fund
Turner Core Growth Fund
Turner Emerging Growth Fund
Turner Large Cap Growth Fund
Turner Midcap Growth Fund
Turner New Enterprise Fund
Turner Small Cap Growth Fund
Quantitative equity funds
Turner Quantitative Broad Market Equity Fund
Turner Quantitative Large Cap Value Fund
Global and international equity funds
Turner Global Opportunities Fund
Turner International Core Growth Fund
Core equity fund
Turner Small Cap Equity Fund
Contents
| | 2 | | | Letter to shareholders | |
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| | 6 | | | Total returns of Turner Funds | |
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| | 9 | | | Investment review:
Turner Spectrum Fund | |
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| | 10 | | | Investment review:
Turner Concentrated Growth Fund | |
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| | 11 | | | Investment review:
Turner Core Growth Fund | |
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| | 12 | | | Investment review:
Turner Emerging Growth Fund | |
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| | 13 | | | Investment review:
Turner Large Cap Growth Fund | |
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| | 14 | | | Investment review:
Turner Midcap Growth Fund | |
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| | 15 | | | Investment review:
Turner New Enterprise Fund | |
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| | 16 | | | Investment review:
Turner Small Cap Growth Fund | |
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| | 17 | | | Investment review:
Turner Quantitative Broad Market Equity Fund | |
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| | 18 | | | Investment review:
Turner Quantitative Large Cap Value Fund | |
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| | 19 | | | Investment review:
Turner Global Opportunities Fund | |
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| | 20 | | | Investment review:
Turner International Core Growth Fund | |
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| | 21 | | | Investment review:
Turner Small Cap Equity Fund | |
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| | 22 | | | Schedules of investments | |
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| | 54 | | | Financial statements | |
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| | 74 | | | Notes to financial statements | |
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| | 83 | | | Report of independent registered public accounting firm | |
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| | 84 | | | Notice to shareholders | |
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| | 85 | | | Trustees and officers of the Trust | |
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| | 86 | | | Disclosure of fund expenses | |
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Turner Funds
As of September 30, 2010, the Turner Funds offered a series of 13 mutual funds to individual and institutional investors. The minimum initial investment for Institutional Class Shares in a Turner Fund is $250,000 (except for $25,000 for the Turner Quantitative Large Cap Value Fund and $100,000 for the Turner Spectrum Fund) for regular accounts and $100,000 (with the exception of $10,000 for the Turner Quantitative Large Cap Value Fund) for individual retirement accounts. The minimum initial investment for Investor Class Shares, Retirement Class Shares, and Class C Shares of the Turner Spectrum Fund is $2,500 for regular accounts and $2,000 for individual retirement accounts.
Turner Investment Partners, Inc., based in Berwyn, Pennsylvania, serves as the investment adviser for the Funds (other than the Turner Small Cap Equity Fund). Turner Investment Management LLC, a subsidiary of Turner Investment Partners, Inc., serves as the investment adviser for the Turner Small Cap Equity Fund. Turner Investment Partners, Inc., founded in 1990, manages more than $17 billion in stock investments as of September 30, 2010.
Shareholder services
Turner Funds shareholders receive annual and semiannual reports, quarterly account statements, and a quarterly newsletter. Shareholders who have questions about their accounts may call a toll-free telephone number, 1.800.224.6312, may visit our Web site, www.turnerinvestments.com, or may write to Turner Funds, P.O. Box 219805, Kansas City, Missouri 64121-9805.
TURNER FUNDS 2010 ANNUAL REPORT 1
LETTER TO SHAREHOLDERS
To our shareholders
On balance, the stock market in the 21st century has been as underwhelming as our hometown Philadelphia Phillies in the recent National League baseball championship playoffs. In the dreary decade from 2000 to 2009 that we refer to as the Terrible 2000s, the S&P 500 Index uncharacteristically lost 0.95% annualized — an underperformance even worse than the 1930s of the Great Depression. As a result of the Terrible 2000s, the long-term average for stocks since 1926 has eroded to 9.66%, according to Ibbotson Associates. Previously the long-term average had been above 10%.
But as has often been observed, the stock market is what it is. And what the stock market is now, in our judgment, is rebounding from the Terrible 2000s. The bull market that began in March 2009 has started to push stock returns higher, to levels approximating the long-term average. Indeed, in the 12-month period ended September 30, 2010, that's the focus of this report, the S&P 500 generated a 10.16% gain.
During most of the period, macroeconomic events like central-bank actions trumped fundamentals like earnings. The market was especially roiled in the second half of the period by macroeconomic developments such as these: the sovereign-debt crisis in Europe, escalating government-budget deficits in the developed nations, China's slowing economy, the breathless reactions to the Federal Reserve's pronouncements on interest rates, and the possibility of a double-digit recession in the U.S., as reflected in persistently high unemployment, a weak housing market, lackluster consumer spending, and the bad loans still weighing heavily on banks' balance sheets.
Correlations uncommonly high
For us as investment managers, the most significant thing about a market propelled by macroeconomic forces was that stocks — whether of low or high quality, whether with weak or strong earnings — tended to move in lock step. For instance, in mid-August, the correlation of stocks in the S&P 500 Index reached 74%, compared with a correlation of just 27% between 2000 and 2006, according to Barclays Capital. Such unusually high correlations made it difficult for most investment managers to distinguish themselves by picking winning stocks. Morningstar, the mutual-fund research firm, reported in September that only about 24% of large-cap growth funds had beaten the Russell 1000 Growth Index over the past 12 months.
Our own 13 stock funds — be they large-cap, mid-cap, or small-cap funds — fared only slightly better. In the most recent 12-month period, four funds, representing about 31% of the Turner Funds lineup, beat one or more of their benchmarks. The four funds that managed to outperform were the Turner Global Opportunities Fund, the Turner International Core Growth Fund, the Turner New Enterprise Fund, and the Turner Small Cap Growth Fund. They were among the eight funds that delivered double-digit total returns.
| Total returns | | | | | |
| 12-month period ended September 30, 2010 | | | | | |
| Long/short equity fund | | | | | |
Turner Spectrum Fund,
Institutional Class (TSPEX) | | | 0.77 | % | |
| S&P 500 Index | | | 10.16 | | |
| Barclays Capital U.S. Aggregate Bond Index | | | 8.16 | | |
| Lipper Long/Short Equity Funds Classification | | | 3.55 | | |
| U.S. growth equity funds | | | | | |
| Turner Concentrated Growth Fund (TTOPX) | | | 7.94 | | |
| Russell 1000 Growth Index | | | 12.65 | | |
Turner Core Growth Fund,
Institutional Class (TTMEX) | | | 6.76 | | |
| Russell 1000 Growth Index | | | 12.65 | | |
Turner Emerging Growth Fund,
Investor Class (TMCGX) | | | 12.22 | | |
| Russell 2000 Growth Index | | | 14.79 | | |
Turner Large Cap Growth Fund,
Institutional Class (TSGEX) | | | 10.00 | | |
| Russell Top 200 Growth Index | | | 10.57 | | |
| Russell 1000 Growth Index | | | 12.65 | | |
Turner Midcap Growth Fund,
Investor Class (TMGFX) | | | 14.21 | | |
| Russell Midcap Growth Index | | | 18.27 | | |
| Turner New Enterprise Fund (TBTBX) | | | 18.25 | | |
| NASDAQ Composite Index | | | 12.77 | | |
| Turner Small Cap Growth Fund (TSCEX) | | | 15.10 | | |
| Russell 2000 Growth Index | | | 14.79 | | |
| Quantitative equity funds | | | | | |
Turner Quantitative Broad Market
Equity Fund, Institutional Class (TBMEX) | | | 8.30 | | |
| Russell 3000 Index | | | 10.96 | | |
| S&P 500 Index | | | 10.16 | | |
Turner Quantitative Large Cap
Value Fund, Institutional Class (TLVFX) | | | 7.24 | | |
| Russell 1000 Value Index | | | 8.90 | | |
| Global and international equity funds | | | | | |
Turner Global Opportunities Fund,
Institutional Class (TGLBX) | | | 15.20 | † | |
| MSCI World Growth Index | | | 9.53 | † | |
| MSCI World Index | | | 8.14 | † | |
Turner International Core Growth
Fund, Institutional Class (TICGX) | | | 15.88 | | |
| MSCI World Growth ex-U.S. Index | | | 8.69 | | |
| Core equity fund | | | | | |
Turner Small Cap Equity Fund,
Investor Class (TSEIX) | | | 12.53 | | |
| Russell 2000 Index | | | 13.35 | | |
† Returns are from the fund's inception date, May 7, 2010.
2 TURNER FUNDS 2010 ANNUAL REPORT
September 30, 2010
(Please call 1.800.224.6312 or visit our Web site at www.turnerinvestments.com for the most recent month-end performance. For more details on the performance of each fund during the 12-month period, see the Investment review beginning on page 9.)
A tough market to beat
Clearly, it was a tough stock market to beat. It was a market that largely neutralized our growth, core, quantitative, and alternative investment processes, which are geared to fundamentals such as earnings expectations, market-share positions, investment metrics that have proven predictive of outperformance, and balance-sheet strength. We felt a keen sense of frustration about investing in a market in which stock selection was generally of little consequence. We continued to follow the same investment processes as before. But, alas, sometimes even the best investment processes don't generate extra return across the board, and this was one of these times.
We are steadfast in our belief that if we continue to follow our proven investment processes, they will continue to yield good long-term results for our funds. Nine of our 13 funds have outperformed since their inception. We consider that a highly respectable long-term record, but that's not to say we can't do better. As perennial students of the market, we are always learning and open to promising new ideas from any source. And as investment professionals, we are self-critical and intent on improving continuously.
For instance, in our best open and self-critical manner, we recently added four new analysts to our Growth Investing Team. With their combined 65 years of investment experience, they should provide extra depth to our research of sectors, industries, and companies. Altogether, our Growth Investing Team has five teams of 25 portfolio managers/security analysts who cover industries in the five broad market sectors globally. Such a sector orientation is a distinguishing aspect of how we manage our growth funds. By enabling our analysts to conduct vigorous fundamental research in their specific industries, we think their focus, accountability for investment results, and ability to identify the best growth stocks should all improve.
Providing more flexibility
Another example: we modified our sector-neutral approach that we use in managing certain of our growth funds, refining it into what we call a sector-aware approach. We believe this will give us a bit more flexibility in portfolio management and give our growth funds a bit more potential to generate extra return.
With sector neutrality, we were compelled to keep the sector weightings of our holdings equal to the sector weightings of their target indexes. For instance, if the Russell Midcap Growth Index had a 27% weighting in the technology sector, then our Turner Midcap Growth Fund would follow suit and hold a 27% weighting in the technology sector. In contrast, our new sector-aware approach still keeps us invested in all sectors, but it enables us to overweight or underweight sectors typically by up to five percentage points, when our analysis indicates it's warranted by the fundamentals. Also, it permits us to replace a poor-performing stock in one sector with a stock that we consider to have better return potential in another sector, which we wouldn't do before.
We think these are good illustrations of how we are continually fine-tuning our investment processes in the interest of producing better results for you, our shareholders — and for us, I hasten to add, since our portfolio managers and other employees are shareholders in our funds as well.
Stocks out of favor
We believe it's rather unfortunate that more than a few mutual-fund investors outside the Turner Funds find themselves unable to reap any results in stocks at this juncture — for the simple reason that their portfolios are completely divested of stocks. Bonds, not stocks, are the investment du jour by far. According to the Investment Company Institute, since January 2009 bond funds have attracted more than $500 billion in new investment, while stock funds have suffered more than $70 billion in withdrawals. Investors' aversion to stocks is perhaps attributable to this facet of human nature: the pain of investment losses tends to be more acute than the pleasure of investment gains, and many pain-stricken investors are still wincing from the losses inflicted by stocks in the Ter rible 2000s. We believe such an aversion could prove costly because, in our estimation, the 2010s should be a decade of generally rising stock prices.
We think better days are ahead for stocks partly because the Terrible 2000s were so terrible, with stocks underperforming the long-term averages by more than 10 percentage points annualized. Like Lady Gaga's meat dress, a losing decade for stocks isn't at all commonplace. In light of a fundamental principle of economics called reversion to the mean — the tendency for investment returns to adjust, or revert, to the long-term average, given enough time — we think the probabilities are that stocks, in light of their highly unusual negative showing in the 2000s, should revert and perform at least reasonably well in the 2010s. According to Morningstar, of the 776 rolling 10-year monthly returns since 1926, only 29 of those returns were negative — less than 4% of the tota l. But subsequent 10-year returns after those negative 10-year stretches were soundly positive, averaging 9.8%.
In the near term, we think the bull market should continue to advance, especially if investors focus more on
TURNER FUNDS 2010 ANNUAL REPORT 3
LETTER TO SHAREHOLDERS (continued)
favorable earnings fundamentals and less on macroeconomic issues. For example, more than two-thirds of the S&P 500 companies' earnings have beaten Wall Street analysts' expectations for six consecutive quarters — a trend that we expect to remain intact into 2011. To cite investing guru Benjamin Graham's famous metaphor, the market is a weighing machine in the long run . . . and earnings are what ultimately register on the machine.
Also, we think stocks offer compelling valuations. Recently the earnings yield (the inverted price/earnings ratio) of the S&P 500 Index stocks exceeded the average yield of corporate bonds for the first time since the 1970s. Indeed, the earnings yield looks even more appealing in relation to the yield of the entire bond market. As of September 30, the S&P 500's earnings yield was 5.76%, more than double the 2.56% yield of the Barclays Capital U.S. Aggregate Bond Index, a common proxy for the bond market.
Emerging markets promising
We are also optimistic about the near-term return potential of the emerging stock markets, which could in particular help the performance of the Turner International Core Growth Fund and our newest fund, the Turner Global Opportunities Fund. One reason why we think the emerging stock markets represent a compelling investment opportunity is this projection by Bank of America Merrill Lynch: the governments of emerging nations may pour $6.3 trillion into expanding their nations' often-rudimentary infrastructure over the next three years. Also, we think the economies of emerging countries like China, India, Brazil, and Malaysia have the best prospects for years to come — a revved-up engine of economic growth that should help drive earnings and emerging stock markets higher.
In anticipation of generally favorable stock-market prospects worldwide, we have kept our funds positioned basically the same as when I last wrote to you in our Semiannual Report six months ago:
• Our nine U.S. and international/global growth funds hold three types of shares: classic growth stocks in industries such as biotechnology and wireless communications that we think have strong fundamentals, stocks of companies gaining market share in their businesses, and growth-cyclical stocks in industries such as chemicals that have tended to do well historically as the economic cycle progresses.
• Our core fund, the Turner Small Cap Equity Fund, follows an investment approach emphasizing companies with business momentum, cash-rich balance sheets, or undervalued assets.
• Our two quantitative funds, the Turner Quantitative Broad Market Equity Fund and the Turner Quantitative Large Cap Value Fund, are broadly diversified in stocks in each market sector that our proprietary quantitative model has identified as having the best statistical chance of outperforming the market.
• The Turner Spectrum Fund, composed of seven long/short strategies managed by us, is invested in long positions that we think have good return potential and in short positions that we think have below-average return potential.
In closing, we believe patient, long-term investing in stocks is likely to be rewarded more generously in this decade than in the Terrible 2000s. And we believe our funds are primed to share fully in those rewards, to our mutual benefit as shareholders.
Bob Turner
Chairman and Chief Investment Officer
Turner Investments
Past performance is no guarantee of future results. The views expressed are those of Turner Investments as of September 30, 2010, and are not intended as a forecast or investment recommendations. The indexes mentioned are not available for investment.
Bob Turner
4 TURNER FUNDS 2010 ANNUAL REPORT
September 30, 2010
Lipper Inc. peer group performance rankings of mutual funds with at least three years of history
Periods ending September 30, 2010
| | | One
year | | Two
years | | Three
years | | Four
years | | Five
years | | Seven
years | | Ten
years | |
| International Multi-Cap Growth Funds | |
Turner International Core Growth Fund
Institutional Class Shares | |
| Ranking versus Lipper peers | | | 32/158 | | | | 57/132 | | | | 38/108 | | | | — | | | | — | | | | — | | | | — | | |
| Percentile Ranking | | | 20 | | | | 43 | | | | 35 | | | | — | | | | — | | | | — | | | | — | | |
| Large-Cap Growth Funds | |
Turner Core Growth Fund,
Institutional Class Shares | |
| Ranking versus Lipper peers | | | 735/852 | | | | 584/792 | | | | 653/732 | | | | 567/679 | | | | 464/614 | | | | 176/513 | | | | — | | |
| Percentile ranking | | | 86 | | | | 74 | | | | 89 | | | | 84 | | | | 76 | | | | 34 | | | | — | | |
| Investor Class Shares | |
| Ranking versus Lipper peers | | | 743/852 | | | | 597/792 | | | | 660/732 | | | | 590/679 | | | | 503/614 | | | | — | | | | — | | |
| Percentile Ranking | | | 87 | | | | 75 | | | | 90 | | | | 87 | | | | 82 | | | | — | | | | — | | |
Turner Large Cap Growth Fund,
Institutional Class Shares | |
| Ranking versus Lipper peers | | | 430/852 | | | | 386/792 | | | | 691/732 | | | | 635/679 | | | | 574/614 | | | | 497/513 | | | | 323/344 | | |
| Percentile ranking | | | 50 | | | | 49 | | | | 94 | | | | 94 | | | | 93 | | | | 97 | | | | 94 | | |
| Investor Class Shares | |
| Ranking versus Lipper peers | | | 475/852 | | | | 426/792 | | | | 698/732 | | | | — | | | | — | | | | — | | | | — | | |
| Percentile ranking | | | 56 | | | | 54 | | | | 95 | | | | — | | | | — | | | | — | | | | — | | |
| Multi-Cap Core Funds | |
Turner Quantitative Large
Cap Value Fund
Institutional Class Shares | |
| Ranking versus Lipper peers | | | 691/846 | | | | 764/790 | | | | 632/736 | | | | 589/665 | | | | — | | | | — | | | | — | | |
| Percentile ranking | | | 82 | | | | 97 | | | | 86 | | | | 89 | | | | — | | | | — | | | | — | | |
| Multi-Cap Growth Funds | |
| Turner Concentrated Growth Fund | |
| Ranking versus Lipper peers | | | 364/437 | | | | 289/412 | | | | 368/375 | | | | 292/330 | | | | 256/298 | | | | 259/270 | | | | 201/203 | | |
| Percentile ranking | | | 83 | | | | 70 | | | | 98 | | | | 88 | | | | 86 | | | | 96 | | | | 99 | | |
Turner Midcap Growth Fund,
Investor Class Shares | |
| Ranking versus Lipper peers | | | 170/437 | | | | 162/412 | | | | 199/375 | | | | 124/330 | | | | 125/298 | | | | 95/270 | | | | 146/203 | | |
| Percentile ranking | | | 39 | | | | 39 | | | | 53 | | | | 38 | | | | 42 | | | | 35 | | | | 72 | | |
| Retirement Class Shares | |
| Ranking versus Lipper peers | | | 182/437 | | | | 167/412 | | | | 210/375 | | | | 144/330 | | | | 142/298 | | | | 122/270 | | | | — | | |
| Percentile ranking | | | 42 | | | | 41 | | | | 56 | | | | 44 | | | | 48 | | | | 45 | | | | — | | |
| Science and Technology Funds | |
| Turner New Enterprise Fund | |
| Ranking versus Lipper peers | | | 43/141 | | | | 62/136 | | | | 107/135 | | | | 66/128 | | | | 62/120 | | | | 39/109 | | | | 27/81 | | |
| Percentile Ranking | | | 30 | | | | 46 | | | | 79 | | | | 52 | | | | 52 | | | | 36 | | | | 33 | | |
| Small-Cap Growth Funds | |
Turner Emerging Growth Fund
Investor Class Shares | |
| Ranking versus Lipper peers | | | 369/530 | | | | 472/495 | | | | 324/467 | | | | 257/426 | | | | 232/396 | | | | 50/331 | | | | 13/223 | | |
| Percentile ranking | | | 70 | | | | 95 | | | | 69 | | | | 60 | | | | 59 | | | | 15 | | | | 6 | | |
| Turner Small Cap Growth Fund | |
| Ranking versus Lipper peers | | | 242/530 | | | | 246/495 | | | | 165/467 | | | | 115/426 | | | | 99/396 | | | | 110/331 | | | | 152/223 | | |
| Percentile ranking | | | 46 | | | | 50 | | | | 35 | | | | 27 | | | | 25 | | | | 33 | | | | 68 | | |
| Small-Cap Core Funds | |
Turner Small Cap Equity Fund
Investor Class Shares | |
| Ranking versus Lipper peers | | | 466/755 | | | | 624/717 | | | | 583/661 | | | | 528/594 | | | | 491/544 | | | | 394/434 | | | | — | | |
| Percentile ranking | | | 62 | | | | 87 | | | | 88 | | | | 89 | | | | 90 | | | | 91 | | | | — | | |
Source: Lipper Inc.
Total return is ranking criteria. Past performance is no guarantee of future results.
TURNER FUNDS 2010 ANNUAL REPORT 5
PERFORMANCE
Total returns of the Turner Funds
Through September 30, 2010
Current performance may be lower or higher than the performance data quoted. Please call 1.800.224.6312 or visit our website at www.turnerinvestments.com for the most recent month-end performance information.
The performance data quoted represents past performance and the principal value and investment return will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Past performance is no guarantee of future results. Returns shown, unless otherwise indicated, are total returns, with dividends and income reinvested. Returns spanning more than one year are annualized. Fee waivers are in effect; if they had not been in effect, performance would have been lower. The indices mentioned are unmanaged statistical composites of stock-market performance. Investing in an index is not possible.
The holdings and sector weightings of the Funds are subject to change. Forward-earnings projections are not predictors of stock price or investment performance, and do not represent past performance. There is no guarantee that the forward-earnings projections will accurately predict the actual earnings experience of any of the companies involved, and there is no guarantee that owning securities of companies with relatively high price-to-earnings ratios will cause the portfolio to outperform its benchmark or index.
The Turner Funds are distributed by Foreside Fund Services, LLC, Portland, Maine. The investor should consider the investment objectives, risks, charges, and expenses carefully before investing. This and other information can be found in the prospectus. A free prospectus, which contains detailed information, including fees and expenses, and the risks associated with investing in these Funds, can be obtained by calling 1.800.224.6312. Read the prospectus carefully before investing.
| Fund name/index | | Six
months | | Year
to
date | | One
year | | Three
years | | Five
years | | Ten
years | | (Annualized)
Since
inception | | Total
net assets
($mill) | |
Turner Spectrum Fund —
Institutional Class Shares | | | -2.17 | % | | | -0.73 | % | | | 0.77 | % | | | n/a | | | | n/a | | | | n/a | | | | 6.31 | % | | $ | 179.53 | | |
| Investor Class Shares | | | -2.27 | | | | -0.92 | | | | 0.49 | | | | n/a | | | | n/a | | | | n/a | | | | 6.03 | | | | 52.36 | | |
| Class C Shares(1) | | | -2.63 | | | | -1.38 | | | | -0.07 | | | | n/a | | | | n/a | | | | n/a | | | | 6.67 | | | | 7.17 | | |
| S&P 500 Index | | | -1.42 | | | | 3.89 | | | | 10.16 | | | | n/a | | | | n/a | | | | n/a | | | | 20.30 | | | | | | |
Barclays Capital U.S. Aggregate
Bond Index | | | 6.05 | | | | 7.94 | | | | 8.16 | | | | n/a | | | | n/a | | | | n/a | | | | 9.55 | | | | | | |
Lipper Long/Short Equity
Funds Classification | | | -1.73 | | | | 0.29 | | | | 3.55 | | | | n/a | | | | n/a | | | | n/a | | | | 12.01 | | | | | | |
| Inception date: 5/7/09 | |
Turner Concentrated
Growth Fund | | | 0.45 | | | | 2.31 | | | | 7.94 | | | | -13.07 | % | | | -1.30 | % | | | -10.18 | % | | | -0.46 | | | | 42.92 | | |
| Russell 1000 Growth Index | | | -0.27 | | | | 4.36 | | | | 12.65 | | | | -4.36 | | | | 2.06 | | | | -3.44 | | | | -1.56 | | | | | | |
| Inception date: 6/30/99 | |
Turner Core Growth Fund —
Institutional Class Shares | | | -3.39 | | | | 0.38 | | | | 6.76 | | | | -9.43 | | | | -0.30 | | | | n/a | | | | 0.77 | | | | 377.65 | | |
| Investor Class Shares(2) | | | -3.50 | | | | 0.10 | | | | 6.51 | | | | -9.67 | | | | -0.59 | | | | n/a | | | | 0.06 | | | | 163.75 | | |
| Russell 1000 Growth Index | | | -0.27 | | | | 4.36 | | | | 12.65 | | | | -4.36 | | | | 2.06 | | | | n/a | | | | 0.10 | | | | | | |
| Inception date: 2/28/01 | |
Turner Emerging Growth Fund(8) —
Institutional Class Shares(3) | | | -1.41 | | | | 8.00 | | | | 12.52 | | | | n/a | | | | n/a | | | | n/a | | | | 27.20 | | | | 276.45 | | |
| Investor Class Shares | | | -1.56 | | | | 7.79 | | | | 12.22 | | | | -7.36 | | | | 0.86 | | | | 5.43 | | | | 18.19 | | | | 176.82 | | |
| Russell 2000 Growth Index | | | 2.43 | | | | 10.23 | | | | 14.79 | | | | -3.75 | | | | 2.35 | | | | -0.13 | | | | 2.07 | | | | | | |
| Inception date: 2/27/98 | |
Turner Large Cap Growth Fund —
Institutional Class Shares | | | -1.22 | | | | 3.86 | | | | 10.00 | | | | -10.37 | | | | -1.93 | | | | -6.68 | | | | -6.66 | | | | 118.16 | | |
| Investor Class Shares(4) | | | -1.43 | | | | 3.66 | | | | 9.58 | | | | -10.66 | | | | n/a | | | | n/a | | | | -5.41 | | | | 1.36 | | |
| Russell Top 200 Growth Index | | | -1.49 | | | | 2.00 | | | | 10.57 | | | | -4.49 | | | | 1.81 | | | | -4.20 | | | | -4.51 | | | | | | |
| Russell 1000 Growth Index | | | -0.27 | | | | 4.36 | | | | 12.65 | | | | -4.36 | | | | 2.06 | | | | -3.44 | | | | -3.64 | | | | | | |
| Inception date: 6/14/00 | |
6 TURNER FUNDS 2010 ANNUAL REPORT
PERFORMANCE (continued)
| Fund name/index | | Six
months | | Year
to
date | | One
year | | Three
years | | Five
years | | Ten
years | | (Annualized)
Since
inception | | Total
net assets
($mill) | |
Turner Midcap Growth Fund(8) —
Institutional Class Shares(5) | | | -0.10 | % | | | 7.44 | % | | | 14.47 | % | | | n/a | | | | n/a | | | | n/a | | | | -6.26 | % | | $ | 164.99 | | |
| Investor Class Shares | | | -0.20 | | | | 7.25 | | | | 14.21 | | | | -5.93 | % | | | 2.41 | % | | | -3.50 | % | | | 9.81 | | | | 751.12 | | |
| Retirement Class Shares(6) | | | -0.31 | | | | 7.05 | | | | 13.93 | | | | -6.16 | | | | 2.09 | | | | n/a | | | | 5.78 | | | | 4.58 | | |
| Russell Midcap Growth Index | | | 2.95 | | | | 10.85 | | | | 18.27 | | | | -3.90 | | | | 2.86 | | | | -0.88 | | | | 6.38 | | | | | | |
| Inception date: 10/1/96 | |
| Turner New Enterprise Fund(8) | | | 2.48 | | | | 11.41 | | | | 18.25 | | | | -6.90 | | | | 3.73 | | | | -5.60 | | | | -3.37 | | | | 23.23 | | |
| NASDAQ Composite Index | | | -0.69 | | | | 5.17 | | | | 12.77 | | | | -3.27 | | | | 2.92 | | | | -3.52 | | | | -4.15 | | | | | | |
| Inception date: 6/30/00 | |
| Turner Small Cap Growth Fund(8) | | | 1.58 | | | | 10.19 | | | | 15.10 | | | | -4.23 | | | | 3.26 | | | | -0.73 | | | | 10.78 | | | | 274.92 | | |
| Russell 2000 Growth Index | | | 2.43 | | | | 10.23 | | | | 14.79 | | | | -3.75 | | | | 2.35 | | | | -0.13 | | | | 4.91 | | | | | | |
| Inception date: 2/7/94 | |
Turner Quantitative Broad
Market Equity Fund — | |
| Institutional Class Shares | | | -4.09 | | | | 2.18 | | | | 8.30 | | | | n/a | | | | n/a | | | | n/a | | | | -4.19 | | | | 10.95 | | |
| Investor Class Shares | | | -4.31 | | | | 2.07 | | | | 7.98 | | | | n/a | | | | n/a | | | | n/a | | | | -4.43 | | | | 0.02 | | |
| Russell 3000 Index | | | -1.10 | | | | 4.78 | | | | 10.96 | | | | n/a | | | | n/a | | | | n/a | | | | -2.35 | | | | | | |
| S&P 500 Index | | | -1.42 | | | | 3.89 | | | | 10.16 | | | | n/a | | | | n/a | | | | n/a | | | | -2.72 | | | | | | |
| Inception date: 6/30/08 | |
Turner Quantitative
Large Cap Value Fund — | |
| Institutional Class Shares | | | -3.20 | | | | 3.01 | | | | 7.24 | | | | -9.48 | | | | n/a | | | | n/a | | | | -0.24 | | | | 0.83 | | |
| Investor Class Shares(7) | | | -3.33 | | | | 2.88 | | | | 7.07 | | | | n/a | | | | n/a | | | | n/a | | | | 4.53 | | | | — | | |
| Russell 1000 Value Index | | | -2.14 | | | | 4.49 | | | | 8.90 | | | | -9.39 | | | | n/a | | | | n/a | | | | 0.30 | | | | | | |
| Inception date: 10/10/05 | |
Turner Global Opportunities Fund —
Institutional Class Shares | | | n/a | | | | n/a | | | | n/a | | | | n/a | | | | n/a | | | | n/a | | | | 15.20 | * | | | 1.15 | | |
| Investor Class Shares | | | n/a | | | | n/a | | | | n/a | | | | n/a | | | | n/a | | | | n/a | | | | 15.00 | * | | | — | | |
| MSCI World Growth Index | | | n/a | | | | n/a | | | | n/a | | | | n/a | | | | n/a | | | | n/a | | | | 9.53 | * | | | | | |
| MSCI World Index | | | n/a | | | | n/a | | | | n/a | | | | n/a | | | | n/a | | | | n/a | | | | 8.14 | * | | | | | |
| Inception date: 5/7/10 | |
Turner International Core
Growth Fund —
Institutional Class Shares | | | 4.44 | | | | 7.91 | | | | 15.88 | | | | -6.98 | | | | n/a | | | | n/a | | | | -0.47 | | | | 5.02 | | |
| Investor Class Shares(7) | | | 4.33 | | | | 7.68 | | | | 15.61 | | | | n/a | | | | n/a | | | | n/a | | | | 25.63 | | | | 0.11 | | |
| MSCI World Growth ex-U.S. Index | | | 2.25 | | | | 4.21 | | | | 8.69 | | | | -8.02 | | | | n/a | | | | n/a | | | | -2.51 | | | | | | |
| Inception date: 1/31/07 | |
Turner Small Cap Equity Fund(8) —
Institutional Class Shares(3) | | | 1.84 | | | | 5.52 | | | | 12.82 | | | | n/a | | | | n/a | | | | n/a | | | | 24.14 | | | | 0.29 | | |
| Investor Class Shares | | | 1.66 | | | | 5.34 | | | | 12.53 | | | | -8.53 | | | | -2.34 | | | | n/a | | | | 5.41 | | | | 6.16 | | |
| Russell 2000 Index | | | 0.25 | | | | 9.12 | | | | 13.35 | | | | -4.29 | | | | 1.60 | | | | n/a | | | | 5.24 | | | | | | |
| Inception date: 3/4/02 | |
(1) Commenced operations on July 14, 2009.
(2) Commenced operations on August 1, 2005.
(3) Commenced operations on February 1, 2009.
(4) Commenced operations on January 31, 2007.
(5) Commenced operations on June 16, 2008.
(6) Commenced operations on September 24, 2001.
(7) Commenced operations on October 31, 2008.
(8) Investing in technology and science companies and small- and mid-capitalization companies may subject the Funds to specific inherent risks, including above-average price fluctuations.
* Returns of less than one year are cumulative, and not annualized.
Amounts designated as "—" have been rounded to $0 ($mil).
TURNER FUNDS 2010 ANNUAL REPORT 7
Expense Ratio†
| | | Gross
expense
ratio | | Net
expense
ratio | |
| Turner Spectrum Fund | |
| Institutional Class Shares | | | 2.50 | % | | | 1.95 | % | |
| Investor Class Shares | | | 2.75 | % | | | 2.20 | % | |
| Class C Shares | | | 3.50 | % | | | 2.95 | % | |
Turner Concentrated
Growth Fund | |
| Investor Class Shares | | | 1.34 | % | | | 0.82 | % | |
| Turner Core Growth Fund | |
| Institutional Class Shares | | | 0.92 | % | | | 0.69 | % | |
| Investor Class Shares | | | 1.17 | % | | | 0.94 | % | |
| Turner Emerging Growth Fund | |
| Institutional Class Shares | | | 1.35 | % | | | 1.17 | % | |
| Investor Class Shares | | | 1.58 | % | | | 1.42 | % | |
| Turner Large Cap Growth Fund | |
| Institutional Class Shares | | | 1.21 | % | | | 0.69 | % | |
| Investor Class Shares | | | 1.47 | % | | | 0.94 | % | |
| Turner Midcap Growth Fund | |
| Institutional Class Shares | | | 1.08 | % | | | 0.93 | % | |
| Investor Class Shares | | | 1.33 | % | | | 1.18 | % | |
| Retirement Class Shares | | | 1.58 | % | | | 1.43 | % | |
| Turner New Enterprise Fund | |
| Investor Class Shares | | | 1.25 | % | | | 0.64 | % | |
| | | Gross
expense
ratio | | Net
expense
ratio | |
| Turner Small Cap Growth Fund | |
| Investor Class Shares | | | 1.58 | % | | | 1.25 | % | |
Turner Quantitative Broad
Market Equity Fund | |
| Institutional Class Shares | | | 20.30 | % | | | 0.64 | % | |
| Investor Class Shares | | | 20.60 | % | | | 0.89 | % | |
Turner Quantitative Large Cap
Value Fund | |
| Institutional Class Shares | | | 14.51 | % | | | 0.69 | % | |
| Investor Class Shares | | | 15.93 | % | | | 0.94 | % | |
Turner Global
Opportunities Fund | |
| Institutional Class Shares | | | 1.96 | % | | | 1.11 | % | |
| Investor Class Shares | | | 2.21 | % | | | 1.36 | % | |
Turner International Core
Growth Fund | |
| Institutional Class Shares | | | 5.24 | % | | | 1.10 | % | |
| Investor Class Shares | | | 5.59 | % | | | 1.35 | % | |
| Turner Small Cap Equity Fund | |
| Institutional Class Shares | | | 1.60 | % | | | 1.21 | % | |
| Investor Class Shares | | | 1.90 | % | | | 1.46 | % | |
† These expense ratios are based on the most recent prospectus and may differ from those shown in the financial highlights.
8 TURNER FUNDS 2010 ANNUAL REPORT
INVESTMENT REVIEW
Turner Spectrum Fund
Fund profile
September 30, 2010
g Ticker symbol TSPEX
Institutional Class Shares
g CUSIP #900297664
Institutional Class Shares
g Top five holdings††
(1) Hospira
(2) Pfizer
(3) Citigroup
(4) IntercontinentalExchange
(5) Universal Health Services, Cl B
g % in five largest holdings 9.1%†
g Number of holdings 340††
g Price/earnings ratio 16.7
g Weighted average market capitalization $4.74 billion
g % of holdings with positive earnings surprises 66.0%
g % of holdings with negative earnings surprises 15.1%
g Net assets $180 million, Institutional Class Shares
Growth of a $100,000 investment in the
Turner Spectrum Fund, Institutional Class Shares:
May 7, 2009-September 30, 2010*,**
Average annual total returns (Periods ending September 30, 2010)
| | | One
year | | Since
Inception | |
| Turner Spectrum Fund, Institutional Class Shares | | | 0.77 | % | | | 6.31 | %** | |
| Turner Spectrum Fund, Investor Class Shares | | | 0.49 | % | | | 6.03 | %** | |
| Turner Spectrum Fund, Class C Shares | | | -0.07 | % | | | 6.67 | %*** | |
| S&P 500 Index | | | 10.16 | % | | | 20.30 | %** | |
| Barclays Capital U.S. Aggregate Bond Index | | | 8.16 | % | | | 9.55 | %** | |
| Lipper Long/Short Equity Funds Classification | | | 3.55 | % | | | 12.01 | %** | |
Sector weightings†:
Manager's discussion and analysis
In the 12 months ended September 30, the Turner Spectrum Fund, Institutional Class Shares (TSPEX) produced a 0.77% gain, diminished by unrewarding short positions in consumer, materials/processing, financial-services, and health-care stocks. The fund underperformed the S&P 500 Index's 10.16% gain, the Barclays Capital U.S. Aggregate Bond Index's 8.16% gain, and the Lipper Long/Short Equity Funds Classification's 3.55% gain.
The fund, which consists of seven Turner long/short strategies that seek to capitalize on both rising and falling stock prices, produced its best relative returns on the long side in the financial-services and health-care sectors. Long positions in producer-durables stocks hurt performance the most. The fund was conservatively positioned, with a net long exposure generally of less than 25%. It held broadly diversified positions in large-cap, mid-cap, and small-cap stocks, most of them traded in the U.S. In general, the smaller stocks performed best.
* These figures represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate, so an investor's shares, when redeemed, may be worth more or less than their original cost. The performance in the above graph and table does not reflect the deduction of taxes the shareholder will pay on fund distributions or the redemptions of fund shares. Performance of the Institutional, Investor and Class C Shares will differ due to differences in fees.
** The inception date of the Turner Spectrum Fund (Institutional Class Shares and Investor Class Shares) was May 7, 2009. Index returns are based on Institutional Class Shares inception date.
*** The inception date of the Turner Spectrum Fund (Class C Shares) was July 14, 2009.
† Percentages based on total investments.
†† Cash equivalents are not being considered a holding for the top five holdings, but are counted in the number of holdings.
Cl — Class
TURNER FUNDS 2010 ANNUAL REPORT 9
INVESTMENT REVIEW
Turner Concentrated Growth Fund
Fund profile
September 30, 2010
g Ticker symbol TTOPX
g CUSIP #87252R862
g Top five holdings††
(1) Apple
(2) Baidu ADR
(3) QUALCOMM
(4) Halliburton
(5) Caterpillar
g % in five largest holdings 28.2%†
g Number of holdings 23††
g Price/earnings ratio 19.4
g Weighted average market capitalization $40.42 billion
g % of holdings with positive earnings surprises 95.5%
g % of holdings with negative earnings surprises 4.6%
g Net assets $43 million
Growth of a $10,000 investment in the
Turner Concentrated Growth Fund:
September 30, 2000-September 30, 2010*
Average annual total returns (Periods ending September 30, 2010)
| | | One
year | | Three
years | | Five
years | | Ten
years | | Since
inception | |
| Turner Concentrated Growth Fund | | | 7.94 | % | | | -13.07 | % | | | -1.30 | % | | | -10.18 | % | | | -0.46 | % | |
| Russell 1000 Growth Index | | | 12.65 | % | | | -4.36 | % | | | 2.06 | % | | | -3.44 | % | | | -1.56 | % | |
Sector weightings†:
Manager's discussion and analysis
Significant underperformance in four sectors impaired the total return of the Turner Concentrated Growth Fund (TTOPX) in the 12-month period ended September 30. As a result the fund, which contains a select few stocks that we think have the strongest expected earnings power and return potential, rose 7.94%, markedly lagging the Russell 1000 Growth Index's 12.65% gain.
Materials, financials, industrials, and health-care stocks, a 32% weighting, were the detractors from results. In those sectors, metals, mining, investment-management, insurance, semiconductor-capital-equipment, pharmaceutical, and medical-equipment shares performed poorly. Altogether, three of the fund's seven sector positions beat their corresponding index sectors. Consumer-discretionary and information-technology stocks, a 60% weighting, added the most extra return. Retailing, business-services, gaming, semiconductor, and data-networking shares were among the winning stock selections.
* These figures represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate, so an investor's shares, when redeemed, may be worth more or less than their original cost. The performance in the above graph and table does not reflect the deduction of taxes the shareholder will pay on fund distributions or the redemptions of fund shares. The inception date of the Turner Concentrated Growth Fund was June 30, 1999.
† Percentages based on total investments.
†† Cash equivalents are not being considered a holding for the top five holdings, but are counted in the number of holdings.
ADR — American Depositary Receipt
10 TURNER FUNDS 2010 ANNUAL REPORT
INVESTMENT REVIEW
Turner Core Growth Fund
Fund profile
September 30, 2010
g Ticker symbol TTMEX
Institutional Class Shares
g CUSIP #900297847
Institutional Class Shares
g Top five holdings†††
(1) Apple
(2) PepsiCo
(3) Halliburton
(4) American Express
(5) Lam Research
g % in 5 largest holdings 17.4%†
g Number of holdings 72†††
g Price/earnings ratio 18.2
g Weighted average market capitalization $44.55 billion
g % of holdings with positive earnings surprises 80.3%
g % of holdings with negative earnings surprises 16.9%
g Net assets $378 million, Institutional Class Shares
Growth of a $250,000 investment in the
Turner Core Growth Fund, Institutional Class Shares:
February 28, 2001-September 30, 2010*,**
Average annual total returns (Periods ending September 30, 2010)
| | | One
year | | Three
years | | Five
years | | Since
inception | |
| Turner Core Growth Fund, Institutional Class Shares | | | 6.76 | % | | | -9.43 | % | | | -0.30 | % | | | 0.77 | %** | |
| Turner Core Growth Fund, Investor Class Shares | | | 6.51 | % | | | -9.67 | % | | | -0.59 | % | | | 0.06 | %*** | |
| Russell 1000 Growth Index | | | 12.65 | % | | | -4.36 | % | | | 2.06 | % | | | 0.10 | %** | |
Sector weightings†:
Manager's discussion and analysis
Losses in three major sectors contributed notably to the underperformance of the Turner Core Growth Fund, Institutional Class (TTMEX) in the 12-month period ended September 30. Stocks in the energy, financials, and industrials sectors accounted for 32% of the fund's holdings, and their losses, especially in energy-services, investment-management, insurance, metals, and mining shares, hurt results in those sectors. That depressed the overall return of the fund, which was up 6.76% and trailed the Russell 1000 Growth Index's 12.65% return.
Two of the fund's 10 sector positions outperformed their corresponding index sectors; the contributors to results were the information-technology and utilities sectors, a 26% weighting. Semiconductor, data-networking, wireless-communications, and telecommunications holdings produced good relative returns.
* These figures represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate, so an investor's shares, when redeemed, may be worth more or less than their original cost. The performance in the above graph and table does not reflect the deduction of taxes the shareholder will pay on fund distributions or the redemptions of fund shares. On February 25, 2005, the Constellation TIP Core Growth Fund reorganized into the Turner Core Growth Fund. Performance of the Institutional and Investor Class Shares will differ due to differences in fees.
** The inception date of the Turner Core Growth Fund (Institutional Class Shares) was February 28, 2001. Index returns are based on Institutional Class Shares inception date.
*** The inception date of the Turner Core Growth Fund (Investor Class Shares) was August 1, 2005.
† Percentages based on total investments.
†† Cash equivalents include short-term investments held as collateral for securities lending activity. Please see Note 11 in Notes to Financial Statements for more detailed information.
††† Cash equivalents and short-term investments are not being considered a holding for the top five holdings, but are counted in the number of holdings.
TURNER FUNDS 2010 ANNUAL REPORT 11
INVESTMENT REVIEW
Turner Emerging Growth Fund
Fund profile
September 30, 2010
g Ticker symbol TMCGX
Investor Class Shares
g CUSIP #872524301
Investor Class Shares
g Top five holdings†††
(1) Deckers Outdoor
(2) Bucyrus International, Cl A
(3) American Physicians Capital
(4) Alexion Pharmaceuticals
(5) Orthofix International
g % in 5 largest holdings 11.3%†
g Number of holdings 113†††
g Price/earnings ratio 16.9
g Weighted average market capitalization $1.60 billion
g % of holdings with positive earnings surprises 68.8%
g % of holdings with negative earnings surprises 23.2%
g Net assets $177 million, Investor Class Shares
Growth of a $10,000 investment in the
Turner Emerging Growth Fund,
Investor Class Shares:
September 30, 2000-September 30, 2010*,***
Average annual total returns (Periods ending September 30, 2010)
| | | One
year | | Three
years | | Five
years | | Ten
years | | Since
inception | |
| Turner Emerging Growth Fund, Institutional Class Shares | | | 12.52 | % | | | — | | | | — | | | | — | | | | 27.20 | %** | |
| Turner Emerging Growth Fund, Investor Class Shares | | | 12.22 | % | | | -7.36 | % | | | 0.86 | % | | | 5.43 | % | | | 18.19 | %*** | |
| Russell 2000 Growth Index | | | 14.79 | % | | | -3.75 | % | | | 2.35 | % | | | -0.13 | % | | | 2.07 | %*** | |
Sector weightings†:
Manager's discussion and analysis
In the 12-month period ended September 30, the Turner Emerging Growth Fund, Investor Class Shares (TMCGX) gained 12.22%, underperforming the Russell 2000 Growth Index's 14.79% return. Subpar results in the information-technology sector, a 19% weighting, were the biggest drag on the fund's performance. Detractors here included semiconductor, data-networking, wireless-communications, and data-storage stocks.
Four of the fund's 10 sector positions added value. Health-care and industrials stocks, which amounted to 32% of holdings, outperformed by the largest margin. Pharmaceutical, biotechnology, medical-device, and industrial-equipment shares were relatively strong performers.
* These figures represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate, so an investor's shares, when redeemed, may be worth more or less than their original cost. The performance in the above graph and table does not reflect the deduction of taxes the shareholder will pay on fund distributions or the redemptions of fund shares. Performance of the Institutional and Investor Class Shares will differ due to differences in fees.
** The inception date of the Turner Emerging Growth Fund (Institutional Class Shares) was February 1, 2009.
*** The inception date of the Turner Emerging Growth Fund (Investor Class Shares) was February 27, 1998. Index returns are based on Investor Class Shares inception date.
† Percentages based on total investments.
†† Cash equivalents include short-term investments held as collateral for securities lending activity. Please see Note 11 in Notes to Financial Statements for more detailed information.
††† Cash equivalents and short-term investments are not being considered a holding for the top five holdings, but are counted in the number of holdings.
Cl — Class
Amounts designated as "—" are not applicable.
12 TURNER FUNDS 2010 ANNUAL REPORT
INVESTMENT REVIEW
Turner Large Cap Growth Fund
Fund profile
September 30, 2010
g Ticker symbol TSGEX
Institutional Class Shares
g CUSIP #87252R839
Institutional Class Shares
g Top five holdings†††
(1) Apple
(2) PepsiCo
(3) Broadcom, Cl A
(4) Halliburton
(5) QUALCOMM
g % in 5 largest holdings 19.6%†
g Number of holdings 65†††
g Price/earnings ratio 18.1
g Weighted average market capitalization $46.32 billion
g % of holdings with positive earnings surprises 89.1%
g % of holdings with negative earnings surprises 10.9%
g Net assets $118 million, Institutional Class Shares
Growth of a $250,000 investment in the
Turner Large Cap Growth Fund,
Institutional Class Shares:
September 30, 2000-September 30, 2010*,**
Average annual total returns (Periods ending September 30, 2010)
| | | One
year | | Three
years | | Five
years | | Ten
years | | Since
inception | |
| Turner Large Cap Growth Fund, Institutional Class Shares | | | 10.00 | % | | | -10.37 | % | | | -1.93 | % | | | -6.68 | % | | | -6.66 | %** | |
| Turner Large Cap Growth Fund, Investor Class Shares | | | 9.58 | % | | | -10.66 | % | | | — | | | | — | | | | -5.41 | %*** | |
| Russell Top 200 Growth Index | | | 10.57 | % | | | -4.49 | % | | | 1.81 | % | | | -4.20 | % | | | -4.51 | %** | |
| Russell 1000 Growth Index | | | 12.65 | % | | | -4.36 | % | | | 2.06 | % | | | -3.44 | % | | | -3.64 | %** | |
Sector weightings†:
Manager's discussion and analysis
Strong results in the consumer-discretionary and technology sectors weren't enough to offset weak relative returns in other sectors for the Turner Large Cap Growth Fund, Institutional Class (TSGEX) in the 12-month period ended September 30. Although the fund gained 10.00%, that gain slightly underperformed the Russell Top 200 Growth Index's 10.57% rise.
Consumer discretionary and information technology were the only sectors to beat the corresponding index sectors. Retailing, business-services, apparel, consumer-electronics, data-networking, wireless-communications, and semiconductor shares did especially well; together, they accounted for 49% of the fund's investments. Detracting most from performance was a loss in the industrials sector, which represented 9% of the portfolio. Relatively poor performers in those sectors included metals and mining shares.
* These figures represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate, so an investor's shares, when redeemed, may be worth more or less than their original cost. The performance in the above graph and table does not reflect the deduction of taxes the shareholder will pay on fund distributions or the redemptions of fund shares. Performance of the Institutional and Investor Class Shares will differ due to differences in fees.
** The inception date of the Turner Large Cap Growth Fund (Institutional Class Shares) was June 14, 2000. Index returns are based on Institutional Class Shares inception date.
*** The inception date of the Turner Large Cap Growth Fund (Investor Class Shares) was January 31, 2007.
† Percentages based on total investments.
†† Cash equivalents include short-term investments held as collateral for securities lending activity. Please see Note 11 in Notes to Financial Statements for more detailed information.
††† Cash equivalents and short-term investments are not being considered a holding for the top five holdings, but are counted in the number of holdings.
Cl — Class
Amounts designated as "—" are not applicable.
TURNER FUNDS 2010 ANNUAL REPORT 13
INVESTMENT REVIEW
Turner Midcap Growth Fund
Fund profile
September 30, 2010
g Ticker symbol TMGFX
Investor Class Shares
g CUSIP #900297409
Investor Class Shares
g Top five holdings†††
(1) F5 Networks
(2) Cummins
(3) Starwood Hotels & Resorts Worldwide
(4) Crown Castle International
(5) Salesforce.com
g % in 5 largest holdings 10.5%†
g Number of holdings 85†††
g Price/earnings ratio 19.0
g Weighted average market capitalization $7.50 billion
g % of holdings with positive earnings surprises 78.6%
g % of holdings with negative earnings surprises 20.2%
g Net assets $751 million, Investor Class Shares
Growth of a $10,000 investment in the
Turner Midcap Growth Fund, Investor Class Shares:
September 30, 2000-September 30, 2010*,***
Average annual total returns (Periods ending September 30, 2010)
| | | One
year | | Three
years | | Five
years | | Ten
years | | Since
inception | |
| Turner Midcap Growth Fund, Institutional Class Shares | | | 14.47 | % | | | — | | | | — | | | | — | | | | -6.26 | %** | |
| Turner Midcap Growth Fund, Investor Class Shares | | | 14.21 | % | | | -5.93 | % | | | 2.41 | % | | | -3.50 | % | | | 9.81 | %*** | |
| Turner Midcap Growth Fund, Retirement Class Shares | | | 13.93 | % | | | -6.16 | % | | | 2.09 | % | | | — | | | | 5.78 | %**** | |
| Russell Midcap Growth Index | | | 18.27 | % | | | -3.90 | % | | | 2.86 | % | | | -0.88 | % | | | 6.38 | %*** | |
Sector weightings†:
Manager's discussion and analysis
In the 12-month period ended September 30, the Turner Midcap Growth Fund, Investor Class (TMGFX) advanced 14.21%, a result that underperformed the Russell Midcap Growth Index's 18.27% gain.
The fund's performance was most impaired by unfavorable relative returns in the health-care and industrials sectors, a 22% weighting; the fund's biotechnology, medical-equipment, and industrial-equipment stocks were key detractors. Four of the fund's 10 sector positions trumped their corresponding index sectors, with information technology, utilities, and consumer discretionary, a 43% weighting, adding the most value. Contributing the greatest degree of outperformance were semiconductor, data-networking, telecommunications, retailing, and apparel stocks.
* These figures represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate, so an investor's shares, when redeemed, may be worth more or less than their original cost. The performance in the above graph and table does not reflect the deduction of taxes the shareholder will pay on fund distributions or the redemptions of fund shares. Performance of the Institutional, Investor and Retirement Class Shares will differ due to differences in fees.
** The inception date of the Turner Midcap Growth Fund (Institutional Class Shares) was June 16, 2008.
*** The inception date of the Turner Midcap Growth Fund (Investor Class Shares) was October 1, 1996. Index returns are based on Investor Class Shares inception date.
**** The inception date of the Turner Midcap Growth Fund (Retirement Class Shares) was September 24, 2001.
† Percentages based on total investments.
†† Cash equivalents include short-term investments held as collateral for securities lending activity. Please see Note 11 in Notes to Financial Statements for more detailed information.
††† Cash equivalents and short-term investments are not being considered a holding for the top five holdings, but are counted in the number of holdings.
Amounts designated as "—" are not applicable.
14 TURNER FUNDS 2010 ANNUAL REPORT
INVESTMENT REVIEW
Turner New Enterprise Fund
Fund profile
September 30, 2010
g Ticker symbol TBTBX
g CUSIP #87252R797
g Top five holdings†††
(1) F5 Networks
(2) Apple
(3) Netlogic Microsystems
(4) Alexion Pharmaceuticals
(5) Concho Resources
g % in 5 largest holdings 22.6%†
g Number of holdings 31†††
g Price/earnings ratio 16.8
g Weighted average market capitalization $22.07 billion
g % of holdings with positive earnings surprises 93.3%
g % of holdings with negative earnings surprises 3.3%
g Net assets $23 million
Growth of a $10,000 investment in the
Turner New Enterprise Fund:
September 30, 2000-September 30, 2010*
Average annual total returns (Periods ending September 30, 2010)
| | | One
year | | Three
years | | Five
years | | Ten
years | | Since
inception | |
| Turner New Enterprise Fund | | | 18.25 | % | | | -6.90 | % | | | 3.73 | % | | | -5.60 | % | | | -3.37 | % | |
| NASDAQ Composite Index | | | 12.77 | % | | | -3.27 | % | | | 2.92 | % | | | -3.52 | % | | | -4.15 | % | |
Sector weightings†:
Manager's discussion and analysis
Good stock selection powered the Turner New Enterprise Fund (TBTBX) to an 18.25% gain in the 12-month period ended September 30. The fund's return exceeded that of the NASDAQ Composite Index by 5.48 percentage points.
Five of the fund's seven sector positions outperformed their corresponding index sectors. Returns in three sectors — information technology, health care, and materials, a 57% weighting — were responsible for much of the fund's performance premium. Semiconductor, data-networking, wireless-communications, biotechnology, medical-products, metals, and mining shares contributed the most. A 12% position in consumer-discretionary stocks was the main detractor, with restaurant, gaming, and apparel shares recording poor relative returns.
* These figures represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate, so an investor's shares, when redeemed, may be worth more or less than their original cost. The performance in the above graph and table does not reflect the deduction of taxes the shareholder will pay on fund distributions or the redemptions of fund shares. The inception date of the Turner New Enterprise Fund was June 30, 2000.
† Percentages based on total investments.
†† Cash equivalents include short-term investments held as collateral for securities lending activity. Please see Note 11 in Notes to Financials for more detailed information.
††† Cash equivalents and short-term investments are not being considered a holding for the top five holdings, but are counted in the number of holdings.
TURNER FUNDS 2010 ANNUAL REPORT 15
INVESTMENT REVIEW
Turner Small Cap Growth Fund
Fund profile
September 30, 2010
g Ticker symbol TSCEX
g CUSIP #900297300
g Top five holdings†††
(1) Aruba Networks
(2) Netlogic Microsystems
(3) AMERIGROUP
(4) Genesee & Wyoming, Cl A
(5) Warnaco Group
g % in 5 largest holdings 6.7%†
g Number of holdings 120†††
g Price/earnings ratio 19.0
g Weighted average market capitalization $1.63 billion
g % of holdings with positive earnings surprises 74.0%
g % of holdings with negative earnings surprises 20.2%
g Net assets $275 million
Growth of a $10,000 investment in the
Turner Small Cap Growth Fund:
September 30, 2000-September 30, 2010*
Average annual total returns (Periods ending September 30, 2010)
| | | One
year | | Three
years | | Five
years | | Ten
years | | Since
inception | |
| Turner Small Cap Growth Fund | | | 15.10 | % | | | -4.23 | % | | | 3.26 | % | | | -0.73 | % | | | 10.78 | % | |
| Russell 2000 Growth Index | | | 14.79 | % | | | -3.75 | % | | | 2.35 | % | | | -0.13 | % | | | 4.91 | % | |
Sector weightings†:
Manager's discussion and analysis
The Turner Small Cap Growth Fund (TSCEX) produced favorable, substantial relative returns in four of the nine market sectors in which it was invested in the 12-month period ended September 30. That was enough to enable the fund to outpace its benchmark, the Russell 2000 Growth Index. The fund recorded a gain of 15.10%, a performance advantage of 0.31 percentage point over the Russell 2000 Growth Index's 14.79% return.
The fund's best relative performers were health-care, energy, and consumer-discretionary stocks, a 35% weighting. Specifically, pharmaceutical, diagnostic-test, medical-equipment, petroleum, energy-services, apparel, retailing, and business-services shares did best in those sectors. Information-technology and financials stocks, a 27% weighting, were drags on performance; semiconductor, data-networking, software, banking, insurance, and diversified-financial shares were among the laggards.
* These figures represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate, so an investor's shares, when redeemed, may be worth more or less than their original cost. The performance in the above graph and table does not reflect the deduction of taxes the shareholder will pay on fund distributions or the redemptions of fund shares. The inception date of the Turner Small Cap Growth Fund was February 7, 1994.
† Percentages based on total investments.
†† Cash equivalents include short-term investments held as collateral for securities lending activity. Please see Note 11 in Notes to Financial Statements for more detailed information.
††† Cash equivalents and short-term investments are not being considered a holding for the top five holdings, but are counted in the number of holdings.
Cl — Class
16 TURNER FUNDS 2010 ANNUAL REPORT
INVESTMENT REVIEW
Turner Quantitative Broad Market Equity Fund
Fund profile
September 30, 2010
g Ticker symbol TBMEX
Institutional Class Shares
g CUSIP #900297730
Institutional Class Shares
g Top five holdings††
(1) Apple
(2) Microsoft
(3) Wal-Mart Stores
(4) Pfizer
(5) Bristol-Myers Squibb
g % in 5 largest holdings 8.6%†
g Number of holdings 110††
g Price/earnings ratio 13.2
g Weighted average market capitalization $63.68 billion
g % of holdings with positive earnings surprises 84.4%
g % of holdings with negative earnings surprises 13.8%
g Net assets $11 million, Institutional Class Shares
Growth of a $250,000 investment in the
Turner Quantitative Broad Market Equity Fund,
Institutional Class Shares:
June 30, 2008-September 30, 2010*
Average annual total returns (Periods ending September 30, 2010)
| | | One
year | | Since
inception | |
| Turner Quantitative Broad Market Equity Fund, Institutional Class Shares | | | 8.30 | % | | | -4.19 | % | |
| Turner Quantitative Broad Market Equity Fund, Investor Class Shares | | | 7.98 | % | | | -4.43 | % | |
| Russell 3000 Index | | | 10.96 | % | | | -2.35 | % | |
| S&P 500 Index | | | 10.16 | % | | | -2.72 | % | |
Sector weightings†:
Manager's discussion and analysis
In the 12-month period ended September 30, the Turner Quantitative Broad Market Equity Fund, Institutional Class Shares (TBMEX) rose 8.30%, a performance that fell short of the Russell 3000 Index's 10.96% gain.
The fund recorded good relative returns in three of 10 sectors, whose holdings were selected because they ranked highly in our proprietary quantitative model. Particularly rewarding relative returns were produced by the energy sector, a 10% weighting. Petroleum and energy-services shares were among the best performers in that sector. The model was less effective at selecting good stocks in the other sectors. Impairing results the most were holdings in the health-care and financials sectors, a 28% weighting. Pharmaceutical, medical-device, health-services, banking, insurance, and diversified-financial stocks were the biggest detractors.
* These figures represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate, so an investor's shares, when redeemed, may be worth more or less than their original cost. The performance in the above graph and table does not reflect the deduction of taxes the shareholder will pay on fund distributions or the redemption of fund shares. The inception date of the Turner Quantitative Broad Market Equity Fund was June 30, 2008. Performance of the Institutional and Investor Class Shares will differ due to the difference in fees.
† Percentages based on total investments.
†† Cash equivalents are not being considered a holding for the top five holdings, but are counted in the number of holdings.
TURNER FUNDS 2010 ANNUAL REPORT 17
INVESTMENT REVIEW
Turner Quantitative Large Cap Value Fund
Fund profile
September 30, 2010
g Ticker symbol TLVFX
Institutional Class Shares
g CUSIP #900297821
Institutional Class Shares
g Top five holdings††
(1) Exxon Mobil
(2) AT&T
(3) Berkshire Hathaway, Cl B
(4) JPMorgan Chase
(5) General Electric
g % in 5 largest holdings 14.5%†
g Number of holdings 91††
g Price/earnings ratio 12.9
g Weighted average market capitalization $63.49 billion
g % of holdings with positive earnings surprises 77.8%
g % of holdings with negative earnings surprises 20.0%
g Net assets $0.8 million, Institutional Class Shares
Growth of a $25,000 investment in the
Turner Quantitative Large Cap Value Fund,
Institutional Class Shares:
October 10, 2005-September 30, 2010*,**
Average annual total returns (Periods ending September 30, 2010)
| | | One
year | | Three
years | | Since
inception | |
| Turner Quantitative Large Cap Value Fund, Institutional Class Shares | | | 7.24 | % | | | -9.48 | % | | | -0.24 | %** | |
| Turner Quantitative Large Cap Value Fund, Investor Class Shares | | | 7.07 | % | | | — | | | | 4.53 | %*** | |
| Russell 1000 Value Index | | | 8.90 | % | | | -9.39 | % | | | 0.30 | %** | |
Sector weightings†:
Manager's discussion and analysis
In the 12 months ended September 30, the Turner Quantitative Large Cap Value Fund, Institutional Class Shares (TLVFX) was up 7.24%. The gain trailed that of the Russell 1000 Value Index, which rose 8.90%.
The fund is invested in large-cap value stocks that rank highly in our proprietary quantitative model. The model had mixed success at picking outperforming stocks: four of the fund's 10 sector investments beat their corresponding index sectors. Positions in the financials and energy sectors, a 37% weighting, enhanced performance to the greatest degree; insurance, securities-exchange, investment-management, petroleum, and energy-services shares did best. Hurting results the most were positions in the health-care and consumer-discretionary sectors, which represented 21% of the portfolio; pharmaceutical, medical-equipment, health-services, apparel, restaurant, and retailing shares were significant detractors.
* These figures represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate, so an investor's shares, when redeemed, may be worth more or less than their original cost. The performance in the above graph and table does not reflect the deduction of taxes the shareholder will pay on fund distributions or the redemptions of fund shares. Performance of the Institutional and Investor Class Shares will differ due to differences in fees.
** The inception date of the Turner Quantitative Large Cap Value Fund (Institutional Class Shares) was October 10, 2005. Index returns are based on Institutional Class Shares inception date.
*** The inception date of the Turner Quantitative Large Cap Value Fund (Investor Class Shares) was October 31, 2008.
† Percentages based on total investments.
†† Cash equivalents are not being considered a holding for the top five holdings, but are counted in the number of holdings.
Cl — Class
Amounts designated as "—" are not applicable.
18 TURNER FUNDS 2010 ANNUAL REPORT
INVESTMENT REVIEW
Turner Global Opportunities Fund
Fund profile
September 30, 2010
g Ticker symbol TGLBX
Institutional Class Shares
g CUSIP #900297623
Institutional Class Shares
g Top five holdings††
(1) Apple
(2) F5 Networks
(3) Alexion Pharmaceuticals
(4) ASML Holding, NY Shares
(5) Lam Research
g % in 5 largest holdings 25.5%†
g Number of holdings 33††
g Price/earnings ratio 18.0
g Weighted average market capitalization $36.59 billion
g % of holdings with positive earnings surprises 70.9%
g % of holdings with negative earnings surprises 10.1%
g Net Assets $1 million, Institutional Class Shares
Growth of a $250,000 investment in the
Turner Global Opportunities Fund,
Institutional Class Shares:
May 7, 2010-September 30, 2010*
Cumulative total returns (Period ending September 30, 2010)
| | | Since
inception | |
| Turner Global Opportunities Fund, Institutional Class Shares | | | 15.20 | %** | |
| Turner Global Opportunities Fund, Investor Class Shares | | | 15.00 | %** | |
| MSCI World Growth Index | | | 9.53 | %** | |
| MSCI World Index | | | 8.14 | %** | |
Sector weightings†:
Manager's discussion and analysis
The Turner Global Opportunities Fund, Institutional Class Shares (TGLBX) got off to a strong start in both absolute and relative terms in its first five months of operation. The fund produced a double-digit gain, 15.20%, which beat the MSCI World Growth Index's 9.53% return by 5.67 percentage points.
On balance, stock selection was superior, with five of eight sector positions outperforming their corresponding index sectors. The two sectors that produced the best results were information technology and consumer discretionary, which amounted to 43% of holdings. In those sectors, semiconductor, data-networking, wireless-communications, retailing, business-services, and apparel shares were among the outperformers. The fund's performance was hurt by unsatisfactory relative returns in the industrials, materials, and health-care sectors, with a combined weighting of 24%. Semiconductor-capital-equipment, heavy-equipment, metals, mining, and biotechnology stocks were the biggest laggards.
* These figures represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate, so an investor's shares, when redeemed, may be worth more or less than their original cost. The performance in the above graph and table does not reflect the deduction of taxes the shareholder will pay on fund distributions or the redemptions of fund shares. The inception date of the Turner Global Opportunities Fund was May 7, 2010. Performance of the Institutional and Investor Class Shares will differ due to differences in fees.
** Cumulative return, not annualized.
† Percentages based on total investments.
†† Cash equivalents are not being considered a holding for the top five holdings, but are counted in the number of holdings.
MSCI — Morgan Stanley Capital International
NY — New York
TURNER FUNDS 2010 ANNUAL REPORT 19
INVESTMENT REVIEW
Turner International Core Growth Fund
Fund profile
September 30, 2010
g Ticker symbol TICGX
Institutional Class Shares
g CUSIP #900297771
Institutional Class Shares
g Top five holdings††
(1) Nestle
(2) Novartis
(3) Rio Tinto
(4) BHP Billiton
(5) ASML Holding
g % in 5 largest holdings 13.0%†
g Number of holdings 70††
g Price/earnings ratio 16.0
g Weighted average market capitalization $42.07 billion
g % of holdings with positive earnings surprises 43.5%
g % of holdings with negative earnings surprises 15.9%
g Net assets $5 million, Institutional Class Shares
Growth of a $250,000 investment in the
Turner International Core Growth Fund,
Institutional Class Shares:
January 31, 2007-September 30, 2010*,**
Average annual total returns (Periods ending September 30, 2010)
| | | One
year | | Three
years | | Since
inception | |
| Turner International Core Growth Fund, Institutional Class Shares | | | 15.88 | % | | | -6.98 | % | | | -0.47 | %** | |
| Turner International Core Growth Fund, Investor Class Shares | | | 15.61 | % | | | — | | | | 25.63 | %*** | |
| MSCI World Growth ex-U.S. Index | | | 8.69 | % | | | -8.02 | % | | | -2.51 | %** | |
Sector weightings†:
Manager's discussion and analysis
Generally good stock selection resulted in the Turner International Core Growth Fund, Institutional Class Shares (TICGX) recording a 15.88% gain in the 12-month period ended September 30. That return was good enough to beat the MSCI World Growth ex-U.S. Index's 8.69% return by 7.19 percentage points.
Seven of 10 sector positions contributed to the fund's results. Consumer-staples and energy holdings, a 20% weighting, added the most value; in those sectors, food-processing, beverage, supermarket, petroleum, and energy-services shares performed especially well. Information-technology and industrials positions, a 23% weighting, were the two detractors from performance, with semiconductor, data-networking, and heavy-equipment stocks providing weak relative returns.
* These figures represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate, so an investor's shares, when redeemed, may be worth more or less than their original cost. The performance in the above graph and table does not reflect the deduction of taxes the shareholder will pay on fund distributions or the redemptions of fund shares. Performance of the Institutional and Investor Class Shares will differ due to differences in fees.
** The inception date of the Turner International Core Growth Fund (Institutional Class Shares) was January 31, 2007. Index returns are based on Institutional Class Shares inception date.
*** The inception date of the Turner International Core Growth Fund (Investor Class Shares) was October 31, 2008.
† Percentages based on total investments.
†† Cash equivalents are not being considered a holding for the top five holdings, but are counted in the number of holdings.
MSCI — Morgan Stanley Capital International
Amounts designated as "—" are not applicable.
20 TURNER FUNDS 2010 ANNUAL REPORT
INVESTMENT REVIEW
Turner Small Cap Equity Fund
Fund profile
September 30, 2010
g Ticker symbol TSEIX
Investor Class Shares
g CUSIP #87252R714
Investor Class Shares
g Top five holdings†††
(1) Earthlink
(2) Sally Beauty Holdings
(3) 99 Cents Only Stores
(4) Mentor Graphics
(5) Syniverse Holdings
g % in 5 largest holdings 9.3%†
g Number of holdings 86†††
g Price/earnings ratio 15.4
g Weighted average market capitalization $1.45 billion
g % of holdings with positive earnings surprises 69.4%
g % of holdings with negative earnings surprises 16.5%
g Net assets $6 million, Investor Class Shares
Growth of a $10,000 investment in the
Turner Small Cap Equity Fund,
Investor Class Shares:
March 4, 2002-September 30, 2010*,***
Average annual total returns (Periods ending September 30, 2010)
| | | One
year | | Three
years | | Five
years | | Since
inception | |
| Turner Small Cap Equity Fund, Institutional Class Shares | | | 12.82 | % | | | — | | | | — | | | | 24.14 | %** | |
| Turner Small Cap Equity Fund, Investor Class Shares | | | 12.53 | % | | | -8.53 | % | | | -2.34 | % | | | 5.41 | %*** | |
| Russell 2000 Index | | | 13.35 | % | | | -4.29 | % | | | 1.60 | % | | | 5.24 | %*** | |
Sector weightings†:
Manager's discussion and analysis
The Turner Small Cap Equity Fund, Investor Class Shares (TSEIX) returned 12.53% in the 12-month period ended September 30. The fund's gain was less than that of the benchmark, the Russell 2000 Index, which climbed 13.35%.
The fund is invested in both growth and value stocks in the 10 market sectors; five of those sector positions beat their index counterparts, but they didn't represent enough of a portfolio mass to prevent the fund from underperforming. Industrials and health-care shares, which amounted to a 24% position, produced the strongest relative returns. In those sectors, heavy-equipment, construction, health-services, and medical-equipment stocks delivered extra return. Financials and information-technology shares, a 40% weighting, were the biggest drags on performance. Banking, insurance, real-estate, information-services, software, and digital-equipment stocks recorded subpar results.
* These figures represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate, so an investor's shares, when redeemed, may be worth more or less than their original cost. The performance in the above graph and table does not reflect the deduction of taxes the shareholder will pay on fund distributions or the redemptions of fund shares. Performance of the Institutional and Investor Class Shares will differ due to differences in fees.
** The inception date of the Turner Small Cap Equity Fund (Institutional Class Shares) was February 1, 2009.
*** The inception date of the Turner Small Cap Equity Fund (Investor Class Shares) was March 4, 2002. Index returns are based on Investor Class Shares inception date.
† Percentages based on total investments.
†† Cash equivalents include short-term investments held as collateral for securities lending activity. Please see Note 11 in Notes to Financial Statements for more detailed information.
††† Cash equivalents and short-term investments are not being considered a holding for the top five holdings, but are counted in the number of holdings.
Amounts designated as "—" are not applicable.
TURNER FUNDS 2010 ANNUAL REPORT 21
FINANCIAL STATEMENTS
Schedule of investments
Turner Spectrum Fund
September 30, 2010
| | | Shares | | Value
(000) | |
| Common stock—69.3% | |
| Consumer discretionary—10.5% | |
| Abercrombie & Fitch, Cl A | | | 22,710 | | | $ | 893 | | |
| Anta Sports Products | | | 157,000 | | | | 364 | | |
| Belle International Holdings | | | 93,000 | | | | 187 | | |
Brilliance China Automotive
Holdings* | | | 345,329 | | | | 257 | | |
| Buffalo Wild Wings* | | | 37,160 | | | | 1,779 | | |
| California Pizza Kitchen* | | | 18,690 | | | | 319 | | |
| Citi Trends* | | | 12,860 | | | | 312 | | |
| Coach | | | 9,300 | | | | 400 | | |
| Columbia Sportswear | | | 6,880 | | | | 402 | | |
| CROCS* | | | 129,450 | | | | 1,684 | | |
| Deckers Outdoor* | | | 18,070 | | | | 903 | | |
| DineEquity* | | | 9,730 | | | | 438 | | |
| Education Management* | | | 25,766 | | | | 378 | | |
| Fossil* | | | 4,910 | | | | 264 | | |
| Gaylord Entertainment* | | | 14,160 | | | | 432 | | |
| Guess? | | | 24,320 | | | | 988 | | |
| Haier Electronics Group* | | | 689,470 | | | | 581 | | |
| Harley-Davidson | | | 11,980 | | | | 341 | | |
| Interpublic Group of Cos.* | | | 50,620 | | | | 508 | | |
| J.C. Penney | | | 40,370 | | | | 1,097 | | |
| Joe's Jeans* | | | 209,360 | | | | 442 | | |
| Li & Fung | | | 72,000 | | | | 405 | | |
| Liberty Media - Starz, Ser A* | | | 10,960 | | | | 711 | | |
| L'Occitane International* | | | 94,250 | | | | 262 | | |
| Maidenform Brands* | | | 33,930 | | | | 979 | | |
| Nordstrom | | | 12,500 | | | | 465 | | |
| Parkson Retail Group | | | 127,000 | | | | 221 | | |
| PF Chang's China Bistro | | | 20,580 | | | | 951 | | |
| Skechers U.S.A., Cl A* | | | 21,300 | | | | 500 | | |
| Starbucks | | | 54,150 | | | | 1,385 | | |
Starwood Hotels & Resorts
Worldwide | | | 43,100 | | | | 2,265 | | |
| Talbots* | | | 114,121 | | | | 1,495 | | |
| Tempur-Pedic International* | | | 9,270 | | | | 287 | | |
| True Religion Apparel* | | | 11,274 | | | | 241 | | |
| Unifi* | | | 60,880 | | | | 274 | | |
| Urban Outfitters* | | | 20,910 | | | | 657 | | |
| WMS Industries* | | | 16,100 | | | | 613 | | |
| Wyndham Worldwide | | | 17,260 | | | | 474 | | |
| Total Consumer discretionary | | | | | | | 25,154 | | |
| | | Shares | | Value
(000) | |
| Consumer staples—1.3% | |
| Alberto-Culver, Cl B | | | 15,230 | | | $ | 574 | | |
| Green Mountain Coffee Roasters* | | | 26,270 | | | | 819 | | |
| Hengan International Group | | | 26,802 | | | | 267 | | |
| Mead Johnson Nutrition, Cl A | | | 16,990 | | | | 967 | | |
| Prestige Brands Holdings* | | | 44,160 | | | | 437 | | |
| Total Consumer staples | | | | | | | 3,064 | | |
| Energy—3.1% | |
| BreitBurn Energy Partners LP | | | 45,540 | | | | 832 | | |
| Cairn Energy* | | | 34,500 | | | | 246 | | |
| Cimarex Energy | | | 8,130 | | | | 538 | | |
| Complete Production Services* | | | 32,670 | | | | 668 | | |
| EXCO Resources | | | 30,620 | | | | 455 | | |
| National Oilwell Varco | | | 32,840 | | | | 1,460 | | |
| Occidental Petroleum | | | 8,760 | | | | 686 | | |
| RPC | | | 25,690 | | | | 544 | | |
| Weatherford International* | | | 114,960 | | | | 1,966 | | |
| Total Energy | | | | | | | 7,395 | | |
| Financials—15.5% | |
| Affiliated Managers Group* | | | 23,090 | | | | 1,801 | | |
| Aflac | | | 28,480 | | | | 1,473 | | |
| Alexandria Real Estate Equities | | | 7,495 | | | | 525 | | |
| AMB Property | | | 52,730 | | | | 1,396 | | |
| American Express | | | 44,220 | | | | 1,859 | | |
| Banco Compartamos | | | 29,502 | | | | 188 | | |
Banco Latinoamericano de
Comercio Exterior, Cl E | | | 29,670 | | | | 429 | | |
| Bank of Nova Scotia | | | 21,390 | | | | 1,140 | | |
| Bank of the Ozarks | | | 14,120 | | | | 524 | | |
| BlackRock, Cl A | | | 4,570 | | | | 778 | | |
| Blackstone Group LP | | | 23,580 | | | | 299 | | |
| BNP Paribas | | | 11,780 | | | | 838 | | |
| BR Malls Participacoes | | | 150,620 | | | | 1,243 | | |
| Brown & Brown | �� | | 108,180 | | | | 2,184 | | |
| CB Richard Ellis Group, Cl A* | | | 24,390 | | | | 446 | | |
| Citigroup* | | | 1,026,810 | | | | 4,004 | | |
| Digital Realty Trust | | | 9,020 | | | | 556 | | |
| Discover Financial Services | | | 31,960 | | | | 533 | | |
| Entertainment Properties Trust | | | 14,690 | | | | 634 | | |
| First Horizon National* | | | 2,440 | | | | 28 | | |
| Greenhill | | | 4,940 | | | | 392 | | |
| Highwoods Properties | | | 18,570 | | | | 603 | | |
| Host Hotels & Resorts | | | 69,460 | | | | 1,006 | | |
22 TURNER FUNDS 2010 ANNUAL REPORT
Schedule of investments
Turner Spectrum Fund
| | | Shares | | Value
(000) | |
| IntercontinentalExchange* | | | 29,050 | | | $ | 3,042 | | |
| Invesco | | | 27,050 | | | | 574 | | |
| Julius Baer Group | | | 25,950 | | | | 945 | | |
| Kilroy Realty | | | 13,510 | | | | 448 | | |
| MetLife | | | 10,740 | | | | 413 | | |
| MSCI, Cl A* | | | 23,880 | | | | 793 | | |
| National Financial Partners* | | | 48,880 | | | | 619 | | |
Och-Ziff Capital Management
Group LLC, Cl A | | | 96,890 | | | | 1,444 | | |
| Prudential Financial | | | 15,540 | | | | 842 | | |
| Safeguard Scientifics* | | | 37,470 | | | | 469 | | |
| Signature Bank* | | | 18,510 | | | | 719 | | |
| Simon Property Group | | | 8,640 | | | | 801 | | |
| Sun Hung Kai Properties | | | 41,670 | | | | 720 | | |
| Tennessee Commerce Bancorp* | | | 79,399 | | | | 321 | | |
| Travelers | | | 6,400 | | | | 333 | | |
| Validus Holdings | | | 32,910 | | | | 868 | | |
| Ventas | | | 14,870 | | | | 767 | | |
| Total Financials | | | | | | | 36,997 | | |
| Health care—19.4% | |
| Abbott Laboratories | | | 30,880 | | | | 1,613 | | |
| Alexion Pharmaceuticals* | | | 12,170 | | | | 783 | | |
| Allergan | | | 18,310 | | | | 1,218 | | |
| Amarin ADR* | | | 80,314 | | | | 207 | | |
| AMERIGROUP* | | | 11,490 | | | | 488 | | |
| Angiodynamics* | | | 18,960 | | | | 289 | | |
| Arqule* | | | 51,600 | | | | 266 | | |
| Arthrocare* | | | 15,000 | | | | 408 | | |
| BioMarin Pharmaceutical* | | | 10,590 | | | | 237 | | |
| Bristol-Myers Squibb | | | 43,150 | | | | 1,170 | | |
Charles River Laboratories
International* | | | 60,320 | | | | 2,000 | | |
| Community Health Systems* | | | 43,530 | | | | 1,348 | | |
| Cooper | | | 11,280 | | | | 521 | | |
| DexCom* | | | 13,960 | | | | 185 | | |
| Dynavax Technologies* | | | 56,520 | | | | 103 | | |
| Eli Lilly | | | 55,680 | | | | 2,034 | | |
| Emergency Medical Services, Cl A* | | | 29,820 | | | | 1,588 | | |
| Endo Pharmaceuticals Holdings* | | | 13,190 | | | | 438 | | |
| GlaxoSmithKline ADR | | | 49,070 | | | | 1,939 | | |
Health Management
Associates, Cl A* | | | 38,370 | | | | 294 | | |
| HeartWare International* | | | 2,290 | | | | 157 | | |
| Hill-Rom Holdings | | | 6,710 | | | | 241 | | |
| | | Shares | | Value
(000) | |
| Hospira* | | | 77,160 | | | $ | 4,399 | | |
| Human Genome Sciences* | | | 23,230 | | | | 692 | | |
| ICON ADR* | | | 35,610 | | | | 770 | | |
| Impax Laboratories* | | | 13,000 | | | | 257 | | |
| Intuitive Surgical* | | | 4,710 | | | | 1,336 | | |
| King Pharmaceuticals* | | | 30,420 | | | | 303 | | |
| Lincare Holdings | | | 24,450 | | | | 613 | | |
| Medco Health Solutions* | | | 15,720 | | | | 818 | | |
| NPS Pharmaceuticals* | | | 92,800 | | | | 635 | | |
| Onyx Pharmaceuticals* | | | 53,100 | | | | 1,401 | | |
| Orthofix International* | | | 60,650 | | | | 1,906 | | |
| Pfizer | | | 235,480 | | | | 4,043 | | |
| Pharmasset* | | | 6,060 | | | | 179 | | |
| Salix Pharmaceuticals* | | | 4,650 | | | | 185 | | |
| Savient Pharmaceuticals* | | | 55,510 | | | | 1,269 | | |
| Sequenom* | | | 23,640 | | | | 166 | | |
| Shire ADR | | | 34,480 | | | | 2,320 | | |
| United Therapeutics* | | | 32,310 | | | | 1,810 | | |
| UnitedHealth Group | | | 8,570 | | | | 301 | | |
| Universal Health Services, Cl B | | | 75,180 | | | | 2,921 | | |
Valeant Pharmaceuticals
International* | | | 48,636 | | | | 1,218 | | |
| Varian Medical Systems* | | | 4,260 | | | | 258 | | |
| Volcano* | | | 32,120 | | | | 834 | | |
| Watson Pharmaceuticals* | | | 3,580 | | | | 152 | | |
| Total Health care | | | | | | | 46,313 | | |
| Industrials—3.4% | |
| A123 Systems* | | | 42,070 | | | | 377 | | |
| Bucyrus International, Cl A | | | 18,380 | | | | 1,275 | | |
| Continental Airlines, Cl B* | | | 98,470 | | | | 2,446 | | |
| DryShips* | | | 94,310 | | | | 454 | | |
| Ener1* | | | 77,520 | | | | 285 | | |
| GATX | | | 13,550 | | | | 397 | | |
| HUB Group, Cl A* | | | 11,940 | | | | 349 | | |
| Manpower | | | 8,100 | | | | 423 | | |
| MSC Industrial Direct, Cl A | | | 8,540 | | | | 462 | | |
| SFN Group* | | | 35,940 | | | | 216 | | |
| Union Pacific | | | 8,550 | | | | 699 | | |
| United Parcel Service, Cl B | | | 12,660 | | | | 844 | | |
| Total Industrials | | | | | | | 8,227 | | |
| Information technology—13.1% | |
| Adobe Systems* | | | 41,890 | | | | 1,095 | | |
| Apple* | | | 8,880 | | | | 2,520 | | |
TURNER FUNDS 2010 ANNUAL REPORT 23
FINANCIAL STATEMENTS
Schedule of investments
Turner Spectrum Fund
| | | Shares | | Value
(000) | |
| Ariba* | | | 17,690 | | | $ | 334 | | |
| ARM Holdings ADR | | | 22,180 | | | | 416 | | |
| ASML Holding, NY Shares | | | 20,790 | | | | 618 | | |
| Atheros Communications* | | | 19,750 | | | | 520 | | |
| Blackboard* | | | 9,330 | | | | 336 | | |
| Broadcom, Cl A | | | 14,630 | | | | 518 | | |
| Cirrus Logic* | | | 44,370 | | | | 792 | | |
| Cree* | | | 8,950 | | | | 486 | | |
| Cypress Semiconductor* | | | 144,050 | | | | 1,812 | | |
| Digimarc* | | | 25,680 | | | | 602 | | |
| Entropic Communications* | | | 135,730 | | | | 1,303 | | |
| F5 Networks* | | | 4,340 | | | | 451 | | |
| Factset Research Systems | | | 4,430 | | | | 359 | | |
Fidelity National Information
Services | | | 53,230 | | | | 1,444 | | |
| GSI Commerce* | | | 36,400 | | | | 899 | | |
| HSW International* | | | 54,339 | | | | 336 | | |
| Hypercom* | | | 136,230 | | | | 885 | | |
| Isilon Systems* | | | 21,450 | | | | 478 | | |
| Juniper Networks* | | | 15,370 | | | | 466 | | |
| Lender Processing Services | | | 12,480 | | | | 415 | | |
| Linear Technology | | | 16,500 | | | | 507 | | |
| LogMeIn* | | | 14,040 | | | | 505 | | |
| Mediamind Technologies* | | | 26,370 | | | | 364 | | |
| Motorola* | | | 131,000 | | | | 1,117 | | |
| Netlogic Microsystems* | | | 84,530 | | | | 2,331 | | |
| Omnivision Technologies* | | | 40,920 | | | | 943 | | |
| Power-One* | | | 37,270 | | | | 339 | | |
| QUALCOMM | | | 16,370 | | | | 739 | | |
| Rackspace Hosting* | | | 13,040 | | | | 339 | | |
| Radiant Systems* | | | 36,580 | | | | 626 | | |
| SanDisk* | | | 14,800 | | | | 542 | | |
| Sonic Solutions* | | | 34,050 | | | | 388 | | |
| Teradata* | | | 11,640 | | | | 449 | | |
| Ultratech* | | | 84,880 | | | | 1,452 | | |
Varian Semiconductor
Equipment Associates* | | | 25,990 | | | | 748 | | |
| VeriFone Systems* | | | 33,440 | | | | 1,039 | | |
| VirnetX Holding | | | 80,210 | | | | 1,178 | | |
| VistaPrint* | | | 6,350 | | | | 245 | | |
| ZTE, Cl H | | | 135,000 | | | | 538 | | |
| Total Information technology | | | | | | | 31,474 | | |
| | | Shares/
Contracts | | Value
(000) | |
| Materials—3.0% | |
| CF Industries Holdings | | | 14,560 | | | $ | 1,391 | | |
Freeport-McMoRan
Copper & Gold | | | 5,180 | | | | 442 | | |
| General Moly* | | | 96,500 | | | | 353 | | |
| Goldcorp | | | 10,370 | | | | 451 | | |
| Huntsman | | | 59,090 | | | | 683 | | |
| Mosaic | | | 12,010 | | | | 706 | | |
| Schweitzer-Mauduit International | | | 10,050 | | | | 586 | | |
| Temple-Inland | | | 74,620 | | | | 1,392 | | |
| United States Steel | | | 14,860 | | | | 652 | | |
| Walter Energy | | | 5,630 | | | | 458 | | |
| Total Materials | | | | | | | 7,114 | | |
Total Common stock
(Cost $157,408) | | | | | | | 165,738 | | |
| Exchange traded funds—0.9% | |
iShares Dow Jones U.S. Real
Estate Index Fund | | | 16,720 | | | | 884 | | |
Market Vectors Junior Gold
Miners ETF | | | 25,950 | | | | 867 | | |
| ProShares UltraShort Technology | | | 24,080 | | | | 473 | | |
Total Exchange traded funds
(Cost $1,971) | | | | | | | 2,224 | | |
| Exchange traded note—0.7% | |
iPATH S&P 500 VIX Short-Term
Futures ETN | | | 91,490 | | | | 1,584 | | |
Total Exchange traded note
(Cost $1,544) | | | | | | | 1,584 | | |
| Put option contracts*—0.1% | |
iShares Russell 2000 Index Fund,
11/10 at $65 | | | 908 | | | | 142 | | |
| NetEase.com, 10/10 at $37 | | | 195 | | | | 8 | | |
Total Put option contracts
(Cost $201) | | | | | | | 150 | | |
| Call option contract*—0.0% | |
| Micron Technologies, 10/10 at $7 | | | 456 | | | | 21 | | |
Total Call option contract
(Cost $12) | | | | | | | 21 | | |
24 TURNER FUNDS 2010 ANNUAL REPORT
Schedule of investments
Turner Spectrum Fund
| | | Shares | | Value
(000) | |
| Cash equivalent—13.3% | |
BlackRock TempCash Fund
Institutional Shares
0.240%** | | | 31,894,964 | | | $ | 31,895 | | |
Total Cash equivalent
(Cost $31,895) | | | | | 31,895 | | |
Total Investments—84.3%
(Cost $193,031) | | | | $ | 201,612 | | |
As of September 30, 2010, all of the Fund's investments were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.
Percentages are based on Net Assets of $239,056.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2010.
*** This number is listed in thousands.
ADR — American Depositary Receipt
Cl — Class
ETF — Exchange Traded Fund
ETN — Exchange Traded Note
LLC — Limited Liability Company
LP — Limited Partnership
NY — New York
Ser — Series
S&P — Standard & Poor's
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2010 ANNUAL REPORT 25
FINANCIAL STATEMENTS
Schedule of securities sold short
Turner Spectrum Fund
September 30, 2010
| | | Shares | | Value
(000) | |
| Common stock—38.6% | |
| Consumer discretionary—6.7% | |
| Adidas | | | 5,063 | | | $ | 313 | | |
| Advance Auto Parts | | | 5,990 | | | | 351 | | |
| AutoNation* | | | 24,710 | | | | 575 | | |
| Bed Bath & Beyond* | | | 12,590 | | | | 547 | | |
| Buckle | | | 9,730 | | | | 258 | | |
| Chipotle Mexican Grill, Cl A* | | | 5,830 | | | | 1,003 | | |
| Galaxy Entertainment Group* | | | 223,969 | | | | 200 | | |
| Gymboree* | | | 6,010 | | | | 250 | | |
| H&R Block | | | 66,390 | | | | 860 | | |
| Li Ning | | | 69,000 | | | | 210 | | |
| Life Time Fitness* | | | 12,990 | | | | 513 | | |
| MarineMax* | | | 25,210 | | | | 177 | | |
| NetFlix* | | | 3,990 | | | | 647 | | |
| Panera Bread, Cl A* | | | 11,900 | | | | 1,054 | | |
| Peet's Coffee & Tea* | | | 23,550 | | | | 806 | | |
| Polo Ralph Lauren, Cl A | | | 4,430 | | | | 398 | | |
| Ross Stores | | | 43,330 | | | | 2,367 | | |
Shenzhou International Group
Holdings | | | 138,263 | | | | 169 | | |
| Strayer Education | | | 2,300 | | | | 401 | | |
| Tiffany | | | 25,100 | | | | 1,179 | | |
| Tractor Supply | | | 7,230 | | | | 287 | | |
| Weight Watchers International | | | 11,910 | | | | 371 | | |
| Williams-Sonoma | | | 17,810 | | | | 565 | | |
| Yum! Brands | | | 52,720 | | | | 2,428 | | |
| Total Consumer discretionary | | | | | | | 15,929 | | |
| Consumer staples—2.1% | |
| American Dairy* | | | 33,820 | | | | 353 | | |
| Avon Products | | | 15,080 | | | | 484 | | |
| Campbell Soup | | | 14,290 | | | | 511 | | |
| Colgate-Palmolive | | | 5,950 | | | | 457 | | |
| Kellogg | | | 28,070 | | | | 1,418 | | |
| Ralcorp Holdings* | | | 8,750 | | | | 512 | | |
| Wal-Mart Stores | | | 26,540 | | | | 1,421 | | |
| Total Consumer staples | | | | | | | 5,156 | | |
| Energy—2.0% | |
| Chevron | | | 17,310 | | | | 1,403 | | |
| Encana | | | 48,730 | | | | 1,473 | | |
| FMC Technologies* | | | 21,420 | | | | 1,463 | | |
| Noble | | | 13,390 | | | | 452 | | |
| Total Energy | | | | | | | 4,791 | | |
| | | Shares | | Value
(000) | |
| Financials—10.3% | |
Apartment Investment &
Management, Cl A | | | 32,860 | | | $ | 703 | | |
| Arch Capital Group* | | | 16,780 | | | | 1,406 | | |
| Banco Santander Chile ADR | | | 12,190 | | | | 1,177 | | |
| Bank of Montreal | | | 7,040 | | | | 407 | | |
| CBOE Holdings | | | 40,150 | | | | 805 | | |
| City National | | | 13,230 | | | | 702 | | |
| Cullen/Frost Bankers | | | 11,670 | | | | 629 | | |
| Deutsche Bank | | | 45,400 | | | | 2,494 | | |
| Duke Realty | | | 62,770 | | | | 727 | | |
| Equity One | | | 121,240 | | | | 2,046 | | |
| Legg Mason | | | 44,070 | | | | 1,336 | | |
| Lincoln National | | | 31,980 | | | | 765 | | |
| Morgan Stanley | | | 34,730 | | | | 857 | | |
| optionsXpress Holdings* | | | 40,180 | | | | 617 | | |
| PNC Financial Services Group | | | 22,290 | | | | 1,157 | | |
| Prosperity Bancshares | | | 12,670 | | | | 411 | | |
Raiffeisen International Bank
Holding | | | 8,327 | | | | 388 | | |
| Schroders | | | 18,500 | | | | 418 | | |
| SVB Financial Group* | | | 30,060 | | | | 1,272 | | |
| TCF Financial | | | 20,310 | | | | 329 | | |
| TD Ameritrade Holding* | | | 48,010 | | | | 775 | | |
| UBS | | | 125,340 | | | | 2,135 | | |
| Unum Group | | | 115,720 | | | | 2,563 | | |
| Weingarten Realty Investors | | | 20,700 | | | | 452 | | |
| Total Financials | | | | | | | 24,571 | | |
| Health care—7.9% | |
| AstraZeneca ADR | | | 22,610 | | | | 1,146 | | |
| athenahealth* | | | 10,810 | | | | 357 | | |
| Auxilium Pharmaceuticals* | | | 20,610 | | | | 511 | | |
| Biogen Idec* | | | 10,900 | | | | 612 | | |
| Cadence Pharmaceuticals* | | | 28,100 | | | | 234 | | |
| Cardinal Health | | | 18,710 | | | | 618 | | |
| Conceptus* | | | 38,690 | | | | 532 | | |
| Covance* | | | 19,490 | | | | 912 | | |
| Genomic Health* | | | 29,700 | | | | 397 | | |
| Isis Pharmaceuticals* | | | 53,630 | | | | 450 | | |
| Johnson & Johnson | | | 76,800 | | | | 4,758 | | |
| MannKind* | | | 32,920 | | | | 222 | | |
| Mednax* | | | 7,650 | | | | 408 | | |
| Medtronic | | | 24,180 | | | | 812 | | |
| MELA Sciences* | | | 23,585 | | | | 154 | | |
26 TURNER FUNDS 2010 ANNUAL REPORT
Schedule of securities sold short
Turner Spectrum Fund
| | | Shares | | Value
(000) | |
| Momenta Pharmaceuticals* | | | 11,010 | | | $ | 166 | | |
| Myriad Genetics* | | | 111,460 | | | | 1,829 | | |
| NuVasive* | | | 21,740 | | | | 764 | | |
| Perrigo | | | 6,300 | | | | 405 | | |
| Quest Diagnostics | | | 12,300 | | | | 621 | | |
| Roche Holding ADR | | | 41,070 | | | | 1,402 | | |
| Somaxon Pharmaceuticals* | | | 194,070 | | | | 755 | | |
| Stryker | | | 16,260 | | | | 814 | | |
| Total Health care | | | | | | | 18,879 | | |
| Industrials—0.2% | |
| ITT | | | 6,870 | | | | 322 | | |
| Robert Half International | | | 7,870 | | | | 204 | | |
| Total Industrials | | | | | | | 526 | | |
| Information technology—8.7% | |
| Autodesk* | | | 42,180 | | | | 1,348 | | |
| Avago Technologies* | | | 23,510 | | | | 529 | | |
| Celestica* | | | 42,690 | | | | 360 | | |
| Cisco Systems* | | | 21,550 | | | | 472 | | |
| Dolby Laboratories, Cl A* | | | 8,270 | | | | 470 | | |
Fairchild Semiconductor
International, Cl A* | | | 49,190 | | | | 463 | | |
| International Rectifier* | | | 22,090 | | | | 466 | | |
| Intersil, Cl A | | | 35,090 | | | | 410 | | |
| Intuit* | | | 10,260 | | | | 449 | | |
| Kulicke & Soffa Industries* | | | 74,750 | | | | 463 | | |
| Logitech International* | | | 13,920 | | | | 242 | | |
| Marvell Technology Group* | | | 81,450 | | | | 1,426 | | |
| Microsoft | | | 23,010 | | | | 564 | | |
| Molex | | | 17,680 | | | | 370 | | |
| Monolithic Power Systems* | | | 20,290 | | | | 331 | | |
| Monster Worldwide* | | | 12,700 | | | | 165 | | |
| NetEase.com ADR* | | | 14,530 | | | | 573 | | |
| Novellus Systems* | | | 18,430 | | | | 490 | | |
| OpenTable* | | | 14,470 | | | | 985 | | |
| Red Hat* | | | 34,470 | | | | 1,413 | | |
| Research In Motion* | | | 45,420 | | | | 2,212 | | |
| SAP ADR | | | 38,320 | | | | 1,890 | | |
| Sohu.com* | | | 9,550 | | | | 550 | | |
Telefonaktiebolaget LM
Ericsson ADR | | | 40,510 | | | | 444 | | |
| Tyco Electronics | | | 18,090 | | | | 528 | | |
| | | Shares | | Value
(000) | |
| Volterra Semiconductor* | | | 21,790 | | | $ | 469 | | |
| WebMD Health, Cl A* | | | 55,550 | | | | 2,771 | | |
| Total Information technology | | | | | | | 20,853 | | |
| Materials—0.7% | |
| Allegheny Technologies | | | 11,400 | | | | 529 | | |
| Compass Minerals International | | | 4,670 | | | | 358 | | |
| Sherwin-Williams | | | 9,150 | | | | 688 | | |
| Total Materials | | | | | | | 1,575 | | |
Total Common stock
(Proceeds $91,411) | | | | | | | 92,280 | | |
| Exchange traded funds—10.1% | |
| Industrial Select Sector SPDR Fund | | | 40,340 | | | | 1,262 | | |
iShares S&P SmallCap 600/BARRA
Growth Index Fund | | | 45,820 | | | | 2,862 | | |
| Materials Select Sector SPDR Fund | | | 18,780 | | | | 616 | | |
| Pharmaceutical HOLDRs Trust | | | 36,200 | | | | 2,344 | | |
| Powershares QQQ | | | 32,440 | | | | 1,592 | | |
| Semiconductor HOLDRs Trust | | | 39,780 | | | | 1,102 | | |
| SPDR S&P 500 ETF Trust | | | 54,840 | | | | 6,259 | | |
| SPDR S&P Metals & Mining ETF | | | 15,570 | | | | 833 | | |
| SPDR S&P Retail ETF | | | 72,250 | | | | 3,019 | | |
| Vanguard Small-Cap Growth ETF | | | 62,590 | | | | 4,180 | | |
Total Exchange traded funds
(Proceeds $23,274) | | | | | | | 24,069 | | |
Total Securities sold short—48.7%
(Proceeds $114,685) | | | | | | $ | 116,349 | | |
As of September 30, 2010, all of the Fund's investments in securities sold short were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.
Percentages are based on Net Assets of $239,056.**
* Non-income producing security.
** This number is listed in thousands.
ADR — American Depositary Receipt
Cl — Class
ETF — Exchange Traded Fund
S&P — Standard & Poor's
SPDR — Standard & Poor's Depositary Receipts
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2010 ANNUAL REPORT 27
FINANCIAL STATEMENTS
Schedule of open options written
Turner Spectrum Fund
September 30, 2010
| | | Contracts | | Value
(000) | |
| Written call options*—0.1% | |
| Abbott Laboratories, 11/10 at $52.5 | | | 344 | | | $ | 36 | | |
| Bristol-Myers Squibb, 12/10 at $27 | | | 413 | | | | 49 | | |
| Eli Lilly, 01/11 at $36 | | | 870 | | | | 91 | | |
| GlaxoSmithKline, 11/10 at $39 | | | 446 | | | | 67 | | |
| Pfizer, 12/10 at $17 | | | 656 | | | | 53 | | |
Total Open options written
(Premiums received $240) | | | | | | $ | 296 | | |
As of September 30, 2010, all of the Fund's investments in open options written were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.
Percentages are based on Net Assets of $239,056.**
* Non-income producing securities.
** This numbers is listed in thousands.
The accompanying notes are an integral part of the financial statements.
28 TURNER FUNDS 2010 ANNUAL REPORT
Schedule of investments
Turner Concentrated Growth Fund
September 30, 2010
| | | Shares | | Value
(000) | |
| Common stock—95.1%† | |
| Consumer discretionary—13.3% | |
| Guess? | | | 41,600 | | | $ | 1,690 | | |
| Las Vegas Sands* | | | 58,810 | | | | 2,050 | | |
| Starbucks | | | 77,960 | | | | 1,994 | | |
| Total Consumer discretionary | | | | | | | 5,734 | | |
| Energy—7.9% | |
| Cimarex Energy | | | 18,290 | | | | 1,211 | | |
| Halliburton | | | 65,510 | | | | 2,166 | | |
| Total Energy | | | | | | | 3,377 | | |
| Financials—8.2% | |
| CB Richard Ellis Group, Cl A* | | | 99,240 | | | | 1,814 | | |
| Citigroup* | | | 436,850 | | | | 1,704 | | |
| Total Financials | | | | | | | 3,518 | | |
| Health care—8.3% | |
| Intuitive Surgical* | | | 6,710 | | | | 1,904 | | |
| United Therapeutics* | | | 29,420 | | | | 1,648 | | |
| Total Health care | | | | | | | 3,552 | | |
| Industrials—5.0% | |
| Caterpillar | | | 27,330 | | | | 2,150 | | |
| Total Industrials | | | | | | | 2,150 | | |
| Information technology—43.4% | |
| Apple* | | | 9,050 | | | | 2,568 | | |
| ASML Holding, NY Shares | | | 44,880 | | | | 1,335 | | |
| Baidu ADR* | | | 23,060 | | | | 2,366 | | |
| Broadcom, Cl A | | | 59,570 | | | | 2,108 | | |
| F5 Networks* | | | 12,650 | | | | 1,313 | | |
| Lam Research* | | | 37,950 | | | | 1,588 | | |
| Micron Technology* | | | 286,260 | | | | 2,064 | | |
| QUALCOMM | | | 51,300 | | | | 2,315 | | |
| Salesforce.com* | | | 13,930 | | | | 1,557 | | |
| VMware, Cl A* | | | 16,890 | | | | 1,435 | | |
| Total Information technology | | | | | | | 18,649 | | |
| | | Shares | | Value
(000) | |
| Materials—9.0% | |
| Goldcorp | | | 47,930 | | | $ | 2,086 | | |
| Solutia* | | | 110,250 | | | | 1,766 | | |
| Total Materials | | | | | | | 3,852 | | |
Total Common stock
(Cost $33,005) | | | | | | | 40,832 | | |
| Cash equivalent—0.3% | |
BlackRock TempCash Fund
Institutional Shares
0.240%** | | | 131,008 | | | | 131 | | |
Total Cash equivalent
(Cost $131) | | | | | | | 131 | | |
Total Investments—95.4%
(Cost $33,136) | | | | | | $ | 40,963 | | |
As of September 30, 2010, all of the Fund's investments were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.
Percentages are based on Net Assets of $42,924.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2010.
*** This number is listed in thousands.
† More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes.
ADR — American Depositary Receipt
Cl — Class
NY — New York
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2010 ANNUAL REPORT 29
FINANCIAL STATEMENTS
Schedule of investments
Turner Core Growth Fund
September 30, 2010
| | | Shares | | Value
(000) | |
| Common stock—100.4%† | |
| Consumer discretionary—12.6% | |
| Amazon.com* | | | 58,840 | | | $ | 9,241 | | |
| Coach | | | 154,700 | | | | 6,646 | | |
| DIRECTV, Cl A* | | | 144,920 | | | | 6,033 | | |
| Dollar Tree* | | | 78,255 | | | | 3,816 | | |
| Guess? | | | 96,105 | | | | 3,905 | | |
| Las Vegas Sands* | | | 301,910 | | | | 10,522 | | |
| priceline.com* | | | 11,630 | | | | 4,051 | | |
| Pulte Group* | | | 818,190 | | | | 7,167 | | |
| Starbucks | | | 310,440 | | | | 7,941 | | |
Starwood Hotels & Resorts
Worldwide | | | 122,640 | | | | 6,445 | | |
| Urban Outfitters* | | | 75,460 | | | | 2,372 | | |
| Total Consumer discretionary | | | | | | | 68,139 | | |
| Consumer staples—9.2% | |
| Archer-Daniels-Midland | | | 323,620 | | | | 10,330 | | |
| Mead Johnson Nutrition, Cl A | | | 187,040 | | | | 10,645 | | |
| PepsiCo | | | 336,950 | | | | 22,387 | | |
| Whole Foods Market* | | | 174,869 | | | | 6,489 | | |
| Total Consumer staples | | | | | | | 49,851 | | |
| Energy—11.2% | |
| Cimarex Energy | | | 81,370 | | | | 5,385 | | |
| Concho Resources* | | | 80,850 | | | | 5,350 | | |
| ConocoPhillips | | | 208,330 | | | | 11,964 | | |
| First Solar* # | | | 28,700 | | | | 4,229 | | |
| Halliburton | | | 423,390 | | | | 14,002 | | |
| National Oilwell Varco | | | 87,730 | | | | 3,901 | | |
| Occidental Petroleum | | | 137,790 | | | | 10,789 | | |
| QEP Resources | | | 165,100 | | | | 4,976 | | |
| Total Energy | | | | | | | 60,596 | | |
| Financials—14.1% | |
| American Express | | | 325,600 | | | | 13,685 | | |
| CB Richard Ellis Group, Cl A* | | | 312,620 | | | | 5,715 | | |
| Citigroup* | | | 2,326,800 | | | | 9,074 | | |
| Digital Realty Trust # | | | 95,830 | | | | 5,913 | | |
| HDFC Bank ADR # | | | 27,020 | | | | 4,982 | | |
| Health Care REIT | | | 59,770 | | | | 2,829 | | |
| Host Hotels & Resorts | | | 393,270 | | | | 5,695 | | |
| IntercontinentalExchange* | | | 71,550 | | | | 7,493 | | |
| MSCI, Cl A* | | | 108,570 | | | | 3,606 | | |
| | | Shares | | Value
(000) | |
| Simon Property Group | | | 92,230 | | | $ | 8,553 | | |
| T. Rowe Price Group | | | 177,620 | | | | 8,892 | | |
| Total Financials | | | | | | | 76,437 | | |
| Health care—11.3% | |
| Abbott Laboratories | | | 221,910 | | | | 11,593 | | |
| Alexion Pharmaceuticals* | | | 84,520 | | | | 5,440 | | |
| Allergan | | | 124,580 | | | | 8,288 | | |
| Celgene* | | | 74,560 | | | | 4,296 | | |
| Cerner* | | | 46,380 | | | | 3,895 | | |
| Express Scripts* | | | 112,490 | | | | 5,478 | | |
| Hospira* | | | 75,964 | | | | 4,331 | | |
| Human Genome Sciences* | | | 149,959 | | | | 4,467 | | |
| Intuitive Surgical* | | | 25,278 | | | | 7,172 | | |
| Universal Health Services, Cl B | | | 156,452 | | | | 6,080 | | |
| Total Health care | | | | | | | 61,040 | | |
| Industrials—7.4% | |
| Caterpillar | | | 143,630 | | | | 11,301 | | |
| Cummins | | | 137,890 | | | | 12,490 | | |
| Deere | | | 106,850 | | | | 7,456 | | |
| Delta Air Lines* | | | 341,080 | | | | 3,970 | | |
| Fastenal | | | 89,990 | | | | 4,787 | | |
| Total Industrials | | | | | | | 40,004 | | |
| Information technology—25.0% | |
| Apple* | | | 116,720 | | | | 33,119 | | |
| ASML Holding, NY Shares | | | 237,750 | | | | 7,068 | | |
| Baidu ADR* | | | 51,030 | | | | 5,237 | | |
| Broadcom, Cl A | | | 288,080 | | | | 10,195 | | |
| F5 Networks* | | | 78,900 | | | | 8,190 | | |
| Factset Research Systems | | | 74,769 | | | | 6,066 | | |
Fidelity National Information
Services | | | 322,740 | | | | 8,756 | | |
| Lam Research* | | | 322,930 | | | | 13,515 | | |
| Micron Technology* | | | 393,450 | | | | 2,837 | | |
| Motorola* | | | 659,430 | | | | 5,625 | | |
| NetApp* | | | 90,570 | | | | 4,510 | | |
| QUALCOMM | | | 296,580 | | | | 13,382 | | |
| Salesforce.com* | | | 67,490 | | | | 7,545 | | |
| SanDisk* | | | 99,590 | | | | 3,650 | | |
| VMware, Cl A* | | | 66,930 | | | | 5,685 | | |
| Total Information technology | | | | | | | 135,380 | | |
30 TURNER FUNDS 2010 ANNUAL REPORT
Schedule of investments
Turner Core Growth Fund
| | | Shares | | Value
(000) | |
| Materials—3.1% | |
| Cliffs Natural Resources | | | 70,970 | | | $ | 4,536 | | |
| Goldcorp | | | 199,950 | | | | 8,702 | | |
| United States Steel | | | 79,030 | | | | 3,465 | | |
| Total Materials | | | | | | | 16,703 | | |
| Telecommunication services—5.3% | |
| America Movil, Ser L ADR | | | 196,610 | | | | 10,485 | | |
| NII Holdings* | | | 224,750 | | | | 9,237 | | |
| Sprint Nextel* | | | 1,938,110 | | | | 8,974 | | |
| Total Telecommunication services | | | | | | | 28,696 | | |
| Utilities—1.2% | |
| Questar | | | 391,235 | | | | 6,858 | | |
| Total Utilities | | | | | | | 6,858 | | |
Total Common stock
(Cost $442,376) | | | | | | | 543,704 | | |
| Cash equivalent—2.0% | |
BlackRock TempCash Fund
Institutional Shares
0.240%** (1) | | | 10,643,165 | | | | 10,643 | | |
Total Cash equivalent
(Cost $10,643) | | | | | | | 10,643 | | |
Total Investments—102.4%
(Cost $453,019) | | | | | | $ | 554,347 | | |
As of September 30, 2010, all of the Fund's investments were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.
Percentages are based on Net Assets of $541,400.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2010.
*** This number is listed in thousands.
† More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes.
# Security fully or partially on loan at September 30, 2010. The total value of securities on loan at September 30, 2010, was $10,377.*** Certain of these securities may have been sold prior to period end and are included in receivable for investment securities sold on the Statement of Assets and Liabilities.
(1) The Fund lends securities in its portfolio pursuant to a securities lending agreement ("Lending Agreement") with Morgan Stanley. Unless otherwise agreed, security loans made pursuant to the Lending Agreement are required at all times to be secured by collateral equal to at least 100% of the market value of the securities loaned. Cash collateral received is invested pursuant to the terms of the Lending Agreement in the BlackRock TempCash Fund, Institutional Shares, a money market fund. All such investments are made at the risk of the Fund. As such, the Fund is liable for investment losses. The Fund receives an annual fee for its participation in the Lending Agreement based on projected lending activity. This security was purchased with cash collateral received from securities lending. The total value of such security at September 30, 2010 was $10,643.***
ADR — American Depositary Receipt
Cl — Class
NY — New York
REIT — Real Estate Investment Trust
Ser — Series
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2010 ANNUAL REPORT 31
FINANCIAL STATEMENTS
Schedule of investments
Turner Emerging Growth Fund
September 30, 2010
| | | Shares | | Value
(000) | |
| Common 92.0% | |
| Consumer discretionary—17.2% | |
| 7 Days Group Holdings ADR* | | | 298,630 | | | $ | 5,372 | | |
| AnnTaylor Stores* | | | 205,390 | | | | 4,157 | | |
| Asbury Automotive Group* | | | 239,530 | | | | 3,370 | | |
| Boyd Gaming* # | | | 84,630 | | | | 614 | | |
| Buffalo Wild Wings* # | | | 113,330 | | | | 5,427 | | |
| California Pizza Kitchen* | | | 241,630 | | | | 4,122 | | |
| Chico's FAS | | | 72,390 | | | | 762 | | |
| Children's Place Retail Stores* | | | 76,120 | | | | 3,712 | | |
| Citi Trends* | | | 204,730 | | | | 4,957 | | |
| Cooper Tire & Rubber | | | 256,400 | | | | 5,033 | | |
| Cracker Barrel Old Country Store | | | 83,110 | | | | 4,219 | | |
| CROCS* | | | 56,950 | | | | 741 | | |
| Deckers Outdoor* | | | 287,210 | | | | 14,349 | | |
| G-III Apparel Group* | | | 61,180 | | | | 1,920 | | |
| Imax* | | | 128,030 | | | | 2,159 | | |
| Jo-Ann Stores* | | | 58,660 | | | | 2,613 | | |
| JOS A Bank Clothiers* | | | 130,570 | | | | 5,564 | | |
| Ryland Group | | | 199,420 | | | | 3,574 | | |
| Steven Madden* | | | 78,330 | | | | 3,216 | | |
| Ulta Salon Cosmetics & Fragrance* | | | 64,640 | | | | 1,887 | | |
| Total Consumer discretionary | | | | | | | 77,768 | | |
| Consumer staples—4.6% | |
| Boston Beer, Cl A* | | | 37,240 | | | | 2,490 | | |
| Green Mountain Coffee Roasters* | | | 148,275 | | | | 4,625 | | |
| TreeHouse Foods* | | | 149,367 | | | | 6,886 | | |
| United Natural Foods* | | | 207,908 | | | | 6,890 | | |
| Total Consumer staples | | | | | | | 20,891 | | |
| Energy—5.9% | |
| Brigham Exploration* | | | 269,705 | | | | 5,057 | | |
| Carrizo Oil & Gas* | | | 172,788 | | | | 4,137 | | |
| James River Coal* | | | 193,460 | | | | 3,391 | | |
| Key Energy Services* | | | 407,080 | | | | 3,871 | | |
| Lufkin Industries | | | 42,930 | | | | 1,885 | | |
| Rex Energy* | | | 143,400 | | | | 1,836 | | |
| Swift Energy* | | | 99,980 | | | | 2,807 | | |
| T-3 Energy Services* | | | 137,710 | | | | 3,601 | | |
| Total Energy | | | | | | | 26,585 | | |
| Financials—5.7% | |
| American Physicians Capital | | | 215,530 | | | | 8,936 | | |
| Harleysville Group | | | 85,890 | | | | 2,816 | | |
| | | Shares | | Value
(000) | |
| IBERIABANK | | | 45,586 | | | $ | 2,279 | | |
| Oriental Financial Group | | | 198,220 | | | | 2,636 | | |
| Radian Group | | | 684,100 | | | | 5,350 | | |
| Sunstone Hotel Investors* | | | 256,190 | | | | 2,323 | | |
| Umpqua Holdings | | | 135,180 | | | | 1,533 | | |
| Total Financials | | | | | | | 25,873 | | |
| Health care—17.3% | |
| Acorda Therapeutics* | | | 70,732 | | | | 2,335 | | |
| AGA Medical Holdings* # | | | 77,267 | | | | 1,078 | | |
| Alexion Pharmaceuticals* | | | 137,620 | | | | 8,857 | | |
| AMERIGROUP* | | | 177,610 | | | | 7,543 | | |
| Ardea Biosciences* | | | 70,630 | | | | 1,625 | | |
| Bio-Reference Labs* | | | 127,170 | | | | 2,653 | | |
| Catalyst Health Solutions* | | | 113,300 | | | | 3,989 | | |
| DexCom* | | | 114,500 | | | | 1,514 | | |
| HeartWare International* # | | | 21,860 | | | | 1,503 | | |
| HMS Holdings* | | | 62,400 | | | | 3,678 | | |
| ICON ADR* | | | 220,670 | | | | 4,771 | | |
| Impax Laboratories* | | | 112,670 | | | | 2,226 | | |
| Kendle International* | | | 204,234 | | | | 1,903 | | |
| Molina Healthcare* | | | 96,580 | | | | 2,607 | | |
| Orthofix International* | | | 266,610 | | | | 8,377 | | |
| Par Pharmaceutical* | | | 52,250 | | | | 1,520 | | |
| Parexel International* | | | 182,214 | | | | 4,215 | | |
| Pharmasset* | | | 87,280 | | | | 2,575 | | |
| PSS World Medical* | | | 76,000 | | | | 1,625 | | |
| Quality Systems # | | | 65,460 | | | | 4,341 | | |
| Questcor Pharmaceuticals* | | | 271,300 | | | | 2,691 | | |
| SXC Health Solutions* | | | 116,194 | | | | 4,237 | | |
| Volcano* | | | 104,530 | | | | 2,716 | | |
| Total Health care | | | | | | | 78,579 | | |
| Industrials—15.1% | |
| American Science & Engineering | | | 26,089 | | | | 1,921 | | |
| ArvinMeritor* | | | 325,250 | | | | 5,054 | | |
| Bucyrus International, Cl A | | | 162,591 | | | | 11,276 | | |
| Clean Harbors* | | | 63,930 | | | | 4,331 | | |
| Consolidated Graphics* | | | 59,937 | | | | 2,484 | | |
| Copa Holdings, Cl A | | | 72,421 | | | | 3,904 | | |
| EnPro Industries* | | | 134,010 | | | | 4,192 | | |
| ESCO Technologies | | | 94,340 | | | | 3,138 | | |
| Genesee & Wyoming, Cl A* | | | 155,525 | | | | 6,748 | | |
| HUB Group, Cl A* | | | 152,408 | | | | 4,460 | | |
| Huron Consulting Group* | | | 137,160 | | | | 3,016 | | |
32 TURNER FUNDS 2010 ANNUAL REPORT
Schedule of investments
Turner Emerging Growth Fund
| | | Shares | | Value
(000) | |
| Kforce* | | | 302,990 | | | $ | 4,157 | | |
| Middleby* | | | 28,800 | | | | 1,826 | | |
| Triumph Group | | | 111,866 | | | | 8,344 | | |
| United Stationers* | | | 63,812 | | | | 3,415 | | |
| Total Industrials | | | | | | | 68,266 | | |
| Information technology—19.6% | |
| Acme Packet* | | | 93,524 | | | | 3,548 | | |
| ANSYS* | | | 172,350 | | | | 7,282 | | |
| Ariba* | | | 399,180 | | | | 7,545 | | |
| Aruba Networks* | | | 189,110 | | | | 4,036 | | |
| Atheros Communications* | | | 63,510 | | | | 1,674 | | |
| Blue Coat Systems* | | | 157,480 | | | | 3,789 | | |
| Bottomline Technologies* | | | 117,242 | | | | 1,801 | | |
| Camelot Information Systems* | | | 210,940 | | | | 3,706 | | |
| Cavium Networks* | | | 110,200 | | | | 3,169 | | |
| Cirrus Logic* | | | 254,280 | | | | 4,536 | | |
| Cogo Group* | | | 190,460 | | | | 1,177 | | |
| Entropic Communications* | | | 397,960 | | | | 3,820 | | |
| Hittite Microwave* | | | 95,140 | | | | 4,534 | | |
| Kenexa* | | | 148,200 | | | | 2,596 | | |
| Manhattan Associates* | | | 155,610 | | | | 4,567 | | |
| MAXIMUS | | | 54,510 | | | | 3,357 | | |
| Netlogic Microsystems* | | | 109,490 | | | | 3,020 | | |
| Netscout Systems* | | | 124,740 | | | | 2,558 | | |
| Omnivision Technologies* | | | 137,240 | | | | 3,162 | | |
| Plexus* | | | 96,850 | | | | 2,842 | | |
| Power Integrations | | | 79,030 | | | | 2,512 | | |
| Power-One* | | | 394,140 | | | | 3,583 | | |
| Radiant Systems* | | | 195,300 | | | | 3,340 | | |
| RealD* | | | 58,054 | | | | 1,073 | | |
| Synchronoss Technologies* | | | 149,940 | | | | 2,670 | | |
| Terremark Worldwide* | | | 132,170 | | | | 1,367 | | |
| Xyratex* | | | 121,956 | | | | 1,810 | | |
| Total Information technology | | | | | | | 89,074 | | |
| Materials—6.3% | |
| A Schulman | | | 66,580 | | | | 1,342 | | |
| Domtar | | | 76,050 | | | | 4,911 | | |
| Globe Specialty Metals | | | 242,450 | | | | 3,404 | | |
| Huntsman | | | 553,627 | | | | 6,400 | | |
| Solutia* | | | 320,245 | | | | 5,130 | | |
| Walter Energy | | | 92,350 | | | | 7,507 | | |
| Total Materials | | | | | | | 28,694 | | |
| | | Shares | | Value
(000) | |
| Utilities—0.3% | |
| Artesian Resources, Cl A | | | 61,185 | | | $ | 1,167 | | |
| Total Utilities | | | | | | | 1,167 | | |
Total Common stock
(Cost $312,106) | | | | | | | 416,897 | | |
| Exchange traded fund—2.5% | |
iShares Russell 2000 Growth
Index Fund # | | | 153,790 | | | | 11,494 | | |
Total Exchange traded fund
(Cost $10,606) | | | | | | | 11,494 | | |
| Cash equivalent—6.4% | |
BlackRock TempCash Fund
Institutional Shares
0.240%** (1) | | | 29,120,974 | | | | 29,121 | | |
Total Cash equivalent
(Cost $29,121) | | | | | | | 29,121 | | |
Total Investments—100.9%
(Cost $351,833) | | | | | | $ | 457,512 | | |
As of September 30, 2010, all of the Fund's investments were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.
Percentages are based on Net Assets of $453,268.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2010.
*** This number is listed in thousands.
# Security fully or partially on loan at September 30, 2010. The total value of securities on loan at September 30, 2010, was $15,258.*** Certain of these securities may have been sold prior to period end and are included in receivable for investment securities sold on the Statement of Assets and Liabilities.
(1) The Fund lends securities in its portfolio pursuant to a securities lending agreement ("Lending Agreement") with Morgan Stanley. Unless otherwise agreed, security loans made pursuant to the Lending Agreement are required at all times to be secured by collateral equal to at least 100% of the market value of the securities loaned. Cash collateral received is invested pursuant to the terms of the Lending Agreement in the BlackRock TempCash Fund, Institutional Shares, a money market fund. All such investments are made at the risk of the Fund. As such, the Fund is liable for investment losses. The Fund receives an annual fee for its participation in the Lending Agreement based on projected lending activity. A partial position of this security was purchased with cash collateral received from securities lending. The total value of such security at September 30, 2010 was $15,714.***
ADR — American Depositary Receipt
Cl — Class
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2010 ANNUAL REPORT 33
FINANCIAL STATEMENTS
Schedule of investments
Turner Large Cap Growth Fund
September 30, 2010
| | | Shares | | Value
(000) | |
| Common stock—99.4%† | |
| Consumer discretionary—15.7% | |
| Amazon.com* | | | 13,030 | | | $ | 2,046 | | |
| Coach | | | 38,950 | | | | 1,673 | | |
| DIRECTV, Cl A* | | | 40,180 | | | | 1,673 | | |
| Dollar Tree* | | | 22,195 | | | | 1,082 | | |
| Guess? | | | 35,820 | | | | 1,455 | | |
| Las Vegas Sands* | | | 67,200 | | | | 2,342 | | |
| priceline.com* | | | 3,900 | | | | 1,359 | | |
| Pulte Group* | | | 109,450 | | | | 959 | | |
| Starbucks | | | 99,830 | | | | 2,554 | | |
Starwood Hotels & Resorts
Worldwide | | | 44,650 | | | | 2,346 | | |
| Urban Outfitters* | | | 41,000 | | | | 1,289 | | |
| Total Consumer discretionary | | | | | | | 18,778 | | |
| Consumer staples—9.1% | |
| Archer-Daniels-Midland | | | 56,880 | | | | 1,816 | | |
| Mead Johnson Nutrition, Cl A | | | 34,320 | | | | 1,953 | | |
| PepsiCo | | | 81,740 | | | | 5,431 | | |
| Whole Foods Market* # | | | 45,790 | | | | 1,699 | | |
| Total Consumer staples | | | | | | | 10,899 | | |
| Energy—11.2% | |
| Cimarex Energy | | | 25,480 | | | | 1,686 | | |
| Concho Resources* | | | 20,710 | | | | 1,370 | | |
| ConocoPhillips | | | 45,600 | | | | 2,619 | | |
| First Solar* # | | | 6,310 | | | | 930 | | |
| Halliburton | | | 103,740 | | | | 3,431 | | |
| National Oilwell Varco | | | 25,520 | | | | 1,135 | | |
| Occidental Petroleum | | | 27,390 | | | | 2,144 | | |
| Total Energy | | | | | | | 13,315 | | |
| Financials—5.6% | |
| American Express | | | 49,600 | | | | 2,084 | | |
| Bank of Nova Scotia | | | 20,750 | | | | 1,106 | | |
| CB Richard Ellis Group, Cl A* | | | 74,500 | | | | 1,362 | | |
| Citigroup* | | | 259,430 | | | | 1,012 | | |
| IntercontinentalExchange* | | | 10,800 | | | | 1,131 | | |
| Total Financials | | | | | | | 6,695 | | |
| Health care—9.2% | |
| Abbott Laboratories | | | 48,580 | | | | 2,538 | | |
| Allergan | | | 23,920 | | | | 1,591 | | |
| Celgene* | | | 19,420 | | | | 1,119 | | |
| | | Shares | | Value
(000) | |
| Cerner* | | | 13,070 | | | $ | 1,098 | | |
| Express Scripts* | | | 24,390 | | | | 1,188 | | |
| Human Genome Sciences* | | | 30,170 | | | | 899 | | |
| Intuitive Surgical* | | | 4,150 | | | | 1,177 | | |
| Universal Health Services, Cl B | | | 34,380 | | | | 1,336 | | |
| Total Health care | | | | | | | 10,946 | | |
| Industrials—9.0% | |
| Caterpillar | | | 35,020 | | | | 2,756 | | |
| CSX | | | 24,330 | | | | 1,346 | | |
| Cummins | | | 30,220 | | | | 2,737 | | |
| Deere | | | 22,770 | | | | 1,589 | | |
| Delta Air Lines* | | | 90,800 | | | | 1,057 | | |
| Fastenal # | | | 24,240 | | | | 1,289 | | |
| Total Industrials | | | | | | | 10,774 | | |
| Information technology—34.9% | |
| Acme Packet* | | | 15,600 | | | | 592 | | |
| Akamai Technologies* | | | 15,790 | | | | 792 | | |
| Apple* | | | 30,780 | | | | 8,734 | | |
| ASML Holding, NY Shares | | | 54,930 | | | | 1,633 | | |
| Atheros Communications* | | | 31,590 | | | | 832 | | |
| Baidu ADR* | | | 16,440 | | | | 1,687 | | |
| Broadcom, Cl A | | | 103,210 | | | | 3,653 | | |
Cognizant Technology
Solutions, Cl A* | | | 40,810 | | | | 2,631 | | |
| Cypress Semiconductor* | | | 109,070 | | | | 1,372 | | |
| F5 Networks* | | | 18,670 | | | | 1,938 | | |
| Lam Research* | | | 64,120 | | | | 2,684 | | |
| Micron Technology* | | | 142,755 | | | | 1,029 | | |
| Motorola* | | | 305,600 | | | | 2,607 | | |
| NetApp* | | | 34,990 | | | | 1,742 | | |
| Netlogic Microsystems* | | | 50,920 | | | | 1,404 | | |
| QUALCOMM | | | 66,000 | | | | 2,978 | | |
| Salesforce.com* | | | 17,440 | | | | 1,950 | | |
| SanDisk* | | | 35,150 | | | | 1,288 | | |
| VMware, Cl A* | | | 25,000 | | | | 2,124 | | |
| Total Information technology | | | | | | | 41,670 | | |
| Materials—3.5% | |
| Cliffs Natural Resources | | | 15,590 | | | | 997 | | |
| Goldcorp | | | 46,560 | | | | 2,026 | | |
| United States Steel | | | 27,470 | | | | 1,204 | | |
| Total Materials | | | | | | | 4,227 | | |
34 TURNER FUNDS 2010 ANNUAL REPORT
Schedule of investments
Turner Large Cap Growth Fund
| | | Shares | | Value
(000) | |
| Telecommunication services—1.2% | |
| American Tower, Cl A* | | | 28,670 | | | $ | 1,470 | | |
| Total Telecommunication services | | | | | 1,470 | | |
Total Common stock
(Cost $99,119) | | | | | 118,774 | | |
| Cash equivalent—4.0% | |
BlackRock TempCash Fund
Institutional Shares
0.240%** (1) | | | 4,759,963 | | | | 4,760 | | |
Total Cash equivalent
(Cost $4,760) | | | | | 4,760 | | |
Total Investments—103.4%
(Cost $103,879) | | | | $ | 123,534 | | |
As of September 30, 2010, all of the Fund's investments were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.
Percentages are based on Net Assets of $119,521.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2010.
*** This number is listed in thousands.
† More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes.
# Security fully or partially on loan at September 30, 2010. The total value of securities on loan at September 30, 2010, was $3,911.*** Certain of these securities may have been sold prior to period end and are included in receivable for investment securities sold on the Statement of Assets and Liabilities.
(1) The Fund lends securities in its portfolio pursuant to a securities lending agreement ("Lending Agreement") with Morgan Stanley. Unless otherwise agreed, security loans made pursuant to the Lending Agreement are required at all times to be secured by collateral equal to at least 100% of the market value of the securities loaned. Cash collateral received is invested pursuant to the terms of the Lending Agreement in the BlackRock TempCash Fund, Institutional Shares, a money market fund. All such investments are made at the risk of the Fund. As such, the Fund is liable for investment losses. The Fund receives an annual fee for its participation in the Lending Agreement based on projected lending activity. A partial position of this security was purchased with cash collateral received from securities lending. The total value of such security at September 30, 2010 was $4,028.***
ADR — American Depositary Receipt
Cl — Class
NY — New York
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2010 ANNUAL REPORT 35
FINANCIAL STATEMENTS
Schedule of investments
Turner Midcap Growth Fund
September 30, 2010
| | | Shares | | Value
(000) | |
| Common stock—99.3%† | |
| Consumer discretionary—18.6% | |
| Abercrombie & Fitch, Cl A | | | 331,830 | | | $ | 13,048 | | |
| BorgWarner* | | | 228,810 | | | | 12,040 | | |
| Coach | | | 345,020 | | | | 14,822 | | |
| Dick's Sporting Goods* | | | 216,090 | | | | 6,059 | | |
| Dollar Tree* | | | 226,824 | | | | 11,060 | | |
| Focus Media Holding ADR* | | | 527,087 | | | | 12,808 | | |
| Guess? | | | 339,872 | | | | 13,809 | | |
| Interpublic Group of Cos.* | | | 1,107,880 | | | | 11,112 | | |
| Nordstrom | | | 375,570 | | | | 13,971 | | |
| PF Chang's China Bistro | | | 129,960 | | | | 6,004 | | |
Starwood Hotels & Resorts
Worldwide | | | 393,830 | | | | 20,696 | | |
| Urban Outfitters* | | | 376,064 | | | | 11,824 | | |
| WMS Industries* | | | 290,655 | | | | 11,065 | | |
| Wynn Resorts # | | | 153,185 | | | | 13,292 | | |
| Total Consumer discretionary | | | | | | | 171,610 | | |
| Consumer staples—5.4% | |
Green Mountain Coffee
Roasters* # | | | 290,830 | | | | 9,071 | | |
| Hansen Natural* | | | 118,502 | | | | 5,525 | | |
| Hershey | | | 187,170 | | | | 8,907 | | |
| Mead Johnson Nutrition, Cl A | | | 247,920 | | | | 14,109 | | |
| Whole Foods Market* # | | | 313,450 | | | | 11,632 | | |
| Total Consumer staples | | | | | | | 49,244 | | |
| Energy—6.4% | |
| Alpha Natural Resources* | | | 213,840 | | | | 8,800 | | |
| Cameron International* | | | 183,740 | | | | 7,894 | | |
| Cimarex Energy | | | 156,550 | | | | 10,360 | | |
| Concho Resources* | | | 182,640 | | | | 12,085 | | |
| First Solar* # | | | 41,720 | | | | 6,147 | | |
| QEP Resources | | | 174,736 | | | | 5,267 | | |
| Whiting Petroleum* | | | 84,420 | | | | 8,063 | | |
| Total Energy | | | | | | | 58,616 | | |
| Financials—8.1% | |
| CB Richard Ellis Group, Cl A* | | | 642,800 | | | | 11,750 | | |
| Digital Realty Trust # | | | 209,490 | | | | 12,926 | | |
| Discover Financial Services | | | 398,530 | | | | 6,648 | | |
| IntercontinentalExchange* | | | 142,020 | | | | 14,872 | | |
| Invesco | | | 218,190 | | | | 4,632 | | |
| | | Shares | | Value
(000) | |
| MSCI, Cl A* | | | 246,740 | | | $ | 8,194 | | |
| T. Rowe Price Group | | | 305,649 | | | | 15,302 | | |
| Total Financials | | | | | | | 74,324 | | |
| Health care—12.6% | |
| Alexion Pharmaceuticals* | | | 246,057 | | | | 15,836 | | |
| AMERIGROUP* | | | 116,825 | | | | 4,962 | | |
| AmerisourceBergen, Cl A | | | 447,268 | | | | 13,713 | | |
| DaVita* | | | 75,469 | | | | 5,210 | | |
| Emergency Medical Services, Cl A* | | | 16,540 | | | | 881 | | |
| Henry Schein* | | | 135,004 | | | | 7,908 | | |
| Hospira* | | | 162,920 | | | | 9,288 | | |
| Human Genome Sciences* | | | 271,790 | | | | 8,097 | | |
| Intuitive Surgical* | | | 45,702 | | | | 12,967 | | |
| Onyx Pharmaceuticals* | | | 174,686 | | | | 4,608 | | |
| United Therapeutics* | | | 230,696 | | | | 12,922 | | |
| Universal Health Services, Cl B | | | 310,340 | | | | 12,060 | | |
Valeant Pharmaceuticals
International* # | | | 317,770 | | | | 7,960 | | |
| Total Health care | | | | | | | 116,412 | | |
| Industrials—10.6% | |
| Canadian Pacific Railway | | | 152,680 | | | | 9,303 | | |
| Continental Airlines, Cl B* | | | 554,672 | | | | 13,778 | | |
| Cummins | | | 237,600 | | | | 21,522 | | |
| Fastenal # | | | 242,780 | | | | 12,913 | | |
| Goodrich | | | 218,628 | | | | 16,119 | | |
| Joy Global | | | 239,942 | | | | 16,873 | | |
| Parker Hannifin | | | 105,470 | | | | 7,389 | | |
| Total Industrials | | | | | | | 97,897 | | |
| Information technology—27.0% | |
| Acme Packet* | | | 195,070 | | | | 7,401 | | |
| Akamai Technologies* | | | 180,950 | | | | 9,080 | | |
| Aruba Networks* | | | 438,050 | | | | 9,348 | | |
| ASML Holding, NY Shares | | | 437,580 | | | | 13,009 | | |
| Atheros Communications* | | | 260,128 | | | | 6,855 | | |
| Broadcom, Cl A | | | 310,931 | | | | 11,004 | | |
| Citrix Systems* | | | 172,450 | | | | 11,768 | | |
| Cypress Semiconductor* | | | 904,630 | | | | 11,380 | | |
| F5 Networks* | | | 249,464 | | | | 25,897 | | |
Fidelity National Information
Services | | | 326,910 | | | | 8,869 | | |
| GSI Commerce* | | | 384,645 | | | | 9,501 | | |
| Lam Research* | | | 389,035 | | | | 16,281 | | |
36 TURNER FUNDS 2010 ANNUAL REPORT
Schedule of investments
Turner Midcap Growth Fund
| | | Shares | | Value
(000) | |
| LogMeIn* | | | 168,410 | | | $ | 6,059 | | |
| MercadoLibre* # | | | 77,480 | | | | 5,592 | | |
| Micron Technology* | | | 1,245,890 | | | | 8,983 | | |
| NetApp* | | | 328,490 | | | | 16,356 | | |
| Netlogic Microsystems* # | | | 434,820 | | | | 11,992 | | |
| Salesforce.com* | | | 155,180 | | | | 17,349 | | |
| SanDisk* | | | 304,860 | | | | 11,173 | | |
| SuccessFactors* | | | 311,880 | | | | 7,831 | | |
Varian Semiconductor
Equipment Associates* | | | 517,961 | | | | 14,907 | | |
| VeriSign* | | | 240,890 | | | | 7,646 | | |
| Total Information technology | | | | | | | 248,281 | | |
| Materials—7.7% | |
| CF Industries Holdings | | | 103,390 | | | | 9,873 | | |
| Cliffs Natural Resources | | | 151,385 | | | | 9,677 | | |
| Ecolab | | | 217,617 | | | | 11,042 | | |
| Silver Wheaton* | | | 258,880 | | | | 6,899 | | |
| United States Steel # | | | 248,360 | | | | 10,888 | | |
| Valspar | | | 280,275 | | | | 8,927 | | |
| Walter Energy | | | 168,935 | | | | 13,733 | | |
| Total Materials | | | | | | | 71,039 | | |
| Telecommunication services—2.1% | |
| Crown Castle International* | | | 443,830 | | | | 19,595 | | |
| Total Telecommunication services | | | | | | | 19,595 | | |
| Utilities—0.8% | |
| Questar | | | 395,536 | | | | 6,934 | | |
| Total Utilities | | | | | | | 6,934 | | |
Total Common stock
(Cost $652,648) | | | | | | | 913,952 | | |
| Cash equivalent—9.2% | |
BlackRock TempCash Fund
Institutional Shares
0.240%** (1) | | | 84,571,080 | | | | 84,571 | | |
Total Cash equivalent
(Cost $84,571) | | | | | | | 84,571 | | |
Total Investments—108.5%
(Cost $737,219) | | | | | | $ | 998,523 | | |
As of September 30, 2010, all of the Fund's investments were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.
Percentages are based on Net Assets of $920,695.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2010.
*** This number is listed in thousands.
† More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes.
# Security fully or partially on loan at September 30, 2010. The total value of securities on loan at September 30, 2010, was $81,995.*** Certain of these securities may have been sold prior to period end and are included in receivable for investment securities sold on the Statement of Assets and Liabilities.
(1) The Fund lends securities in its portfolio pursuant to a securities lending agreement ("Lending Agreement") with Morgan Stanley. Unless otherwise agreed, security loans made pursuant to the Lending Agreement are required at all times to be secured by collateral equal to at least 100% of the market value of the securities loaned. Cash collateral received is invested pursuant to the terms of the Lending Agreement in the BlackRock TempCash Fund, Institutional Shares, a money market fund. All such investments are made at the risk of the Fund. As such, the Fund is liable for investment losses. The Fund receives an annual fee for its participation in the Lending Agreement based on projected lending activity. This security was purchased with cash collateral received from securities lending. The total value of such security at September 30, 2010 was $84,571.***
ADR — American Depositary Receipt
Cl — Class
NY — New York
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2010 ANNUAL REPORT 37
FINANCIAL STATEMENTS
Schedule of investments
Turner New Enterprise Fund
September 30, 2010
| | | Shares | | Value
(000) | |
| Common stock—97.4%† | |
| Consumer discretionary—12.4% | |
| Guess? | | | 21,680 | | | $ | 881 | | |
| Las Vegas Sands* | | | 20,200 | | | | 704 | | |
| Tenneco* | | | 21,370 | | | | 619 | | |
| WMS Industries* | | | 17,830 | | | | 679 | | |
| Total Consumer discretionary | | | | | | | 2,883 | | |
| Consumer staples—6.2% | |
Green Mountain Coffee
Roasters* # | | | 29,440 | | | | 918 | | |
| Whole Foods Market* # | | | 13,980 | | | | 519 | | |
| Total Consumer staples | | | | | | | 1,437 | | |
| Energy—7.9% | |
| Cimarex Energy | | | 12,880 | | | | 853 | | |
| Concho Resources* | | | 14,950 | | | | 989 | | |
| Total Energy | | | | | | | 1,842 | | |
| Financials—11.0% | |
| CB Richard Ellis Group, Cl A* | | | 40,522 | | | | 741 | | |
| Citigroup* | | | 131,050 | | | | 511 | | |
| National Financial Partners* | | | 60,940 | | | | 772 | | |
| Prudential Financial | | | 9,710 | | | | 526 | | |
| Total Financials | | | | | | | 2,550 | | |
| Health care—8.1% | |
| Alexion Pharmaceuticals* | | | 15,690 | | | | 1,010 | | |
| Edwards Lifesciences* | | | 13,100 | | | | 878 | | |
| Total Health care | | | | | | | 1,888 | | |
| Information technology—45.4% | |
| Apple* | | | 3,990 | | | | 1,132 | | |
| Aruba Networks* | | | 43,500 | | | | 928 | | |
| ASML Holding, NY Shares | | | 27,610 | | | | 821 | | |
| Atheros Communications* | | | 19,350 | | | | 510 | | |
| Broadcom, Cl A | | | 20,330 | | | | 719 | | |
| Cypress Semiconductor* | | | 60,430 | | | | 760 | | |
| Entropic Communications* | | | 30,000 | | | | 288 | | |
| F5 Networks* | | | 13,740 | | | | 1,426 | | |
| Lam Research* | | | 15,390 | | | | 644 | | |
| Micron Technology* | | | 92,300 | | | | 666 | | |
| Motorola* | | | 108,830 | | | | 929 | | |
| | | Shares/
Contracts | | Value
(000) | |
| Netlogic Microsystems* # | | | 36,920 | | | $ | 1,018 | | |
Varian Semiconductor
Equipment Associates* | | | 24,560 | | | | 707 | | |
| Total Information technology | | | | | | | 10,548 | | |
| Materials—6.4% | |
| United States Steel | | | 15,020 | | | | 659 | | |
| Walter Energy | | | 10,140 | | | | 824 | | |
| Total Materials | | | | | | | 1,483 | | |
Total Common stock
(Cost $15,940) | | | | | | | 22,631 | | |
| Put option contract*—0.3% | |
iShares Russell 2000 Index Fund,
11/10 at $65 | | | 375 | | | | 76 | | |
Total Put option contract
(Cost $85) | | | | | | | 76 | | |
| Cash equivalent—8.4% | |
BlackRock TempCash Fund
Institutional Shares
0.240%** (1) | | | 1,943,073 | | | | 1,943 | | |
Total Cash equivalent
(Cost $1,943) | | | | | | | 1,943 | | |
Total Investments—106.1%
(Cost $17,968) | | | | | | $ | 24,650 | | |
As of September 30, 2010, all of the Fund's investments were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.
Percentages are based on Net Assets of $23,227.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2010.
*** This number is listed in thousands.
† More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes.
# Security fully or partially on loan at September 30, 2010. The total value of securities on loan at September 30, 2010, was $1,273.*** Certain of these securities may have been sold prior to period end and are included in receivable for investment securities sold on the Statement of Assets and Liabilities.
38 TURNER FUNDS 2010 ANNUAL REPORT
Schedule of investments
Turner New Enterprise Fund
(1) The Fund lends securities in its portfolio pursuant to a securities lending agreement ("Lending Agreement") with Morgan Stanley. Unless otherwise agreed, security loans made pursuant to the Lending Agreement are required at all times to be secured by collateral equal to at least 100% of the market value of the securities loaned. Cash collateral received is invested pursuant to the terms of the Lending Agreement in the BlackRock TempCash Fund, Institutional Shares, a money market fund. All such investments are made at the risk of the Fund. As such, the Fund is liable for investment losses. The Fund receives an annual fee for its participation in the Lending Agreement based on projected lending activity. A partial position of this security was purchased with cash collateral received from securities lending. The total value of such security at September 30, 2010 was $1,316.***
Cl — Class
NY — New York
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2010 ANNUAL REPORT 39
FINANCIAL STATEMENTS
Schedule of investments
Turner Small Cap Growth Fund
September 30, 2010
| | | Shares | | Value
(000) | |
| Common stock—99.0%† | |
| Consumer discretionary—16.9% | |
| 7 Days Group Holdings ADR* | | | 58,340 | | | $ | 1,050 | | |
| Brunswick | | | 100,580 | | | | 1,531 | | |
| Buffalo Wild Wings* # | | | 50,780 | | | | 2,432 | | |
| Capella Education* | | | 38,370 | | | | 2,978 | | |
| CROCS* | | | 259,760 | | | | 3,379 | | |
| DineEquity* # | | | 77,680 | | | | 3,494 | | |
| Finish Line, Cl A | | | 189,800 | | | | 2,640 | | |
| Gaylord Entertainment* # | | | 70,828 | | | | 2,160 | | |
| hhgregg* # | | | 71,980 | | | | 1,782 | | |
| Orient-Express Hotels, Cl A* # | | | 256,520 | | | | 2,860 | | |
| Saks* # | | | 353,320 | | | | 3,039 | | |
| Sotheby's | | | 64,411 | | | | 2,372 | | |
| Tempur-Pedic International* | | | 83,870 | | | | 2,600 | | |
| Texas Roadhouse, Cl A* | | | 241,640 | | | | 3,397 | | |
| True Religion Apparel* # | | | 119,010 | | | | 2,540 | | |
| Ulta Salon Cosmetics & Fragrance* | | | 86,157 | | | | 2,516 | | |
| Warnaco Group* | | | 77,410 | | | | 3,958 | | |
| WMS Industries* | | | 42,700 | | | | 1,626 | | |
| Total Consumer discretionary | | | | | | | 46,354 | | |
| Consumer staples—2.1% | |
| Central European Distribution* | | | 28,430 | | | | 634 | | |
| Diamond Foods | | | 40,170 | | | | 1,647 | | |
| United Natural Foods* | | | 105,193 | | | | 3,486 | | |
| Total Consumer staples | | | | | | | 5,767 | | |
| Energy—4.2% | |
| James River Coal* # | | | 121,460 | | | | 2,129 | | |
| Key Energy Services* | | | 270,977 | | | | 2,577 | | |
| Oasis Petroleum* | | | 166,510 | | | | 3,225 | | |
| Resolute Energy* # | | | 70,620 | | | | 781 | | |
| Rex Energy* | | | 71,838 | | | | 920 | | |
| Swift Energy* | | | 69,230 | | | | 1,944 | | |
| Total Energy | | | | | | | 11,576 | | |
| Financials—4.2% | |
| Bank of the Ozarks | | | 53,780 | | | | 1,995 | | |
| DuPont Fabros Technology | | | 53,370 | | | | 1,342 | | |
| Green Dot, Cl A* | | | 40,230 | | | | 1,951 | | |
| National Financial Partners* | | | 167,110 | | | | 2,117 | | |
| Sunstone Hotel Investors* | | | 142,670 | | | | 1,294 | | |
| Tanger Factory Outlet Centers | | | 58,380 | | | | 2,752 | | |
| Total Financials | | | | | | | 11,451 | | |
| | | Shares | | Value
(000) | |
| Health care—18.7% | |
| Acorda Therapeutics* | | | 42,900 | | | $ | 1,417 | | |
| Align Technology* | | | 54,155 | | | | 1,060 | | |
| AMERIGROUP* | | | 93,567 | | | | 3,974 | | |
| Cepheid* | | | 61,780 | | | | 1,156 | | |
| Cooper | | | 65,650 | | | | 3,034 | | |
| Emergency Medical Services, Cl A* | | | 68,596 | | | | 3,653 | | |
| Healthsouth* | | | 161,510 | | | | 3,101 | | |
| Hill-Rom Holdings | | | 62,540 | | | | 2,245 | | |
| HMS Holdings* | | | 32,800 | | | | 1,933 | | |
| ICON ADR* | | | 96,730 | | | | 2,091 | | |
| Impax Laboratories* | | | 64,020 | | | | 1,265 | | |
| Incyte* | | | 70,500 | | | | 1,127 | | |
| Medicis Pharmaceutical, Cl A | | | 55,890 | | | | 1,657 | | |
| Onyx Pharmaceuticals* | | | 50,870 | | | | 1,342 | | |
| Parexel International* | | | 105,920 | | | | 2,450 | | |
| Pharmasset* | | | 38,210 | | | | 1,127 | | |
| PSS World Medical* | | | 82,110 | | | | 1,756 | | |
| Psychiatric Solutions* | | | 65,060 | | | | 2,183 | | |
| Quality Systems # | | | 46,020 | | | | 3,052 | | |
| Regeneron Pharmaceuticals* | | | 24,950 | | | | 684 | | |
| Salix Pharmaceuticals* | | | 74,460 | | | | 2,958 | | |
| Seattle Genetics* | | | 78,650 | | | | 1,221 | | |
| SXC Health Solutions* | | | 55,700 | | | | 2,031 | | |
| Tenet Healthcare* | | | 588,170 | | | | 2,776 | | |
| Thoratec* | | | 22,960 | | | | 849 | | |
| Volcano* | | | 53,940 | | | | 1,401 | | |
| Total Health care | | | | | | | 51,543 | | |
| Industrials—18.6% | |
| Actuant, Cl A | | | 133,370 | | | | 3,062 | | |
| Alaska Air Group* | | | 49,440 | | | | 2,523 | | |
| ArvinMeritor* | | | 227,336 | | | | 3,533 | | |
| Baldor Electric | | | 61,510 | | | | 2,485 | | |
| Clean Harbors* | | | 34,330 | | | | 2,326 | | |
| Copa Holdings, Cl A | | | 32,460 | | | | 1,750 | | |
| EnerNOC* | | | 47,450 | | | | 1,490 | | |
| EnPro Industries* | | | 66,160 | | | | 2,069 | | |
| GATX | | | 45,980 | | | | 1,348 | | |
| Genesee & Wyoming, Cl A* | | | 91,270 | | | | 3,960 | | |
| GrafTech International* | | | 170,740 | | | | 2,669 | | |
| Hexcel* | | | 149,970 | | | | 2,668 | | |
| HUB Group, Cl A* | | | 90,960 | | | | 2,662 | | |
| Kforce* | | | 170,940 | | | | 2,345 | | |
| Knight Transportation | | | 79,450 | | | | 1,536 | | |
40 TURNER FUNDS 2010 ANNUAL REPORT
Schedule of investments
Turner Small Cap Growth Fund
| | | Shares | | Value
(000) | |
| Polypore International* | | | 60,847 | | | $ | 1,835 | | |
| Triumph Group | | | 27,120 | | | | 2,023 | | |
| TrueBlue* | | | 157,772 | | | | 2,154 | | |
| Watsco | | | 44,450 | | | | 2,475 | | |
| WESCO International* | | | 83,230 | | | | 3,270 | | |
| Woodward Governor | | | 91,841 | | | | 2,977 | | |
| Total Industrials | | | | | | | 51,160 | | |
| Information technology—26.8% | |
| Acme Packet* | | | 80,340 | | | | 3,048 | | |
| ADTRAN | | | 95,050 | | | | 3,355 | | |
| Applied Micro Circuits* | | | 84,770 | | | | 848 | | |
| Ariba* | | | 146,250 | | | | 2,764 | | |
| Aruba Networks* | | | 239,976 | | | | 5,121 | | |
| Atheros Communications* | | | 66,720 | | | | 1,758 | | |
| BroadSoft* | | | 96,150 | | | | 832 | | |
| Cavium Networks* # | | | 106,960 | | | | 3,076 | | |
| Cirrus Logic* | | | 106,220 | | | | 1,895 | | |
| Concur Technologies* | | | 47,940 | | | | 2,370 | | |
| Entropic Communications* | | | 245,370 | | | | 2,356 | | |
| Finisar* # | | | 157,520 | | | | 2,960 | | |
| GSI Commerce* | | | 109,900 | | | | 2,715 | | |
| Isilon Systems* | | | 76,570 | | | | 1,706 | | |
| Jack Henry & Associates | | | 132,984 | | | | 3,391 | | |
| Netlogic Microsystems* # | | | 146,810 | | | | 4,049 | | |
| Omnivision Technologies* | | | 131,780 | | | | 3,036 | | |
| Rackspace Hosting* # | | | 119,680 | | | | 3,109 | | |
| Riverbed Technology* | | | 85,320 | | | | 3,889 | | |
| Sapient | | | 164,170 | | | | 1,965 | | |
| Semtech* | | | 75,340 | | | | 1,521 | | |
| SuccessFactors* # | | | 118,070 | | | | 2,965 | | |
| Taleo, Cl A* | | | 119,720 | | | | 3,471 | | |
| Teradyne* | | | 318,030 | | | | 3,543 | | |
| TIBCO Software* | | | 91,870 | | | | 1,630 | | |
| Ultratech* | | | 61,660 | | | | 1,054 | | |
| Veeco Instruments* # | | | 69,860 | | | | 2,436 | | |
| VeriFone Systems* | | | 94,385 | | | | 2,933 | | |
| Total Information technology | | | | | | | 73,796 | | |
| Materials—5.7% | |
| Allied Nevada Gold* | | | 59,060 | | | | 1,565 | | |
| Georgia Gulf* # | | | 103,440 | | | | 1,690 | | |
| Rock-Tenn, Cl A | | | 46,951 | | | | 2,339 | | |
| Schweitzer-Mauduit International | | | 27,097 | | | | 1,580 | | |
| Solutia* | | | 206,050 | | | | 3,301 | | |
| | | Shares | | Value
(000) | |
| Stillwater Mining* | | | 148,580 | | | $ | 2,502 | | |
| Temple-Inland | | | 45,520 | | | | 849 | | |
| Thompson Creek Metals* # | | | 180,880 | | | | 1,950 | | |
| Total Materials | | | | | | | 15,776 | | |
| Telecommunication services—1.8% | |
| Syniverse Holdings* | | | 117,220 | | | | 2,657 | | |
| City Telecom (HK) ADR | | | 8,315 | | | | 105 | | |
| tw telecom, Cl A* | | | 112,940 | | | | 2,097 | | |
| Total Telecommunication services | | | | | | | 4,859 | | |
Total Common stock
(Cost $207,282) | | | | | | | 272,282 | | |
| Cash equivalent—15.4% | |
BlackRock TempCash Fund
Institutional Shares
0.240%** (1) | | | 42,270,038 | | | | 42,270 | | |
Total Cash equivalent
(Cost $42,270) | | | | | | | 42,270 | | |
Total Investments—114.4%
(Cost $249,552) | | | | | | $ | 314,552 | | |
As of September 30, 2010, all of the Fund's investments were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.
Percentages are based on Net Assets of $274,925.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2010.
*** This number is listed in thousands.
† More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes.
# Security fully or partially on loan at September 30, 2010. The total value of securities on loan at September 30, 2010, was $36,548.*** Certain of these securities may have been sold prior to period end and are included in receivable for investment securities sold on the Statement of Assets and Liabilities.
TURNER FUNDS 2010 ANNUAL REPORT 41
FINANCIAL STATEMENTS
Schedule of investments
Turner Small Cap Growth Fund
(1) The Fund lends securities in its portfolio pursuant to a securities lending agreement ("Lending Agreement") with Morgan Stanley. Unless otherwise agreed, security loans made pursuant to the Lending Agreement are required at all times to be secured by collateral equal to at least 100% of the market value of the securities loaned. Cash collateral received is invested pursuant to the terms of the Lending Agreement in the BlackRock TempCash Fund, Institutional Shares, a money market fund. All such investments are made at the risk of the Fund. As such, the Fund is liable for investment losses. The Fund receives an annual fee for its participation in the Lending Agreement based on projected lending activity. A partial position of this security was purchased with cash collateral received from securities lending. The total value of such security at September 30, 2010 was $37,726.***
ADR — American Depositary Receipt
Cl — Class
HK — Hong Kong
The accompanying notes are an integral part of the financial statements.
42 TURNER FUNDS 2010 ANNUAL REPORT
Schedule of investments
Turner Quantitative Broad Market Equity Fund
September 30, 2010
| | | Shares | | Value
(000) | |
| Common stock—98.4% | |
| Consumer discretionary—12.0% | |
| Amazon.com* | | | 450 | | | $ | 71 | | |
| CBS, Cl B | | | 4,170 | | | | 66 | | |
| Comcast, Cl A | | | 4,560 | | | | 82 | | |
| DIRECTV, Cl A* | | | 2,670 | | | | 111 | | |
| Guess? | | | 2,140 | | | | 87 | | |
| Harley-Davidson | | | 2,670 | | | | 76 | | |
| Interpublic Group of Cos.* | | | 7,950 | | | | 80 | | |
| J.C. Penney | | | 2,810 | | | | 76 | | |
| McDonald's | | | 1,080 | | | | 80 | | |
| Starbucks | | | 3,880 | | | | 99 | | |
| Target | | | 1,800 | | | | 96 | | |
| Tenneco* | | | 3,650 | | | | 106 | | |
| Time Warner | | | 2,990 | | | | 92 | | |
| TJX | | | 2,570 | | | | 115 | | |
| WMS Industries* | | | 2,230 | | | | 85 | | |
| Total Consumer discretionary | | | | | | | 1,322 | | |
| Consumer staples—10.1% | |
| Altria Group | | | 2,970 | | | | 72 | | |
| Brown-Forman, Cl B | | | 1,810 | | | | 112 | | |
| Coca-Cola | | | 1,830 | | | | 107 | | |
| CVS Caremark | | | 3,820 | | | | 120 | | |
| Dr. Pepper Snapple Group | | | 2,480 | | | | 88 | | |
| Lorillard | | | 800 | | | | 64 | | |
| PepsiCo | | | 1,596 | | | | 106 | | |
| Philip Morris International | | | 2,130 | | | | 119 | | |
| Procter & Gamble | | | 2,590 | | | | 155 | | |
| Wal-Mart Stores | | | 3,192 | | | | 171 | | |
| Total Consumer staples | | | | | | | 1,114 | | |
| Energy—10.3% | |
| Apache | | | 820 | | | | 80 | | |
| Chevron | | | 1,530 | | | | 124 | | |
| ConocoPhillips | | | 2,240 | | | | 129 | | |
| Devon Energy | | | 1,040 | | | | 67 | | |
| EQT | | | 2,800 | | | | 101 | | |
| Exxon Mobil | | | 1,940 | | | | 120 | | |
| First Solar* | | | 790 | | | | 116 | | |
| Spectra Energy | | | 4,150 | | | | 94 | | |
| Transocean* | | | 1,610 | | | | 104 | | |
| Whiting Petroleum* | | | 800 | | | | 76 | | |
| Williams | | | 6,280 | | | | 120 | | |
| Total Energy | | | | | | | 1,131 | | |
| | | Shares | | Value
(000) | |
| Financials—16.0% | |
| American Express | | | 2,660 | | | $ | 112 | | |
| Berkshire Hathaway, Cl B* | | | 1,250 | | | | 103 | | |
| BlackRock, Cl A | | | 450 | | | | 77 | | |
| Capital One Financial | | | 1,320 | | | | 52 | | |
| Chubb | | | 1,940 | | | | 111 | | |
| Citigroup* | | | 31,920 | | | | 124 | | |
| Discover Financial Services | | | 4,150 | | | | 69 | | |
| Goldman Sachs Group | | | 550 | | | | 80 | | |
| JPMorgan Chase | | | 3,906 | | | | 149 | | |
| Lincoln National | | | 3,400 | | | | 81 | | |
| MetLife | | | 2,430 | | | | 94 | | |
| MSCI, Cl A* | | | 2,530 | | | | 84 | | |
| NASDAQ OMX Group* | | | 3,750 | | | | 73 | | |
| Progressive | | | 5,190 | | | | 108 | | |
| Raymond James Financial | | | 3,570 | | | | 90 | | |
| SunTrust Banks | | | 3,850 | | | | 100 | | |
| Travelers | | | 2,130 | | | | 111 | | |
| US Bancorp | | | 2,330 | | | | 50 | | |
| Wells Fargo | | | 3,320 | | | | 83 | | |
| Total Financials | | | | | | | 1,751 | | |
| Health care—11.9% | |
| Abbott Laboratories | | | 1,660 | | | | 87 | | |
| AMERIGROUP* | | | 2,130 | | | | 91 | | |
| Bristol-Myers Squibb | | | 5,880 | | | | 159 | | |
| Cerner* | | | 1,030 | | | | 87 | | |
| CIGNA | | | 3,020 | | | | 108 | | |
| Express Scripts* | | | 1,790 | | | | 87 | | |
| Healthsouth* | | | 3,610 | | | | 69 | | |
| Intuitive Surgical* | | | 310 | | | | 88 | | |
| Johnson & Johnson | | | 2,531 | | | | 157 | | |
| McKesson | | | 1,770 | | | | 109 | | |
| Pfizer | | | 9,410 | | | | 161 | | |
| WellPoint* | | | 1,790 | | | | 102 | | |
| Total Health care | | | | | | | 1,305 | | |
| Industrials—9.3% | |
| 3M | | | 740 | | | | 64 | | |
| Boeing | | | 1,030 | | | | 69 | | |
| Caterpillar | | | 1,730 | | | | 136 | | |
| Deere | | | 1,550 | | | | 108 | | |
| General Electric | | | 5,977 | | | | 97 | | |
| Honeywell International | | | 1,680 | | | | 74 | | |
| Norfolk Southern | | | 1,930 | | | | 115 | | |
TURNER FUNDS 2010 ANNUAL REPORT 43
FINANCIAL STATEMENTS
Schedule of investments
Turner Quantitative Broad Market Equity Fund
| | | Shares | | Value
(000) | |
| Oshkosh* | | | 2,400 | | | $ | 66 | | |
| Parker Hannifin | | | 1,340 | | | | 94 | | |
| Union Pacific | | | 1,520 | | | | 124 | | |
| United Parcel Service, Cl B | | | 1,030 | | | | 69 | | |
| Total Industrials | | | | | | | 1,016 | | |
| Information technology—17.6% | |
| Amkor Technology* | | | 14,060 | | | | 93 | | |
| Analog Devices | | | 2,450 | | | | 77 | | |
| Apple* | | | 900 | | | | 255 | | |
| ASML Holding, NY Shares | | | 2,700 | | | | 80 | | |
| Automatic Data Processing | | | 2,570 | | | | 108 | | |
| Broadcom, Cl A | | | 1,980 | | | | 70 | | |
| Cisco Systems* | | | 5,977 | | | | 131 | | |
| Cree* | | | 1,290 | | | | 70 | | |
| Dell* | | | 7,900 | | | | 103 | | |
| Google, Cl A* | | | 259 | | | | 136 | | |
| Hewlett-Packard | | | 2,620 | | | | 110 | | |
| Intel | | | 5,200 | | | | 100 | | |
| International Business Machines | | | 820 | | | | 110 | | |
| Juniper Networks* | | | 3,790 | | | | 115 | | |
| Microsoft | | | 7,367 | | | | 180 | | |
| Nuance Communications* | | | 4,010 | | | | 63 | | |
| Salesforce.com* | | | 590 | | | | 66 | | |
| SanDisk* | | | 1,630 | | | | 60 | | |
| Total Information technology | | | | | | | 1,927 | | |
| Materials—5.6% | |
| Air Products & Chemicals | | | 850 | | | | 70 | | |
| Ball | | | 2,020 | | | | 119 | | |
| Celanese, Ser A | | | 2,270 | | | | 73 | | |
| Eastman Chemical | | | 1,080 | | | | 80 | | |
| Freeport-McMoRan Copper & Gold | | | 1,440 | | | | 123 | | |
| Greif, Cl A | | | 1,280 | | | | 75 | | |
| Monsanto | | | 1,540 | | | | 74 | | |
| Total Materials | | | | | | | 614 | | |
| Telecommunication services—3.0% | |
| AT&T | | | 4,990 | | | | 143 | | |
| MetroPCS Communications* | | | 9,400 | | | | 98 | | |
| Verizon Communications | | | 2,770 | | | | 90 | | |
| Total Telecommunication services | | | | | | | 331 | | |
| | | Shares | | Value
(000) | |
| Utilities—2.6% | |
| American Electric Power | | | 2,380 | | | $ | 86 | | |
| Duke Energy | | | 5,190 | | | | 92 | | |
| PG&E | | | 2,400 | | | | 109 | | |
| Total Utilities | | | | | | | 287 | | |
Total Common stock
(Cost $10,587) | | | | | | | 10,798 | | |
| Cash equivalent—0.2% | |
BlackRock TempCash Fund
Institutional Shares
0.240%** | | | 24,643 | | | | 25 | | |
Total Cash equivalent
(Cost $25) | | | | | | | 25 | | |
Total Investments—98.6%
(Cost $10,612) | | | | | | $ | 10,823 | | |
As of September 30, 2010, all of the Fund's investments were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.
Percentages are based on Net Assets of $10,972.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2010.
*** This number is listed in thousands.
Cl — Class
NY — New York
Ser — Series
The accompanying notes are an integral part of the financial statements.
44 TURNER FUNDS 2010 ANNUAL REPORT
Schedule of investments
Turner Quantitative Large Cap Value Fund
September 30, 2010
| | | Shares | | Value
(000) | |
| Common stock—98.6%† | |
| Consumer discretionary—7.5% | |
| AutoZone* | | | 50 | | | $ | 12 | | |
| DIRECTV, Cl A* | | | 270 | | | | 11 | | |
| Dollar Tree* | | | 150 | | | | 7 | | |
| Home Depot | | | 170 | | | | 5 | | |
| Johnson Controls | | | 180 | | | | 5 | | |
| Mattel | | | 180 | | | | 4 | | |
| Stanley Black & Decker | | | 90 | | | | 6 | | |
| Time Warner | | | 160 | | | | 5 | | |
| Viacom, Cl B | | | 190 | | | | 7 | | |
| Total Consumer discretionary | | | | | | | 62 | | |
| Consumer staples—10.3% | |
| Archer-Daniels-Midland | | | 180 | | | | 6 | | |
| Avon Products | | | 300 | | | | 10 | | |
| Clorox | | | 80 | | | | 5 | | |
| Coca-Cola | | | 100 | | | | 6 | | |
| Energizer Holdings* | | | 120 | | | | 8 | | |
| Hansen Natural* | | | 160 | | | | 7 | | |
| Lorillard | | | 120 | | | | 9 | | |
| PepsiCo | | | 140 | | | | 9 | | |
| Philip Morris International | | | 140 | | | | 8 | | |
| Procter & Gamble | | | 150 | | | | 9 | | |
| Wal-Mart Stores | | | 140 | | | | 8 | | |
| Total Consumer staples | | | | | | | 85 | | |
| Energy—12.2% | |
| Apache | | | 60 | | | | 6 | | |
| Chevron | | | 180 | | | | 14 | | |
| ConocoPhillips | | | 180 | | | | 10 | | |
| Devon Energy | | | 80 | | | | 5 | | |
| Exxon Mobil | | | 512 | | | | 32 | | |
| Hess | | | 220 | | | | 13 | | |
| Occidental Petroleum | | | 100 | | | | 8 | | |
| Spectra Energy | | | 360 | | | | 8 | | |
| Williams | | | 240 | | | | 5 | | |
| Total Energy | | | | | | | 101 | | |
| Financials—25.1% | |
| Aflac | | | 180 | | | | 9 | | |
| Allstate | | | 310 | | | | 10 | | |
| AMB Property | | | 310 | | | | 8 | | |
| American Express | | | 180 | | | | 8 | | |
| AON | | | 190 | | | | 8 | | |
| | | Shares | | Value
(000) | |
| Berkshire Hathaway, Cl B* | | | 260 | | | $ | 21 | | |
| CNA Financial* | | | 310 | | | | 9 | | |
| Digital Realty Trust | | | 160 | | | | 10 | | |
| Goldman Sachs Group | | | 30 | | | | 4 | | |
| JPMorgan Chase | | | 550 | | | | 21 | | |
| Lincoln National | | | 380 | | | | 9 | | |
| Mastercard, Cl A | | | 50 | | | | 11 | | |
| MetLife | | | 210 | | | | 8 | | |
| NASDAQ OMX Group* | | | 370 | | | | 7 | | |
| NYSE Euronext | | | 280 | | | | 8 | | |
| People's United Financial | | | 640 | | | | 8 | | |
| Principal Financial Group | | | 410 | | | | 11 | | |
| Prudential Financial | | | 80 | | | | 4 | | |
| Travelers | | | 100 | | | | 5 | | |
| Unum Group | | | 490 | | | | 11 | | |
| US Bancorp | | | 360 | | | | 8 | | |
| Visa, Cl A | | | 130 | | | | 10 | | |
| Total Financials | | | | | | | 208 | | |
| Health care—13.4% | |
| Boston Scientific* | | | 1,630 | | | | 10 | | |
| Express Scripts* | | | 220 | | | | 11 | | |
| Henry Schein* | | | 170 | | | | 10 | | |
| Hospira* | | | 200 | | | | 11 | | |
| Johnson & Johnson | | | 230 | | | | 14 | | |
Laboratory Corp. of America
Holdings* | | | 110 | | | | 8 | | |
| Life Technologies* | | | 180 | | | | 8 | | |
| Medco Health Solutions* | | | 230 | | | | 12 | | |
| Mylan* | | | 180 | | | | 3 | | |
| PerkinElmer | | | 280 | | | | 7 | | |
| Thermo Fisher Scientific* | | | 160 | | | | 8 | | |
| UnitedHealth Group | | | 240 | | | | 9 | | |
| Total Health care | | | | | | | 111 | | |
| Industrials—8.0% | |
| Boeing | | | 130 | | | | 9 | | |
| Caterpillar | | | 120 | | | | 9 | | |
| General Electric | | | 1,140 | | | | 19 | | |
| Honeywell International | | | 160 | | | | 7 | | |
| Norfolk Southern | | | 140 | | | | 8 | | |
| Northrop Grumman | | | 140 | | | | 8 | | |
| Union Pacific | | | 70 | | | | 6 | | |
| Total Industrials | | | | | | | 66 | | |
TURNER FUNDS 2010 ANNUAL REPORT 45
FINANCIAL STATEMENTS
Schedule of investments
Turner Quantitative Large Cap Value Fund
| | | Shares | | Value
(000) | |
| Information technology—4.9% | |
| Altera | | | 230 | | | $ | 7 | | |
Fidelity National
Information Services | | | 210 | | | | 6 | | |
| Fiserv* | | | 160 | | | | 8 | | |
| Intel | | | 320 | | | | 6 | | |
| Microsoft | | | 350 | | | | 9 | | |
| National Semiconductor | | | 370 | | | | 5 | | |
| Total Information technology | | | | | | | 41 | | |
| Materials—3.3% | |
| Air Products & Chemicals | | | 60 | | | | 5 | | |
| Dow Chemical | | | 250 | | | | 7 | | |
| Eastman Chemical | | | 150 | | | | 11 | | |
| EI du Pont de Nemours | | | 110 | | | | 5 | | |
| Total Materials | | | | | | | 28 | | |
| Telecommunication services—5.5% | |
| AT&T | | | 980 | | | | 28 | | |
| Verizon Communications | | | 550 | | | | 18 | | |
| Total Telecommunication services | | | | | | | 46 | | |
| Utilities—8.4% | |
| AES* | | | 860 | | | | 10 | | |
| American Electric Power | | | 240 | | | | 9 | | |
| CMS Energy | | | 590 | | | | 11 | | |
| Constellation Energy Group | | | 330 | | | | 11 | | |
| Exelon | | | 120 | | | | 5 | | |
| Pepco Holdings | | | 440 | | | | 8 | | |
| Pinnacle West Capital | | | 220 | | | | 9 | | |
| Sempra Energy | | | 140 | | | | 7 | | |
| Total Utilities | | | | | | | 70 | | |
Total Common stock
(Cost $751) | | | | | | | 818 | | |
| Cash equivalent—1.3% | |
BlackRock TempCash Fund
Institutional Shares
0.240%** | | | 10,636 | | | | 11 | | |
Total Cash equivalent
(Cost $11) | | | | | | | 11 | | |
Total Investments—99.9%
(Cost $762) | | | | | | $ | 829 | | |
As of September 30, 2010, all of the Fund's investments were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.
Percentages are based on Net Assets of $830.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2010.
*** This number is listed in thousands.
† More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes.
Cl — Class
The accompanying notes are an integral part of the financial statements.
46 TURNER FUNDS 2010 ANNUAL REPORT
Schedule of investments
Turner Global Opportunities Fund
September 30, 2010
| | | Shares | | Value
(000) | |
| Common stock—98.5%† | |
| Consumer discretionary—8.6% | |
| Inditex | | | 315 | | | $ | 25 | | |
| Intercontinental Hotels Group | | | 1,608 | | | | 29 | | |
| LVMH Moet Hennessy Louis Vuitton | | | 307 | | | | 45 | | |
| Total Consumer discretionary | | | | | | | 99 | | |
| Consumer staples—13.8% | |
| Diageo | | | 2,150 | | | | 37 | | |
| FamilyMart | | | 900 | | | | 32 | | |
| Hypermarcas* | | | 2,111 | | | | 32 | | |
| Natura Cosmeticos | | | 1,360 | | | | 37 | | |
| Whole Foods Market* | | | 570 | | | | 21 | | |
| Total Consumer staples | | | | | | | 159 | | |
| Energy—7.2% | |
| Cairn Energy* | | | 2,130 | | | | 15 | | |
| Cimarex Energy | | | 520 | | | | 34 | | |
| Niko Resources | | | 340 | | | | 34 | | |
| Total Energy | | | | | | | 83 | | |
| Financials—10.3% | |
| HDFC Bank ADR | | | 180 | | | | 33 | | |
| IntercontinentalExchange* | | | 200 | | | | 21 | | |
| Julius Baer Group | | | 819 | | | | 30 | | |
| Sun Hung Kai Properties | | | 2,000 | | | | 34 | | |
| Total Financials | | | | | | | 118 | | |
| Health care—7.1% | |
| Alexion Pharmaceuticals* | | | 880 | | | | 57 | | |
| Intuitive Surgical* | | | 90 | | | | 26 | | |
| Total Health care | | | | | | | 83 | | |
| Industrials—3.5% | |
| Cummins | | | 450 | | | | 41 | | |
| Total Industrials | | | | | | | 41 | | |
| Information technology—35.3% | |
| Apple* | | | 240 | | | | 68 | | |
| ASML Holding, NY Shares | | | 1,770 | | | | 53 | | |
| Baidu ADR* | | | 430 | | | | 44 | | |
| Broadcom, Cl A | | | 980 | | | | 35 | | |
| F5 Networks* | | | 650 | | | | 67 | | |
| Lam Research* | | | 1,200 | | | | 50 | | |
| Micron Technology* | | | 4,220 | | | | 30 | | |
| | | Shares | | Value
(000) | |
| Motorola* | | | 3,970 | | | $ | 34 | | |
| Salesforce.com* | | | 210 | | | | 23 | | |
| Total Information technology | | | | | | | 404 | | |
| Materials—12.7% | |
| Silver Wheaton* | | | 1,060 | | | | 28 | | |
| United States Steel | | | 1,040 | | | | 46 | | |
| Walter Energy | | | 590 | | | | 48 | | |
| Yara International | | | 570 | | | | 26 | | |
| Total Materials | | | | | | | 148 | | |
Total Common stock
(Cost $980) | | | | | | | 1,135 | | |
| Exchange traded fund—2.0% | |
iShares MSCI Emerging
Markets Index Fund | | | 500 | | | | 23 | | |
Total Exchange traded fund
(Cost $19) | | | | | | | 23 | | |
| Cash equivalent—0.0% | |
BlackRock TempCash Fund
Institutional Shares
0.240%** | | | 422 | | | | — | | |
Total Cash equivalent
(Cost $—) | | | | | | | — | | |
Total Investments—100.5%
(Cost $999) | | | | | | $ | 1,158 | | |
As of September 30, 2010, all of the Fund's investments were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.
Percentages are based on Net Assets of $1,153.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2010.
*** This number is listed in thousands.
† More narrow industries are utilized for compliance purposes, whereas broad sectors are utilized for reporting purposes.
ADR — American Depositary Receipt
Cl — Class
NY — New York
Amounts designated as "—" are rounded to $0.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2010 ANNUAL REPORT 47
FINANCIAL STATEMENTS
Schedule of investments
Turner Global Opportunities Fund
| Country Allocation as of 9/30/10† | |
| United States | | | 53.8 | % | |
| United Kingdom | | | 7.0 | | |
| Brazil | | | 6.0 | | |
| Canada | | | 5.3 | | |
| Netherlands | | | 4.5 | | |
| France | | | 3.9 | | |
| Cayman Islands | | | 3.8 | | |
| Hong Kong | | | 3.0 | | |
| India | | | 2.9 | | |
| Japan | | | 2.8 | | |
| Switzerland | | | 2.6 | | |
| Norway | | | 2.2 | | |
| Spain | | | 2.2 | | |
| Total | | | 100.0 | % | |
† Percentages are based on total investments.
48 TURNER FUNDS 2010 ANNUAL REPORT
Schedule of investments
Turner International Core Growth Fund
September 30, 2010
| | | Shares | | Value
(000) | |
| Common stock—95.8% | |
| Consumer discretionary—10.9% | |
| Focus Media Holding ADR* | | | 4,140 | | | $ | 100 | | |
| Intercontinental Hotels Group | | | 5,190 | | | | 93 | | |
LVMH Moet Hennessy
Louis Vuitton | | | 695 | | | | 102 | | |
| Magna International, Cl A | | | 799 | | | | 65 | | |
| Parkson Retail Group | | | 44,092 | | | | 77 | | |
| Sony | | | 2,170 | | | | 67 | | |
| Yamada Denki | | | 900 | | | | 56 | | |
| Total Consumer discretionary | | | | | | | 560 | | |
| Consumer staples—14.5% | |
| Anheuser-Busch InBev | | | 1,720 | | | | 101 | | |
| British American Tobacco | | | 2,690 | | | | 100 | | |
| Danone | | | 1,390 | | | | 83 | | |
| Diageo | | | 3,100 | | | | 54 | | |
| FamilyMart | | | 1,900 | | | | 68 | | |
| Hengan International Group | | | 2,500 | | | | 25 | | |
| Hypermarcas* | | | 3,790 | | | | 58 | | |
| Natura Cosmeticos | | | 1,800 | | | | 49 | | |
| Nestle | | | 3,882 | | | | 207 | | |
| Total Consumer staples | | | | | | | 745 | | |
| Energy—5.6% | |
| Cairn Energy* | | | 5,900 | | | | 42 | | |
| CNOOC | | | 44,420 | | | | 86 | | |
| Niko Resources | | | 670 | | | | 66 | | |
| OGX Petroleo e Gas Participacoes* | | | 7,231 | | | | 94 | | |
| Total Energy | | | | | | | 288 | | |
| Financials—12.2% | |
| Banco Compartamos | | | 10,239 | | | | 65 | | |
| Bank of Nova Scotia | | | 1,282 | | | | 68 | | |
| Barclays | | | 14,300 | | | | 67 | | |
| BNP Paribas | | | 1,130 | | | | 80 | | |
| BR Malls Participacoes | | | 4,590 | | | | 38 | | |
| HDFC Bank ADR | | | 410 | | | | 76 | | |
| Julius Baer Group | | | 2,262 | | | | 82 | | |
| Standard Chartered | | | 2,779 | | | | 80 | | |
| Westpac Banking | | | 3,100 | | | | 70 | | |
| Total Financials | | | | | | | 626 | | |
| | | Shares | | Value
(000) | |
| Health care—8.4% | |
| Genomma Lab Internacional, Cl B* | | | 10,110 | | | $ | 19 | | |
| GlaxoSmithKline | | | 2,740 | | | | 54 | | |
| Kalbe Farma | | | 160,500 | | | | 46 | | |
| Novartis | | | 2,190 | | | | 126 | | |
| Novo Nordisk, Cl B | | | 660 | | | | 65 | | |
| Shire | | | 2,170 | | | | 49 | | |
| SXC Health Solutions* | | | 705 | | | | 26 | | |
Valeant Pharmaceuticals
International* | | | 1,818 | | | | 46 | | |
| Total Health care | | | | | | | 431 | | |
| Industrials—12.9% | |
| Canadian National Railway | | | 1,518 | | | | 97 | | |
| CNH Global | | | 1,110 | | | | 41 | | |
| CSR, Cl H | | | 56,900 | | | | 54 | | |
| JS Group | | | 2,500 | | | | 49 | | |
| Komatsu | | | 4,560 | | | | 106 | | |
| Siemens | | | 880 | | | | 93 | | |
| United Tractors | | | 24,270 | | | | 55 | | |
| Volvo, Cl B | | | 6,610 | | | | 97 | | |
| Wolseley | | | 2,746 | | | | 69 | | |
| Total Industrials | | | | | | | 661 | | |
| Information technology—9.7% | |
| ARM Holdings | | | 3,920 | | | | 24 | | |
| ASML Holding | | | 3,620 | | | | 108 | | |
| Baidu ADR* | | | 640 | | | | 66 | | |
| Fujitsu | | | 11,000 | | | | 77 | | |
| Infosys Technologies ADR | | | 850 | | | | 57 | | |
| Omron | | | 3,700 | | | | 84 | | |
| Totvs | | | 350 | | | | 27 | | |
| ZTE, Cl H | | | 13,200 | | | | 53 | | |
| Total Information technology | | | | | | | 496 | | |
| Materials—17.6% | |
| Agrium | | | 972 | | | | 73 | | |
| Air Liquide | | | 759 | | | | 92 | | |
| BHP Billiton | | | 2,880 | | | | 108 | | |
| China Molybdenum, Cl H | | | 68,000 | | | | 49 | | |
| China Resources Cement Holdings* | | | 98,000 | | | | 58 | | |
| Givaudan | | | 80 | | | | 82 | | |
| Goldcorp | | | 1,720 | | | | 75 | | |
| Rexam | | | 15,020 | | | | 72 | | |
| Rhodia | | | 3,077 | | | | 74 | | |
TURNER FUNDS 2010 ANNUAL REPORT 49
FINANCIAL STATEMENTS
Schedule of investments
Turner International Core Growth Fund
| | | Shares | | Value
(000) | |
| Rio Tinto | | | 1,880 | | | $ | 110 | | |
| Silver Wheaton* | | | 1,930 | | | | 51 | | |
| Teck Resources, Cl B | | | 1,354 | | | | 56 | | |
| Total Materials | | | | | | | 900 | | |
| Telecommunication services—1.4% | |
| America Movil, Ser L | | | 26,730 | | | | 71 | | |
| Total Telecommunication services | | | | | | | 71 | | |
| Utilities—2.6% | |
| Tokyo Gas | | | 14,300 | | | | 65 | | |
| Tractebel Energia | | | 4,690 | | | | 70 | | |
| Total Utilities | | | | | | | 135 | | |
Total Common stock
(Cost $4,093) | | | | | | | 4,913 | | |
| Cash equivalent—3.1% | |
BlackRock TempCash Fund
Institutional Shares
0.240%** | | | 156,516 | | | | 157 | | |
Total Cash equivalent
(Cost $157) | | | | | | | 157 | | |
Total Investments—98.9%
(Cost $4,250) | | | | | | $ | 5,070 | | |
As of September 30, 2010, all of the Fund's investments were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.
Percentages are based on Net Assets of $5,129.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2010.
*** This number is listed in thousands.
ADR — American Depositary Receipt
Cl — Class
Ser — Series
The accompanying notes are an integral part of the financial statements.
| Country Allocation as of 9/30/10† | |
| United Kingdom | | | 15.1 | % | |
| Canada | | | 12.3 | | |
| Japan | | | 11.3 | | |
| Switzerland | | | 9.8 | | |
| France | | | 8.5 | | |
| Brazil | | | 6.6 | | |
| Cayman Islands | | | 4.8 | | |
| Australia | | | 3.5 | | |
| Hong Kong | | | 3.3 | | |
| China | | | 3.1 | | |
| Mexico | | | 3.1 | | |
| United States | | | 3.1 | | |
| Netherlands | | | 2.9 | | |
| India | | | 2.6 | | |
| Belgium | | | 2.0 | | |
| Indonesia | | | 2.0 | | |
| Sweden | | | 1.9 | | |
| Germany | | | 1.8 | | |
| Denmark | | | 1.3 | | |
| Jersey | | | 1.0 | | |
| Total | | | 100.0 | % | |
† Percentages are based on total investments.
50 TURNER FUNDS 2010 ANNUAL REPORT
Schedule of investments
Turner Small Cap Equity Fund
September 30, 2010
| | | Shares | | Value
(000) | |
| Common stock—99.5% | |
| Consumer discretionary—13.7% | |
| 99 Cents Only Stores* | | | 6,560 | | | $ | 124 | | |
| Cooper Tire & Rubber | | | 3,090 | | | | 61 | | |
| Dress Barn* | | | 1,290 | | | | 31 | | |
| Jakks Pacific* | | | 6,230 | | | | 110 | | |
| Men's Wearhouse | | | 2,380 | | | | 56 | | |
| Movado Group* | | | 6,100 | | | | 66 | | |
| Oxford Industries | | | 1,960 | | | | 47 | | |
| RC2* | | | 4,430 | | | | 93 | | |
| Sally Beauty Holdings* | | | 11,250 | | | | 126 | | |
| Steven Madden* | | | 2,275 | | | | 93 | | |
| Warnaco Group* | | | 1,530 | | | | 78 | | |
| Total Consumer discretionary | | | | | | | 885 | | |
| Consumer staples—1.5% | |
| Andersons | | | 1,850 | | | | 70 | | |
| Diamond Foods | | | 710 | | | | 29 | | |
| Total Consumer staples | | | | | | | 99 | | |
| Energy—6.0% | |
| Berry Petroleum, Cl A | | | 2,590 | | | | 82 | | |
| Complete Production Services* | | | 4,960 | | | | 101 | | |
| Regency Energy Partners LP | | | 3,910 | | | | 96 | | |
| Teekay Tankers, Cl A # | | | 2,970 | | | | 39 | | |
| Venoco* | | | 3,370 | | | | 66 | | |
| Total Energy | | | | | | | 384 | | |
| Financials—20.3% | |
| Anworth Mortgage Asset | | | 8,190 | | | | 59 | | |
| BioMed Realty Trust | | | 5,850 | | | | 105 | | |
| Brandywine Realty Trust | | | 5,820 | | | | 71 | | |
| Cash America International | | | 1,160 | | | | 40 | | |
| CNO Financial Group* | | | 15,450 | | | | 86 | | |
Government Properties
Income Trust | | | 3,100 | | | | 83 | | |
| LaSalle Hotel Properties | | | 3,460 | | | | 81 | | |
Mid-America Apartment
Communities | | | 1,740 | | | | 101 | | |
| National Penn Bancshares | | | 14,610 | | | | 91 | | |
| PennantPark Investment | | | 8,020 | | | | 85 | | |
| Platinum Underwriters Holdings | | | 2,000 | | | | 87 | | |
| ProAssurance* | | | 470 | | | | 27 | | |
| Signature Bank* | | | 2,690 | | | | 105 | | |
| Susquehanna Bancshares | | | 3,890 | | | | 33 | | |
| | | Shares | | Value
(000) | |
| SVB Financial Group* | | | 2,310 | | | $ | 98 | | |
| Tanger Factory Outlet Centers | | | 2,170 | | | | 102 | | |
| Tower Group | | | 2,310 | | | | 54 | | |
| Total Financials | | | | | | | 1,308 | | |
| Health care—10.8% | |
American Medical Systems
Holdings* | | | 2,090 | | | | 41 | | |
| AMERIGROUP* | | | 2,240 | | | | 95 | | |
| Emergent Biosolutions* | | | 2,710 | | | | 47 | | |
| Healthsouth* | | | 4,870 | | | | 94 | | |
| Medicis Pharmaceutical, Cl A | | | 2,600 | | | | 77 | | |
| Nektar Therapeutics* | | | 5,610 | | | | 83 | | |
| Par Pharmaceutical* | | | 960 | | | | 28 | | |
| Salix Pharmaceuticals* | | | 820 | | | | 32 | | |
| Savient Pharmaceuticals* | | | 2,190 | | | | 50 | | |
| Seattle Genetics* | | | 4,390 | | | | 68 | | |
| Viropharma* | | | 5,640 | | | | 84 | | |
| Total Health care | | | | | | | 699 | | |
| Industrials—13.6% | |
| Aircastle | | | 7,780 | | | | 66 | | |
| Alaska Air Group* | | | 1,600 | | | | 82 | | |
| ArvinMeritor* | | | 6,730 | | | | 105 | | |
| Atlas Air Worldwide Holdings* | | | 1,400 | | | | 70 | | |
| Esterline Technologies* | | | 1,610 | | | | 92 | | |
| Genesee & Wyoming, Cl A* | | | 1,740 | | | | 76 | | |
| Hexcel* | | | 5,870 | | | | 104 | | |
| Moog, Cl A* | | | 1,870 | | | | 66 | | |
| Titan International | | | 2,490 | | | | 34 | | |
| WESCO International* | | | 2,270 | | | | 89 | | |
| Woodward Governor | | | 2,770 | | | | 90 | | |
| Total Industrials | | | | | | | 874 | | |
| Information technology—20.7% | |
| Acxiom* | | | 3,230 | | | | 51 | | |
| ADTRAN | | | 2,230 | | | | 79 | | |
| Applied Micro Circuits* | | | 3,270 | | | | 33 | | |
| Coherent* | | | 1,350 | | | | 54 | | |
| Compuware* | | | 7,470 | | | | 64 | | |
| Earthlink | | | 14,240 | | | | 130 | | |
| Ebix* # | | | 3,120 | | | | 73 | | |
| Entegris* | | | 7,790 | | | | 36 | | |
| GT Solar International* | | | 4,660 | | | | 39 | | |
| j2 Global Communications* | | | 2,960 | | | | 70 | | |
TURNER FUNDS 2010 ANNUAL REPORT 51
FINANCIAL STATEMENTS
Schedule of investments
Turner Small Cap Equity Fund
| | | Shares | | Value
(000) | |
| Mentor Graphics* | | | 10,870 | | | $ | 115 | | |
| Novatel Wireless* | | | 6,230 | | | | 49 | | |
| Omnivision Technologies* | | | 4,050 | | | | 93 | | |
| RF Micro Devices* | | | 9,720 | | | | 60 | | |
| Teradyne* | | | 6,100 | | | | 68 | | |
| TIBCO Software* | | | 5,600 | | | | 99 | | |
| TriQuint Semiconductor* | | | 7,690 | | | | 74 | | |
| ValueClick* | | | 6,420 | | | | 84 | | |
| VeriFone Systems* | | | 2,110 | | | | 66 | | |
| Total Information technology | | | | | | | 1,337 | | |
| Materials—7.1% | |
| Ferro* | | | 8,580 | | | | 111 | | |
| Kraton Performance Polymers* | | | 3,690 | | | | 100 | | |
| Novagold Resources* | | | 9,280 | | | | 81 | | |
| Rockwood Holdings* | | | 3,370 | | | | 106 | | |
| TPC Group* | | | 2,570 | | | | 61 | | |
| Total Materials | | | | | | | 459 | | |
| Telecommunication services—1.8% | |
| Syniverse Holdings* | | | 5,030 | | | | 114 | | |
| Total Telecommunication services | | | | | | | 114 | | |
| Utilities—4.0% | |
| Avista | | | 3,590 | | | | 75 | | |
| Cleco | | | 3,080 | | | | 91 | | |
| Nicor | | | 2,000 | | | | 92 | | |
| Total Utilities | | | | | | | 258 | | |
Total Common stock
(Cost $5,185) | | | | | | | 6,417 | | |
| Cash equivalent—2.2% | |
BlackRock TempCash Fund
Institutional Shares
0.240%** (1) | | | 139,255 | | | | 139 | | |
Total Cash equivalent
(Cost $139) | | | | | | | 139 | | |
Total Investments—101.7%
(Cost $5,324) | | | | | | $ | 6,556 | | |
As of September 30, 2010, all of the Fund's investments were considered Level 1. Please see Note 2 in Notes to Financial Statements for further information regarding fair value measurements.
Percentages are based on Net Assets of $6,448.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2010.
*** This number is listed in thousands.
# Security fully or partially on loan at September 30, 2010. The total value of securities on loan at September 30, 2010, was $110.*** Certain of these securities may have been sold prior to period end and are included in receivable for investment securities sold on the Statement of Assets and Liabilities.
(1) The Fund lends securities in its portfolio pursuant to a securities lending agreement ("Lending Agreement") with Morgan Stanley. Unless otherwise agreed, security loans made pursuant to the Lending Agreement are required at all times to be secured by collateral equal to at least 100% of the market value of the securities loaned. Cash collateral received is invested pursuant to the terms of the Lending Agreement in the BlackRock TempCash Fund, Institutional Shares, a money market fund. All such investments are made at the risk of the Fund. As such, the Fund is liable for investment losses. The Fund receives an annual fee for its participation in the Lending Agreement based on projected lending activity. A partial position of this security was purchased with cash collateral received from securities lending. The total value of such security at September 30, 2010 was $114.***
Cl — Class
LP — Limited Partnership
The accompanying notes are an integral part of the financial statements.
52 TURNER FUNDS 2010 ANNUAL REPORT
THIS PAGE WAS INTENTIONALLY LEFT BLANK
TURNER FUNDS 2010 ANNUAL REPORT 53
FINANCIAL STATEMENTS
Statements of assets and liabilities (000)
September 30, 2010
| | | Turner
Spectrum
Fund | | Turner
Concentrated
Growth Fund | | Turner
Core
Growth Fund | | Turner
Emerging
Growth Fund | | Turner
Large Cap
Growth Fund | |
| Assets: | |
| Investment securities, at cost | | $ | 193,031 | | | $ | 33,136 | | | $ | 453,019 | | | $ | 351,833 | | | $ | 103,879 | | |
| Investment securities, at value | | $ | 201,612 | | | $ | 40,963 | | | $ | 554,347 | * | | $ | 457,512 | * | | $ | 123,534 | * | |
| Deposits with brokers for securities sold short | | | 161,088 | | | | — | | | | — | | | | — | | | | — | | |
| Deposits with brokers for options | | | — | | | | 150 | | | | 150 | | | | 150 | | | | 150 | | |
| Receivable for investment securities sold | | | 29,757 | | | | 2,825 | | | | 18,010 | | | | 16,263 | | | | 2,866 | | |
| Receivable for capital shares sold | | | 1,813 | | | | 217 | | | | 964 | | | | 88 | | | | 168 | | |
| Prepaid expenses | | | 64 | | | | 11 | | | | 54 | | | | 41 | | | | 19 | | |
| Receivable for dividend income | | | 62 | | | | 1 | | | | 290 | | | | 83 | | | | 31 | | |
| Receivable from investment adviser | | | 19 | | | | — | | | | — | | | | — | | | | — | | |
| Reclaim receivable | | | 1 | | | | 3 | | | | 24 | | | | 25 | | | | — | | |
| Total assets | | | 394,416 | | | | 44,170 | | | | 573,839 | | | | 474,162 | | | | 126,768 | | |
| Liabilities: | |
| Securities sold short, at proceeds | | | 114,685 | | | | — | | | | — | | | | — | | | | — | | |
| Written options, premiums received | | | 240 | | | | — | | | | — | | | | — | | | | — | | |
| Securities sold short, at value | | | 116,349 | | | | — | | | | — | | | | — | | | | — | | |
| Written options, at value | | | 296 | | | | — | | | | — | | | | — | | | | — | | |
| Cash overdraft | | | — | | | | — | | | | 4,751 | | | | — | | | | — | | |
| Payable for investment securities purchased | | | 38,403 | | | | 1,196 | | | | 13,466 | | | | 4,859 | | | | 2,997 | | |
| Dividends payable on securities sold short (Note 2) | | | 58 | | | | — | | | | — | | | | — | | | | — | | |
| Broker fees and charges on short sales payable | | | 70 | | | | — | | | | — | | | | — | | | | — | | |
| Payable due to shareholder servicing | | | 22 | | | | 12 | | | | 120 | | | | 35 | | | | — | | |
| Payable due to distributor | | | 4 | | | | — | | | | — | | | | — | | | | — | | |
| Payable due to investment adviser | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Obligation to return securities lending collateral | | | — | | | | — | | | | 10,643 | | | | 15,714 | | | | 4,028 | | |
| Payable for capital shares redeemed | | | 93 | | | | 26 | | | | 3,321 | | | | 217 | | | | 192 | | |
| Other accrued expenses | | | 65 | | | | 12 | | | | 138 | | | | 69 | | | | 30 | | |
| Total liabilities | | | 155,360 | | | | 1,246 | | | | 32,439 | | | | 20,894 | | | | 7,247 | | |
| Net assets | | $ | 239,056 | | | $ | 42,924 | | | $ | 541,400 | | | $ | 453,268 | | | $ | 119,521 | | |
| *Includes market value of securities on loan | | $ | — | | | $ | — | | | $ | 10,377 | | | $ | 15,258 | | | $ | 3,911 | | |
| Net assets: | |
| Portfolio capital | | $ | 239,810 | | | $ | 75,859 | | | $ | 707,458 | | | $ | 434,982 | | | $ | 127,153 | | |
| Undistributed net investment income (accumulated net investment loss) | | | (220 | ) | | | — | | | | 539 | | | | — | | | | 153 | | |
Accumulated net realized loss on investments, securities sold
short, written options and foreign currency transactions | | | (7,396 | ) | | | (40,762 | ) | | | (267,925 | ) | | | (87,393 | ) | | | (27,440 | ) | |
Net unrealized appreciation on investments, written options and
securities sold short | | | 6,861 | | | | 7,827 | | | | 101,328 | | | | 105,679 | | | | 19,655 | | |
Net unrealized appreciation on foreign currencies and translation of
other assets and liabilities denominated in foreign currencies | | | 1 | | | | — | | | | — | | | | — | | | | — | | |
| Net assets | | $ | 239,056 | | | $ | 42,924 | | | $ | 541,400 | | | $ | 453,268 | | | $ | 119,521 | | |
| Outstanding shares of beneficial interest (1) Institutional Class Shares (2) | | | 16,596,366 | | | | — | | | | 35,778,341 | | | | 6,503,330 | | | | 24,424,395 | | |
| Outstanding shares of beneficial interest (1) Investor Class Shares (2) | | | 4,858,881 | | | | 6,471,122 | | | | 15,610,829 | | | | 4,177,903 | | | | 282,091 | | |
| Outstanding shares of beneficial interest (1) Retirement Class Shares (2) | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Outstanding shares of beneficial interest (1) Class C Shares (2) | | | 668,857 | | | | — | | | | — | | | | — | | | | — | | |
| Net assets — Institutional Class Shares (2) | | $ | 179,526,592 | | | $ | — | | | $ | 377,649,736 | | | $ | 276,445,247 | | | $ | 118,164,010 | | |
| Net assets — Investor Class Shares (2) | | $ | 52,361,159 | | | $ | 42,924,300 | | | $ | 163,750,027 | | | $ | 176,822,937 | | | $ | 1,357,462 | | |
| Net assets — Retirement Class Shares (2) | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | |
| Net assets — Class C Shares (2) | | $ | 7,168,667 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | |
Net asset value, offering and redemption price per share —
Institutional Class Shares | | $ | 10.82 | | | $ | — | | | $ | 10.56 | | | $ | 42.51 | | | $ | 4.84 | | |
Net asset value, offering and redemption price per share —
Investor Class Shares | | $ | 10.78 | | | $ | 6.63 | | | $ | 10.49 | | | $ | 42.32 | | | $ | 4.81 | | |
Net asset value, offering and redemption price per share —
Retirement Class Shares | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | |
Net asset value, offering and redemption price per share —
Class C Shares | | $ | 10.72 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | |
54 TURNER FUNDS 2010 ANNUAL REPORT
| | | Turner
Midcap
Growth Fund | | Turner
New Enterprise
Fund | | Turner
Small Cap
Growth Fund | | Turner
Quantitative
Broad Market
Equity Fund | | Turner
Quantitative
Large Cap
Value Fund | |
| Assets: | |
| Investment securities, at cost | | $ | 737,219 | | | $ | 17,968 | | | $ | 249,552 | | | $ | 10,612 | | | $ | 762 | | |
| Investment securities, at value | | $ | 998,523 | * | | $ | 24,650 | * | | $ | 314,552 | * | | $ | 10,823 | | | $ | 829 | | |
| Deposits with brokers for securities sold short | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Deposits with brokers for options | | | 150 | | | | 150 | | | | 150 | | | | — | | | | — | | |
| Receivable for investment securities sold | | | 14,615 | | | | — | | | | 2,577 | | | | 901 | | | | — | | |
| Receivable for capital shares sold | | | 917 | | | | 37 | | | | 137 | | | | 92 | | | | — | | |
| Prepaid expenses | | | 73 | | | | 9 | | | | 23 | | | | 12 | | | | 14 | | |
| Receivable for dividend income | | | 339 | | | | 1 | | | | 69 | | | | 13 | | | | 1 | | |
| Receivable from investment adviser | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Reclaim receivable | | | 16 | | | | — | | | | — | | | | — | | | | — | | |
| Total assets | | | 1,014,633 | | | | 24,847 | | | | 317,508 | | | | 11,841 | | | | 844 | | |
| Liabilities: | |
| Securities sold short, at proceeds | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Written options, premiums received | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Securities sold short, at value | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Written options, at value | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Cash overdraft | | | 318 | | | | — | | | | — | | | | — | | | | — | | |
| Payable for investment securities purchased | | | 6,423 | | | | 291 | | | | 4,264 | | | | 861 | | | | — | | |
| Dividends payable on securities sold short (Note 2) | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Broker fees and charges on short sales payable | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Payable due to shareholder servicing | | | 153 | | | | 5 | | | | 59 | | | | — | | | | — | | |
| Payable due to distributor | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Payable due to investment adviser | | | — | | | | — | | | | — | | | | — | | | | 8 | | |
| Obligation to return securities lending collateral | | | 84,571 | | | | 1,316 | | | | 37,726 | | | | — | | | | — | | |
| Payable for capital shares redeemed | | | 2,316 | | | | 1 | | | | 490 | | | | — | | | | — | | |
| Other accrued expenses | | | 157 | | | | 7 | | | | 44 | | | | 8 | | | | 6 | | |
| Total liabilities | | | 93,938 | | | | 1,620 | | | | 42,583 | | | | 869 | | | | 14 | | |
| Net assets | | $ | 920,695 | | | $ | 23,227 | | | $ | 274,925 | | | $ | 10,972 | | | $ | 830 | | |
| *Includes market value of securities on loan | | $ | 81,995 | | | $ | 1,273 | | | $ | 36,548 | | | $ | — | | | $ | — | | |
| Net assets: | |
| Portfolio capital | | $ | 1,022,906 | | | $ | 37,410 | | | $ | 280,832 | | | $ | 11,347 | | | $ | 1,032 | | |
| Undistributed net investment income (accumulated net investment loss) | | | — | | | | — | | | | — | | | | 65 | | | | 8 | | |
Accumulated net realized loss on investments, securities sold
short, written options and foreign currency transactions | | | (363,515 | ) | | | (20,865 | ) | | | (70,907 | ) | | | (651 | ) | | | (277 | ) | |
Net unrealized appreciation on investments, written options and
securities sold short | | | 261,304 | | | | 6,682 | | | | 65,000 | | | | 211 | | | | 67 | | |
Net unrealized appreciation on foreign currencies and translation of
other assets and liabilities denominated in foreign currencies | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Net assets | | $ | 920,695 | | | $ | 23,227 | | | $ | 274,925 | | | $ | 10,972 | | | $ | 830 | | |
| Outstanding shares of beneficial interest (1) Institutional Class Shares (2) | | | 5,517,482 | | | | — | | | | — | | | | 1,228,996 | | | | 104,991 | | |
| Outstanding shares of beneficial interest (1) Investor Class Shares (2) | | | 25,264,764 | | | | 3,303,169 | | | | 9,489,046 | | | | 2,299 | | | | 593 | | |
| Outstanding shares of beneficial interest (1) Retirement Class Shares (2) | | | 159,471 | | | | — | | | | — | | | | — | | | | — | | |
| Outstanding shares of beneficial interest (1) Class C Shares (2) | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Net assets — Institutional Class Shares (2) | | $ | 164,993,499 | | | $ | — | | | $ | — | | | $ | 10,951,570 | | | $ | 825,418 | | |
| Net assets — Investor Class Shares (2) | | $ | 751,123,572 | | | $ | 23,226,523 | | | $ | 274,924,577 | | | $ | 20,423 | | | $ | 4,650 | | |
| Net assets — Retirement Class Shares (2) | | $ | 4,578,085 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | |
| Net assets — Class C Shares (2) | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | |
Net asset value, offering and redemption price per share —
Institutional Class Shares | | $ | 29.90 | | | $ | — | | | $ | — | | | $ | 8.91 | | | $ | 7.86 | | |
Net asset value, offering and redemption price per share —
Investor Class Shares | | $ | 29.73 | | | $ | 7.03 | | | $ | 28.97 | | | $ | 8.88 | | | $ | 7.85 | † | |
Net asset value, offering and redemption price per share —
Retirement Class Shares | | $ | 28.71 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | |
Net asset value, offering and redemption price per share —
Class C Shares | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | |
(1) Unlimited authorization — par value $0.00001.
(2) Shares and Net Assets have not been rounded.
† Difference in net asset value recalculation and net asset value stated is caused by rounding differences.
Amounts designated as "—" are either not applicable, $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2010 ANNUAL REPORT 55
FINANCIAL STATEMENTS
Statements of assets and liabilities (000)
September 30, 2010
| | | Turner
Global
Opportunities
Fund | | Turner
International
Core Growth
Fund | | Turner
Small Cap
Equity Fund | |
| Assets: | |
| Investment securities, at cost | | $ | 999 | | | $ | 4,250 | | | $ | 5,324 | | |
| Investment securities, at value | | $ | 1,158 | | | $ | 5,070 | | | $ | 6,556 | * | |
| Receivable for investment securities sold | | | — | | | | 79 | | | | 142 | | |
| Receivable for capital shares sold | | | — | | | | — | | | | 1 | | |
| Prepaid expenses | | | 5 | | | | 10 | | | | 10 | | |
| Receivable for dividend income | | | 1 | | | | 9 | | | | 19 | | |
| Reclaim receivable | | | — | | | | 9 | | | | — | | |
| Total assets | | | 1,164 | | | | 5,177 | | | | 6,728 | | |
| Liabilities: | |
| Payable for investment securities purchased | | | — | | | | 29 | | | | 75 | | |
| Payable due to shareholder servicing | | | — | | | | — | | | | 2 | | |
| Payable due to investment adviser | | | 4 | | | | 4 | | | | — | | |
| Obligation to return securities lending collateral | | | — | | | | — | | | | 114 | | |
| Payable for capital shares redeemed | | | — | | | | — | | | | 79 | | |
| Other accrued expenses | | | 7 | | | | 15 | | | | 10 | | |
| Total liabilities | | | 11 | | | | 48 | | | | 280 | | |
| Net assets | | $ | 1,153 | | | $ | 5,129 | | | $ | 6,448 | | |
| *Includes market value of securities on loan | | $ | — | | | $ | — | | | $ | 110 | | |
| Net assets: | |
| Portfolio capital | | $ | 998 | | | $ | 5,495 | | | $ | 12,834 | | |
Undistributed net investment income
(distributions in excess of net investment income) | | | — | | | | (14 | ) | | | 20 | | |
Accumulated net realized loss on investments and foreign currency
transactions | | | (4 | ) | | | (1,173 | ) | | | (7,638 | ) | |
| Net unrealized appreciation on investments | | | 159 | | | | 820 | | | | 1,232 | | |
Net unrealized appreciation on foreign currencies and translation of
other assets and liabilities denominated in foreign currencies | | | — | | | | 1 | | | | — | | |
| Net assets | | $ | 1,153 | | | $ | 5,129 | | | $ | 6,448 | | |
| Outstanding shares of beneficial interest (1) Institutional Class Shares (2) | | | 100,012 | | | | 533,600 | | | | 26,232 | | |
| Outstanding shares of beneficial interest (1) Investor Class Shares (2) | | | 22 | | | | 11,743 | | | | 557,071 | | |
| Net assets — Institutional Class Shares (2) | | $ | 1,152,584 | | | $ | 5,018,885 | | | $ | 290,992 | | |
| Net assets — Investor Class Shares (2) | | $ | 257 | | | $ | 110,251 | | | $ | 6,157,331 | | |
Net asset value, offering and redemption price per share —
Institutional Class Shares | | $ | 11.52 | | | $ | 9.41 | | | $ | 11.09 | | |
Net asset value, offering and redemption price per share —
Investor Class Shares | | $ | 11.50 | † | | $ | 9.39 | | | $ | 11.05 | | |
(1) Unlimited authorization — par value $0.00001.
(2) Shares and Net Assets have not been rounded.
† Difference in net asset value recalculation and net asset value stated is caused by rounding differences.
Amounts designated as "—" are either not applicable, $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
56 TURNER FUNDS 2010 ANNUAL REPORT
Statements of operations (000)
| | | Turner
Spectrum
Fund | | Turner
Concentrated
Growth
Fund | | Turner
Core Growth
Fund | |
| | | year ended
9/30/10 | | year ended
9/30/10 | | year ended
9/30/10 | |
| Investment income: | |
| Dividend | | $ | 724 | | | $ | 148 | | | $ | 6,732 | | |
| Securities lending | | | — | | | | 7 | | | | 43 | | |
| Foreign taxes withheld | | | (8 | ) | | | — | | | | (86 | ) | |
| Total Investment income | | | 716 | | | | 155 | | | | 6,689 | | |
| Expenses: | |
| Investment advisory fees | | | 1,600 | | | | 520 | | | | 4,495 | | |
| Administrator fees | | | 151 | | | | 58 | | | | 1,061 | | |
| Shareholder service fees (1) | | | 61 | | | | 103 | | | | 769 | | |
| Shareholder service fees (2) | | | 7 | | | | — | | | | — | | |
| Distribution fees (2) | | | 21 | | | | — | | | | — | | |
| Chief compliance officer fees | | | 7 | | | | 3 | | | | 50 | | |
| Dividend expense | | | 478 | | | | — | | | | — | | |
| Broker fees and charges on short sales | | | 404 | | | | — | | | | — | | |
| Custodian fees | | | 121 | | | | 7 | | | | 44 | | |
| Transfer agent fees | | | 112 | | | | 55 | | | | 256 | | |
| Printing fees | | | 48 | | | | 11 | | | | 168 | | |
| Registration fees | | | 46 | | | | 20 | | | | 48 | | |
| Professional fees | | | 43 | | | | 13 | | | | 242 | | |
| Trustees' fees | | | 12 | | | | 4 | | | | 75 | | |
| Insurance and other fees | | | 19 | | | | 5 | | | | 90 | | |
| Total expenses | | | 3,130 | | | | 799 | | | | 7,298 | | |
| Less: | |
| Investment advisory fee waiver | | | (1,004 | ) | | | (176 | ) | | | (1,360 | ) | |
| Net expenses | | | 2,126 | | | | 623 | | | | 5,938 | | |
| Net investment income (loss) | | | (1,410 | ) | | | (468 | ) | | | 751 | | |
| Net realized gain (loss) from securities sold | | | (2,610 | ) | | | 4,512 | | | | 28,303 | † | |
| Net realized loss from securities sold short | | | (4,251 | ) | | | — | | | | — | | |
| Net realized gain on written option contracts | | | 247 | | | | — | | | | — | | |
| Net realized loss on foreign currency transactions | | | (138 | ) | | | — | | | | — | | |
Net change in unrealized appreciation
(depreciation) on investments | | | 7,804 | | | | (1,040 | ) | | | 6,444 | | |
Net change in unrealized depreciation
on securities sold short | | | (1,567 | ) | | | — | | | | — | | |
Net change in unrealized depreciation
on written option contracts | | | (56 | ) | | | — | | | | — | | |
Net change in unrealized depreciation on foreign currencies,
and translation of other assets and liabilities denominated
in foreign currencies | | | (2 | ) | | | — | | | | — | | |
Net realized and unrealized gain (loss)
on investments and foreign currencies | | | (573 | ) | | | 3,472 | | | | 34,747 | | |
Net increase (decrease) in net assets resulting
from operations | | $ | (1,983 | ) | | $ | 3,004 | | | $ | 35,498 | | |
(1) Attributable to Investor Class Shares only.
(2) Attributable to Class C Shares only.
† Includes realized gains and losses as a result of in-kind transactions (see Note 13 in Notes to Financial Statements).
Amounts designated as "—" are either not applicable, $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2010 ANNUAL REPORT 57
FINANCIAL STATEMENTS
Statements of operations (000)
| | | Turner
Emerging
Growth Fund | | Turner
Large Cap
Growth Fund | | Turner
Midcap
Growth Fund | | Turner New
Enterprise
Fund | | Turner
Small Cap
Growth Fund | |
| | | year ended
9/30/10 | | year ended
9/30/10 | | year ended
9/30/10 | | year ended
9/30/10 | | year ended
9/30/10 | |
| Investment income: | |
| Dividend | | $ | 1,374 | | | $ | 1,062 | | | $ | 6,014 | | | $ | 51 | | | $ | 876 | | |
| Securities lending | | | 318 | | | | 5 | | | | 333 | | | | 14 | | | | 495 | | |
| Foreign taxes withheld | | | (4 | ) | | | (6 | ) | | | (34 | ) | | | (1 | ) | | | — | | |
| Total Investment income | | | 1,688 | | | | 1,061 | | | | 6,313 | | | | 64 | | | | 1,371 | | |
| Expenses: | |
| Investment advisory fees | | | 4,437 | | | | 728 | | | | 7,355 | | | | 347 | | | | 2,678 | | |
| Administrator fees | | | 629 | | | | 172 | | | | 1,390 | | | | 35 | | | | 379 | | |
| Shareholder service fees (2) | | | 452 | | | | 3 | | | | 2,078 | | | | 62 | | | | 669 | | |
| Shareholder service fees (3) | | | — | | | | — | | | | 11 | | | | — | | | | — | | |
| Distribution fees (3) | | | — | | | | — | | | | 11 | | | | — | | | | — | | |
| Chief compliance officer fees | | | 29 | | | | 8 | | | | 64 | | | | 2 | | | | 17 | | |
| Custodian fees | | | 33 | | | | 17 | | | | 44 | | | | 4 | | | | 30 | | |
| Transfer agent fees | | | 118 | | | | 138 | | | | 433 | | | | 49 | | | | 66 | | |
| Printing fees | | | 100 | | | | 27 | | | | 215 | | | | 6 | | | | 57 | | |
| Registration fees | | | 81 | | | | 43 | | | | 70 | | | | 17 | | | | 23 | | |
| Professional fees | | | 139 | | | | 37 | | | | 301 | | | | 7 | | | | 84 | | |
| Trustees' fees | | | 42 | | | | 12 | | | | 93 | | | | 2 | | | | 26 | | |
| Insurance and other fees | | | 59 | | | | 16 | | | | 130 | | | | 4 | | | | 36 | | |
| Total expenses | | | 6,119 | | | | 1,201 | | | | 12,195 | | | | 535 | | | | 4,065 | | |
| Less: | |
| Investment advisory fee waiver | | | (564 | ) | | | (361 | ) | | | (975 | ) | | | (127 | ) | | | (718 | ) | |
| Reimbursements of other operating expenses | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Fees paid indirectly (4) | | | — | | | | — | | | | (1 | ) | | | — | | | | — | | |
| Net expenses | | | 5,555 | | | | 840 | | | | 11,219 | | | | 408 | | | | 3,347 | | |
| Net investment income (loss) | | | (3,867 | ) | | | 221 | | | | (4,906 | ) | | | (344 | ) | | | (1,976 | ) | |
| Net realized gain (loss) from securities sold | | | 31,561 | | | | 1,898 | | | | 107,778 | | | | 3,912 | | | | 25,168 | | |
| Net realized loss on foreign currency transactions | | | — | | | | — | | | | — | | | | — | | | | — | | |
Net change in unrealized appreciation
(depreciation) on investments | | | 22,753 | | | | 10,470 | | | | 24,016 | | | | 261 | | | | 14,979 | | |
Net realized and unrealized gain (loss)
on investments and foreign currencies | | | 54,314 | | | | 12,368 | | | | 131,794 | | | | 4,173 | | | | 40,147 | | |
Net increase (decrease) in net assets resulting
from operations | | $ | 50,447 | | | $ | 12,589 | | | $ | 126,888 | | | $ | 3,829 | | | $ | 38,171 | | |
58 TURNER FUNDS 2010 ANNUAL REPORT
| | | Turner
Quantitative
Broad Market
Equity Fund | | Turner
Quantitative
Large Cap
Value Fund | | Turner
Global
Opportunities
Fund | | Turner
International
Core Growth
Fund | | Turner
Small Cap
Equity Fund | |
| | | year ended
9/30/10 | | year ended
9/30/10 | | 5/7/10(1) thru
9/30/10 | | year ended
9/30/10 | | year ended
9/30/10 | |
| Investment income: | |
| Dividend | | $ | 107 | | | $ | 16 | | | $ | 3 | | | $ | 81 | | | $ | 149 | | |
| Securities lending | | | — | | | | — | | | | — | | | | — | | | | 144 | | |
| Foreign taxes withheld | | | — | | | | — | | | | — | | | | (8 | ) | | | — | | |
| Total Investment income | | | 107 | | | | 16 | | | | 3 | | | | 73 | | | | 293 | | |
| Expenses: | |
| Investment advisory fees | | | 31 | | | | 5 | | | | 3 | | | | 38 | | | | 176 | | |
| Administrator fees | | | 9 | | | | 1 | | | | 1 | | | | 6 | | | | 26 | | |
| Shareholder service fees (2) | | | — | | | | — | | | | — | | | | — | | | | 32 | | |
| Shareholder service fees (3) | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Distribution fees (3) | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Chief compliance officer fees | | | — | | | | — | | | | — | | | | — | | | | 1 | | |
| Custodian fees | | | 6 | | | | 2 | | | | 4 | | | | 24 | | | | 18 | | |
| Transfer agent fees | | | 55 | | | | 55 | | | | 23 | | | | 55 | | | | 60 | | |
| Printing fees | | | 4 | | | | 3 | | | | 2 | | | | 2 | | | | 3 | | |
| Registration fees | | | 28 | | | | 33 | | | | — | | | | 33 | | | | 34 | | |
| Professional fees | | | 2 | | | | — | | | | — | | | | 1 | | | | 6 | | |
| Trustees' fees | | | 1 | | | | — | | | | — | | | | — | | | | 2 | | |
| Insurance and other fees | | | 4 | | | | 3 | | | | 1 | | | | 17 | | | | 6 | | |
| Total expenses | | | 140 | | | | 102 | | | | 34 | | | | 176 | | | | 364 | | |
| Less: | |
| Investment advisory fee waiver | | | (31 | ) | | | (5 | ) | | | (3 | ) | | | (38 | ) | | | (109 | ) | |
| Reimbursements of other operating expenses | | | (70 | ) | | | (91 | ) | | | (27 | ) | | | (89 | ) | | | — | | |
| Fees paid indirectly (4) | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Net expenses | | | 39 | | | | 6 | | | | 4 | | | | 49 | | | | 255 | | |
| Net investment income (loss) | | | 68 | | | | 10 | | | | (1 | ) | | | 24 | | | | 38 | | |
| Net realized gain (loss) from securities sold | | | (473 | ) | | | 104 | | | | (4 | ) | | | 465 | | | | 4,883 | | |
| Net realized loss on foreign currency transactions | | | — | | | | — | | | | (1 | ) | | | (12 | ) | | | — | | |
Net change in unrealized appreciation
(depreciation) on investments | | | 133 | | | | (58 | ) | | | 159 | | | | 187 | | | | (3,478 | ) | |
Net realized and unrealized gain (loss)
on investments and foreign currencies | | | (340 | ) | | | 46 | | | | 154 | | | | 640 | | | | 1,405 | | |
Net increase (decrease) in net assets resulting
from operations | | $ | (272 | ) | | $ | 56 | | | $ | 153 | | | $ | 664 | | | $ | 1,443 | | |
(1) Commencement of operations.
(2) Attributable to Investor Class Shares only.
(3) Attributable to Retirement Class Shares only.
(4) See Note 4 in Notes to Financial Statements.
Amounts designated as "—" are either not applicable, $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2010 ANNUAL REPORT 59
FINANCIAL STATEMENTS
Statements of changes in net assets (000)
| | | Turner
Spectrum
Fund | | Turner
Concentrated
Growth
Fund | | Turner
Core Growth
Fund | |
| | | year ended
9/30/10 | | 5/7/09(1) thru
9/30/09 | | year ended
9/30/10 | | year ended
9/30/09 | | year ended
9/30/10 | | year ended
9/30/09 | |
| Investment activities: | |
| Net investment income (loss) | | $ | (1,410 | ) | | $ | (53 | ) | | $ | (468 | ) | | $ | 120 | | | $ | 751 | | | $ | 2,669 | | |
| Net realized gain (loss) from securities sold and securities sold short | | | (6,861 | ) | | | 50 | | | | 4,512 | | | | (15,251 | ) | | | 28,303 | † | | | (175,116 | ) | |
| Net realized gain on written option contracts | | | 247 | | | | 7 | | | | — | | | | — | | | | — | | | | — | | |
| Net realized loss on foreign currency transactions | | | (138 | ) | | | (3 | ) | | | — | | | | — | | | | — | | | | — | | |
Net change in unrealized appreciation (depreciation) on investments and
securities sold short | | | 6,237 | | | | 680 | | | | (1,040 | ) | | | 13,260 | | | | 6,444 | | | | 146,832 | | |
| Net change in unrealized depreciation on written option contracts | | | (56 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | |
Net change in unrealized appreciation (depreciation) on foreign currencies and translation
of other assets and liabilities denominated in foreign currencies | | | (2 | ) | | | 3 | | | | — | | | | — | | | | — | | | | — | | |
| Net increase (decrease) in net assets resulting from operations | | | (1,983 | ) | | | 684 | | | | 3,004 | | | | (1,871 | ) | | | 35,498 | | | | (25,615 | ) | |
| Dividends and distributions to shareholders: | |
| Net investment income | |
| Institutional Class Shares | | | — | | | | — | | | | — | | | | — | | | | (1,623 | ) | | | (1,661 | ) | |
| Investor Class Shares | | | — | | | | — | | | | (121 | )^ | | | — | | | | (664 | ) | | | (647 | ) | |
| Realized capital gains | |
| Institutional Class Shares | | | (92 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Investor Class Shares | | | (47 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Class C Shares | | | (3 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Total dividends and distributions | | | (142 | ) | | | — | | | | (121 | ) | | | — | | | | (2,287 | ) | | | (2,308 | ) | |
| Capital share transactions: | |
| Institutional Class Shares | |
| Proceeds from shares issued | | | 187,039 | | | | 8,244 | | | | — | | | | — | | | | 279,938 | | | | 132,265 | | |
| Proceeds from shares issued in lieu of cash distributions | | | 84 | | | | — | | | | — | | | | — | | | | 1,398 | | | | 1,393 | | |
| Cost of shares redeemed | | | (14,332 | ) | | | (15 | ) | | | — | | | | — | | | | (312,150 | )† | | | (95,340 | ) | |
| Net increase (decrease) in net assets from Institutional Class Shares transactions | | | 172,791 | | | | 8,229 | | | | — | | | | — | | | | (30,814 | ) | | | 38,318 | | |
| Investor Class Shares | |
| Proceeds from shares issued | | | 57,936 | | | | 4,521 | | | | 12,686 | | | | 12,446 | | | | 158,361 | | | | 52,699 | | |
| Proceeds from shares issued in lieu of cash distributions | | | 47 | | | | — | | | | 119 | | | | — | | | | 597 | | | | 587 | | |
| Cost of shares redeemed | | | (10,048 | ) | | | (186 | ) | | | (12,737 | ) | | | (13,183 | ) | | | (254,148 | ) | | | (50,263 | ) | |
| Net increase (decrease) in net assets from Investor Class Shares transactions | | | 47,935 | | | | 4,335 | | | | 68 | | | | (737 | ) | | | (95,190 | ) | | | 3,023 | | |
| Class C Shares | |
| Proceeds from shares issued | | | 7,401 | | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Proceeds from shares issued in lieu of cash distributions | | | 3 | | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Cost of shares redeemed | | | (197 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Net increase in net assets from Class C Shares transactions | | | 7,207 | | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Net increase (decrease) in net assets from capital share transactions | | | 227,933 | | | | 12,564 | | | | 68 | | | | (737 | ) | | | (126,004 | ) | | | 41,341 | | |
| Total increase (decrease) in net assets | | | 225,808 | | | | 13,248 | | | | 2,951 | | | | (2,608 | ) | | | (92,793 | ) | | | 13,418 | | |
| Net assets: | |
| Beginning of period | | | 13,248 | | | | — | | | | 39,973 | | | | 42,581 | | | | 634,193 | | | | 620,775 | | |
| End of period | | $ | 239,056 | | | $ | 13,248 | | | $ | 42,924 | | | $ | 39,973 | | | $ | 541,400 | | | $ | 634,193 | | |
| Undistributed net investment income (accumulated net investment loss) | | $ | (220 | ) | | $ | (4 | ) | | $ | — | | | $ | 121 | | | $ | 539 | | | $ | 1,903 | | |
| Shares issued and redeemed: | |
| Institutional Class Shares | |
| Issued | | | 17,118 | | | | 804 | | | | — | | | | — | | | | 27,088 | | | | 15,778 | | |
| Issued in lieu of cash distributions | | | 8 | | | | — | | | | — | | | | — | | | | 132 | | | | 185 | | |
| Redeemed | | | (1,333 | ) | | | (1 | ) | | | — | | | | — | | | | (29,854 | )† | | | (12,152 | ) | |
| Net increase (decrease) in Institutional Class Shares | | | 15,793 | | | | 803 | | | | — | | | | — | | | | (2,634 | ) | | | 3,811 | | |
| Investor Class Shares | |
| Issued | | | 5,370 | | | | 441 | | | | 2,002 | | | | 2,606 | | | | 15,470 | | | | 6,605 | | |
| Issued in lieu of cash distributions | | | 4 | | | | — | | | | 18 | | | | — | | | | 56 | | | | 78 | | |
| Redeemed | | | (938 | ) | | | (18 | ) | | | (2,036 | ) | | | (2,824 | ) | | | (25,538 | ) | | | (6,266 | ) | |
| Net increase (decrease) in Investor Class Shares | | | 4,436 | | | | 423 | | | | (16 | ) | | | (218 | ) | | | (10,012 | ) | | | 417 | | |
| Class C Shares | |
| Issued | | | 688 | | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Redeemed | | | (19 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Net increase in Class C Shares | | | 669 | | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Net increase (decrease) in share transactions | | | 20,898 | | | | 1,226 | | | | (16 | ) | | | (218 | ) | | | (12,646 | ) | | | 4,228 | | |
60 TURNER FUNDS 2010 ANNUAL REPORT
| | | Turner
Emerging
Growth Fund | | Turner
Large Cap
Growth Fund | |
| | | year ended
9/30/10 | | year ended
9/30/09 | | year ended
9/30/10 | | year ended
9/30/09 | |
| Investment activities: | |
| Net investment income (loss) | | $ | (3,867 | ) | | $ | (2,463 | ) | | $ | 221 | | | $ | 290 | | |
| Net realized gain (loss) from securities sold and securities sold short | | | 31,561 | | | | (118,692 | ) | | | 1,898 | | | | (7,967 | ) | |
| Net realized gain on written option contracts | | | — | | | | — | | | | — | | | | — | | |
| Net realized loss on foreign currency transactions | | | — | | | | — | | | | — | | | | — | | |
Net change in unrealized appreciation (depreciation) on investments and
securities sold short | | | 22,753 | | | | 35,521 | | | | 10,470 | | | | 11,049 | | |
| Net change in unrealized depreciation on written option contracts | | | — | | | | — | | | | — | | | | — | | |
Net change in unrealized appreciation (depreciation) on foreign currencies and translation
of other assets and liabilities denominated in foreign currencies | | | — | | | | — | | | | — | | | | — | | |
| Net increase (decrease) in net assets resulting from operations | | | 50,447 | | | | (85,634 | ) | | | 12,589 | | | | 3,372 | | |
| Dividends and distributions to shareholders: | |
| Net investment income | |
| Institutional Class Shares | | | — | | | | — | | | | (295 | ) | | | (96 | ) | |
| Investor Class Shares | | | — | | | | — | | | | — | | | | (2 | ) | |
| Realized capital gains | |
| Institutional Class Shares | | | — | | | | — | | | | — | | | | — | | |
| Investor Class Shares | | | — | | | | (12,445 | ) | | | — | | | | — | | |
| Class C Shares | | | — | | | | — | | | | — | | | | — | | |
| Total dividends and distributions | | | — | | | | (12,445 | ) | | | (295 | ) | | | (98 | ) | |
| Capital share transactions: | |
| Institutional Class Shares | |
| Proceeds from shares issued | | | 44,818 | | | | 205,712 | | | | 42,694 | | | | 70,616 | | |
| Proceeds from shares issued in lieu of cash distributions | | | — | | | | — | | | | 293 | | | | 78 | | |
| Cost of shares redeemed | | | (41,796 | ) | | | (8,295 | ) | | | (31,649 | ) | | | (8,117 | ) | |
| Net increase (decrease) in net assets from Institutional Class Shares transactions | | | 3,022 | | | | 197,417 | | | | 11,338 | | | | 62,577 | | |
| Investor Class Shares | |
| Proceeds from shares issued | | | 16,414 | | | | 71,659 | | | | 235 | | | | 938 | | |
| Proceeds from shares issued in lieu of cash distributions | | | — | | | | 12,367 | | | | — | | | | 2 | | |
| Cost of shares redeemed | | | (49,217 | ) | | | (280,340 | ) | | | (477 | ) | | | (297 | ) | |
| Net increase (decrease) in net assets from Investor Class Shares transactions | | | (32,803 | ) | | | (196,314 | ) | | | (242 | ) | | | 643 | | |
| Class C Shares | |
| Proceeds from shares issued | | | — | | | | — | | | | — | | | | — | | |
| Proceeds from shares issued in lieu of cash distributions | | | — | | | | — | | | | — | | | | — | | |
| Cost of shares redeemed | | | — | | | | — | | | | — | | | | — | | |
| Net increase in net assets from Class C Shares transactions | | | — | | | | — | | | | — | | | | — | | |
| Net increase (decrease) in net assets from capital share transactions | | | (29,781 | ) | | | 1,103 | | | | 11,096 | | | | 63,220 | | |
| Total increase (decrease) in net assets | | | 20,666 | | | | (96,976 | ) | | | 23,390 | | | | 66,494 | | |
| Net assets: | |
| Beginning of period | | | 432,602 | | | | 529,578 | | | | 96,131 | | | | 29,637 | | |
| End of period | | $ | 453,268 | | | $ | 432,602 | | | $ | 119,521 | | | $ | 96,131 | | |
| Undistributed net investment income (accumulated net investment loss) | | $ | — | | | $ | — | | | $ | 153 | | | $ | 227 | | |
| Shares issued and redeemed: | |
| Institutional Class Shares | |
| Issued | | | 1,099 | | | | 6,697 | | | | 9,552 | | | | 17,375 | | |
| Issued in lieu of cash distributions | | | — | | | | — | | | | 62 | | | | 23 | | |
| Redeemed | | | (1,049 | ) | | | (244 | ) | | | (6,645 | ) | | | (2,255 | ) | |
| Net increase (decrease) in Institutional Class Shares | | | 50 | | | | 6,453 | | | | 2,969 | | | | 15,143 | | |
| Investor Class Shares | |
| Issued | | | 411 | | | | 2,324 | | | | 51 | | | | 265 | | |
| Issued in lieu of cash distributions | | | — | | | | 411 | | | | — | | | | — | | |
| Redeemed | | | (1,240 | ) | | | (9,137 | ) | | | (103 | ) | | | (76 | ) | |
| Net increase (decrease) in Investor Class Shares | | | (829 | ) | | | (6,402 | ) | | | (52 | ) | | | 189 | | |
| Class C Shares | |
| Issued | | | — | | | | — | | | | — | | | | — | | |
| Redeemed | | | — | | | | — | | | | — | | | | — | | |
| Net increase in Class C Shares | | | — | | | | — | | | | — | | | | — | | |
| Net increase (decrease) in share transactions | | | (779 | ) | | | 51 | | | | 2,917 | | | | 15,332 | | |
(1) Commencement of operations.
† Includes realized gains, losses or redemptions as a result of in-kind transactions (see Note 13 in Notes to Financial Statements.)
^ Includes return of capital of $1 (000).
Amounts designated as "—" are either not applicable, $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2010 ANNUAL REPORT 61
FINANCIAL STATEMENTS
Statements of changes in net assets (000)
| | | Turner
Midcap
Growth Fund | | Turner New
Enterprise
Fund | | Turner
Small Cap
Growth Fund | |
| | | year ended
9/30/10 | | year ended
9/30/09 | | year ended
9/30/10 | | year ended
9/30/09 | | year ended
9/30/10 | | year ended
9/30/09 | |
| Investment activities: | |
| Net investment income (loss) | | $ | (4,906 | ) | | $ | (2,161 | ) | | $ | (344 | ) | | $ | 21 | | | $ | (1,976 | ) | | $ | (715 | ) | |
| Net realized gain (loss) from securities sold | | | 107,778 | | | | (312,396 | )† | | | 3,912 | | | | (9,267 | ) | | | 25,168 | | | | (54,422 | ) | |
| Net change in unrealized appreciation (depreciation) on investments | | | 24,016 | | | | 279,766 | | | | 261 | | | | 9,302 | | | | 14,979 | | | | 44,425 | | |
| Net increase (decrease) in net assets resulting from operations | | | 126,888 | | | | (34,791 | ) | | | 3,829 | | | | 56 | | | | 38,171 | | | | (10,712 | ) | |
| Dividends and distributions to shareholders: | |
| Net investment income | |
| Institutional Class Shares | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Investor Class Shares | | | — | | | | — | | | | (23 | )^ | | | — | | | | — | | | | — | | |
| Total dividends and distributions | | | — | | | | — | | | | (23 | ) | | | — | | | | — | | | | — | | |
| Capital share transactions: | |
| Institutional Class Shares | |
| Proceeds from shares issued | | | 61,281 | | | | 41,508 | | | | — | | | | — | | | | — | | | | — | | |
| Proceeds from shares issued in lieu of cash distributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Cost of shares redeemed | | | (48,879 | ) | | | (43,531 | ) | | | — | | | | — | | | | — | | | | — | | |
| Net increase (decrease) in net assets from Institutional Class Shares transactions | | | 12,402 | | | | (2,023 | ) | | | — | | | | — | | | | — | | | | — | | |
| Investor Class Shares | |
| Proceeds from shares issued | | | 189,151 | | | | 224,510 | | | | 7,014 | | | | 6,399 | | | | 56,625 | | | | 58,406 | | |
| Proceeds from shares issued in lieu of cash distributions | | | — | | | | — | | | | 22 | | | | — | | | | — | | | | — | | |
| Cost of shares redeemed | | | (407,498 | ) | | | (324,371 | )† | | | (13,939 | ) | | | (12,890 | ) | | | (70,731 | ) | | | (46,268 | ) | |
| Net increase (decrease) in net assets from Investor Class Shares transactions | | | (218,347 | ) | | | (99,861 | ) | | | (6,903 | ) | | | (6,491 | ) | | | (14,106 | ) | | | 12,138 | | |
| Retirement Class Shares | |
| Proceeds from shares issued | | | 793 | | | | 1,351 | | | | — | | | | — | | | | — | | | | — | | |
| Cost of shares redeemed | | | (642 | ) | | | (2,855 | ) | | | — | | | | — | | | | — | | | | — | | |
| Net increase (decrease) in net assets from Retirement Class Shares transactions | | | 151 | | | | (1,504 | ) | | | — | | | | — | | | | — | | | | — | | |
| Net increase (decrease) in net assets from capital share transactions | | | (205,794 | ) | | | (103,388 | ) | | | (6,903 | ) | | | (6,491 | ) | | | (14,106 | ) | | | 12,138 | | |
| Total increase (decrease) in net assets | | | (78,906 | ) | | | (138,179 | ) | | | (3,097 | ) | | | (6,435 | ) | | | 24,065 | | | | 1,426 | | |
| Net assets: | |
| Beginning of year | | | 999,601 | | | | 1,137,780 | | | | 26,324 | | | | 32,759 | | | | 250,860 | | | | 249,434 | | |
| End of year | | $ | 920,695 | | | $ | 999,601 | | | $ | 23,227 | | | $ | 26,324 | | | $ | 274,925 | | | $ | 250,860 | | |
| Undistributed net investment income | | $ | — | | | $ | — | | | $ | — | | | $ | 23 | | | $ | — | | | $ | — | | |
| Shares issued and redeemed: | |
| Institutional Class Shares | |
| Issued | | | 2,060 | | | | 2,105 | | | | — | | | | — | | | | — | | | | — | | |
| Issued in lieu of cash distributions | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | |
| Redeemed | | | (1,752 | ) | | | (2,142 | ) | | | — | | | | — | | | | — | | | | — | | |
| Net increase (decrease) in Institutional Class Shares | | | 308 | | | | (37 | ) | | | — | | | | — | | | | — | | | | — | | |
| Investor Class Shares | |
| Issued | | | 6,754 | | | | 11,485 | | | | 1,076 | | | | 1,510 | | | | 2,130 | | | | 2,877 | | |
| Issued in lieu of cash distributions | | | — | | | | — | | | | 4 | | | | — | | | | — | | | | — | | |
| Redeemed | | | (14,508 | ) | | | (16,455 | )† | | | (2,198 | ) | | | (2,941 | ) | | | (2,609 | ) | | | (2,338 | ) | |
| Net increase (decrease) in Investor Class Shares | | | (7,754 | ) | | | (4,970 | ) | | | (1,118 | ) | | | (1,431 | ) | | | (479 | ) | | | 539 | | |
| Retirement Class Shares | |
| Issued | | | 29 | | | | 73 | | | | — | | | | — | | | | — | | | | — | | |
| Redeemed | | | (24 | ) | | | (147 | ) | | | — | | | | — | | | | — | | | | — | | |
| Net increase (decrease) in Retirement Class Shares | | | 5 | | | | (74 | ) | | | — | | | | — | | | | — | | | | — | | |
| Net increase (decrease) in share transactions | | | (7,441 | ) | | | (5,081 | ) | | | (1,118 | ) | | | (1,431 | ) | | | (479 | ) | | | 539 | | |
62 TURNER FUNDS 2010 ANNUAL REPORT
| | | Turner
Quantitative
Broad Market
Equity Fund | | Turner
Quantitative
Large Cap
Value Fund | |
| | | year ended
9/30/10 | | year ended
9/30/09 | | year ended
9/30/10 | | year ended
9/30/09 | |
| Investment activities: | |
| Net investment income (loss) | | $ | 68 | | | $ | 6 | | | $ | 10 | | | $ | 14 | | |
| Net realized gain (loss) from securities sold | | | (473 | ) | | | (141 | ) | | | 104 | | | | (244 | ) | |
| Net change in unrealized appreciation (depreciation) on investments | | | 133 | | | | 114 | | | | (58 | ) | | | 131 | | |
| Net increase (decrease) in net assets resulting from operations | | | (272 | ) | | | (21 | ) | | | 56 | | | | (99 | ) | |
| Dividends and distributions to shareholders: | |
| Net investment income | |
| Institutional Class Shares | | | (7 | ) | | | (4 | ) | | | (13 | ) | | | (14 | ) | |
| Investor Class Shares | | | — | | | | — | | | | — | | | | — | | |
| Total dividends and distributions | | | (7 | ) | | | (4 | ) | | | (13 | ) | | | (14 | ) | |
| Capital share transactions: | |
| Institutional Class Shares | |
| Proceeds from shares issued | | | 12,228 | | | | — | | | | 1 | | | | 109 | | |
| Proceeds from shares issued in lieu of cash distributions | | | 7 | | | | 4 | | | | 13 | | | | 14 | | |
| Cost of shares redeemed | | | (1,525 | ) | | | — | | | | (3 | ) | | | — | | |
| Net increase (decrease) in net assets from Institutional Class Shares transactions | | | 10,710 | | | | 4 | | | | 11 | | | | 123 | | |
| Investor Class Shares | |
| Proceeds from shares issued | | | 15 | | | | 8 | | | | — | | | | 3 | | |
| Proceeds from shares issued in lieu of cash distributions | | | — | | | | — | | | | — | | | | — | | |
| Cost of shares redeemed | | | (5 | ) | | | — | | | | — | | | | — | | |
| Net increase (decrease) in net assets from Investor Class Shares transactions | | | 10 | | | | 8 | | | | — | | | | 3 | | |
| Retirement Class Shares | |
| Proceeds from shares issued | | | — | | | | — | | | | — | | | | — | | |
| Cost of shares redeemed | | | — | | | | — | | | | — | | | | — | | |
| Net increase (decrease) in net assets from Retirement Class Shares transactions | | | — | | | | — | | | | — | | | | — | | |
| Net increase (decrease) in net assets from capital share transactions | | | 10,720 | | | | 12 | | | | 11 | | | | 126 | | |
| Total increase (decrease) in net assets | | | 10,441 | | | | (13 | ) | | | 54 | | | | 13 | | |
| Net assets: | |
| Beginning of year | | | 531 | | | | 544 | | | | 776 | | | | 763 | | |
| End of year | | $ | 10,972 | | | $ | 531 | | | $ | 830 | | | $ | 776 | | �� |
| Undistributed net investment income | | $ | 65 | | | $ | 4 | | | $ | 8 | | | $ | 11 | | |
| Shares issued and redeemed: | |
| Institutional Class Shares | |
| Issued | | | 1,338 | | | | — | | | | — | | | | 16 | | |
| Issued in lieu of cash distributions | | | 1 | | | | 1 | | | | 2 | | | | 2 | | |
| Redeemed | | | (173 | ) | | | — | | | | — | | | | — | | |
| Net increase (decrease) in Institutional Class Shares | | | 1,166 | | | | 1 | | | | 2 | | | | 18 | | |
| Investor Class Shares | |
| Issued | | | 2 | | | | 1 | | | | — | | | | 1 | | |
| Issued in lieu of cash distributions | | | — | | | | — | | | | — | | | | — | | |
| Redeemed | | | (1 | ) | | | — | | | | — | | | | — | | |
| Net increase (decrease) in Investor Class Shares | | | 1 | | | | 1 | | | | — | | | | 1 | | |
| Retirement Class Shares | |
| Issued | | | — | | | | — | | | | — | | | | — | | |
| Redeemed | | | — | | | | — | | | | — | | | | — | | |
| Net increase (decrease) in Retirement Class Shares | | | — | | | | — | | | | — | | | | — | | |
| Net increase (decrease) in share transactions | | | 1,167 | | | | 2 | | | | 2 | | | | 19 | | |
† Includes realized gains, losses or redemptions as a result of in-kind transactions (see Note 13 in Notes to Financial Statements).
^ Includes return of capital of $1 (000).
Amounts designated as "—" are either not applicable, $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2010 ANNUAL REPORT 63
FINANCIAL STATEMENTS
Statements of changes in net assets (000)
| | | Turner
Global
Opportunities
Fund | | Turner
International
Core Growth
Fund | |
| | | 5/7/10(1) thru
9/30/10 | | year ended
9/30/10 | | year ended
9/30/09 | |
| Investment activities: | |
| Net investment income (loss) | | $ | (1 | ) | | $ | 24 | | | $ | 38 | | |
| Net realized gain (loss) from securities sold | | | (4 | ) | | | 465 | | | | (1,030 | ) | |
| Net realized loss on foreign currency transactions | | | (1 | ) | | | (12 | ) | | | (8 | ) | |
| Net change in unrealized appreciation (depreciation) on investments | | | 159 | | | | 187 | | | | 1,208 | | |
Net change in unrealized appreciation on foreign currencies and
translation of other assets and liabilities denominated in foreign currencies | | | — | | | | — | | | | 2 | | |
| Net increase (decrease) in net assets resulting from operations | | | 153 | | | | 664 | | | | 210 | | |
| Dividends and distributions to shareholders: | |
| Net investment income | |
| Institutional Class Shares | | | — | | | | (59 | ) | | | (42 | ) | |
| Investor Class Shares | | | — | | | | — | | | | — | | |
| Realized capital gains | |
| Investor Class Shares | | | — | | | | — | | | | — | | |
| Total dividends and distributions | | | — | | | | (59 | ) | | | (42 | ) | |
| Capital share transactions: | |
| Institutional Class Shares | |
| Proceeds from shares issued | | | 1,000 | | | | 518 | | | | 433 | | |
| Proceeds from shares issued in lieu of cash distributions | | | — | | | | 59 | | | | 42 | | |
| Cost of shares redeemed | | | — | | | | — | | | | (130 | ) | |
| Net increase (decrease) in net assets from Institutional Class Shares transactions | | | 1,000 | | | | 577 | | | | 345 | | |
| Investor Class Shares | |
| Proceeds from shares issued | | | — | | | | 135 | | | | — | | |
| Proceeds from shares issued in lieu of cash distributions | | | — | | | | — | | | | — | | |
| Cost of shares redeemed | | | — | | | | (36 | ) | | | — | | |
| Net increase (decrease) in net assets from Investor Class Shares transactions | | | — | | | | 99 | | | | — | | |
| Net increase (decrease) in net assets from capital share transactions | | | 1,000 | | | | 676 | | | | 345 | | |
| Total increase (decrease) in net assets | | | 1,153 | | | | 1,281 | | | | 513 | | |
| Net assets: | |
| Beginning of period | | | — | | | | 3,848 | | | | 3,335 | | |
| End of period | | $ | 1,153 | | | $ | 5,129 | | | $ | 3,848 | | |
| Undistributed net investment income (distributions in excess of net investment income) | | $ | — | | | $ | (14 | ) | | $ | 4 | | |
| Shares issued and redeemed: | |
| Institutional Class Shares | |
| Issued | | | 100 | | | | 60 | | | | 77 | | |
| Issued in lieu of cash distributions | | | — | | | | 7 | | | | 7 | | |
| Redeemed | | | — | | | | — | | | | (17 | ) | |
| Net increase (decrease) in Institutional Class Shares | | | 100 | | | | 67 | | | | 67 | | |
| Investor Class Shares | |
| Issued | | | — | | | | 16 | | | | — | | |
| Issued in lieu of cash distributions | | | — | | | | — | | | | — | | |
| Redeemed | | | — | | | | (4 | ) | | | — | | |
| Net increase (decrease) in Investor Class Shares | | | — | | | | 12 | | | | — | | |
| Net increase (decrease) in share transactions | | | 100 | | | | 79 | | | | 67 | | |
64 TURNER FUNDS 2010 ANNUAL REPORT
| | | Turner
Small Cap
Equity Fund | |
| | | year ended
9/30/10 | | year ended
9/30/09 | |
| Investment activities: | |
| Net investment income (loss) | | $ | 38 | | | $ | 8 | | |
| Net realized gain (loss) from securities sold | | | 4,883 | | | | (7,158 | ) | |
| Net realized loss on foreign currency transactions | | | — | | | | — | | |
| Net change in unrealized appreciation (depreciation) on investments | | | (3,478 | ) | | | 4,120 | | |
Net change in unrealized appreciation on foreign currencies and
translation of other assets and liabilities denominated in foreign currencies | | | — | | | | — | | |
| Net increase (decrease) in net assets resulting from operations | | | 1,443 | | | | (3,030 | ) | |
| Dividends and distributions to shareholders: | |
| Net investment income | |
| Institutional Class Shares | | | — | | | | — | | |
| Investor Class Shares | | | — | | | | — | | |
| Realized capital gains | |
| Investor Class Shares | | | — | | | | (17 | ) | |
| Total dividends and distributions | | | — | | | | (17 | ) | |
| Capital share transactions: | |
| Institutional Class Shares | |
| Proceeds from shares issued | | | 723 | | | | 4,588 | | |
| Proceeds from shares issued in lieu of cash distributions | | | — | | | | — | | |
| Cost of shares redeemed | | | (6,351 | ) | | | (212 | ) | |
| Net increase (decrease) in net assets from Institutional Class Shares transactions | | | (5,628 | ) | | | 4,376 | | |
| Investor Class Shares | |
| Proceeds from shares issued | | | 1,249 | | | | 16,333 | | |
| Proceeds from shares issued in lieu of cash distributions | | | — | | | | 15 | | |
| Cost of shares redeemed | | | (19,715 | ) | | | (12,786 | ) | |
| Net increase (decrease) in net assets from Investor Class Shares transactions | | | (18,466 | ) | | | 3,562 | | |
| Net increase (decrease) in net assets from capital share transactions | | | (24,094 | ) | | | 7,938 | | |
| Total increase (decrease) in net assets | | | (22,651 | ) | | | 4,891 | | |
| Net assets: | |
| Beginning of period | | | 29,099 | | | | 24,208 | | |
| End of period | | $ | 6,448 | | | $ | 29,099 | | |
| Undistributed net investment income (distributions in excess of net investment income) | | $ | 20 | | | $ | 6 | | |
| Shares issued and redeemed: | |
| Institutional Class Shares | |
| Issued | | | 69 | | | | 579 | | |
| Issued in lieu of cash distributions | | | — | | | | — | | |
| Redeemed | | | (597 | ) | | | (25 | ) | |
| Net increase (decrease) in Institutional Class Shares | | | (528 | ) | | | 554 | | |
| Investor Class Shares | |
| Issued | | | 124 | | | | 1,861 | | |
| Issued in lieu of cash distributions | | | — | | | | 2 | | |
| Redeemed | | | (1,976 | ) | | | (1,554 | ) | |
| Net increase (decrease) in Investor Class Shares | | | (1,852 | ) | | | 309 | | |
| Net increase (decrease) in share transactions | | | (2,380 | ) | | | 863 | | |
(1) Commencement of operations.
Amounts designated as "—" are either not applicable, $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2010 ANNUAL REPORT 65
FINANCIAL STATEMENTS
Statement of cash flows (000)
| | | Turner
Spectrum
Fund | |
| | | year ended
9/30/10 | |
| Cash flows from operating activities: | |
| Net decrease in net assets resulting from operations | | $ | (1,983 | ) | |
Adjustments to reconcile net decrease in net assets resulting
from operations to net cash used in operating activities | |
| Purchases of long-term portfolio investments | | | (1,405,515 | ) | |
| Proceeds from sales of long-term portfolio investments | | | 1,252,874 | | |
| Purchases of short-term portfolio investments | | | (38,330 | ) | |
| Proceeds from sales of short-term investments | | | 6,287 | | |
| Payments to cover securities sold short | | | (1,039,708 | ) | |
| Proceeds from securities sold short | | | 1,143,568 | | |
| Realized gain on written option contracts | | | (247 | ) | |
| Realized losses from securities sold and securities sold short | | | 6,861 | | |
| Premiums received from written option contracts | | | 1,525 | | |
| Premiums paid to closed option contracts | | | (1,039 | ) | |
| Change in unrealized appreciation on investments | | | (7,804 | ) | |
| Change in unrealized depreciation on written option contracts | | | 56 | | |
| Change in unrealized depreciation on securities sold short | | | 1,567 | | |
| Increase in deposits with brokers for securities sold short | | | (152,845 | ) | |
| Increase in receivable for investment securities sold | | | (28,223 | ) | |
| Decrease in receivable from investment adviser | | | 17 | | |
| Increase in prepaid expenses | | | (63 | ) | |
| Decrease in unrealized appreciation on spot foreign currency contracts | | | 38 | | |
| Increase in receivable for dividend income | | | (60 | ) | |
| Increase in reclaim receivable | | | (1 | ) | |
| Increase in payable for investment securities purchased | | | 36,753 | | |
| Increase in broker fees and charges on short sales payable | | | 66 | | |
| Increase in payable due to shareholder servicing | | | 21 | | |
| Increase in payable due to distributor | | | 4 | | |
| Decrease in payable due to administrator | | | (1 | ) | |
| Increase in dividends payable on securities sold short | | | 52 | | |
| Decrease in unrealized depreciation on spot foreign currency contracts | | | (38 | ) | |
| Increase in other accrued expenses | | | 32 | | |
| Net cash used in operating activities | | | (226,136 | ) | |
| Cash flows from financing activities: | |
| Proceeds from shares issued | | | 250,726 | | |
| Cost of shares redeemed | | | (24,484 | ) | |
| Distributions from capital gains | | | (8 | ) | |
| Net cash provided by financing activities | | | 226,234 | | |
| Net increase in cash | | | 98 | | |
| Cash overdraft — beginning of year | | | (98 | ) | |
| Cash — end of year | | $ | — | | |
Non-cash
Capital shares sold receivable | | $ | (1,650 | ) | |
| Capital shares redeemed payable | | | 93 | | |
| Reinvestments of distributions | | | (134 | ) | |
The accompanying notes are an integral part of the financial statements.
66 TURNER FUNDS 2010 ANNUAL REPORT
THIS PAGE WAS INTENTIONALLY LEFT BLANK
TURNER FUNDS 2010 ANNUAL REPORT 67
FINANCIAL STATEMENTS
Financial highlights
For a share outstanding throughout each period
| | | Net asset
value,
beginning
of period | | Net
investment
income
(loss) | | Realized and
unrealized
gains (losses)
on investments | | Total
from
investment
operations | | Dividends
from net
investment
income | | Distributions
from
capital
gains | | Total
dividends and
distributions | | Net asset
value, end
of period | |
| Turner Spectrum Fund — Institutional Class Shares | | | |
| | 2010 | | | $ | 10.81 | | | | (0.13 | ) (1) | | | 0.21 | (5) | | | 0.08 | | | | — | | | | (0.07 | ) | | | (0.07 | ) | | $ | 10.82 | | |
| | 2009 | (3) | | $ | 10.00 | | | | (0.07 | ) (1) | | | 0.88 | | | | 0.81 | | | | — | | | | — | | | | — | | | $ | 10.81 | | |
| Turner Spectrum Fund — Investor Class Shares | | | |
| | 2010 | | | $ | 10.80 | | | | (0.16 | ) (1) | | | 0.21 | (5) | | | 0.05 | | | | — | | | | (0.07 | ) | | | (0.07 | ) | | $ | 10.78 | | |
| | 2009 | (3) | | $ | 10.00 | | | | (0.09 | ) (1) | | | 0.89 | | | | 0.80 | | | | — | | | | — | | | | — | | | $ | 10.80 | | |
| Turner Spectrum Fund — Class C Shares | | | |
| | 2010 | | | $ | 10.80 | | | | (0.24 | ) (1) | | | 0.23 | (5) | | | (0.01 | ) | | | — | | | | (0.07 | ) | | | (0.07 | ) | | $ | 10.72 | | |
| | 2009 | (4) | | $ | 9.98 | | | | (0.07 | ) (1) | | | 0.89 | | | | 0.82 | | | | — | | | | — | | | | — | | | $ | 10.80 | | |
| Turner Concentrated Growth Fund — Investor Class Shares | | | |
| | 2010 | | | $ | 6.16 | | | | (0.07 | ) (1) | | | 0.56 | | | | 0.49 | | | | (0.02 | ) | | | — | | | | (0.02 | ) | | $ | 6.63 | | |
| | 2009 | | | $ | 6.35 | | | | 0.02 | (1) | | | (0.21 | ) | | | (0.19 | ) | | | — | | | | — | | | | — | | | $ | 6.16 | | |
| | 2008 | | | $ | 10.12 | | | | (0.07 | ) (1) | | | (3.70 | ) | | | (3.77 | ) | | | — | | | | — | | | | — | | | $ | 6.35 | | |
| | 2007 | | | $ | 7.60 | | | | (0.05 | ) (1) | | | 2.57 | | | | 2.52 | | | | — | | | | — | | | | — | | | $ | 10.12 | | |
| | 2006 | | | $ | 7.10 | | | | (0.08 | ) (1) | | | 0.58 | | | | 0.50 | | | | — | | | | — | | | | — | | | $ | 7.60 | | |
| Turner Core Growth Fund — Institutional Class Shares | | | |
| | 2010 | | | $ | 9.93 | | | | 0.02 | (1) | | | 0.65 | | | | 0.67 | | | | (0.04 | ) | | | — | | | | (0.04 | ) | | $ | 10.56 | | |
| | 2009 | | | $ | 10.41 | | | | 0.05 | (1) | | | (0.48 | ) | | | (0.43 | ) | | | (0.05 | ) | | | — | | | | (0.05 | ) | | $ | 9.93 | | |
| | 2008 | | | $ | 14.39 | | | | 0.06 | (1) | | | (4.01 | ) | | | (3.95 | ) | | | (0.03 | ) | | | — | | | | (0.03 | ) | | $ | 10.41 | | |
| | 2007 | | | $ | 11.65 | | | | 0.02 | | | | 2.77 | | | | 2.79 | | | | (0.05 | ) | | | — | | | | (0.05 | ) | | $ | 14.39 | | |
| | 2006 | | | $ | 10.93 | | | | 0.06 | | | | 0.69 | | | | 0.75 | | | | (0.03 | ) | | | — | | | | (0.03 | ) | | $ | 11.65 | | |
| Turner Core Growth Fund — Investor Class Shares | | | |
| | 2010 | | | $ | 9.87 | | | | — | * (1) | | | 0.64 | | | | 0.64 | | | | (0.02 | ) | | | — | | | | (0.02 | ) | | $ | 10.49 | | |
| | 2009 | | | $ | 10.34 | | | | 0.03 | (1) | | | (0.47 | ) | | | (0.44 | ) | | | (0.03 | ) | | | — | | | | (0.03 | ) | | $ | 9.87 | | |
| | 2008 | | | $ | 14.33 | | | | 0.02 | (1) | | | (3.99 | ) | | | (3.97 | ) | | | (0.02 | ) | | | — | | | | (0.02 | ) | | $ | 10.34 | | |
| | 2007 | | | $ | 11.61 | | | | 0.02 | | | | 2.73 | | | | 2.75 | | | | (0.03 | ) | | | — | | | | (0.03 | ) | | $ | 14.33 | | |
| | 2006 | | | $ | 10.93 | | | | 0.07 | | | | 0.64 | | | | 0.71 | | | | (0.03 | ) | | | — | | | | (0.03 | ) | | $ | 11.61 | | |
| Turner Emerging Growth Fund — Institutional Class Shares | | | |
| | 2010 | | | $ | 37.78 | | | | (0.31 | ) (1) | | | 5.04 | | | | 4.73 | | | | — | | | | — | | | | — | | | $ | 42.51 | | |
| | 2009 | (2) | | $ | 28.45 | | | | (0.12 | ) (1) | | | 9.45 | (5) | | | 9.33 | | | | — | | | | — | | | | — | | | $ | 37.78 | | |
| Turner Emerging Growth Fund — Investor Class Shares | | | |
| | 2010 | | | $ | 37.71 | | | | (0.41 | ) (1) | | | 5.02 | | | | 4.61 | | | | — | | | | — | | | | — | | | $ | 42.32 | | |
| | 2009 | | | $ | 46.42 | | | | (0.22 | ) (1) | | | (7.31 | ) | | | (7.53 | ) | | | — | | | | (1.18 | ) | | | (1.18 | ) | | $ | 37.71 | | |
| | 2008 | | | $ | 64.06 | | | | (0.35 | ) (1) | | | (8.54 | ) | | | (8.89 | ) | | | (0.25 | ) | | | (8.50 | ) | | | (8.75 | ) | | $ | 46.42 | | |
| | 2007 | | | $ | 55.97 | | | | (0.30 | ) (1) | | | 13.61 | | | | 13.31 | | | | — | | | | (5.22 | ) | | | (5.22 | ) | | $ | 64.06 | | |
| | 2006 | | | $ | 56.46 | | | | (0.32 | ) (1) | | | 3.02 | | | | 2.70 | | | | — | | | | (3.19 | ) | | | (3.19 | ) | | $ | 55.97 | | |
| Turner Large Cap Growth Fund — Institutional Class Shares | | | |
| | 2010 | | | $ | 4.41 | | | | 0.01 | (1) | | | 0.43 | | | | 0.44 | | | | (0.01 | ) | | | — | | | | (0.01 | ) | | $ | 4.84 | | |
| | 2009 | | | $ | 4.59 | | | | 0.03 | (1) | | | (0.20 | ) (5) | | | (0.17 | ) | | | (0.01 | ) | | | — | | | | (0.01 | ) | | $ | 4.41 | | |
| | 2008 | | | $ | 6.78 | | | | 0.01 | (1) | | | (2.19 | ) | | | (2.18 | ) | | | (0.01 | ) | | | — | | | | (0.01 | ) | | $ | 4.59 | | |
| | 2007 | | | $ | 5.58 | | | | 0.01 | (1) | | | 1.21 | | | | 1.22 | | | | (0.02 | ) | | | — | | | | (0.02 | ) | | $ | 6.78 | | |
| | 2006 | | | $ | 5.41 | | | | 0.01 | (1) | | | 0.17 | | | | 0.18 | | | | (0.01 | ) | | | — | | | | (0.01 | ) | | $ | 5.58 | | |
68 TURNER FUNDS 2010 ANNUAL REPORT
| | | Total
return | | Net
assets end
of period
(000) | | Ratio of
net expenses
to average
net assets†† | | Ratio of
net expenses
to average
net assets | | Ratio of total
expenses
to average
net assets | | Ratio of net
investment
income (loss)
to average
net assets†† | | Portfolio
turnover
rate††† | |
| Turner Spectrum Fund — Institutional Class Shares | |
| | 2010 | | | | 0.77 | % | | $ | 179,526 | | | | 1.91 | % (7) | | | 1.91 | % (7) | | | 2.85 | % | | | (1.23 | )% | | | 1,808 | % | |
| | 2009 | (3) | | | 8.10 | %† | | $ | 8,681 | | | | 2.44 | % (6) | | | 2.44 | % (6) | | | 5.63 | % | | | (1.78 | )% | | | 663 | % | |
| Turner Spectrum Fund — Investor Class Shares | |
| | 2010 | | | | 0.49 | % | | $ | 52,361 | | | | 2.17 | % (7) | | | 2.17 | % (7) | | | 3.12 | % | | | (1.52 | )% | | | 1,808 | % | |
| | 2009 | (3) | | | 8.00 | %† | | $ | 4,567 | | | | 2.71 | % (6) | | | 2.71 | % (6) | | | 5.84 | % | | | (2.09 | )% | | | 663 | % | |
| Turner Spectrum Fund — Class C Shares | |
| | 2010 | | | | (0.07 | )% | | $ | 7,169 | | | | 2.92 | % (7) | | | 2.92 | % (7) | | | 3.82 | % | | | (2.19 | )% | | | 1,808 | % | |
| | 2009 | (4) | | | 8.22 | %† | | $ | — | | | | 2.35 | % (6) | | | 2.35 | % (6) | | | 5.28 | % | | | (3.12 | )% | | | 663 | % | |
| Turner Concentrated Growth Fund — Investor Class Shares | |
| | 2010 | | | | 7.94 | % | | $ | 42,924 | | | | 1.51 | % | | | 1.51 | % | | | 1.94 | % | | | (1.14 | )% | | | 215 | % | |
| | 2009 | | | | (2.99 | )% | | $ | 39,973 | | | | 0.82 | % | | | 0.82 | % | | | 1.34 | % | | | 0.38 | % | | | 208 | % | |
| | 2008 | | | | (37.25 | )% | | $ | 42,581 | | | | 1.53 | % | | | 1.54 | % | | | 1.91 | % | | | (0.83 | )% | | | 348 | % | |
| | 2007 | | | | 33.16 | % | | $ | 61,401 | | | | 1.11 | % | | | 1.11 | % | | | 1.46 | % | | | (0.57 | )% | | | 220 | % | |
| | 2006 | | | | 7.04 | % | | $ | 38,180 | | | | 1.59 | % | | | 1.59 | % | | | 1.79 | % | | | (1.01 | )% | | | 251 | % | |
| Turner Core Growth Fund — Institutional Class Shares | |
| | 2010 | | | | 6.76 | % | | $ | 377,650 | | | | 0.69 | % | | | 0.69 | % | | | 0.87 | % | | | 0.20 | % | | | 178 | % | |
| | 2009 | | | | (3.97 | )% | | $ | 381,277 | | | | 0.69 | % | | | 0.69 | % | | | 0.92 | % | | | 0.65 | % | | | 126 | % | |
| | 2008 | | | | (27.53 | )% | | $ | 360,083 | | | | 0.69 | % | | | 0.69 | % | | | 0.90 | % | | | 0.42 | % | | | 200 | % | |
| | 2007 | | | | 24.00 | % | | $ | 237,778 | | | | 0.68 | % | | | 0.68 | % | | | 1.06 | % | | | 0.42 | % | | | 103 | % | |
| | 2006 | | | | 6.91 | % | | $ | 71,935 | | | | 0.59 | % | | | 0.59 | % | | | 1.20 | % | | | 0.77 | % | | | 124 | % | |
| Turner Core Growth Fund — Investor Class Shares | |
| | 2010 | | | | 6.51 | % | | $ | 163,750 | | | | 0.94 | % | | | 0.94 | % | | | 1.12 | % | | | (0.05 | )% | | | 178 | % | |
| | 2009 | | | | (4.21 | )% | | $ | 252,916 | | | | 0.94 | % | | | 0.94 | % | | | 1.17 | % | | | 0.41 | % | | | 126 | % | |
| | 2008 | | | | (27.76 | )% | | $ | 260,692 | | | | 0.94 | % | | | 0.94 | % | | | 1.15 | % | | | 0.15 | % | | | 200 | % | |
| | 2007 | | | | 23.68 | % | | $ | 37,541 | | | | 0.94 | % | | | 0.94 | % | | | 1.31 | % | | | 0.15 | % | | | 103 | % | |
| | 2006 | | | | 6.52 | % | | $ | 23,418 | | | | 0.94 | % | | | 0.94 | % | | | 1.43 | % | | | 0.23 | % | | | 124 | % | |
| Turner Emerging Growth Fund — Institutional Class Shares | |
| | 2010 | | | | 12.52 | % | | $ | 276,445 | | | | 1.15 | % | | | 1.15 | % | | | 1.28 | % | | | (0.77 | )% | | | 96 | % | |
| | 2009 | (2) | | | 32.79 | %† | | $ | 243,790 | | | | 1.15 | % | | | 1.15 | % | | | 1.33 | % | | | (0.54 | )% | | | 78 | % | |
| Turner Emerging Growth Fund — Investor Class Shares | |
| | 2010 | | | | 12.22 | % | | $ | 176,823 | | | | 1.40 | % | | | 1.40 | % | | | 1.53 | % | | | (1.02 | )% | | | 96 | % | |
| | 2009 | | | | (15.58 | )% | | $ | 188,812 | | | | 1.40 | % | | | 1.40 | % | | | 1.56 | % | | | (0.71 | )% | | | 78 | % | |
| | 2008 | | | | (16.08 | )% | | $ | 529,578 | | | | 1.40 | % | | | 1.40 | % | | | 1.49 | % | | | (0.66 | )% | | | 71 | % | |
| | 2007 | | | | 25.08 | % | | $ | 638,037 | | | | 1.40 | % | | | 1.40 | % | | | 1.48 | % | | | (0.50 | )% | | | 88 | % | |
| | 2006 | | | | 4.95 | % | | $ | 565,227 | | | | 1.40 | % | | | 1.40 | % | | | 1.44 | % | | | (0.57 | )% | | | 78 | % | |
| Turner Large Cap Growth Fund — Institutional Class Shares | |
| | 2010 | | | | 10.00 | % | | $ | 118,164 | | | | 0.69 | % | | | 0.69 | % | | | 0.99 | % | | | 0.19 | % | | | 149 | % | |
| | 2009 | | | | (3.52 | )% | | $ | 94,664 | | | | 0.69 | % | | | 0.69 | % | | | 1.21 | % | | | 0.75 | % | | | 107 | % | |
| | 2008 | | | | (32.16 | )% | | $ | 28,975 | | | | 0.69 | % | | | 0.69 | % | | | 1.09 | % | | | 0.21 | % | | | 213 | % | |
| | 2007 | | | | 21.86 | % | | $ | 37,814 | | | | 0.70 | % | | | 0.70 | % | | | 1.23 | % | | | 0.23 | % | | | 119 | % | |
| | 2006 | | | | 3.40 | % | | $ | 19,510 | | | | 0.75 | % | | | 0.75 | % | | | 1.16 | % | | | 0.26 | % | | | 194 | % | |
* Amount represents less than $0.01 per share.
† Total return is for the period indicated and has not been annualized.
†† Inclusive of fees paid indirectly, waivers and/or reimbursements.
††† Excludes effect of in-kind transfers and mergers, as applicable.
(1) Based on average shares outstanding.
(2) Commenced operations on February 1, 2009. All ratios for the period have been annualized.
(3) Commenced operations on May 7, 2009. All ratios for the period have been annualized.
(4) Commenced operations on July 14, 2009. All ratios for the period have been annualized.
(5) The amount shown for a share outstanding throughout the period does not accord with the aggregate net losses on investments for the period because of the sales and repurchases of fund shares in relation to fluctuating market value of the investments of the Fund.
(6) Dividend expense totaled 0.70% of average net assets for the period ended September 30, 2009. If dividend expense had not been contractually waived, the ratios of net expenses to average net assets would have been 3.14%, 3.41% and 3.05% for the Institutional, Investor and Class C Shares, respectively. If broker fees and charges on short sales had not been included, the ratios of net expenses to average net assets would have been 1.94%, 2.20% and 1.95% for the Institutional, Investor and Class C Shares, respectively.
(7) Dividend expense totaled 0.45% of average net assets for the year ended September 30, 2010, 0.42% of which was waived. Broker fees and charges on short sales totaled 0.38% of average net assets for the year ended September 30, 2010, 0.37% of which was waived beginning on January 13, 2010. If dividend expense and broker fees and charges on short sales had not been contractually waived, the ratios of net expenses to average net assets would have been 2.70%, 2.96%, and 3.71% for the Institutional, Investor and Class C Shares, respectively.
Amounts de signated as "—" are either $0, not applicable or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2010 ANNUAL REPORT 69
FINANCIAL STATEMENTS
Financial highlights
For a share outstanding throughout each period
| | | Net asset
value,
beginning
of period | | Net
investment
income
(loss) | | Realized and
unrealized
gains (losses)
on investments | | Total
from
investment
operations | | Dividends
from net
investment
income | | Distributions
from
capital
gains | | Total
dividends and
distributions | | Net asset
value, end
of period | |
| Turner Large Cap Growth Fund — Investor Class Shares | | | |
| | 2010 | | | $ | 4.39 | | | | — | * (1) | | | 0.42 | | | | 0.42 | | | | — | * | | | — | | | | — | * | | $ | 4.81 | | |
| | 2009 | | | $ | 4.57 | | | | 0.02 | (1) | | | (0.19 | ) (3) | | | (0.17 | ) | | | (0.01 | ) | | | — | | | | (0.01 | ) | | $ | 4.39 | | |
| | 2008 | | | $ | 6.77 | | | | — | * (1) | | | (2.19 | ) | | | (2.19 | ) | | | (0.01 | ) | | | — | | | | (0.01 | ) | | $ | 4.57 | | |
| | 2007 | (4) | | $ | 5.92 | | | | 0.01 | (1) | | | 0.84 | | | | 0.85 | | | | — | | | | — | | | | — | | | $ | 6.77 | | |
| Turner Midcap Growth Fund — Institutional Class Shares | | | |
| | 2010 | | | $ | 26.12 | | | | (0.08 | ) (1) | | | 3.86 | | | | 3.78 | | | | — | | | | — | | | | — | | | $ | 29.90 | | |
| | 2009 | | | $ | 26.20 | | | | (0.01 | ) (1) | | | (0.07 | ) | | | (0.08 | ) | | | — | | | | — | | | | — | | | $ | 26.12 | | |
| | 2008 | (2) | | $ | 34.67 | | | | (0.01 | ) (1) | | | (8.46 | ) | | | (8.47 | ) | | | — | | | | — | | | | — | | | $ | 26.20 | | |
| Turner Midcap Growth Fund — Investor Class Shares | | | |
| | 2010 | | | $ | 26.03 | | | | (0.15 | ) (1) | | | 3.85 | | | | 3.70 | | | | — | | | | — | | | | — | | | $ | 29.73 | | |
| | 2009 | | | $ | 26.18 | | | | (0.06 | ) (1) | | | (0.09 | ) | | | (0.15 | ) | | | — | | | | — | | | | — | | | $ | 26.03 | | |
| | 2008 | | | $ | 35.71 | | | | (0.14 | ) (1) | | | (9.39 | ) | | | (9.53 | ) | | | — | | | | — | | | | — | | | $ | 26.18 | | |
| | 2007 | | | $ | 27.63 | | | | (0.20 | ) (1) | | | 8.28 | | | | 8.08 | | | | — | | | | — | | | | — | | | $ | 35.71 | | |
| | 2006 | | | $ | 26.39 | | | | (0.08 | ) (1) | | | 1.32 | | | | 1.24 | | | | — | | | | — | | | | — | | | $ | 27.63 | | |
| Turner Midcap Growth Fund — Retirement Class Shares | | | |
| | 2010 | | | $ | 25.20 | | | | (0.21 | ) (1) | | | 3.72 | | | | 3.51 | | | | — | | | | — | | | | — | | | $ | 28.71 | | |
| | 2009 | | | $ | 25.40 | | | | (0.11 | ) (1) | | | (0.09 | ) | | | (0.20 | ) | | | — | | | | — | | | | — | | | $ | 25.20 | | |
| | 2008 | | | $ | 34.74 | | | | (0.22 | ) (1) | | | (9.12 | ) | | | (9.34 | ) | | | — | | | | — | | | | — | | | $ | 25.40 | | |
| | 2007 | | | $ | 26.96 | | | | (0.30 | ) (1) | | | 8.08 | | | | 7.78 | | | | — | | | | — | | | | — | | | $ | 34.74 | | |
| | 2006 | | | $ | 25.89 | | | | (0.23 | ) (1) | | | 1.30 | | | | 1.07 | | | | — | | | | — | | | | — | | | $ | 26.96 | | |
| Turner New Enterprise Fund — Investor Class Shares | | | |
| | 2010 | | | $ | 5.95 | | | | (0.09 | ) (1) | | | 1.18 | | | | 1.09 | | | | (0.01 | ) | | | — | | | | (0.01 | ) | | $ | 7.03 | | |
| | 2009 | | | $ | 5.60 | | | | — | * (1) | | | 0.35 | | | | 0.35 | | | | — | | | | — | | | | — | | | $ | 5.95 | | |
| | 2008 | | | $ | 8.72 | | | | (0.07 | ) (1) | | | (3.05 | ) | | | (3.12 | ) | | | — | | | | — | | | | — | | | $ | 5.60 | | |
| | 2007 | | | $ | 6.26 | | | | (0.07 | ) (1) | | | 2.53 | | | | 2.46 | | | | — | | | | — | | | | — | | | $ | 8.72 | | |
| | 2006 | | | $ | 5.86 | | | | (0.07 | ) (1) | | | 0.47 | (3) | | | 0.40 | | | | — | | | | — | | | | — | | | $ | 6.26 | | |
| Turner Small Cap Growth Fund — Investor Class Shares | | | |
| | 2010 | | | $ | 25.17 | | | | (0.20 | ) (1) | | | 4.00 | | | | 3.80 | | | | — | | | | — | | | | — | | | $ | 28.97 | | |
| | 2009 | | | $ | 26.45 | | | | (0.07 | ) (1) | | | (1.21 | ) | | | (1.28 | ) | | | — | | | | — | | | | — | | | $ | 25.17 | | |
| | 2008 | | | $ | 32.98 | | | | (0.15 | ) (1) | | | (6.38 | ) | | | (6.53 | ) | | | — | | | | — | | | | — | | | $ | 26.45 | | |
| | 2007 | �� | | $ | 26.17 | | | | (0.20 | ) (1) | | | 7.01 | | | | 6.81 | | | | — | | | | — | | | | — | | | $ | 32.98 | | |
| | 2006 | | | $ | 24.68 | | | | (0.21 | ) (1) | | | 1.70 | | | | 1.49 | | | | — | | | | — | | | | — | | | $ | 26.17 | | |
| Turner Quantitative Broad Market Equity Fund — Institutional Class Shares | | | |
| | 2010 | | | $ | 8.31 | | | | 0.10 | (1) | | | 0.59 | (3) | | | 0.69 | | | | (0.09 | ) | | | — | | | | (0.09 | ) | | $ | 8.91 | | |
| | 2009 | | | $ | 8.73 | | | | 0.11 | (1) | | | (0.47 | ) | | | (0.36 | ) | | | (0.06 | ) | | | — | | | | (0.06 | ) | | $ | 8.31 | | |
| | 2008 | (5) | | $ | 10.00 | | | | 0.04 | (1) | | | (1.31 | ) | | | (1.27 | ) | | | — | | | | — | | | | — | | | $ | 8.73 | | |
| Turner Quantitative Broad Market Equity Fund — Investor Class Shares | | | |
| | 2010 | | | $ | 8.30 | | | | 0.08 | (1) | | | 0.58 | (3) | | | 0.66 | | | | (0.08 | ) | | | — | | | | (0.08 | ) | | $ | 8.88 | | |
| | 2009 | | | $ | 8.72 | | | | 0.08 | (1) | | | (0.45 | ) | | | (0.37 | ) | | | (0.05 | ) | | | — | | | | (0.05 | ) | | $ | 8.30 | | |
| | 2008 | (5) | | $ | 10.00 | | | | 0.03 | (1) | | | (1.31 | ) | | | (1.28 | ) | | | — | | | | — | | | | — | | | $ | 8.72 | | |
70 TURNER FUNDS 2010 ANNUAL REPORT
| | | Total
return | | Net
assets end
of period
(000) | | Ratio of
net expenses
to average
net assets†† | | Ratio of
net expenses
to average
net assets | | Ratio of total
expenses
to average
net assets | | Ratio of net
investment
income (loss)
to average
net assets†† | | Portfolio
turnover
rate††† | |
| Turner Large Cap Growth Fund — Investor Class Shares | |
| | 2010 | | | | 9.58 | % | | $ | 1,357 | | | | 0.94 | % | | | 0.94 | % | | | 1.24 | % | | | (0.07 | )% | | | 149 | % | |
| | 2009 | | | | (3.73 | )% | | $ | 1,467 | | | | 0.94 | % | | | 0.94 | % | | | 1.47 | % | | | 0.58 | % | | | 107 | % | |
| | 2008 | | | | (32.40 | )% | | $ | 662 | | | | 0.94 | % | | | 0.94 | % | | | 1.36 | % | | | (0.05 | )% | | | 213 | % | |
| | 2007 | (4) | | | 14.36 | %† | | $ | 87 | | | | 0.94 | % | | | 0.94 | % | | | 1.51 | % | | | 0.13 | % | | | 119 | % | |
| Turner Midcap Growth Fund — Institutional Class Shares | |
| | 2010 | | | | 14.47 | % | | $ | 164,993 | | | | 0.93 | % | | | 0.93 | % | | | 1.03 | % | | | (0.29 | )% | | | 90 | % | |
| | 2009 | | | | (0.31 | )% | | $ | 136,069 | | | | 0.93 | % | | | 0.93 | % | | | 1.08 | % | | | (0.05 | )% | | | 120 | % | |
| | 2008 | (2) | | | (24.43 | )%† | | $ | 137,451 | | | | 0.93 | % | | | 0.94 | % | | | 1.03 | % | | | (0.09 | )% | | | 157 | % | |
| Turner Midcap Growth Fund — Investor Class Shares | |
| | 2010 | | | | 14.21 | % | | $ | 751,124 | | | | 1.18 | % | | | 1.18 | % | | | 1.28 | % | | | (0.54 | )% | | | 90 | % | |
| | 2009 | | | | (0.57 | )% | | $ | 859,640 | | | | 1.18 | % | | | 1.18 | % | | | 1.33 | % | | | (0.29 | )% | | | 120 | % | |
| | 2008 | | | | (26.69 | )% | | $ | 994,545 | | | | 1.18 | % | | | 1.18 | % | | | 1.25 | % | | | (0.44 | )% | | | 157 | % | |
| | 2007 | | | | 29.24 | % | | $ | 1,340,172 | | | | 1.18 | % | | | 1.18 | % | | | 1.24 | % | | | (0.63 | )% | | | 155 | % | |
| | 2006 | | | | 4.70 | % | | $ | 1,113,201 | | | | 1.18 | % | | | 1.18 | % | | | 1.18 | % | | | (0.30 | )% | | | 135 | % | |
| Turner Midcap Growth Fund — Retirement Class Shares | |
| | 2010 | | | | 13.93 | % | | $ | 4,578 | | | | 1.43 | % | | | 1.43 | % | | | 1.53 | % | | | (0.79 | )% | | | 90 | % | |
| | 2009 | | | | (0.79 | )% | | $ | 3,892 | | | | 1.43 | % | | | 1.43 | % | | | 1.58 | % | | | (0.55 | )% | | | 120 | % | |
| | 2008 | | | | (26.89 | )% | | $ | 5,784 | | | | 1.43 | % | | | 1.43 | % | | | 1.50 | % | | | (0.69 | )% | | | 157 | % | |
| | 2007 | | | | 28.86 | % | | $ | 6,212 | | | | 1.49 | % | | | 1.49 | % | | | 1.56 | % | | | (0.98 | )% | | | 155 | % | |
| | 2006 | | | | 4.13 | % | | $ | 2,444 | | | | 1.68 | % | | | 1.68 | % | | | 1.68 | % | | | (0.83 | )% | | | 135 | % | |
| Turner New Enterprise Fund — Investor Class Shares | |
| | 2010 | | | | 18.25 | % | | $ | 23,227 | | | | 1.64 | % | | | 1.64 | % | | | 2.15 | % | | | (1.38 | )% | | | 115 | % | |
| | 2009 | | | | 6.25 | % | | $ | 26,324 | | | | 0.62 | % | | | 0.63 | % | | | 1.23 | % | | | 0.09 | % | | | 220 | % | |
| | 2008 | | | | (35.78 | )% | | $ | 32,759 | | | | 1.52 | % | | | 1.54 | % | | | 1.90 | % | | | (0.89 | )% | | | 323 | % | |
| | 2007 | | | | 39.30 | % | | $ | 70,145 | | | | 1.27 | % | | | 1.27 | % | | | 1.73 | % | | | (0.98 | )% | | | 173 | % | |
| | 2006 | | | | 6.83 | % | | $ | 24,040 | | | | 1.61 | % | | | 1.61 | % | | | 2.06 | % | | | (1.02 | )% | | | 235 | % | |
| Turner Small Cap Growth Fund — Investor Class Shares | |
| | 2010 | | | | 15.10 | % | | $ | 274,925 | | | | 1.25 | % | | | 1.25 | % | | | 1.52 | % | | | (0.74 | )% | | | 89 | % | |
| | 2009 | | | | (4.84 | )% | | $ | 250,860 | | | | 1.25 | % | | | 1.25 | % | | | 1.58 | % | | | (0.36 | )% | | | 113 | % | |
| | 2008 | | | | (19.80 | )% | | $ | 249,434 | | | | 1.25 | % | | | 1.26 | % | | | 1.51 | % | | | (0.48 | )% | | | 141 | % | |
| | 2007 | | | | 26.02 | % | | $ | 317,930 | | | | 1.25 | % | | | 1.25 | % | | | 1.48 | % | | | (0.65 | )% | | | 134 | % | |
| | 2006 | | | | 6.04 | % | | $ | 248,271 | | | | 1.25 | % | | | 1.25 | % | | | 1.42 | % | | | (0.79 | )% | | | 154 | % | |
| Turner Quantitative Broad Market Equity Fund — Institutional Class Shares | |
| | 2010 | | | | 8.30 | % | | $ | 10,952 | | | | 0.64 | % | | | 0.64 | % | | | 2.28 | % | | | 1.13 | % | | | 164 | % | |
| | 2009 | | | | (3.95 | )% | | $ | 521 | | | | 0.64 | % | | | 0.65 | % | | | 20.30 | % | | | 1.56 | % | | | 324 | % | |
| | 2008 | (5) | | | (12.70 | )%† | | $ | 542 | | | | 0.64 | % | | | 0.66 | % | | | 17.95 | % | | | 1.60 | % | | | 118 | % | |
| Turner Quantitative Broad Market Equity Fund — Investor Class Shares | |
| | 2010 | | | | 7.98 | % | | $ | 20 | | | | 0.89 | % | | | 0.89 | % | | | 6.72 | % | | | 0.88 | % | | | 164 | % | |
| | 2009 | | | | (4.09 | )% | | $ | 10 | | | | 0.89 | % | | | 0.90 | % | | | 20.60 | % | | | 1.15 | % | | | 324 | % | |
| | 2008 | (5) | | | (12.80 | )%† | | $ | 2 | | | | 0.89 | % | | | 0.91 | % | | | 16.99 | % | | | 1.28 | % | | | 118 | % | |
* Amount represents less than $0.01 per share.
† Total return is for the period indicated and has not been annualized.
†† Inclusive of fees paid indirectly, waivers and/or reimbursements.
††† Excludes effect of in-kind transfers and mergers, as applicable.
(1) Based on average shares outstanding.
(2) Commenced operations on June 16, 2008. All ratios for the period have been annualized.
(3) The amount shown for a share outstanding throughout the period does not accord with the aggregate net losses on investments for the period because of the sales and repurchases of fund shares in relation to fluctuating market value of the investments of the Fund.
(4) Commenced operations on January 31, 2007. All ratios for the period have been annualized.
(5) Commenced operations on June 30, 2008. All ratios for the period have been annualized.
Amounts designated as "—" are either $0, not applicable or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2010 ANNUAL REPORT 71
FINANCIAL STATEMENTS
Financial highlights
For a share outstanding throughout each period
| | | Net asset
value,
beginning
of period | | Net
investment
income
(loss) | | Realized and
unrealized
gains (losses)
on investments | | Total
from
investment
operations | | Dividends
from net
investment
income | | Distributions
from
capital
gains | | Total
dividends and
distributions | | Net asset
value, end
of period | |
| Turner Quantitative Large Cap Value Fund — Institutional Class Shares | | | |
| | 2010 | | | $ | 7.45 | | | | 0.10 | (1) | | | 0.43 | | | | 0.53 | | | | (0.12 | ) | | | — | | | | (0.12 | ) | | $ | 7.86 | | |
| | 2009 | | | $ | 8.97 | | | | 0.14 | (1) | | | (1.49 | ) | | | (1.35 | ) | | | (0.17 | ) | | | — | | | | (0.17 | ) | | $ | 7.45 | | |
| | 2008 | | | $ | 12.86 | | | | 0.16 | (1) | | | (2.23 | ) | | | (2.07 | ) | | | (0.12 | ) | | | (1.70 | ) | | | (1.82 | ) | | $ | 8.97 | | |
| | 2007 | | | $ | 11.44 | | | | 0.14 | (1) | | | 1.65 | | | | 1.79 | | | | (0.15 | ) | | | (0.22 | ) | | | (0.37 | ) | | $ | 12.86 | | |
| | 2006 | (5) | | $ | 10.00 | | | | 0.16 | (1) | | | 1.33 | | | | 1.49 | | | | (0.05 | ) | | | — | | | | (0.05 | ) | | $ | 11.44 | | |
| Turner Quantitative Large Cap Value Fund — Investor Class Shares | | | |
| | 2010 | | | $ | 7.44 | | | | 0.08 | (1) | | | 0.44 | | | | 0.52 | | | | (0.11 | ) | | | — | | | | (0.11 | ) | | $ | 7.85 | | |
| | 2009 | (6) | | $ | 7.50 | | | | 0.07 | (1) | | | 0.04 | (2) | | | 0.11 | | | | (0.17 | ) | | | — | | | | (0.17 | ) | | $ | 7.44 | | |
| Turner Global Opportunities Fund — Institutional Class Shares | | | |
| | 2010 | (7) | | $ | 10.00 | | | | (0.01 | ) (1) | | | 1.53 | | | | 1.52 | | | | — | | | | — | | | | — | | | $ | 11.52 | | |
| Turner Global Opportunities Fund — Investor Class Shares | | | |
| | 2010 | (7) | | $ | 10.00 | | | | (0.03 | ) (1) | | | 1.53 | | | | 1.50 | | | | — | | | | — | | | | — | | | $ | 11.50 | | |
| Turner International Core Growth Fund — Institutional Class Shares | | | |
| | 2010 | | | $ | 8.24 | | | | 0.04 | (1) | | | 1.26 | | | | 1.30 | | | | (0.13 | ) | | | — | | | | (0.13 | ) | | $ | 9.41 | | |
| | 2009 | | | $ | 8.34 | | | | 0.08 | (1) | | | (0.07 | ) (2) | | | 0.01 | | | | (0.11 | ) | | | — | | | | (0.11 | ) | | $ | 8.24 | | |
| | 2008 | | | $ | 12.21 | | | | 0.12 | (1) | | | (3.87 | ) | | | (3.75 | ) | | | (0.02 | ) | | | (0.10 | ) | | | (0.12 | ) | | $ | 8.34 | | |
| | 2007 | (3) | | $ | 10.00 | | | | 0.07 | (1) | | | 2.14 | | | | 2.21 | | | | — | | | | — | | | | — | | | $ | 12.21 | | |
| Turner International Core Growth Fund — Investor Class Shares | | | |
| | 2010 | | | $ | 8.24 | | | | 0.05 | (1) | | | 1.23 | | | | 1.28 | | | | (0.13 | ) | | | — | | | | (0.13 | ) | | $ | 9.39 | | |
| | 2009 | (6) | | $ | 6.27 | | | | 0.07 | (1) | | | 2.01 | | | | 2.08 | | | | (0.11 | ) | | | — | | | | (0.11 | ) | | $ | 8.24 | | |
| Turner Small Cap Equity Fund — Institutional Class Shares | | | |
| | 2010 | | | $ | 9.83 | | | | 0.05 | (1) | | | 1.21 | | | | 1.26 | | | | — | | | | — | | | | — | | | $ | 11.09 | | |
| | 2009 | (4) | | $ | 7.73 | | | | — | * (1) | | | 2.10 | (2) | | | 2.10 | | | | — | | | | — | | | | — | | | $ | 9.83 | | |
| Turner Small Cap Equity Fund — Investor Class Shares | | | |
| | 2010 | | | $ | 9.82 | | | | 0.01 | (1) | | | 1.22 | | | | 1.23 | | | | — | | | | — | | | | — | | | $ | 11.05 | | |
| | 2009 | | | $ | 11.53 | | | | — | * (1) | | | (1.70 | ) | | | (1.70 | ) | | | — | | | | (0.01 | ) | | | (0.01 | ) | | $ | 9.82 | | |
| | 2008 | | | $ | 17.31 | | | | (0.06 | ) (1) | | | (2.95 | ) | | | (3.01 | ) | | | — | | | | (2.77 | ) | | | (2.77 | ) | | $ | 11.53 | | |
| | 2007 | | | $ | 16.94 | | | | (0.12 | ) (1) | | | 1.79 | | | | 1.67 | | | | — | | | | (1.30 | ) | | | (1.30 | ) | | $ | 17.31 | | |
| | 2006 | | | $ | 16.06 | | | | (0.07 | ) (1) | | | 0.95 | | | | 0.88 | | | | — | | | | — | | | | — | | | $ | 16.94 | | |
72 TURNER FUNDS 2010 ANNUAL REPORT
| | | Total
return | | Net
assets end
of period
(000) | | Ratio of
net expenses
to average
net assets†† | | Ratio of
net expenses
to average
net assets | | Ratio of total
expenses
to average
net assets | | Ratio of net
investment
income (loss)
to average
net assets†† | | Portfolio
turnover
rate††† | |
| Turner Quantitative Large Cap Value Fund — Institutional Class Shares | |
| | 2010 | | | | 7.24 | % | | $ | 825 | | | | 0.69 | % | | | 0.69 | % | | | 12.61 | % | | | 1.31 | % | | | 201 | % | |
| | 2009 | | | | (14.88 | )% | | $ | 772 | | | | 0.69 | % | | | 0.70 | % | | | 14.51 | % | | | 2.10 | % | | | 241 | % | |
| | 2008 | | | | (18.76 | )% | | $ | 763 | | | | 0.69 | % | | | 0.72 | % | | | 6.13 | % | | | 1.54 | % | | | 181 | % | |
| | 2007 | | | | 15.91 | % | | $ | 835 | | | | 0.65 | % | | | 0.65 | % | | | 5.25 | % | | | 1.15 | % | | | 271 | % | |
| | 2006 | (5) | | | 14.92 | %† | | $ | 580 | | | | 0.59 | % | | | 0.59 | % | | | 7.71 | % | | | 1.52 | % | | | 252 | % | |
| Turner Quantitative Large Cap Value Fund — Investor Class Shares | |
| | 2010 | | | | 7.07 | % | | $ | 5 | | | | 0.90 | % | | | 0.90 | % | | | 12.82 | % | | | 1.10 | % | | | 201 | % | |
| | 2009 | (6) | | | 1.67 | %† | | $ | 4 | | | | 0.89 | % | | | 0.90 | % | | | 15.93 | % | | | 1.18 | % | | | 241 | % | |
| Turner Global Opportunities Fund — Institutional Class Shares | |
| | 2010 | (7) | | | 15.20 | %† | | $ | 1,153 | | | | 1.10 | % | | | 1.10 | % | | | 8.33 | % | | | (0.31 | )% | | | 37 | % | |
| Turner Global Opportunities Fund — Investor Class Shares | |
| | 2010 | (7) | | | 15.00 | %† | | $ | — | | | | 1.56 | % | | | 1.56 | % | | | 8.92 | % | | | (0.77 | )% | | | 37 | % | |
| Turner International Core Growth Fund — Institutional Class Shares | |
| | 2010 | | | | 15.88 | % | | $ | 5,019 | | | | 1.10 | % | | | 1.10 | % | | | 3.93 | % | | | 0.51 | % | | | 120 | % | |
| | 2009 | | | | 0.71 | % | | $ | 3,848 | | | | 1.10 | % | | | 1.10 | % | | | 5.24 | % | | | 1.31 | % | | | 139 | % | |
| | 2008 | | | | (31.04 | )% | | $ | 3,335 | | | | 1.10 | % | | | 1.11 | % | | | 3.05 | % | | | 1.10 | % | | | 245 | % | |
| | 2007 | (3) | | | 22.10 | %† | | $ | 2,409 | | | | 1.10 | % | | | 1.10 | % | | | 4.63 | % | | | 0.99 | % | | | 111 | % | |
| Turner International Core Growth Fund — Investor Class Shares | |
| | 2010 | | | | 15.61 | % | | $ | 110 | | | | 1.35 | % | | | 1.35 | % | | | 4.15 | % | | | 0.61 | % | | | 120 | % | |
| | 2009 | (6) | | | 33.95 | %† | | $ | — | | | | 1.29 | % | | | 1.29 | % | | | 5.59 | % | | | 1.14 | % | | | 139 | % | |
| Turner Small Cap Equity Fund — Institutional Class Shares | |
| | 2010 | | | | 12.82 | % | | $ | 291 | | | | 1.20 | % | | | 1.20 | % | | | 1.79 | % | | | 0.52 | % | | | 189 | % | |
| | 2009 | (4) | | | 27.17 | %† | | $ | 5,439 | | | | 1.20 | % | | | 1.20 | % | | | 1.59 | % | | | 0.05 | % | | | 280 | % | |
| Turner Small Cap Equity Fund — Investor Class Shares | |
| | 2010 | | | | 12.53 | % | | $ | 6,157 | | | | 1.45 | % | | | 1.45 | % | | | 2.04 | % | | | 0.07 | % | | | 189 | % | |
| | 2009 | | | | (14.78 | )% | | $ | 23,660 | | | | 1.45 | % | | | 1.45 | % | | | 1.89 | % | | | 0.03 | % | | | 280 | % | |
| | 2008 | | | | (20.20 | )% | | $ | 24,208 | | | | 1.45 | % | | | 1.45 | % | | | 1.62 | % | | | (0.48 | )% | | | 168 | % | |
| | 2007 | | | | 10.14 | % | | $ | 65,292 | | | | 1.36 | % | | | 1.36 | % | | | 1.59 | % | | | (0.70 | )% | | | 157 | % | |
| | 2006 | | | | 5.48 | % | | $ | 81,340 | | | | 1.24 | % | | | 1.24 | % | | | 1.70 | % | | | (0.39 | )% | | | 143 | % | |
* Amount represents less than $0.01 per share.
† Total return is for the period indicated and has not been annualized.
†† Inclusive of fees paid indirectly, waivers and/or reimbursements.
††† Excludes effect of in-kind transfers and mergers, as applicable.
(1) Based on average shares outstanding.
(2) The amount shown for a share outstanding throughout the period does not accord with the aggregate net gains or losses on investments for the period because of the sales and repurchases of fund shares in relation to fluctuating market value of the investments of the Fund.
(3) Commenced operations on January 31, 2007. All ratios for the period have been annualized.
(4) Commenced operations on February 1, 2009. All ratios for the period have been annualized.
(5) Commenced operations on October 10, 2005. All ratios for the period have been annualized.
(6) Commenced operations on October 31, 2008. All ratios for the period have been annualized.
(7) Commenced operations on May 7, 2010. All ratios for the period have been annualized.
Amounts designated as "—" are either $0, not applicable or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2010 ANNUAL REPORT 73
NOTES TO FINANCIAL STATEMENTS
Notes to financial statements
September 30, 2010
1. Organization:
Turner Funds (the "Trust"), a Massachusetts business trust, is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company with thirteen active portfolios as of September 30, 2010. The financial statements included herein are those of the Turner Spectrum Fund (the "Spectrum Fund"), the Turner Concentrated Growth Fund (the "Concentrated Growth Fund"), the Turner Core Growth Fund (the "Core Growth Fund"), the Turner Emerging Growth Fund (the "Emerging Growth Fund"), the Turner Large Cap Growth Fund (the "Large Cap Growth Fund"), the Turner Midcap Growth Fund (the "Midcap Growth Fund"), the Turner New Enterprise Fund (the "New Enterprise Fund"), the Turner Small Cap Growth Fund (the "Small Cap Growth Fund"), the Turner Quantitative Broad Market Equity Fund (the "Quantitative Broad Market Equity Fund"), the Turner Quantitative Large Cap Value Fund (the "Quantitative Large Cap Value F und"), the Turner Global Opportunities Fund (the "Global Opportunities Fund"), the Turner International Core Growth Fund (the "International Core Growth Fund"), and the Turner Small Cap Equity Fund (the "Small Cap Equity Fund"), each a "Fund" and collectively the "Funds."
Each Fund is registered as a diversified portfolio of the Trust with the exception of the Large Cap Growth Fund and the Concentrated Growth Fund, each of which are non-diversified.
The Funds are registered to offer different classes of shares: Institutional Class Shares, Investor Class Shares, Retirement Class Shares, Class C Shares, or a combination of the four. The assets of each Fund are segregated, and a shareholder's interest is limited to the Fund in which shares are held. The Funds' prospectuses provide a description of each Fund's investment objectives, policies, and strategies along with information on the classes of shares currently being offered.
The Emerging Growth, Small Cap Growth and Small Cap Equity Funds were closed to new investors on March 7, 2000, July 31, 2004 and May 1, 2005, respectively. Effective March 1, 2008 and August 24, 2009, the Small Cap Equity Fund and Small Cap Growth Fund were reopened to new investors and existing shareholders, respectively.
2. Significant accounting policies:
The following is a summary of the significant accounting policies followed by the Funds.
Use of estimates—The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
Security valuation—Securities listed on a securities exchange, market or automated quotation system for which quotations are readily available (except for securities traded on NASDAQ) are valued at the last quoted sale price on the primary exchange or market (foreign or domestic) on which they are traded, or, if there is no such reported sale, at the most recent quoted bid price for long positions and the most recent quoted ask price for short positions. For securities traded on NASDAQ, the NASDAQ Official Closing Price will be used. The prices for foreign securities are reported in local currency and converted to U.S. dollars using currency exchange rates. Prices for most securities held in the Funds are provided daily by recognized independent pricing agents. If a security price cannot be obtained from an independent, third-party pricing agent, the Funds seek to obtain a bid price or ask price, as applicable, from at least one independent broker.
Securities for which market prices are not "readily available" are valued in accordance with Fair Value Procedures established by the Board of Trustees (the "Board"). The Funds' Fair Value Procedures are implemented through a Fair Value Committee (the "Committee") designated by the Board. Some of the more common reasons that may necessitate that a security be valued using Fair Value Procedures include: the security's trading has been halted or suspended; the security has been delisted from a national exchange; the security's primary trading market is temporarily closed at a time when under normal conditions it would be open; the security has not been traded for an extended period of time; the security's primary pricing source is not able or willing to provide a price; or trading of the security is subject to local government-imposed restrictions. When a security is valued in accordance with the Fair Value Procedures, the Committ ee will determine the value after taking into consideration relevant information reasonably available to the Committee.
For securities that principally trade on a foreign market or exchange, a significant gap in time can exist between the time of a particular security's last trade and the time at which a Fund calculates its net asset value. The closing prices of such securities may no longer reflect their market value at the time the Fund calculates net asset value if an event that could materially affect the value of those securities (a "Significant Event") has occurred between the time of the security's last close and the time that the Fund calculates net asset value. A Significant Event may relate to a single issuer or to an entire market sector. If the Adviser of a Fund becomes aware of a Significant Event that has occurred with
74 TURNER FUNDS 2010 ANNUAL REPORT
respect to a security or group of securities after the closing of the exchange or market on which the security or securities principally trade, but before the time at which the Fund calculates net asset value, it may request that a Committee meeting be called. In addition, the Fund's Administrator monitors price movements among certain selected indices, securities and/or baskets of securities that may be an indicator that the closing prices received earlier from foreign exchanges or markets may not reflect market value at the time the Fund calculates net asset value. If price movements in a monitored index or security exceed levels established by the Administrator and approved by the Committee, the Administrator notifies the Adviser for any Fund holding the relevant securities that such limits have been exceeded. In such event, the Adviser makes the determination whether a Committee meeting should be called based on the informat ion provided.
The Global Opportunities Fund, International Core Growth Fund and Spectrum Fund use Interactive Data Pricing and Reference Data, Inc. ("Interactive Data") as a third party fair valuation vendor. Interactive Data provides a fair value for foreign securities in the Global Opportunities Fund, International Core Growth Fund and Spectrum Fund based on certain factors and methodologies (involving, generally, tracking valuation correlations between the U.S. market and each non-U.S. security) applied by Interactive Data in the event that there is a movement in the U.S. market that exceeds a specific threshold established by the Committee. The Committee establishes a "confidence interval" which is used to determine the level of correlation between the value of a foreign security and movements in the U.S. market before a particular security is fair valued when the threshold is exceeded. In the event that the threshold established by the C ommittee is exceeded on a specific day, the Global Opportunities Fund, International Core Growth Fund and Spectrum Fund value their non-U.S. securities that exceed the applicable "confidence interval" based upon the fair values provided by Interactive Data. In such event, it is not necessary to hold a Committee meeting. In the event that the Adviser believes that the fair values provided by Interactive Data are not reliable, the Adviser contacts the Funds' Administrator and may request that a meeting of the Committee be held.
If a local market in which the Funds own securities is closed for one or more days or a portion of a day, the Funds shall value all securities held in that corresponding currency based on the fair value prices provided by Interactive Data using the predetermined confidence interval discussed above.
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, fair value is defined as the price that a fund would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market. The guidance established a three-tier heirarchy to maximize the use of the observable market data and minimize the use of unobservable inputs and to establish classification of the fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.
The three-tier hierarchy of inputs is summarized in the three broad Levels listed below:
Level 1 – quoted prices in active markets for identical investments
Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risks, etc.)
Level 3 – significant unobservable inputs (including a fund's own assumptions in determining the fair value of investments)
The valuation techniques used by the Funds to measure fair value in accordance with the guidance, during the year ended September 30, 2010 maximized the use of observable inputs and minimized the use of unobservable inputs. For the year ended September 30, 2010, there have been no significant changes to the Funds' fair valuation methodologies. Fair value measurement classifications are summarized in each Fund's Schedule of investments, Schedule of securities sold short or Schedule of open options written. Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy during the reporting period. For each Fund there were no significant transfers between the levels during the reporting period, based on the input levels assigned under the hierarchy at the beginning and end of the reporting period.
Security transactions and related income—Security transactions are accounted for on the date the security is purchased or sold (trade date). Dividend income is recognized on the ex-dividend date. Costs used in determining realized gains and losses on the sales of investment securities are those of the specific securities sold during the respective holding period.
TURNER FUNDS 2010 ANNUAL REPORT 75
NOTES TO FINANCIAL STATEMENTS
Securities sold short—As consistent with each Fund's investment objectives, the Funds may engage in short sales. Short sales are transactions under which a Fund sells a security it does not own. To complete such a transaction, the Fund must borrow the security to make delivery to the buyer. The Fund is then obligated to replace the security borrowed by purchasing the security at the market price at the time of the replacement. The price at such time may be more or less than the price at which the security was sold by the Fund. Until the security is replaced, the Fund is required to pay the lender amounts equal to any dividends that accrue during the period of the loan. Dividends are shown as an expense for financial reporting purposes. To borrow the security, the Fund also may be required to pay a fee, which is shown as an expense for financial r eporting purposes. The proceeds of the short sale are retained by the broker, to the extent necessary to meet margin requirements, until the short position is closed out. A gain, limited to the price at which the Fund sold the security short, or a loss, unlimited in size, will be recognized upon the close of a short sale.
Until a Fund closes its short position or replaces the borrowed security, the Fund will: (a) maintain a segregated account containing cash or liquid securities at such a level that (i) the amount deposited in the account plus the amount deposited with the broker as collateral will equal the current value of the security sold short; and (ii) the amount deposited in the segregated account plus the amount deposited with the broker as collateral will not be less than the market value of the security at the time the security was sold short, or (b) otherwise cover the Fund's short positions. The Spectrum Fund is the only Fund that engaged in short sales during the year ended September 30, 2010.
Option transactions—As consistent with each Fund's investment objectives, the Funds may write covered call options as a means of increasing the yield on their portfolios and as a means of providing limited protection against decreases in their market value. The Funds may purchase put and call options to protect against a decline in the market value of the securities in their portfolio or to anticipate an increase in the market value of securities that the Funds may seek to purchase in the future. A put option gives the purchaser of the option the right to sell, and the writer of the option the obligation to buy, the underlying security at any time during the option period. A call option gives the purchaser of the option the right to buy, and the writer of the option the obligation to sell, the underlying security at any time during the option per iod. The premium paid to the writer is the consideration for undertaking the obligations under the option contract. The initial purchase (sale) of an option contract is an "opening transaction." In order to close out an option position, the Fund may enter into a "closing transaction," which is simply the sale (purchase) of an option contract on the same security with the same exercise price and expiration date as the option contract originally opened. If the Fund is unable to effect a closing purchase transaction with respect to an option it has written, it will not be able to sell the underlying security until the option expires or the Fund delivers the security upon exercise. When the Fund writes (sells) an option, an amount equal to the premium received by the Fund is included in the Statement of Assets and Liabilities as an asset and an equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the current value of the option written. Option contracts are valued at the last quoted sales price. If there is no such reported sale on the valuation date, long positions are valued at the most recent bid price, and short positions are valued at the most recent ask price. When an option expires on its stipulated expiration date or the Fund enters into a closing purchase transaction, the Fund realizes a gain or loss if the cost of the closing purchase transaction differs from the premium received when the option was sold without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is eliminated. When an option is exercised, the premium originally received decreases the cost basis of the security (or increases the proceeds on a sale of the security). Realized and unrealized gains and losses on written option transactions are shown on the Statement of Operations as net realized gain (loss) on written option contracts and net change in unrealized appreciation (depreciation) on written option contracts, respectively. Realized and un realized gains and (losses) on purchased options in the Spectrum Fund for the year ended September 30, 2010 were $(607,223) and $(27,213), respectively. Realized and unrealized gains and (losses) on purchased options in the New Enterprise Fund for the year ended September 30, 2010 were $76,445 and $(8,250), respectively. These amounts are shown on the Statement of Operations as net realized gain (loss) from securities sold and net change in unrealized appreciation (depreciation) on investments, respectively.
Foreign currency translation—The books and records of the Spectrum Fund, Global Opportunities Fund and the International Core Growth Fund are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into U.S. dollars on the date of valuation. The Spectrum Fund, Global Opportunities Fund and the International Core Growth Fund do not isolate that portion of realized or unrealized gains and losses resulting from changes in the foreign exchange rate from fluctuations arising from changes in the market prices of the securities. These gains and losses are included in net realized and unrealized gains and losses on investments in the Statements of Operations. Net realized and unrealized gains and losses on foreign currency transactions represent net foreign exchange gains or loss es from foreign currency exchange contracts, disposition of foreign currencies, currency gains or losses realized between trade and settlement dates on securities transactions and
76 TURNER FUNDS 2010 ANNUAL REPORT
the difference between the amount of the investment income and foreign withholding taxes recorded on the Spectrum Fund, Global Opportunities Fund and the International Core Growth Fund's books and the U.S. dollar equivalent amounts actually received or paid.
Expenses—Expenses that are specifically attributed to one of the Funds are charged to that Fund. Certain other expenses of the Funds are prorated among the Funds on the basis of relative daily net assets. Other common expenses of the Trust are allocated among the Funds on the basis of relative daily net assets.
Classes—Class specific expenses are borne by that class. Income, non-class specific expenses and realized/unrealized gains and losses are allocated to the respective classes on the basis of the relative daily net assets.
Dividends and distributions—The Funds declare and distribute net investment income, if any, annually, as a dividend to shareholders. Any net realized capital gains on sales of securities for all Funds are distributed to shareholders at least annually.
3. Transactions with affiliates:
Certain officers and trustees of the Trust are also officers or employees of Turner Investment Partners, Inc. ("Turner") or Citi Fund Services Ohio, Inc. ("Citi"), the Trust's sub-administrator. Prior to October 1, 2010, SEI Global Funds Services provided sub-adminstration services to the Funds. With the exception of the Trust's Chief Compliance Officer, such officers are paid no fees by the Trust for serving as officers and trustees of the Trust.
Foreside Fund Services, LLC (the "Distributor") provides distribution services to the Funds under a Distribution Agreement. Prior to October 1, 2010, SEI Investments Distribution Co. provided distribution services to the Funds.
4. Administration, shareholder servicing, distribution and transfer agent agreements:
Turner provides administrative services to the Funds under Administration Agreements with the Trust. For its services, Turner receives an annual fee of 0.15% of the aggregate average daily net assets of the Trust up to $2 billion and 0.12% of the aggregate average daily net assets of the Trust over $2 billion. Under a separate Sub-Administration Agreement between Turner and Citi, effective October 1, 2010, Citi provides sub-administrative services to the Trust. For the year ended September 30, 2010, SEI Global Funds Services, the Funds' sub-administrator until September 30, 2010, was paid $1,087,904 by Turner.
The Funds have adopted a Distribution Plan for Retirement Class Shares and Class C Shares (the "Distribution Plan") under which firms, including the Distributor, that provide distribution services may receive compensation. Under the Distribution Plan, which was adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended, the Distributor is entitled to receive aggregate fees for distribution services not exceeding seventy-five basis points (0.75%) of the Fund's average daily net assets attributable to Retirement Class or Class C Shares that are subject to the arrangement in return for providing a broad range of distribution services. Currently, the Retirement Class Shares of the Midcap Growth Fund pay the Distributor twenty-five basis points (0.25%) and the Class C Shares of the Spectrum Fund pay the Distributor seventy-five basis points (0.75%) in distribution fees.
The Funds have also adopted Shareholder Services Plans (the "Shareholder Services Plans"). Under the Shareholder Services Plans, service providers are entitled to receive aggregate fees for shareholder services not exceeding twenty-five basis points (0.25%) of each Fund's average daily net assets attributable to Investor Class Shares, Retirement Class Shares and Class C Shares that are subject to the arrangement in return for providing shareholder services. Currently, Investor Class Shares of each Fund, Retirement Class Shares of the Midcap Growth Fund and Class C Shares of the Spectrum Fund pay 0.25% in shareholder servicing fees.
DST Systems, Inc. serves as the transfer agent and dividend disbursing agent for the Funds under a transfer agency agreement with the Trust.
The Funds may earn cash management credits which can be used to offset transfer agent expenses. During the year ended September 30, 2010, each Fund earned less than $1,000 of cash management credits to offset transfer agent expenses and therefore amounts less than $500 do not appear on the Statement of Operations. The following represents the unrounded cash management credits earned by each Fund.
| | | Amount | |
| Spectrum Fund | | $ | 141 | | |
| Concentrated Growth Fund | | | 178 | | |
| Core Growth Fund | | | 348 | | |
| Emerging Growth Fund | | | 166 | | |
| Large Cap Growth Fund | | | 171 | | |
| Midcap Growth Fund | | | 860 | | |
| New Enterprise Fund | | | 213 | | |
| Small Cap Growth Fund | | | 132 | | |
| Quantitative Broad Market Equity Fund | | | 6 | | |
| Quantitative Large Cap Value Fund | | | 7 | | |
| Global Opportunities Fund | | | 1 | | |
| International Core Growth Fund | | | 8 | | |
| Small Cap Equity Fund | | | 23 | | |
5. Investment advisory agreement:
The Trust and Turner are parties to an Investment Advisory Agreement dated April 28, 1996 under which Turner receives a fee that is calculated daily and paid monthly, based on the average daily net assets of certain Funds. Pursuant to an Amended and Restated Advisory Agreement dated November 17, 2006, Turner Investment Management LLC, an affiliate of Turner, serves as the investment adviser for the Small Cap Equity Fund.
TURNER FUNDS 2010 ANNUAL REPORT 77
NOTES TO FINANCIAL STATEMENTS
For their services, Turner and Turner Investment Management LLC receive annual fees, which are calculated daily and paid monthly, based on average daily net assets. Turner and Turner Investment Management LLC have contractually agreed to waive all or a portion of their fees and to reimburse expenses in order to limit total Fund operating expenses (excluding acquired fund fees and expenses and interest expenses relating to short sales, except for the Spectrum Fund, for which Turner includes acquired fund fees and expenses and interest expenses relating to short sales in its contractual waiver) to a specified percentage of the average daily net assets of each Fund, except the Concentrated Growth Fund and New Enterprise Fund, on an annualized basis through certain dates as disclosed in the following table:
| | | Advisory
fee | | Expense
cap | | Date
(through) | |
| Spectrum Fund | |
| Institutional Class | | | 1.50 | % | | | 1.95 | % | | January 31, 2011 | |
| Investor Class | | | 1.50 | % | | | 2.20 | % | | January 31, 2011 | |
| Class C | | | 1.50 | % | | | 2.95 | % | | January 31, 2011 | |
| Core Growth Fund | |
| Institutional Class | | | 0.60 | % | | | 0.69 | % | | January 31, 2011 | |
| Investor Class | | | 0.60 | % | | | 0.94 | % | | January 31, 2011 | |
| Emerging Growth Fund | |
| Institutional Class | | | 1.00 | % | | | 1.15 | % | | January 31, 2011 | |
| Investor Class | | | 1.00 | % | | | 1.40 | % | | January 31, 2011 | |
| Large Cap Growth Fund | |
| Institutional Class | | | 0.60 | % | | | 0.69 | % | | January 31, 2011 | |
| Investor Class | | | 0.60 | % | | | 0.94 | % | | January 31, 2011 | |
| Midcap Growth Fund | |
| Institutional Class | | | 0.75 | % | | | 0.93 | % | | January 31, 2011 | |
| Investor Class | | | 0.75 | % | | | 1.18 | % | | January 31, 2011 | |
| Retirement Class | | | 0.75 | % | | | 1.43 | % | | January 31, 2011 | |
| Small Cap Growth Fund | |
| Investor Class | | | 1.00 | % | | | 1.25 | % | | January 31, 2011 | |
Quantitative Broad Market
Equity Fund | |
| Institutional Class | | | 0.50 | % | | | 0.64 | % | | January 31, 2011 | |
| Investor Class | | | 0.50 | % | | | 0.89 | % | | January 31, 2011 | |
Quantitative Large Cap
Value Fund | |
| Institutional Class | | | 0.60 | % | | | 0.69 | % | | January 31, 2011 | |
| Investor Class | | | 0.60 | % | | | 0.94 | % | | January 31, 2011 | |
| Global Opportunities Fund | |
| Institutional Class | | | 0.75 | % | | | 1.10 | % | | May 5, 2011 | |
| Investor Class | | | 0.75 | % | | | 1.35 | % | | May 5, 2011 | |
International Core
Growth Fund | |
| Institutional Class | | | 0.85 | % | | | 1.10 | % | | January 31, 2011 | |
| Investor Class | | | 0.85 | % | | | 1.35 | % | | January 31, 2011 | |
| Small Cap Equity Fund | |
| Institutional Class | | | 0.95 | % | | | 1.20 | % | | January 31, 2011 | |
| Investor Class | �� | | 0.95 | % | | | 1.45 | % | | January 31, 2011 | |
For the remaining Funds, the Concentrated Growth Fund and the New Enterprise Fund, the advisory fee is comprised of a base fee and a performance adjustment that increases or decreases the total fee depending upon the performance of the Fund relative to the Fund's performance benchmark. The Fund's base fee (1.10% for both the Concentrated Growth Fund and the New Enterprise Fund) is accrued daily and paid monthly, based on the Fund's average net assets during the current month.
The performance adjustment is calculated and paid monthly by comparing the Fund's performance to that of the Fund's performance benchmark over the current month plus the previous 11 months (the "performance period"). The annual performance adjustment rate is multiplied by the average net assets of the Fund over the entire performance period, which is then multiplied by a fraction, the numerator of which is the number of days in the month and the denominator of which is 365 (366 in leap years). The resulting amount is then added to (in the case of overperformance) or subtracted from (in the case of underperformance) the Fund's base fee.
In cases where the advisory fee is comprised of a base fee and a performance adjustment, Turner has voluntarily agreed to waive all or a portion of their fees and to reimburse expenses in order to keep such Fund's "other expenses" (excluding distribution fees, acquired fund fees and expenses and interest expenses relating to short sales) from exceeding a specified percentage of the average daily net assets of the Fund on an annualized basis. Accordingly, the base advisory fee, annual adjustment rate, over/under performance relative to the benchmark threshold, and other expense cap are as follows:
| | | Base
advisory
fee | | Annual
adjustment
rate | | Benchmark
threshold(1) | | Other
expenses
cap | |
| Concentrated Growth Fund | | | 1.10 | % | | | +/-0.40% | | | | +/-2.50% | | | | 0.25 | % | |
| New Enterprise Fund | | | 1.10 | | | | +/-0.40 | | | | +/-2.50 | | | | 0.25 | | |
(1) See the Funds' Prospectus and Statement of Additional Information for more information regarding each Fund's performance benchmark.
During the year ended September 30, 2010, the Funds' advisory fees, before waivers, were adjusted in accordance with the policy described above:
| | | Base
adviser
fee | | Performance
adjustment | | Net adviser
fee before
waivers | |
| Concentrated Growth Fund | | $ | 451,810 | | | $ | 67,799 | | | $ | 519,609 | | |
| New Enterprise Fund | | | 274,519 | | | | 72,912 | | | | 347,431 | | |
6. Redemption fees:
Sales or exchanges out of the Core Growth Fund, New Enterprise Fund, Quantitative Large Cap Value Fund, and the Small Cap Equity Fund within 90 days of purchase are not currently subject to a redemption fee of 2.00%, but may be in the future. The Funds will provide notice to shareholders before they implement the redemption fee.
78 TURNER FUNDS 2010 ANNUAL REPORT
7. Contingent deferred sales charge (Turner Spectrum Fund, Class C Shares):
A 1.00% contingent deferred sales charge ("CDSC") will be deducted with respect to the Spectrum Fund, Class C Shares, redeemed within 12 months of purchase. The CDSC will be based on the lower of the original purchase price or the value of the Class C Shares redeemed. The CDSC may be waived for certain investors, as described in the Spectrum Fund's Class C statutory prospectus.
8. Investment transactions:
The cost of security purchases and the proceeds from security sales, other than short-term investments, for the year ended September 30, 2010 were as follows (000):
| | | Purchases (000) | | Sales (000) | |
| Spectrum Fund | | $ | 1,405,515 | | | $ | 1,252,874 | | |
| Concentrated Growth Fund | | | 84,808 | | | | 86,205 | | |
| Core Growth Fund | | | 1,243,122 | | | | 1,354,545 | | |
| Emerging Growth Fund | | | 399,004 | | | | 445,351 | | |
| Large Cap Growth Fund | | | 186,143 | | | | 173,413 | | |
| Midcap Growth Fund | | | 859,593 | | | | 1,079,829 | | |
| New Enterprise Fund | | | 27,697 | | | | 35,293 | | |
| Small Cap Growth Fund | | | 232,236 | | | | 246,430 | | |
| Quantitative Broad Market Equity Fund | | | 20,424 | | | | 9,804 | | |
| Quantitative Large Cap Value Fund | | | 1,592 | | | | 1,577 | | |
| Global Opportunities Fund | | | 1,386 | | | | 383 | | |
| International Core Growth Fund | | | 5,651 | | | | 5,221 | | |
| Small Cap Equity Fund | | | 33,789 | | | | 57,443 | | |
9. Federal tax policies and information:
Each of the Funds is classified as a separate taxable entity for Federal income tax purposes. Each of the Funds intends to continue to qualify as a separate "regulated investment company" under the Internal Revenue Code and make the requisite distributions to shareholders that will be sufficient to relieve it from Federal income tax and Federal excise tax. Therefore, no Federal tax provision is required.
The amounts of dividends from net investment income and distributions from net realized capital gains, if any, are determined in accordance with Federal income tax regulations, which may differ from those amounts determined under accounting principles generally accepted in the United States of America. These book/tax differences are either temporary or permanent in nature. These differences are primarily due to wash sales, REIT adjustments, expired capital loss carryforwards, foreign currency transactions, net operating losses and investments in partnerships and passive foreign investment companies. The character and timing of dividends from net investment income and distributions from net realized gains distributed during the fiscal year may differ from the year that the income or realized gains (losses) were recorded by the Funds. To the extent these differences are permanent, adjustments are made to the appropriate equity acc ounts in the period that the differences arise.
Accordingly, the following permanent differences have been reclassified to/from the following accounts during the fiscal year ended September 30, 2010 (000):
| Fund | | Undistributed
net investment
income | | Accumulated
net realized
gain (loss) | | Portfolio
capital | |
| Spectrum Fund | | $ | 1,194 | | | $ | (507 | ) | | $ | (687 | ) | |
Concentrated
Growth Fund | | | 468 | | | | 130,598 | | | | (131,066 | ) | |
| Core Growth Fund | | | 172 | | | | 1,321 | | | | (1,493 | ) | |
| Emerging Growth Fund | | | 3,867 | | | | — | | | | (3,867 | ) | |
| Midcap Growth Fund | | | 4,906 | | | | 127,079 | | | | (131,985 | ) | |
| New Enterprise Fund | | | 344 | | | | 8,184 | | | | (8,528 | ) | |
| Small Cap Growth Fund | | | 1,976 | | | | 25,178 | | | | (27,154 | ) | |
| Global Opportunities Fund | | | 1 | | | | 1 | | | | (2 | ) | |
International Core
Growth Fund | | | 17 | | | | (17 | ) | | | — | | |
| Small Cap Equity Fund | | | (24 | ) | | | 24 | | | | — | | |
The tax character of dividends and distributions declared during the years ended September 30, 2010 and September 30 2009 were as follows (000):
| | | Ordinary
income | | Long-term
capital gain | | Return
of capital | | Total | |
| Spectrum Fund | | | |
| | 2010 | | | $ | 142 | | | $ | — | | | $ | — | | | $ | 142 | | |
| | 2009 | | | | — | | | | — | | | | — | | | | — | | |
Concentrated
Growth Fund | | | |
| | 2010 | | | $ | 120 | | | $ | — | | | $ | 1 | | | $ | 121 | | |
| | 2009 | | | | — | | | | — | | | | — | | | | —- | | |
| Core Growth Fund | | | |
| | 2010 | | | $ | 2,287 | | | $ | — | | | $ | — | | | $ | 2,287 | | |
| | 2009 | | | | 2,308 | | | | — | | | | — | | | | 2,308 | | |
| Emerging Growth Fund | | | |
| | 2010 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | |
| | 2009 | | | | — | | | | 12,445 | | | | — | | | | 12,445 | | |
| Large Cap Growth Fund | | | |
| | 2010 | | | $ | 295 | | | $ | — | | | $ | — | | | $ | 295 | | |
| | 2009 | | | | 98 | | | | — | | | | — | | | | 98 | | |
| New Enterprise Fund | | | |
| | 2010 | | | $ | 22 | | | $ | — | | | $ | 1 | | | $ | 23 | | |
| | 2009 | | | | — | | | | — | | | | — | | | | — | | |
Quantitative Broad
Market Equity Fund | | | |
| | 2010 | | | $ | 7 | | | $ | — | | | $ | — | | | $ | 7 | | |
| | 2009 | | | | 4 | | | | — | | | | — | | | | 4 | | |
Quantitative Large Cap
Value Fund | | | |
| | 2010 | | | $ | 13 | | | $ | — | | | $ | — | | | $ | 13 | | |
| | 2009 | | | | 14 | | | | — | | | | — | | | | 14 | | |
International Core
Growth Fund | | | |
| | 2010 | | | $ | 59 | | | $ | — | | | $ | — | | | $ | 59 | | |
| | 2009 | | | | 42 | | | | — | | | | — | | | | 42 | | |
| Small Cap Equity Fund | | | |
| | 2010 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | |
| | 2009 | | | | 17 | | | | — | | | | — | | | | 17 | | |
TURNER FUNDS 2010 ANNUAL REPORT 79
NOTES TO FINANCIAL STATEMENTS
As of September 30, 2010, the components of distributable earnings (accumulated losses) on a tax basis were as follows (000):
| | | Undistributed
ordinary
income | | Capital
loss
carryforward | | Post-
October
losses | | Post-
October
currency
losses | | Unrealized
appreciation | | Other
temporary
differences | | Total
distributable
earnings
(accumulated
losses) | |
| Spectrum Fund | | $ | — | | | $ | (37 | ) | | $ | (2,435 | ) | | $ | (129 | ) | | $ | 1,847 | | | $ | — | | | $ | (754 | ) | |
| Concentrated Growth Fund | | | — | | | | (40,745 | ) | | | — | | | | — | | | | 7,810 | | | | — | | | | (32,935 | ) | |
| Core Growth Fund | | | 540 | | | | (266,157 | ) | | | — | | | | — | | | | 99,559 | | | | — | | | | (166,058 | ) | |
| Emerging Growth Fund | | | — | | | | (86,022 | ) | | | — | | | | — | | | | 104,308 | | | | — | | | | 18,286 | | |
| Large Cap Growth Fund | | | 154 | | | | (27,427 | ) | | | — | | | | — | | | | 19,641 | | | | — | | | | (7,632 | ) | |
| Midcap Growth Fund | | | — | | | | (361,471 | ) | | | — | | | | — | | | | 259,260 | | | | — | | | | (102,211 | ) | |
| New Enterprise Fund | | | — | | | | (20,717 | ) | | | — | | | | — | | | | 6,534 | | | | — | | | | (14,183 | ) | |
| Small Cap Growth Fund | | | — | | | | (70,467 | ) | | | — | | | | — | | | | 64,560 | | | | — | | | | (5,907 | ) | |
| Quantitative Broad Market Equity Fund | | | 67 | | | | (177 | ) | | | (467 | ) | | | — | | | | 202 | | | | — | | | | (375 | ) | |
| Quantitative Large Cap Value Fund | | | 8 | | | | (277 | ) | | | — | | | | — | | | | 67 | | | | — | | | | (202 | ) | |
| Global Opportunities Fund | | | — | | | | — | | | | (4 | ) | | | — | | | | 159 | | | | — | | | | 155 | | |
| International Core Growth Fund | | | 49 | | | | (1,165 | ) | | | — | | | | (3 | ) | | | 753 | | | | — | | | | (366 | ) | |
| Small Cap Equity Fund | | | 22 | | | | (7,648 | ) | | | — | | | | — | | | | 1,209 | | | | 31 | | | | (6,386 | ) | |
Post-October losses represent losses realized on investment transactions from November 1, 2009 through September 30, 2010 that, in accordance with Federal income tax regulations, a Fund may elect to defer and treat as having arisen in the following year. For Federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains.
At September 30, 2010, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates (000):
| | | Expiring September 30, | |
| | | 2011 | | 2013 | | 2014 | | 2015 | | 2016 | | 2017 | | 2018 | | Total | |
| Spectrum Fund | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 37 | | | $ | 37 | | |
| Concentrated Growth Fund | | | 12,850 | | | | — | | | | — | | | | — | | | | 172 | | | | — | | | | 27,723 | | | | 40,745 | | |
| Core Growth Fund | | | 318 | | | | — | | | | 200 | | | | 827 | | | | — | | | | 175,370 | | | | 89,442 | | | | 266,157 | | |
| Emerging Growth Fund | | | — | | | | — | | | | — | | | | — | | | | — | | | | 41,623 | | | | 44,399 | | | | 86,022 | | |
| Large Cap Growth Fund | | | 11,642 | | | | — | | | | — | | | | — | | | | 61 | | | | — | | | | 15,724 | | | | 27,427 | | |
| Midcap Growth Fund | | | 129,499 | | | | — | | | | — | | | | — | | | | — | | | | 142,386 | | | | 89,586 | | | | 361,471 | | |
| New Enterprise Fund | | | 385 | | | | 247 | | | | — | | | | — | | | | — | | | | 17,695 | | | | 2,390 | | | | 20,717 | | |
| Small Cap Growth Fund | | | 25,994 | | | | — | | | | — | | | | — | | | | — | | | | 27,970 | | | | 16,503 | | | | 70,467 | | |
Quantitative Broad Market
Equity Fund | | | — | | | | — | | | | — | | | | — | | | | — | | | | 48 | | | | 129 | | | | 177 | | |
Quantitative Large Cap
Value Fund | | | — | | | | — | | | | — | | | | — | | | | — | | | | 155 | | | | 122 | | | | 277 | | |
International Core
Growth Fund | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1,089 | | | | 76 | | | | 1,165 | | |
| Small Cap Equity Fund | | | — | | | | — | | | | — | | | | — | | | | — | | | | 501 | | | | 7,147 | | | | 7,648 | | |
80 TURNER FUNDS 2010 ANNUAL REPORT
At September 30, 2010, the total cost of securities for Federal income tax purposes and the aggregate gross unrealized appreciation and depreciation for the investments held by the Fund, excluding securities sold short and written options, were as follows (000):
| Fund | | Federal
tax
cost | | Unrealized
appreciation | | Unrealized
depreciation | | Net
unrealized
appreciation | |
| Spectrum Fund | | $ | 198,045 | | | $ | 10,024 | | | $ | (6,457 | ) | | $ | 3,567 | | |
| Concentrated Growth Fund | | | 33,153 | | | | 8,658 | | | | (848 | ) | | | 7,810 | | |
| Core Growth Fund | | | 454,788 | | | | 106,003 | | | | (6,444 | ) | | | 99,559 | | |
| Emerging Growth Fund | | | 353,204 | | | | 113,919 | | | | (9,611 | ) | | | 104,308 | | |
| Large Cap Growth Fund | | | 103,893 | | | | 21,450 | | | | (1,809 | ) | | | 19,641 | | |
| Midcap Growth Fund | | | 739,263 | | | | 267,527 | | | | (8,267 | ) | | | 259,260 | | |
| New Enterprise Fund | | | 18,116 | | | | 6,643 | | | | (109 | ) | | | 6,534 | | |
| Small Cap Growth Fund | | | 249,992 | | | | 67,555 | | | | (2,995 | ) | | | 64,560 | | |
| Quantitative Broad Market Equity Fund | | | 10,621 | | | | 537 | | | | (335 | ) | | | 202 | | |
| Quantitative Large Cap Value Fund | | | 762 | | | | 80 | | | | (13 | ) | | | 67 | | |
| Global Opportunities Fund | | | 999 | | | | 172 | | | | (13 | ) | | | 159 | | |
| International Core Growth Fund | | | 4,317 | | | | 848 | | | | (95 | ) | | | 753 | | |
| Small Cap Equity Fund | | | 5,347 | | | | 1,271 | | | | (62 | ) | | | 1,209 | | |
Management has analyzed the Funds' tax positions taken on Federal income tax returns for all open tax years and has concluded that as of September 30, 2010, no provision for income tax would be required in the Funds' financial statements. The Funds' Federal and State income and Federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state department of revenue.
10. Concentrations/risks:
Certain Funds invest a high percentage of their assets in specific sectors of the market in order to achieve a potentially greater investment return. As a result, the Funds may be more susceptible to economic, political, and regulatory developments in a particular sector of the market, positive or negative, and may experience increased volatility on the Fund's net asset value and magnified effect on the total return.
The Funds enter into contracts that contain a variety of indemnifications. The Funds' maximum exposure under these arrangements is unknown. However, the Funds have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote.
11. Loans of portfolio securities:
The Funds may lend securities in their portfolio pursuant to a securities lending agreement ("Lending Agreement") with Morgan Stanley. Unless otherwise agreed, security loans, made pursuant to the Lending Agreement are required at all times to be secured by collateral equal to at least 100% of the market value of the securities loaned. Cash collateral received is invested in the BlackRock TempCash Fund, Institutional Shares, a money market fund. All such investments are made at the risk of the Funds and, as such, the Funds are liable for investment losses. The Funds receive an annual fee for their participation in the Lending Agreement based on projected lending activity.
In the event of bankruptcy of the borrower, realization/ retention of the collateral may be subject to legal proceedings.
12. Derivative contracts:
Written Options—A summary of option contracts written during the year ended September 30, 2010 for the Spectrum Fund is as follows:
| | | Option
contracts | | Option
premiums
(000) | |
| Options outstanding at beginning of year | | | 28 | | | $ | — | | |
| Options written | | | 19,376 | | | | 1,537 | | |
Options canceled in a closing
purchase transaction | | | (15,504 | ) | | | (1,223 | ) | |
| Options exercised | | | (101 | ) | | | (11 | ) | |
| Options expired | | | (1,070 | ) | | | (63 | ) | |
| Options outstanding at end of year | | | 2,729 | | | $ | 240 | | |
TURNER FUNDS 2010 ANNUAL REPORT 81
NOTES TO FINANCIAL STATEMENTS
13. In-kind transactions:
During the year ended September 30, 2009, the Midcap Growth Fund distributed securities in lieu of cash for shareholder redemptions. The shareholders received a pro-rata portion of the Midcap Growth Fund's holdings based on shares outstanding. The value of the redemptions were as follows:
| Date | | Redemption | | Securities | | Cash | | Realized loss | | Fund shares redeemed | |
| | 12/22/08 | | | $ | 8,209,938 | | | $ | 8,167,796 | | | $ | 42,142 | | | $ | 3,254,486 | | | | 458,074 | | |
| | 7/10/09 | | | | 27,614,859 | | | | 27,356,692 | | | | 258,167 | | | | 4,717,568 | | | | 1,386,984 | | |
During the year ended September 30, 2010, the Core Growth Fund distributed securities in lieu of cash for shareholder redemptions. The shareholders received a pro-rata portion of the Core Growth Fund's holdings based on shares outstanding. The value of the redemption was as follows:
| Date | | Redemption | | Securities | | Cash | | Realized loss | | Fund shares redeemed | |
| | 11/9/09 | | | $ | 15,554,214 | | | $ | 15,292,016 | | | $ | 262,198 | | | $ | 1,492,642 | | | | 1,518,966 | | |
These transactions were completed pursuant to procedures adopted by the Board. These procedures are designed to minimize or eliminate any adverse tax implications to the Funds and its shareholders.
14. Subsequent events:
On November 19, 2010, the Board of Trustees approved an agreement and plan of reorganization (the "Plan") pursuant to which the assets and known liabilities of the Large Cap Growth Fund would be transferred to the Core Growth Fund. The Large Cap Growth Fund will be closed to new investors beginning February 1, 2011. Effective January 31, 2011, the Core Growth Fund will be renamed Turner Large Growth Fund. The Plan requires the approval of the shareholders of the Large Cap Growth Fund and will be submitted to the shareholders for their consideration at a meeting to be held in March 2011.
The Trust has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date the financial statements were issued. Based on this evaluation, no adjustments were required to the financial statements as of September 30, 2010.
82 TURNER FUNDS 2010 ANNUAL REPORT
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Trustees and Shareholders
Turner Funds:
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of the Turner Spectrum Fund, Turner Concentrated Growth Fund, Turner Core Growth Fund, Turner Emerging Growth Fund, Turner Large Cap Growth Fund, Turner Midcap Growth Fund, Turner New Enterprise Fund, Turner Small Cap Growth Fund, Turner Quantitative Broad Market Equity Fund, Turner Quantitative Large Cap Value Fund, Turner Global Opportunities Fund, Turner International Core Growth Fund, and Turner Small Cap Equity Fund, (collectively, the Funds), as of September 30, 2010, and the related statements of operations for the year or period then ended, the changes in net assets for each of the years or periods in the two-year period then ended, the statement of cash flows for the year then ended for the Turner Spectrum Fund and the financial highlights for each of the years or periods in the five-year period then ended. The se 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of September 30, 2010, by correspondence with the custodian and brokers or other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the Funds as of September 30, 2010, the results of their operations, the changes in their net assets and the cash flows for the Turner Spectrum Fund, and the financial highlights for the years or periods indicated in the paragraph above, in conformity with U.S. generally accepted accounting principles.
Philadelphia, Pennsylvania
November 29, 2010
TURNER FUNDS 2010 ANNUAL REPORT 83
NOTICE TO SHAREHOLDERS (Unaudited)
For shareholders that do not have a September 30th, 2010 tax year end, this notice is for informational purposes only. For shareholders with a September 30th, 2010 year end, please consult your tax advisor as to the pertinance of this notice. For the fiscal year ended September 30th, 2010, each portfolio is designating the following items with regard to distributions paid during the year.
| | | Long
term
capital
gain
distribution | | Ordinary
income
distributions | | Total
distributions | | Dividends
qualifying
for
corporate
dividends
receivable
deduction(1) | | Qualifying
dividend
income(2) | | Qualifying
interest
income(3) | | Qualifying
short-term
capital
gain(4) | |
| Turner Spectrum Fund | | | 0.00 | % | | | 100.00 | % | | | 100.00 | % | | | 1.65 | % | | | 1.49 | % | | | 0.00 | % | | | 100.00 | % | |
Turner Concentrated
Growth Fund | | | 0.00 | % | | | 100.00 | % | | | 100.00 | % | | | 100.00 | % | | | 100.00 | % | | | 0.00 | % | | | 0.00 | % | |
| Turner Core Growth Fund | | | 0.00 | % | | | 100.00 | % | | | 100.00 | % | | | 100.00 | % | | | 100.00 | % | | | 0.00 | % | | | 0.00 | % | |
Turner Emerging Growth
Fund | | | 0.00 | % | | | 0.00 | % | | | 0.00 | % | | | 0.00 | % | | | 0.00 | % | | | 0.00 | % | | | 0.00 | % | |
Turner Large Cap Growth
Fund | | | 0.00 | % | | | 100.00 | % | | | 100.00 | % | | | 100.00 | % | | | 100.00 | % | | | 0.00 | % | | | 0.00 | % | |
Turner Midcap Growth
Fund | | | 0.00 | % | | | 0.00 | % | | | 0.00 | % | | | 0.00 | % | | | 0.00 | % | | | 0.00 | % | | | 0.00 | % | |
Turner New Enterprise
Fund | | | 0.00 | % | | | 100.00 | % | | | 100.00 | % | | | 100.00 | % | | | 100.00 | % | | | 0.00 | % | | | 0.00 | % | |
Turner Small Cap Growth
Fund | | | 0.00 | % | | | 0.00 | % | | | 0.00 | % | | | 0.00 | % | | | 0.00 | % | | | 0.00 | % | | | 0.00 | % | |
Turner Quantitative Broad
Market Equity Fund | | | 0.00 | % | | | 100.00 | % | | | 100.00 | % | | | 100.00 | % | | | 99.10 | % | | | 0.00 | % | | | 0.00 | % | |
Turner Quantitative
Large Cap Value Fund | | | 0.00 | % | | | 100.00 | % | | | 100.00 | % | | | 100.00 | % | | | 100.00 | % | | | 0.03 | % | | | 0.00 | % | |
Turner Global Opportunities
Fund | | | 0.00 | % | | | 0.00 | % | | | 0.00 | % | | | 0.00 | % | | | 0.00 | % | | | 0.00 | % | | | 0.00 | % | |
Turner International Core
Growth Fund* | | | 0.00 | % | | | 100.00 | % | | | 100.00 | % | | | 3.00 | % | | | 100.00 | % | | | 0.00 | % | | | 0.00 | % | |
Turner Small Cap Equity
Fund | | | 0.00 | % | | | 0.00 | % | | | 0.00 | % | | | 0.00 | % | | | 0.00 | % | | | 0.00 | % | | | 0.00 | % | |
(1) Qualifying dividends represent dividends which qualify for the corporate dividends received deduction and are reflected as a percentage of "Ordinary Income Distributions".
(2) The percentage in this column represents the amount of "Qualifying Dividend Income" as created by the Jobs and Growth Tax Relief Reconciliation Act of 2003 and is reflected as a percentage of "Ordinary Income Distribuions". It is the intention of each of the aforementioned funds to designate the maximum amount permitted by law.
(3) The percentage in this column represents the amount of "Qualifying Interest Income" as created by the American Jobs Creation Act of 2004 and is reflected as a percentage of net investment income distributions that is exempt from U.S. withholding tax when paid to foreign investors. This provision of the Internal Revenue Code will be expiring for tax years beginning after December 31, 2009.
(4) The percentage in this column represents the amount of "Qualifying Short-Term Capital Gain" as created by the American Jobs Creation Act of 2004 and is reflected as a percentage of short-term capital gain distributions that is exempt from U.S. withholding tax when paid to foreign investors. This provision of the Internal Revenue Code will be expiring for tax years beginning after December 31, 2009.
* The Turner International Core Growth Fund intends to pass through a foreign tax credit to shareholders. For fiscal year ended 2010 the total amount of foreign source income is $35,638. The total amount of foreign tax paid is $6,688. Your allocable share of the foreign tax credit will be reported on Form 1099-DIV.
The information reported herein may differ from the information and distributions taxable to the Shareholders for the calendar year ending December 31, 2010. Complete information will be computed and reported in conjunction with your 2009 Form 1099-DIV.
84 TURNER FUNDS 2010 ANNUAL REPORT
TRUSTEES AND OFFICERS OF THE TRUST
| Name, address and age(1) | | Position held with
Trust and length
of service(2) | | Principal occupation(s)
during past 5 years | | Number of
portfolios in
complex
overseen
by trustee | | Other
directorships
held | |
| Interested Trustee* | |
|
Thomas R. Trala, Jr.
(44) | | Trustee (since 2010); President (since 2004) | | Executive Managing Director (since 2010) and Chief Operating Officer (since 2004), Turner. | | | 13 | | | None | |
|
| * Mr. Trala is deemed to be an "Interested Trustee" by virtue of his relationship with Turner. | |
|
| Non-Interested Trustees | |
|
Alfred C. Salvato
(52) | | Chairman of the Board (since 2004); Trustee (since 1996) | | Chief Investment Officer & Treasurer, Thomas Jefferson University (since 2003) Treasurer since 1995. | | | 13 | | | None | |
|
Janet F. Sansone
(65) | | Trustee (since 1997) | | Chief Management Officer, United States Government Printing Office (2008-2010); Self-employed Consultant (1999-2007). | | | 13 | | | None | |
|
John T. Wholihan
(72) | | Trustee (since 1996) | | Dean Emeritus (since 2007), Professor (since 1984) and Dean (1984-2007), College of Business Administration, Loyola Marymount University. | | | 13 | | | None | |
|
| Executive Officers | |
|
Michael Lawson(3)
SEI
One Freedom Valley Drive,
Oaks, PA 19456
(49) | | Controller and Chief Financial Officer (since 2005) | | Director, Fund Accounting, SEI Investments (since 2005); Manager, Fund Accounting (since 1998). | | | N/A | | | N/A | |
|
Brian F. McNally
(52) | | Vice-President (since 2002), Secretary and Chief Compliance Officer (since 2004) | | General Counsel and Chief Compliance Officer (since 2004), Deputy General Counsel (2002-2004), Turner. | | | N/A | | | Director, Turner Funds Plc, an Ireland-based UCIT fund family (since August 2008). | |
|
Calvin Fisher
(37) | | Vice-President and Assistant Secretary (since 2006) | | Director – Mutual Fund Administration and Compliance (since 2005); Manager, Mutual Fund Administration (since 2001), Turner. | | | N/A | | | N/A | |
|
(1) Each Trustee and executive officer, unless noted otherwise, may be contacted by writing to such Trustee or officer c/o Turner Funds, 1205 Westlakes Drive, Suite 100, Berwyn, PA 19312, Attn: Turner Chief Legal Officer.
(2) Each Trustee serves until his or her respective successor has been duly elected and qualified. Each officer serves a one-year term.
(3) Effective December 15, 2010, Ty S. Edwards, Senior Vice President, Financial Services, Citi Fund Services, shall replace Mr. Lawson as Controller and Chief Financial Officer of the Trust. Mr. Edwards was elected by the Board of Trustees on September 10, 2010.
The Trust's Statement of Additional Information ("SAI") includes additional information about the Trustees and Officers. The SAI may be obtained without charge by calling 1.800.224.6312.
TURNER FUNDS 2010 ANNUAL REPORT 85
DISCLOSURE OF FUND EXPENSES (Unaudited)
All mutual funds have operating expenses. As a shareholder of a mutual fund, your investment is affected by these ongoing costs, which include (among others) costs for portfolio management, distribution (12b-1) and/or shareholder services and other expenses. It is important for you to understand the impact of these costs on your investment returns. Operating expenses such as these are deducted from a mutual fund's gross income and directly reduce its final investment return. These expenses are expressed as a percentage of a mutual fund's average net assets; this percentage is known as a mutual fund's expense ratio.
The following examples use the expense ratio and are intended to help you understand the ongoing costs (in dollars) of investing in your Fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period.
The table below and on the next page illustrates your Fund's costs in two ways:
• Actual Fund Return. This section helps you to estimate the actual expenses after fee waivers that your Fund incurred over the period. The "Expenses Paid During Period" column shows the actual dollar expense cost incurred by a $1,000 investment in the Fund, and the "Ending Account Value" number is derived from deducting that expense cost from the Fund's gross investment return.
You can use this information, together with the actual amount you invested in the Fund, to estimate the expenses you paid over that period. Simply divide your actual account value by $1,000 to arrive at a ratio (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply that ratio by the number shown for your Fund under "Expenses Paid During Period."
• Hypothetical 5% Return. This section helps you compare your Fund's costs with those of other mutual funds. It provides information about hypothetical account values and expenses based on the Fund's actual expense ratio (column 3) and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. This section is useful in making comparisons because the Securities and Exchange Commission requires all mutual funds to make this 5% calculation. You can assess your Fund's comparative cost by comparing the hypothetical result for your Fund in the "Expenses Paid During Period" column with those that appear in the same charts in the shareholder reports for other mutual funds.
Note: Because the return is set at 5% for comparison purposes — NOT your Fund's actual return — the hypothetical account values and expenses may not be used to estimate your actual ending account balance or expenses you paid for the period.
| | | Beginning
Account
Value
4/1/10 | | Ending
Account
Value
9/30/10 | | Annualized
Expense
Ratios | | Expenses
Paid
During
Period* | |
| Turner Spectrum Fund — Institutional Class Shares | |
| Actual Fund Return | | $ | 1,000.00 | | | $ | 978.30 | | | | 1.91 | % | | $ | 9.47 | | |
Hypothetical
5% Return | | | 1,000.00 | | | | 1,015.49 | | | | 1.91 | | | | 9.65 | | |
| Turner Spectrum Fund — Investor Class Shares | |
| Actual Fund Return | | | 1,000.00 | | | | 977.30 | | | | 2.17 | | | | 10.76 | | |
Hypothetical
5% Return | | | 1,000.00 | | | | 1,014.19 | | | | 2.17 | | | | 10.96 | | |
| Turner Spectrum Fund — Class C Shares | |
| Actual Fund Return | | | 1,000.00 | | | | 973.70 | | | | 2.92 | | | | 14.45 | | |
Hypothetical
5% Return | | | 1,000.00 | | | | 1,010.43 | | | | 2.92 | | | | 14.72 | | |
| Turner Concentrated Growth Fund — Investor Class Shares | |
| Actual Fund Return | | | 1,000.00 | | | | 1,004.50 | | | | 1.41 | | | | 7.09 | | |
Hypothetical
5% Return | | | 1,000.00 | | | | 1,018.00 | | | | 1.41 | | | | 7.13 | | |
| Turner Core Growth Fund — Institutional Class Shares | |
| Actual Fund Return | | | 1,000.00 | | | | 966.10 | | | | 0.69 | | | | 3.40 | | |
Hypothetical
5% Return | | | 1,000.00 | | | | 1,021.61 | | | | 0.69 | | | | 3.50 | | |
| | | Beginning
Account
Value
4/1/10 | | Ending
Account
Value
9/30/10 | | Annualized
Expense
Ratios | | Expenses
Paid
During
Period* | |
| Turner Core Growth Fund — Investor Class Shares | |
| Actual Fund Return | | $ | 1,000.00 | | | $ | 965.00 | | | | 0.94 | % | | $ | 4.63 | | |
Hypothetical
5% Return | | | 1,000.00 | | | | 1,020.36 | | | | 0.94 | | | | 4.76 | | |
| Turner Emerging Growth Fund — Institutional Class Shares | |
| Actual Fund Return | | | 1,000.00 | | | | 985.90 | | | | 1.15 | | | | 5.73 | | |
Hypothetical
5% Return | | | 1,000.00 | | | | 1,019.30 | | | | 1.15 | | | | 5.82 | | |
| Turner Emerging Growth Fund — Investor Class Shares | |
| Actual Fund Return | | | 1,000.00 | | | | 984.40 | | | | 1.40 | | | | 6.96 | | |
Hypothetical
5% Return | | | 1,000.00 | | | | 1,018.05 | | | | 1.40 | | | | 7.08 | | |
| Turner Large Cap Growth Fund — Institutional Class Shares | |
| Actual Fund Return | | | 1,000.00 | | | | 987.80 | | | | 0.69 | | | | 3.44 | | |
Hypothetical
5% Return | | | 1,000.00 | | | | 1,021.61 | | | | 0.69 | | | | 3.50 | | |
| Turner Large Cap Growth Fund — Investor Class Shares | |
| Actual Fund Return | | | 1,000.00 | | | | 985.70 | | | | 0.94 | | | | 4.68 | | |
Hypothetical
5% Return | | | 1,000.00 | | | | 1,020.36 | | | | 0.94 | | | | 4.76 | | |
86 TURNER FUNDS 2010 ANNUAL REPORT
DISCLOSURE OF FUND EXPENSES (Unaudited)
| | | Beginning
Account
Value
4/1/10 | | Ending
Account
Value
9/30/10 | | Annualized
Expense
Ratios | | Expenses
Paid
During
Period* | |
| Turner Midcap Growth Fund — Institutional Class Shares | |
| Actual Fund Return | | $ | 1,000.00 | | | $ | 999.00 | | | | 0.93 | % | | $ | 4.66 | | |
Hypothetical
5% Return | | | 1,000.00 | | | | 1,020.41 | | | | 0.93 | | | | 4.71 | | |
| Turner Midcap Growth Fund — Investor Class Shares | |
| Actual Fund Return | | | 1,000.00 | | | | 998.00 | | | | 1.18 | | | | 5.91 | | |
Hypothetical
5% Return | | | 1,000.00 | | | | 1,019.15 | | | | 1.18 | | | | 5.97 | | |
| Turner Midcap Growth Fund — Retirement Class Shares | |
| Actual Fund Return | | | 1,000.00 | | | | 996.90 | | | | 1.43 | | | | 7.16 | | |
Hypothetical
5% Return | | | 1,000.00 | | | | 1,017.90 | | | | 1.43 | | | | 7.23 | | |
| Turner New Enterprise Fund — Investor Class Shares | |
| Actual Fund Return | | | 1,000.00 | | | | 1,024.80 | | | | 1.71 | | | | 8.68 | | |
Hypothetical
5% Return | | | 1,000.00 | | | | 1,016.50 | | | | 1.71 | | | | 8.64 | | |
| Turner Small Cap Growth Fund — Investor Class Shares | |
| Actual Fund Return | | | 1,000.00 | | | | 1,015.80 | | | | 1.25 | | | | 6.32 | | |
Hypothetical
5% Return | | | 1,000.00 | | | | 1,018.80 | | | | 1.25 | | | | 6.33 | | |
Turner Quantitative Broad Market Equity Fund —
Institutional Class Shares | |
| Actual Fund Return | | | 1,000.00 | | | | 959.10 | | | | 0.64 | | | | 3.14 | | |
Hypothetical
5% Return | | | 1,000.00 | | | | 1,021.86 | | | | 0.64 | | | | 3.24 | | |
Turner Quantitative Broad Market Equity Fund —
Investor Class Shares | |
| Actual Fund Return | | | 1,000.00 | | | | 956.90 | | | | 0.89 | | | | 4.37 | | |
Hypothetical
5% Return | | | 1,000.00 | | | | 1,020.61 | | | | 0.89 | | | | 4.51 | | |
Turner Quantitative Large Cap Value Fund —
Institutional Class Shares | |
| Actual Fund Return | | | 1,000.00 | | | | 968.00 | | | | 0.69 | | | | 3.40 | | |
Hypothetical
5% Return | | | 1,000.00 | | | | 1,021.61 | | | | 0.69 | | | | 3.50 | | |
| | | Beginning
Account
Value
4/1/10 | | Ending
Account
Value
9/30/10 | | Annualized
Expense
Ratios | | Expenses
Paid
During
Period* | |
| Turner Quantitative Large Cap Value Fund — Investor Class Shares | |
| Actual Fund Return | | $ | 1,000.00 | | | $ | 966.70 | | | | 0.90 | % | | $ | 4.44 | | |
Hypothetical
5% Return | | | 1,000.00 | | | | 1,020.56 | | | | 0.90 | | | | 4.56 | | |
| Turner Global Opportunities Fund — Institutional Class Shares | |
| Actual Fund Return | | | 1,000.00 | | | | 1,152.00 | | | | 1.10 | | | | 4.67 | ** | |
Hypothetical
5% Return | | | 1,000.00 | | | | 1,019.55 | | | | 1.10 | | | | 5.57 | | |
| Turner Global Opportunities Fund — Investor Class Shares | |
| Actual Fund Return | | | 1,000.00 | | | | 1,150.00 | | | | 1.56 | | | | 6.62 | ** | |
Hypothetical
5% Return | | | 1,000.00 | | | | 1,017.25 | | | | 1.56 | | | | 7.89 | | |
| Turner International Core Growth Fund — Institutional Class Shares | |
| Actual Fund Return | | | 1,000.00 | | | | 1,044.40 | | | | 1.10 | | | | 5.64 | | |
Hypothetical
5% Return | | | 1,000.00 | | | | 1,019.55 | | | | 1.10 | | | | 5.57 | | |
| Turner International Core Growth Fund — Investor Class Shares | |
| Actual Fund Return | | | 1,000.00 | | | | 1,043.30 | | | | 1.35 | | | | 6.92 | | |
Hypothetical
5% Return | | | 1,000.00 | | | | 1,018.30 | | | | 1.35 | | | | 6.83 | | |
| Turner Small Cap Equity Fund — Institutional Class Shares | |
| Actual Fund Return | | | 1,000.00 | | | | 1,018.40 | | | | 1.20 | | | | 6.07 | | |
Hypothetical
5% Return | | | 1,000.00 | | | | 1,019.05 | | | | 1.20 | | | | 6.07 | | |
| Turner Small Cap Equity Fund — Investor Class Shares | |
| Actual Fund Return | | | 1,000.00 | | | | 1,016.60 | | | | 1.45 | | | | 7.33 | | |
Hypothetical
5% Return | | | 1,000.00 | | | | 1,017.80 | | | | 1.45 | | | | 7.33 | | |
* Unless otherwise indicated, expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period from 4/1/10 - 9/30/10.)
** Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by 144/365 (to reflect the period from inception to date, 5/7/10 - 9/30/10.)
TURNER FUNDS 2010 ANNUAL REPORT 87
Turner Funds
Turner Funds' trustees
Alfred C. Salvato
Chief Investment Officer & Treasurer
Thomas Jefferson University
Janet F. Sansone
Chief Management Officer
Office of The Public Printer of the United States
Thomas R. Trala, Jr.
Executive Managing Director &
Chief Operating Officer
Turner Investment Partners, Inc.
Dr. John T. Wholihan
Professor, Dean Emeritus, College of Business
Loyola Marymount University
Investment advisers
Turner Investment Partners, Inc.
Turner Investment Management LLC
Berwyn, Pennsylvania
Distributor
Foreside Fund Services, LLC
Portland, Maine
Administrator
Turner Investment Partners, Inc.
Berwyn, Pennsylvania
Independent Registered Public Accounting Firm
KPMG LLP
Philadelphia, Pennsylvania
This report was prepared for shareholders of the Turner Funds. It may be distributed to others only if preceded or accompanied by a Turner Funds' Prospectus, which contains detailed information. All Turner Funds are offered by prospectus only.
The Funds file their complete schedules of portfolio holdings with the Securities and Exchange Commission (the "Commission") for the first and third quarters of each fiscal year on Form N-Q within sixty days after the end of the period. The Funds' Forms N-Q are available on the Commission's website at http://www.sec.gov, and may be reviewed and copied at the Commission's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
The Board of Trustees of the Turner Funds has delegated responsibility for decisions regarding proxy voting for securities
held by each Fund to Turner Investment Management LLC ("TIM") (with respect to the Small Cap Equity Fund only) and to Turner Investment Partners, Inc. (with respect to each other Fund). TIM and Turner Investment Partners, Inc., will vote such proxies in accordance with their respective proxy policies and procedures, which are included in Appendix B to the SAI. The Board of Trustees will periodically review each Fund's proxy voting record.
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities, as well as information relating to how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, is available (i) via the Funds' website, www.turnerinvestments.com; (ii) on the Commission's website at http://www.sec.gov; and (iii) without charge by calling 1.800.224.6312.
88 TURNER FUNDS 2010 ANNUAL REPORT
Turner Funds
P.O. Box 219805
Kansas City, Missouri 64121-9805
Telephone: 1.800.224.6312
Email: mutualfunds@turnerinvestments.com
Web Site: www.turnerinvestments.com
TUR-AR-002-0307
Item 2. Code of Ethics.
The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, and principal accounting officer.
Item 3. Audit Committee Financial Expert.
The Board of Trustees of the Turner Funds has determined that the Board’s Audit Committee does not have an “audit committee financial expert,” as the Securities and Exchange Commission has defined that term. After carefully considering all of the factors involved in the definition of “audit committee financial expert,” the Board determined that none of the members of the audit committee possessed all five attributes in the definition, although some members of the Audit Committees possessed some of the attributes. The Board also determined that the Audit Committee members have general financial expertise, and given the size and types of the Turner Funds and in light of the nature of the accounting and valuation issues presented over the past several years, it did not appear that the Audit Committee members lacked any necessary skill to serve on the Audit Committee.
Item 4. Principal Accountant Fees and Services.
Fees billed by KPMG LLP (“KPMG”) Related to the Trust
KPMG billed the Trust aggregate fees for services rendered to the Trust for the last two fiscal years as follows:
| | 2010 | | 2009 | |
| | All fees and
services to the
Trust that were
pre-approved | | All fees and
services to
service
affiliates that
were pre-approved | | All other fees
and services to
service
affiliates that
did not require
pre-approval | | All fees and
services to the
Trust that were
pre-approved | | All fees and
services to
service
affiliates that
were pre-approved | | All other fees
and services to
service
affiliates that
did not require
pre-approval | |
(a) Audit Fees (1) | | $ | 246,250 | | N/A | | N/A | | $ | 236,000 | | N/A | | N/A | |
(b) Audit-Related Fees | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | |
(c) Tax Fees (2) | | $ | 79,600 | | N/A | | N/A | | $ | 76,150 | | N/A | | N/A | |
(d) All Other Fees (3) | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | |
Notes:
(1) Audit fees include fees related to the audit of the registrant’s annual financial statements and services normally provided by the accountant in connection with statutory and regulatory filings.
(2) Tax fees consist of tax compliance services for the Trust. These services primarily included review of federal income tax returns and excise tax returns, as well as services relating to excise tax distribution requirements.
(3) All Other Fees consist of fees for services provided in connection with an assessment of the advisor’s anti-money laundering program.
(e)(1) The audit committee does not have pre-approval policies and procedures. Instead, the audit committee approves on a case-by-case basis each audit or non-audit service before the accountant is engaged by the registrant.
(e)(2) Percentage of fees billed applicable to non-audit services pursuant to waiver of pre-approval requirement were as follows:
| | 2010 | | 2009 | |
Audit-Related Fees | | 0.00 | % | 0.00 | % |
Tax Fees | | 0.00 | % | 0.00 | % |
All Other Fees | | 0.00 | % | 0.00 | % |
(f) Not applicable.
(g) The aggregate non-audit fees and services billed by KPMG for the last two fiscal years were $79,600 and $76,150 for 2010 and 2009, respectively, as described above.
(h) The registrant’s Audit Committee has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.
Item 5. Audit Committee of Listed Registrants.
Not applicable to open-end management investment companies.
Item 6. Investments.
Schedule of Investments is included as part of the report to shareholders filed under Item 1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable to open-end management investment companies.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable to open-end management investment companies.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable to open-end management investment companies.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s Board of Trustees since the registrant’s last proxy solicitation.
Item 11. Controls and Procedures.
(a) The registrant’s principal executive officer and principal financial officer concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 as amended (the “Act”)) were effective as of a date within 90 days of the filing date of this report, based on their evaluation of the effectiveness of the registrant’s disclosure controls and procedures required by Rule 30a-3(b) under the Act and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934.
(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) of the Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Items 12. Exhibits.
(a)(1) Code of Ethics attached hereto.
(a)(2) A separate certification for the principal executive officer and the principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), are filed herewith.
(b) Officer certifications as required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany this filing as an Exhibit.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) | Turner Funds |
| |
| |
By (Signature and Title) | /s/ Thomas R. Trala, Jr. |
| Thomas R. Trala, Jr., President |
| |
Date: December 8, 2010 | |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title) | /s/ Thomas R. Trala, Jr. |
| Thomas R. Trala, Jr., President |
| |
Date: December 8, 2010 | |
| |
| |
By (Signature and Title) | /s/ Michael Lawson |
| Michael Lawson, Controller and CFO |
| |
Date: December 8, 2010 | |
