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 811-0792
CNI Charter Funds
(Exact name of registrant as specified in charter)
400 North Roxbury Drive
Beverly Hills, CA 90210
(Address of principal executive offices) (Zip code)
SEI Investments Distributors
1 Freedom Valley Drive
Oaks, PA 19456
(Name and address of agent for service)
Registrant’s telephone number, including area code: 1-888-889-0799
Date of fiscal year end: September 30, 2010
Date of reporting period: September 30, 2010
| Item 1. | Reports to Stockholders. |
This report and the financial statements contained herein are provided for the general information of the shareholders of CNI Charter Funds. This report is not authorized for distribution to prospective investors in CNI Charter Funds unless preceded or accompanied by an effective prospectus. Please remember that past performance is no guarantee of future results.
Shares of CNI Charter Funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency and involve investment risks, including the possible loss of the principal amount invested.
TABLE OF CONTENTS
CNI Charter Funds Annual Report
| 2 | Letter to Our Shareholders |
| 4 | Money Market Funds Investment Adviser's Report |
| 6 | Fixed Income Funds Investment Adviser's Report |
| 8 | Fixed Income Funds Overview |
| 12 | Equity and Blended Funds Investment Adviser's Report |
| 14 | Equity and Blended Funds Overview |
| 18 | CCMA Funds Investment Adviser's Report |
| 22 | CCMA Funds Overview |
| 26 | Schedule of Investments |
| 78 | Statements of Assets and Liabilities |
| 82 | Statements of Operations |
| 86 | Statements of Changes in Net Assets |
| 92 | Financial Highlights |
| 96 | Notes to Financial Statements |
| 106 | Report of Independent Registered Public Accounting Firm |
| 108 | Trustees and Officers |
| 111 | Notice to Shareholders |
| 112 | Disclosure of Fund Expenses |
| 114 | Board Approval of Advisory and Sub-Advisory Agreements |
The Funds file their complete schedules of portfolio holdings with the Securities and Exchange 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’ Form N-Q is 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 most current Form N-Q is also available on the Funds’ website at www.cnicharterfunds.com and without charge, upon request, by calling 1-888-889-0799.
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to the Funds’ portfolio securities, and information on how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ending June 30 is available (1) without charge, upon request, by calling 1-888-889-0799, (2) on the Funds’ website at www.cnicharterfunds.com, and (3) on the Securities and Exchange Commission’s website at www.sec.gov.
CNI CHARTER FUNDS | PAGE 1
| letter to our shareholders |
September 30, 2010 |
This annual report covers CNI Charter Funds (the “Trust”) for the fiscal year ending September 30, 2010. On the following pages, you will find the specific details of each Fund’s portfolio and investment performance.
The U.S. economy continues to grind slowly ahead. Private payrolls have increased for nine consecutive months and household consumption has grown. Residential real estate, which appears finally to have hit bottom after a five-year bear market, is progressing at a rate much slower than has been found in past recoveries. This recession and recovery, like many caused by financial crises, is more severe and longer lasting, ultimately leading to a protracted economic recovery process. Simply put, it takes a long time to repair financial damage. Restoring the balance sheets of households and businesses does not happen quickly.
The stage is now set for an expansion. Interest rates are at, or near, record lows. Corporations are chock full of cash and ready to move ahead. Households and small businesses seem to be waiting to get a higher degree of confidence before they move ahead. Economic recoveries are never a linear move upward and there are generally fits and starts along the way. This recovery is no different — the reality is that although the U.S. economy is getting better, the pace of improvement is likely to remain slow for some time.
Within this economic framework, the underlying investment philosophy of the Trust’s two affiliated advisors - City National Asset Management, Inc. (“CNAM”) and CCM Advisors, LLC (“CCMA”) - is to pursue the long-term goals and objectives specified for each of the Funds. With an active yet disciplined style, each Fund is managed with the goal of achieving competitive rates of return consistent with its respective, prescribed risk parameters. The Trust follows a disciplined investment process that begins with a thorough assessment of the macroeconomic environment and the financial markets. Our broad based research process takes advantage of the most advanced investment technology, fundamental valuation, and quantitative tools to determine the most attractive sectors and securities within each Fund’s area o f concentration. The final step is to construct and continuously monitor precise portfolios that meet the objectives of the specific Funds, without being swayed by short term trends and fads. This approach, which extends to sub-advisors managing assets in selected portfolios, continued to serve shareholders well during the ongoing market uncertainty for the fiscal year ending September 30, 2010.
CNI CHARTER FUND HIGHLIGHTS
As of September 30, 2010, the Trust offers fifteen portfolios across the U.S. Equity, U.S. Fixed Income and Short Term Investment asset classes to provide solutions to a variety of shareholder investment needs. During the year, funds advised by CCMA, an affiliate of CNAM and City National Bank, were re-branded as part of the Trust to reflect our desire to expand the array of investment options offered to all shareholders. This annual report incorporates all portfolios within the Trust managed by CNAM and CCMA.
The Funds and the advisers to the Funds remain fully committed to placing the needs of shareholders first. One demonstration of our commitment to maintain competitively positioned funds is the continuing voluntary waiver of investment advisory and other fees on our Money Market Funds so that shareholder return could remain positive in a near zero short term interest rate environment of the past year.
By adhering to our basic investment discipline and maintaining the appropriate amount of risk control in the various portfolios, the Funds continued to provide returns that are competitive in their respective investment arenas. Those returns relative to respective benchmarks and peer groups are provided in each of the accompanying commentaries on the CNAM advised money market, fixed income and equity portfolios and on the CCMA advised portfolios.
CNI CHARTER FUNDS | PAGE 2
Please read the following pages carefully as they contain important information on the assets and financial condition of the Funds. If you have any questions about this report or CNI Charter Funds, please call your investment professional or (888) 889-0799.
Thank you for choosing CNI Charter Funds.
Sincerely,
Richard S. Gershen
President
CNI Charter Funds
Past performance is no guarantee of future results. Certain shareholders may be subject to the Alternative Minimum Tax (AMT). Federal income tax rules apply to any capital gain distributions.
Fund expenses have been waived during the period on which the performance is based. Without waivers, performance would be lower.
This information must be preceded or accompanied by a current prospectus. Please read the prospectus carefully before investing.
CNI CHARTER FUNDS | PAGE 3
| investment adviser’s report |
September 30, 2010 |
| Money Market Funds |
The past 12 months have been a period of continued improvement and relative calm for the credit markets. Short term markets improved with each passing month as efforts by central banks took hold and eventually expired. In fact, many of the Federal Reserve (the “Fed”) programs designed to support liquidity in the money markets, such as the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (AMLF), Commercial Paper Funding Facility (CPFF), Primary Dealer Credit Facility (PDCP) and Term Securities Lending Facility (TSLF), expired on February 1, 2010, with little fanfare or noticeable effect.
In response to the market turbulence of 2008-2009 the Securities and Exchange Commission (SEC) approved amendments to Rule 2a-7, the section of the Investment Company Act of 1940 that governs the operations of money market funds. The rule changes were designed with the purpose of better protecting investors and making money market funds more resilient and able to withstand market stresses similar to those of 2008. The changes that took effect in May and June of 2010 seek to shorten the maximum weighted-average maturity of money market funds, restrict the maximum exposure to “second tier” and illiquid securities, require funds to design and implement periodic stress tests of their funds, and require enhanced disclosure of portfolio holdings. We support these changes and feel they will allow greater protections for investors.
As of this writing, the effective Fed Funds target rate has remained at 0.00% to 0.25% since late 2008. With most money market instrument yields based on the Fed Funds rate, this has put downward pressure on yields for the underlying securities found in money market funds. In fact, much of 2010 has been marked by historically low yields with many funds yielding at or near 0.0%. As a result of this ultra-low yield environment, money market fund assets have declined close to 17% over the past 12 months according to iMoneyNet.
FUND COMMENTARY
| • | The Prime Money Market Fund continued to emphasize high quality liquid issuers as a way to garner yield while keeping an emphasis on risk management. With our strategy focusing primarily on the highest quality and liquid issuers, the Fund performed very well during this period. The fund continues to keep the average life around 40 days in order to maintain higher yielding holdings in this very low interest rate environment. Until we get evidence of sustained economic growth, we will maintain our 40-50 day average life. |
| • | The Government Money Market Fund was positioned well for changes in Fed policy and the lower economic growth environment. We maintained our maturity profile of over 45 days average life in the Fund in order to benefit from higher yielding holdings in the face of continued low interest rates projected for early 2011. |
| • | Our objective for the California Tax Exempt Money Market Fund continues to focus on the fundamental objective of principal preservation and liquidity. With the yield curve for allowable tax-free money market fund assets essentially flat we have kept the average life of the portfolio short at 20 days. Additionally, we continue to watch the state of California very closely as the economic crisis continues to put pressure on the state and local issuers. We continue to avoid direct issues of California General Obligations due to the uncertainty in its ratings and budgetary imbalances. |
STRATEGIC OUTLOOK
On November 3, 2010 the Fed announced measures that will continue to support low interest rates for an “extended period” of time. Given the slow pace of economic recovery and continuing high unemployment, it appears that the Federal Reserve Open Market Committee (“FOMC”) will not begin to increase interest rates until late 2011. We consider our Money Market Funds to be appropriately positioned for the low rate and
CNI CHARTER FUNDS | PAGE 4
slow economic growth environment that is expected. As always, City National Asset Management, Inc. continues to monitor the objectives of the Funds very closely and seek opportunities in the markets to best serve our shareholders.
Sincerely,
 Gregory Kaplan |  William Miller |
 Paul Single |
Directors of Fixed Income Investments
City National Asset Management, Inc.
This material represents the managers’ assessment of the portfolios and market environment at a specific point in time and should not be relied upon by the reader as research or investment advice.
CNI CHARTER FUNDS | PAGE 5
| investment adviser’s report |
September 30, 2010 |
| Fixed Income Funds |
The overall pace of the economic recovery remains sedated relative to past recoveries. This fact is most evident in the labor markets. Aggressive actions of fiscal stimulus by the federal government and assertive easing of monetary policy by the Federal Reserve Bank (the “Fed”) appear to have shortened the recession from what it could have been. Nevertheless, neither action has been enough to spur a robust expansion. It seems as if the economy is in an awkward stage between a full recession and a strong recovery.
Even more apparent is that the economy is in a liquidity trap; consumer interest rates are at record lows, yet demand for loans remains low. While fiscal stimulus is the most effective tool for boosting economic growth, current changes in Washington appear to negate this opportunity. Consequently, the Fed is the only game in town. As the leader of this recovery, the Fed brought overnight rates down to near zero back in December 2008. In the fall of 2010, they entered a second stage of quantitative easing, with the strategy of buying securities to lower intermediate and longer-term interest rates. This should, in effect, lower interest rates on consumer loans and mortgages, further discouraging personal savings.
Against this backdrop, the share price of bond funds has been moving up in response to the lower interest rate environment yet, at the same time, the dividend yield has been moving down in response to the lower market yields. In the taxable bond market, Treasury rates continued their march downward as demand for the perceived safety of treasury securities remained high and inflation expectations continued to drop. The yield on corporate bonds fell for those same fundamental reasons and perceived credit quality improved along with a recovering economy.
However, the story was a bit different in the municipal bond market where many issuers have grappled with declining revenues and associated budgetary challenges. There have been a few relatively small, yet well covered, actual or near defaults that have kept the broader municipal market on edge. Most notable among these have been Jefferson County Alabama, Vallejo California and Harrisburg Pennsylvania. A well-diversified portfolio, emphasis on the highest quality sectors and a stringent review of potential credit issues remains a strong focus for City National Asset Management, Inc.
All returns listed below relate to the 12-month period ending September 30, 2010 and are net of expenses. CNI Charter Funds’ returns refer to Institutional Class Shares. Other classes would have different returns.
GOVERNMENT BOND FUND
The Government Bond Fund (the “Fund”) produced a total return of 3.37% while the Barclays Capital Intermediate U.S. Government Bond Index returned 6.19%. The Fund trailed the benchmark due to our underweight in U.S. Treasury securities. We maintain our slightly shorter maturity stance versus the benchmark in order to keep liquidity higher than normal to support shareholder activity. The Fund also trailed its peer group during this period as evidenced by the Lipper Short Intermediate U.S. Government Objective return of 4.44%.
CORPORATE BOND FUND
The Corporate Bond Fund (the “Fund”) produced a total return of 6.50% while the Barclays Capital Intermediate U.S. Corporate Index returned 11.55%. The Fund maintained a cautious stance in the face of elevated unemployment and uncertain economic conditions. Our underweight in lower quality (BBB) issues led to a lower than benchmark return. However, opportunistic trades in finance issuers and increased allocation to lower quality issues resulted in performance closer to peer funds as shown by the Lipper Short Intermediate Investment Grade Objective return of 7.64%.
CALIFORNIA TAX-EXEMPT BOND FUND
The California Tax Exempt Bond Fund (the “Fund”) produced a total return of 4.34% while the Barclays Capital CA Intermediate-Short Municipal Bond Index returned 5.20%. The past fiscal year returns were very close to historical averages as municipals continued
CNI CHARTER FUNDS | PAGE 6
migrating back to the norm after the credit crisis. Absolute performance was strong – but lagged behind the Barclays index primarily because the Fund had a far smaller concentration in California State General Obligation issues. The Fund fared significantly better against its peer group, the Lipper California Short/Intermediate Municipal Fund Objective, which returned 3.32%. This is due to the Fund having a longer duration by design to capture gains as weak economic performance and technical market factors related to the Build America Bond program led to falling tax-exempt yields.
HIGH YIELD BOND FUND
The High Yield Bond Fund’s (the “Fund”) total return was 20.17%. This compares favorably to the Citigroup High Yield Market Capped Index return of 16.98% (the “Market Cap” refers to the fact that no one security can comprise more than 2% of the index) and Lipper’s High Current Yield Bond Fund Objective return of 16.59%. An important strategy of the Fund is that it seeks to buy high yield bonds that are at the upper credit quality end of the below investment grade spectrum. This is a key risk control measure and is designed to avoid defaults in this higher risk sector of the corporate bond market. Fund investors were rewarded this year for this approach as none of the bonds held by the Fund went into default. Also aiding performance was the decision to allocate about 25% of the Fund to senior secured bon ds with a first call on the underlying company’s assets, as this type of security has outpaced the index. Exposure to Industrial bonds in sectors benefitting from economic recovery, including Finance, Technology and Telecommunications, contributed to the Fund’s outperformance. This was countered by underweighting three groups that did well in this fiscal period: Chemicals, Transportation and Manufacturing, reflective of the Fund sub-advisor’s macroeconomic forecast that the recovery will be gradual in 2011.
The following pages provide an overview of each of the Fixed Income Funds managed by City National Asset Management, Inc. Please visit cnicharterfunds.com for the most current returns.
Sincerely,
Gregory Kaplan | William Miller |
Paul Single |
Directors of Fixed Income Investments
City National Asset Management, Inc.
This material represents the managers’ assessment of the portfolios and market environment at a specific point in time and should not be relied upon by the reader as research or investment advice.
CNI CHARTER FUNDS | PAGE 7
| fund overview |
September 30, 2010 |
| Corporate Bond Fund |
The Fund seeks to provide current income (as the primary component of a total return intermediate duration strategy) by investing in a diversified portfolio of investment grade fixed income securities, primarily corporate bonds issued by domestic and international companies denominated in U.S. dollars.
Comparison of Change in the Value of a $10,000 Investment in the Corporate Bond Fund, Institutional Class or Class N Shares, versus the Barclays Intermediate U.S. Corporate Index, and the Lipper Short/Intermediate Investment Grade Debt Objective(1)
| (1) | The performance in the above graph does not reflect the deduction of taxes the shareholder will pay on Fund distributions or the redemptions of Fund shares. Investment performance reflects fee waivers in effect. In the absence of such waivers, total return would be reduced. |
Past performance is no indication of future performance.
The Fund’s comparative benchmarks do not include the annual operating expenses incurred by the Fund. Please note that one cannot invest directly in an unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS | ||||||
Shares | Ticker Symbol | 1-Year Return | 3-Year Return | 5-Year Return | 10-Year Return | Inception to Date |
Institutional Class (1)^ | CNCIX | 6.50% | 6.22% | 5.28% | 5.44% | 5.62% |
Class N (2)† | CCBAX | 6.23% | 5.98% | 5.03% | 5.19% | 5.40% |
| (1) | Commenced operations on January 14, 2000. |
| (2) | Commenced operations on April 13, 2000. |
| ^ | The Fund’s Institutional Class Shares are currently offered only to accounts for which City National Bank serves as trustee or in a fiduciary capacity. |
| † | Class N Shares’ performance for the period of January 14, 2000 to April 13, 2000 was calculated using the performance of the Institutional Class Shares adjusted to reflect the expenses of the Class N Shares. If performance of the Institutional Class Shares had not been adjusted, the performance of the Class N Shares for that period would have been higher because the expenses of the Class N Shares are higher than those of the Institutional Class Shares. |
| TOP TEN HOLDINGS | |
| % OF PORTFOLIO | |
| Ally Financial, FDIC Insured | |
| 2.200%, 12/19/12 | 4.4 |
| Wachovia Bank | |
| 4.800%, 11/01/14 | 3.3 |
| Kingdom of Denmark | |
| 2.750%, 11/15/11 | 2.9 |
| Caisse Centrale Desjardins du Quebec | |
| 2.650%, 09/16/15 | 2.8 |
| General Electric Capital, FDIC Insured, MTN | |
| 2.625%, 12/28/12 | 2.7 |
| Citigroup Funding, FDIC Insured | |
| 2.250%, 12/10/12 | 2.4 |
| JPMorgan Chase, FDIC Insured | |
| 2.125%, 12/26/12 | 2.4 |
| ConocoPhillips Canada Funding I | |
| 5.625%, 10/15/16 | 2.2 |
| General Electric Capital, Ser A, MTN | |
| 6.000%, 06/15/12 | 2.1 |
| Wells Fargo, FDIC Insured | |
| 3.000%, 12/09/11 | 2.1 |
CNI CHARTER FUNDS | PAGE 8
| fund overview |
September 30, 2010 |
| Government Bond Fund |
The Fund seeks to provide current income (as the primary component of a total return intermediate duration strategy) by investing primarily in U.S. government securities either issued or guaranteed by the U.S. government or its agencies or instrumentalities.
Comparison of Change in the Value of a $10,000 Investment in the Government Bond Fund, Institutional Class or Class N Shares, versus the Barclays Intermediate U.S. Government Bond Index, and the Lipper Short/Intermediate U.S. Government Objective(1)
| (1) | The performance in the above graph does not reflect the deduction of taxes the shareholder will pay on Fund distributions or the redemptions of Fund shares. Investment performance reflects fee waivers in effect. In the absence of such waivers, total return would be reduced. |
Past performance is no indication of future performance.
The Fund’s comparative benchmarks do not include the annual operating expenses incurred by the Fund. Please note that one cannot invest directly in an unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS | ||||||
Shares | Ticker Symbol | 1-Year Return | 3-Year Return | 5-Year Return | 10-Year Return | Inception to Date |
Institutional Class (1)^ | CNBIX | 3.37% | 4.47% | 4.27% | 4.50% | 4.73% |
Class N (2)† | CGBAX | 3.10% | 4.20% | 4.00% | 4.27% | 4.49% |
| (1) | Commenced operations on January 14, 2000. |
| (2) | Commenced operations on April 13, 2000. |
| ^ | The Fund’s Institutional Class Shares are currently offered only to accounts for which City National Bank serves as trustee or in a fiduciary capacity. |
| † | Class N Shares’ performance for the period of January 14, 2000 to April 13, 2000 was calculated using the performance of the Institutional Class Shares adjusted to reflect the expenses of the Class N Shares. If performance of the Institutional Class Shares had not been adjusted, the performance of the Class N Shares for that period would have been higher because the expenses of the Class N Shares are higher than those of the Institutional Class Shares. |
| TOP TEN HOLDINGS | |
| % OF PORTFOLIO | |
| Israel Government AID Bond | |
| 3.815%, 05/15/20 | 7.2 |
| FHLB | |
| 4.805%, 08/20/15 | 7.2 |
| FNMA | |
| 2.500%, 06/10/11 | 6.3 |
| FNMA | |
| 3.000%, 07/28/14 | 5.9 |
| FNMA REMIC, Ser 2006-R009, Cl AJ | |
| 5.750%, 12/15/18 | 5.7 |
| FHLMC REMIC, Ser 2007-R011, Cl AB | |
| 5.500%, 12/15/20 | 5.3 |
| FNMA | |
| 4.625%, 05/01/13 | 4.8 |
| FHLB | |
| 3.250%, 09/12/14 | 4.8 |
| FHLMC, MTN | |
| 1.250%, 03/23/11 | 4.4 |
| FNMA | |
| 2.000%, 09/30/15 | 4.4 |
CNI CHARTER FUNDS | PAGE 9
| fund overview |
September 30, 2010 |
| California Tax Exempt Bond Fund |
The Fund seeks to provide current income exempt from Federal and California state income tax (as the primary component of a total return strategy) by investing primarily in California municipal bonds and notes.
Comparison of Change in the Value of a $10,000 Investment in the California Tax Exempt Bond Fund, Institutional Class or Class N Shares, versus the Barclays CA Intermediate-Short Municipal Index, and the Lipper CA Short/Intermediate Municipal Debt Objective(1)
| (1) | The performance in the above graph does not reflect the deduction of taxes the shareholder will pay on Fund distributions or the redemptions of Fund shares. Investment performance reflects fee waivers in effect. In the absence of such waivers, total return would be reduced. |
Past performance is no indication of future performance.
The Fund’s comparative benchmarks do not include the annual operating expenses incurred by the Fund. Please note that one cannot invest directly in an unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS | ||||||
Shares | Ticker Symbol | 1-Year Return | 3-Year Return | 5-Year Return | 10-Year Return | Inception to Date |
Institutional Class (1)^ | CNTIX | 4.34% | 4.68% | 4.04% | 4.11% | 4.35% |
Class N (2)† | CCTEX | 4.06% | 4.40% | 3.77% | 3.87% | 4.11% |
| (1) | Commenced operations on January 14, 2000. |
| (2) | Commenced operations on April 13, 2000. |
| ^ | The Fund’s Institutional Class Shares are currently offered only to accounts for which City National Bank serves as trustee or in a fiduciary capacity. |
| † | Class N Shares’ performance for the period of January 14, 2000 to April 13, 2000 was calculated using the performance of the Institutional Class Shares adjusted to reflect the expenses of the Class N Shares. If performance of the Institutional Class Shares had not been adjusted, the performance of the Class N Shares for that period would have been higher because the expenses of the Class N Shares are higher than those of the Institutional Class Shares. |
| TOP TEN HOLDINGS* | |
| % OF PORTFOLIO | |
| Orange County, Public Financing Authority, | |
| RB, NATL-RE | |
| 5.000%, 07/01/17 | 2.7 |
| Los Angeles, Department of Water & Power, | |
| Sub-Ser A-2, RB, AGM | |
| Callable 07/01/15 @ 100 | |
| 5.000%, 07/01/25 | 2.5 |
| Golden State, Tobacco Settlement, | |
| Ser A-1, RB | |
| Pre-Funded @ 100 | |
| 6.750%, 06/01/13 | 2.5 |
| Los Angeles County, Public Works Financing Authority, | |
| SAB, AGM | |
| 5.250%, 10/01/18 | 2.1 |
| California State, Economic Recovery Authority, | |
| Ser A, GO, NATL-RE | |
| Callable 07/01/14 @ 100 | |
| 5.000%, 07/01/15 | 2.1 |
| Sacramento, Municipal Utility District, | |
| Ser T, RB, NATL-RE FGIC | |
| Callable 05/15/14 @ 100 | |
| 5.250%, 05/15/22 | 2.0 |
| Gilroy, Unified School District, | |
| GO, NATL-RE FGIC | |
| Callable 08/01/13 @ 100 | |
| 5.250%, 08/01/19 | 2.0 |
| California State, Department of Water Resources, | |
| Power Supply Project, Ser H, RB, AGM | |
| Callable 05/01/18 @ 100 | |
| 5.000%, 05/01/21 | 2.0 |
| Los Angeles, Wastewater Systems Authority, | |
| Ser A, RB | |
| 5.000%, 06/01/14 | 2.0 |
| San Jose, Redevelopment Authority, | |
| Ser A, TA, NATL-RE | |
| Callable 08/01/15 @ 100 | |
| 5.000%, 08/01/17 | 2.0 |
| * | Excludes Cash Equivalents |
CNI CHARTER FUNDS | PAGE 10
| fund overview |
September 30, 2010 |
| High Yield Bond Fund |
The Fund seeks to maximize total return by investing primarily in fixed income securities rated below investment grade including corporate bonds and debentures, convertible and preferred securities, zero coupon obligations and debt securities that are issued by U.S. and foreign governments and their agencies.
Comparison of Change in the Value of a $10,000 Investment in the High Yield Bond Fund, Institutional Class or Class N Shares, versus the Citigroup High Yield Market Capped Index, and the Lipper High Current Yield Bond Funds Objective(1)
| (1) | The performance in the above graph does not reflect the deduction of taxes the shareholder will pay on Fund distributions or the redemptions of Fund shares. Investment performance reflects fee waivers in effect. In the absence of such waivers, total return would be reduced. |
Past performance is no indication of future performance.
The Fund’s comparative benchmarks do not include the annual operating expenses incurred by the Fund. Please note that one cannot invest directly in an unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS | ||||||
Shares | Ticker Symbol | 1-Year Return | 3-Year Return | 5-Year Return | 10-Year Return | Inception to Date |
Institutional Class (1)^ | CHYIX | 20.17% | 6.96% | 7.01% | 7.32% | 7.23% |
Class N (1) | CHBAX | 19.81% | 6.65% | 6.69% | 7.00% | 6.90% |
| (1) | Commenced operations on January 14, 2000. |
| ^ | The Fund’s Institutional Class Shares are currently offered only to accounts for which City National Bank serves as trustee or in a fiduciary capacity. |
| TOP TEN HOLDINGS | |
| % OF PORTFOLIO | |
| Ironshore Holdings US | |
| 8.500%, 05/15/20 | 1.4 |
| Spectrum Brands Holdings | |
| 9.500%, 06/15/18 | 1.3 |
| Telcordia Technologies | |
| 11.000%, 05/01/18 | 1.3 |
| River Rock Entertainment Authority | |
| 9.750%, 11/01/11 | 1.3 |
| GXS Worldwide | |
| 9.750%, 06/15/15 | 1.2 |
| Nuveen Investments | |
| 10.500%, 11/15/15 | 1.2 |
| CPG International I | |
| 10.500%, 07/01/13 | 1.2 |
| Intcomex | |
| 13.250%, 12/15/14 | 1.1 |
| Aspect Software | |
| 10.625%, 05/15/17 | 1.1 |
| BioScrip | |
| 10.250%, 10/01/15 | 1.1 |
CNI CHARTER FUNDS | PAGE 11
| investment adviser’s report |
September 30, 2010 |
| Equity and Blended Funds |
In the fiscal year ending September 30, 2010, the U.S. equity market as measured by the S&P 500 Index was fairly volatile. The first six months of the fiscal year saw an 11.8% return as the economy continued to improve from the worst recession since World War II. Then for the next three months, the market was down 11.4%. The gains from the first six months were wiped out by this decline and the sustainability of the stock market’s rise upward was called into question.
The decline was brought on by the sovereign debt issues faced by several Southern European countries (Portugul, Spain, Greece, Italy) and Ireland who had borrowed much more than their economies could handle during a recessionary event. As these countries encountered the most recent worldwide recession, the bond markets questioned their ability to repay their obligations. This caused all riskier assets to start to decline in value as investors sought safety. The desire for “safe” investments also drove investors to reduce their exposure in equities worldwide, including the United States.
To stem the decline in the worldwide markets, many Northern European countries (primarily Germany) and the rest of the world put forth a program to help the leveraged countries roll over their debt for the next three years while working through their problems. While we are not convinced that this solves the problem, it does remove it from the current investment equation and the markets were able to focus on the rest of the world economies that are doing better (including the United States). Therefore, the last quarter of the fiscal year was quite positive with a return of 11.3% as measured by the S&P 500 Index.
Looking forward, the Federal Reserve has started its latest phase of monetary policy (dubbed quantitative easing 2 or QE2) that is designed to help increase inflation to an acceptable level and also increase the monetary turnover in the economy which will hopefully continue to push growth upward. Although the long term effects of this policy are murky, we believe that this policy will be positive over the near term for growth assets and we continue to invest accordingly.
All returns listed below relate to the 12-month period ending September 30, 2010 and are net of expenses. CNI Charter Funds’ returns refer to Institutional Class Shares. Other classes would have different returns.
LARGE CAP VALUE EQUITY FUND
The Large Cap Value Equity Fund (the “Fund”) gained 6.85%, which lagged the S&P500/Citigroup Value Index return of 8.54% and the Lipper Large Cap Value Funds Classification return of 7.57%. The Fund did well by owning stocks that were out of favor and trading at attractive valuations. This was particularly true for the Industrial and Consumer sectors, where our stocks did better than those in the index. However, there were stocks in the Staples, Utilities and Financial sectors that did better than those we owned. Several of these were marginal players that after stumbling very near the precipice unexpectedly sprang back to their feet. The Fund did not own many of these lower quality players, and as such the benefit to our more conservative holdings was muted.
The Fund had some notable successes and a few disappointments during the year. Verizon Wireless, the largest U.S. mobile phone company, is expected to start selling Apple’s iPhone in January 2011 and this news propelled the stock to a 22.9% gain. The rails also did well during the year with both CSX Corp. and Union Pacific showing better than expected earnings strength and a vote of confidence from Warren Buffett (who acquired Burlington Northern), returning 34.7% and 42.7% respectively. These gains were partially offset by losses in the Financial sector. Earnings disappointments from Bank of America (down 22.4%) early in the year had a greater impact than the earnings recovery later in the year. Goldman Sachs (down 20.8%) succumbed to pressure on news of SEC action for their actions in the Collateralized Debt Obligation (“CDO ”) market.
These are interesting and volatile times that require a disciplined investment process. We continue to believe that buying good companies at reasonable prices will enable the Fund to extend its long-term track record of outperformance.
LARGE CAP GROWTH EQUITY FUND
The Large Cap Growth Equity Fund (the “Fund) gained 8.89% compared to 11.67% for the S&P 500 Growth Index and 10.14% for the Lipper Large-Cap Growth Fund Classification.
CNI CHARTER FUNDS | PAGE 12
A majority of the underperformance in the Fund was due to our conservative stance over the last 12 months as many of the best performing stocks over this period were the lower quality, riskier types of companies. These companies were closer to bankruptcy in the bad times but as the economy started to recover, investors were looking to take on more risk and these companies benefitted the most. We believe the higher quality companies with good earnings growth that we continue to invest in will perform better going forward as the world’s growth appears to be slowing to a more modest pace.
We had some winners and losers that are worth mentioning. On the positive side, the Fund had significant exposure to Apple (returning 53.1% for the year), Oracle (30.0%), Caterpillar (57.6%) and Cognizant Technology (66.8%). All four of these companies were technology or industrial related companies, which were two of the best performing sectors of the last 12 months.
Conversely, some of the Fund’s larger underperforming stock positions were Goldman Sachs (-20.8%), Gilead Sciences (-23.4%), Microsoft (-2.9%) and Hewlett Packard (-10.3%). Each of these companies was down for company specific reasons and we continue to have an optimistic outlook for Gilead and Microsoft. We have sold Goldman Sachs and have reduced our exposure to HP. Looking forward, we are very optimistic in our outlook, especially in select technology names including Apple, which is now the largest holding in the Fund. We have spent a great deal of time focusing on getting “more growth for less” by buying stock in companies with great earnings growth for lower prices, which should provide for positive incremental performance in the future.
RCB SMALL CAP VALUE FUND
The RCB Small Cap Value Fund (the “Fund”) returned 12.51% compared to the Russell 2000 Value Index return of 11.84% and the core Russell 2000 Index of 13.35%. While the Fund’s sub-advisor, Reed Conner & Birdwell LLC, follows a value style of investing, they are careful not to overweight the Fund’s holdings in the Financial sector (which comprises approximately 40% of the Russell 2000 Value Index). Therefore, the Fund is weighted along the core guidelines of the Russell 2000 Index for better diversification. This proved to be prudent as the holdings in the Financial sector were the weakest in the Fund, as they were in the market generally. The largest contributor to the Fund’s performance came from the Consumer Discretionary sector, especially in the latter half of the fiscal year when holdings in media an d retail components of this sector led the group. In line with the Fund’s sector weightings, Lipper Analytics compares this Fund to its Small Cap Core Funds Classification, which returned 13.2% for the fiscal year.
MULTI-ASSET FUND
The Multi-Asset Fund (the “Fund”) returned 7.15% compared to the Lipper Flexible Portfolio Funds Objective return of 9.55%. The Fund returns were positively affected by an increasing exposure to international fixed income, particularly emerging markets. The Fund’s fixed income allocation increased substantially, as positions in high yield and international bonds were initiated. Over the course of the year, the Fund transitioned its equity exposure from a value to a growth tilt. The allocations to small and mid cap equities were also increased at the expense of large cap equities. Domestic real estate investment trusts (REITs) were added to the Fund but subsequently sold for a significant gain. As a result of investments made during the year, the Fund ended the fiscal year with a reduced cash position.
The following pages provide an overview of each of the Equity and Blended Funds managed by City National Asset Management, Inc. Please visit cnicharterfunds.com for the most current returns.
Sincerely,
 Oliver Campbell |  Otis “Tres” Heald |
Directors of Equity Investments
City National Asset Management, Inc.
This material represents the managers’ assessment of the portfolios and market environment at a specific point in time and should not be relied upon by the reader as research or investment advice.
CNI CHARTER FUNDS | PAGE 13
| fund overview |
September 30, 2010 |
| Large Cap Value Equity Fund |
The Fund seeks to provide capital appreciation and moderate income consistent with current returns available in the marketplace by investing in large U.S. corporations and U.S. dollar denominated American Depositary Receipts of large foreign corporations which are undervalued.
Comparison of Change in the Value of a $10,000 Investment in the Large Cap Value Equity Fund, Institutional Class or Class N Shares, versus the S&P 500/Citigroup Value Index, and the Lipper Large Cap Value Funds Classification(1)
| (1) | The performance in the above graph does not reflect the deduction of taxes the shareholder will pay on Fund distributions or the redemptions of Fund shares. Investment performance reflects fee waivers in effect. In the absence of such waivers, total return would be reduced. |
Past performance is no indication of future performance.
The Fund’s comparative benchmarks do not include the annual operating expenses incurred by the Fund. Please note that one cannot invest directly in an unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS | ||||||
Shares | Ticker Symbol | 1-Year Return | 3-Year Return | 5-Year Return | 10-Year Return | Inception to Date |
Institutional Class (1)^ | CNLIX | 6.85% | -8.98% | -0.04% | 1.38% | 1.38% |
Class N (2)† | CVEAX | 6.59% | -9.19% | -0.29% | 1.13% | 1.14% |
| (1) | Commenced operations on January 14, 2000. |
| (2) | Commenced operations on April 13, 2000. |
| ^ | The Fund’s Institutional Class Shares are currently offered only to accounts for which City National Bank serves as trustee or in a fiduciary capacity. |
| † | Class N Shares’ performance for the period of January 14, 2000 to April 13, 2000 was calculated using the performance of the Institutional Class Shares adjusted to reflect the expenses of the Class N Shares. If performance of the Institutional Class Shares had not been adjusted, the performance of the Class N Shares for that period would have been higher because the expenses of the Class N Shares are higher than those of the Institutional Class Shares. |
| TOP TEN HOLDINGS* | |
| % OF PORTFOLIO | |
| JPMorgan Chase | 3.0 |
| Chevron | 3.0 |
| Exxon Mobil | 2.7 |
| Wells Fargo | 2.3 |
| Wal-Mart Stores | 2.2 |
| Verizon Communications | 2.1 |
| AT&T | 2.1 |
| Bank of America | 2.0 |
| Procter & Gamble | 2.0 |
| ConocoPhillips | 1.7 |
| * | Excludes Cash Equivalents |
CNI CHARTER FUNDS | PAGE 14
| fund overview |
September 30, 2010 |
| Large Cap Growth Equity Fund |
The Fund seeks to provide capital appreciation by investing in large U.S. corporations and U.S. dollar denominated American Depositary Receipts of large foreign corporations with the potential for growth.
Comparison of Change in the Value of a $10,000 Investment in the Large Cap Growth Equity Fund, Institutional Class or Class N Shares, versus the S&P 500/Citigroup Growth Index, and the Lipper Large Cap Growth Funds Classification(1)
| (1) | The performance in the above graph does not reflect the deduction of taxes the shareholder will pay on Fund distributions or the redemptions of Fund shares. Investment performance reflects fee waivers in effect. In the absence of such waivers, total return would be reduced. |
Past performance is no indication of future performance.
The Fund’s comparative benchmarks do not include the annual operating expenses incurred by the Fund. Please note that one cannot invest directly in an unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS | ||||||
Shares | Ticker Symbol | 1-Year Return | 3-Year Return | 5-Year Return | 10-Year Return | Inception to Date |
Institutional Class (1)^ | CNGIX | 8.89% | -4.18% | 1.12% | -1.67% | -2.15% |
Class N (2)† | CLEAX | 8.72% | -4.43% | 0.89% | -1.91% | -2.40% |
| (1) | Commenced operations on January 14, 2000. |
| (2) | Commenced operations on March 28, 2000. |
| ^ | The Fund’s Institutional Class Shares are currently offered only to accounts for which City National Bank serves as trustee or in a fiduciary capacity. |
| † | Class N Shares’ performance for the period of January 14, 2000 to March 28, 2000 was calculated using the performance of the Institutional Class Shares adjusted to reflect the expenses of the Class N Shares. If performance of the Institutional Class Shares had not been adjusted, the performance of the Class N Shares for that period would have been higher because the expenses of the Class N Shares are higher than those of the Institutional Class Shares. |
| TOP TEN HOLDINGS | |
| % OF PORTFOLIO | |
| Apple | 4.7 |
| Microsoft | 3.6 |
| IBM | 3.4 |
| Exxon Mobil | 3.0 |
| Oracle | 2.8 |
| Qualcomm | 2.0 |
| CVS | 2.0 |
| AT&T | 1.9 |
| Illinois Tool Works | 1.8 |
| Schlumberger | 1.7 |
CNI CHARTER FUNDS | PAGE 15
| fund overview |
September 30, 2010 |
| RCB Small Cap Value Fund |
The Fund seeks to provide capital appreciation by investing primarily in smaller U.S. corporations which are considered undervalued.
Comparison of Change in the Value of a $10,000 Investment in the RCB Small Cap Value Fund, Institutional Class, Class N Shares, or Class R Shares, versus the Russell 2500 Value Index, the Russell 2000 Index, the Russell 2000 Value Index, the Lipper Small Cap Value Funds Classification, and the Lipper Small Cap Core Funds Classification(1)
| (1) | The performance in the above graph does not reflect the deduction of taxes the shareholder will pay on Fund distributions or the redemptions of Fund shares. Investment performance reflects fee waivers in effect. In the absence of such waivers, total return would be reduced. |
Past performance is no indication of future performance.
The Fund’s comparative benchmarks do not include the annual operating expenses incurred by the Fund. Please note that one cannot invest directly in an unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS | ||||||
Shares | Ticker Symbol | 1-Year Return | 3-Year Return | 5-Year Return | 10-Year Return | Inception to Date |
Institutional Class (1)^† | RCBIX | 12.51% | -5.56% | -1.32% | 6.14% | 9.76% |
Class N (1)† | RCBAX | 12.20% | -5.80% | -1.56% | 5.91% | 9.56% |
Class R (2) | RCBSX | 12.33% | -5.53% | -1.39% | 5.99% | 9.63% |
Class R with load | RCBSX | 8.39% | -6.64% | -2.09% | 5.61% | 9.31% |
| (1) | Commenced operations on October 3, 2001. |
| (2) | The Fund’s predecessor commenced operations on September 30, 1998, and reorganized into Class R shares of the Fund on October 1, 2001. |
| ^ | The Fund’s Institutional Class Shares are currently offered only to accounts for which City National Bank serves as trustee or in a fiduciary capacity. |
| † | The performance of the Institutional Class and Class N Shares for October 1, 2001, and October 2, 2001, reflects the performance of the Fund’s Class R shares. The performance of all share classes for the period prior to October 1, 2001, reflects the performance of the Class R Shares of a predecessor mutual fund, which commenced operations on September 30, 1998, and reorganized into the Fund’s Class R Shares on October 1, 2001. The performance of the predecessor fund’s Class R Shares has not been adjusted to reflect the expenses applicable to Institutional and Class N Shares. If performance of the predecessor fund’s Class R Shares had been adjusted, the performance of the Institutional Class and Class N Shares would have been higher because the expenses of the predecessor fund’s Class R Shares are higher than those of the Fund's Institutional Class and Class N Shares. |
| TOP TEN HOLDINGS* | |
| % OF PORTFOLIO | |
| White Mountains Insurance Group | 6.3 |
| Chimera Investment | 5.3 |
| Central Garden & Pet, Cl A | 5.1 |
| Wendy's/Arby's Group, Cl A | 4.7 |
| Global Cash Access Holdings | 4.4 |
| Teleflex | 4.1 |
| PerkinElmer | 4.1 |
| Ralcorp Holdings | 4.1 |
| Alleghany | 4.1 |
| Symetra Financial | 3.8 |
| * | Excludes Cash Equivalents |
CNI CHARTER FUNDS | PAGE 16
| fund overview |
September 30, 2010 |
| Multi-Asset Fund |
The Fund seeks to generate a positive total return in excess of inflation in a manner consistent with capital preservation in all market environments by investing all or a substantial portion of its assets in other mutual funds or other types of funds like exchange-traded funds.
Comparison of Change in the Value of a $10,000 Investment in the Multi-Asset Fund, Institutional Class or Class N Shares, versus the Barclays U.S. TIPS Index; a 60/40 hybrid of the following two indexes: the S&P 500 Index and the Barclays Intermediate U.S. Government/Credit Index; the CPI + 500 Basis Points; and the Lipper Flexible Portfolio Funds Classification(1)
| (1) | The performance in the above graph does not reflect the deduction of taxes the shareholder will pay on Fund distributions or the redemptions of Fund shares. Investment performance reflects fee waivers in effect. In the absence of such waivers, total return would be reduced. |
Past performance is no indication of future performance.
The Fund’s comparative benchmarks do not include the annual operating expenses incurred by the Fund. Please note that one cannot invest directly in an unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS | ||||||
Shares | Ticker Symbol | 1-Year Return | Inception to Date | |||
Institutional Class (1)^ | CNLIX | 7.15% | 0.01% | |||
Class N (1) | CVEAX | 6.89% | -0.25% | |||
| (1) | Commenced operations on October 1, 2007. |
| ^ | The Fund’s Institutional Class Shares are currently offered only to accounts for which City National Bank serves as trustee or in a fiduciary capacity. |
| TOP TEN HOLDINGS* | |
| % OF PORTFOLIO | |
| SPDR S&P 500 Fund | 19.6 |
| iShares S&P MidCap 400 Index Fund | 9.2 |
| Oppenheimer International Bond Fund, Class A | 6.8 |
| CNI Corporate Bond Fund, Institutional Class | 6.6 |
| SPDR Barclays Capital High Yield Bond Fund | 6.4 |
| Vanguard Small Cap Value | 6.2 |
| Vanguard Emerging Markets | 6.2 |
| Cohen & Steers International Realty Fund, Inc. | 4.0 |
| PIMCO Emerging Markets Bond Fund, Institutional Class | 3.8 |
| CNI High Yield Bond Fund, Institutional Class | 3.8 |
| * | Excludes Cash Equivalents |
CNI CHARTER FUNDS | PAGE 17
| investment adviser’s report |
September 30, 2010 |
| CCMA Advised Funds |
This section of the Annual Report will summarize results for the CNI Charter Funds that are advised by CCM Advisors, LLC (“CCMA”). It will cover results for the twelve months ending September 30, 2010.
During the fiscal year CCMA adopted the CNI Charter Funds name as the sole name for its advised funds and discontinued its use of AHA in the funds’ names. CCMA continues to have a close working relationship with the American Hospital Association which helped start these funds. However, since the Funds are available to the general public as part of a larger fund family, we have decided to adopt the CNI Charter name to avoid confusion.
All returns listed below relate to the 12-month period ending September 30, 2010 and are net of expenses. CNI Charter Funds’ returns refer to Institutional Class Shares. Other classes would have different returns.
LIMITED MATURITY FIXED INCOME FUND
The Limited Maturity Fixed Income Fund (the “Fund”) follows the multiple portfolio style of combining complementary core + alpha portfolios to blend returns over interest rate and sector cycles. In January of this year the two sub-portfolios were combined under one sub-adviser, City National Asset Management, Inc. (“CNAM”), to take advantage of their expertise to more quickly move along the short term maturity spectrum as economic and interest rate conditions warranted. The sub-advisor actively shifts the duration based on Federal Reserve Bank’s Federal Open Market Committee (“FOMC”) interest rate setting and quantitative monetary easing/tightening policies. The sub-adviser then weights among sectors to allocate among corporate, mortgage and asset-backed securities.
The objectives of this Fund combine preservation of capital, liquidity and maximization of returns only after consideration of low risk qualifications.
The combined portfolios which create this investment grade fund are benchmarked to the BofA/Merrill Lynch (“ML”) 1-3 Year Treasury Index and the ML 3 Month U.S. Treasury Index. During the fiscal year ended September 30, 2010, the FOMC actions kept short term yields near zero, causing the 30-day SEC yield on the ML 3 Month U.S. Treasury Index (“T-Bill”) to move only slightly from the very low 0.12% in September 2009 to 0.16% in September 2010 (see Yield Curve chart below at the 3M (month) maturity plot point). The Fund’s 30-day SEC yield has been substantially higher, at 1.65%, in September 2009 and 1.00%, in September 2010. For income oriented investors, the Fund is currently yielding more than T-Bills and many other short term instruments.
For the fiscal year, the total return of the Fund was 3.28%. The ML 1-3 year Treasury Index had a one year return of 2.53% and the T-Bills’ one year return was 0.13%. Corporate fixed income securities rallied in the first half of this fiscal year as a response to the economic stimulus programs and the ending of the recession. Since the Fund is a diversified blend of corporate, Treasury, agency and mortgage securities, it was able to participate in the rally in corporate and other credit rated fixed income securities with a corporate securities weighting that ranged from 41.2% to 36.2% from beginning to end of the fiscal year. As the Fund is designed to protect shareholder principal the sub-adviser follows conservative investment grade quality guidelines. The Lipper Short-Intermediate Investment Grade Debt Funds Objective universe wa s skewed in favor of corporate bond sector returns during the year, and had an average return of 7.64%. However, since the Lipper universe includes funds that are wholly invested or have a heavy weighting in corporate bonds, many of the funds in the universe are invested outside of the Limited Fund’s diversified, conservative approach.
CNI CHARTER FUNDS | PAGE 18
Yield Curve
Source: Bloomberg, Pertrac
FULL MATURITY FIXED INCOME FUND
The Full Maturity Fixed Income Fund (the “Fund”) combines portfolios of two sub-advisers designed to complement each other in the core + alpha strategy and to provide a “full” maturity spectrum. They are:
| • | Boyd Watterson Asset Management, the alpha sub-adviser, which manages to the Barclays Capital U.S. Intermediate Government/Credit Index and will aggressively move duration above or below its index by 20%; |
| • | Baird Advisors, the core sub-adviser, which manages to the Barclays Capital U.S. Aggregate Index, is always duration neutral to its index and seeks to add value by sector selection. |
The Fund began the fiscal year with a longer average maturity of 5.3 years than its primary benchmark, the Barclays Capital Intermediate U.S. Government/Credit Index, 4.5 years, a measure which aided performance in the falling interest rate environment and remains in place at the end of the fiscal year. As the Yield Curve chart (above) shows, rates have continued to shift downwards for intermediate to longer maturities over the course of the year, and remained very low at the shorter maturity end of the time horizon. Bond prices and interest rates have an inverse relationship, so that when interest rates fall, prices rise.
The Fund sub-advisers began the fiscal year with a 39.8% tilt towards corporate bonds and ended the year with a 45.4% position which aided the Fund’s performance. Treasury prices rose in the second half of the fiscal year as a response to the flight from the debt problems of the Economic Monetary Union of the European Union, which originated with Greece, Portugal and several other member states. Purchases of Treasuries and mortgages by the Federal Reserve Bank provided economic support to those sectors, boosting prices of the former and stabilizing the mortgage-backed securities market. The corporate and commercial mortgage-backed security weightings added substantially to the Fund’s returns. The Fund invests in investment grade bonds only and, in an effort to control risk, has sold out of a small weighting of bonds that had b een downgraded during the mortgage crisis. The pie chart below shows the weighting of the two sub-advisers as of September 30, 2010:
Full Maturity Fixed Income Fund
Weightings By Sub-adviser
September 2010
The Fund’s total return was 8.48% for the fiscal year. This was ahead of the Barclays Capital Intermediate US Government/Credit Index return of 7.77% for the same period. The Lipper Corporate A-Rated Debt Funds Objective universe, which includes bond funds that are 100% invested in corporate bonds, returned 9.93%. However, by means of comparison, the Fund follows a diversified investment strategy among sectors and is not allowed to heavily allocate to corporate bonds (or any other sector); the Fund’s current 45.4% weighting in corporate bonds is the highest it has ever been.
CNI CHARTER FUNDS | PAGE 19
| investment adviser’s report |
September 30, 2010 |
DIVERSIFIED EQUITY FUND
The Diversified Equity Fund (the “Fund”) produced a total return of 6.69%. Lipper Analytics compares this Fund to its Large-Cap Core Funds Classification, which had a total return of 7.93% for the same period. The S&P 500 was up 10.16% for the same period. At the beginning of the fiscal year, this Fund combined four portfolio sub-advisers. In September 2010 we eliminated an equity portfolio manager and divided the Fund among the three remaining sub-advisers. The current sub-advisers and their target weights at the end of the fiscal year are:
| • | Large cap core value, AMBS Investment Counsel, (37.5% weighting); |
| • | Alpha large-mid value, SKBA Capital Management (25.0%); and |
| • | Alpha growth, Turner Investment Partners (37.5%). |
These weightings reflect a gradual increase in growth oriented stocks over the course of the year.
Diversified Equity Fund
Target Weightings By Sub-adviser
September 2010
The best performing sector for the Fund and in the stock market generally this fiscal year was Telecomm Services, which was overweighted in the Fund throughout the year. Materials were up in the market and overweighted in the Fund also, reflecting rising commodity prices as the global recession ended in June 2009. However, below market weights in Consumer Discretionary stocks hurt relative performance. The largest weighting in the Fund throughout the year was Information Technology, which aided performance. Unfortunately, the second largest weighting, Financials, after a strong start a year ago, was the weakest performing sector this year and contributed to the lag in performance versus the index. CCMA realigned the target weightings of the sub-advisers at the beginning of September 2010 as we seek to provide a mix of equity styles best s uited to blend returns with risk control in a volatile market.
SOCIALLY RESPONSIBLE EQUITY FUND
The Socially Responsible Equity Fund (the “Fund”) completed its fifth full fiscal year of performance. The Fund follows pro-green, environmental sustainability, good corporate governance and product and worker safety guidelines for securities researched and selected. It is further designed to meet the social guidelines of faith-based organizations. As a value style fund, investing in large-to mid-capitalization equities, it generally invests in securities which are part of the Russell 1000 Value Index, but there are approximately 200 stocks in the index which are not eligible for inclusion in the Fund due to the socially responsible guidelines. The Fund returned 8.51% for the fiscal year. The Lipper Multi-Cap Value Funds Classification peer group is a value style fit in terms of fundamental economic analysis and large/mid capi talization, but the underlying funds have no social restrictions: it returned 9.34% for the fiscal year. The growth-oriented MSCI KLD 400 Social Index is a stock index constructed using environmental, social and governance factors, and was up 9.33% as growth stocks were up in 2010. Overweights to Healthcare and Financial sector stocks lagged the market. A higher than index allocation to Materials and a near market weight in Industrials aided overall returns.
The Fund’s sub-adviser, SKBA Capital Management, uses its Socially Responsible Value investment style, and incorporates the social guidelines of the U.S. Conference of Catholic Bishops. Proactively, SKBA researches companies that have good environmental sustainability, human rights and governance track records.
CNI CHARTER FUNDS | PAGE 20
Please visit our websites, cnicharterfunds.com and cnicharter-ccma.com, for updates and further background information. We want to thank our shareholders for their confidence in the Funds and express our best wishes for the New Fiscal Year.
Sincerely,
Timothy G. Solberg, CFA
Chief Investment Officer
CCM Advisors, LLC
This material represents the managers’ assessment of the portfolios and market environment at a specific point in time and should not be relied upon by the reader as research or investment advice.
CNI CHARTER FUNDS | PAGE 21
| fund overview |
September 30, 2010 |
| Limited Maturity Fixed Income Fund |
The Fund seeks to provide a high level of current income, consistent with the preservation of capital and liquidity by investing primarily in fixed income securities either issued or guaranteed by the U.S. Government or its agencies or instrumentalities, money market instruments and non-convertible fixed income securities of U.S. companies.
Comparison of Change in the Value of a $10,000 Investment in the Limited Maturity Fixed Income Fund, Institutional Class Shares and Class N Shares, versus the BofA Merrill Lynch 3-Month U.S. Treasury Index and the BofA Merrill Lynch 1-3 Year U.S. Treasury Index(1)
| (1) | The performance in the above graph does not reflect the deduction of taxes the shareholder will pay on Fund distributions or the redemptions of Fund shares. Investment performance reflects fee waivers in effect. In the absence of such waivers, total return would be reduced. |
Past performance is no indication of future performance.
The Fund’s comparative benchmarks do not include the annual operating expenses incurred by the Fund. Please note that one cannot invest directly in an unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS | ||||||
Shares | Ticker Symbol | 1-Year Return | 3-Year Return | 5-Year Return | 10-Year Return | Inception to Date |
Institutional Class (1) | AHLFX | 3.28% | 4.72% | 4.46% | 4.14% | 5.18% |
Class N (2) | AHALX | 3.04% | 4.43% | 4.19% | 3.99% | 5.11% |
| (1) | Class I Shares of the predecessor to the Limited Maturity Fixed Income Fund (the “Predecessor Fund”) commenced operations on October 22, 1988. On September 30, 2005, the Predecessor Fund reorganized into the Fund. The performance results for Institutional Class Shares of the Fund for the period of October 22, 1988 to September 29, 2005, reflects the performance of the Predecessor Fund’s Class I Shares. |
| (2) | Class I Shares of the predecessor to the Limited Maturity Fixed Income Fund (the “Predecessor Fund”) commenced operations on October 22, 1988. Class A Shares of the Predecessor Fund, the predecessor to the Class N Shares of the Fund, commenced operations on October 22, 2004. On September 30, 2005, the Predecessor Fund reorganized into the Fund. The performance results for Class N Shares of the Fund for the period of October 22, 2004, to September 29, 2005, reflects the performance of the Predecessor Fund’s Class A Shares. The performance results for Class N Shares of the Fund for the period of October 22, 1988 to October 21, 2004, reflects the performance of the Predecessor Fund’s Class I Shares. The performance of the Predecessor Fund’s Class I Shares has not been adjusted to reflect the higher Rule 12b-1 fees and expenses applicable to the Fund’s Class N Shares. If i t had, the performance of the Fund’s Class N Shares would have been lower than that shown. |
| TOP TEN HOLDINGS | |
| % OF PORTFOLIO | |
U.S. Treasury Note 4.250%, 08/15/15 | 8.5 |
FHLMC 4.375%, 07/17/15 | 3.7 |
FHLB 5.750%, 05/15/12 | 2.7 |
FNMA 5.250%, 08/01/12 | 2.7 |
FHLMC 4.750%, 03/05/12 | 2.6 |
FNMA 5.375%, 11/15/11 | 2.6 |
U.S. Treasury Note 2.375%, 09/30/14 | 2.6 |
FHLB 5.375%, 08/19/11 | 2.6 |
FNMA 6.000%, 05/15/11 | 2.6 |
Citigroup Funding 2.250%, 12/10/12 | 2.6 |
CNI CHARTER FUNDS | PAGE 22
| fund overview |
September 30, 2010 |
| Full Maturity Fixed Income Fund |
The Fund seeks to provide a high level of current income, consistent with the preservation of capital by investing primarily in fixed income securities either issued or guaranteed by the U.S. Government or its agencies or instrumentalities, money market instruments, non-convertible fixed income securities of U.S. companies and U.S. dollar-denominated debt obligations issued by foreign governments and corporations.
Comparison of Change in the Value of a $10,000 Investment in the Full Maturity Fixed Income Fund, Institutional Class Shares and Class N Shares, versus the Barclays U.S. Aggregate Bond Index and the Barclays Intermediate U.S. Government/Credit Index(1)
| (1) | The performance in the above graph does not reflect the deduction of taxes the shareholder will pay on Fund distributions or the redemptions of Fund shares. Investment performance reflects fee waivers in effect. In the absence of such waivers, total return would be reduced. |
Past performance is no indication of future performance.
The Fund’s comparative benchmarks do not include the annual operating expenses incurred by the Fund. Please note that one cannot invest directly in an unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS | ||||||
Shares | Ticker Symbol | 1-Year Return | 3-Year Return | 5-Year Return | 10-Year Return | Inception to Date |
Institutional Class (1) | AHFMX | 8.48% | 6.67% | 5.49% | 5.75% | 6.58% |
Class N (2) | AHAFX | 8.12% | 6.38% | 5.20% | 5.58% | 6.50% |
| (1) | Class I Shares of the predecessor to the Full Maturity Fixed Income Fund (the “Predecessor Fund”) commenced operations on October 20, 1988. On September 30, 2005, the Predecessor Fund reorganized into the Fund. The performance results for Institutional Class Shares of the Fund for the period of October 20, 1988 to September 29, 2005, reflects the performance of the Predecessor Fund’s Class I Shares. |
| (2) | Class I Shares of the predecessor to the Full Maturity Fixed Income Fund (the “Predecessor Fund”) commenced operations on October 20, 1988. Class A Shares of the Predecessor Fund, the predecessor to the Class N Shares of the Fund, commenced operations on May 11, 2004. On September 30, 2005, the Predecessor Fund reorganized into the Fund. The performance results for Class N Shares of the Fund for the period of May 11, 2004, to September 29, 2005, reflects the performance of the Predecessor Fund’s Class A Shares. The performance results for Class N Shares of the Fund for the period of October 20, 1988 to May 11, 2004, reflects the performance of the Predecessor Fund’s Class I Shares. The performance of the Predecessor Fund’s Class I Shares has not been adjusted to reflect the higher Rule 12b-1 fees and expenses applicable to the Fund’s Class N Shares. If it had, the performance of the Fund’s Class N Shares would have been lower than that shown. |
| TOP TEN HOLDINGS* | |
| % OF PORTFOLIO | |
U.S. Treasury Note 2.375%, 03/31/16 | 4.7 |
U.S. Treasury Bond 6.250%, 08/15/23 | 4.4 |
U.S. Treasury Note 1.750%, 07/31/15 | 2.2 |
FNMA 4.625%, 10/15/13 | 2.2 |
U.S. Treasury Bond 5.250%, 11/15/28 | 2.2 |
U.S. Treasury Note 2.375%, 07/31/17 | 1.9 |
FHLB 4.500%, 11/15/12 | 1.8 |
U.S. Treasury Note 4.750%, 05/15/14 | 1.8 |
FNMA, Pool 745418 5.500%, 04/01/36 | 1.7 |
FNMA, Pool 745275 5.000%, 02/01/36 | 1.4 |
| * | Excludes Cash Equivalents |
CNI CHARTER FUNDS | PAGE 23
| fund overview |
September 30, 2010 |
| Diversified Equity Fund |
The Fund seeks to provide long-term capital growth by investing primarily in common stocks of large-capitalization U.S. companies that are diversified among various industries and market sectors.
Comparison of Change in the Value of a $10,000 Investment in the Diversified Equity Fund, Institutional Class Shares and Class N Shares, versus the S&P 500 Index(1)
| (1) | The performance in the above graph does not reflect the deduction of taxes the shareholder will pay on Fund distributions or the redemptions of Fund shares. Investment performance reflects fee waivers in effect. In the absence of such waivers, total return would be reduced. |
Past performance is no indication of future performance.
The Fund’s comparative benchmarks do not include the annual operating expenses incurred by the Fund. Please note that one cannot invest directly in an unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS | ||||||
Shares | Ticker Symbol | 1-Year Return | 3-Year Return | 5-Year Return | 10-Year Return | Inception to Date |
Institutional Class (1) | AHDEX | 6.69% | -8.50% | -1.14% | 0.77% | 8.87% |
Class N (2) | AHADX | 6.50% | -8.71% | -1.38% | 0.58% | 8.77% |
| (1) | Class I Shares of the predecessor to the Diversified Equity Fund (the “Predecessor Fund”) commenced operations on October 20, 1988. On September 30, 2005, the Predecessor Fund reorganized into the Fund. The performance results for Institutional Class Shares of the Fund for the period of October 20, 1988 to September 29, 2005, reflects the performance of the Predecessor Fund’s Class I Shares. |
| (2) | Class I Shares of the predecessor to the Diversified Equity Fund (the “Predecessor Fund”) commenced operations on October 20, 1988. Class A Shares of the Predecessor Fund, the predecessor to the Class N Shares of the Fund, commenced operations on December 30, 2002. On September 30, 2005, the Predecessor Fund reorganized into the Fund. The performance results for Class N Shares of the Fund for the period of December 30, 2002, to September 29, 2005, reflects the performance of the Predecessor Fund’s Class A Shares. The performance results for Class N Shares of the Fund for the period of October 20, 1988 to December 30, 2002, reflects the performance of the Predecessor Fund’s Class I Shares. The performance of the Predecessor Fund’s Class I Shares has not been adjusted to reflect the higher Rule 12b-1 fees and expenses applicable to the Fund’s Class N Shares. If it had, the performa nce of the Fund’s Class N Shares would have been lower than that shown. |
| TOP TEN HOLDINGS* | |
| % OF PORTFOLIO | |
| Apple | 2.3 |
| PepsiCo | 2.2 |
| Oracle | 1.6 |
| Abbott Laboratories | 1.5 |
| US Bancorp | 1.5 |
| Royal Dutch Shell, Cl B ADR | 1.4 |
| EMC | 1.4 |
| Cisco Systems | 1.4 |
| IBM | 1.4 |
| Wal-Mart Stores | 1.3 |
| * | Excludes Cash Equivalents |
CNI CHARTER FUNDS | PAGE 24
| fund overview |
September 30, 2010 |
| Socially Responsible Equity Fund |
The Fund seeks to provide long-term capital growth by investing primarily in common stocks of U.S. issuers that meet certain socially responsible criteria.
Comparison of Change in the Value of a $10,000 Investment in the Socially Responsible Equity Fund, Institutional Class Shares and Class N Shares, versus the MSCI KLD 400 Social Index(1)
| (1) | The performance in the above graph does not reflect the deduction of taxes the shareholder will pay on Fund distributions or the redemptions of Fund shares. Investment performance reflects fee waivers in effect. In the absence of such waivers, total return would be reduced. |
Past performance is no indication of future performance.
The Fund’s comparative benchmarks do not include the annual operating expenses incurred by the Fund. Please note that one cannot invest directly in an unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS | ||||||
Shares | Ticker Symbol | 1-Year Return | 3-Year Return | 5-Year Return | Inception to Date | |
Institutional Class (1) | AHRAX | 8.51% | -7.21% | -0.41% | 0.26% | |
Class N (2) | AHSRX | 8.15% | -7.48% | -0.67% | 0.02% | |
| (1) | Class I Shares of the predecessor to the Socially Responsible Equity Fund (the “Predecessor Fund”) commenced operations on January 3, 2005. On September 30, 2005, the Predecessor Fund reorganized into the Fund. The performance results for Institutional Class Shares of the Fund for the period of January 3, 2005 to September 29, 2005, reflects the performance of the Predecessor Fund’s Class I Shares. |
| (2) | Class I Shares of the predecessor to the Socially Responsible Equity Fund (the “Predecessor Fund”) commenced operations on January 3, 2005. Class A Shares of the Predecessor Fund, the predecessor to the Class N Shares of the Fund, commenced operations on August 12, 2005. On September 30, 2005, the Predecessor Fund reorganized into the Fund. The performance results for Class N Shares of the Fund for the period of August 12, 2005, to September 29, 2005, reflects the performance of the Predecessor Fund’s Class A Shares. The performance results for Class N Shares of the Fund for the period of January 3, 2005 to August 12, 2005, reflects the performance of the Predecessor Fund’s Class I Shares. The performance of the Predecessor Fund’s Class I Shares has not been adjusted to reflect the higher Rule 12b-1 fees and expenses applicable to the Fund’s Class N Shares. If it had, the perform ance of the Fund’s Class N Shares would have been lower than that shown. |
| TOP TEN HOLDINGS* | |
| % OF PORTFOLIO | |
| Brookfield Asset Management, Cl A | 3.7 |
| Berkshire Hathaway, Cl B | 3.3 |
| Emerson Electric | 3.1 |
| Patterson-UTI Energy | 3.1 |
| Abbott Laboratories | 3.0 |
| Waste Management | 3.0 |
| Chubb | 3.0 |
| ConocoPhillips | 3.0 |
| Spectra Energy | 2.9 |
| Encana | 2.8 |
| * | Excludes Cash Equivalents |
CNI CHARTER FUNDS | PAGE 25
| schedule of investments |
September 30, 2010 |
| Prime Money Market Fund |
| Description | Face Amount (000) | Value (000) | ||||||
| Commercial Paper [38.8%] | ||||||||
| Airport Develop/Maint [1.6%] | ||||||||
| Los Angeles Department of Airports | ||||||||
0.270%, 11/18/10 | $ | 20,000 | $ | 19,993 | ||||
| Banks [15.7%] | ||||||||
| Banco Bilbao Vizcaya Argentaria (A) | ||||||||
| 0.290%, 10/22/10 | 25,000 | 24,996 | ||||||
| Barclays US Funding | ||||||||
| 0.150%, 10/01/10 | 25,000 | 25,000 | ||||||
| KBC Financial Products International (A) | ||||||||
| 0.500%, 10/18/10 | 25,000 | 24,994 | ||||||
| Korea Development Bank | ||||||||
| 0.650%, 11/08/10 | 25,000 | 24,983 | ||||||
| 0.450%, 12/23/10 | 25,000 | 24,974 | ||||||
| Standard Chartered Bank (A) | ||||||||
| 0.390%, 11/08/10 | 25,000 | 24,990 | ||||||
| 0.250%, 10/04/10 | 25,000 | 24,999 | ||||||
| UniCredit Bank Ireland (A) | ||||||||
| 0.610%, 12/20/10 | 25,000 | 24,966 | ||||||
Total Banks | 199,902 | |||||||
| Financial Services [13.7%] | ||||||||
| Danske (A) | ||||||||
| 0.360%, 11/15/10 | 25,000 | 24,989 | ||||||
| 0.260%, 10/01/10 | 25,000 | 25,000 | ||||||
| Gotham Funding (A) | ||||||||
| 0.250%, 10/01/10 | 25,000 | 25,000 | ||||||
| Grampian Funding (A) | ||||||||
| 0.290%, 10/01/10 | 25,000 | 25,000 | ||||||
| HSBC Finance | ||||||||
| 0.440%, 12/07/10 | 25,000 | 24,980 | ||||||
| Natixis US Finance | ||||||||
| 0.320%, 12/01/10 | 25,000 | 24,986 | ||||||
| Societe Generale North America | ||||||||
| 0.240%, 10/05/10 | 25,000 | 24,999 | ||||||
Total Financial Services | 174,954 | |||||||
| Description | Face Amount (000) | Value (000) |
| Foreign Governments [3.9%] | ||||||||
| Republic of Ireland International Bond | ||||||||
| 0.890%, 11/24/10 | $ | 25,000 | $ | 24,966 | ||||
| 0.560%, 10/22/10 | 25,000 | 24,992 | ||||||
Total Foreign Governments | 49,958 | |||||||
| Special Purpose Banks [3.9%] | ||||||||
| Dexia Delaware | ||||||||
| 0.550%, 12/01/10 | 25,000 | 24,977 | ||||||
| 0.470%, 10/22/10 | 25,000 | 24,993 | ||||||
Total Special Purpose Banks | 49,970 | |||||||
Total Commercial Paper (Cost $494,777) | 494,777 | |||||||
| U.S. Government Agency Obligations [3.9%] | ||||||||
| FHLB | ||||||||
| 0.420%, 10/15/10 | 25,000 | 25,000 | ||||||
| 0.480%, 10/25/10 | 25,000 | 25,002 | ||||||
Total U.S. Government Agency Obligations (Cost $50,002) | 50,002 | |||||||
| Corporate Bonds [2.7%] | ||||||||
| Banks [1.6%] | ||||||||
| Westpac Banking, MTN | ||||||||
0.665%, 04/19/11(A) (B) | 20,500 | 20,508 | ||||||
| Financial Services [1.1%] | ||||||||
| General Electric Capital | ||||||||
0.578%, 04/28/11(B) | 13,845 | 13,839 | ||||||
Total Corporate Bonds (Cost $34,347) | 34,347 | |||||||
| Certificates of Deposit [35.3%] | ||||||||
| Banco Bilbao Vizcaya Argentaria NY | ||||||||
| 0.770%, 01/03/11 | 25,000 | 25,001 | ||||||
| Banco Del Estado De Chile | ||||||||
| 0.240%, 10/01/10 | 25,000 | 25,000 | ||||||
| 0.550%, 01/31/11 | 25,000 | 25,000 | ||||||
| Banco Santander | ||||||||
| 0.920%, 10/12/10 | 25,000 | 25,000 | ||||||
| Barclays Bank | ||||||||
| 0.690%, 05/10/11 | 25,000 | 25,000 | ||||||
| Bayerische Landesbank | ||||||||
| 0.470%, 12/09/10 | 25,000 | 25,001 | ||||||
| 0.600%, 02/07/11 | 25,000 | 25,000 | ||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 26
| schedule of investments |
September 30, 2010 |
Prime Money Market Fund (concluded) |
| Description | Face Amount (000)/Shares | Value (000) | ||||||
| BNP Paribas NY | ||||||||
| 0.240%, 10/07/10 | $ | 25,000 | $ | 25,000 | ||||
| Commerzbank NY | ||||||||
| 0.505%, 10/13/10 | 25,000 | 25,000 | ||||||
| Erste Group Bank | ||||||||
| 0.300%, 10/01/10 | 25,000 | 25,000 | ||||||
| 0.300%, 10/13/10 | 25,000 | 25,000 | ||||||
| KBC Bank NY | ||||||||
| 0.750%, 10/14/10 | 25,000 | 25,000 | ||||||
| Landesbank Hessen-Thueringen GZ | ||||||||
| 0.900%, 10/19/10 | 25,000 | 25,000 | ||||||
| 0.750%, 02/01/11 | 25,000 | 25,000 | ||||||
| Natixis NY | ||||||||
| 0.460%, 11/04/10 | 25,000 | 25,000 | ||||||
| Norinchukin Bank | ||||||||
| 0.480%, 11/08/10 | 25,000 | 25,001 | ||||||
| Skandinaviska Enskilda Banken NY | ||||||||
| 0.560%, 10/14/10 | 25,000 | 25,000 | ||||||
| UniCredit NY | ||||||||
| 0.715%, 11/03/10 | 25,000 | 25,000 | ||||||
Total Certificates of Deposit (Cost $450,003) | 450,003 | |||||||
| Cash Equivalent [0.3%] | ||||||||
| Goldman Sachs Financial Square Funds - Government Fund, 0.090%* | 4,235,021 | 4,235 | ||||||
Total Cash Equivalent (Cost $4,235) | 4,235 | |||||||
| Repurchase Agreements(C) [19.0%] | ||||||||
| Nomura | ||||||||
| 0.250%, dated 09/30/10, repurchased on 10/01/10, repurchase price $125,000,868 (collateralized by various U.S. Government obligations, ranging in par value $492,678-$49,507,669, 0.000%-4.250%, 04/01/11-02/26/29; with total market value $127,502,877) | 125,000 | 125,000 | ||||||
| Deutsche Bank | ||||||||
| 0.240%, dated 09/30/10, repurchased on 10/01/10, repurchase price $50,000,333 (collateralized by a FNMA obligation, par value $51,000,695, 5.125%, 04/15/11; with total market value $50,000,695) | 50,000 | 50,000 | ||||||
| Description | Face Amount (000) | Value (000) | ||||||
| Bank of America | ||||||||
| 0.220%, dated 09/30/10, repurchased on 10/01/10, repurchase price $50,000,306 (collateralized by a FHLB and FNMA obligation, ranging in par value $7,663,000-$41,915,000, 0.000%-3.625%, 12/29/10-07/01/11; with total market value $51,002,996) | $ | 50,000 | $ | 50,000 | ||||
| Barclays | ||||||||
| 0.200%, dated 09/30/10, repurchased on 10/01/10, repurchase price $16,400,091 (collateralized by a U.S. Treasury Note, par value $15,074,000, 3.500%, 02/15/18; with total market value $16,728,057) | 16,400 | 16,400 | ||||||
Total Repurchase Agreements (Cost $241,400) | 241,400 | |||||||
Total Investments [100.0%] (Cost $1,274,764) | $ | 1,274,764 | ||||||
| Percentages are based on Net Assets of $1,274,880 ($ Thousands). |
| * | The rate reported is the 7-day current yield as of September 30, 2010. |
| (A) | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration normally to qualified institutions. On September 30, 2010, the value of these securities amounted to $245,442 (000), representing 19.3% of the net assets of the Fund. |
| (B) | Floating Rate Security — The rate reported is the rate in effect on September 30, 2010. |
| (C) | Tri-Party Repurchase Agreement. |
| FHLB — Federal Home Loan Bank |
| FNMA — Federal National Mortgage Association |
| MTN — Medium Term Note |
The following is a summary of the inputs used as of September 30, 2010 in valuing the Fund’s investments carried at value ($ Thousands):
| Investments in Securities | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Commercial Paper | $ | — | $ | 494,777 | $ | — | $ | 494,777 | ||||||||
| U.S. Government Agency Obligations | — | 50,002 | — | 50,002 | ||||||||||||
| Corporate Bonds | — | 34,347 | — | 34,347 | ||||||||||||
| Certificates of Deposit | — | 450,003 | — | 450,003 | ||||||||||||
| Cash Equivalent | 4,235 | — | — | 4,235 | ||||||||||||
| Repurchase Agreements | — | 241,400 | — | 241,400 | ||||||||||||
| Total Investments in Securities | $ | 4,235 | $ | 1,270,529 | $ | — | $ | 1,274,764 | ||||||||
For the year ended September 30, 2010, there have been no significant transfers between Level 1 and Level 2 assets and liabilities.
For more information on valuation inputs, see Note 2 — Significant Accounting Policies in the Notes to Financial Statements.
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 27
| schedule of investments |
September 30, 2010 |
| Government Money Market Fund |
| Description | Face Amount (000) | Value (000) | ||||||
| U.S. Government Agency Obligations [57.7%] | ||||||||
| FAMC DN | ||||||||
| 0.140%, 10/05/10(A) | $ | 50,000 | $ | 49,999 | ||||
| FAMC | ||||||||
| 5.500%, 07/15/11(B) | 15,000 | 15,580 | ||||||
| FFCB (C) | ||||||||
| 0.608%, 12/09/10 | 50,000 | 50,028 | ||||||
| 0.218%, 03/21/11 | 50,000 | 50,000 | ||||||
| 0.182%, 12/14/11 | 50,000 | 50,000 | ||||||
| FHLB | ||||||||
| 0.420%, 10/15/10 | 25,000 | 25,000 | ||||||
| 0.480%, 10/25/10 | 25,000 | 25,002 | ||||||
| 0.500%, 10/29/10 | 50,000 | 50,009 | ||||||
| 0.280%, 11/08/10 | 25,000 | 24,999 | ||||||
| 4.750%, 12/10/10 | 50,000 | 50,428 | ||||||
| 3.000%, 12/10/10 | 25,000 | 25,131 | ||||||
| 0.750%, 01/18/11 | 25,000 | 25,035 | ||||||
| 0.420%, 02/17/11 | 25,000 | 25,000 | ||||||
| 4.625%, 02/18/11 | 25,000 | 25,412 | ||||||
| 0.430%, 02/22/11 | 25,000 | 25,001 | ||||||
| 0.280%, 05/27/11(C) | 25,000 | 25,000 | ||||||
| 0.500%, 07/15/11 | 25,000 | 25,000 | ||||||
| 0.500%, 07/29/11 | 25,000 | 25,000 | ||||||
| 0.450%, 09/22/11 | 50,000 | 50,000 | ||||||
| 0.226%, 09/26/11(C) | 50,000 | 50,010 | ||||||
| FHLB DN (A) | ||||||||
| 0.130%, 10/01/10 | 150,000 | 150,000 | ||||||
| 0.120%, 10/04/10 | 150,000 | 149,998 | ||||||
| 0.100%, 10/05/10 | 32,875 | 32,875 | ||||||
| 0.130%, 10/06/10 | 50,000 | 49,999 | ||||||
| 0.110%, 10/12/10 | 25,000 | 24,999 | ||||||
| 0.260%, 01/05/11 | 50,000 | 49,965 | ||||||
| 0.220%, 03/30/11 | 25,000 | 24,972 | ||||||
| FHLMC | ||||||||
| 4.125%, 02/24/11 | 24,299 | 24,659 | ||||||
| FHLMC DN (A) | ||||||||
| 0.150%, 10/06/10 | 20,500 | 20,500 | ||||||
| 0.220%, 11/09/10 | 50,000 | 49,988 | ||||||
| 0.240%, 01/14/11 | 52,585 | 52,548 | ||||||
| FNMA | ||||||||
| 4.500%, 02/15/11 | 25,000 | 25,386 | ||||||
| 1.750%, 03/23/11 | 25,000 | 25,176 | ||||||
| 5.125%, 04/15/11 | 25,000 | 25,659 | ||||||
| Description | Face Amount (000) | Value (000) |
| FNMA DN (A) | ||||||||
| 0.140%, 10/01/10 | $ | 100,000 | $ | 100,000 | ||||
| 0.140%, 10/04/10 | 100,000 | 99,999 | ||||||
| 0.280%, 10/20/10 | 50,000 | 49,993 | ||||||
| 0.240%, 01/12/11 | 25,278 | 25,261 | ||||||
| 0.290%, 03/28/11 | 50,000 | 49,928 | ||||||
| 4.800%, 04/26/11 | 25,000 | 24,967 | ||||||
Total U.S. Government Agency Obligations (Cost $1,748,506) | 1,748,506 | |||||||
| Repurchase Agreements (D) [42.2%] | ||||||||
| Bank of America | ||||||||
| 0.220%, dated 09/30/10, repurchased on 10/01/10, repurchase price $250,001,528 (collateralized by various U.S. Government obligations, ranging in par value $1,245,500-$39,972,000, 0.000%-5.870%, 03/01/11-01/22/37; with total market value $255,000,582) | 250,000 | 250,000 | ||||||
| Barclays | ||||||||
| 0.200%, dated 09/30/10, repurchased on 10/01/10, repurchase price $252,101,401 (collateralized by a U.S. Treasury Note, par value $256,610,668, 1.000%, 07/15/13; with total market value $257,142,077) | 252,100 | 252,100 | ||||||
| Deutsche Bank | ||||||||
| 0.240%, dated 09/30/10, repurchased on 10/01/10, repurchase price $200,001,333 (collateralized by FHLMC and FNMA obligations, ranging in par value $35,150,000-$41,725,000, 1.875%-5.920%, 03/11/11-01/15/37; with total market value $201,770,519) | 200,000 | 200,000 | ||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 28
| schedule of investments |
September 30, 2010 |
Government Money Market Fund (concluded) |
| Description | Face Amount (000) | Value (000) |
| JPMorgan Chase | ||||||||
| 0.220%, dated 09/30/10, repurchased on 10/01/10, repurchase price $200,001,222 (collateralized by a U.S. Treasury Bill, par value $204,510,000, 0.000%, 09/22/11; with total market value $204,002,809) | $ | 200,000 | $ | 200,000 | ||||
| Nomura | ||||||||
| 0.250%, dated 09/30/10, repurchased on 10/01/10, repurchase price $375,002,604 (collateralized by U.S. Government obligations, ranging in par value $30,000-$112,111,000, 0.000%-6.250%, 02/28/11-06/21/32; with total market value $382,500,073) | 375,000 | 375,000 | ||||||
Total Repurchase Agreements (Cost $1,277,100) | 1,277,100 | |||||||
Total Investments [99.9%] (Cost $3,025,606) | $ | 3,025,606 | ||||||
| Percentages are based on Net Assets of $3,027,783 ($ Thousands). |
| (A) | Zero coupon security. The rate reported is the effective yield at time of purchase. |
| (B) | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration normally to qualified institutions. On September 30, 2010, the value of these securities amounted to $15,580 (000), representing 0.5% of the net assets of the Fund. |
| (C) | Floating Rate Security — The rate reported is the rate in effect on September 30, 2010. |
| (D) | Tri-Party Repurchase Agreement. |
| DN — Discount Note |
| FAMC — Federal Agricultural Mortgage Corporation |
| FFCB — Federal Farm Credit Bank |
| FHLB — Federal Home Loan Bank |
| FHLMC — Federal Home Loan Mortgage Corporation |
| FNMA — Federal National Mortgage Association |
As of September 30, 2010, all of the Fund’s investments are Level 2, in accordance with ASC 820.
For the year ended September 30, 2010, there have been no significant transfers between Level 1 and Level 2 assets and liabilities.
For more information on valuation inputs, see Note 2 — Significant Accounting Policies in the Notes to Financial Statements.
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 29
| schedule of investments |
September 30, 2010 |
| California Tax Exempt Money Market Fund |
| Description | Face Amount (000) | Value (000) | ||||||
| Municipal Bonds [100.1%] | ||||||||
| California [94.8%] | ||||||||
| Bay Area Toll Authority, Ser C-1, RB (A) (B) | ||||||||
| 0.230%, 10/07/10 | $ | 13,000 | $ | 13,000 | ||||
| Bay Area Toll Authority, Ser C-3, RB (A) (B) | ||||||||
| 0.220%, 10/07/10 | 1,000 | 1,000 | ||||||
| Bay Area Toll Authority, Ser C-4, RB (A) (B) | ||||||||
| 0.220%, 10/07/10 | 5,500 | 5,500 | ||||||
| Bay Area Toll Authority, Ser E-1, RB (A) (B) | ||||||||
| 0.230%, 10/07/10 | 3,560 | 3,560 | ||||||
| California State, Department of Water Resource & Power, Ser C-7, RB, AGM (A) (B) | ||||||||
| 0.270%, 10/07/10 | 9,125 | 9,125 | ||||||
| California State, Department of Water Resource & Power, Ser C-9, RB (A) (B) (C) | ||||||||
| 0.230%, 10/07/10 | 7,000 | 7,000 | ||||||
| California State, Department of Water Resource & Power, Sub-Ser G-3, RB, AGM (A) (B) | ||||||||
| 0.260%, 10/07/10 | 7,820 | 7,820 | ||||||
| California State, Educational Facilities Authority, Stanford University Project, Ser L-4, RB (A) (B) | ||||||||
| 0.200%, 10/06/10 | 515 | 515 | ||||||
| California State, Health Facilities Financing Authority, Luvile Salter Project, Ser B, RB (A) (B) | ||||||||
| 0.220%, 10/07/10 | 11,700 | 11,700 | ||||||
| Description | Face Amount (000) | Value (000) |
| California State, Health Facilities Financing Authority, Ser B, RB (A) (B) (C) | ||||||||
| 0.250%, 10/06/10 | $ | 10,000 | $ | 10,000 | ||||
| California State, Health Facilities Financing Authority, Ser C, RB (A) (B) (C) | ||||||||
| 0.250%, 10/06/10 | 10,000 | 10,000 | ||||||
| California State, Health Facilities Financing Authority, Ser C, RB (A) (B) (C) | ||||||||
| 0.220%, 10/07/10 | 18,400 | 18,400 | ||||||
| California State, Infrastructure & Economic Development Authority, California Academy Project, Ser A, RB (A) (B) (C) | ||||||||
| 0.250%, 10/01/10 | 12,000 | 12,000 | ||||||
| California State, Infrastructure & Economic Development Authority, RB (A) (B) | ||||||||
| 0.230%, 10/01/10 | 12,400 | 12,400 | ||||||
| California State, Infrastructure & Economic Development Authority, J Paul Getty Trust Project, Ser B, RB (A) (B) | ||||||||
| 0.220%, 10/01/10 | 9,215 | 9,215 | ||||||
| California State, Ser B, Sub-Ser B-3, GO (A) (B) (C) | ||||||||
| 0.240%, 10/06/10 | 3,145 | 3,145 | ||||||
| California State, Ser B, Sub-Ser B-4, GO (A) (B) (C) | ||||||||
| 0.240%, 10/06/10 | 6,880 | 6,880 | ||||||
| California State, Ser B, Sub-Ser B-6, GO (A) (B) (C) | ||||||||
| 0.310%, 10/01/10 | 6,900 | 6,900 | ||||||
| California Statewide, Communities Development Authority, Masters College Project, RB (A) (B) (C) | ||||||||
| 0.260%, 10/07/10 | 3,000 | 3,000 | ||||||
| California Statewide, Communities Development Authority, Ser A, RB (A) (B) (C) | ||||||||
| 0.240%, 10/06/10 | 20,000 | 20,000 | ||||||
| Contra Costa, Transportation Authority, RB | ||||||||
| 2.500%, 10/01/10 | 4,500 | 4,500 | ||||||
| East Bay, Municipal Utilities District Wastewater Authority, Sub-Ser A, RB (A) (B) | ||||||||
| 0.220%, 10/07/10 | 25,000 | 25,000 | ||||||
| East Bay, Municipal Utilities District Water Authority, Sub-Ser A-1, RB (A) (B) | ||||||||
| 0.280%, 10/06/10 | 10,000 | 10,000 |
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 30
| schedule of investments |
September 30, 2010 |
California Tax Exempt Money Market Fund (continued) |
| Description | Face Amount (000) | Value (000) |
| East Bay, Municipal Utilities District Water Authority, Sub-Ser A-2, RB (A) (B) | ||||||||
| 0.300%, 10/06/10 | $ | 4,890 | $ | 4,890 | ||||
| East Bay, Municipal Utilities District Water Authority, Sub-Ser A-3, RB (A) (B) | ||||||||
| 0.300%, 10/06/10 | 11,595 | 11,595 | ||||||
| East Bay, Municipal Utilities District Water Authority, Sub-Ser B, RB, AGM (A) (B) | ||||||||
| 0.270%, 10/06/10 | 10,000 | 10,000 | ||||||
| Eastern Municipal Water District, Ser B, COP (A) (B) | ||||||||
| 0.230%, 10/06/10 | 10,600 | 10,600 | ||||||
| Elsinore Valley, Municipal Water District, Ser B, COP (A) (B) (C) | ||||||||
| 0.260%, 10/07/10 | 15,000 | 15,000 | ||||||
| Glendale, Police Building Project, COP (A) (B) | ||||||||
| 0.250%, 10/07/10 | 17,800 | 17,800 | ||||||
| Irvine Ranch, Water District #140-240-105-250, GO (A) (B) (C) | ||||||||
| 0.220%, 10/01/10 | 3,500 | 3,500 | ||||||
| Irvine, Improvement Board, Act 1915 Project, District #03-19, Ser A, SAB (A) (B) (C) | ||||||||
| 0.290%, 10/01/10 | 6,536 | 6,536 | ||||||
| Irvine, Improvement Board, Act 1915 Project, District #04-20, Ser A, RB (A) (B) (C) | ||||||||
| 0.290%, 10/01/10 | 8,560 | 8,560 | ||||||
| Irvine, Improvement Board, Act 1915 Project, District #05-21, Ser A, COP (A) (B) (C) | ||||||||
| 0.280%, 10/01/10 | 14,430 | 14,430 | ||||||
| Irvine, Improvement Board, Act 1915 Project, District #07-22, Ser A, RB (A) (B) (C) | ||||||||
| 0.290%, 10/01/10 | 3,950 | 3,950 | ||||||
| Irvine, Improvement Board, Act 1915 Project, District #97-16, COP (A) (B) (C) | ||||||||
| 0.290%, 10/01/10 | 3,500 | 3,500 | ||||||
| Irvine, Improvement Board, Act 1915 Project, District #97-17, SAB (A) (B) (C) | ||||||||
| 0.290%, 10/01/10 | 7,150 | 7,150 | ||||||
| Long Beach, TRAN | ||||||||
| 2.000%, 09/30/11 | 2,000 | 2,032 | ||||||
| Los Angeles County, TRAN | ||||||||
| 2.000%, 06/30/11 | 8,000 | 8,068 |
| Description | Face Amount (000) | Value (000) |
| Los Angeles County, Metropolitan Transportation Authority, Ser A1, RB (A) (B) | ||||||||
| 0.240%, 10/07/10 | $ | 12,665 | $ | 12,665 | ||||
| Los Angeles County, Metropolitan Transportation Authority, Ser A3, RB (A) (B) | ||||||||
| 0.320%, 10/07/10 | 4,975 | 4,975 | ||||||
| Los Angeles County, Metropolitan Transportation Authority, Ser C4, RB, FGIC (A) (B) (C) | ||||||||
| 0.230%, 10/07/10 | 2,000 | 2,000 | ||||||
| Los Angeles, Department of Water & Power, Sub-Ser B-1, RB (A) (B) | ||||||||
| 0.220%, 10/07/10 | 5,350 | 5,350 | ||||||
| Los Angeles, Department of Water & Power, Sub-Ser B-2, RB (A) (B) | ||||||||
| 0.230%, 10/01/10 | 20,500 | 20,500 | ||||||
| Los Angeles, Department of Water & Power, Sub-Ser B-2, RB (A) (B) | ||||||||
| 0.210%, 10/07/10 | 12,600 | 12,600 | ||||||
| Los Angeles, Department of Water & Power, Sub-Ser B-3, RB (A) (B) | ||||||||
| 0.200%, 10/07/10 | 7,600 | 7,600 | ||||||
| Los Angeles, Department of Water & Power, Sub-Ser B-4, RB (A) (B) | ||||||||
| 0.260%, 10/07/10 | 4,400 | 4,400 | ||||||
| Los Angeles, Department of Water & Power, Sub-Ser B-5, RB (A) (B) | ||||||||
| 0.230%, 10/07/10 | 10,000 | 10,000 | ||||||
| Los Angeles, Unified School District, Administration Building III Project, Ser B, COP (A) (B) (C) | ||||||||
| 0.250%, 10/06/10 | 10,385 | 10,385 | ||||||
| Los Angeles, Wastewater Systems Authority, Sub-Ser C, RB (A) (B) (C) | ||||||||
| 0.240%, 10/07/10 | 2,500 | 2,500 | ||||||
| Oakland, TRAN | ||||||||
| 2.000%, 03/30/11 | 7,225 | 7,278 | ||||||
| Oakland-Alameda County, Coliseum Authority, Ser C-2, RB (A) (B) (C) | ||||||||
| 0.230%, 10/06/10 | 3,700 | 3,700 | ||||||
| Oakland-Alameda County, Coliseum Project, Ser C-1, RB (A) (B) (C) | ||||||||
| 0.290%, 10/06/10 | 15,000 | 15,000 |
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 31
| schedule of investments |
September 30, 2010 |
California Tax Exempt Money Market Fund (continued) |
| Description | Face Amount (000) | Value (000) |
| Orange County, Ser A, RB | ||||||||
| 2.000%, 03/15/11 | $ | 2,000 | $ | 2,015 | ||||
| Orange County, Water District Authority, Ser A, COP (A) (B) | ||||||||
| 0.230%, 10/06/10 | 8,600 | 8,600 | ||||||
| Pasadena, Public Financing Authority, Rose Bowl Refinancing & Improvement Project, RB (A) (B) (C) | ||||||||
| 0.250%, 10/06/10 | 10,625 | 10,625 | ||||||
| Riverside County, Public Facilities Authority, Ser C, COP (A) (B) (C) | ||||||||
| 0.250%, 10/06/10 | 11,100 | 11,100 | ||||||
| Riverside, Water Authority, Ser A, RB (A) (B) | ||||||||
| 0.250%, 10/07/10 | 8,265 | 8,265 | ||||||
| Sacramento County, Sanitation District Financing Authority, Sub-Ser A, RB (A) (B) (C) | ||||||||
| 0.300%, 10/01/10 | 6,100 | 6,100 | ||||||
| Sacramento County, Sanitation District Financing Authority, Sub-Ser D, RB (A) (B) (C) | ||||||||
| 0.300%, 10/01/10 | 3,000 | 3,000 | ||||||
| Sacramento County, Sanitation District Financing Authority, Sub-Ser E, RB (A) (B) (C) | ||||||||
| 0.220%, 10/06/10 | 9,500 | 9,500 | ||||||
| Sacramento, TRAN | ||||||||
| 2.000%, 06/30/11 | 3,500 | 3,537 | ||||||
| San Bernardino County, Ser A, TRAN | ||||||||
| 2.000%, 06/30/11 | 5,000 | 5,060 | ||||||
| San Diego County, Regional Transportation Commission, Ser B, RB (A) (B) | ||||||||
| 0.250%, 10/07/10 | 13,080 | 13,080 | ||||||
| San Diego County, Regional Transportation Commission, Ser C, RB (A) (B) | ||||||||
| 0.250%, 10/07/10 | 4,800 | 4,800 | ||||||
| San Francisco City & County, Airports Commission, Ser 37C, RB, AGM (A) (B) | ||||||||
| 0.300%, 10/06/10 | 7,000 | 7,000 | ||||||
| San Francisco, Unified School District, TRAN | ||||||||
| 2.000%, 06/30/11 | 3,500 | 3,541 | ||||||
| San Jose, Redevelopment Agency, Merged Area Redevelopment Project, Ser A, RB (A) (B) (C) | ||||||||
| 0.240%, 10/06/10 | 6,850 | 6,850 | ||||||
| Santa Barbara County, TRAN | ||||||||
| 2.000%, 06/30/11 | 6,500 | 6,578 |
| Description | Face Amount (000) | Value (000) |
| Santa Clara County, Financing Authority, Multiple Facilities Projects, Ser M, RB (A) (B) (C) | ||||||||
| 0.250%, 10/06/10 | $ | 10,105 | $ | 10,105 | ||||
| Santa Clara County, Financing Authority, VMC Facility Replacement Project, Ser B, RB (A) (B) | ||||||||
| 0.260%, 10/06/10 | 13,475 | 13,475 | ||||||
| Santa Clara Valley, Transportation Authority, Ser C, RB (A) (B) | ||||||||
| 0.230%, 10/07/10 | 8,000 | 8,000 | ||||||
| Santa Clara Valley, Transportation Authority, Ser D, RB (A) (B) | ||||||||
| 0.250%, 10/07/10 | 17,300 | 17,300 | ||||||
| Santa Clara, Electric Authority, Sub-Ser B, RB (A) (B) (C) | ||||||||
| 0.280%, 10/06/10 | 4,975 | 4,975 | ||||||
| Santa Cruz County, TRAN | ||||||||
| 2.000%, 06/30/11 | 5,000 | 5,056 | ||||||
| Southern California, Metropolitan Water District Authority, RB (A) (B) | ||||||||
| 0.280%, 10/06/10 | 6,200 | 6,200 | ||||||
| Southern California, Metropolitan Water District Authority, Ser C-1, RB (A) (B) | ||||||||
| 0.260%, 10/01/10 | 14,600 | 14,600 | ||||||
| Southern California, Metropolitan Water District Authority, Water Works Authorization Project, Ser B, RB (A) (B) | ||||||||
| 0.240%, 10/07/10 | 11,985 | 11,985 | ||||||
| State of California, GO (D) | ||||||||
| Pre-Refunded @ 100 | ||||||||
| 5.250%, 10/01/10 | 1,100 | 1,100 | ||||||
| State of California, GO (A) (B) (C) | ||||||||
| 0.250%, 10/01/10 | 11,200 | 11,200 | ||||||
| State of California, GO (A) (B) (C) | ||||||||
| 0.240%, 10/07/10 | 9,200 | 9,200 | ||||||
| State of California, GO (A) (B) (C) | ||||||||
| 0.240%, 10/07/10 | 25,400 | 25,400 | ||||||
| State of California, GO (D) | ||||||||
| Pre-Refunded @ 100 | ||||||||
| 5.125%, 03/01/11 | 550 | 561 | ||||||
| State of California, Ser B, GO (D) | ||||||||
| Pre-Refunded @ 100 | ||||||||
| 5.000%, 03/01/11 | 1,500 | 1,529 |
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 32
| schedule of investments |
September 30, 2010 |
California Tax Exempt Money Market Fund (concluded) |
| Description | Face Amount (000) | Value (000) |
| State of California, Ser B-4, GO (A) (B) (C) | ||||||||
| 0.220%, 10/06/10 | $ | 25,000 | $ | 25,000 | ||||
| State of California, Ser C-11, GO (A) (B) (C) | ||||||||
| 0.240%, 10/06/10 | 28,560 | 28,560 | ||||||
| Turlock, Irrigation District, Capital Improvement & Refunding Project, COP (A) (B) (C) | ||||||||
| 0.250%, 10/01/10 | 10,475 | 10,475 | ||||||
| Turlock, Irrigation District, RB (A) | ||||||||
| 0.750%, 08/12/11 | 6,000 | 6,000 | ||||||
| Tustin, Improvement Board Act, Reassessment District No. 95-2-A, Ser A, SAB (A) (B) (C) | ||||||||
| 0.300%, 10/01/10 | 6,603 | 6,603 | ||||||
Total California | 784,199 | |||||||
| Connecticut [1.2%] | ||||||||
| Connecticut State, Health & Educational Facility Authority, Yale University Project, Ser U2, RB (A) (B) | ||||||||
0.200%, 10/06/10 | 10,000 | 10,000 | ||||||
| Massachusetts [0.7%] | ||||||||
| Massachusetts State, Development Finance Agency, Harvard University Project, Ser HH, RB (A) (B) | ||||||||
0.170%, 10/07/10 | 5,950 | 5,950 | ||||||
| Texas [2.8%] | ||||||||
| University of Texas, Ser B, RB (A) (B) | ||||||||
0.190%, 10/07/10 | 23,430 | 23,430 | ||||||
| Virginia [0.6%] | ||||||||
| University of Virginia, Ser A, RB (A) (B) | ||||||||
0.200%, 10/06/10 | 4,965 | 4,965 | ||||||
Total Municipal Bonds (Cost $828,544) | 828,544 | |||||||
Total Investments [100.1%] (Cost $828,544) | $ | 828,544 |
| Percentages are based on Net Assets of $827,342 ($ Thousands). |
| (A) | Put and Demand Feature — The date reported is the next reset or put date. |
| (B) | Floating Rate Security — The rate reported is the rate in effect on September 30, 2010. |
| (C) | Securities are held in conjunction with a letter of credit from a major bank or financial institution. |
| (D) | Pre-Refunded Security — The date shown is the pre-refunded date. |
AGM — Assured Guarantee Municipal
COP — Certificate of Participation
FGIC — Financial Guaranty Insurance Company
GO — General Obligation
RB — Revenue Bond
SAB — Special Assessment Board
Ser — Series
TRAN — Tax and Revenue Anticipation Note
As of September 30, 2010, all of the Fund’s investments are Level 2, in accordance with ASC 820.
For the year ended September 30, 2010, there have been no significant transfers between Level 1 and Level 2 assets and liabilities.
For more information on valuation inputs, see Note 2 — Significant Accounting Policies in the Notes to Financial Statements.
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 33
| schedule of investments |
September 30, 2010 |
| Corporate Bond Fund |
| Description | Face Amount (000) | Value (000) | ||||||
| Corporate Bonds [93.5%] | ||||||||
| Applications Software [2.0%] | ||||||||
| Microsoft | ||||||||
4.200%, 06/01/19 | $ | 2,000 | $ | 2,219 | ||||
| Banks [18.7%] | ||||||||
| ANZ National Int'l | ||||||||
| 3.250%, 04/02/12(A) | 2,000 | 2,078 | ||||||
| Bank of America, FDIC Insured, MTN | ||||||||
| 3.125%, 06/15/12 | 1,500 | 1,563 | ||||||
| Bank of Scotland | ||||||||
| 5.000%, 11/21/11(A) | 1,000 | 1,034 | ||||||
| Barclays Bank | ||||||||
| 6.050%, 12/04/17(A) | 1,000 | 1,084 | ||||||
| Barclays Bank, MTN | ||||||||
| 4.500%, 03/10/17(B) | 1,950 | 1,913 | ||||||
| Deutsche Bank | ||||||||
| 7.250%, 10/15/11 | 500 | 521 | ||||||
| JPMorgan Chase | ||||||||
| 6.000%, 10/01/17 | 1,890 | 2,145 | ||||||
| JPMorgan Chase, FDIC Insured | ||||||||
| 2.125%, 12/26/12 | 2,500 | 2,582 | ||||||
| US Bank, MTN | ||||||||
| 6.375%, 08/01/11 | 1,485 | 1,556 | ||||||
| Wachovia Bank | ||||||||
| 4.800%, 11/01/14 | 3,240 | 3,499 | ||||||
| Wells Fargo, FDIC Insured | ||||||||
| 3.000%, 12/09/11 | 2,200 | 2,266 | ||||||
Total Banks | 20,241 | |||||||
| Description | Face Amount (000) | Value (000) |
| Chemicals [1.0%] | ||||||||
| Dow Chemical | ||||||||
8.550%, 05/15/19 | $ | 810 | $ | 1,023 | ||||
| Communication & Media [4.1%] | ||||||||
| CBS | ||||||||
| 8.875%, 05/15/19 | 1,000 | 1,304 | ||||||
| Comcast Cable Communications Holdings | ||||||||
| 8.375%, 03/15/13 | 160 | 186 | ||||||
| News America Holdings | ||||||||
| 9.250%, 02/01/13 | 475 | 555 | ||||||
| Time Warner Entertainment | ||||||||
| 8.375%, 03/15/23 | 775 | 1,022 | ||||||
| Walt Disney, MTN | ||||||||
| 5.700%, 07/15/11 | 1,395 | 1,455 | ||||||
Total Communication & Media | 4,522 | |||||||
| Computer System Design & Services [7.8%] | ||||||||
| Cisco Systems | ||||||||
| 5.500%, 02/22/16 | 1,250 | 1,474 | ||||||
| Dell | ||||||||
| 5.875%, 06/15/19 | 1,865 | 2,164 | ||||||
| 5.625%, 04/15/14 | 1,000 | 1,138 | ||||||
| Hewlett-Packard | ||||||||
| 6.125%, 03/01/14 | 1,470 | 1,699 | ||||||
| International Business Machines | ||||||||
| 7.625%, 10/15/18 | 1,450 | 1,926 | ||||||
Total Computer System Design & Services | 8,401 | |||||||
| Diversified Operations [0.5%] | ||||||||
| 3M, MTN | ||||||||
4.375%, 08/15/13 | 500 | 551 | ||||||
| Electric Utilities [0.9%] | ||||||||
| Exelon | ||||||||
4.900%, 06/15/15 | 859 | 941 | ||||||
| Electrical Services [1.8%] | ||||||||
| Alabama Power | ||||||||
| 4.850%, 12/15/12 | 1,380 | 1,493 | ||||||
| American Electric Power | ||||||||
| 5.250%, 06/01/15 | 470 | 521 | ||||||
Total Electrical Services | 2,014 | |||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 34
| schedule of investments |
September 30, 2010 |
Corporate Bond Fund (continued) |
| Description | Face Amount (000) | Value (000) |
| Finance Auto Loans [2.4%] | ||||||||
| American Honda Finance, MTN | ||||||||
| 5.125%, 12/15/10(A) | $ | 1,000 | $ | 1,009 | ||||
| Toyota Motor Credit | ||||||||
| 4.350%, 12/15/10 | 1,550 | 1,562 | ||||||
Total Finance Auto Loans | 2,571 | |||||||
| Financial Services [17.0%] | ||||||||
| Ally Financial, FDIC Insured | ||||||||
| 2.200%, 12/19/12 | 4,500 | 4,652 | ||||||
| Boeing Capital | ||||||||
| 6.500%, 02/15/12 | 930 | 1,002 | ||||||
| Caisse Centrale Desjardins du Quebec | ||||||||
| 2.650%, 09/16/15(A) | 3,000 | 3,041 | ||||||
| CME Group | ||||||||
| 5.400%, 08/01/13 | 95 | 106 | ||||||
| General Electric Capital, Ser A, MTN | ||||||||
| 6.000%, 06/15/12 | 2,100 | 2,267 | ||||||
| General Electric Capital, FDIC Insured, MTN | ||||||||
| 2.625%, 12/28/12 | 2,770 | 2,888 | ||||||
| HSBC Finance | ||||||||
| 5.250%, 04/15/15 | 1,250 | 1,372 | ||||||
| Irish Life & Permanent Group Holdings | ||||||||
| 3.600%, 01/14/13(A) | 2,000 | 1,890 | ||||||
| National Rural Utilities, Ser C, MTN | ||||||||
| 7.250%, 03/01/12 | 1,000 | 1,088 | ||||||
Total Financial Services | 18,306 | |||||||
| Food, Beverage & Tobacco [3.2%] | ||||||||
| Anheuser-Busch | ||||||||
| 7.500%, 03/15/12 | 665 | 722 | ||||||
| Bottling Group | ||||||||
| 5.500%, 04/01/16 | 1,000 | 1,179 | ||||||
| 4.625%, 11/15/12 | 1,435 | 1,545 | ||||||
Total Food, Beverage & Tobacco | 3,446 | |||||||
| Foreign Governments [3.3%] | ||||||||
| Kingdom of Denmark | ||||||||
| 2.750%, 11/15/11 | 3,000 | 3,075 | ||||||
| United Mexican States, MTN | ||||||||
| 5.875%, 01/15/14 | 450 | 510 | ||||||
Total Foreign Governments | 3,585 | |||||||
| Description | Face Amount (000) | Value (000) |
| Investment Banker/Broker Dealer [13.3%] | ||||||||
| Citigroup | ||||||||
| 5.850%, 08/02/16 | $ | 980 | $ | 1,059 | ||||
| 5.500%, 02/15/17 | 250 | 258 | ||||||
| Citigroup Funding, FDIC Insured | ||||||||
| 2.250%, 12/10/12 | 2,500 | 2,586 | ||||||
| Credit Suisse | ||||||||
| 5.500%, 08/15/13 | 1,250 | 1,388 | ||||||
| Goldman Sachs Group | ||||||||
| 5.625%, 01/15/17 | 1,700 | 1,800 | ||||||
| Jefferies Group | ||||||||
| 8.500%, 07/15/19 | 870 | 1,010 | ||||||
| Macquarie Group | ||||||||
| 6.000%, 01/14/20(A) | 2,000 | 2,091 | ||||||
| Merrill Lynch | ||||||||
| 6.050%, 05/16/16 | 2,025 | 2,156 | ||||||
| Morgan Stanley, MTN | ||||||||
| 5.500%, 01/26/20 | 1,990 | 2,046 | ||||||
Total Investment Banker/Broker Dealer | 14,394 | |||||||
| Multi-line Insurance [1.7%] | ||||||||
| MetLife | ||||||||
7.717%, 02/15/19 | 1,430 | 1,820 | ||||||
| Petroleum & Fuel Products [4.3%] | ||||||||
| ConocoPhillips Canada Funding I | ||||||||
| 5.625%, 10/15/16 | 2,000 | 2,358 | ||||||
| Duke Capital | ||||||||
| 5.500%, 03/01/14 | 615 | 671 | ||||||
| Shell International Finance | ||||||||
| 3.250%, 09/22/15 | 1,500 | 1,594 | ||||||
Total Petroleum & Fuel Products | 4,623 | |||||||
| Real Estate Investment Trusts [2.1%] | ||||||||
| Kimco Realty | ||||||||
| 6.875%, 10/01/19 | 1,080 | 1,258 | ||||||
| ProLogis | ||||||||
| 7.625%, 08/15/14 | 970 | 1,048 | ||||||
Total Real Estate Investment Trusts | 2,306 | |||||||
| Retail [5.6%] | ||||||||
| CVS Caremark | ||||||||
| 6.125%, 08/15/16 | 1,000 | 1,181 | ||||||
| Home Depot | ||||||||
| 5.250%, 12/16/13 | 1,000 | 1,116 | ||||||
| Kohl's | ||||||||
| 6.300%, 03/01/11 | 1,000 | 1,021 | ||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 35
| schedule of investments |
September 30, 2010 |
Corporate Bond Fund (continued) |
| Description | Face Amount (000) | Value (000) |
| Kroger | ||||||||
| 5.500%, 02/01/13 | $ | 450 | $ | 491 | ||||
| Target | ||||||||
| 6.000%, 01/15/18 | 1,770 | 2,135 | ||||||
Total Retail | 5,944 | |||||||
| Special Purpose Banks [1.9%] | ||||||||
| Dexia Credit Local | ||||||||
2.750%, 01/10/14(A) | 2,000 | 2,045 | ||||||
| Telephones & Telecommunications [1.9%] | ||||||||
| Deutsche Telekom International Finance | ||||||||
| 5.250%, 07/22/13 | 475 | 521 | ||||||
| New Cingular Wireless Services | ||||||||
| 8.125%, 05/01/12 | 345 | 383 | ||||||
| Verizon Communications | ||||||||
| 5.550%, 02/15/16 | 945 | 1,094 | ||||||
Total Telephones & Telecommunications | 1,998 | |||||||
Total Corporate Bonds (Cost $95,122) | 100,950 | |||||||
| Municipal Bonds [3.1%] | ||||||||
| California [2.1%] | ||||||||
| California State, City of Industry, Sales Tax Project, RB, NATL-RE | ||||||||
| 5.000%, 01/01/12 | 955 | 977 | ||||||
| Irvine Ranch, Water District Authority, RB (C) | ||||||||
| Pre-Refunded @ 100 | ||||||||
| 8.180%, 03/15/14 | 1,200 | 1,286 | ||||||
Total California | 2,263 | |||||||
| Wisconsin [1.0%] | ||||||||
| De Pere, Unified School District, GO, FGIC (C) | ||||||||
| Pre-Refunded @ 100 | ||||||||
4.500%, 10/01/11 | 995 | 1,036 | ||||||
Total Municipal Bonds (Cost $3,257) | 3,299 | |||||||
| Description | Face Amount (000)/Shares | Value (000) | ||||||
| U.S. Government Mortgage-Backed Obligations [0.9%] | ||||||||
| FHLMC REMIC, Ser 2008-R015, Cl AN | ||||||||
| 3.750%, 02/15/13 | $ | 118 | $ | 119 | ||||
| FHLMC REMIC, Ser 2982, Cl NB | ||||||||
| 5.500%, 02/15/29 | 305 | 310 | ||||||
| FNMA REMIC, Ser 2002-56, Cl MC | ||||||||
| 5.500%, 09/25/17 | 462 | 502 | ||||||
| FNMA REMIC, Ser 2006-B1, Cl AB | ||||||||
| 6.000%, 06/25/16 | 66 | 68 | ||||||
Total U.S. Government Mortgage-Backed Obligations (Cost $958) | 999 | |||||||
| U.S. Treasury Obligation [0.6%] | ||||||||
| U.S. Treasury Inflation Protection Security | ||||||||
| 2.000%, 01/15/14 | 590 | 633 | ||||||
Total U.S. Treasury Obligation (Cost $598) | 633 | |||||||
| Cash Equivalent [0.8%] | ||||||||
| Goldman Sachs Financial Square Funds - Government Fund, 0.090%* | 898,932 | 899 | ||||||
Total Cash Equivalent (Cost $899) | 899 | |||||||
Total Investments [98.9%] (Cost $100,834) | $ | 106,780 | ||||||
Percentages are based on Net Assets of $107,955 ($ Thousands).
| * | The rate reported is the 7-day current yield as of September 30, 2010. |
| (A) | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration normally to qualified institutions. On September 30, 2010, the value of these securities amounted to $14,272 (000), representing 13.2% of the net assets of the Fund. |
| (B) | Floating Rate Security — The rate reflected is the rate in effect on September 30, 2010. |
| (C) | Pre-Refunded Security — The date shown is the pre-refunded date. |
| Cl — Class |
| FDIC Insured — Federal Depositary Insurance Corporation |
| FGIC — Financial Guaranty Insurance Company |
| FHLMC — Federal Home Loan Mortgage Corporation |
| FNMA — Federal National Mortgage Association |
| GO — General Obligation |
| MTN — Medium Term Note |
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 36
| schedule of investments |
September 30, 2010 |
Corporate Bond Fund (concluded) |
| NATL-RE — National Public Finance Guarantee Corporation |
| RB — Revenue Bond |
| REMIC — Real Estate Mortgage Investment Conduit |
| Ser — Series |
The following is a summary of the inputs used as of September 30, 2010 in valuing the Fund’s investments carried at value ($ Thousands):
| Investments in Securities | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Corporate Bonds | $ | — | $ | 100,950 | $ | — | $ | 100,950 | ||||||||
| Municipal Bonds | — | 3,299 | — | 3,299 | ||||||||||||
| U.S. Government Mortgage-Backed Obligations | — | 999 | — | 999 | ||||||||||||
| U.S. Treasury Obligation | — | 633 | — | 633 | ||||||||||||
| Cash Equivalent | 899 | — | — | 899 | ||||||||||||
| Total Investments in Securities | $ | 899 | $ | 105,881 | $ | — | $ | 106,780 | ||||||||
For the year ended September 30, 2010, there have been no significant transfers between Level 1 and Level 2 assets and liabilities.
For more information on valuation inputs, see Note 2 — Significant Accounting Policies in the Notes to Financial Statements.
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 37
| schedule of investments |
September 30, 2010 |
| Government Bond Fund |
| Description | Face Amount (000) | Value (000) | ||||||
| U.S. Government Agency Obligations [72.3%] | ||||||||
| FFCB | ||||||||
| 3.600%, 03/22/17 | $ | 5,000 | $ | 5,184 | ||||
| FHLB | ||||||||
| 5.250%, 06/18/14 | 4,000 | 4,609 | ||||||
| 4.805%, 08/20/15 | 10,323 | 11,351 | ||||||
| 4.125%, 03/13/20 | 5,000 | 5,523 | ||||||
| 3.500%, 12/09/16 | 5,000 | 5,423 | ||||||
| 3.250%, 09/12/14 | 7,000 | 7,551 | ||||||
| FHLMC, MTN | ||||||||
| 4.375%, 07/17/15 | 5,000 | 5,672 | ||||||
| 2.000%, 11/05/12 | 5,000 | 5,007 | ||||||
| 1.250%, 03/23/11(A) | 7,000 | 7,013 | ||||||
| FNMA | ||||||||
| 4.625%, 05/01/13 | 7,000 | 7,582 | ||||||
| 3.100%, 03/22/16 | 5,000 | 5,151 | ||||||
| 3.000%, 07/28/14 | 9,180 | 9,347 | ||||||
| 2.500%, 06/10/11(A) | 10,000 | 10,014 | ||||||
| 2.000%, 09/30/15 | 7,000 | 6,996 | ||||||
| 1.250%, 09/30/11(A) | 7,000 | 6,966 | ||||||
| Israel Government AID Bond (B) | ||||||||
| 3.815%, 05/15/20 | 15,528 | 11,379 | ||||||
Total U.S. Government Agency Obligations (Cost $111,800) | 114,768 | |||||||
| U.S. Government Mortgage-Backed Obligations [26.4%] | ||||||||
| FHLMC REMIC, Ser 2005-R003, Cl AG | ||||||||
| 5.125%, 10/15/15 | 1,181 | 1,195 | ||||||
| FHLMC REMIC, Ser 2006-R005, Cl AB | ||||||||
| 5.500%, 12/15/18 | 3,439 | 3,540 | ||||||
| FHLMC REMIC, Ser 2006-R006, Cl AK | ||||||||
| 5.750%, 12/15/18 | 484 | 510 | ||||||
| FHLMC REMIC, Ser 2006-R007, Cl AC | ||||||||
| 5.875%, 05/15/16 | 361 | 365 | ||||||
| FHLMC REMIC, Ser 2007-R010, Cl AB | ||||||||
| 5.500%, 12/15/19 | 5,225 | 5,426 | ||||||
| FHLMC REMIC, Ser 2007-R011, Cl AB | ||||||||
| 5.500%, 12/15/20 | 7,989 | 8,320 | ||||||
| Description | Face Amount (000)/Shares | Value (000) | ||||||
| FHLMC REMIC, Ser 2007-R012, Cl AB | ||||||||
| 5.500%, 12/15/20 | $ | 3,388 | $ | 3,502 | ||||
| FHLMC REMIC, Ser 2007-R013, Cl AB | ||||||||
| 6.000%, 12/15/21 | 482 | 497 | ||||||
| FHLMC REMIC, Ser 2007-R014, Cl AL | ||||||||
| 5.500%, 10/15/14 | 2,139 | 2,151 | ||||||
| FHLMC REMIC, Ser 2008-R015, Cl AN | ||||||||
| 3.750%, 02/15/13 | 2,076 | 2,091 | ||||||
| FNMA ARM (C) | ||||||||
| 4.536%, 03/01/34 | 413 | 433 | ||||||
| FNMA REMIC, Ser 2005-25, Cl VH | ||||||||
| 5.000%, 04/25/16 | 3,769 | 4,024 | ||||||
| FNMA REMIC, Ser 2006-R009, Cl AJ | ||||||||
| 5.750%, 12/15/18 | 8,768 | 9,081 | ||||||
| GNMA | ||||||||
| 8.000%, 08/15/22 | 11 | 12 | ||||||
| 7.500%, 06/15/24 | 4 | 5 | ||||||
| 7.500%, 05/15/26 | 5 | 6 | ||||||
| 7.500%, 04/15/32 | 30 | 35 | ||||||
| 7.000%, 12/15/16 | 11 | 11 | ||||||
| 6.000%, 01/15/29 | 12 | 13 | ||||||
| GNMA ARM (C) | ||||||||
| 3.000%, 08/20/35 | 105 | 108 | ||||||
| 1.875%, 04/20/35 | 475 | 485 | ||||||
Total U.S. Government Mortgage-Backed Obligations (Cost $41,885) | 41,810 | |||||||
| Cash Equivalent [0.3%] | ||||||||
| Goldman Sachs Financial Square Funds - Government Fund, 0.090%* | 421,804 | 422 | ||||||
Total Cash Equivalent (Cost $422) | 422 | |||||||
| Repurchase Agreement(D) [0.6%] | ||||||||
| Barclays | ||||||||
| 0.200%, dated 09/30/10, repurchased on 10/01/10, repurchase price $1,000,006 (collateralized by a U.S. Treasury Note, par value $934,800, 3.250%, 03/31/17; with total market value $1,020,101) | 1,000 | 1,000 | ||||||
Total Repurchase Agreement (Cost $1,000) | 1,000 | |||||||
Total Investments [99.6%] (Cost $155,107) | $ | 158,000 | ||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 38
| schedule of investments |
September 30, 2010 |
Government Bond Fund (concluded) |
| Percentages are based on Net Assets of $158,627 ($ Thousands). |
| * | The rate reported is the 7-day current yield as of September 30, 2010. |
| (A) | Step Bond — The rate reflected is the rate in effect on September 30, 2010. The coupon on a step bond changes on a specific date. |
| (B) | Zero coupon security. The rate reflected is the effective yield at time of purchase. |
| (C) | Floating Rate Security — The rate reported is the rate in effect on September 30, 2010. |
| (D) | Tri-Party Repurchase Agreement. |
AID — Agency for International Development
ARM — Adjustable Rate Mortgage
Cl — Class
FFCB — Federal Farm Credit Bank
FHLB — Federal Home Loan Bank
FHLMC — Federal Home Loan Mortgage Corporation
FNMA — Federal National Mortgage Association
GNMA — Government National Mortgage Association
MTN — Medium Term Note
REMIC — Real Estate Mortgage Investment Conduit
Ser — Series
The following is a summary of the inputs used as of September 30, 2010 in valuing the Fund’s investments carried at value ($ Thousands):
| Investments in Securities | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| U.S. Government Agency Obligations | $ | — | $ | 114,768 | $ | — | $ | 114,768 | ||||||||
| U.S. Government Mortgage-Backed Obligations | — | 41,810 | — | 41,810 | ||||||||||||
| Cash Equivalent | 422 | — | — | 422 | ||||||||||||
| Repurchase Agreement | — | 1,000 | — | 1,000 | ||||||||||||
| Total Investments in Securities | $ | 422 | $ | 157,578 | $ | — | $ | 158,000 | ||||||||
The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining value:
Investments in U.S. Government Mortgage-Backed Obligations ($ Thousands) | ||||
| Beginning balance as of October 1, 2009 | $ | 2,618 | ||
| Accrued discounts/premiums | — | |||
| Realized gain/(loss) | — | |||
| Change in unrealized appreciation/(depreciation) | — | |||
| Net purchases/sales | — | |||
| Net transfer in and/or out of Level 3 | (2,618 | ) | ||
| Ending balance as of September 30, 2010 | $ | — | ||
For the year ended September 30, 2010, there have been no significant transfers between Level 1 and Level 2 assets and liabilities.
For more information on valuation inputs, see Note 2 — Significant Accounting Policies in the Notes to Financial Statements.
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 39
| schedule of investments |
September 30, 2010 |
| California Tax Exempt Bond Fund |
| Description | Face Amount (000) | Value (000) | ||||||
| Municipal Bonds [96.0%] | ||||||||
| Arizona [1.9%] | ||||||||
| Arizona State, School Facilities Board, Ser C, COP, AGM | ||||||||
| Callable 09/01/14 @ 100 | ||||||||
5.000%, 09/01/15 | $ | 750 | $ | 832 | ||||
| California [83.9%] | ||||||||
| Atwater, Elementary School District, Ser A, GO, NATL-RE FGIC | ||||||||
| Callable 08/01/13 @ 100 | ||||||||
| 5.000%, 08/01/22 | 660 | 687 | ||||||
| Azusa, Redevelopment Agency, Mortgage-Backed Securities Program, Ser A, RB, FNMA, ETM | ||||||||
| 6.875%, 10/01/12 | 200 | 224 | ||||||
| Bay Area, Infrastructure Financing Authority, State Payment Acceleration Project, RB, NATL-RE FGIC | ||||||||
| Callable 08/01/14 @ 100 | ||||||||
| 5.000%, 08/01/17 | 350 | 375 | ||||||
| Burbank, Public Financing Authority, Golden State Redevelopment Project, Ser A, TA, AMBAC (A) | ||||||||
| Pre-Refunded @ 100 | ||||||||
| 5.250%, 12/01/13 | 75 | 86 | ||||||
| California State, Department of Water Resources, Power Supply Project, Ser H, RB, AGM | ||||||||
| Callable 05/01/18 @ 100 | ||||||||
| 5.000%, 05/01/21 | 750 | 860 | ||||||
| Description | Face Amount (000) | Value (000) |
| California State, Department of Water Resources, Water Systems Project, Ser J-2, RB | ||||||||
| 7.000%, 12/01/12 | $ | 500 | $ | 570 | ||||
| California State, Department of Water Resources, Water Systems Project, Ser Y, RB, NATL-RE FGIC | ||||||||
| Callable 06/01/13 @ 100 | ||||||||
| 5.250%, 12/01/19 | 500 | 556 | ||||||
| California State, Economic Recovery Authority, Ser A, GO, NATL-RE | ||||||||
| Callable 07/01/14 @ 100 | ||||||||
| 5.000%, 07/01/15 | 800 | 904 | ||||||
| California State, Educational Facilities Authority, Stanford University Project, Ser T-4, RB | ||||||||
| 5.000%, 03/15/14 | 350 | 399 | ||||||
| California State, GO (A) | ||||||||
| Pre-Refunded @ 100 | ||||||||
| 5.250%, 10/01/10 | 20 | 20 | ||||||
| California State, GO | ||||||||
| Callable 02/01/12 @ 100 | ||||||||
| 5.000%, 02/01/18 | 175 | 183 | ||||||
| California State, GO | ||||||||
| 5.500%, 04/01/19 | 500 | 589 | ||||||
| California State, Infrastructure & Economic Authority, Bay Area Toll Bridges Project, Ser A, RB, AGM (A) | ||||||||
| Pre-Refunded @ 100 | ||||||||
| 5.250%, 07/01/13 | 125 | 141 | ||||||
| California State, Public Works Board Lease, Department of Corrections-Administration Project, Ser A, RB, AMBAC | ||||||||
| Callable 03/01/12 @ 100 | ||||||||
| 5.250%, 03/01/18 | 155 | 161 | ||||||
| California State, Public Works Board Lease, Department of Mental Health Project, Ser A, RB | ||||||||
| 5.250%, 06/01/13 | 200 | 217 | ||||||
| California State, Public Works Board, Ser B-1, RB | ||||||||
| 5.000%, 03/01/19 | 500 | 544 | ||||||
| Carlsbad, Public Financing Authority, Municipal Golf Course Project, Ser A, RB, AMBAC | ||||||||
| 4.500%, 09/01/16 | 350 | 399 |
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 40
| schedule of investments |
September 30, 2010 |
California Tax Exempt Bond Fund (continued) |
| Description | Face Amount (000) | Value (000) |
| Castaic Lake, Water Agency, Water Systems Improvement Project, Ser A, COP, NATL-RE | ||||||||
| 7.000%, 08/01/13 | $ | 300 | $ | 347 | ||||
| Clovis, Public Financing Authority, Ser A, TA, NATL-RE | ||||||||
| 3.250%, 08/01/13 | 400 | 400 | ||||||
| Culver City, Redevelopment Finance Authority, TA, AMBAC | ||||||||
| 5.500%, 11/01/14 | 65 | 67 | ||||||
| Dry Creek, Joint Elementary School District, Ser A, GO, AGM (B) | ||||||||
| 3.000%, 08/01/11 | 200 | 198 | ||||||
| Escondido, Union School District, Refunding & Financing Project, COP, NATL-RE | ||||||||
| 4.750%, 07/01/19 | 735 | 831 | ||||||
| Fresno, Unified School District, Election 2001 Project, Ser D, GO, NATL-RE | ||||||||
| Callable 08/01/13 @ 102 | ||||||||
| 5.000%, 08/01/17 | 200 | 218 | ||||||
| Galt, Joint Unified Elementary School District, GO, NATL-RE FGIC | ||||||||
| Callable 08/01/12 @ 100 | ||||||||
| 5.000%, 08/01/24 | 775 | 802 | ||||||
| Gilroy, Unified School District, GO (B) | ||||||||
| 3.400%, 04/01/13 | 500 | 468 | ||||||
| Gilroy, Unified School District, GO, NATL-RE FGIC | ||||||||
| Callable 08/01/13 @ 100 | ||||||||
| 5.250%, 08/01/19 | 800 | 864 | ||||||
| Golden State, Tobacco Settlement, Ser A, RB, AMBAC | ||||||||
| Callable 10/20/10 @ 100 | ||||||||
| 5.000%, 06/01/20 | 500 | 500 | ||||||
| Golden State, Tobacco Settlement, Ser A-1, RB (A) | ||||||||
| Pre-Refunded @ 100 | ||||||||
| 6.750%, 06/01/13 | 920 | 1,066 | ||||||
| Jefferson, Unified High School District, Ser A, GO, NATL-RE FGIC | ||||||||
| 5.000%, 08/01/14 | 200 | 222 | ||||||
| Kern, High School District, GO, ETM | ||||||||
| 7.100%, 08/01/12 | 290 | 325 |
| Description | Face Amount (000) | Value (000) |
| Long Beach, Community College District, Ser A, GO | ||||||||
| 9.850%, 01/15/13 | $ | 500 | $ | 598 | ||||
| Los Angeles County, Metropolitan Transportation Authority, Proposition C, Ser A, RB, NATL-RE | ||||||||
| Callable 07/01/14 @ 100 | ||||||||
| 5.000%, 07/01/16 | 200 | 228 | ||||||
| Los Angeles County, Metropolitan Transportation Authority, Ser B, RB, AGM | ||||||||
| Callable 07/01/11 @ 101 | ||||||||
| 5.250%, 07/01/15 | 250 | 261 | ||||||
| Los Angeles County, Public Works Financing Authority, SAB, AGM | ||||||||
| 5.250%, 10/01/18 | 750 | 911 | ||||||
| Los Angeles County, Sanitation Districts Financing Authority, Capital Projects (District #14), Sub-Ser B, RB, NATL-RE FGIC | ||||||||
| 3.750%, 10/01/14 | 175 | 187 | ||||||
| Los Angeles, Department of Water & Power, Power Systems Project, Ser A Sub-Ser-Ser A-1, RB, NATL-RE | ||||||||
| 5.000%, 07/01/12 | 665 | 715 | ||||||
| Los Angeles, Department of Water & Power, Sub-Ser A-2, RB, AGM | ||||||||
| Callable 07/01/15 @ 100 | ||||||||
| 5.000%, 07/01/25 | 1,000 | 1,096 | ||||||
| Los Angeles, Municipal Improvement Authority, Central Library Project, Ser A, RB, NATL-RE | ||||||||
| 5.250%, 06/01/12 | 300 | 318 | ||||||
| Los Angeles, Municipal Improvement Authority, Central Library Project, Ser A, RB, NATL-RE | ||||||||
| Callable 06/01/12 @ 100 | ||||||||
| 5.500%, 06/01/18 | 500 | 535 | ||||||
| Los Angeles, Municipal Improvement Authority, Ser E, RB | ||||||||
| 5.000%, 09/01/15 | 200 | 224 | ||||||
| Los Angeles, Ser A, GO, AGM | ||||||||
| Callable 09/01/12 @ 100 | ||||||||
| 5.000%, 09/01/20 | 750 | 807 | ||||||
| Los Angeles, Unified School District, COP, AMBAC | ||||||||
| 5.000%, 10/01/12 | 750 | 801 |
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 41
| schedule of investments |
September 30, 2010 |
California Tax Exempt Bond Fund (continued) |
| Description | Face Amount (000) | Value (000) |
| Los Angeles, Unified School District, Ser A-1, GO, NATL-RE | ||||||||
| Callable 07/01/14 @ 100 | ||||||||
| 5.000%, 07/01/17 | $ | 125 | $ | 139 | ||||
| Los Angeles, Wastewater Systems Authority, Ser A, RB | ||||||||
| 5.000%, 06/01/14 | 750 | 852 | ||||||
| Mount San Antonio, Community College District, GO (B) | ||||||||
| 3.700%, 05/01/15 | 500 | 451 | ||||||
| North Orange County, Community College District, Ser A, GO, NATL-RE (A) | ||||||||
| Pre-Refunded @ 101 | ||||||||
| 5.375%, 08/01/12 | 525 | 574 | ||||||
| Oakley, Civic Center Project, COP | ||||||||
| 4.000%, 05/01/12 | 230 | 239 | ||||||
| Orange County, Public Financing Authority, RB, NATL-RE | ||||||||
| 5.000%, 07/01/17 | 1,000 | 1,168 | ||||||
| Orange County, Sanitation District, Ser A, COP | ||||||||
| 3.000%, 02/01/17 | 500 | 527 | ||||||
| Oxnard, School District, Election 2006 Project, Ser A, GO, CIFG | ||||||||
| 6.750%, 08/01/11 | 300 | 315 | ||||||
| Pinole, Redevelopment Agency, Pinole Vista Redevelopment Project, TA, AGM | ||||||||
| Callable 11/04/10 @ 100 | ||||||||
| 5.250%, 08/01/14 | 100 | 101 | ||||||
| Port of Oakland, Ser B, RB, NATL-RE | ||||||||
| Callable 11/01/17 @ 100 | ||||||||
| 5.000%, 11/01/23 | 500 | 524 | ||||||
| Port of Oakland, Ser C, RB, NATL-RE | ||||||||
| 5.000%, 11/01/15 | 450 | 506 | ||||||
| Redwoods, Community College District, 2004 Election Project, Ser A, GO, NATL-RE | ||||||||
| Callable 08/01/14 @ 100 | ||||||||
| 5.000%, 08/01/23 | 420 | 450 | ||||||
| Sacramento, City Financing Authority, EPA Building Project, Ser A, RB, AMBAC | ||||||||
| Callable 11/04/10 @ 100 | ||||||||
| 4.750%, 05/01/17 | 525 | 526 |
| Description | Face Amount (000) | Value (000) |
| Sacramento, Municipal Utility District, Ser T, RB, NATL-RE FGIC | ||||||||
| Callable 05/15/14 @ 100 | ||||||||
| 5.250%, 05/15/22 | $ | 805 | $ | 881 | ||||
| Sacramento, Unified School District, GO, NATL-RE | ||||||||
| Callable 07/01/15 @ 100 | ||||||||
| 5.000%, 07/01/18 | 300 | 336 | ||||||
| San Diego, Public Facilities Financing Authority, Ser B, RB | ||||||||
| 5.000%, 05/15/14 | 750 | 850 | ||||||
| San Diego, Unified School District, Election 1998 Project, Ser D, GO, FGIC | ||||||||
| Callable 07/01/12 @ 100 | ||||||||
| 5.000%, 07/01/27 | 500 | 536 | ||||||
| San Diego, Unified School District, Election 1998 Project, Ser E, GO, AGM | ||||||||
| Callable 07/01/13 @ 101 | ||||||||
| 5.250%, 07/01/16 | 100 | 112 | ||||||
| San Francisco City & County, Redevelopment Agency, Ser B, TA | ||||||||
| 5.000%, 08/01/17 | 540 | 585 | ||||||
| San Francisco City & County, Redevelopment Agency, Ser B, TA, NATL-RE | ||||||||
| 5.000%, 08/01/15 | 300 | 323 | ||||||
| San Francisco City & County, Redevelopment Agency, Ser B, TA, NATL-RE FGIC | ||||||||
| Callable 08/01/13 @ 100 | ||||||||
| 5.250%, 08/01/18 | 600 | 624 | ||||||
| San Francisco City & County, Ser B, COP | ||||||||
| Callable 04/01/19 @ 100 | ||||||||
| 5.000%, 04/01/22 | 735 | 821 | ||||||
| San Francisco, Bay Area Transit Financing Authority, Ser A, RB, NATL-RE | ||||||||
| Callable 07/01/15 @ 100 | ||||||||
| 5.000%, 07/01/24 | 550 | 605 | ||||||
| San Jose, Redevelopment Agency, Ser A, TA, NATL-RE | ||||||||
| Callable 08/01/15 @ 100 | ||||||||
| 5.000%, 08/01/17 | 795 | 851 | ||||||
| Santa Margarita, Dana Point Authority, Ser A, RB, AMBAC | ||||||||
| Callable 08/01/14 @ 100 | ||||||||
| 5.000%, 08/01/15 | 165 | 186 |
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 42
| schedule of investments |
September 30, 2010 |
California Tax Exempt Bond Fund (continued) |
| Description | Face Amount (000) | Value (000) |
| Solano County, COP, NATL-RE (A) | ||||||||
| Pre-Refunded @ 100 | ||||||||
| 5.250%, 11/01/12 | $ | 100 | $ | 110 | ||||
| Southern California, Metropolitan Water District Authority, Ser A, RB | ||||||||
| 5.750%, 07/01/21 | 280 | 341 | ||||||
| State of California, Ser A, GO, NATL-RE FGIC | ||||||||
| Callable 07/01/11 @ 100 | ||||||||
| 5.000%, 07/01/17 | 500 | 516 | ||||||
| State of California, Ser B, GO (C) | ||||||||
| 4.000%, 07/01/23 | 750 | 816 | ||||||
| Tamalpais, Unified High School District, GO, NATL-RE (A) | ||||||||
| Pre-Refunded @ 101 | ||||||||
| 4.875%, 08/01/17 | 100 | 105 | ||||||
| University of California, Ser A, RB, NATL-RE | ||||||||
| Callable 05/15/12 @ 101 | ||||||||
| 4.750%, 05/15/23 | 500 | 517 | ||||||
| University of California, Ser B, RB, AGM (A) | ||||||||
| Pre-Refunded @ 101 | ||||||||
| 5.000%, 05/15/20 | 750 | 824 | ||||||
| University of California, Ser Q, RB, AGM (A) | ||||||||
| Pre-Refunded @ 101 | ||||||||
| 5.000%, 09/01/11 | 490 | 516 | ||||||
| University of California, Ser Q, RB, AGM | ||||||||
| Callable 09/01/11 @ 101 | ||||||||
| 5.000%, 09/01/22 | 10 | 10 | ||||||
Total California | 36,741 | |||||||
| Illinois [0.8%] | ||||||||
| Cook County, Forest Preservation District, GO, AMBAC | ||||||||
| Callable 11/15/14 @ 100 | ||||||||
5.250%, 11/15/15 | 300 | 340 | ||||||
| New Jersey [0.8%] | ||||||||
| New Jersey State, Turnpike Authority, Ser C, RB, NATL-RE, ETM | ||||||||
6.500%, 01/01/16 | 315 | 368 |
| Description | Face Amount (000) | Value (000) |
| New Mexico [0.9%] | ||||||||
| Santa Fe, Educational Facilities Authority, College of Santa Fe Project, RB (A) | ||||||||
| Pre-Refunded @ 100 | ||||||||
5.750%, 10/01/14 | $ | 350 | $ | 413 | ||||
| New York [2.4%] | ||||||||
| New York City, Housing Development, Ser F, RB | ||||||||
| Callable 05/01/11 @ 100 | ||||||||
| 1.950%, 11/01/12 | 500 | 501 | ||||||
| New York State, Local Assistance Correction Authority, Ser E, RB | ||||||||
| 6.000%, 04/01/14 | 490 | 550 | ||||||
Total New York | 1,051 | |||||||
| South Carolina [2.0%] | ||||||||
| Columbia, Tourism Development Fee Pledge Project, COP, AMBAC | ||||||||
| Callable 06/01/13 @ 100 | ||||||||
| 5.250%, 06/01/16 | 350 | 376 | ||||||
| South Carolina, Jobs & Economic Development Authority, Palmetto Health Project, Ser C, RB (A) | ||||||||
| Pre-Refunded @ 100 | ||||||||
| 6.875%, 08/01/13 | 400 | 465 | ||||||
Total South Carolina | 841 | |||||||
| Washington [0.9%] | ||||||||
| King County, NJB Properties Project, Ser A, RB | ||||||||
5.000%, 12/01/14 | 325 | 372 | ||||||
| West Virginia [1.2%] | ||||||||
| West Virginia State, Economic Development Authority, Correctional Juvenile Project, Ser A, RB, NATL-RE | ||||||||
| Callable 06/01/12 @ 101 | ||||||||
5.500%, 06/01/17 | 500 | 535 |
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 43
| schedule of investments |
September 30, 2010 |
California Tax Exempt Bond Fund (concluded) |
| Description | Face Amount (000)/Shares | Value (000) | ||||||
| Puerto Rico [1.2%] | ||||||||
| Puerto Rico, Sales Tax Financing, Sub-Ser A, RB | ||||||||
4.000%, 08/01/16 | $ | 500 | $ | 541 | ||||
Total Municipal Bonds (Cost $40,429) | 42,034 | |||||||
| Cash Equivalent [2.3%] | ||||||||
| Federated California Municipal Money Market Fund, Cl I, 0.100%* | 995,278 | 995 | ||||||
Total Cash Equivalent (Cost $995) | 995 | |||||||
Total Investments [98.3%] (Cost $41,424) | $ | 43,029 | ||||||
Percentages are based on Net Assets of $43,766 ($ Thousands).
| * | The rate reported is the 7-day current yield as of September 30, 2010. |
| (A) | Pre-Refunded Security — The date shown is the pre-refunded date. |
| (B) | Zero coupon security. The rate reflected is the effective yield at time of purchase. |
| (C) | Floating Rate Security — The rate reflected is the rate in effect on September 30, 2010. |
AGM — Assured Guarantee Municipal
AMBAC — American Municipal Bond Assurance Company
CIFG — CDC IXIS Financial Guarantee
Cl — Class
COP — Certificate of Participation
ETM — Escrowed to Maturity
FGIC — Financial Guaranty Insurance Company
FNMA — Federal National Mortgage Association
GO — General Obligation
NATL-RE — National Public Finance Guarantee Corporation
RB — Revenue Bond
SAB — Special Assessment Board
Ser — Series
TA — Tax Allocation
The following is a summary of the inputs used as of September 30, 2010 in valuing the Fund’s investments carried at value ($ Thousands):
| Investments in Securities | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Municipal Bonds | $ | — | $ | 42,034 | $ | — | $ | 42,034 | ||||||||
| Cash Equivalent | 995 | — | — | 995 | ||||||||||||
| Total Investments in Securities | $ | 995 | $ | 42,034 | $ | — | $ | 43,029 | ||||||||
For the year ended September 30, 2010, there have been no significant transfers between Level 1 and Level 2 assets and liabilities.
For more information on valuation inputs, see Note 2 — Significant Accounting Policies in the Notes to Financial Statements.
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 44
| schedule of investments |
September 30, 2010 |
| High Yield Bond Fund |
| Description | Face Amount (000) | Value (000) | ||||||
| Corporate Bonds [96.8%] | ||||||||
| Advertising Agencies [1.3%] | ||||||||
| MDC Partners | ||||||||
| 11.000%, 11/01/16(A) | $ | 700 | $ | 749 | ||||
Total Advertising Agencies | 749 | |||||||
| Aerospace & Defense [3.4%] | ||||||||
| Global Aviation Holdings | ||||||||
| 14.000%, 08/15/13(A) | 500 | 535 | ||||||
| Kratos Defense & Security Solutions | ||||||||
| 10.000%, 06/01/17 | 500 | 530 | ||||||
| L-3 Communications | ||||||||
| 5.875%, 01/15/15 | 200 | 205 | ||||||
| Sequa | ||||||||
| 13.500%, 12/01/15(A) | 101 | 108 | ||||||
| 11.750%, 12/01/15(A) | 400 | 422 | ||||||
| Wyle Services | ||||||||
| 10.500%, 04/01/18(A) | 200 | 198 | ||||||
Total Aerospace & Defense | 1,998 | |||||||
| Airlines [3.4%] | ||||||||
| Continental Airlines, Ser 2007-1, Cl C | ||||||||
| 7.339%, 04/19/14 | 531 | 552 | ||||||
| DAE Aviation Holdings | ||||||||
| 11.250%, 08/01/15(A) | 150 | 151 | ||||||
| Delta Airlines | ||||||||
| 12.250%, 03/15/15(A) | 400 | 442 | ||||||
| United Airlines | ||||||||
| 10.400%, 11/01/16 | 273 | 304 | ||||||
| 9.875%, 08/01/13(A) | 245 | 266 | ||||||
| 9.750%, 01/15/17 | 205 | 226 | ||||||
Total Airlines | 1,941 | |||||||
| Description | Face Amount (000) | Value (000) |
| Auto Rent & Lease [0.6%] | ||||||||
| Avis Budget Car Rental | ||||||||
| 7.750%, 05/15/16 | $ | 100 | $ | 98 | ||||
| H&E Equipment Services | ||||||||
| 8.375%, 07/15/16 | 100 | 100 | ||||||
| Hertz | ||||||||
| 10.500%, 01/01/16 | 150 | 160 | ||||||
Total Auto Rent & Lease | 358 | |||||||
| Automotive [0.4%] | ||||||||
| UCI Holdco | ||||||||
9.250%, 12/15/13(B) | 222 | 215 | ||||||
| Autoparts [1.3%] | ||||||||
| Asbury Automotive Group | ||||||||
| 7.625%, 03/15/17 | 100 | 98 | ||||||
| Exide Technologies | ||||||||
| 10.500%, 03/15/13 | 250 | 256 | ||||||
| Stanadyne | ||||||||
| 10.000%, 08/15/14 | 450 | 425 | ||||||
Total Autoparts | 779 | |||||||
| Banks [1.0%] | ||||||||
| CIT Group | ||||||||
7.000%, 05/01/16 | 600 | 591 | ||||||
| Broadcasting & Cable [3.8%] | ||||||||
| Atlantic Broadband Finance | ||||||||
| 9.375%, 01/15/14 | 100 | 101 | ||||||
| Barrington Broadcasting Group | ||||||||
| 10.500%, 08/15/14 | 100 | 92 | ||||||
| Bonten Media Acquisition | ||||||||
| 9.000%, 06/01/15(A) | 173 | 94 | ||||||
| Cablevision Systems | ||||||||
| 8.000%, 04/15/20 | 400 | 431 | ||||||
| CCO Holdings | ||||||||
| 8.125%, 04/30/20(A) | 250 | 265 | ||||||
| CSC Holdings | ||||||||
| 7.625%, 07/15/18 | 100 | 108 | ||||||
| DCP | ||||||||
| 10.750%, 08/15/15(A) | 500 | 505 | ||||||
| Fisher Communications | ||||||||
| 8.625%, 09/15/14 | 150 | 149 | ||||||
| Local TV Finance | ||||||||
| 9.250%, 06/15/15(A) | 116 | 102 | ||||||
| Newport Television | ||||||||
| 13.000%, 03/15/17(A) | 122 | 106 | ||||||
| Nexstar Finance Holdings | ||||||||
| 11.375%, 04/01/13(E) | 128 | 127 | ||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 45
| schedule of investments |
September 30, 2010 |
High Yield Bond Fund (continued) |
| Description | Face Amount (000) | Value (000) |
| Univision Communications | ||||||||
| 12.000%, 07/01/14(A) | $ | 81 | $ | 89 | ||||
Total Broadcasting & Cable | 2,169 | |||||||
| Building & Construction [0.1%] | ||||||||
| Esco | ||||||||
| 8.625%, 12/15/13(A) | 50 | 51 | ||||||
| International Utility Structures | ||||||||
| 10.750%, 02/01/08(C) (D) | 100 | 1 | ||||||
Total Building & Construction | 52 | |||||||
| Chemicals [2.1%] | ||||||||
| CPG International I | ||||||||
| 10.500%, 07/01/13 | 650 | 656 | ||||||
| Ferro | ||||||||
| 7.875%, 08/15/18 | 225 | 233 | ||||||
| Momentive Performance Materials | ||||||||
| 9.750%, 12/01/14 | 100 | 103 | ||||||
| Polymer Holdings (C) (E) (F) | ||||||||
| 18.929%, 07/15/14 | 250 | 255 | ||||||
Total Chemicals | 1,247 | |||||||
| Coal Mining [0.8%] | ||||||||
| Consol Energy | ||||||||
8.250%, 04/01/20(A) | 400 | 437 | ||||||
| Commercial Services [3.0%] | ||||||||
| ARAMARK | ||||||||
| 8.500%, 02/01/15 | 500 | 520 | ||||||
| Bankrate | ||||||||
| 11.750%, 07/15/15(A) | 450 | 482 | ||||||
| DynCorp International | ||||||||
| 10.375%, 07/01/17(A) | 500 | 498 | ||||||
| Iron Mountain | ||||||||
| 8.750%, 07/15/18 | 150 | 159 | ||||||
| Tube City IMS | ||||||||
| 9.750%, 02/01/15 | 100 | 102 | ||||||
Total Commercial Services | 1,761 | |||||||
| Communications Software [1.1%] | ||||||||
| Aspect Software | ||||||||
10.625%, 05/15/17(A) | 600 | 623 | ||||||
| Computer System Design & Services [2.2%] | ||||||||
| Activant Solutions | ||||||||
| 9.500%, 05/01/16 | 100 | 96 | ||||||
| Description | Face Amount (000) | Value (000) |
| Compucom Systems | ||||||||
| 12.500%, 10/01/15(A) | $ | 540 | $ | 580 | ||||
| Stratus Technologies | ||||||||
| 12.000%, 03/29/15(A) | 675 | 575 | ||||||
Total Computer System Design & Services | 1,251 | |||||||
| Consumer Products & Services [2.7%] | ||||||||
| Jarden | ||||||||
| 7.500%, 05/01/17 | 75 | 78 | ||||||
| MSX International | ||||||||
| 12.500%, 04/01/12(A) | 100 | 88 | ||||||
| Prestige Brands | ||||||||
| 8.250%, 04/01/18 | 250 | 259 | ||||||
| Sealy Mattress | ||||||||
| 8.250%, 06/15/14 | 200 | 201 | ||||||
| Spectrum Brands Holdings | ||||||||
| 9.500%, 06/15/18(A) | 700 | 751 | ||||||
| Steinway Musical Instruments | ||||||||
| 7.000%, 03/01/14(A) | 100 | 100 | ||||||
| Yankee Acquisition, Ser B | ||||||||
| 9.750%, 02/15/17 | 50 | 52 | ||||||
Total Consumer Products & Services | 1,529 | |||||||
| Containers & Packaging [0.9%] | ||||||||
| Exopack Holding | ||||||||
| 11.250%, 02/01/14 | 100 | 102 | ||||||
| Graphic Packaging International | ||||||||
| 7.875%, 10/01/18 | 145 | 149 | ||||||
| Intertape Polymer US | ||||||||
| 8.500%, 08/01/14 | 100 | 85 | ||||||
| Solo Cup | ||||||||
| 8.500%, 02/15/14 | 200 | 172 | ||||||
Total Containers & Packaging | 508 | |||||||
| Data Processing/Mgmt [0.6%] | ||||||||
| First Data | ||||||||
10.550%, 09/24/15 | 400 | 323 | ||||||
| Distribution/Wholesale [1.9%] | ||||||||
| Intcomex | ||||||||
| 13.250%, 12/15/14(A) | 600 | 633 | ||||||
| VWR Funding | ||||||||
| 10.250%, 07/15/15 | 423 | 438 | ||||||
Total Distribution/Wholesale | 1,071 | |||||||
| Diversified Operations [0.8%] | ||||||||
| Amsted Industries | ||||||||
8.125%, 03/15/18(A) | 450 | 469 | ||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 46
| schedule of investments |
September 30, 2010 |
High Yield Bond Fund (continued) |
| Description | Face Amount (000) | Value (000) |
| E-Commerce/Products [1.2%] | ||||||||
| GXS Worldwide | ||||||||
9.750%, 06/15/15 | $ | 700 | $ | 697 | ||||
| Electric Utilities [2.1%] | ||||||||
| AES | ||||||||
| 8.000%, 10/15/17 | 100 | 109 | ||||||
| 8.000%, 06/01/20 | 50 | 54 | ||||||
| CMS Energy | ||||||||
| 8.750%, 06/15/19 | 50 | 60 | ||||||
| 6.875%, 12/15/15 | 150 | 166 | ||||||
| Mirant North America | ||||||||
| 7.375%, 12/31/13 | 150 | 154 | ||||||
| NRG Energy | ||||||||
| 8.250%, 09/01/20(A) | 250 | 258 | ||||||
| 7.375%, 02/01/16 | 100 | 103 | ||||||
| PNM Resources | ||||||||
| 9.250%, 05/15/15 | 100 | 108 | ||||||
| RRI Energy | ||||||||
| 7.625%, 06/15/14 | 200 | 198 | ||||||
Total Electric Utilities | 1,210 | |||||||
| Enterprise Software/Serv [0.7%] | ||||||||
| JDA Software Group | ||||||||
8.000%, 12/15/14(A) | 375 | 397 | ||||||
| Entertainment & Gaming [11.6%] | ||||||||
| AMC Entertainment | ||||||||
| 11.000%, 02/01/16 | 100 | 107 | ||||||
| Boyd Gaming | ||||||||
| 6.750%, 04/15/14 | 500 | 445 | ||||||
| CCM Merger | ||||||||
| 8.000%, 08/01/13(A) | 175 | 160 | ||||||
| Choctaw Resort Development Enterprise | ||||||||
| 7.250%, 11/15/19(A) | 182 | 126 | ||||||
| Chukchansi Economic Development Authority | ||||||||
| 8.000%, 11/15/13(A) | 250 | 146 | ||||||
| 4.123%, 11/15/12(A) (B) | 250 | 144 | ||||||
| Circus & Eldorado Joint Venture/Silver Legacy Capital | ||||||||
| 10.125%, 03/01/12 | 150 | 139 | ||||||
| Harrah's Operating | ||||||||
| 12.750%, 04/15/18(A) | 100 | 93 | ||||||
| 11.250%, 06/01/17 | 250 | 274 | ||||||
| 10.750%, 02/01/16 | 250 | 201 | ||||||
| Indianapolis Downs & Capital | ||||||||
| 11.000%, 11/01/12(A) | 100 | 81 | ||||||
| Inn of the Mountain Gods Resort & Casino | ||||||||
| 12.000%, 11/15/10(D) | 150 | 61 | ||||||
| Description | Face Amount (000) | Value (000) |
| Jacobs Entertainment | ||||||||
| 9.750%, 06/15/14 | $ | 75 | $ | 69 | ||||
| Lions Gate Entertainment | ||||||||
| 10.250%, 11/01/16(A) | 400 | 406 | ||||||
| Live Nation Entertainment | ||||||||
| 8.125%, 05/15/18(A) | 325 | 328 | ||||||
| Mashantucket Western Pequot Tribe | ||||||||
| 8.500%, 11/15/15(A) (D) | 170 | 25 | ||||||
| MGM Resorts International | ||||||||
| 11.375%, 03/01/18 | 400 | 381 | ||||||
| Mohegan Tribal Gaming Authority | ||||||||
| 7.125%, 08/15/14 | 100 | 59 | ||||||
| Penn National Gaming | ||||||||
| 8.750%, 08/15/19 | 250 | 266 | ||||||
| Regal Entertainment Group | ||||||||
| 9.125%, 08/15/18 | 225 | 236 | ||||||
| River Rock Entertainment Authority | ||||||||
| 9.750%, 11/01/11 | 800 | 722 | ||||||
| San Pasqual Casino | ||||||||
| 8.000%, 09/15/13(A) | 100 | 98 | ||||||
| Scientific Games | ||||||||
| 8.125%, 09/15/18(A) | 325 | 331 | ||||||
| 6.250%, 12/15/12 | 100 | 101 | ||||||
| Seneca Gaming | ||||||||
| 7.250%, 05/01/12 | 200 | 197 | ||||||
| Shingle Springs Tribal Gaming Authority | ||||||||
| 9.375%, 06/15/15(A) | 100 | 74 | ||||||
| Snoqualmie Entertainment Authority | ||||||||
| 9.125%, 02/01/15(A) | 300 | 264 | ||||||
| 4.428%, 02/01/14(A) (B) | 300 | 248 | ||||||
| Speedway Motorsports | ||||||||
| 6.750%, 06/01/13 | 100 | 101 | ||||||
| Tunica-Biloxi Gaming Authority | ||||||||
| 9.000%, 11/15/15(A) | 125 | 113 | ||||||
| Vail Resorts | ||||||||
| 6.750%, 02/15/14 | 100 | 102 | ||||||
| Waterford Gaming | ||||||||
| 8.625%, 09/15/14(A) (C) | 68 | 34 | ||||||
| Wynn Las Vegas | ||||||||
| 7.875%, 05/01/20 | 175 | 186 | ||||||
| 7.750%, 08/15/20(A) | 400 | 422 | ||||||
Total Entertainment & Gaming | 6,740 | |||||||
| Financial Services [2.6%] | ||||||||
| Ally Financial | ||||||||
| 6.750%, 12/01/14 | 425 | 439 | ||||||
| Icahn Enterprises | ||||||||
| 7.750%, 01/15/16 | 400 | 402 | ||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 47
| schedule of investments |
September 30, 2010 |
High Yield Bond Fund (continued) |
| Description | Face Amount (000) | Value (000) |
| International Lease Finance | ||||||||
| 8.625%, 09/15/15(A) | $ | 290 | $ | 310 | ||||
| 6.375%, 03/25/13 | 235 | 236 | ||||||
| International Lease Finance, MTN | ||||||||
| 5.650%, 06/01/14 | 115 | 112 | ||||||
Total Financial Services | 1,499 | |||||||
| Food, Beverage & Tobacco [1.6%] | ||||||||
| B&G Foods | ||||||||
| 7.625%, 01/15/18 | 200 | 208 | ||||||
| Beverages & More | ||||||||
| 9.625%, 10/01/14(A) | 400 | 400 | ||||||
| Leiner Health Products | ||||||||
| 11.000%, 06/01/12(D) | 100 | 6 | ||||||
| Le-Nature's | ||||||||
| 9.000%, 06/15/13(A) (C) (D) | 150 | 23 | ||||||
| Vector Group | ||||||||
| 11.000%, 08/15/15 | 250 | 257 | ||||||
Total Food, Beverage & Tobacco | 894 | |||||||
| Gas/Natural Gas [0.2%] | ||||||||
| El Paso | ||||||||
7.000%, 06/15/17 | 150 | 159 | ||||||
| Insurance [3.8%] | ||||||||
| Delphi Financial Group | ||||||||
| 7.875%, 01/31/20 | 300 | 336 | ||||||
| Ironshore Holdings US | ||||||||
| 8.500%, 05/15/20(A) | 800 | 811 | ||||||
| National Life Insurance | ||||||||
| 10.500%, 09/15/39(A) | 150 | 182 | ||||||
| Protective Life | ||||||||
| 8.450%, 10/15/39 | 225 | 247 | ||||||
| USI Holdings | ||||||||
| 9.750%, 05/15/15(A) | 507 | 492 | ||||||
| 4.251%, 11/15/14(A) (B) | 125 | 106 | ||||||
Total Insurance | 2,174 | |||||||
| Investment Banker/Broker Dealer [1.6%] | ||||||||
| E*Trade Financial | ||||||||
| 7.375%, 09/15/13 | 250 | 244 | ||||||
| Nuveen Investments | ||||||||
| 10.500%, 11/15/15 | 700 | 696 | ||||||
Total Investment Banker/Broker Dealer | 940 | |||||||
| Description | Face Amount (000) | Value (000) |
| Investment Companies [1.5%] | ||||||||
| American Capital | ||||||||
| 8.960%, 12/31/13(A) | $ | 360 | $ | 361 | ||||
| Offshore Group Investments | ||||||||
| 11.500%, 08/01/15(A) | 500 | 525 | ||||||
Total Investment Companies | 886 | |||||||
| Machinery [0.7%] | ||||||||
| Baldor Electric | ||||||||
| 8.625%, 02/15/17 | 125 | 134 | ||||||
| Case New Holland | ||||||||
| 7.875%, 12/01/17(A) | 150 | 163 | ||||||
| CPM Holdings | ||||||||
| 10.625%, 09/01/14(A) | 130 | 140 | ||||||
Total Machinery | 437 | |||||||
| Medical Products & Services [2.8%] | ||||||||
| Apria Healthcare Group | ||||||||
| 12.375%, 11/01/14 | 200 | 223 | ||||||
| Bio-Rad Laboratories | ||||||||
| 7.500%, 08/15/13 | 100 | 101 | ||||||
| BioScrip | ||||||||
| 10.250%, 10/01/15 | 600 | 613 | ||||||
| Community Health Systems | ||||||||
| 8.875%, 07/15/15 | 150 | 159 | ||||||
| HCA | ||||||||
| 9.250%, 11/15/16 | 50 | 54 | ||||||
| 5.750%, 03/15/14 | 100 | 99 | ||||||
| Omnicare | ||||||||
| 7.750%, 06/01/20 | 350 | 358 | ||||||
Total Medical Products & Services | 1,607 | |||||||
| Metals & Mining [0.5%] | ||||||||
| Noranda Aluminum Acquisition | ||||||||
| 5.373%, 05/15/15(B) | 165 | 138 | ||||||
| Novelis | ||||||||
| 7.250%, 02/15/15 | 150 | 153 | ||||||
Total Metals & Mining | 291 | |||||||
| Miscellaneous Business Services [1.6%] | ||||||||
| Affinion Group | ||||||||
| 11.500%, 10/15/15 | 100 | 106 | ||||||
| 10.125%, 10/15/13 | 400 | 410 | ||||||
| Carriage Services | ||||||||
| 7.875%, 01/15/15 | 200 | 197 | ||||||
| Lamar Media | ||||||||
| 6.625%, 08/15/15 | 100 | 101 | ||||||
| MCBC Holdings | ||||||||
| 6.831%, 10/15/14(A) (C) | 50 | 17 | ||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 48
| schedule of investments |
September 30, 2010 |
High Yield Bond Fund (continued) |
| Description | Face Amount (000) | Value (000) |
| Stewart Enterprises | ||||||||
| 6.250%, 02/15/13 | $ | 100 | $ | 100 | ||||
Total Miscellaneous Business Services | 931 | |||||||
| Miscellaneous Manufacturing [2.0%] | ||||||||
| AGY Holding | ||||||||
| 11.000%, 11/15/14 | 100 | 86 | ||||||
| Buffalo Thunder Development Authority | ||||||||
| 9.375%, 12/15/14(A) (D) | 75 | 20 | ||||||
| CEVA Group | ||||||||
| 11.625%, 10/01/16(A) | 250 | 264 | ||||||
| 11.500%, 04/01/18(A) | 100 | 104 | ||||||
| Coleman Cable | ||||||||
| 9.000%, 02/15/18 | 450 | 460 | ||||||
| Thermon Industries | ||||||||
| 9.500%, 05/01/17(A) | 250 | 261 | ||||||
Total Miscellaneous Manufacturing | 1,195 | |||||||
| Multi-line Insurance [0.4%] | ||||||||
| Unitrin | ||||||||
6.000%, 05/15/17 | 195 | 201 | ||||||
| Paper & Related Products [0.3%] | ||||||||
| Appleton Papers | ||||||||
| 11.250%, 12/15/15(A) | 62 | 46 | ||||||
| Domtar | ||||||||
| 7.125%, 08/15/15 | 38 | 41 | ||||||
| Verso Paper Holdings | ||||||||
| 9.125%, 08/01/14 | 100 | 100 | ||||||
Total Paper & Related Products | 187 | |||||||
| Petroleum & Fuel Products [5.9%] | ||||||||
| Aquilex Holdings | ||||||||
| 11.125%, 12/15/16 | 370 | 366 | ||||||
| Atlas Pipeline Partners | ||||||||
| 8.125%, 12/15/15 | 200 | 202 | ||||||
| Bill Barrett | ||||||||
| 9.875%, 07/15/16 | 250 | 273 | ||||||
| Clayton Williams Energy | ||||||||
| 7.750%, 08/01/13 | 150 | 150 | ||||||
| Continental Resources | ||||||||
| 7.375%, 10/01/20(A) | 500 | 527 | ||||||
| Copano Energy | ||||||||
| 7.750%, 06/01/18 | 100 | 101 | ||||||
| Energy Transfer Equity | ||||||||
| 7.500%, 10/15/20 | 400 | 421 | ||||||
| Helix Energy Solutions Group | ||||||||
| 9.500%, 01/15/16(A) | 100 | 101 | ||||||
| Description | Face Amount (000) | Value (000) |
| MarkWest Energy Partners, Ser B | ||||||||
| 8.500%, 07/15/16 | $ | 150 | $ | 158 | ||||
| Newfield Exploration | ||||||||
| 6.625%, 09/01/14 | 150 | 154 | ||||||
| Petroplus Finance | ||||||||
| 7.000%, 05/01/17(A) | 150 | 131 | ||||||
| Plains Exploration & Production | ||||||||
| 7.750%, 06/15/15 | 150 | 157 | ||||||
| 7.625%, 06/01/18 | 100 | 105 | ||||||
| SandRidge Energy | ||||||||
| 8.750%, 01/15/20(A) | 150 | 149 | ||||||
| 8.625%, 04/01/15 | 250 | 250 | ||||||
| Southern Star Central | ||||||||
| 6.750%, 03/01/16 | 100 | 101 | ||||||
| Southwestern Energy | ||||||||
| 7.500%, 02/01/18 | 100 | 113 | ||||||
Total Petroleum & Fuel Products | 3,459 | |||||||
| Photo Equipment and Supplies [0.8%] | ||||||||
| Eastman Kodak | ||||||||
| 9.750%, 03/01/18(A) | 100 | 97 | ||||||
| 7.250%, 11/15/13 | 400 | 384 | ||||||
Total Photo Equipment and Supplies | 481 | |||||||
| Printing & Publishing [1.2%] | ||||||||
| MediMedia USA | ||||||||
| 11.375%, 11/15/14(A) | 50 | 45 | ||||||
| Nielsen Finance | ||||||||
| 12.500%, 08/01/11(E) | 500 | 501 | ||||||
| Sheridan Group | ||||||||
| 10.250%, 08/15/11 | 150 | 148 | ||||||
Total Printing & Publishing | 694 | |||||||
| Radio [0.6%] | ||||||||
| Cleveland Unlimited | ||||||||
| 13.500%, 12/15/10(A) (B) | 250 | 247 | ||||||
| XM Satellite Radio Holdings | ||||||||
| 13.000%, 08/01/13(A) | 100 | 115 | ||||||
Total Radio | 362 | |||||||
| Research and Development [2.5%] | ||||||||
| Alion Science and Technology | ||||||||
| 12.000%, 11/01/14 | 481 | 478 | ||||||
| Catalent Pharma Solutions | ||||||||
| 9.500%, 04/15/15 | 595 | 601 | ||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 49
| schedule of investments |
September 30, 2010 |
High Yield Bond Fund (continued) |
| Description | Face Amount (000) | Value (000) |
| PharmaNet Development Group | ||||||||
| 10.875%, 04/15/17(A) | $ | 350 | $ | 361 | ||||
Total Research and Development | 1,440 | |||||||
| Retail [5.7%] | ||||||||
| ACE Hardware | ||||||||
| 9.125%, 06/01/16(A) | 100 | 107 | ||||||
| Brunswick | ||||||||
| 11.250%, 11/01/16(A) | 245 | 282 | ||||||
| CKE Restaurants | ||||||||
| 11.375%, 07/15/18(A) | 400 | 410 | ||||||
| Claire's Stores | ||||||||
| 9.625%, 06/01/15 | 122 | 114 | ||||||
| Easton-Bell Sports | ||||||||
| 9.750%, 12/01/16 | 500 | 543 | ||||||
| Ferrellgas Partners | ||||||||
| 6.750%, 05/01/14 | 100 | 102 | ||||||
| Games Merger | ||||||||
| 11.000%, 06/01/18(A) | 550 | 594 | ||||||
| Landry's Restaurants | ||||||||
| 11.625%, 12/01/15(A) | 124 | 131 | ||||||
| Leslie's Poolmart | ||||||||
| 7.750%, 02/01/13 | 175 | 177 | ||||||
| Penske Automotive Group | ||||||||
| 7.750%, 12/15/16 | 100 | 98 | ||||||
| Rare Restaurant Group | ||||||||
| 9.250%, 05/15/14(A) | 100 | 86 | ||||||
| Rite Aid | ||||||||
| 9.500%, 06/15/17 | 600 | 504 | ||||||
| Sbarro | ||||||||
| 10.375%, 02/01/15 | 50 | 30 | ||||||
| Sonic Automotive | ||||||||
| 9.000%, 03/15/18 | 70 | 73 | ||||||
| 8.625%, 08/15/13 | 13 | 13 | ||||||
Total Retail | 3,264 | |||||||
| Rubber & Plastic [0.2%] | ||||||||
| Cooper Tire & Rubber | ||||||||
8.000%, 12/15/19 | 100 | 103 | ||||||
| Semi-Conductors [1.5%] | ||||||||
| Amkor Technology | ||||||||
| 9.250%, 06/01/16 | 100 | 107 | ||||||
| Freescale Semiconductor | ||||||||
| 9.250%, 04/15/18(A) | 500 | 520 | ||||||
| Stoneridge | ||||||||
| 9.500%, 10/15/17(A) | 200 | 205 | ||||||
Total Semi-Conductors | 832 | |||||||
| Description | Face Amount (000) | Value (000) |
| Steel & Steel Works [0.9%] | ||||||||
| Ryerson | ||||||||
| 12.000%, 11/01/15 | $ | 75 | $ | 78 | ||||
| Standard Steel | ||||||||
| 12.000%, 05/01/15(A) | 500 | 478 | ||||||
Total Steel & Steel Works | 556 | |||||||
| Telephones & Telecommunications [5.2%] | ||||||||
| Broadview Networks Holdings | ||||||||
| 11.375%, 09/01/12 | 100 | 98 | ||||||
| Citizens Communications | ||||||||
| 7.125%, 03/15/19 | 150 | 154 | ||||||
| Clearwire Communications | ||||||||
| 12.000%, 12/01/15(A) | 750 | 809 | ||||||
| Level 3 Financing | ||||||||
| 10.000%, 02/01/18 | 250 | 225 | ||||||
| Nextel Communications | ||||||||
| 6.875%, 10/31/13 | 200 | 201 | ||||||
| Radio One | ||||||||
| 8.875%, 07/01/11 | 100 | 90 | ||||||
| Telcordia Technologies | ||||||||
| 11.000%, 05/01/18(A) | 740 | 726 | ||||||
| Virgin Media Finance | ||||||||
| 9.125%, 08/15/16 | 150 | 160 | ||||||
| West | ||||||||
| 11.000%, 10/15/16 | 400 | 425 | ||||||
| 9.500%, 10/15/14 | 100 | 105 | ||||||
Total Telephones & Telecommunications | 2,993 | |||||||
| Transactional Software [0.7%] | ||||||||
| Open Solutions | ||||||||
9.750%, 02/01/15(A) | 600 | 423 | ||||||
| Transportation Services [4.8%] | ||||||||
| Navios Maritime Holdings | ||||||||
| 9.500%, 12/15/14 | 100 | 102 | ||||||
| Pegasus Solutions | ||||||||
| 10.500%, 04/15/15(A) | 100 | 38 | ||||||
| Sabre Holdings | ||||||||
| 8.350%, 03/15/16 | 600 | 612 | ||||||
| Ship Finance International | ||||||||
| 8.500%, 12/15/13 | 200 | 203 | ||||||
| Stena | ||||||||
| 7.000%, 12/01/16 | 150 | 149 | ||||||
| Susser Holdings | ||||||||
| 8.500%, 05/15/16 | 400 | 416 | ||||||
| Swift Transportation | ||||||||
| 8.126%, 05/15/15(A) (B) | 200 | 187 | ||||||
| Travelport | ||||||||
| 11.875%, 09/01/16 | 300 | 321 | ||||||
| 9.000%, 03/01/16(A) | 250 | 249 | ||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 50
| schedule of investments |
September 30, 2010 |
High Yield Bond Fund (concluded) |
| Description | Face Amount (000)/Shares | Value (000) | ||||||
| United Maritime Group | ||||||||
| 11.750%, 06/15/15 (A) | $ | 500 | $ | 501 | ||||
Total Transportation Services | 2,778 | |||||||
| Waste Disposal [0.2%] | ||||||||
| WCA Waste | ||||||||
9.250%, 06/15/14 | 100 | 104 | ||||||
Total Corporate Bonds (Cost $55,077) | 56,005 | |||||||
| Convertible Bond [0.2%] | ||||||||
| Food, Beverage & Tobacco [0.2%] | ||||||||
| Vector Group | ||||||||
3.875%, 06/15/26(B) | 60 | 71 | ||||||
Total Convertible Bond (Cost $62) | 71 | |||||||
| Common Stock [0.0%] | ||||||||
| Broadcasting & Cable [0.0%] | ||||||||
Olympus * (C) (F) | 8,500 | 10 | ||||||
| Building & Construction [0.0%] | ||||||||
Dayton Superior * (C) (F) | 149 | — | ||||||
Total Common Stock (Cost $10) | 10 | |||||||
| Warrant [0.0%] | ||||||||
| Alion Science & Technology, | ||||||||
Expires 03/15/17 * (C) (F) | 280 | — | ||||||
Total Warrant (Cost $0) | — | |||||||
| Cash Equivalents [0.7%] | ||||||||
| Fidelity Institutional Domestic Money Market Portfolio, Cl I, 0.220%** | 209,027 | 209 | ||||||
| SEI Daily Income Trust, Prime Obligation Fund, Cl A, 0.150%** | 209,027 | 209 | ||||||
Total Cash Equivalents (Cost $418) | 418 | |||||||
Total Investments [97.7%] (Cost $55,567) | $ | 56,504 | ||||||
Percentages are based on Net Assets of $57,855 ($ Thousands).
| * | Non-income producing security. |
| ** | The rate reported is the 7-day current yield as of September 30, 2010. |
| (A) | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration normally to qualified institutions. On September 30, 2010, the value of these securities amounted to $24,811 (000), representing 42.9% of the net assets of the Fund. |
| (B) | Floating Rate Security — The rate reflected is the rate in effect on September 30, 2010. |
| (C) | Security is considered illiquid. |
| (D) | In default on interest payments. Rate shown represents the last coupon rate prior to default. |
| (E) | Step Bond — The rate reflected is the rate in effect on September 30, 2010. The coupon on a step bond changes on a specific date. |
| (F) | Security is fair valued. |
Cl — Class
MTN — Medium Term Note
Ser — Series
Amounts designated as “—” are either $0 or have been rounded to $0.
The following is a summary of the inputs used as of September 30, 2010 in valuing the Fund’s investments carried at value ($ Thousands):
| Investments in Securities | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Corporate Bonds | $ | — | $ | 55,727 | $ | 278 | $ | 56,005 | ||||||||
| Convertible Bond | — | 71 | — | 71 | ||||||||||||
| Common Stock | — | — | 10 | 10 | ||||||||||||
| Cash Equivalents | 418 | — | — | 418 | ||||||||||||
| Total Investments in Securities | $ | 418 | $ | 55,798 | $ | 288 | $ | 56,504 | ||||||||
The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining value:
Investments in Corporate Bonds ($Thousands) | Investments in Common Stock ($Thousands) | |||||||
| Beginning balance as of October 1, 2009 | $ | 193 | $ | 9 | ||||
| Accrued discounts/premiums | — | — | ||||||
| Realized gain/(loss) | — | — | ||||||
| Change in unrealized appreciation/(depreciation) | 85 | 1 | ||||||
| Net purchases/sales | — | — | ||||||
| Net transfer in and/or out of Level 3 | — | — | ||||||
| Ending balance as of September 30, 2010 | $ | 278 | $ | 10 | ||||
| Changes in unrealized gains (losses) included in earnings related to securities held at reporting date | $ | (124 | ) | $ | — | |||
For the year ended September 30, 2010, there have been no significant transfers between Level 1 and Level 2 assets and liabilities.
For more information on valuation inputs, see Note 2 — Significant Accounting Policies in the Notes to Financial Statements.
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 51
| schedule of investments |
September 30, 2010 |
| Large Cap Value Equity Fund |
Description | Shares | Value (000) | ||||||
| Common Stock [95.4%] | ||||||||
| Aerospace & Defense [1.6%] | ||||||||
| General Dynamics | 9,000 | $ | 565 | |||||
| L-3 Communications Holdings, Cl 3 | 9,700 | 701 | ||||||
| Lockheed Martin | 2,200 | 157 | ||||||
| Northrop Grumman | 4,500 | 273 | ||||||
Total Aerospace & Defense | 1,696 | |||||||
| Air Freight & Logistics [1.4%] | ||||||||
FedEx | 17,100 | 1,462 | ||||||
| Automobiles [0.1%] | ||||||||
Ford Motor * | 10,000 | 122 | ||||||
| Beverages [1.4%] | ||||||||
| Coca-Cola | 12,700 | 744 | ||||||
| Molson Coors Brewing, Cl B | 15,400 | 727 | ||||||
Total Beverages | 1,471 | |||||||
| Biotechnology [0.9%] | ||||||||
| Genzyme * | 10,000 | 708 | ||||||
| Gilead Sciences * | 7,000 | 249 | ||||||
Total Biotechnology | 957 | |||||||
| Capital Markets [4.6%] | ||||||||
| Bank of New York Mellon | 36,900 | 964 | ||||||
| Goldman Sachs Group | 11,200 | 1,619 | ||||||
| Morgan Stanley | 35,700 | 881 | ||||||
| State Street | 34,800 | 1,311 | ||||||
Total Capital Markets | 4,775 | |||||||
Description | Shares | Value (000) |
| Chemicals [0.9%] | ||||||||
Dow Chemical | 36,000 | $ | 989 | |||||
| Commercial Banks [3.8%] | ||||||||
| BB&T | 21,100 | 508 | ||||||
| US Bancorp | 49,000 | 1,060 | ||||||
| Wells Fargo | 94,960 | 2,386 | ||||||
Total Commercial Banks | 3,954 | |||||||
| Commercial Services & Supplies [1.1%] | ||||||||
| Iron Mountain | 30,500 | 682 | ||||||
| Waste Management | 14,000 | 500 | ||||||
Total Commercial Services & Supplies | 1,182 | |||||||
| Computers & Peripherals [0.3%] | ||||||||
Hewlett-Packard | 6,300 | 265 | ||||||
| Construction & Engineering [0.5%] | ||||||||
Fluor | 10,100 | 500 | ||||||
| Containers & Packaging [1.4%] | ||||||||
| Ball | 13,200 | 777 | ||||||
| Sealed Air | 29,000 | 652 | ||||||
Total Containers & Packaging | 1,429 | |||||||
| Diversified Financial Services [5.4%] | ||||||||
| Bank of America | 160,000 | 2,098 | ||||||
| JPMorgan Chase | 83,200 | 3,167 | ||||||
| Nasdaq OMX Group * | 23,000 | 447 | ||||||
Total Diversified Financial Services | 5,712 | |||||||
| Diversified Telecommunication Services [4.2%] | ||||||||
| AT&T | 76,617 | 2,191 | ||||||
| Verizon Communications | 67,500 | 2,200 | ||||||
Total Diversified Telecommunication Services | 4,391 | |||||||
| Electric Utilities [4.6%] | ||||||||
| Allegheny Energy | 20,500 | 503 | ||||||
| American Electric Power | 13,000 | 471 | ||||||
| Edison International | 32,600 | 1,121 | ||||||
| Entergy | 6,800 | 520 | ||||||
| Exelon | 12,000 | 511 | ||||||
| FirstEnergy | 12,600 | 486 | ||||||
| NextEra Energy | 10,200 | 555 | ||||||
| PPL | 24,100 | 656 | ||||||
Total Electric Utilities | 4,823 | |||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 52
| schedule of investments |
September 30, 2010 |
Large Cap Value Equity Fund (continued) |
Description | Shares | Value (000) |
| Electrical Equipment [0.5%] | ||||||||
Emerson Electric | 10,200 | $ | 537 | |||||
| Electronic Equipment [0.6%] | ||||||||
Corning | 37,100 | 678 | ||||||
| Energy Equipment & Services [1.1%] | ||||||||
National Oilwell Varco | 26,200 | 1,165 | ||||||
| Food & Staples Retailing [5.5%] | ||||||||
| CVS | 41,400 | 1,303 | ||||||
| Kroger | 30,800 | 667 | ||||||
| Safeway | 46,400 | 982 | ||||||
| Sysco | 20,000 | 570 | ||||||
| Wal-Mart Stores | 42,600 | 2,280 | ||||||
Total Food & Staples Retailing | 5,802 | |||||||
| Food Products [2.5%] | ||||||||
| Archer-Daniels-Midland | 22,400 | 715 | ||||||
| ConAgra Foods | 23,500 | 516 | ||||||
| Kraft Foods, Cl A | 26,000 | 802 | ||||||
| Sara Lee | 42,000 | 564 | ||||||
Total Food Products | 2,597 | |||||||
| Health Care Equipment & Supplies [1.4%] | ||||||||
| Baxter International | 12,500 | 596 | ||||||
| Becton Dickinson | 5,500 | 408 | ||||||
| Covidien | 12,800 | 514 | ||||||
Total Health Care Equipment & Supplies | 1,518 | |||||||
| Health Care Providers & Services [2.9%] | ||||||||
| Aetna | 34,200 | 1,081 | ||||||
| Cigna | 18,500 | 662 | ||||||
| McKesson | 15,000 | 927 | ||||||
| UnitedHealth Group | 9,500 | 333 | ||||||
Total Health Care Providers & Services | 3,003 | |||||||
| Hotels, Restaurants & Leisure [1.2%] | ||||||||
| Carnival | 14,300 | 547 | ||||||
| Darden Restaurants | 17,000 | 727 | ||||||
Total Hotels, Restaurants & Leisure | 1,274 | |||||||
| Household Durables [1.4%] | ||||||||
| Fortune Brands | 14,000 | 689 | ||||||
Description | Shares | Value (000) |
| Whirlpool | 9,000 | $ | 729 | |||||
Total Household Durables | 1,418 | |||||||
| Household Products [2.0%] | ||||||||
Procter & Gamble | 34,700 | 2,081 | ||||||
| Industrial Conglomerates [2.0%] | ||||||||
| General Electric | 95,500 | 1,552 | ||||||
| Tyco International | 13,600 | 499 | ||||||
Total Industrial Conglomerates | 2,051 | |||||||
| Insurance [8.6%] | ||||||||
| ACE | 24,600 | 1,433 | ||||||
| Aflac | 16,000 | 827 | ||||||
| Assurant | 14,800 | 602 | ||||||
| Berkshire Hathaway, Cl B * | 17,800 | 1,472 | ||||||
| Chubb | 25,000 | 1,425 | ||||||
| Marsh & McLennan | 48,500 | 1,170 | ||||||
| Travelers | 27,000 | 1,407 | ||||||
| Unum Group | 30,000 | 664 | ||||||
Total Insurance | 9,000 | |||||||
| IT Services [1.0%] | ||||||||
IBM | 7,600 | 1,019 | ||||||
| Leisure Equipment & Products [0.6%] | ||||||||
Mattel | 29,000 | 680 | ||||||
| Machinery [1.1%] | ||||||||
| AGCO * | 16,500 | 644 | ||||||
| Parker Hannifin | 7,700 | 539 | ||||||
Total Machinery | 1,183 | |||||||
| Media [3.9%] | ||||||||
| CBS, Cl B | 31,250 | 496 | ||||||
| Comcast, Cl A | 72,500 | 1,311 | ||||||
| Omnicom Group | 14,700 | 580 | ||||||
| Time Warner | 27,933 | 856 | ||||||
| Viacom, Cl B | 23,000 | 832 | ||||||
Total Media | 4,075 | |||||||
| Multiline Retail [1.4%] | ||||||||
Target | 28,400 | 1,518 | ||||||
| Multi-Utilities [1.5%] | ||||||||
| Consolidated Edison | 7,000 | 337 | ||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 53
| schedule of investments |
September 30, 2010 |
Large Cap Value Equity Fund (concluded) |
Description | Shares | Value (000) |
| Public Service Enterprise Group | 22,100 | $ | 731 | |||||
| Sempra Energy | 10,000 | 538 | ||||||
Total Multi-Utilities | 1,606 | |||||||
| Oil, Gas & Consumable Fuels [9.0%] | ||||||||
| Apache | 6,000 | 587 | ||||||
| Chevron | 38,240 | 3,099 | ||||||
| ConocoPhillips | 31,580 | 1,814 | ||||||
| Exxon Mobil | 46,000 | 2,842 | ||||||
| Occidental Petroleum | 13,600 | 1,065 | ||||||
Total Oil, Gas & Consumable Fuels | 9,407 | |||||||
| Paper & Forest Products [0.5%] | ||||||||
MeadWestvaco | 20,400 | 497 | ||||||
| Pharmaceuticals [5.2%] | ||||||||
| Abbott Laboratories | 21,700 | 1,134 | ||||||
| Bristol-Myers Squibb | 41,000 | 1,112 | ||||||
| Eli Lilly | 16,000 | 584 | ||||||
| Merck | 23,100 | 850 | ||||||
| Pfizer | 104,000 | 1,786 | ||||||
Total Pharmaceuticals | 5,466 | |||||||
| Real Estate Management & Development [0.2%] | ||||||||
Brookfield Asset Management, Cl A | 7,800 | 221 | ||||||
| Road & Rail [3.1%] | ||||||||
| CSX | 24,400 | 1,350 | ||||||
| Norfolk Southern | 12,600 | 750 | ||||||
| Union Pacific | 14,500 | 1,186 | ||||||
Total Road & Rail | 3,286 | |||||||
| Semiconductors & Semiconductor Equipment [2.3%] | ||||||||
| Intel | 63,300 | 1,217 | ||||||
| Texas Instruments | 44,900 | 1,219 | ||||||
Total Semiconductors & Semiconductor Equipment | 2,436 | |||||||
| Software [1.3%] | ||||||||
| Microsoft | 46,500 | 1,139 | ||||||
| Oracle | 8,000 | 215 | ||||||
Total Software | 1,354 | |||||||
Description | Shares | Value (000) |
| Specialty Retail [1.0%] | ||||||||
| Best Buy | 12,200 | $ | 498 | |||||
| Lowe's | 22,500 | 502 | ||||||
Total Specialty Retail | 1,000 | |||||||
| Textiles, Apparel & Luxury Goods [1.4%] | ||||||||
Nike, Cl B | 17,900 | 1,435 | ||||||
Total Common Stock (Cost $100,853) | 100,035 | |||||||
| Cash Equivalents [4.6%] | ||||||||
| Fidelity Institutional Domestic Money Market Portfolio, Cl I, 0.220%** | 2,416,257 | 2,416 | ||||||
| Goldman Sachs Financial Square Funds - Government Fund, 0.090%** | 2,353,488 | 2,354 | ||||||
Total Cash Equivalents (Cost $4,770) | 4,770 | |||||||
Total Investments [100.0%] (Cost $105,623) | $ | 104,805 | ||||||
Percentages are based on Net Assets of $104,814 ($ Thousands).
| * | Non-income producing security. |
| ** | The rate reported is the 7-day current yield as of September 30, 2010. |
Cl — Class
As of September 30, 2010, all of the Fund's investments are Level 1, in accordance with ASC 820.
For the year ended September 30, 2010, there have been no significant transfers between Level 1 and Level 2 assets and liabilities.
For more information on valuation inputs, see Note 2 — Significant Accounting Policies in the Notes to Financial Statements.
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 54
| schedule of investments |
September 30, 2010 |
| Large Cap Growth Equity Fund |
Description | Shares | Value (000) | ||||||
| Common Stock [97.3%] | ||||||||
| Aerospace & Defense [0.9%] | ||||||||
Precision Castparts | 2,800 | $ | 357 | |||||
| Air Freight & Logistics [0.9%] | ||||||||
Expeditors International of Washington | 7,700 | 356 | ||||||
| Beverages [3.5%] | ||||||||
| Dr Pepper Snapple Group | 11,100 | 394 | ||||||
| Fomento Economico Mexicano ADR | 11,400 | 578 | ||||||
| PepsiCo | 6,800 | 452 | ||||||
Total Beverages | 1,424 | |||||||
| Biotechnology [3.9%] | ||||||||
| Celgene * | 10,900 | 628 | ||||||
| Genzyme * | 8,000 | 566 | ||||||
| Gilead Sciences * | 11,400 | 406 | ||||||
Total Biotechnology | 1,600 | |||||||
| Capital Markets [1.9%] | ||||||||
| Franklin Resources | 3,800 | 406 | ||||||
| T Rowe Price Group | 7,100 | 356 | ||||||
Total Capital Markets | 762 | |||||||
| Chemicals [0.8%] | ||||||||
Air Products & Chemicals | 3,700 | 307 | ||||||
| Commercial Services & Supplies [1.0%] | ||||||||
Republic Services, Cl A | 13,600 | 415 | ||||||
Description | Shares | Value (000) |
| Communications Equipment [4.8%] | ||||||||
| Cisco Systems * | 25,000 | $ | 547 | |||||
| Juniper Networks * | 18,700 | 568 | ||||||
| Qualcomm | 18,000 | 812 | ||||||
Total Communications Equipment | 1,927 | |||||||
| Computers & Peripherals [6.5%] | ||||||||
| Apple * | 6,700 | 1,901 | ||||||
| EMC * | 25,600 | 520 | ||||||
| Hewlett-Packard | 5,400 | 227 | ||||||
Total Computers & Peripherals | 2,648 | |||||||
| Construction & Engineering [0.9%] | ||||||||
Jacobs Engineering Group * | 8,900 | 344 | ||||||
| Diversified Financial Services [1.5%] | ||||||||
| CME Group, Cl A | 1,200 | 312 | ||||||
| JPMorgan Chase | 8,300 | 316 | ||||||
Total Diversified Financial Services | 628 | |||||||
| Diversified Telecommunication Services [1.9%] | ||||||||
AT&T | 27,000 | 772 | ||||||
| Electronic Equipment [1.6%] | ||||||||
Corning | 34,800 | 636 | ||||||
| Energy Equipment & Services [1.7%] | ||||||||
Schlumberger | 11,300 | 696 | ||||||
| Food & Staples Retailing [2.7%] | ||||||||
| CVS | 25,300 | 796 | ||||||
| Wal-Mart Stores | 5,900 | 316 | ||||||
Total Food & Staples Retailing | 1,112 | |||||||
| Health Care Equipment & Supplies [2.2%] | ||||||||
| Baxter International | 6,000 | 286 | ||||||
| Intuitive Surgical * | 800 | 227 | ||||||
| Stryker | 7,500 | 376 | ||||||
Total Health Care Equipment & Supplies | 889 | |||||||
| Health Care Providers & Services [1.1%] | ||||||||
UnitedHealth Group | 13,400 | 471 | ||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 55
| schedule of investments |
September 30, 2010 |
Large Cap Growth Equity Fund (continued) |
Description | Shares | Value (000) |
| Hotels, Restaurants & Leisure [1.5%] | ||||||||
Starbucks | 24,100 | $ | 616 | |||||
| Household Products [2.5%] | ||||||||
| Colgate-Palmolive | 8,700 | 669 | ||||||
| Procter & Gamble | 5,400 | 324 | ||||||
Total Household Products | 993 | |||||||
| Independent Power Producers & Energy Traders [0.9%] | ||||||||
AES * | 32,700 | 371 | ||||||
| Insurance [2.1%] | ||||||||
| ACE | 5,900 | 343 | ||||||
| Prudential Financial | 9,500 | 515 | ||||||
Total Insurance | 858 | |||||||
| Internet & Catalog Retail [2.0%] | ||||||||
| Amazon.com * | 3,400 | 534 | ||||||
| priceline.com * | 800 | 279 | ||||||
Total Internet & Catalog Retail | 813 | |||||||
| Internet Software & Services [1.0%] | ||||||||
Google, Cl A * | 800 | 421 | ||||||
| IT Services [5.9%] | ||||||||
| Cognizant Technology Solutions, Cl A * | 6,700 | 432 | ||||||
| IBM | 10,200 | 1,369 | ||||||
| Mastercard, Cl A | 1,500 | 336 | ||||||
| Visa, Cl A | 3,300 | 245 | ||||||
Total IT Services | 2,382 | |||||||
| Life Sciences Tools & Services [2.0%] | ||||||||
| Illumina * | 8,900 | 438 | ||||||
| Life Technologies * | 7,700 | 359 | ||||||
Total Life Sciences Tools & Services | 797 | |||||||
| Machinery [5.5%] | ||||||||
| Caterpillar | 8,100 | 637 | ||||||
| Cummins | 5,800 | 526 | ||||||
| Danaher | 8,700 | 353 | ||||||
| Illinois Tool Works | 15,500 | 729 | ||||||
Total Machinery | 2,245 | |||||||
Description | Shares | Value (000) |
| Media [1.5%] | ||||||||
DIRECTV, Cl A * | 14,700 | $ | 612 | |||||
| Metals & Mining [3.7%] | ||||||||
| Allegheny Technologies | 6,900 | 321 | ||||||
| Freeport-McMoRan Copper & Gold | 6,000 | 512 | ||||||
| Newmont Mining | 5,000 | 314 | ||||||
| Worthington Industries | 23,300 | 350 | ||||||
Total Metals & Mining | 1,497 | |||||||
| Oil, Gas & Consumable Fuels [9.3%] | ||||||||
| Chevron | 8,300 | 673 | ||||||
| ConocoPhillips | 8,400 | 483 | ||||||
| EOG Resources | 3,300 | 307 | ||||||
| Equities | 4,500 | 162 | ||||||
| Exxon Mobil | 19,600 | 1,211 | ||||||
| Murphy Oil | 6,200 | 384 | ||||||
| Occidental Petroleum | 7,000 | 548 | ||||||
Total Oil, Gas & Consumable Fuels | 3,768 | |||||||
| Personal Products [1.1%] | ||||||||
Avon Products | 14,400 | 462 | ||||||
| Pharmaceuticals [3.2%] | ||||||||
| Abbott Laboratories | 8,700 | 454 | ||||||
| Allergan | 5,600 | 373 | ||||||
| Mylan * | 24,200 | 455 | ||||||
Total Pharmaceuticals | 1,282 | |||||||
| Real Estate Investment Trusts [1.5%] | ||||||||
ProLogis | 51,000 | 601 | ||||||
| Semiconductors & Semiconductor Equipment [4.5%] | ||||||||
| Cree * | 5,000 | 271 | ||||||
| Intel | 18,100 | 348 | ||||||
| Lam Research * | 6,200 | 259 | ||||||
| Novellus Systems * | 9,200 | 245 | ||||||
| Texas Instruments | 14,400 | 391 | ||||||
| Xilinx | 12,400 | 330 | ||||||
Total Semiconductors & Semiconductor Equipment | 1,844 | |||||||
| Software [6.5%] | ||||||||
| Microsoft | 60,480 | 1,481 | ||||||
| Oracle | 43,265 | 1,162 | ||||||
Total Software | 2,643 | |||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 56
| schedule of investments |
September 30, 2010 |
Large Cap Growth Equity Fund (concluded) |
Description | Shares | Value (000) |
| Specialty Retail [2.9%] | ||||||||
| Autozone * | 1,800 | $ | 412 | |||||
| Best Buy | 11,400 | 465 | ||||||
| TJX | 6,200 | 277 | ||||||
Total Specialty Retail | 1,154 | |||||||
| Textiles, Apparel & Luxury Goods [1.9%] | ||||||||
| Coach | 8,900 | 382 | ||||||
| Nike, Cl B | 5,000 | 401 | ||||||
Total Textiles, Apparel & Luxury Goods | 783 | |||||||
Total Common Stock (Cost $34,646) | 39,486 | |||||||
| Cash Equivalents [3.2%] | ||||||||
| Fidelity Institutional Domestic Money Market Portfolio, Cl I, 0.220%** | 673,172 | 673 | ||||||
| Goldman Sachs Financial Square Funds - Government Fund, 0.090%** | 636,241 | 636 | ||||||
Total Cash Equivalents (Cost $1,309) | 1,309 | |||||||
Total Investments [100.5%] (Cost $35,955) | $ | 40,795 | ||||||
| Percentages are based on Net Assets of $40,588 ($ Thousands). |
| * | Non-income producing security. |
| ** | The rate reported is the 7-day current yield as of September 30, 2010. |
| ADR — American Depositary Receipt |
| Cl — Class |
As of September 30, 2010, all of the Fund's investments are Level 1, in accordance with ASC 820.
For the year ended September 30, 2010, there have been no significant transfers between Level 1 and Level 2 assets and liabilities.
For more information on valuation inputs, see Note 2 — Significant Accounting Policies in the Notes to Financial Statements.
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 57
| schedule of investments |
September 30, 2010 |
| RCB Small Cap Value Fund |
Description | Shares | Value (000) | ||||||
| Common Stock [95.4%] | ||||||||
| Capital Markets [2.5%] | ||||||||
Duff & Phelps, Cl A | 45,200 | $ | 609 | |||||
| Chemicals [5.6%] | ||||||||
| Nalco Holding | 22,500 | 567 | ||||||
| Spartech * | 98,200 | 806 | ||||||
Total Chemicals | 1,373 | |||||||
| Commercial Banks [2.0%] | ||||||||
TCF Financial | 30,300 | 491 | ||||||
| Construction Materials [1.6%] | ||||||||
Eagle Materials | 17,000 | 403 | ||||||
| Diversified Consumer Services [3.8%] | ||||||||
Coinstar * | 21,900 | 942 | ||||||
| Food Products [4.1%] | ||||||||
Ralcorp Holdings * | 17,200 | 1,006 | ||||||
| Health Care Equipment & Supplies [4.1%] | ||||||||
Teleflex | 17,900 | 1,016 | ||||||
| Hotels, Restaurants & Leisure [4.7%] | ||||||||
Wendy's/Arby's Group, Cl A | 252,939 | 1,146 | ||||||
| Household Products [7.1%] | ||||||||
| Central Garden & Pet, Cl A * | 120,000 | 1,243 | ||||||
| Scotts Miracle-Gro, Cl A | 9,600 | 497 | ||||||
Total Household Products | 1,740 | |||||||
Description | Shares | Value (000) |
| Insurance [18.3%] | ||||||||
| Alleghany * | 3,313 | $ | 1,004 | |||||
| First American Financial | 36,600 | 547 | ||||||
| Hilltop Holdings * | 49,200 | 471 | ||||||
| Symetra Financial | 90,400 | 946 | ||||||
| White Mountains Insurance Group | 5,000 | 1,542 | ||||||
Total Insurance | 4,510 | |||||||
| Internet & Catalog Retail [2.4%] | ||||||||
HSN * | 19,700 | 589 | ||||||
| Internet Software & Services [3.6%] | ||||||||
United Online | 155,100 | 887 | ||||||
| IT Services [6.8%] | ||||||||
| CoreLogic | 30,800 | 590 | ||||||
| Global Cash Access Holdings * | 265,000 | 1,082 | ||||||
Total IT Services | 1,672 | |||||||
| Life Sciences Tools & Services [4.1%] | ||||||||
PerkinElmer | 43,600 | 1,009 | ||||||
| Machinery [6.8%] | ||||||||
| Altra Holdings * | 40,200 | 592 | ||||||
| Crane | 14,100 | 535 | ||||||
| IDEX | 15,400 | 547 | ||||||
Total Machinery | 1,674 | |||||||
| Media [5.1%] | ||||||||
| Liberty Media - Capital, Ser A * | 10,402 | 541 | ||||||
| Washington Post, Cl B | 1,800 | 719 | ||||||
Total Media | 1,260 | |||||||
| Professional Services [2.3%] | ||||||||
GP Strategies * | 62,600 | 569 | ||||||
| Real Estate Investment Trusts [5.3%] | ||||||||
Chimera Investment | 329,700 | 1,302 | ||||||
| Software [2.1%] | ||||||||
Fair Isaac | 20,800 | 513 | ||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 58
| schedule of investments |
September 30, 2010 |
RCB Small Cap Value Fund (concluded) |
Description | Shares/ Face Amount (000) | Value (000) | ||||||
| Specialty Retail [3.1%] | ||||||||
| Coldwater Creek * | 97,100 | $ | 512 | |||||
| Syms * | 30,986 | 237 | ||||||
Total Specialty Retail | 749 | |||||||
Total Common Stock (Cost $20,120) | 23,460 | |||||||
| Repurchase Agreement(A) [4.5%] | ||||||||
| Morgan Stanley | ||||||||
| 0.080%, dated 09/30/10, repurchased on 10/01/10, repurchase price $1,107,373 (collateralized by a U.S. Treasury Note, par value $889,475, 2.000%, 01/15/14; with total market value $1,129,524) | $ | 1,107 | 1,107 | |||||
Total Repurchase Agreement (Cost $1,107) | 1,107 | |||||||
Total Investments [99.9%] (Cost $21,227) | $ | 24,567 | ||||||
| Percentages are based on Net Assets of $24,599 ($ Thousands). |
| * | Non-income producing security. |
| (A) | Tri-Party Repurchase Agreement. |
| Cl — Class |
| Ser — Series |
The following is a summary of the inputs used as of September 30, 2010 in valuing the Fund’s investments carried at value ($ Thousands):
| Investments in Securities | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stock | $ | 23,460 | $ | — | $ | — | $ | 23,460 | ||||||||
| Repurchase Agreement | — | 1,107 | — | 1,107 | ||||||||||||
| Total Investments in Securities | $ | 23,460 | $ | 1,107 | $ | — | $ | 24,567 | ||||||||
For the year ended September 30, 2010, there have been no significant transfers between Level 1 and Level 2 assets and liabilities.
For more information on valuation inputs, see Note 2 — Significant Accounting Policies in the Notes to Financial Statements.
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 59
| schedule of investments |
September 30, 2010 |
| Multi-Asset Fund |
Description | Shares | Value (000) | ||||||
| Exchange Traded Funds [49.5%] | ||||||||
| iShares MSCI EAFE Index Fund | 13,145 | $ | 722 | |||||
| iShares S&P MidCap 400 Index Fund | 37,926 | 3,037 | ||||||
| SPDR Barclays Capital High Yield Bond Fund | 52,863 | 2,115 | ||||||
| SPDR S&P 500 Fund | 56,856 | 6,489 | ||||||
| Vanguard Emerging Markets | 45,250 | 2,054 | ||||||
| Vanguard Small Cap Value | 32,520 | 2,063 | ||||||
Total Exchange Traded Funds (Cost $14,842) | 16,480 | |||||||
| Affiliated Registered Investment Companies [13.7%] | ||||||||
| CNI Corporate Bond Fund, Institutional Class | 200,598 | 2,183 | ||||||
| CNI Government Bond Fund, Institutional Class | 108,103 | 1,152 | ||||||
| CNI High Yield Bond Fund, Institutional Class | 148,133 | 1,231 | ||||||
Total Affiliated Registered Investment Companies (Cost $4,397) | 4,566 | |||||||
| Registered Investment Companies [21.0%] | ||||||||
| Alpine International Real Estate Equity Fund | 45,008 | 1,096 | ||||||
| Cohen & Steers International Realty Fund, Inc. | 116,307 | 1,309 | ||||||
| Oppenheimer International Bond Fund, Class A | 331,458 | 2,254 | ||||||
| PIMCO Emerging Local Bond Fund | 113,284 | 1,253 | ||||||
| PIMCO Emerging Markets Bond Fund, Institutional Class | 92,155 | 1,052 | ||||||
Total Registered Investment Companies (Cost $6,384) | 6,964 | |||||||
| Description | Shares/Face Amount (000) | Value (000) | ||||||
| Cash Equivalent [1.6%] | ||||||||
| Goldman Sachs Financial Square Funds - Government Fund, 0.090%* | 522,590 | $ | 523 | |||||
Total Cash Equivalent (Cost $523) | 523 | |||||||
| Repurchase Agreement(A) [13.5%] | ||||||||
| Barclays | ||||||||
| 0.200%, dated 09/30/10, repurchased on 10/01/10, repurchase price $4,500,025 (collateralized by a U.S. Treasury Note, par value $4,206,200, 3.250%, 03/31/17; with total market value $4,590,016) | $ | 4,500 | 4,500 | |||||
Total Repurchase Agreement (Cost $4,500) | 4,500 | |||||||
Total Investments [99.3%] (Cost $30,646) | $ | 33,033 | ||||||
| Percentages are based on Net Assets of $33,277 ($ Thousands). |
| * | The rate reported is the 7-day current yield as of September 30, 2010. |
| (A) | Tri-Party Repurchase Agreement. |
| EAFE — Europe Australiasia and the Far East |
| MSCI — Morgan Stanley Capital International |
| SPDR — Standard & Poor’s Depositary Receipts |
The following is a summary of the inputs used as of September 30, 2010 in valuing the Fund’s investments carried at value ($ Thousands):
| Investments in Securities | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Exchange Traded Funds | $ | 16,480 | $ | — | $ | — | $ | 16,480 | ||||||||
| Affiliated Registered Investment Companies | 4,566 | — | — | 4,566 | ||||||||||||
| Registered Investment Companies | 6,964 | — | — | 6,964 | ||||||||||||
| Cash Equivalent | 523 | — | — | 523 | ||||||||||||
| Repurchase Agreement | — | 4,500 | — | 4,500 | ||||||||||||
| Total Investments in Securities | $ | 28,533 | $ | 4,500 | $ | — | $ | 33,033 | ||||||||
For the year ended September 30, 2010, there have been no significant transfers between Level 1 and Level 2 assets and liabilities.
For more information on valuation inputs, see Note 2 — Significant Accounting Policies in the Notes to Financial Statements.
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 60
| schedule of investments |
September 30, 2010 |
| Limited Maturity Fixed Income Fund |
| Description | Face Amount (000) | Value (000) |
| Corporate Bonds [39.3%] | ||||||||
| Aerospace & Defense [1.7%] | ||||||||
| Boeing | ||||||||
5.000%, 03/15/14 | $ | 625 | $ | 703 | ||||
| Banks [9.9%] | ||||||||
| ANZ National International | ||||||||
| 6.200%, 07/19/13 | 625 | 695 | ||||||
| Bank of America | ||||||||
| 4.875%, 01/15/13 | 150 | 159 | ||||||
| 4.375%, 12/01/10 | 60 | 60 | ||||||
| Bank of New York Mellon, MTN | ||||||||
| 5.000%, 03/23/12 | 150 | 159 | ||||||
| Barclays Bank, MTN | ||||||||
| 4.500%, 03/10/17(A) | 600 | 588 | ||||||
| Citibank | ||||||||
| 1.500%, 07/12/11 | 300 | 303 | ||||||
| Citigroup | ||||||||
| 6.375%, 08/12/14 | 600 | 666 | ||||||
| JPMorgan Chase, MTN | ||||||||
| 5.600%, 06/01/11 | 150 | 155 | ||||||
| UBS | ||||||||
| 2.250%, 08/12/13 | 600 | 606 | ||||||
| Wachovia, MTN | ||||||||
| 5.500%, 05/01/13 | 625 | 688 | ||||||
| Wells Fargo | ||||||||
| 5.300%, 08/26/11 | 150 | 157 | ||||||
Total Banks | 4,236 | |||||||
| Computer System Design & Services [3.6%] | ||||||||
| Hewlett-Packard | ||||||||
| 6.125%, 03/01/14 | 625 | 722 | ||||||
| 4.250%, 02/24/12 | 150 | 157 | ||||||
| 2.950%, 08/15/12 | 120 | 125 | ||||||
| IBM | ||||||||
| 4.950%, 03/22/11 | 190 | 194 | ||||||
| 4.750%, 11/29/12 | 165 | 179 | ||||||
| 2.100%, 05/06/13 | 140 | 145 | ||||||
Total Computer System Design & Services | 1,522 | |||||||
| Description | Face Amount (000) | Value (000) |
| Drugs [0.8%] | ||||||||
| Abbott Laboratories | ||||||||
| 5.600%, 05/15/11 | $ | 145 | $ | 150 | ||||
| Pfizer | ||||||||
| 4.450%, 03/15/12 | 170 | 179 | ||||||
Total Drugs | 329 | |||||||
| Financial Services [10.2%] | ||||||||
| Boeing Capital | ||||||||
| 6.500%, 02/15/12 | 150 | 162 | ||||||
| 6.100%, 03/01/11 | 250 | 256 | ||||||
| Caterpillar Financial Services, MTN | ||||||||
| 5.750%, 02/15/12 | 150 | 160 | ||||||
| 5.050%, 12/01/10 | 200 | 201 | ||||||
| CME Group | ||||||||
| 5.400%, 08/01/13 | 625 | 699 | ||||||
| Countrywide Financial, MTN | ||||||||
| 5.800%, 06/07/12 | 625 | 664 | ||||||
| General Electric Capital, MTN | ||||||||
| 4.875%, 10/21/10 | 150 | 150 | ||||||
| 2.000%, 09/28/12 | 535 | 550 | ||||||
| General Electric Capital, Ser A, MTN | ||||||||
| 6.000%, 06/15/12 | 625 | 674 | ||||||
| HSBC Finance | ||||||||
| 5.500%, 01/19/16 | 600 | 659 | ||||||
| John Deere Capital, MTN | ||||||||
| 5.250%, 10/01/12 | 150 | 163 | ||||||
Total Financial Services | 4,338 | |||||||
| Food, Beverage & Tobacco [1.6%] | ||||||||
| Campbell Soup | ||||||||
| 6.750%, 02/15/11 | 150 | 154 | ||||||
| Coca-Cola | ||||||||
| 5.750%, 03/15/11 | 145 | 148 | ||||||
| Coca-Cola Enterprises | ||||||||
| 3.750%, 03/01/12 | 170 | 177 | ||||||
| PepsiCo | ||||||||
| 5.150%, 05/15/12 | 60 | 64 | ||||||
| Unilever Capital | ||||||||
| 7.125%, 11/01/10 | 150 | 151 | ||||||
Total Food, Beverage & Tobacco | 694 | |||||||
| Foreign Governments [0.8%] | ||||||||
| Province of Ontario Canada | ||||||||
| 4.100%, 06/16/14 | 180 | 198 | ||||||
| 1.875%, 11/19/12 | 125 | 128 | ||||||
Total Foreign Governments | 326 | |||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 61
| schedule of investments |
September 30, 2010 |
Limited Maturity Fixed Income Fund (continued) |
| Description | Face Amount (000) | Value (000) |
| Investment Banker/Broker Dealer [7.8%] | ||||||||
| Bear Stearns, MTN | ||||||||
| 6.950%, 08/10/12 | $ | 625 | $ | 691 | ||||
| Citigroup Funding | ||||||||
| 2.250%, 12/10/12 | 1,000 | 1,034 | ||||||
| Goldman Sachs Group | ||||||||
| 6.600%, 01/15/12 | 115 | 123 | ||||||
| Goldman Sachs Group, MTN | ||||||||
| 3.625%, 08/01/12 | 625 | 650 | ||||||
| Morgan Stanley | ||||||||
| 6.600%, 04/01/12 | 150 | 161 | ||||||
| Morgan Stanley, MTN | ||||||||
| 5.625%, 01/09/12 | 600 | 632 | ||||||
Total Investment Banker/Broker Dealer | 3,291 | |||||||
| Multi-Media [0.3%] | ||||||||
| Walt Disney, MTN | ||||||||
5.700%, 07/15/11 | 150 | 157 | ||||||
| Oil, Gas & Consumable Fuels [1.4%] | ||||||||
| Shell International Finance BV | ||||||||
1.875%, 03/25/13 | 600 | 614 | ||||||
| Retail [0.4%] | ||||||||
| Wal-Mart Stores | ||||||||
5.000%, 04/05/12 | 170 | 181 | ||||||
| Telephones & Telecommunications [0.4%] | ||||||||
| AT&T | ||||||||
7.300%, 11/15/11 | 150 | 161 | ||||||
| Transport-Rail [0.4%] | ||||||||
| Canadian National Railway | ||||||||
6.375%, 10/15/11 | 175 | 186 | ||||||
Total Corporate Bonds (Cost $16,182) | 16,738 | |||||||
| U.S. Government Mortgage-Backed Obligations [5.6%] | ||||||||
| FHLMC, Pool G12806 | ||||||||
| 5.500%, 09/01/22 | 233 | 251 | ||||||
| FHLMC, Pool G18247 | ||||||||
| 5.000%, 04/01/23 | 173 | 183 | ||||||
| FHLMC, Pool G18251 | ||||||||
| 5.000%, 05/01/23 | 264 | 280 | ||||||
| FHLMC, Pool G18321 | ||||||||
| 4.500%, 08/01/24 | 140 | 148 | ||||||
| FHLMC, Pool J04241 | ||||||||
| 5.500%, 01/01/22 | 135 | 145 | ||||||
| Description | Face Amount (000) | Value (000) |
| FHLMC, Pool J04459 | ||||||||
| 5.000%, 03/01/22 | $ | 116 | $ | 123 | ||||
| FHLMC, Pool J04508 | ||||||||
| 5.000%, 03/01/22 | 119 | 127 | ||||||
| FHLMC, Pool J07575 | ||||||||
| 5.000%, 04/01/23 | 167 | 177 | ||||||
| FNMA, Pool 541946 | ||||||||
| 7.500%, 07/01/30 | – | 1 | ||||||
| FNMA, Pool 837196 | ||||||||
| 5.500%, 02/01/21 | 325 | 350 | ||||||
| FNMA, Pool 933915 | ||||||||
| 4.500%, 06/01/23 | 307 | 323 | ||||||
| FNMA, Pool 961783 | ||||||||
| 4.500%, 02/01/23 | 263 | 276 | ||||||
Total U.S. Government Mortgage-Backed Obligations (Cost $2,245) | 2,384 | |||||||
| U.S. Government Agency Obligations [32.8%] | ||||||||
| FHLB | ||||||||
| 5.750%, 05/15/12 | 1,000 | 1,086 | ||||||
| 5.375%, 08/19/11 | 1,000 | 1,044 | ||||||
| 1.144%, 10/15/10(B) | 925 | 925 | ||||||
| FHLMC | ||||||||
| 6.000%, 06/15/11 | 600 | 624 | ||||||
| 4.750%, 03/05/12 | 1,000 | 1,062 | ||||||
| 4.375%, 07/17/15 | 1,300 | 1,475 | ||||||
| 2.125%, 09/21/12 | 1,000 | 1,031 | ||||||
| 1.150%, 09/03/13 | 1,000 | 1,001 | ||||||
| FNMA | ||||||||
| 6.125%, 03/15/12 | 600 | 649 | ||||||
| 6.000%, 05/15/11 | 1,000 | 1,035 | ||||||
| 5.375%, 11/15/11 | 1,000 | 1,056 | ||||||
| 5.250%, 08/01/12 | 1,000 | 1,079 | ||||||
| 3.000%, 07/28/14 | 925 | 942 | ||||||
| 2.900%, 04/07/14 | 925 | 936 | ||||||
Total U.S. Government Agency Obligations (Cost $13,794) | 13,945 | |||||||
| U.S. Treasury Obligations [14.4%] | ||||||||
| U.S. Treasury Notes | ||||||||
| 4.250%, 08/15/15 | 3,000 | 3,429 | ||||||
| 4.125%, 08/31/12 | 575 | 616 | ||||||
| 2.375%, 09/30/14 | 1,000 | 1,055 | ||||||
| 1.750%, 11/15/11 | 1,000 | 1,016 | ||||||
Total U.S. Treasury Obligations (Cost $5,864) | 6,116 | |||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 62
| schedule of investments |
September 30, 2010 |
Limited Maturity Fixed Income Fund (concluded) |
| Description | Face Amount (000)/Shares | Value (000) |
| Asset-Backed Securities [1.0%] | ||||||||
| BMW Vehicle Lease Trust, Ser 2009-1, Cl A3 | ||||||||
| 2.910%, 03/15/12 | $ | 136 | $ | 137 | ||||
| Mercedes-Benz Auto Receivables Trust, Ser 2009-1, Cl A4 | ||||||||
| 2.430%, 03/15/16 | 165 | 171 | ||||||
| USAA Auto Owner Trust, Ser 2009-2, Cl A4 | ||||||||
| 2.530%, 07/15/15 | 135 | 140 | ||||||
Total Asset-Backed Securities (Cost $436) | 448 | |||||||
| Cash Equivalent [1.4%] | ||||||||
| AIM STIT-Treasury Portfolio, 0.060%* | 582,522 | 583 | ||||||
Total Cash Equivalent (Cost $583) | 583 | |||||||
Total Investments [94.5%] (Cost $39,104) | $ | 40,214 | ||||||
| Percentages are based on Net Assets of $42,541 ($ Thousands). |
| * | The rate reported is the 7-day current yield as of September 30, 2010. |
| (A) | Floating Rate Security — The rate reflected is the rate in effect on September 30, 2010. |
| (B) | Step Bond — The rate reflected is the rate in effect on September 30, 2010. |
| Cl — Class |
| FHLB — Federal Home Loan Bank |
| FHLMC — Federal Home Loan Mortgage Corporation |
| FNMA — Federal National Mortgage Association |
| MTN — Medium Term Note |
| Ser — Series |
Amounts designated as “—” are either zero shares/$0 or have been rounded to zero shares/$0.
The following is a summary of the inputs used as of September 30, 2010 in valuing the Fund’s investments carried at value ($ Thousands):
| Investments in Securities | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Corporate Bonds | $ | — | $ | 16,738 | $ | — | $ | 16,738 | ||||||||
| U.S. Government Mortgage-Backed Obligations | — | 2,384 | — | 2,384 | ||||||||||||
| U.S. Government Agency Obligations | — | 13,945 | — | 13,945 | ||||||||||||
| U.S. Treasury Obligations | — | 6,116 | — | 6,116 | ||||||||||||
| Asset-Backed Securities | — | 448 | — | 448 | ||||||||||||
| Cash Equivalent | 583 | — | — | 583 | ||||||||||||
| Total Investments in Securities | $ | 583 | $ | 39,631 | $ | — | $ | 40,214 | ||||||||
For the year ended September 30, 2010, there have been no significant transfers between Level 1 and Level 2 assets and liabilities.
For more information on valuation inputs, see Note 2 — Significant Accounting Policies in the Notes to Financial Statements.
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 63
| schedule of investments |
September 30, 2010 |
| Full Maturity Fixed Income Fund |
| Description | Face Amount (000) | Value (000) |
| Corporate Bonds [45.3%] | ||||||||
| Aerospace & Defense [0.6%] | ||||||||
| United Technologies | ||||||||
| 6.125%, 02/01/19 | $ | 100 | $ | 124 | ||||
| 4.500%, 04/15/20 | 155 | 174 | ||||||
Total Aerospace & Defense | 298 | |||||||
| Agriculture [0.2%] | ||||||||
| Bunge NA Finance | ||||||||
5.900%, 04/01/17 | 100 | 108 | ||||||
| Auto/Trk Prts and Equip-Orig [0.2%] | ||||||||
| Johnson Controls | ||||||||
5.500%, 01/15/16 | 100 | 113 | ||||||
| Automotive [0.3%] | ||||||||
| Daimler Finance North America | ||||||||
7.300%, 01/15/12 | 125 | 134 | ||||||
| Banks [9.6%] | ||||||||
| ANZ National Int'l | ||||||||
| 2.375%, 12/21/12(A) | 100 | 101 | ||||||
| Bank of America | ||||||||
| 10.200%, 07/15/15 | 100 | 124 | ||||||
| Bank of America, MTN | ||||||||
| 7.375%, 05/15/14 | 145 | 167 | ||||||
| 5.650%, 05/01/18 | 330 | 350 | ||||||
| Bank of Nova Scotia | ||||||||
| 2.250%, 01/22/13 | 425 | 437 | ||||||
| Barclays Bank | ||||||||
| 5.125%, 01/08/20 | 100 | 108 | ||||||
| BB&T, MTN | ||||||||
| 3.375%, 09/25/13 | 380 | 399 | ||||||
| Citigroup | ||||||||
| 6.375%, 08/12/14 | 425 | 472 | ||||||
| Description | Face Amount (000) | Value (000) |
| Deutsche Bank, MTN | ||||||||
| 3.450%, 03/30/15 | $ | 100 | $ | 105 | ||||
| Deutsche Bank Trust | ||||||||
| 7.250%, 10/15/11 | 46 | 48 | ||||||
| Dresdner Bank - New York | ||||||||
| 7.250%, 09/15/15 | 150 | 169 | ||||||
| European Investment Bank | ||||||||
| 4.625%, 03/21/12 | 250 | 265 | ||||||
| JPMorgan Chase | ||||||||
| 4.650%, 06/01/14 | 480 | 525 | ||||||
| KeyCorp, MTN | ||||||||
| 3.750%, 08/13/15 | 195 | 199 | ||||||
| Kookmin Bank | ||||||||
| 7.250%, 05/14/14(A) | 100 | 116 | ||||||
| PNC Funding | ||||||||
| 4.250%, 09/21/15 | 380 | 409 | ||||||
| 3.000%, 05/19/14 | 125 | 129 | ||||||
| Wachovia | ||||||||
| 5.300%, 10/15/11 | 200 | 209 | ||||||
| Wachovia, MTN | ||||||||
| 5.500%, 05/01/13 | 275 | 303 | ||||||
| Wells Fargo | ||||||||
| 3.625%, 04/15/15 | 125 | 133 | ||||||
Total Banks | 4,768 | |||||||
| Cable/Media [0.7%] | ||||||||
| Comcast | ||||||||
| 4.950%, 06/15/16 | 250 | 279 | ||||||
| TCI Communications | ||||||||
| 7.875%, 08/01/13 | 75 | 87 | ||||||
Total Cable/Media | 366 | |||||||
| Chemicals [0.6%] | ||||||||
| EI du Pont de Nemours | ||||||||
5.875%, 01/15/14 | 240 | 275 | ||||||
| Computer System Design & Services [0.9%] | ||||||||
| Hewlett-Packard | ||||||||
2.125%, 09/13/15 | 450 | 454 | ||||||
| Data Processing [0.2%] | ||||||||
| Fiserv | ||||||||
6.125%, 11/20/12 | 100 | 109 | ||||||
| Drugs [1.5%] | ||||||||
| Merck | ||||||||
| 5.000%, 06/30/19 | 250 | �� | 291 | |||||
| Novartis Capital | ||||||||
| 4.125%, 02/10/14 | 110 | 120 | ||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 64
| schedule of investments |
September 30, 2010 |
Full Maturity Fixed Income Fund (continued) |
| Description | Face Amount (000) | Value (000) |
| Teva Pharmaceutical | ||||||||
| 5.550%, 02/01/16 | $ | 75 | $ | 87 | ||||
| Wyeth | ||||||||
| 5.500%, 02/15/16 | 240 | 281 | ||||||
Total Drugs | 779 | |||||||
| Energy [1.8%] | ||||||||
| Baltimore Gas & Electric | ||||||||
| 6.125%, 07/01/13 | 230 | 258 | ||||||
| Carolina Power & Light | ||||||||
| 5.150%, 04/01/15 | 80 | 91 | ||||||
| Exelon | ||||||||
| 5.625%, 06/15/35 | 75 | 76 | ||||||
| Korea Electric Power | ||||||||
| 7.750%, 04/01/13 | 95 | 107 | ||||||
| 6.750%, 08/01/27 | 75 | 86 | ||||||
| NiSource Finance | ||||||||
| 7.875%, 11/15/10 | 75 | 75 | ||||||
| PPL Energy Supply, Ser A | ||||||||
| 5.700%, 10/15/15 | 75 | 85 | ||||||
| Trans-Allegheny Interstate Line | ||||||||
| 4.000%, 01/15/15(A) | 100 | 104 | ||||||
Total Energy | 882 | |||||||
| Financial Services [4.5%] | ||||||||
| American Express Credit, MTN | ||||||||
| 7.300%, 08/20/13 | 405 | 465 | ||||||
| Bank of New York Mellon, MTN | ||||||||
| 3.100%, 01/15/15 | 390 | 412 | ||||||
| Caterpillar Financial Services, MTN | ||||||||
| 6.200%, 09/30/13 | 225 | 257 | ||||||
| Eksportfinans | ||||||||
| 3.000%, 11/17/14 | 210 | 221 | ||||||
| General Electric Capital, MTN | ||||||||
| 6.000%, 08/07/19 | 125 | 141 | ||||||
| 3.500%, 08/13/12 | 225 | 234 | ||||||
| General Electric Capital, Ser A, MTN | ||||||||
| 6.000%, 06/15/12 | 75 | 81 | ||||||
| HSBC Finance | ||||||||
| 5.000%, 06/30/15 | 75 | 82 | ||||||
| National Rural Utilities Cooperative Finance | ||||||||
| 10.375%, 11/01/18 | 125 | 179 | ||||||
| UFJ Finance Aruba | ||||||||
| 6.750%, 07/15/13 | 125 | 141 | ||||||
Total Financial Services | 2,213 |
| Description | Face Amount (000) | Value (000) |
| Food, Beverage & Tobacco [2.8%] | ||||||||
| Bottling Group | ||||||||
| 5.125%, 01/15/19 | $ | 115 | $ | 132 | ||||
| Cia de Bebidas das Americas | ||||||||
| 8.750%, 09/15/13 | 175 | 207 | ||||||
| Coca-Cola | ||||||||
| 5.350%, 11/15/17 | 305 | 359 | ||||||
| General Mills | ||||||||
| 5.650%, 02/15/19 | 120 | 141 | ||||||
| Kellogg | ||||||||
| 4.450%, 05/30/16 | 230 | 258 | ||||||
| Kraft Foods | ||||||||
| 6.500%, 08/11/17 | 235 | 281 | ||||||
Total Food, Beverage & Tobacco | 1,378 | |||||||
| Insurance [2.1%] | ||||||||
| Aflac | ||||||||
| 3.450%, 08/15/15 | 85 | 88 | ||||||
| Berkshire Hathaway | ||||||||
| 3.200%, 02/11/15 | 440 | 467 | ||||||
| Protective Life | ||||||||
| 4.300%, 06/01/13 | 100 | 103 | ||||||
| Prudential Financial | ||||||||
| 5.375%, 06/21/20 | 180 | 195 | ||||||
| Prudential Financial, MTN | ||||||||
| 2.750%, 01/14/13 | 100 | 102 | ||||||
| Travelers | ||||||||
| 6.250%, 03/15/37(B) | 100 | 96 | ||||||
Total Insurance | 1,051 | |||||||
| Invest Mgmnt/Advis Serv [0.7%] | ||||||||
| BlackRock | ||||||||
3.500%, 12/10/14 | 335 | 356 | ||||||
| Investment Banker/Broker Dealer [3.0%] | ||||||||
| Credit Suisse USA | ||||||||
| 5.250%, 03/02/11 | 225 | 229 | ||||||
| Goldman Sachs Group | ||||||||
| 6.600%, 01/15/12 | 220 | 235 | ||||||
| 5.150%, 01/15/14 | 75 | 81 | ||||||
| Jefferies Group | ||||||||
| 6.450%, 06/08/27 | 100 | 98 | ||||||
| Morgan Stanley | ||||||||
| 5.300%, 03/01/13 | 415 | 447 | ||||||
| 4.750%, 04/01/14 | 75 | 78 | ||||||
| Morgan Stanley, MTN | ||||||||
| 6.625%, 04/01/18 | 100 | 111 | ||||||
| TD Ameritrade Holding | ||||||||
| 4.150%, 12/01/14 | 200 | 213 | ||||||
Total Investment Banker/Broker Dealer | 1,492 | |||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 65
| schedule of investments |
September 30, 2010 |
Full Maturity Fixed Income Fund (continued) |
| Description | Face Amount (000) | Value (000) |
| Machinery-Construction and Mining [0.5%] | ||||||||
| Caterpillar | ||||||||
7.900%, 12/15/18 | $ | 200 | $ | 268 | ||||
| Machinery-Farm [0.4%] | ||||||||
| Deere | ||||||||
4.375%, 10/16/19 | 170 | 187 | ||||||
| Manufacturing [1.3%] | ||||||||
| General Electric | ||||||||
| 5.000%, 02/01/13 | 260 | 282 | ||||||
| Honeywell International | ||||||||
| 3.875%, 02/15/14 | 100 | 109 | ||||||
| Tyco International Finance | ||||||||
| 4.125%, 10/15/14 | 250 | 272 | ||||||
Total Manufacturing | 663 | |||||||
| Medical Products [0.3%] | ||||||||
| Zimmer Holdings | ||||||||
4.625%, 11/30/19 | 115 | 124 | ||||||
| Metals & Mining [0.5%] | ||||||||
| Rio Tinto Finance USA | ||||||||
| 6.500%, 07/15/18 | 100 | 121 | ||||||
| Vale Overseas | ||||||||
| 6.875%, 11/21/36 | 100 | 114 | ||||||
Total Metals & Mining | 235 | |||||||
| Multi-Media [1.4%] | ||||||||
| CBS | ||||||||
| 6.625%, 05/15/11 | 60 | 62 | ||||||
| Time Warner | ||||||||
| 5.875%, 11/15/16 | 290 | 338 | ||||||
| Viacom | ||||||||
| 6.250%, 04/30/16 | 125 | 146 | ||||||
| Walt Disney, MTN | ||||||||
| 6.375%, 03/01/12 | 150 | 162 | ||||||
Total Multi-Media | 708 | |||||||
| Networking Products [0.5%] | ||||||||
| Cisco Systems | ||||||||
| 5.500%, 01/15/40 | 100 | 110 | ||||||
| 4.950%, 02/15/19 | 125 | 143 | ||||||
Total Networking Products | 253 | |||||||
| Oil, Gas & Consumable Fuels [2.9%] | ||||||||
| BP Capital Markets | ||||||||
| 3.125%, 10/01/15 | 215 | 216 | ||||||
| Description | Face Amount (000) | Value (000) |
| ConocoPhillips | ||||||||
| 5.750%, 02/01/19 | $ | 405 | $ | 486 | ||||
| Shell International Finance BV | ||||||||
| 4.375%, 03/25/20 | 390 | 429 | ||||||
| Total Capital | ||||||||
| 3.125%, 10/02/15 | 250 | 263 | ||||||
Total Oil, Gas & Consumable Fuels | 1,394 | |||||||
| Oil-Field Services [0.3%] | ||||||||
| Weatherford International Bermuda | ||||||||
5.125%, 09/15/20 | 140 | 143 | ||||||
| Petroleum & Fuel Products [0.8%] | ||||||||
| Energy Transfer Partners | ||||||||
| 6.625%, 10/15/36 | 75 | 81 | ||||||
| Enterprise Products Operating | ||||||||
| 3.700%, 06/01/15 | 125 | 131 | ||||||
| Kinder Morgan Energy Partners | ||||||||
| 5.300%, 09/15/20 | 125 | 135 | ||||||
| Pemex Project Funding Master Trust | ||||||||
| 9.125%, 10/13/10 | 50 | 50 | ||||||
Total Petroleum & Fuel Products | 397 | |||||||
| REITS-Office Property [0.6%] | ||||||||
| Boston Properties | ||||||||
5.875%, 10/15/19 | 270 | 302 | ||||||
| Retail [1.5%] | ||||||||
| Home Depot | ||||||||
| 5.400%, 03/01/16 | 305 | 347 | ||||||
| Lowe's | ||||||||
| 5.000%, 10/15/15 | 325 | 374 | ||||||
Total Retail | 721 | |||||||
| Retail-Drug Store [0.8%] | ||||||||
| CVS Caremark | ||||||||
| 5.750%, 06/01/17 | 235 | 270 | ||||||
| Walgreen | ||||||||
| 5.250%, 01/15/19 | 100 | 116 | ||||||
Total Retail-Drug Store | 386 | |||||||
| Retail-Restaurants [0.2%] | ||||||||
| McDonald's, MTN | ||||||||
5.000%, 02/01/19 | 90 | 104 | ||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 66
| schedule of investments |
September 30, 2010 |
Full Maturity Fixed Income Fund (continued) |
| Description | Face Amount (000) | Value (000) |
| Telephones & Telecommunications [2.8%] | ||||||||
| AT&T | ||||||||
| 5.600%, 05/15/18 | $ | 310 | $ | 362 | ||||
| British Telecommunications (C) | ||||||||
| 9.625%, 12/15/30 | 100 | 139 | ||||||
| 9.125%, 12/15/10 | 60 | 61 | ||||||
| Deutsche Telekom International Finance | ||||||||
| 8.750%, 06/15/30 | 75 | 105 | ||||||
| Deutsche Telekom International Finance BV | ||||||||
| 6.000%, 07/08/19 | 50 | 60 | ||||||
| France Telecom | ||||||||
| 7.750%, 03/01/11 | 50 | 52 | ||||||
| GTE | ||||||||
| 6.840%, 04/15/18 | 100 | 119 | ||||||
| New Cingular Wireless Services | ||||||||
| 8.750%, 03/01/31 | 75 | 108 | ||||||
| Telecom Italia Capital | ||||||||
| 7.200%, 07/18/36 | 75 | 81 | ||||||
| Telefonica Emisiones | ||||||||
| 6.421%, 06/20/16 | 75 | 88 | ||||||
| Verizon Pennsylvania | ||||||||
| 5.650%, 11/15/11 | 200 | 210 | ||||||
Total Telephones & Telecommunications | 1,385 | |||||||
| Transportation Services [0.8%] | ||||||||
| FedEx | ||||||||
| 9.650%, 06/15/12 | 125 | 142 | ||||||
| United Parcel Service | ||||||||
| 3.875%, 04/01/14 | 245 | 267 | ||||||
Total Transportation Services | 409 | |||||||
Total Corporate Bonds (Cost $20,866) | 22,455 | |||||||
| U.S. Government Agency Obligations [6.3%] | ||||||||
| FHLB | ||||||||
| 4.500%, 11/15/12 | 850 | 920 | ||||||
| FHLMC | ||||||||
| 2.500%, 01/07/14 | 525 | 551 | ||||||
| FNMA | ||||||||
| 4.625%, 10/15/13 | 995 | 1,107 | ||||||
| 4.375%, 09/15/12 | 505 | 542 | ||||||
Total U.S. Government Agency Obligations (Cost $2,997) | 3,120 | |||||||
| Description | Face Amount (000) | Value (000) |
| U.S. Treasury Obligations [19.9%] | ||||||||
| U.S. Treasury Bonds | ||||||||
| 6.250%, 08/15/23 | $ | 1,625 | $ | 2,201 | ||||
| 5.250%, 11/15/28 | 875 | 1,106 | ||||||
| 2.625%, 04/30/16 | 425 | 451 | ||||||
| U.S. Treasury Notes | ||||||||
| 4.750%, 05/15/14 | 780 | 890 | ||||||
| 4.250%, 08/15/13 | 550 | 607 | ||||||
| 4.250%, 11/15/17 | 135 | 156 | ||||||
| 2.375%, 03/31/16 | 2,275 | 2,385 | ||||||
| 2.375%, 07/31/17 | 940 | 971 | ||||||
| 1.750%, 07/31/15 | 1,085 | 1,111 | ||||||
Total U.S. Treasury Obligations (Cost $9,392) | 9,878 | |||||||
| U.S. Government Mortgage-Backed Obligations [17.5%] | ||||||||
| FHLB, Ser 00-0582, Cl H | ||||||||
| 4.750%, 10/25/10 | 133 | 133 | ||||||
| FHLMC, Pool 1B2677 | ||||||||
| 3.145%, 01/01/35(B) | 15 | 16 | ||||||
| FHLMC, Pool 1B2683 | ||||||||
| 3.142%, 01/01/35(B) | 10 | 11 | ||||||
| FHLMC, Pool 1B2692 | ||||||||
| 3.002%, 12/01/34(B) | 32 | 33 | ||||||
| FHLMC, Pool C03490 | ||||||||
| 4.500%, 08/01/40 | 397 | 414 | ||||||
| FHLMC, Pool C20300 | ||||||||
| 6.500%, 01/01/29 | 7 | 8 | ||||||
| FHLMC, Pool E01280 | ||||||||
| 5.000%, 12/01/17 | 26 | 28 | ||||||
| FHLMC, Pool G04222 | ||||||||
| 5.500%, 04/01/38 | 167 | 177 | ||||||
| FHLMC, Pool G08003 | ||||||||
| 6.000%, 07/01/34 | 84 | 91 | ||||||
| FHLMC, Pool G11431 | ||||||||
| 6.000%, 02/01/18 | 17 | 18 | ||||||
| FHLMC, Pool G11911 | ||||||||
| 5.000%, 02/01/21 | 188 | 200 | ||||||
| FHLMC, Pool G13767 | ||||||||
| 4.000%, 03/01/25 | 601 | 628 | ||||||
| FHLMC, Pool G18124 | ||||||||
| 6.000%, 06/01/21 | 55 | 59 | ||||||
| FHLMC, Ser 2009-3540, Cl CD | ||||||||
| 2.000%, 06/15/14 | 253 | 255 | ||||||
| FHLMC, Ser 2730, Cl PD | ||||||||
| 5.000%, 05/15/21 | 150 | 156 | ||||||
| FHLMC, Ser 3122, Cl VA | ||||||||
| 6.000%, 01/15/17 | 99 | 104 | ||||||
| FHLMC, Ser 3132, Cl MA | ||||||||
| 5.500%, 12/15/23 | 50 | 52 | ||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 67
| schedule of investments |
September 30, 2010 |
Full Maturity Fixed Income Fund (continued) |
| Description | Face Amount (000) | Value (000) |
| FHLMC Gold, Pool G11880 | ||||||||
| 5.000%, 12/01/20 | $ | 78 | $ | 83 | ||||
| FHLMC REMIC, Ser 2804, Cl VC | ||||||||
| 5.000%, 07/15/21 | 145 | 160 | ||||||
| FHLMC REMIC, Ser R003, Cl VA | ||||||||
| 5.500%, 08/15/16 | 123 | 132 | ||||||
| FHLMC REMIC, Ser R009, Cl AJ | ||||||||
| 5.750%, 12/15/18 | 52 | 54 | ||||||
| FHLMC REMIC, Ser R010, Cl VA | ||||||||
| 5.500%, 04/15/17 | 106 | 115 | ||||||
| FHLMC REMIC, Ser R010, Cl AB | ||||||||
| 5.500%, 12/15/19 | 148 | 153 | ||||||
| FNMA | ||||||||
| 2.875%, 12/11/13 | 510 | 541 | ||||||
| 2.375%, 07/28/15 | 500 | 519 | ||||||
| FNMA, Pool 252570 | ||||||||
| 6.500%, 07/01/29 | 18 | 20 | ||||||
| FNMA, Pool 253183 | ||||||||
| 7.500%, 04/01/30 | 2 | 2 | ||||||
| FNMA, Pool 253398 | ||||||||
| 8.000%, 08/01/30 | 6 | 7 | ||||||
| FNMA, Pool 254510 | ||||||||
| 5.000%, 11/01/17 | 34 | 36 | ||||||
| FNMA, Pool 254545 | ||||||||
| 5.000%, 12/01/17 | 67 | 72 | ||||||
| FNMA, Pool 254685 | ||||||||
| 5.000%, 04/01/18 | 54 | 58 | ||||||
| FNMA, Pool 254949 | ||||||||
| 5.000%, 11/01/33 | 57 | 61 | ||||||
| FNMA, Pool 255814 | ||||||||
| 5.500%, 08/01/35 | 143 | 153 | ||||||
| FNMA, Pool 303168 | ||||||||
| 9.500%, 02/01/25 | 4 | 5 | ||||||
| FNMA, Pool 725424 | ||||||||
| 5.500%, 04/01/34 | 114 | 122 | ||||||
| FNMA, Pool 735060 | ||||||||
| 6.000%, 11/01/34 | 61 | 67 | ||||||
| FNMA, Pool 735228 | ||||||||
| 5.500%, 02/01/35 | 59 | 63 | ||||||
| FNMA, Pool 735230 | ||||||||
| 5.500%, 02/01/35 | 136 | 146 | ||||||
| FNMA, Pool 735925 | ||||||||
| 5.000%, 10/01/35 | 160 | 169 | ||||||
| FNMA, Pool 745275 | ||||||||
| 5.000%, 02/01/36 | 682 | 721 | ||||||
| FNMA, Pool 745418 | ||||||||
| 5.500%, 04/01/36 | 821 | 878 |
| Description | Face Amount (000) | Value (000) |
| FNMA, Pool 827223 | ||||||||
| 2.340%, 04/01/35(B) | $ | 114 | $ | 118 | ||||
| FNMA, Pool 844809 | ||||||||
| 5.000%, 11/01/35 | 506 | 535 | ||||||
| FNMA, Pool 995865 | ||||||||
| 4.500%, 07/01/24 | 645 | 680 | ||||||
| FNMA, Pool AD0454 | ||||||||
| 5.000%, 11/01/21 | 160 | 170 | ||||||
| FNMA, Pool AD8522 | ||||||||
| 4.000%, 08/01/40 | 196 | 202 | ||||||
| FNMA, Ser 136, Cl PK | ||||||||
| 6.000%, 08/25/22 | 19 | 21 | ||||||
| FNMA, Ser 33, Cl LD | ||||||||
| 4.250%, 09/25/22 | 97 | 101 | ||||||
| FNMA, Ser W6, Cl 1A6 | ||||||||
| 5.500%, 07/25/34 | 57 | 61 | ||||||
| FNMA REMIC, Ser B2, Cl AB | ||||||||
| 5.500%, 05/25/14 | 50 | 51 | ||||||
| GNMA, Pool 479168 | ||||||||
| 8.000%, 02/15/30 | 8 | 10 | ||||||
| GNMA, Pool 780315 | ||||||||
| 9.500%, 12/15/17 | 9 | 10 | ||||||
Total U.S. Government Mortgage-Backed Obligations (Cost $8,390) | 8,679 | |||||||
| Mortgage-Backed Securities [0.8%] | ||||||||
| Banc of America Alternative Loan Trust, Ser 2004-2, Cl 5A1 | ||||||||
| 5.500%, 03/25/19 | 77 | 78 | ||||||
| Chase Mortgage Finance, Ser 2003-S13, Cl A11 | ||||||||
| 5.500%, 11/25/33 | 66 | 68 | ||||||
| Residential Accredit Loans, Ser 2004-QS5, Cl A5 | ||||||||
| 4.750%, 04/25/34 | 28 | 28 | ||||||
| Residential Accredit Loans, Ser 2004-QS6, Cl A1 | ||||||||
| 5.000%, 05/25/19 | 49 | 50 | ||||||
| WaMu Mortgage Pass Through Certificates, Ser 2004-CB2, Cl 5A | ||||||||
| 5.000%, 07/25/19 | 132 | 138 | ||||||
Total Mortgage-Backed Securities (Cost $351) | 362 | |||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 68
| schedule of investments |
September 30, 2010 |
Full Maturity Fixed Income Fund (continued) |
| Description | Face Amount (000) | Value (000) |
| Commercial Mortgage-Backed Securities [2.9%] | ||||||||
| Bear Stearns Commercial Mortgage Security, Ser 2007-PW16, Cl AM | ||||||||
| 5.907%, 06/11/40(B) | $ | 300 | $ | 276 | ||||
| Citigroup, Ser 2005-CD1, Cl A4 | ||||||||
| 5.396%, 07/15/44(B) | 200 | 220 | ||||||
| Citigroup, Ser 2007-CD4, Cl A2B | ||||||||
| 5.205%, 12/11/49 | 150 | 157 | ||||||
| Commercial Mortgage, Ser 2005-C5, Cl A5A | ||||||||
| 5.116%, 06/10/44(B) | 200 | 218 | ||||||
| GMAC Mortgage Corporation Loan Trust, Ser 2004-J4, Cl A2 | ||||||||
| 5.500%, 09/25/34 | 68 | 70 | ||||||
| JPMorgan Chase, Ser 2006-CB17, Cl ASB | ||||||||
| 5.415%, 12/12/43 | 200 | 219 | ||||||
| Wachovia Bank Commercial Mortgage Trust, Ser 2005-C22 | ||||||||
| 5.437%, 12/15/44(B) | 250 | 273 | ||||||
Total Commercial Mortgage-Backed Securities (Cost $1,396) | 1,433 | |||||||
| Asset-Backed Securities [5.1%] | ||||||||
| BA Credit Card Trust, Ser 2008-A1, Cl A1 | ||||||||
| 0.837%, 04/15/13(B) | 445 | 445 | ||||||
| Bayview Financial Acquisition Trust, Ser 2007-A, Cl 1A2 | ||||||||
| 6.205%, 05/28/37 (C) | 200 | 197 | ||||||
| Chase Issuance Trust, Ser 2006-A4, Cl A4 | ||||||||
| 0.277%, 10/15/13(B) | 325 | 325 | ||||||
| Chase Issuance Trust, Ser 2009-A2, Cl A2 | ||||||||
| 1.807%, 04/15/14(B) | 400 | 409 | ||||||
| Citibank Credit Card Issuance Trust, Ser 2009-A2, Cl A2 | ||||||||
| 1.807%, 05/15/14(B) | 600 | 613 | ||||||
| Cityscape Home Equity Loan Trust, Ser 1997-C, Cl A4 | ||||||||
| 7.000%, 07/25/28 (C) | 5 | 4 | ||||||
| Contimortgage Home Equity Loan Trust, Ser 1997-2, Cl A9 | ||||||||
| 7.090%, 04/15/28 | 1 | 1 | ||||||
| GMAC Mortgage Corporation Loan Trust, Ser 2004-GH1, Cl A6 | ||||||||
| 4.810%, 07/25/35(B) | 107 | 104 | ||||||
| Green Tree Financial, Ser 1997-7, Cl A6 | ||||||||
| 6.760%, 07/15/29 | 72 | 78 | ||||||
| Description | Face Amount (000)/Shares | Value (000) |
| GSAA Home Equity Trust, Ser 2005-1, Cl AF2 | ||||||||
| 4.316%, 11/25/34(B) | $ | 33 | $ | 32 | ||||
| MBNA Credit Card Master Note Trust, Ser 2002-A3, Cl A3 | ||||||||
| 0.497%, 09/15/14(B) | 200 | 200 | ||||||
| RAAC, Ser 2004-SP1, Cl AI4 | ||||||||
| 5.285%, 08/25/27(B) | 95 | 91 | ||||||
| Residential Asset Mortgage Products, Ser 2002-RS3, Cl AI5 | ||||||||
| 5.572%, 06/25/32(B) | 50 | 41 | ||||||
Total Asset-Backed Securities (Cost $2,557) | 2,540 | |||||||
| Foreign Corporate Bonds [0.4%] | ||||||||
| National Bank of Hungary | ||||||||
| 8.875%, 11/01/13 | 75 | 78 | ||||||
| United Mexican States, MTN | ||||||||
| 5.125%, 01/15/20 | 100 | 112 | ||||||
Total Foreign Corporate Bonds (Cost $176) | 190 | |||||||
| Cash Equivalent [3.5%] | ||||||||
| AIM STIT-Treasury Portfolio, 0.060%* | 1,745,956 | 1,746 | ||||||
Total Cash Equivalent (Cost $1,746) | 1,746 | |||||||
Total Investments [101.7%] (Cost $47,871) | $ | 50,403 | ||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 69
| schedule of investments |
September 30, 2010 |
Full Maturity Fixed Income Fund (concluded) |
| Percentages are based on Net Assets of $49,574 ($ Thousands). |
| * | The rate reported is the 7-day current yield as of September 30, 2010. |
| (A) | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration normally to qualified institutions. On September 30, 2010, the value of these securities amounted to $321(000), representing 0.6% of the net assets of the Fund. |
| (B) | Floating Rate Security — The rate reflected is the rate in effect on September 30, 2010. |
| (C) | Step Bond — The rate reflected on the Schedule of Investments is the rate in effect on September 30, 2010. |
| Cl — Class |
| FHLB — Federal Home Loan Bank |
| FHLMC — Federal Home Loan Mortgage Corporation |
| FNMA — Federal National Mortgage Association |
| GNMA — Government National Mortgage Association |
| MTN — Medium Term Note |
| NA — National Association |
| REIT — Real Estate Investment Trust |
| REMIC — Real Estate Mortgage Investment Conduit |
| Ser — Series |
The following is a summary of the inputs used as of September 30, 2010 in valuing the Fund’s investments carried at value ($ Thousands):
| Investments in Securities | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Corporate Bonds | $ | — | $ | 22,455 | $ | — | $ | 22,455 | ||||||||
| U.S. Government Agency Obligations | — | 3,120 | — | 3,120 | ||||||||||||
| U.S. Treasury Obligations | — | 9,878 | — | 9,878 | ||||||||||||
| U.S. Government Mortgage-Backed Obligations | — | 8,679 | — | 8,679 | ||||||||||||
| Mortgage-Backed Securities | — | 362 | — | 362 | ||||||||||||
| Commercial Mortgage-Backed Securities | — | 1,433 | — | 1,433 | ||||||||||||
| Asset-Backed Securities | — | 2,540 | — | 2,540 | ||||||||||||
| Foreign Corporate Bonds | — | 190 | — | 190 | ||||||||||||
| Cash Equivalent | 1,746 | — | — | 1,746 | ||||||||||||
| Total Investments in Securities | $ | 1,746 | $ | 48,657 | $ | — | $ | 50,403 | ||||||||
For the year ended September 30, 2010, there have been no significant transfers between Level 1 and Level 2 assets and liabilities.
For more information on valuation inputs, see Note 2 — Significant Accounting Policies in the Notes to Financial Statements.
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 70
| schedule of investments |
September 30, 2010 |
| Diversified Equity Fund |
Description | Shares | Value (000) | |||||
| Common Stock [101.0%] | |||||||
| Aerospace & Defense [0.5%] | |||||||
Raytheon | 6,415 | $ | 293 | ||||
| Airlines [0.3%] | |||||||
Delta Air Lines * | 15,490 | 180 | |||||
| Apparel/Textiles [0.5%] | |||||||
Coach | 7,110 | 305 | |||||
| Banks [4.0%] | |||||||
| Bank of New York Mellon | 13,725 | 359 | |||||
| HDFC Bank ADR | 1,230 | 227 | |||||
| KeyCorp | 65,050 | 518 | |||||
| M&T Bank | 3,100 | 253 | |||||
| MSCI, Cl A * | 5,000 | 166 | |||||
| US Bancorp | 46,950 | 1,015 | |||||
Total Banks | 2,538 | ||||||
| Biomedical Research & Products [0.3%] | |||||||
Celgene * | 3,410 | 196 | |||||
| Biotechnology [0.7%] | |||||||
| Alexion Pharmaceuticals * | 3,870 | 249 | |||||
| Human Genome Sciences * | 6,880 | 205 | |||||
Total Biotechnology | 454 | ||||||
| Broadcasting & Cable [3.4%] | |||||||
| Cisco Systems * | 42,325 | 927 | |||||
| F5 Networks * | 3,620 | 376 | |||||
| Motorola * | 27,280 | 233 | |||||
Description | Shares | Value (000) |
| Qualcomm | 13,620 | $ | 614 | ||||
Total Broadcasting & Cable | 2,150 | ||||||
| Business Services [0.6%] | |||||||
Fidelity National Information Services | 14,820 | 402 | |||||
| Chemicals [1.6%] | |||||||
| Dow Chemical | 26,250 | 721 | |||||
| Potash Corp of Saskatchewan | 2,000 | 288 | |||||
Total Chemicals | 1,009 | ||||||
| Commercial Banks [0.6%] | |||||||
BB&T | 16,800 | 405 | |||||
| Communication & Media [0.9%] | |||||||
| DIRECTV, Cl A * | 6,640 | 277 | |||||
| Time Warner | 9,466 | 290 | |||||
Total Communication & Media | 567 | ||||||
| Computer Software [3.2%] | |||||||
| Microsoft | 14,571 | 357 | |||||
| Oracle | 39,350 | 1,056 | |||||
| Symantec * | 39,350 | 597 | |||||
Total Computer Software | 2,010 | ||||||
| Computer System Design & Services [6.1%] | |||||||
| Apple * | 5,329 | 1,512 | |||||
| Dell * | 28,129 | 365 | |||||
| Hewlett-Packard | 17,100 | 719 | |||||
| IBM | 6,850 | 919 | |||||
| NetApp * | 3,540 | 176 | |||||
| SanDisk * | 5,160 | 189 | |||||
Total Computer System Design & Services | 3,880 | ||||||
| Computers & Peripherals [1.5%] | |||||||
EMC * | 45,650 | 927 | |||||
| Construction & Engineering [0.7%] | |||||||
Aecom Technology * | 19,400 | 471 | |||||
| Consumer Products & Services [1.3%] | |||||||
| Clorox | 9,675 | 646 | |||||
| Mattel | 7,300 | 171 | |||||
Total Consumer Products & Services | 817 | ||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 71
| schedule of investments |
September 30, 2010 |
Diversified Equity Fund (continued) |
Description | Shares | Value (000) |
| Containers & Packaging [0.5%] | |||||||
Crown Holdings * | 10,400 | $ | 298 | ||||
| Diversified Manufacturing [3.3%] | |||||||
| 3M | 9,675 | 839 | |||||
| General Electric | 30,800 | 500 | |||||
| Parker Hannifin | 10,300 | 722 | |||||
Total Diversified Manufacturing | 2,061 | ||||||
| Diversified Metals & Mining [1.4%] | |||||||
| Cliffs Natural Resources | 5,570 | 356 | |||||
| Goldcorp | 9,140 | 398 | |||||
| United States Steel | 3,620 | 158 | |||||
Total Diversified Metals & Mining | 912 | ||||||
| Drugs [3.1%] | |||||||
| Abbott Laboratories | 19,570 | 1,023 | |||||
| Allergan | 5,700 | 379 | |||||
| Bristol-Myers Squibb | 6,200 | 168 | |||||
| Mylan * | 21,100 | 397 | |||||
Total Drugs | 1,967 | ||||||
| Electrical Equipment [0.5%] | |||||||
Baldor Electric | 7,700 | 311 | |||||
| Electrical Services [0.3%] | |||||||
First Solar * | 1,320 | 195 | |||||
| Entertainment [2.2%] | |||||||
| Las Vegas Sands * | 13,860 | 483 | |||||
| Starbucks | 14,170 | 363 | |||||
| Starwood Hotels & Resorts Worldwide | 5,640 | 296 | |||||
| Wendy's, Cl A | 52,500 | 238 | |||||
Total Entertainment | 1,380 | ||||||
| Financial Services [3.3%] | |||||||
| American Express | 14,900 | 626 | |||||
| Capital One Financial | 11,975 | 474 | |||||
| Citigroup * | 106,360 | 415 | |||||
| IntercontinentalExchange * | 5,270 | 552 | |||||
Total Financial Services | 2,067 | ||||||
| Food, Beverage & Tobacco [5.6%] | |||||||
| Coca-Cola | 9,675 | 566 | |||||
| ConAgra Foods | 26,825 | 588 | |||||
| Del Monte Foods | 23,800 | 312 | |||||
Description | Shares | Value (000) | |||||
| General Mills | 18,275 | $ | 668 | ||||
| PepsiCo | 21,549 | 1,432 | |||||
Total Food, Beverage & Tobacco | 3,566 | ||||||
| Gas/Natural Gas [0.5%] | |||||||
Questar | 17,707 | 310 | |||||
| Health Care Technology [0.3%] | |||||||
Cerner * | 2,130 | 179 | |||||
| Healthcare Products & Services [2.1%] | |||||||
| Express Scripts, Cl A * | 5,090 | 248 | |||||
| McKesson | 4,362 | 269 | |||||
| Medtronic | 16,525 | 555 | |||||
| Pharmaceutical Product Development | 10,700 | 265 | |||||
Total Healthcare Products & Services | 1,337 | ||||||
| Household Furniture & Fixtures [0.5%] | |||||||
Pulte Group * | 37,310 | 327 | |||||
| Insurance [3.9%] | |||||||
| Berkshire Hathaway, Cl B * | 5,722 | 473 | |||||
| Chubb | 4,400 | 251 | |||||
| HCC Insurance Holdings | 17,400 | 454 | |||||
| Loews | 4,000 | 151 | |||||
| Marsh & McLennan | 18,825 | 454 | |||||
| Universal Health Services, Cl B | 7,120 | 277 | |||||
| Unum Group | 20,300 | 450 | |||||
Total Insurance | 2,510 | ||||||
| Internet & Catalog Retail [0.3%] | |||||||
priceline.com * | 530 | 185 | |||||
| Investment Banker/Broker Dealer [2.2%] | |||||||
| JPMorgan Chase | 11,975 | 456 | |||||
| Morgan Stanley | 22,275 | 550 | |||||
| T Rowe Price Group | 8,160 | 408 | |||||
Total Investment Banker/Broker Dealer | 1,414 | ||||||
| Machinery [2.9%] | |||||||
| AGCO * | 10,300 | 402 | |||||
| Caterpillar | 6,590 | 519 | |||||
| Cummins | 6,335 | 574 | |||||
| Deere | 4,850 | 338 | |||||
Total Machinery | 1,833 | ||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 72
| schedule of investments |
September 30, 2010 |
Diversified Equity Fund (continued) |
Description | Shares | Value (000) |
| Manufacturing [0.8%] | |||||||
Tyco International | 13,850 | $ | 509 | ||||
| Medical Products & Services [5.3%] | |||||||
| Becton Dickinson | 6,300 | 467 | |||||
| CareFusion * | 16,842 | 418 | |||||
| Covidien | 7,250 | 292 | |||||
| Hospira * | 3,440 | 196 | |||||
| Intuitive Surgical * | 1,160 | 329 | |||||
| Laboratory Corp of America Holdings * | 3,900 | 306 | |||||
| Patterson | 10,500 | 301 | |||||
| Quest Diagnostics | 9,200 | 464 | |||||
| Stryker | 11,425 | 572 | |||||
Total Medical Products & Services | 3,345 | ||||||
| Metals & Mining [1.2%] | |||||||
Barrick Gold | 16,800 | 778 | |||||
| Office Furniture & Fixtures [1.8%] | |||||||
| Factset Research Systems | 3,440 | 279 | |||||
| Salesforce.com * | 3,100 | 347 | |||||
| Synopsys * | 10,100 | 250 | |||||
| VMware, Cl A * | 3,050 | 259 | |||||
Total Office Furniture & Fixtures | 1,135 | ||||||
| Paper & Related Products [0.5%] | |||||||
Sealed Air | 14,500 | 326 | |||||
| Petroleum & Fuel Products [12.6%] | |||||||
| Anadarko Petroleum | 13,150 | 750 | |||||
| ChevronTexaco | 5,400 | 438 | |||||
| Cimarex Energy | 3,730 | 247 | |||||
| Concho Resources * | 3,720 | 246 | |||||
| ConocoPhillips | 12,340 | 709 | |||||
| Exterran Holdings * | 17,100 | 388 | |||||
| Halliburton | 19,260 | 637 | |||||
| National Oilwell Varco | 3,950 | 176 | |||||
| Newfield Exploration * | 6,800 | 391 | |||||
| Noble | 9,100 | 307 | |||||
| Occidental Petroleum | 6,260 | 490 | |||||
| Patterson-UTI Energy | 25,000 | 427 | |||||
| QEP Resources | 7,547 | 227 | |||||
| Royal Dutch Shell, Cl B ADR | 15,975 | 939 | |||||
| Southwestern Energy * | 8,600 | 288 | |||||
| Spectra Energy | 10,500 | 237 | |||||
| Unit * | 10,900 | 406 | |||||
| Williams | 35,375 | 676 | |||||
Total Petroleum & Fuel Products | 7,979 | ||||||
Description | Shares | Value (000) |
| Real Estate Investment Trust [1.6%] | |||||||
| Digital Realty Trust | 4,440 | $ | 274 | ||||
| Health Care | 2,730 | 129 | |||||
| Host Hotels & Resorts | 18,210 | 264 | |||||
| Simon Property Group | 3,970 | 368 | |||||
Total Real Estate Investment Trust | 1,035 | ||||||
| Real Estate Management & Development [1.4%] | |||||||
| Brookfield Asset Management, Cl A | 20,900 | 593 | |||||
| CB Richard Ellis Group, Cl A * | 14,400 | 263 | |||||
Total Real Estate Management & Development | 856 | ||||||
| Retail [5.7%] | |||||||
| Advance Auto Parts | 8,550 | 502 | |||||
| Dollar Tree * | 3,545 | 173 | |||||
| Guess ? | 4,400 | 179 | |||||
| Kohl's * | 11,425 | 602 | |||||
| Staples | 25,700 | 537 | |||||
| Urban Outfitters * | 3,510 | 110 | |||||
| Walgreen | 10,400 | 348 | |||||
| Wal-Mart Stores | 15,975 | 855 | |||||
| Whole Foods Market * | 7,930 | 294 | |||||
Total Retail | 3,600 | ||||||
| Semi-Conductors [2.8%] | |||||||
| Applied Materials | 21,900 | 256 | |||||
| ASML Holding, Cl G | 10,910 | 324 | |||||
| Broadcom, Cl A | 13,150 | 466 | |||||
| Lam Research * | 14,650 | 613 | |||||
| Micron Technology * | 17,990 | 130 | |||||
Total Semi-Conductors | 1,789 | ||||||
| Telephones & Telecommunications [4.3%] | |||||||
| America Movil, Ser L ADR | 9,000 | 480 | |||||
| AT&T | 21,150 | 605 | |||||
| NII Holdings * | 10,290 | 423 | |||||
| Research In Motion * | 2,900 | 141 | |||||
| Sprint Nextel * | 75,500 | 349 | |||||
| Verizon Communications | 22,275 | 726 | |||||
Total Telephones & Telecommunications | 2,724 | ||||||
| Trading Companies & Distributors [0.3%] | |||||||
Fastenal | 4,160 | 221 | |||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 73
| schedule of investments |
September 30, 2010 |
Diversified Equity Fund (concluded) |
Description | Shares | Value (000) |
| Transportation Services [1.1%] | |||||||
FedEx | 7,975 | $ | 682 | ||||
| Web Portals/ISP [1.0%] | |||||||
| Amazon.com * | 2,700 | 424 | |||||
| Baidu.com ADR * | 2,300 | 236 | |||||
Total Web Portals/ISP | 660 | ||||||
| Wholesale [1.5%] | |||||||
| Archer-Daniels-Midland | 14,630 | 467 | |||||
| Mead Johnson Nutrition, Cl A | 8,570 | 488 | |||||
Total Wholesale | 955 | ||||||
Total Common Stock (Cost $59,892) | 64,050 | ||||||
| Cash Equivalent [3.4%] | |||||||
| AIM STIT-Treasury Portfolio, 0.060%** | 2,152,380 | 2,152 | |||||
Total Cash Equivalent (Cost $2,152) | 2,152 | ||||||
Total Investments [104.4%] (Cost $62,044) | $ | 66,202 | |||||
| Percentages are based on Net Assets of $63,419 ($ Thousands). |
| * | Non-income producing security. |
| ** | The rate reported is the 7-day current yield as of September 30, 2010. |
| ADR — American Depositary Receipt |
| Cl — Class |
| Ser — Series |
As of September 30, 2010, all of the Fund's investments are Level 1, in accordance with ASC 820.
For the year ended September 30, 2010, there have been no significant transfers between Level 1 and Level 2 assets and liabilities.
For more information on valuation inputs, see Note 2 — Significant Accounting Policies in the Notes to Financial Statements.
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 74
| schedule of investments |
September 30, 2010 |
| Socially Responsible Equity Fund |
Description | Shares | Value (000) | ||||||
| Common Stock [94.3%] | ||||||||
| Banks [6.8%] | ||||||||
| Cullen | 21,500 | $ | 1,158 | |||||
| M&T Bank | 7,000 | 573 | ||||||
| Toronto-Dominion Bank | 9,000 | 650 | ||||||
| UMB Financial | 13,500 | 480 | ||||||
| US Bancorp | 63,000 | 1,362 | ||||||
Total Banks | 4,223 | |||||||
| Business Services [1.8%] | ||||||||
Automatic Data Processing | 27,000 | 1,135 | ||||||
| Chemicals [2.5%] | ||||||||
EI du Pont de Nemours | 35,000 | 1,562 | ||||||
| Communication & Media [3.7%] | ||||||||
| Thomson Reuters | 34,000 | 1,276 | ||||||
| Time Warner | 33,000 | 1,011 | ||||||
Total Communication & Media | 2,287 | |||||||
| Computer Software [2.4%] | ||||||||
Microsoft | 60,000 | 1,469 | ||||||
| Computer System Design & Services [1.8%] | ||||||||
Dell * | 89,000 | 1,154 | ||||||
| Consumer Products & Services [1.9%] | ||||||||
Clorox | 18,000 | 1,202 | ||||||
| Distributors [1.8%] | ||||||||
Genuine Parts | 25,000 | 1,115 | ||||||
Description | Shares | Value (000) |
| Drugs [5.7%] | ||||||||
| Abbott Laboratories | 36,000 | $ | 1,880 | |||||
| Bristol-Myers Squibb | 61,000 | 1,654 | ||||||
Total Drugs | 3,534 | |||||||
| Electrical Equipment [3.1%] | ||||||||
Emerson Electric | 37,000 | 1,948 | ||||||
| Financial Services [1.9%] | ||||||||
NYSE Euronext | 40,500 | 1,157 | ||||||
| Healthcare Products & Services [6.2%] | ||||||||
| Cardinal Health | 47,000 | 1,553 | ||||||
| McKesson | 19,000 | 1,174 | ||||||
| Pharmaceutical Product Development | 45,000 | 1,115 | ||||||
Total Healthcare Products & Services | 3,842 | |||||||
| Insurance [8.2%] | ||||||||
| Berkshire Hathaway, Cl B * | 24,500 | 2,025 | ||||||
| Chubb | 32,500 | 1,852 | ||||||
| Loews | 33,000 | 1,251 | ||||||
Total Insurance | 5,128 | |||||||
| Machinery [1.3%] | ||||||||
AGCO * | 20,000 | 780 | ||||||
| Manufacturing [1.9%] | ||||||||
Tyco International | 32,375 | 1,189 | ||||||
| Medical Products & Services [7.2%] | ||||||||
| CareFusion * | 24,500 | 609 | ||||||
| Laboratory Corp of America Holdings * | 14,000 | 1,098 | ||||||
| Patterson | 60,000 | 1,719 | ||||||
| Quest Diagnostics | 21,500 | 1,085 | ||||||
Total Medical Products & Services | 4,511 | |||||||
| Paper & Related Products [4.1%] | ||||||||
| Packaging Corp of America | 53,500 | 1,240 | ||||||
| Sealed Air | 57,000 | 1,281 | ||||||
Total Paper & Related Products | 2,521 | |||||||
| Petroleum & Fuel Products [18.1%] | ||||||||
| ConocoPhillips | 32,000 | 1,838 | ||||||
| Encana | 57,000 | 1,723 | ||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 75
| schedule of investments |
September 30, 2010 |
Socially Responsible Equity Fund (concluded) |
Description | Shares | Value (000) |
| Exterran Holdings * | 72,500 | $ | 1,646 | |||||
| Patterson-UTI Energy | 112,000 | 1,913 | ||||||
| Southwestern Energy * | 26,000 | 869 | ||||||
| Spectra Energy | 80,000 | 1,804 | ||||||
| Unit * | 40,000 | 1,492 | ||||||
Total Petroleum & Fuel Products | 11,285 | |||||||
| Real Estate Management & Development [3.7%] | ||||||||
Brookfield Asset Management, Cl A | 80,000 | 2,270 | ||||||
| Retail [2.7%] | ||||||||
Walgreen | 49,000 | 1,641 | ||||||
| Semi-Conductors [3.7%] | ||||||||
| Analog Devices | 40,000 | 1,255 | ||||||
| Intel | 55,000 | 1,058 | ||||||
Total Semi-Conductors | 2,313 | |||||||
| Telephones & Telecommunications [0.8%] | ||||||||
Research In Motion * | 10,000 | 487 | ||||||
| Waste Management Services [3.0%] | ||||||||
Waste Management | 52,000 | 1,859 | ||||||
Total Common Stock (Cost $55,797) | 58,612 | |||||||
| Cash Equivalent [5.7%] | ||||||||
| AIM STIT-Government Tax Advantage Portfolio Institutional Class, 0.070%** | 3,530,881 | 3,531 | ||||||
Total Cash Equivalent (Cost $3,531) | 3,531 | |||||||
Total Investments [100.0%] (Cost $59,328) | $ | 62,143 | ||||||
| Percentages are based on Net Assets of $62,170 ($ Thousands). |
| * | Non-income producing security. |
| ** | The rate reported is the 7-day current yield as of September 30, 2010. |
| Cl — Class |
As of September 30, 2010, all of the Fund's investments are Level 1, in accordance with ASC 820.
For the year ended September 30, 2010, there have been no significant transfers between Level 1 and Level 2 assets and liabilities.
For more information on valuation inputs, see Note 2 — Significant Accounting Policies in the Notes to Financial Statements.
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 76
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CNI CHARTER FUNDS | PAGE 77
| statements of assets and liabilities (000) |
September 30, 2010 |
Prime Money Market Fund | Government Money Market Fund | California Tax Exempt Money Market Fund | ||||||||||
| ASSETS: | ||||||||||||
Cost of securities (including repurchase agreements) | $ | 1,274,764 | $ | 3,025,606 | $ | 828,544 | ||||||
| Investments in securities at value | $ | 1,033,364 | $ | 1,748,506 | $ | 828,544 | ||||||
| Repurchase agreements at value | 241,400 | 1,277,100 | — | |||||||||
| Cash | — | 30 | 514 | |||||||||
| Income receivable | 604 | 2,762 | 509 | |||||||||
Prepaid expenses | 26 | 51 | 17 | |||||||||
Total Assets | 1,275,394 | 3,028,449 | 829,584 | |||||||||
| LIABILITIES: | ||||||||||||
| Payable for income distributions | 35 | 12 | 5 | |||||||||
| Payable for investment securities purchased | — | — | 2,032 | |||||||||
| Investment adviser fees payable | 272 | 276 | 91 | |||||||||
| Shareholder servicing & distribution fees payable | 48 | 28 | 7 | |||||||||
| Administrative fees payable | 46 | 106 | 31 | |||||||||
| Trustees' fees payable | 3 | 7 | 2 | |||||||||
Accrued expenses | 110 | 237 | 74 | |||||||||
Total Liabilities | 514 | 666 | 2,242 | |||||||||
Net Assets | $ | 1,274,880 | $ | 3,027,783 | $ | 827,342 | ||||||
| NET ASSETS: | ||||||||||||
| Paid-in Capital (unlimited authorization — $0.01 par value) | $ | 1,274,842 | $ | 3,027,768 | $ | 827,340 | ||||||
| Undistributed net investment income | 38 | 20 | — | |||||||||
Accumulated net realized gain (loss) on investments | — | (5 | ) | 2 | ||||||||
Net Assets | $ | 1,274,880 | $ | 3,027,783 | $ | 827,342 | ||||||
| Institutional Class Shares ($Dollars): | ||||||||||||
| Net Assets | $ | 489,979,810 | $ | 81,049,942 | $ | 140,237,943 | ||||||
| Total shares outstanding at end of year | 490,037,554 | 81,050,954 | 140,239,615 | |||||||||
| Net asset value, offering and redemption price per share | ||||||||||||
| (net assets ÷ shares outstanding) | $ | 1.00 | $ | 1.00 | $ | 1.00 | ||||||
| Class N Shares ($Dollars): | ||||||||||||
| Net Assets | $ | 432,324,729 | $ | 2,598,035,285 | $ | 638,839,131 | ||||||
| Total shares outstanding at end of year | 432,368,465 | 2,598,020,090 | 638,840,395 | |||||||||
| Net asset value, offering and redemption price per share | ||||||||||||
| (net assets ÷ shares outstanding) | $ | 1.00 | $ | 1.00 | $ | 1.00 | ||||||
| Class S Shares ($Dollars): | ||||||||||||
| Net Assets | $ | 352,575,624 | $ | 348,697,827 | $ | 48,264,489 | ||||||
| Total shares outstanding at end of year | 352,529,601 | 348,696,907 | 48,260,755 | |||||||||
| Net asset value, offering and redemption price per share | ||||||||||||
| (net assets ÷ shares outstanding) | $ | 1.00 | $ | 1.00 | $ | 1.00 | ||||||
| Amounts designated as “—” are either $0 or have been rounded to $0. |
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 78
| statements of assets and liabilities (000) |
September 30, 2010 |
Corporate Bond Fund | Government Bond Fund | California Tax Exempt Bond Fund | High Yield Bond Fund | |||||||||||||
| ASSETS: | ||||||||||||||||
Cost of securities (including repurchase agreements) | $ | 100,834 | $ | 155,107 | $ | 41,424 | $ | 55,567 | ||||||||
| Investments in securities at value | $ | 106,780 | $ | 157,000 | $ | 43,029 | $ | 56,504 | ||||||||
| Repurchase agreements at value | — | 1,000 | — | — | ||||||||||||
| Cash | — | — | — | 8 | ||||||||||||
| Receivable for investment securities sold | — | — | — | 1,254 | ||||||||||||
| Income receivable | 1,293 | 658 | 556 | 1,490 | ||||||||||||
| Receivable for capital shares sold | 169 | 261 | 254 | 45 | ||||||||||||
Prepaid expenses | 2 | 3 | 1 | 1 | ||||||||||||
Total Assets | 108,244 | 158,922 | 43,840 | 59,302 | ||||||||||||
| LIABILITIES: | ||||||||||||||||
| Payable for income distributions | 194 | 88 | 54 | 217 | ||||||||||||
| Payable for capital shares redeemed | 25 | 109 | — | 6 | ||||||||||||
| Payable for investment securities purchased | — | — | — | 1,168 | ||||||||||||
| Investment adviser fees payable | 35 | 46 | 5 | 30 | ||||||||||||
| Shareholder servicing & distribution fees payable | 22 | 33 | 9 | 19 | ||||||||||||
| Administrative fees payable | 4 | 6 | 2 | 2 | ||||||||||||
Accrued expenses | 9 | 13 | 4 | 5 | ||||||||||||
Total Liabilities | 289 | 295 | 74 | 1,447 | ||||||||||||
Net Assets | $ | 107,955 | $ | 158,627 | $ | 43,766 | $ | 57,855 | ||||||||
| NET ASSETS: | ||||||||||||||||
| Paid-in Capital (unlimited authorization — $0.01 par value) | $ | 102,528 | $ | 156,223 | $ | 41,975 | $ | 60,486 | ||||||||
| Accumulated net realized gain (loss) on investments | (519 | ) | (489 | ) | 186 | (3,568 | ) | |||||||||
Net unrealized appreciation on investments | 5,946 | 2,893 | 1,605 | 937 | ||||||||||||
Net Assets | $ | 107,955 | $ | 158,627 | $ | 43,766 | $ | 57,855 | ||||||||
| Institutional Class Shares ($Dollars): | ||||||||||||||||
| Net Assets | $ | 105,570,900 | $ | 155,375,929 | $ | 40,456,937 | $ | 33,845,003 | ||||||||
| Total shares outstanding at end of year | 9,707,603 | 14,576,300 | 3,779,844 | 4,072,614 | ||||||||||||
| Net asset value, offering and redemption price per share | ||||||||||||||||
| (net assets ÷ shares outstanding) | $ | 10.88 | $ | 10.66 | $ | 10.70 | $ | 8.31 | ||||||||
| Class N Shares ($Dollars): | ||||||||||||||||
| Net Assets | $ | 2,383,698 | $ | 3,251,015 | $ | 3,308,869 | $ | 24,009,930 | ||||||||
| Total shares outstanding at end of year | 218,934 | 304,407 | 308,268 | 2,889,204 | ||||||||||||
| Net asset value, offering and redemption price per share | ||||||||||||||||
| (net assets ÷ shares outstanding) | $ | 10.89 | $ | 10.68 | $ | 10.73 | $ | 8.31 | ||||||||
| Amounts designated as “—” are either $0 or have been rounded to $0. |
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 79
| statements of assets and liabilities (000) |
September 30, 2010 |
Large Cap Value Equity Fund | Large Cap Growth Equity Fund | RCB Small Cap Value Fund | Multi-Asset Fund | |||||||||||||
| ASSETS: | ||||||||||||||||
Cost of securities (including affiliated investments and repurchase agreements) | $ | 105,623 | $ | 35,955 | $ | 21,227 | $ | 30,646 | ||||||||
| Investments in securities at value | $ | 104,805 | $ | 40,795 | $ | 23,460 | $ | 23,967 | ||||||||
| Affiliated investments at value | — | — | — | 4,566 | ||||||||||||
| Repurchase agreements at value | — | — | 1,107 | 4,500 | ||||||||||||
| Income receivable | 148 | 27 | 62 | 66 | ||||||||||||
| Receivable for capital shares sold | 75 | 24 | 4 | 248 | ||||||||||||
Prepaid expenses | 2 | 1 | 4 | 1 | ||||||||||||
Total Assets | 105,030 | 40,847 | 24,637 | 33,348 | ||||||||||||
| LIABILITIES: | ||||||||||||||||
| Payable for income distributions | 88 | 24 | — | 42 | ||||||||||||
| Payable for capital shares redeemed | 37 | — | — | — | ||||||||||||
| Payable for investment securities purchased | — | 199 | — | — | ||||||||||||
| Investment adviser fees payable | 53 | 20 | 17 | 13 | ||||||||||||
| Shareholder servicing & distribution fees payable | 24 | 10 | 6 | 11 | ||||||||||||
| Administrative fees payable | 4 | 2 | 1 | 1 | ||||||||||||
Accrued expenses | 10 | 4 | 14 | 4 | ||||||||||||
Total Liabilities | 216 | 259 | 38 | 71 | ||||||||||||
Net Assets | $ | 104,814 | $ | 40,588 | $ | 24,599 | $ | 33,277 | ||||||||
| NET ASSETS: | ||||||||||||||||
| Paid-in Capital (unlimited authorization — $0.01 par value) | $ | 114,098 | $ | 40,762 | $ | 27,331 | $ | 34,833 | ||||||||
| Undistributed (distributions in excess of) net investment income | (2 | ) | — | 88 | 2 | |||||||||||
| Accumulated net realized loss on investments | (8,464 | ) | (5,014 | ) | (6,160 | ) | (3,945 | ) | ||||||||
Net unrealized appreciation (depreciation) on investments | (818 | ) | 4,840 | 3,340 | 2,387 | |||||||||||
Net Assets | $ | 104,814 | $ | 40,588 | $ | 24,599 | $ | 33,277 | ||||||||
| Institutional Class Shares ($Dollars): | ||||||||||||||||
| Net Assets | $ | 94,725,558 | $ | 31,317,217 | $ | 3,330,862 | $ | 11,258,055 | ||||||||
| Total shares outstanding at end of year | 12,327,390 | 4,083,245 | 160,404 | 1,085,914 | ||||||||||||
| Net asset value, offering and redemption price per share | ||||||||||||||||
| (net assets ÷ shares outstanding) | $ | 7.68 | $ | 7.67 | $ | 20.77 | $ | 10.37 | ||||||||
| Class N Shares ($Dollars): | ||||||||||||||||
| Net Assets | $ | 10,088,690 | $ | 9,271,148 | $ | 4,760,574 | $ | 22,019,443 | ||||||||
| Total shares outstanding at end of year | 1,315,163 | 1,221,624 | 234,138 | 2,124,759 | ||||||||||||
| Net asset value, offering and redemption price per share | ||||||||||||||||
| (net assets ÷ shares outstanding) | $ | 7.67 | $ | 7.59 | $ | 20.33 | $ | 10.36 | ||||||||
| Class R Shares ($Dollars): | ||||||||||||||||
| Net Assets | $ | — | $ | — | $ | 16,507,823 | $ | — | ||||||||
| Total shares outstanding at end of year | — | — | 810,238 | — | ||||||||||||
| Net asset value and redemption price per share | ||||||||||||||||
| (net assets ÷ shares outstanding) | $ | — | $ | — | $ | 20.37 | $ | — | ||||||||
| Maximum offering price per share | ||||||||||||||||
| (net asset value ÷ 96.50%) | $ | — | $ | — | $ | 21.11 | $ | — | ||||||||
| Amounts designated as “—” are either $0 or have been rounded to $0. |
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 80
| statements of assets and liabilities (000) |
September 30, 2010 |
Limited Maturity Fixed Income Fund | Full Maturity Fixed Income Fund | Diversified Equity Fund | Socially Responsible Equity Fund | |||||||||||||
| ASSETS: | ||||||||||||||||
Cost of securities | $ | 39,104 | $ | 47,871 | $ | 62,044 | $ | 59,328 | ||||||||
| Investments in securities at value | $ | 40,214 | $ | 50,403 | $ | 66,202 | $ | 62,143 | ||||||||
| Cash | — | — | — | 9 | ||||||||||||
| Dividend and interest receivable | 324 | 414 | 41 | 79 | ||||||||||||
| Receivable for investment securities sold | — | 182 | 521 | — | ||||||||||||
| Receivable for capital shares sold | 2,067 | 39 | 1 | 53 | ||||||||||||
Prepaid expenses | 1 | 1 | 1 | 1 | ||||||||||||
Total Assets | 42,606 | 51,039 | 66,766 | 62,285 | ||||||||||||
| LIABILITIES: | ||||||||||||||||
| Payable for income distributions | 16 | 18 | — | — | ||||||||||||
| Payable for capital shares redeemed | 4 | 1 | 2,506 | 47 | ||||||||||||
| Payable for investment securities purchased | — | 1,394 | 767 | — | ||||||||||||
| Investment adviser fees payable | 17 | 20 | 40 | 37 | ||||||||||||
| Distribution fees payable | 4 | 2 | 1 | 1 | ||||||||||||
| Administrative fees payable | 2 | 2 | 3 | 2 | ||||||||||||
| Shareholder Servicing Fees Payable | — | — | 1 | — | ||||||||||||
| Payable to custodian | — | 5 | — | — | ||||||||||||
| Other payables | — | 1 | — | — | ||||||||||||
Accrued expenses | 22 | 22 | 29 | 28 | ||||||||||||
Total Liabilities | 65 | 1,465 | 3,347 | 115 | ||||||||||||
Net Assets | $ | 42,541 | $ | 49,574 | $ | 63,419 | $ | 62,170 | ||||||||
| �� | ||||||||||||||||
| NET ASSETS: | ||||||||||||||||
| Paid-in Capital (unlimited authorization — $0.01 par value) | $ | 44,246 | $ | 46,892 | $ | 83,964 | $ | 69,997 | ||||||||
| Undistributed (distribution in excess of) net investment income | (1 | ) | 1 | (1 | ) | 1 | ||||||||||
| Accumulated net realized gain (loss) on investments | (2,814 | ) | 149 | (24,702 | ) | (10,643 | ) | |||||||||
Net unrealized appreciation on investments | 1,110 | 2,532 | 4,158 | 2,815 | ||||||||||||
Net Assets | $ | 42,541 | $ | 49,574 | $ | 63,419 | $ | 62,170 | ||||||||
| Institutional Class Shares ($Dollars): | ||||||||||||||||
| Net Assets | $ | 33,278,758 | $ | 45,755,575 | $ | 56,809,170 | $ | 59,746,418 | ||||||||
| Total shares outstanding at end of year | 2,968,366 | 4,192,898 | 4,780,284 | 6,783,334 | ||||||||||||
| Net asset value, offering and redemption price per share | ||||||||||||||||
| (net assets ÷ shares outstanding) | $ | 11.21 | $ | 10.91 | $ | 11.88 | $ | 8.81 | ||||||||
| Class N Shares ($Dollars): | ||||||||||||||||
| Net Assets | $ | 9,262,379 | $ | 3,818,385 | $ | 6,609,760 | $ | 2,424,030 | ||||||||
| Total shares outstanding at end of year | 825,642 | 350,154 | 554,680 | 275,628 | ||||||||||||
| Net asset value, offering and redemption price per share | ||||||||||||||||
| (net assets ÷ shares outstanding) | $ | 11.22 | $ | 10.90 | $ | 11.92 | $ | 8.79 | ||||||||
| Amounts designated as “—” are either $0 or have been rounded to $0. |
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 81
| statements of operations |
For the year ended September 30, 2010 |
Prime Money Market Fund (000) | Government Money Market Fund (000) | California Tax Exempt Money Market Fund (000) | ||||||||||
| INCOME: | ||||||||||||
| Interest Income | $ | 4,524 | $ | 6,023 | $ | 2,142 | ||||||
Dividend Income | 2 | — | — | |||||||||
Total Investment Income | 4,526 | 6,023 | 2,142 | |||||||||
| EXPENSES: | ||||||||||||
| Investment Advisory Fee | 3,471 | 7,448 | 2,512 | |||||||||
| Shareholder Servicing Fees — Institutional Class | 1,274 | 236 | 398 | |||||||||
Shareholder Servicing Fees — Class N (1) | 4,002 | 18,566 | 5,370 | |||||||||
Shareholder Servicing Fees — Class S (1) | 2,589 | 2,211 | 412 | |||||||||
| Administration Fee | 699 | 1,441 | 468 | |||||||||
| Transfer Agent Fees | 127 | 263 | 85 | |||||||||
| Trustee Fees | 75 | 155 | 50 | |||||||||
| Professional Fees | 221 | 471 | 151 | |||||||||
| Custody Fees | 62 | 138 | 44 | |||||||||
| Printing Fees | 57 | 151 | 43 | |||||||||
| Registration Fees | 51 | 96 | 31 | |||||||||
Insurance and Other Expenses | 151 | 309 | 100 | |||||||||
Total Expenses | 12,779 | 31,485 | 9,664 | |||||||||
| Less, Waivers of: | ||||||||||||
| Investment Advisory Fees | (1,372 | ) | (5,102 | ) | (1,560 | ) | ||||||
| Shareholder Servicing Fees — Institutional Class | (1,258 | ) | (236 | ) | (398 | ) | ||||||
Shareholder Servicing Fees — Class N (1) | (3,774 | ) | (18,200 | ) | (5,260 | ) | ||||||
Shareholder Servicing Fees — Class S (1) | (2,372 | ) | (2,124 | ) | (395 | ) | ||||||
| Administration Fees | (105 | ) | (216 | ) | (70 | ) | ||||||
Transfer Agent Fees | (127 | ) | (263 | ) | (85 | ) | ||||||
Net Expenses | 3,771 | 5,344 | 1,896 | |||||||||
Net Investment Income | 755 | 679 | 246 | |||||||||
Net Realized Gain (Loss) From Securities Transactions | — | (5 | ) | 10 | ||||||||
Net Increase in Net Assets Resulting from Operations | $ | 755 | $ | 674 | $ | 256 | ||||||
| (1) | Includes class specific distribution expenses. |
| Amounts designated as “—” are either $0 or have been rounded to $0. |
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 82
| statements of operations |
For the year ended September 30, 2010 |
Corporate Bond Fund (000) | Government Bond Fund (000) | California Tax Exempt Bond Fund (000) | High Yield Bond Fund (000) | |||||||||||||
| INCOME: | ||||||||||||||||
| Interest Income | $ | 4,048 | $ | 3,522 | $ | 1,445 | $ | 4,573 | ||||||||
Dividend Income | 2 | 1 | 1 | 2 | ||||||||||||
Total Investment Income | 4,050 | 3,523 | 1,446 | 4,575 | ||||||||||||
| EXPENSES: | ||||||||||||||||
| Investment Advisory Fee | 399 | 602 | 111 | 345 | ||||||||||||
| Shareholder Servicing Fees — Institutional Class | 245 | 341 | 97 | 60 | ||||||||||||
Shareholder Servicing Fees — Class N (1) | 8 | 17 | 11 | 121 | ||||||||||||
| Administration Fee | 50 | 71 | 21 | 23 | ||||||||||||
| Transfer Agent Fees | 9 | 13 | 4 | 4 | ||||||||||||
| Trustee Fees | 5 | 7 | 2 | 2 | ||||||||||||
| Professional Fees | 16 | 23 | 6 | 8 | ||||||||||||
| Printing Fees | 5 | 8 | 2 | 3 | ||||||||||||
| Custody Fees | 5 | 7 | 2 | 2 | ||||||||||||
| Registration Fees | 3 | 3 | 1 | 1 | ||||||||||||
Insurance and Other Expenses | 9 | 11 | 4 | 4 | ||||||||||||
Total Expenses | 754 | 1,103 | 261 | 573 | ||||||||||||
Recovery of Investment Advisory Fees Previously Waived (2) | 2 | — | — | — | ||||||||||||
| Less, Waivers of: | ||||||||||||||||
| Investment Advisory Fees | (1 | ) | (101 | ) | (46 | ) | (43 | ) | ||||||||
Transfer Agent Fees | (9 | ) | (13 | ) | (4 | ) | (4 | ) | ||||||||
Net Expenses | 746 | 989 | 211 | 526 | ||||||||||||
Net Investment Income | 3,304 | 2,534 | 1,235 | 4,049 | ||||||||||||
| Net Realized Gain From Securities Transactions | 699 | 654 | 373 | 989 | ||||||||||||
Net Change in Unrealized Appreciation on Investments | 2,293 | 1,657 | 173 | 2,994 | ||||||||||||
Net Increase in Net Assets Resulting From Operations | $ | 6,296 | $ | 4,845 | $ | 1,781 | $ | 8,032 | ||||||||
| (1) | Includes class specific distribution expenses. |
| (2) | See Note 4 for Advisory Fees recovered. |
| Amounts designated as “—” are either $0 or have been rounded to $0. |
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 83
| statements of operations |
For the year ended September 30, 2010 |
Large Cap Value Equity Fund (000) | Large Cap Growth Equity Fund (000) | RCB Small Cap Value Fund (000) | Multi-Asset Fund (000) | |||||||||||||
| INCOME: | ||||||||||||||||
| Dividend Income | $ | 2,201 | $ | 546 | $ | 375 | $ | 632 | ||||||||
| Interest Income | — | — | 1 | 13 | ||||||||||||
| Income from Affiliated Investments | — | — | — | 159 | ||||||||||||
Less: Foreign Taxes Withheld | (1 | ) | — | — | — | |||||||||||
Total Investment Income | 2,200 | 546 | 376 | 804 | ||||||||||||
| EXPENSES: | ||||||||||||||||
| Investment Advisory Fee | 607 | 235 | 205 | 144 | ||||||||||||
| Shareholder Servicing Fees — Institutional Class | 220 | 67 | 7 | 23 | ||||||||||||
Shareholder Servicing Fees — Class N (1) | 49 | 47 | 23 | 97 | ||||||||||||
Shareholder Servicing Fees — Class R (1) | — | — | 84 | — | ||||||||||||
| Administration Fee | 49 | 18 | 12 | 15 | ||||||||||||
| Transfer Agent Fees | 9 | 3 | 48 | 3 | ||||||||||||
| Trustee Fees | 5 | 2 | 1 | 2 | ||||||||||||
| Professional Fees | 15 | 5 | 4 | 5 | ||||||||||||
| Printing Fees | 5 | 2 | 1 | 1 | ||||||||||||
| Custody Fees | 5 | 2 | 1 | 1 | ||||||||||||
| Registration Fees | 3 | 1 | 1 | 1 | ||||||||||||
Insurance and Other Expenses | 9 | 3 | 4 | 3 | ||||||||||||
Total Expenses | 976 | 385 | 391 | 295 | ||||||||||||
| Less, Waiver/Reimbursement of: | ||||||||||||||||
Shareholder Servicing Fees — Class R (1) | — | — | (66 | ) | — | |||||||||||
Transfer Agent Fees | (9 | ) | (3 | ) | (2 | ) | (3 | ) | ||||||||
Net Expenses | 967 | 382 | 323 | 292 | ||||||||||||
Net Investment Income | 1,233 | 164 | 53 | 512 | ||||||||||||
| Net Realized Gain (Loss) From Securities Transactions | 2,188 | (1,035 | ) | 3,169 | 266 | |||||||||||
| Net Realized Gain From Affiliated Investments | — | — | — | 24 | ||||||||||||
| Net Change in Unrealized Appreciation (Depreciation) on Investments | 2,901 | 4,167 | (503 | ) | 1,144 | |||||||||||
Net Change in Unrealized Appreciation on Affiliated Investments | — | — | — | 86 | ||||||||||||
Net Increase in Net Assets Resulting From Operations | $ | 6,322 | $ | 3,296 | $ | 2,719 | $ | 2,032 | ||||||||
| (1) | Includes class specific distribution expenses. |
| Amounts designated as “—” are either $0 or have been rounded to $0. |
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 84
| statements of operations |
For the year ended September 30, 2010 |
Limited Maturity Fixed Income Fund (000) | Full Maturity Fixed Income Fund (000) | Diversified Equity Fund (000) | Socially Responsible Equity Fund (000) | |||||||||||||
| INCOME: | ||||||||||||||||
| Interest Income | $ | 1,152 | $ | 1,827 | $ | — | $ | — | ||||||||
| Dividend Income | — | 1 | 915 | 1,163 | ||||||||||||
Less: Foreign Taxes Withheld | — | — | (6 | ) | (19 | ) | ||||||||||
Total Investment Income | 1,152 | 1,828 | 909 | 1,144 | ||||||||||||
| EXPENSES: | ||||||||||||||||
| Investment Advisory Fee | 227 | 223 | 471 | 437 | ||||||||||||
| Shareholder Servicing Fees — Class N | 15 | 5 | 16 | 4 | ||||||||||||
| Distribution Expense — Class N | 15 | 5 | 16 | 4 | ||||||||||||
| Transfer Agent Fees | 44 | 42 | 59 | 55 | ||||||||||||
| Administration Fee | 23 | 23 | 32 | 29 | ||||||||||||
| Trustee Fees | 2 | 2 | 3 | 3 | ||||||||||||
| Printing Fees | 8 | 9 | 8 | 11 | ||||||||||||
| Professional Fees | 7 | 7 | 9 | 9 | ||||||||||||
| Custody Fees | 5 | 4 | 6 | 6 | ||||||||||||
| Registration Fees | 1 | 1 | 2 | 1 | ||||||||||||
Insurance and Other Expenses | 6 | 5 | 8 | 7 | ||||||||||||
Total Expenses | 353 | 326 | 630 | 566 | ||||||||||||
Recovery of Investment Advisory Fees Previously Waived (1) | 12 | — | — | — | ||||||||||||
| Less, Waiver of: | ||||||||||||||||
| Shareholder Servicing Fees — Class N | (15 | ) | (5 | ) | (6 | ) | (4 | ) | ||||||||
| Distribution Expenses — Class N | — | — | (10 | ) | — | |||||||||||
Transfer Agent Fees | (4 | ) | (4 | ) | (6 | ) | (5 | ) | ||||||||
Net Expenses | 346 | 317 | 608 | 557 | ||||||||||||
Net Investment Income | 806 | 1,511 | 301 | 587 | ||||||||||||
| Net Realized Gain (Loss) From Securities Transactions | 216 | 189 | 1,377 | (1,862 | ) | |||||||||||
Net Change in Unrealized Appreciation on Investments | 317 | 2,017 | 1,658 | 5,910 | ||||||||||||
Net Increase in Net Assets Resulting from Operations | $ | 1,339 | $ | 3,717 | $ | 3,336 | $ | 4,635 | ||||||||
| (1) | See Note 4 for Advisory Fees recovered. |
| Amounts designated as “—” are either $0 or have been rounded to $0. |
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 85
| statements of changes in net assets |
For the years ended September 30 |
Prime Money Market Fund (000) | Government Money Market Fund (000) | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
| OPERATIONS: | ||||||||||||||||
| Net Investment Income | $ | 755 | $ | 7,504 | $ | 679 | $ | 6,637 | ||||||||
| Net Realized Gain (Loss) from Security Transactions | — | 117 | (5 | ) | 4 | |||||||||||
Net Change in Unrealized Appreciation on Investments | — | — | — | — | ||||||||||||
Net Increase in Net Assets Resulting from Operations | 755 | 7,621 | 674 | 6,641 | ||||||||||||
| DIVIDENDS AND DISTRIBUTIONS FROM: | ||||||||||||||||
| Net Investment Income: | ||||||||||||||||
| Institutional Class | (430 | ) | (2,739 | ) | (38 | ) | (356 | ) | ||||||||
| Class N | (240 | ) | (3,352 | ) | (613 | ) | (5,784 | ) | ||||||||
| Class S | (85 | ) | (1,412 | ) | (29 | ) | (495 | ) | ||||||||
| Realized Capital Gains: | ||||||||||||||||
| Institutional Class | (58 | ) | — | — | — | |||||||||||
| Class N | (68 | ) | — | — | — | |||||||||||
Class S | (40 | ) | — | — | — | |||||||||||
Total Dividends and Distributions | (921 | ) | (7,503 | ) | (680 | ) | (6,635 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: (1) | ||||||||||||||||
| Institutional Class: | ||||||||||||||||
| Shares Issued | 1,322,472 | 1,288,265 | 618,772 | 655,511 | ||||||||||||
| Shares Issued in Lieu of Dividends and Distributions | 83 | 442 | 1 | 8 | ||||||||||||
Shares Redeemed | (1,375,843 | ) | (1,278,342 | ) | (661,586 | ) | (632,330 | ) | ||||||||
Increase (Decrease) in Net Assets from Institutional Class Share Transactions | (53,288 | ) | 10,365 | (42,813 | ) | 23,189 | ||||||||||
| Class N: | ||||||||||||||||
| Shares Issued | 1,396,173 | 2,117,635 | 4,589,006 | 4,478,647 | ||||||||||||
| Shares Issued in Lieu of Dividends and Distributions | 195 | 1,555 | 504 | 4,161 | ||||||||||||
Shares Redeemed | (1,620,744 | ) | (2,586,377 | ) | (4,540,616 | ) | (4,940,602 | ) | ||||||||
Increase (Decrease) in Net Assets from Class N Share Transactions | (224,376 | ) | (467,187 | ) | 48,894 | (457,794 | ) | |||||||||
| Class S: | ||||||||||||||||
| Shares Issued | 1,102,036 | 1,140,178 | 990,276 | 659,453 | ||||||||||||
| Shares Issued in Lieu of Dividends and Distributions | — | — | — | — | ||||||||||||
Shares Redeemed | (1,122,183 | ) | (1,401,263 | ) | (940,420 | ) | (769,358 | ) | ||||||||
Increase (Decrease) in Net Assets from Class S Share Transactions | (20,147 | ) | (261,085 | ) | 49,856 | (109,905 | ) | |||||||||
Net Increase (Decrease) in Net Assets from Share Transactions | (297,811 | ) | (717,907 | ) | 55,937 | (544,510 | ) | |||||||||
Total Increase (Decrease) in Net Assets | (297,977 | ) | (717,789 | ) | 55,931 | (544,504 | ) | |||||||||
| NET ASSETS: | ||||||||||||||||
Beginning of Year | 1,572,857 | 2,290,646 | 2,971,852 | 3,516,356 | ||||||||||||
End of Year | $ | 1,274,880 | $ | 1,572,857 | $ | 3,027,783 | $ | 2,971,852 | ||||||||
Undistributed (Distribution in Excess of) Net Investment Income | $ | 38 | $ | 87 | $ | 20 | $ | 17 | ||||||||
| (1) | See Note 8 for shares issued and redeemed. |
| Amounts designated as “—” are either $0 or have been rounded to $0. |
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 86
California Tax Exempt Money Market Fund (000) | Corporate Bond Fund (000) | Government Bond Fund (000) | California Tax Exempt Bond Fund (000) | |||||||||||||||||||||||||||
2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | |||||||||||||||||||||||
| $ | 246 | $ | 2,951 | $ | 3,304 | $ | 2,952 | $ | 2,534 | $ | 2,406 | $ | 1,235 | $ | 1,151 | |||||||||||||||
| 10 | — | 699 | (674 | ) | 654 | 453 | 373 | (93 | ) | |||||||||||||||||||||
| — | — | 2,293 | 6,838 | 1,657 | 805 | 173 | 1,914 | |||||||||||||||||||||||
| 256 | 2,951 | 6,296 | 9,116 | 4,845 | 3,664 | 1,781 | 2,972 | |||||||||||||||||||||||
| (62 | ) | (612 | ) | (3,259 | ) | (2,926 | ) | (3,484 | ) | (2,343 | ) | (1,175 | ) | (1,110 | ) | |||||||||||||||
| (179 | ) | (2,109 | ) | (48 | ) | (26 | ) | (80 | ) | (92 | ) | (60 | ) | (41 | ) | |||||||||||||||
| (5 | ) | (232 | ) | — | — | — | — | — | — | |||||||||||||||||||||
| (1 | ) | — | — | — | — | — | — | — | ||||||||||||||||||||||
| (7 | ) | — | — | — | — | — | — | — | ||||||||||||||||||||||
| (1 | ) | — | — | — | — | — | — | — | ||||||||||||||||||||||
| (255 | ) | (2,953 | ) | (3,307 | ) | (2,952 | ) | (3,564 | ) | (2,435 | ) | (1,235 | ) | (1,151 | ) | |||||||||||||||
| 1,024,504 | 1,126,167 | 35,743 | 27,853 | 118,193 | 22,819 | 12,067 | 12,423 | |||||||||||||||||||||||
| — | — | 892 | 676 | 2,306 | 677 | 500 | 403 | |||||||||||||||||||||||
| (1,025,845 | ) | (1,142,015 | ) | (22,899 | ) | (15,448 | ) | (38,343 | ) | (18,805 | ) | (11,199 | ) | (10,248 | ) | |||||||||||||||
| (1,341 | ) | (15,848 | ) | 13,736 | 13,081 | 82,156 | 4,691 | 1,368 | 2,578 | |||||||||||||||||||||
| 1,197,782 | 1,708,583 | 2,426 | 488 | 1,787 | 1,066 | 2,974 | 1,359 | |||||||||||||||||||||||
| 178 | 1,814 | 19 | 13 | 33 | 39 | 29 | 12 | |||||||||||||||||||||||
| (1,263,962 | ) | (1,886,349 | ) | (1,107 | ) | (171 | ) | (1,705 | ) | (808 | ) | (1,634 | ) | (598 | ) | |||||||||||||||
| (66,002 | ) | (175,952 | ) | 1,338 | 330 | 115 | 297 | 1,369 | 773 | |||||||||||||||||||||
| 145,553 | 354,327 | — | — | — | — | — | — | |||||||||||||||||||||||
| — | — | — | — | — | — | — | — | |||||||||||||||||||||||
| (171,684 | ) | (421,688 | ) | — | — | — | — | — | — | |||||||||||||||||||||
| (26,131 | ) | (67,361 | ) | — | — | — | — | — | — | |||||||||||||||||||||
| (93,474 | ) | (259,161 | ) | 15,074 | 13,411 | 82,271 | 4,988 | 2,737 | 3,351 | |||||||||||||||||||||
| (93,473 | ) | (259,163 | ) | 18,063 | 19,575 | 83,552 | 6,217 | 3,283 | 5,172 | |||||||||||||||||||||
| 920,815 | 1,179,978 | 89,892 | 70,317 | 75,075 | 68,858 | 40,483 | 35,311 | |||||||||||||||||||||||
| $ | 827,342 | $ | 920,815 | $ | 107,955 | $ | 89,892 | $ | 158,627 | $ | 75,075 | $ | 43,766 | $ | 40,483 | |||||||||||||||
| $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 87
| statements of changes in net assets |
For the years ended September 30 |
High Yield Bond Fund (000) | Large Cap Value Equity Fund (000) | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
| OPERATIONS: | ||||||||||||||||
| Net Investment Income | $ | 4,049 | $ | 2,698 | $ | 1,233 | $ | 1,621 | ||||||||
| Net Realized Gain (Loss) from Security Transactions | 989 | (3,203 | ) | 2,188 | (8,654 | ) | ||||||||||
Net Change in Unrealized Appreciation (Depreciation) on Investments and Affiliated Investments | 2,994 | 4,440 | 2,901 | (2,607 | ) | |||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations | 8,032 | 3,935 | 6,322 | (9,640 | ) | |||||||||||
| DIVIDENDS AND DISTRIBUTIONS FROM: | ||||||||||||||||
| Net Investment Income: | ||||||||||||||||
| Institutional Class | (2,138 | ) | (1,246 | ) | (1,133 | ) | (1,358 | ) | ||||||||
| Class N | (1,911 | ) | (1,509 | ) | (101 | ) | (137 | ) | ||||||||
Class R | — | — | — | — | ||||||||||||
Total Dividends and Distributions | (4,049 | ) | (2,755 | ) | (1,234 | ) | (1,495 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: (1) | ||||||||||||||||
| Institutional Class: | ||||||||||||||||
| Shares Issued | 23,442 | 2,072 | 22,677 | 20,103 | ||||||||||||
| Shares Issued in Lieu of Dividends and Distributions | 1,010 | 834 | 812 | 950 | ||||||||||||
Shares Redeemed | (8,902 | ) | (999 | ) | (14,669 | ) | (18,562 | ) | ||||||||
Increase (Decrease) in Net Assets from Institutional Class Share Transactions | 15,550 | 1,907 | 8,820 | 2,491 | ||||||||||||
| Class N: | ||||||||||||||||
| Shares Issued | 4,077 | 2,628 | 1,648 | 538 | ||||||||||||
| Shares Issued in Lieu of Dividends and Distributions | 1,233 | 1,002 | 67 | 93 | ||||||||||||
Shares Redeemed | (2,980 | ) | (2,172 | ) | (1,077 | ) | (1,792 | ) | ||||||||
Increase (Decrease) in Net Assets from Class N Share Transactions | 2,330 | 1,458 | 638 | (1,161 | ) | |||||||||||
| Class R: | ||||||||||||||||
| Shares Issued | — | — | — | — | ||||||||||||
| Shares Issued in Lieu of Dividends and Distributions | — | — | — | — | ||||||||||||
Shares Redeemed | — | — | — | — | ||||||||||||
Decrease in Net Assets from Class R Share Transactions | — | — | — | — | ||||||||||||
Net Increase (Decrease) in Net Assets from Share Transactions | 17,880 | 3,365 | 9,458 | 1,330 | ||||||||||||
Total Increase (Decrease) in Net Assets | 21,863 | 4,545 | 14,546 | (9,805 | ) | |||||||||||
| NET ASSETS: | ||||||||||||||||
Beginning of Year | 35,992 | 31,447 | 90,268 | 100,073 | ||||||||||||
End of Year | $ | 57,855 | $ | 35,992 | $ | 104,814 | $ | 90,268 | ||||||||
Undistributed (Distribution in Excess of) Net Investment Income | $ | — | $ | — | $ | (2 | ) | $ | (1 | ) | ||||||
| (1) | See Note 8 for shares issued and redeemed. |
| Amounts designated as “—” are either $0 or have been rounded to $0. |
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 88
Large Cap Growth Equity Fund (000) | RCB Small Cap Value Fund (000) | Multi-Asset Fund (000) | ||||||||||||||||||||
2010 | 2009 | 2010 | 2009 | 2010 | 2009 | |||||||||||||||||
| $ | 164 | $ | 212 | $ | 53 | $ | (4 | ) | $ | 512 | $ | 375 | ||||||||||
| (1,035 | ) | (1,908 | ) | 3,169 | (8,609 | ) | 290 | (3,856 | ) | |||||||||||||
| 4,167 | (113 | ) | (503 | ) | 10,677 | 1,230 | 3,982 | |||||||||||||||
| 3,296 | (1,809 | ) | 2,719 | 2,064 | 2,032 | 501 | ||||||||||||||||
| (139 | ) | (182 | ) | — | (29 | ) | (187 | ) | (149 | ) | ||||||||||||
| (25 | ) | (40 | ) | — | (69 | ) | (334 | ) | (226 | ) | ||||||||||||
| — | — | (14 | ) | (341 | ) | — | — | |||||||||||||||
| (164 | ) | (222 | ) | (14 | ) | (439 | ) | (521 | ) | (375 | ) | |||||||||||
| 8,758 | 6,861 | 1,236 | 750 | 5,018 | 4,298 | |||||||||||||||||
| 48 | 56 | — | 29 | 152 | 90 | |||||||||||||||||
| (7,928 | ) | (8,638 | ) | (491 | ) | (537 | ) | (2,817 | ) | (6,506 | ) | |||||||||||
| 878 | (1,721 | ) | 745 | 242 | 2,353 | (2,118 | ) | |||||||||||||||
| 710 | 554 | 369 | 17 | 7,196 | 3,250 | |||||||||||||||||
| 15 | 25 | — | 50 | 180 | 107 | |||||||||||||||||
| (1,317 | ) | (2,072 | ) | (346 | ) | (403 | ) | (3,223 | ) | (3,554 | ) | |||||||||||
| (592 | ) | (1,493 | ) | 23 | (336 | ) | 4,153 | (197 | ) | |||||||||||||
| — | — | 704 | 961 | — | — | |||||||||||||||||
| — | — | 14 | 325 | — | — | |||||||||||||||||
| — | — | (2,890 | ) | (4,706 | ) | — | — | |||||||||||||||
| — | — | (2,172 | ) | (3,420 | ) | — | — | |||||||||||||||
| 286 | (3,214 | ) | (1,404 | ) | (3,514 | ) | 6,506 | (2,315 | ) | |||||||||||||
| 3,418 | (5,245 | ) | 1,301 | (1,889 | ) | 8,017 | (2,189 | ) | ||||||||||||||
| 37,170 | 42,415 | 23,298 | 25,187 | 25,260 | 27,449 | |||||||||||||||||
| $ | 40,588 | $ | 37,170 | $ | 24,599 | $ | 23,298 | $ | 33,277 | $ | 25,260 | |||||||||||
| $ | — | $ | — | $ | 88 | $ | 15 | $ | 2 | $ | 11 | |||||||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 89
| statements of changes in net assets |
For the years ended September 30 |
Limited Maturity Fixed Income Fund (000) | Full Maturity Fixed Income Fund (000) | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
| OPERATIONS: | ||||||||||||||||
| Net Investment Income | $ | 806 | $ | 1,021 | $ | 1,511 | $ | 1,661 | ||||||||
| Net Realized Gain (Loss) from Security Transactions | 216 | (559 | ) | 189 | 725 | |||||||||||
Net Change in Unrealized Appreciation on Investments | 317 | 2,569 | 2,017 | 1,503 | ||||||||||||
Increase (Decrease) in Net Assets Resulting from Operations | 1,339 | 3,031 | 3,717 | 3,889 | ||||||||||||
| DIVIDENDS AND DISTRIBUTIONS FROM: | ||||||||||||||||
| Net Investment Income: | ||||||||||||||||
| Institutional Class | (751 | ) | (1,022 | ) | (1,464 | ) | (1,627 | ) | ||||||||
| Class N | (97 | ) | (23 | ) | (71 | ) | (30 | ) | ||||||||
| Realized Capital Gains: | ||||||||||||||||
| Institutional Class | — | — | (195 | ) | — | |||||||||||
| Class N | — | — | (9 | ) | — | |||||||||||
| Return of Capital: | ||||||||||||||||
| Institutional Class | — | — | — | — | ||||||||||||
Class N | — | — | — | — | ||||||||||||
Total Dividends and Distributions | (848 | ) | (1,045 | ) | (1,739 | ) | (1,657 | ) | ||||||||
CAPITAL SHARE TRANSACTIONS: (1) | ||||||||||||||||
| Institutional Class: | ||||||||||||||||
| Shares Issued | 26,702 | 2,957 | 4,362 | (2) | 713 | |||||||||||
| Shares Issued in Lieu of Dividends and Distributions | 535 | 690 | 1,366 | 1,272 | ||||||||||||
Shares Redeemed | (31,618 | ) | (61,014 | ) | (1,339 | ) | (7,255 | ) | ||||||||
Increase (Decrease) in Net Assets from Institutional Class Share Transactions | (4,381 | ) | (57,367 | ) | 4,389 | (5,270 | ) | |||||||||
| Class N: | ||||||||||||||||
| Shares Issued | 10,788 | 1,117 | 3,308 | 594 | ||||||||||||
| Shares Issued in Lieu of Dividends and Distributions | 97 | 23 | 89 | 23 | ||||||||||||
Shares Redeemed | (3,180 | ) | (146 | ) | (771 | ) | (264 | ) | ||||||||
Increase (Decrease) in Net Assets from Class N Share Transactions | 7,705 | 994 | 2,626 | 353 | ||||||||||||
Net Increase (Decrease) in Net Assets from Share Transactions | 3,324 | (56,373 | ) | 7,015 | (4,917 | ) | ||||||||||
Total Increase (Decrease) in Net Assets | 3,815 | (54,387 | ) | 8,993 | (2,685 | ) | ||||||||||
| NET ASSETS: | ||||||||||||||||
Beginning of Year | 38,726 | 93,113 | 40,581 | 43,266 | ||||||||||||
End of Year | $ | 42,541 | $ | 38,726 | $ | 49,574 | $ | 40,581 | ||||||||
Undistributed (Distribution in Excess of) Net Investment Income | $ | (1 | ) | $ | (1 | ) | $ | 1 | $ | (1 | ) | |||||
| (1) | See Note 8 for shares issued and redeemed. |
| (2) | Includes subscriptions as a result of an in-kind transfer of securities (see Note 9). |
| Amounts designated as “—” are either $0 or have been rounded to $0. |
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 90
Diversified Equity Fund (000) | Socially Responsible Equity Fund (000) | ||||||||||||||
2010 | 2009 | 2010 | 2009 | ||||||||||||
| $ | 301 | $ | 743 | $ | 587 | $ | 742 | ||||||||
| 1,377 | (17,983 | ) | (1,862 | ) | (7,553 | ) | |||||||||
| 1,658 | 11,578 | 5,910 | 1,221 | ||||||||||||
| 3,336 | (5,662 | ) | 4,635 | (5,590 | ) | ||||||||||
| (287 | ) | (718 | ) | (575 | ) | (782 | ) | ||||||||
| (17 | ) | (46 | ) | (14 | ) | (14 | ) | ||||||||
| — | — | — | — | ||||||||||||
| — | — | — | — | ||||||||||||
| (2 | ) | (5 | ) | — | — | ||||||||||
| — | — | — | — | ||||||||||||
| (306 | ) | (769 | ) | (589 | ) | (796 | ) | ||||||||
| 8,841 | (2) | 8,974 | 11,228 | 10,490 | |||||||||||
| 250 | 649 | 575 | 782 | ||||||||||||
| (5,387 | ) | (28,487 | ) | (8,409 | ) | (5,813 | ) | ||||||||
| 3,704 | (18,864 | ) | 3,394 | 5,459 | |||||||||||
| 1,605 | 284 | 1,491 | 679 | ||||||||||||
| 17 | 45 | 14 | 14 | ||||||||||||
| (922 | ) | (1,148 | ) | (282 | ) | (400 | ) | ||||||||
| 700 | (819 | ) | 1,223 | 293 | |||||||||||
| 4,404 | (19,683 | ) | 4,617 | 5,752 | |||||||||||
| 7,434 | (26,114 | ) | 8,663 | (634 | ) | ||||||||||
| 55,985 | 82,099 | 53,507 | 54,141 | ||||||||||||
| $ | 63,419 | $ | 55,985 | $ | 62,170 | $ | 53,507 | ||||||||
| $ | (1 | ) | $ | — | $ | 1 | $ | 3 | |||||||
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 91
| financial highlights |
For a Share Outstanding Throughout Each Period For the year/period ended September 30, |
Net Asset Value Beginning of Period | Net Investment Income | Dividends from Net Investment Income | Net Asset Value End of Period | Total Return‡ | Net Assets End of Period (000) | Ratio of Expenses to Average Net Assets(1)(2) | Ratio of Net Investment Income to Average Net Assets(1) | Ratio of Expenses to Average Net Assets (Excluding Waivers & Recovered Fees)(1) | ||||||||||||||||||||||||||||
| Prime Money Market Fund | ||||||||||||||||||||||||||||||||||||
| Institutional Class (commenced operations on March 23, 1998) | ||||||||||||||||||||||||||||||||||||
| 2010 | $ | 1.00 | $ | 0.001 | $ | (0.001 | )* | $ | 1.00 | 0.09 | % | $ | 489,980 | 0.24 | % | 0.08 | % | 0.60 | % | |||||||||||||||||
| 2009 | 1.00 | 0.005 | (0.005 | ) | 1.00 | 0.46 | 543,326 | 0.44 | 0.46 | 0.65 | ||||||||||||||||||||||||||
| 2008 | 1.00 | 0.030 | (0.030 | ) | 1.00 | 3.01 | 532,931 | 0.58 | 2.90 | 0.58 | ||||||||||||||||||||||||||
| 2007 | 1.00 | 0.047 | (0.047 | ) | 1.00 | 4.85 | 438,639 | 0.59 | 4.74 | 0.60 | ||||||||||||||||||||||||||
| 2006 | 1.00 | 0.041 | (0.041 | ) | 1.00 | 4.17 | 388,171 | 0.59 | 4.12 | 0.60 | ||||||||||||||||||||||||||
| Class N (commenced operations on October 18, 1999) | ||||||||||||||||||||||||||||||||||||
| 2010 | $ | 1.00 | $ | 0.000 | ^ | $ | (0.000 | )*^ | $ | 1.00 | 0.06 | % | $ | 432,235 | 0.28 | % | 0.04 | % | 1.10 | % | ||||||||||||||||
| 2009 | 1.00 | 0.003 | (0.003 | ) | 1.00 | 0.33 | 656,769 | 0.61 | 0.39 | 1.15 | ||||||||||||||||||||||||||
| 2008 | 1.00 | 0.027 | (0.027 | ) | 1.00 | 2.78 | 1,123,900 | 0.80 | 2.65 | 1.08 | ||||||||||||||||||||||||||
| 2007 | 1.00 | 0.045 | (0.045 | ) | 1.00 | 4.62 | 870,537 | 0.81 | 4.52 | 1.10 | ||||||||||||||||||||||||||
| 2006 | 1.00 | 0.039 | (0.039 | ) | 1.00 | 3.94 | 640,366 | 0.81 | 3.95 | 1.10 | ||||||||||||||||||||||||||
| Class S (commenced operations on October 26, 1999) | ||||||||||||||||||||||||||||||||||||
| 2010 | $ | 1.00 | $ | 0.000 | ^ | $ | (0.000 | )*^ | $ | 1.00 | 0.04 | % | $ | 352,575 | 0.30 | % | 0.02 | % | 1.10 | % | ||||||||||||||||
| 2009 | 1.00 | 0.002 | (0.002 | ) | 1.00 | 0.23 | 372,762 | 0.73 | 0.28 | 1.15 | ||||||||||||||||||||||||||
| 2008 | 1.00 | 0.025 | (0.025 | ) | 1.00 | 2.57 | 633,815 | 1.00 | 2.54 | 1.08 | ||||||||||||||||||||||||||
| 2007 | 1.00 | 0.043 | (0.043 | ) | 1.00 | 4.41 | 620,195 | 1.01 | 4.32 | 1.10 | ||||||||||||||||||||||||||
| 2006 | 1.00 | 0.037 | (0.037 | ) | 1.00 | 3.73 | 324,353 | 1.01 | 3.74 | 1.10 | ||||||||||||||||||||||||||
Government Money Market Fund | ||||||||||||||||||||||||||||||||||||
| Institutional Class (commenced operations on April 3, 2000) | ||||||||||||||||||||||||||||||||||||
| 2010 | $ | 1.00 | $ | 0.000 | ^ | $ | (0.000 | )^ | $ | 1.00 | 0.04 | % | $ | 81,050 | 0.17 | % | 0.04 | % | 0.62 | % | ||||||||||||||||
| 2009 | 1.00 | 0.003 | (0.003 | ) | 1.00 | 0.27 | 123,863 | 0.36 | 0.26 | 0.65 | ||||||||||||||||||||||||||
| 2008 | 1.00 | 0.027 | (0.027 | ) | 1.00 | 2.72 | 100,674 | 0.59 | 2.62 | 0.59 | ||||||||||||||||||||||||||
| 2007 | 1.00 | 0.047 | (0.047 | ) | 1.00 | 4.77 | 47,858 | 0.60 | 4.67 | 0.61 | ||||||||||||||||||||||||||
| 2006 | 1.00 | 0.040 | (0.040 | ) | 1.00 | 4.08 | 52,782 | 0.60 | 4.11 | 0.61 | ||||||||||||||||||||||||||
| Class N (commenced operations on June 21, 1999) | ||||||||||||||||||||||||||||||||||||
| 2010 | $ | 1.00 | $ | 0.000 | ^ | $ | (0.000 | )^ | $ | 1.00 | 0.02 | % | $ | 2,598,035 | 0.19 | % | 0.02 | % | 1.12 | % | ||||||||||||||||
| 2009 | 1.00 | 0.002 | (0.002 | ) | 1.00 | 0.19 | 2,549,147 | 0.47 | 0.21 | 1.13 | ||||||||||||||||||||||||||
| 2008 | 1.00 | 0.025 | (0.025 | ) | 1.00 | 2.49 | 3,006,935 | 0.81 | 2.40 | 1.09 | ||||||||||||||||||||||||||
| 2007 | 1.00 | 0.044 | (0.044 | ) | 1.00 | 4.54 | 2,291,138 | 0.82 | 4.45 | 1.11 | ||||||||||||||||||||||||||
| 2006 | 1.00 | 0.038 | (0.038 | ) | 1.00 | 3.86 | 1,940,602 | 0.82 | 3.78 | 1.11 | ||||||||||||||||||||||||||
| Class S (commenced operations on October 6, 1999) | ||||||||||||||||||||||||||||||||||||
| 2010 | $ | 1.00 | $ | 0.000 | ^ | $ | (0.000 | )^ | $ | 1.00 | 0.01 | % | $ | 348,698 | 0.20 | % | 0.01 | % | 1.12 | % | ||||||||||||||||
| 2009 | 1.00 | 0.001 | (0.001 | ) | 1.00 | 0.12 | 298,842 | 0.54 | 0.13 | 1.13 | ||||||||||||||||||||||||||
| 2008 | 1.00 | 0.023 | (0.023 | ) | 1.00 | 2.29 | 408,747 | 1.02 | 2.23 | 1.09 | ||||||||||||||||||||||||||
| 2007 | 1.00 | 0.042 | (0.042 | ) | 1.00 | 4.33 | 321,061 | 1.02 | 4.24 | 1.11 | ||||||||||||||||||||||||||
| 2006 | 1.00 | 0.036 | (0.036 | ) | 1.00 | 3.65 | 232,083 | 1.02 | 3.60 | 1.11 | ||||||||||||||||||||||||||
California Tax Exempt Money Market Fund | ||||||||||||||||||||||||||||||||||||
| Institutional Class (commenced operations on April 3, 2000) | ||||||||||||||||||||||||||||||||||||
| 2010 | $ | 1.00 | $ | 0.000 | ^ | $ | (0.000 | )*^ | $ | 1.00 | 0.04 | % | $ | 140,238 | 0.19 | % | 0.04 | % | 0.63 | % | ||||||||||||||||
| 2009 | 1.00 | 0.003 | (0.003 | ) | 1.00 | 0.33 | 141,579 | 0.30 | 0.31 | 0.65 | ||||||||||||||||||||||||||
| 2008 | 1.00 | 0.018 | (0.018 | ) | 1.00 | 1.80 | 157,427 | 0.55 | 1.69 | 0.61 | ||||||||||||||||||||||||||
| 2007 | 1.00 | 0.030 | (0.030 | ) | 1.00 | 3.01 | 89,237 | 0.55 | 2.97 | 0.62 | ||||||||||||||||||||||||||
| 2006 | 1.00 | 0.026 | (0.026 | ) | 1.00 | 2.62 | 85,014 | 0.55 | 2.60 | 0.62 | ||||||||||||||||||||||||||
| Class N (commenced operations on June 21, 1999) | ||||||||||||||||||||||||||||||||||||
| 2010 | $ | 1.00 | $ | 0.000 | ^ | $ | (0.000 | )*^ | $ | 1.00 | 0.03 | % | $ | 638,839 | 0.20 | % | 0.02 | % | 1.12 | % | ||||||||||||||||
| 2009 | 1.00 | 0.002 | (0.002 | ) | 1.00 | 0.23 | 704,840 | 0.41 | 0.25 | 1.16 | ||||||||||||||||||||||||||
| 2008 | 1.00 | 0.016 | (0.016 | ) | 1.00 | 1.57 | 880,794 | 0.78 | 1.47 | 1.11 | ||||||||||||||||||||||||||
| 2007 | 1.00 | 0.027 | (0.027 | ) | 1.00 | 2.78 | 695,318 | 0.78 | 2.73 | 1.12 | ||||||||||||||||||||||||||
| 2006 | 1.00 | 0.024 | (0.024 | ) | 1.00 | 2.39 | 631,478 | 0.78 | 2.36 | 1.12 | ||||||||||||||||||||||||||
| Class S (commenced operations on November 12, 1999) | ||||||||||||||||||||||||||||||||||||
| 2010 | $ | 1.00 | $ | 0.000 | ^ | $ | (0.000 | )*^ | $ | 1.00 | 0.01 | % | $ | 48,265 | 0.22 | % | 0.01 | % | 1.12 | % | ||||||||||||||||
| 2009 | 1.00 | 0.002 | (0.002 | ) | 1.00 | 0.17 | 74,396 | 0.54 | 0.26 | 1.16 | ||||||||||||||||||||||||||
| 2008 | 1.00 | 0.014 | (0.014 | ) | 1.00 | 1.37 | 141,757 | 0.98 | 1.40 | 1.11 | ||||||||||||||||||||||||||
| 2007 | 1.00 | 0.025 | (0.025 | ) | 1.00 | 2.57 | 178,918 | 0.98 | 2.55 | 1.12 | ||||||||||||||||||||||||||
| 2006 | 1.00 | 0.022 | (0.022 | ) | 1.00 | 2.18 | 107,131 | 0.98 | 2.17 | 1.12 | ||||||||||||||||||||||||||
| ‡ | Returns are for the period indicated and have not been annualized. Fee waivers are in effect; if they had not been in effect, performance would have been lower. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| ^ | Amount represents less than $0.001. |
| * | Includes a realized capital gain distribution of less than $0.001. |
| (1) | Annualized for periods less than one year. |
| (2) | Ratio includes waivers and previously waived investment advisory fees recovered. The impact of the recovered fees may cause a higher net expense ratio. |
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 92
Net Asset Value Beginning of Period | Net Investment Income† | Net Realized and Unrealized Gains (Losses) on Securities† | Dividends from Net Investment Income | Distri- butions from Realized Capital Gains | Net Asset Value End of Period | Total Return‡ | Net Assets End of Period (000) | Ratio of Expenses to Average Net Assets(1)(2) | Ratio of Net Investment Income to Average Net Assets(1) | Ratio of Expenses to Average Net Assets (Excluding Waivers & Recovered Fees)(1) | Portfolio Turnover Rate | |||||||||||||||||||||||||||||||||||||
| Corporate Bond Fund | ||||||||||||||||||||||||||||||||||||||||||||||||
| Institutional Class (commenced operations on January 14, 2000) | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2010 | $ | 10.56 | $ | 0.35 | $ | 0.32 | $ | (0.35 | ) | $ | — | $ | 10.88 | 6.50 | % | $ | 105,571 | 0.74 | % | 3.32 | % | 0.75 | % | 28 | % | |||||||||||||||||||||||
| 2009 | 9.76 | 0.39 | 0.80 | (0.39 | ) | — | 10.56 | 12.48 | 88,897 | 0.74 | 3.88 | 0.75 | 30 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.18 | 0.43 | (0.41 | ) | (0.44 | ) | — | 9.76 | 0.04 | 69,709 | 0.73 | 4.25 | 0.74 | 12 | ||||||||||||||||||||||||||||||||||
| 2007 | 10.17 | 0.45 | — | (0.44 | ) | — | 10.18 | 4.57 | 62,210 | 0.74 | 4.39 | 0.75 | 30 | |||||||||||||||||||||||||||||||||||
| 2006 | 10.27 | 0.42 | (0.10 | ) | (0.42 | ) | — | 10.17 | 3.19 | 55,290 | 0.75 | 4.14 | 0.75 | 25 | ||||||||||||||||||||||||||||||||||
| Class N (commenced operations on April 13, 2000) | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2010 | $ | 10.57 | $ | 0.33 | $ | 0.32 | $ | (0.33 | ) | $ | — | $ | 10.89 | 6.23 | % | $ | 2,384 | 0.99 | % | 3.05 | % | 1.00 | % | 28 | % | |||||||||||||||||||||||
| 2009 | 9.77 | 0.36 | 0.81 | (0.37 | ) | — | 10.57 | 12.19 | 995 | 0.99 | 3.59 | 1.00 | 30 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.18 | 0.41 | (0.41 | ) | (0.41 | ) | — | 9.77 | (0.11 | ) | 608 | 0.98 | 4.02 | 0.99 | 12 | |||||||||||||||||||||||||||||||||
| 2007 | 10.17 | 0.42 | 0.01 | (0.42 | ) | — | 10.18 | 4.30 | 1,043 | 0.99 | 4.13 | 1.00 | 30 | |||||||||||||||||||||||||||||||||||
| 2006 | 10.27 | 0.39 | (0.10 | ) | (0.39 | ) | — | 10.17 | 2.93 | 1,332 | 1.00 | 3.88 | 1.00 | 25 | ||||||||||||||||||||||||||||||||||
Government Bond Fund | ||||||||||||||||||||||||||||||||||||||||||||||||
| Institutional Class (commenced operations on January 14, 2000) | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2010 | $ | 10.58 | $ | 0.19 | $ | 0.16 | $ | (0.27 | ) | $ | — | $ | 10.66 | 3.37 | % | $ | 155,376 | 0.70 | % | 1.81 | % | 0.78 | % | 93 | % | |||||||||||||||||||||||
| 2009 | 10.40 | 0.35 | 0.18 | (0.35 | ) | — | 10.58 | 5.18 | 71,966 | 0.70 | 3.29 | 0.77 | 85 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.33 | 0.42 | 0.08 | (0.43 | ) | — | 10.40 | 4.87 | 66,097 | 0.70 | 4.05 | 0.77 | 36 | |||||||||||||||||||||||||||||||||||
| 2007 | 10.28 | 0.46 | 0.05 | (0.46 | ) | — | 10.33 | 5.04 | 52,606 | 0.70 | 4.50 | 0.77 | 83 | |||||||||||||||||||||||||||||||||||
| 2006 | 10.40 | 0.41 | (0.12 | ) | (0.41 | ) | — | 10.28 | 2.89 | 35,671 | 0.70 | 4.04 | 0.78 | 62 | ||||||||||||||||||||||||||||||||||
| Class N (commenced operations on April 13, 2000) | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2010 | $ | 10.60 | $ | 0.16 | $ | 0.16 | $ | (0.24 | ) | $ | — | $ | 10.68 | 3.10 | % | $ | 3,251 | 0.95 | % | 1.57 | % | 1.03 | % | 93 | % | |||||||||||||||||||||||
| 2009 | 10.42 | 0.32 | 0.18 | (0.32 | ) | — | 10.60 | 4.91 | 3,109 | 0.95 | 3.04 | 1.02 | 85 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.35 | 0.40 | 0.07 | (0.40 | ) | — | 10.42 | 4.59 | 2,761 | 0.95 | 3.80 | 1.02 | 36 | |||||||||||||||||||||||||||||||||||
| 2007 | 10.30 | 0.44 | 0.04 | (0.43 | ) | — | 10.35 | 4.77 | 2,632 | 0.95 | 4.25 | 1.02 | 83 | |||||||||||||||||||||||||||||||||||
| 2006 | 10.42 | 0.39 | (0.12 | ) | (0.39 | ) | — | 10.30 | 2.63 | 1,782 | 0.95 | 3.81 | 1.03 | 62 | ||||||||||||||||||||||||||||||||||
California Tax Exempt Bond Fund | ||||||||||||||||||||||||||||||||||||||||||||||||
| Institutional Class (commenced operations on January 14, 2000) | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2010 | $ | 10.57 | $ | 0.32 | $ | 0.13 | $ | (0.32 | ) | $ | — | $ | 10.70 | 4.34 | % | $ | 40,457 | 0.50 | % | 3.03 | % | 0.62 | % | 28 | % | |||||||||||||||||||||||
| 2009 | 10.06 | 0.33 | 0.51 | (0.33 | ) | — | 10.57 | 8.45 | 38,581 | 0.50 | 3.18 | 0.61 | 50 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.24 | 0.32 | (0.18 | ) | (0.32 | ) | — | 10.06 | 1.38 | 34,262 | 0.50 | 3.13 | 0.61 | 55 | ||||||||||||||||||||||||||||||||||
| 2007 | 10.25 | 0.31 | (0.01 | ) | (0.31 | ) | — | 10.24 | 2.98 | 33,802 | 0.50 | 3.04 | 0.62 | 43 | ||||||||||||||||||||||||||||||||||
| 2006 | 10.26 | 0.29 | 0.03 | (0.29 | ) | (0.04 | ) | 10.25 | 3.18 | 26,074 | 0.50 | 2.85 | 0.62 | 43 | ||||||||||||||||||||||||||||||||||
| Class N (commenced operations on April 13, 2000) | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2010 | $ | 10.60 | $ | 0.29 | $ | 0.13 | $ | (0.29 | ) | $ | — | $ | 10.73 | 4.06 | % | $ | 3,309 | 0.75 | % | 2.75 | % | 0.87 | % | 28 | % | |||||||||||||||||||||||
| 2009 | 10.09 | 0.30 | 0.51 | (0.30 | ) | — | 10.60 | 8.15 | 1,902 | 0.75 | 2.92 | 0.87 | 50 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.27 | 0.30 | (0.18 | ) | (0.30 | ) | — | 10.09 | 1.12 | 1,049 | 0.75 | 2.87 | 0.86 | 55 | ||||||||||||||||||||||||||||||||||
| 2007 | 10.27 | 0.28 | — | (0.28 | ) | — | 10.27 | 2.82 | 922 | 0.75 | 2.78 | 0.87 | 43 | |||||||||||||||||||||||||||||||||||
| 2006 | 10.29 | 0.26 | 0.02 | (0.26 | ) | (0.04 | ) | 10.27 | 2.81 | 1,134 | 0.75 | 2.59 | 0.87 | 43 | ||||||||||||||||||||||||||||||||||
High Yield Bond Fund | ||||||||||||||||||||||||||||||||||||||||||||||||
| Institutional Class (commenced operations on January 14, 2000) | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2010 | $ | 7.56 | $ | 0.72 | $ | 0.75 | $ | (0.72 | ) | $ | — | $ | 8.31 | 20.17 | % | $ | 33,845 | 1.00 | % | 8.89 | % | 1.10 | % | 87 | % | |||||||||||||||||||||||
| 2009 | 7.40 | 0.62 | 0.18 | (0.64 | ) | — | 7.56 | 12.94 | 16,355 | 1.00 | 9.75 | 1.10 | 59 | |||||||||||||||||||||||||||||||||||
| 2008 | 8.91 | 0.64 | (1.47 | ) | (0.68 | ) | — | 7.40 | (9.83 | ) | 13,926 | 1.00 | 7.72 | 1.09 | 20 | |||||||||||||||||||||||||||||||||
| 2007 | 8.96 | 0.70 | (0.06 | ) | (0.69 | ) | — | 8.91 | 7.27 | 17,137 | 1.00 | 7.73 | 1.10 | 26 | ||||||||||||||||||||||||||||||||||
| 2006 | 9.04 | 0.68 | (0.08 | ) | (0.68 | ) | — | 8.96 | 6.90 | 20,887 | 1.00 | 7.58 | 1.10 | 23 | ||||||||||||||||||||||||||||||||||
| Class N (commenced operations on January 14, 2000) | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2010 | $ | 7.56 | $ | 0.70 | $ | 0.74 | $ | (0.69 | ) | $ | — | $ | 8.31 | 19.81 | % | $ | 24,010 | 1.30 | % | 8.68 | % | 1.40 | % | 87 | % | |||||||||||||||||||||||
| 2009 | 7.40 | 0.60 | 0.18 | (0.62 | ) | — | 7.56 | 12.61 | 19,637 | 1.30 | 9.43 | 1.40 | 59 | |||||||||||||||||||||||||||||||||||
| 2008 | 8.91 | 0.62 | (1.47 | ) | (0.66 | ) | — | 7.40 | (10.10 | ) | 17,521 | 1.30 | 7.43 | 1.39 | 20 | |||||||||||||||||||||||||||||||||
| 2007 | 8.96 | 0.68 | (0.07 | ) | (0.66 | ) | — | 8.91 | 6.95 | 20,121 | 1.30 | 7.44 | 1.40 | 26 | ||||||||||||||||||||||||||||||||||
| 2006 | 9.04 | 0.65 | (0.08 | ) | (0.65 | ) | — | 8.96 | 6.58 | 20,045 | 1.30 | 7.28 | 1.40 | 23 | ||||||||||||||||||||||||||||||||||
| † | Per share calculations are based on Average Shares outstanding throughout the period. |
| ‡ | Returns are for the period indicated and have not been annualized. Fee waivers are in effect; if they had not been in effect, performance would have been lower. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| (1) | Annualized for periods less than one year. |
| (2) | Ratio includes waivers and previously waived investment advisory fees recovered. The impact of the recovered fees may cause a higher net expense ratio. |
| Amounts designated as “—” are either $0 or have been rounded to $0. |
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 93
| financial highlights |
For a Share Outstanding Throughout Each Period For the year/period ended September 30, |
Net Asset Value Beginning of Period | Net Investment Income (Loss)† | Net Realized and Unrealized Gains (Losses) on Securities† | Dividends from Net Investment Income | Distri-butions from Realized Capital Gains | Net Asset Value End of Period | Total Return‡ | Net Assets End of Period (000) | Ratio of Expenses to Average Net Assets (1)(2) | Ratio of Net Investment Income (Loss) to Average Net Assets(1) | Ratio of Expenses to Average Net Assets (Excluding Waivers & Recovered Fees)(1) | Portfolio Turnover Rate | |||||||||||||||||||||||||||||||||||||
| Large Cap Value Equity Fund | ||||||||||||||||||||||||||||||||||||||||||||||||
| Institutional Class (commenced operations on January 14, 2000) | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2010 | $ | 7.28 | $ | 0.10 | $ | 0.40 | $ | (0.10 | ) | $ | — | $ | 7.68 | 6.85 | % | $ | 94,725 | 0.96 | % | 1.29 | % | 0.97 | % | 26 | % | |||||||||||||||||||||||
| 2009 | 8.25 | 0.13 | (0.98 | ) | (0.12 | ) | — | 7.28 | (10.03 | ) | 81,308 | 0.96 | 2.11 | 0.97 | 18 | |||||||||||||||||||||||||||||||||
| 2008 | 11.21 | 0.16 | (2.48 | ) | (0.15 | ) | (0.49 | ) | 8.25 | (21.57 | ) | 88,361 | 0.95 | 1.64 | 0.96 | 36 | ||||||||||||||||||||||||||||||||
| 2007 | 10.36 | 0.19 | 1.38 | (0.19 | ) | (0.53 | ) | 11.21 | 15.60 | 110,024 | 0.96 | 1.73 | 0.97 | 24 | ||||||||||||||||||||||||||||||||||
| 2006 | 9.54 | 0.13 | 1.21 | (0.13 | ) | (0.39 | ) | 10.36 | 14.50 | 92,946 | 0.96 | 1.36 | 0.97 | 31 | ||||||||||||||||||||||||||||||||||
| Class N (commenced operations on April 13, 2000) | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2010 | $ | 7.27 | $ | 0.08 | $ | 0.40 | $ | (0.08 | ) | $ | — | $ | 7.67 | 6.59 | % | $ | 10,089 | 1.21 | % | 1.03 | % | 1.22 | % | 26 | % | |||||||||||||||||||||||
| 2009 | 8.24 | 0.12 | (0.98 | ) | (0.11 | ) | — | 7.27 | (10.27 | ) | 8,960 | 1.21 | 1.89 | 1.22 | 18 | |||||||||||||||||||||||||||||||||
| 2008 | 11.19 | 0.13 | (2.46 | ) | (0.13 | ) | (0.49 | ) | 8.24 | (21.72 | ) | 11,712 | 1.20 | 1.38 | 1.21 | 36 | ||||||||||||||||||||||||||||||||
| 2007 | 10.35 | 0.16 | 1.37 | (0.16 | ) | (0.53 | ) | 11.19 | 15.24 | 17,190 | 1.21 | 1.47 | 1.22 | 24 | ||||||||||||||||||||||||||||||||||
| 2006 | 9.53 | �� | 0.11 | 1.20 | (0.10 | ) | (0.39 | ) | 10.35 | 14.24 | 13,104 | 1.21 | 1.13 | 1.22 | 31 | |||||||||||||||||||||||||||||||||
Large Cap Growth Equity Fund | ||||||||||||||||||||||||||||||||||||||||||||||||
| Institutional Class (commenced operations on January 14, 2000) | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2010 | $ | 7.08 | $ | 0.04 | $ | 0.59 | $ | (0.04 | ) | $ | — | $ | 7.67 | 8.89 | % | $ | 31,317 | 0.99 | % | 0.52 | % | 1.00 | % | 61 | % | |||||||||||||||||||||||
| 2009 | 7.38 | 0.04 | (0.30 | ) | (0.04 | ) | — | 7.08 | (3.36 | ) | 28,050 | 0.99 | 0.70 | 1.00 | 12 | |||||||||||||||||||||||||||||||||
| 2008 | 8.86 | 0.03 | (1.48 | ) | (0.03 | ) | — | 7.38 | (16.40 | ) | 31,074 | 0.98 | 0.35 | 0.99 | 26 | |||||||||||||||||||||||||||||||||
| 2007 | 7.75 | 0.05 | 1.10 | (0.04 | ) | — | 8.86 | 14.91 | 45,784 | 0.99 | 0.52 | 1.00 | 30 | |||||||||||||||||||||||||||||||||||
| 2006 | 7.43 | 0.02 | 0.32 | (0.02 | ) | — | 7.75 | 4.59 | 35,842 | 0.99 | 0.27 | 1.00 | 34 | |||||||||||||||||||||||||||||||||||
| Class N (commenced operations on March 28, 2000) | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2010 | $ | 7.00 | $ | 0.02 | $ | 0.59 | $ | (0.02 | ) | $ | — | $ | 7.59 | 8.72 | % | $ | 9,271 | 1.24 | % | 0.27 | % | 1.25 | % | 61 | % | |||||||||||||||||||||||
| 2009 | 7.31 | 0.03 | (0.31 | ) | (0.03 | ) | — | 7.00 | (3.77 | ) | 9,120 | 1.24 | 0.45 | 1.25 | 12 | |||||||||||||||||||||||||||||||||
| 2008 | 8.77 | 0.01 | (1.46 | ) | (0.01 | ) | — | 7.31 | (16.55 | ) | 11,341 | 1.23 | 0.11 | 1.24 | 26 | |||||||||||||||||||||||||||||||||
| 2007 | 7.68 | 0.01 | 1.10 | (0.02 | ) | — | 8.77 | 14.51 | 15,063 | 1.24 | 0.28 | 1.25 | 30 | |||||||||||||||||||||||||||||||||||
| 2006 | 7.35 | — | 0.33 | — | ^ | — | 7.68 | 4.55 | 10,363 | 1.24 | 0.03 | 1.25 | 34 | |||||||||||||||||||||||||||||||||||
RCB Small Cap Value Fund | ||||||||||||||||||||||||||||||||||||||||||||||||
| Institutional Class (commenced operations on October 3, 2001) | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2010 | $ | 18.46 | $ | 0.08 | $ | 2.23 | $ | — | $ | — | $ | 20.77 | 12.51 | % | $ | 3,331 | 1.20 | % | 0.40 | % | 1.21 | % | 48 | % | ||||||||||||||||||||||||
| 2009 | 16.42 | (0.02 | ) | 2.35 | (0.29 | ) | — | 18.46 | 15.20 | 2,317 | 1.19 | (0.13 | ) | 1.20 | 62 | |||||||||||||||||||||||||||||||||
| 2008 | 30.79 | 0.19 | (9.57 | ) | — | (4.99 | ) | 16.42 | (35.01 | ) | 1,742 | 1.19 | 0.85 | 1.20 | 78 | |||||||||||||||||||||||||||||||||
| 2007 | 28.25 | 0.02 | 3.00 | (0.01 | ) | (0.47 | ) | 30.79 | 10.65 | 9,062 | 1.19 | 0.08 | 1.20 | 57 | ||||||||||||||||||||||||||||||||||
| 2006 | 28.58 | 0.06 | 0.05 | (0.07 | ) | (0.37 | ) | 28.25 | 0.40 | 13,435 | 1.20 | 0.20 | 1.21 | 66 | ||||||||||||||||||||||||||||||||||
| Class N (commenced operations on October 3, 2001) | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2010 | $ | 18.12 | $ | 0.02 | $ | 2.19 | $ | — | $ | — | $ | 20.33 | 12.20 | % | $ | 4,760 | 1.45 | % | 0.12 | % | 1.46 | % | 48 | % | ||||||||||||||||||||||||
| 2009 | 16.14 | (0.05 | ) | 2.30 | (0.27 | ) | — | 18.12 | 14.91 | 4,226 | 1.44 | (0.37 | ) | 1.45 | 62 | |||||||||||||||||||||||||||||||||
| 2008 | 30.42 | 0.15 | (9.44 | ) | — | (4.99 | ) | 16.14 | (35.16 | ) | 4,262 | 1.44 | 0.70 | 1.45 | 78 | |||||||||||||||||||||||||||||||||
| 2007 | 27.98 | (0.05 | ) | 2.96 | — | (0.47 | ) | 30.42 | 10.37 | 9,753 | 1.44 | (0.16 | ) | 1.45 | 57 | |||||||||||||||||||||||||||||||||
| 2006 | 28.31 | (0.01 | ) | 0.05 | — | ^ | (0.37 | ) | 27.98 | 0.17 | 10,470 | 1.45 | (0.04 | ) | 1.46 | 66 | ||||||||||||||||||||||||||||||||
| Class R (commenced operations on September 30, 1998) | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2010 | $ | 18.15 | $ | 0.04 | $ | 2.20 | $ | (0.02 | ) | $ | — | $ | 20.37 | 12.33 | % | $ | 16,508 | 1.33 | % | 0.23 | % | 1.73 | % | 48 | % | |||||||||||||||||||||||
| 2009 | 16.15 | 0.01 | 2.31 | (0.32 | ) | — | 18.15 | 15.50 | 16,755 | 0.97 | 0.08 | 1.55 | 62 | |||||||||||||||||||||||||||||||||||
| 2008 | 30.38 | 0.20 | (9.44 | ) | — | (4.99 | ) | 16.15 | (35.02 | ) | 19,183 | 1.23 | 0.92 | 1.55 | 78 | |||||||||||||||||||||||||||||||||
| 2007 | 27.93 | (0.05 | ) | 2.97 | — | (0.47 | ) | 30.38 | 10.43 | 40,944 | 1.44 | (0.17 | ) | 1.45 | 57 | |||||||||||||||||||||||||||||||||
| 2006 | 28.27 | (0.01 | ) | 0.04 | — | ^ | (0.37 | ) | 27.93 | 0.14 | 45,836 | 1.45 | (0.04 | ) | 1.46 | 66 | ||||||||||||||||||||||||||||||||
Multi-Asset Fund | ||||||||||||||||||||||||||||||||||||||||||||||||
| Institutional Class (commenced operations on October 1, 2007) | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2010 | $ | 9.87 | $ | 0.20 | $ | 0.50 | $ | (0.20 | ) | $ | — | $ | 10.37 | 7.15 | % | $ | 11,258 | 0.84 | % | 1.96 | % | 0.85 | % | 76 | % | |||||||||||||||||||||||
| 2009 | 9.70 | 0.15 | 0.18 | (0.16 | ) | — | 9.87 | 3.54 | 8,423 | 0.83 | 1.71 | 0.84 | 94 | |||||||||||||||||||||||||||||||||||
| 2008 | 11.00 | 0.25 | (1.32 | ) | (0.23 | ) | — | 9.70 | (9.84 | ) | 10,741 | 1.29 | 2.37 | 1.30 | 141 | |||||||||||||||||||||||||||||||||
| Class N (commenced operations on October 1, 2007) | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2010 | $ | 9.86 | $ | 0.17 | $ | 0.50 | $ | (0.17 | ) | $ | — | $ | 10.36 | 6.89 | % | $ | 22,019 | 1.09 | % | 1.69 | % | 1.10 | % | 76 | % | |||||||||||||||||||||||
| 2009 | 9.69 | 0.13 | 0.18 | (0.14 | ) | — | 9.86 | 3.29 | 16,837 | 1.09 | 1.46 | 1.10 | 94 | |||||||||||||||||||||||||||||||||||
| 2008 | 11.00 | 0.23 | (1.33 | ) | (0.21 | ) | — | 9.69 | (10.12 | ) | 16,708 | 1.53 | 2.22 | 1.54 | 141 | |||||||||||||||||||||||||||||||||
| † | Per share calculations are based on Average Shares outstanding throughout the period. |
| ‡ | Returns are for the period indicated and have not been annualized. Fee waivers are in effect; if they had not been in effect, performance would have been lower. Total return figures do not include applicable sales loads. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| ^ | Amount represents less than $0.01 per share. |
| (1) | Annualized for periods less than one year. |
| (2) | Ratio includes waivers and previously waived investment advisory fees recovered. The impact of the recovered fees may cause a higher net expense ratio. |
| Amounts designated as “—” are either $0 or have been rounded to $0. |
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 94
Net Asset Value Beginning of Period | Net Investment Income† | Net Realized and Unrealized Gains (Losses) on Securities† | Dividends from Net Investment Income | Distri-butions from Realized Capital Gains | Net Asset Value End of Period | Total Return‡ | Net Assets End of Period (000) | Ratio of Expenses to Average Net Assets(1)(2) | Ratio of Net Investment Income to Average Net Assets(1) | Ratio of Expenses to Average Net Assets (Excluding Waivers & Recovered Fees)(1) | Portfolio Turnover Rate | |||||||||||||||||||||||||||||||||||||
| Limited Maturity Fixed Income Fund | ||||||||||||||||||||||||||||||||||||||||||||||||
| Institutional Class (commenced operations on October 22,1988) | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2010 | $ | 11.06 | $ | 0.20 | $ | 0.16 | $ | (0.21 | ) | $ | — | $ | 11.21 | 3.28 | % | $ | 33,279 | 0.73 | % | 1.82 | % | 0.71 | % | 118 | % | |||||||||||||||||||||||
| 2009 | 10.49 | 0.30 | 0.57 | (0.30 | ) | — | 11.06 | 8.44 | 37,255 | 0.75 | 2.66 | 0.76 | 98 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.59 | 0.37 | (0.10 | ) | (0.37 | ) | — | 10.49 | 2.54 | 92,681 | 0.76 | 3.44 | 0.67 | 79 | ||||||||||||||||||||||||||||||||||
| 2007 | 10.56 | 0.45 | 0.03 | (0.45 | ) | — | 10.59 | 4.63 | 44,365 | 0.76 | 4.25 | 0.77 | 76 | |||||||||||||||||||||||||||||||||||
2006(3) | 10.57 | 0.34 | 0.02 | (0.37 | ) | — | 10.56 | 3.49 | 45,340 | 0.75 | 3.24 | 0.94 | 86 | |||||||||||||||||||||||||||||||||||
| Class N (commenced operations on October 22, 2004) | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2010 | $ | 11.07 | $ | 0.16 | $ | 0.17 | $ | (0.18 | ) | $ | — | $ | 11.22 | 3.04 | % | $ | 9,262 | 0.98 | % | 1.48 | % | 1.22 | % | 118 | % | |||||||||||||||||||||||
| 2009 | 10.51 | 0.27 | 0.57 | (0.28 | ) | — | 11.07 | 8.07 | 1,471 | 1.00 | 2.29 | 1.24 | 98 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.61 | 0.35 | (0.10 | ) | (0.35 | ) | — | 10.51 | 2.29 | 432 | 1.00 | 3.24 | 0.92 | 79 | ||||||||||||||||||||||||||||||||||
| 2007 | 10.57 | 0.42 | 0.04 | (0.42 | ) | — | 10.61 | 4.47 | 310 | 1.00 | 3.99 | 1.02 | 76 | |||||||||||||||||||||||||||||||||||
2006(3) | 10.58 | 0.30 | 0.03 | (0.34 | ) | — | 10.57 | 3.17 | 358 | 1.00 | 2.88 | 1.18 | 86 | |||||||||||||||||||||||||||||||||||
Full Maturity Fixed Income Fund | ||||||||||||||||||||||||||||||||||||||||||||||||
| Institutional Class (commenced operations on October 20, 1988) | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2010 | $ | 10.46 | $ | 0.36 | $ | 0.50 | $ | (0.36 | ) | $ | (0.05 | ) | $ | 10.91 | 8.48 | % | $ | 45,756 | 0.70 | % | 3.40 | % | 0.71 | % | 63 | % | ||||||||||||||||||||||
| 2009 | 9.90 | 0.40 | 0.56 | (0.40 | ) | — | 10.46 | 9.95 | 39,495 | 0.75 | 3.97 | 0.75 | 56 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.16 | 0.44 | (0.26 | ) | (0.44 | ) | — | 9.90 | 1.76 | 42,579 | 0.64 | 4.32 | 0.64 | 34 | ||||||||||||||||||||||||||||||||||
| 2007 | 10.16 | 0.45 | — | (0.45 | ) | — | 10.16 | 4.48 | 42,096 | 0.79 | 4.48 | 0.73 | 55 | |||||||||||||||||||||||||||||||||||
2006(4) | 10.35 | 0.43 | (0.13 | ) | (0.43 | ) | (0.06 | ) | 10.16 | 3.03 | 30,398 | 0.80 | 4.20 | 0.87 | 91 | |||||||||||||||||||||||||||||||||
| Class N (commenced operations on May 11, 2004) | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2010 | $ | 10.46 | $ | 0.33 | $ | 0.50 | $ | (0.34 | ) | $ | (0.05 | ) | $ | 10.90 | 8.12 | % | $ | 3,818 | 0.95 | % | 3.08 | % | 1.21 | % | 63 | % | ||||||||||||||||||||||
| 2009 | 9.89 | 0.39 | 0.56 | (0.38 | ) | — | 10.46 | 9.79 | 1,086 | 1.00 | 3.70 | 1.26 | 56 | |||||||||||||||||||||||||||||||||||
| 2008 | 10.16 | 0.42 | (0.27 | ) | (0.42 | ) | — | 9.89 | 1.42 | 687 | 0.89 | 4.02 | 0.89 | 34 | ||||||||||||||||||||||||||||||||||
| 2007 | 10.16 | 0.42 | — | (0.42 | ) | — | 10.16 | 4.23 | 235 | 1.04 | 4.23 | 0.99 | 55 | |||||||||||||||||||||||||||||||||||
2006(4) | 10.36 | 0.40 | (0.13 | ) | (0.41 | ) | (0.06 | ) | 10.16 | 2.67 | 145 | 1.05 | 3.95 | 1.12 | 91 | |||||||||||||||||||||||||||||||||
Diversified Equity Fund | ||||||||||||||||||||||||||||||||||||||||||||||||
| Institutional Class (commenced operations on October 20, 1988) | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2010 | $ | 11.19 | $ | 0.06 | $ | 0.69 | $ | (0.06 | )* | $ | — | $ | 11.88 | 6.69 | % | $ | 56,809 | 0.94 | % | 0.51 | % | 0.95 | % | 105 | % | |||||||||||||||||||||||
| 2009 | 12.19 | 0.11 | (1.00 | ) | (0.11 | )** | — | 11.19 | (7.08 | ) | 50,425 | 0.98 | 1.15 | 0.99 | 93 | |||||||||||||||||||||||||||||||||
| 2008 | 18.48 | 0.14 | (3.84 | ) | (0.14 | ) | (2.45 | ) | 12.19 | (22.73 | ) | 74,997 | 0.97 | 0.98 | 0.94 | 143 | ||||||||||||||||||||||||||||||||
| 2007 | 18.17 | 0.18 | 1.89 | (0.18 | ) | (1.58 | ) | 18.48 | 11.93 | 102,232 | 0.99 | 0.98 | 1.02 | 116 | ||||||||||||||||||||||||||||||||||
2006(5) | 17.42 | 0.15 | 1.55 | (0.15 | ) | (0.80 | ) | 18.17 | 10.16 | 94,653 | 1.01 | 0.87 | 1.09 | 99 | ||||||||||||||||||||||||||||||||||
| Class N (commenced operations on December 30, 2002) | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2010 | $ | 11.22 | $ | 0.03 | $ | 0.70 | $ | (0.03 | ) | $ | — | $ | 11.92 | 6.50 | % | $ | 6,610 | 1.19 | % | 0.26 | % | 1.45 | % | 105 | % | |||||||||||||||||||||||
| 2009 | 12.22 | 0.09 | (1.00 | ) | (0.09 | ) | — | 11.22 | (7.30 | ) | 5,560 | 1.23 | 0.91 | 1.49 | 93 | |||||||||||||||||||||||||||||||||
| 2008 | 18.52 | 0.11 | (3.85 | ) | (0.11 | ) | (2.45 | ) | 12.22 | (22.93 | ) | 7,102 | 1.22 | 0.74 | 1.19 | 143 | ||||||||||||||||||||||||||||||||
| 2007 | 18.21 | 0.13 | 1.89 | (0.13 | ) | (1.58 | ) | 18.52 | 11.62 | 10,400 | 1.27 | 0.73 | 1.24 | 116 | ||||||||||||||||||||||||||||||||||
2006(5) | 17.46 | 0.11 | 1.55 | (0.11 | ) | (0.80 | ) | 18.21 | 9.87 | 11,122 | 1.26 | 0.62 | 1.34 | 99 | ||||||||||||||||||||||||||||||||||
Socially Responsible Equity Fund | ||||||||||||||||||||||||||||||||||||||||||||||||
| Institutional Class (commenced operations on January 3, 2005) | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2010 | $ | 8.20 | $ | 0.09 | $ | 0.61 | $ | (0.09 | )* | $ | — | $ | 8.81 | 8.51 | % | $ | 59,746 | 0.95 | % | 1.01 | % | 0.96 | % | 36 | % | |||||||||||||||||||||||
| 2009 | 9.51 | 0.12 | (1.30 | ) | (0.13 | ) | — | 8.20 | (12.11 | ) | 52,406 | 0.97 | 1.74 | 0.98 | 48 | |||||||||||||||||||||||||||||||||
| 2008 | 12.12 | 0.16 | (2.04 | ) | (0.15 | ) | (0.58 | ) | 9.51 | (16.24 | ) | 53,256 | 0.99 | 1.51 | 0.90 | 41 | ||||||||||||||||||||||||||||||||
| 2007 | 10.91 | 0.14 | 1.36 | (0.14 | ) | (0.15 | ) | 12.12 | 13.89 | 56,490 | 0.94 | 1.19 | 1.00 | 29 | ||||||||||||||||||||||||||||||||||
2006(6) | 10.28 | 0.12 | 0.67 | (0.11 | ) | (0.05 | ) | 10.91 | 7.69 | 45,003 | 1.04 | 1.10 | 1.12 | 29 | ||||||||||||||||||||||||||||||||||
| Class N (commenced operations on August 12, 2005) | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2010 | $ | 8.19 | $ | 0.07 | $ | 0.60 | $ | (0.07 | ) | $ | — | $ | 8.79 | 8.15 | % | $ | 2,424 | 1.20 | % | 0.81 | % | 1.46 | % | 36 | % | |||||||||||||||||||||||
| 2009 | 9.50 | 0.11 | (1.31 | ) | (0.11 | ) | — | 8.19 | (12.34 | ) | 1,101 | 1.22 | 1.49 | 1.48 | 48 | |||||||||||||||||||||||||||||||||
| 2008 | 12.11 | 0.14 | (2.05 | ) | (0.12 | ) | (0.58 | ) | 9.50 | (16.46 | ) | 885 | 1.24 | 1.26 | 1.15 | 41 | ||||||||||||||||||||||||||||||||
| 2007 | 10.90 | 0.12 | 1.36 | (0.11 | ) | (0.16 | ) | 12.11 | 13.64 | 741 | 1.19 | 0.94 | 1.25 | 29 | ||||||||||||||||||||||||||||||||||
2006(6) | 10.28 | 0.09 | 0.67 | (0.09 | ) | (0.05 | ) | 10.90 | 7.40 | 281 | 1.29 | 0.80 | 1.37 | 29 | ||||||||||||||||||||||||||||||||||
| † | Per share calculations are based on Average Shares outstanding throughout the period. |
| ‡ | Returns are for the period indicated and have not been annualized. Fee waivers are in effect; if they had not been in effect, performance would have been lower. Total return figures do not include applicable sales loads. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. |
| * | Includes return of capital less than $0.01 per share. |
| ** | Includes return of capital of $0.01 per share. |
| (1) | Annualized for periods less than one year. |
| (2) | Ratio includes waivers and previously waived investment advisory fees recovered. The impact of the recovered fees may cause a higher net expense ratio. |
| (3) | On October 3, 2005, the Limited Maturity Fixed Income Fund was reorganized into the CNI Charter Limited Maturity Fixed Income Fund. See Note 1 in Notes to Financial Statements for more information. |
| (4) | On October 3, 2005, the Full Maturity Fixed Income Fund was reorganized into the CNI Full Maturity Fixed Income Fund. See Note 1 in Notes to Financial Statements for more information. |
| (5) | On October 3, 2005, the Diversified Equity Fund was reorganized into the CNI Diversified Equity Fund. See Note 1 in Notes to Financial Statements for more information. |
| (6) | On October 3, 2005, the Socially Responsible Equity Fund was reorganized into the CNI Socially Responsible Equity Fund. See Note 1 in Notes to Financial Statements for more information. |
| Amounts designated as “—” are either $0 or have been rounded to $0. |
See accompanying notes to financial statements.
CNI CHARTER FUNDS | PAGE 95
| notes to financial statements |
September 30, 2010 |
| 1. | ORGANIZATION: |
CNI Charter Funds, a Delaware statutory trust (the “Trust”), is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company currently offering 15 funds (collectively the “Funds”). The financial statements included herein consist of two series of separately advised funds. The first series of Funds is advised by City National Asset Management, Inc. (“CNAM”) and consists of the Prime Money Market Fund, Government Money Market Fund, California Tax Exempt Money Market Fund (collectively, the “Money Market Funds”); Corporate Bond Fund, Government Bond Fund, California Tax Exempt Bond Fund, High Yield Bond Fund (collectively, the “Fixed Income Funds”); Large Cap Value Equity Fund, Large Cap Growth Equity Fund, RCB Small Cap Value Fund (c ollectively, the “Equity Funds”); and Multi-Asset Fund (each a “Fund,” and collectively, the “CNAM-Advised Funds”). The Money Market Funds are registered to offer Institutional, Class N and Class S Shares. The Fixed Income and Equity Funds and the Multi-Asset Fund are registered to offer Institutional and Class N Shares; in addition, the RCB Small Cap Value Fund is registered to offer Class R Shares.
In addition to the CNAM-Advised Funds, a second series of Funds is advised by CCM Advisors, LLC (“CCMA”) and consists of the Diversified Equity Fund (the “Diversified Fund”), Socially Responsible Equity Fund (the “Socially Responsible Fund”), Limited Maturity Fixed Income Fund (the “Limited Maturity Fund”), and Full Maturity Fixed Income Fund (the “Full Maturity Fund”) (each a “Fund” and, collectively, the “CCMA-Advised Funds”). Each of the CCMA-Advised Funds commenced operations on October 3, 2005, the effective date of the reorganization of each corresponding series (each a “Predecessor Fund” and collectively the “Predecessor Funds”) of AHA Investment Funds, Inc. (the “AHA Company”), a registered investment company org anized on March 14, 1988, under the laws of Maryland. On May 17, 2005, the Board of Directors of the AHA Company approved the reorganization of the Predecessor Funds into the newly established corresponding Fund’s series of the Trust. The CCMA-Advised Funds are registered to offer Institutional and Class N Shares.
The assets of each Fund are segregated, and a shareholder’s interest is limited to the Fund in which shares are held. Each Fund is diversified with the exception of the California Tax Exempt Bond Fund, which is non-diversified. The Funds’ prospectuses provide descriptions of each Fund’s investment objectives, policies and strategies.
The Balanced Fund, a former series of the CCMA-Advised Funds, closed on March 19, 2010, and the Opportunistic Value Fund, a former series of the CNAM-Advised Funds, closed on April 30, 2010.
| 2. | SIGNIFICANT ACCOUNTING POLICIES: |
The following is a summary of significant accounting policies followed by the Funds.
Use of Estimates – The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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 securities traded on NASDAQ, the NASDAQ Official Closing Price is used. If available, debt securities are priced based upon valuations provided by independent, third-party pricing agents. Such values generally reflect the last reported sales price if the security is actively traded. The third-party pricing agents may also value debt securities at an evaluated bid price by employing methodologies that utilize actual market transactions, broker-supplied valuations, or other methodologies designed to identify the market value for such securities. Debt obligations, including money market funds, with remaining maturities of 60 days or less may be valued at their amortized cost, which approximates market value. The prices for foreign securities are reported in local currency and converted to U.S. dollars using currency exchange rates. Investments in registered investment companies are priced at the Fund’s daily net asset value. 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 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 Funds’ Board of Trustees. The Funds’ Fair Value Procedures are implemented through a Fair Value Committee (the “Committee”) designated by the Funds’ Board of Trustees. Some
CNI CHARTER FUNDS | PAGE 96
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 de-listed from a national exchange; the security’s primary trading market is temporarily closed at a time when under normal conditions it would be open; for international securities, market events occur after the close of the foreign markets that make closing prices not representative of fair value; or the security’s primary pricing source is not able or willing to provide a price. When a security is valued in accordance with the Fair Value Procedures, the Committee will determine the value after taking into consideration relevant information reasonably available to the Committee.
In accordance with U.S. generally accepted accounting principles, the objective of a fair value measurement is to determine the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). Accordingly, the fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).The three levels of the fair value hierarchy are described below:
| • | Level 1 — Unadjusted quoted prices in active markets for identical, unrestricted assets or liabilities that the Funds have the ability to access at the measurement date; |
| • | Level 2 — Quoted prices which are not active, or inputs that are observable (either directly or indirectly) for substantially the full term of the asset or liability; and |
| • | Level 3 — Prices, inputs or exotic modeling techniques which are both significant to the fair value measurement and unobservable (supported by little or no market activity). |
Investments are classified within the level of the lowest significant input considered in determining fair value. Investments classified within Level 3 whose fair value measurement considers several inputs may include Level 1 or Level 2 inputs as components of the overall fair value measurement.
For the year ended September 30, 2010, there have been no significant changes to the Funds’ fair valuation methodologies.
Security Transactions and Related Income – Security transactions are accounted for on the trade date of the security purchase or sale. Costs used in determining net realized capital gains and losses on the sale of securities are those of the specific securities sold. Interest income is recognized on an accrual basis and dividend income is recognized on the ex-dividend date. Purchase discounts and premiums on securities held by the Funds are accreted and amortized to maturity using the scientific method, which approximates the effective interest method over the holding period of a security, except for the Money Market funds which use a straight line basis.
Repurchase Agreements – Securities pledged as collateral for repurchase agreements are held by each Fund’s custodian bank U.S. Bank, N.A., until maturity of the repurchase agreements. Provisions of the agreements and procedures adopted by the investment adviser require that the market value of the collateral, including accrued interest thereon, is sufficient in the event of default by the counterparty. The Funds also invest in tri-party repurchase agreements. Securities held as collateral for tri-party repurchase agreements are maintained by the broker’s custodian bank in a segregated account until maturity of the repurchase agreement. Provisions of the agreements require that the market value of the collateral, including accrued interest thereon, is sufficient in t he event of default. If the counterparty defaults and the value of the collateral declines or if the counterparty enters into an insolvency proceeding, realization of the collateral by the Fund may be delayed or limited.
TBA Transactions – The Funds may engage in “to be announced” (“TBA”) security transactions. Such transactions involve a commitment by the Funds to purchase or sell securities for a predetermined price or yield, with payment and delivery taking place beyond the customary settlement period. The Funds record TBA securities on the trade date and maintain security positions such that sufficient liquid assets will be available to make payments for the securities purchased.
Expense Allocation – Common expenses incurred by the Funds are allocated among the Funds (i) based upon relative average daily net assets, (ii) as incurred on a specific identification basis, or (iii) equally among the Funds, depending on the nature of the expenditure.
Classes – Class-specific expenses are borne by that class. Income, non class-specific expenses, and realized and unrealized gains/losses are allocated to the respective class on the basis of relative net asset value each day.
Dividends and Distributions to Shareholders – Dividends from net investment income are declared daily and paid to shareholders monthly for the Money Market Funds and Fixed Income Funds. Dividends from net investment income are declared and paid monthly for the Limited Maturity Fund and Full Maturity Fund. Dividends from net investment income are declared and paid quarterly for the Large Cap Value Equity
CNI CHARTER FUNDS | PAGE 97
| notes to financial statements |
September 30, 2010 |
Fund, Large Cap Growth Equity Fund, Multi-Asset Fund, Diversified Fund and Socially Responsible Fund. For the RCB Small Cap Value Fund, dividends from net investment income are declared and paid annually. Distributions from net realized capital gains are distributed to shareholders at least annually.
| 3. | ADMINISTRATION, TRANSFER AGENT, DISTRIBUTION AND SHAREHOLDER SERVICES AGREEMENTS: |
Pursuant to an administration agreement dated April 1, 1999, as amended April 1, 2008, January 1, 2009, and January 1, 2010 (the “Agreement”), SEI Investments Global Funds Services (the “Administrator”), a wholly owned subsidiary of SEI Investments Company, acts as the Trust’s administrator. Under the terms of the Agreement, the Administrator is entitled to receive an annual fee of 0.065% of aggregate average daily net assets of the Trust not exceeding $2.5 billion, 0.045% of aggregate average daily net assets of the Trust exceeding $2.5 billion but not exceeding $5 billion, 0.025% of aggregate average daily net assets of the Trust exceeding $5 billion but not exceeding $7.5 billion, and 0.02% of aggregate average daily net assets of the Trust exceeding $7.5 billion. Each Fund is subject to a minimum annual f ee of $90,000, which may be reduced at the sole discretion of the Administrator.
The Trust has adopted a Rule 12b-1 Distribution Plan (“the Plan”) with respect to Class N, Class S and Class R Shares that allows each Fund to pay distribution and servicing fees. Pursuant to the Plan, SEI Investments Distribution Co. (the “Distributor”) receives a distribution fee, computed daily and paid monthly, at the annual rate of 0.50% of the average daily net assets of the Class N Shares and Class S Shares of the Money Market Funds and 0.25% of the Class N Shares of the Fixed Income Funds, Equity Funds, Multi-Asset Fund and the CCMA-Advised Funds and the Class R Shares of the RCB Small Cap Value Fund, with the exception of 0.30% charged to the Class N Shares of the High Yield Bond Fund, which may be used by the Distributor to provide compensation for sales support and distribution-related activities.
Effective October 1, 2009, the RCB Small Cap Value Fund Class R shares voluntarily began waiving 0.14% in 12b-1 fees.
SEI Institutional Transfer Agency, a division of SEI Investments Fund Management Corporation (the “Transfer Agent”), serves as transfer agent for the Trust and provides services at an annual rate of $15,000 per share class. The Transfer Agent has agreed to waive these fees.
As of May 24, 2010, UMB Fund Services serves as sub-transfer agent for Class R shares of the RCB Small Cap Value Fund and all share classes of the CCMA-Advised Funds and provides services at an annual rate of $14,000 per share class plus other transaction based fees and out of pocket expenses. Prior to May 24, 2010, Citigroup Fund Services, LLC served as the sub-transfer agent for those Funds, subject to the same fee arrangements.
The Trust has entered into Shareholder Servicing Agreements that permit payment of compensation to City National Bank (“CNB”) and its affiliates (including CCMA) which provide certain shareholder support for their customers who own Institutional Class, Class N, Class S or Class R Shares. In consideration for such services, a shareholder servicing fee is charged at the annual rate of up to 0.25% of each Fund’s average daily net assets. CNB and CCMA have both agreed to voluntarily waive portions of their shareholder servicing fees with respect to certain Funds. For the year ended September 30, 2010, CNB and CCMA received Shareholder Servicing fees from the Trust in the amounts of $11,471,639 and $9,744, respectively.
Certain officers of the Trust are also officers of CNAM, CCMA or the Administrator. Such officers are paid no fees by the Trust for serving as officers of the Trust.
| 4. | INVESTMENT ADVISORY FEES AND OTHER AGREEMENTS: |
CNAM serves as the investment manager for the CNAM-Advised Funds. Under the terms of the current agreement, CNAM receives an annual fee equal to 0.25% of the average daily net assets of the Prime Money Market Fund, 0.26% of the average daily net assets of the Government Money Market Fund, 0.27% of the average daily net assets of the California Tax Exempt Money Market Fund, 0.40% of the average daily net assets of the Corporate Bond Fund, 0.43% of the average daily net assets of the Government Bond Fund, 0.27% of the average daily net assets of the California Tax Exempt Bond Fund, 0.75% of the average daily net assets of the High Yield Bond Fund, 0.62% of the average daily net assets of the Large Cap Value Equity Fund, 0.65% of the average daily net assets of the Large Cap Growth Equity Fund, 0.85% of the average net assets of the RCB Smal l Cap Value Fund, and 0.50% of the average daily net assets of the Multi-Asset Fund.
CCMA, an affiliate of CNAM, serves as the investment manager to the CCMA-Advised Funds. Under the terms of the current agreement, CCMA receives an annual fee equal to 0.75% of the average daily net assets of each of the Diversified Fund and
CNI CHARTER FUNDS | PAGE 98
Socially Responsible Fund, and an annual fee equal to 0.50% of the average daily net assets of each of the Limited Maturity Fund and the Full Maturity Fund.
Guggenheim Investment Management, LLC acts as the investment sub-adviser with respect to the High Yield Bond Fund.
Reed, Conner & Birdwell, LLC acts as the investment sub-adviser with respect to the RCB Small Cap Value Fund.
AMBS Investment Counsel, LLC, SKBA Capital Management, LLC, and Turner Investment Partners, Inc. act as the investment sub-advisers with respect to the Diversified Fund. On May 25, 2010, the Board of Trustees of the Trust approved the termination of Freeman Investment Management Co., LLC, a previous sub-adviser to the Diversified Fund, and approved the appointment of CNAM to serve as interim sub-adviser to the Fund effective May 28, 2010. CNAM served as an interim sub-adviser to the Fund until September 6, 2010. Effective September 7, 2010, following Board ap proval, CCMA reallocated the Diversified Fund’s assets among AMBS Investment Counsel, SKBA Capital Management and Turner Investment Partners.
SKBA Capital Management, LLC acts as the investment sub-adviser with respect to the Socially Responsible Fund.
CNAM acts as the investment sub-adviser with respect to the Limited Maturity Fund. Until January 28, 2010, Patterson Capital Corporation also served as a sub-adviser with respect to the Fund.
Robert W. Baird & Co., Incorporated and Boyd Watterson Asset Management, LLC act as the investment sub-advisers with respect to the Full Maturity Fund.
Sub-adviser fees are paid by CNAM or CCMA as applicable.
CNAM has voluntarily agreed to limit its fees or reimburse expenses to the extent necessary to keep operating expenses at or below certain percentages of the CNAM-Advised Funds’ respective average daily net assets. In the case of the RCB Small Cap Value Fund, the Fund’s sub-adviser has contractually agreed to limit its fees or reimburse expenses to meet the expense limitations. The expense limitations (expressed as percentages of average daily net assets) are as follows:
Prime Money Market Fund | Government Money Market Fund | California Tax Exempt Money Market Fund | ||
| Institutional Class | 0.63% | 0.63% | 0.55% | |
| Class N | 0.85% | 0.85% | 0.78% | |
Class S | 1.05% | 1.05% | 0.98% |
Corporate Bond Fund | Government Bond Fund | California Tax Exempt Bond Fund | High Yield Bond Fund | |
| Institutional Class | 0.75% | 0.70% | 0.50% | 1.00% |
Class N | 1.00% | 0.95% | 0.75% | 1.30% |
Large Cap Value Equity Fund | Large Cap Growth Equity Fund | RCB Small Cap Value Fund | Multi-Asset Fund | |
| Institutional Class | 1.00% | 1.05% | 1.24% | 1.75% |
| Class N | 1.25% | 1.30% | 1.49% | 2.00% |
Class R | — | — | 1.49% | — |
Effective November 1, 2006, CCMA has contractually agreed to pay all operating expenses in excess of the annual rates presented below as applied to each Fund’s average daily net assets.
Limited Maturity Fixed Income Fund | Full Maturity Fixed Income Fund | Diversified Equity Fund | Socially Responsible Equity Fund | |
| Institutional Class | 1.00% | 1.00% | 1.25% | 1.25% |
Class N | 1.25% | 1.25% | 1.50% | 1.50% |
Any fee reductions or expense reimbursements may be repaid by a Fund to CNAM, CCMA or the RCB Small Cap Value Fund’s sub-adviser, as applicable, within three years after occurrence, subject to certain restrictions and only if such repayments do not cause the Fund’s expense ratios, at the time of repayment, to exceed the applicable amount shown in the preceding table.
During the year ended September 30, 2010, the Board of Trustees approved the reimbursement of previously waived fees by CNAM and CCMA, respectively, in the amount of $1,690 with respect to the Corporate Bond Fund and $11,767 with respect to the Limited Maturity Fund.
As of September 30, 2010, fees which were previously waived by CNAM which may be subject to possible future reimbursement were as follows:
CNI CHARTER FUNDS | PAGE 99
| notes to financial statements |
September 30, 2010 |
Fund | Potential Amount of Recovery (000) | Expiration | ||||||
| Corporate Bond | $ | 1 | 2013 | |||||
| Government Bond | 39 | 2011 | ||||||
| 49 | 2012 | |||||||
| 101 | 2013 | |||||||
| California Tax Exempt Bond | 34 | 2011 | ||||||
| 39 | 2012 | |||||||
| 46 | 2013 | |||||||
| High Yield Bond | 29 | 2011 | ||||||
| 25 | 2012 | |||||||
| 43 | 2013 | |||||||
| Prime Money Market | 880 | 2012 | ||||||
| 1,372 | 2013 | |||||||
| Government Money Market | 2,210 | 2012 | ||||||
| 5,102 | 2013 | |||||||
| California Tax Exempt Money Market | 583 | 2011 | ||||||
| 1,568 | 2012 | |||||||
| 1,560 | 2013 | |||||||
As of September 30, 2010, no previously waived fees were eligible for recapture with respect to the CCMA-Advised Funds.
CNAM, CNB and the Administrator have voluntarily agreed to further waive and reduce their fees and/or reimburse certain expenses of the Money Market Funds in order to maintain a one-day net income yield (yield floor) of each Fund of not less than 0.01% of the Fund’s average daily net assets. The following table shows waivers, with respect to such yield floor, by class for the year ended September 30, 2010:
Shareholder Servicing Fee Waiver (000) | Investment Advisory Fee Waiver (000) | Administration Fee Waiver (000) | ||||||||||
| Prime Money Market | ||||||||||||
| Institutional | $ | 1,258 | $ | 504 | $ | 39 | ||||||
| Class N | 2,387 | 529 | 40 | |||||||||
Class S | 2,165 | 339 | 26 | |||||||||
| Government Money Market | ||||||||||||
| Institutional | 236 | 169 | 7 | |||||||||
| Class N | 11,764 | 4,410 | 187 | |||||||||
Class S | 1,948 | 523 | 22 | |||||||||
| California Tax Exempt Money Market | ||||||||||||
| Institutional | 398 | 160 | 12 | |||||||||
| Class N | 3,327 | 738 | 54 | |||||||||
Class S | 356 | 56 | 4 | |||||||||
| 5. | INVESTMENT TRANSACTIONS: |
The cost of security purchases and proceeds from the sale and maturities of securities, other than temporary investments in short-term securities for the year ended September 30, 2010, were as follows for the Fixed Income Funds, Equity Funds, Multi-Asset Fund and CCMA-Advised Funds:
Purchases | Sales and Maturities | |||||||||||||||
Fund | U.S. Gov’t (000) | Other (000) | U.S. Gov’t (000) | Other (000) | ||||||||||||
| Corporate Bond | $ | — | $ | 41,598 | $ | 2,584 | $ | 23,874 | ||||||||
| Government Bond | 154,328 | 7,234 | 106,999 | — | ||||||||||||
| California Tax Exempt Bond | — | 14,364 | — | 11,226 | ||||||||||||
| High Yield Bond | — | 53,877 | — | 37,080 | ||||||||||||
| Large Cap Value Equity | — | 30,797 | — | 24,544 | ||||||||||||
| Large Cap Growth Equity | — | 21,281 | — | 21,392 | ||||||||||||
| RCB Small Cap Value | — | 10,788 | — | 11,104 | ||||||||||||
| Multi-Asset | — | 24,171 | * | — | 18,030 | * | ||||||||||
| Limited Maturity Fixed Income | 29,684 | 18,475 | 28,512 | 18,114 | ||||||||||||
| Full Maturity Fixed Income | 18,413 | 14,283 | 15,542 | 10,899 | ||||||||||||
| Diversified Equity | — | 69,832 | — | 63,402 | ||||||||||||
Socially Responsible Equity | — | 23,210 | — | 19,553 | ||||||||||||
| * | Includes $1,853(000) and $1,389(000) of purchases and sales, respectively, of affiliated registered investment companies. |
| 6. | FEDERAL TAX INFORMATION: |
It is each Fund’s intention to continue to qualify as a regulated investment company for Federal income tax purposes and distribute all of its taxable income and net capital gains. Accordingly, no provisions for Federal income taxes are required.
Management has analyzed the Funds’ tax position 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 departments of revenue.
The Funds may be subject to taxes imposed by countries in which they invest, with respect to their investments in issuers existing or operating in such countries. Such taxes are generally based on income earned. The Funds accrue such taxes when the related income is earned.
CNI CHARTER FUNDS | PAGE 100
The timing and characterization of certain income and capital gains distributions are determined annually in accordance with Federal tax regulations, which may differ from accounting principles generally accepted in the United States of America. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period. These book/tax differences may be temporary or permanent. To the extent these differences are permanent in nature, they are charged or credited to undistributed net investment income (loss), accumulated net realized gain (loss), or paid-in capital, as appropriate, in the period that the differences arise.
Accordingly, the following permanent differences, primarily attributable to REIT adjustments, corporate action adjustments, realized gains (losses) on paydowns and timing of distributions and investments in partnerships, were reclassified to/from the following accounts as of September 30, 2010:
Fund | Increase (Decrease) Undistributed Net Investment Income (Loss) (000) | Increase (Decrease) Accumulated Net Realized Gain (Loss) (000) | Decrease Paid in Capital (000) | |||||||||
| Prime Money Market | $ | (49 | ) | $ | 49 | $ | — | |||||
| Government Money Market | 4 | (4 | ) | — | ||||||||
| Corporate Bond | 3 | (3 | ) | — | ||||||||
| Government Bond | 1,030 | (1,030 | ) | — | ||||||||
| Large Cap Growth Equity | — | 82 | (82 | ) | ||||||||
| RCB Small Cap Value | 34 | (34 | ) | — | ||||||||
| Limited Maturity Fixed Income | 42 | (42 | ) | — | ||||||||
| Full Maturity Fixed Income | 26 | (26 | ) | — | ||||||||
Diversified Equity | 4 | (2 | ) | (2 | ) | |||||||
These reclassifications had no effect on net assets or net asset value per share.
The tax character of dividends and distributions paid during the years ended September 30, 2010 and September 30, 2009 were as follows:
Fund | Tax Exempt Income (000) | Ordinary Income (000) | Long-Term Capital Gain (000) | Return of Capital (000) | Total (000) | |||||||||||||||
| Prime Money Market | ||||||||||||||||||||
| 2010 | $ | — | $ | 921 | $ | — | $ | — | $ | 921 | ||||||||||
| 2009 | — | 7,503 | — | — | 7,503 | |||||||||||||||
| Government Money Market | ||||||||||||||||||||
| 2010 | — | 680 | — | — | 680 | |||||||||||||||
| 2009 | — | 6,635 | — | — | 6,635 | |||||||||||||||
| California Tax Exempt Money Market | ||||||||||||||||||||
| 2010 | 246 | 9 | — | — | 255 | |||||||||||||||
| 2009 | 2,953 | — | — | — | 2,953 | |||||||||||||||
| Corporate Bond | ||||||||||||||||||||
| 2010 | — | 3,307 | — | — | 3,307 | |||||||||||||||
| 2009 | — | 2,952 | — | — | 2,952 | |||||||||||||||
| Government Bond | ||||||||||||||||||||
| 2010 | — | 3,564 | — | — | 3,564 | |||||||||||||||
| 2009 | — | 2,435 | — | — | 2,435 | |||||||||||||||
| California Tax Exempt Bond | ||||||||||||||||||||
| 2010 | 1,234 | 1 | — | — | 1,235 | |||||||||||||||
| 2009 | 1,151 | — | — | — | 1,151 | |||||||||||||||
| High Yield Bond | ||||||||||||||||||||
| 2010 | — | 4,049 | — | — | 4,049 | |||||||||||||||
| 2009 | — | 2,755 | — | — | 2,755 | |||||||||||||||
| Large Cap Value Equity | ||||||||||||||||||||
| 2010 | — | 1,234 | — | — | 1,234 | |||||||||||||||
| 2009 | — | 1,495 | — | — | 1,495 | |||||||||||||||
| Large Cap Growth Equity | ||||||||||||||||||||
| 2010 | — | 164 | — | — | 164 | |||||||||||||||
| 2009 | — | 222 | — | — | 222 | |||||||||||||||
| RCB Small Cap Value | ||||||||||||||||||||
| 2010 | — | 14 | — | — | 14 | |||||||||||||||
| 2009 | — | 439 | — | — | 439 | |||||||||||||||
| Multi-Asset | ||||||||||||||||||||
| 2010 | — | 521 | — | — | 521 | |||||||||||||||
| 2009 | — | 375 | — | — | 375 | |||||||||||||||
| Limited Maturity Fixed Income | ||||||||||||||||||||
| 2010 | — | 848 | — | — | 848 | |||||||||||||||
| 2009 | — | 1,045 | — | — | 1,045 | |||||||||||||||
| Full Maturity Fixed Income | ||||||||||||||||||||
| 2010 | — | 1,544 | 195 | — | 1,739 | |||||||||||||||
| 2009 | — | 1,657 | — | — | 1,657 | |||||||||||||||
| Diversified Equity | ||||||||||||||||||||
| 2010 | — | 304 | — | 2 | 306 | |||||||||||||||
| 2009 | — | 764 | — | 5 | 769 | |||||||||||||||
| Socially Responsible Equity | ||||||||||||||||||||
| 2010 | — | 589 | — | — | 589 | |||||||||||||||
| 2009 | — | 796 | — | — | 796 | |||||||||||||||
CNI CHARTER FUNDS | PAGE 101
| notes to financial statements |
September 30, 2010 |
As of September 30, 2010, the components of Distributable Earnings/(Accumulated Losses) on a tax basis were as follows:
Fund | Undistributed Tax-Exempt Income (000) | Undistributed Ordinary Income (000) | Undistributed Long-Term Capital Gain (000) | Capital Loss Carryforwards (000) | Post-October Losses (000) | Unrealized Appreciation (Depreciation) (000) | Other Temporary Differences (000) | Total Distributable Earnings (Accumulated Losses) (000) | ||||||||||||||||||||||||
| Prime Money Market | $ | — | $ | 88 | $ | — | $ | — | $ | — | $ | — | $ | (50 | ) | $ | 38 | |||||||||||||||
| Government Money Market | — | 68 | — | — | (5 | ) | — | (48 | ) | 15 | ||||||||||||||||||||||
| California Tax Exempt Money Market | 16 | 1 | — | — | — | — | (15 | ) | 2 | |||||||||||||||||||||||
| Corporate Bond | — | 278 | — | (519 | ) | — | 5,946 | (278 | ) | 5,427 | ||||||||||||||||||||||
| Government Bond | — | 314 | — | (26 | ) | (451 | ) | 2,881 | (314 | ) | 2,404 | |||||||||||||||||||||
| California Tax Exempt Bond | 98 | — | 186 | — | — | 1,605 | (98 | ) | 1,791 | |||||||||||||||||||||||
| High Yield Bond | — | 406 | — | (3,362 | ) | (206 | ) | 937 | (406 | ) | (2,631 | ) | ||||||||||||||||||||
| Large Cap Value Equity | — | 314 | — | (8,465 | ) | — | (818 | ) | (315 | ) | (9,284 | ) | ||||||||||||||||||||
| Large Cap Growth Equity | — | 40 | — | (4,008 | ) | (1,007 | ) | 4,839 | (38 | ) | (174 | ) | ||||||||||||||||||||
| RCB Small Cap Value | — | 88 | — | (6,160 | ) | — | 3,340 | — | (2,732 | ) | ||||||||||||||||||||||
| Multi-Asset | — | 129 | — | (3,636 | ) | — | 2,080 | (129 | ) | (1,556 | ) | |||||||||||||||||||||
| Limited Maturity Fixed Income | — | 55 | — | (2,815 | ) | — | 1,110 | (55 | ) | (1,705 | ) | |||||||||||||||||||||
| Full Maturity Fixed Income | — | 223 | 47 | — | — | 2,528 | (116 | ) | 2,682 | |||||||||||||||||||||||
| Diversified Equity | — | — | — | (23,918 | ) | — | 3,373 | — | (20,545 | ) | ||||||||||||||||||||||
| Socially Responsible Equity | — | — | — | (9,434 | ) | (1,208 | ) | 2,815 | — | (7,827 | ) | |||||||||||||||||||||
For tax purposes, the losses in the Funds can be carried forward for a maximum of eight years to offset any future net realized capital gains. As of September 30, 2010, the breakdown of capital loss carryforwards was as follows:
Expiring September 30, | ||||||||||||||||||||||||||||||||
Fund | 2011 (000) | 2012 (000) | 2013 (000) | 2014 (000) | 2015 (000) | 2016 (000) | 2017 (000) | 2018 (000) | ||||||||||||||||||||||||
| Corporate Bond | $ | — | $ | — | $ | — | $ | 42 | $ | 271 | $ | 116 | $ | 90 | $ | — | ||||||||||||||||
| Government Bond | — | — | — | — | — | 26 | — | — | ||||||||||||||||||||||||
| High Yield Bond | 521 | — | — | 268 | — | — | 832 | 1,741 | ||||||||||||||||||||||||
| Large Cap Value Equity | — | — | — | — | — | — | 2,809 | 5,656 | ||||||||||||||||||||||||
| Large Cap Growth Equity | 1,844 | 227 | — | — | — | — | 454 | 1,483 | ||||||||||||||||||||||||
| RCB Small Cap Value | — | — | — | — | — | — | 589 | 5,571 | ||||||||||||||||||||||||
| Multi-Asset | — | — | — | — | — | — | 2,309 | 1,327 | ||||||||||||||||||||||||
| Limited Maturity Fixed Income | — | 22 | 838 | 132 | 1,415 | — | 81 | 327 | ||||||||||||||||||||||||
| Diversified Equity | — | — | — | — | — | — | 10,584 | 13,334 | ||||||||||||||||||||||||
| Socially Responsible Equity | — | — | — | — | — | 81 | 2,161 | 7,192 | ||||||||||||||||||||||||
During the year ended September 30, 2010, the following Funds had utilized capital loss carryforwards to offset capital gains amounting to:
Fund | Amount (000) | |||
| Corporate Bond | $ | 22 | ||
| Government Bond | 88 | |||
California Tax Exempt Bond | 186 | |||
Post-October losses represent losses realized on investments and foreign currency transactions from November 1, 2009, through September 30, 2010, that, in accordance with Federal income tax regulations, the Funds have elected to defer and treat as having arisen in the following fiscal year.
The aggregate gross unrealized appreciation on securities, the aggregate gross unrealized depreciation on securities and the net unrealized appreciation/ (depreciation) for tax purposes at September 30, 2010, for each of the Fixed Income and Equity Funds, Multi-Asset Fund and CCMA-Advised Funds were as follows:
Fund | Federal Tax Cost (000) | Aggregate Gross Unrealized Appreciation (000) | Aggregate Gross Unrealized Depreciation (000) | Net Unrealized Appreciation (Deprecation) (000) | ||||||||||||
| Corporate Bond | $ | 100,834 | $ | 6,098 | $ | (152 | ) | $ | 5,946 | |||||||
| Government Bond | 155,119 | 3,339 | (458 | ) | 2,881 | |||||||||||
| California Tax Exempt Bond | 41,424 | 1,627 | (22 | ) | 1,605 | |||||||||||
| High Yield Bond | 55,567 | 2,585 | (1,648 | ) | 937 | |||||||||||
| Large Cap Value Equity | 105,623 | 9,195 | (10,013 | ) | (818 | ) | ||||||||||
| Large Cap Growth Equity | 35,955 | 6,009 | (1,169 | ) | 4,840 | |||||||||||
| RCB Small Cap Value | 21,227 | 6,015 | (2,675 | ) | 3,340 | |||||||||||
| Multi Asset | 30,954 | 2,391 | (312 | ) | 2,079 | |||||||||||
| Limited Maturity Fixed Income | 39,104 | 1,121 | (11 | ) | 1,110 | |||||||||||
| Full Maturity Fixed Income | 47,875 | 2,588 | (60 | ) | 2,528 | |||||||||||
| Diversified Equity | 62,829 | 7,045 | (3,672 | ) | 3,373 | |||||||||||
| Socially Responsible Equity | 59,328 | 6,789 | (3,974 | ) | 2,815 | |||||||||||
CNI CHARTER FUNDS | PAGE 102
At September 30, 2010, the Money Market Funds’ cost of securities for Federal income tax purposes approximates the cost disclosed in the Schedule of Investments.
| 7. | CONCENTRATION OF CREDIT RISK |
In the normal course of business, the Funds enter into contracts that provide general indemnifications. The Funds’ maximum exposure under these arrangements is dependent on future claims that may be made against the Funds and, therefore, cannot be established; however, based on experience, the risk of loss from such claim is considered remote.
The Multi-Asset Fund may invest in exchange-traded notes (“ETNs”) as a non-principal investment strategy. ETNs are unsecured debt obligations of investment banks which are traded on exchanges and the returns of which are linked to the performance of market indexes. In addition to trading ETNs on exchanges, investors may redeem ETNs directly with the issuer on a weekly basis, typically in a minimum amount of 50,000 units, or hold the ETNs until maturity. ETNs are riskier than ordinary unsecured debt securities and have no principal protection. The Fund will generally invest in ETNs which are linked to commodities indexes. The Fund’s investment in an ETN may be influenced by many unpredictable factors, including highly volatile commodities prices, changes in supply and demand relationships, weather, ag riculture, trade, changes in interest rates, and monetary and other governmental policies, action and inaction. Investing in ETNs is not equivalent to investing directly in index components or the relevant index itself. Because ETNs are debt securities, they possess credit risk; if the issuer has financial difficulties or goes bankrupt, the investor may not receive the return it was promised.
California Tax Exempt Funds – Specific Risks
The ability of issuers to pay interest on, and repay principal of, California municipal securities may be affected by economic and political developments in the State of California.
Certain securities are backed by letters of credit from various financial institutions and financial guaranty assurance agencies. These letters of credit enhance the credit quality of the individual securities; however, if any of the financial institutions or financial guaranty assurance agencies’ credit quality should deteriorate, it could cause the individual security’s credit quality to change. Additionally, if any of the Funds concentrate their letters of credit in any one financial institution, the risk of credit quality deterioration increases.
| 8. | CAPITAL SHARES ISSUED AND REDEEMED: |
Capital share activity for the years ended September 30, 2010 and September 30, 2009, were as follows:
Prime Money Market Fund (000) | Government Money Market Fund (000) | California Tax Exempt Money Market Fund (000) | ||||||||||||||||||||||
2010 | 2009 | 2010 | 2009 | 2010 | 2009 | |||||||||||||||||||
| CAPITAL SHARES ISSUED AND REDEEMED: | ||||||||||||||||||||||||
| Institutional Class: | ||||||||||||||||||||||||
| Shares issued | 1,322,472 | 1,288,265 | 618,772 | 655,511 | 1,024,504 | 1,126,167 | ||||||||||||||||||
| Shares issued in Lieu of Dividends and Distributions | 83 | 442 | 1 | 8 | — | — | ||||||||||||||||||
Shares redeemed | (1,375,843 | ) | (1,278,342 | ) | (661,586 | ) | (632,330 | ) | (1,025,845 | ) | (1,142,015 | ) | ||||||||||||
Net Institutional Class transactions | (53,288 | ) | 10,365 | (42,813 | ) | 23,189 | (1,341 | ) | (15,848 | ) | ||||||||||||||
| Class N: | ||||||||||||||||||||||||
| Shares issued | 1,396,173 | 2,117,635 | 4,589,006 | 4,478,647 | 1,197,782 | 1,708,583 | ||||||||||||||||||
| Shares issued in Lieu of Dividends and Distributions | 195 | 1,555 | 504 | 4,161 | 178 | 1,814 | ||||||||||||||||||
Shares redeemed | (1,620,744 | ) | (2,586,377 | ) | (4,540,616 | ) | (4,940,602 | ) | (1,263,962 | ) | (1,886,349 | ) | ||||||||||||
Net Class N transactions | (224,376 | ) | (467,187 | ) | 48,894 | (457,794 | ) | (66,002 | ) | (175,952 | ) | |||||||||||||
| Class S: | ||||||||||||||||||||||||
| Shares issued | 1,102,036 | 1,140,178 | 990,276 | 659,453 | 145,553 | 354,327 | ||||||||||||||||||
| Shares issued in Lieu of Dividends and Distributions | — | — | — | — | — | — | ||||||||||||||||||
Shares redeemed | (1,122,183 | ) | (1,401,263 | ) | (940,420 | ) | (769,358 | ) | (171,685 | ) | (421,688 | ) | ||||||||||||
Net Class S transactions | (20,147 | ) | (261,085 | ) | 49,856 | (109,905 | ) | (26,132 | ) | (67,361 | ) | |||||||||||||
CNI CHARTER FUNDS | PAGE 103
| notes to financial statements |
September 30, 2010 |
| 8. | CAPITAL SHARES ISSUED AND REDEEMED (CONTINUED): |
Corporate Bond Fund (000) | Government Bond Fund (000) | California Tax Exempt Bond Fund (000) | High Yield Bond Fund (000) | |||||||||||||||||||||||||||||
2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | |||||||||||||||||||||||||
| CAPITAL SHARES ISSUED AND REDEEMED: | ||||||||||||||||||||||||||||||||
| Institutional Class: | ||||||||||||||||||||||||||||||||
| Shares issued | 3,350 | 2,736 | 11,176 | 2,172 | 1,143 | 1,204 | 2,887 | 307 | ||||||||||||||||||||||||
| Shares issued in Lieu of Dividends and Distributions | 84 | 67 | 217 | 65 | 47 | 39 | 126 | 130 | ||||||||||||||||||||||||
Shares redeemed | (2,143 | ) | (1,529 | ) | (3,622 | ) | (1,789 | ) | (1,061 | ) | (998 | ) | (1,103 | ) | (156 | ) | ||||||||||||||||
Net Institutional Class transactions | 1,291 | 1,274 | 7,771 | 448 | 129 | 245 | 1,910 | 281 | ||||||||||||||||||||||||
| Class N: | ||||||||||||||||||||||||||||||||
| Shares issued | 227 | 48 | 168 | 101 | 282 | 132 | 511 | 405 | ||||||||||||||||||||||||
| Shares issued in Lieu of Dividends and Distributions | 2 | 1 | 3 | 4 | 3 | 1 | 153 | 158 | ||||||||||||||||||||||||
Shares redeemed | (104 | ) | (17 | ) | (160 | ) | (77 | ) | (156 | ) | (58 | ) | (372 | ) | (334 | ) | ||||||||||||||||
Net Class N transactions | 125 | 32 | 11 | 28 | 129 | 75 | 292 | 229 | ||||||||||||||||||||||||
Large Cap Value Equity Fund (000) | Large Cap Growth Equity Fund (000) | RCB Small Cap Value Fund (000) | Multi-Asset Fund (000) | |||||||||||||||||||||||||||||
2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | |||||||||||||||||||||||||
| CAPITAL SHARES ISSUED AND REDEEMED: | ||||||||||||||||||||||||||||||||
| Institutional Class: | ||||||||||||||||||||||||||||||||
| Shares issued | 3,000 | 3,207 | 1,180 | 1,140 | 60 | 54 | 499 | 481 | ||||||||||||||||||||||||
| Shares issued in Lieu of Dividends and Distributions | 108 | 150 | 6 | 9 | — | 3 | 15 | 10 | ||||||||||||||||||||||||
Shares redeemed | (1,944 | ) | (2,904 | ) | (1,066 | ) | (1,395 | ) | (25 | ) | (37 | ) | (282 | ) | (744 | ) | ||||||||||||||||
Net Institutional Class transactions | 1,164 | 453 | 120 | (246 | ) | 35 | 20 | 232 | (253 | ) | ||||||||||||||||||||||
| Class N: | ||||||||||||||||||||||||||||||||
| Shares issued | 214 | 86 | 96 | 92 | 18 | 1 | 720 | 359 | ||||||||||||||||||||||||
| Shares issued in Lieu of Dividends and Distributions | 9 | 15 | 2 | 4 | — | 4 | 18 | 12 | ||||||||||||||||||||||||
Shares redeemed | (140 | ) | (291 | ) | (178 | ) | (346 | ) | (17 | ) | (36 | ) | (320 | ) | (387 | ) | ||||||||||||||||
Net Class N transactions | 83 | (190 | ) | (80 | ) | (250 | ) | 1 | (31 | ) | 418 | (16 | ) | |||||||||||||||||||
| Class R: | ||||||||||||||||||||||||||||||||
| Shares issued | — | — | — | — | 36 | 79 | — | — | ||||||||||||||||||||||||
| Shares issued in Lieu of Dividends and Distributions | — | — | — | — | 1 | 28 | — | — | ||||||||||||||||||||||||
Shares redeemed | — | — | — | — | (150 | ) | (372 | ) | — | — | ||||||||||||||||||||||
Net Class R transactions | — | — | — | — | (113 | ) | (265 | ) | — | — | ||||||||||||||||||||||
CNI CHARTER FUNDS | PAGE 104
| 8. | CAPITAL SHARES ISSUED AND REDEEMED (CONTINUED): |
Limited Maturity Fixed Income Fund (000) | Full Maturity Fixed Income Fund (000) | Diversified Equity Fund (000) | Socially Responsible Equity Fund (000) | |||||||||||||||||||||||||||||
2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | |||||||||||||||||||||||||
| CAPITAL SHARES ISSUED AND REDEEMED: | ||||||||||||||||||||||||||||||||
| Institutional Class: | ||||||||||||||||||||||||||||||||
| Shares issued | 2,399 | 274 | 415 | (1) | 69 | 725 | (1) | 929 | 1,303 | 1,511 | ||||||||||||||||||||||
| Shares issued in Lieu of Dividends and Distributions | 48 | 64 | 129 | 126 | 21 | 71 | 66 | 115 | ||||||||||||||||||||||||
Shares redeemed | (2,846 | ) | (5,805 | ) | (126 | ) | (722 | ) | (471 | ) | (2,649 | ) | (974 | ) | (836 | ) | ||||||||||||||||
Net Institutional Class transactions | (399 | ) | (5,467 | ) | 418 | (527 | ) | 275 | (1,649 | ) | 395 | 790 | ||||||||||||||||||||
| Class N: | ||||||||||||||||||||||||||||||||
| Shares issued | 970 | 103 | 311 | 58 | 136 | 30 | 172 | 95 | ||||||||||||||||||||||||
| Shares issued in Lieu of Dividends and Distributions | 9 | 2 | 8 | 2 | 1 | 5 | 2 | 2 | ||||||||||||||||||||||||
Shares redeemed | (286 | ) | (13 | ) | (73 | ) | (26 | ) | (78 | ) | (121 | ) | (33 | ) | (56 | ) | ||||||||||||||||
Net Class N transactions | 693 | 92 | 246 | 34 | 59 | (86 | ) | 141 | 41 | |||||||||||||||||||||||
| (1) | Includes subscriptions as a result of an in-kind transfer of securities (see Note 9). |
| 9. | IN-KIND TRANSACTIONS |
During the year ended September 30, 2010, the Full Maturity Fund and Diversified Fund issued shares of beneficial interest in exchange for securities. The securities were transferred at their current value on March 19, 2010, as follows:
Fund | Shares Issued | Value ($ Thousands) | ||||||
| Full Maturity Fixed Income Fund | 411,798 | $ | 4,332 | |||||
| Diversified Equity Fund | 584,035 | $ | 7,189 | |||||
| 10. | SUBSEQUENT EVENTS |
The Trust has evaluated the need for additional disclosures and/or adjustments resulting from subsequent events. Based on this evaluation, no adjustments were required to the financial statements as of September 30, 2010.
CNI CHARTER FUNDS | PAGE 105
| report of independent registered public accounting firm |
To the Shareholders and Board of Trustees of
CNI Charter Funds:
We have audited the accompanying statements of assets and liabilities of the Prime Money Market Fund, Government Money Market Fund, California Tax Exempt Money Market Fund, Corporate Bond Fund, Government Bond Fund, California Tax Exempt Bond Fund, High Yield Bond Fund, Large Cap Value Equity Fund, Large Cap Growth Equity Fund, RCB Small Cap Value Fund, Multi-Asset Fund, Limited Maturity Fixed Income Fund, Full Maturity Fixed Income Fund, Diversified Equity Fund and Socially Responsible Equity Fund (collectively, the “Funds”), including the schedules of investments, as of September 30, 2010, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the years in the two year period then ended, and the financial highlights for each of the years or periods in the five-ye ar period then ended. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with 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 o pinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the aforementioned Funds of the CNI Charter Funds as of September 30, 2010, the results of their operations for the year then ended, changes in their net assets for each of the years in the two year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended, in conformity with accounting principles generally accepted in the United States of America.
Philadelphia, Pennsylvania
November 24, 2010
CNI CHARTER FUNDS | PAGE 106
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CNI CHARTER FUNDS | PAGE 107
trustees and officers (Unaudited) |
September 30, 2010 |
Information pertaining to the Trustees and Officers of the Trust is set forth below as of September 30, 2010. Trustees who are not deemed to be “interested persons” of the Trust as defined in the Investment Company Act of 1940 are referred to as “Independent Trustees.” Trustees who are deemed to be “interested persons” of the Trust are referred to as “Interested Trustees.” 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 1-888-889-0799.
Name Address, and Age | Position(s) Held with Trust | Term of Office and Length of Time Served1 | Principal Occupation(s) During Past Five Years | Number of Portfolios in F und Complex Overseen by Board Member2 | Other Directorships Held by Trustee |
INTERESTED TRUSTEE | |||||
Vernon C. Kozlen* CNI Charter Funds 400 N. Roxbury Drive Beverly Hills, CA 90210 Age: 67 | Trustee | Since 2007 | President and Chief Executive Officer, CNI Charter Funds (2000-2007). Executive Vice President and Director of Asset Management Development, CNB (1996-2007). Director, Reed, Conner & Birdwell LLC (2000-present), and Convergent Capital Management, LLC (2003-present). Chairman of the Board, CNAM, Inc. (2001-2005). Chairman of the Board, City National Securities, Inc. (1999-2005). Director, CNAM, Inc. (2001-2006), and City National Securities, Inc. (1999-2006). | 15 | None |
INDEPENDENT TRUSTEES | |||||
Irwin G. Barnet, Esq. CNI Charter Funds 400 N. Roxbury Drive Beverly Hills, CA 90210 Age: 72 | Trustee | Since 1999 | Attorney and counsel, Reed Smith LLP, a law firm (2003-present). Partner, Reed Smith LLP (2003-2008). Attorney and principal, Crosby, Heafey, Roach & May P.C., a law firm (2000-2002). Attorney and principal, Sanders, Barnet, Goldman, Simons & Mosk, a law firm (1980-2000). | 15 | None |
Victor Meschures CNI Charter Funds 400 N. Roxbury Drive Beverly Hills, CA 90210 Age: 72 | Trustee | Since 1999 | Certified Public Accountant, Meschures, Campeas,Thompson, Snyder, Pocras, Levin & Dimaggio, LLP, an accounting firm (1964-present). | 15 | None |
William R. Sweet CNI Charter Funds 400 N. Roxbury Drive Beverly Hills, CA 90210 Age: 73 | Trustee | Since 1999 | Retired. Executive Vice President, Union Bank of California (1985-1996). | 15 | None |
James Wolford CNI Charter Funds 400 N. Roxbury Drive Beverly Hills, CA 90210 Age: 56 | Trustee | Since 1999 | Chief Financial Officer, Pacific Office Properties, a real estate investment trust (April 2010-present).Chief Financial Officer, Bixby Land Company, a real estate company (2004-March 2010). Regional Financial Officer, AIMCO, a real estate investment trust (2004). Chief Financial Officer, DBM Group, a direct mail marketing company (2001-2004). Senior Vice President and Chief Operating Officer, Forecast Commercial Real Estate Service, Inc. (2000-2001). Senior Vice President and Chief Financial Officer, Bixby Ranch Company (1985-2000). | 15 | None |
CNI CHARTER FUNDS | PAGE 108
Name Address, and Age | Position Held with Trust | Term of Office and Length of Time Served3 | Principal Occupation(s) During Past Five Years |
OFFICERS | |||
Joseph Gallo SEI Investments One Freedom Valley Drive Oaks, PA 19456 Age: 37 | Vice President and Secretary | Since 2008 | Attorney for SEI Investments since 2007. Associate Counsel at ICMA–RC from 2004 to 2007. Assistant Secretary of The Vantage Trust Company in 2007. Assistant Secretary of The Vantagepoint Funds from 2006 to 2007. Investigator, U.S. Department of Labor from 2002 to 2004. |
Richard Gershen City National Bank 400 N. Roxbury Drive Beverly Hills, California 90210 Age: 56 | President and Chief Executive Officer | Since May 2010 | Executive Vice President, Wealth Management Division, CNB (February 2009-present); Executive Managing Director, Business Management and Strategy, Evergreen Investments, a division of Wachovia (2000-2009); Chief Operating Officer, Banc America Capital Management (1995-2000); Fixed Income Portfolio Manager and Chief Financial Officer, Shields Asset Management (1987-1995). |
Eric Kleinschmidt SEI Investments One Freedom Valley Drive Oaks, PA 19456 Age: 42 | Controller and Chief Operating Officer | Since 2005 | Director of Fund Accounting, SEI Investments (2004-Present). Manager of Fund Accounting, SEI Investments (1999-2004). |
Valerie Y. Lewis City National Bank 555 S. Flower Street, 18th Floor Los Angeles, CA 90071 Age: 54 | Vice President and Chief Compliance Officer | Since 2005 | Chief Compliance Officer, CNAM, Inc. (August, 2005-present). Fund Boards Specialist – Assistant Secretary, Capital Research and Management and Company Capital International, Inc. (1999-2005). |
Carolyn Mead SEI Investments One Freedom Valley Drive Oaks, Pennsylvania 19456 Age: 52 | Vice President and Assistant Secretary | Since February 2010 | Attorney, SEI Investments Company (2007-present). Associate, Stradley, Ronon, Stevens & Young (2004-2007). Counsel, ING Variable Annuities (1999-2002). |
Susan Rudzinski CCM Advisors, LLC 190 S. LaSalle Street Suite 2800 Chicago, IL 60603 Age: 47 | Vice President | Since May 2007 | Compliance Director, Convergent Capital Management, LLC (2006-present); Self-employed Investment Advisory Compliance and Operations Consultant (2005-2006); Manager, Affiliate Contracts, The Burridge Group LLC (2003-2004). |
| 1 | Each Trustee serves until the next meeting of shareholders, if any, called for the purpose of electing trustees and until the election and qualification of his or her successor or until death, resignation, declaration of bankruptcy or incompetence by a court of competent jurisdiction, or removal by a majority vote of the Trustees or the shares entitled to vote. |
| 2 | “Fund complex” is defined as two or more registered investment companies that hold themselves out to investors as related companies or have a common investment adviser or affiliated investment advisers. |
| 3 | Each officer serves until removed by the Board or the principal executive officer of the Trust, or until such officer resigns. |
| * | Mr. Kozlen is an “interested person” of the Trust, as defined in the 1940 Act, by virtue of his position with CNB, the parent company of CNAM, Inc. until March 2007 and his continuing provision of consulting services to CNB. |
CNI CHARTER FUNDS | PAGE 109
trustees and officers (Unaudited) (Continued) |
September 30, 2010 |
Name Address, and Age | Position Held with Trust | Term of Office and Length of Time Served1 | Principal Occupation(s) During Past Five Years |
OFFICERS (concluded) | |||
Timothy G. Solberg CCM Advisors, LLC 190 S. LaSalle Street Suite 2800 Chicago, IL 60603 Age: 57 | Vice President and Assistant Secretary | Since 2005 | Managing Director and Chief Investment Officer, CCM Advisors (2001-present); Director of Marketing and Client Services, Hewitt Investment Group, a Division of Hewitt Associates LLC (1989-2001). |
Bernadette Sparling SEI Investments One Freedom Valley Drive Oaks, Pennsylvania 19456 Age: 32 | Vice President and Assistant Secretary | Since February 2010 | Attorney, SEI Investments Company (2005-present). Associate, Blank Rome LLP (2001-2005). |
Brent Vasher SEI Investments One Freedom Valley Drive Oaks, Pennsylvania 19456 Age: 27 | Vice President and Assistant Secretary | Since February 2010 | Attorney, SEI Investments Company (2008-present). Associate, Law Office of Lloyd Z. Remick (2006-2008). |
| 1 | Each officer serves until removed by the Board or the principal executive officer of the Trust, or until such officer resigns. |
CNI CHARTER FUNDS | PAGE 110
notice to shareholders (Unaudited) |
September 30, 2010 |
For shareholders that do not have a September 30, 2010 taxable year end, this notice is for informational purposes only. For shareholders with a September 30, 2010 taxable year end, please consult your tax advisor as to the pertinence of this notice.
For California income tax purposes, for the fiscal year ended September 30, 2010, each of the California Tax Exempt Bond Fund and California Tax Exempt Money Market Fund is designating 86.60% and 95.37%, respectively, of its distributions paid from net investment income as exempt-interest dividends under Section 17145 of the California Revenue and Taxation Code.
For Federal income tax purposes, for the fiscal year ended September 30, 2010 each Fund is designating the following items with regard to distributions paid during the year:
(A) Long Term Capital Gain Distributions | (B) Return of Capital | (C) Ordinary Income Distributions | (D) Tax Exempt Interest | (E) Total Distributions | (F) Dividends Qualifying for Corporate Dividends Rec. Deduction (1) | (G) Qualifying Dividend Income (2) | (H) U.S. Government Interest (3) | (I) Qualified Interest Income (4) | (J) Qualified Short-Term Capital Gain (5) | |
| Prime Money Market Fund | 0.00% | 0.00% | 100.00% | 0.00% | 100.00% | 0.00% | 0.00% | 6.11% | 96.67% | 100.00% |
| Government Money Market Fund | 0.00% | 0.00% | 100.00% | 0.00% | 100.00% | 0.00% | 0.00% | 56.56% | 99.61% | 100.00% |
| California Tax Exempt Money Market Fund | 0.00% | 0.00% | 3.50% | 96.50% | 100.00% | 0.00% | 0.00% | 0.00% | 0.00% | 100.00% |
| Corporate Bond Fund | 0.00% | 0.00% | 100.00% | 0.00% | 100.00% | 0.00% | 0.00% | 0.50% | 96.32% | 0.00% |
| Government Bond Fund | 0.00% | 0.00% | 100.00% | 0.00% | 100.00% | 0.00% | 0.00% | 34.65% | 99.95% | 0.00% |
| California Tax Exempt Bond Fund | 0.00% | 0.00% | 0.12% | 99.88% | 100.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| High Yield Bond Fund | 0.00% | 0.00% | 100.00% | 0.00% | 100.00% | 0.00% | 0.00% | 0.00% | 99.91% | 0.00% |
| Large Cap Value Equity Fund | 0.00% | 0.00% | 100.00% | 0.00% | 100.00% | 100.00% | 100.00% | 0.00% | 0.00% | 0.00% |
| Large Cap Growth Equity Fund | 0.00% | 0.00% | 100.00% | 0.00% | 100.00% | 100.00% | 100.00% | 0.00% | 0.00% | 0.00% |
| RCB Small Cap Value Fund | 0.00% | 0.00% | 100.00% | 0.00% | 100.00% | 100.00% | 100.00% | 0.00% | 0.62% | 0.00% |
| Multi-Asset Fund | 0.00% | 0.00% | 100.00% | 0.00% | 100.00% | 1.28% | 34.90% | 0.35% | 1.91% | 0.00% |
| Limited Maturity Fixed Income Fund | 0.00% | 0.00% | 100.00% | 0.00% | 100.00% | 0.00% | 0.00% | 18.70% | 98.23% | 0.00% |
| Full Maturity Fixed Income Fund | 11.14% | 0.00% | 88.86% | 0.00% | 100.00% | 0.00% | 0.00% | 14.80% | 93.45% | 100.00% |
| Diversified Equity Fund | 0.00% | 0.56% | 99.44% | 0.00% | 100.00% | 100.00% | 100.00% | 0.00% | 0.00% | 0.00% |
Socially Responsible Equity Fund | 0.00% | 0.01% | 99.99% | 0.00% | 100.00% | 100.00% | 100.00% | 0.00% | 0.00% | 0.00% |
| (1) | “Dividends Received Deduction” represent dividends which qualify for the corporate dividends received deduction. |
| (2) | “Qualifying Dividend Income” represent qualifying dividends as created by the Jobs and Growth Tax Relief Reconciliation Act of 2003. The Fund intends to designate the maximum amount permitted by law. |
| (3) | “U.S. Government Interest” represent the amount of interest that was derived from direct U.S. Government obligations and distributed during the fiscal year. This amount is reflected as a percentage of ordinary income. Generally, interest from direct U.S. Government obligations is exempt from state income tax. However, for shareholders who are residents of California, Connecticut or New York, the statutory threshold requirements were not satisfied to permit exemption of these amounts from state income. |
| (4) | “Interest Related Dividends” represent qualifying interest that is exempt from U.S. withholding tax when paid to foreign investors as created by the American Jobs Creation Act of 2004. This provision of the Internal Revenue Code will be expiring for years beginning after December 31, 2009. |
| (5) | “Short-Term Capital Gain Dividends” represent qualifying short-term capital gain that is exempt from U.S. withholding tax when paid to foreign investors as created by the American Jobs Creation Act of 2004. This provision of the Internal Revenue Code will be expiring for years beginning after December 31, 2009. |
Items (A), (B), (C), (D) and (E) are based on the percentage of each fund’s total distribution.
Items (F) and (G) are based on the percentage of “Ordinary Income Distributions.”
Item (H) is based on the percentage of gross income of each Fund.
Item (I) is based on the percentage of net investment income distributions.
Item (J) is based on the percentage of short-term capital gain distributions.
CNI CHARTER FUNDS | PAGE 111
disclosure of fund expenses (Unaudited) |
All mutual funds have operating expenses. As a shareholder of a Fund, your investment is affected by these ongoing costs, which include (among others) costs for portfolio management, administrative services, class-specific distribution fees and shareholder reports like this one. It is important for you to understand the impact of these costs on your investment returns.
Operating expenses such as these are deducted from the Fund’s gross income and directly reduce your final investment return. These expenses are expressed as a percentage of the Fund’s average net assets; this percentage is known as the 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 illustrates your Fund’s costs in two ways:
Actual Fund Return. This section helps you to estimate the actual expenses 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 assumes that the Fund had an annual 5% return before expenses during the year, but that the expense ratio (Column 3) for the period is unchanged. This example 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 funds.
NOTE: Because the return is set at 5% for comparison purposes – NOT your Fund’s actual return – the account values shown do not apply to your specific investment.
Beginning Account Value 4/1/2010 | Ending Account Value 9/30/2010 | Annualized Expense Ratios | Expense Paid During Period* | |||||||||||||
Prime Money Market Fund | ||||||||||||||||
| Actual Fund Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,000.40 | 0.29 | % | $ | 1.45 | ||||||||
| Class N | 1,000.00 | 1,000.20 | 0.32 | 1.60 | ||||||||||||
| Class S | 1,000.00 | 1,000.10 | 0.34 | 1.70 | ||||||||||||
| Hypothetical 5% Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,023.61 | 0.29 | % | $ | 1.47 | ||||||||
| Class N | 1,000.00 | 1,023.46 | 0.32 | 1.62 | ||||||||||||
| Class S | 1,000.00 | 1,023.36 | 0.34 | 1.72 | ||||||||||||
Government Money Market Fund | ||||||||||||||||
| Actual Fund Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,000.20 | 0.20 | % | $ | 1.00 | ||||||||
| Class N | 1,000.00 | 1,000.10 | 0.21 | 1.05 | ||||||||||||
| Class S | 1,000.00 | 1,000.10 | 0.22 | 1.10 | ||||||||||||
| Hypothetical 5% Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,024.07 | 0.20 | % | $ | 1.01 | ||||||||
| Class N | 1,000.00 | 1,024.02 | 0.21 | 1.07 | ||||||||||||
| Class S | 1,000.00 | 1,023.97 | 0.22 | 1.12 | ||||||||||||
Beginning Account Value 4/1/2010 | Ending Account Value 9/30/2010 | Annualized Expense Ratios | Expense Paid During Period* | |||||||||||||
California Tax Exempt Money Market Fund | ||||||||||||||||
| Actual Fund Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,000.20 | 0.22 | % | $ | 1.10 | ||||||||
| Class N | 1,000.00 | 1,000.20 | 0.23 | 1.15 | ||||||||||||
| Class S | 1,000.00 | 1,000.10 | 0.24 | 1.20 | ||||||||||||
| Hypothetical 5% Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,023.97 | 0.22 | % | $ | 1.12 | ||||||||
| Class N | 1,000.00 | 1,023.92 | 0.23 | 1.17 | ||||||||||||
| Class S | 1,000.00 | 1,023.87 | 0.24 | 1.22 | ||||||||||||
Corporate Bond Fund | ||||||||||||||||
| Actual Fund Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,042.40 | 0.75 | % | $ | 3.84 | ||||||||
| Class N | 1,000.00 | 1,041.10 | 1.00 | 5.12 | ||||||||||||
| Hypothetical 5% Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,021.31 | 0.75 | % | $ | 3.80 | ||||||||
| Class N | 1,000.00 | 1,020.05 | 1.00 | 5.06 | ||||||||||||
| * | 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). |
CNI CHARTER FUNDS | PAGE 112
Beginning Account Value 4/1/2010 | Ending Account Value 9/30/2010 | Annualized Expense Ratios | Expense Paid During Period* | |||||||||||||
Government Bond Fund | ||||||||||||||||
| Actual Fund Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,025.20 | 0.70 | % | $ | 3.55 | ||||||||
| Class N | 1,000.00 | 1,023.80 | 0.95 | 4.82 | ||||||||||||
| Hypothetical 5% Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,021.56 | 0.70 | % | $ | 3.55 | ||||||||
| Class N | 1,000.00 | 1,020.31 | 0.95 | 4.81 | ||||||||||||
California Tax-Exempt Bond Fund | ||||||||||||||||
| Actual Fund Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,039.40 | 0.50 | % | $ | 2.56 | ||||||||
| Class N | 1,000.00 | 1,038.00 | 0.75 | 3.83 | ||||||||||||
| Hypothetical 5% Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,022.56 | 0.50 | % | $ | 2.54 | ||||||||
| Class N | 1,000.00 | 1,021.31 | 0.75 | 3.80 | ||||||||||||
High Yield Bond Fund | ||||||||||||||||
| Actual Fund Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,067.70 | 1.00 | % | $ | 5.18 | ||||||||
| Class N | 1,000.00 | 1,066.10 | 1.30 | 6.73 | ||||||||||||
| Hypothetical 5% Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,020.05 | 1.00 | % | $ | 5.06 | ||||||||
| Class N | 1,000.00 | 1,018.55 | 1.30 | 6.58 | ||||||||||||
Large Cap Value Fund | ||||||||||||||||
| Actual Fund Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 972.10 | 0.97 | % | $ | 4.80 | ||||||||
| Class N | 1,000.00 | 970.80 | 1.22 | 6.03 | ||||||||||||
| Hypothetical 5% Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,020.21 | 0.97 | % | $ | 4.91 | ||||||||
| Class N | 1,000.00 | 1,018.95 | 1.22 | 6.17 | ||||||||||||
Large Cap Growth Fund | ||||||||||||||||
| Actual Fund Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 985.80 | 1.00 | % | $ | 4.98 | ||||||||
| Class N | 1,000.00 | 985.60 | 1.25 | 6.22 | ||||||||||||
| Hypothetical 5% Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,020.05 | 1.00 | % | $ | 5.06 | ||||||||
| Class N | 1,000.00 | 1,018.80 | 1.25 | 6.33 | ||||||||||||
Beginning Account Value 4/1/2010 | Ending Account Value 9/30/2010 | Annualized Expense Ratios | Expense Paid During Period* | |||||||||||||
RCB Small Cap Value Fund | ||||||||||||||||
| Actual Fund Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 982.00 | 1.21 | % | $ | 6.01 | ||||||||
| Class N | 1,000.00 | 980.20 | 1.46 | 7.25 | ||||||||||||
| Class R | 1,000.00 | 980.70 | 1.35 | 6.70 | ||||||||||||
| Hypothetical 5% Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,019.00 | 1.21 | % | $ | 6.12 | ||||||||
| Class N | 1,000.00 | 1,017.75 | 1.46 | 7.38 | ||||||||||||
| Class R | 1,000.00 | 1,018.30 | 1.35 | 6.83 | ||||||||||||
Multi-Asset Fund | ||||||||||||||||
| Actual Fund Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,030.50 | 0.85 | % | $ | 4.33 | ||||||||
| Class N | 1,000.00 | 1,028.30 | 1.10 | 5.59 | ||||||||||||
| Hypothetical 5% Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,020.81 | 0.85 | % | $ | 4.31 | ||||||||
| Class N | 1,000.00 | 1,019.55 | 1.10 | 5.57 | ||||||||||||
Limited Maturity Fixed Income Fund | ||||||||||||||||
| Actual Fund Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,021.70 | 0.70 | % | $ | 3.55 | ||||||||
| Class N | 1,000.00 | 1,021.30 | 0.96 | 4.86 | ||||||||||||
| Hypothetical 5% Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,021.56 | 0.70 | % | $ | 3.55 | ||||||||
| Class N | 1,000.00 | 1,020.26 | 0.96 | 4.86 | ||||||||||||
Full Maturity Fixed Income Fund | ||||||||||||||||
| Actual Fund Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,058.00 | 0.70 | % | $ | 3.61 | ||||||||
| Class N | 1,000.00 | 1,056.80 | 0.95 | 4.90 | ||||||||||||
| Hypothetical 5% Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,021.56 | 0.70 | % | $ | 3.55 | ||||||||
| Class N | 1,000.00 | 1,020.31 | 0.95 | 4.81 | ||||||||||||
Diversified Equity Fund | ||||||||||||||||
| Actual Fund Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 958.30 | 0.93 | % | $ | 4.57 | ||||||||
| Class N | 1,000.00 | 957.10 | 1.18 | 5.79 | ||||||||||||
| Hypothetical 5% Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,020.41 | 0.93 | % | $ | 4.71 | ||||||||
| Class N | 1,000.00 | 1,019.15 | 1.18 | 5.97 | ||||||||||||
Socially Responsible Equity Fund | ||||||||||||||||
| Actual Fund Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 988.70 | 0.95 | % | $ | 4.74 | ||||||||
| Class N | 1,000.00 | 986.30 | 1.20 | 5.98 | ||||||||||||
| Hypothetical 5% Return | ||||||||||||||||
| Institutional Class | $ | 1,000.00 | $ | 1,020.31 | 0.95 | % | $ | 4.81 | ||||||||
| Class N | 1,000.00 | 1,019.05 | 1.20 | 6.07 | ||||||||||||
| * | 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). |
CNI CHARTER FUNDS | PAGE 113
board approval of advisory and sub-advisory agreements (Unaudited) |
The Board of Trustees of CNI Charter Funds (the “Trust”) is comprised of five Trustees, four of whom are independent of the Trust’s investment advisers and sub-advisers (the “Independent Trustees”). During the six months ended September 30, 2010, the Board and the Independent Trustees approved renewal of the following agreements:
| • | the Trust’s advisory agreement (the “CNAM Management Agreement”) with City National Asset Management, Inc. (“CNAM”) with respect to the Prime Money Market Fund, California Tax Exempt Money Market Fund, Government Money Market Fund, Corporate Bond Fund, California Tax Exempt Bond Fund, Government Bond Fund, High Yield Bond Fund, Multi-Asset Fund, Large Cap Growth Equity Fund, Large Cap Value Equity Fund and RCB Small Cap Value Fund (collectively, the “CNAM Funds”); |
| • | CNAM’s sub-advisory agreement (the “Guggenheim Agreement”) with Guggenheim Investment Management, LLC (“Guggenheim”) with respect to the High Yield Bond Fund; |
| • | CNAM’s sub-advisory agreement (the “RCB Agreement”) with Reed, Conner & Birdwell, LLC (“RCB”) with respect to the RCB Small Cap Value Fund; |
| • | the Trust’s advisory agreement (the “CCMA Management Agreement”) with CCM Advisors, LLC (“CCMA”) with respect to the Limited Maturity Fixed Income Fund, Full Maturity Fixed Income Fund, Diversified Equity Fund and Socially Responsible Equity Fund (collectively, the “CCMA Funds”); |
| • | CCMA’s sub-advisory agreement (the “CNAM Sub-Advisory Agreement”) with CNAM with respect to the Limited Maturity Fixed Income Fund; |
| • | CCMA’s sub-advisory agreement (the “Baird Agreement”) with Robert W. Baird & Co. Incorporated (“Baird”) with respect to the Full Maturity Fixed Income Fund; |
| • | CCMA’s sub-advisory agreement (the “Boyd Watterson Agreement”) with Boyd Watterson Asset Management, LLC (“Boyd Watterson”) with respect to the Full Maturity Fixed Income Fund; |
| • | CCMA’s sub-advisory agreement (the “AMBS Agreement”) with AMBS Investment Counsel LLC (“AMBS”) with respect to the Diversified Equity Fund; |
| • | CCMA’s sub-advisory agreements (the “SKBA Agreements”) with SKBA Capital Management, LLC (“SKBA”) with respect to the Socially Responsible Equity Fund and the Diversified Equity Fund; and |
| • | CCMA’s sub-advisory agreement (the “Turner Agreement”) with Turner Investment Partners, Inc. (“Turner”) with respect to the Diversified Equity Fund. |
In addition, the Board approved an interim sub-advisory agreement (the “Interim Agreement”) between CCMA and CNAM with respect to the Diversified Equity Fund.
The Guggenheim Agreement, RCB Agreement, CNAM Sub-Advisory Agreement, Baird Agreement, Boyd Watterson Agreement, AMBS Agreement, SKBA Agreements and Turner Agreement are collectively referred to below as the “Sub-Advisory Agreements” and the CNAM Management Agreement, CCMA Management Agreement, Sub-Advisory Agreements and Interim Agreement are collectively referred to below as the “Agreements.” CNAM, Baird, Boyd Watterson, AMBS, SKBA and Turner are collectively referred to below as the “CCMA Sub-Advisers.”
| General Information |
The following information summarizes the Board’s considerations associated with its review of the Agreements. In connection with their deliberations, the Board considered such information and factors as they believed, in light of the legal advice furnished to them and their own business judgment, to be relevant. The Agreements were considered separately for each investment portfolio of the Trust (each a “Fund”), although the Board took into account the common interests of the Funds in its review. As described below, the Board considered the nature, quality and extent of the various investment advisory and administrative services performed by each investment adviser and sub-adviser. In considering these matters, the Independent Trustees discussed the approval of the Agreements with management and in private sessions with counsel at which no representatives of the investment advisers or sub-advisers were present.
The Board reviewed extensive materials regarding investment results of each investment adviser and sub-adviser, advisory fee and expense comparisons, financial information with respect to each entity, descriptions of various functions such as compliance monitoring and portfolio trading practices, and information about the personnel providing investment management and administrative services to the Funds. They also took into account information they received at past meetings of the Board and its committees with respect to these matters.
In deciding to approve the Agreements, the Board and the Independent Trustees did not identify a single factor as controlling and this summary does not describe all of the matters considered. However, the Board and the Independent Trustees concluded that each of the various factors referred to below favored such approval.
CNI CHARTER FUNDS | PAGE 114
CNAM
| Nature, Extent and Quality of Services |
In reviewing the services provided by CNAM, the Board considered a variety of matters, including the background, education and experience of its key portfolio management and operational personnel; its overall financial strength and stability; its resources and efforts to retain, attract and motivate capable personnel to serve the CNAM Funds; and the overall general quality and depth of its organization. The Board also took into account the experience, capability and integrity of CNAM’s senior management; its investment philosophy and processes, including sub-adviser oversight processes; its brokerage, trading and soft dollar practices; its disaster recovery and contingency planning; and its commitment and systems in place with regard to compliance with applicable laws and regulations.
| Investment Performance |
The Board assessed the performance of each CNAM Fund compared with its respective benchmark and the average of all funds in its respective peer group category (each, a “universe”) selected by Lipper, Inc. and iMoneyNet, Inc. (for the money market funds only) for the nine-month, one-, three- and five-year and since inception periods ended June 30, 2010, as applicable. The Board also reviewed the performance of each CNAM Fund compared with the average performance of all funds in its respective “bank channel” universe, which includes only those funds in the CNAM Fund’s Lipper universe that are distributed through institutional and retail bank channels. In addition, the Board reviewed the performance of each CNAM Fund compared to a select group of comparable funds determined by CNAM to have investment objectives similar to that of the CNAM Fund. The Board made the following observations in reviewing the CNAM Funds’ performance:
| • | The annualized total returns of the Institutional Class of the Prime Money Market Fund and California Tax Exempt Money Market Fund were above or the same as the average returns of the relevant Lipper institutional money market fund universes, iMoneyNet institutional fund universes, and bank channel universes for the nine-month and one-year periods, and below those measures for all other periods. |
| • | The annualized total returns of the Institutional Class of the Government Money Market Fund were above or the same as the average returns of the relevant Lipper institutional money market fund universe, iMoneyNet institutional fund universe, and bank channel universe for the nine-month and one-year periods, below the average returns of the Lipper universe and bank channel universe for all other periods, and near or above the average returns of the iMoneyNet institutional fund universe for the three-year and five-year periods. |
| • | The annualized total returns of the Institutional Class of the Corporate Bond Fund were above the average returns of the Lipper short/intermediate investment-grade universe, the bank channel universe and the Barclays Capital Intermediate US Corporate Index returns for all periods, except for the Index returns for the since inception period, the Lipper universe and bank channel universe for the one-year period, and all of those measures for the nine-month period. |
| • | The annualized total returns of the Institutional Class of the California Tax Exempt Bond Fund were above the average returns of the Lipper California short/intermediate municipal debt universe for the nine-month and three- and five-year periods, above the average returns of the bank channel universe for all periods other than the nine-month period, and below the Barclays Capital CA Intermediate-Short Municipal Index returns for all periods. |
| • | The annualized total returns of the Institutional Class of the Government Bond Fund were above the average returns of the bank channel universe for the since inception period, below the average returns of the bank channel universe for all other periods, and below the average returns of the Lipper short/intermediate US government universe and the Barclays Capital US Government Bond Index for all periods. |
| • | The annualized total returns of the Institutional Class of the High Yield Bond Fund were above the average returns of the Lipper high current yield fund universe for all periods, above the returns of the Citigroup High-Yield Market Index returns for all periods other than the three-year and five-year periods, and below the average returns of the bank channel universe for all periods except for the nine-month and one-year periods. |
| • | The annualized total returns of the Institutional Class of the Multi-Asset Fund were above the average returns of the Lipper flexible portfolio funds universe and the bank channel universe and the returns of a blended index comprised 60% of the S&P 500 Index and 40% of the Barclays Capital Intermediate Government/Credit Index (the “Blended Index”) for the since inception period, above the returns of the CPI plus 500 basis points benchmark for the one-year period, above the average returns of the bank channel universe for the nine-month period and below all of those measures and the Barclays Capital US Treasury Inflation Protected Securities Index for all other periods. |
CNI CHARTER FUNDS | PAGE 115
board approval of advisory and sub-advisory agreements (Unaudited) (Continued) |
| • | The annualized total returns of the Institutional Class of the Large Cap Growth Equity Fund were above the average returns of the Lipper large cap growth fund universe and the bank channel universe for the three-year, five-year and since inception periods, above or slightly below the returns of the S&P 500/Citigroup Growth Index returns for those periods, and below all of those measures for the nine-month and one-year periods. |
| • | The annualized total returns of the Institutional Class of the Large Cap Value Equity Fund were slightly above the average returns of the Lipper large cap value funds universe and bank channel returns and S&P 500/Citigroup Value Index returns for the three- and five-year periods, above the average returns of the Lipper large cap value funds universe and bank channel universe for the nine-month period, and below all of those measures for the one-year and since inception periods. |
| • | The annualized total returns of the Institutional Class of the RCB Small Cap Value Fund were above the average returns of the Lipper small cap core funds universe, bank channel universe and Russell 2000 Index for the nine-month, one-year and since inception periods, but were below all those measures for the three-year and five-year periods. |
The Board concluded that CNAM continued to provide satisfactory management and oversight services to the CNAM Funds. They noted that the investment results of the CNAM Funds over the long term were generally competitive; that the results for the Money Market Funds compared to their peer groups were acceptable given the special services and investment focuses of those Funds; and that consideration of returns of market indexes needed to take into account that indexes do not reflect the expenses of operating mutual funds.
| Advisory Fees and Fund Expenses |
The Board reviewed information regarding the advisory fees charged by CNAM and the total expenses of the Institutional Class of each CNAM Fund (as percentages of their respective average annual net assets) compared to those of the funds included in the relevant Lipper and bank channel universes, and concluded that the advisory fees and expenses of the CNAM Funds continued to be reasonable.
The Board observed that the actual investment advisory fees (net of fee waivers) paid by the CNAM Funds generally were at or above the relevant Lipper and bank channel averages (except for the Money Market Funds, which were generally below those averages), but were within or below the middle 60% range for the relevant Lipper universes (except for the High Yield Bond Fund). In considering the information about advisory fees, the Board noted the relatively small sizes of the CNAM Funds compared to the average sizes of the funds in the relevant Lipper and bank channel universes. The Board considered that other than the Trust CNAM has only one investment advisory client, which is a cash management account. The Board noted that although the advisory fees paid by the cash management account to CNAM are lower than the fees paid by the Trust̵ 7;s Money Market Funds to CNAM, the Money Market Funds are required to comply with Rule 2a-7 and other regulations and restrictions under the 1940 Act, and that such compliance requires significantly more work and resources than management of separate accounts.
The Board considered that the total expense ratios of the Money Market Funds (net of fee waivers) were below the relevant Lipper universe and bank channel averages and were in the lowest 20% of the relevant Lipper universes, and that the total expense ratios for all other CNAM Funds (net of fee waivers) were below the relevant Lipper universe averages and above the bank channel averages (except for the expense ratios of the California Tax Exempt Bond Fund, the Large Cap Growth Equity Fund and the Large Cap Value Equity Fund, which were below both measures), but were all within the middle 60% range for the relevant Lipper universes.
The Board considered information prepared by CNAM relating to its costs and profits with respect to the CNAM Funds. The Board also considered the benefits received by CNAM and its affiliates as a result of CNAM’s relationship with the CNAM Funds, including investment advisory fees paid to CNAM, fees paid to City National Bank and City National Securities, Inc. for providing certain shareholder servicing and sub-distribution services to the Trust, and the intangible benefits of any favorable publicity arising in connection with the CNAM Funds’ performance. They also noted that although there were no advisory fee breakpoints, based on CNAM’s operations significant economies of scale were not likely to be realized until the asset levels of most of the CNAM Funds were significantly higher than their current levels.
| Conclusions |
Based on their review, including their consideration of each of the factors referred to above, the Board and the Independent Trustees concluded that the compensation payable to CNAM pursuant to the CNAM Management Agreement is fair and reasonable in light of the nature and quality of the services being provided by CNAM to the respective CNAM Funds and their shareholders, and that renewal of the CNAM Management Agreement was in the best interest of the CNAM Funds and their shareholders.
CNI CHARTER FUNDS | PAGE 116
GUGGENHEIM
| Nature, Extent and Quality of Services |
In reviewing the services provided by Guggenheim to the High Yield Bond Fund, the Board considered a variety of matters, including the background, education and experience of Guggenheim’s key portfolio management and operational personnel; its overall financial strength and stability; its resources and related efforts to retain, attract and motivate capable personnel to serve the High Yield Bond Fund; and the overall general quality and depth of its organization. The Board also reviewed Guggenheim’s investment philosophy and processes as well as its brokerage and trading practices, its disaster recovery and contingency planning, and its commitment and systems in place with regard to compliance with applicable laws and regulations.
| Investment Performance |
The Board’s observations regarding the High Yield Bond Fund’s performance are described above.
| Advisory Fees and Fund Expenses |
The Board reviewed information regarding the advisory fees charged by Guggenheim and observed that at the High Yield Bond Fund’s current asset level Guggenheim’s advisory fee with respect to the Fund was slightly lower than its general fee guidelines for accounts managed in the high yield style. The Board also observed that Guggenheim’s advisory fee with respect to the Fund was higher than its fees with respect to other mutual funds for which it serves as sub-adviser, but noted that each of those other funds was significantly larger than the High Yield Bond Fund. They also noted that CNAM pays Guggenheim’s sub-advisory fees out of CNAM’s advisory fee.
The Board considered information prepared by Guggenheim relating to its costs and profits with respect to the High Yield Bond Fund, as well as the methodologies used to determine and allocate such costs to its management of the Fund. The Board also considered the benefits received by Guggenheim as a result of Guggenheim’s relationship with the High Yield Bond Fund, including fees paid to Guggenheim as the Fund’s sub-adviser and the intangible benefits of any favorable publicity arising in connection with the Fund’s performance.
| Conclusions |
Based on their review, including their consideration of each of the factors referred to above, the Board and the Independent Trustees concluded that the compensation payable to Guggenheim pursuant to the Guggenheim Agreement is fair and reasonable in light of the nature and quality of the services being provided by Guggenheim to the High Yield Bond Fund and its shareholders, and that renewal of the Guggenheim Agreement was in the best interest of the Fund and its shareholders.
RCB
| Nature, Extent and Quality of Services |
In reviewing the services provided by RCB to the RCB Small Cap Value Fund, the Board considered a variety of matters, including the background, education and experience of RCB’s key portfolio management and operational personnel; its overall financial strength and stability; its resources and related efforts to retain, attract and motivate capable personnel to serve the RCB Small Cap Value Fund; and the overall general quality and depth of its organization. The Board also reviewed RCB’s investment philosophy and processes as well as its brokerage and trading practices, its disaster recovery and contingency planning, and its commitment and systems in place with regard to compliance with applicable laws and regulations.
| Investment Performance |
The Board’s observations regarding the RCB Small Cap Value Fund’s performance are described above.
| Advisory Fees and Fund Expenses |
The Board reviewed information regarding the advisory fees charged by RCB and observed that at the RCB Small Cap Value Fund’s current asset size the fees charged by RCB were lower than the fees it charged to other institutional clients. They noted that CNAM pays RCB’s sub-advisory fees out of CNAM’s advisory fee. Although RCB’s fee schedule has no breakpoints, they also noted that the asset levels of the Fund were not so substantial that they would lead to significant economies of scale.
The Board considered information prepared by RCB relating to its costs and profits with respect to the RCB Small Cap Value Fund, as well as the methodologies used to determine and allocate such costs to its management of the Fund. The Board also considered the benefits received by RCB and its affiliates as a result of RCB’s relationship with the Fund, including the sub-advisory fees paid to RCB, fees paid to CNAM as the Fund’s adviser, fees paid to City National Bank and City National Securities, Inc. for providing certain shareholder servicing and sub-distribution services to the Trust, and the intangible benefits of any favorable publicity arising in connection with the Fund’s performance.
| Conclusions |
Based on their review, including their consideration of each of the factors referred to above, the Board and the Independent Trustees concluded that the compensation payable to RCB pursuant to the RCB Agreement is fair and reasonable in light of the nature and quality of the services being provided by RCB to the RCB Small Cap Value Fund and its shareholders, and that renewal of the RCB Agreement was in the best interest of the Fund and its shareholders.
CNI CHARTER FUNDS | PAGE 117
board approval of advisory and sub-advisory agreements (Unaudited) (Continued) |
CCMA
| Nature, Extent and Quality of Services |
In reviewing the services provided by CCMA, the Board considered a variety of matters, including the background, education and experience of CCMA’s key portfolio management and operational personnel; its overall financial strength and stability; its resources and efforts to retain, attract and motivate capable personnel to serve the CCMA Funds; and the overall general quality and depth of its organization. The Board also took into account the experience, capability and integrity of its senior management; its investment philosophy and processes and oversight of the CCMA Sub-Advisers; its disaster recovery and contingency planning; and its commitment and systems in place with regard to compliance with applicable laws and regulations.
| Investment Performance |
The Board assessed the performance of the Institutional Class of each CCMA Fund compared with its respective benchmark(s) and the average of all funds in its respective peer group category (each, a “universe”) selected by Lipper, Inc. for the nine-month, one-, three-, five- and ten-year and since inception periods ended June 30, 2010, as applicable. The Board made the following observations in reviewing the CCMA Funds’ performance:
| • | The annualized total returns of the Institutional Class of the Limited Maturity Fixed Income Fund were above the Merrill Lynch 3 Month Treasury Bill Index returns for all periods and above the Merrill Lynch 1-3 Year US Treasuries Index returns for all periods except the ten-year and since inception periods, but below the average returns of the Lipper short/intermediate investment grade debt funds universe for all periods. |
| • | The annualized total returns of the Institutional Class of the Full Maturity Fixed Income Fund were above the average returns of the Lipper corporate A-rated debt funds universe for all periods except the nine-month, one-year and since inception periods, above the returns of the Barclays Capital US Aggregate Bond Index and Barclays Capital Intermediate US Government/Credit Index returns for the nine-month and one-year periods, and below the returns of the Barclays Capital Indices for all other periods. |
| • | The annualized total returns of the Institutional Class of the Diversified Equity Fund were above the returns of the S&P 500 Index for the ten-year period, above the average returns of the Lipper multi-cap core funds universe for the since inception period, and below those measures for all other periods. |
| • | The annualized total returns of the Institutional Class of the Socially Responsible Equity Fund were above the average returns of the Lipper multi-cap value fund universe for all periods, above the average returns of the MSCI KLD 400 Social Index returns for the nine-month and one-year periods and below the average returns of the MSCI KLD Index returns for the three- and five-year and since inception periods. |
The Board and the Independent Trustees concluded that CCMA continued to provide satisfactory management and oversight services to the CCMA Funds. They noted that the investment results of the CCMA Funds were generally competitive; that each of the CCMA Funds had met its objectives as demonstrated by various factors; and that consideration of returns of market indexes needed to take into account that indexes do not reflect the expenses of operating mutual funds.
| Advisory Fees and Fund Expenses |
The Board reviewed information regarding the management fees charged by CCMA and the total expenses of the Institutional Class of each CCMA Fund (as percentages of their respective average annual net assets) compared to those of a select peer group of funds and of the funds included in the relevant Lipper universe, and the Board concluded that the advisory fees and expenses of the CCMA Funds continued to be reasonable.
The Board observed that the CCMA Funds’ management fees as of June 30, 2010, were above the relevant Lipper averages, but (except for the Limited Maturity Fixed Income and Full Maturity Fixed Income Funds, which were in the top 20%) were within the middle 60% range for the relevant Lipper universes. As the Trust is CCMA’s sole investment advisory client, the Board was not able to compare the fees charged to the CCMA Funds by CCMA with fees charged to other institutional clients of CCMA.
The Board considered that total expenses of the CCMA Funds as of June 30, 2010, were below the average fees of funds in the relevant Lipper universes. The Board noted that the asset levels of the CCMA Funds were relatively small.
The Board considered information prepared by CCMA relating to its costs and profits. The Board also considered the benefits received by CCMA and its affiliates as a result of CCMA’s relationship with the CCMA Funds, including investment advisory fees received by CCMA, fees paid to City National Bank and City National Securities, Inc. for providing certain shareholder servicing and sub-distribution services to the Trust, and the intangible benefits of any favorable publicity arising in connection with the CCMA Funds’ performance. In addition,
CNI CHARTER FUNDS | PAGE 118
the Board noted that although there were no advisory fee breakpoints, the asset levels of most of the CCMA Funds were relatively small and were not currently likely to lead to significant economies of scale.
| Conclusions |
Based on their review, including their consideration of each of the factors referred to above, the Board and the Independent Trustees concluded that the compensation payable to CCMA pursuant to the Management Agreement is fair and reasonable in light of the nature and quality of the services being provided by CCMA to each CCMA Fund and its shareholders, and that renewal of the Management Agreement was in the best interest of the CCMA Funds and their shareholders.
CCMA SUB-ADVISERS
| Nature, Extent and Quality of Services |
In reviewing the services provided by each of the CCMA Sub-Advisers, the Board considered a variety of matters, including the background, education and experience of the CCMA Sub-Adviser’s key portfolio management and operational personnel; its overall financial strength and stability; its resources and related efforts to retain, attract and motivate capable personnel to serve the CCMA Funds; and the overall general quality and depth of its organization. The Board also reviewed each CCMA Sub-Adviser’s investment philosophy and processes as well as its brokerage and trading practices, its disaster recovery and contingency planning, and its commitment and systems in place with regard to compliance with applicable laws and regulations.
| Investment Performance |
The Board’s observations regarding each CCMA Fund’s performance are described above. In addition, the Board assessed the performance of each CCMA Sub-Adviser’s portion of the CCMA Fund or Funds it managed compared with its respective benchmark for the last quarter, six-month, one-, two-, three-, five-, seven- and ten-year periods ended June 30, 2010, as applicable. The Board made the following additional observations in reviewing each CCMA Sub-Adviser’s performance:
| • | The annualized total returns for CNAM’s portion of the Limited Maturity Fixed Income Fund were above the returns of the Barclays Capital 1-5 Year Government/Credit Index for the two- and three-year periods. |
| • | The annualized total returns for Baird’s portions of the Full Maturity Fixed Income Fund were above the returns of the Barclays Capital US Aggregate Bond Index for the last quarter and six-month and one-year periods, and were below but close to the returns of the Index for the two-, seven- and ten-year periods. |
| • | The annualized total returns for Boyd Watterson’s portions of the Full Maturity Fixed Income Fund were above the returns of the Barclays Capital Intermediate Government/Credit Index for the six-month and one-, two- and three-year periods. |
| • | The annualized total returns for AMBS’ portion of the Diversified Equity Fund were above the returns of the S&P 500 Index for the two- and three-year periods. |
| • | The annualized total returns for SKBA’s portion of the Diversified Equity Fund were above the returns of the Russell 1000 Value Index for the six-month and one-, two- and three-year periods. The annualized total returns for the Socially Responsible Equity Fund, which is sub-advised solely by SKBA, were above the returns of the MSCI KLD 400 Social Index for the last quarter and six-month and one-year periods, but below the returns of the Index for the two- and three-year periods. |
| • | The annualized total returns for Turner’s portion of the Diversified Equity Fund were below the returns of the Russell 1000 Growth Index for all periods. In considering this information, the Board noted that Turner began serving as a sub-adviser to the Diversified Equity Fund in March 2008, at a time when the growth style was not in favor, but that CCMA had assessed Turner as the Fund’s best performing sub-adviser in 2009. |
As indicated above, the Board concluded that each CCMA Sub-Adviser continued to provide satisfactory services to the CCMA Funds.
| Advisory Fees and Fund Expenses |
The Board reviewed information regarding the advisory fees charged by each CCMA Sub-Adviser and observed that the fees charged by each CCMA Sub-Adviser were generally low compared to the fees it charged to its other institutional clients. They noted that CCMA pays all sub-advisory fees out of CCMA’s advisory fee.
The Board considered information prepared by each CCMA Sub-Adviser relating to its revenues and profits with respect to the CCMA Fund or Funds for which it serves as sub-adviser. The Board also considered the benefits received by each CCMA Sub-Adviser and its affiliates as a result of its relationship with the CCMA Funds, including the sub-advisory fees paid to the CCMA Sub-Adviser, the intangible benefits of their association
CNI CHARTER FUNDS | PAGE 119
board approval of advisory and sub-advisory agreements (Unaudited) (Continued) |
with the CCMA Funds generally and any favorable publicity arising in connection with the CCMA Funds’ performance, and in the case of CNAM, AMBS and SKBA, fees paid to City National Bank and City National Securities, Inc. for providing certain shareholder servicing and sub-distribution services to the Trust.
| Conclusions |
Based on their review, including their consideration of each of the factors referred to above, the Board concluded that the compensation payable to each CCMA Sub-Adviser pursuant to its respective Sub-Advisory Agreement is fair and reasonable in light of the nature and quality of the services being provided by each CCMA Sub-Adviser to the respective CCMA Funds and their shareholders, and that renewal of each Sub-Advisory Agreement was in the best interest of the CCMA Funds and their shareholders.
CNAM INTERIM SUB-ADVISORY AGREEMENT
In May 2010, after Freeman Investment Management Co., LLC (“Freeman”), a sub-adviser to the Diversified Equity Fund, informed CCMA that Freeman was closing its business, upon CCMA’s recommendation, the Board approved CNAM as sub-adviser to the Fund on a temporary, interim basis, until CCMA completed its search process for a permanent sub-adviser to replace Freeman.
| Nature, Extent and Quality of Services |
In reviewing the services to be provided by CNAM to the Diversified Equity Fund, the Board considered among other things its familiarity with CNAM’s investment process, brokerage and trading practices, and compliance program, and the CNAM investment personnel who would be managing its portion of the Fund.
| Investment Performance |
The Board reviewed the composite performance for the core equity product of City National Asset Management, a department of CNB, noting that the same personnel who manage City National Asset Management’s core equity product would be managing CNAM’s portion of the Fund. The Board observed that from 2000 through 2009, City National Asset Management’s composite performance had outperformed the returns of both the S&P 500 Index and the Dow Jones Index for six calendar years, and outperformed the S&P Index, but underperformed relative to the Dow Jones Index for an additional three years. The Board concluded that CNAM would provide satisfactory services to the Fund.
| Advisory Fees and Fund Expenses |
The Board considered City National Asset Management’s investment management fee schedule for its core equity product and noted that those fees were significantly higher than the fees that CNAM would receive for managing its portion of the Fund. The Board noted that the fees CNAM would be receiving from CCMA to manage CNAM’s portion of the Fund were the same as the fees received by Freeman under its sub-advisory agreement, and that the terms of their sub-advisory agreements were substantially the same, except that the Interim Agreement could be terminated by the Board with seven days’ written notice.
The Board noted its familiarity with CNAM’s profitability with respect to the other series of the Trust. The Board also considered the benefits currently received by CNAM and its affiliates as a result of its current relationship with all of the series of the Trust, including the receipt of advisory and sub-advisory fees, the intangible benefits of its association with the Trust generally and any favorable publicity arising in connection with the Funds’ performance, and fees paid to City National Bank and City National Securities, Inc. for providing certain shareholder servicing and sub-distribution services to the Trust.
| Conclusions |
Based on their review, including their consideration of each of the factors referred to above, the Board concluded that the terms of the Interim Agreement are fair and reasonable, and that approval of the Interim Agreement is in the best interests of the Fund and its shareholders.
| Termination of Interim Agreement |
In August 2010, CCMA recommended to the Board that a long-term substitute for Freeman not be appointed, and that the assets of the Diversified Equity Fund being managed by CNAM under the Interim Agreement be allocated among AMBS, SKBA and Turner for management. Upon CCMA’s recommendation, the Board authorized CCMA to terminate the Interim Agreement, which termination occurred effective September 7, 2010.
CNI CHARTER FUNDS | PAGE 120
THANK YOU for your investment with CNI Charter Funds. We value the trust you have placed in us to help you achieve your financial goals. |
For more information on CNI Charter Funds, including charges
and expenses, please call 1-888-889-0799 or go to cnicharterfunds.com
for a free prospectus. Read it carefully before you invest or send money.
CNI-AR-001-0900
| 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. |
(a)(1) The registrant’s board of trustees has determined that the registrant has at least one audit committee financial expert serving on the audit committee.
(a)(2) The audit committee financial experts are William R. Sweet and James R. Wolford. Messrs. Sweet and Wolford are independent as defined in Form N-CSR Item 3(a)(2).
| Item 4. | Principal Accountant Fees and Services. |
Fees billed by KPMG LLP Related to the Trust
KPMG LLP 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) | $300,000 | N/A | N/A | $316,000 | N/A | N/A |
| (b) | Audit-Related Fees | N/A | N/A | N/A | N/A | N/A | N/A |
| (c) | Tax Fees | $67,125 | N/A | N/A | $66,980 | N/A | N/A |
| (d) | All Other Fees | N/A | N/A | N/A | N/A | N/A | N/A |
Notes:
| (1) | Audit fees include amounts 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. |
| (e)(1) | Not Applicable |
| (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 | N/A | N/A |
| Tax Fees | N/A | N/A |
| All Other Fees | N/A | N/A |
| (f) | Not Applicable |
| (g) | The aggregate non-audit fees and services billed by KPMG LLP for the last two fiscal years were $67,125 and $66,980 for 2010 and 2009, respectively. |
| (h) | Not Applicable |
| Item 5. | Audit Committee of Listed Registrants. |
Not applicable to open-end management investment companies.
| Item 6. | Schedule of Investments |
Not applicable.
| 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. Effective for closed-end management investment companies for fiscal years ending on or after December 31, 2005
| Item 9. | Purchases of Equity Securities by Closed-End Management Company and Affiliated Purchasers. |
Not applicable to open-end management investment companies.
| Item 10. | Submission of Matters to a Vote of Security Holders. |
CNI Charter Funds (the "Fund") has adopted the following procedures by which shareholders may recommend nominees to the Fund's Board of Trustees. The Fund has a Nominating Committee comprised solely of persons who are not considered "interested persons" of the Fund within the meaning of the Investment Company Act of 1940. The Committee periodically reviews such issues as the Board's composition, responsibilities, committees, compensation and other relevant issues, and recommends any
appropriate changes to the full Board of Trustees. While the Committee normally is able to identify from its own resources an ample number of qualified candidates, it will consider shareholder suggestions of persons to be considered as nominees to fill future vacancies on the Board, so long as the shareholder or shareholder group submitting a proposed nominee: (a) beneficially owns more than 5% of the Fund's voting shares and has held such shares continuously for two years, and (b) is not an adverse holder. No eligible shareholder or shareholder group may submit more than one independent Board member nominee each year. Such suggestions must be sent in writing to the Fund 's Secretary, and must be accompanied by the shareholder's contact information, the nominee's contact information and number of Fund shares owned by the n ominee, all information regarding the nominee that would be required to be disclosed in solicitations of proxies for elections of directors required under the Securities Exchange Act of 1934, and a notarized letter from the nominee stating his or her intention to serve as a nominee and be named in the Fund's proxy statement, if so designated by the Committee and the Board of Trustees.
| Item 11. | Controls and Procedures. |
(a) The certifying officers, whose certifications are included herewith, have evaluated the registrant’s disclosure controls and procedures within 90 days of the filing date of this report. In their opinion, based on their evaluation, the registrant’s disclosure controls and procedures are adequately designed, and are operating effectively to ensure, that information required to be disclosed by the registrant in the reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.
(b) There were no significant changes in the registrant’s internal control over financial reporting that occurred during the registrant’s last fiscal half-year that has materially affected, or is 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) | CNI Charter Funds | ||
| By (Signature and Title) | /s/:Rich Gershen | ||
| Rich Gershen, President & CEO | |||
| Date: | December 6, 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/:Rich Gershen | ||
| Rich Gershen, President & CEO | |||
| Date: | December 6, 2010 | ||
| By (Signature and Title) | /s/:Eric Kleinschmidt | ||
| Eric Kleinschmidt, Controller and COO | |||
| Date: | December 6, 2010 | ||