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 811-04088
Excelsior Funds, Inc.
(Exact name of registrant as specified in charter)
One Financial Center, Boston, Massachusetts 02111
(Address of principal executive offices) (Zip code)
James R. Bordewick, Jr., Esq.
Columbia Management Advisors, LLC
One Financial Center
Boston, MA 02111
(Name and address of agent for service)
Registrant’s telephone number, including area code: 1-617-426-3750
Date of fiscal year end: March 31, 2008
Date of reporting period: September 30, 2007
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
| Item 1. | Reports to Stockholders. |
EQUITY FUNDS
SEMI ANNUAL REPORT
September 30, 2007
| | |
| NOT FDIC INSURED | | May Lose Value |
| NOT BANK ISSUED | | No Bank Guarantee |
TABLE OF CONTENTS
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for an Excelsior Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular Excelsior Fund. References to specific securities should not be construed as a recommendation or investment advice.
Investment in equity securities are subject to sudden and unpredictable drops in value and periods of lackluster performance.
Funds which concentrate their investments in one economic sector or geographical region may expose an investor to greater volatility. When used as part of a broader investment portfolio, these funds may serve to reduce overall portfolio volatility. Currency fluctuations, differences in security regulation, financial accounting standards, and foreign taxation regulations are among the risks associated with foreign investing, as well as political risk. Investing in emerging markets may accentuate these risks.
Small-cap stocks may be less liquid and subject to greater price volatility.
Value-based investments are subject to the risk that the broad market may not recognize their intrinsic value.
1
LETTER TO SHAREHOLDERS
Dear Shareholder:
Allow me to take this opportunity to formally welcome you to the Columbia Funds family. In July, U.S. Trust Advisors was acquired by Bank of America (parent company of Columbia Management Group). The Excelsior Funds are now distributed by Columbia Management Distributors, Inc. The combined organization is committed to delivering unparalleled wealth management solutions and building deep, lasting relationships with our shareholders.
Your Excelsior Funds account will be serviced by Columbia Management Services, Inc., an experienced service provider in the industry. This team will process transactions, generate account statements and support your ongoing servicing needs.
As we complete the integration over the next several months, you will gain access to a broad array of investment choices including money market investments, mutual funds and 529 plans. Throughout this period of change, our goal is to ensure a smooth transition and provide services that we hope will exceed your expectations. We recommend you visit our website: www.columbiafunds.com for more information about our products and services. Those of you who receive your statements directly from Columbia Management can also register for on-line account access, which allows you to check your account balance, change your distribution options and make other account transactions. If you receive statements from your brokerage firm, please check with your financial advisor for service availability.
There’s a lot to know about Columbia Management
With $709.9 billion under management and a history that dates to the early 1900s, Columbia Management and its affiliates make up one of the nation’s largest and most experienced asset management companies.1 We offer a comprehensive array of investment solutions, including equity, fixed-income and cash strategies. Our diverse investment solutions and our focus on the needs of our clients make Columbia Management the advisor of choice for individual, institutional and high-net-worth investors.
Welcome to Columbia Management. Thank you for your business — we’re pleased to have you as a customer.
Sincerely,
Christopher L. Wilson
President, Excelsior Funds
2
About Christopher L. Wilson
Chris Wilson is head of mutual funds for Columbia Management, responsible for the day-to-day delivery of mutual fund products and services to the firm’s investors. With the exception of distribution, Mr. Wilson oversees all aspects of the mutual fund services operation including treasury, investment accounting, product development and shareholder and broker services. Mr. Wilson serves as Columbia Management’s chief liaison to the mutual fund boards of trustees. He joined Columbia Management in 2004 and has been a member of the investment community since 1980.
Columbia Management Group, LLC (“Columbia Management”) is the investment management arm of Bank of America Corporation. Columbia Management entities furnish investment management services and products for institutional and individual investors. Excelsior Funds are distributed by Columbia Management Distributors, Inc., member FINRA and SIPC. Columbia Management Distributors, Inc. is part of Columbia Management and an affiliate of Bank of America Corporation.
1 | Columbia Management and its affiliates comprise the wealth and investment management division of Bank of America Corporation. As of September 30, 2007, Columbia Management and its affiliates managed assets of $709.9 billion. Columbia Management and its affiliates’ managed assets consist of assets under the discretionary management of the registered investment advisors, Columbia Management Advisors, LLC ($377.9 billion), Columbia Wanger Asset Management, L.P. ($38.5 billion) and Marsico Capital Management, LLC ($103.4 billion); U.S. Trust, Bank of America Private Wealth Management; Banc of America Investment Services, Inc.; Banc of America Investment Advisors, Inc.; Bank of America Capital Advisors, LLC; Premier Banking & Investments, and United States Trust, National Association, including its subsidiary, UST Advisers, Inc. ($116.5 billion). |
3
Understanding Your Expenses — Blended Equity Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | |
Shares | | 1,000.00 | | 1,000.00 | | 1,103.50 | | 1,019.50 | | 5.78 | | 5.55 | | 1.10 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
4
Understanding Your Expenses — Energy and Natural Resources Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for your share class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses by share class
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | |
Shares | | 1,000.00 | | 1,000.00 | | 1,183.70 | | 1,019.60 | | 5.90 | | | 5.45 | | 1.08 |
Class A | | 1,000.00 | | 1,000.00 | | 996.70 | | 1,017.55 | | 0.12 | * | | 7.52 | | 1.49 |
Class C | | 1,000.00 | | 1,000.00 | | 996.70 | | 1,013.80 | | 0.18 | * | | 11.28 | | 2.24 |
| * | For the period September 28, 2007 through September 30, 2007. These fund classes commenced public offering of shares on October 1, 2007. |
Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
5
Understanding Your Expenses — Equity Income Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | |
Shares | | 1,000.00 | | 1,000.00 | | 1,063.30 | | 1,019.50 | | 5.67 | | 5.55 | | 1.10 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
6
Understanding Your Expenses — Equity Opportunities Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for your share class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses by share class
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | | |
Shares | | 1,000.00 | | 1,000.00 | | 1,121.60 | | 1,019.75 | | 5.57 | | | 5.30 | | 1.05 |
Class A | | 1,000.00 | | 1,000.00 | | 1,001.30 | | 1,019.20 | | 0.10 | * | | 5.86 | | 1.16 |
Class C | | 1,000.00 | | 1,000.00 | | 1,001.30 | | 1,015.45 | | 0.16 | * | | 9.62 | | 1.91 |
| * | For the period September 28, 2007 through September 30, 2007. These fund classes commenced public offering of shares on October 1, 2007. |
Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
7
Understanding Your Expenses — Large Cap Growth Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for your share class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses by share class
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | | |
Shares | | 1,000.00 | | 1,000.00 | | 1,146.20 | | 1,019.05 | | 6.38 | | | 6.01 | | 1.19 |
Class A | | 1,000.00 | | 1,000.00 | | 997.50 | | 1,017.90 | | 0.12 | * | | 7.16 | | 1.42 |
Class C | | 1,000.00 | | 1,000.00 | | 997.50 | | 1,014.15 | | 0.18 | * | | 10.93 | | 2.17 |
| * | For the period September 28, 2007 through September 30, 2007. These fund classes commenced public offering of shares on October 1, 2007. |
Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
8
Understanding Your Expenses — Mid Cap Value and Restructuring Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | |
Shares | | 1,000.00 | | 1,000.00 | | 1,077.70 | | 1,019.40 | | 5.82 | | 5.65 | | 1.12 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
9
Understanding Your Expenses — Real Estate Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | |
Shares | | 1,000.00 | | 1,000.00 | | 917.50 | | 1,018.75 | | 5.99 | | 6.31 | | 1.25 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
10
Understanding Your Expenses — Small Cap Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for your share class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses by share class
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | | |
Shares | | 1,000.00 | | 1,000.00 | | 1,089.00 | | 1,018.95 | | 6.32 | | | 6.11 | | 1.21 |
Class A | | 1,000.00 | | 1,000.00 | | 991.50 | | 1,018.20 | | 0.11 | * | | 6.86 | | 1.36 |
Class C | | 1,000.00 | | 1,000.00 | | 991.50 | | 1,014.45 | | 0.17 | * | | 10.63 | | 2.11 |
| * | For the period September 28, 2007 through September 30, 2007. These fund classes commenced public offering of shares on October 1, 2007. |
Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
11
Understanding Your Expenses — Value and Restructuring Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for your share class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses by share class
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | | |
Shares | | 1,000.00 | | 1,000.00 | | 1,083.40 | | 1,019.85 | | 5.36 | | | 5.20 | | 1.03 |
Class A | | 1,000.00 | | 1,000.00 | | 999.99 | | 1,018.80 | | 0.10 | * | | 6.26 | | 1.24 |
Class C | | 1,000.00 | | 1,000.00 | | 999.99 | | 1,015.05 | | 0.16 | * | | 10.02 | | 1.99 |
| * | For the period September 28, 2007 through September 30, 2007. These fund classes commenced public offering of shares on October 1, 2007. |
Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
12
Understanding Your Expenses — Emerging Markets Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for your share class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses by share class
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in each share class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for each share class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | | |
Shares | | 1,000.00 | | 1,000.00 | | 1,260.70 | | 1,015.75 | | 10.46 | | | 9.32 | | 1.85 |
Class A | | 1,000.00 | | 1,000.00 | | 993.80 | | 1,017.50 | | 0.12 | * | | 7.57 | | 1.50 |
Class C | | 1,000.00 | | 1,000.00 | | 993.80 | | 1,013.75 | | 0.18 | * | | 11.33 | | 2.25 |
| * | For the period September 28, 2007 through September 30, 2007. These fund classes commenced public offering of shares on October 1, 2007. |
Expenses paid during the period are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
13
Understanding Your Expenses — International Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | |
Shares | | 1,000.00 | | 1,000.00 | | 1,092.70 | | 1,017.50 | | 7.85 | | 7.57 | | 1.50 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
14
Understanding Your Expenses — Pacific/Asia Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | |
Shares | | 1,000.00 | | 1,000.00 | | 1,156.10 | | 1,017.00 | | 8.62 | | 8.07 | | 1.60 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
15
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Blended Equity Fund
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — 96.21% | | |
| | CONSUMER DISCRETIONARY — 9.55% |
| 74,000 | | BorgWarner, Inc. | | $ | 6,773,220 |
| 36,000 | | Dillard’s, Inc., Class A | | | 785,880 |
| 98,800 | | eBay, Inc.(a) | | | 3,855,176 |
| 1,155 | | Interpublic Group of Companies, Inc.(a) | | | 11,989 |
| 130,000 | | John Wiley & Sons, Class A | | | 5,840,900 |
| 118,000 | | Life Time Fitness, Inc.(a) | | | 7,238,120 |
| 61,500 | | Sotheby’s Holdings, Inc., Class A | | | 2,939,085 |
| 176,400 | | Target Corp. | | | 11,213,748 |
| | | | | |
| | | | | 38,658,118 |
| | | | | |
| | CONSUMER STAPLES — 6.22% |
| 88,200 | | Altria Group, Inc. | | | 6,132,546 |
| 113,750 | | Anheuser-Busch Cos., Inc. | | | 5,686,363 |
| 61,036 | | Kraft Foods, Inc., Class A | | | 2,106,352 |
| 156,100 | | Wal-Mart Stores, Inc. | | | 6,813,765 |
| 68,974 | | Wm. Wrigley Jr. Co., Class B | | | 4,430,200 |
| | | | | |
| | | | | 25,169,226 |
| | | | | |
| | ENERGY — 11.26% | | | |
| 84,250 | | Apache Corp. | | | 7,587,555 |
| 37,100 | | Chevron Corp. | | | 3,471,818 |
| 117,800 | | Cimarex Energy Co. | | | 4,388,050 |
| 478,201 | | El Paso Corp. | | | 8,115,071 |
| 145,772 | | Exxon Mobil Corp. | | | 13,492,656 |
| 13,200 | | Royal Dutch Shell PLC, ADR | | | 1,084,776 |
| 78,500 | | Suncor Energy, Inc., ADR | | | 7,442,585 |
| | | | | |
| | | | | 45,582,511 |
| | | | | |
| | FINANCIAL — 20.04% | | | |
| 236,022 | | Aegon N.V. | | | 4,491,499 |
| 129,250 | | American Capital Strategies Ltd. | | | 5,522,853 |
| 92,600 | | American Express Co. | | | 5,497,662 |
| 56,591 | | American International Group, Inc. | | | 3,828,381 |
| 18,520 | | Ameriprise Financial, Inc. | | | 1,168,797 |
| 168,520 | | Bank of America Corp.(b) | | | 8,471,500 |
| 62 | | Berkshire Hathaway, Inc., Class A(a) | | | 7,347,620 |
| 198,500 | | Leucadia National Corp. | | | 9,571,670 |
| 49,088 | | Mellon Financial Corp. | | | 2,166,744 |
| 45,400 | | Merrill Lynch & Co., Inc. | | | 3,236,112 |
| 88,750 | | NYSE Euronext | | | 7,026,337 |
| 112,173 | | Progressive Corp. | | | 2,177,278 |
| 93,000 | | RenaissanceRe Holdings Ltd. | | | 6,083,130 |
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | |
| | FINANCIAL — (continued) | | | |
| 213,100 | | State Street Corp. | | $ | 14,524,896 |
| | | | | |
| | | | | 81,114,479 |
| | | | | |
| | HEALTH CARE — 10.95% | | | |
| 180,800 | | Abbott Laboratories | | | 9,694,496 |
| 22,100 | | Genzyme Corp. — General Division(a) | | | 1,369,316 |
| 18,100 | | Hospira, Inc.(a) | | | 750,245 |
| 181,061 | | Johnson & Johnson | | | 11,895,708 |
| 98,500 | | Medtronic, Inc. | | | 5,556,385 |
| 75,000 | | Novo-Nordisk A/S, ADR | | | 9,078,000 |
| 97,058 | | Pfizer, Inc. | | | 2,371,127 |
| 51,100 | | Schering-Plough Corp. | | | 1,616,293 |
| 163,657 | | Senomyx, Inc.(a) | | | 2,004,798 |
| | | | | |
| | | | | 44,336,368 |
| | | | | |
| | INDUSTRIALS — 13.12% | | | |
| 1,840,000 | | Bombardier, Inc., Class B(a) | | | 10,932,891 |
| 115,000 | | Canadian National Railway Co. | | | 6,555,000 |
| 51,100 | | Dover Corp. | | | 2,603,545 |
| 86,000 | | Expeditors International of Washington, Inc. | | | 4,067,800 |
| 261,869 | | General Electric Co. | | | 10,841,377 |
| 2,200,000 | | Noble Group Ltd. | | | 3,206,673 |
| 124,000 | | Quanta Services, Inc.(a) | | | 3,279,800 |
| 118,000 | | Rolls-Royce Group PLC, ADR | | | 6,301,200 |
| 96,858 | | Simpson Manufacturing Co., Inc. | | | 3,084,927 |
| 59,100 | | Waste Management, Inc. | | | 2,230,434 |
| | | | | |
| | | | | 53,103,647 |
| | | | | |
| | INFORMATION TECHNOLOGY — 11.34% |
| 635,000 | | 3com Corp.(a) | | | 3,136,900 |
| 432,065 | | Cisco Systems, Inc.(a) | | | 14,305,672 |
| 112,000 | | Microchip Technology, Inc. | | | 4,067,840 |
| 316,700 | | Microsoft Corp. | | | 9,329,982 |
| 154,400 | | National Instruments Corp. | | | 5,300,552 |
| 141,200 | | NCR Corp.(a) | | | 7,031,760 |
| 75,000 | | Nvidia Corp.(a) | | | 2,718,000 |
| | | | | |
| | | | | 45,890,706 |
| | | | | |
| | MATERIALS — 5.90% | | | |
| 114,500 | | Aracruz Celulose SA, ADR | | | 8,426,055 |
| 104,500 | | Bowater, Inc. | | | 1,559,140 |
| 127,500 | | Nucor Corp. | | | 7,582,425 |
| 70,750 | | Vulcan Materials Co. | | | 6,307,363 |
| | | | | |
| | | | | 23,874,983 |
| | | | | |
See Notes to Financial Statements.
16
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Blended Equity Fund — (continued)
| | | | | |
Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | |
| | REAL ESTATE — 0.89% | | | |
| 107,500 | | St. Joe Co. | | $ | 3,613,075 |
| | | | | |
| | | | | 3,613,075 |
| | | | | |
| | UTILITIES — 6.94% | | | |
| 331,500 | | AES Corp.(a) | | | 6,643,260 |
| 288,000 | | Sierra Pacific Resources | | | 4,530,240 |
| 247,000 | | TXU Corp. | | | 16,912,090 |
| | | | | |
| | | | | 28,085,590 |
| | | | | |
| | TOTAL COMMON STOCKS
(Cost $192,976,491) | | | 389,428,703 |
| | | | | |
| FOREIGN COMMON STOCKS — 3.43% | | |
| | BELGIUM — 0.69% | | | |
| 153,500 | | RHJ International(a) | | | 2,787,664 |
| | | | | |
| | | | | 2,787,664 |
| | | | | |
| | GERMANY — 1.27% | | | |
| 80,000 | | Bayerische Motoren Werke AG | | | 5,150,741 |
| | | | | |
| | | | | 5,150,741 |
| | | | | |
| | SINGAPORE — 1.47% | | | |
| 1,250,000 | | Olam International Ltd. | | | 2,640,015 |
| 383,500 | | Singapore Exchange Ltd. | | | 3,319,356 |
| | | | | |
| | | | | 5,959,371 |
| | | | | |
| | TOTAL FOREIGN COMMON STOCKS
(Cost $10,989,717) | | | 13,897,776 |
| | | | | |
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
| REPURCHASE AGREEMENT — 0.03% | | |
| $ | 110,000 | | Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Government Obligation maturing 08/15/22, market value $113,513 (repurchase proceeds $110,033) | | $ | 110,000 |
| | | | | | |
| | | TOTAL REPURCHASE AGREEMENT
(Cost $110,000) | | | 110,000 |
| | | | | | |
| | | | | | |
TOTAL INVESTMENTS
(Cost $204,076,208)(c) | | 99.67 | % | | $ | 403,436,479 |
OTHER ASSETS IN EXCESS OF LIABILITIES | | 0.33 | | | | 1,352,056 |
| | | | | | |
NET ASSETS | | 100.00 | % | | $ | 404,788,535 |
| | | | | | |
| (a) | Non-income producing security. |
| (b) | Bank of America Corp. became an affiliate on July 1, 2007. Investments in affiliates during the six months ended September 30, 2007: |
| | | |
| Security name: | | Bank of America Corp. |
Shares as of 03/31/07: | | | 168,520 |
Shares purchased: | | | — |
Shares sold: | | | — |
Shares as of 09/30/07 | | | 168,520 |
Net realized gain/loss | | $ | — |
Dividend income earned | | $ | 107,853 |
Value at end of period | | $ | 8,471,500 |
| (c) | Cost for federal income tax purposes is $204,076,208. |
ADR—American Depository Receipt
Ltd.—Limited
PLC—Public Limited Company
See Notes to Financial Statements.
17
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Blended Equity Fund — (continued)
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | |
Sector Diversification | | % of
Net
Assets | | Value |
Financial | | 21.51 | | $ | 87,221,499 |
Industrials | | 13.12 | | | 53,103,647 |
Information Technology | | 11.34 | | | 45,890,706 |
Energy | | 11.26 | | | 45,582,511 |
Health Care | | 10.95 | | | 44,336,368 |
Consumer Discretionary | | 10.82 | | | 43,808,859 |
Utilities | | 6.94 | | | 28,085,590 |
Consumer Staples | | 6.91 | | | 27,809,241 |
Materials | | 5.90 | | | 23,874,983 |
Real Estate | | 0.89 | | | 3,613,075 |
Repurchase Agreement | | 0.03 | | | 110,000 |
| | | | | |
Total Investments | | 99.67 | | $ | 403,436,479 |
Other Assets in Excess of Liabilities | | 0.33 | | | 1,352,056 |
| | | | | |
Net Assets | | 100.00 | | $ | 404,788,535 |
| | | | | |
See Notes to Financial Statements.
18
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Energy and Natural Resources Fund
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — 95.19% | | |
| | ENERGY — 59.66% | | | |
| 300,000 | | Arch Coal, Inc. | | $ | 10,122,000 |
| 175,000 | | Arena Resources, Inc.(a) | | | 11,462,500 |
| 150,000 | | Atwood Oceanics, Inc.(a) | | | 11,484,000 |
| 162,740 | | BP PLC ADR | | | 11,286,019 |
| 125,000 | | Chevron Corp. | | | 11,697,500 |
| 150,000 | | ConocoPhillips | | | 13,165,500 |
| 156,388 | | Devon Energy Corp. | | | 13,011,482 |
| 100,000 | | Diamond Offshore Drilling, Inc. | | | 11,329,000 |
| 850,000 | | El Paso Corp. | | | 14,424,500 |
| 300,000 | | Exxon Mobil Corp. | | | 27,768,000 |
| 4,000,000 | | Gasco Energy, Inc.(a) | | | 7,400,000 |
| 160,000 | | GlobalSantaFe Corp. | | | 12,163,200 |
| 150,000 | | Grant Prideco, Inc.(a) | | | 8,178,000 |
| 500,000 | | Halliburton Co. | | | 19,200,000 |
| 2,297,700 | | Kodiak Oil & Gas Corp. ADR(a) | | | 7,582,410 |
| 325,000 | | Marathon Oil Corp. | | | 18,531,500 |
| 100,000 | | National-Oilwell, Inc.(a) | | | 14,450,000 |
| 500,000 | | Nova Biosource Fuels, Inc.(a) | | | 1,405,000 |
| 600,000 | | Parallel Petroleum Corp.(a) | | | 10,194,000 |
| 350,000 | | Plains Exploration & Production Co.(a) | | | 15,477,000 |
| 300,000 | | Pride Intl Inc Del Com(a) | | | 10,965,000 |
| 150,000 | | Quicksilver Resources, Inc.(a) | | | 7,057,500 |
| 297,000 | | Range Resources Corp. | | | 12,076,020 |
| 131,000 | | Schlumberger Ltd. | | | 13,755,000 |
| 75,000 | | Smith International, Inc. | | | 5,355,000 |
| 352,600 | | Southwestern Energy Co.(a) | | | 14,756,310 |
| 162,800 | | Suncor Energy, Inc. ADR | | | 15,435,068 |
| 200,000 | | Tenaris S.A. ADR | | | 10,524,000 |
| 675,000 | | Teton Energy Corp.(a) | | | 3,145,500 |
| 562,400 | | TETRA Technologies, Inc.(a) | | | 11,889,136 |
| 225,000 | | Total S.A. ADR | | | 18,231,750 |
| 175,000 | | Transocean Sedco Forex, Inc.(a) | | | 19,783,750 |
| 163,400 | | Ultra Petroleum Corp.(a) | | | 10,137,336 |
| 400,000 | | VeraSun Energy Corp.(a) | | | 4,400,000 |
| 266,666 | | XTO Energy, Inc. | | | 16,490,625 |
| | | | | |
| | | | | 424,333,606 |
| | | | | |
| | INDUSTRIALS — 10.50% | | | |
| 19,900 | | Aegean Marine Petroleum Network, Inc. | | | 721,574 |
| 100,000 | | Deere & Co. | | | 14,842,000 |
| 107,200 | | Dryships, Inc. | | | 9,739,120 |
| 34,300 | | Excel Maritime Carriers Ltd. | | | 1,913,940 |
| 375,000 | | Genco Shipping & Trading Ltd. | | | 24,573,750 |
| 425,000 | | General Electric Co. | | | 17,595,000 |
| 100,000 | | Granite Construction, Inc. | | | 5,302,000 |
| | | | | |
| | | | | 74,687,384 |
| | | | | |
| | | | | | |
| Shares | | | | Value |
| | | | | | |
| COMMON STOCKS — (continued) | | |
| | | MATERIALS — 17.51% | | | |
| | 50,000 | | Allegheny Technologies, Inc. | | $ | 5,497,500 |
| | 200,800 | | Aracruz Cellulose S.A. ADR | | | 14,776,872 |
| | 580,000 | | Claymont Steel Holdings, Inc.(a) | | | 11,745,000 |
| | 400,000 | | Companhia Vale do Rio Doce ADR | | | 13,572,000 |
| | 86,496 | | Freeport-McMoRan Copper & Gold, Inc. ADR | | | 9,072,565 |
| | 600,000 | | Goldcorp, Inc. | | | 18,336,000 |
| | 600,000 | | HudBay Minerals, Inc. ADR(a) | | | 15,540,000 |
| | 356,500 | | Ivanhoe Mines Ltd.(a) | | | 4,652,325 |
| | 600,000 | | Kinross Gold Corp.(a) | | | 8,988,000 |
| | 65,000 | | Rio Tinto PLC ADR | | | 22,321,000 |
| | | | | | |
| | | | | | 124,501,262 |
| | | | | | |
| | | UTILITIES — 7.52% | | | |
| | 550,000 | | Aqua America, Inc. | | | 12,474,000 |
| | 186,500 | | Calpine Corp.(a) | | | 279,750 |
| | 125,000 | | Entergy Corp. | | | 13,536,250 |
| | 225,000 | | FPL Group, Inc. | | | 13,698,000 |
| | 397,000 | | Williams Cos., Inc. | | | 13,521,820 |
| | | | | | |
| | | | | | 53,509,820 |
| | | | | | |
| | | TOTAL COMMON STOCKS
(Cost $588,453,136) | | | 677,032,072 |
| | | | | | |
Principal
Amount | | | | |
| REPURCHASE AGREEMENT — 7.40% | | |
| $ | 52,642,000 | | Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 05/15/17, market value $53,697,938 (repurchase proceeds $52,658,012) | | | 52,642,000 |
| | | | | | |
| | | TOTAL REPURCHASE AGREEMENT
(Cost $52,642,000) | | | 52,642,000 |
| | | | | | |
| | | | | | | |
TOTAL INVESTMENTS
(Cost $641,095,136)(b) | | 102.59 | % | | $ | 729,674,072 | |
OTHER LIABILITIES IN EXCESS OF ASSETS | | (2.59 | ) | | | (18,413,361 | ) |
| | | | | | | |
NET ASSETS | | 100.00 | % | | $ | 711,260,711 | |
| | | | | | | |
See Notes to Financial Statements.
19
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Energy and Natural Resources Fund — (continued)
| (a) | Non-income producing security. |
| (b) | Cost for federal income tax purposes is $641,095,136. |
ADR—American Depository Receipt
Ltd.—Limited
PLC—Public Limited Company
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | | | |
Sector Diversification | | % of
Net
Assets | | | Value | |
Energy | | 59.66 | | | $ | 424,333,606 | |
Materials | | 17.51 | | | | 124,501,262 | |
Industrials | | 10.50 | | | | 74,687,384 | |
Utilities | | 7.52 | | | | 53,509,820 | |
Repurchase Agreement | | 7.40 | | | | 52,642,000 | |
| | | | | | | |
Total Investments | | 102.59 | | | $ | 729,674,072 | |
Other Liabilities in Excess of Assets | | (2.59 | ) | | | (18,413,361 | ) |
| | | | | | | |
Net Assets | | 100.00 | | | $ | 711,260,711 | |
| | | | | | | |
See Notes to Financial Statements.
20
Excelsior Funds Trust
Portfolio of Investments — September 30, 2007 (Unaudited)
Equity Income Fund
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — 93.00% | | |
| | CONSUMER DISCRETIONARY — 6.78% |
| 105,000 | | CBS Corp., Class B | | $ | 3,307,500 |
| 100,000 | | Circuit City Stores, Inc. | | | 791,000 |
| 90,000 | | Home Depot, Inc. | | | 2,919,600 |
| 225,000 | | Newell Rubbermaid, Inc. | | | 6,484,500 |
| 135,000 | | Time Warner, Inc. | | | 2,478,600 |
| | | | | |
| | | | | 15,981,200 |
| | | | | |
| | CONSUMER STAPLES — 7.38% | | | |
| 70,000 | | Altria Group, Inc. | | | 4,867,100 |
| 60,000 | | H.J. Heinz Co. | | | 2,772,000 |
| 50,000 | | Kimberly-Clark Corp. | | | 3,513,000 |
| 160,000 | | SUPERVALU, Inc. | | | 6,241,600 |
| | | | | |
| | | | | 17,393,700 |
| | | | | |
| | ENERGY — 10.25% | | | |
| 65,000 | | BP PLC ADR | | | 4,507,750 |
| 85,000 | | Chevron Corp. | | | 7,954,300 |
| 195,000 | | Halliburton Co. | | | 7,488,000 |
| 135,000 | | Penn West Energy Trust | | | 4,194,450 |
| | | | | |
| | | | | 24,144,500 |
| | | | | |
| | FINANCIAL — 18.46% | | | |
| 285,000 | | Arthur J. Gallagher & Co. | | | 8,256,450 |
| 185,000 | | Bank of New York Mellon Corp. | | | 8,165,900 |
| 113,000 | | Citigroup, Inc. | | | 5,273,710 |
| 105,000 | | Freddie Mac | | | 6,196,050 |
| 75,000 | | Morgan Stanley | | | 4,725,000 |
| 90,000 | | RenaissanceRe Holdings Ltd. | | | 5,886,900 |
| 153,000 | | U.S. BanCorp. | | | 4,977,090 |
| | | | | |
| | | | | 43,481,100 |
| | | | | |
| | HEALTH CARE — 5.94% | | | |
| 70,000 | | Eli Lilly & Co. | | | 3,985,100 |
| 75,000 | | Medtronic, Inc. | | | 4,230,750 |
| 105,000 | | Novartis AG ADR | | | 5,770,800 |
| | | | | |
| | | | | 13,986,650 |
| | | | | |
| | INDUSTRIALS — 12.70% | | | |
| 160,000 | | Dover Corp. | | | 8,152,000 |
| 195,000 | | General Electric Co. | | | 8,073,000 |
| 125,000 | | Honeywell International, Inc. | | | 7,433,750 |
| 60,000 | | Hubbell, Inc., Class B | | | 3,427,200 |
| 75,000 | | Waste Management, Inc. | | | 2,830,500 |
| | | | | |
| | | | | 29,916,450 |
| | | | | |
| | INFORMATION TECHNOLOGY — 11.83% |
| 225,000 | | Electronic Data Systems Corp. | | | 4,914,000 |
| 145,000 | | Linear Technology Corp. | | | 5,073,550 |
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | |
| | INFORMATION TECHNOLOGY — (continued) |
| 210,000 | | Microsoft Corp. | | $ | 6,186,600 |
| 150,000 | | Nokia Oyj ADR | | | 5,689,500 |
| 230,000 | | Xilinx, Inc. | | | 6,012,200 |
| | | | | |
| | | | | 27,875,850 |
| | | | | |
| | MATERIALS — 14.01% | | | |
| 280,000 | | Domtar Corp.(a) | | | 2,296,000 |
| 67,000 | | Eastman Chemical Co. | | | 4,470,910 |
| 235,000 | | Packaging Corp. of America | | | 6,831,450 |
| 45,000 | | Pope Resources Ltd. | | | 1,907,550 |
| 32,000 | | Rayonier, Inc. | | | 1,537,280 |
| 395,000 | | RPM, Inc. | | | 9,460,250 |
| 90,000 | | Weyerhaeuser Co. | | | 6,507,000 |
| | | | | |
| | | | | 33,010,440 |
| | | | | |
| | TELECOMMUNICATION SERVICES — 5.65% |
| 147,000 | | AT&T, Inc. | | | 6,219,570 |
| 160,000 | | Verizon Communications, Inc. | | | 7,084,800 |
| | | | | |
| | | | | 13,304,370 |
| | | | | |
| | TOTAL COMMON STOCKS
(Cost $173,037,098) | | | 219,094,260 |
| | | | | |
| FOREIGN COMMON STOCKS — 3.02% | | |
| | UNITED KINGDOM — 3.02% | | | |
| 460,000 | | Pearson PLC | | | 7,118,102 |
| | | | | |
| | TOTAL FOREIGN COMMON STOCKS (Cost $5,471,204) | | | 7,118,102 |
| | | | | |
| CONVERTIBLE PREFERRED STOCKS — 1.68% |
| | CONSUMER DISCRETIONARY — 1.68% |
| 66,000 | | Ford Motor Co. Capital Trust II, Preferred Exchange, 6.50% | | | 2,491,500 |
| 60,000 | | General Motors Corp., Series C, Preferred Exchange, 6.25% | | | 1,469,400 |
| | | | | |
| | TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $3,098,578) | | | 3,960,900 |
| | | | | |
| | | | | | |
TOTAL INVESTMENTS
(Cost $181,606,880)(b) | | 97.70 | % | | $ | 230,173,262 |
OTHER ASSETS IN EXCESS OF LIABILITIES | | 2.30 | | | | 5,422,787 |
| | | | | | |
NET ASSETS | | 100.00 | % | | $ | 235,596,049 |
| | | | | | |
See Notes to Financial Statements.
21
Excelsior Funds Trust
Portfolio of Investments — September 30, 2007 (Unaudited)
Equity Income Fund — (continued)
| (a) | Non-income producing security. |
| (b) | Cost for federal income tax purposes is $181,606,880. |
ADR—American Depository Receipt
Ltd.—Limited
PLC—Public Limited Company
For the six months ended September 30, 2007, transactions in written option contracts were as follows:
| | | | | | | |
| | | Number of
contracts | | | Premium
received | |
Options outstanding at March 31, 2007 | | — | | | | — | |
Options written | | (500 | ) | | $ | 98,498 | |
Options terminated in closing purchase transactions | | — | | | | — | |
Options exercised | | — | | | | — | |
Options expired | | 500 | | | | (98,498 | ) |
| | | | | | | |
Options outstanding at September 30, 2007 | | — | | | | — | |
| | | | | | | |
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | |
Sector Diversification | | % of
Net
Assets | | Value |
Financial | | 18.46 | | $ | 43,481,100 |
Materials | | 14.01 | | | 33,010,440 |
Industrials | | 12.70 | | | 29,916,450 |
Information Technology | | 11.83 | | | 27,875,850 |
Consumer Discretionary | | 11.48 | | | 27,060,202 |
Energy | | 10.25 | | | 24,144,500 |
Consumer Staples | | 7.38 | | | 17,393,700 |
Health Care | | 5.94 | | | 13,986,650 |
Telecommunication Services | | 5.65 | | | 13,304,370 |
| | | | | |
Total Investments | | 97.70 | | $ | 230,173,262 |
Other Assets in Excess of Liabilities | | 2.30 | | | 5,422,787 |
| | | | | |
Net Assets | | 100.00 | | $ | 235,596,049 |
| | | | | |
See Notes to Financial Statements.
22
Excelsior Funds Trust
Portfolio of Investments — September 30, 2007 (Unaudited)
Equity Opportunities Fund
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — 88.28% | | |
| | CONSUMER DISCRETIONARY — 9.64% |
| 128,250 | | BorgWarner, Inc. | | $ | 11,738,722 |
| 188,500 | | Dillard’s, Inc., Class A | | | 4,114,955 |
| 145,000 | | John Wiley & Sons, Class A | | | 6,514,850 |
| 180,200 | | Life Time Fitness, Inc.(a) | | | 11,053,468 |
| 127,400 | | Sotheby’s Holdings, Inc., Class A | | | 6,088,446 |
| | | | | |
| | | | | 39,510,441 |
| | | | | |
| | CONSUMER STAPLES — 3.71% | | | |
| 166,400 | | Anheuser-Busch Cos., Inc. | | | 8,318,336 |
| 106,900 | | Wm. Wrigley Jr. Co. | | | 6,866,187 |
| | | | | |
| | | | | 15,184,523 |
| | | | | |
| | ENERGY — 10.38% | | | |
| 96,300 | | Apache Corp. | | | 8,672,778 |
| 187,000 | | Cimarex Energy Co. | | | 6,965,750 |
| 616,000 | | El Paso Corp. | | | 10,453,520 |
| 86,000 | | Exxon Mobil Corp. | | | 7,960,160 |
| 89,400 | | Suncor Energy, Inc., ADR | | | 8,476,014 |
| | | | | |
| | | | | 42,528,222 |
| | | | | |
| | FINANCIAL — 15.65% | | | |
| 184,897 | | Aegon N.V. | | | 3,518,590 |
| 201,900 | | American Capital Strategies Ltd. | | | 8,627,187 |
| 97 | | Berkshire Hathaway, Inc., Class A(a) | | | 11,495,470 |
| 307,200 | | Leucadia National Corp. | | | 14,813,184 |
| 142,500 | | NYSE Euronext | | | 11,281,725 |
| 292,000 | | Progressive Corp. | | | 5,667,720 |
| 133,000 | | RenaissanceRe Holdings Ltd. | | | 8,699,530 |
| | | | | |
| | | | | 64,103,406 |
| | | | | |
| | HEALTH CARE — 7.29% | | | |
| 115,000 | | Johnson & Johnson | | | 7,555,500 |
| 113,000 | | Medtronic, Inc. | | | 6,374,330 |
| 101,900 | | Novo-Nordisk A/S, ADR | | | 12,333,976 |
| 294,000 | | Senomyx, Inc.(a) | | | 3,601,500 |
| | | | | |
| | | | | 29,865,306 |
| | | | | |
| | INDUSTRIALS — 18.75% | | | |
| 3,222,000 | | Bombardier, Inc., Class B(a)(b) | | | 19,144,443 |
| 141,000 | | Canadian National Railway Co. | | | 8,037,000 |
| 171,000 | | Expeditors International of Washington,, Inc. | | | 8,088,300 |
| 181,500 | | General Electric Co. | | | 7,514,100 |
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | |
| | INDUSTRIALS — (continued) | | | |
| 80,300 | | Granite Construction, Inc. | | $ | 4,257,506 |
| 454,600 | | Quanta Services, Inc.(a) | | | 12,024,170 |
| 213,200 | | Rolls-Royce Group PLC, ADR | | | 11,384,880 |
| 200,000 | | Simpson Manufacturing Co., Inc. | | | 6,370,000 |
| | | | | |
| | | | | 76,820,399 |
| | | | | |
| | INFORMATION TECHNOLOGY — 4.47% |
| 1,180,000 | | 3com Corp.(a) | | | 5,829,200 |
| 162,300 | | Microchip Technology, Inc. | | | 5,894,736 |
| 192,500 | | National Instruments Corp. | | | 6,608,525 |
| | | | | |
| | | | | 18,332,461 |
| | | | | |
| | MATERIALS — 12.98% | | | |
| 130,000 | | Aracruz Celulose SA, ADR | | | 9,566,700 |
| 242,000 | | Bowater, Inc. | | | 3,610,640 |
| 221,000 | | Monsanto Co. | | | 18,948,540 |
| 166,600 | | Nucor Corp. | | | 9,907,702 |
| 124,900 | | Vulcan Materials Co. | | | 11,134,836 |
| | | | | |
| | | | | 53,168,418 |
| | | | | |
| | REAL ESTATE — 0.99% | | | |
| 121,000 | | St. Joe Co. | | | 4,066,810 |
| | | | | |
| | UTILITIES — 4.42% | | | |
| 542,000 | | AES Corp.(a) | | | 10,861,680 |
| 461,000 | | Sierra Pacific Resources | | | 7,251,530 |
| | | | | |
| | | | | 18,113,210 |
| | | | | |
| | TOTAL COMMON STOCKS
(Cost $289,235,618) | | | 361,693,196 |
| | | | | |
| FOREIGN COMMON STOCKS — 9.10% | | |
| | BELGIUM — 1.43% | | | |
| 323,000 | | RHJ International(a) | | | 5,865,899 |
| | | | | |
| | GERMANY — 1.34% | | | |
| 85,200 | | Bayerische Motoren Werke AG | | | 5,485,539 |
| | | | | |
| | SINGAPORE — 6.33% | | | |
| 6,097,000 | | Noble Group Ltd. | | | 8,886,856 |
| 3,143,000 | | Olam International Ltd. | | | 6,638,054 |
| 1,203,385 | | Singapore Exchange Ltd. | | | 10,415,811 |
| | | | | |
| | | | | 25,940,721 |
| | | | | |
| | TOTAL FOREIGN COMMON STOCKS
(Cost $22,615,223) | | | 37,292,159 |
| | | | | |
See Notes to Financial Statements.
23
Excelsior Funds Trust
Portfolio of Investments — September 30, 2007 (Unaudited)
Equity Opportunities Fund — (continued)
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
| REPURCHASE AGREEMENT — 1.52% | | |
| $ | 6,231,000 | | Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 05/15/17, market value $6,358,500 (repurchase proceeds $6,232,895) | | $ | 6,231,000 |
| | | | | | |
| | | TOTAL REPURCHASE AGREEMENT
(Cost $6,231,000) | |
|
6,231,000 |
| | | | | | |
| | | | | | | | |
TOTAL INVESTMENTS
(Cost $318,081,841)(c) | | 98.90 | % | | | | $ | 405,216,355 |
OTHER ASSETS IN EXCESS OF LIABILITIES | | 1.10 | | | | | | 4,520,017 |
| | | | | | | | |
NET ASSETS | | 100.00 | % | | | | $ | 409,736,372 |
| | | | | | | | |
| (a) | Non-income producing security. |
| (b) | Represents fair value as determined in good faith under procedures approved by the Board of Trustees. |
| (c) | Cost for federal income tax purposes is $318,081,841. |
ADR—American Depository Receipt
Ltd.—Limited
PLC—Public Limited Company
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | |
Sector Diversification | | % of
Net
Assets | | Value |
Industrials | | 20.92 | | $ | 85,707,255 |
Financial | | 19.62 | | | 80,385,116 |
Materials | | 12.98 | | | 53,168,418 |
Consumer Discretionary | | 10.98 | | | 44,995,980 |
Energy | | 10.38 | | | 42,528,222 |
Health Care | | 7.29 | | | 29,865,306 |
Consumer Staples | | 5.33 | | | 21,822,577 |
Information Technology | | 4.47 | | | 18,332,461 |
Utilities | | 4.42 | | | 18,113,210 |
Repurchase Agreement | | 1.52 | | | 6,231,000 |
Real Estate | | 0.99 | | | 4,066,810 |
| | | | | |
Total Investments | | 98.90 | | $ | 405,216,355 |
Other Assets in Excess of Liabilities | | 1.10 | | | 4,520,017 |
| | | | | |
Net Assets | | 100.00 | | $ | 409,736,372 |
| | | | | |
See Notes to Financial Statements.
24
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Large Cap Growth Fund
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — 99.18% | | |
| | CONSUMER DISCRETIONARY — 14.13% |
| 476,700 | | Coach, Inc.(a) | | $ | 22,533,609 |
| 658,114 | | eBay, Inc.(a) | | | 25,679,608 |
| 191,212 | | Las Vegas Sands Corp.(a) | | | 25,511,505 |
| 663,300 | | Lowe’s Companies, Inc. | | | 18,585,666 |
| 1,201,000 | | Starbucks Corp.(a) | | | 31,466,200 |
| | | | | |
| | | | | 123,776,588 |
| | | | | |
| | FINANCIAL — 6.95% | | | |
| 64,800 | | Chicago Mercantile Exchange | | | 38,060,280 |
| 368,300 | | Lehman Brothers Holdings, Inc. | | | 22,735,159 |
| | | | | |
| | | | | 60,795,439 |
| | | | | |
| | HEALTH CARE — 29.69% | | | |
| 195,155 | | Alcon, Inc. | | | 28,086,707 |
| 546,400 | | Allergan, Inc. | | | 35,226,408 |
| 523,100 | | Celgene Corp.(a) | | | 37,302,261 |
| 364,900 | | Covance, Inc.(a) | | | 28,425,710 |
| 473,296 | | Genentech, Inc.(a) | | | 36,926,554 |
| 892,316 | | Gilead Sciences, Inc.(a) | | | 36,468,955 |
| 111,637 | | Intuitive Surgical, Inc.(a) | | | 25,676,510 |
| 394,512 | | Zimmer Holdings, Inc.(a) | | | 31,951,527 |
| | | | | |
| | | | | 260,064,632 |
| | | | | |
| | INDUSTRIALS — 6.03% | | | |
| 510,000 | | Expeditors International of Washington, Inc. | | | 24,123,000 |
| 243,694 | | First Solar, Inc.(a) | | | 28,692,532 |
| | | | | |
| | | | | 52,815,532 |
| | | | | |
| | INFORMATION TECHNOLOGY — 38.17% |
| 572,500 | | Adobe Systems, Inc.(a) | | | 24,995,350 |
| 1,240,400 | | Akamai Technologies, Inc.(a) | | | 35,636,692 |
| 227,800 | | Apple Computer, Inc.(a) | | | 34,976,412 |
| 820,587 | | Broadcom Corp., Class A(a) | | | 29,902,190 |
| 1,083,500 | | Corning, Inc. | | | 26,708,275 |
| 431,815 | | Electronic Arts, Inc.(a) | | | 24,177,322 |
| 60,538 | | Google, Inc., Class A(a) | | | 34,341,391 |
| 513,306 | | Infosys Technologies Ltd., ADR | | | 24,838,878 |
| 809,100 | | Qualcomm, Inc. | | | 34,192,566 |
| 278,183 | | Research In Motion Ltd.(a) | | | 27,414,935 |
| 436,625 | | VMware, Inc., Class A(a) | | | 37,113,125 |
| | | | | |
| | | | | 334,297,136 |
| | | | | |
| | | | | | |
| Shares | | | | Value |
| | | | | | |
| COMMON STOCKS — (continued) | | |
| | | TELECOMMUNICATION SERVICES — 4.21% |
| | 575,900 | | America Movil S.A. de C.V., Series Lg, ADR | | $ | 36,857,600 |
| | | | | | |
| | | TOTAL COMMON STOCKS (Cost $662,920,678) | | | 868,606,927 |
| | | | | | |
| | |
Principal
Amount | | | | |
| REPURCHASE AGREEMENT — 1.53% | | |
| $ | 13,397,000 | | Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 02/15/36, market value $13,668,313 (repurchase proceeds $13,401,075) | | | 13,397,000 |
| | | | | | |
| | | TOTAL REPURCHASE
AGREEMENT
(Cost $13,397,000) | | | 13,397,000 |
| | | | | | |
| | | | | | | |
TOTAL INVESTMENTS
(Cost $676,317,678)(b) | | 100.71 | % | | $ | 882,003,927 | |
OTHER LIABILITIES IN EXCESS OF ASSETS | | (0.71 | ) | | | (6,198,688 | ) |
| | | | | | | |
NET ASSETS | | 100.00 | % | | $ | 875,805,239 | |
| | | | | | | |
| (a) | Non-income producing security. |
| (b) | Cost for federal income tax purposes is $676,317,678. |
ADR—American Depository Receipt
Ltd. —Limited
See Notes to Financial Statements.
25
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Large Cap Growth Fund — (continued)
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | | | |
Sector Diversification | | % of
Net
Assets | | | Value | |
Information Technology | | 38.17 | | | $ | 334,297,136 | |
Health Care | | 29.69 | | | | 260,064,632 | |
Consumer Discretionary | | 14.13 | | | | 123,776,588 | |
Financial | | 6.95 | | | | 60,795,439 | |
Industrials | | 6.03 | | | | 52,815,532 | |
Telecommunication Services | | 4.21 | | | | 36,857,600 | |
Repurchase Agreement | | 1.53 | | | | 13,397,000 | |
| | | | | | | |
Total Investments | | 100.71 | | | $ | 882,003,927 | |
Other Liabilities in Excess of Assets | | (0.71 | ) | | | (6,198,688 | ) |
| | | | | | | |
Net Assets | | 100.00 | | | $ | 875,805,239 | |
| | | | | | | |
See Notes to Financial Statements.
26
Excelsior Funds Trust
Portfolio of Investments — September 30, 2007 (Unaudited)
Mid Cap Value and Restructuring Fund
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — 98.00% |
| | CONSUMER DISCRETIONARY — 22.87% |
| 39,400 | | Autozone, Inc.(a) | | $ | 4,575,913 |
| 91,000 | | Black & Decker Corp. | | | 7,580,299 |
| 112,900 | | Centex Corp. | | | 2,999,753 |
| 360,000 | | Constellation Brands, Inc.(a) | | | 8,715,600 |
| 185,000 | | EchoStar Communications, Inc.(a) | | | 8,659,851 |
| 160,000 | | Limited Brands | | | 3,662,400 |
| 323,200 | | Onex Corp. | | | 11,876,499 |
| 167,700 | | Sherwin-Williams Co. | | | 11,019,567 |
| 378,200 | | Tempur-Pedic International, Inc. | | | 13,520,649 |
| 295,000 | | TJX Cos., Inc. | | | 8,575,650 |
| | | | | |
| | | | | 81,186,181 |
| | | | | |
| | CONSUMER STAPLES — 1.66% | | | |
| 230,000 | | Dean Foods Co. | | | 5,883,400 |
| | | | | |
| | ENERGY — 11.78% | | | |
| 86,000 | | Cimarex Energy Co. | | | 3,203,500 |
| 133,300 | | Devon Energy Corp. | | | 11,090,560 |
| 349,800 | | El Paso Corp. | | | 5,936,106 |
| 260,000 | | Noble Corp. | | | 12,753,000 |
| 137,800 | | Occidental Petroleum Corp. | | | 8,830,227 |
| | | | | |
| | | | | 41,813,393 |
| | | | | |
| | FINANCIAL — 21.03% | | | |
| 94,000 | | Ace Ltd. | | | 5,693,580 |
| 260,000 | | CIT Group, Inc. | | | 10,452,000 |
| 470,000 | | E*TRADE Group, Inc.(a) | | | 6,138,200 |
| 245,000 | | First Marblehead Corp. | | | 9,292,850 |
| 141,600 | | Lehman Brothers Holding, Inc. | | | 8,740,967 |
| 160,000 | | Leucadia National Corp. | | | 7,715,200 |
| 61,400 | | Mastercard, Inc., Class A | | | 9,085,358 |
| 150,000 | | Progressive Corp. | | | 2,911,500 |
| 83,000 | | RenaissanceRe Holdings Ltd. | | | 5,429,029 |
| 310,000 | | W.R. Berkley Corp. | | | 9,185,300 |
| | | | | |
| | | | | 74,643,984 |
| | | | | |
| | HEALTH CARE — 3.68% | | | |
| 176,700 | | Shire Pharmaceuticals PLC ADR | | | 13,072,266 |
| | | | | |
| | INDUSTRIALS — 20.31% | | | |
| 130,000 | | Autoliv, Inc. | | | 7,767,500 |
| 193,000 | | Brink’s Co. | | | 10,784,840 |
| 247,000 | | Empresa Brasileira de Aeronautica S.A. ADR | | | 10,848,240 |
| 150,000 | | Kennametal, Inc. | | | 12,597,000 |
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) |
| | INDUSTRIALS — (continued) | | | |
| 22,900 | | Lincoln Electric Holdings, Inc. | | $ | 1,777,269 |
| 172,000 | | Mueller Industries, Inc. | | | 6,216,080 |
| 185,000 | | Oshkosh Truck Corp. | | | 11,464,450 |
| 330,300 | | United Rentals, Inc.(a) | | | 10,625,751 |
| | | | | |
| | | | | 72,081,130 |
| | | | | |
| | INFORMATION TECHNOLOGY — 4.47% |
| 130,000 | | Electronic Data Systems Corp. | | | 2,839,200 |
| 225,000 | | Harris Corp. | | | 13,002,748 |
| | | | | |
| | | | | 15,841,948 |
| | | | | |
| | MATERIALS — 7.91% | | | |
| 210,700 | | Aracruz Cellulose S.A. ADR | | | 15,505,417 |
| 129,700 | | Cabot Microelectronics Corp.(a) | | | 5,544,675 |
| 380,000 | | Sterlite Industries (India) Ltd. ADS(a) | | | 7,030,000 |
| | | | | |
| | | | | 28,080,092 |
| | | | | |
| | REAL ESTATE — 0.98% | | | |
| 103,800 | | St. Joe Co. | | | 3,488,719 |
| | | | | |
| | UTILITIES — 3.31% | | | |
| 345,000 | | Williams Cos., Inc. | | | 11,750,700 |
| | | | | |
| | TOTAL COMMON STOCKS
(Cost $214,592,502) | | | 347,841,813 |
| | | | | |
| FOREIGN COMMON STOCKS — 2.00% | | |
| | NETHERLANDS — 2.00% | | | |
| 79,500 | | Hunter Douglas NV | | | 7,114,787 |
| | | | | |
| | TOTAL FOREIGN COMMON STOCKS (Cost $2,926,238) | | | 7,114,787 |
| | | | | |
| | | | | | | |
TOTAL INVESTMENTS
(Cost $217,518,740)(b) | | 100.00 | % | | $ | 354,956,600 | |
OTHER LIABILITIES IN EXCESS OF ASSETS | | 0.00 | * | | | (15,811 | ) |
| | | | | | | |
NET ASSETS | | 100.00 | % | | $ | 354,940,789 | |
| | | | | | | |
| (a) | Non-income producing security. |
| (b) | Cost for federal income tax purposes is $217,518,740. |
| * | Rounds to less than 0.01%. |
ADR—American Depository Receipt
ADS—American Depository Shares
Ltd.—Limited
PLC—Public Limited Company
See Notes to Financial Statements.
27
Excelsior Funds Trust
Portfolio of Investments — September 30, 2007 (Unaudited)
Mid Cap Value and Restructuring Fund — (continued)
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | | | |
Sector Diversification | | % of
Net
Assets | | | Value | |
Consumer Discretionary | | 24.87 | | | $ | 88,300,968 | |
Financial | | 21.03 | | | | 74,643,984 | |
Industrials | | 20.31 | | | | 72,081,130 | |
Energy | | 11.78 | | | | 41,813,393 | |
Materials | | 7.91 | | | | 28,080,092 | |
Information Technology | | 4.47 | | | | 15,841,948 | |
Health Care | | 3.68 | | | | 13,072,266 | |
Utilities | | 3.31 | | | | 11,750,700 | |
Consumer Staples | | 1.66 | | | | 5,883,400 | |
Real Estate | | 0.98 | | | | 3,488,719 | |
| | | | | | | |
Total Investments | | 100.00 | | | $ | 354,956,600 | |
Other Liabilities in Excess of Assets | | 0.00 | * | | | (15,811 | ) |
| | | | | | | |
Net Assets | | 100.00 | | | $ | 354,940,789 | |
| | | | | | | |
| * | | Rounds to less than 0.01%. |
See Notes to Financial Statements.
28
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Real Estate Fund
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — 94.60% | | |
| | CONSUMER DISCRETIONARY — 4.99% |
| 32,891 | | Gaylord Entertainment Co.(a) | | $ | 1,750,459 |
| 45,000 | | Starwood Hotels & Resorts Worldwide, Inc. | | | 2,733,750 |
| | | | | |
| | | | | 4,484,209 |
| | | | | |
| | FINANCIAL — 2.19% | | | |
| 57,998 | | iStar Financial, Inc. | | | 1,971,352 |
| | | | | |
| | | | | 1,971,352 |
| | | | | |
| | HEALTH CARE — 0.96% | | | |
| 21,698 | | Brookdale Senior Living, Inc. | | | 863,797 |
| | | | | |
| | | | | 863,797 |
| | | | | |
| | INDUSTRIALS — 0.56% | | | |
| 10,073 | | Alexander & Baldwin, Inc. | | | 504,960 |
| | | | | |
| | | | | 504,960 |
| | | | | |
| | REAL ESTATE — 85.90% | | | |
| 48,426 | | Alexandria Real Estate Equities, Inc. | | | 4,661,487 |
| 63,387 | | American Campus Communities, Inc. | | | 1,856,605 |
| 88,087 | | Apartment Investment & Management Co., Class A | | | 3,975,366 |
| 28,784 | | AvalonBay Communities, Inc. | | | 3,398,239 |
| 105,667 | | Corporate Office Properties Trust | | | 4,398,917 |
| 68,863 | | Developers Diversified Realty Corp. | | | 3,847,376 |
| 35,000 | | Digital Realty Trust, Inc. | | | 1,378,650 |
| 75,000 | | Douglas Emmett, Inc. | | | 1,854,750 |
| 25,636 | | Essex Property Trust, Inc. | | | 3,014,024 |
| 109,190 | | Extra Space Storage, Inc. | | | 1,680,434 |
| 10,000 | | Federal Realty Investment Trust | | | 886,000 |
| 75,000 | | Health Care REIT, Inc. | | | 3,318,000 |
| 5,000 | | Host Hotels & Resorts, Inc. | | | 112,200 |
| 105,800 | | Kimco Realty Corp. | | | 4,783,218 |
| 130,000 | | Kite Realty Group Trust | | | 2,444,000 |
| 54,694 | | LaSalle Hotel Properties | | | 2,301,524 |
| 85,491 | | Lexington Realty Trust | | | 1,710,675 |
| 28,368 | | Macerich Co. | | | 2,484,469 |
| 74,783 | | Mid-America Apartment Communities, Inc. | �� | | 3,727,933 |
| 71,243 | | Plum Creek Timber Co., Inc. | | | 3,188,837 |
| 20,473 | | Potlatch Corp. | | | 921,899 |
| 94,497 | | Prologis | | | 6,269,876 |
| | | | | | |
| Shares | | | | Value |
| | | | | | |
| COMMON STOCKS — (continued) | | |
| | | REAL ESTATE — (continued) | | | |
| | 40,000 | | Public Storage, Inc. | | $ | 3,146,000 |
| | 67,321 | | Simon Property Group, Inc. | | | 6,732,100 |
| | 19,225 | | SL Green Realty Corp. | | | 2,244,903 |
| | 77,332 | | Sun Communities, Inc. | | | 2,326,147 |
| | 10,000 | | Taubman Centers, Inc. | | | 547,500 |
| | | | | | |
| | | | | | 77,211,129 |
| | | | | | |
| | | TOTAL COMMON STOCKS
(Cost $70,195,999) | | | 85,035,447 |
| | | | | | |
| | | | | | |
Principal
Amount | | | | |
| REPURCHASE AGREEMENT — 4.62% | | |
| $ | 4,155,000 | | Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Government Obligation maturing 05/15/07, market value $4,242,375 (repurchase proceeds $4,156,264) | | | 4,155,000 |
| | | | | | |
| | | TOTAL REPURCHASE AGREEMENT
(Cost $4,155,000) | | | 4,155,000 |
| | | | | | |
| | | | | | |
TOTAL INVESTMENTS
(Cost $74,350,999)(b) | | 99.22 | % | | $ | 89,190,447 |
OTHER ASSETS IN EXCESS OF LIABILITIES | | 0.78 | | | | 701,657 |
| | | | | | |
NET ASSETS | | 100.00 | % | | $ | 89,892,104 |
| | | | | | |
| (a) | Non-income producing security. |
| (b) | Cost for federal income tax purposes is $74,350,999. |
REIT—Real Estate Investment Trust
See Notes to Financial Statements.
29
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Real Estate Fund — (continued)
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | |
Sector Diversification | | % of
Net
Assets | | Value |
Real Estate | | 85.90 | | $ | 77,211,129 |
Consumer Discretionary | | 4.99 | | | 4,484,209 |
Repurchase Agreement | | 4.62 | | | 4,155,000 |
Financial | | 2.19 | | | 1,971,352 |
Health Care | | 0.96 | | | 863,797 |
Industrials | | 0.56 | | | 504,960 |
| | | | | |
Total Investments | | 99.22 | | $ | 89,190,447 |
Other Assets in Excess of Liabilities | | 0.78 | | | 701,657 |
| | | | | |
Net Assets | | 100.00 | | $ | 89,892,104 |
| | | | | |
See Notes to Financial Statements.
30
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Small Cap Fund
| | | | | |
| Shares | | | | Value |
| | | | | |
| | | | | |
| COMMON STOCKS — 98.08% | | |
| | CONSUMER DISCRETIONARY — 12.83% |
| 1,000,000 | | Cabelas, Inc.(a) | | $ | 23,650,000 |
| 300,000 | | Columbia Sportswear Co. | | | 16,593,000 |
| 200,000 | | iRobot Corp.(a) | | | 3,976,000 |
| 460,000 | | Modine Manufacturing Co. | | | 12,245,200 |
| 780,000 | | Nautilus, Inc. | | | 6,216,600 |
| 200,000 | | Sotheby’s Holdings, Inc.,
Class A | | | 9,558,000 |
| 660,000 | | Talbots, Inc. | | | 11,880,000 |
| 400,000 | | Thor Industries, Inc. | | | 17,996,000 |
| 200,000 | | Urban Outfitters, Inc.(a) | | | 4,360,000 |
| | | | | |
| | | | | 106,474,800 |
| | | | | |
| | ENERGY — 4.60% |
| 600,000 | | Helix Energy Solutions Group, Inc.(a) | | | 25,476,000 |
| 600,000 | | TETRA Technologies, Inc.(a) | | | 12,684,000 |
| | | | | |
| | | | | 38,160,000 |
| | | | | |
| | FINANCIAL — 11.75% | | | |
| 380,000 | | GFI Group, Inc.(a) | | | 32,725,600 |
| 350,000 | | Greenhill & Co., Inc. | | | 21,367,500 |
| 360,000 | | Jefferies Group, Inc. | | | 10,018,800 |
| 640,000 | | Philadelphia Consolidated Holdings Corp.(a) | | | 26,457,600 |
| 300,000 | | Radian Group, Inc. | | | 6,984,000 |
| | | | | |
| | | | | 97,553,500 |
| | | | | |
| | HEALTH CARE — 5.38% |
| 40,000 | | Kensey Nash Corp.(a) | | | 1,044,400 |
| 600,000 | | Molina Healthcare, Inc.(a) | | | 21,762,000 |
| 880,000 | | Orthovita, Inc.(a) | | | 2,666,400 |
| 660,000 | | Pharmanet Development Group, Inc.(a) | | | 19,159,800 |
| | | | | |
| | | | | 44,632,600 |
| | | | | |
| | INDUSTRIALS — 29.26% |
| 150,000 | | EDO Corp. | | | 8,401,500 |
| 480,000 | | FLIR Systems, Inc.(a) | | | 26,587,200 |
| 620,000 | | FTI Consulting, Inc.(a) | | | 31,192,200 |
| 740,000 | | Hewitt Associates, Inc., Class A(a) | | | 25,937,000 |
| 1,000,000 | | Innovative Solutions & Support, Inc.(a) | | | 18,970,000 |
| 660,000 | | Kansas City Southern(a) | | | 21,232,200 |
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | |
| | INDUSTRIALS — (continued) |
| 1,240,000 | | MPS Group, Inc.(a) | | $ | 13,826,000 |
| 800,000 | | Quanta Services, Inc.(a) | | | 21,160,000 |
| 500,000 | | Shaw Group, Inc.(a) | | | 29,050,000 |
| 740,000 | | Simpson Manufacturing Co., Inc. | | | 23,569,000 |
| 280,000 | | Triumph Group, Inc. | | | 22,878,800 |
| | | | | |
| | | | | 242,803,900 |
| | | | | |
| | INFORMATION TECHNOLOGY — 29.57% |
| 300,000 | | CACI International, Inc., Class A(a) | | | 15,327,000 |
| 480,000 | | CommScope, Inc.(a) | | | 24,115,200 |
| 720,000 | | Forrester Research, Inc.(a) | | | 16,970,400 |
| 320,000 | | Hutchinson Technology, Inc.(a) | | | 7,872,000 |
| 2,200,000 | | Kulicke & Soffa Industries, Inc.(a) | | | 18,656,000 |
| 900,000 | | Manhattan Associates, Inc.(a) | | | 24,669,000 |
| 1,400,000 | | Palm, Inc.(a) | | | 22,778,000 |
| 840,000 | | Plantronics, Inc. | | | 23,982,000 |
| 500,000 | | Power Integrations(a) | | | 14,855,000 |
| 400,000 | | Rogers Corp.(a) | | | 16,476,000 |
| 1,000,000 | | Secure Computing Corp.(a) | | | 9,730,000 |
| 900,000 | | Technitrol, Inc. | | | 24,255,000 |
| 480,000 | | Varian Semiconductor Equipment Associates, Inc.(a) | | | 25,689,600 |
| | | | | |
| | | | | 245,375,200 |
| | | | | |
| | MATERIALS — 1.75% |
| 340,000 | | Cabot Microelectronics Corp.(a) | | | 14,535,000 |
| | | | | |
| | REAL ESTATE — 1.30% |
| 320,000 | | St. Joe Co. | | | 10,755,200 |
| | | | | |
| | UTILITIES — 1.64% |
| 600,000 | | Aqua America, Inc. | | | 13,608,000 |
| | | | | |
| | TOTAL COMMON STOCKS (Cost $586,014,469) | | | 813,898,200 |
| | | | | |
See Notes to Financial Statements.
31
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Small Cap Fund — (continued)
| | | | | | |
Principal
Amount | | | | Value |
| | | REPURCHASE AGREEMENT — 0.27% |
| $ | 2,218,000 | | Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 02/15/36, market value $2,264,488 (repurchase proceeds $2,218,675) | | $ | 2,218,000 |
| | | | | | |
| | | TOTAL REPURCHASE AGREEMENT
(Cost $2,218,000) | | | 2,218,000 |
| | | | | | |
| | | | | | |
TOTAL INVESTMENTS
(Cost $588,232,469)(b) | | 98.35 | % | | $ | 816,116,200 |
OTHER ASSETS IN EXCESS OF LIABILITIES | | 1.65 | | | | 13,737,915 |
| | | | | | |
NET ASSETS | | 100.00 | % | | $ | 829,854,115 |
| | | | | | |
| (a) | Non-income producing security. |
| (b) | Cost for federal income tax purposes is $588,232,469. |
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | |
Sector Diversification | | % of
Net
Assets | | Value |
Information Technology | | 29.57 | | $ | 245,375,200 |
Industrials | | 29.26 | | | 242,803,900 |
Consumer Discretionary | | 12.83 | | | 106,474,800 |
Financial | | 11.75 | | | 97,553,500 |
Health Care | | 5.38 | | | 44,632,600 |
Energy | | 4.60 | | | 38,160,000 |
Materials | | 1.75 | | | 14,535,000 |
Utilities | | 1.64 | | | 13,608,000 |
Real Estate | | 1.30 | | | 10,755,200 |
Repurchase Agreement | | 0.27 | | | 2,218,000 |
| | | | | |
Total Investments | | 98.35 | | $ | 816,116,200 |
Other Assets in Excess of Liabilities | | 1.65 | | | 13,737,915 |
| | | | | |
Net Assets | | 100.00 | | $ | 829,854,115 |
| | | | | |
See Notes to Financial Statements.
32
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Value and Restructuring Fund
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — 95.57% | | |
| | CONSUMER DISCRETIONARY — 10.36% |
| 2,625,000 | | Black & Decker Corp. | | $ | 218,662,500 |
| 2,850,000 | | CBS Corp., Class B | | | 89,775,000 |
| 3,500,000 | | Centex Corp. | | | 92,995,000 |
| 1,800,000 | | EchoStar Communications, Inc.(a) | | | 84,258,000 |
| 1,000,000 | | Harman International Industries, Inc. | | | 86,520,000 |
| 1,350,000 | | J.C. Penney Co., Inc. | | | 85,549,500 |
| 3,200,000 | | Leggett & Platt, Inc. | | | 61,312,000 |
| 3,000,000 | | Newell Rubbermaid, Inc. | | | 86,460,000 |
| 3,300,000 | | TJX Cos., Inc. | | | 95,931,000 |
| 2,700,000 | | Zale Corp.(a) | | | 62,478,000 |
| | | | | |
| | | | | 963,941,000 |
| | | | | |
| | CONSUMER STAPLES — 3.94% |
| 2,550,000 | | Avon Products, Inc. | | | 95,701,500 |
| 1,000,000 | | ConAgra Foods, Inc. | | | 26,130,000 |
| 2,500,000 | | Dean Foods Co. | | | 63,950,000 |
| 2,200,000 | | Loews Corp. — Carolina Group | | | 180,906,000 |
| | | | | |
| | | | | 366,687,500 |
| | | | | |
| | ENERGY — 19.49% |
| 2,400,000 | | Anadarko Petroleum Corp. | | | 129,000,000 |
| 2,900,000 | | ConocoPhillips | | | 254,533,000 |
| 4,600,000 | | CONSOL Energy, Inc. | | | 214,360,000 |
| 2,600,000 | | Devon Energy Corp. | | | 216,320,000 |
| 6,100,000 | | El Paso Corp. | | | 103,517,000 |
| 3,850,000 | | Hercules Offshore, Inc.(a) | | | 100,523,500 |
| 1,500,000 | | Murphy Oil Corp. | | | 104,835,000 |
| 2,150,000 | | Noble Energy, Inc. | | | 150,586,000 |
| 4,000,000 | | Petrobras ADR | | | 302,000,000 |
| 4,300,000 | | PetroHawk Energy Corp.(a) | | | 70,606,000 |
| 944,900 | | Pinnacle Gas Resources, Inc.(a)(b) | | | 4,422,132 |
| 2,900,000 | | Rossetta Resources, Inc.(a)(b) | | | 53,186,000 |
| 2,000,000 | | Spectra Energy Corp. | | | 48,960,000 |
| 2,500,000 | | W&T Offshore, Inc. | | | 60,950,000 |
| | | | | |
| | | | | 1,813,798,632 |
| | | | | |
| | FINANCIAL — 21.53% |
| 2,800,000 | | Ace Ltd. | | | 169,596,000 |
| 3,300,000 | | AerCap Holdings NV ADR(a) | | | 82,137,000 |
| 1,400,000 | | Ambac Financial Group, Inc. | | | 88,074,000 |
| 3,300,000 | | Apollo Investment Corp.(c) | | | 68,640,000 |
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | |
| | FINANCIAL — (continued) |
| 1,500,000 | | Capital One Financial Corp. | | $ | 99,645,000 |
| 2,711,260 | | CastlePoint Holdings Ltd. | | | 31,179,490 |
| 2,200,000 | | CIT Group, Inc. | | | 88,440,000 |
| 2,600,000 | | Citigroup, Inc. | | | 121,342,005 |
| 1,050,000 | | Discover Financial Services | | | 21,840,000 |
| 1,300,000 | | Freddie Mac | | | 76,713,000 |
| 1,800,000 | | Genworth Financial, Inc. | | | 55,314,000 |
| 4,100,000 | | Invesco PLC ADR | | | 111,930,000 |
| 6,188,900 | | JHFS Participacoes S.A. ADR(a)(b) | | | 32,861,821 |
| 2,350,000 | | JP Morgan Chase & Co. | | | 107,677,000 |
| 2,050,000 | | Lehman Brothers Holdings, Inc. | | | 126,546,500 |
| 2,850,000 | | Loews Corp. | | | 137,797,500 |
| 2,961,200 | | MCG Capital Corp. | | | 42,611,668 |
| 1,950,000 | | MetLife, Inc. | | | 135,973,500 |
| 2,350,000 | | Morgan Stanley | | | 148,050,000 |
| 2,300,000 | | People’s United Financial, Inc. | | | 39,744,000 |
| 1,450,000 | | PNC Financial Services Group, Inc. | | | 98,745,000 |
| 4,265,364 | | Primus Guaranty Ltd.(a) | | | 44,871,629 |
| 2,100,000 | | Washington Mutual, Inc. | | | 74,151,000 |
| | | | | |
| | | | | 2,003,880,113 |
| | | | | |
| | HEALTH CARE — 3.14% |
| 1,900,000 | | AmerisourceBergen Corp. | | | 86,127,000 |
| 2,031,818 | | Baxter International, Inc. | | | 114,350,717 |
| 2,000,000 | | Bristol-Myers Squibb Co. | | | 57,640,000 |
| 825,000 | | Covidien Ltd. | | | 34,237,493 |
| | | | | |
| | | | | 292,355,210 |
| | | | | |
| | INDUSTRIALS — 13.44% |
| 708,544 | | Aecom Technology Corp.(a) | | | 24,749,442 |
| 2,900,000 | | AGCO Corp.(a) | | | 147,233,000 |
| 1,050,181 | | Arlington Tankers | | | 25,865,958 |
| 2,200,000 | | Copa Holdings S.A., Class A | | | 88,110,000 |
| 2,750,000 | | Empresa Brasileira de Aeronautica S.A. ADR | | | 120,780,000 |
| 3,650,000 | | Gol Linhas Aereas Inteligentes S.A. ADR | | | 87,600,000 |
| 1,000,000 | | Omega Navigation Enterprises, Inc., Class A ADR | | | 19,930,000 |
| 1,100,000 | | Rockwell Automation, Inc. | | | 76,461,000 |
| 3,300,000 | | RSC Holdings, Inc.(a) | | | 54,120,000 |
See Notes to Financial Statements.
33
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Value and Restructuring Fund — (continued)
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | |
| | INDUSTRIALS — (continued) |
| 2,000,000 | | Ryder Systems, Inc. | | $ | 98,000,000 |
| 825,000 | | Tyco International Ltd. | | | 36,580,492 |
| 1,750,000 | | Union Pacific Corp. | | | 197,855,000 |
| 4,250,000 | | United Rentals, Inc.(a) | | | 136,722,500 |
| 1,700,000 | | United Technologies Corp. | | | 136,816,000 |
| | | | | |
| | | | | 1,250,823,392 |
| | | | | |
| | INFORMATION TECHNOLOGY — 6.16% |
| 4,300,000 | | Harris Corp. | | | 248,497,000 |
| 975,000 | | International Business Machines Corp. | | | 114,855,000 |
| 3,850,000 | | Nokia Oyj ADR | | | 146,030,500 |
| 1,200,000 | | Plantronics, Inc. | | | 34,260,000 |
| 825,000 | | Tyco Electronics Ltd. | | | 29,229,744 |
| | | | | |
| | | | | 572,872,244 |
| | | | | |
| | MATERIALS — 11.42% |
| 3,650,000 | | Alpha Natural Resources, Inc.(a) | | | 84,789,500 |
| 4,050,000 | | Celanese Corp., Class A | | | 157,869,000 |
| 1,300,000 | | Eagle Materials, Inc. | | | 46,462,000 |
| 1,625,000 | | Foundation Coal Holdings, Inc. | | | 63,700,000 |
| 1,000,000 | | Freeport-McMoRan Copper & Gold, Inc. ADR | | | 104,890,000 |
| 1,485,000 | | Horsehead Holding Corp.(a)(b) | | | 33,293,700 |
| 1,461,198 | | International Coal Group, Inc.(a) | | | 6,487,719 |
| 1,550,000 | | PPG Industries, Inc. | | | 117,102,500 |
| 1,700,000 | | Schnitzer Steel Industries, Inc. | | | 124,593,000 |
| 4,200,000 | | Smurfit-Stone Container Corp.(a) | | | 49,056,000 |
| 1,800,000 | | Southern Copper Corp. | | | 222,894,000 |
| 2,250,000 | | Sterlite Industries (India) Ltd. ADS(a) | | | 41,625,000 |
| 1,084,319 | | Tronox, Inc. | | | 10,084,167 |
| | | | | |
| | | | | 1,062,846,586 |
| | | | | |
| | REAL ESTATE — 1.87% |
| 4,120,000 | | Diamondrock Hospitality Co.(b) | | | 71,729,200 |
| 1,000,000 | | FBR Capital Markets Corp.(a)(b) | | | 12,880,000 |
| 2,450,000 | | Host Marriot Corp. | | | 54,978,000 |
| 3,000,000 | | Peoples Choice Financial Corp.(a)(b)(d)(e) | | | 0 |
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | |
| | REAL ESTATE — (continued) |
| 489,579 | | Ventas, Inc. | | $ | 20,268,570 |
| 2,140,500 | | Vintage Wine Trust, Inc.(b) | | | 13,913,250 |
| | | | | |
| | | | | 173,769,020 |
| | | | | |
| | TELECOMMUNICATION SERVICES — 4.22% |
| 5,225,000 | | America Movil S.A. de C.V., Series L ADR(f) | | | 334,400,000 |
| 1,842,000 | | Datapath, Inc.(a)(b) | | | 9,210,000 |
| 3,500,000 | | Windstream Corp. | | | 49,420,000 |
| | | | | |
| | | | | 393,030,000 |
| | | | | |
| | TOTAL COMMON STOCKS (Cost $5,752,339,067) | | | 8,894,003,697 |
| | | | | |
| FOREIGN COMMON STOCKS — 3.63% | | |
| | BRAZIL — 0.03% |
| 500,000 | | JHSF Participacoes S.A.(a) | | | 2,665,030 |
| | | | | |
| | GERMANY — 0.87% |
| 1,700,000 | | Lanxess AG | | | 80,619,189 |
| | | | | |
| | ITALY — 0.60% |
| 5,000,000 | | Enel S.p.A. | | | 56,422,485 |
| | | | | |
| | MEXICO — 0.85% |
| 11,000,000 | | Grupo Mexico S.A.B. de C.V., Series B | | | 78,949,293 |
| | | | | |
| | SWITZERLAND — 1.28% |
| 1,350,000 | | Petroplus Holdings AG(a) | | | 119,351,404 |
| | | | | |
| | TOTAL FOREIGN
COMMON STOCKS
(Cost $238,048,710) | | | 338,007,401 |
| | | | | |
| CONVERTIBLE PREFERRED STOCKS — 0.27% |
| | MATERIALS — 0.27% |
| 500,000 | | Celanese Corp., Preferred Exchange, 4.25% | | | 25,070,000 |
| | | | | |
| | TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $11,789,117) | | | 25,070,000 |
| | | | | |
See Notes to Financial Statements.
34
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Value and Restructuring Fund — (continued)
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
| REPURCHASE AGREEMENT — 0.74% | | |
| $ | 68,863,000 | | Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 05/15/17, market value $70,242,188 (repurchase proceeds $68,883,946) | | $ | 68,863,000 |
| | | | | | |
| | | TOTAL REPURCHASE AGREEMENT
(Cost $68,863,000) | | | 68,863,000 |
| | | | | | |
| | | | | | | |
TOTAL INVESTMENTS
(Cost $6,071,039,894)(g) | | 100.21 | % | | $ | 9,325,944,098 | |
OTHER LIABILITIES IN EXCESS OF ASSETS | | (0.21 | ) | | | (19,894,286 | ) |
| | | | | | | |
NET ASSETS | | 100.00 | % | | $ | 9,306,049,812 | |
| | | | | | | |
At September 30, 2007 the Fund had entered into the following written option contracts:
| | | | | | |
| Contracts | | | | Value | |
| | | | | | |
| CALL OPTIONS WRITTEN: | | | |
| (5,400) | | America Movil S.A. de C.V., Expires 11/17/07
strike price 60
(Premiums received
$2,113,212) | | $ | (3,186,000 | ) |
| | | | | | |
| (a) | Non-income producing security. |
| (b) | Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2007, these securities, which are not illiquid, amounted to $231,496,103, which represents 2.49% of net assets. |
| (c) | Closed-end Management Investment Company. |
| (d) | Security has no value. |
| (e) | Represents fair value as determined in good faith under procedures approved by the Board of Directors. |
| (f) | All or a portion of this security is pledged as collateral for written option contracts. |
| (g) | Cost for federal income tax purposes is $6,071,039,894. |
ADR—American Depository Receipt
ADS—American Depository Shares
Ltd.—Limited
PLC—Public Limited Company
For the six months ended September 30, 2007, transactions in written option contracts were as follows:
| | | | | | | |
| | | Number of
contracts | | | Premium
received | |
Options outstanding at
March 31, 2007 | | (23,000 | ) | | $ | 6,678,258 | |
Options written | | (22,400 | ) | | | 9,630,069 | |
Options terminated in closing purchase transactions | | 28,183 | | | | (9,791,478 | ) |
Options exercised | | 6,817 | | | | (3,909,273 | ) |
Options expired | | 5,000 | | | | (494,364 | ) |
| | | | | | | |
Options outstanding at September 30, 2007 | | (5,400 | ) | | $ | 2,113,212 | |
| | | | | | | |
See Notes to Financial Statements.
35
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Value and Restructuring Fund — (continued)
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | | | |
Sector Diversification | | % of
Net
Assets | | | Value | |
Financial | | 21.56 | | | $ | 2,006,545,143 | |
Energy | | 20.77 | | | | 1,933,150,036 | |
Industrials | | 14.31 | | | | 1,331,442,581 | |
Materials | | 12.54 | | | | 1,166,865,879 | |
Consumer Discretionary | | 10.36 | | | | 963,941,000 | |
Information Technology | | 6.16 | | | | 572,872,244 | |
Consumer Staples | | 4.54 | | | | 423,109,985 | |
Telecommunication Services | | 4.22 | | | | 393,030,000 | |
Health Care | | 3.14 | | | | 292,355,210 | |
Real Estate | | 1.87 | | | | 173,769,020 | |
Repurchase Agreement | | 0.74 | | | | 68,863,000 | |
| | | | | | | |
Total Investments | | 100.21 | | | $ | 9,325,944,098 | |
Other Liabilities in Excess of Assets | | (0.21 | ) | | | (19,894,286 | ) |
| | | | | | | |
Net Assets | | 100.00 | | | $ | 9,306,049,812 | |
| | | | | | | |
See Notes to Financial Statements.
36
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Emerging Markets Fund
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — 91.84% | | |
| | ARGENTINA — 1.66% | | | |
| 931,800 | | Telecom Argentina SA, ADR(a) | | $ | 22,875,690 |
| | | | | |
| | BRAZIL — 7.46% | | | |
| 862,800 | | Companhia Vale do Rio Doce SA | | | 29,160,098 |
| 516,832 | | Diagnosticos da America SA | | | 11,842,304 |
| 210,000 | | Gafisa SA, ADR(a) | | | 7,085,400 |
| 398,800 | | Gol Linhas Aereas Inteligentes SA, ADR | | | 9,571,200 |
| 1,467,400 | | Industrias Romi SA | | | 16,915,528 |
| 215,400 | | Uniao de Bancos Brasileiros SA, GDR | | | 28,335,870 |
| | | | | |
| | | | | 102,910,400 |
| | | | | |
| | CHILE — 1.56% | | | |
| 424,200 | | Banco Santander Chile SA, ADR | | | 21,451,794 |
| | | | | |
| | CHINA — 15.08% | | | |
| 11,637,000 | | Bank of Communications Ltd., Class H (Hong Kong) | | | 14,033,245 |
| 27,271,300 | | Chaoda Modern Agriculture Holdings Ltd. (Hong Kong) | | | 22,010,247 |
| 42,614,000 | | China Construction Bank Corp, Class H (Hong Kong) | | | 38,860,146 |
| 620,797 | | China Mobile Ltd., ADR (Hong Kong) | | | 50,930,186 |
| 20,961,000 | | China Petroleum & Chemical Corp., Class H (Hong Kong) | | | 25,729,037 |
| 18,267,722 | | Far East Consortium International Ltd. (Hong Kong) | | | 8,203,952 |
| 2,647,000 | | Industrial & Commercial Bank of China (Hong Kong) | | | 1,845,595 |
| 15,539,400 | | People’s Food Holdings Ltd. | | | 14,967,910 |
| 131,700 | | PetroChina Co., Ltd., ADR | | | 24,378,987 |
| 8,447,000 | | Texwinca Holdings Ltd. (Hong Kong) | | | 7,010,204 |
| | | | | |
| | | | | 207,969,509 |
| | | | | |
| | COLUMBIA — 0.99% | | | |
| 392,800 | | BanColombia SA, ADR | | | 13,610,520 |
| | | | | |
| | INDIA — 4.43% | | | |
| 339,350 | | ICICI Bank Ltd., ADR | | | 17,890,532 |
| 222,900 | | State Bank of India, GDR(b) | | | 24,964,800 |
| 501,781 | | Suzlon Energy Ltd. | | | 18,207,245 |
| | | | | |
| | | | | 61,062,577 |
| | | | | |
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | | |
| | INDONESIA — 2.45% | | | |
| 14,051,700 | | PT Indocement Tunggal Prakarsa Tbk | | $ | 9,365,883 |
| 20,227,700 | | PT Telekomunikasi Indonesia Tbk, Series B | | | 24,461,478 |
| | | | | |
| | | | | 33,827,361 |
| | | | | |
| | MALAYSIA — 4.88% | | | |
| 9,413,000 | | Genting Berhad | | | 22,206,453 |
| 6,454,950 | | Public Bank Berhad, Foreign Market Shares | | | 19,862,702 |
| 4,404,300 | | Telekom Malaysia Berhad | | | 12,718,507 |
| 4,517,200 | | Tenaga Nasional Berhad | | | 12,508,446 |
| | | | | |
| | | | | 67,296,108 |
| | | | | |
| | MEXICO — 7.58% | | | |
| 324,700 | | America Movil SAB de C.V., Series L, ADR | | | 20,780,800 |
| 366,144 | | Cemex SAB de C.V., ADR | | | 10,955,028 |
| 262,600 | | Grupo Aeroportuario del Pacifico SA de C.V., ADR | | | 14,337,960 |
| 718,155 | | Grupo Elektra SA de C.V. | | | 14,648,854 |
| 2,124,100 | | Grupo Televisa SA | | | 10,205,483 |
| 331,580 | | Telefonos de Mexico SAB de C.V., Series L, ADR | | | 10,899,035 |
| 2,903,429 | | Urbi Desarrollos Urbanos SA de C.V.(a) | | | 10,432,531 |
| 3,330,082 | | Wal-Mart de Mexico SAB de C.V., Series V | | | 12,209,144 |
| | | | | |
| | | | | 104,468,835 |
| | | | | |
| | RUSSIA — 6.50% | | | |
| 297,500 | | OAO Gazprom, ADR | | | 13,119,750 |
| 210,200 | | Lukoil Co., ADR | | | 17,467,620 |
| 82,700 | | MMC Norilsk Nickel, ADR | | | 22,494,400 |
| 315,800 | | Mobile TeleSystems, OJSC, ADR | | | 21,888,098 |
| 464,000 | | RBC Information Systems, ADR(a) | | | 14,606,720 |
| | | | | |
| | | | | 89,576,588 |
| | | | | |
| | SOUTH AFRICA — 6.43% | | | |
| 2,911,042 | | African Bank Investments Ltd. | | | 13,250,085 |
| 704,600 | | Gold Fields Ltd., ADR | | | 12,746,214 |
| 43,478 | | Mondi Ltd. | | | 431,669 |
| 1,522,224 | | MTN Group Ltd. | | | 23,078,233 |
See Notes to Financial Statements.
37
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Emerging Markets Fund — (continued)
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | | |
| | SOUTH AFRICA — (continued) | | | |
| 405,500 | | Sasol Ltd. | | $ | 17,411,073 |
| 861,916 | | Telkom South Africa Ltd. | | | 21,712,749 |
| | | | | |
| | | | | 88,630,023 |
| | | | | |
| | SOUTH KOREA — 16.17% | | | |
| 337,802 | | Hana Financial Group, Inc. | | | 15,890,702 |
| 137,500 | | Kookmin Bank | | | 11,340,966 |
| 650,638 | | KT Corp., ADR | | | 16,298,482 |
| 328,470 | | LS Cable Ltd. | | | 40,743,999 |
| 187,914 | | GS Home Shopping, Inc. | | | 16,563,883 |
| 14,231 | | Lotte Chilsung Beverage Co., Ltd. | | | 21,659,083 |
| 166,329 | | NCSoft Corp.(a) | | | 14,726,302 |
| 119,757 | | Pacific Corp. | | | 24,927,139 |
| 67,879 | | Samsung Electronics Co., Ltd. | | | 42,474,502 |
| 614,685 | | SK Telecom Co., Ltd., ADR | | | 18,256,145 |
| | | | | |
| | | | | 222,881,203 |
| | | | | |
| | TAIWAN — 9.73% | | | |
| 899,690 | | Chunghwa Telecom Co., Ltd., ADR | | | 16,626,271 |
| 3,737,365 | | HON HAI Precision Industry Co., Ltd. | | | 28,151,280 |
| 6,673,453 | | President Chain Store Corp. | | | 18,769,871 |
| 12,369,406 | | Synnex Technology International Corp. | | | 34,785,278 |
| 234,872 | | Taiwan Semiconductor Manufacturing Co., Ltd. | | | 452,745 |
| 1,218,324 | | Taiwan Semiconductor Manufacturing Co., Ltd., ADR | | | 12,329,439 |
| 12,814,552 | | Wistron Corp. | | | 23,098,927 |
| | | | | |
| | | | | 134,213,811 |
| | | | | |
| | THAILAND — 1.09% | | | |
| 5,867,900 | | Advanced Info Service Public Co., Ltd., Foreign Shares | | | 15,042,902 |
| | | | | |
| | TURKEY — 2.37% | | | |
| 1,090,262 | | Akbank T.A.S., ADR(b) | | | 16,561,407 |
| 1,112,582 | | Arcelik A.S. | | | 9,018,180 |
| 2,081,704 | | Turkiye Vakiflar Bankasi T.A.O., Class D | | | 7,082,093 |
| | | | | |
| | | | | 32,661,680 |
| | | | | |
| | | | | | |
| Shares | | | | Value |
| | | | | | |
| | COMMON STOCKS — (continued) | | | |
| | | UNITED KINGDOM — 3.46% | | | |
| | 395,650 | | Anglo American PLC (South Africa Shares) | | $ | 26,260,213 |
| | 712,500 | | Kazakhmys PLC | | | 20,394,325 |
| | 108,695 | | Mondi PLC | | | 1,025,529 |
| | | | | | |
| | | | | | 47,680,067 |
| | | | | | |
| | | TOTAL COMMON STOCKS (Cost $714,270,319) | | | 1,266,159,068 |
| | | | | | |
| PREFERRED STOCKS — 4.30% | | |
| | | BRAZIL — 3.59% | | | |
| | 947,262 | | Companhia Energetica de Minas Gerais | | | 20,154,511 |
| | 906,800 | | Petroleo Brasileiro SA | | | 29,286,721 |
| | | | | | |
| | | | | | 49,441,232 |
| | | | | | |
| | | SOUTH KOREA — 0.71% | | | |
| | 246,300 | | Hyundai Motor Co., Ltd. | | | 9,860,492 |
| | | | | | |
| | | | | | 9,860,492 |
| | | | | | |
| | | TOTAL PREFERRED STOCKS (Cost $23,369,005) | | | 59,301,724 |
| | | | | | |
| REGISTERED INVESTMENT COMPANY — 0.95% | | |
| | 240,400 | | India Fund, Inc. | | | 13,053,720 |
| | | | | | |
| | | TOTAL REGISTERED INVESTMENT COMPANY (Cost $5,731,063) | | | 13,053,720 |
| | | | | | |
| | |
Principal
Amount | | | | |
| REPURCHASE AGREEMENT — 2.54% | | |
| $ | 35,043,000 | | Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 05/15/17, market value $35,746,313 (repurchase proceeds $35,053,659) | | | 35,043,000 |
| | | | | | |
| | | TOTAL REPURCHASE AGREEMENT
(Cost $35,043,000) | | | 35,043,000 |
| | | | | | |
| | | | | | |
TOTAL INVESTMENTS
(Cost $778,413,387)(c) | | 99.63 | % | | $ | 1,373,557,512 |
OTHER ASSETS IN EXCESS OF LIABILITIES | | 0.37 | | | | 5,154,025 |
| | | | | | |
NET ASSETS | | 100.00 | % | | $ | 1,378,711,537 |
| | | | | | |
See Notes to Financial Statements.
38
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Emerging Markets Fund — (continued)
| (a) | Non-income producing security. |
| (b) | Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2007, these securities, which are not illiquid, amounted to $41,526,207, which represents 3.01% of net assets. |
| (c) | Cost for federal income tax purposes is $778,413,387. |
ADR—American Depository Receipt
GDR—Global Depository Receipt
Ltd.—Limited
PLC—Public Limited Company
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | |
Sector Diversification | | % of
Net
Assets | | Value |
Telecommunication Services | | 19.99 | | $ | 275,568,577 |
Financial | | 18.36 | | | 253,184,409 |
Information Technology | | 11.32 | | | 156,018,473 |
Materials | | 9.63 | | | 132,833,358 |
Energy | | 9.24 | | | 127,393,188 |
Consumer Discretionary | | 8.82 | | | 121,638,201 |
Consumer Staples | | 8.31 | | | 114,543,394 |
Industrials | | 7.24 | | | 99,775,932 |
Repurchase Agreement | | 2.54 | | | 35,043,000 |
Utilities | | 2.37 | | | 32,662,956 |
Registered Investment Company | | 0.95 | | | 13,053,720 |
Health Care | | 0.86 | | | 11,842,304 |
| | | | | |
Total Investments | | 99.63 | | $ | 1,373,557,512 |
Other Assets in Excess of Liabilities | | 0.37 | | | 5,154,025 |
| | | | | |
Net Assets | | 100.00 | | $ | 1,378,711,537 |
| | | | | |
See Notes to Financial Statements.
39
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
International Fund
| | | | | |
| Shares | | | | Value |
| | | �� | | |
| COMMON STOCKS — 95.47% | | |
| | AUSTRALIA — 4.26% | | | |
| 172,500 | | CSL Ltd. | | $ | 16,367,274 |
| 151,213 | | Rio Tinto Ltd. | | | 14,450,613 |
| | | | | |
| | | | | 30,817,887 |
| | | | | |
| | BELGIUM — 1.50% | | | |
| 45,400 | | Umicore | | | 10,831,652 |
| | | | | |
| | CANADA — 2.36% | | | |
| 186,100 | | Canadian National Railway Co. | | | 10,619,852 |
| 162,600 | | Gildan Activewear, Inc.(a) | | | 6,439,264 |
| | | | | |
| | | | | 17,059,116 |
| | | | | |
| | CHINA — 4.87% | | | |
| 10,378,000 | | Chaoda Modern Agriculture Holdings Ltd. (Hong Kong) | | | 8,375,925 |
| 4,754,000 | | Dongfeng Motor Group Co., Ltd., Class H | | | 4,151,531 |
| 59,400 | | PetroChina Co., Ltd., ADR | | | 10,995,534 |
| 47,000 | | Sino-Ocean Land Holdings Ltd.(a) | | | 66,505 |
| 690,000 | | Sun Hung Kai Properties Ltd. (Hong Kong) | | | 11,607,677 |
| | | | | |
| | | | | 35,197,172 |
| | | | | |
| | FINLAND — 4.44% | | | |
| 259,400 | | Fortum Oyj | | | 9,516,690 |
| 391,100 | | Nokia Oyj | | | 14,839,723 |
| 347,100 | | Tietoenator Oyj | | | 7,785,630 |
| | | | | |
| | | | | 32,142,043 |
| | | | | |
| | FRANCE — 7.34% | | | |
| 218,728 | | AXA SA | | | 9,795,588 |
| 69,950 | | BNP Paribas | | | 7,655,035 |
| 125,056 | | Carrefour SA | | | 8,754,107 |
| 34,034 | | Compagnie Generale de Geophysique — Veritas(a) | | | 11,068,536 |
| 73,000 | | Peugeot SA | | | 6,035,879 |
| 120,756 | | Total SA | | | 9,785,250 |
| | | | | |
| | | | | 53,094,395 |
| | | | | |
| | GERMANY — 6.57% | | | |
| 164,100 | | Adidas AG | | | 10,758,348 |
| 140,200 | | Bayerische Motoren Werke AG | | | 9,026,673 |
| 320,600 | | Rhoen-Klinikum AG | | | 10,255,020 |
| 148,200 | | SGL Carbon AG(a) | | | 8,474,481 |
| 401,500 | | United Internet AG, Registered Shares | | | 9,026,250 |
| | | | | |
| | | | | 47,540,772 |
| | | | | |
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | |
| | GREECE — 1.12% | | | |
| 369,500 | | Greek Postal Savings Bank | | $ | 8,099,030 |
| | | | | |
| | INDONESIA — 1.31% | | | |
| 7,838,100 | | PT Telekomunikasi Indonesia Tbk, Series B | | | 9,478,661 |
| | | | | |
| | IRELAND — 1.14% | | | |
| 443,137 | | Bank of Ireland | | | 8,260,131 |
| | | | | |
| | ITALY — 2.29% | | | |
| 249,890 | | ENI S.p.A | | | 9,227,877 |
| 280,336 | | Permasteelisa S.p.A | | | 7,318,032 |
| | | | | |
| | | | | 16,545,909 |
| | | | | |
| | JAPAN — 19.75% | | | |
| 179,000 | | Canon, Inc. | | | 9,713,497 |
| 428,963 | | Chiyoda Corp. | | | 7,688,518 |
| 340,200 | | Don Quijote Co., Ltd. | | | 6,997,099 |
| 104,500 | | FANUC Ltd. | | | 10,608,684 |
| 181,500 | | FUJIFILM Holdings Corp. | | | 8,338,856 |
| 1,130,700 | | Fukuoka Financial Group, Inc. | | | 6,591,540 |
| 662,300 | | Itochu Corp. | | | 7,995,531 |
| 700 | | Japan Tobacco, Inc. | | | 3,838,981 |
| 32,400 | | Keyence Corp. | | | 7,170,472 |
| 103,600 | | Kyocera Corp. | | | 9,660,294 |
| 640,000 | | Mitsubishi UFJ Financial Group, Inc.(b) | | | 5,811,200 |
| 276,000 | | Nikon Corp. | | | 9,432,534 |
| 17,700 | | Nintendo Co., Ltd. | | | 9,138,583 |
| 4,500 | | NTT DoCoMo, Inc. | | | 6,396,491 |
| 113,000 | | Shin-Etsu Chemical Co., Ltd. | | | 7,774,339 |
| 1,027,000 | | Sumitomo Trust & Banking Co., Ltd. | | | 7,732,390 |
| 160,000 | | Takeda Pharmaceutical Co., Ltd. | | | 11,220,950 |
| 68,300 | | Yamada Denki Co., Ltd. | | | 6,726,437 |
| | | | | |
| | | | | 142,836,396 |
| | | | | |
| | MALAYSIA — 0.55% | | | |
| 1,449,300 | | Tenaga Nasional Berhad | | | 4,013,214 |
| | | | | |
| | MEXICO — 2.42% | | | |
| 153,100 | | America Movil SAB de C.V., Series L, ADR | | | 9,798,400 |
| 256,524 | | Cemex SAB de C.V., ADR | | | 7,675,198 |
| | | | | |
| | | | | 17,473,598 |
| | | | | |
See Notes to Financial Statements.
40
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
International Fund — (continued)
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | |
| | NETHERLANDS — 0.70% | | | |
| 94,154 | | Randstad Holding NV | | $ | 5,096,762 |
| | | | | |
| | NORWAY — 3.11% | | | |
| 444,200 | | Tandberg ASA | | | 10,663,073 |
| 591,800 | | Telenor ASA(a) | | | 11,815,044 |
| | | | | |
| | | | | 22,478,117 |
| | | | | |
| | SINGAPORE — 1.51% | | | |
| 752,000 | | DBS Group Holdings Ltd. | | | 10,895,672 |
| | | | | |
| | SPAIN — 3.11% | | | |
| 555,300 | | Banco Santander SA | | | 10,814,917 |
| 418,146 | | Telefonica SA | | | 11,682,251 |
| | | | | |
| | | | | 22,497,168 |
| | | | | |
| | SWEDEN — 2.08% | | | |
| 102,800 | | SSAB Svenskt Stal AB, Series A | | | 3,788,737 |
| 606,300 | | Svenska Cellulosa AB, B Shares | | | 11,278,459 |
| | | | | |
| | | | | 15,067,196 |
| | | | | |
| | SWITZERLAND — 5.41% | | | |
| 68,300 | | Credit Suisse Group, Registered Shares | | | 4,539,486 |
| 252,400 | | Micronas Semiconductor Holdings AG, Registered Shares(a) | | | 3,318,130 |
| 11,437 | | Rieter Holdings AG, Registered Shares | | | 6,204,464 |
| 49,310 | | Roche Holding AG, Genusschein Shares | | | 8,928,662 |
| 80,000 | | Synthes, Inc. | | | 8,952,204 |
| 133,000 | | UBS AG, Registered Shares | | | 7,145,778 |
| | | | | |
| | | | | 39,088,724 |
| | | | | |
| | TAIWAN — 2.92% | | | |
| 1,563,889 | | HON HAI Precision Industry Co., Ltd. | | | 11,779,818 |
| 920,989 | | Taiwan Semiconductor Manufacturing Co., Ltd., ADR | | | 9,320,409 |
| | | | | |
| | | | | 21,100,227 |
| | | | | |
| | THAILAND — 1.07% | | | |
| 3,226,800 | | Kasikornbank Public Co., Ltd. (Foreign Shares) | | | 7,751,909 |
| | | | | |
| | TURKEY — 0.40% | | | |
| 352,936 | | Arcelik A.S. | | | 2,860,769 |
| | | | | |
| | UNITED KINGDOM — 15.24% | | | |
| 692,600 | | BG Group PLC | | | 11,965,547 |
| 219,700 | | BHP Billiton PLC | | | 7,859,610 |
| | | | | | |
| Shares | | | | Value |
| | | | | | |
| COMMON STOCKS — (continued) | | |
| | | UNITED KINGDOM — (continued) |
| | 804,700 | | Cadbury Schweppes PLC | | $ | 9,358,799 |
| | 317,737 | | GlaxoSmithKline PLC | | | 8,427,366 |
| | 488,600 | | HSBC Holdings PLC | | | 9,023,223 |
| | 671,500 | | Paragon Group Companies PLC | | | 4,116,601 |
| | 174,357 | | Reckitt Benckiser PLC | | | 10,221,726 |
| | 793,368 | | Reed Elsevier PLC | | | 10,029,592 |
| | 743,454 | | Royal Bank of Scotland Group PLC | | | 8,021,748 |
| | 467,600 | | Sage Group PLC | | | 2,380,113 |
| | 1,182,879 | | Serco Group PLC | | | 10,007,311 |
| | 357,000 | | Shire PLC | | | 8,750,464 |
| | 1,748,652 | | WM Morrison Supermarkets PLC | | | 10,092,805 |
| | | | | | |
| | | | | | 110,254,905 |
| | | | | | |
| | | TOTAL COMMON STOCKS (Cost $511,621,226) | | | 690,481,425 |
| | | | | | |
| REGISTERED INVESTMENT COMPANY — 1.99% |
| | 174,600 | | iShares MSCI EAFE Index Fund | | | 14,414,976 |
| | | | | | |
| | | TOTAL REGISTERED INVESTMENT COMPANY
(Cost $14,476,261) | | | 14,414,976 |
| | | | | | |
| | |
Principal
Amount | | | | |
| REPURCHASE AGREEMENT — 2.62% | | |
| $ | 18,940,000 | | Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 05/15/17, market value $19,323,563 (repurchase proceeds $18,945,761) | | | 18,940,000 |
| | | | | | |
| | | TOTAL REPURCHASE AGREEMENT
(Cost $18,940,000) | | | 18,940,000 |
| | | | | | |
| | | | | | | |
TOTAL INVESTMENTS
(Cost $545,037,487)(c) | | 100.08 | % | | $ | 723,836,401 | |
OTHER LIABILITIES IN EXCESS OF ASSETS | | (0.08 | ) | | | (552,856 | ) |
| | | | | | | |
NET ASSETS | | 100.00 | % | | $ | 723,283,545 | |
| | | | | | | |
See Notes to Financial Statements.
41
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
International Fund — (continued)
| (a) | Non-income producing security. |
| (b) | Represents fair value as determined in good faith under procedures approved by the Board of Directors. |
| (c) | Cost for federal income tax purposes is $545,037,487. |
ADR—American Depository Receipt
Ltd.—Limited
PLC—Public Limited Company
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | | | |
Sector Diversification | | % of
Net
Assets | | | Value | |
Financial | | 17.69 | | | $ | 127,928,429 | |
Information Technology | | 15.64 | | | | 113,134,848 | |
Consumer Discretionary | | 10.88 | | | | 78,662,590 | |
Health Care | | 10.08 | | | | 72,901,940 | |
Industrials | | 9.38 | | | | 67,809,172 | |
Materials | | 8.80 | | | | 63,658,609 | |
Energy | | 7.33 | | | | 53,042,744 | |
Consumer Staples | | 7.00 | | | | 50,642,342 | |
Telecommunication Services | | 6.80 | | | | 49,170,846 | |
Repurchase Agreement | | 2.62 | | | | 18,940,000 | |
Registered Investment Company | | 1.99 | | | | 14,414,976 | |
Utilities | | 1.87 | | | | 13,529,905 | |
| | | | | | | |
Total Investments | | 100.08 | | | $ | 723,836,401 | |
Other Liabilities in Excess of Assets | | (0.08 | ) | | | (552,856 | ) |
| | | | | | | |
Net Assets | | 100.00 | | | $ | 723,283,545 | |
| | | | | | | |
See Notes to Financial Statements.
42
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Pacific/Asia Fund
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — 96.92% | | |
| | AUSTRALIA — 15.54% | | | |
| 43,000 | | BHP Billiton Ltd. | | $ | 1,679,071 |
| 318,500 | | Brambles Ltd. | | | 4,162,116 |
| 81,423 | | Commonwealth Bank of Australia | | | 4,060,088 |
| 43,000 | | CSL Ltd. | | | 4,079,958 |
| 60,800 | | Incitec Pivot Ltd. | | | 4,595,257 |
| 42,875 | | Rio Tinto Ltd. | | | 4,097,333 |
| 108,700 | | St. George Bank Ltd. | | | 3,403,573 |
| 161,700 | | Woolworths Ltd. | | | 4,253,282 |
| 166,100 | | Zinifex Ltd. | | | 2,605,661 |
| | | | | |
| | | | | 32,936,339 |
| | | | | |
| | CAMBODIA — 1.31% | | | |
| 8,817,000 | | NagaCorp Ltd. (Hong Kong) | | | 2,767,459 |
| | | | | |
| | CHINA — 9.33% | | | |
| 47,800 | | Aluminum Corp. of China Ltd., ADR | | | 3,347,434 |
| 463,540 | | Bank of East Asia Ltd. (Hong Kong) | | | 2,606,510 |
| 4,123,000 | | Chaoda Modern Agriculture Holdings Ltd. (Hong Kong) | | | 3,327,610 |
| 64,600 | | China Mobile Ltd., ADR (Hong Kong) | | | 5,299,784 |
| 1,410,000 | | Dongfeng Motor Group Co., Ltd., Class H | | | 1,231,312 |
| 13,500 | | Sino-Ocean Land Holdings Ltd.(a) | | | 19,102 |
| 134,500 | | Swire Pacific Ltd., Class A | | | 1,627,597 |
| 1,671,000 | | Synear Food Holdings Ltd. | | | 2,323,643 |
| | | | | |
| | | | | 19,782,992 |
| | | | | |
| | INDIA — 1.19% | | | |
| 107,200 | | Bharti Airtel Ltd.(a) | | | 2,520,989 |
| | | | | |
| | INDONESIA — 3.43% | | | |
| 38,000 | | Freeport-McMoRan Copper & Gold, Inc. | | | 3,985,820 |
| 2,720,800 | | PT Telekomunikasi Indonesia Tbk, Series B | | | 3,290,280 |
| | | | | |
| | | | | 7,276,100 |
| | | | | |
| | JAPAN — 46.55% | | | |
| 73,000 | | Canon, Inc. | | | 3,961,370 |
| 184,145 | | Chiyoda Corp. | | | 3,300,523 |
| 700 | | Dena Co., Ltd. | | | 3,076,713 |
| 154,800 | | Don Quijote Co., Ltd. | | | 3,183,865 |
| 49,400 | | FANUC Ltd. | | | 5,015,014 |
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | |
| | JAPAN — (continued) | | | |
| 60,100 | | FUJIFILM Holdings Corp. | | $ | 2,761,241 |
| 571,700 | | Fukuoka Financial Group, Inc. | | | 3,332,788 |
| 1,024 | | Funai Zaisan Consultants Co., Ltd. | | | 2,171,125 |
| 45,700 | | Glory Ltd. | | | 1,447,720 |
| 68,300 | | Hogy Medical Co., Ltd. | | | 3,211,335 |
| 45,600 | | Hoya Corp. | | | 1,549,577 |
| 321,700 | | Itochu Corp. | | | 3,883,681 |
| 12,500 | | Keyence Corp. | | | 2,766,386 |
| 147,600 | | Komatsu Ltd. | | | 4,920,393 |
| 114,100 | | Kurita Water Industries Ltd. | | | 3,847,826 |
| 36,400 | | Kyocera Corp. | | | 3,394,157 |
| 256,000 | | Mitsubishi UFJ Financial Group, Inc.(b) | | | 2,324,480 |
| 116,000 | | Nikon Corp. | | | 3,964,398 |
| 11,100 | | Nintendo Co., Ltd. | | | 5,730,976 |
| 79,000 | | Nomura Holdings, Inc. | | | 1,314,251 |
| 9,500 | | ORIX Corp. | | | 2,152,963 |
| 61,900 | | Shin-Etsu Chemical Co., Ltd. | | | 4,258,687 |
| 63,000 | | Sumitomo Realty & Development Co., Ltd. | | | 2,205,464 |
| 458,200 | | Sumitomo Trust & Banking Co., Ltd. | | | 3,449,836 |
| 89,800 | | Takata Corp. | | | 3,489,767 |
| 58,900 | | Takeda Pharmaceutical Co., Ltd. | | | 4,130,712 |
| 161,000 | | Tokuyama Corp. | | | 2,429,133 |
| 34,500 | | Tokyo Electron Ltd. | | | 2,176,085 |
| 325,000 | | Toshiba Corp. | | | 3,020,053 |
| 67,500 | | Toyota Motor Corp. | | | 3,948,906 |
| 216,500 | | Yamaguchi Financial Group, Inc. | | | 2,252,580 |
| | | | | |
| | | | | 98,672,005 |
| | | | | |
| | MALAYSIA — 0.96% | | | |
| 4,232,000 | | Silverlake Axis Ltd. | | | 2,046,106 |
| | | | | |
| | PHILIPPINES — 4.21% | | | |
| 95,500 | | Globe Telecom, Inc. | | | 3,108,925 |
| 12,358,625 | | SM Prime Holdings, Inc. | | | 3,275,387 |
| 7,078,300 | | Universal Robina Corp. | | | 2,541,834 |
| | | | | |
| | | | | 8,926,146 |
| | | | | |
| | SINGAPORE — 4.10% | | | |
| 279,000 | | DBS Group Holdings Ltd. | | | 4,042,410 |
| 372,000 | | Keppel Corp. Ltd. | | | 3,599,640 |
| 70,000 | | United Overseas Bank Ltd. | | | 1,039,329 |
| | | | | |
| | | | | 8,681,379 |
| | | | | |
See Notes to Financial Statements.
43
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Pacific/Asia Fund — (continued)
| | | | | |
Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | |
| | SOUTH KOREA — 3.38% | | | |
| 44,900 | | Kookmin Bank | | $ | 3,703,341 |
| 122,700 | | Woori Investment & Securities Co., Ltd. | | | 3,449,481 |
| | | | | |
| | | | | 7,152,822 |
| | | | | |
| | TAIWAN — 4.90% | | | |
| 1,855,000 | | Chang Hwa Commercial Bank | | | 1,221,270 |
| 723,593 | | HON HAI Precision Industry Co., Ltd. | | | 5,450,381 |
| 366,480 | | Taiwan Semiconductor Manufacturing Co., Ltd., ADR | | | 3,708,777 |
| | | | | |
| | | | | 10,380,428 |
| | | | | |
| | THAILAND — 2.02% | | | |
| 3,391,400 | | Amata Corp. Public Co., Ltd., Foreign Shares(b) | | | 1,523,780 |
| 1,198,900 | | Siam Commercial Bank Public Co., Ltd., Foreign Shares (b) | | | 2,763,329 |
| | | | | |
| | | | | 4,287,109 |
| | | | | |
| | TOTAL COMMON STOCKS
(Cost $166,565,315) | | | 205,429,874 |
| | | | | |
| REGISTERED INVESTMENT COMPANY — 2.16% |
| 384,700 | | iShares MSCI Malaysia Index Fund | | | 4,574,083 |
| | | | | |
| | TOTAL REGISTERED INVESTMENT COMPANY
(Cost $3,400,687) | | | 4,574,083 |
| | | | | |
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
| REPURCHASE AGREEMENT — 1.44% | | |
| $ | 3,056,000 | | Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 05/15/17, market value $3,118,500 (repurchase proceeds $3,056,930) | | $ | 3,056,000 |
| | | | | | |
| | | TOTAL REPURCHASE AGREEMENT
(Cost $3,056,000) | | | 3,056,000 |
| | | | | | |
| | | | | | | |
TOTAL INVESTMENTS
(Cost $173,022,002)(c) | | 100.52 | % | | $ | 213,059,957 | |
OTHER LIABILITIES IN EXCESS OF ASSETS | | (0.52 | ) | | | (1,096,664 | ) |
| | | | | | | |
NET ASSETS | | 100.00 | % | | $ | 211,963,293 | |
| | | | | | | |
| (a) | Non-income producing security. |
| (b) | Represents fair value as determined in good faith under procedures approved by the Board of Directors. |
| (c) | Cost for federal income tax purposes is $173,022,002. |
ADR—American Depository Receipt
Ltd.—Limited
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | | | |
Sector Diversification | | % of
Net
Assets | | | Value | |
Financial | | 24.50 | | | $ | 51,938,684 | |
Information Technology | | 17.25 | | | | 36,565,108 | |
Industrials | | 14.24 | | | | 30,176,914 | |
Materials | | 12.74 | | | | 26,998,396 | |
Consumer Discretionary | | 10.22 | | | | 21,662,421 | |
Telecommunication Services | | 6.71 | | | | 14,219,977 | |
Consumer Staples | | 5.87 | | | | 12,446,368 | |
Health Care | | 5.39 | | | | 11,422,006 | |
Registered Investment Company | | 2.16 | | | | 4,574,083 | |
Repurchase Agreement | | 1.44 | | | | 3,056,000 | |
| | | | | | | |
Total Investments | | 100.52 | | | $ | 213,059,957 | |
Other Liabilities in Excess of Assets | | (0.52 | ) | | | (1,096,664 | ) |
| | | | | | | |
Net Assets | | 100.00 | | | $ | 211,963,293 | |
| | | | | | | |
See Notes to Financial Statements
44
[THIS PAGE INTENTIONALLY LEFT BLANK]
45
Excelsior Funds
Statements of Assets and Liabilities
September 30, 2007 (Unaudited)
| | | | | | |
| | |
| | | Blended
Equity
Fund | | Energy and
Natural Resources
Fund |
ASSETS | | | | | | |
Unaffiliated investments, at identified cost | | $ | 200,705,731 | | $ | 641,095,136 |
Affiliated investments, at identified cost | | | 3,370,477 | | | — |
| | | | | | |
Total investments, at identified cost | | | 204,076,208 | | | 641,095,136 |
| | | | | | |
Unaffiliated investments, at value | | | 394,964,979 | | | 729,674,072 |
Affiliated investments, at value | | | 8,471,500 | | | — |
| | | | | | |
Total investments, at value | | $ | 403,436,479 | | $ | 729,674,072 |
Cash | | | 840 | | | 4,846,706 |
Foreign currency (cost of $2,072, $-, $-, $-, $- and $-, respectively) | | | 2,101 | | | — |
Receivable for: | | | | | | |
Investments sold | | | 1,179,035 | | | 6,694,675 |
Fund shares sold | | | 2,959 | | | 877,892 |
Dividends | | | 797,626 | | | 396,008 |
Interest | | | 33 | | | 16,012 |
Expense reimbursement due from Investment Advisor | | | 40,101 | | | — |
Foreign tax reclaims | | | 5,136 | | | — |
Prepaid expenses | | | 23,026 | | | 37,178 |
| | | | | | |
Total assets | | $ | 405,487,336 | | $ | 742,542,543 |
| | | | | | |
LIABILITIES | | | | | | |
Payable to custodian bank | | | — | | | — |
Payable for: | | | | | | |
Investments purchased | | | — | | | 30,147,317 |
Fund shares repurchased | | | 152,298 | | | 445,869 |
Investment advisory fee | | | 242,442 | | | 337,549 |
Administration fee | | | 28,855 | | | 51,659 |
Transfer agent fee | | | 27,212 | | | 71,950 |
Pricing and bookkeeping fees | | | 4,529 | | | 6,264 |
Audit fee | | | 16,912 | | | 15,520 |
Custody fee | | | 798 | | | 14,923 |
Shareholder servicing fee | | | 142,202 | | | 155,807 |
Distribution and service fees | | | — | | | 1 |
Principal on loan | | | — | | | — |
Interest fee | | | — | | | — |
Other liabilities | | | 83,553 | | | 34,973 |
| | | | | | |
Total liabilities | | $ | 698,801 | | $ | 31,281,832 |
| | | | | | |
NET ASSETS | | $ | 404,788,535 | | $ | 711,260,711 |
| | | | | | |
NET ASSETS CONSIST OF | | | | | | |
Par value | | $ | 10,424 | | $ | 25,821 |
Paid-in capital in excess of par value | | | 152,136,761 | | | 530,623,186 |
Undistributed (overdistributed) net investment income | | | 147,648 | | | 53,515 |
Accumulated net realized gain (loss) | | | 53,132,316 | | | 91,979,253 |
Net unrealized appreciation on: | | | | | | |
Investments | | | 199,360,271 | | | 88,578,936 |
Foreign currency translations | | | 1,115 | | | — |
| | | | | | |
NET ASSETS | | $ | 404,788,535 | | $ | 711,260,711 |
| | | | | | |
See Notes to Financial Statements.
46
| | | | | | | | | | | |
| | | |
Equity
Income
Fund | | Equity
Opportunities
Fund | | Large Cap
Growth
Fund | | | Mid Cap Value
and
Restructuring
Fund |
| | | | | | | | | | | |
| $ | 181,606,880 | | $ | 318,081,841 | | $ | 676,317,678 | | | $ | 217,518,740 |
| | — | | | — | | | — | | | | — |
| | | | | | | | | | | | |
| | 181,606,880 | | | 318,081,841 | | | 676,317,678 | | | | 217,518,740 |
| | | | | | | | | | | | |
| | 230,173,262 | | | 405,216,355 | | | 882,003,927 | | | | 354,956,600 |
| | — | | | — | | | — | | | | — |
| | | | | | | | | | | | |
| $ | 230,173,262 | | $ | 405,216,355 | | $ | 882,003,927 | | | $ | 354,956,600 |
| | — | | | — | | | 1,201,247 | | | | — |
| | — | | | — | | | — | | | | — |
| | | | | | | | | | | |
| | 6,409,449 | | | 5,399,189 | | | 2,982,911 | | | | 80,737 |
| | 38,555 | | | 135,622 | | | 1,129,424 | | | | 64,952 |
| | 572,880 | | | 601,266 | | | 167,449 | | | | 373,711 |
| | — | | | 1,899 | | | 4,075 | | | | — |
| | 11,964 | | | 56,482 | | | — | | | | 961 |
| | — | | | 12,302 | | | 80,213 | | | | — |
| | 13,730 | | | 21,818 | | | 37,214 | | | | 20,147 |
| | | | | | | | | | | | |
| $ | 237,219,840 | | $ | 411,444,933 | | $ | 887,606,460 | | | $ | 355,497,108 |
| | | | | | | | | | | | |
| | | | | | | | | | | |
| | 241,861 | | | 1,037 | | | — | | | | 63,464 |
| | | | | | | | | | | |
| | — | | | 1,063,603 | | | 10,641,468 | | | | — |
| | 99,589 | | | 166,867 | | | 255,797 | | | | 59,126 |
| | 144,094 | | | 241,010 | | | 516,604 | | | | 185,100 |
| | 16,438 | | | 28,600 | | | 65,079 | | | | 25,245 |
| | 19,154 | | | 25,462 | | | 12,104 | | | | 11,742 |
| | 3,676 | | | 4,390 | | | 6,101 | | | | 6,430 |
| | 16,526 | | | 15,171 | | | 14,040 | | | | 22,653 |
| | 638 | | | 8,066 | | | 24,416 | | | | 15,249 |
| | 48,049 | | | 68,500 | | | 198,333 | | | | 101,133 |
| | — | | | 1 | | | 4 | | | | 717 |
| | 1,000,000 | | | — | | | — | | | | — |
| | 767 | | | — | | | — | | | | — |
| | 32,999 | | | 85,854 | | | 67,275 | | | | 65,460 |
| | | | | | | | | | | | |
| $ | 1,623,791 | | $ | 1,708,561 | | $ | 11,801,221 | | | $ | 556,319 |
| | | | | | | | | | | | |
| $ | 235,596,049 | | $ | 409,736,372 | | $ | 875,805,239 | | | $ | 354,940,789 |
| | | | | | | | | | | | |
| | | | | | | | | | | |
| $ | 236 | | $ | 259 | | $ | 72,052 | | | $ | 154 |
| | 181,007,111 | | | 316,753,335 | | | 765,610,429 | | | | 208,533,466 |
| | 125,115 | | | 144,193 | | | (2,969,869 | ) | | | 2,828,263 |
| | 5,896,815 | | | 5,697,874 | | | (92,593,622 | ) | | | 6,141,046 |
| | | | | | | | | | | |
| | 48,566,382 | | | 87,134,514 | | | 205,686,249 | | | | 137,437,860 |
| | 390 | | | 6,197 | | | — | | | | — |
| | | | | | | | | | | | |
| $ | 235,596,049 | | $ | 409,736,372 | | $ | 875,805,239 | | | $ | 354,940,789 |
| | | | | | | | | | | | |
See Notes to Financial Statements.
47
Excelsior Funds
Statements of Assets and Liabilities — (continued)
September 30, 2007 (Unaudited)
| | | | | | | |
| | |
| | | Blended
Equity
Fund | | Energy and
Natural Resources
Fund | |
Shares | | | | | | | |
Net assets | | $ | 404,788,535 | | $ | 711,240,777 | |
Shares outstanding | | | 10,424,149 | | | 25,819,818 | |
Net asset value and offering price per share | | $ | 38.83 | | $ | 27.55 | |
Institutional Shares | | | | | | | |
Net assets | | | — | | | — | |
Shares outstanding | | | — | | | — | |
Net asset value and offering price per share | | | — | | | — | |
Retirement Shares | | | | | | | |
Net assets | | | — | | | — | |
Shares outstanding | | | — | | | — | |
Net asset value and offering price per share | | | — | | | — | |
Class A | | | | | | | |
Net assets | | | — | | $ | 9,966 | |
Shares outstanding | | | — | | | 362 | |
Net asset value per share(a) | | | — | | $ | 27.55 | (b) |
Maximum sales charge | | | — | | | 5.75 | % |
Maximum offering price per share(c) | | | — | | $ | 29.23 | |
Class C | | | | | | | |
Net assets | | | — | | $ | 9,968 | |
Shares outstanding | | | — | | | 362 | |
Net asset value and offering price per share(a) | | | — | | $ | 27.55 | (b) |
| (a) | | Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. |
| (b) | | Net asset value per share rounds due to fractional shares outstanding. |
| (c) | | On sales of $50,000 or more the offering price is reduced. |
See Notes to Financial Statements.
48
| | | | | | | | | | | | | |
| | | |
Equity
Income
Fund | | | Equity
Opportunities
Fund | | | Large Cap
Growth
Fund | | | Mid Cap Value
and
Restructuring
Fund |
| | | | | | | | | | | | | |
| $ | 235,594,830 | | | $ | 350,541,967 | | | $ | 849,897,194 | | | $ | 321,635,768 |
| | 23,603,051 | | | | 22,152,657 | | | | 69,924,817 | | | | 13,946,642 |
| $ | 9.98 | | | $ | 15.82 | | | $ | 12.15 | | | $ | 23.06 |
| | | | | | | | | | | | | |
| | — | | | $ | 59,174,383 | | | $ | 25,876,593 | | | $ | 31,454,182 |
| | — | | | | 3,736,977 | | | | 2,124,311 | | | | 1,360,218 |
| | — | | | $ | 15.83 | | | $ | 12.18 | | | $ | 23.12 |
| | | | | | | | | | | | | |
| $ | 1,219 | | | | — | | | $ | 11,500 | | | $ | 1,850,839 |
| | 122 | | | | — | | | | 962 | | | | 80,968 |
| $ | 10.03 | (b) | | | — | | | $ | 11.95 | | | $ | 22.86 |
| | | | | | | | | | | | | |
| | — | | | $ | 10,011 | | | $ | 9,976 | | | | — |
| | — | | | | 633 | | | | 821 | | | | — |
| | — | | | $ | 15.82 | | | $ | 12.15 | | | | — |
| | — | | | | 5.75 | % | | | 5.75 | % | | | — |
| | — | | | $ | 16.78 | | | $ | 12.89 | | | | — |
| | | | | | | | | | | | | |
| | — | | | $ | 10,011 | | | $ | 9,976 | | | | — |
| | — | | | | 633 | | | | 821 | | | | — |
| | — | | | $ | 15.82 | | | $ | 12.15 | | | | — |
See Notes to Financial Statements.
49
Excelsior Funds
Statements of Assets and Liabilities — (continued)
September 30, 2007 (Unaudited)
| | | | | | | |
| | |
| | | Real Estate
Fund | | Small Cap
Fund | |
ASSETS | | | | | | | |
Investments, at identified cost | | $ | 74,350,999 | | $ | 588,232,469 | |
| | | | | | | |
Investments, at value | | $ | 89,190,447 | | $ | 816,116,200 | |
Cash | | | 20,883 | | | 962,975 | |
Foreign currency (cost of $-, $-, $-, $2,964,540, $2,617,471 and $-, respectively) | | | — | | | — | |
Receivable for: | | | | | | | |
Investments sold | | | 603,030 | | | 13,148,838 | |
Fund shares sold | | | 2,215 | | | 889,649 | |
Dividends | | | 306,028 | | | 856,837 | |
Interest | | | 1,263 | | | 675 | |
Expense reimbursement due from Investment Advisor | | | 47,698 | | | — | |
Foreign tax reclaims | | | — | | | — | |
Prepaid expenses | | | 5,775 | | | 43,700 | |
| | | | | | | |
Total assets | | $ | 90,177,339 | | $ | 832,018,874 | |
| | | | | | | |
LIABILITIES | | | | | | | |
Payable to custodian bank | | | — | | | — | |
Written options at value (premiums of $-, $-, $2,113,212, $-, $- and $-, respectively) | | | — | | | — | |
Payable for: | | | | | | | |
Investments purchased | | | — | | | 942,959 | |
Fund shares repurchased | | | 129,734 | | | 242,980 | |
Investment advisory fee | | | 72,283 | | | 502,629 | |
Administration fee | | | 5,266 | | | 62,411 | |
Transfer agent fee | | | 17,213 | | | 37,790 | |
Pricing and bookkeeping fees | | | 2,725 | | | 6,202 | |
Trustees’/Directors’ fees | | | — | | | — | |
Audit fee | | | 22,242 | | | 14,789 | |
Custody fee | | | 820 | | | 10,594 | |
Shareholder servicing fee | | | 24,534 | | | 254,485 | |
Distribution and service fees | | | — | | | 2,134 | |
Interest fee | | | — | | | — | |
Other liabilities | | | 10,418 | | | 87,786 | |
| | | | | | | |
Total liabilities | | $ | 285,235 | | $ | 2,164,759 | |
| | | | | | | |
NET ASSETS | | $ | 89,892,104 | | $ | 829,854,115 | |
| | | | | | | |
NET ASSETS CONSIST OF | | | | | | | |
Par value | | $ | 8,504 | | $ | 39,657 | |
Paid-in capital in excess of par value | | | 39,933,010 | | | 549,407,922 | |
Undistributed (overdistributed) net investment income | | | 1,168,448 | | | (2,108,086 | ) |
Accumulated net realized gain (loss) | | | 33,942,694 | | | 54,630,891 | |
Net unrealized appreciation (depreciation) on: | | | | | | | |
Investments | | | 14,839,448 | | | 227,883,731 | |
Foreign currency translations | | | — | | | — | |
Written options | | | — | | | — | |
| | | | | | | |
NET ASSETS | | $ | 89,892,104 | | $ | 829,854,115 | |
| | | | | | | |
See Notes to Financial Statements.
50
| | | | | | | | | | | | |
| | | |
Value and
Restructuring
Fund | | | Emerging
Markets Fund | | International
Fund | | | Pacific/Asia
Fund |
| | | | | | | | | | | | |
| $ | 6,071,039,894 | | | $ | 778,413,387 | | $ | 545,037,487 | | | $ | 173,022,002 |
| | | | | | | | | | | | | |
| $ | 9,325,944,098 | | | $ | 1,373,557,512 | | $ | 723,836,401 | | | $ | 213,059,957 |
| | 1,294,794 | | | | 11,378 | | | 87,509 | | | | — |
| | — | | | | 2,990,442 | | | 2,630,389 | | | | — |
| | | | | | | | | | | | |
| | 18,443,910 | | | | — | | | 5,572,706 | | | | 11,847,297 |
| | 8,906,387 | | | | 966,323 | | | 368,732 | | | | 21,763 |
| | 12,500,329 | | | | 4,346,097 | | | 1,554,660 | | | | 727,189 |
| | 20,946 | | | | 10,659 | | | 5,761 | | | | 930 |
| | — | | | | 18,679 | | | — | | | | — |
| | 32,618 | | | | 2,842 | | | 301,854 | | | | — |
| | 510,432 | | | | 71,544 | | | 38,600 | | | | 12,246 |
| | | | | | | | | | | | | |
| $ | 9,367,653,514 | | | $ | 1,381,975,476 | | $ | 734,396,612 | | | $ | 225,669,382 |
| | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | — | | | | — | | | — | | | | 286,595 |
| | 3,186,000 | | | | — | | | — | | | | — |
| | | | | | | | | | | | |
| | 43,470,158 | | | | 183,417 | | | 9,993,937 | | | | 12,970,244 |
| | 4,927,604 | | | | 500,633 | | | 84,437 | | | | 74,172 |
| | 4,439,243 | | | | 1,315,612 | | | 566,487 | | | | 166,189 |
| | 751,022 | | | | 151,554 | | | 79,192 | | | | 21,828 |
| | 336,408 | | | | 51,745 | | | 25,379 | | | | 11,105 |
| | 7,011 | | | | 7,056 | | | 8,070 | | | | 5,319 |
| | 55,084 | | | | 53 | | | — | | | | — |
| | — | | | | 5,457 | | | 14,768 | | | | 17,427 |
| | 99,688 | | | | 504,503 | | | 95,321 | | | | 67,443 |
| | 3,512,732 | | | | 420,014 | | | 156,841 | | | | 53,803 |
| | 3,011 | | | | 1 | | | — | | | | — |
| | — | | | | — | | | — | | | | 729 |
| | 815,741 | | | | 123,894 | | | 88,635 | | | | 31,235 |
| | | | | | | | | | | | | |
| $ | 61,603,702 | | | $ | 3,263,939 | | $ | 11,113,067 | | | $ | 13,706,089 |
| | | | | | | | | | | | | |
| $ | 9,306,049,812 | | | $ | 1,378,711,537 | | $ | 723,283,545 | | | $ | 211,963,293 |
| | | | | | | | | | | | | |
| | | | | | | | | | | | |
| $ | 159,088 | | | $ | 78,060 | | $ | 34,880 | | | $ | 15,644 |
| | 5,957,888,237 | | | | 693,565,206 | | | 567,034,691 | | | | 136,719,266 |
| | 37,254,923 | | | | 4,095,292 | | | 1,648 | | | | 330,368 |
| | 56,914,288 | | | | 85,689,248 | | | (22,605,977 | ) | | | 34,843,427 |
| | | | | | | | | | | | |
| | 3,254,904,204 | | | | 595,144,125 | | | 178,798,914 | | | | 40,037,955 |
| | 1,860 | | | | 139,606 | | | 19,389 | | | | 16,633 |
| | (1,072,788 | ) | | | — | | | — | | | | — |
| | | | | | | | | | | | | |
| $ | 9,306,049,812 | | | $ | 1,378,711,537 | | $ | 723,283,545 | | | $ | 211,963,293 |
| | | | | | | | | | | | | |
See Notes to Financial Statements.
51
Excelsior Funds
Statements of Assets and Liabilities — (continued)
September 30, 2007 (Unaudited)
| | | | | | | |
| | |
| | | Real Estate
Fund | | Small Cap
Fund | |
Shares | | | | | | | |
Net assets | | $ | 89,892,104 | | $ | 823,979,966 | |
Shares outstanding | | | 8,504,056 | | | 39,372,053 | |
Net asset value and offering price per share | | $ | 10.57 | | $ | 20.93 | |
Institutional Shares | | | | | | | |
Net assets | | | — | | | — | |
Shares outstanding | | | — | | | — | |
Net asset value and offering price per share | | | — | | | — | |
Retirement Shares | | | | | | | |
Net assets | | | — | | $ | 5,854,323 | |
Shares outstanding | | | — | | | 283,849 | |
Net asset value and offering price per share | | | — | | $ | 20.62 | |
Class A | | | | | | | |
Net assets | | | — | | $ | 9,913 | |
Shares outstanding | | | — | | | 474 | |
Net asset value per share(a) | | | — | | $ | 20.93 | (b) |
Maximum sales charge | | | — | | | 5.75 | % |
Maximum offering price per share(c) | | | — | | $ | 22.21 | |
Class C | | | | | | | |
Net assets | | | — | | $ | 9,913 | |
Shares outstanding | | | — | | | 474 | |
Net asset value and offering price per share(a) | | | — | | $ | 20.93 | (b) |
| (a) | | Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. |
| (b) | | Net asset value per share rounds due to fractional shares outstanding. |
| (c) | | On sales of $50,000 or more the offering price is reduced. |
See Notes to Financial Statements.
52
| | | | | | | | | | | | |
| | | |
Value and
Restructuring
Fund | | | Emerging
Markets Fund | | | International
Fund | | Pacific/Asia
Fund |
| | | | | | | | | | | | |
| $ | 8,951,377,336 | | | $ | 1,316,884,816 | | | $ | 723,283,545 | | $ | 211,963,293 |
| | 153,023,496 | | | | 74,569,830 | | | | 34,880,218 | | | 15,643,508 |
| $ | 58.50 | | | $ | 17.66 | | | $ | 20.74 | | $ | 13.55 |
| | | | | | | | | | | | |
| $ | 346,400,817 | | | $ | 61,806,841 | | | | — | | | — |
| | 5,923,241 | | | | 3,489,079 | | | | — | | | — |
| $ | 58.48 | | | $ | 17.71 | | | | — | | | — |
| | | | | | | | | | | | |
| $ | 8,251,685 | | | | — | | | | — | | | — |
| | 141,164 | | | | — | | | | — | | | — |
| $ | 58.45 | | | | — | | | | — | | | — |
| | | | | | | | | | | | |
| $ | 9,987 | | | $ | 9,940 | | | | — | | | — |
| | 171 | | | | 563 | | | | — | | | — |
| $ | 58.50 | (b) | | $ | 17.66 | | | | — | | | — |
| | 5.75 | % | | | 5.75 | % | | | — | | | — |
| $ | 62.07 | | | $ | 18.74 | | | | — | | | — |
| | | | | | | | | | | | |
| $ | 9,987 | | | $ | 9,940 | | | | — | | | — |
| | 171 | | | | 563 | | | | — | | | — |
| $ | 58.50 | (b) | | $ | 17.66 | | | | — | | | — |
See Notes to Financial Statements.
53
Excelsior Funds
Statements of Operations
For the Six Months Ended September 30, 2007 (Unaudited)
| | | | | | | | | | | | | | | | |
| | | Blended
Equity
Fund | | | Energy and
Natural
Resources
Fund | | | Equity
Income
Fund | | | Equity
Opportunities
Fund | |
INVESTMENT INCOME | | | | | | | | | | | | | | | | |
Dividends | | $ | 3,546,857 | | | $ | 3,831,992 | | | $ | 3,658,645 | | | $ | 3,349,272 | |
Dividends from affiliates | | | 107,853 | | | | — | | | | — | | | | — | |
Interest | | | 5,788 | | | | 242,007 | | | | 5,113 | | | | 25,148 | |
Foreign withholding tax | | | (10,153 | ) | | | (26,783 | ) | | | (64,299 | ) | | | (38,831 | ) |
| | | | | | | | | | | | | | | | |
Total Investment Income | | | 3,650,345 | | | | 4,047,216 | | | | 3,599,459 | | | | 3,335,589 | |
EXPENSES | | | | | | | | | | | | | | | | |
Investment advisory fee | | | 1,523,411 | | | | 1,910,845 | | | | 911,144 | | | | 1,438,456 | |
Administration fee | | | 302,265 | | | | 474,658 | | | | 179,995 | | | | 285,185 | |
Distribution fee: | | | | | | | | | | | | | | | | |
Retirement Shares | | | — | | | | — | | | | 3 | | | | — | |
Class C | | | — | | | | 1 | | | | — | | | | 1 | |
Shareholder servicing fee: | | | | | | | | | | | | | | | | |
Shares | | | 489,019 | | | | 767,023 | | | | 286,415 | | | | 395,026 | |
Institutional Shares | | | — | | | | — | | | | — | | | | — | |
Retirement Shares | | | — | | | | — | | | | 1 | | | | — | |
Class A | | | — | | | | — | * | | | — | | | | — | * |
Class C | | | — | | | | — | * | | | — | | | | — | * |
Transfer agent fee | | | 76,435 | | | | 229,156 | | | | 37,821 | | | | 44,673 | |
Pricing and bookkeeping fees | | | 6,176 | | | | 7,574 | | | | 4,869 | | | | 5,799 | |
Trustees’/Directors’ fees | | | 10,049 | | | | 12,068 | | | | 10,117 | | | | 10,698 | |
Custody fees | | | 20,301 | | | | 53,592 | | | | 7,926 | | | | 43,410 | |
Other expenses | | | 49,534 | | | | 92,982 | | | | 32,136 | | | | 63,366 | |
| | | | | | | | | | | | | | | | |
Expenses before interest expense | | | 2,477,190 | | | | 3,547,899 | | | | 1,470,427 | | | | 2,286,614 | |
Interest expense | | | — | | | | — | | | | 767 | | | | — | |
| | | | | | | | | | | | | | | | |
Total Expenses | | | 2,477,190 | | | | 3,547,899 | | | | 1,471,194 | | | | 2,286,614 | |
Fees waived/reimbursed by: | | | | | | | | | | | | | | | | |
Investment Advisor | | | (192,494 | ) | | | — | | | | (103,496 | ) | | | (307,056 | ) |
Administrator | | | (50,003 | ) | | | (84,361 | ) | | | (29,942 | ) | | | (49,310 | ) |
Custody earnings credit | | | (709 | ) | | | (24,631 | ) | | | (2,686 | ) | | | (167 | ) |
| | | | | | | | | | | | | | | | |
Net Expenses | | | 2,233,984 | | | | 3,438,907 | | | | 1,335,070 | | | | 1,930,081 | |
| | | | | | | | | | | | | | | | |
NET INVESTMENT INCOME (LOSS) | | | 1,416,361 | | | | 608,309 | | | | 2,264,389 | | | | 1,405,508 | |
| | | | | | | | | | | | | | | | |
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY AND WRITTEN OPTIONS | | | | | | | | | | | | | | | | |
Net realized gain (loss) on: | | | | | | | | | | | | | | | | |
Investments | | | 22,797,514 | | | | 62,876,823 | | | | 6,277,732 | | | | 9,770,059 | |
Foreign currency transactions | | | 2,139 | | | | 489 | | | | 6,499 | | | | (78 | ) |
Written options | | | — | | | | — | | | | (819,151 | ) | | | — | |
| | | | | | | | | | | | | | | | |
Net realized gain (loss) | | | 22,799,653 | | | | 62,877,312 | | | | 5,465,080 | | | | 9,769,981 | |
| | | | | | | | | | | | | | | | |
Net change in unrealized appreciation (depreciation) on: | | | | | | | | | | | | | | | | |
Investments | | | 15,881,664 | | | | 36,758,500 | | | | 7,191,091 | | | | 31,489,584 | |
Foreign currency translations | | | 480 | | | | — | | | | 256 | | | | 5,707 | |
Written options | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
Net change in unrealized appreciation (depreciation) | | | 15,882,144 | | | | 36,758,500 | | | | 7,191,347 | | | | 31,495,291 | |
| | | | | | | | | | | | | | | | |
Net Gain (Loss) | | | 38,681,797 | | | | 99,635,812 | | | | 12,656,427 | | | | 41,265,272 | |
| | | | | | | | | | | | | | | | |
Net Increase (Decrease) Resulting from Operations | | $ | 40,098,158 | | | $ | 100,244,121 | | | $ | 14,920,816 | | | $ | 42,670,780 | |
| | | | | | | | | | | | | | | | |
| * | | Rounds to less than $1. |
See Notes to Financial Statements.
54
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Large Cap
Growth
Fund | | | Mid Cap
Value and
Restructuring
Fund | | | Real Estate
Fund | | | Small Cap
Fund | | | Value and
Restructuring
Fund | | | Emerging
Markets
Fund | | | International
Fund | | | Pacific/
Asia Fund | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | 1,695,781 | | | $ | 5,207,492 | | | $ | 1,285,928 | | | $ | 2,314,004 | | | $ | 121,552,689 | | | $ | 23,243,411 | | | $ | 8,434,736 | | | $ | 2,263,740 | |
| | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | 78,291 | | | | 7,827 | | | | 12,209 | | | | 256,593 | | | | 230,202 | | | | 140,597 | | | | 71,467 | | | | 5,490 | |
| | (65,616 | ) | | | (59,725 | ) | | | — | | | | — | | | | (978,162 | ) | | | (3,316,927 | ) | | | (719,668 | ) | | | (249,995 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 1,708,456 | | | | 5,155,594 | | | | 1,298,137 | | | | 2,570,597 | | | | 120,804,729 | | | | 20,067,081 | | | | 7,786,535 | | | | 2,019,235 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2,975,452 | | | | 1,155,038 | | | | 527,108 | | | | 2,909,308 | | | | 26,841,299 | | | | 7,795,574 | | | | 3,448,165 | | | | 1,056,264 | |
| | 592,719 | | | | 264,171 | | | | 77,050 | | | | 579,409 | | | | 6,744,653 | | | | 1,241,343 | | | | 683,688 | | | | 208,095 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 18 | | | | 3,920 | | | | — | | | | 9,248 | | | | 10,720 | | | | — | | | | — | | | | — | |
| | 1 | | | | — | | | | — | | | | 1 | | | | 1 | | | | 1 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 952,487 | | | | 402,319 | | | | 131,777 | | | | 965,145 | | | | 10,337,292 | | | | 1,463,927 | | | | 862,038 | | | | 264,051 | |
| | — | | | | — | | | | — | | | | — | | | | 53,483 | | | | — | | | | — | | | | — | |
| | 9 | | | | 1,960 | | | | — | | | | 4,460 | | | | 5,177 | | | | — | | | | — | | | | — | |
| | — | * | | | — | | | | — | | | | — | * | | | — | * | | | — | * | | | — | | | | — | |
| | — | * | | | — | | | | — | | | | — | * | | | — | * | | | — | * | | | — | | | | — | |
| | 85,663 | | | | 80,945 | | | | 51,436 | | | | 168,792 | | | | 1,294,761 | | | | 270,112 | | | | 61,977 | | | | 30,034 | |
| | 7,095 | | | | 6,543 | | | | 3,787 | | | | 7,370 | | | | 7,277 | | | | 31,422 | | | | 19,679 | | | | 16,763 | |
| | 14,224 | | | | 9,525 | | | | 8,715 | | | | 13,818 | | | | 108,782 | | | | 19,930 | | | | 13,187 | | | | 9,179 | |
| | 24,052 | | | | 15,269 | | | | 17,513 | | | | 32,593 | | | | 299,009 | | | | 862,950 | | | | 180,987 | | | | 87,509 | |
| | 133,015 | | | | 61,804 | | | | 39,017 | | | | 96,998 | | | | 910,134 | | | | 192,035 | | | | 92,359 | | | | 45,030 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 4,784,735 | | | | 2,001,494 | | | | 856,403 | | | | 4,787,142 | | | | 46,612,588 | | | | 11,877,294 | | | | 5,362,080 | | | | 1,716,925 | |
| | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 729 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 4,784,735 | | | | 2,001,494 | | | | 856,403 | | | | 4,787,142 | | | | 46,612,588 | | | | 11,877,294 | | | | 5,362,080 | | | | 1,717,654 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | — | | | | — | | | | (185,528 | ) | | | — | | | | — | | | | (209,969 | ) | | | (97,225 | ) | | | — | |
| | (101,901 | ) | | | (44,647 | ) | | | (11,519 | ) | | | (101,031 | ) | | | (1,134,346 | ) | | | (160,676 | ) | | | (87,154 | ) | | | (26,109 | ) |
| | (4,509 | ) | | | (6,679 | ) | | | (472 | ) | | | (7,428 | ) | | | (39,177 | ) | | | (28,826 | ) | | | (1,999 | ) | | | (2,678 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 4,678,325 | | | | 1,950,168 | | | | 658,884 | | | | 4,678,683 | | | | 45,439,065 | | | | 11,477,823 | | | | 5,175,702 | | | | 1,688,867 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (2,969,869 | ) | | | 3,205,426 | | | | 639,253 | | | | (2,108,086 | ) | | | 75,365,664 | | | | 8,589,258 | | | | 2,610,833 | | | | 330,368 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 31,509,475 | | | | (470,779 | ) | | | 28,350,567 | | | | 47,099,972 | | | | 109,640,328 | | | | 82,638,997 | | | | 35,391,883 | | | | 15,968,514 | |
| | — | | | | (160 | ) | | | — | | | | — | | | | 89,300 | | | | 200,809 | | | | (51,306 | ) | | | 31,994 | |
| | — | | | | — | | | | — | | | | — | | | | (3,139,781 | ) | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 31,509,475 | | | | (470,939 | ) | | | 28,350,567 | | | | 47,099,972 | | | | 106,589,847 | | | | 82,839,806 | | | | 35,340,577 | | | | 16,000,508 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 81,732,156 | | | | 22,415,661 | | | | (37,721,175 | ) | | | 18,990,141 | | | | 502,250,047 | | | | 195,136,022 | | | | 21,835,390 | | | | 13,859,636 | |
| | — | | | | — | | | | — | | | | — | | | | 8,579 | | | | 108,288 | | | | (2,407 | ) | | | 212,194 | |
| | — | | | | — | | | | — | | | | — | | | | (3,916,046 | ) | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 81,732,156 | | | | 22,415,661 | | | | (37,721,175 | ) | | | 18,990,141 | | | | 498,342,580 | | | | 195,244,310 | | | | 21,832,983 | | | | 14,071,830 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 113,241,631 | | | | 21,944,722 | | | | (9,370,608 | ) | | | 66,090,113 | | | | 604,932,427 | | | | 278,084,116 | | | | 57,173,560 | | | | 30,072,338 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | 110,271,762 | | | $ | 25,150,148 | | | $ | (8,731,355 | ) | | $ | 63,982,027 | | | $ | 680,298,091 | | | $ | 286,673,374 | | | $ | 59,784,393 | | | $ | 30,402,706 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
55
Excelsior Funds
Statements of Changes in Net Assets
| | | | | | | | | | | | | | | | |
| | |
| | | Blended Equity Fund | | | Energy and Natural
Resources Fund | |
Increase (Decrease) in Net Assets | | (Unaudited)
Six Months Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | | | (Unaudited)
Six Months Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | |
Operations | | | | | | | | | | | | | | | | |
Net investment income | | $ | 1,416,361 | | | $ | 2,888,780 | | | $ | 608,309 | | | $ | 1,256,040 | |
Net realized gain (loss) on investments, foreign currency transactions and written options | | | 22,799,653 | | | | 50,141,770 | | | | 62,877,312 | | | | 49,290,030 | |
Net change in unrealized appreciation (depreciation) on investments, foreign currency translations and written options | | | 15,882,144 | | | | (8,774,573 | ) | | | 36,758,500 | | | | (6,347,488 | ) |
| | | | | | | | | | | | | | | | |
Net increase resulting from operations | | | 40,098,158 | | | | 44,255,977 | | | | 100,244,121 | | | | 44,198,582 | |
| | | | | | | | | | | | | | | | |
Distributions to Shareholders | | | | | | | | | | | | | | | | |
From net investment income: | | | | | | | | | | | | | | | | |
Shares | | | (1,986,751 | ) | | | (2,741,626 | ) | | | (692,460 | ) | | | (1,125,652 | ) |
Institutional Shares | | | — | | | | — | | | | — | | | | — | |
Retirement Shares | | | — | | | | — | | | | — | | | | — | |
From net realized gains: | | | | | | | | | | | | | | | | |
Shares | | | — | | | | (62,158,929 | ) | | | — | | | | (96,892,494 | ) |
| | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | (1,986,751 | ) | | | (64,900,555 | ) | | | (692,460 | ) | | | (98,018,146 | ) |
| | | | | | | | | | | | | | | | |
Net Capital Share Transactions | | | (34,345,677 | ) | | | (38,641,827 | ) | | | 114,033,169 | | | | 28,989,505 | |
| | | | | | | | | | | | | | | | |
Net increase (decrease) in net assets | | | 3,765,730 | | | | (59,286,405 | ) | | | 213,584,830 | | | | (24,830,059 | ) |
| | | | | | | | | | | | | | | | |
NET ASSETS | | | | | | | | | | | | | | | | |
Beginning of period | | $ | 401,022,805 | | | $ | 460,309,210 | | | $ | 497,675,881 | | | $ | 522,505,940 | |
| | | | | | | | | | | | | | | | |
End of period | | $ | 404,788,535 | | | $ | 401,022,805 | | | $ | 711,260,711 | | | $ | 497,675,881 | |
| | | | | | | | | | | | | | | | |
Undistributed net investment income, at end of period | | $ | 147,648 | | | $ | 718,038 | | | $ | 53,515 | | | $ | 137,666 | |
| | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
56
| | | | | | | | | | | | | | |
| |
| Equity Income Fund | | | Equity Opportunities Fund | |
(Unaudited)
Six Months Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | | | (Unaudited)
Six Months Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | |
| | | | | | | | | | | | | | |
| $ | 2,264,389 | | | $ | 3,898,080 | | | $ | 1,405,508 | | | $ | 1,493,522 | |
| | | |
| | 5,465,080 | | | | 6,722,840 | | | | 9,769,981 | | | | (1,525,507 | ) |
| | | |
| | 7,191,347 | | | | 16,574,010 | | | | 31,495,291 | | | | 31,286,902 | |
| | | | | | | | | | | | | | | |
| | 14,920,816 | | | | 27,194,930 | | | | 42,670,780 | | | | 31,254,917 | |
| | | | | | | | | | | | | | | |
| | | |
| | (3,156,052 | ) | | | (4,109,886 | ) | | | (1,455,114 | ) | | | (851,918 | ) |
| | — | | | | — | | | | (381,460 | ) | | | (425,370 | ) |
| | (10 | ) | | | (15 | ) | | | — | | | | — | |
| | | |
| | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | |
| | (3,156,062 | ) | | | (4,109,901 | ) | | | (1,836,574 | ) | | | (1,277,288 | ) |
| | | | | | | | | | | | | | | |
| | (13,172,423 | ) | | | 8,064,710 | | | | 30,922,416 | | | | 121,147,723 | |
| | | | | | | | | | | | | | | |
| | (1,407,669 | ) | | | 31,149,739 | | | | 71,756,622 | | | | 151,125,352 | |
| | | | | | | | | | | | | | | |
| | | |
| $ | 237,003,718 | | | $ | 205,853,979 | | | $ | 337,979,750 | | | $ | 186,854,398 | |
| | | | | | | | | | | | | | | |
| $ | 235,596,049 | | | $ | 237,003,718 | | | $ | 409,736,372 | | | $ | 337,979,750 | |
| | | | | | | | | | | | | | | |
| | | |
| $ | 125,115 | | | $ | 1,016,788 | | | $ | 144,193 | | | $ | 575,259 | |
| | | | | | | | | | | | | | | |
See Notes to Financial Statements.
57
Excelsior Funds
Statements of Changes in Net Assets — (continued)
| | | | | | | | | | | | | | | | |
| | |
| | | Large Cap Growth Fund | | | Mid Cap Value and
Restructuring Fund | |
Increase (Decrease) in Net Assets | | (Unaudited)
Six Months Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | | | (Unaudited)
Six Months Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | |
Operations | | | | | | | | | | | | | | | | |
Net investment income (loss) | | $ | (2,969,869 | ) | | $ | (4,255,930 | ) | | $ | 3,205,426 | | | $ | 3,160,394 | |
Net realized gain (loss) on investments and foreign currency transactions | | | 31,509,475 | | | | 11,805,044 | | | | (470,939 | ) | | | 8,602,300 | |
Net realized gains from redemptions in-kind | | | — | | | | — | | | | — | | | | 23,046,664 | |
Net change in unrealized appreciation (depreciation) on investments | | | 81,732,156 | | | | 37,708,433 | | | | 22,415,661 | | | | (10,315,446 | ) |
| | | | | | | | | | | | | | | | |
Net increase (decrease) resulting from operations | | | 110,271,762 | | | | 45,257,547 | | | | 25,150,148 | | | | 24,493,912 | |
| | | | | | | | | | | | | | | | |
Distributions to Shareholders | | | | | | | | | | | | | | | | |
From net investment income: | | | | | | | | | | | | | | | | |
Shares | | | — | | | | — | | | | (3,023,143 | ) | | | (69,200 | ) |
Institutional Shares | | | — | | | | — | | | | (409,234 | ) | | | (28,083 | ) |
Retirement Shares | | | — | | | | — | | | | (11,004 | ) | | | — | |
Return of Capital: | | | | | | | | | | | | | | | | |
Shares | | | — | | | | — | | | | — | | | | — | |
From net realized gains: | | | | | | | | | | | | | | | | |
Shares | | | — | | | | — | | | | — | | | | (6,735 | ) |
Institutional Shares | | | — | | | | — | | | | — | | | | (812 | ) |
Retirement Shares | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | — | | | | — | | | | (3,443,381 | ) | | | (104,830 | ) |
| | | | | | | | | | | | | | | | |
Net Capital Share Transactions | | | 31,097,354 | | | | 136,983,006 | | | | 6,117,253 | | | | (36,769,439 | ) |
| | | | | | | | | | | | | | | | |
Net increase (decrease) in net assets | | | 141,369,116 | | | | 182,240,553 | | | | 27,824,020 | | | | (12,380,357 | ) |
| | | | | | | | | | | | | | | | |
NET ASSETS | | | | | | | | | | | | | | | | |
Beginning of period | | $ | 734,436,123 | | | $ | 552,195,570 | | | $ | 327,116,769 | | | $ | 339,497,126 | |
| | | | | | | | | | | | | | | | |
End of period | | $ | 875,805,239 | | | $ | 734,436,123 | | | $ | 354,940,789 | | | $ | 327,116,769 | |
| | | | | | | | | | | | | | | | |
Undistributed (overdistributed) net investment income, at end of period | | $ | (2,969,869 | ) | | $ | — | | | $ | 2,828,263 | | | $ | 3,066,218 | |
| | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
58
| | | | | | | | | | | | | | |
| |
Real Estate Fund | | | Small Cap Fund | |
(Unaudited)
Six Months Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | | | (Unaudited)
Six Months Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | |
| | | |
| $ | 639,253 | | | $ | 960,048 | | | $ | (2,108,086 | ) | | $ | (4,043,832 | ) |
| | | |
| | 28,350,567 | | | | 18,405,693 | | | | 47,099,972 | | | | 32,537,688 | |
| | — | | | | — | | | | — | | | | — | |
| | | |
| | (37,721,175 | ) | | | 2,835,641 | | | | 18,990,141 | | | | 18,105,369 | |
| | | | | | | | | | | | | | | |
| | | |
| | (8,731,355 | ) | | | 22,201,382 | | | | 63,982,027 | | | | 46,599,225 | |
| | | | | | | | | | | | | | | |
| | | |
| | — | | | | (1,161,313 | ) | | | — | | | | — | |
| | — | | | | — | | | | — | | | | — | |
| | — | | | | — | | | | — | | | | — | |
| | | |
| | — | | | | (640,355 | ) | | | — | | | | — | |
| | | |
| | — | | | | (18,263,524 | ) | | | — | | | | (43,578,479 | ) |
| | — | | | | — | | | | — | | | | — | |
| | — | | | | — | | | | — | | | | (3,801 | ) |
| | | | | | | | | | | | | | | |
| | — | | | | (20,065,192 | ) | | | — | | | | (43,582,280 | ) |
| | | | | | | | | | | | | | | |
| | (53,402,517 | ) | | | 22,261,378 | | | | 69,279,781 | | | | 94,185,168 | |
| | | | | | | | | | | | | | | |
| | (62,133,872 | ) | | | 24,397,568 | | | | 133,261,808 | | | | 97,202,113 | |
| | | | | | | | | | | | | | | |
| | | |
| $ | 152,025,976 | | | $ | 127,628,408 | | | $ | 696,592,307 | | | $ | 599,390,194 | |
| | | | | | | | | | | | | | | |
| $ | 89,892,104 | | | $ | 152,025,976 | | | $ | 829,854,115 | | | $ | 696,592,307 | |
| | | | | | | | | | | | | | | |
| | | |
| $ | 1,168,448 | | | $ | 529,195 | | | $ | (2,108,086 | ) | | $ | — | |
| | | | | | | | | | | | | | | |
See Notes to Financial Statements.
59
Excelsior Funds
Statements of Changes in Net Assets — (continued)
| | | | | | | | | | | | | | | | |
| | |
| | | Value and Restructuring Fund | | | Emerging Markets Fund | |
Increase (Decrease) in Net Assets | | (Unaudited)
Six Months Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | | | (Unaudited)
Six Months Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | |
Operations | | | | | | | | | | | | | | | | |
Net investment income (loss) | | $ | 75,365,664 | | | $ | 66,434,678 | | | $ | 8,589,258 | | | $ | 5,214,247 | |
Net realized gain on investments, foreign currency transactions and written options | | | 106,589,847 | | | | 96,756,036 | | | | 82,839,806 | | | | 48,869,293 | |
Net change in unrealized appreciation (depreciation) on investments, foreign currency translations and written options | | | 498,342,580 | | | | 645,371,791 | | | | 195,244,310 | | | | 100,008,846 | |
| | | | | | | | | | | | | | | | |
Net increase resulting from operations | | | 680,298,091 | | | | 808,562,505 | | | | 286,673,374 | | | | 154,092,386 | |
| | | | | | | | | | | | | | | | |
Distributions to Shareholders | | | | | | | | | | | | | | | | |
From net investment income: | | | | | | | | | | | | | | | | |
Shares | | | (52,036,862 | ) | | | (64,324,804 | ) | | | (4,453,377 | ) | | | (5,716,045 | ) |
Institutional Shares | | | (2,703,852 | ) | | | (3,526,597 | ) | | | (204,395 | ) | | | (252,640 | ) |
Retirement Shares | | | (18,993 | ) | | | (4,928 | ) | | | — | | | | — | |
From net realized gains: | | | | | | | | | | | | | | | | |
Shares | | | — | | | | — | | | | — | | | | (51,272,417 | ) |
Institutional Shares | | | — | | | | — | | | | — | | | | (1,858,765 | ) |
| | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | (54,759,707 | ) | | | (67,856,329 | ) | | | (4,657,772 | ) | | | (59,099,867 | ) |
| | | | | | | | | | | | | | | | |
Net Capital Share Transactions | | | 539,354,612 | | | | 918,433,748 | | | | (37,717,544 | ) | | | 17,298,560 | |
| | | | | | | | | | | | | | | | |
Net increase (decrease) in net assets | | | 1,164,892,996 | | | | 1,659,139,924 | | | | 244,298,058 | | | | 112,291,079 | |
| | | | | | | | | | | | | | | | |
NET ASSETS | | | | | | | | | | | | | | | | |
Beginning of period | | $ | 8,141,156,816 | | | $ | 6,482,016,892 | | | $ | 1,134,413,479 | | | $ | 1,022,122,400 | |
| | | | | | | | | | | | | | | | |
End of period | | $ | 9,306,049,812 | | | $ | 8,141,156,816 | | | $ | 1,378,711,537 | | | $ | 1,134,413,479 | |
| | | | | | | | | | | | | | | | |
Undistributed net investment income, at end of period | | $ | 37,254,923 | | | $ | 16,648,966 | | | $ | 4,095,292 | | | $ | 163,806 | |
| | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
60
| | | | | | | | | | | | | | |
| |
| International Fund | | | Pacific/Asia Fund | |
(Unaudited)
Six Months Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | | | (Unaudited)
Six Months Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | |
| | | | | | | | | | | | | | |
| $ | 2,610,833 | | | $ | 2,767,357 | | | $ | 330,368 | | | $ | (95,162 | ) |
|
35,340,577 |
| | | 25,080,151 | | | | 16,000,508 | | | | 29,682,511 | |
|
21,832,983 |
| | | 54,216,954 | | | | 14,071,830 | | | | (22,701,298 | ) |
| | | | | | | | | | | | | | | |
| | 59,784,393 | | | | 82,064,462 | | | | 30,402,706 | | | | 6,886,051 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | (2,909,679 | ) | | | (2,551,050 | ) | | | — | | | | — | |
| | — | | | | — | | | | — | | | | — | |
| | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | |
| | — | | | | — | | | | — | | | | (7,507,933 | ) |
| | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | |
| | (2,909,679 | ) | | | (2,551,050 | ) | | | — | | | | (7,507,933 | ) |
| | | | | | | | | | | | | | | |
| | 29,467,684 | | | | 35,143,298 | | | | (31,571,856 | ) | | | (30,209,902 | ) |
| | | | | | | | | | | | | | | |
| | 86,342,398 | | | | 114,656,710 | | | | (1,169,150 | ) | | | (30,831,784 | ) |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| $ | 636,941,147 | | | $ | 522,284,437 | | | $ | 213,132,443 | | | $ | 243,964,227 | |
| | | | | | | | | | | | | | | |
| $ | 723,283,545 | | | $ | 636,941,147 | | | $ | 211,963,293 | | | $ | 213,132,443 | |
| | | | | | | | | | | | | | | |
| | | |
| $ | 1,648 | | | $ | 300,494 | | | $ | 330,368 | | | $ | — | |
| | | | | | | | | | | | | | | |
See Notes to Financial Statements.
61
Excelsior Funds
Statements of Changes in Net Assets — Capital Stock Activity
| | | | | | | | | | | | |
| |
| | | Blended Equity Fund | |
| | | (Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | |
| | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
Changes in Shares | | | | | | | | | | | | |
Shares | | | | | | | | | | | | |
Subscriptions | | 113,793 | | | 4,241,494 | | | 756,712 | | | 27,714,455 | |
Subscriptions-in-kind | | — | | | — | | | — | | | — | |
Distributions reinvested | | 22,057 | | | 820,980 | | | 748,017 | | | 26,093,797 | |
Redemptions | | (1,052,003 | ) | | (39,408,245 | ) | | (2,516,153 | ) | | (92,450,787 | ) |
| | | | | | | | | | | | |
Net increase (decrease) | | (916,153 | ) | | (34,345,771 | ) | | (1,011,424 | ) | | (38,642,535 | ) |
Retirement Shares | | | | | | | | | | | | |
Distributions reinvested | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | |
Class A | | | | | | | | | | | | |
Subscriptions | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | |
Class C | | | | | | | | | | | | |
Subscriptions | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | |
Redemption Fees | | — | | | 94 | | | — | | | 708 | |
| | | | | | | | | | | | |
See Notes to Financial Statements.
62
| | | | | | | | | | | | | | | | | | | | | | |
| |
| Energy and Natural Resources Fund | | | Equity Income Fund | |
(Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | | | (Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | |
| Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| 8,707,393 | | | 225,076,874 | | | 7,858,261 | | | 196,905,145 | | | 966,389 | | | 9,544,654 | | | 4,666,621 | | | 41,851,327 | |
| — | | | — | | | — | | | — | | | — | | | — | | | 526,198 | | | 4,483,204 | |
| 20,786 | | | 543,368 | | | 3,247,628 | | | 72,274,154 | | | 53,793 | | | 527,860 | | | 77,298 | | | 675,808 | |
| (4,269,836 | ) | | (111,611,403 | ) | | (9,844,958 | ) | | (240,193,110 | ) | | (2,345,303 | ) | | (23,244,947 | ) | | (4,395,745 | ) | | (38,945,714 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| 4,458,343 | | | 114,008,839 | | | 1,260,931 | | | 28,986,189 | | | (1,325,121 | ) | | (13,172,433 | ) | | 874,372 | | | 8,064,625 | |
| | | | | | | | | | | | | | | | | | | | | | |
| — | | | — | | | — | | | — | | | 2 | | | 10 | | | 1 | | | 15 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| 362 | | | 10,000 | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| 362 | | | 10,000 | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| — | | | 4,330 | | | — | | | 3,316 | | | — | | | — | | | — | | | 70 | |
| | | | | | | | | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
63
Excelsior Funds
Statements of Changes in Net Assets — Capital Stock Activity — (continued)
| | | | | | | | | | | | |
| |
| | | Equity Opportunities Fund | |
| | | (Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | |
| | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
Changes in Shares | | | | | | | | | | | | |
Shares | | | | | | | | | | | | |
Subscriptions | | 3,925,144 | | | 59,329,430 | | | 11,404,243 | | | 151,491,788 | |
Distributions reinvested | | 22,381 | | | 338,329 | | | 12,057 | | | 154,087 | |
Redemptions | | (1,407,877 | ) | | (21,193,858 | ) | | (2,227,805 | ) | | (29,659,176 | ) |
| | | | | | | | | | | | |
Net increase | | 2,539,648 | | | 38,473,901 | | | 9,188,495 | | | 121,986,699 | |
Institutional Shares | | | | | | | | | | | | |
Subscriptions | | 72,851 | | | 1,075,963 | | | 944,747 | | | 12,184,733 | |
Distributions reinvested | | 3,270 | | | 49,371 | | | 3,799 | | | 48,632 | |
Redemptions | | (576,382 | ) | | (8,696,843 | ) | | (992,875 | ) | | (13,081,976 | ) |
Redemptions-in-kind | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | |
Net increase (decrease) | | (500,261 | ) | | (7,571,509 | ) | | (44,329 | ) | | (848,611 | ) |
Retirement Shares | | | | | | | | | | | | |
Subscriptions | | — | | | — | | | — | | | — | |
Distributions reinvested | | — | | | — | | | — | | | — | |
Redemptions | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | |
Net increase | | — | | | — | | | — | | | — | |
Class A | | | | | | | | | | | | |
Subscriptions | | 633 | | | 10,000 | | | — | | | — | |
| | | | | | | | | | | | |
Class C | | | | | | | | | | | | |
Subscriptions | | 633 | | | 10,000 | | | — | | | — | |
| | | | | | | | | | | | |
Redemption Fees | | — | | | 24 | | | — | | | 9,635 | |
| | | | | | | | | | | | |
See Notes to Financial Statements.
64
| | | | | | | | | | | | | | | | | | | | | | |
| |
| Large Cap Growth Fund | | | Mid Cap Value and Restructuring Fund | |
(Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | | | (Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | |
| Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| 8,464,143 | | | 94,946,565 | | | 26,983,018 | | | 268,887,660 | | | 1,559,841 | | | 35,513,246 | | | 3,915,673 | | | 81,532,520 | |
| — | | | — | | | — | | | — | | | 59,014 | | | 1,299,594 | | | 1,544 | | | 28,679 | |
| (6,290,633 | ) | | (70,638,170 | ) | | (14,969,954 | ) | | (147,806,621 | ) | | (1,296,696 | ) | | (29,206,361 | ) | | (2,387,520 | ) | | (47,782,321 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| 2,173,510 | | | 24,308,395 | | | 12,013,064 | | | 121,081,039 | | | 322,159 | | | 7,606,479 | | | 1,529,697 | | | 33,778,878 | |
| | | | | | | | | | | | | | | | | | | | | | |
| 639,159 | | | 7,008,651 | | | 1,518,333 | | | 15,997,075 | | | 87,974 | | | 2,059,041 | | | 174,817 | | | 3,499,002 | |
| — | | | — | | | — | | | — | | | 2,915 | | | 64,589 | | | 211 | | | 3,893 | |
| (23,086 | ) | | (255,856 | ) | | (10,095 | ) | | (106,750 | ) | | (184,991 | ) | | (4,291,248 | ) | | (435,896 | ) | | (8,797,430 | ) |
| — | | | — | | | — | | | — | | | — | | | — | | | (3,464,185 | ) | | (66,339,150 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| 616,073 | | | 6,752,795 | | | 1,508,238 | | | 15,890,325 | | | (94,102 | ) | | (2,167,618 | ) | | (3,725,053 | ) | | (71,633,685 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
| 745 | | | 8,171 | | | 172 | | | 1,807 | | | 36,280 | | | 821,293 | | | 51,153 | | | 1,086,065 | |
| — | | | — | | | — | | | — | | | 506 | | | 11,004 | | | — | | | — | |
| (77 | ) | | (822 | ) | | — | | | — | | | (6,911 | ) | | (153,942 | ) | | (118 | ) | | (2,475 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| 668 | | | 7,349 | | | 172 | | | 1,807 | | | 29,875 | | | 678,355 | | | 51,035 | | | 1,083,590 | |
| | | | | | | | | | | | | | | | | | | | | | |
| 821 | | | 10,000 | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| 821 | | | 10,000 | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| — | | | 8,815 | | | — | | | 9,835 | | | — | | | 37 | | | — | | | 1,778 | |
| | | | | | | | | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
65
Excelsior Funds
Statements of Changes in Net Assets — Capital Stock Activity — (continued)
| | | | | | | | | | | | |
| |
| | | Real Estate Fund | |
| | | (Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | |
| | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
Changes in Shares | | | | | | | | | | | | |
Shares | | | | | | | | | | | | |
Subscriptions | | 693,818 | | | 6,807,191 | | | 6,066,112 | | | 67,240,470 | |
Distributions reinvested | | — | | | — | | | 910,832 | | | 9,232,819 | |
Redemptions | | (5,381,002 | ) | | (60,209,720 | ) | | (4,921,193 | ) | | (54,217,167 | ) |
| | | | | | | | | | | | |
Net increase (decrease) | | (4,687,184 | ) | | (53,402,529 | ) | | 2,055,751 | | | 22,256,122 | |
Institutional Shares | | | | | | | | | | | | |
Subscriptions | | — | | | — | | | — | | | — | |
Distributions reinvested | | — | | | — | | | — | | | — | |
Redemptions | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | |
Net increase (decrease) | | — | | | — | | | — | | | — | |
Retirement Shares | | | | | | | | | | | | |
Subscriptions | | — | | | — | | | — | | | — | |
Distributions reinvested | | — | | | — | | | — | | | — | |
Redemptions | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | |
Net increase | | — | | | — | | | — | | | — | |
Class A | | | | | | | | | | | | |
Subscriptions | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | |
Class C | | | | | | | | | | | | |
Subscriptions | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | |
Redemption Fees | | — | | | 12 | | | — | | | 5,256 | |
| | | | | | | | | | | | |
See Notes to Financial Statements.
66
| | | | | | | | | | | | | | | | | | | | | | |
| |
| Small Cap Fund | | | Value and Restructuring Fund | |
(Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | | | (Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | |
| Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| 7,113,887 | | | 144,947,132 | | | 11,007,156 | | | 202,519,992 | | | 20,544,409 | | | 1,192,492,183 | | | 40,342,962 | | | 2,018,418,152 | |
| — | | | — | | | 873,688 | | | 15,909,286 | | | 737,965 | | | 42,355,044 | | | 1,056,240 | | | 51,956,233 | |
| (3,914,296 | ) | | (79,465,976 | ) | | (6,873,489 | ) | | (126,011,173 | ) | | (11,223,117 | ) | | (646,514,862 | ) | | (24,661,734 | ) | | (1,238,518,628 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| 3,199,591 | | | 65,481,156 | | | 5,007,355 | | | 92,418,105 | | | 10,059,257 | | | 588,332,365 | | | 16,737,468 | | | 831,855,757 | |
| | | | | | | | | | | | | | | | | | | | | | |
| — | | | — | | | — | | | — | | | 1,060,844 | | | 62,185,075 | | | 2,608,744 | | | 127,478,205 | |
| — | | | — | | | — | | | — | | | 39,759 | | | 2,272,698 | | | 59,732 | | | 2,938,434 | |
| — | | | — | | | — | | | — | | | (1,996,347 | ) | | (118,375,818 | ) | | (921,391 | ) | | (45,845,721 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| — | | | — | | | — | | | — | | | (895,744 | ) | | (53,918,045 | ) | | 1,747,085 | | | 84,570,918 | |
| | | | | | | | | | | | | | | | | | | | | | |
| 235,936 | | | 4,746,659 | | | 100,714 | | | 1,845,960 | | | 92,865 | | | 5,225,317 | | | 62,302 | | | 3,214,887 | |
| — | | | — | | | 211 | | | 3,801 | | | 331 | | | 18,993 | | | 99 | | | 4,928 | |
| (48,373 | ) | | (968,034 | ) | | (4,702 | ) | | (85,527 | ) | | (5,912 | ) | | (339,933 | ) | | (26,673 | ) | | (1,242,118 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| 187,563 | | | 3,778,625 | | | 96,223 | | | 1,764,234 | | | 87,284 | | | 4,904,377 | | | 35,728 | | | 1,977,697 | |
| | | | | | | | | | | | | | | | | | | | | | |
| 474 | | | 10,000 | | | — | | | — | | | 171 | | | 10,000 | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| 474 | | | 10,000 | | | — | | | — | | | 171 | | | 10,000 | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| — | | | — | | | — | | | 2,829 | | | — | | | 15,915 | | | — | | | 29,376 | |
| | | | | | | | | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
67
Excelsior Funds
Statements of Changes in Net Assets — Capital Stock Activity — (continued)
| | | | | | | | | | | | |
| |
| | | Emerging Markets Fund | |
| | | (Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | |
| | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
Changes in Shares | | | | | | | | | | | | |
Shares | | | | | | | | | | | | |
Subscriptions | | 6,757,305 | | | 107,664,154 | | | 28,426,163 | | | 377,247,582 | |
Distributions reinvested | | 182,628 | | | 2,891,003 | | | 2,899,020 | | | 39,144,568 | |
Redemptions | | (10,051,799 | ) | | (156,851,513 | ) | | (32,751,548 | ) | | (412,372,175 | ) |
| | | | | | | | | | | | |
Net increase (decrease) | | (3,111,866 | ) | | (46,296,356 | ) | | (1,426,365 | ) | | 4,019,975 | |
Institutional Shares | | | | | | | | | | | | |
Subscriptions | | 794,138 | | | 13,112,540 | | | 889,054 | | | 12,242,049 | |
Distributions reinvested | | 2,566 | | | 40,715 | | | 104,377 | | | 1,425,589 | |
Redemptions | | (282,072 | ) | | (4,597,514 | ) | | (35,905 | ) | | (493,380 | ) |
| | | | | | | | | | | | |
Net increase | | 514,632 | | | 8,555,741 | | | 957,526 | | | 13,174,258 | |
Class A | | | | | | | | | | | | |
Subscriptions | | 563 | | | 10,000 | | | — | | | — | |
| | | | | | | | | | | | |
Class C | | | | | | | | | | | | |
Subscriptions | | 563 | | | 10,000 | | | — | | | — | |
| | | | | | | | | | | | |
Redemption Fees | | — | | | 3,071 | | | — | | | 104,327 | |
| | | | | | | | | | | | |
See Notes to Financial Statements.
68
| | | | | | | | | | | | | | | | | | | | | | |
| |
| International Fund | | | Pacific / Asia Fund | |
(Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | | | (Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | |
| Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| 3,614,402 | | | 72,232,863 | | | 12,392,725 | | | 216,269,580 | | | 373,873 | | | 4,683,328 | | | 3,211,949 | | | 36,092,669 | |
| 34,970 | | | 698,358 | | | 53,302 | | | 824,056 | | | — | | | — | | | 244,088 | | | 2,750,870 | |
| (2,181,567 | ) | | (43,463,758 | ) | | (10,667,987 | ) | | (182,002,787 | ) | | (2,916,521 | ) | | (36,255,186 | ) | | (6,281,359 | ) | | (69,083,541 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| 1,467,805 | | | 29,467,463 | | | 1,778,040 | | | 35,090,849 | | | (2,542,648 | ) | | (31,571,858 | ) | | (2,825,322 | ) | | (30,240,002 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
| — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | |
| — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| — | | | 221 | | | — | | | 52,449 | | | — | | | 2 | | | — | | | 30,100 | |
| | | | | | | | | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
69
Financial Highlights – Blended Equity Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30,
2007 | | | Year Ended March 31, | |
| Shares | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 35.36 | | | $ | 37.27 | | | $ | 36.12 | | | $ | 33.64 | | | $ | 25.67 | | | $ | 35.17 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.14 | (a) | | | 0.25 | (a) | | | 0.19 | (a) | | | 0.30 | (a) | | | 0.14 | | | | 0.17 | |
Net realized and unrealized gain (loss) on investments and foreign currency | | | 3.51 | | | | 3.61 | | | | 3.67 | | | | 2.66 | | | | 7.99 | | | | (7.97 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 3.65 | | | | 3.86 | | | | 3.86 | | | | 2.96 | | | | 8.13 | | | | (7.80 | ) |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.18 | ) | | | (0.23 | ) | | | (0.21 | ) | | | (0.28 | ) | | | (0.16 | ) | | | (0.15 | ) |
From net realized gains | | | — | | | | (5.54 | ) | | | (2.50 | ) | | | (0.20 | ) | | | — | | | | (1.55 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | (0.18 | ) | | | (5.77 | ) | | | (2.71 | ) | | | (0.48 | ) | | | (0.16 | ) | | | (1.70 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 38.83 | | | $ | 35.36 | | | $ | 37.27 | | | $ | 36.12 | | | $ | 33.64 | | | $ | 25.67 | |
Total return (b)(c) | | | 10.35 | %(d) | | | 10.66 | % | | | 11.10 | % | | | 8.85 | % | | | 31.75 | % | | | (22.45 | )% |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (e) | | | 1.10 | %(f) | | | 1.10 | % | | | 1.08 | % | | | 1.05 | % | | | 0.99 | % | | | 0.96 | % |
Waiver/Reimbursement | | | 0.12 | %(f) | | | 0.11 | % | | | 0.13 | % | | | 0.19 | % | | | 0.11 | % | | | 0.15 | % |
Net investment income (e) | | | 0.70 | %(f) | | | 0.68 | % | | | 0.53 | % | | | 0.86 | % | | | 0.45 | % | | | 0.59 | % |
Portfolio turnover rate | | | 4 | %(d) | | | 10 | % | | | 22 | % | | | 19 | % | | | 24 | % | | | 36 | % |
Net assets, end of period (000’s) | | $ | 404,789 | | | $ | 401,023 | | | $ | 460,309 | | | $ | 466,903 | | | $ | 573,242 | | | $ | 469,013 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (c) | Total return at net asset value assuming all distributions reinvested. |
| (e) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
70
Financial Highlights – Energy and Natural Resources Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited)
Six Months
Ended
September 30, 2007 | | | Year Ended March 31, | |
| Shares | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 23.30 | | | $ | 25.99 | | | $ | 22.34 | | | $ | 16.45 | | | $ | 11.72 | | | $ | 14.40 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) | | | 0.02 | (a) | | | 0.06 | (a) | | | — | (a)(b) | | | 0.02 | (a) | | | 0.06 | | | | 0.04 | |
Net realized and unrealized gain (loss) on investments and foreign currency | | | 4.26 | | | | 2.50 | | | | 9.04 | | | | 6.99 | | | | 4.71 | | | | (2.67 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 4.28 | | | | 2.56 | | | | 9.04 | | | | 7.01 | | | | 4.77 | | | | (2.63 | ) |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.03 | ) | | | (0.06 | ) | | | — | | | | (0.05 | ) | | | (0.04 | ) | | | (0.05 | ) |
From net realized gains | | | — | | | | (5.19 | ) | | | (5.39 | ) | | | (1.07 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | (0.03 | ) | | | (5.25 | ) | | | (5.39 | ) | | | (1.12 | ) | | | (0.04 | ) | | | (0.05 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 27.55 | | | $ | 23.30 | | | $ | 25.99 | | | $ | 22.34 | | | $ | 16.45 | | | $ | 11.72 | |
Total return (c) | | | 18.37 | %(d)(e) | | | 10.84 | %(d) | | | 41.42 | % | | | 43.97 | %(d) | | | 40.84 | %(d) | | | (18.30 | )%(d) |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (f) | | | 1.08 | %(g) | | | 1.12 | % | | | 1.13 | % | | | 1.10 | % | | | 0.99 | % | | | 1.01 | % |
Waiver/Reimbursement | | | 0.03 | %(g) | | | 0.01 | % | | | — | | | | 0.05 | % | | | 0.14 | % | | | 0.18 | % |
Net investment income (loss)(f) | | | 0.19 | %(g) | | | 0.25 | % | | | (0.01 | )% | | | 0.12 | % | | | 0.45 | % | | | 0.35 | % |
Portfolio turnover rate | | | 99 | %(e) | | | 279 | % | | | 234 | % | | | 111 | % | | | 91 | % | | | 78 | % |
Net assets, end of period (000’s) | | $ | 711,241 | | | $ | 497,676 | | | $ | 522,506 | | | $ | 292,333 | | | $ | 150,035 | | | $ | 92,440 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Amount represents less than $0.01 per share. |
| (c) | Total return at net asset value assuming all distributions reinvested. |
| (d) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (f) | The benefits derived from custody credits had an impact of less than 0.01%, except for the year ended March 31, 2007, which had an impact of 0.01%. |
See Notes to Financial Statements.
71
Financial Highlights – Energy and Natural Resources Fund
Selected data for a share outstanding throughout the period is as follows:
| | | | |
| Class A Shares | | (Unaudited)
Period Ended
September 30,
2007 (a) | |
Net Asset Value, Beginning of Period | | $ | 27.64 | |
| |
Income from Investment Operations: | | | | |
Net investment loss (b) | | | — | (c) |
Net realized and unrealized loss on investments and foreign currency | | | (0.09 | ) |
| | | | |
Total from Investment Operations | | | (0.09 | ) |
| |
Net Asset Value, End of Period | | $ | 27.55 | |
Total return (d)(e)(f) | | | (0.33 | )% |
| |
Ratios to Average Net Assets/Supplemental Data: | | | | |
Net expenses (g)(h) | | | 1.49 | % |
Waiver/Reimbursement (h) | | | 0.05 | % |
Net investment loss (g)(h) | | | (1.21 | )% |
Portfolio turnover rate (e) | | | 99 | % |
Net assets, end of period (000’s) | | $ | 10 | |
| (a) | Class A Shares commenced operations on September 28, 2007. Per share data and total return reflect activity from that date. |
| (b) | Per share data was calculated using the average shares outstanding during the period. |
| (c) | Amount represents less than $0.01 per share. |
| (d) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (f) | Total return at net asset value assuming no initial sales charge or contingent deferred sales charge. |
| (g) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
72
Financial Highlights – Energy and Natural Resources Fund
Selected data for a share outstanding throughout the period is as follows:
| | | | |
| Class C Shares | | (Unaudited)
Period Ended
September 30,
2007 (a) | |
Net Asset Value, Beginning of Period | | $ | 27.64 | |
| |
Income from Investment Operations: | | | | |
Net investment loss (b) | | | (0.01 | ) |
Net realized and unrealized loss on investments and foreign currency | | | (0.08 | ) |
| | | | |
Total from Investment Operations | | | (0.09 | ) |
| |
Net Asset Value, End of Period | | $ | 27.55 | |
Total return (c)(d)(e) | | | (0.33 | )% |
| |
Ratios to Average Net Assets/Supplemental Data: | | | | |
Net expenses (f)(g) | | | 2.24 | % |
Waiver/Reimbursement (g) | | | 0.05 | % |
Net investment loss (f)(g) | | | (1.96 | )% |
Portfolio turnover rate (d) | | | 99 | % |
Net assets, end of period (000’s) | | $ | 10 | |
| (a) | Class C Shares commenced operations on September 28, 2007. Per share data and total return reflect activity from that date. |
| (b) | Per share data was calculated using the average shares outstanding during the period. |
| (c) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (e) | Total return at net asset value assuming no contingent deferred sales charge. |
| (f) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
73
Financial Highlights – Equity Income Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended September 30,
2007 | | | Year Ended March 31, | | | Period
Ended
March 31, 2004 (a) | |
| Shares | | | 2007 | | | 2006 | | | 2005 | | |
Net Asset Value, Beginning of Period | | $ | 9.51 | | | $ | 8.56 | | | $ | 8.39 | | | $ | 7.76 | | | $ | 7.00 | |
| | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.09 | (b) | | | 0.16 | (b) | | | 0.20 | (b) | | | 0.19 | (b) | | | 0.07 | |
Net realized and unrealized gain on investments, foreign currency and written options | | | 0.51 | | | | 0.96 | | | | 0.17 | | | | 0.63 | | | | 0.73 | |
| | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.60 | | | | 1.12 | | | | 0.37 | | | | 0.82 | | | | 0.80 | |
| | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.13 | ) | | | (0.17 | ) | | | (0.18 | ) | | | (0.17 | ) | | | (0.04 | ) |
From net realized gains | | | — | | | | — | | | | (0.02 | ) | | | (0.02 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | (0.13 | ) | | | (0.17 | ) | | | (0.20 | ) | | | (0.19 | ) | | | (0.04 | ) |
| | | | | |
Net Asset Value, End of Period | | $ | 9.98 | | | $ | 9.51 | | | $ | 8.56 | | | $ | 8.39 | | | $ | 7.76 | |
Total return (c)(d) | | | 6.33 | %(e) | | | 13.29 | % | | | 4.62 | % | | | 10.73 | % | | | 11.48 | %(e) |
| | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | |
Net expenses before interest expense (f) | | | 1.10 | %(g) | | | 1.10 | % | | | 1.06 | % | | | 1.05 | % | | | 1.05 | %(g) |
Interest expense | | | — | %(g)(h) | | | — | | | | — | | | | — | | | | — | |
Net expenses (f) | | | 1.10 | %(g) | | | 1.10 | % | | | 1.06 | % | | | 1.05 | % | | | 1.05 | %(g) |
Waiver/Reimbursement | | | 0.11 | %(g) | | | 0.11 | % | | | 0.16 | % | | | 0.21 | % | | | 0.12 | %(g) |
Net investment income (f) | | | 1.87 | %(g) | | | 1.80 | % | | | 2.41 | % | | | 2.35 | % | | | 2.44 | %(g) |
Portfolio turnover rate | | | 6 | %(e) | | | 27 | % | | | 46 | % | | | 19 | % | | | 6 | %(e) |
Net assets, end of period (000’s) | | $ | 235,595 | | | $ | 237,003 | | | $ | 205,853 | | | $ | 195,668 | | | $ | 100,024 | |
| (a) | Shares commenced operations on September 30, 2003. Per share data and total return reflect activity from that date. |
| (b) | Per share data was calculated using the average shares outstanding during the period. |
| (c) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (d) | Total return at net asset value assuming all distributions reinvested. |
| (f) | The benefits derived from custody credits had an impact of less than 0.01%. |
| (h) | Rounds to less than 0.01%. |
See Notes to Financial Statements.
74
Financial Highlights – Equity Opportunities Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30,
2007 | | | Year Ended March 31, | |
| Shares | | | 2007 | | | 2006 | | | 2005 | |
Net Asset Value, Beginning of Period | | $ | 14.17 | | | $ | 12.70 | | | $ | 10.98 | | | $ | 10.00 | |
| | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | |
Net investment income (a) | | | 0.05 | | | | 0.07 | | | | 0.07 | | | | 0.08 | |
Net realized and unrealized gain on investments and foreign currency | | | 1.67 | | | | 1.47 | | | | 1.70 | | | | 0.95 | |
| | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 1.72 | | | | 1.54 | | | | 1.77 | | | | 1.03 | |
| | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | |
From net investment income | | | (0.07 | ) | | | (0.07 | ) | | | (0.05 | ) | | | (0.04 | ) |
From net realized gains | | | — | | | | — | | | | — | | | | (0.01 | ) |
| | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | (0.07 | ) | | | (0.07 | ) | | | (0.05 | ) | | | (0.05 | ) |
| | | | |
Net Asset Value, End of Period | | $ | 15.82 | | | $ | 14.17 | | | $ | 12.70 | | | $ | 10.98 | |
Total return (b)(c) | | | 12.16 | %(d) | | | 12.18 | % | | | 16.16 | % | | | 10.30 | % |
| | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | |
Net expenses (e) | | | 1.05 | %(f) | | | 1.04 | % | | | 1.05 | % | | | 1.05 | % |
Waiver/Reimbursement | | | 0.19 | %(f) | | | 0.20 | % | | | 0.26 | % | | | 0.54 | % |
Net investment income (e) | | | 0.70 | %(f) | | | 0.56 | % | | | 0.57 | % | | | 0.74 | % |
Portfolio turnover rate | | | 12 | %(d) | | | 11 | % | | | 17 | % | | | 13 | % |
Net assets, end of period (000’s) | | $ | 350,542 | | | $ | 277,877 | | | $ | 132,406 | | | $ | 43,579 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (c) | Total return at net asset value assuming all distributions reinvested. |
| (e) | The benefits derived from custody credits had an impact of less than 0.01%, except for the year ended March 31, 2007, which had an impact of 0.01%. |
See Notes to Financial Statements.
75
Financial Highlights – Equity Opportunities Fund
Selected data for a share outstanding throughout the period is as follows:
| | | | |
| Class A Shares | | (Unaudited) Period Ended
September 30,
2007 (a) | |
Net Asset Value, Beginning of Period | | $ | 15.80 | |
| |
Income from Investment Operations: | | | | |
Net investment loss (b) | | | — | (c) |
Net realized and unrealized gain on investments and foreign currency | | | 0.02 | |
| | | | |
Total from Investment Operations | | | 0.02 | |
| |
Net Asset Value, End of Period | | $ | 15.82 | |
Total return (d)(e)(f) | | | 0.13 | % |
| |
Ratios to Average Net Assets/Supplemental Data: | | | | |
Net expenses (g)(h) | | | 1.16 | % |
Waiver/Reimbursement (h) | | | 0.05 | % |
Net investment loss (g)(h) | | | (0.63 | )% |
Portfolio turnover rate (e) | | | 12 | % |
Net assets, end of period (000’s) | | $ | 10 | |
| (a) | Class A Shares commenced operations on September 28, 2007. Per share data and total return reflect activity from that date. |
| (b) | Per share data was calculated using the average shares outstanding during the period. |
| (c) | Amount represents less than $0.01 per share. |
| (d) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (f) | Total return at net asset value assuming no initial sales charge or contingent deferred sales charge. |
| (g) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
76
Financial Highlights – Equity Opportunities Fund
Selected data for a share outstanding throughout the period is as follows:
| | | | |
| Class C Shares | | (Unaudited) Period Ended
September 30,
2007 (a) | |
Net Asset Value, Beginning of Period | | $ | 15.80 | |
| |
Income from Investment Operations: | | | | |
Net investment loss (b) | | | — | (c) |
Net realized and unrealized gain on investments and foreign currency | | | 0.02 | |
| | | | |
Total from Investment Operations | | | 0.02 | |
| |
Net Asset Value, End of Period | | $ | 15.82 | |
Total return (d)(e)(f) | | | 0.13 | % |
| |
Ratios to Average Net Assets/Supplemental Data: | | | | |
Net expenses (g)(h) | | | 1.91 | % |
Waiver/Reimbursement (h) | | | 0.05 | % |
Net investment loss (g)(h) | | | (1.39 | )% |
Portfolio turnover rate (e) | | | 12 | % |
Net assets, end of period (000’s) | | $ | 10 | |
| (a) | Class C Shares commenced operations on September 28, 2007. Per share data and total return reflect activity from that date. |
| (b) | Per share data was calculated using the average shares outstanding during the period. |
| (c) | Amount represents less than $0.01 per share. |
| (d) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (f) | Total return at net asset value assuming no contingent deferred sales charge. |
| (g) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
77
Financial Highlights – Large Cap Growth Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30,
2007 | | | Year Ended March 31, | |
| Shares | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 10.60 | | | $ | 9.91 | | | $ | 8.04 | | | $ | 7.71 | | | $ | 5.79 | | | $ | 8.83 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment loss (a) | | | (0.04 | ) | | | (0.07 | ) | | | (0.04 | ) | | | (0.05 | ) | | | (0.05 | ) | | | (0.01 | ) |
Net realized and unrealized gain (loss) on investments | | | 1.59 | | | | 0.76 | | | | 1.91 | | | | 0.38 | | | | 1.97 | | | | (3.03 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 1.55 | | | | 0.69 | | | | 1.87 | | | | 0.33 | | | | 1.92 | | | | (3.04 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 12.15 | | | $ | 10.60 | | | $ | 9.91 | | | $ | 8.04 | | | $ | 7.71 | | | $ | 5.79 | |
Total return (b)(c) | | | 14.62 | %(d) | | | 6.96 | % | | | 23.26 | % | | | 4.28 | % | | | 33.16 | % | | | (34.43 | )% |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (e) | | | 1.19 | %(f) | | | 1.20 | % | | | 1.10 | % | | | 1.05 | % | | | 1.05 | % | | | 1.04 | % |
Waiver/Reimbursement | | | 0.03 | %(f) | | | — | | | | 0.13 | % | | | 0.23 | % | | | 0.13 | % | | | 0.17 | % |
Net investment loss (e) | | | (0.76 | )%(f) | | | (0.68 | )% | | | (0.48 | )% | | | (0.59 | )% | | | (0.74 | )% | | | (0.21 | )% |
Portfolio turnover rate | | | 23 | %(d) | | | 33 | % | | | 24 | % | | | 25 | % | | | 79 | % | | | 56 | % |
Net assets, end of period (000’s) | | $ | 849,897 | | | $ | 718,424 | | | $ | 552,194 | | | $ | 210,060 | | | $ | 127,231 | | | $ | 73,894 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (c) | Total return at net asset value assuming all distributions reinvested. |
| (e) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
78
Financial Highlights – Large Cap Growth Fund
Selected data for a share outstanding throughout the period is as follows:
| | | | |
| Class A Shares | | (Unaudited) Period Ended
September 30,
2007 (a) | |
Net Asset Value, Beginning of Period | | $ | 12.18 | |
| |
Income from Investment Operations: | | | | |
Net investment loss (b) | | | — | (c) |
Net realized and unrealized loss on investments | | | (0.03 | ) |
| | | | |
Total from Investment Operations | | | (0.03 | ) |
| |
Net Asset Value, End of Period | | $ | 12.15 | |
Total return (d)(e)(f) | | | (0.25 | )% |
| |
Ratios to Average Net Assets/Supplemental Data: | | | | |
Net expenses (g)(h) | | | 1.42 | % |
Waiver/Reimbursement (h) | | | 0.05 | % |
Net investment loss (g)(h) | | | (1.36 | )% |
Portfolio turnover rate (e) | | | 23 | % |
Net assets, end of period (000’s) | | $ | 10 | |
| (a) | Class A Shares commenced operations on September 28, 2007. Per share data and total return reflect activity from that date. |
| (b) | Per share data was calculated using the average shares outstanding during the period. |
| (c) | Amount represents less than $0.01 per share. |
| (d) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (f) | Total return at net asset value assuming no initial sales charge or contingent deferred sales charge. |
| (g) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
79
Financial Highlights – Large Cap Growth Fund
Selected data for a share outstanding throughout the period is as follows:
| | | | |
| Class C Shares | | (Unaudited) Period Ended
September 30,
2007 (a) | |
Net Asset Value, Beginning of Period | | $ | 12.18 | |
| |
Income from Investment Operations: | | | | |
Net investment loss (b) | | | — | (c) |
Net realized and unrealized loss on investments | | | (0.03 | ) |
| | | | |
Total from Investment Operations | | | (0.03 | ) |
| |
Net Asset Value, End of Period | | $ | 12.15 | |
Total return (d)(e)(f) | | | (0.25 | )% |
| |
Ratios to Average Net Assets/Supplemental Data: | | | | |
Net expenses (g)(h) | | | 2.17 | % |
Waiver/Reimbursement (h) | | | 0.05 | % |
Net investment loss (g)(h) | | | (2.12 | )% |
Portfolio turnover rate (e) | | | 23 | % |
Net assets, end of period (000’s) | | $ | 10 | |
| (a) | Class C Shares commenced operations on September 28, 2007. Per share data and total return reflect activity from that date. |
| (b) | Per share data was calculated using the average shares outstanding during the period. |
| (c) | Amount represents less than $0.01. |
| (d) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (f) | Total return at net asset value assuming no contingent deferred sales charge. |
| (g) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
80
Financial Highlights – Mid Cap Value and Restructuring Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30,
2007 | | | Year Ended March 31, | |
Shares | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 21.61 | | | $ | 19.64 | | | $ | 16.77 | | | $ | 15.75 | | | $ | 10.24 | | | $ | 13.29 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (a) | | | 0.20 | | | | 0.23 | | | | — | (b) | | | 0.23 | | | | 0.03 | | | | 0.02 | |
Net realized and unrealized gain (loss) on investments and foreign currency | | | 1.47 | | | | 1.75 | | | | 2.90 | | | | 1.02 | | | | 5.51 | | | | (3.05 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 1.67 | | | | 1.98 | | | | 2.90 | | | | 1.25 | | | | 5.54 | | | | (3.03 | ) |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.22 | ) | | | (0.01 | ) | | | (0.03 | ) | | | (0.23 | ) | | | (0.03 | ) | | | (0.02 | ) |
From net realized gains | | | — | | | | — | (b) | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | (0.22 | ) | | | (0.01 | ) | | | (0.03 | ) | | | (0.23 | ) | | | (0.03 | ) | | | (0.02 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 23.06 | | | $ | 21.61 | | | $ | 19.64 | | | $ | 16.77 | | | $ | 15.75 | | | $ | 10.24 | |
Total return (c) | | | 7.77 | %(d)(e) | | | 10.07 | % | | | 17.32 | % | | | 7.93 | %(d) | | | 54.21 | %(d) | | | (22.81 | )%(d) |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (f) | | | 1.12 | %(g) | | | 1.13 | % | | | 1.13 | % | | | 1.06 | % | | | 0.99 | % | | | 1.01 | % |
Waiver/Reimbursement | | | 0.03 | %(g) | | | — | | | | — | | | | 0.10 | % | | | 0.24 | % | | | 0.14 | % |
Net investment income (f) | | | 1.78 | %(g) | | | 1.12 | % | | | 0.02 | % | | | 1.42 | % | | | 0.24 | % | | | 0.20 | % |
Portfolio turnover rate | | | 4 | %(e) | | | 25 | % | | | 23 | % | | | 28 | % | | | 13 | % | | | 28 | % |
Net assets, end of period (000’s) | | $ | 321,636 | | | $ | 294,452 | | | $ | 237,531 | | | $ | 214,844 | | | $ | 186,720 | | | $ | 81,146 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Amount represents less than $0.01 per share. |
| (c) | Total return at net asset value assuming all distributions reinvested. |
| (d) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (f) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
81
Financial Highlights – Real Estate Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30,
2007 | | | Year Ended March 31, | |
| Shares | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 11.52 | | | $ | 11.46 | | | $ | 9.30 | | | $ | 9.17 | | | $ | 6.61 | | | $ | 7.10 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (a) | | | 0.07 | | | | 0.08 | | | | 0.08 | | | | 0.17 | | | | 0.29 | | | | 0.28 | |
Net realized and unrealized gain (loss) on investments | | | (1.02 | ) | | | 1.78 | | | | 3.10 | | | | 0.68 | | | | 2.64 | | | | (0.52 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | (0.95 | ) | | | 1.86 | | | | 3.18 | | | | 0.85 | | | | 2.93 | | | | (0.24 | ) |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | — | | | | (0.08 | ) | | | (0.19 | ) | | | (0.22 | ) | | | (0.31 | ) | | | (0.25 | ) |
From net realized gains | | | — | | | | (1.66 | ) | | | (0.83 | ) | | | (0.50 | ) | | | (0.06 | ) | | | — | |
Return of capital | | | — | | | | (0.06 | ) | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | — | | | | (1.80 | ) | | | (1.02 | ) | | | (0.72 | ) | | | (0.37 | ) | | | (0.25 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 10.57 | | | $ | 11.52 | | | $ | 11.46 | | | $ | 9.30 | | | $ | 9.17 | | | $ | 6.61 | |
Total return (b)(c) | | | (8.25 | )%(d) | | | 19.36 | % | | | 36.03 | % | | | 9.90 | % | | | 45.65 | % | | | (3.49 | )% |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (e) | | | 1.25 | %(f) | | | 1.25 | % | | | 1.23 | % | | | 1.20 | % | | | 1.20 | % | | | 1.17 | % |
Waiver/Reimbursement | | | 0.38 | %(f) | | | 0.28 | % | | | 0.29 | % | | | 0.36 | % | | | 0.15 | % | | | 0.06 | % |
Net investment income (e) | | | 1.22 | %(f) | | | 0.71 | % | | | 0.77 | % | | | 1.89 | % | | | 3.67 | % | | | 4.09 | % |
Portfolio turnover rate | | | 41 | %(d) | | | 38 | % | | | 14 | % | | | 17 | % | | | 38 | % | | | 23 | % |
Net assets, end of period (000’s) | | $ | 89,892 | | | $ | 152,026 | | | $ | 127,628 | | | $ | 112,889 | | | $ | 122,874 | | | $ | 79,374 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (c) | Total return at net asset value assuming all distributions reinvested. |
| (e) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
82
Financial Highlights – Small Cap Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30,
2007 | | | Year Ended March 31, | |
| Shares | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 19.21 | | | $ | 19.23 | | | $ | 16.14 | | | $ | 14.59 | | | $ | 8.47 | | | $ | 12.19 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment loss (a) | | | (0.06 | ) | | | (0.12 | ) | | | (0.11 | ) | | | (0.10 | ) | | | (0.02 | ) | | | (0.03 | ) |
Net realized and unrealized gain (loss) on investments | | | 1.78 | | | | 1.36 | | | | 4.09 | | | | 1.65 | | | | 6.14 | | | | (3.69 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 1.72 | | | | 1.24 | | | | 3.98 | | | | 1.55 | | | | 6.12 | | | | (3.72 | ) |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net realized gains | | | — | | | | (1.26 | ) | | | (0.89 | ) | | | — | | | | — | | | | — | |
| | | | | | |
Net Asset Value, End of Period | | $ | 20.93 | | | $ | 19.21 | | | $ | 19.23 | | | $ | 16.14 | | | $ | 14.59 | | | $ | 8.47 | |
Total return (b) | | | 8.95 | %(c)(d) | | | 6.83 | % | | | 25.37 | %(d) | | | 10.62 | %(d) | | | 72.26 | %(d) | | | (30.52 | )%(d) |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (e) | | | 1.21 | %(f) | | | 1.22 | % | | | 1.09 | % | | | 1.05 | % | | | 0.83 | % | | | 0.83 | % |
Waiver/Reimbursement | | | 0.03 | %(f) | | | — | | | | 0.02 | % | | | 0.03 | % | | | 0.15 | % | | | 0.22 | % |
Net investment loss (e) | | | (0.54 | )%(f) | | | (0.66 | )% | | | (0.64 | )% | | | (0.64 | )% | | | (0.20 | )% | | | (0.31 | )% |
Portfolio turnover rate | | | 35 | %(c) | | | 52 | % | | | 65 | % | | | 61 | % | | | 82 | % | | | 105 | % |
Net assets, end of period (000’s) | | $ | 823,980 | | | $ | 694,765 | | | $ | 599,389 | | | $ | 488,221 | | | $ | 352,457 | | | $ | 156,324 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Total return at net asset value assuming all distributions reinvested. |
| (d) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (e) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
83
Financial Highlights – Small Cap Fund
Selected data for a share outstanding throughout the period is as follows:
| | | | |
| Class A Shares | | (Unaudited)
Period Ended
September 30,
2007 (a) | |
Net Asset Value, Beginning of Period | | $ | 21.11 | |
| |
Income from Investment Operations: | | | | |
Net investment loss (b) | | | — | (c) |
Net realized and unrealized loss on investments | | | (0.18 | ) |
| | | | |
Total from Investment Operations | | | (0.18 | ) |
| |
Net Asset Value, End of Period | | $ | 20.93 | |
Total return (d)(e)(f) | | | (0.85 | )% |
| |
Ratios to Average Net Assets/Supplemental Data: | | | | |
Net expenses (g)(h) | | | 1.36 | % |
Waiver/Reimbursement (h) | | | 0.05 | % |
Net investment loss (g)(h) | | | (1.34 | )% |
Portfolio turnover rate (e) | | | 35 | % |
Net assets, end of period (000’s) | | $ | 10 | |
| (a) | Class A Shares commenced operations on September 28, 2007. Per share data and total return reflect activity from that date. |
| (b) | Per share data was calculated using the average shares outstanding during the period. |
| (c) | Amount represents less than $0.01 per share. |
| (d) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (f) | Total return at net asset value assuming no initial sales charge or contingent deferred sales charge. |
| (g) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
84
Financial Highlights – Small Cap Fund
Selected data for a share outstanding throughout the period is as follows:
| | | | |
| Class C Shares | | (Unaudited)
Period Ended
September 30,
2007 (a) | |
Net Asset Value, Beginning of Period | | $ | 21.11 | |
| |
Income from Investment Operations: | | | | |
Net investment loss (b) | | | — | (c) |
Net realized and unrealized loss on investments | | | (0.18 | ) |
| | | | |
Total from Investment Operations | | | (0.18 | ) |
| |
Net Asset Value, End of Period | | $ | 20.93 | |
Total return (d)(e)(f) | | | (0.85 | )% |
| |
Ratios to Average Net Assets/Supplemental Data: | | | | |
Net expenses (g)(h) | | | 2.11 | % |
Waiver/Reimbursement (h) | | | 0.05 | % |
Net investment loss (g)(h) | | | (2.09 | )% |
Portfolio turnover rate (e) | | | 35 | % |
Net assets, end of period (000’s) | | $ | 10 | |
| (a) | Class C Shares commenced operations on September 28, 2007. Per share data and total return reflect activity from that date. |
| (b) | Per share data was calculated using the average shares outstanding during the period. |
| (c) | Amount represents less than $0.01 per share. |
| (d) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (f) | Total return at net asset value assuming no contingent deferred sales charge. |
| (g) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
85
Financial Highlights – Value and Restructuring Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited)
Six Months
Ended
September 30,
2007 | | | Year Ended March 31, | |
| Shares | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 54.33 | | | $ | 49.36 | | | $ | 41.40 | | | $ | 37.57 | | | $ | 23.66 | | | $ | 32.63 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.49 | (a) | | | 0.45 | (a) | | | 0.53 | (a) | | | 0.34 | (a) | | | 0.24 | | | | 0.17 | |
Net realized and unrealized gain (loss) on investments, foreign currency and written options | | | 4.03 | | | | 5.00 | | | | 7.88 | | | | 3.83 | | | | 13.90 | | | | (9.01 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 4.52 | | | | 5.45 | | | | 8.41 | | | | 4.17 | | | | 14.14 | | | | (8.84 | ) |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.35 | ) | | | (0.48 | ) | | | (0.45 | ) | | | (0.34 | ) | | | (0.23 | ) | | | (0.13 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 58.50 | | | $ | 54.33 | | | $ | 49.36 | | | $ | 41.40 | | | $ | 37.57 | | | $ | 23.66 | |
Total return (b) | | | 8.34 | (c)(d) | | | 11.14 | % | | | 20.45 | % | | | 11.16 | %(c) | | | 60.06 | %(c) | | | (27.13 | )%(c) |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (e) | | | 1.03 | %(f) | | | 1.05 | % | | | 1.05 | % | | | 1.07 | % | | | 0.99 | % | | | 0.99 | % |
Waiver/Reimbursement | | | 0.03 | %(f) | | | — | | | | — | | | | 0.02 | % | | | 0.15 | % | | | 0.13 | % |
Net investment income (e) | | | 1.68 | %(f) | | | 0.90 | % | | | 1.18 | % | | | 0.87 | % | | | 0.78 | % | | | 0.65 | % |
Portfolio turnover rate | | | 5 | %(d) | | | 13 | % | | | 12 | % | | | 8 | % | | | 4 | % | | | 16 | % |
Net assets, end of period (000’s) | | $ | 8,951,377 | | | $ | 7,767,713 | | | $ | 6,230,754 | | | $ | 4,469,075 | | | $ | 3,244,851 | | | $ | 1,558,721 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Total return at net asset value assuming all distributions reinvested. |
| (c) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (e) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
86
Financial Highlights – Value and Restructuring Fund
Selected data for a share outstanding throughout the period is as follows:
| | | | |
| Class A Shares | | (Unaudited) Period Ended
September 30,
2007 (a) | |
Net Asset Value, Beginning of Period | | $ | 58.58 | |
| |
Income from Investment Operations: | | | | |
Net investment loss (b) | | | — | (c) |
Net realized and unrealized loss on investments, foreign currency
and written options | | | (0.08 | ) |
| | | | |
Total from Investment Operations | | | (0.08 | ) |
| |
Net Asset Value, End of Period | | $ | 58.50 | |
Total return (d)(e)(f) | | | (0.13 | )% |
| |
Ratios to Average Net Assets/Supplemental Data: | | | | |
Net expenses (g)(h) | | | 1.24 | % |
Waiver/Reimbursement (h) | | | 0.05 | % |
Net investment loss (g)(h) | | | (0.10 | )% |
Portfolio turnover rate (e) | | | 5 | % |
Net assets, end of period (000’s) | | $ | 10 | |
| (a) | Class A Shares commenced operations on September 28, 2007. Per share data and total return reflect activity from that date. |
| (b) | Per share data was calculated using the average shares outstanding during the period. |
| (c) | Amount represents less than $0.01 per share. |
| (d) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (f) | Total return at net asset value assuming no initial sales charge or contingent deferred sales charge. |
| (g) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
87
Financial Highlights – Value and Restructuring Fund
Selected data for a share outstanding throughout the period is as follows:
| | | | |
| Class C Shares | | (Unaudited)
Period Ended
September 30,
2007 (a) | |
Net Asset Value, Beginning of Period | | $ | 58.58 | |
| |
Income from Investment Operations: | | | | |
Net investment loss (b) | | | — | (c) |
Net realized and unrealized loss on investments, foreign currency and written options | | | (0.08 | ) |
| | | | |
Total from Investment Operations | | | (0.08 | ) |
| |
Net Asset Value, End of Period | | $ | 58.50 | |
Total return (d)(e)(f) | | | (0.13 | )% |
| |
Ratios to Average Net Assets/Supplemental Data: | | | | |
Net expenses (g)(h) | | | 1.99 | % |
Waiver/Reimbursement (h) | | | 0.05 | % |
Net investment loss (g)(h) | | | (0.86 | )% |
Portfolio turnover rate (e) | | | 5 | % |
Net assets, end of period (000’s) | | $ | 10 | |
| (a) | Class C Shares commenced operations on September 28, 2007. Per share data and total return reflect activity from that date. |
| (b) | Per share data was calculated using the average shares outstanding during the period. |
| (c) | Amount represents less than $0.01 per share. |
| (d) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (f) | Total return at net asset value assuming no contingent deferred sales charge. |
| (g) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
88
Financial Highlights – Emerging Markets Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended September 30, 2007 | | | Year Ended March 31, | |
| Shares | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 14.06 | | | $ | 12.60 | | | $ | 8.73 | | | $ | 7.67 | | | $ | 4.12 | | | $ | 4.95 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.11 | (a) | | | 0.07 | (a) | | | 0.10 | (a) | | | 0.12 | (a) | | | 0.05 | | | | 0.02 | |
Net realized and unrealized gain (loss) on investments and foreign currency | | | 3.55 | | | | 2.16 | | | | 3.87 | | | | 1.18 | | | | 3.55 | | | | (0.84 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 3.66 | | | | 2.23 | | | | 3.97 | | | | 1.30 | | | | 3.60 | | | | (0.82 | ) |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.06 | ) | | | (0.08 | ) | | | (0.10 | ) | | | (0.08 | ) | | | (0.05 | ) | | | (0.01 | ) |
From net realized gains | | | — | | | | (0.69 | ) | | | — | | | | (0.16 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | (0.06 | ) | | | (0.77 | ) | | | (0.10 | ) | | | (0.24 | ) | | | (0.05 | ) | | | (0.01 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 17.66 | | | $ | 14.06 | | | $ | 12.60 | | | $ | 8.73 | | | $ | 7.67 | | | $ | 4.12 | |
Total return (b)(c) | | | 26.07 | %(d) | | | 17.98 | % | | | 45.85 | % | | | 17.07 | % | | | 87.57 | % | | | (16.62 | )% |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (e) | | | 1.85 | %(f) | | | 1.85 | % | | | 1.81 | % | | | 1.70 | % | | | 1.65 | % | | | 1.61 | % |
Waiver/Reimbursement | | | 0.06 | %(f) | | | 0.05 | % | | | 0.11 | % | | | 0.20 | % | | | 0.27 | % | | | 0.23 | % |
Net investment income (e) | | | 1.37 | %(f) | | | 0.50 | % | | | 1.00 | % | | | 1.44 | % | | | 0.81 | % | | | 0.51 | % |
Portfolio turnover rate | | | 9 | %(d) | | | 16 | % | | | 7 | % | | | 21 | % | | | 14 | % | | | 43 | % |
Net assets, end of period (000’s) | | $ | 1,316,885 | | | $ | 1,092,481 | | | $ | 996,666 | | | $ | 433,168 | | | $ | 209,161 | | | $ | 30,049 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (c) | Total return at net asset value assuming all distributions reinvested. |
| (e) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
89
Financial Highlights – Emerging Markets Fund
Selected data for a share outstanding throughout the period is as follows:
| | | | |
| Class A Shares | | (Unaudited) Period Ended
September 30,
2007 (a) | |
Net Asset Value, Beginning of Period | | $ | 17.77 | |
| |
Income from Investment Operations: | | | | |
Net investment income (b) | | | — | (c) |
Net realized and unrealized loss on investments and foreign currency | | | (0.11 | ) |
| | | | |
Total from Investment Operations | | | (0.11 | ) |
| |
Net Asset Value, End of Period | | $ | 17.66 | |
Total return (d)(e)(f) | | | (0.62 | )% |
| |
Ratios to Average Net Assets/Supplemental Data: | | | | |
Net expenses (g)(h) | | | 1.50 | % |
Waiver/Reimbursement (h) | | | 0.05 | % |
Net investment income (g)(h) | | | 0.85 | % |
Portfolio turnover rate (e) | | | 9 | % |
Net assets, end of period (000’s) | | $ | 10 | |
| (a) | Class A Shares commenced operations on September 28, 2007. Per share data and total return reflect activity from that date. |
| (b) | Per share data was calculated using the average shares outstanding during the period. |
| (c) | Amount represents less than $0.01 per share. |
| (d) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (f) | Total return at net asset value assuming no initial sales charge or contingent deferred sales charge. |
| (g) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
90
Financial Highlights – Emerging Markets Fund
Selected data for a share outstanding throughout the period is as follows:
| | | | |
| Class C Shares | | (Unaudited) Period Ended
September 30,
2007 (a) | |
Net Asset Value, Beginning of Period | | $ | 17.77 | |
| |
Income from Investment Operations: | | | | |
Net investment loss (b) | | | — | (c) |
Net realized and unrealized loss on investments and foreign currency | | | (0.11 | ) |
| | | | |
Total from Investment Operations | | | (0.11 | ) |
| |
Net Asset Value, End of Period | | $ | 17.66 | |
Total return (d)(e)(f) | | | (0.62 | )% |
| |
Ratios to Average Net Assets/Supplemental Data: | | | | |
Net expenses (g)(h) | | | 2.25 | % |
Waiver/Reimbursement (h) | | | 0.05 | % |
Net investment loss (g)(h) | | | (0.10 | )% |
Portfolio turnover rate (e) | | | 9 | % |
Net assets, end of period (000’s) | | $ | 10 | |
| (a) | Class C Shares commenced operations on September 28, 2007. Per share data and total return reflect activity from that date. |
| (b) | Per share data was calculated using the average shares outstanding during the period. |
| (c) | Amount represents less than $0.01 per share. |
| (d) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (f) | Total return at net asset value assuming no contingent deferred sales charge. |
| (g) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
91
Financial Highlights – International Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30, 2007 | | | Year Ended March 31, | |
| Shares | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 19.06 | | | $ | 16.51 | | | $ | 13.05 | | | $ | 11.28 | | | $ | 6.83 | | | $ | 9.75 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.08 | (a) | | | 0.09 | (a) | | | 0.07 | (a) | | | 0.06 | (a) | | | 0.09 | | | | 0.10 | |
Net realized and unrealized gain (loss) on investments and foreign currency | | | 1.68 | | | | 2.54 | | | | 3.51 | | | | 1.71 | | | | 4.44 | | | | (2.99 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 1.76 | | | | 2.63 | | | | 3.58 | | | | 1.77 | | | | 4.53 | | | | (2.89 | ) |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.08 | ) | | | (0.08 | ) | | | (0.12 | ) | | | — | (b) | | | (0.08 | ) | | | (0.03 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 20.74 | | | $ | 19.06 | | | $ | 16.51 | | | $ | 13.05 | | | $ | 11.28 | | | $ | 6.83 | |
Total return (c)(d) | | | 9.27 | %(e) | | | 16.03 | % | | | 27.70 | % | | | 15.71 | % | | | 66.51 | % | | | (29.72 | )% |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (f) | | | 1.50 | %(g) | | | 1.50 | % | | | 1.50 | % | | | 1.50 | % | | | 1.38 | % | | | 1.40 | % |
Waiver/Reimbursement | | | 0.06 | %(g) | | | 0.06 | % | | | 0.08 | % | | | 0.11 | % | | | 0.11 | % | | | 0.17 | % |
Net investment income (f) | | | 0.76 | %(g) | | | 0.49 | % | | | 0.52 | % | | | 0.52 | % | | | 0.92 | % | | | 0.55 | % |
Portfolio turnover rate | | | 17 | %(e) | | | 28 | % | | | 26 | % | | | 66 | % | | | 58 | % | | | 73 | % |
Net assets, end of period (000’s) | | $ | 723,284 | | | $ | 636,941 | | | $ | 522,284 | | | $ | 240,322 | | | $ | 130,143 | | | $ | 89,679 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Amount represents less than $0.01 per share. |
| (c) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (d) | Total return at net asset value assuming all distributions reinvested. |
| (f) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
92
Financial Highlights – Pacific/Asia Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30, 2007 | | | Year Ended March 31, | |
| Shares | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 11.72 | | | $ | 11.61 | | | $ | 8.88 | | | $ | 8.44 | | | $ | 5.21 | | | $ | 6.68 | |
| | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) | | | 0.02 | (a) | | | — | (a)(b) | | | 0.02 | (a) | | | 0.03 | (a) | | | 0.01 | | | | 0.01 | |
Net realized and unrealized gain (loss) on investments and foreign currency | | | 1.81 | | | | 0.50 | | | | 2.82 | | | | 0.42 | | | | 3.22 | | | | (1.43 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 1.83 | | | | 0.50 | | | | 2.84 | | | | 0.45 | | | | 3.23 | | | | (1.42 | ) |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | — | | | | — | | | | (0.11 | ) | | | (0.01 | ) | | | — | | | | (0.05 | ) |
From net realized gains | | | — | | | | (0.39 | ) | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | — | | | | (0.39 | ) | | | (0.11 | ) | | | (0.01 | ) | | | — | | | | (0.05 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 13.55 | | | $ | 11.72 | | | $ | 11.61 | | | $ | 8.88 | | | $ | 8.44 | | | $ | 5.21 | |
Total return (c) | | | 15.61 | %(d)(e) | | | 4.40 | % | | | 32.35 | %(d) | | | 5.32 | %(d) | | | 62.00 | %(d) | | | (21.44 | )%(d) |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses before interest expense (f) | | | 1.60 | %(g) | | | 1.61 | % | | | 1.59 | % | | | 1.50 | % | | | 1.45 | % | | | 1.51 | % |
Interest expense | | | — | %(g)(h) | | | — | | | | — | | | | — | | | | — | | | | — | |
Net expenses (f) | | | 1.60 | %(g) | | | 1.61 | % | | | 1.59 | % | | | 1.50 | % | | | 1.45 | % | | | 1.51 | % |
Waiver/Reimbursement | | | 0.03 | %(g) | | | — | | | | 0.03 | % | | | 0.14 | % | | | 0.13 | % | | | 0.15 | % |
Net investment income (loss) (f) | | | 0.31 | %(g) | | | (0.04 | )% | | | 0.22 | % | | | 0.35 | % | | | 0.20 | % | | | 0.15 | % |
Portfolio turnover rate | | | 20 | %(e) | | | 92 | % | | | 68 | % | | | 90 | % | | | 58 | % | | | 73 | % |
Net assets, end of period (000’s) | | $ | 211,963 | | | $ | 213,132 | | | $ | 243,964 | | | $ | 134,579 | | | $ | 114,830 | | | $ | 27,330 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Amount represents less than $0.01 per share. |
| (c) | Total return at net asset value assuming all distributions reinvested. |
| (d) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (f) | The benefits derived from custody credits had an impact of less than 0.01%. |
| (h) | Rounds to less than 0.01%. |
See Notes to Financial Statements.
93
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS
September 30, 2007 (Unaudited)
Note 1. Organization
Excelsior Funds, Inc. (“Excelsior Fund”) is organized as a Maryland Corporation. Excelsior Funds Trust (the “Trust”) is organized as a Delaware business trust. Excelsior Fund and the Trust are registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as open-end management investment companies. Information presented in these financial statements pertains to the following funds (individually referred to as a “Fund”, collectively referred to as the “Funds”):
Excelsior Fund:
Blended Equity Fund
Energy and Natural Resources Fund
Large Cap Growth Fund
Real Estate Fund
Small Cap Fund
Value and Restructuring Fund
Emerging Markets Fund
International Fund
Pacific/Asia Fund
The Trust:
Equity Income Fund
Equity Opportunities Fund
Mid Cap Value and Restructuring Fund
Each Fund is diversified, with the exception of Energy and Natural Resources Fund and Real Estate Fund, each of which is non-diversified.
Investment Objectives
Blended Equity Fund seeks long-term capital appreciation by investing in companies that represent good, long-term values not currently recognized in the market prices of their securities. Energy and Natural Resources Fund seeks long-term capital appreciation by investing primarily in companies that are in the energy and other natural resources groups of industries. The Fund may also invest, to a more limited extent, in gold and other precious metal bullion and coins. Equity Income Fund seeks total return on its assets through capital appreciation and income. Equity Opportunities Fund and International Fund each seeks total return on its assets through long-term capital appreciation. Large Cap Growth Fund seeks superior, long-term capital appreciation by investing in larger companies whose growth prospects, in the opinion of the Advisor, appear to exceed that of the overall market. Mid Cap Value and Restructuring Fund and Value and Restructuring Fund each seeks long-term capital appreciation by investing in companies that will benefit from their restructuring or redeployment of assets and operations in order to become more competitive or profitable. Real Estate Fund seeks current income and long-term capital appreciation by investing in real estate investment trusts (REITs) and
94
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
other companies principally engaged in the real estate business. Small Cap Fund, Emerging Markets Fund and Pacific/Asia Fund each seeks long-term capital appreciation.
Fund Shares
Excelsior Fund is authorized to issue up to 42.5 billion shares of common stock with a par value of $0.001 per share. Authorized capital currently offered for each Fund is as follows: 2.25 billion shares of Blended Equity Fund; 3.0 billion shares each of Large Cap Growth Fund and Emerging Markets Fund; 2.5 billion shares each of Energy and Natural Resources Fund and Small Cap Fund; 3.5 billion shares of Value and Restructuring Fund; 1.0 billion shares of Pacific/Asia Fund; 1.375 billion shares of International Fund; and 500 million shares of Real Estate Fund. The Trust may issue an unlimited number of shares of beneficial interest of each class of each Fund, with a par value of $0.00001.
Blended Equity Fund, Real Estate Fund, International Fund and Pacific/Asia Fund each offers one class of shares: Shares. Equity Income Fund offers two classes of shares: Shares and Retirement Shares. Energy and Natural Resources Fund offers three classes of shares: Shares, Class A Shares and Class C Shares. Mid Cap Value and Restructuring Fund offers three classes of shares: Shares, Institutional Shares and Retirement Shares. Equity Opportunities Fund and Emerging Markets Fund offer four classes of shares: Shares, Class A Shares, Class C Shares and Institutional Shares. Small Cap Fund offers four classes of shares: Shares, Class A Shares, Class C Shares and Retirement Shares. Large Cap Growth Fund and Value and Restructuring Fund offer five classes of shares: Shares, Class A Shares, Class C Shares, Institutional Shares and Retirement Shares. The Class A Shares and Class C Shares commenced operations on September 28, 2007 and commenced public offering of shares on October 1, 2007. The financial highlights of the Institutional Shares and Retirement Shares of the Funds are presented separately.
Shares, Institutional Shares and Retirement Shares are offered continuously at net asset value. There are certain restrictions on the purchase of Institutional Shares and Retirement Shares, as described in the Funds’ prospectuses. Class A Shares are subject to a maximum front-end sales charge of 5.75% based on the amount of initial investment. Class A Shares purchased without an initial sales charge in accounts aggregating from $1 million up to $50 million at the time of purchase are subject to a 1.00% contingent deferred sales charge (“CDSC”) if the shares are sold within twelve months after purchase. Class C Shares are subject to a 1.00% CDSC on shares sold within twelve months after purchase.
Note 2. Significant Accounting Policies
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Certain ratios have been reclassified on the Financial Highlights to conform to the current period presentation. The changes have no effect on the ratios. The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements.
95
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
Security Valuation
Equity securities and exchange traded funds are valued at the last sale price on the principal exchange on which they trade, except for securities traded on the NASDAQ, which are valued at the NASDAQ official close price. Unlisted securities or listed securities for which there were no sales during the day are valued at the closing bid price on such exchanges or over-the-counter markets.
Short-term debt obligations maturing within 60 days are valued at amortized cost, which approximates market value.
Investments in other open-end investment companies are valued at net asset value.
Options are valued at the last reported sale price, or in the absence of a sale, the mean between the last quoted bid and ask price.
Forward foreign currency exchange contracts are valued at the prevailing forward exchange rate of the underlying currencies.
Foreign securities are generally valued at the last sale price on the foreign exchange or market on which they trade. If any foreign share prices are not readily available as a result of limited share activity, the securities are valued at the last sale price of the local shares in the principal market in which such securities are normally traded.
Generally, trading in foreign securities is substantially completed each day at various times prior to the close of the New York Stock Exchange (“NYSE”). The values of such securities used in computing the net asset value of the Funds’ shares are determined as of such times. Foreign currency exchange rates are generally determined at 4:00 p.m. Eastern (U.S.) time. Occasionally, events affecting the values of such foreign securities and such exchange rates may occur between the times at which they are determined and the close of the customary trading session of the NYSE, which would not be reflected in the computation of the Funds’ net asset value. If events materially affecting the values of such foreign securities occur and it is determined that market quotations are not reliable, then these foreign securities will be valued at their “fair value” using procedures approved by the Board of Directors with regard to Excelsior Fund and the Board of Trustees with regard to the Trust. Certain Funds may use a systematic fair valuation model provided by an independent third party to value securities principally traded in foreign markets in order to adjust for possible stale pricing that may occur between the close of the foreign exchanges and the time for valuation.
Investments for which market quotations are not readily available, or that have quotations which management believes are not reliable, are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Directors with regard to Excelsior Fund and the Board of Trustees with regard to the Trust. If a security is valued at fair value such value is likely to be different from the last quoted market price for the security.
96
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS 157”), was issued. SFAS 157 is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is evaluating the impact the application of SFAS 157 will have on the Funds’ financial statement disclosures.
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Options
Certain Funds may write call and put options on securities they own or in which they may invest. Writing put options tends to increase the Funds’ exposure to the underlying instrument. Writing call options tends to decrease the Funds’ exposure to the underlying instrument. When the Funds write a call or put option, an amount equal to the premium received is recorded as a liability and subsequently marked-to-market to reflect the current value of the option written. Premiums received from writing options which expire are treated as realized gains. Premiums received from writing options which are exercised or closed are added to the proceeds or offset against the amounts paid on the underlying transaction to determine the realized gain or loss. Each Fund as a writer of an option has no control over whether the underlying security may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the security underlying the written option. There is the risk that the Funds may not be able to enter into a closing transaction because of an illiquid market. The Funds’ custodian will set aside cash or liquid portfolio securities equal to the amount of the written options contract commitment in a separate account.
Each Fund may also purchase put and call options. Purchasing call options tends to increase the Funds’ exposure to the underlying instrument. Purchasing put options tends to decrease the Funds’ exposure to the underlying instrument. Each Fund may pay a premium, which is included in the Funds’ Statements of Assets and Liabilities as an investment and subsequently marked-to-market to reflect the current value of the option. The risk associated with purchasing put and call options is limited to the premium paid. Premiums paid for purchasing options which expire are treated as realized losses. Premiums paid for purchasing options which are exercised or closed are added to the amounts paid or offset against the proceeds on the underlying transaction to determine the realized gain or loss.
Forward Foreign Currency Exchange Contracts
Forward foreign currency exchange contracts are agreements to exchange one currency for another at a future date at a specified price. These contracts are used to minimize the exposure to foreign exchange rate fluctuations during the period between trade and settlement date of the contract. Certain Funds may utilize forward foreign currency exchange contracts in connection with the settlement of purchases
97
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
and sales of securities. Certain Funds may also enter into these contracts to hedge certain other foreign currency denominated assets. Contracts to buy generally are used to acquire exposure to foreign currencies, while contracts to sell are used to hedge the Funds’ investments against currency fluctuations. Forward foreign currency exchange contracts are valued daily at the current exchange rate of the underlying currency, resulting in unrealized gains (losses) which become realized at the time the forward foreign currency exchange contracts are closed or mature. Realized and unrealized gains (losses) arising from such transactions are included in net realized and unrealized gains (losses) on foreign currency transactions. The use of forward foreign currency exchange contracts does not eliminate fluctuations in the prices of the Funds’ portfolio securities. While the maximum potential loss from such contracts is the aggregate face value in U.S. dollars at the time the contract was opened, exposure is typically limited to the change in value of the contract (in U.S. dollars) over the period it remains open. The Funds are also exposed to risk if the counterparties of the contracts are unable to fulfill the terms of the contracts.
Repurchase Agreements
Each Fund may engage in repurchase agreement transactions with institutions that the Funds’ investment advisor has determined are creditworthy. Each Fund, through its custodian, receives delivery of underlying securities collateralizing a repurchase agreement. The investment advisor is responsible for determining that collateral is at least equal, at all times, to the value of the repurchase obligation including interest. A repurchase agreement transaction involves certain risks in the event of default or insolvency of the counterparty. These risks include possible delays or restrictions upon each Fund’s ability to dispose of the underlying securities and a possible decline in the value of the underlying securities during the period while the Fund seeks to assert its rights.
Income Recognition
Interest income is recorded on the accrual basis. Corporate actions and dividend income are recorded on the ex-date except for certain foreign securities which are recorded as soon after the ex-date as the Fund becomes aware of such, net of any non-reclaimable tax withholdings. Distributions received from real estate investment trusts (REITs) in excess of their income are recorded as a reduction of the cost of the related investments and/or realized gains as applicable. If the Fund no longer owns the applicable securities, any distributions received in excess of income are recorded as realized gains.
Foreign Currency Transactions
The values of all assets and liabilities quoted in foreign currencies are translated into U.S. dollars at that day’s exchange rates. Net realized and unrealized gains (losses) on foreign currency transactions include gains (losses) arising from the fluctuation in exchange rates between trade and settlement dates on securities transactions, gains (losses) arising from the disposition of foreign currency and currency gains (losses) between the accrual and payment dates on dividends, interest income and foreign withholding taxes.
98
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
For financial statement purposes, the Funds do not distinguish that portion of gains (losses) on investments which is due to changes in foreign exchange rates from that which is due to changes in market prices of the investments. Such fluctuations are included with the net realized and unrealized gains (losses) on investments in the Statements of Operations.
Determination of Class Net Asset Value
All income, expenses (other than class-specific expenses, as shown on the Statements of Operations), and realized and unrealized gains (losses), are allocated to each class of a Fund on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class.
Federal Income Tax Status
Each Fund intends to qualify each year as a “regulated investment company” under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, each Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that each Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Foreign Capital Gains Taxes
Realized gains in certain countries may be subject to foreign taxes at the fund level, at rates ranging from approximately 10% to 15%. The Funds accrue for such foreign taxes on net realized and unrealized gains at the appropriate rate for each jurisdiction.
Distributions to Shareholders
Dividends from net investment income are declared and paid quarterly for each Fund except Emerging Markets Fund, International Fund and Pacific/Asia Fund, which declare and pay dividends semi-annually. Net realized capital gains, if any, are distributed at least annually for all Funds. Distributions to shareholders are recorded on the ex-date.
Indemnification
In the normal course of business, each Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. A Fund’s maximum exposure under these arrangements is unknown because this would involve future claims against the Fund. Also, under the organizational documents of Excelsior Fund and the Trust, and by contract, the Board of Directors with regard to Excelsior Fund, and the Board of Trustees with regard to the Trust, are indemnified against certain liabilities that may arise out of actions relating to their duties to Excelsior Fund and the Trust. However, based on experience, the Funds expect the risk of loss due to these representations, warranties and indemnities to be minimal.
99
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
Note 3. Federal Income Tax Information
The tax character of distributions paid during the year ended March 31, 2007 was as follows:
| | | | | | | | | |
| | | Ordinary
Income* | | Long-Term
Capital Gains | | Return of
Capital |
Blended Equity Fund | | $ | 3,124,137 | | $ | 61,776,418 | | $ | — |
Energy and Natural Resources Fund | | | 39,548,106 | | | 58,470,040 | | | — |
Equity Income Fund | | | 4,109,901 | | | — | | | — |
Equity Opportunities Fund | | | 1,277,288 | | | — | | | — |
Large Cap Growth Fund | | | — | | | — | | | — |
Mid Cap Value and Restructuring Fund | | | 97,283 | | | 7,547 | | | — |
Real Estate Fund | | | 950,031 | | | 18,297,188 | | | 817,973 |
Small Cap Fund | | | 2,271,022 | | | 41,311,258 | | | — |
Value and Restructuring Fund | | | 67,856,329 | | | — | | | — |
Emerging Markets Fund | | | 7,542,032 | | | 51,557,835 | | | — |
International Fund | | | 2,551,050 | | | — | | | — |
Pacific/Asia Fund | | | — | | | 7,507,933 | | | — |
| * | For tax purposes short-term capital gains distributions, if any, are considered ordinary income distributions. |
Unrealized appreciation and depreciation at September 30, 2007, based on cost of investments for federal income tax purposes, excluding any unrealized appreciation and depreciation from changes in the value of other assets and liabilities resulting from changes in exchange rates, was:
| | | | | | | | | | |
| | | Unrealized Appreciation | | Unrealized Depreciation | | | Net Unrealized Appreciation |
Blended Equity Fund | | $ | 202,175,600 | | $ | (2,815,329 | ) | | $ | 199,360,271 |
Energy and Natural Resources Fund | | | 98,251,168 | | | (9,672,232 | ) | | | 88,578,936 |
Equity Income Fund | | | 50,172,694 | | | (1,606,312 | ) | | | 48,566,382 |
Equity Opportunities Fund | | | 98,827,567 | | | (11,693,053 | ) | | | 87,134,514 |
Large Cap Growth Fund | | | 229,089,580 | | | (23,403,331 | ) | | | 205,686,249 |
Mid Cap Value and Restructuring Fund | | | 148,178,220 | | | (10,740,360 | ) | | | 137,437,860 |
Real Estate Fund | | | 16,134,694 | | | (1,295,246 | ) | | | 14,839,448 |
Small Cap Fund | | | 244,409,519 | | | (16,525,788 | ) | | | 227,883,731 |
Value and Restructuring Fund | | | 3,535,111,311 | | | (280,207,107 | ) | | | 3,254,904,204 |
Emerging Markets Fund | | | 606,755,147 | | | (11,611,022 | ) | | | 595,144,125 |
International Fund | | | 203,419,865 | | | (24,620,951 | ) | | | 178,798,914 |
Pacific/Asia Fund | | | 49,076,614 | | | (9,038,659 | ) | | | 40,037,955 |
100
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
The following capital loss carryforwards, determined as of March 31, 2007, may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code:
| | | | | | | | | | | | | | | | | | | | | |
| | | Expires March 31, | | |
| | | 2010 | | 2011 | | 2012 | | 2013 | | 2014 | | 2015 | | Total |
Equity Opportunities Fund | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 880,333 | | $ | 2,193,825 | | $ | 3,074,158 |
Large Cap Growth Fund | | | 18,217,588 | | | 83,374,895 | | | 22,030,449 | | | 480,165 | | | — | | | — | | | 124,103,097 |
Value and Restructuring Fund | | | — | | | 19,930,042 | | | 27,363,534 | | | — | | | — | | | — | | | 47,293,576 |
Emerging Markets Fund | | | — | | | — | | | 1,247,253 | | | — | | | 36,739 | | | — | | | 1,283,992 |
International Fund | | | — | | | 41,230,170 | | | 15,141,185 | | | — | | | — | | | — | | | 56,371,355 |
The Funds adopted Financial Accounting Standards Board (“FASB”) Interpretation No. 48, Accounting for Uncertainty in Income Taxes- an Interpretation of FASB Statement No. 109 (“FIN 48”) effective September 28, 2007. FIN 48 requires management to determine whether a tax position of a Fund is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that exceeds fifty percent of the amount likely to be realized upon ultimate settlement. FIN 48 must be applied to all existing tax positions upon initial adoption and the cumulative effect, if any, is to be reported as an adjustment to net assets. Management has evaluated the known implications of FIN 48 on its computation of net assets for each Fund. As a result of this evaluation, management believes that FIN 48 will not have any effect on the Funds’ financial statements. However, management’s conclusions regarding FIN 48 may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation guidance from the FASB, new tax laws, regulations, and administrative interpretations (including relevant court decisions).
Note 4. Fees and Compensation Paid to Affiliates
Investment Advisory Fee
United States Trust Company, National Association, through its separate identifiable division, U.S. Trust New York Asset Management Division (“USTNA”), or UST Advisers, Inc. (“USTA” and together with USTNA, the “Advisor”) is the investment advisor to the Funds. USTNA is a wholly owned subsidiary of U.S. Trust Corporation (“U.S. Trust”). USTA is a wholly owned subsidiary of USTNA. Effective July 1, 2007, U.S. Trust became a wholly owned subsidiary of the Bank of America Corporation (“BOA”). Prior to July 1, 2007, U.S. Trust was a wholly owned subsidiary of The Charles Schwab Corporation.
101
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
For its services, the Advisor receives an investment advisory fee, computed daily and paid monthly, based on each Fund’s average daily net assets at the following annual rates:
| | |
| | | Annual Fee Rate |
Blended Equity Fund | | 0.75% |
Energy and Natural Resources Fund | | 0.60% |
Equity Income Fund | | 0.75% |
Equity Opportunities Fund | | 0.75% |
Large Cap Growth Fund | | 0.75% |
Mid Cap Value and Restructuring Fund | | 0.65% |
Real Estate Fund | | 1.00% |
Small Cap Fund | | 0.75% |
Value and Restructuring Fund | | 0.60% |
Emerging Markets Fund | | 1.25% |
International Fund | | 1.00% |
Pacific/Asia Fund | | 1.00% |
Administration Fee
Effective July 1, 2007, Columbia Management Advisors, LLC (“Columbia”) serves as the administrator of the Funds. Columbia is an indirect, wholly owned subsidiary of BOA. Prior to July 1, 2007, USTA and BISYS Fund Services Ohio, Inc. (“BISYS”) served as the administrators of the Funds under the same fee structure.
Columbia is entitled to an administration fee, computed daily and paid monthly, based on the combined aggregate average daily net assets of Excelsior Fund, the Trust and Excelsior Tax-Exempt Funds, Inc. (excluding Emerging Markets Fund, International Fund, International Equity Fund and Pacific/Asia Fund, series of Excelsior Fund or the Trust), at the following annual rates:
| | |
Average Daily Net Assets | | Annual Fee Rate |
First $200 million | | 0.200% |
Next $200 million | | 0.175% |
In excess of $400 million | | 0.150% |
Columbia is entitled to an administration fee, computed daily and paid monthly, at the annual rate of 0.20% of the average daily net assets of Emerging Markets Fund, International Fund, Pacific/Asia Fund (each a separate series of Excelsior Fund) (collectively, the “international equity series”).
Effective September 17, 2007, Columbia received an administration fee at the annual rates listed above less the fees payable by the Funds as described under the Pricing and Bookkeeping Fees note below.
Effective July 1, 2007, Columbia voluntarily agreed to waive administration fees for each Fund at the annual rate of 0.05% of average daily net assets. Columbia, at its discretion, may revise or discontinue
102
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
this arrangement at any time. For the six months ended September 30, 2007, the effective administration fee rate before the reduction for pricing and bookkeeping fees and net of voluntary expense waivers, as a percentage of each Fund’s average net assets, was 0.13% for each Fund with the exception of the international equity series of Excelsior Fund and the Trust, which was 0.18%.
For the six months ended September 30, 2007, the total amounts paid and payable to affiliates by the Funds under these agreements were as follows:
| | | | | | |
| | | Amounts
Paid
to Affiliates | | Amounts
Payable
to Affiliates |
Blended Equity Fund | | $ | 224,558 | | $ | 24,825 |
Energy and Natural Resources Fund | | | 345,989 | | | 43,624 |
Equity Income Fund | | | 133,872 | | | 14,343 |
Equity Opportunities Fund | | | 209,320 | | | 24,218 |
Large Cap Growth Fund | | | 434,339 | | | 53,449 |
Mid Cap Value and Restructuring Fund | | | 195,276 | | | 21,615 |
Real Estate Fund | | | 58,311 | | | 4,017 |
Small Cap Fund | | | 424,975 | | | 53,659 |
Value and Restructuring Fund | | | 4,990,424 | | | 648,811 |
Emerging Markets Fund | | | 994,812 | | | 138,116 |
International Fund | | | 549,244 | | | 72,182 |
Pacific/Asia Fund | | | 167,503 | | | 19,791 |
Pricing and Bookkeeping Fees
Effective September 17, 2007, the Funds entered into a Financial Reporting Services Agreement (the “Financial Reporting Services Agreement”) with State Street Bank & Trust Company (“State Street”) and Columbia pursuant to which State Street provides financial reporting services to the Funds. Also effective September 17, 2007, the Funds entered into an Accounting Services Agreement with State Street and Columbia (collectively with the Financial Reporting Services Agreement, the “State Street Agreements”) pursuant to which State Street provides accounting services to the Funds. Under the State Street Agreements, each Fund pays State Street an annual fee of $38,000 paid monthly, plus a monthly fee based on an annualized percentage rate of average daily net assets of each Fund for the month. The aggregate fee for each Fund will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). The Funds also reimburse State Street for certain out-of-pocket expenses and charges.
Effective September 17, 2007, the Funds entered into a Pricing and Bookkeeping Oversight and Services Agreement (the “Services Agreement”) with Columbia. Under the Services Agreement, Columbia provides services related to Fund expenses and the requirements of the Sarbanes-Oxley Act of 2002, and provides oversight of the accounting and financial reporting services provided by State Street. The Funds reimburse Columbia for out-of-pocket expenses and direct internal costs relating to accounting oversight and for services relating to Fund expenses and the requirements of the Sarbanes-Oxley Act of 2002.
103
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
Prior to July 1, 2007, BISYS was responsible for providing fund accounting and financial reporting services to the Funds, and USTA was responsible for oversight of these functions. On July 1, 2007, Columbia assumed responsibility from USTA for oversight of the activities performed by BISYS. BISYS was responsible for providing services to the Funds through September 16, 2007.
For the six months ended September 30, 2007, the total amounts paid and payable to affiliates for each Fund under these agreements were $505 and $505, respectively.
Transfer Agent Fee
Effective September 17, 2007, Columbia Management Services, Inc. (the “Transfer Agent”), an affiliate of Columbia and an indirect, wholly owned subsidiary of BOA, provides shareholder services to the Funds and has contracted with Boston Financial Data Services (“BFDS”) to serve as sub-transfer agent. Prior to September 17, 2007, BFDS served as the transfer agent for the Funds’ shares.
The Transfer Agent is entitled to receive a fee for its services, paid monthly, at the annual rate of $17.00 per open account plus reimbursement of certain sub-transfer agent fees paid by the Transfer Agent (exclusive of BFDS fees), calculated based on assets held in omnibus accounts and intended to recover the cost of payments to other parties (including affiliates of BOA) for services to those accounts. The Transfer Agent pays the fees of BFDS for services as sub-transfer agent and is not entitled to reimbursement for such fees from the Funds. The Transfer Agent may also retain, as additional compensation for its services, fees for wire, telephone and redemption orders, IRA trustee agent fees and account transcript fees due the Transfer Agent from shareholders of the Funds and credits (net of bank charges) earned with respect to balances in accounts the Transfer Agent maintains in connection with its services to the Funds. The Transfer Agent also receives reimbursement for certain out-of-pocket expenses.
For the period September 17, 2007 through September 30, 2007, the total amounts paid and payable to affiliates by the Funds under this agreement were as follows:
| | | | | | |
| | | Amounts
Paid
to Affiliates | | Amounts
Payable
to Affiliates |
Blended Equity Fund | | $ | 2,740 | | $ | 2,740 |
Energy and Natural Resources Fund | | | 13,501 | | | 13,501 |
Equity Income Fund | | | 319 | | | 319 |
Equity Opportunities Fund | | | 413 | | | 413 |
Large Cap Growth Fund | | | 3,167 | | | 3,167 |
Mid Cap Value and Restructuring Fund | | | 3,057 | | | 3,057 |
Real Estate Fund | | | 1,364 | | | 1,364 |
Small Cap Fund | | | 9,364 | | | 9,364 |
Value and Restructuring Fund | | | 79,159 | | | 79,159 |
Emerging Markets Fund | | | 14,044 | | | 14,044 |
International Fund | | | 2,721 | | | 2,721 |
Pacific/Asia Fund | | | 846 | | | 846 |
104
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
Shareholder Servicing Fee
The Funds have entered into shareholder servicing agreements with various service organizations which include USTA. The Funds are permitted to pay a fee of up to 0.25% of the average daily net assets of the Funds’ shares held by each service organization’s customers to such organizations for providing shareholder and administrative services to their customers who hold shares of the Funds.
For the six months ended September 30, 2007, the total amounts paid and payable to affiliates by the Funds under these agreements were as follows:
| | | | | | |
| | | Amounts Paid
to Affiliates | | Amounts Payable
to Affiliates |
Blended Equity Fund | | $ | 376,465 | | $ | 59,726 |
Energy and Natural Resources Fund | | | 177,243 | | | 29,735 |
Equity Income Fund | | | 284,949 | | | 44,682 |
Equity Opportunities Fund | | | 365,923 | | | 61,307 |
Large Cap Growth Fund | | | 778,970 | | | 132,290 |
Mid Cap Value and Restructuring Fund | | | 245,599 | | | 38,544 |
Real Estate Fund | | | 79,233 | | | 11,298 |
Small Cap Fund | | | 654,098 | | | 110,912 |
Value and Restructuring Fund | | | 1,585,978 | | | 253,339 |
Emerging Markets Fund | | | 499,316 | | | 83,024 |
International Fund | | | 756,281 | | | 123,363 |
Pacific/Asia Fund | | | 219,171 | | | 33,938 |
Distribution and Service Fees
Effective September 17, 2007, Columbia Management Distributors, Inc. (the “Distributor”) serves as distributor of the Funds’ shares. Through July 31, 2007, BISYS Fund Services Limited Partnership (“BISYS Fund Services”) served as distributor of the Funds’ shares. On August 1, 2007, Foreside Distribution Services, L.P. served as distributor until September 16, 2007.
Certain Funds have adopted a Distribution Plan (the “Distribution Plan”) pursuant to Rule 12b-1 under the 1940 Act, which permits the Funds to compensate and/or reimburse the Distributor monthly for services that are intended to result in the sale of certain classes’ shares. Equity Income Fund, Equity Opportunities Fund and Mid Cap Value and Restructuring Fund, which have adopted a Distribution Plan for the Shares Class of the Funds, may pay distribution fees in an amount not to exceed the annual rate of 0.25% of the average daily net assets applicable to each Fund’s Shares Class. Fees are not currently being paid under the Distribution Plan with respect to the Shares Class. Equity Income Fund, Large Cap Growth Fund, Mid Cap Value and Restructuring Fund, Small Cap Fund and Value and Restructuring Fund, which have adopted a Distribution Plan for the Retirement Shares of the Funds, may pay distribution fees in an amount not to exceed the annual rate at 0.50% of the average daily net assets applicable to each Fund’s Retirement Shares.
105
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
The Funds have adopted a combined shareholder servicing and distribution plan for the Class A Shares of the Funds. Fees are calculated at an annual rate of 0.25% of the average daily net assets of the Class A Shares of each Fund. The Funds have also adopted a shareholder servicing plan and a Distribution Plan for the Class C Shares of the Funds. Fees are calculated at the annual rates of 0.25% and 0.75%, respectively, of the average daily net assets of the Class C Shares of each Fund.
Fees Paid to Officers and Trustees
The Board of Trustees/Directors may include people who are officers and/or trustees of other fund families affiliated with the investment advisor. The Funds did not pay any of the interested persons for their service as Trustees/Directors, but did pay non-interested persons (independent trustees), as noted in the Statements of Operations.
Expense Limits and Fee Waivers
The Advisor has contractually agreed to waive fees or reimburse expenses through July 31, 2008, so that the expenses incurred by each Fund (exclusive of brokerage commissions, interest, taxes and extraordinary expenses, but inclusive of custodial charges relating to overdrafts, if any) after giving effect to any balance credits from the Funds’ custodian, will not exceed the following annual rates, based on each Fund’s average daily net assets:
| | | | | | | | | | | | | | | |
| | | Shares | | | Class A Shares | | | Class C Shares | | | Institutional Shares | | | Retirement Shares | |
Blended Equity Fund | | 1.10 | % | | — | | | — | | | — | | | — | |
Energy and Natural Resources Fund | | 1.25 | % | | 1.36 | % | | 2.11 | % | | — | | | — | |
Equity Income Fund | | 1.10 | % | | — | | | — | | | — | | | 1.60 | % |
Equity Opportunities Fund | | 1.05 | % | | 1.16 | % | | 1.91 | % | | 0.80 | % | | — | |
Large Cap Growth Fund | | 1.20 | % | | 1.31 | % | | 2.06 | % | | 0.95 | % | | 1.70 | % |
Mid Cap Value and Restructuring Fund | | 1.14 | % | | — | | | — | | | 0.89 | % | | 1.64 | % |
Real Estate Fund | | 1.25 | % | | — | | | — | | | — | | | — | |
Small Cap Fund | | 1.25 | % | | 1.36 | % | | 2.11 | % | | — | | | 1.75 | % |
Value and Restructuring Fund | | 1.14 | % | | 1.25 | % | | 2.00 | % | | 0.89 | % | | 1.64 | % |
Emerging Markets Fund | | 1.85 | % | | 1.96 | % | | 2.71 | % | | 1.60 | % | | — | |
International Fund | | 1.50 | % | | — | | | — | | | — | | | — | |
Pacific/Asia Fund | | 1.65 | % | | — | | | — | | | — | | | — | |
Custody Credits
Each Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as a reduction of total expenses in the Statements of Operations. The Funds could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if they had not entered into such an agreement.
106
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
Note 5. Portfolio Information
For the six months ended September 30, 2007, the cost of purchases and proceeds from sales of securities, excluding short-term obligations, were as follows:
| | | | | | |
| | | Purchases | | Sales |
Blended Equity Fund | | $ | 17,993,824 | | $ | 53,095,729 |
Energy and Natural Resources Fund | | | 671,154,554 | | | 575,319,844 |
Equity Income Fund | | | 14,928,429 | | | 32,254,979 |
Equity Opportunities Fund | | | 79,328,993 | | | 45,219,507 |
Large Cap Growth Fund | | | 206,389,492 | | | 178,370,279 |
Mid Cap Value and Restructuring Fund | | | 25,982,805 | | | 13,336,796 |
Real Estate Fund | | | 43,255,951 | | | 98,722,003 |
Small Cap Fund | | | 318,595,424 | | | 261,032,530 |
Value and Restructuring Fund | | | 957,697,128 | | | 419,229,579 |
Emerging Markets Fund | | | 104,328,781 | | | 116,919,241 |
International Fund | | | 144,354,480 | | | 113,223,499 |
Pacific/Asia Fund | | | 42,170,107 | | | 68,017,349 |
Note 6. Redemption In-Kind
In certain circumstances, the Funds may distribute portfolio securities rather than cash as payment for redemption of a Fund’s shares (redemption in-kind). For financial reporting purposes, the Funds recognize a gain on the in-kind redemptions to the extent the value of the distributed securities on the date of redemption exceeds the cost of those securities; the Funds recognize a loss if cost exceeds value. Gains and losses realized on the redemptions in-kind are not recognized for tax purposes, and are reclassified from realized gain (loss) to paid-in capital in excess of par value.
Note 7. Line of Credit
Effective September 17, 2007, the Funds and other affiliated funds participate in a $150,000,000 uncommitted, unsecured line of credit provided by State Street. Borrowings are available for temporary or emergency purposes. Interest on the uncommitted line of credit is charged to each participating fund based on the fund’s borrowings at a variable rate per annum equal to the Federal Funds Rate plus a spread, as determined and quoted by State Street at the time of the request for a loan.
Prior to September 17, 2007, the Funds participated in a $150,000,000 uncommitted line of credit provided by JPMorgan Chase, under similar borrowing terms.
107
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
For the six months ended September 30, 2007, the average daily loan balance outstanding on days where borrowing existed and the weighted average interest rates for the Fund that participated in these agreements were as follows:
| | | | | | |
| | | Average Borrowings | | Weighted Average Interest Rates | |
Equity Income Fund | | $ | 1,000,000 | | 5.525 | % |
Pacific/Asia Fund | | $ | 1,250,000 | | 5.266 | % |
Note 8. Redemption Fees
Each Fund may assess, subject to limited exceptions, a 2.00% redemption fee on shares that are redeemed within 60 days of their purchase. The redemption fees, which are retained by the Funds, are accounted for as an addition to paid-in capital and are allocated to each class based on the relative net assets at the time of the redemption. Prior to August 1, 2007, the redemption fee was assessed, subject to limited exceptions, on Fund shares redeemed within 30 days of their purchase. For the six months ended September 30, 2007, the Funds assessed redemption fees as follows:
| | | |
| | | Redemption Fees |
Blended Equity Fund | | $ | 94 |
Energy and Natural Resources Fund | | | 4,330 |
Equity Opportunities Fund | | | 24 |
Large Cap Growth Fund | | | 8,815 |
Mid Cap Value and Restructuring Fund | | | 37 |
Real Estate Fund | | | 12 |
Value and Restructuring Fund | | | 15,915 |
Emerging Markets Fund | | | 3,071 |
International Fund | | | 221 |
Pacific/Asia Fund | | | 2 |
108
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
Note 9. Concentration of Ownership
As of September 30, 2007, the Funds had shareholders that held greater than 5% of the shares outstanding. Subscription and redemption activity of these accounts may have a significant effect on the operations of the Funds. The percentage of shares of beneficial interest outstanding held therein is as follows:
| | | | |
| | | Number of
Shareholders | | % of Shares
Outstanding |
Blended Equity Fund | | 2 | | 66.4 |
Energy and Natural Resources Fund | | 2 | | 51.6 |
Equity Income Fund | | 1 | | 92.2 |
Equity Opportunities Fund | | 2 | | 94.7 |
Large Cap Growth Fund | | 2 | | 85.1 |
Mid Cap Value and Restructuring Fund | | 2 | | 74.2 |
Real Estate Fund | | 2 | | 71.5 |
Small Cap Fund | | 2 | | 68.2 |
Value and Restructuring Fund | | 3 | | 52.9 |
Emerging Markets Fund | | 2 | | 61.5 |
International Fund | | 2 | | 90.6 |
Pacific/Asia Fund | | 2 | | 87.6 |
Note 10. Significant Risks and Contingencies
Foreign Securities
There are certain additional risks involved when investing in foreign securities that are not inherent with investments in domestic securities. These risks may involve foreign currency exchange rate fluctuations, adverse political and economic developments and the possible prevention of currency exchange or other foreign governmental laws or restrictions. In addition, the liquidity of foreign securities may be more limited than that of domestic securities.
Investments in emerging market countries are subject to additional risk. The risk of foreign investments is typically increased in less developed countries. These countries are also more likely to experience high levels of inflation, deflation or currency devaluation which could hurt their economies and securities markets.
Geographic Concentration
Because the Pacific/Asia Fund’s investments are concentrated in countries located in the Pacific and Far East, events within the region will have a greater effect on the Fund than if the Fund were more geographically diversified. In addition, events in any one country within the region may impact the other countries or the region as a whole. Markets in the region can experience significant volatility due to social, regulatory and political uncertainties.
109
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
Sector Focus
Certain Funds may focus their investments in certain industries, subjecting them to greater risk than funds that are less concentrated.
Issuer Focus
Certain Funds are non-diversified. These Funds may invest a greater percentage of their total assets in the securities of fewer issuers than diversified funds. The Funds may, therefore, have a greater risk of loss from a few issuers than similar funds that invests more broadly.
Note 11. Legal Proceedings
United States Trust Company of New York and U.S. Trust Company, N.A. (formerly, co-investment advisers to the Funds, together referred to herein as “U.S. Trust Company”), Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc., and Excelsior Funds Trust (the “Companies”), The Charles Schwab Corporation and several individuals and third parties were named in four fund shareholder class actions and two derivative actions which alleged that U.S. Trust Company, the Companies, and others allowed certain parties to engage in illegal and improper mutual fund trading practices, which allegedly caused financial injury to the shareholders of certain of the Excelsior Funds advised by U.S. Trust Company. Each plaintiff seeks unspecified monetary damages and related equitable relief.
The class and derivative actions described above were transferred to the United States District Court for the District of Maryland for coordinated and consolidated pre-trial proceedings. In November 2005, the Maryland court dismissed many of the plaintiffs’ claims in both the class and derivative actions. The court entered implementing orders on February 24, 2006. All claims against the Companies have been dismissed. Plaintiffs’ claims against U.S. Trust Company and certain individuals under Sections 10(b) and 20(a) of the Securities Exchange Act and Sections 36(b) and 48(a) of the Investment Company Act, however, have not been dismissed. Plaintiffs’ Section 48(a) claims against parent entity U.S. Trust Company and former parent entity The Charles Schwab Corporation also remain.
While the ultimate outcome of these matters cannot be predicted with any certainty at this time, based on currently available information, U.S. Trust Company believes that the likelihood is remote that the pending litigation will have a material adverse financial impact on the Companies, or materially affect the advisers’ ability to provide investment management services to the Companies.
110
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
Note 12. Reorganization of the Funds
The Boards of Directors/Trustees of Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust (the “Board”) have approved proposals, described below, that are part of a larger integration of the Excelsior Fund complex and the Columbia Funds complex. Generally, these proposals involve the reorganization of certain Excelsior Funds into newly formed Columbia Funds that will be series of a different legal entity governed by a different board than the Excelsior Funds, and will be managed by Columbia Management Advisors, LLC, an affiliate of the current advisers to the Excelsior Funds. The portfolio managers of the Excelsior Funds immediately before such reorganizations are expected to be the same portfolio managers of the newly formed Columbia Funds immediately after such reorganizations.
Specifically, the Board has approved proposals to reorganize each Excelsior Fund listed in the left column (each, an “Excelsior Fund”) into a corresponding newly formed shell fund listed in the right column below (each, a “Newly Formed Fund”) as shown in the chart below, subject to approval by the shareholders of the Excelsior Fund. If the shareholders of each Excelsior Fund approve the proposal relating to the reorganization of their Fund, all of the assets of the Excelsior Fund will be transferred to the corresponding Newly Formed Fund and shareholders of the Excelsior Fund will receive shares of a designated class of the corresponding Newly Formed Fund in exchange for their shares. For each Excelsior Fund, Shares class and Institutional Shares class, as applicable, will be exchanged for Class Z shares of the corresponding Newly Formed Fund, and Retirement Shares class, as applicable, will be exchanged for Class R shares of the corresponding Newly Formed Fund. Shareholders of each Excelsior Fund are scheduled to vote on the proposal relating to the reorganization of their Fund at a special meeting of shareholders currently expected to be held in the first quarter of 2008. Each reorganization is expected to take place as soon as reasonably practicable following approval at the special meeting.
| | |
Excelsior Fund | | Newly Formed Fund |
Blended Equity Fund | | Columbia Blended Equity Fund |
Emerging Markets Fund | | Columbia Emerging Markets Fund |
Energy and Natural Resources Fund | | Columbia Energy and Natural Resources Fund |
International Fund | | Columbia International Growth Fund |
Large Cap Growth Fund | | Columbia Select Growth Fund |
Pacific/Asia Fund | | Columbia Pacific/Asia Fund |
Small Cap Fund | | Columbia Select Small Cap Fund |
Value & Restructuring Fund | | Columbia Value and Restructuring Fund |
Core Bond Fund | | Columbia Bond Fund |
Intermediate-Term Bond Fund | | Columbia Short-Intermediate Bond Fund |
Equity Opportunities Fund | | Columbia Select Opportunities Fund |
Mid Cap Value & Restructuring Fund | | Columbia Mid Cap Value and Restructuring Fund |
The Board has also approved proposals, described below, that involve the reorganization of certain Excelsior Funds into Columbia Funds that are series of different legal entities governed by a different board than the Excelsior Funds, and are managed by Columbia Management Advisors, LLC.
111
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
Specifically, the Board has approved proposals to reorganize each Excelsior Fund listed in the left column (each, an “Acquired Fund”) into a corresponding acquiring fund listed in the right column below (each, an “Acquiring Fund”) as shown in the chart below, subject to approval by the shareholders of the Acquired Fund. If the shareholders of an Acquired Fund approve the proposal relating to the reorganization of their Fund, all of the assets of the Acquired Fund will be transferred to the corresponding Acquiring Fund and shareholders of the Acquired Fund will receive shares of a designated class of the corresponding Acquiring Fund in exchange for their shares. For each Acquired Fund, except the money market funds, Shares class and Institutional Shares class, as applicable, will be exchanged for Class Z shares of the corresponding Acquiring Fund, and Retirement Shares class, as applicable, will be exchanged for Class R shares of the corresponding Acquiring Fund. For each Acquired Fund that is a money market fund, Shares class and Institutional Shares class, as applicable, will be exchanged for Trust Class shares of the corresponding Acquiring Fund. Shareholders of each Acquired Fund are scheduled to vote on the proposal relating to the reorganization of their Fund at a special meeting of shareholders currently expected to be held in the first quarter of 2008, except for Intermediate-Term Tax-Exempt Fund and New York Intermediate-Term Tax-Exempt Fund which are currently expected to be held in the second quarter of 2008. Each reorganization is expected to take place as soon as reasonably practicable following approval at the special meeting.
| | |
Acquired Fund | | Acquiring Fund |
Equity Income Fund | | Columbia Dividend Income Fund |
Real Estate Fund | | Columbia Real Estate Equity Fund |
International Equity Fund | | International Fund |
Short-Term Government Securities Fund | | Columbia Short Term Bond Fund |
Short-Term Tax-Exempt Securities Fund | | Columbia Short Term Municipal Bond Fund |
High Yield Fund | | Columbia High Yield Opportunity Fund |
Long-Term Tax-Exempt Fund | | Columbia Tax-Exempt Fund |
Intermediate-Term Tax-Exempt Fund | | Columbia Intermediate Municipal Bond Fund |
New York Intermediate-Term Tax-Exempt Fund | | Columbia New York Intermediate Municipal Bond Fund |
California Short-Intermediate Term Tax-Exempt Income Fund | | Columbia California Intermediate Municipal Bond Fund |
Treasury Money Fund | | Columbia Government Reserves |
Government Money Fund | | Columbia Government Plus Reserves |
Money Fund | | Columbia Cash Reserves |
Tax-Exempt Money Fund | | Columbia Tax-Exempt Reserves |
New York Tax-Exempt Money Fund | | Columbia New York Tax-Exempt Reserves |
112
APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party to the advisory agreement (the “Independent Directors”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s board of directors or trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the advisory agreement. In addition, the Securities and Exchange Commission (the “SEC”) takes the position that, as part of their fiduciary duties with respect to fund fees, fund boards are required to evaluate the material factors applicable to a decision to approve an investment advisory agreement.
At a meeting held on September 27th and 28th 2007, the Board of Directors/Trustees (the “Board”) of Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust (each a “Company” and, together, the “Companies”), including a majority of the Independent Directors, approved the continuation of the Investment Advisory Agreements (the “Advisory Agreements”) by and between each Company and UST Advisers, Inc. and U.S. Trust New York Asset Management Division, a division of United States Trust Company, National Association (together, “U.S. Trust”) with respect to each series of each Company (each, a “Fund”).
In preparation for the meeting, the Board requested and reviewed a wide variety of materials provided by U.S. Trust and its affiliates, which included information about the operations and personnel of U.S. Trust, as well as the personnel and operations of its affiliates. In this regard, the Board received information about the large mutual fund business of Columbia Management Advisors, LLC and its affiliates (together, “Columbia”), which are, together with U.S. Trust, all under the control of Bank of America Corporation, and how the resources dedicated to the Columbia mutual fund business affect the Funds. The Board also received extensive information that was provided by or derived from information prepared by third parties. This information is in addition to the detailed information about the Funds that the Board reviews during the course of each year, including information that relates to Fund operations and Fund performance. The Board also received a memorandum from counsel regarding the responsibilities of the Board for the approval of the Advisory Agreements. In addition, the Independent Directors received advice from independent counsel to the Independent Directors, met in executive session outside the presence of Company management and U.S. Trust personnel and participated in question and answer sessions with representatives of U.S. Trust.
The Board’s approval of the continuation of the Advisory Agreements was based on the consideration and evaluation of the information and material provided to the Board and a variety of specific factors discussed at the meetings, including:
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by U.S. Trust to the Funds under the Advisory Agreements and the resources of U.S. Trust and their affiliates, including Columbia, dedicated to the Funds. In this regard, the Board evaluated, among other things, U.S. Trust’s personnel, experience, performance history of various products, and compliance program. The Board considered that U.S. Trust and Columbia provide
113
substantial administrative, accounting and compliance services and provide oversight of third party service providers to the Funds. The Board considered representations of U.S. Trust that U.S. Trust and Columbia have allocated substantial resources and personnel, and have made significant financial expenditures and commitments, to the investment management and other operations of the Funds. The Board also considered the nature and quantity of additional resources that have been dedicated to the operations of the Funds since U.S. Trust had become affiliated with Columbia. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services to be provided by U.S. Trust to the Funds and the resources of the U.S. Trust and its affiliates dedicated to the Funds supported the renewal of the Advisory Agreements.
Fund Performance. The Board considered Fund performance in determining whether to renew the Advisory Agreements. Specifically, the Board considered each Fund’s performance relative to a peer group of other mutual funds and appropriate indices/benchmarks, in light of total return, yield and market trends. As part of this review, the Board considered the composition of the peer groups, selection criteria and the reputation of third party providers who provided data for the peer group analysis. In evaluating the performance of each Fund, the Board considered both market risk and shareholder risk expectations for such Fund and whether, irrespective of relative performance, each Fund’s absolute performance was consistent with expectations for its investment methodology. The Board further considered the level of Fund performance in the context of its review of Fund expenses and U.S. Trust’s profitability discussed below. In the case of each Fund that had performance that lagged that of a relevant peer group for certain (although not necessarily all) periods considered, the Board concluded that other factors relevant to performance supported renewal of the Advisory Agreements. These factors varied from Fund to Fund, but included one or more of the following: (1) that the Fund’s performance, although lagging in certain recent periods, was strong over the longer term; (2) that the underperformance was attributable, to a significant extent, to investment decisions by U.S. Trust that were reasonable and consistent with the Fund’s investment objective and policies; (3) that each Fund’s performance was competitive when compared to other relevant performance benchmarks or peer groups; and (4) that U.S. Trust has taken or is taking steps designed to help improve the Fund’s investment performance. Following such evaluation, the Board concluded, within the context of its full deliberations, that the performance of the Funds supported the renewal of the Advisory Agreements.
Fund Expenses. With respect to the Funds’ expenses, the Board considered the rate of compensation called for by the Advisory Agreements, and each Fund’s net operating expense ratio, in each case, in comparison to those of other comparable mutual funds, such peer groups and comparisons having been selected and calculated based on objective factors. The Board noted that with respect to the Funds, U.S. Trust had contractually committed to waive a portion of its fee and/or reimburse the Funds for a portion of their expenses to limit the Funds’ total operating expenses. In evaluating this information, the Board considered the nature and scope of services provided to the Funds. The Board also reviewed the fees charged by U.S. Trust to provide advisory services to other types of accounts with substantially similar investment objectives as the Funds and the differences in services and risks involved in managing such other accounts, including differences relating to compliance and regulatory burdens. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported the renewal of the Advisory Agreements.
Profitability. With regard to profitability, the Board considered the compensation flowing to U.S. Trust and its affiliates, directly or indirectly. In this connection, the Board reviewed management’s
114
profitability analyses. The Board also considered any other benefits derived by U.S. Trust from its relationship with the Funds, such as whether, by virtue of its management of the Funds, it obtains investment information or other research resources that aid it in providing advisory services to other clients. With respect to U.S. Trust and its affiliates, the Board considered whether the varied levels of compensation and profitability under the Advisory Agreements and other service agreements were reasonable and justified in light of the quality of all services rendered to the Funds. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of U.S. Trust is reasonable and supported the renewal of the Advisory Agreements.
Economies of Scale. The Board considered the existence of any economies of scale and whether those economies are passed along to a Fund’s shareholders through a graduated investment advisory fee schedule or other means, including any fee waivers by U.S. Trust. In this regard, and consistent with their consideration of fund expenses, the Board considered that U.S. Trust has previously committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer Funds or Funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such Funds at subsidized expense levels. The Board also reviewed asset flows in the Funds, noting that a relatively few number of Funds had experienced significant asset growth, while most of the Funds had experienced only moderate growth, if any. After reviewing such information, the Board determined not to seek advisory fee breakpoints at this time. The Board noted that it would continue to monitor the growth in assets of the Funds as compared to expenses and asked U.S. Trust and Columbia to continue to monitor the Funds’ expenses and asset sizes in connection with determining when economies of scale would dictate that advisory fee breakpoints were advisable.
Based on the Board’s deliberations and their evaluation of the information described above, the Board, including all of the Independent Directors, unanimously approved the continuation of the Advisory Agreements and concluded that the compensation under the Advisory Agreements is fair and reasonable in light of the services and expenses and such other matters as the Board considered to be relevant in the exercise of their reasonable judgment. In the course of their deliberations, the Board did not identify any particular information or factor that was all-important or controlling.
115
[THIS PAGE INTENTIONALLY LEFT BLANK]
116
PROXY VOTING RESULTS
A Special Meeting of Shareholders of Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust and each of their Funds was held on March 30, 2007, for the purpose of seeking shareholder approval of the following proposal: to approve new investment advisory agreements by and among USTA, USTNA and the Companies, on behalf of the Funds. The Special Meeting for Excelsior Funds with respect to the Value and Restructuring Fund, Energy and Natural Resources and Treasury Money Funds was adjourned for the purpose of soliciting additional proxies, and subsequently held on April 30, 2007. The number of votes necessary to conduct the Special Meetings and approve the proposal was obtained. The results of the votes of shareholders are listed below:
EXCELSIOR FUNDS, INC.
| | | | | | |
Fund | | For | | Against | | Abstain |
Value and Restructuring Fund | | 71,659,202.229 | | 1,308,059.398 | | 2,313,244.343 |
Energy and Natural Resources Fund | | 10,149,963.059 | | 261,710.922 | | 349,760.892 |
Treasury Money Fund | | 147,661,994.420 | | 8,327.040 | | 953,491.100 |
IMPORTANT INFORMATION ABOUT THIS REPORT
Excelsior Equity Funds
The funds mail one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 1-800-345-6611 and additional reports will be sent to you. This report has been prepared for shareholders of Excelsior Equity Funds.
A description of the policies and procedures that each fund uses to determine how to vote proxies and a copy of each fund’s voting records are available (i) on the Securities and Exchange Commission’s website at www.sec.gov, and (ii) without charge, upon request, by calling 1-800-368-0346. Information regarding how each fund voted proxies relating to portfolio securities during the 12-month period ended June 30 is available from the SEC’s website. Information regarding how each fund voted proxies relating to portfolio securities is also available from the funds’ website.
Each fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Each fund’s Form N-Q is available on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Please consider the investment objectives, risks, charges and expenses for the fund carefully before investing. Contact your financial advisor for a prospectus, which contains this and other important information about the fund. You should read it carefully before you invest.
United States Trust Company, National Association, through its separate identifiable division, U.S. Trust New York Asset Management Division (“USTNA”), or UST Advisers, Inc. (“USTA” and together with USTNA, the “Advisor”) is the investment advisor to the Funds. USTNA is a wholly owned subsidiary of U.S. Trust Corporation (“U.S. Trust”). USTA is a wholly owned subsidiary of USTNA. Excelsior Funds are distributed by Columbia Management Distributors, Inc., member of FINRA, SIPC, part of Columbia Management. USTA, USTNA and Columbia Management Distributor, Inc. are affiliates of Bank of America Corporation.
117
©2007 Columbia Management Distributors, Inc.
One Financial Center, Boston, MA 02111-2621
800-345-6611 www.columbiafunds.com
SHC-44/136215-0907 (11/07) 07/46190
FIXED INCOMEFUNDS
SEMI ANNUAL REPORT
September 30, 2007
| | |
| NOT FDIC INSURED | | May Lose Value |
| NOT BANK ISSUED | | No Bank Guarantee |
TABLE OF CONTENTS
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for an Excelsior Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular Excelsior Fund. References to specific securities should not be constructed as a recommendation or investment advice.
Investments in fixed income securities are subject to interest rate risks. The principal value of a bond falls when interest rates rise and rises when interest rates fall. During periods of rising interest rates, the value of a bond investment is at greater risk than during periods of stable or falling rates.
LETTER TO SHAREHOLDERS
Dear Shareholder:
Allow me to take this opportunity to formally welcome you to the Columbia Funds family. In July, U.S. Trust Advisors was acquired by Bank of America (parent company of Columbia Management Group). The Excelsior Funds are now distributed by Columbia Management Distributors, Inc. The combined organization is committed to delivering unparalleled wealth management solutions and building deep, lasting relationships with our shareholders.
Your Excelsior Funds account will be serviced by Columbia Management Services, Inc., an experienced service provider in the industry. This team will process transactions, generate account statements and support your ongoing servicing needs.
As we complete the integration over the next several months, you will gain access to a broad array of investment choices including money market investments, mutual funds and 529 plans. Throughout this period of change, our goal is to ensure a smooth transition and provide services that we hope will exceed your expectations. We recommend you visit our website: www.columbiafunds.com for more information about our products and services. Those of you who receive your statements directly from Columbia Management can also register for on-line account access, which allows you to check your account balance, change your distribution options and make other account transactions. If you receive statements from your brokerage firm, please check with your financial advisor for service availability.
There’s a lot to know about Columbia Management
With $709.9 billion under management and a history that dates to the early 1900s, Columbia Management and its affiliates make up one of the nation’s largest and most experienced asset management companies.1 We offer a comprehensive array of investment solutions, including equity, fixed-income and cash strategies. Our diverse investment solutions and our focus on the needs of our clients make Columbia Management the advisor of choice for individual, institutional and high-net-worth investors.
Welcome to Columbia Management. Thank you for your business — we’re pleased to have you as a customer.
Sincerely,
Christopher L. Wilson
President, Excelsior Funds
2
About Christopher L. Wilson
Chris Wilson is head of mutual funds for Columbia Management, responsible for the day-to-day delivery of mutual fund products and services to the firm’s investors. With the exception of distribution, Mr. Wilson oversees all aspects of the mutual fund services operation including treasury, investment accounting, product development and shareholder and broker services. Mr. Wilson serves as Columbia Management’s chief liaison to the mutual fund boards of trustees. He joined Columbia Management in 2004 and has been a member of the investment community since 1980.
Columbia Management Group, LLC (“Columbia Management”) is the investment management arm of Bank of America Corporation. Columbia Management entities furnish investment management services and products for institutional and individual investors. Excelsior Funds are distributed by Columbia Management Distributors, Inc., member FINRA and SIPC. Columbia Management Distributors, Inc. is part of Columbia Management and an affiliate of Bank of America Corporation.
1 | Columbia Management and its affiliates comprise the wealth and investment management division of Bank of America Corporation. As of September 30, 2007, Columbia Management and its affiliates managed assets of $709.9 billion. Columbia Management and its affiliates’ managed assets consist of assets under the discretionary management of the registered investment advisors, Columbia Management Advisors, LLC ($377.9 billion), Columbia Wanger Asset Management, L.P. ($38.5 billion) and Marsico Capital Management, LLC ($103.4 billion); U.S. Trust, Bank of America Private Wealth Management; Banc of America Investment Services, Inc.; Banc of America Investment Advisors, Inc.; Bank of America Capital Advisors, LLC; Premier Banking & Investments, and United States Trust, National Association, including its subsidiary, UST Advisers, Inc. ($116.5 billion). |
3
Understanding Your Expenses — California Short-Intermediate Term Tax-Exempt Income Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
04/01/07 – 09/30/07 |
Shares | | 1,000.00 | | 1,000.00 | | 1,019.30 | | 1,022.50 | | 2.52 | | 2.53 | | 0.50 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
4
Understanding Your Expenses — Core Bond Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the end of the period ($) | | Expenses paid during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | |
Shares | | 1,000.00 | | 1,000.00 | | 1,019.90 | | 1,020.50 | | 4.54 | | 4.55 | | 0.90 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
5
Understanding Your Expenses — High Yield Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | |
Shares | | 1,000.00 | | 1,000.00 | | 1,000.85 | | 1,019.75 | | 5.25 | | 5.30 | | 1.05 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
6
Understanding Your Expenses — Intermediate-Term Bond Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | |
Shares | | 1,000.00 | | 1,000.00 | | 1,020.80 | | 1,021.25 | | 3.79 | | 3.79 | | 0.75 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
7
Understanding Your Expenses — Intermediate-Term Tax-Exempt Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | |
Shares | | 1,000.00 | | 1,000.00 | | 1,013.10 | | 1,021.75 | | 3.27 | | 3.29 | | 0.65 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
8
Understanding Your Expenses — Long-Term Tax-Exempt Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | |
Shares | | 1,000.00 | | 1,000.00 | | 1,002.10 | | 1,021.00 | | 4.00 | | 4.04 | | 0.80 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
9
Understanding Your Expenses — New York Intermediate-Term Tax-Exempt Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | |
Shares | | 1,000.00 | | 1,000.00 | | 1,013.40 | | 1,021.00 | | 4.03 | | 4.04 | | 0.80 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
10
Understanding Your Expenses — Short-Term Government Securities Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses by share class
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | |
Shares | | 1,000.00 | | 1,000.00 | | 1,025.70 | | 1,021.30 | | 3.75 | | 3.74 | | 0.74 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the administrator not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
11
Understanding Your Expenses — Short-Term Tax-Exempt Securities Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | |
Shares | | 1,000.00 | | 1,000.00 | | 1,018.00 | | 1,022.00 | | 3.03 | | 3.03 | | 0.60 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
12
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
California Short-Intermediate Term Tax-Exempt Income Fund
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | TAX-EXEMPT SECURITIES — 80.05% |
| $ | 1,500,000 | | Anaheim, California, Public Financing Authority Revenue Bonds, Distribution Systems, (AMBAC) | | 5.00 | % | | 10/01/13 | | $ | 1,615,485 |
| | 2,000,000 | | Bay Area, California, Infrastructure Financing Authority State Payment Acceleration Notes, (FGIC) | | 5.00 | | | 08/01/17 | | | 2,148,780 |
| | 1,000,000 | | California State Department of Transportation Revenue Bonds, Federal Highway Grant Anticipation Bonds, Series A, (FGIC) | | 4.50 | | | 02/01/13 | | | 1,047,200 |
| | 1,000,000 | | California State Department of Water Resources Central Valley Project Revenue Bonds, Series Y | | 5.00 | | | 12/01/10 | | | 1,045,880 |
| | 1,500,000 | | California State Department of Water Resources Water Revenue Bonds, Series W, (AMBAC) | | 5.50 | | | 12/01/09 | | | 1,565,100 |
| | 1,000,000 | | California State Economic Recovery, Special Sales Tax Revenue Bonds, Series A, (FGIC) | | 5.25 | | | 07/01/14 | | | 1,097,520 |
| | 2,000,000 | | California State General Obligation Bonds, | | 5.00 | | | 02/01/11 | | | 2,087,960 |
| | 1,000,000 | | California State University Systemwide Revenue Bonds, Series A, (AMBAC) | | 5.00 | | | 11/01/12 | | | 1,068,410 |
| | 1,000,000 | | California Statewide Communities Development Authority Revenue Bonds, California Endowment | | 5.00 | | | 07/01/13 | | | 1,077,560 |
| | 3,000,000 | | California Statewide Communities Development Authority Revenue Bonds, John Muir Health, Series A | | 5.00 | | | 08/15/17 | | | 3,148,560 |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | TAX-EXEMPT SECURITIES — (continued) |
| $ | 1,000,000 | | Central Valley, California, School District Financing Authority Revenue Bonds, Series A, (MBIA) | | 6.15 | % | | 08/01/09 | | $ | 1,047,610 |
| | 1,000,000 | | Contra Costa, California, Transportation Authority Sales Tax Revenue Bonds, Series A, (FGIC) | | 6.00 | | | 03/01/08 | | | 1,010,620 |
| | 975,000 | | Foothill- De Anza, California, Community College District General Obligation Bonds, (FGIC) | | 5.00 | | | 08/01/14 | | | 1,035,996 |
| | 355,000 | | Golden State Tobacco Securitization Corporation, California, Tobacco Settlement Revenue Bonds, Enhanced-Asset Backed, Series A | | 5.00 | | | 06/01/15 | | | 355,334 |
| | 3,500,000 | | Los Angeles County, California, Metropolitan Transportation Authority Sales Tax Revenue Bonds, Series A, (FSA) | | 5.25 | | | 07/01/10 | | | 3,637,515 |
| | 1,000,000 | | Los Angeles, California, Department of Water & Power Revenue Bonds, Power System, Series A, Sub-Series A-1, (MBIA) | | 5.00 | | | 07/01/14 | | | 1,071,630 |
| | 1,000,000 | | Los Angeles, California, General Obligation Bonds, Series A, (MBIA) | | 4.00 | | | 09/01/13 | | | 1,024,750 |
| | 1,000,000 | | Los Angeles, California, Sanitation Equipment Charge Revenue Bonds, (FGIC) | | 5.00 | | | 02/01/13 | | | 1,071,350 |
| | 1,000,000 | | Los Angeles, California, Sanitation Equipment Charge Revenue Bonds, Series A, (FSA) | | 5.00 | | | 02/01/10 | | | 1,034,310 |
See Notes to Financial Statements.
13
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
California Short-Intermediate Term Tax-Exempt Income Fund — (continued)
| | | | | | | | | | | |
``Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | TAX-EXEMPT SECURITIES — (continued) |
| $ | 1,000,000 | | Napa County, California, Flood Protection & Watershed Improvement Authority, General Obligation Bonds, (AMBAC) | | 4.50 | % | | 06/15/12 | | $ | 1,044,390 |
| | 1,150,000 | | Orange County, California, Local Transportation Authority Sales Tax Revenue Bonds, (AMBAC) | | 6.20 | | | 02/14/11 | | | 1,241,735 |
| | 1,000,000 | | Rancho, California, Water District Financing Authority Revenue Bonds, Series A, (FSA) | | 5.50 | | | 08/01/10 | | | 1,054,160 |
| | 1,000,000 | | San Diego County, California, Certificates of Participation, (AMBAC) | | 5.00 | | | 11/01/11 | | | 1,055,910 |
| | 1,000,000 | | San Diego, California, Public Facilities Financing Authority Sewer Revenue Bonds, (FGIC) | | 5.20 | | | 05/15/13 | | | 1,001,340 |
| | 1,000,000 | | San Diego, California, Public Facilities Financing Authority Water Revenue Bonds, (MBIA) | | 5.00 | | | 08/01/11 | | | 1,054,170 |
| | 1,000,000 | | San Francisco, California, City & County Public Utilities Communication Clean Water Revenue Bond, (MBIA) | | 5.00 | | | 10/01/13 | | | 1,072,740 |
| | 3,000,000 | | San Francisco, California, State Building Authority Lease Revenue Bonds, California State & San Francisco Civic Center, Series A | | 5.00 | | | 12/01/12 | | | 3,190,710 |
| | 1,000,000 | | San Mateo, Foster City, California, School Facilities Financing Authority Revenue Bonds, (FSA) | | 4.00 | | | 08/15/12 | | | 1,022,220 |
| | 1,075,000 | | Santa Clara County, California, Financing Authority Lease Revenue Bonds, Multiple Facilities Project, Series A, (AMBAC) | | 4.50 | | | 05/15/12 | | | 1,091,856 |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | TAX-EXEMPT SECURITIES — (continued) |
| $ | 1,000,000 | | Southern California Public Power Authority Revenue Bonds, Transmission Project, Series A, (MBIA) | | 5.25 | % | | 07/01/09 | | $ | 1,022,820 |
| | | | | | | | | | | |
| | | TOTAL TAX-EXEMPT SECURITIES
(Cost $40,895,258) | | | 41,043,621 |
| | | | | | |
| TAX-EXEMPT SECURITIES – ESCROWED IN U.S.
GOVERNMENTS(a) – 12.23% |
| | 2,000,000 | | Riverside, California, Water Revenue Bonds, (FGIC) (Prerefunded 10/01/11 @101) | | 5.00 | | | 10/01/26 | | | 2,132,560 |
| | 1,000,000 | | Sacramento, California, City Financing Authority Revenue Bonds, City Hall, Series A, (FSA) (Prerefunded 12/01/12 @100) | | 5.25 | | | 12/01/17 | | | 1,083,110 |
| | 3,000,000 | | San Diego County, California, Water Authority Certificates of Participation, Series A, (FGIC) (Prerefunded 05/01/08 @101) | | 5.00 | | | 05/01/14 | | | 3,057,180 |
| | | | | | | | | | | |
| | | TOTAL TAX-EXEMPT SECURITIES – ESCROWED IN U.S. GOVERNMENTS
(Cost $6,353,897) | | | 6,272,850 |
| | | | | | | | | | | |
| Shares | | | | | | | | | |
| | REGISTERED INVESTMENT COMPANIES – 4.78% | | | |
| | 1,219,510 | | BlackRock California
Money Fund
(7 day yield of 3.63%) | | | | | | 1,219,510 |
| | 1,232,718 | | Federated California
Money Fund
(7 day yield of 3.52%) | | | | | | 1,232,718 |
| | | | | | | | | | | |
| | | TOTAL REGISTERED INVESTMENT COMPANIES
(Cost $2,452,228) | | | 2,452,228 |
| | | | | | |
| | | | | | | | | | |
TOTAL INVESTMENTS
(Cost $49,701,383)(b) | | 97.06 | % | | | | | | $ | 49,768,699 |
OTHER ASSETS IN EXCESS OF
LIABILITIES | | 2.94 | | | | | | | | 1,506,274 |
| | | | | | | | | | |
NET ASSETS | | 100.00 | % | | | | | | $ | 51,274,973 |
| | | | | | | | | | |
| (a) | The Fund has been informed that each issuer has placed direct obligations of the U.S. Government in an irrevocable trust, solely for the payment of principal and interest. |
| (b) | Cost for federal income tax purposes is $49,701,383. |
AMBAC—American Municipal Bond Assurance Corp.
FGIC—Financial Guaranty Insurance Corp.
FSA—Financial Security Assurance
MBIA—Municipal Bond Insurance Association
See Notes to Financial Statements.
14
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
California Short-Intermediate Term Tax-Exempt Income Fund — (continued)
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | |
Portfolio Diversification | | % of
Net
Assets | | Value |
Revenue Bonds | | 67.86 | | $ | 34,794,615 |
Prerefunded | | 12.23 | | | 6,272,850 |
General Obligation Bonds | | 10.13 | | | 5,193,096 |
Registered Investment Companies | | 4.78 | | | 2,452,228 |
Certificates of Participation | | 2.06 | | | 1,055,910 |
| | | | | |
Total Investments | | 97.06 | | $ | 49,768,699 |
Other Assets in Excess of Liabilities | | 2.94 | | | 1,506,274 |
| | | | | |
Net Assets | | 100.00 | | $ | 51,274,973 |
| | | | | |
See Notes to Financial Statements.
15
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Core Bond Fund
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | ASSET-BACKED SECURITIES — 2.34% |
| $ | 4,200,000 | | Capital Auto Receivables Asset Trust, 2006-SN1A B(a) | | 5.50 | % | | 04/20/10 | | $ | 4,189,576 |
| | 2,015,000 | | Capital Auto Receivables Asset Trust, 2007-3 A4 | | 5.00 | | | 03/17/14 | | | 2,020,575 |
| | 6,765,000 | | Citibank Credit Card Issuance Trust, 2003-A10 | | 4.75 | | | 12/10/15 | | | 6,588,500 |
| | | | | | | | | | | |
| | | TOTAL ASSET-BACKED SECURITIES
(Cost $12,779,089) | | | 12,798,651 |
| | | | | | | | | | | |
| | COLLATERALIZED MORTGAGE OBLIGATIONS — 6.99% |
| | | NON-GOVERNMENTAL AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS — 6.00% |
| | 435,193 | | Bear Stearns Adjustable Rate Mortgage Trust, 2004-10 15A1(b) | | 4.60 | | | 01/25/35 | | | 433,167 |
| | 1,794,354 | | Citigroup Mortgage Loan Trust, 2004-HYB4 WA(b) | | 4.45 | | | 12/25/34 | | | 1,768,065 |
| | 1,671,274 | | Countrywide Alternative Loan Trust, 2004-16CB 1A2 | | 6.00 | | | 10/25/34 | | | 1,655,085 |
| | 2,550,697 | | Countrywide Alternative Loan Trust, 2004-22CB 1A1 | | 5.50 | | | 07/25/34 | | | 2,529,217 |
| | 6,648,497 | | Indymac Index Mortgage Loan Trust, 2004-AR4 3A(b) | | 4.70 | | | 08/25/34 | | | 6,659,512 |
| | 7,238,080 | | JP Morgan Mortgage Trust, 2005-A6 1A1(b) | | 5.14 | | | 09/25/35 | | | 7,153,469 |
| | 10,195,682 | | Wells Fargo Mortgage Backed Securities Trust, 2004-EE 3A1(b) | | 3.99 | | | 12/25/34 | | | 10,079,593 |
| | 2,647,086 | | Wells Fargo Mortgage Backed Securities Trust, 2005-AR1 1A1(b) | | 4.54 | | | 02/25/35 | | | 2,616,011 |
| | | | | | | | | | | |
| | | | | | | | | | | 32,894,119 |
| | | | | | | | | | | |
| | | FEDERAL HOME LOAN MORTGAGE
CORPORATION — 0.43% |
| | 2,306,295 | | 2333 UZ | | 6.50 | | | 07/15/31 | | | 2,340,141 |
| | | | | | | | | | | |
| | | FEDERAL NATIONAL MORTGAGE
ASSOCIATION — 0.56% |
| | 3,080,000 | | 2003-17 QT | | 5.00 | | | 08/25/27 | | | 3,075,934 |
| | | | | | | | | | | |
| | | TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $38,670,456) | | | 38,310,194 |
| | | | | | | | | | | |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | COMMERCIAL MORTGAGE-BACKED SECURITIES — 16.60% |
| $ | 4,225,000 | | Asset Securitization Corp., 1997-D4 A4(b) | | 8.07 | % | | 04/14/29 | | $ | 4,397,171 |
| | 2,497,000 | | Bank of America Commercial Mortgage, Inc., 2004-1 A4 | | 4.76 | | | 11/10/39 | | | 2,409,425 |
| | 5,000,000 | | Bear Stearns Commercial Mortgage Securities, 2006-PW13 A3 | | 5.52 | | | 09/11/41 | | | 5,006,421 |
| | 1,000,000 | | Credit Suisse First Boston Mortgage Securities Corp., 2002-CKS4 G(a)(b) | | 6.01 | | | 11/15/36 | | | 983,412 |
| | 6,775,000 | | GE Capital Commerical Mortgage Corp., 2000-1 Cl(b) | | 6.73 | | | 01/15/33 | | | 7,110,024 |
| | 1,781,000 | | GMAC Commercial Mortgage Securities, 1999-C1(b) | | 7.06 | | | 05/15/33 | | | 1,821,061 |
| | 3,449,000 | | Greenwich Capital Commercial Funding Corp., 2004-GG1 A1(b) | | 5.32 | | | 06/10/36 | | | 3,425,221 |
| | 13,080,000 | | GS Mortgage Securities Corp. II, 2007-GG10 A4(b) | | 5.99 | | | 08/10/45 | | | 13,302,550 |
| | 5,700,000 | | Merrill Lynch/Countrywide Commercial Mortgage Trust, 2007-8 A3(b) | | 6.16 | | | 08/12/49 | | | 5,838,328 |
| | 3,150,000 | | Morgan Stanley Dean Witter Capital I, 2000-LIF2 C(b) | | 7.50 | | | 10/15/33 | | | 3,362,340 |
| | 1,245,000 | | Morgan Stanley Dean Witter Capital I, 2003-TOP9 A2 | | 4.74 | | | 11/13/36 | | | 1,215,146 |
| | 5,571,000 | | Nomura Asset Securities Corp., 1998-D6 A4(b) | | 7.62 | | | 03/15/30 | | | 6,286,130 |
| | 4,225,000 | | Wachovia Bank Commercial Mortgage Trust, 2002- C1 A4 | | 6.29 | | | 04/15/34 | | | 4,408,559 |
| | 3,601,000 | | Wachovia Bank Commercial Mortgage Trust, 2003-C9 A3 | | 4.61 | | | 12/15/35 | | | 3,551,734 |
| | 6,099,000 | | Wachovia Bank Commercial Mortgage Trust, 2004-C12 A2 | | 5.00 | | | 07/15/41 | | | 6,091,863 |
See Notes to Financial Statements.
16
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Core Bond Fund — (continued)
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | COMMERCIAL MORTGAGE-BACKED SECURITIES — (continued) |
| $ | 3,905,000 | | Wachovia Bank Commercial Mortgage Trust, 2004-C12 A3(b) | | 5.23 | % | | 07/15/41 | | $ | 3,908,339 |
| | 17,926,000 | | Wachovia Bank Commercial Mortgage Trust, 2005-C20 A5(b) | | 5.09 | | | 07/15/42 | | | 17,834,208 |
| | | | | | | | | | | |
| | | TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES
(Cost $91,058,408) | | | 90,951,932 |
| | | | | | | | | | | |
| | CORPORATE BONDS — 18.56% | | | |
| | 2,615,000 | | America Movil S.A. de C.V. | | 5.50 | | | 03/01/14 | | | 2,577,595 |
| | 5,700,000 | | Bank One Corp. | | 7.88 | | | 08/01/10 | | | 6,098,567 |
| | 6,000,000 | | Barclays Bank PLC(a)(b) | | 5.93 | | | 12/31/49 | | | 5,692,542 |
| | 1,620,000 | | Bear Stearns Co., Inc. | | 5.70 | | | 11/15/14 | | | 1,586,030 |
| | 5,520,000 | | Bottling Group LLC | | 5.50 | | | 04/01/16 | | | 5,527,397 |
| | 2,300,000 | | British Telecommunications PLC | | 9.13 | | | 12/15/30 | | | 3,045,665 |
| | 2,715,000 | | Caterpillar Financial Services Corp. | | 5.85 | | | 09/01/17 | | | 2,739,723 |
| | 265,000 | | Caterpillar, Inc. | | 5.70 | | | 08/15/16 | | | 264,432 |
| | 5,715,000 | | Citigroup, Inc. | | 5.25 | | | 02/27/12 | | | 5,713,794 |
| | 2,600,000 | | Comcast Cable Holdings LLC | | 9.80 | | | 02/01/12 | | | 3,009,373 |
| | 1,441,000 | | Daimler Chrysler N.A. Holding Corp. | | 7.20 | | | 09/01/09 | | | 1,492,657 |
| | 2,000,000 | | Deutsche Telekom International Finance | | 5.38 | | | 03/23/11 | | | 2,000,464 |
| | 1,310,000 | | Deutsche Telekom International Finance, Multi-Coupon Bond | | 8.00 | | | 06/15/10 | | | 1,403,247 |
| | 1,500,000 | | Deutsche Telekom International Finance, Multi-Coupon Bond | | 8.25 | | | 06/15/30 | | | 1,836,244 |
| | 1,700,000 | | Ford Motor Credit Co. | | 8.63 | | | 11/01/10 | | | 1,685,319 |
| | 1,400,000 | | General Electric Capital Corp. | | 5.00 | | | 11/15/11 | | | 1,393,676 |
| | 1,695,000 | | General Electric Capital Corp. | | 5.88 | | | 02/15/12 | | | 1,739,592 |
| | 2,995,000 | | General Electric Capital Corp. | | 6.00 | | | 06/15/12 | | | 3,088,279 |
| | 2,710,000 | | General Mills, Inc. | | 5.65 | | | 09/10/12 | | | 2,734,127 |
| | 1,185,000 | | Georgia Power Co. | | 5.70 | | | 06/01/17 | | | 1,184,983 |
| | 5,834,000 | | HSBC Finance Corp. | | 8.00 | | | 07/15/10 | | | 6,260,979 |
| | 2,000,000 | | Morgan Stanley | | 6.75 | | | 04/15/11 | | | 2,090,260 |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | CORPORATE BONDS — (continued) | | | |
| $ | 685,000 | | Nisource Finance Corp. | | 5.25 | % | | 09/15/17 | | $ | 635,762 |
| | 3,825,000 | | Oracle Corp. | | 5.25 | | | 01/15/16 | | | 3,724,552 |
| | 1,441,000 | | Prudential Financial, Inc. | | 5.10 | | | 09/20/14 | | | 1,389,125 |
| | 4,500,000 | | RBS Capital Trust III(b)(c) | | 5.51 | | | 09/29/49 | | | 4,210,375 |
| | 1,670,000 | | Sprint Capital Corp. | | 8.75 | | | 03/15/32 | | | 1,915,054 |
| | 4,100,000 | | Target Corp. | | 5.88 | | | 07/15/16 | | | 4,099,832 |
| | 2,183,000 | | Time Warner Cos., Inc. | | 7.25 | | | 10/15/17 | | | 2,322,247 |
| | 5,000,000 | | UBS Preferred Funding Trust I(b) | | 8.62 | | | 10/29/49 | | | 5,430,315 |
| | 1,600,000 | | UnitedHealth Group, Inc.(a) | | 6.00 | | | 06/15/17 | | | 1,598,685 |
| | 3,050,000 | | Virginia Electric & Power Co. | | 5.95 | | | 09/15/17 | | | 3,045,581 |
| | 1,735,000 | | Wal Mart Stores, Inc. | | 5.00 | | | 04/05/12 | | | 1,719,763 |
| | 2,441,000 | | Wal-Mart Stores, Inc. | | 4.13 | | | 02/15/11 | | | 2,371,334 |
| | 5,350,000 | | Wells Fargo & Co. | | 5.00 | | | 11/15/14 | | | 5,156,892 |
| | 950,000 | | Xerox Corp. | | 6.40 | | | 03/15/16 | | | 961,751 |
| | | | | | | | | | | |
| | | TOTAL CORPORATE BONDS
(Cost $101,964,345) | | | 101,746,213 |
| | | | | | | | | | | |
| | TAX-EXEMPT SECURITY — 0.31% | | | |
| | 1,590,000 | | Massachusetts Bay Transportation Authority, Massachusetts Sales Tax, Revenue Bonds, Series A | | 5.00 | | | 07/01/31 | | | 1,712,414 |
| | | | | | | | | | | |
| | | TOTAL TAX-EXEMPT SECURITY
(Cost $1,751,974) | | | 1,712,414 |
| | | | | | | | | | | |
| | U.S. GOVERNMENT AGENCY BONDS & NOTES — 0.97% |
| | | FREDDIE MAC — 0.51% |
| | 2,440,000 | | | | 6.25 | | | 07/15/32 | | | 2,772,208 |
| | | | | | | | | | | |
| | | RESOLUTION FUNDING
CORPORATION — 0.46% |
| | 4,851,000 | | Principal Only STRIPS(d) | | 0.00 | | | 07/15/20 | | | 2,541,614 |
| | | | | | | | | | | |
| | | TOTAL U.S. GOVERNMENT AGENCY BONDS & NOTES
(Cost $5,007,684) | | | 5,313,822 |
| | | | | | | | | | | |
| U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH
SECURITIES — 41.62% |
| | | FEDERAL HOME LOAN MORTGAGE
CORPORATION — 10.35% |
| | 6,057,871 | | Pool # 1G1898 ARM(b) | | 5.88 | | | 06/01/36 | | | 6,094,407 |
| | 2,387,637 | | Pool # A20105 | | 5.00 | | | 04/01/34 | | | 2,283,536 |
| | 8,977,710 | | Pool # A47411 | | 4.50 | | | 10/01/35 | | | 8,341,565 |
| | 2,071,262 | | Pool # A48132 | | 7.00 | | | 12/01/35 | | | 2,139,598 |
| | 1,987,638 | | Pool # A58455 | | 5.50 | | | 03/01/37 | | | 1,946,266 |
See Notes to Financial Statements.
17
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Core Bond Fund — (continued)
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH
SECURITIES — (continued) |
| | | FEDERAL HOME LOAN MORTGAGE
CORPORATION — (continued) |
| $ | 5,209,078 | | Pool # B19861 | | 4.50 | % | | 08/01/20 | | $ | 5,014,833 |
| | 2,583,561 | | Pool # C01811 | | 5.00 | | | 04/01/34 | | | 2,470,917 |
| | 129,482 | | Pool # C71221 | | 5.00 | | | 09/01/32 | | | 124,110 |
| | 18,495 | | Pool # C74339 | | 5.00 | | | 12/01/32 | | | 17,727 |
| | 160,127 | | Pool # C74469 | | 5.00 | | | 12/01/32 | | | 153,483 |
| | 31,925 | | Pool # C74676 | | 5.00 | | | 12/01/32 | | | 30,601 |
| | 2,134,641 | | Pool # E96460 | | 5.00 | | | 05/01/18 | | | 2,098,354 |
| | 4,327,452 | | Pool # G01842 | | 4.50 | | | 06/01/35 | | | 4,020,816 |
| | 16,863,586 | | Pool # G18105 | | 5.00 | | | 03/01/21 | | | 16,534,190 |
| | 2,322,051 | | Pool # J01383 | | 5.50 | | | 03/01/21 | | | 2,315,556 |
| | 3,243,972 | | Pool # J02497 | | 4.50 | | | 09/01/20 | | | 3,123,006 |
| | | | | | | | | | | |
| | | | | | | | | | | 56,708,965 |
| | | | | | | | | | | |
| | | FEDERAL NATIONAL MORTGAGE
ASSOCIATION — 29.41% |
| | 177,052 | | Pool # 251502 | | 6.50 | | | 02/01/13 | | | 181,844 |
| | 75,060 | | Pool # 252806 | | 7.50 | | | 10/01/29 | | | 78,688 |
| | 1,093,661 | | Pool # 255896 | | 6.50 | | | 08/01/35 | | | 1,114,884 |
| | 4,787,145 | | Pool # 256269 | | 5.50 | | | 06/01/36 | | | 4,689,820 |
| | 9,803,967 | | Pool # 357824 | | 5.50 | | | 06/01/35 | | | 9,614,491 |
| | 1,218,929 | | Pool # 387203 | | 4.80 | | | 01/01/12 | | | 1,208,980 |
| | 1,040,831 | | Pool # 387204 | | 4.80 | | | 01/01/12 | | | 1,032,336 |
| | 199,157 | | Pool # 443194 | | 5.50 | | | 10/01/28 | | | 196,170 |
| | 3,847 | | Pool # 450846 | | 5.50 | | | 12/01/28 | | | 3,789 |
| | 337,685 | | Pool # 452035 | | 5.50 | | | 11/01/28 | | | 332,621 |
| | 2,265 | | Pool # 454758 | | 5.50 | | | 12/01/28 | | | 2,231 |
| | 552,697 | | Pool # 561435 | | 5.50 | | | 11/01/29 | | | 544,408 |
| | 299,509 | | Pool # 578543 | | 5.50 | | | 04/01/31 | | | 294,385 |
| | 111,388 | | Pool # 627259 | | 5.50 | | | 02/01/32 | | | 109,452 |
| | 953,853 | | Pool # 632551 | | 5.50 | | | 02/01/32 | | | 937,275 |
| | 428,663 | | Pool # 632576 | | 5.50 | | | 02/01/32 | | | 421,330 |
| | 208,532 | | Pool # 694655 | | 5.50 | | | 04/01/33 | | | 204,838 |
| | 1,465,264 | | Pool # 702861 | | 5.00 | | | 04/01/18 | | | 1,440,323 |
| | 1,334,444 | | Pool # 704440 | | 5.00 | | | 05/01/18 | | | 1,311,729 |
| | 58,045 | | Pool # 710585 | | 5.50 | | | 05/01/33 | | | 57,017 |
| | 349,465 | | Pool # 735224 | | 5.50 | | | 02/01/35 | | | 343,274 |
| | 22,070,624 | | Pool # 745432 | | 5.50 | | | 04/01/36 | | | 21,644,079 |
| | 949,818 | | Pool # 781859 | | 4.50 | | | 12/01/34 | | | 881,642 |
| | 1,334,761 | | Pool # 786423 ARM(b) | | 4.59 | | | 07/01/34 | | | 1,324,902 |
| | 431,185 | | Pool # 797680 | | 4.50 | | | 10/01/35 | | | 400,236 |
| | 647,787 | | Pool # 805373 | | 4.50 | | | 01/01/35 | | | 601,290 |
| | 6,159,345 | | Pool # 805386 ARM(b) | | 4.85 | | | 01/01/35 | | | 6,095,520 |
| | 748,393 | | Pool # 812268 | | 5.50 | | | 05/01/35 | | | 733,929 |
| | 1,008,991 | | Pool # 815479 | | 4.50 | | | 03/01/35 | | | 936,575 |
| | 1,271,697 | | Pool # 819361 | | 4.50 | | | 04/01/35 | | | 1,180,426 |
| | 535,391 | | Pool # 820492 | | 5.50 | | | 05/01/35 | | | 525,044 |
| | 734,644 | | Pool # 820989 | | 5.50 | | | 04/01/35 | | | 720,446 |
| | 709,774 | | Pool # 821567 | | 5.50 | | | 06/01/35 | | | 696,056 |
| | 1,725,574 | | Pool # 822799 | | 4.50 | | | 04/01/35 | | | 1,601,728 |
| | 6,085,226 | | Pool # 829321 | | 4.50 | | | 09/01/35 | | | 5,648,482 |
| | 8,082,723 | | Pool # 831926 | | 6.00 | | | 12/01/36 | | | 8,096,181 |
| | 4,904,429 | | Pool # 835751 | | 4.50 | | | 08/01/35 | | | 4,552,433 |
| | 1,786,633 | | Pool # 835760 | | 4.50 | | | 09/01/35 | | | 1,658,404 |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH
SECURITIES — (continued) |
| | | FEDERAL NATIONAL MORTGAGE
ASSOCIATION — (continued) |
| $ | 1,610,049 | | Pool # 836512 | | 4.50 | % | | 10/01/20 | | $ | 1,550,626 |
| | 4,087,042 | | Pool # 839240 | | 4.50 | | | 09/01/35 | | | 3,793,711 |
| | 2,600,373 | | Pool # 843510 | | 4.50 | | | 11/01/20 | | | 2,504,400 |
| | 1,616,173 | | Pool # 844797 | | 4.50 | | | 10/01/35 | | | 1,500,179 |
| | 1,793,946 | | Pool # 844901 | | 4.50 | | | 10/01/20 | | | 1,727,736 |
| | 5,683,479 | | Pool # 867438 | | 4.50 | | | 05/01/36 | | | 5,272,820 |
| | 4,645,441 | | Pool # 880084 | | 6.00 | | | 03/01/36 | | | 4,653,176 |
| | 5,458,986 | | Pool # 883084 | | 6.50 | | | 07/01/36 | | | 5,559,159 |
| | 696,437 | | Pool # 893426 | | 6.00 | | | 09/01/36 | | | 697,596 |
| | 2,972,931 | | Pool # 895271 | | 6.50 | | | 09/01/36 | | | 3,027,484 |
| | 4,705,343 | | Pool # 910390 | | 5.00 | | | 03/01/37 | | | 4,488,299 |
| | 1,959,597 | | Pool # 916370 | | 5.00 | | | 05/01/37 | | | 1,869,206 |
| | 8,071,805 | | Pool # 917906 | | 5.00 | | | 05/01/37 | | | 7,699,475 |
| | 30,111,220 | | Pool # 937282 | | 5.00 | | | 05/01/37 | | | 28,722,273 |
| | 6,612,962 | | Pool # 946450 ARM(b) | | 6.14 | | | 09/01/37 | | | 6,718,024 |
| | | | | | | | | | | |
| | | | | | | | | | | 161,201,422 |
| | | | | | | | | | | |
| | | GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION — 1.86% |
| | 281,198 | | Pool # 002562 | | 6.00 | | | 03/20/28 | | | 283,552 |
| | 1,731,128 | | Pool # 003413 | | 4.50 | | | 07/20/33 | | | 1,617,051 |
| | 329,691 | | Pool # 267812 | | 8.50 | | | 06/15/17 | | | 353,978 |
| | 1,569,095 | | Pool # 3442 | | 5.00 | | | 09/20/33 | | | 1,508,328 |
| | 2,732 | | Pool # 356873 | | 6.50 | | | 05/15/23 | | | 2,802 |
| | 29,201 | | Pool # 434772 | | 9.00 | | | 06/15/30 | | | 31,704 |
| | 46,324 | | Pool # 471660 | | 7.50 | | | 03/15/28 | | | 48,645 |
| | 118,488 | | Pool # 472028 | | 6.50 | | | 05/15/28 | | | 121,587 |
| | 53,263 | | Pool # 475847 | | 6.50 | | | 06/15/28 | | | 54,656 |
| | 20,664 | | Pool # 479087 | | 8.00 | | | 01/15/30 | | | 21,983 |
| | 296,926 | | Pool # 479088 | | 8.00 | | | 01/15/30 | | | 315,878 |
| | 114,538 | | Pool # 503711 | | 7.00 | | | 05/15/29 | | | 120,024 |
| | 9,599 | | Pool # 525556 | | 8.00 | | | 01/15/30 | | | 10,212 |
| | 10,842 | | Pool # 525945 | | 9.00 | | | 07/15/30 | | | 11,772 |
| | 106,859 | | Pool # 568670 | | 6.50 | | | 04/15/32 | | | 109,470 |
| | 199,220 | | Pool # 575441 | | 6.50 | | | 12/15/31 | | | 204,187 |
| | 558,400 | | Pool # 598127 | | 5.50 | | | 03/15/18 | | | 559,374 |
| | 1,199,530 | | Pool # 607668 | | 5.50 | | | 02/15/18 | | | 1,201,623 |
| | 757,885 | | Pool # 615639 | | 4.50 | | | 09/15/33 | | | 712,679 |
| | 146,831 | | Pool # 780086 | | 8.50 | | | 11/15/17 | | | 156,855 |
| | 644,617 | | Pool # 780548 | | 8.50 | | | 12/15/17 | | | 688,622 |
| | 484,872 | | Pool # 780865 | | 9.50 | | | 11/15/17 | | | 525,574 |
| | 163,538 | | Pool # 781036 | | 8.00 | | | 10/15/17 | | | 172,399 |
| | 614,937 | | Pool # 781084 | | 9.00 | | | 12/15/17 | | | 658,553 |
| | 147,181 | | Pool # 80185 ARM(b) | | 6.38 | | | 04/20/28 | | | 148,403 |
| | 155,788 | | Pool # 80205 ARM(b) | | 6.38 | | | 06/20/28 | | | 157,084 |
| | 384,378 | | Pool # 80311 ARM(b) | | 5.50 | | | 08/20/29 | | | 388,284 |
| | | | | | | | | | | |
| | | | | | | | | | | 10,185,279 |
| | | | | | | | | | | |
| | | TOTAL U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH SECURITIES
(Cost $229,035,737) | | | 228,095,666 |
| | | | | | | | | | | |
See Notes to Financial Statements.
18
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Core Bond Fund — (continued)
| | | | | | | | | | | | |
Principal
Amount | | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | | |
| | U.S. GOVERNMENT SECURITIES — 11.52% | | | |
| | | | U.S. TREASURY INFLATION PROTECTED
BONDS — 1.63% |
| $ | 1,183,718 | | | | | 2.00 | % | | 01/15/14 | | $ | 1,166,701 |
| | 2,762,700 | | | | | 2.38 | | | 01/15/25 | | | 2,787,089 |
| | 4,916,699 | | | | | 2.38 | | | 01/15/27 | | | 4,976,624 |
| | | | | | | | | | | | |
| | | | | | | | | | | | 8,930,414 |
| | | | | | | | | | | | |
| | | | U.S. TREASURY BONDS — 9.89% |
| | 19,880,000 | (e) | | | | 4.50 | | | 02/28/11 | | | 20,158,002 |
| | 21,810,000 | | | | | 7.63 | | | 11/15/22 | | | 28,206,459 |
| | 4,635,000 | | | | | 6.63 | | | 02/15/27 | | | 5,632,610 |
| | 200,000 | | | | | 4.75 | | | 02/15/37 | | | 197,233 |
| | | | | | | | | | | | |
| | | | | | | | | | | | 54,194,304 |
| | | | | | | | | | | | |
| | | | TOTAL U.S. GOVERNMENT SECURITIES
(Cost $62,617,784) | | | 63,124,718 |
| | | | | | | | | | | | |
| | | | |
| Contracts | | | | | | | | | | |
| | CALL OPTION PURCHASED — 0.00%* |
| | 10 | | | Euro Dollar Future, Expires 12/17/07 strike price 95.75 | | | 938 |
| | | | | | | | | | | | |
| | | | TOTAL CALL OPTION PURCHASED
(Cost $3,025) | | | 938 |
| | | | | | | | | | | | |
| | | | |
Principal
Amount | | | | | | | | | | |
| | REPURCHASE AGREEMENT — 0.62% | | | | | | |
| $ | 3,407,000 | | | Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 02/15/36, market value $3,475,725 (repurchase proceeds $3,408,036) | | | 3,407,000 |
| | | | | | | | | | | | |
| | | | TOTAL REPURCHASE AGREEMENT
(Cost $3,407,000) | | | 3,407,000 |
| | | | | | | | | | | | |
| | | | | | | | |
TOTAL INVESTMENTS
(Cost $546,295,502)(f) | | 99.53 | % | | | | $ | 545,461,548 |
OTHER ASSETS IN EXCESS OF
LIABILITIES | | 0.47 | | | | | | 2,569,168 |
| | | | | | | | |
NET ASSETS | | 100.00 | % | | | | $ | 548,030,716 |
| | | | | | | | |
| (a) | Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2007, these securities, which are not illiquid, amounted to $12,464,215, which represents 2.27% of net assets. |
| (b) | The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007. |
| (c) | Perpetual Security. Stated maturity is first par call date. |
| (e) | A portion of this security with market value of $253,496 is pledged as collateral for open futures contracts. |
| (f) | Cost for federal income tax purposes is $546,295,502. |
| * | Rounds to less than 0.01% |
ARM—Adjustable Rate Mortgage
LLC—Limited Liability Company
Multi-Coupon Bond—Coupon rate may increase or decrease in response to a change in the quality rating by an independent rating agency.
PLC—Public Limited Company
STRIPS—Separately Traded Registered Interest and Principal Securities
| | | | | | | | | | |
| Contracts | | | | Value | | | Unrealized
Appreciation
(Depreciation) | |
| FUTURES CONTRACTS | | | | | | | | |
| Long — | | | | | | | | |
| 63 | | U.S. 2 Year Treasury Note, expiring 12/31/07 (notional amount $12,983,079) | | $ | 13,043,953 | | | $ | 60,874 | |
| Short — | | | | | | | | |
| (30) | | U.S. Long-Term Treasury Bond expiring 12/19/07 (notional amount $(3,339,534)) | | | (3,340,312 | ) | | | (778 | ) |
| | | | | | | | | | |
| TOTAL FUTURES CONTRACTS | | | | | | $ | 60,096 | |
| | | | | | | | | | |
See Notes to Financial Statements.
19
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Core Bond Fund — (continued)
| * | Rounds to less than 0.01%. |
| | | | | | | | | | | | | |
INTEREST RATE SWAP AGREEMENT |
Counterparty | | Notional
Amount | | Receiving
Leg | | | Paying Leg | | Expiration | | Unrealized
Appreciation |
Goldman Sachs | | $ | 5,000,000 | | 5.36 | % | | 3-month USD
LIBOR | | 07/24/09 | | $ | 4,451 |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | | |
Portfolio Diversification | | % of
Net
Assets | | | Value |
U.S. Government & Agency Securities | | 54.11 | | | $ | 296,534,206 |
Corporate Bonds | | 18.56 | | | | 101,746,213 |
Commercial Mortgage-Backed Securities | | 16.60 | | | | 90,951,932 |
Collateralized Mortgage Obligations | | 6.99 | | | | 38,310,194 |
Asset-Backed Securities | | 2.34 | | | | 12,798,651 |
Repurchase Agreement | | 0.62 | | | | 3,407,000 |
Tax-Exempt Security | | 0.31 | | | | 1,712,414 |
Call Option Purchased | | 0.00 | * | | | 938 |
| | | | | | |
Total Investments | | 99.53 | | | $ | 545,461,548 |
Other Assets in Excess of Liabilities | | 0.47 | | | | 2,569,168 |
| | | | | | |
Net Assets | | 100.00 | | | $ | 548,030,716 |
| | | | | | |
See Notes to Financial Statements.
20
Excelsior Funds Trust
Portfolio of Investments — September 30, 2007 (Unaudited)
High Yield Fund
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | CORPORATE BONDS — 92.54% | | | | | | | | |
| | | ADVERTISING PERIODICALS — 2.45% |
| $ | 60,000 | | CanWest Media Works, Inc. | | 8.00 | % | | 09/15/12 | | $ | 58,800 |
| | 1,000,000 | | Dex Media Finance/West | | 8.50 | | | 08/15/10 | | | 1,027,500 |
| | 1,000,000 | | R.H. Donnelley Finance Corp.(a) | | 10.88 | | | 12/15/12 | | | 1,065,000 |
| | 40,000 | | R.H. Donnelley Finance Corp. | | 10.88 | | | 12/15/12 | | | 42,600 |
| | | | | | | | | | | |
| | | | | | | | | | | 2,193,900 |
| | | | | | | | | | | |
| | | CABLE TV — 2.31% | | | | | | | | |
| | 1,000,000 | | Echostar DBS Corp. | | 7.13 | | | 02/01/16 | | | 1,027,500 |
| | 1,000,000 | | NTL Cable PLC | | 9.13 | | | 08/15/16 | | | 1,037,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 2,065,000 |
| | | | | | | | | | | |
| | | CASINO HOTELS — 5.91% |
| | 1,000,000 | | American Casino & Entertainment | | 7.85 | | | 02/01/12 | | | 1,027,500 |
| | 1,000,000 | | Boyd Gaming Corp. | | 7.13 | | | 02/01/16 | | | 967,500 |
| | 1,500,000 | | Majestic Star LLC | | 9.75 | | | 01/15/11 | | | 1,260,000 |
| | 1,000,000 | | MGM Mirage, Inc. | | 8.50 | | | 09/15/10 | | | 1,045,000 |
| | 1,000,000 | | MGM Mirage, Inc. | | 7.50 | | | 06/01/16 | | | 993,750 |
| | | | | | | | | | | |
| | | | | | | | | | | 5,293,750 |
| | | | | | | | | | | |
| | | CELLULAR TELECOM — 1.57% |
| | 330,000 | | American Cellular Corp. | | 10.00 | | | 08/01/11 | | | 344,850 |
| | 1,000,000 | | Dobson Communications Corp. | | 8.88 | | | 10/01/13 | | | 1,065,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,409,850 |
| | | | | | | | | | | |
| | | CHEMICALS - DIVERSIFIED — 2.26% |
| | 37,000 | | EquiStar Chemicals LP/EquiStar Funding Corp. | | 10.13 | | | 09/01/08 | | | 38,203 |
| | 1,000,000 | | Lyondell Chemical Co. | | 10.50 | | | 06/01/13 | | | 1,075,000 |
| | 1,000,000 | | Nell AF Sarl(a) | | 8.38 | | | 08/15/15 | | | 912,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 2,025,703 |
| | | | | | | | | | | |
| | | CHEMICALS – PLASTICS — 0.58% |
| | 500,000 | | PolyOne Corp. | | 8.88 | | | 05/01/12 | | | 515,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 515,000 |
| | | | | | | | | | | |
| | | CHEMICALS – SPECIALTY — 1.11% |
| | 1,000,000 | | Tronox Worldwide LLC/Tronox Finance Corp. | | 9.50 | | | 12/01/12 | | | 997,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 997,500 |
| | | | | | | | | | | |
| | | COAL — 1.04% | | | | | | | | |
| | 1,000,000 | | Massey Energy Co. | | 6.88 | | | 12/15/13 | | | 932,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 932,500 |
| | | | | | | | | | | |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | CORPORATE BONDS — (continued) | | | | | | |
| | | COMMERCIAL SERVICES — 2.24% |
| $ | 1,000,000 | | Iron Mountain, Inc. | | 8.63 | % | | 04/01/13 | | $ | 1,012,500 |
| | 1,000,000 | | Iron Mountain, Inc. | | 7.75 | | | 01/15/15 | | | 997,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 2,010,000 |
| | | | | | | | | | | |
| | | COMPUTER SERVICES — 1.17% |
| | 1,000,000 | | Sungard Data Systems, Inc. | | 10.25 | | | 08/15/15 | | | 1,045,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,045,000 |
| | | | | | | | | | | |
| | | CONTAINERS – METAL/GLASS — 2.28% |
| | 1,000,000 | | Crown Americas | | 7.75 | | | 11/15/15 | | | 1,032,500 |
| | 1,000,000 | | Owens-Illinois, Inc. | | 7.50 | | | 05/15/10 | | | 1,007,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 2,040,000 |
| | | | | | | | | | | |
| | | CONTAINERS – PAPER/PLASTIC — 4.55% |
| | 1,000,000 | | BPC Holding Corp. | | 8.88 | | | 09/15/14 | | | 1,022,500 |
| | 500,000 | | Graham Packaging Co. | | 8.50 | | | 10/15/12 | | | 496,250 |
| | 500,000 | | Graham Packaging Co. | | 9.88 | | | 10/15/14 | | | 495,000 |
| | 1,000,000 | | Pregis Corp. | | 12.38 | | | 10/15/13 | | | 1,080,000 |
| | 1,000,000 | | Stone Container | | 8.00 | | | 03/15/17 | | | 982,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 4,076,250 |
| | | | | | | | | | | |
| | | COSMETICS & TOILETRIES — 1.54% |
| | 1,500,000 | | Del Laboratories, Inc. | | 8.00 | | | 02/01/12 | | | 1,380,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,380,000 |
| | | | | | | | | | | |
| | | DISTRIBUTION/WHOLESALE — 1.11% |
| | 1,000,000 | | Nebraska Book Co. | | 8.63 | | | 03/15/12 | | | 997,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 997,500 |
| | | | | | | | | | | |
| | | DIVERSIFIED MANUFACTURING
OPERATIONS — 2.17% |
| | 1,000,000 | | Bombardier, Inc.(a) | | 8.00 | | | 11/15/14 | | | 1,047,500 |
| | 1,000,000 | | Harland Clarke Holdings Corp. | | 9.50 | | | 05/15/15 | | | 892,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,940,000 |
| | | | | | | | | | | |
| | | ELECTRONIC COMPONENTS – SEMICONDUCTORS — 2.16% |
| | 1,000,000 | | Amkor Technologies, Inc. | | 9.25 | | | 06/01/16 | | | 1,010,000 |
| | 1,000,000 | | Freescale Semiconductor PIK | | 9.13 | | | 12/15/14 | | | 925,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,935,000 |
| | | | | | | | | | | |
See Notes to Financial Statements.
21
Excelsior Funds Trust
Portfolio of Investments — September 30, 2007 (Unaudited)
High Yield Fund — (continued)
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | CORPORATE BONDS — (continued) | | | | | | |
| | | FINANCE – AUTO LOANS — 3.76% |
| $ | 1,354,000 | | Ford Motor Credit Co. | | 9.75 | % | | 09/15/10 | | $ | 1,381,332 |
| | 2,000,000 | | General Motors Acceptance Corp. | | 7.75 | | | 01/19/10 | | | 1,983,728 |
| | | | | | | | | | | |
| | | | | | | | | | | 3,365,060 |
| | | | | | | | | | | |
| | | FOOD & KINDRED PRODUCTS — 1.06% |
| | 1,000,000 | | Pinnacle Foods Finance LLC(a) | | 9.25 | | | 04/01/15 | | | 952,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 952,500 |
| | | | | | | | | | | |
| | | FOOD – MISCELLANEOUS AND DIVERSIFIED — 2.25% |
| | 1,000,000 | | Del Monte Corporation | | 8.63 | | | 12/15/12 | | | 1,015,000 |
| | 1,000,000 | | Del Monte Corporation | | 6.75 | | | 02/15/15 | | | 960,000 |
| | 40,000 | | Dole Foods Co. | | 7.25 | | | 06/15/10 | | | 37,800 |
| | | | | | | | | | | |
| | | | | | | | | | | 2,012,800 |
| | | | | | | | | | | |
| | | FUNERAL SERVICES & RELATED ITEMS — 1.65% |
| | 1,500,000 | | Service Corp. International | | 7.00 | | | 06/15/17 | | | 1,473,750 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,473,750 |
| | | | | | | | | | | |
| | | HEAVY CONSTRUCTION EQUIPMENT
RENTAL — 1.07% |
| | 1,000,000 | | Ahern Rentals, Inc. | | 9.25 | | | 08/15/13 | | | 962,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 962,500 |
| | | | | | | | | | | |
| | | HOME FURNISHINGS — 2.20% |
| | 1,000,000 | | Sealy Mattress Co. | | 8.25 | | | 06/15/14 | | | 1,007,500 |
| | 1,000,000 | | Simmons Co. | | 7.88 | | | 01/15/14 | | | 960,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,967,500 |
| | | | | | | | | | | |
| | | MACHINERY – FARM — 1.14% |
| | 1,000,000 | | Case New Holland, Inc. | | 7.13 | | | 03/01/14 | | | 1,025,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,025,000 |
| | | | | | | | | | | |
| | | MACHINERY – GENERAL INDUSTRY — 1.11% |
| | 1,000,000 | | The Manitowoc Co., Inc. | | 7.13 | | | 11/01/13 | | | 995,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 995,000 |
| | | | | | | | | | | |
| | | MEDICAL - HOSPITALS — 0.95 % |
| | 1,000,000 | | HCA, Inc. | | 6.50 | | | 02/15/16 | | | 850,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 850,000 |
| | | | | | | | | | | |
| | | MULTI - LINE INSURANCE — 2.47% |
| | 2,128,000 | | Hanover Insurance Group | | 7.63 | | | 10/15/25 | | | 2,207,942 |
| | | | | | | | | | | |
| | | | | | | | | | | 2,207,942 |
| | | | | | | | | | | |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | CORPORATE BONDS — (continued) | | | | | | |
| | | MUSIC — 2.04% |
| $ | 2,100,000 | | Warner Music Group | | 7.38 | % | | 04/15/14 | | $ | 1,827,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,827,000 |
| | | | | | | | | | | |
| | | OFFICE AUTOMATION & EQUIPMENT — 2.25% |
| | 1,000,000 | | Ikon Office Solutions | | 7.75 | | | 09/15/15 | | | 1,005,000 |
| | 1,000,000 | | Xerox Capital Trust I | | 8.00 | | | 02/01/27 | | | 1,008,861 |
| | | | | | | | | | | |
| | | | | | | | | | | 2,013,861 |
| | | | | | | | | | | |
| | | PAPER & RELATED PRODUCTS — 1.09% |
| | 1,000,000 | | Mercer International, Inc. | | 9.25 | | | 02/15/13 | | | 977,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 977,500 |
| | | | | | | | | | | |
| | | PIPELINES — 2.20% | | | | | | | | |
| | 1,500,000 | | Semgroup L.P.(a) | | 8.75 | | | 11/15/15 | | | 1,466,250 |
| | 500,000 | | Williams Cos.(a) | | 6.38 | | | 10/01/10 | | | 502,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,968,750 |
| | | | | | | | | | | |
| | | RACETRACKS — 1.14% |
| | 1,000,000 | | Penn National Gaming, Inc. | | 6.75 | | | 03/01/15 | | | 1,020,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,020,000 |
| | | | | | | | | | | |
| | | REAL ESTATE MANAGEMENT/SERVICES — 0.95% |
| | 1,000,000 | | Realogy Corp.(a) | | 10.50 | | | 04/15/14 | | | 852,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 852,500 |
| | | | | | | | | | | |
| | | RENTAL AUTO/EQUIPMENT — 2.16% |
| | 1,000,000 | | Avis Budget Car Rental | | 7.75 | | | 05/15/16 | | | 980,000 |
| | 1,000,000 | | Rental Service Corp. | | 9.50 | | | 12/01/14 | | | 955,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,935,000 |
| | | | | | | | | | | |
| | | RESORTS/THEME PARKS — 1.13% |
| | 1,000,000 | | Universal City Florida Holdings (b) | | 10.11 | | | 05/01/10 | | | 1,010,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,010,000 |
| | | | | | | | | | | |
| | | RETAIL - APPAREL/SHOE — 1.31% |
| | 1,250,000 | | Burlington Coat Factory | | 11.13 | | | 04/15/14 | | | 1,168,750 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,168,750 |
| | | | | | | | | | | |
| | | RETAIL - BEDDING — 0.77% |
| | 1,000,000 | | Linens ‘N Things, Inc.(b) | | 10.99 | | | 01/15/14 | | | 686,250 |
| | | | | | | | | | | |
| | | | | | | | | | | 686,250 |
| | | | | | | | | | | |
| | | RETAIL - DRUG STORE — 1.01% |
| | 1,000,000 | | Rite Aid Corp. | | 8.63 | | | 03/01/15 | | | 905,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 905,000 |
| | | | | | | | | | | |
See Notes to Financial Statements.
22
Excelsior Funds Trust
Portfolio of Investments — September 30, 2007 (Unaudited)
High Yield Fund — (continued)
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | CORPORATE BONDS — (continued) | | | | | | |
| | | RETAIL – MAJOR DEPARTMENT STORE — 2.38% |
| $ | 1,000,000 | | Neiman Marcus Group, Inc. PIK | | 9.00 | % | | 10/15/15 | | $ | 1,065,000 |
| | 1,000,000 | | Saks, Inc. | | 9.88 | | | 10/01/11 | | | 1,065,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 2,130,000 |
| | | | | | | | | | | |
| | | RETAIL – TOY STORE — 0.45% |
| | 500,000 | | Toys R Us | | 7.38 | | | 10/15/18 | | | 401,250 |
| | | | | | | | | | | |
| | | | | | | | | | | 401,250 |
| | | | | | | | | | | |
| | | RETAIL – VIDEO RENTAL — 1.51% |
| | 1,500,000 | | Blockbuster, Inc. | | 9.00 | | | 09/01/12 | | | 1,350,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,350,000 |
| | | | | | | | | | | |
| | | RUBBER – TIRES — 0.05% |
| | 41,000 | | Goodyear Tire & Rubber Co. | | 9.00 | | | 07/01/15 | | | 43,767 |
| | | | | | | | | | | |
| | | | | | | | | | | 43,767 |
| | | | | | | | | | | |
| | | SATELLITE TELECOM — 2.54% |
| | 650,000 | | Inmarsat Finance PLC | | 7.63 | | | 06/30/12 | | | 669,500 |
| | 1,500,000 | | Intelsat Bermuda Ltd. | | 11.25 | | | 06/15/16 | | | 1,606,875 |
| | | | | | | | | | | |
| | | | | | | | | | | 2,276,375 |
| | | | | | | | | | | |
| | | SCHOOLS — 1.63% |
| | 1,500,000 | | Knowledge Learning Center(a) | | 7.75 | | | 02/01/15 | | | 1,455,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,455,000 |
| | | | | | | | | | | |
| | | SPECIAL PURPOSE ENTITY — 4.80% |
| | 3,200,000 | | Targeted Return Index Securities Trust (TRAIN), Series HY-1-2006(a) | | 7.55 | | | 05/01/16 | | | 3,136,288 |
| | 1,500,000 | | Wimar OPCO LLC(a) | | 9.63 | | | 12/15/14 | | | 1,162,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 4,298,788 |
| | | | | | | | | | | |
| | | TELEPHONE – INTEGRATED — 9.82% |
| | 2,000,000 | | Cincinnati Bell, Inc. | | 8.38 | | | 01/15/14 | | | 1,995,000 |
| | 1,000,000 | | Citizens Communications | | 9.25 | | | 05/15/11 | | | 1,085,000 |
| | 649,000 | | Consolidated Communications Holding | | 9.75 | | | 04/01/12 | | | 655,490 |
| | 1,500,000 | | Hawaiian Telcom Communication | | 12.50 | | | 05/01/15 | | | 1,620,000 |
| | 1,250,000 | | Nordic Telephone Co. Holdings(a) | | 8.88 | | | 05/01/16 | | | 1,318,750 |
| | 1,000,000 | | Valor Telecom Enterprise | | 7.75 | | | 02/15/15 | | | 1,048,071 |
| | 1,000,000 | | Windstream Corp. | | 8.63 | | | 08/01/16 | | | 1,066,250 |
| | | | | | | | | | | |
| | | | | | | | | | | 8,788,561 |
| | | | | | | | | | | |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | CORPORATE BONDS — (continued) | | | | | | |
| | | TELEVISION — 0.03% |
| $ | 26,000 | | Sinclair Broadcast Group | | 8.00 | % | | 03/15/12 | | $ | 26,585 |
| | | | | | | | | | | |
| | | | | | | | | | | 26,585 |
| | | | | | | | | | | |
| | | TRAVEL SERVICES — 1.17% |
| | 1,000,000 | | Travelport LLC | | 11.88 | | | 09/01/16 | | | 1,047,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,047,500 |
| | | | | | | | | | | |
| | | TOTAL CORPORATE BONDS
(Cost $83,729,945) | | | 82,851,442 |
| | | | | | | | | | | |
| | BANK LOANS — 2.15% | | | | | | | | |
| | | COMPUTER SERVICES — 2.15% |
| | 2,000,000 | | First Data Corp.(b) | | 7.98 | | | 09/24/14 | | | 1,927,400 |
| | | | | | | | | | | |
| | | TOTAL BANK LOANS
(Cost $1,940,000) | | | 1,927,400 |
| | | | | | | | | | | |
| | | | |
| Shares | | | | | | | | | |
| | COMMON STOCK — 2.70% | | | | | | | | |
| | | METAL – ALUMINUM — 2.70% |
| | 127,380 | | Ormet Corp.(c) | | | | | | | | 2,420,220 |
| | | | | | | | | | | |
| | | TOTAL COMMON STOCK
(Cost $1,019,040) | | | 2,420,220 |
| | | | | | | | | | | |
| | | | |
Principal
Amount | | | | | | | | | |
| | REPURCHASE AGREEMENT — 3.44% | | | | | | |
| $ | 3,085,000 | | Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 02/15/36, market value $3,150,175 (repurchase proceeds $3,085,938) | | | 3,085,000 |
| | | | | | | | | | | |
| | | TOTAL REPURCHASE AGREEMENT
(Cost $3,085,000) | | | 3,085,000 |
| | | | | | | | | | | |
| | | | | | | |
TOTAL INVESTMENTS
(Cost $89,773,985)(d) | | 100.83 | % | | $ | 90,284,062 | |
OTHER LIABILITIES IN EXCESS OF ASSETS | | (0.83 | ) | | | (746,643 | ) |
| | | | | | | |
NET ASSETS | | 100.00 | % | | $ | 89,537,419 | |
| | | | | | | |
| (a) | Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. This security may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2007, these securities, which are not illiquid, amounted to $13,871,288, which represents 15.49% of net assets. |
| (b) | The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007. |
See Notes to Financial Statements.
23
Excelsior Funds Trust
Portfolio of Investments — September 30, 2007 (Unaudited)
High Yield Fund — (continued)
| (c) | Non-income producing security. |
| (d) | Cost for federal income tax purposes is $89,735,824. |
LLC—Limited Liability Company
L.P.—Limited Partnership
PIK—Payment-In-Kind
PLC—Public Limited Company
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | | | |
Sector Diversification | | % of
Net
Assets | | | Value | |
Consumer Cyclical | | 21.05 | | | $ | 18,838,267 | |
Communications | | 18.72 | | | | 16,760,271 | |
Consumer Non-Cyclical | | 13.48 | | | | 12,069,050 | |
Financial | | 13.11 | | | | 11,734,290 | |
Industrials | | 12.32 | | | | 11,038,750 | |
Basic Materials | | 7.74 | | | | 6,935,923 | |
Technology | | 7.73 | | | | 6,921,261 | |
Repurchase Agreement | | 3.44 | | | | 3,085,000 | |
Energy | | 3.24 | | | | 2,901,250 | |
| | | | | | | |
Total Investments | | 100.83 | | | $ | 90,284,062 | |
Other Liabilities in Excess of Assets | | (0.83 | ) | | | (746,643 | ) |
| | | | | | | |
Net Assets | | 100.00 | | | $ | 89,537,419 | |
| | | | | | | |
See Notes to Financial Statements.
24
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Intermediate-Term Bond Fund
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | ASSET-BACKED SECURITIES — 2.11% |
| $ | 2,200,000 | | Capital Auto Receivables Asset Trust,
2006-SN1A B(a) | | 5.50 | % | | 04/20/10 | | $ | 2,194,540 |
| | 2,000,000 | | Capital One Master Trust,
2001-6 C(a) | | 6.70 | | | 06/15/11 | | | 2,037,740 |
| | 2,665,000 | | Capital One Multi-Asset Execution Trust,
2005-A7 A7 | | 4.70 | | | 06/15/15 | | | 2,624,197 |
| | 194,115 | | Chase Funding Mortgage Loan Asset Backed Certificates,
2003-3 2A2(b) | | 5.40 | | | 04/25/33 | | | 189,455 |
| | 2,385,000 | | USAA Auto Owner Trust,
2007-2 A4(c) | | 5.07 | | | 06/15/13 | | | 2,384,847 |
| | | | | | | | | | | |
| | | TOTAL ASSET BACKED SECURITIES
(Cost $9,503,971) | | | 9,430,779 |
| | | | | | | | | | | |
| | COLLATERALIZED MORTGAGE OBLIGATIONS — 10.89% |
| | | NON-GOVERNMENTAL AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS — 2.28% |
| | 1,004,433 | | Bear Stearns ARM,
2004-1 11A3 | | 6.11 | | | 04/25/34 | | | 1,022,876 |
| | 2,893,018 | | Countrywide Alternative Loan Trust,
2004-22CB 1A1 | | 6.00 | | | 10/25/34 | | | 2,864,993 |
| | 3,322,000 | | Washington Mutual,
2005-AR5 A3(b) | | 4.67 | | | 05/25/35 | | | 3,294,541 |
| | 3,015,668 | | Wells Fargo Mortgage Backed Securities Trust,
2005-AR1 1A1(b) | | 4.54 | | | 02/25/35 | | | 2,980,266 |
| | | | | | | | | | | |
| | | | | | | | | | | 10,162,676 |
| | | | | | | | | | | |
| | | FEDERAL HOME LOAN MORTGAGE CORPORATION — 0.64% |
| | 2,909,792 | | R001 AE | | 4.38 | | | 04/15/15 | | | 2,860,219 |
| | | | | | | | | | | |
| | | | | | | | | | | 2,860,219 |
| | | | | | | | | | | |
| | | FEDERAL NATIONAL MORTGAGE ASSOCIATION —3.62% |
| | 3,200,000 | | 2003-17 QT | | 5.00 | | | 08/25/27 | | | 3,195,776 |
| | 3,995,000 | | 2006-67 PC | | 5.50 | | | 03/25/33 | | | 3,959,207 |
| | 9,047,712 | | 2007-35 DH | | 5.00 | | | 09/25/33 | | | 9,005,844 |
| | | | | | | | | | | |
| | | | | | | | | | | 16,160,827 |
| | | | | | | | | | | |
| | | GOVERNMENT NATIONAL MORTGAGE ASSOCIATION — 4.35% |
| | 10,355,000 | | 2004-45 B | | 5.18 | | | 05/16/28 | | | 10,286,778 |
| | 2,800,000 | | 2005-10 MW | | 4.67 | | | 09/16/25 | | | 2,736,039 |
| | 2,925,000 | | 2005-14 B | | 4.48 | | | 08/16/32 | | | 2,861,865 |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | COLLATERALIZED MORTGAGE OBLIGATIONS — (continued) |
| | | GOVERNMENT NATIONAL MORTGAGE ASSOCIATION — (continued) |
| $ | 3,528,316 | | 2006-55 AB | | 5.25 | % | | 07/16/29 | | $ | 3,531,548 |
| | | | | | | | | | | |
| | | | | | | | | | | 19,416,230 |
| | | | | | | | | | | |
| | | TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $48,870,655) | | | 48,599,952 |
| | | | | | | | | | | |
| | COMMERCIAL MORTGAGE-BACKED SECURITIES — 17.46% |
| | 4,350,000 | | Bank of America Commercial Mortgage, Inc.,
2004-1 A4 | | 4.76 | | | 11/10/39 | | | 4,197,436 |
| | 2,000,000 | | Commercial Mortgage Asset Trust,
1999-C1 B | | 7.23 | | | 01/17/32 | | | 2,186,268 |
| | 3,556,000 | | Commercial Mortgage Asset Trust,
1999-C2 C | | 7.80 | | | 11/17/32 | | | 3,993,907 |
| | 3,325,000 | | Credit Suisse First Boston Mortgage Securities Corp.,
2002-CP5 G(a) | | 5.88 | | | 12/15/35 | | | 3,316,368 |
| | 5,135,000 | | First Union National Bank Commercial Mortgage, Inc.,
2002-C1 A2 | | 6.14 | | | 02/12/34 | | | 5,330,818 |
| | 3,900,000 | | GMAC Commercial Mortgage Securities, Inc., 1999-C1 C | | 6.59 | | | 05/15/33 | | | 3,968,510 |
| | 7,197,000 | | JP Morgan Chase Commercial Mortgage Securities Corp.,
2005-CB12 AJ | | 4.99 | | | 09/12/37 | | | 6,767,641 |
| | 4,500,000 | | JP Morgan Chase Commercial Mortgage Securities Corp.,
2005-LDP2 A4 | | 4.74 | | | 07/15/42 | | | 4,288,098 |
| | 5,430,000 | | JPMorgan Chase Commercial Mortgage Securities Corp.,
2005-LDP5 AJ(b) | | 5.47 | | | 12/15/44 | | | 5,241,852 |
| | 3,085,000 | | Morgan Stanley Dean Witter Capital I,
2003-TOP9 A2 | | 4.74 | | | 11/13/36 | | | 3,011,025 |
| | 3,104,000 | | Morgan Stanley Dean Witter Capital I,
2005-HQ5 A4 | | 5.17 | | | 01/14/42 | | | 3,029,427 |
| | 4,025,000 | | Nomura Asset Securities Corp.,
1998-D6 A4(b) | | 7.62 | | | 03/15/30 | | | 4,541,675 |
| | 3,320,000 | | Salomon Brothers Mortgage Securities VII,
2002 KEY2 A3 | | 4.87 | | | 03/18/36 | | | 3,277,143 |
See Notes to Financial Statements.
25
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Intermediate-Term Bond Fund — (continued)
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | COMMERCIAL MORTGAGE-BACKED SECURITIES — (continued) |
| $ | 1,435,000 | | Wachovia Bank Commercial Mortgage Trust,
2002- C1 A4 | | 6.29 | % | | 04/15/34 | | $ | 1,497,345 |
| | 6,525,000 | | Wachovia Bank Commercial Mortgage Trust,
2003-C9 A3 | | 4.61 | | | 12/15/35 | | | 6,435,731 |
| | 1,717,763 | | Wachovia Bank Commercial Mortgage Trust,
2004-C12 A2 | | 5.00 | | | 07/15/41 | | | 1,715,753 |
| | 4,775,000 | | Wachovia Bank Commercial Mortgage Trust,
2004-C12 A3 | | 5.23 | | | 07/15/41 | | | 4,779,083 |
| | 4,267,000 | | Wachovia Bank Commercial Mortgage Trust,
2005-C20 A5 | | 5.09 | | | 07/15/42 | | | 4,245,150 |
| | 6,150,000 | | Wachovia Bank Commercial Mortgage Trust,
2005-C20 A6A | | 5.11 | | | 07/15/42 | | | 6,087,220 |
| | | | | | | | | | | |
| | | TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES
(Cost $79,623,941) | | | 77,910,450 |
| | | | | | | | | | | |
| | CORPORATE BONDS — 20.16% |
| | 1,720,000 | | America Movil S.A. de C.V. | | 5.50 | | | 03/01/14 | | | 1,695,397 |
| | 1,675,000 | | Apache Corp. | | 5.25 | | | 04/15/13 | | | 1,665,662 |
| | 1,180,000 | | Bottling Group LLC | | 5.50 | | | 04/01/16 | | | 1,181,581 |
| | 1,785,000 | | Caterpillar Financial Services Corp. | | 5.85 | | | 09/01/17 | | | 1,801,254 |
| | 500,000 | | Cincinnati Bell, Inc. | | 8.38 | | | 01/15/14 | | | 498,750 |
| | 3,845,000 | | Cisco Systems, Inc. | | 5.50 | | | 02/22/16 | | | 3,819,292 |
| | 890,000 | | CIT Group, Inc. | | 6.10 | | | 03/15/67 | | | 734,453 |
| | 2,310,000 | | CIT Group, Inc. | | 5.80 | | | 07/28/11 | | | 2,261,758 |
| | 6,080,000 | | Citigroup, Inc. | | 5.25 | | | 02/27/12 | | | 6,078,717 |
| | 3,595,000 | | Comcast Cable Holdings LLC | | 9.80 | | | 02/01/12 | | | 4,161,036 |
| | 3,000,000 | | CVS Lease Pass Through Trust | | 6.13 | | | 08/15/16 | | | 2,998,716 |
| | 4,750,000 | | Deutsche Telekom International Finance | | 5.38 | | | 03/23/11 | | | 4,751,102 |
| | 4,000,000 | | Diageo Capital PLC | | 4.38 | | | 05/03/10 | | | 3,946,116 |
| | 2,380,000 | | Federal Express Corp. | | 5.50 | | | 08/15/09 | | | 2,406,615 |
| | 1,400,000 | | Ford Motor Credit Co. | | 8.63 | | | 11/01/10 | | | 1,387,910 |
| | 2,770,000 | | General Electric Capital Corp., MTN | | 6.00 | | | 06/15/12 | | | 2,856,272 |
| | 2,875,000 | | General Mills, Inc. | | 5.65 | | | 09/10/12 | | | 2,900,596 |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | CORPORATE BONDS — (continued) |
| $ | 3,140,000 | | Georgia Power Co. | | 5.70 | % | | 06/01/17 | | $ | 3,139,956 |
| | 2,415,000 | | Historic TW, Inc. | | 9.15 | | | 02/01/23 | | | 2,945,006 |
| | 500,000 | | Iron Mountain, Inc. | | 8.63 | | | 04/01/13 | | | 506,250 |
| | 3,080,000 | | John Deere Capital Corp., MTN | | 5.65 | | | 07/25/11 | | | 3,136,900 |
| | 3,200,000 | | Johnson & Johnson | | 5.15 | | | 08/15/12 | | | 3,252,080 |
| | 2,960,000 | | Lehman Brothers Holdings, Inc. | | 4.25 | | | 01/27/10 | | | 2,866,837 |
| | 2,645,000 | | Nisource Finance Corp. | | 5.25 | | | 09/15/17 | | | 2,454,875 |
| | 4,025,000 | | Oracle Corp. | | 5.25 | | | 01/15/16 | | | 3,919,299 |
| | 5,150,000 | | RBS Capital Trust III(d) | | 5.51 | | | 09/29/49 | | | 4,818,541 |
| | 2,050,000 | | Southern Co. | | 5.30 | | | 01/15/12 | | | 2,048,506 |
| | 1,530,000 | | Sprint Capital Corp. | | 8.38 | | | 03/15/12 | | | 1,684,584 |
| | 4,290,000 | | Target Corp. | | 5.88 | | | 07/15/16 | | | 4,289,824 |
| | 1,125,000 | | Telefonica Emisiones SAU | | 6.42 | | | 06/20/16 | | | 1,154,423 |
| | 2,105,000 | | United Health Group, Inc.(a) | | 6.00 | | | 06/15/17 | | | 2,103,270 |
| | 1,110,000 | | Virginia Electric Power | | 5.40 | | | 01/15/16 | | | 1,072,599 |
| | 1,525,000 | | Virginia Electric Power | | 5.95 | | | 09/15/17 | | | 1,522,790 |
| | 2,000,000 | | Wal-Mart Stores, Inc. | | 5.00 | | | 04/05/12 | | | 1,982,436 |
| | 1,000,000 | | Xerox Corp. | | 6.40 | | | 03/15/16 | | | 1,012,369 |
| | 975,000 | | Zions Bancorp | | 5.50 | | | 11/16/15 | | | 936,292 |
| | | | | | | | | | | |
| | | TOTAL CORPORATE BONDS
(Cost $90,771,629) | | | 89,992,064 |
| | | | | | | | | | | |
| | U.S. GOVERNMENT AGENCY BONDS & NOTES — 7.59% |
| | | FEDERAL FARM CREDIT BANK — 1.43% |
| | 6,230,000 | | | | 5.25 | | | 09/13/10 | | | 6,368,219 |
| | | | | | | | | | | |
| | | FEDERAL HOME LOAN BANK — 5.39% |
| | 15,290,000 | | | | 5.13 | | | 09/29/10 | | | 15,563,400 |
| | 8,385,000 | | | | 5.33 | | | 03/06/12 | | | 8,470,695 |
| | | | | | | | | | | |
| | | | | | | | | | | 24,034,095 |
| | | | | | | | | | | |
| | | FREDDIE MAC — 0.77% |
| | 3,355,000 | | | | 5.13 | | | 07/15/12 | | | 3,429,159 |
| | | | | | | | | | | |
| | | TOTAL U.S. GOVERNMENT AGENCY BONDS & NOTES
(Cost $33,156,434) | | | 33,831,473 |
| | | | | | | | | | | |
| U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH
SECURITIES — 16.39% |
| | | FEDERAL HOME LOAN MORTGAGE
CORPORATION — 1.72% |
| | 3,321,776 | | Pool # 1G1026
ARM(b) | | 5.92 | | | 07/01/36 | | | 3,330,102 |
| | 3,011,017 | | Pool # A36827 | | 5.00 | | | 08/01/35 | | | 2,876,927 |
| | 349,485 | | Pool # G18136 | | 6.00 | | | 08/01/21 | | | 353,902 |
| | 1,103,554 | | Pool # J03619 | | 6.00 | | | 10/01/21 | | | 1,117,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 7,678,431 |
| | | | | | | | | | | |
See Notes to Financial Statements.
26
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Intermediate-Term Bond Fund — (continued)
| | | | | | | | | | | | |
Principal
Amount | | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | | |
| U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH
SECURITIES — (continued) |
| | | | FEDERAL NATIONAL MORTGAGE ASSOCIATION — 12.8% |
| $ | 2,630,000 | | | Pool # 385538 | | 4.79 | % | | 11/01/12 | | $ | 2,606,504 |
| | 509,639 | | | Pool # 545290 | | 7.50 | | | 10/01/16 | | | 527,221 |
| | 8,680,000 | | | Pool # 00553 | | 5.13 | | | 04/15/11 | | | 8,864,016 |
| | 2,970 | | | Pool # 578823 | | 5.50 | | | 04/01/31 | | | 2,919 |
| | 2,149,650 | | | Pool # 704372
ARM(b) | | 4.51 | | | 05/01/33 | | | 2,121,491 |
| | 4,473,822 | | | Pool # 805386
ARM(b) | | 4.85 | | | 01/01/35 | | | 4,427,462 |
| | 170,229 | | | Pool # 872534 | | 6.00 | | | 06/01/36 | | | 170,512 |
| | 3,755,931 | | | Pool # 892882
ARM(b) | | 5.83 | | | 07/01/36 | | | 3,780,655 |
| | 34,586,051 | | | Pool # G02884 | | 6.00 | | | 04/01/37 | | | 34,633,380 |
| | | | | | | | | | | | |
| | | | | | | | | | | | 57,134,160 |
| | | | | | | | | | | | |
| | | | GOVERNMENT NATIONAL MORTGAGE ASSOCIATION — 1.87% |
| | 12,144 | | | Pool # 195801 | | 8.50 | | | 01/15/17 | | | 13,039 |
| | 8,048 | | | Pool # 195833 | | 8.50 | | | 04/15/17 | | | 8,640 |
| | 2,316,796 | | | Pool # 3319 | | 5.00 | | | 12/20/32 | | | 2,227,834 |
| | 1,375 | | | Pool # 334299 | | 8.00 | | | 05/15/23 | | | 1,460 |
| | 2,844,671 | | | Pool # 3442 | | 5.00 | | | 09/20/33 | | | 2,734,504 |
| | 271,263 | | | Pool # 367412 | | 6.00 | | | 11/15/23 | | | 274,408 |
| | 1,208,326 | | | Pool # 604726 | | 4.50 | | | 10/15/33 | | | 1,136,252 |
| | 2,078,210 | | | Pool # 608288 | | 4.50 | | | 09/15/33 | | | 1,954,251 |
| | | | | | | | | | | | |
| | | | | | | | | | | | 8,350,388 |
| | | | | | | | | | | | |
| | | | TOTAL U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH SECURITIES
(Cost $73,749,483) | | | 73,162,979 |
| | | | | | | | | | | | |
| | U.S. GOVERNMENT SECURITIES — 23.91% |
| | | | U.S. TREASURY NOTES — 23.91% |
| | 10,440,000 | | | | | 4.00 | | | 04/15/10 | | | 10,440,814 |
| | 92,540,000 | (e) | | | | 4.50 | | | 02/28/11 | | | 93,834,079 |
| | 2,465,000 | | | | | 4.25 | | | 11/15/14 | | | 2,441,314 |
| | | | | | | | | | | | |
| | | | TOTAL U.S. GOVERNMENT SECURITIES
(Cost $105,144,009) | | | 106,716,207 |
| | | | | | | | | | | | |
| | REPURCHASE AGREEMENT— 1.65% |
| | 7,369,000 | | | Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 05/15/17, market value $7,517,813 (repurchase proceeds $7,371,241) | | | 7,369,000 |
| | | | | | | | | | | | |
| | | | TOTAL REPURCHASE AGREEMENT
(Cost $7,369,000) | | | 7,369,000 |
| | | | | | | | | |
TOTAL INVESTMENTS
(Cost $448,189,122)(f) | | 100.16 | % | | $ | 447,012,904 | | | |
OTHER LIABILITIES IN EXCESS OF ASSETS | | (0.16 | ) | | | (705,656 | ) | | |
| | | | | | | | | |
NET ASSETS | | 100.00 | % | | $ | 446,307,248 | | | |
| | | | | | | | | |
| (a) | Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2007, these securities, which are not illiquid, amounted to $9,651,918, which represents 2.16% of net assets. |
| (b) | The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007. |
| (c) | Security purchased on a delayed delivery basis. |
| (d) | Perpetual Security. Maturity date presented represents the next call date. |
| (e) | The security or a portion of the security is pledged as collateral for open futures contracts. At September 30, 2007, the total market value of securities pledged amounted to $253,946. |
| (f) | Cost for federal income tax purposes is $448,189,122. |
ARM—Adjustable Rate Mortgage
LLC—Limited Liability Company
MTN—Medium Term Note
PLC—Public Limited Company
| | | | | | | | | | | |
| Contracts | | | | | Value | | | Unrealized
Appreciation
(Depreciation) | |
| FUTURES CONTRACTS | | | | | | | | |
| Long – | | | | | | | | |
| 80 | | | U.S. 2 Year Treasury Note, expiring 12/31/07 (notional amount $16,486,450) | | $ | 16,563,750 | | | $ | 77,300 | |
| Short – | | | | | | | | |
| (30 | ) | | U.S. Long-Term Treasury Bond expiring 12/19/07 (notional amount $(3,339,534)) | | | (3,340,312 | ) | | | (778 | ) |
| | | | | | | | | | | |
| TOTAL FUTURES CONTRACTS | | | | | | $ | 76,522 | |
| | | | | | | | | | | |
See Notes to Financial Statements.
27
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Intermediate-Term Bond Fund — (continued)
| | | | | | | | | | | | | |
INTEREST RATE SWAP AGREEMENT | | | | | | | | | | | | | |
Counterparty | | Notional
Amount | | Receiving
Leg | | | Paying Leg | | Expiration | | Unrealized
Appreciation |
Goldman Sachs | | $ | 5,000,000 | | 5.36 | % | | 3-month USD
LIBOR | | 07/24/09 | | $ | 4,451 |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | | | |
Portfolio Diversification | | % of
Net
Assets | | | Value | |
U.S. Government & Agency Securities | | 47.89 | | | $ | 213,710,659 | |
Corporate Bonds | | 20.16 | | | | 89,992,064 | |
Commercial Mortgage-Backed Securities | | 17.46 | | | | 77,910,450 | |
Collateralized Mortgage Obligations | | 10.89 | | | | 48,599,952 | |
Asset Backed Securities | | 2.11 | | | | 9,430,779 | |
Repurchase Agreement | | 1.65 | | | | 7,369,000 | |
| | | | | | | |
Total Investments | | 100.16 | | | $ | 447,012,904 | |
Other Liabilities in Excess of Assets | | (0.16 | ) | | | (705,656 | ) |
| | | | | | | |
Net Assets | | 100.00 | | | $ | 446,307,248 | |
| | | | | | | |
See Notes to Financial Statements.
28
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Intermediate-Term Tax-Exempt Fund
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | |
| | TAX-EXEMPT SECURITIES — 93.76% |
| $ | 1,000,000 | | Arkansas State Development Finance Authority, Tobacco Settlement Revenue Bonds, Arkansas Cancer Research Center Project, (AMBAC)(a) | | 0.00 | % | | 07/01/23 | | $ | 475,020 |
| | 10,000,000 | | California State Bay Area Infrastructure Financing Authority Revenue Bonds, State Payment Acceleration Notes, (FGIC) | | 5.00 | | | 08/01/17 | | | 10,743,900 |
| | 5,000,000 | | California State Department of Veteran Affairs, Home Purchase Revenue Bonds, Series A | | 4.50 | | | 12/01/23 | | | 4,960,000 |
| | 6,000,000 | | California State Department of Water, Residential Power Supply Revenue Bonds, Series A, (AMBAC) | | 5.50 | | | 05/01/14 | | | 6,529,260 |
| | 4,740,000 | | California State General Obligation Bonds | | 5.00 | | | 06/01/08 | | | 4,787,447 |
| | 5,000,000 | | California State General Obligation Bonds | | 5.00 | | | 08/01/21 | | | 5,220,450 |
| | 10,000,000 | | Chicago, Illinois, O’Hare International Airport Revenue Bonds, Series B, (MBIA) | | 5.25 | | | 01/01/17 | | | 10,942,400 |
| | 10,000,000 | | Colorado Springs, Colorado, Utilities Revenue Bonds, Series A | | 5.25 | | | 11/15/10 | | | 10,476,400 |
| | 10,000,000 | | Dallas, Texas, Waterworks & Sewer Systems Revenue Bonds, (FSA) | | 5.38 | | | 10/01/12 | | | 10,802,000 |
| | 2,820,000 | | Detroit, Michigan, Sewage Disposal Revenue Bonds, Senior Lien, Series A, (FSA) | | 5.00 | | | 07/01/14 | | | 3,006,487 |
| | 6,200,000 | | Fairfax County, Virginia, Refunding & Public Improvement General Obligation Bonds, Series A | | 5.25 | | | 04/01/08 | | | 6,256,358 |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | |
| | TAX-EXEMPT SECURITIES — (continued) |
| $ | 10,000,000 | | Florida State Division Board Finance Department, General Services Revenue Bonds, Department of Environmental Protection - Preservation 2000, Series A, (FSA) | | 6.00 | % | | 07/01/13 | | $ | 11,204,400 |
| | 2,000,000 | | Florida State Seminole Indian Tribe, Series A(b) | | 5.75 | | | 10/01/22 | | | 2,099,300 |
| | 5,000,000 | | Fresno, California, Sewer Revenue Bonds, Series A-1, (AMBAC) | | 5.25 | | | 09/01/19 | | | 5,481,750 |
| | 3,580,000 | | Golden State Tobacco Securitization Corp., California, Tobacco Settlement Revenue Bonds, Series A-1 | | 4.50 | | | 06/01/27 | | | 3,361,513 |
| | 5,535,000 | | Hamilton County, Ohio, Sewer System Revenue Bonds, Series A, (MBIA) | | 5.00 | | | 12/01/15 | | | 5,985,549 |
| | 10,000,000 | | Hawaii State General Obligation Bonds, Series CY, (FSA) | | 5.50 | | | 02/01/12 | | | 10,765,200 |
| | 5,000,000 | | Houston, Texas, Independent School District General Obligation Bonds, (PSF-GTD) | | 4.50 | | | 02/15/25 | | | 4,969,950 |
| | 2,000,000 | | Illinois State Toll Highway Authority Revenue Bonds, Senior Priority,
Series A-1, (FSA) | | 5.00 | | | 01/01/18 | | | 2,146,420 |
| | 5,000,000 | | Indiana Health & Educational Facilities Financing Authority Revenue Bonds, Clarian Health Obligation Group, Series B | | 5.00 | | | 02/15/22 | | | 5,078,400 |
| | 10,375,000 | | Jackson County, Missouri, Special Obligation Revenue Bonds, Harry S. Truman Sports Complex, (AMBAC) | | 5.00 | | | 12/01/09 | | | 10,706,481 |
| | 10,000,000 | | Jefferson County, Colorado, School District General Obligation Bonds, (MBIA) | | 6.50 | | | 12/15/11 | | | 11,127,900 |
See Notes to Financial Statements.
29
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Intermediate-Term Tax-Exempt Fund — (continued)
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | |
| | TAX-EXEMPT SECURITIES — (continued) |
| $ | 10,000,000 | | Los Angeles, California, Department of Water & Power Revenue Bonds, Series B, (MBIA) | | 5.00 | % | | 07/01/13 | | $ | 10,759,400 |
| | 1,000,000 | | Main Street Natural Gas, Inc., Georgia, Series A(c) | | 5.13 | | | 09/15/17 | | | 1,042,380 |
| | 1,000,000 | | Main Street Natural Gas, Inc., Georgia, Series A(c) | | 5.25 | | | 09/15/18 | | | 1,048,430 |
| | 10,000,000 | | Massachusetts State General Obligation Bonds(d) | | 4.14 | | | 11/01/25 | | | 9,751,800 |
| | 5,040,000 | | Miami-Dade County, Florida, Transit Sales Surtax Revenue Bonds, (XLCA) | | 5.00 | | | 07/01/19 | | | 5,326,927 |
| | 10,000,000 | | Michigan State Building Authority Revenue Bonds, Facilities Program, Series I, (FSA) | | 5.25 | | | 10/15/14 | | | 10,823,800 |
| | 5,720,000 | | Nassau County, New York, Interim Finance Authority Revenue Bonds, Sales Tax Revenue, Series B, (AMBAC) | | 5.00 | | | 11/15/14 | | | 6,134,013 |
| | 10,000,000 | | New Jersey State General Obligation Bonds, Series D | | 6.00 | | | 02/15/11 | | | 10,773,500 |
| | 3,000,000 | | New Jersey State Tobacco Settlement Financing Corporation Revenue Bonds, Series 1A | | 4.25 | | | 06/01/11 | | | 2,964,690 |
| | 9,300,000 | | New Jersey State Tobacco Settlement Financing Corporation Revenue Bonds, Series 1A | | 4.50 | | | 06/01/23 | | | 8,788,593 |
| | 4,000,000 | | New Jersey State Transportation Trust Fund Authority Revenue Bonds, (FSA-CR) | | 5.25 | | | 12/15/22 | | | 4,435,040 |
| | 9,530,000 | | New Jersey State Transportation Trust Fund Authority Revenue Bonds, Grant Anticipation Bonds, Series A, (FGIC) | | 5.00 | | | 06/15/10 | | | 9,891,568 |
| | 10,000,000 | | New York City, New York, Municipal Water Finance Authority, Water & Sewer System Revenue Bonds, Series A, (FSA) | | 5.38 | | | 06/15/16 | | | 10,735,800 |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | |
| | TAX-EXEMPT SECURITIES — (continued) |
| $ | 6,000,000 | | New York State Dormitory Authority Revenue Bonds, State Court Facilities, Series A, (AMBAC) | | 5.25 | % | | 05/15/18 | | $ | 6,638,520 |
| | 10,000,000 | | New York State Dormitory Authority Revenue Bonds, State University Educational Facilities, Series B, (FSA-CR) | | 5.25 | | | 05/15/11 | | | 10,570,400 |
| | 5,790,000 | | Palm Beach County, Florida, Public Improvement Revenue Bonds, Parking Facilities Expansion Project, (MBIA) | | 5.00 | | | 12/01/26 | | | 6,009,730 |
| | 5,070,000 | | Pennsylvania State, General Obligation Bonds, Series 4 | | 5.00 | | | 07/01/09 | | | 5,201,820 |
| | 5,000,000 | | Puerto Rico Commonwealth Public Improvement General Obligation Bonds, Series B | | 5.25 | | | 07/01/16 | | | 5,384,900 |
| | 5,190,000 | | San Antonio, Texas, Electric & Gas Revenue Bonds, Series A | | 5.25 | | | 02/01/16 | | | 5,344,870 |
| | 7,600,000 | | San Joaquin Hills, California, Transportation Corridor Agency Toll Road Revenue Bonds, Series A, (MBIA)(a) | | 0.00 | | | 01/15/12 | | | 6,489,488 |
| | 5,000,000 | | South Carolina State Highway General Obligation Bonds, Series B | | 5.00 | | | 04/01/16 | | | 5,259,350 |
| | 10,000,000 | | South Carolina State Public Service Authority Revenue Bonds, Series A, (FSA) | | 5.50 | | | 01/01/11 | | | 10,597,600 |
| | 12,150,000 | | St. Louis, Missouri, Airport Revenue Bonds, Lambert International Airport, Series A, (FSA) | | 5.00 | | | 07/01/21 | | | 12,861,018 |
| | 2,000,000 | | St. Louis, Missouri, Airport Revenue Bonds, Lambert International Airport, Series A, (FSA) | | 5.00 | | | 07/01/25 | | | 2,094,240 |
See Notes to Financial Statements.
30
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Intermediate-Term Tax-Exempt Fund — (continued)
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | |
| | TAX-EXEMPT SECURITIES — (continued) |
| $ | 2,000,000 | | Texas Municipal Gas Acquisition & Supply Corp., Gas Supply Revenue Bonds, Senior Lien, Series A | | 5.25 | % | | 12/15/23 | | $ | 2,059,440 |
| | 4,815,000 | | Texas State Public Finance Authority General Obligation Bonds, Series A | | 5.00 | | | 10/01/23 | | | 4,984,055 |
| | 3,500,000 | | Texas State Transportation Commission Revenue Bonds, First Tier | | 5.00 | | | 04/01/08 | | | 3,526,915 |
| | 10,000,000 | | Texas University Revenue Bonds, Series D | | 5.00 | | | 08/15/18 | | | 10,725,900 |
| | 6,000,000 | | Triborough Bridge & Tunnel Authority, New York, Highway Revenue Bonds, Series B | | 5.00 | | | 11/15/20 | | | 6,301,080 |
| | 6,285,000 | | Virginia State Public School Authority Revenue Bonds, 1997 Resolution, Series C | | 5.00 | | | 08/01/16 | | | 6,786,669 |
| | 3,760,000 | | Virginia State Residential Authority Clean Water Revenue Bonds, Clean Water State Revolving Fund | | 5.00 | | | 10/01/17 | | | 4,104,905 |
| | 10,000,000 | | Washington State Various Purposes General Obligation Bonds, Series R-03-A, (MBIA) | | 5.00 | | | 01/01/18 | | | 10,427,200 |
| | | | | | | | | | | |
| | | TOTAL TAX-EXEMPT SECURITIES
(Cost $361,940,305) | | | 364,970,626 |
| | | | | | | | | | | |
| TAX-EXEMPT SECURITIES – ESCROWED IN U.S.
GOVERNMENTS(e) — 5.73% |
| | 2,810,000 | | San Antonio, Texas, Electric & Gas Revenue Bonds, Series A, (Prerefunded 02/01/09 @ 101) | | 5.25 | | | 02/01/16 | | | 2,900,595 |
| | 5,000,000 | | New York State Tobacco Settlement Asset Securitization Corporation Revenue Bonds, Series 1, (Prerefunded 07/15/09 @ 101) | | 6.38 | | | 07/15/39 | | | 5,294,950 |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | |
| TAX-EXEMPT SECURITIES – ESCROWED IN U.S.
GOVERNMENTS(e) — (continued) |
| $ | 6,125,000 | | Contra Costa, California, Water District Revenue Bonds, Series J, (FGIC), (Prerefunded 10/01/09 @ 101) | | 5.38 | % | | 10/01/29 | | $ | 6,413,916 |
| | 7,180,000 | | Detroit, Michigan, Sewage Disposal Revenue Bonds, Senior Lien, Series A, (FSA), (Prerefunded 07/01/13 @ 100) | | 5.00 | | | 07/01/14 | | | 7,690,498 |
| | | | | | | | | | | |
| | | TOTAL TAX-EXEMPT SECURITIES – ESCROWED IN U.S. GOVERNMENTS
(Cost $22,249,040) | | | 22,299,959 |
| | | | | | | | | | | |
| Shares | | | | | | | | | |
| | REGISTERED INVESTMENT COMPANIES — 0.22% |
| | 608,887 | | BlackRock Muni Fund
(7 day yield of 3.61%) | | | | | | | | 608,887 |
| | 271,222 | | Dreyfus Tax-Exempt Cash Fund (7 day yield of 3.63%) | | | | | | | | 271,222 |
| | | | | | | | | | | |
| | | TOTAL REGISTERED INVESTMENT COMPANIES
(Cost $880,109) | | | 880,109 |
| | | | | | | | | | | |
| | | | | | | | | | |
TOTAL INVESTMENTS
(Cost $385,069,454)(f) | | 99.71 | % | | | | | | $ | 388,150,694 |
| | | | | | | | | | |
OTHER ASSETS IN EXCESS OF
LIABILITIES | | 0.29 | | | | | | | | 1,123,136 |
| | | | | | | | | | |
NET ASSETS | | 100.00 | % | | | | | | $ | 389,273,830 |
| | | | | | | | | | |
| (b) | Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. This security may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2007, the value of this security, which is not illiquid, represents 0.54% of net assets. |
| (c) | Security purchased on a delayed delivery basis. |
| (d) | The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007. |
| (e) | The Fund has been informed that each issuer has placed direct obligations of the U.S. Government in an irrevocable trust, solely for the payment of principal and interest. |
| (f) | Cost for federal income tax purposes is $385,069,454. |
AMBAC—American Municipal Bond Assurance Corp.
FGIC—Financial Guaranty Insurance Co.
FSA—Financial Security Assurance Corp.
FSA–CR—Financial Security Assurance Custodial Receipts
MBIA—Municipal Bond Insurance Association
PSF-GTD—Public School Funds—Guaranteed
XLCA—XL Capital Assurance
See Notes to Financial Statements.
31
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Intermediate-Term Tax-Exempt Fund — (continued)
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | |
State Diversification | | % of
Net
Assets | | Value |
California | | 16.63 | | $ | 64,747,123 |
New York | | 11.73 | | | 45,674,764 |
Texas | | 11.64 | | | 45,313,724 |
New Jersey | | 9.47 | | | 36,853,391 |
Missouri | | 6.59 | | | 25,661,739 |
Florida | | 6.33 | | | 24,640,358 |
Colorado | | 5.55 | | | 21,604,300 |
Michigan | | 5.53 | | | 21,520,785 |
Virginia | | 4.41 | | | 17,147,932 |
South Carolina | | 4.07 | | | 15,856,950 |
Illinois | | 3.36 | | | 13,088,820 |
Hawaii | | 2.77 | | | 10,765,200 |
Washington | | 2.68 | | | 10,427,200 |
Massachusetts | | 2.51 | | | 9,751,800 |
Ohio | | 1.54 | | | 5,985,549 |
Puerto Rico | | 1.38 | | | 5,384,900 |
Pennsylvania | | 1.34 | | | 5,201,820 |
Indiana | | 1.30 | | | 5,078,400 |
Georgia | | 0.54 | | | 2,090,810 |
Registered Investment Companies | | 0.22 | | | 880,109 |
Arkansas | | 0.12 | | | 475,020 |
| | | | | |
Total Investments | | 99.71 | | $ | 388,150,694 |
Other Assets in Excess of Liabilities | | 0.29 | | | 1,123,136 |
| | | | | |
Net Assets | | 100.00 | | $ | 389,273,830 |
| | | | | |
See Notes to Financial Statements.
32
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Long-Term Tax-Exempt Fund
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | |
| TAX-EXEMPT CASH EQUIVALENT SECURITIES — BACKED BY
LETTERS OF CREDIT — 1.57% |
| | | | | | | | | | | |
| $ | 1,000,000 | | Texas State, Southwest Higher Education Authority, (LANDESBANK HESSEN)(a) | | 4.05 | % | | 07/01/15 | | $ | 1,000,000 |
| | | | | | | | | | | |
| | | TOTAL TAX-EXEMPT CASH EQUIVALENT SECURITIES — BACKED BY LETTERS OF CREDIT (Cost $1,000,000) | | | 1,000,000 |
| | | | | | | | | | | |
| | TAX-EXEMPT SECURITIES — 77.59% |
| | 1,000,000 | | California State Department of Water Residential Power Supply Revenue Bonds, Series A, (AMBAC) | | 5.50 | | | 05/01/14 | | | 1,088,210 |
| | 2,500,000 | | California Statewide Communities Development Authority Revenue Bonds, Southern California Edison Co., Series A, (XLCA), (Mandatory Put 04/01/13 @ 100) | | 4.10 | | | 04/01/28 | | | 2,546,925 |
| | 1,000,000 | | Cincinnati, Ohio, City School District General Obligation Bonds, Classroom Construction & Improvements, (FGIC) | | 5.25 | | | 12/01/30 | | | 1,117,980 |
| | 3,000,000 | | Clark County, Nevada, School District General Obligation Bonds, Series A, (FSA) | | 5.00 | | | 06/15/15 | | | 3,217,110 |
| | 2,500,000 | | Detroit, Michigan, City School District General Obligation Bonds School Building & Improvement, Series A, (FSA) | | 5.00 | | | 05/01/17 | | | 2,669,450 |
| | 2,000,000 | | District Of Columbia, General Obligation Bonds, Series A, (MBIA) | | 5.25 | | | 06/01/27 | | | 2,036,760 |
| | 1,000,000 | | Florida State Hurricane Catastrophe Fund Finance Corporation Revenue Bonds, Series A | | 5.00 | | | 07/01/10 | | | 1,035,060 |
| | 1,800,000 | | Fort Bend, Texas, Independent School District General Obligation Bonds, (PSF-GTD) | | 5.38 | | | 02/15/24 | | | 1,835,262 |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | |
| | TAX-EXEMPT SECURITIES — (continued) |
| $ | 650,000 | | Indiana Health & Educational Facility Financing Authority Hospital Revenue Bonds, Clarian Health Obligation, Series A | | 5.00 | % | | 02/15/39 | | $ | 634,868 |
| | 3,000,000 | | Johnson City, Tennessee, Health & Educational Facilities Board Hospital Revenue Bonds, Mountain States Health Alliance, Series A | | 5.50 | | | 07/01/36 | | | 3,035,040 |
| | 1,000,000 | | Los Angeles, California, Unified School District General Obligation Bonds, (FSA) | | 5.00 | | | 07/01/19 | | | 1,079,660 |
| | 1,500,000 | | Mashantucket Western Pequot Tribe, Connecticut, Special Revenue Bonds | | 5.50 | | | 09/01/36 | | | 1,500,975 |
| | 2,000,000 | | Michigan State Hospital Finance Authority Revenue Bonds, Henry Ford Health Systems, Series A | | 5.25 | | | 11/15/32 | | | 2,052,400 |
| | 1,000,000 | | Montgomery, Alabama, Medical Clinic Board Health Care Facility Revenue Bonds, Jackson Hospital & Clinic | | 4.75 | | | 03/01/36 | | | 874,630 |
| | 500,000 | | New Hampshire Health & Education Facilities Authority Revenue Bonds, The Memorial Hospital | | 5.25 | | | 06/01/36 | | | 479,250 |
| | 980,000 | | New Jersey State Environmental Infrastructure Trust Revenue Bonds, Series C | | 5.00 | | | 09/01/18 | | | 1,065,113 |
| | 1,860,000 | | New Jersey State Tobacco Settlement Financing Corporation Revenue Bonds, Series 1A | | 4.50 | | | 06/01/23 | | | 1,757,719 |
| | 2,000,000 | | New York City, New York, General Obligation Bonds, Series M | | 5.00 | | | 04/01/22 | | | 2,077,320 |
| | 2,000,000 | | New York City, New York, Industrial Development Agency Revenue Bonds, Yankee Stadium, (FGIC) | | 5.00 | | | 03/01/46 | | | 2,046,180 |
| | 2,000,000 | | New York Metropolitan Transportation Authority Revenue Bonds, Series A, (AMBAC) | | 5.50 | | | 11/15/14 | | | 2,222,800 |
See Notes to Financial Statements.
33
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Long-Term Tax-Exempt Fund — (continued)
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | |
| | TAX-EXEMPT SECURITIES — (continued) |
| $ | 2,000,000 | | New York State Dormitory Authority Revenue Bonds, Non-State Supported Debt, New York University Hospital Center, Series A | | 5.00 | % | | 07/01/20 | | $ | 1,988,660 |
| | 2,000,000 | | New York State Environmental Facilities Revenue Bonds, Clean Water & Drinking Revolving Foods, 2nd Resolution | | 5.00 | | | 06/15/26 | | | 2,078,400 |
| | 2,000,000 | | Purdue University, Indiana, Certificates of Participation | | 5.25 | | | 07/01/22 | | | 2,198,980 |
| | 2,500,000 | | San Joaquin Hills, California, Transportation Corridor Agency Toll Road Revenue Bonds, Series A, (MBIA)(b) | | 0.00 | | | 01/15/12 | | | 2,134,700 |
| | 1,000,000 | | Seneca Nation Indians, New York, Capital Improvements Authority, Special Obligation Revenue Bonds, Series A(c) | | 5.00 | | | 12/01/23 | | | 954,130 |
| | 1,500,000 | | St. Louis, Missouri, Airport Revenue Bonds, Lambert International Airport, Series A, (FSA) | | 5.00 | | | 07/01/20 | | | 1,593,930 |
| | 1,250,000 | | Tennessee Energy Acquisition Corp. Gas Revenue Bonds, Series A | | 5.25 | | | 09/01/26 | | | 1,280,187 |
| | 1,500,000 | | University of California Revenue Bonds, Series J, (MBIA) | | 5.00 | | | 05/15/12 | | | 1,594,035 |
| | 1,000,000 | | University of Texas Revenue Bonds, Series D | | 5.00 | | | 08/15/18 | | | 1,072,590 |
| | | | | | | | | | | |
| | | TOTAL TAX-EXEMPT SECURITIES
(Cost $49,685,232) | | | 49,268,324 |
| | | | | | | | | | | |
| TAX-EXEMPT SECURITIES – ESCROWED IN U.S.
GOVERNMENTS(d) — 19.47% |
| | 2,000,000 | | Chicago, Illinois, General Obligation Bonds, (FGIC) (Partially Prerefunded) | | 5.25 | | | 01/01/28 | | | 2,057,720 |
| | 3,000,000 | | Houston, Texas, Water & Sewer System Revenue Bonds, Series A, (FSA) (Prerefunded 12/01/12 @ 100) | | 5.00 | | | 12/01/30 | | | 3,193,620 |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | |
| TAX-EXEMPT SECURITIES — ESCROWED IN U.S.
GOVERNMENTS(d)— (continued) |
| $ | 2,000,000 | | Long Island Power Authority, New York Electric System Revenue Bonds, Series A, (FSA) (Escrowed to Maturity) | | 5.25 | % | | 12/01/14 | | $ | 2,205,600 |
| | 3,000,000 | | New Jersey State Transportation Trust Fund Authority Revenue Bonds, Transportation Systems, Series C, (Prerefunded 06/15/13 @ 100) | | 5.50 | | | 06/15/23 | | | 3,285,360 |
| | 1,500,000 | | Pennsylvania State General Obligation Bonds, 2nd Series, (FSA) (Prerefunded 05/01/12 @ 100) | | 5.50 | | | 05/01/16 | | | 1,620,900 |
| | | | | | | | | | | |
| | | TOTAL TAX-EXEMPT SECURITIES – ESCROWED IN U.S. GOVERNMENTS (Cost $12,140,899) | | | 12,363,200 |
| | | | | | | | | | | |
| | | | |
| Shares | | | | | | | | | |
| | REGISTERED INVESTMENT COMPANIES — 0.40% |
| | 15,752 | | BlackRock Muni Fund (7 day yield of 3.61%) | | | | | | 15,752 |
| | 237,038 | | Dreyfus Tax Exempt Cash Fund (7 day yield of 3.63%) | | | | | | 237,038 |
| | | | | | | | | | | |
| | | TOTAL REGISTERED INVESTMENT COMPANIES
(Cost $252,790) | | | 252,790 |
| | | | | | | | | | | |
| | | | | | | | | | |
TOTAL INVESTMENTS
(Cost $63,078,921)(e) | | 99.03 | % | | | | | | $ | 62,884,314 |
OTHER ASSETS IN EXCESS OF LIABILITIES | | 0.97 | | | | | | | | 615,746 |
| | | | | | | | | | |
NET ASSETS | | 100.00 | % | | | | | | $ | 63,500,060 |
| | | | | | | | | | |
| (a) | The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007. |
| (c) | Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. This security may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2007, this security, which is not illiquid, amounted to $954,130, which represents 1.50% of net assets. |
| (d) | The Fund has been informed that each issuer has placed direct obligations of the U.S. Government in an irrevocable trust, solely for the payment of principal and interest. |
| (e) | Cost for federal income tax purposes is $63,078,921. |
See Notes to Financial Statements.
34
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Long-Term Tax-Exempt Fund — (continued)
AMBAC—American Municipal Bond Assurance Corp.
FGIC—Financial Guaranty Insurance Corp.
FSA—Financial Security Assurance
MBIA—Municipal Bond Insurance Association
PSF-GTD—Public School Fund — Guaranteed
XLCA—XL Capital Assurance
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | |
State Diversification | | % of
Net
Assets | | Value |
New York | | 21.37 | | $ | 13,573,090 |
California | | 13.30 | | | 8,443,530 |
Texas | | 11.18 | | | 7,101,472 |
New Jersey | | 9.62 | | | 6,108,192 |
Michigan | | 7.44 | | | 4,721,850 |
Tennessee | | 6.80 | | | 4,315,227 |
Nevada | | 5.07 | | | 3,217,110 |
Indiana | | 4.46 | | | 2,833,848 |
Illinois | | 3.24 | | | 2,057,720 |
District of Columbia | | 3.21 | | | 2,036,760 |
Pennsylvania | | 2.55 | | | 1,620,900 |
Missouri | | 2.51 | | | 1,593,930 |
Connecticut | | 2.36 | | | 1,500,975 |
Ohio | | 1.76 | | | 1,117,980 |
Florida | | 1.63 | | | 1,035,060 |
Alabama | | 1.38 | | | 874,630 |
New Hampshire | | 0.75 | | | 479,250 |
Registered Investment Companies | | 0.40 | | | 252,790 |
| | | | | |
Total Investments | | 99.03 | | $ | 62,884,314 |
Other Assets in Excess of Liabilities | | 0.97 | | | 615,746 |
| | | | | |
Net Assets | | 100.00 | | $ | 63,500,060 |
| | | | | |
See Notes to Financial Statements.
35
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
New York Intermediate-Term Tax-Exempt Fund
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | TAX-EXEMPT CASH EQUIVALENT SECURITIES — 3.86% |
| $ | 3,800,000 | | Port Authority of New York & New Jersey, Special Obligation Revenue Bonds, Versatile Structure Obligation, Series 2, (SPA: JPMorgan Chase & Co.)(a) | | 3.89 | % | | 05/01/19 | | $ | 3,800,000 |
| | 1,650,000 | | New York State Triborough Bridge & Tunnel Authority Revenue Bonds, Series A, (SPA: Dexia Credit Local)(a) | | 3.77 | | | 11/01/35 | | | 1,650,000 |
| | | | | | | | | | | |
| | | TOTAL TAX-EXEMPT CASH EQUIVALENT SECURITIES
(Cost $5,450,000) | | | 5,450,000 |
| | | | | | | | | | | |
| | TAX-EXEMPT SECURITIES — 77.00% |
| | 2,565,000 | | Babylon, New York, General Obligation Bonds, (AMBAC) | | 5.00 | | | 01/01/13 | | | 2,732,956 |
| | 5,000,000 | | Nassau County, New York, Interim Finance Authority, Sales Tax Revenue Bonds, Series H, (AMBAC) | | 5.25 | | | 11/15/15 | | | 5,459,650 |
| | 4,000,000 | | New York City, New York, General Obligation Bonds, Series C | | 5.00 | | | 01/01/15 | | | 4,293,880 |
| | 2,430,000 | | New York City, New York, General Obligation Bonds, Series G | | 5.00 | | | 12/01/19 | | | 2,563,067 |
| | 850,000 | | New York City, New York, Industrial Development Agency Revenue Bonds, Queens Baseball Stadium, (AMBAC) | | 5.00 | | | 01/01/19 | | | 911,098 |
| | 1,000,000 | | New York City, New York, Industrial Development Agency Revenue Bonds, Queens Baseball Stadium, (AMBAC) | | 5.00 | | | 01/01/20 | | | 1,066,310 |
| | 1,150,000 | | New York City, New York, Industrial Development Agency Revenue Bonds, Yankee Stadium Project, (MBIA) | | 5.00 | | | 03/01/15 | | | 1,241,839 |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | TAX-EXEMPT SECURITIES — (continued) |
| $ | 2,280,000 | | New York City, New York, Metropolitan Transportation Authority Revenue Bonds, (CIFG) | | 5.00 | % | | 11/15/22 | | $ | 2,413,494 |
| | 5,000,000 | | New York City, New York, Municipal Water Finance Authority, Water & Sewer System Revenue Bonds, Series A, (FSA) | | 5.38 | % | | 06/15/16 | | | 5,367,900 |
| | 4,000,000 | | New York City, New York, Municipal Water Finance Authority, Water & Sewer System Revenue Bonds, Series D | | 5.13 | | | 06/15/19 | | | 4,215,080 |
| | 2,150,000 | | New York City, New York, Transitional Finance Authority Revenue Bonds, Series A | | 5.25 | | | 11/01/10 | | | 2,257,995 |
| | 3,000,000 | | New York City, New York, Transitional Finance Authority Revenue Bonds, Series A-1 | | 5.00 | | | 11/01/19 | | | 3,187,560 |
| | 2,000,000 | | New York City, New York, Transitional Finance Authority Revenue Bonds, Series B | | 5.25 | | | 08/01/17 | | | 2,160,320 |
| | 3,000,000 | | New York City, New York, Transitional Finance Authority Revenue Bonds, Series S-1 | | 5.00 | | | 07/15/11 | | | 3,153,090 |
| | 4,300,000 | | New York City, New York, Transitional Finance Authority Revenue Bonds, Series S-2 | | 5.00 | | | 01/15/21 | | | 4,575,888 |
| | 1,000,000 | | New York State Dormitory Authority Revenue Bonds, New York University, Series A | | 5.00 | | | 07/01/10 | | | 1,015,100 |
| | 1,000,000 | | New York State Dormitory Authority Revenue Bonds, New York University, Series A | | 5.00 | | | 07/01/12 | | | 1,020,280 |
See Notes to Financial Statements.
36
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
New York Intermediate-Term Tax-Exempt Fund — (continued)
| | | | | | | | | | |
Principal
Amount | | | | Rate | | Maturity
Date | | Value |
| | | | | | | | | | |
| | TAX-EXEMPT SECURITIES — (continued) |
| $ | 5,000,000 | | New York State Dormitory Authority Revenue Bonds, New York University, Series A, (AMBAC) | | 5.75 | | 07/01/12 | | $ | 5,475,100 |
| | 4,720,000 | | New York State Dormitory Authority Revenue Bonds, State Personal Income Tax, Series D, (FGIC) | | 5.00 | | 03/15/09 | | | 4,824,170 |
| | 3,525,000 | | New York State Energy Research & Development Authority, Pollution Control Revenue Bonds, Niagara Mohawk Power Project, Series A, (AMBAC) | | 5.15 | | 11/01/25 | | | 3,640,373 |
| | 6,000,000 | | New York State Environmental Facilities Revenue Bonds, NYC Municipal Water Project, Series K | | 5.00 | | 06/15/12 | | | 6,371,880 |
| | 5,000,000 | | New York State Local Government Assistance Corporation Revenue Bonds, Series A-1, (FSA) | | 5.00 | | 04/01/12 | | | 5,294,250 |
| | 6,500,000 | | New York State Sales Tax Asset Receivable Corporation Revenue Bonds, Series A, (MBIA) | | 5.00 | | 10/15/22 | | | 6,837,805 |
| | 2,500,000 | | New York State Tollway Authority, Highway & Bridge Trust Fund Revenue Bonds, Series B, (AMBAC) | | 5.00 | | 04/01/19 | | | 2,654,025 |
| | 2,015,000 | | New York State Triborough Bridge & Tunnel Authority Revenue Bonds, Series B | | 5.25 | | 11/15/13 | | | 2,194,033 |
| | 500,000 | | Oneida County, New York Industrial Development Agency, Civic Facility Revenue Bonds, Hamilton College, PJ-Series A(b) | | 0.00 | | 07/01/18 | | | 316,500 |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | |
| | TAX-EXEMPT SECURITIES — (continued) |
| $ | 895,000 | | Onondaga County, New York, Water Authority Water Revenue Bonds, Series A, (AMBAC) | | 5.00 | % | | 09/15/22 | | $ | 941,334 |
| | 940,000 | | Onondaga County, New York, Water Authority Water Revenue Bonds, Series A, (AMBAC) | | 5.00 | | | 09/15/23 | | | 988,495 |
| | 5,000,000 | | Puerto Rico Electric Power Authority Revenue Bonds, Series BB, (MBIA) | | 6.00 | | | 07/01/11 | | | 5,430,800 |
| | 1,500,000 | | Puerto Rico Public Improvement General Obligation Bonds, Series A | | 5.25 | | | 07/01/22 | | | 1,568,430 |
| | 2,500,000 | | Seneca Nation Indians, New York, Capital Improvements Authority, Special Obligation Revenue Bonds, Series A(c) | | 5.00 | | | 12/01/23 | | | 2,385,325 |
| | 1,000,000 | | Seneca Nation Indians, New York, Capital Improvements Authority, Special Obligation Revenue Bonds, Series A(c) | | 5.25 | | | 12/01/16 | | | 1,015,200 |
| | 2,000,000 | | Suffolk County, New York, Public Improvement General Obligation Bonds, Series A, (CIFG) | | 5.00 | | | 05/01/08 | | | 2,018,760 |
| | 3,750,000 | | Troy, New York, Industrial Development Authority Civic Facility Revenue Bonds, Rensselaer Polytech, Series E, (XLCA) (Mandatory Put 09/01/11 @ 100) | | 4.05 | | | 04/01/37 | | | 3,800,175 |
| | 2,425,000 | | Yonkers, New York, General Obligation Bonds, Series B, (MBIA) | | 5.00 | | | 08/01/21 | | | 2,551,682 |
| | 2,545,000 | | Yonkers, New York, General Obligation Bonds, Series B, (MBIA) | | 5.00 | | | 08/01/22 | | | 2,669,298 |
| | | | | | | | | | | |
| | | TOTAL TAX-EXEMPT SECURITIES
(Cost $107,716,689) | | | 108,613,142 |
| | | | | | | | | | | |
See Notes to Financial Statements.
37
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
New York Intermediate-Term Tax-Exempt Fund — (continued)
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | |
| TAX-EXEMPT SECURITIES – ESCROWED IN U.S.
GOVERNMENTS(d) — 17.83% |
| $ | 5,000,000 | | Long Island Power Authority, New York Electric Systems Revenue Bonds, Series A, (FSA) (Escrowed to Maturity) | | 5.25 | % | | 12/01/14 | | $ | 5,514,000 |
| | 3,300,000 | | Metropolitan Transportation Authority New York Dedicated Tax Revenue Bonds, Series A, (FGIC) (Prerefunded 04/01/10 @ 100) | | 5.88 | | | 04/01/21 | | | 3,487,440 |
| | 6,000,000 | | New York State Metropolitan Transportation Authority Revenue Bonds, Service Contract, Series 8, (FSA) (Prerefunded 07/01/13 @ 100) | | 5.38 | | | 07/01/21 | | | 6,558,840 |
| | 4,210,000 | | New York State Tobacco Settlement Asset Securitization Corporation Revenue Bonds, Series 1, (Prerefunded 07/15/09 @ 101) | | 6.38 | | | 07/15/39 | | | 4,458,348 |
| | 5,000,000 | | New York State Tollway Authority, Highway & Bridge Trust Fund Revenue Bonds, Series B, (AMBAC) (Prerefunded 04/01/09 @ 100) | | 5.25 | | | 04/01/24 | | | 5,133,400 |
| | | | | | | | | | | |
| | | TOTAL TAX-EXEMPT SECURITIES – ESCROWED IN U.S. GOVERNMENTS
(Cost $25,119,218) | | | 25,152,028 |
| | | | | | | | | | | |
| | | | | | | | | | |
Shares | | | | | | | | | Value |
| | | | | | | | | | |
| REGISTERED INVESTMENT COMPANIES — 0.21% |
| 295,663 | | BlackRock Muni Fund (7 day yield of 3.61%) | | | | | | | $ | 295,663 |
| 1 | | Dreyfus New York Tax Exempt Cash Fund (7 day yield of 3.17%) | | | | | | | | 1 |
| | | | | | | | | | |
| | TOTAL REGISTERED INVESTMENT COMPANIES
(Cost $295,664) | | | | 295,664 |
| | | | | | | | | | |
TOTAL INVESTMENTS
(Cost $138,581,571)(e) | | 98.9 | % | | $ | 139,510,834 |
OTHER ASSETS IN EXCESS OF
LIABILITIES | | 1.1 | | | | 1,547,073 |
| | | | | | | | | | |
| NET ASSETS | | 100.0 | % | | $ | 141,057,907 |
| | | | | | | | | | |
| (a) | The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007. |
| (c) | Security exempt from registration pursuant to Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2007, these securities, which are not illiquid, amounted to $3,400,525 or 2.41% of net assets. |
| (d) | The Fund has been informed that each issuer has placed direct obligations of the U.S. Government in an irrevocable trust, solely for the payment of principal and interest. |
| (e) | Cost for federal income tax purposes is $138,581,571. |
AMBAC—American Municipal Bond Assurance Corp.
CIFG—CDC Ixis Financial Guaranty
FGIC—Financial Guaranty Insurance Co.
FSA—Financial Security Assurance Corp.
MBIA—Municipal Bond Insurance Association
SPA—Standby Purchase Agreement
XLCA—XL Capital Assurance
See Notes to Financial Statements.
38
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
New York Intermediate-Term Tax-Exempt Fund — (continued)
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | |
Portfolio Diversification | | % of
Net
Assets | | Value |
Revenue Bonds | | 67.82 | | $ | 95,665,069 |
Prerefunded | | 13.92 | | | 19,638,028 |
General Obligation Bonds | | 13.04 | | | 18,398,073 |
Escrowed to Maturity | | 3.91 | | | 5,514,000 |
Registered Investment Companies | | 0.21 | | | 295,664 |
| | | | | |
Total Investments | | 98.90 | | $ | 139,510,834 |
Other Assets in Excess of Liabilities | | 1.10 | | | 1,547,073 |
| | | | | |
Net Assets | | 100.00 | | $ | 141,057,907 |
| | | | | |
See Notes to Financial Statements.
39
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Short-Term Government Securities Fund
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | ASSET-BACKED SECURITIES — 2.77% |
| $ | 800,000 | | Capital Auto Receivables Asset Trust, 2007-# A3A | | 5.00 | % | | 09/15/11 | | $ | 800,771 |
| | 2,500,000 | | Capital One Multi-Asset Execution Trust, 2005-A2 A2 | | 4.05 | | | 02/15/11 | | | 2,486,341 |
| | 1,310,195 | | Countrywide Home Equity Loan Trust, 2005-G 2A(a) | | 5.98 | | | 12/15/35 | | | 1,296,729 |
| | 2,500,000 | | USAA Auto Owner Trust, 2007-2 A3(b) | | 4.90 | | | 02/15/12 | | | 2,499,664 |
| | | | | | | | | | | |
| | | TOTAL ASSET-BACKED SECURITIES
(Cost $7,093,871) | | | 7,083,505 |
| | | | | | | | | | | |
| | COLLATERALIZED MORTGAGE OBLIGATIONS — 15.11% |
| | | NON-GOVERNMENTAL AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS — 8.83% |
| | 4,696,270 | | Bank of America Mortgage Securities, 2004-B 2A2 | | 4.09 | | | 03/25/34 | | | 4,698,590 |
| | 2,369,508 | | Bank of America Mortgage Securities, 2005-J 2A3(a) | | 5.09 | | | 11/25/35 | | | 2,355,187 |
| | 1,160,252 | | Bear Stearns, ARM, 2004-1 11A3(a) | | 6.11 | | | 04/25/34 | | | 1,181,557 |
| | 2,036,347 | | Bear Stearns, ARM, 2004-9 3A1(a) | | 5.22 | | | 09/25/34 | | | 2,032,835 |
| | 2,421,547 | | Countrywide Alternative Loan Trust, 2004-16CB 1A2(a) | | 5.50 | | | 07/25/34 | | | 2,401,155 |
| | 1,512,454 | | IMPAC CMB Trust, 2005-5 A4(a) | | 5.51 | | | 08/25/35 | | | 1,511,342 |
| | 1,721,776 | | Indymac Index Mortgage Loan Trust, 2004-AR4 3A(a) | | 4.67 | | | 08/25/34 | | | 1,724,628 |
| | 1,626,297 | | Washington Mutual Mortgage Securities Corp., 2005-AR5 A2(a) | | 4.68 | | | 05/25/35 | | | 1,619,848 |
| | 2,694,889 | | Wells Fargo Mortgage Backed Securities Trust, 2004-AA A2(a) | | 4.99 | | | 12/25/34 | | | 2,673,607 |
| | 2,435,000 | | Wells Fargo Mortgage Backed Securities Trust, 2004-N A6 | | 4.00 | | | 08/25/34 | | | 2,394,967 |
| | | | | | | | | | | |
| | | | | | | | | | | 22,593,716 |
| | | | | | | | | | | |
| | | FEDERAL HOME LOAN MORTGAGE
CORPORATION — 3.52% |
| | 2,735,000 | | 2534 VH | | 6.00 | | | 03/15/19 | | | 2,773,306 |
| | 1,974,399 | | 2608 GK | | 4.50 | | | 03/15/17 | | | 1,948,743 |
| | 3,305,734 | | 2836 TA | | 5.00 | | | 10/15/27 | | | 3,315,883 |
| | 975,802 | | 3197 AB | | 5.50 | | | 08/15/13 | | | 978,289 |
| | | | | | | | | | | |
| | | | | | | | | | | 9,016,221 |
| | | | | | | | | | | |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | COLLATERALIZED MORTGAGE OBLIGATIONS — (continued) |
| | | FEDERAL NATIONAL MORTGAGE
ASSOCIATION — 2.76% |
| $ | 2,323,687 | | 2002-89 CA | | 5.00 | % | | 04/25/16 | | $ | 2,319,234 |
| | 4,749,423 | | 2007-35 DH | | 5.00 | | | 09/25/33 | | | 4,727,446 |
| | | | | | | | | | | |
| | | | | | | | | | | 7,046,680 |
| | | | | | | | | | | |
| | | TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $38,687,764) | | | 38,656,617 |
| | | | | | | | | | | |
| | COMMERCIAL MORTGAGE-BACKED SECURITIES — 4.03% |
| | 3,175,000 | | First Union National Bank Commercial Mortgage, Inc., 2002-C1 A2 | | 6.14 | | | 02/12/34 | | | 3,296,075 |
| | 3,152,281 | | GE Capital Commercial Mortgage Corp., Series 2002-2A, Class A2 | | 4.97 | | | 08/11/36 | | | 3,154,883 |
| | 132,025 | | Greenwich Capital Commercial Funding Corp., 2004-GG1 A2 | | 3.84 | | | 06/10/36 | | | 131,831 |
| | 947,746 | | JP Morgan Chase Commercial Mortgage Securities Corp., 2005-LDP2 A1 | | 4.33 | | | 07/15/42 | | | 938,891 |
| | 1,567,349 | | Morgan Stanley Cap I, 2005-HQ5 A1 | | 4.52 | | | 01/14/42 | | | 1,555,828 |
| | 1,200,000 | | Salomon Brothers Mortgage Securities VII, 2001-C1 A3 | | 6.43 | | | 12/18/35 | | | 1,245,408 |
| | | | | | | | | | | |
| | | TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES
(Cost $10,267,778) | | | 10,322,916 |
| | | | | | | | | | | |
| | U.S. GOVERNMENT AGENCY BONDS & NOTES — 22.39% |
| | | FEDERAL FARM CREDIT BANK — 2.49% |
| | 6,230,000 | | | | 5.25 | | | 09/13/10 | | | 6,368,219 |
| | | FEDERAL HOME LOAN BANK — 16.05% |
| | 2,500,000 | | | | 3.88 | | | 02/15/08 | | | 2,490,228 |
| | 15,500,000 | | | | 4.75 | | | 06/11/08 | | | 15,497,101 |
| | 4,500,000 | | | | 5.13 | | | 07/30/08 | | | 4,515,561 |
| | 3,570,000 | | | | 5.25 | | | 06/10/11 | | | 3,658,218 |
| | 5,200,000 | | | | 5.33 | | | 03/06/12 | | | 5,253,144 |
| | 9,500,000 | | | | 5.38 | | | 07/17/09 | | | 9,655,211 |
| | | | | | | | | | | |
| | | | | | | | | | | 41,069,463 |
| | | FREDDIE MAC — 3.03% |
| | 6,000,000 | | | | 4.88 | | | 02/09/10 | | | 6,061,170 |
| | 1,600,000 | | | | 7.00 | | | 03/15/10 | | | 1,695,107 |
| | | | | | | | | | | |
| | | | | | | | | | | 7,756,277 |
| | | FANNIE MAE— 0.82% |
| | 2,100,000 | | | | 3.55 | | | 01/17/08 | | | 2,091,430 |
| | | | | | | | | | | |
| | | TOTAL U.S. GOVERNMENT AGENCY BONDS & NOTES
(Cost $56,710,001) | | | 57,285,389 |
| | | | | | | | | | | |
See Notes to Financial Statements.
40
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Short-Term Government Securities Fund — (continued)
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH
SECURITIES — 36.44% |
| | | FEDERAL HOME LOAN MORTGAGE
CORPORATION — 16.14% |
| $ | 962,429 | | Pool # 1B2846, ARM(a) | | 4.90 | % | | 04/01/35 | | $ | 989,755 |
| | 3,111,691 | | Pool # 1G0688, ARM(a) | | 5.63 | | | 01/01/36 | | | 3,132,089 |
| | 142,334 | | Pool # 1G1026, ARM(a) | | 5.92 | | | 07/01/36 | | | 142,691 |
| | 7,192,635 | | Pool # 1G1471, ARM(a) | | 5.49 | | | 01/01/37 | | | 7,219,680 |
| | 6,731,120 | | Pool # 782645, ARM(a) | | 5.42 | | | 02/01/36 | | | 6,805,435 |
| | 2,774,380 | | Pool # 847248, ARM(a) | | 5.46 | | | 03/01/34 | | | 2,812,430 |
| | 412,845 | | Pool # C68593 | | 7.00 | | | 11/01/28 | | | 429,294 |
| | 2,691,596 | | Pool # G18136 | | 6.00 | | | 08/01/21 | | | 2,725,610 |
| | 8,457,158 | | Pool # J00617 | | 5.50 | | | 12/01/20 | | | 8,435,452 |
| | 8,499,124 | | Pool # J03619 | | 6.00 | | | 10/01/21 | | | 8,606,529 |
| | | | | | | | | | | |
| | | | | | | | | | | 41,298,965 |
| | | | | | | | | | | |
| | | FEDERAL NATIONAL MORTGAGE
ASSOCIATION — 19.85% |
| | 3,793,929 | | Pool # 256651 | | 6.00 | | | 03/01/37 | | | 3,768,872 |
| | 656,888 | | Pool # 323572 | | 7.50 | | | 01/01/29 | | | 689,576 |
| | 2,655,674 | | Pool # 375575 | | 6.60 | | | 12/01/07 | | | 2,646,164 |
| | 13,101 | | Pool # 517390 | | 8.00 | | | 11/01/11 | | | 13,499 |
| | 233,920 | | Pool # 535981 | | 8.00 | | | 01/01/16 | | | 245,323 |
| | 108,689 | | Pool # 545362, ARM(a) | | 5.96 | | | 12/01/31 | | | 108,123 |
| | 1,648,434 | | Pool # 634195 | | 7.50 | | | 10/01/28 | | | 1,730,463 |
| | 2,904,217 | | Pool # 693018, ARM(a) | | 4.33 | | | 06/01/33 | | | 2,957,251 |
| | 3,581,746 | | Pool # 735709, ARM(a) | | 4.80 | | | 06/01/35 | | | 3,517,802 |
| | 1,692,573 | | Pool # 745525 | | 5.50 | | | 05/01/21 | | | 1,688,902 |
| | 2,586,173 | | Pool # 766684, ARM(a) | | 4.41 | | | 03/01/34 | | | 2,569,693 |
| | 2,937,779 | | Pool # 770870, ARM(a) | | 4.26 | | | 04/01/34 | | | 2,911,469 |
| | 1,775,222 | | Pool # 780840, ARM(a) | | 4.50 | | | 06/01/34 | | | 1,770,274 |
| | 2,964,747 | | Pool # 784134, ARM(a) | | 5.46 | | | 10/01/35 | | | 2,955,602 |
| | 3,228,150 | | Pool # 786076, ARM(a) | | 4.73 | | | 07/01/34 | | | 3,202,779 |
| | 5,824,413 | | Pool # 786423, ARM(a) | | 4.59 | | | 07/01/34 | | | 5,781,392 |
| | 2,794,900 | | Pool # 805386, ARM(a) | | 4.85 | | | 01/01/35 | | | 2,765,938 |
| | 3,483,923 | | Pool # 828704, ARM(a) | | 4.99 | | | 07/01/35 | | | 3,460,618 |
| | 5,777,556 | | Pool # 871499, ARM(a) | | 5.59 | | | 04/01/36 | | | 5,882,199 |
| | 160,948 | | Pool # 892882, ARM(a) | | 5.82 | | | 07/01/36 | | | 162,007 |
| | 1,943,044 | | Pool # 946450, ARM(a) | | 6.14 | | | 09/01/37 | | | 1,973,914 |
| | | | | | | | | | | |
| | | | | | | | | | | 50,801,860 |
| | | | | | | | | | | |
| | | | | | | | | | | | |
Principal
Amount | | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | | |
| U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH
SECURITIES — (continued) |
| | | | GOVERNMENT NATIONAL MORTGAGE ASSOCIATION — 0.45% |
| $ | 347,843 | | | Pool # 008378, ARM(a) | | 5.75 | % | | 07/20/18 | | $ | 351,015 |
| | 84,404 | | | Pool # 780240, | | 8.50 | | | 09/15/09 | | | 84,532 |
| | 17,927 | | | Pool # 780752 | | 8.50 | | | 04/15/10 | | | 17,965 |
| | 405,181 | | | Pool # 781036 | | 8.00 | | | 10/15/17 | | | 427,136 |
| | 183,988 | | | Pool # 781181 | | 9.00 | | | 12/15/09 | | | 186,960 |
| | 97,780 | | | Pool # 80385, ARM(a) | | 6.25 | | | 03/20/30 | | | 98,729 |
| | | | | | | | | | | | |
| | | | | | | | | | | | 1,166,337 |
| | | | | | | | | | | | |
| | | | TOTAL U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH SECURITIES
(Cost $93,528,959) | | | 93,267,162 |
| | | | | | | | | | | | |
| | U.S. GOVERNMENT SECURITIES— 16.42% |
| | | | U.S. TREASURY NOTES — 16.42% |
| | 10,000,000 | | | | | 4.63 | | | 07/31/09 | | | 10,114,840 |
| | 3,000,000 | | | | | 4.63 | | | 11/15/09 | | | 3,038,907 |
| | 250,000 | (c) | | | | 4.88 | | | 04/30/08 | | | 251,015 |
| | 1,250,000 | | | | | 4.88 | | | 05/31/08 | | | 1,255,664 |
| | 22,000,000 | | | | | 4.88 | | | 06/30/09 | | | 22,330,000 |
| | 5,000,000 | | | | | 5.00 | | | 07/31/08 | | | 5,034,765 |
| | | | | | | | | | | | |
| | | | TOTAL U.S. GOVERNMENT SECURITIES
(Cost $41,499,066) | | | 42,025,191 |
| | | | | | | | | | | | |
| | REPURCHASE AGREEMENT — 3.53% |
| | 9,026,000 | | | Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 08/15/22, market value $9,207,125 (repurchase proceeds $9,028,745) | | | 9,026,000 |
| | | | | | | | | | | | |
| | | | TOTAL REPURCHASE AGREEMENT
(Cost $9,026,000) | | | 9,026,000 |
| | | | | | | | | | | | |
| | | | | | | | | |
TOTAL INVESTMENTS
(Cost $256,813,439)(d) | | 100.69 | % | | | | $ | 257,666,780 | |
OTHER LIABILITIES IN EXCESS OF ASSETS | | (0.69 | ) | | | | | (1,772,967 | ) |
| | | | | | | | | |
NET ASSETS | | 100.00 | % | | | | $ | 255,893,813 | |
| | | | | | | | | |
| (a) | The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007. |
| (b) | Security purchased on a delayed delivery basis. |
| (c) | Security pledged as collateral for open futures contracts. |
| (d) | Cost for federal income tax purposes is $256,813,439. |
ARM—Adjustable Rate Mortgage
See Notes to Financial Statements.
41
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Short-Term Government Securities Fund — (continued)
| | | | | | | | | | |
| Contracts | | | | Value | | | Unrealized
Appreciation
(Depreciation) | |
| FUTURES CONTRACTS | |
| Long — | | | | | | | | | | |
| 420 | | U.S. 2 Year Treasury Note, expiring 12/31/07 (notional amount $86,562,300) | | $ | 86,958,906 | | | $ | 396,606 | |
| Short — | | | | | | | | | | |
| (230) | | U.S. 10 Year Treasury Note expiring 12/19/07 (notional amount $(24,913,098)) | | | (25,134,688 | ) | | | (221,590 | ) |
| (25) | | U.S. Long-Term Treasury Bond expiring 12/19/07 (notional amount $(2,782,946)) | | | (2,783,594 | ) | | | (648 | ) |
| | | | | | | | | | |
TOTAL FUTURES CONTRACTS | | | | $174,368 | |
| | | | | | | | | | |
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | | | |
Portfolio Diversification | | % of
Net
Assets | | | Value | |
U.S. Government & Agency Securities | | 75.25 | | | $ | 192,577,742 | |
Collateralized Mortgage Obligations | | 15.11 | | | | 38,656,617 | |
Commercial Mortgage-Backed Securities | | 4.03 | | | | 10,322,916 | |
Repurchase Agreement | | 3.53 | | | | 9,026,000 | |
Asset-Backed Securities | | 2.77 | | | | 7,083,505 | |
| | | | | | | |
Total Investments | | 100.69 | | | $ | 257,666,780 | |
Other Liabilities in Excess of Assets | | (0.69 | ) | | | (1,772,967 | ) |
| | | | | | | |
Net Assets | | 100.00 | | | $ | 255,893,813 | |
| | | | | | | |
See Notes to Financial Statements
42
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Short-Term Tax-Exempt Securities Fund
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | TAX-EXEMPT CASH EQUIVALENT SECURITIES — 13.41% |
| $ | 2,700,000 | | Columbia, Alabama, Industrial Development Board Pollution Control Revenue Bonds, Alabama Power Co. Project, Series A(a) | | 4.04 | % | | 05/01/22 | | $ | 2,700,000 |
| | 2,000,000 | | Missouri Development Finance Board Revenue Bonds, The Nelson Gallery Foundation, Series B, (MBIA) (SPA: JPMorgan Chase Bank)(a) | | 4.04 | | | 12/01/31 | | | 2,000,000 |
| | 4,500,000 | | University of Missouri, Systems Facilities Revenue Bonds, Series B(a) | | 4.00 | | | 11/01/35 | | | 4,500,000 |
| | 4,300,000 | | Valdez, Alaska, Marine Terminal Revenue Bonds, Exxon Pipeline Co., Series B(a) | | 3.93 | | | 12/01/33 | | | 4,300,000 |
| | | | | | | | | | | |
| | | TOTAL TAX-EXEMPT CASH EQUIVALENT SECURITIES
(Cost $13,500,000) | | | 13,500,000 |
| | | | | | | | | | | |
| TAX-EXEMPT CASH EQUIVALENT SECURITIES – BACKED BY
LETTERS OF CREDIT — 1.59% |
| | 1,600,000 | | Ohio State Air Quality Development Authority Revenue Bonds, Ohio Edison Co., Series C, (WACHOVIA BANK N.A.)(a) | | 4.00 | | | 06/01/23 | | | 1,600,000 |
| | | | | | | | | | | |
| | | TOTAL TAX-EXEMPT CASH EQUIVALENT SECURITIES – BACKED BY LETTERS OF CREDIT
(Cost $1,600,000) | | | 1,600,000 |
| | | | | | | | | | | |
| | TAX-EXEMPT SECURITIES — 74.95% |
| | 6,000,000 | | California State General Obligation Bonds | | 5.00 | | | 06/01/08 | | | 6,060,060 |
| | 5,000,000 | | Fairfax County, Virginia, Refunding & Public Improvement General Obligation Bonds, Series A | | 5.25 | | | 04/01/08 | | | 5,045,450 |
| | 700,000 | | Gulf Coast, Texas, Waste Disposal Authority Pollution Control Revenue Bonds | | 4.00 | | | 10/01/17 | | | 700,000 |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | TAX-EXEMPT SECURITIES — (continued) |
| $ | 890,000 | | Illinois State Housing Development Authority Multi-Family Revenue Bonds, Series G | | 3.70 | % | | 07/01/08 | | $ | 890,160 |
| | 800,000 | | Illinois State Housing Development Authority Multi-Family Revenue Bonds, Series G | | 3.85 | | | 01/01/09 | | | 801,232 |
| | 1,810,000 | | Illinois State Housing Development Authority Multi-Family Revenue Bonds, Series G | | 3.90 | | | 01/01/10 | | | 1,813,801 |
| | 3,850,000 | | Jacksonville, Florida, Electric Authority Revenue Bonds, Series 18 | | 5.00 | | | 10/01/08 | | | 3,906,710 |
| | 5,035,000 | | Memphis, Tennessee, General Obligation Bonds, Series B, (MBIA) | | 5.00 | | | 11/01/08 | | | 5,118,833 |
| | 2,000,000 | | Montgomery County, Texas, General Obligation Bonds, Series B, (FSA) (Mandatory Put 09/01/08 @ 100) | | 5.00 | | | 03/01/28 | | | 2,027,120 |
| | 2,500,000 | | Montgomery County, Texas, General Obligation Bonds, Series B, (FSA) (Mandatory Put 09/01/10 @ 100) | | 5.00 | | | 03/01/29 | | | 2,585,650 |
| | 2,000,000 | | New Jersey State Tobacco Settlement Financing Corporation Revenue Bonds, Series 1A | | 4.13 | | | 06/01/10 | | | 1,983,180 |
| | 6,000,000 | | New York State Metropolitan Transportation Authority Revenue Bonds, Series H | | 5.25 | | | 11/15/10 | | | 6,299,460 |
| | 5,000,000 | | New York State Triborough Bridge & Tunnel Authority Revenue Bonds, (MBIA-IBC-BNY) | | 6.00 | | | 01/01/11 | | | 5,371,900 |
| | 1,250,000 | | Puerto Rico Convention Center District Authority, Hotel Occupancy Tax Revenue Bonds, Series A | | 5.00 | | | 07/01/11 | | | 1,304,225 |
| | 3,000,000 | | Reedy Creek, Florida, Improvement District Utilities Revenue Bonds, Series 2, (MBIA) | | 5.25 | | | 10/01/10 | | | 3,145,170 |
See Notes to Financial Statements.
43
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Short-Term Tax-Exempt Securities Fund — (continued)
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | TAX-EXEMPT SECURITIES — (continued) |
| $ | 650,000 | | Reno, Nevada, Hospital Revenue Bonds, Renown Regional Medical Center Project, Series A | | 5.00 | % | | 06/01/11 | | $ | 671,145 |
| | 815,000 | | Reno, Nevada, Hospital Revenue Bonds, Renown Regional Medical Center Project, Series A | | 5.00 | | | 06/01/12 | | | 845,872 |
| | 500,000 | | Reno, Nevada, Hospital Revenue Bonds, Renown Regional Medical Center Project, Series A | | 5.00 | | | 06/01/13 | | | 521,265 |
| | 5,000,000 | | San Antonio, Texas, Electric & Gas Systems Revenue Bonds, Series A | | 5.00 | | | 02/01/10 | | | 5,160,150 |
| | 3,995,000 | | South Carolina State Transportation Infrastructure, Bank Revenue Bonds, Series A, (AMBAC) | | 5.00 | | | 10/01/09 | | | 4,114,131 |
| | 3,000,000 | | Southeastern Virginia Public Services Authority Revenue Bonds, Series A, (MBIA) | | 5.25 | | | 07/01/10 | | | 3,135,120 |
| | 3,750,000 | | Tennessee State Energy Acquisition Corporation Gas Revenue Bonds, Series A | | 5.00 | | | 09/01/09 | | | 3,824,288 |
| | 1,500,000 | | Texas State Municipal Gas Acquisition & Supply Corp., Gas Supply Revenue Bonds, Senior Lien, Series A | | 5.00 | | | 12/15/10 | | | 1,542,900 |
| | 3,000,000 | | Texas State Transportation Commission Revenue Bonds, First Tier, Series A | | 5.00 | | | 04/01/12 | | | 3,173,340 |
| | 2,500,000 | | Troy, New York, Industrial Development Authority Civic Facility Revenue Bonds, Rensselaer Polytech, Series E, (XLCA) (Mandatory Put 09/01/11 @ 100) | | 4.05 | | | 04/01/37 | | | 2,533,450 |
| | 2,890,000 | | University of Delaware Revenue Bonds, Series B | | 4.12 | | | 11/01/26 | | | 2,890,000 |
| | | | | | | | | | | |
| | | TOTAL TAX-EXEMPT SECURITIES
(Cost $75,367,042) | | | 75,464,612 |
| | | | | | | | | | | |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| TAX-EXEMPT SECURITIES – ESCROWED IN U.S.
GOVERNMENTS(b) — 8.69% |
| $ | 4,565,000 | | Chicago, Illinois, Sales Tax Revenue Bonds, (FGIC) (Prerefunded 01/01/09 @ 101) | | 5.38 | % | | 01/01/30 | | $ | 4,714,640 |
| | 4,030,000 | | New York City, New York, Transitional Finance Authority Revenue Bonds, Series A, (Escrowed to Maturity) | | 5.00 | | | 11/01/07 | | | 4,034,796 |
| | | | | | | | | | | |
| | | TOTAL TAX-EXEMPT SECURITIES – ESCROWED IN U.S. GOVERNMENTS
(Cost $8,752,992) | | | 8,749,436 |
| | | | | | | | | | | |
| Shares | | | | | | | | | |
| | REGISTERED INVESTMENT COMPANIES — 0.10% |
| | 97,163 | | BlackRock Muni Fund (7 day yield of 3.61%) | | | | | | 97,163 |
| | 1 | | Dreyfus Tax Exempt Cash Fund (7 day yield of 3.63%) | | | | | | 1 |
| | | | | | | | | | | |
| | | TOTAL REGISTERED INVESTMENT COMPANIES
(Cost $97,164) | | | | | | | | 97,164 |
| | | | | | | | | | |
TOTAL INVESTMENTS
(Cost $99,317,198)(c) | | 98.74 | % | | | | | | $ | 99,411,212 |
OTHER ASSETS IN EXCESS OF LIABILITIES | | 1.26 | | | | | | | | 1,270,316 |
| | | | | | | | | | |
NET ASSETS | | 100.00 | % | | | | | | $ | 100,681,528 |
| | | | | | | | | | |
| (a) | The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007. |
| (b) | The Fund has been informed that each issuer has placed direct obligations of the U.S. Government in an irrevocable trust, solely for the payment of principal and interest. |
| (c) | Cost for federal income tax purposes is $99,317,198. |
AMBAC—American Municipal Bond Assurance Corp.
BNY—Bank of New York
FGIC—Financial Guaranty Insurance Corp.
FSA—Financial Security Assurance
IBC—Insured Bond Certificates
MBIA—Municipal Bond Insurance Association
SPA—Standby Purchase Agreement
XLCA—XL Capital Assurance
See Notes to Financial Statements.
44
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Short-Term Tax-Exempt Securities Fund — (continued)
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | |
State Diversification | | % of
Net
Assets | | Value |
New York | | 18.12 | | $ | 18,239,606 |
Texas | | 15.09 | | | 15,189,160 |
Tennessee | | 8.88 | | | 8,943,121 |
Illinois | | 8.16 | | | 8,219,833 |
Virginia | | 8.12 | | | 8,180,570 |
Florida | | 7.00 | | | 7,051,880 |
Missouri | | 6.46 | | | 6,500,000 |
California | | 6.02 | | | 6,060,060 |
Alaska | | 4.27 | | | 4,300,000 |
South Carolina | | 4.09 | | | 4,114,131 |
Delaware | | 2.87 | | | 2,890,000 |
Alabama | | 2.68 | | | 2,700,000 |
Nevada | | 2.02 | | | 2,038,282 |
New Jersey | | 1.97 | | | 1,983,180 |
Ohio | | 1.59 | | | 1,600,000 |
Puerto Rico | | 1.30 | | | 1,304,225 |
Registered Investment Companies | | 0.10 | | | 97,164 |
| | | | | |
Total Investments | | 98.74 | | $ | 99,411,212 |
Other Assets in Excess of Liabilities | | 1.26 | | | 1,270,316 |
| | | | | |
Net Assets | | 100.00 | | $ | 100,681,528 |
| | | | | |
See Notes to Financial Statements.
45
Excelsior Funds
Statements of Assets and Liabilities
September 30, 2007 (Unaudited)
| | | | | | | | | |
| | | |
| | | California
Short-Intermediate Term Tax-Exempt Income Fund | | | Core Bond
Fund | | | High Yield
Fund | |
ASSETS | | | | | | | | | |
Investments, at identified cost | | $49,701,383 | | | $546,295,502 | | | $89,773,985 | |
| | | | | | | | | |
Investments, at value | | $49,768,699 | | | $545,461,548 | | | $90,284,062 | |
Cash | | — | | | — | | | 841 | |
Unrealized appreciation on swap contracts | | — | | | 4,451 | | | — | |
Receivable for: | | | | | | | | | |
Investments sold | | — | | | 6,879,231 | | | — | |
Investments sold on a delayed delivery basis | | — | | | — | | | — | |
Fund shares sold | | 1,120,000 | | | 364,686 | | | 3,627 | |
Dividends | | 4,928 | | | — | | | — | |
Interest | | 617,774 | | | 4,200,974 | | | 2,006,826 | |
Futures variation margin | | — | | | 63,984 | | | — | |
Expense reimbursement due from Investment Advisor and/or its affiliates | | 17,063 | | | 91,636 | | | 68,726 | |
Prepaid expenses | | 2,858 | | | 31,199 | | | 5,647 | |
| | | | | | | | | |
Total assets | | $51,531,322 | | | $557,097,709 | | | $92,369,729 | |
| | | | | | | | | |
LIABILITIES | | | | | | | | | |
Payable to custodian bank | | — | | | 773,896 | | | — | |
Payable for: | | | | | | | | | |
Investments purchased | | — | | | 5,832,662 | | | 1,940,000 | |
Investments purchased on a delayed delivery basis | | — | | | — | | | — | |
Fund shares repurchased | | 90,662 | | | 383,097 | | | 28,675 | |
Distributions | | 103,496 | | | 1,409,074 | | | 437,961 | |
Investment advisory fee | | 20,116 | | | 296,242 | | | 57,921 | |
Administration fee | | 1,898 | | | 41,689 | | | 5,194 | |
Transfer agent fee | | 2,695 | | | 34,483 | | | 3,801 | |
Pricing and bookkeeping fees | | 2,852 | | | 8,256 | | | 3,412 | |
Trustees’/Directors’ fees | | — | | | — | | | 54 | |
Custody fee | | 695 | | | 16,073 | | | 12,920 | |
Legal fee | | 3,609 | | | 38,010 | | | 285,741 | |
Registration fee | | 4,936 | | | 53,262 | | | 19,899 | |
Shareholder servicing fee | | 10,058 | | | 99,490 | | | 23,519 | |
Distribution and service fees | | — | | | — | * | | — | |
Other liabilities | | 15,332 | | | 80,759 | | | 13,213 | |
| | | | | | | | | |
Total liabilities | | $256,349 | | | $9,066,993 | | | $2,832,310 | |
| | | | | | | | | |
NET ASSETS | | $51,274,973 | | | $548,030,716 | | | $89,537,419 | |
| | | | | | | | | |
NET ASSETS CONSIST OF | | | | | | | | | |
Par value | | $7,142 | | | $61,166 | | | $193 | |
Paid-in capital in excess of par value | | 51,239,846 | | | 549,903,000 | | | 154,830,582 | |
Undistributed (overdistributed) net investment income | | 494 | | | 194,985 | | | (686,734 | ) |
Accumulated net realized gain (loss) | | (39,825 | ) | | (1,359,028 | ) | | (65,116,699 | ) |
Net unrealized appreciation (depreciation) on: | | | | | | | | | |
Investments | | 67,316 | | | (833,954 | ) | | 510,077 | |
Futures contracts | | — | | | 60,096 | | | — | |
Swap contracts | | — | | | 4,451 | | | — | |
| | | | | | | | | |
NET ASSETS | | $51,274,973 | | | $548,030,716 | | | $89,537,419 | |
| | | | | | | | | |
Shares | | | | | | | | | |
Net assets | | $51,274,973 | | | $329,082,914 | | | $85,790,883 | |
Shares outstanding | | 7,142,087 | | | 36,733,338 | | | 18,518,456 | |
Net asset value and offering price per share | | $7.18 | | | $8.96 | | | $4.63 | |
Institutional Shares | | | | | | | | | |
Net assets | | — | | | $218,946,712 | | | $3,746,536 | |
Shares outstanding | | — | | | 24,432,425 | | | 809,273 | |
Net asset value and offering price per share | | — | | | $8.96 | | | $4.63 | |
Retirement Shares | | | | | | | | | |
Net assets | | — | | | $1,090 | | | — | |
Shares outstanding | | — | | | 122 | | | — | |
Net asset value and offering price per share | | — | | | $8.96 | (a) | | — | |
| (a) | | Net asset value per share rounds due to fractional shares outstanding. |
| * | | Rounds to less than $1. |
See Notes to Financial Statements.
46
| | | | | | | | | | | | | | | | |
| | | | | |
Intermediate-
Term Bond
Fund | | | Intermediate-Term
Tax-Exempt Fund | | | Long-Term
Tax-Exempt
Fund | | | New York
Intermediate-Term
Tax-Exempt Fund | | | Short-Term
Government
Securities Fund | | | Short-Term
Tax-Exempt
Securities Fund | |
| | | | | | | | | | | | | | | | |
| $448,189,122 | | | $385,069,454 | | | $63,078,921 | | | $138,581,571 | | | $256,813,439 | | | $99,317,198 | |
| | | | | | | | | | | | | | | | | |
| $447,012,904 | | | $388,150,694 | | | $62,884,314 | | | $139 510,834 | | | $257,666,780 | | | $99,411,212 | |
| 882 | | | — | | | — | | | — | | | — | | | — | |
| 4,451 | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | |
| — | | | — | | | 1,056,660 | | | — | | | 252,681 | | | — | |
| — | | | 4,226,640 | | | — | | | — | | | — | | | — | |
| 307,328 | | | 285,448 | | | — | | | 101,033 | | | 52,976 | | | 250,812 | |
| — | | | 1,102 | | | 699 | | | 5,379 | | | — | | | 1,322 | |
| 3,211,071 | | | 5,344,187 | | | 845,168 | | | 2,023,281 | | | 1,676,364 | | | 1,334,024 | |
| 76,130 | | | — | | | — | | | — | | | 121,406 | | | — | |
| 5,203 | | | 38,765 | | | 17,357 | | | 6,929 | | | 9,051 | | | 22,584 | |
| 25,143 | | | 21,677 | | | 3,614 | | | 7,752 | | | 13,982 | | | 5,552 | |
| | | | | | | | | | | | | | | | | |
| $450,643,112 | | | $398,068,513 | | | $64,807,812 | | | $141,655,208 | | | $259,793,240 | | | $101,025,506 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| — | | | — | | | — | | | — | | | 285,138 | | | — | |
| | | | | | | | | | | | | | | | |
| — | | | — | | | 1,032,340 | | | — | | | 2,499,665 | | | — | |
| 2,384,792 | | | 6,188,310 | | | — | | | — | | | — | | | — | |
| 183,903 | | | 1,221,859 | | | 6,414 | | | 137,311 | | | 214,069 | | | 9,361 | |
| 1,398,883 | | | 1,042,320 | | | 166,978 | | | 319,053 | | | 608,598 | | | 224,605 | |
| 128,014 | | | 112,275 | | | 26,015 | | | 57,630 | | | 62,792 | | | 24,798 | |
| 33,022 | | | 28,676 | | | 3,021 | | | 9,039 | | | 18,039 | | | 5,987 | |
| 5,584 | | | 15,483 | | | 18,329 | | | 4,248 | | | 16,388 | | | 2,887 | |
| 5,901 | | | 4,766 | | | 2,417 | | | 3,303 | | | 3,983 | | | 2,689 | |
| — | | | — | | | — | | | — | | | — | | | — | |
| 9,688 | | | 6,211 | | | 756 | | | 2,853 | | | 14,532 | | | 304 | |
| 36,553 | | | 23,846 | | | 3,468 | | | 9,768 | | | 25,660 | | | 14,626 | |
| 17,857 | | | 22,356 | | | 18,985 | | | 2,943 | | | 15,789 | | | 8,579 | |
| 86,477 | | | 80,196 | | | 12,097 | | | 28,815 | | | 98,107 | | | 25,833 | |
| — | | | — | | | — | | | — | | | — | | | — | |
| 45,190 | | | 48,385 | | | 16,932 | | | 22,338 | | | 36,667 | | | 24,309 | |
| | | | | | | | | | | | | | | | | |
| $4,335,864 | | | $8,794,683 | | | $1,307,752 | | | $597,301 | | | $3,899,427 | | | $343,978 | |
| | | | | | | | | | | | | | | | | |
| $446,307,248 | | | $389,273,830 | | | $63,500,060 | | | $141,057,907 | | | $255,893,813 | | | $100,681,528 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| $62,918 | | | $41,841 | | | $6,362 | | | $16,374 | | | $36,581 | | | $14,149 | |
| 451,715,712 | | | 387,231,825 | | | 63,387,496 | | | 141,057,419 | | | 270,726,831 | | | 103,420,698 | |
| 18,876 | | | (47,083 | ) | | (25,460 | ) | | 16 | | | (101,043 | ) | | — | |
| (4,395,013 | ) | | (1,033,993 | ) | | 326,269 | | | (945,165 | ) | | (15,796,265 | ) | | (2,847,333 | ) |
| | | | | | | | | | | | | | | | |
| (1,176,218 | ) | | 3,081,240 | | | (194,607 | ) | | 929,263 | | | 853,341 | | | 94,014 | |
| 76,522 | | | — | | | — | | | — | | | 174,368 | | | — | |
| 4,451 | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | |
| $446,307,248 | | | $389,273,830 | | | $63,500,060 | | | $141,057,907 | | | $255,893,813 | | | $100,681,528 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| $446,307,248 | | | $389,273,830 | | | $63,500,060 | | | $141,057,907 | | | $255,893,813 | | | $100,681,528 | |
| 62,917,957 | | | 41,841,310 | | | 6,362,050 | | | 16 ,374,018 | | | 36,581,050 | | | 14,148,747 | |
| $7.09 | | | $9.30 | | | $9.98 | | | $8.61 | | | $7.00 | | | $7.12 | |
| | | | | | | | | | | | | | | | |
| — | | | — | | | — | | | — | | | — | | | — | |
| — | | | — | | | — | | | — | | | — | | | — | |
| — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | |
| — | | | — | | | — | | | — | | | — | | | — | |
| — | | | — | | | — | | | — | | | — | | | — | |
| — | | | — | | | — | | | — | | | — | | | — | |
See Notes to Financial Statements.
47
Excelsior Funds
Statements of Operations
For the Six Months Ended September 30, 2007 (Unaudited)
| | | | | | | | | | | | |
| | | |
| | | California
Short-Intermediate
Term Tax-Exempt
Income Fund | | | Core Bond
Fund | | | High Yield
Fund | |
INVESTMENT INCOME | | | | | | | | | | | | |
Interest | | $ | 944,581 | | | $ | 14,432,791 | | | $ | 4,245,939 | |
Dividends | | | 26,286 | | | | 347,439 | | | | — | |
| | | | | | | | | | | | |
Total Investment Income | | | 970,867 | | | | 14,780,230 | | | | 4,245,939 | |
EXPENSES | | | | | | | | | | | | |
Investment advisory fee | | | 129,389 | | | | 1,796,450 | | | | 425,759 | |
Administration fee | | | 36,769 | | | | 411,888 | | | | 77,818 | |
Distribution fee—Retirement Shares | | | — | | | | 2 | | | | — | |
Shareholder servicing fee: | | | | | | | | | | | | |
Shares | | | 62,464 | | | | 400,341 | | | | 127,908 | |
Retirement Shares | | | — | | | | 2 | | | | — | |
Transfer agent fee | | | 9,183 | | | | 91,821 | | | | 23,259 | |
Pricing and bookkeeping fees | | | 5,293 | | | | 15,922 | | | | 8,464 | |
Trustees’/Directors’ fees | | | 8,419 | | | | 10,771 | | | | 12,614 | |
Legal fee | | | 1,908 | | | | 13,909 | | | | 283,020 | |
Custody fees | | | 2,225 | | | | 20,331 | | | | 9,605 | |
Other expenses | | | 16,034 | | | | 64,185 | | | | 59,631 | |
| | | | | | | | | | | | |
Total Expenses | | | 271,684 | | | | 2,825,622 | | | | 1,028,078 | |
Fees waived/reimbursed by: | | | | | | | | | | | | |
Investment Advisor | | | (137,227 | ) | | | (557,634 | ) | | | (455,059 | ) |
Administrator | | | (6,199 | ) | | | (69,483 | ) | | | (11,856 | ) |
Custody earnings credit | | | (8 | ) | | | (1,706 | ) | | | (7,497 | ) |
| | | | | | | | | | | | |
Net Expenses | | | 128,250 | | | | 2,196,799 | | | | 553,666 | |
| | | | | | | | | | | | |
NET INVESTMENT INCOME | | | 842,617 | | | | 12,583,431 | | | | 3,692,273 | |
| | | | | | | | | | | | |
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FUTURES CONTRACTS AND SWAP CONTRACTS | | | | | | | | | | | | |
Net realized gain (loss) on: | | | | | | | | | | | | |
Investments | | | (10,222 | ) | | | 438,269 | | | | 364,010 | |
Futures contracts | | | — | | | | 64,303 | | | | — | |
Swap contracts | | | — | | | | 5,699 | | | | — | |
| | | | | | | | | | | | |
Net realized gain (loss) | | | (10,222 | ) | | | 508,271 | | | | 364,010 | |
| | | | | | | | | | | | |
Net change in unrealized appreciation (depreciation) on: | | | | | | | | | | | | |
Investments | | | 84,028 | | | | (1,889,913 | ) | | | (4,023,073 | ) |
Futures contracts | | | — | | | | 19,368 | | | | — | |
Swap contracts | | | — | | | | 4,451 | | | | — | |
| | | | | | | | | | | | |
Net change in unrealized appreciation (depreciation) | | | 84,028 | | | | (1,866,094 | ) | | | (4,023,073 | ) |
| | | | | | | | | | | | |
Net Gain (Loss) | | | 73,806 | | | | (1,357,823 | ) | | | (3,659,063 | ) |
| | | | | | | | | | | | |
Net Increase Resulting from Operations | | $ | 916,423 | | | $ | 11,225,608 | | | $ | 33,210 | |
| | | | | | | | | | | | |
See Notes to Financial Statements.
48
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Intermediate-
Term Bond
Fund | | | Intermediate-
Term Tax-
Exempt Fund | | | Long-Term
Tax-
Exempt
Fund | | | New York
Intermediate-
Term Tax-
Exempt Fund | | | Short-Term
Government
Securities Fund | | | Short-Term
Tax-Exempt
Securities Fund | |
| | | | | | | | | | | | | | | | | | | | | | |
| $ | 11,325,192 | | | $ | 7,972,265 | | | $ | 1,351,075 | | | $ | 2,746,463 | | | $ | 6,241,821 | | | $ | 1,826,158 | |
| | 423,987 | | | | 15,774 | | | | 3,540 | | | | 11,963 | | | | — | | | | 4,103 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | 11,749,179 | | | | 7,988,039 | | | | 1,354,615 | | | | 2,758,426 | | | | 6,241,821 | | | | 1,830,261 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | 795,470 | | | | 687,768 | | | | 160,399 | | | | 350,780 | | | | 381,588 | | | | 152,767 | |
| | 338,422 | | | | 292,303 | | | | 46,063 | | | | 103,077 | | | | 188,493 | | | | 74,280 | |
| | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | |
| | 568,194 | | | | 481,829 | | | | 69,555 | | | | 166,980 | | | | 317,989 | | | | 143,533 | |
| | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | 17,932 | | | | 25,375 | | | | 28,599 | | | | 11,733 | | | | 56,319 | | | | 11,213 | |
| | 11,736 | | | | 8,757 | | | | 5,414 | | | | 6,540 | | | | 8,617 | | | | 5,398 | |
| | 10,594 | | | | 11,113 | | | | 8,563 | | | | 9,026 | | | | 9,400 | | | | 9,061 | |
| | 31,824 | | | | 13,855 | | | | 2,855 | | | | 2,822 | | | | 1,845 | | | | 273 | |
| | 14,867 | | | | 12,718 | | | | 3,145 | | | | 3,541 | | | | 10,096 | | | | 5,624 | |
| | 41,566 | | | | 38,190 | | | | 16,586 | | | | 17,362 | | | | 32,995 | | | | 10,659 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | 1,830,605 | | | | 1,571,908 | | | | 341,179 | | | | 671,861 | | | | 1,007,342 | | | | 412,808 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | (68,107 | ) | | | (245,385 | ) | | | (76,526 | ) | | | (93,145 | ) | | | — | | | | (94,553 | ) |
| | (56,216 | ) | | | (49,153 | ) | | | (8,003 | ) | | | (17,469 | ) | | | (64,084 | ) | | | (12,723 | ) |
| | (1,768 | ) | | | (83 | ) | | | (4 | ) | | | (2 | ) | | | (230 | ) | | | (15 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| | 1,704,514 | | | | 1,277,287 | | | | 256,646 | | | | 561,245 | | | | 943,028 | | | | 305,517 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | 10,044,665 | | | | 6,710,752 | | | | 1,097,969 | | | | 2,197,181 | | | | 5,298,793 | | | | 1,524,744 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | 698,061 | | | | (244,445 | ) | | | 57,514 | | | | (198,872 | ) | | | (559,126 | ) | | | (3,342 | ) |
| | 130,882 | | | | — | | | | — | | | | — | | | | (58,128 | ) | | | — | |
| | 5,699 | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | 834,642 | | | | (244,445 | ) | | | 57,514 | | | | (198,872 | ) | | | (617,254 | ) | | | (3,342 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | (1,538,619 | ) | | | (1,167,184 | ) | | | (1,003,023 | ) | | | (30,120 | ) | | | 1,382,131 | | | | 168,508 | |
| | 7,828 | | | | — | | | | — | | | | — | | | | 133,400 | | | | — | |
| | 4,451 | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | (1,526,340 | ) | | | (1,167,184 | ) | | | (1,003,023 | ) | | | (30,120 | ) | | | 1,515,531 | | | | 168,508 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | (691,698 | ) | | | (1,411,629 | ) | | | (945,509 | ) | | | (228,992 | ) | | | 898,277 | | | | 165,166 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| $ | 9,352,967 | | | $ | 5,299,123 | | | $ | 152,460 | | | $ | 1,968,189 | | | $ | 6,197,070 | | | $ | 1,689,910 | |
| | | | | | | | | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
49
Excelsior Funds
Statements of Changes in Net Assets
| | | | | | | | |
| |
| | | California Short-Intermediate Term Tax-Exempt Income Fund | |
Increase (Decrease) in Net Assets | | (Unaudited) Six Months Ended
September 30, 2007 | | | Year Ended March 31, 2007 | |
Operations | | | | | | | | |
Net investment income | | $ | 842,617 | | | $ | 1,939,999 | |
Net realized gain (loss) on investments, futures contracts and swap contracts | | | (10,222 | ) | | | 12,011 | |
Net change in unrealized appreciation (depreciation) on investments, futures contracts and swap contracts | | | 84,028 | | | | 335,549 | |
| | | | | | | | |
Net increase resulting from operations | | | 916,423 | | | | 2,287,559 | |
| | | | | | | | |
Distributions to Shareholders | | | | | | | | |
From net investment income: | | | | | | | | |
Shares | | | (842,864 | ) | | | (1,939,807 | ) |
Institutional Shares | | | — | | | | — | |
Retirement Shares | | | — | | | | — | |
From net realized gains: | | | | | | | | |
Shares | | | — | | | | (255,808 | ) |
| | | | | | | | |
Total Distributions to Shareholders | | | (842,864 | ) | | | (2,195,615 | ) |
| | | | | | | | |
Net Capital Share Transactions | | | (5,403,813 | ) | | | (9,841,880 | ) |
| | | | | | | | |
Net increase (decrease) in net assets | | | (5,330,254 | ) | | | (9,749,936 | ) |
| | | | | | | | |
NET ASSETS | | | | | | | | |
Beginning of period | | $ | 56,605,227 | | | $ | 66,355,163 | |
| | | | | | | | |
End of period | | $ | 51,274,973 | | | $ | 56,605,227 | |
| | | | | | | | |
Undistributed (overdistributed) net investment income, at end of period | | $ | 494 | | | $ | 741 | |
| | | | | | | | |
See Notes to Financial Statements.
50
| | | | | | | | | | | | | | |
| |
Core Bond Fund | | | High Yield Fund | |
(Unaudited) Six Months Ended September 30, 2007 | | | Year Ended March 31, 2007 | | | (Unaudited) Six Months Ended September 30, 2007 | | | Year Ended March 31, 2007 | |
| | | | | | | | | | | | | | |
| | $12,583,431 | | | $ | 18,645,393 | | | $ | 3,692,273 | | | $ | 8,511,823 | |
| | 508,271 | | | | (67,050 | ) | | | 364,010 | | | | (309,422 | ) |
| | | |
| | (1,866,094 | ) | | | 5,359,028 | | | | (4,023,073 | ) | | | 6,524,399 | |
| | | | | | | | | | | | | | | |
| | 11,225,608 | | | | 23,937,371 | | | | 33,210 | | | | 14,726,800 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | (7,026,663 | ) | | | (12,851,594 | ) | | | (3,727,258 | ) | | | (7,813,910 | ) |
| | (5,385,011 | ) | | | (5,693,159 | ) | | | (154,811 | ) | | | (539,707 | ) |
| | (22 | ) | | | (40 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | |
| | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | |
| | (12,411,696 | ) | | | (18,544,793 | ) | | | (3,882,069 | ) | | | (8,353,617 | ) |
| | | | | | | | | | | | | | | |
| | (2,502,969 | ) | | | 263,311,270 | | | | (22,610,627 | ) | | | (39,412,117 | ) |
| | | | | | | | | | | | | | | |
| | (3,689,057 | ) | | | 268,703,848 | | | | (26,459,486 | ) | | | (33,038,934 | ) |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| $ | 551,719,773 | | | $ | 283,015,925 | | | $ | 115,996,905 | | | $ | 149,035,839 | |
| | | | | | | | | | | | | | | |
| $ | 548,030,716 | | | $ | 551,719,773 | | | $ | 89,537,419 | | | $ | 115,996,905 | |
| | | | | | | | | | | | | | | |
| $ | 194,985 | | | $ | 23,250 | | | $ | (686,734 | ) | | $ | (496,938 | ) |
| | | | | | | | | | | | | | | |
See Notes to Financial Statements.
51
Excelsior Funds
Statements of Changes in Net Assets — (continued)
| | | | | | | | |
| |
| | | Intermediate-Term Bond Fund | |
Increase (Decrease) in Net Assets | | (Unaudited) Six Months Ended September 30, 2007 | | | Year Ended March 31, 2007 | |
Operations | | | | | | | | |
Net investment income | | $ | 10,044,665 | | | $ | 19,677,927 | |
Net realized gain (loss) on investments, futures contracts and swap contracts | | | 834,642 | | | | (3,129,379 | ) |
Net change in unrealized appreciation (depreciation) on investments, futures contracts and swap contracts | | | (1,526,340 | ) | | | 8,596,210 | |
| | | | | | | | |
Net increase resulting from operations | | | 9,352,967 | | | | 25,144,758 | |
| | | | | | | | |
Distributions to Shareholders | | | | | | | | |
From net investment income: | | | | | | | | |
Shares | | | (9,979,815 | ) | | | (19,642,311 | ) |
From net realized gains: | | | | | | | | |
Shares | | | — | | | | — | |
| | | | | | | | |
Total Distributions to Shareholders | | | (9,979,815 | ) | | | (19,642,311 | ) |
| | | | | | | | |
Net Capital Share Transactions | | | (20,341,747 | ) | | | 24,700,690 | |
| | | | | | | | |
Net increase (decrease) in net assets | | | (20,968,595 | ) | | | 30,203,137 | |
| | | | | | | | |
NET ASSETS | | | | | | | | |
Beginning of period | | $ | 467,275,843 | | | $ | 437,072,706 | |
| | | | | | | | |
End of period | | $ | 446,307,248 | | | $ | 467,275,843 | |
| | | | | | | | |
Undistributed (overdistributed) net investment income, at end of period | | $ | 18,876 | | | $ | (45,974 | ) |
| | | | | | | | |
See Notes to Financial Statements.
52
| | | | | | | | | | | | | | |
| |
Intermediate-Term Tax-Exempt Fund | | | Long-Term Tax-Exempt Fund | |
(Unaudited) Six Months Ended September 30, 2007 | | | Year Ended March 31, 2007 | | | (Unaudited) Six Months Ended September 30, 2007 | | | Year Ended March 31, 2007 | |
| | | | | | | | | | | | | | |
| $ | 6,710,752 | | | $ | 12,410,191 | | | $ | 1,097,969 | | | $ | 2,140,473 | |
| | (244,445 | ) | | | (789,548 | ) | | | 57,514 | | | | 267,714 | |
| | | |
| | (1,167,184 | ) | | | 3,456,392 | | | | (1,003,023 | ) | | | 768,194 | |
| | | | | | | | | | | | | | | |
| | 5,299,123 | | | | 15,077,035 | | | | 152,460 | | | | 3,176,381 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | (6,806,535 | ) | | | (12,408,623 | ) | | | (1,150,559 | ) | | | (2,140,560 | ) |
| | | | | | | | | | | | | | |
| | — | | | | (730,446 | ) | | | — | | | | (392,493 | ) |
| | | | | | | | | | | | | | | |
| | (6,806,535 | ) | | | (13,139,069 | ) | | | (1,150,559 | ) | | | (2,533,053 | ) |
| | | | | | | | | | | | | | | |
| | (1,681,783 | ) | | | 37,829,303 | | | | (878,091 | ) | | | 3,475,678 | |
| | | | | | | | | | | | | | | |
| | (3,189,195 | ) | | | 39,767,269 | | | | (1,876,190 | ) | | | 4,119,006 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| $ | 392,463,025 | | | $ | 352,695,756 | | | $ | 65,376,250 | | | $ | 61,257,244 | |
| | | | | | | | | | | | | | | |
| $ | 389,273,830 | | | $ | 392,463,025 | | | $ | 63,500,060 | | | $ | 65,376,250 | |
| | | | | | | | | | | | | | | |
| $ | (47,083 | ) | | $ | 48,700 | | | $ | (25,460 | ) | | $ | 27,130 | |
| | | | | | | | | | | | | | | |
See Notes to Financial Statements.
53
Excelsior Funds
Statements of Changes in Net Assets — (continued)
| | | | | | | | |
| |
| | | New York Intermediate-Term Tax-Exempt Fund | |
Increase (Decrease) in Net Assets | | (Unaudited) Six Months Ended September 30,
2007 | | | Year Ended March 31, 2007 | |
Operations | | | | | | | | |
Net investment income | | $ | 2,197,181 | | | $ | 4,174,262 | |
Net realized loss on investments and futures contracts | | | (198,872 | ) | | | (221,768 | ) |
Net change in unrealized appreciation (depreciation) on investments and futures contracts | | | (30,120 | ) | | | 1,496,004 | |
| | | | | | | | |
Net increase resulting from operations | | | 1,968,189 | | | | 5,448,498 | |
| | | | | | | | |
Distributions to Shareholders | | | | | | | | |
From net investment income: | | | | | | | | |
Shares | | | (2,198,354 | ) | | | (4,173,194 | ) |
| | | | | | | | |
Net Capital Share Transactions | | | (166,179 | ) | | | 9,152,946 | |
| | | | | | | | |
Net increase (decrease) in net assets | | | (396,344 | ) | | | 10,428,250 | |
| | | | | | | | |
NET ASSETS | | | | | | | | |
Beginning of period | | $ | 141,454,251 | | | $ | 131,026,001 | |
| | | | | | | | |
End of period | | $ | 141,057,907 | | | $ | 141,454,251 | |
| | | | | | | | |
Undistributed (overdistributed) net investment income, at end of period | | $ | 16 | | | $ | 1,189 | |
| | | | | | | | |
See Notes to Financial Statements.
54
| | | | | | | | | | | | | | |
| |
Short-Term
Government Securities Fund | | | Short-Term Tax-Exempt Securities Fund | |
(Unaudited) Six Months Ended September 30, 2007 | | | Year Ended March 31, 2007 | | | (Unaudited) Six Months Ended September 30, 2007 | | | Year Ended March 31, 2007 | |
| | | | | | | | | | | | | | |
| $ | 5,298,793 | | | $ | 10,346,642 | | | $ | 1,524,744 | | | $ | 3,390,028 | |
| | (617,254 | ) | | | (1,599,140 | ) | | | (3,342 | ) | | | (202,111 | ) |
| | | |
| | 1,515,531 | | | | 4,796,996 | | | | 168,508 | | | | 589,130 | |
| | | | | | | | | | | | | | | |
| | 6,197,070 | | | | 13,544,498 | | | | 1,689,910 | | | | 3,777,047 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | (5,372,430 | ) | | | (11,425,192 | ) | | | (1,527,805 | ) | | | (3,386,967 | ) |
| | | | | | | | | | | | | | | |
| | (2,949,694 | ) | | | (83,267,253 | ) | | | (3,576,048 | ) | | | (29,506,088 | ) |
| | | | | | | | | | | | | | | |
| | (2,125,054 | ) | | | (81,147,947 | ) | | | (3,413,943 | ) | | | (29,116,008 | ) |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| $ | 258,018,867 | | | $ | 339,166,814 | | | $ | 104,095,471 | | | $ | 133,211,479 | |
| | | | | | | | | | | | | | | |
| $ | 255,893,813 | | | $ | 258,018,867 | | | $ | 100,681,528 | | | $ | 104,095,471 | |
| | | | | | | | | | | | | | | |
| $ | (101,043 | ) | | $ | (27,406 | ) | | $ | — | | | $ | 3,061 | |
| | | | | | | | | | | | | | | |
See Notes to Financial Statements.
55
Excelsior Funds
Statements of Changes in Net Assets — Capital Stock Activity
| | | | | | | | | | | | |
| |
| | | California Short-Intermediate Term Tax-Exempt Income Fund | |
| | | (Unaudited) Six Months Ended September 30, 2007 | | | Year Ended March 31, 2007 | |
Changes in Shares | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
Shares | | | | | | | | | | | | |
Subscriptions | | 869,820 | | | 6,214,732 | | | 2,429,521 | | | 17,401,512 | |
Distributions reinvested | | 32,746 | | | 233,744 | | | 92,381 | | | 662,564 | |
Redemptions | | (1,664,350 | ) | | (11,852,289 | ) | | (3,890,655 | ) | | (27,905,956 | ) |
| | | | | | | | | | | | |
Net increase (decrease) | | (761,784 | ) | | (5,403,813 | ) | | (1,368,753 | ) | | (9,841,880 | ) |
Institutional Shares | | | | | | | | | | | | |
Subscriptions | | — | | | — | | | — | | | — | |
Proceeds received in connection with merger | | — | | | — | | | — | | | — | |
Distributions reinvested | | — | | | — | | | — | | | — | |
Redemptions | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | |
Net increase (decrease) | | — | | | — | | | — | | | — | |
Retirement Shares | | | | | | | | | | | | |
Distributions reinvested | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | |
Redemption Fees | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | |
See Notes to Financial Statements.
56
| | | | | | | | | | | | | | | | | | | | | | |
| |
Core Bond Fund | | | High Yield Fund | |
(Unaudited) Six Months Ended September 30, 2007 | | | Year Ended March 31, 2007 | | | (Unaudited) Six Months Ended September 30, 2007 | | | Year Ended March 31, 2007 | |
| Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
| | | | | | | | | | | | | | | | | | | | | | |
| 4,131,808 | | | 36,758,471 | | | 9,986,679 | | | 88,776,364 | | | 2,917,638 | | | 14,543,339 | | | 6,072,661 | | | 28,550,138 | |
| 408,792 | | | 3,642,395 | | | 673,001 | | | 5,989,211 | | | 157,785 | | | 746,752 | | | 217,741 | | | 1,004,402 | |
| (2,772,989 | ) | | (24,631,216 | ) | | (7,567,445 | ) | | (67,312,972 | ) | | (7,804,531 | ) | | (36,607,846 | ) | | (13,302,993 | ) | | (60,913,343 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| 1,767,611 | | | 15,769,650 | | | 3,092,235 | | | 27,452,603 | | | (4,729,108 | ) | | (21,317,755 | ) | | (7,012,591 | ) | | (31,358,803 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
| 1,608,329 | | | 14,318,071 | | | 2,772,888 | | | 24,623,459 | | | 250,685 | | | 321,444 | | | 155,243 | | | 699,379 | |
| — | | | — | | | 25,148,666 | | | 225,504,856 | | | — | | | — | | | — | | | — | |
| 129,411 | | | 1,153,959 | | | 113,170 | | | 1,016,339 | | | 6,306 | | | 30,076 | | | 32,619 | | | 149,603 | |
| (3,775,194 | ) | | (33,744,674 | ) | | (1,706,058 | ) | | (15,286,027 | ) | | (345,344 | ) | | (1,644,392 | ) | | (1,952,444 | ) | | (8,902,311 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| (2,037,454 | ) | | (18,272,644 | ) | | 26,328,666 | | | 235,858,627 | | | (88,353 | ) | | (1,292,872 | ) | | (1,764,582 | ) | | (8,053,329 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
| 3 | | | 25 | | | 4 | | | 40 | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| — | | | — | | | — | | | — | | | — | | | — | | | — | | | 15 | |
| | | | | | | | | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
57
Excelsior Funds
Statements of Changes in Net Assets — Capital Stock Activity — (continued)
| | | | | | | | | | | | |
| |
| | | Intermediate-Term Bond Fund | |
| | | (Unaudited) Six Months Ended September 30, 2007 | | | Year Ended March 31, 2007 | |
Changes in Shares | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
Shares | | | | | | | | | | | | |
Subscriptions | | 5,256,125 | | | 37,025,907 | | | 18,049,503 | | | 127,159,970 | |
Distributions reinvested | | 224,431 | | | 1,582,395 | | | 362,756 | | | 2,558,710 | |
Redemptions | | (8,393,897 | ) | | (58,950,049 | ) | | (14,921,064 | ) | | (105,017,990 | ) |
| | | | | | | | | | | | |
Net increase (decrease) | | (2,913,341 | ) | | (20,341,747 | ) | | 3,491,195 | | | 24,700,690 | |
See Notes to Financial Statements.
58
| | | | | | | | | | | | | | | | | | | | | | |
| |
| Intermediate-Term Tax-Exempt Fund | | | Long-Term Tax-Exempt Fund | |
(Unaudited) Six Months Ended September 30, 2007 | | | Year Ended March 31, 2007 | | | (Unaudited) Six Months Ended September 30, 2007 | | | Year Ended March 31, 2007 | |
| Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
| | | | | | | | | | | | | | | | | | | | | | |
| 4,088,759 | | | 37,848,587 | | | 12,042,682 | | | 112,338,953 | | | 444,274 | | | 4,413,850 | | | 912,996 | | | 9,224,461 | |
| 65,510 | | | 607,312 | | | 126,628 | | | 1,181,763 | | | 25,100 | | | 251,159 | | | 49,954 | | | 506,450 | |
| (4,344,405 | ) | | (40,137,682 | ) | | (8,123,028 | ) | | (75,691,413 | ) | | (555,949 | ) | | (5,543,100 | ) | | (619,542 | ) | | (6,255,233 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| (190,136 | ) | | (1,681,783 | ) | | 4,046,282 | | | 37,829,303 | | | (86,575 | ) | | (878,091 | ) | | 343,408 | | | 3,475,678 | |
See Notes to Financial Statements.
59
Excelsior Funds
Statements of Changes in Net Assets — Capital Stock Activity — (continued)
| | | | | | | | | | | | |
| |
| | | New York Intermediate-Term Tax-Exempt Fund | |
Changes in Shares | | (Unaudited) Six Months Ended September 30, 2007 | | | Year Ended March 31, 2007 | |
| | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
Shares | | | | | | | | | | | | |
Subscriptions | | 1,983,018 | | | 17,003,915 | | | 4,902,368 | | | 42,183,360 | |
Distributions reinvested | | 34,353 | | | 294,714 | | | 62,837 | | | 540,239 | |
Redemptions | | (2,041,763 | ) | | (17,464,808 | ) | | (3,898,713 | ) | | (33,570,653 | ) |
| | | | | | | | | | | | |
Net increase (decrease) | | (24,392 | ) | | (166,179 | ) | | 1,066,492 | | | 9,152,946 | |
See Notes to Financial Statements.
60
| | | | | | | | | | | | | | | | | | | | | | |
| |
Short-Term Government Securities Fund | | | Short-Term Tax-Exempt Securities Fund | |
(Unaudited) Six Months Ended September 30, 2007 | | | Year Ended March 31, 2007 | | | (Unaudited) Six Months Ended September 30, 2007 | | | Year Ended March 31, 2007 | |
| Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
| | | | | | | | | | | | | | | | | | | | | | |
| 4,337,844 | | | 30,157,772 | | | 6,885,151 | | | 47,777,743 | | | 1,469,626 | | | 10,412,934 | | | 2,756,608 | | | 19,549,512 | |
| 280,134 | | | 1,949,112 | | | 430,742 | | | 2,989,949 | | | 27,084 | | | 192,104 | | | 44,926 | | | 318,627 | |
| (5,045,277 | ) | | (35,056,578 | ) | | (19,339,995 | ) | | (134,034,945 | ) | | (2,000,526 | ) | | (14,181,086 | ) | | (6,961,351 | ) | | (49,374,227 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| (427,299 | ) | | (2,949,694 | ) | | (12,024,102 | ) | | (83,267,253 | ) | | (503,816 | ) | | (3,576,048 | ) | | (4,159,817 | ) | | (29,506,088 | ) |
See Notes to Financial Statements.
61
Financial Highlights – California Short-Intermediate Term Tax-Exempt Income Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30,
2007 | | | Year Ended March 31, | |
| Shares | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 7.16 | | | $ | 7.16 | | | $ | 7.27 | | | $ | 7.49 | | | $ | 7.49 | | | $ | 7.27 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.12 | (a) | | | 0.23 | (a) | | | 0.23 | (a) | | | 0.23 | (a) | | | 0.24 | | | | 0.25 | |
Net realized and unrealized gain (loss) on investments | | | 0.02 | | | | 0.03 | | | | (0.11 | ) | | | (0.22 | ) | | | — | | | | 0.22 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.14 | | | | 0.26 | | | | 0.12 | | | | 0.01 | | | | 0.24 | | | | 0.47 | |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.12 | ) | | | (0.23 | ) | | | (0.23 | ) | | | (0.23 | ) | | | (0.24 | ) | | | (0.25 | ) |
From net realized gains | | | — | | | | (0.03 | ) | | | — | | | | — | | | | — | | | | — | (b) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | (0.12 | ) | | | (0.26 | ) | | | (0.23 | ) | | | (0.23 | ) | | | (0.24 | ) | | | (0.25 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 7.18 | | | $ | 7.16 | | | $ | 7.16 | | | $ | 7.27 | | | $ | 7.49 | | | $ | 7.49 | |
Total return (c)(d) | | | 1.93 | (e) | | | 3.65 | % | | | 1.60 | % | | | 0.20 | % | | | 3.19 | % | | | 6.59 | % |
| | | | | | |
Ratios to Average Net Assets/
Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (f) | | | 0.50 | %(g) | | | 0.50 | % | | | 0.50 | % | | | 0.50 | % | | | 0.50 | % | | | 0.46 | % |
Waiver/Reimbursement | | | 0.55 | %(g) | | | 0.55 | % | | | 0.53 | % | | | 0.55 | % | | | 0.40 | % | | | 0.04 | % |
Net investment income (f) | | | 3.26 | %(g) | | | 3.16 | % | | | 3.11 | % | | | 3.18 | % | | | 3.14 | % | | | 3.36 | % |
Portfolio turnover rate | | | 4 | %(e) | | | 7 | % | | | 48 | % | | | 10 | % | | | 15 | % | | | 9 | % |
Net assets, end of period (000’s) | | $ | 51,275 | | | $ | 56,605 | | | $ | 66,355 | | | $ | 62,949 | | | $ | 66,894 | | | $ | 66,194 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Amount represents less than $0.01 per share. |
| (c) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (d) | Total return at net asset value assuming all distributions reinvested. |
| (f) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
62
Financial Highlights – Core Bond Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30, 2007 | | | Year Ended March 31, | |
| Shares | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 8.98 | | | $ | 8.84 | | | $ | 9.15 | | | $ | 9.43 | | | $ | 9.43 | | | $ | 8.95 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.20 | (a) | | | 0.39 | (a) | | | 0.37 | (a) | | | 0.37 | (a) | | | 0.38 | | | | 0.47 | |
Net realized and unrealized gain (loss) on investments, futures contracts and swap contracts | | | (0.02 | ) | | | 0.14 | | | | (0.18 | ) | | | (0.23 | ) | | | 0.14 | | | | 0.50 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.18 | | | | 0.53 | | | | 0.19 | | | | 0.14 | | | | 0.52 | | | | 0.97 | |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.20 | ) | | | (0.39 | ) | | | (0.38 | ) | | | (0.37 | ) | | | (0.38 | ) | | | (0.48 | ) |
From net realized gains | | | — | | | | — | | | | (0.12 | ) | | | (0.05 | ) | | | (0.14 | ) | | | (0.01 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | (0.20 | ) | | | (0.39 | ) | | | (0.50 | ) | | | (0.42 | ) | | | (0.52 | ) | | | (0.49 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 8.96 | | | $ | 8.98 | | | $ | 8.84 | | | $ | 9.15 | | | $ | 9.43 | | | $ | 9.43 | |
Total return (b)(c) | | | 1.99 | %(d) | | | 6.08 | % | | | 2.00 | % | | | 1.55 | % | | | 5.74 | % | | | 11.07 | % |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (e) | | | 0.90 | %(f) | | | 0.90 | % | | | 0.90 | % | | | 0.90 | % | | | 0.87 | % | | | 0.84 | % |
Waiver/Reimbursement | | | 0.23 | %(f) | | | 0.30 | % | | | 0.40 | % | | | 0.37 | % | | | 0.24 | % | | | 0.11 | % |
Net investment income (e) | | | 4.46 | %(f) | | | 4.36 | % | | | 4.05 | % | | | 3.99 | % | | | 4.06 | % | | | 5.10 | % |
Portfolio turnover rate | | | 29 | %(d) | | | 49 | % | | | 95 | % | | | 90 | % | | | 84 | % | | | 120 | % |
Net assets, end of period (000’s) | | $ | 329,083 | | | $ | 313,967 | | | $ | 281,767 | | | $ | 211,932 | | | $ | 269,027 | | | $ | 293,182 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (c) | Total return at net asset value assuming all distributions reinvested. |
| (e) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
63
Financial Highlights – High Yield Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited)
Six Months
Ended
September 30, 2007 | | | Year Ended March 31, | |
| Shares | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 4.80 | | | $ | 4.53 | | | $ | 4.67 | | | $ | 4.71 | | | $ | 3.99 | | | $ | 6.20 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (a) | | | 0.16 | | | | 0.32 | | | | 0.31 | | | | 0.34 | | | | 0.35 | | | | 0.88 | |
Net realized and unrealized gain (loss) on investments | | | (0.16 | ) | | | 0.26 | | | | (0.14 | ) | | | (0.08 | ) | | | 0.71 | | | | (1.54 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | — | | | | 0.58 | | | | 0.17 | | | | 0.26 | | | | 1.06 | | | | (0.66 | ) |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.17 | ) | | | (0.31 | ) | | | (0.30 | ) | | | (0.30 | ) | | | (0.26 | ) | | | (1.04 | ) |
Return of capital | | | — | | | | — | | | | (0.01 | ) | | | — | | | | (0.08 | ) | | | (0.51 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | (0.17 | ) | | | (0.31 | ) | | | (0.31 | ) | | | (0.30 | ) | | | (0.34 | ) | | | (1.55 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 4.63 | | | $ | 4.80 | | | $ | 4.53 | | | $ | 4.67 | | | $ | 4.71 | | | $ | 3.99 | |
Total return (b)(c) | | | 0.05 | %(d) | | | 13.41 | % | | | 3.72 | % | | | 5.54 | % | | | 27.45 | % | | | (10.49 | )% |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (e) | | | 1.05 | %(f) | | | 1.05 | % | | | 1.05 | % | | | 1.04 | % | | | 1.05 | % | | | 1.08 | % |
Waiver/Reimbursement | | | 0.88 | %(f) | | | 0.64 | % | | | 0.24 | % | | | 0.26 | % | | | 0.31 | % | | | 0.27 | % |
Net investment income (e) | | | 6.94 | %(f) | | | 6.95 | % | | | 6.84 | % | | | 6.50 | % | | | 7.79 | % | | | 18.06 | % |
Portfolio turnover rate | | | 25 | %(d) | | | 75 | % | | | 62 | % | | | 70 | % | | | 170 | % | | | 153 | % |
Net assets, end of period (000’s) | | $ | 85,791 | | | $ | 111,687 | | | $ | 136,991 | | | $ | 156,139 | | | $ | 151,476 | | | $ | 131,342 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (c) | Total return at net asset value assuming all distributions reinvested. |
| (e) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
64
Financial Highlights – Intermediate-Term Bond Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30, 2007 | | | Year Ended March 31, | |
| Shares | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 7.10 | | | $ | 7.01 | | | $ | 7.16 | | | $ | 7.40 | | | $ | 7.39 | | | $ | 7.10 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.16 | (a) | | | 0.31 | (a) | | | 0.27 | (a) | | | 0.26 | (a) | | | 0.26 | | | | 0.37 | |
Net realized and unrealized gain (loss) on investments, futures contracts and swap contracts | | | (0.02 | ) | | | 0.09 | | | | (0.12 | ) | | | (0.22 | ) | | | 0.11 | | | | 0.36 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.14 | | | | 0.40 | | | | 0.15 | | | | 0.03 | | | | 0.37 | | | | 0.73 | |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.15 | ) | | | (0.31 | ) | | | (0.28 | ) | | | (0.26 | ) | | | (0.26 | ) | | | (0.40 | ) |
From net realized gains | | | — | | | | — | | | | (0.02 | ) | | | (0.01 | ) | | | (0.10 | ) | | | (0.04 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | (0.15 | ) | | | (0.31 | ) | | | (0.30 | ) | | | (0.27 | ) | | | (0.36 | ) | | | (0.44 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 7.09 | | | $ | 7.10 | | | $ | 7.01 | | | $ | 7.16 | | | $ | 7.40 | | | $ | 7.39 | |
Total return (b)(c) | | | 2.08 | %(d) | | | 5.79 | % | | | 2.06 | % | | | 0.45 | % | | | 5.25 | % | | | 10.50 | % |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (e) | | | 0.75 | %(f) | | | 0.75 | % | | | 0.72 | % | | | 0.60 | % | | | 0.56 | % | | | 0.53 | % |
Waiver/Reimbursement | | | 0.06 | %(f) | | | 0.05 | % | | | 0.09 | % | | | 0.21 | % | | | 0.13 | % | | | 0.16 | % |
Net investment income (e) | | | 4.44 | %(f) | | | 4.38 | % | | | 3.74 | % | | | 3.53 | % | | | 3.56 | % | | | 4.56 | % |
Portfolio turnover rate | | | 45 | %(d) | | | 70 | % | | | 75 | % | | | 59 | % | | | 85 | % | | | 98 | % |
Net assets, end of period (000’s) | | $ | 446,307 | | | $ | 467,276 | | | $ | 437,073 | | | $ | 410,392 | | | $ | 413,267 | | | $ | 404,627 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (c) | Total return at net asset value assuming all distributions reinvested. |
| (e) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
65
Financial Highlights – Intermediate-Term Tax-Exempt Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30, 2007 | | | Year Ended March 31, | |
| Shares | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 9.34 | | | $ | 9.29 | | | $ | 9.41 | | | $ | 9.69 | | | $ | 9.88 | | | $ | 9.39 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.16 | (a) | | | 0.31 | (a) | | | 0.29 | (a) | | | 0.26 | (a) | | | 0.26 | | | | 0.31 | |
Net realized and unrealized gain (loss) on investments | | | (0.04 | ) | | | 0.07 | | | | (0.11 | ) | | | (0.24 | ) | | | 0.15 | | | | 0.55 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.12 | | | | 0.38 | | | | 0.18 | | | | 0.02 | | | | 0.41 | | | | 0.86 | |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.16 | ) | | | (0.31 | ) | | | (0.29 | ) | | | (0.26 | ) | | | (0.26 | ) | | | (0.31 | ) |
From net realized gains | | | — | | | | (0.02 | ) | | | (0.01 | ) | | | (0.04 | ) | | | (0.34 | ) | | | (0.06 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions Declared to Shareholders | | | (0.16 | ) | | | (0.33 | ) | | | (0.30 | ) | | | (0.30 | ) | | | (0.60 | ) | | | (0.37 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 9.30 | | | $ | 9.34 | | | $ | 9.29 | | | $ | 9.41 | | | $ | 9.69 | | | $ | 9.88 | |
Total return (b)(c) | | | 1.31 | %(d) | | | 4.15 | % | | | 1.93 | % | | | 0.20 | % | | | 4.19 | % | | | 9.31 | % |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (e) | | | 0.65 | %(f) | | | 0.65 | % | | | 0.65 | % | | | 0.65 | % | | | 0.56 | % | | | 0.51 | % |
Waiver/Reimbursement | | | 0.15 | %(f) | | | 0.15 | % | | | 0.15 | % | | | 0.16 | % | | | 0.07 | % | | | 0.08 | % |
Net investment income (e) | | | 3.42 | %(f) | | | 3.36 | % | | | 3.09 | % | | | 2.69 | % | | | 2.60 | % | | | 3.15 | % |
Portfolio turnover rate | | | 14 | %(d) | | | 39 | % | | | 69 | % | | | — | | | | 31 | % | | | 48 | % |
Net assets, end of period (000’s) | | $ | 389,274 | | | $ | 392,463 | | | $ | 352,696 | | | $ | 349,540 | | | $ | 387,624 | | | $ | 407,102 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (c) | Total return at net asset value assuming all distributions reinvested. |
| (e) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
66
Financial Highlights – Long-Term Tax-Exempt Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30, 2007 | | | Year Ended March 31, | |
| Shares | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 10.14 | | | $ | 10.03 | | | $ | 10.07 | | | $ | 10.08 | | | $ | 9.95 | | | $ | 9.48 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.17 | (a) | | | 0.35 | (a) | | | 0.31 | (a) | | | 0.27 | (a) | | | 0.26 | | | | 0.29 | |
Net realized and unrealized gain (loss) on investments | | | (0.15 | ) | | | 0.16 | | | | (0.04 | ) | | | (0.01 | ) | | | 0.13 | | | | 0.47 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.02 | | | | 0.51 | | | | 0.27 | | | | 0.27 | | | | 0.39 | | | | 0.76 | |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.18 | ) | | | (0.34 | ) | | | (0.31 | ) | | | (0.28 | ) | | | (0.26 | ) | | | (0.29 | ) |
From net realized gains | | | — | | | | (0.06 | ) | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | (0.18 | ) | | | (0.40 | ) | | | (0.31 | ) | | | (0.28 | ) | | | (0.26 | ) | | | (0.29 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 9.98 | | | $ | 10.14 | | | $ | 10.03 | | | $ | 10.07 | | | $ | 10.08 | | | $ | 9.95 | |
Total return (b)(c) | | | 0.21 | %(d) | | | 5.21 | % | | | 2.64 | % | | | 2.68 | % | | | 4.01 | % | | | 8.12 | % |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (e) | | | 0.80 | %(f) | | | 0.80 | % | | | 0.80 | % | | | 0.80 | % | | | 0.73 | % | | | 0.70 | % |
Waiver/Reimbursement | | | 0.26 | %(f) | | | 0.26 | % | | | 0.22 | % | | | 0.25 | % | | | 0.07 | % | | | 0.07 | % |
Net investment income (e) | | | 3.43 | %(f) | | | 3.39 | % | | | 3.01 | % | | | 2.74 | % | | | 2.64 | % | | | 2.99 | % |
Portfolio turnover rate | | | 11 | %(d) | | | 92 | % | | | 88 | % | | | 87 | % | | | 111 | % | | | 51 | % |
Net assets, end of period (000’s) | | $ | 63,500 | | | $ | 65,376 | | | $ | 61,257 | | | $ | 62,817 | | | $ | 72,783 | | | $ | 94,965 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (c) | Total return at net asset value assuming all distributions reinvested. |
| (e) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
67
Financial Highlights – New York Intermediate-Term Tax-Exempt Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited)
Six Months
Ended
September 30, 2007 | | | Year Ended March 31, | |
| Shares | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 8.63 | | | $ | 8.55 | | | $ | 8.71 | | | $ | 8.97 | | | $ | 9.12 | | | $ | 8.74 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.13 | (a) | | | 0.27 | (a) | | | 0.24 | (a) | | | 0.22 | (a) | | | 0.22 | | | | 0.27 | |
Net realized and unrealized gain (loss) on investments | | | (0.02 | ) | | | 0.08 | | | | (0.04 | ) | | | (0.17 | ) | | | 0.14 | | | | 0.51 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.11 | | | | 0.35 | | | | 0.20 | | | | 0.05 | | | | 0.36 | | | | 0.78 | |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.13 | ) | | | (0.27 | ) | | | (0.24 | ) | | | (0.22 | ) | | | (0.22 | ) | | | (0.27 | ) |
From net realized gains | | | — | | | | — | | | | (0.12 | ) | | | (0.09 | ) | | | (0.29 | ) | | | (0.13 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | (0.13 | ) | | | (0.27 | ) | | | (0.36 | ) | | | (0.31 | ) | | | (0.51 | ) | | | (0.40 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 8.61 | | | $ | 8.63 | | | $ | 8.55 | | | $ | 8.71 | | | $ | 8.97 | | | $ | 9.12 | |
Total return (b)(c) | | | 1.34 | (d) | | | 4.09 | % | | | 2.25 | % | | | 0.52 | % | | | 4.06 | % | | | 8.96 | % |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (e) | | | 0.80 | %(f) | | | 0.80 | % | | | 0.80 | % | | | 0.80 | % | | | 0.68 | % | | | 0.67 | % |
Waiver/Reimbursement | | | 0.16 | %(f) | | | 0.19 | % | | | 0.18 | % | | | 0.18 | % | | | 0.05 | % | | | 0.05 | % |
Net investment income (e) | | | 3.14 | %(f) | | | 3.09 | % | | | 2.71 | % | | | 2.46 | % | | | 2.41 | % | | | 2.96 | % |
Portfolio turnover rate | | | 4 | %(d) | | | 51 | % | | | 83 | % | | | 15 | % | | | 42 | % | | | 43 | % |
Net assets, end of period (000’s) | | $ | 141,058 | | | $ | 141,454 | | | $ | 131,026 | | | $ | 138,253 | | | $ | 178,107 | | | $ | 187,400 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (c) | Total return at net asset value assuming all distributions reinvested. |
| (e) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
68
Financial Highlights – Short-Term Government Securities Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited)
Six Months
Ended
September 30, 2007 | | | Year Ended March 31, | |
| Shares | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 6.97 | | | $ | 6.92 | | | $ | 7.00 | | | $ | 7.22 | | | $ | 7.31 | | | $ | 7.11 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.15 | (a) | | | 0.25 | (a) | | | 0.20 | (a) | | | 0.18 | (a) | | | 0.16 | | | | 0.26 | |
Net realized and unrealized gain (loss) on investments and futures contracts | | | 0.03 | | | | 0.08 | | | | (0.04 | ) | | | (0.18 | ) | | | (0.03 | ) | | | 0.25 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.18 | | | | 0.33 | | | | 0.16 | | | | — | | | | 0.13 | | | | 0.51 | |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.15 | ) | | | (0.28 | ) | | | (0.24 | ) | | | (0.22 | ) | | | (0.20 | ) | | | (0.26 | ) |
From net realized gains | | | — | | | | — | | | | — | | | | — | | | | (0.02 | ) | | | (0.05 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | (0.15 | ) | | | (0.28 | ) | | | (0.24 | ) | | | (0.22 | ) | | | (0.22 | ) | | | (0.31 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 7.00 | | | $ | 6.97 | | | $ | 6.92 | | | $ | 7.00 | | | $ | 7.22 | | | $ | 7.31 | |
Total return (b)(c) | | | 2.57 | %(d) | | | 4.88 | % | | | 2.36 | % | | | 0.01 | % | | | 1.90 | % | | | 7.27 | % |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (e) | | | 0.74 | %(f) | | | 0.75 | % | | | 0.65 | % | | | 0.60 | % | | | 0.53 | % | | | 0.49 | % |
Waiver/Reimbursement | | | 0.05 | %(f) | | | 0.04 | % | | | 0.12 | % | | | 0.19 | % | | | 0.14 | % | | | 0.15 | % |
Net investment income (e) | | | 4.17 | %(f) | | | 3.65 | % | | | 2.83 | % | | | 2.57 | % | | | 2.26 | % | | | 3.22 | % |
Portfolio turnover rate | | | 34 | %(d) | | | 128 | % | | | 118 | % | | | 106 | % | | | 231 | % | | | 170 | % |
Net assets, end of period (000’s) | | $ | 255,894 | | | $ | 258,019 | | | $ | 339,167 | | | $ | 402,518 | | | $ | 469,218 | | | $ | 499,519 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (c) | Total return at net asset value assuming all distributions reinvested. |
| (e) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
69
Financial Highlights – Short-Term Tax-Exempt Securities Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited)
Six Months
Ended
September 30, 2007 | | | Year Ended March 31, | |
| Shares | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 7.10 | | | $ | 7.08 | | | $ | 7.13 | | | $ | 7.22 | | | $ | 7.20 | | | $ | 7.17 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.11 | (a) | | | 0.21 | (a) | | | 0.14 | (a) | | | 0.09 | (a) | | | 0.08 | | | | 0.12 | |
Net realized and unrealized gain (loss) on investments | | | 0.02 | | | | 0.02 | | | | (0.05 | ) | | | (0.09 | ) | | | 0.02 | | | | 0.03 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.13 | | | | 0.23 | | | | 0.09 | | | | — | | | | 0.10 | | | | 0.15 | |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.11 | ) | | | (0.21 | ) | | | (0.14 | ) | | | (0.09 | ) | | | (0.08 | ) | | | (0.12 | ) |
From net realized gains | | | — | | | | — | | | | — | | | | — | (b) | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | (0.11 | ) | | | (0.21 | ) | | | (0.14 | ) | | | (0.09 | ) | | | (0.08 | ) | | | (0.12 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 7.12 | | | $ | 7.10 | | | $ | 7.08 | | | $ | 7.13 | | | $ | 7.22 | | | $ | 7.20 | |
Total return (c)(d) | | | 1.80 | %(e) | | | 3.22 | % | | | 1.33 | % | | | (0.01 | )% | | | 1.40 | % | | | 2.04 | % |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (f) | | | 0.60 | %(g) | | | 0.60 | % | | | 0.60 | % | | | 0.60 | % | | | 0.47 | % | | | 0.46 | % |
Waiver/Reimbursement | | | 0.21 | %(g) | | | 0.20 | % | | | 0.17 | % | | | 0.16 | % | | | 0.12 | % | | | 0.12 | % |
Net investment income (f) | | | 3.00 | %(g) | | | 2.89 | % | | | 1.97 | % | | | 1.21 | % | | | 1.12 | % | | | 1.57 | % |
Portfolio turnover rate | | | 4 | %(e) | | | 38 | % | | | 111 | % | | | 10 | % | | | 99 | % | | | 31 | % |
Net assets, end of period (000’s) | | $ | 100,682 | | | $ | 104,095 | | | $ | 133,211 | | | $ | 239,060 | | | $ | 360,604 | | | $ | 291,282 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Amount represents less than $0.01 per share. |
| (c) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (d) | Total return at net asset value assuming all distributions reinvested. |
| (f) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
70
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS
September 30, 2007 (Unaudited)
Note 1. Organization
Excelsior Funds, Inc. (“Excelsior Fund”) and Excelsior Tax-Exempt Funds, Inc. (“Excelsior Tax-Exempt Fund”) are each organized as a Maryland Corporation. Excelsior Funds Trust (the “Trust”) is organized as a Delaware business trust. Excelsior Fund, Excelsior Tax-Exempt Fund and the Trust are registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as open-end management investment companies. Information presented in these financial statements pertains to the following funds (individually referred to as a “Fund”, collectively referred to as the “Funds”):
Excelsior Fund:
Core Bond Fund
Intermediate-Term Bond Fund
Short-Term Government Securities Fund
Excelsior Tax-Exempt Fund:
California Short-Intermediate Term Tax-Exempt Income Fund
Intermediate-Term Tax-Exempt Fund
Long-Term Tax-Exempt Fund
New York Intermediate-Term Tax-Exempt Fund
Short-Term Tax-Exempt Securities Fund
The Trust:
High Yield Fund
Each Fund is diversified, with the exception of California Short-Intermediate Term Tax-Exempt Income Fund and New York Intermediate-Term Tax-Exempt Fund, each of which is non-diversified.
Investment Objectives
California Short-Intermediate Term Tax-Exempt Income Fund seeks to provide California investors with as high a level of current interest income exempt from federal income tax and, to the extent possible, from California state personal income tax as is consistent with the preservation of capital and relative stability of principal. Core Bond Fund seeks high current income consistent with what is believed to be prudent risk of capital. High Yield Fund seeks a high level of current income as its primary objective and may also consider the potential for capital appreciation as a secondary objective when consistent with its primary objective. Intermediate-Term Bond Fund seeks as high a level of current interest income as is consistent with relative stability of principal. Intermediate-Term Tax-Exempt Fund seeks as high a level of current interest income exempt from federal income taxes as is consistent with relative stability of principal. Long-Term Tax-Exempt Fund seeks to maximize current interest income exempt from federal income taxes. New York Intermediate-Term Tax-Exempt Fund seeks to provide New York investors with as high a level of current interest income exempt from federal income tax and, to the extent possible, from New York State and New York City personal income taxes as is consistent with relative stability of principal. Short-Term Government Securities Fund seeks a high level of current income consistent with stability of principal. Short-Term Tax-Exempt Securities Fund seeks as high a level of current interest income exempt from federal income taxes as is consistent with relative stability of principal.
71
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS—(continued)
September 30, 2007 (Unaudited)
Fund Shares
Excelsior Fund is authorized to issue up to 42.5 billion shares of common stock with a par value of $0.001 per share. Authorized capital currently offered for each Fund is as follows: 1.5 billion shares of Intermediate-Term Bond Fund; 1.0 billion shares of Short-Term Government Securities Fund; and 1.25 billion shares of Core Bond Fund.
Excelsior Tax-Exempt Fund is authorized to issue up to 24 billion shares of common stock with a par value of $0.001 per share. Authorized capital currently offered for each Fund is as follows: 1.5 billion shares each of California Short-Intermediate Term Tax-Exempt Income Fund, Intermediate-Term Tax-Exempt Fund, Long-Term Tax-Exempt Fund, New York Intermediate-Term Tax-Exempt Fund and Short-Term Tax-Exempt Securities Fund.
The Trust may issue an unlimited number of shares of beneficial interest of each class of each Fund, with a par value of $0.00001.
California Short-Intermediate Term Tax-Exempt Income Fund, Intermediate-Term Bond Fund, Intermediate-Term Tax-Exempt Fund, Long-Term Tax-Exempt Fund, New York Intermediate-Term Tax-Exempt Fund, Short-Term Government Securities Fund and Short-Term Tax-Exempt Securities Fund offer one class of shares: Shares. High Yield Fund offers two classes of shares: Shares and Institutional Shares. Core Bond Fund offers three classes of shares: Shares, Institutional Shares and Retirement Shares. The financial highlights of the Institutional Shares and Retirement Shares of the Funds are presented separately.
Shares, Institutional Shares and Retirement Shares are offered continuously at net asset value. There are certain restrictions on the purchase of Institutional Shares and Retirement Shares, as described in the Funds’ prospectuses.
Note 2. Significant Accounting Policies
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Certain ratios have been reclassified on the Financial Highlights to conform to the current period presentation. The changes have no effect on the ratios. The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements.
Security Valuation
Debt securities generally are valued by pricing services approved by the Board of Directors with regard to Excelsior Fund and Excelsior Tax-Exempt Fund, and the Board of Trustees with regard to the Trust, based upon market transactions for normal, institutional-size trading units of similar securities.
72
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS—(continued)
September 30, 2007 (Unaudited)
The services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. Debt securities for which quotations are readily available are valued at an over-the-counter or exchange bid quotation. Certain debt securities, which tend to be more thinly traded and of lesser quality, are priced based on fundamental analysis of the financial condition of the issuer and the estimated value of any collateral. Valuations developed through pricing techniques may vary from the actual amounts realized upon sale of the securities, and the potential variation may be greater for those securities valued using fundamental analysis.
Equity securities are valued at the last sale price on the principal exchange on which they trade, except for securities traded on the NASDAQ, which are valued at the NASDAQ official close price. Unlisted securities or listed securities for which there were no sales during the day are valued at the closing bid price on such exchanges or over-the-counter markets.
Short-term debt obligations maturing within 60 days are valued at amortized cost, which approximates market value.
Investments in other open-end investment companies are valued at net asset value.
Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
Options are valued at the last reported sale price, or in the absence of a sale, the mean between the last quoted bid and ask price.
Swap agreements are stated at fair value.
Investments for which market quotations are not readily available, or quotations which management believes are not appropriate are valued at “fair value” as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Directors with regard to Excelsior Fund and Excelsior Tax-Exempt Fund, and the Board of Trustees with regard to the Trust. If a security is valued at fair value such value is likely to be different from the last quoted market price for the security.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS 157”), was issued. SFAS 157 is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is evaluating the impact the application of SFAS 157 will have on the Funds’ financial statement disclosures.
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
73
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS—(continued)
September 30, 2007 (Unaudited)
Futures Contracts
Each Fund may invest in futures contracts to gain or reduce exposure to particular securities or segments of the bond markets. Futures contracts are financial instruments whose values depend on, or are derived from, the value of the underlying security, index or currency. The Funds may use futures contracts for both hedging and non-hedging purposes, such as to adjust the Funds’ sensitivity to changes in interest rates, or to offset a potential loss in one position by establishing an opposite position. The Funds typically use futures contracts in an effort to achieve economic exposure similar to that which they could have achieved through the purchase and sale of fixed income securities more efficiently.
The use of futures contracts involves certain risks, which include: (1) imperfect correlation between the price movement of the instruments and the underlying securities, (2) inability to close out positions due to differing trading hours, or the temporary absence of a liquid market, for either the instrument or the underlying securities, and (3) an inaccurate prediction by the Funds’ investment advisor of the future direction of interest rates. Any of these risks may involve amounts exceeding the variation margin recorded in the Funds’ Statements of Assets and Liabilities at any given time.
Upon entering into a futures contract, a Fund deposits cash or securities with the broker in an amount sufficient to meet the initial margin requirement. Subsequent payments are made or received by the Fund equal to the daily change in the contract value and are recorded as variation margin receivable or payable and offset in unrealized gains or losses. A Fund recognizes a realized gain or loss when the contract is closed or expires.
Options
Certain Funds may write call and put options on securities they own or in which they may invest. Writing put options tends to increase the Funds’ exposure to the underlying instrument. Writing call options tends to decrease the Funds’ exposure to the underlying instrument. When Funds write a call or put option, an amount equal to the premium received is recorded as a liability and subsequently marked-to-market to reflect the current value of the option written. Premiums received from writing options which expire are treated as realized gains. Premiums received from writing options which are exercised or closed are added to the proceeds or offset against the amounts paid on the underlying transaction to determine the realized gain or loss. Each Fund as a writer of an option has no control over whether the underlying security may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the security underlying the written option. There is the risk that the Funds may not be able to enter into a closing transaction because of an illiquid market. The Funds’ custodian will set aside cash or liquid portfolio securities equal to the amount of the written options contract commitment in a separate account.
Certain Funds may also purchase put and call options. Purchasing call options tends to increase the Funds’ exposure to the underlying instrument. Purchasing put options tends to decrease the Funds’ exposure to the underlying instrument. The Funds may pay a premium, which is included in the Funds’ Statements of Assets and Liabilities as an investment and subsequently marked-to-market to reflect the current value of the option. The risk associated with purchasing put and call options is limited to the
74
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS—(continued)
September 30, 2007 (Unaudited)
premium paid. Premiums paid for purchasing options which expire are treated as realized losses. Premiums paid for purchasing options which are exercised or closed are added to the amounts paid or offset against the proceeds on the underlying transaction to determine the realized gain or loss.
Repurchase Agreements
Each Fund may engage in repurchase agreement transactions with institutions that the Funds’ investment advisor has determined are creditworthy. Each Fund, through its custodian, receives delivery of underlying securities collateralizing a repurchase agreement. The investment advisor is responsible for determining that collateral is at least equal, at all times, to the value of the repurchase obligation including interest. A repurchase agreement transaction involves certain risks in the event of default or insolvency of the counterparty. These risks include possible delays or restrictions upon each Fund’s ability to dispose of the underlying securities and a possible decline in the value of the underlying securities during the period while the Fund seeks to assert its rights.
Swap Contracts
Certain Funds may engage in swap transactions such as interest rate swaps, consistent with their investment objectives and policies, to obtain a desired return at a lower cost than if the Funds had invested directly in the asset that yielded the desired return.
Swaps involve the exchange by a Fund with another party of their respective commitments to pay or receive interest or total return throughout the lives of the agreements. The interest to be paid or received on swaps is included in realized gain (loss) on investments. Unrealized gains are reported as an asset and unrealized losses are reported as a liability on the Statements of Assets and Liabilities. A realized gain or loss is recorded upon termination of swap agreements and is equal to the difference between the Fund’s basis in the swap and the proceeds from (or cost of) the closing transaction. Swap agreements are stated at fair value. Notional principal amounts are used to express the extent of involvement in these transactions, but the amounts potentially subject to credit risk are much smaller.
If there is a default by the counterparty to a swap contract, a Fund will be limited to contractual remedies pursuant to the agreements related to the transaction. There is no assurance that the swap contract counterparties will be able to meet their obligations pursuant to the swap contracts or that, in the event of default, a Fund will succeed in pursuing contractual remedies. A Fund thus assumes the risk that it may be delayed in or prevented from obtaining payments owed to it pursuant to the swap contracts.
The use of derivative instruments involves, to varying degrees, elements of market risk in excess of the amount recognized in the Statements of Assets and Liabilities.
Delayed Delivery Securities
Certain Funds may trade securities on other than normal settlement terms, including securities purchased or sold on a “when-issued” basis. This may increase the risk if the other party to the
75
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS—(continued)
September 30, 2007 (Unaudited)
transaction fails to deliver and causes the Funds to subsequently invest at less advantageous prices. Each Fund holds until settlement date, in a segregated account, cash or liquid securities in an amount equal to the delayed delivery commitment.
Treasury Inflation Protected Securities
Certain Funds may invest in Treasury Inflation Protected Securities (“TIPS”). The principal amount of TIPS is adjusted periodically for inflation based on a monthly published index. Interest payments are based on the inflation-adjusted principal at the time the interest is paid.
Loan Participations and Commitments
Certain Funds may invest in loan participations. When a Fund purchases a Loan Participation, the Fund typically enters into a contractual relationship with the lender or third party selling such Participation (“Selling Participant”), but not the Borrower. As a result, the Fund assumes the credit risk of the Borrower, Selling Participant and any other persons interpositioned between the Fund and the Borrower (“Intermediate Participants”). The Fund may not directly benefit from the collateral supporting the Senior Loan which it has purchased from the Selling Participant.
Income Recognition
Interest income is recorded on the accrual basis. Original issue discount is accreted to interest income over the life of the security with a corresponding increase in the cost basis. Premium and discount are amortized and accreted, respectively, on debt securities. Corporate actions and dividend income are recorded on the ex-date. The value of additional securities received as an income payment is recorded as income and as the cost basis of such securities.
Determination of Class Net Asset Value
All income, expenses (other than class-specific expenses, as shown on the Statements of Operations) and realized and unrealized gains (losses) are allocated to each class of a Fund on a daily basis for purposes of determining the net asset value of each class. Income and expenses are allocated to each class based on the settled shares method, while realized and unrealized gains (losses) are allocated based on the relative net assets of each class.
Federal Income Tax Status
Each Fund intends to qualify each year as a “regulated investment company” under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its taxable or tax-exempt income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, each Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that each Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
76
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS—(continued)
September 30, 2007 (Unaudited)
Distributions to Shareholders
Dividends from net investment income are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually for all Funds. Certain Funds are managed using investment strategies that are designed to reduce (but not eliminate) the Funds’ payment of taxable distributions to shareholders. From time to time, these Funds expect to distribute taxable income and capital gains. Distributions to shareholders are recorded on ex-date.
Indemnification
In the normal course of business, each Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. A Fund’s maximum exposure under these arrangements is unknown because this would involve future claims against the Fund. Also, under the organizational documents of Excelsior Fund, Excelsior Tax-Exempt Fund, and the Trust, and by contract, the Board of Directors with regard to Excelsior Fund and Excelsior Tax-Exempt Fund, and the Board of Trustees with regard to the Trust, are indemnified against certain liabilities that may arise out of actions relating to their duties to Excelsior Fund, Excelsior Tax-Exempt Fund, and the Trust. However, based on experience, the Funds expect the risk of loss due to these representations, warranties and indemnities to be minimal.
Note 3. Federal Income Tax Information
The tax character of distributions paid during the year ended March 31, 2007 was as follows:
| | | | | | | | | |
| | | Tax-Exempt
Income | | Ordinary
Income* | | Long-Term
Capital Gains |
California Short-Intermediate Term Tax-Exempt Income Fund | | $ | 1,958,947 | | $ | — | | $ | 255,865 |
Core Bond Fund | | | — | | | 17,474,254 | | | — |
High Yield Fund | | | — | | | 8,535,124 | | | — |
Intermediate-Term Bond Fund | | | — | | | 19,470,592 | | | — |
Intermediate-Term Tax-Exempt Fund | | | 12,244,881 | | | 40,388 | | | 730,630 |
Long-Term Tax-Exempt Fund | | | 2,109,421 | | | 22,291 | | | 392,494 |
New York Intermediate-Term Tax-Exempt Fund | | | 4,137,826 | | | — | | | — |
Short-Term Government Securities Fund | | | — | | | 11,619,856 | | | — |
Short-Term Tax-Exempt Securities Fund | | | 3,424,308 | | | — | | | — |
| | * | For tax purposes short-term capital gains distributions, if any, are considered ordinary income distributions. |
77
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS—(continued)
September 30, 2007 (Unaudited)
Unrealized appreciation and depreciation at September 30, 2007, based on cost of investments for federal income tax purposes, was:
| | | | | | | | | | | |
| | | Unrealized
Appreciation | | Unrealized
Depreciation | | | Net
Unrealized
Appreciation
(Depreciation) | |
California Short-Intermediate Term Tax-Exempt Income Fund | | $ | 245,815 | | $ | (178,499 | ) | | $ | 67,316 | |
Core Bond Fund | | | 9,116,518 | | | (9,950,472 | ) | | | (833,954 | ) |
High Yield Fund | | | 2,941,577 | | | (2,393,339 | ) | | | 548,238 | |
Intermediate-Term Bond Fund | | | 8,342,924 | | | (9,519,142 | ) | | | (1,176,218 | ) |
Intermediate-Term Tax-Exempt Fund | | | 4,860,342 | | | (1,779,102 | ) | | | 3,081,240 | |
Long-Term Tax-Exempt Fund | | | 450,910 | | | (645,517 | ) | | | (194,607 | ) |
New York Intermediate-Term Tax-Exempt Fund | | | 1,128,422 | | | (199,159 | ) | | | 929,263 | |
Short-Term Government Securities Fund | | | 1,780,367 | | | (927,026 | ) | | | 853,341 | |
Short-Term Tax-Exempt Securities Fund | | | 158,979 | | | (64,965 | ) | | | 94,014 | |
The following capital loss carryforwards, determined as of March 31, 2007, may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code:
| | | | | | | | | | | | | | | | | | | | | |
| | | Expires March 31, | | |
| | | 2010 | | 2011 | | 2012 | | 2013 | | 2014 | | 2015 | | Total |
Core Bond Fund | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 1,303,908 | | $ | 330,101 | | $ | 1,634,009 |
High Yield Fund | | | 440,234 | | | 17,456,849 | | | 40,103,941 | | | 1,461,417 | | | 6,017,018 | | | — | | | 65,479,459 |
Intermediate-Term Bond Fund | | | — | | | — | | | — | | | — | | | 481,322 | | | 4,646,979 | | | 5,128,301 |
Intermediate-Term Tax-Exempt Fund | | | — | | | — | | | — | | | — | | | — | | | 789,548 | | | 789,548 |
New York Intermediate-Term Tax-Exempt Fund | | | — | | | — | | | — | | | — | | | 165,776 | | | 580,517 | | | 746,293 |
Short-Term Government Securities Fund | | | — | | | — | | | 1,481,228 | | | 4,260,524 | | | 4,970,323 | | | 4,357,008 | | | 15,069,083 |
Short-Term Tax-Exempt Securities Fund | | | — | | | — | | | — | | | 287,228 | | | 518,076 | | | 1,968,777 | | | 2,774,081 |
The Funds adopted Financial Accounting Standards Board (“FASB”) Interpretation No. 48, Accounting for Uncertainty in Income Taxes- an Interpretation of FASB Statement No. 109 (“FIN 48”) effective September 28, 2007. FIN 48 requires management to determine whether a tax position of a Fund is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that exceeds fifty percent of the amount likely to be realized upon ultimate settlement. FIN 48 must be applied to all existing tax positions upon initial adoption and the cumulative effect, if any, is to be reported as an adjustment to net assets. Management has evaluated the known implications of FIN 48 on its computation of net assets for each
78
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS—(continued)
September 30, 2007 (Unaudited)
Fund. As a result of this evaluation, management believes that FIN 48 will not have any effect on the Funds’ financial statements. However, management’s conclusions regarding FIN 48 may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation guidance from the FASB, new tax laws, regulations, and administrative interpretations (including relevant court decisions).
Note 4. Fees and Compensation Paid to Affiliates
Investment Advisory Fee
United States Trust Company, National Association, through its separate identifiable division, U.S. Trust New York Asset Management Division (“USTNA”), or UST Advisers, Inc. (“USTA” and together with USTNA, the “Advisor”) is the investment advisor to the Funds. USTNA is a wholly owned subsidiary of U.S. Trust Corporation (“U.S. Trust”). USTA is a wholly owned subsidiary of USTNA. Effective July 1, 2007, U.S. Trust became a wholly owned subsidiary of the Bank of America Corporation (“BOA”). Prior to July 1, 2007, U.S. Trust was a wholly owned subsidiary of The Charles Schwab Corporation.
For its services, the Advisor receives an investment advisory fee, computed daily and paid monthly, based on each Fund’s average daily net assets at the following annual rates:
| | |
| | | Annual Fee Rate |
California Short-Intermediate Term Tax-Exempt Income Fund | | 0.50% |
Core Bond Fund | | 0.65% |
High Yield Fund | | 0.80% |
Intermediate-Term Bond Fund | | 0.35% |
Intermediate-Term Tax-Exempt Fund | | 0.35% |
Long-Term Tax-Exempt Fund | | 0.50% |
New York Intermediate-Term Tax-Exempt Fund | | 0.50% |
Short-Term Government Securities Fund | | 0.30% |
Short-Term Tax-Exempt Securities Fund | | 0.30% |
Administration Fee
Effective July 1, 2007, Columbia Management Advisors, LLC (“Columbia”) serves as the administrator of the Funds. Columbia is an indirect, wholly owned subsidiary of BOA. Prior to July 1, 2007, USTA and BISYS Fund Services Ohio, Inc. (“BISYS”) served as the administrators of the Funds under the same fee structure.
79
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS—(continued)
September 30, 2007 (Unaudited)
Columbia is entitled to an administration fee, computed daily and paid monthly, based on the combined aggregate average daily net assets of Excelsior Fund, Excelsior Tax-Exempt Fund and the Trust (excluding Emerging Markets Fund, International Fund, International Equity Fund and Pacific/Asia Fund, series of Excelsior Fund or the Trust), at the following annual rates:
| | |
Average Daily Net Assets | | Annual Fee Rate |
First $200 million | | 0.200% |
Next $200 million | | 0.175% |
In excess of $400 million | | 0.150% |
Effective September 17, 2007, Columbia received an administration fee at the annual rates listed above less the fees payable by the Funds as described under the Pricing and Bookkeeping Fees note below.
Effective July 1, 2007, Columbia voluntarily agreed to waive administration fees for each Fund at the annual rate of 0.05% of average daily net assets. Columbia, at its discretion, may revise or discontinue this arrangement at any time. For the six months ended September 30, 2007, the effective administration fee rate was 0.13% of each Fund’s average daily net assets before the reduction for pricing and bookkeeping fees and net of voluntary expense waivers.
For the six months ended September 30, 2007, the total amounts paid and payable to affiliates under this agreement were as follows:
| | | | | | |
| | | Amounts
Paid to
Affiliates | | Amounts
Payable to
Affiliates |
California Short-Intermediate Term Tax-Exempt Income Fund | | $ | 27,034 | | $ | 1,335 |
Core Bond Fund | | | 305,789 | | | 36,851 |
High Yield Fund | | | 58,800 | | | 4,158 |
Intermediate-Term Bond Fund | | | 251,722 | | | 28,740 |
Intermediate-Term Tax-Exempt Fund | | | 216,922 | | | 25,173 |
Long-Term Tax-Exempt Fund | | | 33,792 | | | 2,437 |
New York Intermediate-Term Tax-Exempt Fund | | | 76,201 | | | 7,727 |
Short-Term Government Securities Fund | | | 139,537 | | | 15,560 |
Short-Term Tax-Exempt Securities Fund | | | 54,770 | | | 5,028 |
Pricing and Bookkeeping Fees
Effective September 17, 2007, the Funds entered into a Financial Reporting Services Agreement (the “Financial Reporting Services Agreement”) with State Street Bank & Trust Company (“State Street”) and Columbia pursuant to which State Street provides financial reporting services to the Funds. Also effective September 17, 2007, the Funds entered into an Accounting Services Agreement with State Street and Columbia (collectively with the Financial Reporting Services Agreement, the “State Street Agreements”) pursuant to which State Street provides accounting services to the Funds. Under the State Street
80
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS—(continued)
September 30, 2007 (Unaudited)
Agreements, each Fund pays State Street an annual fee of $38,000 paid monthly, plus a monthly fee based on an annualized percentage rate of average daily net assets of each Fund for the month. The aggregate fee for each fund will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). The Funds also reimburse State Street for certain out-of-pocket expenses and charges.
Effective September 17, 2007, the Funds entered into a Pricing and Bookkeeping Oversight and Services Agreement (the “Services Agreement”) with Columbia. Under the Services Agreement, Columbia provides services related to Fund expenses and the requirements of the Sarbanes-Oxley Act of 2002, and provides oversight of the accounting and financial reporting services provided by State Street. The Funds reimburse Columbia for out-of-pocket expenses and direct internal costs relating to accounting oversight and for services relating to Fund expenses and the requirements of the Sarbanes-Oxley Act of 2002.
Prior to July 1, 2007, BISYS was responsible for providing fund accounting and financial reporting services to the Funds, and USTA was responsible for oversight of these functions. On July 1, 2007 Columbia assumed responsibility from USTA for oversight of the activities performed by BISYS. BISYS was responsible for providing services to the Funds through September 16, 2007.
For the six months ended September 30, 2007, the total amounts paid and payable to affiliates for each Fund under these agreements were $505 and $505, respectively.
Transfer Agent Fee
Effective September 17, 2007, Columbia Management Services, Inc. (the “Transfer Agent”), an affiliate of Columbia and an indirect, wholly owned subsidiary of BOA, provides shareholder services to the Funds and has contracted with Boston Financial Data Services (“BFDS”) to serve as sub-transfer agent. Prior to September 17, 2007, BFDS served as the transfer agent for the Funds’ shares.
The Transfer Agent is entitled to receive a fee for its services, paid monthly, at the annual rate of $17.00 per open account plus reimbursement of certain sub-transfer agent fees paid by the Transfer Agent (exclusive of BFDS fees), calculated based on assets held in omnibus accounts and intended to recover the cost of payments to other parties (including affiliates of BOA) for services to those accounts. The Transfer Agent pays the fees of BFDS for services as sub-transfer agent and is not entitled to reimbursement for such fees from the Funds. The Transfer Agent may also retain, as additional compensation for its services, fees for wire, telephone and redemption orders, IRA trustee agent fees and account transcript fees due the Transfer Agent from shareholders of the Funds and credits (net of bank charges) earned with respect to balances in accounts the Transfer Agent maintains in connection with its services to the Funds. The Transfer Agent also receives reimbursement for certain out-of-pocket expenses.
81
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS—(continued)
September 30, 2007 (Unaudited)
For the period September 17, 2007 through September 30, 2007, the total amounts paid and payable to affiliates by the Funds under this agreement were as follows:
| | | | | | |
| | | Amounts
Paid to
Affiliates | | Amounts
Payable to
Affiliates |
California Short-Intermediate Term Tax-Exempt Income Fund | | $ | 45 | | $ | 45 |
Core Bond Fund | | | 4,165 | | | 4,165 |
High Yield Fund | | | 511 | | | 511 |
Intermediate-Term Bond Fund | | | 428 | | | 428 |
Intermediate-Term Tax-Exempt Fund | | | 216 | | | 216 |
Long-Term Tax-Exempt Fund | | | 259 | | | 259 |
New York Intermediate-Term Tax-Exempt Fund | | | 72 | | | 72 |
Short-Term Government Securities Fund | | | 2,888 | | | 2,888 |
Short-Term Tax-Exempt Securities Fund | | | 80 | | | 80 |
Shareholder Servicing Fee
The Funds have entered into shareholder servicing agreements with various service organizations which include USTA. The Funds are permitted to pay a fee of up to 0.25% of the average daily net assets of the Funds’ shares held by each service organization’s customers to such organizations for providing shareholder and administrative services to their customers who hold shares of the Funds.
For the six months ended September 30, 2007, the total amounts paid and payable to affiliates by the Funds under these agreements were as follows:
| | | | | | |
| | | Amounts Paid
to Affiliates | | Amounts Payable
to Affiliates |
California Short-Intermediate Term Tax-Exempt Income Fund | | $ | 55,552 | | $ | 8,619 |
Core Bond Fund | | | 242,575 | | | 40,453 |
High Yield Fund | | | 110,021 | | | 14,769 |
Intermediate-Term Bond Fund | | | 529,244 | | | 85,340 |
Intermediate-Term Tax-Exempt Fund | | | 475,307 | | | 77,441 |
Long-Term Tax-Exempt Fund | | | 66,976 | | | 10,900 |
New York Intermediate-Term Tax-Exempt Fund | | | 166,745 | | | 27,372 |
Short-Term Government Securities Fund | | | 229,938 | | | 36,808 |
Short-Term Tax-Exempt Securities Fund | | | 120,790 | | | 19,574 |
Distribution and Service Fees
Effective September 17, 2007, Columbia Management Distributors, Inc. (the “Distributor”) serves as distributor of the Funds’ shares. Through July 31, 2007, BISYS Fund Services Limited Partnership (“BISYS Fund Services”) served as distributor of the Funds’ shares. On August 1, 2007, Foreside Distribution Services, L.P. served as distributor until September 16, 2007.
82
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS—(continued)
September 30, 2007 (Unaudited)
Certain Funds have adopted a Distribution Plan (the “Distribution Plan”) pursuant to Rule 12b-1 under the 1940 Act, which permits the Funds to compensate and/or reimburse the Distributor monthly for services that are intended to result in the sale of certain classes’ shares. High Yield Fund, which has adopted a Distribution Plan for the Shares Class of the Fund, may pay distribution fees in an amount not to exceed the annual rate of 0.25% of the average daily net assets applicable to the Shares Class. Fees are not currently being paid under the Distribution Plan with respect to the Shares Class. Core Bond Fund, which has adopted a Distribution Plan for the Retirement Shares of the Fund, may pay distribution fees in an amount not to exceed the annual rate at 0.50% of the average daily net assets applicable to the Fund’s Retirement Shares.
Fees Paid to Officers and Trustees
The Board of Trustees/Directors may include people who are officers and/or trustees of other fund families affiliated with the investment advisor. The Funds did not pay any of the interested persons for their service as Trustees/Directors, but did pay non-interested persons (independent trustees), as noted in the Statements of Operations.
Expense Limits and Fee Waivers
The Advisor has contractually agreed to waive fees or reimburse expenses through July 31, 2008, so that the expenses incurred by each Fund (exclusive of brokerage commissions, interest, taxes and extraordinary expenses, but inclusive of custodial charges relating to overdrafts, if any), after giving effect to any balance credits from the Funds’ custodian, will not exceed the following annual rates, based on each Fund’s average daily net assets:
| | | | | | | | | |
| | | Shares | | | Institutional Shares | | | Retirement Shares | |
California Short-Intermediate Term Tax-Exempt Income Fund | | 0.50 | % | | — | | | — | |
Core Bond Fund | | 0.90 | % | | 0.65 | % | | 1.40 | % |
High Yield Fund | | 1.05 | % | | 0.80 | % | | — | |
Intermediate-Term Bond Fund | | 0.75 | % | | — | | | — | |
Intermediate-Term Tax-Exempt Fund | | 0.65 | % | | — | | | — | |
Long-Term Tax-Exempt Fund | | 0.80 | % | | — | | | — | |
New York Intermediate-Term Tax-Exempt Fund | | 0.80 | % | | — | | | — | |
Short-Term Government Securities Fund | | 0.75 | % | | — | | | — | |
Short-Term Tax-Exempt Securities Fund | | 0.60 | % | | — | | | — | |
On June 12, 2006, High Yield Fund and Intermediate-Term Bond Fund filed a lawsuit in connection with the bankruptcy of a security in which the Funds had invested. The ongoing legal expenses associated with the lawsuit are paid for by the Funds, but due to the expense limitation agreements currently in place, a significant portion of these legal expenses are being reimbursed by the Advisor. The Board has agreed that, should the Funds be successful in the lawsuit or otherwise receive compensation
83
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS—(continued)
September 30, 2007 (Unaudited)
related to settling the case, the Advisor may request and receive reimbursement for such legal expenses that have been reimbursed to the Funds, to the extent that proceeds are available to cover such expenses. At this time, the outcome of the lawsuit cannot be determined.
Custody Credits
Each Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as a reduction of total expenses in the Statements of Operations. The Funds could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if they had not entered into such an agreement.
Note 5. Portfolio Information
For the six months ended September 30, 2007, the cost of purchases and proceeds from sales of securities, excluding short-term obligations, were as follows:
| | | | | | | | | | | | |
| | | U.S. Government Securities | | Other Investment Securities |
| | | Purchases | | Sales | | Purchases | | Sales |
California Short-Intermediate Term Tax-Exempt Income Fund | | $ | — | | $ | — | | $ | 2,107,940 | | $ | 9,122,917 |
Core Bond Fund | | | 158,631,256 | | | 133,547,501 | | | 89,571,636 | | | 26,305,748 |
High Yield Fund | | | — | | | — | | | 26,290,368 | | | 43,102,055 |
Intermediate-Term Bond Fund | | | 250,897,271 | | | 181,259,002 | | | 42,418,407 | | | 19,915,784 |
Intermediate-Term Tax-Exempt Fund | | | — | | | — | | | 65,440,238 | | | 53,391,030 |
Long-Term Tax-Exempt Fund | | | — | | | — | | | 7,281,510 | | | 8,214,190 |
New York Intermediate-Term Tax-Exempt Fund | | | — | | | — | | | 13,068,865 | | | 5,700,385 |
Short-Term Government Securities Fund | | | 113,879,464 | | | 77,247,568 | | | 10,256,903 | | | 7,292,932 |
Short-Term Tax-Exempt Securities Fund | | | — | | | — | | | 6,442,021 | | | 4,276,520 |
Note 6. Line of Credit
Effective September 17, 2007, the Funds and other affiliated funds participate in a $150,000,000 uncommitted, unsecured line of credit provided by State Street. Borrowings are available for temporary or emergency purposes. Interest on the uncommitted line of credit is charged to each participating fund based on the fund’s borrowings at a variable rate per annum equal to the Federal Funds Rate plus a spread, as determined and quoted by State Street at the time of the request for a loan.
84
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS—(continued)
September 30, 2007 (Unaudited)
Prior to September 17, 2007, the Funds participated in a $150,000,000 uncommitted line of credit provided by JPMorgan Chase, under similar borrowing terms.
For the six months ended September 30, 2007, the Funds did not borrow under this agreement.
Note 7. Redemption Fees
High Yield Fund may assess, subject to limited exceptions, a 2.00% redemption fee on shares that are redeemed within 60 days of their purchase. The redemption fees, which are retained by the Fund, are accounted for as an addition to paid-in capital and are allocated to each class based on the relative net assets at the time of the redemption. Prior to August 1, 2007, the redemption fee was assessed, subject to limited exceptions, on Fund shares redeemed within 30 days of their purchase. For the six months ended September 30, 2007, High Yield Fund did not assess redemption fees.
Note 8. Concentration of Ownership
As of September 30, 2007, the Funds had shareholders that held greater than 5% of the shares outstanding. Subscription and redemption activity of these accounts may have a significant effect on the operations of the Funds. The percentage of shares of beneficial interest outstanding held therein are as follows:
| | | | |
| | | Number Of Shareholders | | % of Shares Outstanding Held |
California Short-Intermediate Term Tax-Exempt Income Fund | | 2 | | 88.7 |
Core Bond Fund | | 1 | | 61.1 |
High Yield Fund | | 2 | | 88.7 |
Intermediate-Term Bond Fund | | 1 | | 92.3 |
Intermediate-Term Tax-Exempt Fund | | 1 | | 90.7 |
Long-Term Tax-Exempt Fund | | 1 | | 74.6 |
New York Intermediate-Term Tax-Exempt Fund | | 1 | | 84.5 |
Short-Term Government Securities Fund | | 2 | | 70.0 |
Short-Term Tax-Exempt Securities Fund | | 1 | | 91.7 |
Note 9. Significant Risks and Contingencies
Municipal Bond Tax Status
Certain Funds purchase municipal securities whose interest, in the opinion of the issuer, is free from federal income tax. There is no assurance that the Internal Revenue Service (IRS) will agree with this opinion. In the event the IRS determines that the issuer does not comply with relevant tax requirements, interest payments from a security could become federally taxable, possibly retroactively to the date the security was issued. As a shareholder of the Funds, you may be required to file an amended tax return as a result.
85
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS—(continued)
September 30, 2007 (Unaudited)
Tax Development Risk
The U.S. Supreme Court has heard an appeal of a state-court decision that might significantly affect how states tax in-state and out-of-state municipal bonds. If the Supreme Court determines that the U.S. Constitution prohibits states from treating the interest income on in-state municipal bonds differently from the income on out-of-state municipal bonds for state income tax purposes, most states likely will revisit the way in which they treat the interest on municipal bonds. This has the potential to increase significantly the amount of state tax paid by shareholders on exempt-interest dividends. This also has the potential to cause decline in the value of the municipal securities held by California Short-Intermediate Term Tax-Exempt Income Fund, Intermediate-Term Tax-Exempt Fund, Long-Term Tax-Exempt Fund, New York Intermediate-Term Tax-Exempt Fund and Short-Term Tax-Exempt Securities Fund which, in turn, would reduce the value of these Funds’ shares. You should consult your tax advisor to discuss the tax consequences of your investment in these Funds.
Concentration of Credit Risk
Certain Funds holds investments that are insured by private insurers who guarantee the payment of principal and interest in the event of default or that are supported by a letter of credit. Each of the Fund’s insurers is rated Aaa by Moody’s Investors Services, Inc. (“Moody’s) or rated AAA by Standard & Poor’s. At September 30, 2007, investments supported by private insurers that represent greater than 5% of the total investments of each Fund were as follows:
| | | | |
| | | Agency | | % of Total Investments |
California Short-Intermediate Term Tax-Exempt Income Fund | | AMBAC | | 16.93 |
| | FGIC | | 16.41 |
| | FSA | | 13.16 |
| | MBIA | | 12.27 |
Intermediate-Term Tax-Exempt Fund | | FSA | | 27.68 |
| | MBIA | | 15.86 |
| | AMBAC | | 9.24 |
| | FGIC | | 6.95 |
Long-Term Tax-Exempt Fund | | FSA | | 24.78 |
| | MBIA | | 9.17 |
| | FGIC | | 8.30 |
| | AMBAC | | 5.27 |
New York Intermediate-Term Tax-Exempt Fund | | AMBAC | | 20.56 |
| | FSA | | 16.12 |
| | MBIA | | 13.28 |
| | FGIC | | 5.89 |
Short-Term Tax-Exempt Securities Fund | | MBIA | | 18.88 |
86
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS—(continued)
September 30, 2007 (Unaudited)
Geographic Concentration
Certain Funds have greater than 5% of their total investments on September 30, 2007 invested in debt obligations issued by an individual state and its political subdivisions, agencies and public authorities and instrumentalities. These Funds are more susceptible to economic and political factors adversely affecting issuers of the state’s or territory’s municipal securities than are municipal bond funds that are not concentrated to the same extent in these issuers.
High Yield Securities
Investing in high-yield securities may involve greater credit risk and considerations not typically associated with investing in U.S. Government bonds and other higher quality fixed income securities. These securities are non-investment grade securities, often referred to as “junk” bonds. Economic downturns may disrupt the high yield market and impair the ability of issuers to repay principal and interest. Also, an increase in interest rates would likely have an adverse impact on the value of such obligations. Moreover, high-yield securities may be less liquid to the extent that there is no established secondary market.
Note 10. Legal Proceedings
United States Trust Company of New York and U.S. Trust Company, N.A. (formerly, co-investment advisers to the Funds, together referred to herein as “U.S. Trust Company”), Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc., and Excelsior Funds Trust (the “Companies”), The Charles Schwab Corporation and several individuals and third parties were named in four fund shareholder class actions and two derivative actions which alleged that U.S. Trust Company, the Companies, and others allowed certain parties to engage in illegal and improper mutual fund trading practices, which allegedly caused financial injury to the shareholders of certain of the Excelsior Funds advised by U.S. Trust Company. Each plaintiff seeks unspecified monetary damages and related equitable relief.
The class and derivative actions described above were transferred to the United States District Court for the District of Maryland for coordinated and consolidated pre-trial proceedings. In November 2005, the Maryland court dismissed many of the plaintiffs’ claims in both the class and derivative actions. The court entered implementing orders on February 24, 2006. All claims against the Companies have been dismissed. Plaintiffs’ claims against U.S. Trust Company and certain individuals under Sections 10(b) and 20(a) of the Securities Exchange Act and Sections 36(b) and 48(a) of the Investment Company Act, however, have not been dismissed. Plaintiffs’ Section 48(a) claims against parent entity U.S. Trust Company and former parent entity The Charles Schwab Corporation also remain.
While the ultimate outcome of these matters cannot be predicted with any certainty at this time, based on currently available information, U.S. Trust Company believes that the likelihood is remote that the pending litigation will have a material adverse financial impact on the Companies, or materially affect the advisers’ ability to provide investment management services to the Companies.
87
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS—(continued)
September 30, 2007 (Unaudited)
Note 11. Business Combinations and Mergers
Under a plan of reorganization adopted by the Trust, all of the assets and liabilities of the Income Fund and Total Return Bond Fund were transferred to the Institutional Shares of Core Bond Fund. The reorganization, which qualified as a tax-free exchange for federal income tax purposes, was completed at the close of business on September 27, 2006. The following is a summary of the shares outstanding, net assets, net asset value per share issued, and unrealized appreciation/depreciation immediately before and after the reorganization.
| | | | | | | | | | | | | |
| | | Before Reorganization | | After Reorganization |
| | | Income Fund | | | Total Return
Bond Fund | | Core Bond
Fund | | Core Bond Fund |
Shares: | | | | | | | | | | | | | |
Shares | | | — | | | | — | | | 32,810,661 | | | 32,810,661 |
Institutional Shares | | | 13,965,104 | | | | 18,165,949 | | | 1,824,521 | | | 26,973,187 |
Retirement Shares | | | — | | | | — | | | 117 | | | 117 |
Net Assets: | | | | | | | | | | | | | |
Shares | | $ | — | | | $ | — | | $ | 294,116,361 | | $ | 294,116,361 |
Institutional Shares | | | 96,434,781 | | | | 129,070,075 | | | 16,360,288 | | | 241,865,144 |
Retirement Shares | | | — | | | | — | | | 1,046 | | | 1,046 |
Net Asset Value: | | | | | | | | | | | | | |
Shares | | $ | — | | | $ | — | | $ | 8.96 | | $ | 8.96 |
Institutional Shares | | | 6.91 | | | | 7.11 | | | 8.97 | | | 8.97 |
Retirement Shares | | | — | | | | — | | | 8.97 | | | 8.97 |
Net unrealized appreciation (depreciation) | | $ | (248,669 | ) | | $ | 617,540 | | $ | 740,329 | | $ | 1,109,200 |
Note 12. Reorganization of the Funds
The Boards of Directors/Trustees of Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust (the “Board”) have approved proposals, described below, that are part of a larger integration of the Excelsior Fund complex and the Columbia Funds complex. Generally, these proposals involve the reorganization of certain Excelsior Funds into newly formed Columbia Funds that will be series of a different legal entity governed by a different board than the Excelsior Funds, and will be managed by Columbia Management Advisors, LLC, an affiliate of the current advisers to the Excelsior Funds. The portfolio managers of the Excelsior Funds immediately before such reorganizations are expected to be the same portfolio managers of the newly formed Columbia Funds immediately after such reorganizations.
Specifically, the Board has approved proposals to reorganize each Excelsior Fund listed in the left column (each, an “Excelsior Fund”) into a corresponding newly formed shell fund listed in the right column below (each, a “Newly Formed Fund”) as shown in the chart below, subject to approval by the shareholders of the Excelsior Fund. If the shareholders of each Excelsior Fund approve the proposal relating to the reorganization of their Fund, all of the assets of the Excelsior Fund will be transferred to
88
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS—(continued)
September 30, 2007 (Unaudited)
the corresponding Newly Formed Fund and shareholders of the Excelsior Fund will receive shares of a designated class of the corresponding Newly Formed Fund in exchange for their shares. For each Excelsior Fund, Shares class and Institutional Shares class, as applicable, will be exchanged for Class Z shares of the corresponding Newly Formed Fund, and Retirement Shares class, as applicable, will be exchanged for Class R shares of the corresponding Newly Formed Fund. Shareholders of each Excelsior Fund are scheduled to vote on the proposal relating to the reorganization of their Fund at a special meeting of shareholders currently expected to be held in the first quarter of 2008. Each reorganization is expected to take place as soon as reasonably practicable following approval at the special meeting.
| | |
Excelsior Fund | | Newly Formed Fund |
Blended Equity Fund | | Columbia Blended Equity Fund |
Emerging Markets Fund | | Columbia Emerging Markets Fund |
Energy and Natural Resources Fund | | Columbia Energy and Natural Resources Fund |
International Fund | | Columbia International Growth Fund |
Large Cap Growth Fund | | Columbia Select Growth Fund |
Pacific/Asia Fund | | Columbia Pacific/Asia Fund |
Small Cap Fund | | Columbia Select Small Cap Fund |
Value & Restructuring Fund | | Columbia Value and Restructuring Fund |
Core Bond Fund | | Columbia Bond Fund |
Intermediate-Term Bond Fund | | Columbia Short-Intermediate Bond Fund |
Equity Opportunities Fund | | Columbia Select Opportunities Fund |
Mid Cap Value & Restructuring Fund | | Columbia Mid Cap Value and Restructuring Fund |
The Board has also approved proposals, described below, that involve the reorganization of certain Excelsior Funds into Columbia Funds that are series of different legal entities governed by a different board than the Excelsior Funds, and are managed by Columbia Management Advisors, LLC.
Specifically, the Board has approved proposals to reorganize each Excelsior Fund listed in the left column (each, an “Acquired Fund”) into a corresponding acquiring fund listed in the right column below (each, an “Acquiring Fund”) as shown in the chart below, subject to approval by the shareholders of the Acquired Fund. If the shareholders of an Acquired Fund approve the proposal relating to the reorganization of their Fund, all of the assets of the Acquired Fund will be transferred to the corresponding Acquiring Fund and shareholders of the Acquired Fund will receive shares of a designated class of the corresponding Acquiring Fund in exchange for their shares. For each Acquired Fund, except the money market funds, Shares class and Institutional Shares class, as applicable, will be exchanged for Class Z shares of the corresponding Acquiring Fund, and Retirement Shares class, as applicable, will be exchanged for Class R shares of the corresponding Acquiring Fund. For each Acquired Fund that is a money market fund, Shares class and Institutional Shares class, as applicable, will be exchanged for Trust Class shares of the corresponding Acquiring Fund. Shareholders of each Acquired Fund are scheduled to vote on the proposal relating to the reorganization of their Fund at a special meeting of shareholders currently expected to be held in the first quarter of 2008, except for Intermediate-Term Tax-Exempt Fund and New York Intermediate-Term Tax-Exempt Fund which are
89
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS—(continued)
September 30, 2007 (Unaudited)
currently expected to be held in the second quarter of 2008. Each reorganization is expected to take place as soon as reasonably practicable following approval at the special meeting.
| | |
Acquired Fund | | Acquiring Fund |
Equity Income Fund | | Columbia Dividend Income Fund |
Real Estate Fund | | Columbia Real Estate Equity Fund |
International Equity Fund | | International Fund |
Short-Term Government Securities Fund | | Columbia Short Term Bond Fund |
Short-Term Tax-Exempt Securities Fund | | Columbia Short Term Municipal Bond Fund |
High Yield Fund | | Columbia High Yield Opportunity Fund |
Long-Term Tax-Exempt Fund | | Columbia Tax-Exempt Fund |
Intermediate-Term Tax-Exempt Fund | | Columbia Intermediate Municipal Bond Fund |
New York Intermediate-Term Tax-Exempt Fund | | Columbia New York Intermediate Municipal Bond Fund |
California Short-Intermediate Term Tax-Exempt Income Fund | | Columbia California Intermediate Municipal Bond Fund |
Treasury Money Fund | | Columbia Government Reserves |
Government Money Fund | | Columbia Government Plus Reserves |
Money Fund | | Columbia Cash Reserves |
Tax-Exempt Money Fund | | Columbia Tax-Exempt Reserves |
New York Tax-Exempt Money Fund | | Columbia New York Tax-Exempt Reserves |
90
APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party to the advisory agreement (the “Independent Directors”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s board of directors or trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the advisory agreement. In addition, the Securities and Exchange Commission (the “SEC”) takes the position that, as part of their fiduciary duties with respect to fund fees, fund boards are required to evaluate the material factors applicable to a decision to approve an investment advisory agreement.
At a meeting held on September 27th and 28th 2007, the Board of Directors/Trustees (the “Board”) of Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust (each a “Company” and, together, the “Companies”), including a majority of the Independent Directors, approved the continuation of the Investment Advisory Agreements (the “Advisory Agreements”) by and between each Company and UST Advisers, Inc. and U.S. Trust New York Asset Management Division, a division of United States Trust Company, National Association (together, “U.S. Trust”) with respect to each series of each Company (each, a “Fund”).
In preparation for the meeting, the Board requested and reviewed a wide variety of materials provided by U.S. Trust and its affiliates, which included information about the operations and personnel of U.S. Trust, as well as the personnel and operations of its affiliates. In this regard, the Board received information about the large mutual fund business of Columbia Management Advisors, LLC and its affiliates (together, “Columbia”), which are, together with U.S. Trust, all under the control of Bank of America Corporation, and how the resources dedicated to the Columbia mutual fund business affect the Funds. The Board also received extensive information that was provided by or derived from information prepared by third parties. This information is in addition to the detailed information about the Funds that the Board reviews during the course of each year, including information that relates to Fund operations and Fund performance. The Board also received a memorandum from counsel regarding the responsibilities of the Board for the approval of the Advisory Agreements. In addition, the Independent Directors received advice from independent counsel to the Independent Directors, met in executive session outside the presence of Company management and U.S. Trust personnel and participated in question and answer sessions with representatives of U.S. Trust.
The Board’s approval of the continuation of the Advisory Agreements was based on the consideration and evaluation of the information and material provided to the Board and a variety of specific factors discussed at the meetings, including:
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by U.S. Trust to the Funds under the Advisory Agreements and the resources of U.S. Trust and their affiliates, including Columbia, dedicated to the Funds. In this regard, the Board evaluated, among other things, U.S. Trust’s personnel, experience, performance history of various products, and compliance program. The Board considered that U.S. Trust and Columbia provide
91
APPROVAL OF INVESTMENT ADVISORY AGREEMENTS (Continued)
substantial administrative, accounting and compliance services and provide oversight of third party service providers to the Funds. The Board considered representations of U.S. Trust that U.S. Trust and Columbia have allocated substantial resources and personnel, and have made significant financial expenditures and commitments, to the investment management and other operations of the Funds. The Board also considered the nature and quantity of additional resources that have been dedicated to the operations of the Funds since U.S. Trust had become affiliated with Columbia. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services to be provided by U.S. Trust to the Funds and the resources of the U.S. Trust and its affiliates dedicated to the Funds supported the renewal of the Advisory Agreements.
Fund Performance. The Board considered Fund performance in determining whether to renew the Advisory Agreements. Specifically, the Board considered each Fund’s performance relative to a peer group of other mutual funds and appropriate indices/benchmarks, in light of total return, yield and market trends. As part of this review, the Board considered the composition of the peer groups, selection criteria and the reputation of third party providers who provided data for the peer group analysis. In evaluating the performance of each Fund, the Board considered both market risk and shareholder risk expectations for such Fund and whether, irrespective of relative performance, each Fund’s absolute performance was consistent with expectations for its investment methodology. The Board further considered the level of Fund performance in the context of its review of Fund expenses and U.S. Trust’s profitability discussed below. In the case of each Fund that had performance that lagged that of a relevant peer group for certain (although not necessarily all) periods considered, the Board concluded that other factors relevant to performance supported renewal of the Advisory Agreements. These factors varied from Fund to Fund, but included one or more of the following: (1) that the Fund’s performance, although lagging in certain recent periods, was strong over the longer term; (2) that the underperformance was attributable, to a significant extent, to investment decisions by U.S. Trust that were reasonable and consistent with the Fund’s investment objective and policies; (3) that each Fund’s performance was competitive when compared to other relevant performance benchmarks or peer groups; and (4) that U.S. Trust has taken or is taking steps designed to help improve the Fund’s investment performance. Following such evaluation, the Board concluded, within the context of its full deliberations, that the performance of the Funds supported the renewal of the Advisory Agreements.
Fund Expenses. With respect to the Funds’ expenses, the Board considered the rate of compensation called for by the Advisory Agreements, and each Fund’s net operating expense ratio, in each case, in comparison to those of other comparable mutual funds, such peer groups and comparisons having been selected and calculated based on objective factors. The Board noted that with respect to the Funds, U.S. Trust had contractually committed to waive a portion of its fee and/or reimburse the Funds for a portion of their expenses to limit the Funds’ total operating expenses. In evaluating this information, the Board considered the nature and scope of services provided to the Funds. The Board also reviewed the fees charged by U.S. Trust to provide advisory services to other types of accounts with substantially similar investment objectives as the Funds and the differences in services and risks involved in managing such other accounts, including differences relating to compliance and regulatory burdens. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported the renewal of the Advisory Agreements.
92
APPROVAL OF INVESTMENT ADVISORY AGREEMENTS (Continued)
Profitability. With regard to profitability, the Board considered the compensation flowing to U.S. Trust and its affiliates, directly or indirectly. In this connection, the Board reviewed management’s profitability analyses. The Board also considered any other benefits derived by U.S. Trust from its relationship with the Funds, such as whether, by virtue of its management of the Funds, it obtains investment information or other research resources that aid it in providing advisory services to other clients. With respect to U.S. Trust and its affiliates, the Board considered whether the varied levels of compensation and profitability under the Advisory Agreements and other service agreements were reasonable and justified in light of the quality of all services rendered to the Funds. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of U.S. Trust is reasonable and supported the renewal of the Advisory Agreements.
Economies of Scale. The Board considered the existence of any economies of scale and whether those economies are passed along to a Fund’s shareholders through a graduated investment advisory fee schedule or other means, including any fee waivers by U.S. Trust. In this regard, and consistent with their consideration of fund expenses, the Board considered that U.S. Trust has previously committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer Funds or Funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such Funds at subsidized expense levels. The Board also reviewed asset flows in the Funds, noting that a relatively few number of Funds had experienced significant asset growth, while most of the Funds had experienced only moderate growth, if any. After reviewing such information, the Board determined not to seek advisory fee breakpoints at this time. The Board noted that it would continue to monitor the growth in assets of the Funds as compared to expenses and asked U.S. Trust and Columbia to continue to monitor the Funds’ expenses and asset sizes in connection with determining when economies of scale would dictate that advisory fee breakpoints were advisable.
Based on the Board’s deliberations and their evaluation of the information described above, the Board, including all of the Independent Directors, unanimously approved the continuation of the Advisory Agreements and concluded that the compensation under the Advisory Agreements is fair and reasonable in light of the services and expenses and such other matters as the Board considered to be relevant in the exercise of their reasonable judgment. In the course of their deliberations, the Board did not identify any particular information or factor that was all-important or controlling.
93
[THIS PAGE INTENTIONALLY LEFT BLANK]
94
[THIS PAGE INTENTIONALLY LEFT BLANK]
95
[THIS PAGE INTENTIONALLY LEFT BLANK]
96
IMPORTANT INFORMATION ABOUT THIS REPORT
Excelsior Fixed Income Funds
The funds mail one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 1-800-345-6611 and additional reports will be sent to you. This report has been prepared for shareholders of Excelsior Fixed Income Funds.
A description of the policies and procedures that each fund uses to determine how to vote proxies and a copy of each fund’s voting records are available (i) on the Securities and Exchange Commission’s website at www.sec.gov, and (ii) without charge, upon request, by calling 1-800-368-0346. Information regarding how each fund voted proxies relating to portfolio securities during the 12-month period ended June 30 is available from the SEC’s website. Information regarding how each fund voted proxies relating to portfolio securities is also available from the funds’ website.
Each fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Each fund’s Form N-Q is available on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Please consider the investment objectives, risks, charges and expenses for a fund carefully before investing. Contact your financial advisor for a prospectus, which contains this and other important information about a fund. You should read it carefully before you invest.
United States Trust Company, National Association, through its separate identifiable division, U.S. Trust New York Asset Management Division (“USTNA”), or UST Advisers, Inc. (“USTA” and together with USTNA, the “Advisor”) is the investment advisor to the Funds. USTNA is a wholly owned subsidiary of U.S. Trust Corporation (“U.S. Trust”). USTA is a wholly owned subsidiary of USTNA. Excelsior Funds are distributed by Columbia Management Distributors, Inc., member of FINRA, SIPC, part of Columbia Management. USTA, USTNA and Columbia Management Distributor, Inc. are affiliates of Bank of America Corporation.
97
©2007 Columbia Management Distributors, Inc.
One Financial Center, Boston, MA 02111-2621
800-345-6611 www.columbiafunds.com
SHC-44/136415-0907 (11/07) 07/46204
MONEY MARKET
FUNDS
SEMI ANNUAL REPORT
September 30, 2007
| | |
| NOT FDIC INSURED | | May Lose Value |
| NOT BANK ISSUED | | No Bank Guarantee |
TABLE OF CONTENTS
An investment in money market mutual funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market mutual funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in money market mutual funds. Please see the prospectus for a complete discussion of investments in money market funds.
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for an Excelsior Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular Excelsior Fund. References to specific securities should not be construed as a recommendation or investment advice.
LETTER TO SHAREHOLDERS
Dear Shareholder:
Allow me to take this opportunity to formally welcome you to the Columbia Funds family. In July, U.S. Trust Advisors was acquired by Bank of America (parent company of Columbia Management Group). The Excelsior Funds are now distributed by Columbia Management Distributors, Inc. The combined organization is committed to delivering unparalleled wealth management solutions and building deep, lasting relationships with our shareholders.
Your Excelsior Funds account will be serviced by Columbia Management Services, Inc., an experienced service provider in the industry. This team will process transactions, generate account statements and support your ongoing servicing needs.
As we complete the integration over the next several months, you will gain access to a broad array of investment choices including money market investments, mutual funds and 529 plans. Throughout this period of change, our goal is to ensure a smooth transition and provide services that we hope will exceed your expectations. We recommend you visit our website: www.columbiafunds.com for more information about our products and services. Those of you who receive your statements directly from Columbia Management can also register for on-line account access, which allows you to check your account balance, change your distribution options and make other account transactions. If you receive statements from your brokerage firm, please check with your financial advisor for service availability.
There’s a lot to know about Columbia Management
With $709.9 billion under management and a history that dates to the early 1900s, Columbia Management and its affiliates make up one of the nation’s largest and most experienced asset management companies.1 We offer a comprehensive array of investment solutions, including equity, fixed-income and cash strategies. Our diverse investment solutions and our focus on the needs of our clients make Columbia Management the advisor of choice for individual, institutional and high-net-worth investors.
Welcome to Columbia Management. Thank you for your business — we’re pleased to have you as a customer.
Sincerely,
Christopher L. Wilson
President, Excelsior Funds
2
About Christopher L. Wilson
Chris Wilson is head of mutual funds for Columbia Management, responsible for the day-to-day delivery of mutual fund products and services to the firm’s investors. With the exception of distribution, Mr. Wilson oversees all aspects of the mutual fund services operation including treasury, investment accounting, product development and shareholder and broker services. Mr. Wilson serves as Columbia Management’s chief liaison to the mutual fund boards of trustees. He joined Columbia Management in 2004 and has been a member of the investment community since 1980.
Columbia Management Group, LLC (“Columbia Management”) is the investment management arm of Bank of America Corporation. Columbia Management entities furnish investment management services and products for institutional and individual investors. Excelsior Funds are distributed by Columbia Management Distributors, Inc., member FINRA and SIPC. Columbia Management Distributors, Inc. is part of Columbia Management and an affiliate of Bank of America Corporation.
1 | Columbia Management and its affiliates comprise the wealth and investment management division of Bank of America Corporation. As of September 30, 2007, Columbia Management and its affiliates managed assets of $709.9 billion. Columbia Management and its affiliates’ managed assets consist of assets under the discretionary management of the registered investment advisors, Columbia Management Advisors, LLC ($377.9 billion), Columbia Wanger Asset Management, L.P. ($38.5 billion) and Marsico Capital Management, LLC ($103.4 billion); U.S. Trust, Bank of America Private Wealth Management; Banc of America Investment Services, Inc.; Banc of America Investment Advisors, Inc.; Bank of America Capital Advisors, LLC; Premier Banking & Investments, and United States Trust, National Association, including its subsidiary, UST Advisers, Inc. ($116.5 billion). |
3
Understanding Your Expenses — Government Money Fun d
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if an account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs, and ongoing costs, which generally include investment advisory fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | |
Shares | | 1,000.00 | | 1,000.00 | | 1,023.50 | | 1,022.25 | | 2.78 | | 2.78 | | 0.55 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
4
Understanding Your Expenses — Money Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if an account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs, and ongoing costs, which generally include investment advisory fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | |
Shares | | 1,000.00 | | 1,000.00 | | 1,024.20 | | 1,022.25 | | 2.78 | | 2.78 | | 0.55 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
5
Understanding Your Expenses — New York Tax-Exempt Money Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if an account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs, and ongoing costs, which generally include investment advisory fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | |
Shares | | 1,000.00 | | 1,000.00 | | 1,015.70 | | 1,022.00 | | 3.02 | | 3.03 | | 0.60 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
6
Understanding Your Expenses — Tax-Exempt Money Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if an account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs, and ongoing costs, which generally include investment advisory fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | |
Shares | | 1,000.00 | | 1,000.00 | | 1,016.00 | | 1,022.25 | | 2.77 | | 2.78 | | 0.55 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
7
Understanding Your Expenses — Treasury Money Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if an account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs, and ongoing costs, which generally include investment advisory fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | |
Shares | | 1,000.00 | | 1,000.00 | | 1,021.00 | | 1,022.00 | | 3.03 | | 3.03 | | 0.60 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
8
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Government Money Fund
| | | | | | |
Principal
Amount | | | | Value |
| U.S. GOVERNMENT & AGENCY OBLIGATIONS — 61.56% |
| $ | 5,000,000 | | Federal Home Loan Bank, 4.13% 03/14/08(a) | | $ | 5,000,000 |
| | 10,000,000 | | Federal Home Loan Bank, 5.13% 07/30/08 | | | 10,029,954 |
| | 8,000,000 | | Federal Home Loan Bank, 5.25% 11/01/07 | | | 8,000,000 |
| | 10,000,000 | | Federal Home Loan Bank, 5.25% 02/01/08 | | | 10,000,000 |
| | 20,000,000 | | Federal Home Loan Bank, 5.25% 02/13/08 | | | 19,996,452 |
| | 40,000,000 | | Federal Home Loan Bank, Discount Note, 4.48% 10/05/07 | | | 39,980,089 |
| | 14,000,000 | | Federal Home Loan Bank, Discount Note, 4.61% 10/04/07 | | | 13,994,633 |
| | 30,000,000 | | Federal Home Loan Bank, Discount Note, 4.73% 10/17/07 | | | 29,936,933 |
| | 30,000,000 | | Federal Home Loan Bank, Discount Note, 4.85% 11/15/07 | | | 29,818,125 |
| | 25,000,000 | | Federal Home Loan Bank, Discount Note, 5.13% 10/24/07 | | | 24,918,063 |
| | 9,856,000 | | Federal Home Loan Mortgage Corporation, 4.38% 11/16/07 | | | 9,845,056 |
| | 10,000,000 | | Federal National Mortgage Association, 5.30% 01/08/08 | | | 10,000,000 |
| | 5,000,000 | | Federal National Mortgage Association, 5.50% 01/15/08 | | | 5,003,986 |
| | | | | | |
| | | TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost $216,523,291) | | | 216,523,291 |
| | | | | | |
| | | | | |
| Shares | | | | Value |
| REGISTERED INVESTMENT COMPANY — 0.44% |
| 1,552,038 | | Dreyfus Treasury Prime Cash Management Fund
(7 day yield of 3.92%) | | $ | 1,552,038 |
| | | | | |
| | TOTAL REGISTERED INVESTMENT COMPANY
(Cost $1,552,038) | | | 1,552,038 |
| | | | | |
| | | | | |
Principal
Amount | | | | |
| REPURCHASE AGREEMENT — 38.10% |
| $ | 134,000,000 | | Repurchase Agreement with Morgan Stanley, dated 09/28/07, due on 10/01/07, at 4.90%, collateralized by U.S. Government Agency Obligations with various maturities to 09/20/37, market value $136,680,000 (repurchase proceeds $134,054,717) | | 134,000,000 |
| | | | | |
| | | TOTAL REPURCHASE AGREEMENT
(Cost $134,000,000) | | 134,000,000 |
| | | | | |
| | | | | | | |
TOTAL INVESTMENTS
(Cost $352,075,329)(b) | | 100.10 | % | | $ | 352,075,329 | |
OTHER LIABILITIES IN EXCESS OF
ASSETS | | (0.10 | ) | | | (348,531 | ) |
| | | | | | | |
NET ASSETS | | 100.00 | % | | $ | 351,726,798 | |
| | | | | | | |
| (a) | The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007. |
| (b) | Cost for federal income tax purposes is $352,075,329. |
Discount Note—The rate reported is the discount rate at the time of purchase.
See Notes to Financial Statements.
9
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Government Money Fund — (continued)
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | | | |
Portfolio Diversification | | % of
Net
Assets | | | Value | |
U.S. Government & Agency Obligations | | 61.56 | | | $ | 216,523,291 | |
Repurchase Agreement | | 38.10 | | | | 134,000,000 | |
Registered Investment Company | | 0.44 | | | | 1,552,038 | |
| | | | | | | |
Total Investments | | 100.10 | | | $ | 352,075,329 | |
Other Liabilities in Excess of Assets | | (0.10 | ) | | | (348,531 | ) |
| | | | | | | |
Net Assets | | 100.00 | | | $ | 351,726,798 | |
| | | | | | | |
See Notes to Financial Statements.
10
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Money Fund
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
| COMMERCIAL PAPER — 69.46% |
| $ | 50,000,000 | | Abbott Laboratories, Discount Note, 4.96% 10/15/07 | | $ | 49,903,556 |
| | 50,000,000 | | American General Finance Co., Discount Note, 4.39% 10/04/07 | | | 49,977,292 |
| | 50,000,000 | | CIT Group Funding, Inc., Discount Note, 6.40% 10/05/07 | | | 49,964,445 |
| | 35,000,000 | | Coca-Cola Co., Discount Note,
4.65% 12/11/07 | | | 34,679,021 |
| | 30,000,000 | | Corporate Asset Funding Co., Inc., Discount Note, 5.10% 10/24/07 | | | 29,902,250 |
| | 20,000,000 | | Corporate Asset Funding Co., Inc., Discount Note, 5.20% 10/03/07 | | | 19,994,222 |
| | 25,000,000 | | E.I. Dupont, Discount Note, 4.75% 10/17/07 | | | 24,947,444 |
| | 25,000,000 | | E.I. Dupont, Discount Note, 4.77% 10/25/07 | | | 24,920,833 |
| | 25,000,000 | | Govco, Inc., Discount Note, 5.15% 10/01/07 | | | 25,000,000 |
| | 50,000,000 | | HSBC Finance Corp., Discount Note, 5.35% 10/31/07 | | | 49,777,083 |
| | 30,000,000 | | International Business Machines, Discount Note, 4.73% 10/03/07 | | | 29,992,117 |
| | 50,000,000 | | International Lease Finance Corp., Discount Note, 5.23% 10/26/07 | | | 49,818,403 |
| | 25,000,000 | | John Deere Capital Corp., Discount Note, 5.10% 11/19/07 | | | 24,826,458 |
| | 20,800,000 | | Johnson & Johnson, Discount Note,
4.72% 10/15/07 | | | 20,761,821 |
| | 40,000,000 | | JP Morgan Chase & Co., Discount Note, 2.82% 10/23/07 | | | 39,872,400 |
| | 50,000,000 | | Merrill Lynch, Discount Note,
2.06% 10/03/07 | | | 49,985,500 |
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
| COMMERCIAL PAPER — (continued) |
| $ | 25,000,000 | | Morgan Stanley, Discount Note,
4.40% 11/19/07 | | $ | 24,812,847 |
| | 40,000,000 | | National Rural Utilities Cooperative Finance, Discount Note,
4.78% 10/25/07 | | | 39,872,533 |
| | 35,000,000 | | Procter & Gamble Co., Discount Note, 3.20% 10/19/07 | | | 34,908,300 |
| | 15,000,000 | | Procter & Gamble Co., Discount Note, 4.81% 12/11/07 | | | 14,859,183 |
| | 50,000,000 | | Societe Generale, Discount Note,
2.20% 10/11/07 | | | 49,927,153 |
| | 25,000,000 | | UBS Finance Corp., Discount Note,
4.97% 11/26/07 | | | 24,806,722 |
| | 25,000,000 | | UBS Finance Corp., Discount Note,
5.52% 02/11/08 | | | 24,502,174 |
| | 25,000,000 | | Wal-Mart Stores, Inc., Discount Note, 4.78% 12/18/07 | | | 24,744,333 |
| | | | | | |
| | | TOTAL COMMERCIAL PAPER
(Cost $812,756,090) | | | 812,756,090 |
| | | | | | |
| CERTIFICATES OF DEPOSIT — 12.82% | | |
| | 50,000,000 | | Barclays Bank PLC, 5.32% 10/05/07 | | | 50,000,000 |
| | 50,000,000 | | Citibank,
5.35% 11/08/07 | | | 50,000,000 |
| | 50,000,000 | | First Tennessee Bank, 5.65% 12/06/07 | | | 50,000,000 |
| | | | | | |
| | | TOTAL CERTIFICATES OF DEPOSIT
(Cost $150,000,000) | | | 150,000,000 |
| | | | | | |
| U.S. GOVERNMENT & AGENCY OBLIGATIONS — 4.70% |
| | 20,000,000 | | Federal Home Loan Bank, 5.54% 09/17/08(a) | | | 20,000,000 |
| | 20,000,000 | | Federal Home Loan Bank, 4.13% 03/14/08(a) | | | 20,000,000 |
See Notes to Financial Statements.
11
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Money Fund — (continued)
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
| U.S. GOVERNMENT & AGENCY OBLIGATIONS — (continued) |
| $ | 15,000,000 | | Federal National Mortgage Association,
5.30% 01/08/08 | | $ | 15,000,000 |
| | | | | | |
| | | TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost $55,000,000) | | | 55,000,000 |
| | | | | | |
| CORPORATE BONDS — 2.56% | | |
| | 30,000,000 | | Wells Fargo Bank,
4.82% 10/31/07 | | | 30,000,000 |
| | | | | | |
| | | TOTAL CORPORATE BONDS
(Cost $30,000,000) | | | 30,000,000 |
| | | | | | |
| Shares | | | | |
| REGISTERED INVESTMENT COMPANY — 0.16% |
| | 1,900,537 | | Dreyfus Government Cash Management Fund
(7 day yield of 4.81%) | | | 1,900,537 |
| | | | | | |
| | | TOTAL REGISTERED INVESTMENT COMPANY
(Cost $1,900,537) | | | 1,900,537 |
| | | | | | |
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
| REPURCHASE AGREEMENT — 10.51% |
| $ | 123,000,000 | | Repurchase agreement with Morgan Stanley, dated 09/28/07, due on 10/01/07, at 4.90%, collateralized by U.S. Government Agency Obligations with various maturities to 08/01/37, market value $126,207,166 (repurchase proceeds $123,050,225) | | $ | 123,000,000 |
| | | | | | |
| | | TOTAL REPURCHASE AGREEMENT
(Cost $123,000,000) | | | 123,000,000 |
| | | | | | |
| | | | | | | | | |
TOTAL INVESTMENTS
(Cost $1,172,656,627)(b) | | 100.21 | % | | $ | 1,172,656,627 | |
OTHER LIABILITIES IN EXCESS OF ASSETS | | (0.21 | ) | | | (2,468,098 | ) |
| | | | | | | |
NET ASSETS | | 100.00 | % | | $ | 1,170,188,529 | |
| | | | | | | |
| (a) | The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007. |
| (b) | Cost for federal tax purposes is $1,172,656,627. |
Discount Note—The rate reported is the discount rate at the time of purchase.
PLC—Public Limited Company
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | | | |
Portfolio Diversification | | % of
Net
Assets | | | Value | |
Commercial Paper | | 69.46 | | | $ | 812,756,090 | |
Certificates of Deposit | | 12.82 | | | | 150,000,000 | |
Repurchase Agreement | | 10.51 | | | | 123,000,000 | |
U.S. Government & Agency Obligations | | 4.70 | | | | 55,000,000 | |
Corporate Bonds | | 2.56 | | | | 30,000,000 | |
Registered Investment Company | | 0.16 | | | | 1,900,537 | |
| | | | | | | |
Total Investments | | 100.21 | | | $ | 1,172,656,627 | |
Other Liabilities in Excess of Assets | | (0.21 | ) | | | (2,468,098 | ) |
| | | | | | | |
Net Assets | | 100.00 | | | $ | 1,170,188,529 | |
| | | | | | | |
See Notes to Financial Statements.
12
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
New York Tax-Exempt Money Fund
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
| TAX-EXEMPT CASH EQUIVALENT SECURITIES — 74.31% |
| $ | 5,000,000 | | Albany, New York, City School District, General Obligation Tax Anticipation Notes, 3.75% 10/17/07 | | $ | 5,000,279 |
| | 5,000,000 | | Arlington, New York, Central School District, General Obligation Tax Anticipation Notes,
3.75% 11/02/07 | | | 5,000,249 |
| | 6,500,000 | | Bedford, New York, Central School District, General Obligation Tax Anticipation Notes,
3.75% 11/30/07 | | | 6,500,606 |
| | 4,000,000 | | Edgemont, New York, Union Free School District of Greenburgh, General Obligation Tax Bond Anticipation Notes, 3.75% 01/18/08 | | | 4,001,390 |
| | 5,000,000 | | Long Island, New York, Power Authority, Electrical Systems Revenue Bonds, Floating Rate Certificates, Series 1428, (FGIC/MORGAN STANLEY), 3.90% 12/01/25(a)(b) | | | 5,000,000 |
| | 19,900,000 | | New York City, New York, Housing Development Corporation, Multi Family Mortgage Revenue Bonds, 201 Pearl LLC, Series A, (FNMA), 3.83% 10/15/41(a) | | | 19,900,000 |
| | 10,300,000 | | New York City, New York, Municipal Water Finance Authority Commercial Paper, Series 5-B, (BAYERISCHE LANDESBANK/WESTDEUTSCHE BANK), 3.50% 12/20/07 | | | 10,300,000 |
| | 4,455,000 | | New York City, New York, Municipal Water Finance Authority Revenue Bonds, Water & Sewer Systems, Floating Rate Certificates, Series 726X, (MBIA/MORGAN STANLEY), 3.90% 06/15/27(a)(b) | | | 4,455,000 |
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
TAX-EXEMPT CASH EQUIVALENT
SECURITIES — (continued) |
| $ | 10,000,000 | | New York City, New York, Municipal Water Finance Authority Revenue Bonds, Water & Sewer Systems, PFLOATS, Series 1421, 3.90% 06/15/37(a)(b) | | $ | 10,000,000 |
| | 19,700,000 | | New York City, New York, Transitional Finance Authority Revenue Bonds, EAGLE, Class A, (BAYERISCHE LANDESBANK), 3.90% 11/01/30(a)(b) | | | 19,700,000 |
| | 10,870,000 | | New York City, New York, Transitional Finance Authority Revenue Bonds, EAGLE, Class A, (CITIBANK N.A.), 3.92% 02/01/31(a)(b) | | | 10,870,000 |
| | 11,315,000 | | New York City, New York, Transitional Finance Authority Revenue Bonds, Floating Rate Certificates, Series 536, (MBIA/MORGAN STANLEY), 3.90% 05/01/15(a)(b) | | | 11,315,000 |
| | 3,575,000 | | New York City, New York, Transitional Finance Authority Revenue Bonds, Floating Rate Certificates, Series N-11, (BANK OF NEW YORK), 3.89% 02/01/14(a)(b) | | | 3,575,000 |
| | 8,705,000 | | New York City, New York, Transitional Finance Authority Revenue Bonds, PUTTERS, Series 468, (MBIA/JPMORGAN CHASE BANK), 3.90% 02/01/11(a)(b) | | | 8,705,000 |
| | 3,440,000 | | New York City, New York, Transitional Finance Authority Revenue Bonds, PUTTERS, Series 471, (FGIC/JPMORGAN CHASE BANK), 3.90% 02/01/11(a)(b) | | | 3,440,000 |
| | 5,000,000 | | New York State, Dormitory Authority Commercial Paper, Columbia University, 3.95% 12/14/07 | | | 5,000,000 |
See Notes to Financial Statements.
13
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
New York Tax-Exempt Money Fund — (continued)
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
TAX-EXEMPT CASH EQUIVALENT
SECURITIES — (continued) |
| $ | 10,000,000 | | New York State, Dormitory Authority Commercial Paper, Cornell University, 3.92% 12/13/07 | | $ | 10,000,000 |
| | 5,125,000 | | New York State, Dormitory Authority Revenue Bonds, Cornell University, Series B, (JPMORGAN CHASE BANK), 3.78% 07/01/30(a) | | | 5,125,000 |
| | 12,000,000 | | New York State, Dormitory Authority Revenue Bonds, Secondary Issues, EAGLE, Class A, (CITIBANK N.A.), 3.90% 03/15/37(a)(b) | | | 12,000,000 |
| | 9,930,000 | | New York State, Dormitory Authority Revenue Bonds, Secondary Issues, P-Floats, Series 1330, (FGIC/MERRILL LYNCH CAPITAL SERVICES), 3.90% 02/01/28(a)(b) | | | 9,930,000 |
| | 11,650,000 | | New York State, Environmental Facilities Corporation, Clean Water Revenue Bonds, PFLOATS, Series 1165, (MERRILL LYNCH CAPITAL SERVICES), 3.90% 07/15/33(a)(b) | | | 11,650,000 |
| | 7,720,000 | | New York State, Environmental Facilities Corporation, Clean Water Revenue Bonds, PUTTERS, Series 1372, (JPMORGAN CHASE BANK), 3.90% 06/15/14(a)(b) | | | 7,720,000 |
| | 400,000 | | New York State, Housing Finance Agency Revenue Bonds, Barclay Street Realty LLC, Series A, (FNMA),
3.80% 11/15/37(a) | | | 400,000 |
| | 11,283,000 | | New York State, Metropolitan Transportation Authority Revenue Bonds, Floating Rate Certificates, Series 848-D, (FGIC/MORGAN STANLEY), 3.90% 11/15/21(a)(b) | | | 11,283,000 |
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
TAX-EXEMPT CASH EQUIVALENT
SECURITIES — (continued) |
| $ | 8,545,000 | | New York State, Metropolitan Transportation Authority Revenue Bonds, Series D-2, (AMBAC/WACHOVIA BANK N.A.), 3.88% 11/01/34(a) | | $ | 8,545,000 |
| | 9,000,000 | | New York State, PFLOATS, Series 4227, (FSA/FGIC/MERRILL LYNCH CAPITAL SERVICES), 3.90% 11/15/26(a)(b) | | | 9,000,000 |
| | 13,905,000 | | New York State, PFLOATS, Series 486, (BNP PARIBAS), 3.88% 06/15/20(a)(b) | | | 13,905,000 |
| | 10,000,000 | | New York State, Power Authority Extendible Commercial Paper, General Obligation Bonds, 3.65% 11/16/07 | | | 10,000,000 |
| | 12,000,000 | | New York State, Power Authority, General Obligation Bonds, (BANK OF NOVA SCOTIA), 3.64% 03/01/20(a) | | | 12,000,000 |
| | 13,720,000 | | New York State, Sales Tax Asset Receivable Corporation Revenue Bonds, PUTTERS, Series 564, (MBIA/JPMORGAN CHASE BANK), 3.90% 10/15/12(a)(b) | | | 13,720,000 |
| | 8,500,000 | | New York State, Thruway Authority Revenue Bonds, PUTTERS, Series 2032, (AMBAC/JPMORGAN CHASE BANK), 3.90% 10/01/13(a)(b) | | | 8,500,000 |
| | 17,390,000 | | New York State, Triborough Bridge & Tunnel Authority Revenue Bonds, Series A, (DEXIA CREDIT LOCAL), 3.77% 11/01/35(a) | | | 17,390,000 |
See Notes to Financial Statements.
14
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
New York Tax-Exempt Money Fund — (continued)
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
TAX-EXEMPT CASH EQUIVALENT
SECURITIES — (continued) |
| $ | 790,000 | | New York State, Triborough Bridge & Tunnel Authority Revenue Bonds, Series B, (AMBAC/STATE STREET BANK & TRUST CO.), 3.77% 01/01/32(a) | | $ | 790,000 |
| | 4,325,000 | | New York State, Triborough Bridge & Tunnel Authority Revenue Bonds, Series B, (DEXIA CREDIT LOCAL), 3.80% 01/01/33(a) | | | 4,325,000 |
| | 18,460,000 | | New York State, Urban Development Corporation Revenue Bonds, EAGLE, Class A, (CITIBANK N.A.), 3.92% 03/15/35(a)(b) | | | 18,460,000 |
| | 4,300,000 | | Niagara Falls, New York, Bridge Commission Toll Authority Revenue Bonds, Series A, (FGIC/DEXIA CREDIT LOCAL), 3.76% 10/01/19(a) | | | 4,300,000 |
| | 4,585,000 | | Oneida County, New York, Industrial Development Agency Revenue Bonds, Hamilton College, (MBIA/BANK OF NEW YORK), 3.80% 09/15/32(a) | | | 4,585,000 |
| | 4,000,000 | | Sag Harbor, New York, School District General Obligation, Tax Anticipation Notes, 3.75% 06/30/08 | | | 4,006,693 |
| | | | | | |
| | | TOTAL TAX-EXEMPT CASH EQUIVALENT SECURITIES (Cost $330,397,217) | | | 330,397,217 |
| | | | | | |
TAX-EXEMPT CASH EQUIVALENT SECURITIES —
BACKED BY LETTERS OF CREDIT — 23.57% |
| | 4,560,000 | | Monroe County, New York, Industrial Development Agency Revenue Bonds, Civic Facilities,Greater Rochester YMCA Project, (MANUFACTURERS & TRADERS), 3.89% 04/01/31(a) | | | 4,560,000 |
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
TAX-EXEMPT CASH EQUIVALENT SECURITIES —
BACKED BY LETTERS OF CREDIT — (continued) |
| $ | 3,690,000 | | New York City, New York, General Obligation Bonds, Sub-Series B-8, (BAYERISCHE LANDESBANK), 3.83% 08/15/24(a) | | $ | 3,690,000 |
| | 8,800,000 | | New York City, New York, Industrial Development Agency Revenue Bonds, Civic Facilities, Jewish Community Center Project, (MANUFACTURERS & TRADERS), 3.89% 03/01/30(a) | | | 8,800,000 |
| | 6,535,000 | | New York State, Dormitory Authority Revenue Bonds, Catholic Health Systems Obligations, Series C, (HSBC BANK USA N.A.), 3.88% 07/01/22(a) | | | 6,535,000 |
| | 3,320,000 | | New York State, Dormitory Authority Revenue Bonds, Oxford University Press, Inc., (LANDESBANK HESSEN-THURINGEN), 4.00% 07/01/23(a) | | | 3,320,000 |
| | 8,800,000 | | New York State, Environmental Facilities Corporation, Clean Water Commercial Paper, Series A, (JPMORGAN/BAYERISCHE LANDESBANK/LANDEBANK HESSEN),
3.70% 11/01/07 | | | 8,800,000 |
| | 6,800,000 | | New York State, Energy Research & Development Authority Facilities Revenue Bonds, Consolidated Edison Co., Sub-Series A-1, (WACHOVIA BANK N.A.), 3.77% 05/01/39(a) | | | 6,800,000 |
| | 12,000,000 | | New York State, Environmental Quality General Obligation Bonds, Series G, (WESTDEUTSCHE LANDESBANK), 3.70% 11/30/18(a) | | | 12,000,000 |
See Notes to Financial Statements.
15
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
New York Tax-Exempt Money Fund — (continued)
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
TAX-EXEMPT CASH EQUIVALENT SECURITIES —
BACKED BY LETTERS OF CREDIT — (continued) |
| $ | 24,500,000 | | New York State, Housing Finance Agency Revenue Bonds, Series I, (LANDESBANK HESSEN-THURINGEN), 3.88% 03/15/31(a) | | $ | 24,500,000 |
| | 6,100,000 | | New York State, Local Government Assistance Corporation Revenue Bonds, Series D, (SOCIETE GENERALE), 3.85% 04/01/25(a) | | | 6,100,000 |
| | 4,100,000 | | New York State, Metropolitan Transportation Authority Revenue Bonds, Sub-Series E-2, (FORTIS BANK SA), 3.80% 11/01/35(a) | | | 4,100,000 |
| | 12,000,000 | | New York State, Environmental Commercial Paper, Series 97A, (BAYERISCHE LANDESBANK/LANDESBANK HESSEN), 3.51% 12/06/07(c) | | | 12,000,000 |
| | 3,600,000 | | New York State, Environmental Commercial Paper, Series 97A, (BAYERISCHE LANDESBANK/LANDESBANK HESSEN), 3.69% 11/08/07(c) | | | 3,600,000 |
| | | | | | |
| | | TOTAL TAX-EXEMPT CASH EQUIVALENT SECURITIES — BACKED BY LETTERS OF CREDIT
(Cost $104,805,000) | | | 104,805,000 |
| | | | | | |
| | | | | |
Shares | | | | Value |
| | | | | |
| REGISTERED INVESTMENT COMPANIES — 0.11% |
| 482,213 | | BlackRock Institutional New York Money Market Fund
(7 day yield of 3.65%) | | $ | 482,213 |
| 1 | | Dreyfus New York Tax Exempt Fund
(7 day yield of 3.17%) | | | 1 |
| | | | | |
| | TOTAL REGISTERED INVESTMENT COMPANIES
(Cost $482,214) | | | 482,214 |
| | | | | |
| | | | | | |
TOTAL INVESTMENTS
(Cost $435,684,431)(d) | | 97.99 | % | | $ | 435,684,431 |
OTHER ASSETS IN EXCESS OF LIABILITIES | | 2.01 | | | | 8,923,323 |
| | | | | | |
NET ASSETS | | 100.00 | % | | $ | 444,607,754 |
| | | | | | |
| (a) | Variable rate obligations maturing in more than one year. These securities are secured by letters of credit or other credit support agreements from banks. The interest rate is changed periodically and the interest rate shown reflects the rate at September 30, 2007. |
| (b) | Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2007, these securities, which are not illiquid, amounted to $193,228,000, which represents 43.46% of net assets. |
| (c) | The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007. |
| (d) | Cost for federal income tax purposes is $435,684,431. |
AMBAC—Ambac Assurance Corp.
FGIC—Financial Guaranty Insurance Co.
FNMA—Federal National Mortgage Association
FSA—Financial Security Assurance, Inc.
MBIA—MBIA Insurance Corp.
PFLOATS—Puttable Floating Option Tax-Exempt Receipts
PUTTERS—Puttable Tax Exempt Receipts
See Notes to Financial Statements.
16
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
New York Tax-Exempt Money Fund — (continued)
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | |
Portfolio Diversification | | % of
Net
Assets | | Value |
Revenue Bonds | | 68.46 | | $ | 304,373,000 |
General Obligation Bonds | | 13.99 | | | 62,199,217 |
Commercial Paper | | 10.28 | | | 45,725,000 |
Puttable Floating Options | | 5.15 | | | 22,905,000 |
Registered Investment Companies | | 0.11 | | | 482,214 |
| | | | | |
Total Investments | | 97.99 | | $ | 435,684,431 |
Other Assets in Excess of Liabilities | | 2.01 | | | 8,923,323 |
| | | | | |
Net Assets | | 100.00 | | $ | 444,607,754 |
| | | | | |
See Notes to Financial Statements.
17
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Tax-Exempt Money Fund
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
| TAX-EXEMPT CASH EQUIVALENT SECURITIES — 91.34% |
| $ | 16,425,000 | | Adams County, Colorado, School District Number 050 General Obligation Bonds, PFLOATS, Series 3804, (MBIA/MERRILL LYNCH CAPITAL SERVICES),
3.95% 12/01/26(a)(b) | | $ | 16,425,000 |
| | 10,000,000 | | Anne Arundel County, Maryland, Commercial Paper, Series A, (WESTDEUTSCHE BANK),
3.74% 12/06/07 | | | 10,000,000 |
| | 14,880,000 | | Arizona State, Agricultural Improvement & Power Distribution, Electrical Systems Revenue Bonds, Salt River Project, Series 640, ROCS, (CITIBANK N.A.),
3.92% 01/01/31(a)(b) | | | 14,880,000 |
| | 11,564,000 | | Arizona State, Highway Transportation Board Revenue Bonds, Floating Rate Certificates, Series 1539, (MORGAN STANLEY),
3.85% 07/01/23(a)(b) | | | 11,564,000 |
| | 47,050,000 | | Austin, Texas, Water & Wastewater System Revenue Bonds, (FSA/LANDESBANK BADEN-WURTTEMBERG),
3.93% 05/15/24(a) | | | 47,050,000 |
| | 25,900,000 | | Baltimore County, Maryland, Commercial Paper,
Series 2002 (BNP PARIBAS),
3.63% 12/10/07 | | | 25,900,000 |
| | 31,640,000 | | Boulder, Larimer, & Weld County, Colorado, School District General Obligation Bonds, Floating Rate Certificates, Series 1540, (FSA/MORGAN STANLEY),
3.88% 12/15/26(a)(b) | | | 31,640,000 |
| | 11,895,000 | | Brownsville, Texas, Utility Systems Revenue Bonds, PUTTERS, Series 1132, (AMBAC/JPMORGAN CHASE BANK),
3.92% 09/01/13(a)(b) | | | 11,895,000 |
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
TAX-EXEMPT CASH EQUIVALENT
SECURITIES — (continued) |
| $ | 27,940,000 | | Chicago, Illinois, General Obligation Bonds, PUTTERS, Series 1277, (FSA/JPMORGAN CHASE BANK),
3.92% 01/01/14(a)(b) | | $ | 27,940,000 |
| | 15,605,000 | | Chicago, Illinois, General Obligation Bonds, PUTTERS, Series 1288, (FSA/JPMORGAN CHASE BANK),
3.92% 01/01/14(a)(b) | | | 15,605,000 |
| | 5,000,000 | | Colorado State, Regional Transportation District, Sales Tax Revenue Bonds, EAGLE, Class A, (AMBAC/CITIBANK N.A.),
3.93% 11/01/36(a)(b) | | | 5,000,000 |
| | 20,605,000 | | Colorado State, Regional Transportation District, Sales Tax Revenue Bonds, ROCS, Series 10117, (AMBAC/CITIGROUP FINANCIAL PRODUCTS), 3.92% 11/01/36(a)(b) | | | 20,605,000 |
| | 21,350,000 | | Colorado State, Regional Transportation District, Sales Tax Revenue Bonds, ROCS, Series 10118, (AMBAC/CITIGROUP FINANCIAL PRODUCTS),
3.92% 11/01/36(a)(b) | | | 21,350,000 |
| | 10,410,000 | | Colorado State, Regional Transportation District, Sales Tax Revenue Bonds, ROCS, Series 10119, (AMBAC/CITIBANK N.A.), 3.92% 11/01/36(a)(b) | | | 10,410,000 |
| | 5,395,000 | | Connecticut State, General Obligation Bonds, Municipal Securities Trust Receipts, Series JPMC4, (JPMORGAN CHASE BANK),
4.03% 06/15/15(a)(b) | | | 5,395,000 |
| | 9,900,000 | | Connecticut State, Health & Educational Systems Revenue Bonds, Yale University, Series S, Commercial Paper,
3.65% 12/12/07(c) | | | 9,900,000 |
See Notes to Financial Statements.
18
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Tax-Exempt Money Fund — (continued)
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
TAX-EXEMPT CASH EQUIVALENT
SECURITIES — (continued) |
| $ | 15,000,000 | | Dallas, Texas, Area Rapid Transit Sales Tax Commercial Paper, Series 2001 S, (STATE STREET/WESTDEUTSCHE BANK/LANDESBANK BADEN-WURTTEMBERG/BAYERISCHE LANDESBANK), 3.50% 01/14/08 | | $ | 15,000,000 |
| | 10,000,000 | | Dallas, Texas, Area Rapid Transit Sales Tax Commercial Paper, Series 2001, 3.65% 01/10/08 | | | 10,000,000 |
| | 10,000,000 | | Dallas, Texas, Area Rapid Transit Sales Tax Commercial Paper, Series 2001, (STATE STREET/WESTDEUTSCHE BANK/LANDESBANK BADEN-WURTTEMBERG/BAYERISCHE LANDESBANK), 3.63% 11/05/07 | | | 10,000,000 |
| | 19,800,000 | | Dallas, Texas, Area Rapid Transit Sales Tax Revenue, EAGLE, Class A, (AMBAC/BAYERISCHE LANDESBANK), 3.91% 12/01/36(a)(b) | | | 19,800,000 |
| | 25,865,000 | | Detroit, Michigan, Water Supply Systems Revenue Bonds, Floating Rate Certificates, Series 1445, (FSA/MORGAN STANLEY), 3.91% 07/01/25(a)(b) | | | 25,865,000 |
| | 11,835,000 | | Florida State, Board of Education Lottery Revenue Bonds, ROCS, Series 542, (AMBAC/CITIBANK N.A.), 3.92% 07/01/25(a)(b) | | | 11,835,000 |
| | 8,860,000 | | Fort Myers, Florida, Improvement Revenue Bonds, Floating Rate Certificates, Series 2077,
(MBIA/WELLS FARGO BANK N.A.), 3.91% 12/01/31(a)(b) | | | 8,860,000 |
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
TAX-EXEMPT CASH EQUIVALENT
SECURITIES — (continued) |
| $ | 17,140,000 | | Fulton County, Georgia, Water & Sewage Revenue Bonds, Floating Rate Certificates, Series 1120, (FGIC/MORGAN STANLEY), 3.91% 01/01/30(a)(b) | | $ | 17,140,000 |
| | 19,195,000 | | Hawaii State, General Obligation Bonds, ROCS, Series 6062, (FSA/CITIBANK), 3.92% 03/01/26(a)(b) | | | 19,195,000 |
| | 31,000,000 | | Hockley County, Texas, Industrial Development Corporation, Pollution Control Revenue Bonds, Amoco Project - Standard Oil Co.,
3.70% 03/01/14(a) | | | 31,000,000 |
| | 19,300,000 | | 3.70% 11/01/19(a) | | | 19,300,000 |
| | 11,690,000 | | Honolulu City & County Waste Water, Hawaii, EAGLE, Series A, (FGIC/BANCO BILBAO VIZCAYA), 3.91% 07/01/30(a)(b) | | | 11,690,000 |
| | 10,000,000 | | Houston, Texas, General Obligation Bonds, Series F, Commercial Paper, (DEPFA), 3.50% 12/06/07(c) | | | 9,999,045 |
| | 8,000,000 | | Illinois State, Finance Authority Revenue Bonds, FLOATERS, Series 1489, (MORGAN STANLEY), 3.91% 12/01/42(a)(b) | | | 8,000,000 |
| | 70,000,000 | | Illinois State, General Obligation Notes, 4.25% 11/09/07(c) | | | 70,040,040 |
| | 15,000,000 | | Indiana State Highway Revenue, PFLOATS, PT 3980, (FGIC/MERRILL LYNCH CAPITAL SERVICES), 3.95% 06/01/29(a)(b) | | | 15,000,000 |
| | 63,200,000 | | Intermountain Power Agency, Utah, Commercial Paper, Series B-2, (BANK OF NOVA SCOTIA),
3.67% 12/14/07 | | | 63,200,000 |
See Notes to Financial Statements.
19
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Tax-Exempt Money Fund — (continued)
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
TAX-EXEMPT CASH EQUIVALENT
SECURITIES — (continued) |
| $ | 24,700,000 | | Intermountain Power Agency, Utah, Power Supply Revenue Bonds, Series E, (AMBAC/MORGAN STANLEY), 3.50% 07/01/14(a) | | $ | 24,700,000 |
| | 14,700,000 | | Iowa State, Finance Authority Small Business Development Revenue Bonds, Multi Family Housing, Village Court Associates, E.I. DuPont, Series B,
3.91% 11/01/15(a) | | | 14,700,000 |
| | 18,700,000 | | Jacksonville, Florida, Electrical Systems Commercial Paper, Series 2000 F, (LANDESBANK HESSEN),
3.69% 10/04/07 | | | 18,700,000 |
| | 38,000,000 | | 3.66% 12/13/07 | | | 38,000,000 |
| | 16,110,000 | | Jacksonville, Florida, St. Johns River, Power Systems Revenue Bonds, PUTTERS, Series 1182, (MBIA/JPMORGAN CHASE BANK), 3.92% 04/01/13(a)(b) | | | 16,110,000 |
| | 40,000,000 | | Kansas City, Missouri, Industrial Development Authority Revenue Bonds, Downtown Arena Project, Series C, (AMBAC/DEXIA CREDIT LOCAL), 3.87% 04/01/40(a) | | | 40,000,000 |
| | 10,000,000 | | Kentucky State, Asset & Liability Commission Project, Series A, (CREDIT LOCAL DE FRANCE), 3.52% 12/03/07(c) | | | 10,000,000 |
| | 13,570,000 | | King County, Washington, General Obligation Bonds, PUTTERS, Series 1184, (FGIC/JPMORGAN CHASE BANK), 3.92% 01/01/13(a)(b) | | | 13,570,000 |
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
TAX-EXEMPT CASH EQUIVALENT
SECURITIES — (continued) |
| $ | 17,100,000 | | Las Vegas, Nevada, Water District General Obligation Bonds, Series 2004 A, Commercial Paper,
(BNP PARIBAS), 3.55% 12/10/07(c) | | $ | 17,100,000 |
| | 15,200,000 | | Lincoln County, Wyoming, Pollution Control Revenue Bonds, BP Amoco PLC, 3.60% 10/01/12(a) | | | 15,200,000 |
| | 30,000,000 | | Massachusetts State, General Obligation Bonds, Series A, (DEXIA CREDIT LOCAL), 4.05% 03/01/26(a) | | | 30,000,000 |
| | 22,200,000 | | Massachusetts State, General Obligation Bonds, Series C, (STATE STREET BANK & TRUST CO.), 3.85% 01/01/21(a) | | | 22,200,000 |
| | 10,000,000 | | Massachusetts State, Health & Educational Harvard University Revenue Bonds, Commercial Paper, 3.67% 11/08/07(c) | | | 9,998,428 |
| | 21,000,000 | | Massachusetts State, Water Resources Authority, Sub-Series D, (FGIC/DEXIA CREDIT LOCAL), 3.88% 11/01/26(a) | | | 21,000,000 |
| | 18,660,000 | | Memphis, Tennessee, Electric Systems Revenue Bonds, PUTTERS, Series 378, Commercial Paper, (MBIA/JPMORGAN CHASE), 3.92% 12/01/11(a)(b) | | | 18,660,000 |
| | 14,200,000 | | Michigan State, Building Authority Revenue Bonds, EAGLE, Class A, (FGIC/CITIBANK N.A.), 3.93% 10/15/36(a)(b) | | | 14,200,000 |
| | 10,630,000 | | Michigan State, University Revenue Bonds, (LANDESBANK HESSEN-THURINGEN), 3.77% 02/15/34(a) | | | 10,630,000 |
See Notes to Financial Statements.
20
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Tax-Exempt Money Fund — (continued)
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
TAX-EXEMPT CASH EQUIVALENT
SECURITIES — (continued) |
| $ | 15,000,000 | | Minnesota State, PFLOATS, Series 4145, (MERRILL LYNCH CAPITAL SERVICES), 3.93% 12/15/33(a)(b) | | $ | 15,000,000 |
| | 4,000,000 | | Missouri State, Health & Educational Facilities Authority Revenue Bonds, Washington University, Series A, (MORGAN GUARANTY TRUST), 4.08% 09/01/30(a) | | | 4,000,000 |
| | 30,500,000 | | Montgomery County, Maryland, Commercial Paper, Series 2002, 3.65% 12/10/07 | | | 30,500,000 |
| | 15,000,000 | | Nevada State, PFLOATS, Series 4221, (FGIC/MERRILL LYNCH CAPITAL SERVICES), 3.95% 12/01/25(a)(b) | | | 15,000,000 |
| | 9,550,000 | | North Carolina State, Floating Rate Certificates, Series 2005, (MORGAN STANLEY), 3.91% 03/01/23(a)(b) | | | 9,550,000 |
| | 12,095,000 | | North Carolina State, General Obligation Bonds, PUTTERS, Series 465, (PNC BANK N.A.), 3.88% 05/01/11(a)(b) | | | 12,095,000 |
| | 10,230,000 | | North Carolina State, General Obligation Bonds, PUTTERS, Series 466, (PNC BANK N.A.), 3.88% 03/01/12(a)(b) | | | 10,230,000 |
| | 7,450,000 | | Oklahoma State, Water Resource Board Revenue Bonds, Loan Program, (STATE STREET BANK & TRUST CO.), 3.65% 09/01/24(a) | | | 7,450,000 |
| | 19,475,000 | | Oregon State, Veterans Welfare General Obligation Bonds, Series 85, (DEXIA CREDIT LOCAL), 4.05% 06/01/41(a) | | | 19,475,000 |
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
TAX-EXEMPT CASH EQUIVALENT
SECURITIES — (continued) |
| $ | 15,560,000 | | Oregon State, Veterans Welfare General Obligation Bonds, Series 86, (DEXIA CREDIT LOCAL),
4.05% 06/01/40(a) | | $ | 15,560,000 |
| | 21,500,000 | | Orlando, Florida, Communication Utility Systems Revenue Bonds, PUTTERS, Series 1557, (JPMORGAN CHASE BANK), 3.92% 10/01/13(a)(b) | | | 21,500,000 |
| | 29,555,000 | | Pennsylvania State, PFLOATS, Series 4160, (MERRILL LYNCH CAPITAL SERVICES), 3.91% 11/01/24(a)(b) | | | 29,555,000 |
| | 18,040,000 | | Richland County, South Carolina, School District No. 002, General Obligation Bonds, PFLOATS, Series 1646, (FGIC), 3.95% 02/01/10(a) | | | 18,040,000 |
| | 14,210,000 | | San Antonio, Texas, Hotel Occupancy Revenue Bonds, PUTTERS, Series 1693, (FSA/JPMORGAN CHASE BANK), 3.92% 02/15/12(a)(b) | | | 14,210,000 |
| | 54,500,000 | | San Antonio, Texas, Water Revenue Bonds, EAGLE, Class A, (MBIA/CITIBANK N.A.), 3.93% 05/15/40(a)(b) | | | 54,500,000 |
| | 10,820,000 | | Springfield, Illinois, Electrical Revenue, ROC, Series 11154, (MBIA/CITIBANK N.A.), 3.92% 03/01/24(a)(b) | | | 10,820,000 |
| | 44,000,000 | | St. James Parish, Louisiana, Pollution Control Commercial Paper, Texaco Project, 3.73% 10/16/07 | | | 44,000,000 |
See Notes to Financial Statements.
21
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Tax-Exempt Money Fund — (continued)
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
TAX-EXEMPT CASH EQUIVALENT
SECURITIES — (continued) |
| $ | 17,555,000 | | St. Louis, Missouri, Metropolitan Sewer District Wastewater Systems Revenue, Series 2076, (MBIA/MORGAN STANLEY), 3.91% 05/01/36(a) | | $ | 17,555,000 |
| | 18,695,000 | | Tarrant, Texas, Regulation Water District Revenue Bonds, PFLOATS, Series 3425, (FGIC/MERRILL LYNCH CAPITAL SERVICES), 3.95% 03/01/28(a)(b) | | | 18,695,000 |
| | 20,000,000 | | Tennessee State, School Building Authority Commercial Paper, Series A, 3.65% 11/01/07 | | | 20,000,000 |
| | 2,960,000 | | Texas State, General Obligation Bonds, PUTTERS, Series 1645, (BANK OF NEW YORK), 3.89% 10/01/14(a)(b) | | | 2,960,000 |
| | 20,785,000 | | Texas State, PFLOATS, Series 4177, (MERRILL LYNCH CAPITAL SERVICES), 3.93% 04/01/37(a)(b) | | | 20,785,000 |
| | 13,425,000 | | Texas State, Reset Optional Certificates Trust II-R, ROCS, Series 4083, (CITIGROUP FINANCIAL PRODUCTS), 3.92% 04/01/35(a)(b) | | | 13,425,000 |
| | 30,200,000 | | Texas State, Southwest Higher Education Authority Revenue, Southern Methodist University, (BANK OF NEW YORK), 3.85% 10/01/36(a)(b) | | | 30,200,000 |
| | 20,000,000 | | Texas State, Transportation Commission Revenue Bonds, 4.50% 08/28/08 | | | 20,143,528 |
| | 10,980,000 | | Texas State, Transportation Commission Revenue Bonds, PUTTERS, Series 1324, (JPMORGAN CHASE BANK), 3.92% 04/01/14(a)(b) | | | 10,980,000 |
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
TAX-EXEMPT CASH EQUIVALENT
SECURITIES — (continued) |
| $ | 8,700,000 | | Thurston County, Washington, School District General Obligation Bonds, PUTTERS, Series 1108, (MBIA/JPMORGAN CHASE BANK), 3.92% 06/01/13(a)(b) | | $ | 8,700,000 |
| | 10,155,000 | | Union County, North Carolina, ROCS, Series 11194, (MBIA/CITIBANK N.A.), 3.92% 03/01/20(a)(b) | | | 10,155,000 |
| | 10,000,000 | | University of Missouri, Curators Systems Facilities Revenue, PUTTERS, Series 1978, (JPMORGAN CHASE BANK), 3.92% 05/01/15(a)(b) | | | 10,000,000 |
| | 32,000,000 | | University of North Carolina, Board of Governors Commercial Paper, Series 2004-B,
3.70% 12/11/07 | | | 32,000,000 |
| | 30,400,000 | | University of North Carolina, Board of Governors Commercial Paper, Series A, 3.62% 10/10/07 | | | 30,394,317 |
| | 10,063,000 | | University of Texas, North University Revenue Bonds, Series A, 3.57% 11/08/07(c) | | | 10,063,000 |
| | 16,700,000 | | University of Texas, Permanent University Fund Revenue Bonds, Floating Rate Certificates, Series 1574, (RABOBANK NEDERLAND), 3.91% 07/01/26(a)(b) | | | 16,700,000 |
| | 19,000,000 | | University of Texas, University Revenue Bonds, Series A 3.65% 12/12/07(c) | | | 19,000,000 |
| | 25,000,000 | | 3.83% 10/02/07(c) | | | 24,999,875 |
| | 20,760,000 | | Utah Transportation Authority Sales Tax, PFLOATS, PZ261, (MBIA/MERRILL LYNCH CAPITAL SERVICES), 3.96% 06/15/28(a)(b) | | | 20,760,000 |
See Notes to Financial Statements.
22
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Tax-Exempt Money Fund — (continued)
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
TAX-EXEMPT CASH EQUIVALENT
SECURITIES — (continued) |
| $ | 21,170,000 | | Valdez, Alaska, Marine Terminal Revenue, BP Pipeline, Inc., Series A, 4.05% 06/01/37(a) | | $ | 21,170,000 |
| | 10,000,000 | | Valdez, Alaska, Marine Terminal Revenue, BP Pipeline, Inc., Series B, 4.05% 07/01/37(a) | | | 10,000,000 |
| | 14,224,500 | | Virginia Commonwealth, Transportation Board Revenue Bonds, Floating Rate Certificates, Series 727, (MORGAN STANLEY), 3.91% 05/15/19(a)(b) | | | 14,224,500 |
| | 25,966,000 | | Washington State, General Obligation Bonds, Floating Rate Certificates, Series 1161, (AMBAC/MORGAN STANLEY), 3.91% 07/01/24(a)(b) | | | 25,966,000 |
| | 7,590,000 | | Washington State, General Obligation Bonds, P-Floats, PT 3863, (AMBAC/MERRILL LYNCH), 3.95% 01/01/22(a)(b) | | | 7,590,000 |
| | 12,145,000 | | Washington State, General Obligation Bonds, P-Floats, PT 3874, (FSA/MERRILL LYNCH), 3.95% 01/01/30(a)(b) | | | 12,145,000 |
| | 9,745,000 | | Washoe County, Nevada, General Obligation Bonds, Floating Rate Certificates, Series 1241, (MBIA/MORGAN STANLEY), 3.91% 01/01/35(a)(b) | | | 9,745,000 |
| | 15,170,000 | | Wisconsin State, Clean Water Revenue Bonds, PFLOATS, Series 1509, (JPMORGAN CHASE BANK), 3.92% 06/01/13(a)(b) | | | 15,170,000 |
| | 6,830,000 | | Wisconsin State, PFLOATS, Series PT 3929, (FGIC/MERRILL LYNCH CAPITAL SERVICES), 3.95% 07/01/26(a)(b) | | | 6,830,000 |
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
TAX-EXEMPT CASH EQUIVALENT
SECURITIES — (continued) |
| $ | 11,000,000 | | Wisconsin State, Transportation Authority Revenue Commercial Paper, Series 97 A, (STATE STREET/CALIFORNIA STATE TEACHERS RETIREMENT), 3.68% 12/06/07 | | $ | 11,000,000 |
| | 39,643,000 | | Wisconsin State, Transportation Authority Revenue Extendible Commercial Paper, Series 2006 B,
3.62% 10/05/07 | | | 39,643,000 |
| | 29,000,000 | | 3.73% 10/05/07 | | | 29,000,000 |
| | 9,345,000 | | York County, South Carolina, School District 4 General Obligation Bonds, Fort Mill, ROCS, Series F, (GOLDMAN SACHS), 3.90% 03/09/12(a)(b) | | | 9,345,000 |
| | | | | | |
| | | TOTAL TAX-EXEMPT CASH EQUIVALENT SECURITIES
(Cost $1,867,080,733) | | | 1,867,080,733 |
| | | | | | |
TAX-EXEMPT CASH EQUIVALENT SECURITIES —
BACKED BY LETTERS OF CREDIT — 8.31% |
| | 15,000,000 | | Atlanta, Georgia, Metropolitan Transit Authority, Sales Tax Commercial Paper, Series A, (DEXIA CREDIT LOCAL), 3.67% 12/11/07(c) | | | 15,000,000 |
| | 30,000,000 | | 3.63% 12/06/07(c) | | | 30,000,000 |
| | 29,899,811 | | Baltimore, Maryland, Port Facilities Revenue Bonds, Occidental Petroleum Corp., (BNP PARIBAS), 3.55% 10/14/11(a) | | | 29,899,811 |
| | 20,000,000 | | Colorado State, Regional Transportation District, Commercial Paper, Series 2001 A, (LOC: WESTDEUTSCHE BANK),
3.62% 10/05/07 | | | 20,000,000 |
See Notes to Financial Statements.
23
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Tax-Exempt Money Fund — (continued)
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
TAX-EXEMPT CASH EQUIVALENT SECURITIES —
BACKED BY LETTERS OF CREDIT — (continued) |
| $ | 18,000,000 | | Des Moines, Iowa, Hospital Facilities Authority Revenue Bonds, Methodist Medical Center Project, (WACHOVIA BANK N.A.), 3.88% 08/01/15(a) | | $ | 18,000,000 |
| | 7,000,000 | | Kenton County, Kentucky, Industrial Building Authority Revenue Bonds, Redken Labs, Inc., Project, (MORGAN GUARANTY TRUST), 3.85% 12/01/14(a) | | | 7,000,000 |
| | 40,000,000 | | Michigan State, Building Authority Revenue Bonds, Commercial Paper, Series 5, (LOC: STATE STREET BANK/BANK OF NEW YORK), 3.72% 11/20/07(c) | | | 40,000,000 |
| | 10,000,000 | | New Jersey State, Economic Development Authority, Series R-1, (BANK OF NOVA SCOTIA/LLOYDS TSB BANK PLC), 4.00% 09/01/31(a) | | | 10,000,000 |
| | | | | | |
| | | TOTAL TAX-EXEMPT CASH EQUIVALENT SECURITIES — BACKED BY LETTERS OF CREDIT
(Cost $169,899,811) | | | 169,899,811 |
| | | | | | |
| | | | | |
Shares | | | | Value |
| | | | | |
| REGISTERED INVESTMENT COMPANIES — 0.04% |
| 867,271 | | BlackRock Muni Fund
(7 day yield of 3.61%) | | $ | 867,271 |
| 1 | | Dreyfus Tax-Exempt Cash Fund
(7 day yield of 3.63%) | | | 1 |
| | | | | |
| | TOTAL REGISTERED INVESTMENT COMPANIES
(Cost $867,272) | | | 867,272 |
| | | | | |
| | | | | | |
TOTAL INVESTMENTS
(Cost $2,037,847,816)(d) | | 99.69 | % | | $ | 2,037,847,816 |
OTHER ASSETS IN EXCESS OF LIABILITIES | | 0.31 | | | | 6,378,063 |
| | | | | | |
NET ASSETS | | 100.00 | % | | $ | 2,044,225,879 |
| | | | | | |
| (a) | Variable rate obligation maturing in more than one year. These securities are secured by letters of credit or other credit support agreements from banks. The interest rate is changed periodically and the interest rate shown reflects the rate at September 30, 2007. |
| (b) | Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2007, these securities, which are not illiquid, amounted to $849,469,500, which represents 41.55% of net assets. |
| (c) | The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007. |
| (d) | Cost for federal income tax purposes is $2,037,847,816. |
AMBAC—Ambac Assurance Corp.
FGIC—Financial Guaranty Insurance Co.
FSA—Financial Security Assurance, Inc.
LOC—Letter of Credit
MBIA—MBIA Insurance Corp.
PUTTERS—Puttable Tax Exempt Receipts
PFLOATS—Puttable Floating Option Tax-Exempt Receipts
ROCS—Reset Option Certificates
See Notes to Financial Statements.
24
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Tax-Exempt Money Fund — (continued)
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | |
State Diversification | | % of
Net
Assets | | Value |
Texas | | 21.07 | | $ | 430,705,447 |
Illinois | | 6.48 | | | 132,405,040 |
Colorado | | 6.14 | | | 125,430,000 |
Florida | | 5.63 | | | 115,005,000 |
Utah | | 5.32 | | | 108,660,000 |
North Carolina | | 5.11 | | | 104,424,318 |
Wisconsin | | 4.97 | | | 101,643,000 |
Maryland | | 4.71 | | | 96,299,811 |
Michigan | | 4.44 | | | 90,695,000 |
Massachusetts | | 4.07 | | | 83,198,428 |
Missouri | | 3.50 | | | 71,555,000 |
Washington | | 3.33 | | | 67,971,000 |
Georgia | | 3.04 | | | 62,140,000 |
Louisiana | | 2.15 | | | 44,000,000 |
Nevada | | 2.05 | | | 41,845,000 |
Tennessee | | 1.89 | | | 38,660,000 |
Oregon | | 1.71 | | | 35,035,000 |
Iowa | | 1.60 | | | 32,700,000 |
Arkansas | | 1.52 | | | 31,170,000 |
Hawaii | | 1.51 | | | 30,885,000 |
Pennsylvania | | 1.45 | | | 29,555,000 |
South Carolina | | 1.34 | | | 27,385,000 |
Arizona | | 1.29 | | | 26,444,000 |
Kentucky | | 0.83 | | | 17,000,000 |
Connecticut | | 0.75 | | | 15,295,000 |
Wyoming | | 0.74 | | | 15,200,000 |
Indiana | | 0.73 | | | 15,000,000 |
Minnesota | | 0.73 | | | 15,000,000 |
Virginia | | 0.70 | | | 14,224,500 |
New Jersey | | 0.49 | | | 10,000,000 |
Oklahoma | | 0.36 | | | 7,450,000 |
Registered Investment Companies | | 0.04 | | | 867,272 |
| | | | | |
Total Investments | | 99.69 | | $ | 2,037,847,816 |
Other Assets in Excess of Liabilities | | 0.31 | | | 6,378,063 |
| | | | | |
Net Assets | | 100.00 | | $ | 2,044,225,879 |
| | | | | |
See Notes to Financial Statements.
25
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Treasury Money Fund
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
| U.S. GOVERNMENT & AGENCY OBLIGATION — 16.79% |
| $ | 63,000,000 | | Federal Home Loan Bank, Discount Note, 4.00% 10/01/07 | | $ | 63,000,000 |
| | | | | | |
| | | TOTAL U.S. GOVERNMENT & AGENCY OBLIGATION
(Cost $63,000,000) | | | 63,000,000 |
| | | | | | |
| U.S. TREASURY OBLIGATIONS — 83.03% |
| | 30,000,000 | | 3.33% 10/18/07(a) | | | 29,952,966 |
| | 50,000,000 | | 3.45% 11/08/07(a) | | | 49,819,791 |
| | 25,000,000 | | 3.50% 11/29/07(a) | | | 24,856,679 |
| | 25,000,000 | | 3.53% 11/15/07(a) | | | 24,892,813 |
| | 25,000,000 | | 3.55% 11/23/07(a) | | | 24,870,076 |
| | 25,000,000 | | 3.55% 12/20/07(a) | | | 24,804,167 |
| | 10,000,000 | | 3.68% 12/27/07(a) | | | 9,911,067 |
| | 40,000,000 | | 3.88% 12/06/07(a) | | | 39,700,891 |
| | 10,000,000 | | 3.90% 12/06/07(a) | | | 9,928,546 |
| | 13,000,000 | | 4.04% 12/20/07(a) | | | 12,883,433 |
| | 10,000,000 | | 4.38% 01/31/08 | | | 10,006,808 |
| | 20,000,000 | | 4.87% 10/04/07(a) | | | 19,991,880 |
| | 30,000,000 | | 4.88% 11/01/07(a) | | | 29,904,012 |
| | | | | | |
| | | TOTAL U.S. TREASURY OBLIGATIONS
(Cost $311,523,129) | | | 311,523,129 |
| | | | | | |
| | | | | |
Shares | | | | Value |
| | | | | |
| REGISTERED INVESTMENT COMPANY — 0.42% |
| 1,583,319 | | Dreyfus Treasury Prime Cash Management Fund
(7-day yield of 3.23%) | | $ | 1,583,319 |
| | | | | |
| | TOTAL REGISTERED INVESTMENT COMPANY (Cost $1,583,319) | | | 1,583,319 |
| | | | | |
| | | | | | | | | |
TOTAL INVESTMENTS
(Cost $376,106,448)(b) | | 100.24 | % | | $ | 376,106,448 | |
OTHER LIABILITIES IN EXCESS OF ASSETS | | (0.24 | ) | | | (914,726 | ) |
| | | | | | | |
NET ASSETS | | 100.00 | % | | $ | 375,191,722 | |
| | | | | | | |
| (a) | The rate shown represents the annualized yield at the date of purchase. |
| (b) | Cost for federal income tax purposes is $376,106,448. |
Discount Note—The rate reported is the discount rate at the time of purchase.
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | | | |
Portfolio Diversification | | % of
Net
Assets | | | Value | |
U.S. Treasury Obligations | | 83.03 | | | $ | 311,523,129 | |
U.S. Government & Agency Obligation | | 16.79 | | | | 63,000,000 | |
Registered Investment Company | | 0.42 | | | | 1,583,319 | |
| | | | | | | |
Total Investments | | 100.24 | | | $ | 376,106,448 | |
Other Liabilities in Excess of Assets | | (0.24 | ) | | | (914,726 | ) |
| | | | | | | |
Net Assets | | 100.00 | | | $ | 375,191,722 | |
| | | | | | | |
See Notes to Financial Statements.
26
Excelsior Funds
Statements of Assets and Liabilities
September 30, 2007 (Unaudited)
| | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | Government
Money
Fund | | | Money
Fund | | | New York
Tax-Exempt
Money
Fund | | Tax-Exempt
Money
Fund | | | Treasury
Money
Fund | |
ASSETS | | | | | | | | | | | | | | | | | | | |
Investments (including repurchase agreements), at identified cost | | $ | 352,075,329 | | | $ | 1,172,656,627 | | | $ | 435,684,431 | | $ | 2,037,847,816 | | | $ | 376,106,448 | |
| | | | | | | | | | | | | | | | | | | |
Investments (excluding repurchase agreements), at amortized cost approximating value | | | 218,075,329 | | | | 1,049,656,627 | | | | 435,684,431 | | | 2,037,847,816 | | | | 376,106,448 | |
Repurchase agreements, at value | | | 134,000,000 | | | | 123,000,000 | | | | — | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | |
Total investments, at value | | $ | 352,075,329 | | | $ | 1,172,656,627 | | | $ | 435,684,431 | | $ | 2,037,847,816 | | | $ | 376,106,448 | |
| | | | | |
Receivable for: | | | | | | | | | | | | | | | | | | | |
Investments sold | | | — | | | | — | | | | 7,414,813 | | | — | | | | — | |
Fund shares sold | | | 5,014 | | | | 99,935 | | | | 4,400 | | | 500 | | | | 237 | |
Interest | | | 929,715 | | | | 1,649,427 | | | | 3,483,869 | | | 14,984,946 | | | | 73,695 | |
Dividends | | | 9,003 | | | | 17,734 | | | | 3,932 | | | 58,793 | | | | 7,010 | |
Expense reimbursement due from Investment Advisor | | | 21,723 | | | | 75,820 | | | | 112,271 | | | 128,555 | | | | 27,498 | |
Prepaid expenses | | | 15,797 | | | | 69,664 | | | | 26,034 | | | 115,797 | | | | 15,590 | |
| | | | | | | | | | | | | | | | | | | |
Total assets | | $ | 353,056,581 | | | $ | 1,174,569,207 | | | $ | 446,729,750 | | $ | 2,053,136,407 | | | $ | 376,230,478 | |
LIABILITIES | | | | | | | | | | | | | | | | | | | |
Payable for: | | | | | | | | | | | | | | | | | | | |
Investments purchased | | | — | | | | — | | | | 673,424 | | | 723,661 | | | | — | |
Fund shares repurchased | | | — | | | | 4,365 | | | | — | | | 1,507,272 | | | | 3,453 | |
Distributions | | | 1,076,414 | | | | 3,516,777 | | | | 1,021,802 | | | 5,345,825 | | | | 695,943 | |
Investment advisory fee | | | 64,024 | | | | 239,619 | | | | 188,723 | | | 429,723 | | | | 94,270 | |
Administration fee | | | 22,846 | | | | 92,735 | | | | 34,080 | | | 169,326 | | | | 27,880 | |
Transfer agent fee | | | 2,594 | | | | 7,425 | | | | 1,236 | | | 2,685 | | | | 1,901 | |
Pricing and bookkeeping fees | | | 3,813 | | | | 6,642 | | | | 3,357 | | | 6,958 | | | | 4,139 | |
Trustees’/Directors’ fees | | | — | | | | 431 | | | | — | | | 8,817 | | | | — | |
Custody fee | | | 10,696 | | | | 58,542 | | | | 6,623 | | | 49,485 | | | | 7,979 | |
Legal fee | | | 29,035 | | | | 99,874 | | | | 30,177 | | | 129,298 | | | | 25,524 | |
Registration fee | | | 26,390 | | | | 46,939 | | | | 2,574 | | | 23,189 | | | | 21,744 | |
Shareholder servicing fee | | | 66,989 | | | | 210,940 | | | | 136,567 | | | 449,316 | | | | 138,543 | |
Other liabilities | | | 26,982 | | | | 96,389 | | | | 23,433 | | | 64,973 | | | | 17,380 | |
| | | | | | | | | | | | | | | | | | | |
Total liabilities | | $ | 1,329,783 | | | $ | 4,380,678 | | | $ | 2,121,996 | | $ | 8,910,528 | | | $ | 1,038,756 | |
| | | | | | | | | | | | | | | | | | | |
NET ASSETS | | $ | 351,726,798 | | | $ | 1,170,188,529 | | | $ | 444,607,754 | | $ | 2,044,225,879 | | | $ | 375,191,722 | |
| | | | | | | | | | | | | | | | | | | |
NET ASSETS CONSIST OF | | | | | | | | | | | | | | | | | | | |
Par value | | $ | 351,817 | | | $ | 1,170,434 | | | $ | 444,578 | | $ | 2,044,295 | | | $ | 375,206 | |
Paid-in capital in excess of par value | | | 351,393,280 | | | | 1,169,058,550 | | | | 444,132,175 | | | 2,042,149,658 | | | | 374,820,451 | |
Undistributed (overdistributed) net investment income | | | — | | | | (13 | ) | | | 31,001 | | | 53,529 | | | | (6,247 | ) |
Accumulated net realized gain (loss) | | | (18,299 | ) | | | (40,442 | ) | | | — | | | (21,603 | ) | | | 2,312 | |
| | | | | | | | | | | | | | | | | | | |
NET ASSETS | | $ | 351,726,798 | | | $ | 1,170,188,529 | | | $ | 444,607,754 | | $ | 2,044,225,879 | | | $ | 375,191,722 | |
| | | | | | | | | | | | | | | | | | | |
Shares | | | | | | | | | | | | | | | | | | | |
Net assets | | $ | 351,726,798 | | | $ | 574,902,385 | | | $ | 444,607,754 | | $ | 2,044,225,879 | | | $ | 375,191,722 | |
Shares outstanding | | | 351,817,226 | | | | 575,145,391 | | | | 444,578,113 | | | 2,044,294,939 | | | | 375,205,877 | |
Net asset value and offering price per share | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | $ | 1.00 | | | $ | 1.00 | |
Institutional Shares | | | | | | | | | | | | | | | | | | | |
Net assets | | | — | | | $ | 595,286,144 | | | | — | | | — | | | | — | |
Shares outstanding | | | — | | | | 595,288,155 | | | | — | | | — | | | | — | |
Net asset value and offering price per share | | | — | | | $ | 1.00 | | | | — | | | — | | | | — | |
See Notes to Financial Statements.
27
Excelsior Funds
Statements of Operations
For the Six Months Ended September 30, 2007 (Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | Government
Money
Fund | | | Money
Fund | | | New York
Tax-Exempt
Money
Fund | | | Tax-Exempt
Money
Fund | | | Treasury
Money
Fund | |
INVESTMENT INCOME | | | | | | | | | | | | | | | | | | | | |
Interest | | $ | 7,607,265 | | | $ | 31,908,244 | | | $ | 8,548,372 | | | $ | 37,570,580 | | | $ | 7,506,662 | |
Dividends | | | 86,228 | | | | 116,073 | | | | 14,137 | | | | 128,163 | | | | 77,916 | |
| | | | | | | | | | | | | | | | | | | | |
Total Investment Income | | | 7,693,493 | | | | 32,024,317 | | | | 8,562,509 | | | | 37,698,743 | | | | 7,584,578 | |
EXPENSES | | | | | | | | | | | | | | | | | | | | |
Investment advisory fee | | | 370,499 | | | | 1,501,032 | | | | 1,151,221 | | | | 2,530,062 | | | | 481,184 | |
Administration fee | | | 219,865 | | | | 900,073 | | | | 342,819 | | | | 1,521,205 | | | | 237,862 | |
Shareholder servicing fee — Shares | | | 370,499 | | | | 755,691 | | | | 575,611 | | | | 2,530,062 | | | | 401,091 | |
Transfer agent fee | | | 11,961 | | | | 53,717 | | | | 11,996 | | | | 14,502 | | | | 11,604 | |
Pricing and bookkeeping fees | | | 4,622 | | | | 6,725 | | | | 10,655 | | | | 17,154 | | | | 5,028 | |
Trustees’/Directors’ fees | | | 8,770 | | | | 19,885 | | | | 10,556 | | | | 29,852 | | | | 8,883 | |
Custody fees | | | 6,956 | | | | 44,109 | | | | 18,146 | | | | 68,558 | | | | 27,551 | |
Other expenses | | | 29,510 | | | | 90,959 | | | | 46,790 | | | | 132,555 | | | | 33,139 | |
| | | | | | | | | | | | | | | | | | | | |
Total Expenses | | | 1,022,682 | | | | 3,372,191 | | | | 2,167,794 | | | | 6,843,950 | | | | 1,206,342 | |
Fees waived/reimbursed by: | | | | | | | | | | | | | | | | | | | | |
Investment Advisor | | | (169,551 | ) | | | (646,284 | ) | | | (723,790 | ) | | | (1,004,026 | ) | | | (184,123 | ) |
Administrator | | | (37,826 | ) | | | (152,658 | ) | | | (58,840 | ) | | | (259,464 | ) | | | (42,976 | ) |
Custody earnings credit | | | (205 | ) | | | (16,321 | ) | | | (3,703 | ) | | | (16,196 | ) | | | (16,880 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net Expenses | | | 815,100 | | | | 2,556,928 | | | | 1,381,461 | | | | 5,564,264 | | | | 962,363 | |
| | | | | | | | | | | | | | | | | | | | |
NET INVESTMENT INCOME | | | 6,878,393 | | | | 29,467,389 | | | | 7,181,048 | | | | 32,134,479 | | | | 6,622,215 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
NET REALIZED GAIN ON INVESTMENTS | | | 6,384 | | | | 2,996 | | | | — | | | | 27,936 | | | | 2,312 | |
| | | | | | | | | | | | | | | | | | | | |
Net Increase Resulting from Operations | | $ | 6,884,777 | | | $ | 29,470,385 | | | $ | 7,181,048 | | | $ | 32,162,415 | | | $ | 6,624,527 | |
| | | | | | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
28
[THIS PAGE INTENTIONALLY LEFT BLANK]
29
Excelsior Funds
Statements of Changes in Net Assets
| | | | | | | | | | | | | | | | |
| | |
| | | Government Money Fund | | | Money Fund | |
Increase (Decrease) in Net Assets | | (Unaudited) Six Months Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | | | (Unaudited) Six Months Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | |
Operations | | | | | | | | | | | | | | | | |
Net investment income | | $ | 6,878,393 | | | $ | 15,053,710 | | | $ | 29,467,389 | | | $ | 64,755,001 | |
Net realized gain (loss) on investments | | | 6,384 | | | | 2,904 | | | | 2,996 | | | | (2,912 | ) |
| | | | | | | | | | | | | | | | |
Net increase resulting from operations | | | 6,884,777 | | | | 15,056,614 | | | | 29,470,385 | | | | 64,752,089 | |
| | | | | | | | | | | | | | | | |
Distributions to Shareholders | | | | | | | | | | | | | | | | |
From net investment income: | | | | | | | | | | | | | | | | |
Shares | | | (6,887,028 | ) | | | (15,045,075 | ) | | | (14,488,978 | ) | | | (38,623,273 | ) |
Institutional Shares | | | — | | | | — | | | | (15,005,982 | ) | | | (26,104,170 | ) |
| | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | (6,887,028 | ) | | | (15,045,075 | ) | | | (29,494,960 | ) | | | (64,727,443 | ) |
| | | | | | | | | | | | | | | | |
Net Capital Share Transactions | | | 109,251,900 | | | | (167,762,345 | ) | | | (86,863,483 | ) | | | (298,083,731 | ) |
| | | | | | | | | | | | | | | | |
Net increase (decrease) in net assets | | | 109,249,649 | | | | (167,750,806 | ) | | | (86,888,058 | ) | | | (298,059,085 | ) |
| | | | | | | | | | | | | | | | |
NET ASSETS | | | | | | | | | | | | | | | | |
Beginning of period | | $ | 242,477,149 | | | $ | 410,227,955 | | | $ | 1,257,076,587 | | | $ | 1,555,135,672 | |
| | | | | | | | | | | | | | | | |
End of period | | $ | 351,726,798 | | | $ | 242,477,149 | | | $ | 1,170,188,529 | | | $ | 1,257,076,587 | |
| | | | | | | | | | | | | | | | |
Undistributed (overdistributed) net investment income at end of period | | $ | — | | | $ | 8,635 | | | $ | (13 | ) | | $ | 27,558 | |
| | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
30
| | | | | | | | | | | | | | | | | | | | | | |
| | |
| New York Tax-Exempt Money Fund | | | Tax-Exempt Money Fund | | | Treasury Money Fund | |
(Unaudited)
Six Months Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | | | (Unaudited)
Six Months Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | | | (Unaudited)
Six Months Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | |
| | | | | | | | | | | | | | | | | | | | | | |
| $ | 7,181,048 | | | $ | 12,932,633 | | | $ | 32,134,479 | | | $ | 64,143,597 | | | $ | 6,622,215 | | | $ | 14,030,831 | |
| | — | | | | 770 | | | | 27,936 | | | | (5,092 | ) | | | 2,312 | | | | 5,100 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | 7,181,048 | | | | 12,933,403 | | | | 32,162,415 | | | | 64,138,505 | | | | 6,624,527 | | | | 14,035,931 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | (7,160,685 | ) | | | (12,927,606 | ) | | | (32,090,389 | ) | | | (64,113,972 | ) | | | (6,631,116 | ) | | | (14,033,835 | ) |
| | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | (7,160,685 | ) | | | (12,927,606 | ) | | | (32,090,389 | ) | | | (64,113,972 | ) | | | (6,631,116 | ) | | | (14,033,835 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| | (12,867,204 | ) | | | 9,583,689 | | | | (66,456,899 | ) | | | (51,587,116 | ) | | | 69,128,396 | | | | (59,619,992 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| | (12,846,841 | ) | | | 9,589,486 | | | | (66,384,873 | ) | | | (51,562,583 | ) | | | 69,121,807 | | | | (59,617,896 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| $ | 457,454,595 | | | $ | 447,865,109 | | | $ | 2,110,610,752 | | | $ | 2,162,173,335 | | | $ | 306,069,915 | | | $ | 365,687,811 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| $ | 444,607,754 | | | $ | 457,454,595 | | | $ | 2,044,225,879 | | | $ | 2,110,610,752 | | | $ | 375,191,722 | | | $ | 306,069,915 | |
| | | | | | | | | | | | | | | | | | | | | | | |
$ |
31,001 |
| | $ | 10,638 | | | $ | 53,529 | | | $ | 9,439 | | | $ | (6,247 | ) | | $ | 2,654 | |
| | | | | | | | | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
31
Excelsior Funds
Statements of Changes in Net Assets—Capital Stock Activity
| | | | | | | | | | | | |
| |
| | | Government Money Fund | |
| | | (Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | |
Changes in Shares | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
Shares | | | | | | | | | | | | |
Subscriptions | | 1,641,924,536 | | | 1,641,924,537 | | | 2,027,068,990 | | | 2,027,068,990 | |
Distributions reinvested | | 386,855 | | | 386,855 | | | 697,510 | | | 697,510 | |
Redemptions | | (1,533,059,492 | ) | | (1,533,059,492 | ) | | (2,195,528,845 | ) | | (2,195,528,845 | ) |
| | | | | | | | | | | | |
Net increase (decrease) | | 109,251,899 | | | 109,251,900 | | | (167,762,345 | ) | | (167,762,345 | ) |
| | | | | | | | | | | | |
Institutional Shares | | | | | | | | | | | | |
Subscriptions | | — | | | — | | | — | | | — | |
Distributions reinvested | | — | | | — | | | — | | | — | |
Redemptions | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | |
Net increase (decrease) | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | |
See Notes to Financial Statements.
32
| | | | | | | | | | | | | | | | | | | | | | |
| |
| Money Fund | | | New York Tax-Exempt
Money Fund | |
(Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | | | (Unaudited) Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | |
| Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
| | | | | | | | | | | | | | | | | | | | | | |
| 978,506,286 | | | 978,506,286 | | | 2,599,472,390 | | | 2,599,472,390 | | | 1,514,717,466 | | | 1,514,717,461 | | | 2,519,812,784 | | | 2,519,812,784 | |
| 2,070,292 | | | 2,070,301 | | | 3,330,030 | | | 3,330,030 | | | 1,326,079 | | | 1,326,080 | | | 1,815,110 | | | 1,815,110 | |
| (1,050,175,172 | ) | | (1,050,175,174 | ) | | (2,990,685,747 | ) | | (2,990,685,747 | ) | | (1,528,910,299 | ) | | (1,528,910,745 | ) | | (2,512,044,205 | ) | | (2,512,044,205 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| (69,598,594 | ) | | (69,598,587 | ) | | (387,883,327 | ) | | (387,883,327 | ) | | (12,866,754 | ) | | (12,867,204 | ) | | 9,583,689 | | | 9,583,689 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| 2,123,476,337 | | | 2,123,476,337 | | | 4,262,737,772 | | | 4,262,737,772 | | | — | | | — | | | — | | | — | |
| 6,941,966 | | | 6,941,966 | | | 9,160,704 | | | 9,160,704 | | | — | | | — | | | — | | | — | |
| (2,147,683,199 | ) | | (2,147,683,199 | ) | | (4,182,098,880 | ) | | (4,182,098,880 | ) | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| (17,264,896 | ) | | (17,264,896 | ) | | 89,799,596 | | | 89,799,596 | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
33
Excelsior Funds
Statements of Changes in Net Assets—Capital Stock Activity — (continued)
| | | | | | | | | | | | |
| |
| | | Tax-Exempt Money Fund | |
| | | (Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | |
Changes in Shares | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
Shares | | | | | | | | | | | | |
Subscriptions | | 4,482,316,341 | | | 4,482,316,345 | | | 9,783,446,469 | | | 9,783,446,469 | |
Distributions reinvested | | 1,372,129 | | | 1,372,129 | | | 2,484,144 | | | 2,484,144 | |
Redemptions | | (4,550,145,373 | ) | | (4,550,145,373 | ) | | (9,837,517,729 | ) | | (9,837,517,729 | ) |
| | | | | | | | | | | | |
Net increase (decrease) | | (66,456,903 | ) | | (66,456,899 | ) | | (51,587,116 | ) | | (51,587,116 | ) |
| | | | | | | | | | | | |
See Notes to Financial Statements.
34
| | | | | | | | | | |
|
| Treasury Money Fund | |
(Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | |
| Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
| | | | | | | | | | |
| 914,539,853 | | | 914,539,853 | | | 1,744,655,262 | | | 1,744,655,262 | |
| 2,786,433 | | | 2,786,433 | | | 4,178,107 | | | 4,178,107 | |
| (848,197,797 | ) | | (848,197,890 | ) | | (1,808,453,361 | ) | | (1,808,453,361 | ) |
| | | | | | | | | | | |
| 69,128,489 | | | 69,128,396 | | | (59,619,992 | ) | | (59,619,992 | ) |
| | | | | | | | | | | |
See Notes to Financial Statements.
35
Financial Highlights – Government Money Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited)
Six Months
Ended
September 30,
2007 | | | Year Ended March 31, | |
| | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.02330 | (a) | | | 0.04610 | (a) | | | 0.03152 | (a) | | | 0.01250 | (a) | | | 0.00625 | | | | 0.01199 | |
Net realized and unrealized gain (loss) on investments | | | — | | | | 0.00025 | | | | 0.00024 | | | | 0.00003 | | | | — | | | | (0.00039 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.02330 | | | | 0.04635 | | | | 0.03176 | | | | 0.01253 | | | | 0.00625 | | | | 0.01160 | |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.02330 | ) | | | (0.04635 | ) | | | (0.03176 | ) | | | (0.01253 | ) | | | (0.00625 | ) | | | (0.01160 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Total return (b)(c) | | | 2.35 | %(d) | | | 4.74 | % | | | 3.22 | % | | | 1.26 | % | | | 0.63 | % | | | 1.17 | % |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (e) | | | 0.55 | %(f) | | | 0.55 | % | | | 0.53 | % | | | 0.46 | % | | | 0.45 | % | | | 0.39 | % |
Waiver/Reimbursement | | | 0.14 | %(f) | | | 0.15 | % | | | 0.16 | % | | | 0.25 | % | | | 0.09 | % | | | 0.08 | % |
Net investment income (e) | | | 4.65 | %(f) | | | 4.61 | % | | | 3.15 | % | | | 1.25 | % | | | 0.62 | % | | | 1.21 | % |
Net assets, end of period (000’s) | | $ | 351,727 | | | $ | 242,477 | | | $ | 410,228 | | | $ | 496,027 | | | $ | 544,721 | | | $ | 594,496 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (c) | Total return at net asset value assuming all distributions reinvested. |
| (e) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
36
Financial Highlights – Money Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited)
Six Months
Ended
September 30,
2007 | | | Year Ended March 31, | |
| | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.02474 | (a) | | | 0.04691 | (a) | | | 0.03207 | (a) | | | 0.01275 | (a) | | | 0.00662 | | | | 0.01255 | |
Net realized and unrealized gain (loss) on investments | | | — | | | | 0.00019 | | | | 0.00015 | | | | 0.00010 | | | | — | | | | (0.00010 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.02474 | | | | 0.04710 | | | | 0.03222 | | | | 0.01285 | | | | 0.00662 | | | | 0.01245 | |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.02474 | ) | | | (0.04710 | ) | | | (0.03222 | ) | | | (0.01285 | ) | | | (0.00662 | ) | | | (0.01245 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Total return (b)(c) | | | 2.42 | %(d) | | | 4.81 | % | | | 3.27 | % | | | 1.29 | % | | | 0.66 | % | | | 1.25 | % |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (e) | | | 0.55 | %(f) | | | 0.55 | % | | | 0.53 | % | | | 0.46 | % | | | 0.45 | % | | | 0.39 | % |
Waiver/Reimbursement | | | 0.13 | %(f) | | | 0.13 | % | | | 0.16 | % | | | 0.24 | % | | | 0.28 | % | | | 0.04 | % |
Net investment income (e) | | | 4.80 | %(f) | | | 4.69 | % | | | 3.21 | % | | | 1.28 | % | | | 0.67 | % | | | 1.25 | % |
Net assets, end of period (000’s) | | $ | 574,902 | | | $ | 644,514 | | | $ | 1,032,384 | | | $ | 1,105,053 | | | $ | 1,141,562 | | | $ | 1,787,852 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (c) | Total return at net asset value assuming all distributions reinvested. |
| (e) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
37
Financial Highlights – New York Tax-Exempt Money Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited)
Six Months
Ended
September 30,
2007 | | | Year Ended March 31, | |
| | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.01560 | (a) | | | 0.02948 | (a) | | | 0.02150 | (a) | | | 0.00822 | (a) | | | 0.00491 | | | | 0.00884 | |
Net realized and unrealized gain (loss) on investments | | | — | | | | (0.00002 | ) | | | (0.00012 | ) | | | 0.00023 | | | | 0.00006 | | | | (0.00007 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.01560 | | | | 0.02946 | | | | 0.02138 | | | | 0.00845 | | | | 0.00497 | | | | 0.00877 | |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.01560 | ) | | | (0.02946 | ) | | | (0.02138 | ) | | | (0.00845 | ) | | | (0.00490 | ) | | | (0.00873 | ) |
From net realized gains | | | — | | | | — | | | | — | | | | — | | | | (0.00007 | ) | | | (0.00004 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | (0.01560 | ) | | | (0.02946 | ) | | | (0.02138 | ) | | | (0.00845 | ) | | | (0.00497 | ) | | | (0.00877 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Total return (b)(c) | | | 1.57 | %(d) | | | 2.99 | % | | | 2.16 | % | | | 0.85 | % | | | 0.50 | % | | | 0.88 | % |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (e) | | | 0.60 | %(f) | | | 0.60 | % | | | 0.60 | % | | | 0.55 | % | | | 0.50 | % | | | 0.44 | % |
Waiver/Reimbursement | | | 0.34 | %(f) | | | 0.34 | % | | | 0.34 | % | | | 0.42 | % | | | 0.25 | % | | | 0.05 | % |
Net investment income (e) | | | 3.13 | %(f) | | | 2.95 | % | | | 2.15 | % | | | 0.82 | % | | | 0.49 | % | | | 0.89 | % |
Net assets, end of period (000’s) | | $ | 444,608 | | | $ | 457,455 | | | $ | 447,865 | | | $ | 409,252 | | | $ | 490,099 | | | $ | 548,574 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (c) | Total return at net asset value assuming all distributions reinvested. |
| (e) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
38
Financial Highlights – Tax-Exempt Money Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited)
Six Months
Ended
September 30,
2007 | | | Year Ended March 31, | |
| | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.01589 | (a) | | | 0.03006 | (a) | | | 0.02229 | (a) | | | 0.00966 | (a) | | | 0.00546 | | | | 0.00967 | |
Net realized and unrealized gain (loss) on investments | | | 0.00001 | | | | (0.00001 | ) | | | — | | | | — | | | | 0.00029 | | | | (0.00002 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.01590 | | | | 0.03005 | | | | 0.02229 | | | | 0.00966 | | | | 0.00575 | | | | 0.00965 | |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.01590 | ) | | | (0.03005 | ) | | | (0.02225 | ) | | | (0.00966 | ) | | | (0.00560 | ) | | | (0.00964 | ) |
From net realized gains | | | — | | | | — | | | | (0.00004 | ) | | | — | | | | (0.00015 | ) | | | (0.00001 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | (0.01590 | ) | | | (0.03005 | ) | | | (0.02229 | ) | | | (0.00966 | ) | | | (0.00575 | ) | | | (0.00965 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Total return (b)(c) | | | 1.60 | %(d) | | | 3.05 | % | | | 2.25 | % | | | 0.97 | % | | | 0.58 | % | | | 0.97 | % |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (e) | | | 0.55 | %(f) | | | 0.55 | % | | | 0.53 | % | | | 0.46 | % | | | 0.44 | % | | | 0.39 | % |
Waiver/Reimbursement | | | 0.13 | %(f) | | | 0.12 | % | | | 0.15 | % | | | 0.23 | % | | | 0.14 | % | | | 0.15 | % |
Net investment income (e) | | | 3.18 | %(f) | | | 3.01 | % | | | 2.23 | % | | | 0.97 | % | | | 0.56 | % | | | 0.97 | % |
Net assets, end of period (000’s) | | $ | 2,044,226 | | | $ | 2,110,611 | | | $ | 2,162,173 | | | $ | 2,037,802 | | | $ | 2,044,676 | | | $ | 2,281,263 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (c) | Total return at net asset value assuming all distributions reinvested. |
| (e) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
39
Financial Highlights – Treasury Money Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited)
Six Months
Ended
September 30,
2007 | | | Year Ended March 31, | |
| | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.02069 | (a) | | | 0.04324 | (a) | | | 0.02855 | (a) | | | 0.00988 | (a) | | | 0.00484 | | | | 0.01085 | |
Net realized and unrealized gain on investments | | | — | | | | 0.00013 | | | | 0.00036 | | | | 0.00031 | | | | 0.00002 | | | | 0.00004 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.02069 | | | | 0.04337 | | | | 0.02891 | | | | 0.01019 | | | | 0.00486 | | | | 0.01089 | |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.02069 | ) | | | (0.04337 | ) | | | (0.02887 | ) | | | (0.01019 | ) | | | (0.00485 | ) | | | (0.01089 | ) |
From net realized gains | | | — | | | | — | | | | (0.00004 | ) | | | — | | | | (0.00001 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | (0.02069 | ) | | | (0.04337 | ) | | | (0.02891 | ) | | | (0.01019 | ) | | | (0.00486 | ) | | | (0.01089 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Total return (b)(c) | | | 2.10 | %(d) | | | 4.42 | % | | | 2.93 | % | | | 1.02 | % | | | 0.49 | % | | | 1.09 | % |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (e) | | | 0.60 | %(f) | | | 0.60 | % | | | 0.58 | % | | | 0.55 | % | | | 0.50 | % | | | 0.45 | % |
Waiver/Reimbursement | | | 0.14 | %(f) | | | 0.14 | % | | | 0.16 | % | | | 0.20 | % | | | 0.07 | % | | | 0.08 | % |
Net investment income (e) | | | 4.14 | %(f) | | | 4.32 | % | | | 2.86 | % | | | 0.99 | % | | | 0.49 | % | | | 1.08 | % |
Net assets, end of period (000’s) | | $ | 375,192 | | | $ | 306,070 | | | $ | 365,688 | | | $ | 428,008 | | | $ | 519,722 | | | $ | 571,998 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (c) | Total return at net asset value assuming all distributions reinvested. |
| (e) | The benefits derived from custody credits had an impact of 0.01%. |
See Notes to Financial Statements.
40
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS
September 30, 2007 (Unaudited)
Excelsior Funds, Inc. (“Excelsior Fund”) and Excelsior Tax-Exempt Funds, Inc. (“Excelsior Tax-Exempt Fund”) are each organized as a Maryland Corporation, and are registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as open-end management investment companies. Information presented in these financial statements pertains to the following funds (individually referred to as a “Fund”, collectively referred to as the “Funds”):
Excelsior Fund:
Government Money Fund
Money Fund
Treasury Money Fund
Excelsior Tax-Exempt Fund:
New York Tax-Exempt Money Fund
Tax-Exempt Money Fund
Each Fund is diversified, with the exception of New York Tax-Exempt Money Fund, which is non-diversified.
Investment Objectives
Government Money Fund and Money Fund each seeks as high a level of current income as is consistent with liquidity and stability of principal. New York Tax-Exempt Money Fund seeks a moderate level of current interest income that is exempt from federal income tax and, to the extent possible, from New York State and New York City personal income taxes, as is consistent with liquidity and stability of principal. Tax-Exempt Money Fund seeks a moderate level of current interest income exempt from federal income taxes consistent with stability of principal. Treasury Money Fund seeks current income with liquidity and stability of principal.
Fund Shares
Excelsior Fund is authorized to issue up to 42.5 billion shares of common stock with a par value of $0.001 per share. Authorized capital currently offered for each Fund is as follows: 5 billion shares each of Government Money Fund and Money Fund; and 2.5 billion shares of Treasury Money Fund.
Excelsior Tax-Exempt Fund is authorized to issue up to 24 billion shares of common stock with a par value of $0.001 per share. Authorized capital currently offered for each Fund is as follows: 5.5 billion shares of Tax-Exempt Money Fund; and 2 billion shares of New York Tax-Exempt Money Fund.
Each Fund, with the exception of Money Fund, offers one class of shares: Shares. Money Fund offers two classes of shares: Shares and Institutional Shares. Shares and Institutional Shares are offered continuously at net asset value. There are certain restrictions on the purchase of Institutional Shares, as described in the Funds’ prospectus. The financial highlights of the Institutional Shares of the Funds are presented separately.
41
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
| Note 2. | Significant Accounting Policies |
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Certain ratios have been reclassified on the Financial Highlights to conform to the current period presentation. The changes have no effect on the ratios. The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements.
Security Valuation
Securities in the Funds are valued utilizing the amortized cost valuation method permitted in accordance with Rule 2a-7 under the 1940 Act provided certain conditions are met, including that the Funds’ Board of Directors continues to believe that the amortized cost valuation method fairly reflects the market-based net asset value per share of the Funds. This method involves valuing a portfolio security initially at its cost and thereafter assuming a constant accretion or amortization to maturity of any discount or premium, respectively. The Funds’ Board of Directors has established procedures intended to stabilize each Fund’s net asset value for purposes of sales and redemptions at $1.00 per share. These procedures include determinations, at such intervals as the Board of Directors deems appropriate and reasonable in light of current market conditions, of the extent, if any, to which each Fund’s market-based net asset value deviates from $1.00 per share. In the event such deviation exceeds half of 1%, the Board of Directors will promptly consider what action, if any, should be initiated.
Investments in other open-end investment companies are valued at net asset value.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS 157”), was issued. SFAS 157 is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is evaluating the impact the application of SFAS 157 will have on the Funds’ financial statement disclosures.
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Repurchase Agreements
Each Fund may engage in repurchase agreement transactions with institutions that the Funds’ investment advisor has determined are creditworthy. Each Fund, through its custodian, receives delivery of underlying securities collateralizing a repurchase agreement. Collateral for certain tri-party repurchase agreements is held at the counterparty’s custodian in a segregated account for the benefit of a Fund and the counterparty. The investment advisor is responsible for determining that collateral is
42
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
at least equal, at all times, to the value of the repurchase obligation including interest. A repurchase agreement transaction involves certain risks in the event of default or insolvency of the counterparty. These risks include possible delays or restrictions upon each Fund’s ability to dispose of the underlying securities and a possible decline in the value of the underlying securities during the period while the Funds seek to assert their rights.
Income Recognition
Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on debt securities. Dividend income is recorded on the ex-date.
Determination of Class Net Asset Value
All income, expenses (other than class-specific expenses, as shown on the Statements of Operations) and realized and unrealized gains (losses) are allocated to each class of a Fund on a daily basis for purposes of determining the net asset value of each class. Income and expenses are allocated to each class based on the settled shares method, while realized and unrealized gains (losses) are allocated based on the relative net assets of each class.
Federal Income Tax Status
Each Fund intends to qualify each year as a “regulated investment company” under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its taxable or tax-exempt income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, each Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that each Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Distributions to Shareholders
Distributions from net investment income are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually or more frequently to seek to maintain a net asset value of $1.00 per share, unless offset by any available capital loss carryforward. Distributions to shareholders are recorded on the ex-dividend date. Income distributions and capital gain distributions on a Fund level are determined in accordance with federal income tax regulations which may differ from GAAP.
Indemnification
In the normal course of business, each Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. A Fund’s maximum exposure under these arrangements is unknown because this would involve future claims against the Fund. Also, under the organizational documents of Excelsior Fund and Excelsior Tax-Exempt Fund, and by contract, the Board of Directors of Excelsior Fund and Excelsior Tax-Exempt Fund are indemnified against certain liabilities that may arise out of actions relating to their duties to Excelsior Fund and Excelsior Tax-Exempt Fund. However, based on experience, the Funds expect the risk of loss due to these representations, warranties and indemnities to be minimal.
43
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
| Note 3. | Federal Income Tax Information |
The tax character of distributions paid during the year ended March 31, 2007 was as follows:
| | | | | | | | | |
| | | Ordinary Income* | | Tax-Exempt Income | | Long-Term Capital Gains |
Government Money Fund | | $ | 15,546,941 | | $ | — | | $ | — |
Money Fund | | | 65,587,427 | | | — | | | — |
New York Tax-Exempt Money Fund | | | 770 | | | 12,662,681 | | | — |
Tax-Exempt Money Fund | | | — | | | 63,305,228 | | | — |
Treasury Money Fund | | | 13,964,644 | | | — | | | 5 |
| | * | For tax purposes short-term capital gains distributions, if any, are considered ordinary income distributions. |
The following capital loss carryforwards, determined as of March 31, 2007, may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code:
| | | | | | | | | | | | | | | | | | |
| | | Expires March 31, | | |
| | | 2008 | | 2011 | | 2012 | | 2014 | | 2015 | | Total |
Government Money Fund | | $ | 18,903 | | $ | — | | $ | 5,556 | | $ | 224 | | $ | — | | $ | 24,683 |
Money Fund | | | — | | | 11,662 | | | 23,975 | | | 4,889 | | | 2,912 | | | 43,438 |
The Funds adopted Financial Accounting Standards Board (“FASB”) Interpretation No. 48, Accounting for Uncertainty in Income Taxes- an Interpretation of FASB Statement No. 109 (“FIN 48”) effective September 28, 2007. FIN 48 requires management to determine whether a tax position of a Fund is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that exceeds fifty percent of the amount likely to be realized upon ultimate settlement. FIN 48 must be applied to all existing tax positions upon initial adoption and the cumulative effect, if any, is to be reported as an adjustment to net assets. Management has evaluated the known implications of FIN 48 on its computation of net assets for each Fund. As a result of this evaluation, management believes that FIN 48 will not have any effect on the Funds’ financial statements. However, management’s conclusions regarding FIN 48 may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation guidance from the FASB, new tax laws, regulations, and administrative interpretations (including relevant court decisions).
44
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
| Note 4. | Fees and Compensation Paid to Affiliates |
Investment Advisory Fee
United States Trust Company, National Association, through its separate identifiable division, U.S. Trust New York Asset Management Division (“USTNA”), or UST Advisers, Inc. (“USTA” and together with USTNA, the “Advisor”) is the investment advisor to the Funds. USTNA is a wholly owned subsidiary of U.S. Trust Corporation (“U.S. Trust”). USTA is a wholly owned subsidiary of USTNA. Effective July 1, 2007, U.S. Trust became a wholly owned subsidiary of the Bank of America Corporation (“BOA”). Prior to July 1, 2007, U.S. Trust was a wholly owned subsidiary of The Charles Schwab Corporation.
For its services, the Advisor receives an investment advisory fee, computed daily and paid monthly, based on each Fund’s average daily net assets at the following annual rates:
| | | |
| | | Annual Fee Rate | |
Government Money Fund | | 0.25 | % |
Money Fund | | 0.25 | % |
New York Tax-Exempt Money Fund | | 0.50 | % |
Tax-Exempt Money Fund | | 0.25 | % |
Treasury Money Fund | | 0.30 | % |
Administration Fee
Effective July 1, 2007, Columbia Management Advisors, LLC (“Columbia”) serves as the administrator of the Funds. Columbia is an indirect, wholly owned subsidiary of BOA. Prior to July 1, 2007, USTA and BISYS Fund Services Ohio, Inc. (“BISYS”) served as the administrators of the Funds under the same fee structure.
Columbia is entitled to an administration fee, computed daily and paid monthly, based on the combined aggregate average daily net assets of Excelsior Fund, Excelsior Tax-Exempt Fund, and Excelsior Funds Trust (excluding Emerging Markets Fund, International Fund, Pacific/Asia Fund and International Equity Fund, series of Excelsior Fund or the Trust), at the following annual rates:
| | | |
Average Daily Net Assets | | Annual Fee Rate | |
First $200 million | | 0.200 | % |
Next $200 million | | 0.175 | % |
In excess of $400 million | | 0.150 | % |
Effective September 17, 2007, Columbia received an administration fee at the annual rates listed above less the fees payable by the Funds as described under the Pricing and Bookkeeping Fees note below.
Effective July 1, 2007, Columbia voluntarily agreed to waive administration fees for each Fund at the annual rate of 0.05% of average daily net assets. Columbia, at its discretion, may revise or discontinue this arrangement at any time.
For the six months ended September 30, 2007, the effective administration fee rate was 0.13% of each Fund’s average daily net assets before the reduction for pricing and bookkeeping fees and net of voluntary expense waivers.
45
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
For the six months ended September 30, 2007, the total amounts paid and payable to affiliates by the Funds under this agreement were as follows:
| | | | | | |
| | | Amounts
Paid to
Affiliates | | Amounts
Payable to
Affiliates |
Government Money Fund | | $ | 161,915 | | $ | 19,340 |
Money Fund | | | 661,350 | | | 76,191 |
New York Tax-Exempt Money Fund | | | 253,602 | | | 30,315 |
Tax-Exempt Money Fund | | | 1,128,958 | | | 153,631 |
Treasury Money Fund | | | 174,821 | | | 25,717 |
Pricing and Bookkeeping Fees
Effective September 17, 2007, the Funds entered into a Financial Reporting Services Agreement (the “Financial Reporting Services Agreement”) with State Street Bank & Trust Company (“State Street”) and Columbia pursuant to which State Street provides financial reporting services to the Funds. Also effective September 17, 2007, the Funds entered into an Accounting Services Agreement with State Street and Columbia (collectively with the Financial Reporting Services Agreement, the “State Street Agreements”) pursuant to which State Street provides accounting services to the Funds. Under the State Street Agreements, each Fund pays State Street an annual fee of $38,000 paid monthly, plus a monthly fee based on an annualized percentage rate of average daily net assets of each Fund for the month. The aggregate fee for each Fund will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). The Funds also reimburse State Street for certain out-of-pocket expenses and charges.
Effective September 17, 2007, the Funds entered into a Pricing and Bookkeeping Oversight and Services Agreement (the “Services Agreement”) with Columbia. Under the Services Agreement, Columbia provides services related to Fund expenses and the requirements of the Sarbanes-Oxley Act of 2002, and provides oversight of the accounting and financial reporting services provided by State Street. The Funds reimburse Columbia for out-of-pocket expenses and direct internal costs relating to accounting oversight and for services relating to Fund expenses and the requirements of the Sarbanes-Oxley Act of 2002.
Prior to July 1, 2007, BISYS was responsible for providing fund accounting and financial reporting services to the Funds, and USTA was responsible for oversight of these functions. On July 1, 2007, Columbia assumed responsibility from USTA for oversight of the activities performed by BISYS. BISYS was responsible for providing services to the Funds through September 16, 2007.
For the six months ended September 30, 2007, the total amounts paid and payable to affiliates for each Fund were $505 and $505, respectively.
Transfer Agent Fee
Effective September 17, 2007, Columbia Management Services, Inc. (the “Transfer Agent”), an affiliate of Columbia and an indirect, wholly owned subsidiary of BOA, provides shareholder services to the Funds and has contracted with Boston Financial Data Services (“BFDS”) to serve as sub-transfer agent. Prior to September 17, 2007, BFDS served as the transfer agent for the Funds’ shares.
46
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
The Transfer Agent is entitled to receive a fee for its services, paid monthly, at the annual rate of $17.00 per open account plus reimbursement of certain sub-transfer agent fees paid by the Transfer Agent (exclusive of BFDS fees), calculated based on assets held in omnibus accounts and intended to recover the cost of payments to other parties (including affiliates of BOA) for services to those accounts. The Transfer Agent pays the fees of BFDS for services as sub-transfer agent and is not entitled to reimbursement for such fees from the Funds. The Transfer Agent may also retain, as additional compensation for its services, fees for wire, telephone and redemption orders, IRA trustee agent fees and account transcript fees due the Transfer Agent from shareholders of the Funds and credits (net of bank charges) earned with respect to balances in accounts the Transfer Agent maintains in connection with its services to the Funds. The Transfer Agent also receives reimbursement for certain out-of-pocket expenses.
For the period September 17, 2007 through September 30, 2007, the total amounts paid and payable to affiliates by the Funds under this agreement were as follows:
| | | | | | |
| | | Amounts Paid
to Affiliates | | Amounts Payable
to Affiliates |
Government Money Fund | | $ | 151 | | $ | 151 |
Money Fund | | | 1,059 | | | 1,059 |
New York Tax-Exempt Money Fund | | | 124 | | | 124 |
Tax-Exempt Money Fund | | | 187 | | | 187 |
Treasury Money Fund | | | 125 | | | 125 |
Shareholder Servicing Fee
The Funds have entered into shareholder servicing agreements with various service organizations which include USTA. The Funds are permitted to pay a fee of up to 0.25% of the average daily net assets of the Funds’ shares held by each service organization’s customers, with the exception of the Institutional Shares of Money Fund which pays a fee of up to 0.15% of the average daily net assets of its shares, to such organizations for providing shareholder and administrative services to their customers who hold shares of the Funds.
For the six months ended September 30, 2007, the total amounts paid and payable to affiliates by the Funds under these agreements were as follows:
| | | | | | |
| | | Amounts Paid
to Affiliates | | Amounts Payable
to Affiliates |
Government Money Fund | | $ | 368,477 | | $ | 63,593 |
Money Fund | | | 738,244 | | | 118,478 |
New York Tax-Exempt Money Fund | | | 566,300 | | | 92,646 |
Tax-Exempt Money Fund | | | 2,519,874 | | | 427,792 |
Treasury Money Fund | | | 390,324 | | | 76,780 |
47
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
Distribution and Service Fees
Effective September 17, 2007, Columbia Management Distributors, Inc. (the “Distributor”) serves as distributor of the Funds’ shares. Through July 31, 2007, BISYS Fund Services Limited Partnership (“BISYS Fund Services”) served as distributor of the Funds’ shares. On August 1, 2007, Foreside Distribution Services, L.P. served as distributor until September 16, 2007.
Fees Paid to Officers and Trustees
The Board of Trustees/Directors may include people who are officers and/or trustees of other fund families affiliated with the investment advisor. The Funds did not pay any of the interested persons for their service as Trustees/Directors, but did pay non-interested persons (independent trustees), as noted in the Statements of Operations.
Expense Limits and Fee Waivers
The Advisor has contractually agreed to waive fees or reimburse expenses through July 31, 2008, so that the expenses incurred by each Fund (exclusive of brokerage commissions, interest, taxes and extraordinary expenses, but inclusive of custodial charges relating to overdrafts, if any), after giving effect to any balance credits from the Funds’ custodian, will not exceed the following annual rates, based on each Fund’s average daily net assets:
| | | | | | |
| | | Shares | | | Institutional Shares | |
Government Money Fund | | 0.55 | % | | — | |
Money Fund | | 0.55 | % | | 0.30 | % |
New York Tax-Exempt Money Fund | | 0.60 | % | | — | |
Tax-Exempt Money Fund | | 0.55 | % | | — | |
Treasury Money Fund | | 0.60 | % | | — | |
Custody Credits
Each Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as a reduction of total expenses in the Statements of Operations. The Funds could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if they had not entered into such an agreement.
48
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
| Note 5. | Concentration of Ownership |
As of September 30, 2007, several of the Funds had shareholders that held greater than 5% of the shares outstanding. Subscription and redemption activity of these accounts may have a significant effect on the operations of the Funds. The percentage of shares of beneficial interest outstanding held therein are as follows:
| | | | |
| | | Number of
Shareholders | | % of Shares Outstanding Held |
Government Money Fund | | 1 | | 95.70 |
Money Fund | | 3 | | 81.85 |
New York Tax-Exempt Money Fund | | 1 | | 84.52 |
Tax-Exempt Money Fund | | 1 | | 96.22 |
Treasury Money Fund | | 1 | | 20.03 |
| Note 6. | Significant Risks and Contingencies |
Municipal Bond Tax Status
Certain Funds purchase municipal securities whose interest, in the opinion of the issuer, is free from federal income tax. There is no assurance that the Internal Revenue Service (IRS) will agree with this opinion. In the event the IRS determines that the issuer does not comply with relevant tax requirements, interest payments from a security could become federally taxable, possibly retroactively to the date the security was issued. As a shareholder of the Funds, you may be required to file an amended tax return as a result.
Tax Development Risk
The U.S. Supreme Court has heard an appeal of a state-court decision that might significantly affect how states tax in-state and out-of-state municipal bonds. If the Supreme Court determines that the U.S. Constitution prohibits states from treating the interest income on in-state municipal bonds differently from the income on out-of-state municipal bonds for state income tax purposes, most states likely will revisit the way in which they treat the interest on municipal bonds. This has the potential to increase significantly the amount of state tax paid by shareholders on exempt-interest dividends. This also has the potential to cause decline in the value of the municipal securities held by New York Tax-Exempt Money Fund and Tax-Exempt Money Fund which, in turn, would reduce the value of these Funds’ shares. You should consult your tax advisor to discuss the tax consequences of your investment in these Funds.
49
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
Geographic Concentration
Certain Funds have greater than 5% of their total investments on September 30, 2007 invested in debt obligations issued by an individual state and its political subdivisions, agencies and public authorities. These Funds are more susceptible to economic and political factors adversely affecting issuers of the state’s or territory’s municipal securities than are municipal bond funds that are not concentrated to the same extent in these issuers.
Excelsior Funds
United States Trust Company of New York and U.S. Trust Company, N.A. (formerly, co-investment advisers to the Funds, together referred to herein as “U.S. Trust Company”), Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc., and Excelsior Funds Trust (the “Companies”), The Charles Schwab Corporation and several individuals and third parties were named in four fund shareholder class actions and two derivative actions which alleged that U.S. Trust Company, the Companies, and others allowed certain parties to engage in illegal and improper mutual fund trading practices, which allegedly caused financial injury to the shareholders of certain of the Excelsior Funds advised by U.S. Trust Company. Each plaintiff seeks unspecified monetary damages and related equitable relief.
The class and derivative actions described above were transferred to the United States District Court for the District of Maryland for coordinated and consolidated pre-trial proceedings. In November 2005, the Maryland court dismissed many of the plaintiffs’ claims in both the class and derivative actions. The court entered implementing orders on February 24, 2006. All claims against the Companies have been dismissed. Plaintiffs’ claims against U.S. Trust Company and certain individuals under Sections 10(b) and 20(a) of the Securities Exchange Act and Sections 36(b) and 48(a) of the Investment Company Act, however, have not been dismissed. Plaintiffs’ Section 48(a) claims against parent entity U.S. Trust Company and former parent entity The Charles Schwab Corporation also remain.
While the ultimate outcome of these matters cannot be predicted with any certainty at this time, based on currently available information, U.S. Trust Company believes that the likelihood is remote that the pending litigation will have a material adverse financial impact on the Companies, or materially affect the advisers’ ability to provide investment management services to the Companies.
50
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
| Note | 8. Reorganization of the Funds |
The Boards of Directors/Trustees of Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust (the “Board”) have approved proposals, described below, that are part of a larger integration of the Excelsior Fund complex and the Columbia Funds complex. Generally, these proposals involve the reorganization of certain Excelsior Funds into newly formed Columbia Funds that will be series of a different legal entity governed by a different board than the Excelsior Funds, and will be managed by Columbia Management Advisors, LLC, an affiliate of the current advisers to the Excelsior Funds. The portfolio managers of the Excelsior Funds immediately before such reorganizations are expected to be the same portfolio managers of the newly formed Columbia Funds immediately after such reorganizations.
Specifically, the Board has approved proposals to reorganize each Excelsior Fund listed in the left column (each, an “Excelsior Fund”) into a corresponding newly formed shell fund listed in the right column below (each, a “Newly Formed Fund”) as shown in the chart below, subject to approval by the shareholders of the Excelsior Fund. If the shareholders of each Excelsior Fund approve the proposal relating to the reorganization of their Fund, all of the assets of the Excelsior Fund will be transferred to the corresponding Newly Formed Fund and shareholders of the Excelsior Fund will receive shares of a designated class of the corresponding Newly Formed Fund in exchange for their shares. For each Excelsior Fund, Shares class and Institutional Shares class, as applicable, will be exchanged for Class Z shares of the corresponding Newly Formed Fund, and Retirement Shares class, as applicable, will be exchanged for Class R shares of the corresponding Newly Formed Fund. Shareholders of each Excelsior Fund are scheduled to vote on the proposal relating to the reorganization of their Fund at a special meeting of shareholders currently expected to be held in the first quarter of 2008. Each reorganization is expected to take place as soon as reasonably practicable following approval at the special meeting.
| | |
Excelsior Fund | | Newly Formed Fund |
| Blended Equity Fund | | Columbia Blended Equity Fund |
| Emerging Markets Fund | | Columbia Emerging Markets Fund |
| Energy and Natural Resources Fund | | Columbia Energy and Natural Resources Fund |
| International Fund | | Columbia International Growth Fund |
| Large Cap Growth Fund | | Columbia Select Growth Fund |
| Pacific/Asia Fund | | Columbia Pacific/Asia Fund |
| Small Cap Fund | | Columbia Select Small Cap Fund |
| Value & Restructuring Fund | | Columbia Value and Restructuring Fund |
| Core Bond Fund | | Columbia Bond Fund |
| Intermediate-Term Bond Fund | | Columbia Short-Intermediate Bond Fund |
| Equity Opportunities Fund | | Columbia Select Opportunities Fund |
| Mid Cap Value & Restructuring Fund | | Columbia Mid Cap Value and Restructuring Fund |
The Board has also approved proposals, described below, that involve the reorganization of certain Excelsior Funds into Columbia Funds that are series of different legal entities governed by a different board than the Excelsior Funds, and are managed by Columbia Management Advisors, LLC.
51
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
Specifically, the Board has approved proposals to reorganize each Excelsior Fund listed in the left column (each, an “Acquired Fund”) into a corresponding acquiring fund listed in the right column below (each, an “Acquiring Fund”) as shown in the chart below, subject to approval by the shareholders of the Acquired Fund. If the shareholders of an Acquired Fund approve the proposal relating to the reorganization of their Fund, all of the assets of the Acquired Fund will be transferred to the corresponding Acquiring Fund and shareholders of the Acquired Fund will receive shares of a designated class of the corresponding Acquiring Fund in exchange for their shares. For each Acquired Fund, except the money market funds, Shares class and Institutional Shares class, as applicable, will be exchanged for Class Z shares of the corresponding Acquiring Fund, and Retirement Shares class, as applicable, will be exchanged for Class R shares of the corresponding Acquiring Fund. For each Acquired Fund that is a money market fund, Shares class and Institutional Shares class, as applicable, will be exchanged for Trust Class shares of the corresponding Acquiring Fund. Shareholders of each Acquired Fund are scheduled to vote on the proposal relating to the reorganization of their Fund at a special meeting of shareholders currently expected to be held in the first quarter of 2008, except for Intermediate-Term Tax-Exempt Fund and New York Intermediate-Term Tax-Exempt Fund which are currently expected to be held in the second quarter of 2008. Each reorganization is expected to take place as soon as reasonably practicable following approval at the special meeting.
| | |
Acquired Fund | | Acquiring Fund |
Equity Income Fund | | Columbia Dividend Income Fund |
Real Estate Fund | | Columbia Real Estate Equity Fund |
International Equity Fund | | International Fund |
Short-Term Government Securities Fund | | Columbia Short Term Bond Fund |
Short-Term Tax-Exempt Securities Fund | | Columbia Short Term Municipal Bond Fund |
High Yield Fund | | Columbia High Yield Opportunity Fund |
Long-Term Tax-Exempt Fund | | Columbia Tax-Exempt Fund |
Intermediate-Term Tax-Exempt Fund | | Columbia Intermediate Municipal Bond Fund |
New York Intermediate-Term Tax-Exempt Fund | | Columbia New York Intermediate Municipal Bond Fund |
California Short-Intermediate Term Tax-Exempt Income Fund | | Columbia California Intermediate Municipal Bond Fund |
Treasury Money Fund | | Columbia Government Reserves |
Government Money Fund | | Columbia Government Plus Reserves |
Money Fund | | Columbia Cash Reserves |
Tax-Exempt Money Fund | | Columbia Tax-Exempt Reserves |
New York Tax-Exempt Money Fund | | Columbia New York Tax-Exempt Reserves |
52
APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party to the advisory agreement (the “Independent Directors”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s board of directors or trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the advisory agreement. In addition, the Securities and Exchange Commission (the “SEC”) takes the position that, as part of their fiduciary duties with respect to fund fees, fund boards are required to evaluate the material factors applicable to a decision to approve an investment advisory agreement.
At a meeting held on September 27th and 28th 2007, the Board of Directors/Trustees (the “Board”) of Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust (each a “Company” and, together, the “Companies”), including a majority of the Independent Directors, approved the continuation of the Investment Advisory Agreements (the “Advisory Agreements”) by and between each Company and UST Advisers, Inc. and U.S. Trust New York Asset Management Division, a division of United States Trust Company, National Association (together, “U.S. Trust”) with respect to each series of each Company (each, a “Fund”).
In preparation for the meeting, the Board requested and reviewed a wide variety of materials provided by U.S. Trust and its affiliates, which included information about the operations and personnel of U.S. Trust, as well as the personnel and operations of its affiliates. In this regard, the Board received information about the large mutual fund business of Columbia Management Advisors, LLC and its affiliates (together, “Columbia”), which are, together with U.S. Trust, all under the control of Bank of America Corporation, and how the resources dedicated to the Columbia mutual fund business affect the Funds. The Board also received extensive information that was provided by or derived from information prepared by third parties. This information is in addition to the detailed information about the Funds that the Board reviews during the course of each year, including information that relates to Fund operations and Fund performance. The Board also received a memorandum from counsel regarding the responsibilities of the Board for the approval of the Advisory Agreements. In addition, the Independent Directors received advice from independent counsel to the Independent Directors, met in executive session outside the presence of Company management and U.S. Trust personnel and participated in question and answer sessions with representatives of U.S. Trust.
The Board’s approval of the continuation of the Advisory Agreements was based on the consideration and evaluation of the information and material provided to the Board and a variety of specific factors discussed at the meetings, including:
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by U.S. Trust to the Funds under the Advisory Agreements and the resources of U.S. Trust and their affiliates, including Columbia, dedicated to the Funds. In this regard, the Board evaluated, among other things, U.S. Trust’s personnel, experience, performance history of various products, and compliance program. The Board considered that U.S. Trust and Columbia provide
53
APPROVAL OF INVESTMENT ADVISORY AGREEMENTS (Continued)
substantial administrative, accounting and compliance services and provide oversight of third party service providers to the Funds. The Board considered representations of U.S. Trust that U.S. Trust and Columbia have allocated substantial resources and personnel, and have made significant financial expenditures and commitments, to the investment management and other operations of the Funds. The Board also considered the nature and quantity of additional resources that have been dedicated to the operations of the Funds since U.S. Trust had become affiliated with Columbia. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services to be provided by U.S. Trust to the Funds and the resources of the U.S. Trust and its affiliates dedicated to the Funds supported the renewal of the Advisory Agreements.
Fund Performance. The Board considered Fund performance in determining whether to renew the Advisory Agreements. Specifically, the Board considered each Fund’s performance relative to a peer group of other mutual funds and appropriate indices/benchmarks, in light of total return, yield and market trends. As part of this review, the Board considered the composition of the peer groups, selection criteria and the reputation of third party providers who provided data for the peer group analysis. In evaluating the performance of each Fund, the Board considered both market risk and shareholder risk expectations for such Fund and whether, irrespective of relative performance, each Fund’s absolute performance was consistent with expectations for its investment methodology. The Board further considered the level of Fund performance in the context of its review of Fund expenses and U.S. Trust’s profitability discussed below. In the case of each Fund that had performance that lagged that of a relevant peer group for certain (although not necessarily all) periods considered, the Board concluded that other factors relevant to performance supported renewal of the Advisory Agreements. These factors varied from Fund to Fund, but included one or more of the following: (1) that the Fund’s performance, although lagging in certain recent periods, was strong over the longer term; (2) that the underperformance was attributable, to a significant extent, to investment decisions by U.S. Trust that were reasonable and consistent with the Fund’s investment objective and policies; (3) that each Fund’s performance was competitive when compared to other relevant performance benchmarks or peer groups; and (4) that U.S. Trust has taken or is taking steps designed to help improve the Fund’s investment performance. Following such evaluation, the Board concluded, within the context of its full deliberations, that the performance of the Funds supported the renewal of the Advisory Agreements.
Fund Expenses. With respect to the Funds’ expenses, the Board considered the rate of compensation called for by the Advisory Agreements, and each Fund’s net operating expense ratio, in each case, in comparison to those of other comparable mutual funds, such peer groups and comparisons having been selected and calculated based on objective factors. The Board noted that with respect to the Funds, U.S. Trust had contractually committed to waive a portion of its fee and/or reimburse the Funds for a portion of their expenses to limit the Funds’ total operating expenses. In evaluating this information, the Board considered the nature and scope of services provided to the Funds. The Board also reviewed the fees charged by U.S. Trust to provide advisory services to other types of accounts with substantially similar investment objectives as the Funds and the differences in services and risks involved in managing such other accounts, including differences relating to compliance and regulatory burdens. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported the renewal of the Advisory Agreements.
54
APPROVAL OF INVESTMENT ADVISORY AGREEMENTS (Continued)
Profitability. With regard to profitability, the Board considered the compensation flowing to U.S. Trust and its affiliates, directly or indirectly. In this connection, the Board reviewed management’s profitability analyses. The Board also considered any other benefits derived by U.S. Trust from its relationship with the Funds, such as whether, by virtue of its management of the Funds, it obtains investment information or other research resources that aid it in providing advisory services to other clients. With respect to U.S. Trust and its affiliates, the Board considered whether the varied levels of compensation and profitability under the Advisory Agreements and other service agreements were reasonable and justified in light of the quality of all services rendered to the Funds. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of U.S. Trust is reasonable and supported the renewal of the Advisory Agreements.
Economies of Scale. The Board considered the existence of any economies of scale and whether those economies are passed along to a Fund’s shareholders through a graduated investment advisory fee schedule or other means, including any fee waivers by U.S. Trust. In this regard, and consistent with their consideration of fund expenses, the Board considered that U.S. Trust has previously committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer Funds or Funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such Funds at subsidized expense levels. The Board also reviewed asset flows in the Funds, noting that a relatively few number of Funds had experienced significant asset growth, while most of the Funds had experienced only moderate growth, if any. After reviewing such information, the Board determined not to seek advisory fee breakpoints at this time. The Board noted that it would continue to monitor the growth in assets of the Funds as compared to expenses and asked U.S. Trust and Columbia to continue to monitor the Funds’ expenses and asset sizes in connection with determining when economies of scale would dictate that advisory fee breakpoints were advisable.
Based on the Board’s deliberations and their evaluation of the information described above, the Board, including all of the Independent Directors, unanimously approved the continuation of the Advisory Agreements and concluded that the compensation under the Advisory Agreements is fair and reasonable in light of the services and expenses and such other matters as the Board considered to be relevant in the exercise of their reasonable judgment. In the course of their deliberations, the Board did not identify any particular information or factor that was all-important or controlling.
55
[THIS PAGE INTENTIONALLY LEFT BLANK]
56
PROXY VOTING RESULTS
A Special Meeting of Shareholders of Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust and each of their Funds was held on March 30, 2007, for the purpose of seeking shareholder approval of the following proposal: to approve new investment advisory agreements by and among USTA, USTNA and the Companies, on behalf of the Funds. The Special Meeting for Excelsior Funds with respect to the Value and Restructuring Fund, Energy and Natural Resources and Treasury Money Funds was adjourned for the purpose of soliciting additional proxies, and subsequently held on April 30, 2007. The number of votes necessary to conduct the Special Meetings and approve the proposal was obtained. The results of the votes of shareholders are listed below:
EXCELSIOR FUNDS, INC.
| | | | | | |
Fund | | For | | Against | | Abstain |
Value and Restructuring Fund | | 71,659,202.229 | | 1,308,059.398 | | 2,313,244.343 |
Energy and Natural Resources Fund | | 10,149,963.059 | | 261,710.922 | | 349,760.892 |
Treasury Money Fund | | 147,661,994.420 | | 8,327.040 | | 953,491.100 |
IMPORTANT INFORMATION ABOUT THIS REPORT
Excelsior Money Market Funds
The funds mail one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 1-800-345-6611 and additional reports will be sent to you. This report has been prepared for shareholders of Excelsior Money Market Funds.
A description of the policies and procedures that each fund uses to determine how to vote proxies and a copy of each fund’s voting records are available (i) on the Securities and Exchange Commission’s website at www.sec.gov, and (ii) without charge, upon request, by calling 1-800-368-0346. Information regarding how each fund voted proxies relating to portfolio securities during the 12-month period ended June 30 is available from the SEC’s website. Information regarding how each fund voted proxies relating to portfolio securities is also available from the funds’ website.
Each fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Each fund’s Form N-Q is available on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Please consider the investment objectives, risks, charges and expenses for a fund carefully before investing. Contact your financial advisor for a prospectus, which contains this and other important information about a fund. You should read it carefully before you invest.
United States Trust Company, National Association, through its separate identifiable division, U.S. Trust New York Asset Management Division (“USTNA”), or UST Advisers, Inc. (“USTA” and together with USTNA, the “Advisor”) is the investment advisor to the Funds. USTNA is a wholly owned subsidiary of U.S. Trust Corporation (“U.S. Trust”). USTA is a wholly owned subsidiary of USTNA. Excelsior Funds are distributed by Columbia Management Distributors, Inc., member of FINRA, SIPC, part of Columbia Management. USTA, USTNA and Columbia Management Distributor, Inc. are affiliates of Bank of America Corporation.
57
©2007 Columbia Management Distributors, Inc.
One Financial Center, Boston, MA 02111-2621
800-345-6611 www.columbiafunds.com
SHC-44/136414-0907 (11/07) 07/45972
INSTITUTIONAL SHARES
MONEY FUND
CORE BOND FUND
HIGH YIELD FUND
EQUITY OPPORTUNITIES FUND
LARGE CAP GROWTH FUND
MID CAP VALUEAND RESTRUCTURING FUND
VALUEAND RESTRUCTURING FUND
EMERGING MARKETS FUND
INTERNATIONAL EQUITY FUND
SEMI ANNUAL REPORT
September 30, 2007
| | |
| NOT FDIC INSURED | | May Lose Value |
| NOT BANK ISSUED | | No Bank Guarantee |
TABLE OF CONTENTS
An investment in money market mutual funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market mutual funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in money market mutual funds. Please see the prospectus for a complete discussion of investments in money market funds.
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for an Excelsior Fund are based on numerous factors, may not be relied on as an indication of trading intent in behalf of any particular Excelsior Fund. References to specific securities should not be construed as a recommendation or investment advice.
Investments in equity securities are subject to sudden and unpredictable drops in value and periods of lackluster performance.
Funds which concentrate their investments in one economic sector or in a geographical region may expose an investor to greater volatility. When used as part of a broader investment portfolio, these funds may serve to reduce overall portfolio volatility. Currency fluctuations, differences in security regulation, financial accounting standards, and foreign taxation regulations are among the risks associated with foreign investing, as well as political risk. Investing in emerging markets may accentuate these risks.
Small-cap stocks may be less liquid and subject to greater price volatility.
Value-based investments are subject to the risk that the broad market may not recognize their intrinsic value.
Investment in fixed income securities are subject to interest rate risks. The principal value of a bond falls when interest rates rise and rises when interest rates fall. During periods of rising interest rates the value of a bond investment is at greater risk than during periods of stable or falling rates.
LETTER TO SHAREHOLDERS
Dear Shareholder:
Allow me to take this opportunity to formally welcome you to the Columbia Funds family. In July, U.S. Trust Advisors was acquired by Bank of America (parent company of Columbia Management Group). The Excelsior Funds are now distributed by Columbia Management Distributors, Inc. The combined organization is committed to delivering unparalleled wealth management solutions and building deep, lasting relationships with our shareholders.
Your Excelsior Funds account will be serviced by Columbia Management Services, Inc., an experienced service provider in the industry. This team will process transactions, generate account statements and support your ongoing servicing needs.
As we complete the integration over the next several months, you will gain access to a broad array of investment choices including money market investments, mutual funds and 529 plans. Throughout this period of change, our goal is to ensure a smooth transition and provide services that we hope will exceed your expectations. We recommend you visit our website: www.columbiafunds.com for more information about our products and services. Those of you who receive your statements directly from Columbia Management can also register for on-line account access, which allows you to check your account balance, change your distribution options and make other account transactions. If you receive statements from your brokerage firm, please check with your financial advisor for service availability.
There’s a lot to know about Columbia Management
With $709.9 billion under management and a history that dates to the early 1900s, Columbia Management and its affiliates make up one of the nation’s largest and most experienced asset management companies.1 We offer a comprehensive array of investment solutions, including equity, fixed-income and cash strategies. Our diverse investment solutions and our focus on the needs of our clients make Columbia Management the advisor of choice for individual, institutional and high-net-worth investors.
Welcome to Columbia Management. Thank you for your business — we’re pleased to have you as a customer.
Sincerely,
Christopher L. Wilson
President, Excelsior Funds
2
About Christopher L. Wilson
Chris Wilson is head of mutual funds for Columbia Management, responsible for the day-to-day delivery of mutual fund products and services to the firm’s investors. With the exception of distribution, Mr. Wilson oversees all aspects of the mutual fund services operation including treasury, investment accounting, product development and shareholder and broker services. Mr. Wilson serves as Columbia Management’s chief liaison to the mutual fund boards of trustees. He joined Columbia Management in 2004 and has been a member of the investment community since 1980.
Columbia Management Group, LLC (“Columbia Management”) is the investment management arm of Bank of America Corporation. Columbia Management entities furnish investment management services and products for institutional and individual investors. Excelsior Funds are distributed by Columbia Management Distributors, Inc., member FINRA and SIPC. Columbia Management Distributors, Inc. is part of Columbia Management and an affiliate of Bank of America Corporation.
1 | Columbia Management and its affiliates comprise the wealth and investment management division of Bank of America Corporation. As of September 30, 2007, Columbia Management and its affiliates managed assets of $709.9 billion. Columbia Management and its affiliates’ managed assets consist of assets under the discretionary management of the registered investment advisors, Columbia Management Advisors, LLC ($377.9 billion), Columbia Wanger Asset Management, L.P. ($38.5 billion) and Marsico Capital Management, LLC ($103.4 billion); U.S. Trust, Bank of America Private Wealth Management; Banc of America Investment Services, Inc.; Banc of America Investment Advisors, Inc.; Bank of America Capital Advisors, LLC; Premier Banking & Investments, and United States Trust, National Association, including its subsidiary, UST Advisers, Inc. ($116.5 billion). |
3
Understanding Your Expenses — Money Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | |
Institutional Shares | | 1,000.00 | | 1,000.00 | | 1,025.50 | | 1,023.50 | | 1.52 | | 1.52 | | 0.30 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
4
Understanding Your Expenses — Core Bond Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
04/01/07 – 09/30/07 | | | | | | | | | | | | | | |
Institutional Shares | | 1,000.00 | | 1,000.00 | | 1,021.20 | | 1,021.75 | | 3.28 | | 3.29 | | 0.65 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
5
Understanding Your Expenses — High Yield Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | |
Institutional Shares | | 1,000.00 | | 1,000.00 | | 1,000.25 | | 1,021.00 | | 4.00 | | 4.04 | | 0.80 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
6
Understanding Your Expenses — Equity Opportunities Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | |
Institutional Shares | | 1,000.00 | | 1,000.00 | | 1,123.40 | | 1,021.00 | | 4.25 | | 4.04 | | 0.80 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
7
Understanding Your Expenses — Large Cap Growth Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | |
Institutional Shares | | 1,000.00 | | 1,000.00 | | 1,148.00 | | 1,020.30 | | 5.05 | | 4.75 | | 0.94 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
8
Understanding Your Expenses — Mid Cap Value and Restructuring Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | |
Institutional Shares | | 1,000.00 | | 1,000.00 | | 1,078.60 | | 1,020.65 | | 4.52 | | 4.39 | | 0.87 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
9
Understanding Your Expenses — Value and Restructuring Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | |
Institutional Shares | | 1,000.00 | | 1,000.00 | | 1,084.40 | | 1,020.95 | | 4.22 | | 4.09 | | 0.81 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
10
Understanding Your Expenses — Emerging Markets Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | |
Institutional Shares | | 1,000.00 | | 1,000.00 | | 1,261.40 | | 1,017.00 | | 9.05 | | 8.07 | | 1.60 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
11
Understanding Your Expenses — International Equity Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | |
Institutional Shares | | 1,000.00 | | 1,000.00 | | 1,047.65 | | 1,019.50 | | 5.63 | | 5.55 | | 1.10 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
12
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Money Fund
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
| COMMERCIAL PAPER — 69.46% |
| $ | 50,000,000 | | Abbott Laboratories,
Discount Note,
4.96% 10/15/07 | | $ | 49,903,556 |
| | 50,000,000 | | American General Finance Co., Discount Note,
4.39% 10/04/07 | | | 49,977,292 |
| | 50,000,000 | | CIT Group Funding, Inc., Discount Note,
6.40% 10/05/07 | | | 49,964,445 |
| | 35,000,000 | | Coca-Cola Co.,
Discount Note,
4.65% 12/11/07 | | | 34,679,021 |
| | 30,000,000 | | Corporate Asset Funding Co., Inc.,
Discount Note,
5.10% 10/24/07 | | | 29,902,250 |
| | 20,000,000 | | Corporate Asset Funding Co., Inc., Discount Note,
5.20% 10/03/07 | | | 19,994,222 |
| | 25,000,000 | | Ei Dupont, Discount Note,
4.75% 10/17/07 | | | 24,947,444 |
| | 25,000,000 | | Ei Dupont, Discount Note,
4.77% 10/25/07 | | | 24,920,833 |
| | 25,000,000 | | Govco, Inc., Discount Note,
5.15% 10/01/07 | | | 25,000,000 |
| | 50,000,000 | | HSBC Finance Corp.,
Discount Note,
5.35% 10/31/07 | | | 49,777,083 |
| | 30,000,000 | | International Business Machines, Discount Note,
4.73% 10/03/07 | | | 29,992,117 |
| | 50,000,000 | | International Lease Finance Corp.,
Discount Note,
5.23% 10/26/07 | | | 49,818,403 |
| | 25,000,000 | | John Deere Capital Corp., Discount Note,
5.10% 11/19/07 | | | 24,826,458 |
| | 20,800,000 | | Johnson & Johnson,
Discount Note,
4.72% 10/15/07 | | | 20,761,821 |
| | 40,000,000 | | JP Morgan Chase & Co.,
Discount Note,
2.82% 10/23/07 | | | 39,872,400 |
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
| COMMERCIAL PAPER — (continued) |
| $ | 50,000,000 | | Merrill Lynch,
Discount Note,
2.06% 10/03/07 | | $ | 49,985,500 |
| | 25,000,000 | | Morgan Stanley,
Discount Note,
4.40% 11/19/07 | | | 24,812,847 |
| | 40,000,000 | | National Rural Utilities Cooperative Finance, Discount Note,
4.78% 10/25/07 | | | 39,872,533 |
| | 35,000,000 | | Procter & Gamble Co., Discount Note,
3.20% 10/19/07 | | | 34,908,300 |
| | 15,000,000 | | Procter & Gamble Co., Discount Note,
4.81% 12/11/07 | | | 14,859,183 |
| | 50,000,000 | | Societe Generale,
Discount Note,
2.20% 10/11/07 | | | 49,927,153 |
| | 25,000,000 | | UBS Finance Corp., Discount Note,
4.97% 11/26/07 | | | 24,806,722 |
| | 25,000,000 | | UBS Finance Corp., Discount Note,
5.52% 02/11/08 | | | 24,502,174 |
| | 25,000,000 | | Wal-Mart Stores, Inc., Discount Note,
4.78% 12/18/07 | | | 24,744,333 |
| | | | | | |
| | | TOTAL COMMERCIAL PAPER
(Cost $812,756,090) | | | 812,756,090 |
| | | | | | |
| CERTIFICATES OF DEPOSIT — 12.82% | | |
| | 50,000,000 | | Barclays Bank PLC, 5.32% 10/05/07 | | | 50,000,000 |
| | 50,000,000 | | Citibank,
5.35% 11/08/07 | | | 50,000,000 |
| | 50,000,000 | | First Tennessee Bank,
5.65% 12/06/07 | | | 50,000,000 |
| | | | | | |
| | | TOTAL CERTIFICATES OF DEPOSIT
(Cost $150,000,000) | | | 150,000,000 |
| | | | | | |
| U.S. GOVERNMENT & AGENCY OBLIGATIONS — 4.70% |
| | 20,000,000 | | Federal Home Loan Bank, 5.54% 09/17/08(a) | | | 20,000,000 |
See Notes to Financial Statements.
13
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Money Fund — (continued)
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
| U.S. GOVERNMENT & AGENCY OBLIGATIONS — (continued) |
| $ | 20,000,000 | | Federal Home Loan Bank,
4.13% 03/14/08(a) | | $ | 20,000,000 |
| | 15,000,000 | | Federal National Mortgage Association,
5.30% 01/08/08 | | | 15,000,000 |
| | | | | | |
| | | TOTAL U.S. GOVERNMENT
& AGENCY OBLIGATIONS
(Cost $55,000,000) | | | 55,000,000 |
| | | | | | |
| CORPORATE BONDS — 2.56% | | |
| | 30,000,000 | | Wells Fargo Bank,
4.82% 10/31/07 | | | 30,000,000 |
| | | | | | |
| | | TOTAL CORPORATE BONDS
(Cost $30,000,000) | | | 30,000,000 |
| | | | | | |
| Shares | | | | |
| REGISTERED INVESTMENT COMPANY — 0.16% |
| | 1,900,537 | | Dreyfus Government Cash Management Fund
(7 day yield of 3.23%) | | | 1,900,537 |
| | | | | | |
| | | TOTAL REGISTERED INVESTMENT COMPANY
(Cost $1,900,537) | | | 1,900,537 |
| | | | | | |
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
| REPURCHASE AGREEMENT — 10.51% | | |
| $ | 123,000,000 | | Repurchase agreement with Morgan Stanley, dated 09/28/07, due on 10/01/07, at 4.90%, collateralized by U.S. Government Agency Obligations with various maturities to 08/01/37, market value $126,207,166 (repurchase proceeds $123,050,225) | | $ | 123,000,000 |
| | | | | | |
| | | TOTAL REPURCHASE AGREEMENT
(Cost $123,000,000) | | | 123,000,000 |
| | | | | | |
| | | | | | | |
TOTAL INVESTMENTS
(Cost $1,172,656,627)(b) | | 100.21 | % | | $ | 1,172,656,627 | |
OTHER LIABILITIES IN EXCESS OF ASSETS | | (0.21 | ) | | | (2,468,098 | ) |
| | | | | | | |
NET ASSETS | | 100.00 | % | | $ | 1,170,188,529 | |
| | | | | | | |
| (a) | The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007. |
| (b) | Cost for federal tax purposes is $1,172,656,627. |
Discount Note—The rate reported is the discount rate at the time of purchase.
PLC—Public Limited Company
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | | | |
Portfolio Diversification | | % of
Net
Assets | | | Value | |
Commercial Paper | | 69.46 | | | $ | 812,756,090 | |
Certificates of Deposit | | 12.82 | | | | 150,000,000 | |
Repurchase Agreement | | 10.51 | | | | 123,000,000 | |
U.S. Government & Agency Obligations | | 4.70 | | | | 55,000,000 | |
Corporate Bonds | | 2.56 | | | | 30,000,000 | |
Registered Investment Company | | 0.16 | | | | 1,900,537 | |
| | | | | | | |
Total Investments | | 100.21 | | | $ | 1,172,656,627 | |
Other Liabilities in Excess of Assets | | (0.21 | ) | | | (2,468,098 | ) |
| | | | | | | |
Net Assets | | 100.00 | | | $ | 1,170,188,529 | |
| | | | | | | |
See Notes to Financial Statements.
14
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Core Bond Fund
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | ASSET-BACKED SECURITIES — 2.34% |
| $ | 4,200,000 | | Capital Auto Receivables Asset Trust, 2006-SN1A B(a) | | 5.50 | % | | 04/20/10 | | $ | 4,189,576 |
| | 2,015,000 | | Capital Auto Receivables Asset Trust, 2007-3 A4 | | 5.00 | | | 03/17/14 | | | 2,020,575 |
| | 6,765,000 | | Citibank Credit Card Issuance Trust, 2003-A10 | | 4.75 | | | 12/10/15 | | | 6,588,500 |
| | | | | | | | | | | |
| | | TOTAL ASSET-BACKED SECURITIES
(Cost $12,779,089) | | | 12,798,651 |
| | | | | | | | | | | |
| | COLLATERALIZED MORTGAGE OBLIGATIONS — 6.99% |
| | | NON-GOVERNMENTAL AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS —6.00% |
| | 435,193 | | Bear Stearns Adjustable Rate Mortgage Trust, 2004-10 15A1(b) | | 4.60 | | | 01/25/35 | | | 433,167 |
| | 1,794,354 | | Citigroup Mortgage Loan Trust, 2004-HYB4 WA(b) | | 4.45 | | | 12/25/34 | | | 1,768,065 |
| | 1,671,274 | | Countrywide Alternative Loan Trust, 2004-16CB 1A2 | | 6.00 | | | 10/25/34 | | | 1,655,085 |
| | 2,550,697 | | Countrywide Alternative Loan Trust, 2004-22CB 1A1 | | 5.50 | | | 07/25/34 | | | 2,529,217 |
| | 6,648,497 | | Indymac Index Mortgage Loan Trust, 2004-AR4 3A(b) | | 4.70 | | | 08/25/34 | | | 6,659,512 |
| | 7,238,080 | | JP Morgan Mortgage Trust, 2005-A6 1A1(b) | | 5.14 | | | 09/25/35 | | | 7,153,469 |
| | 10,195,682 | | Wells Fargo Mortgage Backed Securities Trust, 2004-EE 3A1(b) | | 3.99 | | | 12/25/34 | | | 10,079,593 |
| | 2,647,086 | | Wells Fargo Mortgage Backed Securities Trust, 2005-AR1 1A1(b) | | 4.54 | | | 02/25/35 | | | 2,616,011 |
| | | | | | | | | | | |
| | | | | | | | | | | 32,894,119 |
| | | | | | | | | | | |
| | | FEDERAL HOME LOAN MORTGAGE CORPORATION — 0.43% |
| | 2,306,295 | | 2333 UZ | | 6.50 | | | 07/15/31 | | | 2,340,141 |
| | | | | | | | | | | |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | COLLATERALIZED MORTGAGE OBLIGATIONS — (continued) |
| | | FEDERAL NATIONAL MORTGAGE ASSOCIATION —0.56% |
| $ | 3,080,000 | | 2003-17 QT | | 5.00 | % | | 08/25/27 | | $ | 3,075,934 |
| | | | | | | | | | | |
| | | TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $38,670,456) | | | 38,310,194 |
| | | | | | | | | | | |
| | COMMERCIAL MORTGAGE-BACKED SECURITIES — 16.60% |
| | 4,225,000 | | Asset Securitization Corp., 1997-D4 A4(b) | | 8.07 | | | 04/14/29 | | | 4,397,171 |
| | 2,497,000 | | Bank of America Commercial Mortgage, Inc., 2004-1 A4 | | 4.76 | | | 11/10/39 | | | 2,409,425 |
| | 5,000,000 | | Bear Stearns Commercial Mortgage Securities, 2006-PW13 A3 | | 5.52 | | | 09/11/41 | | | 5,006,421 |
| | 1,000,000 | | Credit Suisse First Boston Mortgage Securities Corp., 2002-CKS4 G(a)(b) | | 6.01 | | | 11/15/36 | | | 983,412 |
| | 6,775,000 | | GE Capital Commercial Mortgage Corp., 2000-1 Cl(b) | | 6.73 | | | 01/15/33 | | | 7,110,024 |
| | 1,781,000 | | GMAC Commercial Mortgage Securities, 1999-C1(b) | | 7.06 | | | 05/15/33 | | | 1,821,061 |
| | 3,449,000 | | Greenwich Capital Commercial Funding Corp., 2004-GG1 A1(b) | | 5.32 | | | 06/10/36 | | | 3,425,221 |
| | 13,080,000 | | GS Mortgage Securities Corp. II, 2007-GG10 A4(b) | | 5.99 | | | 08/10/45 | | | 13,302,550 |
| | 5,700,000 | | Merrill Lynch/Countrywide Commercial Mortgage Trust, 2007-8 A3(b) | | 6.16 | | | 08/12/49 | | | 5,838,328 |
| | 3,150,000 | | Morgan Stanley Dean Witter Capital I, 2000-LIF2 C(b) | | 7.50 | | | 10/15/33 | | | 3,362,340 |
| | 1,245,000 | | Morgan Stanley Dean Witter Capital I, 2003-TOP9 A2 | | 4.74 | | | 11/13/36 | | | 1,215,146 |
| | 5,571,000 | | Nomura Asset Securities Corp., 1998-D6 A4(b) | | 7.62 | | | 03/15/30 | | | 6,286,130 |
See Notes to Financial Statements.
15
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Core Bond Fund — (continued)
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | COMMERCIAL MORTGAGE-BACKED SECURITIES — (continued) |
| $ | 4,225,000 | | Wachovia Bank Commercial Mortgage Trust, 2002- C1 A4 | | 6.29 | % | | 04/15/34 | | $ | 4,408,559 |
| | 3,601,000 | | Wachovia Bank Commercial Mortgage Trust, 2003-C9 A3 | | 4.61 | | | 12/15/35 | | | 3,551,734 |
| | 6,099,000 | | Wachovia Bank Commercial Mortgage Trust, 2004-C12 A2 | | 5.00 | | | 07/15/41 | | | 6,091,863 |
| | 3,905,000 | | Wachovia Bank Commercial Mortgage Trust, 2004-C12 A3(b) | | 5.23 | | | 07/15/41 | | | 3,908,339 |
| | 17,926,000 | | Wachovia Bank Commercial Mortgage Trust, 2005-C20 A5(b) | | 5.09 | | | 07/15/42 | | | 17,834,208 |
| | | | | | | | | | | |
| | | TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES
(Cost $91,058,408) | | | 90,951,932 |
| | | | | | | | | | | |
| | CORPORATE BONDS — 18.56% |
| | 2,615,000 | | America Movil S.A. de C.V. | | 5.50 | | | 03/01/14 | | | 2,577,595 |
| | 5,700,000 | | Bank One Corp. | | 7.88 | | | 08/01/10 | | | 6,098,567 |
| | 6,000,000 | | Barclays Bank PLC(a)(b) | | 5.93 | | | 12/31/49 | | | 5,692,542 |
| | 1,620,000 | | Bear Stearns Co., Inc. | | 5.70 | | | 11/15/14 | | | 1,586,030 |
| | 5,520,000 | | Bottling Group LLC | | 5.50 | | | 04/01/16 | | | 5,527,397 |
| | 2,300,000 | | British Telecommunications PLC | | 9.13 | | | 12/15/30 | | | 3,045,665 |
| | 2,715,000 | | Caterpillar Financial Services Corp. | | 5.85 | | | 09/01/17 | | | 2,739,723 |
| | 265,000 | | Caterpillar, Inc. | | 5.70 | | | 08/15/16 | | | 264,432 |
| | 5,715,000 | | Citigroup, Inc. | | 5.25 | | | 02/27/12 | | | 5,713,794 |
| | 2,600,000 | | Comcast Cable Holdings LLC | | 9.80 | | | 02/01/12 | | | 3,009,373 |
| | 1,441,000 | | Daimler Chrysler N.A. Holding Corp. | | 7.20 | | | 09/01/09 | | | 1,492,657 |
| | 2,000,000 | | Deutsche Telekom International Finance | | 5.38 | | | 03/23/11 | | | 2,000,464 |
| | 1,310,000 | | Deutsche Telekom International Finance, Multi-Coupon Bond | | 8.00 | | | 06/15/10 | | | 1,403,247 |
| | 1,500,000 | | Deutsche Telekom International Finance, Multi-Coupon Bond | | 8.25 | | | 06/15/30 | | | 1,836,244 |
| | 1,700,000 | | Ford Motor Credit Co. | | 8.63 | | | 11/01/10 | | | 1,685,319 |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | CORPORATE BONDS —(continued) |
| $ | 1,400,000 | | General Electric Capital Corp. | | 5.00 | % | | 11/15/11 | | $ | 1,393,676 |
| | 1,695,000 | | General Electric Capital Corp. | | 5.88 | | | 02/15/12 | | | 1,739,592 |
| | 2,995,000 | | General Electric Capital Corp. | | 6.00 | | | 06/15/12 | | | 3,088,279 |
| | 2,710,000 | | General Mills, Inc. | | 5.65 | | | 09/10/12 | | | 2,734,127 |
| | 1,185,000 | | Georgia Power Co. | | 5.70 | | | 06/01/17 | | | 1,184,983 |
| | 5,834,000 | | HSBC Finance Corp. | | 8.00 | | | 07/15/10 | | | 6,260,979 |
| | 2,000,000 | | Morgan Stanley | | 6.75 | | | 04/15/11 | | | 2,090,260 |
| | 685,000 | | Nisource Finance Corp. | | 5.25 | | | 09/15/17 | | | 635,762 |
| | 3,825,000 | | Oracle Corp. | | 5.25 | | | 01/15/16 | | | 3,724,552 |
| | 1,441,000 | | Prudential Financial, Inc. | | 5.10 | | | 09/20/14 | | | 1,389,125 |
| | 4,500,000 | | RBS Capital Trust III(b)(c) | | 5.51 | | | 09/29/49 | | | 4,210,375 |
| | 1,670,000 | | Sprint Capital Corp. | | 8.75 | | | 03/15/32 | | | 1,915,054 |
| | 4,100,000 | | Target Corp. | | 5.88 | | | 07/15/16 | | | 4,099,832 |
| | 2,183,000 | | Time Warner Cos., Inc. | | 7.25 | | | 10/15/17 | | | 2,322,247 |
| | 5,000,000 | | UBS Preferred Funding Trust I(b) | | 8.62 | | | 10/29/49 | | | 5,430,315 |
| | 1,600,000 | | UnitedHealth Group, Inc.(a) | | 6.00 | | | 06/15/17 | | | 1,598,685 |
| | 3,050,000 | | Virginia Electric & Power Co. | | 5.95 | | | 09/15/17 | | | 3,045,581 |
| | 1,735,000 | | Wal Mart Stores, Inc. | | 5.00 | | | 04/05/12 | | | 1,719,763 |
| | 2,441,000 | | Wal-Mart Stores, Inc. | | 4.13 | | | 02/15/11 | | | 2,371,334 |
| | 5,350,000 | | Wells Fargo & Co. | | 5.00 | | | 11/15/14 | | | 5,156,892 |
| | 950,000 | | Xerox Corp. | | 6.40 | | | 03/15/16 | | | 961,751 |
| | | | | | | | | | | |
| | | TOTAL CORPORATE BONDS
(Cost $101,964,345) | | | 101,746,213 |
| | | | | | | | | | | |
| | TAX-EXEMPT SECURITY — 0.31% |
| | 1,590,000 | | Massachusetts Bay Transportation Authority, Massachusetts Sales Tax, Revenue Bonds, Series A | | 5.00 | | | 07/01/31 | | | 1,712,414 |
| | | | | | | | | | | |
| | | TOTAL TAX-EXEMPT SECURITY
(Cost $1,751,974) | | | 1,712,414 |
| | | | | | | | | | | |
| | U.S. GOVERNMENT AGENCY BONDS & NOTES — 0.97% |
| | | FREDDIE MAC — 0.51% |
| | 2,440,000 | | | | 6.25 | | | 07/15/32 | | | 2,772,208 |
| | | | | | | | | | | |
See Notes to Financial Statements.
16
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Core Bond Fund — (continued)
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | U.S. GOVERNMENT AGENCY BONDS & NOTES — (continued) |
| | | RESOLUTION FUNDING CORPORATION — 0.46% |
| $ | 4,851,000 | | Principal Only STRIPS(d) | | 0.00 | % | | 07/15/20 | | $ | 2,541,614 |
| | | | | | | | | | | |
| | | TOTAL U.S. GOVERNMENT AGENCY BONDS & NOTES
(Cost $5,007,684) | | | 5,313,822 |
| | | | | | | | | | | |
| U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH
SECURITIES — 41.62% |
| | | FEDERAL HOME LOAN MORTGAGE CORPORATION — 10.35% |
| | 6,057,871 | | Pool # 1G1898 ARM(b) | | 5.88 | | | 06/01/36 | | | 6,094,407 |
| | 2,387,637 | | Pool # A20105 | | 5.00 | | | 04/01/34 | | | 2,283,536 |
| | 8,977,710 | | Pool # A47411 | | 4.50 | | | 10/01/35 | | | 8,341,565 |
| | 2,071,262 | | Pool # A48132 | | 7.00 | | | 12/01/35 | | | 2,139,598 |
| | 1,987,638 | | Pool # A58455 | | 5.50 | | | 03/01/37 | | | 1,946,266 |
| | 5,209,078 | | Pool # B19861 | | 4.50 | | | 08/01/20 | | | 5,014,833 |
| | 2,583,561 | | Pool # C01811 | | 5.00 | | | 04/01/34 | | | 2,470,917 |
| | 129,482 | | Pool # C71221 | | 5.00 | | | 09/01/32 | | | 124,110 |
| | 18,495 | | Pool # C74339 | | 5.00 | | | 12/01/32 | | | 17,727 |
| | 160,127 | | Pool # C74469 | | 5.00 | | | 12/01/32 | | | 153,483 |
| | 31,925 | | Pool # C74676 | | 5.00 | | | 12/01/32 | | | 30,601 |
| | 2,134,641 | | Pool # E96460 | | 5.00 | | | 05/01/18 | | | 2,098,354 |
| | 4,327,452 | | Pool # G01842 | | 4.50 | | | 06/01/35 | | | 4,020,816 |
| | 16,863,586 | | Pool # G18105 | | 5.00 | | | 03/01/21 | | | 16,534,190 |
| | 2,322,051 | | Pool # J01383 | | 5.50 | | | 03/01/21 | | | 2,315,556 |
| | 3,243,972 | | Pool # J02497 | | 4.50 | | | 09/01/20 | | | 3,123,006 |
| | | | | | | | | | | |
| | | | | | | | | | | 56,708,965 |
| | | | | | | | | | | |
| | | FEDERAL NATIONAL MORTGAGE ASSOCIATION — 29.41% |
| | 177,052 | | Pool # 251502 | | 6.50 | | | 02/01/13 | | | 181,844 |
| | 75,060 | | Pool # 252806 | | 7.50 | | | 10/01/29 | | | 78,688 |
| | 1,093,661 | | Pool # 255896 | | 6.50 | | | 08/01/35 | | | 1,114,884 |
| | 4,787,145 | | Pool # 256269 | | 5.50 | | | 06/01/36 | | | 4,689,820 |
| | 9,803,967 | | Pool # 357824 | | 5.50 | | | 06/01/35 | | | 9,614,491 |
| | 1,218,929 | | Pool # 387203 | | 4.80 | | | 01/01/12 | | | 1,208,980 |
| | 1,040,831 | | Pool # 387204 | | 4.80 | | | 01/01/12 | | | 1,032,336 |
| | 199,157 | | Pool # 443194 | | 5.50 | | | 10/01/28 | | | 196,170 |
| | 3,847 | | Pool # 450846 | | 5.50 | | | 12/01/28 | | | 3,789 |
| | 337,685 | | Pool # 452035 | | 5.50 | | | 11/01/28 | | | 332,621 |
| | 2,265 | | Pool # 454758 | | 5.50 | | | 12/01/28 | | | 2,231 |
| | 552,697 | | Pool # 561435 | | 5.50 | | | 11/01/29 | | | 544,408 |
| | 299,509 | | Pool # 578543 | | 5.50 | | | 04/01/31 | | | 294,385 |
| | 111,388 | | Pool # 627259 | | 5.50 | | | 02/01/32 | | | 109,452 |
| | 953,853 | | Pool # 632551 | | 5.50 | | | 02/01/32 | | | 937,275 |
| | 428,663 | | Pool # 632576 | | 5.50 | | | 02/01/32 | | | 421,330 |
| | 208,532 | | Pool # 694655 | | 5.50 | | | 04/01/33 | | | 204,838 |
| | 1,465,264 | | Pool # 702861 | | 5.00 | | | 04/01/18 | | | 1,440,323 |
| | 1,334,444 | | Pool # 704440 | | 5.00 | | | 05/01/18 | | | 1,311,729 |
| | 58,045 | | Pool # 710585 | | 5.50 | | | 05/01/33 | | | 57,017 |
| | 349,465 | | Pool # 735224 | | 5.50 | | | 02/01/35 | | | 343,274 |
| | 22,070,624 | | Pool # 745432 | | 5.50 | | | 04/01/36 | | | 21,644,079 |
| | 949,818 | | Pool # 781859 | | 4.50 | | | 12/01/34 | | | 881,642 |
| | 1,334,761 | | Pool # 786423 ARM(b) | | 4.59 | | | 07/01/34 | | | 1,324,902 |
| | 431,185 | | Pool # 797680 | | 4.50 | | | 10/01/35 | | | 400,236 |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH
SECURITIES —(continued) |
| | | FEDERAL NATIONAL MORTGAGE ASSOCIATION — (continued) |
| $ | 647,787 | | Pool # 805373 | | 4.50 | % | | 01/01/35 | | $ | 601,290 |
| | 6,159,345 | | Pool # 805386 ARM(b) | | 4.85 | | | 01/01/35 | | | 6,095,520 |
| | 748,393 | | Pool # 812268 | | 5.50 | | | 05/01/35 | | | 733,929 |
| | 1,008,991 | | Pool # 815479 | | 4.50 | | | 03/01/35 | | | 936,575 |
| | 1,271,697 | | Pool # 819361 | | 4.50 | | | 04/01/35 | | | 1,180,426 |
| | 535,391 | | Pool # 820492 | | 5.50 | | | 05/01/35 | | | 525,044 |
| | 734,644 | | Pool # 820989 | | 5.50 | | | 04/01/35 | | | 720,446 |
| | 709,774 | | Pool # 821567 | | 5.50 | | | 06/01/35 | | | 696,056 |
| | 1,725,574 | | Pool # 822799 | | 4.50 | | | 04/01/35 | | | 1,601,728 |
| | 6,085,226 | | Pool # 829321 | | 4.50 | | | 09/01/35 | | | 5,648,482 |
| | 8,082,723 | | Pool # 831926 | | 6.00 | | | 12/01/36 | | | 8,096,181 |
| | 4,904,429 | | Pool # 835751 | | 4.50 | | | 08/01/35 | | | 4,552,433 |
| | 1,786,633 | | Pool # 835760 | | 4.50 | | | 09/01/35 | | | 1,658,404 |
| | 1,610,049 | | Pool # 836512 | | 4.50 | | | 10/01/20 | | | 1,550,626 |
| | 4,087,042 | | Pool # 839240 | | 4.50 | | | 09/01/35 | | | 3,793,711 |
| | 2,600,373 | | Pool # 843510 | | 4.50 | | | 11/01/20 | | | 2,504,400 |
| | 1,616,173 | | Pool # 844797 | | 4.50 | | | 10/01/35 | | | 1,500,179 |
| | 1,793,946 | | Pool # 844901 | | 4.50 | | | 10/01/20 | | | 1,727,736 |
| | 5,683,479 | | Pool # 867438 | | 4.50 | | | 05/01/36 | | | 5,272,820 |
| | 4,645,441 | | Pool # 880084 | | 6.00 | | | 03/01/36 | | | 4,653,176 |
| | 5,458,986 | | Pool # 883084 | | 6.50 | | | 07/01/36 | | | 5,559,159 |
| | 696,437 | | Pool # 893426 | | 6.00 | | | 09/01/36 | | | 697,596 |
| | 2,972,931 | | Pool # 895271 | | 6.50 | | | 09/01/36 | | | 3,027,484 |
| | 4,705,343 | | Pool # 910390 | | 5.00 | | | 03/01/37 | | | 4,488,299 |
| | 1,959,597 | | Pool # 916370 | | 5.00 | | | 05/01/37 | | | 1,869,206 |
| | 8,071,805 | | Pool # 917906 | | 5.00 | | | 05/01/37 | | | 7,699,475 |
| | 30,111,220 | | Pool # 937282 | | 5.00 | | | 05/01/37 | | | 28,722,273 |
| | 6,612,962 | | Pool # 946450 ARM(b) | | 6.14 | | | 09/01/37 | | | 6,718,024 |
| | | | | | | | | | | |
| | | | | | | | | | | 161,201,422 |
| | | | | | | | | | | |
| | | GOVERNMENT NATIONAL MORTGAGE ASSOCIATION — 1.86% |
| | 281,198 | | Pool # 002562 | | 6.00 | | | 03/20/28 | | | 283,552 |
| | 1,731,128 | | Pool # 003413 | | 4.50 | | | 07/20/33 | | | 1,617,051 |
| | 329,691 | | Pool # 267812 | | 8.50 | | | 06/15/17 | | | 353,978 |
| | 1,569,095 | | Pool # 3442 | | 5.00 | | | 09/20/33 | | | 1,508,328 |
| | 2,732 | | Pool # 356873 | | 6.50 | | | 05/15/23 | | | 2,802 |
| | 29,201 | | Pool # 434772 | | 9.00 | | | 06/15/30 | | | 31,704 |
| | 46,324 | | Pool # 471660 | | 7.50 | | | 03/15/28 | | | 48,645 |
| | 118,488 | | Pool # 472028 | | 6.50 | | | 05/15/28 | | | 121,587 |
| | 53,263 | | Pool # 475847 | | 6.50 | | | 06/15/28 | | | 54,656 |
| | 20,664 | | Pool # 479087 | | 8.00 | | | 01/15/30 | | | 21,983 |
| | 296,926 | | Pool # 479088 | | 8.00 | | | 01/15/30 | | | 315,878 |
| | 114,538 | | Pool # 503711 | | 7.00 | | | 05/15/29 | | | 120,024 |
| | 9,599 | | Pool # 525556 | | 8.00 | | | 01/15/30 | | | 10,212 |
| | 10,842 | | Pool # 525945 | | 9.00 | | | 07/15/30 | | | 11,772 |
| | 106,859 | | Pool # 568670 | | 6.50 | | | 04/15/32 | | | 109,470 |
| | 199,220 | | Pool # 575441 | | 6.50 | | | 12/15/31 | | | 204,187 |
| | 558,400 | | Pool # 598127 | | 5.50 | | | 03/15/18 | | | 559,374 |
| | 1,199,530 | | Pool # 607668 | | 5.50 | | | 02/15/18 | | | 1,201,623 |
| | 757,885 | | Pool # 615639 | | 4.50 | | | 09/15/33 | | | 712,679 |
| | 146,831 | | Pool # 780086 | | 8.50 | | | 11/15/17 | | | 156,855 |
| | 644,617 | | Pool # 780548 | | 8.50 | | | 12/15/17 | | | 688,622 |
See Notes to Financial Statements.
17
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Core Bond Fund — (continued)
| | | | | | | | | | | | |
Principal
Amount | | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | | |
| U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH
SECURITIES —(continued) |
| | | | GOVERNMENT NATIONAL MORTGAGE ASSOCIATION —(continued) |
| $ | 484,872 | | | Pool # 780865 | | 9.50 | % | | 11/15/17 | | $ | 525,574 |
| | 163,538 | | | Pool # 781036 | | 8.00 | | | 10/15/17 | | | 172,399 |
| | 614,937 | | | Pool # 781084 | | 9.00 | | | 12/15/17 | | | 658,553 |
| | 147,181 | | | Pool # 80185 ARM(b) | | 6.38 | | | 04/20/28 | | | 148,403 |
| | 155,788 | | | Pool # 80205 ARM(b) | | 6.38 | | | 06/20/28 | | | 157,084 |
| | 384,378 | | | Pool # 80311 ARM(b) | | 5.50 | | | 08/20/29 | | | 388,284 |
| | | | | | | | | | | | |
| | | | | | | | | | | | 10,185,279 |
| | | | | | | | | | | | |
| | | | TOTAL U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH SECURITIES
(Cost $229,035,737) | | | 228,095,666 |
| | | | | | | | | | | | |
| | U.S. GOVERNMENT SECURITIES — 11.52% |
| | | | U.S. TREASURY INFLATION PROTECTED BONDS — 1.63% |
| | 1,183,718 | | | | | 2.00 | | | 01/15/14 | | | 1,166,701 |
| | 2,762,700 | | | | | 2.38 | | | 01/15/25 | | | 2,787,089 |
| | 4,916,699 | | | | | 2.38 | | | 01/15/27 | | | 4,976,624 |
| | | | | | | | | | | | |
| | | | | | | | | | | | 8,930,414 |
| | | | | | | | | | | | |
| | | | U.S. TREASURY BONDS — 9.89% |
| | 19,880,000 | (e) | | | | 4.50 | | | 02/28/11 | | | 20,158,002 |
| | 21,810,000 | | | | | 7.63 | | | 11/15/22 | | | 28,206,459 |
| | 4,635,000 | | | | | 6.63 | | | 02/15/27 | | | 5,632,610 |
| | 200,000 | | | | | 4.75 | | | 02/15/37 | | | 197,233 |
| | | | | | | | | | | | |
| | | | | | | | | | | | 54,194,304 |
| | | | | | | | | | | | |
| | | | TOTAL U.S. GOVERNMENT SECURITIES
(Cost $62,617,784) | | | 63,124,718 |
| | | | | | | | | | | | |
| | | | |
| Contracts | | | | | | | | | | |
| | CALL OPTION PURCHASED — 0.00%* |
| | 10 | | | Euro Dollar Future, Expires 12/17/07 strike price 95.75 | | | 938 |
| | | | | | | | | | | | |
| | | | TOTAL CALL OPTION PURCHASED
(Cost $3,025) | | | 938 |
| | | | | | | | | | | | |
| | | | | | | | | | |
Principal
Amount | | | | Rate | | Maturity
Date | | Value |
| | | | | | | | | | |
| | REPURCHASE AGREEMENT — 0.62% |
| $ | 3,407,000 | | Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 02/15/36, market value $3,475,725 (repurchase proceeds $3,408,036) | | $ | 3,407,000 |
| | | | | | | | | | |
| | | TOTAL REPURCHASE AGREEMENT
(Cost $3,407,000) | | | 3,407,000 |
| | | | | | | | | | |
| | | | | | |
TOTAL INVESTMENTS
(Cost $546,295,502)(f) | | 99.53 | % | | $ | 545,461,548 |
OTHER ASSETS IN EXCESS OF LIABILITIES | | 0.47 | | | | 2,569,168 |
| | | | | | |
NET ASSETS | | 100.00 | % | | $ | 548,030,716 |
| | | | | | |
| (a) | Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2007, these securities, which are not illiquid, amounted to $12,464,215, which represents 2.27% of net assets. |
| (b) | The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007. |
| (c) | Perpetual Security. Stated maturity is first par call date. |
| (e) | A portion of this security with market value of $253,496 is pledged as collateral for open futures contracts. |
| (f) | Cost for federal income tax purposes is $546,295,502. |
| * | Rounds to less than 0.01%. |
ARM—Adjustable Rate Mortgage
LLC—Limited Liability Company
Multi-Coupon Bond—Coupon rate may increase or decrease in response to a change in the quality rating by an independent rating agency.
PLC—Public Limited Company
STRIPS—Separately Traded Registered Interest and Principal Securities
See Notes to Financial Statements.
18
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Core Bond Fund — (continued)
| | | | | | | | | | |
| Contracts | | | | Value | | | Unrealized
Appreciation
(Depreciation) | |
| FUTURES CONTRACTS | | | | | | | | |
| Long - | | | | | | | | |
| 63 | | U.S. 2 Year Treasury Note, expiring 12/31/07 (notional amount $12,983,079) | | $ | 13,043,953 | | | $ | 60,874 | |
| Short - | | | | | | | | |
| (30) | | U.S. Long-Term Treasury Bond expiring 12/19/07 (notional amount $(3,339,534)) | | | (3,340,312 | ) | | | (778 | ) |
| | | | | | | | | | |
TOTAL FUTURES CONTRACTS
|
| | $ | 60,096 | |
| | | | | | | | | | |
Interest Rate Swap Agreement
| | | | | | | | | | | | | |
Counterparty | | Notional
Amount | | Receiving
Leg | | | Paying Leg | | Expiration | | Unrealized
Appreciation |
Goldman Sachs | | $ | 5,000,000 | | 5.36 | % | | 3-month USD LIBOR | | 07/24/09 | | $ | 4,451 |
| | | | | | | | | | | | | |
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | | |
Portfolio Diversification | | % of
Net
Assets | | | Value |
U.S. Government & Agency Securities | | 54.11 | | | $ | 296,534,206 |
Corporate Bonds | | 18.56 | | | | 101,746,213 |
Commercial Mortgage-Backed Securities | | 16.60 | | | | 90,951,932 |
Collateralized Mortgage Obligations | | 6.99 | | | | 38,310,194 |
Asset-Backed Securities | | 2.34 | | | | 12,798,651 |
Repurchase Agreement | | 0.62 | | | | 3,407,000 |
Tax-Exempt Security | | 0.31 | | | | 1,712,414 |
Call Option Purchased | | 0.00 | * | | | 938 |
| | | | | | |
Total Investments | | 99.53 | | | $ | 545,461,548 |
Other Assets in Excess of Liabilities | | 0.47 | | | | 2,569,168 |
| | | | | | |
Net Assets | | 100.00 | | | $ | 548,030,716 |
| | | | | | |
| * | Rounds to less than 0.01%. |
See Notes to Financial Statements.
19
Excelsior Funds Trust
Portfolio of Investments — September 30, 2007 (Unaudited)
High Yield Fund
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | CORPORATE BONDS — 92.54% |
| | | ADVERTISING PERIODICALS — 2.45% |
| $ | 60,000 | | CanWest Media Works, Inc. | | 8.00 | % | | 09/15/12 | | $ | 58,800 |
| | 1,000,000 | | Dex Media Finance/West | | 8.50 | | | 08/15/10 | | | 1,027,500 |
| | 1,000,000 | | R.H. Donnelley Finance Corp.(a) | | 10.88 | | | 12/15/12 | | | 1,065,000 |
| | 40,000 | | R.H. Donnelley Finance Corp. | | 10.88 | | | 12/15/12 | | | 42,600 |
| | | | | | | | | | | |
| | | | | | | | | | | 2,193,900 |
| | | | | | | | | | | |
| | | CABLE TV — 2.31% |
| | 1,000,000 | | Echostar DBS Corp. | | 7.13 | | | 02/01/16 | | | 1,027,500 |
| | 1,000,000 | | NTL Cable PLC | | 9.13 | | | 08/15/16 | | | 1,037,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 2,065,000 |
| | | | | | | | | | | |
| | | CASINO HOTELS — 5.91% |
| | 1,000,000 | | American Casino & Entertainment | | 7.85 | | | 02/01/12 | | | 1,027,500 |
| | 1,000,000 | | Boyd Gaming Corp. | | 7.13 | | | 02/01/16 | | | 967,500 |
| | 1,500,000 | | Majestic Star LLC | | 9.75 | | | 01/15/11 | | | 1,260,000 |
| | 1,000,000 | | MGM Mirage, Inc. | | 8.50 | | | 09/15/10 | | | 1,045,000 |
| | 1,000,000 | | MGM Mirage, Inc. | | 7.50 | | | 06/01/16 | | | 993,750 |
| | | | | | | | | | | |
| | | | | | | | | | | 5,293,750 |
| | | | | | | | | | | |
| | | CELLULAR TELECOM — 1.57% |
| | 330,000 | | American Cellular Corp. | | 10.00 | | | 08/01/11 | | | 344,850 |
| | 1,000,000 | | Dobson Communications Corp. | | 8.88 | | | 10/01/13 | | | 1,065,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,409,850 |
| | | | | | | | | | | |
| | | CHEMICALS - DIVERSIFIED — 2.26% |
| | 37,000 | | EquiStar Chemicals LP/EquiStar Funding Corp. | | 10.13 | | | 09/01/08 | | | 38,203 |
| | 1,000,000 | | Lyondell Chemical Co. | | 10.50 | | | 06/01/13 | | | 1,075,000 |
| | 1,000,000 | | Nell AF Sarl (a) | | 8.38 | | | 08/15/15 | | | 912,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 2,025,703 |
| | | | | | | | | | | |
| | | CHEMICALS - PLASTICS — 0.58% |
| | 500,000 | | PolyOne Corp. | | 8.88 | | | 05/01/12 | | | 515,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 515,000 |
| | | | | | | | | | | |
| | | CHEMICALS - SPECIALTY — 1.11% |
| | 1,000,000 | | Tronox Worldwide LLC/Tronox Finance Corp. | | 9.50 | | | 12/01/12 | | | 997,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 997,500 |
| | | | | | | | | | | |
| | | COAL — 1.04% |
| | 1,000,000 | | Massey Energy Co. | | 6.88 | | | 12/15/13 | | | 932,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 932,500 |
| | | | | | | | | | | |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | CORPORATE BONDS — (continued) |
| | | COMMERCIAL SERVICES — 2.24% |
| $ | 1,000,000 | | Iron Mountain, Inc. | | 8.63 | % | | 04/01/13 | | $ | 1,012,500 |
| | 1,000,000 | | Iron Mountain, Inc. | | 7.75 | | | 01/15/15 | | | 997,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 2,010,000 |
| | | | | | | | | | | |
| | | COMPUTER SERVICES — 1.17% |
| | 1,000,000 | | Sungard Data Systems, Inc. | | 10.25 | | | 08/15/15 | | | 1,045,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,045,000 |
| | | | | | | | | | | |
| | | CONTAINERS - METAL/GLASS — 2.28% |
| | 1,000,000 | | Crown Americas | | 7.75 | | | 11/15/15 | | | 1,032,500 |
| | 1,000,000 | | Owens-Illinois, Inc. | | 7.50 | | | 05/15/10 | | | 1,007,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 2,040,000 |
| | | | | | | | | | | |
| | | CONTAINERS - PAPER/PLASTIC — 4.55% |
| | 1,000,000 | | BPC Holding Corp. | | 8.88 | | | 09/15/14 | | | 1,022,500 |
| | 500,000 | | Graham Packaging Co. | | 8.50 | | | 10/15/12 | | | 496,250 |
| | 500,000 | | Graham Packaging Co. | | 9.88 | | | 10/15/14 | | | 495,000 |
| | 1,000,000 | | Pregis Corp. | | 12.38 | | | 10/15/13 | | | 1,080,000 |
| | 1,000,000 | | Stone Container | | 8.00 | | | 03/15/17 | | | 982,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 4,076,250 |
| | | | | | | | | | | |
| | | COSMETICS & TOILETRIES — 1.54% |
| | 1,500,000 | | Del Laboratories, Inc. | | 8.00 | | | 02/01/12 | | | 1,380,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,380,000 |
| | | | | | | | | | | |
| | | DISTRIBUTION/WHOLESALE — 1.11% |
| | 1,000,000 | | Nebraska Book Co. | | 8.63 | | | 03/15/12 | | | 997,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 997,500 |
| | | | | | | | | | | |
| | | DIVERSIFIED MANUFACTURING OPERATIONS — 2.17% |
| | 1,000,000 | | Bombardier, Inc.(a) | | 8.00 | | | 11/15/14 | | | 1,047,500 |
| | 1,000,000 | | Harland Clarke Holdings Corp. | | 9.50 | | | 05/15/15 | | | 892,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,940,000 |
| | | | | | | | | | | |
| | | ELECTRONIC COMPONENTS - SEMICONDUCTORS — 2.16% |
| | 1,000,000 | | Amkor Technologies, Inc. | | 9.25 | | | 06/01/16 | | | 1,010,000 |
| | 1,000,000 | | Freescale Semiconductor PIK | | 9.13 | | | 12/15/14 | | | 925,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,935,000 |
| | | | | | | | | | | |
| | | FINANCE - AUTO LOANS — 3.76% |
| | 1,354,000 | | Ford Motor Credit Co. | | 9.75 | | | 09/15/10 | | | 1,381,332 |
| | 2,000,000 | | General Motors Acceptance Corp. | | 7.75 | | | 01/19/10 | | | 1,983,728 |
| | | | | | | | | | | |
| | | | | | | | | | | 3,365,060 |
| | | | | | | | | | | |
See Notes to Financial Statements.
20
Excelsior Funds Trust
Portfolio of Investments — September 30, 2007 (Unaudited)
High Yield Fund — (continued)
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | CORPORATE BONDS — (continued) |
| | | FOOD & KINDRED PRODUCTS — 1.06% |
| $ | 1,000,000 | | Pinnacle Foods Finance LLC(a) | | 9.25 | % | | 04/01/15 | | $ | 952,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 952,500 |
| | | | | | | | | | | |
| | | FOOD - MISCELLANEOUS AND DIVERSIFIED — 2.25% |
| | 1,000,000 | | Del Monte Corporation | | 8.63 | | | 12/15/12 | | | 1,015,000 |
| | 1,000,000 | | Del Monte Corporation | | 6.75 | | | 02/15/15 | | | 960,000 |
| | 40,000 | | Dole Foods Co. | | 7.25 | | | 06/15/10 | | | 37,800 |
| | | | | | | | | | | |
| | | | | | | | | | | 2,012,800 |
| | | | | | | | | | | |
| | | FUNERAL SERVICES & RELATED ITEMS — 1.65% |
| | 1,500,000 | | Service Corp. International | | 7.00 | | | 06/15/17 | | | 1,473,750 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,473,750 |
| | | | | | | | | | | |
| | | HEAVY CONSTRUCTION EQUIPMENT RENTAL — 1.07% |
| | 1,000,000 | | Ahern Rentals, Inc. | | 9.25 | | | 08/15/13 | | | 962,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 962,500 |
| | | | | | | | | | | |
| | | HOME FURNISHINGS — 2.20% |
| | 1,000,000 | | Sealy Mattress Co. | | 8.25 | | | 06/15/14 | | | 1,007,500 |
| | 1,000,000 | | Simmons Co. | | 7.88 | | | 01/15/14 | | | 960,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,967,500 |
| | | | | | | | | | | |
| | | MACHINERY - FARM — 1.14% |
| | 1,000,000 | | Case New Holland, Inc. | | 7.13 | | | 03/01/14 | | | 1,025,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,025,000 |
| | | | | | | | | | | |
| | | MACHINERY - GENERAL INDUSTRY — 1.11% |
| | 1,000,000 | | The Manitowoc Co., Inc. | | 7.13 | | | 11/01/13 | | | 995,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 995,000 |
| | | | | | | | | | | |
| | | MEDICAL - HOSPITALS — 0.95% |
| | 1,000,000 | | HCA, Inc. | | 6.50 | | | 02/15/16 | | | 850,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 850,000 |
| | | | | | | | | | | |
| | | MULTI - LINE INSURANCE — 2.47% |
| | 2,128,000 | | Hanover Insurance Group | | 7.63 | | | 10/15/25 | | | 2,207,942 |
| | | | | | | | | | | |
| | | | | | | | | | | 2,207,942 |
| | | | | | | | | | | |
| | | MUSIC — 2.04% |
| | 2,100,000 | | Warner Music Group | | 7.38 | | | 04/15/14 | | | 1,827,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,827,000 |
| | | | | | | | | | | |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | CORPORATE BONDS — (continued) |
| | | OFFICE AUTOMATION & EQUIPMENT — 2.25% |
| $ | 1,000,000 | | Ikon Office Solutions | | 7.75 | % | | 09/15/15 | | $ | 1,005,000 |
| | 1,000,000 | | Xerox Capital Trust I | | 8.00 | | | 02/01/27 | | | 1,008,861 |
| | | | | | | | | | | |
| | | | | | | | | | | 2,013,861 |
| | | | | | | | | | | |
| | | PAPER & RELATED PRODUCTS — 1.09% |
| | 1,000,000 | | Mercer International, Inc. | | 9.25 | | | 02/15/13 | | | 977,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 977,500 |
| | | | | | | | | | | |
| | | PIPELINES — 2.20% |
| | 1,500,000 | | Semgroup L.P.(a) | | 8.75 | | | 11/15/15 | | | 1,466,250 |
| | 500,000 | | Williams Cos.(a) | | 6.38 | | | 10/01/10 | | | 502,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,968,750 |
| | | | | | | | | | | |
| | | RACETRACKS — 1.14% |
| | 1,000,000 | | Penn National Gaming, Inc. | | 6.75 | | | 03/01/15 | | | 1,020,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,020,000 |
| | | | | | | | | | | |
| | | REAL ESTATE MANAGEMENT/SERVICES — 0.95% |
| | 1,000,000 | | Realogy Corp.(a) | | 10.50 | | | 04/15/14 | | | 852,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 852,500 |
| | | | | | | | | | | |
| | | RENTAL AUTO/EQUIPMENT — 2.16% |
| | 1,000,000 | | Avis Budget Car Rental | | 7.75 | | | 05/15/16 | | | 980,000 |
| | 1,000,000 | | Rental Service Corp. | | 9.50 | | | 12/01/14 | | | 955,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,935,000 |
| | | | | | | | | | | |
| | | RESORTS/THEME PARKS — 1.13% |
| | 1,000,000 | | Universal City Florida Holdings(b) | | 10.11 | | | 05/01/10 | | | 1,010,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,010,000 |
| | | | | | | | | | | |
| | | RETAIL - APPAREL/SHOE — 1.31% |
| | 1,250,000 | | Burlington Coat Factory | | 11.13 | | | 04/15/14 | | | 1,168,750 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,168,750 |
| | | | | | | | | | | |
| | | RETAIL - BEDDING — 0.77% |
| | 1,000,000 | | Linens ‘N Things, Inc.(b) | | 10.99 | | | 01/15/14 | | | 686,250 |
| | | | | | | | | | | |
| | | | | | | | | | | 686,250 |
| | | | | | | | | | | |
| | | RETAIL - DRUG STORE — 1.01% |
| | 1,000,000 | | Rite Aid Corp. | | 8.63 | | | 03/01/15 | | | 905,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 905,000 |
| | | | | | | | | | | |
| | | RETAIL - MAJOR DEPARTMENT STORE — 2.38% |
| | 1,000,000 | | Neiman Marcus Group, Inc. PIK | | 9.00 | | | 10/15/15 | | | 1,065,000 |
| | 1,000,000 | | Saks, Inc. | | 9.88 | | | 10/01/11 | | | 1,065,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 2,130,000 |
| | | | | | | | | | | |
See Notes to Financial Statements.
21
Excelsior Funds Trust
Portfolio of Investments — September 30, 2007 (Unaudited)
High Yield Fund — (continued)
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | CORPORATE BONDS — (continued) |
| | | RETAIL - TOY STORE — 0.45% |
| $ | 500,000 | | Toys R Us | | 7.38 | % | | 10/15/18 | | $ | 401,250 |
| | | | | | | | | | | |
| | | | | | | | | | | 401,250 |
| | | | | | | | | | | |
| | | RETAIL - VIDEO RENTAL — 1.51% |
| | 1,500,000 | | Blockbuster, Inc. | | 9.00 | | | 09/01/12 | | | 1,350,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,350,000 |
| | | | | | | | | | | |
| | | RUBBER - TIRES — 0.05% |
| | 41,000 | | Goodyear Tire & Rubber Co. | | 9.00 | | | 07/01/15 | | | 43,767 |
| | | | | | | | | | | |
| | | | | | | | | | | 43,767 |
| | | | | | | | | | | |
| | | SATELLITE TELECOM — 2.54% |
| | 650,000 | | Inmarsat Finance PLC | | 7.63 | | | 06/30/12 | | | 669,500 |
| | 1,500,000 | | Intelsat Bermuda Ltd. | | 11.25 | | | 06/15/16 | | | 1,606,875 |
| | | | | | | | | | | |
| | | | | | | | | | | 2,276,375 |
| | | | | | | | | | | |
| | | SCHOOLS — 1.63% |
| | 1,500,000 | | Knowledge Learning Center(a) | | 7.75 | | | 02/01/15 | | | 1,455,000 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,455,000 |
| | | | | | | | | | | |
| | | SPECIAL PURPOSE ENTITY — 4.80% |
| | 3,200,000 | | Targeted Return Index Securities Trust (TRAIN), Series HY-1-2006(a) | | 7.55 | | | 05/01/16 | | | 3,136,288 |
| | 1,500,000 | | Wimar OPCO LLC(a) | | 9.63 | | | 12/15/14 | | | 1,162,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 4,298,788 |
| | | | | | | | | | | |
| | | TELEPHONE - INTEGRATED — 9.82% |
| | 2,000,000 | | Cincinnati Bell, Inc. | | 8.38 | | | 01/15/14 | | | 1,995,000 |
| | 1,000,000 | | Citizens Communications | | 9.25 | | | 05/15/11 | | | 1,085,000 |
| | 649,000 | | Consolidated Communications Holding | | 9.75 | | | 04/01/12 | | | 655,490 |
| | 1,500,000 | | Hawaiian Telcom Communication | | 12.50 | | | 05/01/15 | | | 1,620,000 |
| | 1,250,000 | | Nordic Telephone Co. Holdings(a) | | 8.88 | | | 05/01/16 | | | 1,318,750 |
| | 1,000,000 | | Valor Telecom Enterprise | | 7.75 | | | 02/15/15 | | | 1,048,071 |
| | 1,000,000 | | Windstream Corp. | | 8.63 | | | 08/01/16 | | | 1,066,250 |
| | | | | | | | | | | |
| | | | | | | | | | | 8,788,561 |
| | | | | | | | | | | |
| | | TELEVISION — 0.03% |
| | 26,000 | | Sinclair Broadcast Group | | 8.00 | | | 03/15/12 | | | 26,585 |
| | | | | | | | | | | |
| | | | | | | | | | | 26,585 |
| | | | | | | | | | | |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | CORPORATE BONDS — (continued) |
| | | | | | | | | | | |
| | | TRAVEL SERVICES — 1.17% |
| $ | 1,000,000 | | Travelport LLC | | 11.88 | % | | 09/01/16 | | $ | 1,047,500 |
| | | | | | | | | | | |
| | | | | | | | | | | 1,047,500 |
| | | | | | | | | | | |
| | | TOTAL CORPORATE BONDS
(Cost $83,729,945) | | | 82,851,442 |
| | | | | | | | | | | |
| | BANK LOANS — 2.15% |
| | | COMPUTER SERVICES — 2.15% |
| | 2,000,000 | | First Data Corp.(b) | | 7.98 | | | 09/24/14 | | | 1,927,400 |
| | | | | | | | | | | |
| | | TOTAL BANK LOANS
(Cost $1,940,000) | | | 1,927,400 |
| | | | | | | | | | | |
Shares | | | | | | | | | |
| | COMMON STOCK — 2.70% | | | | | | | | |
| | | METAL - ALUMINUM — 2.70% |
| | 127,380 | | Ormet Corp.(c) | | | 2,420,220 |
| | | | | | | | | | | |
| | | TOTAL COMMON STOCK
(Cost $1,019,040) | | | 2,420,220 |
| | | | | | | | | | | |
Principal
Amount | | | | | | | | | |
| | REPURCHASE AGREEMENT — 3.44% |
| $ | 3,085,000 | | Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 02/15/36, market value $3,150,175 (repurchase proceeds $3,085,938) | | | 3,085,000 |
| | | | | | | | | | | |
| | | TOTAL REPURCHASE AGREEMENT
(Cost $3,085,000) | | | 3,085,000 |
| | | | | | | | | | | |
| | | | | | | |
TOTAL INVESTMENTS
(Cost $89,773,985)(d) | | 100.83 | % | | $ | 90,284,062 | |
OTHER LIABILITIES IN EXCESS OF ASSETS | | (0.83 | ) | | | (746,643 | ) |
| | | | | | | |
NET ASSETS | | 100.00 | % | | $ | 89,537,419 | |
| | | | | | | |
| (a) | Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. This security may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2007, these securities, which are not illiquid, amounted to $13,871,288, which represents 15.49% of net assets. |
| (b) | The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007. |
| (c) | Non-income producing security. |
| (d) | Cost for federal income tax purposes is $89,735,824. |
LLC—Limited Liability Company
L.P.—Limited Partnership
PIK—Payment-In-Kind
PLC—Public Limited Company
See Notes to Financial Statements.
22
Excelsior Funds Trust
Portfolio of Investments — September 30, 2007 (Unaudited)
High Yield Fund — (continued)
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | | | |
Sector Diversification | | % of
Net
Assets | | | Value | |
Consumer Cyclical | | 21.05 | | | $ | 18,838,267 | |
Communications | | 18.72 | | | | 16,760,271 | |
Consumer Non-Cyclical | | 13.48 | | | | 12,069,050 | |
Financial | | 13.11 | | | | 11,734,290 | |
Industrials | | 12.32 | | | | 11,038,750 | |
Basic Materials | | 7.74 | | | | 6,935,923 | |
Technology | | 7.73 | | | | 6,921,261 | |
Repurchase Agreement | | 3.44 | | | | 3,085,000 | |
Energy | | 3.24 | | | | 2,901,250 | |
| | | | | | | |
Total Investments | | 100.83 | | | $ | 90,284,062 | |
Other Liabilities in Excess of Assets | | (0.83 | ) | | | (746,643 | ) |
| | | | | | | |
Net Assets | | 100.00 | | | $ | 89,537,419 | |
| | | | | | | |
See Notes to Financial Statements.
23
Excelsior Funds Trust
Portfolio of Investments — September 30, 2007 (Unaudited)
Equity Opportunities Fund
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — 88.28% | | |
| | CONSUMER DISCRETIONARY — 9.64% |
| 128,250 | | BorgWarner, Inc. | | $ | 11,738,722 |
| 188,500 | | Dillard’s, Inc., Class A | | | 4,114,955 |
| 145,000 | | John Wiley & Sons, Class A | | | 6,514,850 |
| 180,200 | | Life Time Fitness, Inc.(a) | | | 11,053,468 |
| 127,400 | | Sotheby’s Holdings, Inc.,
Class A | | | 6,088,446 |
| | | | | |
| | | | | 39,510,441 |
| | | | | |
| | CONSUMER STAPLES — 3.71% |
| 166,400 | | Anheuser-Busch Cos., Inc. | | | 8,318,336 |
| 106,900 | | Wm. Wrigley Jr. Co. | | | 6,866,187 |
| | | | | |
| | | | | 15,184,523 |
| | | | | |
| | ENERGY — 10.38% | | | |
| 96,300 | | Apache Corp. | | | 8,672,778 |
| 187,000 | | Cimarex Energy Co. | | | 6,965,750 |
| 616,000 | | El Paso Corp. | | | 10,453,520 |
| 86,000 | | Exxon Mobil Corp. | | | 7,960,160 |
| 89,400 | | Suncor Energy, Inc., ADR | | | 8,476,014 |
| | | | | |
| | | | | 42,528,222 |
| | | | | |
| | FINANCIAL — 15.65% |
| 184,897 | | Aegon N.V. | | | 3,518,590 |
| 201,900 | | American Capital Strategies Ltd. | | | 8,627,187 |
| 97 | | Berkshire Hathaway, Inc.,
Class A(a) | | | 11,495,470 |
| 307,200 | | Leucadia National Corp. | | | 14,813,184 |
| 142,500 | | NYSE Euronext | | | 11,281,725 |
| 292,000 | | Progressive Corp. | | | 5,667,720 |
| 133,000 | | RenaissanceRe Holdings Ltd. | | | 8,699,530 |
| | | | | |
| | | | | 64,103,406 |
| | | | | |
| | HEALTH CARE — 7.29% |
| 115,000 | | Johnson & Johnson | | | 7,555,500 |
| 113,000 | | Medtronic, Inc. | | | 6,374,330 |
| 101,900 | | Novo-Nordisk A/S, ADR | | | 12,333,976 |
| 294,000 | | Senomyx, Inc.(a) | | | 3,601,500 |
| | | | | |
| | | | | 29,865,306 |
| | | | | |
| | INDUSTRIALS — 18.75% |
| 3,222,000 | | Bombardier, Inc.,
Class B(a)(b) | | | 19,144,443 |
| 141,000 | | Canadian National Railway Co. | | | 8,037,000 |
| 171,000 | | Expeditors International of Washington, Inc. | | | 8,088,300 |
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | |
| | INDUSTRIALS — (continued) |
| 181,500 | | General Electric Co. | | $ | 7,514,100 |
| 80,300 | | Granite Construction, Inc. | | | 4,257,506 |
| 454,600 | | Quanta Services, Inc.(a) | | | 12,024,170 |
| 213,200 | | Rolls-Royce Group PLC, ADR | | | 11,384,880 |
| 200,000 | | Simpson Manufacturing Co., Inc. | | | 6,370,000 |
| | | | | |
| | | | | 76,820,399 |
| | | | | |
| | INFORMATION TECHNOLOGY — 4.47% |
| 1,180,000 | | 3com Corp.(a) | | | 5,829,200 |
| 162,300 | | Microchip Technology, Inc. | | | 5,894,736 |
| 192,500 | | National Instruments Corp. | | | 6,608,525 |
| | | | | |
| | | | | 18,332,461 |
| | | | | |
| | MATERIALS — 12.98% |
| 130,000 | | Aracruz Celulose SA, ADR | | | 9,566,700 |
| 242,000 | | Bowater, Inc. | | | 3,610,640 |
| 221,000 | | Monsanto Co. | | | 18,948,540 |
| 166,600 | | Nucor Corp. | | | 9,907,702 |
| 124,900 | | Vulcan Materials Co. | | | 11,134,836 |
| | | | | |
| | | | | 53,168,418 |
| | | | | |
| | REAL ESTATE — 0.99% |
| 121,000 | | St. Joe Co. | | | 4,066,810 |
| | | | | |
| | UTILITIES — 4.42% | | | |
| 542,000 | | AES Corp.(a) | | | 10,861,680 |
| 461,000 | | Sierra Pacific Resources | | | 7,251,530 |
| | | | | |
| | | | | 18,113,210 |
| | | | | |
| | TOTAL COMMON STOCKS
(Cost $289,235,618) | | | 361,693,196 |
| | | | | |
| FOREIGN COMMON STOCKS — 9.10% | | |
| | BELGIUM — 1.43% | | | |
| 323,000 | | RHJ International(a) | | | 5,865,899 |
| �� | | | | |
| | GERMANY — 1.34% | | | |
| 85,200 | | Bayerische Motoren Werke AG | | | 5,485,539 |
| | | | | |
| | SINGAPORE — 6.33% | | | |
| 6,097,000 | | Noble Group Ltd. | | | 8,886,856 |
| 3,143,000 | | Olam International Ltd. | | | 6,638,054 |
| 1,203,385 | | Singapore Exchange Ltd. | | | 10,415,811 |
| | | | | |
| | | | | 25,940,721 |
| | | | | |
| | TOTAL FOREIGN COMMON STOCKS
(Cost $22,615,223) | | | 37,292,159 |
| | | | | |
See Notes to Financial Statements.
24
Excelsior Funds Trust
Portfolio of Investments — September 30, 2007 (Unaudited)
Equity Opportunities Fund — (continued)
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
| REPURCHASE AGREEMENT — 1.52% | | |
| $ | 6,231,000 | | Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 05/15/17, market value $6,358,500 (repurchase proceeds $6,232,895) | | $ | 6,231,000 |
| | | | | | |
| | | TOTAL REPURCHASE AGREEMENT
(Cost $6,231,000) | | | 6,231,000 |
| | | | | | |
| | | | | | |
TOTAL INVESTMENTS
(Cost $318,081,841)(c) | | 98.90 | % | | $ | 405,216,355 |
OTHER ASSETS IN EXCESS OF LIABILITIES | | 1.10 | | | | 4,520,017 |
| | | | | | |
NET ASSETS | | 100.00 | % | | $ | 409,736,372 |
| | | | | | |
| (a) | Non-income producing security. |
| (b) | Represents fair value as determined in good faith under procedures approved by the Board of Trustees. |
| (c) | Cost for federal income tax purposes is $318,081,841. |
ADR—American Depository Receipt
Ltd.—Limited
PLC—Public Limited Company
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | |
Sector Diversification | | % of
Net
Assets | | Value |
Industrials | | 20.92 | | $ | 85,707,255 |
Financial | | 19.62 | | | 80,385,116 |
Materials | | 12.98 | | | 53,168,418 |
Consumer Discretionary | | 10.98 | | | 44,995,980 |
Energy | | 10.38 | | | 42,528,222 |
Health Care | | 7.29 | | | 29,865,306 |
Consumer Staples | | 5.33 | | | 21,822,577 |
Information Technology | | 4.47 | | | 18,332,461 |
Utilities | | 4.42 | | | 18,113,210 |
Repurchase Agreement | | 1.52 | | | 6,231,000 |
Real Estate | | 0.99 | | | 4,066,810 |
| | | | | |
Total Investments | | 98.90 | | $ | 405,216,355 |
Other Assets in Excess of Liabilities | | 1.10 | | | 4,520,017 |
| | | | | |
Net Assets | | 100.00 | | $ | 409,736,372 |
| | | | | |
See Notes to Financial Statements
25
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Large Cap Growth Fund
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — 99.18% | | |
| | CONSUMER DISCRETIONARY — 14.13% |
| 476,700 | | Coach, Inc.(a) | | $ | 22,533,609 |
| 658,114 | | eBay, Inc.(a) | | | 25,679,608 |
| 191,212 | | Las Vegas Sands Corp.(a) | | | 25,511,505 |
| 663,300 | | Lowe’s Companies, Inc. | | | 18,585,666 |
| 1,201,000 | | Starbucks Corp.(a) | | | 31,466,200 |
| | | | | |
| | | | | 123,776,588 |
| | | | | |
| | FINANCIAL — 6.95% |
| 64,800 | | Chicago Mercantile Exchange | | | 38,060,280 |
| 368,300 | | Lehman Brothers Holdings, Inc. | | | 22,735,159 |
| | | | | |
| | | | | 60,795,439 |
| | | | | |
| | HEALTH CARE — 29.69% |
| 195,155 | | Alcon, Inc. | | | 28,086,707 |
| 546,400 | | Allergan, Inc. | | | 35,226,408 |
| 523,100 | | Celgene Corp.(a) | | | 37,302,261 |
| 364,900 | | Covance, Inc.(a) | | | 28,425,710 |
| 473,296 | | Genentech, Inc.(a) | | | 36,926,554 |
| 892,316 | | Gilead Sciences, Inc.(a) | | | 36,468,955 |
| 111,637 | | Intuitive Surgical, Inc.(a) | | | 25,676,510 |
| 394,512 | | Zimmer Holdings, Inc.(a) | | | 31,951,527 |
| | | | | |
| | | | | 260,064,632 |
| | | | | |
| | INDUSTRIALS — 6.03% |
| 510,000 | | Expeditors International of Washington, Inc. | | | 24,123,000 |
| 243,694 | | First Solar, Inc.(a) | | | 28,692,532 |
| | | | | |
| | | | | 52,815,532 |
| | | | | |
| | INFORMATION TECHNOLOGY — 38.17% |
| 572,500 | | Adobe Systems, Inc.(a) | | | 24,995,350 |
| 1,240,400 | | Akamai Technologies, Inc.(a) | | | 35,636,692 |
| 227,800 | | Apple Computer, Inc.(a) | | | 34,976,412 |
| 820,587 | | Broadcom Corp., Class A(a) | | | 29,902,190 |
| 1,083,500 | | Corning, Inc. | | | 26,708,275 |
| 431,815 | | Electronic Arts, Inc.(a) | | | 24,177,322 |
| 60,538 | | Google, Inc., Class A(a) | | | 34,341,391 |
| 513,306 | | Infosys Technologies Ltd., ADR | | | 24,838,878 |
| 809,100 | | Qualcomm, Inc. | | | 34,192,566 |
| 278,183 | | Research In Motion Ltd.(a) | | | 27,414,935 |
| 436,625 | | VMware, Inc., Class A(a) | | | 37,113,125 |
| | | | | |
| | | | | 334,297,136 |
| | | | | |
| | | | | | |
| Shares | | | | Value |
| | | | | | |
| COMMON STOCKS — (continued) | | |
| | | TELECOMMUNICATION SERVICES — 4.21% |
| | 575,900 | | America Movil S.A. de C.V., Series LG, ADR | | $ | 36,857,600 |
| | | | | | |
| | | TOTAL COMMON STOCKS
(Cost $662,920,678) | | | 868,606,927 |
| | | | | | |
| | |
Principal
Amount | | | | |
| REPURCHASE AGREEMENT — 1.53% | | |
| $ | 13,397,000 | | Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 02/15/36, market value $13,668,313 (repurchase proceeds $13,401,075) | | | 13,397,000 |
| | | | | | |
| | | TOTAL REPURCHASE AGREEMENT
(Cost $13,397,000) | | | 13,397,000 |
| | | | | | |
| | | | | | | |
TOTAL INVESTMENTS
(Cost $676,317,678)(b) | | 100.71 | % | | $ | 882,003,927 | |
OTHER LIABILITIES IN EXCESS OF ASSETS | | (0.71 | ) | | | (6,198,688 | ) |
| | | | | | | |
NET ASSETS | | 100.00 | % | | $ | 875,805,239 | |
| | | | | | | |
| (a) | Non-income producing security. |
| (b) | Cost for federal income tax purposes is $676,317,678. |
ADR—American Depository Receipt
Ltd.—Limited
See Notes to Financial Statements.
26
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Large Cap Growth Fund — (continued)
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | | | |
Sector Diversification | | % of
Net
Assets | | | Value | |
Information Technology | | 38.17 | | | $ | 334,297,136 | |
Health Care | | 29.69 | | | | 260,064,632 | |
Consumer Discretionary | | 14.13 | | | | 123,776,588 | |
Financial | | 6.95 | | | | 60,795,439 | |
Industrials | | 6.03 | | | | 52,815,532 | |
Telecommunication Services | | 4.21 | | | | 36,857,600 | |
Repurchase Agreement | | 1.53 | | | | 13,397,000 | |
| | | | | | | |
Total Investments | | 100.71 | | | $ | 882,003,927 | |
Other Liabilities in Excess of Assets | | (0.71 | ) | | | (6,198,688 | ) |
| | | | | | | |
Net Assets | | 100.00 | | | $ | 875,805,239 | |
| | | | | | | |
See Notes to Financial Statements.
27
Excelsior Funds Trust
Portfolio of Investments — September 30, 2007 (Unaudited)
Mid Cap Value and Restructuring Fund
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — 98.00% | | |
| | CONSUMER DISCRETIONARY — 22.87% |
| 39,400 | | Autozone, Inc.(a) | | $ | 4,575,913 |
| 91,000 | | Black & Decker Corp. | | | 7,580,299 |
| 112,900 | | Centex Corp. | | | 2,999,753 |
| 360,000 | | Constellation Brands, Inc.(a) | | | 8,715,600 |
| 185,000 | | EchoStar Communications, Inc.(a) | | | 8,659,851 |
| 160,000 | | Limited Brands | | | 3,662,400 |
| 323,200 | | Onex Corp. | | | 11,876,499 |
| 167,700 | | Sherwin-Williams Co. | | | 11,019,567 |
| 378,200 | | Tempur-Pedic International, Inc. | | | 13,520,649 |
| 295,000 | | TJX Cos., Inc. | | | 8,575,650 |
| | | | | |
| | | | | 81,186,181 |
| | | | | |
| | CONSUMER STAPLES — 1.66% |
| 230,000 | | Dean Foods Co. | | | 5,883,400 |
| | | | | |
| | ENERGY — 11.78% |
| 86,000 | | Cimarex Energy Co. | | | 3,203,500 |
| 133,300 | | Devon Energy Corp. | | | 11,090,560 |
| 349,800 | | El Paso Corp. | | | 5,936,106 |
| 260,000 | | Noble Corp. | | | 12,753,000 |
| 137,800 | | Occidental Petroleum Corp. | | | 8,830,227 |
| | | | | |
| | | | | 41,813,393 |
| | | | | |
| | FINANCIAL — 21.03% |
| 94,000 | | Ace Ltd. | | | 5,693,580 |
| 260,000 | | CIT Group, Inc. | | | 10,452,000 |
| 470,000 | | E*TRADE Group, Inc.(a) | | | 6,138,200 |
| 245,000 | | First Marblehead Corp. | | | 9,292,850 |
| 141,600 | | Lehman Brothers Holding, Inc. | | | 8,740,967 |
| 160,000 | | Leucadia National Corp. | | | 7,715,200 |
| 61,400 | | Mastercard, Inc., Class A | | | 9,085,358 |
| 150,000 | | Progressive Corp. | | | 2,911,500 |
| 83,000 | | RenaissanceRe Holdings Ltd. | | | 5,429,029 |
| 310,000 | | W.R. Berkley Corp. | | | 9,185,300 |
| | | | | |
| | | | | 74,643,984 |
| | | | | |
| | HEALTH CARE — 3.68% |
| 176,700 | | Shire Pharmaceuticals PLC ADR | | | 13,072,266 |
| | | | | |
| | INDUSTRIALS — 20.31% |
| 130,000 | | Autoliv, Inc. | | | 7,767,500 |
| 193,000 | | Brink’s Co. | | | 10,784,840 |
| 247,000 | | Empresa Brasileira de Aeronautica S.A. ADR | | | 10,848,240 |
| 150,000 | | Kennametal, Inc. | | | 12,597,000 |
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | |
| | INDUSTRIALS — (continued) |
| 22,900 | | Lincoln Electric Holdings, Inc. | | $ | 1,777,269 |
| 172,000 | | Mueller Industries, Inc. | | | 6,216,080 |
| 185,000 | | Oshkosh Truck Corp. | | | 11,464,450 |
| 330,300 | | United Rentals, Inc.(a) | | | 10,625,751 |
| | | | | |
| | | | | 72,081,130 |
| | | | | |
| | INFORMATION TECHNOLOGY — 4.47% |
| 130,000 | | Electronic Data Systems Corp. | | | 2,839,200 |
| 225,000 | | Harris Corp. | | | 13,002,748 |
| | | | | |
| | | | | 15,841,948 |
| | | | | |
| | MATERIALS — 7.91% |
| 210,700 | | Aracruz Cellulose S.A. ADR | | | 15,505,417 |
| 129,700 | | Cabot Microelectronics Corp.(a) | | | 5,544,675 |
| 380,000 | | Sterlite Industries (India) Ltd. ADS(a) | | | 7,030,000 |
| | | | | |
| | | | | 28,080,092 |
| | | | | |
| | REAL ESTATE — 0.98% |
| 103,800 | | St. Joe Co. | | | 3,488,719 |
| | | | | |
| | UTILITIES — 3.31% |
| 345,000 | | Williams Cos., Inc. | | | 11,750,700 |
| | | | | |
| | TOTAL COMMON STOCKS
(Cost $214,592,502) | | | 347,841,813 |
| | | | | |
| FOREIGN COMMON STOCKS — 2.00% | | |
| | NETHERLANDS — 2.00% |
| 79,500 | | Hunter Douglas NV | | | 7,114,787 |
| | | | | |
| | TOTAL FOREIGN COMMON STOCKS
(Cost $2,926,238) | | | 7,114,787 |
| | | | | |
| | | | | | | |
TOTAL INVESTMENTS
(Cost $217,518,740)(b) | | 100.00 | % | | $ | 354,956,600 | |
OTHER LIABILITIES IN EXCESS OF ASSETS | | 0.00 | * | | | (15,811 | ) |
| | | | | | | |
NET ASSETS | | 100.00 | % | | $ | 354,940,789 | |
| | | | | | | |
| (a) | Non-income producing security. |
| (b) | Cost for federal income tax purposes is $217,518,740. |
| * | Rounds to less than 0.01%. |
ADR—American Depository Receipt
ADS—American Depository Shares
Ltd.—Limited
PLC—Public Limited Company
See Notes to Financial Statements.
28
Excelsior Funds Trust
Portfolio of Investments — September 30, 2007 (Unaudited)
Mid Cap Value and Restructuring Fund — (continued)
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | | | |
Sector Diversification | | % of
Net
Assets | | | Value | |
Consumer Discretionary | | 24.87 | | | $ | 88,300,968 | |
Financial | | 21.03 | | | | 74,643,984 | |
Industrials | | 20.31 | | | | 72,081,130 | |
Energy | | 11.78 | | | | 41,813,393 | |
Materials | | 7.91 | | | | 28,080,092 | |
Information Technology | | 4.47 | | | | 15,841,948 | |
Health Care | | 3.68 | | | | 13,072,266 | |
Utilities | | 3.31 | | | | 11,750,700 | |
Consumer Staples | | 1.66 | | | | 5,883,400 | |
Real Estate | | 0.98 | | | | 3,488,719 | |
| | | | | | | |
Total Investments | | 100.00 | | | $ | 354,956,600 | |
Other Liabilities in Excess of Assets | | 0.00 | * | | | (15,811 | ) |
| | | | | | | |
Net Assets | | 100.00 | | | $ | 354,940,789 | |
| | | | | | | |
| * | Rounds to less than 0.01%. |
See Notes to Financial Statements.
29
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Value and Restructuring Fund
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS – 95.57% | | |
| | CONSUMER DISCRETIONARY — 10.36% |
| 2,625,000 | | Black & Decker Corp. | | $ | 218,662,500 |
| 2,850,000 | | CBS Corp., Class B | | | 89,775,000 |
| 3,500,000 | | Centex Corp. | | | 92,995,000 |
| 1,800,000 | | EchoStar Communications, Inc.(a) | | | 84,258,000 |
| 1,000,000 | | Harman International Industries, Inc. | | | 86,520,000 |
| 1,350,000 | | J.C. Penney Co., Inc. | | | 85,549,500 |
| 3,200,000 | | Leggett & Platt, Inc. | | | 61,312,000 |
| 3,000,000 | | Newell Rubbermaid, Inc. | | | 86,460,000 |
| 3,300,000 | | TJX Cos., Inc. | | | 95,931,000 |
| 2,700,000 | | Zale Corp.(a) | | | 62,478,000 |
| | | | | |
| | | | | 963,941,000 |
| | | | | |
| | CONSUMER STAPLES — 3.94% |
| 2,550,000 | | Avon Products, Inc. | | | 95,701,500 |
| 1,000,000 | | ConAgra Foods, Inc. | | | 26,130,000 |
| 2,500,000 | | Dean Foods Co. | | | 63,950,000 |
| 2,200,000 | | Loews Corp. – Carolina Group | | | 180,906,000 |
| | | | | |
| | | | | 366,687,500 |
| | | | | |
| | ENERGY — 19.49% |
| 2,400,000 | | Anadarko Petroleum Corp. | | | 129,000,000 |
| 2,900,000 | | ConocoPhillips | | | 254,533,000 |
| 4,600,000 | | CONSOL Energy, Inc. | | | 214,360,000 |
| 2,600,000 | | Devon Energy Corp. | | | 216,320,000 |
| 6,100,000 | | El Paso Corp. | | | 103,517,000 |
| 3,850,000 | | Hercules Offshore, Inc.(a) | | | 100,523,500 |
| 1,500,000 | | Murphy Oil Corp. | | | 104,835,000 |
| 2,150,000 | | Noble Energy, Inc. | | | 150,586,000 |
| 4,000,000 | | Petrobras ADR | | | 302,000,000 |
| 4,300,000 | | PetroHawk Energy Corp.(a) | | | 70,606,000 |
| 944,900 | | Pinnacle Gas Resources, Inc.(a)(b) | | | 4,422,132 |
| 2,900,000 | | Rossetta Resources, Inc.(a)(b) | | | 53,186,000 |
| 2,000,000 | | Spectra Energy Corp. | | | 48,960,000 |
| 2,500,000 | | W&T Offshore, Inc. | | | 60,950,000 |
| | | | | |
| | | | | 1,813,798,632 |
| | | | | |
| | FINANCIAL — 21.53% |
| 2,800,000 | | Ace Ltd. | | | 169,596,000 |
| 3,300,000 | | AerCap Holdings NV ADR(a) | | | 82,137,000 |
| 1,400,000 | | Ambac Financial Group, Inc. | | | 88,074,000 |
| 3,300,000 | | Apollo Investment Corp.(c) | | | 68,640,000 |
| 1,500,000 | | Capital One Financial Corp. | | | 99,645,000 |
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | |
| | FINANCIAL — (continued) |
| 2,711,260 | | CastlePoint Holdings Ltd. | | $ | 31,179,490 |
| 2,200,000 | | CIT Group, Inc. | | | 88,440,000 |
| 2,600,000 | | Citigroup, Inc. | | | 121,342,005 |
| 1,050,000 | | Discover Financial Services | | | 21,840,000 |
| 1,300,000 | | Freddie Mac | | | 76,713,000 |
| 1,800,000 | | Genworth Financial, Inc. | | | 55,314,000 |
| 4,100,000 | | Invesco PLC ADR | | | 111,930,000 |
| 6,188,900 | | JHFS Participacoes S.A. ADR(a)(b) | | | 32,861,821 |
| 2,350,000 | | JP Morgan Chase & Co. | | | 107,677,000 |
| 2,050,000 | | Lehman Brothers Holdings, Inc. | | | 126,546,500 |
| 2,850,000 | | Loews Corp. | | | 137,797,500 |
| 2,961,200 | | MCG Capital Corp. | | | 42,611,668 |
| 1,950,000 | | MetLife, Inc. | | | 135,973,500 |
| 2,350,000 | | Morgan Stanley | | | 148,050,000 |
| 2,300,000 | | People’s United Financial, Inc. | | | 39,744,000 |
| 1,450,000 | | PNC Financial Services Group, Inc. | | | 98,745,000 |
| 4,265,364 | | Primus Guaranty Ltd.(a) | | | 44,871,629 |
| 2,100,000 | | Washington Mutual, Inc. | | | 74,151,000 |
| | | | | |
| | | | | 2,003,880,113 |
| | | | | |
| | HEALTH CARE — 3.14% |
| 1,900,000 | | AmerisourceBergen Corp. | | | 86,127,000 |
| 2,031,818 | | Baxter International, Inc. | | | 114,350,717 |
| 2,000,000 | | Bristol-Myers Squibb Co. | | | 57,640,000 |
| 825,000 | | Covidien Ltd. | | | 34,237,493 |
| | | | | |
| | | | | 292,355,210 |
| | | | | |
| | INDUSTRIALS — 13.44% |
| 708,544 | | Aecom Technology Corp.(a) | | | 24,749,442 |
| 2,900,000 | | AGCO Corp.(a) | | | 147,233,000 |
| 1,050,181 | | Arlington Tankers | | | 25,865,958 |
| 2,200,000 | | Copa Holdings S.A., Class A | | | 88,110,000 |
| 2,750,000 | | Empresa Brasileira de Aeronautica S.A. ADR | | | 120,780,000 |
| 3,650,000 | | Gol Linhas Aereas Inteligentes S.A. ADR | | | 87,600,000 |
| 1,000,000 | | Omega Navigation Enterprises, Inc., Class A ADR | | | 19,930,000 |
| 1,100,000 | | Rockwell Automation, Inc. | | | 76,461,000 |
| 3,300,000 | | RSC Holdings, Inc.(a) | | | 54,120,000 |
| 2,000,000 | | Ryder Systems, Inc. | | | 98,000,000 |
| 825,000 | | Tyco International Ltd. | | | 36,580,492 |
See Notes to Financial Statements.
30
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Value and Restructuring Fund — (continued)
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | |
| | INDUSTRIALS — (continued) |
| 1,750,000 | | Union Pacific Corp. | | $ | 197,855,000 |
| 4,250,000 | | United Rentals, Inc.(a) | | | 136,722,500 |
| 1,700,000 | | United Technologies Corp. | | | 136,816,000 |
| | | | | |
| | | | | 1,250,823,392 |
| | | | | |
| | INFORMATION TECHNOLOGY — 6.16% |
| 4,300,000 | | Harris Corp. | | | 248,497,000 |
| 975,000 | | International Business Machines Corp. | | | 114,855,000 |
| 3,850,000 | | Nokia Oyj ADR | | | 146,030,500 |
| 1,200,000 | | Plantronics, Inc. | | | 34,260,000 |
| 825,000 | | Tyco Electronics Ltd. | | | 29,229,744 |
| | | | | |
| | | | | 572,872,244 |
| | | | | |
| | MATERIALS — 11.42% |
| 3,650,000 | | Alpha Natural Resources, Inc.(a) | | | 84,789,500 |
| 4,050,000 | | Celanese Corp., Class A | | | 157,869,000 |
| 1,300,000 | | Eagle Materials, Inc. | | | 46,462,000 |
| 1,625,000 | | Foundation Coal Holdings, Inc. | | | 63,700,000 |
| 1,000,000 | | Freeport-McMoRan Copper & Gold, Inc. ADR | | | 104,890,000 |
| 1,485,000 | | Horsehead Holding Corp.(a)(b) | | | 33,293,700 |
| 1,461,198 | | International Coal Group, Inc.(a) | | | 6,487,719 |
| 1,550,000 | | PPG Industries, Inc. | | | 117,102,500 |
| 1,700,000 | | Schnitzer Steel Industries, Inc. | | | 124,593,000 |
| 4,200,000 | �� | Smurfit-Stone Container Corp.(a) | | | 49,056,000 |
| 1,800,000 | | Southern Copper Corp. | | | 222,894,000 |
| 2,250,000 | | Sterlite Industries (India) Ltd. ADS(a) | | | 41,625,000 |
| 1,084,319 | | Tronox, Inc. | | | 10,084,167 |
| | | | | |
| | | | | 1,062,846,586 |
| | | | | |
| | REAL ESTATE — 1.87% |
| 4,120,000 | | Diamondrock Hospitality Co.(b) | | | 71,729,200 |
| 1,000,000 | | FBR Capital Markets Corp.(a)(b) | | | 12,880,000 |
| 2,450,000 | | Host Marriot Corp. | | | 54,978,000 |
| 3,000,000 | | Peoples Choice Financial Corp.(a)(b)(d)(e) | | | 0 |
| 489,579 | | Ventas, Inc. | | | 20,268,570 |
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | |
| | REAL ESTATE — (continued) |
| 2,140,500 | | Vintage Wine Trust, Inc.(b) | | $ | 13,913,250 |
| | | | | |
| | | | | 173,769,020 |
| | | | | |
| | TELECOMMUNICATION SERVICES — 4.22% |
| 5,225,000 | | America Movil S.A. de C.V., Series L ADR(f) | | | 334,400,000 |
| 1,842,000 | | Datapath, Inc.(a)(b) | | | 9,210,000 |
| 3,500,000 | | Windstream Corp. | | | 49,420,000 |
| | | | | |
| | | | | 393,030,000 |
| | | | | |
| | TOTAL COMMON STOCKS
(Cost $5,752,339,067) | | | 8,894,003,697 |
| | | | | |
| FOREIGN COMMON STOCKS — 3.63% | | |
| | BRAZIL — 0.03% |
| 500,000 | | JHSF Participacoes S.A.(a) | | | 2,665,030 |
| | | | | |
| | GERMANY — 0.87% |
| 1,700,000 | | Lanxess AG | | | 80,619,189 |
| | | | | |
| | ITALY — 0.60% |
| 5,000,000 | | Enel S.p.A. | | | 56,422,485 |
| | | | | |
| | MEXICO — 0.85% |
| 11,000,000 | | Grupo Mexico S.A.B. de C.V., Series B | | | 78,949,293 |
| | | | | |
| | SWITZERLAND — 1.28% |
| 1,350,000 | | Petroplus Holdings AG(a) | | | 119,351,404 |
| | | | | |
| | TOTAL FOREIGN COMMON STOCKS
(Cost $238,048,710) | | | 338,007,401 |
| | | | | |
| CONVERTIBLE PREFERRED STOCKS — 0.27% |
| | MATERIALS — 0.27% |
| 500,000 | | Celanese Corp., Preferred Exchange, 4.25% | | | 25,070,000 |
| | | | | |
| | TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $11,789,117) | | | 25,070,000 |
| | | | | |
See Notes to Financial Statements.
31
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Value and Restructuring Fund — (continued)
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
| REPURCHASE AGREEMENT — 0.74% | | |
| $ | 68,863,000 | | Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 05/15/17, market value $70,242,188 (repurchase proceeds $68,883,946) | | $ | 68,863,000 |
| | | | | | |
| | | TOTAL REPURCHASE AGREEMENT
(Cost $68,863,000) | | | 68,863,000 |
| | | | | | |
| | | | | | | |
TOTAL INVESTMENTS
(Cost $6,071,039,894)(g) | | 100.21 | % | | $ | 9,325,944,098 | |
OTHER LIABILITIES IN EXCESS OF ASSETS | | (0.21 | ) | | | (19,894,286 | ) |
| | | | | | | |
NET ASSETS | | 100.00 | % | | $ | 9,306,049,812 | |
| | | | | | | |
At September 30, 2007 the Fund had entered into the following written option contract:
| | | | | | |
| Contracts | | | | Value | |
| | | | | | |
| CALL OPTIONS WRITTEN: | | | |
| (5,400) | | America Movil S.A. de C.V., Expires 11/17/07 strike price 60 (Premiums received $2,113,212) | | $ | (3,186,000 | ) |
| | | | | | |
| (a) | Non-income producing security. |
| (b) | Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2007, these securities, which are not illiquid, amounted to $231,496,103, which represents 2.49% of net assets. |
| (c) | Closed-end Management Investment Company. |
| (d) | Security has no value. |
| (e) | Represents fair value as determined in good faith under procedures approved by the Board of Directors. |
| (f) | All or a portion of this security is pledged as collateral for written option contracts. |
| (g) | Cost for federal income tax purposes is $6,071,039,894. |
ADR—American Depository Receipt
ADS—American Depository Shares
Ltd.—Limited
PLC—Public Limited Company
For the six months ended September 30, 2007, transactions in written option contracts were as follows:
| | | | | | | |
| | | Number of
Contracts | | | Premium
Received | |
Options outstanding at March 31, 2007 | | (23,000 | ) | | $ | 6,678,258 | |
Options written | | (22,400 | ) | | | 9,630,069 | |
Options terminated in closing purchase transactions | | 28,183 | | | | (9,791,478 | ) |
Options exercised | | 6,817 | | | | (3,909,273 | ) |
Options expired | | 5,000 | | | | (494,364 | ) |
| | | | | | | |
Options outstanding at September 30, 2007 | | (5,400 | ) | | $ | 2,113,212 | |
| | | | | | | |
See Notes to Financial Statements.
32
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Value and Restructuring Fund — (continued)
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | | | |
Sector Diversification | | % of
Net
Assets | | | Value | |
Financial | | 21.56 | | | $ | 2,006,545,143 | |
Energy | | 20.77 | | | | 1,933,150,036 | |
Industrials | | 14.31 | | | | 1,331,442,581 | |
Materials | | 12.54 | | | | 1,166,865,879 | |
Consumer Discretionary | | 10.36 | | | | 963,941,000 | |
Information Technology | | 6.16 | | | | 572,872,244 | |
Consumer Staples | | 4.54 | | | | 423,109,985 | |
Telecommunication Services | | 4.22 | | | | 393,030,000 | |
Health Care | | 3.14 | | | | 292,355,210 | |
Real Estate | | 1.87 | | | | 173,769,020 | |
Repurchase Agreement | | 0.74 | | | | 68,863,000 | |
| | | | | | | |
Total Investments | | 100.21 | | | $ | 9,325,944,098 | |
Other Liabilities in Excess of Assets | | (0.21 | ) | | | (19,894,286 | ) |
| | | | | | | |
Net Assets | | 100.00 | | | $ | 9,306,049,812 | |
| | | | | | | |
See Notes to Financial Statements.
33
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Emerging Markets Fund
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — 91.84% | | |
| | ARGENTINA — 1.66% |
| 931,800 | | Telecom Argentina SA, ADR(a) | | $ | 22,875,690 |
| | | | | |
| | BRAZIL — 7.46% | | | |
| 862,800 | | Companhia Vale do Rio Doce SA | | | 29,160,098 |
| 516,832 | | Diagnosticos da America SA | | | 11,842,304 |
| 210,000 | | Gafisa SA, ADR(a) | | | 7,085,400 |
| 398,800 | | Gol Linhas Aereas Inteligentes SA, ADR | | | 9,571,200 |
| 1,467,400 | | Industrias Romi SA | | | 16,915,528 |
| 215,400 | | Uniao de Bancos Brasileiros SA, GDR | | | 28,335,870 |
| | | | | |
| | | | | 102,910,400 |
| | | | | |
| | CHILE — 1.56% |
| 424,200 | | Banco Santander Chile SA, ADR | | | 21,451,794 |
| | | | | |
| | CHINA — 15.08% |
| 11,637,000 | | Bank of Communications Ltd., Class H (Hong Kong) | | | 14,033,245 |
| 27,271,300 | | Chaoda Modern Agriculture Holdings Ltd. (Hong Kong) | | | 22,010,247 |
| 42,614,000 | | China Construction Bank Corp, Class H (Hong Kong) | | | 38,860,146 |
| 620,797 | | China Mobile Ltd., ADR (Hong Kong) | | | 50,930,186 |
| 20,961,000 | | China Petroleum & Chemical Corp., Class H (Hong Kong) | | | 25,729,037 |
| 18,267,722 | | Far East Consortium International Ltd.
(Hong Kong) | | | 8,203,952 |
| 2,647,000 | | Industrial & Commercial Bank of China (Hong Kong) | | | 1,845,595 |
| 15,539,400 | | People’s Food Holdings Ltd. | | | 14,967,910 |
| 131,700 | | PetroChina Co., Ltd., ADR | | | 24,378,987 |
| 8,447,000 | | Texwinca Holdings Ltd. (Hong Kong) | | | 7,010,204 |
| | | | | |
| | | | | 207,969,509 |
| | | | | |
| | COLUMBIA — 0.99% |
| 392,800 | | BanColombia SA, ADR | | | 13,610,520 |
| | | | | |
| | INDIA — 4.43% | | | |
| 339,350 | | ICICI Bank Ltd., ADR | | | 17,890,532 |
| 222,900 | | State Bank of India, GDR(b) | | | 24,964,800 |
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | |
| | INDIA — (continued) |
| 501,781 | | Suzlon Energy Ltd. | | $ | 18,207,245 |
| | | | | |
| | | | | 61,062,577 |
| | | | | |
| | INDONESIA — 2.45% |
| 14,051,700 | | PT Indocement Tunggal Prakarsa Tbk | | | 9,365,883 |
| 20,227,700 | | PT Telekomunikasi Indonesia Tbk, Series B | | | 24,461,478 |
| | | | | |
| | | | | 33,827,361 |
| | | | | |
| | MALAYSIA — 4.88% |
| 9,413,000 | | Genting Berhad | | | 22,206,453 |
| 6,454,950 | | Public Bank Berhad, Foreign Market Shares | | | 19,862,702 |
| 4,404,300 | | Telekom Malaysia Berhad | | | 12,718,507 |
| 4,517,200 | | Tenaga Nasional Berhad | | | 12,508,446 |
| | | | | |
| | | | | 67,296,108 |
| | | | | |
| | MEXICO — 7.58% |
| 324,700 | | America Movil SAB de C.V., Series L, ADR | | | 20,780,800 |
| 366,144 | | Cemex SAB de C.V., ADR | | | 10,955,028 |
| 262,600 | | Grupo Aeroportuario del Pacifico SA de C.V., ADR | | | 14,337,960 |
| 718,155 | | Grupo Elektra SA de C.V. | | | 14,648,854 |
| 2,124,100 | | Grupo Televisa SA | | | 10,205,483 |
| 331,580 | | Telefonos de Mexico SAB de C.V., Series L, ADR | | | 10,899,035 |
| 2,903,429 | | Urbi Desarrollos Urbanos SA de C.V.(a) | | | 10,432,531 |
| 3,330,082 | | Wal-Mart de Mexico SAB de C.V., Series V | | | 12,209,144 |
| | | | | |
| | | | | 104,468,835 |
| | | | | |
| | RUSSIA — 6.50% |
| 297,500 | | OAO Gazprom, ADR | | | 13,119,750 |
| 210,200 | | Lukoil Co., ADR | | | 17,467,620 |
| 82,700 | | MMC Norilsk Nickel, ADR | | | 22,494,400 |
| 315,800 | | Mobile TeleSystems, OJSC, ADR | | | 21,888,098 |
| 464,000 | | RBC Information Systems, ADR(a) | | | 14,606,720 |
| | | | | |
| | | | | 89,576,588 |
| | | | | |
| | SOUTH AFRICA — 6.43% |
| 2,911,042 | | African Bank Investments Ltd. | | | 13,250,085 |
| 704,600 | | Gold Fields Ltd., ADR | | | 12,746,214 |
See Notes to Financial Statements.
34
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Emerging Markets Fund — (continued)
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | |
| | SOUTH AFRICA — (continued) |
| 43,478 | | Mondi Ltd. | | $ | 431,669 |
| 1,522,224 | | MTN Group Ltd. | | | 23,078,233 |
| 405,500 | | Sasol Ltd. | | | 17,411,073 |
| 861,916 | | Telkom South Africa Ltd. | | | 21,712,749 |
| | | | | |
| | | | | 88,630,023 |
| | | | | |
| | SOUTH KOREA — 16.17% |
| 337,802 | | Hana Financial Group, Inc. | | | 15,890,702 |
| 137,500 | | Kookmin Bank | | | 11,340,966 |
| 650,638 | | KT Corp., ADR | | | 16,298,482 |
| 328,470 | | LS Cable Ltd. | | | 40,743,999 |
| 187,914 | | GS Home Shopping, Inc. | | | 16,563,883 |
| 14,231 | | Lotte Chilsung Beverage Co., Ltd. | | | 21,659,083 |
| 166,329 | | NCSoft Corp.(a) | | | 14,726,302 |
| 119,757 | | Pacific Corp. | | | 24,927,139 |
| 67,879 | | Samsung Electronics Co., Ltd. | | | 42,474,502 |
| 614,685 | | SK Telecom Co., Ltd., ADR | | | 18,256,145 |
| | | | | |
| | | | | 222,881,203 |
| | | | | |
| | TAIWAN — 9.73% |
| 899,690 | | Chunghwa Telecom Co., Ltd., ADR | | | 16,626,271 |
| 3,737,365 | | HON HAI Precision Industry Co., Ltd. | | | 28,151,280 |
| 6,673,453 | | President Chain Store Corp. | | | 18,769,871 |
| 12,369,406 | | Synnex Technology International Corp. | | | 34,785,278 |
| 234,872 | | Taiwan Semiconductor Manufacturing Co., Ltd. | | | 452,745 |
| 1,218,324 | | Taiwan Semiconductor Manufacturing Co., Ltd., ADR | | | 12,329,439 |
| 12,814,552 | | Wistron Corp. | | | 23,098,927 |
| | | | | |
| | | | | 134,213,811 |
| | | | | |
| | THAILAND — 1.09% |
| 5,867,900 | | Advanced Info Service Public Co., Ltd. (Foreign Shares) | | | 15,042,902 |
| | | | | |
| | TURKEY — 2.37% |
| 1,090,262 | | Akbank T.A.S., ADR(b) | | | 16,561,407 |
| 1,112,582 | | Arcelik A.S. | | | 9,018,180 |
| 2,081,704 | | Turkiye Vakiflar Bankasi T.A.O., Class D | | | 7,082,093 |
| | | | | |
| | | | | 32,661,680 |
| | | | | |
| | | | | | |
| Shares | | | | Value |
| | | | | | |
| COMMON STOCKS — (continued) | | |
| | | UNITED KINGDOM — 3.46% |
| | 395,650 | | Anglo American PLC (South Africa Shares) | | $ | 26,260,213 |
| | 712,500 | | Kazakhmys PLC | | | 20,394,325 |
| | 108,695 | | Mondi PLC | | | 1,025,529 |
| | | | | | |
| | | | | | 47,680,067 |
| | | | | | |
| | | TOTAL COMMON STOCKS
(Cost $714,270,319) | | | 1,266,159,068 |
| | | | | | |
| PREFERRED STOCKS — 4.30% | | |
| | | BRAZIL — 3.59% |
| | 947,262 | | Companhia Energetica de Minas Gerais | | | 20,154,511 |
| | 906,800 | | Petroleo Brasileiro SA | | | 29,286,721 |
| | | | | | |
| | | | | | 49,441,232 |
| | | | | | |
| | | SOUTH KOREA — 0.71% |
| | 246,300 | | Hyundai Motor Co., Ltd. | | | 9,860,492 |
| | | | | | |
| | | | | | 9,860,492 |
| | | | | | |
| | | TOTAL PREFERRED STOCKS
(Cost $23,369,005) | | | 59,301,724 |
| | | | | | |
| REGISTERED INVESTMENT COMPANY — 0.95% |
| | 240,000 | | India Fund, Inc. | | | 13,053,720 |
| | | | | | |
| | | TOTAL REGISTERED INVESTMENT COMPANY (Cost $5,731,063) | | | 13,053,720 |
| | | | | | |
| | |
Principal
Amount | | | | |
| REPURCHASE AGREEMENT — 2.54% | | |
| $ | 35,043,000 | | Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 05/15/17, market value $35,746,313 (repurchase proceeds $35,053,659) | | | 35,043,000 |
| | | | | | |
| | | TOTAL REPURCHASE AGREEMENT
(Cost $35,043,000) | | | 35,043,000 |
| | | | | | |
See Notes to Financial Statements.
35
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Emerging Markets Fund — (continued)
| | | | | | |
TOTAL INVESTMENTS
(Cost $778,413,387)(c) | | 99.63 | % | | $ | 1,373,557,512 |
OTHER ASSETS IN EXCESS OF LIABILITIES | | 0.37 | | | | 5,154,025 |
| | | | | | |
NET ASSETS | | 100.00 | % | | $ | 1,378,711,537 |
| | | | | | |
| (a) | Non-income producing security. |
| (b) | Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2007, these securities, which are not illiquid, amounted to $41,526,207, which represents 3.01% of net assets. |
| (c) | Cost for federal income tax purposes is $778,413,387. |
ADR—American Depository Receipt
GDR—Global Depository Receipt
Ltd.—Limited
PLC—Public Limited Company
The Summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | |
Sector Diversification | | % of
Net
Assets | | Value |
Telecommunication Services | | 19.99 | | $ | 275,568,577 |
Financial | | 18.36 | | | 253,184,409 |
Information Technology | | 11.32 | | | 156,018,473 |
Materials | | 9.63 | | | 132,833,358 |
Energy | | 9.24 | | | 127,393,188 |
Consumer Discretionary | | 8.82 | | | 121,638,201 |
Consumer Staples | | 8.31 | | | 114,543,394 |
Industrials | | 7.24 | | | 99,775,932 |
Repurchase Agreement | | 2.54 | | | 35,043,000 |
Utilities | | 2.37 | | | 32,662,956 |
Registered Investment Company | | 0.95 | | | 13,053,720 |
Health Care | | 0.86 | | | 11,842,304 |
| | | | | |
Total Investments | | 99.63 | | $ | 1,373,557,512 |
Other Assets in Excess of Liabilities | | 0.37 | | | 5,154,025 |
| | | | | |
Net Assets | | 100.00 | | $ | 1,378,711,537 |
| | | | | |
See Notes to Financial Statements.
36
Excelsior Funds Trust
Portfolio of Investments — September 30, 2007 (Unaudited)
International Equity Fund
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — 99.60% | | |
| | AUSTRALIA — 4.54% | | | |
| 18,300 | | CSL Ltd. | | $ | 1,736,354 |
| 15,957 | | Rio Tinto Ltd. | | | 1,524,925 |
| | | | | |
| | | | | 3,261,279 |
| | | | | |
| | BELGIUM — 1.63% | | | |
| 4,900 | | Umicore | | | 1,169,055 |
| | | | | |
| | CANADA — 2.16% | | | |
| 15,400 | | Canadian National Railway Co. | | | 878,806 |
| 17,000 | | Gildan Activewear, Inc.(a) | | | 673,232 |
| | | | | |
| | | | | 1,552,038 |
| | | | | |
| | CHINA — 5.17% | | | |
| 1,087,000 | | Chaoda Modern Agriculture Holdings Ltd. (Hong Kong) | | | 877,301 |
| 474,000 | | Dongfeng Motor Group Co. Ltd., Class H | | | 413,930 |
| 6,400 | | PetroChina Co. Ltd., ADR | | | 1,184,704 |
| 5,000 | | Sino-Ocean Land Holdings Ltd. (a) | | | 7,075 |
| 73,000 | | Sun Hung Kai Properties Ltd. (Hong Kong) | | | 1,228,058 |
| | | | | |
| | | | | 3,711,068 |
| | | | | |
| | FINLAND — 4.78% | | | |
| 28,500 | | Fortum Oyj | | | 1,045,588 |
| 41,700 | | Nokia Oyj | | | 1,582,246 |
| 35,800 | | Tietoenator Oyj | | | 803,012 |
| | | | | |
| | | | | 3,430,846 |
| | | | | |
| | FRANCE — 7.84% | | | |
| 23,300 | | AXA SA | | | 1,043,475 |
| 7,820 | | BNP Paribas | | | 855,788 |
| 13,600 | | Carrefour SA | | | 952,020 |
| 3,404 | | Compagnie Generale de Geophysique- Veritas(a) | | | 1,107,048 |
| 7,500 | | Peugeot SA | | | 620,125 |
| 12,916 | | Total SA | | | 1,046,625 |
| | | | | |
| | | | | 5,625,081 |
| | | | | |
| | GERMANY — 6.47% | | | |
| 18,500 | | Adidas AG | | | 1,212,854 |
| 15,700 | | Bayerische Motoren Werke AG | | | 1,010,833 |
| 35,200 | | Rhoen-Klinikum AG | | | 1,125,941 |
| 6,350 | | SGL Carbon AG(a) | | | 363,110 |
| 41,300 | | United Internet AG, Registered Shares | | | 928,478 |
| | | | | |
| | | | | 4,641,216 |
| | | | | |
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | |
| | GREECE — 1.19% | | | |
| 39,000 | | Greek Postal Savings Bank | | $ | 854,837 |
| | | | | |
| | INDONESIA — 1.38% | | | |
| 819,500 | | PT Telekomunikasi Indonesia Tbk, Series B | | | 991,026 |
| | | | | |
| | IRELAND — 1.29% | | | |
| 49,502 | | Bank of Ireland | | | 922,724 |
| | | | | |
| | ITALY — 2.51% | | | |
| 27,050 | | ENI S.p.A. | | | 998,896 |
| 30,665 | | Permasteelisa S.p.A. | | | 800,495 |
| | | | | |
| | | | | 1,799,391 |
| | | | | |
| | JAPAN — 21.30% | | | |
| 19,200 | | Canon, Inc. | | | 1,041,895 |
| 45,946 | | Chiyoda Corp. | | | 823,513 |
| 35,600 | | Don Quijote Co. Ltd. | | | 732,207 |
| 11,400 | | FANUC Ltd. | | | 1,157,311 |
| 18,700 | | FUJIFILM Holdings Corp. | | | 859,155 |
| 122,000 | | Fukuoka Financial Group, Inc. | | | 711,213 |
| 70,000 | | Itochu Corp. | | | 845,066 |
| 70 | | Japan Tobacco, Inc. | | | 383,898 |
| 3,500 | | Keyence Corp. | | | 774,588 |
| 11,200 | | Kyocera Corp. | | | 1,044,356 |
| 70,000 | | Mitsubishi UFJ Financial Group, Inc.(b) | | | 635,600 |
| 32,000 | | Nikon Corp. | | | 1,093,627 |
| 1,900 | | Nintendo Co., Ltd. | | | 980,978 |
| 500 | | NTT DoCoMo, Inc. | | | 710,721 |
| 11,800 | | Shin-Etsu Chemical Co. Ltd. | | | 811,834 |
| 104,000 | | Sumitomo Trust & Banking Co. Ltd. | | | 783,027 |
| 17,200 | | Takeda Pharmaceutical Co. Ltd. | | | 1,206,252 |
| 7,000 | | Yamada Denki Co. Ltd. | | | 689,386 |
| | | | | |
| | | | | 15,284,627 |
| | | | | |
| | MALAYSIA — 0.59% | | | |
| 152,100 | | Tenaga Nasional Berhad | | | 421,176 |
| | | | | |
| | MEXICO — 2.04% | | | |
| 13,400 | | America Movil SAB de C.V., Series L ADR | | | 857,600 |
| 20,292 | | Cemex SAB de C.V. ADR | | | 607,137 |
| | | | | |
| | | | | 1,464,737 |
| | | | | |
| | NETHERLANDS — 0.73% | | | |
| 9,634 | | Randstad Holding NV | | | 521,509 |
| | | | | |
See Notes to Financial Statements.
37
Excelsior Funds Trust
Portfolio of Investments — September 30, 2007 (Unaudited)
International Equity Fund — (continued)
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | |
| | NORWAY — 2.81% | | | |
| 48,400 | | Tandberg ASA | | $ | 1,161,848 |
| 42,700 | | Telenor ASA(a) | | | 852,488 |
| | | | | |
| | | | | 2,014,336 |
| | | | | |
| | SINGAPORE — 1.58% | | | |
| 78,200 | | DBS Group Holdings Ltd. | | | 1,133,034 |
| | | | | |
| | SPAIN — 3.31% | | | |
| 57,200 | | Banco Santander SA | | | 1,114,016 |
| 45,208 | | Telefonica SA | | | 1,263,031 |
| | | | | |
| | | | | 2,377,047 |
| | | | | |
| | SWEDEN — 2.19% | | | |
| 10,600 | | SSAB Svenskt Stal AB, Series A | | | 390,667 |
| 63,600 | | Svenska Cellulosa AB, B Shares | | | 1,183,094 |
| | | | | |
| | | | | 1,573,761 |
| | | | | |
| | SWITZERLAND — 5.56% | | | |
| 7,000 | | Credit Suisse Group, Registered Shares | | | 465,248 |
| 28,200 | | Micronas Semiconductor Holdings AG, Registered Shares(a) | | | 370,726 |
| 889 | | Rieter Holdings AG, Registered Shares | | | 482,274 |
| 5,300 | | Roche Holding AG, Genusschein Shares | | | 959,682 |
| 8,800 | | Synthes, Inc. | | | 984,743 |
| 13,600 | | UBS AG, Registered Shares | | | 730,696 |
| | | | | |
| | | | | 3,993,369 |
| | | | | |
| | TAIWAN — 2.66% | | | |
| 161,291 | | HON HAI Precision Industry Co., Ltd. | | | 1,214,905 |
| 68,482 | | Taiwan Semiconductor Manufacturing Co., Ltd., ADR | | | 693,038 |
| | | | | |
| | | | | 1,907,943 |
| | | | | |
| | THAILAND — 1.14% | | | |
| 340,300 | | Kasikornbank Public Co. Ltd. (Foreign Shares) | | | 817,520 |
| | | | | |
| | TURKEY — 0.40% | | | |
| 35,015 | | Arcelik A.S. | | | 283,819 |
| | | | | |
| | UNITED KINGDOM — 16.33% | | | |
| 72,800 | | BG Group | | | 1,257,713 |
| 21,900 | | BHP Billiton PLC | | | 783,457 |
| 87,300 | | Cadbury Schweppes PLC | | | 1,015,314 |
| | | | | | |
| Shares | | | | Value |
| | | | | | |
| COMMON STOCKS — (continued) | | |
| | | UNITED KINGDOM — (continued) |
| | 35,516 | | GlaxoSmithKline PLC | | $ | 941,994 |
| | 52,800 | | HSBC Holdings PLC | | | 975,084 |
| | 72,300 | | Paragon Group Companies PLC | | | 443,232 |
| | 18,445 | | Reckitt Benckiser PLC | | | 1,081,343 |
| | 85,845 | | Reed Elsevier PLC | | | 1,085,234 |
| | 79,351 | | Royal Bank of Scotland Group PLC | | | 856,184 |
| | 49,100 | | Sage Group PLC | | | 249,922 |
| | 128,031 | | Serco Group PLC | | | 1,083,159 |
| | 35,500 | | Shire PLC | | | 870,144 |
| | 186,330 | | WM Morrison Supermarkets PLC | | | 1,075,453 |
| | | | | | |
| | | | | | 11,718,233 |
| | | | | | |
| | | TOTAL COMMON STOCKS
(Cost $50,657,918) | | | 71,469,672 |
| | | | | | |
| | |
Principal
Amount | | | | |
| | REPURCHASE AGREEMENT — 0.30% | | | |
| $ | 211,000 | | Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 08/15/22, market value $220,719 (repurchase proceeds $211,064) | | | 211,000 |
| | | | | | |
| | | TOTAL REPURCHASE AGREEMENT
(Cost $211,000) | | | 211,000 |
| | | | | | |
| | | | | | |
TOTAL INVESTMENTS
(Cost $50,868,918)(c) | | 99.90 | % | | $ | 71,680,672 |
OTHER ASSETS IN EXCESS OF LIABILITIES | | 0.10 | | | | 72,023 |
| | | | | | |
NET ASSETS | | 100.00 | % | | $ | 71,752,695 |
| | | | | | |
| (a) | Non-income producing security. |
| (b) | Represent fair value as determined in good faith under procedures approved by the Board of Trustees. |
| (c) | Cost for federal income tax purposes is $50,868,918. |
ADR—American Depository Receipt
Ltd.—Limited
PLC—Public Limited Company
See Notes to Financial Statements.
38
Excelsior Funds Trust
Portfolio of Investments — September 30, 2007 (Unaudited)
International Equity Fund — (continued)
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | |
Sector Diversification | | % of
Net
Assets | | Value |
Financial | | 18.92 | | $ | 13,576,811 |
Information Technology | | 16.31 | | | 11,705,147 |
Consumer Discretionary | | 11.56 | | | 8,297,521 |
Health Care | | 10.91 | | | 7,825,110 |
Industrials | | 9.02 | | | 6,472,969 |
Materials | | 9.02 | | | 6,470,169 |
Energy | | 7.80 | | | 5,594,986 |
Consumer Staples | | 7.50 | | | 5,385,329 |
Telecommunication Services | | 6.52 | | | 4,674,866 |
Utilities | | 2.04 | | | 1,466,764 |
Repurchase Agreement | | 0.30 | | | 211,000 |
| | | | | |
Total Investments | | 99.90 | | $ | 71,680,672 |
Other Assets in Excess of Liabilities | | 0.10 | | | 72,023 |
| | | | | |
Net Assets | | 100.00 | | $ | 71,752,695 |
| | | | | |
See Notes to Financial Statements.
39
Excelsior Funds
Statements of Assets and Liabilities
September 30, 2007 (Unaudited)
| | | | | | | | |
| | |
| | | Money
Fund | | | Core
Bond
Fund | |
ASSETS | | | | | | | | |
Investments, at identified cost | | $ | 1,049,656,627 | | | $ | 542,888,502 | |
Repurchase agreements, at identified cost | | | 123,000,000 | | | | 3,407,000 | |
| | | | | | | | |
Total investments, at identified cost | | $ | 1,172,656,627 | | | $ | 546,295,502 | |
| | | | | | | | |
Investments, at value (including repurchase agreements) | | $ | 1,172,656,627 | | | $ | 545,461,548 | |
Cash | | | — | | | | — | |
Unrealized appreciation on swap contracts | | | — | | | | 4,451 | |
Receivable for: | | | | | | | | |
Investments sold | | | — | | | | 6,879,231 | |
Fund shares sold | | | 99,935 | | | | 364,686 | |
Dividends | | | 17,734 | | | | — | |
Interest | | | 1,649,427 | | | | 4,200,974 | |
Futures variation margin | | | — | | | | 63,984 | |
Expense reimbursement due from Investment Advisor and/or its Affiliates | | | 75,820 | | | | 91,636 | |
Foreign tax reclaims | | | — | | | | — | |
Prepaid expenses | | | 69,664 | | | | 31,199 | |
| | | | | | | | |
Total assets | | $ | 1,174,569,207 | | | $ | 557,097,709 | |
| | | | | | | | |
LIABILITIES | | | | | | | | |
Payable to custodian bank | | | — | | | | 773,896 | |
Payable for: | | | | | | | | |
Investments purchased | | | — | | | | 5,832,662 | |
Fund shares repurchased | | | 4,365 | | | | 383,097 | |
Distributions | | | 3,516,777 | | | | 1,409,074 | |
Investment advisory fee | | | 239,619 | | | | 296,242 | |
Administration fee | | | 92,735 | | | | 41,689 | |
Transfer agent fee | | | 7,425 | | | | 34,483 | |
Pricing and bookkeeping fees | | | 6,642 | | | | 8,256 | |
Trustees’/Directors’ fees | | | 431 | | | | — | |
Audit fee | | | 10,793 | | | | 27,874 | |
Custody fee | | | 58,542 | | | | 16,073 | |
Legal fee | | | 99,874 | | | | 38,010 | |
Shareholder servicing fee | | | 210,940 | | | | 99,490 | |
Distribution and service fees | | | — | | | | — | * |
Other liabilities | | | 132,535 | | | | 106,147 | |
| | | | | | | | |
Total liabilities | | $ | 4,380,678 | | | $ | 9,066,993 | |
| | | | | | | | |
NET ASSETS | | $ | 1,170,188,529 | | | $ | 548,030,716 | |
| | | | | | | | |
NET ASSETS CONSIST OF | | | | | | | | |
Par value | | $ | 1,170,434 | | | $ | 61,166 | |
Paid-in capital in excess of par value | | | 1,169,058,550 | | | | 549,903,000 | |
Undistributed (overdistributed) net investment income | | | (13 | ) | | | 194,985 | |
Accumulated net realized gain (loss) | | | (40,442 | ) | | | (1,359,028 | ) |
Net unrealized appreciation (depreciation) on: | | | | | | | | |
Investments | | | — | | | | (833,954 | ) |
Foreign currency translations | | | — | | | | — | |
Futures contracts | | | — | | | | 60,096 | |
Swap contracts | | | — | | | | 4,451 | |
| | | | | | | | |
NET ASSETS | | $ | 1,170,188,529 | | | $ | 548,030,716 | |
| | | | | | | | |
| * | | Rounds to less than $1. |
See Notes to Financial Statements.
40
| | | | | | | | | |
| | |
High
Yield
Fund | | | Equity
Opportunities
Fund | | Large Cap
Growth
Fund | |
| | | | | | | | | |
| $ | 86,688,985 | | | $ | 311,850,841 | | $ | 662,920,678 | |
| | 3,085,000 | | | | 6,231,000 | | | 13,397,000 | |
| | | | | | | | | | |
| $ | 89,773,985 | | | $ | 318,081,841 | | $ | 676,317,678 | |
| | | | | | | | | | |
| $ | 90,284,062 | | | $ | 405,216,355 | | $ | 882,003,927 | |
| | 841 | | | | — | | | 1,201,247 | |
| | — | | | | — | | | — | |
| | | | | | | | | |
| | — | | | | 5,399,189 | | | 2,982,911 | |
| | 3,627 | | | | 135,622 | | | 1,129,424 | |
| | — | | | | 601,266 | | | 167,449 | |
| | 2,006,826 | | | | 1,899 | | | 4,075 | |
| | — | | | | — | | | — | |
| | 68,726 | | | | 56,482 | | | — | |
| | — | | | | 12,302 | | | 80,213 | |
| | 5,647 | | | | 21,818 | | | 37,214 | |
| | | | | | | | | | |
| $ | 92,369,729 | | | $ | 411,444,933 | | $ | 887,606,460 | |
| | | | | | | | | | |
| | | | | | | | | |
| | — | | | | 1,037 | | | — | |
| | | | | | | | | |
| | 1,940,000 | | | | 1,063,603 | | | 10,641,468 | |
| | 28,675 | | | | 166,867 | | | 255,797 | |
| | 437,961 | | | | — | | | — | |
| | 57,921 | | | | 241,010 | | | 516,604 | |
| | 5,194 | | | | 28,600 | | | 65,079 | |
| | 3,801 | | | | 25,462 | | | 12,104 | |
| | 3,412 | | | | 4,390 | | | 6,101 | |
| | 54 | | | | — | | | — | |
| | 25,182 | | | | 15,171 | | | 14,040 | |
| | 12,920 | | | | 8,066 | | | 24,416 | |
| | 285,741 | | | | 17,782 | | | 42,006 | |
| | 23,519 | | | | 68,500 | | | 198,333 | |
| | — | | | | 1 | | | 4 | |
| | 7,930 | | | | 68,072 | | | 25,269 | |
| | | | | | | | | | |
| $ | 2,832,310 | | | $ | 1,708,561 | | $ | 11,801,221 | |
| | | | | | | | | | |
| $ | 89,537,419 | | | $ | 409,736,372 | | $ | 875,805,239 | |
| | | | | | | | | | |
| | | | | | | | | |
| $ | 193 | | | $ | 259 | | $ | 72,052 | |
| | 154,830,582 | | | | 316,753,335 | | | 765,610,429 | |
| | (686,734 | ) | | | 144,193 | | | (2,969,869 | ) |
| | (65,116,699 | ) | | | 5,697,874 | | | (92,593,622 | ) |
| | | | | | | | | |
| | 510,077 | | | | 87,134,514 | | | 205,686,249 | |
| | — | | | | 6,197 | | | — | |
| | — | | | | — | | | — | |
| | — | | | | — | | | — | |
| | | | | | | | | | |
| $ | 89,537,419 | | | $ | 409,736,372 | | $ | 875,805,239 | |
| | | | | | | | | | |
See Notes to Financial Statements.
41
Excelsior Funds
Statements of Assets and Liabilities — (continued)
September 30, 2007 (Unaudited)
| | | | | | | |
| | |
| | | Money
Fund | | Core
Bond
Fund | |
Institutional Shares | | | | | | | |
Net assets | | $ | 595,286,144 | | $ | 218,946,712 | |
Shares outstanding | | | 595,288,155 | | | 24,432,425 | |
Net asset value and offering price per share | | $ | 1.00 | | $ | 8.96 | |
Shares | | | | | | | |
Net assets | | $ | 574,902,385 | | $ | 329,082,914 | |
Shares outstanding | | | 575,145,391 | | | 36,733,338 | |
Net asset value and offering price per share | | $ | 1.00 | | $ | 8.96 | |
Retirement Shares | | | | | | | |
Net assets | | | — | | $ | 1,090 | |
Shares outstanding | | | — | | | 122 | |
Net asset value and offering price per share | | | — | | $ | 8.96 | (a) |
Class A | | | | | | | |
Net assets | | | — | | | — | |
Shares outstanding | | | — | | | — | |
Net asset value per share (b) | | | — | | | — | |
Maximum sales charge | | | — | | | — | |
Maximum offering price per share (c) | | | — | | | — | |
Class C | | | | | | | |
Net assets | | | — | | | — | |
Shares outstanding | | | — | | | — | |
Net asset value and offering price per share (b) | | | — | | | — | |
| (a) | Net asset value per share rounds due to fractional shares outstanding. |
| (b) | Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. |
| (c) | On sales of $50,000 or more the offering price is reduced. |
See Notes to Financial Statements.
42
| | | | | | | | | |
| | |
High
Yield
Fund | | Equity
Opportunities
Fund | | | Large Cap
Growth
Fund | |
| | | | | | | | | |
| $ | 3,746,536 | | $ | 59,174,383 | | | $ | 25,876,593 | |
| | 809,273 | | | 3,736,977 | | | | 2,124,311 | |
| $ | 4.63 | | $ | 15.83 | | | $ | 12.18 | |
| | | | | | | | | |
| $ | 85,790,883 | | $ | 350,541,967 | | | $ | 849,897,194 | |
| | 18,518,456 | | | 22,152,657 | | | | 69,924,817 | |
| $ | 4.63 | | $ | 15.82 | | | $ | 12.15 | |
| | | | | | | | | |
| | — | | | — | | | $ | 11,500 | |
| | — | | | — | | | | 962 | |
| | — | | | — | | | $ | 11.95 | |
| | | | | | | | | |
| | — | | $ | 10,011 | | | $ | 9,976 | |
| | — | | | 633 | | | | 821 | |
| | — | | $ | 15.82 | | | $ | 12.15 | |
| | — | | | 5.75 | % | | | 5.75 | % |
| | — | | $ | 16.78 | | | $ | 12.89 | |
| | | | | | | | | |
| | — | | $ | 10,011 | | | $ | 9,976 | |
| | — | | | 633 | | | | 821 | |
| | — | | $ | 15.82 | | | $ | 12.15 | |
See Notes to Financial Statements.
43
Excelsior Funds
Statements of Assets and Liabilities — (continued)
September 30, 2007 (Unaudited)
| | | | | | | | | | | | | | |
| | | | |
| | | Mid Cap
Value and
Restructuring
Fund | | Value and
Restructuring
Fund | | | Emerging
Markets Fund | | International
Equity Fund | |
ASSETS | | | | | | | | | | | | | | |
Investments, at identified cost | | $ | 217,518,740 | | $ | 6,071,039,894 | | | $ | 778,413,387 | | $ | 50,868,918 | |
| | | | | | | | | | | | | | |
Investments, at value | | $ | 354,956,600 | | $ | 9,325,944,098 | | | $ | 1,373,557,512 | | $ | 71,680,672 | |
Cash | | | — | | | 1,294,794 | | | | 11,378 | | | 9,448 | |
Foreign currency (cost of $-, $-, $2,964,540 and $212,075, respectively) | | | — | | | — | | | | 2,990,442 | | | 212,988 | |
Receivable for: | | | | | | | | | | | | | | |
Investments sold | | | 80,737 | | | 18,443,910 | | | | — | | | 535,572 | |
Fund shares sold | | | 64,952 | | | 8,906,387 | | | | 966,323 | | | 9,500 | |
Dividends | | | 373,711 | | | 12,500,329 | | | | 4,346,097 | | | 162,072 | |
Interest | | | — | | | 20,946 | | | | 10,659 | | | 64 | |
Expense reimbursement due from Investment Advisor | | | 961 | | | — | | | | 18,679 | | | 17,266 | |
Foreign tax reclaims | | | — | | | 32,618 | | | | 2,842 | | | 38,806 | |
Prepaid expenses | | | 20,147 | | | 510,432 | | | | — | | | 4,046 | |
Other assets | | | — | | | — | | | | 71,544 | | | — | |
| | | | | | | | | | | | | | |
Total assets | | $ | 355,497,108 | | $ | 9,367,653,514 | | | $ | 1,381,975,476 | | $ | 72,670,434 | |
| | | | | | | | | | | | | | |
LIABILITIES | | | | | | | | | | | | | | |
Payable to custodian bank | | | 63,464 | | | — | | | | — | | | — | |
Written options at value (premiums of $-, $2,113,212, $- and $-, respectively) | | | — | | | 3,186,000 | | | | — | | | — | |
Payable for: | | | | | | | | | | | | | | |
Investments purchased | | | — | | | 43,470,158 | | | | 183,417 | | | 811,238 | |
Fund shares repurchased | | | 59,126 | | | 4,927,604 | | | | 500,633 | | | — | |
Investment advisory fee | | | 185,100 | | | 4,439,243 | | | | 1,315,612 | | | 58,279 | |
Administration fee | | | 25,245 | | | 751,022 | | | | 151,554 | | | 6,364 | |
Transfer agent fee | | | 11,742 | | | 336,408 | | | | 51,745 | | | — | |
Pricing and bookkeeping fees | | | 6,430 | | | 7,011 | | | | 7,056 | | | 3,777 | |
Trustees’/Directors’ fees | | | — | | | 55,084 | | | | 53 | | | 149 | |
Audit fee | | | 22,653 | | | — | | | | 5,457 | | | 19,752 | |
Custody fee | | | 15,249 | | | 99,688 | | | | 504,503 | | | 12,556 | |
Legal fee | | | 23,052 | | | 458,515 | | | | 65,250 | | | 3,942 | |
Shareholder servicing fee | | | 101,133 | | | 3,512,732 | | | | 420,014 | | | — | |
Distribution and service fees | | | 717 | | | 3,011 | | | | 1 | | | — | |
Other liabilities | | | 42,408 | | | 357,226 | | | | 58,644 | | | 1,682 | |
| | | | | | | | | | | | | | |
Total liabilities | | $ | 556,319 | | $ | 61,603,702 | | | $ | 3,263,939 | | $ | 917,739 | |
| | | | | | | | | | | | | | |
NET ASSETS | | $ | 354,940,789 | | $ | 9,306,049,812 | | | $ | 1,378,711,537 | | $ | 71,752,695 | |
| | | | | | | | | | | | | | |
NET ASSETS CONSIST OF | | | | | | | | | | | | | | |
Par value | | $ | 154 | | $ | 159,088 | | | $ | 78,060 | | $ | 58 | |
Paid-in capital in excess of par value | | | 208,533,466 | | | 5,957,888,237 | | | | 693,565,206 | | | 55,494,055 | |
Undistributed net investment income | | | 2,828,263 | | | 37,254,923 | | | | 4,095,292 | | | 87,583 | |
Accumulated net realized gain (loss) | | | 6,141,046 | | | 56,914,288 | | | | 85,689,248 | | | (4,642,556 | ) |
Net unrealized appreciation (depreciation) on: | | | | | | | | | | | | | | |
Investments | | | 137,437,860 | | | 3,254,904,204 | | | | 595,144,125 | | | 20,811,754 | |
Foreign currency translations | | | — | | | 1,860 | | | | 139,606 | | | 1,801 | |
Written options | | | — | | | (1,072,788 | ) | | | — | | | — | |
| | | | | | | | | | | | | | |
NET ASSETS | | $ | 354,940,789 | | $ | 9,306,049,812 | | | $ | 1,378,711,537 | | $ | 71,752,695 | |
| | | | | | | | | | | | | | |
See Notes to Financial Statements.
44
| | | | | | | | | | | | | | |
| | | Mid Cap
Value and
Restructuring
Fund | | Value and
Restructuring
Fund | | | Emerging
Markets Fund | | | International
Equity Fund |
Institutional Shares | | | | | | | | | | | | | | |
Net assets | | $ | 31,454,182 | | $ | 346,400,817 | | | $ | 61,806,841 | | | $ | 71,752,695 |
Shares outstanding | | | 1,360,218 | | | 5,923,241 | | | | 3,489,079 | | | | 5,789,159 |
Net asset value and offering price per share | | $ | 23.12 | | $ | 58.48 | | | $ | 17.71 | | | $ | 12.39 |
Shares | | | | | | | | | | | | | | |
Net assets | | $ | 321,635,768 | | $ | 8,951,377,336 | | | $ | 1,316,884,816 | | | | — |
Shares outstanding | | | 13,946,642 | | | 153,023,496 | | | | 74,569,830 | | | | — |
Net asset value and offering price per share | | $ | 23.06 | | $ | 58.50 | | | $ | 17.66 | | | | — |
Retirement Shares | | | | | | | | | | | | | | |
Net assets | | $ | 1,850,839 | | $ | 8,251,685 | | | | — | | | | — |
Shares outstanding | | | 80,968 | | | 141,164 | | | | — | | | | — |
Net asset value and offering price per share | | $ | 22.86 | | $ | 58.45 | | | | — | | | | — |
Class A | | | | | | | | | | | | | | |
Net assets | | | — | | $ | 9,987 | | | $ | 9,940 | | | | — |
Shares outstanding | | | — | | | 171 | | | | 563 | | | | — |
Net asset value per share (a) | | | — | | $ | 58.50 | (b) | | $ | 17.66 | | | | — |
Maximum sales charge | | | — | | | 5.75 | % | | | 5.75 | % | | | — |
Maximum offering price per share (c) | | | — | | $ | 62.07 | | | $ | 18.74 | | | | — |
Class C | | | | | | | | | | | | | | |
Net assets | | | — | | $ | 9,987 | | | $ | 9,940 | | | | — |
Shares outstanding | | | — | | | 171 | | | | 563 | | | | — |
Net asset value and offering price per share (a) | | | — | | $ | 58.50 | (b) | | $ | 17.66 | | | | — |
| (a) | | Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. |
| (b) | | Net asset value per share rounds due to fractional shares outstanding. |
| (c) | | On sales of $50,000 or more the offering price is reduced. |
See Notes to Financial Statements.
45
Excelsior Funds
Statements of Operations
For the Six Months Ended September 30, 2007 (Unaudited)
| | | | | | | | | | | | | | | | |
| | | Money
Fund | | | Core
Bond Fund | | | High
Yield Fund | | | Equity
Opportunities
Fund | |
INVESTMENT INCOME | | | | | | | | | | | | | | | | |
Dividends | | $ | 116,073 | | | $ | 347,439 | | | $ | — | | | $ | 3,349,272 | |
Interest | | | 31,908,244 | | | | 14,432,791 | | | | 4,245,939 | | | | 25,148 | |
Foreign withholding tax | | | — | | | | — | | | | — | | | | (38,831 | ) |
| | | | | | | | | | | | | | | | |
Total Investment Income | | | 32,024,317 | | | | 14,780,230 | | | | 4,245,939 | | | | 3,335,589 | |
EXPENSES | | | | | | | | | | | | | | | | |
Investment advisory fee | | | 1,501,032 | | | | 1,796,450 | | | | 425,759 | | | | 1,438,456 | |
Administration fee | | | 900,073 | | | | 411,888 | | | | 77,818 | | | | 285,185 | |
Distribution fee: | | | | | | | | | | | | | | | | |
Retirement Shares | | | — | | | | 2 | | | | — | | | | — | |
Class C | | | — | | | | — | | | | — | | | | 1 | |
Shareholder servicing fee: | | | | | | | | | | | | | | | | |
Institutional Shares | | | — | | | | — | | | | — | | | | — | |
Shares | | | 755,691 | | | | 400,341 | | | | 127,908 | | | | 395,026 | |
Retirement Shares | | | — | | | | 2 | | | | — | | | | — | |
Class A | | | — | | | | — | | | | — | | | | — | * |
Class C | | | — | | | | — | | | | — | | | | — | * |
Transfer agent fee | | | 53,717 | | | | 91,821 | | | | 23,259 | | | | 44,673 | |
Pricing and bookkeeping fees | | | 6,725 | | | | 15,922 | | | | 8,464 | | | | 5,799 | |
Trustees’/Directors’ fees | | | 19,885 | | | | 10,771 | | | | 12,614 | | | | 10,698 | |
Legal fee | | | 24,293 | | | | 13,909 | | | | 283,020 | | | | — | |
Custody fees | | | 44,109 | | | | 20,331 | | | | 9,605 | | | | 43,410 | |
Other expenses | | | 66,666 | | | | 64,185 | | | | 59,631 | | | | 63,366 | |
| | | | | | | | | | | | | | | | |
Total Expenses | | | 3,372,191 | | | | 2,825,622 | | | | 1,028,078 | | | | 2,286,614 | |
Fees waived/reimbursed by: | | | | | | | | | | | | | | | | |
Investment Advisor | | | (646,284 | ) | | | (557,634 | ) | | | (455,059 | ) | | | (307,056 | ) |
Administrator | | | (152,658 | ) | | | (69,483 | ) | | | (11,856 | ) | | | (49,310 | ) |
Custody earnings credit | | | (16,321 | ) | | | (1,706 | ) | | | (7,497 | ) | | | (167 | ) |
| | | | | | | | | | | | | | | | |
Net Expenses | | | 2,556,928 | | | | 2,196,799 | | | | 553,666 | | | | 1,930,081 | |
| | | | | | | | | | | | | | | | |
NET INVESTMENT INCOME (LOSS) | | | 29,467,389 | | | | 12,583,431 | | | | 3,692,273 | | | | 1,405,508 | |
| | | | | | | | | | | | | | | | |
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY, FUTURES CONTRACTS, SWAP CONTRACTS AND WRITTEN OPTIONS | | | | | | | | | | | | | | | | |
Net realized gain (loss) on: | | | | | | | | | | | | | | | | |
Investments | | | 2,996 | | | | 438,269 | | | | 364,010 | | | | 9,770,059 | |
Foreign currency transactions | | | — | | | | — | | | | — | | | | (78 | ) |
Futures contracts | | | — | | | | 64,303 | | | | — | | | | — | |
Swap contracts | | | — | | | | 5,699 | | | | — | | | | — | |
Written options | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
Net realized gain (loss) | | | 2,996 | | | | 508,271 | | | | 364,010 | | | | 9,769,981 | |
| | | | | | | | | | | | | | | | |
Net change in unrealized appreciation (depreciation) on: | | | | | | | | | | | | | | | | |
Investments | | | — | | | | (1,889,913 | ) | | | (4,023,073 | ) | | | 31,489,584 | |
Foreign currency translations | | | — | | | | — | | | | — | | | | 5,707 | |
Futures contracts | | | — | | | | 19,368 | | | | — | | | | — | |
Swap contracts | | | — | | | | 4,451 | | | | — | | | | — | |
Written options | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
Net change in unrealized appreciation (depreciation) | | | — | | | | (1,866,094 | ) | | | (4,023,073 | ) | | | 31,495,291 | |
| | | | | | | | | | | | | | | | |
Net Gain (Loss) | | | 2,996 | | | | (1,357,823 | ) | | | (3,659,063 | ) | | | 41,265,272 | |
| | | | | | | | | | | | | | | | |
Net Increase Resulting from Operations | | $ | 29,470,385 | | | $ | 11,225,608 | | | $ | 33,210 | | | $ | 42,670,780 | |
| | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
46
| | | | | | | | | | | | | | | | | | |
Large Cap
Growth
Fund | | | Mid Cap
Value and
Restructuring
Fund | | | Value and
Restructuring
Fund | | | Emerging
Markets
Fund | | | International
Equity Fund | |
| | | | | | | | | | | | | | | | | | |
| $ | 1,695,781 | | | $ | 5,207,492 | | | $ | 121,552,689 | | | $ | 23,243,411 | | | $ | 896,110 | |
| | 78,291 | | | | 7,827 | | | | 230,202 | | | | 140,597 | | | | 7,183 | |
| | (65,616 | ) | | | (59,725 | ) | | | (978,162 | ) | | | (3,316,927 | ) | | | (75,533 | ) |
| | | | | | | | | | | | | | | | | | | |
| | 1,708,456 | | | | 5,155,594 | | | | 120,804,729 | | | | 20,067,081 | | | | 827,760 | |
| | | | | | | | | | | | | | | | | | |
| | 2,975,452 | | | | 1,155,038 | | | | 26,841,299 | | | | 7,795,574 | | | | 361,519 | |
| | 592,719 | | | | 264,171 | | | | 6,744,653 | | | | 1,241,343 | | | | 69,913 | |
| | | | | | | | | | | | | | | | | | |
| | 18 | | | | 3,920 | | | | 10,720 | | | | — | | | | — | |
| | 1 | | | | — | | | | 1 | | | | 1 | | | | — | |
| | | | | | | | | | | | | | | | | | |
| | — | | | | — | | | | 53,483 | | | | — | | | | 59 | |
| | 952,487 | | | | 402,319 | | | | 10,337,292 | | | | 1,463,927 | | | | — | |
| | 9 | | | | 1,960 | | | | 5,177 | | | | — | | | | — | |
| | — | * | | | — | | | | — | * | | | — | * | | | — | |
| | — | * | | | — | | | | — | * | | | — | * | | | — | |
| | 85,663 | | | | 80,945 | | | | 1,294,761 | | | | 270,112 | | | | 6,752 | |
| | 7,095 | | | | 6,543 | | | | 7,277 | | | | 31,422 | | | | 16,708 | |
| | 14,224 | | | | 9,525 | | | | 108,782 | | | | 19,930 | | | | 12,513 | |
| | 35,321 | | | | 11,211 | | | | 385,114 | | | | 55,772 | | | | 2,846 | |
| | 24,052 | | | | 15,269 | | | | 299,009 | | | | 862,950 | | | | 27,042 | |
| | 97,694 | | | | 50,593 | | | | 525,020 | | | | 136,263 | | | | 20,145 | |
| | | | | | | | | | | | | | | | | | | |
| | 4,784,735 | | | | 2,001,494 | | | | 46,612,588 | | | | 11,877,294 | | | | 517,497 | |
| | | | | | | | | | | | | | | | | | |
| | — | | | | — | | | | — | | | | (209,969 | ) | | | (109,406 | ) |
| | (101,901 | ) | | | (44,647 | ) | | | (1,134,346 | ) | | | (160,676 | ) | | | (8,964 | ) |
| | (4,509 | ) | | | (6,679 | ) | | | (39,177 | ) | | | (28,826 | ) | | | (1,992 | ) |
| | | | | | | | | | | | | | | | | | | |
| | 4,678,325 | | | | 1,950,168 | | | | 45,439,065 | | | | 11,477,823 | | | | 397,135 | |
| | | | | | | | | | | | | | | | | | | |
| | (2,969,869 | ) | | | 3,205,426 | | | | 75,365,664 | | | | 8,589,258 | | | | 430,625 | |
| | | | | | | | | | | | | | | | | | | |
| | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | 31,509,475 | | | | (470,779 | ) | | | 109,640,328 | | | | 82,638,997 | | | | 5,669,119 | |
| | — | | | | (160 | ) | | | 89,300 | | | | 200,809 | | | | (13,715 | ) |
| | — | | | | — | | | | — | | | | — | | | | — | |
| | — | | | | — | | | | — | | | | — | | | | — | |
| | — | | | | — | | | | (3,139,781 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | |
| | 31,509,475 | | | | (470,939 | ) | | | 106,589,847 | | | | 82,839,806 | | | | 5,655,404 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | 81,732,156 | | | | 22,415,661 | | | | 502,250,047 | | | | 195,136,022 | | | | 486,702 | |
| | — | | | | — | | | | 8,579 | | | | 108,288 | | | | (710 | ) |
| | — | | | | — | | | | — | | | | — | | | | — | |
| | — | | | | — | | | | — | | | | — | | | | — | |
| | — | | | | — | | | | (3,916,046 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | |
| | 81,732,156 | | | | 22,415,661 | | | | 498,342,580 | | | | 195,244,310 | | | | 485,992 | |
| | | | | | | | | | | | | | | | | | | |
| | 113,241,631 | | | | 21,944,722 | | | | 604,932,427 | | | | 278,084,116 | | | | 6,141,396 | |
| | | | | | | | | | | | | | | | | | | |
| $ | 110,271,762 | | | $ | 25,150,148 | | | $ | 680,298,091 | | | $ | 286,673,374 | | | $ | 6,572,021 | |
| | | | | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
47
Excelsior Funds
Statements of Changes in Net Assets
| | | | | | | | | | | | | | | | |
| | |
| | | Money Fund | | | Core Bond Fund | |
Increase (Decrease) in Net Assets | | (Unaudited)
Six Months Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | | | (Unaudited)
Six Months Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | |
Operations | | | | | | | | | | | | | | | | |
Net investment income | | $ | 29,467,389 | | | $ | 64,755,001 | | | $ | 12,583,431 | | | $ | 18,645,393 | |
Net realized gain (loss) on investments, foreign currency transactions, futures contracts and swap contracts | | | 2,996 | | | | (2,912 | ) | | | 508,271 | | | | (67,050 | ) |
Net change in unrealized appreciation (depreciation) on investments, foreign currency translations, futures contracts and swap contracts | | | — | | | | — | | | | (1,866,094 | ) | | | 5,359,028 | |
| | | | | | | | | | | | | | | | |
Net increase resulting from operations | | | 29,470,385 | | | | 64,752,089 | | | | 11,225,608 | | | | 23,937,371 | |
| | | | | | | | | | | | | | | | |
Distributions to Shareholders | | | | | | | | | | | | | | | | |
From net investment income: | | | | | | | | | | | | | | | | |
Institutional Shares | | | (15,005,982 | ) | | | (26,104,170 | ) | | | (5,385,011 | ) | | | (5,693,159 | ) |
Shares | | | (14,488,978 | ) | | | (38,623,273 | ) | | | (7,026,663 | ) | | | (12,851,594 | ) |
Retirement Shares | | | — | | | | — | | | | (22 | ) | | | (40 | ) |
| | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | (29,494,960 | ) | | | (64,727,443 | ) | | | (12,411,696 | ) | | | (18,544,793 | ) |
| | | | | | | | | | | | | | | | |
Net Capital Share Transactions | | | (86,863,483 | ) | | | (298,083,731 | ) | | | (2,502,969 | ) | | | 263,311,270 | |
| | | | | | | | | | | | | | | | |
Net increase (decrease) in net assets | | | (86,888,058 | ) | | | (298,059,085 | ) | | | (3,689,057 | ) | | | 268,703,848 | |
| | | | | | | | | | | | | | | | |
NET ASSETS | | | | | | | | | | | | | | | | |
Beginning of period | | $ | 1,257,076,587 | | | $ | 1,555,135,672 | | | $ | 551,719,773 | | | $ | 283,015,925 | |
| | | | | | | | | | | | | | | | |
End of period | | $ | 1,170,188,529 | | | $ | 1,257,076,587 | | | $ | 548,030,716 | | | $ | 551,719,773 | |
| | | | | | | | | | | | | | | | |
Undistributed (overdistributed) net investment income, at end of period | | $ | (13 | ) | | $ | 27,558 | | | $ | 194,985 | | | $ | 23,250 | |
| | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
48
| | | | | | | | | | | | | | |
| |
| High Yield Fund | | | Equity Opportunities Fund | |
(Unaudited)
Six Months Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | | | (Unaudited)
Six Months Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | |
| | | | | | | | | | | | | | |
| $ | 3,692,273 | | | $ | 8,511,823 | | | $ | 1,405,508 | | | $ | 1,493,522 | |
|
364,010 |
| | | (309,422 | ) | | | 9,769,981 | | | | (1,525,507 | ) |
|
(4,023,073 |
) | | | 6,524,399 | | | | 31,495,291 | | | | 31,286,902 | |
| | | | | | | | | | | | | | | |
| | 33,210 | | | | 14,726,800 | | | | 42,670,780 | | | | 31,254,917 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | (154,811 | ) | | | (539,707 | ) | | | (381,460 | ) | | | (425,370 | ) |
| | (3,727,258 | ) | | | (7,813,910 | ) | | | (1,455,114 | ) | | | (851,918 | ) |
| | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | |
| | (3,882,069 | ) | | | (8,353,617 | ) | | | (1,836,574 | ) | | | (1,277,288 | ) |
| | | | | | | | | | | | | | | |
| | (22,610,627 | ) | | | (39,412,117 | ) | | | 30,922,416 | | | | 121,147,723 | |
| | | | | | | | | | | | | | | |
| | (26,459,486 | ) | | | (33,038,934 | ) | | | 71,756,622 | | | | 151,125,352 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| $ | 115,996,905 | | | $ | 149,035,839 | | | $ | 337,979,750 | | | $ | 186,854,398 | |
| | | | | | | | | | | | | | | |
| $ | 89,537,419 | | | $ | 115,996,905 | | | $ | 409,736,372 | | | $ | 337,979,750 | |
| | | | | | | | | | | | | | | |
| | | |
| $ | (686,734 | ) | | $ | (496,938 | ) | | $ | 144,193 | | | $ | 575,259 | |
| | | | | | | | | | | | | | | |
See Notes to Financial Statements.
49
Excelsior Funds
Statements of Changes in Net Assets — (continued)
| | | | | | | | | | | | | | | | |
| | |
| | | Large Cap Growth Fund | | | Mid Cap Value and
Restructuring Fund | |
Increase (Decrease) in Net Assets | | (Unaudited)
Six Months Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | | | (Unaudited)
Six Months Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | |
Operations | | | | | | | | | | | | | | | | |
Net investment income (loss) | | $ | (2,969,869 | ) | | $ | (4,255,930 | ) | | $ | 3,205,426 | | | $ | 3,160,394 | |
Net realized gain (loss) on investments, foreign currency transactions and written options | | | 31,509,475 | | | | 11,805,044 | | | | (470,939 | ) | | | 8,602,300 | |
Net realized gains from redemptions in-kind | | | — | | | | — | | | | — | | | | 23,046,664 | |
Net change in unrealized appreciation (depreciation) on investments, foreign currency translations and written options | | | 81,732,156 | | | | 37,708,433 | | | | 22,415,661 | | | | (10,315,446 | ) |
| | | | | | | | | | | | | | | | |
Net increase resulting from operations | | | 110,271,762 | | | | 45,257,547 | | | | 25,150,148 | | | | 24,493,912 | |
| | | | | | | | | | | | | | | | |
Distributions to Shareholders | | | | | | | | | | | | | | | | |
From net investment income: | | | | | | | | | | | | | | | | |
Institutional Shares | | | — | | | | — | | | | (409,234 | ) | | | (28,083 | ) |
Shares | | | — | | | | — | | | | (3,023,143 | ) | | | (69,200 | ) |
Retirement Shares | | | — | | | | — | | | | (11,004 | ) | | | — | |
From net realized gains: | | | | | | | | | | | | | | | | |
Institutional Shares | | | — | | | | — | | | | — | | | | (812 | ) |
Shares | | | — | | | | — | | | | — | | | | (6,735 | ) |
| | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | — | | | | — | | | | (3,443,381 | ) | | | (104,830 | ) |
| | | | | | | | | | | | | | | | |
Net Capital Share Transactions | | | 31,097,354 | | | | 136,983,006 | | | | 6,117,253 | | | | (36,769,439 | ) |
| | | | | | | | | | | | | | | | |
Net increase (decrease) in net assets | | | 141,369,116 | | | | 182,240,553 | | | | 27,824,020 | | | | (12,380,357 | ) |
| | | | | | | | | | | | | | | | |
NET ASSETS | | | | | | | | | | | | | | | | |
Beginning of period | | $ | 734,436,123 | | | $ | 552,195,570 | | | $ | 327,116,769 | | | $ | 339,497,126 | |
| | | | | | | | | | | | | | | | |
End of period | | $ | 875,805,239 | | | $ | 734,436,123 | | | $ | 354,940,789 | | | $ | 327,116,769 | |
| | | | | | | | | | | | | | | | |
Undistributed (overdistributed) net investment income, at end of period | | $ | (2,969,869 | ) | | $ | — | | | $ | 2,828,263 | | | $ | 3,066,218 | |
| | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
50
| | | | | | | | | | | | | | | | | | | | | | |
| | |
Value and Restructuring Fund | | | Emerging Markets Fund | | | International Equity Fund | |
(Unaudited)
Six Months Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | | | (Unaudited)
Six Months Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | | | (Unaudited)
Six Months Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | |
| | | | | | | | | | | | | | | | | | | | | | |
| $ | 75,365,664 | | | $ | 66,434,678 | | | $ | 8,589,258 | | | $ | 5,214,247 | | | $ | 430,625 | | | $ | 540,257 | |
|
106,589,847 |
| | | 96,756,036 | | | | 82,839,806 | | | | 48,869,293 | | | | 5,655,404 | | | | 4,968,955 | |
|
— |
| | | — | | | | — | | | | — | | | | — | | | | — | |
|
498,342,580 |
| | | 645,371,791 | | | | 195,244,310 | | | | 100,008,846 | | | | 485,992 | | | | 4,336,996 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | 680,298,091 | | | | 808,562,505 | | | | 286,673,374 | | | | 154,092,386 | | | | 6,572,021 | | | | 9,846,208 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | (2,703,852 | ) | | | (3,526,597 | ) | | | (204,395 | ) | | | (252,640 | ) | | | (500,265 | ) | | | (492,367 | ) |
| | (52,036,862 | ) | | | (64,324,804 | ) | | | (4,453,377 | ) | | | (5,716,045 | ) | | | — | | | | — | |
| | (18,993 | ) | | | (4,928 | ) | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | |
| | — | | | | — | | | | — | | | | (1,858,765 | ) | | | — | | | | — | |
| | — | | | | — | | | | — | | | | (51,272,417 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | (54,759,707 | ) | | | (67,856,329 | ) | | | (4,657,772 | ) | | | (59,099,867 | ) | | | (500,265 | ) | | | (492,367 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| | 539,354,612 | | | | 918,433,748 | | | | (37,717,544 | ) | | | 17,298,560 | | | | (4,502,165 | ) | | | 587,093 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | 1,164,892,996 | | | | 1,659,139,924 | | | | 244,298,058 | | | | 112,291,079 | | | | 1,569,591 | | | | 9,940,934 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| $ | 8,141,156,816 | | | $ | 6,482,016,892 | | | $ | 1,134,413,479 | | | $ | 1,022,122,400 | | | $ | 70,183,104 | | | $ | 60,242,170 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| $ | 9,306,049,812 | | | $ | 8,141,156,816 | | | $ | 1,378,711,537 | | | $ | 1,134,413,479 | | | $ | 71,752,695 | | | $ | 70,183,104 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | |
| $ | 37,254,923 | | | $ | 16,648,966 | | | $ | 4,095,292 | | | $ | 163,806 | | | $ | 87,583 | | | $ | 157,223 | |
| | | | | | | | | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
51
Excelsior Funds
Statements of Changes in Net Assets — Capital Stock Activity
| | | | | | | | | | | | |
| |
| | | Money
Fund | |
Changes in Shares | | (Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | |
| | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
Institutional Shares | | | | | | | | | | | | |
Subscriptions | | 2,123,476,337 | | | 2,123,476,337 | | | 4,262,737,772 | | | 4,262,737,772 | |
Proceeds received in connection with merger | | — | | | — | | | — | | | — | |
Distributions reinvested | | 6,941,966 | | | 6,941,966 | | | 9,160,704 | | | 9,160,704 | |
Redemptions | | (2,147,683,199 | ) | | (2,147,683,199 | ) | | (4,182,098,880 | ) | | (4,182,098,880 | ) |
| | | | | | | | | | | | |
Net increase (decrease) | | (17,264,896 | ) | | (17,264,896 | ) | | 89,799,596 | | | 89,799,596 | |
Shares | | | | | | | | | | | | |
Subscriptions | | 978,506,286 | | | 978,506,286 | | | 2,599,472,390 | | | 2,599,472,390 | |
Distributions reinvested | | 2,070,292 | | | 2,070,301 | | | 3,330,030 | | | 3,330,030 | |
Redemptions | | (1,050,175,172 | ) | | (1,050,175,174 | ) | | (2,990,685,747 | ) | | (2,990,685,747 | ) |
| | | | | | | | | | | | |
Net increase (decrease) | | (69,598,594 | ) | | (69,598,587 | ) | | (387,883,327 | ) | | (387,883,327 | ) |
Retirement Shares | | | | | | | | | | | | |
Distributions reinvested | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | |
Redemption Fees | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | |
See Notes to Financial Statements.
52
| | | | | | | | | | | | | | | | | | | | | | |
| |
Core Bond
Fund | | | High Yield
Fund | |
(Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | | | (Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | |
| Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
| | | | | | | | | | | | | | | | | | | | | | |
| 1,608,329 | | | 14,318,071 | | | 2,772,888 | | | 24,623,459 | | | 250,685 | | | 321,444 | | | 155,243 | | | 699,379 | |
| — | | | — | | | 25,148,666 | | | 225,504,856 | | | — | | | — | | | — | | | — | |
| 129,411 | | | 1,153,959 | | | 113,170 | | | 1,016,339 | | | 6,306 | | | 30,076 | | | 32,619 | | | 149,603 | |
| (3,775,194 | ) | | (33,744,674 | ) | | (1,706,058 | ) | | (15,286,027 | ) | | (345,344 | ) | | (1,644,392 | ) | | (1,952,444 | ) | | (8,902,311 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| (2,037,454 | ) | | (18,272,644 | ) | | 26,328,666 | | | 235,858,627 | | | (88,353 | ) | | (1,292,872 | ) | | (1,764,582 | ) | | (8,053,329 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
| 4,131,808 | | | 36,758,471 | | | 9,986,679 | | | 88,776,364 | | | 2,917,638 | | | 14,543,339 | | | 6,072,661 | | | 28,550,138 | |
| 408,792 | | | 3,642,395 | | | 673,001 | | | 5,989,211 | | | 157,785 | | | 746,752 | | | 217,741 | | | 1,004,402 | |
| (2,772,989 | ) | | (24,631,216 | ) | | (7,567,445 | ) | | (67,312,972 | ) | | (7,804,531 | ) | | (36,607,846 | ) | | (13,302,993 | ) | | (60,913,343 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| 1,767,611 | | | 15,769,650 | | | 3,092,235 | | | 27,452,603 | | | (4,729,108 | ) | | (21,317,755 | ) | | (7,012,591 | ) | | (31,358,803 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
| 3 | | | 25 | | | 4 | | | 40 | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| — | | | — | | | — | | | — | | | — | | | — | | | — | | | 15 | |
| | | | | | | | | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
53
Excelsior Funds
Statements of Changes in Net Assets — Capital Stock Activity — (continued)
| | | | | | | | | | | | |
| |
| | | Equity
Opportunities Fund | |
Changes in Shares | | (Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | |
| | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
Institutional Shares | | | | | | | | | | | | |
Subscriptions | | — | | | — | | | 944,747 | | | 12,184,733 | |
Distributions reinvested | | 72,851 | | | 1,075,963 | | | 3,799 | | | 48,632 | |
Redemptions | | 3,270 | | | 49,371 | | | (992,875 | ) | | (13,081,976 | ) |
Redemption-in-kind | | (576,382 | ) | | (8,696,843 | ) | | — | | | — | |
| | | | | | | | | | | | |
Net increase (decrease) | | (500,261 | ) | | (7,571,509 | ) | | (44,329 | ) | | (848,611 | ) |
Shares | | | | | | | | | | | | |
Subscriptions | | 3,925,144 | | | 59,329,430 | | | 11,404,243 | | | 151,491,788 | |
Distributions reinvested | | 22,381 | | | 338,329 | | | 12,057 | | | 154,087 | |
Redemptions | | (1,407,877 | ) | | (21,193,858 | ) | | (2,227,805 | ) | | (29,659,176 | ) |
| | | | | | | | | | | | |
Net increase | | 2,539,648 | | | 38,473,901 | | | 9,188,495 | | | 121,986,699 | |
Retirement Shares | | | | | | | | | | | | |
Subscriptions | | — | | | — | | | — | | | — | |
Distributions reinvested | | — | | | — | | | — | | | — | |
Redemptions | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | |
Net increase | | — | | | — | | | — | | | — | |
Class A | | | | | | | | | | | | |
Subscriptions | | 633 | | | 10,000 | | | — | | | — | |
| | | | | | | | | | | | |
Class C | | | | | | | | | | | | |
Subscriptions | | 633 | | | 10,000 | | | — | | | — | |
| | | | | | | | | | | | |
Redemption Fees | | — | | | 24 | | | — | | | 9,635 | |
| | | | | | | | | | | | |
See Notes to Financial Statements.
54
| | | | | | | | | | | | | | | | | | | | | | |
| |
Large Cap
Growth Fund | | | Mid Cap Value and
Restructuring Fund | |
(Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | | | (Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | |
| Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
| | | | | | | | | | | | | | | | | | | | | | |
| 639,159 | | | 7,008,651 | | | 1,518,333 | | | 15,997,075 | | | 87,974 | | | 2,059,041 | | | 174,817 | | | 3,499,002 | |
| — | | | — | | | — | | | — | | | 2,915 | | | 64,589 | | | 211 | | | 3,893 | |
| (23,086 | ) | | (255,856 | ) | | (10,095 | ) | | (106,750 | ) | | (184,991 | ) | | (4,291,248 | ) | | (435,896 | ) | | (8,797,430 | ) |
| — | | | — | | | — | | | — | | | — | | | — | | | (3,464,185 | ) | | (66,339,150 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| 616,073 | | | 6,752,795 | | | 1,508,238 | | | 15,890,325 | | | (94,102 | ) | | (2,167,618 | ) | | (3,725,053 | ) | | (71,633,685 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
| 8,464,143 | | | 94,946,565 | | | 26,983,018 | | | 268,887,660 | | | 1,559,841 | | | 35,513,246 | | | 3,915,673 | | | 81,532,520 | |
| — | | | — | | | — | | | — | | | 59,014 | | | 1,299,594 | | | 1,544 | | | 28,679 | |
| (6,290,633 | ) | | (70,638,170 | ) | | (14,969,954 | ) | | (147,806,621 | ) | | (1,296,696 | ) | | (29,206,361 | ) | | (2,387,520 | ) | | (47,782,321 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| 2,173,510 | | | 24,308,395 | | | 12,013,064 | | | 121,081,039 | | | 322,159 | | | 7,606,479 | | | 1,529,697 | | | 33,778,878 | |
| | | | | | | | | | | | | | | | | | | | | | |
| 745 | | | 8,171 | | | 172 | | | 1,807 | | | 36,280 | | | 821,293 | | | 51,153 | | | 1,086,065 | |
| — | | | — | | | — | | | — | | | 506 | | | 11,004 | | | — | | | — | |
| (77 | ) | | (822 | ) | | — | | | — | | | (6,911 | ) | | (153,942 | ) | | (118 | ) | | (2,475 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| 668 | | | 7,349 | | | 172 | | | 1,807 | | | 29,875 | | | 678,355 | | | 51,035 | | | 1,083,590 | |
| | | | | | | | | | | | | | | | | | | | | | |
| 821 | | | 10,000 | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| 821 | | | 10,000 | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| — | | | 8,815 | | | — | | | 9,835 | | | — | | | 37 | | | — | | | 1,778 | |
| | | | | | | | | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
55
Excelsior Funds
Statements of Changes in Net Assets — Capital Stock Activity — (continued)
| | | | | | | | | | | | |
| |
| | | Value and
Restructuring
Fund | |
Changes in Shares | | (Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | |
| | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
Institutional Shares | | | | | | | | | | | | |
Subscriptions | | 1,060,844 | | | 62,185,075 | | | 2,608,744 | | | 127,478,205 | |
Distributions reinvested | | 39,759 | | | 2,272,698 | | | 59,732 | | | 2,938,434 | |
Redemptions | | (1,996,347 | ) | | (118,375,818 | ) | | (921,391 | ) | | (45,845,721 | ) |
| | | | | | | | | | | | |
Net increase (decrease) | | (895,744 | ) | | (53,918,045 | ) | | 1,747,085 | | | 84,570,918 | |
Shares | | | | | | | | | | | | |
Subscriptions | | 20,544,409 | | | 1,192,492,183 | | | 40,342,962 | | | 2,018,418,152 | |
Distributions reinvested | | 737,965 | | | 42,355,044 | | | 1,056,240 | | | 51,956,233 | |
Redemptions | | (11,223,117 | ) | | (646,514,862 | ) | | (24,661,734 | ) | | (1,238,518,628 | ) |
| | | | | | | | | | | | |
Net increase (decrease) | | 10,059,257 | | | 588,332,365 | | | 16,737,468 | | | 831,855,757 | |
Retirement Shares | | | | | | | | | | | | |
Subscriptions | | 92,865 | | | 5,225,317 | | | 62,302 | | | 3,214,887 | |
Distributions reinvested | | 331 | | | 18,993 | | | 99 | | | 4,928 | |
Redemptions | | (5,912 | ) | | (339,933 | ) | | (26,673 | ) | | (1,242,118 | ) |
| | | | | | | | | | | | |
Net increase | | 87,284 | | | 4,904,377 | | | 35,728 | | | 1,977,697 | |
Class A | | | | | | | | | | | | |
Subscriptions | | 171 | | | 10,000 | | | — | | | — | |
| | | | | | | | | | | | |
Class C | | | | | | | | | | | | |
Subscriptions | | 171 | | | 10,000 | | | — | | | — | |
| | | | | | | | | | | | |
Redemption Fees | | — | | | 15,915 | | | — | | | 29,376 | |
| | | | | | | | | | | | |
See Notes to Financial Statements.
56
| | | | | | | | | | | | | | | | | | | | | | |
| |
Emerging
Markets
Fund | | | International
Equity
Fund | |
(Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | | | (Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | |
| Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
| | | | | | | | | | | | | | | | | | | | | | |
| 794,138 | | | 13,112,540 | | | 889,054 | | | 12,242,049 | | | 188,867 | | | 2,205,230 | | | 1,007,051 | | | 10,432,135 | |
| 2,566 | | | 40,715 | | | 104,377 | | | 1,425,589 | | | 6,901 | | | 82,192 | | | 9,003 | | | 83,598 | |
| (282,072 | ) | | (4,597,514 | ) | | (35,905 | ) | | (493,380 | ) | | (569,474 | ) | | (6,789,587 | ) | | (956,735 | ) | | (9,928,640 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| 514,632 | | | 8,555,741 | | | 957,526 | | | 13,174,258 | | | (373,706 | ) | | (4,502,165 | ) | | 59,319 | | | 587,093 | |
| | | | | | | | | | | | | | | | | | | | | | |
| 6,757,305 | | | 107,664,154 | | | 28,426,163 | | | 377,247,582 | | | — | | | — | | | — | | | — | |
| 182,628 | | | 2,891,003 | | | 2,899,020 | | | 39,144,568 | | | — | | | — | | | — | | | — | |
| (10,051,799 | ) | | (156,851,513 | ) | | (32,751,548 | ) | | (412,372,175 | ) | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| (3,111,866 | ) | | (46,296,356 | ) | | (1,426,365 | ) | | 4,019,975 | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | |
| — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| — | | | — | | | — | | | — | | | — | | | ��� | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | |
| 563 | | | 10,000 | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| 563 | | | 10,000 | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| — | | | 3,071 | | | — | | | 104,327 | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
57
Financial Highlights – Money Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30, 2007 | | | Year Ended March 31, | |
| | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.03 | (a) | | | 0.05 | (a) | | | 0.04 | (a) | | | 0.02 | (a) | | | 0.01 | | | | 0.01 | |
Net realized and unrealized loss on investments | | | — | | | | — | | | | (0.01 | ) | | | (0.01 | ) | | | — | | | | — | (b) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.03 | | | | 0.05 | | | | 0.03 | | | | 0.01 | | | | 0.01 | | | | 0.01 | |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.03 | ) | | | (0.05 | ) | | | (0.03 | ) | | | (0.01 | ) | | | (0.01 | ) | | | (0.01 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | | | $ | 1.00 | |
Total return (c)(d) | | | 2.55 | %(e) | | | 5.07 | % | | | 3.53 | % | | | 1.55 | % | | | 0.87 | % | | | 1.41 | % |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (f) | | | 0.30 | %(g) | | | 0.30 | % | | | 0.29 | % | | | 0.21 | % | | | 0.25 | % | | | 0.24 | % |
Waiver/Reimbursement | | | 0.13 | %(g) | | | 0.13 | % | | | 0.15 | % | | | 0.25 | % | | | 0.28 | % | | | 0.25 | % |
Net investment income (f) | | | 5.05 | %(g) | | | 4.96 | % | | | 3.54 | % | | | 1.52 | % | | | 0.86 | % | | | 1.41 | % |
Net assets, end of period (000’s) | | $ | 595,286 | | | $ | 612,562 | | | $ | 522,751 | | | $ | 625,287 | | | $ | 470,189 | | | $ | 548,126 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Amount represents less than $0.01 per share. |
| (c) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (d) | Total return at net asset value assuming all distributions reinvested. |
| (f) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
58
Financial Highlights – Core Bond Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30,
2007 | | | Year
Ended
March 31,
2007 | | | Period
Ended
March 31,
2006(a) | |
Net Asset Value, Beginning of Period | | $ | 8.98 | | | $ | 8.84 | | | $ | 9.07 | |
| | | |
Income from Investment Operations: | | | | | | | | | | | | |
Net investment income (b) | | | 0.21 | | | | 0.41 | | | | 0.13 | |
Net realized and unrealized gain (loss) on investments, futures contracts and swap contracts | | | (0.02 | ) | | | 0.14 | | | | (0.11 | ) |
| | | | | | | | | | | | |
Total from Investment Operations | | | 0.19 | | | | 0.55 | | | | 0.02 | |
| | | |
Less Distributions to Shareholders: | | | | | | | | | | | | |
From net investment income | | | (0.21 | ) | | | (0.41 | ) | | | (0.13 | ) |
From net realized gains | | | — | | | | — | | | | (0.12 | ) |
| | | | | | | | | | | | |
Total Distributions to Shareholders | | | (0.21 | ) | | | (0.41 | ) | | | (0.25 | ) |
| | | |
Net Asset Value, End of Period | | $ | 8.96 | | | $ | 8.98 | | | $ | 8.84 | |
Total return (c)(d) | | | 2.12 | %(e) | | | 6.33 | % | | | 0.20 | %(e) |
| | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | |
Net expenses (f) | | | 0.65 | %(g) | | | 0.65 | % | | | 0.66 | %(g) |
Waiver/Reimbursement | | | 0.23 | %(g) | | | 0.26 | % | | | 0.56 | %(g) |
Net investment income (f) | | | 4.71 | %(g) | | | 4.61 | % | | | 4.56 | %(g) |
Portfolio turnover rate | | | 29 | %(e) | | | 49 | % | | | 95 | %(e) |
Net assets, end of period (000’s) | | $ | 218,947 | | | $ | 237,752 | | | $ | 1,248 | |
| (a) | Institutional Shares commenced operations on November 29, 2005. Per share data and total return reflect activity from that date. |
| (b) | Per share data was calculated using the average shares outstanding during the period. |
| (c) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (d) | Total return at net asset value assuming all distributions reinvested. |
| (f) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
59
Financial Highlights – High Yield Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30,
2007 | | | Year Ended March 31, | |
| | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 4.80 | | | $ | 4.52 | | | $ | 4.66 | | | $ | 4.71 | | | $ | 3.99 | | | $ | 6.20 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (a) | | | 0.17 | | | | 0.33 | | | | 0.32 | | | | 0.32 | | | | 0.35 | | | | 0.93 | |
Net realized and unrealized gain (loss) on investments | | | (0.16 | ) | | | 0.28 | | | | (0.14 | ) | | | (0.06 | ) | | | 0.72 | | | | (1.58 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.01 | | | | 0.61 | | | | 0.18 | | | | 0.26 | | | | 1.07 | | | | (0.65 | ) |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.18 | ) | | | (0.33 | ) | | | (0.31 | ) | | | (0.31 | ) | | | (0.27 | ) | | | (1.05 | ) |
Return of capital | | | — | | | | — | | | | (0.01 | ) | | | — | | | | (0.08 | ) | | | (0.51 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | (0.18 | ) | | | (0.33 | ) | | | (0.32 | ) | | | (0.31 | ) | | | (0.35 | ) | | | (1.56 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 4.63 | | | $ | 4.80 | | | $ | 4.52 | | | $ | 4.66 | | | $ | 4.71 | | | $ | 3.99 | |
Total return (b)(c) | | | 0.17 | %(d) | | | 13.69 | % | | | 4.19 | % | | | 5.80 | % | | | 27.76 | % | | | (10.30 | )% |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (e) | | | 0.80 | %(f) | | | 0.79 | % | | | 0.80 | % | | | 0.80 | % | | | 0.80 | % | | | 0.83 | % |
Waiver/Reimbursement | | | 0.88 | %(f) | | | 0.55 | % | | | 0.24 | % | | | 0.27 | % | | | 0.31 | % | | | 0.27 | % |
Net investment income (e) | | | 7.21 | %(f) | | | 7.19 | % | | | 7.09 | % | | | 6.71 | % | | | 7.91 | % | | | 19.14 | % |
Portfolio turnover rate | | | 25 | %(d) | | | 75 | % | | | 62 | % | | | 70 | % | | | 170 | % | | | 153 | % |
Net assets, end of period (000’s) | | $ | 3,747 | | | $ | 4,309 | | | $ | 12,045 | | | $ | 13,308 | | | $ | 22,641 | | | $ | 37,250 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (c) | Total return at net asset value assuming all distributions reinvested. |
| (e) | The benefits derived from custody credits had an impact of less than 0.01%, except for the year ended March 31, 2007, which had an impact of 0.01%. |
See Notes to Financial Statements.
60
Financial Highlights – Equity Opportunities Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30,
2007 | | | Year Ended March 31, | | | Period
Ended
March 31, 2005(a) | |
| | | | 2007 | | | 2006 | | |
Net Asset Value, Beginning of Period | | $ | 14.18 | | | $ | 12.72 | | | $ | 10.98 | | | $ | 10.84 | |
| | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | |
Net investment income (b) | | | 0.07 | | | | 0.10 | | | | 0.09 | | | | 0.02 | |
Net realized and unrealized gain on investments | | | 1.67 | | | | 1.46 | | | | 1.72 | | | | 0.12 | |
| | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 1.74 | | | | 1.56 | | | | 1.81 | | | | 0.14 | |
| | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | |
From net investment income | | | (0.09 | ) | | | (0.10 | ) | | | (0.07 | ) | | | — | |
| | | | |
Net Asset Value, End of Period | | $ | 15.83 | | | $ | 14.18 | | | $ | 12.72 | | | $ | 10.98 | |
Total return (c)(d) | | | 12.34 | %(e) | | | 12.33 | % | | | 16.55 | % | | | 2.14 | %(e) |
| | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | |
Net expenses (f) | | | 0.80 | %(g) | | | 0.79 | % | | | 0.80 | % | | | 0.80 | %(g) |
Waiver/Reimbursement | | | 0.19 | %(g) | | | 0.19 | % | | | 0.25 | % | | | 0.41 | %(g) |
Net investment income (f) | | | 0.92 | %(g) | | | 0.78 | % | | | 0.78 | % | | | 0.87 | %(g) |
Portfolio turnover rate | | | 12 | %(e) | | | 11 | % | | | 17 | % | | | 13 | %(e) |
Net assets, end of period (000’s) | | $ | 59,174 | | | $ | 60,103 | | | $ | 54,449 | | | $ | 53,826 | |
| (a) | Institutional Shares commenced operations on January 31, 2005. Per share data and total return reflect activity from that date. |
| (b) | Per share data was calculated using the average shares outstanding during the period. |
| (c) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (d) | Total return at net asset value assuming all distributions reinvested. |
| (f) | The benefits derived from custody credits had an impact of less than 0.01%, except for the year ended March 31, 2007, which had an impact of 0.01%. |
See Notes to Financial Statements.
61
Financial Highlights – Large Cap Growth Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30,
2007 | | | Period
Ended
March 31,
2007(a) | |
Net Asset Value, Beginning of Period | | $ | 10.61 | | | $ | 10.13 | |
| | |
Income from Investment Operations: | | | | | | | | |
Net investment loss (b) | | | (0.03 | ) | | | (0.02 | ) |
Net realized and unrealized gain on investments | | | 1.60 | | | | 0.50 | |
| | | | | | | | |
Total from Investment Operations | | | 1.57 | | | | 0.48 | |
| | |
Net Asset Value, End of Period | | $ | 12.18 | | | $ | 10.61 | |
Total return (c)(d)(e) | | | 14.80 | % | | | 4.73 | % |
| | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | |
Net expenses (f)(g) | | | 0.94 | % | | | 0.95 | % |
Waiver/Reimbursement (g) | | | 0.03 | % | | | 0.01 | % |
Net investment loss (f)(g) | | | (0.52 | )% | | | (0.54 | )% |
Portfolio turnover rate (d) | | | 23 | % | | | 33 | % |
Net assets, end of period (000’s) | | $ | 25,877 | | | $ | 16,009 | |
| (a) | Institutional Shares commenced operations on November 9, 2006. Per share data and total return reflect activity from that date. |
| (b) | Per share data was calculated using the average shares outstanding during the period. |
| (c) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (e) | Total return at net asset value assuming all distributions reinvested. |
| (f) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
62
Financial Highlights – Mid Cap Value and Restructuring Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30,
2007 | | | Year Ended March 31, | |
| | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 21.71 | | | $ | 19.69 | | | $ | 16.81 | | | $ | 15.78 | | | $ | 10.25 | | | $ | 13.28 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (a) | | | 0.24 | | | | 0.18 | | | | 0.05 | | | | 0.25 | | | | 0.07 | | | | 0.05 | |
Net realized and unrealized gain (loss) on investments and foreign currency | | | 1.45 | | | | 1.86 | | | | 2.90 | | | | 1.04 | | | | 5.51 | | | | (3.04 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 1.69 | | | | 2.04 | | | | 2.95 | | | | 1.29 | | | | 5.58 | | | | (2.99 | ) |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.28 | ) | | | (0.02 | ) | | | (0.07 | ) | | | (0.26 | ) | | | (0.05 | ) | | | (0.04 | ) |
From net realized gains | | | — | | | | — | (b) | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | (0.28 | ) | | | (0.02 | ) | | | (0.07 | ) | | | (0.26 | ) | | | (0.05 | ) | | | (0.04 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 23.12 | | | $ | 21.71 | | | $ | 19.69 | | | $ | 16.81 | | | $ | 15.78 | | | $ | 10.25 | |
Total return (c) | | | 7.86 | %(d)(e) | | | 10.37 | %(d) | | | 17.58 | % | | | 8.18 | %(d) | | | 54.60 | %(d) | | | (22.58 | )%(d) |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (f) | | | 0.87 | %(g) | | | 0.87 | % | | | 0.88 | % | | | 0.89 | % | | | 0.74 | % | | | 0.76 | % |
Waiver/Reimbursement | | | 0.03 | %(g) | | | 0.01 | % | | | — | | | | 0.10 | % | | | 0.24 | % | | | 0.15 | % |
Net investment income (f) | | | 2.13 | %(g) | | | 0.87 | % | | | 0.27 | % | | | 1.59 | % | | | 0.49 | % | | | 0.44 | % |
Portfolio turnover rate | | | 4 | %(e) | | | 25 | % | | | 23 | % | | | 28 | % | | | 13 | % | | | 28 | % |
Net assets, end of period (000’s) | | $ | 31,454 | | | $ | 31,568 | | | $ | 101,965 | | | $ | 81,570 | | | $ | 100,729 | | | $ | 45,017 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Amount represents less than $0.01 per share. |
| (c) | Total return at net asset value assuming all distributions reinvested. |
| (d) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (f) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
63
Financial Highlights – Value and Restructuring Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30,
2007 | | | Year Ended March 31, | | | Period
Ended
March 31, 2003(a) | |
| | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | |
Net Asset Value, Beginning of Period | | $ | 54.34 | | | $ | 49.36 | | | $ | 41.40 | | | $ | 37.56 | | | $ | 23.65 | | | $ | 22.92 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.58 | (b) | | | 0.56 | (b) | | | 0.63 | (b) | | | 0.42 | (b) | | | 0.32 | (b) | | | 0.22 | |
Net realized and unrealized gain on investments, foreign currency and written options | | | 4.00 | | | | 5.00 | | | | 7.87 | | | | 3.84 | | | | 13.89 | | | | 0.59 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 4.58 | | | | 5.56 | | | | 8.50 | | | | 4.26 | | | | 14.21 | | | | 0.81 | |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.44 | ) | | | (0.58 | ) | | | (0.54 | ) | | | (0.42 | ) | | | (0.30 | ) | | | (0.08 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 58.48 | | | $ | 54.34 | | | $ | 49.36 | | | $ | 41.40 | | | $ | 37.56 | | | $ | 23.65 | |
Total return (c) | | | 8.44 | %(d)(e) | | | 11.39 | % | | | 20.70 | % | | | 11.44 | %(d) | | | 60.46 | %(d) | | | 3.54 | %(e) |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (f) | | | 0.81 | %(g) | | | 0.84 | % | | | 0.85 | % | | | 0.83 | % | | | 0.74 | % | | | — | %(g)(h) |
Waiver/Reimbursement | | | 0.03 | %(g) | | | — | | | | — | | | | 0.01 | % | | | 0.15 | % | | | — | %(g) |
Net investment income (f) | | | 2.01 | %(g) | | | 1.12 | % | | | 1.39 | % | | | 1.05 | % | | | 1.00 | % | | | 1.90 | %(g) |
Portfolio turnover rate | | | 5 | %(e) | | | 13 | % | | | 12 | % | | | 8 | % | | | 4 | % | | | 16 | %(e) |
Net assets, end of period (000’s) | | $ | 346,401 | | | $ | 370,518 | | | $ | 250,367 | | | $ | 161,016 | | | $ | 38,243 | | | $ | — | (i) |
| (a) | Institutional Shares commenced operations on September 30, 2002. Per share data and total return reflect activity from that date. |
| (b) | Per share data was calculated using the average shares outstanding during the period. |
| (c) | Total return at net asset value assuming all distributions reinvested. |
| (d) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (f) | The benefits derived from custody credits had an impact of less than 0.01%. |
| (h) | The information presented reflects the impact of the low level of assets at the beginning of the period and throughout the period ended March 31, 2003. Percentage amounts to less than 0.005%. |
| (i) | Amount represents less than $1,000. |
See Notes to Financial Statements.
64
Financial Highlights – Emerging Markets Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30,
2007 | | | Year Ended March 31, | |
| | | | 2007 | | | 2006 | |
Net Asset Value, Beginning of Period | | $ | 14.10 | | | $ | 12.62 | | | $ | 8.81 | |
| | | |
Income from Investment Operations: | | | | | | | | | | | | |
Net investment income (a) | | | 0.13 | | | | 0.12 | | | | 0.13 | |
Net realized and unrealized gain on investments and foreign currency | | | 3.55 | | | | 2.15 | | | | 3.79 | |
| | | | | | | | | | | | |
Total from Investment Operations | | | 3.68 | | | | 2.27 | | | | 3.92 | |
| | | |
Less Distributions to Shareholders: | | | | | | | | | | | | |
From net investment income | | | (0.07 | ) | | | (0.10 | ) | | | (0.11 | ) |
From net realized gains | | | — | | | | (0.69 | ) | | | — | |
| | | | | | | | | | | | |
Total Distributions to Shareholders | | | (0.07 | ) | | | (0.79 | ) | | | (0.11 | ) |
| | | |
Net Asset Value, End of Period | | $ | 17.71 | | | $ | 14.10 | | | $ | 12.62 | |
Total return (b)(c) | | | 26.14 | %(d) | | | 18.33 | % | | | 46.25 | %(d) |
| | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | |
Net expenses (e) | | | 1.60 | %(f) | | | 1.60 | % | | | 1.56 | %(f) |
Waiver/Reimbursement | | | 0.06 | %(f) | | | 0.06 | % | | | 0.12 | %(f) |
Net investment income (e) | | | 1.59 | %(f) | | | 0.70 | % | | | 1.23 | %(f) |
Portfolio turnover rate | | | 9 | %(d) | | | 16 | % | | | 7 | %(d) |
Net assets, end of period (000’s) | | $ | 61,807 | | | $ | 41,932 | | | $ | 25,457 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (c) | Total return at net asset value assuming all distributions reinvested. |
| (e) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
65
Financial Highlights – International Equity Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30,
2007 | | | Year Ended March 31, | |
| | | | 2007 | | | 2006 | | | 2005 | | | 2004 | | | 2003 | |
Net Asset Value, Beginning of Period | | $ | 11.39 | | | $ | 9.87 | | | $ | 7.80 | | | $ | 6.69 | | | $ | 4.09 | | | $ | 5.85 | |
| | | | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.07 | (a) | | | 0.09 | (a) | | | 0.08 | (a) | | | 0.08 | (a) | | | 0.08 | | | | 0.07 | |
Net realized and unrealized gain (loss) on investments and foreign currency | | | 1.01 | | | | 1.51 | | | | 2.12 | | | | 1.04 | | | | 2.59 | | | | (1.77 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 1.08 | | | | 1.60 | | | | 2.20 | | | | 1.12 | | | | 2.67 | | | | (1.70 | ) |
| | | | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.08 | ) | | | (0.08 | ) | | | (0.13 | ) | | | (0.01 | ) | | | (0.07 | ) | | | (0.06 | ) |
| | | | | | |
Net Asset Value, End of Period | | $ | 12.39 | | | $ | 11.39 | | | $ | 9.87 | | | $ | 7.80 | | | $ | 6.69 | | | $ | 4.09 | |
Total return (b)(c) | | | 9.53 | %(d) | | | 16.39 | % | | | 28.72 | % | | | 16.98 | % | | | 65.55 | % | | | (29.26 | )% |
| | | | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net expenses (e) | | | 1.10 | %(f) | | | 1.10 | % | | | 1.04 | % | | | 0.90 | % | | | 0.90 | % | | | 0.87 | % |
Waiver/Reimbursement | | | 0.33 | %(f) | | | 0.32 | % | | | 0.42 | % | | | 0.58 | % | | | 0.54 | % | | | 0.42 | % |
Net investment income (e) | | | 1.19 | %(f) | | | 0.84 | % | | | 0.97 | % | | | 1.18 | % | | | 1.32 | % | | | 1.07 | % |
Portfolio turnover rate | | | 18 | %(d) | | | 31 | % | | | 34 | % | | | 59 | % | | | 59 | % | | | 71 | % |
Net assets, end of period (000’s) | | $ | 71,753 | | | $ | 70,183 | | | $ | 60,242 | | | $ | 43,439 | | | $ | 35,598 | | | $ | 29,024 | |
| (a) | Per share data was calculated using the average shares outstanding during the period. |
| (b) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (c) | Total return at net asset value assuming all distributions reinvested. |
| (e) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
66
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS
September 30, 2007 (Unaudited)
Excelsior Funds, Inc. (“Excelsior Fund”) is organized as a Maryland Corporation. Excelsior Funds Trust (the “Trust”) is organized as a Delaware business trust. Excelsior Fund and the Trust are registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as open-end, management investment companies. Information presented in these financial statements pertains to the following diversified funds (individually referred to as a “Fund”, collectively referred to as the “Funds”):
Excelsior Fund:
Money Fund
Core Bond Fund
Large Cap Growth Fund
Value and Restructuring Fund
Emerging Markets Fund
The Trust:
High Yield Fund
Equity Opportunities Fund
Mid Cap Value and Restructuring Fund
International Equity Fund
Investment Objectives
Money Fund seeks as high a level of current income as is consistent with liquidity and stability of principal. Core Bond Fund seeks high current income consistent with what is believed to be prudent risk of capital. High Yield Fund seeks a high level of current income as its primary objective, and may also consider the potential for capital appreciation as a secondary objective, when consistent with its primary objective. Equity Opportunities Fund seeks total return on its assets through long-term capital appreciation. Large Cap Growth Fund seeks superior, long-term capital appreciation by investing in larger companies whose growth prospects, in the opinion of the Advisor, appear to exceed that of the overall market. Mid Cap Value and Restructuring Fund and Value and Restructuring Fund each seeks long-term capital appreciation by investing in companies that will benefit from their restructuring or redeployment of assets and operations in order to become more competitive or profitable. Emerging Markets Fund seeks long-term capital appreciation. International Equity Fund seeks to provide long-term capital appreciation through investment in a diversified portfolio of marketable foreign securities.
Fund Shares
Excelsior Fund is authorized to issue up to 42.5 billion shares of common stock with a par value of $0.001 per share. Authorized capital currently offered for each Fund is as follows: 5.0 billion shares of Money Fund; 3.0 billion shares each of Large Cap Growth Fund and Emerging Markets Fund; 3.5 billion shares of Value and Restructuring Fund; and 1.250 billion shares of Core Bond Fund. The Trust may issue an unlimited number of shares of beneficial interest of each class of each Fund, with a par value of $0.00001.
67
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
International Equity Fund offers one class of shares: Institutional Shares. Money Fund and High Yield Fund offer two classes of shares: Institutional Shares and Shares. Core Bond Fund and Mid Cap Value and Restructuring Fund offer three classes of shares: Institutional Shares, Shares and Retirement Shares. Equity Opportunities Fund and Emerging Markets Fund offer four classes of shares: Institutional Shares, Shares, Class A Shares and Class C Shares. Large Cap Growth Fund and Value and Restructuring Fund offer five classes of shares: Institutional Shares, Shares, Class A Shares, Class C Shares, and Retirement Shares. The Class A Shares and Class C Shares commenced operations on September 28, 2007 and commenced public offering of shares on October 1, 2007. The financial highlights of the Shares, Class A Shares, Class C Shares and Retirement Shares of the Funds are presented separately.
Institutional Shares, Shares and Retirement Shares are offered continuously at net asset value. There are certain restrictions on the purchase of Institutional Shares and Retirement Shares, as described in the Funds’ prospectuses. Class A Shares are subject to a maximum front-end sales charge of 5.75% based on the amount of initial investment. Class A Shares purchased without an initial sales charge in accounts aggregating from $1 million up to $50 million at the time of purchase are subject to a 1.00% contingent deferred sales charge (“CDSC”) if the shares are sold within twelve months after purchase. Class C Shares are subject to a 1.00% CDSC on shares sold within twelve months after purchase.
| Note 2. | Significant Accounting Policies |
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Certain ratios have been reclassified on the Financial Highlights to conform to the current period presentation. The changes have no effect on the ratios. The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements.
Security Valuation
Securities in all Funds, except Money Fund, are valued using the following policies:
Debt securities generally are valued by pricing services approved by the Board of Directors with regard to Excelsior Fund and the Board of Trustees with regard to the Trust, based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. Debt securities for which quotations are readily available are valued at an over-the-counter or exchange bid quotation. Certain debt securities, which tend to be more thinly traded and of lesser quality, are priced based on fundamental analysis of the financial condition of the issuer and the estimated value of any collateral. Valuations developed through pricing techniques may vary from the actual amounts realized upon sale of the securities, and the potential variation may be greater for those securities valued using fundamental analysis.
68
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
Equity securities are valued at the last sale price on the principal exchange on which they trade, except for securities traded on the NASDAQ, which are valued at the NASDAQ official close price. Unlisted securities or listed securities for which there were no sales during the day are valued at the closing bid price on such exchanges or over-the-counter markets.
Short-term debt obligations maturing within 60 days are valued at amortized cost, which approximates market value.
Investments in other open-end investment companies are valued at net asset value.
Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
Options are valued at the last reported sale price, or in the absence of a sale, the mean between the last quoted bid and ask price.
Swap agreements are stated at fair value.
Foreign securities are generally valued at the last sale price on the foreign exchange or market on which they trade. If any foreign share prices are not readily available as a result of limited share activity, the securities are valued at the last sale price of the local shares in the principal market in which such securities are normally traded.
Generally, trading in foreign securities is substantially completed each day at various times prior to the close of the New York Stock Exchange (“NYSE”). The values of such securities used in computing the net asset value of the Funds’ shares are determined as of such times. Foreign currency exchange rates are generally determined at 4:00 p.m. Eastern (U.S.) time. Occasionally, events affecting the values of such foreign securities and such exchange rates may occur between the times at which they are determined and the close of the customary trading session of the NYSE, which would not be reflected in the computation of the Funds’ net asset value. If events materially affecting the values of such foreign securities occur and it is determined that market quotations are not reliable, then these foreign securities will be valued at their “fair value” using procedures approved by the Board of Directors with regard to Excelsior Fund and the Board of Trustees with regard to the Trust. Certain Funds may use a systematic fair valuation model provided by an independent third party to value securities principally traded in foreign markets in order to adjust for possible stale pricing that may occur between the close of the foreign exchanges and the time for valuation.
Investments for which market quotations are not readily available, or that have quotations which management believes are not reliable, are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Directors with regard to Excelsior Fund and the Board of Trustees with regard to the Trust. If a security is valued at fair value such value is likely to be different from the last quoted market price for the security.
Securities in Money Fund are valued utilizing the amortized cost valuation method permitted in accordance with Rule 2a-7 under the 1940 Act provided certain conditions are met. This method
69
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
involves valuing a portfolio security initially at its cost and thereafter assuming a constant accretion or amortization to maturity of any discount or premium, respectively.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS 157”), was issued. SFAS 157 is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is evaluating the impact the application of SFAS 157 will have on the Funds’ financial statement disclosures.
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Futures Contracts
Each Fund may invest in futures contracts to gain or reduce exposure to particular securities or segments of the bond markets. Futures contracts are financial instruments whose values depend on, or are derived from, the value of the underlying security, index or currency. The Funds may use futures contracts for both hedging and non-hedging purposes, such as to adjust the Funds’ sensitivity to changes in interest rates, or to offset a potential loss in one position by establishing an opposite position. The Funds typically use futures contracts in an effort to achieve economic exposure similar to that which they could have achieved through the purchase and sale of fixed income securities more efficiently.
The use of futures contracts involves certain risks, which include: (1) imperfect correlation between the price movement of the instruments and the underlying securities, (2) inability to close out positions due to differing trading hours, or the temporary absence of a liquid market, for either the instrument or the underlying securities, and (3) an inaccurate prediction by the Funds’ investment advisor of the future direction of interest rates. Any of these risks may involve amounts exceeding the variation margin recorded in the Funds’ Statements of Assets and Liabilities at any given time.
Upon entering into a futures contract, a Fund deposits cash or securities with the broker in an amount sufficient to meet the initial margin requirement. Subsequent payments are made or received by a Fund equal to the daily change in the contract value and are recorded as variation margin receivable or payable and offset in unrealized gains or losses. A Fund recognizes a realized gain or loss when the contract is closed or expires.
Options
Certain Funds may write call and put options on securities they own or in which they may invest. Writing put options tends to increase the Funds’ exposure to the underlying instrument. Writing call options tends to decrease the Funds’ exposure to the underlying instrument. When the Funds write a call or put
70
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
option, an amount equal to the premium received is recorded as a liability and subsequently marked-to-market to reflect the current value of the option written. Premiums received from writing options which expire are treated as realized gains. Premiums received from writing options which are exercised or closed are added to the proceeds or offset against the amounts paid on the underlying transaction to determine the realized gain or loss. Each Fund as a writer of an option has no control over whether the underlying security may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the security underlying the written option. There is the risk that the Funds may not be able to enter into a closing transaction because of an illiquid market. The Funds’ custodian will set aside cash or liquid portfolio securities equal to the amount of the written options contract commitment in a separate account.
Each Fund may also purchase put and call options. Purchasing call options tends to increase the Funds’ exposure to the underlying instrument. Purchasing put options tends to decrease the Funds’ exposure to the underlying instrument. Each Fund may pay a premium, which is included in the Funds’ Statements of Assets and Liabilities as an investment and subsequently marked-to-market to reflect the current value of the option. The risk associated with purchasing put and call options is limited to the premium paid. Premiums paid for purchasing options which expire are treated as realized losses. Premiums paid for purchasing options which are exercised or closed are added to the amounts paid or offset against the proceeds on the underlying transaction to determine the realized gain or loss.
Repurchase Agreements
Each Fund may engage in repurchase agreement transactions with institutions that the Funds’ investment advisor has determined are creditworthy. Each Fund, through its custodian, receives delivery of underlying securities collateralizing a repurchase agreement. The investment advisor is responsible for determining that collateral is at least equal, at all times, to the value of the repurchase obligation including interest. A repurchase agreement transaction involves certain risks in the event of default or insolvency of the counterparty. These risks include possible delays or restrictions upon each Fund’s ability to dispose of the underlying securities and a possible decline in the value of the underlying securities during the period while the Fund seeks to assert its rights.
Swap Contracts
Certain Funds may engage in swap transactions such as interest rate swaps, consistent with their investment objective and policies, to obtain a desired return at a lower cost than if the Funds had invested directly in the asset that yielded the desired return.
Swaps involve the exchange by a Fund with another party of their respective commitments to pay or receive interest or total return throughout the lives of the agreements. The interest to be paid or received on swaps is included in realized gain (loss) on investments. Unrealized gains are reported as an asset and unrealized losses are reported as a liability on the Statements of Assets and Liabilities. A realized gain or loss is recorded upon termination of swap agreements and is equal to the difference between the Fund’s basis in the swap and the proceeds from (or cost of) the closing transaction. Swap
71
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
agreements are stated at fair value. Notional principal amounts are used to express the extent of involvement in these transactions, but the amounts potentially subject to credit risk are much smaller.
If there is a default by the counterparty to a swap contract, the Funds will be limited to contractual remedies pursuant to the agreements related to the transaction. There is no assurance that the swap contract counterparties will be able to meet their obligations pursuant to the swap contracts or that, in the event of default, the Funds will succeed in pursuing contractual remedies. The Funds thus assume the risk that they may be delayed in or prevented from obtaining payments owed to them pursuant to the swap contracts.
The use of derivative instruments involves, to varying degrees, elements of market risk in excess of the amount recognized in the Statements of Assets and Liabilities.
Treasury Inflation Protected Securities
Certain Funds may invest in Treasury Inflation Protected Securities (“TIPS”). The principal amount of TIPS is adjusted periodically for inflation based on a monthly published index. Interest payments are based on the inflation-adjusted principal at the time the interest is paid.
Loan Participations and Commitments
Certain Funds may invest in loan participations. When a Fund purchases a Loan Participation, the Fund typically enters into a contractual relationship with the lender or third party selling such Participation (“Selling Participant”), but not the Borrower. As a result, the Fund assumes the credit risk of the Borrower, Selling Participant and any other persons interpositioned between the Fund and the Borrower (“Intermediate Participants”). The Fund may not directly benefit from the collateral supporting the Senior Loan which it has purchased from the Selling Participant.
Income Recognition
Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on debt securities. Corporate actions and dividend income are recorded on the ex-date except for certain foreign securities which are recorded as soon after the ex-date as the Fund becomes aware of such, net of any non-reclaimable tax withholdings. Distributions received from real estate investment trusts (REITs) in excess of their income are recorded as a reduction of the cost of the related investments and/or realized gains as applicable. If the Fund no longer owns the applicable securities, any distributions received in excess of income are recorded as realized gains. The value of additional securities received as an income payment is recorded as income and as the cost basis of such securities.
Foreign Currency Transactions
The values of all assets and liabilities quoted in foreign currencies are translated into U.S. dollars at that day’s exchange rates. Net realized and unrealized gains (losses) on foreign currency transactions
72
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
include gains (losses) arising from the fluctuation in exchange rates between trade and settlement dates on securities transactions, gains (losses) arising from the disposition of foreign currency and currency gains (losses) between the accrual and payment dates on dividends, interest income and foreign withholding taxes.
For financial statement purposes, the Funds do not distinguish that portion of gains (losses) on investments which is due to changes in foreign exchange rates from that which is due to changes in market prices of the investments. Such fluctuations are included in the net realized and unrealized gains (losses) on investments in the Statements of Operations.
Determination of Class Net Asset Value
For each Fund, with the exception of Money Fund, Core Bond Fund and High Yield Fund, all income, expenses (other than class-specific expenses, as shown on the Statements of Operations) and realized and unrealized gains (losses) are allocated to each class of a Fund on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class. For Money Fund, Core Bond Fund and High Yield Fund, income and expenses are allocated to each class based on the settled shares method, while realized and unrealized gains (losses) are allocated based on the relative net assets of each class.
Federal Income Tax Status
Each Fund intends to qualify each year as a “regulated investment company” under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its taxable or tax-exempt income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, each Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that each Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Foreign Capital Gains Taxes
Realized gains in certain countries may be subject to foreign taxes at the fund level, at rates ranging from approximately 10% to 15%. The Funds accrue for such foreign taxes on net realized and unrealized gains at the appropriate rate for each jurisdiction.
Distributions to Shareholders
Dividends from net investment income are declared daily and paid monthly for Money Fund, Core Bond Fund and High Yield Fund. Dividends from net investment income are declared and paid quarterly for Equity Opportunities Fund, Large Cap Growth Fund, Mid Cap Value and Restructuring Fund and Value and Restructuring Fund. Dividends from net investment income are declared and paid semi-annually for Emerging Markets Fund and International Equity Fund. Net realized capital gains, if any, are distributed at least annually for all Funds.
73
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
Indemnification
In the normal course of business, each Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. A Fund’s maximum exposure under these arrangements is unknown because this would involve future claims against the Fund. Also, under the organizational documents of Excelsior Fund and the Trust, and by contract, the Board of Directors with regard to Excelsior Fund and the Board of Trustees with regard to the Trust, are indemnified against certain liabilities that may arise out of actions relating to their duties to Excelsior Fund and the Trust. However, based on experience, the Funds expect the risk of loss due to these representations, warranties and indemnities to be minimal.
| Note 3. | Federal Income Tax Information |
The tax character of distributions paid during the year ended March 31, 2007 was as follows:
| | | | | | |
| | | Ordinary
Income * | | Long-Term
Capital Gains |
Money Fund | | $ | 65,587,427 | | $ | — |
Core Bond Fund | | | 17,474,254 | | | — |
High Yield Fund | | | 8,535,124 | | | — |
Equity Opportunities Fund | | | 1,277,288 | | | — |
Large Cap Growth Fund | | | — | | | — |
Mid Cap Value and Restructuring Fund | | | 97,283 | | | 7,547 |
Value and Restructuring Fund | | | 67,856,329 | | | — |
Emerging Markets Fund | | | 7,542,032 | | | 51,557,835 |
International Equity Fund | | | 492,367 | | | — |
| | * | For tax purposes short-term capital gains distributions, if any, are considered ordinary income distributions. |
Unrealized appreciation and depreciation at September 30, 2007, based on cost of investments for federal income tax purposes, excluding any unrealized appreciation and depreciation from changes in the value of other assets and liabilities resulting from changes in exchange rates, was:
| | | | | | | | | | | |
| | | Unrealized
Appreciation | | Unrealized
Depreciation | | | Net Unrealized
Appreciation
(Depreciation) | |
Core Bond Fund | | $ | 9,116,518 | | $ | (9,950,472 | ) | | $ | (833,954 | ) |
High Yield Fund | | | 2,941,577 | | | (2,393,339 | ) | | | 548,238 | |
Equity Opportunities Fund | | | 98,827,567 | | | (11,693,053 | ) | | | 87,134,514 | |
Large Cap Growth Fund | | | 229,089,580 | | | (23,403,331 | ) | | | 205,686,249 | |
Mid Cap Value and Restructuring Fund | | | 148,178,220 | | | (10,740,360 | ) | | | 137,437,860 | |
Value and Restructuring Fund | | | 3,535,111,311 | | | (280,207,107 | ) | | | 3,254,904,204 | |
Emerging Markets Fund | | | 606,755,147 | | | (11,611,022 | ) | | | 595,144,125 | |
International Equity Fund | | | 23,191,969 | | | (2,380,215 | ) | | | 20,811,754 | |
74
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
The following capital loss carryforwards, determined as of March 31, 2007, may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code:
| | | | | | | | | | | | | | | | | | | | | |
| | | Expires March 31, | | |
| | | 2010 | | 2011 | | 2012 | | 2013 | | 2014 | | 2015 | | Total |
Money Fund | | $ | — | | $ | 11,662 | | $ | 23,975 | | $ | — | | $ | 4,889 | | $ | 2,912 | | $ | 43,438 |
Core Bond Fund | | | — | | | — | | | — | | | — | | | 1,303,908 | | | 330,101 | | | 1,634,009 |
High Yield Fund | | | 440,234 | | | 17,456,849 | | | 40,103,941 | | | 1,461,417 | | | 6,017,018 | | | — | | | 65,479,459 |
Equity Opportunities Fund | | | — | | | — | | | — | | | — | | | 880,333 | | | 2,193,825 | | | 3,074,158 |
Large Cap Growth Fund | | | 18,217,588 | | | 83,374,895 | | | 22,030,449 | | | 480,165 | | | — | | | — | | | 124,103,097 |
Value and Restructuring Fund | | | — | | | 19,930,042 | | | 27,363,534 | | | — | | | — | | | — | | | 47,293,576 |
Emerging Markets Fund | | | — | | | — | | | 1,247,253 | | | — | | | 36,739 | | | — | | | 1,283,992 |
International Equity Fund | | | — | | | 8,447,749 | | | 1,672,132 | | | — | | | — | | | — | | | 10,119,881 |
The Funds adopted Financial Accounting Standards Board (“FASB”) Interpretation No. 48, Accounting for Uncertainty in Income Taxes- an Interpretation of FASB Statement No. 109 (“FIN 48”) effective September 28, 2007. FIN 48 requires management to determine whether a tax position of a Fund is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that exceeds fifty percent of the amount likely to be realized upon ultimate settlement. FIN 48 must be applied to all existing tax positions upon initial adoption and the cumulative effect, if any, is to be reported as an adjustment to net assets. Management has evaluated the known implications of FIN 48 on its computation of net assets for each Fund. As a result of this evaluation, management believes that FIN 48 will not have any effect on the Funds’ financial statements. However, management’s conclusions regarding FIN 48 may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation guidance from the FASB, new tax laws, regulations, and administrative interpretations (including relevant court decisions).
| Note 4. | Fees and Compensation Paid to Affiliates |
Investment Advisory Fee
United States Trust Company, National Association, through its separate identifiable division, U.S. Trust New York Asset Management Division (“USTNA”), or UST Advisers, Inc. (“USTA” and together with USTNA, the “Advisor”) is the investment advisor to the Funds. USTNA is a wholly owned subsidiary of U.S. Trust Corporation (“U.S. Trust”). USTA is a wholly owned subsidiary of USTNA. Effective July 1,
75
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
2007, U.S. Trust became a wholly owned subsidiary of the Bank of America Corporation (“BOA”). Prior to July 1, 2007, U.S. Trust was a wholly owned subsidiary of The Charles Schwab Corporation.
For its services, the Advisor receives an investment advisory fee, computed daily and paid monthly, based on each Fund’s average daily net assets at the following annual rates:
| | | |
| | | Annual Fee Rate | |
Money Fund | | 0.25 | % |
Core Bond Fund | | 0.65 | % |
High Yield Fund | | 0.80 | % |
Equity Opportunities Fund | | 0.75 | % |
Large Cap Growth Fund | | 0.75 | % |
Mid Cap Value and Restructuring Fund | | 0.65 | % |
Value and Restructuring Fund | | 0.60 | % |
Emerging Markets Fund | | 1.25 | % |
International Equity Fund | | 1.00 | % |
Administration Fee
Effective July 1, 2007, Columbia Management Advisors, LLC (“Columbia”) serves as the administrator of the Funds. Columbia is an indirect, wholly owned subsidiary of BOA. Prior to July 1, 2007, USTA and BISYS Fund Services Ohio, Inc. (“BISYS”) served as the administrators of the Funds under the same fee structure.
Columbia is entitled to an administration fee, computed daily and paid monthly, based on the combined aggregate average daily net assets of Excelsior Fund, the Trust and Excelsior Tax-Exempt Funds, Inc. (excluding Emerging Markets Fund, International Fund, International Equity Fund and Pacific/Asia Fund, series of Excelsior Fund or the Trust), at the following annual rates:
| | | |
Average Daily Net Assets | | Annual Fee Rate | |
First $200 million | | 0.200 | % |
Next $200 million | | 0.175 | % |
In excess of $400 million | | 0.150 | % |
Columbia is entitled to an administration fee, computed daily and paid monthly, at the annual rate of 0.20% of the average daily net assets of Emerging Markets Fund (a separate series of Excelsior Fund) and International Equity Fund (a separate series of the Trust), (collectively, the “international equity series”).
Effective September 17, 2007, Columbia received an administration fee at the annual rates listed above less the fees payable by the Funds as described under the Pricing and Bookkeeping Fees note below.
Effective July 1, 2007, Columbia voluntarily agreed to waive administration fees for each Fund at the annual rate of 0.05% of average daily net assets. Columbia, at its discretion, may revise or discontinue this arrangement at any time. For the six months ended September 30, 2007, the effective administration
76
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
fee rate before the reduction for pricing and bookkeeping fees and net of voluntary expense waivers, as a percentage of each Fund’s average daily net assets, was 0.13% for each Fund with the exception of the international equity series of Excelsior Fund and the Trust, which was 0.18%.
For the six months ended September 30, 2007, the total amounts paid and payable to affiliates by the Funds under these agreements were as follows:
| | | | | | |
| | | Amounts
Paid to
Affiliates | | Amounts
Payable to
Affiliates |
Money Fund | | $ | 661,350 | | $ | 76,191 |
Core Bond Fund | | | 305,789 | | | 36,851 |
High Yield Fund | | | 58,800 | | | 4,158 |
Equity Opportunities Fund | | | 209,320 | | | 24,218 |
Large Cap Growth Fund | | | 434,339 | | | 53,449 |
Mid Cap Value and Restructuring Fund | | | 195,276 | | | 21,615 |
Value and Restructuring Fund | | | 4,990,424 | | | 648,811 |
Emerging Markets Fund | | | 994,812 | | | 138,116 |
International Equity Fund | | | 56,041 | | | 5,700 |
Pricing and Bookkeeping Fees
Effective September 17, 2007, the Funds entered into a Financial Reporting Services Agreement (the “Financial Reporting Services Agreement”) with State Street Bank & Trust Company (“State Street”) and Columbia pursuant to which State Street provides financial reporting services to the Funds. Also effective September 17, 2007, the Funds entered into an Accounting Services Agreement with State Street and Columbia (collectively with the Financial Reporting Services Agreement, the “State Street Agreements”) pursuant to which State Street provides accounting services to the Funds. Under the State Street Agreements, each Fund pays State Street an annual fee of $38,000 paid monthly, plus a monthly fee based on an annualized percentage rate of average daily net assets of each Fund for the month. The aggregate fee for each Fund will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). The Funds also reimburse State Street for certain out-of-pocket expenses and charges.
Effective September 17, 2007, the Funds entered into a Pricing and Bookkeeping Oversight and Services Agreement (the “Services Agreement”) with Columbia. Under the Services Agreement, Columbia provides services related to Fund expenses and the requirements of the Sarbanes-Oxley Act of 2002, and provides oversight of the accounting and financial reporting services provided by State Street. The Funds reimburse Columbia for out-of-pocket expenses and direct internal costs relating to accounting oversight and for services relating to Fund expenses and the requirements of the Sarbanes-Oxley Act of 2002.
Prior to July 1, 2007, BISYS was responsible for providing fund accounting and financial reporting services to the Funds, and USTA was responsible for oversight of these functions. On July 1, 2007 Columbia assumed responsibility from USTA for oversight of the activities performed by BISYS. BISYS was responsible for providing services to the Funds through September 16, 2007.
77
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
For the six months ended September 30, 2007, the total amounts paid and payable to affiliates for each Fund under these agreements were $505 and $505, respectively.
Transfer Agent Fee
Effective September 17, 2007, Columbia Management Services, Inc. (the “Transfer Agent”), an affiliate of Columbia and an indirect, wholly owned subsidiary of BOA, provides shareholder services to the Funds and has contracted with Boston Financial Data Services (“BFDS”) to serve as sub-transfer agent. Prior to September 17, 2007, BFDS served as the transfer agent for the Funds’ shares.
The Transfer Agent is entitled to receive a fee for its services, paid monthly, at the annual rate of $17.00 per open account plus reimbursement of certain sub-transfer agent fees paid by the Transfer Agent (exclusive of BFDS fees), calculated based on assets held in omnibus accounts and intended to recover the cost of payments to other parties (including affiliates of BOA) for services to those accounts. The Transfer Agent pays the fees of BFDS for services as sub-transfer agent and is not entitled to reimbursement for such fees from the Funds. The Transfer Agent may also retain, as additional compensation for its services, fees for wire, telephone and redemption orders, IRA trustee agent fees and account transcript fees due the Transfer Agent from shareholders of the Funds and credits (net of bank charges) earned with respect to balances in accounts the Transfer Agent maintains in connection with its services to the Funds. The Transfer Agent also receives reimbursement for certain out-of-pocket expenses.
For the period September 17, 2007 through September 30, 2007, the total amounts paid and payable to affiliates by the Funds under this agreement were as follows:
| | | | | | |
| | | Amounts
Paid to
Affiliates | | Amounts
Payable to
Affiliates |
Money Fund | | $ | 1,059 | | $ | 1,059 |
Core Bond Fund | | | 4,165 | | | 4,165 |
High Yield Fund | | | 511 | | | 511 |
Equity Opportunities Fund | | | 413 | | | 413 |
Large Cap Growth Fund | | | 3,167 | | | 3,167 |
Mid Cap Value and Restructuring Fund | | | 3,057 | | | 3,057 |
Value and Restructuring Fund | | | 79,159 | | | 79,159 |
Emerging Markets Fund | | | 14,044 | | | 14,044 |
International Equity Fund | | | 10 | | | 10 |
Shareholder Servicing Fee
The Funds have entered into shareholder servicing agreements with various service organizations which include USTA. The Funds are permitted to pay a fee of up to 0.25%, (with the exception of the Institutional Shares of Money Fund which pays a fee of up to 0.15% of the average daily net assets of its shares), of the average daily net assets of the Funds’ shares held by each service organization’s customers to such organizations for providing shareholder and administrative services to their customers who hold shares of the Funds.
78
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
For the six months ended September 30, 2007, the total amounts paid and payable to affiliates by the Funds under these agreements were as follows:
| | | | | | |
| | | Amounts Paid
to Affiliates | | Amounts Payable
to Affiliates |
Money Fund | | $ | 738,244 | | $ | 118,478 |
Core Bond Fund | | | 242,575 | | | 40,453 |
High Yield Fund | | | 110,021 | | | 14,769 |
Equity Opportunities Fund | | | 365,923 | | | 61,307 |
Large Cap Growth Fund | | | 778,970 | | | 132,290 |
Mid Cap Value and Restructuring Fund | | | 245,599 | | | 38,544 |
Value and Restructuring Fund | | | 1,585,978 | | | 253,339 |
Emerging Markets Fund | | | 499,316 | | | 83,024 |
International Equity Fund | | | — | | | — |
Distribution and Service Fees
Effective September 17, 2007, Columbia Management Distributors, Inc. (the “Distributor”) serves as distributor of the Funds’ shares. Through July 31, 2007, BISYS Fund Services Limited Partnership (“BISYS Fund Services”) served as distributor of the Funds’ shares. On August 1, 2007, Foreside Distribution Services, L.P. served as distributor until September 16, 2007.
Certain Funds have adopted a Distribution Plan (the “Distribution Plan”), pursuant to Rule 12b-1 under the 1940 Act, which permits the Funds to compensate and/or reimburse the Distributor monthly for services that are intended to result in the sale of certain classes’ shares. High Yield Fund, Equity Opportunities Fund and Mid Cap Value and Restructuring Fund, which have adopted a Distribution Plan for the Shares Class of the Funds, may pay distribution fees in an amount not to exceed the annual rate of 0.25% of the average daily net assets applicable to each Fund’s Shares Class. Fees are not currently being paid under the Distribution Plan with respect to the Shares Class. Core Bond Fund, Large Cap Growth Fund, Mid Cap Value and Restructuring Fund and Value and Restructuring Fund, which have adopted a Distribution Plan for the Retirement Shares of the Funds, may pay distribution fees in an amount not to exceed the annual rate at 0.50% of the average daily net assets applicable to each Fund’s Retirement Shares.
The Funds have adopted a combined shareholder servicing and distribution plan for the Class A Shares of the Funds. Fees are calculated at an annual rate of 0.25% of the average daily net assets of the Class A Shares of each Fund. The Funds have also adopted a shareholder servicing plan and a Distribution Plan for the Class C Shares of the Funds. Fees are calculated at the annual rates of 0.25% and 0.75%, respectively, of the average daily net assets of the Class C Shares of each Fund.
Fees Paid to Officers and Trustees
The Board of Trustees/Directors may include people who are officers and/or trustees of other fund families affiliated with investment advisor. The Funds did not pay any of the interested persons for their
79
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
service as trustees/directors, but did pay non-interested persons (independent trustees), as noted in the Statements of Operations.
Expense Limits and Fee Waivers
The Advisor has contractually agreed to waive fees or reimburse expenses through July 31, 2008, so that the expenses incurred by each Fund (exclusive of brokerage commissions, interest, taxes and extraordinary expenses, but inclusive of custodial charges relating to overdrafts, if any) after giving effect to any balance credits from the Funds’ custodian, will not exceed the following annual rates, based on each Fund’s average daily net assets:
| | | | | | | | | | | | | | | |
| | | Institutional Shares | | | Shares | | | Class A Shares | | | Class C Shares | | | Retirement Shares | |
Money Fund | | 0.30 | % | | 0.55 | % | | — | | | — | | | — | |
Core Bond Fund | | 0.65 | % | | 0.90 | % | | — | | | — | | | 1.40 | % |
High Yield Fund | | 0.80 | % | | 1.05 | % | | — | | | — | | | — | |
Equity Opportunities Fund | | 0.80 | % | | 1.05 | % | | 1.16 | % | | 1.91 | % | | — | |
Large Cap Growth Fund | | 0.95 | % | | 1.20 | % | | 1.31 | % | | 2.06 | % | | 1.70 | % |
Mid Cap Value and Restructuring Fund | | 0.89 | % | | 1.14 | % | | — | | | — | | | 1.64 | % |
Value and Restructuring Fund | | 0.89 | % | | 1.14 | % | | 1.25 | % | | 2.00 | % | | 1.64 | % |
Emerging Markets Fund | | 1.60 | % | | 1.85 | % | | 1.96 | % | | 2.71 | % | | — | |
International Equity Fund | | 1.10 | % | | — | | | — | | | — | | | — | |
On June 12, 2006, High Yield Fund filed a lawsuit in connection with the bankruptcy of a security in which the Fund had invested. The ongoing legal expenses associated with the lawsuit are paid for by the Fund, but due to the expense limitation agreement currently in place, a significant portion of these legal expenses are being reimbursed by the Advisor. The Board has agreed that, should the Fund be successful in the lawsuit or otherwise receive compensation related to settling the case, the Advisor may request and receive reimbursement for such legal expenses that have been reimbursed to the Fund, to the extent that proceeds are available to cover such expenses. At this time, the outcome of the lawsuit cannot be determined.
Custody Credits
Each Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as a reduction of total expenses in the Statements of Operations. The Funds could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if they had not entered into such an agreement.
80
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
| Note 5. | Portfolio Information |
For the six months ended September 30, 2007, the cost of purchases and proceeds from sales of securities, excluding short-term obligations, were as follows:
| | | | | | | | | | | | |
| | | U.S. Government Securities | | Other Investment Securities |
| | | Purchases | | Sales | | Purchases | | Sales |
Core Bond Fund | | $ | 158,631,256 | | $ | 133,547,501 | | $ | 89,571,636 | | $ | 26,305,748 |
High Yield Fund | | | — | | | — | | | 26,290,368 | | | 43,102,055 |
Equity Opportunities Fund | | | — | | | — | | | 79,328,993 | | | 45,219,507 |
Large Cap Growth Fund | | | — | | | — | | | 206,389,492 | | | 178,370,279 |
Mid Cap Value and Restructuring Fund | | | — | | | — | | | 25,982,805 | | | 13,336,796 |
Value and Restructuring Fund | | | — | | | — | | | 957,697,128 | | | 419,229,579 |
Emerging Markets Fund | | | — | | | — | | | 104,328,781 | | | 116,919,241 |
International Equity Fund | | | — | | | — | | | 12,515,606 | | | 14,813,997 |
| Note 6. | Redemption In-Kind |
In certain circumstances, the Funds may distribute portfolio securities rather than cash as payment for redemption of a Fund’s shares (redemption in-kind). For financial reporting purposes, the Funds recognize a gain on the in-kind redemptions to the extent the value of the distributed securities on the date of redemption exceeds the cost of those securities; the Funds recognize a loss if cost exceeds value. Gains and losses realized on the redemptions in-kind are not recognized for tax purposes, and are reclassified from realized gain (loss) to paid-in capital in excess of par value.
Effective September 17, 2007, the Funds, with the exception of Money Fund, and other affiliated funds participate in a $150,000,000 uncommitted, unsecured line of credit provided by State Street. Borrowings are available for temporary or emergency purposes. Interest on the uncommitted line of credit is charged to each participating fund based on the fund’s borrowings at a variable rate per annum equal to the Federal Funds Rate plus a spread, as determined and quoted by State Street at the time of the request for a loan.
Prior to September 17, 2007, the Funds participated in a $150,000,000 uncommitted line of credit provided by JPMorgan Chase, under similar borrowing terms.
For the six months ended September 30, 2007, none of the Funds borrowed under these agreements.
81
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
Each Fund, with the exception of Money Fund and Core Bond Fund, may assess, subject to limited exceptions, a 2.00% redemption fee on shares that are redeemed within 60 days of their purchase. The redemption fees, which are retained by the Funds, are accounted for as an addition to paid-in capital and are allocated to each class based on the relative net assets at the time of the redemption. Prior to August 1, 2007, the redemption fee was assessed, subject to limited exceptions, on Fund shares redeemed within 30 days of their purchase. For the six months ended September 30, 2007, the Funds assessed redemption fees as follows:
| | | |
| | | Redemption
Fees |
Equity Opportunities Fund | | $ | 24 |
Large Cap Growth Fund | | | 8,815 |
Mid Cap Value and Restructuring Fund | | | 37 |
Value and Restructuring Fund | | | 15,915 |
Emerging Markets Fund | | | 3,071 |
| Note 9. | Concentration of Ownership |
82
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
As of September 30, 2007, several of the Funds had shareholders that held greater than 5% of the shares outstanding. Subscription and redemption activity of these accounts may have a significant effect on the operations of the Funds. The percentage of shares of beneficial interest outstanding held therein are as follows:
| | | | |
| | | Number of
Shareholders | | % of Shares
Outstanding
Held |
Money Fund | | 3 | | 81.9 |
Core Bond Fund | | 1 | | 61.1 |
High Yield Fund | | 2 | | 88.7 |
Equity Opportunities Fund | | 2 | | 94.7 |
Large Cap Growth Fund | | 2 | | 85.1 |
Mid Cap Value and Restructuring Fund | | 2 | | 74.2 |
Value and Restructuring Fund | | 3 | | 52.9 |
Emerging Markets Fund | | 2 | | 61.5 |
International Equity Fund | | 2 | | 82.5 |
| Note 10. | Significant Risks and Contingencies |
Foreign Securities
There are certain additional risks involved when investing in foreign securities that are not inherent with investments in domestic securities. These risks may involve foreign currency exchange rate fluctuations, adverse political and economic developments and the possible prevention of currency exchange or other foreign governmental laws or restrictions. In addition, the liquidity of foreign securities may be more limited than that of domestic securities.
Investments in emerging market countries are subject to additional risk. The risk of foreign investments is typically increased in less developed countries. These countries are also more likely to experience high levels of inflation, deflation or currency devaluation which could hurt their economies and securities markets.
High Yield Securities
Investing in high-yield securities may involve greater credit risk and considerations not typically associated with investing in U.S. Government bonds and other higher quality fixed income securities. These securities are non-investment grade securities, often referred to as “junk” bonds. Economic downturns may disrupt the high yield market and impair the ability of issuers to repay principal and interest. Also, an increase in interest rates would likely have an adverse impact on the value of such obligations. Moreover, high-yield securities may be less liquid to the extent that there is no established secondary market.
83
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
| Note 11. | Legal Proceedings |
United States Trust Company of New York and U.S. Trust Company, N.A. (formerly, co-investment advisers to the Funds, together referred to herein as “U.S. Trust Company”), Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc., and Excelsior Funds Trust (the “Companies”), The Charles Schwab Corporation and several individuals and third parties were named in four fund shareholder class actions and two derivative actions which alleged that U.S. Trust Company, the Companies, and others allowed certain parties to engage in illegal and improper mutual fund trading practices, which allegedly caused financial injury to the shareholders of certain of the Excelsior Funds advised by U.S. Trust Company. Each plaintiff seeks unspecified monetary damages and related equitable relief.
The class and derivative actions described above were transferred to the United States District Court for the District of Maryland for coordinated and consolidated pre-trial proceedings. In November 2005, the Maryland court dismissed many of the plaintiffs’ claims in both the class and derivative actions. The court entered implementing orders on February 24, 2006. All claims against the Companies have been dismissed. Plaintiffs’ claims against U.S. Trust Company and certain individuals under Sections 10(b) and 20(a) of the Securities Exchange Act and Sections 36(b) and 48(a) of the Investment Company Act, however, have not been dismissed. Plaintiffs’ Section 48(a) claims against parent entity U.S. Trust Company and former parent entity The Charles Schwab Corporation also remain.
While the ultimate outcome of these matters cannot be predicted with any certainty at this time, based on currently available information, U.S. Trust Company believes that the likelihood is remote that the pending litigation will have a material adverse financial impact on the Companies, or materially affect the advisers’ ability to provide investment management services to the Companies.
84
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
| Note 12. | Business Combinations and Mergers |
Under a plan of reorganization adopted by the Trust, all of the assets and liabilities of the Income Fund and Total Return Bond Fund were transferred to the Institutional Shares of the Core Bond Fund. The reorganization, which qualified as a tax-free exchange for federal income tax purposes, was completed at the close of business on September 27, 2006. The following is a summary of the shares outstanding, net assets, net asset value per share issued, and unrealized appreciation/depreciation immediately before and after the reorganization.
| | | | | | | | | | | | | |
| | | Before Reorganization | | After
Reorganization |
| | | Income Fund | | | Total Return
Bond Fund | | Core Bond
Fund | | Core Bond
Fund |
Shares: | | | | | | | | | | | | | |
Institutional Shares | | | 13,965,104 | | | | 18,165,949 | | | 1,824,521 | | | 26,973,187 |
Shares | | | — | | | | — | | | 32,810,661 | | | 32,810,661 |
Retirement Shares | | | — | | | | — | | | 117 | | | 117 |
Net Assets: | | | | | | | | | | | | | |
Institutional Shares | | $ | 96,434,781 | | | $ | 129,070,075 | | $ | 16,360,288 | | $ | 241,865,144 |
Shares | | | — | | | | — | | | 294,116,361 | | | 294,116,361 |
Retirement Shares | | | — | | | | — | | | 1,046 | | | 1,046 |
Net Asset Value: | | | | | | | | | | | | | |
Institutional Shares | | $ | 6.91 | | | $ | 7.11 | | $ | 8.97 | | $ | 8.97 |
Shares | | | — | | | | — | | | 8.96 | | | 8.96 |
Retirement Shares | | | — | | | | — | | | 8.97 | | | 8.97 |
Net unrealized appreciation (depreciation) | | $ | (248,669 | ) | | $ | 617,540 | | $ | 740,329 | | $ | 1,109,200 |
85
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
| Note 13. | Reorganization of the Funds |
The Boards of Directors/Trustees of Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust (the “Board”) have approved proposals, described below, that are part of a larger integration of the Excelsior Fund complex and the Columbia Funds complex. Generally, these proposals involve the reorganization of certain Excelsior Funds into newly formed Columbia Funds that will be series of a different legal entity governed by a different board than the Excelsior Funds, and will be managed by Columbia Management Advisors, LLC, an affiliate of the current advisers to the Excelsior Funds. The portfolio managers of the Excelsior Funds immediately before such reorganizations are expected to be the same portfolio managers of the newly formed Columbia Funds immediately after such reorganizations.
Specifically, the Board has approved proposals to reorganize each Excelsior Fund listed in the left column (each, an “Excelsior Fund”) into a corresponding newly formed shell fund listed in the right column below (each, a “Newly Formed Fund”) as shown in the chart below, subject to approval by the shareholders of the Excelsior Fund. If the shareholders of each Excelsior Fund approve the proposal relating to the reorganization of their Fund, all of the assets of the Excelsior Fund will be transferred to the corresponding Newly Formed Fund and shareholders of the Excelsior Fund will receive shares of a designated class of the corresponding Newly Formed Fund in exchange for their shares. For each Excelsior Fund, Shares class and Institutional Shares class, as applicable, will be exchanged for Class Z shares of the corresponding Newly Formed Fund, and Retirement Shares class, as applicable, will be exchanged for Class R shares of the corresponding Newly Formed Fund. Shareholders of each Excelsior Fund are scheduled to vote on the proposal relating to the reorganization of their Fund at a special meeting of shareholders currently expected to be held in the first quarter of 2008. Each reorganization is expected to take place as soon as reasonably practicable following approval at the special meeting.
| | |
Excelsior Fund | | Newly Formed Fund |
Blended Equity Fund | | Columbia Blended Equity Fund |
Emerging Markets Fund | | Columbia Emerging Markets Fund |
Energy and Natural Resources Fund | | Columbia Energy and Natural Resources Fund |
International Fund | | Columbia International Growth Fund |
Large Cap Growth Fund | | Columbia Select Growth Fund |
Pacific/Asia Fund | | Columbia Pacific/Asia Fund |
Small Cap Fund | | Columbia Select Small Cap Fund |
Value & Restructuring Fund | | Columbia Value and Restructuring Fund |
Core Bond Fund | | Columbia Bond Fund |
Intermediate-Term Bond Fund | | Columbia Short-Intermediate Bond Fund |
Equity Opportunities Fund | | Columbia Select Opportunities Fund |
Mid Cap Value & Restructuring Fund | | Columbia Mid Cap Value and Restructuring Fund |
The Board has also approved proposals, described below, that involve the reorganization of certain Excelsior Funds into Columbia Funds that are series of different legal entities governed by a different board than the Excelsior Funds, and are managed by Columbia Management Advisors, LLC.
86
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
Specifically, the Board has approved proposals to reorganize each Excelsior Fund listed in the left column (each, an “Acquired Fund”) into a corresponding acquiring fund listed in the right column below (each, an “Acquiring Fund”) as shown in the chart below, subject to approval by the shareholders of the Acquired Fund. If the shareholders of an Acquired Fund approve the proposal relating to the reorganization of their Fund, all of the assets of the Acquired Fund will be transferred to the corresponding Acquiring Fund and shareholders of the Acquired Fund will receive shares of a designated class of the corresponding Acquiring Fund in exchange for their shares. For each Acquired Fund, except the money market funds, Shares class and Institutional Shares class, as applicable, will be exchanged for Class Z shares of the corresponding Acquiring Fund, and Retirement Shares class, as applicable, will be exchanged for Class R shares of the corresponding Acquiring Fund. For each Acquired Fund that is a money market fund, Shares class and Institutional Shares class, as applicable, will be exchanged for Trust Class shares of the corresponding Acquiring Fund. Shareholders of each Acquired Fund are scheduled to vote on the proposal relating to the reorganization of their Fund at a special meeting of shareholders currently expected to be held in the first quarter of 2008, except for Intermediate-Term Tax-Exempt Fund and New York Intermediate-Term Tax-Exempt Fund which are currently expected to be held in the second quarter of 2008. Each reorganization is expected to take place as soon as reasonably practicable following approval at the special meeting.
| | |
Acquired Fund | | Acquiring Fund |
Equity Income Fund | | Columbia Dividend Income Fund |
Real Estate Fund | | Columbia Real Estate Equity Fund |
International Equity Fund | | International Fund |
Short-Term Government Securities Fund | | Columbia Short Term Bond Fund |
Short-Term Tax-Exempt Securities Fund | | Columbia Short Term Municipal Bond Fund |
High Yield Fund | | Columbia High Yield Opportunity Fund |
Long-Term Tax-Exempt Fund | | Columbia Tax-Exempt Fund |
Intermediate-Term Tax-Exempt Fund | | Columbia Intermediate Municipal Bond Fund |
New York Intermediate-Term Tax-Exempt Fund | | Columbia New York Intermediate Municipal Bond Fund |
| California Short-Intermediate Term Tax-Exempt Income Fund | | Columbia California Intermediate Municipal Bond Fund |
Treasury Money Fund | | Columbia Government Reserves |
Government Money Fund | | Columbia Government Plus Reserves |
Money Fund | | Columbia Cash Reserves |
Tax-Exempt Money Fund | | Columbia Tax-Exempt Reserves |
New York Tax-Exempt Money Fund | | Columbia New York Tax-Exempt Reserves |
87
APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party to the advisory agreement (the “Independent Directors”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s board of directors or trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the advisory agreement. In addition, the Securities and Exchange Commission (the “SEC”) takes the position that, as part of their fiduciary duties with respect to fund fees, fund boards are required to evaluate the material factors applicable to a decision to approve an investment advisory agreement.
At a meeting held on September 27th and 28th 2007, the Board of Directors/Trustees (the “Board”) of Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust (each a “Company” and, together, the “Companies”), including a majority of the Independent Directors, approved the continuation of the Investment Advisory Agreements (the “Advisory Agreements”) by and between each Company and UST Advisers, Inc. and U.S. Trust New York Asset Management Division, a division of United States Trust Company, National Association (together, “U.S. Trust”) with respect to each series of each Company (each, a “Fund”).
In preparation for the meeting, the Board requested and reviewed a wide variety of materials provided by U.S. Trust and its affiliates, which included information about the operations and personnel of U.S. Trust, as well as the personnel and operations of its affiliates. In this regard, the Board received information about the large mutual fund business of Columbia Management Advisors, LLC and its affiliates (together, “Columbia”), which are, together with U.S. Trust, all under the control of Bank of America Corporation, and how the resources dedicated to the Columbia mutual fund business affect the Funds. The Board also received extensive information that was provided by or derived from information prepared by third parties. This information is in addition to the detailed information about the Funds that the Board reviews during the course of each year, including information that relates to Fund operations and Fund performance. The Board also received a memorandum from counsel regarding the responsibilities of the Board for the approval of the Advisory Agreements. In addition, the Independent Directors received advice from independent counsel to the Independent Directors, met in executive session outside the presence of Company management and U.S. Trust personnel and participated in question and answer sessions with representatives of U.S. Trust.
The Board’s approval of the continuation of the Advisory Agreements was based on the consideration and evaluation of the information and material provided to the Board and a variety of specific factors discussed at the meetings, including:
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by U.S. Trust to the Funds under the Advisory Agreements and the resources of U.S. Trust and their affiliates, including Columbia, dedicated to the Funds. In this regard, the Board evaluated, among other things, U.S. Trust’s personnel, experience, performance history of various products, and compliance program. The Board considered that U.S. Trust and Columbia provide
88
APPROVAL OF INVESTMENT ADVISORY AGREEMENTS (Continued)
substantial administrative, accounting and compliance services and provide oversight of third party service providers to the Funds. The Board considered representations of U.S. Trust that U.S. Trust and Columbia have allocated substantial resources and personnel, and have made significant financial expenditures and commitments, to the investment management and other operations of the Funds. The Board also considered the nature and quantity of additional resources that have been dedicated to the operations of the Funds since U.S. Trust had become affiliated with Columbia. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services to be provided by U.S. Trust to the Funds and the resources of the U.S. Trust and its affiliates dedicated to the Funds supported the renewal of the Advisory Agreements.
Fund Performance. The Board considered Fund performance in determining whether to renew the Advisory Agreements. Specifically, the Board considered each Fund’s performance relative to a peer group of other mutual funds and appropriate indices/benchmarks, in light of total return, yield and market trends. As part of this review, the Board considered the composition of the peer groups, selection criteria and the reputation of third party providers who provided data for the peer group analysis. In evaluating the performance of each Fund, the Board considered both market risk and shareholder risk expectations for such Fund and whether, irrespective of relative performance, each Fund’s absolute performance was consistent with expectations for its investment methodology. The Board further considered the level of Fund performance in the context of its review of Fund expenses and U.S. Trust’s profitability discussed below. In the case of each Fund that had performance that lagged that of a relevant peer group for certain (although not necessarily all) periods considered, the Board concluded that other factors relevant to performance supported renewal of the Advisory Agreements. These factors varied from Fund to Fund, but included one or more of the following: (1) that the Fund’s performance, although lagging in certain recent periods, was strong over the longer term; (2) that the underperformance was attributable, to a significant extent, to investment decisions by U.S. Trust that were reasonable and consistent with the Fund’s investment objective and policies; (3) that each Fund’s performance was competitive when compared to other relevant performance benchmarks or peer groups; and (4) that U.S. Trust has taken or is taking steps designed to help improve the Fund’s investment performance. Following such evaluation, the Board concluded, within the context of its full deliberations, that the performance of the Funds supported the renewal of the Advisory Agreements.
Fund Expenses. With respect to the Funds’ expenses, the Board considered the rate of compensation called for by the Advisory Agreements, and each Fund’s net operating expense ratio, in each case, in comparison to those of other comparable mutual funds, such peer groups and comparisons having been selected and calculated based on objective factors. The Board noted that with respect to the Funds, U.S. Trust had contractually committed to waive a portion of its fee and/or reimburse the Funds for a portion of their expenses to limit the Funds’ total operating expenses. In evaluating this information, the Board considered the nature and scope of services provided to the Funds. The Board also reviewed the fees charged by U.S. Trust to provide advisory services to other types of accounts with substantially similar investment objectives as the Funds and the differences in services and risks involved in managing such other accounts, including differences relating to compliance and regulatory burdens. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported the renewal of the Advisory Agreements.
89
APPROVAL OF INVESTMENT ADVISORY AGREEMENTS (Continued)
Profitability. With regard to profitability, the Board considered the compensation flowing to U.S. Trust and its affiliates, directly or indirectly. In this connection, the Board reviewed management’s profitability analyses. The Board also considered any other benefits derived by U.S. Trust from its relationship with the Funds, such as whether, by virtue of its management of the Funds, it obtains investment information or other research resources that aid it in providing advisory services to other clients. With respect to U.S. Trust and its affiliates, the Board considered whether the varied levels of compensation and profitability under the Advisory Agreements and other service agreements were reasonable and justified in light of the quality of all services rendered to the Funds. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of U.S. Trust is reasonable and supported the renewal of the Advisory Agreements.
Economies of Scale. The Board considered the existence of any economies of scale and whether those economies are passed along to a Fund’s shareholders through a graduated investment advisory fee schedule or other means, including any fee waivers by U.S. Trust. In this regard, and consistent with their consideration of fund expenses, the Board considered that U.S. Trust has previously committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer Funds or Funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such Funds at subsidized expense levels. The Board also reviewed asset flows in the Funds, noting that a relatively few number of Funds had experienced significant asset growth, while most of the Funds had experienced only moderate growth, if any. After reviewing such information, the Board determined not to seek advisory fee breakpoints at this time. The Board noted that it would continue to monitor the growth in assets of the Funds as compared to expenses and asked U.S. Trust and Columbia to continue to monitor the Funds’ expenses and asset sizes in connection with determining when economies of scale would dictate that advisory fee breakpoints were advisable.
Based on the Board’s deliberations and their evaluation of the information described above, the Board, including all of the Independent Directors, unanimously approved the continuation of the Advisory Agreements and concluded that the compensation under the Advisory Agreements is fair and reasonable in light of the services and expenses and such other matters as the Board considered to be relevant in the exercise of their reasonable judgment. In the course of their deliberations, the Board did not identify any particular information or factor that was all-important or controlling.
90
[THIS PAGE INTENTIONALLY LEFT BLANK]
91
[THIS PAGE INTENTIONALLY LEFT BLANK]
92
PROXY VOTING RESULTS
A Special Meeting of Shareholders of Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust and each of their Funds was held on March 30, 2007, for the purpose of seeking shareholder approval of the following proposal: to approve new investment advisory agreements by and among USTA, USTNA and the Companies, on behalf of the Funds. The Special Meeting for Excelsior Funds with respect to the Value and Restructuring Fund, Energy and Natural Resources and Treasury Money Funds was adjourned for the purpose of soliciting additional proxies, and subsequently held on April 30, 2007. The number of votes necessary to conduct the Special Meetings and approve the proposal was obtained. The results of the votes of shareholders are listed below:
EXCELSIOR FUNDS, INC.
| | | | | | |
Fund | | For | | Against | | Abstain |
Value and Restructuring Fund | | 71,659,202.229 | | 1,308,059.398 | | 2,313,244.343 |
Energy and Natural Resources Fund | | 10,149,963.059 | | 261,710.922 | | 349,760.892 |
Treasury Money Fund | | 147,661,994.420 | | 8,327.040 | | 953,491.100 |
IMPORTANT INFORMATION ABOUT THIS REPORT
Excelsior Institutional Shares
The funds mail one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 1-800-345-6611 and additional reports will be sent to you. This report has been prepared for shareholders of Excelsior Institutional Shares.
A description of the policies and procedures that each fund uses to determine how to vote proxies and a copy of each fund’s voting records are available (i) on the Securities and Exchange Commission’s website at www.sec.gov, and (ii) without charge, upon request, by calling 1-800-368-0346. Information regarding how each fund voted proxies relating to portfolio securities during the 12-month period ended June 30 is available from the SEC’s website. Information regarding how each fund voted proxies relating to portfolio securities is also available from the funds’ website.
Each fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Each fund’s Form N-Q is available on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Please consider the investment objectives, risks, charges and expenses for a fund carefully before investing. Contact your financial advisor for a prospectus, which contains this and other important information about a fund. You should read it carefully before you invest.
United States Trust Company, National Association, through its separate identifiable division, U.S. Trust New York Asset Management Division (“USTNA”), or UST Advisers, Inc. (“USTA” and together with USTNA, the “Advisor”) is the investment advisor to the Funds. USTNA is a wholly owned subsidiary of U.S. Trust Corporation (“U.S. Trust”). USTA is a wholly owned subsidiary of USTNA. Excelsior Funds are distributed by Columbia Management Distributors, Inc., member of FINRA, SIPC, part of Columbia Management. USTA, USTNA and Columbia Management Distributor, Inc. are affiliates of Bank of America Corporation.
93
©2007 Columbia Management Distributors, Inc.
One Financial Center, Boston, MA 02111-2621
800-345-6611 www.columbiafunds.com
SHC-44/136312-0907 (11/07) 07/46194
RETIREMENT SHARES
CORE BOND FUND
EQUITY INCOME FUND
LARGE CAP GROWTH FUND
MID CAP VALUEAND RESTRUCTURING FUND
SMALL CAP FUND
VALUEAND RESTRUCTURING FUND
SEMI ANNUAL REPORT
September 30, 2007
| | |
| NOT FDIC INSURED | | May Lose Value |
| NOT BANK ISSUED | | No Bank Guarantee |
TABLE OF CONTENTS
The views expressed in this report reflect the current views of the respective parties. These views are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict so actual outcomes and results may differ significantly from the views expressed. These views are subject to change at any time based upon economic, market or other conditions and the respective parties disclaim any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for an Excelsior Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any particular Excelsior Fund. References to specific securities should not be construed as a recommendation or investment advice.
Investments in equity securities are subject to sudden and unpredictable drops in value and periods of lackluster performance.
Funds which concentrate their investments in one economic sector or geographical region may expose an investor to greater volatility. When used as part of a broader investment portfolio, these funds may serve to reduce overall portfolio volatility. Currency fluctuations, differences in security regulation, financial accounting standards, and foreign taxation regulations are among the risks associated with foreign investing, as well as political risk. Investing in emerging markets may accentuate these risks.
Small-cap stocks may be less liquid and subject to greater price volatility.
Value-based investments are subject to the risk that the broad market may not recognize their intrinsic value.
Investments in fixed income securities are subject to interest rate risks. The principal value of a bond falls when interest rates rise and rises when interest rates fall. During periods of rising interest rates, the value of a bond investment is at greater risk than during periods of stable or falling rates.
LETTER TO SHAREHOLDERS
Dear Shareholder:
Allow me to take this opportunity to formally welcome you to the Columbia Funds family. In July, U.S. Trust Advisors was acquired by Bank of America (parent company of Columbia Management Group). The Excelsior Funds are now distributed by Columbia Management Distributors, Inc. The combined organization is committed to delivering unparalleled wealth management solutions and building deep, lasting relationships with our shareholders.
Your Excelsior Funds account will be serviced by Columbia Management Services, Inc., an experienced service provider in the industry. This team will process transactions, generate account statements and support your ongoing servicing needs.
As we complete the integration over the next several months, you will gain access to a broad array of investment choices including money market investments, mutual funds and 529 plans. Throughout this period of change, our goal is to ensure a smooth transition and provide services that we hope will exceed your expectations. We recommend you visit our website: www.columbiafunds.com for more information about our products and services. Those of you who receive your statements directly from Columbia Management can also register for on-line account access, which allows you to check your account balance, change your distribution options and make other account transactions. If you receive statements from your brokerage firm, please check with your financial advisor for service availability.
There’s a lot to know about Columbia Management
With $709.9 billion under management and a history that dates to the early 1900s, Columbia Management and its affiliates make up one of the nation’s largest and most experienced asset management companies.1 We offer a comprehensive array of investment solutions, including equity, fixed-income and cash strategies. Our diverse investment solutions and our focus on the needs of our clients make Columbia Management the advisor of choice for individual, institutional and high-net-worth investors.
Welcome to Columbia Management. Thank you for your business — we’re pleased to have you as a customer.
Sincerely,
Christopher L. Wilson
President, Excelsior Funds
2
About Christopher L. Wilson
Chris Wilson is head of mutual funds for Columbia Management, responsible for the day-to-day delivery of mutual fund products and services to the firm’s investors. With the exception of distribution, Mr. Wilson oversees all aspects of the mutual fund services operation including treasury, investment accounting, product development and shareholder and broker services. Mr. Wilson serves as Columbia Management’s chief liaison to the mutual fund boards of trustees. He joined Columbia Management in 2004 and has been a member of the investment community since 1980.
Columbia Management Group, LLC (“Columbia Management”) is the investment management arm of Bank of America Corporation. Columbia Management entities furnish investment management services and products for institutional and individual investors. Excelsior Funds are distributed by Columbia Management Distributors, Inc., member FINRA and SIPC. Columbia Management Distributors, Inc. is part of Columbia Management and an affiliate of Bank of America Corporation.
1 | Columbia Management and its affiliates comprise the wealth and investment management division of Bank of America Corporation. As of September 30, 2007, Columbia Management and its affiliates managed assets of $709.9 billion. Columbia Management and its affiliates’ managed assets consist of assets under the discretionary management of the registered investment advisors, Columbia Management Advisors, LLC ($377.9 billion), Columbia Wanger Asset Management, L.P. ($38.5 billion) and Marsico Capital Management, LLC ($103.4 billion); U.S. Trust, Bank of America Private Wealth Management; Banc of America Investment Services, Inc.; Banc of America Investment Advisors, Inc.; Bank of America Capital Advisors, LLC; Premier Banking & Investments, and United States Trust, National Association, including its subsidiary, UST Advisers, Inc. ($116.5 billion). |
3
Understanding Your Expenses — Core Bond Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the end of the period ($) | | Expenses paid during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | |
Retirement Shares | | 1,000.00 | | 1,000.00 | | 1,018.20 | | 1,018.00 | | 7.06 | | 7.06 | | 1.40 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
4
Understanding Your Expenses — Equity Income Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | |
Retirement Shares | | 1,000.00 | | 1,000.00 | | 1,060.50 | | 1,017.00 | | 8.24 | | 8.07 | | 1.60 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
5
Understanding Your Expenses — Large Cap Growth Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | |
Retirement Shares | | 1,000.00 | | 1,000.00 | | 1,143.50 | | 1,016.55 | | 9.06 | | 8.52 | | 1.69 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
6
Understanding Your Expenses — Mid Cap Value and Restructuring Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | |
Retirement Shares | | 1,000.00 | | 1,000.00 | | 1,074.90 | | 1,016.90 | | 8.40 | | 8.17 | | 1.62 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
7
Understanding Your Expenses — Small Cap Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | |
Retirement Shares | | 1,000.00 | | 1,000.00 | | 1,086.40 | | 1,016.50 | | 8.87 | | 8.57 | | 1.70 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
8
Understanding Your Expenses — Value and Restructuring Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period:
| • | | For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.345.6611. |
| • | | For shareholders who receive their account statements from their financial intermediary, contact your financial intermediary to obtain your account balance. |
| 1. | Divide your ending account balance by $1,000.00. For example, if your account balance was $8,600.00 at the end of the period, the result would be 8.6. |
| 2. | In the section of the table below titled “Expenses paid during the period,” locate the amount for the class. You will find this number in the column labeled “actual.” Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. |
As a fund shareholder, you incur two types of costs. There are transaction costs and ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees and other fund expenses. The information on this page is intended to help you understand the ongoing costs of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
Analyzing your fund’s expenses
To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the class during the period. The information in the following table is based on an initial investment of $1,000.00, which is invested at the beginning of the reporting period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the “actual” column is calculated using the fund’s actual operating expenses and total return for the period. The amount listed in the “hypothetical” column for the class assumes that the return each year is 5% before expenses and is calculated based on the fund’s actual operating expenses. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during this reporting period.
Compare with other funds
Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing costs of investing in the fund with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the ongoing costs of investing in a fund and do not reflect any transaction costs, such as sales charges, redemption fees or exchange fees.
| | | | | | | | | | | | | | |
| | | Account value at the
beginning of the period ($) | | Account value at the
end of the period ($) | | Expenses paid
during the period ($) | | Fund’s annualized
expense ratio (%) |
| | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual | | Hypothetical | | Actual |
(04/01/07 – 09/30/07) | | | | | | |
Retirement Shares | | 1,000.00 | | 1,000.00 | | 1,080.60 | | 1,017.30 | | 8.01 | | 7.77 | | 1.54 |
Expenses paid during the period are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, then multiplied by the number of days in the fund’s most recent fiscal half-year and divided by 366.
Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, account value at the end of the period would have been reduced.
It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the fund. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning shares of different funds. If these transaction costs were included, your costs would have been higher.
9
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Core Bond Fund
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | ASSET-BACKED SECURITIES — 2.34% |
| $ | 4,200,000 | | Capital Auto Receivables Asset Trust, 2006-SN1A B(a) | | 5.50 | % | | 04/20/10 | | $ | 4,189,576 |
| | 2,015,000 | | Capital Auto Receivables Asset Trust, 2007-3 A4 | | 5.00 | | | 03/17/14 | | | 2,020,575 |
| | 6,765,000 | | Citibank Credit Card Issuance Trust, 2003-A10 | | 4.75 | | | 12/10/15 | | | 6,588,500 |
| | | | | | | | | | | |
| | | TOTAL ASSET-BACKED SECURITIES (Cost $12,779,089) | | | 12,798,651 |
| | | | | | | | | | | |
| | COLLATERALIZED MORTGAGE OBLIGATIONS — 6.99% |
| | | NON-GOVERNMENTAL AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS — 6.00% |
| | 435,193 | | Bear Stearns Adjustable Rate Mortgage Trust, 2004-10 15A1(b) | | 4.60 | | | 01/25/35 | | | 433,167 |
| | 1,794,354 | | Citigroup Mortgage Loan Trust, 2004-HYB4 WA(b) | | 4.45 | | | 12/25/34 | | | 1,768,065 |
| | 1,671,274 | | Countrywide Alternative Loan Trust, 2004-16CB 1A2 | | 6.00 | | | 10/25/34 | | | 1,655,085 |
| | 2,550,697 | | Countrywide Alternative Loan Trust, 2004-22CB 1A1 | | 5.50 | | | 07/25/34 | | | 2,529,217 |
| | 6,648,497 | | Indymac Index Mortgage Loan Trust, 2004-AR4 3A(b) | | 4.70 | | | 08/25/34 | | | 6,659,512 |
| | 7,238,080 | | JP Morgan Mortgage Trust, 2005-A6 1A1(b) | | 5.14 | | | 09/25/35 | | | 7,153,469 |
| | 10,195,682 | | Wells Fargo Mortgage Backed Securities Trust, 2004-EE 3A1(b) | | 3.99 | | | 12/25/34 | | | 10,079,593 |
| | 2,647,086 | | Wells Fargo Mortgage Backed Securities Trust, 2005-AR1 1A1(b) | | 4.54 | | | 02/25/35 | | | 2,616,011 |
| | | | | | | | | | | |
| | | | | | | | | | | 32,894,119 |
| | | | | | | | | | | |
| | | FEDERAL HOME LOAN MORTGAGE
CORPORATION — 0.43% |
| | 2,306,295 | | 2333 UZ | | 6.50 | | | 07/15/31 | | | 2,340,141 |
| | | | | | | | | | | |
| | | FEDERAL NATIONAL MORTGAGE
ASSOCIATION — 0.56% |
| | 3,080,000 | | 2003-17 QT | | 5.00 | | | 08/25/27 | | | 3,075,934 |
| | | | | | | | | | | |
| | | TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $38,670,456) | | | 38,310,194 |
| | | | | | | | | | | |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | COMMERCIAL MORTGAGE-BACKED SECURITIES — 16.60% |
| $ | 4,225,000 | | Asset Securitization Corp., 1997-D4 A4(b) | | 8.07 | % | | 04/14/29 | | $ | 4,397,171 |
| | 2,497,000 | | Bank of America Commercial Mortgage, Inc., 2004-1 A4 | | 4.76 | | | 11/10/39 | | | 2,409,425 |
| | 5,000,000 | | Bear Stearns Commercial Mortgage Securities, 2006-PW13 A3 | | 5.52 | | | 09/11/41 | | | 5,006,421 |
| | 1,000,000 | | Credit Suisse First Boston Mortgage Securities Corp., 2002-CKS4
G(a)(b) | | 6.01 | | | 11/15/36 | | | 983,412 |
| | 6,775,000 | | GE Capital Commercial Mortgage Corp., 2000-1 Cl(b) | | 6.73 | | | 01/15/33 | | | 7,110,024 |
| | 1,781,000 | | GMAC Commercial Mortgage Securities, 1999-C1(b) | | 7.06 | | | 05/15/33 | | | 1,821,061 |
| | 3,449,000 | | Greenwich Capital Commercial Funding Corp., 2004-GG1 A1(b) | | 5.32 | | | 06/10/36 | | | 3,425,221 |
| | 13,080,000 | | GS Mortgage Securities Corp. II, 2007-GG10 A4(b) | | 5.99 | | | 08/10/45 | | | 13,302,550 |
| | 5,700,000 | | Merrill Lynch/Countrywide Commercial Mortgage Trust, 2007-8 A3(b) | | 6.16 | | | 08/12/49 | | | 5,838,328 |
| | 3,150,000 | | Morgan Stanley Dean Witter Capital I, 2000-LIF2 C(b) | | 7.50 | | | 10/15/33 | | | 3,362,340 |
| | 1,245,000 | | Morgan Stanley Dean Witter Capital I, 2003-TOP9 A2 | | 4.74 | | | 11/13/36 | | | 1,215,146 |
| | 5,571,000 | | Nomura Asset Securities Corp., 1998-D6 A4(b) | | 7.62 | | | 03/15/30 | | | 6,286,130 |
| | 4,225,000 | | Wachovia Bank Commercial Mortgage Trust, 2002- C1 A4 | | 6.29 | | | 04/15/34 | | | 4,408,559 |
| | 3,601,000 | | Wachovia Bank Commercial Mortgage Trust, 2003-C9 A3 | | 4.61 | | | 12/15/35 | | | 3,551,734 |
| | 6,099,000 | | Wachovia Bank Commercial Mortgage Trust, 2004-C12 A2 | | 5.00 | | | 07/15/41 | | | 6,091,863 |
See Notes to Financial Statements.
10
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Core Bond Fund — (continued)
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | COMMERCIAL MORTGAGE-BACKED SECURITIES — (continued) |
| $ | 3,905,000 | | Wachovia Bank Commercial Mortgage Trust, 2004-C12 A3(b) | | 5.23 | % | | 07/15/41 | | `$ | 3,908,339 |
| | 17,926,000 | | Wachovia Bank Commercial Mortgage Trust, 2005-C20 A5(b) | | 5.09 | | | 07/15/42 | | | 17,834,208 |
| | | | | | | | | | | |
| | | TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES
(Cost $91,058,408) | | | 90,951,932 |
| | | | | | | | | | | |
| | CORPORATE BONDS — 18.56% | | | |
| | 2,615,000 | | America Movil S.A. de C.V. | | 5.50 | | | 03/01/14 | | | 2,577,595 |
| | 5,700,000 | | Bank One Corp. | | 7.88 | | | 08/01/10 | | | 6,098,567 |
| | 6,000,000 | | Barclays Bank PLC(a)(b) | | 5.93 | | | 12/31/49 | | | 5,692,542 |
| | 1,620,000 | | Bear Stearns Co., Inc. | | 5.70 | | | 11/15/14 | | | 1,586,030 |
| | 5,520,000 | | Bottling Group LLC | | 5.50 | | | 04/01/16 | | | 5,527,397 |
| | 2,300,000 | | British Telecommunications PLC | | 9.13 | | | 12/15/30 | | | 3,045,665 |
| | 2,715,000 | | Caterpillar Financial Services Corp. | | 5.85 | | | 09/01/17 | | | 2,739,723 |
| | 265,000 | | Caterpillar, Inc. | | 5.70 | | | 08/15/16 | | | 264,432 |
| | 5,715,000 | | Citigroup, Inc. | | 5.25 | | | 02/27/12 | | | 5,713,794 |
| | 2,600,000 | | Comcast Cable Holdings LLC | | 9.80 | | | 02/01/12 | | | 3,009,373 |
| | 1,441,000 | | Daimler Chrysler N.A. Holding Corp. | | 7.20 | | | 09/01/09 | | | 1,492,657 |
| | 2,000,000 | | Deutsche Telekom International Finance | | 5.38 | | | 03/23/11 | | | 2,000,464 |
| | 1,310,000 | | Deutsche Telekom International Finance, Multi-Coupon Bond | | 8.00 | | | 06/15/10 | | | 1,403,247 |
| | 1,500,000 | | Deutsche Telekom International Finance, Multi-Coupon Bond | | 8.25 | | | 06/15/30 | | | 1,836,244 |
| | 1,700,000 | | Ford Motor Credit Co. | | 8.63 | | | 11/01/10 | | | 1,685,319 |
| | 1,400,000 | | General Electric Capital Corp. | | 5.00 | | | 11/15/11 | | | 1,393,676 |
| | 1,695,000 | | General Electric Capital Corp. | | 5.88 | | | 02/15/12 | | | 1,739,592 |
| | 2,995,000 | | General Electric Capital Corp. | | 6.00 | | | 06/15/12 | | | 3,088,279 |
| | 2,710,000 | | General Mills, Inc. | | 5.65 | | | 09/10/12 | | | 2,734,127 |
| | 1,185,000 | | Georgia Power Co. | | 5.70 | | | 06/01/17 | | | 1,184,983 |
| | 5,834,000 | | HSBC Finance Corp. | | 8.00 | | | 07/15/10 | | | 6,260,979 |
| | 2,000,000 | | Morgan Stanley | | 6.75 | | | 04/15/11 | | | 2,090,260 |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| | CORPORATE BONDS — (continued) | | | |
| $ | 685,000 | | Nisource Finance Corp. | | 5.25 | % | | 09/15/17 | | $ | 635,762 |
| | 3,825,000 | | Oracle Corp. | | 5.25 | | | 01/15/16 | | | 3,724,552 |
| | 1,441,000 | | Prudential Financial, Inc. | | 5.10 | | | 09/20/14 | | | 1,389,125 |
| | 4,500,000 | | RBS Capital Trust III(b)(c) | | 5.51 | | | 09/29/49 | | | 4,210,375 |
| | 1,670,000 | | Sprint Capital Corp. | | 8.75 | | | 03/15/32 | | | 1,915,054 |
| | 4,100,000 | | Target Corp. | | 5.88 | | | 07/15/16 | | | 4,099,832 |
| | 2,183,000 | | Time Warner Cos., Inc. | | 7.25 | | | 10/15/17 | | | 2,322,247 |
| | 5,000,000 | | UBS Preferred Funding Trust I(b) | | 8.62 | | | 10/29/49 | | | 5,430,315 |
| | 1,600,000 | | UnitedHealth Group, Inc.(a) | | 6.00 | | | 06/15/17 | | | 1,598,685 |
| | 3,050,000 | | Virginia Electric & Power Co. | | 5.95 | | | 09/15/17 | | | 3,045,581 |
| | 1,735,000 | | Wal Mart Stores, Inc. | | 5.00 | | | 04/05/12 | | | 1,719,763 |
| | 2,441,000 | | Wal-Mart Stores, Inc. | | 4.13 | | | 02/15/11 | | | 2,371,334 |
| | 5,350,000 | | Wells Fargo & Co. | | 5.00 | | | 11/15/14 | | | 5,156,892 |
| | 950,000 | | Xerox Corp. | | 6.40 | | | 03/15/16 | | | 961,751 |
| | | | | | | | | | | |
| | | TOTAL CORPORATE BONDS (Cost $101,964,345) | | | 101,746,213 |
| | | | | | | | | | | |
| | TAX-EXEMPT SECURITY — 0.31% | | | |
| | 1,590,000 | | Massachusetts Bay Transportation Authority, Massachusetts Sales Tax, Revenue Bonds, Series A | | 5.00 | | | 07/01/31 | | | 1,712,414 |
| | | | | | | | | | | |
| | | TOTAL TAX-EXEMPT SECURITY (Cost $1,751,974) | | | 1,712,414 |
| | | | | | | | | | | |
| | U.S. GOVERNMENT AGENCY BONDS & NOTES — 0.97% |
| | | FREDDIE MAC — 0.51% |
| | 2,440,000 | | | | 6.25 | | | 07/15/32 | | | 2,772,208 |
| | | | | | | | | | | |
| | | RESOLUTION FUNDING
CORPORATION — 0.46% |
| | 4,851,000 | | Principal Only STRIPS(d) | | 0.00 | | | 07/15/20 | | | 2,541,614 |
| | | | | | | | | | | |
| | | TOTAL U.S. GOVERNMENT AGENCY BONDS & NOTES
(Cost $5,007,684) | | | 5,313,822 |
| | | | | | | | | | | |
| U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH
SECURITIES — 41.62% |
| | | FEDERAL HOME LOAN MORTGAGE
CORPORATION — 10.35% |
| | 6,057,871 | | Pool # 1G1898 ARM(b) | | 5.88 | | | 06/01/36 | | | 6,094,407 |
| | 2,387,637 | | Pool # A20105 | | 5.00 | | | 04/01/34 | | | 2,283,536 |
| | 8,977,710 | | Pool # A47411 | | 4.50 | | | 10/01/35 | | | 8,341,565 |
| | 2,071,262 | | Pool # A48132 | | 7.00 | | | 12/01/35 | | | 2,139,598 |
| | 1,987,638 | | Pool # A58455 | | 5.50 | | | 03/01/37 | | | 1,946,266 |
See Notes to Financial Statements.
11
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Core Bond Fund — (continued)
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH
SECURITIES — (continued) |
| | | FEDERAL HOME LOAN MORTGAGE
CORPORATION — (continued) |
| $ | 5,209,078 | | Pool # B19861 | | 4.50 | % | | 08/01/20 | | $ | 5,014,833 |
| | 2,583,561 | | Pool # C01811 | | 5.00 | | | 04/01/34 | | | 2,470,917 |
| | 129,482 | | Pool # C71221 | | 5.00 | | | 09/01/32 | | | 124,110 |
| | 18,495 | | Pool # C74339 | | 5.00 | | | 12/01/32 | | | 17,727 |
| | 160,127 | | Pool # C74469 | | 5.00 | | | 12/01/32 | | | 153,483 |
| | 31,925 | | Pool # C74676 | | 5.00 | | | 12/01/32 | | | 30,601 |
| | 2,134,641 | | Pool # E96460 | | 5.00 | | | 05/01/18 | | | 2,098,354 |
| | 4,327,452 | | Pool # G01842 | | 4.50 | | | 06/01/35 | | | 4,020,816 |
| | 16,863,586 | | Pool # G18105 | | 5.00 | | | 03/01/21 | | | 16,534,190 |
| | 2,322,051 | | Pool # J01383 | | 5.50 | | | 03/01/21 | | | 2,315,556 |
| | 3,243,972 | | Pool # J02497 | | 4.50 | | | 09/01/20 | | | 3,123,006 |
| | | | | | | | | | | |
| | | | | | | | | | | 56,708,965 |
| | | | | | | | | | | |
| | | FEDERAL NATIONAL MORTGAGE
ASSOCIATION — 29.41% |
| | 177,052 | | Pool # 251502 | | 6.50 | | | 02/01/13 | | | 181,844 |
| | 75,060 | | Pool # 252806 | | 7.50 | | | 10/01/29 | | | 78,688 |
| | 1,093,661 | | Pool # 255896 | | 6.50 | | | 08/01/35 | | | 1,114,884 |
| | 4,787,145 | | Pool # 256269 | | 5.50 | | | 06/01/36 | | | 4,689,820 |
| | 9,803,967 | | Pool # 357824 | | 5.50 | | | 06/01/35 | | | 9,614,491 |
| | 1,218,929 | | Pool # 387203 | | 4.80 | | | 01/01/12 | | | 1,208,980 |
| | 1,040,831 | | Pool # 387204 | | 4.80 | | | 01/01/12 | | | 1,032,336 |
| | 199,157 | | Pool # 443194 | | 5.50 | | | 10/01/28 | | | 196,170 |
| | 3,847 | | Pool # 450846 | | 5.50 | | | 12/01/28 | | | 3,789 |
| | 337,685 | | Pool # 452035 | | 5.50 | | | 11/01/28 | | | 332,621 |
| | 2,265 | | Pool # 454758 | | 5.50 | | | 12/01/28 | | | 2,231 |
| | 552,697 | | Pool # 561435 | | 5.50 | | | 11/01/29 | | | 544,408 |
| | 299,509 | | Pool # 578543 | | 5.50 | | | 04/01/31 | | | 294,385 |
| | 111,388 | | Pool # 627259 | | 5.50 | | | 02/01/32 | | | 109,452 |
| | 953,853 | | Pool # 632551 | | 5.50 | | | 02/01/32 | | | 937,275 |
| | 428,663 | | Pool # 632576 | | 5.50 | | | 02/01/32 | | | 421,330 |
| | 208,532 | | Pool # 694655 | | 5.50 | | | 04/01/33 | | | 204,838 |
| | 1,465,264 | | Pool # 702861 | | 5.00 | | | 04/01/18 | | | 1,440,323 |
| | 1,334,444 | | Pool # 704440 | | 5.00 | | | 05/01/18 | | | 1,311,729 |
| | 58,045 | | Pool # 710585 | | 5.50 | | | 05/01/33 | | | 57,017 |
| | 349,465 | | Pool # 735224 | | 5.50 | | | 02/01/35 | | | 343,274 |
| | 22,070,624 | | Pool # 745432 | | 5.50 | | | 04/01/36 | | | 21,644,079 |
| | 949,818 | | Pool # 781859 | | 4.50 | | | 12/01/34 | | | 881,642 |
| | 1,334,761 | | Pool # 786423 ARM(b) | | 4.59 | | | 07/01/34 | | | 1,324,902 |
| | 431,185 | | Pool # 797680 | | 4.50 | | | 10/01/35 | | | 400,236 |
| | 647,787 | | Pool # 805373 | | 4.50 | | | 01/01/35 | | | 601,290 |
| | 6,159,345 | | Pool # 805386 ARM(b) | | 4.85 | | | 01/01/35 | | | 6,095,520 |
| | 748,393 | | Pool # 812268 | | 5.50 | | | 05/01/35 | | | 733,929 |
| | 1,008,991 | | Pool # 815479 | | 4.50 | | | 03/01/35 | | | 936,575 |
| | 1,271,697 | | Pool # 819361 | | 4.50 | | | 04/01/35 | | | 1,180,426 |
| | 535,391 | | Pool # 820492 | | 5.50 | | | 05/01/35 | | | 525,044 |
| | 734,644 | | Pool # 820989 | | 5.50 | | | 04/01/35 | | | 720,446 |
| | 709,774 | | Pool # 821567 | | 5.50 | | | 06/01/35 | | | 696,056 |
| | 1,725,574 | | Pool # 822799 | | 4.50 | | | 04/01/35 | | | 1,601,728 |
| | 6,085,226 | | Pool # 829321 | | 4.50 | | | 09/01/35 | | | 5,648,482 |
| | 8,082,723 | | Pool # 831926 | | 6.00 | | | 12/01/36 | | | 8,096,181 |
| | 4,904,429 | | Pool # 835751 | | 4.50 | | | 08/01/35 | | | 4,552,433 |
| | 1,786,633 | | Pool # 835760 | | 4.50 | | | 09/01/35 | | | 1,658,404 |
| | | | | | | | | | | |
Principal
Amount | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | |
| U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH
SECURITIES — (continued) |
| | | FEDERAL NATIONAL MORTGAGE
ASSOCIATION — (continued) |
| $ | 4,087,042 | | Pool # 839240 | | 4.50 | % | | 09/01/35 | | $ | 3,793,711 |
| | 1,610,049 | | Pool # 836512 | | 4.50 | | | 10/01/20 | | | 1,550,626 |
| | 2,600,373 | | Pool # 843510 | | 4.50 | | | 11/01/20 | | | 2,504,400 |
| | 1,616,173 | | Pool # 844797 | | 4.50 | | | 10/01/35 | | | 1,500,179 |
| | 1,793,946 | | Pool # 844901 | | 4.50 | | | 10/01/20 | | | 1,727,736 |
| | 5,683,479 | | Pool # 867438 | | 4.50 | | | 05/01/36 | | | 5,272,820 |
| | 4,645,441 | | Pool # 880084 | | 6.00 | | | 03/01/36 | | | 4,653,176 |
| | 5,458,986 | | Pool # 883084 | | 6.50 | | | 07/01/36 | | | 5,559,159 |
| | 696,437 | | Pool # 893426 | | 6.00 | | | 09/01/36 | | | 697,596 |
| | 2,972,931 | | Pool # 895271 | | 6.50 | | | 09/01/36 | | | 3,027,484 |
| | 4,705,343 | | Pool # 910390 | | 5.00 | | | 03/01/37 | | | 4,488,299 |
| | 1,959,597 | | Pool # 916370 | | 5.00 | | | 05/01/37 | | | 1,869,206 |
| | 8,071,805 | | Pool # 917906 | | 5.00 | | | 05/01/37 | | | 7,699,475 |
| | 30,111,220 | | Pool # 937282 | | 5.00 | | | 05/01/37 | | | 28,722,273 |
| | 6,612,962 | | Pool # 946450 ARM(b) | | 6.14 | | | 09/01/37 | | | 6,718,024 |
| | | | | | | | | | | |
| | | | | | | | | | | 161,201,422 |
| | | | | | | | | | | |
| | | GOVERNMENT NATIONAL MORTGAGE ASSOCIATION — 1.86% |
| | 281,198 | | Pool # 002562 | | 6.00 | | | 03/20/28 | | | 283,552 |
| | 1,731,128 | | Pool # 003413 | | 4.50 | | | 07/20/33 | | | 1,617,051 |
| | 329,691 | | Pool # 267812 | | 8.50 | | | 06/15/17 | | | 353,978 |
| | 1,569,095 | | Pool # 3442 | | 5.00 | | | 09/20/33 | | | 1,508,328 |
| | 2,732 | | Pool # 356873 | | 6.50 | | | 05/15/23 | | | 2,802 |
| | 29,201 | | Pool # 434772 | | 9.00 | | | 06/15/30 | | | 31,704 |
| | 46,324 | | Pool # 471660 | | 7.50 | | | 03/15/28 | | | 48,645 |
| | 118,488 | | Pool # 472028 | | 6.50 | | | 05/15/28 | | | 121,587 |
| | 53,263 | | Pool # 475847 | | 6.50 | | | 06/15/28 | | | 54,656 |
| | 20,664 | | Pool # 479087 | | 8.00 | | | 01/15/30 | | | 21,983 |
| | 296,926 | | Pool # 479088 | | 8.00 | | | 01/15/30 | | | 315,878 |
| | 114,538 | | Pool # 503711 | | 7.00 | | | 05/15/29 | | | 120,024 |
| | 9,599 | | Pool # 525556 | | 8.00 | | | 01/15/30 | | | 10,212 |
| | 10,842 | | Pool # 525945 | | 9.00 | | | 07/15/30 | | | 11,772 |
| | 106,859 | | Pool # 568670 | | 6.50 | | | 04/15/32 | | | 109,470 |
| | 199,220 | | Pool # 575441 | | 6.50 | | | 12/15/31 | | | 204,187 |
| | 558,400 | | Pool # 598127 | | 5.50 | | | 03/15/18 | | | 559,374 |
| | 1,199,530 | | Pool # 607668 | | 5.50 | | | 02/15/18 | | | 1,201,623 |
| | 757,885 | | Pool # 615639 | | 4.50 | | | 09/15/33 | | | 712,679 |
| | 146,831 | | Pool # 780086 | | 8.50 | | | 11/15/17 | | | 156,855 |
| | 644,617 | | Pool # 780548 | | 8.50 | | | 12/15/17 | | | 688,622 |
| | 484,872 | | Pool # 780865 | | 9.50 | | | 11/15/17 | | | 525,574 |
| | 163,538 | | Pool # 781036 | | 8.00 | | | 10/15/17 | | | 172,399 |
| | 614,937 | | Pool # 781084 | | 9.00 | | | 12/15/17 | | | 658,553 |
| | 147,181 | | Pool # 80185 ARM(b) | | 6.38 | | | 04/20/28 | | | 148,403 |
| | 155,788 | | Pool # 80205 ARM(b) | | 6.38 | | | 06/20/28 | | | 157,084 |
| | 384,378 | | Pool # 80311 ARM(b) | | 5.50 | | | 08/20/29 | | | 388,284 |
| | | | | | | | | | | |
| | | | | | | | | | | 10,185,279 |
| | | | | | | | | | | |
| | | TOTAL U.S. GOVERNMENT AGENCY MORTGAGE PASS THROUGH SECURITIES
(Cost $229,035,737) | | | 228,095,666 |
| | | | | | | | | | | |
See Notes to Financial Statements.
12
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Core Bond Fund — (continued)
| | | | | | | | | | | | |
Principal
Amount | | | | | Rate | | | Maturity
Date | | Value |
| | | | | | | | | | | | |
| | U.S. GOVERNMENT SECURITIES — 11.52% | | | |
| | | | U.S. TREASURY INFLATION PROTECTED
BONDS — 1.63% |
| $ | 1,183,718 | | | | | 2.00 | % | | 01/15/14 | | $ | 1,166,701 |
| | 2,762,700 | | | | | 2.38 | | | 01/15/25 | | | 2,787,089 |
| | 4,916,699 | | | | | 2.38 | | | 01/15/27 | | | 4,976,624 |
| | | | | | | | | | | | |
| | | | | | | | | | | | 8,930,414 |
| | | | | | | | | | | | |
| | | | U.S. TREASURY BONDS — 9.89% |
| | 19,880,000 | (e) | | | | 4.50 | | | 02/28/11 | | | 20,158,002 |
| | 21,810,000 | | | | | 7.63 | | | 11/15/22 | | | 28,206,459 |
| | 4,635,000 | | | | | 6.63 | | | 02/15/27 | | | 5,632,610 |
| | 200,000 | | | | | 4.75 | | | 02/15/37 | | | 197,233 |
| | | | | | | | | | | | |
| | | | | | | | | | | | 54,194,304 |
| | | | | | | | | | | | |
| | | | TOTAL U.S. GOVERNMENT SECURITIES
(Cost $62,617,784) | | | 63,124,718 |
| | | | | | | | | | | | |
| | | | |
| Contracts | | | | | | | | | | |
| | CALL OPTION PURCHASED — 0.00%* |
| | 10 | | | Euro Dollar Future, Expires 12/17/07 strike price 95.75 | | | 938 |
| | | | | | | | | | | | |
| | | | TOTAL CALL OPTION PURCHASED
(Cost $3,025) | | | 938 |
| | | | | | | | | | | | |
| | | | |
Principal Amount | | | | | | | | | | |
| | REPURCHASE AGREEMENT — 0.62% | | | | | | |
| $ | 3,407,000 | | | Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 02/15/36, market value $3,475,725 (repurchase proceeds $3,408,036) | | | 3,407,000 |
| | | | | | | | | | | | |
| | | | TOTAL REPURCHASE AGREEMENT (Cost $3,407,000) | | | 3,407,000 |
| | | | | | | | | | | | |
| | | | | | | | |
TOTAL INVESTMENTS (Cost $546,295,502)(f) | | 99.53 | % | | | | $ | 545,461,548 |
OTHER ASSETS IN EXCESS OF LIABILITIES | | 0.47 | | | | | | 2,569,168 |
| | | | | | | | |
NET ASSETS | | 100.00 | % | | | | $ | 548,030,716 |
| | | | | | | | |
| (a) | Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2007, these securities, which are not illiquid, amounted to $12,464,215, which represents 2.27% of net assets. |
| (b) | The interest rate shown on floating rate or variable rate securities reflects the rate at September 30, 2007. |
| (c) | Perpetual Security. Stated maturity is first par call date. |
| (e) | A portion of this security with market value of $253,496 is pledged as collateral for open futures contracts. |
| (f) | Cost for federal income tax purposes is $546,295,502. |
| * | Rounds to less than 0.01%. |
ARM—Adjustable Rate Mortgage
LLC—Limited Liability Company
Multi-Coupon Bond—Coupon rate may increase or decrease in response to a change in the quality rating by an independent rating agency.
PLC—Public Limited Company
STRIPS—Separately Traded Registered Interest and Principal Securities
| | | | | | | | | | | |
| Contracts | | | | | Value | | | Unrealized
Appreciation
(Depreciation) | |
| FUTURES CONTRACTS | |
| Long — | | | | | | | | | | | |
| 63 | | | U.S. 2 Year Treasury
Note, expiring
12/31/07 (notional amount $12,983,079) | | $ | 13,043,953 | | | $ | 60,874 | |
| Short — | | | | | | | | |
| (30 | ) | | U.S. Long-Term Treasury Bond
expiring 12/19/07 (notional amount $(3,339,534)) | | | (3,340,312 | ) | | | (778 | ) |
| | | | | | | | | | | |
TOTAL FUTURES CONTRACTS
|
| | $ | 60,096 | |
| | | | | | | | | | | |
See Notes to Financial Statements.
13
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Core Bond Fund — (continued)
| | | | | | | | | | | | | |
INTEREST RATE SWAP AGREEMENT | | | | | | | | | | | | | |
| | | | | |
Counterparty | | Notional
Amount | | Receiving
Leg | | | Paying Leg | | Expiration | | Unrealized
Appreciation |
Goldman Sachs | | $ | 5,000,000 | | 5.36 | % | | 3-month USD
LIBOR | | 07/24/09 | | $ | 4,451 |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | | |
Portfolio Diversification | | % of
Net
Assets | | | Value |
U.S. Government & Agency Securities | | 54.11 | | | $ | 296,534,206 |
Corporate Bonds | | 18.56 | | | | 101,746,213 |
Commercial Mortgage-Backed Securities | | 16.60 | | | | 90,951,932 |
Collateralized Mortgage Obligations | | 6.99 | | | | 38,310,194 |
Asset-Backed Securities | | 2.34 | | | | 12,798,651 |
Repurchase Agreement | | 0.62 | | | | 3,407,000 |
Tax-Exempt Security | | 0.31 | | | | 1,712,414 |
Call Option Purchased | | 0.00 | * | | | 938 |
| | | | | | |
Total Investments | | 99.53 | | | $ | 545,461,548 |
Other Assets in Excess of Liabilities | | 0.47 | | | | 2,569,168 |
| | | | | | |
Net Assets | | 100.00 | | | $ | 548,030,716 |
| | | | | | |
| * | | Rounds to less than 0.01%. |
See Notes to Financial Statements.
14
Excelsior Funds Trust
Portfolio of Investments — September 30, 2007 (Unaudited)
Equity Income Fund
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — 93.00% | | |
| | CONSUMER DISCRETIONARY — 6.78% |
| 105,000 | | CBS Corp., Class B | | $ | 3,307,500 |
| 100,000 | | Circuit City Stores, Inc. | | | 791,000 |
| 90,000 | | Home Depot, Inc. | | | 2,919,600 |
| 225,000 | | Newell Rubbermaid, Inc. | | | 6,484,500 |
| 135,000 | | Time Warner, Inc. | | | 2,478,600 |
| | | | | |
| | | | | 15,981,200 |
| | | | | |
| | CONSUMER STAPLES — 7.38% |
| 70,000 | | Altria Group, Inc. | | | 4,867,100 |
| 60,000 | | H.J. Heinz Co. | | | 2,772,000 |
| 50,000 | | Kimberly-Clark Corp. | | | 3,513,000 |
| 160,000 | | SUPERVALU, Inc. | | | 6,241,600 |
| | | | | |
| | | | | 17,393,700 |
| | | | | |
| | ENERGY — 10.25% |
| 65,000 | | BP PLC ADR | | | 4,507,750 |
| 85,000 | | Chevron Corp. | | | 7,954,300 |
| 195,000 | | Halliburton Co. | | | 7,488,000 |
| 135,000 | | Penn West Energy Trust | | | 4,194,450 |
| | | | | |
| | | | | 24,144,500 |
| | | | | |
| | FINANCIAL — 18.46% |
| 285,000 | | Arthur J. Gallagher & Co. | | | 8,256,450 |
| 185,000 | | Bank of New York Mellon Corp. | | | 8,165,900 |
| 113,000 | | Citigroup, Inc. | | | 5,273,710 |
| 105,000 | | Freddie Mac | | | 6,196,050 |
| 75,000 | | Morgan Stanley | | | 4,725,000 |
| 90,000 | | RenaissanceRe Holdings Ltd. | | | 5,886,900 |
| 153,000 | | U.S. BanCorp. | | | 4,977,090 |
| | | | | |
| | | | | 43,481,100 |
| | | | | |
| | HEALTH CARE — 5.94% |
| 70,000 | | Eli Lilly & Co. | | | 3,985,100 |
| 75,000 | | Medtronic, Inc. | | | 4,230,750 |
| 105,000 | | Novartis AG ADR | | | 5,770,800 |
| | | | | |
| | | | | 13,986,650 |
| | | | | |
| | INDUSTRIALS — 12.70% |
| 160,000 | | Dover Corp. | | | 8,152,000 |
| 195,000 | | General Electric Co. | | | 8,073,000 |
| 125,000 | | Honeywell International, Inc. | | | 7,433,750 |
| 60,000 | | Hubbell, Inc., Class B | | | 3,427,200 |
| 75,000 | | Waste Management, Inc. | | | 2,830,500 |
| | | | | |
| | | | | 29,916,450 |
| | | | | |
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | |
| | INFORMATION TECHNOLOGY — 11.83% |
| 225,000 | | Electronic Data Systems Corp. | | $ | 4,914,000 |
| 145,000 | | Linear Technology Corp. | | | 5,073,550 |
| 210,000 | | Microsoft Corp. | | | 6,186,600 |
| 150,000 | | Nokia Oyj ADR | | | 5,689,500 |
| 230,000 | | Xilinx, Inc. | | | 6,012,200 |
| | | | | |
| | | | | 27,875,850 |
| | | | | |
| | MATERIALS — 14.01% |
| 280,000 | | Domtar Corp.(a) | | | 2,296,000 |
| 67,000 | | Eastman Chemical Co. | | | 4,470,910 |
| 235,000 | | Packaging Corp. of America | | | 6,831,450 |
| 45,000 | | Pope Resources Ltd. | | | 1,907,550 |
| 32,000 | | Rayonier, Inc. | | | 1,537,280 |
| 395,000 | | RPM, Inc. | | | 9,460,250 |
| 90,000 | | Weyerhaeuser Co. | | | 6,507,000 |
| | | | | |
| | | | | 33,010,440 |
| | | | | |
| | TELECOMMUNICATION SERVICES — 5.65% |
| 147,000 | | AT&T, Inc. | | | 6,219,570 |
| 160,000 | | Verizon Communications, Inc. | | | 7,084,800 |
| | | | | |
| | | | | 13,304,370 |
| | | | | |
| | TOTAL COMMON STOCKS
(Cost $173,037,098) | | | 219,094,260 |
| | | | | |
| FOREIGN COMMON STOCKS — 3.02% | | |
| | UNITED KINGDOM — 3.02% |
| 460,000 | | Pearson PLC | | | 7,118,102 |
| | | | | |
| | TOTAL FOREIGN COMMON STOCKS
(Cost $5,471,204) | | | 7,118,102 |
| | | | | |
| CONVERTIBLE PREFERRED STOCKS — 1.68% |
| | CONSUMER DISCRETIONARY — 1.68% |
| 66,000 | | Ford Motor Co. Capital Trust II, Preferred Exchange, 6.50% | | | 2,491,500 |
| 60,000 | | General Motors Corp., Series C, Preferred Exchange, 6.25% | | | 1,469,400 |
| | | | | |
| | TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $3,098,578) | | | 3,960,900 |
| | | | | |
| | | | | | |
TOTAL INVESTMENTS
(Cost $181,606,880)(b) | | 97.70 | % | | $ | 230,173,262 |
OTHER ASSETS IN EXCESS OF LIABILITIES | | 2.30 | | | | 5,422,787 |
| | | | | | |
NET ASSETS | | 100.00 | % | | $ | 235,596,049 |
| | | | | | |
See Notes to Financial Statements.
15
Excelsior Funds Trust
Portfolio of Investments — September 30, 2007 (Unaudited)
Equity Income Fund — (continued)
| (a) | Non-income producing security. |
| (b) | Cost for federal income tax purposes is $181,606,880. |
ADR—American Depository Receipt
Ltd.—Limited
PLC—Public Limited Company
For the six months ended September 30, 2007, transactions in written options were as follows:
| | | | | | | |
| | | Number of
contracts | | | Premium
received | |
Options outstanding at March 31, 2007 | | — | | | $ | — | |
Options written | | (500 | ) | | | 98,498 | |
Options terminated in closing purchase transactions | | — | | | | — | |
Options exercised | | — | | | | — | |
Options expired | | 500 | | | | (98,498 | ) |
| | | | | | | |
Options outstanding at September 30, 2007 | | — | | | | — | |
| | | | | | | |
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | |
Sector Diversification | | % of
Net
Assets | | Value |
Financial | | 18.46 | | $ | 43,481,100 |
Materials | | 14.01 | | | 33,010,440 |
Industrials | | 12.70 | | | 29,916,450 |
Information Technology | | 11.83 | | | 27,875,850 |
Consumer Discretionary | | 11.48 | | | 27,060,202 |
Energy | | 10.25 | | | 24,144,500 |
Consumer Staples | | 7.38 | | | 17,393,700 |
Health Care | | 5.94 | | | 13,986,650 |
Telecommunication Services | | 5.65 | | | 13,304,370 |
| | | | | |
Total Investments | | 97.70 | | $ | 230,173,262 |
Other Assets in Excess of Liabilities | | 2.30 | | | 5,422,787 |
| | | | | |
Net Assets | | 100.00 | | $ | 235,596,049 |
| | | | | |
See Notes to Financial Statements.
16
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Large Cap Growth Fund
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — 99.18% | | |
| | CONSUMER DISCRETIONARY — 14.13% |
| 476,700 | | Coach, Inc.(a) | | $ | 22,533,609 |
| 658,114 | | eBay, Inc.(a) | | | 25,679,608 |
| 191,212 | | Las Vegas Sands Corp.(a) | | | 25,511,505 |
| 663,300 | | Lowe’s Companies, Inc. | | | 18,585,666 |
| 1,201,000 | | Starbucks Corp.(a) | | | 31,466,200 |
| | | | | |
| | | | | 123,776,588 |
| | | | | |
| | FINANCIAL — 6.95% | | | |
| 64,800 | | Chicago Mercantile Exchange | | | 38,060,280 |
| 368,300 | | Lehman Brothers Holdings, Inc. | | | 22,735,159 |
| | | | | |
| | | | | 60,795,439 |
| | | | | |
| | HEALTH CARE — 29.69% | | | |
| 195,155 | | Alcon, Inc. | | | 28,086,707 |
| 546,400 | | Allergan, Inc. | | | 35,226,408 |
| 523,100 | | Celgene Corp.(a) | | | 37,302,261 |
| 364,900 | | Covance, Inc.(a) | | | 28,425,710 |
| 473,296 | | Genentech, Inc.(a) | | | 36,926,554 |
| 892,316 | | Gilead Sciences, Inc.(a) | | | 36,468,955 |
| 111,637 | | Intuitive Surgical, Inc.(a) | | | 25,676,510 |
| 394,512 | | Zimmer Holdings, Inc.(a) | | | 31,951,527 |
| | | | | |
| | | | | 260,064,632 |
| | | | | |
| | INDUSTRIALS — 6.03% | | | |
| 510,000 | | Expeditors International of Washington, Inc. | | | 24,123,000 |
| 243,694 | | First Solar, Inc.(a) | | | 28,692,532 |
| | | | | |
| | | | | 52,815,532 |
| | | | | |
| | INFORMATION TECHNOLOGY — 38.17% |
| 572,500 | | Adobe Systems, Inc.(a) | | | 24,995,350 |
| 1,240,400 | | Akamai Technologies, Inc.(a) | | | 35,636,692 |
| 227,800 | | Apple Computer, Inc. (a) | | | 34,976,412 |
| 820,587 | | Broadcom Corp., Class A(a) | | | 29,902,190 |
| 1,083,500 | | Corning, Inc. | | | 26,708,275 |
| 431,815 | | Electronic Arts, Inc.(a) | | | 24,177,322 |
| 60,538 | | Google, Inc., Class A(a) | | | 34,341,391 |
| 513,306 | | Infosys Technologies Ltd., ADR | | | 24,838,878 |
| 809,100 | | Qualcomm, Inc. | | | 34,192,566 |
| 278,183 | | Research In Motion Ltd.(a) | | | 27,414,935 |
| 436,625 | | VMware, Inc., Class A(a) | | | 37,113,125 |
| | | | | |
| | | | | 334,297,136 |
| | | | | |
| | | | | | |
| Shares | | | | Value |
| | | | | | |
| COMMON STOCKS — (continued) | | |
| | | TELECOMMUNICATION SERVICES — 4.21% |
| | 575,900 | | America Movil S.A. de C.V., Series L ADR | | $ | 36,857,600 |
| | | | | | |
| | | TOTAL COMMON STOCKS (Cost $662,920,678) | | | 868,606,927 |
| | | | | | |
| | |
Principal
Amount | | | | |
| REPURCHASE AGREEMENT — 1.53% | | |
| $ | 13,397,000 | | Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 02/15/36, market value $13,668,313 (repurchase proceeds $13,401,075) | | | 13,397,000 |
| | | | | | |
| | | TOTAL REPURCHASE AGREEMENT
(Cost $13,397,000) | | | 13,397,000 |
| | | | | | |
| | | | | | | |
TOTAL INVESTMENTS
(Cost $676,317,678)(b) | | 100.71 | % | | $ | 882,003,927 | |
OTHER LIABILITIES IN EXCESS OF ASSETS | | (0.71 | ) | | | (6,198,688 | ) |
| | | | | | | |
NET ASSETS | | 100.00 | % | | $ | 875,805,239 | |
| | | | | | | |
| (a) | Non-income producing security. |
| (b) | Cost for federal income tax purposes is $676,317,678. |
ADR—American Depository Receipt
Ltd.—Limited
See Notes to Financial Statements.
17
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Large Cap Growth Fund — (continued)
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | | | |
Sector Diversification | | % of
Net
Assets | | | Value | |
Information Technology | | 38.17 | | | $ | 334,297,136 | |
Health Care | | 29.69 | | | | 260,064,632 | |
Consumer Discretionary | | 14.13 | | | | 123,776,588 | |
Financial | | 6.95 | | | | 60,795,439 | |
Industrial | | 6.03 | | | | 52,815,532 | |
Telecommunication Services | | 4.21 | | | | 36,857,600 | |
Repurchase Agreement | | 1.53 | | | | 13,397,000 | |
| | | | | | | |
Total Investments | | 100.71 | | | $ | 882,003,927 | |
Other Liabilities in Excess of Assets | | (0.71 | ) | | | (6,198,688 | ) |
| | | | | | | |
Net Assets | | 100.00 | | | $ | 875,805,239 | |
| | | | | | | |
See Notes to Financial Statements.
18
Excelsior Funds Trust
Portfolio of Investments — September 30, 2007 (Unaudited)
Mid Cap Value and Restructuring Fund
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — 98.00% | | |
| | CONSUMER DISCRETIONARY — 22.87% |
| 39,400 | | Autozone, Inc.(a) | | $ | 4,575,913 |
| 91,000 | | Black & Decker Corp. | | | 7,580,299 |
| 112,900 | | Centex Corp. | | | 2,999,753 |
| 360,000 | | Constellation Brands, Inc.(a) | | | 8,715,600 |
| 185,000 | | EchoStar Communications, Inc.(a) | | | 8,659,851 |
| 160,000 | | Limited Brands | | | 3,662,400 |
| 323,200 | | Onex Corp. | | | 11,876,499 |
| 167,700 | | Sherwin-Williams Co. | | | 11,019,567 |
| 378,200 | | Tempur-Pedic International, Inc. | | | 13,520,649 |
| 295,000 | | TJX Cos., Inc. | | | 8,575,650 |
| | | | | |
| | | | | 81,186,181 |
| | | | | |
| | CONSUMER STAPLES — 1.66% |
| 230,000 | | Dean Foods Co. | | | 5,883,400 |
| | | | | |
| | ENERGY – 11.78% | | | |
| 86,000 | | Cimarex Energy Co. | | | 3,203,500 |
| 133,300 | | Devon Energy Corp. | | | 11,090,560 |
| 349,800 | | El Paso Corp. | | | 5,936,106 |
| 260,000 | | Noble Corp. | | | 12,753,000 |
| 137,800 | | Occidental Petroleum Corp. | | | 8,830,227 |
| | | | | |
| | | | | 41,813,393 |
| | | | | |
| | FINANCIAL — 21.03% | | | |
| 94,000 | | Ace Ltd. | | | 5,693,580 |
| 260,000 | | CIT Group, Inc. | | | 10,452,000 |
| 470,000 | | E*TRADE Group, Inc.(a) | | | 6,138,200 |
| 245,000 | | First Marblehead Corp. | | | 9,292,850 |
| 141,600 | | Lehman Brothers Holding, Inc. | | | 8,740,967 |
| 160,000 | | Leucadia National Corp. | | | 7,715,200 |
| 61,400 | | Mastercard, Inc., Class A | | | 9,085,358 |
| 150,000 | | Progressive Corp. | | | 2,911,500 |
| 83,000 | | RenaissanceRe Holdings Ltd. | | | 5,429,029 |
| 310,000 | | W.R. Berkley Corp. | | | 9,185,300 |
| | | | | |
| | | | | 74,643,984 |
| | | | | |
| | HEALTH CARE — 3.68% | | | |
| 176,700 | | Shire Pharmaceuticals PLC ADR | | | 13,072,266 |
| | | | | |
| | INDUSTRIALS — 20.31% | | | |
| 130,000 | | Autoliv, Inc. | | | 7,767,500 |
| 193,000 | | Brink’s Co. | | | 10,784,840 |
| 247,000 | | Empresa Brasileira de Aeronautica S.A. ADR | | | 10,848,240 |
| 150,000 | | Kennametal, Inc. | | | 12,597,000 |
| 22,900 | | Lincoln Electric Holdings, Inc. | | | 1,777,269 |
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | |
| | INDUSTRIALS — (continued) | | | |
| 172,000 | | Mueller Industries, Inc. | | $ | 6,216,080 |
| 185,000 | | Oshkosh Truck Corp. | | | 11,464,450 |
| 330,300 | | United Rentals, Inc.(a) | | | 10,625,751 |
| | | | | |
| | | | | 72,081,130 |
| | | | | |
| | INFORMATION TECHNOLOGY — 4.47% |
| 130,000 | | Electronic Data Systems Corp. | | | 2,839,200 |
| 225,000 | | Harris Corp. | | | 13,002,748 |
| | | | | |
| | | | | 15,841,948 |
| | | | | |
| | MATERIALS — 7.91% | | | |
| 210,700 | | Aracruz Cellulose S.A. ADR | | | 15,505,417 |
| 129,700 | | Cabot Microelectronics Corp.(a) | | | 5,544,675 |
| 380,000 | | Sterlite Industries (India) Ltd. ADS(a) | | | 7,030,000 |
| | | | | |
| | | | | 28,080,092 |
| | | | | |
| | REAL ESTATE — 0.98% | | | |
| 103,800 | | St. Joe Co. | | | 3,488,719 |
| | | | | |
| | UTILITIES — 3.31% | | | |
| 345,000 | | Williams Cos., Inc. | | | 11,750,700 |
| | | | | |
| | TOTAL COMMON STOCKS
(Cost $214,592,502) | | | 347,841,813 |
| | | | | |
| FOREIGN COMMON STOCKS — 2.00% | | |
| | NETHERLANDS — 2.00% | | | |
| 79,500 | | Hunter Douglas NV | | | 7,114,787 |
| | | | | |
| | TOTAL FOREIGN COMMON STOCKS
(Cost $2,926,238) | | | 7,114,787 |
| | | | | |
| | | | | | | |
TOTAL INVESTMENTS
(Cost $217,518,740)(b) | | 100.00 | % | | $ | 354,956,600 | |
OTHER LIABILITIES IN EXCESS OF ASSETS | | 0.00 | * | | | (15,811 | ) |
| | | | | | | |
NET ASSETS | | 100.00 | % | | $ | 354,940,789 | |
| | | | | | | |
| (a) | Non-income producing security. |
| (b) | Cost for federal income tax purposes is $217,518,740. |
| * | Rounds to less than 0.01%. |
ADR—American Depository Receipt
ADS—American Depository Shares
Ltd.—Limited
PLC—Public Limited Company
See Notes to Financial Statements.
19
Excelsior Funds Trust
Portfolio of Investments — September 30, 2007 (Unaudited)
Mid Cap Value and Restructuring Fund — (continued)
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | | | |
Sector Diversification | | % of
Net
Assets | | | Value | |
Consumer Discretionary | | 24.87 | | | $ | 88,300,968 | |
Financial | | 21.03 | | | | 74,643,984 | |
Industrials | | 20.31 | | | | 72,081,130 | |
Energy | | 11.78 | | | | 41,813,393 | |
Materials | | 7.91 | | | | 28,080,092 | |
Information Technology | | 4.47 | | | | 15,841,948 | |
Health Care | | 3.68 | | | | 13,072,266 | |
Utilities | | 3.31 | | | | 11,750,700 | |
Consumer Staples | | 1.66 | | | | 5,883,400 | |
Real Estate | | 0.98 | | | | 3,488,719 | |
| | | | | | | |
Total Investments | | 100.00 | | | $ | 354,956,600 | |
Other Liabilities in Excess of Assets | | 0.00 | * | | | (15,811 | ) |
| | | | | | | |
Net Assets | | 100.00 | | | $ | 354,940,789 | |
| | | | | | | |
| * | | Rounds to less than 0.01%. |
See Notes to Financial Statements.
20
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Small Cap Fund
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — 98.08% | | |
| | CONSUMER DISCRETIONARY — 12.83% |
| 1,000,000 | | Cabelas, Inc.(a) | | $ | 23,650,000 |
| 300,000 | | Columbia Sportswear Co. | | | 16,593,000 |
| 200,000 | | iRobot Corp.(a) | | | 3,976,000 |
| 460,000 | | Modine Manufacturing Co. | | | 12,245,200 |
| 780,000 | | Nautilus, Inc. | | | 6,216,600 |
| 200,000 | | Sotheby’s Holdings, Inc., Class A | | | 9,558,000 |
| 660,000 | | Talbots, Inc. | | | 11,880,000 |
| 400,000 | | Thor Industries, Inc. | | | 17,996,000 |
| 200,000 | | Urban Outfitters, Inc.(a) | | | 4,360,000 |
| | | | | |
| | | | | 106,474,800 |
| | | | | |
| | ENERGY — 4.60% | | | |
| 600,000 | | Helix Energy Solutions Group, Inc.(a) | | | 25,476,000 |
| 600,000 | | TETRA Technologies, Inc.(a) | | | 12,684,000 |
| | | | | |
| | | | | 38,160,000 |
| | | | | |
| | FINANCIAL — 11.75% | | | |
| 380,000 | | GFI Group, Inc.(a) | | | 32,725,600 |
| 350,000 | | Greenhill & Co., Inc. | | | 21,367,500 |
| 360,000 | | Jefferies Group, Inc. | | | 10,018,800 |
| 640,000 | | Philadelphia Consolidated Holdings Corp.(a) | | | 26,457,600 |
| 300,000 | | Radian Group, Inc. | | | 6,984,000 |
| | | | | |
| | | | | 97,553,500 |
| | | | | |
| | HEALTH CARE — 5.38% | | | |
| 40,000 | | Kensey Nash Corp.(a) | | | 1,044,400 |
| 600,000 | | Molina Healthcare, Inc.(a) | | | 21,762,000 |
| 880,000 | | Orthovita, Inc.(a) | | | 2,666,400 |
| 660,000 | | Pharmanet Development Group, Inc.(a) | | | 19,159,800 |
| | | | | |
| | | | | 44,632,600 |
| | | | | |
| | INDUSTRIALS — 29.26% | | | |
| 150,000 | | EDO Corp. | | | 8,401,500 |
| 480,000 | | FLIR Systems, Inc.(a) | | | 26,587,200 |
| 620,000 | | FTI Consulting, Inc.(a) | | | 31,192,200 |
| 740,000 | | Hewitt Associates, Inc., Class A(a) | | | 25,937,000 |
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | |
| | INDUSTRIALS — (continued) | | | |
| 1,000,000 | | Innovative Solutions & Support, Inc.(a) | | $ | 18,970,000 |
| 660,000 | | Kansas City Southern(a) | | | 21,232,200 |
| 1,240,000 | | MPS Group, Inc.(a) | | | 13,826,000 |
| 800,000 | | Quanta Services, Inc.(a) | | | 21,160,000 |
| 500,000 | | Shaw Group, Inc.(a) | | | 29,050,000 |
| 740,000 | | Simpson Manufacturing Co., Inc. | | | 23,569,000 |
| 280,000 | | Triumph Group, Inc. | | | 22,878,800 |
| | | | | |
| | | | | 242,803,900 |
| | | | | |
| INFORMATION TECHNOLOGY — 29.57% | | |
| 300,000 | | CACI International, Inc., Class A(a) | | | 15,327,000 |
| 480,000 | | CommScope, Inc.(a) | | | 24,115,200 |
| 720,000 | | Forrester Research, Inc.(a) | | | 16,970,400 |
| 320,000 | | Hutchinson Technology, Inc.(a) | | | 7,872,000 |
| 2,200,000 | | Kulicke & Soffa Industries, Inc.(a) | | | 18,656,000 |
| 900,000 | | Manhattan Associates, Inc.(a) | | | 24,669,000 |
| 1,400,000 | | Palm, Inc.(a) | | | 22,778,000 |
| 840,000 | | Plantronics, Inc. | | | 23,982,000 |
| 500,000 | | Power Integrations(a) | | | 14,855,000 |
| 400,000 | | Rogers Corp.(a) | | | 16,476,000 |
| 1,000,000 | | Secure Computing Corp.(a) | | | 9,730,000 |
| 900,000 | | Technitrol, Inc. | | | 24,255,000 |
| 480,000 | | Varian Semiconductor Equipment Associates, Inc.(a) | | | 25,689,600 |
| | | | | |
| | | | | 245,375,200 |
| | | | | |
| | MATERIALS — 1.75% | | | |
| 340,000 | | Cabot Microelectronics Corp.(a) | | | 14,535,000 |
| | | | | |
| | REAL ESTATE — 1.30% |
| 320,000 | | St. Joe Co. | | | 10,755,200 |
| | | | | |
| | UTILITIES — 1.64% | | | |
| 600,000 | | Aqua America, Inc. | | | 13,608,000 |
| | | | | |
| | TOTAL COMMON STOCKS
(Cost $586,014,469) | | | 813,898,200 |
| | | | | |
See Notes to Financial Statements.
21
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Small Cap Fund — (continued)
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
| REPURCHASE AGREEMENT — 0.27% | | |
| $ | 2,218,000 | | Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 02/15/36, market value $2,264,488 (repurchase proceeds $2,218,675) | | $ | 2,218,000 |
| | | | | | |
| | | TOTAL REPURCHASE AGREEMENT
(Cost $2,218,000) | | | 2,218,000 |
| | | | | | |
| | | | | | |
TOTAL INVESTMENTS
(Cost $588,232,469)(b) | | 98.35 | % | | $ | 816,116,200 |
OTHER ASSETS IN EXCESS OF LIABILITIES | | 1.65 | | | | 13,737,915 |
| | | | | | |
NET ASSETS | | 100.00 | % | | $ | 829,854,115 |
| | | | | | |
| (a) | Non-income producing security. |
| (b) | Cost for federal income tax purposes is $588,232,469. |
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | |
Sector Diversification | | % of
Net
Assets | | Value |
Information Technology | | 29.57 | | $ | 245,375,200 |
Industrials | | 29.26 | | | 242,803,900 |
Consumer Discretionary | | 12.83 | | | 106,474,800 |
Financial | | 11.75 | | | 97,553,500 |
Health Care | | 5.38 | | | 44,632,600 |
Energy | | 4.60 | | | 38,160,000 |
Materials | | 1.75 | | | 14,535,000 |
Utilities | | 1.64 | | | 13,608,000 |
Real Estate | | 1.30 | | | 10,755,200 |
Repurchase Agreement | | 0.27 | | | 2,218,000 |
| | | | | |
Total Investments | | 98.35 | | $ | 816,116,200 |
Other Assets in Excess of Liabilities | | 1.65 | | | 13,737,915 |
| | | | | |
Net Assets | | 100.00 | | $ | 829,854,115 |
| | | | | |
See Notes to Financial Statements.
22
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Value and Restructuring Fund
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — 95.57% | | |
| | CONSUMER DISCRETIONARY — 10.36% |
| 2,625,000 | | Black & Decker Corp. | | $ | 218,662,500 |
| 2,850,000 | | CBS Corp., Class B | | | 89,775,000 |
| 3,500,000 | | Centex Corp. | | | 92,995,000 |
| 1,800,000 | | EchoStar Communications, Inc.(a) | | | 84,258,000 |
| 1,000,000 | | Harman International Industries, Inc. | | | 86,520,000 |
| 1,350,000 | | J.C. Penney Co., Inc. | | | 85,549,500 |
| 3,200,000 | | Leggett & Platt, Inc. | | | 61,312,000 |
| 3,000,000 | | Newell Rubbermaid, Inc. | | | 86,460,000 |
| 3,300,000 | | TJX Cos., Inc. | | | 95,931,000 |
| 2,700,000 | | Zale Corp.(a) | | | 62,478,000 |
| | | | | |
| | | | | 963,941,000 |
| | | | | |
| | CONSUMER STAPLES — 3.94% |
| 2,550,000 | | Avon Products, Inc. | | | 95,701,500 |
| 1,000,000 | | ConAgra Foods, Inc. | | | 26,130,000 |
| 2,500,000 | | Dean Foods Co. | | | 63,950,000 |
| 2,200,000 | | Loews Corp. — Carolina Group | | | 180,906,000 |
| | | | | |
| | | | | 366,687,500 |
| | | | | |
| | ENERGY — 19.49% | | | |
| 2,400,000 | | Anadarko Petroleum Corp. | | | 129,000,000 |
| 2,900,000 | | ConocoPhillips | | | 254,533,000 |
| 4,600,000 | | CONSOL Energy, Inc. | | | 214,360,000 |
| 2,600,000 | | Devon Energy Corp. | | | 216,320,000 |
| 6,100,000 | | El Paso Corp. | | | 103,517,000 |
| 3,850,000 | | Hercules Offshore, Inc.(a) | | | 100,523,500 |
| 1,500,000 | | Murphy Oil Corp. | | | 104,835,000 |
| 2,150,000 | | Noble Energy, Inc. | | | 150,586,000 |
| 4,000,000 | | Petrobras ADR | | | 302,000,000 |
| 4,300,000 | | PetroHawk Energy Corp.(a) | | | 70,606,000 |
| 944,900 | | Pinnacle Gas Resources, Inc.(a)(b) | | | 4,422,132 |
| 2,900,000 | | Rossetta Resources, Inc.(a)(b) | | | 53,186,000 |
| 2,000,000 | | Spectra Energy Corp. | | | 48,960,000 |
| 2,500,000 | | W&T Offshore, Inc. | | | 60,950,000 |
| | | | | |
| | | | | 1,813,798,632 |
| | | | | |
| | FINANCIAL — 21.53% | | | |
| 2,800,000 | | Ace Ltd. | | | 169,596,000 |
| 3,300,000 | | AerCap Holdings NV ADR(a) | | | 82,137,000 |
| 1,400,000 | | Ambac Financial Group, Inc. | | | 88,074,000 |
| 3,300,000 | | Apollo Investment Corp.(c) | | | 68,640,000 |
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | |
| | FINANCIAL — (continued) |
| 1,500,000 | | Capital One Financial Corp. | | $ | 99,645,000 |
| 2,711,260 | | CastlePoint Holdings Ltd. | | | 31,179,490 |
| 2,200,000 | | CIT Group, Inc. | | | 88,440,000 |
| 2,600,000 | | Citigroup, Inc. | | | 121,342,005 |
| 1,050,000 | | Discover Financial Services | | | 21,840,000 |
| 1,300,000 | | Freddie Mac | | | 76,713,000 |
| 1,800,000 | | Genworth Financial, Inc. | | | 55,314,000 |
| 4,100,000 | | Invesco PLC ADR | | | 111,930,000 |
| 6,188,900 | | JHFS Participacoes S.A. ADR(a)(b) | | | 32,861,821 |
| 2,350,000 | | JP Morgan Chase & Co. | | | 107,677,000 |
| 2,050,000 | | Lehman Brothers Holdings, Inc. | | | 126,546,500 |
| 2,850,000 | | Loews Corp. | | | 137,797,500 |
| 2,961,200 | | MCG Capital Corp. | | | 42,611,668 |
| 1,950,000 | | MetLife, Inc. | | | 135,973,500 |
| 2,350,000 | | Morgan Stanley | | | 148,050,000 |
| 2,300,000 | | People’s United Financial, Inc. | | | 39,744,000 |
| 1,450,000 | | PNC Financial Services Group, Inc. | | | 98,745,000 |
| 4,265,364 | | Primus Guaranty Ltd.(a) | | | 44,871,629 |
| 2,100,000 | | Washington Mutual, Inc. | | | 74,151,000 |
| | | | | |
| | | | | 2,003,880,113 |
| | | | | |
| | HEALTH CARE — 3.14% | | | |
| 1,900,000 | | AmerisourceBergen Corp. | | | 86,127,000 |
| 2,031,818 | | Baxter International, Inc. | | | 114,350,717 |
| 2,000,000 | | Bristol-Myers Squibb Co. | | | 57,640,000 |
| 825,000 | | Covidien Ltd. | | | 34,237,493 |
| | | | | |
| | | | | 292,355,210 |
| | | | | |
| | INDUSTRIALS — 13.44% | | | |
| 708,544 | | Aecom Technology Corp.(a) | | | 24,749,442 |
| 2,900,000 | | AGCO Corp.(a) | | | 147,233,000 |
| 1,050,181 | | Arlington Tankers | | | 25,865,958 |
| 2,200,000 | | Copa Holdings S.A., Class A | | | 88,110,000 |
| 2,750,000 | | Empresa Brasileira de Aeronautica S.A. ADR | | | 120,780,000 |
| 3,650,000 | | Gol Linhas Aereas Inteligentes S.A. ADR | | | 87,600,000 |
| 1,000,000 | | Omega Navigation Enterprises, Inc., Class A ADR | | | 19,930,000 |
| 1,100,000 | | Rockwell Automation, Inc. | | | 76,461,000 |
| 3,300,000 | | RSC Holdings, Inc.(a) | | | 54,120,000 |
| 2,000,000 | | Ryder Systems, Inc. | | | 98,000,000 |
See Notes to Financial Statements.
23
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Value and Restructuring Fund — (continued)
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | |
| | INDUSTRIALS — (continued) |
| 825,000 | | Tyco International Ltd. | | $ | 36,580,492 |
| 1,750,000 | | Union Pacific Corp. | | | 197,855,000 |
| 4,250,000 | | United Rentals, Inc.(a) | | | 136,722,500 |
| 1,700,000 | | United Technologies Corp. | | | 136,816,000 |
| | | | | |
| | | | | 1,250,823,392 |
| | | | | |
| | INFORMATION TECHNOLOGY — 6.16% |
| 4,300,000 | | Harris Corp. | | | 248,497,000 |
| 975,000 | | International Business Machines Corp. | | | 114,855,000 |
| 3,850,000 | | Nokia Oyj ADR | | | 146,030,500 |
| 1,200,000 | | Plantronics, Inc. | | | 34,260,000 |
| 825,000 | | Tyco Electronics Ltd. | | | 29,229,744 |
| | | | | |
| | | | | 572,872,244 |
| | | | | |
| | MATERIALS — 11.42% | | | |
| 3,650,000 | | Alpha Natural Resources,
Inc.(a) | | | 84,789,500 |
| 4,050,000 | | Celanese Corp., Class A | | | 157,869,000 |
| 1,300,000 | | Eagle Materials, Inc. | | | 46,462,000 |
| 1,625,000 | | Foundation Coal Holdings, Inc. | | | 63,700,000 |
| 1,000,000 | | Freeport-McMoRan Copper & Gold, Inc. ADR | | | 104,890,000 |
| 1,485,000 | | Horsehead Holding
Corp.(a)(b) | | | 33,293,700 |
| 1,461,198 | | International Coal Group, Inc.(a) | | | 6,487,719 |
| 1,550,000 | | PPG Industries, Inc. | | | 117,102,500 |
| 1,700,000 | | Schnitzer Steel Industries, Inc. | | | 124,593,000 |
| 4,200,000 | | Smurfit-Stone Container Corp.(a) | | | 49,056,000 |
| 1,800,000 | | Southern Copper Corp. | | | 222,894,000 |
| 2,250,000 | | Sterlite Industries (India) Ltd. ADS(a) | | | 41,625,000 |
| 1,084,319 | | Tronox, Inc. | | | 10,084,167 |
| | | | | |
| | | | | 1,062,846,586 |
| | | | | |
| | REAL ESTATE — 1.87% | | | |
| 4,120,000 | | Diamondrock Hospitality Co.(b) | | | 71,729,200 |
| 1,000,000 | | FBR Capital Markets
Corp.(a)(b) | | | 12,880,000 |
| 2,450,000 | | Host Marriot Corp. | | | 54,978,000 |
| | | | | |
| Shares | | | | Value |
| | | | | |
| COMMON STOCKS — (continued) | | |
| | REAL ESTATE — (continued) |
| 3,000,000 | | Peoples Choice Financial Corp.(a)(b)(d)(e) | | $ | 0 |
| 489,579 | | Ventas, Inc. | | | 20,268,570 |
| 2,140,500 | | Vintage Wine Trust, Inc.(b) | | | 13,913,250 |
| | | | | |
| | | | | 173,769,020 |
| | | | | |
| | TELECOMMUNICATION SERVICES — 4.22% |
| 5,225,000 | | America Movil S.A. de C.V., Series L ADR(f) | | | 334,400,000 |
| 1,842,000 | | Datapath, Inc.(a)(b) | | | 9,210,000 |
| 3,500,000 | | Windstream Corp. | | | 49,420,000 |
| | | | | |
| | | | | 393,030,000 |
| | | | | |
| | TOTAL COMMON STOCKS
(Cost $5,752,339,067) | | | 8,894,003,697 |
| | | | | |
| FOREIGN COMMON STOCKS — 3.63% | | |
| | BRAZIL — 0.03% | | | |
| 500,000 | | JHSF Participacoes S.A.(a) | | | 2,665,030 |
| | | | | |
| | GERMANY — 0.87% | | | |
| 1,700,000 | | Lanxess AG | | | 80,619,189 |
| | | | | |
| | ITALY — 0.60% | | | |
| 5,000,000 | | Enel S.p.A. | | | 56,422,485 |
| | | | | |
| | MEXICO — 0.85% | | | |
| 11,000,000 | | Grupo Mexico S.A.B. de C.V., Series B | | | 78,949,293 |
| | | | | |
| | SWITZERLAND — 1.28% | | | |
| 1,350,000 | | Petroplus Holdings AG(a) | | | 119,351,404 |
| | | | | |
| | TOTAL FOREIGN COMMON STOCKS
(Cost $238,048,710) | | | 338,007,401 |
| | | | | |
| CONVERTIBLE PREFERRED STOCKS — 0.27% |
| | MATERIALS — 0.27% | | | |
| 500,000 | | Celanese Corp., Preferred Exchange, 4.25% | | | 25,070,000 |
| | | | | |
| | TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $11,789,117) | | | 25,070,000 |
| | | | | |
See Notes to Financial Statements.
24
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Value and Restructuring Fund — (continued)
| | | | | | |
Principal
Amount | | | | Value |
| | | | | | |
| REPURCHASE AGREEMENT – 0.74% | | |
| $ | 68,863,000 | | Repurchase agreement with State Street Bank & Trust Co., dated 09/28/07, due 10/01/07 at 3.65%, collateralized by a U.S. Treasury Obligation maturing 05/15/17, market value $70,242,188 (repurchase proceeds $68,883,946) | | $ | 68,863,000 |
| | | | | | |
| | | TOTAL REPURCHASE AGREEMENT
(Cost $68,863,000) | | | 68,863,000 |
| | | | | | |
| | | | | | | |
TOTAL INVESTMENTS
(Cost $6,071,039,894)(g) | | 100.21 | % | | $ | 9,325,944,098 | |
OTHER LIABILITIES IN EXCESS OF ASSETS | | (0.21 | ) | | | (19,894,286 | ) |
| | | | | | | |
NET ASSETS | | 100.00 | % | | $ | 9,306,049,812 | |
| | | | | | | |
At September 30, 2007 the Fund had entered into the following written option contracts:
| | | | | | |
| Contracts | | | | Value | |
| | | | | | |
| CALL OPTIONS WRITTEN: | | | |
| (5,400) | | America Movil S.A. de C.V., Expires 11/17/07 strike price 60 (Premiums received $2,113,212) | | $ | (3,186,000 | ) |
| | | | | | |
| (a) | Non-income producing security. |
| (b) | Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2007, these securities, which are not illiquid, amounted to $231,496,103, which represents 2.49% of net assets. |
| (c) | Closed-end Management Investment Company. |
| (d) | Security has no value. |
| (e) | Represents fair value as determined in good faith under procedures approved by the Board of Directors. |
| (f) | All or a portion of this security is pledged as collateral for written option contracts. |
| (g) | Cost for federal income tax purposes is $6,071,039,894. |
ADR—American Depository Receipt
ADS—American Depository Shares
Ltd.—Limited
PLC—Public Limited Company
For the six months ended September 30, 2007, transactions in written option contracts were as follows:
| | | | | | | |
| | | Number of
contracts | | | Premium
received | |
Options outstanding at March 31, 2007 | | (23,000 | ) | | $ | 6,678,258 | |
Options written | | (22,400 | ) | | | 9,630,069 | |
Options terminated in closing purchase transactions | | 28,183 | | | | (9,791,478 | ) |
Options exercised | | 6,817 | | | | (3,909,273 | ) |
Options expired | | 5,000 | | | | (494,364 | ) |
| | | | | | | |
Options outstanding at September 30, 2007 | | (5,400 | ) | | $ | 2,113,212 | |
| | | | | | | |
See Notes to Financial Statements.
25
Excelsior Funds, Inc.
Portfolio of Investments — September 30, 2007 (Unaudited)
Value and Restructuring Fund — (continued)
The summary of the Fund’s investments as of September 30, 2007 is as follows:
| | | | | | | |
Sector Diversification | | % of
Net
Assets | | | Value | |
Financial | | 21.56 | | | $ | 2,006,545,143 | |
Energy | | 20.77 | | | | 1,933,150,036 | |
Industrials | | 14.31 | | | | 1,331,442,581 | |
Materials | | 12.54 | | | | 1,166,865,879 | |
Consumer Discretionary | | 10.36 | | | | 963,941,000 | |
Information Technology | | 6.16 | | | | 572,872,244 | |
Consumer Staples | | 4.54 | | | | 423,109,985 | |
Telecommunication Services | | 4.22 | | | | 393,030,000 | |
Health Care | | 3.14 | | | | 292,355,210 | |
Real Estate | | 1.87 | | | | 173,769,020 | |
Repurchase Agreement | | 0.74 | | | | 68,863,000 | |
| | | | | | | |
Total Investments | | 100.21 | | | $ | 9,325,944,098 | |
Other Liabilities in Excess of Assets | | (0.21 | ) | | | (19,894,286 | ) |
| | | | | | | |
Net Assets | | 100.00 | | | $ | 9,306,049,812 | |
| | | | | | | |
See Notes to Financial Statements.
26
[THIS PAGE INTENTIONALLY LEFT BLANK]
Excelsior Funds
Statements of Assets and Liabilities
September 30, 2007 (Unaudited)
| | | | | | | |
| | |
| | | Core
Bond
Fund | | |
Equity
Income
Fund |
ASSETS | | | | | | | |
Investments, at identified cost | | $ | 546,295,502 | | | $ | 181,606,880 |
| | | | | | | |
Investments, at value | | $ | 545,461,548 | | | $ | 230,173,262 |
Cash | | | — | | | | — |
Unrealized appreciation on swap contracts | | | 4,451 | | | | — |
Receivable for: | | | | | | | |
Investments sold | | | 6,879,231 | | | | 6,409,449 |
Fund shares sold | | | 364,686 | | | | 38,555 |
Dividends | | | — | | | | 572,880 |
Interest | | | 4,200,974 | | | | — |
Expense reimbursement due from Investment Advisor and/or its affiliates | | | 91,636 | | | | 11,964 |
Futures variation margin | | | 63,984 | | | | — |
Foreign tax reclaims | | | — | | | | — |
Prepaid expenses | | | 31,199 | | | | 13,730 |
| | | | | | | |
Total assets | | $ | 557,097,709 | | | $ | 237,219,840 |
| | | | | | | |
LIABILITIES | | | | | | | |
Payable to custodian bank | | | 773,896 | | | | 241,861 |
Written options at value (premiums of $-, $-, $-, $-, $- and $2,113,212, respectively) | | | — | | | | — |
Payable for: | | | | | | | |
Investments purchased | | | 5,832,662 | | | | — |
Fund shares repurchased | | | 383,097 | | | | 99,589 |
Distributions | | | 1,409,074 | | | | — |
Investment advisory fee | | | 296,242 | | | | 144,094 |
Administration fee | | | 41,689 | | | | 16,438 |
Transfer agent fee | | | 34,483 | | | | 19,154 |
Pricing and bookkeeping fees | | | 8,256 | | | | 3,676 |
Trustees’/Directors’ fees | | | — | | | | — |
Custody fee | | | 16,073 | | | | 638 |
Shareholder servicing fee | | | 99,490 | | | | 48,049 |
Distribution and service fees | | | — | * | | | — |
Principal on loan | | | — | | | | 1,000,000 |
Interest fee | | | — | | | | 767 |
Other liabilities | | | 172,031 | | | | 49,525 |
| | | | | | | |
Total liabilities | | $ | 9,066,993 | | | $ | 1,623,791 |
| | | | | | | |
NET ASSETS | | $ | 548,030,716 | | | $ | 235,596,049 |
| | | | | | | |
NET ASSETS CONSIST OF | | | | | | | |
Par value | | $ | 61,166 | | | $ | 236 |
Paid-in capital in excess of par value | | | 549,903,000 | | | | 181,007,111 |
Undistributed (overdistributed) net investment income | | | 194,985 | | | | 125,115 |
Accumulated net realized gain (loss) | | | (1,359,028 | ) | | | 5,896,815 |
Net unrealized appreciation (depreciation) on: | | | | | | | |
Investments | | | (833,954 | ) | | | 48,566,382 |
Foreign currency translations | | | — | | | | 390 |
Futures contracts | | | 60,096 | | | | — |
Swap contracts | | | 4,451 | | | | — |
Written options | | | — | | | | — |
| | | | | | | |
NET ASSETS | | $ | 548,030,716 | | | $ | 235,596,049 |
| | | | | | | |
*Rounds to less than $1.
See Notes to Financial Statements.
28
| | | | | | | | | | | | |
| | | |
Large Cap
Growth
Fund | | Mid Cap
Value and
Restructuring
Fund | | Small Cap
Fund | | | Value and
Restructuring
Fund | |
| | | | | | | | | | | | |
| $ | 676,317,678 | | $ | 217,518,740 | | $ | 588,232,469 | | | $ | 6,071,039,894 | |
| | | | | | | | | | | | | |
| $ | 882,003,927 | | $ | 354,956,600 | | $ | 816,116,200 | | | $ | 9,325,944,098 | |
| | 1,201,247 | | | — | | | 962,975 | | | | 1,294,794 | |
| | — | | | — | | | — | | | | — | |
| | | | | | | | | | | | |
| | 2,982,911 | | | 80,737 | | | 13,148,838 | | | | 18,443,910 | |
| | 1,129,424 | | | 64,952 | | | 889,649 | | | | 8,906,387 | |
| | 167,449 | | | 373,711 | | | 856,837 | | | | 12,500,329 | |
| | 4,075 | | | — | | | 675 | | | | 20,946 | |
| | — | | | 961 | | | — | | | | — | |
| | — | | | — | | | — | | | | — | |
| | 80,213 | | | — | | | — | | | | 32,618 | |
| | 37,214 | | | 20,147 | | | 43,700 | | | | 510,432 | |
| | | | | | | | | | | | | |
| $ | 887,606,460 | | $ | 355,497,108 | | $ | 832,018,874 | | | $ | 9,367,653,514 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | — | | | 63,464 | | | — | | | | — | |
| | — | | | — | | | — | | | | 3,186,000 | |
| | | | | | | | | | | | |
| | 10,641,468 | | | — | | | 942,959 | | | | 43,470,158 | |
| | 255,797 | | | 59,126 | | | 242,980 | | | | 4,927,604 | |
| | — | | | — | | | — | | | | — | |
| | 516,604 | | | 185,100 | | | 502,629 | | | | 4,439,243 | |
| | 65,079 | | | 25,245 | | | 62,411 | | | | 751,022 | |
| | 12,104 | | | 11,742 | | | 37,790 | | | | 336,408 | |
| | 6,101 | | | 6,430 | | | 6,202 | | | | 7,011 | |
| | — | | | — | | | — | | | | 55,084 | |
| | 24,416 | | | 15,249 | | | 10,594 | | | | 99,688 | |
| | 198,333 | | | 101,133 | | | 254,485 | | | | 3,512,732 | |
| | 4 | | | 717 | | | 2,134 | | | | 3,011 | |
| | — | | | — | | | — | | | | — | |
| | — | | | — | | | — | | | | — | |
| | 81,315 | | | 88,113 | | | 102,575 | | | | 815,741 | |
| | | | | | | | | | | | | |
| $ | 11,801,221 | | $ | 556,319 | | $ | 2,164,759 | | | $ | 61,603,702 | |
| | | | | | | | | | | | | |
| $ | 875,805,239 | | $ | 354,940,789 | | $ | 829,854,115 | | | $ | 9,306,049,812 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | |
| $ | 72,052 | | $ | 154 | | $ | 39,657 | | | $ | 159,088 | |
| | 765,610,429 | | | 208,533,466 | | | 549,407,922 | | | | 5,957,888,237 | |
| | (2,969,869) | | | 2,828,263 | | | (2,108,086 | ) | | | 37,254,923 | |
| | (92,593,622) | | | 6,141,046 | | | 54,630,891 | | | | 56,914,288 | |
| | | | | | | | | | | | |
| | 205,686,249 | | | 137,437,860 | | | 227,883,731 | | | | 3,254,904,204 | |
| | — | | | — | | | — | | | | 1,860 | |
| | — | | | — | | | — | | | | — | |
| | — | | | — | | | — | | | | — | |
| | — | | | — | | | — | | | | (1,072,788 | ) |
| | | | | | | | | | | | | |
| $ | 875,805,239 | | $ | 354,940,789 | | $ | 829,854,115 | | | $ | 9,306,049,812 | |
| | | | | | | | | | | | | |
See Notes to Financial Statements.
29
Excelsior Funds
Statements of Assets and Liabilities — (continued)
September 30, 2007 (Unaudited)
| | | | | | | | |
| | |
| | | Core Bond
Fund | | |
Equity
Income
Fund | |
Retirement Shares | | | | | | | | |
Net assets | | $ | 1,090 | | | $ | 1,219 | |
Shares outstanding | | | 122 | | | | 122 | |
Net asset value and offering price per share | | $ | 8.96 | (a) | | $ | 10.03 | (a) |
Shares | | | | | | | | |
Net assets | | $ | 329,082,914 | | | $ | 235,594,830 | |
Shares outstanding | | | 36,733,338 | | | | 23,603,051 | |
Net asset value and offering price per share | | $ | 8.96 | | | $ | 9.98 | |
Institutional Shares | | | | | | | | |
Net assets | | $ | 218,946,712 | | | | — | |
Shares outstanding | | | 24,432,425 | | | | — | |
Net asset value and offering price per share | | $ | 8.96 | | | | — | |
Class A | | | | | | | | |
Net assets | | | — | | | | — | |
Shares outstanding | | | — | | | | — | |
Net asset value per share(b) | | | — | | | | — | |
Maximum sales charge | | | — | | | | — | |
Maximum offering price per share(c) | | | — | | | | — | |
Class C | | | | | | | | |
Net assets | | | — | | | | — | |
Shares outstanding | | | — | | | | — | |
Net asset value and offering price per share(b) | | | — | | | | — | |
| (a) | | Net asset value per share rounds due to fractional shares outstanding. |
| (b) | | Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. |
| (c) | | On sales of $50,000 or more the offering price is reduced. |
See Notes to Financial Statements.
30
| | | | | | | | | | | | | |
| | | |
Large Cap
Growth
Fund | | | Mid Cap
Value and
Restructuring
Fund | | Small Cap
Fund | | | Value and
Restructuring
Fund | |
| | | | | | | | | | | | | |
| $ | 11,500 | | | $ | 1,850,839 | | $ | 5,854,323 | | | $ | 8,251,685 | |
| | 962 | | | | 80,968 | | | 283,849 | | | | 141,164 | |
| $ | 11.95 | | | $ | 22.86 | | $ | 20.62 | | | $ | 58.45 | |
| | | | | | | | | | | | | |
| $ | 849,897,194 | | | $ | 321,635,768 | | $ | 823,979,966 | | | $ | 8,951,377,336 | |
| | 69,924,817 | | | | 13,946,642 | | | 39,372,053 | | | | 153,023,496 | |
| $ | 12.15 | | | $ | 23.06 | | $ | 20.93 | | | $ | 58.50 | |
| | | | | | | | | | | | | |
| $ | 25,876,593 | | | $ | 31,454,182 | | | — | | | $ | 346,400,817 | |
| | 2,124,311 | | | | 1,360,218 | | | — | | | | 5,923,241 | |
| $ | 12.18 | | | $ | 23.12 | | | — | | | $ | 58.48 | |
| | | | | | | | | | | | | |
| $ | 9,976 | | | | — | | $ | 9,913 | | | $ | 9,987 | |
| | 821 | | | | — | | | 474 | | | | 171 | |
| $ | 12.15 | | | | — | | $ | 20.93 | (a) | | $ | 58.50 | (a) |
| | 5.75 | % | | | — | | | 5.75 | % | | | 5.75 | % |
| $ | 12.89 | | | | — | | $ | 22.21 | | | $ | 62.07 | |
| | | | | | | | | | | | | |
| $ | 9,976 | | | | — | | $ | 9,913 | | | $ | 9,987 | |
| | 821 | | | | — | | | 474 | | | | 171 | |
| $ | 12.15 | | | | — | | $ | 20.93 | (a) | | $ | 58.50 | (a) |
See Notes to Financial Statements.
31
Excelsior Funds
Statements of Operations
For the Six Months Ended September 30, 2007 (Unaudited)
| | | | | | | | |
| | |
| | | Core Bond Fund | | | Equity Income
Fund | |
INVESTMENT INCOME | | | | | | | | |
Dividends | | $ | 347,439 | | | $ | 3,658,645 | |
Interest | | | 14,432,791 | | | | 5,113 | |
Foreign withholding tax | | | — | | | | (64,299 | ) |
| | | | | | | | |
Total Investment Income | | | 14,780,230 | | | | 3,599,459 | |
EXPENSES | | | | | | | | |
Investment advisory fee | | | 1,796,450 | | | | 911,144 | |
Administration fee | | | 411,888 | | | | 179,995 | |
Distribution fee: | | | | | | | | |
Retirement Shares | | | 2 | | | | 3 | |
Class C | | | — | | | | — | |
Shareholder servicing fee: | | | | | | | | |
Retirement Shares | | | 2 | | | | 1 | |
Shares | | | 400,341 | | | | 286,415 | |
Institutional Shares | | | — | | | | — | |
Class A | | | — | | | | — | |
Class C | | | — | | | | — | |
Transfer agent fee | | | 91,821 | | | | 37,821 | |
Pricing and bookkeeping fees | | | 15,922 | | | | 4,869 | |
Trustees’/Directors’ fees | | | 10,771 | | | | 10,117 | |
Custody fees | | | 20,331 | | | | 7,926 | |
Other expenses | | | 78,094 | | | | 32,136 | |
| | | | | | | | |
Expenses before interest expense | | | 2,825,622 | | | | 1,470,427 | |
Interest expense | | | — | | | | 767 | |
| | | | | | | | |
Total Expenses | | | 2,825,622 | | | | 1,471,194 | |
Fees waived/reimbursed by: | | | | | | | | |
Investment Advisor | | | (557,634 | ) | | | (103,496 | ) |
Administrator | | | (69,483 | ) | | | (29,942 | ) |
Custody earning credit | | | (1,706 | ) | | | (2,686 | ) |
| | | | | | | | |
Net Expenses | | | 2,196,799 | | | | 1,335,070 | |
| | | | | | | | |
NET INVESTMENT INCOME (LOSS) | | | 12,583,431 | | | | 2,264,389 | |
| | | | | | | | |
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY, WRITTEN OPTIONS, FUTURES CONTRACTS AND SWAP CONTRACTS | | | | | | | | |
Net realized gain (loss) on: | | | | | | | | |
Investments | | | 438,269 | | | | 6,277,732 | |
Foreign currency transactions | | | — | | | | 6,499 | |
Written options | | | — | | | | (819,151 | ) |
Futures contracts | | | 64,303 | | | | — | |
Swap contracts | | | 5,699 | | | | — | |
| | | | | | | | |
Net realized gain (loss) | | | 508,271 | | | | 5,465,080 | |
| | | | | | | | |
Net change in unrealized appreciation (depreciation) on: | | | | | | | | |
Investments | | | (1,889,913 | ) | | | 7,191,091 | |
Foreign currency translations | | | — | | | | 256 | |
Written options | | | — | | | | — | |
Futures contracts | | | 19,368 | | | | — | |
Swap contracts | | | 4,451 | | | | — | |
| | | | | | | | |
Net change in unrealized appreciation (depreciation) | | | (1,866,094 | ) | | | 7,191,347 | |
| | | | | | | | |
Net Gain (Loss) | | | (1,357,823 | ) | | | 12,656,427 | |
| | | | | | | | |
Net Increase Resulting from Operations | | $ | 11,225,608 | | | $ | 14,920,816 | |
| | | | | | | | |
| * | | Rounds to less than $1. |
See Notes to Financial Statements.
32
| | | | | | | | | | | | | | |
| | | |
Large Cap
Growth
Fund | | | Mid Cap Value
and Restructuring
Fund | | | Small Cap
Fund | | | Value and
Restructuring
Fund | |
| | | | | | | | | | | | | | |
| $ | 1,695,781 | | | $ | 5,207,492 | | | $ | 2,314,004 | | | $ | 121,552,689 | |
| | 78,291 | | | | 7,827 | | | | 256,593 | | | | 230,202 | |
| | (65,616 | ) | | | (59,725 | ) | | | — | | | | (978,162 | ) |
| | | | | | | | | | | | | | | |
| | 1,708,456 | | | | 5,155,594 | | | | 2,570,597 | | | | 120,804,729 | |
| | | | | | | | | | | | | | |
| | 2,975,452 | | | | 1,155,038 | | | | 2,909,308 | | | | 26,841,299 | |
| | 592,719 | | | | 264,171 | | | | 579,409 | | | | 6,744,653 | |
| | | | | | | | | | | | | | |
| 18
|
| | | 3,920 | | | | 9,248 | | | | 10,720 | |
| 1
|
| |
| —
|
| |
| 1
|
| | | 1 | |
| | | | | | | | | | | | | | |
| | 9 | | | | 1,960 | | | | 4,460 | | | | 5,177 | |
| | 952,487 | | | | 402,319 | | | | 965,145 | | | | 10,337,292 | |
| | — | | | | — | | | | — | | | | 53,483 | |
| | — | * | | | — | | | | — | * | | | — | * |
| | — | * | | | — | | | | — | * | | | — | * |
| | 85,663 | | | | 80,945 | | | | 168,792 | | | | 1,294,761 | |
| | 7,095 | | | | 6,543 | | | | 7,370 | | | | 7,277 | |
| | 14,224 | | | | 9,525 | | | | 13,818 | | | | 108,782 | |
| | 24,052 | | | | 15,269 | | | | 32,593 | | | | 299,009 | |
| | 133,015 | | | | 61,804 | | | | 96,998 | | | | 910,134 | |
| | | | | | | | | | | | | | | |
| | 4,784,735 | | | | 2,001,494 | | | | 4,787,142 | | | | 46,612,588 | |
| | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | |
| | 4,784,735 | | | | 2,001,494 | | | | 4,787,142 | | | | 46,612,588 | |
| | | | | | | | | | | | | | |
| | — | | | | — | | | | — | | | | — | |
| | (101,901 | ) | | | (44,647 | ) | | | (101,031 | ) | | | (1,134,346 | ) |
| | (4,509 | ) | | | (6,679 | ) | | | (7,428 | ) | | | (39,177 | ) |
| | | | | | | | | | | | | | | |
| | 4,678,325 | | | | 1,950,168 | | | | 4,678,683 | | | | 45,439,065 | |
| | | | | | | | | | | | | | | |
| | (2,969,869 | ) | | | 3,205,426 | | | | (2,108,086 | ) | | | 75,365,664 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | 31,509,475 | | | | (470,779 | ) | | | 47,099,972 | | | | 109,640,328 | |
| | — | | | | (160 | ) | | | — | | | | 89,300 | |
| | — | | | | — | | | | — | | | | (3,139,781 | ) |
| | — | | | | — | | | | — | | | | — | |
| | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | |
| | 31,509,475 | | | | (470,939 | ) | | | 47,099,972 | | | | 106,589,847 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | 81,732,156 | | | | 22,415,661 | | | | 18,990,141 | | | | 502,250,047 | |
| | — | | | | — | | | | — | | | | 8,579 | |
| | — | | | | — | | | | — | | | | (3,916,046 | ) |
| | — | | | | — | | | | — | | | | — | |
| | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | |
| | 81,732,156 | | | | 22,415,661 | | | | 18,990,141 | | | | 498,342,580 | |
| | | | | | | | | | | | | | | |
| | 113,241,631 | | | | 21,944,722 | | | | 66,090,113 | | | | 604,932,427 | |
| | | | | | | | | | | | | | | |
| $ | 110,271,762 | | | $ | 25,150,148 | | | $ | 63,982,027 | | | $ | 680,298,091 | |
| | | | | | | | | | | | | | | |
See Notes to Financial Statements.
33
Excelsior Funds
Statements of Changes in Net Assets
| | | | | | | | | | | | | | | | |
| | |
| | | Core Bond Fund | | | Equity Income Fund | |
Increase (Decrease) in Net Assets | | (Unaudited)
Six Months
Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | | | (Unaudited)
Six Months
Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | |
Operations | | | | | | | | | | | | | | | | |
Net investment income (loss) | | $ | 12,583,431 | | | $ | 18,645,393 | | | $ | 2,264,389 | | | $ | 3,898,080 | |
Net realized gain (loss) on investments, foreign currency transactions, futures contracts, swap contracts and written options | | | 508,271 | | | | (67,050 | ) | | | 5,465,080 | | | | 6,722,840 | |
Net realized gains from redemptions in-kind | | | — | | | | — | | | | — | | | | — | |
Net change in unrealized appreciation (depreciation) on investments, foreign currency translations, futures contracts, swap contracts and written options | | | (1,866,094 | ) | | | 5,359,028 | | | | 7,191,347 | | | | 16,574,010 | |
| | | | | | | | | | | | | | | | |
Net increase resulting from operations | | | 11,225,608 | | | | 23,937,371 | | | | 14,920,816 | | | | 27,194,930 | |
| | | | | | | | | | | | | | | | |
Distributions to Shareholders | | | | | | | | | | | | | | | | |
From net investment income: | | | | | | | | | | | | | | | | |
Retirement Shares | | | (22 | ) | | | (40 | ) | | | (10 | ) | | | (15 | ) |
Shares | | | (7,026,663 | ) | | | (12,851,594 | ) | | | (3,156,052 | ) | | | (4,109,886 | ) |
Institutional Shares | | | (5,385,011 | ) | | | (5,693,159 | ) | | | — | | | | — | |
From net realized gains: | | | | | | | | | | | | | | | | |
Retirement Shares | | | — | | | | — | | | | — | | | | — | |
Shares | | | — | | | | — | | | | — | | | | — | |
Institutional Shares | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | (12,411,696 | ) | | | (18,544,793 | ) | | | (3,156,062 | ) | | | (4,109,901 | ) |
| | | | | | | | | | | | | | | | |
Net Capital Share Transactions | | | (2,502,969 | ) | | | 263,311,270 | | | | (13,172,423 | ) | | | 8,064,710 | |
| | | | | | | | | | | | | | | | |
Net increase (decrease) in net assets | | | (3,689,057 | ) | | | 268,703,848 | | | | (1,407,669 | ) | | | 31,149,739 | |
| | | | | | | | | | | | | | | | |
NET ASSETS | | | | | | | | | | | | | | | | |
Beginning of period | | $ | 551,719,773 | | | $ | 283,015,925 | | | $ | 237,003,718 | | | $ | 205,853,979 | |
| | | | | | | | | | | | | | | | |
End of period | | $ | 548,030,716 | | | $ | 551,719,773 | | | $ | 235,596,049 | | | $ | 237,003,718 | �� |
| | | | | | | | | | | | | | | | |
Undistributed (overdistributed) net investment income, at end of period | | $ | 194,985 | | | $ | 23,250 | | | $ | 125,115 | | | $ | 1,016,788 | |
| | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
34
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | |
| Large Cap Growth Fund | | | Mid Cap Value
and Restructuring Fund | | | Small Cap Fund | | | Value and Restructuring Fund | |
(Unaudited)
Six Months
Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | | | (Unaudited)
Six Months
Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | | | (Unaudited)
Six Months
Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | | | (Unaudited)
Six Months
Ended
September 30,
2007 | | | Year Ended
March 31,
2007 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | (2,969,869 | ) | | $ | (4,255,930 | ) | | $ | 3,205,426 | | | $ | 3,160,394 | | | $ | (2,108,086 | ) | | $ | (4,043,832 | ) | | $ | 75,365,664 | | | $ | 66,434,678 | |
|
31,509,475 |
| | | 11,805,044 | | | | (470,939 | ) | | | 8,602,300 | | | | 47,099,972 | | | | 32,537,688 | | | | 106,589,847 | | | | 96,756,036 | |
| | — | | | | — | | | | — | | | | 23,046,664 | | | | — | | | | — | | | | — | | | | — | |
|
81,732,156 |
| | | 37,708,433 | | | | 22,415,661 | | | | (10,315,446 | ) | | | 18,990,141 | | | | 18,105,369 | | | | 498,342,580 | | | | 645,371,791 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 110,271,762 | | | | 45,257,547 | | | | 25,150,148 | | | | 24,493,912 | | | | 63,982,027 | | | | 46,599,225 | | | | 680,298,091 | | | | 808,562,505 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | — | | | | — | | | | (11,004 | ) | | | — | | | | — | | | | — | | | | (18,993 | ) | | | (4,928 | ) |
| | — | | | | — | | | | (3,023,143 | ) | | | (69,200 | ) | | | — | | | | — | | | | (52,036,862 | ) | | | (64,324,804 | ) |
| | — | | | | — | | | | (409,234 | ) | | | (28,083 | ) | | | — | | | | — | | | | (2,703,852 | ) | | | (3,526,597 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | — | | | | — | | | | — | | | | — | | | | — | | | | (3,801 | ) | | | — | | | | — | |
| | — | | | | — | | | | — | | | | (6,735 | ) | | | — | | | | (43,578,479 | ) | | | — | | | | — | |
| | — | | | | — | �� | | | — | | | | (812 | ) | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | — | | | | — | | | | (3,443,381 | ) | | | (104,830 | ) | | | — | | | | (43,582,280 | ) | | | (54,759,707 | ) | | | (67,856,329 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 31,097,354 | | | | 136,983,006 | | | | 6,117,253 | | | | (36,769,439 | ) | | | 69,279,781 | | | | 94,185,168 | | | | 539,354,612 | | | | 918,433,748 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 141,369,116 | | | | 182,240,553 | | | | 27,824,020 | | | | (12,380,357 | ) | | | 133,261,808 | | | | 97,202,113 | | | | 1,164,892,996 | | | | 1,659,139,924 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | 734,436,123 | | | $ | 552,195,570 | | | $ | 327,116,769 | | | $ | 339,497,126 | | | $ | 696,592,307 | | | $ | 599,390,194 | | | $ | 8,141,156,816 | | | $ | 6,482,016,892 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| $ | 875,805,239 | | | $ | 734,436,123 | | | $ | 354,940,789 | | | $ | 327,116,769 | | | $ | 829,854,115 | | | $ | 696,592,307 | | | $ | 9,306,049,812 | | | $ | 8,141,156,816 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| $ | (2,969,869 | ) | | $ | — | | | $ | 2,828,263 | | | $ | 3,066,218 | | | $ | (2,108,086 | ) | | $ | — | | | $ | 37,254,923 | | | $ | 16,648,966 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
35
Excelsior Funds
Statements of Changes in Net Assets — Capital Stock Activity
| | | | | | | | | | | | |
| |
| | | Core Bond Fund | |
| | | (Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | |
Changes in Shares | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
Retirement Shares | | | | | | | | | | | | |
Subscriptions | | — | | | — | | | — | | | — | |
Distributions reinvested | | 3 | | | 25 | | | 4 | | | 40 | |
Redemptions | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | |
Net increase | | 3 | | | 25 | | | 4 | | | 40 | |
Shares | | | | | | | | | | | | |
Subscriptions | | 4,131,808 | | | 36,758,471 | | | 9,986,679 | | | 88,776,364 | |
Subscriptions-in-kind | | — | | | — | | | — | | | — | |
Distributions reinvested | | 408,792 | | | 3,642,395 | | | 673,001 | | | 5,989,211 | |
Redemptions | | (2,772,989 | ) | | (24,631,216 | ) | | (7,567,445 | ) | | (67,312,972 | ) |
| | | | | | | | | | | | |
Net increase (decrease) | | 1,767,611 | | | 15,769,650 | | | 3,092,235 | | | 27,452,603 | |
Institutional Shares | | | | | | | | | | | | |
Subscriptions | | 1,608,329 | | | 14,318,071 | | | 2,772,888 | | | 24,623,459 | |
Proceeds received in connection with merger | | — | | | — | | | 25,148,666 | | | 225,504,856 | |
Distributions reinvested | | 129,411 | | | 1,153,959 | | | 113,170 | | | 1,016,339 | |
Redemptions | | (3,775,194 | ) | | (33,744,674 | ) | | (1,706,058 | ) | | (15,286,027 | ) |
| | | | | | | | | | | | |
Net increase (decrease) | | (2,037,454 | ) | | (18,272,644 | ) | | 26,328,666 | | | 235,858,627 | |
Class A | | | | | | | | | | | | |
Subscriptions | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | |
Class C | | | | | | | | | | | | |
Subscriptions | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | |
Redemption Fees | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | |
See Notes to Financial Statements.
36
| | | | | | | | | | | | | | | | | | | | | | |
| |
| Equity Income Fund | | | Large Cap Growth Fund | |
(Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | | | (Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | |
| Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
| | | | | | | | | | | | | | | | | | | | | | |
| — | | | — | | | — | | | — | | | 745 | | | 8,171 | | | 172 | | | 1,807 | |
| 2 | | | 10 | | | 1 | | | 15 | | | — | | | — | | | — | | | — | |
| — | | | — | | | — | | | — | | | (77 | ) | | (822 | ) | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| 2 | | | 10 | | | 1 | | | 15 | | | 668 | | | 7,349 | | | 172 | | | 1,807 | |
| | | | | | | | | | | | | | | | | | | | | | |
| 966,389 | | | 9,544,654 | | | 4,666,621 | | | 41,851,327 | | | 8,464,143 | | | 94,946,565 | | | 26,983,018 | | | 268,887,660 | |
| — | | | — | | | 526,198 | | | 4,483,204 | | | — | | | — | | | — | | | — | |
| 53,793 | | | 527,860 | | | 77,298 | | | 675,808 | | | — | | | — | | | — | | | — | |
| (2,345,303 | ) | | (23,244,947 | ) | | (4,395,745 | ) | | (38,945,714 | ) | | (6,290,633 | ) | | (70,638,170 | ) | | (14,969,954 | ) | | (147,806,621 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| (1,325,121 | ) | | (13,172,433 | ) | | 874,372 | | | 8,064,625 | | | 2,173,510 | | | 24,308,395 | | | 12,013,064 | | | 121,081,039 | |
| | | | | | | | | | | | | | | | | | | | | | |
| — | | | — | | | — | | | — | | | 639,159 | | | 7,008,651 | | | 1,518,333 | | | 15,997,075 | |
| — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| — | | | — | | | — | | | — | | | (23,086 | ) | | (255,856 | ) | | (10,095 | ) | | (106,750 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| — | | | — | | | — | | | — | | | 616,073 | | | 6,752,795 | | | 1,508,238 | | | 15,890,325 | |
| | | | | | | | | | | | | | | | | | | | | | |
| — | | | — | | | — | | | — | | | 821 | | | 10,000 | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| — | | | — | | | — | | | — | | | 821 | | | 10,000 | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| — | | | — | | | — | | | 70 | | | — | | | 8,815 | | | — | | | 9,835 | |
| | | | | | | | | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
37
Excelsior Funds
Statements of Changes in Net Assets — Capital Stock Activity — (continued)
| | | | | | | | | | | | |
| |
| | | Mid Cap Value and Restructuring Fund | |
| | | (Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | |
Changes in Shares | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
Retirement Shares | | | | | | | | | | | | |
Subscriptions | | 36,280 | | | 821,293 | | | 51,153 | | | 1,086,065 | |
Distributions reinvested | | 506 | | | 11,004 | | | — | | | — | |
Redemptions | | (6,911 | ) | | (153,942 | ) | | (118 | ) | | (2,475 | ) |
| | | | | | | | | | | | |
Net increase | | 29,875 | | | 678,355 | | | 51,035 | | | 1,083,590 | |
Shares | | | | | | | | | | | | |
Subscriptions | | 1,559,841 | | | 35,513,246 | | | 3,915,673 | | | 81,532,520 | |
Distributions reinvested | | 59,014 | | | 1,299,594 | | | 1,544 | | | 28,679 | |
Redemptions | | (1,296,696 | ) | | (29,206,361 | ) | | (2,387,520 | ) | | (47,782,321 | ) |
| | | | | | | | | | | | |
Net increase | | 322,159 | | | 7,606,479 | | | 1,529,697 | | | 33,778,878 | |
Institutional Shares | | | | | | | | | | | | |
Subscriptions | | 87,974 | | | 2,059,041 | | | 174,817 | | | 3,499,002 | |
Distributions reinvested | | 2,915 | | | 64,589 | | | 211 | | | 3,893 | |
Redemptions | | (184,991 | ) | | (4,291,248 | ) | | (435,896 | ) | | (8,797,430 | ) |
Redemptions-in-kind | | — | | | — | | | (3,464,185 | ) | | (66,339,150 | ) |
| | | | | | | | | | | | |
Net increase (decrease) | | (94,102 | ) | | (2,167,618 | ) | | (3,725,053 | ) | | (71,633,685 | ) |
Class A | | | | | | | | | | | | |
Subscriptions | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | |
Class C | | | | | | | | | | | | |
Subscriptions | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | |
Redemption Fees | | — | | | 37 | | | — | | | 1,778 | |
| | | | | | | | | | | | |
See Notes to Financial Statements.
38
| | | | | | | | | | | | | | | | | | | | | | |
| |
| Small Cap Fund | | | Value and Restructuring Fund | |
(Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | | | (Unaudited)
Six Months Ended
September 30, 2007 | | | Year Ended
March 31, 2007 | |
| Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | | | Shares | | | Dollars ($) | |
| | | | | | | | | | | | | | | | | | | | | | |
| 235,936 | | | 4,746,659 | | | 100,714 | | | 1,845,960 | | | 92,865 | | | 5,225,317 | | | 62,302 | | | 3,214,887 | |
| — | | | — | | | 211 | | | 3,801 | | | 331 | | | 18,993 | | | 99 | | | 4,928 | |
| (48,373 | ) | | (968,034 | ) | | (4,702 | ) | | (85,527 | ) | | (5,912 | ) | | (339,933 | ) | | (26,673 | ) | | (1,242,118 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| 187,563 | | | 3,778,625 | | | 96,223 | | | 1,764,234 | | | 87,284 | | | 4,904,377 | | | 35,728 | | | 1,977,697 | |
| | | | | | | | | | | | | | | | | | | | | | |
| 7,113,887 | | | 144,947,132 | | | 11,007,156 | | | 202,519,992 | | | 20,544,409 | | | 1,192,492,183 | | | 40,342,962 | | | 2,018,418,152 | |
| — | | | — | | | 873,688 | | | 15,909,286 | | | 737,965 | | | 42,355,044 | | | 1,056,240 | | | 51,956,233 | |
| (3,914,296 | ) | | (79,465,976 | ) | | (6,873,489 | ) | | (126,011,173 | ) | | (11,223,117 | ) | | (646,514,862 | ) | | (24,661,734 | ) | | (1,238,518,628 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| 3,199,591 | | | 65,481,156 | | | 5,007,355 | | | 92,418,105 | | | 10,059,257 | | | 588,332,365 | | | 16,737,468 | | | 831,855,757 | |
| | | | | | | | | | | | | | | | | | | | | | |
| — | | | — | | | — | | | — | | | 1,060,844 | | | 62,185,075 | | | 2,608,744 | | | 127,478,205 | |
| — | | | — | | | — | | | — | | | 39,759 | | | 2,272,698 | | | 59,732 | | | 2,938,434 | |
| — | | | — | | | — | | | — | | | (1,996,347 | ) | | (118,375,818 | ) | | (921,391 | ) | | (45,845,721 | ) |
| — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| — | | | — | | | — | | | — | | | (895,744 | ) | | (53,918,045 | ) | | 1,747,085 | | | 84,570,918 | |
| | | | | | | | | | | | | | | | | | | | | | |
| 474 | | | 10,000 | | | — | | | — | | | 171 | | | 10,000 | | | — | | | — | |
| | | | | | | | | �� | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| 474 | | | 10,000 | | | — | | | — | | | 171 | | | 10,000 | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | |
| — | | | — | | | — | | | 2,829 | | | — | | | 15,915 | | | — | | | 29,376 | |
| | | | | | | | | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
39
Financial Highlights – Core Bond Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30,
2007 | | | Year Ended March 31, | | | Period
Ended
March 31, 2005 (a) | |
| | | | 2007 | | | 2006 | | |
Net Asset Value, Beginning of Period | | $ | 8.98 | | | $ | 8.85 | | | $ | 9.16 | | | $ | 9.27 | |
| | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | |
Net investment income (b) | | | 0.18 | | | | 0.34 | | | | 0.33 | | | | 0.07 | |
Net realized and unrealized gain (loss) on investments, futures contracts and swap contracts | | | (0.02 | ) | | | 0.13 | | | | (0.19 | ) | | | (0.06 | ) |
| | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.16 | | | | 0.47 | | | | 0.14 | | | | 0.01 | |
| | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | |
From net investment income | | | (0.18 | ) | | | (0.34 | ) | | | (0.33 | ) | | | (0.12 | ) |
From net realized gains | | | — | | | | — | | | | (0.12 | ) | | | — | |
| | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | (0.18 | ) | | | (0.34 | ) | | | (0.45 | ) | | | (0.12 | ) |
| | | | |
Net Asset Value, End of Period | | $ | 8.96 | | | $ | 8.98 | | | $ | 8.85 | | | $ | 9.16 | |
Total return (c)(d) | | | 1.82 | %(e) | | | 5.47 | % | | | 1.48 | % | | | 0.10 | %(e) |
| | | | |
Ratios to Average Net Assets/
Supplemental Data: | | | | | | | | | | | | | | | | |
Net expenses (f) | | | 1.40 | %(g) | | | 1.40 | % | | | 1.40 | % | | | 1.40 | %(g) |
Waiver/Reimbursement | | | 0.23 | %(g) | | | 0.30 | % | | | 0.38 | % | | | 0.37 | %(g) |
Net investment income (f) | | | 4.11 | %(g) | | | 3.86 | % | | | 3.57 | % | | | 3.60 | %(g) |
Portfolio turnover rate | | | 29 | %(e) | | | 49 | % | | | 95 | % | | | 90 | %(e) |
Net assets, end of period (000’s) | | $ | 1 | | | $ | 1 | | | $ | 1 | | | $ | 1 | |
| (a) | Retirement Shares commenced operations on December 31, 2004. Per share data and total return reflect activity from that date. |
| (b) | Per share data was calculated using the average shares outstanding during the period. |
| (c) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (d) | Total return at net asset value assuming all distributions reinvested. |
| (f) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
40
Financial Highlights – Equity Income Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30,
2007 | | | Year Ended March 31, | | | Period
Ended
March 31, 2005 (a) | |
| | | | 2007 | | | 2006 | | |
Net Asset Value, Beginning of Period | | $ | 9.54 | | | $ | 8.59 | | | $ | 8.43 | | | $ | 8.50 | |
| | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | |
Net investment income (b) | | | 0.07 | | | | 0.12 | | | | 0.15 | | | | — | (c) |
Net realized and unrealized gain (loss) on investments, foreign currency and written options | | | 0.51 | | | | 0.96 | | | | 0.18 | | | | (0.07 | ) |
| | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 0.58 | | | | 1.08 | | | | 0.33 | | | | (0.07 | ) |
| | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | |
From net investment income | | | (0.09 | ) | | | (0.13 | ) | | | (0.15 | ) | | | — | |
From net realized gains | | | — | | | | — | | | | (0.02 | ) | | | — | |
| | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | (0.09 | ) | | | (0.13 | ) | | | (0.17 | ) | | | — | |
| | | | |
Net Asset Value, End of Period | | $ | 10.03 | | | $ | 9.54 | | | $ | 8.59 | | | $ | 8.43 | |
Total return (d)(e) | | | 6.05 | %(f) | | | 12.68 | % | | | 4.04 | % | | | (1.52 | )%(f) |
| | | | |
Ratios to Average Net Assets/Supplemental Data: | | | | | | | | | | | | | | | | |
Net expenses before interest expense (g) | | | 1.60 | %(h) | | | 1.59 | % | | | 1.60 | % | | | 1.55 | %(h) |
Interest expense | | | — | %(h)(i) | | | — | | | | — | | | | — | |
Net expenses (g) | | | 1.60 | %(h) | | | 1.59 | % | | | 1.60 | % | | | 1.55 | %(h) |
Waiver/Reimbursement | | | 0.11 | %(h) | | | 0.12 | % | | | 0.24 | % | | | 0.21 | %(h) |
Net investment income (g) | | | 1.33 | %(h) | | | 1.29 | % | | | 1.78 | % | | | 0.02 | %(h) |
Portfolio turnover rate | | | 6 | %(f) | | | 27 | % | | | 46 | % | | | 19 | %(f) |
Net assets, end of period (000’s) | | $ | 1 | | | $ | 1 | | | $ | 1 | | | $ | 1 | |
| (a) | Retirement Shares commenced operations on December 31, 2004. Per share data and total return reflect activity from that date. |
| (b) | Per share data was calculated using the average shares outstanding during the period. |
| (c) | Amount represents less than $0.01 per share. |
| (d) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (e) | Total return at net asset value assuming all distributions reinvested. |
| (g) | The benefits derived from custody credits had an impact of less than 0.01%, except for the year ended March 31, 2007, which had an impact of 0.01%. |
| (i) | Rounds to less than 0.01% per share. |
See Notes to Financial Statements.
41
Financial Highlights – Large Cap Growth Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30,
2007 | | | Year Ended March 31, | | | Period
Ended
March 31, 2005 (a) | |
| | | | 2007 | | | 2006 | | |
Net Asset Value, Beginning of Period | | $ | 10.45 | | | $ | 9.82 | | | $ | 8.02 | | | $ | 8.49 | |
| | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | |
Net investment loss (b) | | | (0.07 | ) | | | (0.12 | ) | | | (0.11 | ) | | | (0.03 | ) |
Net realized and unrealized gain (loss) on investments | | | 1.57 | | | | 0.75 | | | | 1.91 | | | | (0.44 | ) |
| | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 1.50 | | | | 0.63 | | | | 1.80 | | | | (0.47 | ) |
| | | | |
Net Asset Value, End of Period | | $ | 11.95 | | | $ | 10.45 | | | $ | 9.82 | | | $ | 8.02 | |
Total return (c)(d) | | | 14.35 | %(e) | | | 6.42 | % | | | 22.44 | % | | | (5.54 | )%(e) |
| | | | |
Ratios to Average Net Assets/
Supplemental Data: | | | | | | | | | | | | | | | | |
Net expenses (f) | | | 1.69 | %(g) | | | 1.69 | % | | | 1.70 | % | | | 1.55 | %(g) |
Waiver/Reimbursement | | | 0.03 | %(g) | | | 0.01 | % | | | 0.29 | % | | | 0.23 | %(g) |
Net investment loss (f) | | | (1.26 | )%(g) | | | (1.18 | )% | | | (1.20 | )% | | | (1.45 | )%(g) |
Portfolio turnover rate | | | 23 | %(e) | | | 33 | % | | | 24 | % | | | 25 | %(e) |
Net assets, end of period (000’s) | | $ | 12 | | | $ | 3 | | | $ | 3 | | | $ | 1 | |
| (a) | Retirement Shares commenced operations on December 31, 2004. Per share data and total return reflect activity from that date. |
| (b) | Per share data was calculated using the average shares outstanding during the period. |
| (c) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (d) | Total return at net asset value assuming all distributions reinvested. |
| (f) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
42
Financial Highlights – Mid Cap Value and Restructuring Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30, 2007 | | | Year Ended March 31, | | | Period
Ended
March 31, 2005 (a) | |
| | | | 2007 | | | 2006 | | |
Net Asset Value, Beginning of Period | | $ | 21.48 | | | $ | 19.62 | | | $ | 16.78 | | | $ | 17.26 | |
| | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | |
Net investment income (loss) (b) | | | 0.11 | | | | 0.70 | | | | (0.06 | ) | | | (0.01 | ) |
Net realized and unrealized gain (loss) on investments | | | 1.49 | | | | 1.16 | | | | 2.90 | | | | (0.47 | ) |
| | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 1.60 | | | | 1.86 | | | | 2.84 | | | | (0.48 | ) |
| | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | |
From net investment income | | | (0.22 | ) | | | — | | | | — | | | | — | |
From net realized gains | | | — | | | | — | (c) | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
Total Distributions to Shareholders | | | (0.22 | ) | | | — | (c) | | | — | | | | — | |
| | | | |
Net Asset Value, End of Period | | $ | 22.86 | | | $ | 21.48 | | | $ | 19.62 | | | $ | 16.78 | |
Total return (d) | | | 7.49 | %(e)(f) | | | 9.48 | %(e) | | | 16.92 | % | | | (3.01 | )%(e)(f) |
| | | | |
Ratios to Average Net Assets/
Supplemental Data: | | | | | | | | | | | | | | | | |
Net expenses (g) | | | 1.62 | %(h) | | | 1.61 | % | | | 1.46 | % | | | 1.56 | %(h) |
Waiver/Reimbursement | | | 0.03 | %(h) | | | 0.03 | % | | | — | | | | 0.10 | %(h) |
Net investment income (loss) (g) | | | 0.94 | %(h) | | | 3.38 | % | | | (0.34 | )% | | | (0.13 | )%(h) |
Portfolio turnover rate | | | 4 | %(f) | | | 25 | % | | | 23 | % | | | 28 | %(f) |
Net assets, end of period (000’s) | | $ | 1,851 | | | $ | 1,097 | | | $ | 1 | | | $ | 1 | |
| (a) | Retirement Shares commenced operations on December 31, 2004. Per share data and total return reflect activity from that date. |
| (b) | Per share data was calculated using the average shares outstanding during the period. |
| (c) | Amount represents less than $0.01 per share. |
| (d) | Total return at net asset value assuming all distributions reinvested. |
| (e) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (g) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
43
Financial Highlights – Small Cap Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30, 2007 | | | Year Ended March 31, | | | Period
Ended
March 31, 2005 (a) | |
| | | | 2007 | | | 2006 | | |
Net Asset Value, Beginning of Period | | $ | 18.98 | | | $ | 19.12 | | | $ | 16.12 | | | $ | 17.00 | |
| | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | |
Net investment loss (b) | | | (0.10 | ) | | | (0.22 | ) | | | (0.19 | ) | | | (0.04 | ) |
Net realized and unrealized gain (loss) on investments | | | 1.74 | | | | 1.34 | | | | 4.08 | | | | (0.84 | ) |
| | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 1.64 | | | | 1.12 | | | | 3.89 | | | | (0.88 | ) |
| | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | |
From net realized gains | | | — | | | | (1.26 | ) | | | (0.89 | ) | | | — | |
| | | | |
Net Asset Value, End of Period | | $ | 20.62 | | | $ | 18.98 | | | $ | 19.12 | | | $ | 16.12 | |
Total return (c) | | | 8.64 | %(d)(e) | | | 6.23 | % | | | 24.83 | % | | | (5.23 | )%(d)(e) |
| | | | |
Ratios to Average Net Assets/
Supplemental Data: | | | | | | | | | | | | | | | | |
Net expenses (f) | | | 1.70 | %(g) | | | 1.74 | % | | | 1.56 | % | | | 1.55 | %(g) |
Waiver/Reimbursement | | | 0.03 | %(g) | | | — | | | | — | | | | 0.03 | %(g) |
Net investment loss (f) | | | (0.95 | )%(g) | | | (1.21 | )% | | | (1.13 | )% | | | (1.28 | )%(g) |
Portfolio turnover rate | | | 35 | %(d) | | | 52 | % | | | 65 | % | | | 61 | %(d) |
Net assets, end of period (000’s) | | $ | 5,854 | | | $ | 1,827 | | | $ | 1 | | | $ | 1 | |
| (a) | Retirement Shares commenced operations on December 31, 2004. Per share data and total return reflect activity from that date. |
| (b) | Per share data was calculated using the average shares outstanding during the period. |
| (c) | Total return at net asset value assuming all distributions reinvested. |
| (e) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (f) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
44
Financial Highlights – Value and Restructuring Fund
Selected data for a share outstanding throughout each period is as follows:
| | | | | | | | | | | | | | | | |
| | | (Unaudited) Six Months
Ended
September 30, 2007 | | | Year Ended March 31, | | | Period
Ended
March 31, 2005 (a) | |
| | | | 2007 | | | 2006 | | |
Net Asset Value, Beginning of Period | | $ | 54.30 | | | $ | 49.35 | | | $ | 41.49 | | | $ | 42.43 | |
| | | | |
Income from Investment Operations: | | | | | | | | | | | | | | | | |
Net investment income (loss) (b) | | | 0.28 | | | | 0.22 | | | | 0.42 | | | | (0.04 | ) |
Net realized and unrealized gain (loss) on investments, foreign currency and written options | | | 4.09 | | | | 4.98 | | | | 7.81 | | | | (0.90 | ) |
| | | | | | | | | | | | | | | | |
Total from Investment Operations | | | 4.37 | | | | 5.20 | | | | 8.23 | | | | (0.94 | ) |
| | | | |
Less Distributions to Shareholders: | | | | | | | | | | | | | | | | |
From net investment income | | | (0.22 | ) | | | (0.25 | ) | | | (0.37 | ) | | | — | |
| | | | |
Net Asset Value, End of Period | | $ | 58.45 | | | $ | 54.30 | | | $ | 49.35 | | | $ | 41.49 | |
Total return (c) | | | 8.06 | %(d)(e) | | | 10.58 | % | | | 19.95 | % | | | (2.58 | )%(d)(e) |
| | | | |
Ratios to Average Net Assets/
Supplemental Data: | | | | | | | | | | | | | | | | |
Net expenses (f) | | | 1.54 | %(g) | | | 1.55 | % | | | 1.56 | % | | | 1.57 | %(g) |
Waiver/Reimbursement | | | 0.03 | %(g) | | | — | | | | — | | | | 0.02 | %(g) |
Net investment income (loss) (f) | | | 0.97 | %(g) | | | 0.43 | % | | | 0.90 | % | | | (0.35 | )%(g) |
Portfolio turnover rate | | | 5 | %(e) | | | 13 | % | | | 12 | % | | | 8 | %(e) |
Net assets, end of period (000’s) | | $ | 8,252 | | | $ | 2,926 | | | $ | 896 | | | $ | 1 | |
| (a) | Retirement Shares commenced operations on December 31, 2004. Per share data and total return reflect activity from that date. |
| (b) | Per share data was calculated using the average shares outstanding during the period. |
| (c) | Total return at net asset value assuming all distributions reinvested. |
| (d) | Had the investment advisor and/or any of its affiliates not waived fees or reimbursed a portion of expenses, total return would have been reduced. |
| (f) | The benefits derived from custody credits had an impact of less than 0.01%. |
See Notes to Financial Statements.
45
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS
September 30, 2007 (Unaudited)
Excelsior Funds, Inc. (“Excelsior Fund”) is organized as a Maryland Corporation. Excelsior Funds Trust (the “Trust”) is organized as a Delaware business trust. Excelsior Fund and the Trust are registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as open-end, management investment companies. Information presented in these financial statements pertains to the following diversified funds (individually referred to as a “Fund”, collectively referred to as the “Funds”):
Excelsior Fund:
Core Bond Fund
Large Cap Growth Fund
Small Cap Fund
Value and Restructuring Fund
The Trust:
Equity Income Fund
Mid Cap Value and Restructuring Fund
Investment Objectives
Core Bond Fund seeks high current income consistent with what is believed to be prudent risk of capital. Equity Income Fund seeks total return on assets through capital appreciation and income. Large Cap Growth Fund seeks superior, long-term capital appreciation by investing in larger companies whose growth prospects, in the opinion of the Advisor, appear to exceed that of the overall market. Mid Cap Value and Restructuring Fund and Value and Restructuring Fund each seeks long-term capital appreciation by investing in companies that will benefit from their restructuring or redeployment of assets and operations in order to become more competitive or profitable. Small Cap Fund seeks long-term capital appreciation.
Fund Shares
Excelsior Fund is authorized to issue up to 42.5 billion shares of common stock with a par value of $0.001 per share. Authorized capital currently offered for each Fund is as follows: 3.5 billion shares of Value and Restructuring Fund; 3.0 billion shares each of Large Cap Growth Fund; 2.5 billion shares of Small Cap Fund; and 1.250 billion shares of Core Bond Fund. The Trust may issue an unlimited number of shares of beneficial interest of each class of each Fund, with a par value of $0.00001.
Equity Income Fund offers two classes of shares: Retirement Shares and Shares. Core Bond Fund and Mid Cap Value and Restructuring Fund offer three classes of shares: Retirement Shares, Shares and Institutional Shares. Small Cap Fund offers four classes of shares: Retirement Shares, Shares, Class A Shares and Class C Shares. Large Cap Growth Fund and Value and Restructuring Fund offer five classes of shares: Retirement Shares, Shares, Class A Shares, Class C Shares and Institutional Shares. The Class A Shares and Class C Shares commenced operations on September 28, 2007 and were available for sale on October 1, 2007. The financial highlights of the Shares, Class A Shares, Class C Shares and Institutional Shares are presented separately.
46
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
Retirement Shares, Shares and Institutional Shares and are offered continuously at net asset value. There are certain restrictions on the purchase of Retirement Shares and Institutional Shares, as described in the Funds’ prospectuses. Class A Shares are subject to a maximum front-end sales charge of 5.75% based on the amount of initial investment. Class A Shares purchased without an initial sales charge in accounts aggregating from $1 million up to $50 million at the time of purchase are subject to a 1.00% contingent deferred sales charge (“CDSC”) if the shares are sold within twelve months after purchase. Class C Shares are subject to a 1.00% CDSC on shares sold within twelve months after purchase.
| Note 2. | Significant Accounting Policies |
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Certain ratios have been reclassified on the Financial Highlights to conform to the current period presentation. The changes have no effect on the ratios. The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements.
Security Valuation
Debt securities generally are valued by pricing services approved by the Board of Directors with regard to Excelsior Fund and the Board of Trustees with regard to the Trust, based upon market transactions for normal, institutional-size trading units of similar securities. The services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. Debt securities for which quotations are readily available are valued at an over-the-counter or exchange bid quotation.
Equity securities are valued at the last sale price on the principal exchange on which they trade, except for securities traded on the NASDAQ, which are valued at the NASDAQ official close price. Unlisted securities or listed securities for which there were no sales during the day are valued at the closing bid price on such exchanges or over-the-counter markets.
Short-term debt obligations maturing within 60 days are valued at amortized cost, which approximates market value.
Investments in other open-end investment companies are valued at net asset value.
Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
Options are valued at the last reported sale price, or in the absence of a sale, the mean between the last quoted bid and ask price.
Swap agreements are stated at fair value.
47
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
Foreign securities are generally valued at the last sale price on the foreign exchange or market on which they trade. If any foreign share prices are not readily available as a result of limited share activity, the securities are valued at the last sale price of the local shares in the principal market in which such securities are normally traded.
Generally, trading in foreign securities is substantially completed each day at various times prior to the close of the New York Stock Exchange (“NYSE”). The values of such securities used in computing the net asset value of the Funds’ shares are determined as of such times. Foreign currency exchange rates are generally determined at 4:00 p.m. Eastern (U.S.) time. Occasionally, events affecting the values of such foreign securities and such exchange rates may occur between the times at which they are determined and the close of the customary trading session of the NYSE, which would not be reflected in the computation of the Funds’ net asset value. If events materially affecting the values of such foreign securities occur and it is determined that market quotations are not reliable, then these foreign securities will be valued at their “fair value” using procedures approved by the Board of Directors with regard to Excelsior Fund and the Board of Trustees with regard to the Trust.
Investments for which market quotations are not readily available, or that have quotations which management believes are not reliable, are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Directors with regard to Excelsior Fund and the Board of Trustees with regard to the Trust. If a security is valued at fair value such value is likely to be different from the last quoted market price for the security.
In September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS 157”), was issued. SFAS 157 is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is evaluating the impact the application of SFAS 157 will have on the Funds’ financial statement disclosures.
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes.
Futures Contracts
Each Fund may invest in futures contracts to gain or reduce exposure to particular securities or segments of the bond markets. Futures contracts are financial instruments whose values depend on, or are derived from, the value of the underlying security, index or currency. The Funds may use futures contracts for both hedging and non-hedging purposes, such as to adjust the Funds’ sensitivity to changes in interest rates, or to offset a potential loss in one position by establishing an opposite position. The Funds typically use futures contracts in an effort to achieve economic exposure similar to that which they could have achieved through the purchase and sale of fixed income securities more efficiently.
48
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
The use of futures contracts involves certain risks, which include: (1) imperfect correlation between the price movement of the instruments and the underlying securities, (2) inability to close out positions due to differing trading hours, or the temporary absence of a liquid market, for either the instrument or the underlying securities, and (3) an inaccurate prediction by the Funds’ investment advisor of the future direction of interest rates. Any of these risks may involve amounts exceeding the variation margin recorded in the Funds’ Statements of Assets and Liabilities at any given time.
Upon entering into a futures contract, a Fund deposits cash or securities with the broker in an amount sufficient to meet the initial margin requirement. Subsequent payments are made or received by a Fund equal to the daily change in the contract value and are recorded as variation margin receivable or payable and offset in unrealized gains or losses. A Fund recognizes a realized gain or loss when the contract is closed or expires.
Options
Certain Funds may write call and put options on securities they own or in which they may invest. Writing put options tends to increase the Funds’ exposure to the underlying instrument. Writing call options tends to decrease the Funds’ exposure to the underlying instrument. When the Funds write a call or put option, an amount equal to the premium received is recorded as a liability and subsequently marked-to-market to reflect the current value of the option written. Premiums received from writing options which expire are treated as realized gains. Premiums received from writing options which are exercised or closed are added to the proceeds or offset against the amounts paid on the underlying transaction to determine the realized gain or loss. Each Fund as a writer of an option has no control over whether the underlying security may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the security underlying the written option. There is the risk that the Funds may not be able to enter into a closing transaction because of an illiquid market. The Funds’ custodian will set aside cash or liquid portfolio securities equal to the amount of the written options contract commitment in a separate account.
Each Fund may also purchase put and call options. Purchasing call options tends to increase the Funds’ exposure to the underlying instrument. Purchasing put options tends to decrease the Funds’ exposure to the underlying instrument. Each Fund may pay a premium, which is included in the Funds’ Statements of Assets and Liabilities as an investment and subsequently marked-to-market to reflect the current value of the option. The risk associated with purchasing put and call options is limited to the premium paid. Premiums paid for purchasing options which expire are treated as realized losses. Premiums paid for purchasing options which are exercised or closed are added to the amounts paid or offset against the proceeds on the underlying transaction to determine the realized gain or loss.
Repurchase Agreements
Each Fund may engage in repurchase agreement transactions with institutions that the Funds’ investment advisor has determined are creditworthy. Each Fund, through its custodian, receives delivery of underlying securities collateralizing a repurchase agreement. The investment advisor is responsible
49
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
for determining that collateral is at least equal, at all times, to the value of the repurchase obligation including interest. A repurchase agreement transaction involves certain risks in the event of default or insolvency of the counterparty. These risks include possible delays or restrictions upon each Fund’s ability to dispose of the underlying securities and a possible decline in the value of the underlying securities during the period while the Fund seeks to assert its rights.
Swap Contracts
Certain Funds may engage in swap transactions such as interest rate swaps, consistent with their investment objective and policies, to obtain a desired return at a lower cost than if the Funds had invested directly in the asset that yielded the desired return.
Swaps involve the exchange by a Fund with another party of their respective commitments to pay or receive interest or total return throughout the lives of the agreements. The interest to be paid or received on swaps is included in realized gain (loss) on investments. Unrealized gains are reported as an asset and unrealized losses are reported as a liability on the Statements of Assets and Liabilities. A realized gain or loss is recorded upon termination of swap agreements and is equal to the difference between the Fund’s basis in the swap and the proceeds from (or cost of) the closing transaction. Swap agreements are stated at fair value. Notional principal amounts are used to express the extent of involvement in these transactions, but the amounts potentially subject to credit risk are much smaller.
If there is a default by the counterparty to a swap contract, the Funds will be limited to contractual remedies pursuant to the agreements related to the transaction. There is no assurance that the swap contract counterparties will be able to meet their obligations pursuant to the swap contracts or that, in the event of default, the Funds will succeed in pursuing contractual remedies. The Funds thus assume the risk that they may be delayed in or prevented from obtaining payments owed to them pursuant to the swap contracts.
The use of derivative instruments involves, to varying degrees, elements of market risk in excess of the amount recognized in the Statements of Assets and Liabilities.
Treasury Inflation Protected Securities
Certain Funds may invest in Treasury Inflation Protected Securities (“TIPS”). The principal amount of TIPS is adjusted periodically for inflation based on a monthly published index. Interest payments are based on the inflation-adjusted principal at the time the interest is paid.
Income Recognition
Interest income is recorded on the accrual basis. Premium and discount are amortized and accreted, respectively, on debt securities. Corporate actions and dividend income are recorded on the ex-date except for certain foreign securities which are recorded as soon after the ex-date as the Fund becomes aware of such, net of any non-reclaimable tax withholdings. Distributions received from real estate
50
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
investment trusts (REITs) in excess of their income are recorded as a reduction of the cost of the related investments and/or realized gains as applicable. If the Fund no longer owns the applicable securities, any distributions received in excess of income are recorded as realized gains. The value of additional securities received as an income payment is recorded as income and as the cost basis of such securities.
Foreign Currency Transactions
The values of all assets and liabilities quoted in foreign currencies are translated into U.S. dollars at that day’s exchange rates. Net realized and unrealized gains (losses) on foreign currency transactions include gains (losses) arising from the fluctuation in exchange rates between trade and settlement dates on securities transactions, gains (losses) arising from the disposition of foreign currency and currency gains (losses) between the accrual and payment dates on dividends, interest income and foreign withholding taxes.
For financial statement purposes, the Funds do not distinguish that portion of gains (losses) on investments which is due to changes in foreign exchange rates from that which is due to changes in market prices of the investments. Such fluctuations are included in the net realized and unrealized gains (losses) on investments in the Statements of Operations.
Determination of Class Net Asset Value
For each Fund, with the exception of Core Bond Fund, all income, expenses (other than class-specific expenses, as shown on the Statements of Operations) and realized and unrealized gains (losses) are allocated to each class of a Fund on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class. For Core Bond Fund, income and expenses are allocated to each class based on the settled shares method, while realized and unrealized gains (losses) are allocated based on the relative net assets of each class.
Federal Income Tax Status
Each Fund intends to qualify each year as a “regulated investment company” under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its taxable or tax-exempt income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, each Fund intends to distribute in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, such that each Fund should not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded.
Distributions to Shareholders
Dividends from net investment income are declared and paid quarterly for each Fund except Core Bond Fund. For Core Bond Fund, dividends from net investment income are declared daily and paid monthly. Net realized capital gains, if any, are distributed at least annually for all Funds.
51
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
Indemnification
In the normal course of business, each Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. A Fund’s maximum exposure under these arrangements is unknown because this would involve future claims against the Fund. Also, under the organizational documents of Excelsior Fund and the Trust, and by contract, the Board of Directors with regard to Excelsior Fund and the Board of Trustees with regard to the Trust, are indemnified against certain liabilities that may arise out of actions relating to their duties to Excelsior Fund and the Trust. However, based on experience, the Funds expect the risk of loss due to these representations, warranties and indemnities to be minimal.
| Note 3. | Federal Income Tax Information |
The tax character of distributions paid during the year ended March 31, 2007 was as follows:
| | | | | | | | |
| | | Ordinary
Income* | | Long-Term
Capital Gains | | |
Core Bond Fund | | $ | 17,474,254 | | $ | — | | |
Equity Income Fund | | | 4,109,901 | | | — | | |
Large Cap Growth Fund | | | — | | | — | | |
Mid Cap Value and Restructuring Fund | | | 97,283 | | | 7,547 | | |
Small Cap Fund | | | 2,271,022 | | | 41,311,258 | | |
Value and Restructuring Fund | | | 67,856,329 | | | — | | |
| | * | For tax purposes short-term capital gains distributions, if any, are considered ordinary income distributions. |
Unrealized appreciation and depreciation at September 30, 2007, based on cost of investments for federal income tax purposes, excluding any unrealized appreciation and depreciation from changes in the value of other assets and liabilities resulting from changes in exchange rates, was:
| | | | | | | | | | | |
| | | Unrealized
Appreciation | | Unrealized
Depreciation | | | Net Unrealized
Appreciation
(Depreciation) | |
Core Bond Fund | | $ | 9,116,518 | | $ | (9,950,472 | ) | | $ | (833,954 | ) |
Equity Income Fund | | | 50,172,694 | | | (1,606,312 | ) | | | 48,566,382 | |
Large Cap Growth Fund | | | 229,089,580 | | | (23,403,331 | ) | | | 205,686,249 | |
Mid Cap Value and Restructuring Fund | | | 148,178,220 | | | (10,740,360 | ) | | | 137,437,860 | |
Small Cap Fund | | | 244,409,519 | | | (16,525,788 | ) | | | 227,883,731 | |
Value and Restructuring Fund | | | 3,535,111,311 | | | (280,207,107 | ) | | | 3,254,904,204 | |
52
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
The following capital loss carryforwards, determined as of March 31, 2007, may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code:
| | | | | | | | | | | | | | | | | | | | | |
| | | Expires March 31, | | |
| | 2010 | | 2011 | | 2012 | | 2013 | | 2014 | | 2015 | | Total |
Core Bond Fund | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 1,303,908 | | $ | 330,101 | | $ | 1,634,009 |
Large Cap Growth Fund | | | 18,217,588 | | | 83,374,895 | | | 22,030,449 | | | 480,165 | | | — | | | — | | | 124,103,097 |
Value and Restructuring Fund | | | — | | | 19,930,042 | | | 27,363,534 | | | — | | | — | | | — | | | 47,293,576 |
The Funds adopted Financial Accounting Standards Board (“FASB”) Interpretation No. 48, Accounting for Uncertainty in Income Taxes- an Interpretation of FASB Statement No. 109 (“FIN 48”) effective September 28, 2007. FIN 48 requires management to determine whether a tax position of a Fund is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that exceeds fifty percent of the amount likely to be realized upon ultimate settlement. FIN 48 must be applied to all existing tax positions upon initial adoption and the cumulative effect, if any, is to be reported as an adjustment to net assets. Management has evaluated the known implications of FIN 48 on its computation of net assets for each Fund. As a result of this evaluation, management believes that FIN 48 will not have any effect on the Funds’ financial statements. However, management’s conclusions regarding FIN 48 may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation guidance from the FASB, new tax laws, regulations, and administrative interpretations (including relevant court decisions).
| Note 4. | Fees and Compensation Paid to Affiliates |
Investment Advisory Fee
United States Trust Company, National Association, through its separate identifiable division, U.S. Trust New York Asset Management Division (“USTNA”), or UST Advisers, Inc. (“USTA” and together with USTNA, the “Advisor”) is the investment advisor to the Funds. USTNA is a wholly owned subsidiary of U.S. Trust Corporation (“U.S. Trust”). USTA is a wholly owned subsidiary of USTNA. Effective July 1, 2007, U.S. Trust became a wholly owned subsidiary of the Bank of America Corporation (“BOA”). Prior to July 1, 2007, U.S. Trust was a wholly owned subsidiary of The Charles Schwab Corporation.
53
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
For its services, the Advisor receives an investment advisory fee, computed daily and paid monthly, based on each Fund’s average daily net assets at the following annual rates:
| | | |
| | | Annual Fee Rate | |
Core Bond Fund | | 0.65 | % |
Equity Income Fund | | 0.75 | % |
Large Cap Growth Fund | | 0.75 | % |
Mid Cap Value and Restructuring Fund | | 0.65 | % |
Small Cap Fund | | 0.75 | % |
Value and Restructuring Fund | | 0.60 | % |
Administration Fee
Effective July 1, 2007, Columbia Management Advisors, LLC (“Columbia”) serves as the administrator of the Funds. Columbia is an indirect, wholly owned subsidiary of BOA. Prior to July 1, 2007, USTA and BISYS Fund Services Ohio, Inc. (“BISYS”) served as the administrators of the Funds under the same fee structure.
Columbia is entitled to an administration fee, computed daily and paid monthly, based on the combined aggregate average daily net assets of Excelsior Fund, the Trust and Excelsior Tax-Exempt Funds, Inc. (excluding Emerging Markets Fund, International Fund, International Equity Fund and Pacific/Asia Fund, series of Excelsior Fund or the Trust), at the following annual rates:
| | | |
Average Daily Net Assets | | Annual Fee Rate | |
First $200 million | | 0.200 | % |
Next $200 million | | 0.175 | % |
In excess of $400 million | | 0.150 | % |
Effective September 17, 2007, Columbia received an administration fee at the annual rates listed above less the fees payable by the Funds as described under the Pricing and Bookkeeping Fees note below.
Effective July 1, 2007, Columbia voluntarily agreed to waive administration fees for each Fund at the annual rate of 0.05% of average daily net assets. Columbia, at its discretion, may revise or discontinue this arrangement at any time. For the six months ended September 30, 2007, the effective administration fee rate was 0.13% of each Fund’s average daily net assets before the reduction for pricing and bookkeeping fees and net of voluntary expense waivers.
54
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
For the six months ended September 30, 2007, the total amounts paid and payable to affiliates by the Funds under these agreements were as follows:
| | | | | | |
| | | Amounts
Paid to
Affiliates | | Amounts
Payable to
Affiliates |
Core Bond Fund | | $ | 305,789 | | $ | 36,851 |
Equity Income Fund | | | 133,872 | | | 14,343 |
Large Cap Growth Fund | | | 434,339 | | | 53,449 |
Mid Cap Value and Restructuring Fund | | | 195,276 | | | 21,615 |
Small Cap Fund | | | 424,975 | | | 53,659 |
Value and Restructuring Fund | | | 4,990,424 | | | 648,811 |
Pricing and Bookkeeping Fees
Effective September 17, 2007, the Funds entered into a Financial Reporting Services Agreement (the “Financial Reporting Services Agreement”) with State Street Bank & Trust Company (“State Street”) and Columbia pursuant to which State Street provides financial reporting services to the Funds. Also effective September 17, 2007, the Funds entered into an Accounting Services Agreement with State Street and Columbia (collectively with the Financial Reporting Services Agreement, the “State Street Agreements”) pursuant to which State Street provides accounting services to the Funds. Under the State Street Agreements, each Fund pays State Street an annual fee of $38,000 paid monthly plus a monthly fee based on an annualized percentage rate of average daily net assets of each Fund for the month. The aggregate fee for each fund will not exceed $140,000 per year (exclusive of out-of-pocket expenses and charges). The Funds also reimburse State Street for certain out-of-pocket expenses and charges.
Effective September 17, 2007, the Funds entered into a Pricing and Bookkeeping Oversight and Services Agreement (the “Services Agreement”) with Columbia. Under the Services Agreement, Columbia provides services related to Fund expenses and the requirements of the Sarbanes-Oxley Act of 2002, and provides oversight of the accounting and financial reporting services provided by State Street. The Funds reimburse Columbia for out-of-pocket expenses and direct internal costs relating to accounting oversight and for services relating to Fund expenses and the requirements of the Sarbanes-Oxley Act of 2002.
Prior to July 1, 2007, BISYS was responsible for providing fund accounting and financial reporting services to the Funds, and USTA was responsible for oversight of these functions. On July 1, 2007, Columbia assumed responsibility from USTA for oversight of the activities performed by BISYS. BISYS was responsible for providing services to the Funds through September 16, 2007.
For the six months ended September 30, 2007, the total amounts paid and payable to affiliates for each Fund under these agreements were $505 and $505, respectively.
55
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
Transfer Agent Fee
Effective September 17, 2007, Columbia Management Services, Inc. (the “Transfer Agent”), an affiliate of Columbia and an indirect, wholly owned subsidiary of BOA, provides shareholder services to the Funds and has contracted with Boston Financial Data Services (“BFDS”) to serve as sub-transfer agent. Prior to September 17, 2007, BFDS served as the transfer agent for the Funds’ shares.
The Transfer Agent is entitled to receive a fee for its services, paid monthly, at the annual rate of $17.00 per open account plus reimbursement of certain sub-transfer agent fees paid by the Transfer Agent (exclusive of BFDS fees), calculated based on assets held in omnibus accounts and intended to recover the cost of payments to other parties (including affiliates of BOA) for services to those accounts. The Transfer Agent pays the fees of BFDS for services as sub-transfer agent and is not entitled to reimbursement for such fees from the Funds. The Transfer Agent may also retain, as additional compensation for its services, fees for wire, telephone and redemption orders, IRA trustee agent fees and account transcript fees due the Transfer Agent from shareholders of the Funds and credits (net of bank charges) earned with respect to balances in accounts the Transfer Agent maintains in connection with its services to the Funds. The Transfer Agent also receives reimbursement for certain out-of-pocket expenses.
For the period September 17, 2007 through September 30, 2007, the total amounts paid and payable to affiliates by the Funds under this agreement were as follows:
| | | | | | |
| | | Amounts
Paid to
Affiliates | | Amounts
Payable
to Affiliates |
Core Bond Fund | | $ | 4,165 | | $ | 4,165 |
Equity Income Fund | | | 319 | | | 319 |
Large Cap Growth Fund | | | 3,167 | | | 3,167 |
Mid Cap Value and Restructuring Fund | | | 3,057 | | | 3,057 |
Small Cap Fund | | | 9,364 | | | 9,364 |
Value and Restructuring Fund | | | 79,159 | | | 79,159 |
Shareholder Servicing Fee
The Funds have entered into shareholder servicing agreements with various service organizations which include USTA. The Funds are permitted to pay a fee of up to 0.25% of the average daily net assets of the Funds’ shares held by each service organization’s customers to such organizations for providing shareholder and administrative services to their customers who hold shares of the Funds.
56
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
For the six months ended September 30, 2007, the total amounts paid and payable to affiliates by the Funds under these agreements were as follows:
| | | | | | |
| | | Amounts Paid
to Affiliates | | Amounts Payable
to Affiliates |
Core Bond Fund | | $ | 242,575 | | $ | 40,453 |
Equity Income Fund | | | 284,949 | | | 44,682 |
Large Cap Growth Fund | | | 778,970 | | | 132,290 |
Mid Cap Value and Restructuring Fund | | | 245,599 | | | 38,544 |
Small Cap Fund | | | 654,098 | | | 110,912 |
Value and Restructuring Fund | | | 1,585,978 | | | 253,339 |
Distribution and Service Fees
Effective September 17, 2007, Columbia Management Distributors, Inc. (the “Distributor”) serves as distributor of the Funds’ shares. Through July 31, 2007, BISYS Fund Services Limited Partnership (“BISYS Fund Services”) served as distributor of the Funds’ shares. On August 1, 2007, Foreside Distribution Services, L.P. served as distributor until September 16, 2007.
Certain Funds have adopted a Distribution Plan (the “Distribution Plan”) pursuant to Rule 12b-1 under the 1940 Act, which permits the Funds to compensate and/or reimburse the Distributor monthly for services that are intended to result in the sale of certain classes’ shares. Equity Income Fund and Mid Cap Value and Restructuring Fund, which have adopted a Distribution Plan for the Shares Class of the Funds, may pay distribution fees in an amount not to exceed the annual rate of 0.25% of the average daily net assets applicable to each Fund’s Shares Class. Fees are not currently being paid under the Distribution Plan with respect to the Shares Class. Each Fund has adopted a Distribution Plan for the Retirement Shares of the Funds and may pay distribution fees in an amount not to exceed the annual rate at 0.50% of the average daily net assets applicable to each Fund’s Retirement Shares.
The Funds have adopted a combined shareholder servicing and distribution plan for the Class A Shares of the Funds. Fees are calculated at an annual rate of 0.25% of the average daily net assets of the Class A Shares of each Fund. The Funds have also adopted a shareholder servicing plan and a Distribution Plan for the Class C Shares of the Funds. Fees are calculated at the annual rates of 0.25% and 0.75%, respectively, of the average daily net assets of the Class C Shares of each Fund.
Fees Paid to Officers and Trustees
The Board of Trustees/Directors may include people who are officers and/or trustees of other fund families affiliated with the investment advisor. The Funds did not pay any of the interested persons for their service as Trustees/Directors, but did pay non-interested persons (independent trustees), as noted in the Statements of Operations.
57
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
Expense Limits and Fee Waivers
The Advisor has contractually agreed to waive fees or reimburse expenses through July 31, 2008, so that the expenses incurred by each Fund (exclusive of brokerage commissions, interest, taxes and extraordinary expenses but inclusive of custodial charges relating to overdrafts, if any) after giving effect to any balance credits from the Funds’ custodian, will not exceed the following annual rates, based on each Fund’s average daily net assets:
| | | | | | | | | | | | | | | |
| | | Retirement Shares | | | Shares | | | Class A Shares | | | Class C Shares | | | Institutional Shares | |
Core Bond Fund | | 1.40 | % | | 0.90 | % | | — | | | — | | | 0.65 | % |
Equity Income Fund | | 1.60 | % | | 1.10 | % | | — | | | — | | | — | |
Large Cap Growth Fund | | 1.70 | % | | 1.20 | % | | 1.31 | % | | 2.06 | % | | 0.95 | % |
Mid Cap Value and Restructuring Fund | | 1.64 | % | | 1.14 | % | | — | | | — | | | 0.89 | % |
Small Cap Fund | | 1.75 | % | | 1.25 | % | | 1.36 | % | | 2.11 | % | | — | |
Value and Restructuring Fund | | 1.64 | % | | 1.14 | % | | 1.25 | % | | 2.00 | % | | 0.89 | % |
Custody Credits
Each Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. These credits are recorded as a reduction of total expenses in the Statements of Operations. The Funds could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if they had not entered into such an agreement.
| Note 5. | Portfolio Information |
For the six months ended September 30, 2007, the cost of purchases and proceeds from sales of securities, excluding short-term obligations, were as follows:
| | | | | | | | | | | | |
| | | U.S. Government Securities | | Other Investment Securities |
| | | Purchases | | Sales | | Purchases | | Sales |
Core Bond Fund | | $ | 158,631,256 | | $ | 133,547,501 | | $ | 89,571,636 | | $ | 26,305,748 |
Equity Income Fund | | | — | | | — | | | 14,928,429 | | | 32,254,979 |
Large Cap Growth Fund | | | — | | | — | | | 206,389,492 | | | 178,370,279 |
Mid Cap Value and Restructuring Fund | | | — | | | — | | | 25,982,805 | | | 13,336,796 |
Small Cap Fund | | | — | | | — | | | 318,595,424 | | | 261,032,530 |
Value and Restructuring Fund | | | — | | | — | | | 957,697,128 | | | 419,229,579 |
58
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
| Note 6. | Redemption In-Kind |
In certain circumstances, the Funds may distribute portfolio securities rather than cash as payment for redemption of a Fund’s shares (redemption in-kind). For financial reporting purposes, the Funds recognize a gain on the in-kind redemptions to the extent the value of the distributed securities on the date of redemption exceeds the cost of those securities; the Funds recognize a loss if cost exceeds value. Gains and losses realized on the redemptions in-kind are not recognized for tax purposes, and are reclassified from realized gain (loss) to paid-in capital in excess of par value.
Effective September 17, 2007, the Funds and other affiliated funds participate in a $150,000,000 uncommitted, unsecured line of credit provided by State Street. Borrowings are available for temporary or emergency purposes. Interest on the uncommitted line of credit is charged to each participating fund based on the fund’s borrowings at a variable rate per annum equal to the Federal Funds Rate plus a spread, as determined and quoted by State Street at the time of the request for a loan.
Prior to September 17, 2007, the Funds participated in a $150,000,000 uncommitted line of credit provided by JPMorgan Chase, under similar borrowing terms.
For the six months ended September 30, 2007, the Funds, with the exception of Equity Income Fund, did not borrow under these agreements. The average daily loan balance outstanding on days where borrowings existed for Equity Income Fund during the six months ended September 30, 2007 was $1,000,000 at a weighted average interest rate of 5.525%.
Each Fund, with the exception of Core Bond Fund, may assess, subject to limited exceptions, a 2.00% redemption fee on shares that are redeemed within 60 days of their purchase. The redemption fees, which are retained by the Funds, are accounted for as an addition to paid-in capital and are allocated to each class based on the relative net assets at the time of the redemption. Prior to August 1, 2007, the redemption fee was assessed, subject to limited exceptions, on Fund shares redeemed within 30 days of their purchase. For the six months ended September 30, 2007, the Funds assessed redemption fees as follows:
| | | |
| | | Redemption Fees |
Large Cap Growth Fund | | $ | 8,815 |
Mid Cap Value and Restructuring Fund | | | 37 |
Value and Restructuring Fund | | | 15,915 |
59
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
| Note 9. | Concentration of Ownership |
As of September 30, 2007, the Funds had shareholders that held greater than 5% of the shares outstanding. Subscription and redemption activity of these accounts may have a significant effect on the operations of the Funds. The percentage of shares of beneficial interest outstanding held therein are as follows:
| | | | |
| | | Number of
Shareholders | | % of Shares
Outstanding |
Core Bond Fund | | 1 | | 61.1 |
Equity Income Fund | | 1 | | 92.2 |
Large Cap Growth Fund | | 2 | | 85.1 |
Mid Cap Value and Restructuring Fund | | 2 | | 74.2 |
Small Cap Fund | | 2 | | 68.2 |
Value and Restructuring Fund | | 3 | | 52.9 |
| Note 10. | Significant Risks and Contingencies |
Foreign Securities
There are certain additional risks involved when investing in foreign securities that are not inherent with investments in domestic securities. These risks may involve foreign currency exchange rate fluctuations, adverse political and economic developments and the possible prevention of currency exchange or other foreign governmental laws or restrictions. In addition, the liquidity of foreign securities may be more limited than that of domestic securities.
| Note 11. | Legal Proceedings |
United States Trust Company of New York and U.S. Trust Company, N.A. (formerly, co-investment advisers to the Funds, together referred to herein as “U.S. Trust Company”), Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc., and Excelsior Funds Trust (the “Companies”), The Charles Schwab Corporation and several individuals and third parties were named in four fund shareholder class actions and two derivative actions which alleged that U.S. Trust Company, the Companies, and others allowed certain parties to engage in illegal and improper mutual fund trading practices, which allegedly caused financial injury to the shareholders of certain of the Excelsior Funds advised by U.S. Trust Company. Each plaintiff seeks unspecified monetary damages and related equitable relief.
The class and derivative actions described above were transferred to the United States District Court for the District of Maryland for coordinated and consolidated pre-trial proceedings. In November 2005, the Maryland court dismissed many of the plaintiffs’ claims in both the class and derivative actions. The court entered implementing orders on February 24, 2006. All claims against the Companies have been dismissed. Plaintiffs’ claims against U.S. Trust Company and certain individuals under Sections 10(b) and 20(a) of the Securities Exchange Act and Sections 36(b) and 48(a) of the Investment Company Act,
60
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
however, have not been dismissed. Plaintiffs’ Section 48(a) claims against parent entity U.S. Trust Company and former parent entity The Charles Schwab Corporation also remain.
While the ultimate outcome of these matters cannot be predicted with any certainty at this time, based on currently available information, U.S. Trust Company believes that the likelihood is remote that the pending litigation will have a material adverse financial impact on the Companies, or materially affect the advisers’ ability to provide investment management services to the Companies.
| Note 12. | Business Combinations and Mergers |
Under a plan of reorganization adopted by the Trust, all of the assets and liabilities of the Income Fund and Total Return Bond Fund were transferred to the Institutional Shares of the Core Bond Fund. The reorganization, which qualified as a tax-free exchange for federal income tax purposes, was completed at the close of business on September 27, 2006. The following is a summary of the shares outstanding, net assets, net asset value per share issued, and unrealized appreciation/depreciation immediately before and after the reorganization.
| | | | | | | | | | | | | |
| | | Before Reorganization | | After
Reorganization |
| | | Income
Fund | | | Total Return
Bond Fund | | Core Bond
Fund | | Core Bond
Fund |
Shares: | | | | | | | | | | | | | |
Retirement Shares | | | — | | | | — | | | 117 | | | 117 |
Shares | | | — | | | | — | | | 32,810,661 | | | 32,810,661 |
Institutional Shares | | | 13,965,104 | | | | 18,165,949 | | | 1,824,521 | | | 26,973,187 |
Net Assets: | | | | | | | | | | | | | |
Retirement Shares | | $ | — | | | $ | — | | $ | 1,046 | | $ | 1,046 |
Shares | | | — | | | | — | | | 294,116,361 | | | 294,116,361 |
Institutional Shares | | | 96,434,781 | | | | 129,070,075 | | | 16,360,288 | | | 241,865,144 |
Net Asset Value: | | | | | | | | | | | | | |
Retirement Shares | | $ | — | | | $ | — | | $ | 8.97 | | $ | 8.97 |
Shares | | | — | | | | — | | | 8.96 | | | 8.96 |
Institutional Shares | | | 6.91 | | | | 7.11 | | | 8.97 | | | 8.97 |
Net unrealized appreciation (depreciation) | | $ | (248,669 | ) | | $ | 617,540 | | $ | 740,329 | | $ | 1,109,200 |
| Note 13. | Reorganization of the Funds |
The Boards of Directors/Trustees of Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust (the “Board”) have approved proposals, described below, that are part of a larger integration of the Excelsior Fund complex and the Columbia Funds complex. Generally, these proposals involve the reorganization of certain Excelsior Funds into newly formed Columbia Funds that will be series of a different legal entity governed by a different board than the Excelsior Funds, and will be managed by Columbia Management Advisors, LLC, an affiliate of the current advisers to the Excelsior Funds. The portfolio managers of the Excelsior Funds immediately before such reorganizations are expected to be the same portfolio managers of the newly formed Columbia Funds immediately after such reorganizations.
61
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
Specifically, the Board has approved proposals to reorganize each Excelsior Fund listed in the left column (each, an “Excelsior Fund”) into a corresponding newly formed shell fund listed in the right column below (each, a “Newly Formed Fund”) as shown in the chart below, subject to approval by the shareholders of the Excelsior Fund. If the shareholders of each Excelsior Fund approve the proposal relating to the reorganization of their Fund, all of the assets of the Excelsior Fund will be transferred to the corresponding Newly Formed Fund and shareholders of the Excelsior Fund will receive shares of a designated class of the corresponding Newly Formed Fund in exchange for their shares. For each Excelsior Fund, Shares class and Institutional Shares class, as applicable, will be exchanged for Class Z shares of the corresponding Newly Formed Fund, and Retirement Shares class, as applicable, will be exchanged for Class R shares of the corresponding Newly Formed Fund. Shareholders of each Excelsior Fund are scheduled to vote on the proposal relating to the reorganization of their Fund at a special meeting of shareholders currently expected to be held in the first quarter of 2008. Each reorganization is expected to take place as soon as reasonably practicable following approval at the special meeting.
| | |
Excelsior Fund | | Newly Formed Fund |
Blended Equity Fund | | Columbia Blended Equity Fund |
Emerging Markets Fund | | Columbia Emerging Markets Fund |
Energy and Natural Resources Fund | | Columbia Energy and Natural Resources Fund |
International Fund | | Columbia International Growth Fund |
Large Cap Growth Fund | | Columbia Select Growth Fund |
Pacific/Asia Fund | | Columbia Pacific/Asia Fund |
Small Cap Fund | | Columbia Select Small Cap Fund |
Value & Restructuring Fund | | Columbia Value and Restructuring Fund |
Core Bond Fund | | Columbia Bond Fund |
Intermediate-Term Bond Fund | | Columbia Short-Intermediate Bond Fund |
Equity Opportunities Fund | | Columbia Select Opportunities Fund |
Mid Cap Value & Restructuring Fund | | Columbia Mid Cap Value and Restructuring Fund |
The Board has also approved proposals, described below, that involve the reorganization of certain Excelsior Funds into Columbia Funds that are series of different legal entities governed by a different board than the Excelsior Funds, and are managed by Columbia Management Advisors, LLC.
Specifically, the Board has approved proposals to reorganize each Excelsior Fund listed in the left column (each, an “Acquired Fund”) into a corresponding acquiring fund listed in the right column below (each, an “Acquiring Fund”) as shown in the chart below, subject to approval by the shareholders of the Acquired Fund. If the shareholders of an Acquired Fund approve the proposal relating to the reorganization of their Fund, all of the assets of the Acquired Fund will be transferred to the corresponding Acquiring Fund and shareholders of the Acquired Fund will receive shares of a designated class of the corresponding Acquiring Fund in exchange for their shares. For each Acquired Fund, except the money market funds, Shares class and Institutional Shares class, as applicable, will be exchanged for Class Z shares of the corresponding Acquiring Fund, and Retirement Shares class, as applicable, will be exchanged for Class R shares of the corresponding Acquiring Fund. For each
62
EXCELSIOR FUNDS
NOTES TO FINANCIAL STATEMENTS — (continued)
September 30, 2007 (Unaudited)
Acquired Fund that is a money market fund, Shares class and Institutional Shares class, as applicable, will be exchanged for Trust Class shares of the corresponding Acquiring Fund. Shareholders of each Acquired Fund are scheduled to vote on the proposal relating to the reorganization of their Fund at a special meeting of shareholders currently expected to be held in the first quarter of 2008, except for Intermediate-Term Tax-Exempt Fund and New York Intermediate-Term Tax-Exempt Fund which are currently expected to be held in the second quarter of 2008. Each reorganization is expected to take place as soon as reasonably practicable following approval at the special meeting.
| | |
Acquired Fund | | Acquiring Fund |
Equity Income Fund | | Columbia Dividend Income Fund |
Real Estate Fund | | Columbia Real Estate Equity Fund |
International Equity Fund | | International Fund |
Short-Term Government Securities Fund | | Columbia Short Term Bond Fund |
Short-Term Tax-Exempt Securities Fund | | Columbia Short Term Municipal Bond Fund |
High Yield Fund | | Columbia High Yield Opportunity Fund |
Long-Term Tax-Exempt Fund | | Columbia Tax-Exempt Fund |
Intermediate-Term Tax-Exempt Fund | | Columbia Intermediate Municipal Bond Fund |
New York Intermediate-Term Tax-Exempt Fund | | Columbia New York Intermediate Municipal Bond Fund |
| California Short-Intermediate Term Tax-Exempt Income Fund | | Columbia California Intermediate Municipal Bond Fund |
Treasury Money Fund | | Columbia Government Reserves |
Government Money Fund | | Columbia Government Plus Reserves |
Money Fund | | Columbia Cash Reserves |
Tax-Exempt Money Fund | | Columbia Tax-Exempt Reserves |
New York Tax-Exempt Money Fund | | Columbia New York Tax-Exempt Reserves |
63
APPROVAL OF INVESTMENT ADVISORY AGREEMENTS
The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party to the advisory agreement (the “Independent Directors”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s board of directors or trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the advisory agreement. In addition, the Securities and Exchange Commission (the “SEC”) takes the position that, as part of their fiduciary duties with respect to fund fees, fund boards are required to evaluate the material factors applicable to a decision to approve an investment advisory agreement.
At a meeting held on September 27th and 28th 2007, the Board of Directors/Trustees (the “Board”) of Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust (each a “Company” and, together, the “Companies”), including a majority of the Independent Directors, approved the continuation of the Investment Advisory Agreements (the “Advisory Agreements”) by and between each Company and UST Advisers, Inc. and U.S. Trust New York Asset Management Division, a division of United States Trust Company, National Association (together, “U.S. Trust”) with respect to each series of each Company (each, a “Fund”).
In preparation for the meeting, the Board requested and reviewed a wide variety of materials provided by U.S. Trust and its affiliates, which included information about the operations and personnel of U.S. Trust, as well as the personnel and operations of its affiliates. In this regard, the Board received information about the large mutual fund business of Columbia Management Advisors, LLC and its affiliates (together, “Columbia”), which are, together with U.S. Trust, all under the control of Bank of America Corporation, and how the resources dedicated to the Columbia mutual fund business affect the Funds. The Board also received extensive information that was provided by or derived from information prepared by third parties. This information is in addition to the detailed information about the Funds that the Board reviews during the course of each year, including information that relates to Fund operations and Fund performance. The Board also received a memorandum from counsel regarding the responsibilities of the Board for the approval of the Advisory Agreements. In addition, the Independent Directors received advice from independent counsel to the Independent Directors, met in executive session outside the presence of Company management and U.S. Trust personnel and participated in question and answer sessions with representatives of U.S. Trust.
The Board’s approval of the continuation of the Advisory Agreements was based on the consideration and evaluation of the information and material provided to the Board and a variety of specific factors discussed at the meetings, including:
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by U.S. Trust to the Funds under the Advisory Agreements and the resources of U.S. Trust and their affiliates, including Columbia, dedicated to the Funds. In this regard, the Board evaluated, among other things, U.S. Trust’s personnel, experience, performance history of various products, and compliance program. The Board considered that U.S. Trust and Columbia provide
64
substantial administrative, accounting and compliance services and provide oversight of third party service providers to the Funds. The Board considered representations of U.S. Trust that U.S. Trust and Columbia have allocated substantial resources and personnel, and have made significant financial expenditures and commitments, to the investment management and other operations of the Funds. The Board also considered the nature and quantity of additional resources that have been dedicated to the operations of the Funds since U.S. Trust had become affiliated with Columbia. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services to be provided by U.S. Trust to the Funds and the resources of the U.S. Trust and its affiliates dedicated to the Funds supported the renewal of the Advisory Agreements.
Fund Performance. The Board considered Fund performance in determining whether to renew the Advisory Agreements. Specifically, the Board considered each Fund’s performance relative to a peer group of other mutual funds and appropriate indices/benchmarks, in light of total return, yield and market trends. As part of this review, the Board considered the composition of the peer groups, selection criteria and the reputation of third party providers who provided data for the peer group analysis. In evaluating the performance of each Fund, the Board considered both market risk and shareholder risk expectations for such Fund and whether, irrespective of relative performance, each Fund’s absolute performance was consistent with expectations for its investment methodology. The Board further considered the level of Fund performance in the context of its review of Fund expenses and U.S. Trust’s profitability discussed below. In the case of each Fund that had performance that lagged that of a relevant peer group for certain (although not necessarily all) periods considered, the Board concluded that other factors relevant to performance supported renewal of the Advisory Agreements. These factors varied from Fund to Fund, but included one or more of the following: (1) that the Fund’s performance, although lagging in certain recent periods, was strong over the longer term; (2) that the underperformance was attributable, to a significant extent, to investment decisions by U.S. Trust that were reasonable and consistent with the Fund’s investment objective and policies; (3) that each Fund’s performance was competitive when compared to other relevant performance benchmarks or peer groups; and (4) that U.S. Trust has taken or is taking steps designed to help improve the Fund’s investment performance. Following such evaluation, the Board concluded, within the context of its full deliberations, that the performance of the Funds supported the renewal of the Advisory Agreements.
Fund Expenses. With respect to the Funds’ expenses, the Board considered the rate of compensation called for by the Advisory Agreements, and each Fund’s net operating expense ratio, in each case, in comparison to those of other comparable mutual funds, such peer groups and comparisons having been selected and calculated based on objective factors. The Board noted that with respect to the Funds, U.S. Trust had contractually committed to waive a portion of its fee and/or reimburse the Funds for a portion of their expenses to limit the Funds’ total operating expenses. In evaluating this information, the Board considered the nature and scope of services provided to the Funds. The Board also reviewed the fees charged by U.S. Trust to provide advisory services to other types of accounts with substantially similar investment objectives as the Funds and the differences in services and risks involved in managing such other accounts, including differences relating to compliance and regulatory burdens. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported the renewal of the Advisory Agreements.
Profitability. With regard to profitability, the Board considered the compensation flowing to U.S. Trust and its affiliates, directly or indirectly. In this connection, the Board reviewed management’s
65
profitability analyses. The Board also considered any other benefits derived by U.S. Trust from its relationship with the Funds, such as whether, by virtue of its management of the Funds, it obtains investment information or other research resources that aid it in providing advisory services to other clients. With respect to U.S. Trust and its affiliates, the Board considered whether the varied levels of compensation and profitability under the Advisory Agreements and other service agreements were reasonable and justified in light of the quality of all services rendered to the Funds. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of U.S. Trust is reasonable and supported the renewal of the Advisory Agreements.
Economies of Scale. The Board considered the existence of any economies of scale and whether those economies are passed along to a Fund’s shareholders through a graduated investment advisory fee schedule or other means, including any fee waivers by U.S. Trust. In this regard, and consistent with their consideration of fund expenses, the Board considered that U.S. Trust has previously committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer Funds or Funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such Funds at subsidized expense levels. The Board also reviewed asset flows in the Funds, noting that a relatively few number of Funds had experienced significant asset growth, while most of the Funds had experienced only moderate growth, if any. After reviewing such information, the Board determined not to seek advisory fee breakpoints at this time. The Board noted that it would continue to monitor the growth in assets of the Funds as compared to expenses and asked U.S. Trust and Columbia to continue to monitor the Funds’ expenses and asset sizes in connection with determining when economies of scale would dictate that advisory fee breakpoints were advisable.
Based on the Board’s deliberations and their evaluation of the information described above, the Board, including all of the Independent Directors, unanimously approved the continuation of the Advisory Agreements and concluded that the compensation under the Advisory Agreements is fair and reasonable in light of the services and expenses and such other matters as the Board considered to be relevant in the exercise of their reasonable judgment. In the course of their deliberations, the Board did not identify any particular information or factor that was all-important or controlling.
66
[THIS PAGE INTENTIONALLY LEFT BLANK]
67
[THIS PAGE INTENTIONALLY LEFT BLANK]
68
PROXY VOTING RESULTS
A Special Meeting of Shareholders of Excelsior Funds, Inc., Excelsior Tax-Exempt Funds, Inc. and Excelsior Funds Trust and each of their Funds was held on March 30, 2007, for the purpose of seeking shareholder approval of the following proposal: to approve new investment advisory agreements by and among USTA, USTNA and the Companies, on behalf of the Funds. The Special Meeting for Excelsior Funds with respect to the Value and Restructuring Fund, Energy and Natural Resources and Treasury Money Funds was adjourned for the purpose of soliciting additional proxies, and subsequently held on April 30, 2007. The number of votes necessary to conduct the Special Meetings and approve the proposal was obtained. The results of the votes of shareholders are listed below:
EXCELSIOR FUNDS, INC.
| | | | | | |
Fund | | For | | Against | | Abstain |
Value and Restructuring Fund | | 71,659,202.229 | | 1,308,059.398 | | 2,313,244.343 |
Energy and Natural Resources Fund | | 10,149,963.059 | | 261,710.922 | | 349,760.892 |
Treasury Money Fund | | 147,661,994.420 | | 8,327.040 | | 953,491.100 |
IMPORTANT INFORMATION ABOUT THIS REPORT
Excelsior Retirement Shares
The funds mail one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 1-800-345-6611 and additional reports will be sent to you. This report has been prepared for shareholders of Excelsior Retirement Shares.
A description of the policies and procedures that each fund use to determine how to vote proxies and a copy of the fund’s voting records are available (i) on the Securities and Exchange Commission’s website at www.sec.gov, and (ii) without charge, upon request, by calling 1-800-368-0346. Information regarding how each fund voted proxies relating to portfolio securities during the 12-month period ended June 30 is available from the SEC’s website. Information regarding how each fund voted proxies relating to portfolio securities is also available from the funds’ website.
Each fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Each fund’s Form N-Q is available on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Please consider the investment objectives, risks, charges and expenses for the Funds carefully before investing. Contact your financial advisor for a prospectus, which contains this and other important information about the fund. You should read it carefully before you invest.
United States Trust Company, National Association, through its separate identifiable division, U.S. Trust New York Asset Management Division (“USTNA”), or UST Advisers, Inc. (“USTA” and together with USTNA, the “Advisor”) is the investment advisor to the Funds. USTNA is a wholly owned subsidiary of U.S. Trust Corporation (“U.S. Trust”). USTA is a wholly owned subsidiary of USTNA. Excelsior Funds are distributed by Columbia Management Distributors, Inc., member of FINRA, SIPC, part of Columbia Management. USTA, USTNA and Columbia Management Distributor, Inc. are affiliates of Bank of America Corporation.
69
©2007 Columbia Management Distributors, Inc.
One Financial Center, Boston, MA 02111-2621
800-345-6611 www.columbiafunds.com
SHC-44/136416-0907 (11/07) 07/46193
Not applicable for semi-annual reports.
| Item 3. | Audit Committee Financial Expert. |
Not applicable for semi-annual reports.
| Item 4. | Principal Accountant Fees and Services. |
Not applicable for semi-annual reports.
| Item 5. | Audit Committee of Listed Registrants. |
Not applicable.
| Item 6. | Schedule of Investments |
The registrant’s “Schedule I – Investments in securities of unaffiliated issuers” (as set forth in 17 CFR 210.12-12) is included in Item 1 of this Form N-CSR.
| Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Not applicable.
| Item 8. | Portfolio Managers of Closed-End Management Investment Companies. |
Not applicable.
| Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
Not applicable.
| Item 10. | Submission of Matters to a Vote of Security Holders. |
There have not been any material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of directors, since those procedures were last disclosed in response to requirements of Item 407(c)(2)(iv) of Regulation S-K (as required by Item 22(b)(15) of Schedule 14A) or this Item.
| Item 11. | Controls and Procedures. |
| | (a) | The registrant’s principal executive officer and principal financial officers, based on their evaluation of the registrant’s disclosure controls and procedures as of a date within 90 days of the filing of this report, have concluded that such controls and procedures are adequately designed to ensure that information required to be disclosed by the registrant in Form N-CSR is accumulated and communicated to the registrant’s management, including the principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. |
| | (b) | There was no change in the registrant’s internal control over financial reporting that occurred during the registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
| | |
| |
| (a)(1) | | Code of ethics required to be disclosed under Item 2 of Form N-CSR: Not applicable at this time. |
| |
| (a)(2) | | Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT. |
| |
| (a)(3) | | Not applicable. |
| |
| (b) | | Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT. |
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) | | Excelsior Funds, Inc. |
| |
| By (Signature and Title) | | /s/ Christopher L. Wilson |
| | Christopher L. Wilson, President |
| |
| Date | | November 26, 2007 |
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/ Christopher L. Wilson |
| | Christopher L. Wilson, President |
| |
| Date | | November 26, 2007 |
| | |
| |
| By (Signature and Title) | | /s/ J. Kevin Connaughton |
| | J. Kevin Connaughton, Treasurer |
| |
| Date | | November 26, 2007 |
