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 | 811-7062 | |||||||
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PACIFIC GLOBAL FUND INC. D/B/A PACIFIC ADVISORS FUND INC. | ||||||||
(Exact name of registrant as specified in charter) | ||||||||
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101 NORTH BRAND BLVD., SUITE 1950 GLENDALE, CALIFORNIA |
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(Address of principal executive offices) |
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GEORGE A. HENNING 101 NORTH BRAND BLVD., SUITE 1950 GLENDALE, CA 91203 | ||||||||
(Name and address of agent for service) | ||||||||
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Registrant’s telephone number, including area code: | 818-242-6693 |
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Date of fiscal year end: | December 31 |
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Date of reporting period: | June 30, 2007 |
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Item 1. Report to Shareholders
semi-annual report
june 30, 2007
government securities fund
income and equity fund
balanced fund
growth fund
multi-cap value fund
small cap fund
Pacific Advisors
table of contents
Message from the Chairman | 1 | ||||||
Government Securities Fund | 3 | ||||||
Income and Equity Fund | 7 | ||||||
Balanced Fund | 11 | ||||||
Growth Fund | 15 | ||||||
Multi-Cap Value Fund | 19 | ||||||
Small Cap Fund | 23 | ||||||
Statement of Investments | 29 | ||||||
Statement of Assets and Liabilities | 54 | ||||||
Statement of Operations | 56 | ||||||
Statement of Changes in Net Assets | 58 | ||||||
Notes to Financial Statements | 62 | ||||||
Financial Highlights | 68 | ||||||
Directors and Officers | 75 | ||||||
This Report is submitted for the general information of the shareholders of the Fund. It is not authorized for distribution to prospective investors unless accompanied or preceded by a current effective prospectus of the Fund, which contains information concerning the investment policies of the Fund as well as other pertinent information.
This Report is for informational purposes only and is not a solicitation, or a recommendation that any particular investor should purchase or sell any particular security. The statements in the Report are the opinions and beliefs expressed at the time of this commentary and are not intended to represent opinions and beliefs at any other time. These opinions are subject to change with market conditions and are not meant as a market forecast. All economic and performance information referenced is historical. Past performance does not guarantee future results.
For more information on the Pacific Advisors Funds, including information on charges, expenses and other classes offered, please obtain a copy of the prospectus by calling (800) 989-6693. Please read the prospectus and consider carefully the investment risks, objectives, charges and expenses before you invest or send money. Shares of the Pacific Advisors Funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost.
Message
from the chairman
Dear Shareholders:
Two steps forward and a half step back best described the equity markets during the first half of the year. In April and May, the market rallied in response to reports of stronger economic growth and consumer spending. In June, however, the market retreated somewhat as investors worried about higher inflation, a surge in oil prices, the impact of sub-prime debt defaults in the bond market, and potentially weaker second quarter earnings.
While the equity markets pulled back in response to market events in Asia and the deterioration of sub-prime debt portfolios, these market declines were brief. Overall, concerns about rising energy prices, a weak U.S. housing market, and troubled hedge funds were offset by stronger economic growth in the second quarter. Specific attention was paid to better-than-expected corporate profits, robust merger and acquisition activity, and strong consumer spending. As a result, the equity markets continued to advance.
Higher interest rates and the downturn in the housing market created a more bearish outlook for the credit markets. Low interest rates and lax loan underwriting in the mortgage, hedge fund and private equity markets provided capital for more aggressive investment strategies. As interest rates rose and the Federal Reserve showed no signs of easing interest rates, liquidity in the credit markets deteriorated. Borrowers whose collateral assets have declined in value or who are unable to fund their higher cost debt repayments bear the greatest risk. These events have negatively impacted both the equity and credit markets more recently.
Economic Review
In the first half of the year, the U.S. economy forged ahead at a moderate pace while the rate of growth worldwide exceeded 5%. However, economic growth rates varied widely, with countries such as Japan, Italy and France experiencing lackluster growth. In contrast, Germany and countries in the Eastern European bloc are experiencing strong economic growth as a result of lower corporate tax rates, business friendly labor policies, and significant increases in infrastructure spending. India and China continue to grow at rates exceeding 8% driven by soaring demand for goods and services and economic and infrastructure development in these countries and throughout Asia.
After growing at an anemic 0.7% rate in the first quarter, U.S. Gross Domestic Product (GDP) growth rebounded to 3.4% in the second quarter. The job market echoed this rebound with a historically low unemployment rate of 4.5% through June. Consumers remained confident and continued to spend despite rising energy prices and a downturn in the housing market. Additionally, a slowdown in the upward trend in core inflation eased broader concerns that the Fed would need to raise interest rates. While U.S. economic growth lagged in the first half of the year, it appears it should be stronger in the second half of the year. Overall growth for the year is expected to be at a moderate and sustainable rate in the range of 2.5% to 3.0%.
Market Review
June 30, 2007 | Close | YTD Return | |||||||||
Dow Jones | 13,408.62 | 7.59 | % | ||||||||
S&P 500 | 1,503.35 | 6.96 | % | ||||||||
NASDAQ | 2,603.23 | 7.78 | % | ||||||||
Russell 2000 (small cap) | 833.69 | 6.45 | % | ||||||||
06/30/07 | 06/30/06 | ||||||||||
10-Year T-Note Yield | 5.03 | % | 5.15 | % |
Data: The Wall Street Journal
During the past year, the federal budget deficit has been reduced significantly by soaring tax revenues. The federal budget deficit as a percentage of GDP has fallen below 2%, which is significantly lower than the historical average of 2.5%. The Congressional Budget Office estimates that the U.S. budget deficit will be -$157 billion in 2007 compared to -$248 billion for 2006. A shrinking deficit would reduce the issuance of new government bonds and could even result in calling in existing bonds. These trends when coupled with lower demand for mortgage debt from lenders and government agencies could produce the benefit of lower interest rates in the coming year.
Equity Markets
The equity markets achieved strong gains as evidenced by the Dow Jones reaching several new highs over the second quarter and in July. Day-to-day market volatility remained high as news-of-the-day swayed market action up and down.
Until recently, the market had rallied without a significant correction during the past year. The current correction in the equity markets was overdue and its magnitude is not unusual for a normal bull market cycle. Interim pullbacks serve the purpose of removing excess speculation and providing a more stable base for
1
Message
from the chairman continued
continued growth. We believe the longer-term outlook for the equity markets remains positive. Near-term, the equity markets may take some time to rebound while the credit markets stabilize.
Currently, the market seems willing to accept a moderating economy, strong corporate profits, and stable interest rates as sufficient reasons to buy. Over the near-term, we will pay close attention to certain factors which may have a greater impact on the market. These factors include energy inflation as the price of oil has risen above $70 per barrel; further disruption in the sub-prime market and related derivative securities; and the severity of the downturn in the housing market. Any of these factors, could prompt the market to abruptly pull back further, especially if accompanied by disappointing third quarter corporate earnings. Furthermore, the threat of unexpected geopolitical events is always a market concern.
Fixed Income Investment Review
The Fed has continued to keep the fed funds rate at 5.25%. This policy has proven effective in keeping the economy moving ahead while controlling inflationary pressures. While the Fed left the fed funds rate unchanged, the U.S. bond market was active. The benchmark 10-year Treasury Note ranged from 4.50% to 5.26% during the first half of the year, a spread of over 60 basis points. The upward interest rate movement helped to normalize the yield curve where longer-term bonds pay more than shorter-term notes.
While the Fed chose to keep short-term rates unchanged, the bond market pushed intermediate and long-term interest rates higher. These dynamics created an opportunity to selectively purchase higher yielding fixed income instruments that included U.S. government agency bonds and preferred stock. While we view the upward yield movement in longer-term bonds as healthy, we continue to focus our fixed income strategy in shorter-term maturities of between 4 to 7 years. This shorter duration aims to protect invested capital while improving yields. We expect day-to-day volatility in the bond market to persist. Using the 10-year Treasury Note as a benchmark, we see the market establishing a new trading range going forward. In the past few months, yields have ranged from 4.60% to 5.25%. We now expect to see interest rates for the 10-year Treasury Note trading between 4.25% and 5.00% through the end of the year.
Looking Ahead
Overall, we maintain an optimistic outlook for the economy. The global economy remains strong and appears to be in a long-term growth pattern led by China, India and other developing countries in Asia and Eastern Europe. Domestically, interest rates are low by historical measures and inflation has been reasonable for this point in the economic cycle. As economic growth continues at a moderate pace, we expect to experience market volatility in reaction to fluctuations in economic indicators from time to time. Longer-term, however, we believe the economy can continue to expand and will reward a patient, longer-term investment strategy.
Near-term, the equity and bond markets continue to be challenging. Several catalysts could spark a directional change in the markets at any time. While the credit and liquidity problems are primarily impacting the fixed-income markets they have also affected the equity markets. Investors are concerned that the lack of liquidity may slow economic growth to a point where a recession might develop. It may take some time for the fixed income markets to stabilize. However, we believe that investors, financial institutions and the Fed can manage through these problems and return the fixed-income markets to a more balanced risk-reward credit environment. Longer-term this corrective period in the equity and fixed income markets should provide a more stable foundation for future growth.
At Pacific Advisors Fund, we seek to maintain disciplined, long-term investment strategies. Even though we are longer-term investors, we adapt to changing market and economic conditions. During periods of a market correction, we often find attractive investment opportunities that we believe will benefit the Funds in the future. While many investors regard volatility as a negative development, we believe it can be an important tool in implementing our buy and sell strategies. In the following interviews with our portfolio managers we discuss the investment strategies for each Fund in more detail.
Sincerely,
George A. Henning
2
Pacific Advisors
Government Securities Fund
Seeks to provide high current income, preservation of capital, and rising future income, consistent with prudent investment risk. Invests at least 80% of its assets in U.S. Government fixed income securities and may invest in other income-producing instruments including dividend paying common stocks, for income and capital appreciation.
TOTAL RETURNS | EXPENSE RATIOS | ||||||||||||||
For the six months ended June 30, 2007 | For the fiscal year ended 12/31/06 | ||||||||||||||
Expense Ratio | Net Expense Ratio | ||||||||||||||
Class A | 2.45 | % | 3.17 | % | 2.51 | % | |||||||||
Class C | 2.09 | % | 3.86 | % | 3.21 | % |
For the six months ended June 30, 2007, the Fund's benchmark, the Lehman Intermediate Treasury Bond Index,1 rose 1.53%.
Figures shown are past performance and do not guarantee future results. Current performance may be higher or lower than the performance data quoted. For performance current to the most recent month-end call (800) 989-6693. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost.
Returns represent the change in value over the stated period assuming reinvestment of dividends and capital gains at net asset value. Returns do not take into account the maximum 4.75% sales charge on Class A shares and would be lower if the sales charge were included. Returns do not take into account individual taxes which may reduce actual returns when shares are sold.
Expense ratios shown are for the Fund's most recent fiscal year ended December 31, 2006. The Fund's investment adviser is waiving a portion of its management fees. Results shown reflect the waiver, without which the results would have been lower. Expense ratios shown reflect the waiver, without which they would have been higher. Please see the Financial Highlights contained in this report for more details.
Interview with Portfolio Manager
Thomas H. Hanson
What factors contributed to rising interest rates during the first half of 2007?
Global and domestic economic expansion coupled with modest inflation propelled intermediate and long-term interest rates upward in 2007. Global economic growth continued at a robust pace in the first half of 2007. Rapid economic expansion increased competition for goods and services resulting in rising prices. Foreign central banks raised interest rates in an attempt to contain inflationary pressures and moderate economic growth to more sustainable levels.
The U.S. economy grew at a more moderate rate with rising energy costs, a cooling housing market, and problems in the sub-prime lending market keeping economic momentum in check. The Fed kept a close eye on inflationary pressures, but held short-term rates at 5.25% throughout the first half of the year. At the same time, however, the Fed quietly supported economic expansion by placing additional money into circulation to increase market liquidity. High levels of liquidity in the global and domestic marketplaces increased demand for bonds which also helped push rates higher.
How did rising interest rates impact the bond market?
The rise in rates brought a long anticipated return to a more normalized interest rate environment with longer-term bonds carrying higher rates than shorter-term bonds. Nevertheless, the bond market remained
1 The Lehman Intermediate Treasury Bond Index is an unmanaged index of intermediate term government bonds since 12/31/80.
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volatile during the period as rates rose unevenly within a trading range. The benchmark 10-year Treasury Note traded between 4.50% and 5.26% during the first six months of the year.
Shorter-term securities typically experience less price volatility in response to interest rate changes. Therefore, longer-term bonds carried greater investment risk as interest rates ticked up in the first half of the year. Shorter-term bonds remained more attractive for their relative stability causing price depreciation in longer-term bonds.
The bond market was also significantly impacted by a notable decline in demand for U.S. treasuries by foreign investors. Foreign investors sought higher yielding fixed-income securities to combat the effects of inflation brought on by strong to moderate growth in their own economies. As a result of interest rate increases by foreign central banks, U.S. treasuries offered less attractive rates than their global counterparts. Prices declined on U.S. treasuries in order to remain competitive with foreign alternatives which also helped push rates higher. This competitive market drove the benchmark 10-Year Treasury Note to breakthrough its 13-year ceiling of 5.25% at the end of the second quarter.
The Fund outperformed its benchmark during the first six months of the year. How did the Fund successfully navigate the rising interest rate environment?
The Fund seeks total return by managing for income and capital appreciation. This investment approach gives the Fund the flexibility to actively manage risk in the bond market. Rising interest rates in the first half of the year continued to require a more defensive strategy to protect capital.
The Fund remained concentrated in intermediate-term bonds maintaining an average maturity in the portfolio of 5 to 6 years. Modest adjustments were made to the portfolio as interest rates ticked up, but the Fund did not make any broad strategic changes as evidenced by a low annualized turnover rate of 13% through June 30th. This strategy allowed the Fund to achieve a good total return for the period without exposing the portfolio to significant interest rate risk.
Over 80% of the Fund's portfolio remained invested in U.S. government agency issues. Government agency securities continued to offer higher coupon rates than U.S. treasuries which allowed the Fund to increase income without materially increasing the risk to the portfolio. The Fund captured additional yield by purchasing government agency bonds with callable features which offered attractive coupon rates. As these bonds were subsequently called away, capital was reinvested in intermediate-term (4 to 7 years) bonds to take advantage of rising interest rates.
The Fund also modestly increased its preferred stock holdings from 5% to 7% with well-known companies such as AT&T. These positions helped provide some protection against inflation through additional yield and capital appreciation potential. In addition, preferred stock provided liquidity which leaves the Fund positioned to take advantage of emerging opportunities in the bond market.
Should investors be concerned by the current rise in interest rates?
Interest rate movements are directly tied to the health of the domestic and global markets. Rising rates reflect sustained periods of economic expansion or rejuvenation. Interest rate increases, whether caused by central banks or market dynamics, often help to moderate unsustainably high economic growth rates and keep inflation in check.
Strong, but manageable, global economic growth is the main cause of the current rise in interest rates. While rates have risen in the U.S. and abroad, they have remained in a relatively low range by historical standards. Rising rates that stay within a healthy range, and are not driven by hyperinflation, represent a normal and healthy phase in the economic cycle.
4
What factors will impact interest rates and the Fund's investment strategy in the remainder of the year?
Domestic and global inflation will continue to have the greatest impact on interest rates in the last half of the year. Rising costs for energy, basic commodities and labor may continue to stoke inflationary pressures. Interest rates would also be impacted by any geopolitical events that disrupt international trade or cause price spikes, in oil for example.
While we do not believe interest rates will increase substantially worldwide, we will continue to monitor economic growth patterns. In particular, we are focused on assessing any policy changes made by central banks around the world. China, India and Eastern Europe continue to fuel the growth momentum in the global markets and any significant changes in their economies would impact fixed income markets worldwide.
In the U.S., concerns over the fallout in the sub-prime market will continue to impact the fixed income market for the near-term. In the normal course of the economic cycle, it is not unusual to experience some fallout in certain segments of the economy. While we cannot predict a specific timetable, we believe the credit markets will recover from current setbacks. Despite these setbacks, the U.S. economy remains well positioned to continue its moderate rate of growth.
In light of the problems in the bond market, it is uncertain whether the Fed will continue to hold short-term rates at their current level or consider reducing them to stabilize the credit markets. However, we believe sustained global economic growth and the high level of liquidity in the market will continue to produce a rise in intermediate and long-term rates. Given the continued uncertainty surrounding a variety of economic factors, we expect interest rates will continue to rise within a trading range.
In the last half of the year, the Fund will seek to evaluate long-term interest rates to identify the top of the new trading range and assess its likely duration. When it becomes clearer that interest rates are peaking, we will move into longer-term bonds to lock in higher coupons and capital appreciation potential. Until then, the Fund will maintain its defensive strategy to manage risk and preserve capital to achieve long-term growth.
Portfolio Holdings as of 06/30/07 (Based on Total Investments)
1. | U.S. Government Agencies | 81.07 | % | ||||||||
2. | Equities | 8.89 | % | ||||||||
3. | Preferred Stock | 7.06 | % | ||||||||
4. | Cash and Cash Equivalents | 2.98 | % |
5
Pacific Advisors
Government Securities Fund continued
Expense Examples
As a shareholder of the Fund you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from January 1, 2007 through June 30, 2007.
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During the Period" to estimate the expenses you paid on your account during the period.
The following transaction costs are not included in the expenses shown in the table and, if applicable, would increase the expenses that you paid over the period: (1) a front-end sales charge (load) of 4.75% on Class A shares; (2) a 2% redemption fee if you sell or exchange shares within 60 days of purchase, with certain exceptions. The redemption fee does not apply to: (a) redemptions under an automatic withdrawal program or periodic asset reallocation plan, required minimum distributions (RMD), employer mandated distributions from a qualified plan, or redemptions under a qualified domestic relations order (QDRO); (b) redemptions to pay for expenses related to terminal illness, extended hospital or nursing home care, or other serious medical conditions, including death; (c) redemptions of shares acquired through dividend or capital gains reinvestments, and (d) redemptions initiated by the Fund; and (3) a $10 service fee on each exchange aft er the first five exchanges in each calendar year.
The following ongoing costs are not included in the expenses shown in the table and, if applicable, would increase the expenses that you paid over the period: (1) a $12 low balance fee on accounts with balances of less than $250 as of September 30th of each calendar year and no investment activity (excluding reinvestment of dividends and/or capital gains) during the prior calendar year or the first nine months of the current calendar year. This fee does not apply to IRAs, qualified plan accounts, or Coverdell Education Savings Accounts; (2) a $15 annual custodial fee on IRAs, SEPs, SIMPLE IRAs, and Coverdell Education Savings Accounts; and (3) a $20 annual custodial fee on 403(b) accounts.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which in not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
The following transaction costs are not included in the expenses shown in the table and, if applicable, would increase the expenses that you paid over the period: (1) a front-end sales charge (load) of 4.75% on Class A shares; (2) a 2% redemption fee if you sell or exchange shares within 60 days of purchase, with certain exceptions. The redemption fee does not apply to: (a) redemptions under an automatic withdrawal program or periodic asset reallocation plan, required minimum distributions (RMD), employer mandated distributions from a qualified plan, or redemptions under a qualified domestic relations order (QDRO); (b) redemptions to pay for expenses related to terminal illness, extended hospital or nursing home care, or other serious medical conditions, including death; (c) redemptions of shares acquired through dividend or capital gains reinvestments, and (d) redemptions initiated by the Fund; and (3) a $10 service fee on each exchange aft er the first five exchanges in each calendar year.
The following ongoing costs are not included in the expenses shown in the table and, if applicable, would increase the expenses that you paid over the period: (1) a $12 low balance fee on accounts with balances of less than $250 as of September 30th of each calendar year and no investment activity (excluding reinvestment of dividends and/or capital gains) during the prior calendar year or the first nine months of the current calendar year. This fee does not apply to IRAs, qualified plan accounts, or Coverdell Education Savings Accounts; (2) a $15 annual custodial fee on IRAs, SEPs, SIMPLE IRAs, and Coverdell Education Savings Accounts; and (3) a $20 annual custodial fee on 403(b) accounts.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 1/1/2007 | Ending Account Value 6/30/2007 | Expense Paid During Period 01/01/07 – 06/30/07 | |||||||||||||
Government Sec Class A | |||||||||||||||
Actual | $ | 1,000 | $ | 1,024.50 | $ | 8.93 | |||||||||
Hypothetical (5% return before expense) | $ | 1,000 | $ | 1,024.79 | $ | 8.94 | |||||||||
Government Sec Class C | |||||||||||||||
Actual | $ | 1,000 | $ | 1,020.90 | $ | 12.68 | |||||||||
Hypothetical (5% return before expense) | $ | 1,000 | $ | 1,024.79 | $ | 12.70 |
3 Expenses are equal to the Fund's annualized expense ratio of 1.78% for Class A shares and 2.53% for Class C shares, multiplied by the average account value over the period, multiplied by 181/365 days to reflect the one-half year period.
6
Pacific Advisors
Income and Equity Fund
Seeks to provide current income and, secondarily, long-term capital appreciation. Invests primarily in investment grade fixed income securities and dividend paying stocks.
TOTAL RETURNS | EXPENSE RATIOS | ||||||||||||||
For the six months ended June 30, 2007 | For the fiscal year ended 12/31/06 | ||||||||||||||
Expense Ratio | Net Expense Ratio | ||||||||||||||
Class A | 2.25 | % | 2.80 | % | 2.06 | % | |||||||||
Class C | 1.94 | % | 3.56 | % | 2.81 | % |
For the six months ended June 30, 2007, the Fund's benchmarks, the Lehman Intermediate Corporate Bond Index1 and the S&P 5002 Index, rose 1.27% and 6.96%, respectively.
Figures shown are past performance and do not guarantee future results. Current performance may be higher or lower than the performance data quoted. For performance current to the most recent month-end call (800) 989-6693. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost.
Returns represent the change in value over the stated period assuming reinvestment of dividends and capital gains at net asset value. Returns do not take into account the maximum 4.75% sales charge on Class A shares and would be lower if the sales charge were included. Returns do not take into account individual taxes which may reduce actual returns when shares are sold.
Expense ratios shown are for the Fund's most recent fiscal year ended December 31, 2006. The Fund's investment adviser is waiving a portion of its management fees. Results shown reflect the waiver, without which the results would have been lower. Expense ratios shown reflect the waiver, without which they would have been higher. Please see the Financial Highlights contained in this report for more details.
Interview with Portfolio Manager
Thomas H. Hanson
How did the corporate bond market fare in the first half of 2007?
Economic conditions continued to create a challenging corporate bond market in the first half of the year. The Federal Reserve left short-term interest rates unchanged at 5.25%, citing stubborn inflationary pressures as the main threat to future economic growth. Nevertheless, intermediate and long-term rates ticked up in the U.S. and throughout the global marketplace. Despite this rise in interest rates, attractive corporate bond offerings remained scarce.
Many businesses remained flush with cash from growth in recent years and had little need to issue bonds to fund company growth. Ample cash reserves also allowed firms to refinance their existing debt obligations to improve their balance sheets and insulate their earnings from rising interest rates. With many companies choosing to forgo issuing new debt or refinancing existing debt, high-quality investment grade bonds remained in limited supply.
Global privatization added to the challenge of finding suitable corporate bond investments. Hedge funds, private equity firms and individual companies took a number of firms into the private sector. These acquisitions reduced investment opportunities in the bond market creating greater demand for an already dwindling supply of high-quality corporate bonds.
It is important to note that recent problems in the sub-prime lending market have had little impact on the Fund's fixed income strategy. The Fund is designed for more conservative investors. As we have discussed, the Fund seeks conservative investments in high-quality, investment grade bonds as opposed to the higher risk derivative type products.
1 The Lehman Intermediate Corporate Bond Index is an unmanaged index of intermediate term U.S. corporate bonds since 01/01/73.
2 The Standard & Poor's 500 Index is an unmanaged, market capitalization weighted measure of 500 widely held common stocks listed on the New York Stock Exchange, American Stock Exchange and The Nasdaq Stock Market. Index returns assume the reinvestment of dividends, but, unlike the Fund's returns, do not reflect the effects of management fees or expenses.
7
Pacific Advisors
Income and Equity Fund continued
How did the Fund manage this challenging environment?
In the first half of the year, the Fund continued to maintain a larger portion of its holdings in U.S. government agency securities which offered attractive yields with a limited amount of risk. Corporate bonds typically pay higher interest rates which generally makes them more attractive than government agencies. Over the past year, however, the limited supply of corporate bonds has created a narrow difference (or 'spread') between interest rates on corporate bonds and government agencies making government agencies equally attractive investments.
In addition, the Fund maintained a greater portion of its portfolio in preferred stocks from high-quality companies such as AT&T and Deutsche Bank. Preferred stocks can be an attractive substitute for bonds because they pay a fixed dividend which provides a stable stream of income. Increasing its preferred stock holdings has allowed the Fund to maintain liquidity while providing the opportunity for capital appreciation and improved total return.
Additionally, the Fund allocated a small percentage of its portfolio to floating rate corporate bonds that are indexed to the Consumer Price Index (CPI). This tie to the widely-used inflation index provides some protection against risk from inflationary pressures.
Despite the overall trend toward higher rates, intermediate and long-term rates remained relatively volatile in the first six months of the year. The Fund continued to maintain an average maturity of 4 to 5 years in its bond portfolio to manage interest rate risk and protect capital. We will maintain this more defensive position until rates reach a definitive peak.
How did the Fund manage its investment allocation mix during the first six months of the year?
The Fund seeks to produce total return through income and capital appreciation. Managing risk and reward in both the fixed income and equity markets is a critical component of the Fund's total return strategy. By actively managing its asset allocation mix, the Fund seeks to capitalize on opportunities in the stronger performing areas of the markets while limiting exposure to risk in underperforming areas of the markets.
Throughout the first half of the year, the Fund maintained approximately 65% of its portfolio in fixed income securities and 35% in equities. Maintaining a higher allocation in equities enabled the Fund to benefit from continued strength in the equity markets in 2007. This added to the Fund's total return and helped offset more challenging conditions in the corporate bond market.
The Fund continued to concentrate its equity investments in dividend-paying stocks from large, well-established companies. This included consumer product companies such as Procter & Gamble and Home Depot; energy and basic materials firms such as British Petroleum and DuPont; and healthcare companies such as Pfizer and Johnson & Johnson. Concentrating in high-quality investments provides the opportunity for additional income and capital appreciation without significantly increasing volatility in the portfolio.
Why did the Fund reduce its holdings in the utilities sector?
Utility stocks are often viewed proxies for bonds because they typically pay high dividends and carry relatively low risk. In the past, the Fund has held substantial positions in utility stocks because of their ability to meet the conservative investor's need for stability and consistent income. However, the volatility and risk associated with these stocks can increase dramatically when interest rates rise. Utilities are capital intensive businesses which typically fund expenditures by issuing debt. This debt becomes more expensive as interest rates rise.
For the last 18 months, the utilities sector has been one of the strongest performing sectors in the economy given the low cost of borrowing. The Fund benefited from steady dividends, rising stock prices and limited risk by investing in utility stocks during this time. As interest rates rose in the first half of 2007, there was a growing potential for utility stocks to under-perform as the cost of issuing debt rose. The Fund trimmed its utilities holdings to limit this risk.
8
What is the expected trend in interest rates for the remainder of the year and how will this impact the Fund?
Interest rates are expected to remain somewhat volatile while continuing to push modestly higher through the end of the year. While rising interest rates are a normal and healthy part of the economic cycle, investment strategy is critical to protecting capital in this environment. The Fund will continue to manage for total return by seeking risk-appropriate opportunities for income and capital appreciation.
At this time, we expect to maintain the Fund's investment allocation mix in approximately 70% fixed income securities and 30% in high-quality equities. Until interest rates reach a clear peak, we will remain more defensive by keeping the portfolio's average maturity in a range of 4 to 6 years.
We expect the interest rate spread between corporate and government bonds will return to more historical norm once the markets move beyond the current liquidity crunch induced by fallout in the sub-prime lending market. However, given the strength of the U.S. and global economies and corporate balance sheets, high-quality corporate bonds will likely remain in relatively short supply. Therefore, we anticipate that the Fund will continue to seek additional total return opportunities in high-quality preferred stocks and government agency issues.
Portfolio Holdings as of 06/30/07 (Based on Total Investments)
1. | Corporate Bonds | 42.31 | % | ||||||||
Equities | 30.63 | % | |||||||||
2. | Financials | 7.63 | % | ||||||||
3. | Energy | 5.98 | % | ||||||||
4. | Health Care | 4.27 | % | ||||||||
5. | Other Equities | 12.75 | % | ||||||||
6. | U.S. Government Agencies | 19.72 | % | ||||||||
7. | Preferred Stock | 6.17 | % | ||||||||
8. | Cash and Cash Equivalents | 1.17 | % |
9
Pacific Advisors
Income and Equity Fund continued
Expense Examples
As a shareholder of the Fund you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from January 1, 2007 through June 30, 2007.
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During the Period" to estimate the expenses you paid on your account during the period.
The following transaction costs are not included in the expenses shown in the table and, if applicable, would increase the expenses that you paid over the period: (1) a front-end sales charge (load) of 4.75% on Class A shares; (2) a 2% redemption fee if you sell or exchange shares within 60 days of purchase, with certain exceptions. The redemption fee does not apply to: (a) redemptions under an automatic withdrawal program or periodic asset reallocation plan, required minimum distributions (RMD), employer mandated distributions from a qualified plan, or redemptions under a qualified domestic relations order (QDRO); (b) redemptions to pay for expenses related to terminal illness, extended hospital or nursing home care, or other serious medical conditions, including death; (c) redemptions of shares acquired through dividend or capital gains reinvestments, and (d) redemptions initiated by the Fund; and (3) a $10 service fee on each exchange aft er the first five exchanges in each calendar year.
The following ongoing costs are not included in the expenses shown in the table and, if applicable, would increase the expenses that you paid over the period: (1) a $12 low balance fee on accounts with balances of less than $250 as of September 30th of each calendar year and no investment activity (excluding reinvestment of dividends and/or capital gains) during the prior calendar year or the first nine months of the current calendar year. This fee does not apply to IRAs, qualified plan accounts, or Coverdell Education Savings Accounts; (2) a $15 annual custodial fee on IRAs, SEPs, SIMPLE IRAs, and Coverdell Education Savings Accounts; and (3) a $20 annual custodial fee on 403(b) accounts.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which in not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
The following transaction costs are not included in the expenses shown in the table and, if applicable, would increase the expenses that you paid over the period: (1) a front-end sales charge (load) of 4.75% on Class A shares; (2) a 2% redemption fee if you sell or exchange shares within 60 days of purchase, with certain exceptions. The redemption fee does not apply to: (a) redemptions under an automatic withdrawal program or periodic asset reallocation plan, required minimum distributions (RMD), employer mandated distributions from a qualified plan, or redemptions under a qualified domestic relations order (QDRO); (b) redemptions to pay for expenses related to terminal illness, extended hospital or nursing home care, or other serious medical conditions, including death; (c) redemptions of shares acquired through dividend or capital gains reinvestments, and (d) redemptions initiated by the Fund; and (3) a $10 service fee on each exchange aft er the first five exchanges in each calendar year.
The following ongoing costs are not included in the expenses shown in the table and, if applicable, would increase the expenses that you paid over the period: (1) a $12 low balance fee on accounts with balances of less than $250 as of September 30th of each calendar year and no investment activity (excluding reinvestment of dividends and/or capital gains) during the prior calendar year or the first nine months of the current calendar year. This fee does not apply to IRAs, qualified plan accounts, or Coverdell Education Savings Accounts; (2) a $15 annual custodial fee on IRAs, SEPs, SIMPLE IRAs, and Coverdell Education Savings Accounts; and (3) a $20 annual custodial fee on 403(b) accounts.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 1/1/2007 | Ending Account Value 6/30/2007 | Expense Paid During Period 01/01/07 – 06/30/07 | |||||||||||||
Income Class A | |||||||||||||||
Actual | $ | 1,000 | $ | 1,022.50 | $ | 9.78 | |||||||||
Hypothetical (5% return before expense) | $ | 1,000 | $ | 1,024.79 | $ | 9.79 | |||||||||
Income Class C | |||||||||||||||
Actual | $ | 1,000 | $ | 1,019.40 | $ | 13.52 | |||||||||
Hypothetical (5% return before expense) | $ | 1,000 | $ | 1,024.79 | $ | 13.56 |
4 Expenses are equal to the Fund's annualized expense ratio of 1.95% for Class A shares and 2.70% for Class C shares, multiplied by the average account value over the period, multiplied by 181/365 days to reflect the one-half year period.
10
Pacific Advisors
Balanced Fund
Seeks to achieve long-term capital appreciation and income consistent with reduced risk. Invests primarily in large and medium cap common stocks with at least 25% of its assets invested in fixed income securities and preferred stocks.
TOTAL RETURNS | EXPENSE RATIOS | ||||||||||
For the six months ended June 30, 2007 | For the fiscal year ended 12/31/06 | ||||||||||
Class A | 7.11 | % | 2.54 | % | |||||||
Class C | 6.70 | % | 3.30 | % |
For the six months ended June 30, 2007, the Fund's benchmarks, the Lehman Intermediate Corporate Bond Index1 and the S&P 500 Index2, rose 1.27% and 6.96%, respectively.
Figures shown are past performance and do not guarantee future results. Current performance may be higher or lower than the performance data quoted. For performance current to the most recent month-end call (800) 989-6693. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost.
Returns represent the change in value over the stated period assuming reinvestment of dividends and capital gains at net asset value. Returns do not take into account the maximum 5.75% sales charge on Class A shares and would be lower if the sales charge were included. Returns do not take into account individual taxes which may reduce actual returns when shares are sold. Expense ratios shown are for the Fund's most recent fiscal year ended December 31, 2006. Please see the Financial Highlights contained in this report for more details.
Interview with Portfolio Managers
Thomas H. Hanson
George A. Henning
Samuel C. Coquillard
Effective January 1, 2007, Mr. Hanson serves as lead portfolio manager for the Fund and Mr. Henning and Mr. Coquillard serve as portfolio managers with respect to the equity securities portion of the Fund.
What was the Fund's equity investment strategy in the first part of the year?
The equity markets have continued to offer better performance relative to the fixed income market in 2007. Therefore, the Fund maintained approximately 60% of its portfolio in equities and 40% in fixed income securities. Only minor adjustments were made to this mix to increase the potential for total return and position the Fund for long-term growth in response to changing market conditions. These strategies enabled the Fund to produce a solid total return and outperform its benchmarks in the first six months of the year.
The Fund's equity strategy focused on enhancing diversification to reduce volatility in the portfolio. We realized gains and selectively trimmed the Fund's energy exposure by pruning longer-term positions including Devon Energy, SunCor Energy and British Petroleum. This capital was used to increase the Fund's exposure to other sectors such as consumer staples and financials through positions in well-established, dividend-paying companies.
For example, the Fund took a new position in Procter & Gamble, a household name in personal care products. Procter & Gamble's stock was trading at a depressed price as a result of its recent acquisition of Gillette. This provided the Fund with an opportunity to invest in a well-established company with a good dividend rate at a discounted price. With the integration of Gillette largely complete, Procter & Gamble is on track to produce stronger earnings and revenue growth.
The Fund also enhanced diversification by selectively increasing its holdings in existing positions such as Chubb, which provides property and casualty insurance coverage to businesses and individuals. The company has achieved strong revenue and earnings growth over the last 5 years. Compelling long-term growth prospects, coupled with a respectable dividend rate, led the Fund to increase its position in the company.
1 The Lehman Intermediate Corporate Bond Index is an unmanaged index of intermediate term U.S. corporate bonds since 01/01/73.
2 The Standard & Poor's 500 Index is an unmanaged, market capitalization weighted measure of 500 widely held common stocks listed on the New York Stock Exchange, American Stock Exchange and The Nasdaq Stock Market. Index returns assume the reinvestment of dividends, but, unlike the Fund's returns, do not reflect the effects of management fees or expenses.
11
Pacific Advisors
Balanced Fund continued
What changes were made in the Fund's fixed income investments in 2007?
The corporate bond market remained challenging in the first half of the year. Interest rate risk remained a concern in light of an overall rise in intermediate and long-term rates. In addition, high-quality, investment grade bonds continued to remain in short supply. Many corporations still possessed ample cash reserves giving them little need to issue debt while rising interest rates provided an incentive for companies to reduce existing debt.
Given the limited availability of investment-grade corporate bonds, the Fund maintained approximately 9% of its portfolio in U.S. government agency bonds. Government agency bonds are issued by agencies affiliated with the U.S. government and generally pay higher interest rates than U.S. Treasury securities. Government agency securities provided an attractive alternative to corporate bonds for their ability to offer competitive yields without increasing risk to the Fund.
The Fund's fixed income strategy also included adding select preferred stock holdings in well-known companies such as AT&T, ING Group and American International Group. Preferred stock, while typically considered an equity, acts like a bond by paying a fixed dividend rate. Recently, preferred stock issues have carried higher yields than many corporate bonds. This created an opportunity for the Fund to increase income and capital appreciation potential without exposing the portfolio to greater volatility.
The recent fallout in the sub-prime market has had little impact on the Fund's investment strategy. The Fund is designed for more conservative investors. As we have discussed, the Fund concentrates its fixed income investment in high-quality, investment grade securities as opposed to higher risk, derivative products.
How has global economic growth impacted the Fund's investment strategy?
The fluid exchange of goods, services and information between countries connects the world's economies like never before. As a result, long-term global trends can have a significant impact on U.S. companies with international exposure. In the first half of 2007, global economic growth topped 5% and this extraordinary pace is likely to continue as consumer and commercial demand increases around the world.
Much of this growth is tied to investment in commercial building and infrastructure which has dramatically increased the demand for basic materials such as concrete, steel, copper, and iron. The Fund benefited from global growth in this area through well-established multi-national companies including Rio Tinto, a copper and iron ore producer; Reliance Steel & Aluminum, a steel and metals processor; and Ingersoll-Rand, which makes construction equipment.
The Fund has also benefited from increased global demand for energy resources and energy-related services through positions in companies such as ConocoPhillips and British Petroleum. Growing energy consumption also translates into long-term growth across a variety of energy-related fields such as transportation, industrials and equipment. Holdings in companies such as GATX and Grant PrideCo have provided an opportunity for the Fund to capitalize on worldwide expansion in these areas.
How has the Balanced Fund capitalized on growth in the U.S. economy?
Many of the global trends discussed above are also driving U.S. economic growth. The Fund participated in the rising demand for energy in the U.S. through domestic natural gas firms Williams Companies and Spectra Energy Corporation. Furthermore, holdings in industrial equipment and services companies such as Cameron International and Ingersoll-Rand allowed the Fund to benefit from domestic infrastructure-related growth.
The Fund also maintained a focus on select areas of consumer spending. One such area is multi-media corporations which have benefited from the increased dependence on instant access to information, whether in the form of wireless data transmission, broadcast television, radio communications or internet resources. Holdings such as Time Warner; Walt Disney; CBS; and General Electric, with its subsidiary of
12
NBC Universal, provided exposure to several of the major U.S. entities which create and distribute news, information and entertainment. Maintaining positions in the media sector enables the Fund to capitalize on the technological advancements in the marketplace without taking on the higher risk associated with investments in technology, hardware and software manufacturers, or internet service providers.
Where do you see investment opportunities for the Fund going in the last half of 2007?
The global economy is expected to continue its strong rate of growth for the foreseeable future. The long-term outlook for the U.S. economy also remains positive, although growth is expected to continue at a more moderate rate. The Fund will continue to weight its portfolio toward equities with a focus on companies poised to benefit from this dual economic growth.
We expect that the energy sector will continue to lead the market and will continue to represent a significant portion of the Fund's equity holdings. At the same time, we also anticipate adding a limited number of new positions in areas such as healthcare equipment, industrials and basic materials for added diversification. The Fund will seek select opportunities in these areas through undervalued, dividend-paying, large cap companies with strong growth prospects.
We do not anticipate a significant change in the corporate bond market before the end of the year. The Fund will continue to remain defensively positioned in its fixed income holdings to manage ongoing risk and volatility in this area of the market. When it becomes clear that interest rates have reached a peak, the Fund will look to take advantage of opportunities to enhance long-term growth by locking in higher yields and capital appreciation potential.
Portfolio Holdings as of 06/30/07 (Based on Total Investments)
Equities | 62.39 | % | |||||||||
1. | Financials | 13.42 | % | ||||||||
2. | Energy | 12.84 | % | ||||||||
3. | Industrials | 9.92 | % | ||||||||
4. | Health Care | 6.26 | % | ||||||||
5. | Information Technology | 5.35 | % | ||||||||
6. | Materials | 4.92 | % | ||||||||
7. | Other Equities | 9.68 | % | ||||||||
8. | Corporate Bonds | 27.75 | % | ||||||||
9. | U.S. Government Agencies | 8.66 | % | ||||||||
10. | Preferred Stock | 1.14 | % | ||||||||
11. | Cash and Cash Equivalents | 0.06 | % |
13
Pacific Advisors
Balanced Fund continued
Expense Examples
As a shareholder of the Fund you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from January 1, 2007 through June 30, 2007.
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During the Period" to estimate the expenses you paid on your account during the period.
The following transaction costs are not included in the expenses shown in the table and, if applicable, would increase the expenses that you paid over the period: (1) a front-end sales charge (load) of 5.75% on Class A shares; (2) a 2% redemption fee if you sell or exchange shares within six months of purchase, with certain exceptions. The redemption fee does not apply to: (a) redemptions under an automatic withdrawal program or periodic asset reallocation plan, required minimum distributions (RMD), employer mandated distributions from a qualified plan, or redemptions under a qualified domestic relations order (QDRO); (b) redemptions to pay for expenses related to terminal illness, extended hospital or nursing home care, or other serious medical conditions, including death; (c) redemptions of shares acquired through dividend or capital gains reinvestments, and (d) redemptions initiated by the Fund; and (3) a $10 service fee on each exchange after the first five exchanges in each calendar year.
The following ongoing costs are not included in the expenses shown in the table and, if applicable, would increase the expenses that you paid over the period: (1) a $12 low balance fee on accounts with balances of less than $250 as of September 30th of each calendar year and no investment activity (excluding reinvestment of dividends and/or capital gains) during the prior calendar year or the first nine months of the current calendar year. This fee does not apply to IRAs, qualified plan accounts, or Coverdell Education Savings Accounts; (2) a $15 annual custodial fee on IRAs, SEPs, SIMPLE IRAs, and Coverdell Education Savings Accounts; and (3) a $20 annual custodial fee on 403(b) accounts.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which in not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
The following transaction costs are not included in the expenses shown in the table and, if applicable, would increase the expenses that you paid over the period: (1) a front-end sales charge (load) of 5.75% on Class A shares; (2) a 2% redemption fee if you sell or exchange shares within six months of purchase, with certain exceptions. The redemption fee does not apply to: (a) redemptions under an automatic withdrawal program or periodic asset reallocation plan, required minimum distributions (RMD), employer mandated distributions from a qualified plan, or redemptions under a qualified domestic relations order (QDRO); (b) redemptions to pay for expenses related to terminal illness, extended hospital or nursing home care, or other serious medical conditions, including death; (c) redemptions of shares acquired through dividend or capital gains reinvestments, and (d) redemptions initiated by the Fund; and (3) a $10 service fee on each exchange after the first five exchanges in each calendar year.
The following ongoing costs are not included in the expenses shown in the table and, if applicable, would increase the expenses that you paid over the period: (1) a $12 low balance fee on accounts with balances of less than $250 as of September 30th of each calendar year and no investment activity (excluding reinvestment of dividends and/or capital gains) during the prior calendar year or the first nine months of the current calendar year. This fee does not apply to IRAs, qualified plan accounts, or Coverdell Education Savings Accounts; (2) a $15 annual custodial fee on IRAs, SEPs, SIMPLE IRAs, and Coverdell Education Savings Accounts; and (3) a $20 annual custodial fee on 403(b) accounts.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 1/1/2007 | Ending Account Value 6/30/2007 | Expense Paid During Period 01/01/07 – 06/30/07 | |||||||||||||
Balanced Fund Class A | |||||||||||||||
Actual | $ | 1,000 | $ | 1,071.10 | $ | 11.71 | |||||||||
Hypothetical (5% return before expense) | $ | 1,000 | $ | 1,024.79 | $ | 11.45 | |||||||||
Balanced Fund Class C | |||||||||||||||
Actual | $ | 1,000 | $ | 1,067.00 | $ | 15.58 | |||||||||
Hypothetical (5% return before expense) | $ | 1,000 | $ | 1,024.79 | $ | 15.26 |
4 Expenses are equal to the Fund's annualized expense ratio of 2.28% for Class A shares and 3.04% for Class C shares, multiplied by the average account value over the period, multiplied by 181/365 days to reflect the one-half year period.
14
Pacific Advisors
Growth Fund
Seeks to achieve long-term capital appreciation. Invests primarily in medium to large capitalization companies whose stocks are a part of the S&P 500 Index1 or the Nasdaq 100 Index2.
TOTAL RETURNS | EXPENSE RATIOS | ||||||||||||||
For the six months ended June 30, 2007 | For the fiscal year ended 12/31/06 | ||||||||||||||
Expense Ratio | Net Expense Ratio | ||||||||||||||
Class A | 11.83 | % | 3.68 | % | 2.64 | % | |||||||||
Class C | 11.41 | % | 4.44 | % | 3.40 | % |
For the six months ended June 30, 2007, the Fund's benchmarks, the S&P 500 and the Russell 10003, rose 6.96% and 7.18%, respectively.
Figures shown are past performance and do not guarantee future results. Current performance may be higher or lower than the performance data quoted. For performance current to the most recent month-end call (800) 989-6693. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost.
Returns represent the change in value over the stated period assuming reinvestment of dividends and capital gains at net asset value. Returns do not take into account the maximum 5.75% sales charge on Class A shares and would be lower if the sales charge were included. Returns do not take into account individual taxes which may reduce actual returns when shares are sold.
Expense ratios shown are for the Fund's most recent fiscal year ended December 31, 2006. The Fund's investment adviser is waiving a portion of its management fees. Results shown reflect the waiver, without which the results would have been lower. Expense ratios shown reflect the waiver, without which they would have been higher. Please see the Financial Highlights contained in this report for more details.
Interview with Portfolio Manager
Thomas H. Hanson
What economic trends influenced the Fund's investment strategy in the first half of 2007?
The first half of the year brought a continuation of the longer-term trends which have been developing in the global and domestic economies over the past year. The most influential trends included strong global economic growth; rising interest rates coupled with moderate inflation; and continued demand and competition for oil, energy, and other commodities. Continuing the investment strategy implemented in 2006, the Fund remained concentrated in those sectors and stocks positioned to benefit from these trends.
Throughout the first half of the year, the Fund remained oriented toward the energy, healthcare, industrials, and basic materials sectors. Investments in these sectors remained relatively stable throughout the period resulting in little turnover. While there were no pronounced sector rotations or shifts, minor adjustments were made in the portfolio to rebalance positions to reduce risk and achieve desired sector weightings.
Energy and energy related holdings such as ConocoPhillips and Apache Corp. performed well for the Fund as did industrial holdings such as Commercial Metals. The major demographic shift in the U.S. toward an aging population continued to make healthcare investments attractive, particularly in the healthcare equipment and services industries. Companies such as Zimmer Holdings, which specializes in hip and joint replacements, and St. Jude Medical, which produces replacement heart valves, continued to perform well for the Fund. Portfolio holdings also focused on other select sectors such as information technology which benefited from the rapid growth in the U.S. and Asian telecommunications markets.
1 The Standard & Poor's 500 Index is an unmanaged, market capitalization weighted measure of 500 widely held common stocks listed on the New York Stock Exchange, American Stock Exchange and The Nasdaq Stock Market. Index returns assume the reinvestment of dividends, but, unlike the Fund's returns, do not reflect the effects of management fees or expenses.
2 The Nasdaq 100 Stock Index is an unmanaged, market capitalization weighted measure of the 100 largest non-financial domestic and international common stocks listed on The Nasdaq Stock Market. Index returns assume the reinvestment of dividends, but, unlike the Fund's returns, do not reflect management fees or expenses.
3 The Russell 1000 Stock Index is an unmanaged, market capitalization weighted measure of stock market performance. It contains the stocks of the 1,000 largest publicly traded companies within the Russell 3000 Index. Index returns assume the reinvestment of dividends, but, unlike the Fund's returns, do not reflect the effects of capital gains, management fees, or expenses.
15
Pacific Advisors
Growth Fund continued
How does the Fund manage sector-specific risks?
The Fund takes a more conservative top-down investment approach that focuses on investments in the leading market sectors. We do not buy stocks based solely on share price momentum or price per earnings. Rather, we look for companies in those sectors with strong fundamentals and competitive advantages that offer solid growth potential at a reasonable price. The stock selection process takes into consideration the impact of longer-term economic trends and company-specific events.
Over the past year, the Fund has maintained a larger exposure to the industrials and basic materials sectors. Companies in the industrial and basic materials sectors – such as iron, copper, aluminum, and steel firms – provide the building blocks for economic growth and are the primary beneficiaries of global and domestic investments in infrastructure. In particular, these companies are expected to benefit from billions of dollars in future spending as a result of the emerging domestic trend to reinvest in infrastructure improvements on aging roads, sewer systems, and bridges.
Industrials and basic materials are examples of fast-paced sectors where sudden price shifts are commonplace. While the Fund avoids areas marked by speculative or short-term growth, some short-term volatility may be acceptable in exchange for the benefits offered by long-term growth potential. The Fund has strategically participated in the industrials and basic materials sectors through well-run companies, such as Chicago Bridge and Iron, which is positioned to participate in this multi-year growth cycle.
How has the Fund managed risk in light of slower economic growth in the U.S. economy?
The U.S. economy continued to grow at a more moderate rate in the first half of the year. As typical in a moderately growing economy, this period was marked by heightened market volatility in response to uneven economic data. The Fund actively managed this risk through diversification and strategic cash management.
The Fund's portfolio is diversified across various sectors to provide a counterbalance to the impact of sudden shifts in market or economic conditions. This includes maintaining positions in more defensive industries such as healthcare and consumer staples with holdings such as Johnson & Johnson and Chattem. The Fund also manages volatility through stock selection by focusing on companies with strong fundamentals that offer stable growth.
The Fund is unique in its use of cash to offset market volatility. Cash reserves tend to range between 5% and 10% of the Fund's portfolio. Cash levels may be temporarily increased as a hedge against volatility during periods of elevated market risk. As market volatility moderates, the Fund redeploys cash reserves into emerging opportunities. The Fund maintained approximately 9% of its portfolio in cash throughout the first six months of the year in light of continued market volatility.
How does a company's size factor into the Fund's stock selection?
The Fund focuses on large cap companies and complements these holdings with modest positions in mid and small cap companies within key sectors. This diversification strategy contributes to the Fund's total return by providing measured exposure to all market capitalizations. While maintaining its large cap orientation, the Fund looks for growth opportunities in mid and small cap stocks which shadow or mimic large cap companies.
For example, in the energy sector, large cap holdings such as Apache are supplemented by positions such as Carbo Ceramics, a smaller energy services company. In the healthcare sector, the Fund has invested in select mid cap companies that offer same growth potential and competitive advantages as many large caps such Quest Diagnostics, one of only two major medical lab testing companies in the U.S.
In addition, the Fund may utilize select small cap stocks to participate in growth within specialized industries. In the information technology sector, the Fund has benefited from its position in ITron, a small cap utility services provider. ITron provides wireless receivers that read water, electric, and gas meters from long distances which enables utilities to increase their productivity and shorten billing cycles.
16
How does a low portfolio turnover rate support the Fund's investment strategy?
Many growth funds shift sector allocations rapidly to follow market momentum which typically results in a high portfolio turnover rate. High portfolio turnover typically results in increased trading costs and tax consequences for a fund. While the Fund adapts to fundamental changes in market leadership, it does not chase short-term performance. As stated earlier, the Fund takes a long-term investment approach that seeks to invest in sectors and companies with sustainable, multi-year growth patterns. The Fund's more conservative growth-at-a-reasonable-price strategy enables it to seek above-average performance and manage risk. Unique from other g rowth funds, Fund has been able to achieve its investment objectives while maintaining a relatively low turnover rate.4
Where do you anticipate the best growth opportunities will be in the remainder of 2007?
We do not foresee a significant change in the global or domestic economic trends during the last half of the year. The U.S. economy is on track to achieve a moderate and sustainable growth rate for the year in the range of 21/2% to 3%. Strong balance sheets also leave corporate America well positioned for continued growth in the second half of 2007. As growth continues at a moderate pace, we expect to experience continued volatility in the market as economic indicators fluctuate from time to time.
The Fund will remain focused on sectors and stocks that offer long-term growth at a reasonable price. The energy, energy-related, and industrials sectors should continue to lead the market due to unprecedented global demand for oil and basic materials. We will continue to monitor the economic environment for changes in market leadership and new growth opportunities.
Portfolio Holdings as of 06/30/07 (Based on Total Investments)
Equities | 90.40 | % | |||||||||
1. | Energy | 29.32 | % | ||||||||
2. | Health Care | 25.66 | % | ||||||||
3. | Industrials | 10.86 | % | ||||||||
4. | Information Technology | 8.32 | % | ||||||||
5. | Materials | 6.67 | % | ||||||||
6. | Other Equities | 4.96 | % | ||||||||
7. | Financials | 4.61 | % | ||||||||
8. | Cash and Cash Equivalents | 9.60 | % |
4 The Fund had an annualized turnover ratio of 16.44% for the six months ended June 30, 2007; 22.80% for the year ended December 31, 2006; 30.54% for the year ended December 31, 2005; 12.96% for the year ended December 31, 2004; and 34.58% for the year ended December 31, 2003.
17
Pacific Advisors
Growth Fund continued
Expense Examples
As a shareholder of the Fund you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from January 1, 2007 through June 30, 2007.
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During the Period" to estimate the expenses you paid on your account during the period.
The following transaction costs are not included in the expenses shown in the table and, if applicable, would increase the expenses that you paid over the period: (1) a front-end sales charge (load) of 5.75% on Class A shares; (2) a 2% redemption fee if you sell or exchange shares within six months of purchase, with certain exceptions. The redemption fee does not apply to: (a) redemptions under an automatic withdrawal program or periodic asset reallocation plan, required minimum distributions (RMD), employer mandated distributions from a qualified plan, or redemptions under a qualified domestic relations order (QDRO); (b) redemptions to pay for expenses related to terminal illness, extended hospital or nursing home care, or other serious medical conditions, including death; (c) redemptions of shares acquired through dividend or capital gains reinvestments, and (d) redemptions initiated by the Fund; and (3) a $10 service fee on each exchange after the first five exchanges in each calendar year.
The following ongoing costs are not included in the expenses shown in the table and, if applicable, would increase the expenses that you paid over the period: (1) a $12 low balance fee on accounts with balances of less than $250 as of September 30th of each calendar year and no investment activity (excluding reinvestment of dividends and/or capital gains) during the prior calendar year or the first nine months of the current calendar year. This fee does not apply to IRAs, qualified plan accounts, or Coverdell Education Savings Accounts; (2) a $15 annual custodial fee on IRAs, SEPs, SIMPLE IRAs, and Coverdell Education Savings Accounts; and (3) a $20 annual custodial fee on 403(b) accounts.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which in not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
The following transaction costs are not included in the expenses shown in the table and, if applicable, would increase the expenses that you paid over the period: (1) a front-end sales charge (load) of 5.75% on Class A shares; (2) a 2% redemption fee if you sell or exchange shares within six months of purchase, with certain exceptions. The redemption fee does not apply to: (a) redemptions under an automatic withdrawal program or periodic asset reallocation plan, required minimum distributions (RMD), employer mandated distributions from a qualified plan, or redemptions under a qualified domestic relations order (QDRO); (b) redemptions to pay for expenses related to terminal illness, extended hospital or nursing home care, or other serious medical conditions, including death; (c) redemptions of shares acquired through dividend or capital gains reinvestments, and (d) redemptions initiated by the Fund; and (3) a $10 service fee on each exchange after the first five exchanges in each calendar year.
The following ongoing costs are not included in the expenses shown in the table and, if applicable, would increase the expenses that you paid over the period: (1) a $12 low balance fee on accounts with balances of less than $250 as of September 30th of each calendar year and no investment activity (excluding reinvestment of dividends and/or capital gains) during the prior calendar year or the first nine months of the current calendar year. This fee does not apply to IRAs, qualified plan accounts, or Coverdell Education Savings Accounts; (2) a $15 annual custodial fee on IRAs, SEPs, SIMPLE IRAs, and Coverdell Education Savings Accounts; and (3) a $20 annual custodial fee on 403(b) accounts.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 1/1/2007 | Ending Account Value 6/30/2007 | Expense Paid During Period 01/01/07 – 06/30/07 | |||||||||||||
Growth Fund Class A | |||||||||||||||
Actual | $ | 1,000 | $ | 1,118.30 | $ | 13.92 | |||||||||
Hypothetical (5% return before expense) | $ | 1,000 | $ | 1,024.79 | $ | 13.30 | |||||||||
Growth Fund Class C | |||||||||||||||
Actual | $ | 1,000 | $ | 1,114.10 | $ | 17.82 | |||||||||
Hypothetical (5% return before expense) | $ | 1,000 | $ | 1,024.79 | $ | 17.07 |
5 Expenses are equal to the Fund's annualized expense ratio of 2.65% for Class A shares and 3.40% for Class C shares, multiplied by the average account value over the period, multiplied by 181/365 days to reflect the one-half year period.
18
Pacific Advisors
Multi-Cap Value Fund
Seeks to achieve long-term capital appreciation. Invests in a diversified portfolio of large to small capitalization companies using an actively managed, value investment approach.
TOTAL RETURNS | EXPENSE RATIOS | ||||||||||
For the six months ended June 30, 2007 | For the fiscal year ended 12/31/06 | ||||||||||
Class A | 6.26 | % | 3.02 | % | |||||||
Class C | 5.86 | % | 3.79 | % |
For the six months ended June 30, 2007, the Fund's benchmark, the S&P 500 Index1, rose 6.96%.
Figures shown are past performance and do not guarantee future results. Current performance may be higher or lower than the performance data quoted. For performance current to the most recent month-end call (800) 989-6693. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost.
Returns represent the change in value over the stated period assuming reinvestment of dividends and capital gains at net asset value. Returns do not take into account the maximum 5.75% sales charge on Class A shares and would be lower if the sales charge were included. Returns do not take into account individual taxes which may reduce actual returns when shares are sold. Expense ratios shown are for the Fund's most recent fiscal year ended December 31, 2006. Please see the Financial Highlights contained in this report for more details on the expense ratio data shown.
Interview with Portfolio Managers
George A. Henning
Samuel C. Coquillard
Effective May 1, 2007, George A. Henning serves as lead portfolio manager for the Fund.
Were there any significant changes in the Fund's investment strategy during the period?
The global economy has remained strong in 2007. Many developing countries continued to enjoy growing prosperity producing robust demand for goods and services worldwide. The industrial manufacturing and service sectors have provided greater employment opportunities for citizens in these countries raising the level of consumer spending. The U.S. economy has also continued to grow at a healthy but moderate rate. The overall, long-term outlook for the domestic economy remains positive despite problems in certain segments of the economy.
A multi-cap fund seeks the best investment opportunities across the equity market from companies of all sizes. While this is a broad mandate, the Fund's strategy is to focus its emphasis on a limited number of companies poised to benefit from longer-term growth trends in the domestic and global economies. The Fund specifically looks for undervalued stocks with strong fundamental value that offer good long-term growth potential.
During the first half of the year, we shifted toward increasing the Fund's holdings in mid and small cap companies. We continue to believe that select large cap stocks offer particular advantages due to their economies of scale and multi-national operations. However, it is often more difficult to find large cap stocks trading at a discount unless they are in sectors that are out of favor or in a turnaround situation.
Mid and small cap companies give the Fund exposure to additional, and often unique, value opportunities. These companies are particularly attractive because they often have little research coverage and therefore may offer more fundamental value. The smaller size of these companies is often an advantage as their business operations are more straightforward making it easier to evaluate their fundamental value and growth potential. While they may be smaller, many of these companies have international operations which allow them to participate in domestic and international growth opportunities.
1 The Standard & Poor's 500 Index is an unmanaged, market capitalization weighted measure of 500 widely held common stocks listed on the New York Stock Exchange, American Stock Exchange and The Nasdaq Stock Market. Index returns assume the reinvestment of dividends, but, unlike the Fund's returns, do not reflect the effects of management fees or expenses.
19
Pacific Advisors
Multi-Cap Value Fund continued
Which holdings did the Fund sell in the first half of the year?
During the first quarter, there were concerns that inflationary pressures could become a severe drag on the U.S. economy. Specific concerns focused on the impact of rising energy prices and a downturn in the housing market on consumer spending, which accounts for nearly two thirds of economy. Inflationary pressures also raised questions as to whether businesses would need and have the ability to raise prices to offset increases in wages and other manufacturing costs.
In response to these immediate economic concerns, the Fund sold positions that were more fully valued or more susceptible to a slowdown in consumer spending. These positions included Activision, a video game manufacturer; Whole Foods, an organic food retailer; and Dell and Yahoo in the technology sector. While these companies have well-known brand n ames, their upside potential appeared limited in comparison to their downside risk.
As a value Fund, it is important to manage risk by employing a disciplined buy and sell strategy. Our decision making process focuses on evaluating overall market conditions as well as the future growth potential of the individual company. We trim, or sell a position in its entirety, when we believe the stock has reached its fair market value, or when we identify a change in the business outlook for the company.
What were some of the new positions added to the Fund?
When business conditions appear to be deteriorating in a particular sector, the market often reacts first and analyzes later. Any company with exposure to that sector is sold regardless of it will actually be impacted by weakness in the sector. This dynamic often provides an opportunity to initiate or add to positions in companies with good long-term value at discounted prices.
In the first half of the year, this type of situation provided an opportunity for the Fund to take a position in H.B. Fuller, a small cap company that produces adhesives for the automotive industry. The company's stock price had fallen due to its ties to the struggling automotive industry, despite the fact that its products are used internationally in a variety of industries. Our research indicated that H.B. Fuller had strong intrinsic value with the potential for long-term growth making it an attractive investment opportunity.
The Fund saw another value opportunity in Graco, a company that manufactures equipment systems for the management of fluids in commercial and industrial businesses. This mid-cap industrial company has excellent profit margins and sells its products worldwide. Graco's stock price had declined because of its strong presence in the U.S. housing market with its paint sprayer equipment. However, the company's international operations have made up for much of the shortfall in sales in the housing market.
Arch Coal was also added to the portfolio. This is a mid-cap company mines and sells coal to power plants in the U.S. and overseas. Coal continues to be an important energy source for power plants and the company should continue to benefit from demand in this sector.
Were there any significant changes in the Fund's existing positions?
In the absence of clear information with respect to company-specific losses, the credit problems in the sub-prime market resulted in declining stock prices for most financial institutions. Nevertheless, the turmoil in the credit markets will not effect all financial institutions equally. We believe the longer-term outlook remains favorable for select companies with less exposure to the problems in this area of the market. The correction in this sector provided the Fund with the opportunity add to its positions in some of these companies including Washington Mutual and Cit igroup.
The Fund has held a position in Washington Mutual for some time. While the mortgage business has been an important catalyst for the company's growth, sub-prime loans are a smaller part of its lending portfolio. Losses related to the sub-prime fallout may temporarily impact revenue and earnings, but we believe its long-term growth opportunities remain favorable given its strong branch banking system in the western United States. As the company manages its way through the downturn in the mortgage lending cycle, it continues to pay a healthy 6% dividend which adds to the Fund's total return.
20
Citigroup is one of the largest global banks. Its stock price has been depressed as the company dealt with regulatory problems and restructuring after years of aggressive acquisitions. To address these problems, the company streamlined its operations, divested non-performing or non-strategic operations and aggressively cut costs. With its strong balance sheet and global expertise in international financial services, we believe the company is well positioned grow its revenues and earnings. In addition, Citigroup also pays an attractive dividend rate which benefits the Fund.
The Fund also increased its holding in Tyco during 2007. While the company announced plans to split into three new entities, its stock price remained depressed. Investors reacted cautiously due to concerns about outstanding litigation issues, the diversity of business operations and skepticism as to whether they would get the necessary regulatory, creditor and shareholder approvals required to effect the transaction. We believed the company's intrinsic value was greater than its market value making it an attractive investment for the Fund.
What is your outlook for the equity markets in the remainder of the year?
As we stated earlier, global economic growth remains robust. We believe the U.S. economic outlook remains positive as well. While the disruption in the U.S. credit markets may create a temporary setback, we do not see signs of a significant slowdown or a pending recession in the U.S. economy. We remain vigilant to changing market and economic conditions. However, we believe the current market correction is a healthy pause in what has been a strong equity market over the past year.
It is often difficult to find a silver lining in the midst of turmoil in the equity and bond markets. Many companies have done a good job of managing their balance sheets by reducing debt and maintaining adequate credit lines to provide funding for strategic growth initiatives. The recent period of low interest rates and lax credit requirements favored private equity firms willing to pay a significant premium in making acquisitions. This made it difficult for companies to make strategic acquisitions at a fair value price. We believe higher interest rates and tighter credit terms will even the playing field for companies to make strategic acquisitions. Sometimes one investor's problem is another investor's opportunity.
We believe the correction will offer the opportunity to add to existing positions at favorable prices and will enable the Fund to consider other equity investments with attractive valuations. Our overall outlook remains positive and we believe the market will rebound over the next several months.
Portfolio Holdings as of 06/30/07 (Based on Total Investments)
Equities | 100.00 | % | |||||||||
1. | Industrials | 21.48 | % | ||||||||
2. | Energy | 19.45 | % | ||||||||
3. | Financials | 18.17 | % | ||||||||
4. | Health Care | 10.61 | % | ||||||||
5. | Consumer Staples | 10.22 | % | ||||||||
6. | Materials | 7.85 | % | ||||||||
7. | Consumer Discretionary | 6.14 | % | ||||||||
8. | Information Technology | 6.08 | % |
21
Pacific Advisors
Multi-Cap Value Fund continued
Expense Examples
As a shareholder of the Fund you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from January 1, 2007 through June 30, 2007.
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During the Period" to estimate the expenses you paid on your account during the period.
The following transaction costs are not included in the expenses shown in the table and, if applicable, would increase the expenses that you paid over the period: (1) a front-end sales charge (load) of 5.75% on Class A shares; (2) a 2% redemption fee if you sell or exchange shares within six months of purchase, with certain exceptions. The redemption fee does not apply to: (a) redemptions under an automatic withdrawal program or periodic asset reallocation plan, required minimum distributions (RMD), employer mandated distributions from a qualified plan, or redemptions under a qualified domestic relations order (QDRO); (b) redemptions to pay for expenses related to terminal illness, extended hospital or nursing home care, or other serious medical conditions, including death; (c) redemptions of shares acquired through dividend or capital gains reinvestments, and (d) redemptions initiated by the Fund; and (3) a $10 service fee on each exchange after the first five exchanges in each calendar year.
The following ongoing costs are not included in the expenses shown in the table and, if applicable, would increase the expenses that you paid over the period: (1) a $12 low balance fee on accounts with balances of less than $250 as of September 30th of each calendar year and no investment activity (excluding reinvestment of dividends and/or capital gains) during the prior calendar year or the first nine months of the current calendar year. This fee does not apply to IRAs, qualified plan accounts, or Coverdell Education Savings Accounts; (2) a $15 annual custodial fee on IRAs, SEPs, SIMPLE IRAs, and Coverdell Education Savings Accounts; and (3) a $20 annual custodial fee on 403(b) accounts.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which in not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
The following transaction costs are not included in the expenses shown in the table and, if applicable, would increase the expenses that you paid over the period: (1) a front-end sales charge (load) of 5.75% on Class A shares; (2) a 2% redemption fee if you sell or exchange shares within six months of purchase, with certain exceptions. The redemption fee does not apply to: (a) redemptions under an automatic withdrawal program or periodic asset reallocation plan, required minimum distributions (RMD), employer mandated distributions from a qualified plan, or redemptions under a qualified domestic relations order (QDRO); (b) redemptions to pay for expenses related to terminal illness, extended hospital or nursing home care, or other serious medical conditions, including death; (c) redemptions of shares acquired through dividend or capital gains reinvestments, and (d) redemptions initiated by the Fund; and (3) a $10 service fee on each exchange after the first five exchanges in each calendar year.
The following ongoing costs are not included in the expenses shown in the table and, if applicable, would increase the expenses that you paid over the period: (1) a $12 low balance fee on accounts with balances of less than $250 as of September 30th of each calendar year and no investment activity (excluding reinvestment of dividends and/or capital gains) during the prior calendar year or the first nine months of the current calendar year. This fee does not apply to IRAs, qualified plan accounts, or Coverdell Education Savings Accounts; (2) a $15 annual custodial fee on IRAs, SEPs, SIMPLE IRAs, and Coverdell Education Savings Accounts; and (3) a $20 annual custodial fee on 403(b) accounts.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 1/1/2007 | Ending Account Value 6/30/2007 | Expense Paid During Period 01/01/07 – 06/30/07 | |||||||||||||
Multi-Cap Fund Class A | |||||||||||||||
Actual | $ | 1,000 | $ | 1,062.60 | $ | 14.42 | |||||||||
Hypothetical (5% return before expense) | $ | 1,000 | $ | 1,024.79 | $ | 14.16 | |||||||||
Multi-Cap Fund Class C | |||||||||||||||
Actual | $ | 1,000 | $ | 1,058.60 | $ | 18.17 | |||||||||
Hypothetical (5% return before expense) | $ | 1,000 | $ | 1,024.79 | $ | 17.87 |
3 Expenses are equal to the Fund's annualized expense ratio of 2.82% for Class A shares and 3.56% for Class C shares, multiplied by the average account value over the period, multiplied by 181/365 days to reflect the one-half year period.
22
Pacific Advisors
Small Cap Fund
Seeks to achieve long-term capital appreciation. Invests in small company stocks with strong earnings growth potential using a value investment approach with a focus on companies whose market capitalization is below $500 million.
TOTAL RETURNS | EXPENSE RATIOS | ||||||||||
For the six months ended June 30, 2007 | For the fiscal year ended 12/31/06 | ||||||||||
Class A | 19.84 | % | 2.78 | % | |||||||
Class C | 19.33 | % | 3.54 | % | |||||||
Class I | 19.87 | % | 2.48 | % |
For the six months ended June 30, 2007, the Fund's benchmark, the Russell 2000 Stock Index1, rose 6.45%.
Pacific Advisors Small Cap Fund (A) ranked as one of the top small cap value funds based on a one-year return as of June 30, 2007 according to Lipper.
LIPPER SMALL CAP VALUE CATEGORY
Rankings as of June 30, 2007 based on total return
Period | Return – Without Load | Return – With Load | Percentile | Rank | |||||||||||||||
1 Year | 34.11 | % | 26.41 | % | 2 | % | #4 out of 252 funds | ||||||||||||
3 Year | 26.46 | % | 23.99 | % | 1 | % | #1 out of 213 funds | ||||||||||||
5 Year | 27.23 | % | 25.73 | % | 1 | % | #1 out of 158 funds | ||||||||||||
10 Year | 12.04 | % | 11.38 | % | 39 | % | #22 out of 57 funds |
Figures shown are past performance and do not guarantee future results. Current performance may be higher or lower than the performance data quoted. For performance current to the most recent month-end call (800) 989-6693. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Small cap stocks typically have fewer financial resources and may carry higher risks and experience greater volatility than large cap stocks.
Returns represent the change in value over the stated period assuming reinvestment of dividends and capital gains at net asset value. Unless otherwise stated, returns do not take into account the maximum 5.75% sales charge on Class A shares and would be lower if the sales charge were included. Returns do not take into account individual taxes which may reduce actual returns when shares are sold. Rankings do not take sales loads into account. Expense ratios shown are for the Fund's most recent fiscal year ended December 31, 2006. Please see the Financial Highlights contained in this report for more details.
Interview with Portfolio Manager
George A. Henning
How did the Fund continue to achieve superior performance?
The Fund's success stems from knowing each company's story; maintaining a disciplined investment strategy; and, most significantly, exercising patience. The Fund maintains a focused portfolio of approximately 35 holdings. This enables us to cultivate a thorough understanding of each position which has been critical to managing the portfolio, particularly during market pullbacks.
Superior performance has been achieved by maintaining a disciplined investment strategy, especially during periods of market volatility. While market pullbacks are unsettling, they often create valuable investment opportunities. The Fund's success is also the result of continuous prospecting for long-term value opportunities and the patience to allow each company to achieve market recognition.
1 The Russell 2000 Stock Index is an unmanaged, market-weighted measure of stock market performance. It contains stocks of the 2,000 smallest publicly traded companies of the Russell 3000 Index. Index returns assume the reinvestment of dividends, but, unlike the Fund's returns, do not reflect management fees or expenses.
23
Pacific Advisors
Small Cap Fund continued
What factors had the greatest impact on the Fund's investment strategy in the first half of the year?
The market continued to advance in the first quarter but at a modest rate. While corporate balance sheets remained strong, concerns about inflation, energy costs, and geopolitical conditions sent mixed signals to Wall Street. Economic and earnings reports in April and May were better than anticipated which helped the market gain momentum in the late spring.
The Fund was well positioned to benefit from the market rally in the second quarter given its significant weighting in the industrial manufacturing and services, energy production and services, consumer products and marine transportation sectors. Demand for products and services in these sectors remained robust as a result of strong global economic growth and continued expansion in the U.S. economy. Early in the year, the Fund added to its holdings in several stocks from these sectors based on the belief that their valuations were low in comparison to their growth potential.
We did not make any major changes to the Fund's portfolio in the first half of the year. A significant portion of the Fund's gains came from existing positions as reflected by the low annualized portfolio turnover rate of 14% through June 30th.
Which companies had the strongest performance in the first six months?
Darling International, Terra Industries and Mitchum Industries were some of the Fund's strongest performers. Darling and Terra were direct beneficiaries of the increasing demand for alternative fuels. Darling experienced strong growth on rising demand for recycled animal processing by-products and used cooking oil from restaurants. Terra produces nitrogen and methanol products used in fertilizer. The rising demand for ethanol has resulted in strong demand for its fertilizer products as the acreage allocated to growing corn has soared.
Mitchum, another energy services company, leases seismic equipment used to map potential oil exploration sites on land and offshore. The company has exclusive rights from the manufacturers to lease their seismic equipment and provides technical services which enhance the data collection process in oil and gas exploration. As a relatively small company, Mitchum has successfully developed an international presence with the ability to increase its leasing activity worldwide. Furthermore, the demand for equipment in the offshore market is particularly strong as a greater effort is being made to identify new drilling sites in deeper waters.
The Fund also benefited from overall strength in many of its holdings that profited from continued growth in demand for manufacturing, industrial and energy services, and consumer products. While acquisition activity has had a lesser impact on the Fund this year, US Xpress Enterprises did announce a management led buyout offer in late June. The buyout, at a 44% premium over the per share price at the time of the offer, may be completed in the fall.
What new positions were added to the Fund's in 2007?
Only two new positions have been added to the Fund since the beginning of the year. Early in the year, the Fund added a position in Hornbeck Offshore Services which provides technologically advanced offshore supply vessels to oil and gas exploration companies. In late 2006, the Fund sold its position in Maritrans when that marine transportation company announced it was being acquired. We had been following Hornbeck for some time as a part of our search for other suitable marine transportation comp anies. In January, the company lowered its fourth quarter earnings estimate by 15% due to increased maintenance costs and its stock immediately declined over 30%. We viewed this decline as a temporary correction and initiated an investment in the company. As it became clear that Hornbeck's operating outlook was bright, we became more aggressive in adding to this position. Hornbeck subsequently became one of the Fund's largest holdings and the Fund benefited as the stock's price rebounded during the second quarter.
The Fund also added a position in Furmanite which provides technical services to refineries, chemical plants and other energy services companies. Furmanite is a turnaround situation and complements the Fund's long-term position in Team Inc. which has similar business operations. Team Inc. has had outstanding growth in the U.S. markets with a lesser presence in Europe. Furmanite has a stronger
24
presence in Europe as well as a growing presence in the U.S. We believe the energy services sector will remain strong and that these companies will benefit from on-going consolidation in this industry.
How have the financial companies in the Fund's portfolio been impacted by sub-prime lending problems?
The sub-prime loan crisis had an immediate impact on the share price of most financial institutions regardless of their exposure to the sub-prime lending market. For example, share prices dropped on two of the Fund's holdings, East West Bancorp and Nara Bank, despite the fact that neither bank engaged in sub-prime lending. Both banks reported good earnings in the second quarter and their outlook remains positive since their growth potential is not as reliant on the home mortgage market as compared to other banks. While it may be some time before financial stocks regain momentum, we viewed this pullback as a good opportunity to expand these posit ions at a significant discount.
What is the outlook for small cap stocks for the remainder of the year?
Small cap stocks continued to perform well this year. We believe that insightful stock selection based on individual company stories will continue to be the key to achieving performance in this "stock pickers" market. At this point in the current economic cycle, many small cap stocks remain undervalued based on their current growth rates and future growth potential.
Many companies have been more disciplined in managing their balance sheets during this period of moderate economic growth. In many cases, they have lowered debt ratios and increased their lending capacity which enables them to continue their strategic growth initiatives. Despite the recent problems in the credit markets, the overall U.S. economic outlook remains positive and is supported by strong global economic growth in excess of 5%. While it is inevitable that we will experience slower economic growth at some point, the longer-term trends remain favorable. At such time as the economy begins to slow, we anticipate that the Federal Reserve will lower interest rates to reinvigorate economic growth. Historically, smaller companies have been market leaders in a declining interest rate environment.
Where do you expect to find the best small cap opportunities in the coming months?
We believe the economy will continue to grow at a modest pace through the end of the year. While frustrating to investors, a moderate economic growth can be advantageous. It forces corporate management to be more fiscally disciplined and attentive to earnings. This kind of economic environment also minimizes the kind of market speculation which often accompanies rapid economic growth.
The Fund will remain focused on sectors with strong multi-year growth trends such as energy, manufacturing and related fields, transportation, healthcare and financials. We believe infrastructure spending will remain one of the more important international and domestic trends. Countries such as China, India and other Asian and Eastern European countries are continuing to build roads, buildings, power plants and communications systems necessary to support their economic growth. There is also a growing need within the U.S. to spend money on infrastructure for highways, power plants and municipal services to improve safety and support an expanding economy. These projects provide the potential to support economic growth for the next several years.
The Fund will continue to focus on identifying undervalued companies with strong fundamentals supported by growth models that are sustainable over several years. While we adapt the Fund's investment strategy to respond to short-term market fluctuations, the Fund will remain focused on finding investment opportunities that will benefit from the longer-term economic and market trends.
25
Pacific Advisors
Small Cap Fund continued
Portfolio Holdings as of 06/30/07 (Based on Total Investments)
Equities | 100.00 | % | |||||||||
1. | Industrials | 26.84 | % | ||||||||
2. | Energy | 24.50 | % | ||||||||
3. | Consumer Discretionary | 12.99 | % | ||||||||
4. | Financials | 9.51 | % | ||||||||
5. | Materials | 7.88 | % | ||||||||
6. | Information Technology | 7.04 | % | ||||||||
7. | Health Care | 5.04 | % | ||||||||
8. | Telecommunication Services | 3.51 | % | ||||||||
9. | Other Equities | 2.69 | % |
26
Expense Examples
As a shareholder of the Fund you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from January 1, 2007 through June 30, 2007.
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During the Period" to estimate the expenses you paid on your account during the period.
The following transaction costs are not included in the expenses shown in the table and, if applicable, would increase the expenses that you paid over the period: (1) a front-end sales charge (load) of 5.75% on Class A shares; (2) a 2% redemption fee if you sell or exchange shares within six months of purchase, with certain exceptions. The redemption fee does not apply to: (a) redemptions under an automatic withdrawal program or periodic asset reallocation plan, required minimum distributions (RMD), employer mandated distributions from a qualified plan, or redemptions under a qualified domestic relations order (QDRO); (b) redemptions to pay for expenses related to terminal illness, extended hospital or nursing home care, or other serious medical conditions, including death; (c) redemptions of shares acquired through dividend or capital gains reinvestments, and (d) redemptions initiated by the Fund; and (3) a $10 service fee on each exchange after the first five exchanges in each calendar year.
The following ongoing costs are not included in the expenses shown in the table and, if applicable, would increase the expenses that you paid over the period: (1) a $12 low balance fee on accounts with balances of less than $250 as of September 30th of each calendar year and no investment activity (excluding reinvestment of dividends and/or capital gains) during the prior calendar year or the first nine months of the current calendar year. This fee does not apply to IRAs, qualified plan accounts, or Coverdell Education Savings Accounts; (2) a $15 annual custodial fee on IRAs, SEPs, SIMPLE IRAs, and Coverdell Education Savings Accounts; and (3) a $20 annual custodial fee on 403(b) accounts.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which in not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
The following transaction costs are not included in the expenses shown in the table and, if applicable, would increase the expenses that you paid over the period: (1) a front-end sales charge (load) of 5.75% on Class A shares; (2) a 2% redemption fee if you sell or exchange shares within six months of purchase, with certain exceptions. The redemption fee does not apply to: (a) redemptions under an automatic withdrawal program or periodic asset reallocation plan, required minimum distributions (RMD), employer mandated distributions from a qualified plan, or redemptions under a qualified domestic relations order (QDRO); (b) redemptions to pay for expenses related to terminal illness, extended hospital or nursing home care, or other serious medical conditions, including death; (c) redemptions of shares acquired through dividend or capital gains reinvestments, and (d) redemptions initiated by the Fund; and (3) a $10 service fee on each exchange after the first five exchanges in each calendar year.
The following ongoing costs are not included in the expenses shown in the table and, if applicable, would increase the expenses that you paid over the period: (1) a $12 low balance fee on accounts with balances of less than $250 as of September 30th of each calendar year and no investment activity (excluding reinvestment of dividends and/or capital gains) during the prior calendar year or the first nine months of the current calendar year. This fee does not apply to IRAs, qualified plan accounts, or Coverdell Education Savings Accounts; (2) a $15 annual custodial fee on IRAs, SEPs, SIMPLE IRAs, and Coverdell Education Savings Accounts; and (3) a $20 annual custodial fee on 403(b) accounts.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account Value 1/1/2007 | Ending Account Value 6/30/2007 | Expense Paid During Period 01/01/07 – 06/30/07 | |||||||||||||
Small Cap Class A | |||||||||||||||
Actual | $ | 1,000 | $ | 1,198.40 | $ | 12.92 | |||||||||
Hypothetical (5% return before expense) | $ | 1,000 | $ | 1,024.79 | $ | 11.90 | |||||||||
Small Cap Class C | |||||||||||||||
Actual | $ | 1,000 | $ | 1,193.30 | $ | 16.97 | |||||||||
Hypothetical (5% return before expense) | $ | 1,000 | $ | 1,024.79 | $ | 15.66 | |||||||||
Small Cap Class I | |||||||||||||||
Actual | $ | 1,000 | $ | 1,198.70 | $ | 11.50 | |||||||||
Hypothetical (5% return before expense) | $ | 1,000 | $ | 1,024.79 | $ | 10.59 |
3 Expenses are equal to the Fund's annualized expense ratio of 2.37% for Class A shares, 3.12% for Class C shares and 2.11% for Class I shares, multiplied by the average account value over the period, multiplied by 181/365 days to reflect the one-half year period.
27
Pacific Advisors Fund Inc.
financial statements
28
Pacific Advisors Government Securities Fund
Statement of Investments (Unaudited)
as of June 30, 2007
Quantity or Principal | Description | Current $ Value** | % of Total Net Assets | ||||||||||||
COMMON STOCK | |||||||||||||||
INFORMATION TECHNOLOGY | 2.73 | ||||||||||||||
SYSTEMS: SOFTWARE | |||||||||||||||
4,000 | MICROSOFT CORP. | 117,880 | |||||||||||||
117,880 | 2.73 | ||||||||||||||
TELECOMMUNICATION SERVICES | 1.77 | ||||||||||||||
INTG TELECOMM SRVCS | |||||||||||||||
5,000 | CITIZENS COMMUNICATIONS CO. | 76,350 | |||||||||||||
76,350 | 1.77 | ||||||||||||||
UTILITIES | 4.33 | ||||||||||||||
ELECTRIC UTILITIES | |||||||||||||||
4,000 | PPL CORP. | 187,160 | |||||||||||||
187,160 | 4.33 | ||||||||||||||
TOTAL COMMON STOCK (Cost: $262,790) | 381,390 | 8.83 | |||||||||||||
US GOVT SECURITIES | |||||||||||||||
US GOVERNMENT AGENCY | 80.52 | ||||||||||||||
US GOVERNMENT AGENCY | |||||||||||||||
50,000 | FEDERAL HOME LN MTG CORP. 5.00% 12/15/17 STEP | 49,261 | |||||||||||||
25,000 | FEDERAL HOME LN MTG CORP. 5.00% 01/17/12 | 24,541 | |||||||||||||
500,000 | FEDERAL HOME LN MTG CORP. 5.00% 12/23/11 | 490,945 | |||||||||||||
50,000 | FEDERAL HOME LN MTG CORP. 5.25% 02/18/14 | 48,815 | |||||||||||||
100,000 | FEDERAL HOME LN MTG CORP. 5.25% 04/25/12 | 98,630 | |||||||||||||
100,000 | FEDERAL HOME LN MTG CORP. 5.33% 09/03/13 | 98,135 | |||||||||||||
65,000 | FEDERAL HOME LN MTG CORP. 5.35% 01/27/15 | 63,443 | |||||||||||||
45,000 | FEDERAL HOME LN MTG CORP. 5.35% 02/05/15 | 43,900 | |||||||||||||
100,000 | FEDERAL HOME LN MTG CORP. 5.45% 08/09/13 | 98,544 | |||||||||||||
50,000 | FEDERAL HOME LN MTG CORP. 5.50% 12/30/14 | 49,042 | |||||||||||||
150,000 | FEDERAL HOME LN MTG CORP. 6.125% 12/01/15 | 149,224 | |||||||||||||
70,000 | FEDERAL HOME LOAN BANK 4.30% 05/05/09 | 68,889 | |||||||||||||
37,500 | FEDERAL HOME LOAN BANK 4.55% 05/26/09 | 37,044 | |||||||||||||
100,000 | FEDERAL HOME LOAN BANK 5.23% 09/01/11 | 98,928 | |||||||||||||
44,912 | FEDERAL HOME LOAN BANK 5.24% 12/17/12 | 44,163 | |||||||||||||
550,909 | FEDERAL HOME LOAN BANK 5.35% 12/24/12 | 543,354 | |||||||||||||
115,000 | FEDERAL HOME LOAN BANK 5.35% 05/09/12 | 113,603 | |||||||||||||
100,000 | FEDERAL HOME LOAN BANK 5.50% 12/08/09 | 99,853 | |||||||||||||
100,000 | FEDERAL HOME LOAN BANK 6.25% 10/27/15 | 99,888 | |||||||||||||
200,000 | FEDERAL NATL MTG ASSOC. 5.25% 12/26/12 | 196,721 | |||||||||||||
535,000 | FEDERAL NATL MTG ASSOC. 5.25% 01/28/13 | 526,000 | |||||||||||||
50,000 | FEDERAL NATL MTG ASSOC. 5.25% 01/28/13 | 49,141 | |||||||||||||
48,000 | FEDERAL NATL MTG ASSOC. 5.375% 08/23/12 | 47,424 | |||||||||||||
30,000 | FEDERAL NATL MTG ASSOC. 5.625% 02/28/12 | 29,925 |
See Accompanying Notes to Financial Statements
29
Pacific Advisors Government Securities Fund
Statement of Investments (Unaudited)
as of June 30, 2007
Quantity or Principal | Description | Current $ Value** | % of Total Net Assets | ||||||||||||
US GOVT SECURITIES continued | |||||||||||||||
112,000 | FEDERAL NATL MTG ASSOC. 5.75% 11/07/17 | 109,788 | |||||||||||||
100,000 | FEDERAL NATL MTG ASSOC. 6.125% 03/21/16 | 99,400 | |||||||||||||
100,000 | FEDERAL NATL MTG ASSOC. 6.125% 08/28/14 | 99,635 | |||||||||||||
3,478,236 | 80.52 | ||||||||||||||
TOTAL US GOVT SECURITIES (Cost: $3,526,404) | 3,478,236 | 80.52 | |||||||||||||
PREFERRED STOCK | |||||||||||||||
FINANCIAL | 4.74 | ||||||||||||||
DIVERSIFIED BANKS | |||||||||||||||
4,000 | BARCLAYS BANK 6.625% PFD | 102,200 | |||||||||||||
102,200 | 2.37 | ||||||||||||||
LIFE/HEALTH INSUR | |||||||||||||||
4,000 | METLIFE INC. 6.50% PFD | 102,360 | |||||||||||||
102,360 | 2.37 | ||||||||||||||
TELECOMMUNICATION SERVICES | 2.28 | ||||||||||||||
INTG TELECOMM SRVCS | |||||||||||||||
4,000 | AT&T INC. 6.375% PFD | 98,520 | |||||||||||||
98,520 | 2.28 | ||||||||||||||
TOTAL PREFERRED STOCK (Cost: $300,000) | 303,080 | 7.02 | |||||||||||||
SHORT TERM INVESTMENTS | |||||||||||||||
MONEY MARKET | 2.96 | ||||||||||||||
127,785 | UMB MONEY MARKET FIDUCIARY | 127,785 | |||||||||||||
127,785 | 2.96 | ||||||||||||||
TOTAL SHORT TERM INVESTMENTS (Cost: $127,785) | 127,785 | 2.96 | |||||||||||||
TOTAL INVESTMENTS (Cost: $4,216,979) | 4,290,491 | 99.33 | |||||||||||||
OTHER ASSETS LESS LIABILITIES | 28,909 | 0.67 | |||||||||||||
TOTAL NET ASSETS | 4,319,400 | 100.00 |
* Non-income producing
** The principal amount is stated in U.S. dollars unless otherwise indicated.
See Accompanying Notes to Financial Statements
30
Pacific Advisors Income and Equity Fund
Statement of Investments (Unaudited)
as of June 30, 2007
Quantity or Principal | Description | Current $ Value** | % of Total Net Assets | ||||||||||||
COMMON STOCK | |||||||||||||||
CONSUMER DISCRETIONARY | 0.90 | ||||||||||||||
DISTRIBUTORS | |||||||||||||||
1,000 | GENUINE PARTS CO. | 49,600 | |||||||||||||
49,600 | 0.50 | ||||||||||||||
HOME IMPROVEMENT | |||||||||||||||
1,000 | HOME DEPOT, INC. | 39,350 | |||||||||||||
39,350 | 0.40 | ||||||||||||||
CONSUMER STAPLES | 1.95 | ||||||||||||||
HOUSEHOLD PRODUCTS | |||||||||||||||
2,000 | PROCTER & GAMBLE CO. | 122,380 | |||||||||||||
122,380 | 1.24 | ||||||||||||||
PACKAGED FOODS/MEATS | |||||||||||||||
1,000 | ALTRIA GROUP INC. | 70,140 | |||||||||||||
70,140 | 0.71 | ||||||||||||||
ENERGY | 5.93 | ||||||||||||||
INTEGRATED OIL & GAS | |||||||||||||||
1,000 | BRITISH PETROLEUM PLC ADR | 72,140 | |||||||||||||
1,000 | CONOCOPHILLIPS | 78,500 | |||||||||||||
3,000 | MARATHON OIL CORP. | 179,880 | |||||||||||||
1,000 | OCCIDENTAL PETROLEUM | 57,880 | |||||||||||||
388,400 | 3.93 | ||||||||||||||
OIL & GAS DRILLING | |||||||||||||||
1,000 | ULTRA PETROLEUM* | 55,240 | |||||||||||||
55,240 | 0.56 | ||||||||||||||
OIL & GAS EXPLR/PROD | |||||||||||||||
1,000 | APACHE CORP. | 81,590 | |||||||||||||
1,000 | XTO ENERGY INC. | 60,100 | |||||||||||||
141,690 | 1.44 | ||||||||||||||
FINANCIAL | 7.57 | ||||||||||||||
DIVERSIFIED BANKS | |||||||||||||||
4,000 | BANK OF AMERICA CORP. | 195,560 | |||||||||||||
2,000 | WACHOVIA CORP. | 102,500 | |||||||||||||
298,060 | 3.02 | ||||||||||||||
MULTI LINE INSURANCE | |||||||||||||||
2,000 | AMERICAN INT'L GROUP INC. | 140,060 | |||||||||||||
140,060 | 1.42 |
See Accompanying Notes to Financial Statements
31
Pacific Advisors Income and Equity Fund
Statement of Investments (Unaudited)
as of June 30, 2007
Quantity or Principal | Description | Current $ Value** | % of Total Net Assets | ||||||||||||
COMMON STOCK continued | |||||||||||||||
PROPERTY & CAS INSUR | |||||||||||||||
1,000 | CHUBB CORP. | 54,140 | |||||||||||||
54,140 | 0.55 | ||||||||||||||
REGIONAL BANKS | |||||||||||||||
1,000 | WILMINGTON TRUST CO. | 41,510 | |||||||||||||
41,510 | 0.42 | ||||||||||||||
THRIFTS & MTG FINANCE | |||||||||||||||
5,000 | WASHINGTON MUTUAL INC. | 213,200 | |||||||||||||
213,200 | 2.16 | ||||||||||||||
HEALTH CARE | 4.23 | ||||||||||||||
PHARMACEUTICALS | |||||||||||||||
2,000 | GLAXOSMITHKLINE PLC | 104,731 | |||||||||||||
3,000 | JOHNSON & JOHNSON | 184,860 | |||||||||||||
5,000 | PFIZER INC. | 127,850 | |||||||||||||
417,441 | 4.23 | ||||||||||||||
INDUSTRIALS | 3.85 | ||||||||||||||
AEROSPACE & DEFENSE | |||||||||||||||
2,000 | HONEYWELL INTERNATIONAL INC. | 112,560 | |||||||||||||
112,560 | 1.14 | ||||||||||||||
INDUSTRIAL CONGLOMER | |||||||||||||||
7,000 | GENERAL ELECTRIC CO. | 267,960 | |||||||||||||
267,960 | 2.71 | ||||||||||||||
INFORMATION TECHNOLOGY | 1.49 | ||||||||||||||
SYSTEMS: SOFTWARE | |||||||||||||||
5,000 | MICROSOFT CORP. | 147,350 | |||||||||||||
147,350 | 1.49 | ||||||||||||||
MATERIALS | 0.51 | ||||||||||||||
DIVERSIFIED CHEMICAL | |||||||||||||||
1,000 | DU PONT E I DE NEMOURS & CO. | 50,840 | |||||||||||||
50,840 | 0.51 | ||||||||||||||
TELECOMMUNICATION SERVICES | 1.97 | ||||||||||||||
INTG TELECOMM SRVCS | |||||||||||||||
1,000 | AT&T, INC | 41,500 | |||||||||||||
10,000 | CITIZENS COMMUNICATIONS CO. | 152,700 | |||||||||||||
194,200 | 1.97 |
See Accompanying Notes to Financial Statements
32
Pacific Advisors Income and Equity Fund
Statement of Investments (Unaudited)
as of June 30, 2007
Quantity or Principal | Description | Current $ Value** | % of Total Net Assets | ||||||||||||
COMMON STOCK continued | |||||||||||||||
UTILITIES | 1.95 | ||||||||||||||
MULTI UTILITIES/POWR | |||||||||||||||
1,000 | DOMINION RESOURCES | 86,310 | |||||||||||||
1,000 | DUKE ENERGY CORP. | 18,300 | |||||||||||||
1,000 | PUBLIC SERVICE ENTERPRISE GROUP INC. | 87,780 | |||||||||||||
192,390 | 1.95 | ||||||||||||||
TOTAL COMMON STOCK (Cost: $2,491,011) | 2,996,511 | 30.35 | |||||||||||||
CORPORATE BOND | |||||||||||||||
CONSUMER DISCRETIONARY | 7.57 | ||||||||||||||
BROADCAST & CABLE TV | |||||||||||||||
419,000 | LIBERTY MEDIA CORP. 7.75% 07/15/09 | 433,560 | |||||||||||||
433,560 | 4.39 | ||||||||||||||
GENL MERCHANDISE STR | |||||||||||||||
281,000 | DAYTON HUDSON CO. 8.60% 01/15/12 | 314,001 | |||||||||||||
314,001 | 3.18 | ||||||||||||||
CONSUMER STAPLES | 2.35 | ||||||||||||||
BREWERS | |||||||||||||||
225,000 | ANHEUSER-BUSCH 7.125% 07/01/17 | 231,809 | |||||||||||||
231,809 | 2.35 | ||||||||||||||
ENERGY | 4.80 | ||||||||||||||
INTEGRATED OIL & GAS | |||||||||||||||
143,000 | ATLANTIC RICHFIELD 8.50% 04/01/12 | 160,918 | |||||||||||||
125,000 | ENRON OIL & GAS 6.50% 12/01/07 | 125,592 | |||||||||||||
170,000 | TEXACO CAPITAL 8.625% 06/30/10 | 187,631 | |||||||||||||
474,141 | 4.80 | ||||||||||||||
FINANCIAL | 12.51 | ||||||||||||||
CONSUMER FINANCE | |||||||||||||||
200,000 | GMAC 6.125% 08/28/07 | 200,136 | |||||||||||||
100,000 | HOUSEHOLD FINANCE 3.82% 09/10/09 FLOAT | 94,074 | |||||||||||||
107,000 | SLM CORP. 4.38% 03/15/09 FLOAT | 100,755 | |||||||||||||
99,000 | SLM CORP. 4.53% 03/15/09 FLOAT | 93,455 | |||||||||||||
488,420 | 4.94 | ||||||||||||||
DIVERSIFIED BANKS | |||||||||||||||
100,000 | DEUTSCHE BANK 5.75% 02/15/12 | 99,494 | |||||||||||||
99,494 | 1.01 |
See Accompanying Notes to Financial Statements
33
Pacific Advisors Income and Equity Fund
Statement of Investments (Unaudited)
as of June 30, 2007
Quantity or Principal | Description | Current $ Value** | % of Total Net Assets | ||||||||||||
CORPORATE BOND continued | |||||||||||||||
INVESTMENT BANK/BRKG | |||||||||||||||
75,000 | LEHMAN BROTHER 3.69% 09/28/07 FLOAT | 74,680 | |||||||||||||
112,000 | MERRILL LYNCH 3.85% 04/15/08 FLOAT | 109,830 | |||||||||||||
184,510 | 1.87 | ||||||||||||||
SPECIALIZED FINANCE | |||||||||||||||
371,000 | GENERAL ELECTRIC CAP 8.125% 05/15/12 | 410,000 | |||||||||||||
50,000 | GENERAL ELECTRIC CAP 8.875% 05/15/09 | 52,913 | |||||||||||||
462,913 | 4.69 | ||||||||||||||
MATERIALS | 1.01 | ||||||||||||||
DIVERSIFIED CHEMICAL | |||||||||||||||
100,000 | DOW CHEMICAL 5.00% 11/15/07 | 99,754 | |||||||||||||
99,754 | 1.01 | ||||||||||||||
TELECOMMUNICATION SERVICES | 5.81 | ||||||||||||||
INTG TELECOMM SRVCS | |||||||||||||||
100,000 | ALLTEL CORP. 7.00% 03/15/16 | 87,632 | |||||||||||||
381,073 | BELLSOUTH TELECOMMUN 6.30% 12/15/15 | 385,750 | |||||||||||||
100,000 | GTE CALIFORNIA INC. 5.50% 01/15/09 | 99,998 | |||||||||||||
573,380 | 5.81 | ||||||||||||||
UTILITIES | 7.88 | ||||||||||||||
ELECTRIC UTILITIES | |||||||||||||||
255,000 | COMMONWEALTH EDISON 8.00% 05/15/08 | 259,210 | |||||||||||||
232,000 | SOUTH CAROLINA ELEC 6.70% 02/01/11 | 240,146 | |||||||||||||
499,356 | 5.06 | ||||||||||||||
GAS UTILITIES | |||||||||||||||
150,000 | PIEDMONT NATURAL GAS 7.80% 09/29/10 | 159,059 | |||||||||||||
159,059 | 1.61 | ||||||||||||||
MULTI UTILITIES/POWR | |||||||||||||||
119,000 | POTOMAC ELEC. POWER 5.875% 10/15/08 | 119,474 | |||||||||||||
119,474 | 1.21 | ||||||||||||||
TOTAL CORPORATE BOND (Cost: $4,192,032) | 4,139,871 | 41.93 | |||||||||||||
US GOVT SECURITIES | |||||||||||||||
US GOVERNMENT AGENCY | 19.53 | ||||||||||||||
US GOVERNMENT AGENCY | |||||||||||||||
33,000 | FEDERAL HOME LN MTG CORP. 5.125% 03/10/14 | 32,088 | |||||||||||||
100,000 | FEDERAL HOME LN MTG CORP. 5.80% 10/20/2015 | 98,663 | |||||||||||||
100,000 | FEDERAL HOME LN MTG CORP. 6.00% 04/11/22 | 97,430 | |||||||||||||
50,000 | FEDERAL HOME LN MTG CORP. 6.125% 12/01/15 | 49,741 |
See Accompanying Notes to Financial Statements
34
Pacific Advisors Income and Equity Fund
Statement of Investments (Unaudited)
as of June 30, 2007
Quantity or Principal | Description | Current $ Value** | % of Total Net Assets | ||||||||||||
US GOVT SECURITIES continued | |||||||||||||||
160,000 | FEDERAL HOME LOAN BANK 5.00% 10/28/11 STEP | 159,841 | |||||||||||||
100,000 | FEDERAL HOME LOAN BANK 5.25% 06/15/09 | 99,730 | |||||||||||||
100,000 | FEDERAL HOME LOAN BANK 5.25% 10/27/10 | 99,245 | |||||||||||||
50,000 | FEDERAL HOME LOAN BANK 5.375% 09/07/12 | 49,429 | |||||||||||||
100,000 | FEDERAL HOME LOAN BANK 5.50% 09/07/10 | 99,968 | |||||||||||||
100,000 | FEDERAL HOME LOAN BANK 5.50% 12/07/09 | 99,896 | |||||||||||||
100,000 | FEDERAL HOME LOAN BANK 6.00% 06/15/17 | 99,394 | |||||||||||||
50,000 | FEDERAL HOME LOAN BANK 6.00% 04/21/20 | 49,135 | |||||||||||||
100,000 | FEDERAL HOME LOAN BANK 6.25% 10/27/15 | 99,888 | |||||||||||||
100,000 | FEDERAL NATL MTG ASSOC. 5.50% 11/17/14 | 98,220 | |||||||||||||
50,000 | FEDERAL NATL MTG ASSOC. 5.50% 08/03/16 STEP | 49,595 | |||||||||||||
100,000 | FEDERAL NATL MTG ASSOC. 6.00% 09/25/14 | 99,415 | |||||||||||||
250,000 | FEDERAL NATL MTG ASSOC. 6.125% 08/28/14 | 249,088 | |||||||||||||
100,000 | FEDERAL NATL MTG ASSOC. 6.25% 01/25/21 | 98,899 | |||||||||||||
100,000 | FEDERAL NATL MTG ASSOC. 6.25% 03/22/17 | 99,727 | |||||||||||||
100,000 | FEDERAL NATL MTG ASSOC. 6.55% 08/23/21 | 99,582 | |||||||||||||
1,928,974 | 19.53 | ||||||||||||||
TOTAL US GOVT SECURITIES (Cost: $1,941,721) | 1,928,974 | 19.53 | |||||||||||||
PREFERRED STOCK | |||||||||||||||
FINANCIAL | 5.11 | ||||||||||||||
DIVERSIFIED BANKS | |||||||||||||||
2,000 | BAC TRUST VIII 6.00% PFD | 46,140 | |||||||||||||
2,000 | BARCLAYS BK 6.625% PFD | 51,100 | |||||||||||||
5,000 | HSBC HOLDINGS PLC 6.20% PFD A | 119,250 | |||||||||||||
216,490 | 2.19 | ||||||||||||||
INVESTMENT BANK/BRKG | |||||||||||||||
2,000 | MERRILL LYNCH 6.375% PFD | 50,900 | |||||||||||||
2,000 | MERRILL LYNCH 6.45% PFD | 48,900 | |||||||||||||
99,800 | 1.01 | ||||||||||||||
LIFE/HEALTH INSUR | |||||||||||||||
3,000 | METLIFE INC. 6.50% PFD | 76,770 | |||||||||||||
2,500 | PHOENIX COMPANIES INC. 7.45% PFD | 62,425 | |||||||||||||
139,195 | 1.41 | ||||||||||||||
THRIFTS & MTG FINANCE | |||||||||||||||
2,000 | COUNTRYWIDE CAPITAL 7.00% PFD | 49,240 | |||||||||||||
49,240 | 0.50 | ||||||||||||||
TELECOMMUNICATION SERVICES | 0.50 | ||||||||||||||
INTG TELECOMM SRVCS | |||||||||||||||
2,000 | AT&T INC. 6.375% PFD | 49,260 | |||||||||||||
49,260 | 0.50 |
See Accompanying Notes to Financial Statements
35
Pacific Advisors Income and Equity Fund
Statement of Investments (Unaudited)
as of June 30, 2007
Quantity or Principal | Description | Current $ Value** | % of Total Net Assets | ||||||||||||
PREFERRED STOCK continued | |||||||||||||||
UTILITIES | 0.50 | ||||||||||||||
ELECTRIC UTILITIES | |||||||||||||||
2,000 | FPL GROUP CAPITAL 6.60% PFD A | 49,760 | |||||||||||||
49,760 | 0.50 | ||||||||||||||
TOTAL PREFERRED STOCK (Cost: $612,560) | 603,745 | 6.11 | |||||||||||||
SHORT TERM INVESTMENTS | |||||||||||||||
MONEY MARKET | 1.16 | ||||||||||||||
114,850 | UMB MONEY MARKET FIDUCIARY | 114,850 | |||||||||||||
114,850 | 1.16 | ||||||||||||||
TOTAL SHORT TERM INVESTMENTS (Cost: $114,850) | 114,850 | 1.16 | |||||||||||||
TOTAL INVESTMENTS (Cost: $9,352,174) | 9,783,951 | 99.08 | |||||||||||||
OTHER ASSETS LESS LIABILITIES | 91,312 | 0.92 | |||||||||||||
TOTAL NET ASSETS | 9,875,263 | 100.00 |
* Non-income producing
** The principal amount is stated in U.S. dollars unless otherwise indicated.
See Accompanying Notes to Financial Statements
36
Pacific Advisors Balanced Fund
Statement of Investments (Unaudited)
as of June 30, 2007
Quantity or Principal | Description | Current $ Value** | % of Total Net Assets | ||||||||||||
COMMON STOCK | |||||||||||||||
CONSUMER DISCRETIONARY | 4.05 | ||||||||||||||
BROADCAST & CABLE TV | |||||||||||||||
7,200 | LIBERTY GLOBAL INC A* | 295,488 | |||||||||||||
11,250 | LIBERTY MEDIA INTERACTIVE CORP. A* | 251,213 | |||||||||||||
546,701 | 1.26 | ||||||||||||||
MOVIES/ENTERTAINMENT | |||||||||||||||
10,000 | CBS CORP. B | 333,200 | |||||||||||||
18,000 | TIME WARNER INC. | 378,720 | |||||||||||||
3,750 | VIACOM INC. B* | 156,112 | |||||||||||||
10,000 | WALT DISNEY CO. | 341,400 | |||||||||||||
1,209,432 | 2.79 | ||||||||||||||
CONSUMER STAPLES | 4.11 | ||||||||||||||
HOUSEHOLD PRODUCTS | |||||||||||||||
10,000 | PROCTER & GAMBLE CO. | 611,900 | |||||||||||||
611,900 | 1.41 | ||||||||||||||
SOFT DRINKS | |||||||||||||||
10,000 | CADBURY SCHWEPPES PLC ADR | 543,000 | |||||||||||||
12,000 | COCA-COLA CO. | 627,720 | |||||||||||||
1,170,720 | 2.70 | ||||||||||||||
ENERGY | 12.79 | ||||||||||||||
INTEGRATED OIL & GAS | |||||||||||||||
6,000 | BRITISH PETROLEUM PLC ADR | 432,840 | |||||||||||||
8,000 | CONOCOPHILLIPS | 628,000 | |||||||||||||
1,060,840 | 2.45 | ||||||||||||||
OIL & GAS EQUIP/SERV | |||||||||||||||
12,000 | CAMERON INTERNATIONAL* | 857,640 | |||||||||||||
8,000 | GRANT PRIDECO INC.* | 430,640 | |||||||||||||
5,000 | HALLIBURTON | 172,500 | |||||||||||||
1,460,780 | 3.37 | ||||||||||||||
OIL & GAS EXPLR/PROD | |||||||||||||||
15,000 | DEVON ENERGY CORP. | 1,174,350 | |||||||||||||
7,500 | SUNCOR ENERGY INC. | 674,400 | |||||||||||||
1,848,750 | 4.26 | ||||||||||||||
OIL & GAS REF/MKT/TRAN | |||||||||||||||
8,750 | SPECTRA ENERGY CORP. | 227,150 | |||||||||||||
30,000 | WILLIAMS COMPANIES INC. | 948,600 | |||||||||||||
1,175,750 | 2.71 |
See Accompanying Notes to Financial Statements
37
Pacific Advisors Balanced Fund
Statement of Investments (Unaudited)
as of June 30, 2007
Quantity or Principal | Description | Current $ Value** | % of Total Net Assets | ||||||||||||
COMMON STOCK continued | |||||||||||||||
FINANCIAL | 13.37 | ||||||||||||||
CONSUMER FINANCE | |||||||||||||||
10,000 | AMERICAN EXPRESS CO. | 611,800 | |||||||||||||
611,800 | 1.41 | ||||||||||||||
DIVERSIFIED BANKS | |||||||||||||||
35,000 | BANCO LATINAMERICANO DE EXPORTACIONES | 658,000 | |||||||||||||
658,000 | 1.52 | ||||||||||||||
DIVERSIFIED FINANCL | |||||||||||||||
10,000 | CITIGROUP INC. | 512,900 | |||||||||||||
512,900 | 1.18 | ||||||||||||||
LIFE/HEALTH INSUR | |||||||||||||||
7,500 | METLIFE, INC. | 483,600 | |||||||||||||
483,600 | 1.11 | ||||||||||||||
MULTI LINE INSURANCE | |||||||||||||||
5 | BERKSHIRE HATHAWAY INC. - CL A* | 547,375 | |||||||||||||
1,000 | WHITE MOUNTAIN INSURANCE | 606,020 | |||||||||||||
1,153,395 | 2.66 | ||||||||||||||
PROPERTY & CAS INSUR | |||||||||||||||
10,000 | CHUBB CORP. | 541,400 | |||||||||||||
541,400 | 1.25 | ||||||||||||||
SPECIALIZED FINANCE | |||||||||||||||
10,000 | MOODYS CORP. | 622,000 | |||||||||||||
622,000 | 1.43 | ||||||||||||||
THRIFTS & MTG FINANCE | |||||||||||||||
6,000 | FEDERAL HOME LN MTG CORP. | 364,200 | |||||||||||||
20,000 | WASHINGTON MUTUAL INC. | 852,800 | |||||||||||||
1,217,000 | 2.81 | ||||||||||||||
HEALTH CARE | 6.23 | ||||||||||||||
HEALTH CARE EQUIP | |||||||||||||||
12,000 | PERKINELMER | 312,720 | |||||||||||||
312,720 | 0.72 | ||||||||||||||
PHARMACEUTICALS | |||||||||||||||
15,000 | BRISTOL-MYERS SQUIBB CO. | 473,400 | |||||||||||||
7,500 | JOHNSON & JOHNSON | 462,150 | |||||||||||||
15,000 | MYLAN LABORATORIES INC. | 272,850 | |||||||||||||
3,000 | PAR PHARMACEUTICAL INC.* | 84,690 | |||||||||||||
25,000 | PFIZER INC. | 639,250 | |||||||||||||
8,000 | WYETH | 458,720 | |||||||||||||
2,391,060 | 5.51 |
See Accompanying Notes to Financial Statements
38
Pacific Advisors Balanced Fund
Statement of Investments (Unaudited)
as of June 30, 2007
Quantity or Principal | Description | Current $ Value** | % of Total Net Assets | ||||||||||||
COMMON STOCK continued | |||||||||||||||
INDUSTRIALS | 9.88 | ||||||||||||||
AEROSPACE & DEFENSE | |||||||||||||||
7,500 | BOEING CO. | 721,200 | |||||||||||||
15,000 | CUBIC CORP. | 452,700 | |||||||||||||
1,173,900 | 2.71 | ||||||||||||||
AIR FREIGHT/SHIPPING | |||||||||||||||
5,000 | UNITED PARCEL SERVICE INC. | 365,000 | |||||||||||||
365,000 | 0.84 | ||||||||||||||
COMMERCIAL PRINTING | |||||||||||||||
5,000 | R H DONNELLEY CORP* | 378,900 | |||||||||||||
378,900 | 0.87 | ||||||||||||||
CONSTRUCTION & MACH | |||||||||||||||
10,000 | INGERSOLL-RAND COMPANY LTD A | 548,200 | |||||||||||||
548,200 | 1.27 | ||||||||||||||
DIVERSIFIED COML SRV | |||||||||||||||
15,000 | GATX CORP. | 738,750 | |||||||||||||
738,750 | 1.70 | ||||||||||||||
INDUSTRIAL CONGLOMER | |||||||||||||||
15,000 | GENERAL ELECTRIC CO. | 574,200 | |||||||||||||
15,000 | TYCO INTERNATIONAL LTD. | 506,850 | |||||||||||||
1,081,050 | 2.49 | ||||||||||||||
INFORMATION TECHNOLOGY | 5.32 | ||||||||||||||
COMMUNICATIONS EQUIP | |||||||||||||||
30,000 | NOKIA CORP - ADR A | 843,300 | |||||||||||||
843,300 | 1.94 | ||||||||||||||
COMPUTER STORAGE/PER | |||||||||||||||
10,000 | SANDISK CORP.* | 489,400 | |||||||||||||
489,400 | 1.13 | ||||||||||||||
DATA PROCESSING SRV | |||||||||||||||
8,000 | AUTOMATIC DATA PROCESSING INC. | 387,760 | |||||||||||||
387,760 | 0.89 | ||||||||||||||
SYSTEMS: SOFTWARE | |||||||||||||||
20,000 | MICROSOFT CORP. | 589,400 | |||||||||||||
589,400 | 1.36 |
See Accompanying Notes to Financial Statements
39
Pacific Advisors Balanced Fund
Statement of Investments (Unaudited)
as of June 30, 2007
Quantity or Principal | Description | Current $ Value** | % of Total Net Assets | ||||||||||||
COMMON STOCK continued | |||||||||||||||
MATERIALS | 4.90 | ||||||||||||||
DIVERSIFD METAL/MNG | |||||||||||||||
4,000 | RIO TINTO PLC | 1,224,480 | |||||||||||||
1,224,480 | 2.82 | ||||||||||||||
STEEL | |||||||||||||||
16,000 | RELIANCE STEEL & ALUMINUM CO. | 900,160 | |||||||||||||
900,160 | 2.08 | ||||||||||||||
UTILITIES | 1.50 | ||||||||||||||
ELECTRIC UTILITIES | |||||||||||||||
7,000 | ALLETE INC. | 329,350 | |||||||||||||
329,350 | 0.76 | ||||||||||||||
MULTI UTILITIES/POWR | |||||||||||||||
17,500 | DUKE ENERGY CORP. | 320,250 | |||||||||||||
320,250 | 0.74 | ||||||||||||||
TOTAL COMMON STOCK (Cost: $15,514,338) | 26,958,648 | 62.15 | |||||||||||||
CORPORATE BOND | |||||||||||||||
CONSUMER DISCRETIONARY | 1.05 | ||||||||||||||
AUTO PARTS & EQUIP | |||||||||||||||
100,000 | BORG WARNER 8.00% 10/01/19 | 112,242 | |||||||||||||
112,242 | 0.26 | ||||||||||||||
GENL MERCHANDISE STR | |||||||||||||||
178,000 | DAYTON HUDSON CO. 8.60% 01/15/12 | 198,905 | |||||||||||||
198,905 | 0.46 | ||||||||||||||
HOME FURNISHINGS | |||||||||||||||
143,000 | WHIRLPOOL CORP 9.10% 02/01/08 | 145,598 | |||||||||||||
145,598 | 0.33 | ||||||||||||||
CONSUMER STAPLES | 1.52 | ||||||||||||||
DISTILLERS & VINTNER | |||||||||||||||
310,000 | SEAGRAMS & SONS 7.00% 04/15/08 | 313,811 | |||||||||||||
313,811 | 0.72 | ||||||||||||||
FOOD: RETAIL | |||||||||||||||
345,000 | SAFEWAY INC. 7.00% 09/15/07 | 345,828 | |||||||||||||
345,828 | 0.80 | ||||||||||||||
ENERGY | 6.46 | ||||||||||||||
INTEGRATED OIL & GAS | |||||||||||||||
501,000 | ATLANTIC RICHFIELD 9.125% 03/01/11 | 562,918 | |||||||||||||
600,000 | ENRON OIL & GAS 6.50% 12/01/07 | 602,842 | |||||||||||||
245,000 | PHILLIPS PETE 7.125% 03/15/28 | 248,419 | |||||||||||||
1,414,179 | 3.26 |
See Accompanying Notes to Financial Statements
40
Pacific Advisors Balanced Fund
Statement of Investments (Unaudited)
as of June 30, 2007
Quantity or Principal | Description | Current $ Value** | % of Total Net Assets | ||||||||||||
CORPORATE BOND continued | |||||||||||||||
OIL & GAS EXPLR/PROD | |||||||||||||||
255,000 | BURLINGTON RESOURCES 6.40% 08/15/11 | 263,229 | |||||||||||||
100,000 | COOPER INDUSTRIES 5.25% 07/01/07 | 100,000 | |||||||||||||
190,000 | DEVON ENERGY 10.125% 11/15/09 | 207,918 | |||||||||||||
571,147 | 1.32 | ||||||||||||||
OIL&GAS REF/MKT/TRAN | |||||||||||||||
253,000 | KINDER MORGAN 6.50% 09/01/13 | 251,907 | |||||||||||||
296,000 | PREMCOR REFINING 7.50% 06/15/15 | 305,183 | |||||||||||||
250,000 | SPECTRA ENERGY 7.50% 10/01/09 | 259,902 | |||||||||||||
816,992 | 1.88 | ||||||||||||||
FINANCIAL | 8.51 | ||||||||||||||
CONSUMER FINANCE | |||||||||||||||
60,000 | GMAC 5.20% 04/15/08 | 59,034 | |||||||||||||
209,000 | GMAC 8.875% 06/01/10 | 216,986 | |||||||||||||
185,000 | GMAC 4.375% 12/10/07 | 183,666 | |||||||||||||
258,000 | HOUSEHOLD FINANCE CO. 3.54% 03/10/09 FLOAT | 244,610 | |||||||||||||
115,000 | HOUSEHOLD FINANCE CO. 3.82% 01/10/09 FLOAT | 110,379 | |||||||||||||
100,000 | HOUSEHOLD FINANCE CO. 3.82% 04/10/09 FLOAT | 95,508 | |||||||||||||
250,000 | HOUSEHOLD FINANCE 6.375% 11/27/12 | 256,668 | |||||||||||||
100,000 | SLM CORP. 4.88% 06/15/09 FLOAT | 94,258 | |||||||||||||
100,000 | SLM CORP. 4.93% 09/15/09 FLOAT | 93,670 | |||||||||||||
1,354,779 | 3.12 | ||||||||||||||
DIVERSIFIED BANKS | |||||||||||||||
490,000 | BANK OF AMERICA 6.50% 03/15/08 | 493,373 | |||||||||||||
493,373 | 1.14 | ||||||||||||||
INVESTMENT BANK/BRKG | |||||||||||||||
100,000 | MERRILL LYNCH 3.85% 04/15/08 FLOAT | 98,063 | |||||||||||||
200,000 | MERRILL LYNCH 3.939% 03/02/09 FLOAT | 191,552 | |||||||||||||
289,615 | 0.67 | ||||||||||||||
LIFE/HEALTH INSUR | |||||||||||||||
125,000 | JOHN HANCOCK LIFE 4.42% 04/15/09 FLOAT | 120,694 | |||||||||||||
325,000 | TRANSAMERICA CORP. 9.375% 03/01/08 | 331,016 | |||||||||||||
451,710 | 1.04 | ||||||||||||||
SPECIALIZED FINANCE | |||||||||||||||
311,000 | GENERAL ELECTRIC CAP 8.125% 05/15/12 | 343,692 | |||||||||||||
250,000 | INT'L LEASE FINANCE 5.679% 07/11/11 FLOAT | 251,333 | |||||||||||||
505,000 | NATIONAL RURAL UTIL 5.70% 01/15/10 | 508,253 | |||||||||||||
1,103,278 | 2.54 |
See Accompanying Notes to Financial Statements
41
Pacific Advisors Balanced Fund
Statement of Investments (Unaudited)
as of June 30, 2007
Quantity or Principal | Description | Current $ Value** | % of Total Net Assets | ||||||||||||
CORPORATE BOND continued | |||||||||||||||
INDUSTRIALS | 0.73 | ||||||||||||||
AEROSPACE & DEFENSE | |||||||||||||||
300,000 | LOCKHEED MARTIN 8.2% 12/01/09 | 317,075 | |||||||||||||
317,075 | 0.73 | ||||||||||||||
INFORMATION TECHNOLOGY | 0.25 | ||||||||||||||
COMPUTER HARDWARE | |||||||||||||||
100,000 | DIGITAL EQUIPMENT 7.75% 04/01/23 | 106,372 | |||||||||||||
106,372 | 0.25 | ||||||||||||||
MATERIALS | 0.58 | ||||||||||||||
ALUMINUM | |||||||||||||||
250,000 | ALCOA 6.00% 01/15/12 | 250,582 | |||||||||||||
250,582 | 0.58 | ||||||||||||||
TELECOMMUNICATION SERVICES | 5.13 | ||||||||||||||
INTG TELECOMM SRVCS | |||||||||||||||
750,000 | ALLTEL CORP. 7.00% 03/15/16 | 657,236 | |||||||||||||
1,313,000 | GTE SOUTH INC. 6.00% 02/15/08 | 1,316,410 | |||||||||||||
250,000 | NEXTEL COMMUNICATION 7.375% 08/01/15 | 249,893 | |||||||||||||
2,223,539 | 5.13 | ||||||||||||||
UTILITIES | 3.41 | ||||||||||||||
ELECTRIC UTILITIES | |||||||||||||||
240,000 | CAROLINA POWER&LIGHT 6.80% 08/15/07 | 240,282 | |||||||||||||
240,282 | 0.55 | ||||||||||||||
MULTI UTILITIES/POWR | |||||||||||||||
125,000 | BALTIMORE G&E 6.625% 03/15/08 | 125,822 | |||||||||||||
200,000 | FLORIDA POWER & LIGHT 6.00% 06/01/08 | 200,964 | |||||||||||||
250,000 | NORTHWESTERN CORP 7.00% 08/15/23 | 251,250 | |||||||||||||
220,000 | PACIFICORP 6.375% 05/15/08 | 221,373 | |||||||||||||
240,000 | POTOMAC ELEC. POWER 5.875% 10/15/08 | 240,955 | |||||||||||||
150,000 | POTOMAC ELEC. POWER 6.25% 10/15/07 | 150,239 | |||||||||||||
46,359 | RELIANT ENERGY MID ATL 9.237% 07/02/17 | 50,995 | |||||||||||||
1,241,598 | 2.86 | ||||||||||||||
TOTAL CORPORATE BOND (Cost: $12,157,170) | 11,990,905 | 27.64 | |||||||||||||
US GOVT SECURITIES | |||||||||||||||
US GOVERNMENT AGENCY | 8.62 | ||||||||||||||
US GOVERNMENT AGENCY | |||||||||||||||
100,000 | FEDERAL HOME LN MTG CORP. 6.00% 04/10/14 | 99,535 | |||||||||||||
200,000 | FEDERAL HOME LN MTG CORP. 6.00% 02/08/17 | 197,813 | |||||||||||||
175,000 | FEDERAL HOME LN MTG CORP. 6.125% 12/01/15 | 174,095 |
See Accompanying Notes to Financial Statements
42
Pacific Advisors Balanced Fund
Statement of Investments (Unaudited)
as of June 30, 2007
Quantity or Principal | Description | Current $ Value** | % of Total Net Assets | ||||||||||||
US GOVT SECURITIES continued | |||||||||||||||
165,000 | FEDERAL HOME LOAN BANK 5.00% 11/16/11 STEP | 164,705 | |||||||||||||
200,000 | FEDERAL HOME LOAN BANK 5.50% 06/05/09 | 200,081 | |||||||||||||
450,000 | FEDERAL HOME LOAN BANK 5.51% 01/23/12 | 447,377 | |||||||||||||
200,000 | FEDERAL HOME LOAN BANK 5.625% 03/01/12 | 199,149 | |||||||||||||
265,000 | FEDERAL HOME LOAN BANK 5.70% 03/09/12 | 264,119 | |||||||||||||
200,000 | FEDERAL HOME LOAN BANK 6.00% 06/18/12 | 200,009 | |||||||||||||
200,000 | FEDERAL HOME LOAN BANK 6.00% 08/08/11 | 200,041 | |||||||||||||
150,000 | FEDERAL HOME LOAN BANK 6.00% 12/21/16 | 148,590 | |||||||||||||
250,000 | FEDERAL HOME LOAN BANK 6.05% 08/02/13 | 249,984 | |||||||||||||
100,000 | FEDERAL NATL MTG ASSOC. 5.00% 09/30/09 STEP | 99,940 | |||||||||||||
200,000 | FEDERAL NATL MTG ASSOC. 6.00% 09/25/14 | 198,830 | |||||||||||||
100,000 | FEDERAL NATL MTG ASSOC. 6.00% 06/17/19 STEP | 99,713 | |||||||||||||
300,000 | FEDERAL NATL MTG ASSOC. 6.00% 01/10/17 | 296,924 | |||||||||||||
250,000 | FEDERAL NATL MTG ASSOC. 6.25% 08/15/16 | 249,660 | |||||||||||||
250,000 | FEDERAL NATL MTG ASSOC. 6.50% 07/26/16 | 250,177 | |||||||||||||
3,740,742 | 8.62 | ||||||||||||||
TOTAL US GOVT SECURITIES (Cost: $3,754,392) | 3,740,742 | 8.62 | |||||||||||||
PREFERRED STOCK | |||||||||||||||
FINANCIAL | 0.57 | ||||||||||||||
MULTI LINE INSURANCE | |||||||||||||||
5,000 | AIG 6.45% PFD | 123,500 | |||||||||||||
5,000 | ING GROEP NV 6.375% PFD | 124,000 | |||||||||||||
247,500 | 0.57 | ||||||||||||||
TELECOMMUNICATION SERVICES | 0.57 | ||||||||||||||
INTG TELECOMM SRVCS | |||||||||||||||
10,000 | AT&T INC. 6.375% PFD | 246,300 | |||||||||||||
246,300 | 0.57 | ||||||||||||||
TOTAL PREFERRED STOCK (Cost: $499,938) | 493,800 | 1.14 | |||||||||||||
SHORT TERM INVESTMENTS | |||||||||||||||
MONEY MARKET | 0.06 | ||||||||||||||
24,402 | UMB MONEY MARKET FIDUCIARY | 24,402 | |||||||||||||
24,402 | 0.06 | ||||||||||||||
TOTAL SHORT TERM INVESTMENTS (Cost: $24,402) | 24,402 | 0.06 | |||||||||||||
TOTAL INVESTMENTS (Cost: $31,950,240) | 43,208,497 | 99.61 | |||||||||||||
OTHER ASSETS LESS LIABILITIES | 168,680 | 0.39 | |||||||||||||
TOTAL NET ASSETS | 43,377,177 | 100.00 |
* Non-income producing
** The principal amount is stated in U.S. dollars unless otherwise indicated.
See Accompanying Notes to Financial Statements
43
Pacific Advisors Growth Fund
Statement of Investments (Unaudited)
as of June 30, 2007
Quantity or Principal | Description | Current $ Value** | % of Total Net Assets | ||||||||||||
COMMON STOCK | |||||||||||||||
CONSUMER DISCRETIONARY | 0.44 | ||||||||||||||
HOME IMPROVEMENT | |||||||||||||||
500 | HOME DEPOT, INC. | 19,675 | |||||||||||||
19,675 | 0.44 | ||||||||||||||
CONSUMER STAPLES | 2.83 | ||||||||||||||
PERSONAL PRODUCTS | |||||||||||||||
2,000 | CHATTEM INC.* | 126,760 | |||||||||||||
126,760 | 2.83 | ||||||||||||||
ENERGY | 29.40 | ||||||||||||||
INTEGRATED OIL & GAS | |||||||||||||||
1,000 | BRITISH PETROLEUM PLC ADR | 72,140 | |||||||||||||
1,500 | CONOCOPHILLIPS | 117,750 | |||||||||||||
3,500 | MARATHON OIL CORP. | 209,860 | |||||||||||||
1,000 | OCCIDENTAL PETROLEUM | 57,880 | |||||||||||||
457,630 | 10.23 | ||||||||||||||
OIL & GAS DRILLING | |||||||||||||||
1,000 | ULTRA PETROLEUM* | 55,240 | |||||||||||||
55,240 | 1.23 | ||||||||||||||
OIL & GAS EQUIP/SERV | |||||||||||||||
1,500 | CARBO CERAMICS INC. | 65,715 | |||||||||||||
1,000 | FMC TECHNOLOGIES* | 79,220 | |||||||||||||
3,000 | HORNBECK OFFSHORE SERVICES, INC.* | 116,280 | |||||||||||||
5,000 | MITCHAM INDUSTRIES INC.* | 95,450 | |||||||||||||
356,665 | 7.97 | ||||||||||||||
OIL & GAS EXPLR/PROD | |||||||||||||||
2,000 | APACHE CORP. | 163,180 | |||||||||||||
2,000 | CHESAPEAKE ENERGY CORP. | 69,200 | |||||||||||||
1,000 | XTO ENERGY INC. | 60,100 | |||||||||||||
292,480 | 6.54 | ||||||||||||||
OIL&GAS REF/MKT/TRAN | |||||||||||||||
4,000 | KIRBY CORP.* | 153,560 | |||||||||||||
153,560 | 3.43 | ||||||||||||||
FINANCIAL | 4.62 | ||||||||||||||
DIVERSIFIED BANKS | |||||||||||||||
1,000 | WACHOVIA CORP. | 51,250 | |||||||||||||
51,250 | 1.14 | ||||||||||||||
REGIONAL BANKS | |||||||||||||||
4,000 | EAST WEST BANCORP, INC. | 155,520 | |||||||||||||
155,520 | 3.48 |
See Accompanying Notes to Financial Statements
44
Pacific Advisors Growth Fund
Statement of Investments (Unaudited)
as of June 30, 2007
Quantity or Principal | Description | Current $ Value** | % of Total Net Assets | ||||||||||||
COMMON STOCK continued | |||||||||||||||
HEALTH CARE | 25.73 | ||||||||||||||
HEALTH CARE EQUIP | |||||||||||||||
500 | BECTON DICKINSON & CO. | 37,250 | |||||||||||||
3,000 | ST. JUDE MEDICAL INC.* | 124,470 | |||||||||||||
2,000 | ZIMMER HOLDINGS INC.* | 169,780 | |||||||||||||
331,500 | 7.41 | ||||||||||||||
HEALTH CARE SERVICES | |||||||||||||||
2,000 | QUEST DIAGNOSTICS, INC. | 103,300 | |||||||||||||
103,300 | 2.31 | ||||||||||||||
MANAGED HEALTH CARE | |||||||||||||||
5,000 | AMERICA SERVICES GROUP* | 84,600 | |||||||||||||
3,000 | UNITEDHEALTH GROUP INC. | 153,420 | |||||||||||||
2,750 | WELLPOINT* | 219,533 | |||||||||||||
457,553 | 10.23 | ||||||||||||||
PHARMACEUTICALS | |||||||||||||||
2,000 | GLAXOSMITHKLINE PLC | 104,740 | |||||||||||||
2,000 | JOHNSON & JOHNSON | 123,240 | |||||||||||||
1,200 | PFIZER INC. | 30,684 | |||||||||||||
258,664 | 5.78 | ||||||||||||||
INDUSTRIALS | 10.89 | ||||||||||||||
AEROSPACE & DEFENSE | |||||||||||||||
1,000 | BOEING CO. | 96,160 | |||||||||||||
1,000 | HONEYWELL INTERNATIONAL INC. | 56,280 | |||||||||||||
152,440 | 3.41 | ||||||||||||||
CONSTRUCTION & MACH | |||||||||||||||
3,000 | CHICAGO BRIDGE & IRON CO. NV | 113,220 | |||||||||||||
113,220 | 2.53 | ||||||||||||||
INDUSTRIAL CONGLOMER | |||||||||||||||
4,000 | GENERAL ELECTRIC CO. | 153,120 | |||||||||||||
153,120 | 3.42 | ||||||||||||||
INDUSTRIAL MACHINERY | |||||||||||||||
1,000 | ITT CORP. | 68,280 | |||||||||||||
68,280 | 1.53 | ||||||||||||||
INFORMATION TECHNOLOGY | 8.34 | ||||||||||||||
COMMUNICATIONS EQUIP | |||||||||||||||
2,500 | CISCO SYSTEMS INC.* | 69,625 | |||||||||||||
1,500 | QUALCOMM INC. | 65,085 | |||||||||||||
134,710 | 3.01 |
See Accompanying Notes to Financial Statements
45
Pacific Advisors Growth Fund
Statement of Investments (Unaudited)
as of June 30, 2007
Quantity or Principal | Description | Current $ Value** | % of Total Net Assets | ||||||||||||
COMMON STOCK continued | |||||||||||||||
ELECTRONIC EQ MANUF | |||||||||||||||
2,000 | ITRON INC.* | 155,880 | |||||||||||||
155,880 | 3.48 | ||||||||||||||
SEMICONDUCTORS | |||||||||||||||
1,000 | INTEL CORP. | 23,760 | |||||||||||||
23,760 | 0.53 | ||||||||||||||
SYSTEMS: SOFTWARE | |||||||||||||||
2,000 | MICROSOFT CORP. | 58,940 | |||||||||||||
58,940 | 1.32 | ||||||||||||||
MATERIALS | 6.69 | ||||||||||||||
FOREST PRODUCTS | |||||||||||||||
1,000 | LOUISIANA PACIFIC CORP. | 18,920 | |||||||||||||
18,920 | 0.42 | ||||||||||||||
SPECIALTY CHEMICALS | |||||||||||||||
3,000 | LYONDELL CHEMICAL CO. | 111,360 | |||||||||||||
111,360 | 2.49 | ||||||||||||||
STEEL | |||||||||||||||
5,000 | COMMERCIAL METALS CO. | 168,850 | |||||||||||||
168,850 | 3.78 | ||||||||||||||
TELECOMMUNICATION SERVICES | 1.71 | ||||||||||||||
INTG TELECOMM SRVCS | |||||||||||||||
5,000 | CITIZENS COMMUNICATIONS CO. | 76,350 | |||||||||||||
76,350 | 1.71 | ||||||||||||||
TOTAL COMMON STOCK (Cost: $3,066,153) | 4,055,627 | 90.65 | |||||||||||||
SHORT TERM INVESTMENTS | |||||||||||||||
MONEY MARKET | 9.62 | ||||||||||||||
430,544 | UMB MONEY MARKET FIDUCIARY | 430,543 | |||||||||||||
430,543 | 9.62 | ||||||||||||||
TOTAL SHORT TERM INVESTMENTS (Cost: $430,543) | 430,543 | 9.62 | |||||||||||||
TOTAL INVESTMENTS (Cost: $3,496,696) | 4,486,170 | 100.27 | |||||||||||||
OTHER ASSETS LESS LIABILITIES | (12,042 | ) | (0.27 | ) | |||||||||||
TOTAL NET ASSETS | 4,474,128 | 100.00 |
* Non-income producing
** The principal amount is stated in U.S. dollars unless otherwise indicated.
See Accompanying Notes to Financial Statements
46
Pacific Advisors Multi-Cap Value Fund
Statement of Investments (Unaudited)
as of June 30, 2007
Quantity or Principal | Description | Current $ Value** | % of Total Net Assets | ||||||||||||
COMMON STOCK | |||||||||||||||
CONSUMER DISCRETIONARY | 6.27 | ||||||||||||||
FOOTWEAR | |||||||||||||||
18,000 | K-SWISS INC. | 509,940 | |||||||||||||
509,940 | 3.32 | ||||||||||||||
HOME IMPROVEMENT | |||||||||||||||
11,500 | HOME DEPOT, INC. | 452,525 | |||||||||||||
452,525 | 2.95 | ||||||||||||||
CONSUMER STAPLES | 10.44 | ||||||||||||||
AGRICULTURAL PRODUCT | |||||||||||||||
15,200 | ARCHER-DANIELS- MIDLAND CO. | 502,968 | |||||||||||||
502,968 | 3.28 | ||||||||||||||
HOUSEHOLD PRODUCTS | |||||||||||||||
13,000 | ALBERTO CULVER CO. | 308,360 | |||||||||||||
308,360 | 2.01 | ||||||||||||||
HYPERMKTS/SUPER CTRS | |||||||||||||||
9,400 | WAL-MART STORES INC. | 452,234 | |||||||||||||
452,234 | 2.95 | ||||||||||||||
PERSONAL PRODUCTS | |||||||||||||||
37,500 | SALLY BEAUTY HOLDINGS* | 337,500 | |||||||||||||
337,500 | 2.20 | ||||||||||||||
ENERGY | 19.88 | ||||||||||||||
INTEGRATED OIL & GAS | |||||||||||||||
6,000 | CHEVRON CORP. | 505,440 | |||||||||||||
8,600 | MARATHON OIL CORP. | 515,656 | |||||||||||||
1,021,096 | 6.66 | ||||||||||||||
OIL & GAS EQUIP/SERV | |||||||||||||||
25,000 | INPUT OUTPUT INC.* | 390,250 | |||||||||||||
27,000 | MITCHAM INDUSTRIES INC.* | 515,430 | |||||||||||||
3,000 | TIDEWATER CORP. | 212,640 | |||||||||||||
1,118,320 | 7.29 | ||||||||||||||
OIL & GAS EXPLR/PROD | |||||||||||||||
5,500 | APACHE CORP. | 448,745 | |||||||||||||
13,300 | CHESAPEAKE ENERGY CORP. | 460,180 | |||||||||||||
908,925 | 5.93 | ||||||||||||||
FINANCIAL | 18.56 | ||||||||||||||
DIVERSIFIED BANKS | |||||||||||||||
14,000 | CITIGROUP INC. | 718,060 | |||||||||||||
718,060 | 4.68 |
See Accompanying Notes to Financial Statements
47
Pacific Advisors Multi-Cap Value Fund
Statement of Investments (Unaudited)
as of June 30, 2007
Quantity or Principal | Description | Current $ Value** | % of Total Net Assets | ||||||||||||
COMMON STOCK continued | |||||||||||||||
INVESTMENT BANK/BRKG | |||||||||||||||
2,100 | GOLDMAN SACHS GROUP INC. | 455,175 | |||||||||||||
455,175 | 2.97 | ||||||||||||||
MULTI LINE INSURANCE | |||||||||||||||
7,600 | AMERICAN INT'L GROUP INC. | 532,228 | |||||||||||||
532,228 | 3.47 | ||||||||||||||
SPECIALIZED FINANCE | |||||||||||||||
20,000 | WESTERN UNION CO. | 416,600 | |||||||||||||
416,600 | 2.72 | ||||||||||||||
THRIFTS&MTG FINANCE | |||||||||||||||
17,000 | WASHINGTON MUTUAL INC. | 724,880 | |||||||||||||
724,880 | 4.72 | ||||||||||||||
HEALTH CARE | 10.84 | ||||||||||||||
HEALTH CARE EQUIP | |||||||||||||||
23,000 | BOSTON SCIENTIFIC CORP.* | 352,820 | |||||||||||||
352,820 | 2.30 | ||||||||||||||
MANAGED HEALTH CARE | |||||||||||||||
9,800 | UNITEDHEALTH GROUP INC. | 501,172 | |||||||||||||
501,172 | 3.27 | ||||||||||||||
PHARMACEUTICALS | |||||||||||||||
7,200 | GLAXOSMITHKLINE PLC | 377,032 | |||||||||||||
7,000 | JOHNSON & JOHNSON | 431,340 | |||||||||||||
808,372 | 5.27 | ||||||||||||||
INDUSTRIALS | 21.95 | ||||||||||||||
AEROSPACE & DEFENSE | |||||||||||||||
10,100 | HONEYWELL INTERNATIONAL INC. | 568,428 | |||||||||||||
568,428 | 3.71 | ||||||||||||||
ELECTRICAL COMPON/EQ | |||||||||||||||
29,500 | SAIC INC.* | 533,065 | |||||||||||||
533,065 | 3.47 | ||||||||||||||
INDUSTRIAL CONGLOMER | |||||||||||||||
6,000 | 3M CO. | 520,740 | |||||||||||||
7,000 | LUFKIN INDUSTRIES INC. | 451,850 | |||||||||||||
20,500 | TYCO INTERNATIONAL LTD. | 692,695 | |||||||||||||
1,665,285 | 10.86 |
See Accompanying Notes to Financial Statements
48
Pacific Advisors Multi-Cap Value Fund
Statement of Investments (Unaudited)
as of June 30, 2007
Quantity or Principal | Description | Current $ Value** | % of Total Net Assets | ||||||||||||
COMMON STOCK continued | |||||||||||||||
INDUSTRIAL MACHINERY | |||||||||||||||
10,000 | GRACO INC. | 402,800 | |||||||||||||
402,800 | 2.63 | ||||||||||||||
RAILROADS & TRUCKING | |||||||||||||||
6,600 | GENESEE & WYOMING* | 196,944 | |||||||||||||
196,944 | 1.28 | ||||||||||||||
INFORMATION TECHNOLOGY | 6.21 | ||||||||||||||
SEMICONDUCTORS | |||||||||||||||
22,000 | INTEL CORP. | 522,720 | |||||||||||||
522,720 | 3.41 | ||||||||||||||
SYSTEMS: SOFTWARE | |||||||||||||||
14,600 | MICROSOFT CORP. | 430,262 | |||||||||||||
430,262 | 2.80 | ||||||||||||||
MATERIALS | 8.02 | ||||||||||||||
DIVERSIFD METAL/MNG | |||||||||||||||
8,000 | ARCH COAL INC. | 278,400 | |||||||||||||
278,400 | 1.82 | ||||||||||||||
SPECIALTY CHEMICALS | |||||||||||||||
16,000 | H.B. FULLER | 478,240 | |||||||||||||
478,240 | 3.12 | ||||||||||||||
STEEL | |||||||||||||||
14,000 | COMMERCIAL METALS CO. | 472,780 | |||||||||||||
472,780 | 3.08 | ||||||||||||||
TOTAL COMMON STOCK (Cost: $13,515,378) | 15,670,099 | 102.17 | |||||||||||||
TOTAL INVESTMENTS (Cost: $13,515,378) | 15,670,099 | 102.17 | |||||||||||||
OTHER ASSETS LESS LIABILITIES | (332,156 | ) | (2.17 | ) | |||||||||||
TOTAL NET ASSETS | 15,337,943 | 100.00 |
* Non-income producing.
** The principal amount is stated in U.S. dollars unless otherwise indicated.
See Accompanying Notes to Financial Statements
49
Pacific Advisors Small Cap Fund
Statement of Investments (Unaudited)
as of June 30, 2007
Quantity or Principal | Description | Current $ Value** | % of Total Net Assets | ||||||||||||
COMMON STOCK | |||||||||||||||
CONSUMER DISCRETIONARY | 13.41 | ||||||||||||||
APPAREL - RETAIL | |||||||||||||||
145,000 | ASHWORTH, INC.* | 1,015,000 | |||||||||||||
1,015,000 | 0.71 | ||||||||||||||
AUTO PARTS & EQUIP | |||||||||||||||
276,200 | AMERIGON INC.* | 4,968,838 | |||||||||||||
300,000 | NOBLE INTERNATIONAL LTD. | 6,132,000 | |||||||||||||
11,100,838 | 7.73 | ||||||||||||||
HOME FURNISHINGS | |||||||||||||||
130,000 | CRAFTMADE INTERNATIONAL INC. | 2,224,300 | |||||||||||||
2,224,300 | 1.55 | ||||||||||||||
SPECIALTY STORES | |||||||||||||||
172,000 | CONNS INC.* | 4,912,320 | |||||||||||||
4,912,320 | 3.42 | ||||||||||||||
CONSUMER STAPLES | 2.78 | ||||||||||||||
PERSONAL PRODUCTS | |||||||||||||||
63,000 | CHATTEM INC.* | 3,992,940 | |||||||||||||
3,992,940 | 2.78 | ||||||||||||||
ENERGY | 25.29 | ||||||||||||||
OIL & GAS DRILLING | |||||||||||||||
455,000 | INFINITY ENERGY RESOURCES INC* | 1,405,950 | |||||||||||||
286,000 | TOREADOR RESOURCES CORP.* | 4,290,000 | |||||||||||||
5,695,950 | 3.97 | ||||||||||||||
OIL & GAS EQUIP/SERV | |||||||||||||||
135,000 | MATRIX SERVICE CO.* | 3,354,750 | |||||||||||||
362,000 | MITCHAM INDUSTRIES INC.* | 6,910,580 | |||||||||||||
10,265,330 | 7.15 | ||||||||||||||
OIL & GAS EXPLR/PROD | |||||||||||||||
65,000 | CHESAPEAKE ENERGY CORP. | 2,249,000 | |||||||||||||
70,000 | DENBURY RESOURCES INC.* | 2,625,000 | |||||||||||||
260,000 | QUEST RESOURCE CORP.* | 3,036,800 | |||||||||||||
7,910,800 | 5.51 | ||||||||||||||
OIL & GAS REF/MKT/TRAN | |||||||||||||||
180,000 | HORNBECK OFFSHORE SERVICES, INC.* | 6,976,800 | |||||||||||||
142,000 | KIRBY CORP.* | 5,451,380 | |||||||||||||
12,428,180 | 8.66 |
See Accompanying Notes to Financial Statements
50
Pacific Advisors Small Cap Fund
Statement of Investments (Unaudited)
as of June 30, 2007
Quantity or Principal | Description | Current $ Value** | % of Total Net Assets | ||||||||||||
COMMON STOCK continued | |||||||||||||||
FINANCIAL | 9.82 | ||||||||||||||
REGIONAL BANKS | |||||||||||||||
88,000 | EAST WEST BANCORP, INC. | 3,421,440 | |||||||||||||
270,000 | NARA BANCORP INC. | 4,301,100 | |||||||||||||
7,722,540 | 5.38 | ||||||||||||||
SPECIALIZED FINANCE | |||||||||||||||
322,000 | EZCORP INC. A* | 4,263,280 | |||||||||||||
90,000 | FIRST CASH FINANCIAL SERVICES, INC.* | 2,109,600 | |||||||||||||
6,372,880 | 4.44 | ||||||||||||||
HEALTH CARE | 5.20 | ||||||||||||||
MANAGED HEALTH CARE | |||||||||||||||
352,000 | AMERICA SERVICES GROUP* | 5,955,840 | |||||||||||||
360,000 | UNITED AMERICAN HEALTHCARE CORP.* | 1,504,800 | |||||||||||||
7,460,640 | 5.20 | ||||||||||||||
INDUSTRIALS | 27.72 | ||||||||||||||
BUILDING PRODUCTS | |||||||||||||||
115,000 | APOGEE ENTERPRISES INC. | 3,199,300 | |||||||||||||
3,199,300 | 2.23 | ||||||||||||||
DIVERSIFIED COML SRV | |||||||||||||||
380,000 | DARLING INTERNATIONAL INC.* | 3,473,200 | |||||||||||||
137,800 | FURMANITE CORP.* | 1,066,572 | |||||||||||||
174,000 | MOBILE MINI INC.* | 5,080,800 | |||||||||||||
70,000 | TEAM INC* | 3,147,900 | |||||||||||||
12,768,472 | 8.89 | ||||||||||||||
ENVIROMENTAL SERVICE | |||||||||||||||
242,000 | AMERICAN ECOLOGY CORP. | 5,183,640 | |||||||||||||
150,000 | TETRA TECHNOLOGIES INC.* | 3,232,500 | |||||||||||||
8,416,140 | 5.87 | ||||||||||||||
RAILROADS & TRUCKING | |||||||||||||||
185,000 | FROZEN FOOD EXPRESS INDUSTRIES INC. | 1,875,900 | |||||||||||||
195,000 | SAIA INC.* | 5,315,700 | |||||||||||||
290,000 | US XPRESS ENTERPRISES INC.* | 5,388,200 | |||||||||||||
132,000 | VITRAN CORPORATION, INC.* | 2,816,880 | |||||||||||||
15,396,680 | 10.73 | ||||||||||||||
INFORMATION TECHNOLOGY | 7.26 | ||||||||||||||
APPLICATION SOFTWARE | |||||||||||||||
560,000 | INTERVOICE INC.* | 4,664,800 | |||||||||||||
4,664,800 | 3.25 |
See Accompanying Notes to Financial Statements
51
Pacific Advisors Small Cap Fund
Statement of Investments (Unaudited)
as of June 30, 2007
Quantity or Principal | Description | Current $ Value** | % of Total Net Assets | ||||||||||||
COMMON STOCK continued | |||||||||||||||
COMPUTER STORAGE/PER | |||||||||||||||
600,000 | ADAPTEC INC.* | 2,286,000 | |||||||||||||
2,286,000 | 1.59 | ||||||||||||||
SYSTEMS: SOFTWARE | |||||||||||||||
280,000 | TYLER TECHNOLOGIES INC.* | 3,474,800 | |||||||||||||
3,474,800 | 2.42 | ||||||||||||||
MATERIALS | 8.14 | ||||||||||||||
SPECIALTY CHEMICALS | |||||||||||||||
260,000 | TERRA INDUSTRIES INC.* | 6,609,200 | |||||||||||||
6,609,200 | 4.61 | ||||||||||||||
STEEL | |||||||||||||||
150,000 | COMMERCIAL METALS CO. | 5,065,500 | |||||||||||||
5,065,500 | 3.53 | ||||||||||||||
TELECOMMUNICATION SERVICES | 3.63 | ||||||||||||||
INTG TELECOMM SRVCS | |||||||||||||||
400,000 | PREMIERE GLOBAL SERVICES INC.* | 5,208,000 | |||||||||||||
5,208,000 | 3.63 | ||||||||||||||
TOTAL COMMON STOCK (Cost: $110,580,789) | 148,190,610 | 103.25 | |||||||||||||
TOTAL INVESTMENTS (Cost: $110,580,789) | 148,190,610 | 103.25 | |||||||||||||
OTHER ASSETS LESS LIABILITIES | (4,664,879 | ) | (3.25 | ) | |||||||||||
TOTAL NET ASSETS | 143,525,731 | 100.00 |
* Non-income producing
** The principal amount is stated in U.S. dollars unless otherwise indicated.
See Accompanying Notes to Financial Statements
52
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53
Pacific Advisors Fund Inc.
Statement of Assets and Liabilities (Unaudited)
June 30, 2007
Government Securities Fund | Income and Equity Fund | Balanced Fund | |||||||||||||
Assets | |||||||||||||||
Investment securities | |||||||||||||||
At cost | $ | 4,089,194 | $ | 9,237,324 | $ | 31,925,838 | |||||||||
At market value | $ | 4,162,706 | $ | 9,669,101 | $ | 43,184,096 | |||||||||
Cash or cash equivalent, at market value | 127,785 | 114,850 | 24,402 | ||||||||||||
Accrued income receivable | 38,223 | 106,976 | 303,498 | ||||||||||||
Receivable for capital shares sold | 484 | 14,765 | 25,345 | ||||||||||||
Other assets | - | - | - | ||||||||||||
Total assets | 4,329,198 | 9,905,692 | 43,537,341 | ||||||||||||
Liabilities | |||||||||||||||
Bank borrowings (Note 6) | - | - | - | ||||||||||||
Payable for investments purchased | - | - | - | ||||||||||||
Payable for fund shares redeemed | - | - | - | ||||||||||||
Accounts payable | 8,123 | 21,670 | 115,954 | ||||||||||||
Accounts payable to related parties (Note 3) | 1,675 | 6,123 | 17,442 | ||||||||||||
Payable to investment manager (Note 3) | - | 2,636 | 26,768 | ||||||||||||
Total liabilities | 9,798 | 30,429 | 160,164 | ||||||||||||
Net Assets | $ | 4,319,400 | $ | 9,875,263 | $ | 43,377,177 | |||||||||
Summary of Shareholders' Equity | |||||||||||||||
Paid in capital | 5,343,371 | 9,338,674 | 30,417,900 | ||||||||||||
Accumulated undistributed net investment income | 1,080 | 1,274 | 72,960 | ||||||||||||
Accumulated undistributed net realized gain (loss) on security transactions | (1,098,563 | ) | 103,538 | 1,628,059 | |||||||||||
Net unrealized appreciation of investments | 73,512 | 431,777 | 11,258,258 | ||||||||||||
Net assets at June 30, 2007 | $ | 4,319,400 | $ | 9,875,263 | $ | 43,377,177 | |||||||||
Class A: | |||||||||||||||
Net assets | $ | 2,818,994 | $ | 4,172,556 | $ | 6,053,490 | |||||||||
Shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | ||||||||||||
Shares outstanding | 302,750 | 384,857 | 306,742 | ||||||||||||
Net asset value and redemption price per share | $ | 9.31 | $ | 10.84 | $ | 19.73 | |||||||||
Maximum offering price per share | $ | 9.77 | $ | 11.38 | $ | 20.93 | |||||||||
Sales load | 4.75 | % | 4.75 | % | 5.75 | % | |||||||||
Class C: | |||||||||||||||
Net assets | $ | 1,500,407 | $ | 5,702,707 | $ | 37,323,687 | |||||||||
Shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | ||||||||||||
Shares outstanding | 161,183 | 547,987 | 1,968,366 | ||||||||||||
Net asset value and redemption price per share | $ | 9.31 | $ | 10.41 | $ | 18.96 | |||||||||
Class I: | |||||||||||||||
Net assets | N/A | N/A | N/A | ||||||||||||
Shares authorized | |||||||||||||||
Shares outstanding | |||||||||||||||
Net asset value and redemption price per share | N/A | N/A | N/A |
See Accompanying Notes to Financial Statements
54
Growth Fund | Multi-Cap Value Fund | Small Cap Fund | |||||||||||||
Assets | |||||||||||||||
Investment securities | |||||||||||||||
At cost | $ | 3,066,153 | $ | 13,515,378 | $ | 110,580,789 | |||||||||
At market value | $ | 4,055,627 | $ | 15,670,099 | $ | 148,190,610 | |||||||||
Cash or cash equivalent, at market value | 430,543 | - | - | ||||||||||||
Accrued income receivable | 3,652 | 6,066 | 27,413 | ||||||||||||
Receivable for capital shares sold | 283 | 15,142 | 668,818 | ||||||||||||
Other assets | - | - | - | ||||||||||||
Total assets | 4,490,105 | 15,691,307 | 148,886,841 | ||||||||||||
Liabilities | |||||||||||||||
Bank borrowings (Note 6) | - | 219,664 | 4,373,567 | ||||||||||||
Payable for investments purchased | - | 67,580 | 612,245 | ||||||||||||
Payable for fund shares redeemed | - | 9,000 | 59,682 | ||||||||||||
Accounts payable | 9,315 | 36,340 | 178,911 | ||||||||||||
Accounts payable to related parties (Note 3) | 4,479 | 8,028 | 52,020 | ||||||||||||
Payable to investment manager (Note 3) | 2,183 | 12,752 | 84,685 | ||||||||||||
Total liabilities | 15,977 | 353,364 | 5,361,110 | ||||||||||||
Net Assets | $ | 4,474,128 | $ | 15,337,943 | $ | 143,525,731 | |||||||||
Summary of Shareholders' Equity | |||||||||||||||
Paid in capital | 3,956,587 | 12,429,694 | 102,456,428 | ||||||||||||
Accumulated undistributed net investment income | 190 | - | - | ||||||||||||
Accumulated undistributed net realized gain (loss) on security transactions | (472,123 | ) | 753,528 | 3,459,482 | |||||||||||
Net unrealized appreciation of investments | 989,474 | 2,154,721 | 37,609,821 | ||||||||||||
Net assets at June 30, 2007 | $ | 4,474,128 | $ | 15,337,943 | $ | 143,525,731 | |||||||||
Class A: | |||||||||||||||
Net assets | $ | 2,485,746 | $ | 5,046,429 | $ | 110,036,261 | |||||||||
Shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | ||||||||||||
Shares outstanding | 241,326 | 371,948 | 2,739,071 | ||||||||||||
Net asset value and redemption price per share | $ | 10.30 | $ | 13.57 | $ | 40.17 | |||||||||
Maximum offering price per share | $ | 10.93 | $ | 14.40 | $ | 42.62 | |||||||||
Sales load | 5.75 | % | 5.75 | % | 5.75 | % | |||||||||
Class C: | |||||||||||||||
Net assets | $ | 1,988,382 | $ | 10,291,514 | $ | 32,313,977 | |||||||||
Shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | ||||||||||||
Shares outstanding | 207,698 | 791,818 | 902,500 | ||||||||||||
Net asset value and redemption price per share | $ | 9.57 | $ | 13.00 | $ | 35.80 | |||||||||
Class I: | |||||||||||||||
Net assets | N/A | N/A | $ | 1,175,493 | |||||||||||
Shares authorized | 50,000,000 | ||||||||||||||
Shares outstanding | 27,138 | ||||||||||||||
Net asset value and redemption price per share | N/A | N/A | $ | 43.32 |
55
Pacific Advisors Fund Inc.
Statement of Operations (Unaudited)
For the period ended June 30, 2007
Government Securities Fund | Income and Equity Fund | Balanced Fund | |||||||||||||
Investment Income | |||||||||||||||
Dividends | $ | 13,949 | $ | 62,666 | $ | 230,619 | |||||||||
Interest | 93,410 | 163,287 | 460,062 | ||||||||||||
Total Income | 107,359 | 225,953 | 690,681 | ||||||||||||
Expenses | |||||||||||||||
Investment Management Fees | 13,500 | 36,561 | 158,277 | ||||||||||||
Transfer Agent Fees | 19,524 | 23,758 | 49,575 | ||||||||||||
Fund Accounting Fees | 10,776 | 21,977 | 97,219 | ||||||||||||
Legal Fees | 2,574 | 6,741 | 30,264 | ||||||||||||
Audit Fees | 1,869 | 4,387 | 18,993 | ||||||||||||
Registration Fees | 5,788 | 8,132 | 17,059 | ||||||||||||
Printing | 2,167 | 5,128 | 24,387 | ||||||||||||
Custody Fees | 3,332 | 3,782 | 4,637 | ||||||||||||
Interest on Borrowings | - | 108 | 191 | ||||||||||||
Director Fees/meetings | 427 | 1,013 | 4,415 | ||||||||||||
Distribution and Service (12b-1) Fees (Note 3) | 11,035 | 33,693 | 188,115 | ||||||||||||
Other Expenses | 2,126 | 5,208 | 24,589 | ||||||||||||
Total Expenses, before fees waived | 73,118 | 150,488 | 617,721 | ||||||||||||
Less fees waived (Note 3) | 30,299 | 33,924 | - | ||||||||||||
Net Expenses | 42,819 | 116,564 | 617,721 | ||||||||||||
Net Investment Income (Loss) | 64,540 | 109,389 | 72,960 | ||||||||||||
Net Realized and Unrealized Gain (Loss) on Investments | |||||||||||||||
Net realized gain (loss) on investments | (109 | ) | 58,935 | 1,642,720 | |||||||||||
Change in net unrealized appreciation (depreciation) of investments | 30,584 | 36,760 | 1,068,151 | ||||||||||||
30,475 | 95,695 | 2,710,871 | |||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 95,015 | $ | 205,084 | $ | 2,783,831 |
See Accompanying Notes to Financial Statements
56
Growth Fund | Multi-Cap Value Fund | Small Cap Fund | |||||||||||||
Investment Income | |||||||||||||||
Dividends | $ | 21,989 | $ | 98,960 | $ | 216,245 | |||||||||
Interest | 8,191 | 22,288 | 890 | ||||||||||||
Total Income | 30,180 | 121,248 | 217,135 | ||||||||||||
Expenses | |||||||||||||||
Investment Management Fees | 15,709 | 72,860 | 405,662 | ||||||||||||
Transfer Agent Fees | 19,524 | 28,424 | 121,112 | ||||||||||||
Fund Accounting Fees | 10,771 | 33,565 | 249,289 | ||||||||||||
Legal Fees | 2,575 | 11,062 | 78,225 | ||||||||||||
Audit Fees | 1,885 | 6,557 | 48,679 | ||||||||||||
Registration Fees | 3,901 | 12,144 | 37,035 | ||||||||||||
Printing | 2,167 | 8,272 | 66,229 | ||||||||||||
Custody Fees | 3,206 | 3,769 | 10,250 | ||||||||||||
Interest on Borrowings | - | 7 | 65,826 | ||||||||||||
Director Fees/meetings | 419 | 1,496 | 10,108 | ||||||||||||
Distribution and Service (12b-1) Fees (Note 3) | 12,490 | 55,882 | 225,595 | ||||||||||||
Other Expenses | 2,150 | 8,435 | 59,721 | ||||||||||||
Total Expenses, before fees waived | 74,797 | 242,473 | 1,377,731 | ||||||||||||
Less fees waived (Note 3) | 12,023 | - | - | ||||||||||||
Net Expenses | 62,774 | 242,473 | 1,377,731 | ||||||||||||
Net Investment Income (Loss) | (32,594 | ) | (121,225 | ) | (1,160,596 | ) | |||||||||
Net Realized and Unrealized Gain (Loss) on Investments | |||||||||||||||
Net realized gain (loss) on investments | 127,689 | 753,069 | 3,446,398 | ||||||||||||
Change in net unrealized appreciation (depreciation) of investments | 368,929 | 204,195 | 18,445,697 | ||||||||||||
496,618 | 957,264 | 21,892,095 | |||||||||||||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 464,024 | $ | 836,039 | $ | 20,731,499 |
57
Pacific Advisors Fund Inc.
Statement of Changes in Net Assets (Unaudited)
Government Securities Fund | Income and Equity Fund | ||||||||||||||||||
Period ended June 30, 2007 | Year ended December 31, 2006 | Period ended June 30, 2007 | Year ended December 31, 2006 | ||||||||||||||||
Increase (Decrease) in Net Assets From Operations | |||||||||||||||||||
Net investment income (loss) | $ | 64,540 | $ | 112,065 | $ | 109,389 | $ | 136,099 | |||||||||||
Net realized gain (loss) on investments | (109 | ) | (76,812 | ) | 58,935 | 63,918 | |||||||||||||
Change in net unrealized appreciation of investments | 30,584 | 77,453 | 36,760 | 464,749 | |||||||||||||||
Increase in net assets resulting from operations | 95,015 | 112,706 | 205,084 | 664,766 | |||||||||||||||
From Distributions to Shareholders | |||||||||||||||||||
Class A: | |||||||||||||||||||
Net investment income | (45,266 | ) | (77,776 | ) | (53,394 | ) | (63,644 | ) | |||||||||||
Net capital gains | - | - | - | (5,738 | ) | ||||||||||||||
Return of capital | - | (365 | ) | - | - | ||||||||||||||
Class C: | |||||||||||||||||||
Net investment income | (18,194 | ) | (34,289 | ) | (54,721 | ) | (66,048 | ) | |||||||||||
Net capital gains | - | - | - | (5,955 | ) | ||||||||||||||
Return of capital | - | (161 | ) | - | - | ||||||||||||||
Class I: | N/A | N/A | N/A | N/A | |||||||||||||||
Net investment income | |||||||||||||||||||
Net capital gains | |||||||||||||||||||
Return of capital | |||||||||||||||||||
Decrease in net assets resulting from distributions | (63,460 | ) | (112,591 | ) | (108,115 | ) | (141,385 | ) | |||||||||||
From Capital Share Transactions (Note 6) | |||||||||||||||||||
Proceeds from shares sold | 509,131 | 702,072 | 628,663 | 966,748 | |||||||||||||||
Proceeds from shares purchased by reinvestment of dividends | 47,029 | 84,461 | 102,751 | 136,275 | |||||||||||||||
Cost of shares repurchased | (467,019 | ) | (2,586,654 | ) | (668,433 | ) | (3,612,047 | ) | |||||||||||
Increase (decrease) in net assets derived from capital share transactions | 89,141 | (1,800,121 | ) | 62,981 | (2,509,024 | ) | |||||||||||||
Increase (decrease) in net assets | 120,696 | (1,800,006 | ) | 159,950 | (1,985,643 | ) | |||||||||||||
Net Assets | |||||||||||||||||||
Beginning of period | 4,198,704 | 5,998,710 | 9,715,313 | 11,700,956 | |||||||||||||||
End of period | $ | 4,319,400 | $ | 4,198,704 | $ | 9,875,263 | $ | 9,715,313 | |||||||||||
Including undistributed net investment income of | $ | 1,080 | $ | - | $ | 1,274 | $ | - |
See Accompanying Notes to Financial Statements
58
Balanced Fund | |||||||||||
Period ended June 30, 2007 | Year ended December 31, 2006 | ||||||||||
Increase (Decrease) in Net Assets From Operations | |||||||||||
Net investment income (loss) | $ | 72,960 | $ | (88,863 | ) | ||||||
Net realized gain (loss) on investments | 1,642,720 | 1,045,833 | |||||||||
Change in net unrealized appreciation of investments | 1,068,151 | 2,141,496 | |||||||||
Increase in net assets resulting from operations | 2,783,831 | 3,098,466 | |||||||||
From Distributions to Shareholders | |||||||||||
Class A: | |||||||||||
Net investment income | - | - | |||||||||
Net capital gains | - | (160,660 | ) | ||||||||
Return of capital | - | (630 | ) | ||||||||
Class C: | |||||||||||
Net investment income | - | - | |||||||||
Net capital gains | - | (870,369 | ) | ||||||||
Return of capital | - | (3,411 | ) | ||||||||
Class I: | N/A | N/A | |||||||||
Net investment income | |||||||||||
Net capital gains | |||||||||||
Return of capital | |||||||||||
Decrease in net assets resulting from distributions | - | (1,035,070 | ) | ||||||||
From Capital Share Transactions (Note 6) | |||||||||||
Proceeds from shares sold | 1,610,411 | 4,331,098 | |||||||||
Proceeds from shares purchased by reinvestment of dividends | - | 1,011,542 | |||||||||
Cost of shares repurchased | (3,397,045 | ) | (4,533,583 | ) | |||||||
Increase (decrease) in net assets derived from capital share transactions | (1,786,634 | ) | 809,057 | ||||||||
Increase (decrease) in net assets | 997,197 | 2,872,453 | |||||||||
Net Assets | |||||||||||
Beginning of period | 42,379,980 | 39,507,527 | |||||||||
End of period | $ | 43,377,177 | $ | 42,379,980 | |||||||
Including undistributed net investment income of | $ | 72,960 | $ | - |
59
Pacific Advisors Fund Inc.
Statement of Changes in Net Assets (Unaudited)
Growth Fund | Multi-Cap Value Fund | ||||||||||||||||||
Period ended June 30, 2007 | Year ended December 31, 2006 | Period ended June 30, 2007 | Year ended December 31, 2006 | ||||||||||||||||
Increase (Decrease) in Net Assets From Operations | |||||||||||||||||||
Net investment income (loss) | $ | (32,594 | ) | $ | (53,495 | ) | $ | (121,225 | ) | $ | (276,522 | ) | |||||||
Net realized gain (loss) on investments | 127,689 | 93,570 | 753,069 | 1,303,600 | |||||||||||||||
Change in net unrealized appreciation of investments | 368,929 | 216,725 | 204,195 | 494,459 | |||||||||||||||
Increase in net assets resulting from operations | 464,024 | 256,800 | 836,039 | 1,521,537 | |||||||||||||||
From Distributions to Shareholders | |||||||||||||||||||
Class A: | |||||||||||||||||||
Net investment income | - | - | - | - | |||||||||||||||
Net capital gains | - | - | - | (343,675 | ) | ||||||||||||||
Return of capital | - | - | - | - | |||||||||||||||
Class C: | |||||||||||||||||||
Net investment income | - | - | - | - | |||||||||||||||
Net capital gains | - | - | - | (817,554 | ) | ||||||||||||||
Return of capital | - | - | - | - | |||||||||||||||
Class I: | N/A | N/A | N/A | N/A | |||||||||||||||
Net investment income | |||||||||||||||||||
Net capital gains | |||||||||||||||||||
Return of capital | |||||||||||||||||||
Decrease in net assets resulting from distributions | - | - | - | (1,161,229 | ) | ||||||||||||||
From Capital Share Transactions (Note 6) | |||||||||||||||||||
Proceeds from shares sold | 391,528 | 830,722 | 1,342,469 | 2,987,170 | |||||||||||||||
Proceeds from shares purchased by reinvestment of dividends | - | - | - | 1,143,390 | |||||||||||||||
Cost of shares repurchased | (338,685 | ) | (312,523 | ) | (1,139,354 | ) | (1,158,976 | ) | |||||||||||
Increase (decrease) in net assets derived from capital share transactions | 52,843 | 518,199 | 203,115 | 2,971,584 | |||||||||||||||
Increase (decrease) in net assets | 516,867 | 774,999 | 1,039,154 | 3,331,892 | |||||||||||||||
Net Assets | |||||||||||||||||||
Beginning of period | 3,957,261 | 3,182,262 | 14,298,789 | 10,966,897 | |||||||||||||||
End of period | $ | 4,474,128 | $ | 3,957,261 | $ | 15,337,943 | $ | 14,298,789 | |||||||||||
Including undistributed net investment income of | $ | 190 | $ | 190 | $ | - | $ | - |
See Accompanying Notes to Financial Statements
60
Small Cap Fund | |||||||||||
Period ended June 30, 2007 | Year ended December 31, 2006 | ||||||||||
Increase (Decrease) in Net Assets From Operations | |||||||||||
Net investment income (loss) | $ | (1,160,596 | ) | $ | (1,178,737 | ) | |||||
Net realized gain (loss) on investments | 3,446,398 | 3,995,405 | |||||||||
Change in net unrealized appreciation of investments | 18,445,697 | 10,055,870 | |||||||||
Increase in net assets resulting from operations | 20,731,499 | 12,872,538 | |||||||||
From Distributions to Shareholders | |||||||||||
Class A: | |||||||||||
Net investment income | - | - | |||||||||
Net capital gains | - | (2,171,968 | ) | ||||||||
Return of capital | - | - | |||||||||
Class C: | |||||||||||
Net investment income | - | - | |||||||||
Net capital gains | - | (663,505 | ) | ||||||||
Return of capital | - | - | |||||||||
Class I: | - | - | |||||||||
Net investment income | |||||||||||
Net capital gains | - | (174 | ) | ||||||||
Return of capital | - | - | |||||||||
Decrease in net assets resulting from distributions | - | (2,835,647 | ) | ||||||||
From Capital Share Transactions (Note 6) | |||||||||||
Proceeds from shares sold | 51,286,753 | 60,404,032 | |||||||||
Proceeds from shares purchased by reinvestment of dividends | - | 2,572,899 | |||||||||
Cost of shares repurchased | (8,570,084 | ) | (13,422,526 | ) | |||||||
Increase (decrease) in net assets derived from capital share transactions | 42,716,669 | 49,554,405 | |||||||||
Increase (decrease) in net assets | 63,448,168 | 59,591,296 | |||||||||
Net Assets | |||||||||||
Beginning of period | 80,077,563 | 20,486,267 | |||||||||
End of period | $ | 143,525,731 | $ | 80,077,563 | |||||||
Including undistributed net investment income of | $ | - | $ | - |
61
Pacific Advisors Fund Inc.
Notes to Financial Statements (Unaudited)
June 30, 2007
Note 1. Organization
Pacific Advisors Fund Inc. (the "Company") is an open-end diversified investment management company registered under the Investment Company Act of 1940, as amended. The Company currently offers six Funds: Government Securities Fund, Income and Equity Fund, Balanced Fund, Growth Fund, Multi-Cap Value Fund and Small Cap Fund. Each Fund is a separate investment portfolio of the Company with a distinct investment objective, investment program, policies and restrictions.
The Government Securities Fund seeks to provide high current income, preservation of capital, and rising future income, consistent with prudent investment risk. The Income and Equity Fund seeks to provide current income and, secondarily, long-term capital appreciation. The Balanced Fund seeks to achieve long-term capital appreciation and income consistent with reduced market risk. The Growth Fund seeks to achieve long-term capital appreciation through investment in medium to large capitalization companies. The Multi-Cap Value Fund seeks long-term capital appreciation by investing in a diversified portfolio of large to small capitalization companies. The Small Cap Fund seeks to provide capital appreciation through investment in small capitalization companies.
In addition to Class A and Class C shares, the Small Cap Fund introduced Class I shares on October 9, 2006. Each class has equal rights as to assets and voting privileges except that Class A and Class C each has exclusive voting rights with respect to its distribution plan. Investment income, realized and unrealized capital gains and losses, and the common expenses of each Fund are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each Class of shares differs in its respective service and distribution expenses and may differ in its transfer agent, registration, and certain other class-specific fees and expenses.
The Company enters into contracts that contain a variety of indemnifications. The Company's maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
Note 2. Significant Accounting Policies
A. Security Valuation. Securities listed on a national securities exchange and certain over-the-counter ("OTC") issues traded on the NASDAQ national market system are valued at the last quoted sale price at the close of the New York Stock Exchange. OTC issues not quoted on the NASDAQ system, and other equity securities for which no sale price is available, are valued at the last bid price as obtained from published sources or real time quote services, where available, and otherwise from brokers who are market makers for such securities. Debt securities with a maturity less than 60 days are valued on an amortized cost basis. Premium or discount on debt securities are amortized.
B. Security Transactions and Investment Income. Security transactions are accounted for on the trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and federal income tax purposes. Dividends are recorded on the ex-dividend date. Interest income is recorded on an accrual basis.
C. Dividends and Distributions to Shareholders. The Government Securities Fund and Income and Equity Fund declare and distribute dividends of their net investment income, if any, quarterly. The Balanced Fund, Growth Fund, Multi-Cap Value Fund and Small Cap Fund declare and distribute dividends of their net investment income, if any, annually. The Board of Directors will determine the amount and timing of such payments. Income dividends and capital gains distributions are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. These differences are primarily due to differing treatments of income and gain on various investment securities held by the Funds, timing differences and differing characterization of distributions made by the Funds.
D. Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts in the financial statements and footnotes. Actual results could differ from those estimates.
Note 3. Investment Management, Distributor and Other Related Party Transactions
The Company and the Funds have entered into investment management agreements ("Management Agreements") with Pacific Global Investment Management Company, Inc. ("Investment Manager").
The Management Agreements provide for investment management fees, payable monthly, and calculated at the maximum annual rate of 0.65% of average net assets for the Government Securities Fund, 0.75% of average net assets for the Income and Equity, Balanced, Growth and Small Cap Funds and 1.00% of average net assets for the Multi-Cap Value Fund.
In accordance with Expense Limitation Agreements with the Company, the Investment Manager will waive its respective management fees to the extent that the actual operating expenses of the following Funds exceed the following thresholds:
Class A | Class C | ||||||||||
Government Securities Fund | 1.65 | % | 2.40 | % | |||||||
Income and Equity Fund | 1.95 | % | 2.70 | % | |||||||
Growth Fund | 2.65 | % | 3.40 | % |
62
Pacific Advisors Fund Inc.
Notes to Financial Statements (Unaudited)
June 30, 2007
For the Government Securities Fund and Growth Fund only, if net expenses exceed the above thresholds after waiver of the entire management fee, the transfer agent will waive its transfer agency fee to the extent necessary to reduce Class expenses to the above thresholds. These agreements may be terminated by either party upon 90 days prior written notice.
Pursuant to the Expense Limitation Agreements, providing for the voluntary waiver of fees and the assumption of expenses by the Investment Manager and Transfer Agent, the following amounts were waived for the period ended June 30, 2007.
Management Fees Waived | Transfer Agent Fees Waived | ||||||||||
Government Securities Fund | $ | 13,500 | $ | 16,800 | |||||||
Income and Equity Fund | 33,924 | - | |||||||||
Growth Fund | 12,023 | - |
Effective 2004, the Investment Manager terminated all of its rights under the expense limitation agreements with respect to potential recoupment from the Funds of all management fees previously waived and all expenses previously reimbursed. In the future, the Investment Manager will not have any rights to recover fees it waives or expenses it may reimburse, with respect to any of the Funds.
For the period ended June 30, 2007, Pacific Global Fund Distributors, Inc. ("PGFD"), the principal underwriter for the Company, received commissions on sales of capital stock, after deducting amounts allowed to authorized distributors as commissions. The amounts are as follows:
Underwriting Fees Retained | Commissions Paid | ||||||||||
Government Securities Fund | $ | 71 | $ | 248 | |||||||
Income and Equity Fund | 49 | 208 | |||||||||
Balanced Fund | 1,851 | 1,813 | |||||||||
Growth Fund | 1,620 | 636 | |||||||||
Multi-Cap Value Fund | 2,997 | 2,365 | |||||||||
Small Cap Fund | 46,290 | 5,739 |
PGFD is a wholly-owned subsidiary of the Investment Manager.
The Company and the Funds have entered into agreements with Pacific Global Investor Services, Inc. ("PGIS") to provide fund accounting services at the monthly fee of three basis points for the first one hundred million in net assets or a minimum of $1,500. In addition, agreements to provide transfer agent services has also been entered into at a rate of $18.00 per year per open account and $3.00 per year per closed account with minimum charges of $1,400 per month for A, C, and I share accounts. PGIS is a wholly-owned subsidiary of the Investment Manager. In January 2007, the transfer agent did not charge its minimum charges for Class I Shares.
Accounts payable to related parties consist of management fees payable to the Investment Manager and fund accounting and transfer agent fees payable to PGIS.
The Company has adopted a plan of distribution, whereby the Funds may pay a service fee to qualified recipients in an amount up to 0.25% per annum of each Fund's daily net assets for Class A shares and Class C shares. Under the plan of the distribution, the Funds may pay a distribution fee to qualified recipients in an amount up to 0.75% per annum of each Fund's daily net assets for Class C shares. The Company has not adopted a plan of distribution for Class I Shares.
For the period ended June 30, 2007, total distribution and/or service (12b-1) fees were:
Class A | Class C | ||||||||||
Government Securities Fund | $ | 3,245 | $ | 7,790 | |||||||
Income and Equity Fund | 5,018 | 28,675 | |||||||||
Balanced Fund | 7,641 | 180,474 | |||||||||
Growth Fund | 2,818 | 9,672 | |||||||||
Multi-Cap Value Fund | 5,659 | 50,223 | |||||||||
Small Cap Fund | 103,640 | 121,955 |
63
Pacific Advisors Fund Inc.
Notes to Financial Statements (Unaudited)
June 30, 2007
Note 4. Purchase and Sales of Securities
The following summarizes purchases and sales of investment securities, other than short-term investments, and aggregate gross unrealized appreciation and depreciation on a tax basis by each Fund for the period ended and as of June 30, 2007.
Period ended | As of June 30, 2007 June 30, 2007 | ||||||||||||||||||||||
Cost of Purchases | Proceeds From Sales | Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) | |||||||||||||||||||
Government Securities Fund | $ | 349,825 | $ | 265,000 | $ | 123,224 | $ | 49,712 | $ | 73,512 | |||||||||||||
Income and Equity Fund | 2,249,658 | 1,588,817 | 582,206 | 150,429 | 431,777 | ||||||||||||||||||
Balanced Fund | 11,655,821 | 9,526,369 | 11,544,727 | 286,469 | 11,258,258 | ||||||||||||||||||
Growth Fund | 312,175 | 345,178 | 1,018,092 | 28,618 | 989,474 | ||||||||||||||||||
Multi-Cap Value Fund | 7,442,591 | 6,233,445 | 2,324,199 | 169,479 | 2,154,720 | ||||||||||||||||||
Small Cap Fund | 53,340,306 | 7,892,801 | 39,954,148 | 2,344,327 | 37,609,821 |
Note 5. Capital Share Transactions
A 2% redemption fee is assessed on shares of the Government Securities Fund or the Income and Equity Fund sold or exchanged within 60 days of purchase or shares of the Balanced Fund, Growth Fund, Multi-Cap Value Fund or the Small Cap Fund sold or exchanged within 180 days of purchase and is retained in each Fund. The redemption fees collected through June 30, 2007 are included in the dollar amount of shares sold in the table below. The amount of the increase is as follows:
Class A | Class C | ||||||||||
Government Securities Fund | $ | - | $ | - | |||||||
Income and Equity Fund | 1 | - | |||||||||
Balanced Fund | 33 | 112 | |||||||||
Growth Fund | 23 | - | |||||||||
Multi-Cap Value Fund | 1,033 | - | |||||||||
Small Cap Fund | 53,354 | 8,269 |
Period ended June 30, 2007 | Year ended December 31, 2006 | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Government Securities Fund | |||||||||||||||||||
Class A | |||||||||||||||||||
Shares Sold | 41,313 | $ | 385,273 | 62,182 | $ | 572,330 | |||||||||||||
Reinvestment of Distributions | 3,344 | 31,135 | 5,688 | 52,153 | |||||||||||||||
44,657 | 416,408 | 67,870 | 624,483 | ||||||||||||||||
Shares Repurchased | (8,822 | ) | (82,338 | ) | (40,369 | ) | (372,644 | ) | |||||||||||
Net Increase (Decrease) | 35,835 | $ | 334,070 | 27,501 | $ | 251,839 | |||||||||||||
Class C | |||||||||||||||||||
Shares Sold | 13,263 | $ | 123,858 | 14,168 | $ | 129,742 | |||||||||||||
Reinvestment of Distributions | 1,709 | 15,894 | 3,574 | 32,308 | |||||||||||||||
14,972 | 139,752 | 17,742 | 162,050 | ||||||||||||||||
Shares Repurchased | (41,349 | ) | (384,681 | ) | (244,107 | ) | (2,214,010 | ) | |||||||||||
Net Decrease | (26,377 | ) | $ | (244,929 | ) | (226,365 | ) | $ | (2,051,960 | ) |
64
Pacific Advisors Fund Inc.
Notes to Financial Statements (Unaudited)
June 30, 2007
Period ended June 30, 2007 | Year ended December 31, 2006 | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Income and Equity Fund | |||||||||||||||||||
Class A | |||||||||||||||||||
Shares Sold | 26,344 | $ | 286,668 | 63,270 | $ | 657,015 | |||||||||||||
Reinvestment of Distributions | 4,639 | 50,062 | 6,443 | 66,551 | |||||||||||||||
30,983 | 336,730 | 69,713 | 723,566 | ||||||||||||||||
Shares Repurchased | (16,174 | ) | (175,319 | ) | (134,769 | ) | (1,398,124 | ) | |||||||||||
Net Increase | 14,809 | $ | 161,411 | (65,056 | ) | $ | (674,558 | ) | |||||||||||
Class C | |||||||||||||||||||
Shares Sold | 33,002 | $ | 341,995 | 30,719 | $ | 309,733 | |||||||||||||
Reinvestment of Distributions | 5,087 | 52,689 | 7,027 | 69,724 | |||||||||||||||
38,089 | 394,684 | 37,746 | 379,457 | ||||||||||||||||
Shares Repurchased | (47,223 | ) | (493,114 | ) | (221,873 | ) | (2,213,923 | ) | |||||||||||
Net Increase (Decrease) | (9,134 | ) | $ | (98,430 | ) | (184,127 | ) | $ | (1,834,466 | ) | |||||||||
Period ended June 30, 2007 | Year ended December 31, 2006 | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Balanced Fund | |||||||||||||||||||
Class A | |||||||||||||||||||
Shares Sold | 18,494 | $ | 352,940 | 44,763 | $ | 800,706 | |||||||||||||
Reinvestment of Distributions | - | - | 7,893 | 146,124 | |||||||||||||||
18,494 | 352,940 | 52,656 | 946,830 | ||||||||||||||||
Shares Repurchased | (80,127 | ) | (1,504,866 | ) | (47,792 | ) | (860,697 | ) | |||||||||||
Net Increase | (61,633 | ) | $ | (1,151,926 | ) | 4,864 | $ | 86,133 | |||||||||||
Class C | |||||||||||||||||||
Shares Sold | 69,237 | $ | 1,257,471 | 203,596 | $ | 3,530,392 | |||||||||||||
Reinvestment of Distributions | - | - | 48,449 | 865,418 | |||||||||||||||
69,237 | 1,257,471 | 252,045 | 4,395,810 | ||||||||||||||||
Shares Repurchased | (104,048 | ) | (1,892,179 | ) | (210,116 | ) | (3,672,886 | ) | |||||||||||
Net Increase | (34,811 | ) | $ | (634,708 | ) | 41,929 | $ | 722,924 |
65
Pacific Advisors Fund Inc.
Notes to Financial Statements (Unaudited)
June 30, 2007
Period ended June 30, 2007 | Year ended December 31, 2006 | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Growth Fund | |||||||||||||||||||
Class A | |||||||||||||||||||
Shares Sold | 33,600 | $ | 330,557 | 50,910 | $ | 450,036 | |||||||||||||
Reinvestment of Distributions | - | - | - | - | |||||||||||||||
33,600 | 330,557 | 50,910 | 450,036 | ||||||||||||||||
Shares Repurchased | (20,379 | ) | (199,002 | ) | (16,135 | ) | (143,840 | ) | |||||||||||
Net Increase | 13,221 | $ | 131,555 | 34,775 | $ | 306,196 | |||||||||||||
Class C | |||||||||||||||||||
Shares Sold | 6,750 | $ | 60,971 | 45,585 | $ | 380,686 | |||||||||||||
Reinvestment of Distributions | - | - | - | - | |||||||||||||||
6,750 | 60,971 | 45,585 | 380,686 | ||||||||||||||||
Shares Repurchased | (15,102 | ) | (139,683 | ) | 20,447 | (168,683 | ) | ||||||||||||
Net Increase | (8,352 | ) | $ | (78,712 | ) | 66,032 | $ | 212,003 | |||||||||||
Period ended June 30, 2007 | Year ended December 31, 2006 | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Multi-Cap Value Fund | |||||||||||||||||||
Class A | |||||||||||||||||||
Shares Sold | 71,835 | $ | 957,868 | 94,447 | $ | 1,192,505 | |||||||||||||
Reinvestment of Distributions | - | - | 25,908 | 334,372 | |||||||||||||||
71,835 | 957,868 | 120,355 | 1,526,877 | ||||||||||||||||
Shares Repurchased | (39,842 | ) | (519,047 | ) | (30,861 | ) | (393,913 | ) | |||||||||||
Net Increase | 31,993 | $ | 438,821 | 89,494 | $ | 1,132,964 | |||||||||||||
Class C | |||||||||||||||||||
Shares Sold | 30,547 | $ | 384,601 | 145,977 | $ | 1,794,665 | |||||||||||||
Reinvestment of Distributions | - | - | 65,114 | 809,018 | |||||||||||||||
30,547 | 384,601 | 211,091 | 2,603,683 | ||||||||||||||||
Shares Repurchased | (49,532 | ) | (620,307 | ) | (62,244 | ) | (765,063 | ) | |||||||||||
Net Increase | (18,985 | ) | $ | (235,706 | ) | 148,847 | $ | 1,838,620 |
66
Pacific Advisors Fund Inc.
Notes to Financial Statements (Unaudited)
June 30, 2007
Period ended June 30, 2007 | Year ended December 31, 2006 | ||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||
Small Cap Fund | |||||||||||||||||||
Class A | |||||||||||||||||||
Shares Sold | 1,060,996 | $ | 38,200,459 | 1,580,047 | $ | 48,824,782 | |||||||||||||
Reinvestment of Distributions | - | - | 56,688 | 1,950,232 | |||||||||||||||
1,060,996 | 38,200,459 | 1,636,735 | 50,775,014 | ||||||||||||||||
Shares Repurchased | (193,324 | ) | (6,865,921 | ) | (384,583 | ) | (11,931,692 | ) | |||||||||||
Net Increase (Decrease) | 867,672 | $ | 31,334,538 | 1,252,152 | $ | 38,843,322 | |||||||||||||
Class C | |||||||||||||||||||
Shares Sold | 378,321 | $ | 12,086,294 | 414,243 | $ | 11,574,250 | |||||||||||||
Reinvestment of Distributions | - | - | 20,925 | 622,493 | |||||||||||||||
378,321 | 12,086,294 | 435,168 | 12,196,743 | ||||||||||||||||
Shares Repurchased | (53,752 | ) | (1,704,163 | ) | (54,635 | ) | (1,490,834 | ) | |||||||||||
Net Increase | 324,569 | $ | 10,382,131 | 380,533 | $ | 10,705,909 | |||||||||||||
Class I | |||||||||||||||||||
Shares Sold | 26,991 | $ | 1,000,000 | 143 | $ | 5,000 | |||||||||||||
Reinvestment of Distributions | - | - | 5 | 174 | |||||||||||||||
26,991 | 1,000,000 | 148 | 5,174 | ||||||||||||||||
Shares Repurchased | - | - | - | - | |||||||||||||||
Net Increase | 26,991 | $ | 1,000,000 | 148 | $ | 5,174 |
Note 6. Bank Borrowings
Each Fund may borrow up to 15% of its total assets. Each Fund will not borrow money except temporarily from banks to facilitate redemption requests that might otherwise require untimely disposition of portfolio securities. No securities will be purchased for a Fund when borrowed money exceeds 5% of the Fund's total assets. Each Fund has the ability to borrow, from UMB Bank, n.a., on an unsecured basis, at 1.5% over the Federal Funds rate. As of June 30, 2007 the Small Cap Fund and Multi-Cap Value Fund were paying interest at 6.64% per annum on its outstanding borrowings. No compensating balances are required.
Note 7. New Accounting Pronouncement
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax position should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Funds' tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax Positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Management evaluated the implications of FIN 48 and determined it has no material impact on the financial statements.
67
Pacific Advisors Fund Inc.
Financial Highlights (Unaudited)
(For a share outstanding throughout the period)
Government Securities Fund | |||||||||||||||||||||||
Class A | |||||||||||||||||||||||
For the six months ended | For the year ended December 31, | ||||||||||||||||||||||
June 30, 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||
Per Share Operating Performance | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.24 | $ | 9.27 | $ | 9.51 | $ | 9.68 | $ | 10.20 | |||||||||||||
Income from investing operations | |||||||||||||||||||||||
Net investment income | 0.06 | 0.23 | 0.28 | 0.23 | 0.35 | ||||||||||||||||||
Net realized and unrealized gains (losses) on securities | 0.17 | 0.05 | (0.18 | ) | (0.20 | ) | (0.57 | ) | |||||||||||||||
Total from investment operations | 0.23 | 0.28 | 0.10 | 0.03 | (0.22 | ) | |||||||||||||||||
Less distributions | |||||||||||||||||||||||
From net investment income | (0.16 | ) | (0.31 | ) | (0.34 | ) | (0.20 | ) | (0.30 | ) | |||||||||||||
From net capital gains | - | - | - | - | - | ||||||||||||||||||
Total distributions | (0.16 | ) | (0.31 | ) | (0.34 | ) | (0.20 | ) | (0.30 | ) | |||||||||||||
Net asset value, end of period | $ | 9.31 | $ | 9.24 | $ | 9.27 | $ | 9.51 | $ | 9.68 | |||||||||||||
Total Investment Return (a) | 2.45 | %(b) | 3.14 | % | 1.08 | % | 0.26 | % | (2.20 | )% | |||||||||||||
Ratios/Supplemental Data | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 2,819 | $ | 2,467 | $ | 2,219 | $ | 2,488 | $ | 3,025 | |||||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||||||||
With expense reductions | 3.40 | %(c) | 2.70 | % | 2.68 | % | 1.89 | % | 2.88 | % | |||||||||||||
Without expense reductions | 1.94 | %(c) | 2.04 | % | 2.03 | % | 1.23 | % | 2.33 | % | |||||||||||||
Ratio of expenses to average net assets | |||||||||||||||||||||||
With expense reductions | 1.78 | %(c) | 2.51 | % | 2.26 | % | 1.81 | % | 1.65 | % | |||||||||||||
Without expense reductions | 3.24 | %(c) | 3.17 | % | 2.91 | % | 2.46 | % | 2.20 | % | |||||||||||||
Fund portfolio turnover rate | 13.00 | %(c) | 16.27 | % | 88.26 | % | 402.70 | % | 206.55 | % | |||||||||||||
Class C | |||||||||||||||||||||||
For the six months ended | For the year ended December 31, | ||||||||||||||||||||||
June 30, 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||
Per Share Operating Performance | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.23 | $ | 9.13 | $ | 9.27 | $ | 9.43 | $ | 9.95 | |||||||||||||
Income from investing operations | |||||||||||||||||||||||
Net investment income | 0.10 | 0.08 | 0.14 | 0.09 | 0.21 | ||||||||||||||||||
Net realized and unrealized gains (losses) on securities | 0.09 | 0.14 | (0.11 | ) | (0.14 | ) | (0.50 | ) | |||||||||||||||
Total from investment operations | 0.19 | 0.22 | 0.03 | (0.05 | ) | (0.29 | ) | ||||||||||||||||
Less distributions | |||||||||||||||||||||||
From net investment income | (0.11 | ) | (0.12 | ) | (0.17 | ) | (0.11 | ) | (0.23 | ) | |||||||||||||
From net capital gains | - | - | - | - | - | ||||||||||||||||||
Total distributions | (0.11 | ) | (0.12 | ) | (0.17 | ) | (0.11 | ) | (0.23 | ) | |||||||||||||
Net asset value, end of period | $ | 9.31 | $ | 9.23 | $ | 9.13 | $ | 9.27 | $ | 9.43 | |||||||||||||
Total Investment Return | 2.09 | %(b) | 2.47 | % | 0.28 | % | (0.50 | )% | (2.98 | )% | |||||||||||||
Ratios/Supplemental Data | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 1,500 | $ | 1,731 | $ | 3,780 | $ | 7,424 | $ | 11,423 | |||||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||||||||
With expense reductions | 2.63 | %(c) | 1.97 | % | 2.03 | % | 1.10 | % | 2.23 | % | |||||||||||||
Without expense reductions | 1.17 | %(c) | 1.32 | % | 1.38 | % | 0.45 | % | 1.67 | % | |||||||||||||
Ratio of expenses to average net assets | |||||||||||||||||||||||
With expense reductions | 2.53 | %(c) | 3.21 | % | 2.90 | % | 2.57 | % | 2.39 | % | |||||||||||||
Without expense reductions | 3.99 | %(c) | 3.86 | % | 3.55 | % | 3.22 | % | 2.95 | % | |||||||||||||
Fund portfolio turnover rate | 13.00 | %(c) | 16.27 | % | 88.26 | % | 402.70 | % | 206.55 | % |
(a) The Fund's maximum sales charge is not included in the total return computation
(b) Not annualized
(c) Annualized
See Accompanying Notes to Financial Statements
68
Pacific Advisors Fund Inc.
Financial Highlights (Unaudited)
(For a share outstanding throughout the period)
Income and Equity Fund | |||||||||||||||||||||||
Class A | |||||||||||||||||||||||
For the six months ended | For the year ended December 31, | ||||||||||||||||||||||
June 30, 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||
Per Share Operating Performance | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.74 | $ | 10.19 | $ | 10.46 | $ | 10.33 | $ | 9.91 | |||||||||||||
Income from investing operations | |||||||||||||||||||||||
Net investment income | 0.15 | 0.20 | 0.20 | 0.07 | 0.33 | ||||||||||||||||||
Net realized and unrealized gains (losses) on securities | 0.09 | 0.53 | (0.20 | ) | 0.29 | 0.31 | |||||||||||||||||
Total from investment operations | 0.24 | 0.73 | - | 0.36 | 0.64 | ||||||||||||||||||
Less distributions | |||||||||||||||||||||||
From net investment income | (0.14 | ) | (0.18 | ) | (0.26 | ) | (0.21 | ) | (0.20 | ) | |||||||||||||
From net capital gains | - | - | (0.01 | ) | (0.02 | ) | - | ||||||||||||||||
From return of capital | - | - | - | - | (0.02 | ) | |||||||||||||||||
Total distributions | (0.14 | ) | (0.18 | ) | (0.27 | ) | (0.23 | ) | (0.22 | ) | |||||||||||||
Net asset value, end of period | $ | 10.84 | $ | 10.74 | $ | 10.19 | $ | 10.46 | $ | 10.33 | |||||||||||||
Total Investment Return (a) | 2.25 | %(b) | 7.25 | % | 0.01 | % | 3.51 | % | 6.63 | % | |||||||||||||
Ratios/Supplemental Data | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 4,173 | $ | 3,973 | $ | 4,436 | $ | 3,611 | $ | 1,835 | |||||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||||||||
With expense reductions | 2.68 | %(c) | 1.74 | % | 2.33 | % | 2.18 | % | 2.92 | % | |||||||||||||
Without expense reductions | 1.99 | %(c) | 0.99 | % | 1.65 | % | 1.49 | % | 1.84 | % | |||||||||||||
Ratio of expenses to average net assets | |||||||||||||||||||||||
With expense reductions | 1.95 | %(c) | 2.06 | % | 1.93 | % | 1.94 | % | 1.85 | % | |||||||||||||
Without expense reductions | 2.65 | %(c) | 2.80 | % | 2.60 | % | 2.63 | % | 2.94 | % | |||||||||||||
Fund portfolio turnover rate | 35.52 | %(c) | 23.43 | % | 39.57 | % | 40.48 | % | 71.02 | % | |||||||||||||
Class C | |||||||||||||||||||||||
For the six months ended | For the year ended December 31, | ||||||||||||||||||||||
June 30, 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||
Per Share Operating Performance | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.31 | $ | 9.80 | $ | 10.02 | $ | 9.90 | $ | 9.60 | |||||||||||||
Income from investing operations | |||||||||||||||||||||||
Net investment income | 0.10 | 0.08 | 0.15 | 0.16 | 0.24 | ||||||||||||||||||
Net realized and unrealized gains (losses) on securities | 0.10 | 0.54 | (0.22 | ) | 0.11 | 0.32 | |||||||||||||||||
Total from investment operations | 0.20 | 0.62 | (0.07 | ) | 0.27 | 0.56 | |||||||||||||||||
Less distributions | |||||||||||||||||||||||
From net investment income | (0.10 | ) | (0.11 | ) | (0.14 | ) | (0.13 | ) | (0.22 | ) | |||||||||||||
From net capital gains | - | - | (0.01 | ) | (0.02 | ) | - | ||||||||||||||||
From return of capital | - | - | - | - | (0.02 | ) | |||||||||||||||||
Total distributions | (0.10 | ) | (0.11 | ) | (0.15 | ) | (0.15 | ) | (0.24 | ) | |||||||||||||
Net asset value, end of period | $ | 10.41 | $ | 10.31 | $ | 9.80 | $ | 10.02 | $ | 9.90 | |||||||||||||
Total Investment Return | 1.94 | %(b) | 6.40 | % | (0.67 | )% | 2.74 | % | 5.88 | % | |||||||||||||
Ratios/Supplemental Data | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 5,703 | $ | 5,743 | $ | 7,265 | $ | 7,738 | $ | 5,416 | |||||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||||||||
With expense reductions | 1.94 | %(c) | 1.04 | % | 1.57 | % | 1.38 | % | 2.10 | % | |||||||||||||
Without expense reductions | 1.24 | %(c) | 0.28 | % | 0.90 | % | 0.70 | % | 1.03 | % | |||||||||||||
Ratio of expenses to average net assets | |||||||||||||||||||||||
With expense reductions | 2.70 | %(c) | 2.81 | % | 2.70 | % | 2.69 | % | 2.60 | % | |||||||||||||
Without expense reductions | 3.40 | %(c) | 3.56 | % | 3.37 | % | 3.37 | % | 3.67 | % | |||||||||||||
Fund portfolio turnover rate | 35.52 | %(c) | 23.43 | % | 39.57 | % | 40.48 | % | 71.02 | % |
(a) The Fund's maximum sales charge is not included in the total return computation
(b) Not annualized
(c) Annualized
See Accompanying Notes to Financial Statements
69
Pacific Advisors Fund Inc.
Financial Highlights (Unaudited)
(For a share outstanding throughout the period)
Balanced Fund | |||||||||||||||||||||||
Class A | |||||||||||||||||||||||
For the six months ended | For the year ended December 31, | ||||||||||||||||||||||
June 30, 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||
Per Share Operating Performance | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 18.42 | $ | 17.39 | $ | 16.57 | $ | 15.88 | $ | 13.69 | |||||||||||||
Income from investing operations | |||||||||||||||||||||||
Net investment income | 0.22 | 0.07 | 0.16 | 0.12 | 0.21 | ||||||||||||||||||
Net realized and unrealized gains (losses) on securities | 1.09 | 1.40 | 0.82 | 0.75 | 2.34 | ||||||||||||||||||
Total from investment operations | 1.31 | 1.47 | 0.98 | 0.87 | 2.55 | ||||||||||||||||||
Less distributions | |||||||||||||||||||||||
From net investment income | - | - | (0.11 | ) | (0.13 | ) | (0.16 | ) | |||||||||||||||
From net capital gains | - | (0.44 | ) | (0.01 | ) | (0.05 | ) | (0.18 | ) | ||||||||||||||
From return of capital | - | - | (0.04 | ) | - | (0.02 | ) | ||||||||||||||||
Total distributions | - | (0.44 | ) | (0.16 | ) | (0.18 | ) | (0.36 | ) | ||||||||||||||
Net asset value, end of period | $ | 19.73 | $ | 18.42 | $ | 17.39 | $ | 16.57 | $ | 15.88 | |||||||||||||
Total Investment Return (a) | 7.11 | %(b) | 8.47 | % | 5.90 | % | 5.50 | % | 18.63 | % | |||||||||||||
Ratios/Supplemental Data | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 6,053 | $ | 6,787 | $ | 6,323 | $ | 5,863 | $ | 4,739 | |||||||||||||
Ratio of net investment income to average net assets | 0.98 | %(c) | 0.43 | % | 0.97 | % | 0.98 | % | 1.44 | % | |||||||||||||
Ratio of expenses to average net assets | 2.28 | %(c) | 2.54 | % | 2.53 | % | 2.67 | % | 2.86 | % | |||||||||||||
Fund portfolio turnover rate | 48.54 | %(c) | 15.50 | % | 25.47 | % | 39.60 | % | 58.73 | % | |||||||||||||
Class C | |||||||||||||||||||||||
For the six months ended | For the year ended December 31, | ||||||||||||||||||||||
June 30, 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||
Per Share Operating Performance | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 17.77 | $ | 16.92 | $ | 16.13 | $ | 15.49 | $ | 13.40 | |||||||||||||
Income from investing operations | |||||||||||||||||||||||
Net investment income | 0.02 | (0.06 | ) | 0.03 | 0.04 | 0.09 | |||||||||||||||||
Net realized and unrealized gains (losses) on securities | 1.17 | 1.35 | 0.80 | 0.68 | 2.26 | ||||||||||||||||||
Total from investment operations | 1.19 | 1.29 | 0.83 | 0.72 | 2.35 | ||||||||||||||||||
Less distributions | |||||||||||||||||||||||
From net investment income | - | - | (0.02 | ) | (0.03 | ) | (0.06 | ) | |||||||||||||||
From net capital gains | - | (0.44 | ) | (0.01 | ) | (0.05 | ) | (0.18 | ) | ||||||||||||||
From return of capital | - | - | (0.01 | ) | - | (0.02 | ) | ||||||||||||||||
Total distributions | - | (0.44 | ) | (0.04 | ) | (0.08 | ) | (0.26 | ) | ||||||||||||||
Net asset value, end of period | $ | 18.96 | $ | 17.77 | $ | 16.92 | $ | 16.13 | $ | 15.49 | |||||||||||||
Total Investment Return | 6.70 | %(b) | 7.65 | % | 5.16 | % | 4.62 | % | 17.58 | % | |||||||||||||
Ratios/Supplemental Data | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 37,324 | $ | 35,593 | $ | 33,185 | $ | 29,304 | $ | 23,353 | |||||||||||||
Ratio of net investment income to average net assets | 0.24 | %(c) | (0.33 | )% | 0.19 | % | 0.21 | % | 0.67 | % | |||||||||||||
Ratio of expenses to average net assets | 3.04 | %(c) | 3.30 | % | 3.30 | % | 3.44 | % | 3.66 | % | |||||||||||||
Fund portfolio turnover rate | 48.54 | %(c) | 15.50 | % | 25.47 | % | 39.60 | % | 58.73 | % |
(a) The Fund's maximum sales charge is not included in the total return computation
(b) Not annualized
(c) Annualized
See Accompanying Notes to Financial Statements
70
Pacific Advisors Fund Inc.
Financial Highlights (Unaudited)
(For a share outstanding throughout the period)
Growth Fund | |||||||||||||||||||||||
Class A | |||||||||||||||||||||||
For the six months ended | For the year ended December 31, | ||||||||||||||||||||||
June 30, 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||
Per Share Operating Performance | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.21 | $ | 8.54 | $ | 8.22 | $ | 7.14 | $ | 5.48 | |||||||||||||
Income from investing operations | |||||||||||||||||||||||
Net investment income (expense) | (0.08 | ) | (0.04 | ) | (0.01 | ) | 0.02 | (0.07 | ) | ||||||||||||||
Net realized and unrealized gains (losses) on securities | 1.17 | 0.71 | 0.33 | 1.06 | 1.73 | ||||||||||||||||||
Total from investment operations | 1.09 | 0.67 | 0.32 | 1.08 | 1.66 | ||||||||||||||||||
Less distributions | |||||||||||||||||||||||
From net investment income | - | - | - | - | - | ||||||||||||||||||
From net capital gains | - | - | - | - | - | ||||||||||||||||||
Total distributions | - | - | - | - | - | ||||||||||||||||||
Net asset value, end of period | $ | 10.30 | $ | 9.21 | $ | 8.54 | $ | 8.22 | $ | 7.14 | |||||||||||||
Total Investment Return (a) | 11.83 | %(b) | 7.85 | % | 3.89 | % | 15.13 | % | 30.29 | % | |||||||||||||
Ratios/Supplemental Data | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 2,486 | $ | 2,101 | $ | 1,650 | $ | 1,155 | $ | 669 | |||||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||||||||
With expense reductions | (1.21 | )%(c) | (1.11 | )% | (1.37 | )% | (1.51 | )% | (1.69 | )% | |||||||||||||
Without expense reductions | (1.78 | )%(c) | (2.14 | )% | (3.06 | )% | (4.98 | )% | (7.44 | )% | |||||||||||||
Ratio of expenses to average net assets | |||||||||||||||||||||||
With expense reductions | 2.65 | %(c) | 2.64 | % | 2.63 | % | 2.83 | % | 2.48 | % | |||||||||||||
Without expense reductions | 3.22 | %(c) | 3.68 | % | 4.32 | % | 6.30 | % | 8.23 | % | |||||||||||||
Fund portfolio turnover rate | 16.44 | %(c) | 22.80 | % | 30.54 | % | 12.96 | % | 34.58 | % | |||||||||||||
Class C | |||||||||||||||||||||||
For the six months ended | For the year ended December 31, | ||||||||||||||||||||||
June 30, 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||
Per Share Operating Performance | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 8.59 | $ | 8.02 | $ | 7.79 | $ | 6.83 | $ | 5.33 | |||||||||||||
Income from investing operations | |||||||||||||||||||||||
Net investment income (expense) | (0.11 | ) | (0.12 | ) | 0.37 | 0.22 | (0.16 | ) | |||||||||||||||
Net realized and unrealized gains (losses) on securities | 1.09 | 0.69 | (0.14 | ) | 0.74 | 1.66 | |||||||||||||||||
Total from investment operations | 0.98 | 0.57 | 0.23 | 0.96 | 1.50 | ||||||||||||||||||
Less distributions | |||||||||||||||||||||||
From net investment income | - | - | - | - | - | ||||||||||||||||||
From net capital gains | - | - | - | - | - | ||||||||||||||||||
Total distributions | - | - | - | - | - | ||||||||||||||||||
Net asset value, end of period | $ | 9.57 | $ | 8.59 | $ | 8.02 | $ | 7.79 | $ | 6.83 | |||||||||||||
Total Investment Return | 11.41 | %(b) | 7.11 | % | 2.95 | % | 14.06 | % | 28.14 | % | |||||||||||||
Ratios/Supplemental Data | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 1,988 | $ | 1,856 | $ | 1,532 | $ | 445 | $ | 251 | |||||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||||||||
With expense reductions | (1.96 | )%(c) | (1.87 | )% | (2.13 | )% | (2.27 | )% | (2.47 | )% | |||||||||||||
Without expense reductions | (2.53 | )%(c) | (2.91 | )% | (3.83 | )% | 5.61 | % | (8.18 | )% | |||||||||||||
Ratio of expenses to average net assets | |||||||||||||||||||||||
With expense reductions | 3.40 | %(c) | 3.40 | % | 3.40 | % | 3.54 | % | 3.25 | % | |||||||||||||
Without expense reductions | 3.97 | %(c) | 4.44 | % | 5.11 | % | 6.88 | % | 8.96 | % | |||||||||||||
Fund portfolio turnover rate | 16.44 | %(c) | 22.80 | % | 30.54 | % | 12.96 | % | 34.58 | % |
(a) The Fund's maximum sales charge is not included in the total return computation
(b) Not annualized
(c) Annualized
See Accompanying Notes to Financial Statements
71
Pacific Advisors Fund Inc.
Financial Highlights (Unaudited)
(For a share outstanding throughout the period)
Multi-Cap Value Fund | |||||||||||||||||||||||
Class A | |||||||||||||||||||||||
For the six months ended | For the year ended December 31, | ||||||||||||||||||||||
June 30, 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||
Per Share Operating Performance | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 12.77 | $ | 12.27 | $ | 11.77 | $ | 11.46 | $ | 7.95 | |||||||||||||
Income from investing operations | |||||||||||||||||||||||
Net investment income (expense) | (0.13 | ) | (0.09 | ) | (0.14 | ) | (0.03 | ) | (0.09 | ) | |||||||||||||
Net realized and unrealized gains (losses) on securities | 0.93 | 1.68 | 1.29 | 0.70 | 3.60 | ||||||||||||||||||
Total from investment operations | 0.80 | 1.59 | 1.15 | 0.67 | 3.51 | ||||||||||||||||||
Less distributions | |||||||||||||||||||||||
From net investment income | - | - | - | - | - | ||||||||||||||||||
From net capital gains | - | (1.09 | ) | (0.65 | ) | (0.36 | ) | - | |||||||||||||||
Total distributions | - | (1.09 | ) | (0.65 | ) | (0.36 | ) | - | |||||||||||||||
Net asset value, end of period | $ | 13.57 | $ | 12.77 | $ | 12.27 | $ | 11.77 | $ | 11.46 | |||||||||||||
Total Investment Return (a) | 6.26 | %(b) | 12.91 | % | 9.71 | % | 5.84 | % | 44.15 | % | |||||||||||||
Ratios/Supplemental Data | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 5,046 | $ | 4,341 | $ | 3,073 | $ | 2,313 | $ | 1,180 | |||||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||||||||
With expense reductions | (1.17 | )%(c) | (1.66 | )% | (1.70 | )% | (1.15 | )% | (1.67 | )% | |||||||||||||
Without expense reductions | (1.17 | )%(c) | (1.66 | )% | (1.73 | )% | (1.15 | )% | (3.14 | )% | |||||||||||||
Ratio of expenses to average net assets | |||||||||||||||||||||||
With expense reductions | 2.82 | %(c) | 3.02 | % | 3.05 | % | 2.63 | % | 2.49 | % | |||||||||||||
Without expense reductions | 2.82 | %(c) | 3.02 | % | 3.08 | % | 3.07 | % | 3.96 | % | |||||||||||||
Fund portfolio turnover rate | 91.20 | %(c) | 46.97 | % | 48.97 | % | 49.30 | % | 20.16 | % | |||||||||||||
Class C | |||||||||||||||||||||||
For the six months ended | For the year ended December 31, | ||||||||||||||||||||||
June 20, 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||
Per Share Operating Performance | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 12.28 | $ | 11.93 | $ | 11.54 | $ | 11.33 | $ | 7.91 | |||||||||||||
Income from investing operations | |||||||||||||||||||||||
Net investment income (expense) | (0.14 | ) | (0.18 | ) | (0.19 | ) | (0.10 | ) | 0.32 | ||||||||||||||
Net realized and unrealized gains (losses) on securities | 0.86 | 1.62 | 1.23 | 0.67 | 3.10 | ||||||||||||||||||
Total from investment operations | 0.72 | 1.44 | 1.04 | 0.57 | 3.42 | ||||||||||||||||||
Less distributions | |||||||||||||||||||||||
From net investment income | - | - | - | - | - | ||||||||||||||||||
From net capital gains | - | (1.09 | ) | (0.65 | ) | (0.36 | ) | - | |||||||||||||||
Total distributions | - | (1.09 | ) | (0.65 | ) | (0.36 | ) | - | |||||||||||||||
Net asset value, end of period | $ | 13.00 | $ | 12.28 | $ | 11.93 | $ | 11.54 | $ | 11.33 | |||||||||||||
Total Investment Return | 5.86 | %(b) | 12.02 | % | 8.94 | % | 5.02 | % | 43.24 | % | |||||||||||||
Ratios/Supplemental Data | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 10,292 | $ | 9,958 | $ | 7,894 | $ | 6,122 | $ | 3,537 | |||||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||||||||
With expense reductions | (1.89 | )%(c) | (2.43 | )% | (2.46 | )% | (1.94 | )% | (2.41 | )% | |||||||||||||
Without expense reductions | (1.89 | )%(c) | (2.43 | )% | (2.49 | )% | (2.37 | )% | (3.90 | )% | |||||||||||||
Ratio of expenses to average net assets | |||||||||||||||||||||||
With expense reductions | 3.56 | %(c) | 3.79 | % | 3.82 | % | 3.40 | % | 3.24 | % | |||||||||||||
Without expense reductions | 3.56 | %(c) | 3.79 | % | 3.84 | % | 3.83 | % | 4.74 | % | |||||||||||||
Fund portfolio turnover rate | 91.20 | %(c) | 46.97 | % | 48.97 | % | 49.30 | % | 20.16 | % |
(a) The Fund's maximum sales charge is not included in the total return computation
(b) Not annualized
(c) Annualized
See Accompanying Notes to Financial Statements
72
Pacific Advisors Fund Inc.
Financial Highlights (Unaudited)
(For a share outstanding throughout the period)
Small Cap Fund | |||||||||||||||||||||||
Class A | |||||||||||||||||||||||
For the six months ended | For the year ended December 31, | ||||||||||||||||||||||
June 30, 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||
Per Share Operating Performance | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 33.52 | $ | 25.73 | $ | 25.47 | $ | 18.77 | $ | 10.32 | |||||||||||||
Income from investing operations | |||||||||||||||||||||||
Net investment income (expense) | 3.05 | 2.71 | (1.15 | ) | 0.73 | (0.37 | ) | ||||||||||||||||
Net realized and unrealized gains (losses) on securities | 3.60 | 6.29 | 3.38 | 6.14 | 8.95 | ||||||||||||||||||
Total from investment operations | 6.65 | 9.00 | 2.23 | 6.87 | 8.58 | ||||||||||||||||||
Less distributions | |||||||||||||||||||||||
From net investment income | - | - | - | - | - | ||||||||||||||||||
From net capital gains | - | (1.21 | ) | (1.97 | ) | (0.17 | ) | (0.13 | ) | ||||||||||||||
Total distributions | - | (1.21 | ) | (1.97 | ) | (0.17 | ) | (0.13 | ) | ||||||||||||||
Net asset value, end of period | $ | 40.17 | $ | 33.52 | $ | 25.73 | $ | 25.47 | $ | 18.77 | |||||||||||||
Total Investment Return (a) | 19.84 | %(b) | 35.05 | % | 8.64 | % | 36.60 | % | 83.21 | % | |||||||||||||
Ratios/Supplemental Data | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 110,036 | $ | 62,735 | $ | 15,884 | $ | 17,376 | $ | 8,961 | |||||||||||||
Ratio of net investment income to average net assets | (1.97 | )%(c) | (2.40 | )% | (3.14 | )% | (3.08 | )% | (4.06 | )% | |||||||||||||
Ratio of expenses to average net assets | 2.37 | %(c) | 2.78 | % | 3.36 | % | 3.32 | % | 4.44 | % | |||||||||||||
Fund portfolio turnover rate | 14.04 | %(c) | 19.74 | % | 20.73 | % | 7.23 | % | 39.95 | % | |||||||||||||
Class C | |||||||||||||||||||||||
For the six months ended | For the year ended December 31, | ||||||||||||||||||||||
June 30, 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||
Per Share Operating Performance | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 30.00 | $ | 23.32 | $ | 23.44 | $ | 17.41 | $ | 9.65 | |||||||||||||
Income from investing operations | |||||||||||||||||||||||
Net investment income (expense) | 0.08 | 0.83 | (0.56 | ) | 0.66 | 0.04 | |||||||||||||||||
Net realized and unrealized gains (losses) on securities | 5.72 | 7.06 | 2.41 | 5.54 | 7.85 | ||||||||||||||||||
Total from investment operations | 5.80 | 7.89 | 1.85 | 6.20 | 7.89 | ||||||||||||||||||
Less distributions | |||||||||||||||||||||||
From net investment income | - | - | - | - | - | ||||||||||||||||||
From net capital gains | - | (1.21 | ) | (1.97 | ) | (0.17 | ) | (0.13 | ) | ||||||||||||||
Total distributions | - | (1.21 | ) | (1.97 | ) | (0.17 | ) | (0.13 | ) | ||||||||||||||
Net asset value, end of period | $ | 35.80 | $ | 30.00 | $ | 23.32 | $ | 23.44 | $ | 17.41 | |||||||||||||
Total Investment Return | 19.33 | %(b) | 33.91 | % | 7.76 | % | 35.62 | % | 81.83 | % | |||||||||||||
Ratios/Supplemental Data | |||||||||||||||||||||||
Net assets, end of year (000's) | $ | 32,314 | $ | 17,337 | $ | 4,602 | $ | 3,848 | $ | 1,274 | |||||||||||||
Ratio of net investment income to average net assets | (2.72 | )%(c) | (3.15 | )% | (3.95 | )% | (3.85 | )% | (4.88 | )% | |||||||||||||
Ratio of expenses to average net assets | 3.12 | %(c) | 3.54 | % | 4.19 | % | 4.10 | % | 5.26 | % | |||||||||||||
Fund portfolio turnover rate | 14.04 | %(c) | 19.74 | % | 20.73 | % | 7.23 | % | 39.95 | % |
(a) The Fund's maximum sales charge is not included in the total return computation
(b) Not annualized
(c) Annualized
See Accompanying Notes to Financial Statements
73
Pacific Advisors Fund Inc.
Financial Highlights (Unaudited)
(For a share outstanding throughout the period)
Small Cap Fund | |||||||||||
Class I | |||||||||||
For the six months ended June 30, 2007 | October 31, 2006(d) to December 31, 2006 | ||||||||||
Per Share Operating Performance | |||||||||||
Net asset value, beginning of period | $ | 36.13 | $ | 35.00 | |||||||
Income from investing operations | |||||||||||
Net investment income (expense) | (0.14 | ) | 0.45 | ||||||||
Net realized and unrealized gains (losses) on securities | 7.32 | 1.89 | |||||||||
Total from investment operations | 7.18 | 2.34 | |||||||||
Less distributions | |||||||||||
From net investment income | - | - | |||||||||
From net capital gains | - | (1.21 | ) | ||||||||
Total distributions | - | (1.21 | ) | ||||||||
Net asset value, end of period | $ | 43.31 | $ | 36.13 | |||||||
Total Investment Return | 19.87 | %(b) | 6.74 | %(b) | |||||||
Ratios/Supplemental Data | |||||||||||
Net assets, end of year (000's) | $ | 1,175 | $ | 5 | |||||||
Ratio of net investment income to average net assets | 1.74 | %(c) | (2.48 | )%(c) | |||||||
Ratio of expenses to average net assets | 2.11 | %(c) | 2.74 | %(c) | |||||||
Fund portfolio turnover rate | 14.04 | %(c) | 19.74 | %(c) |
(b) Not annualized
(c) Annualized
(d) Commencement of operations
See Accompanying Notes to Financial Statements
74
Pacific Advisors Fund Inc.
Directors and Officers
Name, Address and Age | Position(s) Held with the Company | Term of Offices and Length of Time Served | Principal Occupations During Past 5 Years | Number of Portfolios in Fund Complex Overseen by Trustee | Other Directorships Held by Trustee | ||||||||||||||||||
Victoria L. Breen (56) 603 West Ojai Avenue Ojai, CA 93023 | Director and Assistant Secretary | Since 1992 | 1992 - Present: Assistant Secretary and Director Pacific Global Investment Management Company 1994 - Present: Agent, Transamerica Life Companies; Registered Principal, Transamerica Financial Advisors, Inc. 1986 - Present: President, Derby & Derby, Inc. (Financial Services Company) | 6 Pacific Advisors Mutual Funds | None | ||||||||||||||||||
Thomas M. Brinker (73) 1 North Ormond Avenue Havertown, PA 19083 | Director | Since 1992 | 1970 - Present: Registered Representative, Transamerica Financial Advisors, Inc. 1970 - Present: President, Fringe Benefits, Inc. and Financial Foresight, Ltd. d/b/a The Brinker Organization (Financial Services Companies) | 6 Pacific Advisors Mutual Funds | None | ||||||||||||||||||
L. Michael Haller (63) 5924 Colodny Agoura, CA 91301 | Director | Since 1992 | 2004 - Present: Consultant 2002 - 2003: Executive Vice President, Sammy Studios, Inc. (Entertainment Company) | 6 Pacific Advisors Mutual Funds | None | ||||||||||||||||||
Thomas H. Hanson (57) 101 N. Brand Blvd. Suite 1950 Glendale, CA 91203 | Vice President | Since 1992 | 1992 - Present: Executive Vice President and Director, Pacific Global Investment Management Company; President and Director; Pacific Global Fund Distributors, Inc.; Director, Pacific Global Investor Services, Inc. 2001 - Present: Vice President, Pacific Global Investor Services, Inc. 1993 - Present: Owner, Director, Chairman, President, and CEO of TriVest Capital Management, Inc. 1992 - 2006: Secretary, Pacific Global Fund Inc. d/b/a Pacific Advisors Fund Inc. | 6 Pacific Advisors Mutual Funds | None | ||||||||||||||||||
75
Pacific Advisors Fund Inc.
Directors and Officers
Name, Address and Age | Position(s) Held with the Company | Term of Offices and Length of Time Served | Principal Occupations During Past 5 Years | Number of Portfolios in Fund Complex Overseen by Trustee | Other Directorships Held by Trustee | ||||||||||||||||||
Catherine L. Henning (29) 101 N. Brand Blvd. Suite 1950 Glendale, CA 91203 | Secretary | Since 2006 | 2007 - Present: Vice President, Pacific Global Investment Management Company 2006 - Present: Secretary, Pacific Global Fund Distributors, Inc. and Pacific Global Investor Services, Inc. 2004 - Present: Secretary, Pacific Global Investment Management Company; Chief Compliance Officer, Pacific Global Fund Distributors, Inc. 2001 - Present: Director of Private Client Services, Pacific Global Investment Management Company 2004 - 2006: Assistant Secretary, Pacific Global Fund Inc. d/b/a Pacific Advisors Fund Inc. 2002 - 2006: Assistant Secretary, Pacific Global Fund Distributo rs, Inc. and Pacific Global Investor Services, Inc. 2002 - 2004: Assistant Secretary, Pacific Global Investment Management Company | 6 Pacific Advisors Mutual Funds | None | ||||||||||||||||||
76
Pacific Advisors Fund Inc.
Directors and Officers
Name, Address and Age | Position(s) Held with the Company | Term of Offices and Length of Time Served | Principal Occupations During Past 5 Years | Number of Portfolios in Fund Complex Overseen by Trustee | Other Directorships Held by Trustee | ||||||||||||||||||
George A. Henning (60) 101 N. Brand Blvd. Suite 1950 Glendale, CA 91203 | President and Chairman | Since 1992 | 1991 - Present: Chairman, President, and Director, Pacific Global Investment Management Company; Chairman and Director, Pacific Global Fund Distributors, Inc.; Chairman and Director, Pacific Global Investor Services, Inc. 1992 - 2006: Secretary, Pacific Global Fund Distributors, Inc. and Pacific Global Investor Services, Inc. | 6 Pacific Advisors Mutual Funds | None | ||||||||||||||||||
Barbara A. Kelley (54) 101 N. Brand Blvd. Suite 1950 Glendale, CA 91203 | Vice President, Chief Compliance Officer and Treasurer | Since 2001 | 2004 - Present: Chief Compliance Officer, Pacific Advisors Fund Inc. and Pacific Global Investment Management Company 2001 - Present: Executive Vice President, Pacific Global Investment Management Company; Director, Pacific Global Fund Distributors, Inc.; President, Pacific Global Investor Services, Inc. 1999 - Present: Director, Pacific Global Investment Management Company 2001 - 2007: Treasurer, Pacific Global Investment Management Company, Pacific Global Fund Distributors, Inc. and Pacific Global Investor Services, Inc. | 6 Pacific Advisors Mutual Funds | None | ||||||||||||||||||
77
Pacific Advisors Fund Inc.
Directors and Officers
Name, Address and Age | Position(s) Held with the Company | Term of Offices and Length of Time Served | Principal Occupations During Past 5 Years | Number of Portfolios in Fund Complex Overseen by Trustee | Other Directorships Held by Trustee | ||||||||||||||||||
Takashi Makinodan, PhD (82) 1506 S. Bentley Avenue PH #5 Los Angeles, CA 90025 | Director | Since 1995 | 1992 - Present: Director, Medical Treatment Effectiveness Program (MEDTEP), Center on Asian and Pacific Islanders 1991 - Present: Associate Director of Research, Geriatric Research Education Clinic Center, VA Medical Center | 6 Pacific Advisors Mutual Funds | None | ||||||||||||||||||
Gerald E. Miller (77) 5262 Bridgetown Place Westlake Village, CA 91362 | Director | Since 1992 | 1992 - Present: Retired | 6 Pacific Advisors Mutual Funds | None | ||||||||||||||||||
Louise K. Taylor, PhD (60) 325 East Huntington Dr. Monrovia, CA 91016 | Director | Since 1992 | 1991 - Present: Superintendent, Monrovia Unified School District | 6 Pacific Advisors Mutual Funds | None | ||||||||||||||||||
Jingjing Yan (33) 101 N. Brand Blvd. Suite 1950 Glendale, CA 91203 | Assistant Treasurer | Since 2005 | 2007 - Present: Treasurer, Pacific Global Investment Management Company, Pacific Global Fund Distributors, Inc. and Pacific Global Investor Services, Inc. 2001 - Present: Fund Accounting Manager, Pacific Global Investor Services, Inc. 2005 - 2007: Assistant Treasurer, Pacific Global Investment Management Company, Pacific Global Fund Distributors, Inc. and Pacific Global Investor Services, Inc. | 6 Pacific Advisors Mutual Funds | None | ||||||||||||||||||
Each director is elected to serve until the next annual shareholders meeting and until his or her successor is elected or appointed. The Company does not hold regular annual shareholders meetings to elect Directors. Vacancies on the Board can be filled by the action of a majority of the Directors, provided that at least two-thirds of the Directors have been elected by the shareholders. Certain Directors are considered "interested persons" of the Company as defined in the 1940 Act. All directors oversee all six Funds of the Company.
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Pacific Advisors Fund Inc.
Directors
George A. Henning, Chairman
Victoria L. Breen
Thomas M. Brinker
L. Michael Haller, III
Takashi Makinodan, Ph.D.
Gerald E. Miller
Louise K. Taylor, Ph.D.
Officers
George A. Henning, President
Thomas H. Hanson, Vice President
Catherine L. Henning, Secretary
Victoria L. Breen, Assistant Secretary
Barbara A. Kelley, Treasurer
Jingjing Yan, Assistant Treasurer
Investment Manager
Pacific Global Investment Management Company
101 North Brand Blvd., Suite 1950
Glendale, California 91203
Transfer Agent and Administrator
Pacific Global Investor Services, Inc.
101 North Brand Blvd., Suite 1950
Glendale, California 91203
Distributor
Pacific Global Fund Distributors, Inc.
101 North Brand Blvd., Suite 1950
Glendale, California 91203
(800) 989-6693
Availability of Quarterly Portfolio Schedule
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q are available on the SEC's Web site at http://www.sec.gov. The Fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information about the operation of the Public Reference Room may be obtained by calling the SEC at (800) SEC-0330.
The Fund's complete schedule of portfolio holdings for each fiscal quarter is posted on the Fund's Web site at www.PacificAdvisorsFund.com and is available without charge, upon request by calling (800) 989-6693. Documents will be sent within 3 business days of receipt of your request.
Availability of Proxy Voting Policies and Procedures and Proxy Voting Record
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, upon request by calling (800) 989-6693. Documents will be sent within 3 business days of receipt of your request. This information is also available on the SEC's Web site at http://www.sec.gov.
Pacific Global Fund Distributors, Inc.
101 North Brand Blvd., Suite 1950
Glendale, California 91203
Item 2. Code of Ethics
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 as Registrant is not a listed issuer as defined in Rule 10A-3 under the Securities Exchange Act of 1934.
Item 6. Schedule of Investments
Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable to open-end investment companies.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not applicable to open-end investment companies.
Item 9. Purchases of Equity Securities by Managers of Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable to open-end investment companies.
Item 10. Submission of Matters to a Vote of Security Holders
No material changes have been made.
Item 11. Controls and Procedures.
(a) Based upon their evaluation of Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) as conducted within 90 days of the filing date of this Form N-CSR, Registrant’s principal executive officer and principal financial officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by Registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.
(b) There were no changes in Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, Registrant’s internal control over financial reporting.
Item 12. Exhibits
(a)(1) Not applicable.
(a)(2) Certifications required by Item 12(a) of Form N-CSR and Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
(a)(3) Not applicable.
(b) Certification required by Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Pacific Global Fund Inc. d/b/a Pacific Advisors Fund Inc.
By: | /s/ George A. Henning |
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| George A. Henning | |
| Chairman, Pacific Advisors Fund Inc. | |
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Date: | September 7, 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 Registrant and in the capacities and on the dates indicated.
By: | /s/ George A. Henning |
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| George A. Henning | ||
| Chief Executive Officer | ||
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Date: | September 7, 2007 | ||
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By: | /s/ Barbara A. Kelley |
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| Barbara A. Kelley | ||
| Chief Financial Officer | ||
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Date: | September 7, 2007 | ||