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: 811-0773
--------
The Purisima Funds
(Exact name of registrant as specified in charter)
13100 Skyline Blvd.
Woodside, California 94062
(Address of principal executive offices)
(Name and address of agent for service)
(650) 851-3334 Registrant's telephone number, including area code:
Date of fiscal year end: August 31, 2003
---------------
Date of reporting period: February 28, 2003
-----------------
ITEM 1. REPORT TO STOCKHOLDERS
Purisima Funds
Semi-Annual Report (unaudited)
February 28, 2003
The Purisima Total Return Fund
The Purisima Pure American Fund
The Purisima Pure Foreign Fund
Table of Contents
The Purisima Fund Family 2
A Letter to Our Shareholders 4
Schedule of Investments 8
Statements of Assets and Liabilities 17
Statements of Operations 18
Statement of Changes in Net Assets 19
Financial Highlights 22
Notes to Financial Statements 25
Other Information 30
Please see the Funds' Privacy Notice on page 32
The Purisima Fund Family
Fisher Investments manages over $11 billion for large institutions and
high-net-worth individuals. We built our business by offering personal service,
a history of performance and generally low fees to large investors. We create
global, domestic, and foreign portfolios for our clients. Yet few investors have
the over $500,000 necessary to build a customized portfolio of stocks. That's
why we created the Purisima Funds.
These mutual funds allow us to pool the money of many investors together
and buy enough securities to create a diversified portfolio, while also having
sufficient assets under management to keep costs relatively low. Our funds are
made up of what we believe are three optimal portfolios: global, domestic, and
foreign. Purisima Pure American is composed of the domestic securities we
believe will most likely appreciate. Purisima Pure Foreign contains those
foreign securities we think are the best investments. Purisima Total Return has
a portfolio that contains both foreign and domestic securities.
Total Return. This fund combines our top U.S. and foreign security picks in
one mutual fund. We believe the Purisima Total Return Fund is the single best
way for small investors to manage their money. Through global diversification
targeted at securities we anticipate will outpace the market, it strives for a
high total return, while seeking to achieve a reduced level of risk, as many
large investors have sought from Fisher Investments.
Pure American. Many investors, large and small, simply don't want to own
foreign stocks. They wish to avoid the political and economic issues of foreign
countries or the currency risks involved in overseas investments. Fisher
Investments satisfies the desire for a handpicked U.S. only portfolio by
offering the Purisima Pure American Fund, which invests only in American
securities and seeks to consistently beat the S&P 500 stock index.
Pure Foreign. Some investors like to pick their own U.S. stocks but don't
feel comfortable selecting foreign ones. Yet, they want the advantages of global
diversification that requires owning foreign securities. Pure Foreign allows
them to obtain this foreign diversification, which may help lower the volatility
of their entire investment portfolio. The Purisima Pure Foreign Fund owns the
foreign securities Fisher Investments believes will most likely appreciate and,
by combining it with a U.S. portfolio, investors can create a complete global
portfolio.
A Letter to Our Shareholders
Welcome to the semi-annual report for the Purisima Funds for the six-month
period ended February 28, 2003. The Funds remained fully invested in equities
throughout the period. What appeared to be the beginning of a new bull market in
early October 2002 was derailed in the last months of the reporting period by
heightened risk aversion tied to the impending conflict in Iraq. As geopolitical
risks subside, we believe demand for equities should rise.
The sharp sell-offs in July and September seemingly created a double bottom
in the already lengthy bear market. Although economic recovery began in the
first half of 2002, expectations of a double-dip recession permeated financial
media and investor sentiment in the first half of the period. Stocks mounted a
sharp rally beginning in early October that reflected renewed optimism and saw
the most battered groups of the bear market perform the best. The rally
culminated in December 2002 as the solidarity of the UN Security Council came
into question regarding a military solution to Saddam Hussein's Iraqi regime.
The economy showed marked signs of improvement in the fourth quarter of
2002, countering the dour views of pundits and economists alike. However, the
degree to which world opinion soured leading up to the war was unexpected. In
concert with the threat of war, investors were barraged by financial media
claims that the bear market remains intact and any rally should be treated as a
selling opportunity. We strongly disagree. The funds are positioned to capture
our increasingly optimistic outlook for global equities in 2003.
The asset allocation and style decisions remained constant throughout the
period. The weighted average market cap of the holdings is smaller than that of
the respective benchmarks consistent with our belief that small caps lead in new
bull markets as a liquidity surge provides disproportional benefits across the
size spectrum. We also maintain a modest value slant in the portfolios, hoping
to capitalize on steep global yield curves that beget favorable lending
conditions across the globe. The large return spread achieved by value stocks
over growth narrowed in the period, but the trend may resume in 2003, only on a
lesser scale relative to the previous two years.
The Consumer Discretionary and Materials sectors remain significantly
overweight in the Funds relative to their benchmarks as early cycle stocks
historically lead ahead of an economic recovery. We moved to a more favorable
outlook for higher quality technology stocks as well. A number of technology
businesses featuring healthy financials and dominant market positions should be
able to leverage their increased market shares as the technology economy
rebounds from depressed levels.
All three of the Funds maintain active counter-strategies in case we are
wrong on our core economic and market assumptions to control risk relative to
benchmark. The Funds hold large cap and growth companies in meaningful weights,
as well as positions in more defensive sectors like Health Care, Consumer
Staples and Utilities.
The Total Return Fund is overweight to U.S. stocks, consistent with our
belief that the U.S. economy has the most favorable underpinnings to drive a
global recovery in 2003. With promising fundamentals, we feel foreign bourses
are likely to rise materially on an absolute basis, but not quite as much
relative to the U.S. Pure American's long equity positions are limited to U.S.
companies, and Pure Foreign's are limited to foreign companies only.
Outlook
There are several reasons we expect outsized gains over the next six
months, possibly skewed towards the latter half of the period. The U.S. is in
the 3rd year of the Presidential Cycle, historically the strongest for stocks.
Monetary conditions are accommodative resulting in declining interest rates, and
proposed U.S. fiscal policy offers additional stimulus. In our opinion the
geopolitical risk associated with war in Iraq should subside as the conflict is
resolved favorably and more quickly than expected.
Investors continue to miss other important developments. Underfunded
corporate and public pensions in the U.S. and U.K. have been widely publicized
during the bear market. While media attention is focused on the plans' potential
drag on earnings, almost no mention exists of the billions in mandatory
contributions that will flow into financial assets to offset liabilities created
by the bear market. Our initial $100 billion estimate of cash contributions for
2003 now appears conservative. A large portion of this cash may act as a direct
injection of demand for equities.
We believe equity valuations are attractive relative to bond yields.
Corporate earnings continue to strengthen and appear poised to grow throughout
2003. The earnings yield on the S&P 500 is extremely attractive relative to long
term U.S. Treasury yields. Although the historic spread may not be a useful
timing tool, it paints a striking backdrop for big potential stock market gains.
The prolonged bottom of the bear market has been a challenging, volatile
period. It has, however, planted the seeds for a new bull market evidenced by
decreasing risk aversion on the part of investors. Each of the Funds is poised
to participate in the sharp equity rebound we believe is close at hand. Other
lengthy bear markets have set a precedent of sharp, sizeable gains coming soon
after the bottom and possibly continuing for prolonged periods. We see no reason
the coming bull market should be any different.
As before, if we were to see anything new that is big and bad and largely
ignored by others, we would take appropriate defensive action. Current
probabilities make this outcome unlikely over the medium term, and we look
forward to a prosperous period for equity investors.
Thank you for your continued interest and support.
Sincerely,
Kenneth L. Fisher
Chairman and Chief Investment Officer
Fisher Investments Inc.
Opinions expressed above are those of Kenneth L. Fisher and are subject to
change, are not guaranteed and should not be considered recommendations to buy
or sell any security.
Past performance does not guarantee future results. The investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Fund holdings and sector
allocations are subject to change and are not recommendations to buy or sell any
security. The S&P 500 Index is a broad based unmanaged index of 500 stocks,
which is widely recognized as representative of the equity market in general.
One cannot invest directly in an index.
Mutual fund investing involves risk. Principal loss is possible. Foreign
investing involves special risks, including greater volatility and political,
economic and currency risks and differences in accounting methods.
This material must be preceded or accompanied by a prospectus. Please read it
carefully before you invest or send money.
Quasar Distributors, LLC, Distributor. 04/03
Purisima Total Return Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS at February 28, 2003 (Unaudited)
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS: 98.3%
Aerospace/Defense Equipment: 2.3%
39,100 Lockheed Martin Corp. $1,787,652
41,100 United Technologies Corp. 2,407,638
--------------
4,195,290
--------------
Automotive: 3.5%
54,800 DaimlerChrysler AG 1,675,236
225,100 Delphi Corp. 1,740,023
187,000 Nissan Motor Co. Ltd. - ADR 2,829,310
--------------
6,244,569
--------------
Banking: 13.8%
340,100 Banco Santander Central - ADR 2,156,234
78,700 Barclays Plc - ADR 1,810,887
29,500 Comerica, Inc. 1,208,910
130,000 Credit Suisse Group - ADR 2,418,000
45,000 HSBC Holdings Plc - ADR 2,414,700
352,500 Mitsubishi Tokyo Finance - ADR 1,561,575
29,300 National Australia Bank Ltd. - ADR 2,592,757
66,775 National City Corp. 1,844,325
126,996 San Paolo - IMI SpA - ADR 1,756,355
28,100 SunTrust Banks, Inc. 1,580,625
38,800 UBS AG 1,617,960
118,200 Washington Mutual, Inc. 4,081,446
--------------
25,043,774
--------------
Chemicals: 1.0%
66,225 Rohm & Haas Co. 1,890,061
--------------
Computers: 4.4%
106,200 Dell Computer Corp.* 2,863,152
110,400 Electronic Data Systems Corp. 1,718,928
446,600 EMC Corp.* 3,300,374
--------------
7,882,454
--------------
Diversified Metal & Mining: 1.9%
41,400 Rio Tinto Plc - ADR 3,365,820
--------------
Electrical Equipment: 2.8%
51,700 General Electric Co. 1,243,385
51,800 Hitachi Ltd. - ADR 2,174,046
182,700 Matsushita Electric Industries Co., Ltd. - 1,626,030
ADR
--------------
5,043,461
--------------
Shares Value
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Financial Services: 2.9%
92,700 ING Groep N.V. - ADR $1,244,961
71,600 Lehman Brothers Holdings, Inc. 3,964,492
--------------
5,209,453
--------------
Foods: 3.0%
135,800 Sara Lee Corp. 2,688,840
47,525 Unilever N.V. - ADR 2,693,717
--------------
5,382,557
--------------
Household Audio & Video Equipment: 0.9%
42,600 Sony Corp. - ADR 1,617,522
--------------
Household Products: 2.3%
47,700 Kimberly-Clark Corp. 2,186,091
24,600 Procter & Gamble Co. 2,013,756
--------------
4,199,847
--------------
Insurance: 5.8%
115,600 Allstate Corp. 3,656,428
32,544 American International Group, Inc. 1,604,094
115,300 Axa S.A. - ADR 1,396,283
27,700 CIGNA Corp. 1,190,269
64,800 Marsh & McLennan Co. 2,637,360
--------------
10,484,434
--------------
Machinery: 1.8%
70,600 Caterpillar, Inc. 3,318,200
--------------
Media: 3.4%
119,300 News Corporation Ltd. - ADR 2,982,500
181,900 Walt Disney Co. 3,103,214
--------------
6,085,714
--------------
Medical Instruments: 1.4%
73,200 Guidant Corp.* 2,617,632
--------------
Miscellaneous Manufacturing: 3.7%
130,200 Alcoa, Inc. 2,669,100
40,200 Illinois Tool Works 2,394,714
43,100 Siemens AG - ADR 1,712,363
--------------
6,776,177
--------------
Shares Value
- -------------------------------------------------------------------------------
Oil & Gas: 9.5%
67,000 Anadarko Petroleum Corp. $3,087,360
108,900 Baker Hughes, Inc. 3,378,078
69,100 BASF AG - ADR 2,527,678
58,100 ConocoPhillips 2,945,670
49,000 Royal Dutch Petroleum Co. - ADR 1,943,830
49,357 Total Fina S.A. - ADR 3,245,223
--------------
17,127,839
--------------
Paper & Forest Products: 1.2%
62,000 International Paper Co. 2,171,860
--------------
Pharmaceuticals: 7.1%
75,000 Astrazeneca Plc - ADR 2,409,000
43,476 Aventis - ADR 1,959,029
77,400 GlaxoSmithKline Plc - ADR 2,712,870
49,100 Johnson & Johnson 2,575,295
29,200 Merck & Co., Inc. 1,540,300
44,400 Novartis AG - ADR 1,624,152
--------------
12,820,646
--------------
Photography: 1.6%
89,200 Fuji Photo Film - ADR 2,815,152
--------------
Retail: 4.0%
81,900 Albertson's, Inc. 1,542,177
76,600 Costco Wholesale Corp.* 2,337,832
57,200 Lowe's Companies, Inc. 2,247,960
51,300 Sears, Roebuck & Co. 1,117,314
--------------
7,245,283
--------------
Semiconductors: 4.2%
147,500 Intel Corp. 2,544,375
111,200 KLA-Tencor Corp.* 3,975,400
141,500 Micron Technology, Inc.* 1,130,585
--------------
7,650,360
--------------
Software: 4.8%
72,400 First Data Corp. 2,508,660
89,200 Microsoft Corp.* 2,114,040
180,000 Oracle Corp.* 2,152,800
217,000 Siebel Systems, Inc.* 1,872,710
--------------
8,648,210
--------------
Shares Value
- -------------------------------------------------------------------------------
Telecommunications: 6.3%
67,800 Alltel Corp. $2,943,876
92,250 Bellsouth Corp. 1,999,058
77,600 BT Group Plc - ADR 1,982,680
39,700 Telecom Italia SpA - ADR 2,735,330
62,316 Telefonica, S.A. - ADR* 1,799,059
--------------
11,460,003
--------------
Telecommunications Equipment: 0.9%
121,100 Nokia Corp. - ADR 1,602,153
--------------
Transportation: 1.2%
43,900 Fedex Corp. 2,256,460
--------------
Utilities: 2.6%
69,900 Duke Energy Corp. 944,349
36,500 E. ON AG - ADR 1,560,375
75,700 Enel SpA - ADR 2,243,748
--------------
4,748,472
--------------
TOTAL COMMON STOCKS
(cost $223,372,698) 177,903,403
--------------
SHORT-TERM INVESTMENT: 1.6%
2,854,865 Federated Cash Trust Treasury Money Market 2,854,865
--------------
(cost $2,854,865)
TOTAL INVESTMENTS IN SECURITIES
(cost $226,227,563): 99.9% 180,758,268
Other Assets less Liabilities: 0.1% 165,965
--------------
NET ASSETS: 100.0% $180,924,233
==============
ADR - American depositary receipt.
* Non-income producing security.
See accompanying Notes to Financial Statements.
PURISIMA PURE AMERICAN FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS at February 28, 2003 (Unaudited)
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS: 99.3%
Aerospace/Defense Equipment: 3.4%
300 Lockheed Martin Corp. $13,716
650 Northrop Grumman Corp. 56,355
---------------
70,071
---------------
Automotive: 2.3%
6,100 Delphi Corp. 47,153
---------------
Banking: 8.7%
1,225 Bank of America Corp. 84,819
1,000 Comerica, Inc. 40,980
1,900 National City Corp. 52,478
---------------
178,277
---------------
Consumer Products: 2.9%
775 Coca-Cola Co. (The) 31,170
600 Nike, Inc. - Class B 27,822
---------------
58,992
---------------
Chemicals: 2.4%
1,700 Rohm & Haas Co. 48,518
---------------
Computer Components & Software: 4.3%
2,575 Cisco Systems, Inc.* 35,998
1,500 Microsoft Corp.* 35,550
1,900 Siebel Systems, Inc.* 16,397
---------------
87,945
---------------
---------------
Computers: 7.7%
1,200 Dell Computer Corp.* 32,352
1,250 Electronic Data Systems Corp. 19,462
4,300 EMC Corp.* 31,777
500 IBM Corp. 38,975
10,200 Sun Microsystems, Inc.* 35,088
---------------
157,654
---------------
---------------
Electrical Equipment: 4.5%
1,600 General Electric Co. 38,480
700 Johnson Controls, Inc. 54,572
---------------
---------------
93,052
---------------
Financial Services: 5.6%
1,266 Citigroup, Inc. $42,208
750 Fannie Mae 48,075
450 Lehman Brothers Holdings, Inc. 24,916
---------------
115,199
---------------
Foods: 2.1%
2,200 Sara Lee Corp. 43,560
---------------
Health Care Equipment: 2.1%
950 Medtronic, Inc. 42,465
---------------
Household Products: 1.9%
475 Procter & Gamble Co. 38,883
---------------
Insurance: 3.9%
487 American International Group 24,004
27 Berkshire Hathaway, Inc. - Class 55,755
B* ---------------
79,759
---------------
Machinery: 2.0%
850 Caterpillar, Inc. 39,950
---------------
Media: 2.0%
2,400 Walt Disney Co. 40,944
---------------
Miscellaneous Manufacturer: 2.9%
475 3M Co. 59,551
---------------
Oil & Gas: 7.1%
850 ChevronTexaco Corp. 54,544
1,200 Exxon Mobil Corp. 40,824
1,000 ConocoPhillips 50,700
---------------
146,068
---------------
Paper & Forest Products: 2.0%
1,200 International Paper Co. 42,036
---------------
Pharmaceuticals: 9.3%
1,100 Bristol-Myers Squibb Co. 25,630
750 Johnson & Johnson 39,338
750 Lilly (Eli) & Co. 42,420
750 Merck & Co., Inc. 39,563
925 Schering-Plough Corp. 16,669
750 Wyeth 26,438
---------------
190,058
---------------
Restaurants: 1.4%
2,100 McDonald's Corp. $28,581
---------------
Retail: 6.1%
1,150 Albertson's, Inc. 21,655
700 Costco Wholesale Corp.* 21,364
1,000 Sears, Roebuck & Co. 21,780
1,275 Wal-Mart Stores, Inc. 61,277
---------------
126,076
---------------
Semi-conductors: 3.8%
2,000 Intel Corp. 34,500
700 KLA-Tencor Corp.* 25,025
2,300 Micron Technology, Inc.* 18,377
---------------
77,902
---------------
Telecommunications: 1.4%
1,350 BellSouth Corp. 29,255
---------------
Tobacco Products: 1.4%
750 Altria Group, Inc. 28,987
---------------
Transportation: 5.6%
2,200 Burlington Northern Santa Fe Corp. 55,000
1,150 Fedex Corp. 59,110
---------------
114,110
---------------
Utilities: 2.5%
1,800 Southern Co. 50,778
---------------
TOTAL COMMON STOCKS
(cost $2,627,076) 2,035,824
---------------
SHORT-TERM INVESTMENT: 0.4%
Federated Cash Trust Treasury Money Market
8,391 (cost $8,391) 8,391
---------------
TOTAL INVESTMENTS IN SECURITIES
(cost $2,635,466): 99.7% 2,044,215
Other Assets less Liabilities: 0.3% 6,838
---------------
NET ASSETS: 100.0% $2,051,053
===============
* Non-income producing security.
See accompanying Notes to Financial Statements.
Purisima Pure Foreign Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS at February 28, 2003 (Unaudited)
- --------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS: 99.4%
Australia: 3.7%
5,800 BHP Billiton Ltd. - ADR $65,134
425 National Australia Bank Ltd. - ADR 37,608
2,000 News Corp. Ltd. - ADR 50,000
-----------------
152,742
-----------------
Denmark: 1.1%
900 Novo-Nordisk A/S - ADR 25,506
-----------------
Finland: 1.2%
2,100 Nokia Corp. - ADR 27,783
-----------------
France: 10.1%
800 Aventis S.A. - ADR 36,048
3,650 Axa S.A. - ADR 44,201
2,950 Groupe Danone - ADR 69,649
1,347 Total Fina S.A. - ADR 88,565
-----------------
238,463
-----------------
Germany: 10.7%
2,200 BASF AG - ADR 80,476
2,400 DaimlerChrysler AG 73,368
1,400 SAP AG - ADR 29,260
1,800 Siemens AG - ADR 71,514
-----------------
254,618
-----------------
Italy: 4.8%
1,900 Enel SpA - ADR 56,316
3,000 Fiat SpA - ADR 23,520
2,506 San Paolo - IMI SpA - ADR 34,658
-----------------
114,494
-----------------
Japan: 19.9%
2,800 Fuji Photo Film - ADR 88,368
1,000 Hitachi, Ltd. - ADR 41,970
800 Kyocera Corp. - ADR 42,080
6,200 Matsushita Electric Industrial Co., Ltd. - ADR 55,180
1,050 Millea Holdings, Inc. - ADR 36,172
7,275 Mitsubishi Tokyo Financial Group, Inc. - ADR 32,228
6,500 Nissan Motor Co. Ltd. - ADR 98,345
2,000 Sony Corp. - ADR 75,940
-----------------
470,283
-----------------
Netherlands: 9.2%
3,300 ABN Amro Holding N.V. - ADR 51,876
1,350 Akzo Nobel N.V. - ADR 29,093
2,150 ING Groep N.V. - ADR 28,875
1,775 Royal Dutch Petroleum Co. - ADR 70,414
2,600 TPG NV - ADR 36,348
1,119 Unilever N.V. - ADR 63,425
-----------------
280,031
-----------------
Norway: 2.1%
1,300 Norsk Hydro A/S - ADR 50,232
-----------------
Portugal: 0.9%
3,532 Portugal Telecom S.A. - ADR $22,428
-----------------
Spain: 4.6%
3,900 Banco Bilbao Vizcaya Argentaria S.A. - ADR 32,877
6,275 Banco Santander Central Hispano S.A. - ADR 39,784
2,600 Repsol S.A. - ADR 36,452
1,277 Telefonica, S.A. - ADR* 36,860
-----------------
145,973
-----------------
Sweden: 3.1%
4,100 Volvo AB - ADR 72,570
-----------------
Switzerland: 6.9%
5,200 Adecco S.A. - ADR 39,260
1,250 Novartis AG - ADR 45,725
1,900 UBS AG - ADR 79,230
-----------------
164,215
-----------------
-----------------
United Kingdom: 14.1%
500 AstraZeneca Plc - ADR 16,060
2,200 Barclays Plc - ADR 50,622
3,050 Cadbury Schweppes Plc - ADR 61,458
550 GlaxoSmithKline Plc - ADR 19,278
1,150 HSBC Holdings PLlc - ADR 61,709
700 National Grid Group - ADR 22,449
1,250 Rio Tinto Plc - ADR 101,625
-----------------
333,201
-----------------
TOTAL COMMON STOCKS
(cost $2,969,627) 2,352,539
-----------------
TOTAL INVESTMENTS IN SECURITIES
(cost $2,969,627): 99.4% 2,352,539
Other Assets less Liabilities: 0.6% 14,794
-----------------
NET ASSETS: 100.00% $2,367,333
=================
ADR - American depositary receipt.
* Non-income producing security.
See accompanying Notes to Financial Statements.
- --------------------------------------------------------------------------------
Schedule Of Investments by Industry
Purisima Pure Foreign Fund
February 28, 2003 (unaudited)
% of
Industry Net Assets
- --------------------------------------------------------------------------------
Automobile Manufacturers 11.3%
Banking 17.8%
Chemicals 4.6%
Commercial Services 1.7%
Electric 7.4%
Electronics 1.8%
Foods 8.2%
Household Audio & Video Equipment 3.2%
Insurance 4.6%
Media 2.1%
Mining 7.0%
Miscellaneous Manufacturing 3.0%
Oil & Gas 10.4%
Pharmaceuticals 6.0%
Photography 3.7%
Software 1.2%
Telecommunications 3.7%
Transportation 1.5%
------------
TOTAL INVESTMENTS IN SECURITIES 99.4%
Other Assets less Liabilities 0.6%
------------
NET ASSETS 100.0%
============
PURISIMA FUNDS
Purisima Funds
Statements of Assets and Liabilities
February 28, 2003 (unaudited)
- ----------------------------------------------------------------------------------------------
Total Return Fund Pure American Fund Pure Foreign Fund
----------------- --------------------------------------
ASSETS
Investments in securities, $ 226,227,563 $ 2,635,466 $ 2,969,627
at cost ================= ================ =================
Investments in securities,
at value $ 180,758,268 $ 2,044,215 $ 2,352,539
Receivables:
Securities sold - - 28,423
Dividends and interest 359,678 5,384 2,330
Fund shares sold - 2,500 -
Other assets 51,498 1,419 4,580
----------------- ---------------- -----------------
Total Assets 181,169,444 2,053,518 2,387,872
----------------- ---------------- -----------------
LIABILITIES
Bank overdraft - - 17,476
Accrued advisory fees
(Note 3) 127,186 2,465 3,063
Accrued distribution fees
(Note 4) 34,231 - -
Accrued administration
fees (Note 3) 13,693 - -
Other accrued expenses 70,101 - -
----------------- ---------------- -----------------
Total Liabilities 245,211 2,465 20,539
----------------- ---------------- -----------------
NET ASSETS $ 180,924,233 $ 2,051,053 $ 2,367,333
================= ================ =================
Number of shares issued
and outstanding
(unlimited shares
authorized, $0.01 par value) 14,674,424 227,404 211,397
================= ================ =================
Net asset value, offering
and redemption price
per share $ 12.33 $ 9.02 $ 11.20
================= ================ =================
COMPONENTS OF NET ASSETS
Paid-in capital $ 239,888,892 $ 2,815,791 $ 3,283,249
Accumulated net investment
income (loss) 54,902 8,116 (4,595)
Accumulated net realized
loss on investments (13,550,266) (181,603) (294,233)
Net unrealized depreciation
on investments (45,469,295) (591,251) (617,088)
----------------- ---------------- -----------------
Net Assets $ 180,924,233 $ 2,051,053 $ 2,367,333
================= ================ =================
Purisima Funds
Statement of Operations
For the Six Months Ended February 28, 2003 (unaudited)
- -----------------------------------------------------------------------------------------------------
Total Return Pure American Pure Foreign
Fund Fund Fund
---------------- ---------------- ----------------
INVESTMENT INCOME
Income
Dividends (net of foreign
taxes witheld of $66,705,
$0, and $1,908, respectively) $ 1,394,765 $ 26,400 $ 23,041
Interest 6,474 49 81
---------------- ---------------- ----------------
Total income 1,401,239 26,449 23,122
---------------- ---------------- ----------------
Expenses
Advisory fees 894,914 18,333 23,665
Distribution fees 223,728 - -
Administration fees 89,492 - -
Transfer agent fees 57,700 - -
Fund accounting fees 38,071 - -
Registration fees 27,831 - -
Custody fees 23,378 - -
Reports to shareholders 15,060 - -
Insurance expense 13,549 - -
Audit fees 9,421 - -
Legal fees 6,414 - -
Trustee fees 2,701 - -
Miscellaneous 4,985 - -
---------------- ---------------- ----------------
Total expenses 1,407,244 18,333 23,665
Less: fees waived (Note 3) (64,094) - -
---------------- ---------------- ----------------
Net expenses 1,343,150 18,333 23,665
---------------- ---------------- ----------------
Net investment income (loss) 58,089 8,116 (543)
---------------- ---------------- ----------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized loss on investments (4,641,919) (156,374) (277,521)
Net unrealized depreciation
on investments (17,008,707) (122,745) (100,295)
---------------- ---------------- ----------------
Net realized and unrealized loss
on investments (21,650,626) (279,119) (377,816)
---------------- ---------------- ----------------
Net decrease in net assets resulting
from operations $ (21,592,537) $ (271,003) $ (378,359)
================ ================ ================
Statement of Changes in Net Assets
Total Return Fund
- ---------------------------------------------------------------------------------------------
Six Months Ended Year Ended
INCREASE (DECREASE) IN NET ASSETS FROM: February 28, 2003* August 31, 2002
------------------- ---------------------
OPERATIONS
Net investment income $ 58,089 $ 1,701,906
Net realized gain (loss)
on investments
Securities (4,641,919) (4,615,141)
Options - 558,434
Net unrealized depreciation on
investments (17,008,707) (31,931,932)
------------------- ---------------------
Net decrease in net assets resulting
from operations (21,592,537) (34,286,733)
------------------- ---------------------
DISTRIBUTION TO SHAREHOLDERS
From net investment income (649,922) (1,395,913)
From net realized gain (1,595,178) (12,127,092)
------------------- ---------------------
Total distributions to shareholders (2,245,100) (13,523,005)
------------------- ---------------------
CAPITAL SHARE TRANSACTIONS
Net increase in net assets derived
from net change in outstanding shares (a) 23,190,552 $107,016,302
------------------- ---------------------
Total increase (decrease) in net assets (647,085) 59,206,564
NET ASSETS
Beginning of period 181,571,318 122,364,754
------------------- ---------------------
End of period $ 180,924,233 $ 181,571,318
=================== =====================
Accumulated net investment income $ 54,902 $ 646,735
=================== =====================
(a) A summary of capital share transactions is as follows:
Six Months Ended Year Ended
February 28, 2003* August 31, 2002
--------------------------------- --------------------------------
Shares Value Shares Value
---------------- -------------- -------------- ----------------
Shares sold 2,759,460 $36,084,052 7,196,010 $119,292,657
Shares issued on reinvestment
of distributions 167,234 2,202,476 794,173 13,397,691
Shares redeemed (1,169,303) (15,095,976) (1,606,721) (25,674,046)
---------------- -------------- -------------- ----------------
Net increase 1,757,391 $ 23,190,552 6,383,462 $107,016,302
================ ============== ============== ================
* Unaudited.
Statement of Changes in Net Assets
Pure American Fund
- ------------------------------------------------------------------------------------------
Six Months Ended Year Ended
INCREASE (DECREASE) IN NET ASSETS FROM: February 28, 2003* August 31, 2002
------------------- ---------------------
OPERATIONS
Net investment income $ 8,116 $ 41,317
Net realized loss on investments :
Securities (156,374) (8,289)
Options - (16,938)
Net unrealized depreciation on investments (122,745) (466,565)
------------------- ---------------------
Net decrease in net assets resulting from
operations (271,003) (450,475)
------------------- ---------------------
DISTRIBUTION TO SHAREHOLDERS
From net investment income (41,305) (114,026)
From net realized gain - (39,141)
------------------- ---------------------
Total distributions to shareholders (41,305) (153,167)
------------------- ---------------------
CAPITAL SHARE TRANSACTIONS
Net decrease in net assets derived from net
change in outstanding shares (a) (254,082) (1,283,697)
------------------- ---------------------
Total decrease in net assets (566,390) (1,887,339)
NET ASSETS
Beginning of period 2,617,443 4,504,782
------------------- ---------------------
End of period $ 2,051,053 $ 2,617,443
=================== =====================
Accumulated net investment income $ 8,116 $ 41,305
=================== =====================
(a) A summary of capital share transactions is as follows:
Six Months Ended Year Ended
February 28, 2003* August 31, 2002
--------------------------------- -----------------------------
Shares Value Shares Value
---------------- -------------- ------------- --------------
Shares sold 13,107 $125,923 115,219 $1,407,861
Shares issued on reinvestment of
distributions 4,325 41,305 12,420 148,667
Shares redeemed (46,306) (421,310) (233,282) (2,840,225)
---------------- -------------- ------------- --------------
Net decrease (28,874) $ (254,082) (105,643) $(1,283,697)
================ ============== ============= ==============
* Unaudited.
Statement of Changes in Net Assets
Pure Foreign Fund
- ----------------------------------------------------------------------------------------------
Six Months Ended Year Ended
INCREASE (DECREASE) IN NET ASSETS FROM: February 28, 2003* August 31, 2002
------------------- ---------------------
OPERATIONS
Net investment income (loss) $ (543) $ 167,727
Net realized gain (loss) on investments:
Securities (277,521) 7,820
Options - (23,081)
Net unrealized depreciation on investments (100,295) (591,908)
------------------- ---------------------
Net decrease in net assets resulting from
operations (378,359) (439,442)
------------------- ---------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (122,709) (190,682)
------------------- ---------------------
Total distributions to shareholders (122,709) (190,682)
------------------- ---------------------
CAPITAL SHARE TRANSACTIONS
Net decrease in net assets derived from net
change in outstanding shares (a) (525,724) (4,877,317)
------------------- ---------------------
Total decrease in net assets (1,026,792) (5,507,441)
NET ASSETS
Beginning of period 3,394,125 8,901,566
------------------- ---------------------
End of period $ 2,367,333 $ 3,394,125
=================== =====================
Accumulated net investment income (loss) $ (4,595) $ 118,657
=================== =====================
(a) A summary of capital share transactions is as follows:
Six Months Ended Year Ended
February 28, 2003* August 31, 2002
--------------------------------- ------------------------------
Shares Value Shares Value
---------------- -------------- ------------- ---------------
Shares sold 24,481 $296,705 54,423 $834,081
Shares issued on reinvestment of
distributions 10,175 122,709 12,224 181,160
Shares redeemed (82,982) (945,138) (386,039) (5,892,558)
---------------- -------------- ------------- ---------------
Net increase (decrease) (48,326) $ (525,724) (319,392) $(4,877,317)
================ ============== ============= ===============
* Unaudited.
PURISIMA FUNDS
Financial Highlights
For a capital share outstanding throughout each period.
- --------------------------------------------------------------------------------
The following information should be read in conjunction with the financial
statements and notes thereto appearing elsewhere in this Semi-Annual Report.
Total Return Fund
------------------------------------------------------------
Six Months Year Ended August 31,
Ended --------------------------------------------
Feb. 28,'03++ 2002 2001 2000 1999 1998
--------------- --------- --------- -------- ------- -------
Net asset value, beginning of period $14.06 $18.73 $19.65 $17.46 $12.47 $11.87
--------------- --------- --------- -------- ------- -------
Income from investment operations:
Net investment income (loss) 0.00*** 0.09 0.31^ (0.01) (0.01) 0.02
Net realized and unrealized
gain (loss) on
investments (1.56) (2.91) (0.61)^ 2.22 5.00 0.60
--------------- --------- --------- -------- ------- -------
Total from investment operations (1.56) (2.82) (0.30)^ 2.21 4.99 0.62
--------------- --------- --------- -------- ------- -------
Less distributions:
From net investment income (0.05) (0.19) - (0.02) -
(0.02)
From net realized gain (0.12) (1.66) (0.62) - - -
--------------- --------- --------- -------- ------- -------
Total distributions (0.17) (1.85) (0.62) (0.02) -
(0.02)
--------------- --------- --------- -------- ------- -------
Net asset value, end of year $12.33 $14.06 $18.73 $19.65 $17.46 $12.47
=============== ========= ========= ======== ======= =======
Total return (11.24%)** (16.72%) (1.33%) 12.64% 40.05% 5.26%
Ratios/supplemental data:
Net assets, end of year
(millions) $180.9 $181.6 $122.4 $89.8 $53.2 $21.5
Ratio of expenses to average net
assets:
Before fees waived and
expenses absorbed or recouped 1.57% * 1.51%+ 1.61%+ 1.62% 1.82% 2.71%
After fees waived and expenses
absorbed or recouped 1.50% * 1.50%+ 1.50%+ 1.50% 1.50% 1.50%
Ratio of net investment income
(loss) to average net assets # 0.06% * 1.03% 1.68% (0.04%) 0.00% 0.28%
Portfolio turnover rate 7.11% ** 60.76% 105.90% 38.42% 12.72% 15.89%
* Annualized.
** Not annualized.
++ Unaudited.
***Amount represents less than $0.01 per share.
# Net of fees waived.
^ Calculations are based on average shares outstanding for the period.
+ Without dividend expense on securities sold short, which was 0.10% for
2002 and 0.05% for 2001.
PURISIMA FUNDS
Financial Highlights
For a capital share outstanding throughout each period.
- --------------------------------------------------------------------------------
The following information should be read in conjunction with the financial
statements and notes thereto appearing elsewhere in this Semi-Annual Report.
Pure American Fund
----------------------------------------------------------------
Six Months Year Ended August 31, September 29, 1998+
Ended ---------------------------- through
Feb. 28,'03++ 2002 2001 2000 August 31, 1999
--------------- --------- --------- -------- -------------------
Net asset value, beginning of period $10.21 $12.45 $13.49 $13.00 $10.00
--------------- --------- --------- -------- -------------------
Income from investment operations:
Net investment income (loss) (0.13) 0.43 0.28^ (0.03) (0.02)
Net realized and unrealized
gain (loss) on
investments (0.90) (2.07) (0.02)^ 0.52 3.02
--------------- --------- --------- -------- -------------------
Total from investment operations (1.03) (1.64) 0.26^ 0.49 3.00
--------------- --------- --------- -------- -------------------
Less distributions:
From net investment income (0.16) (0.58) (0.28) - -
From net realized gain - (0.02) (1.02) (0.00)*** -
--------------- --------- --------- -------- -------------------
Total distributions (0.16) (0.60) (1.30) (0.00)*** -
--------------- --------- --------- -------- -------------------
Net asset value, end of year $ 9.02 $10.21 $12.45 $13.49 $13.00
=============== ========= ========= ======== ===================
Total return (10.21%)** (13.90%) 1.96% 3.79% 30.00%**
Ratios/supplemental data:
Net assets, end of period
(millions) $ 2.1 $ 2.6 $4.5 $ 1.1 $ 1.5
Ratio of expenses to average net
assets:
Before fees waived 1.50% * 1.50%# 1.50%# 1.50% 1.50%*
After fees waived n/a 1.13%# 0.00%# n/a n/a
Ratio of net investment income
(loss) to average net assets # 0.66% * 1.35% 4.09% (0.13%) (0.34%)*
Portfolio turnover rate 11.14%** 75.54% 265.29% 45.48% 29.73%**
* Annualized.
** Not Annualized.
+ Commencement of operations.
++ Unaudited.
***Amount represents less than $0.01 per share.
^ Calculations are based on average shares outstanding for the period.
# Without dividend expense on securities sold short, which was 0.10% for
2002 and 0.08% for 2001.
PURISIMA FUNDS
Financial Highlights
For a capital share outstanding throughout each period.
- --------------------------------------------------------------------------------
The following information should be read in conjunction with the financial
statements and notes thereto appearing elsewhere in this Semi-Annual Report.
Pure Foreign Fund
------------------------------------------------------------------
Six Months Year Ended August 31, September 29, 1998+
Ended ------------------------------ through
Feb. 28,'03++ 2002 2001 2000 August 31, 1999
--------------- --------- --------- --------- -------------------
Net asset value, beginning of period $13.07 $15.37 $16.39 $13.52 $10.00
--------------- --------- --------- --------- -------------------
Income from investment operations:
Net investment income (0.02) 0.84 0.33 ^ 0.01 0.04
Net realized and unrealized gain
(loss)
on investments (1.39) (2.47) (0.45)^ 3.69 3.48
--------------- --------- --------- --------- ------------------
Total from investment operations (1.41) (1.63) (0.12)^ 3.70 3.52
--------------- --------- --------- --------- ------------------
Less distributions:
From net investment income (0.46) (0.67) (0.35) (0.03)
-
From net realized gain (0.80)
- - (0.55) -
--------------- --------- --------- --------- ------------------
Total distributions (0.67) (0.90) (0.83)
(0.46) -
--------------- --------- --------- --------- ------------------
Net asset value, end of period $11.20 $13.07 $15.37 $16.39 $13.52
=============== ========= ========= ========= ==================
Total return (11.05%)** (11.14%) (0.45%) 28.04% 35.20% **
Ratios/supplemental data:
Net assets, end of period $2.4 $3.4 $8.9 $2.8 $0.3
(millions)
Ratio of expenses to average net assets:
Before fees waived 1.50% * 1.50% # 1.50% # 1.50% 1.50% *
After fees waived n/a 1.07% # 0.00% # n/a n/a
Ratio of net investment income
to average net assets (0.03%) * 4.02% 4.21% 0.26% 0.65% *
Portfolio turnover rate 11.92% ** 69.59% 258.66% 51.60% 7.19% **
* Annualized.
** Not Annualized.
+ Commencement of operations.
++Unaudited.
^ Calculations are based on average shares outstanding for the period.
# Without dividend expense on securities sold short, which was 0.10% for
2002 and 0.08% for 2001.
PURISIMA FUNDS
Notes to Financial Statements (Unaudited)
February 28, 2003
- --------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION
The Purisima Funds (the "Trust") was organized as a Delaware business trust on
June 27, 1996 and is registered under the Investment Company Act of 1940, as
amended (the "1940 Act") as an open-end management investment company issuing
its shares in series. Each series represents a distinct portfolio with its own
investment objectives and policies. The Trust consists of three diversified
series (the "Funds"): Purisima Total Return Fund (the "Total Return Fund"),
representing the initial series of the Trust which commenced operations on
October 28, 1996, and Purisima Pure American Fund (the "Pure American Fund") and
Purisima Pure Foreign Fund (the "Pure Foreign Fund") both of which commenced
operations on September 29, 1998. Fisher Investments, Inc. (the "Adviser")
serves as the investment adviser to the Funds.
The investment objectives of the Funds are as follows:
The Total Return Fund seeks to produce a high level of total return. It invests
primarily in common stocks and other equity-type securities, or securities
acquired primarily to produce income, or a combination of both depending on the
assessment of market conditions.
The Pure American Fund seeks to provide investors with a high level of total
return. The Fund may emphasize investments in common stocks and other
equity-type securities acquired primarily to produce income, or a combination of
both, depending on the assessment of market conditions by the Fund's investment
Adviser. The Fund will concentrate its portfolio holdings to those securities
issued by issuers domiciled in the United States.
The Pure Foreign Fund seeks to provide investors with a high level of total
return. The Fund may emphasize investments in common stocks and other
equity-type securities acquired primarily to produce income, or a combination of
both, depending on the assessment of market conditions by the Fund's investment
Adviser. Under normal market conditions, the Fund will concentrate its portfolio
holdings to those securities issued by issuers domiciled outside of the United
States.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with accounting principles generally accepted in the
United States of America.
A. Security Valuation. Investments in securities traded on a national
securities exchange or Nasdaq are valued at the last reported sales
price at the close of regular trading on each day that the exchanges
are open for trading; securities traded on an exchange or Nasdaq for
which there have been no sales and other over-the-counter securities
are valued at the closing bid. Securities for which quotations are not
readily available are valued at their respective fair values as
determined in good faith by the Board of Trustees or their designee.
Debt securities with remaining maturities of 60 days or less are
valued at cost which, when combined with accrued interest,
approximates market value. Discounts and Premiums on securities
purchased are amortized over the lives of the respective securities
using the straight-line method.
B. Federal Income and Excise Taxes. The Funds intend to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of their
income to its shareholders. Therefore, no federal income or excise tax
provision is required.
As of August 31, 2002, the Pure Foreign Fund has a capital loss
carryforward available to offset future capital gains, if any, of
$2,135, all of which expires in 2010. In addition, the Total Return
Fund and Pure Foreign Fund had net realized capital losses of
$8,901,115 and $13,125, respectively, during the period November 1,
2001 through August 31, 2002, which are treated for federal income tax
purposes as arising during the Fund's tax year ending August 31, 2003.
These "post-October" losses may be utilized in future years to offset
net realized capital gains prior to distributing such gains to
shareholders.
C. Security Transactions, Investment Income and Distributions. Security
transactions are accounted for on the trade date. Dividend income and
distributions to shareholders are recorded on the ex-dividend date and
interest income is recognized on the accrual basis.
D. Use of Estimates. The presentation of financial statements in
conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual results could
differ from those estimates and assumptions.
E. Concentration of Risk. Investments in securities of non-U.S. issues in
certain countries involve special investment risks. These risks may
include but are not limited to, investment restrictions, adverse
political, social and economic developments, government involvement in
the private sector, limited and less reliable investor information,
lack of liquidity, certain local tax law considerations, and limited
regulation of the securities markets.
F. Options. Options purchased are recorded as investments; options
written (sold) are accounted for as liabilities. When an option
expires, the premium (original option value) is realized as a gain if
the option was written or as a loss if the option was purchased. When
the exercise of an option results in a cash settlement, the difference
between the premium and the settlement proceeds is realized as a gain
or loss. When securities are acquired or delivered upon exercise of an
option, the acquisition cost or sale proceeds are adjusted by the
amount of the premium. When an option is closed, the difference
between the premium and the cost to close the position is realized as
a gain or loss.
G. Securities Sold Short. The Funds are engaged in selling securities
short, which obligates the Funds to replace a security borrowed by
purchasing the same security at the current market value. The Funds
would incur a loss if the price of the security increases between the
date of the short sale and the date on which the Funds replace the
borrowed security. The Funds would realize a gain if the price of the
security declines between those dates.
The Funds are required to establish a margin account with the broker
lending the security sold short. While the short sale is outstanding,
the broker retains the proceeds of the short sale and the Funds must
also maintain a deposit with the broker consisting of cash having a
value equal to a specified percentage of the value of the securities
sold short.
NOTE 3 - COMMITMENTS AND OTHER RELATED PARTY TRANSACTIONS
The Total Return Fund (the "Fund") has an Investment Management Agreement with
the Adviser to provide investment advisory services to the Fund. The Adviser
furnishes all investment advice, office space, facilities, and most of the
personnel needed by the Funds. As compensation for its services, the Adviser is
entitled to a monthly fee at the annual rate of 1.00% of the Fund's average
daily net assets.
The Fund is responsible for its own operating expenses. The Adviser has agreed
to limit the Fund's total expenses (exclusive of brokerage, interest, taxes,
dividends on securities sold short and extraordinary expenses) to not more than
1.50% of the average daily net assets.
Any fee withheld or voluntarily reduced and/or any Fund expense absorbed by the
Adviser pursuant to an agreed upon expense cap shall be reimbursed by the Fund
to the Adviser, if so requested by the Adviser, anytime before the end of the
third fiscal year following the year to which the fee reduction, waiver, or
expense absorption relates, provided the aggregate amount of the Fund's current
operating expenses for such fiscal year does not exceed the applicable
limitation on Fund expenses. Any such reimbursement is also contingent upon
Board of Trustees review and approval prior to the time the reimbursement is
also initiated. The Fund must pay its current ordinary operating expenses before
the Adviser is entitled to any reimbursement of fees and/or expenses. For the
six months ended February 28, 2003, the Adviser waived fees of $64,094.
At February 28, 2003, the cumulative unreimbursed amount paid and/or waived by
the Adviser on behalf of the Fund is $268,977. The Adviser may recapture $87,515
no later than August 31, 2003, $102,939 no later than August 31, 2004, $11,042
no later than August 31, 2005 and $67,481 no later than August 31, 2006.
The Pure American and Pure Foreign Funds have a Comprehensive Management
Agreement with the Adviser to provide advisory and other ordinary services,
including administration, transfer agency, custody and auditing services. For
providing these services, the Pure American and Pure Foreign Funds each pay the
Adviser a monthly fee at the annual rate of 1.50% of the respective Funds'
average daily net assets. This comprehensive fee arrangement requires the
Adviser to absorb and pay out of its own resources all operating expenses of the
Pure American and Pure Foreign Funds.
U.S. Bancorp Fund Services, LLC (the "Administrator") acts as the Trust's
Administrator under an Administration Agreement. The Administrator prepares
various federal and sta
te regulatory filings, reports and returns for the Funds;
prepares reports and materials to be supplied to the trustees; monitors the
activities of the Funds' custodian, transfer agent and accountants; coordinates
the preparation and payment of Fund expenses and reviews the Funds' expense
accruals.
For its services, the Administrator receives a monthly fee based on the value of
the total average net assets of the Trust at an annual rate of 0.10% of the
first $200 million of such net assets, 0.05% of the next $300 million, and 0.03%
thereafter, subject to a minimum fee of $40,000 per Fund.
The Funds' former distributor was First Fund Distributors, Inc., which was
acquired by Quasar Distributors, Inc. in October 2001. Quasar Distributors, LLC
(the "Distributor"), an affiliate of the Administrator, serves as distributor of
the Funds pursuant to a Distribution Agreement with the Trust on behalf of each
Fund. Purisima Securities, LLC ("Purisima Securities") an affiliate of the
Adviser, serves as co-distributor of the Funds pursuant to a Co-Distribution
Agreement with the Trust.
NOTE 4 - SERVICE AND DISTRIBUTION PLAN
The Trust has adopted a Service and Distribution Plan (the "Plan") pursuant to
Rule 12b-1 under the 1940 Act. Under the Plan, the Total Return Fund is
authorized to pay expenses incurred for the purpose of financing activities,
including the employment of other dealers, intended to result in the sale of
shares of the Fund. The fee accrues at an annual rate not to exceed 0.25% of the
Fund's average daily net assets. For the six months ended February 28, 2003, the
Fund incurred $223,728 in distribution fees.
NOTE 5 - PURCHASES AND SALES
The cost of purchases and the proceeds from sales of securities, excluding U.S.
Government securities and short-term investments, for the six months ended
February 28, 2003, were as follows:
Fund Purchases Sales
---- ------------ -----
Total Return Fund $33,919,428 $12,645,127
Pure American Fund 269,903 553,263
Pure Foreign Fund 371,319 1,009,757
There were no purchases or sales of U.S. Government securities by the Funds.
OTHER INFORMATION- TRUSTEES AND OFFICER INFORMATION (UNAUDITED)
Number of
Portfolios
in Fund
Position(s) Complex Other
Held Year Principal Occupation(s) Overseen by Directorships
Name, Address, Age with Trust Elected(1) During Past Five Years Director Held
- --------------------------- ----------- ---------- ------------------------------------ ----------- -------------
Kenneth L. Fisher* (53) President 1996 Chief Executive Officer and 3 None
Fisher Investments, Inc. and Trustee majority shareholder of the
13100 Skyline Blvd. Adviser, and has served in
Woodside, CA 94062 such capacities since the
incorporation of the Adviser
in 1986. Prior thereto, he was
the founder of Fisher Investments,
a sole proprietorship which
commenced operations in 1978.
Sherrilyn A. Fisher* (54) Secretary 1996 Senior Vice President and N/A None
Fisher Investments, Inc. Corporate Secretary of the Adviser.
13100 Skyline Blvd. Ms. Fisher has been employed by the
Woodside, CA 94062 Adviser since 1986.
Pierson E. Clair III (55) Trustee 1996 President and Chief Operating 3 Signature
Fisher Investments, Inc. Officer of Brown & Haley since 1998 Foods, Inc.
13100 Skyline Blvd. (fine confectioners); Vice President
Woodside, CA 94062 of Blummer Chocolate Company from
1980 to 1997, where he had been
employed since 1970.
Bryan F. Morse (51) Trustee 1996 Sole proprietor of Bryan F. Morse, 3 None
Fisher Investments, Inc. RIA, a registered investment
13100 Skyline Blvd. adviser since 1990.
Woodside, CA 94062
Grover T. Wickersham (54) Trustee 1996 Attorney in private practice in Palo 3 None
Fisher Investments, Inc. Alto, California. Prior to entering
13100 Skyline Blvd. private practice in June of 1981,
Woodside, CA 94062 served as a Branch Chief of the Los
Angeles Regional Office of the U.S.
Securities and Exchange Commission.
Scott LeFevre (46) Trustee 2001 Sole proprietor of LeFevre Capital 3 None
Fisher Investments, Inc. Management.
13100 Skyline Blvd.
Woodside, CA 94062
Alfred D. McKelvy, Jr. (54) Trustee 2003 Executive Director of the law firm 3 Diablo
Fisher Investments, Inc. of Berding & Weil, LLP since 1990. Valley Bank;
13100 Skyline Blvd. East Bay
Woodside, CA 94062 BOMA.
David L. Ruis, C.P.A (38) Treasurer 2003 Controller, Fisher Investment, Inc., N/A None
since July of 2001. Prior thereto,
served as Controller for Secure.com
(internet related products) while
providing consulting services for
Agilent Technologies. Prior to the
year 2000, served as the Chief Financial
Officer for Nomura Securities
in Dallas, TX.
- ------------------------------------------------------------------------------------------------------------------
(1) Directors and officers of the Funds serve until their resignation, removal
or retirement.
* "Interested person" of the Trust, as defined in the 1940 Act.
Privacy Notice
Fisher Investments, Inc. and The Purisima Funds collect nonpublic information
about you from the following sources:
- - Information we receive about you on applications or other forms;
- - Information you give us orally; and
- - Information about your transactions with us or others.
We do not disclose any nonpublic personal information about our customers or
former customers without the customer's authorization, except as required by law
or in response to inquiries from governmental authorities. We restrict access to
your personal and account information to those employees who need to know that
information to provide products and services to you. We also may disclose that
information to unaffiliated third parties (such as to brokers or custodians)
only as permitted by law and only as needed for us to provide agreed services to
you. We maintain physical, electronic and procedural safeguards to guard your
nonpublic personal information.
ITEM 9. CONTROLS AND PROCEDURES
(a) Based on their evaluation of the Registrant's Disclosure Controls and
Procedures as of a date within 90 days of the Filing Date, the Registrant's
President and Treasurer/CFO have determined that the Disclosure Controls
and Procedures (as defined in Rule 30a-2(c) under the Act) are designed to
ensure that information required to be disclosed by the Registrant is
recorded, processed, summarized and reported by the filing Date, and that
information required to be disclosed in the report is communicated to the
Registrant's management, as appropriate, to allow timely decisions
regarding required disclosure.
(b) There were no significant changes in the Registrant's internal controls or
in other factors that could significantly affect these controls subsequent
to the date of their evaluation, and there were no corrective actions with
regard to significant deficiencies and material weaknesses.
(c) Certification of principal executive officer (see attached) and
Certification of principal financial officer (see attached).
ITEM 1. REPORT TO STOCKHOLDERS - As Filed
ITEM 2. CODE OF ETHICS.
Not applicable to semi-annual reports for the period ended February 28,
2003.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable to semi-annual reports for the period ended February 28,
2003.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable to semi-annual reports for the period ended February 28,
2003.
ITEM 5-8: [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES - As Filed
a) Based on their evaluation of the Registrant's Disclosure Controls
and Procedures as of a date ( within 90 days of the filing date,
the Registrant's President and Treasurer/CFO have determined that
the Disclosure Controls and Procedures (as defined in Rule
30a-2(c) under the Act) are designed to ensure that information
required to be disclosed by the Registrant is recorded,
processed, summarized and reported by the filing date, and that
information required to be disclosed by Registrant's management,
as appropriate, to allow timely decisions regarding required
disclosures.
b) There were no significant changes in the Registrant's internal
controls or in other factors ( that could significantly affect
these controls subsequent to the date of their evaluation, and
there were no corrective actions with regard to significant
deficiencies and material weaknesses.
ITEM 10. EXHIBITS.
(a) Not applicable to semi-annual reports for the period ended
February 28, 2003.
(b) Attached hereto
Exhibit 99.CERT Certifications pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
The Purisima Funds
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By (Signature and Title)* /s/ KENNETH L. FISHER
----------------------
Kenneth L. Fisher
President
Date: May 7, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
The Purisima Funds
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By (Signature and Title)* /s/ DAVID RUIZ
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David Ruiz
Treasurer
Date: May 7, 2003