As filed with the Securities and Exchange Commission on May 8, 2009
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 811-07737
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THE PURISIMA FUNDS
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(Exact name of registrant as specified in charter)
13100 SKYLINE BLVD.
WOODSIDE, CALIFORNIA 94062
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(Address of principal executive offices) (Zip code)
U.S. BANCORP FUND SERVICES, LLC
2020 EAST FINANCIAL WAY, SUITE 100
GLENDORA, CALIFORNIA 91741
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(Name and address of agent for service)
(650) 851-3334
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Registrant's telephone number, including area code
Date of fiscal year end: AUGUST 31
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Date of reporting period: FEBRUARY 28, 2009
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ITEM 1. REPORTS TO STOCKHOLDERS.
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The Purisima Funds
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Semi-Annual Report (Unaudited)
February 28, 2009
The Purisima Total Return Fund
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TABLE OF CONTENTS
A Letter to Our Shareholders 2
Sector Breakdown 5
Expense Example 5
Schedule of Investments 7
Statement of Assets and Liabilities 14
Statement of Operations 15
Statement of Changes in Net Assets 16
Financial Highlights 17
Notes to Financial Statements 18
Other Information 25
Trustees and Officer Information 28
Privacy Notice 32
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INVESTMENT OBJECTIVES
PURISIMA TOTAL RETURN FUND
Seeks to provide investors with a high level of total return by considering both
domestic and foreign securities.
EACH FUND RESERVES THE RIGHT TO REJECT ANY ORDER FOR THE PURCHASE OF ITS SHARES
OR TO LIMIT OR SUSPEND, WITHOUT PRIOR NOTICE, THE OFFERING OF ITS SHARES. THE
REQUIRED MINIMUM INVESTMENTS MAY BE WAIVED IN THE CASE OF CERTAIN QUALIFIED
RETIREMENT PLANS. THE FUNDS WILL NOT ACCEPT YOUR ACCOUNT IF YOU ARE INVESTING
FOR ANOTHER PERSON AS ATTORNEY-IN-FACT. THE FUNDS ALSO WILL NOT ACCEPT ACCOUNTS
WITH A "POWER OF ATTORNEY" IN THE REGISTRATION SECTION OF THE PURCHASE
APPLICATION.
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A LETTER TO OUR SHAREHOLDERS
Welcome to the semi-annual report for the Purisima Total Return Fund for the
six-month period ended February 28, 2009. The primary investment objective of
the Fund is achieving high total return for shareholders.
MARKET REVIEW AND OUTLOOK:
Global markets finished an extremely difficult period with heavy losses. The
MSCI World Index fell -43.4%. A US housing downturn and subprime mortgage
problems morphed into a financial sector panic, exacerbated by an accounting
rule change expanding the definition of fair value accounting (FAS 157) and
inconsistent government treatment of distressed financial institutions. This
turned what seemed to be a 2008 bull market correction by normal standards into
a full scale bear market.
We believe the broad economy can withstand the onslaught of the 2008 financial
crisis. Eventually, owning stocks should prove extraordinarily rewarding. This
bear is already larger than average in magnitude and average in
duration--making, we believe, a recovery sometime in the near future
increasingly probable. We are optimistic the market will rebound strongly in
2009--maybe immediately, maybe not, but rebound nonetheless.
That doesn't mean 2009 won't be tumultuous. We expect recession will continue
through at least mid-year. But as a discounter of future conditions, the stock
market should begin rising even as high volatility continues and the thrum of
bad news drones on. Historically, bear markets end long before economic data
improves--new bull markets climb a "wall of worry."
Underpinning our optimism is the unprecedentedly massive wall of global monetary
and fiscal stimulus. So far, governments and central banks around the world have
initiated numerous policies in an effort to unfreeze the financial system,
restore confidence, and stimulate economies. Credit markets are showing signs of
thawing, as closely watched global overnight interbank lending rates have come
down since spiking in September and early October. In time, calmness should
return to credit markets and before long, stocks could well bottom and a new
bull market may begin.
We do not know when the market bottom will occur. Timing the bottom precisely
isn't crucial to long-term portfolio success. What matters more is positioning
the portfolio to capture the initial upsurge of a new bull market, even if that
means absorbing the volatility around a bear market bottom. Bear markets
typically bottom and recover in a "V" shape--a steep, final drop driven almost
exclusively by non-fundamental forces followed by a similarly steep upward
burst. In such environments, the regions, sectors, industries, and even
individual stocks performing worst on the way down tend to outperform during the
initial surge. In these situations, the market acts like a spring. For
non-fundamental reasons, the areas that are pushed down the hardest have the
most initial force to pop upwards.
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FUND POSITIONING
We see numerous fundamentally bullish factors potentially setting the stage for
a new bull market: massive monetary and fiscal stimulus, historically cheap
stocks, dividend yields exceeding Treasury yields, constrained equity supply
from lack of initial public offerings, and improving credit markets. None of
these in and of themselves augur the timing of a recovery for stocks. They do,
however, point to the potential for a very strong recovery in the period ahead.
We remain fully invested in stocks to capture the initial surge from the bear
market bottom. At this juncture, we think it would be a major mistake to
markedly change portfolio allocations and risk missing the early stages of the
rebound.
For the six-month period ending February 28, 2009, the Fund's country and sector
allocation decisions overall benefited the portfolio relative to the benchmark.
The Fund's overweight to Switzerland and slight underweight to the United States
added to returns, while an underweight to Japan and overweight to Emerging
Markets hurt returns. The Fund's underweight to Financials and overweight to
Telecommunication Services benefited returns, while underweights to Health Care
and Utilities detracted.
The Fund's stock selection overall detracted from portfolio returns relative to
the benchmark. Stock selection in the United Kingdom, Japan, and France hurt
returns. Stock selection in Consumer Staples helped returns, while stock
selection in Energy and Materials detracted.
CLOSING REMARKS
The Fund underperformed the MSCI World benchmark over the six-month period
ending February 28, 2009. This period proved immensely challenging, but we are
optimistic for the period ahead. Unless some major new exogenous problem
emerges, a further significant market decline, while much feared, is in our view
highly unlikely.
Weak economic news seems endless, but it's important to remember two crucial
facts. First, stocks have routinely rebounded in advance of an economic recovery
while the economy was still contracting. Second, every bear market has been
followed by a bull market, which typically ended up being bigger than many
people expected.
Thank you for your continued interest and support.
Sincerely,
Kenneth L. Fisher
Chairman and Chief Investment Officer
Fisher Investments
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.
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PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
FUND HOLDINGS AND SECTOR ALLOCATIONS ARE SUBJECT TO CHANGE AND ARE NOT
RECOMMENDATIONS TO BUY OR SELL ANY SECURITY.
CURRENT AND FUTURE PORTFOLIO HOLDINGS ARE SUBJECT TO RISK
MUTUAL FUND INVESTING INVOLVES RISK OF LOSS. PRINCIPAL LOSS IS POSSIBLE. THE
FUND MAY USE SHORT SALES OF SECURITIES, WHICH INVOLVE THE RISK THAT LOSSES MAY
EXCEED THE ORIGINAL AMOUNT INVESTED. FOREIGN INVESTING INVOLVES SPECIAL RISKS,
INCLUDING A GREATER VOLATILITY AND POLITICAL, ECONOMIC AND CURRENCY RISKS AND
DIFFERENCES IN ACCOUNTING METHODS. SMALL-AND MEDIUM-CAPITALIZATION COMPANIES
TEND TO HAVE LIMITED LIQUIDITY AND GREATER PRICE VOLATILITY THAN LARGE
CAPITALIZATION COMPANIES. GROWTH STOCKS TYPICALLY ARE MORE VOLATILE THAN VALUE
STOCKS; HOWEVER, VALUE STOCKS HAVE A LOWER EXPECTED GROWTH RATE IN EARNINGS AND
SALES. INVESTMENTS IN DEBT SECURITIES TYPICALLY DECREASE IN VALUE WHEN INTEREST
RATES RISE. THIS RISK IS GREATER FOR LONGER-TERM DEBT SECURITIES.
The MSCI World Index is a broad-based unmanaged capitalization-weighted stock
index designed to measure global developed market equity performance. It
consists of 23 developed market country indices. One cannot invest directly in
an index.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY A PROSPECTUS.
FISHER INVESTMENTS IS THE ADVISER TO THE PURISIMA FUNDS. THE PURISIMA FUNDS
ARE DISTRIBUTED BY QUASAR DISTRIBUTORS, LLC 04/09
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SECTOR BREAKDOWN(1) (UNAUDITED)
PURISIMA TOTAL RETURN FUND
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Energy 17.6%
Information Technology 16.1%
Industrials 11.2%
Consumer Staples 10.7%
Materials 10.2%
Financials 9.8%
Health Care 9.0%
Consumer Discretionary 6.3%
Telecommunication Services 6.2%
Utilities 1.7%
Mutual Funds 1.2%
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Total 100.0%
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(1) Percentage of Total Investments as of February 28, 2009.
IMPORTANT INFORMATION
The following disclosure provides important information regarding the Fund's
Expense Example. Please refer to this information when reviewing the Expense
Example for the Fund.
EXPENSE EXAMPLE (UNAUDITED)
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs; and (2) ongoing costs, including management fees; distribution and/or
service (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 indicated and held for the entire period from September 1, 2008 to
February 28, 2009 for the Total Return Fund.
ACTUAL EXPENSES
The information in the table under the heading "Actual Performance" provides
information about actual account values and actual expenses. You may use the
information in these columns 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 row entitled "Expenses Paid During
Period" to estimate the expenses you paid on your account during this period.
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HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The information in the table under the heading "Hypothetical Performance (5%
return before expenses)" provides information about hypothetical account values
and hypothetical expenses based on the Fund's actual expense ratios and assumed
rates of return of 5% per year before expenses, which are not the Fund's actual
returns. 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.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads), or redemption fees. Therefore, the information under the
heading "Hypothetical Performance (5% return before expenses)" 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.
ACTUAL HYPOTHETICAL PERFORMANCE
PURISIMA TOTAL RETURN FUND PERFORMANCE (5% RETURN BEFORE EXPENSES)
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Beginning Account Value (09/01/08) $ 1,000.00 $ 1,000.00
Ending Account Value (02/28/09) $ 545.00 $ 1,017.36
Expenses Paid During Period(1) $ 5.75 $ 7.50
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(1) Expenses are equal to the Fund's expense ratio for the six month period of
1.50% for the Total Return Fund multiplied by the average account value
over the period, multiplied by 181/365 (to reflect the one-half year
period).
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PURISIMA TOTAL RETURN FUND
SCHEDULE OF INVESTMENTS
FEBRUARY 28, 2009 (UNAUDITED)
SHARES/PRINCIPAL AMOUNT VALUE
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COMMON STOCKS: 98.9%
AUSTRALIA: 1.8%
114,800 BHP Billiton - ADR $ 4,181,016
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BRAZIL: 3.9%
10,800 Banco Bradesco SA 94,176
11,222 Companhia Energetica de Minas Gerais - ADR 153,293
15,300 Companhia Siderurgica Nacional SA - ADR 202,113
27,100 Companhia Vale do Rio Doce 302,165
230,900 Companhia Vale do Rio Doce - ADR 2,976,301
11,000 Empresa Brasileira de Aeronautica SA
(Embraer) - ADR 118,910
25,800 Gerdau SA - ADR 134,934
186,200 Petroleo Brasileiro SA - ADR 5,163,326
40,200 Weg SA 197,184
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9,342,402
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CANADA: 1.4%
87,500 EnCana Corporation 3,444,875
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CHINA: 3.6%
450 Baidu.com - ADR (a) 66,744
138,500 China Cosco Holdings Company, Ltd. 75,722
3,400 China Life Insurance Company, Ltd. - ADR 141,406
177,500 China Mobile Hong Kong, Ltd. - ADR 7,694,625
3,450 China Petroleum & Chemical
Corporation - ADR 180,953
3,450 CNOOC, Ltd. - ADR 296,458
366,000 Industrial & Commercial Bank
Of China, Ltd. 150,076
46,400 Weichai Power Company, Ltd. 78,617
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8,684,601
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CZECH REPUBLIC: 0.0%
3,000 Cez AS 90,726
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FINLAND: 1.2%
296,400 Nokia Oyj - ADR 2,774,304
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The accompanying notes are an integral part of these financial statements. 7
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SHARES VALUE
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FRANCE: 3.7%
25,700 AXA $ 239,048
173,550 AXA - ADR 1,575,834
45,600 BNP Paribas SA 1,502,464
115,608 Total SA - ADR 5,456,698
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8,774,044
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GERMANY: 5.6%
160,000 BASF AG - ADR 4,490,896
17,600 E.ON AG 455,395
129,900 E.ON AG - ADR 3,387,026
100,900 Siemens AG - ADR 5,107,558
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13,440,875
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HONG KONG: 1.0%
283,800 Cheung Kong Holdings, Ltd. - ADR 2,336,667
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INDIA: 0.1%
1,600 HDFC Bank, Ltd. - ADR 81,600
5,400 ICICI Bank, Ltd. - ADR 67,284
1,700 Reliance Industries, Ltd. - ADR 84,172
100 Reliance Industries, Ltd. - GDR 144A 4,875
11,100 Sterlite Industries India, Ltd. - ADR 51,060
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288,991
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INDONESIA: 0.2%
264,500 Bank Rakyat Tbk PT 82,242
572,400 Bumi Resources Tbk PT 36,790
385,000 International Nickel Indonesia Tbk PT 69,898
456,500 Medco Energi Internasional Tbk PT (a) 78,497
9,400 Telekomunikasi Indonesia Tbk PT - ADR 200,220
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467,647
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ISRAEL: 0.1%
6,200 Teva Pharmaceutical Industries,
Ltd. - ADR 276,396
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ITALY: 0.9%
141,532 Intesa Sanpaolo SpA - ADR 2,088,007
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JAPAN: 5.6%
150,000 Honda Motor Co., Ltd. - ADR 3,544,500
454,200 Mitsubishi UFJ Financial Group,
Incorporated - ADR 2,030,274
283,800 Nomura Holdings, Incorporated 1,203,886
260,900 Panasonic Corp. - ADR 2,997,741
86,200 Sony Corporation 1,473,248
57,500 Sumitomo Mitsui Financial Group,
Incorporated 1,867,667
48,400 Sumitomo Mitsui Financial
Group, Incorporated - ADR (a) 156,806
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13,274,122
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8 The accompanying notes are an integral part of these financial statements.
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SHARES VALUE
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MALAYSIA: 0.1%
52,200 Bumiputra-Commerce Holdings BHD $ 97,149
226,600 MMC Corporation BHD 86,178
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183,327
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MEXICO: 1.2%
101,400 America Movil SA de CV - ADR 2,583,672
216,241 Grupo Mexico SA de CV 122,815
17,700 Industrias Penoles SA de CV 156,011
6,000 Wal-Mart De Mexico SA de CV - ADR 112,631
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2,975,129
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NETHERLANDS: 2.5%
197,827 ING Groep NV - ADR 892,200
264,400 Unilever NV - ADR 5,052,684
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5,944,884
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NORWAY: 0.0%
0 Statoil ASA 4
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PHILIPPINES: 0.1%
7,500 Philippine Long Distance Telephone - 333,375
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ADR
POLAND: 0.1%
1,900 Bank Pekao SA - GDR 40,470
900 Bre Bank SA (a) 23,417
2,800 KGHM Polska Miedz SA - GDR 47,880
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111,767
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RUSSIAN FEDERATION: 0.1%
3,000 LUKOIL - ADR 94,050
1,400 OAO Gazprom - ADR (a) 17,822
9,900 OAO Gazprom - Sponsored ADR 128,601
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240,473
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SOUTH AFRICA: 0.2%
3,400 Anglo Platinum, Ltd. - ADR 130,614
15,300 MTN Group Ltd. 130,213
5,500 Sasol, Ltd. - ADR 138,215
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399,042
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The accompanying notes are an integral part of these financial statements. 9
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SHARES VALUE
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SOUTH KOREA: 0.5%
7,000 Daewoo Securities Company, Ltd. $ 65,278
3,500 Daewoo Shipbuilding & Marine
Engineering Company, Ltd. - GDR (a) 89,915
1,200 Daewoo Shipbuilding & Marine Engineering
Company, Ltd. - Sponsored GDR 144A (a) 30,832
5,100 Hynix Semiconductor - GDR 144A (a) 28,733
1,400 Hyundai Heavy Industries Company, Ltd. 162,053
2,800 KB Financial Group, Inc. - ADR (a) 52,696
7,500 LG Investment & Securities, Incorporated 66,761
3,425 POSCO - ADR 171,832
750 Samsung Electronic Company, Ltd. 114,375
500 Samsung Electronics Company, Ltd. -
GDR 144A 77,763
900 Samsung Fire & Marine Insurance Company 92,145
2,500 Samsung Securities Company, Ltd. 85,591
1,800 Shinhan Financial Group Company, Ltd. - 53,370
ADR (a)
3,600 SK Energy Company, Ltd. 170,205
2,400 Woori Finance Holdings Company, Ltd. -
ADR (a) 27,936
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1,289,485
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SPAIN: 2.8%
495,675 Banco Santander Central Hispano
SA - ADR 2,983,964
67,700 Telefonica SA - ADR 3,761,412
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6,745,376
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SWITZERLAND: 10.0%
349,300 Abb, Ltd - ADR 4,209,065
166,800 Credit Suisse Group - ADR 4,029,888
168,050 Nestle SA 5,507,575
54,900 Roche Holding AG 6,241,570
44,306 Transocean, Ltd (a) 2,648,170
133,833 UBS AG (a) 1,211,184
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23,847,452
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TAIWAN: 0.2%
35,480 Advanced Semiconductor Engineering,
Incorporated - ADR 60,316
28,451 Hon Hai Precision - GDR 111,243
20,342 Siliconware Precision Industries,
Ltd - ADR 90,115
43,518 Taiwan Semiconductor Manufacturing
Company, Ltd. - ADR 328,126
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589,800
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10 The accompanying notes are an integral part of these financial statements.
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SHARES VALUE
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TURKEY: 0.1%
10,000 Turkcell Iletisim Hizmet AS - ADR $ 123,200
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UNITED KINGDOM: 2.7%
13,003 Anglo American Plc 186,337
170,000 Anglo American Plc - ADR 1,201,900
88,250 GlaxoSmithKline Plc - ADR 2,658,972
24,625 Rio Tinto Plc - ADR 2,511,750
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6,558,959
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UNITED STATES: 49.2%
157,550 Anadarko Petroleum Corp. 5,506,372
343,000 Applied Materials, Inc. 3,159,030
139,200 Carnival Corp. 2,722,752
120,500 Caterpillar, Inc. 2,965,505
394,000 Cisco Systems, Inc. (a) 5,740,580
162,000 The Coca-Cola Co. 6,617,700
104,700 ConocoPhillips 3,910,545
72,000 Devon Energy Corp. 3,144,240
221,700 Electronic Arts, Inc. (a) 3,615,927
352,550 EMC Corp. (a) 3,701,775
125,300 Freeport-McMoRan Copper & Gold, Inc. 3,811,626
281,150 General Electric Co. 2,392,587
151,900 Hewlett-Packard Co. 4,409,657
89,900 Honeywell International, Inc. 2,412,017
330,700 Intel Corp. 4,213,118
108,800 Johnson & Johnson 5,440,000
68,400 Lockheed Martin Corp. 4,316,724
131,200 Merck & Co., Inc. 3,175,040
313,500 Microsoft Corp. 5,063,025
111,500 Nucor Corp. 3,751,975
131,700 Occidental Petroleum Corp. 6,831,279
336,400 Oracle Corp. (a) 5,227,656
309,600 Pfizer, Inc. 3,811,176
69,225 Procter & Gamble Co. 3,334,568
127,000 Schlumberger Ltd. 4,833,620
75,000 Target Corp. 2,123,250
296,000 Time Warner, Inc. 2,258,480
103,600 United Technologies Corp. 4,229,988
100,900 Wal-Mart Stores, Inc. 4,968,316
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117,688,528
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The accompanying notes are an integral part of these financial statements. 11
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SHARES VALUE
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TOTAL COMMON STOCKS
(Cost $373,043,612) $ 236,495,474
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PREFERRED STOCKS: 0.2%
BRAZIL: 0.2%
13,250 Banco Itau Holding Financeira SA 121,635
3,100 Companhia de Bebidas das Americas
(AmBev) - ADR 125,426
21,000 Lojas Americanas SA 49,615
2,000 Uniao de Bancos Brasileiros SA 104,660
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401,336
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TOTAL PREFERRED STOCKS
(Cost $950,296) $ 401,336
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MUTUAL FUNDS: 1.2%
2,924,191 SEI Daily Income Trust Government Fund 2,924,191
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TOTAL MUTUAL FUNDS
(Cost $2,924,191) $ 2,924,191
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TOTAL INVESTMENTS
(Cost $376,918,099): 100.3% 239,821,001
Liabilities in Excess of Other Assets: (0.3)% (783,998)
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NET ASSETS: 100.0% $ 239,037,003
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ADR - American depositary receipt.
GRD - Global Depository Receipt.
(a) Non Income Producing
12 The accompanying notes are an integral part of these financial statements.
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SHARES VALUE
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INDUSTRY % OF NET ASSETS
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Oil, Gas & Consumable Fuels 14.5%
Pharmaceuticals 9.0%
Metals & Mining 8.4%
Software 5.8%
Commercial Banks 4.9%
Aerospace & Defense 4.6%
Wireless Telecommunication Services 4.5%
Food Products 4.4%
Communications Equipment 3.6%
Computers & Peripherals 3.4%
Semiconductors & Semiconductor Equipment 3.3%
Industrial Conglomerates 3.2%
Energy Equipment & Services 3.1%
Beverages 2.8%
Capital Markets 2.8%
Food & Staples Retailing 2.1%
Chemicals 1.9%
Household Durables 1.9%
Electrical Equipment 1.8%
Electric Utilities 1.7%
Diversified Telecommunication Services 1.7%
Machinery 1.5%
Automobiles 1.5%
Household Products 1.4%
Hotels, Restaurants & Leisure 1.1%
Real Estate Management & Development 1.0%
Media 0.9%
Multiline Retail 0.9%
Insurance 0.9%
Diversified Financial Services 0.4%
Electronic Equipment & Instruments 0.1%
Marine 0.0%
Internet Software & Services 0.0%
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TOTAL INVESTMENT IN SECURITIES 99.1%
CASH EQUIVALENT 1.2%
LIABILITIES IN EXCESS OF OTHER ASSETS -0.3%
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TOTAL NET ASSETS 100.0%
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The accompanying notes are an integral part of these financial statements. 13
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PURISIMA TOTAL RETURN FUND
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 2009 (UNAUDITED)
ASSETS
Investments in securities, at cost $ 376,918,099
Foreign Currency, at cost $ 1,136
=============
Investments in securities, at value $ 239,821,001
Foreign Currency, at value $ 1,719
Receivables:
Dividends and interest 968,435
Fund shares sold 40,115
Investments sold 1,983,868
Other assets 75,682
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Total Assets 242,890,820
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LIABILITIES
Payables for fund shares redeemed 262,401
Payables for investments purchased 3,129,875
Accrued advisory fees (Note 3) 186,481
Accrued distribution fees (Note 4) 151,124
Accrued fund administration, fund accounting,
transfer agent and custody fees 96,593
Other accrued expenses and liabilities 27,343
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Total Liabilities 3,853,817
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NET ASSETS $ 239,037,003
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Number of shares issued and outstanding
(unlimited shares authorized, $0.01 par value) 22,317,432
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NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $ 10.71
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COMPONENTS OF NET ASSETS
Paid-in capital $ 396,699,608
Accumulated net investment income gain 1,065,988
Accumulated net realized loss on investments (21,632,078)
Net unrealized depreciation on investments (137,097,098)
Net unrealized appreciation on foreign currency 583
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Net assets $ 239,037,003
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14 The accompanying notes are an integral part of these financial statements.
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PURISIMA TOTAL RETURN FUND
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 2009 (UNAUDITED)
TOTAL RETURN
FUND
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INVESTMENT INCOME
Income
Dividends (net of foreign taxes withheld of $244,335) $ 3,807,511
Interest income 28,669
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Total income 3,836,180
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EXPENSES
Advisory fees (Note 3) 1,541,085
Distribution fees (Note 4) 327,202
Administration fees (Note 3) 126,588
Transfer agent fees 107,965
Fund accounting fees 55,580
Custody fees 51,625
Insurance expense 44,045
Reports to shareholders 16,555
Registration fees 19,256
Audit fees 15,198
Legal fees 11,940
Trustee fees 11,127
Miscellaneous 5,624
Interest expense 222
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Total expenses 2,334,012
Less: Expenses waived by Adviser (Note 3) (22,010)
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Net expenses 2,312,002
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NET INVESTMENT INCOME 1,524,178
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REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized loss on investments (21,274,212)
Net realized loss on foreign currency (32,099)
Change in net unrealized depreciation on investments (186,271,184)
Change in net unrealized appreciation on foreign currency 3,200
-------------
Net loss on investments (207,574,295)
-------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(206,050,117)
=============
The accompanying notes are an integral part of these financial statements. 15
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PURISIMA TOTAL RETURN FUND
STATEMENT OF CHANGES IN NET ASSETS
TOTAL RETURN FUND
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, 2009 AUGUST 31, 2008
----------------- ---------------
INCREASE IN NET ASSETS FROM: (Unaudited)
OPERATIONS
Net investment income $ 1,524,178 $ 2,923,870
Net realized gain (loss) on investments and
foreign currency (21,306,311) 22,275,073
Change in net unrealized depreciation on
investments (186,271,184) (84,190,652)
Change in net unrealized
appreciation (depreciation) on foreign
currency 3,200 (2,617)
------------- -------------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS (206,050,117) (58,994,326)
------------- -------------
DISTRIBUTION TO SHAREHOLDERS
From net investment income (2,541,948) (1,298,261)
From net realized gain on investments (6,295,704) (34,522,389)
------------- -------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (8,837,652) (35,820,650)
------------- -------------
CAPITAL SHARE TRANSACTIONS
Net increase (decrease) in net assets
derived from net change in outstanding
shares (a) (1,687,454) 84,703,220
------------- -------------
TOTAL DECREASE IN NET ASSETS (216,575,223) (10,111,756)
------------- -------------
NET ASSETS
Beginning of period 455,612,226 465,723,982
------------- -------------
END OF PERIOD $ 239,037,003 $ 455,612,226
============= =============
Undistributed net investment income $ 1,065,988 $ 287,038
============= =============
(a) A summary of capital share transactions is as follows:
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, 2009* AUGUST 31, 2008
--------------------------- ------------------------------
SHARES VALUE SHARES VALUE
------------ ------------- -------------- -------------
Shares sold 1,805,552 $ 25,441,228 5,193,681 $ 118,169,093
Shares issued on reinvestment
of distributions 620,071 $ 8,228,346 1,428,514 $ 33,170,091
Shares redeemed (2,608,562) (35,357,028) (2,906,534) $ (66,635,964)
---------- ------------- ---------- -------------
Net increase (182,939) $ (1,687,454) 3,715,661 $ 84,703,220
========== ============= ========== =============
- --------
* Unaudited.
16 The accompanying notes are an integral part of these financial statements.
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PURISIMA TOTAL RETURN FUND
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.
SIX MONTHS
ENDED YEAR ENDED AUGUST 31,
FEB. 29, ----------------------------------------------------------
2009++ 2008 2007 2006 2005 2004
---------- ---------- ---------- ---------- ---------- ----------
Net asset value,
beginning of period $ 20.25 $ 24.79 $ 21.51 $ 19.03 $ 16.58 $ 15.31
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM
INVESTMENT OPERATIONS:
Net investment income 0.07 0.15 0.09 0.04 0.10 0.07
Net realized and
unrealized gain
(loss) on
investments (9.20) (2.82) 3.27 2.72 2.42 1.27
---------- ---------- ---------- ---------- ---------- ----------
Total from investment
operations (9.13) (2.67) 3.36 2.76 2.52 1.34
---------- ---------- ---------- ---------- ---------- ----------
Less distributions:
From net investment (0.12) (0.07) (0.08) (0.28) (0.07) (0.07)
income
From net realized gain (0.29) (1.80) -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Total distributions (0.41) (1.87) (0.08) (0.28) (0.07) (0.07)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end $ 10.71 $ 20.25 $ 24.79 $ 21.51 $ 19.03 $ 16.58
========== ========== ========== ========== ========== ==========
of period
Total return (45.50%)** (11.75%) 15.63% 14.54% 15.20% 8.72%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
period (millions) $ 239.0 $ 455.6 $ 465.7 $ 387.3 $ 325.4 $ 298.6
RATIO OF EXPENSES TO
AVERAGE NET ASSETS:
Before fees waived and
expenses absorbed
or recouped 1.51%* 1.41% 1.39% 1.49% 1.46% 1.49%
After fees waived and
expenses absorbed
or recouped 1.50%* 1.41% 1.39% 1.49% 1.49% 1.50%
RATIO OF NET
INVESTMENT
INCOME TO AVERAGE
NET ASSETS # 0.99%* 0.61% 0.37% 0.21% 0.52% 0.42%
Portfolio turnover 12.06%** 42.60% 16.38% 43.47% 16.68% 19.50%
rate
- -----------
* Annualized.
** Not annualized.
++ Unaudited.
# Net of fees waived.
The accompanying notes are an integral part of these financial statements. 17
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PURISIMA TOTAL RETURN FUND
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2009 (UNAUDITED)
NOTE 1 - ORGANIZATION
The Purisima Funds (the "Trust") was organized as a Delaware statutory 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 accompanying financial statements
include the Total Return Fund (the "Fund"), which commenced operations on
October 28, 1996, one of the two portfolios comprising the Trust. Fisher Asset
Management, LLC (doing business as Fisher Investments) (the "Adviser") serves as
the investment adviser to the Funds.
The investment objective of the Total Return Fund is as follows:
The Fund seeks a high total return. The Fund seeks to achieve its objective by
investing in a portfolio allocated between domestic and foreign common stocks,
fixed-income securities, money market instruments and other equity-type
securities. The Fund's investments in different types of securities may vary
significantly.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its 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 are valued at the last sales price on the business
day as of which such value is being determined. If on a particular
day, an exchange-listed security does not trade, then the mean between
the bid and asked prices will be used. Foreign exchange traded equity
securities are valued based upon the price on the exchange or market
on which they trade as of the close of business of such market or
exchange immediately preceding the time the Fund's net asset value is
determined. Investments in securities traded on the NASDAQ Global
Market, the NASDAQ Global Select Market and the NASDAQ Capital Market
will be valued at the NASDAQ Official Closing Price ("NOCP"), which
may not necessarily represent the last sale price. 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 price.
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, taking into consideration: (I)
fundamental analytical data relating to the investment; (II) the
nature and duration of restrictions on disposition of the securities;
and (III) an evaluation of the forces which influence the market in
which these securities are purchased and sold. Debt securities with
remaining maturities of 60 days or less are valued at amortized cost
which, when combined with accrued interest, approximates market value.
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The Funds adopted the provisions of Statement of Financial Accounting
Standards No. 157, "Fair Value Measurements" ("SFAS 157"), effective
with the beginning of the Portfolio's fiscal year. SFAS 157
establishes a hierarchy that prioritizes the inputs to valuation
techniques giving the highest priority to readily available unadjusted
quoted prices in unobservable inputs (level 3 measurements) when
market prices are not readily available or reliable. See Note 6 - Fair
Value of Financial Instruments for further disclosure.
B. FOREIGN CURRENCY TRANSLATION. The Fund's records are maintained in
U.S. dollars. The value of securities, currencies and other assets and
liabilities denominated in currencies other than U.S. dollars are
translated into U.S. dollars based upon foreign exchange rates
prevailing at the end of the reporting period. Purchases and sales of
investment securities, income and expenses are translated on the
respective dates of such transactions.
The Fund does not isolate that portion of their net realized and
unrealized gains and losses on investments resulting from changes in
foreign exchange rates from the impact arising from changes in market
prices. Such fluctuations are included with net realized and
unrealized gain or loss from investments and foreign currency.
Net realized foreign currency transaction gains and losses arise from
sales of foreign currencies, currency gains or losses realized between
the trade and settlement dates on securities transactions, and the
differences between the amounts of dividends, interest, and foreign
withholding taxes recorded on the Fund books and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized
foreign currency translation gains and losses arise from changes in
the value of assets and liabilities, other than investments in
securities, resulting from changes in the exchange rates.
C. FEDERAL INCOME AND EXCISE TAXES. The Fund intends to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its income
to its shareholders. Therefore, no federal income or excise tax
provision is required.
The Fund may be subject to foreign taxes on income, gains on
investments or currency repatriation, a portion of which may be
recoverable. The Fund will accrue such taxes and recoveries as
applicable based upon its current interpretations of the tax rules and
regulation that exist in the markets in which it invests.
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 positions 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
Fund's 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. Adoption of FIN 48 is required as of the date of the last
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Net Asset Value ("NAV") calculation in the first required financial
statement reporting period for fiscal years beginning after December
15, 2006 and is to be applied to all open tax years as of the
effective date. The Fund adopted FIN 48 effective February 29, 2008.
Management of the Fund has reviewed the tax positions for the fiscal
years ending August 31, 2005 through 2008 and has determined that the
adoption of FIN 48 did not have a material impact on the Fund's
financial statements.
D. SECURITY TRANSACTIONS, INVESTMENT INCOME AND DISTRIBUTIONS. Security
transactions are accounted for on trade date. Dividend income and
distributions to shareholders are recorded on the ex-dividend date and
interest income is recognized on the accrual basis. Realized gains and
losses are evaluated on the bases of identified costs.
E. 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.
F. 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.
G. SECURITIES SOLD SHORT. To the extent the Fund engages in selling
securities short, it is obligated to replace a security borrowed by
purchasing the same security at the current market value. The Fund
would incur a loss if the price of the security increases between the
date of the short sale and the date on which the Fund replaces the
borrowed security. The Fund would realize a gain if the price of the
security declines between those dates.
The Fund is 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 Fund 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.
H. RECLASSIFICATION OF CAPITAL ACCOUNTS. Accounting principles generally
accepted in the United States of America require that certain
components of net assets relating to permanent difference be
reclassified between financial and tax reporting. These
reclassifications have no effect on net assets or net asset value per
share. For the year ended August 31, 2008, the Total Return Fund
increased accumulated undistributed net investment income by
$1,734,271, decreased accumulated net realized gain on investments by
$1,796,718, and increased paid-in capital by $62,447.
I. INDEMNIFICATION OBLIGATIONS. Under the Fund's organizational
documents, its current and former officers and trustees are
indemnified against certain liabilities arising out of the performance
of their duties to the Fund. In addition, in the normal course of
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business, the Fund enters into contracts that contain a variety of
representations and warranties that provide general indemnifications.
The Fund's maximum exposure under these arrangements is unknown as
this would involve future claims that may be made against the Fund
that have not yet occurred or that would be covered by other parties.
J. LINE OF CREDIT. The Fund has a Loan Agreement with U.S. Bank N.A.
Under the terms of the Loan Agreement, the Fund's borrowings cannot
exceed the lesser of $8,000,000 or 33 1/3% of the net assets of the
Fund. The interest rate paid on the Loan equals the prime rate per
annum, payable monthly.
Borrowing activity under the Loan Agreement for the six months ended
February 28, 2009, was as follows:
MAXIMUM AMOUNT AVERAGE AVERAGE
AMOUNT INTEREST OUTSTANDING AT AMOUNT INTEREST
OUTSTANDING EXPENSE FEBRUARY 28, 2009 OUTSTANDING RATE
- ----------- ------- ----------------- ----------- ----
$ 748,000 $ 222 $ 0 $ 17,983 2.750%
NOTE 3 - COMMITMENTS, OTHER RELATED PARTY TRANSACTIONS AND
OTHER SERVICE PROVIDERS
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 Fund.
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
contractually 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
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, 2009, the Adviser waived fees of $22,010.
U.S. Bank, N.A. serves as the Fund's Custodian. U.S. Bancorp Fund Services, LLC
("USBFS"), an affiliate of U.S. Bank, N.A., serves as the Administrator, Fund
Accountant and Transfer Agent. Certain officers of the Trust, including the
Trust's Treasurer, are employees of the Administrator. In its capacity as the
Fund's Administrator, USBFS provides general fund management including corporate
secretarial services, coordinates the preparation of materials for the Board of
Trustees, assists with the annual audit of the Fund's financial statements,
monitors the Fund's compliance with federal and state regulations as well as
investment restrictions, coordinates the payment of Fund expenses and monitors
expense accruals, prepares financial statements and non-investment related
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statistical data and makes required tax reporting calculations. During the six
months ended February 28, 2009, Purisima Total Return Fund paid USBFS $126,588
for services rendered in its capacity as the Trust's Administrator.
Quasar Distributors, LLC, an affiliate of U.S. Bank, N.A., and USBFS serves as
principal underwriter of the Fund and acts as the Fund's distributor in a
continuous public offering of the Fund's shares.
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, 2009, the
Fund incurred $327,202 in distribution fees. Quasar Distributors, LLC, an
affiliate of the Administrator, serves as distributor of the Fund pursuant to a
Distribution Agreement with the Trust.
NOTE 5 - INVESTMENT TRANSACTIONS
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, 2009 were as follows:
FUND PURCHASES SALES
---- --------- -----
Total Return Fund $38,290,803 $44,441,048
NOTE 6 - FAIR VALUE OF FINANCIAL INSTRUMENTS
In September 2006, the Financial Accounting Standards Board issued Standard No.
157, "Fair Value Measurements" effective for fiscal years beginning after
November 15, 2007. SFAS 157 clarifies the definition of fair value for financial
reporting, establishes a framework for measuring fair value and requires
additional disclosure about the use of fair value measurements in an effort to
make the measurement of fair value more consistent and comparable. The Fund
adopted SFAS 157 effective September 1, 2008. A summary of the fair value
hierarchy under SFAS 157 is described below.
Various inputs are used in determining the value of the Fund's investments.
These inputs are summarized in the three broad levels listed below:
Level 1 - Quoted prices in active markets for identical securities.
Level 2 - Other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit
risk, etc.).
Level 3 - Significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments).
The following table provides the fair value measurements of applicable Fund
assets by level within the fair value hierarchy for each Fund as of February
28, 2009. These assets are measured on a recurring basis.
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DESCRIPTION INVESTMENTS IN SECURITIES
- --------------------------------------------------------------------------------
Level 1 - Quoted prices $ 239,644,209
Level 2 - Other significant observable inputs $ 176,792
Level 3 - Significant unobservable inputs $ --
- --------------------------------------------------------------------------------
Total $ 239,821,001
NOTE 7 - FEDERAL INCOME TAX MATTERS
The difference between the book and tax basis components of the distributable
earnings relate principally to the timing of recognition of income and gains for
federal income tax purposes. These differences are primarily attributable to the
tax deferral of losses on wash sales, the realization for tax purposes of
unrealized gains on passive foreign investment companies and return of capital
distributions and income adjustments recognized for tax purposes on real estate
investment trusts. Short-term gains distributions reported in the Statements of
Changes of Net Assets, if any, are reported as ordinary income for federal tax
purposes.
As of August 31, 2008, the components of distributable earnings on a tax basis
were as follows:
TOTAL RETURN
------------
Cost of investments for tax purposes $ 408,276,580
=============
Gross tax unrealized appreciation $ 88,671,810
Gross tax unrealized depreciation (39,842,551)
-------------
Net tax unrealized appreciation 48,829,259
-------------
Undistributed ordinary income 2,197,327
Undistributed Long Term Capital Gains 6,295,144
-------------
Total distributable earnings 8,492,471
-------------
Other accumulated earnings (96,566)
-------------
Total accumulated earnings $ 57,225,164
=============
Under current tax law, capital losses realized after October 31 may be deferred
and treated as occurring on the first day of the following fiscal year. At
August 31, 2008, the Fund deferred, on a tax basis, $93,949 of Post-October
losses.
The tax composition of dividends are as follows:
ORDINARY LONG TERM
INCOME CAPITAL GAINS
------ -------------
Total Return Fund
2/28/2009 $ 2,541,948 $ 6,295,704
8/31/2008 $ 1,298,261 $ 34,522,389
The Fund designated as long-term capital gain dividend, pursuant to Internal
Revenue Code Section 852(b)(3), the amount necessary to reduce the earnings and
profits of the Fund related to net capital gain to zero for the tax year ended
August 31, 2008.
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NOTE 8 - RECENT ACCOUNTING PRONOUNCEMENTS
In March 2008, Statement of Financial Accounting Standards No. 161, "Disclosures
about Derivative Instruments and Hedging Activities" ("SFAS 161") was issued and
is effective for fiscal years beginning after November 15, 2008. SFAS 161 is
intended to improve financial reporting for derivative instruments by requiring
enhanced disclosure that enables investors to understand how and why an entity
uses derivatives, how derivatives are accounted for, and how derivative
instruments affect an entity's results of operation and financial position.
Management is currently evaluating the implications of SFAS 161. The impact on
the Fund's financial statement disclosures, if any, is currently being assessed.
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PURISIMA TOTAL RETURN FUND
OTHER INFORMATION
BOARD CONSIDERATION OF AND CONTINUATION OF INVESTMENT ADVISORY AGREEMENT
(UNAUDITED)
On October 30, 2008, the Board of Trustees performed its annual
review and renewal of the Investment Management Agreement for the Total Return
Fund for the one-year period commencing November 1, 2008. The Board of Trustees,
including the Independent Trustees, took into consideration information provided
at the meeting, as well as a wide variety of materials relating to the services
provided by the Adviser, including reports on the Fund's investment results;
portfolio composition; portfolio trading practices; and other information
relating to the nature, extent and quality of services provided by the Adviser
to the Fund. In addition, the Board discussed and reviewed information regarding
the Fund's investment results, advisory fee and expense comparisons,
descriptions of various functions such as compliance monitoring and portfolio
trading practices, and information about the personnel providing investment
management and administrative services to the Fund. The Board's Independent
Trustees met separately to discuss the various factors summarized below, both
without and then with legal counsel to the Fund, who is not independent legal
counsel.
In deciding to renew the Agreement, the Board of Trustees did not identify any
single factor or particular information that, in isolation, was the controlling
factor. This summary describes the most important, but not all, of the factors
considered by the Board.
1. Nature, Extent and Quality of Services
THE ADVISER, ITS PERSONNEL AND ITS RESOURCES. The Board considered the
depth and quality of the Adviser's investment management process,
including its sophisticated methodology; the experience, capability
and integrity of its senior management and other personnel; the low
turnover rates of its key personnel; and the overall financial
strength and stability of its organization. The Board discussed the
quality of the services provided by the Adviser and noted that the
quarterly report from the Adviser was extremely sophisticated and
thorough. The Board commented on the high quality of the independent
capital markets research conducted by the Adviser and reported to the
Board on a regular basis. The Board's consensus was that the Adviser
was open about its thinking on the management of the Fund and very
available to address any questions or concerns the Board may have from
time to time. The Board also considered that the Adviser made
available to its investment professionals a variety of resources and
systems relating to investment management, compliance, trading,
performance and portfolio accounting. The Board further considered the
Adviser's continuing need to attract and retain qualified personnel
and to maintain and enhance its resources and systems. The Board also
observed that the Adviser had maintained the quality of services
provided to the Fund despite the continued relatively small share of
the Adviser's assets under management represented by the Fund,
typically around one percent.
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OTHER SERVICES. The Board considered the Adviser's policies,
procedures and systems to ensure compliance with applicable laws and
regulations and its commitment to these programs; its efforts to keep
the Trustees informed; and its attention to matters that may involve
conflicts of interest with the Fund.
The Board concluded that the nature, extent and quality of the
services provided by the Adviser has benefited and should continue to
benefit the Fund and its shareholders..
2. Investment Performance
The Board considered the Fund's pursuit of its investment objective
and the investment results of the Fund in light of its objective. The
Trustees compared the Fund's total returns with various independent
securities price indexes (the Standard & Poor's 500 Stock Price Index,
the Morgan Stanley Capital Institutional World Index and the Morgan
Stanley Capital International EAFE Index) and mutual fund peer groups
objectively compiled using data from Morningstar, Inc., and noted the
satisfactory performance of the Fund during various periods compared
to those indexes over various periods. The Board noted that the Fund's
relative performance against the indexes and the peer group for
various longer and shorter terms showed more underperformance than the
largely favorable comparison noted during various prior contract
renewal sessions of the Board. The Board will continue to monitor
performance, but also understands the challenges of recent market
conditions and does not view these more recent results as typical or
as justifying disregard of prior favorable findings.
The Board concluded that the Adviser's performance record in managing
the Fund indicates that its continued management has benefited and
should continue to benefit the Fund and its shareholders.
3. Advisory Fees and Total Expenses
The Board reviewed the advisory fees and total expenses of the Fund
and compared such amounts with the average fee and expense levels of
other funds in an applicable group of peer funds compiled using data
from Morningstar, Inc. The Board observed that the Fund's advisory
fees and total expenses were reasonable compared to the median fee and
expense levels of the comparable funds in the indices (meaning at or
below the median). The Board noted that, in the past, the Adviser had
waived significant fees in respect of the Fund to maintain an overall
expense limitation, which the Adviser would not be able to recoup,
thus indicating a substantial prior investment by the Adviser in that
Fund. The Board noted that the Fund is currently operating slightly
below its expense limit. The Board concluded that the reasonable level
of the fees charged by the Adviser benefits the Fund and its
shareholders. The Board then considered the fees charged to the Fund
versus the Adviser's private clients. The Board considered the extra
burden of administration, compliance, deadlines, risk and regulations
associated with the Fund that do not apply to the private accounts.
The Board determined that the respective peer groups provided a better
comparison and it found the Fund's fees reasonable.
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4. Adviser, Costs, Level of Profits and Economies of Scale
The Board discussed the Adviser's costs of providing services to the
Fund, as well as the resulting level of profits to the Adviser. The
Board considered the Adviser's need to invest in technology,
infrastructure and staff to reinforce and offer new services and to
accommodate changing regulatory requirements. The Trustees noted that
at its present asset size, breakpoints in the Fund's advisory fee
structure were not practicable, but that economies of scale in the
cost of operations, to the extent they exist, effectively were being
shared given the Adviser's past waiver of fees in respect of the Fund.
The Board did not specifically examine the Adviser's level of
profitability on the Fund given the Fund's relatively small size
compared to the rest of the Adviser's assets under management and the
reasonability of the Fund's fees and expenses compared to peer funds.
The Board concluded that the Fund's cost structure is reasonable.
5. Ancillary Benefits
The Board considered a variety of other benefits received by the
Adviser, including possible ancillary benefits to itself or its
institutional management business. The Board noted that the Adviser
ceased the use of third-party soft dollar products from trades by the
Fund, and noted that the small relative size of the Fund compared to
the Adviser's other business would suggest minimal possible fallout
benefits.
6. Conclusions
Based on its review, including consideration of each of the factors
referred to above, the Board concluded that the Agreement is fair and
reasonable to the Fund and its shareholders, that the Fund's
shareholders received, and should receive, reasonable value in return
for the advisory fees paid to the Adviser by the Fund, and that the
renewal of the Agreement was in the best interests of the Fund and its
shareholders.
PROXY VOTING PROCEDURES (UNAUDITED)
The Adviser votes proxies relating to portfolio securities in accordance with
procedures that have been approved by the Trust's Board of Trustees. You may
obtain a description of these procedures, free of charge, by calling toll-free
1-800-841-0199. This information is also available through the Securities and
Exchange Commission's website at http://www.sec.gov.
Information regarding how the Fund voted proxies relating to the portfolio
securities during the most recent 12-month period ended June 30 is available
without charge, upon request, by calling toll-free 1-800-841-0199. This
information is also available through the Securities and Exchange Commission's
website at http://www.sec.gov.
FORM N-Q DISCLOSURE (UNAUDITED)
The Fund files its complete schedule of portfolio holdings with the SEC for the
first and third fiscal quarters on Form N-Q. The Fund's Form N-Q is available
without charge, upon request, by calling 1-800-841-0199. Furthermore, you can
obtain the Form N-Q on the SEC's website at www.sec.gov.
27
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PURISIMA TOTAL RETURN FUND
TRUSTEES AND OFFICER INFORMATION (UNAUDITED)
The Board of Trustees is responsible for the overall management of the Trust's
business. The Board of Trustees approves all significant agreements between the
Trust and persons or companies furnishing services to it, including all
agreements with the Adviser, Administrator, Custodian and Transfer Agent. The
Board of Trustees delegates the day-to-day operations of the Trust to its
Officers, subject to the Fund's investment objective and policies and to general
supervision by the Board of Trustees. The Statement of Additional Information
includes additional information about the Trust's Trustees and is available,
without charge, by calling 1-800-841-0199.
The Trustees and Officers of the Trust, their business addresses and principal
occupations during the past five years are:
Name, Address, Position(s) Held Date
of Birth with Trust Year Elected(1)
- --------------------------------------------------------------------------------
Kenneth L. Fisher* (born 1950) President and
13100 Skyline Blvd. Trustee 1996
Woodside, CA 94062
- --------------------------------------------------------------------------------
Pierson E. Clair III (born 1948) Trustee 1996
13100 Skyline Blvd.
Woodside, CA 94062
- --------------------------------------------------------------------------------
Scott LeFevre (born 1957) Trustee 2001
13100 Skyline Blvd.
Woodside, CA 94062
- --------------------------------------------------------------------------------
Alfred D. McKelvy, Jr. (born 1948) Trustee 2003
13100 Skyline Blvd.
Woodside, CA 94062:
- --------------------------------------------------------------------------------
Bryan F. Morse (born 1952) Trustee 1996
13100 Skyline Blvd.
Woodside, CA 94062
- --------------------------------------------------------------------------------
Grover T. Wickersham (born 1949) Trustee 1996
13100 Skyline Blvd.
Woodside, CA 94062
28
{LOGO}
- -------------------------------------------------------------------------
Number of
Portfolios in
Fund Complex Other
Principal Occupation(s) Overseen by Directorships
During Past Five Years Director Held
- --------------------------------------------------------------------------------
Chief Executive Officer and majority 2 None
shareholder of Fisher Investment, Inc.,
the sole shareholder of the Adviser,
and has served in 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 1979.
- --------------------------------------------------------------------------------
President and Chief Executive Officer of 2 Signature
Brown & Haley since 1998 (fine confectioners); Foods, Inc.
Vice President of Blummer Chocolate Company
from 1980 to 1997, where he had been
employed since 1970.
- --------------------------------------------------------------------------------
Sole proprietor of LeFevre Capital 2 None
Management, a registered investment adviser.
- --------------------------------------------------------------------------------
President and Chief Executive Officer
of Omnimetric Services, LLC since 2009
Executive Director of the law firm of 2 East Bay BOMA;
Berding & Weil, LLP since 1990. BOMA California;
Heritage Bank
(Advisory Board).
- --------------------------------------------------------------------------------
Sole proprietor of Bryan F. Morse, RIA, 2 None
a registered investment adviser since 1990.
- --------------------------------------------------------------------------------
Attorney in private practice in Palo Alto, 2 None
California. Prior to entering private
practice in June of 1981, served as a Branch
Chief of the Los Angeles Regional Office
of the U.S. Securities and Exchange Commission.
- --------------------------------------------------------------------------------
29
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Position(s) Held
Name, Address, Age with Trust Year Elected(1)
- --------------------------------------------------------------------------------
Tom Fishel (born 1960) Chief 2005
13100 Skyline Blvd. Compliance
Woodside, CA 94062 Officer
- --------------------------------------------------------------------------------
Keith Shintani (born 1963) Secretary and 2006
2020 East Financial Way Assistant
Glendora, CA 91741 Treasurer
- --------------------------------------------------------------------------------
Michael Ricks (born 1977) Treasurer 2006
2020 East Financial Way
Glendora, CA 91741
- --------------------------------------------------------------------------------
- -------
(1) Trustees and officers of the Funds serve until their resignation, removal or
retirement.
* "Interested person" of the Trust, as defined in the 1940 Act.
30
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- -------------------------------------------------------------------------
Number of
Portfolios in
Fund Complex Other
Principal Occupation(s) Overseen by Directorships
During Past Five Years Director Held
- --------------------------------------------------------------------------------
Vice President and Chief Compliance Officer of N/A None
the Adviser. Vice President of Charles Schwab
& Co., Inc. from 1995 to 2004, where he had
been employed since 1983.
- --------------------------------------------------------------------------------
Vice President of U.S. Bancorp Fund N/A None
Services, LLC and its predecessor,
Investment Company Administration, LLC since 1998.
- --------------------------------------------------------------------------------
Assistant Vice President of U.S. Bancorp Fund N/A None
Services, LLC since 2001.
- --------------------------------------------------------------------------------
31
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PRIVACY NOTICE
FISHER ASSET MANAGEMENT, LLC (doing business as Fisher Investments) and
THE PURISIMA FUNDS collect non-public information about you from the following
sources:
o Information we receive about you on applications or other forms;
o Information you give us orally; and
o Information about your transactions with us or others.
We are committed to protecting your privacy and your non-public personal
information. We do not sell or market your non-public personal information to
unaffiliated organizations. We maintain physical, electronic and procedural
safeguards to guard your non-public personal information. We hold our employees
to strict standards of conduct regarding confidentiality, and employees who
violate our Privacy Policy are subject to disciplinary process. We restrict
access to your information to those employees who need to know that information
to carry out their duties.
We do not disclose any non-public personal information about our clients or
former clients without the client's authorization, except as permitted by law.
We may disclose the non-public information we collect to employees and
affiliates, and unaffiliated third parties as permitted by law. Third parties
may include law enforcement agencies, government and regulatory authorities, and
professionals such as our legal counsel and auditors, and we may disclose
information for reasons such as audit purposes, prevention of fraud or money
laundering, protection of confidentiality, compliance with laws, and to provide
agreed upon products and services to you. Third parties may also include service
providers performing financial services for us (such as brokers and custodians)
and service providers performing non-financial services for us (such as third
parties performing computer related or data maintenance, marketing or other
services for us or to assist us in offering our products and services to you).
It is our policy to require all third party service providers that will receive
information to sign strict confidentiality agreements agreeing to safeguard such
information and use it only for the purpose it was provided.
32
This page is intentionally left blank.
- --------------------------------------------------------------------------------
The Purisima Funds
- --------------------------------------------------------------------------------
Semi-Annual Report
February 28, 2009
The Purisima All-Purpose Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A LETTER TO OUR SHAREHOLDERS
Welcome to the semi-annual report for the Purisima All-Purpose Fund for the
six-month period ended February 28, 2009. The Fund seeks to provide protection
against declines in the value of the U.S. and foreign equity markets. During the
period, the Fund was primarily invested in US government securities.
Thank you for your continued interest and support.
Sincerely,
Kenneth L. Fisher
Chairman and Chief Investment Officer
Fisher Investments
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.
FUND HOLDINGS AND SECTOR ALLOCATIONS ARE SUBJECT TO CHANGE AND ARE NOT
RECOMMENDATIONS TO BUY OR SELL ANY SECURITY.
MUTUAL FUND INVESTING INVOLVES RISK. PRINCIPAL LOSS IS POSSIBLE. THE FUND MAY
USE SHORT SALES OF SECURITIES, WHICH INVOLVE THE RISK THAT LOSSES MAY EXCEED THE
ORIGINAL AMOUNT INVESTED. THE FUND MAY ALSO USE OPTIONS AND FUTURES CONTRACTS,
WHICH HAVE THE RISKS OF UNLIMITED LOSSES OF THE UNDERLYING HOLDINGS DUE TO
UNANTICIPATED MARKET MOVEMENTS AND FAILURE TO CORRECTLY PREDICT THE DIRECTION OF
SECURITIES PRICES, INTEREST RATES AND CURRENCY EXCHANGE RATES. THE FUND MAY
INVEST IN FOREIGN SECURITIES WHICH INVOLVE GREATER VOLATILITY AND POLITICAL,
ECONOMIC AND CURRENCY RISKS AND DIFFERENCES IN ACCOUNTING METHODS. THE FUND MAY
INVEST IN DEBT SECURITIES WHICH TYPICALLY DECREASE IN VALUE WHEN INTEREST RATES
RISE. THIS RISK IS GREATER FOR LONGER-TERM DEBT SECURITIES.
THE FUND IS NON-DIVERSIFIED, MEANING IT MAY CONCENTRATE ITS ASSETS IN FEWER
INDIVIDUAL HOLDINGS THAN A DIVERSIFIED FUND. THEREFORE, THE FUND IS MORE EXPOSED
TO INDIVIDUAL STOCK VOLATILITY THAN A DIVERSIFIED FUND. AN INVESTMENT IN THE
FUND IS NOT SUITABLE FOR ALL INVESTORS.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY A PROSPECTUS.
FISHER INVESTMENTS IS THE ADVISER TO THE PURISIMA FUNDS. THE PURISIMA FUNDS ARE
DISTRIBUTED BY QUASAR DISTRIBUTORS, LLC. 04/09
-1-
SECTOR BREAKDOWN(1)
(Unaudited)
PURISIMA ALL-PURPOSE FUND
- --------------------------------------------------------------------------------
U.S. Treasury Obligations 53.3%
Mutual Funds 46.7%
- --------------------------------------------------------------------------------
Total 100.0%
(1) Percentage of Total Investments as of February 28, 2009.
-2-
IMPORTANT INFORMATION
The following disclosure provides important information regarding the Fund's
Expense Example. Please refer to this information when reviewing the Expense
Example for the Fund.
EXPENSE EXAMPLE (UNAUDITED)
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs; and (2) ongoing costs, including management 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 indicated and held for the entire period from September 1, 2008 to
February 28, 2009 for the Purisima All-Purpose Fund.
ACTUAL EXPENSES
The information in the table under the heading "Actual Performance" provides
information about actual account values and actual expenses. You may use the
information in these columns 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 row entitled "Expenses Paid During
Period" to estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The information in the table under the heading "Hypothetical Performance (5%
return before expenses)" provides information about hypothetical account values
and hypothetical expenses based on the Fund's actual expense ratios and assumed
rates of return of 5% per year before expenses, which are not the Fund's actual
returns. 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.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transaction costs, such as sales
charges (loads), or redemption fees. Therefore, the information under the
heading "Hypothetical Performance (5% return before expenses)" 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.
-3-
EXPENSE EXAMPLE (UNAUDITED)
PURISIMA ALL-PURPOSE FUND ACUTAL HYPOTHETICAL PERFORMANCE
(Inception date: 11/01/2005) PERFORMANCE (5% RETURN BEFORE EXPENSES)
- --------------------------------------------------------------------------------
Beginning Account Value (9/01/08) $1,000.00 $1,000.00
Ending Account Value (02/28/09) $1,010.00 $1,017.36
Expenses Paid During Period(1) $ 7.48 $7.50
- --------------------------------------------------------------------------------
(1) Expenses are equal to the Fund's expense ratio for the six month period of
1.50% for the Purisima All-Purpose Fund multiplied by the average account
value over the period, multiplied by 181/365 (to reflect the one-half year
period).
-4-
PURISIMA ALL-PURPOSE FUND
SCHEDULE OF INVESTMENTS FEBRUARY 28, 2009 (UNAUDITED)
SHARES/PRINCIPAL AMOUNT VALUE
- --------------------------------------------------------------------------------
U.S. TREASURY NOTES: 42.4%
10,000 5.125%, 06/30/2011 $ 10,914
10,000 4.000%, 09/30/2009 10,200
----------
TOTAL U.S. TREASURY NOTES (COST $20,907) 21,114
----------
MUTUAL FUNDS: 37.1%
18,514 SEI Daily Income Trust Government Fund 18,514
----------
TOTAL MUTUAL FUNDS (COST $18,514)
TOTAL INVESTMENTS (COST $39,421): 79.5% 39,628
OTHER ASSETS IN EXCESS OF LIABILITIES: 20.5% 10,191
----------
TOTAL NET ASSETS: 100.0% $ 49,819
==========
-5-
PURISIMA ALL-PURPOSE FUND
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 2009 (UNAUDITED)
================================================================================
ALL-PURPOSE FUND
----------------
ASSETS
Investments in securities, at cost $ 39,421
=============
Investments in securities, at value $ 39,628
Receivables:
Dividends and interest 257
Due from Adviser (Note 3) 10,890
Prepaid expenses 15,651
-------------
Total Assets 66,426
-------------
LIABILITIES
Accrued administration fees (Note 3) 1,799
Accrued transfer agent fees 2,518
Accrued audit fees 6,738
Accrued fund accounting fees 4,953
Other accrued expenses 599
-------------
Total Liabilities 16,607
-------------
NET ASSETS $ 49,819
=============
Number of shares issued and outstanding
(unlimited shares authorized, $0.01 par value) 4,970
=============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE
PER SHARE $ 10.02
=============
COMPONENTS OF NET ASSETS
Paid-in capital $ 49,785
Accumulated net investment income (67)
Accumulated net realized loss on investments (106)
Net unrealized appreciation on investments 207
-------------
Net assets $ 49,819
=============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
-6-
PURISIMA ALL-PURPOSE FUND
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 2009 (UNAUDITED)
================================================================================
ALL-PURPOSE
FUND
-----------
INVESTMENT INCOME
Income
Interest $ 312
-----------
Total income 312
-----------
Expenses
Advisory fees 164
Administration fees 18,692
Transfer agent fees 7,520
Fund accounting fees 15,064
Custody fees 1,629
Reports to shareholders 1,679
Registration fees 10,100
Audit fees 6,848
Legal fees 2
Trustee fees 10,860
Miscellaneous 368
-----------
Total expenses 72,926
Less: Expenses waived by Adviser (Note 3) (72,680)
-----------
Net expenses 246
-----------
NET INVESTMENT INCOME 66
-----------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS
Net realized gain on investments 7
Change in net unrealized appreciation on investments 207
-----------
Net gain on investments 214
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 280
===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
-7-
PURISIMA ALL-PURPOSE FUND
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED YEAR ENDED
FEBRUARY 28, AUGUST 31,
INCREASE IN NET ASSETS FROM: 2009 2008
------------------------
(UNAUDITED)
OPERATIONS
Net investment income $ 66 $ 1,289
Net realized gain on investments 7 9
Change in net unrealized appreciation
(depreciation) on investments 207 (96)
-------- --------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 280 1,202
-------- --------
DISTRIBUTION TO SHAREHOLDERS
From net investment income (900) (1,717)
From net realized gains from investments (121)
-------- --------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (1,021) (1,717)
-------- --------
CAPITAL SHARE TRANSACTIONS
Net increase in net assets derived from
net change in outstanding shares (a) 21,021 1,717
-------- --------
TOTAL INCREASE IN NET ASSETS 20,280 1,202
-------- --------
NET ASSETS
Beginning of period 29,539 28,337
-------- --------
END OF PERIOD $ 49,819 $ 29,539
======== ========
Undistributed net investment income $ (67) $ 767
-------- --------
(a) A summary of capital share transactions is as follows:
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, 2009* AUGUST 31, 2008
------------------ ----------------
SHARES VALUE SHARES VALUE
--------- ------- ------- -------
Shares sold 1,992 $20,000 -- $ --
Shares issued on reinvestment
of distribution 101 1,021 172 1,717
Shares redeemed -- -- -- --
----- ------- ---- -------
Net increase 2,093 $21,021 172 $ 1,717
===== ======= ==== =======
* Unaudited
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
-8-
PURISIMA ALL-PURPOSE FUND
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.
NOVEMBER 1,
SIX MONTHS FOR THE FOR THE 2005^
ENDED YEAR ENDED YEAR ENDED THRU
FEBRUARY 28, AUGUST 31, AUGUST 31, AUGUST 31,
2009++ 2008 2007 2006
---------- ---------- ---------- ----------
Net asset value,
beginning of period $ 10.27 $ 10.47 $ 10.50 $ 10.00
---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.03 0.46 0.69 0.56
Net realized and unrealized gain
(loss) on investments 0.07 (0.03) 0.04 0.00
---------- ---------- ---------- ----------
Total from investment operations 0.10 0.43 0.73 0.56
---------- ---------- ---------- ----------
LESS DISTRIBUTIONS:
From net investment income (0.31) (0.63) (0.76) (0.06)
From net investment income (0.04) -- -- --
---------- ---------- ---------- ----------
Total distributions (0.35) (0.63) (0.76) (0.06)
---------- ---------- ---------- ----------
Net asset value, end of period $ 10.02 $ 10.27 $ 10.47 $ 10.50
========== ========== ========== ==========
Total return 1.00%** 4.31% 7.27% 5.62%**
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(thousands) $ 49.8 $ 29.5 $ 28.3 $ 26.4
RATIO OF EXPENSES TO AVERAGE NET ASSETS:
Before fees waived 445.55%* 500.20% 545.57% 620.25%*
After fees waived 1.50%* 1.50% 1.50% 1.50%*
RATIO OF NET INVESTMENT INCOME
TO AVERAGE NET ASSETS # 0.40%* 4.44% 6.66% 6.71%*
Portfolio turnover rate 0.00%** 0.00% 0.00% 0.00%**
- --------
# Net of fees waived.
* Annualized.
** Not annualized.
^ Commencement of operations.
++ Unaudited
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
-9-
PURISIMA ALL-PURPOSE FUND
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2009 (UNAUDITED)
NOTE 1 - ORGANIZATION
The Purisima Funds (the "Trust") was organized as a Delaware statutory 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 a series. Each series represents a distinct portfolio with its own
investment objectives and policies. The accompanying financial statements
include the Purisima All-Purpose Fund (the "Fund"), a non-diversified fund which
commenced operations on November 1, 2005. The Fund is one of the two portfolios
comprising the Trust. Fisher Asset Management, LLC (doing business as Fisher
Investments) (the "Adviser") serves as the investment adviser to the Fund.
The investment objective of the Purisima All-Purpose Fund is as follows:
The Fund seeks to provide protection against declines in the value of the U.S.
and foreign equity markets. It invests in derivative securities, money market
instruments and other securities, including U.S. and foreign common stocks, and
fixed income securities.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of the 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 are valued at the last sales price on the business
day as of which such value is being determined. If on a particular
day, an exchange-listed security does not trade, then the mean between
the bid and asked prices will be used. Foreign exchange traded equity
securities are valued based upon the price on the exchange or market
on which they trade as of the close of business of such market or
exchange immediately preceding the time the Fund's net asset value is
determined. Investments in securities traded on the NASDAQ Global
Market, the NASDAQ Global Select Market and the NASDAQ Capital Market
will be valued at the NASDAQ Official Closing Price ("NOCP"), which
may not necessarily represent the last sale price. 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 price.
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, taking into consideration: (I)
fundamental analytical data relating to the investment; (II) the
nature and duration of restrictions on disposition of the securities;
and (III) an evaluation of the forces which influence the market in
which these securities are purchased and sold. Debt securities with
remaining maturities of 60 days or less are valued at amortized cost
which, when combined with accrued interest, approximates market value.
-10-
PURISIMA ALL-PURPOSE FUND
The Funds adopted the provisions of Statement of Financial Accounting
Standards No. 157, "Fair Value Measurements" ("SFAS 157"), effective
with the beginning of the Portfolios' fiscal year. SFAS 157
establishes a hierarchy that prioritizes the inputs to valuation
techniques giving the highest priority to readily available unadjusted
quoted prices in unobservable inputs (level 3 measurements) when
market prices are not readily available or reliable. See Note 6 - Fair
Value of Financial Instruments for further disclosure.
B. FOREIGN CURRENCY TRANSLATION. The Fund's records are maintained in
U.S. dollars. The value of securities, currencies and other assets and
liabilities denominated in currencies other than U.S. dollars are
translated into U.S. dollars based upon foreign exchange rates
prevailing at the end of the reporting period. Purchases and sales of
investment securities, income and expenses are translated on the
respective dates of such transactions.
The Fund does not isolate that portion of their net realized and
unrealized gains and losses on investments resulting from changes in
foreign exchange rates from the impact arising from changes in market
prices. Such fluctuations are included with net realized and
unrealized gain or loss from investments and foreign currency.
Net realized foreign currency transaction gains and losses arise from
sales of foreign currencies, currency gains or losses realized between
the trade and settlement dates on securities transactions, and the
differences between the amounts of dividends, interest, and foreign
withholding taxes recorded on the Fund books and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized
foreign currency translation gains and losses arise from changes in
the value of assets and liabilities, other than investments in
securities, resulting from changes in the exchange rates.
C. FEDERAL INCOME AND EXCISE TAXES. The Fund has elected to be taxed as a
"regulated investment company" and intends to distribute substantially
all taxable income to its shareholders and otherwise comply with the
provisions of the Internal Revenue Code applicable to regulated
investment companies. Therefore, no federal income or excise tax
provision is required.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, the Fund intends to declare each year as
dividends in each calendar year at least 98% of its net investment
income (earned during the calendar year) and 98% of its net realized
capital gains (earned during the twelve months ended October 31) plus
undistributed amounts, if any, from prior years.
The Fund may be subject to foreign taxes on income, gains on
investments or currency repatriation, a portion of which may be
recoverable. The Fund will accrue such taxes and recoveries as
applicable based upon its current interpretations of the tax rules and
regulation that exist in the markets in which it invests.
On July 13, 2006, the Financial Accounting Standards Board (FASB)
released FASB Interpretation No. 48 "Accounting for Uncertainty in
Income Taxes" ("FIN 48").
-11-
PURISIMA ALL-PURPOSE FUND
FIN 48 provides guidance for how uncertain tax positions 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 Fund's 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. Adoption of FIN 48 is
required as of the date of the last Net Asset Value ("NAV")
calculation in the first required financial statement reporting period
for fiscal years beginning after December 15, 2006 and is to be
applied to all open tax years as of the effective date. The Fund
adopted FIN 48 effective February 29, 2008. Management of the Fund has
reviewed the tax positions for the fiscal years ending August 31, 2005
through 2008 and has determined that the adoption of FIN 48 did not
have a material impact on the Fund's financial statements.
D. 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. Realized gains and
losses are evaluated on the bases of identified costs.
E. 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.
F. 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.
G. OPTIONS. Exchange traded options are valued at the last reported sale
price at the close of the exchange on which the security is primarily
traded. Certain markets are not closed at the time that a Fund prices
portfolio securities. In these situations, snapshot prices are
provided by the individual pricing services or other alternate sources
at the close of the NYSE as appropriate. If no sales are reported, the
mean between the last reported bid and asked prices will be used.
Non-exchange traded options will also be valued at the mean between
bid and asked prices. "Fair value" of other private options are valued
after consulting with the Adviser using a mathematical model.
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 result 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
-12-
PURISIMA ALL-PURPOSE FUND
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. The
Fund may purchase options which are included in the Fund's Schedules
of Investments and subsequently marked to market to reflect the
current value of the option. At February 28, 2009, the Fund had no
options outstanding.
H. SECURITIES SOLD SHORT. To the extent the Fund engages in selling
securities short, they are obligated to replace a security borrowed by
purchasing the same security at the current market value. The Fund
would incur a loss if the price of the security increases between the
date of the short sale and the date on which the Fund replaces the
borrowed security. The Fund would realize a gain if the price of the
security declines between those dates.
The Fund is 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 Fund 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.
I . INDEMNIFICATION OBLIGATIONS. Under the Fund's organizational
documents, its current and former officers and trustees are
indemnified against certain liabilities arising out of the performance
of their duties to the Fund. In addition, in the normal course of
business, the Fund enters into contracts that contain a variety of
representations and warranties that provide general indemnifications.
The Fund's maximum exposure under these arrangements is unknown as
this would involve future claims that may be made against the Fund
that have not yet occurred or that would be covered by other parties.
NOTE 3 - COMMITMENTS, OTHER RELATED PARTY TRANSACTIONS AND OTHER
SERVICE PROVIDERS
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 Fund.
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
contractually 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
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, 2009, the Fund paid the Adviser $164.
-13-
PURISIMA ALL-PURPOSE FUND
As of February 28, 2009, the Adviser has reimbursed the Fund $72,680 to limit
its total expenses to not more than 1.50% of the average daily net assets.
At February 28, 2009 the Adviser may recapture a portion of the following
amounts that have been paid and/or waived on behalf of the Fund no later than
the date as stated below:
FUND AUGUST 31, 2009 AUGUST 31, 2010 AUGUST 31, 2011
- ---- --------------- --------------- ---------------
Purisima All-Purpose Fund $ 131,092 $ 148,574 $ 144,904
U.S. Bank, N.A. serves as the Fund's Custodian. U.S. Bancorp Fund Services, LLC
("USBFS"), an affiliate of U.S. Bank, N.A., serves as the Administrator, Fund
Accountant and Transfer Agent. Certain officers of the Trust, including the
Trust's Treasurer, are employees of the Administrator. In its capacity as the
Fund's Administrator, USBFS provides general fund management including corporate
secretarial services, coordinates the preparation of materials for the Board of
Trustees, assists with the annual audit of the Fund's financial statements,
monitors the Fund's compliance with federal and state regulations as well as
investment restrictions, coordinates the payment of Fund expenses and monitors
expense accruals, prepares financial statements and non-investment related
statistical data and makes required tax reporting calculations. During the six
months ended February 28, 2009, Purisima All-Purpose Fund paid USBFS $18,692 for
services rendered in its capacity as the Fund's Administrator.
Quasar Distributors, LLC, an affiliate of U.S. Bank, N.A., and USBFS serves as
principal underwriter of the Fund and acts as the Fund's distributor, pursuant
to a Distribution Agreement with the Trust, in a continuous public offering of
the Fund's shares.
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 Fund is authorized to pay
expenses incurred for the purpose of distribution activities, including the
engagement 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, 2009, the Fund
did not utilize the Plan.
NOTE 5 - INVESTMENT TRANSACTIONS
The cost of purchases and the proceeds from sales of securities, excluding
short-term investments, for the six months ended February 28, 2009, were as
follows:
FUND PURCHASES SALES
- ---- --------- -----
Purisima All-Purpose Fund $ 0 $ 0
-14-
PURISIMA ALL-PURPOSE FUND
NOTE 6 - FAIR VALUE OF FINANCIAL INSTRUMENTS
In September 2006, the Financial Accounting Standards Board issued Standard No.
157, "Fair Value Measurements" effective for fiscal years beginning after
November 15, 2007. SFAS 157 clarifies the definition of fair value for financial
reporting, establishes a framework for measuring fair value and requires
additional disclosure about the use of fair value measurements in an effort to
make the measurement of fair value more consistent and comparable. The Fund
adopted SFAS 157 effective September 1, 2008. A summary of the fair value
hierarchy under SFAS 157 is described below.
Various inputs are used in determining the value of the Funds' investments.
These inputs are summarized in the three broad levels listed below:
Level 1 - Quoted prices in active markets for identical securities.
Level 2 - Other significant observable inputs (including quoted prices
for similar securities, interest rates, prepayment speeds, credit risk,
etc.).
Level 3 - Significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments).
The following table provides the fair value measurements of applicable Fund
assets by level within the fair value hierarchy for the Fund as of February 28,
2009. These assets are measured on a recurring basis.
DESCRIPTION INVESTMENTS IN SECURITIES
- --------------------------------------------------------------------------------
Level 1 - Quoted prices $ 18,514
Level 2 - Other significant observable inputs $ 21,114
Level 3 - Significant unobservable inputs $ --
- --------------------------------------------------------------------------------
TOTAL $ 39,628
- --------------------------------------------------------------------------------
NOTE 7 - FEDERAL INCOME TAX MATTERS
The difference between the book and tax basis components of the distributable
earnings relates principally to the timing of recognition of income and gains
for federal income tax purposes. These differences, if any, are primarily
attributable to the tax deferral of losses on wash sales, the realization for
tax purposes of unrealized gains on passive foreign investment companies and
return of capital distributions and income adjustments recognized for tax
purposes on real estate investment trusts. Short-term gains distributions
reported in the Statements of Changes of Net Assets, if any, are reported as
ordinary income for federal tax purposes.
As of August 31, 2008, the components of distributable earnings on a tax basis
were as follows:
-15-
PURISIMA ALL-PURPOSE FUND
All-Purpose
Cost of investments for tax purposes $ 40,529
===========
Gross tax unrealized appreciation $ --
Gross tax unrealized depreciation $ --
-----------
Net tax unrealized appreciation $ --
Undistributed ordinary income $ 776
Other accumulated losses * $ (1)
-----------
Total accumulated earnings (losses) $ 775
===========
The tax compositions of dividends are as follows:
Ordinary Long Term
Income Capital Gains
------ -------------
Purisima All-Purpose
Fund
2/28/2009 $ 900 $ 121
8/31/2008 $1,717 --
* Under current tax law capital losses realized after October 31 and prior to
the Fund's fiscal year end may be deferred as occurring on the first day of the
following fiscal year.
NOTE 8 - RECENT ACCOUNTING PRONOUNCEMENTS
In March 2008, Statement of Financial Accounting Standards No. 161, "Disclosures
about Derivative Instruments and Hedge Activities" ("SFAS 161") was issued and
is effective for fiscal years beginning after November 15, 2008. SFAS 161 is
intended to improve financial reporting for derivative instruments by requiring
enhanced disclosure that enables investors to understand how and why an entity
uses derivatives, how derivatives are accounted for, and how derivative
instruments affect an entity's results of operation and financial position.
Management is currently evaluating the implications of SFAS 161. The impact on
the Fund's financial statement disclosures, if any, is currently being assessed.
-16-
PURISIMA ALL-PURPOSE FUND
OTHER INFORMATION -
BOARD CONSIDERATION OF AND CONTINUATION OF INVESTMENT ADVISORY AGREEMENT
(UNAUDITED)
On October 30, 2008, the Board of Trustees performed its annual review and
renewal of the Investment Management Agreement for the All Purpose Fund for the
one-year period commencing November 1, 2008. The Board of Trustees, including
the Independent Trustees, took into consideration information provided at the
meeting, as well as a wide variety of materials relating to the services
provided by the Adviser, including reports on the Fund's investment results;
portfolio composition; portfolio trading practices; and other information
relating to the nature, extent and quality of services provided by the Adviser
to the Fund. In addition, the Board discussed and reviewed information regarding
the Fund's investment results, advisory fee and expense comparisons,
descriptions of various functions such as compliance monitoring and portfolio
trading practices, and information about the personnel providing investment
management and administrative services to the Fund. The Board's Independent
Trustees met separately to discuss the various factors summarized below, both
without and then with legal counsel to the Fund, who is not independent legal
counsel.
In deciding to renew the Agreement, the Board of Trustees did not identify any
single factor or particular information that, in isolation, was the controlling
factor. This summary describes the most important, but not all, of the factors
considered by the Board.
The Board recognized that the Fund has engaged in only minimal investment
activities since its inception because its primary use has been reserved as an
investment when the Adviser takes a defensive posture with respect to the
securities markets. To date, the Fund has remained invested in U.S. Treasury
securities and cash, with only an executive officer of the Adviser as its
shareholder.
1. Nature, Extent and Quality of Services
THE ADVISER, ITS PERSONNEL AND ITS RESOURCES. The Board considered the depth and
quality of the Adviser's investment management process, including its
sophisticated methodology; the experience, capability and integrity of its
senior management and other personnel; the low turnover rates of its key
personnel; and the overall financial strength and stability of its organization.
The Board discussed the quality of the services provided by the Adviser and
noted that the quarterly report from the Adviser was extremely sophisticated and
thorough. The Board commented on the high quality of the independent capital
markets research conducted by the Adviser and reported to the Board on a regular
basis. The Board's consensus was that the Adviser was open about its thinking on
the management of the Fund and very available to address any questions or
concerns the Board may have from time to time. The Board also considered that
-17-
the Adviser made available to its investment professionals a variety of
resources and systems relating to investment management, compliance, trading,
performance and portfolio accounting. The Board further considered the Adviser's
continuing need to attract and retain qualified personnel and to maintain and
enhance its resources and systems. The Board also observed that there had been
no decline in the quality of services provided to the Fund despite the growth of
the Adviser's other client business and the continued DE MINIMIS size of the
Fund.
OTHER SERVICES. The Board considered the Adviser's policies, procedures and
systems to ensure compliance with applicable laws and regulations and its
commitment to these programs; its efforts to keep the Trustees informed; and its
attention to matters that may involve conflicts of interest with the Fund.
The Board concluded that the nature, extent and quality of the services provided
by the Adviser has benefited and should continue to benefit the Fund and its
shareholders, especially upon its broader use under the circumstances
contemplated by the Adviser.
2. Investment Performance
The Board considered the Fund's pursuit of its investment objective and the
investment results of the Fund in light of its objective. The Trustees compared
the Fund's total returns with a peer group of mutual funds objectively compiled
using data from Morningstar, Inc., and noted the favorable performance of the
Fund during various periods compared to those peer averages.
The Board recognized that the Fund's proposed defensive posture has not yet been
implemented and the peer group funds, referred to as specialty equity funds,
would serve as a better comparison at that time.
The Board concluded that the Adviser's performance record in managing the Fund
indicates that its continued management has benefited and should continue to
benefit the Fund and its shareholders.
3. Advisory Fees and Total Expenses
The Board reviewed the advisory fees and total expenses of the Fund and compared
such amounts with the average fee and expense levels of other funds in an
applicable group of peer funds compiled using data from Morningstar, Inc. The
Board observed that the Fund's advisory fees and total expenses were reasonable
compared to the median fee and expense levels of the comparable funds in the
indices (meaning at or below the median). The Board noted that the Adviser had
waived (and its continuing to waive) significant fees in respect of the Fund to
maintain an overall expense limitation, thus indicating a substantial investment
by the Adviser in that Fund. The Board concluded that the reasonable level of
the fees charged by the Adviser benefits the Fund and its shareholders. The
Board then considered the fees charged to the Fund versus the Adviser's private
clients, but agreed it was not an applicable comparison given the unique nature
of the fund and the extra burden of administration, compliance, deadlines, risk
and regulations associated with the Fund that do not apply to the private
accounts. The Board determined that the respective peer groups provided a better
comparison and it found the Fund's fees reasonable.
-18-
4. Adviser, Costs, Level of Profits and Economies of Scale
The Board discussed the Adviser's costs of providing services to the Fund, as
well as the resulting level of profits to the Adviser. The Board considered the
Adviser's need to invest in technology, infrastructure and staff to reinforce
and offer new services and to accommodate changing regulatory requirements. The
Trustees noted that at its present asset size, breakpoints in the Fund's
advisory fee structure were not practicable, and that no economies of scale
applied. The Board concluded that the Fund's cost structure is reasonable.
5. Ancillary Benefits
The Board considered a variety of other benefits received by the Adviser,
including possible ancillary benefits to itself or its institutional management
business. The Board noted that the Adviser ceased the use of third-party soft
dollar products from trades by the Fund, and noted that the small relative size
of the Fund compared to the Adviser's other business would suggest minimal
possible fallout benefits.
6. Conclusions
Based on its review, including consideration of each of the factors referred to
above, the Board concluded that the Agreement is fair and reasonable to the Fund
and its shareholders, that the Fund's shareholders received, and should receive,
reasonable value in return for the advisory fees paid to the Adviser by the
Fund, and that the renewal of the Agreement was in the best interests of the
Fund and its shareholders.
-19-
PROXY VOTING PROCEDURES (UNAUDITED)
The Adviser votes proxies relating to portfolio securities in accordance with
procedures that have been approved by the Trust's Board of Trustees. You may
obtain a description of these procedures, free of charge, by calling toll-free
1-800-841-0199. This information is also available through the Securities and
Exchange Commission's website at http://www.sec.gov.
Information regarding how the Fund voted proxies relating to the portfolio
securities during the most recent 12-month period ended June 30 is available
without charge, upon request, by calling toll-free 1-800-841-0199. This
information is also available through the Securities and Exchange Commission's
website at HTTP://WWW.SEC.GOV.
FORM N-Q DISCLOSURE (UNAUDITED)
The Fund files its complete schedule of portfolio holdings with the SEC for the
first and third fiscal quarters on Form N-Q. The Fund's Form N-Q is available
without charge, upon request, by calling 1-800-841-0199. Furthermore, you can
obtain the Form N-Q on the SEC's website at www.sec.gov.
-20-
TRUSTEES AND OFFICER INFORMATION (Unaudited)
The Board of Trustees is responsible for the overall management of the
Trust's business. The Board of Trustees approves all significant agreements
between the Trust and persons or companies furnishing services to it, including
all agreements with the Adviser, Administrator, Custodian and Transfer Agent.
The Board of Trustees delegates the day-to-day operations of the Trust to its
Officers, subject to the Fund's investment objective and policies and to general
supervision by the Board of Trustees. The Statement of Additional Information
includes additional information about the Trust's Trustees and is available,
without charge, by calling 1-800-841-0199.
The Trustees and Officers of the Trust, their business addresses and
principal occupations during the past five years are:
NUMBER OF
PORTFOLIOS IN
PRINCIPAL FUND
OCCUPATION(S) COMPLEX OTHER
NAME, ADDRESS, POSITION(S) HELD YEAR DURING PAST OVERSEEN BY DIRECTORSHIPS
DATE OF BIRTH WITH TRUST ELECTED(1) FIVE YEARS DIRECTOR HELD
- ----------------------------------------------------------------------------------------------------------------------------------
Kenneth L. Fisher President 1996 Chief Executive Officer and majority 2 None
(born 1950) and Trustee shareholder of Fisher Investments, Inc.,
13100 Skyline Blvd. the sole shareholder of the Adviser,
Woodside, CA 94062 and has served in 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 1979.
Pierson E. Clair III Trustee 1996 President and Chief Executive Officer of Brown 2 Signature
(born 1948) & Haley since 1998 (fine confectioners);Vice Foods, Inc.
13100 Skyline Blvd. President of Blummer Chocolate Company from
Woodside, CA 94062 1980 to 1997, where he had been employed
since 1970.
Scott LeFevre Trustee 2001 Sole proprietor of LeFevre Capital Management, 2 None
(born 1957) a registered investment adviser.
13100 Skyline Blvd.
Woodside, CA 94062
Alfred D. McKelvy, Jr. Trustee 2003 President and Chief Executive Officer of 2 East Bay
(born 1948) Omnimetric Services, LLC. since 2009, BOMA; BOMA
13100 Skyline Blvd. Executive Director of the law firm of Berding California;
Woodside, CA 94062: & Weil, LLP since 1990. Heritage Bank
(Advisory Board).
Bryan F. Morse Trustee 1996 Sole proprietor of Bryan F. Morse, RIA, a 2 None
(born 1952) registered investment adviser since 1990.
13100 Skyline Blvd.
Woodside, CA 94062
Grover T. Wickersham Trustee 1996 Attorney in private practice in Palo 2 None
(born 1949) Alto, California. Prior to entering private
13100 Skyline Blvd. practice in June of 1981, served as a Branch Chief of the
Woodside, CA 94062 Los Angeles Regional Office of the U.S.
Securities and Exchange Commission.
Tom Fishel Chief 2005 Vice President and Chief Compliance Officer of N/A None
(born 1960) Compliance the Adviser. Vice President of Charles Schwab
13100 Skyline Blvd. Officer & Co., Inc. from 1995 to 2004, where he had
Woodside, CA 94062 been employed since 1983.
Keith Shintani Secretary and 2006 Vice President of U.S. Bancorp Fund Services, N/A None
(born 1963) Assistant LLC and its predecessor, Investment Company
2020 East Financial Way Treasurer Administration, LLC since 1998.
Glendora, CA 91741
- -------
(1) Trustees and officers of the Funds serve until their resignation, removal
or retirement.
* "Interested person" of the Trust, as defined in the 1940 Act.
-21-
NUMBER OF
PORTFOLIOS IN
PRINCIPAL FUND
OCCUPATION(S) COMPLEX OTHER
NAME, ADDRESS, POSITION(S) HELD YEAR DURING PAST OVERSEEN BY DIRECTORSHIPS
DATE OF BIRTH WITH TRUST ELECTED(1) FIVE YEARS DIRECTOR HELD
- ----------------------------------------------------------------------------------------------------------------------------------
Michael Ricks Treasurer 2006 Assistant Vice President of U.S. N/A None
(born 1977) Bancorp Fund Services, LLC since 2001.
2020 East Financial Way
Glendora, CA 91741
- ----------
(2) Trustees and officers of the Funds serve until their resignation, removal or
retirement.
-22-
PRIVACY NOTICE
Fisher Asset Management, LLC (doing business as Fisher Investments) and the
Purisima Funds collect non-public information about you from the following
sources:
o Information we receive about you on applications or other forms;
o Information you give us orally; and
o Information about your transactions with us or others.
We are committed to protecting your privacy and your non-public personal
information. We do not sell or market your non-public personal information to
unaffiliated organizations. We maintain physical, electronic and procedural
safeguards to guard your non-public personal information. We hold our employees
to strict standards of conduct regarding confidentiality, and employees who
violate our Privacy Policy are subject to disciplinary process. We restrict
access to your information to those employees who need to know that information
to carry out their duties.
We do not disclose any non-public personal information about our clients or
former clients without the client's authorization, except as permitted by law.
We may disclose the non-public information we collect to employees and
affiliates, and unaffiliated third parties as permitted by law. Third parties
may include law enforcement agencies, government and regulatory authorities, and
professionals such as our legal counsel and auditors, and we may disclose
information for reasons such as audit purposes, prevention of fraud or money
laundering, protection of confidentiality, compliance with laws, and to provide
agreed upon products and services to you. Third parties may also include service
providers performing financial services for us (such as brokers and custodians)
and service providers performing non-financial services for us (such as third
parties performing computer related or data maintenance, marketing or other
services for us or to assist us in offering our products and services to you).
It is our policy to require all third party service providers that will receive
information to sign strict confidentiality agreements agreeing to safeguard such
information and use it only for the purpose it was provided.
-23-
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 to registrants who are not listed issuers (as defined in Rule
10A-3 under the Securities Exchange Act of 1934).
ITEM 6. 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 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.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of trustees.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The Registrant's President and Treasurer have reviewed the Registrant's
disclosure controls and procedures (as defined in Rule 30a-3(c) under the
Investment Company Act of 1940 (the "Act")) as of a date within 90 days of
the filing of this report, as required by Rule 30a-3(b) under the Act and
Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934.
Based on their review, such officers have concluded that the disclosure
controls and procedures are effective in ensuring that information required
to be disclosed in this report is appropriately recorded, processed,
summarized and reported and made known to them by others within the
Registrant and by the Registrant's service provider.
(b) There were no changes in the Registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Act) that occurred during
the second fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
Registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a) (1) ANY CODE OF ETHICS OR AMENDMENT THERETO, THAT IS THE SUBJECT OF THE
DISCLOSURE REQUIRED BY ITEM 2, TO THE EXTENT THAT THE REGISTRANT INTENDS TO
SATISFY ITEM 2 REQUIREMENTS THROUGH FILING AN EXHIBIT. Incorporated by
reference to previous Form N-CSR filing.
(2) A SEPARATE CERTIFICATION FOR EACH PRINCIPAL EXECUTIVE AND PRINCIPAL
FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF
2002. Filed herewith.
(3) ANY WRITTEN SOLICITATION TO PURCHASE SECURITIES UNDER RULE 23C-1 UNDER
THE ACT SENT OR GIVEN DURING THE PERIOD COVERED BY THE REPORT BY OR ON
BEHALF OF THE REGISTRANT TO 10 OR MORE PERSONS. Not applicable to open-end
investment companies.
(b) CERTIFICATIONS PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002.
Furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) THE PURISIMA FUNDS
By (Signature and Title) /s/ KENNETH L. FISHER
----------------------------------------------
Kenneth L. Fisher, President
Date May 5, 2009
----------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title) /s/ KENNETH L. FISHER
---------------------------------------------
Kenneth L. Fisher, President
Date May 5, 2009
----------------------------------------------------------------
By (Signature and Title) /S/ MICHAEL RICKS
---------------------------------------------
Michael Ricks, Treasurer
Date May 6, 2009
----------------------------------------------------------------