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As filed with the Securities and Exchange Commission on November 8, 2002
Registration No.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[ ] Pre-Effective Amendment No. __ [] Post-Effective Amendment No. _
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
(Exact Name of Registrant as Specified in Charter)
600 West Broadway
San Diego, California 92101
(Address of Principal Executive Offices)
(818) 852-1000
(Registrant's Area Code and Telephone Number)
Charles H. Field, Jr.
C/O Nicholas-Applegate Capital Management
600 West Broadway, 32nd Floor
San Diego, California 92101
(Name And Address Of Agent For Service)
Copy To:
Deborah A. Wussow
C/O Nicholas-Applegate Capital Management
600 West Broadway, 32nd Floor
San Diego, California 92101
R. Darrell Mounts, Esq.
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W.
Second Floor
Washington, D.C. 20036-1800
Approximate Date of Proposed Public Offering: as soon as practicable after
this Registration Statement becomes effective under the Securities Act of 1933.
The title of securities being registered is common stock, par value $0.01 per
share.
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It is proposed that this filing will go effective on December 8, 2002
pursuant to Rule 488.
No filing fee is required because of Registrant's reliance on Section 24(f)
under the Investment Company Act of 1940, as amended.
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NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
FORM N-14
CONTENTS OF REGISTRATION STATEMENT ON FORM N-14
This Registration Statement consists of the following papers and documents:
Cover Sheet
Contents of Registration Statement on Form N-14
Letter to Shareholders
Notice of Special Meeting
Part A - Combined Prospectus/Proxy Statement
Part B - Statement of Additional Information
Part C - Other Information
Signature Page
Exhibits
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NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
600 WEST BROADWAY
SAN DIEGO, CALIFORNIA 92101
NICHOLAS-APPLEGATE GLOBAL TECHNOLOGY FUND
NICHOLAS-APPLEGATE GLOBAL HEALTH CARE FUND
December 8, 2002
Dear Shareholder:
The enclosed proxy materials describe a proposal that each of
Nicholas-Applegate Global Technology Fund ("Global Technology Fund") and
Nicholas-Applegate Global Health Care Fund ("Global Health Care Fund") (each a
"Target") reorganize and become part of Nicholas-Applegate Global Select Fund
("Global Select Fund"). Each Target and Global Select Fund (each a "Fund") is a
series of Nicholas-Applegate Institutional Funds ("Trust"). If the proposal is
approved and implemented in its entirety, each shareholder of a Target will
become a shareholder of Global Select Fund.
You are cordially invited to attend a special meeting of the Targets'
shareholders ("Meeting") to be held on January 22, 2003, at 10 a.m., Pacific
time, at the Trust's offices, 600 West Broadway, 30th Floor, San Diego,
California 92101. At the Meeting, each Target's shareholders will be asked to
approve the reorganization involving their Target.
THE TRUST'S BOARD OF TRUSTEES ("BOARD") BELIEVES THE PROPOSED
REORGANIZATIONS WILL BE IN THE BEST INTEREST OF SHAREHOLDERS OF EACH TARGET.
ACCORDINGLY, THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE REORGANIZATION
INVOLVING YOUR TARGET. THE REORGANIZATION INVOLVING A TARGET WILL BE EFFECTED
ONLY IF APPROVED BY A MAJORITY OF THAT TARGET'S OUTSTANDING SHARES VOTED IN
PERSON OR REPRESENTED BY PROXY. YOUR VOTE IS EXTREMELY IMPORTANT. WE HOPE YOU
WILL PARTICIPATE BY CASTING YOUR VOTE IN PERSON, OR BY PROXY IF YOU ARE UNABLE
TO ATTEND THE MEETING.
We thank you for your attention to this matter. We look forward to seeing
you at the Meeting or receiving your proxy card(s) so your shares may be voted
at the Meeting. If you have any questions on voting of proxies or the proposal
to be considered at the Meeting, please call us toll-free at 1-800-551-8643.
Very truly yours,
E. Blake Moore, Jr.
President & Chairman of the Board
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WHAT YOU SHOULD KNOW
ABOUT THE PROPOSED REORGANIZATIONS
Nicholas-Applegate Capital Management LLC ("Nicholas-Applegate") and the
Board encourage you to read the enclosed Prospectus/Proxy Statement carefully.
The following is designed to provide a brief overview of the proposal and answer
some questions you may have about this shareholder vote.
WHAT IS THE PURPOSE OF THE SHAREHOLDER VOTE?
The vote is to determine whether each Target should be reorganized and
become part of another fund managed by Nicholas-Applegate, Global Select Fund.
If your Target's shareholders decide in favor of the proposal, you will become a
shareholder of Global Select Fund, and that Target will cease to exist.
WHAT IS THE RATIONALE FOR MERGING EACH TARGET WITH GLOBAL SELECT FUND?
Since their inception, both Targets have had difficulty attracting a
meaningful level of assets. The net assets of Global Technology Fund and Global
Health Care Fund as of September 30, 2002, were $16,803,589 and $20,467,352,
respectively. As a result, neither Target has achieved the operating
efficiencies often associated with larger mutual funds. For years
Nicholas-Applegate has contractually waived its fees and absorbed other
operating expenses of the Targets so that total operating expenses, excluding
certain expenses, do not exceed the percentages set forth in their prospectus.
Nicholas-Applegate has indicated that it may not be able to continue to waive
its fees and absorb excess operating expenses. By merging the Targets into
Global Select Fund, the Targets' shareholders would have the benefit of
combining assets with a fund having a similar investment objective and a similar
yet broader investment strategy.
WHAT ARE THE ADVANTAGES OF MERGING THESE FUNDS?
There are three key potential advantages:
- - By combining the Funds' assets, SHAREHOLDERS MAY ENJOY LOWER EXPENSE RATIOS
over time. Larger funds tend to enjoy economies of scale not available to
funds with fewer assets under management.
- - These LOWER COSTS MAY LEAD TO STRONGER PERFORMANCE, since total return to a
Fund's shareholders is net of Fund expenses.
- - Global Select Fund will be managed by Catherine Somhegyi Nicholas and Pedro
V. Marcal, Jr., seasoned portfolio managers.
The potential benefits and possible disadvantages are explained in more
detail in the enclosed proxy statement.
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HOW ARE THESE THREE FUNDS ALIKE?
Each Fund seeks long-term capital appreciation by investing primarily in
global equity securities. However, the Targets differ from Global Select Fund
with regard to the types of companies in which they invest. Global Technology
Fund primarily invests in U.S and foreign companies with business operations in
technology and technology-related industries. Global Health Care Fund primarily
invests in U.S. and foreign companies with business operations in the health
care and health care-related industries. Global Select Fund invests in a broader
range of U.S. and foreign companies in different industries that, in
Nicholas-Applegate's opinion, represent the "best of the best" globally.
HOW IS GLOBAL SELECT FUND MANAGED?
Nicholas-Applegate emphasizes a team approach to portfolio management.
Nicholas-Applegate's international/global equity management team, a group of
seasoned portfolio managers and analysts, who currently manage both Targets
and Global Select Fund, will continue managing Global Select Fund. Catherine
Somhegyi Nicholas, lead portfolio manager for global equities and Pedro V.
Marcal, Jr. , will be primarily responsible for the day-to-day investment
management decisions. Catherine is a member of Nicholas-Applegate's Executive
Committee and serves on the Allianz Dresdner Asset Management U.S. Equity
Committee. Before joining Nicholas-Applegate in 1987, Catherine was a vice
president with Professional Asset Securities, Inc., where she focused on
savings and loans and banks. In addition, she was a research analyst for
Pacific Century Advisors. She earned her B.S. in business administration, CUM
LAUDE, and her M.B.A. in finance from the University of Southern California.
Catherine had more than 17 years of investment experience. Pedro Marcal has
responsibilities for portfolio management and research, focusing primarily on
Global products. He was previously the lead on the firm's Emerging Countries
team. Prior to joining the firm in 1994, Pedro spent five years as an
economist at A. B. Laffer, V. A. Canto & Associates, a global economic
consulting firm. Pedro was also a trader at A-Mark Precious Metals, a
commodities firm. He earned his B.A. in economics from the University of
California, San Diego. As part of his undergraduate degree, Pedro spent a
year studying development economics at London University. He has 13 years of
investment experience.
WHAT HAPPENS IF SHAREHOLDERS DECIDE IN FAVOR OF A REORGANIZATION?
Shareholders will receive full and fractional Class I shares of Global
Select Fund equal in value to their shares of the relevant Target that they
owned on the effective date of the reorganizations.
The net asset value per share of Global Select Fund will not be affected by
the transactions. That means the reorganizations will not result in a dilution
of any shareholder's interest.
IF THE FUNDS MERGE, WILL THERE BE TAX CONSEQUENCES FOR YOU?
Unlike a transaction in which you direct Nicholas-Applegate to sell shares
of one fund to buy shares of another, an exchange of shares pursuant to a
reorganization IS NOT CONSIDERED A TAXABLE EVENT. The Funds themselves also will
recognize no gains or losses as a result of a
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reorganization, except with respect to a Target's assets that are sold in
connection with its reorganization. Accordingly, you will not have to report any
capital gains due to a reorganization, although a Target's shareholders may
receive a distribution of ordinary income and/or capital gains immediately
before its reorganization to the extent that Target has undistributed income
and/or gains.
You should consult your tax advisor regarding any possible effect a
reorganization might have on your tax situation, given your personal
circumstances - particularly regarding state and local taxes.
WHO WILL PAY FOR THE REORGANIZATIONS?
The expenses of the reorganizations, including legal expenses, printing,
packaging, and postage, plus the costs of any supplementary solicitation, will
be borne by Global Select Fund and each Target Fund in proportion to each Fund's
respective net assets.
WHAT DOES THE BOARD RECOMMEND?
The Board believes you should vote in favor of the reorganizations. More
importantly, however, the Board recommends that you study the issues involved,
call us with any questions, and vote promptly to ensure that a quorum of each
Target will be represented at the Meeting.
WHERE CAN I GET MORE INFORMATION ABOUT GLOBAL SELECT FUND?
We hope this Q&A has helped you better understand why we are making this
proposal. If you have any questions, we encourage you to call us at
1-800-551-8643.
NICHOLAS-APPLEGATE CAPITAL MANAGEMENT
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NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NICHOLAS-APPLEGATE GLOBAL TECHNOLOGY FUND
NICHOLAS-APPLEGATE GLOBAL HEALTH CARE FUND
600 WEST BROADWAY
SAN DIEGO, CALIFORNIA 92101
----------------
NOTICE OF
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 22, 2003
----------------
To the Shareholders:
A special meeting of shareholders ("Meeting") of Nicholas-Applegate Global
Technology Fund and Nicholas-Applegate Global Health Care Fund (each a "Fund"),
each a series of Nicholas-Applegate Institutional Funds ("Trust"), will be held
on January 22, 2003, at 10:00 a.m., Pacific time, at the Trust's offices, 600
West Broadway, San Diego, California 92101, for the following purposes:
(1) For the shareholders of each Fund voting separately, to approve a Plan
of Reorganization and Termination under which Nicholas-Applegate Global Select
Fund ("Global Select Fund"), another series of the Trust, would acquire all the
assets of a Fund in exchange solely for Class I shares of equal value of Global
Select Fund and Global Select Fund's assumption of the Fund's liabilities,
followed by the distribution of those shares to the Fund's shareholders.
(2) To transact other business that properly comes before the Meeting or
any adjournment thereof.
The reorganization proposal is described in the accompanying
Prospectus/Proxy Statement.
YOUR BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE IN FAVOR OF THE
PROPOSAL.
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You are entitled to vote at the Meeting and any adjournment thereof if you
owned shares of a Fund at the close of business on November 27, 2002. EACH
SHAREHOLDER IS REQUESTED TO SIGN, DATE, AND RETURN THE ENCLOSED PROXY CARD(S)
WITHOUT DELAY, EVEN IF YOU PLAN TO ATTEND THE MEETING. A POSTAGE-PAID ENVELOPE
IS ENCLOSED FOR THIS PURPOSE. ANY SHAREHOLDER PRESENT AT THE MEETING MAY VOTE
PERSONALLY ON ALL MATTERS BROUGHT BEFORE IT.
By order of the Board of Trustees,
Charles H. Field, Jr., Secretary
December 8, 2002
San Diego, California
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NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NICHOLAS-APPLEGATE GLOBAL TECHNOLOGY FUND
NICHOLAS-APPLEGATE GLOBAL HEALTH CARE FUND
600 WEST BROADWAY
SAN DIEGO, CALIFORNIA 92101
-----------
PROSPECTUS/PROXY STATEMENT
DECEMBER 8, 2002
-----------
This Prospectus/Proxy Statement is being furnished to shareholders of
Nicholas-Applegate Global Technology Fund ("Global Technology Fund") and
Nicholas-Applegate Global Health Care Fund ("Global Health Care Fund") (each a
"Target"), each a series of Nicholas-Applegate Institutional Funds ("Trust"), in
connection with the solicitation of proxies by the Trust's Board of Trustees
("Board") for use at a special meeting of the Targets' shareholders to be held
on January 22, 2003 ("Meeting"), at 10:00 a.m. Pacific time, and at any
adjournment of the Meeting.
As more fully described in this Prospectus/Proxy Statement, the purpose of
the Meeting is to vote on two proposed reorganizations. In each reorganization,
Nicholas-Applegate Global Select Fund ("Global Select Fund"), another series of
the Trust, would acquire all the assets of a Target in exchange solely for Class
I shares of Global Select Fund and Global Select Fund's assumption of all the
Target's liabilities, followed by the distribution of those shares to the
Target's shareholders (all such transactions involving Global Select Fund and a
Target being referred to herein as a "Reorganization"). As a result, each Target
shareholder would receive a number of full and fractional Global Select Fund
Class I shares having an aggregate value that on the effective date of the
Reorganization is equal to the aggregate value of the shareholder's Target
shares. As soon as practicable following the distribution of a Target's shares,
it will be terminated.
This Prospectus/Proxy Statement sets forth concisely the information about
the Reorganizations and Global Select Fund that a shareholder should know before
voting on a Reorganization. Additional information is contained in the
following:
- A Statement of Additional Information, dated December 8, 2002, relating
to the Reorganizations and including historical financial statements
("SAI"), has been filed with the Securities and Exchange Commission
("SEC") and is incorporated herein by this reference.
- The Trust's Prospectus and Statement of Additional Information, each
dated July 19, 2002, as supplemented October 2, 2002 ("Pro/SAI"), and
its Annual Report to Shareholders for the fiscal year ended March 31,
2002 ("Annual Report"), have been
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filed with the SEC and are incorporated herein by this reference with
respect to each Target and Global Select Fund (each a "Fund").
Copies of the documents listed above may be obtained without charge, and
further inquiries may be made, by writing to Nicholas-Applegate Institutional
Funds, Attn: Mutual Fund Operations, 600 West Broadway, Suite 3200, San Diego,
CA 92101, or by calling toll-free 1-800-551-8643. In addition, the SEC maintains
a Website (http://www.sec.gov) that contains the Pro/SAI and other material
incorporated herein by reference, together with other information regarding the
Funds.
Investors are advised to read and retain this Prospectus/Proxy Statement
for future reference.
Each Fund is a separate series of the Trust, a Delaware business trust
registered as an open-end management investment company. Nicholas-Applegate
Capital Management LLC, a Delaware limited liability company
("Nicholas-Applegate"), serves as the investment adviser to each Fund. Each
Fund's investment objective is to seek maximum long-term capital appreciation.
This Prospectus/Proxy Statement will first be mailed to shareholders on or
about December 9, 2002.
THE SHARES OFFERED BY THIS PROSPECTUS/PROXY STATEMENT ARE NOT DEPOSITS OR
OBLIGATIONS OF ANY BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK, AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD,
OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN THESE SHARES INVOLVES INVESTMENT
RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS/PROXY STATEMENT. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
4
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TABLE OF CONTENTS
<Table>
<Caption>
PAGE
SYNOPSIS 1
The Proposed Reorganizations 1
Comparative Fee Table 1
Example of Effect of Fund Expenses 2
Comparison of Investment Objectives, Principal Investment Strategies, and Risks 3
Performance of the Funds 4
Form of Organization 6
Investment Adviser and Investment Advisory Fees 6
Expense Waivers 7
Operations of Global Select Fund Following the Reorganizations 7
Dividends and Other Distributions 8
Federal Income Tax Consequences of the Reorganizations 9
PRINCIPAL RISK FACTORS 9
THE PROPOSED TRANSACTIONS 10
Reorganization Plan 10
Reasons for the Reorganizations 12
Description of Securities to Be Issued 13
Federal Income Tax Considerations 13
Capitalization 14
VOTING INFORMATION 15
ADDITIONAL INFORMATION ABOUT THE FUNDS 16
INFORMATION CONCERNING ADVISER, DISTRIBUTOR, AND AFFILIATED COMPANIES 17
MISCELLANEOUS 17
OTHER BUSINESS 18
BOARD RECOMMENDATION 18
APPENDIX A - Form of Plan of Reorganization and Termination A-1
</Table>
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<Table>
APPENDIX B - Additional Information Regarding Global Select Fund B-1
APPENDIX C - Management Discussion and Analysis of the Funds C-1
APPENDIX D - Principal Shareholders D-1
</Table>
ii
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SYNOPSIS
The following is a summary of certain information contained elsewhere (1)
in this Prospectus/Proxy Statement, (2) in the SAI, the Pro/SAI with respect to
each Fund, and the Annual Report with respect to each Fund (each of which is
incorporated herein by reference and thus is legally part of this
Prospectus/Proxy Statement), and (3) in the Plan of Reorganization and
Termination ("Reorganization Plan") (the form of which is attached as Appendix A
to this Prospectus/Proxy Statement). As discussed more fully below, the Board
believes that the Reorganizations will benefit shareholders of each Target. The
Funds have the same investment objective and have similar investment policies
and strategies, although the Targets differ from Global Select Fund with regard
to the types of companies in which they invest.
THE PROPOSED REORGANIZATIONS
The Board considered and approved the terms of the Reorganizations at a
meeting held on October 7, 2002. The Board also considered and adopted the
Reorganization Plan at a meeting held on November 8, 2002. The Reorganization
Plan provides for Global Select Fund's acquisition of all the assets of each
Target in exchange solely for Class I shares of beneficial interest in Global
Select Fund and Global Select Fund's assumption of all the liabilities of each
Target, all as of the close of business on January 31, 2003, or a later date
when the Reorganization Plan is approved and all contingencies have been met
("Effective Time"). Under the terms of the Reorganization Plan, each Target then
would distribute those Global Select Fund shares to its shareholders of record
determined as of the Effective Time ("Shareholders"), so that each Shareholder
would receive the number of full and fractional Global Select Fund Class I
shares that is equal in value to the Shareholder's Target shares as of the
Effective Time. Each Target would be terminated as soon as practicable
thereafter.
For the reasons set forth below under "The Proposed Transaction - Reasons
for the Reorganization," the Board, including the trustees who are not
"interested persons" (as that term is defined in section 2(a)(19) of the
Investment Company Act of 1940, as amended ("1940 Act")) of the Trust
("Independent Trustees"), has determined that each Reorganization is in the best
interests of both Funds participating therein, that the terms of each
Reorganization are fair and reasonable, and that the interests of each Fund's
shareholders will not be diluted as a result of the Reorganizations.
Accordingly, the Board recommends approval of the Reorganization Plan.
COMPARATIVE FEE TABLE
Like all mutual funds, the Funds incur certain expenses in their
operations, and as a shareholder you pay these expenses indirectly. The tables
below compare annual operating expenses for each Target's shares and Global
Select Fund's Class I shares for the fiscal year ended March 31, 2002, and PRO
FORMA expenses, based on those annual operating expenses for Global Select
Fund's Class I shares assuming the Reorganization Plan is approved and effected
with respect to both Targets. (Global Select Fund also offers Class R shares,
which are not involved in the proposed Reorganizations.)
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from fund assets) (as
a percentage of average net assets)
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<Table>
<Caption>
GLOBAL SELECT FUND GLOBAL TECHNOLOGY GLOBAL HEALTH CARE COMBINED FUND
(CLASS I) FUND FUND (CLASS I)
(PRO FORMA)
------------------ ----------------- ------------------- -------------
Management Fees .80% 1.00% 1.00% 0.80%
Distribution (12b-1) Fees None None None None
Other Expenses 0.57% 0.46% 0.36% 0.57% (3)
Total Annual Fund Operating 1.37% 1.46% 1.36% 1.37% (2)
Expenses
Waiver of Fund Expenses (1) (0.14%) (0.02%) -- (0.14%)
Net expenses 1.23% 1.44% 1.36% 1.23%
</Table>
(1) Nicholas-Applegate has agreed to waive its fees and absorb other
operating expenses of the Funds so that total operating expenses,
excluding taxes, interest, brokerage, the expenses incurred from the
creation and operation of the Mauritius entity, if any, and
extraordinary expenses, do not exceed the percentages set forth in
"Expense Waivers" below for the Targets' shares and Global Select
Fund's Class I shares through March 31, 2003. In subsequent years,
overall operating expenses for each Fund will not fall below the
applicable percentage limitation until Nicholas-Applegate has been
fully reimbursed for fees waived and expenses paid under the expense
limitation agreement, as each Fund will reimburse Nicholas-Applegate in
subsequent years when operating expenses (before reimbursement) are
less than the applicable percentage limitation. Such waived fees and
paid expenses are subject to possible later reimbursement by the Funds
to Nicholas-Applegate over certain periods. Nicholas-Applegate may not
amend the fee waiver and its obligation to pay excess expenses without
the Trust's consent. Each Fund's actual Other Expenses and Total Annual
Fund Operating Expenses were lower than the figures shown. For
additional information, see "Expense Waivers" below.
(2) Nicholas-Applegate has agreed to reduce its management fee to an
annual rate of 0.65% and its administrative services fee to 0.07% from
0.10% of average daily net assets effective February 1, 2003. In
addition, the Board of Trustees has approved the adoption of a
Shareholder Service Plan under which the combined Fund will pay a
shareholder services fee at an annual rate of .08% of the Fund's
average daily net assets effective February 1, 2003. The net effect of
these fee changes will result in a reduction of fees paid to the
Fund's investment adviser and distributor of 0.10%.
(3) Nicholas-Applegate expects that a portion of the brokerage commissions
that the combined Fund will pay will be used to reduce the Fund's
expenses. Nicholas-Applegate also expects the combined Fund to enter
into an expense offset arrangement with its custodian and other agents
that will reduce its custodian fee based on the amount of securities
the Fund loans to third parties. In addition, Nichoals-Applegate
expects that the Fund's custodian will reduce its custodian fees based
upon the amount of cash that the Fund will maintain with its custodian.
"Other Expenses" do not take into account these expected expense
reductions, and are therefore higher than the actual expenses of the
combined Fund. If these estimated expense reductions were taken into
account, the estimated "Total Annual Fund Operating Expenses" for the
combined Fund would be 1.04%.
EXAMPLE OF EFFECT ON FUND EXPENSES
The following Example is intended to help you compare the cost of investing
in each Target's shares with the cost of investing in Global Select Fund Class I
shares assuming the Reorganization Plan has been approved and effected with
respect to both Targets.
The Example assumes that you invest $10,000 in shares of the specified Fund
(Class I in the case of Global Select Fund) for the time periods indicated and
then redeem all those shares at the end of those periods. The Example also
assumes that your investment has a 5% return each year, that all dividends and
other distributions are reinvested, and that the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions, your costs would be:
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<Table>
<Caption>
ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
-------- ----------- ---------- ---------
Global Select Fund $110 $439 $780 $1,795
(Class I)
Global Technology Fund $151 $481 $845 $1,926
Global Health Care Fund $143 $450 $789 $1,796
Combined Fund* (Class I) $110 $439 $780 $1,795
</Table>
* The example for the combined Fund does not take into account any offset
arrangements that the combined Fund will enter into with its brokers,
custodians and third party service providers. If the offset credits described
were to be applied to the above example, your cost for the 1,3,5 and 10 year
periods would be $109, $344, $603, $1,374, respectively.
COMPARISON OF INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES, AND RISKS
Each Fund's investment objective is long-term capital appreciation. Global
Select Fund invests in equity securities of companies that in
Nicholas-Applegate's opinion represent the "best of the best" globally. Global
Technology Fund invests in the equity securities of U.S. and foreign companies
with business operations in technology and technology-related industries. Global
Health Care Fund, a non-diversified fund, invests in equity securities of U.S.
and foreign companies with business operations in the health care and health
care-related industries.
The Funds have similar investment strategies. In analyzing specific
companies for possible investment, each Fund ordinarily looks for several of the
following characteristics: above-average per share earnings growth; high return
on invested capital; a healthy balance sheet; sound financial and accounting
policies and overall financial strength; strong competitive advantages;
effective research and product development and marketing; development of new
technologies; efficient service; pricing flexibility; strong management; and
general operating characteristics that will enable the companies to compete
successfully in their respective markets. Each Fund considers whether to sell a
particular security when any of those factors materially changes.
Each Fund invests in securities of issuers in countries that are expected
to provide the best opportunities to achieve the Fund's investment objective.
Each Fund normally invests at least 80% of its assets in the securities of
companies located in at least three different countries, one of which may be the
United States. The Funds differ in the types of companies in which they invest.
Global Select Fund normally invests at least 75% of its assets in equity
securities. Global Technology Fund normally invests at least 80% of its assets
in technology-related equity securities. Global Health Care Fund normally
invests at least 80% of its assets in health care sector securities and may
invest a significant portion of its assets in the securities of U.S. issuers.
Each Fund also may invest in companies located in countries with emerging
securities markets.
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Each Fund is subject to the risks of stock market volatility, foreign
securities, securities lending, and active portfolio trading. The foreign
securities risks are further affected by other factors such as currency exchange
rates, political and economic conditions in the foreign countries, foreign
regulations, liquidity of foreign securities markets, and stability of foreign
governments. Each Target is subject to the additional risks of investing in a
specific sector and smaller issuers. Unlike Global Select Fund and Global
Technology Fund, Global Health Care Fund, as a non-diversified fund, is more
susceptible to a single economic, political, or regulatory event affecting the
issuers in which it invests than is a diversified fund.
In addition to the risks discussed above, the Funds are subject to other
principal risks. See "Comparison of Investment Objectives, Principal Investment
Strategies, and Risks" below.
OTHER POLICIES OF THE FUNDS. Each Fund may invest in illiquid securities,
including securities that are subject to restrictions on resale and securities
that are not readily marketable, and in restricted securities that may be resold
to institutional investors. Each Fund also may enter into repurchase agreements
with member banks of the Federal Reserve System, registered broker-dealers, and
registered U.S. government securities dealers. In addition, each Fund may seek
to earn additional income by lending its portfolio securities to qualified
brokers, dealers, banks, or other financial institutions, on a fully
collateralized basis. Each Fund also may invest in corporate debt securities,
zero coupon securities, commercial paper, bank instruments, demand instruments,
government obligations, variable and floating rate instruments, asset-backed
securities, futures contracts and options thereon, put and call options on
securities and securities indices, foreign government securities, Eurodollar
convertible securities, Eurodollar and Yankee dollar instruments, foreign
currency transactions, options on foreign currencies, forward currency
contracts, interest rate or financial futures contracts, preferred stock, swap
options, swap agreements, and securities of other investment companies. Each
Fund also may enter into reverse repurchase agreements and when-issued
transactions.
In response to adverse market, economic, political, or other conditions,
each Fund may temporarily depart from its principal investment strategies by
investing its assets in cash, cash items, and short-term, higher quality debt
securities. Each Fund may do this to minimize potential losses and maintain
liquidity to meet shareholder redemptions during adverse market conditions. A
Fund's defensive posture may result in its failing to achieve its investment
objective.
PERFORMANCE OF THE FUNDS
The following tables show how each Fund has performed in the past. PAST
PERFORMANCE IS NOT AN INDICATION OF FUTURE RESULTS.
YEAR-BY-YEAR TOTAL RETURN AS OF 12/31 EACH YEAR (%)
The table below shows the percentage gain or loss for each Fund's shares
(Class I shares in the case of Global Select Fund) in each calendar year since
those shares' inception. (Global Select Fund Class R shares are not included
because they are not involved in the Reorganizations.) The table provides some
indication of the risks of investing in each Fund by showing how each Fund's
return has varied from year-to-year.
4
<Page>
<Table>
<Caption>
GLOBAL SELECT FUND GLOBAL TECHNOLOGY FUND GLOBAL HEALTH CARE FUND
(CLASS I)
------------------ ---------------------- -----------------------
1998 46.18 -- --
1999 129.35 493.76 --
2000 -15.15 -36.91 96.17
2001 -20.37 -49.26 -9.53
Best Quarter Q4 '99 Q4 '99 Q1 '01
+63.08% +97.59% 60.37%
Worst Quarter Q1 '00 Q1' 01 Q1 01
-21.17% -43.08% -22.65%
</Table>
AVERAGE ANNUAL TOTAL RETURN AS OF 12/31/01 (%) (1)
<Table>
<Caption>
GLOBAL SELECT FUND (CLASS I) 1 YEAR SINCE INCEPTION (9/30/97)
Before Taxes -20.37% 20.86%
After Taxes on Distributions -20.37 14.11
After Taxes on Distributions and Sale of -12.40 14.85
Fund Shares (2)
MSCI All Country World Index Free -15.91 1.89
</Table>
<Table>
<Caption>
GLOBAL TECHNOLOGY FUND 1 YEAR SINCE INCEPTION (7/31/98)
Before Taxes -49.26% 44.04%
After Taxes on Distributions -49.26 33.48
After Taxes on Distributions and Sale of -30.00 35.91
Fund Shares (2)
Merrill Lynch 100 Technology -32.55 8.88
</Table>
5
<Page>
<Table>
<Caption>
GLOBAL HEALTH CARE FUND 1 YEAR SINCE INCEPTION (8/31/99)
Before Taxes -9.53% 53.98%
After Taxes on Distributions -9.53 48.22
After Taxes on Distributions and Sale of -5.80 42.35
Fund Shares (2)
Russell 3000 Healthcare Index -11.83 6.02
</Table>
(1) The returns in these tables would have been lower if Nicholas-Applegate
had not waived a portion of its management fees and absorbed a portion
of each Fund's expenses. See "Expense Waivers" below.
(2) After-tax returns are calculated using the historical highest
individual federal marginal income tax rates and do not reflect the
impact of state and local taxes. Actual after-tax returns depend on an
investor's tax situation and may differ from those shown. After-tax
returns shown are not relevant to investors who hold their Fund shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed
the return before taxes due to an assumed tax benefit from any losses
on a sale of Fund shares at the end of the measurement period.
FORM OF ORGANIZATION
The Trust is an open-end management investment company currently offering
several separate portfolios. It was organized in December 1992 as a business
trust under the laws of Delaware. On July 24, 1998, the Nicholas-Applegate
Mutual Funds complex changed from a "master-feeder" investment structure (under
which those funds invested all their assets in portfolios of the Trust) to a
multi-class structure, and the Trust was liquidated. In May 1999 the Trust was
reactivated, and substantially all the institutional assets of the
Nicholas-Applegate Mutual Funds were transferred to it in a tax-free exchange
for Class I shares of the Trust's series, which for accounting purposes is
treated as a continuation of the Trust's former portfolios.
INVESTMENT ADVISER AND INVESTMENT ADVISORY FEES
Nicholas-Applegate is each Fund's investment adviser. In this capacity,
Nicholas-Applegate supervises all aspects of each Fund's operations and makes
and implements all investment decisions for the Funds.
Nicholas-Applegate is currently paid the following: (1) by Global Select
Fund, a monthly management fee computed at the annual rate of 0.80% of its
average daily net assets; and (2) by each Target, a monthly management fee
computed at the annual rate of 1.00% of its average daily net assets.
Effective February 2003, Nicholas-Applegate has agreed to reduce its
management fee to an annual rate of 0.65% and its administrative services fee
to 0.07% from 0.10% of average daily net assets effective February 1, 2003.
In addition, the Board of Trustees has approved the adoption of a Shareholder
Service Plan under which the combined Fund will pay a shareholder services
fee at an annual rate of .08% of the Fund's average daily net assets
effective February 1, 2003. The net effect of these fee changes will result
in a reduction of fees paid to the Fund's investment adviser and distributor
of 0.10%.
6
<Page>
EXPENSE WAIVERS
Nicholas-Applegate has agreed to waive its fees and absorb other operating
expenses of the Funds so that total operating expenses, excluding taxes,
interest, brokerage, expenses paid under any off set arrangements with
brokers, custodians and third party service providers, if any, the expenses
incurred from the creation and operation of the Mauritius entity, if any, and
extraordinary expenses, do not exceed the percentages set forth below for the
Targets' shares and Global Select Fund's Class I shares through March 31,
2003. In subsequent years, overall operating expenses for each Fund will not
fall below the applicable percentage limitation until Nicholas-Applegate has
been fully reimbursed for fees waived and expenses paid under the expense
limitation agreement (collectively "reimbursable amounts"), as each Fund will
reimburse Nicholas-Applegate in subsequent years when operating expenses
(before reimbursement) are less than the applicable percentage limitation.
Reimbursable amounts waived or absorbed prior to July 24, 1998, may be
reimbursed by the Funds within five years of that date; reimbursable amounts
waived or absorbed from July 25, 1998, through May 7, 1999, may be reimbursed
by the Funds within five years after the year in which they are waived or
absorbed; and reimbursable amounts waived or absorbed after May 7, 1999, may
be reimbursed by the Funds within three years after the year in which they
are waived or absorbed. Nicholas-Applegate may not amend the fee waiver and
its obligation to pay excess expenses without the Trust's consent.
Global Technology 1.40%
Global Health Care 1.40%
Global Select 1.05% (prior to February 1, 2003)
1.10% (after January 31, 2003)
OPERATIONS OF GLOBAL SELECT FUND FOLLOWING THE REORGANIZATIONS
As indicated above, the Funds' investment objectives and policies are
substantially similar, although each Target concentrates in companies of certain
sectors. Based on its review of each Fund's investment portfolio,
Nicholas-Applegate believes that most of the assets each Target holds will be
consistent with Global Select Fund's investment policies and thus can be
transferred to and held by Global Select Fund if the Reorganization Plan is
approved for both Targets. If, however, either Target has any assets that Global
Select Fund may not hold, those assets will be sold prior to the
Reorganizations. The proceeds of those sales will be held in temporary
investments or reinvested in assets that Global Select Fund may hold. The
possible need for either Target to dispose of assets prior to the
Reorganizations could result in selling securities at a disadvantageous time and
could result in a Target's realizing losses that would not otherwise have been
realized. Alternatively, these sales could result in a Target's realizing gains
that would not otherwise have been realized, the net proceeds of which would be
included in a distribution to its shareholders prior to the Reorganizations.
7
<Page>
PURCHASES. Effective October 2, 2002, the Targets ceased accepting
investment subscriptions. Global Select Fund's shares may be purchased by wire
transfer, telephone exchange, or check by mail. They are sold on a continuous
basis at the net asset value ("NAV") per share next calculated after receipt of
a purchase order in good form. Global Select Fund's NAV per share is computed
separately and is determined once each day that the New York Stock Exchange is
open ("Business Day") as of the close of regular trading on the Exchange but may
also be computed at other times. For a more complete discussion of Global Select
Fund's share purchase policies, see "Purchases and Redemptions" in Appendix B.
REDEMPTIONS. Procedures to redeem shares in each Fund are identical. Each
Fund's shares may be redeemed by wire transfer, telephone exchange, or check by
mail. Redemptions are made at the NAV per share next determined after a request
in proper form is received at the Trust's office. If shares were purchased with
a check that has not yet cleared, payment will be delayed until after the check
has cleared, which can take up to 15 calendar days. The maximum amount that may
be redeemed by telephone, regardless of account size, is $50,000. Redemptions by
a corporation, trust, or fiduciary may have special requirements. Each Fund
reserves the right to make payment wholly or partly in shares of readily
marketable investment securities. For a more complete discussion of each Fund's
share redemption policies, see "Purchases and Redemptions" in Appendix B.
Redemptions of a Target's shares may be effected through the Effective
Time.
EXCHANGES. Each Fund's shares may be exchanged for shares of the same class
of another Nicholas-Applegate mutual fund on the basis of their respective NAVs
at the time of the exchange. An exchange is the sale of shares from one fund
immediately followed by the purchase of shares in another fund. After the
Reorganizations, Global Select Fund Class I shares will continue to be
exchangeable for Class I shares of any other Nicholas-Applegate mutual fund. For
a more complete discussion of Global Select Fund's exchange policies, see
"Exchanges" in Appendix B.
DIVIDENDS AND OTHER DISTRIBUTIONS
Each Fund earns investment income in the form of dividends and interest on
investments. Dividends each Fund pays are based solely on its investment income.
Each Fund's policy is to annually distribute most or all of its net earnings in
the form of dividends to its shareholders, at the discretion of the Board.
Dividends are automatically reinvested in additional shares of the distributing
Fund at the NAV per share on the payable date unless otherwise requested.
Each Fund also realizes capital gains and losses when it sells securities
for more or less than it paid. If a Fund's total gains on these sales exceed
total losses thereon (including losses carried forward from previous years), the
Fund has net capital gains. Net realized capital gains, if any, are distributed
to each Fund's shareholders at least annually, usually in November or December.
Capital gain distributions are automatically reinvested in additional shares of
the distributing Fund on the payable date unless otherwise requested.
At or before the Effective Time, each Target will declare as a distribution
substantially all of its previously undistributed net investment income and net
realized capital gains, if any, and
8
<Page>
will distribute that amount to continue to maintain its tax status as a
regulated investment company.
FEDERAL INCOME TAX CONSEQUENCES OF THE REORGANIZATIONS
The Trust will receive an opinion of its counsel, Kirkpatrick & Lockhart
LLP, to the effect that each Reorganization will constitute a tax-free
reorganization within the meaning of section 368(a)(1)(C) of the Internal
Revenue Code of 1986, as amended ("Code"). Accordingly, neither any Fund nor
their shareholders will recognize any gain or loss as a direct result of the
Reorganizations. See "The Proposed Transaction - Federal Income Tax
Considerations," below. To the extent a Target sells securities prior to the
Effective Time, it may recognize net gains or losses. Any net gains recognized
on those sales would increase the amount of any distribution that Target must
make to its shareholders before the Effective Time.
PRINCIPAL RISK FACTORS
Because the Funds have the same investment objective and substantially
similar investment policies, an investment in Global Select Fund is subject to
many of the same specific risks as an investment in either Target, as well as
the general risks arising from investing in any mutual fund. There is no
guarantee that a Fund will achieve its investment objective or that it will not
lose principal value.
The principal specific risks associated with investing in the Funds include
the following:
MARKET RISK. The prices of equity securities change in response to many
factors, including the historical and prospective earnings of the issuer, the
value of its assets, general economic conditions, interest rates, investor
perceptions, and market liquidity. Stock prices are unpredictable, may fall
suddenly, and may continue to fall for extended periods.
FOREIGN SECURITIES RISKS. The prices of foreign securities may be further
affected by other factors, including:
CURRENCY EXCHANGE RATES--the dollar value of a Fund's foreign investments
will be affected by changes in the exchange rates between the dollar and the
currencies in which those investments are traded.
POLITICAL AND ECONOMIC CONDITIONS--the value of a Fund's foreign
investments may be adversely affected by political and social instability in
their issuers' home countries and by changes in economic or fiscal policies in
those countries.
REGULATION--Foreign companies generally are subject to less stringent
regulations, including financial and accounting controls, than are U.S.
companies. As a result, there generally is less publicly available information
about foreign companies than about U.S. companies.
MARKETS--The securities markets of other countries are smaller than U.S.
securities markets. As a result, many foreign securities may be less liquid and
their prices may be more volatile than U.S. securities.
9
<Page>
EMERGING SECURITIES MARKETS--To the extent a Fund invests in countries with
emerging markets, the foreign securities risks are magnified because these
countries may have unstable governments and less established markets.
SECURITIES LENDING RISK. There is the risk that when lending portfolio
securities, the securities may not be available to a Fund on a timely basis, and
a Fund may therefore lose the opportunity to sell the securities at a desirable
price.
ACTIVE PORTFOLIO TRADING. A high portfolio turnover rate has the potential
to generate more taxable short-term gains for shareholders and may have an
adverse effect on a Fund's after tax performance.
SECTOR RISK. Unlike Global Select Fund, each Target also is subject to
sector risk. Sector risk for Global Technology Fund entails the possibility that
the technology sector may perform differently than other sectors or the market
as a whole, and its performance will be more susceptible to any economic,
business, or other developments that generally affect the technology sector. The
value of Global Health Care Fund shares is particularly vulnerable to factors
affecting the health care industry, such as substantial government regulation,
which may impact the demand for products and services offered by health care
companies. Also, the products and services offered by the health care companies
may be subject to rapid obsolescence caused by scientific advances and
technology innovations. Because Global Health Care Fund focuses its investments
in the health care industry, the value of its shares may rise and fall more than
the value of shares of a fund that invests more broadly.
SMALLER ISSUERS RISK. Global Technology Fund may be subject to the
additional risk of investing in smaller issuers. Investments in
small-capitalization companies entail greater risk because these companies may
have unproven track records, limited product or service base, and limited access
to capital and may be more likely to fail than larger, more established
companies. Information regarding smaller companies may be less available,
incomplete, or inaccurate, and their securities may trade less frequently than
those of larger companies.
Because Global Health Care Fund is a NON-DIVERSIFIED investment company, it
is more susceptible to any single economic, political, or regulatory event
affecting the issuers in which it invests than is a diversified fund.
THE PROPOSED TRANSACTIONS
REORGANIZATION PLAN
The terms and conditions under which the proposed Reorganizations will be
consummated are set forth in the Reorganization Plan. Significant provisions of
the Reorganization Plan are summarized below; however, this summary is qualified
in its entirety by reference to the Reorganization Plan, the form of which is
attached as Appendix A to this Prospectus/Proxy Statement.
The Reorganization Plan provides for (a) Global Select Fund's acquisition
as of the Effective Time of all the assets of each Target in exchange solely for
Global Select Fund Class I
10
<Page>
shares and Global Select Fund's assumption of all liabilities of each Target and
(b) the distribution of those shares to each Target's Shareholders.
A Target's assets to be acquired by Global Select Fund include all cash,
cash equivalents, securities, receivables, claims and rights of action, rights
to register shares under applicable securities laws, books and records, deferred
and prepaid expenses shown as assets on the Target's books, and other property
owned by the Target at the Effective Time. Global Select Fund will assume from
each Target all its liabilities, debts, obligations, and duties of whatever kind
or nature; provided, however, that each Target will use its best efforts to
discharge all its known liabilities before the Effective Time.
The value of each Target's assets to be acquired by Global Select Fund and
the NAV per share of Global Select Fund shares to be exchanged for those assets
will be determined as of the close of regular trading on the New York Stock
Exchange on the date of the Effective Time, using the valuation procedures
described in the Pro/SAI. Each Target's net value will be the value of its
assets to be acquired by Global Select Fund, less the amount of its liabilities,
as of that close.
At, or as soon as practicable after, the Effective Time, each Target will
distribute the Global Select Fund shares it receives PRO RATA to its
Shareholders, so that each Shareholder will receive a number of full and
fractional Global Select Fund Class I shares equal in aggregate value to the
Shareholder's Target shares as of the Effective Time. The shares will be
distributed by opening accounts on Global Select Fund's books in the names of
the Shareholders and by transferring to those accounts the shares previously
credited to the Target's account on those books. Fractional Global Select Fund
shares will be rounded to the third decimal place. Each Target will be
terminated as soon as practicable after the share distribution.
Because Global Select Fund shares will be issued at their NAV in exchange
for the net assets of each Target, the aggregate value of Global Select Fund
shares issued to Shareholders will equal the aggregate value of their Target
shares. The NAV per share of Global Select Fund will be unchanged by the
transactions. Thus, the Reorganizations will not result in a dilution of any
shareholder's interest.
Any transfer taxes payable on the issuance of Global Select Fund shares in
a name other than that of the registered Shareholder will be paid by the person
to whom those shares are to be issued as a condition of the transfer. Any
reporting responsibility of a Target to a public authority will continue to be
its responsibility until it is dissolved.
The entire cost of the Reorganizations, including professional fees and the
cost of soliciting proxies for the Meeting, consisting principally of printing
and mailing expenses, together with the cost of any supplementary solicitation,
will be borne by the Funds. In approving each Reorganization, the Board
considered the fact that each Target may benefit from the operating efficiencies
often associated with larger mutual funds, and the alternative to the
Reorganizations (which is to liquidate each Target) and the consequences of such
a liquidation to each Target's shareholder. After such consideration, the Board
found that each Reorganization is in the best interests of both Funds
participating therein.
11
<Page>
The consummation of each Reorganization is subject to a number of
conditions set forth in the Reorganization Plan (not including consummation of
the other Reorganization), some of which may be waived by either Fund. In
addition, the Trust may amend the Reorganization Plan in any manner, except that
no amendment may be made subsequent to the Meeting that has a material adverse
effect on the interests of a Target's shareholders.
REASONS FOR THE REORGANIZATIONS
The Board, including a majority of the Independent Trustees, has determined
that each Reorganization is in the best interests of both Funds participating
therein, that the terms of each Reorganization are fair and reasonable, and that
the interests of each Fund's shareholders will not be diluted as a result of the
Reorganizations. In approving the Reorganizations, the Board, including a
majority of the Independent Trustees, considered a number of factors, including
the following:
(1) the compatibility of the Funds' investment objectives, policies, and
restrictions;
(2) each Fund's relative investment performance;
(3) each Fund's relative asset size;
(4) the investment experience and expertise of each Fund's portfolio
managers;
(5) the effect of the Reorganizations on the Funds' expected investment
performance;
(6) the effect of the Reorganizations on each Fund's expense ratio relative
to its current expense ratio;
(7) the tax consequences of the Reorganizations;
(8) the effect of the Reorganizations on each Fund's shareholders' rights;
(9) the potential benefits of the Reorganizations to Nicholas-Applegate and
other persons; and
(10) the alternatives to the Reorganizations.
Nicholas-Applegate recommended the Reorganizations to the Board at meetings
thereof held on October 7, 2002 and November 8, 2002. In recommending the
Reorganizations, Nicholas-Applegate advised the Board that the investment
advisory and administration fee schedule applicable to Global Select Fund is
less than that currently in effect for each Target and it is likely that
Nicholas-Applegate would not be able to continue to waive its fees and absorb
the Targets' excess operating expenses. The Board considered the fact that
Global Select Fund has a better performance record, that Catherine Somhegyi
Nicholas is its portfolio manager, that it has a lower overall expense ratio,
and that the Targets have had difficulty in attracting sufficient assets to
become economically viable. The Board also considered that the Funds have an
identical investment objective and similar investment strategies. Further,
Nicholas-Applegate advised the Board that, because Global Select Fund has
greater net assets than either Target, combining the three Funds could reduce
the expenses Global Select Fund bears as a percentage
12
<Page>
of net assets. Nicholas-Applegate also advised the Board that any reduction in
the Funds' expense ratios as a result of the Reorganizations could benefit
Nicholas-Applegate by reducing or eliminating any reimbursements or waivers of
expenses resulting from its obligation to limit each Fund's expenses.
DESCRIPTION OF SECURITIES TO BE ISSUED
The Trust is registered with the SEC as an open-end management investment
company. Fund shares entitle their holders to one vote per full share and
fractional votes for fractional shares held. Each Target currently has only
Class I shares outstanding. Global Select Fund has outstanding Class I and Class
R shares, but only the Class I shares are involved in the Reorganizations. If
the Reorganization Plan is approved with respect to a Target, each Shareholder
thereof will receive Global Select Fund Class I shares.
The Funds do not hold annual meetings of shareholders. There normally will
be no meetings of shareholders for the purpose of electing trustees unless fewer
than a majority of the trustees holding office have been elected by
shareholders, at which time the trustees then in office will call a
shareholders' meeting for the election of trustees. The trustees will call
annual or special meetings of shareholders for action by shareholder vote as
required by the 1940 Act or the Trust's Declaration of Trust or at their
discretion.
FEDERAL INCOME TAX CONSIDERATIONS
The exchange of a Target's assets for Global Select Fund Class I shares and
Global Select Fund's assumption of that Target's liabilities is intended to
qualify for federal income tax purposes as a tax-free reorganization under
section 368(a)(1)(C) of the Code. The Trust will receive an opinion of its
counsel, Kirkpatrick & Lockhart LLP, substantially to the effect that, with
respect to each Reorganization --
(1) Global Select Fund's acquisition of the Target's assets in
exchange solely for Global Select Fund shares and Global Select Fund's
assumption of the Target's liabilities, followed by the Target's
distribution of those shares PRO RATA to its Shareholders
constructively in exchange for their Target shares, will qualify as a
"reorganization" as defined in section 368(a)(1)(C) of the Code, and
each Fund will be "a party to a reorganization" within the meaning of
section 368(b) of the Code;
(2) The Target will recognize no gain or loss on the transfer of
its assets to Global Select Fund in exchange solely for Global Select
Fund shares and Global Select Fund's assumption of the Target's
liabilities or on the subsequent distribution of those shares to the
Target's Shareholders in constructive exchange for their Target
shares:
(3) Global Select Fund will recognize no gain or loss on its
receipt of the transferred assets in exchange solely for Global Select
Fund shares and its assumption of the Target's liabilities;
(4) Global Select Fund's basis in the transferred assets will be
the same as the Target's basis therein immediately before the
Reorganization, and Global Select Fund's holding period for those
assets will include the Target's holding period therefor;
13
<Page>
(5) A Shareholder will recognize no gain or loss on the
constructive exchange of all its Target shares solely for Global
Select Fund shares pursuant to the Reorganization; and
(6) A Shareholder's aggregate basis in the Global Select Fund
shares it receives in the Reorganization will be the same as the
aggregate basis in its Target shares it constructively surrenders in
exchange for those Global Select Fund shares, and its holding period
for those Global Select Fund shares will include its holding period
for those Target shares, provided the shareholder holds them as
capital assets at the Effective Time.
The tax opinion will state that no opinion is expressed as to the effect of
a Reorganization on the Funds participating therein or any Shareholder with
respect to any asset as to which any unrealized gain or loss is required to be
recognized for federal income tax purposes at the end of a taxable year (or on
the termination or transfer thereof) under a mark-to-market system of
accounting.
Target shareholders should consult their tax advisers regarding the effect,
if any, of the Reorganizations in light of their individual circumstances.
Because the foregoing discussion only relates to the federal income tax
consequences of the Reorganizations, those shareholders also should consult
their tax advisers about state and local tax consequences, if any, of the
Reorganizations.
CAPITALIZATION
The following table shows each Fund's capitalization as of September 30,
2002 (unaudited), and on a PRO FORMA combined basis (unaudited) as of September
30, 2002, giving effect to the Reorganizations:
<Table>
<Caption>
GLOBAL TECHNOLOGY GLOBAL HEALTH CARE GLOBAL SELECT FUND GLOBAL SELECT FUND
FUND FUND (CLASS I) (CLASS I) (PRO FORMA)
NET ASSETS $16, 803,589 $20,467,352 $49,280,794 $86,905,413
NET ASSET VALUE PER $9.95 $17.59 $10.14 $10.18
SHARE
SHARES OUTSTANDING 1,689,248 1,163,721 4,861,760 823,976
</Table>
The foregoing table should not be relied on to reflect the number of shares
to be issued in the Reorganization; the actual number of shares to be issued
will depend upon the Funds' respective NAVs per share and number of shares
outstanding at the Effective Time.
14
<Page>
--------------------------------------
VOTING INFORMATION
The Trust is furnishing this Prospectus/Proxy Statement in connection with
the solicitation of proxies for use at the Meeting. Shareholders of record at
the close of business on December 8, 2002 ("Record Date"), are entitled to vote
at the Meeting or any adjournment thereof. These proxy materials will first be
mailed to shareholders on or about November 27, 2002.
Each shareholder of a Target is entitled to one vote for each full share
and a fractional vote for each fractional share of that Target outstanding on
the Trust's books in the name of the shareholder or his or her nominee on the
Record Date. If a shareholder specifies how to vote on the proposal, it will be
voted accordingly. If a shareholder gives no such direction, the proxy will be
voted FOR the proposal described in this Prospectus/Proxy Statement. The proxy
confers discretionary authority on the persons designated therein to vote on
other business not currently contemplated that may properly come before the
Meeting. A shareholder may revoke a proxy at any time prior to use by revoking
the proxy with the Secretary of the Trust, by submitting a proxy bearing a later
date, or by attending and voting at the Meeting.
The presence in person or by proxy of more than one-third of the
outstanding shares of beneficial interest in a Target entitled to vote at the
Meeting will constitute a quorum for the Target. For purposes of determining
the presence of a quorum, shares represented by abstentions and "broker
non-votes" will be counted as present and have the effect of a "No" vote at
the Meeting. If a quorum is not present at the Meeting, sufficient votes in
favor of the proposal set forth in the Notice of Meeting are not received by
the time scheduled for the Meeting, or the holders of shares present in
person or by proxy determine to adjourn the Meeting for any reason, the
shareholders present in person or by proxy may adjourn the Meeting from time
to time, without notice other than announcement at the Meeting or any
adjournment thereof. Any adjournment will require the affirmative vote of
shareholders holding a majority of the shares present in person or by proxy
at the Meeting. The persons named on the proxy card will vote in favor of
adjournment those favorable shares that they represent if adjournment is
necessary to obtain a quorum or to obtain a favorable vote on the proposal or
for any other reason they determine is appropriate. Business may be conducted
once a quorum is present and may continue until adjournment of the Meeting,
notwithstanding the withdrawal or temporary absence of sufficient shares to
reduce the number present to less than a quorum. In addition to solicitations
by mail, proxies may be solicited by officers and employees of
Nicholas-Applegate by personal interview, by telephone, or by facsimile. The
Funds will bear the cost of solicitation of proxies, including the cost of
printing, preparing, assembling, and mailing the Notice of Meeting, this
Prospectus/Proxy Statement, and the form of proxy.
OUTSTANDING SHARES
Except as set forth in Appendix D, Nicholas-Applegate does not know of any
person who owns of record or beneficially 5% or more the shares of each Target
and Global Select Fund. The Trust's officers and Trustees as a group owned less
than one percent of the outstanding shares of each Target on October 31, 2002.
15
<Page>
ADDITIONAL INFORMATION ABOUT THE FUNDS
Information about Global Select Fund is included in Appendices B and C,
which include management's discussion and analysis for the fiscal year ended
March 31, 2002. Information about each Fund is contained in the Pro/SAI and the
Annual Report, which are incorporated by reference herein. Copies of the Pro/SAI
and the Annual Report, which have been filed with the SEC, may be obtained upon
request and without charge by contacting the Distributor by calling toll free
1-800-551-8643 or by writing to Nicholas-Applegate Institutional Funds, Attn:
Mutual Fund Operations, 600 West Broadway, Suite 3200, San Diego, CA 92101.
This Prospectus/Proxy Statement and the related Statement of Additional
Information do not contain all the information set forth in the registration
statements and the exhibits relating
16
<Page>
thereto that the Trust has filed with the SEC under the Securities Act of 1933,
as amended, and the 1940 Act, to which reference is hereby made.
Each Fund is subject to the information requirements of the Securities
Exchange Act of 1934, as amended, and the 1940 Act and in accordance with those
requirements files reports, proxy material, and other information with the SEC.
These reports, proxy material, and other information can be inspected and copied
at the Public Reference Room maintained by the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549, the SEC's Midwest Regional office, 175 W. Jackson
Boulevard, Suite 900, Chicago, Illinois 60604, and the SEC's Northeast Regional
Office, 233 Broadway, New York, New York 10279. Copies of such reports,
materials, and other information can also be obtained from the Public Reference
Branch, Office of Consumer Affairs and Information Services, Securities and
Exchange Commission, Washington, D.C. 20459, at prescribed rates.
INFORMATION CONCERNING ADVISER, DISTRIBUTOR,
AND AFFILIATED COMPANIES
The Trust's investment adviser is Nicholas-Applegate, a limited liability
company organized under the laws of Delaware, with offices at 600 West Broadway,
30th Floor, San Diego, California 92101.
Nicholas-Applegate was organized in August 1984 to manage discretionary
accounts primarily in publicly traded equity securities and securities
convertible or exercisable for publicly traded equity securities, with the goal
of capital appreciation. On January 31, 2001, Nicholas-Applegate was acquired by
Allianz of America, Inc. ("AZOA"). Allianz AG, the parent of AZOA, is a publicly
traded German Aktiengesellschaft (a German publicly traded company), which,
together with its subsidiaries, comprise one of the world's largest insurance
group ("Allianz Group"). Allianz Group currently has assets under management of
approximately $690 billion. Allianz AG's address is: Koeniginstrasses 28,
D-80802, Munich, Germany.
Nicholas-Applegate Securities ("Distributor"), 600 West Broadway, 30th
Floor, San Diego, CA 92101, is the principal underwriter and distributor for the
Trust and, in such capacity, is responsible for distributing shares of the
Funds. The Distributor is a limited liability company organized under the laws
of Delaware to distribute shares of registered investment companies. Its
managing member is Nicholas-Applegate Holdings, LLC, the managing member of
Nicholas-Applegate.
MISCELLANEOUS
LEGAL MATTERS
Certain legal matters in connection with the issuance of Global Select Fund
shares as part of the Reorganizations will be passed on by the Trust's counsel,
Kirkpatrick & Lockhart LLP, 4 Embarcadero Center, 10th Floor, San Francisco, CA
94111.
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EXPERTS
Each Fund's audited financial statements, incorporated herein by this
reference, have been audited by Ernst & Young LLP, the Funds' independent
auditors, whose report thereon is included in the Annual Report. Those
financial statements have been incorporated herein by reference in reliance on
Ernst & Young LLP's report given on their authority as experts in auditing and
accounting matters.
OTHER BUSINESS
The Board knows of no other business to be brought before the Meeting. If,
however, any other matters properly come before the Meeting, it is the intention
that proxies that do not contain specific instructions to the contrary will be
voted on such matters in accordance with the judgment of the persons designated
in the proxies.
BOARD RECOMMENDATION
REQUIRED VOTE. Approval of the Reorganization Plan with respect to a Target
requires the affirmative vote of a majority of its outstanding voting
securities.
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
REORGANIZATION INVOLVING THEIR TARGET.
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APPENDIX A
FORM OF PLAN OF REORGANIZATION AND TERMINATION
THIS PLAN OF REORGANIZATION AND TERMINATION ("Plan"), is adopted by
Nicholas-Applegate Institutional Funds, a Delaware business trust ("Trust"), on
behalf of Nicholas-Applegate Global Technology Fund and Nicholas-Applegate
Global Health Care Fund (each a "Target") and Nicholas-Applegate Global Select
Fund ("Acquiring Fund"), each a segregated portfolio of assets ("series")
thereof.
Trust wishes to effect two separate reorganizations, each described in
section 368(a)(1)(C) of the Internal Revenue Code of 1986, as amended ("Code"),
and intends this Plan to be, and adopts it as, a "plan of reorganization" within
the meaning of the regulations under section 368 of the Code ("Regulations").
Each reorganization will involve the transfer of a Target's assets to Acquiring
Fund in exchange solely for voting shares of beneficial interest in Acquiring
Fund and Acquiring Fund's assumption of that Target's liabilities, followed by
the constructive distribution of those shares PRO RATA to the holders of shares
of beneficial interest in that Target in exchange therefor, all on the terms and
conditions set forth herein. (All such transactions involving a Target and
Acquiring Fund, sometimes referred to herein individually as a "Fund" and
collectively as "Funds," are referred to herein as a "Reorganization.") For
convenience, the balance of this Plan refers only to a single Reorganization and
one Target, but the terms and conditions hereof apply separately to each
Reorganization. The consummation of one Reorganization is not contingent on the
consummation of the other Reorganization.
Trust is a business trust that is duly organized, validly existing, and in
good standing under the laws of the State of Delaware. Trust is duly registered
as an open-end management investment company under the Investment Company Act of
1940, as amended ("1940 Act"). Before January 1, 1997, Trust "claimed"
classification for federal tax purposes as an association taxable as a
corporation, and it has never elected otherwise.
Each Fund is a duly established and designated series of Trust. Target has
a single class of shares, designated Class I shares ("Target Shares"). Acquiring
Fund's shares are divided into multiple classes, including Class I shares. Only
Acquiring Fund's Class I shares ("Acquiring Fund Shares"), which are
substantially similar to the Target Shares, are involved in the Reorganization.
1. PLAN OF REORGANIZATION AND TERMINATION
1.1. At the Closing (as defined in paragraph 3.1),
Target shall assign, sell, convey, transfer, and deliver all
of its assets described in paragraph 1.2 ("Assets") to
Acquiring Fund. In exchange therefor, Acquiring Fund shall
--
(a) issue and deliver to Target the number of full and
fractional (rounded to the third decimal place) Acquiring
Fund Shares determined by dividing the net value of Target
(computed as set forth in paragraph 2.1) by the net asset
value ("NAV") of an Acquiring Fund Share (computed as set
forth in paragraph 2.2), and
(b) assume all of Target's liabilities described in paragraph
1.3 ("Liabilities").
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1.2. The Assets shall consist of all cash, cash
equivalents, securities, receivables (including interest and
dividends receivable), claims and rights of action, rights
to register shares under applicable securities laws, books
and records, deferred and prepaid expenses shown as assets
on Target's books, and other property owned by Target at the
Effective Time (as defined in paragraph 3.1).
1.3. The Liabilities shall consist of all of Target's
liabilities, debts, obligations, and duties of whatever kind
or nature, whether absolute, accrued, contingent, or
otherwise, whether or not arising in the ordinary course of
business, whether or not determinable at the Effective Time,
and whether or not specifically referred to in this Plan.
Notwithstanding the foregoing, Target agrees to use its best
efforts to discharge all its known Liabilities before the
Effective Time.
1.4. At or immediately before the Effective Time,
Target shall declare and pay to its shareholders a dividend
and/or other distribution in an amount large enough so that
it will have distributed substantially all (and in any event
not less than 90%) of its "investment company taxable
income" and substantially all of its "net capital gain," if
any (as such terms are defined in sections 852(b)(2) and
1222(11), respectively, of the Code, both computed without
regard to any deduction for dividends paid) for the current
taxable year through the Effective Time.
1.5. At the Effective Time (or as soon thereafter as is
reasonably practicable), Target shall distribute the
Acquiring Fund Shares it receives pursuant to paragraph 1.1
to its shareholders of record, determined as of the
Effective Time (each a "Shareholder" and collectively
"Shareholders"), in constructive exchange for their Target
Shares. That distribution shall be accomplished by Trust's
transfer agent's opening accounts on Acquiring Fund's share
transfer books in the Shareholders' names and transferring
those Acquiring Fund Shares thereto. Each Shareholder's
account shall be credited with the respective PRO RATA
number of full and fractional (rounded to the third decimal
place) Acquiring Fund Shares due that Shareholder. All
outstanding Target Shares, including any represented by
certificates, shall simultaneously be canceled on Target's
share transfer books. Acquiring Fund shall not issue
certificates representing the Acquiring Fund Shares issued
in connection with the Reorganization.
1.6. As soon as reasonably practicable after
distribution of the Acquiring Fund Shares pursuant to
paragraph 1.5, but in all events within six months after the
Effective Time, Target shall be terminated as a series of
Trust and any further actions shall be taken in connection
therewith as required by applicable law.
1.7. Any reporting responsibility of Target to a public
authority is and shall remain its responsibility up to and
including the date on which it is terminated.
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1.8. Any transfer taxes payable on issuance of
Acquiring Fund Shares in a name other than that of the
registered holder on Target's books of the Target Shares
constructively exchanged therefor shall be paid by the
person to whom those Acquiring Fund Shares are to be issued,
as a condition of that transfer.
2. VALUATION
2.1. For purposes of paragraph 1.1(a), Target's net
value shall be (a) the value of the Assets computed as of
the close of regular trading on the New York Stock Exchange
("NYSE") on the date of the Closing ("Valuation Time"),
using the valuation procedures set forth in Trust's
then-current prospectus regarding Class I shares and
statement of additional information (collectively, "P/SAI"),
less (b) the amount of the Liabilities as of the Valuation
Time.
2.2. For purposes of paragraph 1.1(a), the NAV of an
Acquiring Fund Share shall be computed as of the Valuation
Time, using the valuation procedures set forth in the P/SAI.
2.3. All computations pursuant to paragraphs 2.1 and
2.2 shall be made by or under the direction of Brown
Brothers Harriman & Co., Private Bankers ("Custodian").
3. CLOSING AND EFFECTIVE TIME
3.1. The Reorganization, together with related acts
necessary to consummate the same ("Closing"), shall occur at
Trust's principal office on or about January 31, 2003, or at
such other place and/or on such other date Trust determines.
All acts taking place at the Closing shall be deemed to take
place simultaneously as of the close of business on the date
thereof or at such other time Trust determines ("Effective
Time"). If, immediately before the Valuation Time, (a) the
NYSE is closed to trading or trading thereon is restricted
or (b) trading or the reporting of trading on the NYSE or
elsewhere is disrupted, so that accurate appraisal of
Target's net value and/or the NAV of an Acquiring Fund Share
is impracticable, the Effective Time shall be postponed
until the first business day after the day when that trading
has been fully resumed and that reporting has been restored.
3.2. Trust's fund accounting and pricing agent shall
deliver at the Closing a certificate of an authorized
officer verifying that the information (including adjusted
basis and holding period, by lot) concerning the Assets,
including all portfolio securities, transferred by Target to
Acquiring Fund, as reflected on Acquiring Fund's books
immediately after the Closing, does or will conform to that
information on Target's books immediately before the
Closing. Custodian shall deliver at the Closing a
certificate of an authorized officer stating that (a) the
Assets it holds will be transferred to Acquiring Fund at the
Effective Time and (b) all necessary taxes in conjunction
with the delivery of the Assets, including all applicable
federal and state stock transfer stamps, if any,
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have been paid or provision for payment has been made.
Trust's transfer agent shall deliver at the Closing a
certificate as to the opening of accounts in the
Shareholders' names on Acquiring Fund's share transfer books
and a confirmation, or other evidence satisfactory to Trust,
that the Acquiring Fund Shares to be credited to Target at
the Effective Time have been credited to Target's account on
Acquiring Fund's books.
4. CONDITIONS PRECEDENT
4.1. Trust's obligation to implement this Plan on
Acquiring Fund's behalf shall be subject to satisfaction of
the following conditions at or before the Effective Time:
4.1.1. At the Closing, Target will have good and marketable title
to the Assets and full right, power, and authority to sell, assign,
transfer, and deliver the Assets free of any liens or other encumbrances
(except securities that are subject to "securities loans" as referred to in
section 851(b)(2) of the Code); and on delivery and payment for the Assets,
Acquiring Fund will acquire good and marketable title thereto;
4.1.2. Target is not in violation of, and the adoption of this
Plan and consummation of the transactions contemplated hereby will not
conflict with or violate, Delaware law or any provision of Trust's Amended
and Restated Declaration of Trust dated February 19, 1999, or By-Laws
(collectively "Declaration of Trust") or of any agreement, instrument,
lease, or other undertaking to which Target is a party or by which it is
bound or result in the acceleration of any obligation, or the imposition of
any penalty, under any agreement, judgment, or decree to which Target is a
party or by which it is bound;
4.1.3. All material contracts and other commitments of or
applicable to Target (other than this Plan and investment contracts,
including options, futures, and forward contracts) will be terminated, or
provision for discharge of any liabilities of Target thereunder will be
made, at or prior to the Effective Time, without either Fund's incurring
any liability or penalty with respect thereto and without diminishing or
releasing any rights Target may have had with respect to actions taken or
omitted or to be taken by any other party thereto prior to the Closing;
4.1.4. No litigation, administrative proceeding, or investigation
of or before any court or governmental body is presently pending or (to
Trust's knowledge) threatened against Trust with respect to Target or any
of its properties or assets that, if adversely determined, would materially
and adversely affect Target's financial condition or the conduct of its
business; and Trust knows of no facts that might form the basis for the
institution of any such litigation, proceeding, or investigation and is not
a party to or subject to the provisions of any order, decree, or judgment
of any court or governmental body that materially or adversely affects its
business or its ability to consummate the transactions contemplated hereby;
4.1.5. Target incurred the Liabilities in the ordinary course of
its business;
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4.1.6. Target is a "fund" as defined in section 851(g)(2) of the
Code; it qualified for treatment as a regulated investment company under
Subchapter M of the Code ("RIC") for each past taxable year since it
commenced operations and will continue to meet all the requirements for
that qualification for its current taxable year; the Assets will be
invested at all times through the Effective Time in a manner that ensures
compliance with the foregoing; and Target has no earnings and profits
accumulated in any taxable year in which the provisions of Subchapter M did
not apply to it;
4.1.7. Target is not under the jurisdiction of a court in a
"title 11 or similar case" (as defined in section 368(a)(3)(A) of the
Code);
4.1.8. During the five-year period ending at the Effective Time,
(a) neither Target nor any person "related" (within the meaning of section
1.368-1(e)(3) of the Regulations) to it will have acquired Target Shares,
either directly or through any transaction, agreement, or arrangement with
any other person, with consideration other than Acquiring Fund Shares or
Target Shares, except for shares redeemed in the ordinary course of
Target's business as a series of an open-end investment company as required
by section 22(e) of the 1940 Act, and (b) no distributions will have been
made with respect to Target Shares, other than normal, regular dividend
distributions made pursuant to Target's historic dividend-paying practice
and other distributions that qualify for the deduction for dividends paid
(within the meaning of section 561 of the Code) referred to in sections
852(a)(1) and 4982(c)(1)(A) of the Code;
4.1.9. From the date it commenced operations through the
Effective Time, Target will conduct its "historic business" (within the
meaning of section 1.368-1(d)(2) of the Regulations) in a substantially
unchanged manner; and before the Effective Time Target will not (a) dispose
of and/or acquire any assets (i) for the purpose of satisfying Acquiring
Fund's investment objective or policies or (ii) for any other reason except
in the ordinary course of its business as a RIC, or (b) otherwise change
its historic investment policies; and
4.1.10. Not more than 25% of the value of Target's total assets
(excluding cash, cash items, and U.S. government securities) is invested in
the stock and securities of any one issuer, and not more than 50% of the
value of such assets is invested in the stock and securities of five or
fewer issuers.
4.2. Trust's obligation to implement this Plan on
Target's behalf shall be subject to satisfaction of the
following conditions at or before the Effective Time:
4.2.1. No consideration other than Acquiring Fund Shares (and
Acquiring Fund's assumption of the Liabilities) will be issued in exchange
for the Assets in the Reorganization;
4.2.2. The Acquiring Fund Shares to be issued and delivered to
Target hereunder (a) at the Effective Time, will have been duly authorized
and duly registered under the federal securities laws (and appropriate
notices respecting them will have been duly filed under applicable state
securities laws) and (b) when issued and delivered as provided herein,
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will be duly and validly issued and outstanding shares of Acquiring Fund,
fully paid and non-assessable by Trust;
4.2.3. Acquiring Fund is not in violation of, and the adoption of
this Plan and consummation of the transactions contemplated hereby will not
conflict with or violate, Delaware law or any provision of the Declaration
of Trust or of any agreement, instrument, lease, or other undertaking to
which Acquiring Fund is a party or by which it is bound or result in the
acceleration of any obligation, or the imposition of any penalty, under any
agreement, judgment, or decree to which Acquiring Fund is a party or by
which it is bound;
4.2.4. No litigation, administrative proceeding, or investigation
of or before any court or governmental body is presently pending or (to
Trust's knowledge) threatened against Trust with respect to Acquiring Fund
or any of its properties or assets that, if adversely determined, would
materially and adversely affect Acquiring Fund's financial condition or the
conduct of its business; and Trust knows of no facts that might form the
basis for the institution of any such litigation, proceeding, or
investigation and is not a party to or subject to the provisions of any
order, decree, or judgment of any court or governmental body that
materially or adversely affects its business or its ability to consummate
the transactions contemplated hereby;
4.2.5. Acquiring Fund is a "fund" as defined in section 851(g)(2)
of the Code; it qualified for treatment as a RIC for each past taxable year
since it commenced operations and will continue to meet all the
requirements for such qualification for its current taxable year; it
intends to continue to meet all such requirements for the next taxable
year; and it has no earnings and profits accumulated in any taxable year in
which the provisions of Subchapter M of the Code did not apply to it;
4.2.6. Acquiring Fund has no plan or intention to issue
additional Acquiring Fund Shares following the Reorganization except for
shares issued in the ordinary course of its business as a series of an
open-end investment company; nor does Acquiring Fund, or any person
"related" (within the meaning of section 1.368-1(e)(3) of the Regulations)
to it, have any plan or intention to acquire -- during the five-year period
beginning at the Effective Time, either directly or through any
transaction, agreement, or arrangement with any other person -- with
consideration other than Acquiring Fund Shares, any Acquiring Fund Shares
issued to the Shareholders pursuant to the Reorganization, except for
redemptions in the ordinary course of such business as required by section
22(e) of the 1940 Act;
4.2.7. Following the Reorganization, Acquiring Fund (a) will
continue Target's "historic business" (within the meaning of section
1.368-1(d)(2) of the Regulations) and (b) will use a significant portion of
Target's "historic business assets" (within the meaning of section
1.368-1(d)(3) of the Regulations) in a business; in addition, (c) Acquiring
Fund has no plan or intention to sell or otherwise dispose of any of the
Assets, except for dispositions made in the ordinary course of that
business and dispositions necessary to maintain its status as a RIC, and
(d) expects to retain substantially all the Assets in the same form as it
receives them in the Reorganization, unless and until subsequent investment
circumstances suggest the desirability of change or it becomes necessary to
make dispositions thereof to maintain such status;
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4.2.8. There is no plan or intention for Acquiring Fund to be
dissolved or merged into another business trust or a corporation or any
"fund" thereof (as defined in section 851(g)(2) of the Code) following the
Reorganization;
4.2.9. Acquiring Fund does not directly or indirectly own, nor at
the Effective Time will it directly or indirectly own, nor has it directly
or indirectly owned at any time during the past five years, any shares of
Target;
4.2.10. During the five-year period ending at the Effective Time,
neither Acquiring Fund nor any person "related" (within the meaning of
section 1.368-1(e)(3) of the Regulations) to it will have acquired Target
Shares with consideration other than Acquiring Fund Shares; and
4.2.11. Immediately after the Reorganization, (a) not more than
25% of the value of Acquiring Fund's total assets (excluding cash, cash
items, and U.S. government securities) will be invested in the stock and
securities of any one issuer and (b) not more than 50% of the value of such
assets will be invested in the stock and securities of five or fewer
issuers.
4.3. Trust's obligation to implement this Plan on each
Fund's behalf shall be subject to satisfaction of the
following conditions at or before the Effective Time:
4.3.1. The fair market value of the Acquiring Fund Shares each
Shareholder receives will be approximately equal to the fair market value
of its Target Shares it constructively surrenders in exchange therefor;
4.3.2. Its management (a) is unaware of any plan or intention of
Shareholders to redeem, sell, or otherwise dispose of (i) any portion of
their Target Shares before the Reorganization to any person "related"
(within the meaning of section 1.368-1(e)(3) of the Regulations) to either
Fund or (ii) any portion of the Acquiring Fund Shares they receive in the
Reorganization to any person "related" (within such meaning) to Acquiring
Fund, (b) does not anticipate dispositions of those Acquiring Fund Shares
at the time of or soon after the Reorganization to exceed the usual rate
and frequency of dispositions of shares of Target as a series of an
open-end investment company, (c) expects that the percentage of Shareholder
interests, if any, that will be disposed of as a result of or at the time
of the Reorganization will be DE MINIMIS, and (d) does not anticipate that
there will be extraordinary redemptions of Acquiring Fund Shares
immediately following the Reorganization;
4.3.3. The Shareholders will pay their own expenses, if any,
incurred in connection with the Reorganization;
4.3.4. The fair market value of the Assets on a going concern
basis will equal or exceed the Liabilities to be assumed by Acquiring Fund
and those to which the Assets are subject;
4.3.5. There is no intercompany indebtedness between the Funds
that was issued or acquired, or will be settled, at a discount;
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4.3.6. Pursuant to the Reorganization, Target will transfer to
Acquiring Fund, and Acquiring Fund will acquire, at least 90% of the fair
market value of the net assets, and at least 70% of the fair market value
of the gross assets, Target held immediately before the Reorganization. For
the purposes of the foregoing, any amounts Target uses to pay its
Reorganization expenses and to make redemptions and distributions
immediately before the Reorganization (except (a) redemptions in the
ordinary course of its business required by section 22(e) of the 1940 Act
and (b) regular, normal dividend distributions made to conform to its
policy of distributing all or substantially all of its income and gains to
avoid the obligation to pay federal income tax and/or the excise tax under
section 4982 of the Code) will be included as assets held thereby
immediately before the Reorganization;
4.3.7. None of the compensation received by any Shareholder who
is an employee of or service provider to Target will be separate
consideration for, or allocable to, any of the Target Shares that
Shareholder held; none of the Acquiring Fund Shares any such Shareholder
receives will be separate consideration for, or allocable to, any
employment agreement, investment advisory agreement, or other service
agreement; and the consideration paid to any such Shareholder will be for
services actually rendered and will be commensurate with amounts paid to
third parties bargaining at arm's-length for similar services;
4.3.8. Immediately after the Reorganization, the Shareholders
will not own shares constituting "control" (within the meaning of section
304(c) of the Code) of Acquiring Fund;
4.3.9. Neither Fund will be reimbursed for any expenses incurred
by it or on its behalf in connection with the Reorganization unless those
expenses are solely and directly related to the Reorganization (determined
in accordance with the guidelines set forth in Rev. Rul. 73-54, 1973-1 C.B.
187) ("Reorganization Expenses");
4.3.10. The aggregate value of the acquisitions, redemptions, and
distributions limited by paragraphs 4.1.8, 4.2.6, and 4.2.10 will not
exceed 50% of the value (without giving effect to such acquisitions,
redemptions, and distributions) of the proprietary interest in Target at
the Effective Time;
4.3.11. Trust has called a special meeting of Target's
shareholders ("Meeting") to consider and act on this Plan and to take all
other action necessary to obtain their approval, to the extent same is
required, of the transactions contemplated herein; and such approval has
been obtained;
4.3.12. This Plan has been duly authorized by all necessary
action on the part of Trust's board of trustees ("Board"), which has made
the determinations required by Rule 17a-8(a) under the 1940 Act; and,
subject to Target's shareholders' approval in accordance with the
Declaration of Trust and applicable law, this Plan constitutes a valid and
legally binding obligation of each Fund, enforceable in accordance with its
terms, except as the same may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium, and similar laws relating
to or affecting creditors' rights and by general principles of equity;
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4.3.13. No governmental consents, approvals, authorizations, or
filings are required under the 1933 Act, the Securities Exchange Act of
1934, as amended ("1934 Act"), or the 1940 Act for Trust's adoption of this
Plan, except for (a) the filing with the Securities and Exchange Commission
("SEC") of a registration statement by Trust on Form N-14 relating to the
Acquiring Fund Shares issuable hereunder, and any supplement or amendment
thereto ("Registration Statement"), including therein a prospectus/proxy
statement ("Prospectus/Proxy Statement"), and (b) such consents, approvals,
authorizations, and filings as have been made or received or as may be
required subsequent to the Effective Time;
4.3.14. On the effective date of the Registration Statement, at
the time of the Meeting, and at the Effective Time, the Prospectus/Proxy
Statement will (a) comply in all material respects with the applicable
provisions of the 1933 Act, the 1934 Act, and the 1940 Act and the rules
and regulations thereunder and (b) not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
4.3.15. All necessary filings will have been made with the SEC
and state securities authorities, and no order or directive will have been
received that any other or further action is required to permit the parties
to carry out the transactions contemplated hereby; the Registration
Statement will have become effective under the 1933 Act, no stop orders
suspending the effectiveness thereof will have been issued, and the SEC
will not have issued an unfavorable report with respect to the
Reorganization under section 25(b) of the 1940 Act nor instituted any
proceedings seeking to enjoin consummation of the transactions contemplated
hereby under section 25(c) of the 1940 Act; and all consents, orders, and
permits of federal, state, and local regulatory authorities (including the
SEC and state securities authorities) Trust deems necessary to permit
consummation, in all material respects, of the transactions contemplated
hereby will have been obtained, except where failure to obtain same would
not involve a risk of a material adverse effect on the assets or properties
of either Fund;
4.3.16. At the Effective Time, no action, suit, or other
proceeding will be pending before any court or governmental agency in which
it is sought to restrain or prohibit, or to obtain damages or other relief
in connection with, the transactions contemplated hereby; and
4.3.17. Trust will have received an opinion of Kirkpatrick &
Lockhart LLP ("Counsel"), addressed to and in form and substance reasonably
satisfactory to it, as to the federal income tax consequences mentioned
below ("Tax Opinion"). In rendering the Tax Opinion, Counsel may assume
satisfaction of all the conditions set forth in this paragraph 4, may treat
them as representations and warranties Trust made to Counsel, and may rely
as to factual matters, exclusively and without independent verification, on
such representations and warranties. The Tax Opinion shall be substantially
to the effect that, based on the facts and assumptions stated therein and
conditioned on consummation of the Reorganization in accordance with this
Plan, for federal income tax purposes:
(a) Acquiring Fund's acquisition of the Assets in
exchange solely for Acquiring Fund Shares and Acquiring Fund's
assumption of the Liabilities, followed
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by Target's distribution of those shares PRO RATA to the
Shareholders constructively in exchange for their Target
Shares, will qualify as a "reorganization" as defined in
section 368(a)(1)(C) of the Code, and each Fund will be "a
party to a reorganization" within the meaning of section
368(b) of the Code;
(b) Target will recognize no gain or loss on the
transfer of the Assets to Acquiring Fund in exchange solely
for Acquiring Fund Shares and Acquiring Fund's assumption of
the Liabilities or on the subsequent distribution of those
shares to the Shareholders in constructive exchange for their
Target Shares;
(c) Acquiring Fund will recognize no gain or loss on
its receipt of the Assets in exchange solely for Acquiring
Fund Shares and its assumption of the Liabilities;
(d) Acquiring Fund's basis in the Assets will be the
same as Target's basis therein immediately before the
Reorganization, and Acquiring Fund's holding period for the
Assets will include Target's holding period therefor;
(e) A Shareholder will recognize no gain or loss on the
constructive exchange of all its Target Shares solely for
Acquiring Fund Shares pursuant to the Reorganization; and
(f) A Shareholder's aggregate basis in the Acquiring
Fund Shares it receives in the Reorganization will be the same
as the aggregate basis in its Target Shares it constructively
surrenders in exchange for those Acquiring Fund Shares, and
its holding period for those Acquiring Fund Shares will
include its holding period for those Target Shares, provided
the Shareholder holds them as capital assets at the Effective
Time.
Notwithstanding subparagraphs (b) and (d), the Tax Opinion may
state that no opinion is expressed as to the effect of the
Reorganization on the Funds or any Shareholder with respect to any
Asset as to which any unrealized gain or loss is required to be
recognized for federal income tax purposes at the end of a taxable year
(or on the termination or transfer thereof) under a mark-to-market
system of accounting.
4.4. At any time before the Effective Time, Trust may
waive any of the conditions set forth in this paragraph 4
if, in the judgment of the Board, such a waiver will not
have a material adverse effect on either Fund's
shareholders' interests.
5. TERMINATION AND AMENDMENT OF PLAN
5.1. The Board may terminate this Plan and abandon the
Reorganization at any time before the Effective Time if
circumstances develop that, in its judgment, make proceeding
with the Reorganization inadvisable for either Fund.
5.2. The Board may amend, modify, or supplement this
Plan at any time in any manner, notwithstanding Target's
shareholders' approval thereof;
A-10
<Page>
provided that, following such approval no such amendment,
modification, or supplement shall have a material adverse
effect on the Shareholders' interests.
6. MISCELLANEOUS
6.1. This Plan shall be construed and interpreted in
accordance with the internal laws of the State of Delaware,
provided that, in the case of any conflict between those
laws and the federal securities laws, the latter shall
govern.
6.2. The Funds shall bear all the Reorganization
Expenses in proportion to their respective net assets as of
the Effective Time.
6.3. Nothing expressed or implied herein is intended or
shall be construed to confer on or give any person, firm,
trust, or corporation other than the Funds and their
respective successors and assigns any rights or remedies
under or by reason of this Plan.
6.4. Notice is hereby given that this instrument is
adopted on behalf of Trust's trustees solely in their
capacities as trustees, and not individually, and that
Trust's obligations under this instrument are not binding on
or enforceable against any of its trustees, officers, or
shareholders or any series of Trust other than the Funds but
are only binding on and enforceable against the respective
Funds' property. Each Fund, in asserting any rights or
claims under this Plan, shall look only to the other Fund's
property in settlement of such rights or claims and not to
such trustees, officers, or shareholders.
A-11
<Page>
APPENDIX B
ADDITIONAL INFORMATION REGARDING GLOBAL SELECT FUND
INVESTMENT ADVISER
Investment decisions for Global Select Fund are made by its investment
adviser, Nicholas-Applegate, subject to direction by the Board.
Nicholas-Applegate continually conducts investment research and supervision for
each Fund and is responsible for the purchase or sale of portfolio instruments,
for which it receives an annual fee from Global Select Fund.
Founded in 1984, Nicholas-Applegate currently manages approximately $17
billion in discretionary assets for numerous clients, including employee benefit
plans, corporations, public retirement systems and unions, university
endowments, foundations, and other institutional investors and individuals.
Nicholas-Applegate's address is 600 West Broadway, Suite 2900, San Diego,
California 92101.
SHARE PRICE
The NAV per Global Select Fund Class I share is determined each business
day at the close of regular trading on the New York Sock Exchange (usually 4
p.m. Eastern time) by dividing the value of the net assets (I.E., the value of
the securities it holds, plus any cash or other assets, minus its liabilities,
including accrued estimated expenses) attributable to that class by the number
of its shares outstanding.
Securities traded in foreign countries may not take place on all business
days of the New York Stock Exchange and may occur in various foreign markets on
days that are not business days of the New York Stock Exchange. Accordingly,
Global Select Fund's NAV per share may change on days when the U.S. markets are
closed and a shareholder will not be able to sell his or her shares.
PURCHASES AND REDEMPTIONS
Shares are offered at their NAV without a sales charge. Your financial
institution may charge you a fee to execute orders on your behalf. Buy and sell
requests are executed at the NAV per share next calculated after your request is
received in good order by the transfer agent or another agent designated by the
Trust. Global Select Fund reserves the right to refuse any purchase order.
The minimum initial investment for opening account is $250,000, and the
minimum subsequent investment is $10,000. The minimum investment may be waived
for purchases of shares made by current or retired trustees, members, officers,
and employees of the Trust, the Distributor, Nicholas-Applegate, and its
managing member, certain family members of the above persons, and trusts or
plans primarily for such persons or former employees employed by one of its
affiliates, or at the Distributor's discretion. Global Select Fund may only
accept orders for shares in states where it is legally able to offer shares.
Global Select Fund provides for telephone, mail, or wire redemption of shares.
It reserves the right to redeem in-kind, under certain circumstances, by paying
you the proceeds of a redemption in securities rather than in cash. Additional
information concerning purchases and redemption of shares, including how Global
Select Fund's NAV per share is calculated, is contained in the Pro/SAI.
B-1
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EXCHANGES
On any business day you may exchange all or a portion of your shares for
shares of any other available Nicholas-Applegate mutual fund of the same share
class. To protect the interest of other investors in Global Select Fund, the
Trust may cancel the exchange privileges of any parties that, in
Nicholas-Applegate's opinion, are using market-timing strategies that adversely
affect Global Select Fund. Guidelines for exchanges are available from the
Distributor upon request. The Trust may also refuse any exchange order.
DIVIDENDS AND OTHER DISTRIBUTIONS
Global Select Fund generally distributes most or all of its net earnings in
the form of dividends and distributes any net capital gains annually to
shareholders of record on the distribution record date. Annual dividends and net
capital gains are normally distributed in the last calendar quarter. Dividends
and other distributions are reinvested in additional shares of the same class of
Global Select Fund, or paid in cash, as a shareholder has elected. See the
Pro/SAI for further information concerning dividends and other distributions.
After a Reorganization, shareholders of the applicable Target who have
elected to reinvest their dividends and/or other distributions therefrom will
have dividends and/or other distributions they receive from Global Select Fund
reinvested in that Fund's shares. Shareholders of a Target who have elected to
have their dividends and/or other distributions therefrom in cash will receive
dividends and/or other distributions from Global Select Fund in cash after that
Target's Reorganization, although they may thereafter elect to have those
dividends and/or other distributions reinvested in additional Global Select Fund
shares.
Global Select Fund has qualified and intends to continue to qualify to be
treated as a regulated investment company under the Code, which requires, among
other things, that it distribute at least 90% of its taxable income. So long as
it does so, it will not be required to pay any federal income tax on the amounts
it distributes to its shareholders. A 4% nondeductible federal excise tax will
be imposed on undistributed amounts if Global Select Fund does not meet certain
other distribution requirements by the end of each calendar year. Global Select
Fund anticipates meeting such distribution requirements.
YOUR ACCOUNT
TRANSACTION POLICIES
PURCHASE OF SHARES. Shares are offered at their NAV without a sales charge.
The minimum initial investment for opening account is $250,000, and the minimum
subsequent investment is $10,000. The minimum investment may be waived for
purchases of shares made by current or retired trustees, members, officers, and
employees of the Trust, the Distributor, Nicholas-Applegate, and its managing
member, certain family members of the above persons, and trusts or plans
primarily for such persons or former employees employed by one of its
affiliates, or at the Distributor's discretion. Global Select Fund may only
accept orders for shares in states where it is legally able to offer shares.
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PRICING OF SHARES. The NAV per share of the Fund is determined each
business day at the close of regular trading on the New York Stock Exchange
(usually 4 p.m. Eastern time) by dividing the value of the Funds' net assets by
the number of its shares outstanding.
Securities traded in foreign countries may not take place on all business
days of the New York Stock Exchange, and may occur in various foreign markets on
days which are not business days of the New York Stock Exchange. Accordingly, a
Fund's NAV may change on days when the U.S. markets are closed whereby a
shareholder of the Fund will not be able to sell their shares.
NAV is based on the market value of the securities in a Fund's portfolio.
If the methods utilized by the Investment Adviser to value the Fund's portfolio
securities do not accurately reflect current market value, portfolio securities
are valued at fair value as determined in good faith by or under policies
established by the Trust's Board of Trustees.
BUY AND SELL PRICES. When you buy shares, you pay the NAV, as described
earlier. When you sell shares, you receive the NAV. Your financial institution
may charge you a fee to execute orders on your behalf.
EXECUTION OF REQUESTS. Each Fund is open on the days the New York Stock
Exchange is open, usually Monday-Friday. Buy and sell requests are executed at
the NAV next calculated after your request is received in good order by the
transfer agent or another agent designated by the Trust. The Fund reserves the
right to refuse any purchase order.
Each Fund reserves the right to reject any purchase or to suspend or modify
the continuous offering of its shares. Your financial representative is
responsible for forwarding payment promptly to the transfer agent. The Trust
reserves the right to cancel any buy request if payment is not received within
three days.
In unusual circumstances, any Fund may temporarily suspend the processing
of sell requests, or may postpone payment of proceeds for up to seven business
days or longer, as allowed by federal securities laws.
PURCHASE OF SHARES JUST BEFORE RECORD DATE. If you buy shares of the Funds
just before the record date for a distribution (the date that determines who
receives the distribution), we will pay that distribution to you. When a
distribution is paid out of the value of each share of the Fund decreases by the
amount of the distribution to reflect the payout. The distribution you receive
makes up the decrease in share value. As explained under the Taxability of
Dividends section, the distribution may be subject to income or capital gains
taxes. The timing of your purchase means that part of your investment came back
to you as taxable income.
EXCHANGES. On any business day you may exchange all or a portion of your
shares for shares of any other available Fund of the same share class. To
protect the interest of other investors in a Fund, the Trust may cancel the
exchange privileges of any parties that, in the opinion of the Investment
Adviser, are using market-timing strategies that adversely affect the Fund.
Guidelines for exchanges are available from the Distributor upon request. The
Trust may also refuse any exchange order.
B-3
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REDEMPTIONS IN KIND. When a Fund elects to satisfy a redemption request
with securities, the shareholder assumes the responsibility of selling the
securities as well as a market risk of an unfavorable market movement during the
time required to convert the securities to cash.
TELEPHONE TRANSACTIONS. For your protection, telephone requests may be
recorded in order to verify their accuracy. In addition the Trust will take
measures to verify the identity of the caller, such as asking for name, account
number, Social Security or taxpayer ID number and other relevant information. If
these measures are not taken, your Fund may be responsible for any losses that
may occur in your account due to an unauthorized telephone call.
At times of peak activity, it may be difficult to place requests by phone.
During these times, consider sending your request in writing.
CERTIFICATED SHARES. Shares of the Trust are electronically recorded. The
Trust does not normally issue certificated shares.
SALES IN ADVANCE OF PURCHASE PAYMENTS. When you place a request to sell
shares for which the purchase money has not yet been collected, the request will
be executed in a timely fashion, but the Fund will not release the proceeds to
you until your purchase payment clears. This may take up to fifteen calendar
days after the purchase.
FEATURES AND ACCOUNT POLICIES
The services referred to in this section may be terminated or modified at
any time upon 60 days' written notice to shareholders. Shareholders seeking to
add to, change or cancel their selection of available services should contact
the transfer agent.
RETIREMENT PLANS. You may invest in each Fund through various retirement
plans, including IRAs, Roth IRAs, Simplified Employee Plan (SEP) IRAs, 403(b)
plans, 457 plans, and all qualified retirement plans. For further information
about any of the plans, agreements, applications and annual fees, contact the
Distributor, your financial representative or plan sponsor. To determine which
retirement plan is appropriate for you, consult your tax adviser.
ACCOUNT STATEMENTS. Shareholders will receive periodic statements reporting
all account activity, including systematic transactions, dividends and capital
gains paid.
DIVIDENDS. The Funds generally distribute most or all of their net earnings
in the form of dividends. Each Fund pays dividends of net investment income as
follows:
Any net capital gains are distributed annually.
* Annual dividends and net capital gains are normally distributed in the
last calendar quarter.
DIVIDEND REINVESTMENTS. If you choose this option, or if you do not
indicate any choice, your dividends will be reinvested on the ex-dividend date.
Alternatively, you can choose to have a check for your dividends mailed to you.
Interest will not accrue or be paid on uncashed dividend checks.
B-4
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TAXABILITY OF DIVIDENDS. Dividends you receive from a Fund, whether
reinvested or taken as cash, are generally taxable. Dividends from a Fund's
long-term capital gains are taxable as capital gains; dividends from other
sources are generally taxable as ordinary income.
Some dividends paid in January may be taxable as if they had been paid the
previous December. Corporations may be entitled to take a dividends-received
deduction for a portion of certain dividends they receive.
The tax information statement that is mailed to you details your dividends
and their federal tax category, although you should verify your tax liability
with your tax professional.
TAXABILITY OF TRANSACTIONS. Any time you sell or exchange shares, it is
considered a taxable event for you. Depending on the purchase price and the sale
price of the shares you sell or exchange, you may have a gain or a loss on the
transaction. You are responsible for any tax liabilities generated by your
transactions.
Federal tax law requires you to provide the Fund with your taxpayer
identification number and certifications as to your tax status. If you fail to
do this, or if you are otherwise subject to backup withholding, the Fund will
withhold and pay to the U.S. Treasury 31% of your distributions and sale
proceeds. Dividends of net investment income and short-term capital gains paid
to a nonresident foreign shareholder generally will be subject to a U.S.
withholding tax of up to 30%. This rate may be lower, depending on any tax
treaty the U.S. may have with the shareholder's country.
SMALL ACCOUNTS. If you draw down a non-retirement account so that its total
value is less than $250,000, you may be asked to purchase more shares within 60
days. If you do not take action, the Fund may close out your account and mail
you the proceeds. Your account will not be closed if its drop in value is due to
Fund performance.
AUTOMATIC INVESTMENT PLAN. You may make regular monthly or quarterly
investments in each Fund through automatic withdrawals of specified amounts from
your bank account once an automatic investment plan is established. See the
account application for further details about this service or call the Transfer
Agent at 1-800-551-8043.
CROSS-REINVESTMENT. You may cross-reinvest dividends or dividends and
capital gains distributions paid by one Fund into another Fund, subject to
conditions outlined in the Statement of Additional Information and the
applicable provisions of the qualified retirement plan.
FINANCIAL HIGHLIGHTS
The financial highlights tables are intended to help you understand the
Funds' financial performance for the period since commencement of operations.
Certain information reflects financial results for a share of the predecessor
Institutional Portfolio outstanding throughout each period indicated. The total
returns in the table represent the rate that an investor would have earned [or
lost] on an investment in the Fund (assuming reinvestment of all dividends and
distributions).
This information has been audited by Ernst & Young LLP with respect to the
fiscal year ended March 31, 2002 and the prior four fiscal years, if any.
Please read in conjunction with the Trust's 2002 Annual Report, which is
available upon request.
B-5
<Page>
<Table>
<Caption>
GLOBAL SELECT
FOR THE FOR THE FOR THE FOR THE FOR THE 9/30/97
PERIOD ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED (COMMENCED)
09/30/02 03/31/02 03/31/01 3/31/00 3/31/99 TO 3/31/98
UNAUDITED
- --------------------------------------------------------------------------------------------------------------------------
Net Asset
Value,
Beginning $13.67 12.86 31.91 20.48 14.81 12.50
Net
Investment
Income (Loss)(1) $0.00 (0.06) (0.06) (0.21) (0.05) -
Net Realized
and Unrealized
Gains (Loss) $(3.53) 0.87 (10.00) 19.90 5.86 2.31
Total From
Investment
Operations $(3.53) 0.81 (10.06) 19.69 5.81 2.31
DISTRIBUTIONS FROM:
Net
Investment
Income - - - - - -
Net
Realized
Capital Gains - - (8.99) (8.26) (0.14) -
Net Asset
Value,
Ending $10.14 13.67 12.86 31.91 20.48 14.81
Total
Return(2) (25.82%) 6.30% (36.33%) 110.64% 39.55% 18.48%
RATIOS TO AVERAGE NET ASSETS(3)
Net
Investment
Income (Loss) (0.05%) (0.43%) (0.21%) (0.81%) (0.31%) (0.06%)
Total
Expenses 1.37% 1.37% 1.78% 1.82% 3.14% 2.14%
Expense
(Reimbursements)/
Recoupment (0.19%) (0.14%) (0.48%) (0.49%) (1.81%) (0.94%)
Net
Expenses(4) 1.18%(5) 1.23% 1.30% 1.33% 1.33% 1.20%
Fund's
Portfolio
Turnover
Rate 129% 401% 440% 348% 419% 238%
Net Assets,
Ending
(in 000's) $49,281 41,219 15,023 24,742 10,414 7,320
</Table>
<Table>
<Caption>
GLOBAL TECHNOLOGY
FOR THE FOR THE FOR THE FOR THE 7/31/98
PERIOD ENDED YEAR ENDED YEAR ENDED YEAR ENDED (COMMENCED)
09/30/02 03/31/02 03/31/01 3/31/00 TO 3/31/99
UNAUDITED
- -----------------------------------------------------------------------------------------------------------
Net Asset
Value,
Beginning $19.69 22.27 138.95 44.64 12.50
Net
Investment
Income (Loss)(1) ($0.09) (0.09) (0.78) (1.09) (0.05)
Net Realized
and Unrealized
Gains (Loss) $(9.65) (2.49) (80.32) 108.81 32.19
Total From
Investment
Operations $(9.74) (2.58) (81.10) 107.72 32.14
DISTRIBUTIONS FROM:
Net
Investment
Income - - - - -
Net
Realized
Capital Gains - - (35.58) (13.41) -
Net Asset
Value,
Ending $9.95 19.69 22.27 138.95 44.64
Total
Return(2) (49.49%) (11.59%) (69.62%) 259.92% 257.20%
RATIOS TO AVERAGE NET ASSETS(3)
Net
Investment
Income (Loss) 0.23% (0.43%) (0.93%) (1.06%) (0.84%)
Total
Expenses 1.84% 1.46% 1.36% 1.42% 4.12%
Expense
(Reimbursements)/
Recoupment (0.33%) (0.02%) 0.04% - (2.69%)
Net
Expenses(4) 1.51% 1.44% 1.40% 1.42% 1.43%
Fund's
Portfolio
Turnover
Rate 96% 504% 416% 357% 254%
Net Assets,
Ending
(in 000's) $16,804 57,794 75,622 405,318 24,094
</Table>
<Table>
<Caption>
GLOBAL HEALTHCARE
FOR THE FOR THE FOR THE 9/1/99
PERIOD ENDED YEAR ENDED YEAR ENDED (COMMENCED)
09/30/02 03/31/02 03/31/01 TO 3/31/00
UNAUDITED
- ----------------------------------------------------------------------------------------------
Net Asset
Value,
Beginning $24.93 22.98 30.91 12.50
Net
Investment
Income (Loss)(1) ($0.12) (0.21) (0.16) (0.10)
Net Realized
and Unrealized
Gains (Loss) $(7.22) 2.16 0.03 18.52
Total From
Investment
Operations $(7.34) 1.95 (0.13) 18.42
DISTRIBUTIONS FROM:
Net
Investment
Income - - (0.10) (0.01)
Net
Realized
Capital Gains - - (7.70) -
Net Asset
Value,
Ending $17.59 24.93 22.98 30.91
Total
Return(2) (29.44%) 8.49% (5.36%) 147.42%
RATIOS TO AVERAGE NET ASSETS(3)
Net
Investment
Income (Loss) 0.34% (0.80%) (0.52%) (0.69%)
Total
Expenses 1.60% 1.36% 1.37% 1.45%
Expense
(Reimbursements)/
Recoupment (0.19%) 0.00% 0.01% (0.04%)
Net
Expenses(4) 1.41% 1.36% 1.38% 1.41%
Fund's
Portfolio
Turnover
Rate 207% 396% 717% 327%
Net Assets,
Ending
(in 000's) $20,467 93,177 88,104 125,355
</Table>
(1) Prior to April 1, 1999, net investment income per share was calculated by
taking the difference in undistributed net investment income per share at
the beginning and end of the period, adjusted for per share distributions.
Beginning April 1 , 1999, net investment income per share is calculated by
dividing net investment income for the period by the average shares
outstanding during the period.
(2) Total returns are not annualized for periods less than one year.
(3) Ratios are annualized for periods of less than one year. Expense
reimbursements reflect voluntary reductions to total expenses, as discussed
in the notes to financial statements. Such amounts would decrease net
investment income (loss) ratios had such reductions not occurred.
(4) Net expenses include certain items not subject to expense reimbursement.
(5) On May 17, 2002 the Board of Trustees approved an amendment to the Expense
Limitation Agreement whereby overall operating expenses of the Global
Select, excluding taxes, interest, brokerage and extraordinary expenses,
do not exceed 1.05%, representing a 0.15% decrease in the Fund's
expense cap, respectively.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
B-6
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APPENDIX C
THE FUNDS' REVIEW, OUTLOOK AND PERFORMANCE
GLOBAL SELECT FUND INSTITUTIONAL SHARES
MANAGEMENT TEAM: CATHERINE SOMHEGYI NICHOLAS, Lead Portfolio Manager; PEDRO
V. MARCAL, JR., Portfolio Manager; LORETTA J. MORRIS, Portfolio Manager; STEVEN
ROSS, Portfolio Manager; ANDREW BEAL, Portfolio Manager;; LAWRENCE S. SPEIDELL,
CFA, Director of Global & Systematic Management & Research
GOAL: The Global Select Fund seeks to maximize long-term capital
appreciation by investing in companies that, in the opinion of the Investment
Adviser, represent the "best of the best" globally.
MARKET OVERVIEW: During the fiscal year ended March 31, 2002, global equity
markets posted mixed results.
The investment climate was characterized by a slowdown in global GDP, led
by the United States. As world economies weakened, so did corporate profit
growth and stock prices. Technology and telecommunications companies suffered
the brunt of the decline, as capital spending remained soft. Difficult economic
and investment conditions were accentuated by the terrorist attacks.
Monetary policy was highly accommodative as central banks worldwide lowered
interest rates in an effort to stimulate growth. Near the end of the period,
investors were encouraged by positive economic news emanating from around the
globe.
During the period, broad US indices were flat to slightly higher,
concealing underlying month-to-month volatility. Overseas, stock prices in
developed countries fell, led by weakness in Japan. On a positive note, emerging
markets registered double-digit gains. Emerging market equities generally
respond favorably to easy monetary policy and are most leveraged to an economic
recovery. Small-cap stocks, which also tend to do well during easing cycles,
outperformed large caps this period.
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PERFORMANCE: During the 12 months ended March 31, 2002, the Fund gained
6.3%, outperforming the MSCI All Country Word Index Free, which was down 3.1%.
On an annualized basis, the Fund rose 12.6% during the three years ended March
31, 2002, versus the MSCI All Country World Index Free, which fell 3.8%.
PORTFOLIO SPECIFICS: The Fund's strong performance versus its benchmark
this period was largely attributable to stock selection in the United States and
Taiwan and among retail and technology companies.
Examples of some of the Fund's best-performing holdings were US-based
Ticketmaster, an online ticketing service and United Microelectronics, a global
semiconductor manufacturer located in Taiwan.
Based on our company-by-company analysis, at March 31, 2002, the Fund was
underweight in financial services stocks and overweight in the transportation
sector. The Fund was also overweight in consumer services as we expect select
companies in the broadcasting, publishing and hotel industries to perform well
as the economy recovers.
MARKET OUTLOOK: We remain optimistic in our outlook for the global equity
markets due to:
- Ongoing benefits of low interest rates
- Expectations economies will continue to improve
- Likelihood that corporate earnings have bottomed and are poised for a
rebound
Recently, the market has become more sensitive to earnings reports,
rewarding stocks that are beating expectations - and punishing those that are
not. This type of environment is especially conducive to our research-intensive,
bottom-up investment process.
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN GLOBAL SELECT
FUND INSTITUTIONAL SHARES WITH THE MSCI ALL COUNTRY WORLD INDEX FREE.
C-2
<Page>
ANNUALIZED TOTAL RETURNS
As of 3/31/02
1 Year Since Inception
6.30% 21.00%
Line Graph: Global Select Fund Institutional Shares Growth of $250,000
<Table>
<Caption>
GLOBAL MSCI ALL
SELECT FUND COUNTRY WORLD
INSTITUTIONAL SHARES FREE INDEX
9/30/97 $250,000 $250,000
10/97 $235,000 $235,125
11/97 $236,200 $238,722
12/97 $247,000 $241,850
1/98 $255,800 $247,170
2/98 $275,000 $264,077
3/98 $296,200 $275,353
4/98 $310,400 $277,941
5/98 $311,200 $272,660
6/98 $325,800 $277,568
7/98 $334,000 $277,651
8/98 $277,000 $238,753
9/98 $286,800 $243,504
10/98 $298,200 $265,736
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<Page>
11/98 $319,687 $281,866
12/98 $361,061 $294,944
1/99 $397,187 $300,961
2/99 $377,610 $293,407
3/99 $413,333 $306,610
4/99 $428,469 $319,856
5/99 $414,745 $308,565
6/99 $463,385 $323,932
7/99 $473,678 $322,603
8/99 $491,842 $322,216
9/99 $507,786 $318,736
10/99 $557,636 $334,864
11/99 $652,092 $345,279
12/99 $828,075 $374,040
1/00 $772,143 $353,880
2/00 $903,653 $355,083
3/00 $870,639 $378,412
4/00 $805,975 $361,421
5/00 $766,140 $352,024
6/00 $816,070 $363,958
7/00 $792,060 $353,257
8/00 $854,814 $364,244
9/00 $789,332 $344,247
10/00 $724,941 $337,499
11/00 $659,497 $316,575
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<Page>
12/00 $702,601 $321,861
1/01 $693,118 $330,004
2/01 $596,133 $302,251
3/01 $554,322 $281,910
4/01 $615,099 $302,433
5/01 $601,737 $299,076
6/01 $594,840 $289,924
7/01 $578,030 $285,343
8/01 $533,201 $272,217
9/01 $472,855 $247,364
10/01 $489,235 $252,608
11/01 $536,218 $268,143
12/01 $559,495 $270,664
1/02 $553,891 $263,248
2/02 $552,598 $261,326
3/31/02 $589,237 $273,138
</Table>
The graph above shows the value of a hypothetical $250,000 investment in
the Fund's Class I shares compared with the Morgan Stanley Capital International
All Country World Free Index ("MSCI ACW Free") over the periods indicated. The
Fund's Class I shares calculate their performance based upon the historical
performance of their corresponding series of Nicholas-Applegate Mutual Funds
(renamed Pilgrim Mutual Funds). The Nicholas-Applegate Institutional Funds'
Class I shares were first available on May 7, 1999. Average annual total return
figures include changes in principal value, reinvested dividends, and capital
gain distributions. Absent expense limitations, total returns would have been
slightly lower. The total returns shown above do not show the effects of income
taxes on an individual's investment. In most cases, taxes may reduce your actual
investment returns on income or gains paid by the Fund or any gains you may
realize if you sell your shares. Past performance cannot guarantee future
results.
C-5
<Page>
The MSCI ACW Free Index is a market capitalization weighted index composed
of 1,784 companies with average market capitalizations of US $5.9 billion. The
index is representative of the market structure of 22 developed countries in
North America, Europe, and the Pacific Rim. The index is calculated without
dividends or with gross dividends invested, in both US dollars and local
currencies.
The unmanaged Index differs from the Fund in composition, does not pay
management fees or expenses and includes reinvested dividends. One cannot invest
directly in an index.
Since markets can go down as well as up, investment return and principal
value will fluctuate with market conditions, currency volatility and the social,
economic and political climates of countries where the Fund invests. You may
have a gain or loss when you sell your shares.
GLOBAL TECHNOLOGY FUND INSTITUTIONAL SHARES
MANAGEMENT TEAM: CATHERINE SOMHEGYI NICHOLAS, Lead Portfolio Manager;
CHRISTOPHER ANGIOLETTI, Portfolio Manager; JASON CAMPBELL, Portfolio Manager;
JOHN MAZUR, Investment Analyst; KARL RICHTENBURG, Investment Analyst
GOAL: The Global Technology Fund seeks to maximize long-term capital
appreciation by investing primarily in the equity securities of companies with
business operations in technology and technology-related industries worldwide.
MARKET OVERVIEW: After peaking in March 2000, prices of technology stocks
continued to slide during the fiscal year ended March 31, 2002. Losses were not
nearly as severe as those of the prior 12 months, however. This period's decline
was largely due to:
C-6
<Page>
- Overcapacity stemming from unusually high levels of technology-related
spending in the late 1990s
- Cyclical downturn in global economic activity resulting in soft
end-market demand
The terrorist strikes worsened an already difficult climate, sending stock
prices lower and prompting companies to make deep cuts to profit forecasts. In
the months that followed, investors realized business had not come to a
standstill, and that technology companies were still receiving orders. As
investor confidence rose, the sector recouped its post-September 11 losses.
Later in the fiscal year, selling pressure resumed as technology spending
remained weak, despite signs of a pickup in global economic activity. In the
past, technology recoveries have typically trailed the rest of the economy by
one or two quarters.
PERFORMANCE: The Fund lost 11.6% during the fiscal year ended March 31,
2002 versus a 6.5% drop in the Merrill Lynch Global Technology 100 Index. Since
its July 31, 1998 inception, the Fund gained 40.2%, annualized, versus the
Merrill Lynch Global Technology 100 Index, which rose 7.4%.
PORTFOLIO SPECIFICS: The Fund's underperformance was concentrated in the
first half of the fiscal year and was mainly due to holdings in the software and
telecommunications equipment industries. In the difficult environment,
corporations cut information technology and capital spending more severely than
we had anticipated. The Fund outperformed its benchmark during the second half
of the fiscal year.
Several of the Fund's holdings posted strong price gains this period, most
notably in the semiconductor industry. For example, shares of United
Microelectronics, a Taiwan-based semiconductor foundry climbed higher. The
company saw an increase in orders across its major product lines, including the
PC and digital consumer markets.
We selectively added to holdings in South Korea and Taiwan this period.
Companies in these countries are major suppliers of components to US technology
firms and should be early beneficiaries of a recovery in technology-related
spending.
MARKET OUTLOOK: We believe technology is poised for a rebound. Companies
are shedding excess inventories. The upturn in global economic activity should
translate into increased technology-related spending over the next few months.
Because many technology companies have cut costs in response to difficult
conditions, more robust demand should lead to
C-7
<Page>
wider operating margins. As the economy and margins improve, earnings should be
revised upward and earnings multiples should expand.
Against this positive backdrop, we are confident our research-intensive
approach and global perspective will lead us to technology stocks with
exceptional price appreciation potential.
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN GLOBAL TECHNOLOGY
FUND INSTITUTIONAL SHARES WITH THE MERRILL LYNCH GLOBAL TECHNOLOGY 100 INDEX.
ANNUALIZED TOTAL RETURNS
As of 3/31/02
1 year Since Inception
-11.59% 40.22%
<Table>
<Caption>
GLOBAL TECHNOLOGY FUND MERRILL LYNCH GLOBAL
INSTITUTIONAL SHARES TECHNOLOGY 100 INDEX
7/31/98 $250,000 $250,000
8/98 $250,800 $193,370
9/98 $236,000 $225,062
10/98 $244,000 $248,156
11/98 $361,400 $281,810
12/98 $454,200 $333,723
1/99 $638,200 $379,246
C-8
<Page>
2/99 $668,000 $335,469
3/99 $839,000 $371,289
4/99 $980,800 $387,993
5/99 $940,000 $396,688
6/99 $1,097,800 $450,380
7/99 $1,154,200 $439,980
8/99 $1,292,000 $463,921
9/99 $1,364,800 $476,776
10/99 $1,609,600 $523,735
1/99 $2,008,791 $631,687
12/99 $2,696,740 $776,543
1/00 $2,702,523 $763,613
2/00 $3,705,299 $994,453
3/00 $3,232,817 $947,998
4/00 $2,759,196 $853,160
5/00 $2,429,795 $745,602
6/00 $2,953,275 $848,269
7/00 $2,789,731 $789,623
8/00 $3,227,159 $929,343
9/00 $2,917,651 $816,298
10/00 $2,419,617 $730,562
11/00 $1,706,756 $524,668
12/00 $1,715,963 $495,763
1/01 $1,828,197 $581,105
2/01 $1,191,616 $413,026
C-9
<Page>
3/01 $976,354 $347,103
4/01 $1,202,577 $242,050
5/01 $1,104,371 $399,134
6/01 $1,061,845 $400,763
7/01 $966,270 $364,322
8/01 $839,568 $319,692
9/01 $609,399 $236,828
10/01 $727,772 $281,683
11/01 $832,115 $334,978
12/01 $870,695 $334,375
01/02 $837,188 $336,214
2/02 $761,968 $290,589
3/31/02 $863,242 $324,385
</Table>
The graph above shows the value of a hypothetical $250,000 investment in
the Fund's Class I shares compared with the Merrill Lynch Global Technology 100
Index over the periods indicated. The Fund's Class I shares calculate their
performance based upon the historical performance of their corresponding series
of Nicholas-Applegate Mutual Funds (renamed Pilgrim Mutual Funds). The
Nicholas-Applegate Institutional Funds' Class I shares were first available on
May 7, 1999. Average annual total return figures include changes in principal
value, reinvested dividends, and capital gain distributions. Absent expense
limitations, total returns would have been slightly lower. The total returns
shown above do not show the effects of income taxes on an individual's
investment. In most cases, taxes may reduce your actual investment returns on
income or gains paid by the Fund or any gains you may realize if you sell your
shares. Past performance cannot guarantee future results.
The unmanaged Merrill Lynch Global Technology Index tracks the performance
of the 100th largest securities in the global technology sector.
The index differs from the Fund in composition, does not pay management
fees or expenses and includes reinvested dividends. One cannot invest directly
in an index.
C-10
<Page>
The Fund's historical performance was affected by special market factors,
including the Fund's investments in IPOs, which had a material impact on
performance. As the assets of the fund increase, gains attributable to hot IPOs
will have a decreasing effect on overall fund performance. Accordingly, there is
no guarantee that, as the Fund's assets grow, it will continue to experience
substantially similar performance.
Since markets can go down as well as up, investment return and principal
value will fluctuate with market conditions, currency volatility and the social
economic and political climates of countries where the Fund invests. You may
have a gain or loss when you sell your shares.
GLOBAL HEALTH CARE FUND INSTITUTIONAL SHARES
MANAGEMENT TEAM:Catherine Somhegyi Nicholas; Montie L.Weisenberger,
Investment Analyst; Peter S. Moon, Investment Analyst.
GOAL: The Global Health Care Fund seeks to maximize long-term capital
appreciation by investing primarily in the equity securities of companies with
business operations in healthcare and healthcare-related industries worldwide.
MARKET OVERVIEW: Global healthcare stocks delivered mixed returns during
the fiscal year ended March 31, 2002.
Biotech returns were flat, masking the industry's underlying volatility.
Early in the period, biotech stocks rose as impressive earnings and the spring
medical meeting season captured investor attention. The group lost ground after
the terrorist attacks, only to recoup losses as investors rotated back into
high-growth industries in anticipation of economic recovery. Finally, negative
news about pending drug approvals sent stocks lower in early 2002.
C-11
<Page>
The large pharmaceutical companies delivered modest gains this period.
Major drug stocks held up well in the post-September 11 selloff. However,
pricing pressures, patent expirations and pipeline deficiencies dampened
investor enthusiasm.
Healthcare service companies, managed care providers and medical device
firms posted solid gains this fiscal year. Healthcare services did well due to
favorable volume and pricing trends and lack of imminent changes to the Medicare
reimbursement system. Managed care providers enjoyed strong premium increases
and enrollment growth, while medical cost inflation remained under control.
Favorable demographics and strong new product cycles boosted shares of medical
device companies.
PERFORMANCE: During the 12 months ended March 31, 2002, the Fund gained
8.5%. The Nasdaq Biotechnology Index, which tracks more than 200 global biotech
stocks, rose 0.8%. The Russell 3000 Healthcare Index, a barometer of a few, very
large US pharmaceutical firms, advanced 3.6%.
Since its September 1, 1999 inception through March 31, 2002, the Fund
appreciated 43.5%, annualized, compared to a 4.8% gain in the Russell 3000
Healthcare Index.
PORTFOLIO SPECIFICS: Stock selection across the full spectrum of healthcare
industries drove the Fund's strong performance this period. Among the
best-performing holdings were Gilead Sciences, Forest Laboratories and Anthem,
all US companies. Gilead Sciences, a biotechnology firm, benefited from the
successful launch of Viread, its new HIV drug. Shares of Forest Laboratories, a
pharmaceutical company, climbed higher due to robust sales of Celexa, which
treats depression, and a solid product pipeline. At Anthem, a managed care
provider that went public last fall, strong membership enrollment drove
impressive revenue gains.
MARKET OUTLOOK: We remain excited about the investment potential of the
healthcare sector. Near term, biotech stock prices should rise due to positive
news flow emanating from numerous spring medical conferences. Farther out in
2002, biotech should continue to do well amid expectations for many FDA drug
approvals. Upcoming patent expirations bode well for generic drug companies.
Managed care and healthcare service providers are exhibiting attractive
fundamentals. Finally, life science firms supporting R&D efforts should benefit
from increasing R&D expenditures.
C-12
<Page>
Throughout the remainder of this year and beyond, we remain focused on
identifying healthcare stocks displaying the strongest fundamentals and earnings
visibility.
COMPARISON OF CHANGE IN VALUE OF A $250,000 INVESTMENT IN GLOBAL HEALTH
CARE FUND INSTITUTIONAL SHARES WITH THE RUSSELL 3000 HEALTHCARE INDEX.
ANNUALIZED TOTAL RETURNS
As of 3/31/02
1 Year Since Inception
8.49% 43.46%
<Table>
<Caption>
GLOBAL HEALTH CARE FUND RUSSELL 3000 HEALTHCARE
INSTITUTIONAL SHARES INDEX
9/30/99 $246,000 $230,546
10/99 $253,400 $253,222
1/99 $275,000 $257,444
12/99 $385,808 $241,881
1/00 $473,855 $258,101
2/00 $791,826 $245,682
3/00 $618,733 $247,226
4/00 $583,114 $261,279
5/00 $592,119 $273,740
6/00 $686,769 $297,183
C-13
<Page>
7/00 $684,969 $279,703
8/00 $782,421 $289,572
9/00 $853,859 $302,201
10/00 $814,638 $308,075
11/00 $715,071 $241,268
12/00 $756,850 $324,974
1/01 $688,323 $298,298
2/01 $660,556 $296,528
3/01 $858,406 $272,348
4/01 $649,602 $284,577
5/01 $677,114 $289,897
6/01 $693,418 $281,058
7/01 $659,282 $289,189
8/01 $659,282 $280,224
9/01 $626,165 $278,963
10/01 $657,499 $279,967
11/01 $689,851 $294,050
12/01 $684,757 $286,522
1/02 $637,119 $281,021
2/02 $607,569 $279,644
3/31/02 $635,081 $282,161
</Table>
The graph above shows the value of a hypothetical $250,000 investment in
the Fund's Class I shares compared with the Russell 3000 Healthcare Index over
the periods indicated. Average annual total return figures include changes in
principal value, reinvested dividends, and capital gain distributions. Absent
expense limitations, total returns would have been slightly lower. The total
returns shown above do not show the effects of income taxes on an individual's
investment. In most cases, taxes may reduce your actual investment returns on
income or gains
C-14
<Page>
paid by the Fund or any gains you may realize if you sell your shares. Past
performance cannot guarantee future results.
The unmanaged Russell 3000 Healthcare Index tracks the performance of
companies involved in medical services or healthcare in the Russell 3000 Index.
The healthcare sector is composed of biotechnology research and productions,
drugs, hospital supplies, medical services and miscellaneous healthcare
industries.
The unmanaged index differs from the Fund in composition, does not pay
management fees or expenses and includes reinvestment dividends. One cannot
invest directly in an index.
The Fund's historical performance was affected by special market factors,
including the Fund's investment in IPOs, which had a material impact on
performance. As the assets of the Fund increase, gains attributable to hot IPOs
will have a decreasing effect on overall Fund performance. Accordingly, there is
no guarantee that, as the Fund's assets grow, it will continue to experience
substantially similar performance.
Since markets can go down as well as up, investment return and principal
value will fluctuate with market conditions, currency volatility and the social,
economic and political climates of countries where the Fund invests. You may
have a gain or loss when you sell your shares.
C-15
<Page>
APPENDIX D
PRINCIPAL SHAREHOLDERS
As of October 31, 2002, the following shareholders owned of record or
beneficially 5% or more of Global Select Fund, Global Technology Fund and
Global Healthcare Fund.
CLASS I SHARES
<Table>
<Caption>
NAME & ADDRESS NUMBER OF SHARES PERCENTAGE OF CLASS
WAKE FOREST UNIVERSITY
PO Box 7354
Winston-Salem, NC 27109-7354 1,599,166.096 30.62 %
NIC LLC
PO Box 2169 1,762,986.562 33.75 %
Del Mar Ca 92014-1469
BUSS QUEENSLAND PTY LTD TTEE
BUSS QUEENSLAND POOLED SUPERANNUATION TRUST 797,689.464 15.27 %
PO BOX 902
Spring Hill Queensland 4004, Australia
</Table>
CLASS R SHARES
<Table>
<Caption>
NAME & ADDRESS NUMBER OF SHARES PERCENTAGE OF CLASS
Boston Financial Data
Corp Actions Audit Acct #1
Nicholas-Applegate Institutional
N-A Global Select Fund-Class R
2 Heritage Drive 9th Floor
North Quincy MA 02171-2144 3.84 33.33%
<Caption>
GLOBAL TECHNOLOGY FUND CLASS I SHARES
NAME & ADDRESS NUMBER OF SHARES PERCENTAGE OF CLASS
City National Bank 113,124.2850 6.95 %
FBO Nicholas-Applegate 401K PSP
225 Broadway Fl 5
San Diego CA 92101-5029
<Caption>
GLOBAL HEALTH CARE FUND CLASS I SHARES
SHAREHOLDER NAME SHARES OWNED PERCENTAGE OF CLASS
City National Bank TTEE 56,113.8290 5.14 %
FBO Nicholas Applegate Money PPP
225 Broadway Fl 5
San Diego Ca 92101-5029
City National Bank TTEE 90,525.9420 8.29 %
FBO Nicholas-Applegate 401K PSP
225 Broadway Fl 5
San Diego, CA 92101-5029
</Table>
D-1
<Page>
<Table>
Boston Financial Data Services
Nicholas Applegate Institutional
N-A Global Select Fund-Class R 3.84 33.75%
2 Heritage Drive 9th Floor
North Quincy MA 02171-2144
Boston Financial Data Services
Nicholas Applegate Institutional
N-A Global Select Fund-Class R 3.84 33.33%
2 Heritage Drive 9th Floor
North Quincy, MA 02171-2144
</Table>
D-2
<Page>
NICHOLAS-APPLEGATE INSITUTIONAL FUNDS
NICHOLAS-APPLEGATE GLOBAL SELECT FUND
NICHOLAS-APPLEGATE GLOBAL TECHNOLOGY FUND
NICHOLAS-APPLEGATE GLOBAL HEALTH CARE FUND
600 WEST BROADWAY
SAN DIEGO, CALIFORNIA 92101
STATEMENT OF ADDITIONAL INFORMATION
DECEMBER 8, 2002
This Statement of Additional Information ("SAI") relates specifically to
the proposed reorganizations whereby Nicholas-Applegate Global Select Fund
("Global Select Fund") would acquire all the assets of Nicholas-Applegate
Global Technology Fund and Nicholas-Applegate Global Health Care Fund (each a
"Target") in exchange solely for Class I shares of Global Select Fund and the
assumption by Global Select Fund of all the Target's liabilities, followed by
the distribution of those shares to the Target's shareholders (all such
transactions involving Global Select Fund and a Target being referred to
herein as a "Reorganization"). This SAI consists of the information set forth
herein and the following described documents, each of which is incorporated
by reference herein (legally forms a part of the SAI):
(1) The audited financial statements of Global Select Fund and each
Target (each, a series of Nicholas-Applegate Institutional
Funds) included in the Annual Report to Shareholders of
Nicholas-Applegate Institutional Funds (the "Trust") for the
fiscal year ended March 31, 2002, previously filed on EDGAR,
Accession Number 0000912057-02-022437.
(2) The Statement of Additional Information of the Trust, dated July
19, 2002, as supplemented October 2, 2002, previously filed on
EDGAR, Accession Number 0000912057-02-028022 and
0000912057-02-037491, respectively, except for the information
contained herein, which has been updated as of December 6, 2002.
This SAI is not a prospectus and should be read only in conjunction
with the Prospectus/Proxy Statement dated December 6, 2002 relating to the
above-referenced matter. A copy of the Prospectus/Proxy Statement may be
obtained by calling toll-free 1-800-551-8643.
<Page>
PERFORMANCE
Average annual total return performance for Global Select Fund Class I
shares for the one-, five-, and ten-year periods (or since inception) ended
September 30, 2002 are indicated in the chart below. Average annual return
performance is not provided for Class R shares, as that class is not involved in
the proposed Reorganizations.
<Table>
<Caption>
ANNUALIZED TOTAL RETURNS (AS OF 9/30)
ONE YEAR SINCE INCEPTION
(9/30/97)
BEFORE TAXES -7.57% 11.82%
AFTER TAXES ON DISTRIBUTIONS -7.57% 6.49%
AFTER TAXES ON DISTRIBUTIONS
AND SALE OF FUND SHARES -4.65% 8.37%
</Table>
PRO FORMA FINANCIAL STATEMENTS
Shown below are financial statements for each Fund and pro forma financial
statements for the combined Fund, assuming the Reorganization is consummated, as
of March 31, 2002 and September 30, 2002. The first table presents Statements of
Assets and Liabilities (unaudited) for each Fund and estimated pro forma figures
for the combined Fund. The second table presents Statements of Operations
(unaudited) for each Fund and estimated pro forma figures for the combined Fund.
The third table presents Portfolio of Investments (unaudited) for each Fund and
estimated pro forma figures for the combined Fund. The tables are followed by
the Notes to the Pro Forma Financial Statements (unaudited).
PRO-FORMA COMBINING THE STATEMENT OF ASSETS & LIABILITIES
<Table>
<Caption>
GLOBAL SELECT GLOBAL TECHNOLOGY GLOBAL HEALTHCARE
PERIOD ENDED PERIOD ENDED PERIOD ENDED
SEPTEMBER 30, 2002 SEPTEMBER 30, 2002 SEPTEMBER 30, 2002
unaudited unaudited unaudited
------------------ ------------------ ------------------
ASSETS
Investments, at value* $ 47,999,416 $ 16,857,115 $ 20,518,725
Foreign currencies, at value** 444,027 -- --
Cash 440,355 -- --
Cash collateral received for
securities loaned 1,378,040 2,550,380 --
Receivables:
Investment securities sold 4,439,115 139,554 198,266
Capital shares sold -- 405 471
Dividends 43,620 -- 8,820
Foreign taxes receivable 5,386 -- 6,812
Interest -- -- --
From investment advisor -- -- --
Other assets 2,134 10,511 12,203
------------- ----------- --------------
Total assets 54,752,093 19,557,965 20,745,297
------------- ----------- --------------
LIABILITIES
Payables:
Bank overdraft $ -- $ 107,492 $ 198,089
Investments purchased 3,837,772 -- --
Capital shares redeemed 185,512 14,430 5,445
Collateral on securities loaned 1,378,040 2,550,380 --
Dividends -- -- --
To investment advisor 22,110 8,266 15,462
Unrealized loss on forward
currency contracts -- -- --
Other Liabilites 47,865 73,808 58,949
------------- ------------- --------------
Total Liabilities 5,471,299 2,754,376 277,945
------------- ------------- --------------
NET ASSETS 49,280,794 16,803,589 20,467,352
------------- ------------- --------------
* Investments, at cost 51,175,232 22,222,364 19,270,646
------------- ------------- --------------
** Foreign currencies, at cost 451,790 -- --
------------- ------------- --------------
NET ASSETS CONSIST OF:
Paid-in capital $ 65,837,274 $ 224,687,722 $ 55,139,731
Undistributed net investment income (loss) (34,429) (245,698) (222,446)
Accumulated net realized gain (loss) on
investments and foreign currencies (13,343,582) (202,273,555) (35,698,851)
Net unrealized appreciation (depreciation) of
investments and of other assets and
liabilities denominated in foreign currencies (3,178,469) (5,364,880) 1,248,918
------------- ------------- --------------
Net Assets applicable to all shares outstanding $ 49,280,794 $ 16,803,589 $ 20,467,352
------------- ------------- --------------
Net Assets of Institutional Shares 49,280,677 16,803,589 20,467,352
Net Assets of Retirement shares $ 117 $ -- $ --
------------- ------------- --------------
Institutional Shares outstanding 4,861,760 1,689,248 1,163,721
Retirement Shares outstanding 12 -- --
------------- ------------- --------------
Net Asset Value - Institutional Share $ 10.14 $ 9.95 $ 17.59
Net Asset Value - Retirement Share $ 10.12 $ -- $ --
------------- ------------- --------------
Share conversion ratio 0.9813533126 1.7351198924
<Caption>
PRO-FORMA
COMBINED STATEMENT OF
ASSETS & LIABILITIES
ADJUSTMENTS (UNAUDITED)
----------- ----------------------
ASSETS
Investments, at value* $ 85,375,256
Foreign currencies, at value** 444,027
Cash 440,355
Cash collateral received for
securities loaned 3,928,420
Receivables: --
Investment securities sold 4,776,935
Capital shares sold 876
Dividends 52,440
Foreign taxes receivable 12,198
Interest --
From investment advisor --
Other assets 24,848
---------- ---------------
Total assets 95,055,355
---------- ---------------
LIABILITIES
Payables:
Bank overdraft 305,581
Investments purchased 3,837,772
Capital shares redeemed - 205,387
Collateral on securities loaned 3,928,420
Dividends --
To investment advisor (73,849) (28,011)
Unrealized loss on forward
currency contracts --
Other Liabilites (279,829) (99,207)
---------- ---------------
Total Liabilities (353,678) 8,149,942
---------- ---------------
NET ASSETS 353,678 86,905,413
---------- ---------------
* Investments, at cost 92,668,242
---------- ---------------
** Foreign currencies, at cost 451,790
---------- ---------------
NET ASSETS CONSIST OF:
Paid-in capital 345,664,727
Undistributed net investment income (loss) 353,678 (148,895)
Accumulated net realized gain (loss) on
investments and foreign currencies (251,315,988)
Net unrealized appreciation (depreciation) of
investments and of other assets and --
liabilities denominated in foreign currencies (7,294,431)
---------- ---------------
Net Assets applicable to all shares outstanding 353,678 86,905,413
---------- ---------------
Net Assets of Institutional Shares 353,678 86,905,296
Net Assets of Retirement shares 0 117
---------- ---------------
Institutional Shares outstanding 823,976 8,538,705
Retirement Shares outstanding 12
---------- ---------------
Net Asset Value - Institutional Share 10.18
Net Asset Value - Retirement Share 10.12
---------- ---------------
Share conversion ratio
</Table>
<Page>
PRO-FORMA COMBINING THE STATEMENT OF OPERATIONS
<Table>
<Caption>
GLOBAL SELECT GLOBAL TECHNOLOGY GLOBAL HEALTHCARE
YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, 2002 MARCH 31, 2002 MARCH 31, 2002
--------------- --------------- ------------------
INVESTMENT INCOME
Dividends, net of foreign taxes* $ 203,308 $ 109,357 $ 396,546
Interest 21,665 265,489 117,734
Securities Lending 23,101 289,101 78,801
------------- ------------ ------------
Total Income 248,074 663,947 593,081
------------- ------------ ------------
EXPENSES
Advisory fee 249,950 648,629 1,076,579
Accounting and administration fees 39,166 54,150 62,000
Custodian fees 53,649 80,199 80,677
Transfer agent fees and expenses 24,715 17,005 48,996
Shareholder servicing fees -- -- --
Administrative services 31,244 65,992 107,658
Professional fees 7,682 21,185 25,905
Shareholder reporting 116 -- --
Registration fees 9,784 24,591 18,865
Trustees' fees and expenses 1,361 14,674 5,649
Interest and credit facility fee 6,023 2,665 2,854
Insurance 48 27,649 22,615
Miscellaneous 4,798 5,862 7,541
-------------- -------------- --------------
Total Expenses 428,536 962,601 1,459,339
Expenses (reimbursed)/recouped (44,587) (12,866) --
-------------- -------------- --------------
Net Expenses 383,949 949,735 1,459,339
-------------- -------------- --------------
NET INVESTMENT INCOME (LOSS) (135,875) (285,788) (866,258)
-------------- -------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Realized gain (loss) from:
Securities (5,273,293) (49,466,876) 2,714,574
Foreign currency transactions (60,379) (220,163) (5,118)
-------------- -------------- --------------
Net realized gain (loss) (5,333,672) (49,687,039) 2,709,456
-------------- -------------- --------------
Change in unrealized appreciation (depreciation) of:
Investments 5,307,602 41,189,485 1,773,656
Other assets and liabilities denominated in foreign
currencies 17,651 10,102 535
-------------- -------------- --------------
Net unrealized appreciation (depreciation) 5,325,253 41,199,587 1,774,191
-------------- -------------- --------------
NET GAIN (LOSS) ON INVESTMENTS (8,419) (8,487,452) 4,483,647
-------------- -------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $ (144,294) $ (8,773,240) $ 3,617,389
-------------- -------------- --------------
*Foreign taxes withheld $ 11,693 $ 16,679 $ 7,600
-------------- -------------- --------------
Average net assets (unaudited) 31,243,750 65,992,000 107,657,900
<Caption>
PRO-FORMA
COMBINED STATEMENT
ADJUSTMENTS OF OPERATIONS
unaudited
------------ ------------------
INVESTMENT INCOME
Dividends, net of foreign taxes* 0 709,211
Interest 0 404,888
Securities Lending 0 391,003
---------- ---------------
Total Income 0 1,505,102
---------- ---------------
EXPENSES
Advisory fee (336,009) 1,639,149 a
Accounting and administration fees (42,337) 112,979 b
Custodian fees (1,200) 213,325 c
Transfer agent fees and expenses (22,000) 68,716 d
Shareholder servicing fees 0 --
Administrative services 0 204,894
Professional fees 0 54,772
Shareholder reporting 0 116
Registration fees 0 53,240
Trustees' fees and expenses 0 21,684
Interest and credit facility fee 0 11,542
Insurance 0 50,312
Miscellaneous 0 18,201
---------- ---------------
Total Expenses (401,546) 2,448,930
Expenses (reimbursed)/recouped 118,904 61,451
---------- ---------------
Net Expenses (282,642) 2,510,381 e
---------- ---------------
NET INVESTMENT INCOME (LOSS) 282,642 (1,005,279)
---------- ---------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Realized gain (loss) from:
Securities 0 (52,025,595)
Foreign currency transactions 0 (285,660)
---------- ---------------
Net realized gain (loss) 0 (52,311,255)
---------- ---------------
Change in unrealized appreciation (depreciation) of:
Investments 0 48,270,743
Other assets and liabilities denominated in foreign
currencies 0 28,288
---------- ---------------
Net unrealized appreciation (depreciation) 0 48,299,031
---------- ---------------
NET GAIN (LOSS) ON INVESTMENTS 0 (4,012,224)
---------- ---------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS 282,642 (5,017,503)
---------- ---------------
*Foreign taxes withheld 35,972
---------- ---------------
Average net assets 204,893,650
</Table>
FOOT NOTES
a - Global Select will be the survivor w/ man fee of 80 bp vs 100 in Global
Tech and Global health
b - BP fees on combined assets would eliminate account minimums of $40k/yr
c - Eliminate triplicative BIDS Worldview fee
d - Eliminate triplicative account minimums
e - Fee cap for Global Select was 120 bp which is lower than the 140 bp for
both Global Tech and Global Health
<Page>
PRO-FORMA COMBINING THE STATEMENT OF OPERATIONS
SEPTEMBER 30, 2002
<Table>
<Caption>
GLOBAL SELECT GLOBAL TECHNOLOGY GLOBAL HEALTHCARE
PERIOD ENDED PERIOD ENDED PERIOD ENDED
SEPTEMBER 30, 2002 SEPTEMBER 30, 2002 SEPTEMBER 30, 2002
(UNAUDITED) (UNAUDITED) (UNAUDITED)
------------------ ------------------ ------------------
INVESTMENT INCOME
Dividends, net of foreign taxes* $ 230,025 $ 21,070 $ 65,012
Interest 3,360 8,139 3,599
Securities Lending 1,154 7,399 927
--------------- ------------------ ------------------
Total Income 234,539 36,608 69,538
--------------- ------------------ ------------------
EXPENSES
Advisory fee 166,983 162,422 206,816
Accounting and administration fees 26,072 27,894 22,973
Custodian fees 34,760 33,356 27,520
Transfer agent fees and expenses 11,650 20,820 22,420
Administrative services 20,873 16,242 20,682
Professional fees 6,509 11,060 6,529
Shareholder reporting 3,262 3,576 4,834
Registration fees 1,726 7,627 8,594
Trustees' fees and expenses 1,125 1,312 1,788
Interest and credit facility fee 10,792 1,747 708
Insurance -- 6,535 5,011
Miscellaneous 1,517 4,482 4,056
--------------- ------------------ ------------------
Total Expenses 285,269 297,073 331,931
Expenses (reimbursed)/recouped (39,318) (53,133) (39,947)
--------------- ------------------ ------------------
Net Expenses 245,951 243,940 291,984
--------------- ------------------ ------------------
NET INVESTMENT INCOME (LOSS) (11,412) (207,332) (222,446)
--------------- ------------------ ------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Realized gain (loss) from:
Securities (5,493,344) (12,802,292) (15,474,650)
Foreign currency transactions (44,324) 3,618 (480)
------------- --------------- ----------------
Net realized gain (loss) (5,537,668) (12,798,674) (15,475,130)
--------------- ------------------ ------------------
Change in unrealized appreciation (depreciation) of:
Investments (7,349,365) (10,217,725) (3,461,092)
Other assets and liabilities denominated in foreign
currencies (4,749) 371 675
--------------- ------------------ ------------------
Net unrealized appreciation (depreciation) (7,354,114) (10,217,354) (3,460,417)
--------------- ------------------ ------------------
NET GAIN (LOSS) ON INVESTMENTS (12,891,782) (23,016,028) (18,935,547)
--------------- ------------------ ------------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $ (12,903,194) $ (23,223,360) $ (19,157,993)
--------------- ------------------ ------------------
*Foreign taxes withheld $ 21,588 $ 1,187 $ 266
--------------- ------------------ ------------------
Average Net Assets 41,631,691 32,395,246 41,250,186
<Caption>
PRO-FORMA
COMBINED STATEMENT
OF OPERATIONS
ADJUSTMENTS (UNAUDITED)
----------- --------------------
INVESTMENT INCOME
Dividends, net of foreign taxes* 0 316,107
Interest 0 15,098
Securities Lending 0 9,480
--------- --------------
Total Income -- 340,685
--------- --------------
EXPENSES
Advisory fee (73,849) 462,372 a
Accounting and administration fees (37,777) 39,162 b
Custodian fees (600) 95,036 c
Transfer agent fees and expenses (11,000) 43,890 d
Administrative services -- 57,797 e
Professional fees -- 24,098
Shareholder reporting -- 11,672
Registration fees -- 17,947
Trustees' fees and expenses -- 4,225
Interest and credit facility fee -- 13,247
Insurance -- 11,546
Miscellaneous -- 10,055
--------- --------------
Total Expenses (123,226) 791,047
Expenses (reimbursed)/recouped 52,190 (80,208)
--------- --------------
Net Expenses (71,036) 710,839 f
--------- --------------
NET INVESTMENT INCOME (LOSS) 71,036 (370,154)
--------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Realized gain (loss) from:
Securities 0 (33,770,286)
Foreign currency transactions 0 (41,186)
--------- --------------
Net realized gain (loss) -- (33,811,472)
--------- --------------
Change in unrealized appreciation (depreciation) of:
Investments 0 (21,028,182)
Other assets and liabilities denominated in foreign
currencies 0 (3,703)
--------- --------------
Net unrealized appreciation (depreciation) -- (21,031,885)
--------- --------------
NET GAIN (LOSS) ON INVESTMENTS -- (54,843,357)
--------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS 71,036 (55,213,511)
--------- --------------
*Foreign taxes withheld 23,041
--------- --------------
Average net assets 115,277,123
</Table>
a - Global Select will be the survivor w/ current management fee of 80 bp vs
100 in Global Tech and Global health.
a cont. - A new registration is pending that would reduce the management fee
to 50 bp but add 25 bp Shareholder Servicing Fee)
b - BP fees on combined assets would eliminate account minimums of $40k/yr
c - Eliminate triplicative BIDS Worldview fee
d - Eliminate triplicative account minimums
e - A new registration is pending that will replace the current 10 bp
Administrative Services Fee with a 25 bp fee.
f - Effective fee cap for Global Select was 118 bp which is lower than the
140 bp for both Global Tech and Global Health (plus non reimbursable
expenses per prospectus)
<Page>
PRO FORMA SCHEDULE OF INVESTMENTS OF COMBINED FUND (UNAUDITED)
SEPTEMBER 30, 2002
<Table>
<Caption>
-------------------------------------------------------
GLOBAL SELECT FUND GLOBAL TECHNOLOGY FUND
NUMBER NUMBER
OF SHARES VALUE OF SHARES VALUE
- ---------------------------------------------------------------------------------------------------------------
COMMON STOCK - 92.2%
- ---------------------------------------------------------------------------------------------------------------
AUSTRALIA - 0.6%
News Corp. Ltd. - ADR 27,600 $ 531,300
-----------
BERMUDA - 0.7%
Tyco International, Ltd. 45,000 634,500
-----------
CANADA - 1.7%
Biovail Corp. *
Forzani Group, Ltd. Cl. A * 33,601 378,122
Precision Drilling Corp. * 17,900 538,790
Talisman Energy, Inc. 9,100 364,910
-----------
1,281,822
-----------
CHINA - 0.3%
Byd Co., Ltd. * 128,000 260,938
------------
FINLAND - 1.5%
Nokia Corp. - ADR 64,900 859,925 31,700 420,025
----------- ------------
FRANCE - 1.2%
Sanofi - Synthelabo S.A. 9,400 529,969
-----------
HONG KONG - 0.5%
Mainland Headwear Holdings, Ltd. 730,000 226,968
TCL International Holdings, Ltd. 771,000 219,946
----------- ------------
226,968 219,946
----------- ------------
IRELAND - 0.9%
Bank of Ireland * 78,800 767,060
-----------
ISRAEL - 1.2%
Teva Pharmaceutical Industries, Ltd. - ADR 8,800 589,600
-----------
JAPAN - 4.3%
Citizens Electronics Co., Ltd. 6,300 450,222
KAO Corporation 27,000 595,490
Mitsubishi Tokyo Financial Group, Inc. 62 457,845
Nintendo Co., Ltd. 3,500 407,672
Nissan Motor Co., Ltd. 88,900 660,141
Shiseido Company, Ltd. 47,000 560,958
Sony Corp. S.A. 13,800 567,180
-----------
3,699,508
-----------
<Caption>
----------------------------- -------------------------------
GLOBAL HEALTHCARE FUND ADJUSTMENT COMBINED FUNDS PROFORMA
NUMBER NUMBER
OF SHARES VALUE OF SHARES VALUE
- --------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK - 92.2%
- --------------------------------------------------------------------------------------------------------------------------------
AUSTRALIA - 0.6%
News Corp. Ltd. - ADR 27,600 531,300
-------------
BERMUDA - 0.7%
Tyco International, Ltd. 45,000 634,500
-------------
CANADA - 1.7%
Biovail Corp. * 8,200 202,458 8,200 202,458
Forzani Group, Ltd. Cl. A * 33,601 378,122
Precision Drilling Corp. * 17,900 538,790
Talisman Energy, Inc. 9,100 364,910
------------ -------------
202,458 1,484,280
------------ -------------
CHINA - 0.3%
Byd Co., Ltd. * 128,000 260,938
-------------
FINLAND - 1.5%
Nokia Corp. - ADR 96,600 1,279,950
-------------
FRANCE - 1.2%
Sanofi - Synthelabo S.A. 8,400 473,589 17,800 1,003,558
------------ -------------
HONG KONG - 0.5%
Mainland Headwear Holdings, Ltd. 730,000 226,968
TCL International Holdings, Ltd. 771,000 219,946
-------------
446,914
-------------
IRELAND - 0.9%
Bank of Ireland * 78,800 767,060
-------------
ISRAEL - 1.2%
Teva Pharmaceutical Industries, Ltd. - ADR 6,200 415,400 15,000 1,005,000
------------ -------------
JAPAN - 4.3%
Citizens Electronics Co., Ltd. 6,300 450,222
KAO Corporation 27,000 595,490
Mitsubishi Tokyo Financial Group, Inc. 62 457,845
Nintendo Co., Ltd. 3,500 407,672
Nissan Motor Co., Ltd. 88,900 660,141
Shiseido Company, Ltd. 47,000 560,958
Sony Corp. S.A. 13,800 567,180
-------------
3,699,508
-------------
</Table>
<Page>
<Table>
<Caption>
---------------------------------------------------------
GLOBAL SELECT FUND GLOBAL TECHNOLOGY FUND
NUMBER NUMBER
OF SHARES VALUE OF SHARES VALUE
- -----------------------------------------------------------------------------------------------------------------
NETHERLANDS - 1.6%
Chicago Bridge & Iron Co. - NV Shr 23,900 573,600
ASM Lithography Holding N.V. * 24,000 148,560
Unilever NV 11,100 657,078
----------- ------------
1,230,678 148,560
----------- ------------
NORWAY - 0.4%
Frontline, Ltd. 20,800 79,991
Tomra Systems ASA 44,100 268,975
-----------
348,966
-----------
RUSSIAN FEDERATION - 0.2%
Surgutneftegaz - ADR 8,300 136,909
-----------
SINGAPORE - 1.4%
DBS Group Holdings, Ltd. 66,000 415,923
Flextronics International, Ltd. * 64,800 451,786 47,600 331,867
----------- ------------
867,709 331,867
----------- ------------
SOUTH KOREA - 2.3%
Intops Co., Ltd. * 29,806 322,883
Samsung Electro Mechanics Co., Ltd. 6,460 231,513
Samsung Electronics Co., Ltd. 1,980 481,393 4,610 551,961
Samsung Electronics Co., Ltd. 144A - GDR 3,300 391,050
----------- ------------
1,195,326 783,474
----------- ------------
SPAIN - 0.2%
Telefonica S.A. * 26,300 195,972
-----------
SWEDEN - 0.5%
Autoliv, Inc. 23,300 490,000
-----------
SWITZERLAND - 1.9%
Converium Holding AG - ADR * 21,100 453,650
Micronas Semiconductor-Reg * 6,728 92,480
Nestle S.A. 2,900 633,858
UBS AG 11,500 478,516
----------- ----------- ------------
1,566,024 6,728 92,480
----------- ----------- ------------
TAIWAN - 0.5%
Alcon, Inc. *
Siliconware Precision Industries Co. * 409,000 211,814
-----------
211,814
-----------
UNITED KINGDOM - 4.3%
BP Amoco PLC 59,700 399,008
Corus Group PLC * 189,100 101,852
Diageo PLC 44,000 545,944
HSBC Holdings PLC 28,400 292,209
Next PLC 36,100 527,401
Shire Pharmaceuticals Group PLC * 68,600 555,584
Shire Pharmeuticals Group PLC * 2,000 49,540
Vodafone Group PLC 444,900 570,215
Vodafone Group PLC - ADR 8,700 111,621
-----------
3,153,374
-----------
<Caption>
------------------------- -------------------------------
GLOBAL HEALTHCARE FUND ADJUSTMENT COMBINED FUNDS PROFORMA
NUMBER NUMBER
OF SHARES VALUE OF SHARES VALUE
- --------------------------------------------------------------------------------- --------------------------------
NETHERLANDS - 1.6%
Chicago Bridge & Iron Co. - NV Shr 23,900 573,600
ASM Lithography Holding N.V. * 24,000 148,560
Unilever NV 11,100 657,078
-------------
1,379,238
-------------
NORWAY - 0.4%
Frontline, Ltd. 20,800 79,991
Tomra Systems ASA 44,100 268,975
-------------
348,966
-------------
RUSSIAN FEDERATION - 0.2%
Surgutneftegaz - ADR 8,300 136,909
-------------
SINGAPORE - 1.4%
DBS Group Holdings, Ltd. 66,000 415,923
Flextronics International, Ltd. * 112,400 783,653
-------------
1,199,576
-------------
SOUTH KOREA - 2.3%
Intops Co., Ltd. * 29,806 322,883
Samsung Electro Mechanics Co., Ltd. 6,460 231,513
Samsung Electronics Co., Ltd. 6,590 1,033,354
Samsung Electronics Co., Ltd. 144A - GDR 3,300 391,050
-------------
1,978,800
-------------
SPAIN - 0.2%
Telefonica S.A. * 26,300 195,972
-------------
SWEDEN - 0.5%
Autoliv, Inc. 23,300 490,000
-------------
SWITZERLAND - 1.9%
Converium Holding AG - ADR * 21,100 453,650
Micronas Semiconductor-Reg * 6,728 92,480
Nestle S.A. 2,900 633,858
UBS AG 11,500 478,516
-------------
6,728 1,658,504
-------------
TAIWAN - 0.5%
Alcon, Inc. * 5,700 220,875 5,700 220,875
Siliconware Precision Industries Co. * 409,000 211,814
------------ -------------
220,875 432,689
------------ -------------
UNITED KINGDOM - 4.3%
BP Amoco PLC 59,700 399,008
Corus Group PLC * 189,100 101,852
Diageo PLC 44,000 545,944
HSBC Holdings PLC 28,400 292,209
Next PLC 36,100 527,401
Shire Pharmaceuticals Group PLC * 22,700 562,279 91,300 1,117,863
Shire Pharmeuticals Group PLC * 2,000 49,540
Vodafone Group PLC 444,900 570,215
Vodafone Group PLC - ADR 8,700 111,621
------------ -------------
562,279 3,715,653
------------ -------------
</Table>
<Page>
<Table>
<Caption>
-----------------------------------------------------
GLOBAL SELECT FUND GLOBAL TECHNOLOGY FUND
NUMBER NUMBER
OF SHARES VALUE OF SHARES VALUE
- -------------------------------------------------------------------------------------------------------------
UNITED STATES - 66.0%
3M Co. 5,900 648,823
aaiPharma, Inc. *
Abgenix, Inc. *
Accredo Health, Inc. *
Affiliated Computer Services, Inc. Cl. A * 8,800 374,440
Allergan, Inc.
Allstate Corp. 17,600 625,680
Amazon.com, Inc. * 29,400 468,342
American Express Co. 15,200 473,936
Amgen, Inc. * 10,400 433,680
Anadarko Petroleum Corp. 17,600 783,904
Anheuser Busch, Inc. 11,600 586,960
Anteon International Corp. * 16,600 451,188
Anthem, Inc. * 12,400 806,000
Applied Signal Technology * 32,700 299,205
Atrix Laboratories, Inc. *
Autozone, Inc. * 8,800 693,968
Ball Corp. 12,400 624,836
Barr Laboratories, Inc. *
Beckman Coulter, Inc.
Big Lots, Inc. * 37,400 592,042
Biomet, Inc.
BMC Software, Inc. * 22,200 290,154
Boston Scientific Corp. *
CACI International, Inc. Cl. A * 9,900 350,955
Cendant Corp. * 21,900 235,644
Cephalon, Inc. *
Cerner Corp. *
Chippac, Inc. Cl. A * 77,832 166,483
Choicepoint, Inc. * 12,233 435,984
Cisco Systems, Inc. * 36,700 384,616 50,900 533,432
Community Health Systems, Inc. *
Conceptus, Inc. *
Cray, Inc. * 109,300 431,735
Crown Cork & Seal Co., Inc. 55,900 293,475
Dell Computer Corp. * 39,800 935,698
Dial Corp. 26,400 566,544
DuPont Photomasks, Inc. * 10,100 230,078
Electronic Arts, Inc. * 15,200 1,002,592
Elite Information Group, Inc. * 31,500 219,240
EMCOR Group, Inc. * 8,200 407,540
Extreme Networks, Inc. * 42,500 178,925
Forest Laboratories, Inc. Cl. A. * 7,100 582,271
Foundry Networks, Inc. * 42,200 231,256
Genentech, Inc. *
Gilead Sciences, Inc. *
HCA, Inc.
HPL Technologies, Inc. * 22,100 1,105
Hunt J.B. Transportation Services, Inc. * 19,800 466,290
IMC Global, Inc. 40,800 491,640
Imation Corp. * 14,400 407,952
Inamed Corp. *
Integrated Circuit Systems, Inc. * 22,200 348,540
Intergraph Corp. * 19,800 338,382
International Business Machines Corp. 5,800 338,662
Interpore International, Inc. *
Intersil Corp. Cl. A * 20,800 269,568
Intuit, Inc. * 14,700 669,291
Invision Technologies, Inc. * 15,000 480,150
Jetblue Airways Corp. * 10,300 415,399
<Caption>
------------------------- -------------------------------
GLOBAL HEALTHCARE FUND ADJUSTMENT COMBINED FUNDS PROFORMA
NUMBER NUMBER
OF SHARES VALUE OF SHARES VALUE
- --------------------------------------------------------------------------------- --------------------------------
UNITED STATES - 66.0%
3M Co. 5,900 648,823
aaiPharma, Inc. * 8,900 106,720 8,900 106,720
Abgenix, Inc. * 30,800 199,892 30,800 199,892
Accredo Health, Inc. * 8,500 405,280 8,500 405,280
Affiliated Computer Services, Inc. Cl. A * 8,800 374,440
Allergan, Inc. 11,700 636,480 11,700 636,480
Allstate Corp. 17,600 625,680
Amazon.com, Inc. * 29,400 468,342
American Express Co. 15,200 473,936
Amgen, Inc. * 23,800 992,460 34,200 1,426,140
Anadarko Petroleum Corp. 17,600 783,904
Anheuser Busch, Inc. 11,600 586,960
Anteon International Corp. * 16,600 451,188
Anthem, Inc. * 5,100 331,500 17,500 1,137,500
Applied Signal Technology * 32,700 299,205
Atrix Laboratories, Inc. * 13,200 195,360 13,200 195,360
Autozone, Inc. * 8,800 693,968
Ball Corp. 12,400 624,836
Barr Laboratories, Inc. * 10,700 666,503 10,700 666,503
Beckman Coulter, Inc. 10,700 414,090 10,700 414,090
Big Lots, Inc. * 37,400 592,042
Biomet, Inc. 7,900 210,377 7,900 210,377
BMC Software, Inc. * 22,200 290,154
Boston Scientific Corp. * 15,000 473,400 15,000 473,400
CACI International, Inc. Cl. A * 9,900 350,955
Cendant Corp. * 21,900 235,644
Cephalon, Inc. * 5,000 204,100 5,000 204,100
Cerner Corp. * 5,900 207,739 5,900 207,739
Chippac, Inc. Cl. A * 77,832 166,483
Choicepoint, Inc. * 12,233 435,984
Cisco Systems, Inc. * 87,600 918,048
Community Health Systems, Inc. * 9,700 258,311 9,700 258,311
Conceptus, Inc. * 34,900 533,970 34,900 533,970
Cray, Inc. * 109,300 431,735
Crown Cork & Seal Co., Inc. 55,900 293,475
Dell Computer Corp. * 39,800 935,698
Dial Corp. 26,400 566,544
DuPont Photomasks, Inc. * 10,100 230,078
Electronic Arts, Inc. * 15,200 1,002,592
Elite Information Group, Inc. * 31,500 219,240
EMCOR Group, Inc. * 8,200 407,540
Extreme Networks, Inc. * 42,500 178,925
Forest Laboratories, Inc. Cl. A. * 6,000 492,060 13,100 1,074,331
Foundry Networks, Inc. * 42,200 231,256
Genentech, Inc. * 22,900 747,227 22,900 747,227
Gilead Sciences, Inc. * 20,000 670,600 20,000 670,600
HCA, Inc. 12,300 585,603 12,300 585,603
HPL Technologies, Inc. * 22,100 1,105
Hunt J.B. Transportation Services, Inc. * 19,800 466,290
IMC Global, Inc. 40,800 491,640
Imation Corp. * 14,400 407,952
Inamed Corp. * 12,200 280,600 12,200 280,600
Integrated Circuit Systems, Inc. * 22,200 348,540
Intergraph Corp. * 19,800 338,382
International Business Machines Corp. 5,800 338,662
Interpore International, Inc. * 16,600 134,460 16,600 134,460
Intersil Corp. Cl. A * 20,800 269,568
Intuit, Inc. * 14,700 669,291
Invision Technologies, Inc. * 15,000 480,150
Jetblue Airways Corp. * 10,300 415,399
</Table>
<Page>
<Table>
<Caption>
-----------------------------------------------------
GLOBAL SELECT FUND GLOBAL TECHNOLOGY FUND
NUMBER NUMBER
OF SHARES VALUE OF SHARES VALUE
- -------------------------------------------------------------------------------------------------------------
Johnson & Johnson 14,300 773,344
LSI Logic Corp. * 32,000 203,200
Lockheed Martin Corp. 8,100 523,827
Lowe's Companies, Inc. 17,800 736,920
Marvell Technology Group, Ltd. * 23,600 374,060
McData Corp. Cl. A * 28,300 153,669
Medimmune, Inc. *
Medtronic, Inc. 15,300 644,436
MGM Mirage, Inc. * 24,900 928,770
Microchip Technology, Inc. * 14,900 304,705
Micron Technology, Inc. * 19,000 235,030 14,700 181,839
Microsoft Corp. * 21,200 926,228 11,400 498,066
Millennium Pharmaceuticals, Inc. *
Moody's Corp. 11,000 533,500
Neoware Systems, Inc. * 19,100 268,355
Netscreen Technologies, Inc. * 19,000 206,150
Nextel Communications, Inc. Cl. A * 98,100 740,655
Northrop Grunman Corp. 6,200 769,048
Overture Services, Inc. * 11,700 275,769 20,700 487,899
Patterson Energy, Inc. * 18,600 474,486
Pfizer, Inc. 15,700 455,614
Pharmacia Corp. 11,000 427,680
Planar Systems, Inc. * 18,500 294,890
Priority Healthcare Corp.- Cl. B *
Proctor & Gamble Co. 12,400 1,108,312
Quiksilver, Inc. * 33,100 747,729
Rent-A-Center, Inc. * 7,000 363,650
Sanmina Corp. * 78,300 216,891
Scripps Co. Cl. A 7,400 512,820
Silicon Laboratories, Inc. * 13,100 240,123
SmartForce PLC * 43,560 143,748
Smith International, Inc. * 11,000 322,410
St. Jude Medical, Inc. *
Sun Microsystems, Inc. * 34,600 89,614
SunGard Data Systems, Inc. * 14,400 280,080
Symantec Corp. * 14,700 494,949
Synopsys, Inc. * 6,200 236,530
Tekelec * 28,200 243,366
Tenet Healthcare Corp. *
Therasense, Inc. *
Triad Hospitals, Inc. *
USA Networks, Inc. * 20,600 399,228
Universal Health Services-B *
Viacom, Inc. Cl. B * 11,800 478,490
Vishay Intertechnology, Inc. * 16,700 146,960
<Caption>
------------------------- -------------------------------
GLOBAL HEALTHCARE FUND ADJUSTMENT COMBINED FUNDS PROFORMA
NUMBER NUMBER
OF SHARES VALUE OF SHARES VALUE
- --------------------------------------------------------------------------------- --------------------------------
Johnson & Johnson 14,300 773,344
LSI Logic Corp. * 32,000 203,200
Lockheed Martin Corp. 8,100 523,827
Lowe's Companies, Inc. 17,800 736,920
Marvell Technology Group, Ltd. * 23,600 374,060
McData Corp. Cl. A * 28,300 153,669
Medimmune, Inc. * 36,700 765,929 36,700 765,929
Medtronic, Inc. 21,000 884,520 36,300 1,528,956
MGM Mirage, Inc. * 24,900 928,770
Microchip Technology, Inc. * 14,900 304,705
Micron Technology, Inc. * 33,700 416,869
Microsoft Corp. * 32,600 1,424,294
Millennium Pharmaceuticals, Inc. * 58,300 543,356 58,300 543,356
Moody's Corp. 11,000 533,500
Neoware Systems, Inc. * 19,100 268,355
Netscreen Technologies, Inc. * 19,000 206,150
Nextel Communications, Inc. Cl. A * 98,100 740,655
Northrop Grunman Corp. 6,200 769,048
Overture Services, Inc. * 32,400 763,668
Patterson Energy, Inc. * 18,600 474,486
Pfizer, Inc. 20,000 580,400 35,700 1,036,014
Pharmacia Corp. 25,900 1,006,992 36,900 1,434,672
Planar Systems, Inc. * 18,500 294,890
Priority Healthcare Corp.- Cl. B * 17,300 435,960 17,300 435,960
Proctor & Gamble Co. 12,400 1,108,312
Quiksilver, Inc. * 33,100 747,729
Rent-A-Center, Inc. * 7,000 363,650
Sanmina Corp. * 78,300 216,891
Scripps Co. Cl. A 7,400 512,820
Silicon Laboratories, Inc. * 13,100 240,123
SmartForce PLC * 43,560 143,748
Smith International, Inc. * 11,000 322,410
St. Jude Medical, Inc. * 18,500 660,450 18,500 660,450
Sun Microsystems, Inc. * 34,600 89,614
SunGard Data Systems, Inc. * 14,400 280,080
Symantec Corp. * 14,700 494,949
Synopsys, Inc. * 6,200 236,530
Tekelec * 28,200 243,366
Tenet Healthcare Corp. * 22,300 1,103,850 22,300 1,103,850
Therasense, Inc. * 13,200 184,272 13,200 184,272
Triad Hospitals, Inc. * 6,600 250,470 6,600 250,470
USA Networks, Inc. * 20,600 399,228
Universal Health Services-B * 9,800 501,270 9,800 501,270
Viacom, Inc. Cl. B * 11,800 478,490
Vishay Intertechnology, Inc. * 16,700 146,960
</Table>
<Page>
<Table>
<Caption>
------------------------------------------------------
GLOBAL SELECT FUND GLOBAL TECHNOLOGY FUND
NUMBER NUMBER
OF SHARES VALUE OF SHARES VALUE
- --------------------------------------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 9,100 448,084
Wells Fargo & Co. 10,100 486,416
Whole Foods Market, Inc. * 16,400 702,576
Williams Somona, Inc. * 31,000 732,530
Xerox Corp. * 60,700 300,465
Yahoo!, Inc. * 29,200 279,444
Zimmer Holdings, Inc. * 17,100 655,614
----------- ------------
28,910,934 11,703,840
----------- ------------
TOTAL COMMON STOCK
(COST GLOBAL SELECT: $50,521,057) 47,428,358
-----------
(COST GLOBAL TECHNOLOGY: $18,681,630) 13,961,130
------------
(COST GLOBAL HEALTHCARE: $17,164,875)
<Caption>
NUMBER NUMBER
OF SHARES VALUE OF SHARES VALUE
- -------------------------------------------------------------------------------- -------------------------
EQUITY-LINKED SECURITIES - 3.2%
- -------------------------------------------------------------------------------- -------------------------
INDIA - 1.4%
Credit Suisse FB Infosys Technologies - 04/30/04 5,200 365,716
Merrill Lynch Satyam Computer Services,
Ltd. - 11/18/02 86,352 385,130 103,222 460,370
----------- ------------
385,130 826,086
----------- ------------
TAIWAN - 0.9%
Credit Suisse FB Taiwan Semiconductor
Manufacturing Co., Ltd. - 01/26/04 601,212 408,824
Nanya Technology Corp. - 01/17/02 272,700 169,074
Merrill Lynch Taiwan Styrene Monomer
Corp. - 05/15/03 250,000 167,500
----------- ------------
167,500 577,898
----------- ------------
UNITED KINGDOM - 0.9%
UBS Hyb Elitegroup - 03/05/03 64,000 152,960
UBS Siliconware Corp. 546,000 283,920
UBS Unit Accton Technology Corp. - 12/20/02 246,075 374,034
------------
810,914
------------
TOTAL EQUITY-LINKED SECURITIES
(COST GLOBAL SELECT: $635,747) 552,630
-----------
(COST GLOBAL TECHNOLOGY: $2,859,647) 2,214,898
------------
<Caption>
PRINCIPAL PRINCIPAL
AMOUNT VALUE AMOUNT VALUE
- -------------------------------------------------------------------------------- -------------------------
TIME DEPOSIT - 0.8%
- -------------------------------------------------------- -------------------------
Bank One Grand Cayman
1.340%, 10/01/02
(COST: $681,087) 681,087 681,087
----------- ------------
Brown Brothers Harriman & Co.
1.340%, 10/01/02
(COST: $2,124,199) 18,428 18,428
----------- -----------
TOTAL INVESTMENTS - 96.2% **
(COST GLOBAL SELECT: $51,175,232) 47,999,416
(COST GLOBAL TECHNOLOGY: $22,222,364) 16,857,115
(COST GLOBAL HEALTHCARE: $19,270,646)
OTHER ASSETS /LIABILITIES - 3.8% 1,281,378 (53,526)
------------- --------------
NET ASSETS - 100.0% $ 49,280,794 $ 16,803,589
============= ==============
- ------------------------------------------------------ ------------------------ -------------------------
<Caption>
------------------------- -------------------------------
GLOBAL HEALTHCARE FUND ADJUSTMENT COMBINED FUNDS PROFORMA
NUMBER NUMBER
OF SHARES VALUE OF SHARES VALUE
- --------------------------------------------------------------------------------- --------------------------------
Wal-Mart Stores, Inc. 9,100 448,084
Wells Fargo & Co. 10,100 486,416
Whole Foods Market, Inc. * 16,400 702,576
Williams Somona, Inc. * 31,000 732,530
Xerox Corp. * 60,700 300,465
Yahoo!, Inc. * 29,200 279,444
Zimmer Holdings, Inc. * 22,800 874,152 39,900 1,529,766
------------ -------------
16,538,353 57,153,127
------------ -------------
TOTAL COMMON STOCK
(COST GLOBAL SELECT: $50,521,057)
-------------
(COST GLOBAL TECHNOLOGY: $18,681,630)
-------------
(COST GLOBAL HEALTHCARE: $17,164,875) 18,412,954 79,802,442
------------ -------------
<Caption>
NUMBER
OF SHARES VALUE
- ---------------------------------------------------------- -------------------------------
EQUITY-LINKED SECURITIES - 3.2%
- ---------------------------------------------------------- -------------------------------
INDIA - 1.4%
Credit Suisse FB Infosys Technologies - 04/30/04 5,200 365,716
Merrill Lynch Satyam Computer Services, Ltd. -
11/18/02 189,574 845,500
-------------
1,211,216
-------------
TAIWAN - 0.9%
Credit Suisse FB Taiwan Semiconductor
Manufacturing Co., Ltd. - 01/26/04 601,212 408,824
Nanya Technology Corp. - 01/17/02 272,700 169,074
Merrill Lynch Taiwan Styrene Monomer Corp. -
05/15/03 250,000 167,500
-------------
745,398
-------------
UNITED KINGDOM - 0.9%
UBS Hyb Elitegroup - 03/05/03 64,000 152,960
UBS Siliconware Corp. 546,000 283,920
UBS Unit Accton Technology Corp. - 12/20/02 246,075 374,034
-------------
810,914
-------------
TOTAL EQUITY-LINKED SECURITIES
(COST GLOBAL SELECT: $635,747)
(COST GLOBAL TECHNOLOGY: $2,859,647) 2,767,528
-------------
<Caption>
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------- -------------------------------
TIME DEPOSIT - 0.8%
- --------------------------------------------------------------------------------- -------------------------------
Bank One Grand Cayman
1.340%, 10/01/02
(COST: $681,087) 681,087 681,087
--------------- -------------
Brown Brothers Harriman & Co.
1.340%, 10/01/02
(COST: $2,124,199) 2,105,771 2,105,771
----------- ------------
TOTAL INVESTMENTS - 96.2% **
(COST GLOBAL SELECT: $51,175,232)
(COST GLOBAL TECHNOLOGY: $22,222,364)
(COST GLOBAL HEALTHCARE: $19,270,646) 20,518,725 85,375,256
-------------
OTHER ASSETS /LIABILITIES - 3.8% (51,373) 1,176,479
-------------- ----------------
NET ASSETS - 100.0% $ 20,467,352 342,136 $ 86,893,871
============== ================
- ------------------------------------------------------ ------------------------ -------------------------------
</Table>
* NON-INCOME PRODUCING SECURITIES.
** PERCENTAGES FOR THE COMBINED PRO FORMA
<Page>
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
Note 1 - Basis of Combination:
On November 8, 2002, the Board of Trustees approved the Plan of
Reorganization (the "Plan") of the Global Technology Fund and Global Health Care
Fund (collectively the "Funds", individually the "Fund"), whereby, subject to
approval by the shareholders of Funds, the Global Select Fund will acquire all
of the assets of the Funds subject to the liabilities of such Fund, in exchange
for a number of shares of Global Select Fund Class I shares equal in value to
the net assets of such Fund (the "Merger").
The Merger will be accounted for as a tax-free merger of investment
companies. The unaudited pro forma combined financial statements are presented
for the information of the reader and may not necessarily be representative of
what the actual combined financial statements would have been had the
reorganization occurred at September 30, 2002. The unaudited pro forma portfolio
of investments, and statement of assets and liabilities reflect the financial
position of the Funds at September 30, 2002. The unaudited pro forma statement
of operations reflects the results of operations of the Funds for the period
ended September 30, 2002. These statements have been derived from the Funds'
respective books and records utilized in calculating daily net asset value at
the date indicated above for each Fund under generally accepted accounting
principles. The historical cost of investment securities will be carried forward
to the surviving entity and the results of operations of Global Select Fund for
pre-combination periods will not be restated.
The unaudited pro forma portfolio of investments, and unaudited statement
of assets and liabilities and statement of operations should be read in
conjunction with the historical financial statements of each Fund which are
incorporated by reference in the Statement of Additional Information.
2
<Page>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2002 (UNAUDITED)
<Table>
<Caption>
GLOBAL GLOBAL GLOBAL
SELECT TECHNOLOGY HEALTH CARE
ASSETS
Investments, at value* $ 47,999,416 $ 16,857,115 $ 20,518,725
Foreign currencies, at value** 444,027 -- --
Cash 440,355 -- --
Cash collateral received for securities loaned 1,378,040 2,550,380 --
Receivables:
Investment securities sold 4,439,115 139,554 198,266
Capital shares sold -- 405 471
Dividends 43,620 -- 8,820
Foreign taxes receivable 5,386 -- 6,812
Interest -- -- --
From investment advisor -- -- --
Other assets 2,134 10,511 12,203
------------- ------------- -------------
Total assets 54,752,093 19,557,965 20,745,297
------------- ------------- -------------
LIABILITIES
Payables:
Bank overdraft $ -- $ 107,492 $ 198,089
Investments purchased 3,837,772 -- --
Capital shares redeemed 185,512 14,430 5,445
Collateral on securities loaned 1,378,040 2,550,380 --
Dividends -- -- --
To investment advisor 22,110 8,266 15,462
Unrealized loss on forward currency contracts -- -- --
Other Liabilites 47,865 73,808 58,949
------------- ------------- -------------
Total Liabilities 5,471,299 2,754,376 277,945
------------- ------------- -------------
NET ASSETS 49,280,794 16,803,589 20,467,352
------------- ------------- -------------
* Investments, at cost 51,175,232 22,222,364 19,270,646
------------- ------------- -------------
** Foreign currencies, at cost 451,790 -- --
------------- ------------- -------------
NET ASSETS CONSIST OF:
Paid-in capital $ 65,586,163 $ 223,143,841 $ 54,938,413
Undistributed net investment income (loss) (34,430) (245,698) (222,446)
Accumulated net realized gain (loss) on investments and foreign currencies (13,092,470) (200,729,674) (35,497,533)
Net unrealized appreciation (depreciation ) of investments and of other
assets and liabilities denominated in foreign currencies (3,178,469) (5,364,880) 1,248,918
------------- ------------- -------------
Net Assets applicable to all shares outstanding $ 49,280,794 $ 16,803,589 $ 20,467,352
------------- ------------- -------------
Net Assets of Institutional Shares 49,280,677 16,803,589 20,467,352
Net Assets of Retirement shares $ 117 $ -- $ --
------------- ------------- -------------
Institutional Shares outstanding 4,861,760 1,689,248 1,163,721
Retirement Shares outstanding 12 -- --
------------- ------------- -------------
Net Asset Value - Institutional Share $ 10.14 $ 9.95 $ 17.59
Net Asset Value - Retirement Share $ 10.12 $ -- $ --
------------- ------------- -------------
</Table>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<Page>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
STATEMENTS OF OPERATIONS
PERIOD ENDED SEPTEMBER 30, 2002 (UNAUDITED)
<Table>
<Caption>
GLOBAL GLOBAL GLOBAL
SELECT TECHNOLOGY HEALTH CARE
INVESTMENT INCOME
Dividends, net of foreign taxes* $ 230,025 $ 21,070 $ 65,012
Interest 3,360 8,139 3,599
Securities Lending 1,154 7,399 927
------------ ------------ ------------
Total Income 234,539 36,608 69,538
------------ ------------ ------------
EXPENSES
Advisory fee 166,983 162,422 206,816
Accounting and administration fees 26,072 27,894 22,973
Custodian fees 34,760 33,356 27,520
Transfer agent fees and expenses 11,650 20,820 22,420
Shareholder servicing fees -- -- --
Administrative services 20,873 16,242 20,682
Professional fees 6,509 11,060 6,529
Shareholder reporting 3,262 3,576 4,834
Registration fees 1,726 7,627 8,594
Trustees' fees and expenses 1,125 1,312 1,788
Interest and credit facility fee 10,792 1,747 708
Insurance -- 6,535 5,011
Miscellaneous 1,517 4,482 4,056
------------ ------------ ------------
Total Expenses 285,269 297,073 331,931
Expenses (reimbursed)/recouped (39,318) (53,133) (39,947)
------------ ------------ ------------
Net Expenses 245,951 243,940 291,984
------------ ------------ ------------
NET INVESTMENT INCOME (LOSS) (11,412) (207,332) (222,446)
------------ ------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Realized gain from:
Securities (5,493,344) (12,802,292) (15,474,650)
Foreign currency transactions (44,324) 3,618 (480)
------------ ------------ ------------
Net realized gain (loss) (5,537,668) (12,798,674) (15,475,130)
------------ ------------ ------------
Change in unrealized appreciation (depreciation) of:
Investments (7,349,365) (10,217,725) (3,461,092)
Other assets and liabilities denominated in foreign currencies (4,749) 371 675
------------ ------------ ------------
Net unrealized appreciation (depreciation) (7,354,114) (10,217,354) (3,460,417)
------------ ------------ ------------
NET GAIN (LOSS) ON INVESTMENTS (12,891,782) (23,016,028) (18,935,547)
------------ ------------ ------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $(12,903,194) $(23,223,360) $(19,157,993)
------------ ------------ ------------
*Foreign taxes withheld $ 21,588 $ 1,187 $ 266
------------ ------------ ------------
</Table>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<Page>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
PERIODS ENDED SEPTEMBER 30, 2002 MARCH 31, 2002
<Table>
<Caption>
GLOBAL SELECT GLOBAL TECHNOLOGY
-------------------------------------------------------------
SEPTEMBER 30, SEPTEMBER 30,
2002 MARCH 31, 2002 MARCH 31,
(UNAUDITED) 2002 (UNAUDITED) 2002
------------ ------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income (loss) $ (11,412) $ (135,875) $ (207,332) $ (285,788)
Net realized gain (loss) (5,537,668) (5,333,672) (12,798,674) (49,687,039)
Net unrealized appreciation (depreciation) (7,354,114) 5,325,253 (10,217,354) 41,199,587
------------ ------------ ------------ ------------
Net increase (decrease) in net assets from investment operations (12,903,194) (144,294) (23,223,360) (8,773,240)
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Institutional Class -- -- -- --
Retirement Class -- -- -- --
From net realized gains
Institutional Class -- -- -- --
Retirement Class -- -- -- --
------------ ------------ ------------ ------------
Total distributions -- -- -- --
------------ ------------ ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
Institutional Class 27,616,225 33,703,058 4,850,000 40,561,990
Retirement Class -- 150 -- --
Distributions reinvested
Institutional Class -- -- -- --
Retirement Class -- -- -- --
Cost of shares redeemed
Institutional Class (6,651,294) (7,363,152) (22,616,949) (49,616,643)
Retirement Class -- -- -- --
------------ ------------ ------------ ------------
Net increase (decrease) in net assets from share transactions 20,964,931 26,340,056 (17,766,949) (9,054,653)
------------ ------------ ------------ ------------
Net Increase (Decrease) in Net Assets 8,061,737 26,195,762 (40,990,309) (17,827,893)
NET ASSETS
Beginning 41,219,057 15,023,295 57,793,898 75,621,791
------------ ------------ ------------ ------------
Ending $ 49,280,794 $ 41,219,057 $ 16,803,589 $ 57,793,898
------------ ------------ ------------ ------------
Undistributed net investment income (loss), ending $ (34,429) $ (23,018) $ (245,698) $ (38,366)
------------ ------------ ------------ ------------
INSTITUTIONAL CLASS - CAPITAL SHARE ACTIVITY
Shares sold 2,393,513 2,447,740 329,923 1,853,554
Distributions reinvested -- -- -- --
Shares redeemed (547,742) (600,345) (1,575,537) (2,313,856)
------------ ------------ ------------ ------------
Net Institutional Share Activity 1,845,771 1,847,395 (1,245,614) (460,302)
------------ ------------ ------------ ------------
RETIREMENT CLASS - CAPITAL SHARE ACTIVITY
Shares sold -- 12 -- --
Distributions reinvested -- -- -- --
Shares redeemed -- -- -- --
------------ ------------ ------------ ------------
Net Retirement Share Activity -- 12 -- --
------------ ------------ ------------ ------------
<Caption>
GLOBAL HEALTH CARE
-------------------------------
SEPTEMBER 30,
2002 MARCH 31,
(UNAUDITED) 2002
------------ ------------
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income (loss) $ (222,446) $ (866,258)
Net realized gain (loss) (15,475,130) 2,709,456
Net unrealized appreciation (depreciation) (3,460,417) 1,774,191
------------ ------------
Net increase (decrease) in net assets from investment operations (19,157,993) 3,617,389
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Institutional Class -- --
Retirement Class -- --
From net realized gains
Institutional Class -- --
Retirement Class -- --
------------ ------------
Total distributions -- --
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold
Institutional Class 3,596,284 59,276,124
Retirement Class -- --
Distributions reinvested
Institutional Class -- --
Retirement Class -- --
Cost of shares redeemed
Institutional Class (57,148,058) (57,820,203)
Retirement Class -- --
------------ ------------
Net increase (decrease) in net assets from share transactions (53,551,774) 1,455,921
------------ ------------
Net Increase (Decrease) in Net Assets (72,709,767) 5,073,310
NET ASSETS
Beginning 93,177,119 88,103,809
------------ ------------
Ending $ 20,467,352 $ 93,177,119
------------ ------------
Undistributed net investment income (loss), ending $ (222,446) $ --
------------ ------------
INSTITUTIONAL CLASS - CAPITAL SHARE ACTIVITY
Shares sold 178,187 2,240,697
Distributions reinvested -- --
Shares redeemed (2,752,573) (2,336,350)
------------ ------------
Net Institutional Share Activity (2,574,386) (95,653)
------------ ------------
RETIREMENT CLASS - CAPITAL SHARE ACTIVITY
Shares sold -- --
Distributions reinvested -- --
Shares redeemed -- --
------------ ------------
Net Retirement Share Activity -- --
------------ ------------
</Table>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<Page>
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
NOTES TO FINANCIAL STATEMENTS - (UNAUDITED)
NOTE A -- ORGANIZATION
Nicholas-Applegate Institutional Funds (formerly Nicholas-Applegate Investment
Trust) (the "Trust") is an open-end management investment company. The Trust was
established as a Delaware business trust on December 17, 1992 and consists of
sixteen separate portfolios (collectively the "Funds" and each a "Fund"). Each
Fund's investment objectives, strategies and risks are discussed in the Funds'
current prospectuses. All of the Funds offer Institutional shares ("Class I")
and ten Funds offer Retirement shares ("Class R"). Class I and Class R shares
have no sales charge or distribution fee, but Class R shares have a shareholder
servicing fee. The Global Select, Global Health Care and Global Technology Class
I shares are covered in this report with each Fund's operations accounted for
separately.
NOTE B -- SIGNIFICANT ACCOUNTING POLICIES
Significant accounting policies consistently followed by the Funds in preparing
these financial statements are described below. The policies conform with
accounting principles generally accepted in the United States.
SECURITY VALUATIONS
The Funds value equity securities traded on national or international exchanges
and market systems at the last sales price reported by the security's primary
market at the time of daily valuation. If a last sales price is not available,
these securities are valued at the mean between last reported bid and ask
prices. Debt securities are valued at bid prices obtained from independent
pricing services or from one or more dealers making markets in the securities.
Security prices quoted in a foreign currency are translated using the current
U.S. dollar exchange rate. Short-term securities maturing within 60 days are
valued at amortized cost which approximates market value. When market quotations
for securities are not readily available, a fair value is determined by the
Investment Adviser in accordance with procedures established by the Board of
Trustees.
SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are accounted for as of trade date. Realized gains and
losses from security transactions are determined on an identified-cost basis.
Dividend income is recorded on the ex-dividend date or, for certain foreign
securities, when the information becomes available to the Funds. Interest income
is recorded on an accrual basis. Discounts and premiums on debt securities are
accreted and amortized on the yield to maturity basis.
FOREIGN CURRENCY TRANSACTIONS
At each net asset valuation date, the value of assets and liabilities
denominated in foreign currencies are translated into U.S. dollars using the
current exchange rate. Security transactions, income and expenses are converted
at the prevailing exchange rate on the day of the event. The effect of changes
in exchange rates on securities denominated in a foreign currency is included
with the net realized and unrealized gain or loss of the associated security.
Other foreign currency gains or losses are reported separately.
Certain Funds may use forward foreign currency contracts to reduce their
exposure to currency fluctuations of their foreign securities. These contracts
are commitments to purchase or sell a foreign currency at a specified rate on a
future date. When the contract is fulfilled or closed, gains or losses are
realized. Until then, the gain or loss is included in unrealized appreciation or
depreciation of investments. The contract commitment is fully collateralized by
cash or securities of the Fund. Foreign denominated assets and forward currency
contracts may involve more risks than domestic transactions, including currency
risk, political and economic risk, regulatory and market risk. Evaluating and
monitoring such risk exposure is a part of the Funds' management strategy.
<Page>
FUTURES CONTRACTS
Each Fund may enter into futures contracts involving foreign currency, interest
rates, securities, and securities indices, for hedging purposes only. A futures
contract obligates the seller of the contract to deliver and the purchaser of
the contract to take delivery of the type of foreign currency, financial
instrument or security called for in the contract at a specified future time for
a specified price. Upon entering into such a contract, a Fund is required to
deposit and maintain as collateral such initial margin as required by the
exchange on which the contract is traded. Pursuant to the contract, a Fund
agrees to receive from or pay to the broker an amount equal to the daily
fluctuations in the value of the contract. Such receipts or payments are known
as variation margin and are recorded as unrealized gains or losses by the Fund.
When the contract is closed, the Fund records a realized gain or loss equal to
the difference between the value of the contract at the time it was opened and
the value at the time it was closed.
OPTIONS CONTRACTS
The Funds may: (a) buy call options on foreign currency in anticipation of an
increase in the value of the underlying asset; (b) buy put options on foreign
currency, portfolio securities, and futures in anticipation of a decrease in the
value of the underlying asset; and (c) write call options on portfolio
securities and futures to generate income from premiums, and in anticipation of
a decrease or only limited increase in the value of the underlying asset. If a
call written by a Fund is exercised, the Fund foregoes any possible profit from
an increase in the market price of the underlying asset over the exercise price
plus the premium received. When a Fund writes options on futures contracts, it
will be subject to margin requirements similar to those applied to futures
contracts.
EQUITY-LINKED SECURITIES
The Funds may purchase equity-linked securities, also known as participation
notes, equity swaps, and zero strike calls and warrants. Equity-linked
securities are primarily used by a Fund to access the securities market of a
country from which the Fund would otherwise be precluded. The Fund deposits an
amount of cash with its custodian (or broker, if legally permitted) in an amount
equal to the selling price of the underlying security in exchange for an equity
linked security. Upon sale, the Fund receives cash from the broker or custodian
based on the change in the value of the underlying security. Aside from market
risk of the underlying security, there is a risk of default by the other party
to the transaction. In the event of insolvency of the other party, the Fund
might be unable to obtain its expected benefit. In addition, while a Fund will
seek to enter into such transactions only with parties which are capable of
entering into closing transactions with the Fund, there can be no assurance that
the Fund will be able to close out such a transaction with the other party or
obtain an offsetting position with any other party, at any time prior to the end
of the term of the underlying agreement. This may impair the Fund's ability to
enter into other transactions at a time when doing so might be advantageous.
SECURITIES LENDING
Each Fund may temporarily loan securities up to 30% of its total assets to
brokers, dealers or other financial institutions in exchange for a negotiated
lender's fee. The borrower fully collateralizes the loans with cash. The risk
associated with portfolio lending is that the borrower may not provide
additional collateral when required or return the securities when due.
The market value of securities on loan and the related collateral at
September 30, 2002 were:
<Table>
<Caption>
MARKET VALUE COLLATERAL
FUND (IN 000'S) (IN 000'S)
---------- ----------
Global Select 1,330 1,378
Global Technology 2,400 2,550
</Table>
<Page>
CREDIT FACILITY
The Trust has a $30 million credit facility available to fund temporary or
emergency borrowing. Each Fund pays its pro-rata share of an annual commitment
fee plus interest on its specific borrowings. For the period ended September 30,
2002, the Funds had no borrowings against the line of credit.
FEDERAL INCOME TAXES
The Funds intend to comply with the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute substantially all
of their taxable income to shareholders. Accordingly, no provision for federal
income taxes is required. A Fund investing in foreign securities records any
foreign taxes on income and gains on such investments in accordance with the
applicable tax rules. The Funds' tax accounting treatment of loss deferrals,
passive foreign investment companies and expiration of capital loss
carryforwards are different from the financial statement recognition of income
and gains.
Capital loss carryforwards may be used to offset current or future capital gains
until expiration. The following table reflects the capital loss carryforwards as
of March 31, 2002.
<Table>
<Caption>
CAPITAL LOSS
CARRYFORWARD EXPIRATION
FUND (IN 000'S) DATE
---------- ----
Global Select 7,168 3/31/10
Global Technology 52,122 3/31/09
Global Health Care 18,056 3/31/10
</Table>
DISTRIBUTIONS TO SHAREHOLDERS
The Funds record distributions to shareholders on the ex-dividend date.
Distributions are determined in accordance with income tax regulations that may
differ from generally accepted accounting principles. Accordingly, the Funds'
capital accounts are periodically reclassified to reflect income and gains
available for distribution under income tax regulations. The Funds make income
and capital gain distributions at least annually. Funds with income objectives
make distributions either quarterly or monthly in accordance with the
prospectuses.
The tax character of distributions paid during the fiscal year ended March 31,
2002 were as follows:
<Table>
<Caption>
DISTRIBUTION PAID FROM:
------------------------------------------------------------------------------------
FUND NET TOTAL TOTAL
ORDINARY LONG TERM TAXABLE TAX RETURN DISTRIBUTIONS
INCOME CAPITAL GAIN DISTRIBUTIONS OF CAPITAL PAID(1)
------ ------------ ------------- -------
Global Select -- -- -- -- --
Global Technology -- -- -- -- --
Global Health Care -- -- -- -- --
</Table>
<Page>
As of March 31, 2002 the components of accumulated earnings/(deficit) on a tax
basis were as follows:
<Table>
<Caption>
COMPONENTS OF ACCUMULATED EARNINGS/(DEFICIT):
-------------------------------------------------------------------------------------------------------
FUND UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED ACCUMULATED UNREALIZED TOTAL
ORDINARY LONG-TERM CAPITAL AND APPRECIATION/ ACCUMULATED
INCOME CAPITAL GAINS EARNINGS OTHER LOSSES (DEPRECIATION) EARNING/(DEFICIT)
------ ------------- -------- ------------ -------------- -----------------
Global Select -- -- -- (7,194,831)(5) 3,792,656(1) (3,402,175)
Global Technology -- -- -- (187,131,523)(4) 4,014,631(3) (183,116,892)
Global Health Care -- -- -- (18,056,173)(2) 2,743,105(3) (15,313,068)
</Table>
(1) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales and current year forward contracts marked-to-market.
(2) On March 31, 2002, the Fund had a net capital loss carryforward of
approximately $18,056,713 which will expire on March 31, 2010.
(3) The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales.
(4) On March 31, 2002, the Fund had net capital loss carryforwards of
approximately $187,093,157 which will expire on March 31, 2009 and March 31,
2010. To the extent future capital gains are offset by capital loss
carryforwards, such gains will not be distributed. Net capital losses
incurred after October 31, and within the taxable year are deemed to arise on
the first business day of the Fund's next taxable year. For the year ended
March 31, 2002, the Fund deferred to April 1, 2002, post October currency
losses.
(5) On March 31, 2002, the Fund had net capital loss carryforwards of
approximately $7,168,402 which will expire on March 31, 2010. To the extent
future capital gains are offset by capital loss carryforwards, such gains
will not be distributed. Net capital losses incurred after October 31, and
within the taxable year are deemed to arise on the first business day of the
Fund's next taxable year. For the year ended March 31, 2002, the Fund
deferred to April 1, 2002, post October currency losses.
FUND EXPENSES AND MULTI-CLASS ALLOCATIONS
Each Fund bears expenses incurred specifically on its behalf plus an allocation
of its share of Trust level expenses. Each share offered by a Fund has equal
rights to assets but incurs certain Class specific expenses. The Funds allocate
income, gains and losses, both realized and unrealized, and expenses, except for
Class specific expenses, based on the relative net assets of each share class.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from these estimates.
NICHOLAS-APPLEGATE SOUTHEAST ASIA FUND, LTD.
The Global Technology Fund invests in the Indian and certain other Southeast
Asia stock markets through Nicholas-Applegate Southeast Asia Fund Ltd., a
subsidiary company of each of the Funds and incorporated under the laws of
Mauritius (the "Mauritius Subsidiary"). The Mauritius Subsidiary is entitled to
benefit from the double taxation treaty between India and Mauritius, and invests
in India in what the Investment Adviser considers to be the most efficient way
currently available. The Mauritius Subsidiary may also be utilized to invest in
other Southeast Asia markets where deemed appropriate or advisable by the
Investment Adviser. Each Fund holds a 100% interest in a separate class of
securities issued by the Mauritius Subsidiary, represented by a separate,
underlying portfolio of securities. The accounts of the Mauritius Subsidiary are
reflected in the Fund using consolidation accounting principles.
NOTE C -- TRANSACTIONS WITH AFFILIATES
Nicholas-Applegate Capital Management, as the Investment Adviser of the Funds,
receives the following annual fees payable monthly based on the average daily
net assets of each Fund.
<Table>
Global Technology and Global Healthcare 1.00%
<Page>
Global Select 0.80%
</Table>
Under an Administrative Services agreement the Investment Adviser provides
operational support services to the Funds at an annual fee on average daily net
assets of 0.10%.
The Investment Adviser has agreed to limit the Fund's expenses to certain levels
through March 31, 2003. Expenses reimbursed by the Investment Adviser prior to
July 24, 1998 may be recouped from the Funds within five years of that date.
Expenses reimbursed by the Investment Adviser from July 24, 1998 through May 7,
1999 may be recouped from the Funds within five years after the year in which
they are reimbursed. Any expenses reimbursed after May 7, 1999 may be recouped
within three years after the year in which they are reimbursed. The Investment
Adviser will recover such reimbursements to the extent of the differences
between a Fund's actual expenses (exclusive of interest expense, taxes,
brokerage, and the costs of establishing and maintaining The Mauritius
Subsidiary) when they fall below the limit.
<Table>
<Caption>
EXPENSE LIMIT
-------------
UNRECOUPED
CLASS AMOUNTS AT
FUND INSTITUTIONAL 09/30/02
------------- --------
Global Select 1.05% 433,704
Global Technology 1.40% 65,998
Global Health Care 1.40% 39,947
</Table>
Certain officers of the Trust are also officers of the Investment Adviser and
Distributor. The Trustees who are not affiliated with the Investment Adviser
receive annual compensation of approximately $31,000 each from the Trust.
NOTE D -- INVESTMENT TRANSACTIONS
The following table presents purchases and sales of securities, excluding
short-term investments, during the period ended September 30, 2002 to indicate
the volume of transactions in each Fund. The tax cost of securities held at
September 30, 2002, and the related gross and net unrealized appreciation and
depreciation, provide aggregate information on a tax basis against which future
gains and losses on these investments are measured for distribution purposes.
<Table>
<Caption>
NET
GROSS GROSS UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
PURCHASES SALES TAX COST APPRECIATION DEPRECIATION (DEPRECIATION)
FUND (IN 000'S) (IN 000'S) (IN 000'S) (IN 000'S) (IN 000'S) (IN 000'S)
- ---- ---------- ---------- ---------- ---------- ---------- ----------
Global Select 73,464 53,290 51,175 1,193 4,372 (3,179)
Global Technology 29,598 43,735 22,222 659 6,024 (5,365)
Global Health Care 92,689 146,944 19,271 1,651 403 1,248
</Table>
NOTE E -- FINANCIAL INSTRUMENTS
During the period, several of the Funds have been party to financial instruments
with off-balance sheet risks, including forward foreign currency contracts and
futures contracts, primarily in an attempt to minimize the risk to the Fund, in
respect of its portfolio transactions. These instruments involve market and/or
credit risk in excess of the amount recognized in the Statement of Assets and
Liabilities. Risks arise from the possible inability of counterparties to meet
the terms of their contracts and from unexpected movement in currencies,
securities values and interest rates. The contract amounts indicate the extent
of the Funds' involvement in such contracts.
<Page>
NOTE F CORPORATE GOVERNANCE (UNAUDITED)
<Table>
<Caption>
TERM OF NUMBER OF
OFFICE AND PORTFOLIOS IN
POSITION(S) LENGTH OF FUND COMPLEX
NAME, ADDRESS (1) HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN BY OTHER DIRECTORSHIPS
AND AGE FUND SERVED (2) DURING PAST 5 YEARS TRUSTEE HELD BY TRUSTEE
DISINTERESTED
TRUSTEES:
WALTER E. AUCH Trustee Since May Retired; prior thereto, Chairman and 16 Trustee, Brinson Relationship Funds
(80) 1999 CEO of Chicago Board of Options (since 1994) and Brinson
Exchange (1979-1986). Supplementary Trust (since 1997);
Director, Thompson Asset Management
Corp (since 1987); Director, Smith
Barney Trak Fund (since 1992) and
Smith Barney Advisors (since 1992);
Director, PIMCO Advisors L.P (since
1994); Director, Banyon Realty
Trust (since 1988), Banyon Mortgage
Investment Fund (since 1989) and
Banyon Land Fund II (since 1988);
Director, Express America Holdings
Corp (since 1992); Director, Legend
Properties, Inc. (since 1987);
Director, Senele Group (since
1988); Director, Fort Dearborn
Income Securities, Inc.
(1987-1995); Trustee,
Nicholas-Applegate Mutual Funds
(1994-1999); Director, Geotek
Industries, Inc. (1987-1998).
DARLENE DEREMER Trustee Since May Managing Director, NewRiver Ebusiness 16 Founding Member and Director,
(46) 1999 Advisory Services Division; Prior to, National Defined Contribution
President and Founder, DeRemer Council (since 1997); Trustee,
Associates, a strategic and marketing Boston Alzheimer's Association
consulting firm for the financial (since 1998); Director, King's Wood
services industry (since 1987); Vice Montessori School (since 1995);
President and Director, Asset Editorial Board, National
Management Division, State Street Bank Association of Variable Annuities
and Trust Company, now referred to as since 1997); Director,
State Street Global Advisers, Nicholas-Applegate Strategic
(1982-1987); Vice President, T. Rowe Opportunities, Ltd. (1994-1997);
Price & Trustee, Nicholas-Applegate Mutual
Funds (1994-1999); Director,
<Page>
Associates (1979-1982); Member, Jurika & Voyles Fund Group
Boston Club (since 1998); Member, (since 1994-2000).
Financial Women's Association
Advisory Board (since 1995);
Founder, Mutual Fund Cafe Website.
</Table>
<Table>
<Caption>
TERM OF NUMBER OF
OFFICE AND PORTFOLIOS IN
POSITION(S) LENGTH OF FUND COMPLEX
NAME, ADDRESS (1) HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN BY OTHER DIRECTORSHIPS
AND AGE FUND SERVED (2) DURING PAST 5 YEARS TRUSTEE HELD BY TRUSTEE
GEORGE F. KEANE Trustee Since May Consultant, Associated Energy Managers 16 Director, Bramwell Funds (since
(72) 1999 (since 1994); Prior to, President 1994); Director, Longview Oil & Gas
Emeritus and founding Chief Executive (since 2000); Director, Security
Officer, The Common Fund (1971-1992); Capital U.S. Real Estate (since
and Endowment Advisors (1987-1992) 1997); Director, The Universal Bond
(organizations that provide investment Fund (since 1997); Director,
management programs for colleges and Universal Stainless & Alloy
universities) ; Member, Investment Products Inc. (1994-2000);
Advisory Committee, New York State Director, United Water Services and
Common Retirement Fund (since 1982). affiliated companies (1996-2000);
Director, and former Chairman of
the Board, Trigen Energy
Corporation (1994-2000); Trustee,
Nicholas-Applegate Mutual Funds
INTERESTED (1994-1999).
TRUSTEES:
E. BLAKE MOORE, Trustee and Since Managing General Counsel, 16 Director, Nicholas-Applegate
JR. (44) Chairman February Nicholas-Applegate Capital Management Southeast Asia Fund (Since 2000).
2002 LLC, Nicholas-Applegate Securities
LLC, Nicholas-Applegate Holdings LLC
and Nicholas-Applegate Securities
International LDC (Since 1995).
OFFICERS:
E. BLAKE MOORE, President Since May Managing General Counsel, 16 Director, Nicholas-Applegate
JR. (44) 2001 Nicholas-Applegate Capital Management Southeast Asia Fund (Since 2000).
LLC, Nicholas-Applegate Securities
LLC, Nicholas-Applegate Holdings LLC
and Nicholas-Applegate Securities
International LDC (Since 1995).
CHARLES H. Secretary Since May Deputy General Counsel, 16 Director, Nicholas-Applegate U.S.
FIELD, JR. (46) 2001 Nicholas-Applegate Capital Management Growth Equity Fund (Since 1996);
(Since 1996). Director, Nicholas-Applegate
Southeast Asia Fund (Since 1999).
Director, Nicholas-Applegate
<Page>
Strategic Opportunities Fund, LLC
(1996-2000); Director, Torrey Pines
Fund, Ltd. (Since 1999).
C. WILLIAM Treasurer Since May Managing Chief Financial Officer, 16 NA
MAHER (41) 1999 Nicholas-Applegate Capital Management,
Nicholas-Applegate Securities, (Since
1998); Co-Managing Chief Financial
Officer Nicholas-Applegate Holdings LLC
(Since 2001). Formerly Chief Financial
Officer, Mitchell Hutchins Asset
Management, Inc. (1990-1998).
</Table>
(1) Unless otherwise noted, the address of the Trustees and Officers is c/o:
Nicholas-Applegate Capital Management, 600 West Broadway, 32nd Floor, San Diego,
California 92101.
(2) Each Trustee serves for an indefinite term, until her or his successor is
elected.
<Page>
NICHOLAS-APPLEGATE INSITUTIONAL FUNDS
PART C
OTHER INFORMATION
Item 15. INDEMNIFICATION
Indemnification provisions for officers and trustees of Registrant are
set forth in Article V, Section 2 of the Amended and Restated Declaration of
Trust, and are hereby incorporated by reference. See Item 16(1) below. Under
this Article, officers and trustees will be indemnified to the fullest extent
permitted to trustees by laws applicable to a Delaware business trust, subject
only to such limitations as may be required by the Investment Management Company
Act of 1940, as amended ("1940 Act"), and the rules thereunder. Under the 1940
Act, trustees and officers of Registrant cannot be protected against liability
to Registrant or its shareholders to which they would be subject because of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties of their office. Registrant also maintains liability insurance policies
covering its trustees and officers.
Item 16. EXHIBITS
(1) (a) Declaration of Trust, filed with Registration Statement on
December 31, 1992 and incorporated herein by reference
(b) Amended and Restated Declaration of Trust, filed with
Amendment No. 1 to Registration Statement on March 17, 1993 and
incorporated herein by reference
(c) Amended and Restated Declaration of Trust dated February 19,
1999, filed with Registration Statement on May 6, 1999 and
incorporated herein by reference
(d) Amendment No. 1 to the Amended and Restated Declaration of
Trust dated February 19, 1999, filed with Registration Statement
on June 18, 1999 and incorporated herein by reference
(2) (a) Amended By-Laws, filed with Amendment No. 2 to
Registration Statement on April 6, 1993 and incorporated herein
by reference
(b) Amended By-Laws dated February 19, 1999, filed with
Registration Statement on May 6, 1993 and incorporated herein by
reference
(3) Voting trust agreement - none
(4) Plan of Reorganization and Termination by Nicholas-Applegate
Institutional Funds on behalf of Nicholas-Applegate Global Select
Fund, Nicholas-Applegate Global - filed herewith
C-1
<Page>
Technology Fund and Nicholas-Applegate Global Health Care Fund -
filed herewith
(5) Provisions of instruments defining the rights of holders of
securities are contained in Articles VI and VII of Registrant's
Amended and Restated Declaration of Trust
(6) (a) Investment Advisory Agreement between Registrant and
Nicholas-Applegate Capital Management, filed with Registration
Statement on May 6, 1999 and incorporated herein by reference
(b) Form of letter agreement dated August 31, 1999 between
Registrant and Nicholas-Applegate Capital Management, filed with
Registration Statement on June 18, 1999 and incorporated herein
by reference
(c) Form of Sub-Investment Advisory Agreement between Registrant
and Criterion Investment Management LLC, filed with
Post-Effective Amendment No. 4 to Registration Statement on
May 25, 2000 and incorporated herein by reference
(d) Proposed Investment Advisory Agreement between Registrant and
Nicholas-Applegate Capital Management, filed with Post-Effective
Amendment No. 5 to Registration Statement on November 30, 2000
and incorporated herein by reference
(e) Proposed Sub-Investment Advisory Agreement between Registrant
and Criterion Investment Management LLC, filed with
Post-Effective Amendment No. 5 to Registration Statement on
November 30, 2000 and incorporated herein by reference
(f) Form of letter agreement dated February 9, 2001 between
Registrant and Nicholas-Applegate Capital Management amending the
Investment Advisory Agreement, filed with Post-Effective
Amendment No. 6 to Registration Statement on February 14, 2001
and incorporated herein by reference
(g) Letter agreement dated May 8, 2001 between Registrant and
Nicholas-Applegate Capital Management Amending the Investment
Advisory Agreement dated January 31, 2001, filed with
Post-Effective Amendment No. 9 to Registration Statement on
October 1, 2001 and incorporated herein by reference
(7) (a) Distribution Agreement between Registrant and
Nicholas-Applegate Securities dated May 10, 1999, filed with
Registration Statement on May 6, 1999 and incorporated herein by
reference
(b) Distribution Agreement between Registrant and
Nicholas-Applegate Securities, filed with Post-Effective
Amendment No. 5 to Registration Statement on November 30, 2000
and incorporated herein by reference
C-2
<Page>
(8) Benefit Plan for trustees or officers of Registrant in their
capacity as such - none
(9) (a) Custodian Services Agreement between Registrant and Brown
Brothers Harriman & Co., filed with Registration Statement on
May 6, 1999 and incorporated herein by reference
(b) Foreign Custody Agreement between Registrant and Brown
Brothers Harriman & Co., filed with Registration Statement on
May 6, 1999 and incorporated herein by reference
(c) Amendment to Custodian Serviecs Agreement between Registrant
and Brown Brothers Harriman & Co., filed with Registration
Statement on May 6, 1999 and incorporated herein by reference
(d) Cash Management Authorization Services Agreement between
Registrant and Brown Brothers Harriman & Co., filed with
Registration Statement on May 6, 1999 and incorporated herein by
reference
(e) Form of letter agreement between Restrant and Brown Brothers
Harriman & Co. amending Foreign Custody Agreement dated May 1,
1999, filed with Post-Effective Amendment No. 4 to Registration
Statement on May 25, 2000 and incorporated herein by reference
(f) Form of letter agreement between Registrant and Brown
Brother s Harriman & Co. amending Custodian Services Agreement
dated May 1, 1999, filed with Post-Effective Amendment No. 4 to
Registration Statement on May 25, 2000 and incorporated herein by
reference
(g) Form of letter agreement between Registrant and Brown
Brothers Harriman & Co. amending Cash Management Authorization
Services Agreement dated May 1, 1999, filed with Post-Effecgive
Amendment No. 4 to Registration Statement on May 25, 2000 and
incorporated herein by reference
(h) Form of letter agreement between Registrant and Brown
Brothers Harriman & Co. amending Cash Management Authorization
Services Agreement dated May 1, 1999, filed with Post-Effective
Amendment No. 6 to Registration Statement on February 14, 2001
and incorporated herein by reference
(i) 17f-5 Delegation Schedule between Registrant and Brown
Brothers Harriman & Co. dated February 14, 2001, filed with
Post-Effective Amendment No. 6 to Registration Statement on
February 14, 2001 and incorporated herein by reference
(j) Amendment to Custodian Services Agreement between Registrant
and Brown Brothers Harriman & Co. dated February 14, 2001, filed
with Post-Effective Amendment No. 7 to Registration Statement on
April 10, 2001 and with Post-Effective Amendment No. 8 to
Registration Statement on May 30, 2001 and incorporated herein
by reference
C-3
<Page>
(10) (a) Rule 12b-1 Plan for Class R Shares, filed with Registration
Statement on ___ [TBP] and incorporated herein by reference
(b) Rule 18f-3 Plan between Registrant and Nicholas-Applegate
Capital Management, filed with Registration Statement on May 6,
1999 and incorporated herein by reference
(11) Opinion and consent of counsel as to the legality of the
securities being registered, indicating whether they will, when
sold, be legally issued, fully paid, and non-assessable - filed
herewith
(12) Opinion and consent of counsel as to the tax matters and
consequences to shareholders discussed in the Prospectus/Proxy
Statement - to be filed by Amendment within a reasonable time
after closing.
(13) (a) Administration and Fund Accounting Agency Agreement between
Registrant and Brown Brothers Harriman & Co., filed with
Registration Statement on May 6, 1999 and incorporated herein by
reference
(14) Consent of Ernst & Young - filed herewith
(b) Administrative Services Agreement between Registrant and
Nicholas-Applegate Capital Management, filed with Registration
Statement on May 6, 1999 and incorporated herein by reference
(c) License Agreement between Registrant and Nicholas-Applegate
Cpital Management, filed with Registration Statement on May 6,
1999 and incorporated herein by reference
(d) Expense Limitation Agreement between Registrant and
Nicholas-Applegate Capital Management on May 6, 1999 and
incorporated herein by reference
(e) Transfer Agency and Service Agreement between Registrant and
State Street Bank and Trust Company, filed with Registration
Statement on May 27, 1999 and incorporated herein by reference
(f) Form of letter agreement between Registrant and Brown
Brothers Harriman & Co. Amending to Adminstration and Fund
Accounting Agency Agreement dated May 1, 1999, filed with
Post-Effective Amendment No. 4 to Registration Statement on May
27, 2000 and incorporated herein by reference
(g) Form of letter agreement between Registration and
Nicholas-Applegate Capital Management amending Expense Limitation
Agreement, filed with Registration Statement on June 18, 1999 and
incorporated herein by reference
(h) Form of letter agreement between Registrant and State Street
Bank and Trust Company amending Transfer Agency and Service
Agreement, filed with Registration Statement on June 18, 1999 and
incorporated herein by reference
C-4
<Page>
(i) Credit Agreement between Registrant and BankBoston, N.A.,
dated December 21, 1999, filed with Post-Effective Amendment
No. 4 to Registration Statement on May 25, 2000 and incorporated
herein by reference
(j) Master Securities Lending Agreement between Registrant and
Goldman, Sachs & Co. dated July 22, 1999, filed with
Post-Effective Amendment No. 4 to Registration Statement on
May 25, 2000 and incorporated herein by reference
(k) Administrative Service Agreement between Registrant and
Nicholas-Applegate Capital Management, filed with Post-Effective
Amendment No. 5 to Registration Statement on November 30, 2000
and incorporated herein by reference
(l) Form of letter agreement between Registrant and Brown
Brothers Harriman & Co. amending Adminstration and Fund
Accounting Agency Agreement dated May 1, 1999, filed with
Post-Effective Amendment No. 6 to Registration Statement on
February 14, 2001 and with Post-Effective Amendment No. 7 to
Registration Statement on April 10, 2001 and incorporated herein
by reference
(m) Form of letter agreement between Registrant and
Nicholas-Applegate Capital Management amending Expense Limitation
Agreement, filed with Post-Effective Amendment No. 6 to
Registration Statement on February 14, 2001 and incorporated
herein by reference
(n) Form of letter agreement between Registrant and State Street
Bank and Trust Company amending Transfer Agency and Service
Agreement, filed with Post-Effective Amendment No. 6 to
Registration Statement on February 14, 2001 and incorporated
herein by reference
(o) Form of letter agreement between Registrant and Fleet Bank
(formally BankBoston, N.A.) amending Credit Agreement dated
December 21, 1999, filed with Post-Effective Amendment No. 6 to
Registration Statement on February 14, 2001 and incorporated
herein by reference
(p) Amendment to Administration and Fund Accouting Agreement
between Registrant and Brown Brothers Harriman & Co. dated
February 14, 2001, filed with Post-Effective Amendment No. 7 to
Registration Statement on April 10, 2001 and incorporated herein
by reference
(q) Letter agreement dated May 18, 2001 between Registrant and
Nicholas-Applegate Capital Management amending Expense Limitation
Agreement, filed with Post-Effective Amendment No. 8 to
Registration Statement on May 30, 2001 and incorporated herein by
reference
(r) Letter agreement dated September 27, 2001 between Registrant
and Nicholas-Applegate Capital Management amending Expense
Limitation Agreement, filed
C-5
<Page>
with Post-Effective Amendment No. 9 to Registration Statement on
October 1, 2001 and incorporated herein by reference
(s) Letter agreement dated May 17, 2002 between Registrant and
Nicholas-Applegate Capital Management amending Expense Limitation
Agreement, filed with Post-Effective Amendment No.10 to
Registration Statement on May 20, 2002 and incorporated herein by
reference
(14) Consent of Ernst & Young LLP - filed herewith
(15) Financial statements omitted from part B - none.
(16) (a) Limited Powers of Attorney of Trustees filed with
Post-Effective Amendment No. 12 to Registration Statement on
August 1, 1994 and incorporated herein by reference
(b) Limited Powers of Attorney of Walter E. Auch, filed with
Amendment No. 14 to Registration Statement on September 26, 1994
and incorporated herein by reference
(c) Limited Powers of Attorney of Trustees - filed herewith
(17) Additional Exhibits:
Form of Proxy Card - filed herewith
Item 17. UNDERTAKINGS
(1) The undersigned Registrant agrees that prior to any public re-offering
of the securities registered through the use of the prospectus which is a part
of this Registration Statement by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c) of the Securities Act of 1933, the
re-offering prospectus will contain the information called for by the applicable
registration form for re-offering by persons who may be deemed underwriters, in
addition to the information called for by the other items of the applicable
form.
(2) The undersigned Registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as a part of an amendment to the
Registration Statement and will not be used until the amendment is effective,
and that, in determining any liability under the Securities Act of 1933, each
post-effective amendment shall be deemed to be a new Registration Statement for
the securities offered therein, and the offering of the securities at that time
shall be deemed to be the initial bona fide offering of them.
(3) The undersigned Registrant agrees to file an amendment to the
Registration Statement, pursuant to Rule 485(b) of Regulation C of the
1933 Act, for the purpose of including Exhibit 12, Opinion of Counsel
Supporting Tax Matters with a reasonable time after closing.
C-6
<Page>
Pursuant to the requirements of the Securities Act of 1933, as amended (the
"1933 Act"), the Registrant has duly caused this Registration Statement on Form
N-14 to be signed on its behalf by the undersigned, thereunto duly authorized,
in the city of San Diego and the State of California on the 8th day of November,
2002.
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
By: /s/
_______________________________
Charles H. Field, Jr.
Secretary
Pursuant to the requirements of the 1933 Act, this Registration Statement has
been signed below by the following persons in the capacities and on
December 8, 2002.
/s/
- ----------------------
Blake Moore, Jr.
Chairman of the Board, Trustee and President
E. Blake Moore, Jr.
- ----------------------
William Maher
Principal Financial and Accounting Officer
/s/
- ----------------------
Charles H. Field, Jr.
Secretary
- ----------------------
Walter E. Auch
Trustee
- ----------------------
Darlene DeRemer
Trustee
- ----------------------
George F. Keane
Trustee
/s/
- ----------------------
By Charles H. Field, Jr.
Attorney In Fact
C-7