UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-CSR
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CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
INVESTMENT COMPANY ACT FILE NUMBER 811-0792
CNI CHARTER FUNDS
(Exact name of registrant as specified in charter)
--------
400 North Roxbury Drive
Beverly Hills, CA 90210
(Address of principal executive offices)(Zip code)
SEI Investments Distributors
1 Freedom Valley Drive
Oaks, PA 19456
(Name and address of agent for service)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 1-888-889-0799
DATE OF FISCAL YEAR END: SEPTEMBER 30, 2004
DATE OF REPORTING PERIOD: MARCH 31, 2004
ITEM 1. REPORTS TO STOCKHOLDERS.
[CNI CHARTER FUNDS Logo Omitted]
Investment Manager:
CITY NATIONAL ASSET MANAGEMENT, INC.
[Skyscraper Graphic Omitted]
SEMI-ANNUAL REPORT
March 31, 2004
Large Cap Value Equity Fund
Large Cap Growth Equity Fund
RCB Small Cap Value Fund
Technology Growth Fund
Corporate Bond Fund
Government Bond Fund
California Tax Exempt Bond Fund
High Yield Bond Fund
Prime Money Market Fund
Government Money Market Fund
California Tax Exempt Money Market Fund
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[Skyscraper Background Graphic Omitted]
This report and the financial statements
contained herein are provided for the general
information of the shareholders of the CNI
Charter Funds. This report is not authorized
for distribution to prospective investors in
the CNI Charter Funds unless preceded or
accompanied by an effective prospectus.
Please remember that past performance
is no guarantee of future results.
Shares of CNI Charter Funds are not deposits
or obligations of any bank, are not guaranteed
by any bank, are not insured by the FDIC or
any other agency and involve investment risks,
including the possible loss of the principal
amount invested.
Effective August 31, 2004, a description of
the policies and procedures that the Funds
use to determine how to vote proxies relating
to the Funds' portfolio securities, and informa-
tion on how the Funds voted proxies relating
to portfolio securities during the 12-month
period ended June 30, 2004 will be available
(1) without charge, upon request, by calling
1-888-889-0799, (2) on the Funds' website at
www.cnicharterfunds.com, and (3) on the
Securities and Exchange Commission's website
at WWW.SEC.GOV.
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TABLE OF CONTENTS
CNI Charter Funds Semi-Annual Report
02 Letter to Our Shareholders
04 Equity Funds Investment Adviser's Report
05 Fixed Income Funds Investment Adviser's Report
06 Statements of Net Assets
43 Statements of Operations
46 Statements of Changes in Net Assets
50 Financial Highlights
53 Notes to Financial Statements
CNI Charter Funds| PAGE 1
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letter to our shareholders
MARCH 31, 2004
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We are pleased to provide you with the CNI Charter Funds Semi-Annual Report for
the six months ended March 31, 2004, a period in which both economic and
geo-political events continued to affect the financial markets.
The underlying investment philosophy of the CNI Charter Funds is to pursue
the long-term goals and objectives specified for each of the Funds without being
swayed by short-term trends and fads. All Funds are managed with an active yet
disciplined style that seeks to achieve competitive rates of return consistent
with their respective, prescribed risk parameters. City National Asset
Management, Inc., as Investment Manager to the Funds, utilizes in-depth research
that takes advantage of the most advanced investment technology, fundamental
valuation, and quantitative tools to determine what we believe to be the most
attractive sectors and securities within each Fund's area of concentration. This
approach has served shareholders well overall during the complex and volatile
financial environment we encountered in the period ending March 31, 2004.
SIX-MONTH MARKET WATCH:
OCTOBER 2003 - MARCH 2004
The six-months ended March 31 witnessed a continuation of the global rebound in
equities with all of the major domestic and international stock indices rising.
(Please refer to table that follows.) The growth in equity prices, however, was
interrupted in March as fears of renewed terrorist activity combined with weak
economic reports on the employment front sparked investor concern. Despite these
interruptions, virtually all sectors of the financial markets (including stocks
and bonds) showed positive results for the six-month period ending March 31.
All economic signs continue to point towards a full and healthy recovery.
Real GDP growth was reported at 4.1% for the fourth quarter of 2003, and is
widely expected to reach 4.5% in the first quarter of 2004, according to the
latest Blue Chip Economic Consensus forecast figures. Durable goods orders,
factory orders, the ISM Manufacturing Survey report, and a host of other
manufacturing-related measures all continued to evidence healthy growth and
point towards increasing momentum in that sector of the economy throughout 2004.
Historically low interest rates continued to support both the housing and
automobile market, and propel the consumer segment to new highs in terms of
spending.
And, while the current rate of growth does not represent a blockbuster year
relative to historical economic recoveries, it does underpin the double-digit
growth in corporate earnings likely to occur this year. All of this is happening
without any significant sign of inflation at either the consumer or wholesale
levels. Despite the shocks in energy prices, core inflation remained low.
Overall, it still appeared to be a sunny day in economic terms - healthy real
economic growth without attendant inflation.
Although economic evidence continued to support the notion of a domestic
recovery, particularly in the beleaguered manufacturing sector, news of weak job
growth affected the markets. Fears of a stalled recovery began to emerge in
March when the latest job statistics seemed to show lackluster growth. Bond
prices surged on the news as stocks tumbled. Yet, despite this short-term
effect, stocks and bonds continued to post healthy, positive gains for most of
this period.
Longer-term and lower credit rated bonds (including the high yield sector)
showed the strongest gains for the six-month period. Similarly, international,
energy and telecommunications issues led the equity markets for the last six
months.
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SIX-MONTH OCTOBER, 2003 -
INDEX WATCH: MARCH, 2004
S&P 500 Stock Index: ........................... +14.08%
Dow Jones Industrials: ......................... +12.90%
NASDAQ: ........................................ +11.90%
MSCI EAFE Equity: .............................. +22.27%
Lehman Brothers Aggregate Bond Index: + 2.98%
Oil: ........................................... +31.70%
Gold: .......................................... + 9.90%
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CNI Charter Funds | PAGE 2
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SIX MONTH WATCH: CNI CHARTER FUNDS PERFORMANCE
By adhering to our basic investment discipline and maintaining the appropriate
amount of risk control in the various portfolios, the Funds should continue to
provide returns that are competitive in their respective investment arenas.
All of the equity-oriented Funds showed positive returns during the six-month
period, as one might expect, given the strong momentum in stocks. Leading the
pack was the 19.79% gain in the CNI CHARTER RCB SMALL CAP VALUE FUND. Following
close behind was the 17.80% return to the CNI CHARTER LARGE CAP VALUE EQUITY
FUND. The CNI CHARTER TECHNOLOGY GROWTH FUND rose 11.43%, while the CNI CHARTER
LARGE CAP GROWTH EQUITY FUND gained 9.65% during the six-month period. All
returns stated are for the Institutional Classes.
All four of the bond-oriented Funds also showed gains during the period. The
CNI CHARTER HIGH YIELD BOND FUND rose 7.79%, followed by the 2.45% return to the
CNI CHARTER CORPORATE BOND FUND, the 1.39% gain for the CNI CHARTER CALIFORNIA
TAX EXEMPT BOND FUND and the 0.81% move in the CNI CHARTER GOVERNMENT BOND FUND.
All returns stated are for the Institutional Classes.
Lastly, all three Money Market Funds continued to turn in competitive, albeit
minimal, yields for the six months ending March 31, 2004.
The following pages contain important information and details on the assets
and financial condition of the Funds. Please read them carefully and if you have
any questions about this report or the CNI Charter Funds, please call your
investment professional or contact us at (888) 889-0799.
Thank you for choosing CNI Charter Funds
Sincerely,
/s/Richard A. Weiss
Richard A. Weiss
PRESIDENT
CITY NATIONAL ASSET MANAGEMENT, INC.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. CERTAIN SHAREHOLDERS MAY BE
SUBJECT TO THE ALTERNATIVE MINIMUM TAX (AMT). FEDERAL INCOME TAX RULES APPLY TO
ANY CAPITAL GAIN DISTRIBUTIONS.
FUND EXPENSES HAVE BEEN WAIVED DURING THE PERIOD ON WHICH THE PERFORMANCE IS
BASED. WITHOUT WAIVERS, PERFORMANCE WOULD BE LOWER.
THIS INFORMATION MUST BE PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS. PLEASE
READ THE PROSPECTUS CAREFULLY BEFORE INVESTING.
INVESTING IN MUTUAL FUNDS INVOLVES RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
IN ADDITIONAL TO THE NORMAL RISKS ASSOCIATED WITH INVESTING, INVESTMENTS IN
SMALLER COMPANIES TYPICALLY EXHIBIT HIGHER VOLATILITY, AND PRODUCTS OF COMPANIES
IN WHICH TECHNOLOGY FUNDS INVEST MAY BE SUBJECT TO SEVERE COMPETITION AND RAPID
OBSOLESCENCE. AN INVESTMENT IN THE FUNDS IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
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*NOT FDIC INSURED *NO BANK GUARANTEE *MAY LOSE VALUE
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cnicharterfunds.com
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Visit our website CNICHARTERFUNDS.COM where you will find comprehensive
information about our fund family including:
o Daily, monthly and quarterly performance
o Detailed descriptions on each CNI Charter Fund
o Prospectus and annual report downloads
o Additional information for investment professionals
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CNI Charter Funds | PAGE 3
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investment adviser's report
MARCH 31, 2004
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EQUITY FUNDS
Given the way that equities performed in the first quarter of 2004, one might
think that the market was not doing well. Nothing could be further from the
truth. In fact, over the six months ending March 31, 2004, the S&P 500 Stock
Index rose 14.08%, continuing the solid gains started back in March 2003.
Investors were concerned, though, with the market's negative performance (-1.57%
for the S&P 500 Stock Index) in the month of March 2004. Still, this negative
month was only the second down month over the previous thirteen.
The market's appetite for risk also seemed to increase over the six-month
time period. Companies with less healthy balance sheets and greater leverage
tended to outperform the more stable companies. Holders of companies with
improved earning growth, even from prior negative quarters, were handsomely
rewarded. In general, small capitalization stocks outperformed large
capitalization stocks and value stocks outperformed growth stocks.
The returns for all four CNI Charter Equity Funds were positive over the past
six months:
o The Institutional Class shares of the CNI CHARTER LARGE CAP VALUE FUND
returned 17.80%. This performance lagged the S&P 500/BARRA Value Index
return of 18.29%, but outperformed the Lipper Large Cap Value Funds
Classification return of 15.94%.
o The CNI CHARTER LARGE CAP GROWTH EQUITY FUND (Institutional Class) gained
9.65%. This performance trailed the S&P 500/BARRA Growth Index return
of 9.96% and the Lipper Large Cap Growth Funds Classification return
of 10.79%.
o The Institutional Class shares of the CNI CHARTER RCB SMALL CAP VALUE FUND
returned 19.79%. This result underperformed the Russell 2000 Value Index
return of 24.42% as well as the Lipper Small Cap Value Funds Classification
which returned of 22.74%.
o The CNI CHARTER TECHNOLOGY GROWTH FUND (Institutional Class) achieved an
11.43% return. This performance beat the Russell 3000 Technology Index
return of 10.38%, but trailed the Lipper Science & Technology Funds
Objective return of 13.94%.
Looking forward, investors appear to be concerned about the potential growth
of the economy and whether future growth can sustain the appreciated equity
levels. Anemic job growth and tame inflation is allowing the Federal Reserve to
continue to hold interest rates at all time lows. Increased terrorism levels and
the ongoing issues of corporate governance, remain plausible risks to higher
equity valuations.
We are encouraged, though, by the strong economic numbers projected for 2004.
Real economic growth is expected in the 4 - 4.5% range for 2004, while inflation
is expected to remain in the 2% range through 2004. We expect corporations to
continue translating this strong economic growth into tangible earnings growth.
This earnings strength may sustain current equity price levels and allow for
continued appreciation. As always, the CNI Charter Equity Funds continue to
provide a disciplined investment approach with the constant goal of achieving
superior investment results.
Sincerely,
/s/Brian L. Garbe
Brian L. Garbe
DIRECTOR OF RESEARCH
CITY NATIONAL ASSET MANAGEMENT, INC.
CNI Charter Funds | PAGE 4
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investment adviser's report
MARCH 31, 2004
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FIXED INCOME FUNDS
The six-month period ending March 31, 2004 was a pivotal one for fixed income
investors. There were two major forces affecting the bond market during this
period -- the continuation of foreign central bank purchases of U.S. Government
securities and further signs of strong economic growth along with firmer
employment numbers. The former kept a lid on rates, while the latter added a
little volatility for rising rates. All things being equal, the technical rally
we witnessed in the market due to this global appetite for U.S. bonds should
eventually subside to the fundamentals of a wider economic expansion. Therefore,
we have to be ready for rising rates and falling bond prices -- the theme going
forward for the coming year.
STRATEGIC OUTLOOK FOR BOND FUNDS
Our overall strategy for the Bond Funds will most likely take a more
conservative maturity posture as we focus on the likelihood of rising interest
rates for the remainder of 2004. Our strategic posture for the CNI CHARTER
CORPORATE BOND FUND is to remain more concentrated in the lower quality
investment grade issues versus its benchmark, the Lehman Intermediate Corporate
Index, in order to enhance yield in this economic expansion and low yield
environment. We have a modified barbell approach with heavier concentrations in
the 3 1/2 year and 7 year maturity areas in addition to being very well
diversified amongst a number of issuers. Furthermore, we look to reduce the
average maturity of the Fund as we progress towards the summer and fall. The CNI
CHARTER GOVERNMENT BOND FUND maintains its conservative maturity posture for its
focus remains highest quality and relative safety of principal. The CNI CHARTER
CALIFORNIA TAX EXEMPT BOND FUND continues to emphasize quality, diversification
and maximizing after-tax returns. We strive for the best possible after-tax
returns by constantly analyzing the relative differences between in-state and
out-of-state bond yields. We have become more optimistic on the California
economic landscape by increasing our exposure to the state's General Obligations
and most likely will add to that position with the upcoming record State bond
deals. Currently we are in the mid-cycle of a vigorous economic expansion which
bodes well for continued appreciation potential and attractive yields found
within the CNI CHARTER HIGH YIELD BOND FUND.
STRATEGIC OUTLOOK FOR MONEY MARKET FUNDS
Each of the CNI Charter Money Market Funds experienced difficulties as short
term interest rates remain near their 46 year lows. The Fed policy should remain
stable until the beginning of fall so money market rates will remain near the
lows during this period. We will become more conservative as the prospects for
higher rates increase and will be positioned to take advantage of the rate
increases expected later this year.
Sincerely,
/s/Rodney J. Olea
Rodney J. Olea
DIRECTOR OF FIXED INCOME
CITY NATIONAL ASSET MANAGEMENT, INC.
CNI Charter Funds | PAGE 5
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
LARGE CAP VALUE EQUITY FUND
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------
COMMON STOCK [97.9%]
AEROSPACE & DEFENSE [1.4%]
Lockheed Martin 3,500 $ 160
United Technologies 4,900 423
--------------------------------------------------------
TOTAL AEROSPACE & DEFENSE 583
========================================================
ALUMINUM [1.0%]
Alcoa 12,300 427
========================================================
APPAREL/TEXTILES [0.3%]
Jones Apparel Group 3,600 130
========================================================
AUTOMOTIVE [1.6%]
General Motors 8,250 388
Johnson Controls 5,000 296
--------------------------------------------------------
TOTAL AUTOMOTIVE 684
========================================================
BANKS [12.4%]
Bank of America 13,627 1,104
Bank of New York 11,600 365
Charter One Financial 5,512 195
FleetBoston Financial 2,900 130
JP Morgan Chase 17,905 751
National City 7,300 260
PNC Financial Services Group 5,800 321
Wachovia 14,400 677
Washington Mutual 10,500 449
Wells Fargo 15,730 891
Zions Bancorporation 2,400 137
--------------------------------------------------------
TOTAL BANKS 5,280
========================================================
BUILDING & CONSTRUCTION [1.5%]
Centex 4,800 259
Masco 6,400 195
Vulcan Materials 3,500 166
--------------------------------------------------------
TOTAL BUILDING & CONSTRUCTION 620
========================================================
BUSINESS SERVICES [1.4%]
Cendant* 17,000 415
Fiserv* 4,700 168
--------------------------------------------------------
TOTAL BUSINESS SERVICES 583
========================================================
CABLE/MEDIA [5.0%]
Clear Channel Communications 8,300 352
Comcast, Cl A* 5,700 164
Gannett 1,025 90
Time Warner* 33,000 556
Tribune 4,900 247
Viacom, Cl B 18,105 710
--------------------------------------------------------
TOTAL CABLE/MEDIA 2,119
========================================================
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------
CHEMICALS [0.9%]
Air Products & Chemicals 7,400 $ 371
========================================================
CIRCUIT BOARDS [0.4%]
Jabil Circuit* 1,400 41
Solectron* 22,000 122
--------------------------------------------------------
TOTAL CIRCUIT BOARDS 163
========================================================
COMPUTER STORAGE DEVICES [0.5%]
EMC-Mass* 14,900 203
========================================================
COMPUTER SYSTEM DESIGN & SERVICES [0.5%]
Computer Sciences* 5,000 202
========================================================
COMPUTER & PERIPHERALS [1.2%]
Hewlett-Packard 21,800 498
========================================================
DIVERSIFIED MANUFACTURING [4.2%]
Caterpillar 4,900 387
Danaher 3,500 327
ITT Industries 4,300 328
Textron 2,400 128
Tyco International 22,300 639
--------------------------------------------------------
TOTAL DIVERSIFIED MANUFACTURING 1,809
========================================================
ELECTRICAL PRODUCTS [0.2%]
General Electric 2,700 82
========================================================
ELECTRICAL SERVICES [4.2%]
Constellation Energy Group 6,100 244
Dominion Resources 4,400 283
Entergy 4,600 274
Exelon 5,000 344
FirstEnergy 9,700 379
PPL 3,400 155
Progress Energy 2,200 103
--------------------------------------------------------
TOTAL ELECTRICAL SERVICES 1,782
========================================================
ENTERTAINMENT [1.0%]
Carnival 10,000 449
========================================================
FINANCIAL SERVICES [9.1%]
Capital One Financial 1,900 143
Citigroup 34,386 1,778
Countrywide Credit Industry 7,466 716
Freddie Mac 8,330 492
MBNA 16,910 467
State Street 5,300 276
--------------------------------------------------------
TOTAL FINANCIAL SERVICES 3,872
========================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 6
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
LARGE CAP VALUE EQUITY FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------
FOOD & BEVERAGE [1.4%]
Archer-Daniels-Midland 16,900 $ 285
Coca-Cola Enterprises 12,100 293
--------------------------------------------------------
TOTAL FOOD & BEVERAGE 578
========================================================
GAS/NATURAL GAS [1.1%]
KeySpan 5,600 214
Sempra Energy 8,600 273
--------------------------------------------------------
TOTAL GAS/NATURAL GAS 487
========================================================
HEALTHCARE PRODUCTS & SERVICES [2.6%]
AmerisourceBergen 2,900 159
Cardinal Health 5,950 410
HCA 4,800 195
McKesson 8,000 241
WellPoint Health Networks* 900 102
--------------------------------------------------------
TOTAL HEALTHCARE PRODUCTS & SERVICES 1,107
========================================================
HOTELS & LODGING [0.3%]
Starwood Hotels & Resorts
Worldwide 3,700 150
========================================================
HOUSEHOLD PRODUCTS [0.7%]
Black & Decker 2,000 114
Fortune Brands 2,600 199
--------------------------------------------------------
TOTAL HOUSEHOLD PRODUCTS 313
========================================================
INSURANCE [8.1%]
ACE, ADR 4,600 196
Aetna 3,600 323
American International Group 21,800 1,556
Hartford Financial Services
Group 5,900 376
Principal Financial Group* 5,100 182
Progressive 3,300 289
Prudential Financial 6,900 309
XL Capital, Cl A 2,700 205
--------------------------------------------------------
TOTAL INSURANCE 3,436
========================================================
INVESTMENT BANKER/BROKER DEALER [4.8%]
Goldman Sachs Group 5,200 543
Lehman Brothers Holdings 4,200 348
Merrill Lynch 8,000 476
Morgan Stanley 11,800 676
--------------------------------------------------------
TOTAL INVESTMENT BANKER/BROKER DEALER 2,043
========================================================
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------
MACHINERY [0.7%]
Cummins 3,700 $ 216
Ingersoll-Rand, Cl A 1,300 88
--------------------------------------------------------
TOTAL MACHINERY 304
========================================================
MEDICAL PRODUCTS & SERVICES [0.9%]
Genzyme-General Division* 4,500 212
Health Management Associates,
Cl A 7,200 167
--------------------------------------------------------
TOTAL MEDICAL PRODUCTS & SERVICES 379
========================================================
METALS & MINING [0.8%]
Newmont Mining 7,200 336
========================================================
PETROLEUM & FUEL PRODUCTS [2.3%]
Anadarko Petroleum 2,098 109
Apache 6,006 259
Burlington Resources 3,000 191
Devon Energy 5,200 302
Occidental Petroleum 2,600 120
--------------------------------------------------------
TOTAL PETROLEUM & FUEL PRODUCTS 981
========================================================
PETROLEUM REFINING [8.1%]
ChevronTexaco 7,620 669
ConocoPhillips 6,340 443
Exxon Mobil 49,560 2,061
Marathon Oil 8,500 286
--------------------------------------------------------
TOTAL PETROLEUM REFINING 3,459
========================================================
PREPACKAGING SOFTWARE [0.3%]
Computer Associates
International 4,400 118
========================================================
PRINTING & PUBLISHING [0.3%]
RR Donnelley & Sons 4,500 136
========================================================
RAILROADS [1.7%]
Burlington Northern Santa Fe 8,900 281
Norfolk Southern 7,700 170
Union Pacific 4,500 269
--------------------------------------------------------
TOTAL RAILROADS 720
========================================================
REAL ESTATE INVESTMENT TRUST [0.3%]
Simon Property Group 2,200 129
========================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 7
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statement of net assets
MARCH 31, 2004 (UNAUDITED)
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LARGE CAP VALUE EQUITY FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------
RETAIL [5.7%]
CVS 3,500 $ 124
Darden Restaurants 8,550 212
Federated Department Stores 2,375 128
Home Depot 17,400 650
Lowe's 3,800 213
McDonald's 16,400 469
Staples* 7,500 191
Target 3,800 171
Wendy's International 6,300 256
--------------------------------------------------------
TOTAL RETAIL 2,414
========================================================
SEMI-CONDUCTORS/INSTRUMENTS [2.8%]
Applied Materials* 10,300 220
Intel 11,150 303
Micron Technology* 15,400 258
Novellus Systems* 6,100 194
Texas Instruments 7,500 219
--------------------------------------------------------
TOTAL SEMI-CONDUCTORS/INSTRUMENTS 1,194
========================================================
TELEPHONES & TELECOMMUNICATIONS [5.5%]
Alltel 5,900 294
AT&T 2,700 53
BellSouth 8,200 227
CenturyTel 7,300 201
SBC Communications 31,100 763
Sprint-FON Group 17,300 319
Verizon Communications 13,009 475
--------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATIONS 2,332
========================================================
TRANSPORTATION SERVICES [1.5%]
FedEx 4,700 353
Ryder System 7,200 279
--------------------------------------------------------
TOTAL TRANSPORTATION SERVICES 632
========================================================
WASTE DISPOSAL [1.2%]
Allied Waste Industries* 14,500 193
Waste Management 10,400 314
--------------------------------------------------------
TOTAL WASTE DISPOSAL 507
========================================================
TOTAL COMMON STOCK
(Cost $32,540) 41,612
====================================================
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------
CASH EQUIVALENTS [4.1%]
Fidelity Institutional Domestic
Money Market Portfolio,
Cl I 1,644,172 $ 1,644
SEI Daily Income Trust,
Prime Obligation Fund,
Cl A 78,491 78
--------------------------------------------------------
TOTAL CASH EQUIVALENTS
(Cost $1,722) 1,722
====================================================
TOTAL INVESTMENTS [102.0%]
(Cost $34,262) 43,334
====================================================
OTHER ASSETS AND LIABILITIES [-2.0%]
Investment Advisory Fees Payable (23)
Shareholder Servicing Fees Payable (9)
Administration Fees Payable (3)
Other Assets and Liabilities, Net (826)
--------------------------------------------------------
OTHER ASSETS AND LIABILITIES (861)
====================================================
NET ASSETS:
Paid-in-Capital -- Institutional Class
(unlimited authorization -- $0.01
par value) based on 4,344,563 outstanding
shares of beneficial interest 27,594
Paid-in-Capital -- Class A
(unlimited authorization -- $0.01 par
value) based on 541,100 outstanding
shares of beneficial interest 4,502
Accumulated net realized gain
on investments 1,305
Net unrealized appreciation
on investments 9,072
--------------------------------------------------------
TOTAL NET ASSETS [100.0%] $42,473
========================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($37,771,910 / 4,344,563 shares) $8.69
========================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($4,700,769 / 541,100 shares) $8.69
========================================================
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
CL -- CLASS
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 8
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
LARGE CAP GROWTH EQUITY FUND
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------
COMMON STOCK [97.9%]
AEROSPACE & DEFENSE [1.8%]
Alliant Techsystems* 2,000 $ 109
United Technologies 4,800 414
--------------------------------------------------------
TOTAL AEROSPACE & DEFENSE 523
========================================================
AUTOMOTIVE [1.3%]
Autozone* 2,100 181
Harley-Davidson 3,900 208
--------------------------------------------------------
TOTAL AUTOMOTIVE 389
========================================================
BANKS [1.3%]
Fifth Third Bancorp 3,800 210
North Fork Bancorporation 4,100 174
--------------------------------------------------------
TOTAL BANKS 384
========================================================
BIOMEDICAL RESEARCH & PRODUCTS [0.2%]
Applera - Applied Biosystems
Group 3,600 71
========================================================
BIOTECHNOLOGY [0.7%]
Amgen* 588 34
Chiron* 3,800 167
--------------------------------------------------------
TOTAL BIOTECHNOLOGY 201
========================================================
BUSINESS SERVICES [4.7%]
Deluxe 1,800 72
eBay* 2,500 173
First Data 7,300 308
Fiserv* 3,400 122
H&R Block 5,400 275
Monster Worldwide* 6,600 173
Yahoo!* 5,600 272
--------------------------------------------------------
TOTAL BUSINESS SERVICES 1,395
========================================================
CABLE/MEDIA [0.7%]
Omnicom Group 2,600 209
========================================================
CHEMICALS [0.4%]
Dow Chemical 3,200 129
========================================================
COMMUNICATIONS EQUIPMENT [3.0%]
Cisco Systems* 30,050 707
Rockwell Collins 5,800 183
--------------------------------------------------------
TOTAL COMMUNICATIONS EQUIPMENT 890
========================================================
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------
COMPUTER STORAGE DEVICES [1.1%]
EMC-Mass* 23,300 $ 317
========================================================
COMPUTER & PERIPHERALS [5.7%]
Dell* 16,265 547
IBM 9,400 863
International Game Technology 6,300 283
--------------------------------------------------------
TOTAL COMPUTER & PERIPHERALS 1,693
========================================================
DIVERSIFIED MANUFACTURING [2.7%]
3M 6,000 491
ITT Industries 4,000 306
--------------------------------------------------------
TOTAL DIVERSIFIED MANUFACTURING 797
========================================================
DRUGS [13.0%]
Abbott Laboratories 11,795 485
Eli Lilly 5,930 397
Forest Laboratories* 3,700 265
Johnson & Johnson 18,164 921
Merck 6,255 277
Pfizer 29,708 1,041
Wyeth 12,150 456
--------------------------------------------------------
TOTAL DRUGS 3,842
========================================================
EDUCATIONAL SERVICES [1.3%]
Apollo Group, Cl A* 4,400 379
========================================================
ELECTRICAL PRODUCTS [4.6%]
General Electric 44,175 1,348
========================================================
FINANCIAL SERVICES [2.1%]
Fannie Mae 6,600 491
MBNA 5,200 143
--------------------------------------------------------
TOTAL FINANCIAL SERVICES 634
========================================================
FOOD & BEVERAGE [5.5%]
Coca-Cola 6,500 327
Kraft Foods, Cl A 3,000 96
Pepsi Bottling Group 5,700 170
PepsiCo 8,500 458
Sara Lee 11,800 258
Sysco 8,100 316
--------------------------------------------------------
TOTAL FOOD & BEVERAGE 1,625
========================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 9
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
LARGE CAP GROWTH EQUITY FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------
GAS/NATURAL GAS [0.7%]
Praxair 5,800 $ 215
========================================================
HEALTHCARE PRODUCTS & SERVICES [3.0%]
AmerisourceBergen 1,100 60
Cardinal Health 4,500 310
Express Scripts* 2,300 172
UnitedHealth Group 5,500 354
--------------------------------------------------------
TOTAL HEALTHCARE PRODUCTS & SERVICES 896
========================================================
HOUSEHOLD PRODUCTS [4.8%]
Clorox 1,300 64
Gillette 9,400 367
Kimberly-Clark 2,400 151
Procter & Gamble 6,700 703
Tupperware 7,400 132
--------------------------------------------------------
TOTAL HOUSEHOLD PRODUCTS 1,417
========================================================
INSURANCE [0.4%]
Marsh & McLennan 2,400 111
========================================================
INVESTMENT BANKER/BROKER DEALER [0.3%]
Federated Investors 3,000 94
========================================================
LABORATORY EQUIPMENT [0.8%]
Beckman Coulter 2,600 142
Waters* 2,400 98
--------------------------------------------------------
TOTAL LABORATORY EQUIPMENT 240
========================================================
MEDICAL PRODUCTS & SERVICES [4.9%]
Bard (C.R.) 1,900 186
Boston Scientific* 8,000 339
Guidant 4,100 260
St. Jude Medical* 3,000 216
Stryker 2,600 230
Zimmer Holdings* 3,100 229
--------------------------------------------------------
TOTAL MEDICAL PRODUCTS & SERVICES 1,460
========================================================
METALS & MINING [1.1%]
Freeport-McMoRan Copper
& Gold, Cl B 4,700 184
Newmont Mining 2,800 130
--------------------------------------------------------
TOTAL METALS & MINING 314
========================================================
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------
PETROLEUM & FUEL PRODUCTS [1.1%]
Schlumberger 2,200 $ 141
XTO Energy 6,750 170
--------------------------------------------------------
TOTAL PETROLEUM & FUEL PRODUCTS 311
========================================================
PREPACKAGING SOFTWARE [9.3%]
Adobe Systems 3,800 150
Citrix Systems* 8,200 177
Electronic Arts* 4,200 227
Intuit* 3,600 162
Microsoft 64,030 1,599
Oracle* 37,260 447
--------------------------------------------------------
TOTAL PREPACKAGING SOFTWARE 2,762
========================================================
RETAIL [10.1%]
Best Buy 3,100 160
CVS 3,100 110
Family Dollar Stores 2,500 90
Home Depot 13,900 519
Lowe's 5,900 331
NBTY* 3,500 130
Staples* 5,200 132
Wal-Mart Stores 25,275 1,509
--------------------------------------------------------
TOTAL RETAIL 2,981
========================================================
SEMI-CONDUCTORS/INSTRUMENTS [8.3%]
Applied Materials* 14,900 319
Broadcom, Cl A* 3,300 129
Intel 40,150 1,092
KLA-Tencor* 2,175 110
Maxim Integrated Products 4,500 212
Nvidia* 7,600 201
Texas Instruments 13,800 403
--------------------------------------------------------
TOTAL SEMI-CONDUCTORS/INSTRUMENTS 2,466
========================================================
TELEPHONES & TELECOMMUNICATIONS [1.2%]
Nextel Communications* 6,800 168
Sprint-PCS Group* 19,900 183
--------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATIONS 351
========================================================
TRANSPORTATION SERVICES [1.8%]
United Parcel Service, Cl B 7,400 517
========================================================
TOTAL COMMON STOCK
(Cost $27,366) 28,961
====================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 10
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
LARGE CAP GROWTH EQUITY FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
CASH EQUIVALENTS [3.9%]
Fidelity Institutional Domestic
Money Market Portfolio,
Cl I 1,064,803 $ 1,065
SEI Daily Income Trust,
Prime Obligation Fund,
Cl A 92,195 92
--------------------------------------------------------
TOTAL CASH EQUIVALENTS
(Cost $1,157) 1,157
====================================================
TOTAL INVESTMENTS [101.8%]
(Cost $28,523) 30,118
====================================================
OTHER ASSETS AND LIABILITIES [-1.8%]
Investment Advisory Fees Payable (17)
Shareholder Servicing Fees Payable (6)
Other Assets and Liabilities, Net (516)
--------------------------------------------------------
OTHER ASSETS AND LIABILITIES (539)
====================================================
NET ASSETS:
Paid-in-Capital -- Institutional Class
(unlimited authorization -- $0.01 par
value) based on 3,724,253 outstanding
shares of beneficial interest 29,048
Paid-in-Capital -- Class A
(unlimited authorization -- $0.01 par
value) based on 518,596 outstanding
shares of beneficial interest 3,704
Distribution in excess of net
investment income (4)
Accumulated net realized loss
on investments (4,764)
Net unrealized appreciation
on investments 1,595
--------------------------------------------------------
TOTAL NET ASSETS [100.0%] $29,579
========================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($25,990,773 / 3,724,253 shares) $6.98
========================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($3,588,348 / 518,596 shares) $6.92
========================================================
* NON-INCOME PRODUCING SECURITY
CL -- CLASS
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 11
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
RCB SMALL CAP VALUE FUND
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------
COMMON STOCK [82.9%]
BROADCASTING, NEWSPAPERS & ADVERTISING [11.4%]
Advo 31,100 $ 1,002
Fisher Communications* 21,700 1,058
Grey Global Group 1,000 690
SBS Broadcasting* 36,500 1,308
--------------------------------------------------------
TOTAL BROADCASTING, NEWSPAPERS
& ADVERTISING 4,058
========================================================
BUSINESS SERVICES [10.4%]
Arbitron* 15,150 610
Coinstar* 66,360 1,053
Deluxe 16,850 676
RH Donnelley* 29,400 1,373
--------------------------------------------------------
TOTAL BUSINESS SERVICES 3,712
========================================================
CHEMICALS [1.9%]
Compass Minerals International 41,500 680
========================================================
COMPUTER SYSTEM DESIGN & SERVICES [2.0%]
Reynolds & Reynolds, Cl A 25,200 716
========================================================
CONSUMER PRODUCTS & SERVICES [1.9%]
Central Garden & Pet* 18,550 668
========================================================
CONSUMER SERVICES [3.2%]
Angelica 50,000 1,142
========================================================
DATA PROCESSING [1.5%]
Certegy 15,800 553
========================================================
DIVERSIFIED MANUFACTURING [2.0%]
EnPro Industries* 37,400 708
========================================================
ELECTRICAL PRODUCTS [4.7%]
GrafTech International* 45,900 686
Littelfuse* 27,100 1,008
--------------------------------------------------------
TOTAL ELECTRICAL PRODUCTS 1,694
========================================================
ENTERTAINMENT [4.1%]
Intrawest 49,100 835
Six Flags* 80,200 630
--------------------------------------------------------
TOTAL ENTERTAINMENT 1,465
========================================================
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------
FOOD & BEVERAGE [3.8%]
Ralcorp Holdings* 44,500 $ 1,354
========================================================
INSURANCE [13.3%]
Alleghany* 7,081 1,751
Conseco* 54,700 1,267
Fairfax Financial Holdings 3,300 512
White Mountains Insurance
Group 2,300 1,206
--------------------------------------------------------
TOTAL INSURANCE 4,736
========================================================
MACHINERY [4.9%]
Ametek 20,900 536
Franklin Electric 9,700 618
IDEX 13,600 591
--------------------------------------------------------
TOTAL MACHINERY 1,745
========================================================
MEDICAL PRODUCTS & SERVICES [2.3%]
VCA Antech* 22,800 812
========================================================
PAPER & PAPER PRODUCTS [1.9%]
Rayonier 15,309 669
========================================================
RAILROADS [1.9%]
Kansas City Southern* 47,740 664
========================================================
REAL ESTATE INVESTMENT TRUST [4.0%]
Annaly Mortgage Management 30,000 587
Price Legacy* 48,409 825
--------------------------------------------------------
TOTAL REAL ESTATE INVESTMENT TRUST 1,412
========================================================
RETAIL [7.7%]
IHOP 17,280 595
Smart & Final* 47,400 544
Triarc, Cl A 54,900 601
Whitehall Jewellers* 111,000 1,014
--------------------------------------------------------
TOTAL RETAIL 2,754
========================================================
TOTAL COMMON STOCK
(Cost $22,051) 29,542
====================================================
- -------------------------------------------------------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 12
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
RCB SMALL CAP VALUE FUND (CONCLUDED)
DESCRIPTION SHARES/FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
PREFERRED STOCK [2.5%]
ENTERTAINMENT [1.8%]
Six Flags 26,500 $ 640
--------------------------------------------------------
REAL ESTATE INVESTMENT TRUST [0.7%]
Price Legacy 15,000 243
========================================================
TOTAL PREFERRED STOCK
(Cost $783) 883
====================================================
REPURCHASE AGREEMENT [15.2%]
Morgan Stanley,
0.750%, dated 03/31/04,
repurchased on 04/01/04,
repurchase price $5,423,601
(collateralized by U.S. Treasury
Bills, par value $4,707,471, 1.280% (A),
07/15/12; with total market
value $5,532,082) $ 5,423 5,423
--------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost $5,423) 5,423
====================================================
TOTAL INVESTMENTS [100.6%]
(Cost $28,257) 35,848
====================================================
OTHER ASSETS AND LIABILITIES [-0.6%]
Investment Advisory Fees Payable (25)
Shareholder Servicing Fees Payable (7)
Administration Fees Payable (3)
Other Assets and Liabilities, Net (175)
--------------------------------------------------------
OTHER ASSETS AND LIABILITIES (210)
====================================================
DESCRIPTION VALUE (000)
- -------------------------------------------------------------
NET ASSETS:
Paid-in-Capital -- Institutional Class
(unlimited authorization -- $$0.01 par
value) based on 283,177 outstanding
shares of beneficial interest $ 5,252
Paid-in-Capital -- Class A
(unlimited authorization -- $0.01 par
value) based on 245,605 outstanding
shares of beneficial interest 5,496
Paid-in-Capital -- Class R
(unlimited authorization -- $0.01 par
value) based on 839,768 outstanding
shares of beneficial interest 15,102
Undistributed net investment income 44
Accumulated net realized gain
on investments 2,153
Net unrealized appreciation
on investments 7,591
--------------------------------------------------------
TOTAL NET ASSETS [100.0%] $35,638
========================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($7,411,311 / 283,177 shares) $26.17
========================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($6,394,057 / 245,605 shares) $26.03
========================================================
Net Asset Value and Redemption
Price Per Share -- Class R
($21,832,575 / 839,768 shares) $26.00
========================================================
Maximum Offering Price Per Share --
Class R Shares ($26.00 / 96.50%) $26.94
========================================================
* NON-INCOME PRODUCING SECURITY
(A) THE RATE REPORTED IS THE EFFECTIVE YIELD AT THE TIME OF PURCHASE.
CL -- CLASS
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 13
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
TECHNOLOGY GROWTH FUND
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------
COMMON STOCK [97.7%]
AEROSPACE & DEFENSE [1.3%]
General Dynamics 175 $ 15
L-3 Communications
Holdings* 300 18
--------------------------------------------------------
TOTAL AEROSPACE & DEFENSE 33
========================================================
BIOMEDICAL RESEARCH & PRODUCTS [0.6%]
Applera - Applied Biosystems
Group 700 14
========================================================
CIRCUIT BOARDS [3.3%]
Benchmark Electronics* 300 10
Flextronics International* 950 16
Jabil Circuit* 850 25
Sanmina-SCI* 1,150 13
Solectron* 1,800 10
TTM Technologies* 750 9
--------------------------------------------------------
TOTAL CIRCUIT BOARDS 83
========================================================
COMMUNICATIONS EQUIPMENT [13.6%]
Cisco Systems* 5,305 125
Corning* 1,600 18
Foundry Networks* 700 12
Harris 500 24
Inter-Tel 250 8
Juniper Networks* 500 13
Lucent Technologies* 4,500 18
Motorola 2,400 42
Nokia, ADR 950 19
Qualcomm 800 53
Utstarcom* 350 10
--------------------------------------------------------
TOTAL COMMUNICATIONS EQUIPMENT 342
========================================================
COMPUTER RELATED SERVICES [3.3%]
Affiliated Computer Services* 225 12
Anteon International* 400 11
CACI International, Cl A* 300 13
Check Point Software
Technologies* 450 10
Cognizant Technology Solutions* 300 14
Syntel 450 12
WebEx Communications* 400 12
--------------------------------------------------------
TOTAL COMPUTER RELATED SERVICES 84
========================================================
COMPUTER STORAGE DEVICES [5.1%]
Advanced Digital Information* 700 8
EMC-Mass* 4,505 61
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------
Hutchinson Technology* 350 $ 10
Lexar Media* 600 10
Sandisk* 500 14
Storage Technology* 400 11
Western Digital* 1,200 14
--------------------------------------------------------
TOTAL COMPUTER STORAGE DEVICES 128
========================================================
COMPUTER SYSTEM DESIGN & SERVICES [6.6%]
Autodesk 500 16
Avid Technology* 200 9
Black Box 250 13
Cerner* 200 9
Computer Sciences* 300 12
Intergraph* 325 8
National Instruments 450 14
NetScreen Technologies* 600 22
Reynolds & Reynolds, Cl A 300 9
Sun Microsystems* 3,875 16
SYKES Enterprises* 1,500 9
Synopsys* 600 17
Unisys* 800 12
--------------------------------------------------------
TOTAL COMPUTER SYSTEM DESIGN & SERVICES 166
========================================================
COMPUTER & PERIPHERALS [16.0%]
3Com* 2,400 17
Dell* 3,275 110
Drexler Technology* 725 10
Hewlett-Packard 3,823 87
IBM 1,400 129
Imation 500 19
Network Appliance* 575 12
Scansource* 400 19
--------------------------------------------------------
TOTAL COMPUTER & PERIPHERALS 403
========================================================
DATA PROCESSING [1.6%]
Acxiom* 500 11
CSG Systems International* 650 11
Electronic Data Systems 450 9
Perot Systems, Cl A* 600 8
--------------------------------------------------------
TOTAL DATA PROCESSING 39
========================================================
ELECTRICAL PRODUCTS [0.4%]
Invision Technologies* 200 10
========================================================
PREPACKAGING SOFTWARE [21.3%]
Adobe Systems 650 26
Altiris* 500 14
Ascential Software* 525 12
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 14
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
TECHNOLOGY GROWTH FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------
Citrix Systems* 1,125 $ 24
Computer Associates
International 500 13
Concur Technologies* 1,050 12
Electronic Arts* 520 28
Hyperion Solutions* 300 13
Intuit* 575 26
Microsoft 8,050 201
NetIQ* 1,300 18
Oracle* 5,815 70
Peoplesoft* 900 17
Progress Software* 600 14
Red Hat* 675 15
Siebel Systems* 900 10
Take-Two Interactive Software* 325 12
Veritas Software* 375 10
--------------------------------------------------------
TOTAL PREPACKAGING SOFTWARE 535
========================================================
SEMI-CONDUCTORS/INSTRUMENTS [23.8%]
Amkor Technology* 700 10
Analog Devices 600 29
Applied Materials* 500 11
Broadcom, Cl A* 275 11
Cabot Microelectronics* 225 10
DSP Group* 475 12
ESS Technology* 850 12
Fairchild Semiconductor
International, Cl A* 650 16
II-VI* 450 11
Intel 4,950 135
Intersil, Cl A 930 21
Linear Technology 375 14
LSI Logic* 1,617 15
Maxim Integrated Products 900 42
MEMC Electronic Materials* 1,400 13
Microchip Technology 500 13
Micron Technology* 1,400 23
National Semiconductor* 600 27
Nvidia* 750 20
Omnivision Technologies* 400 11
QLogic* 400 13
Rambus* 400 11
RF Micro Devices* 1,150 10
Silicon Laboratories* 200 11
Taiwan Semiconductor
Manufacturing, ADR* 1,000 10
Texas Instruments 2,400 70
Xilinx* 300 11
Zoran* 400 7
--------------------------------------------------------
TOTAL SEMI-CONDUCTORS/INSTRUMENTS 599
========================================================
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------
TELEPHONES & TELECOMMUNICATIONS [0.8%]
Adtran 375 $ 11
J2 Global Communications* 450 10
--------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATIONS 21
========================================================
TOTAL COMMON STOCK
(Cost $2,520) 2,457
====================================================
CASH EQUIVALENTS [3.7%]
Fidelity Institutional Domestic
Money Market Portfolio,
Cl I 82,758 83
SEI Daily Income Trust,
Prime Obligation Fund, Cl A 10,014 10
--------------------------------------------------------
TOTAL CASH EQUIVALENTS
(Cost $93) 93
====================================================
TOTAL INVESTMENTS [101.4%]
(Cost $2,613) 2,550
====================================================
OTHER ASSETS AND LIABILITIES [-1.4%]
Investment Advisory Fees Payable (2)
Other Assets and Liabilities, Net (33)
--------------------------------------------------------
OTHER ASSETS AND LIABILITIES (35)
====================================================
NET ASSETS:
Paid-in-Capital -- Institutional Class
(unlimited authorization -- $0.01 par
value) based on 283,622 outstanding
shares of beneficial interest 2,423
Paid-in-Capital -- Class A
(unlimited authorization -- $0.01 par
value) based on 365,069 outstanding
shares of beneficial interest 1,689
Accumulated net investment loss (11)
Accumulated net realized loss
on investments (1,523)
Net unrealized depreciation
on investments (63)
--------------------------------------------------------
TOTAL NET ASSETS [100.0%] $ 2,515
========================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($1,105,811 / 283,622 shares) $3.90
========================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($1,409,554 / 365,069 shares) $3.86
========================================================
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
CL -- CLASS
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 15
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CORPORATE BOND FUND
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
CORPORATE BONDS [87.4%]
AIR TRANSPORTATION [0.8%]
Federal Express, Ser A2
7.890%, 09/23/08 $ 330 $ 364
========================================================
AUTOMOTIVE [3.2%]
DaimlerChrysler N.A. Holdings
4.750%, 01/15/08 435 454
Ford Motor Credit
7.250%, 10/25/11 400 433
General Motors Acceptance
7.750%, 01/19/10 500 567
--------------------------------------------------------
TOTAL AUTOMOTIVE 1,454
========================================================
BANKS [12.5%]
Bank of America
7.500%, 09/15/06 500 561
7.125%, 09/15/06 500 556
Bankers Trust
7.250%, 10/15/11 500 589
Deutsche Bank
7.500%, 04/25/09 500 592
Fleet National Bank
8.625%, 02/15/05 100 106
JP Morgan Chase
5.625%, 08/15/06 750 810
US Bancorp
6.875%, 09/15/07 350 402
Wachovia
7.125%, 10/15/06 100 112
6.875%, 09/15/05 500 539
Washington Mutual
4.625%, 04/01/14 460 451
Wells Fargo
7.250%, 08/24/05 250 269
Wells Fargo Financial
6.125%, 02/15/06 550 594
Wells Fargo, Ser F, MTN
6.500%, 06/01/05 125 132
--------------------------------------------------------
TOTAL BANKS 5,713
========================================================
BEAUTY PRODUCTS [2.1%]
Avon Products
7.150%, 11/15/09 800 944
========================================================
BROADCASTING, NEWSPAPERS & ADVERTISING [1.0%]
Clear Channel Communications
4.900%, 05/15/15 450 440
========================================================
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
CABLE/MEDIA [7.6%]
AOL Time Warner
6.750%, 04/15/11 $ 395 $ 448
Comcast Cable Communications
Holdings
8.375%, 03/15/13 400 497
Cox Communications
4.625%, 06/01/13 450 439
News America Holdings
9.250%, 02/01/13 450 591
Viacom
7.750%, 06/01/05 1,000 1,069
Walt Disney
5.500%, 12/29/06 410 440
--------------------------------------------------------
TOTAL CABLE/MEDIA 3,484
========================================================
CHEMICALS [0.5%]
Praxair
6.625%, 10/15/07 200 227
========================================================
ELECTRICAL PRODUCTS [0.2%]
Emerson Electric
6.300%, 11/01/05 100 107
========================================================
ELECTRICAL SERVICES [6.5%]
American Electric Power
5.250%, 06/01/15 435 443
Entergy Mississippi
6.450%, 04/01/08 1,000 1,016
Iowa Electric Light & Power
6.000%, 10/01/08 200 220
Wisconsin Power & Light, Ser Y
7.600%, 07/01/05 100 107
WPS Resources
7.000%, 11/01/09 1,000 1,166
--------------------------------------------------------
TOTAL ELECTRICAL SERVICES 2,952
========================================================
FINANCIAL SERVICES [8.2%]
Countrywide Home Loans
5.625%, 07/15/09 155 170
2.875%, 02/15/07 900 907
Countrywide Home Loans,
Ser L, MTN
4.000%, 03/22/11 875 866
General Electric Capital,
Ser A, MTN
6.875%, 11/15/10 250 293
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 16
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CORPORATE BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Heller Financial
6.375%, 03/15/06 $1,000 $ 1,094
MBNA
4.625%, 09/15/08 410 428
--------------------------------------------------------
TOTAL FINANCIAL SERVICES 3,758
========================================================
FOOD & BEVERAGE [0.9%]
General Mills
2.625%, 10/24/06 410 411
========================================================
FOREIGN GOVERNMENTS [1.0%]
United Mexican States
5.875%, 01/15/14 450 467
========================================================
INSURANCE [7.8%]
Aflac
6.500%, 04/15/09 1,000 1,140
Allstate
7.200%, 12/01/09 1,015 1,213
AXA Financial
7.750%, 08/01/10 1,000 1,202
--------------------------------------------------------
TOTAL INSURANCE 3,555
========================================================
INVESTMENT BANKER/BROKER DEALER [8.9%]
Goldman Sachs Group
5.150%, 01/15/14 1,000 1,027
Jefferies Group
5.500%, 03/15/16 200 205
Legg Mason
6.500%, 02/15/06 950 1,023
Lehman Brothers Holdings
8.250%, 06/15/07 1,100 1,287
Merrill Lynch
4.000%, 11/15/07 500 520
--------------------------------------------------------
TOTAL INVESTMENT BANKER/BROKER DEALER 4,062
========================================================
MACHINERY [2.3%]
Caterpillar
9.000%, 04/15/06 620 708
Caterpillar Finance, Ser F, MTN
4.690%, 04/25/05 310 321
--------------------------------------------------------
TOTAL MACHINERY 1,029
========================================================
PETROLEUM & FUEL PRODUCTS [5.7%]
Anadarko Petroleum
5.375%, 03/01/07 410 443
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
ChevronTexaco
8.625%, 06/30/10 $ 200 $ 257
ConocoPhillips
6.375%, 03/30/09 305 347
Duke Capital
5.500%, 03/01/14 625 632
Union Oil of California, Ser C, MTN
7.900%, 04/18/08 800 919
--------------------------------------------------------
TOTAL PETROLEUM & FUEL PRODUCTS 2,598
========================================================
REAL ESTATE INVESTMENT TRUST [5.0%]
Equity Residential Properties
7.250%, 06/15/05 1,000 1,063
Kimco Realty, MTN
6.960%, 07/16/07 1,000 1,136
Kimco Realty, Ser B, MTN
7.860%, 11/01/07 67 79
--------------------------------------------------------
TOTAL REAL ESTATE INVESTMENT TRUST 2,278
========================================================
RETAIL [5.2%]
Kohl's
6.300%, 03/01/11 1,000 1,131
Kroger
5.500%, 02/01/13 450 473
McDonald's, Ser E, MTN
4.240%, 12/13/06 750 775
--------------------------------------------------------
TOTAL RETAIL 2,379
========================================================
TELEPHONES & TELECOMMUNICATIONS [7.1%]
AT&T Wireless Services
8.125%, 05/01/12 400 487
Deutsche Telekom International
Finance
5.250%, 07/22/13 435 453
GTE Florida, Ser D
6.250%, 11/15/05 200 214
New York Telephone
6.500%, 03/01/05 50 52
Pacific Bell
6.250%, 03/01/05 200 209
Southwestern Bell
6.625%, 07/15/07 750 840
Sprint Capital
8.375%, 03/15/12 350 426
Verizon Communications
6.360%, 04/15/06 500 541
--------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATIONS 3,222
========================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 17
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CORPORATE BOND FUND (CONCLUDED)
DESCRIPTION FACE AMOUNT (000)/SHARES VALUE (000)
- --------------------------------------------------------------------------------
WASTE DISPOSAL [0.9%]
Waste Management
6.875%, 05/15/09 $ 375 $ 428
========================================================
TOTAL CORPORATE BONDS
(Cost $37,932) 39,872
====================================================
MORTGAGE RELATED [3.8%]
Residential Asset Mortgage Products,
Ser 2003-RS5, Cl AI4
3.700%, 09/25/31 770 777
Residential Asset Mortgage Products,
Ser 2003-RS6, Cl AI3
3.080%, 12/25/28 975 981
--------------------------------------------------------
TOTAL MORTGAGE RELATED
(Cost $1,735) 1,758
====================================================
ASSET-BACKED SECURITIES [3.8%]
Capital Auto Receivables Asset Trust,
Ser 2003-2, Cl A4A
1.960%, 01/15/09 975 966
Capital Auto Receivables Asset Trust,
Ser 2004-1, Cl A4
2.640%, 11/17/08 750 757
--------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(Cost $1,724) 1,723
====================================================
U.S. TREASURY OBLIGATION [1.0%]
U.S. Treasury Note
4.250%, 11/15/13 445 460
--------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATION
(Cost $463) 460
====================================================
CASH EQUIVALENT [3.0%]
Fidelity Institutional Domestic
Money Market Portfolio,
Cl I 1,348,536 1,349
--------------------------------------------------------
TOTAL CASH EQUIVALENT
(Cost $1,349) 1,349
====================================================
TOTAL INVESTMENTS [99.0%]
(Cost $43,203) 45,162
====================================================
DESCRIPTION VALUE (000)
- -------------------------------------------------------------
OTHER ASSETS AND LIABILITIES [1.0%]
Investment Advisory Fees Payable $ (15)
Shareholder Servicing Fees Payable (9)
Administration Fees Payable (3)
Other Assets and Liabilities, Net 497
--------------------------------------------------------
OTHER ASSETS AND LIABILITIES 470
====================================================
NET ASSETS:
Paid-in-Capital -- Institutional Class
(unlimited authorization -- $0.01 par
value) based on 4,119,201 outstanding
shares of beneficial interest 42,360
Paid-in-Capital -- Class A
(unlimited authorization -- $0.01 par
value) based on 95,936 outstanding
shares of beneficial interest 1,007
Undistributed net investment income 1
Accumulated net realized gain
on investments 305
Net unrealized appreciation
on investments 1,959
--------------------------------------------------------
TOTAL NET ASSETS [100.0%] $45,632
========================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($44,593,067 / 4,119,201 shares) $10.83
========================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($1,039,154 / 95,936 shares) $10.83
========================================================
CL -- CLASS
MTN -- MEDIUM TERM NOTE
SER -- SERIES
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 18
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
GOVERNMENT BOND FUND
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS [79.2%]
FFCB
5.120%, 04/26/05 $ 400 $ 417
FHLB
7.250%, 05/13/05 1,400 1,493
6.500%, 11/15/05 100 108
5.570%, 04/07/04 100 100
4.875%, 08/15/05 500 524
2.250%, 12/15/05 7,635 7,713
2.000%, 12/02/05 1,000 1,003
FHLMC
6.990%, 07/26/06 150 167
4.250%, 06/15/05 1,550 1,605
FNMA
4.000%, 12/15/08 2,000 2,037
1.410%, 06/28/04 (A) 350 350
--------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $15,325) 15,517
========================================================
U.S. TREASURY OBLIGATIONS [10.5%]
U.S. Treasury Notes
4.250%, 11/15/13 1,500 1,552
2.000%, 05/15/06 500 504
--------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $2,001) 2,056
========================================================
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS [8.2%]
FHLMC, Ser 2544, Cl PG
4.500%, 08/15/16 45 46
FHLMC, Ser 2670, Cl QP
4.000%, 02/15/27 1,000 1,007
FNMA, Ser 1993-225, Cl UB
6.500%, 12/25/23 50 51
FNMA, Ser 2003-34, Cl GJ
4.000%, 02/25/33 504 504
--------------------------------------------------------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS
(Cost $1,591) 1,608
========================================================
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------------------------
CASH EQUIVALENT [1.3%]
Fidelity Institutional Domestic
Money Market Portfolio,
Cl I 250,464 $ 250
--------------------------------------------------------
TOTAL CASH EQUIVALENT
(Cost $250) 250
====================================================
TOTAL INVESTMENTS [99.2%]
(Cost $19,167) 19,431
====================================================
OTHER ASSETS AND LIABILITIES [0.8%]
Investment Advisory Fees Payable (6)
Shareholder Servicing Fees Payable (4)
Administration Fees Payable (1)
Other Assets and Liabilities, Net 162
--------------------------------------------------------
OTHER ASSETS AND LIABILITIES 151
====================================================
NET ASSETS:
Paid-in-Capital -- Institutional Class
(unlimited authorization -- $0.01 par
value) based on 1,811,501 outstanding
shares of beneficial interest 19,059
Paid-in-Capital -- Class A
(unlimited authorization -- $0.01 par
value) based on 10,575 outstanding
shares of beneficial interest 115
Accumulated net realized gain
on investments 144
Net unrealized appreciation
on investments 264
--------------------------------------------------------
TOTAL NET ASSETS [100.0%] $19,582
========================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($19,467,976 / 1,811,501 shares) $10.75
========================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($113,950 / 10,575 shares) $10.78
========================================================
(A) FLOATING RATE SECURITY -- THE RATE REPORTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON MARCH 31, 2004. THE DATE SHOWN IS THE EARLIER OF
THE RESET DATE OR THE DEMAND DATE.
CL -- CLASS
FFCB -- FEDERAL FARM CREDIT BANK
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
SER -- SERIES
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 19
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT BOND FUND
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
MUNICIPAL BONDS [97.0%]
ALABAMA [1.5%]
Jefferson County, Sewer Authority,
Ser B-8, RB, FSA
5.250%, 02/01/14 $250 $ 279
========================================================
CALIFORNIA [73.9%]
Acalanes, Union High School
District Authority, Ser A, GO, FSA
Callable 08/01/16 @ 100
4.000%, 08/01/17 200 201
Anaheim, Public Finance Authority,
Convention Center Project,
Ser A, RB, AMBAC
5.500%, 08/01/12 150 174
Anaheim, Public Finance Authority,
Electric System Distribution
Facilities, RB, AMBAC
Mandatory Put 10/01/05 @ 100
4.625%, 10/01/27 230 241
Berkeley, Ser C, GO, MBIA
Callable 09/01/05 @ 102
5.000%, 09/01/10 95 102
Beverly Hills, Unified School
District Authority, Ser B, GO
Callable 06/01/08 @ 101
4.700%, 06/01/13 50 53
Big Bear Lake, Water Authority,
RB, MBIA
4.900%, 04/01/07 225 246
California State, Department of
Water Resource Center,
Ser A, RB, MBIA
5.000%, 05/01/07 200 219
California State, Department of
Water Resource Center, Water
Systems Project, Ser T, RB
Callable 12/01/08 @ 101
5.125%, 12/01/12 200 222
California State, Department of
Water Resource Center, Water
Systems Project, Ser Y, RB, FGIC
5.000%, 12/01/07 250 279
California State, Educational
Facilities Authority, Pooled
College & University Projects,
Ser A, RB
4.300%, 04/01/09 100 107
California State, Educational
Facilities Authority, University
of San Francisco, RB, MBIA
6.000%, 10/01/08 300 350
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
California State, GO
5.750%, 10/01/08 $100 $ 113
California State, GO
Pre-Refunded @ 101 (A)
5.750%, 03/01/05 100 105
California State, Infrastructure
& Economic Development,
Clean Water Fund, RB
5.000%, 10/01/07 260 289
California State, Public Works
Board Lease, Franchise Tax
Board Project, Ser A, RB
4.500%, 09/01/08 150 161
Coachella Valley, Water District
Authority, Flood Control
Project, COP, AMBAC
Callable 10/01/07 @ 102
5.000%, 10/01/11 250 275
Culver City, Redevelopment
Finance Authority, TA,
AMBAC
5.500%, 11/01/14 75 87
East Bay-Delta, Housing &
Finance Authority, Pass
Thru-Lease Purchase Program,
Ser A, RB, MBIA
4.250%, 06/01/05 400 415
Evergreen School District,
Ser C, GO, FGIC
Callable 09/01/08 @ 101
5.250%, 09/01/13 200 223
Foothill, Eastern Corridor
Toll Road, RB, MBIA
4.600%, 01/15/09 150 165
Fresno, Power Finance
Authority, RB, AMBAC
4.400%, 08/01/09 100 110
Hemet, Unified School
District, Nutrition Center
Project, COP, FSA
Callable 04/01/07 @ 102
5.750%, 04/01/17 250 279
Imperial District, Public
Electric, RB
4.250%, 11/01/06 250 268
Kings River, Conservation
District, Ser F, RB
4.400%, 01/01/09 100 109
Lancaster, Financing Authority,
TA, MBIA
5.000%, 02/01/12 200 224
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 20
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
Livermore Valley, Joint Union
School District, Election of
1999 Project, GO, MBIA
Callable 08/01/12 @ 100
5.000%, 08/01/16 $200 $ 218
Los Angeles County, Public Works
Finance Authority, Ser B, RB,
MBIA
Callable 09/01/06 @ 102
5.250%, 09/01/14 200 220
Los Angeles County, Transportation
Commission Sales Tax Authority,
Property Second Senior Project,
Ser A, RB, MBIA
6.500%, 07/01/07 200 230
Los Angeles, Harbour Development
Project, Ser C, RB
Callable 11/01/06 @ 101
5.125%, 11/01/11 180 196
Los Angeles, Parking Authority,
Ser A, RB, AMBAC
4.100%, 05/01/08 100 108
Los Angeles, Police Emergency
Special Tax, RB
5.000%, 09/01/07 300 333
Los Angeles, Sanitation Equipment
Authority, Ser A, RB, MBIA
4.000%, 02/01/07 100 107
Los Angeles, Ser A, GO
5.000%, 04/01/10 200 226
4.000%, 09/01/11 200 213
Los Angeles, Ser A, GO, MBIA
3.000%, 09/01/05 250 257
M-S-R Public Power, Ser G, RB,
MBIA
Callable 07/01/07 @ 101
5.250%, 07/01/11 100 110
Modesto, Irrigation District
Financing Authority, Domestic
Water Project, Ser D, RB, AMBAC
Callable 09/01/08 @ 101
5.000%, 09/01/12 100 111
Oakland, Coliseum Area
Redevelopment Project, TA
3.900%, 09/01/11 300 307
Oceanside, Unified School District
Authority, Election of 2000
Project, Ser B, GO, MBIA
6.000%, 08/01/07 300 341
Orange County, Recovery
Certificate Authority,
Ser A, COP, MBIA
6.000%, 07/01/06 250 275
6.000%, 07/01/07 200 227
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
Pasadena, Electric Improvements
Authority, RB, FSA
4.500%, 06/01/07 $160 $ 174
Pinole, Redevelopment Agency
Project, TA, FSA
Callable 08/01/09 @ 101
5.250%, 08/01/14 100 112
Poway, Redevelopment Agency
Project, TA, AMBAC
Callable 12/15/11 @ 101
5.500%, 12/15/14 150 172
Redlands, Recovery Certificate
Authority, COP, AMBAC
5.000%, 09/01/11 110 124
Riverside County, Redevelopment
Agency Project, Jurupa Valley
Project, TA, AMBAC
4.250%, 10/01/11 200 216
Riverside, Electric Authority, RB, FSA
Callable 10/01/11 @ 101
5.000%, 10/01/12 250 281
Riverside, Water Authority, RB
Callable 10/01/08 @ 101
5.375%, 10/01/12 100 113
Sacramento, Municipal Utilities
Distribution Authority,
Ser I, RB, MBIA
Callable 04/22/04 @ 102
5.500%, 01/01/05 15 15
Saddleback, Community College
District, 1996 Capital Improvement
Financing Project, COP, MBIA
Callable 06/01/06 @ 102
5.500%, 06/01/15 500 547
San Bernardino County,
Central School District,
Ser B, GO, FSA
7.000%, 08/01/07 325 380
San Diego County, Information
Technology Systems,
COP, AMBAC
5.000%, 06/01/08 100 112
San Diego County, North County
Regional Center for
Expansion, COP, AMBAC
Callable 11/15/06 @ 102
5.250%, 11/15/14 100 110
San Francisco (City & County),
Building Authority, Department
of General Services & Leasing,
Ser A, RB
5.000%, 10/01/13 400 435
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 21
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
San Francisco (City & County),
Public Utility Authority,
Ser A, RB, MBIA
Callable 11/01/06 @ 101.5
5.000%, 11/01/17 $375 $ 404
San Jose, Redevelopment Authority,
Merged Area Redevelopment
Project, TA, MBIA
6.000%, 08/01/07 250 284
San Juan, Unified School District,
COP, MBIA
Callable 06/01/07 @ 102
5.000%, 06/01/08 250 278
San Mateo County, Transit District
Authority, Ser A, RB, MBIA
Callable 06/01/08 @ 101
5.000%, 06/01/14 400 439
Sanger, Public Financing Authority,
Utilities Systems Financing Project,
Ser A, RB, AMBAC
Pre-Refunded @ 102 (A)
5.700%, 01/01/06 325 355
Santa Monica, Public Safety
Facilities Project, RB
Callable 07/01/09 @ 101
5.250%, 07/01/14 100 112
Turlock, Irrigation District,
Ser A, RB, MBIA
4.000%, 01/01/09 110 118
Vallejo City, University School
District, Election 1997 Project,
GO, FGIC, ETM
7.500%, 08/01/10 275 353
Wiseburn, School District,
Ser A, GO, FGIC
4.200%, 08/01/07 125 135
--------------------------------------------------------
TOTAL CALIFORNIA 13,765
========================================================
FLORIDA [3.6%]
Dade County, Water & Sewer
System, RB, FGIC
Callable 10/01/07 @ 102
5.375%, 10/01/16 215 239
Miami-Dade County, Expressway
Authority, RB, FGIC
Pre-Refunded @ 101 (A)
6.375%, 07/01/10 350 425
--------------------------------------------------------
TOTAL FLORIDA 664
========================================================
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
GEORGIA [1.2%]
Georgia State, Metropolitan Atlanta
Rapid Transportation Authority,
Second Indenture Project,
Ser A, RB, MBIA
6.250%, 07/01/07 $200 $ 227
========================================================
MICHIGAN [1.5%]
Michigan State, Building Authority,
Facilities Project, Ser II, RB
Pre-Refunded @ 101 (A)
5.000%, 10/15/07 250 279
========================================================
NEW JERSEY [1.8%]
New Jersey State, Transportation
Authority, COP, AMBAC
5.000%, 09/15/06 300 324
========================================================
NEW YORK [5.6%]
New York City, Ser D, GO, FGIC
6.000%, 08/01/08 250 288
New York City, Transitional Finance
Authority, Future Tax Secured
Project, Ser B, RB, MBIA
Callable 05/15/08 @ 101
4.600%, 11/15/12 400 423
New York State, Dormitory
Authority, Mount Sinai School
of Medicine, RB, MBIA
5.000%, 07/01/08 300 332
--------------------------------------------------------
TOTAL NEW YORK 1,043
========================================================
NEVADA [1.1%]
Clark County, Ser B, GO
Callable 12/01/10 @ 101
6.000%, 12/01/12 175 206
========================================================
WASHINGTON [2.3%]
King County, School District
No. 414, GO, MBIA
Callable 12/01/12 @ 100
5.750%, 12/01/14 225 263
Klickitat County, Public Utility
District No. 001, Ser B, RB
Callable 12/01/11 @ 100
5.250%, 12/01/14 150 169
--------------------------------------------------------
TOTAL WASHINGTON 432
========================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 22
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT BOND FUND (CONCLUDED)
DESCRIPTION FACE AMOUNT (000)/SHARES VALUE (000)
- -------------------------------------------------------------
PUERTO RICO [4.5%]
Puerto Rico, Electric Power
Authority, Power Project,
Ser CC, RB, MBIA
Callable 07/01/07 @ 101.5
5.250%, 07/01/09 $100 $ 111
Puerto Rico, Electric Power
Authority, Power Project,
Ser DD, RB, FSA
5.000%, 07/01/05 200 210
Puerto Rico, Electric
Power Authority, Power
Project, Ser X, RB
Pre-Refunded @ 102 (A)
6.000%, 07/01/05 350 378
Puerto Rico, Municipal Finance
Agency, Ser A, RB, FSA
Callable 07/01/07 @ 101.5
5.250%, 07/01/10 130 144
--------------------------------------------------------
TOTAL PUERTO RICO 843
========================================================
TOTAL MUNICIPAL BONDS
(Cost $17,623) 18,062
====================================================
CASH EQUIVALENT [0.8%]
SEI Tax Exempt Trust,
California Tax Exempt Fund,
Cl A 153,898 154
--------------------------------------------------------
TOTAL CASH EQUIVALENT
(Cost $154) 154
====================================================
TOTAL INVESTMENTS [97.8%]
(Cost $17,777) 18,216
====================================================
OTHER ASSETS AND LIABILITIES [2.2%]
Investment Advisory Fees Payable (2)
Shareholder Servicing Fees Payable (4)
Administration Fees Payable (1)
Other Assets and Liabilities, Net 424
--------------------------------------------------------
OTHER ASSETS AND LIABILITIES 417
====================================================
DESCRIPTION VALUE (000)
- -------------------------------------------------------------
NET ASSETS:
Paid-in-Capital -- Institutional Class
(unlimited authorization -- $0.01 par
value) based on 1,649,271 outstanding
shares of beneficial interest $16,796
Paid-in-Capital -- Class A
(unlimited authorization -- $0.01 par
value) based on 128,256 outstanding
shares of beneficial interest 1,361
Undistributed net investment income 1
Accumulated net realized gain
on investments 36
Net unrealized appreciation
on investments 439
--------------------------------------------------------
TOTAL NET ASSETS [ 100.0%] $18,633
========================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($17,285,490 / 1,649,271 shares) $10.48
========================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($1,347,605 / 128,256 shares) $10.51
========================================================
(A) PRE-REFUNDED SECURITY - THE MATURITY DATE SHOWN IS THE PRE-REFUNDED DATE.
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
COP -- CERTIFICATE OF PARTICIPATION
ETM -- ESCROWED TO MATURITY
FGIC -- FINANCIAL GUARANTY INSURANCE COMPANY
FSA -- FINANCIAL SECURITY ASSISTANCE
GO -- GENERAL OBLIGATION
MBIA -- MUNICIPAL BOND INSURANCE ASSOCIATION
RB -- REVENUE BOND
SER -- SERIES
TA -- TAX ALLOCATION
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 23
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
HIGH YIELD BOND FUND
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
CORPORATE BONDS [94.7%]
AEROSPACE & DEFENSE [1.0%]
DRS Technologies
6.875%, 11/01/13 $100 $ 104
Esterline Technologies
7.750%, 06/15/13 100 106
Sequa, Ser B
8.875%, 04/01/08 150 167
--------------------------------------------------------
TOTAL AEROSPACE & DEFENSE 377
========================================================
AIRLINES [0.4%]
American Airlines, Ser 2001-2
7.800%, 04/01/08 150 141
========================================================
APPAREL/TEXTILES [0.5%]
Levi Strauss
7.000%, 11/01/06 100 74
Warnaco
8.875%, 06/15/13 100 108
--------------------------------------------------------
TOTAL APPAREL/TEXTILES 182
========================================================
AUTO RENT & LEASE [0.8%]
NationsRent (A)
9.500%, 10/15/10 100 108
Rent-Way
11.875%, 06/15/10 100 112
United Rentals
7.750%, 11/15/13 100 98
--------------------------------------------------------
TOTAL AUTO RENT & LEASE 318
========================================================
AUTOPARTS [1.7%]
Collins & Aikman Products
10.750%, 12/31/11 150 154
Group 1 Automotive
8.250%, 08/15/13 100 110
Metaldyne (A)
10.000%, 11/01/13 100 99
TRW Automotive
11.000%, 02/15/13 98 117
Tenneco Automotive (A)
10.250%, 07/15/13 50 58
Tenneco Automotive, Ser B
10.250%, 07/15/13 100 115
--------------------------------------------------------
TOTAL AUTOPARTS 653
========================================================
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
BROADCASTING, NEWSPAPERS & ADVERTISING [6.6%]
Adelphia Communications, Ser B (E)
10.500%, 07/15/04 $100 $ 98
Advanstar Communications
10.750%, 08/15/10 100 110
CSC Holdings
9.875%, 02/15/13 50 52
7.625%, 07/15/18 100 105
Cablevision Systems (A)
8.000%, 04/15/12 50 50
Century Communications,
Ser B (E)
11.170%, 01/15/08 100 62
Charter Communications Holdings
10.000%, 05/15/11 100 83
8.750%, 11/15/13 (A) 250 255
8.625%, 04/01/09 100 82
Entravision Communications
8.125%, 03/15/09 100 107
Frontier Vision Holdings (E)
11.875%, 09/15/07 100 121
Gray Television
9.250%, 12/15/11 100 112
Insight Communications (B)
11.250%, 02/15/11 200 169
Interep National Radio Sales, Ser B
10.000%, 07/01/08 100 90
Mediacom Capital
7.875%, 02/15/11 200 193
Nexstar Finance Holdings (B)
9.493%, 04/01/13 200 147
Olympus Communications, Ser B (E)
10.625%, 11/15/06 100 120
Paxson Communications (B)
11.034%, 01/15/09 100 85
Salem Communication Holdings, Ser B
9.000%, 07/01/11 100 109
Telenet Group Holding (A) (B)
11.120%, 06/15/14 200 122
Videotron Ltee
6.875%, 01/15/14 100 105
Vivendi Universal
9.250%, 04/15/10 150 179
--------------------------------------------------------
TOTAL BROADCASTING, NEWSPAPERS
& ADVERTISING 2,556
========================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 24
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
HIGH YIELD BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
BUILDING & CONSTRUCTION [2.8%]
Beazer Homes USA
8.375%, 04/15/12 $100 $ 112
Brand Services
12.000%, 10/15/12 150 175
Dayton Superior
13.000%, 06/15/09 100 82
International Utility Structures (E)
10.750%, 02/01/08 100 20
Nortek, Ser B
9.875%, 06/15/11 100 112
North American Energy Partners (A)
8.750%, 12/01/11 150 150
Technical Olympic USA (A)
7.500%, 03/15/11 200 200
Texas Industries
10.250%, 06/15/11 100 114
William Lyon Homes
10.750%, 04/01/13 100 118
--------------------------------------------------------
TOTAL BUILDING & CONSTRUCTION 1,083
========================================================
BUSINESS SERVICES [0.7%]
Corrections (A)
7.500%, 05/01/11 100 106
Geo Group
8.250%, 07/15/13 150 158
--------------------------------------------------------
TOTAL BUSINESS SERVICES 264
========================================================
CHEMICALS [4.3%]
Acetex
10.875%, 08/01/09 150 164
Equistar Chemicals
10.625%, 05/01/11 150 162
FMC
10.250%, 11/01/09 100 117
Huntsman ICI Chemicals
10.125%, 07/01/09 100 102
IMC Global
10.875%, 08/01/13 100 125
IMC Global, Ser B
11.250%, 06/01/11 100 118
Lyondell Chemical
11.125%, 07/15/12 100 107
10.500%, 06/01/13 100 106
Nalco (A)
7.750%, 11/15/11 100 105
PolyOne
10.625%, 05/15/10 100 102
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
Rockwood Specialties Group
10.625%, 05/15/11 $100 $ 111
Terra Capital
11.500%, 06/01/10 100 109
United Industries, Ser D
9.875%, 04/01/09 200 210
--------------------------------------------------------
TOTAL CHEMICALS 1,638
========================================================
COMMERCIAL SERVICES [1.0%]
Iron Mountain
8.625%, 04/01/13 100 109
Salton
12.250%, 04/15/08 150 147
The Brickman Group, Ser B
11.750%, 12/15/09 100 116
--------------------------------------------------------
TOTAL COMMERCIAL SERVICES 372
========================================================
COMPUTER SYSTEM DESIGN & SERVICES [0.2%]
Unisys
7.875%, 04/01/08 100 103
========================================================
CONSUMER PRODUCTS & SERVICES [3.4%]
Armkel Finance
9.500%, 08/15/09 100 110
Johnsondiversey Holdings (B)
10.073%, 05/15/13 100 75
Johnsondiversey, Ser B
9.625%, 05/15/12 150 163
Jostens
12.750%, 05/01/10 100 113
NBTY, Ser B
8.625%, 09/15/07 100 102
Playtex Products
9.375%, 06/01/11 200 192
Prestige Brands (A)
9.250%, 04/15/12 150 150
Revlon Consumer Products
12.000%, 12/01/05 150 163
Sealy Mattress (A)
8.250%, 06/15/14 150 151
WH Holdings (A)
9.500%, 04/01/11 100 105
--------------------------------------------------------
TOTAL CONSUMER PRODUCTS & SERVICES 1,324
========================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 25
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
HIGH YIELD BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
CONTAINERS & PACKAGING [1.9%]
Berry Plastics
10.750%, 07/15/12 $100 $ 113
Four M, Ser B
12.000%, 06/01/06 100 99
Owens-Illinois
8.100%, 05/15/07 100 102
Plastipak Holdings
10.750%, 09/01/11 100 108
Pliant
13.000%, 06/01/10 100 87
Radnor Holdings
11.000%, 03/15/10 100 81
US Can
10.875%, 07/15/10 150 158
--------------------------------------------------------
TOTAL CONTAINERS & PACKAGING 748
========================================================
DAY CARE [0.2%]
La Petite Acadamy, Ser B
10.000%, 05/15/08 100 77
========================================================
DIVERSIFIED OPERATIONS [3.3%]
Grey Wolf
8.875%, 07/01/07 34 35
JII Holdings (B)
17.408%, 04/01/07 70 63
Jacuzzi Brands
9.625%, 07/01/10 150 166
Kansas City Southern
9.500%, 10/01/08 100 111
National Waterworks, Ser B
10.500%, 12/01/12 100 113
Poindexter J.B. (A)
8.750%, 03/15/14 200 205
Reddy Ice Group
8.875%, 08/01/11 100 107
TD Funding
8.375%, 07/15/11 100 106
Tekni-Plex, Ser B
12.750%, 06/15/10 100 105
Trinity Industries (A)
6.500%, 03/15/14 200 200
Werner Holdings, Ser A
10.000%, 11/15/07 100 75
--------------------------------------------------------
TOTAL DIVERSIFIED OPERATIONS 1,286
========================================================
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
ELECTRICAL PRODUCTS [7.4%]
AES
9.375%, 09/15/10 $ 19 $ 21
9.000%, 05/15/15 (A) 100 110
7.750%, 03/01/14 100 100
Allegheny Energy Supply
7.800%, 03/15/11 200 195
CMS Energy
7.500%, 01/15/09 100 103
Calpine
9.875%, 12/01/11 (A) 100 96
8.500%, 07/15/10 (A) 150 138
8.500%, 02/15/11 100 73
Calpine Generating (A) (F)
7.000%, 07/01/04 200 191
Cogentrix Energy, Ser B
8.750%, 10/15/08 150 158
Edison Mission Energy
7.730%, 06/15/09 150 145
General Cable (A)
9.500%, 11/15/10 100 110
L-3 Communications
6.125%, 07/15/13 100 103
Mirant Americas (E)
7.625%, 05/01/06 150 111
Motors & Gears, Ser D
10.750%, 11/15/06 150 129
NRG Energy (A)
8.000%, 12/15/13 200 207
PSEG Energy Holdings
7.750%, 04/16/07 100 106
Reliant Resources
9.500%, 07/15/13 150 165
Sanmina-SCI
10.375%, 01/15/10 100 118
Sierra Pacific Resources (A)
8.625%, 03/15/14 200 203
TNP Enterprises, Ser B
10.250%, 04/01/10 100 109
Utilicorp Canada Finance
7.750%, 06/15/11 150 144
--------------------------------------------------------
TOTAL ELECTRICAL PRODUCTS 2,835
========================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 26
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
HIGH YIELD BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
ENTERTAINMENT [14.2%]
AMC Entertainment
9.875%, 02/01/12 $100 $ 109
9.500%, 02/01/11 72 75
Ameristar Casinos
10.750%, 02/15/09 100 116
Argosy Gaming (A)
7.000%, 01/15/14 200 209
Aztar
9.000%, 08/15/11 100 112
8.875%, 05/15/07 100 103
Bluegreen, Ser B
10.500%, 04/01/08 150 154
Boca Resorts
9.875%, 04/15/09 150 158
Bombardier Recreational
Products (A)
8.375%, 12/15/13 100 103
Carmike Cinemas (A)
7.500%, 02/15/14 200 203
Cinemark USA
9.000%, 02/01/13 100 109
Circus & Eldorado Joint Venture/
Silver Legacy Capital
10.125%, 03/01/12 100 102
Coast Hotels & Casinos
9.500%, 04/01/09 225 236
Diamond Jo (A)
8.750%, 04/15/12 200 198
Equinox Holdings (A)
9.000%, 12/15/09 100 105
HMH Properties, Ser B
7.875%, 08/01/08 150 156
Hard Rock Hotel
8.875%, 06/01/13 200 214
Hockey
11.250%, 04/15/09 100 112
Horseshoe Gaming Holdings, Ser B
8.625%, 05/15/09 100 105
Inn of Mountain Gods Resort
& Casino (A)
12.000%, 11/15/10 100 108
Intrawest
10.500%, 02/01/10 100 110
Isle of Capri Casinos (A)
7.000%, 03/01/14 150 151
John Q Hammons Hotels, Ser B
8.875%, 05/15/12 100 111
Kerzner International
8.875%, 08/15/11 150 166
MGM Mirage (A)
5.875%, 02/27/14 250 250
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
MTR Gaming Group, Ser B
9.750%, 04/01/10 $200 $ 212
Majestic Star Casino
9.500%, 10/15/10 200 211
Mandalay Resort Group
6.450%, 02/01/06 60 63
Mandalay Resort Group, Ser B
10.250%, 08/01/07 100 118
Mohegan Tribal Gaming
8.375%, 07/01/11 100 110
Muzak
9.875%, 03/15/09 100 96
Old Evangeline Downs
13.000%, 03/01/10 150 170
Peninsula Gaming, Ser B
12.250%, 07/01/06 100 108
Penn National Gaming
8.875%, 03/15/10 100 109
6.875%, 12/01/11 (A) 100 102
Scientific Games, Ser B
12.500%, 08/15/10 100 118
Six Flags
9.750%, 04/15/13 150 159
Speedway Motorsports
6.750%, 06/01/13 100 106
Waterford Gaming
8.625%, 09/15/12 140 150
Windsor Woodmount Black
Hawk, Ser B (E)
13.000%, 03/15/05 100 65
--------------------------------------------------------
TOTAL ENTERTAINMENT 5,472
========================================================
FINANCIAL SERVICES [2.3%]
Alamosa Delaware (A)
8.500%, 01/31/12 150 143
Caithness Coso Fund, Ser B
9.050%, 12/15/09 84 94
Chukchansi Economic
Development Authority (A)
14.500%, 06/15/09 150 176
Couche-Tard Finance (A)
7.500%, 12/15/13 100 107
ESI Tractebel Acquisitions, Ser B
7.990%, 12/30/11 70 72
Gemstone Investor (A)
7.710%, 10/31/04 100 100
Ship Finance International (A)
8.500%, 12/15/13 200 196
--------------------------------------------------------
TOTAL FINANCIAL SERVICES 888
========================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 27
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
HIGH YIELD BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------------------------
FOOD & BEVERAGE [5.7%]
Aurora Foods, Ser B (E)
9.875%, 02/15/07 $100 $ 85
Del Monte
8.625%, 12/15/12 50 56
Del Monte, Ser B
9.250%, 05/15/11 150 169
Dimon, Ser B
9.625%, 10/15/11 100 108
Dole Foods
8.875%, 03/15/11 100 109
Dominos
8.250%, 07/01/11 100 108
Friendly Ice Cream (A)
8.375%, 06/15/12 100 103
Great Atlantic & Pacific Tea
9.125%, 12/15/11 100 87
Herbalife International
11.750%, 07/15/10 100 115
Land O' Lakes
8.750%, 11/15/11 200 178
Le-Natures (A)
9.500%, 06/15/13 150 159
Merisant (A)
9.500%, 07/15/13 100 99
National Wine & Spirits
10.125%, 01/15/09 100 96
Pantry (A)
7.750%, 02/15/14 100 100
Pilgrim's Pride
9.625%, 09/15/11 100 108
Pinnacle Foods (A)
8.250%, 12/01/13 200 213
Premier International Foods PLC
12.000%, 09/01/09 100 108
Swift
12.500%, 01/01/10 200 214
--------------------------------------------------------
TOTAL FOOD & BEVERAGE 2,215
========================================================
FORESTRY [0.5%]
Riverside Forest Products (A)
7.875%, 03/01/14 100 103
Tembec Industries
7.750%, 03/15/12 100 97
--------------------------------------------------------
TOTAL FORESTRY 200
========================================================
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
HOUSEHOLD FURNITURE & FIXTURES [0.3%]
Sealy Mattress, Ser B
9.875%, 12/15/07 $100 $ 103
========================================================
MACHINERY [3.9%]
AK Steel
7.875%, 02/15/09 150 137
Briggs & Stratton
8.875%, 03/15/11 150 185
Building Materials, Ser B
8.000%, 10/15/07 100 100
7.750%, 07/15/05 200 203
Case New Holland (A)
9.250%, 08/01/11 100 113
Cummins
9.500%, 12/01/10 100 118
Grant Prideco Escrow
9.000%, 12/15/09 136 153
Intermet
9.750%, 06/15/09 100 95
Mail-Well I
9.625%, 03/15/12 100 110
Resolution Performance Products
13.500%, 11/15/10 100 84
Terex (A)
7.375%, 01/15/14 100 107
Trimas
9.875%, 06/15/12 100 109
--------------------------------------------------------
TOTAL MACHINERY 1,514
========================================================
MEDICAL [3.8%]
Alpharma (A)
8.625%, 05/01/11 100 105
Ardent Health Services
10.000%, 08/15/13 100 111
Beverly Enterprises
9.625%, 04/15/09 200 228
Bio-Rad Laboratories
7.500%, 08/15/13 100 110
Biovail
7.875%, 04/01/10 100 98
Concentra Operating
9.500%, 08/15/10 100 111
Extendicare Health Services
9.350%, 12/15/07 100 103
Genesis HealthCare (A)
8.000%, 10/15/13 100 107
Pacificare Health Systems
10.750%, 06/01/09 65 76
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 28
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
HIGH YIELD BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
Triad Hospitals, Ser B
8.750%, 05/01/09 $100 $ 109
Universal Hospital Services (A)
10.125%, 11/01/11 200 216
Vanguard Health Systems
9.750%, 08/01/11 100 108
--------------------------------------------------------
TOTAL MEDICAL 1,482
========================================================
OFFICE FURNITURE & FIXTURES [0.7%]
Interface (A)
9.500%, 02/01/14 100 99
Xerox
7.625%, 06/15/13 100 106
7.125%, 06/15/10 50 53
--------------------------------------------------------
TOTAL OFFICE FURNITURE & FIXTURES 258
========================================================
PAPER & PAPER PRODUCTS [2.3%]
Appleton Papers, Ser B
12.500%, 12/15/08 100 113
Georgia-Pacific
7.700%, 06/15/15 100 109
JSG Funding
9.625%, 10/01/12 100 113
Newark Group (A)
9.750%, 03/15/14 200 197
Norampac
6.750%, 06/01/13 100 106
Norske Skog Canada (A)
7.375%, 03/01/14 250 258
--------------------------------------------------------
TOTAL PAPER & PAPER PRODUCTS 896
========================================================
PETROLEUM & FUEL PRODUCTS [6.5%]
Belden & Blake, Ser B
9.875%, 06/15/07 200 196
Chesepeake Energy
6.875%, 01/15/16 112 118
Comstock Resources
6.875%, 03/01/12 150 153
Dynegy Holdings
10.125%, 07/15/13 (A) 150 165
6.875%, 04/01/11 100 87
El Paso
7.000%, 05/15/11 200 171
El Paso Natural Gas
7.625%, 08/01/10 150 154
El Paso Production Holding
7.750%, 06/01/13 200 185
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
Forest Oil
8.000%, 06/15/08 $150 $ 166
GulfTerra Energy, Ser B
8.500%, 06/01/10 170 196
Parker Drilling
9.625%, 10/01/13 150 165
Plains Exploration & Production,
Ser B
8.750%, 07/01/12 150 169
Pride International
9.375%, 05/01/07 54 55
Swift Energy
9.375%, 05/01/12 100 112
Vintage Petroleum
7.875%, 05/15/11 100 108
Williams
7.625%, 07/15/19 50 51
6.500%, 08/01/06 100 104
Wiser Oil
9.500%, 05/15/07 150 149
--------------------------------------------------------
TOTAL PETROLEUM & FUEL PRODUCTS 2,504
========================================================
PRINTING & PUBLISHING [2.2%]
American Color Graphics
10.000%, 06/15/10 100 88
Canwest Media
10.625%, 05/15/11 100 114
Dex Media (A) (B)
9.468%, 11/15/13 200 128
Dex Media East
9.875%, 11/15/09 100 113
Dex Media West (A)
8.500%, 08/15/10 100 110
Garden State Newspapers
8.625%, 07/01/11 100 105
Haights Cross Operating
11.750%, 08/15/11 100 108
Primedia (A)
8.000%, 05/15/13 100 100
--------------------------------------------------------
TOTAL PRINTING & PUBLISHING 866
========================================================
REAL ESTATE [0.3%]
LNR Property (A)
7.250%, 10/15/13 100 105
========================================================
RETAIL [4.6%]
Amerigas Partner
8.875%, 05/20/11 100 111
Asbury Automotive Group
9.000%, 06/15/12 150 161
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 29
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
HIGH YIELD BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
Autonation
9.000%, 08/01/08 $100 $ 117
CKE Restaurants
9.125%, 05/01/09 100 104
Cole National Group
8.875%, 05/15/12 100 115
General Nutrition Centers (A)
8.500%, 12/01/10 500 525
JC Penney, Ser A, MTN
7.050%, 05/23/05 100 105
Pep Boys
7.000%, 06/01/05 150 155
Petro Stopping Centers (A)
9.000%, 02/15/12 100 103
Rite Aid
8.125%, 05/01/10 100 107
United Auto Group
9.625%, 03/15/12 150 167
--------------------------------------------------------
TOTAL RETAIL 1,770
========================================================
RUBBER & PLASTIC [0.4%]
Applied Extrusion Technologies, Ser B
10.750%, 07/01/11 200 163
========================================================
SEMI-CONDUCTORS/INSTRUMENTS [0.7%]
Fisher Scientific International
8.000%, 09/01/13 150 168
Viasystems (A)
10.500%, 01/15/11 100 112
--------------------------------------------------------
TOTAL SEMI-CONDUCTORS/INSTRUMENTS 280
========================================================
STEEL & STEEL WORKS [0.3%]
Gerdau Ameristeel
10.375%, 07/15/11 100 113
========================================================
TELEPHONES & TELECOMMUNICATIONS [7.8%]
Alamosa Holdings (B)
14.358%, 02/15/10 150 126
Atlantic Broadband (A)
9.375%, 01/15/14 200 197
Centennial Communications
10.125%, 06/15/13 100 103
8.125%, 02/01/14 (A) 100 92
Crown Castle International
7.500%, 12/01/13 100 98
Insight Midwest
9.750%, 10/01/09 150 156
--------------------------------------------------------
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
Level 3 Communications
16.118%, 12/01/08 (B) $150 $ 123
9.125%, 05/01/08 200 162
Lucent Technologies
5.500%, 11/15/08 250 242
Nextel Communications
7.375%, 08/01/15 100 108
Nextel Partners
8.125%, 07/01/11 150 159
Qwest
5.625%, 11/15/08 100 100
Qwest Communications
International (A)
7.500%, 02/15/14 200 189
RCN (E)
10.125%, 01/15/10 100 47
Rogers Wireless
9.625%, 05/01/11 100 122
Rural Cellular
9.750%, 01/15/10 100 90
SBA Telecommunications (A) (B)
9.750%, 12/15/11 150 105
Time Warner Telecommunications
10.125%, 02/01/11 100 92
Triton PCS
8.500%, 06/01/13 150 160
UbiquiTel Operating
12.252%, 04/15/10 (B) 200 188
9.875%, 03/01/11 (A) 200 195
Western Wireless
--------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATIONS 3,008
========================================================
WASTE DISPOSAL [0.6%]
Allied Waste North America, Ser B
10.000%, 08/01/09 100 107
IESI
10.250%, 06/15/12 100 110
--------------------------------------------------------
TOTAL WASTE DISPOSAL 217
========================================================
WHOLESALE [1.4%]
Alaris Medical
7.250%, 07/01/11 100 106
B&G Foods, Ser D
9.625%, 08/01/07 100 103
Collins & Aikman Floor Cover, Ser B
9.750%, 02/15/10 100 107
--------------------------------------------------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 30
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
HIGH YIELD BOND FUND (CONCLUDED)
DESCRIPTION FACE AMOUNT (000)/SHARES VALUE (000)
- -------------------------------------------------------------
National Beef Packing (A)
10.500%, 08/01/11 $200 $ 206
--------------------------------------------------------
TOTAL WHOLESALE 522
========================================================
TOTAL CORPORATE BONDS
(Cost $34,771) 36,533
====================================================
COMMON STOCK [0.4%]
COMMERCIAL SERVICES [0.4%]
Magellan Health Services* 4,924 138
========================================================
PETROLEUM REFINING [0.0%]
Southwest Royalties, Cl A (C) (D)* 784 20
========================================================
TOTAL COMMON STOCK
(Cost $156) 158
====================================================
CONVERTIBLE BOND [0.3%]
Key Energy Services, Convertible
to 25.9740 Shares
5.000%, 09/15/04 100 100
--------------------------------------------------------
TOTAL CONVERTIBLE BOND
(Cost $97) 100
====================================================
CASH EQUIVALENT [2.1%]
Fidelity Institutional Domestic
Money Market Portfolio,
Cl I 824,765 825
--------------------------------------------------------
TOTAL CASH EQUIVALENT
(Cost $825) 825
====================================================
WARRANTS [0.0%]
Dayton Superior,
Expires 06/15/09 (A) 100 --
Diva Systems,
Expires 03/01/08 (A) 600 --
Pliant, Expires 01/01/10 (A) 100 --
--------------------------------------------------------
TOTAL WARRANTS
(Cost $0) --
====================================================
TOTAL INVESTMENTS [97.5%]
(Cost $35,849) 37,616
====================================================
DESCRIPTION VALUE (000)
- -------------------------------------------------------------
OTHER ASSETS AND LIABILITIES [2.5%]
Investment Advisory Fees Payable $ (20)
Shareholder Servicing Fees Payable (8)
Administration Fees Payable (3)
Other Assets and Liabilities, Net 986
--------------------------------------------------------
OTHER ASSETS AND LIABILITIES 955
====================================================
NET ASSETS:
Paid-in-Capital -- Institutional Class
(unlimited authorization -- $0.01 par
value) based on 1,931,642 outstanding
shares of beneficial interest 18,390
Paid-in-Capital -- Class A
(unlimited authorization -- $0.01 par
value) based on 2,223,705 outstanding
shares of beneficial interest 19,867
Distribution in excess of net
investment income (3)
Accumulated net realized loss
on investments (1,450)
Net unrealized appreciation
on investments 1,767
========================================================
TOTAL NET ASSETS [100.0%] $38,571
========================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($17,931,604 / 1,931,642 shares) $9.28
========================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($20,639,174 / 2,223,705 shares) $9.28
========================================================
* NON-INCOME PRODUCING SECURITY
(A) SECURITY SOLD WITHIN THE TERMS OF A PRIVATE PLACEMENT MEMORANDUM, EXEMPT
FROM REGISTRATION UNDER SECTION 144A OF THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY BE SOLD ONLY TO DEALERS IN THAT PROGRAM OR OTHER
"ACCREDITED INVESTORS."
(B) STEP BOND -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS IS THE RATE
IN EFFECT ON MARCH 31, 2004. THE COUPON ON A STEP BOND CHANGES ON A SPECIFIC
DATE.
(C) SECURITY IS VALUED AT FAIR VALUE AS DETERMINED IN GOOD FAITH BY THE BOARD OF
TRUSTEES OF THE TRUST.
(D) SECURITY CONSIDERED ILLIQUID
(E) SECURITY IN DEFAULT ON INTEREST PAYMENTS
(F) FLOATING RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON MARCH 31, 2004. THE DATE SHOWN IS THE EARLIER OF
THE RESET DATE OR THE DEMAND DATE.
CL -- CLASS
PLC -- PUBLIC LIMITED COMPANY
MTN -- MEDIUM TERM NOTE
SER -- SERIES
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 31
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
PRIME MONEY MARKET FUND
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
COMMERCIAL PAPER (A) [33.3%]
ASSET-BACKED SECURITIES [14.5%]
Barton Capital
1.033%, 04/19/04 $23,000 $ 22,988
1.041%, 04/20/04 250 250
Giro Multi-Funding
1.021%, 04/20/04 22,000 21,988
Premier Asset (B)
1.050%, 05/17/04 22,000 21,971
Sigma Finance (B)
1.030%, 07/16/04 16,000 15,951
--------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES 83,148
========================================================
BANKS [15.0%]
Banc of America
1.023%, 04/14/04 22,000 21,992
Bank One
1.010%, 05/04/04 20,000 19,982
Societe Generale
1.094%, 04/05/04 22,000 21,997
1.021%, 05/03/04 100 100
UBS Financial
1.010%, 05/03/04 22,000 21,980
--------------------------------------------------------
TOTAL BANKS 86,051
========================================================
GOVERNMENT AGENCY [3.8%]
Los Angeles, Metropolitan
Transportation Authority
1.053%, 04/14/04 22,000 21,992
--------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost $191,191) 191,191
====================================================
U.S. GOVERNMENT AGENCY OBLIGATIONS [11.4%]
FHLB (A)
1.120%, 05/07/04 30,000 29,967
FHLB, Ser 7R04
5.605%, 04/08/04 5,310 5,314
FHLMC
1.185%, 08/06/04 30,000 30,000
--------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $65,281) 65,281
====================================================
CORPORATE OBLIGATIONS [6.6%]
BANKS [0.2%]
Bank One
7.250%, 08/15/04 1,170 1,195
========================================================
DESCRIPTION FACE AMOUNT (000)/SHARES VALUE (000)
- -------------------------------------------------------------
FINANCIAL SERVICES [3.6%]
American General Finance,
Ser F, MTN
7.450%, 01/15/05 $14,500 $ 15,206
International Lease Finance,
Ser M, MTN
4.750%, 01/18/05 5,000 5,138
--------------------------------------------------------
TOTAL FINANCIAL SERVICES 20,344
========================================================
SECURITY BROKERS & DEALERS [2.8%]
Goldman Sachs Group, Ser E,
MTN
7.500%, 01/28/05 15,349 16,134
========================================================
TOTAL CORPORATE OBLIGATIONS
(Cost $37,673) 37,673
====================================================
CERTIFICATES OF DEPOSIT [3.8%]
First Tennessee Bank
1.030%, 05/03/04 22,000 22,000
--------------------------------------------------------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $22,000) 22,000
====================================================
CASH EQUIVALENT [0.1%]
Fidelity Institutional Domestic
Money Market Portfolio,
Cl I 302,252 302
--------------------------------------------------------
TOTAL CASH EQUIVALENT
(Cost $302) 302
====================================================
REPURCHASE AGREEMENTS [44.8%]
BancOne Capital Markets
1.060%, dated 03/31/04, repurchased
on 04/01/04, repurchase price
$25,000,736 (collateralized by
U.S. Government Obligations,
ranging in par value
$135,000-$25,300,000,
1.057% (A)-1.084% (A),
08/12/04-09/22/04;
with total market value
$25,504,523)(C) 25,000 25,000
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 32
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
PRIME MONEY MARKET FUND (CONCLUDED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
Bear Stearns
1.070%, dated 03/31/04, repurchased
on 04/01/04, repurchase price
$85,002,526 (collateralized by
U.S. Government Obligations,
ranging in par value $4,747,267-
$8,875,087, 5.000%-7.500%,
02/01/18-03/01/34; with total
market value $86,701,973)(C) $85,000 $ 85,000
Credit Suisse First Boston
1.060%, dated 03/31/04, repurchased
on 04/01/04, repurchase price
$20,000,589 (collateralized by
a U.S. Government Obligation,
par value $20,150,000, 4.500%,
02/01/19; with total market
value $20,401,158)(C) 20,000 20,000
Deutsche Bank
1.060%, dated 03/31/04, repurchased
on 04/01/04, repurchase price
$300,00,883 (collateralized by a
U.S. Government Obligation, par
value $30,450,000, 2.510% (A),
01/12/07; with total market
value $30,600,364)(C) 30,000 30,000
Lehman Brothers
1.050%, dated 03/31/04, repurchased
on 04/01/04, repurchase price
$96,802,823 (collateralized by
U.S. Government Obligations,
ranging in par value $2,025,000-
$50,000,000, 4.500%-7.000%,
07/01/16-10/01/18; with total
market value $98,732,906)(C) 96,800 96,800
--------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost $256,800) 256,800
====================================================
TOTAL INVESTMENTS [100.0%]
(Cost $573,247) 573,247
====================================================
OTHER ASSETS AND LIABILITIES [0.0%]
Investment Advisory Fees Payable (125)
Shareholder Servicing Fees Payable (153)
Administration Fees Payable (44)
Other Assets and Liabilities, Net 556
--------------------------------------------------------
OTHER ASSETS AND LIABILITIES 234
====================================================
DESCRIPTION VALUE (000)
- -------------------------------------------------------------
NET ASSETS:
Paid-in-Capital -- Institutional Class
(unlimited authorization -- $0.01 par
value) based on 300,844,356 outstanding
shares of beneficial interest $300,785
Paid-in-Capital -- Class A
(unlimited authorization -- $0.01 par
value) based on 167,473,515 outstanding
shares of beneficial interest 167,449
Paid-in-Capital -- Class S
(unlimited authorization -- $0.01 par
value) based on 105,663,449 outstanding
shares of beneficial interest 105,654
Accumulated net realized loss
on investments (407)
--------------------------------------------------------
TOTAL NET ASSETS [100.0%] $573,481
========================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($300,706,523 / 300,844,356 shares) $1.00
========================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($167,202,141 / 167,473,515 shares) $1.00
========================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class S
($105,572,681 / 105,663,449 shares) $1.00
========================================================
(A) THE RATE REPORTED IS THE EFFECTIVE YIELD AT TIME OF PURCHASE.
(B) SECURITY SOLD WITHIN THE TERMS OF A PRIVATE PLACEMENT MEMORANDUM, EXEMPT
FROM REGISTRATION UNDER SECTION 144A OF THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY BE SOLD ONLY TO DEALERS IN THAT PROGRAM OR OTHER
"ACCREDITED INVESTORS."
(C) TRI-PARTY REPURCHASE AGREEMENT
CL -- CLASS
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
MTN -- MEDIUM TERM NOTE
SER -- SERIES
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 33
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
GOVERNMENT MONEY MARKET FUND
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS [55.6%]
FFCB (A)
1.036%, 08/25/04 $ 35,000 $ 34,854
FHLB
1.500%, 03/01/05 20,770 20,770
1.470%, 03/01/05 25,000 25,000
1.150%, 03/16/05 14,240 14,240
1.400%, 04/01/05 15,000 14,994
1.150%, 04/13/05 25,000 25,000
FHLB (A)
0.941%, 04/02/04 86,852 86,850
0.980%, 04/07/04 25,000 24,996
1.112%, 05/07/04 10,000 9,989
1.025%, 09/23/04 35,000 34,826
FHLMC
3.750%, 04/15/04 8,743 8,751
1.185%, 08/06/04 70,000 70,000
FHLMC (A)
0.990%, 04/01/04 50,000 50,000
0.960%, 04/06/04 22,821 22,818
FHLMC, MTN
1.375%, 11/09/04 50,000 50,000
1.520%, 11/19/04 14,700 14,700
FNMA
1.500%, 12/03/04 1,400 1,400
FNMA (A)
0.960%, 04/01/04 550,000 550,000
1.286%, 04/02/04 25,000 24,999
1.003%, 07/07/04 25,000 24,933
1.004%, 07/08/04 50,000 49,864
--------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $1,158,984) 1,158,984
========================================================
U.S. TREASURY OBLIGATION [0.1%]
US Treasury Bills (A)
1.020%, 05/27/04 2,900 2,896
--------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATION
(Cost $2,896) 2,896
========================================================
REPURCHASE AGREEMENTS [44.3%]
Banc of America
1.060%, dated 03/31/04,
repurchased on 04/01/04,
repurchase price $225,006,625
(collateralized by U.S. Government
Obligations, ranging in par value
$56,529,018-$116,808,198,
5.000%-6.000%, 11/01/32-
02/01/34; with total market
value $229,500,001)(B) 225,000 225,000
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
BancOne Capital Markets
1.060%, dated 03/31/04,
repurchased on 04/01/04,
repurchase price $100,002,944
(collateralized by U.S. Government
Obligations, ranging in par value
$10,000,000-$70,795,000,
1.055%(A)-1.060%(A), 08/09/04-
08/17/04; with total market
value $102,003,862)(B) $100,000 $ 100,000
Bear Stearns
1.070%, dated 03/31/04,
repurchased on 04/01/04,
repurchase price $150,004,458
(collateralized by U.S. Government
Obligations, ranging in par value
$1,820,000-$8,357,910, 5.000%-
7.500%, 01/01/09-04/01/34,
with total market value
$153,003,890)(B) 150,000 150,000
Credit Suisse First Boston
1.060%, dated 03/31/04,
repurchased on 04/01/04,
repurchase price $55,001,619
(collateralized by U.S. Government
Obligations, ranging in par value
$29,815-$26,475,402, 4.000%-
6.500%, 12/01/13-01/01/34;
with total market value
$56,102,118)(B) 55,000 55,000
Deutsche Bank
1.060%, dated 03/31/04,
repurchased on 04/01/04,
repurchase price $70,002,061
(collateralized by U.S. Government
Obligations, ranging in par value
$31,081,000-$39,841,000,
1.208%(A)-4.5000%, 01/19/05-
07/15/13; with total market
value $71,400,301)(B) 70,000 70,000
JP Morgan Chase
1.070%, dated 03/31/04,
repurchased on 04/01/04,
repurchase price $75,002,229
(collateralized by a U. S. Government
Obligation, par value $75,820,000,
6.000%, 03/01/34; with total
market value $76,502,547)(B) 75,000 75,000
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 34
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
GOVERNMENT MONEY MARKET FUND (CONCLUDED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
Lehman Brothers
1.050%, dated 03/31/04,
repurchased on 04/01/04,
repurchase price $248,107,236
(collateralized by U.S. Government
Obligations, ranging in par value
$17,355,000-$51,175,389, 5.000%-
6.500%, 09/01/18-03/01/34;
with total market value
$253,043,869)(B) $248,100 $ 248,100
--------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost $923,100) 923,100
====================================================
TOTAL INVESTMENTS [100.0%]
(Cost $2,084,980) 2,084,980
====================================================
OTHER ASSETS AND LIABILITIES:
Investment Advisory Fees Payable (451)
Shareholder Servicing Fees Payable (385)
Administration Fees Payable (156)
Other Assets and Liabilities, Net 83
--------------------------------------------------------
OTHER ASSETS AND LIABILITIES [ 0.0%] (909)
====================================================
NET ASSETS:
Paid-in-Capital -- Institutional Class
(unlimited authorization -- $0.01 par
value) based on 45,733,771 outstanding
shares of beneficial interest 45,734
Paid-in-Capital -- Class A
(unlimited authorization -- $0.01 par
value) based on 1,842,388,576 outstanding
shares of beneficial interest 1,842,389
Paid-in-Capital -- Class S
(unlimited authorization -- $0.01 par
value) based on 195,952,055 outstanding
shares of beneficial interest 195,952
Accumulated net realized loss
on investments (4)
--------------------------------------------------------
TOTAL NET ASSETS [100.0%] $2,084,071
========================================================
DESCRIPTION VALUE (000)
- -------------------------------------------------------------
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($45,732,447 / 45,733,771 shares) $1.00
========================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($1,842,387,192 / 1,842,388,576 shares) $1.00
========================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class S
($195,951,142 / 195,952,055 shares) $1.00
========================================================
(A) THE RATE REPORTED IS THE EFFECTIVE YIELD AT TIME OF PURCHASE.
(B) TRI-PARTY REPURCHASE AGREEMENT
FFCB -- FEDERAL FARM CREDIT BANK
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
MTN -- MEDIUM TERM NOTE
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 35
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT MONEY MARKET FUND
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
MUNICIPAL BONDS [98.9%]
CALIFORNIA [94.5%]
ABAG, Finance Authority for
Non-Profit Corporations,
Hamlin School Project,
Ser A, GO (A) (B) (C)
1.050%, 08/01/32 $ 1,500 $ 1,500
ABAG, Finance Authority for
Non-Profit Corporations,
Jackson Labs, RB (A) (B) (C)
1.010%, 07/01/32 4,900 4,900
ABAG, Finance Authority for
Non-Profit Corporations,
Public Policy Institute,
Ser A, RB (A) (B) (C)
1.050%, 11/01/31 3,020 3,020
ABAG, Finance Authority for
Non-Profit Corporations,
School of the Sacred
Heart, Ser B, RB (A) (B) (C)
1.150%, 06/01/30 8,600 8,600
ABAG, Finance Authority for
Non-Profit Corporations,
Ser C, COP (A) (B) (C)
1.120%, 10/01/27 2,400 2,400
ABAG, Financial Authority for
Non-Profit Corporations,
Jewish Community Center
Project, RB (A) (B) (C)
1.140%, 11/15/31 2,000 2,000
Alameda County, Santa Rita Jail
Project, COP, MBIA, ETM
5.250%, 12/01/04 500 514
Alameda-Contra Costa, School
Finance Authority, Capital
Improvement Financing
Project, Ser F, COP
(A) (B) (C)
1.080%, 08/01/23 1,100 1,100
Alvord, Unified School District,
GO, MBIA (A)
1.040%, 03/01/05 9,150 9,150
Anaheim, Multi-Family Housing
Authority, Heritage Village
Apartments Project,
Ser A, RB (A) (B) (C)
1.020%, 07/15/33 4,385 4,385
Berkeley, TRAN
1.750%, 12/01/04 12,000 12,054
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
California State, Bay Area Toll
Authority, San Francisco Bay
Area Project, Ser B, RB,
AMBAC (A) (B)
0.980%, 04/01/29 $ 800 $ 800
California State, California
Statewide Communities
Development Authority,
Ser A3, TRAN
2.000%, 06/30/04 5,000 5,013
California State, Community
Development Authority,
Covenant Retirement
Communities Project, COP
(A) (B) (C)
1.000%, 12/01/22 7,505 7,505
California State, Community
Development Authority,
Motion Picture & Television
Project, Ser A, RB (A) (B) (C)
1.020%, 03/01/31 7,500 7,500
California State, Community
Development Authority, Sutter
Health Obligation Group
Project, COP, AMBAC (A) (B)
1.100%, 07/01/15 1,300 1,300
California State, Department of
Water Resource & Power,
Ser B-2, RB (A) (B) (C)
1.150%, 05/01/22 7,575 7,575
California State, Department of
Water Resource & Power,
Ser C-13, RB, FSA (A) (B)
1.020%, 05/01/22 4,100 4,100
California State, Department of
Water Resource & Power,
Ser C-15, RB (A) (B) (C)
1.010%, 05/01/22 5,000 5,000
California State, Department of
Water Resources, Ser B-1, RB
(A) (B) (C)
1.120%, 05/01/22 6,000 6,000
California State, Economic
Development Financing
Authority, KQED Project, RB
(A) (B) (C)
0.980%, 04/01/20 1,600 1,600
California State, Educational
Facilities Authority, Chapman
University Project, RB
(A) (B) (C)
1.150%, 12/01/30 1,000 1,000
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 36
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
California State, Educational
Facilities Authority, Life
Chiropractic College Project,
RB (A) (B) (C)
1.010%, 01/01/25 $ 6,500 $ 6,500
California State, Educational
Facilities Authority, Point Loma
Nazarene University Project,
RB (A) (B) (C)
1.250%, 10/01/29 2,150 2,150
California State, GO
Pre-Refunded @ 101 (F)
5.750%, 03/01/05 5,450 5,740
California State, Health Facilities
Financing Authority, Adventist
Health Systems Project,
Ser A, RB (A) (B) (C)
1.120%, 09/01/25 4,550 4,550
California State, Health Facilities
Finance Authority, Adventist
Hospital Project, Ser B, RB,
MBIA (A) (B)
1.120%, 09/01/28 1,000 1,000
California State, Health Facilities
Finance Authority, Catholic
Healthcare Project, Ser C, RB,
MBIA (A) (B)
1.080%, 07/01/20 7,000 7,000
California State, Health Facilities
Finance Authority, Scripps
Health Project, Ser A, RB
(A) (B) (C)
1.030%, 10/01/23 12,400 12,400
California State, Health Facilities
Financing Authority, Sisters
Charity Health Systems Project,
RB (A) (B)
1.030%, 12/01/17 12,000 12,000
California State, Housing Finance
Agency, Multi-Family Housing
III Project, Ser B, RB (A) (B)
1.150%, 02/01/33 6,595 6,595
California State, Housing Finance
Agency, Multi-Family Housing
Project, Ser D, RB (A) (B)
1.150%, 02/01/31 5,600 5,600
California State, Infrastructure &
Economic Authority, RAND
Corporation Project, Ser B, RB,
AMBAC (A) (B)
1.050%, 04/01/42 12,000 12,000
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
California State, Infrastructure &
Economic Development
Authority, Recreational Facility
Project, J. Paul Getty Trust,
Ser C, RB (A) (B)
1.000%, 04/01/33 $ 2,000 $ 2,000
California State, Infrastructure &
Economic Development
Authority, Recreational Facility
Project, J. Paul Getty Trust,
Ser B, RB (A) (B)
1.000%, 04/01/33 17,000 17,000
California State, School Cash
Reserve Program Authority,
Ser A, RB
2.000%, 07/06/04 11,000 11,030
California State, Ser A, GO
(A) (B) (C)
1.050%, 10/01/29 9,950 9,950
California Statewide,
Communities Development
Authority, Center For Early
Education Project, RB
(A) (B) (C)
1.050%, 09/01/31 1,000 1,000
California Statewide,
Communities Development
Authority, Concordia
University Irvine Project,
Ser A, RB (A) (B) (C)
1.130%, 10/01/31 6,200 6,200
California Statewide,
Communities Development
Authority, University
Retirement Project, RB
(A) (B) (C)
1.120%, 11/15/30 7,000 7,000
Carlsbad, Unified School District
Authority, School Facilities
Bridge Funding Project, COP,
FSA (A) (B)
1.000%, 09/01/30 2,900 2,900
1.000%, 09/01/32 7,000 7,000
Chico, Public Financing
Authority, Merged
Redevelopment Project,
TA, MBIA
4.000%, 04/01/05 500 515
Contra Costa County, Putters,
Ser 154Z, COP, MBIA (A) (B)
1.030%, 11/01/07 5,995 5,995
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 37
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
Corona, Multi-Family Housing
Authority, Country Hills
Project, Ser A, RB (A) (B) (D)
1.000%, 02/01/25 $ 5,275 $ 5,275
Covina, Multi-Family
Redevelopment Agency
Authority, Shadowhills
Apartments Project,
Ser A, RB (A) (B) (D)
1.000%, 12/01/15 2,500 2,500
Desert Sands, Unified School
District, BAN
1.750%, 06/30/04 17,000 17,034
Fontana, Unified School District,
School Facility Bridge Funding
Program, COP, FSA (A) (B)
1.000%, 04/01/35 5,000 5,000
Fremont, Building & Equipment
Financing Project, COP
(A) (B) (C)
1.050%, 07/01/15 4,500 4,500
Fremont, Multi-Family Housing
Authority, Creekside Village
Apartments Project, Ser D, RB
(A) (B) (D)
0.990%, 09/01/07 500 500
Fremont, Multi-Family Housing
Authority, Mission Wells LP,
RB (A) (B) (C)
1.000%, 09/01/14 5,700 5,700
Fresno, Multi-Family Housing
Authority, Stonepine Apartment
Project, Ser A, RB (A) (B) (D)
1.000%, 02/15/31 1,395 1,395
Fresno, Unified School District,
GO, MBIA (A) (B)
1.040%, 08/01/21 8,385 8,385
Glendale, Police Building Project,
COP (A) (B)
1.000%, 06/01/30 5,000 5,000
Golden Empire, School Financing
Authority, Kern High School
District Project, RB (A) (B) (C)
1.030%, 08/01/31 1,000 1,000
Irvine Ranch, Water Distribution,
Capital Improvement Project,
COP (A) (B) (C)
1.100%, 08/01/16 1,000 1,000
Kings County, Multi-Family
Housing Authority, Edgewater
Isle Apartments Project, Ser A,
RB (A) (B) (D)
1.050%, 02/15/31 10,710 10,710
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
Los Angeles County, Community
Development Authority,
Willowbrook Project, COP
(A) (B) (C)
0.950%, 11/01/15 $ 1,000 $ 1,000
Los Angeles County, Multi-Family
Housing Authority, Malibu
Canyon Apartments Project,
Ser B, RB (A) (B) (C)
1.060%, 06/01/10 8,000 8,000
Los Angeles County, Multi-Family
Housing Authority, Valencia
Housing Project, Ser C, RB
(A) (B) (E)
1.000%, 04/01/31 600 600
Los Angeles County, Pension
Authority, Ser B, RB, AMBAC
(A) (B)
1.010%, 06/30/07 500 500
Los Angeles, Community
Redevelopment Authority,
CMC Medical Plaza Partner
Project, COP (A) (B) (C)
1.000%, 12/01/05 600 600
Los Angeles, Corporate Lease
Authority, RB, MBIA (A) (B)
1.040%, 12/01/09 10,630 10,630
Los Angeles, GO, MBIA (A) (B)
1.040%, 03/01/10 5,370 5,370
Los Angeles, Multi-Family
Housing Authority,
Meadowridge Apartments
Project, RB (A) (B) (D)
1.000%, 09/01/18 3,890 3,890
Los Angeles, Samuel A Fryer
Vavney, Ser A, COP (A) (B) (C)
1.000%, 08/01/21 7,000 7,000
Los Angeles, Ser A, TRAN
1.750%, 06/30/04 3,000 3,006
Los Angeles, Unified School
District, Multiple Properties
Project, Ser B, COP, FSA
4.000%, 10/01/04 500 508
Los Angeles, Unified School
District, Ser A, TRAN
2.000%, 07/01/04 2,785 2,792
Los Angeles, United School
District, Ser B12, GO, MBIA
(A) (B)
1.050%, 01/01/27 3,995 3,995
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 38
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
Los Angeles, Wastewater System
Authority, Ser C, RB, FGIC
(A) (B)
1.250%, 12/01/31 $ 5,975 $ 5,975
Los Angeles, Water & Power
Resource Authority, RB
Pre-Refunded @ 101 (F)
6.000%, 02/15/05 1,000 1,054
Los Angeles, Water & Power
Resource Authority, Sub
Ser B-2, RB (A) (B)
1.010%, 07/01/34 2,000 2,000
Los Angeles, Water & Power
Resource Authority, Sub
Ser B-3, RB (A) (B)
1.120%, 07/01/34 2,000 2,000
Marysville, Joint Unified School
District, TRAN
1.750%, 11/25/04 4,000 4,017
Newport Beach, Hoag Memorial
Hospital, Ser A, RB (A) (B)
1.120%, 10/01/26 2,000 2,000
Newport Beach, Hoag Memorial
Hospital, Ser C, RB (A) (B)
1.120%, 10/01/26 5,500 5,500
Oakland, Capital Equipment
Project, COP (A) (B) (C)
1.030%, 12/01/15 4,390 4,390
Oakland, Joint Powers Financing
Authority, Ser A-2, RB,
FSA (A) (B)
1.020%, 08/01/21 10,000 10,000
Oakland, Liquidity Facilities
Authority, RB, ABAG
(A) (B) (C)
1.100%, 12/01/09 1,160 1,160
Orange County, Apartment
Development Authority, Harbor
Pointe - Issue D Project, RB
(A) (B)
1.010%, 12/01/22 1,900 1,900
Orange County, Apartment
Development Authority,
Hidden Hills Project,
Ser C, RB (A) (B)
1.060%, 11/01/09 3,200 3,200
Orange County, Apartment
Development Authority,
Riverbend Apartments Project,
Ser B, RB (A) (B) (C)
1.010%, 12/01/29 10,100 10,100
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
Orange County, Apartment
Development Authority, Seaside
Meadow Project, Ser C, RB
(A) (B) (D)
0.990%, 08/01/08 $ 1,300 $ 1,300
Orange County, Community Facilities
District Authority, Serrano
Heights-No. 91-2 Project,
Ser A, AMBAC
3.000%, 10/01/04 925 934
Orange County, Sanitation
District Authority, Ser B,
COP (A) (B)
1.100%, 08/01/30 9,390 9,390
Orange County, Water District
Authority, Ser A, COP (A) (B)
1.010%, 08/01/42 1,350 1,350
Pajaro Valley, School District
Authority, Bridge Funding
Project, COP, FSA (A) (B)
1.000%, 09/01/14 390 390
Pasadena, Rose Bowl
Improvements Project, COP
(A) (B) (C)
1.020%, 12/01/11 2,800 2,800
Redwood City, City Hall Project,
COP (A) (B) (C)
1.050%, 07/01/21 1,800 1,800
Riverside County, Asset Leasing
Authority, Southwest Justice
Center Project, Ser B, RB,
MBIA (A) (B)
1.010%, 11/01/32 800 800
Riverside County, Housing
Authority, De Anza Villas
Project, RB (A) (B) (C)
1.010%, 12/01/16 2,285 2,285
Riverside County, Housing
Authority, Polk Apartments
Limited LP, Ser B, RB
(A) (B) (D)
1.000%, 12/15/30 3,990 3,990
Riverside County, Ser C, COP
(A) (B) (C)
1.000%, 03/01/27 17,500 17,500
Riverside-San Bernardino,
Sub-Pass Thru Obligations,
Ser B, RB
1.050%, 07/01/06 1,350 1,350
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 39
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
Sacramento County, Housing
Authority, Bent Tree
Apartments Project, Ser A, RB
(A) (B) (D)
1.000%, 02/15/31 $ 2,500 $ 2,500
Sacramento County, Sanitation
District Finance Authority,
Ser 366, RB (A) (B)
1.020%, 12/01/27 1,000 1,000
Salinas, Multi-Family Housing
Authority, Brentwood Gardens
Project, RB (A) (B) (D)
1.000%, 05/15/27 3,780 3,780
San Bernardino County, Housing
Authority, Alta Loma Heritage
Project, Ser A, RB (A) (B) (C)
1.040%, 02/01/23 1,354 1,354
San Bernardino County, Housing
Authority, Reche Canyon
Apartment Project, Ser B, RB
(A) (B) (E)
0.980%, 06/01/05 3,500 3,500
San Bernardino County, Multi-
Family Housing Authority,
Mountain View Project, RB
(A) (B) (C)
1.010%, 03/01/27 2,210 2,210
San Bernardino County, Multi-
Family Housing Authority,
Parkview Plaza Project, Western
Land Properties, Ser A, RB
(A) (B) (C)
1.010%, 03/01/27 5,220 5,220
San Bernardino County, Multi-
Family Housing Authority,
Rosewood Apartment Project,
Ser A, RB (A) (B) (D)
1.010%, 05/15/29 2,725 2,725
San Diego, County & School
District, Ser B, RAN
1.750%, 06/30/04 12,000 12,024
San Diego, Museum of Art
Project, COP (A) (B) (C)
1.150%, 09/01/30 1,400 1,400
San Diego, TA, GO
1.750%, 06/30/04 1,000 1,002
San Diego, Unified School
District, Ser A, TRAN
2.000%, 06/30/04 1,250 1,253
San Diego, Water Authority,
Ser I, MBIA, COP (A) (B)
1.050%, 11/01/10 5,987 5,987
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
San Francisco (City & County),
Community Facilities District
No. 4, RB (A) (B) (C)
1.050%, 08/01/31 $ 8,560 $ 8,560
San Francisco (City & County),
Housing Authority, Bayside
Village Project D, Ser A, RB
(A) (B) (C)
1.020%, 12/01/05 20,500 20,500
San Francisco (City & County),
Housing Authority, Bayside
Village Project D, Ser B, RB
(A) (B) (C)
1.020%, 12/01/05 1,000 1,000
San Francisco (City & County),
Public Utilities Authority,
Ser B20, RB, MBIA (A) (B)
1.050%, 10/01/22 8,600 8,600
San Francisco, Bay Area Toll
Authority, Ser C, RB, AMBAC
(A) (B)
1.010%, 04/01/25 5,650 5,650
San Jose, Evergreen Community
College District, Ser J, GO,
MBIA (A) (B)
1.050%, 03/01/11 8,300 8,300
San Jose, Redevelopment Agency,
Merged Area Redevelopment
Project, Ser A, RB (A) (B) (C)
1.010%, 07/01/26 3,000 3,000
San Marcos, Industrial
Development Authority, Amistar
Project, RB (A) (B) (C)
1.000%, 12/01/05 2,580 2,580
San Mateo County, Joint Power
Authority, Health Care Center,
Ser A, RB
Pre-Refunded @ 102 (F)
5.750%, 07/15/04 500 517
Santa Clara County, East Side
United High School District,
TRAN
1.400%, 06/30/04 10,000 10,010
Santa Clara County, Financing
Authority, VMC Facility
Replacement Project,
Ser B, RB (A) (B)
1.000%, 11/15/25 11,200 11,200
Santa Clara County, Unified
School District, TRAN
1.400%, 06/30/04 10,500 10,512
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 40
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
Simi Valley, Multi-Family Housing
Authority, Lincoln Wood Ranch
Project, RB (A) (B) (D)
1.010%, 06/01/10 $10,000 $ 10,000
Southern California, Metropolitan
Water District Authority,
RB (A) (B)
1.100%, 07/01/25 8,800 8,800
Stockton, Multi-Family Housing
Authority, Mariners Pointe
Project, Ser A, RB (A) (B) (C)
1.020%, 09/01/18 2,100 2,100
Sunnyvale, Government Center
Site Acquisition Project, Ser A,
COP, AMBAC (A) (B)
1.000%, 04/01/31 4,700 4,700
Sweetwater, Unified High School
District Authority, COP,
FSA (A) (B)
1.000%, 06/01/13 7,000 7,000
Three Valleys, Municipal Water
District Authority, Miramar
Water Treatment Project,
COP (A) (B) (C)
1.020%, 11/01/14 4,700 4,700
Upland, Community
Redevelopment Authority,
Sunset Ridge & Village
Apartments Project,
RB (A) (B) (C)
1.010%, 12/01/29 6,700 6,700
Vacaville, Multi-Family Housing
Authority, Sycamores
Apartments Project,
Ser A, RB (A) (B) (E)
1.010%, 05/15/29 6,200 6,200
Westminster, Civic Center
Refinancing Program, Ser A,
COP, AMBAC (A) (B)
1.050%, 06/01/22 3,500 3,500
Westminster, Redevelopment
Agency, Commercial
Redevelopment Project, TA,
AMBAC (A) (B)
1.050%, 08/01/27 13,045 13,045
Yolo County, Multi-Family
Housing Authority, Primero
Grove Project, Ser A,
RB (A) (B) (C)
1.000%, 11/01/27 10,735 10,735
--------------------------------------------------------
TOTAL CALIFORNIA 668,080
========================================================
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
PUERTO RICO [3.6%]
Puerto Rico, Electric Power
Authority, RB, MBIA (A) (B)
1.050%, 07/01/20 $10,020 $ 10,020
Puerto Rico, Electric Power
Authority, Ser A-40, RB,
MBIA (A) (B)
1.050%, 07/01/23 2,000 2,000
Puerto Rico, Electric Power
Authority, Ser T, RB
Pre-Refunded @ 102 (F)
6.000%, 07/01/04 1,545 1,595
Puerto Rico, GO (A) (B)
1.020%, 07/01/17 4,495 4,495
Puerto Rico, Highway &
Transportation Authority, RB,
MBIA (A) (B)
1.010%, 01/01/08 6,000 6,000
Puerto Rico, Public
Improvements Project, GO
3.650%, 07/01/04 1,500 1,510
--------------------------------------------------------
TOTAL PUERTO RICO 25,620
========================================================
VARIOUS STATES [0.8%]
GAF, Tax Exempt Bond Grantor
Trust, RB (A) (B) (C)
1.550%, 10/01/12 5,885 5,885
========================================================
TOTAL MUNICIPAL BONDS
(Cost $699,585) 699,585
====================================================
TOTAL INVESTMENTS [98.9%]
(Cost $699,585) 699,585
====================================================
OTHER ASSETS AND LIABILITIES [1.1%]
Investment Advisory Fees Payable (103)
Shareholder Servicing Fees Payable (219)
Administration Fees Payable (61)
Other Assets and Liabilities, Net 7,842
--------------------------------------------------------
OTHER ASSETS AND LIABILITIES 7,459
====================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 41
<page>
statement of net assets
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONCLUDED)
DESCRIPTION VALUE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
FundShares -- Institutional Class
(unlimited authorization -- $0.01 par
value) based on 125,631,348 outstanding
shares of beneficial interest $125,632
FundShares -- Class A
(unlimited authorization -- $0.01 par
value) based on 547,058,422 outstanding
shares of beneficial interest 547,058
FundShares -- Class S
(unlimited authorization -- $0.01 par
value) based on 34,328,196 outstanding
shares of beneficial interest 34,328
Accumulated net realized gain
on investments 26
--------------------------------------------------------
TOTAL NET ASSETS [100.0%] $707,044
========================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($125,635,850 / 125,631,348 shares) $1.00
========================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($547,078,701 / 547,058,422 shares) $1.00
========================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class S
($34,329,285 / 34,328,196 shares) $1.00
========================================================
DESCRIPTION
- --------------------------------------------------------------------------------
(A) FLOATING RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON MARCH 31, 2004.
(B) PUT AND DEMAND FEATURE -- THE DATE REPORTED ON THE STATEMENT OF NET ASSETS
IS THE FINAL MATURITY, NOT THE NEXT RESET OR PUT DATE.
(C) SECURITIES ARE HELD IN CONJUNCTION WITH A LETTER OF CREDIT FROM A MAJOR BANK
OR FINANCIAL INSTITUTION. (D) SECURITIES ARE COLLATERALIZED UNDER AN
AGREEMENT FROM FHLMC/FNMA.
(E) SECURITY DERIVES FROM A GUARANTEED AGREEMENT.
(F) PRE-REFUNDED SECURITY - THE MATURITY DATE SHOWN IS THE PRE-REFUNDED DATE.
ABAG -- ASSOCIATION OF BAY AREA GOVERNMENTS
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
BAN -- BOND ANTICIPATION NOTE
COP -- CERTIFICATE OF
PARTICIPATION
ETM -- ESCROWED TO MATURITY
FGIC -- FINANCIAL GUARANTY INSURANCE COMPANY
FHLMC --FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
FSA -- FINANCIAL SECURITY ASSISTANCE
GO -- GENERAL OBLIGATION
LP -- LIMITED PARTNERSHIP
MBIA -- MUNICIPAL BOND INSURANCE ASSOCIATION
RAN -- REVENUE ANTICIPATION NOTE
RB -- REVENUE BOND
SER -- SERIES
TA -- TAX ALLOCATION
TRAN -- TAX & REVENUE ANTICIPATION NOTE
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI Charter Funds | PAGE 42
<page>
statements of operations
FOR THE SIX MONTHS ENDED MARCH 31, 2004 (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------
Large Cap Value Large Cap Growth RCB Small Cap Technology
Equity Fund Equity Fund Value Fund Growth Fund
(000) (000) (000) (000)
----------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividend $ 377 $ 156 $ 240 $ 4
Interest 4 4 14 --
Less: Foreign tax withheld -- -- (1) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investment Income 381 160 253 4
- ------------------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Investment Advisory Fees 122 89 124 10
Shareholder Servicing Fees--Institutional Class 46 31 9 1
Shareholder Servicing Fees--Class A(1) 7 7 10 3
Shareholder Servicing Fees--Class R(1) -- -- 45 --
Administrative Fees 18 14 14 1
Professional Fees 2 1 1 --
Transfer Agent Fees 2 1 1 --
Printing Fees 1 -- 1 --
Registration and Filing Fees 1 -- -- 1
Insurance and Other Fees 1 1 1 --
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 200 144 206 16
- ------------------------------------------------------------------------------------------------------------------------------------
Recapture of Investment Advisory Fees Waived(2) 3 4 4 --
Less, Waiver of:
Investment Advisory Fees -- -- -- (1)
Transfer Agent Fees (2) (1) (1) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Expenses 201 147 209 15
- ------------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) 180 13 44 (11)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) From Security Transactions 1,662 291 2,212 (117)
Net Change in Unrealized Appreciation
on Investments 4,368 2,067 2,638 321
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $6,210 $2,371 $4,894 $ 193
====================================================================================================================================
<FN>
(1)INCLUDES CLASS SPECIFIC DISTRIBUTION EXPENSES.
(2)SEE NOTE 4 FOR ADVISORY FEES RECAPTURED.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
</FN>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 43
<page>
statements of operations
FOR THE SIX MONTHS ENDED MARCH 31, 2004 (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------
California
Corporate Government Tax Exempt High Yield
Bond Fund Bond Fund Bond Fund Bond Fund
(000) (000) (000) (000)
------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $1,015 $ 260 $257 $1,521
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investment Income 1,015 260 257 1,521
- ------------------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Investment Advisory Fees 87 37 23 129
Shareholder Servicing Fees--Institutional Class 53 21 20 18
Shareholder Servicing Fees--Class A(1) 2 - 3 55
Administrative Fees 20 8 8 16
Professional Fees 2 1 1 2
Transfer Agent Fees 2 1 1 1
Custodian Fees 1 -- -- 1
Printing Fees 1 -- -- 1
Registration and Filing Fees -- -- -- 1
Insurance and Other Fees 2 1 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
Total Expenses 170 69 57 225
- ------------------------------------------------------------------------------------------------------------------------------------
Less, Waiver of:
Investment Advisory Fees (5) (8) (12) (22)
Transfer Agent Fees (2) (1) (1) (1)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Expenses 163 60 44 202
- ------------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 852 200 213 1,319
- ------------------------------------------------------------------------------------------------------------------------------------
Net Realized Gain From Security Transactions 347 144 40 212
Net Change in Unrealized Appreciation (Depreciation)
on Investments (147) (181) (19) 947
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $1,052 $ 163 $234 $2,478
====================================================================================================================================
<FN>
(1)INCLUDES CLASS SPECIFIC DISTRIBUTION EXPENSES.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
</FN>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 44
<page>
statements of operations
FOR THE SIX MONTHS ENDED MARCH 31, 2004 (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------
California
Prime Government Tax Exempt
Money Money Money
Market Fund Market Fund Market Fund
(000) (000) (000)
------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $3,261 $12,648 $3,496
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investment Income 3,261 12,648 3,496
- ------------------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Investment Advisory Fees 746 2,971 945
Shareholder Servicing Fees--Institutional Class 366 68 131
Shareholder Servicing Fees--Class A(1) 712 7,632 2,101
Shareholder Servicing Fees--Class S(1) 428 747 131
Administrative Fees 278 1,082 326
Professional Fees 27 94 28
Transfer Agent Fees 26 98 30
Custodian Fees 19 69 16
Printing Fees 14 50 16
Trustee Fees 5 19 6
Registration and Filing Fees 4 18 6
Insurance and Other Fees 18 62 21
- ------------------------------------------------------------------------------------------------------------------------------------
Total Expenses 2,643 12,910 3,757
- ------------------------------------------------------------------------------------------------------------------------------------
Recapture of Investment Advisory Fees Waived(2) 28 -- --
Less, Waiver of:
Investment Advisory Fees -- (2) (308)
Shareholder Servicing Fees--Class A(1) (266) (2,855) (773)
Shareholder Servicing Fees--Class S(1) (88) (145) (31)
Administrative Fees (6) (10) (5)
Transfer Agent Fees (26) (98) (30)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Expenses 2,285 9,800 2,610
- ------------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 976 2,848 886
- ------------------------------------------------------------------------------------------------------------------------------------
Net Realized Gain from Security Transactions -- -- 25
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 976 $ 2,848 $ 911
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
(1)INCLUDES CLASS SPECIFIC DISTRIBUTION EXPENSES.
(2)SEE NOTE 4 FOR ADVISORY FEES RECAPTURED.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
</FN>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 45
<page>
statements of changes in net assets
FOR THE SIX MONTHS ENDED MARCH 31, 2004 (UNAUDITED) AND THE YEAR ENDED SEPTEMBER 30, 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Large Cap Value Large Cap Growth
Equity Fund (000) Equity Fund (000)
----------------------------------- -----------------------------------
2004 2003 2004 2003
- ----------------------------------------------------------------------------------------- -----------------------------------
OPERATIONS:
Net Investment Income (Loss) $ 180 $ 336 $ 13 $ 29
Net Realized Gain (Loss) from
Security Transactions 1,662 (230) 291 (274)
Net Change in Unrealized Appreciation
(Depreciation) on Investments 4,368 6,334 2,067 4,023
- ----------------------------------------------------------------------------------------- -----------------------------------
Net Increase in Net Assets
Resulting from Operations 6,210 6,440 2,371 3,778
- ----------------------------------------------------------------------------------------- -----------------------------------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net Investment Income:
INSTITUTIONAL CLASS (168) (326) (17) (29)
CLASS A (12) (10) -- --
Realized Capital Gains:
INSTITUTIONAL CLASS -- -- -- --
CLASS A -- -- -- --
CLASS R -- -- -- --
- ----------------------------------------------------------------------------------------- -----------------------------------
Total Dividends and Distributions (180) (336) (17) (29)
- ----------------------------------------------------------------------------------------- -----------------------------------
CAPITAL SHARE TRANSACTIONS:(1)
INSTITUTIONAL CLASS:
Shares Issued 3,991 9,863 4,407 9,131
Shares Issued in Lieu of Dividends and Distributions 38 75 5 9
Shares Redeemed (4,933) (6,133) (2,819) (4,620)
- ----------------------------------------------------------------------------------------- -----------------------------------
Increase (Decrease) in Net Assets from
Institutional Class Share Transactions (904) 3,805 1,593 4,520
- ----------------------------------------------------------------------------------------- -----------------------------------
CLASS A:
Shares Issued 2,858 949 1,762 1,028
Shares Issued in Lieu of Dividends and Distributions 9 8 -- --
Shares Redeemed (328) (152) (344) (76)
- ----------------------------------------------------------------------------------------- -----------------------------------
Increase in Net Assets from
Class A Share Transactions 2,539 805 1,418 952
- ----------------------------------------------------------------------------------------- -----------------------------------
CLASS R:
Shares Issued -- -- -- --
Shares Issued in Lieu of Dividends and Distributions -- -- -- --
Shares Redeemed -- -- -- --
- ----------------------------------------------------------------------------------------- -----------------------------------
Increase (Decrease) in Net Assets from
Class R Share Transactions -- -- -- --
- ----------------------------------------------------------------------------------------- -----------------------------------
Net Increase in Net Assets from
Share Transactions 1,635 4,610 3,011 5,472
- ----------------------------------------------------------------------------------------- -----------------------------------
Total Increase in Net Assets 7,665 10,714 5,365 9,221
- ----------------------------------------------------------------------------------------- -----------------------------------
NET ASSETS:
Beginning of period 34,808 24,094 24,214 14,993
- ----------------------------------------------------------------------------------------- -----------------------------------
End of period $42,473 $34,808 $29,579 $24,214
========================================================================================= ===================================
Undistributed Net Investment Income/Distributions
in Excess of Net Investment Income or Accumulated
Net Investment Loss $ -- $ -- $ (4) $ --
- ----------------------------------------------------------------------------------------- -----------------------------------
<FN>
(1)SEE NOTE 8 FOR SHARES ISSUED AND REDEEMED.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
</FN>
CNI CHARTER FUNDS | PAGE 46
<page>
- ------------------------------------------------------------------------------------------------------------------------------------
RCB Small Cap Technology Growth Corporate Bond
Value Fund (000) Fund (000) Fund (000)
------------------------- ----------------------- -------------------------
2004 2003 2004 2003 2004 2003
- -------------------------------------------------------------------------------- ----------------------- -------------------------
OPERATIONS:
Net Investment Income (Loss) $ 44 $ (59) $ (11) $ (14) $ 852 $ 1,843
Net Realized Gain (Loss) from
Security Transactions 2,212 97 (117) (330) 347 764
Net Change in Unrealized Appreciation
(Depreciation) on Investments 2,638 5,967 321 934 (147) 212
- -------------------------------------------------------------------------------- ----------------------- -------------------------
Net Increase in Net Assets
Resulting from Operations 4,894 6,005 193 590 1,052 2,819
- -------------------------------------------------------------------------------- ----------------------- -------------------------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net Investment Income:
INSTITUTIONAL CLASS -- -- -- -- (837) (1,814)
CLASS A -- -- -- -- (14) (29)
Realized Capital Gains:
INSTITUTIONAL CLASS (24) -- -- -- (412) --
CLASS A (11) -- -- -- (5) --
CLASS R (53) -- -- -- -- --
- -------------------------------------------------------------------------------- ----------------------- -------------------------
Total Dividends and Distributions (88) -- -- -- (1,268) (1,843)
- -------------------------------------------------------------------------------- ----------------------- -------------------------
CAPITAL SHARE TRANSACTIONS:(1)
INSTITUTIONAL CLASS:
Shares Issued 2,585 3,658 183 447 8,253 11,836
Shares Issued in Lieu of Dividends and Distributions 14 -- -- -- 218 327
Shares Redeemed (2,636) (609) (92) (418) (5,921) (11,675)
- -------------------------------------------------------------------------------- ----------------------- -------------------------
Increase (Decrease) in Net Assets from
Institutional Class Share Transactions (37) 3,049 91 29 2,550 488
- -------------------------------------------------------------------------------- ----------------------- -------------------------
CLASS A:
Shares Issued 4,519 1,739 556 249 546 467
Shares Issued in Lieu of Dividends and Distributions 8 -- -- -- 15 14
Shares Redeemed (1,135) (137) (188) (2) (349) (210)
- -------------------------------------------------------------------------------- ----------------------- -------------------------
Increase in Net Assets from
Class A Share Transactions 3,392 1,602 368 247 212 271
- -------------------------------------------------------------------------------- ----------------------- -------------------------
CLASS R:
Shares Issued 5,756 1,791 -- -- -- --
Shares Issued in Lieu of Dividends and Distributions 52 -- -- -- -- --
Shares Redeemed (1,218) (1,912) -- -- -- --
- -------------------------------------------------------------------------------- ----------------------- -------------------------
Increase (Decrease) in Net Assets from
Class R Share Transactions 4,590 (121) -- -- -- --
- -------------------------------------------------------------------------------- ----------------------- -------------------------
Net Increase in Net Assets from
Share Transactions 7,945 4,530 459 276 2,762 759
- -------------------------------------------------------------------------------- ----------------------- -------------------------
Total Increase in Net Assets 12,751 10,535 652 866 2,546 1,735
- -------------------------------------------------------------------------------- ----------------------- -------------------------
NET ASSETS:
Beginning of period 22,887 12,352 1,863 997 43,086 41,351
- -------------------------------------------------------------------------------- ----------------------- -------------------------
End of period $35,638 $22,887 $2,515 $1,863 $45,632 $ 43,086
================================================================================ ======================= =========================
Undistributed Net Investment Income/Distributions
in Excess of Net Investment Income or Accumulated
Net Investment Loss $ 44 $ -- $ (11) $ -- $ 1 $ --
- -------------------------------------------------------------------------------- ----------------------- -------------------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 47
statements of changes in net assets
FOR THE SIX MONTHS ENDED MARCH 31, 2004 (UNAUDITED) AND THE YEAR ENDED SEPTEMBER 30, 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Government California Tax Exempt
Bond Fund (000) Bond Fund (000)
-------------------------------------- ------------------------------------
2004 2003 2004 2003
- ------------------------------------------------------------------------------------------- ------------------------------------
OPERATIONS:
Net Investment Income $ 200 $ 506 $ 213 $ 437
Net Realized Gain (Loss) from
Security Transactions 144 225 40 209
Net Change in Unrealized Appreciation
(Depreciation) on Investments (181) (337) (19) (261)
- ------------------------------------------------------------------------------------------- ------------------------------------
Net Increase in Net Assets
Resulting from Operations 163 394 234 385
- ------------------------------------------------------------------------------------------- ------------------------------------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net Investment Income:
INSTITUTIONAL CLASS (199) (502) (200) (440)
CLASS A (1) (17) (12) (10)
CLASS S -- -- -- --
Realized Capital Gains:
INSTITUTIONAL CLASS (210) (20) (189) (275)
CLASS A (1) (1) (13) (3)
CLASS S -- -- -- --
- ------------------------------------------------------------------------------------------- ------------------------------------
Total Dividends and Distributions (411) (540) (414) (728)
- ------------------------------------------------------------------------------------------- ------------------------------------
CAPITAL SHARE TRANSACTIONS:(1)
INSTITUTIONAL CLASS:
Shares Issued 5,419 6,897 3,561 2,552
Shares Issued in Lieu of Dividends and Distributions 118 111 54 84
Shares Redeemed (1,417) (5,779) (704) (3,900)
- ------------------------------------------------------------------------------------------- ------------------------------------
Increase (Decrease) in Net Assets from
Institutional Class Share Transactions 4,120 1,229 2,911 (1,264)
- ------------------------------------------------------------------------------------------- ------------------------------------
CLASS A:
Shares Issued 94 332 643 805
Shares Issued in Lieu of Dividends and Distributions 2 4 16 5
Shares Redeemed -- (832) (35) (85)
- ------------------------------------------------------------------------------------------- ------------------------------------
Increase (Decrease) in Net Assets from
Class A Share Transactions 96 (496) 624 725
- ------------------------------------------------------------------------------------------- ------------------------------------
CLASS S:
Shares Issued -- -- -- --
Shares Issued in Lieu of Dividends and Distributions -- -- -- --
Shares Redeemed -- -- -- --
- ------------------------------------------------------------------------------------------- ------------------------------------
Increase (Decrease) in Net Assets from
Class S Share Transactions -- -- -- --
- ------------------------------------------------------------------------------------------- ------------------------------------
Net Increase (Decrease) in Net Assets from
Share Transactions 4,216 733 3,535 (539)
- ------------------------------------------------------------------------------------------- ------------------------------------
Total Increase (Decrease) in Net Assets 3,968 587 3,355 (882)
- ------------------------------------------------------------------------------------------- ------------------------------------
NET ASSETS:
Beginning of period 15,614 15,027 15,278 16,160
- ------------------------------------------------------------------------------------------- ------------------------------------
End of period $19,582 $15,614 $18,633 $15,278
=========================================================================================== ====================================
Undistributed Net Investment Income/(Distributions
in Excess of Net Investment Income) $ -- $ -- $ 1 $ --
- ------------------------------------------------------------------------------------------- ------------------------------------
<FN>
(1)SEE NOTE 8 FOR SHARES ISSUED AND REDEEMED.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
</FN>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 48
<page>
- ------------------------------------------------------------------------------------------------------------------------------------
High Yield Prime Money
Bond Fund (000) Market Fund (000)
-------------------------------------- ------------------------------------
2004 2003 2004 2003
- ------------------------------------------------------------------------------------------- ------------------------------------
OPERATIONS:
Net Investment Income $ 1,319 $ 1,993 $ 976 $ 3,295
Net Realized Gain (Loss) from
Security Transactions 212 (234) -- 77
Net Change in Unrealized Appreciation
(Depreciation) on Investments 947 2,298 -- --
- ------------------------------------------------------------------------------------------- ------------------------------------
Net Increase in Net Assets
Resulting from Operations 2,478 4,057 976 3,372
- ------------------------------------------------------------------------------------------- ------------------------------------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net Investment Income:
INSTITUTIONAL CLASS (570) (1,009) (684) (1,920)
CLASS A (738) (981) (234) (1,024)
CLASS S -- -- (69) (366)
Realized Capital Gains:
INSTITUTIONAL CLASS -- -- -- --
CLASS A -- -- -- --
CLASS S -- -- -- --
- ------------------------------------------------------------------------------------------- ------------------------------------
Total Dividends and Distributions (1,308) (1,990) (987) (3,310)
- ------------------------------------------------------------------------------------------- -----------------------------------
CAPITAL SHARE TRANSACTIONS:(1)
INSTITUTIONAL CLASS:
Shares Issued 4,553 3,212 494,852 854,421
Shares Issued in Lieu of Dividends and Distributions 321 596 149 407
Shares Redeemed (812) (1,489) (481,376) (858,546)
- ------------------------------------------------------------------------------------------- ------------------------------------
Increase (Decrease) in Net Assets from
Institutional Class Share Transactions 4,062 2,319 13,625 (3,718)
- ------------------------------------------------------------------------------------------- ------------------------------------
CLASS A:
Shares Issued 9,665 10,988 347,395 617,388
Shares Issued in Lieu of Dividends and Distributions 427 640 68 276
Shares Redeemed (7,018) (5,166) (385,449) (641,303)
- ------------------------------------------------------------------------------------------- ------------------------------------
Increase (Decrease) in Net Assets from
Class A Share Transactions 3,074 6,462 (37,986) (23,639)
- ------------------------------------------------------------------------------------------- ------------------------------------
CLASS S:
Shares Issued -- -- 226,522 381,285
Shares Issued in Lieu of Dividends and Distributions -- -- -- --
Shares Redeemed -- -- (239,571) (391,853)
- ------------------------------------------------------------------------------------------- ------------------------------------
Increase (Decrease) in Net Assets from
Class S Share Transactions -- -- (13,049) (10,568)
- ------------------------------------------------------------------------------------------- ------------------------------------
Net Increase (Decrease) in Net Assets from
Share Transactions 7,136 8,781 (37,410) (37,925)
- ------------------------------------------------------------------------------------------- ------------------------------------
Total Increase (Decrease) in Net Assets 8,306 10,848 (37,421) (37,863)
- ------------------------------------------------------------------------------------------- ------------------------------------
NET ASSETS:
Beginning of period 30,265 19,417 610,902 648,765
- ------------------------------------------------------------------------------------------- ------------------------------------
End of period $38,571 $30,265 $ 573,481 $ 610,902
=========================================================================================== ====================================
Undistributed Net Investment Income/(Distributions
in Excess of Net Investment Income) $ (3) $ (14) $ -- $ 11
- ------------------------------------------------------------------------------------------- ------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Government Money California Tax Exempt
Market Fund (000) Money Market Fund (000)
-------------------------------------- ------------------------------------
2004 2003 2004 2003
- ------------------------------------------------------------------------------------------- ------------------------------------
OPERATIONS:
Net Investment Income $ 2,848 $ 11,320 $ 886 $ 2,993
Net Realized Gain (Loss) from
Security Transactions -- 61 25 20
Net Change in Unrealized Appreciation
(Depreciation) on Investments -- -- -- --
- ------------------------------------------------------------------------------------------- ------------------------------------
Net Increase in Net Assets
Resulting from Operations 2,848 11,381 911 3,013
- ------------------------------------------------------------------------------------------- ------------------------------------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net Investment Income:
INSTITUTIONAL CLASS (129) (375) (233) (488)
CLASS A (2,599) (10,315) (631) (2,422)
CLASS S (120) (666) (22) (83)
Realized Capital Gains:
INSTITUTIONAL CLASS -- -- -- --
CLASS A -- -- -- --
CLASS S -- -- -- --
- ------------------------------------------------------------------------------------------- ------------------------------------
Total Dividends and Distributions (2,848) (11,356) (886) (2,993)
- ------------------------------------------------------------------------------------------- ------------------------------------
CAPITAL SHARE TRANSACTIONS:(1)
INSTITUTIONAL CLASS:
Shares Issued 354,163 619,561 554,324 724,038
Shares Issued in Lieu of Dividends and Distributions -- -- -- --
Shares Redeemed (365,272) (614,704) (516,512) (695,143)
- ------------------------------------------------------------------------------------------- ------------------------------------
Increase (Decrease) in Net Assets from
Institutional Class Share Transactions (11,109) 4,857 37,812 28,895
- ------------------------------------------------------------------------------------------- ------------------------------------
CLASS A:
Shares Issued 2,316,401 4,182,886 579,456 1,144,275
Shares Issued in Lieu of Dividends and Distributions 1,832 7,038 533 2,108
Shares Redeemed (2,536,706) (4,278,238) (572,112) (1,126,487)
- ------------------------------------------------------------------------------------------- ------------------------------------
Increase (Decrease) in Net Assets from
Class A Share Transactions (218,473) (88,314) 7,877 19,896
- ------------------------------------------------------------------------------------------- ------------------------------------
CLASS S:
Shares Issued 276,813 601,546 101,856 145,218
Shares Issued in Lieu of Dividends and Distributions -- -- -- --
Shares Redeemed (272,400) (629,397) (91,530) (150,843)
- ------------------------------------------------------------------------------------------- ------------------------------------
Increase (Decrease) in Net Assets from
Class S Share Transactions 4,413 (27,851) 10,326 (5,625)
- ------------------------------------------------------------------------------------------- ------------------------------------
Net Increase (Decrease) in Net Assets from
Share Transactions (225,169) (111,308) 56,015 43,166
- ------------------------------------------------------------------------------------------- ------------------------------------
Total Increase (Decrease) in Net Assets (225,169) (111,283) 56,040 43,186
- ------------------------------------------------------------------------------------------- ------------------------------------
NET ASSETS:
Beginning of period 2,309,240 2,420,523 651,004 607,818
- ------------------------------------------------------------------------------------------- ------------------------------------
End of period $ 2,084,071 $ 2,309,240 $ 707,044 $ 651,004
=========================================================================================== ====================================
Undistributed Net Investment Income/(Distributions
in Excess of Net Investment Income) $ -- $ -- $ -- $ --
- ------------------------------------------------------------------------------------------- ------------------------------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 49
<page>
financial highlights
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE SIX MONTHS ENDED MARCH 31, 2004 (UNAUDITED) AND THE YEAR OR PERIOD ENDED SEPTEMBER 30,
- ------------------------------------------------------------------------------------------------------------------------------------
NET
NET REALIZED AND DISTRIBUTIONS NET
ASSET NET UNREALIZED DIVIDENDS FROM ASSET
VALUE INVESTMENT GAINS (LOSSES) FROM NET RETURN REALIZED VALUE
BEGINNING INCOME ON INVESTMENT OF CAPITAL END
OF PERIOD (LOSS) SECURITIES INCOME CAPITAL GAINS OF PERIOD
- ------------------------------------------------------------------------------------------------------------------------------------
Large Cap Value Equity Fund
Institutional Class (commenced operations on January 14, 2000)
2004* $ 7.41 $ 0.04^ $ 1.28^ $(0.04) $ -- $ -- $ 8.69
2003 6.04 0.07 1.37 (0.07) -- -- 7.41
2002 7.63 0.07 (1.47) (0.07) -- (0.12) 6.04
2001 10.04 0.07 (1.57) (0.07) -- (0.84) 7.63
2000 10.00 0.06 0.04 (0.06) -- -- 10.04
Class A (commenced operations on April 13, 2000)
2004* $ 7.41 $ 0.03^ $ 1.28^ $(0.03) $ -- $ -- $ 8.69
2003 6.04 0.06 1.37 (0.06) -- -- 7.41
2002 7.62 0.05 (1.46) (0.05) -- (0.12) 6.04
2001 10.04 0.04 (1.58) (0.04) -- (0.84) 7.62
2000 9.55 0.03 0.49 (0.03) -- -- 10.04
- ------------------------------------------------------------------------------------------------------------------------------------
Large Cap Growth Equity Fund
Institutional Class (commenced operations on January 14, 2000)
2004* $ 6.37 $ --^ $ 0.61^ $(0.00)^^ $ -- $ -- $ 6.98
2003 5.25 0.01^ 1.12^ (0.01) -- -- 6.37
2002 6.36 $ -- (1.11) -- -- -- 5.25
2001 9.37 (0.02) (2.99) -- -- -- 6.36
2000 10.00 (0.02) (0.61) -- -- -- 9.37
Class A (commenced operations on March 28, 2000)
2004* $ 6.32 $ --^ $ 0.60^ $(0.00)^^ $ -- $ -- $ 6.92
2003 5.21 (0.01)^ 1.12^ -- -- -- 6.32
2002 6.33 (0.02) (1.10) -- -- -- 5.21
2001 9.35 (0.03) (2.99) -- -- -- 6.33
2000 10.70 (0.01) (1.34) -- -- -- 9.35
- ------------------------------------------------------------------------------------------------------------------------------------
RCB Small Cap Value Fund
Institutional Class (commenced operations on October 3, 2001)
2004* $21.92 $ 0.06^ $ 4.27^ $ -- $ -- $(0.08) $26.17
2003 15.06 (0.04)^ 6.90^ -- -- -- 21.92
2002 17.11 (0.07) (1.98) -- -- -- 15.06
Class A (commenced operations on October 3, 2001)
2004* $21.84 $ 0.03^ $ 4.24^ $ -- $ -- $(0.08) $26.03
2003 15.04 (0.08)^ 6.88^ -- -- -- 21.84
2002 17.11 (0.05) (2.02) -- -- -- 15.04
Class R (commenced operations on September 30, 1998)(2)
2004* $21.81 $ 0.03^ $ 4.24^ $ -- $ -- $(0.08) $26.00
2003 15.02 (0.07)^ 6.86^ -- -- -- 21.81
2002 16.94 (0.12) (1.80) -- -- -- 15.02
2001** 18.84 (0.02) (1.88) -- -- -- 16.94
2001+ 15.80 (0.09) 3.85 -- (0.35) (0.37) 18.84
2000+ 15.93 (0.06) 0.52 -- -- (0.59) 15.80
1999+ 10.00 (0.02) 5.95 -- -- -- 15.93
- ------------------------------------------------------------------------------------------------------------------------------------
Technology Growth Fund
Institutional Class (commenced operations on October 3, 2000)
2004* $ 3.50 $(0.02)^ $ 0.42^ $ -- $ -- $ -- $ 3.90
2003 2.26 (0.02) 1.26 -- -- -- 3.50
2002 3.54 (0.03) (1.25) -- -- -- 2.26
2001 10.00 (0.02) (6.43) (0.01) -- -- 3.54
Class A (commenced operations on October 23, 2000)
2004* $ 3.48 $(0.02)^ $ 0.40^ $ -- $ -- $ -- $ 3.86
2003 2.25 (0.03) 1.26 -- -- -- 3.48
2002 3.54 (0.04) (1.25) -- -- -- 2.25
2001 10.31 (0.03) (6.73) (0.01) -- -- 3.54
- ------------------------------------------------------------------------------------------------------------------------------------
RATIO
OF EXPENSES
RATIO TO AVERAGE
NET OF NET NET ASSETS
ASSETS RATIO INVESTMENT (EXCLUDING
END OF EXPENSES INCOME (LOSS) WAIVERS & PORTFOLIO
TOTAL OF PERIOD TO AVERAGE TO AVERAGE RECAPTURE TURNOVER
RETURN+++ (000) NET ASSETS(1) NET ASSETS(1) FEES)(1) RATE
- ------------------------------------------------------------------------------------------------------------------------------------
Large Cap Value Equity Fund
Institutional Class (commenced operations on January 14, 2000)
2004* 17.80% $37,772 1.00% 0.94% 1.00% 17%
2003 24.03 33,016 1.00 1.12 1.00 39
2002 (18.88) 23,325 1.00 0.90 1.05 42
2001 (16.36) 27,293 1.00 0.74 1.09 51
2000 0.99 29,344 1.00 0.87 1.12 38
Class A (commenced operations on April 13, 2000)
2004* 17.68% $ 4,701 1.25% 0.62% 1.25% 17%
2003 23.75 1,792 1.25 0.84 1.25 39
2002 (18.97) 769 1.25 0.65 1.30 42
2001 (16.68) 704 1.25 0.49 1.34 51
2000 5.48 732 1.25 0.62 1.37 38
- ------------------------------------------------------------------------------------------------------------------------------------
Large Cap Growth Equity Fund
Institutional Class (commenced operations on January 14, 2000)
2004* 9.65% $25,991 1.05% 0.12% 1.02% 20%
2003 21.51 22,249 1.05 0.16 1.03 43
2002 (17.45) 14,195 1.05 (0.04) 1.09 31
2001 (32.12) 15,550 1.05 (0.22) 1.13 58
2000 (6.30) 21,639 1.05 (0.31) 1.16 51
Class A (commenced operations on March 28, 2000)
2004* 9.51% $ 3,588 1.30% (0.13)% 1.27% 20%
2003 21.31 1,965 1.30 (0.09) 1.29 43
2002 (17.69) 798 1.30 (0.29) 1.34 31
2001 (32.30) 636 1.30 (0.47) 1.38 58
2000 (12.62) 592 1.30 (0.56) 1.41 51
- ------------------------------------------------------------------------------------------------------------------------------------
RCB Small Cap Value Fund
Institutional Class (commenced operations on October 3, 2001)
2004* 19.79% $ 7,411 1.24% 0.53% 1.22% 29%
2003 45.55 6,236 1.24 (0.20) 1.24 65
2002 (11.98) 1,768 1.24 (0.46) 1.28 39
Class A (commenced operations on October 3, 2001)
2004* 19.59% $ 6,394 1.49% 0.26% 1.47% 29%
2003 45.21 2,384 1.49 (0.45) 1.49 65
2002 (12.10) 410 1.49 (0.74) 1.53 39
Class R (commenced operations on September 30, 1998)(2)
2004* 19.62% $21,833 1.49% 0.23% 1.47% 29%
2003 45.21 14,267 1.49 (0.41) 1.49 65
2002 (11.33) 10,174 1.49 (0.70) 1.53 39
2001** (10.08) 8,122 1.26 (0.51) 2.63 5
2001+ 24.34 8,869 1.49 (0.69) 2.85 43
2000+ 3.28 5,193 1.49 (0.50) 3.49 60
1999+ 59.30 3,156 1.49 (0.33) 7.76 36
- ------------------------------------------------------------------------------------------------------------------------------------
Technology Growth Fund
Institutional Class (commenced operations on October 3, 2000)
2004* 11.43% $ 1,106 1.20% (0.81)% 1.29% 15%
2003 54.87 913 1.20 (0.78) 1.36 29
2002 (36.16) 565 1.20 (0.88) 1.37 24
2001 (64.56) 907 1.20 (0.38)++ 1.41 23
Class A (commenced operations on October 23, 2000)
2004* 10.92% $ 1,409 1.50% (1.10)% 1.59% 15%
2003 54.67 950 1.50 (1.08) 1.66 29
2002 (36.44) 432 1.50 (1.18) 1.67 24
2001 (65.37) 481 1.50 (1.04)++ 1.71 23
<FN>
* FOR THE SIX MONTH PERIOD ENDED MARCH 31, 2004. ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
** FOR THE THREE MONTH PERIOD ENDING SEPTEMBER 30, 2001.
+ FOR THE YEARS ENDING JUNE 30.
++ RATIOS REFLECT THE IMPACT OF THE INITIAL LOW LEVEL OF AVERAGE NET ASSETS ASSOCIATED WITH COMMENCEMENT OF OPERATIONS AND THE
EFFECTS OF ANNUALIZATION.
+++ RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED. FEE WAIVERS ARE IN EFFECT; IF THEY HAD NOT BEEN IN EFFECT,
PERFORMANCE WOULD HAVE BEEN LOWER. TOTAL RETURN FIGURES DO NOT INCLUDE APPLICABLE SALES LOADS. RETURNS SHOWN DO NOT REFLECT THE
DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
^ PER SHARE CALCULATIONS ARE BASED ON AVERAGE SHARES METHOD.
^^ AMOUNT REPRESENTS LESS THAN $0.01 PER SHARE.
(1) ANNUALIZED.
(2) ON OCTOBER 3, 2001, THE RCBSMALL CAP FUND EXCHANGED ALL OF ITS ASSETS AND LIABILITIES FOR SHARES OF THE CNI CHARTER RCB SMALL
CAP VALUE FUND. THE CNI CHARTER RCB SMALL CAP VALUE FUND IS THE ACCOUNTING SURVIVOR IN THIS TRANSACTION, AND AS A RESULT, ITS
BASIS OF ACCOUNTING FOR ASSETS AND LIABILITIES AND ITS OPERATING RESULTS FOR THE PERIODS PRIOR TO OCTOBER 3, 2001 HAVE BEEN
CARRIED FORWARD IN THESE FINANCIAL HIGHLIGHTS.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
</FN>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 50
<page>
- ------------------------------------------------------------------------------------------------------------------------------------
NET
NET REALIZED AND DISTRIBUTIONS NET
ASSET UNREALIZED DIVIDENDS FROM ASSET
VALUE NET GAINS (LOSSES) FROM NET REALIZED VALUE
BEGINNING INVESTMENT ON INVESTMENT CAPITAL END TOTAL
OF PERIOD INCOME SECURITIES INCOME GAINS OF PERIOD RETURN++
- ------------------------------------------------------------------------------------------------------------------------------------
Corporate Bond Fund
Institutional Class (commenced operations on January 14, 2000)
2004* $10.89 $0.21^ $ 0.05^ $(0.21) $(0.11) $10.83 2.45%
2003 10.65 0.46 0.24 (0.46) -- 10.89 6.74
2002 10.72 0.53 0.09 (0.53) (0.16) 10.65 6.06
2001 10.14 0.60 0.60 (0.60) (0.02) 10.72 12.14
2000 10.00 0.42 0.14 (0.42) -- 10.14 5.76
Class A (commenced operations on April 13, 2000)
2004* $10.89 $0.20^ $ 0.05^ $(0.20) $(0.11) $10.83 2.32%
2003 10.65 0.44 0.23 (0.43) -- 10.89 6.47
2002 10.73 0.50 0.08 (0.50) (0.16) 10.65 5.69
2001 10.13 0.57 0.62 (0.57) (0.02) 10.73 12.08
2000 10.06 0.31 0.07 (0.31) -- 10.13 3.81
- ------------------------------------------------------------------------------------------------------------------------------------
Government Bond Fund
Institutional Class (commenced operations on January 14, 2000)
2004* $10.93 $0.13^ $(0.04)^ $(0.13) $(0.14) $10.75 0.81%
2003 11.02 0.36^ (0.07)^ (0.37) (0.01) 10.93 2.68**
2002 10.80 0.44 0.34 (0.44) (0.12) 11.02 7.53
2001 10.17 0.53 0.63 (0.53) -- 10.80 11.67
2000 10.00 0.38 0.17 (0.38) -- 10.17 5.64
Class A (commenced operations on April 13, 2000)
2004* $10.95 $0.11^ $(0.03)^ $(0.11) $(0.14) $10.78 0.77%
2003 11.01 0.33^ (0.04)^ (0.34) (0.01) 10.95 2.71**
2002 10.77 0.43 0.34 (0.41) (0.12) 11.01 7.47
2001 10.16 0.49 0.63 (0.51) -- 10.77 11.25
2000 10.06 0.23 0.10 (0.23) -- 10.16 3.37
- ------------------------------------------------------------------------------------------------------------------------------------
California Tax Exempt Bond Fund
Institutional Class (commenced operations on January 14, 2000)
2004* $10.60 $0.13^ $ 0.01^ $(0.13) $(0.13) $10.48 1.39%
2003 10.83 0.31 (0.04) (0.31) (0.19) 10.60 2.63
2002 10.50 0.36 0.41 (0.35) (0.09) 10.83 7.58
2001 10.22 0.43 0.30 (0.43) (0.02) 10.50 7.21
2000 10.00 0.32 0.22 (0.32) -- 10.22 5.43
Class A (commenced operations on April 13, 2000)
2004* $10.62 $0.12^ $ 0.02^ $(0.12) $(0.13) $10.51 1.35%
2003 10.85 0.27 (0.02) (0.29) (0.19) 10.62 2.37
2002 10.51 0.33 0.43 (0.33) (0.09) 10.85 7.40
2001 10.22 0.41 0.30 (0.40) (0.02) 10.51 7.08
2000 10.10 0.20 0.12 (0.20) -- 10.22 3.20
- ------------------------------------------------------------------------------------------------------------------------------------
High Yield Bond Fund
Institutional Class (commenced operations on January 14, 2000)
2004* $ 8.95 $0.36^ $ 0.33^ $(0.36) $ -- $ 9.28 7.79%
2003 8.16 0.76 0.79 (0.76) -- 8.95 19.75
2002 8.57 0.83 (0.40) (0.84) -- 8.16 4.80
2001 9.76 0.98 (1.18) (0.98) (0.01) 8.57 (2.45)
2000 10.00 0.64 (0.24) (0.64) -- 9.76 4.21
Class A (commenced operations on January 14, 2000)
2004* $ 8.95 $0.35^ $ 0.33^ $(0.35) $ -- $ 9.28 7.63%
2003 8.16 0.74 0.78 (0.73) -- 8.95 19.39
2002 8.57 0.81 (0.40) (0.82) -- 8.16 4.49
2001 9.76 0.95 (1.18) (0.95) (0.01) 8.57 (2.74)
2000 10.00 0.62 (0.24) (0.62) -- 9.76 3.94
- -------------------------------------------------------------------------------------------------
RATIO
OF EXPENSES
RATIO TO AVERAGE
NET OF NET NET ASSETS
ASSETS RATIO INVESTMENT (EXCLUDING
END OF EXPENSES INCOME WAIVERS & PORTFOLIO
OF PERIOD TO AVERAGE TO AVERAGE RECAPTURE TURNOVER
(000) NET ASSETS(1) NET ASSETS(1) FEES)(1) RATE
- -------------------------------------------------------------------------------------------------
Corporate Bond Fund
Institutional Class (commenced operations on January 14, 2000)
2004* $44,593 0.75% 3.93% 0.78% 46%
2003 42,256 0.75 4.30 0.78 66
2002 40,807 0.75 5.04 0.82 55
2001 32,800 0.75 5.71+ 0.86 83
2000 22,711 0.75 6.09 0.91 6
Class A (commenced operations on April 13, 2000)
2004* $ 1,039 1.00% 3.65% 1.03% 46%
2003 830 1.00 4.00 1.03 66
2002 544 1.00 4.71 1.07 55
2001 93 1.00 5.67+ 1.11 83
2000 424 1.00 5.84 1.16 6
- -------------------------------------------------------------------------------------------------
Government Bond Fund
Institutional Class (commenced operations on January 14, 2000)
2004* $19,468 0.70% 2.33% 0.80% 144%
2003 15,596 0.70 3.26 0.81 54
2002 14,502 0.70 4.11+ 0.86 70
2001 12,648 0.70 5.04+ 0.91 126
2000 11,233 0.70 5.49 0.97 21
Class A (commenced operations on April 13, 2000)
2004* $ 114 0.95% 1.98% 1.05% 144%
2003 18 0.95 3.00 1.06 54
2002 525 0.95 3.70 1.11 70
2001 4 0.95 5.03+ 1.16 126
2000 49 0.95 5.24 1.22 21
- -------------------------------------------------------------------------------------------------
California Tax Exempt Bond Fund
Institutional Class (commenced operations on January 14, 2000)
2004* $17,285 0.50% 2.54% 0.65% 14%
2003 14,546 0.50 2.91 0.65 68
2002 16,147 0.50 3.33 0.70 90
2001 15,526 0.50 4.11 0.75 56
2000 11,638 0.50 4.50 0.79 49
Class A (commenced operations on April 13, 2000)
2004* $ 1,348 0.75% 2.27% 0.90% 14%
2003 732 0.75 2.62 0.90 68
2002 13 0.75 3.05 0.95 90
2001 6 0.75 3.82 1.00 56
2000 1 0.75 4.25 1.04 49
- -------------------------------------------------------------------------------------------------
High Yield Bond Fund
Institutional Class (commenced operations on January 14, 2000)
2004* $17,932 1.00% 7.85% 1.14% 20%
2003 13,387 1.00 8.84 1.13 36
2002 10,020 1.00 9.48 1.18 30
2001 9,310 1.00 10.52 1.23 12
2000 9,877 1.00 9.41 1.31 5
Class A (commenced operations on January 14, 2000)
2004* $20,639 1.30% 7.49% 1.44% 20%
2003 16,878 1.30 8.44 1.43 36
2002 9,397 1.30 9.03 1.48 30
2001 3,973 1.30 10.14 1.53 12
2000 1,043 1.30 9.11 1.61 5
<FN>
* FOR THE SIX MONTH PERIOD ENDING MARCH 31, 2004. ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
** TOTAL RETURN FOR CLASS A OF THE GOVERNMENT BOND FUND IS GREATER THAN THE INSTITUTIONAL CLASS'S DUE TO A LARGE REDEMPTION DURING
THE YEAR.
+ RATIOS REFLECT THE IMPACT OF SIGNIFICANT CHANGES IN AVERAGE NET ASSETS AND THE EFFECTS OF ANNUALIZATION.
++ RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED. FEE WAIVERS ARE IN EFFECT; IF THEY HAD NOT BEEN IN EFFECT,
PERFORMANCE WOULD HAVE BEEN LOWER. RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND
DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
^ PER SHARE CALCULATIONS ARE BASED ON THE AVERAGE SHARES METHOD.
(1) ANNUALIZED.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
</FN>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 51
<page>
financial highlights
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE SIX MONTHS ENDED MARCH 31, 2004 (UNAUDITED) AND THE YEAR OR PERIOD ENDED SEPTEMBER 30,
- ------------------------------------------------------------------------------------------------------------------------------------
NET NET NET
ASSET DIVIDENDS ASSET ASSETS
VALUE NET FROM NET VALUE END
BEGINNING INVESTMENT INVESTMENT END TOTAL OF PERIOD
OF PERIOD INCOME INCOME OF PERIOD RETURN+++ (000)
- ------------------------------------------------------------------------------------------------------------------------------------
Prime Money Market Fund
Institutional Class (commenced operations on March 23, 1998)
2004* $1.00 $0.002 $(0.002) $1.00 0.23% $ 300,706
2003 1.00 0.007 (0.007) 1.00 0.68 287,087
2002 1.00 0.014 (0.014) 1.00 1.37 290,778
2001 1.00 0.046 (0.046) 1.00 4.65 304,698
2000** 1.00 0.051 (0.051) 1.00 5.24 201,688
1999 1.00 0.045 (0.045) 1.00 4.61 137,659
1998 1.00 0.029 (0.029) 1.00 3.11 133,428
Class A (commenced operations on October 18, 1999)
2004* $1.00 $0.001 $(0.001) $1.00 0.12% $ 167,202
2003 1.00 0.005 (0.005) 1.00 0.46 205,191
2002 1.00 0.011 (0.011) 1.00 1.15 228,807
2001 1.00 0.043 (0.043) 1.00 4.42 243,340
2000** 1.00 0.049 (0.049) 1.00 5.03 251,225
1999 1.00 0.002 (0.002) 1.00 0.18 4,942
Class S (commenced operations on October 26, 1999)
2004* $1.00 $0.001 $(0.001) $1.00 0.06% $ 105,573
2003 1.00 0.003 (0.003) 1.00 0.29 118,624
2002 1.00 0.009 (0.009) 1.00 0.95 129,180
2001 1.00 0.041 (0.041) 1.00 4.21 126,281
2000** 1.00 0.047 (0.047) 1.00 4.83 72,287
1999 1.00 0.001 (0.001) 1.00 0.07 562
- ------------------------------------------------------------------------------------------------------------------------------------
Government Money Market Fund
Institutional Class (commenced operations on April 3, 2000)
2004* $1.00 $0.002 $(0.002) $1.00 0.24% $ 45,733
2003 1.00 0.007 (0.007) 1.00 0.70 56,841
2002 1.00 0.014 (0.014) 1.00 1.38 51,985
2001 1.00 0.046 (0.046) 1.00 4.70 76,802
2000** 1.00 0.029 (0.029) 1.00 2.90 27,849
Class A (commenced operations on June 21, 1999)
2004* $1.00 $0.001 $(0.001) $1.00 0.13% $1,842,387
2003 1.00 0.005 (0.005) 1.00 0.48 2,060,860
2002 1.00 0.012 (0.012) 1.00 1.16 2,149,151
2001 1.00 0.044 (0.044) 1.00 4.47 2,531,500
2000** 1.00 0.049 (0.049) 1.00 4.96 1,887,860
1999 1.00 0.016 (0.016) 1.00 1.58 1,512,137
Class S (commenced operations on October 6, 1999)
2004* $1.00 $0.001 $(0.001) $1.00 0.06% $ 195,951
2003 1.00 0.003 (0.003) 1.00 0.30 191,539
2002 1.00 0.010 (0.010) 1.00 0.96 219,387
2001 1.00 0.042 (0.042) 1.00 4.26 147,035
2000** 1.00 0.047 (0.047) 1.00 4.77 41,593
1999 1.00 0.003 (0.003) 1.00 0.30 911
- ------------------------------------------------------------------------------------------------------------------------------------
California Tax Exempt Money Market Fund
Institutional Class (commenced operations on April 3, 2000)
2004* $1.00 $0.002 $(0.002) $1.00 0.23% $ 125,636
2003 1.00 0.006 (0.006) 1.00 0.62 87,820
2002 1.00 0.010 (0.010) 1.00 0.98 58,923
2001 1.00 0.025 (0.025) 1.00 2.51 50,543
2000** 1.00 0.016 (0.016) 1.00 1.64 6,825
Class A (commenced operations on June 21, 1999)
2004* $1.00 $0.001 $(0.001) $1.00 0.11% $ 547,079
2003 1.00 0.004 (0.004) 1.00 0.41 539,182
2002 1.00 0.007 (0.007) 1.00 0.75 519,269
2001 1.00 0.023 (0.023) 1.00 2.28 638,446
2000** 1.00 0.025 (0.025) 1.00 2.55 549,237
1999 1.00 0.008 (0.008) 1.00 0.79 533,244
Class S (commenced operations on November 12, 1999)
2004* $1.00 $0.001 $(0.001) $1.00 0.06% $ 34,329
2003 1.00 0.003 (0.003) 1.00 0.27 24,002
2002 1.00 0.005 (0.005) 1.00 0.55 29,626
2001 1.00 0.021 (0.021) 1.00 2.08 16,851
2000** 1.00 0.023 (0.023) 1.00 2.30 7,723
- ---------------------------------------------------------------------------------
RATIO RATIO
OF NET OF EXPENSES
RATIO INVESTMENT TO AVERAGE
OF EXPENSES INCOME NET ASSETS
TO AVERAGE TO AVERAGE (EXCLUDING
NET ASSETS(1) NET ASSETS(1) WAIVERS)(1)
- ---------------------------------------------------------------------------------
Prime Money Market Fund
Institutional Class (commenced operations on March 23, 1998)
2004* 0.63% 0.46% 0.63%
2003 0.63 0.68 0.64
2002 0.63 1.37 0.67
2001 0.63 4.42++ 0.71
2000** 0.63 5.62+ 0.71
1999 0.63 4.51 0.79
1998 0.63 4.99 0.78
Class A (commenced operations on October 18, 1999)
2004* 0.85% 0.24% 1.13%
2003 0.85 0.47 1.14
2002 0.85 1.15 1.17
2001 0.85 4.39++ 1.21
2000** 0.85 5.61+ 1.21
1999 0.85 4.62 1.30
Class S (commenced operations on October 26, 1999)
2004* 0.98% 0.12% 1.13%
2003 1.03 0.29 1.14
2002 1.05 0.95 1.17
2001 1.05 4.12++ 1.21
2000** 1.05 5.47+ 1.21
1999 1.05 4.42 1.30
- ---------------------------------------------------------------------------------
Government Money Market Fund
Institutional Class (commenced operations on April 3, 2000)
2004* 0.63% 0.48% 0.64%
2003 0.63 0.68 0.64
2002 0.63 1.43 0.66
2001 0.63 3.97++ 0.66
2000** 0.63 5.84 0.68
Class A (commenced operations on June 21, 1999)
2004* 0.85% 0.26% 1.14%
2003 0.85 0.48 1.14
2002 0.85 1.18 1.16
2001 0.85 4.27++ 1.16
2000** 0.85 5.32 1.18
1999 0.85 4.33 1.15
Class S (commenced operations on October 6, 1999)
2004* 0.99% 0.12% 1.14%
2003 1.03 0.31 1.14
2002 1.05 0.93 1.16
2001 1.05 3.62++ 1.16
2000** 1.05 5.39 1.18
1999 1.05 4.30 1.15
- --------------------------------------------------------------------------------
California Tax Exempt Money Market Fund
Institutional Class (commenced operations on April 3, 2000)
2004* 0.55% 0.44% 0.65%
2003 0.55 0.59 0.65
2002 0.55 0.96 0.69
2001 0.55 2.12++ 0.72
2000** 0.55 3.29 0.74
Class A (commenced operations on June 21, 1999)
2004* 0.77% 0.23% 1.15%
2003 0.76 0.41 1.15
2002 0.78 0.75 1.19
2001 0.78 2.22++ 1.22
2000** 0.78 2.74 1.24
1999 0.78 2.17 1.21
Class S (commenced operations on November 12, 1999)
2004* 0.87% 0.12% 1.15%
2003 0.89 0.27 1.15
2002 0.98 0.53 1.19
2001 0.98 1.96++ 1.22
2000** 0.98 2.69 1.24
<FN>
* FOR THE SIX MONTH PERIOD ENDING MARCH 31, 2004. ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
** THE FUND'S YEAR-END CHANGED FROM OCTOBER 31 TO SEPTEMBER 30.
+ RATIOS REFLECT THE IMPACT OF THE INITIAL LOW LEVEL OF AVERAGE NET ASSETS ASSOCIATED WITH COMMENCEMENT OF OPERATIONS AND THE
EFFECTS OF ANNUALIZATION.
++ RATIOS REFLECT THE IMPACT OF SIGNIFICANT CHANGES IN AVERAGE NET ASSETS AND THE EFFECTS OF ANNUALIZATION.
+++ RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED. FEE WAIVERS ARE IN EFFECT; IF THEY HAD NOT BEEN IN EFFECT,
PERFORMANCE WOULD HAVE BEEN LOWER. RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND
DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
(1) ANNUALIZED.
</FN>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 52
<page>
notes to financial statements
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION:
The CNI Charter Funds, a Delaware statutory trust (the "Trust"), is registered
under the Investment Company Act of 1940, as amended, as an open-end management
investment company with eleven portfolios. The financial statements included
herein are those of the Large Cap Value Equity Fund, Large Cap Growth Equity
Fund, RCB Small Cap Value Fund, Technology Growth Fund (collectively, the
"Equity Funds"); Corporate Bond Fund, Government Bond Fund, California Tax
Exempt Bond Fund, High Yield Bond Fund (collectively, the "Fixed Income Funds");
Prime Money Market Fund, Government Money Market Fund and California Tax Exempt
Money Market Fund (collectively, the "Money Market Funds"); (each a "Fund",
collectively, the "Funds"). The Equity and Fixed Income Funds are registered to
offer Institutional and Class A Shares; in addition, the RCB Small Cap Value
Fund is registered to offer Class R shares. The Money Market Funds are
registered to offer Institutional, Class A and Class S Shares. The assets of
each Fund are segregated, and a shareholder's interest is limited to the Fund in
which shares are held. The Funds' prospectuses provide a description of each
Fund's investment objectives, policies and strategies.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies followed by the
Funds.
USE OF ESTIMATES - The preparation of financial statements in conformity with
accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of income and expenses during
the reporting period. Actual results could differ from those estimates.
SECURITY VALUATION - Investment securities of the Money Market Funds are stated
at amortized cost, which approximates market value. Under this valuation method,
purchase discounts and premiums are accreted and amortized ratably to maturity
and are included in interest income.
Investment securities of the Equity and Fixed Income Funds, which are listed on
a securities exchange for which market quotations are available, are valued by
independent pricing services at the last quoted sales price for such securities
on each business day. If there is no such reported sale, those securities are
valued at the mean between last available bid and ask price. Investment
securities of the Equity funds, which are quoted on a national market system,
are valued at the official closing price, or if there is none, at the last sales
price. Unlisted securities for which market quotations are not readily available
are valued at fair value as determined in good faith by or under the direction
of the Trust's Board of Trustees. Debt obligations with sixty days or less
remaining until maturity may be valued at their amortized cost.
SECURITY TRANSACTIONS AND RELATED INCOME - Security transactions are accounted
for on the trade date of the security purchase or sale. Costs used in
determining net realized capital gains and losses on the sale of securities are
those of the specific securities sold. Interest income is recognized on the
accrual basis and dividend income is recognized on the ex-dividend date.
Purchase discounts and premiums on securities held by the Funds are accreted and
amortized to maturity using the scientific interest method, which approximates
the effective interest method.
REPURCHASE AGREEMENTS - Securities pledged as collateral for repurchase
agreements are held by each Fund's custodian bank until maturity of the
repurchase agreements. Provisions of the agreements and procedures adopted by
the investment adviser require that the market value of the collateral,
including accrued interest thereon, is sufficient in the event of default by the
counterparty. The Funds also invest in tri-party repurchase agreements.
Securities held as collateral for tri-party repurchase agreements are maintained
by the broker's custodian bank in a segregated account until maturity of the
repurchase agreement. Provisions of the agreements require that the market value
of the collateral, including accrued interest thereon, is sufficient in the
event of default. If the counterparty defaults and the value of the collateral
declines or if the counterparty enters into an insolvency proceeding,
realization of the collateral by the Fund may be delayed or limited.
TBA TRANSACTIONS - The Funds may engage in "to be announced" ("TBA") security
transactions. Such transactions involve a commitment by the Funds to purchase or
sell securities for a predetermined price or yield, with payment and delivery
taking place beyond the customary settlement period. The Funds record
TBAsecurities on the trade date and maintain security positions such that
sufficient liquid assets will be available to make payments for the securities
purchased. As of March 31, 2004, the Funds did not hold any TBA securities.
CLASSES - Class-specific expenses are borne by that class. Income, non
class-specific expenses, and realized and unrealized gains/losses are allocated
to the respective class on the basis of relative net asset value each day.
CNI CHARTER FUNDS | PAGE 53
<page>
notes to financial statements
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends from net investment
income are declared daily and paid to shareholders monthly for the Fixed Income
and Money Market Funds. Dividends from net investment income are declared and
paid quarterly for the Large Cap Value Equity, Large Cap Growth Equity, and
Technology Growth Funds. For the RCB Small Cap Value Fund, dividends from net
investment income are declared and paid annually. Distributions from net
realized capital gains are distributed to shareholders at least annually.
3. ADMINISTRATION, TRANSFER AGENT, DISTRIBUTION
AND SHAREHOLDER SERVICES AGREEMENTS:
Pursuant to an administration agreement (the "Agreement"), SEI Investments
Global Funds Services (the "Administrator"), a wholly owned subsidiary of
SEIInvestments Company, acts as the Trust's Administrator. Under the terms of
the Agreement dated April 1, 1999, as amended April 1, 2002, the Administrator
is entitled to receive an annual fee of 0.10% of aggregate average daily net
assets of the Trust not exceeding $2.5 billion, 0.08% of aggregate average daily
net assets of the Trust exceeding $2.5 billion but not exceeding $5 billion, and
0.06% of aggregate average daily net assets of the Trust exceeding $5 billion.
Each Fund is subject to a minimum annual fee of $90,000, which may be reduced at
the sole discretion of the Administrator.
The Trust has adopted a Rule 12b-1 Distribution Plan ("the Plan") with respect
to Class A, S and R Shares that allows each Fund to pay distribution and
servicing fees. SEI Investments Distribution Co. (the "Distributor"), as
compensation for its services under the Plan, receives a distribution fee,
computed daily and paid monthly, at the annual rate of 0.50% of the average
daily net assets of the Class A Shares and Class S Shares of the Money Market
Funds and 0.25% of the Class A Shares of the Equity and Fixed Income Funds and
the Class R Shares of the RCB Small Cap Value Fund, with the exception of 0.30%
charged to the Class A Shares of the Technology Growth and High Yield Bond
Funds, which may be used by the Distributor to provide compensation for sales
support and distribution-related activities. The Distributor has voluntarily
agreed to waive up to 0.50% of distribution fees and up to 0.25% of shareholder
servicing fees, discussed below, for the Class A shares of the California Tax
Exempt Money Market Fund beginning December 11, 2002 and for the Class S shares
of the Prime Money Market Fund beginning June 17, 2003, for the Government Money
Market Fund beginning June 4, 2003, and for the California Tax Exempt Money
Market Fund beginning December 4, 2002. These waivers are voluntary and may be
terminated at any time.
The Trust and the Distributor are parties to a Distribution Agreement dated
April 1, 1999. The Distributor receives no fees for its distribution services
under this agreement.
SEI Investments Fund Management serves as Transfer Agent for the Trust whereby
they provide services at an annual rate of $15,000 per share class. The Transfer
Agent has voluntarily agreed to waive these fees.
Wachovia Bank, N.A. serves as Custodian for the Trust. The Custodian plays no
role in determining the investment policies of the Trust or which securities are
to be purchased or sold by the Trust.
The Trust has also adopted a Shareholder Servicing Agreement that permits
payment of compensation to service providers, that may include City National
Bank ("CNB"), that have agreed to provide certain shareholder support for their
customers who own Institutional Class, Class A, Class S or Class R Shares. In
consideration for such services, a shareholder servicing fee is charged at the
annual rate of up to 0.25% of each Fund's average daily net assets. For the
six-months ended March 31, 2004, CNB received Shareholder Servicing fees from
the Trust in the amount of approximately $3,517,000.
Certain officers of the Trust are also officers of City National Asset
Management, Inc. ("CNAM", the "Adviser"), the Administrator and/or the
Distributor. Such officers are paid no fees by the Trust for serving as officers
of the Trust.
4. INVESTMENT ADVISORY FEES AND OTHER AGREEMENTS:
Effective May 10, 2001, CNAM, a wholly owned subsidiary of CNB, assumed the role
of Investment Manager from CNB. Under the terms of the current agreement, the
Adviser receives an annual fee equal to 0.62% of the average daily net assets of
the Large Cap Value Equity Fund, 0.65% of the average daily net assets of the
Large Cap Growth Equity Fund, 0.85% of the average net assets of the RCBSmall
Cap ValueFund, 0.85% of the average daily net assets of the Technology Growth
Fund, 0.40% of the average daily net assets of the Corporate Bond Fund, 0.43% of
the average daily net assets of the Government Bond Fund, 0.27% of the average
daily net assets of the California Tax Exempt Bond
CNI CHARTER FUNDS | PAGE 54
<page>
- --------------------------------------------------------------------------------
Fund, 0.75% of the average daily net assets of the High Yield Bond Fund, 0.25%
of the average daily net assets of the Prime Money Market Fund, 0.26% of the
average daily net assets of the Government Money Market Fund, and 0.27% of the
average daily net assets of the California Tax Exempt Money Market Fund.
REED, CONNER & BIRDWELL, LLC acts as the Investment Sub-Adviser on behalf of the
RCB Small Cap Value Fund.
CREDIT SUISSE ASSET MANAGEMENT, LLC acts as the Investment Sub-Adviser on behalf
of the High Yield Bond Fund.
WEISS, PECK, &GREER, LLC served as the Investment Sub-Adviser on behalf of the
California Tax Exempt Money Market Fund until January 30, 2004.
The Adviser has voluntarily agreed to limit its fees or reimburse expenses to
the extent necessary to keep operating expenses at or below certain percentages
of the respective average daily net assets. The Adviser has voluntarily agreed
to maintain this limitation until further notice to the Trust. The voluntary
expense limitations (expressed as a percentage of average daily net assets) are
as follows:
Large Cap Large Cap RCB
Value Growth Small Cap Technology
Equity Equity Value Growth
Fund Fund Fund Fund
- --------------------------------------------------------------------------------
Institutional Class 1.00% 1.05% 1.24% 1.20%
Class A 1.25% 1.30% 1.49% 1.50%
Class R -- -- 1.49% --
- --------------------------------------------------------------------------------
California
Corporate Government Tax Exempt High Yield
Bond Bond Bond Bond
Fund Fund Fund Fund
- --------------------------------------------------------------------------------
Institutional Class 0.75% 0.70% 0.50% 1.00%
Class A 1.00% 0.95% 0.75% 1.30%
- --------------------------------------------------------------------------------
Prime California
Money Government Tax Exempt
Market Money Market Money Market
Fund Fund Fund
- --------------------------------------------------------------------------------
Institutional Class 0.63% 0.63% 0.55%
Class A 0.85% 0.85% 0.78%
Class S 1.05% 1.05% 0.98%
- --------------------------------------------------------------------------------
Any fee reductions or expense reimbursements may be repaid to the Adviser within
three years after occurrence, subject to certain restrictions and only if such
repayments do not cause the Funds' expense ratios, at the time of repayment, to
exceed the amounts shown in the preceding table.
During the six-month period ended March 31, 2004, the Board of Trustees approved
the reimbursement of previously waived fees by the Adviser for the prior fiscal
year in the amount of $3,408, $3,984, $3,517 and $28,401 for the Large Cap Value
Equity Fund, Large Cap Growth Equity Fund, RCB Small Cap Value Fund and Prime
Money Market Fund, respectively.
As of March 31, 2004, fees which were previously waived by the Adviser which may
be subject to possible future reimbursement to the Adviser were as follows:
Fund (000)
- --------------------------------------------------------------------------------
Large Cap Value Equity $ 21
Large Cap Growth Equity 5
RCB Small Cap Value 23
Technology Growth 8
Corporate Bond 55
Government Bond 55
California Tax Exempt Bond 81
High Yield Bond 91
Prime Money Market 669
Government Money Market 1,229
California Tax Exempt Money Market 2,902
- --------------------------------------------------------------------------------
5. INVESTMENT TRANSACTIONS:
The cost of security purchases and proceeds from the sale of securities, other
than temporary investments in short-term securities for the six-months ended
March 31, 2004, were as follows for the Equity and Fixed Income Funds:
Purchases Sales
- --------------------------------------------------------------------------------
U.S. Gov`t Other U.S. Gov`t Other
Fund (000) (000) (000) (000)
- --------------------------------------------------------------------------------
Large Cap Value Equity $ -- $ 8,314 $ -- $ 6,621
Large Cap Growth Equity -- 8,692 -- 5,420
RCB Small Cap Value -- 12,383 -- 7,425
Technology Growth -- 782 -- 338
Corporate Bond 2,484 18,920 3,696 15,598
Government Bond 27,263 -- 23,764 --
California Tax Exempt Bond -- 5,688 -- 2,291
High Yield Bond -- 12,648 -- 6,650
- --------------------------------------------------------------------------------
CNI CHARTER FUNDS | PAGE 55
<page>
notes to financial statements
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
6. FEDERAL TAX INFORMATION:
It is each Fund's intention to continue to qualify as a regulated investment
company for Federal income tax purposes and distribute all of its taxable income
and net capital gains. Accordingly, no provisions for Federal income taxes are
required.
The Funds may be subject to taxes imposed by countries in which they invest,
with respect to their investments, in issuers existing or operating in such
countries. Such taxes are generally based on income earned. The Funds accrue
such taxes when the related income is earned.
The timing and characterization of certain income and capital gains
distributions are determined annually in accordance with Federal tax
regulations, which may differ from accounting principles generally accepted in
the United States of America. As a result, net investment income (loss) and net
realized gain (loss) on investment transactions for a reporting period may
differ significantly from distributions during such period. These book/tax
differences may be temporary or permanent. To the extent these differences are
permanent in nature, they are charged or credited to paid-in-capital,
undistributed net investment income (loss), or accumulated net realized gain
(loss), as appropriate, in the period that the differences arise.
The tax character of dividends and distributions paid during the years ended
September 30, 2003 and September 30, 2002 were as follows:
Tax
Exempt Ordinary Long-term
Income Income Capital Gain Total
Fund (000) (000) (000) (000)
- --------------------------------------------------------------------------------
Large Cap Value Equity
2003 $ -- $ 336 $ -- $ 336
2002 -- 271 481 752
Large Cap Growth Equity
2003 -- 29 -- 29
2002 -- -- -- --
Corporate Bond
2003 -- 1,843 -- 1,843
2002 -- 2,165 190 2,355
Government Bond
2003 -- 519 21 540
2002 -- 627 35 662
California Tax Exempt Bond
2003 450 60 218 728
2002 522 83 61 666
High Yield Bond
2003 -- 1,990 -- 1,990
2002 -- 1,532 -- 1,532
Prime Money Market
2003 -- 3,310 -- 3,310
2002 -- 8,179 -- 8,179
Government Money Market
2003 -- 11,356 -- 11,356
2002 -- 29,979 -- 29,979
California Tax Exempt Money Market
2003 2,993 -- -- 2,993
2002 5,058 -- -- 5,058
As of September 30, 2003, the components of Distributable Earnings/(Accumulated
Losses) on a tax basis were as follows:
Undistributed Undistributed Undistributed Capital Unrealized
Tax-Exempt Ordinary Long-term Loss Post-October Appreciation
Income Income Capital Gain Carryforwards Losses (Depreciation)
Fund (000) (000) (000) (000) (000) (000)
- -----------------------------------------------------------------------------------------------------------------------
Large Cap Value Equity $ -- $ 91 $ -- $ (333) $ (24) $4,704
Large Cap Growth Equity -- 12 -- (4,771) (284) (472)
RCB Small Cap Value -- -- 88 -- -- 4,894
Technology Growth -- -- -- (1,050) (315) (425)
Corporate Bond -- 336 180 -- -- 2,106
Government Bond -- 44 205 -- -- 445
California Tax Exempt Bond 34 59 139 -- -- 458
High Yield Bond -- 189 -- (1,413) (249) 820
Prime Money Market -- 180 -- (407) -- --
Government Money Market -- 471 -- (4) -- --
California Tax Exempt Money Market 131 -- 1 -- -- --
Other Total
Temporary Distributable Earnings
Differences (Accumulated Losses)
Fund (000) (000)
- ---------------------------------------------------------------------
Large Cap Value Equity $ (91) $ 4,347
Large Cap Growth Equity (12) (5,527)
RCB Small Cap Value -- 4,982
Technology Growth -- (1,790)
Corporate Bond (141) 2,481
Government Bond (38) 656
California Tax Exempt Bond (34) 656
High Yield Bond (203) (856)
Prime Money Market (169) (396)
Government Money Market (471) (4)
California Tax Exempt Money Market (131) 1
CNI CHARTER FUNDS | PAGE 56
<page>
For tax purposes, the losses in the Funds can be carried forward for a maximum
of eight years to offset any future net realized capital gains. At September 30,
2003, the breakdown of capital loss carryforwards is as follows:
Expiring September 30,
--------------------------------------
2008 2010 2011
Fund (000) (000) (000)
- --------------------------------------------------------------
Large Cap Value Equity $-- $ 18 $ 315
Large Cap Growth Equity 11 3,244 1,516
Technology Growth -- 392 658
High Yield Bond -- 481 932
Prime Money Market -- 407 --
Government Money Market -- -- 4
- --------------------------------------------------------------
During the year ended September 30, 2003, the RCB Small Cap Value Fund, Prime
Money Market Fund and California Tax Exempt Money Market Fund had utilized
capital loss carryforwards of $21,786, $76,610 and $18,500, respectively to
offset capital gains.
Post-October losses represent losses realized on investments and foreign
currency transactions from November 1, 2002 through September 30, 2003 that, in
accordance with Federal income tax regulations, the Funds have elected to defer
and treat as having arisen in the following fiscal year.
The aggregate gross unrealized appreciation on securities, the aggregate gross
unrealized depreciation on securities and the net unrealized
appreciation/(depreciation) for tax purposes at March 31, 2004 for each of the
Equity and Fixed Income Funds were as follows:
Net Unrealized
Appreciation
Appreciation Depreciation (Depreciation)
Fund (000) (000) (000)
- ----------------------------------------------------------------------
Large Cap Value Equity $10,156 $(1,084) $9,072
Large Cap Growth Equity 3,631 (2,036) 1,595
RCB Small Cap Value 7,739 (197) 7,542
Technology Growth 330 (393) (63)
Corporate Bond 1,964 (61) 1,903
Government Bond 266 (2) 264
California Tax Exempt Bond 460 (21) 439
High Yield Bond 2,290 (523) 1,767
- ----------------------------------------------------------------------
7. CONCENTRATION OF CREDIT RISK:
In the normal course of business, the Funds enter into contracts that provide
general indemnifications. The Funds' maximum exposure under these arrangements
is dependent on future claims that may be made against the Funds and, therefore,
cannot be established; however, based on experience, the risk of loss from such
claim is considered remote.
CALIFORNIA TAX EXEMPT FUNDS - SPECIFIC RISKS
The ability of issuers to pay interest on, and repay principal of, California
municipal securities may be affected by economic and political developments in
the State of California.
Certain securities are backed by letters of credit from various financial
institutions and financial guaranty assurance agencies. These letters of credit
enhance the credit quality of the individual securities; however, if any of the
financial institutions or financial guaranty assurance agencies' credit quality
should deteriorate, it could cause the individual security's credit quality to
change. Additionally, if any of the Funds concentrate their letters of credit in
any one financial institution, the risk of credit quality deterioration
increases.
CNI CHARTER FUNDS | PAGE 57
<page>
notes to financial statements
MARCH 31, 2004 (UNAUDITED)
- --------------------------------------------------------------------------------
8. CAPITAL SHARES ISSUED AND REDEEMED:
Capital share activity for the six months ended March 31, 2004 (Unaudited) and
the year ended September 30, 2003 was as follows:
Large Cap Value Large Cap Growth RCB Small Cap Technology
Equity Fund (000) Equity Fund (000) Value Fund (000) Growth Fund (000)
---------------------- ----------------------- --------------------- -------------------------
2004 2003 2004 2003 2004 2003 2004 2003
- --------------------------------------------------------- ----------------------- --------------------- -------------------------
CAPITAL SHARES ISSUED AND REDEEMED:
INSTITUTIONAL CLASS:
Shares Issued 480 1,481 643 1,559 104 201 47 148
Shares Issued in Lieu of
Dividends and Distributions 4 11 -- 2 1 -- -- --
Shares Redeemed (592) (899) (412) (774) (106) (34) (24) (137)
- --------------------------------------------------------- ----------------------- --------------------- -------------------------
Net Institutional
Class Transactions (108) 593 231 787 (1) 167 23 11
========================================================= ======================= ===================== =========================
CLASS A:
Shares Issued 336 136 258 172 183 90 139 82
Shares Issued in Lieu of
Dividends and Distributions 1 1 -- -- -- -- -- --
Shares Redeemed (38) (23) (50) (14) (46) (8) (47) (1)
- --------------------------------------------------------- ----------------------- --------------------- -------------------------
Net Class A Transactions 299 114 208 158 137 82 92 81
========================================================= ======================= ===================== =========================
CLASS R:
Shares Issued -- -- -- -- 232 92 -- --
Shares Issued in Lieu of
Dividends and Distributions -- -- -- -- 2 -- -- --
Shares Redeemed -- -- -- -- (48) (115) -- --
- --------------------------------------------------------- ----------------------- --------------------- -------------------------
Net Class R Transactions -- -- -- -- 186 (23) -- --
========================================================= ======================= ===================== =========================
California High Yield
Corporate Bond Government Bond Tax Exempt Bond Bond
Fund (000) Fund (000) Fund (000) Fund (000)
--------------------- ----------------------- --------------------- -------------------------
2004 2003 2004 2003 2004 2003 2004 2003
- --------------------------------------------------------- ----------------------- --------------------- -------------------------
CAPITAL SHARES ISSUED AND REDEEMED:
INSTITUTIONAL CLASS:
Shares Issued 767 1,107 505 630 339 242 489 373
Shares Issued in Lieu of
Dividends and Distributions 21 30 12 10 5 8 35 69
Shares Redeemed (550) (1,088) (132) (528) (67) (369) (88) (174)
- --------------------------------------------------------- ----------------------- --------------------- -------------------------
Net Institutional
Class Transactions 238 49 385 112 277 (119) 436 268
========================================================= ======================= ===================== =========================
CLASS A:
Shares Issued 51 43 9 30 61 75 1,049 1,266
Shares Issued in Lieu of
Dividends and Distributions 1 1 -- -- 1 1 46 74
Shares Redeemed (32) (19) -- (76) (3) (8) (757) (606)
- --------------------------------------------------------- ----------------------- --------------------- -------------------------
Net Class A Transactions 20 25 9 (46) 59 68 338 734
========================================================= ======================= ===================== =========================
AMOUNTS DESIGNATED AS "--" ARE EITHER 0 OR HAVE BEEN ROUNDED TO 0.
CNI CHARTER FUNDS | PAGE 58
- ------------------------------------------------------------------------------------------------------------------------------------
Prime Government Tax Exempt
Money Market Money Market Money Market
Fund (000) Fund (000) Fund (000)
---------------------------------------------------------------------------------------
2004 2003 2004 2003 2004 2003
- ----------------------------------------------------------------------- --------------------------- ------------------------------
CAPITAL SHARES ISSUED AND REDEEMED:
INSTITUTIONAL CLASS:
Shares Issued 494,852 854,421 354,163 619,561 554,324 724,038
Shares Issued in Lieu of
Dividends and Distributions 149 407 -- -- -- --
Shares Redeemed (481,376) (858,546) (365,272) (614,704) (516,512) (695,143)
- ----------------------------------------------------------------------- --------------------------- ------------------------------
Net Institutional
Class Transactions 13,625 (3,718) (11,109) 4,857 37,812 28,895
======================================================================= =========================== ==============================
CLASS A:
Shares Issued 347,395 617,388 2,316,401 4,182,886 579,456 1,144,274
Shares Issued in Lieu of
Dividends and Distributions 68 276 1,832 7,038 533 2,108
Shares Redeemed (385,448) (641,303) (2,536,706) (4,278,238) (572,112) (1,126,487)
- ----------------------------------------------------------------------- --------------------------- ------------------------------
Net Class A Transactions (37,985) (23,639) (218,473) (88,314) 7,877 19,895
======================================================================= =========================== ==============================
CLASS S:
Shares Issued 226,522 381,285 276,813 601,546 101,856 145,219
Shares Issued in Lieu of
Dividends and Distributions -- -- -- -- -- --
Shares Redeemed (239,571) (391,853) (272,400) (629,397) (91,530) (150,843)
- ----------------------------------------------------------------------- --------------------------- ------------------------------
Net Class S Transactions (13,049) (10,568) 4,413 (27,851) 10,326 (5,624)
======================================================================= =========================== ==============================
AMOUNTS DESIGNATED AS "--" ARE EITHER 0 OR HAVE BEEN ROUNDED TO 0.
CNI CHARTER FUNDS | PAGE 59
THANK YOU
for your investment with CNI Charter Funds.
We value the trust you have placed in us to
help you achieve your financial goals.
[Graphic of Building Omitted]
For more information on CNI Charter Funds,
including charges and expenses, please call
1-888-889-0799 or visit www.cnicharterfunds.com
for a free prospectus. Read it carefully before
you invest or send money.
[CNI Charter Funds Logo Omitted]
CNI-SA-001-0300
ITEM 2. CODE OF ETHICS.
Not applicable for semi-annual report.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable for semi-annual report.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable for semi-annual report.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to open-end investment management companies.
ITEM 6. (RESERVED)
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to open-end investment management companies.
ITEM 8. (RESERVED)
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 10. CONTROLS AND PROCEDURES.
(a) The certifying officers, whose certifications are included herewith, have
evaluated the registrant's disclosure controls and procedures within 90 days of
the filing date of this report. In their opinion, based on their evaluation, the
registrant's disclosure controls and procedures are adequately designed, and are
operating effectively to ensure, that information required to be disclosed by
the registrant in the reports it files or submits under the Securities Exchange
Act of 1934 is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission's rules and forms.
(b) There were no significant changes in the registrant's internal control over
financial reporting that occurred during the registrant's last fiscal half-year
that has materially affected, or is reasonably likely to materially affect, the
registrants internal control over financial reporting.
ITEMS 11. EXHIBITS.
(a)(1) Not applicable for semi-annual report.
(a)(2) A separate certification for the principal executive officer and the
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), are filed
herewith.
(b) Officer certifications as required by Rule 30a-2(b) under the Investment
Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany this filing
as an Exhibit.
- --------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) CNI Charter Funds
By (Signature and Title)* /s/ Vern Kozlen
----------------------------
Vern Kozlen, President & CEO
Date 05/26/04
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Vern Kozlen
----------------------------
Vern Kozlen, President & CEO
Date 05/26/04
By (Signature and Title)* /s/ Peter A. Rodriguez
----------------------------
Peter A. Rodriguez, Controller and COO
Date 05/26/04
* Print the name and title of each signing officer under his or her signature.