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)
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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: SEPTEMBER 30, 2004
ITEM 1. REPORTS TO STOCKHOLDERS.
CNI CHARTER FUNDS (TM) [LOGO]
ANNUAL REPORT
SEPTEMBER 30, 2004
[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.
[GRAPHIC OMITTED]
TABLE OF CONTENTS
CNI CHARTER FUNDS ANNUAL REPORT
02 Letter to Our Shareholders
04 Equity Funds Investment Adviser's Report
06 Equity Funds Overview
10 Fixed Income Funds Investment Adviser's Report
11 Fixed Income Funds Overview
15 Money Market Funds Investment Adviser's Report
16 Statements of Net Assets
56 Statements of Operations
59 Statements of Changes in Net Assets
64 Financial Highlights
67 Notes to Financial Statements
74 Report of Independent Registered Public Accounting Firm
75 Board Members and Officers
77 Notice to Shareholders
78 Disclosure of Fund Expenses
CNI CHARTER FUNDS | PAGE 1
LETTER TO OUR SHAREHOLDERS
SEPTEMBER 30, 2004
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This annual report covers the CNI Charter Funds for the fiscal year ended
September 30, 2004. On the following pages, you will find the specific details
of each Fund's portfolio and investment performance.
Our unique philosophy and disciplined approach to capital market investment
continued to show well over the last twelve months, in the midst of an economic
recovery and market turnaround. Both the equity and fixed income markets have
fared well during this period, with domestic stocks gaining 13.9% (as measured
by the S&P 500), international equities rising 22.1% on average (as measured by
the MSCI EAFE Index), and domestic bonds adding 3.7% (as measured by the Lehman
Brothers Aggregate Bond Index). One of the driving forces behind the markets was
the significant rise in oil prices, which began the period at $33 per barrel and
ended at a record price of $50 per barrel, amounting to a 59% increase for the
twelve months ending September 30, 2004. This factor drove energy-related
equities higher and, in fact, caused them to lead the market with a 42%
average return during the period. However, by adhering strictly to our
fundamental investment strategies we were able to produce highly competitive
results in all asset categories, despite the skewed distribution of returns.
City National's underlying investment philosophy is to pursue the long-term
goals and objectives specified for each of the Funds. With an active yet
disciplined style, all Funds are managed to achieve competitive rates of return
consistent with their respective, prescribed risk parameters. CNI Charter Funds
follow a disciplined investment process that begins with a thorough assessment
of the macroeconomic environment and the financial markets. Our broad based
research process takes advantage of the most advanced investment technology,
fundamental valuation, and quantitative tools to determine the most attractive
sectors and securities within each Fund's area of concentration. The final step
is to construct and continuously monitor precise portfolios that meet the
objectives of the specific Funds, without being swayed by short-term trends and
fads. This approach continued to serve shareholders well overall during the
economic and financial rebound we encountered in the period ended September 30,
2004.
TWELVE-MONTH MARKET WATCH:
OCTOBER 2003 - SEPTEMBER 2004
The domestic economic recovery moved into full swing during the last twelve
months with real gross domestic product ("GDP") growing over 4.0%. Key
indicators in both the consumer and manufacturing sectors of the economy gained
momentum. In response to this growth, the Federal Reserve raised short-term
interest rates on three separate occasions by 25 basis points. As a result, the
targeted Fed Funds rate (the rate charged by banks for overnight loans to other
banks to meet reserve requirements) rose from 1.0% at the beginning of the
period to 1.75% by September 30, 2004. Interestingly, interest rates on
longer-date securities did not move in tandem with the Fed Funds rate. The yield
on 10-year government bonds, for example, is still hovering around 4% at the
end of the period, almost exactly where it was twelve months ago.
Both stock and bond investors benefited from this confluence of bullish factors
as the table below illustrates:
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TWELVE-MONTH OCTOBER, 2003 -
INDEX WATCH: SEPTEMBER, 2004
EQUITIES
S&P 500 Stock Index: ......................................... +13.9%
NASDAQ: ...................................................... + 6.7%
MSCI EAFE Index: ............................................. +22.1%
BONDS
Lehman Brothers Intermediate Gov't/
Credit Index: ............................................. + 2.7%
Lehman Brothers Aggregate
Bond Index: ............................................... + 3.7%
Lehman Brothers CA
Tax-Exempt Bond Index: .................................... + 5.6%
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CNI CHARTER FUNDS | PAGE 2
CNI CHARTER FUNDS
PERFORMANCE AND HIGHLIGHTS
By adhering to our basic investment discipline and maintaining the appropriate
amount of risk control in the various portfolios, the Funds continue to provide
returns that are competitive in their respective investment arenas.
Both of the value-oriented CNI Charter Equity Funds produced stellar,
double-digit gains over the period, in excess of their average competitor funds.
The RCB SMALL CAP VALUE FUND (Institutional Class) rose 25.0%, while the LARGE
CAP VALUE EQUITY FUND (Institutional Class) gained 19.4% over the twelve-month
period. The LARGE CAP GROWTH EQUITY FUND (Institutional Class) returned 6.2%,
while the TECHNOLOGY GROWTH EQUITY FUND (Institutional Class) slipped by
1.1%. Technology stocks, in general, were the poorest performing sector of the
equity markets during this period.
All four of the CNI Charter Bond Funds showed healthy gains during this period,
led by the CNI CHARTER HIGH YIELD BOND FUND (+12.5% Institutional Class). The
CALIFORNIA TAX EXEMPT BOND FUND rose 2.0%, the CORPORATE BOND FUND gained 2.2%,
and the GOVERNMENT BOND FUND returned 0.8% (all returns listed are for the
Institutional Class).
Lastly, all three of the CNI Charter Money Market Funds produced steady,
consistent, and competitive returns. These returns were in line with their
respective investment mandates.
Please read the following pages carefully as they contain important information
on the assets and financial condition of the Funds. If you have any questions
about this report or the CNI Charter Funds, please call your investment
professional or (888) 889-0799.
Thank you for choosing CNI Charter Funds.
Sincerely,
/s/ Richard A. Weiss
Richard A. Weiss
PRESIDENT AND CHIEF INVESTMENT OFFICER
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.
----------------------------------------------------
*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
INVESTMENT ADVISER'S REPORT
SEPTEMBER 30, 2004
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EQUITY FUNDS
Over the year ending September 30, 2004, the U.S. equity market, as measured by
the S&P 500, returned 13.9%. The upward price movement in the S&P 500 continued
until late January when the Federal Reserve unexpectedly removed language
regarding how long interest rates were expected to remain low. Although the Fed
did not increase rates at that time, the market was spooked due to the specter
of higher interest rates. Prices rebounded higher, producing a 52-week closing
high in mid-February, but since then, the market has traded sideways, to
slightly lower.
Since the February high, the market has seen many reasons for its lack of upward
price movement. In early 2004, many investors considered the market too
expensive due to its rapid appreciation from March 2003 lows. Terror events in
Spain and conflicts in Iraq and the Middle East reminded investors about fears
that continue to plague the world. Higher interest rates became a reality in
June when the Fed raised the bank-lending rate to 1.25%, the first increase in
over four years. Technology shares remained under pressure as modest returns
were forecasted given current price levels. Job growth -- strong in the first
part of the year -- waned in the summer months. All the while, oil prices rose
dramatically, placing additional costs upon businesses and consumers. The Fed
continued to raise short rates with the bank-lending rate at 1.75% as of the end
of September.
For the fiscal year ending September 30, 2004, the LARGE CAP VALUE EQUITY FUND
returned 19.4% (Institutional Class). The S&P 500/BARRA Value Index returned
20.5% and the Lipper Large Cap Value Funds Classification returned 16.4%. The
Fund's overweight in the industrial sector added to overall performance as
companies like Cummins and Ryder System (gaining 70.1% and 63.2%, respectively,
during this period) benefited from increased industrial activity. Energy stocks,
in general, were the best performing, with companies like Occidental Petroleum
(up 62.6%) benefiting from higher oil prices. Although we underweighted the
financial sector marginally, Countrywide Financial gained 103.3% from the
sustained strength of the housing market and mortgage lending. Stocks that
detracted from the Fund's performance included Intel (down 26.7%), due to
concern about the effect margin compression would have on the world's largest
semiconductor maker. Additionally, Cardinal Health's poor performance (down
24.9%) detracted from the Fund's performance because of news of missed profit
forecasts and a federal investigation into accounting practices.
The LARGE CAP GROWTH EQUITY FUND returned 6.2% (Institutional Class) for the 12
months ending September 30, 2004. The S&P 500/BARRA Growth Index returned 7.5%
and the Lipper Large Cap Growth Funds Classification returned 7.1%. The Fund's
overweight in the industrial sector contributed to the fund's overall
performance. ITT Industries gained 34.9%, with higher earnings due to the
improving economy and cost cutting. Although the industry performed rather
poorly, the Fund's healthcare holdings added value relative to the Fund's
benchmark. Guidant gained 41.9% as prospects for its cardiac and vascular
products improved. UnitedHealth Group, the nation's largest health insurer,
gained 46.6%, as the company reduced costs and exhibited strong pricing power.
Stocks that detracted from the Fund's overall performance included National
Semiconductor (down 31.6%), reflecting concern about profit margins within the
chip industry as well as less than forecasted sales growth. Career Education
(down 52.2%) also negatively impacted Fund performance as the company missed
earnings targets in addition to an SEC investigation for accounting violations.
The RCB SMALL CAP VALUE FUND returned 25.0% (Institutional Class) for the 12
months ending September 30, 2004 as compared with the Russell 2000 Value Index
at 25.7%, the Russell 2000 Index at 18.8%, the Lipper Small Cap Core Funds
Classification at 20.5% and the Lipper Small Cap Value Funds
CNI CHARTER FUNDS | PAGE 4
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Classification at 23.9%. Strength in industrial stocks, as the economy continued
to chug along in the right direction, helped the performance of such stocks as
Ametek (+42.5%), Franklin Electric (+43.3%) and IDEX (+41.4%). Although not as
strong as some critics had expected, the direction was positive and orders for
products such as industrial motors, pumps and factory equipment increased. The
Fund's best performer was warehouse grocer Smart & Final (+168.2%) who's
management focus on its core business, combined with the economic recovery in
California, and a short-term boost from the Southern California grocery strike
all contributed to the stock's increase. The Fund's worst performer was
Whitehall Jewelers (-28.5%), a mall-based jewelry retailer. Whitehall was a
minor player in a jewelry industry investigation by the Department of Justice
during 2003 and 2004 that was recently settled with minimal pain for
shareholders.
The TECHNOLOGY GROWTH EQUITY FUND returned -1.1% (Institutional Class) for the
12 months ending September 30, 2004. The Frank Russell 3000 Technology Index
returned -0.1% and the Lipper Science & Technology Funds Objective returned
1.0%. Communications Equipment was the best performing group among the larger
industries within the Fund's benchmark. Harris, maker of wireless transmission
equipment, gained 55.0%, with higher-than-forecasted sales and reduced costs.
Technology distributor Scansource, (up 74.7%) added to the Fund's overall
performance with strong sales growth. Software stocks, in general, performed in
line with the overall Fund benchmark return. Autodesk, maker of computer-aided
design software, produced a stellar return (up 187.2%) continuing to beat
earnings estimates. The semiconductor industry was the worst performing among
the larger industries. Amkor Technology, provider of semiconductor packaging and
test services, lost 74.3% due to lower demand and higher material costs. Lexar
Media, maker of memory cards for digital cameras, fell 50.8% as increased
competition caused margins to shrink, hurting profits.
Every market environment has risks. Investors must weigh not only the negative
effects, but the potential each market presents. Economists continue to see an
economy that will exhibit solid growth into 2005. Interest rates, although
rising on the short end, still offer very low yields across the yield
curve. These low yields provide an impetus for equity prices with respect to
valuation and the risk premium relative to fixed income securities. Oil prices
remain a wild card -- with higher prices applying additional constraints to
economic growth -- but these prices are expected to moderate. Equity prices are
ultimately decided by corporate profits which should continue to grow, albeit,
at more normal growth rates. As always, the CNI Charter Equity Funds continue to
apply a disciplined investment approach with the objective of providing superior
investment returns across the various equity markets for which we invest.
Sincerely,
/s/ Brian L. Garbe
Brian L. Garbe
DIRECTOR OF RESEARCH
CITY NATIONAL ASSET MANAGEMENT, INC.
CNI CHARTER FUNDS | PAGE 5
FUND OVERVIEW
SEPTEMBER 30, 2004
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LARGE CAP VALUE EQUITY FUND
The Fund seeks to provide capital appreciation and moderate income consistent
with current returns available in the market place by investing in large U.S.
corporations and U.S. dollar denominated American Depository Receipts of large
foreign corporations which are undervalued and whose market valuations compare
favorably relative to similar companies.
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Comparison of Change in the Value of a $10,000 Investment in the Large Cap Value
Equity Fund, Institutional Class or Class a Shares, Versus the S&P 500/BARRA
Value Index, and the Lipper Large Cap Value Funds Classification(*)(1)
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
Large Cap Value Equity Fund
CNI Large Cap
Value Fund, CNI Large Cap Lipper Large
Institutional Value Fund, S&P 500/BARRA Cap Value
Class Shares Class A Shares Value Index Funds Classification
1/31/00 $ 10,000 $ 10,000 $ 10,000 $ 10,000
9/30/00 10,530 10,525 10,781 10,821
9/30/01 8,807 8,769 8,960 9,832
9/30/02 7,145 7,106 6,966 7,904
9/30/03 8,861 8,793 8,816 9,679
9/30/04 10,581 10,465 10,621 11,267
(*) In order to compare the Fund's performance against its benchmark, the
Fund's performance shown above begins at the month-end after the Fund's
inception.
(1) The performance in the above graph does not reflect the deduction of taxes
the shareholder will pay on Fund distributions or the redemptions of Fund
shares.
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund. Please note that one cannot invest directly in an
unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS
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Ticker 1-Year 3-Year Inception
Shares Symbol Return Return to Date
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Institutional Class (1)^ CNLIX 19.40% 6.31% 0.31%
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Class A (2) CVEAX 19.01% 6.07% 0.08%+
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(1) Commenced operations on January 14, 2000.
(2) Commenced operations on April 13, 2000.
^ The Fund's Institutional Class Shares are currently offered only to
accounts where City National Bank serves as trustee or in a fiduciary
capacity.
+ Class A Shares performance for the period prior to April 13, 2000 reflects
the performance of the Fund's Institutional Shares. The performance of the
Institutional Shares has not been adjusted to reflect the higher Rule
12b-1 Fees and expenses applicable to Class A Shares. If it had,
performance would have been lower than that shown.
Top Ten Holdings*
% OF PORTFOLIO
Exxon Mobil 5.9
Citigroup 3.4
American International Group 3.3
Bank of America 3.0
Verizon Communications 2.9
Wells Fargo 2.1
Countrywide Financial 2.0
ChevronTexaco 1.8
JPMorgan Chase 1.6
Hewlett-Packard 1.6
* Excludes Cash Equivalents
CNI CHARTER FUNDS | PAGE 6
FUND OVERVIEW
SEPTEMBER 30, 2004
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LARGE CAP GROWTH EQUITY FUND
The Fund seeks to provide capital appreciation by investing in large U.S.
corporations and U.S. dollar denominated American Depository Receipts of large
foreign corporations with the potential for growth and that possess superior
management, strong market position, consistent records of increased earnings and
a strong operating and financial position.
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Comparison of Change in the Value of a $10,000 Investment in the Large Cap
Growth Equity Fund, Institutional Class or Class A Shares, versus the S&P
500/BARRA Growth Index, and the Lipper Large Cap Growth Funds
Classification(*)(1)
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
Large Cap Growth Equity Fund
CNI Large Cap
Growth Equity Fund, CNI Large Cap Lipper Large
Institutional Growth Equity Fund, S&P 500/BARRA Cap Growth Funds
Class Shares Class A Shares Growth Index Classification
1/31/00 $ 10,000 $ 10,000 $ 10,000 $ 10,000
9/30/00 9,873 9,852 10,025 10,671
9/30/01 6,702 6,670 6,446 6,216
9/30/02 5,533 5,490 5,198 4,909
9/30/03 6,723 6,660 6,364 5,933
9/30/04 7,139 7,051 6,843 6,357
(*) In order to compare the Fund's performance against its benchmark, the
Fund's performance shown above begins at the month-end after the Fund's
inception.
(1) The performance in the above graph does not reflect the deduction of taxes
the shareholder will pay on Fund distributions or the redemptions of Fund
shares.
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund. Please note that one cannot invest directly in an
unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS
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Ticker 1-Year 3-Year Inception
Shares Symbol Return Return to Date
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Institutional Class (1)^ CNGIX 6.20% 2.13% (7.93)%
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Class A (2) CLEAX 5.87% 1.87% (8.17)%+
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(1) Commenced operations on January 14, 2000.
(2) Commenced operations on March 28, 2000.
^ The Fund's Institutional Class Shares are currently offered only to
accounts where City National Bank serves as trustee or in a fiduciary
capacity.
+ Class A Shares performance for the period prior to March 28, 2000 reflects
the performance of the Fund's Institutional Shares. The performance of the
Institutional Shares has not been adjusted to reflect the higher Rule
12b-1 Fees and expenses applicable to Class A Shares. If it had,
performance would have been lower than that shown.
Top Ten Holdings
% OF PORTFOLIO
Wal-Mart Stores 4.9
General Electric 4.1
Microsoft 3.8
Johnson & Johnson 3.3
IBM 3.2
Procter & Gamble 3.2
Pfizer 2.7
Intel 2.6
Home Depot 2.3
Dell 2.3
CNI CHARTER FUNDS | PAGE 7
FUND OVERVIEW
SEPTEMBER 30, 2004
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RCB SMALL CAP VALUE FUND
The Fund seeks to provide capital appreciation by investing primarily in smaller
U.S. corporations which are considered undervalued.
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Comparison of Change in the Value of a $10,000 Investment in the RCB Small Cap
Value Fund, Institutional Class, Class A or Class R Shares, versus the Russell
2000 Index, the Russell 2000 Value Index, the Lipper Small Cap Value Funds
Classification(*)(1), and the Lipper Small Cap Core Funds Classification(*)(1)
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
RCB Small Cap Value Fund
CNI RCB Small
Cap Value Fund, CNI RCB Small CNI RCB Small Lipper Small Lipper Small
Institutional Cap Value Fund, Cap Value Fund, Russell 200 Russell 2000 Cap Value Funds Cap Core Funds
Class Shares Class A Shares Class R Shares Index Value Index Classification Classification
9/30/98 $ 10,000 $ 10,000 $ 9,650 $ 10,000 $ 10,000 $ 10,000 $ 10,000
9/30/99 15,120 15,120 14,591 11,907 10,583 11,151 12,131
9/30/00 16,859 16,859 16,269 14,692 12,209 13,003 16,021
9/30/01 18,395 18,395 17,751 11,576 12,893 13,612 14,027
9/30/02 16,353 16,331 15,740 10,499 12,705 13,676 13,114
9/30/03 23,802 23,714 22,856 14,332 16,728 17,772 17,302
9/30/04 29,745 29,557 28,485 17,022 21,020 22,014 20,801
(*) In order to compare the Fund's performance against its benchmark, the
Fund's performance shown above begins at the month-end after the Fund's
inception.
(1) The performance in the above graph does not reflect the deduction of taxes
the shareholder will pay on Fund distributions or the redemptions of Fund
shares.
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund. Please note that one cannot invest directly in an
unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS
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Ticker 1-Year 3-Year 5-Year Inception
Shares Symbol Return Return Return to Date
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Institutional Class (1)^ RCBIX 24.97% 17.37%+ 14.49%+ 19.92%+
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Class A (2) RCBAX 24.64% 17.13%+ 14.35%+ 19.80%+
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Class R (3) RCBSX 24.63% 17.07% 14.31% 19.77%
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Class R with load RCBSX 20.28% 15.70% 13.50% 19.06%
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(1) Commenced operations on October 3, 2001.
(2) Commenced operations on October 3, 2001.
(3) Commenced operations on September 30, 1998.
^ The Fund's Institutional Class Shares are currently offered only to
accounts where City National Bank serves as trustee or in a fiduciary
capacity.
+ The performance of the Institutional Class and Class A Shares for the
period prior to October 3, 2001 reflect the performance of the Class R
Shares of a predecessor mutual fund. The performance of the Class R Shares
has not been adjusted to reflect the Rule 12b-1 Fees and expenses
applicable to Institutional and Class A Shares. Fees for the Institutional
Class Shares are lower than the fees for the Class R Shares;
correspondingly, performance would have been higher than that shown.
Top Ten Holdings*
% OF PORTFOLIO
SBS Broadcasting 4.4
Coinstar 4.1
Sealed Air 4.0
Gartner, Cl B 3.9
RH Donnelley 3.7
Ralcorp Holdings 3.6
Conseco 3.5
Alleghany 3.3
Intrawest 3.2
Advo 2.9
* Excludes Cash Equivalents
CNI CHARTER FUNDS | PAGE 8
FUND OVERVIEW
SEPTEMBER 30, 2004
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TECHNOLOGY GROWTH FUND
The Fund seeks to provide long-term capital appreciation by investing in U.S.
corporations and U.S. dollar denominated American Depository Receipts of foreign
corporations with the potential for growth and that are engaged in the
production, distribution and development of products or services based on
technology and should benefit significantly from advances or improvements in
technology.
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Comparison of Change in the Value of a $10,000 Investment in the Technology
Growth Fund, Institutional Class or Class A Shares, versus the Russell 3000
Technology Index, and the Lipper Science & Technology Funds Objective(*)(1)
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
Technology Growth Fund
CNI Technology
Growth Fund, CNI Technology Russell Lipper Science
Institutional Growth Fund, 3000 Technology Funds
Class Shares Class A Shares Technology Index Objective
10/31/00 10,000 10,000 10,000 10,000
9/30/01 3,530 3,525 3,675 3,553
9/30/02 2,253 2,241 2,494 2,333
9/30/03 3,490 3,466 4,026 3,806
9/30/04 3,450 3,406 4,024 3,845
(*) In order to compare the Fund's performance against its benchmark, the
Fund's performance shown above begins at the month-end after the Fund's
inception.
(1) The performance in the above graph does not reflect the deduction of taxes
the shareholder will pay on Fund distributions or the redemptions of Fund
shares.
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund. Please note that one cannot invest directly in an
unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS
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Ticker 1-Year 3-Year Inception
Shares Symbol Return Return to Date
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Institutional Class (1)^ CTEIX (1.14)% (0.76)% (23.33)%
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Class A (2) CTGAX (1.72)% (1.14)% (24.27)%
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(1) Commenced operations on October 3, 2000.
(2) Commenced operations on October 23, 2000.
^ The Fund's Institutional Class Shares are currently offered only to
accounts where City National Bank serves as trustee or in a fiduciary
capacity.
Top Ten Holdings
% OF PORTFOLIO
Microsoft 10.0
IBM 5.4
Dell 5.3
Intel 4.5
Cisco Systems 4.3
Hewlett-Packard 3.8
Oracle 3.0
Qualcomm 2.8
Texas Instruments 2.8
EMC 2.4
CNI CHARTER FUNDS | PAGE 9
INVESTMENT ADVISER'S REPORT
SEPTEMBER 30, 2004
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FIXED INCOME FUNDS
The bond market experienced a major shift in its shape as the yield curve
flattened sharply in the fiscal year ending September 30, 2004. The Federal
Reserve Bank initiated a tightening monetary policy stance by moving the Federal
Funds Rate to 1.75% from 1.0% towards the end of this fiscal year. This
certainly was not a surprise to the markets for the Fed has been stating for
about a year that it wanted to remove its "accommodative stance". The Fed also
stated that it plans to continue to raise short-term rates at a "measured pace".
Many economists expect the Federal Funds Rate to be between 3.5% and 4.5% by the
end of 2005.
During the fiscal year, we migrated to a generally more defensive portfolio
posture for our investment grade Funds. To that end, the Funds were quite active
during the last 12 months. Indeed, average maturities were shortened versus our
comparative benchmarks, average coupons were optimized and credit quality
remained of paramount importance. Although our general strategy was defensive, a
modified barbell stance was utilized with modest concentrations in two and ten
year maturities. This strategy continued to be beneficial given the flattening
yield curve environment at the end of the fiscal year.
The CNI CHARTER CORPORATE BOND FUND (Institutional Class) produced a total
return of 2.2% for the last 12 months. For the same period, the Lehman
Intermediate Corporate Index returned 3.9%. The corporate bond universe is
heavily weighted in lower quality (Baa) rated securities that did well during
this most recent period in tandem with our recent economic recovery. Our Fund
continued to retain a higher quality profile than the index and thus did not
capture all of the performance garnered by the lower quality bonds. Our Fund's
performance compares very favorably with its peer group where the Lipper
Short/Intermediate Investment Grade Debt Objective was up 2.0%.
The CNI CHARTER GOVERNMENT BOND FUND (Institutional Class) produced a total
return of 0.8% for the last 12 months. For the same period, the Lehman
Intermediate U.S. Government Bond Index returned 1.9%. While our defensive
portfolio structure may have caused some underperformance this past year, we
continue to believe that the Fund is positioned prudently with higher rates
potentially on the horizon. The Fund's performance relative to the peer group is
competitive as measured by the Lipper Short/Intermediate U.S. Government
Objective return of 1.3%.
The CNI CHARTER CALIFORNIA TAX EXEMPT BOND FUND (Institutional Class) produced a
total return of 2.0% for the last 12 months. For the same period, the Lehman CA
Intermediate-Short Municipal Index returned 2.9%. We continue to believe that
our modestly defensive strategic posture will prove beneficial in the near
future as interest rate volatility becomes more prevalent. The Fund's relative
performance vis-a-vis its peer group was excellent, where the Lipper CA
Short/Intermediate Municipal Debt Objective was up 1.5%.
The CNI CHARTER HIGH YIELD BOND FUND (Institutional Class) produced a total
return of 12.5% for the last 12 months. For the same period, the Citigroup High
Yield Market Index was up 12.5% and the Lipper High Current Yield Bond Fund
Objective was up 11.3%. Absolute performance continues to be strong for this
sector of the bond market as lower quality bonds did quite well during this
period.
STRATEGIC OUTLOOK FOR BOND FUNDS
Tightening monetary policy, better than expected GDP growth or high oil prices
could prompt us to become even more defensive with our maturity posture in the
coming fiscal year. These key factors remain central to our strategy -- and we
monitor them as well as other indicators in order to continue to add value to
our actively managed Funds.
Sincerely,
/s/ Rodney J. Olea
Rodney J. Olea
DIRECTOR OF FIXED INCOME
CITY NATIONAL ASSET MANAGEMENT, INC.
CNI CHARTER FUNDS | PAGE 10
FUND OVERVIEW
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
CORPORATE BOND FUND
The Fund seeks to provide current income (as the primary component of a total
return, intermediate duration strategy) by investing in a diversified portfolio
of investment grade fixed income securities, primarily corporate bonds issued by
domestic and international companies denominated in U.S. dollars.
- --------------------------------------------------------------------------------
Comparison of Change in the Value of a $10,000 Investment in the Corporate Bond
Fund, Institutional Class or Class A Shares, versus the Lehman Intermediate
Corporate Index, and Lipper Short/Intermediate Investment Grade Debt
Objective(*)(1)
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
Corporate Bond Fund
Lipper Short/
CNI Corporate Intermediate
Bond Fund, CNI Corporate Lehman Investment
Institutional Bond Fund, Intermediate Grade Debt
Class Shares Class A Shares Corporate Index Objective
1/31/00 $ 10,000 $ 10,000 $ 10,000 $ 10,000
9/30/00 10,595 10,610 10,645 10,597
9/30/01 11,882 11,892 11,993 11,753
9/30/02 12,602 12,568 12,853 12,382
9/30/03 13,451 13,381 14,130 12,965
9/30/04 13,740 13,648 14,687 13,219
(*) In order to compare the Fund's performance against its benchmark, the
Fund's performance shown above begins at the month-end after the Fund's
inception.
(1) The performance in the above graph does not reflect the deduction of taxes
the shareholder will pay on Fund distributions or the redemptions of Fund
shares.
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund. Please note that one cannot invest directly in an
unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
Ticker 1-Year 3-Year Inception
Shares Symbol Return Return to Date
- --------------------------------------------------------------------------------
Institutional Class (1)^ CNCIX 2.15% 4.96% 6.93%
- --------------------------------------------------------------------------------
Class A (2) CCBAX 1.99% 4.70% 6.78%+
- --------------------------------------------------------------------------------
(1) Commenced operations on January 14, 2000.
(2) Commenced operations on April 13, 2000.
^ The Fund's Institutional Class Shares are currently offered only to
accounts where City National Bank serves as trustee or in a fiduciary
capacity.
+ Class A Shares performance for the period prior to April 13, 2000 reflects
the performance of the Fund's Institutional Shares. The performance of the
Institutional Shares has not been adjusted to reflect the higher Rule
12b-1 Fees and expenses applicable to Class A Shares. If it had,
performance would have been lower than that shown.
Top Ten Holdings*
% OF PORTFOLIO
Lehman Brothers Holdings
8.250%, 06/15/07 2.6
AXA Financial
7.750%, 08/01/10 2.4
Allstate
7.200%, 12/01/09 2.4
WPS Resources
7.000%, 11/01/09 2.3
Kohl's
6.300%, 03/01/11 2.3
AFLAC
6.500%, 04/15/09 2.3
Kimco Realty, MTN
6.960%, 07/16/07 2.3
International Lease Finance
5.750%, 02/15/07 2.3
Countrywide Asset-Backed Certificates,
Ser 2004-10, Cl 2AV2
2.190%, 05/25/30 2.2
Heller Financial
6.375%, 03/15/06 2.2
* Excludes Cash Equivalents
CNI CHARTER FUNDS | PAGE 11
FUND OVERVIEW
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
GOVERNMENT BOND FUND
The Fund seeks to provide current income (as the primary component of a
total return, intermediate duration strategy) by investing primarily in
U.S. government securities either issued or guaranteed by the U.S.
government or its agencies or instrumentalities.
- --------------------------------------------------------------------------------
Comparison of Change in the Value of a $10,000 Investment in the Government Bond
Fund, Institutional Class or Class A Shares, versus the Lehman Intermediate U.S.
Government Bond Index, and the Lipper Short/Intermediate U.S. Government
Objective(*)(1)
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
Government Bond Fund
CNI Government Lehman Lipper Short/
Bond Fund, CNI Government Intermediate Intermediate
Institutional Bond Fund, U.S. Government U.S. Government
Class Shares Class A Shares Bond Index Objective
1/31/00 $ 10,000 $ 10,000 $ 10,000 $ 10,000
9/30/00 10,594 10,566 10,661 10,574
9/30/01 11,831 11,755 12,034 11,754
9/30/02 12,721 12,633 13,048 12,539
9/30/03 13,062 1,2975 13,505 12,855
9/30/04 13,168 13,046 13,760 13,020
(*) In order to compare the Fund's performance against its benchmark, the
Fund's performance shown above begins at the month-end after the Fund's
inception.
(1) The performance in the above graph does not reflect the deduction of taxes
the shareholder will pay on Fund distributions or the redemptions of Fund
shares.
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund. Please note that one cannot invest directly in an
unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
Ticker 1-Year 3-Year Inception
Shares Symbol Return Return to Date
- --------------------------------------------------------------------------------
Institutional Class (1)^ CNBIX 0.81% 3.64% 5.95%
- --------------------------------------------------------------------------------
Class A (2) CGBAX 0.55% 3.54% 5.74%+
- --------------------------------------------------------------------------------
(1) Commenced operations on January 14, 2000.
(2) Commenced operations on April 13, 2000.
^ The Fund's Institutional Class Shares are currently offered only to
accounts where City National Bank serves as trustee or in a fiduciary
capacity.
+ Class A Shares performance for the period prior to April 13, 2000 reflects
the performance of the Fund's Institutional Shares. The performance of the
Institutional Shares has not been adjusted to reflect the higher Rule
12b-1 Fees and expenses applicable to Class A Shares. If it had,
performance would have been lower than that shown.
Top Ten Holdings
% OF PORTFOLIO
FHLB
2.250%, 12/15/05 18.5
FNMA
4.000%, 12/15/08 9.4
FHLMC
4.250%, 06/15/05 7.4
FHLMC,
Ser 2480, Cl PD
6.000%, 11/15/31 7.2
U.S. Treasury Note
4.250%, 11/15/13 7.1
FHLMC
4.250%, 05/04/09 7.1
FHLB
7.250%, 05/13/05 6.8
FHLMC,
Ser 2698, Cl BE
4.500%, 11/15/32 5.8
FHLB
2.000%, 12/02/05 4.7
FHLMC,
Ser 2670, Cl QP
4.000%, 02/15/27 4.6
CNI CHARTER FUNDS | PAGE 12
FUND OVERVIEW
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT BOND FUND
The Fund seeks to provide current income exempt from Federal and California
state income tax (as the primary component of a total return strategy) by
investing primarily in investment grade California municipal bonds and notes.
- --------------------------------------------------------------------------------
Comparison of Change in the Value of a $10,000 Investment in the California Tax
Exempt Bond Fund, Institutional Class or Class A Shares, versus the Lehman CA
Intermediate-Short Municipal Index, and the Lipper CA Short/Intermediate
Municipal Debt Objective(*)(1)
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
California Tax Exempt Bond Fund
CNI Tax Exempt Lehman CA CA Short/
Bond Fund, CNI Tax Exempt Intermediate Intermediate
Institutional Bond Fund, Short Municipal Municipal
Class Shares Class A Shares Index Debt Objective
1/31/00 $ 10,000 $ 10,000 $ 10,000 $ 10,000
9/30/00 10,506 10,493 10,490 10,444
9/30/01 11,263 11,236 11,344 11,158
9/30/02 12,117 12,067 12,209 11,864
9/30/03 12,436 12,353 12,568 12,107
9/30/04 12,684 12,581 12,932 12,282
(*) In order to compare the Fund's performance against its benchmark, the
Fund's performance shown above begins at the month-end after the Fund's
inception.
(1) The performance in the above graph does not reflect the deduction of taxes
the shareholder will pay on Fund distributions or the redemptions of Fund
shares.
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund. Please note that one cannot invest directly in an
unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
Ticker 1-Year 3-Year Inception
Shares Symbol Return Return to Date
- --------------------------------------------------------------------------------
Institutional Class (1)^ CNTIX 2.00% 4.04% 5.25%
- --------------------------------------------------------------------------------
Class A (2) CCTEX 1.84% 3.84% 5.07%+
- --------------------------------------------------------------------------------
(1) Commenced operations on January 14, 2000.
(2) Commenced operations on April 13, 2000.
^ The Fund's Institutional Class Shares are currently offered only to
accounts where City National Bank serves as trustee or in a fiduciary
capacity.
+ Class A Shares performance for the period prior to April 13, 2000 reflects
the performance of the Fund's Institutional Shares. The performance of the
Institutional Shares has not been adjusted to reflect the higher Rule
12b-1 Fees and expenses applicable to Class A Shares. If it had,
performance would have been lower than that shown.
Top Ten Holdings*
% OF PORTFOLIO
California State, Economic
Recovery Authority,
Ser B, GO
3.500%, 07/01/23 3.1
Irvine, Improvement Board Act
1915, Limited Obligation
Assessment District #93-14, SPA
1.730%, 09/02/25 3.0
Sweetwater, Water Authority,
RB, AMBAC
5.250%, 04/01/10 2.8
Saddleback, Community College
District, 1996 Capital Improvement
Financing Project, COP, MBIA
Callable 06/01/06 @ 102
5.500%, 06/01/15 2.7
South Gate, Public Financing
Authority, South Gate
Redevelopment Project,
TA, AMBAC
Callable 09/01/13 @ 100
5.250%, 09/01/18 2.3
San Francisco (City & County),
Building Authority, Department
of General Services & Leasing,
Ser A, RB
5.000%, 10/01/13 2.2
San Mateo County, Transit District
Authority, Ser A, RB, MBIA
Callable 06/01/08 @ 101
5.000%, 06/01/14 2.2
New York City, Transitional
Finance Authority, Future
Tax Secured Project,
Ser B, RB, MBIA
Callable 05/15/08 @ 101
4.600%, 11/15/12 2.1
California State, Department
of Water Resources & Power,
Ser B-2, RB
1.800%, 05/01/22 2.0
San Francisco (City & County),
Public Utility Authority,
Ser A, RB, MBIA
Callable 11/01/06 @ 101.5
5.000%, 11/01/17 2.0
* Excludes cash equivalents
CNI CHARTER FUNDS | PAGE 13
FUND OVERVIEW
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
HIGH YIELD BOND FUND
The Fund seeks to maximize total return by investing primarily in fixed income
securities rated below investment grade including corporate bonds and
debentures, convertible and preferred securities, and zero coupon obligations.
The Fund may also invest in fixed income securities rated below investment grade
issued by governments and agencies, both U.S. and foreign, and in equity
securities. The Fund seeks to invest in securities that offer a high current
yield as well as total return potential and diversifies across issuers,
industries and sectors to control risks.
- --------------------------------------------------------------------------------
Comparison of Change in the Value of a $10,000 Investment in the High Yield Bond
Fund, Institutional Class or Class A Shares, versus the Citigroup High Yield
Market Index and the Lipper High Current Yield Bond Funds Objective(*)(1)
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
High Yield Bond Fund
CNI High Yield
Bond Fund, CNI High Yield Citigroup High Lipper High
Institutional Bond Fund, Yield Market Current Yield
Class Shares Class A Shares Index Bond Funds Index
1/31/00 $ 10,000 $ 10,000 $ 10,000 $ 10,000
9/30/00 10,412 10,386 10,016 9,901
9/30/01 10,157 10,102 9,413 9,039
9/30/02 10,644 10,555 9,098 8,866
9/30/03 12,747 12,602 12,124 11,083
9/30/04 14,336 14,132 13,644 12,331
(*) In order to compare the Fund's performance against its benchmark, the
Fund's performance shown above begins at the month-end after the Fund's
inception.
(1) The performance in the above graph does not reflect the deduction of taxes
the shareholder will pay on Fund distributions or the redemptions of Fund
shares.
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund. Please note that one cannot invest directly in an
unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
Ticker 1-Year 3-Year Inception
Shares Symbol Return Return to Date
- --------------------------------------------------------------------------------
Institutional Class (1)^ CHYIX 12.47% 12.17% 7.96%
- --------------------------------------------------------------------------------
Class A (1) CHBAX 12.14% 11.84% 7.63%
- --------------------------------------------------------------------------------
(1) Commenced operations on January 14, 2000.
^ The Fund's Institutional Class Shares are currently offered only to
accounts where City National Bank serves as trustee or in a fiduciary
capacity.
Top Ten Holdings*
% OF PORTFOLIO
Mediacom Capital
7.875, 02/15/11 0.9
Atlantic Broadband
9.375%, 01/15/14 0.9
Norske Skog Canada
7.375%, 03/01/14 0.6
Collins & Aikman Products
10.750%, 12/31/11 0.6
Lucent Technologies
5.500%, 11/15/08 0.6
CCO Holdings
8.750%, 11/15/13 0.6
MGM Mirage
5.875%, 02/27/14 0.6
Swift
12.500%, 01/01/10 0.5
Kabel Deutschland
10.625%, 07/01/14 0.5
MTR Gaming Group, Ser B
9.750%, 04/01/10 0.5
* Excludes cash equivalents
CNI CHARTER FUNDS | PAGE 14
INVESTMENT ADVISER'S REPORT
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
MONEY MARKET FUNDS
The money market environment changed dramatically over the fiscal year ending
September 30, 2004. Although it has taken longer than most market participants
had anticipated, it is quite clear that a tighter monetary policy is coming down
the pike. The low but steadily rising yields of the CNI Charter Money Market
Funds are testimony to this fundamental change underway.
The Federal Open Market Committee (FOMC) effectively unwound the rate reductions
it put into place in fiscal year 2003. The Federal Funds rate was raised three
times during this period -- from 1.00% to 1.75%. Additionally, quite notably
their assessment of risks for the economy changed from conditions of
"Disinflation" at the September 16, 2003 meeting to that of "Balanced" as of the
meeting on September 21, 2004. As measured by Federal Funds futures contracts at
the time of this writing, there is currently a 100% probability of another 25
basis points rate hike by the end of 2004.
The CNI CHARTER PRIME MONEY MARKET FUND continued to emphasize quality and
liquidity in these uncertain times. With interest rates remaining near their
historic lows this past year, the average days to maturity has remained
relatively short. This maturity allocation should position the Fund to perform
competitively in 2005. The Fund has focused primarily on high-grade short-term
commercial paper and corporate securities as well as government agency notes on
the longer-end of the money market maturity spectrum.
The CNI CHARTER GOVERNMENT MONEY MARKET FUND continued to be well positioned
from both a sector as well as maturity perspective. The maturity profile
incorporated a barbell strategy for most of the past fiscal year. This strategy
has been beneficial, given the relatively steep short-term yield curve over the
past year. This should also position the Fund to add value as short maturities
continue to rise in 2005. The Fund's yield continued to be enhanced by the
concentration of Government Agency securities over Treasury instruments.
Our objective for the CNI CHARTER CALIFORNIA TAX EXEMPT MONEY MARKET FUND has
always been safety and liquidity. Over the past fiscal year, prior historic
budgetary challenges in California have given way to cautious optimism with
regard to the state of the State. Our stringent credit research effort remains
the cornerstone to managing the Fund in the never ending political/economic
backdrop of Sacramento. The average days to maturity remains relatively short
and our credit quality profile remains very high.
STRATEGIC OUTLOOK
Our outlook continues to be constructive for money market investments. Short
rates will likely continue their steady march upward into 2005. While an
expanding economy is often synonymous with rising rates that in turn may cause
dislocations in financial markets, it can also provide opportunities for higher
yields and sector allocation shifts for money market funds. We are monitoring
the market very closely and will be proactive so as to take advantage of market
opportunities.
Sincerely,
/s/ Rodney J. Olea
Rodney J. Olea
DIRECTOR OF FIXED INCOME
CITY NATIONAL ASSET MANAGEMENT, INC.
CNI CHARTER FUNDS | PAGE 15
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
LARGE CAP VALUE EQUITY FUND
SECTOR WEIGHTINGS*:
[THE FOLLOWING WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
35.9% Financials
12.9% Energy
12.7% Consumer Discretionary
8.6% Industrials
6.4% Telecommunications
6.0% Information Technology
5.3% Utilities
4.1% Healthcare
3.4% Materials
2.5% Consumer Staples
2.2% Short-Term Investments
* Percentages based on total investments.
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCK [98.1%]
ALUMINUM [0.9%]
Alcoa 12,300 $ 413
==========================================================================
APPAREL/TEXTILES [0.3%]
Jones Apparel Group 3,600 129
==========================================================================
AUTOMOTIVE [1.8%]
Ford Motor 11,000 155
General Motors 8,250 350
Johnson Controls 5,000 284
--------------------------------------------------------------------------
TOTAL AUTOMOTIVE 789
==========================================================================
BANKS [14.8%]
Bank of America 30,474 1,320
Bank of New York 11,600 338
Fifth Third Bancorp 8,700 428
Golden West Financial 3,300 366
JPMorgan Chase 17,905 711
Keycorp 10,400 329
Mellon Financial 11,800 327
National City 7,300 282
PNC Financial Services Group 5,800 314
Wachovia 14,400 676
Washington Mutual 10,500 410
Wells Fargo 15,730 938
Zions Bancorporation 2,400 147
--------------------------------------------------------------------------
TOTAL BANKS 6,586
==========================================================================
BUILDING & CONSTRUCTION [0.9%]
Centex 4,800 242
Vulcan Materials 3,500 179
--------------------------------------------------------------------------
TOTAL BUILDING & CONSTRUCTION 421
==========================================================================
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
BUSINESS SERVICES [1.2%]
Cendant 17,000 $ 367
Fiserv* 4,700 164
--------------------------------------------------------------------------
TOTAL BUSINESS SERVICES 531
CABLE/MEDIA [2.1%]
Clear Channel Communications 8,300 259
Time Warner* 24,000 387
Tribune 7,600 313
--------------------------------------------------------------------------
TOTAL CABLE/MEDIA 959
==========================================================================
CHEMICALS [0.9%]
Air Products & Chemicals 7,400 402
==========================================================================
CIRCUIT BOARDS [0.7%]
Jabil Circuit* 9,100 209
Solectron* 22,000 109
--------------------------------------------------------------------------
TOTAL CIRCUIT BOARDS 318
==========================================================================
COMPUTER STORAGE DEVICES [0.4%]
EMC-Mass* 14,900 172
==========================================================================
COMPUTER SYSTEM DESIGN & SERVICES [0.5%]
Computer Sciences* 5,000 235
==========================================================================
COMPUTER & PERIPHERALS [1.5%]
Hewlett-Packard 36,800 690
==========================================================================
CONTAINERS & PACKAGING [0.7%]
MeadWestvaco 9,500 303
==========================================================================
DATA PROCESSING [0.6%]
Affiliated Computer Services,
Cl A* 4,500 251
==========================================================================
DIVERSIFIED MANUFACTURING [5.4%]
Caterpillar 4,900 394
Cummins 3,700 273
Danaher 7,000 359
ITT Industries 4,300 344
Textron 5,400 347
Tyco International 22,300 684
--------------------------------------------------------------------------
TOTAL DIVERSIFIED MANUFACTURING 2,401
==========================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 16
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
LARGE CAP VALUE EQUITY FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
ELECTRICAL SERVICES [4.1%]
Constellation Energy Group 6,100 $ 243
Dominion Resources 4,400 287
Entergy 4,600 279
Exelon 10,000 367
FirstEnergy 9,700 399
FPL Group 1,600 109
PPL 3,400 160
---------------------------------------------------------------------------
TOTAL ELECTRICAL SERVICES 1,844
===========================================================================
ENTERTAINMENT [2.1%]
Brunswick 6,500 298
Carnival 5,400 255
Walt Disney 16,800 379
---------------------------------------------------------------------------
TOTAL ENTERTAINMENT 932
===========================================================================
FINANCIAL SERVICES [8.4%]
Capital One Financial 1,900 141
Citigroup 34,386 1,517
Countrywide Financial 22,398 882
Freddie Mac 8,330 544
MBNA 16,910 426
State Street 5,300 226
---------------------------------------------------------------------------
TOTAL FINANCIAL SERVICES 3,736
===========================================================================
FOOD & BEVERAGE [1.6%]
Archer-Daniels-Midland 16,900 287
Coca-Cola Enterprises 12,100 229
Supervalu 8,000 220
---------------------------------------------------------------------------
TOTAL FOOD & BEVERAGE 736
===========================================================================
FORESTRY [0.5%]
Weyerhaeuser 3,400 226
===========================================================================
GAS/NATURAL GAS [1.2%]
KeySpan 5,600 220
Sempra Energy 8,600 311
---------------------------------------------------------------------------
TOTAL GAS/NATURAL GAS 531
===========================================================================
HEALTHCARE PRODUCTS & SERVICES [3.7%]
Aetna 3,600 360
AmerisourceBergen 2,900 156
Anthem* 2,600 227
Cigna 4,500 313
HCA 10,300 393
McKesson 8,000 205
---------------------------------------------------------------------------
TOTAL HEALTHCARE PRODUCTS & SERVICES 1,654
===========================================================================
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
HOTELS & LODGING [0.4%]
Starwood Hotels & Resorts
Worldwide 3,700 $ 172
===========================================================================
HOUSEHOLD PRODUCTS [0.8%]
Black & Decker 2,000 155
Fortune Brands 2,600 193
---------------------------------------------------------------------------
TOTAL HOUSEHOLD PRODUCTS 348
===========================================================================
INSURANCE [7.7%]
ACE ADR 4,600 184
AFLAC 4,400 173
Allstate 10,500 504
American International Group 21,800 1,482
Chubb 4,900 344
Progressive 3,300 280
Prudential Financial 9,700 456
---------------------------------------------------------------------------
TOTAL INSURANCE 3,423
===========================================================================
INVESTMENT BANKER/BROKER DEALER [4.9%]
Goldman Sachs Group 5,200 485
Lehman Brothers Holdings 5,700 454
Merrill Lynch 13,400 666
Morgan Stanley 11,800 582
---------------------------------------------------------------------------
TOTAL INVESTMENT BANKER/BROKER DEALER 2,187
===========================================================================
PETROLEUM & FUEL PRODUCTS [3.2%]
Anadarko Petroleum 2,098 139
Apache 6,006 301
Burlington Resources 6,000 245
Devon Energy 5,200 369
Occidental Petroleum 7,000 392
---------------------------------------------------------------------------
TOTAL PETROLEUM & FUEL PRODUCTS 1,446
===========================================================================
PETROLEUM REFINING [9.7%]
ChevronTexaco 15,240 818
ConocoPhillips 6,340 525
Exxon Mobil 54,360 2,627
Marathon Oil 8,500 351
---------------------------------------------------------------------------
TOTAL PETROLEUM REFINING 4,321
===========================================================================
RAILROADS [1.1%]
Burlington Northern Santa Fe 8,900 341
Union Pacific 2,500 146
---------------------------------------------------------------------------
TOTAL RAILROADS 487
===========================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 17
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
LARGE CAP VALUE EQUITY FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
RETAIL [5.5%]
CVS 8,700 $ 367
Darden Restaurants 8,550 199
Federated Department Stores 5,875 267
Home Depot 5,800 227
JC Penney 8,000 282
Limitedbrands 15,200 339
Lowe's 3,800 207
McDonald's 6,900 193
Staples 7,500 224
Target 3,800 172
---------------------------------------------------------------------------
TOTAL RETAIL 2,477
===========================================================================
SEMI-CONDUCTORS/INSTRUMENTS [2.4%]
Intel 11,150 224
Micron Technology* 22,400 269
PerkinElmer 11,800 203
Tektronix 5,900 196
Texas Instruments 7,500 160
---------------------------------------------------------------------------
TOTAL SEMI-CONDUCTORS/INSTRUMENTS 1,052
===========================================================================
TELEPHONES & TELECOMMUNICATIONS [6.4%]
Alltel 5,900 324
BellSouth 8,200 222
CenturyTel 7,300 250
SBC Communications 11,700 304
Sprint 24,300 489
Verizon Communications 32,409 1,276
---------------------------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATIONS 2,865
===========================================================================
TRANSPORTATION SERVICES [1.7%]
FedEx 4,700 403
Ryder System 7,200 338
---------------------------------------------------------------------------
TOTAL TRANSPORTATION SERVICES 741
===========================================================================
TOTAL COMMON STOCK
(Cost $34,562) 43,778
======================================================================
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
CASH EQUIVALENTS [2.2%]
Fidelity Institutional Domestic
Money Market Portfolio,
Cl I 957,173 $ 957
SEI Daily Income Trust,
Prime Obligation Fund, Cl A 33,783 34
------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(Cost $991) 991
===================================================================
TOTAL INVESTMENTS [100.3%]
(Cost $35,553) 44,769
===================================================================
OTHER ASSETS AND LIABILITIES [-0.3%]
Investment Advisory Fees Payable (24)
Shareholder Servicing & Distribution
Fees Payable (11)
Administration Fees Payable (3)
Other Assets and Liabilities, Net (106)
------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (144)
===================================================================
NET ASSETS [100.0%] $ 44,625
========================================================================
NET ASSETS:
Paid-in-Capital (unlimited authorization --
$0.01 par value) $ 33,847
Distributions in excess of
net investment income (1)
Accumulated net realized gain
on investments 1,563
Net unrealized appreciation
on investments 9,216
------------------------------------------------------------------------
NET ASSETS [100.0%] $ 44,625
========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($38,343,490 / 4,372,581 shares) $ 8.77
========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($6,281,246 / 716,887 shares) $ 8.76
========================================================================
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITARY RECEIPT
CL -- CLASS
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 18
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
LARGE CAP GROWTH EQUITY FUND
SECTOR WEIGHTINGS*:
[THE FOLLOWING WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
25.2% Information Technology
21.7% Healthcare
18.4% Consumer Staples
14.0% Industrials
9.5% Consumer Discretionary
4.0% Financials
2.1% Materials
1.8% Short-Term Investments
1.6% Energy
1.0% Global Stock
0.5% Telecommunications
0.2% Utilities
* Percentages based on total investments.
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCK [98.2%]
AEROSPACE & DEFENSE [2.6%]
Boeing 3,800 $ 196
L-3 Communications Holdings 2,500 168
United Technologies 4,800 448
---------------------------------------------------------------------------
TOTAL AEROSPACE & DEFENSE 812
===========================================================================
AUTOMOTIVE [1.0%]
Harley-Davidson 5,200 309
===========================================================================
BANKS [0.7%]
North Fork Bancorporation 5,100 227
===========================================================================
BIOMEDICAL RESEARCH & PRODUCTS [0.8%]
Applera - Applied Biosystems
Group 3,600 68
Millipore* 3,400 163
---------------------------------------------------------------------------
TOTAL BIOMEDICAL RESEARCH & PRODUCTS 231
===========================================================================
BUSINESS SERVICES [6.5%]
Cendant 8,300 179
Deluxe 3,800 156
eBay* 6,400 588
First Data 9,400 409
Fiserv* 3,400 119
H&R Block 5,400 267
Paychex 4,800 145
Yahoo!* 4,100 139
---------------------------------------------------------------------------
TOTAL BUSINESS SERVICES 2,002
===========================================================================
CABLE/MEDIA [0.6%]
Omnicom Group 2,600 190
===========================================================================
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
CHEMICALS [1.3%]
Dow Chemical 5,000 $ 226
International Flavors &
Fragrances 4,300 164
---------------------------------------------------------------------------
TOTAL CHEMICALS 390
===========================================================================
COMMUNICATIONS EQUIPMENT [2.3%]
Cisco Systems* 38,150 690
===========================================================================
COMPUTER & PERIPHERALS [6.2%]
Dell* 20,065 714
IBM 11,600 995
Lexmark International* 2,500 210
---------------------------------------------------------------------------
TOTAL COMPUTER & PERIPHERALS 1,919
===========================================================================
CONTAINERS & PACKAGING [0.6%]
Ball 4,800 180
===========================================================================
DATA PROCESSING [0.6%]
Affiliated Computer Services,
Cl A* 3,100 173
===========================================================================
DIVERSIFIED MANUFACTURING [7.3%]
3M 2,600 208
Caterpillar 3,750 301
Danaher 5,500 282
General Electric 37,875 1,272
ITT Industries 2,100 168
---------------------------------------------------------------------------
TOTAL DIVERSIFIED MANUFACTURING 2,231
===========================================================================
DRUGS [10.8%]
Abbott Laboratories 5,595 237
Barr Pharmaceuticals* 3,200 133
Eli Lilly 3,930 236
Forest Laboratories* 6,300 283
Johnson & Johnson 18,164 1,023
Pfizer 27,008 827
Teva Pharmaceutical Industries
ADR 5,600 145
Wyeth 12,150 454
---------------------------------------------------------------------------
TOTAL DRUGS 3,338
===========================================================================
EDUCATIONAL SERVICES [1.1%]
Apollo Group, Cl A* 4,400 323
===========================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 19
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
LARGE CAP GROWTH EQUITY FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
ELECTRICAL SERVICES [0.2%]
Exelon 2,000 $ 73
===========================================================================
FINANCIAL SERVICES [2.6%]
Capital One Financial 3,100 229
Countrywide Financial 3,900 153
Fannie Mae 4,600 292
MBNA 5,200 131
---------------------------------------------------------------------------
TOTAL FINANCIAL SERVICES 805
===========================================================================
FOOD & BEVERAGE [7.5%]
Adolph Coors 2,700 183
Archer-Daniels-Midland 8,700 148
Coca-Cola 9,800 393
Kraft Foods, Cl A 3,000 95
Pepsi Bottling Group 5,700 155
PepsiCo 9,900 482
Sara Lee 18,700 427
Sysco 10,300 308
Tyson Foods 8,100 130
---------------------------------------------------------------------------
TOTAL FOOD & BEVERAGE 2,321
===========================================================================
GAS/NATURAL GAS [0.2%]
Praxair 1,700 73
---------------------------------------------------------------------------
HEALTHCARE PRODUCTS & SERVICES [4.0%]
AmerisourceBergen 3,700 199
Express Scripts* 3,600 235
IMS Health 7,500 179
Lincare Holdings* 2,200 65
McKesson 4,700 121
UnitedHealth Group 6,000 443
---------------------------------------------------------------------------
TOTAL HEALTHCARE PRODUCTS & SERVICES 1,242
===========================================================================
HOUSEHOLD PRODUCTS [6.3%]
Avon Products 6,500 284
Fortune Brands 3,450 256
Gillette 6,400 267
Kimberly-Clark 2,400 155
Procter & Gamble 18,000 974
---------------------------------------------------------------------------
TOTAL HOUSEHOLD PRODUCTS 1,936
===========================================================================
INSURANCE [0.4%]
Marsh & McLennan 2,400 110
===========================================================================
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
INVESTMENT BANKER/BROKER DEALER [0.3%]
Federated Investors 3,000 $ 85
===========================================================================
MEDICAL PRODUCTS & SERVICES [6.6%]
Bard (C.R.) 3,200 181
Baxter International 3,800 122
Boston Scientific* 9,800 389
Community Health Systems* 5,000 134
Guidant 4,100 271
St. Jude Medical* 3,600 271
Stryker 6,700 322
Zimmer Holdings* 4,100 324
---------------------------------------------------------------------------
TOTAL MEDICAL PRODUCTS & SERVICES 2,014
===========================================================================
PETROLEUM & FUEL PRODUCTS [1.6%]
Schlumberger 4,100 276
XTO Energy 6,750 219
---------------------------------------------------------------------------
TOTAL PETROLEUM & FUEL PRODUCTS 495
===========================================================================
PREPACKAGING SOFTWARE [8.1%]
Adobe Systems 3,800 188
Citrix Systems* 8,200 144
Electronic Arts* 5,900 271
Intuit* 5,000 227
Microsoft 42,730 1,181
Oracle* 43,160 487
---------------------------------------------------------------------------
TOTAL PREPACKAGING SOFTWARE 2,498
===========================================================================
RETAIL [10.5%]
Bed Bath & Beyond* 4,200 156
Family Dollar Stores 2,500 68
Home Depot 18,300 717
Lowe's 8,800 478
NBTY* 6,500 140
Staples 5,200 155
Wal-Mart Stores 28,475 1,515
---------------------------------------------------------------------------
TOTAL RETAIL 3,229
===========================================================================
SEMI-CONDUCTORS/INSTRUMENTS [5.4%]
Broadcom, Cl A* 5,600 153
Intel 40,150 806
Maxim Integrated Products 5,800 245
Nvidia* 7,600 110
Texas Instruments 15,900 338
---------------------------------------------------------------------------
TOTAL SEMI-CONDUCTORS/INSTRUMENTS 1,652
===========================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 20
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
LARGE CAP GROWTH EQUITY FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
TELEPHONES & TELECOMMUNICATIONS [1.0%]
Nextel Communications* 6,800 $ 162
Vodafone ADR 6,400 154
---------------------------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATIONS 316
===========================================================================
TRANSPORTATION SERVICES [1.1%]
United Parcel Service, Cl B 4,500 342
===========================================================================
TOTAL COMMON STOCK
(Cost $29,633) 30,206
=======================================================================
CASH EQUIVALENTS [1.7%]
Fidelity Institutional Domestic
Money Market Portfolio,
Cl I 439,547 440
SEI Daily Income Trust,
Prime Obligation Fund, Cl A 106,247 106
---------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(Cost $546) 546
=======================================================================
TOTAL INVESTMENTS [99.9%]
(Cost $30,179) 30,752
=======================================================================
OTHER ASSETS AND LIABILITIES [0.1%]
Investment Advisory Fees Payable (14)
Shareholder Servicing & Distribution
Fees Payable (7)
Administration Fees Payable (2)
Other Assets and Liabilities, Net 69
---------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES 46
=======================================================================
NET ASSETS [100.0%] $ 30,798
===========================================================================
DESCRIPTION VALUE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Paid-in-Capital (unlimited authorization --
$0.01 par value) $ 35,007
Undistributed net investment income 3
Accumulated net realized loss
on investments (4,785)
Net unrealized appreciation
on investments 573
---------------------------------------------------------------------------
NET ASSETS [100.0%] $ 30,798
===========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($25,575,449 / 3,783,861 shares) $ 6.76
===========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($5,222,768 / 780,170 shares) $ 6.69
===========================================================================
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITARY RECEIPT
CL -- CLASS
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 21
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
RCB SMALL CAP VALUE FUND
SECTOR WEIGHTINGS*:
[THE FOLLOWING WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
36.9% Consumer Discretionary
22.6% Industrials
16.0% Financials
4.9% Information Technology
4.0% Materials
3.7% Corporate Bonds
3.6% Consumer Staples
3.0% Short-Term Investments
2.3% Preferred Stock
1.9% Utilities
1.1% Healthcare
* Percentages based on total investments.
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCK [90.3%]
BROADCASTING, NEWSPAPERS & ADVERTISING [13.8%]
Advo 49,100 $ 1,519
Cumulus Media* 83,250 1,198
Fisher Communications* 21,700 1,041
Grey Global Group 1,210 1,204
SBS Broadcasting* 69,600 2,343
---------------------------------------------------------------------------
TOTAL BROADCASTING, NEWSPAPERS
& ADVERTISING 7,305
===========================================================================
BUSINESS SERVICES [20.0%]
Arbitron* 25,700 941
Coinstar* 92,060 2,145
Deluxe 21,450 880
Equifax 38,900 1,025
Gartner, Cl B* 177,800 2,053
NDCHealth 36,000 578
RH Donnelley* 39,600 1,955
Watson Wyatt 37,800 994
---------------------------------------------------------------------------
TOTAL BUSINESS SERVICES 10,571
===========================================================================
CHEMICALS [1.7%]
Compass Minerals International* 41,500 921
===========================================================================
CONSUMER PRODUCTS & SERVICES [2.9%]
Central Garden & Pet* 49,300 1,510
===========================================================================
CONSUMER SERVICES [1.7%]
Angelica 36,400 906
===========================================================================
DATA PROCESSING [1.1%]
Certegy 15,800 588
===========================================================================
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
DIVERSIFIED MANUFACTURING [2.4%]
EnPro Industries* 53,000 $ 1,279
===========================================================================
ELECTRICAL PRODUCTS [5.7%]
GrafTech International* 96,300 1,343
Littelfuse* 19,300 667
Sierra Pacific Resources* 109,800 983
---------------------------------------------------------------------------
TOTAL ELECTRICAL PRODUCTS 2,993
===========================================================================
ENTERTAINMENT [3.2%]
Intrawest 88,100 1,669
===========================================================================
FOOD & BEVERAGE [5.5%]
Ralcorp Holdings* 52,100 1,881
Triarc, Cl B 88,800 1,018
---------------------------------------------------------------------------
TOTAL FOOD & BEVERAGE 2,899
===========================================================================
INSURANCE [10.2%]
Alleghany* 6,380 1,741
Conseco* 104,700 1,849
Fairfax Financial Holdings 4,800 599
White Mountains Insurance
Group 2,300 1,210
---------------------------------------------------------------------------
TOTAL INSURANCE 5,399
===========================================================================
MACHINERY [4.9%]
Ametek 30,700 931
Franklin Electric 19,400 768
IDEX 26,800 910
---------------------------------------------------------------------------
TOTAL MACHINERY 2,609
===========================================================================
PAPER & PAPER PRODUCTS [5.7%]
Rayonier 20,209 914
Sealed Air* 45,500 2,109
---------------------------------------------------------------------------
TOTAL PAPER & PAPER PRODUCTS 3,023
===========================================================================
RAILROADS [2.1%]
Kansas City Southern* 74,240 1,126
===========================================================================
REAL ESTATE INVESTMENT TRUST [3.9%]
Annaly Mortgage Management 50,800 870
Price Legacy 64,159 1,216
---------------------------------------------------------------------------
TOTAL REAL ESTATE INVESTMENT TRUST 2,086
===========================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 22
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
RCB SMALL CAP VALUE FUND (CONCLUDED)
SHARES/FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
RETAIL [5.5%]
IHOP 26,480 $ 1,012
Smart & Final* 47,400 795
Whitehall Jewelers* 141,000 1,132
---------------------------------------------------------------------------
TOTAL RETAIL 2,939
===========================================================================
TOTAL COMMON STOCK
(Cost $38,045) 47,823
=======================================================================
PREFERRED STOCK [2.2%]
ENTERTAINMENT [2.2%]
Six Flags 57,200 1,179
---------------------------------------------------------------------------
TOTAL PREFERRED STOCK
(Cost $1,138) 1,179
=======================================================================
CORPORATE BONDS [3.7%]
BUSINESS SERVICES [1.8%]
Danka Business
Callable 04/01/05 @ 105
10.000%, 04/01/08 $1,000 960
===========================================================================
FINANCIAL SERVICES [1.9%]
Labranche (A)
Callable 05/15/07 @ 104.75
9.500%, 05/15/09 1,000 1,000
===========================================================================
TOTAL CORPORATE BONDS
(Cost $1,975) 1,960
=======================================================================
REPURCHASE AGREEMENT (C) [3.0%]
Morgan Stanley,
1.500%, dated 09/30/04,
repurchased on 10/01/04,
repurchase price $1,572,249
(collateralized by U.S.Treasury
Bills, par value $4,707,471,
1.280% (B), 07/15/12; with
total market value $1,603,628) 1,572 1,572
---------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost $1,572) 1,572
=======================================================================
TOTAL INVESTMENTS [99.2%]
(Cost $42,730) 52,534
=======================================================================
DESCRIPTION VALUE (000)
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES [0.8%]
Investment Advisory Fees Payable $ (37)
Shareholder Servicing & Distribution
Fees Payable (34)
Administration Fees Payable (3)
Other Assets and Liabilities, Net 519
---------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES 445
=======================================================================
NET ASSETS [100.0%] $ 52,979
===========================================================================
NET ASSETS:
Paid-in-Capital (unlimited
authorization -- $0.01 par value) $ 41,143
Accumulated net realized gain
on investments 2,032
Net unrealized appreciation
on investments 9,804
---------------------------------------------------------------------------
NET ASSETS [100.0%] $ 52,979
===========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($8,954,964 / 327,962 shares) $ 27.30
===========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($7,550,904 / 278,336 shares) $ 27.13
===========================================================================
Net Asset Value and Redemption
Price Per Share -- Class R
($36,473,223 / 1,346,379 shares) $ 27.09
===========================================================================
Maximum Offering
Price Per Share -- Class R Shares
($27.09 / 96.50%) $ 28.07
===========================================================================
* NON-INCOME PRODUCING SECURITY
(A) SECURITY SOLD WITHIN THE TERMS OF A PRIVATE EXEMPT FROM PLACEMENT
MEMORANDUM, 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." ON SEPTEMBER 30, 2004, THE VALUE OF THESE
SECURITIES AMOUNTED TO APPROXIMATELY $1,000,000, REPRESENTING 1.9% OF THE
NET ASSETS OF THE FUND.
(B) THE RATE REPORTED IS THE EFFECTIVE YIELD AT TIME OF PURCHASE.
(C) TRI-PARTY REPURCHASE AGREEMENT
CL -- CLASS
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 23
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
TECHNOLOGY GROWTH FUND
SECTOR WEIGHTINGS*:
[THE FOLLOWING WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
22.1% Semiconductor & Other Electronic Component Manufacturing
21.7% Software Publishers
19.7% Computer & Peripheral Equipment Manufacturing
12.0% Communications Equipment Manufacturing
10.7% Computer Systems Design & Related Services
2.5% Short-Term Investments
2.3% Navigational/Measuring/Medical/Control Instruments Manufacturing
2.2% Telecommunications
2.2% Data Processing Services
2.0% Information Services
0.9% Professional & Commercial Equipment & Supply Wholesale
0.8% Other Electrical Equipment & Components
0.5% Electronic Shopping & Mail-Order Houses
0.4% Other Nonmetallic Mineral Product Manufacturing
* Percentages based on total investments.
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCK [97.6%]
COMMUNICATIONS EQUIPMENT
MANUFACTURING [12.0%]
Cisco Systems* 5,305 $ 96
Harris 500 28
Lucent Technologies* 4,500 14
Motorola 2,400 43
Nokia ADR 950 13
Qualcomm 1,600 62
Viasat* 525 11
---------------------------------------------------------------------------
TOTAL COMMUNICATIONS EQUIPMENT
MANUFACTURING 267
===========================================================================
COMPUTER & PERIPHERAL EQUIPMENT
MANUFACTURING [19.9%]
Dell* 3,275 117
EMC-Mass* 4,505 52
Hewlett-Packard 4,423 83
IBM 1,400 120
Komag* 1,000 14
Sandisk* 500 14
Storage Technology* 400 10
Symbol Technologies 1,000 13
Veritas Software* 375 7
Western Digital* 1,200 10
---------------------------------------------------------------------------
TOTAL COMPUTER & PERIPHERAL EQUIPMENT
MANUFACTURING 440
===========================================================================
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMPUTER SYSTEMS DESIGN &
RELATED SERVICES [10.7%]
3Com* 2,400 $ 10
Anteon International* 400 15
Autodesk 500 24
Avid Technology* 200 9
CACI International, Cl A* 300 16
Cerner* 200 9
Check Point Software
Technologies* 450 8
Cognizant Technology
Solutions, Cl A* 800 24
Digital River* 500 15
Inter-Tel 250 5
Intergraph* 325 9
Manhattan Associates* 500 12
National Instruments 450 14
Open Solutions* 475 12
Peoplesoft* 900 18
Sun Microsystems* 2,575 10
SYKES Enterprises* 1,500 7
Synopsys* 600 10
Tyler Technologies* 1,175 10
---------------------------------------------------------------------------
TOTAL COMPUTER SYSTEMS DESIGN &
RELATED SERVICES 237
===========================================================================
DATA PROCESSING SERVICES [2.1%]
Acxiom 500 12
Affiliated Computer Services,
Cl A* 425 24
First Data 275 12
---------------------------------------------------------------------------
TOTAL DATA PROCESSING SERVICES 48
===========================================================================
ELECTRONIC SHOPPING &
MAIL-ORDER HOUSES [0.5%]
Agile Software* 1,500 12
===========================================================================
INFORMATION SERVICES [2.0%]
Avocent* 400 10
Juniper Networks* 842 20
WebEx Communications* 625 14
---------------------------------------------------------------------------
TOTAL INFORMATION SERVICES 44
===========================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 24
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
TECHNOLOGY GROWTH FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
NAVIGATIONAL/MEASURING/MEDICAL/CONTROL
INSTRUMENTS MANUFACTURING [2.3%]
Applera - Applied Biosystems
Group 700 $ 13
General Dynamics 175 18
L-3 Communications Holdings 300 20
---------------------------------------------------------------------------
TOTAL NAVIGATIONAL/MEASURING/MEDICAL/CONTROL
INSTRUMENTS MANUFACTURING 51
===========================================================================
OTHER ELECTRICAL EQUIPMENT & COMPONENT
MANUFACTURING [0.8%]
Corning* 1,600 18
===========================================================================
OTHER NONMETALLIC MINERAL PRODUCT
MANUFACTURING [0.4%]
Cabot Microelectronics* 225 8
===========================================================================
PROFESSIONAL & COMMERCIAL EQUIPMENT &
SUPPLY WHOLESALE [0.9%]
Scansource* 300 19
===========================================================================
SEMICONDUCTOR & OTHER ELECTRONIC
COMPONENT MANUFACTURING [22.1%]
Advanced Micro Devices* 800 10
Aeroflex* 1,000 10
Amphenol, Cl A* 450 15
Analog Devices 300 12
Applied Materials* 500 8
Benchmark Electronics* 300 9
Broadcom, Cl A* 275 7
Cree* 525 16
Cypress Semiconductor* 1,050 9
DSP Group* 475 10
Flextronics International* 950 13
Intel 4,950 99
Jabil Circuit* 850 19
Linear Technology 375 14
Maxim Integrated Products 900 38
MEMC Electronic Materials* 1,400 12
Micron Technology* 1,400 17
National Semiconductor* 1,200 19
Nvidia* 750 11
Sanmina-SCI* 1,150 8
Silicon Laboratories* 200 7
Solectron* 1,200 6
Taiwan Semiconductor
Manufacturing ADR 1,711 12
Texas Instruments 2,900 62
TTM Technologies* 750 7
Vishay Intertechnology* 850 11
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
Xilinx 700 $ 19
Zoran* 625 10
---------------------------------------------------------------------------
TOTAL SEMICONDUCTOR & OTHER ELECTRONIC
COMPONENT MANUFACTURING 490
===========================================================================
SOFTWARE PUBLISHERS [21.7%]
Adobe Systems 650 32
Akamai Technologies* 900 13
Citrix Systems* 1,125 20
Computer Associates
International 500 13
Concur Technologies* 1,050 11
Electronic Arts* 400 18
Hyperion Solutions* 375 13
Intuit* 575 26
Microsoft 8,050 222
NetIQ* 1,300 14
Oracle* 5,815 66
Packeteer* 1,050 11
Progress Software* 600 12
Take-Two Interactive Software* 325 11
---------------------------------------------------------------------------
TOTAL SOFTWARE PUBLISHERS 482
===========================================================================
TELECOMMUNICATIONS [2.2%]
Adtran 375 8
J2 Global Communications* 450 14
Novatel Wireless* 550 13
Tekelec* 750 13
---------------------------------------------------------------------------
TOTAL TELECOMMUNICATIONS 48
===========================================================================
TOTAL COMMON STOCK
(Cost $2,373) 2,164
=======================================================================
CASH EQUIVALENTS [2.5%]
Fidelity Institutional Domestic
Money Market Portfolio,
Cl I 49,774 50
SEI Daily Income Trust,
Prime Obligation Fund, Cl A 5,222 5
---------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(Cost $55) 55
=========================================================================
TOTAL INVESTMENTS [100.1%]
(Cost $2,428) 2,219
=========================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 25
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
TECHNOLOGY GROWTH FUND (CONCLUDED)
DESCRIPTION VALUE (000)
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES [-0.1%]
Investment Advisory Fees Payable $ (2)
Shareholder Servicing & Distribution
Fees Payable (1)
---------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (3)
=======================================================================
NET ASSETS [100.0%] $ 2,216
===========================================================================
NET ASSETS:
Paid-in-Capital (unlimited authorization --
$0.01 par value) $ 4,073
Accumulated net realized loss
on investments (1,648)
Net unrealized depreciation
on investments (209)
---------------------------------------------------------------------------
NET ASSETS [100.0%] $ 2,216
===========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($976,372 / 282,401 shares) $ 3.46
===========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($1,240,036 / 362,723 shares) $ 3.42
===========================================================================
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITARY RECEIPT
CL -- CLASS
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 26
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
CORPORATE BOND FUND
SECTOR WEIGHTINGS*:
[THE FOLLOWING WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
35.1% Financials
27.0% Industrial
8.7% Banking
7.6% Asset-Backed
6.6% Telephone
3.9% Utilities
3.9% Mortgage Related
3.0% U.S. Treasury Obligations
2.5% Short-Term Investment
1.0% Government Bond
0.7% Transportation
* Percentages based on total investments.
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
CORPORATE BONDS [81.9%]
AIR TRANSPORTATION [0.7%]
Federal Express, Ser A2
7.890%, 09/23/08 $ 310 $ 337
===========================================================================
AUTOMOTIVE [2.9%]
DaimlerChrysler N.A. Holdings
4.750%, 01/15/08 435 448
Ford Motor Credit
7.250%, 10/25/11 400 433
General Motors Acceptance
7.750%, 01/19/10 500 549
---------------------------------------------------------------------------
TOTAL AUTOMOTIVE 1,430
===========================================================================
BANKS [8.6%]
Bank of America
7.500%, 09/15/06 500 541
7.125%, 09/15/06 500 539
Bankers Trust
7.250%, 10/15/11 500 577
Deutsche Bank
7.500%, 04/25/09 500 574
Fleet National Bank
8.625%, 02/15/05 100 103
US Bancorp
6.875%, 09/15/07 350 384
Wachovia
7.125%, 10/15/06 100 108
6.875%, 09/15/05 500 519
Washington Mutual
4.625%, 04/01/14 460 440
Wells Fargo
7.250%, 08/24/05 250 260
Wells Fargo, Ser F, MTN
6.500%, 06/01/05 125 129
---------------------------------------------------------------------------
TOTAL BANKS 4,174
===========================================================================
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
BEAUTY PRODUCTS [1.9%]
Avon Products
7.150%, 11/15/09 $ 800 $ 918
===========================================================================
BROADCASTING, NEWSPAPERS &
ADVERTISING [0.9%]
Clear Channel Communications
4.900%, 05/15/15 450 424
===========================================================================
CABLE/MEDIA [6.1%]
AOL Time Warner
6.750%, 04/15/11 395 438
Comcast Cable Communications
Holdings
8.375%, 03/15/13 400 484
News America Holdings
9.250%, 02/01/13 450 578
Viacom
7.750%, 06/01/05 1,000 1,036
Walt Disney
5.500%, 12/29/06 410 429
---------------------------------------------------------------------------
TOTAL CABLE/MEDIA 2,965
===========================================================================
CHEMICALS [0.5%]
Praxair
6.625%, 10/15/07 200 219
===========================================================================
COMPUTER SYSTEM DESIGN &
SERVICES [1.9%]
IBM
4.375%, 06/01/09 900 919
===========================================================================
ELECTRICAL PRODUCTS [0.2%]
Emerson Electric
6.300%, 11/01/05 100 104
===========================================================================
ELECTRICAL SERVICES [3.9%]
American Electric Power
5.250%, 06/01/15 435 437
Iowa Electric Light & Power
6.000%, 10/01/08 200 215
Wisconsin Power & Light, Ser Y
7.600%, 07/01/05 100 103
WPS Resources
7.000%, 11/01/09 1,000 1,134
---------------------------------------------------------------------------
TOTAL ELECTRICAL SERVICES 1,889
===========================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 27
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
CORPORATE BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
FINANCIAL SERVICES [9.7%]
Countrywide Home Loans
5.625%, 07/15/09 $ 155 $ 165
2.875%, 02/15/07 900 890
Countrywide Home Loans,
Ser L, MTN
4.000%, 03/22/11 875 850
General Electric Capital,
Ser A, MTN
6.875%, 11/15/10 250 284
Heller Financial
6.375%, 03/15/06 1,000 1,050
International Lease Finance
5.750%, 02/15/07 1,000 1,059
MBNA
4.625%, 09/15/08 410 419
---------------------------------------------------------------------------
TOTAL FINANCIAL SERVICES 4,717
===========================================================================
FOOD & BEVERAGE [2.9%]
General Mills
2.625%, 10/24/06 410 404
PepsiCo
3.200%, 05/15/07 1,000 1,004
---------------------------------------------------------------------------
TOTAL FOOD & BEVERAGE 1,408
===========================================================================
FOREIGN GOVERNMENTS [0.9%]
United Mexican States
5.875%, 01/15/14 450 457
===========================================================================
INSURANCE [7.1%]
AFLAC
6.500%, 04/15/09 1,000 1,101
Allstate
7.200%, 12/01/09 1,015 1,166
AXA Financial
7.750%, 08/01/10 1,000 1,173
---------------------------------------------------------------------------
TOTAL INSURANCE 3,440
===========================================================================
INVESTMENT BANKER/BROKER DEALER [10.6%]
Goldman Sachs Group
5.150%, 01/15/14 1,000 1,006
Jefferies Group
5.500%, 03/15/16 665 664
JPMorgan Chase
7.125%, 06/15/09 675 761
Legg Mason
6.500%, 02/15/06 950 993
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Lehman Brothers Holdings
8.250%, 06/15/07 $ 1,100 $ 1,240
Merrill Lynch
4.000%, 11/15/07 500 508
---------------------------------------------------------------------------
TOTAL INVESTMENT BANKER/BROKER DEALER 5,172
===========================================================================
MACHINERY [2.0%]
Caterpillar Finance
9.000%, 04/15/06 620 677
Caterpillar Finance, Ser F, MTN
4.690%, 04/25/05 310 314
---------------------------------------------------------------------------
TOTAL MACHINERY 991
===========================================================================
PETROLEUM & FUEL PRODUCTS [4.4%]
ChevronTexaco
8.625%, 06/30/10 200 246
ConocoPhillips
6.375%, 03/30/09 305 338
Duke Capital
5.500%, 03/01/14 625 634
Union Oil of California,
Ser C, MTN
7.900%, 04/18/08 800 898
---------------------------------------------------------------------------
TOTAL PETROLEUM & FUEL PRODUCTS 2,116
===========================================================================
REAL ESTATE INVESTMENT TRUST [4.5%]
Equity Residential Properties
7.250%, 06/15/05 1,000 1,031
Kimco Realty, MTN
6.960%, 07/16/07 1,000 1,101
Kimco Realty, Ser B, MTN
7.860%, 11/01/07 67 76
---------------------------------------------------------------------------
TOTAL REAL ESTATE INVESTMENT TRUST 2,208
===========================================================================
RETAIL [4.8%]
Kohl's
6.300%, 03/01/11 1,000 1,104
Kroger
5.500%, 02/01/13 450 466
McDonald's, Ser E, MTN
4.240%, 12/13/06 750 759
---------------------------------------------------------------------------
TOTAL RETAIL 2,329
===========================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 28
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
CORPORATE BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
TELEPHONES & TELECOMMUNICATIONS [6.5%]
AT&T Wireless Services
8.125%, 05/01/12 $ 400 $ 483
Deutsche Telekom International
Finance
5.250%, 07/22/13 435 445
GTE Florida, Ser D
6.250%, 11/15/05 200 208
New York Telephone
6.500%, 03/01/05 50 51
Pacific Bell
6.250%, 03/01/05 200 203
Southwestern Bell
6.625%, 07/15/07 750 812
Sprint Capital
8.375%, 03/15/12 350 424
Verizon Communications
6.360%, 04/15/06 500 525
--------------------------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATIONS 3,151
==========================================================================
WASTE DISPOSAL [0.9%]
Waste Management
6.875%, 05/15/09 375 419
==========================================================================
TOTAL CORPORATE BONDS
(Cost $38,659) 39,787
=====================================================================
ASSET-BACKED SECURITIES [7.5%]
Capital Auto Receivables Asset Trust,
Ser 2003-2, Cl A4A
1.960%, 01/15/09 975 954
Capital Auto Receivables Asset Trust,
Ser 2004-1, Cl A4
2.640%, 11/17/08 750 740
Countrywide Asset-Backed
Certificates, Ser 2004-10,
Cl 2AV2 (A)
2.190%, 05/25/30 1,050 1,050
Countrywide Asset-Backed
Certificates, Ser 2004-BC3,
Cl 2A (A)
2.220%, 08/25/34 924 925
--------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(Cost $3,699) 3,669
=====================================================================
DESCRIPTION FACE AMOUNT (000)/SHARES VALUE (000)
- --------------------------------------------------------------------------------
MORTGAGE RELATED [3.8%]
Residential Asset Mortgage
Products, Ser 2003-RS5, Cl AI4
3.700%, 09/25/31 $ 770 $ 775
Residential Asset Mortgage
Products, Ser 2003-RS6, Cl AI3
3.080%, 12/25/28 1,025 1,019
Washington Mutual,
Ser 2003-AR10, Cl A3A
3.530%, 10/25/33 55 55
--------------------------------------------------------------------------
TOTAL MORTGAGE RELATED
(Cost $1,840) 1,849
=====================================================================
U.S. TREASURY OBLIGATIONS [3.0%]
U.S. Treasury Notes
4.250%, 11/15/13 445 451
4.250%, 08/15/14 1,000 1,010
--------------------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $1,471) 1,461
=====================================================================
CASH EQUIVALENT [2.5%]
Fidelity Institutional Domestic
Money Market Portfolio,
Cl I 1,217,611 1,218
--------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(Cost $1,218) 1,218
=====================================================================
TOTAL INVESTMENTS [98.7%]
(Cost $46,887) 47,984
=====================================================================
OTHER ASSETS AND LIABILITIES [1.3%]
Investment Advisory Fees Payable (16)
Shareholder Servicing & Distribution
Fees Payable (10)
Administration Fees Payable (3)
Other Assets and Liabilities, Net 647
--------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES 618
=====================================================================
NET ASSETS [100.0%] $ 48,602
==========================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 29
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
CORPORATE BOND FUND (CONCLUDED)
DESCRIPTION VALUE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Paid-in-Capital (unlimited authorization --
$0.01 par value) $ 47,203
Accumulated net realized gain
on investments 302
Net unrealized appreciation
on investments 1,097
--------------------------------------------------------------------------
NET ASSETS [100.0%] $ 48,602
==========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($47,080,266 / 4,439,810 shares) $ 10.60
==========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($1,521,454 / 143,396 shares) $ 10.61
==========================================================================
(A) -- FLOATING RATE SECURITY - THE RATE REPORTED IS THE RATE IN EFFECT AT
SEPTEMBER 30, 2004.
CL -- CLASS
MTN -- MEDIUM TERM NOTE
SER -- SERIES
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 30
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
GOVERNMENT BOND FUND
SECTOR WEIGHTINGS*:
[THE FOLLOWING WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
64.1% U.S. Government Agency Obligations
21.0% U.S. Government Mortgage-Backed Obligations
13.6% U.S. Treasury Obligations
1.3% Short-Term Investments
* Percentages based on total investments.
- --------------------------------------------------------------------------------
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS [63.4%]
FFCB
5.120%, 04/26/05 $ 400 $ 407
FHLB
7.250%, 05/13/05 1,400 1,444
6.500%, 11/15/05 100 104
4.875%, 08/15/05 500 511
2.250%, 12/15/05 3,950 3,940
2.000%, 12/02/05 1,000 995
FHLMC
6.990%, 07/26/06 150 161
5.250%, 01/15/06 425 440
4.250%, 06/15/05 1,550 1,572
4.250%, 05/04/09 1,500 1,507
FNMA
6.000%, 12/15/05 91 95
4.000%, 12/15/08 2,000 2,000
2.500%, 06/28/06 (A) 350 349
--------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $13,506) 13,525
=====================================================================
U.S. GOVERNMENT MORTGAGE-BACKED
OBLIGATIONS [20.7%]
FHLMC, Ser 2480, Cl PD
6.000%, 11/15/31 1,497 1,542
FHLMC, Ser 2544, Cl PG
4.500%, 08/15/16 24 24
FHLMC, Ser 2670, Cl QP
4.000%, 02/15/27 1,000 986
FHLMC, Ser 2698, Cl BE
4.500%, 11/15/32 1,237 1,227
FNMA, Ser 1993-225, Cl UB
6.500%, 12/25/23 40 42
FNMA, Ser 2003-134, Cl ME
4.500%, 06/25/33 203 203
FNMA, Ser 2003-34, Cl GJ
4.000%, 02/25/33 406 401
--------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED
OBLIGATIONS
(Cost $4,421) 4,425
=====================================================================
U.S. TREASURY OBLIGATIONS [13.5%]
U.S. Treasury Notes
5.750%, 11/15/05 560 582
4.250%, 11/15/13 1,500 1,519
DESCRIPTION FACE AMOUNT (000)/SHARES VALUE (000)
- --------------------------------------------------------------------------------
U.S. Treasury Inflation Index Notes
3.875%, 01/15/09 $ 681 $ 767
--------------------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $2,829) 2,868
=====================================================================
CASH EQUIVALENT [1.3%]
Fidelity Institutional Domestic
Money Market Portfolio,
Cl I 284,182 284
--------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(Cost $284) 284
=====================================================================
TOTAL INVESTMENTS [98.9%]
(Cost $21,040) 21,102
=====================================================================
OTHER ASSETS AND LIABILITIES [1.1%]
Investment Advisory Fees Payable (6)
Shareholder Servicing & Distribution
Fees Payable (4)
Administration Fees Payable (1)
Other Assets and Liabilities, Net 246
--------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES 235
=====================================================================
NET ASSETS [100.0%] $ 21,337
==========================================================================
NET ASSETS:
Paid-in-Capital (unlimited authorization --
$0.01 par value) $ 21,155
Accumulated net realized gain
on investments 120
Net unrealized appreciation
on investments 62
--------------------------------------------------------------------------
NET ASSETS [100.0%] $ 21,337
==========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($20,900,611 / 1,968,574 shares) $ 10.62
==========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($436,322 / 40,997 shares) $ 10.64
==========================================================================
(A) -- FLOATING RATE SECURITY - THE RATE REPORTED IS THE EFFECTIVE RATE AT
SEPTEMBER 30, 2004.
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 31
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT BOND FUND
SECTOR WEIGHTINGS*:
[THE FOLLOWING WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
14.9% General Revenue
14.6% Power
10.3% Development
10.2% Water
9.1% Higher Education
8.3% General Obligation
8.1% School District
6.9% Utilities
6.4% Facilities
4.2% Transportation
3.9% Education
2.3% Short-Term Investments
0.8% Medical
* Percentages based on total investments.
- --------------------------------------------------------------------------------
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
MUNICIPAL BONDS [98.6%]
ALABAMA [1.4%]
Jefferson County, Sewer Authority,
Ser B-8, RB, FSA
5.250%, 02/01/14 $ 250 $ 276
==========================================================================
CALIFORNIA [81.6%]
Anaheim, Public Finance Authority,
Convention Center Project,
Ser A, RB, AMBAC
5.500%, 08/01/12 150 172
Anaheim, Public Finance Authority,
Electric System Distribution
Facilities, RB, AMBAC
Mandatory Put 10/01/05 @ 100
4.625%, 10/01/27 230 236
Berkeley, Ser C, GO, MBIA
Callable 09/01/05 @ 102
5.000%, 09/01/10 95 100
Beverly Hills, Unified School
District Authority, Ser B, GO
Callable 06/01/08 @ 101
4.700%, 06/01/13 50 53
California State, Coast Community
College District, Election 2002
Project, Ser A, RB, MBIA
Callable 08/01/13 @ 100
5.000%, 08/01/16 250 273
California State, Department of
Water Reserves Center, Water
Systems Project, RB, ETM
6.000%, 12/01/09 100 116
California State, Department of
Water Resource & Power,
Ser B-2, RB (B) (C)
1.800%, 05/01/22 400 400
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
California State, Department of
Water Resource Center,
Ser A, RB, MBIA
5.000%, 05/01/07 $ 200 $ 215
California State, Department of
Water Resource Center, Water
Systems Project, Ser T, RB
Callable 12/01/08 @ 101
5.125%, 12/01/12 200 220
California State, Economic
Recovery Authority, Ser B, GO
3.500%, 07/01/23 600 623
California State, Educational
Facilities Authority, Pooled
College & University Projects,
Ser A, RB
4.300%, 04/01/09 100 105
California State, Educational
Facilities Authority, University
of San Francisco, RB, MBIA
6.000%, 10/01/08 300 342
California State, GO
5.750%, 10/01/08 100 112
4.750%, 06/01/07 100 106
California State, GO
Pre-Refunded @ 101 (A)
5.750%, 03/01/05 100 103
California State, Health Facilities
Finance Authority, Presbyterian
Hospital, RB, MBIA
5.500%, 05/01/07 150 163
California State, Imperial Irrigation
District, Electric System Project,
COP, FSA
5.250%, 11/01/17 345 381
California State, Imperial Irrigation
District, Public Electric
Project, RB
4.250%, 11/01/06 250 262
California State, Infrastructure &
Economic Development, Clean
Water Fund, RB
5.000%, 10/01/07 260 282
California State, Public Works
Board Lease, California State
University, Ser C, RB
5.000%, 10/01/07 100 107
California State, Public Works
Board Lease, Franchise Tax
Board Project, Ser A, RB
4.500%, 09/01/08 150 159
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 32
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
California State, Public Works
Board Lease, Trustees California
State University, Ser A, RB
Callable 10/01/08 @ 101
5.250%, 10/01/11 $ 100 $ 109
California State, Public Works
Board, Department of
Corrections, RB
5.250%, 01/01/13 150 167
California State, State Center
Community College, Election
2002 Project, Ser A, GO, MBIA
Callable 08/01/14 @ 100
5.250%, 08/01/20 205 226
California State, University of
California, Limited Project,
Ser A, RB, MBIA
5.000%, 05/15/14 250 276
California State, University of
California, Ser K, RB, MBIA
Callable 09/01/08 @ 101
5.000%, 09/01/17 150 161
Coachella Valley, Water District
Authority, Flood Control
Project, COP, AMBAC
Callable 10/01/07 @ 102
5.000%, 10/01/11 250 272
Culver City, Redevelopment
Finance Authority, TA, AMBAC
5.500%, 11/01/14 75 86
El Dorado County, Public
Financing Authority, RB, FGIC
5.100%, 02/15/06 100 104
Emeryville, Public Funding
Authority, Emeryville
Redevelopment Project,
Ser A, RB, AMBAC
5.000%, 09/01/13 225 251
Evergreen School District,
Ser C, GO, FGIC
Callable 09/01/08 @ 101
5.250%, 09/01/13 200 220
Hemet, Unified School District,
Nutrition Center
Project, COP, FSA
Callable 04/01/07 @ 102
5.750%, 04/01/17 250 274
Irvine Ranch, Water District, GO
(B) (C)
1.730%, 01/01/21 200 200
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Irvine, Improvement Board Act 1915,
Limited Obligation Assessment
District #93-14, SPA (B) (C)
1.730%, 09/02/25 $ 600 $ 600
Kings River, Conservation District,
Ser F, RB
4.400%, 01/01/09 100 107
Los Angeles County, Public Works
Finance Authority, Ser B, RB,
MBIA
Callable 09/01/06 @ 102
5.250%, 09/01/14 200 216
Los Angeles County, Sanitation
Districts Authority, Capital
Project, Ser A, RB, FSA
Callable 10/01/13 @ 100
5.000%, 10/01/18 300 324
Los Angeles, Community
Redevelopment Agency, Bunker
Hill Project, Ser A, RB, FSA
Callable 12/01/14 @ 100
5.250%, 12/01/16 195 218
Los Angeles, Harbor Development
Project, Ser C, RB
Callable 11/01/06 @ 101
5.125%, 11/01/11 180 193
Los Angeles, Sanitation Equipment
Authority, Ser A, RB, MBIA
4.000%, 02/01/07 100 105
Los Angeles, Ser A, GO
5.000%, 04/01/10 200 221
Los Angeles, Ser A, GO, MBIA
3.000%, 09/01/05 250 253
M-S-R Public Power,
Ser G, RB, MBIA
Callable 07/01/07 @ 101
5.250%, 07/01/11 100 108
Modesto, Irrigation District
Financing Authority, Domestic
Water Project, Ser D, RB, AMBAC
Callable 09/01/08 @ 101
5.000%, 09/01/12 100 110
Oakland, Redevelopment Agency,
Central District Redevelopment,
TA, AMBAC
6.000%, 02/01/07 300 328
Oakland, State Building Authority,
Elihu M Harris Project,
Ser A, RB, AMBAC
Callable 04/01/08 @ 101
5.500%, 04/01/14 100 111
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 33
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Oceanside, Unified School District
Authority, Election of 2000
Project, Ser B, GO, MBIA
6.000%, 08/01/07 $ 300 $ 333
Orange County, Recovery
Certificate Authority,
Ser A, COP, MBIA
6.000%, 07/01/06 250 268
Pasadena, Electric Improvements
Authority, RB, FSA
4.500%, 06/01/07 160 170
Pinole, Redevelopment Agency
Project, TA, FSA
Callable 08/01/09 @ 101
5.250%, 08/01/14 100 111
Poway, Redevelopment Agency
Project, TA, AMBAC
Callable 12/15/11 @ 101
5.500%, 12/15/14 150 171
Redondo Beach, Public Financing
Authority, Waste Water System
Funding Project, Ser A, RB, MBIA
Callable 05/14/14 @ 100
4.750%, 05/01/18 235 249
Riverside, Electric Authority, RB,
FSA
Callable 10/01/11 @ 101
5.000%, 10/01/12 250 278
Riverside, Water Authority, RB
Callable 10/01/08 @ 101
5.375%, 10/01/12 100 111
Sacramento County, Sanitation
District Funding Authority, RB,
ETM
Callable 12/01/05 @ 100
5.000%, 12/01/07 100 106
Sacramento, City Financing
Authority, RB
5.000%, 07/01/10 100 109
Sacramento, City Unified School
District, Ser A, GO, FSA
4.250%, 07/01/09 75 80
Saddleback, Community College
District, 1996 Capital Improvement
Financing Project, COP, MBIA
Callable 06/01/06 @ 102
5.500%, 06/01/15 500 537
San Diego County, North County
Regional Center for Expansion,
COP, AMBAC
Callable 11/15/06 @ 102
5.250%, 11/15/14 100 108
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
San Francisco (City & County),
Building Authority, Department
of General Services & Leasing,
Ser A, RB
5.000%, 10/01/13 $ 400 $ 439
San Francisco (City & County),
Public Utility Authority,
Ser A, RB, MBIA
Callable 11/01/06 @ 101.5
5.000%, 11/01/17 375 398
San Jose, Redevelopment Authority,
Merged Area Redevelopment
Project, TA, MBIA
6.000%, 08/01/07 250 277
San Juan, Unified School
District, COP, MBIA
Callable 06/01/07 @ 102
5.000%, 06/01/08 250 272
San Mateo County, Transit District
Authority, Ser A, RB, MBIA
Callable 06/01/08 @ 101
5.000%, 06/01/14 400 437
Sanger, Public Financing Authority,
Utilities Systems Financing Project,
Ser A, RB, AMBAC
Pre-Refunded @ 102 (A)
5.700%, 01/01/06 325 348
Santa Monica, Public Safety
Facilities Project, RB
Callable 07/01/09 @ 101
5.250%, 07/01/14 100 111
South Gate, Public Financing
Authority, South Gate
Redevelopment Project,
TA, AMBAC
Callable 09/01/13 @ 100
5.250%, 09/01/18 430 473
Southern California, Metropolitan
Water District Authority,
Ser B-3, RB (C)
1.730%, 07/01/35 100 100
Southern California, Public Power
Authority, Southern Transmission
Project, Sub-Ser A, RB, FSA
Callable 07/01/12 @ 100
5.250%, 07/01/16 200 223
Sweetwater, Water Authority, RB,
AMBAC
5.250%, 04/01/10 500 559
Vallejo City, University School
District, Election 1997 Project,
GO, FGIC, ETM
7.500%, 08/01/10 275 343
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 34
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Wiseburn, School District,
Ser A, GO, FGIC
4.200%, 08/01/07 $ 125 $ 133
--------------------------------------------------------------------------
TOTAL CALIFORNIA 16,514
==========================================================================
COLORADO [1.1%]
Fremont Custer & El Paso Counties,
School District No. 02, GO,
FSA
Callable 12/01/13 @ 100
5.250%, 12/01/18 200 221
==========================================================================
FLORIDA [1.2%]
Miami-Dade County, School
Board, COP, FGIC
Callable 10/01/14 @ 100
5.250%, 10/01/18 215 238
==========================================================================
GEORGIA [1.1%]
Georgia State, Metropolitan Atlanta
Rapid Transportation Authority,
Second Indenture Project,
Ser A, RB, MBIA
6.250%, 07/01/07 200 222
==========================================================================
MICHIGAN [1.3%]
Michigan State, Building Authority,
Facilities Project, Ser II, RB
Pre-Refunded @ 101 (A)
5.000%, 10/15/07 250 273
==========================================================================
NEW YORK [2.1%]
New York City, Transitional Finance
Authority, Future Tax Secured
Project, Ser B, RB, MBIA
Callable 05/15/08 @ 101
4.600%, 11/15/12 400 420
==========================================================================
TEXAS [1.6%]
Harris County, Flood Control
District, Ser A, GO
5.000%, 10/01/06 300 318
==========================================================================
NEVADA [1.0%]
Clark County, Ser B, GO
Callable 12/01/10 @ 101
6.000%, 12/01/12 175 204
==========================================================================
DESCRIPTION FACE AMOUNT (000)/SHARES VALUE (000)
- --------------------------------------------------------------------------------
WASHINGTON [2.1%]
King County, School District
No. 414, GO, MBIA
Callable 12/01/12 @ 100
5.750%, 12/01/14 $ 225 $ 261
Klickitat County, Public Utility
District No. 001, Ser B, RB
Callable 12/01/11 @ 100
5.250%, 12/01/14 150 167
--------------------------------------------------------------------------
TOTAL WASHINGTON 428
==========================================================================
PUERTO RICO [4.1%]
Puerto Rico, Electric Power
Authority, Power Project,
Ser CC, RB, MBIA
Callable 07/01/07 @ 101.5
5.250%, 07/01/09 100 109
Puerto Rico, Electric Power
Authority, Power Project,
Ser DD, RB, FSA, ETM
5.000%, 07/01/05 200 205
Puerto Rico, Electric Power
Authority, Power Project,
Ser X, RB
Pre-Refunded @ 102 (A)
6.000%, 07/01/05 350 369
Puerto Rico, Municipal Finance
Agency, Ser A, RB, FSA
Callable 07/01/07 @ 101.5
5.250%, 07/01/10 130 142
--------------------------------------------------------------------------
TOTAL PUERTO RICO 825
==========================================================================
TOTAL MUNICIPAL BONDS
(Cost $19,593) 19,939
=====================================================================
CASH EQUIVALENT [2.3%]
SEI Tax Exempt Trust, California
Tax Exempt Fund, Cl A 475,265 475
--------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(Cost $475) 475
=====================================================================
TOTAL INVESTMENTS [100.9%]
(Cost $20,068) 20,414
=====================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 35
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT BOND FUND (CONCLUDED)
DESCRIPTION VALUE (000)
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES [-0.9%]
Investment Advisory Fees Payable $ (3)
Shareholder Servicing & Distribution
Fees Payable (5)
Administration Fees Payable (1)
Other Assets and Liabilities, Net (177)
--------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (186)
=====================================================================
NET ASSETS [100.0%] $ 20,228
==========================================================================
NET ASSETS:
Paid-in-Capital (unlimited authorization --
$0.01 par value) $ 19,848
Accumulated net realized gain
on investments 34
Net unrealized appreciation
on investments 346
--------------------------------------------------------------------------
NET ASSETS [100.0%] $ 20,228
==========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($17,788,741 / 1,708,607 shares) $ 10.41
==========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($2,438,963 / 233,639 shares) $ 10.44
==========================================================================
(A) PRE-REFUNDED SECURITY -- THE MATURITY DATE SHOWN IS THE PRE-REFUNDED DATE.
(B) SECURITIES ARE HELD IN CONJUNCTION WITH A LETTER OF CREDIT FROM A MAJOR
BANK OR FINANCIAL INSTITUTION.
(C) FLOATING RATE SECURITY -- THE REPORTED IS THE RATE IN EFFECT ON SEPTEMBER
30, 2004.
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
COP -- CERTIFICATE OF PARTICIPATION
CL -- CLASS
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
SPA -- SPECIAL ASSESSMENT
TA -- TAX ALLOCATION
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 36
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
HIGH YIELD BOND FUND
SECTOR WEIGHTINGS*:
[THE FOLLOWING WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
77.5% Industrial
5.7% Financial
5.6% Telephone
5.4% Utilities
2.7% Gas Transmission
1.7% Short-Term Investment
1.2% Transportation
0.2% Common Stock
* Percentages based on total investments.
- --------------------------------------------------------------------------------
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
CORPORATE BONDS [97.1%]
AEROSPACE & DEFENSE [0.9%]
DRS Technologies
6.875%, 11/01/13 $ 100 $ 104
Esterline Technologies
7.750%, 06/15/13 100 107
Sequa, Ser B
8.875%, 04/01/08 150 163
--------------------------------------------------------------------------
TOTAL AEROSPACE & DEFENSE 374
==========================================================================
AIRLINES [0.3%]
American Airlines, Ser 2001-2
7.800%, 04/01/08 150 125
==========================================================================
APPAREL/TEXTILES [1.0%]
Invista (A)
9.250%, 05/01/12 100 107
Levi Strauss
11.625%, 01/15/08 100 103
7.000%, 11/01/06 100 100
Warnaco
8.875%, 06/15/13 100 111
--------------------------------------------------------------------------
TOTAL APPAREL/TEXTILES 421
==========================================================================
AUTO RENT & LEASE [0.7%]
Nationsrent
9.500%, 10/15/10 100 108
Rent-way
11.875%, 06/15/10 100 109
United Rentals
7.750%, 11/15/13 100 94
--------------------------------------------------------------------------
TOTAL AUTO RENT & LEASE 311
==========================================================================
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
AUTOPARTS [2.7%]
Collins & Aikman Products
12.875%, 08/15/12 (A) $ 200 $ 184
10.750%, 12/31/11 250 250
Dura Operating, Ser B
9.000%, 05/01/09 150 133
Group 1 Automotive (A)
8.250%, 08/15/13 100 106
Metaldyne (A)
10.000%, 11/01/13 100 93
Stanadyne (A)
10.000%, 08/15/14 100 104
Tenneco Automotive, Ser B
10.250%, 07/15/13 150 171
TRW Automotive
11.000%, 02/15/13 98 117
--------------------------------------------------------------------------
TOTAL AUTOPARTS 1,158
==========================================================================
BROADCASTING, NEWSPAPERS & ADVERTISING [7.9%]
Adelphia Communications, Ser B (C)
10.500%, 07/15/04 100 92
Advanstar Communications
10.750%, 08/15/10 100 111
CCO Holdings
8.750%, 11/15/13 250 245
CSC Holdings
7.625%, 07/15/18 100 102
Cablevision Systems (A)
8.000%, 04/15/12 200 209
Century Communications, Ser B (C)
11.170%, 01/15/08 100 62
Charter Communications Holdings
10.000%, 05/15/11 100 77
8.625%, 04/01/09 100 78
Coleman Cable (A)
9.875%, 10/01/12 100 102
Echostar DBS (A)
6.625%, 10/01/14 100 99
Entravision Communications
8.125%, 03/15/09 100 106
Fisher Communication (A)
8.625%, 09/15/14 150 156
Frontier Vision Holdings (C)
11.875%, 09/15/07 100 125
General Cable (A)
9.500%, 11/15/10 100 111
Gray Television
9.250%, 12/15/11 100 112
Insight Communications (B)
10.051%, 02/15/11 200 187
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 37
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
HIGH YIELD BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Interep National Radio Sales, Ser B
10.000%, 07/01/08 $ 100 $ 78
Kabel Deutschland (A)
10.625%, 07/01/14 200 218
Mediacom Capital
7.875%, 02/15/11 400 382
Nexstar Finance Holdings (B)
11.269%, 04/01/13 200 153
Olympus Communications, Ser B (C)
10.625%, 11/15/06 100 126
Panamsat (A)
9.000%, 08/15/14 150 156
Paxson Communications (B)
9.679%, 01/15/09 100 86
Salem Communication Holdings,
Ser B
9.000%, 07/01/11 65 71
Telenet Group Holding (B)
11.500%, 06/15/14 150 110
Videotron Ltee
6.875%, 01/15/14 100 103
--------------------------------------------------------------------------
TOTAL BROADCASTING, NEWSPAPERS
& ADVERTISING 3,457
==========================================================================
BUILDING & CONSTRUCTION [3.9%]
Ainsworth Lumber
7.250%, 10/01/12 (A) 100 101
6.750%, 03/15/14 100 96
Beazer Homes USA
8.375%, 04/15/12 100 110
Brand Services
12.000%, 10/15/12 150 170
Dayton Superior
13.000%, 06/15/09 100 98
International Utility Structures (C)
10.750%, 02/01/08 100 21
North American Energy Partners (A)
8.750%, 12/01/11 150 146
Ply Gem Industries (A)
9.000%, 02/15/12 200 199
Riverside Forest Product
7.875%, 03/01/14 100 106
THL Buildco (A)
8.500%, 09/01/14 200 210
Tech Olympic USA
7.500%, 03/15/11 200 204
Texas Industries
10.250%, 06/15/11 100 115
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
William Lyon Homes
10.750%, 04/01/13 $ 100 $ 116
--------------------------------------------------------------------------
TOTAL BUILDING & CONSTRUCTION 1,692
==========================================================================
BUSINESS SERVICES [0.6%]
Corrections
7.500%, 05/01/11 100 105
Geo Group
8.250%, 07/15/13 150 155
--------------------------------------------------------------------------
TOTAL BUSINESS SERVICES 260
==========================================================================
CHEMICALS [4.6%]
Acetex
10.875%, 08/01/09 150 165
Crompton (A)
9.875%, 08/01/12 100 105
Equistar Chemicals
10.625%, 05/01/11 150 171
FMC
10.250%, 11/01/09 100 117
Huntsman ICI Chemicals
10.125%, 07/01/09 100 105
IMC Global
10.875%, 08/01/13 100 126
IMC Global, Ser B
11.250%, 06/01/11 100 118
Innophos (A)
8.875%, 08/15/14 100 106
Lyondell Chemical
11.125%, 07/15/12 100 116
10.500%, 06/01/13 100 115
NALCO
7.750%, 11/15/11 100 106
PolyOne
10.625%, 05/15/10 100 110
Rhodia
10.250%, 06/01/10 100 104
Rockwood Specialties Group
10.625%, 05/15/11 100 110
Terra Capital
11.500%, 06/01/10 100 113
United Industries, Ser D
9.875%, 04/01/09 200 209
--------------------------------------------------------------------------
TOTAL CHEMICALS 1,996
==========================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 38
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
HIGH YIELD BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
CIRCUIT BOARDS [0.2%]
Viasystems
10.500%, 01/15/11 $ 100 $ 95
==========================================================================
COAL MINING [0.6%]
Alpha Natural Resources (A)
10.000%, 06/01/12 150 166
Foundation PA Coal (A)
7.250%, 08/01/14 100 106
--------------------------------------------------------------------------
TOTAL COAL MINING 272
==========================================================================
COMMERCIAL SERVICES [1.1%]
Great Lakes Dredge & Dock
7.750%, 12/15/13 150 130
Iron Mountain
8.625%, 04/01/13 100 108
Salton
12.250%, 04/15/08 150 124
The Brickman Group, Ser B
11.750%, 12/15/09 100 116
--------------------------------------------------------------------------
TOTAL COMMERCIAL SERVICES 478
==========================================================================
COMPUTER SYSTEM DESIGN & SERVICES [0.6%]
Unisys
7.875%, 04/01/08 100 103
Xerox
7.625%, 06/15/13 100 108
7.125%, 06/15/10 50 53
--------------------------------------------------------------------------
TOTAL COMPUTER SYSTEM DESIGN & SERVICES 264
==========================================================================
CONSUMER PRODUCTS & SERVICES [3.5%]
Ames True Temper (A)
10.000%, 07/15/12 150 153
Amscan Holdings (A)
8.750%, 05/01/14 150 153
Armkel Finance
9.500%, 08/15/09 100 109
JohnsonDiversey Holdings (B)
10.259%, 05/15/13 200 165
JohnsonDiversey Holdings, Ser B
9.625%, 05/15/12 150 168
Jostens
12.750%, 05/01/10 100 112
NBTY, Ser B
8.625%, 09/15/07 100 101
Playtex Products
9.375%, 06/01/11 200 205
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Prestige Brands (A)
9.250%, 04/15/12 $ 150 $ 147
Sealy Mattress
8.250%, 06/15/14 200 202
--------------------------------------------------------------------------
TOTAL CONSUMER PRODUCTS & SERVICES 1,515
==========================================================================
CONTAINERS & PACKAGING [2.9%]
Berry Plastics
10.750%, 07/15/12 100 113
Graham Packaging (A)
9.875%, 10/15/14 100 102
Intertape Polymer (A)
8.500%, 08/01/14 150 151
Owens-Illinois
8.100%, 05/15/07 100 105
Plastipak Holdings
10.750%, 09/01/11 100 112
Pliant
13.000%, 06/01/10 100 86
Radnor Holdings
11.000%, 03/15/10 100 84
Solo Cup
8.500%, 02/15/14 150 148
Stone Container (A)
7.375%, 07/15/14 200 210
US Can
10.875%, 07/15/10 150 154
--------------------------------------------------------------------------
TOTAL CONTAINERS & PACKAGING 1,265
==========================================================================
DAY CARE [0.2%]
La Petite Acadamy, Ser B
10.000%, 05/15/08 100 84
==========================================================================
DIVERSIFIED OPERATIONS [2.7%]
Jacuzzi Brands
9.625%, 07/01/10 150 166
Kansas City Southern
9.500%, 10/01/08 100 109
National Waterworks, Ser B
10.500%, 12/01/12 100 113
Poindexter J.B. (A)
8.750%, 03/15/14 200 211
Reddy Ice Group
8.875%, 08/01/11 100 108
TD Funding
8.375%, 07/15/11 100 107
Tekni-Plex, Ser B
12.750%, 06/15/10 100 84
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 39
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
HIGH YIELD BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Trinity Industries
6.500%, 03/15/14 $ 200 $ 197
Werner Holdings, Ser A
10.000%, 11/15/07 100 89
--------------------------------------------------------------------------
TOTAL DIVERSIFIED OPERATIONS 1,184
==========================================================================
ELECTRICAL PRODUCTS [6.2%]
AES
9.375%, 09/15/10 19 21
9.000%, 05/15/15 (A) 100 113
7.750%, 03/01/14 100 103
Allegheny Energy Supply
7.800%, 03/15/11 200 217
Aquila
7.625%, 11/15/09 150 154
CMS Energy
7.500%, 01/15/09 100 105
Calpine
9.875%, 12/01/11 (A) 100 79
8.500%, 07/15/10 (A) 200 153
8.500%, 02/15/11 100 64
Calpine Generating (A) (D)
7.350%, 04/01/10 200 190
Edison Mission Energy
7.730%, 06/15/09 200 210
L-3 Communications
6.125%, 07/15/13 100 101
Motors & Gears, Ser D
10.750%, 11/15/06 150 139
NRG Energy (A)
8.000%, 12/15/13 200 214
PSEG Energy Holdings
7.750%, 04/16/07 100 107
Reliant Resources
9.500%, 07/15/13 200 217
Sanmina-SCI
10.375%, 01/15/10 100 114
Sierra Pacific Resources (A)
8.625%, 03/15/14 200 217
TNP Enterprises, Ser B
10.250%, 04/01/10 150 161
--------------------------------------------------------------------------
TOTAL ELECTRICAL PRODUCTS 2,679
==========================================================================
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
ENTERTAINMENT [11.3%]
AMC Entertainment
9.875%, 02/01/12 $ 100 $ 103
9.500%, 02/01/11 72 74
Ameristar Casinos
10.750%, 02/15/09 100 113
Argosy Gaming
7.000%, 01/15/14 200 206
Aztar
9.000%, 08/15/11 100 111
Bluegreen, Ser B
10.500%, 04/01/08 150 154
Bombardier Recreational
Products (A)
8.375%, 12/15/13 150 158
Carmike Cinemas
7.500%, 02/15/14 200 202
Cinemark USA
9.000%, 02/01/13 100 112
Circus & Eldorado Joint Venture/
Silver Legacy Capital
10.125%, 03/01/12 150 160
Diamond Jo (A)
8.750%, 04/15/12 200 185
Equinox Holdings
9.000%, 12/15/09 100 103
Hard Rock Hotel
8.875%, 06/01/13 200 215
Herbst Gaming (A)
8.125%, 06/01/12 200 205
HMH Properties, Ser B
7.875%, 08/01/08 38 39
Inn of the Mountain Gods
12.000%, 11/15/10 100 114
Intrawest
10.500%, 02/01/10 100 108
Isle of Capri Casinos
7.000%, 03/01/14 200 201
John Q Hammons Hotels, Ser B
8.875%, 05/15/12 100 111
Kerzner International
8.875%, 08/15/11 150 164
Majestic Star Casino
9.500%, 10/15/10 200 204
Mandalay Resort Group
6.450%, 02/01/06 60 62
Mandalay Resort Group, Ser B
10.250%, 08/01/07 100 114
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 40
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
HIGH YIELD BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
MGM Mirage
6.750%, 09/01/12 (A) $ 100 $ 104
5.875%, 02/27/14 250 241
Mohegan Tribal Gaming (A)
7.125%, 08/15/14 150 157
MTR Gaming Group, Ser B
9.750%, 04/01/10 200 218
Muzak
9.875%, 03/15/09 100 74
NCL (A)
10.625%, 07/15/14 100 105
Penn National Gaming
8.875%, 03/15/10 100 110
6.875%, 12/01/11 100 103
Scientific Games, Ser B
12.500%, 08/15/10 100 115
Six Flags
9.750%, 04/15/13 150 142
Speedway Motorsports
6.750%, 06/01/13 100 104
Waterford Gaming (A)
8.625%, 09/15/12 135 143
Windsor Woodmount Black Hawk,
Ser B (A) (C)
13.000%, 03/15/05 100 90
--------------------------------------------------------------------------
TOTAL ENTERTAINMENT 4,924
==========================================================================
FINANCIAL SERVICES [3.9%]
Alamosa Delaware
8.500%, 01/31/12 150 152
Allied Security Escrow (A)
11.375%, 07/15/11 150 157
BCP Caylux Holding (A)
9.625%, 06/15/14 75 81
Caithness Coso Fund, Ser B
9.050%, 12/15/09 80 88
Chukchansi Economic
Development Authority (A)
14.500%, 06/15/09 150 187
Couche-Tard Finance
7.500%, 12/15/13 100 107
Crystal US Holdings (A) (B)
10.500%, 10/01/14 200 120
ESI Tractebel Acquisitions, Ser B
7.990%, 12/30/11 68 70
IPCS Escrow (A)
11.500%, 05/01/12 150 158
Poster Financial Group
8.750%, 12/01/11 200 208
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Ship Finance
8.500%, 12/15/13 $ 200 $ 199
Standard Aero (A)
8.250%, 09/01/14 150 155
--------------------------------------------------------------------------
TOTAL FINANCIAL SERVICES 1,682
==========================================================================
FOOD & BEVERAGE [6.0%]
Chiquita Brands (A)
7.500%, 11/01/14 100 100
Del Monte
8.625%, 12/15/12 50 56
Del Monte, Ser B
9.250%, 05/15/11 150 165
Dimon, Ser B
9.625%, 10/15/11 100 105
Dole Foods
8.875%, 03/15/11 100 109
Dominos
8.250%, 07/01/11 75 81
Friendly Ice Cream
8.375%, 06/15/12 200 192
General Nutrition Center
8.500%, 12/01/10 150 153
Great Atlantic & Pacific Tea
9.125%, 12/15/11 100 76
Herbalife International
11.750%, 07/15/10 100 115
Land O' Lakes
8.750%, 11/15/11 200 187
Le-Natures (A)
10.000%, 06/15/13 150 160
Leiner Health Products (A)
11.000%, 06/01/12 100 106
Merisant (A)
9.500%, 07/15/13 100 95
National Beef Packaging
10.500%, 08/01/11 200 205
National Wine & Spirits
10.125%, 01/15/09 100 96
Pilgrim's Pride
9.625%, 09/15/11 100 112
Pinnacle Foods (A)
8.250%, 12/01/13 200 189
Swift
12.500%, 01/01/10 200 221
WH Holdings/WH Capital
9.500%, 04/01/11 100 108
--------------------------------------------------------------------------
TOTAL FOOD & BEVERAGE 2,631
==========================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 41
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
HIGH YIELD BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
FORESTRY [0.2%]
Tembec Industries
7.750%, 03/15/12 $ 100 $ 100
==========================================================================
MACHINERY [3.0%]
AK Steel
7.875%, 02/15/09 150 149
Building Materials, Ser B
8.000%, 10/15/07 100 102
7.750%, 07/15/05 200 203
Case New Holland (A)
9.250%, 08/01/11 100 112
Cummins (A)
9.500%, 12/01/10 100 116
Grant Prideco Escrow
9.000%, 12/15/09 136 152
Intermet
9.750%, 06/15/09 100 39
Mail-Well I
9.625%, 03/15/12 100 110
Resolution Performance Products
13.500%, 11/15/10 100 97
Terex
7.375%, 01/15/14 100 105
Trimas
9.875%, 06/15/12 100 104
--------------------------------------------------------------------------
TOTAL MACHINERY 1,289
==========================================================================
MEDICAL [3.3%]
Alpharma (A)
8.625%, 05/01/11 100 102
Ardent Health Services
10.000%, 08/15/13 100 102
Bio-Rad Laboratories
7.500%, 08/15/13 100 108
Biovail
7.875%, 04/01/10 100 102
Concentra Operating
9.500%, 08/15/10 100 111
Extendicare Health
6.875%, 05/01/14 100 102
Genesis Healthcare
8.000%, 10/15/13 100 109
MQ Associates (B)
12.250%, 08/15/12 200 126
Pacificare Health Systems
10.750%, 06/01/09 65 75
Triad Hospitals
7.000%, 05/15/12 150 157
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Universal Hospital Services
10.125%, 11/01/11 $ 200 $ 203
Vanguard Health Systems (A)
9.000%, 10/01/14 150 150
--------------------------------------------------------------------------
TOTAL MEDICAL 1,447
==========================================================================
MISCELLANEOUS MANUFACTURING [0.4%]
Aearo
8.250%, 04/15/12 150 153
==========================================================================
OFFICE FURNITURE & FIXTURES [0.2%]
Interface
9.500%, 02/01/14 100 104
==========================================================================
PAPER & PAPER PRODUCTS [2.3%]
Abitibi-Consolidated
7.750%, 06/15/11 100 103
Appleton Papers (A)
9.750%, 06/15/14 100 103
Georgia-Pacific
7.700%, 06/15/15 100 114
JSG Funding
9.625%, 10/01/12 100 113
Newark Group (A)
9.750%, 03/15/14 200 206
Norampac
6.750%, 06/01/13 100 105
Norske Skog Canada
7.375%, 03/01/14 250 261
--------------------------------------------------------------------------
TOTAL PAPER & PAPER PRODUCTS 1,005
==========================================================================
PETROLEUM & FUEL PRODUCTS [6.3%]
Belden Blake (A)
8.750%, 07/15/12 150 160
Chesepeake Energy
6.875%, 01/15/16 112 117
Comstock Resources
6.875%, 03/01/12 150 154
Dynegy Holdings
10.125%, 07/15/13 (A) 150 172
6.875%, 04/01/11 100 95
El Paso
7.000%, 05/15/11 200 193
El Paso Natural Gas
7.625%, 08/01/10 150 160
El Paso Production Holding
7.750%, 06/01/13 200 201
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 42
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
HIGH YIELD BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Forest Oil
8.000%, 06/15/08 $ 150 $ 166
8.000%, 12/15/11 (A) 100 112
Giant Industries
8.000%, 05/15/14 200 204
GulfTerra Energy, Ser B
8.500%, 06/01/10 144 168
Pacific Energy (A)
7.125%, 06/15/14 100 108
Parker Drilling
9.625%, 10/01/13 150 167
Plains Exploration & Production,
Ser B
8.750%, 07/01/12 150 168
Pride International (A)
7.375%, 07/15/14 100 111
Swift Energy
9.375%, 05/01/12 100 112
Vintage Petroleum
7.875%, 05/15/11 100 107
Williams
7.625%, 07/15/19 50 55
--------------------------------------------------------------------------
TOTAL PETROLEUM & FUEL PRODUCTS 2,730
==========================================================================
PRINTING & PUBLISHING [2.6%]
American Color Graphics
10.000%, 06/15/10 100 77
Canwest Media
10.625%, 05/15/11 100 114
Dex Media (B)
9.000%, 11/15/13 200 146
Dex Media East
9.875%, 11/15/09 100 115
Dex Media West, Ser B (A)
8.500%, 08/15/10 100 114
Emmis Operating
6.875%, 05/15/12 150 156
Haights Cross Operating
11.750%, 08/15/11 100 110
JII Holdings
13.000%, 04/01/07 70 63
Primedia (A)
8.000%, 05/15/13 100 95
Sheridan Group (A)
10.250%, 08/15/11 150 162
--------------------------------------------------------------------------
TOTAL PRINTING & PUBLISHING 1,152
==========================================================================
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
REAL ESTATE [0.2%]
LNR Property
7.250%, 10/15/13 $ 100 $ 109
==========================================================================
RETAIL [4.8%]
Amerigas Partner
8.875%, 05/20/11 100 110
Asbury Automotive Group
9.000%, 06/15/12 150 158
Autonation
9.000%, 08/01/08 100 115
Cole National Group
8.875%, 05/15/12 100 113
Denny's
11.250%, 01/15/08 150 156
10.000%, 10/01/12 (A) 150 151
Duane Reade (A)
9.750%, 08/01/11 200 189
Jean Coutu Group (A)
8.500%, 08/01/14 200 198
Mortons Restaurant Group
7.500%, 07/01/10 150 143
Pantry (A)
7.750%, 02/15/14 100 102
Pep Boys
7.000%, 06/01/05 150 152
Petro Stopping Center
9.000%, 02/15/12 100 106
Rite Aid
8.125%, 05/01/10 100 105
True Temper Sports
8.375%, 09/15/11 150 140
United Auto Group
9.625%, 03/15/12 150 165
--------------------------------------------------------------------------
TOTAL RETAIL 2,103
==========================================================================
SEMI-CONDUCTORS/INSTRUMENTS [1.5%]
Amkor Technologies
7.750%, 05/15/13 200 164
Fisher Scientific International
8.000%, 09/01/13 150 168
6.750%, 08/15/14 (A) 100 105
Freescale Semiconductor (A)
7.125%, 07/15/14 200 208
--------------------------------------------------------------------------
TOTAL SEMI-CONDUCTORS/INSTRUMENTS 645
==========================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 43
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
HIGH YIELD BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
STEEL & STEEL WORKS [0.5%]
Gerdau Ameristeel
10.375%, 07/15/11 $ 100 $ 114
International Steel Group (A)
6.500%, 04/15/14 100 100
--------------------------------------------------------------------------
TOTAL STEEL & STEEL WORKS 214
==========================================================================
TELEPHONES & TELECOMMUNICATIONS [8.6%]
Airgate PCS (A)
9.375%, 09/01/09 200 203
Alamosa Holdings (B)
16.950%, 02/15/10 150 154
American Tower (A)
7.125%, 10/15/12 100 99
Atlantic Broadband (A)
9.375%, 01/15/14 400 379
Centennial Communications
10.125%, 06/15/13 100 105
8.125%, 02/01/14 (A) 100 95
Cincinnati Bell
8.375%, 01/15/14 185 169
Crown Castle International
7.500%, 12/01/13 100 105
Insight Midwest
9.750%, 10/01/09 150 157
Level 3 Communications
10.500%, 12/01/08 (B) 150 111
9.125%, 05/01/08 200 147
Lucent Technologies
5.500%, 11/15/08 250 250
Nextel Communications
7.375%, 08/01/15 100 107
Nextel Partners
8.125%, 07/01/11 150 159
Qwest
5.625%, 11/15/08 100 98
Qwest Communications
International (A)
7.500%, 02/15/14 200 183
Rogers Wireless
9.625%, 05/01/11 100 112
Rural Cellular
9.750%, 01/15/10 200 174
SBA Telecommunications (B)
9.750%, 12/15/11 150 122
Time Warner Telecommunications
10.125%, 02/01/11 100 96
Triton PCS
8.500%, 06/01/13 150 136
DESCRIPTION FACE AMOUNT (000)/SHARES VALUE (000)
- --------------------------------------------------------------------------------
UbiquiTel Operating
18.109%, 04/15/10 (B) $ 200 $ 211
9.875%, 03/01/11 200 208
Western Wireless
9.250%, 07/15/13 150 153
--------------------------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATIONS 3,733
==========================================================================
WASTE DISPOSAL [0.9%]
Allied Waste
7.375%, 04/15/14 100 96
IESI
10.250%, 06/15/12 100 108
Waste Services (A)
9.500%, 04/15/14 200 190
--------------------------------------------------------------------------
TOTAL WASTE DISPOSAL 394
==========================================================================
WHOLESALE [0.5%]
B&G Foods, Ser D
9.625%, 08/01/07 100 102
Collins & Aikman Floor Cover,
Ser B
9.750%, 02/15/10 100 106
--------------------------------------------------------------------------
TOTAL WHOLESALE 208
==========================================================================
TOTAL CORPORATE BONDS
(Cost $40,713) 42,253
=====================================================================
COMMON STOCK [0.2%]
RETAIL [0.2%]
Crunch Equity Holding* (A) 56 76
==========================================================================
TOTAL COMMON STOCK
(Cost $61) 76
=====================================================================
CASH EQUIVALENT [1.7%]
Fidelity Institutional Domestic
Money Market Portfolio,
Cl I 739,713 740
--------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(Cost $740) 740
=====================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 44
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
HIGH YIELD BOND FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
WARRANTS [0.0%]
Dayton Superior,
Expires 06/15/09 (A) 100 $ --
Diva Systems,
Expires 03/01/08 (A) 600 --
Pliant,
Expires 06/01/10 (A) 100 --
--------------------------------------------------------------------------
TOTAL WARRANTS
(Cost $0)
=====================================================================
TOTAL INVESTMENTS [99.0%]
(Cost $41,514) 43,069
=====================================================================
OTHER ASSETS AND LIABILITIES [1.0%]
Investment Advisory Fees Payable (23)
Shareholder Servicing & Distribution
Fees Payable (14)
Administration Fees Payable (3)
Other Assets and Liabilities, Net 486
--------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES 446
=====================================================================
NET ASSETS [100.0%] $ 43,515
==========================================================================
DESCRIPTION VALUE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Paid-in-Capital (unlimited authorization --
$0.01 par value) $ 43,052
Accumulated net realized loss
on investments (1,092)
Net unrealized appreciation
on investments 1,555
--------------------------------------------------------------------------
NET ASSETS [100.0%] $ 43,515
==========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($22,859,686 / 2,455,574 shares) $ 9.31
==========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($20,655,197 / 2,219,063 shares) $ 9.31
==========================================================================
* 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." ON SEPTEMBER 30, 2004, THE VALUE OF THESE
SECURITIES AMOUNTED TO APPROXIMATELY $10,469,000, REPRESENTING 24.1% OF
THE NET ASSETS OF THE FUND.
(B) STEP BOND -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS IS THE
EFFECTIVE YIELD AT TIME OF PURCHASE. THE COUPON ON A STEP BOND CHANGES ON
A SPECIFIC DATE.
(C) IN DEFAULT ON INTEREST PAYMENTS
(D) FLOATING RATE SECURITY -THE RATE REPORTED IS THE EFFECTIVE RATE AT
SEPTEMBER 30, 2004.
CL -- CLASS
SER -- SERIES
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 45
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
PRIME MONEY MARKET FUND
SECTOR WEIGHTINGS*:
[THE FOLLOWING WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
44.7% Commercial Paper
31.9% Repurchase Agreements
11.7% U.S. Government Agency Obligations
8.5% Corporate Bonds
3.2% Certificate of Deposit
0.0% Cash Equivalent
* Percentages are based on total investments.
- --------------------------------------------------------------------------------
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
COMMERCIAL PAPER (A) [44.7%]
ASSET-BACKED SECURITIES [20.7%]
Barton Capital
1.772%, 10/19/04 $ 22,000 $ 21,981
Edison Asset
1.702%, 10/15/04 22,000 21,985
Eiffel Funding
1.766%, 11/22/04 22,000 21,944
Giro Funding
1.732%, 10/15/04 22,000 21,985
Kitty Hawk Funding
1.753%, 10/20/04 22,000 21,980
Premier Asset
1.909%, 12/22/04 10,000 9,957
Ranger Funding
1.642%, 10/05/04 22,000 21,996
--------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES 141,828
==========================================================================
BANKS [12.9%]
Bank of America
1.776%, 11/23/04 22,000 21,943
Banque Generale Luxembourg
1.756%, 11/19/04 22,000 21,947
Societe Generale
1.641%, 10/01/04 22,000 22,000
UBS Financial
1.577%, 10/04/04 22,000 21,997
--------------------------------------------------------------------------
TOTAL BANKS 87,887
--------------------------------------------------------------------------
DRUGS [3.2%]
Pfizer
1.798%, 12/16/04 22,000 21,917
==========================================================================
FINANCIAL SERVICES [6.4%]
American Honda Finance
1.754%, 11/08/04 22,000 21,960
General Electric Capital
1.722%, 10/20/04 22,000 21,980
--------------------------------------------------------------------------
TOTAL FINANCIAL SERVICES 43,940
==========================================================================
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
INSURANCE [1.5%]
AIG Funding
1.743%, 10/21/04 $ 10,000 $ 9,990
==========================================================================
TOTAL COMMERCIAL PAPER
(Cost $305,562) 305,562
=====================================================================
U.S. GOVERNMENT AGENCY OBLIGATIONS [11.7%]
FHLB
1.560%, 05/13/05 25,000 25,000
FNMA
1.800%, 05/27/05 55,000 55,000
--------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $80,000) 80,000
=====================================================================
CORPORATE BONDS [8.4%]
FINANCIAL SERVICES [2.9%]
American General Finance,
Ser F, MTN
7.450%, 01/15/05 14,500 14,759
International Lease Finance,
Ser M, MTN
4.750%, 01/18/05 5,000 5,051
--------------------------------------------------------------------------
TOTAL FINANCIAL SERVICES 19,810
==========================================================================
SECURITY BROKERS & DEALERS [2.3%]
Goldman Sachs Group, Ser E,
MTN
7.500%, 01/28/05 15,349 15,659
==========================================================================
TELEPHONES & TELECOMMUNICATIONS [3.2%]
Vodafone Group (B)
7.625%, 02/15/05 22,000 22,454
==========================================================================
TOTAL CORPORATE BONDS
(Cost $57,923) 57,923
=====================================================================
CERTIFICATE OF DEPOSIT [3.2%]
First Tennessee Bank
1.720%, 10/20/04 22,000 22,000
--------------------------------------------------------------------------
TOTAL CERTIFICATE OF DEPOSIT
(Cost $22,000) 22,000
=====================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 46
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
PRIME MONEY MARKET FUND (CONCLUDED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
CASH EQUIVALENT [0.0%]
Fidelity Institutional Domestic
Money Market Portfolio,
Cl I $ 247,776 $ 248
--------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(Cost $248) 248
=====================================================================
REPURCHASE AGREEMENTS (C) [31.9%]
Banc of America
1.860%, dated 09/30/04,
repurchased on 10/01/04,
repurchase price $40,002,067
(collateralized by U.S.
Government Obligation, par
value $40,839,701, 6.000%,
08/01/34; with total market
value $40,800,000) 40,000 40,000
Bear Stearns
1.900%, dated 09/30/04,
repurchased on 10/01/04,
repurchase price $95,005,014
(collateralized by U.S.
Governement Obligations,
ranging in par value $3,020,000-
$14,060,116, 4.000%-6.000%,
06/01/17-09/01/34; with total
market value $96,903,519) 95,000 95,000
Credit Suisse First Boston
1.870%, dated 09/30/04,
repurchased on 10/01/04,
repurchase price $30,001,558
(collateralized by a U.S.
Government Obligations,
ranging in par value $4,070,000-
$23,365,000, 5.000%-5.500%,
11/01/17-07/01/32; with total
market value $30,601,489) 30,000 30,000
Deutsche Bank
1.870%, dated 09/30/04,
repurchased on 10/01/04,
repurchase price $25,001,299
(collateralized by a U.S.
Government Obligation,
par value $24,059,000, 5.500%,
07/15/06; with total market
value $25,500,094) 25,000 25,000
Lehman Brothers
1.880%, dated 09/30/04,
repurchased on 10/01/04,
repurchase price $27,801,452
(collateralized by U.S.
Government Obligation,
par value $27,245,000, 6.000%,
09/01/34; with total market
value $28,357,501) 27,800 27,800
--------------------------------------------------------------------------
DESCRIPTION VALUE (000)
- --------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost $217,800) 217,800
=====================================================================
TOTAL INVESTMENTS [99.9%]
(Cost $683,533) 683,533
=====================================================================
OTHER ASSETS AND LIABILITIES [0.1%]
Investment Advisory Fees Payable (158)
Shareholder Servicing & Distribution
Fees Payable (214)
Administration Fees Payable (40)
Other Assets and Liabilities, Net 907
--------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES 495
=====================================================================
NET ASSETS [100.0%] $ 684,028
==========================================================================
NET ASSETS:
Paid-in-Capital (unlimited authorization --
$0.01 par value) $ 684,431
Accumulated net realized loss
on investments (403)
--------------------------------------------------------------------------
NET ASSETS [100.0%] $ 684,028
==========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($367,209,388 / 367,345,028 shares) $ 1.00
==========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($201,057,669 / 201,327,935 shares) $ 1.00
==========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class S
($115,760,719 / 115,850,880 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." ON SEPTEMBER 30, 2004, THE VALUE OF THESE
SECURITIES AMOUNTED TO APPROXIMATELY $22,454,000, REPRESENTING 3.2% OF THE
NET ASSETS OF THE FUND.
(C) TRI-PARTY REPURCHASE AGREEMENT
CL -- CLASS
FHLB -- FEDERAL HOME LOAN BANK
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
MTN -- MEDIUM TERM NOTE
SER -- SERIES
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 47
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
GOVERNMENT MONEY MARKET FUND
SECTOR WEIGHTINGS*:
[THE FOLLOWING WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
56.2% U.S. Government Agency
43.8% Repurchase Agreements
* Percentages are based on total investments.
- --------------------------------------------------------------------------------
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS [56.3%]
FHLB
1.500%, 03/01/05 $ 20,770 $ 20,770
1.470%, 03/01/05 25,000 25,000
1.400%, 04/01/05 15,000 14,997
1.560%, 05/13/05 75,000 75,000
1.700%, 05/23/05 53,500 53,500
1.780%, 05/27/05 5,310 5,310
2.050%, 06/27/05 25,000 25,000
2.300%, 08/19/05 40,000 40,000
FHLB (B)
1.400%, 03/16/05 14,240 14,240
1.200%, 04/13/05 25,000 25,000
1.350%, 05/02/05 35,000 35,000
FHLMC
2.260%, 09/27/05 25,000 25,000
FHLMC, MTN
2.350%, 10/27/05 25,000 25,000
FNMA
1.650%, 05/16/05 55,575 55,575
1.660%, 05/20/05 10,000 10,000
1.800%, 05/27/05 15,000 15,000
1.400%, 07/08/05 2,680 2,661
FNMA (A)
1.696%, 10/05/04 600,000 599,887
1.672%, 10/06/04 150,000 149,965
--------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $1,216,905) 1,216,905
=====================================================================
REPURCHASE AGREEMENTS (C) [43.7%]
Banc of America
1.860%, dated 09/30/04,
repurchased on 10/01/04,
repurchase price $160,008,267
(collateralized by U.S.
Government Obligation, par
value $188,327,047, 5.000%,
08/01/33; with total market
value $163,200,001) 160,000 160,000
Barclay Bank
1.880%, dated 09/30/04,
repurchased on 10/01/04,
repurchase price $100,005,222
(collateralized by U.S.
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Government Obligations,
ranging in par value
$95,000-$35,000,000, 3.000%-
6.000%, 04/15/05-12/30/22;
with total market value
$102,002,272) $ 100,000 $ 100,000
Bear Stearns
1.900%, dated 09/30/04,
repurchased on 10/01/04,
repurchase price $165,008,708
(collateralized by U.S.
Government Obligations,
ranging in par value
$1,265,552-$13,231,760,
4.000%-7.500%, 10/01/18-
10/01/34; with total market
value $168,301,906) 165,000 165,000
Credit Suisse First Boston
1.870%, dated 09/30/04,
repurchased on 10/01/04,
repurchase price $95,004,935
(collateralized by U.S.
Government Obligations,
ranging in par value
$857,734-$30,429,402, 4.000%-
7.000%, 08/01/16-09/01/33;
with total market value
$96,902,448) 95,000 95,000
Deutsche Bank
1.870%, dated 09/30/04,
repurchased on 10/01/04,
repurchase price $75,003,896
(collateralized by U.S.
Government Obligations,
ranging in par value
$13,862,000-$62,630,000,
2.015%(A)-4.8750%, 03/29/05-
11/15/13; with total market
value $76,500,824) 75,000 75,000
JP Morgan Chase
1.880%, dated 09/30/04,
repurchased on 10/01/04,
repurchase price $100,005,222
(collateralized by a U. S.
Government Obligations,
ranging in par value
$41,460,000-$67,575,000,
5.000%-5.000%, 03/01/34-
03/01/34; with total market
value $102,002,659) 100,000 100,000
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 48
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
GOVERNMENT MONEY MARKET FUND (CONCLUDED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Lehman Brothers
1.880%, dated 09/30/04,
repurchased on 10/01/04,
repurchase price $152,407,959
(collateralized by U.S.
Government Obligations,
ranging in par value
$17,680,000-$53,659,990,
5.000%-6.000%, 02/01/18-
09/01/34; with total market
value $155,439,860) $ 152,400 $ 152,400
UBS Paine Webber
1.880%, dated 09/30/04,
repurchased on 10/01/04,
repurchase price $100,005,222
(collateralized by U.S.
Government Obligations,
ranging in par value
$7,835,000-$50,000,000,
4.500%-6.000%, 12/01/13-
11/01/33; with total market
value $102,002,805) 100,000 100,000
--------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost $947,400) 947,400
=====================================================================
TOTAL INVESTMENTS [100.0%]
(Cost $2,164,305) 2,164,305
=====================================================================
OTHER ASSETS AND LIABILITIES [0.0%]
Investment Advisory Fees Payable (521)
Shareholder Servicing & Distribution
Fees Payable (874)
Administration Fees Payable (129)
Trustees' Fees Payable (2)
Other Assets and Liabilities, Net 1,591
--------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES 65
=====================================================================
NET ASSETS [100.0%] $2,164,370
==========================================================================
DESCRIPTION VALUE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Paid-in-Capital (unlimited authorization --
$0.01 par value) $2,164,368
Accumulated net realized gain
on investments 2
--------------------------------------------------------------------------
NET ASSETS [100.0%] $2,164,370
==========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($43,608,025 / 43,609,220 shares) $ 1.00
==========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($1,857,676,014 / 1,857,671,988 shares) $ 1.00
==========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class S
($263,086,442 / 263,086,676 shares) $ 1.00
==========================================================================
(A) THE RATE REPORTED IS THE EFFECTIVE YIELD AT TIME OF PURCHASE.
(B) FLOATING RATE SECURITY -- THE RATE REPORTED IS THE RATE IN EFFECT AT
SEPTEMBER 30, 2004. THE DATE SHOWN IS THE EARLIER OF THE RESET DATE OR THE
DEMAND DATE.
(C) TRI-PARTY REPURCHASE AGREEMENT
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 49
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT MONEY MARKET FUND
SECTOR WEIGHTINGS*:
[THE FOLLOWING WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
17.3% Housing
14.8% General Revenue
14.7% Education
9.3% General Obligation
8.5% Public Facilities
7.7% Water
7.2% Healthcare
6.2% Transportation
5.3% Power
4.3% Utilities
3.5% Industrial Development
0.8% Equipment
0.4% Special Obligation
* Percentages are based on total investments.
- --------------------------------------------------------------------------------
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
MUNICIPAL BONDS [95.4%]
CALIFORNIA [94.4%]
ABAG, Finance Authority for
Non-Profit Corporations,
Hamlin School Project,
Ser A, GO (A) (B) (C)
1.700%, 08/01/32 $ 1,500 $ 1,500
ABAG, Finance Authority for
Non-Profit Corporations,
Public Policy Institute,
Ser A, RB (A) (B) (C)
1.700%, 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)
1.830%, 06/01/30 8,500 8,500
ABAG, Finance Authority for
Non-Profit Corporations,
Ser C, COP (A) (B) (C)
1.700%, 10/01/27 9,095 9,095
Alameda County, Santa Rita Jail
Project, COP, MBIA, ETM
5.250%, 12/01/04 500 504
Alameda-Contra Costa, School
Finance Authority, Capital
Improvement Financing
Project, Ser F, COP (A) (B) (C)
1.780%, 08/01/23 1,000 1,000
Anaheim, 1993 Police Facilities
Refinancing Project, COP,
AMBAC (A) (B)
1.660%, 08/01/08 5,000 5,000
Anaheim, Multi-Family Housing
Authority, Heritage Village
Apartments Project, Ser A,
RB (A) (B) (C)
1.690%, 07/15/33 4,385 4,385
Antelope Valley, Healthcare
Project, Ser A, RB (A) (B) (C)
1.680%, 09/01/17 1,500 1,500
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Berkeley, TRAN
1.750%, 12/01/04 $ 12,000 $ 12,013
California State, Department of
Water Resource & Power,
Ser C-13, RB, FSA (A) (B)
1.690%, 05/01/22 5,000 5,000
California State, Department of
Water Resource & Power,
Ser C-15, RB (A) (B) (C)
1.700%, 05/01/22 5,000 5,000
California State, Department of
Water Resources, Ser B-1,
RB (A) (B) (C)
1.710%, 05/01/22 9,300 9,300
California State, Economic
Development Financing
Authority, KQED Project,
RB (A) (B) (C)
1.650%, 04/01/20 1,500 1,500
California State, Economic
Recovery Authority,
Ser C-12, RB (A) (B)
1.690%, 07/01/23 5,000 5,000
California State, Economic
Recovery Authority,
Ser C-4, RB (A) (B)
1.710%, 07/01/23 5,200 5,200
California State, Economic
Recovery Authority,
Ser C-7, RB (A) (B) (C)
1.720%, 07/01/23 3,000 3,000
California State, Economic
Recovery Authority,
Ser C-8, RB (A) (B) (C)
1.770%, 07/01/23 3,000 3,000
California State, Educational
Facilities Authority, Chapman
University Project,
RB (A) (B) (C)
1.800%, 12/01/30 1,000 1,000
California State, GO
Pre-Refunded @ 101 (F)
5.750%, 03/01/05 5,450 5,611
California State, Health Facilites
Financing Authority, Catholic
Project, Ser J, RB (A) (B) (C)
1.690%, 07/01/33 8,000 8,000
California State, Health Facilities
Finance Authority, Adventist
Hospital Project, Ser A, RB,
MBIA (A) (B)
1.710%, 09/01/28 8,385 8,385
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 50
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
California State, Health Facilities
Finance Authority, Scripps
Health Project, Ser A, RB
(A) (B) (C)
1.690%, 10/01/23 $ 5,400 $ 5,400
California State, Health Facilities
Financing Authority, Adventist
Health Systems Project,
Ser B, RB (A) (B) (C)
1.710%, 09/01/25 3,100 3,100
California State, Housing Finance
Agency, Multi-Family Housing
III Project, Ser B, RB (A) (B)
1.800%, 02/01/33 4,425 4,425
California State, Public Works
Board Lease, Department of
Corrections Project, Ser A, RB
Pre-Refunded @ 102 (F)
6.875%, 11/01/04 500 512
California State, Public Works
Board Lease, Various
Community College Projects,
RB, AMBAC
6.000%, 03/01/05 1,000 1,019
California State, School Cash
Reserve Project, Ser A, GO
3.000%, 07/06/05 6,500 6,568
California State, Ser A, GO
(A) (B) (C)
1.710%, 10/01/29 9,880 9,880
California State, Ser A-1, GO
(A) (B) (C)
1.800%, 05/01/33 5,850 5,850
California State, Statewide
Communities Development
Authority, House Ear Institute
Project, COP (A) (B) (C)
1.710%, 12/01/18 2,000 2,000
California State, Statewide
Communities Development
Authority, Ser B-1, TRAN,
FSA
3.500%, 07/29/05 5,000 5,077
California Statewide,
Communities Development
Authority, Center For Early
Education Project, RB
(A) (B) (C)
1.700%, 09/01/31 1,000 1,000
Chaffey, Union High School
District, Ser C, GO, FSA
3.500%, 05/01/05 500 507
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Chico, Public Financing
Authority, Merged
Redevelopment Project,
TA, MBIA
4.000%, 04/01/05 $ 500 $ 507
Contra Costa County, Putters,
Ser 154Z, COP, MBIA (A) (B)
1.720%, 11/01/07 5,995 5,995
Corona, Multi-Family Housing
Authority, Country Hills
Project, Ser A, RB (A) (B) (D)
1.680%, 02/01/20 6,475 6,475
Desert Sands, Unified School
District, Election 2001,
GO, FSA
3.000%, 06/01/05 1,000 1,010
Desert Sands, Unified School
District, TRAN
2.500%, 07/07/05 8,500 8,561
East Bay-Delta, Housing &
Finance Authority, Ser A,
RB, MBIA
4.250%, 06/01/05 3,255 3,314
East Side, Union High School
District, TRAN
2.500%, 06/30/05 10,000 10,068
Fontana, Unified School District,
School Facility Bridge
Funding Progam, COP,
FSA (A) (B)
1.670%, 04/01/35 5,000 5,000
Fremont, Family Center Finance
Project, COP (A) (B) (C)
1.700%, 08/01/28 4,525 4,525
Fremont, Office Building
Improvement & Fire
Equipment Project, COP
(A) (B) (C)
1.700%, 08/01/30 3,530 3,530
Fresno, Multi-Family Housing
Authority, Stonepine
Apartment Project, Ser A, RB
(A) (B) (D)
1.680%, 02/15/31 1,595 1,595
Fresno, Palm Lakes Apartment
Project, RB (A) (B) (C)
1.670%, 05/01/15 3,715 3,715
Glendale, Police Building Project,
COP (A) (B)
1.690%, 06/01/30 15,800 15,800
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 51
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Imperial, Irrigation District,
Election System Project,
COP, MBIA
Pre-Refunded @ 102 (F)
6.000%, 11/01/04 $ 3,955 $ 4,051
Irvine Ranch, Water District
#140-240-105-250, GO
(A) (B) (C)
1.730%, 04/01/33 1,000 1,000
Irvine Ranch, Water District
Conservation, Ser B, GO
(A) (B) (C)
1.800%, 08/01/09 2,300 2,300
Irvine, Unified School District,
Community Facilities District
No. 01-1, Special Tax
(A) (B) (C)
1.730%, 09/01/38 1,400 1,400
Kings County, Multi-Family
Housing Authority, Edgewater
Isle Apartments Project,
Ser A, RB (A) (B) (D)
1.680%, 02/15/31 10,710 10,710
Lemon Grove, Multi-Family
Housing, Hillside Terrace
Project, RB (A) (B) (D)
1.680%, 02/15/31 4,955 4,955
Los Angeles County, Metropolitan
Transportation Authority,
Proposition C-2nd SR,
Ser A, RB, AMBAC
Pre-Refunded @ 102 (F)
5.700%, 07/01/05 1,135 1,193
Los Angeles County, Multi-Family
Housing Authority, Malibu
Canyon Apartments Project,
Ser B, RB (A) (B) (C)
1.650%, 06/01/10 8,000 8,000
Los Angeles County, Multi-Family
Housing Authority, Valencia
Housing Project, Ser C, RB
(A) (B) (E)
1.650%, 04/01/31 600 600
Los Angeles County, Pension
Authority, Ser A, RB,
AMBAC (A) (B)
1.660%, 06/30/07 1,050 1,050
Los Angeles County, Pension
Authority, Ser B, RB,
AMBAC (A) (B)
1.660%, 06/30/07 10,575 10,575
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Los Angeles County, Schools,
Transport Project, Ser A,
GO, FSA
3.500%, 06/30/05 $ 15,000 $ 15,208
Los Angeles, Community
Redevelopment Authority,
CMC Medical Plaza Partner
Project, COP (A) (B) (C)
1.680%, 12/01/05 600 600
Los Angeles, Corporate Lease
Authority, RB, MBIA (A) (B)
1.700%, 12/01/09 10,615 10,615
Los Angeles, Department of
Water & Power, RB
Pre-Refunded @ 101 (F)
6.000%, 02/15/05 540 555
Los Angeles, Department of
Water & Power, Sub-Ser B-3,
RB (A) (B)
1.700%, 07/01/35 3,300 3,300
Los Angeles, GO, MBIA (A) (B)
1.700%, 03/01/10 5,370 5,370
Los Angeles, Metropolitan
Transit Commission, Ser A,
RB, FGIC (A) (B)
1.660%, 07/01/12 1,100 1,100
Los Angeles, Metropolitan
Transportation Authority,
Proposition C, Ser A, RB,
MBIA (A) (B)
1.700%, 07/01/20 14,950 14,950
Los Angeles, Samuel A Fryer
Vavney, Ser A, COP
(A) (B) (C)
1.650%, 08/01/21 7,000 7,000
Los Angeles, Unified School
District, Multiple Properties
Project, Ser B, COP, FSA
4.000%, 10/01/04 500 500
Los Angeles, Unified School
District, Ser B, COP, MBIA
4.000%, 10/01/04 900 900
Los Angeles, Unified School
District, Ser B12, GO, MBIA
(A) (B)
1.710%, 01/01/27 3,990 3,990
Los Angeles, Wastewater System
Authority, Ser C, RB, FGIC
(A) (B)
1.150%, 12/01/31 5,975 5,975
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 52
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Los Angeles, Water & Power
Resource Authority, RB
Pre-Refunded @ 101 (F)
6.000%, 02/15/05 $ 1,000 $ 1,029
Los Angeles, Water & Power
Resource Authority,
Sub-Ser B-3, RB (A) (B)
1.740%, 07/01/34 5,300 5,300
Los Angeles, Water & Power
Resource Authority,
Sub-Ser B-2, RB (A) (B)
1.700%, 07/01/34 2,000 2,000
Marysville, Joint Unified School
District, TRAN
1.750%, 11/25/04 4,000 4,004
Newport Beach, Hoag Memorial
Hospital, Ser A, RB (A) (B)
1.760%, 10/01/26 2,000 2,000
Oakland, Capital Equipment
Project, COP (A) (B) (C)
1.680%, 12/01/15 4,390 4,390
Oakland, Joint Powers Financing
Authority, Ser A-2, RB, FSA
(A) (B)
1.700%, 08/01/21 13,600 13,600
Oakland, JT Powers Financing
Authority, Ser A-1, RB, FSA
(A) (B)
1.670%, 08/01/21 1,000 1,000
Orange County, Apartment
Development Authority,
Harbor Pointe - Issue D
Project, RB (A) (B)
1.680%, 12/01/06 1,900 1,900
Orange County, Apartment
Development Authority,
Hidden Hills Project,
Ser C, RB (A) (B)
1.650%, 11/01/09 3,200 3,200
Orange County, Apartment
Development Authority,
Larkspur Canyon Apartments,
Ser A, RB, FSA (A) (B)
1.680%, 06/15/37 1,200 1,200
Orange County, Apartment
Development Authority,
Riverbend Apartments Project,
Ser B, RB (A) (B) (C)
1.680%, 12/01/29 5,000 5,000
Orange County, Community
Facilities District Authority,
Serrano Heights-No. 91-2
Project, Ser A, RB, AMBAC
3.000%, 10/01/04 925 925
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Orange County, Sanitation
District Authority, Ser A,
COP (A) (B)
1.730%, 08/01/29 $ 7,685 $ 7,685
Orange County, Water District
Authority, Ser A, COP (A) (B)
1.670%, 08/01/42 2,700 2,700
Pasadena, Rose Bowl
Improvements Project, COP
(A) (B) (C)
1.680%, 12/01/11 2,800 2,800
Redwood City, City Hall Project,
COP (A) (B) (C)
1.700%, 07/01/21 1,800 1,800
Riverside County, Asset Leasing
Authority, Southwest Justice
Center Project, Ser B, RB,
MBIA (A) (B)
1.660%, 11/01/32 4,650 4,650
Riverside County, Housing
Authority, De Anza Villas
Project, RB (A) (B) (C)
1.630%, 12/01/16 2,285 2,285
Riverside County, Housing
Authority, Polk Apartments
Limited LP, Ser B, RB
(A) (B) (C)
1.680%, 12/15/30 7,690 7,690
Riverside County, Ser C, COP
(A) (B) (C)
1.650%, 12/01/15 17,500 17,500
Riverside-San Bernardino,
Sub-Pass Thru Obligations,
Ser B, RB (A) (B)
1.700%, 07/01/06 1,350 1,350
Sacramento County, Housing
Authority, Bent Tree
Apartments Project, Ser A,
RB (A) (B) (D)
1.680%, 02/15/31 2,500 2,500
Sacramento County, Sanitation
District Finance Authority,
Ser 366, RB (A) (B)
1.690%, 12/01/27 1,000 1,000
Sacramento County, TRAN,
Ser A
3.000%, 07/11/05 12,000 12,124
San Bernardino County,
Housing Authority, Alta Loma
Heritage Project, Ser A, RB
(A) (B) (C)
1.530%, 02/01/23 1,354 1,354
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 53
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
San Bernardino County,
Transportation Authority,
Ser A, RB, AMBAC
5.000%, 03/01/05 $ 805 $ 817
San Diego County, School
District, TRAN
3.250%, 07/25/05 10,000 10,133
San Diego County, Water
Authority, Ser A, COP, MBIA
4.000%, 05/01/05 550 558
San Diego, Museum of Art
Project, COP (A) (B) (C)
1.830%, 09/01/30 1,400 1,400
San Diego, Water Authority,
Ser I, MBIA, COP (A) (B)
1.720%, 11/01/10 5,981 5,981
San Francisco (City & County),
Housing Authority, Bayside
Village Project D, Ser A, RB
(A) (B) (C)
1.510%, 12/01/05 10,500 10,500
San Francisco (City & County),
Housing Authority, Bayside
Village Project D, Ser B, RB
(A) (B) (C)
1.510%, 12/01/05 1,000 1,000
San Francisco (City & County),
Public Utilities Authority,
Ser B20, RB, MBIA (A) (B)
1.710%, 10/01/22 8,595 8,595
San Francisco, Bay Area Toll
Authority, Ser A, RB,
AMBAC (A) (B)
1.680%, 04/01/36 13,000 13,000
San Francisco, Bay Area Toll
Authority, Ser C, RB,
AMBAC (A) (B)
1.700%, 04/01/25 5,650 5,650
San Jose, Redevelopment Agency,
Merged Area Redevelopment
Project, Ser A, RB (A) (B) (C)
1.660%, 07/01/26 3,000 3,000
Santa Clara County, Financing
Authority, VMC Facility
Replacement Project,
Ser B, RB (A) (B)
1.700%, 11/15/25 11,200 11,200
Santa Clara, Unified School
District, RAN
2.500%, 06/30/05 6,660 6,706
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Southern California,
Metropolitan Water District
Authority, Ser B, RB (A) (B)
1.690%, 07/01/27 $ 2,100 $ 2,100
Southern California,
Metropolitan Water District
Authority, Ser B-3, RB
(A) (B)
1.730%, 07/01/35 15,500 15,500
Southern California,
Metropolitan Water District
Authority, Water Works
Authorization, Ser B, RB
(A) (B)
1.690%, 07/01/28 4,000 4,000
Stockton, Multi-Family Housing
Authority, Mariners Pointe
Project, Ser A, RB (A) (B) (C)
1.680%, 09/01/18 2,100 2,100
Sunnyvale, Government Center
Site Acquisition Project, Ser A,
COP, AMBAC (A) (B)
1.700%, 04/01/31 4,600 4,600
Three Valleys, Municipal Water
District Authority, Miramar
Water Treatment Project, COP
(A) (B) (C)
1.650%, 11/01/14 4,700 4,700
Turlock, Irrigation District,
Capital Improvement &
Refunding Project, COP
(A) (B) (C)
1.710%, 01/01/31 2,550 2,550
Upland, Community
Redevelopment Authority,
Sunset Ridge & Village
Apartments Project, RB
(A) (B) (C)
1.680%, 12/01/29 6,700 6,700
Westminster, Civic Center
Refinancing Program, Ser A,
COP, AMBAC (A) (B)
1.700%, 06/01/22 3,300 3,300
Yolo County, Multi-Family
Housing Authority, Primero
Grove Project, Ser A, RB
(A) (B) (C)
1.680%, 11/01/27 10,485 10,485
--------------------------------------------------------------------------
TOTAL CALIFORNIA 583,404
==========================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 54
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONCLUDED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
PUERTO RICO [1.0%]
Puerto Rico, Highway &
Transportation Authority, RB,
MBIA (A) (B)
1.680%, 01/01/08 $ 6,000 $ 6,000
==========================================================================
TOTAL MUNICIPAL BONDS
(Cost $589,404) 589,404
=====================================================================
TOTAL INVESTMENTS [95.4%]
(Cost $589,404) 589,404
=====================================================================
OTHER ASSETS AND LIABILITIES [4.6%]
Investment Advisory Fees Payable (105)
Shareholder Servicing & Distribution
Fees Payable (245)
Administration Fees Payable (38)
Trustees' Fees Payable (1)
Other Assets and Liabilities, Net 28,947
--------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES 28,558
=====================================================================
NET ASSETS [100.0%] $ 617,962
==========================================================================
NET ASSETS:
Paid in Capital (unlimited authorization --
$0.01 par value) $ 617,784
Undistributed net investment income 4
Accumulated net realized gain
on investments 174
--------------------------------------------------------------------------
NET ASSETS [100.0%] $ 617,962
==========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($79,412,828 / 79,387,390 shares) $ 1.00
==========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($505,028,960 / 504,885,797 shares) $ 1.00
==========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class S
($33,520,273 / 33,511,266 shares) $ 1.00
==========================================================================
(A) FLOATING RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET
ASSETS IS THE RATE IN EFFECT ON SEPTEMBER 30, 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
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 55
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
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 $ 779 $ 321 $ 473 $ 8
Interest 10 8 55 1
Less: Foreign tax withheld -- -- (2) --
- ---------------------------------------------------------------------------------------------------------------------------------
Total Investment Income 789 329 526 9
- ---------------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Investment Advisory Fees 255 188 311 19
Shareholder Servicing Fees--Institutional Class 92 63 19 3
Shareholder Servicing Fees--Class A(1) 21 18 27 7
Shareholder Servicing Fees--Class R(1) -- -- 119 --
Administrative Fees 39 27 35 2
Transfer Agent Fees 4 3 4 --
Professional Fees 4 4 4 1
Trustee Fees 1 1 1 --
Registration and Filing Fees 1 1 1 --
Custodian Fees -- -- 1 --
Printing Fees -- 1 1 --
Insurance and Other Fees 3 2 2 1
- ---------------------------------------------------------------------------------------------------------------------------------
Total Expenses 420 308 525 33
- ---------------------------------------------------------------------------------------------------------------------------------
Recapture of Investment Advisory Fees Waived(2) 11 7 13 --
Less, Waiver of:
Investment Advisory Fees -- -- -- (1)
Administrative Fees (5) (3) (5) --
Transfer Agent Fees (4) (3) (4) --
- ---------------------------------------------------------------------------------------------------------------------------------
Net Expenses 422 309 529 32
- ---------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) 367 20 (3) (23)
- ---------------------------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss) From Securities Transactions 1,919 270 2,093 (242)
Net Change in Unrealized Appreciation
on Investments 4,512 1,045 4,851 175
- ---------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 6,798 $ 1,335 $ 6,941 $ (90)
=================================================================================================================================
(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.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 56
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
CALIFORNIA
CORPORATE GOVERNMENT TAX EXEMPT HIGH YIELD
BOND FUND BOND FUND BOND FUND BOND FUND
(000) (000) (000) (000)
------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 2,060 $ 587 $ 554 $ 3,290
- ---------------------------------------------------------------------------------------------------------------------------
Total Investment Income 2,060 587 554 3,290
- ---------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Investment Advisory Fees 181 81 49 278
Shareholder Servicing Fees--Institutional Class 110 47 42 43
Shareholder Servicing Fees--Class A(1) 6 1 7 108
Administrative Fees 43 18 17 35
Transfer Agent Fees 5 2 2 4
Professional Fees 4 1 1 5
Trustee Fees 1 -- -- 1
Registration and Filing Fees 1 1 1 1
Custodian Fees 3 -- 1 2
Printing Fees 2 1 1 2
Insurance and Other Fees 3 1 1 2
- ---------------------------------------------------------------------------------------------------------------------------
Total Expenses 359 153 122 481
- ---------------------------------------------------------------------------------------------------------------------------
Less, Waiver of:
Investment Advisory Fees (6) (16) (23) (42)
Administrative Fees (6) (2) (2) (5)
Transfer Agent Fees (5) (2) (2) (4)
- ---------------------------------------------------------------------------------------------------------------------------
Net Expenses 342 133 95 430
- ---------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 1,718 454 459 2,860
- ---------------------------------------------------------------------------------------------------------------------------
Net Realized Gain From Securities Transactions 302 116 38 570
Net Change in Unrealized Appreciation (Depreciation)
on Investments (967) (383) (112) 735
- ---------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 1,053 $ 187 $ 385 $ 4,165
===========================================================================================================================
(1) INCLUDES CLASS SPECIFIC DISTRIBUTION EXPENSES.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 57
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
CALIFORNIA
PRIME GOVERNMENT TAX EXEMPT
MONEY MONEY MONEY
MARKET FUND MARKET FUND MARKET FUND
(000) (000) (000)
----------------------------------------------------
INVESTMENT INCOME:
Interest $ 7,349 $ 26,302 $ 7,617
- ------------------------------------------------------------------------------------------------------------------
Total Investment Income 7,349 26,302 7,617
- ------------------------------------------------------------------------------------------------------------------
EXPENSES:
Investment Advisory Fees 1,517 5,685 1,927
Shareholder Servicing Fees--Institutional Class 785 130 267
Shareholder Servicing Fees--Class A(1) 1,353 14,482 4,316
Shareholder Servicing Fees--Class S(1) 839 1,514 258
Administrative Fees 572 2,059 676
Transfer Agent Fees 63 228 75
Professional Fees 48 167 55
Trustee Fees 13 51 15
Registration and Filing Fees 8 32 10
Custodian Fees 34 125 28
Printing Fees 20 65 26
Insurance and Other Fees 40 135 47
- ------------------------------------------------------------------------------------------------------------------
Total Expenses 5,292 24,673 7,700
- ------------------------------------------------------------------------------------------------------------------
Recapture of Investment Advisory Fees Waived(2) 141 285 --
Less, Waiver of:
Investment Advisory Fees -- -- (530)
Administrative Fees (81) (260) (92)
Shareholder Servicing Fees --Class A(1) (504) (5,400) (1,567)
Shareholder Servicing Fees -- Class S(1) (145) (260) (50)
Transfer Agent Fees (63) (228) (75)
- ------------------------------------------------------------------------------------------------------------------
Net Expenses 4,640 18,810 5,386
- ------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 2,709 7,492 2,231
- ------------------------------------------------------------------------------------------------------------------
Net Realized Gain From Securities Transactions 4 6 177
- ------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 2,713 $ 7,498 $ 2,408
==================================================================================================================
(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.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 58
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED SEPTEMBER 30,
- --------------------------------------------------------------------------------
LARGE CAP VALUE LARGE CAP GROWTH
EQUITY FUND (000) EQUITY FUND (000)
-------------------------- --------------------------
2004 2003 2004 2003
- ---------------------------------------------------------------------------------------- --------------------------
OPERATIONS:
Net Investment Income $ 367 $ 336 $ 20 $ 29
Net Realized Gain (Loss) from
Security Transactions 1,919 (230) 270 (274)
Net Change in Unrealized Appreciation
on Investments 4,512 6,334 1,045 4,023
- ---------------------------------------------------------------------------------------- --------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations 6,798 6,440 1,335 3,778
- ---------------------------------------------------------------------------------------- --------------------------
DIVIDENDS FROM:
Net Investment Income:
INSTITUTIONAL CLASS (335) (326) (17) (29)
CLASS A (32) (10) -- --
- ---------------------------------------------------------------------------------------- --------------------------
Total Dividends (367) (336) (17) (29)
- ---------------------------------------------------------------------------------------- --------------------------
CAPITAL SHARE TRANSACTIONS:(1)
INSTITUTIONAL CLASS:
Shares Issued 7,249 9,863 7,697 9,131
Shares Issued in Lieu of Dividends & Distributions 78 75 5 9
Shares Redeemed (7,981) (6,133) (5,658) (4,620)
- ---------------------------------------------------------------------------------------- --------------------------
Increase (Decrease) in Net Assets from
Institutional Class Share Transactions (654) 3,805 2,044 4,520
- ---------------------------------------------------------------------------------------- --------------------------
CLASS A:
Shares Issued 4,721 949 3,941 1,028
Shares Issued in Lieu of Dividends & Distributions 21 8 -- --
Shares Redeemed (702) (152) (719) (76)
- ---------------------------------------------------------------------------------------- --------------------------
Increase in Net Assets from
Class A Share Transactions 4,040 805 3,222 952
- ---------------------------------------------------------------------------------------- --------------------------
Net Increase in Net Assets from
Share Transactions 3,386 4,610 5,266 5,472
- ---------------------------------------------------------------------------------------- --------------------------
Total Increase in Net Assets 9,817 10,714 6,584 9,221
- ---------------------------------------------------------------------------------------- --------------------------
NET ASSETS:
Beginning of Year 34,808 24,094 24,214 14,993
- ---------------------------------------------------------------------------------------- --------------------------
End of Year $ 44,625 $ 34,808 $ 30,798 $ 24,214
======================================================================================== ==========================
Undistributed (Distributions in excess of)
Net Investment Income $ (1) $ -- $ 3 $ --
- ---------------------------------------------------------------------------------------- --------------------------
(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.
CNI CHARTER FUNDS | PAGE 59
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED SEPTEMBER 30,
- --------------------------------------------------------------------------------
RCB SMALL CAP TECHNOLOGY GROWTH
VALUE FUND (000) FUND (000)
-------------------------- ------------------------
2004 2003 2004 2003
- ---------------------------------------------------------------------------------------- ------------------------
OPERATIONS:
Net Investment Income (Loss) $ (3) $ (59) $ (23) $ (14)
Net Realized Gain (Loss) from
Security Transactions 2,093 97 (242) (330)
Net Change in Unrealized Appreciation
(Depreciation) on Investments 4,851 5,967 175 934
- ---------------------------------------------------------------------------------------- ------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations 6,941 6,005 (90) 590
- ---------------------------------------------------------------------------------------- ------------------------
DIVIDENDS & DISTRIBUTIONS FROM:
Net Investment Income:
INSTITUTIONAL CLASS -- -- -- --
CLASS A -- -- -- --
Realized Capital Gains:
INSTITUTIONAL CLASS (23) -- -- --
CLASS A (11) -- -- --
CLASS R (53) -- -- --
- ---------------------------------------------------------------------------------------- ------------------------
Total Dividends & Distributions (87) -- -- --
- ---------------------------------------------------------------------------------------- ------------------------
CAPITAL SHARE TRANSACTIONS:(1)
INSTITUTIONAL CLASS:
Shares Issued 4,885 3,658 268 447
Shares Issued in Lieu of Dividends & Distributions 14 -- -- --
Shares Redeemed (3,741) (609) (185) (418)
- ---------------------------------------------------------------------------------------- ------------------------
Increase (Decrease) in Net Assets from
Institutional Class Share Transactions 1,158 3,049 83 29
- ---------------------------------------------------------------------------------------- ------------------------
CLASS A:
Shares Issued 6,794 1,739 633 249
Shares Issued in Lieu of Dividends & Distributions 8 -- -- --
Shares Redeemed (2,541) (137) (273) (2)
- ---------------------------------------------------------------------------------------- ------------------------
Increase (Decrease) in Net Assets from
Class A Share Transactions 4,261 1,602 360 247
- ---------------------------------------------------------------------------------------- ------------------------
CLASS R:
Shares Issued 20,199 1,791 -- --
Shares Issued in Lieu of Dividends & Distributions 52 -- -- --
Shares Redeemed (2,432) (1,912) -- --
- ---------------------------------------------------------------------------------------- ------------------------
Increase (Decrease) in Net Assets from
Class R Share Transactions 17,819 (121) -- --
- ---------------------------------------------------------------------------------------- ------------------------
Net Increase (Decrease) in Net Assets from
Share Transactions 23,238 4,530 443 276
- ---------------------------------------------------------------------------------------- ------------------------
Total Increase (Decrease) in Net Assets 30,092 10,535 353 866
- ---------------------------------------------------------------------------------------- ------------------------
NET ASSETS:
Beginning of Year 22,887 12,352 1,863 997
- ---------------------------------------------------------------------------------------- ------------------------
End of Year $ 52,979 $ 22,887 $ 2,216 $ 1,863
======================================================================================== ========================
Undistributed Net Investment Income $ -- $ -- $ -- $ --
- ---------------------------------------------------------------------------------------- ------------------------
(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.
CNI CHARTER FUNDS | PAGE 60
CORPORATE BOND GOVERNMENT
FUND (000) BOND FUND (000)
-------------------------- --------------------------
2004 2003 2004 2003
- ---------------------------------------------------------------------------------------- --------------------------
OPERATIONS:
Net Investment Income (Loss) $ 1,718 $ 1,843 $ 454 $ 506
Net Realized Gain (Loss) from
Security Transactions 302 764 116 225
Net Change in Unrealized Appreciation
(Depreciation) on Investments (967) 212 (383) (337)
- ---------------------------------------------------------------------------------------- --------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations 1,053 2,819 187 394
- ---------------------------------------------------------------------------------------- --------------------------
DIVIDENDS & DISTRIBUTIONS FROM:
Net Investment Income:
INSTITUTIONAL CLASS (1,679) (1,814) (446) (502)
CLASS A (39) (29) (4) (17)
Realized Capital Gains:
INSTITUTIONAL CLASS (412) -- (210) (20)
CLASS A (5) -- (1) (1)
CLASS R -- -- -- --
- ---------------------------------------------------------------------------------------- --------------------------
Total Dividends & Distributions (2,135) (1,843) (661) (540)
- ---------------------------------------------------------------------------------------- --------------------------
CAPITAL SHARE TRANSACTIONS:(1)
INSTITUTIONAL CLASS:
Shares Issued 16,489 11,836 9,591 6,897
Shares Issued in Lieu of Dividends & Distributions 353 327 179 111
Shares Redeemed (10,957) (11,675) (3,994) (5,779)
- ---------------------------------------------------------------------------------------- --------------------------
Increase (Decrease) in Net Assets from
Institutional Class Share Transactions 5,885 488 5,776 1,229
- ---------------------------------------------------------------------------------------- --------------------------
CLASS A:
Shares Issued 1,209 467 433 332
Shares Issued in Lieu of Dividends & Distributions 26 14 3 4
Shares Redeemed (522) (210) (15) (832)
- ---------------------------------------------------------------------------------------- --------------------------
Increase (Decrease) in Net Assets from
Class A Share Transactions 713 271 421 (496)
- ---------------------------------------------------------------------------------------- --------------------------
CLASS R:
Shares Issued -- -- -- --
Shares Issued in Lieu of Dividends & Distributions -- -- -- --
Shares Redeemed -- -- -- --
- ---------------------------------------------------------------------------------------- --------------------------
Increase (Decrease) in Net Assets from
Class R Share Transactions -- -- -- --
- ---------------------------------------------------------------------------------------- --------------------------
Net Increase (Decrease) in Net Assets from
Share Transactions 6,598 759 6,197 733
- ---------------------------------------------------------------------------------------- --------------------------
Total Increase (Decrease) in Net Assets 5,516 1,735 5,723 587
- ---------------------------------------------------------------------------------------- --------------------------
NET ASSETS:
Beginning of Year 43,086 41,351 15,614 15,027
- ---------------------------------------------------------------------------------------- --------------------------
End of Year $ 48,602 $ 43,086 $ 21,337 $ 15,614
======================================================================================== ==========================
Undistributed Net Investment Income $ -- $ -- $ -- $ --
- ---------------------------------------------------------------------------------------- --------------------------
CALIFORNIA TAX EXEMPT
BOND FUND (000)
--------------------------
2004 2003
- -----------------------------------------------------------------------------------------
OPERATIONS:
Net Investment Income $ 459 $ 437
Net Realized Gain (Loss) from
Security Transactions 38 209
Net Change in Unrealized Appreciation
(Depreciation) on Investments (112) (261)
- -----------------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations 385 385
- -----------------------------------------------------------------------------------------
DIVIDENDS & Distributions from:
Net Investment Income:
INSTITUTIONAL CLASS (425) (440)
CLASS A (34) (10)
CLASS S -- --
Realized Capital Gains:
INSTITUTIONAL CLASS (189) (275)
CLASS A (13) (3)
- -----------------------------------------------------------------------------------------
Total Dividends & Distributions (661) (728)
- -----------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
INSTITUTIONAL CLASS:
Shares Issued 7,171 2,552
Shares Issued in Lieu of Dividends & Distributions 83 84
Shares Redeemed (3,735) (3,900)
- -----------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Institutional Share Transactions 3,519 (1,264)
- -----------------------------------------------------------------------------------------
CLASS A:
Shares Issued 1,710 805
Shares Issued in Lieu of Dividends & Distributions 32 5
Shares Redeemed (35) (85)
- -----------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Class A Share Transactions 1,707 725
- -----------------------------------------------------------------------------------------
CLASS S:
Shares Issued -- --
Shares Issued in Lieu of Dividends & Distributions -- --
Shares Redeemed -- --
- -----------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets from
Class S Share Transactions -- --
- -----------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from
Share Transactions 5,226 (539)
- -----------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets 4,950 (882)
- -----------------------------------------------------------------------------------------
NET ASSETS:
Beginning of Year 15,278 16,160
- -----------------------------------------------------------------------------------------
End of Year $ 20,228 $ 15,278
=========================================================================================
Undistributed Net Investment Income/(Distributions
in Excess of Net Investment Income) $ -- $ --
- -----------------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 61
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED SEPTEMBER 30,
- --------------------------------------------------------------------------------
HIGH YIELD PRIME MONEY
BOND FUND (000) MARKET FUND (000)
-------------------------- ------------------------------
2004 2003 2004 2003
- ----------------------------------------------------------------------------------------- ------------------------------
OPERATIONS:
Net Investment Income $ 2,860 $ 1,993 $ 2,709 $ 3,295
Net Realized Gain (Loss) from
Security Transactions 570 (234) 4 77
Net Change in Unrealized Appreciation
on Investments 735 2,298 -- --
- ----------------------------------------------------------------------------------------- ------------------------------
Net Increase in Net Assets
Resulting from Operations 4,165 4,057 2,713 3,372
- ----------------------------------------------------------------------------------------- ------------------------------
DIVIDENDS & Distributions from:
Net Investment Income:
INSTITUTIONAL CLASS (1,366) (1,009) (1,845) (1,920)
CLASS A (1,480) (981) (642) (1,024)
CLASS S -- -- (233) (366)
Realized Capital Gains:
INSTITUTIONAL CLASS -- -- -- --
CLASS A -- -- -- --
- ----------------------------------------------------------------------------------------- ------------------------------
Total Dividends & Distributions (2,846) (1,990) (2,720) (3,310)
- ----------------------------------------------------------------------------------------- ------------------------------
CAPITAL SHARE TRANSACTIONS(1):
INSTITUTIONAL CLASS:
Shares Issued 9,880 3,212 1,030,373 854,421
Shares Issued in Lieu of Dividends & Distributions 736 596 375 407
Shares Redeemed (1,740) (1,489) (950,623) (858,546)
- ----------------------------------------------------------------------------------------- ------------------------------
Increase (Decrease) in Net Assets From
Institutional Share Transactions 8,876 2,319 80,125 (3,718)
- ----------------------------------------------------------------------------------------- ------------------------------
CLASS A:
Shares Issued 12,671 10,988 697,874 617,388
Shares Issued in Lieu of Dividends & Distributions 897 640 154 276
Shares Redeemed (10,513) (5,166) (702,159) (641,303)
- ----------------------------------------------------------------------------------------- ------------------------------
Increase (Decrease) in Net Assets From
Class A Share Transactions 3,055 6,462 (4,131) (23,639)
- ----------------------------------------------------------------------------------------- ------------------------------
CLASS S:
Shares Issued -- -- 460,307 381,285
Shares Issued in Lieu of Dividends & Distributions -- -- -- --
Shares Redeemed -- -- (463,168) (391,853)
- ----------------------------------------------------------------------------------------- ------------------------------
Increase (Decrease) in Net Assets from
Class S Share Transactions -- -- (2,861) (10,568)
- ----------------------------------------------------------------------------------------- ------------------------------
Net Increase (Decrease) in Net Assets from
Share Transactions 11,931 8,781 73,133 (37,925)
- ----------------------------------------------------------------------------------------- ------------------------------
Total Increase (Decrease) in Net Assets 13,250 10,848 73,126 (37,863)
- ----------------------------------------------------------------------------------------- ------------------------------
NET ASSETS:
Beginning of Year 30,265 19,417 610,902 648,765
- ----------------------------------------------------------------------------------------- ------------------------------
End of Year $ 43,515 $ 30,265 $ 684,028 $ 610,902
========================================================================================= ==============================
Undistributed Net Investment Income/(Distributions
in Excess of Net Investment Income) $ -- $ (14) $ -- $ 11
- ----------------------------------------------------------------------------------------- ------------------------------
(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.
CNI CHARTER FUNDS | PAGE 62
GOVERNMENT MONEY CALIFORNIA TAX EXEMPT
MARKET FUND (000) MONEY MARKET FUND (000)
-------------------------------- --------------------------------
2004 2003 2004 2003
- ----------------------------------------------------------------------------------------------- --------------------------------
OPERATIONS:
Net Investment Income $ 7,492 $ 11,320 $ 2,231 $ 2,993
Net Realized Gain (Loss) from
Security Transactions 6 61 177 20
Net Change in Unrealized Appreciation
(Depreciation) on Investments -- -- -- --
- ----------------------------------------------------------------------------------------------- --------------------------------
Net Increase in Net Assets
Resulting from Operations 7,498 11,381 2,408 3,013
- ----------------------------------------------------------------------------------------------- --------------------------------
DIVIDENDS & Distributions from:
Net Investment Income:
INSTITUTIONAL CLASS (293) (375) (539) (488)
CLASS A (6,772) (10,315) (1,641) (2,422)
CLASS S (427) (666) (51) (83)
Realized Capital Gains:
INSTITUTIONAL CLASS -- -- -- --
CLASS A -- -- -- --
- ----------------------------------------------------------------------------------------------- --------------------------------
Total Dividends & Distributions (7,492) (11,356) (2,231) (2,993)
- ----------------------------------------------------------------------------------------------- --------------------------------
CAPITAL SHARE TRANSACTIONS:
INSTITUTIONAL CLASS:
Shares Issued 579,828 619,561 1,066,689 724,038
Shares Issued in Lieu of Dividends & Distributions 1 -- 1 --
Shares Redeemed (593,062) (614,704) (1,075,122) (695,143)
- ----------------------------------------------------------------------------------------------- --------------------------------
Increase (Decrease) in Net Assets From
Institutional Share Transactions (13,233) 4,857 (8,432) 28,895
- ----------------------------------------------------------------------------------------------- --------------------------------
CLASS A:
Shares Issued 4,331,865 4,182,886 1,454,752 1,144,275
Shares Issued in Lieu of Dividends & Distributions 4,840 7,038 1,367 2,108
Shares Redeemed (4,539,896) (4,278,238) (1,490,415) (1,126,487)
- ----------------------------------------------------------------------------------------------- --------------------------------
Increase (Decrease) in Net Assets From
Class A Share Transactions (203,191) (88,314) (34,296) 19,896
- ----------------------------------------------------------------------------------------------- --------------------------------
CLASS S:
Shares Issued 739,765 601,546 256,655 145,218
Shares Issued in Lieu of Dividends & Distributions -- -- -- --
Shares Redeemed (668,217) (629,397) (247,146) (150,843)
- ----------------------------------------------------------------------------------------------- --------------------------------
Increase (Decrease) in Net Assets from
Class S Share Transactions 71,548 (27,851) 9,509 (5,625)
- ----------------------------------------------------------------------------------------------- --------------------------------
Net Increase (Decrease) in Net Assets from
Share Transactions (144,876) (111,308) (33,219) 43,166
- ----------------------------------------------------------------------------------------------- --------------------------------
Total Increase (Decrease) in Net Assets (144,870) (111,283) (33,042) 43,186
- ----------------------------------------------------------------------------------------------- --------------------------------
NET ASSETS:
Beginning of Year 2,309,240 2,420,523 651,004 607,818
- ----------------------------------------------------------------------------------------------- --------------------------------
End of Year $ 2,164,370 $ 2,309,240 $ 617,962 $ 651,004
=============================================================================================== ================================
Undistributed Net Investment Income/(Distributions
in Excess of Net Investment Income) $ -- $ -- $ 4 $ --
- ----------------------------------------------------------------------------------------------- --------------------------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 63
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE YEAR ENDED SEPTEMBER 30,
- --------------------------------------------------------------------------------
NET
NET REALIZED AND DISTRIBUTIONS NET NET
ASSET NET UNREALIZED DIVIDENDS FROM ASSET ASSETS
VALUE INVESTMENT GAINS (LOSSES) FROM NET RETURN REALIZED VALUE END
BEGINNING INCOME ON INVESTMENT OF CAPITAL END TOTAL OF PERIOD
OF PERIOD (LOSS) SECURITIES INCOME CAPITAL GAINS OF PERIOD RETURN++ (000)
- ---------------------------------------------------------------------------------------------------------------------------------
LARGE CAP VALUE EQUITY FUND
Institutional Class (commenced operations on January 14, 2000)
2004 $ 7.41 $ 0.08^ $ 1.36^ $(0.08) $ -- $ -- $ 8.77 19.40% $38,344
2003 6.04 0.07 1.37 (0.07) -- -- 7.41 24.03 33,016
2002 7.63 0.07 (1.47) (0.07) -- (0.12) 6.04 (18.88) 23,325
2001 10.04 0.07 (1.57) (0.07) -- (0.84) 7.63 (16.36) 27,293
2000 10.00 0.06 0.04 (0.06) -- -- 10.04 0.99 29,344
Class A (commenced operations on April 13, 2000)
2004 $ 7.41 $ 0.05^ $ 1.36^ $(0.06) $ -- $ -- $ 8.76 19.01% $ 6,281
2003 6.04 0.06 1.37 (0.06) -- -- 7.41 23.75 1,792
2002 7.62 0.05 (1.46) (0.05) -- (0.12) 6.04 (18.97) 769
2001 10.04 0.04 (1.58) (0.04) -- (0.84) 7.62 (16.68) 704
2000 9.55 0.03 0.49 (0.03) -- -- 10.04 5.48 732
- ---------------------------------------------------------------------------------------------------------------------------------
LARGE CAP GROWTH EQUITY FUND
Institutional Class (commenced operations on January 14, 2000)
2004 $ 6.37 $ 0.01^ $ 0.38^ $ --^^ $ -- $ -- $ 6.76 6.20% $25,575
2003 5.25 0.01^ 1.12^ (0.01) -- -- 6.37 21.51 22,249
2002 6.36 $ -- (1.11) -- -- -- 5.25 (17.45) 14,195
2001 9.37 (0.02) (2.99) -- -- -- 6.36 (32.12) 15,550
2000 10.00 (0.02) (0.61) -- -- -- 9.37 (6.30) 21,639
Class A (commenced operations on March 28, 2000)
2004 $ 6.32 $ (0.01)^ $ 0.38^ $ --^^ $ -- $ -- $ 6.69 5.87% $ 5,223
2003 5.21 (0.01)^ 1.12^ -- -- -- 6.32 21.31 1,965
2002 6.33 (0.02) (1.10) -- -- -- 5.21 (17.69) 798
2001 9.35 (0.03) (2.99) -- -- -- 6.33 (32.30) 636
2000 10.70 (0.01) (1.34) -- -- -- 9.35 (12.62) 592
- ---------------------------------------------------------------------------------------------------------------------------------
RCB SMALL CAP VALUE FUND
Institutional Class (commenced operations on October 3, 2001)
2004 $ 21.92 $ 0.06^ $ 5.40^ $ -- $ -- $ (0.08) $ 27.30 24.97% $ 8,955
2003 15.06 (0.04)^ 6.90^ -- -- -- 21.92 45.55 6,236
2002 17.11 (0.07) (1.98) -- -- -- 15.06 (11.98) 1,768
Class A (commenced operations on October 3, 2001)
2004 $ 21.84 $ (0.02)^ $ 5.39^ $ -- $ -- $ (0.08) $ 27.13 24.64% $ 7,551
2003 15.04 (0.08)^ 6.88^ -- -- -- 21.84 45.21 2,384
2002 17.11 (0.05) (2.02) -- -- -- 15.04 (12.10) 410
Class R (commenced operations on September 30, 1998)(2)
2004 $ 21.81 $ (0.02)^ $ 5.38^ $ -- $ -- $ (0.08) $ 27.09 24.63% $36,473
2003 15.02 (0.07)^ 6.86^ -- -- -- 21.81 45.21 14,267
2002 16.94 (0.12) (1.80) -- -- -- 15.02 (11.33) 10,174
2001* 18.84 (0.02) (1.88) -- -- -- 16.94 (10.08) 8,122
2001+ 15.80 (0.09) 3.85 -- (0.35) (0.37) 18.84 24.34 8,869
2000+ 15.93 (0.06) 0.52 -- -- (0.59) 15.80 3.28 5,193
- ---------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY GROWTH FUND
Institutional Class (commenced operations on October 3, 2000)
2004 $ 3.50 $ (0.03)^ $(0.01)^ $ -- $ -- $ -- $ 3.46 (1.14)% $ 976
2003 2.26 (0.02) 1.26 -- -- -- 3.50 54.87 913
2002 3.54 (0.03) (1.25) -- -- -- 2.26 (36.16) 565
2001 10.00 (0.02) (6.43) (0.01) -- -- 3.54 (64.56) 907
Class A (commenced operations on October 23, 2000)
2004 $ 3.48 $ (0.04)^ $(0.02)^ $ -- $ -- $ -- $ 3.42 (1.72)% $ 1,240
2003 2.25 (0.03) 1.26 -- -- -- 3.48 54.67 950
2002 3.54 (0.04) (1.25) -- -- -- 2.25 (36.44) 432
2001 10.31 (0.03) (6.73) (0.01) -- -- 3.54 (65.37) 481
RATIO
OF EXPENSES
RATIO TO AVERAGE
OF NET NET ASSETS
RATIO INVESTMENT (EXCLUDING
OF EXPENSES INCOME (LOSS) WAIVERS & PORTFOLIO
TO AVERAGE TO AVERAGE RECAPTURE TURNOVER
NET ASSETS(1) NET ASSETS(1) FEES)(1) RATE
- --------------------------------------------------------------------------------------------------------------------------
LARGE CAP VALUE EQUITY FUND
Institutional Class (commenced operations on January 14, 2000)
2004 0.97% 0.92% 0.97% 36%
2003 1.00 1.12 1.00 39
2002 1.00 0.90 1.05 42
2001 1.00 0.74 1.09 51
2000 1.00 0.87 1.12 38
Class A (commenced operations on April 13, 2000)
2004 1.22% 0.64% 1.22% 36%
2003 1.25 0.84 1.25 39
2002 1.25 0.65 1.30 42
2001 1.25 0.49 1.34 51
2000 1.25 0.62 1.37 38
- --------------------------------------------------------------------------------------------------------------------------
LARGE CAP GROWTH EQUITY FUND
Institutional Class (commenced operations on January 14, 2000)
2004 1.01% 0.10% 1.01% 50%
2003 1.05 0.16 1.03 43
2002 1.05 (0.04) 1.09 31
2001 1.05 (0.22) 1.13 58
2000 1.05 (0.31) 1.16 51
Class A (commenced operations on March 28, 2000)
2004 1.26% (0.14)% 1.26% 50%
2003 1.30 (0.09) 1.29 43
2002 1.30 (0.29) 1.34 31
2001 1.30 (0.47) 1.38 58
2000 1.30 (0.56) 1.41 51
- --------------------------------------------------------------------------------------------------------------------------
RCB SMALL CAP VALUE FUND
Institutional Class (commenced operations on October 3, 2001)
2004 1.21% 0.23% 1.20% 40%
2003 1.24 (0.20) 1.24 65
2002 1.24 (0.46) 1.28 39
Class A (commenced operations on October 3, 2001)
2004 1.49% (0.07)% 1.48% 40%
2003 1.49 (0.45) 1.49 65
2002 1.49 (0.74) 1.53 39
Class R (commenced operations on September 30, 1998)(2)
2004 1.49% (0.07)% 1.48% 40%
2003 1.49 (0.41) 1.49 65
2002 1.49 (0.70) 1.53 39
2001* 1.26 (0.51) 2.63 5
2001+ 1.49 (0.69) 2.85 43
2000+ 1.49 (0.50) 3.49 60
- --------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY GROWTH FUND
Institutional Class (commenced operations on October 3, 2000)
2004 1.20% (0.82)% 1.28% 33%
2003 1.20 (0.78) 1.36 29
2002 1.20 (0.88) 1.37 24
2001 1.20 (0.38)+++ 1.41 23
Class A (commenced operations on October 23, 2000)
2004 1.50% (1.12)% 1.58% 33%
2003 1.50 (1.08) 1.66 29
2002 1.50 (1.18) 1.67 24
2001 1.50 (1.04)+++ 1.71 23
* 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 FOR PERIODS LESS THAN ONE YEAR.
(2) ON OCTOBER 3, 2001, THE RCB SMALL 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.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 64
NET
NET REALIZED AND DISTRIBUTIONS NET NET
ASSET UNREALIZED DIVIDENDS FROM ASSET ASSETS RATIO
VALUE NET GAINS (LOSSES) FROM NET REALIZED VALUE END OF EXPENSES
BEGINNING INVESTMENT ON INVESTMENT CAPITAL END TOTAL OF PERIOD TO AVERAGE
OF PERIOD INCOME SECURITIES INCOME GAINS OF PERIOD RETURN++ (000) NET ASSETS(1)
- ----------------------------------------------------------------------------------------------------------------------------------
CORPORATE BOND FUND
Institutional Class (commenced operations on January 14, 2000)
2004 $ 10.89 $ 0.41^ $ (0.18)^ $ (0.41) $ (0.11) $ 10.60 2.15% $47,080 0.75%
2003 10.65 0.46 0.24 (0.46) -- 10.89 6.74 42,256 0.75
2002 10.72 0.53 0.09 (0.53) (0.16) 10.65 6.06 40,807 0.75
2001 10.14 0.60 0.60 (0.60) (0.02) 10.72 12.14 32,800 0.75
2000 10.00 0.42 0.14 (0.42) -- 10.14 5.76 22,711 0.75
Class A (commenced operations on April 13, 2000)
2004 $ 10.89 $ 0.37^ $ (0.16)^ $ (0.38) $ (0.11) $ 10.61 1.99% $ 1,522 1.00%
2003 10.65 0.44 0.23 (0.43) -- 10.89 6.47 830 1.00
2002 10.73 0.50 0.08 (0.50) (0.16) 10.65 5.69 544 1.00
2001 10.13 0.57 0.62 (0.57) (0.02) 10.73 12.08 93 1.00
2000 10.06 0.31 0.07 (0.31) -- 10.13 3.81 424 1.00
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GOVERNMENT BOND FUND
Institutional Class (commenced operations on January 14, 2000)
2004 $ 10.93 $ 0.25^ $ (0.17)^ $ (0.25) $ (0.14) $ 10.62 0.81% $20,901 0.70%
2003 11.02 0.36^ (0.07)^ (0.37) (0.01) 10.93 2.68* 15,596 0.70
2002 10.80 0.44 0.34 (0.44) (0.12) 11.02 7.53 14,502 0.70
2001 10.17 0.53 0.63 (0.53) -- 10.80 11.67 12,648 0.70
2000 10.00 0.38 0.17 (0.38) -- 10.17 5.64 11,233 0.70
Class A (commenced operations on April 13, 2000)
2004 $ 10.95 $ 0.23^ $ (0.17)^ $ (0.23) $ (0.14) $ 10.64 0.55% $ 436 0.95%
2003 11.01 0.33^ (0.04)^ (0.34) (0.01) 10.95 2.71* 18 0.95
2002 10.77 0.43 0.34 (0.41) (0.12) 11.01 7.47 525 0.95
2001 10.16 0.49 0.63 (0.51) -- 10.77 11.25 4 0.95
2000 10.06 0.23 0.10 (0.23) -- 10.16 3.37 49 0.95
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CALIFORNIA TAX EXEMPT BOND FUND
Institutional Class (commenced operations on January 14, 2000)
2004 $ 10.60 $ 0.27^ $ (0.06)^ $ (0.27) $ (0.13) $ 10.41 2.00% $17,789 0.50%
2003 10.83 0.31 (0.04) (0.31) (0.19) 10.60 2.63 14,546 0.50
2002 10.50 0.36 0.41 (0.35) (0.09) 10.83 7.58 16,147 0.50
2001 10.22 0.43 0.30 (0.43) (0.02) 10.50 7.21 15,526 0.50
2000 10.00 0.32 0.22 (0.32) -- 10.22 5.43 11,638 0.50
Class A (commenced operations on April 13, 2000)
2004 $ 10.62 $ 0.24^ $ (0.05)^ $ (0.24) $ (0.13) $ 10.44 1.84% $ 2,439 0.75%
2003 10.85 0.27 (0.02) (0.29) (0.19) 10.62 2.37 732 0.75
2002 10.51 0.33 0.43 (0.33) (0.09) 10.85 7.40 13 0.75
2001 10.22 0.41 0.30 (0.40) (0.02) 10.51 7.08 6 0.75
2000 10.10 0.20 0.12 (0.20) -- 10.22 3.20 1 0.75
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HIGH YIELD BOND FUND
Institutional Class (commenced operations on January 14, 2000)
2004 $ 8.95 $ 0.72^ $ 0.36^ $ (0.72) $ -- $ 9.31 12.47% $22,860 1.00%
2003 8.16 0.76 0.79 (0.76) -- 8.95 19.75 13,387 1.00
2002 8.57 0.83 (0.40) (0.84) -- 8.16 4.80 10,020 1.00
2001 9.76 0.98 (1.18) (0.98) (0.01) 8.57 (2.45) 9,310 1.00
2000 10.00 0.64 (0.24) (0.64) -- 9.76 4.21 9,877 1.00
Class A (commenced operations on January 14, 2000)
2004 $ 8.95 $ 0.70^ $ 0.35^ $ (0.69) $ -- $ 9.31 12.14% $20,655 1.30%
2003 8.16 0.74 0.78 (0.73) -- 8.95 19.39 16,878 1.30
2002 8.57 0.81 (0.40) (0.82) -- 8.16 4.49 9,397 1.30
2001 9.76 0.95 (1.18) (0.95) (0.01) 8.57 (2.74) 3,973 1.30
2000 10.00 0.62 (0.24) (0.62) -- 9.76 3.94 1,043 1.30
RATIO
OF EXPENSES
RATIO TO AVERAGE
OF NET NET ASSETS
INVESTMENT (EXCLUDING
INCOME WAIVERS & PORTFOLIO
TO AVERAGE RECAPTURE TURNOVER
NET ASSETS(1) FEES)(1) RATE
- --------------------------------------------------------------------------------------------------------
CORPORATE BOND FUND
Institutional Class (commenced operations on January 14, 2000)
2004 3.82% 0.79% 57%
2003 4.30 0.78 66
2002 5.04 0.82 55
2001 5.71+ 0.86 83
2000 6.09 0.91 6
Class A (commenced operations on April 13, 2000)
2004 3.51% 1.04% 57%
2003 4.00 1.03 66
2002 4.71 1.07 55
2001 5.67+ 1.11 83
2000 5.84 1.16 6
- --------------------------------------------------------------------------------------------------------
GOVERNMENT BOND FUND
Institutional Class (commenced operations on January 14, 2000)
2004 2.39% 0.81% 169%
2003 3.26 0.81 54
2002 4.11+ 0.86 70
2001 5.04+ 0.91 126
2000 5.49 0.97 21
Class A (commenced operations on April 13, 2000)
2004 2.14% 1.06% 169%
2003 3.00 1.06 54
2002 3.70 1.11 70
2001 5.03+ 1.16 126
2000 5.24 1.22 21
- --------------------------------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT BOND FUND
Institutional Class (commenced operations on January 14, 2000)
2004 2.55% 0.65% 51%
2003 2.91 0.65 68
2002 3.33 0.70 90
2001 4.11 0.75 56
2000 4.50 0.79 49
Class A (commenced operations on April 13, 2000)
2004 2.29% 0.90% 51%
2003 2.62 0.90 68
2002 3.05 0.95 90
2001 3.82 1.00 56
2000 4.25 1.04 49
- --------------------------------------------------------------------------------------------------------
HIGH YIELD BOND FUND
Institutional Class (commenced operations on January 14, 2000)
2004 7.87% 1.14% 35%
2003 8.84 1.13 36
2002 9.48 1.18 30
2001 10.52 1.23 12
2000 9.41 1.31 5
Class A (commenced operations on January 14, 2000)
2004 7.56% 1.44% 35%
2003 8.44 1.43 36
2002 9.03 1.48 30
2001 10.14 1.53 12
2000 9.11 1.61 5
* 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 FOR PERIODS LESS THAN ONE YEAR.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 65
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE YEAR ENDED SEPTEMBER 30, OR PERIOD ENDED OCTOBER 31,
- --------------------------------------------------------------------------------
RATIO RATIO
NET NET NET OF NET OF EXPENSES
ASSET DIVIDENDS ASSET ASSETS RATIO INVESTMENT TO AVERAGE
VALUE NET FROM NET VALUE END OF EXPENSES INCOME NET ASSETS
BEGINNING INVESTMENT INVESTMENT END TOTAL OF PERIOD TO AVERAGE TO AVERAGE (EXCLUDING
OF PERIOD INCOME INCOME OF PERIOD RETURN+++ (000) NET ASSETS(1) NET ASSETS(1) WAIVERS)(1)
- ------------------------------------------------------------------------------------------------------------------------------------
PRIME MONEY MARKET FUND
Institutional Class (commenced operations on March 23, 1998)
2004 $1.00 $0.006 $(0.006) $1.00 0.58% $ 367,209 0.63% 0.59% 0.63%
2003 1.00 0.007 (0.007) 1.00 0.68 287,087 0.63 0.68 0.64
2002 1.00 0.014 (0.014) 1.00 1.37 290,778 0.63 1.37 0.67
2001 1.00 0.046 (0.046) 1.00 4.65 304,698 0.63 4.42++ 0.71
2000* 1.00 0.051 (0.051) 1.00 5.24 201,688 0.63 5.62+ 0.71
1999 1.00 0.045 (0.045) 1.00 4.61 137,659 0.63 4.51 0.79
Class A (commenced operations on October 18, 1999)
2004 $1.00 $0.004 $(0.004) $1.00 0.36% $ 201,058 0.85% 0.35% 1.13%
2003 1.00 0.005 (0.005) 1.00 0.46 205,191 0.85 0.47 1.14
2002 1.00 0.011 (0.011) 1.00 1.15 228,807 0.85 1.15 1.17
2001 1.00 0.043 (0.043) 1.00 4.42 243,340 0.85 4.39++ 1.21
2000* 1.00 0.049 (0.049) 1.00 5.03 251,225 0.85 5.61+ 1.21
1999 1.00 0.002 (0.002) 1.00 0.18 4,942 0.85 4.62 1.30
Class S (commenced operations on October 26, 1999)
2004 $1.00 $0.002 $(0.002) $1.00 0.21% $ 115,761 1.00% 0.21% 1.13%
2003 1.00 0.003 (0.003) 1.00 0.29 118,624 1.03 0.29 1.14
2002 1.00 0.009 (0.009) 1.00 0.95 129,180 1.05 0.95 1.17
2001 1.00 0.041 (0.041) 1.00 4.21 126,281 1.05 4.12++ 1.21
2000* 1.00 0.047 (0.047) 1.00 4.83 72,287 1.05 5.47+ 1.21
1999 1.00 0.001 (0.001) 1.00 0.07 562 1.05 4.42 1.30
- ------------------------------------------------------------------------------------------------------------------------------------
GOVERNMENT MONEY MARKET FUND
Institutional Class (commenced operations on April 3, 2000)
2004 $1.00 $0.006 $(0.006) $1.00 0.57% $ 43,608 0.63% 0.56% 0.64%
2003 1.00 0.007 (0.007) 1.00 0.70 56,841 0.63 0.68 0.64
2002 1.00 0.014 (0.014) 1.00 1.38 51,985 0.63 1.43 0.66
2001 1.00 0.046 (0.046) 1.00 4.70 76,802 0.63 3.97++ 0.66
2000* 1.00 0.029 (0.029) 1.00 2.90 27,849 0.63 5.84 0.68
Class A (commenced operations on June 21, 1999)
2004 $1.00 $0.004 $(0.004) $1.00 0.35% $1,857,676 0.85% 0.35% 1.14%
2003 1.00 0.005 (0.005) 1.00 0.48 2,060,860 0.85 0.48 1.14
2002 1.00 0.012 (0.012) 1.00 1.16 2,149,151 0.85 1.18 1.16
2001 1.00 0.044 (0.044) 1.00 4.47 2,531,500 0.85 4.27++ 1.16
2000* 1.00 0.049 (0.049) 1.00 4.96 1,887,860 0.85 5.32 1.18
1999 1.00 0.016 (0.016) 1.00 1.58 1,512,137 0.85 4.33 1.15
Class S (commenced operations on October 6, 1999)
2004 $1.00 $0.002 $(0.002) $1.00 0.20% $ 263,086 1.00% 0.21% 1.14%
2003 1.00 0.003 (0.003) 1.00 0.30 191,539 1.03 0.31 1.14
2002 1.00 0.010 (0.010) 1.00 0.96 219,387 1.05 0.93 1.16
2001 1.00 0.042 (0.042) 1.00 4.26 147,035 1.05 3.62++ 1.16
2000* 1.00 0.047 (0.047) 1.00 4.77 41,593 1.05 5.39 1.18
1999 1.00 0.003 (0.003) 1.00 0.30 911 1.05 4.30 1.15
- ------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT MONEY MARKET FUND
Institutional Class (commenced operations on April 3, 2000)
2004 $1.00 $0.005 $(0.005) $1.00 0.52% $ 79,413 0.55% 0.51% 0.65%
2003 1.00 0.006 (0.006) 1.00 0.62 87,820 0.55 0.59 0.65
2002 1.00 0.010 (0.010) 1.00 0.98 58,923 0.55 0.96 0.69
2001 1.00 0.025 (0.025) 1.00 2.51 50,543 0.55 2.12++ 0.72
2000* 1.00 0.016 (0.016) 1.00 1.64 6,825 0.55 3.29 0.74
Class A (commenced operations on June 21, 1999)
2004 $1.00 $0.003 $(0.003) $1.00 0.29% $ 505,029 0.78% 0.29% 1.15%
2003 1.00 0.004 (0.004) 1.00 0.41 539,182 0.76 0.41 1.15
2002 1.00 0.007 (0.007) 1.00 0.75 519,269 0.78 0.75 1.19
2001 1.00 0.023 (0.023) 1.00 2.28 638,446 0.78 2.22++ 1.22
2000* 1.00 0.025 (0.025) 1.00 2.55 549,237 0.78 2.74 1.24
1999 1.00 0.008 (0.008) 1.00 0.79 533,244 0.78 2.17 1.21
Class S (commenced operations on November 12, 1999)
2004 $1.00 $0.002 $(0.002) $1.00 0.15% $ 33,520 0.91% 0.15% 1.15%
2003 1.00 0.003 (0.003) 1.00 0.27 24,002 0.89 0.27 1.15
2002 1.00 0.005 (0.005) 1.00 0.55 29,626 0.98 0.53 1.19
2001 1.00 0.021 (0.021) 1.00 2.08 16,851 0.98 1.96++ 1.22
2000* 1.00 0.023 (0.023) 1.00 2.30 7,723 0.98 2.69 1.24
* 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 FOR PERIODS LESS THAN ONE YEAR.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 66
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
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
U.S. generally accepted accounting principles 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 - Securities listed on a securities exchange, market or
automated quotation system for which quotations are readily available (except
for securities traded on NASDAQ) are valued at the last quoted sale price on the
primary exchange or market (foreign or domestic) on which they are traded, or,
if there is no such reported sale, at the most recent quoted bid price. For
securities traded on NASDAQ, the NASDAQ Official Closing Price will be used. If
available, debt securities are priced based upon valuations provided by
independent, third-party pricing agents. Such values generally reflect the last
reported sales price if the security is actively traded. The third-party pricing
agents may also value debt securities at an evaluated bid price by employing
methodologies that utilize actual market transactions, broker-supplied
valuations, or other methodologies designed to identify the market value for
such securities. Debt obligations with remaining maturities of sixty days or
less may be valued at their amortized cost, which approximates market value. The
prices for foreign securities are reported in local currency and converted to
U.S. dollars using currency exchange rates. Prices for most securities held in
the Funds are provided daily by recognized independent pricing agents. If a
security price cannot be obtained from an independent, third-party pricing
agent, the Funds seek to obtain a bid price from at least one independent
broker.
Securities for which market prices are not "readily available" are valued in
accordance with Fair Value Procedures established by the Funds' Board of
Directors. The Funds' Fair Value Procedures are implemented through a Fair Value
Committee (the "Committee") designated by the Funds' Board of Trustees. Some of
the more common reasons that may necessitate that a security be valued using
Fair Value Procedures include: the security's trading has been halted or
suspended; the security has been de-listed from a national exchange; the
security's primary trading market is temporarily closed at a time when under
normal conditions it would be open; or the security's primary pricing source is
not able or willing to provide a price. When a security is valued in accordance
with the Fair Value Procedures, the Committee will determine the value after
taking into consideration relevant information reasonably available to the
Committee.
For securities that principally trade on a foreign market or exchange, a
significant gap in time can exist between the time of a particular security's
last trade and the time at which a Fund calculates its net asset value. The
closing prices of such securities may no longer reflect their market value at
the time the Fund calculates net asset value if an event that could materially
affect the value of those securities (a "Significant Event") has occurred
between the time of the security's last close and the time that the Fund
calculates net asset value. A Significant Event may relate to a single issuer or
to an entire market sector. If the adviser or sub-adviser of a Fund becomes
aware of a Significant Event that has occurred with respect to a security or
group of securities after the closing of the exchange or market on which the
security or securities principally trade, but before the time at which the Fund
calculates net asset value, it may request that a Fair Value Committee meeting
be called. In addition, the Funds' administrator monitors price movements among
certain selected indices, securities and/or baskets of securities that may be an
indicator that the closing prices received earlier from foreign exchanges or
markets may not reflect market value at the time the Fund calculates net asset
value. If price
CNI CHARTER FUNDS | PAGE 67
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
movements in a monitored index or security exceed levels established by the
administrator, the administrator notifies the adviser or sub-adviser for any
Fund holding the relevant securities that such limits have been exceeded. In
such event, the adviser or sub-adviser makes the determination whether a Fair
Value Committee meeting should be called based on the information provided.
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 TBA
securities 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 September 30, 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.
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 SEI
Investments 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
CNI CHARTER FUNDS | PAGE 68
- --------------------------------------------------------------------------------
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 year
ended September 30, 2004, CNB received Share holder Servicing fees from the
Trust in the amount of $6,781,435.
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:
CNAM, a wholly owned subsidiary of CNB, serves as the Investment Manager. 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 RCB Small Cap Value Fund, 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 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 year ended September 30, 2004, the Board of Trustees approved the
reimbursement of previously waived fees by the Adviser for the prior fiscal year
in the amount of $11,180, $9,043, $13,252, $276, $142,555 and $267,053 for the
Large Cap Value Equity Fund, Large Cap Growth Equity
CNI CHARTER FUNDS | PAGE 69
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
Fund, RCB Small Cap Value Fund, Corporate Bond Fund, Prime Money Market Fund and
Government Money Market Fund, respectively.
As of September 30, 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 $ 1
Corporate Bond 42
Prime Money Market 116
Government Money Market 360
- --------------------------------------------------------------------------------
5. INVESTMENT TRANSACTIONS:
The cost of security purchases and proceeds from the sale & maturities of
securities, other than temporary investments in short-term securities for the
fiscal year ended September 30, 2004, were as follows for the Equity and Fixed
Income Funds:
Purchases Sales & Maturities
- --------------------------------------------------------------------------------
U.S. Gov`t Other U.S. Gov`t Other
Fund (000) (000) (000) (000)
- --------------------------------------------------------------------------------
Large Cap Value Equity $ -- $17,819 $ -- $14,361
Large Cap Growth Equity -- 19,572 -- 14,012
RCB Small Cap Value -- 36,276 -- 12,876
Technology Growth -- 1,148 -- 727
Corporate Bond 4,475 25,206 4,696 19,955
Government Bond 36,055 -- 30,588 --
California Tax Exempt Bond -- 13,079 -- 8,866
High Yield Bond -- 23,718 -- 12,489
- --------------------------------------------------------------------------------
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.
Increase/ Increase
(Decrease) (Decrease)
Undistributed Accumulated Decrease
Net Investment Net Realized Paid in
Income/(Loss) Gain (Loss) Capital
(000) (000) (000)
- --------------------------------------------------------------------------------
Large Cap Value Equity Fund $ (1) $ 1 $ --
RCB Small Cap Value Fund 3 (3) --
Technology Fund 23 -- (23)
Government Bond Fund (4) 4 --
California Tax Exempt
Money Market Fund 4 (4) --
- --------------------------------------------------------------------------------
The tax character of dividends and distributions declared during the years ended
September 30, 2004 and September 30, 2003 were as follows:
Tax
Exempt Ordinary Long-term
Income Income Capital Gain Total
Fund (000) (000) (000) (000)
- ---------------------------------------------------------------------------------------------
Large Cap Value Equity
2004 $ -- $ 367 $ -- $ 367
2003 -- 336 -- 336
Large Cap Growth Equity
2004 -- 17 -- 17
2003 -- 29 -- 29
RCB Small Cap Value Fund
2004 -- -- 87 87
2003 -- -- -- --
Corporate Bond
2004 -- 1,913 222 2,135
2003 -- 1,843 -- 1,843
Government Bond
2004 -- 450 211 661
2003 -- 519 21 540
California Tax Exempt Bond
2004 459 63 139 661
2003 450 60 218 728
High Yield Bond
2004 -- 2,846 -- 2,846
2003 -- 1,990 -- 1,990
Prime Money Market
2004 -- 2,720 -- 2,720
2003 -- 3,310 -- 3,310
Government Money Market
2004 -- 7,492 -- 7,492
2003 -- 11,356 -- 11,356
California Tax Exempt Money Market
2004 2,227 4 -- 2,231
2003 2,993 -- -- 2,993
CNI CHARTER FUNDS | PAGE 70
- --------------------------------------------------------------------------------
As of September 30, 2004, 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 $ -- $ 98 $1,562 $ -- $ -- $ 9,216
Large Cap Growth Equity -- 3 -- (4,768) (17) 573
RCB Small Cap Value -- 329 1,713 -- -- 9,794
Technology Growth -- -- -- (1,379) (268) (210)
Corporate Bond -- 144 302 -- -- 1,097
Government Bond -- 46 120 -- -- 62
California Tax Exempt Bond 41 -- 34 -- -- 346
High Yield Bond -- 262 -- (1,087) -- 1,550
Prime Money Market -- 477 -- (403) -- --
Government Money Market -- 1,380 -- -- -- --
California Tax Exempt Money Market 333 -- 174 -- -- --
Other Total
Temporary Distributable Earnings
Differences (Accumulated Losses)
Fund (000) (000)
- --------------------------------------------------------------------------
Large Cap Value Equity $ (98) $ 10,778
Large Cap Growth Equity -- (4,209)
RCB Small Cap Value -- 11,836
Technology Growth -- (1,857)
Corporate Bond (144) 1,399
Government Bond (46) 182
California Tax Exempt Bond (41) 380
High Yield Bond (262) 463
Prime Money Market (477) (403)
Government Money Market (1,378) 2
California Tax Exempt Money Market (329) 178
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,
2004, the breakdown of capital loss carryforwards is as follows:
Expiring September 30,
------------------------------------------------
2008 2010 2011 2012
Fund (000) (000) (000) (000)
- --------------------------------------------------------------------------------
Large Cap Growth Equity $ 8 $3,244 $1,516 $ --
Technology Growth -- 392 658 329
High Yield Bond -- 155 932 --
Prime Money Market -- 403 -- --
- --------------------------------------------------------------------------------
During the year ended September 30, 2004, the following funds had utilized
capital loss carryforwards to offset capital gains amounting to:
Amount
Fund (000)
- --------------------------------------------------------------------------------
Large Cap Value Equity $333
Large Cap Growth Equity 4
High Yield Bond 326
Prime Money Market 4
Government Money Market 3
- --------------------------------------------------------------------------------
Post-October losses represent losses realized on investments and foreign
currency transactions from November 1, 2003 through September 30, 2004 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 September 30, 2004 for each of the Equity and
Fixed Income Funds were as follows:
Net Unrealized
Federal Appreciation
Tax Cost Appreciation Depreciation (Depreciation)
Fund (000) (000) (000) (000)
- ------------------------------------------------------------------------------------------
Large Cap Value Equity $35,553 $ 9,995 $ (779) $ 9,216
Large Cap Growth Equity 30,179 2,878 (2,305) 573
RCB Small Cap Value 42,740 10,440 (646) 9,794
Technology Growth 2,429 235 (445) (210)
Corporate Bond 46,887 1,283 (186) 1,097
Government Bond 21,040 130 (68) 62
California Tax Exempt Bond 20,068 372 (26) 346
High Yield Bond 41,519 2,348 (798) 1,550
- ------------------------------------------------------------------------------------------
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 71
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
8. CAPITAL SHARES ISSUED AND REDEEMED:
Capital share activity for the years ended September 30, 2004 and 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 862 1,481 1,122 1,559 191 201 70 148
Shares Issued in Lieu of
Dividends and Distributions 9 11 1 2 1 -- -- --
Shares Redeemed (951) (899) (832) (774) (148) (34) (49) (137)
- ------------------------------------------------------------ -------------------- ----------------- ---------------------
Net Institutional
Class Transactions (80) 593 291 787 44 167 21 11
============================================================ ==================== ================= =====================
CLASS A:
Shares Issued 555 136 573 172 269 90 160 82
Shares Issued in Lieu of
Dividends and Distributions 2 1 -- -- 1 -- -- --
Shares Redeemed (82) (23) (104) (14) (101) (8) (70) (1)
- ------------------------------------------------------------ -------------------- ----------------- ---------------------
Net Class A Transactions 475 114 469 158 169 82 90 81
============================================================ ==================== ================= =====================
CLASS R:
Shares Issued -- -- -- -- 784 92 -- --
Shares Issued in Lieu of
Dividends and Distributions -- -- -- -- 2 -- -- --
Shares Redeemed -- -- -- -- (94) (115) -- --
- ------------------------------------------------------------ -------------------- ----------------- ---------------------
Net Class R Transactions -- -- -- -- 692 (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 1,552 1,107 900 630 690 242 1,068 373
Shares Issued in Lieu of
Dividends and Distributions 33 30 17 10 8 8 80 69
Shares Redeemed (1,026) (1,088) (375) (528) (362) (369) (188) (174)
- ------------------------------------------------------------ -------------------- ----------------- ---------------------
Net Institutional
Class Transactions 559 49 542 112 336 (119) 960 268
============================================================ ==================== ================= =====================
CLASS A:
Shares Issued 114 43 40 30 165 75 1,376 1,266
Shares Issued in Lieu of
Dividends and Distributions 2 1 -- -- 3 1 98 74
Shares Redeemed (49) (19) (1) (76) (3) (8) (1,141) (606)
- ------------------------------------------------------------ -------------------- ----------------- ---------------------
Net Class A Transactions 67 25 39 (46) 165 68 333 734
============================================================ ==================== ================= =====================
AMOUNTS DESIGNATED AS "--" ARE EITHER 0 OR HAVE BEEN ROUNDED TO 0.
CNI CHARTER FUNDS | PAGE 72
- --------------------------------------------------------------------------------
CALIFORNIA
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 1,030,373 854,421 579,828 619,561 1,066,689 724,038
Shares Issued in Lieu of
Dividends and Distributions 375 407 1 -- 1 --
Shares Redeemed (950,623) (858,546) (593,062) (614,704) (1,075,122) (695,143)
- ---------------------------------------------------------------- -------------------------- --------------------------
Net Institutional
Class Transactions 80,125 (3,718) (13,233) 4,857 (8,432) 28,895
================================================================ ========================== ==========================
CLASS A:
Shares Issued 697,874 617,388 4,331,865 4,182,886 1,454,752 1,144,275
Shares Issued in Lieu of
Dividends and Distributions 154 276 4,840 7,038 1,367 2,108
Shares Redeemed (702,159) (641,303) (4,539,896) (4,278,238) (1,490,415) (1,126,487)
- ---------------------------------------------------------------- -------------------------- --------------------------
Net Class A Transactions (4,131) (23,639) (203,191) (88,314) (34,296) 19,896
================================================================ ========================== ==========================
CLASS S:
Shares Issued 460,307 381,285 739,765 601,546 256,655 145,218
Shares Issued in Lieu of
Dividends and Distributions -- -- -- -- -- --
Shares Redeemed (463,168) (391,853) (668,217) (629,397) (247,146) (150,843)
- ---------------------------------------------------------------- -------------------------- --------------------------
Net Class S Transactions (2,861) (10,568) 71,548 (27,851) 9,509 (5,625)
================================================================ ========================== ==========================
AMOUNTS DESIGNATED AS "--" ARE EITHER 0 OR HAVE BEEN ROUNDED TO 0.
CNI CHARTER FUNDS | PAGE 73
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
CNI CHARTER FUNDS:
We have audited the accompanying statements of net assets of the CNI Charter
Funds, comprised of the Large Cap Value Equity Fund, the Large Cap Growth Equity
Fund, the RCB Small Cap Value Fund, the Technology Growth Fund, the Corporate
Bond Fund, the Government Bond Fund, the California Tax Exempt Bond Fund, the
High Yield Bond Fund, the Prime Money Market Fund, the Government Money Market
Fund, and the California Tax Exempt Money Market Fund (collectively, "the
Funds") as of September 30, 2004, and the related statements of operations for
the year then ended, the statements of changes in net assets for each of the
years in the two-year period then ended, and the financial highlights for each
of the years or periods indicated herein. These financial statements and
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and the
financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of September 30, 2004, by correspondence with the custodian,
brokers and other appropriate audit procedures. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the aforementioned Funds of the CNI Charter Funds as of September 30, 2004,
the results of their operations, the changes in their net assets, and their
financial highlights for the periods indicated herein, in conformity with
accounting principles generally accepted in the United States of America.
/s/ KPMG LLP
NOVEMBER 18, 2004
LOS ANGELES, CALIFORNIA
CNI CHARTER FUNDS | PAGE 74
BOARD MEMBERS AND OFFICERS (UNAUDITED)
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
Information pertaining to the Trustees and Officers of the Trust is set forth
below. Trustees who are not deemed to be "interested persons" of the Trust as
defined in the 1940 Act are referred to as "Independent Board Members." Trustees
who are deemed to be "interested persons" of the Trust are referred to as
"Interested Board Members."
- ------------------------------------------------------------------------------------------------------------------------------------
TERM OF NUMBER OF
OFFICE PORTFOLIOS IN
AND CNI CHARTER OTHER
NAME POSITION(S) LENGTH OF FUNDS COMPLEX DIRECTORSHIPS
ADDRESS, HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY
AND AGE(1) TRUST SERVED(2) DURING PAST FIVE YEARS BOARD MEMBER(3) TRUSTEE(4)
- ------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT
BOARD MEMBERS
Irwin G. Barnet Trustee Since 1999 Attorney and partner at Reed Smith LLP, a law firm
Age: 66 (January 2003-present); attorney and a principal of 11 None
Crosby, Heafey, Roach & May, a law firm
(September 2000-December 2002); attorney and
principal of Sanders, Barnet, Goldman, Simons & Mosk,
a law firm prior to September, 2000.
- ------------------------------------------------------------------------------------------------------------------------------------
Victor Meschures Trustee Since 1999 Certified Public Accountant with Meschures, 11 None
Age: 66 Campeas, Thompson, Snyder and Pariser, LLP,
an accounting firm.
- ------------------------------------------------------------------------------------------------------------------------------------
William R. Sweet Trustee Since 1999 Retired. 11 Director, Banner
Age: 67 Central Finance
. Company; Director,
Hispanic Express,
Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
James R. Wolford Trustee Since 1999 Chief Financial Officer, DBM Group (August 2001- 11 None
Age: 50 present); Senior Vice President and Chief Operating
Officer, Forecast Commercial Real Estate Service, Inc.
(January 2000-August 2001); Senior Vice President and
Chief Financial Officer, Bixby Ranch Company, a real
estate company (1985-2000).
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICERS
Timothy D. Barto Vice President Since 2000 Employed by SEI Investments since October N/A N/A
One Freedom and Assistant 1999. Vice President and Assistant Secretary
Valley Drive Secretary of the Administrator. Vice President and
Oaks, PA 19456 Assistant Secretary of the Distributor
Age: 36 (1999-2004).
- ------------------------------------------------------------------------------------------------------------------------------------
Lydia A. Gavalis Vice President Since 1999 Vice President and Assistant Secretary of the N/A N/A
One Freedom and Assistant Administrator since 1998. Vice President and
Valley Drive Secretary Assistant Secretary of the Distributor
Oaks, PA 19456 (1998-2004).
Age: 40
- ------------------------------------------------------------------------------------------------------------------------------------
Vernon C. Kozlen President Since 2000 Chairman, City National Asset Management, N/A N/A
City National Bank and Chief Inc. (2001-Present); Executive
400 N. Roxbury Dr. Executive Vice President, City National Bank
Beverly Hills, CA Officer (1996-Present).
90210
Age: 60
- ------------------------------------------------------------------------------------------------------------------------------------
Christine M. Vice President Since 2000 Employed by SEI Investments since November N/A N/A
McCullough and Assistant 1999. Vice President and Assistant Secretary
One Freedom Secretary of the Administrator since December 1999.
Valley Drive Vice President and Assistant Secretary of the
Oaks, PA 19456 Distributor (1999-2004).
Age: 43
- ------------------------------------------------------------------------------------------------------------------------------------
CNI CHARTER FUNDS | PAGE 75
BOARD MEMBERS AND OFFICERS (UNAUDITED)
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
Information pertaining to the Trustees and Officers of the Trust is set forth
below. Trustees who are not deemed to be "interested persons" of the Trust as
defined in the 1940 Act are referred to as "Independent Board Members." Trustees
who are deemed to be "interested persons" of the Trust are referred to as
"Interested Board Members." The Trust's Statement of Additional Information
("SAI") includes additional information about the Board Members and Officers.
The SAI may be obtained without charge by calling 1-800-708-8881.
- ------------------------------------------------------------------------------------------------------------------------------------
TERM OF NUMBER OF
OFFICE PORTFOLIOS IN
AND CNI CHARTER OTHER
NAME POSITION(S) LENGTH OF FUNDS COMPLEX DIRECTORSHIPS
ADDRESS, HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY
AND AGE(1) TRUST SERVED(2) DURING PAST FIVE YEARS BOARD MEMBER(3) TRUSTEE(4)
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICERS
Rodney J. Olea Vice President Since 2000 Senior Vice President, City National Asset N/A N/A
City National Bank Management, Inc. (2001-Present); Senior Vice
400 N. Roxbury Dr. President and Director of Fixed Income of
Beverly Hills, CA City National Bank (1994-Present).
90210
Age: 39
- ------------------------------------------------------------------------------------------------------------------------------------
Richard A. Weiss Vice President Since 2000 President, City National Asset Management, N/A N/A
City National Bank and Assistant Inc. (2001-Present); Executive Vice President and
400 N. Roxbury Dr., Secretary Chief Investment Officer of City National
Beverly Hills, CA Bank (1999-Present).
90210
Age: 44
- ------------------------------------------------------------------------------------------------------------------------------------
Peter A. Rodriguez Controller and Since 2003 Director, Funds Accounting, SEI Investments N/A N/A
One Freedom Chief Global Funds Services (1997-Present);
Valley Drive Operating Vice President, Fund Administration,
Oaks, PA 19456 Officer BlackRock Financial Management
Age: 42 (April 2002 to September 2002)
- ------------------------
(1) Each trustee may be contacted by writing to the Trustee c/o CNI Charter
Funds, One Freedom Valley Drive, Oaks, PA 19456.
(2) Each trustee shall hold office during the lifetime of this Trust until he
or she dies, resigns, is declared bankrupt or incompetent by a court of
appropriate jurisdiction, or is removed, or, if sooner, until the next
meeting of shareholders called for the purpose of electing trustees and
until the election and qualification of his or her successor in accordance
with the Trust's Declaration of Trust. The president, treasurer and
secretary shall hold office until their respective successors are chosen
or qualified, or until their removal or resignation, or in each case until
he or she sooner dies, resigns, is removed, or becomes disqualified in
accordance with the Trust's by-laws.
(3) The "CNI Charter Funds Complex" consists of all registered investment
companies for which City National Asset Management, Inc. serves as
investment adviser. As of September 30, 2004, the CNI Charter Funds
Complex consisted of 11 Funds.
(4) Directorships of companies required to report to the Securities and
Exchange Commission under the Securities Exchange Act of 1934 (i.e.,
"public companies") or other investment companies registered under the
1940 Act.
CNI CHARTER FUNDS | PAGE 76
NOTICE TO SHAREHOLDERS (UNAUDITED)
SEPTEMBER 30, 2004
- --------------------------------------------------------------------------------
For shareholders that do not have a September 30, 2004 taxable year end, this
notice is for informational purposes only. For shareholders with a September 30,
2004 taxable year end, please consult your tax advisor as to the pertinence of
this notice.
For California income tax purposes, for the fiscal year ended September 30,
2004, California Tax Exempt Bond Fund and California Tax Exempt Money Market
Fund designate 84.11% and 100%, respectively, of their distributions paid from
net investment income as exempt-interest dividends under Section 17145 of the
California Revenue and Taxation Code.
For Federal income tax purposes, for the fiscal year ended September 30, 2004
each Fund is designating the following items with regard to distributions paid
during the year:
(C)** (D)***
DIVIDENDS QUALIFYING
(A)* (B)* QUALIFYING DIVIDEND
LONG TERM ORDINARY FOR CORPORATE INCOME
CAPITAL GAIN INCOME TAX EXEMPT TOTAL DIVIDENDS REC. (15% RATE
DISTRIBUTIONS DISTRIBUTIONS INTEREST DISTRIBUTIONS DEDUCTION FOR QDI)
- --------------------------------------------------------------------------------------------------------------------------------
Large Cap Value
Equity Fund 0% 100% 0% 100% 100% 100%
Large Cap Growth
Equity Fund 0% 100% 0% 100% 100% 100%
RCB Small Cap
Value Fund 100% 0% 0% 100% 0% 0%
Technology Growth
Fund 0% 0% 0% 0% 0% 0%
Corporate Bond
Fund 10% 90% 0% 100% 0% 0%
Government Bond
Fund 32% 68% 0% 100% 0% 0%
California Tax Exempt
Bond Fund 21% 10% 69% 100% 0% 0%
High Yield Bond Fund 0% 100% 0% 100% 0% 0%
Prime Money Market
Fund 0% 100% 0% 100% 0% 0%
Government Money
Market Fund 0% 100% 0% 100% 0% 0%
California Tax Exempt
Money Market Fund 0% 0% 100% 100% 0% 0%
- --------------------------------------------------------------------------------------------------------------------------------
* Items (A) and (B) are based on the percentage of each fund's total
distribution.
** Item (C) is based on the percentage of ordinary income distributions of
each fund. Qualifying dividends represent dividends which qualify for the
corporate dividends received deduction.
*** The percentage in Item (D) represents the amount of "Qualifying Dividend
Income" as created by the Jobs and Growth Tax Relief Reconciliation Act of
2003. It is the intention of each of the aforementioned funds to designate
the maximum amount permitted by the law.
CNI CHARTER FUNDS | PAGE 77
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
- --------------------------------------------------------------------------------
All mutual funds have operating expenses. As a shareholder of the fund, your
investment is affected by these ongoing costs, which include (among others)
costs for portfolio management, administrative services, and shareholder reports
like this one. It is important for you to understand the impact of these costs
on your investment returns.
Operating expenses such as these are deducted from the fund's gross income and
directly reduce your final investment return. These expenses are expressed as a
percentage of the fund's average net assets; this percentage is known as the
fund's expense ratio.
The following examples use the expense ratio and are intended to help you
understand the ongoing costs (in dollars) of investing in your fund and to
compare these costs with those of other mutual funds. The examples are based on
an investment of $1,000 made at the beginning of the period shown and held for
the entire period.
The table below illustrates your fund's costs in two ways:
ACTUAL FUND RETURN. This section helps you to estimate the actual expenses that
your fund incurred over the period. The "Expenses Paid During Period" column
shows the actual dollar expense cost incurred by a $1,000 investment in the
fund, and the "Ending Account Value" number is derived from deducting that
expense cost from the fund's gross investment return.
You can use this information, together with the actual amount you invested in
the fund, to estimate the expenses you paid over that period. Simply divide your
actual account value by $1,000 to arrive at a ratio (for example, an $8,600
account value divided by $1,000 = $8.6), then multiply that ratio by the number
shown for your fund under "Expenses Paid During Period."
HYPOTHETICAL 5% RETURN. This section helps you compare your fund's costs with
those of other mutual funds. It assumes that the fund had an annual 5% return
before expenses during the year, but that the expense ratio (Column 3) for the
period is unchanged. This example is useful in making comparisons because the
Securities and Exchange Commission requires all mutual funds to make this 5%
calculation. You can assess your fund's comparative cost by comparing the
hypothetical result for your fund in the "Expense Paid During Period" column
with those that appear in the same charts in the shareholder reports for other
funds.
NOTE: Because the return is set at 5% for comparison purposes - NOT your fund's
actual return - the account values shown do not apply to your specific
investment.
BEGINNING ENDING EXPENSE
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
3/31/04 9/30/04 RATIOS PERIOD*
- --------------------------------------------------------------------------------
LARGE CAP VALUE FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,013.60 1.00% $ 5.03
Class A 1,000.00 1,011.30 1.25 6.29
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,020.00 1.00% $ 5.05
Class A 1,000.00 1,018.75 1.25 6.31
- --------------------------------------------------------------------------------
LARGE CAP GROWTH FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Class $1,000.00 $ 968.50 1.02% $ 5.02
Class A 1,000.00 966.80 1.26 6.20
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,019.90 1.02% $ 5.15
Class A 1,000.00 1,018.70 1.26 6.36
CNI CHARTER FUNDS | PAGE 78
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
- --------------------------------------------------------------------------------
BEGINNING ENDING EXPENSE
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
3/31/04 9/30/04 RATIOS PERIOD*
- --------------------------------------------------------------------------------
RCB SMALL CAP VALUE
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,043.20 1.24% $ 6.33
Class A 1,000.00 1,042.30 1.49 7.61
Class R 1,000.00 1,041.90 1.49 7.61
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,018.80 1.24% $ 6.26
Class A 1,000.00 1,017.55 1.49 7.52
Class R 1,000.00 1,017.55 1.49 7.52
- --------------------------------------------------------------------------------
TECHNOLOGY FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Class $1,000.00 $ 887.20 1.20% $ 5.66
Class A 1,000.00 886.00 1.50 7.07
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,019.00 1.20% $ 6.06
Class A 1,000.00 1,017.50 1.50 7.57
- --------------------------------------------------------------------------------
CORPORATE BOND FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Class $1,000.00 $ 997.00 0.75% $ 3.74
Class A 1,000.00 996.70 1.00 4.99
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,021.25 0.75% $ 3.79
Class A 1,000.00 1,020.00 1.00 5.05
- --------------------------------------------------------------------------------
GOVERNMENT BOND FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,000.00 0.70% $ 3.50
Class A 1,000.00 997.80 0.95 4.74
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,021.50 0.70% $ 3.54
Class A 1,000.00 1,020.25 0.95 4.80
- --------------------------------------------------------------------------------
CALIFORNIA TAX-EXEMPT BOND FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,006.10 0.50% $ 2.51
Class A 1,000.00 1,004.80 0.75 3.76
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,022.50 0.50% $ 2.53
Class A 1,000.00 1,021.25 0.75 3.79
- --------------------------------------------------------------------------------
BEGINNING ENDING EXPENSE
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
3/31/04 9/30/04 RATIOS PERIOD*
- --------------------------------------------------------------------------------
HIGH YIELD BOND FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,043.50 1.00% $ 5.11
Class A 1,000.00 1,041.90 1.30 6.64
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,020.00 1.00% $ 5.05
Class A 1,000.00 1,018.50 1.30 6.56
- --------------------------------------------------------------------------------
PRIME MONEY MARKET FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,003.40 0.63% $ 3.16
Class A 1,000.00 1,002.30 0.85 4.25
Class S 1,000.00 1,001.40 1.03 5.15
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,021.85 0.63% $ 3.18
Class A 1,000.00 1,020.75 0.85 4.29
Class S 1,000.00 1,019.85 1.03 5.20
- --------------------------------------------------------------------------------
GOVERNMENT MONEY MARKET FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,003.40 0.63% $ 3.16
Class A 1,000.00 1,002.30 0.85 4.25
Class S 1,000.00 1,001.40 1.02 5.10
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,021.85 0.63% $ 3.18
Class A 1,000.00 1,020.75 0.85 4.29
Class S 1,000.00 1,019.90 1.02 5.15
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT MONEY MARKET FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,002.90 0.55% $ 2.75
Class A 1,000.00 1,001.70 0.78 3.90
Class S 1,000.00 1,000.90 0.94 4.70
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,022.25 0.55% $ 2.78
Class A 1,000.00 1,021.10 0.78 3.94
Class S 1,000.00 1,020.30 0.94 4.75
- --------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized expense ratio multiplied by
the average account value over the period, multiplied by 183/366 (to
reflect one-half year period).
CNI CHARTER FUNDS | PAGE 79
ADDITIONAL DISCLOSURE (UNAUDITED)
Beginning on the fiscal quarter ended December 31, 2004, the Funds will file its
complete schedule of portfolio holdings with the Securities and Exchange
Commission for the first and third quarters of each fiscal year on Form N-Q
within sixty days after the end of the period. The Funds' Forms N-Q will be
available on the Commission's website at http://www.sec.gov, and may be reviewed
and copied at the Commission's Public Reference Room in Washington, DC.
Information on the operation of the Public Reference Room may be obtained by
calling 1-800-SEC-0330.
A description of the policies and procedures that the Funds use to determine how
to vote proxies relating to the Funds' portfolio securities, and information on
how the Funds voted proxies relating to portfolio securities during the 12-month
period ended June 30, 2004 is 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.
CNI CHARTER FUNDS | PAGE 80
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 OMITTED]
For more information on CNI Charter Funds, including charges and expenses,
please call 1-888-889-0799 for a free prospectus.
Read it carefully before you invest or send money.
CNI CHARTER FUNDS(SM) [GRAPHIC OMITTED](R)
CNI-AR-001-0300
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer and principal
accounting officer.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a)(1) The registrant's board of trustees has determined that the registrant has
at least one audit committee financial expert serving on the audit committee.
(a)(2) The audit committee financial experts are William R. Sweet and James R.
Wolford. Messrs. Sweet and Wolford are independent as defined in Form N-CSR Item
3(a)(2).
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Fees billed by KPMG LLP Related to the Trust
KPMG LLP billed the Trust aggregate fees for services rendered to the Trust for
the last two fiscal years as follows:
- ------------------ ----------------------------------------------------- -----------------------------------------------------
2004 2003
- ------------------ ----------------------------------------------------- -----------------------------------------------------
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
All fees and All fees and All other fees All fees and All fees and All other fees
services to the services to and services to services to the services to and services to
Trust that were service service Trust that were service service
pre-approved affiliates that affiliates that pre-approved affiliates that affiliates that
were did not require were did not require
pre-approved pre-approval pre-approved pre-approval
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(a) Audit $211,500 N/A N/A $191,000 N/A N/A
Fees(1)
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(b) Audit- $0 N/A N/A $0 N/A N/A
Related
Fees
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(c) Tax Fees $46,200 N/A N/A $35,200 N/A N/A
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(d) All N/A N/A N/A $0 N/A N/A
Other
Fees
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
Notes:
(1) Audit fees include amounts related to the audit of the registrant's
annual financial statements and services normally provided by the
accountant in connection with statutory and regulatory filings.
(e)(1) Not Applicable
(e)(2) Percentage of fees billed applicable to non-audit services pursuant to
waiver of pre-approval requirement were as follows:
---------------------------- ----------------- ----------------
2004 2003
---------------------------- ----------------- ----------------
Audit-Related Fees N/A N/A
---------------------------- ----------------- ----------------
Tax Fees N/A N/A
---------------------------- ----------------- ----------------
All Other Fees N/A N/A
---------------------------- ----------------- ----------------
(f) Not Applicable
(g) The aggregate non-audit fees and services billed by KPMG LLP for the last
two fiscal years were $46,200 and $35,200 for 2004 and 2003, respectively.
(h) Not Applicable
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to open-end management investment companies.
ITEM 6. SCHEDULE OF INVESTMENTS
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to open-end management investment companies.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not applicable. Effective for closed-end management investment companies for
fiscal years ending on or after December 31, 2005
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT COMPANY AND
AFFILIATED PURCHASERS.
Not applicable to open-end management investment companies.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
CNI Charter Funds (the "Fund") has adopted the following procedures by which
shareholders may recommend nominees to the Fund's Board of Trustees. The Fund
has a Nominating Committee comprised solely of persons who are not considered
"interested persons" of the Fund within the meaning of the Investment Company
Act of 1940. The Committee periodically reviews such issues as the Board's
composition, responsibilities, committees, compensation and other relevant
issues, and recommends any appropriate changes to the full Board of Trustees.
While the Committee normally is able to identify from its own resources an ample
number of qualified candidates, it will consider shareholder suggestions of
persons to be considered as nominees to fill future vacancies on the Board, so
long as the shareholder or shareholder group submitting a proposed nominee: (a)
beneficially owns more than 5% of the Fund's voting shares and has held such
shares continuously for two years, and (b) is not an adverse holder. No eligible
shareholder or shareholder group may submit more than one independent Board
member nominee each year. Such suggestions must be sent in writing to the Fund's
Secretary, and must be accompanied by the shareholder's contact information, the
nominee's contact information and number of Fund shares owned by the nominee,
all information regarding the nominee that would be required to be disclosed in
solicitations or proxies for elections of directors required under the
Securities Exchange Act of 1934, and a notarized letter from the nominee stating
his or her intention to serve as a nominee and be named in the Fund's proxy
statement, if so designated by the Committee and the Board of Trustees.
ITEM 11. 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 12. EXHIBITS.
(a)(1) Code of Ethics attached hereto.
(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 November 24, 2004
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 November 24, 2004
By (Signature and Title)* /s/ Peter A. Rodriguez
--------------------------------------
Peter A. Rodriguez, Controller and COO
Date November 24, 2004
* Print the name and title of each signing officer under his or her signature.