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 811-0793
CNI CHARTER FUNDS
(Exact name of registrant as specified in charter)
--------
400 North Roxbury Drive
Beverly Hills, CA 90210
(Address of principal executive offices) (Zip code)
SEI Investments Distributors
1 Freedom Valley Drive
Oaks, PA 19456
(Name and address of agent for service)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 1-888-889-0799
DATE OF FISCAL YEAR END: SEPTEMBER 30, 2006
DATE OF REPORTING PERIOD: MARCH 31, 2006
ITEM 1. REPORTS TO STOCKHOLDERS.
[GRAPHIC OMITTED]
Investment Manager:
CITY NATIONAL ASSET MANAGEMENT, INC.
CNI CHARTER FUNDS
SEMI-ANNUAL REPORT
[GRAPHIC OMITTED]
March 31, 2006
[GRAPHIC OMITTED]
Large Cap Value Equity Fund
Large Cap Growth Equity Fund
RCB Small Cap Value Fund
Technology Growth Fund
Corporate Bond Fund
Government Bond Fund
California Tax Exempt Bond Fund
High Yield Bond Fund
Prime Money Market Fund
Government Money Market Fund
California Tax Exempt Money Market Fund
[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.
TABLE OF CONTENTS
CNI CHARTER FUNDS SEMI-ANNUAL REPORT
02 Letter to Our Shareholders
04 Equity Funds Investment Adviser's Report
05 Fixed Income Funds Investment Adviser's Report
06 Statements of Net Assets
51 Statements of Operations
54 Statements of Changes in Net Assets
58 Financial Highlights
61 Notes to Financial Statements
68 Disclosure of Fund Expenses
70 Approval of Investment Advisory Agreements
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The Funds file their 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' Form N-Q is
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. The most current Form N-Q is also available on the
Fund's website at www.cnicharterfunds.com and without charge, upon request, by
calling 1-888-889-0799.
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 most
recent 12-month period ending June 30 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 1
LETTER TO OUR SHAREHOLDERS
MARCH 31, 2006
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We are pleased to provide you with the CNI Charter Funds Semi-Annual Report for
the six months ended March 31, 2006, a period in which global economic growth
continued to accelerate producing solid gains for stockholders, but lackluster
returns to bondholders as interest rates rose.
The underlying investment philosophy of the CNI Charter Funds is to pursue the
long-term goals and objectives specified for each of the Funds without being
swayed by short-term trends and fads. All Funds are managed with an active yet
disciplined style that seeks to achieve competitive rates of return consistent
with their respective, prescribed risk parameters. City National Asset
Management, Inc., as Investment Manager to the Funds, utilizes in-depth research
that takes advantage of the most advanced investment technology, fundamental
valuation, and quantitative tools to determine the most attractive sectors and
securities within each Fund's area of concentration. This approach has served
shareholders well overall during the complex economic, financial, and
geopolitical environment we encountered in the period ending March 31, 2006.
SIX-MONTH MARKET WATCH:
OCTOBER 2005 - MARCH 2006
The six months ended March 31 witnessed an extension of the global rebound in
equities with all of the major domestic and international stock indices rising.
(Please refer to table that follows.) Fixed income securities, as measured by
the Lehman Aggregate Index, however continued to lag, given the upward trend in
interest rates over this period.
- --------------------------------------------------------------------------------
Six-Month October 2005 -
Index Watch: March 2006
EQUITIES:
S&P500 Stock Index: .............................................. + 6.4%
Dow Jones Industrials:............................................ + 6.4%
NASDAQ: .......................................................... + 8.7%
EAFE: ............................................................ +13.9%
BONDS:
Lehman Aggregate Bond Index: ..................................... - 0.1%
- --------------------------------------------------------------------------------
The economic recovery remained intact, but began to show signs of slowing,
especially towards the end of the period, as there was clear evidence of
deceleration in many segments of the U.S economy. Combining these economic
elements with rising interest rates and a resumption of oil price increases
foreshadows a rise in domestic inflation and an accompanying slowdown in
corporate profits throughout the year.
The Federal Open Market Committee has remained true to its stated "measured
pace" of interest rate hikes throughout the last six months, but is likely to be
at, or near, the end of that cycle.
The major foreign economies (and their associated equity markets) have been the
real stars over the last six months, highlighting once again, the wisdom of
international diversification. As is typically true in global economic cycles,
the U.S. has been in the lead throughout. Thus, as we pass the growth peak in
this rebound domestically, the major foreign economies, which have lagged our
own for the past few years, are still accelerating. Corporate profit growth
overseas is likely to continue to outpace domestic growth this year and, while
we approach the end of this interest rate cycle, other nations are likely to
begin to increase rates later this year. Generally speaking, this will put
pressure on the value of the U.S. Dollar as economic growth and interest rate
differentials shift to favor foreign currencies.
CNI CHARTER FUNDS | PAGE 2
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SIX-MONTH WATCH: CNI CHARTER FUNDS PERFORMANCE
(ALL RETURNS LISTED BELOW ARE FOR INSTITUTIONAL CLASS SHARES)
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.
All of the equity-oriented Funds showed strong returns during the six-month
period, as one might expect, given the strong momentum in stocks. Leading the
pack was the 8.8% gain in the TECHNOLOGY GROWTH FUND. Following close behind was
the 8.6% return to the LARGE CAP VALUE EQUITY FUND. THE LARGE CAP GROWTH EQUITY
FUND rose 3.3%, while the RCB SMALL CAP VALUE FUND gained 2.8% during the
six-month period.
Returns to the four bond-oriented Funds were mixed as might be expected in a
rising interest rate environment. The HIGH YIELD BOND FUND rose 3.6% for the
period, while GOVERNMENT BOND FUND and CALIFORNIA TAX EXEMPT BOND FUND returned
0.1% and 0.4%, respectively. The CORPORATE BOND FUND lost 0.1%, as investment
grade bonds generally underperformed during the period.
Finally, all three Money Market Funds continued to turn in competitive yields
for the six months ending March 31, 2006, ranging from 1.8% for the PRIME MONEY
MARKET FUND and GOVERNMENT MONEY MARKET FUND down to 1.2% for the CALIFORNIA TAX
EXEMPT MONEY MARKET FUND.
The following pages contain important information and details on the assets and
financial condition of the Funds. Please read them carefully and if you have any
questions about this report or the CNI Charter Funds, please call your
investment professional or contact us at (888) 889-0799.
Thank you for choosing CNI Charter Funds.
Sincerely,
/s/ Richard A. Weiss
---------------------
Richard A.Weiss
PRESIDENT
CITY NATIONAL ASSET MANAGEMENT, INC.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. CERTAIN SHAREHOLDERS MAY BE
SUBJECT TO THE ALTERNATIVE MINIMUM TAX (AMT). FEDERAL INCOME TAX RULES APPLY TO
ANY CAPITAL GAIN DISTRIBUTIONS.
FUND EXPENSES HAVE BEEN WAIVED DURING THE PERIOD ON WHICH THE PERFORMANCE IS
BASED. WITHOUT WAIVERS, PERFORMANCE WOULD BE LOWER.
THIS INFORMATION MUST BE PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS. PLEASE
READ THE PROSPECTUS CAREFULLY BEFORE INVESTING.
INVESTING IN MUTUAL FUNDS INVOLVES RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
IN ADDITIONAL TO THE NORMAL RISKS ASSOCIATED WITH INVESTING, INVESTMENTS IN
SMALLER COMPANIES TYPICALLY EXHIBIT HIGHER VOLATILITY, AND PRODUCTS OF COMPANIES
IN WHICH TECHNOLOGY FUNDS INVEST MAY BE SUBJECT TO SEVERE COMPETITION AND RAPID
OBSOLES-CENCE. AN INVESTMENT IN THE FUNDS IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
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*NOT FDIC INSURED *NO BANK GUARANTEE *MAY LOSE VALUE
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CNI CHARTER FUNDS WELCOMES THE AHA INVESTMENT FUNDS
- --------------------------------------------------------------------------------
On October 3, 2005, CNI Charter Funds expanded their offering by merging the AHA
Investment Funds into the CNI Charter Funds family.
Endorsed by the American Hospital Association, the five AHA Investment Funds
encourage healthy behavior by having guidelines that prohibit investment in any
tobacco-related securities.
The five AHA Funds joining the CNI Charter Fund family are:
[ ] AHA Limited Maturity Fixed Income Fund
[ ] AHA Full Maturity Fixed Income Fund
[ ] AHA Balanced Fund
[ ] AHA Diversified Equity Fund
[ ] AHA Socially Responsible Equity Fund
These new Funds join the existing family of eleven CNI Charter Funds to provide
an unwavering commitment to client satisfaction and quality investments that
help successful individuals, families and businesses achieve their financial
goals.
For more information about the CNI Charter Funds (including the AHA Investment
Funds) visit cnicharterfunds.com.
- --------------------------------------------------------------------------------
CNI CHARTER FUNDS | PAGE 3
INVESTMENT ADVISER'S REPORT
MARCH 31, 2006
- --------------------------------------------------------------------------------
EQUITY FUNDS
The equity market, as measured by the S&P 500, returned 6.38% over the six
months ending March 31, 2006. Investors started out jittery in October 2005, as
the Federal Reserve indicated that rising interest rates were not ending anytime
soon. In addition, investors were concerned about corporate earnings growth as
early earnings reports came out mixed. By the end of October, third quarter 2005
GDP numbers provided strong indications that the economy was continuing to grow.
Earnings growth ultimately produced strong numbers above expectations, over the
next two reporting periods. From the end of October through March 2006, the
market has sustained a persistent upward trend in asset prices.
During this time period, small and mid cap stocks outperformed large cap stocks
with returns of 13.27% and 11.22%, respectively (as measured by the S&P SmallCap
600 and S&P MidCap 400). Value indices outperformed growth indices with the S&P
SmallCap 600/Citigroup Value index gaining 15.97%.
All of the CNI Charter equity funds produced positive returns over this six
month period. ALL RETURNS FOR CNI CHARTER FUNDS STATED BELOW ARE FOR
INSTITUTIONAL CLASS SHARES:
o The TECHNOLOGY GROWTH FUND returned 8.76%. This performance beat the
Russell 3000 Technology Index of 8.25%, but trailed the Lipper Science
& Technology Funds Objective return of 11.99%.
o The LARGE CAP VALUE EQUITY FUND returned 8.61%. This performance
trailed the S&P 500/Citigroup Value Index return of 8.99%, but
outperformed the Lipper Large Cap Value Funds Classification return of
6.28%.
o The LARGE CAP GROWTH EQUITY FUND returned 3.33%. This performance
trailed the S&P 500/Citigroup Growth Index return of 3.91% and the
Lipper Large Cap Growth Funds Classification return of 6.35%.
o The RCB SMALL CAP VALUE FUND returned 2.78%. This performance trailed
the Russell 2000 Value Index return of 14.26% and the Lipper Small Cap
Value Funds Classification of 11.68%.
LOOKING FORWARD
The economy is expected to continue growing, but at a slower pace. Commodity
price increases continue to cause concern. Investors are hoping the Federal
Reserve is near the end of its interest rate hikes. With respect to stock
prices, corporate earnings always remain the key. If the Fed is at the end of
their interest rate hikes, this should provide a boost to the equity
markets. Additionally, if commodity prices can trend lower from their recent
highs, this should provide added relief to consumers and corporations alike. We
remain optimistic regarding the equity market's future prospects.
The CNI Charter Equity Funds continue to provide a disciplined investment
approach with the constant goal of achieving superior investment results.
Sincerely,
/s/ Brian L. Garbe
- ------------------
Brian L. Garbe
DIRECTOR OF RESEARCH
CITY NATIONAL ASSET MANAGEMENT, INC.
CNI CHARTER FUNDS | PAGE 4
INVESTMENT ADVISER'S REPORT
MARCH 31, 2006
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FIXED INCOME FUNDS
The six-month period ending March 31, 2006 witnessed declines in bond prices as
interest rates moved higher across the maturity spectrum. This weakness in bond
prices was mainly due to a resilient U.S. economy and the continuation of
tighter monetary policy. As of this writing, the Federal Open Market Committee
("FOMC") raised interest rates at each meeting since June 2004, a total of 15
times. The Federal Reserve ("Fed") is widely expected to raise rates at the May
FOMC meeting and quite possibly the June meeting as well. After that, the
futures market isn't predicting any more rate hikes at this time. The Fed has
indicated more hikes will be dependent on the economic data. While the weakness
in bond prices this most recent quarter is a struggle for bond investors, our
bond funds have been positioned for this type of market.
STRATEGIC OUTLOOK FOR BOND FUNDS
In light of the economic landscape and Fed activities, we are maintaining our
slightly defensive maturity posture for all our bond funds for the immediate
future.
Strategically, in the CORPORATE BOND FUND, we remain concerned about interest
rate volatility and continue to maintain an underweight in the ten year area of
the yield curve, which has been pressured by increasing inflation
expectations. We also remain concerned about corporate credit quality and are
maintaining an average credit quality that is higher than the Lehman
Intermediate Corporate Index.
The GOVERNMENT BOND FUND continues to benefit from attractive yields offered by
agency securities and also maintains a defensive maturity profile.
The CALIFORNIA TAX EXEMPT BOND FUND, similar to our taxable funds, maintains a
defensive maturity and credit profile. This positioning should continue to be
rewarded, given an environment of higher volatility.
Even though this economic expansion cycle is maturing, the HIGHYIELD BOND FUND
continued to benefit from historically narrow yield spreads. This Fund retains
its strategic posture of excellent sector allocation as well as a quality bias
versus its competitors.
STRATEGIC OUTLOOK FOR MONEY MARKET FUNDS
The conservative portfolio posture of the Funds has been rewarded as the Fed
continued to tighten monetary policy. As the Fed shifts to a more data-dependent
stance, we may extend the maturity profile of the Funds not only to take
advantage of attractive money market rates but also to protect against
potentially declining rates in the future.
Sincerely,
/s/ Rodney J. Olea
- ------------------
Rodney J. Olea
DIRECTOR OF FIXED INCOME
CITY NATIONAL ASSET MANAGEMENT, INC.
CNI CHARTER FUNDS | PAGE 5
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
LARGE CAP VALUE EQUITY FUND
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
SECTOR WEIGHTINGS*:
31.4% Financials
15.1% Industrials
9.3% Information Technology
8.5% Consumer Discretionary
8.1% Energy
6.4% Telecommunications
5.5% Utilities
4.9% Materials
4.7% Consumer Staples
4.1% Healthcare
2.0% Short-Term Investments
* Percentages based on total investments
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCK [97.9%]
AEROSPACE & DEFENSE [4.1%]
Honeywell International 21,200 $ 907
Lockheed Martin 9,800 736
Northrop Grumman 12,500 854
Raytheon 15,200 697
United Technologies 17,500 1,014
-----------------------------------------------------------------------------
TOTAL AEROSPACE & DEFENSE 4,208
=============================================================================
AIR FREIGHT & LOGISTICS [1.7%]
FedEx 6,800 768
Ryder System 9,300 416
United Parcel Service, Cl B 6,600 524
-----------------------------------------------------------------------------
TOTAL AIR FREIGHT & LOGISTICS 1,708
=============================================================================
AUTO COMPONENTS [0.5%]
Johnson Controls 6,800 516
=============================================================================
BEVERAGES [1.3%]
Coca-Cola 27,100 1,135
Coca-Cola Enterprises 12,100 246
-----------------------------------------------------------------------------
TOTAL BEVERAGES 1,381
=============================================================================
CAPITAL MARKETS [7.9%]
Bank of New York 29,800 1,074
Goldman Sachs Group 11,200 1,758
Lehman Brothers Holdings 7,500 1,084
Mellon Financial 11,800 420
Merrill Lynch 21,800 1,717
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
Morgan Stanley 27,000 $ 1,696
State Street 5,200 314
-----------------------------------------------------------------------------
TOTAL CAPITAL MARKETS 8,063
=============================================================================
CHEMICAL [2.9%]
Air Products & Chemicals 5,500 370
Dow Chemical 25,700 1,043
EI Du Pont de Nemours 22,100 933
PPG Industries 9,900 627
-----------------------------------------------------------------------------
TOTAL CHEMICAL 2,973
=============================================================================
COMMERCIAL BANKS [10.1%]
Bank of America 70,396 3,206
BB&T 14,100 553
Comerica 7,100 411
Keycorp 10,400 383
National City 16,100 562
PNC Financial Services Group 6,800 458
SunTrust Banks 6,300 458
Wachovia 35,700 2,001
Wells Fargo 36,730 2,346
-----------------------------------------------------------------------------
TOTAL COMMERCIAL BANKS 10,378
=============================================================================
COMMERCIAL SERVICES & SUPPLIES [1.4%]
Cendant 23,300 404
RR Donnelley & Sons 18,000 589
Waste Management 11,600 410
-----------------------------------------------------------------------------
TOTAL COMMERCIAL SERVICES & SUPPLIES 1,403
=============================================================================
COMMUNICATIONS EQUIPMENT [2.2%]
Corning* 22,400 603
Motorola 10,000 229
Nokia, ADR* 27,000 560
Qualcomm 9,800 496
Tellabs* 23,800 378
-----------------------------------------------------------------------------
TOTAL COMMUNICATIONS EQUIPMENT 2,266
=============================================================================
COMPUTERS & PERIPHERALS [3.1%]
Apple Computer* 7,300 458
Hewlett-Packard 68,700 2,260
IBM 5,300 437
-----------------------------------------------------------------------------
TOTAL COMPUTERS & PERIPHERALS 3,155
=============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 6
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
LARGE CAP VALUE EQUITY FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
CONSUMER FINANCE [0.2%]
Capital One Financial 3,000 $ 242
=============================================================================
DIVERSIFIED FINANCIAL SERVICES [3.9%]
CIT Group 14,500 776
Citigroup 67,786 3,202
-----------------------------------------------------------------------------
TOTAL DIVERSIFIED FINANCIAL SERVICES 3,978
=============================================================================
DIVERSIFIED TELECOMMUNICATION SERVICES [2.1%]
Verizon Communications 62,009 2,112
=============================================================================
ELECTRIC UTILITIES [3.6%]
Edison International 13,900 572
Entergy 3,500 241
FirstEnergy 15,700 768
FPL Group 17,300 695
PG&E 19,600 763
PPL 22,700 667
-----------------------------------------------------------------------------
TOTAL ELECTRIC UTILITIES 3,706
=============================================================================
ELECTRONIC EQUIPMENT & INSTRUMENTS [0.4%]
Jabil Circuit* 9,100 390
=============================================================================
FOOD & STAPLES RETAILING [2.0%]
Costco Wholesale 13,100 709
CVS 10,400 311
Kroger* 19,300 393
Safeway 16,000 402
Supervalu 8,000 247
-----------------------------------------------------------------------------
TOTAL FOOD & STAPLES RETAILING 2,062
=============================================================================
FOOD PRODUCTS [0.9%]
Archer-Daniels-Midland 16,900 568
Sara Lee 20,900 374
-----------------------------------------------------------------------------
TOTAL FOOD PRODUCTS 942
=============================================================================
HEALTH CARE EQUIPMENT & SUPPLIES [0.5%]
PerkinElmer 23,700 556
=============================================================================
HEALTH CARE PROVIDERS & SERVICES [2.2%]
Aetna 14,400 708
Cigna 4,500 588
HCA 10,300 472
McKesson 9,200 479
-----------------------------------------------------------------------------
TOTAL HEALTH CARE PROVIDERS & SERVICES 2,247
=============================================================================
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
HOTELS RESTAURANTS & LEISURE [0.5%]
McDonald's 14,200 $ 488
=============================================================================
HOUSEHOLD DURABLES [0.6%]
KB Home 4,600 299
Newell Rubbermaid 11,800 297
-----------------------------------------------------------------------------
TOTAL HOUSEHOLD DURABLES 596
=============================================================================
INDEPENDENT POWER PRODUCER/
ENERGY TRADER [0.7%]
Constellation Energy Group 13,400 733
=============================================================================
INDUSTRIAL CONGLOMERATES [3.0%]
General Electric 52,500 1,826
Tyco International 45,600 1,226
-----------------------------------------------------------------------------
TOTAL INDUSTRIAL CONGLOMERATES 3,052
=============================================================================
INSURANCE [7.7%]
ACE, ADR 13,000 676
Aflac 11,900 537
Allstate 14,200 740
American International Group 25,100 1,659
Chubb 8,300 792
Hartford Financial Services
Group 12,300 991
Lincoln National 6,400 350
Metlife 11,500 556
Prudential Financial 9,700 735
St Paul Travelers 20,200 844
-----------------------------------------------------------------------------
TOTAL INSURANCE 7,880
=============================================================================
IT SERVICES [1.1%]
Affiliated Computer Services,
Cl A* 8,000 477
Electronic Data Systems 13,900 373
First Data 5,500 258
-----------------------------------------------------------------------------
TOTAL IT SERVICES 1,108
=============================================================================
LEISURE EQUIPMENT & PRODUCTS [0.6%]
Brunswick 6,500 253
Mattel 18,500 335
-----------------------------------------------------------------------------
TOTAL LEISURE EQUIPMENT & PRODUCTS 588
=============================================================================
MACHINERY [2.6%]
Caterpillar 11,500 826
Danaher 7,000 445
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 7
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
LARGE CAP VALUE EQUITY FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
Deere 7,400 $ 585
Illinois Tool Works 3,500 337
Ingersoll-Rand, Cl A 11,800 493
-----------------------------------------------------------------------------
TOTAL MACHINERY 2,686
=============================================================================
MEDIA [4.7%]
CBS 25,750 618
Comcast, Cl A* 34,800 910
News Corp., Cl A 25,000 415
Time Warner 50,800 853
Viacom* 14,650 569
Walt Disney* 51,600 1,439
-----------------------------------------------------------------------------
TOTAL MEDIA 4,804
=============================================================================
METALS & MINING [1.3%]
Alcoa 31,300 956
Phelps Dodge 5,200 419
-----------------------------------------------------------------------------
TOTAL METALS & MINING 1,375
=============================================================================
MULTI-UTILITIES & UNREGULATED POWER [1.2%]
Dominion Resources 11,700 808
Sempra Energy 8,600 399
-----------------------------------------------------------------------------
TOTAL MULTI-UTILITIES & UNREGULATED POWER 1,207
=============================================================================
MULTILINE RETAIL [0.5%]
JC Penney 8,000 483
=============================================================================
OFFICE ELECTRONICS [0.6%]
Xerox* 43,500 661
=============================================================================
OIL & GAS [8.0%]
Amerada Hess 2,600 370
Chevron 28,040 1,626
ConocoPhillips 31,380 1,982
Exxon Mobil 37,600 2,288
Marathon Oil 14,800 1,127
Occidental Petroleum 9,200 852
-----------------------------------------------------------------------------
TOTAL OIL & GAS 8,245
=============================================================================
PAPER & FOREST PRODUCTS [0.6%]
Weyerhaeuser 9,200 666
=============================================================================
PERSONAL PRODUCTS [0.5%]
Alberto-Culver 10,500 464
=============================================================================
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
PHARMACEUTICALS [1.4%]
Abbott Laboratories 16,000 $ 679
Bristol-Myers Squibb 29,400 724
-----------------------------------------------------------------------------
TOTAL PHARMACEUTICALS 1,403
=============================================================================
ROAD & RAIL [2.4%]
Burlington Northern Santa Fe 8,900 742
CSX 12,600 754
Norfolk Southern 17,800 962
-----------------------------------------------------------------------------
TOTAL ROAD & RAIL 2,458
=============================================================================
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT [1.9%]
Applied Materials 15,700 275
Freescale Semiconductor* 13,000 361
Intel 50,150 970
Texas Instruments 11,000 357
-----------------------------------------------------------------------------
TOTAL SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT 1,963
=============================================================================
SPECIALTY RETAIL [0.8%]
Gap 26,500 495
Staples 11,250 287
-----------------------------------------------------------------------------
TOTAL SPECIALTY RETAIL 782
=============================================================================
TELEPHONES & TELECOMMUNICATIONS [3.0%]
AT&T 55,200 1,493
BellSouth 45,900 1,590
-----------------------------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATIONS 3,083
=============================================================================
TEXTILES, APPAREL & LUXURY GOODS [0.4%]
Jones Apparel Group 11,200 396
=============================================================================
THRIFTS & MORTGAGE FINANCE [1.5%]
Fannie Mae 8,600 442
Washington Mutual 26,200 1,117
-----------------------------------------------------------------------------
TOTAL THRIFTS & MORTGAGE FINANCE 1,559
=============================================================================
WIRELESS TELECOMMUNICATION SERVICES [1.3%]
Alltel 10,600 686
Sprint-Nextel 24,300 628
-----------------------------------------------------------------------------
TOTAL WIRELESS TELECOMMUNICATION SERVICES 1,314
=============================================================================
TOTAL COMMON STOCK
(Cost $85,785) 100,280
=======================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 8
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
LARGE CAP VALUE EQUITY FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
CASH EQUIVALENTS [2.0%]
Fidelity Institutional Domestic
Money Market Portfolio,
Cl I, 4.59%(1) 2,017,049 $ 2,017
SEI Daily Income Trust,
Prime Obligation Fund,
Cl A, 4.66%(1) 24,590 25
-----------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(Cost $2,042) 2,042
=======================================================================
TOTAL INVESTMENTS [99.9%]
(Cost $87,827) 102,322
=======================================================================
OTHER ASSETS AND LIABILITIES -- [0.1%]
Income Distributions Payable (122)
Investment Advisory Fees Payable (54)
Payable for Fund Shares Redeemed (42)
Shareholder Servicing & Distribution
Fees Payable (24)
Administration Fees Payable (5)
Other Assets and Liabilities, Net 313
-----------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES 66
=======================================================================
NET ASSETS -- [100.0%] $ 102,388
=============================================================================
NET ASSETS:
Paid-in-Capital (unlimited authorization --
$0.01 par value) $ 84,740
Accumulated net realized gain on investments 3,153
Unrealized appreciation on investments 14,495
-----------------------------------------------------------------------------
NET ASSETS $ 102,388
=============================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($89,883,433 / 9,084,046 shares) $ 9.89
=============================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($12,504,810 / 1,265,530 shares) $ 9.88
=============================================================================
* NON-INCOME PRODUCING SECURITY
(1) RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF MARCH 31, 2006.
ADR -- AMERICAN DEPOSITARY RECEIPT
CL -- CLASS
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 9
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
LARGE CAP GROWTH EQUITY FUND
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
SECTOR WEIGHTINGS*:
21.4% Information Technology
21.0% Healthcare
13.4% Consumer Staples
12.0% Consumer Discretionary
11.1% Energy
9.8% Financials
7.6% Industrials
2.1% Short-Term Investments
0.8% Materials
0.5% Utilities
0.3% Telecommunications
* Percentages based on total investments
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCK [97.9%]
AEROSPACE & DEFENSE [0.5%]
L-3 Communications Holdings 2,500 $ 214
=============================================================================
AIR FREIGHT & LOGISTICS [1.0%]
United Parcel Service, Cl B 5,700 452
=============================================================================
BEVERAGES [2.8%]
Coca-Cola 9,800 411
Constellation Brands, Cl A* 6,000 150
Pepsi Bottling Group 5,700 173
PepsiCo 9,900 572
-----------------------------------------------------------------------------
TOTAL BEVERAGES 1,306
=============================================================================
BIOTECHNOLOGY [4.4%]
Amgen* 14,300 1,040
Genzyme-General Division* 6,500 437
Gilead Sciences* 9,100 566
-----------------------------------------------------------------------------
TOTAL BIOTECHNOLOGY 2,043
=============================================================================
BUILDING PRODUCTS [0.2%]
American Standard 2,700 116
=============================================================================
CAPITAL MARKETS [2.8%]
Federated Investors 3,100 121
Lehman Brothers Holdings 2,400 347
State Street 5,400 326
Synovus Financial 8,300 225
T Rowe Price Group 3,500 274
-----------------------------------------------------------------------------
TOTAL CAPITAL MARKETS 1,293
=============================================================================
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
CHEMICALS [0.8%]
Ecolab 4,400 $ 168
Praxair 4,100 226
-----------------------------------------------------------------------------
TOTAL CHEMICALS 394
=============================================================================
COMMERCIAL SERVICES & SUPPLIES [0.9%]
Cendant 8,300 144
Equifax 7,000 261
-----------------------------------------------------------------------------
TOTAL COMMERCIAL SERVICES & SUPPLIES 405
=============================================================================
COMMUNICATIONS EQUIPMENT [3.2%]
Cisco Systems* 29,250 634
Qualcomm 17,000 860
-----------------------------------------------------------------------------
TOTAL COMMUNICATIONS EQUIPMENT 1,494
=============================================================================
COMPUTERS & PERIPHERALS [5.2%]
Apple Computer* 8,100 508
Dell* 28,165 838
IBM 9,000 742
Network Appliance* 9,500 343
-----------------------------------------------------------------------------
TOTAL COMPUTERS & PERIPHERALS 2,431
=============================================================================
CONSUMER FINANCE [1.6%]
Capital One Financial 5,200 419
SLM 6,400 332
-----------------------------------------------------------------------------
TOTAL CONSUMER FINANCE 751
=============================================================================
DIVERSIFIED CONSUMER SERVICES [1.0%]
Apollo Group, Cl A* 4,400 231
H&R Block 10,800 234
-----------------------------------------------------------------------------
TOTAL DIVERSIFIED CONSUMER SERVICES 465
=============================================================================
ELECTRIC UTILITIES [0.5%]
TXU 5,200 233
=============================================================================
ENERGY EQUIPMENT & SERVICES [4.3%]
BJ Services 5,400 187
Halliburton 9,500 694
Nabors Industries* 2,800 200
Schlumberger 5,700 721
Transocean* 2,700 217
-----------------------------------------------------------------------------
TOTAL ENERGY EQUIPMENT & SERVICES 2,019
=============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 10
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
LARGE CAP GROWTH EQUITY FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
FOOD & STAPLES RETAILING [3.1%]
Sysco 16,100 $ 516
Wal-Mart Stores 19,375 915
-----------------------------------------------------------------------------
TOTAL FOOD & STAPLES RETAILING 1,431
=============================================================================
FOOD PRODUCTS [1.5%]
Campbell Soup 6,700 217
General Mills 4,300 218
Kellogg 6,200 273
-----------------------------------------------------------------------------
TOTAL FOOD PRODUCTS 708
=============================================================================
HEALTH CARE EQUIPMENT & SUPPLIES [5.9%]
Bard (C.R.) 3,200 217
Baxter International 3,800 148
Biomet 10,900 387
Boston Scientific* 8,400 194
Medtronic 9,400 477
St. Jude Medical* 8,100 332
Stryker 7,600 337
Thermo Electron* 7,100 263
Zimmer Holdings* 6,200 419
-----------------------------------------------------------------------------
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 2,774
=============================================================================
HEALTH CARE PROVIDERS & SERVICES [4.0%]
Coventry Health Care* 4,200 227
Health Management Associates,
Cl A 12,200 263
IMS Health 7,500 193
Quest Diagnostics 5,400 277
UnitedHealth Group 15,800 883
-----------------------------------------------------------------------------
TOTAL HEALTH CARE PROVIDERS & SERVICES 1,843
=============================================================================
HOTELS, RESTAURANTS & LEISURE [2.2%]
Carnival 6,600 313
Starbucks* 9,500 358
Yum! Brands 7,400 361
-----------------------------------------------------------------------------
TOTAL HOTELS, RESTAURANTS & LEISURE 1,032
=============================================================================
HOUSEHOLD PRODUCTS [5.5%]
Colgate-Palmolive 10,100 577
Procter & Gamble 29,602 1,706
Clorox 4,400 263
-----------------------------------------------------------------------------
TOTAL HOUSEHOLD PRODUCTS 2,546
=============================================================================
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES [4.0%]
3M 7,400 $ 560
General Electric 37,875 1,317
-----------------------------------------------------------------------------
TOTAL INDUSTRIAL CONGLOMERATES 1,877
=============================================================================
INSURANCE [3.5%]
Aflac 6,600 298
American International Group 11,500 760
Progressive 2,000 208
Prudential Financial 4,800 364
-----------------------------------------------------------------------------
TOTAL INSURANCE 1,630
=============================================================================
INTERNET & CATALOG RETAIL [1.3%]
eBay* 15,300 598
=============================================================================
INTERNET SOFTWARE & SERVICES [0.6%]
Yahoo!* 8,800 284
=============================================================================
IT SERVICES [1.8%]
Affiliated Computer Services,
Cl A* 3,100 185
First Data 9,400 440
Paychex 4,800 200
-----------------------------------------------------------------------------
TOTAL IT SERVICES 825
=============================================================================
MACHINERY [1.0%]
Danaher 7,600 483
=============================================================================
MEDIA [2.0%]
Comcast* 8,100 212
Dow Jones 7,500 295
EW Scripps 4,900 219
Time Warner 13,100 220
-----------------------------------------------------------------------------
TOTAL MEDIA 946
=============================================================================
MULTILINE RETAIL [2.3%]
Kohl's* 7,700 408
Sears Holdings* 1,900 252
Target 7,500 390
-----------------------------------------------------------------------------
TOTAL MULTILINE RETAIL 1,050
=============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 11
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
LARGE CAP GROWTH EQUITY FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
OIL & GAS [6.8%]
Chevron 3,800 $ 220
Exxon Mobil 35,100 2,136
Sunoco 4,200 326
XTO Energy 11,300 493
-----------------------------------------------------------------------------
TOTAL OIL & GAS 3,175
=============================================================================
PERSONAL PRODUCTS [0.6%]
Avon Products 8,600 268
=============================================================================
PHARMACEUTICALS [6.8%]
Abbott Laboratories 8,395 356
Allergan 3,700 401
Forest Laboratories* 7,700 344
Johnson & Johnson 23,264 1,378
Wyeth 13,850 672
-----------------------------------------------------------------------------
TOTAL PHARMACEUTICALS 3,151
=============================================================================
REAL ESTATE [0.4%]
Simon Property Group 2,400 202
=============================================================================
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT [4.0%]
Broadcom, Cl A* 11,850 511
Intel 40,150 777
Texas Instruments 17,800 578
-----------------------------------------------------------------------------
TOTAL SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT 1,866
=============================================================================
SOFTWARE [5.3%]
Electronic Arts* 3,600 197
Microsoft 42,730 1,163
Oracle* 49,260 674
Symantec* 24,900 419
-----------------------------------------------------------------------------
TOTAL SOFTWARE 2,453
=============================================================================
SPECIALTY RETAIL [3.8%]
Best Buy 3,500 196
Home Depot 18,300 774
Lowe's 8,800 567
TJX 8,600 213
-----------------------------------------------------------------------------
TOTAL SPECIALTY RETAIL 1,750
=============================================================================
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS [0.7%]
Coach* 9,600 $ 332
==============================================================================
THRIFTS & MORTGAGE FINANCE [1.4%]
Countrywide Financial 8,600 316
Golden West Financial 5,300 360
-----------------------------------------------------------------------------
TOTAL THRIFTS & MORTGAGE FINANCE 676
=============================================================================
WIRELESS TELECOMMUNICATION SERVICES [0.2%]
Sprint-Nextel 4,309 111
=============================================================================
TOTAL COMMON STOCK
(Cost $41,515) 45,627
=======================================================================
CASH EQUIVALENTS [2.1%]
Fidelity Institutional Domestic
Money Market Portfolio,
Cl I, 4.59%(1) 986,192 986
SEI Daily Income Trust,
Prime Obligation Fund,
Cl A, 4.66%(1) 13,658 14
-----------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(Cost $1,000) 1,000
=======================================================================
TOTAL INVESTMENTS [100.0%]
(Cost $42,515) 46,627
=======================================================================
OTHER ASSETS AND LIABILITIES -- [0.0%]
Payable for Fund Shares Redeemed (40)
Investment Advisory Fees Payable (26)
Shareholder Servicing & Distribution
Fees Payable (12)
Income Distributions Payable (10)
Administration Fees Payable (2)
Other Assets and Liabilities, Net 109
-----------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES 19
=======================================================================
NET ASSETS -- [100.0%] $ 46,646
=============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 12
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
LARGE CAP GROWTH EQUITY FUND (CONCLUDED)
DESCRIPTION VALUE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Paid-in-Capital (unlimited authorization --
$0.01 par value) $ 46,019
Distributions in excess of net
investment income (1)
Accumulated net realized loss on investments (3,484)
Unrealized appreciation on investments 4,112
-----------------------------------------------------------------------------
NET ASSETS $ 46,646
=============================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($36,320,226 / 4,734,741 shares) $ 7.67
=============================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($10,325,807 / 1,359,906 shares) $ 7.59
=============================================================================
* NON-INCOME PRODUCING SECURITY
(1) RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF MARCH 31, 2006.
CL -- CLASS
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 13
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
RCB SMALL CAP VALUE FUND
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
SECTOR WEIGHTINGS*:
30.5% Consumer Discretionary
21.8% Financials
21.7% Industrials
6.9% Short-Term Investments
5.0% Consumer Staples
3.5% Corporate Bonds
3.2% Information Technology
2.9% Utilities
2.3% Energy
2.2% Materials
* Percentages based on total investments
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCK [91.4%]
BROADCASTING & CABLE [9.6%]
Cox Radio* 172,950 $ 2,321
Cumulus Media* 163,050 1,836
Emmis Communications* 134,200 2,147
Fisher Communications* 35,700 1,598
-----------------------------------------------------------------------------
TOTAL BROADCASTING & CABLE 7,902
=============================================================================
COMMERCIAL SERVICES [10.2%]
Adesa 105,200 2,813
Coinstar* 65,600 1,700
SIRVA* 214,100 1,826
Watson Wyatt 62,500 2,036
-----------------------------------------------------------------------------
TOTAL COMMERCIAL SERVICES 8,375
=============================================================================
DIVERSIFIED MANUFACTURING [2.5%]
Jacuzzi Brands* 206,100 2,026
=============================================================================
DIVERSIFIED METALS & MINING [2.2%]
Compass Minerals International 71,300 1,782
=============================================================================
UTILITIES [2.9%]
Sierra Pacific Resources* 174,000 2,403
=============================================================================
ENERGY EQUIPMENT & SERVICES [2.3%]
Hanover Compressor* 103,300 1,923
=============================================================================
ENTERTAINMENT [6.1%]
Lodgenet Entertainment* 320,000 4,986
=============================================================================
FOOD, BEVERAGE & TOBACCO [2.9%]
Ralcorp Holdings* 62,400 2,374
=============================================================================
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS [2.2%]
Central Garden & Pet* 33,900 $ 1,801
=============================================================================
INSURANCE [22.9%]
Alleghany* 12,219 3,537
Conseco* 140,000 3,475
Fairfax Financial Holdings 12,100 1,297
Hilb Rogal & Hobbs 42,500 1,752
Montpelier Re Holdings 91,550 1,492
Odyssey Re Holdings 65,100 1,413
USI Holdings* 130,800 2,110
White Mountains Insurance
Group 6,200 3,686
-----------------------------------------------------------------------------
TOTAL INSURANCE 18,762
=============================================================================
MACHINERY [6.2%]
EnPro Industries* 53,000 1,818
Franklin Electric 29,400 1,607
IDEX 31,800 1,659
-----------------------------------------------------------------------------
TOTAL MACHINERY 5,084
=============================================================================
PREPACKAGING SOFTWARE [3.3%]
PLATO Learning* 280,200 2,659
=============================================================================
PRINTING & PUBLISHING [6.0%]
Advo 60,000 1,920
Dow Jones 75,250 2,957
-----------------------------------------------------------------------------
TOTAL PRINTING & PUBLISHING 4,877
=============================================================================
RETAIL [6.7%]
IHOP 33,170 1,590
Triarc, Cl B 223,500 3,907
-----------------------------------------------------------------------------
TOTAL RETAIL 5,497
=============================================================================
SPECIALTY RETAIL [2.4%]
Jo-Ann Stores* 144,100 1,940
=============================================================================
TRANSPORTATION SERVICES [3.0%]
Sea Containers, Cl A 341,950 2,465
=============================================================================
TOTAL COMMON STOCK
(Cost $63,791) 74,856
=======================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 14
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
RCB SMALL CAP VALUE FUND (CONCLUDED)
DESCRIPTION FACE AMOUNT(000) VALUE (000)
- --------------------------------------------------------------------------------
CORPORATE BONDS [3.5%]
FINANCIAL SERVICES [0.6%]
Fairfax Financial Holding
7.750%, 04/26/12 $ 600 $ 528
=============================================================================
RETAIL [1.1%]
Jo-Ann Stores
7.500%, 03/01/12 1,000 878
=============================================================================
TRANSPORTATION SERVICES [1.8%]
Sea Containers, Ser B
10.750%, 10/15/06 1,500 1,470
=============================================================================
TOTAL CORPORATE BONDS
(Cost $2,911) 2,876
=======================================================================
REPURCHASE AGREEMENT (A) [6.9%]
Morgan Stanley,
4.500%, dated 3/31/06,
repurchased on 04/03/06,
repurchase price $5,666,442
(collateralized by a U.S.Treasury
Note, par value $5,816,092,
3.875%, 7/31/07; with total
market value $5,777,622) 5,664 5,664
-----------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost $5,664) 5,664
=======================================================================
TOTAL INVESTMENTS [101.8%]
(Cost $72,366) 83,396
=======================================================================
OTHER ASSETS AND LIABILITIES-- [-1.8%]
Payable for Investment Securities Purchased (1,436)
Payable for Fund Shares Redeemed (180)
Shareholder Servicing & Distribution
Fees Payable (62)
Investment Advisory Fees Payable (59)
Administration Fees Payable (4)
Other Assets and Liabilities, Net 258
-----------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES (1,483)
=======================================================================
NET ASSETS -- [100.0%] $ 81,913
=============================================================================
DESCRIPTION VALUE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Paid-in-Capital (unlimited authorization --
$0.01 par value) $ 66,012
Undistributed net investment income 64
Accumulated net realized gain on investments 4,807
Unrealized appreciation on investments 11,030
-----------------------------------------------------------------------------
NET ASSETS $ 81,913
=============================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($14,898,145 / 515,224 shares) $ 28.92
=============================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($12,432,536 / 433,535 shares) $ 28.68
=============================================================================
Net Asset Value and Redemption
Price Per Share -- Class R
($54,582,399/ 1,906,519 shares) $ 28.63
=============================================================================
Maximum Offering
Price Per Share -- Class R
($28.63 / 96.50%) $ 29.67
=============================================================================
* NON-INCOME PRODUCING SECURITY
(A) TRI-PARTY REPURCHASE AGREEMENT
CL -- CLASS
SER -- SERIES
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 15
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
TECHNOLOGY GROWTH FUND
SECTOR WEIGHTINGS*:
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
21.8% Computer & Peripheral Equipment Manufacturing
20.5% Semiconductor & Other Electric Component Manufacturing
19.5% Software Publishers
11.6% Communications Equipment Manufacturing
5.1% On-line Information Services
4.9% Computer Systems Design & Related Services
4.7% Short Term Investments
2.8% Telecommunications
2.4% Data Processing Services
2.3% Navigation/Measuring/Medical/Control Instruments Manufacturing
1.9% Other Electrical Equipment & Components
1.0% Electric Shopping & Mail-Order Houses
1.0% Commercial/Industrial Equipment Rental & Leasing
0.5% Audio & Video Equipment Manufacturing
* Percentages based on total investments
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCK [95.4%]
AUDIO & VIDEO EQUIPMENT
MANUFACTURING [0.5%]
Sony, ADR 300 $ 14
=============================================================================
COMMERCIAL/INDUSTRIAL EQUIPMENT
RENTAL & LEASING [1.0%]
Comverse Technology* 1,200 28
=============================================================================
COMMUNICATIONS EQUIPMENT
MANUFACTURING [11.6%]
Cisco Systems* 4,705 102
Harris 700 33
Motorola 1,125 26
Nokia, ADR* 2,150 45
Qualcomm 2,300 116
-----------------------------------------------------------------------------
TOTAL COMMUNICATIONS EQUIPMENT
MANUFACTURING 322
=============================================================================
COMPUTER & PERIPHERAL EQUIPMENT
MANUFACTURING [21.8%]
Apple Computer* 995 62
Dell* 3,925 117
EMC-Mass* 4,505 61
Hewlett-Packard 3,823 126
IBM 1,400 116
NAVTEQ* 400 20
Network Appliance* 550 20
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
Sandisk* 400 $ 23
Symbol Technologies 2,250 24
Western Digital* 1,750 34
-----------------------------------------------------------------------------
TOTAL COMPUTER & PERIPHERAL EQUIPMENT
MANUFACTURING 603
=============================================================================
COMPUTER SYSTEMS DESIGN &
RELATED SERVICES [4.9%]
Autodesk 400 15
Cerner* 400 19
Check Point Software
Technologies* 850 17
Cognizant Technology Solutions,
Cl A* 800 48
Intergraph* 275 12
Jack Henry & Associates 1,100 25
-----------------------------------------------------------------------------
TOTAL COMPUTER SYSTEMS
DESIGN & RELATED SERVICES 136
=============================================================================
DATA PROCESSING SERVICES [2.3%]
Affiliated Computer Services,
Cl A* 425 25
First Data 850 40
-----------------------------------------------------------------------------
TOTAL DATA PROCESSING SERVICES 65
=============================================================================
ELECTRONIC SHOPPING & MAIL-ORDER HOUSES [1.0%]
eBay* 725 28
=============================================================================
NAVIGATIONAL/MEASURING/MEDICAL/CONTROL
INSTRUMENTS MANUFACTURING [2.3%]
L-3 Communications Holdings 500 43
PerkinElmer 875 20
-----------------------------------------------------------------------------
TOTAL NAVIGATIONAL/MEASURING/MEDICAL/
CONTROL INSTRUMENTS MANUFACTURING 63
=============================================================================
ONLINE INFORMATION SERVICES [5.1%]
Google* 95 37
Juniper Networks* 1,442 27
WebEx Communications* 1,125 38
Yahoo!* 1,200 39
-----------------------------------------------------------------------------
TOTAL ONLINE INFORMATION SERVICES 141
=============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 16
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
TECHNOLOGY GROWTH FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
OTHER ELECTRICAL EQUIPMENT & COMPONENT
MANUFACTURING [2.0%]
Corning* 2,000 $ 54
=============================================================================
SEMICONDUCTOR & OTHER ELECTRONIC COMPONENT
MANUFACTURING [20.5%]
Amphenol, Cl A 500 26
Analog Devices 825 32
Arrow Electronics* 500 16
Broadcom, Cl A* 1,200 52
Freescale Semiconductor* 1,100 31
Intel 4,950 96
Jabil Circuit* 850 36
Linear Technology 775 27
Marvel Tech Group* 250 14
Maxim Integrated Products 900 33
MEMC Electronic Materials* 700 26
National Semiconductor 475 13
Nvidia* 350 20
Taiwan Semiconductor
Manufacturing, ADR 3,296 33
Texas Instruments 2,900 94
Xilinx 700 18
-----------------------------------------------------------------------------
TOTAL SEMICONDUCTOR & OTHER ELECTRONIC
COMPONENT MANUFACTURING 567
=============================================================================
SOFTWARE PUBLISHERS [19.5%]
Adobe Systems 650 23
Akamai Technologies* 1,000 33
Citrix Systems* 825 31
Electronic Arts* 400 22
Intuit* 200 11
McAfee* 975 24
Mercury Interactive* 550 19
Microsoft 7,400 201
Oracle* 6,415 88
Progress Software* 375 11
Symantec* 3,300 55
Take-Two Interactive
Software* 487 9
VeriSign* 550 13
-----------------------------------------------------------------------------
TOTAL SOFTWARE PUBLISHERS 540
=============================================================================
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS [2.9%]
Amdocs* 1,000 $ 36
J2 Global Communications* 450 21
Tekelec* 1,550 22
-----------------------------------------------------------------------------
TOTAL TELECOMMUNICATIONS 79
=============================================================================
TOTAL COMMON STOCK
(Cost $2,415) 2,640
=======================================================================
CASH EQUIVALENTS [4.7%]
Fidelity Institutional Domestic
Money Market Portfolio,
Cl I, 4.59%(1) 106,723 107
SEI Daily Income Trust,
Prime Obligation Fund,
Cl A, 4.66%(1) 23,487 23
=============================================================================
TOTAL CASH EQUIVALENTS
(Cost $130) 130
=======================================================================
TOTAL INVESTMENTS [100.1%]
(Cost $2,545) 2,770
=======================================================================
OTHER ASSETS AND LIABILITIES -- [-0.1%]
Investment Advisory Fees Payable (2)
Shareholder Servicing & Distribution
Fees Payable (1)
Other Assets and Liabilities, Net 1
-----------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES (2)
=======================================================================
NET ASSETS -- [100.0%] $ 2,768
=============================================================================
NET ASSETS:
Paid-in-Capital (unlimited authorization --
$0.01 par value) $ 4,044
Distributions in excess of net
investment income (10)
Accumulated net realized loss on investments (1,491)
Unrealized appreciation on investments 225
-----------------------------------------------------------------------------
NET ASSETS $ 2,768
=============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 17
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
TECHNOLOGY GROWTH FUND (CONCLUDED)
DESCRIPTION VALUE
- --------------------------------------------------------------------------------
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($1,225,019 / 279,842 shares) $ 4.38
=============================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($1,543,150 / 357,038 shares) $ 4.32
=============================================================================
* NON-INCOME PRODUCING SECURITY
(1) RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF MARCH 31, 2006.
ADR -- AMERICAN DEPOSITARY RECEIPT
CL -- CLASS
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 18
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
CORPORATE BOND FUND
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
SECTOR WEIGHTINGS*:
38.0% Financials
26.4% Industrials
9.8% Banking
5.6% Telephone
4.6% Asset-Backed
4.4% Utilities
4.2% Government Bands
2.4% U.S. Treasury Obligations
2.3% Short Term Investments
1.9% Municipal Bands
0.4% Transportation
0.0% Mortgage Related
* Percentages based on total investments
- --------------------------------------------------------------------------------
DESCRIPTION FACE AMOUNT(000) VALUE (000)
- --------------------------------------------------------------------------------
CORPORATE BONDS [84.2%]
ADVERTISING [0.7%]
Clear Channel Communications
4.900%, 05/15/15 $ 450 $ 394
=============================================================================
AIR TRANSPORTATION [0.4%]
Federal Express, Ser A2
7.890%, 09/23/08 215 220
=============================================================================
AUTOMOTIVE [2.8%]
DaimlerChrysler
5.875%, 03/15/11 520 518
Toyota Motor Credit
4.250%, 03/15/10 1,000 965
-----------------------------------------------------------------------------
TOTAL AUTOMOTIVE 1,483
=============================================================================
BANKS [12.1%]
Bank of America
7.500%, 09/15/06 500 505
7.125%, 09/15/06 500 504
Bankers Trust
7.250%, 10/15/11 500 544
Crestar Finance
6.500%, 01/15/08 1,035 1,058
Deutsche Bank
7.500%, 04/25/09 500 529
JPMorgan Chase
7.125%, 06/15/09 675 708
Union Planters Bank
5.125%, 06/15/07 1,215 1,211
US Bancorp
6.875%, 09/15/07 350 357
DESCRIPTION FACE AMOUNT(000) VALUE (000)
- --------------------------------------------------------------------------------
Wachovia
7.125%, 10/15/06 $ 100 $ 101
Wells Fargo
4.625%, 08/09/10 1,000 971
-----------------------------------------------------------------------------
TOTAL BANKS 6,488
=============================================================================
BEAUTY PRODUCTS [1.6%]
Avon Products
7.150%, 11/15/09 800 846
=============================================================================
CHEMICALS [0.4%]
Praxair
6.625%, 10/15/07 200 204
=============================================================================
COMMUNICATION & MEDIA [3.5%]
Comcast Cable Communications
Holdings
8.375%, 03/15/13 400 450
News America Holdings
9.250%, 02/01/13 450 531
Time Warner
6.750%, 04/15/11 395 409
Walt Disney
5.500%, 12/29/06 500 501
-----------------------------------------------------------------------------
TOTAL COMMUNICATION & MEDIA 1,891
=============================================================================
COMPUTER SYSTEM DESIGN & SERVICES [3.5%]
Cisco Systems
5.500%, 02/22/16 1,000 985
IBM
4.375%, 06/01/09 900 878
-----------------------------------------------------------------------------
TOTAL COMPUTERS SYSTEM DESIGN
& SERVICES 1,863
=============================================================================
ELECTRICAL SERVICES [3.2%]
American Electric Power
5.250%, 06/01/15 490 471
Iowa Electric Light & Power
6.000%, 10/01/08 200 202
WPS Resources
7.000%, 11/01/09 1,000 1,046
-----------------------------------------------------------------------------
TOTAL ELECTRICAL SERVICES 1,719
=============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 19
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
CORPORATE BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT(000) VALUE (000)
- --------------------------------------------------------------------------------
FINANCIAL SERVICES [17.6%]
American General Finance,
Ser I, MTN
4.625%, 05/15/09 $ 1,000 $ 980
CIT Group, MTN
4.750%, 12/15/10 1,000 968
Citigroup
7.250%, 10/01/10 1,000 1,070
Countrywide Home Loans
5.625%, 07/15/09 155 155
Countrywide Home Loans,
Ser L, MTN
4.000%, 03/22/11 875 813
General Electric Capital,
Ser A, MTN
6.875%, 11/15/10 250 265
6.000%, 06/15/12 1,500 1,540
HSBC Finance
5.250%, 04/15/15 1,000 963
John Deere Capital
4.625%, 04/15/09 750 735
MBNA
4.625%, 09/15/08 410 404
National Rural Utilities,
Ser C, MTN
7.250%, 03/01/12 1,000 1,080
Washington Mutual
4.625%, 04/01/14 460 421
-----------------------------------------------------------------------------
TOTAL FINANCIAL SERVICES 9,394
=============================================================================
FOOD, BEVERAGE & TOBACCO [4.4%]
Bottling Group
5.500%, 04/01/16 1,000 987
Diageo Capital
3.375%, 03/20/08 1,000 963
General Mills
2.625%, 10/24/06 410 404
-----------------------------------------------------------------------------
TOTAL FOOD, BEVERAGE & TOBACCO 2,354
=============================================================================
FOREIGN GOVERNMENT [0.8%]
United Mexican States
5.875%, 01/15/14 450 447
=============================================================================
DESCRIPTION FACE AMOUNT(000) VALUE (000)
- --------------------------------------------------------------------------------
INSURANCE [5.7%]
Aflac
6.500%, 04/15/09 $1,000 $ 1,026
AXA Financial
7.750%, 08/01/10 1,000 1,084
Berkshire Hathaway Finance
4.125%, 01/15/10 1,000 956
-----------------------------------------------------------------------------
TOTAL INSURANCE 3,066
=============================================================================
INVESTMENT BANKER/BROKER DEALER [7.8%]
Goldman Sachs Group
5.150%, 01/15/14 1,000 964
Jefferies Group
5.500%, 03/15/16 665 634
Lehman Brothers Holdings
8.250%, 06/15/07 1,100 1,135
Merrill Lynch
4.000%, 11/15/07 500 490
Morgan Stanley
3.875%, 01/15/09 1,000 962
-----------------------------------------------------------------------------
TOTAL INVESTMENT BANKER/BROKER DEALER 4,185
=============================================================================
MACHINERY [1.2%]
Caterpillar
9.000%, 04/15/06 620 621
=============================================================================
PETROLEUM & FUEL PRODUCTS [3.7%]
Chevron
8.625%, 06/30/10 200 226
ConocoPhillips
6.375%, 03/30/09 305 314
Duke Capital
5.500%, 03/01/14 625 611
Union Oil of California,
Ser C, MTN
7.900%, 04/18/08 800 836
-----------------------------------------------------------------------------
TOTAL PETROLEUM & FUEL PRODUCTS 1,987
=============================================================================
REAL ESTATE INVESTMENT TRUSTS [2.1%]
Kimco Realty, MTN
6.960%, 07/16/07 1,000 1,020
Kimco Realty, Ser B, MTN
7.860%, 11/01/07 67 69
-----------------------------------------------------------------------------
TOTAL REAL ESTATE INVESTMENT TRUSTS 1,089
=============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 20
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
CORPORATE BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT(000) VALUE (000)
- --------------------------------------------------------------------------------
RETAIL [6.5%]
Kohl's
6.300%, 03/01/11 $ 1,000 $ 1,030
Kroger
5.500%, 02/01/13 450 438
McDonald's, Ser E, MTN
4.240%, 12/13/06 995 988
Wal-Mart Stores
4.375%, 07/12/07 1,000 990
-----------------------------------------------------------------------------
TOTAL RETAIL 3,446
=============================================================================
TELEPHONES & TELECOMMUNICATIONS [5.5%]
Deutsche Telekom International
Finance
5.250%, 07/22/13 435 418
New Cingular Wireless Services
8.125%, 05/01/12 400 449
Southwestern Bell
6.625%, 07/15/07 750 760
Sprint Capital
8.375%, 03/15/12 350 395
Verizon Global Funding
4.900%, 09/15/15 1,000 925
-----------------------------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATIONS 2,947
=============================================================================
WASTE DISPOSAL [0.7%]
Waste Management
6.875%, 05/15/09 375 390
=============================================================================
TOTAL CORPORATE BONDS
(Cost $46,019) 45,034
=======================================================================
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS [3.4%]
FHLMC, Ser 2982, Cl NB
5.500%, 02/15/29 340 338
FNMA CMO, Ser 2002-56,
Cl MC
5.500%, 09/25/17 1,459 1,454
-----------------------------------------------------------------------------
TOTAL U.S.GOVERNMENT MORTGAGE-BACKED OBLIGATIONS
(Cost $1,803) 1,792
=======================================================================
ASSET-BACKED SECURITIES [3.3%]
Capital Auto Receivables Asset
Trust, Ser 2003-2, Cl A4A
1.960%, 01/15/09 897 887
DESCRIPTION FACE AMOUNT(000) VALUE (000)
- --------------------------------------------------------------------------------
Capital Auto Receivables Asset
Trust, Ser 2004-1, Cl A4
2.640%, 11/17/08 $ 750 $ 729
Countrywide Asset-Backed
Certificates, Ser 2004-BC3,
Cl 2A
5.198%, 08/25/34 169 169
-----------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(Cost $1,816) 1,785
=======================================================================
U.S. TREASURY OBLIGATIONS [2.4%]
U.S.Treasury Inflation Index Note
2.000%, 01/15/14 1,073 1,048
U.S.Treasury Note
4.250%, 08/15/14 250 239
-----------------------------------------------------------------------------
TOTAL U.S.TREASURY OBLIGATIONS
(Cost $1,364) 1,287
=======================================================================
MUNICIPAL BONDS [1.9%]
CALIFORNIA [1.9%]
California Statewide, Community
Development Authority,
Ser A-2, RB, XLCA
4.000%, 11/15/06 75 74
City of Industry, Sales Tax Project,
RB, MBIA
5.000%, 01/01/12 955 935
-----------------------------------------------------------------------------
TOTAL CALIFORNIA 1,009
=============================================================================
TOTAL MUNICIPAL BONDS
(Cost $1,059) 1,009
=======================================================================
MORTGAGE-BACKED SECURITIES [1.2%]
Residential Asset Mortgage
Products, Ser 2003-RS5, Cl AI4
3.700%, 09/25/31 621 606
Residential Asset Mortgage
Products, Ser 2003-RS6, Cl AI3
3.080%, 12/25/28 28 28
Washington Mutual,
Ser 2003-AR10, Cl A3A
3.530%, 10/25/33 5 5
-----------------------------------------------------------------------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $646) 639
=======================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 21
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
CORPORATE BOND FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
CASH EQUIVALENT [2.2%]
Fidelity Institutional Domestic
Money Market Portfolio,
Cl I, 4.59%(1) 1,190,832 $ 1,191
-----------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(Cost $1,191) 1,191
=======================================================================
TOTAL INVESTMENTS [98.6%]
(Cost $53,898) 52,737
=======================================================================
OTHER ASSETS AND LIABILITIES -- [1.4%]
Income Distributions Payable (147)
Payable for Fund Shares Redeemed (39)
Investment Advisory Fees Payable (18)
Shareholder Servicing & Distribution
Fees Payable (12)
Administration Fees Payable (3)
Other Assets and Liabilities, Net 961
-----------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES 742
=======================================================================
NET ASSETS -- [100.0%] $ 53,479
=============================================================================
NET ASSETS:
Paid-in-Capital (unlimited authorization --
$0.01 par value) $ 54,782
Accumulated net realized loss on investments (142)
Unrealized depreciation on investments (1,161)
-----------------------------------------------------------------------------
NET ASSETS $ 53,479
=============================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($52,093,722 / 5,177,000 shares) $ 10.06
=============================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($1,385,015 / 137,556 shares) $ 10.07
=============================================================================
(1) RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF MARCH 31, 2006.
CL -- CLASS
CMO -- COLLATERALIZED MORTGAGE OBLIGATION
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
MBIA -- MUNICIPAL BOND INSURANCE ASSOCIATION
MTN -- MEDIUM TERM NOTE
RB -- REVENUE BOND
SER -- SERIES
XLCA -- XL CAPITAL ASSURANCE
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 22
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
GOVERNMENT BOND FUND
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
SECTOR WEIGHTINGS*:
49.7% U.S. Government Agency Obligations
28.2% U.S. Treasury Obligations
18.8% U.S. Government Mortgage-Backed Obligations
3.3% Short-Term Investments
* Percentages based on total investments.
- --------------------------------------------------------------------------------
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS [49.0%]
FHLB
6.200%, 03/22/21 $ 2,000 $ 1,977
5.020%, 11/07/08 1,000 994
FNMA
7.125%, 06/15/10 3,500 3,758
5.500%, 03/15/11 2,020 2,049
5.250%, 04/15/07 75 75
5.010%, 11/10/10 2,500 2,458
5.000%, 01/23/09 2,500 2,484
4.250%, 05/15/09 2,500 2,439
-----------------------------------------------------------------------------
TOTAL U.S.GOVERNMENT AGENCY OBLIGATIONS
(Cost $16,567) 16,234
=======================================================================
U.S.GOVERNMENT MORTGAGE-BACKED
OBLIGATIONS [27.8%]
FHLMC, Pool 2980
6.000%, 05/15/35 1,593 1,589
FHLMC, Ser 2922, Cl JA
4.500%, 02/15/20 563 529
FHLMC, Ser R003, Cl AG
5.125%, 10/15/15 1,400 1,381
FHLMC, Ser R004, Cl Al
5.125%, 12/15/13 955 946
FNMA, Pool 766620
4.578%, 03/01/34 1,249 1,217
FNMA, Ser 2003-134, Cl ME
4.500%, 06/25/33 2 2
FNMA, Ser 2003-34, Cl GJ
4.000%, 02/25/33 10 9
GNMA, Pool 81318
4.500%, 04/20/35 1,323 1,301
GNMA, Pool 81447
5.000%, 08/20/35 147 145
GNMA, Pool 81510
4.250%, 10/20/35 1,481 1,435
GNMA, Pool 864622
4.500%, 06/20/35 668 657
-----------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED
OBLIGATIONS
(Cost $9,347) 9,211
=======================================================================
DESCRIPTION FACE AMOUNT (000)/SHARES VALUE (000)
- --------------------------------------------------------------------------------
U.S.TREASURY OBLIGATIONS [18.6%]
U.S.Treasury Notes
5.500%, 02/15/08 $ 525 $ 531
4.250%, 11/15/13 1,050 1,008
4.250%, 08/15/15 1,225 1,167
3.875%, 01/15/09 2,738 2,867
3.000%, 07/15/12 551 575
-----------------------------------------------------------------------------
TOTAL U.S.TREASURY OBLIGATIONS
(Cost $6,318) 6,148
=======================================================================
CASH EQUIVALENT [3.3%]
Fidelity Institutional Domestic
Money Market Portfolio,
Cl I, 4.59%(1) 1,082,149 1,082
-----------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(Cost $1,082) 1,082
=======================================================================
TOTAL INVESTMENTS [98.7%]
(Cost $33,314) 32,675
=======================================================================
OTHER ASSETS AND LIABILITIES -- [1.3%]
Income Distributions Payable (81)
Payable for Fund Shares Redeemed (39)
Investment Advisory Fees Payable (10)
Shareholder Servicing & Distribution
Fees Payable (7)
Administration Fees Payable (2)
Other Assets and Liabilities, Net 583
-----------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES 444
=======================================================================
NET ASSETS -- [100.0%] $ 33,119
=============================================================================
NET ASSETS:
Paid-in-Capital (unlimited authorization --
$0.01 par value) $ 33,977
Accumulated net realized loss on investments (219)
Unrealized depreciation on investments (639)
-----------------------------------------------------------------------------
NET ASSETS $ 33,119
=============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 23
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
GOVERNMENT BOND FUND (CONCLUDED)
DESCRIPTION VALUE
- --------------------------------------------------------------------------------
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($32,462,087 / 3,175,229 shares) $ 10.22
=============================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($657,152 / 64,134 shares) $ 10.25
============================================================================
(1) RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF MARCH 31, 2006.
CL -- CLASS
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
SER -- SERIES
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 24
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT BOND FUND
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
SECTOR WEIGHTINGS*:
16.0% General Obligations
15.9% Education
15.4% General Revenue
13.5% Water
13.2% Public Facilities
8.4% Industrial Development
6.2% Power
5.4% Utilities
3.9% Transportation
1.1% Airport
0.6% Healthcare
0.4% Short-Term Investments
* Percentages based on total investments.
- --------------------------------------------------------------------------------
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
MUNICIPAL BONDS [96.9%]
ALABAMA [1.0%]
Jefferson County, Sewer Authority,
Ser B-8, RB, FSA
Callable 02/01/10 @ 100
5.250%, 02/01/14 $ 250 $ 262
=============================================================================
CALIFORNIA [78.4%]
Anaheim, Public Financing Authority,
Distribution System Project,
Second Lien, RB, MBIA
5.000%, 10/01/08 250 259
Berkeley, Ser C, GO, MBIA
Callable 02/16/06 @ 102
5.000%, 09/01/10 95 97
Beverly Hills, Unified School
District Authority, Ser B, GO
Pre-Refunded @ 101 (A)
4.700%, 06/01/08 50 52
Big Bear Lake,Water Authority,
RB, MBIA
6.000%, 04/01/11 200 216
Burbank, Public Financing Authority,
Golden State Redevelopment
Project, Ser A, RB, AMBAC
Callable 12/01/13 @ 100
5.250%, 12/01/18 175 188
California State, Department of
Water Resource Center,
Ser A, RB, MBIA
5.000%, 05/01/07 200 203
California State, Department of
Water Resources, Ser W, RB, FSA
5.500%, 12/01/13 400 444
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
California State, Economic Recovery
Authority, Ser B, GO
Mandatory Put 07/01/08
3.500%, 07/01/23 $ 300 $ 299
California State, Educational Facilities
Authority, Pooled College &
University Projects, Ser A, RB
4.300%, 04/01/09 100 101
California State, Educational Facilities
Authority, University of
San Francisco, RB, MBIA
6.000%, 10/01/08 300 318
California State, GO
4.750%, 06/01/07 100 101
California State, GO
Callable 02/01/12 @ 100
5.000%, 02/01/18 175 181
California State, GO
Callable 09/01/10 @ 100
5.250%, 09/01/18 10 10
California State, GO
Callable 10/01/10 @ 100
5.250%, 10/01/18 70 73
California State, GO
Callable 08/01/13 @ 100
5.250%, 02/01/21 250 266
California State, GO
Callable 11/01/13 @ 100
5.250%, 11/01/25 300 318
California State, GO, MBIA
Pre-Refunded @ 101 (A)
5.500%, 09/01/09 500 534
California State, GO
Pre-Refunded @ 100 (A)
5.250%, 09/01/10 190 202
California State, Health Facilities
Finance Authority, Presbyterian
Hospital, RB, MBIA
5.500%, 05/01/07 150 153
California State, Imperial Irrigation
District, Public Electric Project, RB
4.250%, 11/01/06 250 251
California State, Infrastructure &
Economic Authority, Bay Area
Toll Bridges Project,
Ser A, RB, FSA
Pre-Refunded @ 100 (A)
5.250%, 07/01/13 125 135
California State, Infrastructure &
Economic Authority, Energy
Efficiency Master Trust, Ser A, RB
5.000%, 03/01/11 315 333
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 25
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
California State, Infrastructure &
Economic Authority, RB, MBIA
Pre-Refunded @ 101 (A)
5.500%, 06/01/10 $ 350 $ 379
California State, Public Works
Board Lease, California State
University, Ser C, RB
5.000%, 10/01/07 100 102
California State, Public Works
Board Lease, Department of
Corrections Project,
Ser B, RB, MBIA
Callable 09/01/08 @ 101
5.000%, 09/01/21 100 104
California State, Public Works
Board Lease, Department of
Corrections, Ser A, RB
Callable 09/01/08 @ 101
5.250%, 09/01/15 250 260
California State, Public Works
Board Lease, Department of
Corrections-State Prisons
Project, Ser A, RB, AMBAC
5.250%, 12/01/13 250 270
California State, Public Works
Board Lease, Department of
Corrections-Ten Administration,
Ser A, RB, AMBAC
Callable 03/01/12 @ 100
5.250%, 03/01/18 155 165
California State, Public Works
Board Lease,Trustees California
State University, Ser A, RB
Callable 10/01/08 @ 101
5.250%, 10/01/11 100 104
California State, State Center
Community College, Election
2002 Project, Ser A, GO, MBIA
Callable 08/01/14 @ 100
5.250%, 08/01/20 205 220
California State, University of
California, Ser K, RB, MBIA
Callable 09/01/08 @ 101
5.000%, 09/01/17 150 156
California Statewide, Communities
Development Authority,
Ser B-2, RB, XLCA
4.000%, 11/15/06 400 401
Coachella Valley,Water District
Authority, Flood Control
Project, COP, AMBAC
Callable 10/01/07 @ 102
5.000%, 10/01/11 250 259
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Corona, Public Financing Authority,
City Hall Project, Ser B, RB
Callable 09/01/12 @ 100
5.250%, 09/01/16 $ 350 $ 377
Culver City, Redevelopment Finance
Authority,TA, AMBAC
Sink Date 11/01/09 @ 100
5.500%, 11/01/14 75 81
East Bay, Municipal Utility District
Water System, RB, MBIA
Callable 06/01/11 @ 100
5.000%, 06/01/19 500 524
Escondido, Union School District,
Refunding & Financing Project,
COP, MBIA
4.750%, 07/01/19 235 243
Evergreen School District,
Ser C, GO, FGIC
Pre-Refunded @ 101 (A)
5.250%, 09/01/08 200 210
Fruitvale, School District, GO, FSA
Callable 08/01/09 @ 102
5.000%, 08/01/19 200 210
Golden State,Tobacco
Settlement, Ser B, GO
Pre-Refunded @ 100 (A)
5.750%, 06/01/08 250 261
5.500%, 06/01/13 250 274
5.000%, 06/01/13 350 372
Hemet, Unified School District,
Nutrition Center
Project, COP, FSA
Pre-Refunded @ 102 (A)
5.750%, 04/01/07 250 260
Los Angeles County, Metropolitan
Transportation Authority,
2nd Tier, Ser A, RB, MBIA
Pre-Refunded @ 101 (A)
6.000%, 07/01/06 100 102
Los Angeles County, Public Works
Authority, Regional Park &
Open Project, Ser A, RB
Pre-Refunded @ 101 (A)
5.500%, 10/01/07 325 338
Los Angeles County, Public
Works Finance Authority,
Ser B, RB, MBIA
Callable 09/01/06 @ 102
5.250%, 09/01/14 200 205
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 26
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Los Angeles County, Public Works
Financing Authority, Master
Refunding Project,
Ser A, RB, MBIA
5.000%, 12/01/12 $ 275 $ 294
Los Angeles, Harbor Development
Project, Ser C, RB
Callable 11/01/06 @ 101
5.125%, 11/01/11 180 183
Los Angeles, Municipal
Improvement Authority,
Central Library Project,
Ser A, RB, MBIA
5.250%, 06/01/13 230 250
Los Angeles, Property Tax
Project, Ser A, GO, MBIA
4.000%, 09/01/09 250 254
Los Angeles, Sanitation
Equipment Authority,
Ser A, RB, MBIA
4.000%, 02/01/07 100 101
Los Angeles,Wastewater
Systems Authority, RB, FSA
4.500%, 06/01/09 250 257
Los Angeles,Water & Power
Authority, Power Systems
Project, Ser A, RB
5.000%, 07/01/08 500 517
Los Angeles,Water & Power
Authority, Power Systems
Project, Ser AA1, RB, MBIA
Callable 07/01/11 @ 100
5.250%, 07/01/13 200 214
M-S-R Public Power,
Ser G, RB, MBIA
Callable 07/01/07 @ 101
5.250%, 07/01/11 100 103
Madera, Unified School District,
Election 2002 Project, GO, FGIC
Callable 08/01/15 @ 100
5.000%, 08/01/16 250 268
Northern California,Transmission
Resource Authority, Ore
Transmission Project,
Ser A, RB, MBIA
7.000%, 05/01/13 250 291
Oakland, Redevelopment Agency,
Central District Redevelopment,
TA, AMBAC
6.000%, 02/01/07 300 306
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Oakland, State Building Authority,
Elihu M Harris Project,
Ser A, RB, AMBAC
Pre-Refunded @ 101 (A)
5.500%, 04/01/08 $ 100 $ 105
Orange County, Recovery
Certificate Authority,
Ser A, COP, MBIA, ETM
6.000%, 07/01/06 250 252
Pasadena, Electric Improvements
Authority, RB, FSA
4.500%, 06/01/07 160 162
Pinole, Redevelopment Agency
Project,TA, FSA
Callable 08/01/09 @ 101
5.250%, 08/01/14 100 106
Placer County,Water Agency,
Capital Improvement Projects,
COP, AMBAC
Pre-Refunded @ 101 (A)
5.500%, 07/01/09 500 534
Riverside County,Transportation
Authority, Ser A, RB
5.750%, 06/01/09 450 480
Riverside, RB
Callable 10/01/08 @ 101
5.375%, 10/01/12 90 94
Riverside, RB
Pre-Refunded @ 101 (A)
5.375%, 10/01/08 10 11
Sacramento County, Sanitation
District Funding Authority,
RB, ETM
Callable 02/16/06 @ 102
5.000%, 12/01/07 100 102
Sacramento, City Unified School
District, Ser A, GO, FSA
4.250%, 07/01/09 75 77
San Bernardio, Community
College District, Election
2002 Project, Ser B, GO, MBIA
Pre-Refunded @ 100 (A)
5.250%, 08/01/14 750 821
San Diego County, Edgemoor &
Regional Systems Projects,
COP, AMBAC
Callable 02/01/15 @ 100
5.000%, 02/01/18 500 527
San Diego County, North County
Regional Center for Expansion,
COP, AMBAC
Pre-Refunded @ 102 (A)
5.250%, 11/15/06 100 103
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 27
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
San Diego, University School
District, Capital Appreciation-
Election 1998 Project,
Ser D, GO, FGIC
Callable 07/01/12 @ 101
5.250%, 07/01/24 $ 135 $ 146
San Diego, University School
District, Election 1998
Project, Ser E, GO, FSA
Callable 07/01/13 @ 101
5.250%, 07/01/16 100 109
San Francisco (City & County),
Airports Commission Authority,
Second Ser-27B, RB, FGIC
5.250%, 05/01/12 250 267
San Francisco (City & County),
Building Authority, Department
of General Services & Leasing,
Ser A, RB
5.000%, 10/01/13 400 422
San Francisco (City & County),
Public Utility Authority,
Ser A, RB, MBIA
Callable 11/01/06 @ 101.5
5.000%, 11/01/17 375 383
San Jose, University School
District, Ser A, GO, FSA
Callable 08/01/11 @ 101
5.375%, 08/01/19 150 162
San Ysidro, School District, Election
1997 Project, Ser C, GO, MBIA
6.000%, 08/01/11 205 228
Sanger, Unified School District,
GO, MBIA
5.350%, 08/01/15 250 270
Santa Monica, Public Safety
Facilities Project, RB,
Callable 07/01/09 @ 101
5.250%, 07/01/14 100 106
Semitropic, Improvement Water
Storage Authority, RB,
FSA, ACA Insured
4.000%, 06/01/13 250 253
Solano County, COP, MBIA
Callable 11/01/12 @ 100
5.250%, 11/01/14 100 108
Southern California, Metropolitan
Water District Authority,
Ser A, RB
5.750%, 07/01/21 280 323
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Southern California, Publiic
Power Authority, Southern
Transmission Project,
Sub-Ser A, RB, FSA
Callable 07/01/12 @ 100
5.250%, 07/01/16 $ 200 $ 215
Wiseburn, School District,
Ser A, GO, FGIC
4.200%, 08/01/07 125 126
-----------------------------------------------------------------------------
TOTAL CALIFORNIA 20,141
=============================================================================
COLORADO [1.7%]
Lakewood, COP, AMBAC
Pre-Refunded @ 100 (A)
5.500%, 12/01/10 400 430
=============================================================================
FLORIDA [1.5%]
Florida State, Correctional
Private Commission
Authority, COP, MBIA
Callable 08/01/11 @ 101
5.375%, 08/01/14 350 377
=============================================================================
GEORGIA [0.8%]
Georgia State, Metropolitan
Atlanta Rapid Transportation
Authority, Second Indenture
Project, Ser A, RB, MBIA
6.250%, 07/01/07 200 206
=============================================================================
ILLINOIS [1.5%]
Illinois State, Development
Finance Authority, Revolving
Fund-Master Trust, RB
Callable 09/01/12 @ 100
5.500%, 09/01/13 250 272
Illinois State, Ser A, GO
Callable 10/01/13 @ 100
5.000%, 10/01/16 100 105
-----------------------------------------------------------------------------
TOTAL ILLINOIS 377
=============================================================================
MICHIGAN [1.0%]
Michigan State, Building
Authority, Facilities Project,
Ser II, RB,
Pre-Refunded @ 101 (A)
5.000%, 10/15/07 250 258
=============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 28
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
OREGON [1.4%]
Lane County, School District, GO
Pre-Refunded @ 100 (A)
5.625%, 06/15/10 $ 345 $ 371
=============================================================================
TEXAS [2.6%]
Harris County, Flood Control
District, Ser A, GO
5.000%, 10/01/06 300 302
San Angelo,Waterworks &
Sewer System Authority,
Refunding & Improvements
Projects, RB, FSA
Callable 04/01/11 @ 100
5.250%, 04/01/19 100 106
Texas State,TRAN
4.500%, 08/31/06 250 251
-----------------------------------------------------------------------------
TOTAL TEXAS 659
=============================================================================
UTAH [0.6%]
Central,Water Conservancy
District, Ser D, GO
Pre-Refunded @ 100 (A)
4.600%, 04/01/09 140 143
=============================================================================
WASHINGTON [2.3%]
King County, School District
Number 414, GO, MBIA
Callable 12/01/12 @ 100
5.750%, 12/01/14 225 249
Washington State,
Ser 02-A, GO, FSA
Callable 07/01/11 @ 100
5.000%, 07/01/19 345 360
-----------------------------------------------------------------------------
TOTAL WASHINGTON 609
=============================================================================
PUERTO RICO [4.1%]
Puerto Rico, Electric Power
Authority, Power Project,
Ser CC, RB, MBIA
Callable 07/01/07 @ 101.5
5.250%, 07/01/09 100 103
Puerto Rico, Municipal Finance
Agency, Ser A, RB, FSA
Callable 07/01/07 @ 101.5
5.250%, 07/01/10 130 135
Puerto Rico, Public Buildings
Authority, Government
Facilities Project, Ser J,
RB, AMBAC
Callable 07/01/12 @ 100
5.000%, 07/01/36 300 317
DESCRIPTION FACE AMOUNT (000)/SHARES VALUE (000)
- --------------------------------------------------------------------------------
Puerto Rico, Public Finance
Authority, Commonwealth
Appropriation Committee
Project, Ser E, RB
Pre-Refunded @ 100 (A)
5.750%, 02/01/07 $ 500 $ 509
-----------------------------------------------------------------------------
TOTAL PUERTO RICO 1,064
=============================================================================
TOTAL MUNICIPAL BONDS
(Cost $25,173) 24,897
=======================================================================
CASH EQUIVALENT [0.4%]
Federated California Municipal
Money Market Fund,
Cl I, 2.92%(1) 113,029 113
-----------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(Cost $113) 113
=======================================================================
TOTAL INVESTMENTS [97.3%]
(Cost $25,286) 25,010
=======================================================================
OTHER ASSETS AND LIABILITIES -- [2.7%]
Payable for Investment Securities Purchased (270)
Income Distributions Payable (43)
Shareholder Servicing & Distribution
Fees Payable (6)
Investment Advisory Fees Payable (3)
Administration Fees Payable (1)
Other Assets and Liabilities, Net 1,007
-----------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES 684
=======================================================================
NET ASSETS -- [100.0%] $ 25,694
=============================================================================
NET ASSETS:
Paid-in-Capital (unlimited authorization --
$0.01 par value) $ 25,983
Undistributed net investment income 1
Accumulated net realized loss on investments (14)
Unrealized depreciation on investments (276)
-----------------------------------------------------------------------------
NET ASSETS $ 25,694
=============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 29
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT BOND FUND (CONCLUDED)
DESCRIPTION VALUE
- --------------------------------------------------------------------------------
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($24,444,899 / 2,414,820 shares) $ 10.12
=============================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($1,248,819 / 123,047 shares) $ 10.15
=============================================================================
(1) RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF MARCH 31, 2006.
(A) PRE-REFUNDED SECURITY -- THE MATURITY DATE SHOWN IS THE PRE-REFUNDED DATE.
ACA -- AMERICAN CAPITAL ACCESS
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
COP -- CERTIFICATE OF PARTICIPATION
ETM -- ESCROWED TO MATURITY
FGIC -- FINANCIAL GUARANTY INSURANCE COMPANY
FSA -- FINANCIAL SECURITY ASSURANCE
GO -- GENERAL OBLIGATION
MBIA -- MUNICIPAL BOND INSURANCE ASSOCIATION
RB -- REVENUE BOND
SER -- SERIES
TA -- TAX ALLOCATION
TRAN -- TAX & REVENUE ANTICIPATION NOTE
XLCA -- XL CAPITAL ASSURANCE
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 30
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
HIGH YIELD BOND FUND
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
SECTOR WEIGHTINGS*:
70.4% Industrial
7.2% Telephone
6.7% Utilities
6.7% Financial
5.1% Gas Transmission
2.0% Short-Term Investments
1.8% Transportation
0.1% Common Stock
* Percentages based on total investments.
- --------------------------------------------------------------------------------
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
CORPORATE BONDS [96.5%]
ADVERTISING [0.5%]
Advanstar Communications
10.750%, 08/15/10 $ 100 $ 109
Gray Television
9.250%, 12/15/11 100 106
-----------------------------------------------------------------------------
TOTAL ADVERTISING 215
=============================================================================
AEROSPACE & DEFENSE [1.4%]
DRS Techologies
6.625%, 02/01/16 100 100
Esterline Technologies
7.750%, 06/15/13 100 103
L-3 Communications
5.875%, 01/15/15 200 190
Sequa, Ser B
8.875%, 04/01/08 150 156
-----------------------------------------------------------------------------
TOTAL AEROSPACE & DEFENSE 549
=============================================================================
AGRICULTURE [0.4%]
American Rock Salt
9.500%, 03/15/14 150 151
=============================================================================
AIRLINES [0.5%]
American Airlines, Ser 2001-2
7.800%, 04/01/08 200 201
=============================================================================
ALUMINUM [0.4%]
Novelis (A) (B)
7.750%, 02/15/15 150 144
=============================================================================
APPAREL/TEXTILES [0.4%]
Levi Strauss
9.750%, 01/15/15 100 105
Phillips-Van Heusen
7.250%, 02/15/11 75 77
-----------------------------------------------------------------------------
TOTAL APPAREL/TEXTILES 182
=============================================================================
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
AUTO RENT & LEASE [0.9%]
Hertz (A)
10.500%, 01/01/16 $ 150 $ 163
Rent-way
11.875%, 06/15/10 100 104
United Rentals
6.500%, 02/15/12 90 88
-----------------------------------------------------------------------------
TOTAL AUTO RENT & LEASE 355
=============================================================================
AUTOPARTS [1.3%]
Accuride
8.500%, 02/01/15 150 149
Dura Operating, Ser D
9.000%, 05/01/09 75 37
Metaldyne
10.000%, 11/01/13 100 93
Tenneco Automotive
8.625%, 11/15/14 150 150
TRW Automotive
11.000%, 02/15/13 98 110
-----------------------------------------------------------------------------
TOTAL AUTOPARTS 539
=============================================================================
BROADCASTING & CABLE [6.3%]
Albritton Communications
7.750%, 12/15/12 150 151
Cablevision Systems, Ser B
8.000%, 04/15/12 225 219
CCO Holdings
8.750%, 11/15/13 250 243
Charter Communications Holdings
10.250%, 09/15/10 400 393
Coleman Cable
9.875%, 10/01/12 100 90
CSC Holdings
7.625%, 07/15/18 100 99
Echostar DBS
6.625%, 10/01/14 200 193
Fisher Communication
8.625%, 09/15/14 150 158
General Cable
9.500%, 11/15/10 100 108
Insight Commununications (B)
12.250%, 02/15/11 100 106
Kabel Deutschland (A)
10.625%, 07/01/14 200 214
Mediacom Capital
7.875%, 02/15/11 150 141
Nexstar Finance Holdings (B)
10.050%, 04/01/13 200 164
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 31
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
HIGH YIELD BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Olympus Communications, Ser B (D)
10.625%, 11/15/06 $ 100 $ 148
Videotron Ltee
6.875%, 01/15/14 100 101
-----------------------------------------------------------------------------
TOTAL BROADCASTING & CABLE 2,528
=============================================================================
BUILDING & CONSTRUCTION [4.3%]
Ainsworth Lumber
7.250%, 10/01/12 100 91
6.750%, 03/15/14 100 87
Beazer Homes USA
8.375%, 04/15/12 100 104
Brand Services
12.000%, 10/15/12 150 160
DR Horton
5.625%, 01/15/16 125 116
Goodman Global Holdings
7.875%, 12/15/12 75 74
International Utility Structures (D)
10.750%, 02/01/08 100 1
KB Home
8.625%, 12/15/08 50 53
6.250%, 06/15/15 200 187
Nortek
8.500%, 09/01/14 200 203
Panolam Industries (A)
10.750%, 10/01/13 250 242
Ply Gem Industries
9.000%, 02/15/12 100 93
RMCC Acquisition (A)
9.500%, 11/01/12 150 154
Tech Olympic USA
7.500%, 01/15/15 100 86
William Lyon Homes
10.750%, 04/01/13 100 101
-----------------------------------------------------------------------------
TOTAL BUILDING & CONSTRUCTION 1,752
=============================================================================
BUSINESS SERVICES [0.8%]
Corrections
7.500%, 05/01/11 100 103
FTI Consulting
7.625%, 06/15/13 50 53
Geo Group
8.250%, 07/15/13 150 152
-----------------------------------------------------------------------------
TOTAL BUSINESS SERVICES 308
=============================================================================
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
CHEMICALS [4.6%]
BCP Crystal US Holdings
9.625%, 06/15/14 $ 45 $ 50
Crystal Holdings, Ser B (B)
10.490%, 10/01/14 73 57
Equistar Chemicals
10.625%, 05/01/11 150 162
IMC Global
10.875%, 08/01/13 100 115
IMC Global, Ser B
11.250%, 06/01/11 100 106
Lyondell Chemical, Ser A
9.625%, 05/01/07 200 207
Nalco
7.750%, 11/15/11 150 152
Nell Af Sarl (A)
8.375%, 08/15/15 250 248
Nova Chemicals
6.500%, 01/15/12 250 232
Polymer Holdings (B)
12.000%, 07/15/14 250 199
PolyOne
10.625%, 05/15/10 100 108
Rhodia
10.250%, 06/01/10 65 73
Rockwood Specialties Group
10.625%, 05/15/11 73 80
Terra Capital
11.500%, 06/01/10 65 72
-----------------------------------------------------------------------------
TOTAL CHEMICALS 1,861
=============================================================================
CIRCUIT BOARDS [0.1%]
Viasystems
10.500%, 01/15/11 50 50
=============================================================================
COAL MINING [0.4%]
Alpha Natural Resources
10.000%, 06/01/12 150 165
=============================================================================
COMMERCIAL SERVICES [0.5%]
Iron Mountain
8.625%, 04/01/13 100 104
The Brickman Group, Ser B
11.750%, 12/15/09 100 109
-----------------------------------------------------------------------------
TOTAL COMMERCIAL SERVICES 213
=============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 32
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
HIGH YIELD BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
COMPUTER SYSTEM DESIGN & SERVICES [0.7%]
Xerox
7.625%, 06/15/13 $ 250 $ 263
=============================================================================
CONSUMER PRODUCTS & SERVICES [4.0%]
Ames True Temper
8.600%, 01/15/12 100 97
Gregg Appliances
9.000%, 02/01/13 150 139
Johnsondiversey Holdings (B)
10.259%, 05/15/13 200 173
Johnsondiversey, Ser B
9.625%, 05/15/12 150 154
Prestige Brands
9.250%, 04/15/12 90 91
Sealy Mattress
8.250%, 06/15/14 200 209
Southern States Cooperative (A)
10.500%, 11/01/10 200 212
Spectrum Brands
7.375%, 02/01/15 300 261
Steinway Musical (A)
7.000%, 03/01/14 100 100
Visant Holdings
8.750%, 12/01/13 100 96
WMG Holdings (B)
9.500%, 12/15/14 130 96
-----------------------------------------------------------------------------
TOTAL CONSUMER PRODUCTS & SERVICES 1,628
=============================================================================
CONTAINERS & PACKAGING [1.9%]
Crown Americas (A)
7.750%, 11/15/15 150 156
Graham Packaging
9.875%, 10/15/14 100 101
Intertape Polymer US
8.500%, 08/01/14 50 49
Owens-Brockway Glass Container
6.750%, 12/01/14 100 98
Owens-Illinois
8.100%, 05/15/07 100 102
Plastipak Holdings (A)
8.500%, 12/15/15 100 102
Solo Cup
8.500%, 02/15/14 150 141
-----------------------------------------------------------------------------
TOTAL CONTAINERS & PACKAGING 749
=============================================================================
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
DIVERSIFIED OPERATIONS [1.9%]
Jacuzzi Brands
9.625%, 07/01/10 $ 150 $ 161
Kansas City Southern
9.500%, 10/01/08 100 107
Stena
7.000%, 12/01/16 200 188
TD Funding
8.375%, 07/15/11 100 104
Trinity Industries
6.500%, 03/15/14 200 200
-----------------------------------------------------------------------------
TOTAL DIVERSIFIED OPERATIONS 760
=============================================================================
ELECTRICAL PRODUCTS [7.0%]
AES
9.000%, 05/15/15 (A) 300 325
7.750%, 03/01/14 100 105
Allegheny Energy Supply
7.800%, 03/15/11 200 213
Aquila
7.625%, 11/15/09 100 102
Calpine (A) (D)
8.750%, 07/15/13 150 138
8.500%, 07/15/10 200 184
Calpine Generating (C)
10.380%, 04/01/10 200 213
CMS Energy
7.500%, 01/15/09 100 103
6.875%, 12/15/15 150 152
Edison Mission Energy
7.730%, 06/15/09 200 205
ESI Tractebel Acquisitions, Ser B
7.990%, 12/30/11 63 65
Freescale Semiconductors
7.125%, 07/15/14 200 208
Mirant North America (A)
7.375%, 12/31/13 150 153
Motors & Gears, Ser D
10.750%, 11/15/06 150 147
Reliant Resources
9.500%, 07/15/13 200 200
Sierra Pacific Resources
8.625%, 03/15/14 200 217
TECO Energy
7.200%, 05/01/11 100 104
-----------------------------------------------------------------------------
TOTAL ELECTRICAL PRODUCTS 2,834
=============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 33
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
HIGH YIELD BOND FUND (CONTINUED)
- --------------------------------------------------------------------------------
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
ENTERTAINMENT [8.9%]
AMC Entertainment
11.000%, 02/01/16 (A) $ 100 $ 103
9.875%, 02/01/12 100 99
9.500%, 02/01/11 72 70
Aztar
9.000%, 08/15/11 100 106
Bombardier Recreational Products
8.375%, 12/15/13 150 158
Carmike Cinemas
7.500%, 02/15/14 200 183
Chukchansi Economic
Development Authority (A)
8.000%, 11/15/13 150 154
Cinemark USA
9.000%, 02/01/13 100 106
Circus & Eldorado Joint Venture/
Silver Legacy Capital
10.125%, 03/01/12 150 161
Herbst Gaming
8.125%, 06/01/12 150 156
Inn of the Mountain Gods
12.000%, 11/15/10 100 108
Isle of Capri Casinos
7.000%, 03/01/14 200 197
Kerzner International
6.750%, 10/01/15 200 210
Leslie's Poolmart
7.750%, 02/01/13 100 101
MGM Mirage
8.500%, 09/15/10 200 214
6.750%, 09/01/12 100 100
6.000%, 10/01/09 100 99
Mohegan Tribal Gaming Authority
7.125%, 08/15/14 150 151
MTR Gaming Group, Ser B
9.750%, 04/01/10 200 213
OED/Diamond Jo
8.750%, 04/15/12 100 100
Penn National Gaming
6.875%, 12/01/11 100 102
Six Flags
9.750%, 04/15/13 150 151
Speedway Motorsports
6.750%, 06/01/13 100 100
Station Casinos
6.875%, 03/01/16 50 50
Tunica-Biloxi Gaming Authority (A)
9.000%, 11/15/15 125 130
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Waterford Gaming (A)
8.625%, 09/15/12 $ 115 $ 122
Wynn Las Vegas
6.625%, 12/01/14 150 146
-----------------------------------------------------------------------------
TOTAL ENTERTAINMENT 3,590
=============================================================================
FINANCIAL SERVICES [2.3%]
Ford Motor Credit
7.375%, 10/28/09 200 188
General Motors Acceptance
6.750%, 12/01/14 675 608
JSG Funding
7.750%, 04/01/15 150 141
-----------------------------------------------------------------------------
TOTAL FINANCIAL SERVICES 937
=============================================================================
FOOD, BEVERAGE & TOBACCO [4.7%]
Chiquita Brands International
7.500%, 11/01/14 100 88
Del Monte
8.625%, 12/15/12 50 53
Doane Pet Care
10.625%, 11/15/15 100 106
Dominos
8.250%, 07/01/11 75 77
Friendly Ice Cream
8.375%, 06/15/12 200 181
General Nutrition Center
8.500%, 12/01/10 150 142
Land O' Lakes
8.750%, 11/15/11 6 6
Le-Natures (A)
10.000%, 06/15/13 150 157
Leiner Health Products
11.000%, 06/01/12 100 98
National Beef Packaging
10.500%, 08/01/11 100 101
National Wine & Spirits
10.125%, 01/15/09 100 101
Pinnacle Foods
8.250%, 12/01/13 150 149
Smithfield Foods, Ser B
8.000%, 10/15/09 350 365
Swift
12.500%, 01/01/10 200 201
WH Holdings/WH Capital
9.500%, 04/01/11 60 65
-----------------------------------------------------------------------------
TOTAL FOOD, BEVERAGE & TOBACCO 1,890
=============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 34
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
HIGH YIELD BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
FORESTRY [0.1%]
Tembec Industries
7.750%, 03/15/12 $ 100 $ 56
=============================================================================
MACHINERY [2.1%]
Case New Holland
9.250%, 08/01/11 100 107
7.125%, 03/01/14 (A) 100 99
Cummins
9.500%, 12/01/10 150 160
Dresser-Rand Group (A)
7.375%, 11/01/14 133 136
Resolution Performance Products
13.500%, 11/15/10 100 107
Terex
7.375%, 01/15/14 100 102
Trimas
9.875%, 06/15/12 150 137
-----------------------------------------------------------------------------
TOTAL MACHINERY 848
=============================================================================
MEDICAL [3.2%]
Angiotech Pharmaceuticals (A)
7.750%, 04/01/14 100 101
Bio-Rad Laboratories
7.500%, 08/15/13 100 103
Biovail
7.875%, 04/01/10 100 102
CDRV Investors (B)
9.750%, 01/01/15 200 136
Extendicare Health
6.875%, 05/01/14 100 103
Genesis Healthcare
8.000%, 10/15/13 100 106
MQ Associates (B)
12.250%, 08/15/12 150 42
Mylan Laboratories
5.750%, 08/15/10 150 148
Omnicare
6.750%, 12/15/13 250 249
Tenet Healthcare (A)
9.500%, 02/01/15 200 200
-----------------------------------------------------------------------------
TOTAL MEDICAL 1,290
=============================================================================
MEDICAL PRODUCTS & SERVICES [0.3%]
Vanguard Health Holding
9.000%, 10/01/14 100 102
=============================================================================
MISCELLANEOUS BUSINESS SERVICES [1.8%]
Allied Security Escrow
11.375%, 07/15/11 150 142
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Carriage Services
7.875%, 01/15/15 $ 200 $ 203
CCM Merger (A)
8.000%, 08/01/13 225 224
Compagnie Generale de
Geophysique (A)
7.500%, 05/15/15 50 52
Integrated Alarm Services
Group (A)
12.000%, 11/15/11 100 98
-----------------------------------------------------------------------------
TOTAL MISCELLANEOUS BUSINESS SERVICES 719
=============================================================================
MISCELLANEOUS MANUFACTURING [0.6%]
KI Holdings (B)
9.875%, 11/15/14 250 181
Maax Holdings (B)
11.250%, 12/15/12 200 78
-----------------------------------------------------------------------------
TOTAL MISCELLANEOUS MANUFACTURING 259
=============================================================================
PAPER & RELATED PRODUCTS [2.9%]
Abitibi-Consolidated
7.750%, 06/15/11 100 97
Appleton Papers
9.750%, 06/15/14 100 99
Exopac Holding (A)
11.250%, 02/01/14 100 102
Georgia-Pacific
7.700%, 06/15/15 100 101
JSG Funding
9.625%, 10/01/12 100 106
Neenah Paper
7.375%, 11/15/14 150 141
Newark Group
9.750%, 03/15/14 200 182
Norampac
6.750%, 06/01/13 100 95
Norske Skog Canada
7.375%, 03/01/14 250 236
-----------------------------------------------------------------------------
TOTAL PAPER & RELATED PRODUCTS 1,159
=============================================================================
PETROLEUM & FUEL PRODUCTS [11.8%]
Atlas Pipeline Partners (A)
8.125%, 12/15/15 200 208
Chesapeake Energy
6.250%, 01/15/18 100 98
Clayton William Energy
7.750%, 08/01/13 150 141
Colorado Interstate Gas (A)
6.800%, 11/15/15 150 153
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 35
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
HIGH YIELD BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Comstock Resources
6.875%, 03/01/12 $ 150 $ 148
Dynegy Holdings (A)
10.125%, 07/15/13 150 172
6.875%, 04/01/11 100 97
El Paso
7.000%, 05/15/11 275 276
El Paso Natural Gas
7.625%, 08/01/10 150 156
El Paso Production Holding
7.750%, 06/01/13 200 207
Forest Oil
8.000%, 06/15/08 150 156
8.000%, 12/15/11 100 108
Frontier Oil
6.625%, 10/01/11 150 150
Giant Industries
8.000%, 05/15/14 200 206
Pacific Energy
7.125%, 06/15/14 100 102
6.250%, 09/15/15 250 244
Parker Drilling
9.625%, 10/01/13 150 166
Plains Exploration & Production
8.750%, 07/01/12 150 160
Pogo Producing
6.875%, 10/01/17 300 296
Pride International
7.375%, 07/15/14 100 105
Range Resources
6.375%, 03/15/15 50 49
Semco Energy
7.125%, 05/15/08 250 251
Swift Energy
7.625%, 07/15/11 100 101
Targa Resources (A)
8.500%, 11/01/13 200 208
Vintage Petroleum
7.875%, 05/15/11 100 104
Whiting Petroleum
7.000%, 02/01/14 300 297
Williams
8.125%, 03/15/12 200 215
7.625%, 07/15/19 50 53
6.375%, 10/01/10 (A) 150 148
-----------------------------------------------------------------------------
TOTAL PETROLEUM & FUEL PRODUCTS 4,775
=============================================================================
PRINTING & PUBLISHING [3.6%]
American Color Graphics
10.000%, 06/15/10 100 71
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Dex Media (B)
9.000%, 11/15/13 $ 200 $ 169
Dex Media East
9.875%, 11/15/09 100 107
Dex Media West, Ser B
8.500%, 08/15/10 100 106
Emmis Operating
6.875%, 05/15/12 150 145
Haights Cross Operating
11.750%, 08/15/11 200 209
JII Holdings
13.000%, 04/01/07 70 57
Primedia
8.000%, 05/15/13 100 91
RH Donnelley
6.875%, 01/15/13 200 187
6.875%, 01/15/13 (A) 50 47
Sheridan Group
10.250%, 08/15/11 150 154
Warner Music Group
7.375%, 04/15/14 100 99
-----------------------------------------------------------------------------
TOTAL PRINTING & PUBLISHING 1,442
=============================================================================
REAL ESTATE INVESTMENT TRUST [0.4%]
Host Marriott, Ser O
6.375%, 03/15/15 150 148
=============================================================================
RETAIL [2.2%]
Asbury Automotive Group
9.000%, 06/15/12 150 153
Denny's Holdings
10.000%, 10/01/12 150 155
Group 1 Automotive
8.250%, 08/15/13 100 101
Jean Countu Group
8.500%, 08/01/14 150 138
Landry's Restaurants, Ser B
7.500%, 12/15/14 100 97
Rite Aid
8.125%, 05/01/10 100 102
True Temper Sports
8.375%, 09/15/11 150 137
-----------------------------------------------------------------------------
TOTAL RETAIL 883
=============================================================================
RUBBER & PLASTIC [0.4%]
Goodyear Tire & Rubber
9.000%, 07/01/15 150 152
=============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 36
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
HIGH YIELD BOND FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
SEMI-CONDUCTORS/INSTRUMENTS [0.2%]
Flextronics International
6.250%, 11/15/14 $ 100 $ 98
=============================================================================
STEEL & STEEL WORKS [1.4%]
AK Steel
7.875%, 02/15/09 115 116
7.750%, 06/15/12 200 202
Gerdau Ameristeel
10.375%, 07/15/11 100 110
International Steel Group
6.500%, 04/15/14 150 149
-----------------------------------------------------------------------------
TOTAL STEEL & STEEL WORKS 577
=============================================================================
TELEPHONES & TELECOMMUNICATIONS [9.8%]
Airgate PCS (A)
9.375%, 09/01/09 100 105
American Cellular, Ser B
10.000%, 08/01/11 150 163
American Tower
7.125%, 10/15/12 150 156
Centennial Communications
10.125%, 06/15/13 100 109
8.125%, 02/01/14 50 51
Cincinnati Bell
8.375%, 01/15/14 185 188
Dobson Cellular Systems
9.875%, 11/01/12 230 251
Dobson Communications
8.850%, 10/15/12 250 248
Insight Midwest
9.750%, 10/01/09 200 206
IPCS
11.500%, 05/01/12 150 171
IWO Escrow (B)
10.750%, 01/15/15 100 75
Nextel Communications, Ser D
7.375%, 08/01/15 350 367
Nextel Partners
8.125%, 07/01/11 150 159
PanAmSat
9.000%, 08/15/14 96 101
Qwest
7.625%, 06/15/15 564 603
5.625%, 11/15/08 100 99
Rogers Wireless
9.625%, 05/01/11 100 115
7.250%, 12/15/12 50 53
Rural Cellular
9.750%, 01/15/10 200 203
SBA Telecommunications (A) (B)
9.750%, 12/15/11 98 94
DESCRIPTION FACE AMOUNT (000)/SHARES VALUE (000)
- --------------------------------------------------------------------------------
Telenet Group Holding (A) (B)
11.500%, 06/15/14 $ 22 $ 18
Time Warner Telecom Holdings
9.250%, 02/15/14 100 107
Triton PCS
8.500%, 06/01/13 150 143
UbiquiTel Operating
9.875%, 03/01/11 150 164
-----------------------------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATIONS 3,949
=============================================================================
TRANSPORTATION SERVICES [1.3%]
American Commercial Lines
9.500%, 02/15/15 97 107
H-Lines Financial Holdings (B)
10.987%, 04/01/13 130 108
NCL
10.625%, 07/15/14 100 103
Ship Finance
8.500%, 12/15/13 200 188
-----------------------------------------------------------------------------
TOTAL TRANSPORTATION SERVICES 506
=============================================================================
WHOLESALE [0.2%]
Collins & Aikman Floor Cover, Ser B
9.750%, 02/15/10 100 94
=============================================================================
TOTAL CORPORATE BONDS
(Cost $38,582) 38,921
=======================================================================
COMMON STOCK [0.1%]
COMMERCIAL SERVICES [0.0%]
Magellan Health Services* 69 3
=============================================================================
RETAIL [0.1%]
Crunch Equity Holding* 56 56
=============================================================================
TOTAL COMMON STOCK
(Cost $61) 59
=======================================================================
CASH EQUIVALENTS [2.0%]
Evergreen Select Money Market,
Institutional Class, 4.63%(1) 398,192 398
Fidelity Institutional Domestic
Money Market Portfolio,
Cl I, 4.59%(1) 398,192 398
-----------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(Cost $796) 796
=======================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 37
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
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 [98.6%]
(Cost $39,439) 39,776
=======================================================================
OTHER ASSETS AND LIABILITIES -- [1.4%]
Payable for Investment Securities Purchased (234)
Income Distributions Payable (104)
Payable for Fund Shares Redeemed (45)
Investment Advisory Fees Payable (22)
Shareholder Servicing & Distribution
Fees Payable (14)
Administration Fees Payable (2)
Other Assets and Liabilities, Net 883
-----------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES 462
=======================================================================
NET ASSETS -- [100.0%] $ 40,238
=============================================================================
NET ASSETS:
Paid-in-Capital (unlimited authorization --
$0.01 par value) $ 41,249
Accumulated net realized loss on investments (1,348)
Unrealized appreciation on investments 337
-----------------------------------------------------------------------------
NET ASSETS $ 40,238
=============================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($20,682,334 / 2,292,722 shares) $ 9.02
=============================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($19,555,375 / 2,167,886 shares) $ 9.02
=============================================================================
DESCRIPTION
- --------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY
(1) RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF MARCH 31, 2006.
(A) SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF
1933, AS AMENDED.THIS SECURITY MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM
REGISTRATION NORMALLY TO QUALIFIED INSTITUTIONS. SECURITY CONSIDERED
LIQUID. ON MARCH 31, 2006, THE VALUE OF THESE SECURITIES AMOUNTED TO
$5,463 (000), REPRESENTING 13.6% OF THE NET ASSETS OF THE FUND.
(B) STEP BOND -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS IS THE RATE
IN EFFECT ON MARCH 31, 2006. THE COUPON ON A STEP BOND CHANGES ON A
SPECIFIC DATE.
(C) FLOATING RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET
ASSETS IS THE RATE IN EFFECT ON MARCH 31, 2006.
(D) IN DEFAULT ON INTEREST PAYMENTS.
CL -- CLASS
SER -- SERIES
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 38
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
PRIME MONEY MARKET FUND
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
SECTOR WEIGHTINGS*:
47.4% Commercial Paper
39.6% Repurchase Agreements
8.2% U.S. Government Agency Obligations
2.4% Corporate Bond
2.4% Certificate of Deposit
0.0% Cash Equivalent
* Percentages based on total investments.
- --------------------------------------------------------------------------------
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
COMMERCIAL PAPER (A) [47.5%]
ASSET-BACKED SECURITIES [18.7%]
Amsterdam Funding
4.570%, 04/11/06 $ 25,000 $ 24,968
Barton Capital
4.580%, 04/05/06 25,000 24,987
Eiffel Funding
4.770%, 05/02/06 25,000 24,897
Laguna (C)
4.570%, 04/03/06 25,000 24,994
Premier Asset
4.810%, 05/26/06 24,000 23,824
Scaldis Capital
4.770%, 04/25/06 20,000 19,937
Windmill Funding
4.580%, 04/12/06 25,000 24,965
Yorktown Capital (C)
4.710%, 04/20/06 25,000 24,938
-----------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES 193,510
=============================================================================
BANKS [9.6%]
Landesbank Baden
4.740%, 04/03/06 25,000 24,993
Lloyds TSB Bank
4.760%, 04/04/06 25,000 24,990
Societe Generale
4.670%, 04/04/06 25,000 24,990
UBS Finance
4.730%, 04/06/06 25,000 24,984
-----------------------------------------------------------------------------
TOTAL BANKS 99,957
=============================================================================
FINANCE AUTO LOANS [4.8%]
American Honda Finance (C)
4.580%, 01/26/07 25,000 25,000
Toyota Motor Credit
4.750%, 04/11/06 25,000 24,967
-----------------------------------------------------------------------------
TOTAL FINANCE AUTO LOANS 49,967
=============================================================================
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
FINANCIAL SERVICES [2.4%]
General Electric Capital
4.660%, 04/05/06 $ 25,000 $ 24,987
=============================================================================
INSURANCE [2.4%]
Prudential Fund
4.700%, 04/10/06 25,000 24,971
=============================================================================
PERSONAL CREDIT INSTITUTIONS [2.4%]
ING Funding
4.680%, 04/17/06 25,000 24,948
=============================================================================
SECURITY BROKERS & DEALERS [2.4%]
Merrill Lynch
4.630%, 04/05/06 25,000 24,987
=============================================================================
TELEPHONES & TELECOMMUNICATIONS [2.4%]
Vodafone Group
4.655%, 04/18/06 25,000 24,945
=============================================================================
TRANSPORTATION SERVICES [2.4%]
United Parcel Service
4.550%, 04/03/06 25,000 24,994
=============================================================================
TOTAL COMMERCIAL PAPER
(Cost $493,266) 493,266
=======================================================================
U.S.GOVERNMENT AGENCY OBLIGATIONS [8.2%]
FHLB
4.200%, 05/24/06 (B) 10,000 10,000
4.150%, 06/22/06 (B) 5,000 5,000
4.150%, 07/11/06 (B) 5,000 5,000
4.200%, 08/09/06 (B) 5,000 5,000
3.875%, 08/11/06 (B) 5,000 5,000
4.100%, 09/13/06 (B) 5,000 5,000
5.000%, 09/29/06 5,000 5,000
4.050%, 09/29/06 5,000 5,000
4.550%, 12/29/06 5,000 5,000
4.600%, 01/08/07 5,000 5,000
4.580%, 02/07/07 5,000 5,000
4.870%, 03/12/07 5,000 5,000
FHLMC, MTN
4.000%, 04/12/06 (B) 5,000 5,000
4.125%, 05/15/06 (B) 5,000 5,000
FNMA
4.250%, 06/21/06 (B) 10,000 10,000
-----------------------------------------------------------------------------
TOTAL U.S.GOVERNMENT AGENCY OBLIGATIONS
(Cost $85,000) 85,000
=======================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 39
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
PRIME MONEY MARKET FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000)/SHARES VALUE (000)
- --------------------------------------------------------------------------------
CORPORATE BOND [2.4%]
BANKS [2.4%]
Bank of America (A)
4.810%, 11/07/06 $ 25,000 $ 25,000
-----------------------------------------------------------------------------
TOTAL CORPORATE BOND
(Cost $25,000) 25,000
=======================================================================
CERTIFICATE OF DEPOSIT [2.4%]
First Tennessee Bank
4.650%, 04/24/06 25,000 25,000
-----------------------------------------------------------------------------
TOTAL CERTIFICATE OF DEPOSIT
(Cost $25,000) 25,000
=======================================================================
CASH EQUIVALENT [0.0%]
Fidelity Institutional Domestic
Money Market Portfolio,
Cl I, 4.59%(1) 47,290 47
-----------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(Cost $47) 47
=======================================================================
REPURCHASE AGREEMENTS (D) [39.7%]
Banc of America
4.800%, date 3/31/06
repurchased on 04/03/06,
repurchase price $100,040,000
(collateralized by a U.S.
Goverment obligation;
par value $118,962,519,
5.000%, 03/01/35; with
total market value
$102,000,001) 100,000 100,000
Barclay Bank
4.840%, dated 3/31/06,
repurchased on 04/03/06,
repurchase price, $62,525,208
(collateralized by U.S.
Government obligations,
ranging in par value
$16,002,195-$36,522,836,
4.500%-6.000%, 02/01/20-
02/01/35; with total market
value $63,750,000) 62,500 62,500
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Bear Stearns
4.830%, dated 3/31/06,
repurchased on 04/03/06,
repurchase price $125,005,312
(collateralized by U.S.
Governement obligations,
ranging in par value
$58,343,733-$79,070,000,
5.630%-5.920% (A), 10/01/32-
12/01/35; with total market
value $127,502,792) $ 125,000 $ 125,000
Nomura
4.900%, dated 3/31/06,
repurchased on 04/03/06,
repurchase price $125,051,042
(collateralized by a U.S.
Government obligation,
par value $3,346,041, 5.5000%,
03/01/21; with total market
value $127,500,000) 125,000 125,000
-----------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost $412,500) 412,500
=======================================================================
TOTAL INVESTMENTS [100.2%]
(Cost $1,040,813) 1,040,813
=======================================================================
OTHER ASSETS AND LIABILITIES -- [-0.2%]
Income Distributions Payable (2,844)
Shareholder Servicing & Distribution
Fees Payable (410)
Investment Advisory Fees Payable (227)
Administration Fees Payable (51)
Other Assets and Liabilities, Net 977
-----------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES (2,555)
=======================================================================
NET ASSETS -- [100.0%] $ 1,038,258
=============================================================================
NET ASSETS:
Paid-in-Capital (unlimited authorization --
$0.01 par value) $ 1,038,660
Accumulated net realized loss on investments (402)
-----------------------------------------------------------------------------
NET ASSETS $ 1,038,258
=============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 40
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
PRIME MONEY MARKET FUND (CONCLUDED)
DESCRIPTION VALUE
- --------------------------------------------------------------------------------
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($329,188,771 / 329,324,228 shares) $ 1.00
=============================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($465,511,060 / 465,780,147 shares) $ 1.00
=============================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class S
($243,558,508 / 243,648,724 shares) $ 1.00
=============================================================================
(1) RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF MARCH 31, 2006.
(A) THE RATE REPORTED IS THE EFFECTIVE YIELD AT TIME OF PURCHASE.
(B) STEP BOND -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS IS THE RATE
IN EFFECT ON MARCH 31, 2006.THE COUPON ON A STEP BOND CHANGES ON A
SPECIFIC DATE.
(C) SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF
1933.THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM
REGISTRATION NORMALLY TO QUALIFIED INSTITUTIONS. ON MARCH 31, 2006, THE
VALUE OF THESE SECURITIES AMOUNTED TO $74,932 (000), REPRESENTING 7.2% OF
THE NET ASSETS OF THE FUND.
(D) TRI-PARTY REPURCHASE AGREEMENT
CL -- CLASS
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 41
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
GOVERNMENT MONEY MARKET FUND
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
SECTOR WEIGHTINGS*:
57.1% U.S. Government Agency Obligations
42.9% Repurchase Agreements
* Percentages are based on total investments.
- --------------------------------------------------------------------------------
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
U.S.GOVERNMENT AGENCY OBLIGATIONS [57.1%]
FFCB
4.530%, 04/03/06 (A) $ 100,000 $ 99,975
FHLB
4.400%, 04/03/06 (A) 50,000 49,988
4.460%, 04/04/06 (A) 150,000 149,943
4.570%, 04/05/06 (A) 26,480 26,467
4.550%, 04/06/06 (A) 225,000 224,857
4.570%, 04/10/06 (A) 50,000 49,943
4.600%, 04/12/06 (A) 100,000 99,859
4.200%, 05/24/06 (B) 18,215 18,213
4.150%, 06/22/06 (B) 20,000 20,000
4.150%, 07/11/06 (B) 25,000 25,000
4.200%, 08/09/06 (B) 27,395 27,395
3.875%, 08/11/06 (B) 25,000 25,000
4.250%, 08/25/06 (B) 25,000 25,000
4.100%, 09/13/06 (B) 25,000 25,000
5.000%, 09/29/06 25,000 25,000
4.050%, 09/29/06 25,000 25,000
4.550%, 12/29/06 25,000 25,000
4.600%, 01/08/07 25,000 25,000
4.580%, 02/07/07 25,000 25,000
4.870%, 03/12/07 25,000 25,000
FHLMC
4.650%, 04/03/06 (A) 100,000 99,975
FHLMC, MTN
4.000%, 04/12/06 (B) 25,000 25,000
4.125%, 05/15/06 (B) 25,000 25,000
FNMA
4.125%, 05/05/06 (B) 25,000 25,000
4.250%, 06/21/06 (B) 20,000 20,000
4.000%, 07/26/06 (B) 10,000 10,000
-----------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $1,221,615) 1,221,615
=======================================================================
REPURCHASE AGREEMENTS (C) [43.0%]
Bank of America
4.800%, dated 3/31/06,
repurchased on 04/03/06,
repurchase price $200,080,000
(collaterized by a U.S.
Government obligation,
par value $237,925,037,
5.000%, 03/01/35; with
total market value
$204,000,000) 200,000 200,000
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Barclay Bank
4.840%, dated 3/31/06,
repurchased on 04/03/06,
repurchase price $168,567,962
(collateralized by U.S.
Government obligations,
ranging in par value
$460,742-$40,389,133,
4.825%-6.000%, 12/01/34-
03/01/36; with total market
value $171,670,001) $ 168,500 $ 168,500
Bear Stearns Inc. & Co.
4.830%, dated 3/31/06,
repurchased on 04/03/06,
repurchase price $200,080,500
(collateralized by U.S.Treasury
obligations, ranging in par value
$17,295,000-$74,568,198,
4.353%-6.202%, 2/01/31-
1/01/36, with total market
value $204,000,510) 200,000 200,000
Deutsche Bank
4.800%, dated 3/31/06,
repurchased on 04/03/06,
repurchase price $100,040,000
(collateralized by U.S.
Government obligations,
ranging in par value
$21,725,424-$45,000,000,
5.000%-5.500%, 7/15/29-
6/25/32; with total market
value $102,000,000) 100,000 100,000
Nomura
4.900%, dated 3/31/06,
repurchased on 04/03/06,
repurchase price $150,061,250
(collaterized by U.S.
Government obligations,
ranging in par value
$887,069-$28,252,775,
4.500%-7.500%, 06/01/08-
04/01/36; with total market
value $153,000,000) 150,000 150,000
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 42
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
GOVERNMENT MONEY MARKET FUND (CONCLUDED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
UBS Warburg
4.800%, dated 3/31/06,
repurchased on 04/03/06,
repurchase price $100,040,000
(collateralized by U.S.
Government obligations,
ranging in par value
$15,945,000-$25,518,496,
4.500%-6.000%, 10/01/18-
09/01/34; with total market
value $102,002,980) $ 100,000 $ 100,000
-----------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost $918,500) 918,500
=======================================================================
TOTAL INVESTMENTS [100.1%]
(Cost $2,140,115) 2,140,115
=======================================================================
OTHER ASSETS AND LIABILITIES -- [-0.1%]
Income Distributions Payable (2,742)
Shareholder Servicing & Distribution
Fees Payable (868)
Investment Advisory Fees Payable (462)
Administration Fees Payable (99)
Other Assets and Liabilities, Net 2,502
-----------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES (1,669)
=======================================================================
NET ASSETS -- [100.0%] $ 2,138,446
=============================================================================
NET ASSETS:
Paid-in-Capital (unlimited authorization --
$0.01 par value) $ 2,138,446
Accumulated net investment income 1
Accumulated net realized loss on investments (1)
-----------------------------------------------------------------------------
NET ASSETS $ 2,138,446
=============================================================================
DESCRIPTION VALUE
- --------------------------------------------------------------------------------
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($46,532,102 / 46,533,516 shares) $ 1.00
=============================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($1,853,034,431 / 1,853,031,743 shares) $ 1.00
=============================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class S
($238,879,803 / 238,880,420 shares) $ 1.00
=============================================================================
(A) THE RATE REPORTED IS THE EFFECTIVE YIELD AT TIME OF PURCHASE.
(B) STEP BOND -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS IS THE RATE
IN EFFECT ON MARCH 31, 2006. THE COUPON ON A STEP BOND CHANGES ON A
SPECIFIC DATE.
(C) TRI-PARTY REPURCHASE AGREEMENT
FFCB -- FEDERAL FARM CREDIT BANK
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
MTN -- MEDIUM TERM NOTE
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 43
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT MONEY MARKET FUND
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
SECTOR WEIGHTINGS*:
13.9% General Obligation
12.2% General Revenue
12.1% Housing
11.5% Water
9.5% Industrial Development
7.6% Education
7.5% Power
7.3% Transportation
6.9% Healthcare
5.8% Public Facilities
5.2% Utilities
0.5% Equipment
* Percentages based on total investments.
- --------------------------------------------------------------------------------
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
MUNICIPAL BONDS [97.4%]
CALIFORNIA [97.4%]
ABAG, Finance Authority for
Non-Profit Corporations,
Hamlin School Project,
Ser A, GO (A) (B) (C)
3.160%, 08/01/32 $ 1,500 $ 1,500
ABAG, Finance Authority for
Non-Profit Corporations,
Public Policy Institute,
Ser A, RB (A) (B) (C)
3.160%, 11/01/31 2,955 2,955
ABAG, Finance Authority for
Non-Profit Corporations,
School of the Sacred
Heart, Ser B, RB (A) (B) (C)
3.280%, 06/01/30 8,300 8,300
ABAG, Finance Authority for
Non-Profit Corporations,
Ser C, COP (A) (B) (C)
3.160%, 10/01/27 9,895 9,895
ABAG, Finance Authority for
Non-Profit Corporations,
Ser D, COP (A) (B) (C)
3.160%, 10/01/27 2,555 2,555
ABAG, Financial Authority for
Non-Profit Corporations,
Jewish Community Center
Project, RB (A) (B) (C)
3.140%, 11/15/31 8,570 8,570
Anaheim, Multi-Family Housing
Authority, HeritageVillage
Apartments Project, Ser A,
RB (A) (B) (D)
3.140%, 07/15/33 4,685 4,685
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Antelope Valley, Healthcare
Project, Ser A, RB (A) (B) (C)
3.170%, 09/01/17 $ 13,900 $ 13,900
Berkeley, Unified School
District,TRAN
4.500%, 11/01/06 6,000 6,053
Berkeley,YMCA Project,
RB (A) (B) (C)
3.140%, 06/01/23 1,905 1,905
California State, Bay Area Toll
Authority, San Francisco
Bay Area Project, Ser A,
RB, AMBAC (A) (B)
3.050%, 04/01/39 10,800 10,800
California State, Community
College Financing Authority,
Ser A,TRAN, FSA
4.000%, 06/30/06 4,500 4,515
California State, Daily
Kindergarten University,
Ser A-2, GO (A) (B) (C)
3.040%, 05/01/34 7,000 7,000
California State, Daily
Kindergarten University,
Ser A-3, GO (A) (B) (C)
3.040%, 05/01/34 4,000 4,000
California State, Daily
Kindergarten University,
Ser A-5, GO (A) (B) (C)
3.070%, 05/01/34 8,000 8,000
California State, Department of
Water Resource & Power,
Ser B-1, RB (A) (B) (C)
3.150%, 05/01/22 10,000 10,000
California State, Department of
Water Resource & Power,
Ser B-4, RB (A) (B) (C)
3.070%, 05/01/22 4,400 4,400
California State, Department of
Water Resource & Power,
Ser B-5, RB
3.160%, 05/01/22 6,000 6,000
California State, Department of
Water Resource & Power,
Ser C-15, RB (A) (B) (C)
3.140%, 05/01/22 5,000 5,000
California State, Department of
Water Resource & Power,
Sub-Ser F-3, RB (A) (B) (C)
3.150%, 05/01/21 4,615 4,615
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 44
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
California State, Department of
Water Resourse & Power,
Ser B-6, RB (A) (B) (C)
3.100%, 05/01/22 $ 1,200 $ 1,200
California State, Economic
Development Financing
Authority, KQED Project,
RB (A) (B) (C)
3.130%, 04/01/20 1,400 1,400
California State, Economic
Recovery Authority,
Ser C-1, RB (A) (B)
3.070%, 07/01/23 3,250 3,250
California State, Economic
Recovery Authority,
Ser C-10, RB (A) (B) (C)
3.170%, 07/01/23 8,000 8,000
California State, Economic
Recovery Authority,
Ser C-12, RB (A) (B)
3.130%, 07/01/23 1,100 1,100
California State, Economic
Recovery Authority,
Ser C-13, RB, XLCA (A) (B)
3.170%, 07/01/23 5,000 5,000
California State, Economic
Recovery Authority,
Ser C-4, RB (A) (B)
3.060%, 07/01/23 10,000 10,000
California State, Economic
Recovery Authority,
Ser C-7, RB (A) (B) (C)
3.070%, 07/01/23 5,350 5,350
California State, Economic
Recovery Authority,
Ser C-8, RB (A) (B) (C)
3.070%, 07/01/23 3,000 3,000
California State, Educational
Facilities Authority, Chapman
University Project,
RB (A) (B) (C)
3.300%, 12/01/30 1,000 1,000
California State, Educational
Facilities Authority, University
San Francisco, RB (A) (B) (C)
3.150%, 05/01/30 5,400 5,400
California State, Health Facilities
Finance Authority, Adventist
Health Systems Project,
Ser B, RB (A) (B) (C)
3.140%, 09/01/25 4,400 4,400
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
California State, Health Facilities
Finance Authority, Adventist
Hospital Project,
Ser A, RB, MBIA (A) (B)
3.140%, 09/01/28 $ 6,875 $ 6,875
California State, Housing
Finance Agency, Multi-Family
Housing Project, Ser D,
RB (A) (B)
3.070%, 02/01/31 9,105 9,105
California State, Infrastructure &
Economic Authority, Asian Art
Museum Foundation Project,
RB, MBIA (A) (B)
3.140%, 06/01/34 19,400 19,400
California State, Infrastructure &
Economic Authority, Colburn
School Project, Ser B,
RB (A) (B) (C)
3.130%, 08/01/37 3,655 3,655
California State, Infrastructure &
Economic Authority, J. Paul
Getty Trust Project,
Ser D, RB (A)
3.250%, 04/01/33 10,000 10,000
California State, RAN
4.500%, 06/30/06 4,000 4,013
California State,
Ser A-1, GO (A) (B) (C)
3.040%, 05/01/33 5,750 5,750
California State,
Ser A-2, GO (A) (B) (C)
3.070%, 05/01/33 12,000 12,000
California State, Ser B,
Sub-Ser B-1, GO (A) (B) (C)
3.140%, 05/01/40 15,000 15,000
California State, Ser B,
Sub-Ser B-6, GO (A) (B) (C)
3.150%, 05/01/40 4,500 4,500
California State,Weekly
Kindgarten University,
Ser B-5, GO (A) (B) (C)
3.140%, 05/01/34 5,000 5,000
California Statewide,
Communities Development
Authority, Childrens
Hospital Project, Ser A, RB,
AMBAC (A) (B)
3.120%, 08/15/32 1,300 1,300
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 45
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
California Statewide,
Communities Development
Authority, Childrens Hospital
Project, Ser B, RB,
AMBAC (A) (B)
3.120%, 08/15/32 $ 1,800 $ 1,800
California Statewide,
Communties Development
Authority, North Peninsula
Jewish Project, RB (A) (B) (C)
3.140%, 07/01/34 6,300 6,300
Chaffey, Community College
District, Election of 2002
Project, Ser B, GO, MBIA
3.000%, 06/01/06 2,150 2,151
Corona, Multi-Family Housing
Authority, Country Hills
Project, Ser A, RB (A) (B) (D)
3.130%, 02/01/25 6,475 6,475
East Bay, Municipal Utilities
District Authority,
Ser A, RB, FSA (A) (B)
3.120%, 06/01/25 5,220 5,220
East Bay, Municipal Utilities
District Authority,
Sub-Ser 1, RB,
XLCA (A) (B)
3.130%, 06/01/38 6,700 6,700
East Bay, Municipal Utilities
District Authority,
Sub-Ser B-1, RB,
XLCA (A) (B)
3.130%, 06/01/38 7,000 7,000
East Bay, Municipal Utilities
District Authority,
Sub-Ser B-3, RB,
XLCA (A) (B)
3.070%, 06/01/38 14,880 14,880
Eastern California, Municipal
Water District, COP,
Ser B,TA, FGIC (A) (B)
3.130%, 07/01/20 5,000 5,000
Fremont, Family Center Finance
Project, COP (A) (B) (C)
3.150%, 08/01/28 4,400 4,400
Fremont, Office Building
Improvement & Fire
Equipment Project,
COP (A) (B) (C)
3.150%, 08/01/30 3,395 3,395
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Fresno, Multi-Family Housing
Authority, Stonepine
Apartment Project,
Ser A, RB (A) (B) (D)
3.130%, 02/15/31 $ 1,595 $ 1,595
Fresno, Palm Lakes Apartment
Project, RB (A) (B) (C)
3.130%, 05/01/15 3,615 3,615
Glendale, Police Building
Project, COP (A) (B)
3.170%, 06/01/30 20,000 20,000
Grant, Joint Union High School
District, School Facility
Bridge Funding Project,
COP, FSA (A) (B)
3.130%, 09/01/34 1,000 1,000
Huntington Beach, Union High
School District, School
Facility Bridge Funding
Project, COP, FSA (A) (B)
3.130%, 09/01/28 1,890 1,890
Irvine Ranch,Water District,
Capital Improvement Project,
COP (A) (B) (C)
3.160%, 08/01/16 6,350 6,350
Irvine Ranch,Water District,
GO (A) (B) (C)
3.160%, 01/01/21 9,000 9,000
Irvine, Improvement Board, Act
1915 Project, District #93-14,
SAB (A) (B) (C)
3.160%, 09/02/25 14,347 14,347
Irvine, Improvement Board, Act
1915 Project, Ser A,
SAB (A) (B) (C)
3.100%, 09/02/29 3,786 3,786
Kings County, Multi-Family
Housing Authority, Edgewater
Isle Apartments Project,
Ser A, RB (A) (B) (D)
3.130%, 02/15/31 10,710 10,710
Lemon Grove, Multi-Family
Housing, Hillside Terrace
Project, RB (A) (B) (D)
3.130%, 02/15/31 4,955 4,955
Lodi, Electric System Authority,
Ser A, COP, MBIA (A) (B)
3.120%, 07/01/32 9,360 9,360
Los Angeles County, Multi-
Family Housing Authority,
Malibu Canyon Apartments
Project, Ser B, RB (A) (B) (C)
3.200%, 06/01/10 8,000 8,000
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 46
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Los Angeles County, Sanitation
Districts Financing Authority,
Capital Project, Ser A, RB, FSA
5.000%, 10/01/06 $ 1,210 $ 1,221
Los Angeles County, School
District, Ser A,TRAN, FSA
4.000%, 06/30/06 6,220 6,241
Los Angeles County,
Ser A,TRAN
4.000%, 06/30/06 6,000 6,017
Los Angeles, Department of
Water & Power, Sub-Ser B-1,
RB (A) (B)
3.170%, 07/01/35 11,000 11,000
Los Angeles, Department of
Water & Power, Sub-Ser B-3,
RB (A) (B)
3.170%, 07/01/35 3,300 3,300
Los Angeles, Department of
Water, Sub-Ser -2, RB (A) (B)
3.100%, 07/01/35 7,000 7,000
Los Angeles, Metropolitan
Transit Commission, Ser A,
RB, FGIC (A) (B)
3.120%, 07/01/12 7,200 7,200
Los Angeles, Metropolitan
Transportation Authority,
Proposition C, Ser A, RB,
MBIA (A) (B)
3.130%, 07/01/20 11,085 11,085
Los Angeles, Samuel A. Fryer
Vavney, Ser A, COP
(A) (B) (C)
3.150%, 08/01/21 7,000 7,000
Los Angeles,TRAN
4.000%, 06/30/06 5,370 5,389
Los Angeles, Unified School
District, Administration
Building Project, Ser A,
COP, AMBAC (A) (B)
3.170%, 10/01/24 8,365 8,365
Los Angeles,Water & Power
Resource Authority,
Power System Project,
Sub-Ser A-7, RB (A) (B)
3.140%, 07/01/35 15,000 15,000
Los Angeles,Water & Power
Resource Authority,
Sub-Ser B-2, RB (A) (B)
3.120%, 07/01/34 2,000 2,000
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Moorpark, Unified School
District, Ser A, COP,
FSA (A) (B)
3.130%, 11/01/28 $ 1,000 $ 1,000
Newport Beach, Hoag
Memorial Hospital,
Ser A, RB (A) (B)
3.100%, 10/01/26 4,700 4,700
Newport Beach, Hoag
Memorial Hospital,
Ser C, RB (A) (B)
3.100%, 10/01/26 7,870 7,870
Oakland, Capital Equipment
Project, COP (A) (B) (C)
3.170%, 12/01/15 3,890 3,890
Oakland,TRAN
4.000%, 07/17/06 6,000 6,024
Oakland-Alameda County,
Coliseum Project, Ser C-1,
RB (A) (B) (C)
3.170%, 02/01/25 15,000 15,000
Orange County, Apartment
Development Authority,
Bear Brand Apartments
Project, RB (A) (B) (D)
3.120%, 11/01/07 1,900 1,900
Orange County, Apartment
Development Authority,
Hidden Hills Project,
Ser C, RB (A) (B)
3.200%, 11/01/09 3,200 3,200
Orange County, Apartment
Development Authority,
Larkspur Canyon Apartments,
Ser A, RB (A) (B) (D)
3.160%, 06/15/37 1,200 1,200
Orange County, Apartment
Development Authority,
Riverbend Apartments
Project, Ser B, RB (A) (B) (D)
3.140%, 12/01/29 5,000 5,000
Orange County, Apartment
Development Authority,
Seaside Meadow Project,
Ser C, RB (A) (B) (D)
3.120%, 08/01/08 8,000 8,000
Orange County, Sanitation
District Authority,
Ser A, COP (A) (B)
3.100%, 08/01/29 5,200 5,200
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 47
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Orange County,Water
District Authority,
Ser A, COP (A) (B)
3.120%, 08/01/42 $ 2,800 $ 2,800
Pasadena, Public Financing
Authority, Rose Bowl
Refinancing & Improvement
Project, RB (A) (B) (C)
3.130%, 12/01/23 5,000 5,000
Pasadena, Rose Bowl
Improvements Project,
COP (A) (B) (C)
3.260%, 12/01/11 2,300 2,300
Riverside County, Asset Leasing
Authority, Southwest Justice
Center Project, Ser B,
RB, MBIA (A) (B)
3.120%, 11/01/32 4,100 4,100
Riverside County, Ser C,
COP (A) (B) (C)
3.130%, 12/01/15 15,700 15,700
Riverside, Unified School
District, Ser C, School
Facility Bridge Funding
Project, COP, FSA (A) (B)
3.130%, 09/01/27 1,610 1,610
Riverside-San Bernardino,
Sub-Pass Thru Obligations,
Ser B, RB
3.130%, 07/01/06 1,350 1,350
Sacramento County, Housing
Authority, Bent Tree
Apartments Project,
Ser A, RB (A) (B) (D)
3.130%, 02/15/31 2,500 2,500
Sacramento County, Ser A,
TRAN
4.000%, 07/10/06 15,000 15,059
San Bernardino County,
Housing Authority, Alta Loma
Heritage Project, Ser A,
RB (A) (B) (C)
3.150%, 02/01/23 1,354 1,354
San Diego, County & School
District Authority, Ser A,
TRAN
4.000%, 07/14/06 7,860 7,891
San Diego, Museum of Art
Project, COP (A) (B) (C)
3.280%, 09/01/30 1,400 1,400
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
San Diego, Unified School
District, Ser A,TRAN
4.000%, 07/24/06 $ 3,000 $ 3,012
San Francisco (City & County),
Housing Authority, Bayside
Village Project D, Ser A,
RB (A) (B) (C)
3.150%, 12/01/16 6,000 6,000
San Francisco, Bay Area Toll
Authority, Ser A, RB,
AMBAC (A) (B)
3.050%, 04/01/36 15,450 15,450
San Francisco, Bay Area Toll
Authority, Ser C, RB,
AMBAC (A) (B)
3.140%, 04/01/25 5,650 5,650
San Francisco, Building Authority,
Civic Center Complex Project,
Ser A, RB, AMBAC
Pre-Refunded @ 102 (E)
5.250%, 12/01/06 1,000 1,034
San Jose, Redevelopment
Agency, Merged Area
Redevelopment Project,
Ser A, RB (A) (B) (C)
3.120%, 07/01/26 3,200 3,200
Santa Clara County, Financing
Authority,VMC Facility
Replacement Project,
Ser B, RB (A) (B)
3.120%, 11/15/25 12,375 12,375
Santa Clara Valley,
Transportation Authority,
Ser A, RB, AMBAC (A) (B)
3.100%, 06/01/26 6,000 6,000
Southern California,
Metropolitan Water District
Authority, Ser A, RB (A) (B)
3.140%, 07/01/25 3,800 3,800
Southern California,
Metropolitan Water District
Authority, Ser B, RB (A) (B)
3.100%, 07/01/27 2,100 2,100
Southern California,
Metropolitan Water District
Authority, Ser C-1, RB (A) (B)
3.100%, 07/01/30 5,000 5,000
Southern California,
Metropolitan Water District
Authority, Ser C-1, RB (A) (B)
2.950%, 07/01/36 1,360 1,360
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 48
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Southern California,
MetropolitanWater District
Authority, Ser C-2, RB (A) (B)
3.070%, 07/01/36 $ 4,650 $ 4,650
Southern California,
Metropolitan Water District
Authority, Ser C-3, RB (A) (B)
3.120%, 07/01/30 6,200 6,200
Southern California,
Metropolitan Water District
Authority,Water Works
Authorization, Ser B,
RB (A) (B)
3.100%, 07/01/28 4,000 4,000
Southern California,
Metro Water District
Authority,Waterworks
Authorization, Ser B-4 (A) (B)
3.120%, 07/01/35 9,350 9,350
State Of California,
Ser B-3, GO (A) (B) (C)
3.170%, 05/01/33 6,100 6,100
Sunnyvale, Government Center
Site Acquisition Project,
Ser A, COP, AMBAC (A) (B)
3.140%, 04/01/31 4,405 4,405
Three Valleys, Municipal Water
District Authority, Miramar
Water Treatment Project,
COP (A) (B) (C)
3.170%, 11/01/14 4,700 4,700
Turlock, Irrigation District,
Capital Improvement &
Refunding Project,
COP (A) (B) (C)
3.140%, 01/01/31 3,350 3,350
Upland, Community
Redevelopment Authority,
Sunset Ridge & Village
Apartments Project,
RB (A) (B) (C)
3.140%, 12/01/29 6,700 6,700
Westminster, Civic Center
Refinancing Program,
Ser A, COP, AMBAC (A) (B)
3.160%, 06/01/22 3,100 3,100
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Yolo County, Multi-Family
Housing Authority, Primero
Grove Project, Ser A,
RB (A) (B) (C)
3.110%, 11/01/27 $ 10,485 $ 10,485
-----------------------------------------------------------------------------
TOTAL CALIFORNIA 771,162
=============================================================================
TOTAL MUNICIPAL BONDS
(Cost $771,162) 771,162
=======================================================================
TOTAL INVESTMENTS [97.4%]
(Cost $771,162) 771,162
=======================================================================
OTHER ASSETS AND LIABILITIES -- [2.6%]
Income Distributions Payable (539)
Shareholder Servicing & Distribution
Fees Payable (320)
Investment Advisory Fees Payable (137)
Administration Fees Payable (37)
Other Assets and Liabilities, Net 21,758
-----------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES 20,725
=======================================================================
NET ASSETS -- [100.0%] $ 791,887
=============================================================================
NET ASSETS:
Paid-in-Capital (unlimited authorization --
$0.01 par value) $ 791,886
Accumulated net realized gain on investments 1
-----------------------------------------------------------------------------
NET ASSETS $ 791,887
=============================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($66,621,193 / 66,622,435 shares) $ 1.00
=============================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($620,723,979 / 620,726,421 shares) $ 1.00
=============================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class S
($104,541,418 / 104,537,806 shares) $ 1.00
=============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 49
STATEMENT OF NET ASSETS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONCLUDED)
DESCRIPTION
- --------------------------------------------------------------------------------
(A) FLOATING RATE SECURITY -- THE RATE REFLECTED ON THE STATEMENT OF NET
ASSETS IS THE RATE IN EFFECT ON MARCH 31, 2006.
(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) 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
FGIC -- FINANCIAL GUARANTY INSURANCE COMPANY
FHLMC -- FEDERAL HOUSING LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
FSA -- FINANCIAL SECURITY ASSURANCE
GO -- GENERAL OBLIGATION
MBIA -- MUNICIPAL BOND INSURANCE ASSOCIATION
RAN -- REVENUE ANTICIPATION NOTE
RB -- REVENUE BOND
SAB -- SPECIAL ASSESSMENT BOND
SER -- SERIES
TA -- TAX ALLOCATION
TRAN -- TAX & REVENUE ANTICIPATION NOTE
XLCA -- XL CAPITAL ASSURANCE
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 50
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
LARGE CAP VALUE LARGE CAP GROWTH RCB SMALL CAP TECHNOLOGY
EQUITY FUND EQUITY FUND VALUE FUND GROWTH FUND
(000) (000) (000) (000)
-----------------------------------------------------------------
INVESTMENT INCOME:
Dividend $ 963 $ 243 $ 306 $ 6
Interest 69 23 351 2
Less: Foreign tax withheld (2) -- (5) --
- -----------------------------------------------------------------------------------------------------------------------------
Total Investment Income 1,030 266 652 8
- -----------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Investment Advisory Fees 266 146 354 11
Shareholder Servicing Fees--Institutional Class 93 44 18 1
Shareholder Servicing Fees--Class A(1) 29 24 32 4
Shareholder Servicing Fees--Class R(1) -- -- 141 --
Administrative Fees 24 13 23 1
Trustee Fees 1 1 2 --
Professional Fees 4 1 5 --
Transfer Agent Fees 4 2 4 --
Custodian Fees 2 1 3 --
Printing Fees 1 -- 2 --
Registration Fees 1 -- 1 --
Insurance and Other Fees 2 2 4 --
- -----------------------------------------------------------------------------------------------------------------------------
Total Expenses 427 234 589 17
- -----------------------------------------------------------------------------------------------------------------------------
Recapture of Investment Advisory Fees Waived(2) -- -- -- 1
Less,Waiver of:
Transfer Agent Fees (4) (2) (4) --
- -----------------------------------------------------------------------------------------------------------------------------
Net Expenses 423 232 585 18
- -----------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) 607 34 67 (10)
- -----------------------------------------------------------------------------------------------------------------------------
Net Realized Gain From Securities Transactions 3,160 925 4,814 117
Net Change in Unrealized Appreciation (Depreciation)
on Investments 3,364 540 (2,583) 114
- -----------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 7,131 $ 1,499 $ 2,298 $ 221
=============================================================================================================================
(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 51
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA
CORPORATE GOVERNMENT TAX EXEMPT HIGH YIELD
BOND FUND BOND FUND BOND FUND BOND FUND
(000) (000) (000) (000)
----------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 1,258 $ 676 $ 407 $1,782
- -----------------------------------------------------------------------------------------------------------------------------
Total Investment Income 1,258 676 407 1,782
- -----------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Investment Advisory Fees 106 67 33 155
Shareholder Servicing Fees--Institutional Class 64 38 29 27
Shareholder Servicing Fees--Class A(1) 4 2 3 55
Administrative Fees 15 9 7 12
Trustee Fees 1 1 1 --
Professional Fees 2 1 1 2
Transfer Agent Fees 2 1 1 2
Custodian Fees 2 1 1 2
Printing Fees 1 1 1 1
Insurance and Other Fees 3 1 1 2
- -----------------------------------------------------------------------------------------------------------------------------
Total Expenses 200 122 78 258
- -----------------------------------------------------------------------------------------------------------------------------
Recapture of Investment Advisory Fees Waived(2) 3 -- -- --
Less,Waiver of:
Investment Advisory Fees -- (11) (14) (19)
Transfer Agent Fees (2) (1) (1) (2)
- -----------------------------------------------------------------------------------------------------------------------------
Net Expenses 201 110 63 237
- -----------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 1,057 566 344 1,545
- -----------------------------------------------------------------------------------------------------------------------------
Net Realized Loss From Securities Transactions (77) (160) (6) (111)
Net Change in Unrealized Depreciation
on Investments (977) (359) (231) (18)
- -----------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 3 $ 47 $ 107 $1,416
=============================================================================================================================
(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 52
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
CALIFORNIA
PRIME GOVERNMENT TAX EXEMPT
MONEY MONEY MONEY
MARKET FUND MARKET FUND MARKET FUND
(000) (000) (000)
----------------------------------------------------------------
INVESTMENT INCOME:
Interest $21,009 $46,635 $11,627
- -----------------------------------------------------------------------------------------------------------------------------
Total Investment Income 21,009 46,635 11,627
- -----------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Investment Advisory Fees 1,237 2,920 1,092
Shareholder Servicing Fees--Institutional Class 422 52 98
Shareholder Servicing Fees--Class A(1) 1,559 7,365 2,392
Shareholder Servicing Fees--Class S(1) 884 901 345
Administrative Fees 275 625 225
Trustee Fees 15 37 13
Professional Fees 48 112 40
Transfer Agent Fees 44 99 36
Custodian Fees 28 68 24
Printing Fees 19 41 16
Registration and Filing Fees 5 13 5
Insurance and Other Fees 42 115 39
- -----------------------------------------------------------------------------------------------------------------------------
Total Expenses 4,578 12,348 4,325
- -----------------------------------------------------------------------------------------------------------------------------
Less,Waiver of:
Investment Advisory Fees -- -- (240)
Shareholder Servicing Fees -- Class A(1) (581) (2,750) (861)
Shareholder Servicing Fees -- Class S(1) (94) (96) (32)
Transfer Agent Fees (44) (99) (36)
- -----------------------------------------------------------------------------------------------------------------------------
Net Expenses 3,859 9,403 3,156
- -----------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 17,150 37,232 8,471
- -----------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $17,150 $37,232 $ 8,471
=============================================================================================================================
(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 53
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED MARCH 31, 2006 (UNAUDITED) AND THE YEAR ENDED
SEPTEMBER 30, 2005
- --------------------------------------------------------------------------------
LARGE CAP VALUE LARGE CAP GROWTH
EQUITY FUND (000) EQUITY FUND (000)
----------------------- -----------------------
2006 2005 2006 2005
- ----------------------------------------------------------------------------------- -----------------------
OPERATIONS:
Net Investment Income (Loss) $ 607 $ 536 $ 34 $ 194
Net Realized Gain (Loss) from
Security Transactions 3,160 4,127 925 376
Net Change in Unrealized Appreciation
(Depreciation) on Investments 3,364 1,915 540 2,999
- ----------------------------------------------------------------------------------- -----------------------
Net Increase in Net Assets
Resulting from Operations 7,131 6,578 1,499 3,569
- ----------------------------------------------------------------------------------- -----------------------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net Investment Income:
INSTITUTIONAL CLASS (545) (453) (34) (172)
CLASS A (62) (82) -- (26)
CLASS R -- -- -- --
Realized Capital Gains:
INSTITUTIONAL CLASS (3,330) (1,585) -- --
CLASS A (459) (323) -- --
CLASS R -- -- -- --
- ----------------------------------------------------------------------------------- -----------------------
Total Dividends and Distributions (4,396) (2,443) (34) (198)
- ----------------------------------------------------------------------------------- -----------------------
CAPITAL SHARE TRANSACTIONS:(1)
INSTITUTIONAL CLASS:
Shares Issued 48,283 8,083 5,682 10,719
Shares Issued in Lieu of Dividends and Distributions 2,538 673 11 56
Shares Redeemed (6,180) (7,549) (4,706) (4,944)
- ----------------------------------------------------------------------------------- -----------------------
Increase (Decrease) in Net Assets from
Institutional Class Share Transactions 44,641 1,207 987 5,831
- ----------------------------------------------------------------------------------- -----------------------
CLASS A:
Shares Issued 1,680 4,714 2,434 3,209
Shares Issued in Lieu of Dividends and Distributions 424 323 -- 18
Shares Redeemed (730) (1,366) (682) (785)
- ----------------------------------------------------------------------------------- -----------------------
Increase (Decrease) in Net Assets from
Class A Share Transactions 1,374 3,671 1,752 2,442
- ----------------------------------------------------------------------------------- -----------------------
CLASS R:
Shares Issued -- -- -- --
Shares Issued in Lieu of Dividends and Distributions -- -- -- --
Shares Redeemed -- -- -- --
- ----------------------------------------------------------------------------------- -----------------------
Increase (Decrease) in Net Assets from
Class R Share Transactions -- -- -- --
- ----------------------------------------------------------------------------------- -----------------------
Net Increase (Decrease) in Net Assets from
Share Transactions 46,015 4,878 2,739 8,273
- ----------------------------------------------------------------------------------- -----------------------
Total Increase (Decrease) in Net Assets 48,750 9,013 4,204 11,644
- ----------------------------------------------------------------------------------- -----------------------
NET ASSETS:
Beginning of period 53,638 44,625 42,442 30,798
- ----------------------------------------------------------------------------------- -----------------------
End of period $ 102,388 $ 53,638 $ 46,646 $ 42,442
=================================================================================== =======================
Undistributed (Distributions in Excess of)
Net Investment Income $ -- $ -- $ (1) $ (1)
- ----------------------------------------------------------------------------------- -----------------------
RCB SMALL CAP TECHNOLOGY GROWTH CORPORATE BOND
VALUE FUND (000) FUND (000) FUND (000)
----------------------- ----------------------- ---------------------
2006 2005 2006 2005 2006 2005
- ----------------------------------------------------------------------------------- ----------------------- ---------------------
OPERATIONS:
Net Investment Income (Loss) $ 67 $ 44 $ (10) $ 4 $ 1,057 $ 1,920
Net Realized Gain (Loss) from
Security Transactions 4,814 2,115 117 40 (77) (65)
Net Change in Unrealized Appreciation
(Depreciation) on Investments (2,583) 3,809 114 320 (977) (1,281)
- ----------------------------------------------------------------------------------- ----------------------- ---------------------
Net Increase in Net Assets
Resulting from Operations 2,298 5,968 221 364 3 574
- ----------------------------------------------------------------------------------- ----------------------- ---------------------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net Investment Income:
INSTITUTIONAL CLASS (35) -- (4) -- (1,030) (1,865)
CLASS A (1) -- -- -- (27) (54)
CLASS R (10) -- -- -- -- --
Realized Capital Gains:
INSTITUTIONAL CLASS (186) (462) -- -- -- (293)
CLASS A (170) (480) -- -- -- (10)
CLASS R (785) (2,072) -- -- -- --
- ----------------------------------------------------------------------------------- ----------------------- ---------------------
Total Dividends and Distributions (1,187) (3,014) (4) -- (1,057) (2,222)
- ----------------------------------------------------------------------------------- ----------------------- ---------------------
CAPITAL SHARE TRANSACTIONS:(1)
INSTITUTIONAL CLASS:
Shares Issued 3,358 7,853 250 428 8,352 15,341
Shares Issued in Lieu of Dividends and Distributions 159 325 4 -- 189 396
Shares Redeemed (2,773) (3,616) (314) (379) (6,616) (10,031)
- ----------------------------------------------------------------------------------- ----------------------- ---------------------
Increase (Decrease) in Net Assets from
Institutional Class Share Transactions 744 4,562 (60) 49 1,925 5,706
- ----------------------------------------------------------------------------------- ----------------------- ---------------------
CLASS A:
Shares Issued 967 7,216 119 37 108 604
Shares Issued in Lieu of Dividends and Distributions 129 391 -- -- 12 30
Shares Redeemed (1,587) (2,825) (118) (56) (235) (571)
- ----------------------------------------------------------------------------------- ----------------------- ---------------------
Increase (Decrease) in Net Assets from
Class A Share Transactions (491) 4,782 1 (19) (115) 63
- ----------------------------------------------------------------------------------- ----------------------- ---------------------
CLASS R:
Shares Issued 7,967 28,095 -- -- -- --
Shares Issued in Lieu of Dividends and Distributions 742 1,991 -- -- -- --
Shares Redeemed (12,676) (10,847) -- -- -- --
- ----------------------------------------------------------------------------------- ----------------------- ---------------------
Increase (Decrease) in Net Assets from
Class R Share Transactions (3,967) 19,239 -- -- -- --
- ----------------------------------------------------------------------------------- ----------------------- ---------------------
Net Increase (Decrease) in Net Assets from
Share Transactions (3,714) 28,583 (59) 30 1,810 5,769
- ----------------------------------------------------------------------------------- ----------------------- ---------------------
Total Increase (Decrease) in Net Assets (2,603) 31,537 158 394 756 4,121
- ----------------------------------------------------------------------------------- ----------------------- ---------------------
NET ASSETS:
Beginning of period 84,516 52,979 2,610 2,216 52,723 48,602
- ----------------------------------------------------------------------------------- ----------------------- ---------------------
End of period $ 81,913 $ 84,516 $ 2,768 $ 2,610 $ 53,479 $ 52,723
=================================================================================== ======================= =====================
Undistributed (Distributions in Excess of)
Net Investment Income $ 64 $ 43 $ (10) $ 4 $ -- $ --
- ----------------------------------------------------------------------------------- ----------------------- ---------------------
(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 54 & 55
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED MARCH 31, 2006 (UNAUDITED) AND THE YEAR ENDED
SEPTEMBER 30, 2005
- --------------------------------------------------------------------------------
GOVERNMENT CALIFORNIA TAX EXEMPT
BOND FUND (000) BOND FUND (000)
-------------------------- -------------------------
2006 2005 2006 2005
- -------------------------------------------------------------------------------------- -------------------------
OPERATIONS:
Net Investment Income $ 566 $ 738 $ 344 $ 593
Net Realized Gain (Loss) from
Security Transactions (160) (55) (6) 135
Net Change in Unrealized Depreciation
on Investments (359) (342) (231) (391)
- -------------------------------------------------------------------------------------- -------------------------
Net Increase in Net Assets
Resulting from Operations 47 341 107 337
- -------------------------------------------------------------------------------------- -------------------------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net Investment Income:
INSTITUTIONAL CLASS (559) (728) (327) (540)
CLASS A (10) (11) (16) (53)
CLASS S -- -- -- --
Realized Capital Gains:
INSTITUTIONAL CLASS -- (118) (90) (71)
CLASS A -- (2) (5) (11)
CLASS S -- -- -- --
- -------------------------------------------------------------------------------------- -------------------------
Total Dividends and Distributions (569) (859) (438) (675)
- -------------------------------------------------------------------------------------- -------------------------
CAPITAL SHARE TRANSACTIONS:(1)
INSTITUTIONAL CLASS:
Shares Issued 7,107 12,985 4,715 8,952
Shares Issued in Lieu of Dividends and Distributions 141 209 133 139
Shares Redeemed (2,408) (5,454) (2,858) (3,813)
- -------------------------------------------------------------------------------------- -------------------------
Increase (Decrease) in Net Assets from
Institutional Class Share Transactions 4,840 7,740 1,990 5,278
- -------------------------------------------------------------------------------------- -------------------------
CLASS A:
Shares Issued 208 275 15 302
Shares Issued in Lieu of Dividends and Distributions 4 5 3 25
Shares Redeemed (97) (153) (238) (1,240)
- -------------------------------------------------------------------------------------- -------------------------
Increase (Decrease) in Net Assets from
Class A Share Transactions 115 127 (220) (913)
- -------------------------------------------------------------------------------------- -------------------------
CLASS S:
Shares Issued -- -- -- --
Shares Issued in Lieu of Dividends and Distributions -- -- -- --
Shares Redeemed -- -- -- --
- -------------------------------------------------------------------------------------- -------------------------
Increase (Decrease) in Net Assets from
Class S Share Transactions -- -- -- --
- -------------------------------------------------------------------------------------- -------------------------
Net Increase (Decrease) in Net Assets from
Share Transactions 4,955 7,867 1,770 4,365
- -------------------------------------------------------------------------------------- -------------------------
Total Increase (Decrease) in Net Assets 4,433 7,349 1,439 4,027
- -------------------------------------------------------------------------------------- -------------------------
NET ASSETS:
Beginning of period 28,686 21,337 24,255 20,228
- -------------------------------------------------------------------------------------- -------------------------
End of period $ 33,119 $ 28,686 $ 25,694 $ 24,255
====================================================================================== =========================
Undistributed (Distributions in excess of)
Net Investment Income $ -- $ 3 $ 1 $ --
- -------------------------------------------------------------------------------------- -------------------------
HIGH YIELD PRIME MONEY
BOND FUND (000) MARKET FUND (000)
-------------------------- -------------------------
2006 2005 2006 2005
- -------------------------------------------------------------------------------------- -------------------------
OPERATIONS:
Net Investment Income $ 1,545 $ 3,416 $ 17,150 $ 14,619
Net Realized Gain (Loss) from
Security Transactions (111) (157) -- 1
Net Change in Unrealized Depreciation
on Investments (18) (1,200) -- --
- -------------------------------------------------------------------------------------- -------------------------
Net Increase in Net Assets
Resulting from Operations 1,416 2,059 17,150 14,620
- -------------------------------------------------------------------------------------- -------------------------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net Investment Income:
INSTITUTIONAL CLASS (819) (1,815) (6,146) (7,317)
CLASS A (726) (1,589) (7,185) (4,601)
CLASS S -- -- (3,819) (2,701)
Realized Capital Gains:
INSTITUTIONAL CLASS -- -- -- --
CLASS A -- -- -- --
CLASS S -- -- -- --
- -------------------------------------------------------------------------------------- -------------------------
Total Dividends and Distributions (1,545) (3,404) (17,150) (14,619)
- -------------------------------------------------------------------------------------- -------------------------
CAPITAL SHARE TRANSACTIONS:(1)
INSTITUTIONAL CLASS:
Shares Issued 2,678 6,056 784,258 1,215,600
Shares Issued in Lieu of Dividends and Distributions 438 945 1,175 1,411
Shares Redeemed (4,956) (6,600) (788,637) (1,251,828)
- -------------------------------------------------------------------------------------- -------------------------
Increase (Decrease) in Net Assets from
Institutional Class Share Transactions (1,840) 401 (3,204) (34,817)
- -------------------------------------------------------------------------------------- -------------------------
CLASS A:
Shares Issued 332 4,528 819,291 958,549
Shares Issued in Lieu of Dividends and Distributions 410 920 1,976 982
Shares Redeemed (2,151) (4,403) (668,208) (848,138)
- -------------------------------------------------------------------------------------- -------------------------
Increase (Decrease) in Net Assets from
Class A Share Transactions (1,409) 1,045 153,059 111,393
- -------------------------------------------------------------------------------------- -------------------------
CLASS S:
Shares Issued -- -- 386,124 499,380
Shares Issued in Lieu of Dividends and Distributions -- -- -- --
Shares Redeemed -- -- (346,068) (411,638)
- -------------------------------------------------------------------------------------- -------------------------
Increase (Decrease) in Net Assets from
Class S Share Transactions -- -- 40,056 87,742
- -------------------------------------------------------------------------------------- -------------------------
Net Increase (Decrease) in Net Assets from
Share Transactions (3,249) 1,446 189,911 164,318
- -------------------------------------------------------------------------------------- -------------------------
Total Increase (Decrease) in Net Assets (3,378) 101 189,911 164,319
- -------------------------------------------------------------------------------------- -------------------------
NET ASSETS:
Beginning of period 43,616 43,515 848,347 684,028
- -------------------------------------------------------------------------------------- -------------------------
End of period $ 40,238 $ 43,616 $1,038,258 $ 848,347
====================================================================================== ========================
Undistributed (Distributions in excess of )
Net Investment Income $ -- $ -- $ -- $ --
- -------------------------------------------------------------------------------------- -------------------------
GOVERNMENT MONEY CALIFORNIA TAX EXEMPT
MARKET FUND (000) MONEY MARKET FUND (000)
-------------------------- --------------------------
2006 2005 2006 2005
- -------------------------------------------------------------------------------------- --------------------------
OPERATIONS:
Net Investment Income $ 37,232 $ 38,831 $ 8,471 $ 9,079
Net Realized Gain (Loss) from
Security Transactions -- -- -- --
Net Change in Unrealized Depreciation
on Investments -- -- -- --
- -------------------------------------------------------------------------------------- -------------------------
Net Increase in Net Assets
Resulting from Operations 37,232 38,831 8,471 9,079
- -------------------------------------------------------------------------------------- -------------------------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net Investment Income:
INSTITUTIONAL CLASS (752) (880) (916) (1,365)
CLASS A (32,713) (33,943) (6,673) (7,285)
CLASS S (3,771) (4,006) (877) (433)
Realized Capital Gains:
INSTITUTIONAL CLASS -- -- -- (27)
CLASS A -- -- -- (144)
CLASS S -- -- -- (7)
- -------------------------------------------------------------------------------------- -------------------------
Total Dividends and Distributions (37,236) (38,829) (8,466) (9,261)
- -------------------------------------------------------------------------------------- -------------------------
CAPITAL SHARE TRANSACTIONS:(1)
INSTITUTIONAL CLASS:
Shares Issued 332,199 376,258 658,709 1,139,802
Shares Issued in Lieu of Dividends and Distributions 1 7 -- 8
Shares Redeemed (317,706) (387,834) (665,299) (1,145,985)
- -------------------------------------------------------------------------------------- -------------------------
Increase (Decrease) in Net Assets from
Institutional Class Share Transactions 14,494 (11,569) (6,590) (6,175)
- -------------------------------------------------------------------------------------- -------------------------
CLASS A:
Shares Issued 2,407,104 4,965,371 877,202 1,822,478
Shares Issued in Lieu of Dividends and Distributions 22,926 23,227 5,452 6,066
Shares Redeemed (2,472,405) (4,950,864) (831,605) (1,763,753)
- -------------------------------------------------------------------------------------- -------------------------
Increase (Decrease) in Net Assets from
Class A Share Transactions (42,375) 37,734 51,049 64,791
- -------------------------------------------------------------------------------------- -------------------------
CLASS S:
Shares Issued 449,968 689,747 171,184 271,376
Shares Issued in Lieu of Dividends and Distributions -- -- -- --
Shares Redeemed (438,993) (724,928) (154,825) (216,708)
- -------------------------------------------------------------------------------------- -------------------------
Increase (Decrease) in Net Assets from
Class S Share Transactions 10,975 (35,181) 16,359 54,668
- -------------------------------------------------------------------------------------- -------------------------
Net Increase (Decrease) in Net Assets from
Share Transactions (16,906) (9,016) 60,818 113,284
- -------------------------------------------------------------------------------------- -------------------------
Total Increase (Decrease) in Net Assets (16,910) (9,014) 60,823 113,102
- -------------------------------------------------------------------------------------- -------------------------
NET ASSETS:
Beginning of period 2,155,356 2,164,370 731,064 617,962
- -------------------------------------------------------------------------------------- -------------------------
End of period $ 2,138,446 $ 2,155,356 $ 791,887 $ 731,064
====================================================================================== =========================
Undistributed (Distributions in excess of )
Net Investment Income $ 1 $ 5 $ -- $ (5)
- -------------------------------------------------------------------------------------- -------------------------
(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 56 & 57
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE SIX MONTHS ENDED MARCH 31, 2006 (UNAUDITED) AND THE YEAR OR PERIOD
ENDED SEPTEMBER 30,
- --------------------------------------------------------------------------------
NET
NET REALIZED AND DISTRIBUTIONS NET NET
ASSET NET UNREALIZED DIVIDENDS FROM ASSET ASSETS
VALUE INVESTMENT GAINS (LOSSES) FROM NET REALIZED VALUE END
BEGINNING INCOME ON INVESTMENT CAPITAL END TOTAL OF PERIOD
OF PERIOD (LOSS) SECURITIES INCOME GAINS OF PERIOD RETURN+++ (000)
- -------------------------------------------------------------------------------------------------------------------------
LARGE CAP VALUE EQUITY FUND
Institutional Class (commenced operations on January 14, 2000)
2006* $ 9.54 $ 0.07^ $ 0.73^ $(0.06) $(0.39) $ 9.89 8.61% $89,883
2005 8.77 0.10^ 1.13^ (0.10) (0.36) 9.54 14.39 42,974
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
Class A (commenced operations on April 13, 2000)
2006* $ 9.53 $ 0.06^ $ 0.73^ $(0.05) $(0.39) $ 9.88 8.49% $12,505
2005 8.76 0.09^ 1.12^ (0.08) (0.36) 9.53 14.14 10,664
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
- -------------------------------------------------------------------------------------------------------------------------
LARGE CAP GROWTH EQUITY FUND
Institutional Class (commenced operations on January 14, 2000)
2006* $ 7.43 $ 0.01^ $ 0.24^ $(0.01) $ -- $ 7.67 3.33% $36,320
2005 6.76 0.04^ 0.67^ (0.04) -- 7.43 10.55 34,164
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 0.00 (1.11) -- -- 5.25 (17.45) 14,195
2001 9.37 (0.02) (2.99) -- -- 6.36 (32.12) 15,550
Class A (commenced operations on March 28, 2000)
2006* $ 7.35 $ 0.00^ $ 0.24^ $ -- $ -- $ 7.59 3.27% $10,326
2005 6.69 0.02^ 0.67^ (0.03) -- 7.35 10.28 8,278
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
- -------------------------------------------------------------------------------------------------------------------------
RCB SMALL CAP VALUE FUND
Institutional Class (commenced operations on October 3, 2001)
2006* $28.58 $ 0.05^ $ 0.73^ $(0.07) $(0.37) $28.92 2.78% $14,898
2005 27.30 0.07^ 2.58^ -- (1.37) 28.58 9.87 13,975
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)
2006* $28.31 $ 0.02^ $ 0.72^ $ --^^ $(0.37) $28.68 2.68% $12,433
2005 27.13 0.00^ 2.55^ -- (1.37) 28.31 9.55 12,754
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)
2006* $28.27 $ 0.02^ $ 0.71^ $ --^^ $(0.37) $28.63 2.65% $54,582
2005 27.09 0.01^ 2.54^ -- (1.37) 28.27 9.56 57,787
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 -- (0.72)(3) 18.84 24.34 8,869
- -------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY GROWTH FUND
Institutional Class (commenced operations on October 3, 2000)
2006* $ 4.04 $ (0.01)^ $ 0.36^ $(0.01) $ -- $ 4.38 8.76% $ 1,225
2005 3.46 0.01^ 0.57^ -- -- 4.04 16.76 1,187
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)
2006* $ 3.98 $ (0.02)^ $ 0.36^ $ --^^ $ -- $ 4.32 8.56% $ 1,543
2005 3.42 0.00^ 0.56^ -- -- 3.98 16.37 1,423
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)
2006* 0.95% 1.44% 0.96% 14%
2005 0.96 1.12 0.97 34
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
Class A (commenced operations on April 13, 2000)
2006* 1.20% 1.23% 1.21% 14%
2005 1.21 0.87 1.22 34
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
- -------------------------------------------------------------------------
LARGE CAP GROWTH EQUITY FUND
Institutional Class (commenced operations on January 14, 2000)
2006* 0.98% 0.20% 0.99% 15%
2005 0.98 0.57 1.00 27
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
Class A (commenced operations on March 28, 2000)
2006* 1.23% (0.05)% 1.24% 15%
2005 1.23 0.33 1.25 27
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
- -------------------------------------------------------------------------
RCB SMALL CAP VALUE FUND
Institutional Class (commenced operations on October 3, 2001)
2006* 1.19% 0.37% 1.20% 37%
2005 1.18 0.26 1.20 41
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)
2006* 1.44% 0.12% 1.45% 37%
2005 1.43 0.01 1.45 41
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)
2006* 1.44% 0.12% 1.45% 37%
2005 1.43 0.02 1.45 41
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
- -------------------------------------------------------------------------
TECHNOLOGY GROWTH FUND
Institutional Class (commenced operations on October 3, 2000)
2006* 1.20% (0.62)% 1.15% 11%
2005 1.20 0.34 1.21 37
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)
2006* 1.50% (0.91)% 1.45% 11
2005 1.50 0.06 1.51 37
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 SIX MONTHS ENDED MARCH 31, 2006.
** 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 OUTSTANDING THROUGHOUT
THE PERIOD.
^^ 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.
(3) INCLUDES RETURN OF CAPITAL OF $0.35 PER SHARE.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 58
- --------------------------------------------------------------------------------
NET
NET REALIZED AND DISTRIBUTIONS NET NET
ASSET UNREALIZED DIVIDENDS FROM ASSET ASSETS
VALUE NET GAINS (LOSSES) FROM NET REALIZED VALUE END
BEGINNING INVESTMENT ON INVESTMENT CAPITAL END TOTAL OF PERIOD
OF PERIOD INCOME SECURITIES INCOME GAINS OF PERIOD RETURN++ (000)
- --------------------------------------------------------------------------------------------------------------------------
CORPORATE BOND FUND
Institutional Class (commenced operations on January 14, 2000)
2006* $10.27 $ 0.20^ $ (0.21)^ $(0.20) $ -- $10.06 (0.07)% $52,094
2005 10.60 0.40^ (0.27)^ (0.40) (0.06) 10.27 1.26 51,193
2004 10.89 0.41^ (0.18)^ (0.41) (0.11) 10.60 2.15 47,080
2003 10.65 0.46 0.24 (0.46) -- 10.89 6.74 42,256
2002 10.72 0.53 0.09 (0.53) (0.16) 10.65 6.06 40,807
2001 10.14 0.60 0.60 (0.60) (0.02) 10.72 12.14 32,800
Class A (commenced operations on April 13, 2000)
2006* $10.27 $ 0.19^ $ (0.20)^ $(0.19) $ -- $10.07 (0.10)% $ 1,385
2005 10.61 0.37^ (0.28)^ (0.37) (0.06) 10.27 0.91 1,530
2004 10.89 0.37^ (0.16)^ (0.38) (0.11) 10.61 1.99 1,522
2003 10.65 0.44 0.23 (0.43) -- 10.89 6.47 830
2002 10.73 0.50 0.08 (0.50) (0.16) 10.65 5.69 544
2001 10.13 0.57 0.62 (0.57) (0.02) 10.73 12.08 93
- --------------------------------------------------------------------------------------------------------------------------
GOVERNMENT BOND FUND
Institutional Class (commenced operations on January 14, 2000)
2006* $10.40 $ 0.19^ $ (0.18)^ $(0.19) $ -- $10.22 0.09% $32,462
2005 10.62 0.31^ (0.16)^ (0.31) (0.06) 10.40 1.42 28,132
2004 10.93 0.25^ (0.17)^ (0.25) (0.14) 10.62 0.81 20,901
2003 11.02 0.36^ (0.07)^ (0.37) (0.01) 10.93 2.68** 15,596
2002 10.80 0.44 0.34 (0.44) (0.12) 11.02 7.53 14,502
2001 10.17 0.53 0.63 (0.53) -- 10.80 11.67 12,648
Class A (commenced operations on April 13, 2000)
2006* $10.42 $ 0.17^ $ (0.16)^ $(0.18) $ -- $10.25 0.06% $ 657
2005 10.64 0.29^ (0.17)^ (0.28) (0.06) 10.42 1.16 554
2004 10.95 0.23^ (0.17)^ (0.23) (0.14) 10.64 0.55 436
2003 11.01 0.33^ (0.04)^ (0.34) (0.01) 10.95 2.71** 18
2002 10.77 0.43 0.34 (0.41) (0.12) 11.01 7.47 525
2001 10.16 0.49 0.63 (0.51) -- 10.77 11.25 4
- --------------------------------------------------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT BOND FUND
Institutional Class (commenced operations on January 14, 2000)
2006* $10.26 $ 0.14^ $ (0.10)^ $(0.14) $ (0.04) $10.12 0.40% $24,445
2005 10.41 0.28^ (0.11)^ (0.28) (0.04) 10.26 1.65 22,768
2004 10.60 0.27^ (0.06)^ (0.27) (0.13) 10.41 2.00 17,789
2003 10.83 0.31 (0.04) (0.31) (0.19) 10.60 2.63 14,546
2002 10.50 0.36 0.41 (0.35) (0.09) 10.83 7.58 16,147
2001 10.22 0.43 0.30 (0.43) (0.02) 10.50 7.21 15,526
Class A (commenced operations on April 13, 2000)
2006* $10.29 $ 0.13^ $ (0.10)^ $(0.13) $ (0.04) $10.15 0.27% $ 1,249
2005 10.44 0.25^ (0.11)^ (0.25) (0.04) 10.29 1.39 1,487
2004 10.62 0.24^ (0.05)^ (0.24) (0.13) 10.44 1.84 2,439
2003 10.85 0.27 (0.02) (0.29) (0.19) 10.62 2.37 732
2002 10.51 0.33 0.43 (0.33) (0.09) 10.85 7.40 13
2001 10.22 0.41 0.30 (0.40) (0.02) 10.51 7.08 6
- --------------------------------------------------------------------------------------------------------------------------
HIGH YIELD BOND FUND
Institutional Class (commenced operations on January 14, 2000)
2006* $ 9.04 $ 0.34^ $ (0.02)^ $(0.34) $ -- $ 9.02 3.62% $20,682
2005 9.31 0.71^ (0.27)^ (0.71) -- 9.04 4.85 22,588
2004 8.95 0.72^ 0.36^ (0.72) -- 9.31 12.47 22,860
2003 8.16 0.76 0.79 (0.76) -- 8.95 19.75 13,387
2002 8.57 0.83 (0.40) (0.84) -- 8.16 4.80 10,020
2001 9.76 0.98 (1.18) (0.98) (0.01) 8.57 (2.45) 9,310
Class A (commenced operations on January 14, 2000)
2006* $ 9.04 $ 0.33^ $ (0.02)^ $(0.33) $ -- $ 9.02 3.46% $19,556
2005 9.31 0.69^ (0.27)^ (0.69) -- 9.04 4.54 21,028
2004 8.95 0.70^ 0.35^ (0.69) -- 9.31 12.14 20,655
2003 8.16 0.74 0.78 (0.73) -- 8.95 19.39 16,878
2002 8.57 0.81 (0.40) (0.82) -- 8.16 4.49 9,397
2001 9.76 0.95 (1.18) (0.95) (0.01) 8.57 (2.74) 3,973
RATIO
OF EXPENSES
RATIO TO AVERAGE
OF NET NET ASSETS
RATIO INVESTMENT (EXCLUDING
OF EXPENSES INCOME WAIVERS & PORTFOLIO
TO AVERAGE TO AVERAGE RECAPTURE TURNOVER
NET ASSETS(1) NET ASSETS(1) FEES)(1) RATE
- -------------------------------------------------------------------------
CORPORATE BOND FUND
Institutional Class (commenced operations on January 14, 2000)
2006* 0.75% 4.01% 0.75% 10%
2005 0.75 3.80 0.76 25
2004 0.75 3.82 0.79 57
2003 0.75 4.30 0.78 66
2002 0.75 5.04 0.82 55
2001 0.75 5.71+ 0.86 83
Class A (commenced operations on April 13, 2000)
2006* 1.00% 3.76% 1.00% 10%
2005 1.00 3.55 1.01 25
2004 1.00 3.51 1.04 57
2003 1.00 4.00 1.03 66
2002 1.00 4.71 1.07 55
2001 1.00 5.67+ 1.11 83
- -------------------------------------------------------------------------
GOVERNMENT BOND FUND
Institutional Class (commenced operations on January 14, 2000)
2006* 0.70% 3.65% 0.78% 40%
2005 0.70 2.98 0.79 58
2004 0.70 2.39 0.81 169
2003 0.70 3.26 0.81 54
2002 0.70 4.11+ 0.86 70
2001 0.70 5.04+ 0.91 126
Class A (commenced operations on April 13, 2000)
2006* 0.95% 3.37% 1.03% 40%
2005 0.95 2.70 1.04 58
2004 0.95 2.14 1.06 169
2003 0.95 3.00 1.06 54
2002 0.95 3.70 1.11 70
2001 0.95 5.03+ 1.16 126
- -------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT BOND FUND
Institutional Class (commenced operations on January 14, 2000)
2006* 0.50% 2.79% 0.62% 13%
2005 0.50 2.70 0.63 54
2004 0.50 2.55 0.65 51
2003 0.50 2.91 0.65 68
2002 0.50 3.33 0.70 90
2001 0.50 4.11 0.75 56
Class A (commenced operations on April 13, 2000)
2006* 0.75% 2.53% 0.87% 13%
2005 0.75 2.43 0.88 54
2004 0.75 2.29 0.90 51
2003 0.75 2.62 0.90 68
2002 0.75 3.05 0.95 90
2001 0.75 3.82 1.00 56
- -------------------------------------------------------------------------
HIGH YIELD BOND FUND
Institutional Class (commenced operations on January 14, 2000)
2006* 1.00% 7.59% 1.10% 12%
2005 1.00 7.71 1.11 46
2004 1.00 7.87 1.14 35
2003 1.00 8.84 1.13 36
2002 1.00 9.48 1.18 30
2001 1.00 10.52 1.23 12
Class A (commenced operations on January 14, 2000)
2006* 1.30% 7.30% 1.40% 12%
2005 1.30 7.41 1.41 46
2004 1.30 7.56 1.44 35
2003 1.30 8.44 1.43 36
2002 1.30 9.03 1.48 30
2001 1.30 10.14 1.53 12
* FOR THE SIX MONTHS ENDED MARCH 31, 2006.
** 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 OUTSTANDING
THROUGHOUT THE PERIOD.
(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 59
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE SIX MONTHS ENDED MARCH 31, 2006 (UNAUDITED) AND THE YEAR OR PERIOD
ENDED SEPTEMBER 30,
- --------------------------------------------------------------------------------
RATIO
OF EXPENSES
RATIO TO AVERAGE
NET NET NET OF NET NET ASSETS
ASSET DIVIDENDS ASSET ASSETS RATIO INVESTMENT (EXCLUDING
VALUE NET FROM NET VALUE END OF EXPENSES INCOME WAIVERS &
BEGINNING INVESTMENT INVESTMENT END TOTAL OF PERIOD TO AVERAGE TO AVERAGE RECAPTURE
OF PERIOD INCOME INCOME OF PERIOD RETURN+++ (000) NET ASSETS(1) NET ASSETS(1) FEES)(1)
- -----------------------------------------------------------------------------------------------------------------------------------
PRIME MONEY MARKET FUND
Institutional Class (commenced operations on March 23, 1998)
2006* $1.00 $0.018 $(0.018) $1.00 1.83% $ 329,189 0.59% 3.64% 0.60%
2005 1.00 0.021 (0.021) 1.00 2.10 332,393 0.60 2.05 0.61
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
Class A (commenced operations on October 18, 1999)
2006* $1.00 $0.017 $(0.017) $1.00 1.72% $ 465,511 0.81% 3.46% 1.10%
2005 1.00 0.019 (0.019) 1.00 1.87 312,452 0.82 1.94 1.11
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
Class S (commenced operations on October 26, 1999)
2006* $1.00 $0.016 $(0.016) $1.00 1.62% $ 243,558 1.01% 3.24% 1.10%
2005 1.00 0.017 (0.017) 1.00 1.67 203,502 1.02 1.70 1.11
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
- ------------------------------------------------------------------------------------------------------------------------------------
GOVERNMENT MONEY MARKET FUND
Institutional Class (commenced operations on April 3, 2000)
2006* $1.00 $0.018 $(0.018) $1.00 1.79% $ 46,532 0.60% 3.58% 0.61%
2005 1.00 0.020 (0.020) 1.00 2.05 32,039 0.61 1.97 0.62
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
Class A (commenced operations on June 21, 1999)
2006* $1.00 $0.017 $(0.017) $1.00 1.68% $1,853,034 0.82% 3.33% 1.11%
2005 1.00 0.018 (0.018) 1.00 1.82 1,895,412 0.83 1.80 1.12
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
Class S (commenced operations on October 6, 1999)
2006* $1.00 $0.016 $(0.016) $1.00 1.58% $ 238,880 1.02% 3.14% 1.11%
2005 1.00 0.016 (0.016) 1.00 1.62 227,905 1.03 1.61 1.12
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
- ------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA TAX EXEMPT MONEY MARKET FUND
Institutional Class (commenced operations on April 3, 2000)
2006* $1.00 $0.012 $(0.012) $1.00 1.17% $ 66,621 0.55% 2.33% 0.62%
2005 1.00 0.015 (0.015)** 1.00 1.51 73,211 0.55 1.46 0.63
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
Class A (commenced operations on June 21, 1999)
2006* $1.00 $0.010 $(0.010) $1.00 1.05% $ 620,724 0.78% 2.09% 0.12%
2005 1.00 0.013 (0.013)** 1.00 1.28 569,671 0.78 1.25 1.13
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
Class S (commenced operations on November 12, 1999)
2006* $1.00 $0.009 $(0.009) $1.00 0.95% $ 104,542 0.98% 1.91% 1.12%
2005 1.00 0.011 (0.011)** 1.00 1.08 88,182 0.98 1.09 1.13
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
* FOR THE SIX MONTHS ENDED MARCH 31, 2006.
** INCLUDES A REALIZED CAPITAL GAIN DISTRIBUTION OF LESS THAN $0.001.
+ 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 60
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION:
The CNI Charter Funds, a Delaware statutory trust (the "Trust"), is registered
under the Investment Company Act of 1940, as amended, as an open-end management
investment company with sixteen 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");
and 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.
On April 5, 2005, the Board of Trustees of CNI Charter Funds (the "Trust")
approved the reorganization of the AHA Limited Maturity Fixed Income Fund, AHA
Full Maturity Fixed Income Fund, AHA Balanced Fund, AHA Diversified Equity Fund,
and AHA Socially Responsible Equity Fund series of AHA Investment Funds, Inc.
("AHA Funds") into newly established corresponding series of the Trust. The
reorganization was approved by shareholders of AHA Funds and was effective on
October 3, 2005. Shares of the AHA Funds are offered through separate
prospectuses. To request a prospectus, shareholders can call 1-800-445-1341 or
write to CNI Charter Funds, c/o SEI Investments Distribution Co., One Freedom
Valley Drive, Oaks, Pennsylvania 19456.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies followed by the
Funds.
USE OF ESTIMATES - The preparation of financial statements in conformity with
accounting principles generally accepted in the U.S. 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 increases and decreases in
net assets from operations 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
Trustees. 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.
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.
CNI CHARTER FUNDS | PAGE 61
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
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 coun-terparty 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.
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 January 1, 2005, the Administrator is
entitled to receive an annual fee of 0.065% of aggregate average daily net
assets of the Trust not exceeding $2.5 billion, 0.045% of aggregate average
daily net assets of the Trust exceeding $2.5 billion but not exceeding $5
billion, and 0.025% 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. Prior to January 1,
2005, the Administrator received 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, with each Fund being subject to a minimum annual fee of
$90,000.
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 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
CNI CHARTER FUNDS | PAGE 62
rate of up to 0.25% of each Fund's average daily net assets. For the six-months
ended March 31, 2006, CNB received Shareholder Servicing fees from the Trust in
the amount of $3,458,133.
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 for the
Funds. 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.
HSBC HALBIS PARTNERS (USA), INC. acts as the Investment Sub-Adviser on behalf of
the High Yield Bond Fund. Prior to September 1, 2005 Credit Suisse Asset
Management, LLC was the Investment Sub-Adviser.
The Adviser has voluntarily agreed to limit its fees or reimburse expenses to
the extent necessary to keep operating expenses at or below certain percentages
of the respective average daily net assets. The Adviser has voluntarily agreed
to maintain this limitation until further notice to the Trust. The voluntary
expense limitations (expressed as a percentage of average daily net assets) are
as follows:
Large Cap Large Cap RCB
Value Growth Small Cap Technology
Equity Equity Value Growth
Fund Fund Fund Fund
- --------------------------------------------------------------------------------
Institutional Class 1.00% 1.05% 1.24% 1.20%
Class A 1.25% 1.30% 1.49% 1.50%
Class R -- -- 1.49% --
- --------------------------------------------------------------------------------
California
Corporate Government Tax Exempt High Yield
Bond Bond Bond Bond
Fund Fund Fund Fund
- --------------------------------------------------------------------------------
Institutional Class 0.75% 0.70% 0.50% 1.00%
Class A 1.00% 0.95% 0.75% 1.30%
- --------------------------------------------------------------------------------
Prime California
Money Government Tax Exempt
Market Money Market Money Market
Fund Fund Fund
- --------------------------------------------------------------------------------
Institutional Class 0.63% 0.63% 0.55%
Class A 0.85% 0.85% 0.78%
Class S 1.05% 1.05% 0.98%
- --------------------------------------------------------------------------------
Any fee reductions or expense reimbursements may be repaid to the Adviser within
three years after occurrence, subject to certain restrictions and only if such
repayments do not cause the Funds' expense ratios, at the time of repayment, to
exceed the amounts shown in the preceding table.
During the six months ended March 31, 2006, the Board of Trustees approved the
reimbursement of previously waived fees by the Adviser for the prior fiscal year
in the amount of $752 and $2,502 for the Technology Growth Fund and Corporate
Bond Fund, respectively.
As of March 31, 2006, fees which were previously waived by the Adviser which may
be subject to possible future reimbursement to the Adviser were as follows:
Potential
Amount of
Fund Recovery (000) Expiration
- --------------------------------------------------------------------------------
Technology Growth $ 2 2007
Corporate Bond 4 2007
1 2008
Government Bond 16 2007
15 2008
20 2009
California Tax Exempt Bond 22 2007
24 2008
26 2009
High Yield Bond 39 2007
42 2008
40 2009
California Tax Exempt Money Market 575 2007
427 2008
456 2009
- --------------------------------------------------------------------------------
5. INVESTMENT TRANSACTIONS:
The cost of security purchases and proceeds from the sale and maturities of
securities, other than temporary investments in short-term securities for the
six months ended March 31, 2006, 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 $ -- $ 53,573 $ -- $ 12,140
Large Cap Growth Equity -- 9,230 -- 6,404
RCB Small Cap Value -- 28,103 -- 28,073
Technology Growth -- 279 -- 414
Corporate Bond 1,454 5,446 430 4,553
Government Bond 15,088 -- 11,667 --
California Tax Exempt Bond -- 6,546 -- 2,950
High Yield Bond -- 4,641 -- 8,042
- --------------------------------------------------------------------------------
CNI CHARTER FUNDS | PAGE 63
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
6. FEDERAL TAX INFORMATION:
It is each Fund's intention to continue to qualify as a regulated investment
company for Federal income tax purposes and distribute all of its taxable income
and net capital gains. Accordingly, no provisions for Federal income taxes are
required.
The Funds may be subject to taxes imposed by countries in which they invest,
with respect to their investments, in issuers existing or operating in such
countries. Such taxes are generally based on income earned. The Funds accrue
such taxes when the related income is earned.
The timing and characterization of certain income and capital gains
distributions are determined annually in accordance with Federal tax
regulations, which may differ from accounting principles generally accepted in
the United States of America. As a result, net investment income (loss) and net
realized gain (loss) on investment transactions for a reporting period may
differ significantly from distributions during such period. These book/tax
differences may be temporary or permanent. To the extent these differences are
permanent in nature, they are charged or credited to undistributed net
investment income (loss), or accumulated net realized gain (loss), as
appropriate, in the period that the differences arise.
The tax character of dividends and distributions declared dur- ing the years
ended September 30, 2005 and September 30, 2004 are shown below:
Tax Long-term
Exempt Ordinary Capital
Income Income Gain Total
Fund (000) (000) (000) (000)
- --------------------------------------------------------------------------------
Large Cap Value Equity
2005 $ -- $ 535 $ 1,908 $ 2,443
2004 -- 367 -- 367
Large Cap Growth Equity
2005 -- 198 -- 198
2004 -- 17 -- 17
RCB Small Cap Value
2005 -- 521 2,493 3,014
2004 -- -- 87 87
Corporate Bond
2005 -- 1,919 303 2,222
2004 -- 1,913 222 2,135
Government Bond
2005 -- 739 120 859
2004 -- 450 211 661
California Tax Exempt Bond
2005 593 -- 82 675
2004 459 63 139 661
High Yield Bond
2005 -- 3,404 -- 3,404
2004 -- 2,846 -- 2,846
Prime Money Market
2005 -- 14,619 -- 14,619
2004 -- 2,720 -- 2,720
Government Money Market
2005 -- 38,829 -- 38,829
2004 -- 7,492 -- 7,492
California Tax Exempt Money Market
2005 9,088 -- 173 9,261
2004 2,227 3 1 2,231
As of September 30, 2005, the components of Distributable Earnings/(Accumulated
Losses) on a tax basis were as follows:
Undistributed Undistributed Undistributed Capital
Tax-Exempt Ordinary Long-term Loss Post-October
Income Income Capital Gain Carryforwards Losses
Fund (000) (000) (000) (000) (000)
- --------------------------------------------------------------------------------------------------------------------
Large Cap Value Equity $ -- $ 139 $ 3,782 $ -- $ --
Large Cap Growth Equity -- 13 -- (4,410) --
RCB Small Cap Value -- 66 1,121 -- --
Technology Growth -- 4 -- (1,605) --
Corporate Bond -- 165 -- -- (64)
Government Bond -- 77 -- -- (59)
California Tax Exempt Bond 54 26 61 -- --
High Yield Bond -- 251 -- (965) (272)
Prime Money Market -- 1,987 -- (403) --
Government Money Market -- 4,718 -- -- --
California Tax Exempt Money Market 1,030 -- -- -- --
Unrealized Other Total
Appreciation Temporary Distributable Earnings
(Depreciation) Differences (Accumulated Losses)
Fund (000) (000) (000)
- ---------------------------------------------------------------------------------------------
Large Cap Value Equity $ 11,131 $ (139) $ 14,913
Large Cap Growth Equity 3,572 (13) (838)
RCB Small Cap Value 13,603 -- 14,790
Technology Growth 109 (1) (1,493)
Corporate Bond (184) (166) (249)
Government Bond (280) (74) (336)
California Tax Exempt Bond (45) (54) 42
High Yield Bond 355 (251) (882)
Prime Money Market -- (1,986) (402)
Government Money Market -- (4,714) 4
California Tax Exempt Money Market -- (1,034) (4)
CNI CHARTER FUNDS | PAGE 64
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,
2005, the breakdown of capital loss carryforwards is as follows:
Expiring September 30,
------------------------------------
2010 2011 2012 2013
Fund (000) (000) (000) (000)
- --------------------------------------------------------------------------------
Large Cap Growth Equity $ 2,894 $ 1,516 $ -- $ --
Technology Growth 392 658 328 227
High Yield Bond 33 932 -- --
Prime Money Market 403 -- -- --
- --------------------------------------------------------------------------------
During the year ended September 30, 2005, the following funds had utilized
capital loss carryforwards to offset capital gains amounting to:
Amount
Fund (000)
- --------------------------------------------------------------------------------
Large Cap Growth Equity $ 357
High Yield Bond 123
Prime Money Market 1
- --------------------------------------------------------------------------------
Post-October losses represent losses realized on investments and foreign
currency transactions from November 1, 2004 through September 30, 2005 that, in
accordance with Federal income tax regulations, the Funds have elected to defer
and treat as having arisen in the following fiscal year.
The aggregate gross unrealized appreciation on securities, the aggregate gross
unrealized (depreciation) on securities and the net unrealized
appreciation/(depreciation) for tax purposes at March 31, 2006 for each of the
Equity and Fixed Income Funds were as follows:
Aggregate Aggregate Net
Gross Gross Unrealized
Federal Unrealized Unrealized Appreciation
Tax Cost Appreciation Depreciation (Depreciation)
Fund (000) (000) (000) (000)
- --------------------------------------------------------------------------------
Large Cap Value Equity $ 87,827 $ 16,075 $ (1,580) $ 14,495
Large Cap Growth Equity 42,515 6,219 (2,107) 4,112
RCB Small Cap Value 72,447 14,736 (3,787) 10,949
Technology Growth 2,547 537 (314) 223
Corporate Bond 53,898 189 (1,350) (1,161)
Government Bond 33,314 2 (641) (639)
California Tax Exempt
Bond 25,286 32 (308) (276)
High Yield Bond 39,439 1,174 (837) 337
- --------------------------------------------------------------------------------
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 65
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2006 (UNAUDITED)
- --------------------------------------------------------------------------------
8. CAPITAL SHARES ISSUED AND REDEEMED:
Capital share activity for the six months ended March 31, 2006 (Unaudited) and
the year ended September 30, 2005 were as follows:
LARGE CAP VALUE LARGE CAP GROWTH RCB SMALL CAP TECHNOLOGY
EQUITY FUND (000) EQUITY FUND (000) VALUE FUND (000) GROWTH FUND (000)
------------------ ----------------- ------------------ ------------------
2006 2005 2006 2005 2006 2005 2006 2005
- --------------------------------------------------------- ------------------ ------------------ ------------------
CAPITAL SHARES ISSUED AND REDEEMED:
INSTITUTIONAL CLASS:
Shares Issued 4,949 877 755 1,493 118 279 59 113
Shares Issued in Lieu of
Dividends and Distributions 268 74 2 7 6 12 1 --
Shares Redeemed (636) (821) (622) (684) (98) (130) (74) (101)
- --------------------------------------------------------- ------------------ ------------------ ------------------
Net Institutional
Class Transactions 4,581 130 135 816 26 161 (14) 12
========================================================= ================== ================== ==================
CLASS A:
Shares Issued 177 515 325 454 35 259 28 9
Shares Issued in Lieu of
Dividends and Distributions 45 36 -- 3 5 14 -- --
Shares Redeemed (75) (149) (91) (111) (56) (101) (28) (15)
- --------------------------------------------------------- ------------------ ------------------ ------------------
Net Class A Transactions 147 402 234 346 (16) 172 -- (6)
========================================================= ================== ================== ==================
CLASS R:
Shares Issued -- -- -- -- 286 1,014 -- --
Shares Issued in Lieu of
Dividends and Distributions -- -- -- -- 27 73 -- --
Shares Redeemed -- -- -- -- (450) (389) -- --
- --------------------------------------------------------- ------------------ ------------------ ------------------
Net Class R Transactions -- -- -- -- (137) 698 -- --
========================================================= ================== ================== ==================
CALIFORNIA HIGH YIELD
CORPORATE BOND GOVERNMENT BOND TAX EXEMPT BOND BOND
FUND (000) FUND (000) FUND (000) FUND (000)
---------------- ---------------- ----------------- -------------------
2006 2005 2006 2005 2006 2005 2006 2005
- ------------------------------------------------------- ---------------- ----------------- ------------------
CAPITAL SHARES ISSUED AND REDEEMED:
INSTITUTIONAL CLASS:
Shares Issued 821 1,476 689 1,238 463 867 299 648
Shares Issued in Lieu of
Dividends and Distributions 19 38 14 20 13 13 49 102
Shares Redeemed (650) (967) (234) (521) (280) (370) (553) (708)
- ------------------------------------------------------- ---------------- ---------------- ------------------
Net Institutional
Class Transactions 190 547 469 737 196 510 (205) 42
======================================================= ================ ================ ==================
CLASS A:
Shares Issued 11 58 20 26 1 29 37 485
Shares Issued in Lieu of
Dividends and Distributions 1 3 -- 1 -- 2 46 99
Shares Redeemed (23) (55) (9) (15) (23) (120) (240) (478)
- ------------------------------------------------------- ---------------- ----------------- ------------------
Net Class A Transactions (11) 6 11 12 (22) (89) (157) 106
======================================================= ================ ================= ==================
AMOUNTS DESIGNATED AS "--" ARE EITHER 0 OR HAVE BEEN ROUNDED TO 0.
CNI CHARTER FUNDS | PAGE 66
California
PRIME GOVERNMENT TAX EXEMPT
MONEY MARKET MONEY MARKET MONEY MARKET
FUND (000) FUND (000) FUND (000)
----------------------- ------------------------- -----------------------
2006 2005 2006 2005 2006 2005
- ------------------------------------------------------------------- ------------------------- -----------------------
CAPITAL SHARES ISSUED AND REDEEMED:
INSTITUTIONAL CLASS:
Shares Issued 784,258 1,215,600 332,199 376,258 658,709 1,139,802
Shares Issued in Lieu of
Dividends and Distributions 1,175 1,411 1 7 -- 8
Shares Redeemed (788,637) (1,251,828) (317,706) (387,834) (665,299) (1,145,985)
- ------------------------------------------------------------------- ------------------------- -----------------------
Net Institutional
Class Transactions (3,204) (34,817) 14,494 (11,569) (6,590) (6,175)
=================================================================== ========================= =======================
CLASS A:
Shares Issued 819,291 958,549 2,407,104 4,965,371 877,202 1,822,478
Shares Issued in Lieu of
Dividends and Distributions 1,976 982 22,926 23,227 5,452 6,066
Shares Redeemed (668,208) (848,138) (2,472,405) (4,950,864) (831,605) (1,763,753)
- ------------------------------------------------------------------- ------------------------- -----------------------
Net Class A Transactions 153,059 111,393 (42,375) 37,734 51,049 64,791
=================================================================== ========================= =======================
CLASS S:
Shares Issued 386,124 499,380 449,968 689,747 171,184 271,376
Shares Issued in Lieu of
Dividends and Distributions -- -- -- -- -- --
Shares Redeemed (346,068) (411,638) (438,993) (724,928) (154,825) (216,708)
- ------------------------------------------------------------------- ------------------------- -----------------------
Net Class S Transactions 40,056 87,742 10,975 (35,181) 16,359 54,668
=================================================================== ========================= =======================
AMOUNTS DESIGNATED AS "--" ARE EITHER 0 OR HAVE BEEN ROUNDED TO 0.
CNI CHARTER FUNDS | PAGE 67
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 "Expenses 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 EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
10/1/05 3/31/06 RATIOS PERIOD*
- --------------------------------------------------------------------------------
LARGE CAP VALUE FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,086.10 0.95% $4.94
Class A 1,000.00 1,084.90 1.20% 6.24
HYPOTHETICAL 5% RETURN
Institutional Class 1,000.00 $1,020.19 0.95% $4.78
Class A 1,000.00 1,018.95 1.20% 6.04
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
10/1/05 3/31/06 RATIOS PERIOD*
- --------------------------------------------------------------------------------
LARGE CAP GROWTH FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,033.30 0.98% $4.97
Class A 1,000.00 1,032.70 1.23% 6.23
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,020.04 0.98% $4.94
Class A 1,000.00 1,018.90 1.23% 6.19
* Expenses are equal to the Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 182/365 (to reflect
one-half year period).
CNI CHARTER FUNDS | PAGE 68
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
10/1/05 3/31/06 RATIOS PERIOD*
- --------------------------------------------------------------------------------
RCB SMALL CAP VALUE FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,027.80 1.19% $6.02
Class A 1,000.00 1,026.80 1.44% 7.28
Class R 1,000.00 1,026.50 1.44% 7.28
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,019.00 1.19% $5.99
Class A 1,000.00 1,017.75 1.44% 7.24
Class R 1,000.00 1,017.75 1.44% 7.24
- --------------------------------------------------------------------------------
TECHNOLOGY FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,087.60 1.20% $6.25
Class A 1,000.00 1,085.60 1.50% 7.80
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,018.95 1.20% $6.04
Class A 1,000.00 1,017.45 1.50% 7.54
- --------------------------------------------------------------------------------
CORPORATE BOND FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Class $1,000.00 $ 999.30 0.75% $3.74
Class A 1,000.00 999.00 1.00% 4.98
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,021.19 0.75% $3.78
Class A 1,000.00 1,019.95 1.00% 5.04
- --------------------------------------------------------------------------------
GOVERNMENT BOND FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,000.90 0.70% $3.49
Class A 1,000.00 1,000.60 0.95% 4.74
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,021.44 0.70% $3.53
Class A 1,000.00 1,020.19 0.95% 4.78
- --------------------------------------------------------------------------------
CALIFORNIA TAX-EXEMPT BOND FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,004.00 0.50% $2.50
Class A 1,000.00 1,002.70 0.75% 3.74
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,022.44 0.50% $2.52
Class A 1,000.00 1,021.19 0.75% 3.78
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
10/1/05 3/31/06 RATIOS PERIOD*
- -------------------------------------------------------------------------------
HIGH YIELD BOND FUND
- -------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,036.20 1.00% $5.08
Class A 1,000.00 1,034.60 1.30% 6.59
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,019.95 1.00% $5.04
Class A 1,000.00 1,018.45 1.30% 6.54
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PRIME MONEY MARKET FUND
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ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,018.30 0.59% $2.97
Class A 1,000.00 1,017.20 0.81% 4.07
Class S 1,000.00 1,016.20 1.01% 5.08
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,021.99 0.59% $2.97
Class A 1,000.00 1,020.89 0.81% 4.08
Class S 1,000.00 1,019.90 1.01% 5.09
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GOVERNMENT MONEY MARKET FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,017.90 0.60% $3.02
Class A 1,000.00 1,016.80 0.82% 4.12
Class S 1,000.00 1,015.80 1.02% 5.13
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,021.94 0.60% $3.02
Class A 1,000.00 1,020.84 0.82% 4.13
Class S 1,000.00 1,019.85 1.02% 5.14
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CALIFORNIA TAX EXEMPT MONEY MARKET FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,011.70 0.55% $2.76
Class A 1,000.00 1,010.50 0.78% 3.91
Class S 1,000.00 1,009.50 0.98% 4.91
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,022.19 0.55% $2.77
Class A 1,000.00 1,021.04 0.78% 3.93
Class S 1,000.00 1,020.04 0.98% 4.94
* Expenses are equal to the Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 182/365 (to reflect
one-half year period).
CNI CHARTER FUNDS | PAGE 69
APPROVAL OF INVESTMENT ADVISORY AGREEMENTS (UNAUDITED)
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The Board of Trustees of CNI Charter Funds (the "Trust") is comprised of four
Trustees, all of whom are independent of the Trust's investment advisers and
sub-advisers. During the six months ended March 31, 2006, the Board of Trustees
approved the Trust's advisory agreement (the "Management Agreement") with City
National Asset Management, Inc. ("CNAM") and CNAM's sub-advisory agreement (the
"Sub-Advisory Agreement") with Reed, Conner & Birdwell, LLC ("RCB") with respect
to the RCB Small Cap Value Fund (the "RCB Fund").
GENERAL INFORMATION
The following information summarizes the Board's considerations associated with
its approval of each of the agreements. In connection with their deliberations,
the Board considered such information and factors as they believed, in light of
the legal advice furnished to them and their own business judgment, to be
relevant. The Management Agreement and the Sub-Advisory Agreement were
considered separately for each relevant investment portfolio of the Trust (each
a "Fund"), although the Board took into account the common interests of all the
relevant Funds in its review. As described below, the Board considered the
nature, quality and extent of the various investment advisory and administrative
services performed by CNAM and RCB. In considering these matters, the Board
discussed the approval of the agreements with management and in private sessions
with counsel at which no representatives of CNAM or RCB were present.
The Board reviewed extensive materials regarding investment results of CNAM and
RCB, advisory fee and expense comparisons, financial and profitability
information with respect to each entity, descriptions of various functions such
as compliance monitoring and portfolio trading practices, and information about
the personnel providing investment management and administrative services to the
Funds.
In deciding to approve the agreements, the Board did not identify a single
factor as controlling and this summary does not describe all of the matters
considered. However, the Board concluded that each of the various factors
referred to below favored such approval.
CNAM
NATURE, EXTENT AND QUALITY OF SERVICES
In reviewing the services provided by CNAM, the Board considered a variety of
matters, including the background, education and experience of its key portfolio
management and operational personnel; its overall financial strength and
stability; its resources and efforts to retain, attract and motivate capable
personnel to serve the Funds; and the overall general quality and depth of its
organization. The Board also took into account the experience, capability and
integrity of its senior management; its investment philosophy and processes as
well as brokerage, trading and soft dollar practices; its disaster recovery and
contingency planning; and its commitment and systems in place with regard to
compliance with applicable laws and regulations.
INVESTMENT PERFORMANCE
The Board assessed the performance of each Fund compared with its respective
benchmark and the average of all funds in its respective peer group category
(each, a "universe") selected by Lipper, Inc. and iMoneyNet, Inc. (for the money
market funds only) for the one-, two-, three- and five-year periods ended
December 31, 2005.The Board also reviewed the performance of each Fund compared
with the average performance of all funds in its respective "bank channel"
universe, which includes only those funds in the Fund's Lipper universe that are
distributed through institutional and retail bank channels. The Board made the
following observations in reviewing the Funds' performance:
o The annualized total returns of the PRIME MONEY MARKET FUND were slightly
below but near those of the averages of the Lipper institutional money
market fund universe, iMoneyNet prime institutional fund universe, and
bank channel universe.
o The annualized total returns of the GOVERNMENT MONEY MARKET FUND were
slightly below but near those of the averages of the Lipper institutional
U.S. government money market fund universe, iMoneyNet government
institutional fund universe, and bank channel universe.
CNI CHARTER FUNDS | PAGE 70
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o The annualized total returns of the TAX EXEMPT MONEY MARKET FUND were
approximately equal to those of the averages of the Lipper California tax
exempt money market fund universe, iMoneyNet state specific institutional
(California) fund universe, and bank channel universe.
o The annualized total returns of the LARGE CAP GROWTH EQUITY FUND were
below those of the averages of the Lipper large cap growth fund universe,
the bank channel universe and the S&P 500/Citigroup Growth Index for the
one-year period (except the S&P 500/Citigroup Index), the two-year period
(except the S&P 500/Citigroup Index), and the three-year period, and were
above all those measures for the five-year period.
o The annualized total returns of the LARGE CAP VALUE EQUITY FUND were above
those of the averages of the Lipper large cap value funds universe and the
bank channel universe for the one-, two- and three-year periods; at or
below the S&P 500/Citigroup Value Index for those periods; and
approximately equal to those measures (except the S&P 500/Citigroup Index)
for the five-year period.
o The annualized total returns of the RCB SMALL CAP VALUE FUND were below
those of the averages of the Lipper small cap core funds universe and bank
channel universe and the Russell 2000 Index for the one-, two- and
three-year periods, and equal to or above all those measures for the
five-year period.
o The annualized total returns of the TECHNOLOGY GROWTH FUND were near or
above those of the Russell 3000 Technology Index for all periods and below
those of the averages of the Lipper science & technology funds universe
and the bank channel universe for all periods.
o The annualized total returns of the CORPORATE BOND FUND were above those
of the averages of the Lipper short/intermediate investment-grade universe
and the bank channel universe for all periods and at or below those of the
Lehman Intermediate US Corporate Index for all periods.
o The annualized total returns of the GOVERNMENT BOND FUND were at or above
those of the averages of the Lipper short/intermediate US government
universe and the bank channel universe for all periods, and below those of
the Lehman US Government Bond Index for all periods.
o The annualized total returns of the CALIFORNIA TAX EXEMPT BOND FUND were
above those of the averages of the Lipper California short/intermediate
debt universe and the bank channel universe for all periods (except the
one-year period for the Lipper universe), and below those of the Lehman
California Intermediate-Short Municipal Index for all periods (except the
one-year period).
o The annualized total returns of the HIGH YIELD BOND FUND were
approximately at or above those of the averages of the Lipper high current
yield bond funds universe and the bank channel universe and the Citigroup
Bond High-Yield Market Index for the two-year period and the five-year
periods (except the Citigroup Index), and were below those measures for
the one- and three-year periods.
The Board determined that CNAM continued to provide high quality services to the
Funds. They noted that the investment results of the Funds during the past year
and previous periods were generally good; that in the instances where some of
the Funds had below average short-term performance results their longer term
results were good; that the results for the Money Market Funds and Technology
Fund compared to their peer groups were acceptable given the special services
and investment focus of those Funds; and that measurements of performance
relative to market indexes needed to recognize that indexes did not reflect the
expenses of operating mutual funds.
ADVISORY FEES AND FUND EXPENSES
The Board reviewed information regarding the advisory fees charged by CNAM and
total expenses of each of the Funds compared to those of the funds included in
the relevant Lipper and bank channel universes, and concluded that the advisory
fees and expenses of the Funds continued to be reasonable.
The Board observed that the management fees paid by the Funds for the year ended
December 31, 2005 were at or below the averages for relevant Lipper fund
universes and bank channel universes except for the fees paid by the Money
Market Funds and High Yield Bond Fund, which were slightly above the averages
but within the middle 60% of the comparable funds. The Board noted that the
Funds represented CNAM's sole investment advisory client, and it would not be
able to compare the fees charged to the Funds by CNAM with fees charged to other
institutional clients of CNAM.
CNI CHARTER FUNDS | PAGE 71
APPROVAL OF INVESTMENT ADVISORY AGREEMENTS (UNAUDITED) (CONCLUDED)
- --------------------------------------------------------------------------------
With respect to the total expenses of the Funds, the Board considered that total
expenses for the year ended December 31, 2005 were below the averages for
relevant Lipper universes and bank channel universes except for the total
expenses of the Government Money Market Fund, which were above the median for
the comparable funds. The Board noted, however, that the Money Market Funds
offered unique features such as automatic sweep functions, late cut-off times
for investment, and no minimum transaction size requirements, and as a result
had high levels of activity and considerable asset volatility, which created
substantial demands on CNAM's portfolio management staff.
The Board considered information prepared by CNAM relating to its costs and
profits, recognizing that CNAM has no clients other than the Funds. The Board
also considered the benefits received by CNAM and its affiliates as a result of
CNAM's relationship with the Funds, including fees paid to City National Bank
and City National Securities for providing certain shareholder servicing and
sub-distribution services to the Trust, and the intangible benefits of the
favorable publicity arising in connection with the Funds' performance. They also
noted that, although there were no advisory fee breakpoints, the asset levels of
most of the Funds were not so substantial that they would lead to significant
economies of scale, and that as the majority of CNAM's operating expenses are
employee salaries its operating expenses would not decrease significantly if the
Funds' asset levels changed.
CONCLUSIONS
Based on its review, including its consideration of each of the factors referred
to above, the Board concluded that the Management Agreement represents fair and
reasonable compensation in light of the nature and quality of the services being
provided by CNAM to the respective Funds and their shareholders.
RCB
NATURE, EXTENT AND QUALITY OF SERVICES
In reviewing the services provided by RCB to the RCB Fund, the Board considered
a variety of matters, including the background, education and experience of its
key portfolio management and operational personnel; its overall financial
strength and stability; its resources and related efforts to retain, attract and
motivate capable personnel to serve the RCB Fund; and the overall general
quality and depth of its organization. The Board also reviewed RCB's investment
philosophy and processes as well as brokerage, trading and soft dollar
practices.
INVESTMENT PERFORMANCE
The Board's observations regarding the RCB Fund's performance is described above
in the "INVESTMENT PERFORMANCE" section under "CNAM." As indicated above, the
Board concluded that RCB continued to provide high quality services to the RCB
Fund. They noted that the longer-term investment results of the RCB Fund were
good, and that measurements of performance relative to market indexes needed to
recognize that indexes did not reflect the expenses of operating mutual funds.
ADVISORY FEES AND FUND EXPENSES
The Board reviewed information regarding the advisory fees charged by RCB and
observed that the fees charged by RCB were low compared to the fees it charged
to other institutional clients. The Trustees noted that CNAM pays RCB's advisory
fees out of CNAM's advisory fee. Although RCB's fee schedule has no breakpoints,
the Board also noted that the asset levels of the RCB Fund were not so
substantial that they would lead to significant economies of scale.
The Board considered information prepared by RCB relating to its costs and
profits with respect to the RCB Fund, as well as the methodologies used to
determine and allocate such costs to its management of the Fund. The Board also
considered the benefits received by RCB and its affiliates as a result of RCB's
relationship with the Funds, including the intangible benefits of the favorable
publicity arising in connection with the RCB Fund's performance, fees paid to
CNAM as the Fund's adviser, and fees paid to City National Bank and City
National Securities for providing certain shareholder servicing and
sub-distribution services to the Trust.
CONCLUSIONS
Based on its review, including the Trustees' consideration of each of the
factors referred to above, the Board concluded that the RCB Agreement represents
fair and reasonable compensation in light of the nature and quality of the
services being provided by RCB to the RCB Fund and its shareholders.
CNI CHARTER FUNDS | PAGE 72
- --------------------------------------------------------------------------------
for your investment with CNI Charter Funds.
THANK YOU We value the trust you have placed in us to
help you achieve your financial goals.
- --------------------------------------------------------------------------------
For more information on CNI Charter Funds, including charges and expenses,
please call 1-888-889-0799 or visit cnicharterfunds.com for a free prospectus.
Read it carefully before you invest or send money.
CNI CHARTER FUNDS (SM) [LOGO] (R)
CNI-SA-002-0200
ITEM 2. CODE OF ETHICS.
Not applicable for semi-annual report.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable for semi-annual report.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable for semi-annual report.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to open-end 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 of 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) Not applicable for semi-annual report.
(a)(2) A separate certification for the principal executive officer and the
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), are filed
herewith.
(b) Officer certifications as required by Rule 30a-2(b) under the Investment
Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany this filing
as an Exhibit.
- --------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) CNI Charter Funds
By (Signature and Title)* /s/ Vernon C. Kozlen
-------------------------------------
Vernon C. Kozlen, President & CEO
Date May 25, 2006
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/ Vernon C. Kozlen
-------------------------------------
Vernon C. Kozlen, President & CEO
Date May 25, 2006
By (Signature and Title)* /s/ Eric Kleinschmidt
-------------------------------------
Eric Kleinschmidt, Controller and COO
Date May 25, 2006
* Print the name and title of each signing officer under his or her signature.