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 811-05059
HIGHMARK FUNDS
(Exact name of registrant as specified in charter)
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One Freedom Valley Drive
Oaks, Pennsylvania 19456
(Address of principal executive offices) (Zip code)
John M. Loder, Esq.
Ropes & Gray LLP
One Embarcadero Center, Suite 2200
San Francisco, CA 94111
(Name and address of agent for service)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 1-800-433-6884
DATE OF FISCAL YEAR END: JULY 31, 2007
DATE OF REPORTING PERIOD: JULY 31, 2007
ITEM 1. REPORTS TO STOCKHOLDERS.
The Annual Report to Shareholders for the fiscal year ended July 31, 2007 is
filed herewith.
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JULY 31, 2007
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HIGHMARK
The smarter approach to investing.
ANNUAL
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REPORT
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TABLE OF CONTENTS
management's discussion of fund performance
balanced fund ...................................................... 2
cognitive value fund ............................................... 4
core equity fund ................................................... 6
enhanced growth fund ............................................... 8
international opportunities fund ................................... 10
large cap growth fund............................................... 12
large cap value fund ............................................... 14
small cap advantage fund ........................................... 16
small cap value fund ............................................... 18
value momentum fund ................................................ 20
capital growth allocation fund ..................................... 22
diversified equity allocation fund ................................. 24
growth & income allocation fund .................................... 26
income plus allocation fund ........................................ 28
bond fund .......................................................... 30
california intermediate tax-free bond fund ......................... 32
national intermediate tax-free bond fund ........................... 34
short term bond fund ............................................... 36
california tax-free money market fund .............................. 38
taxable money market funds ......................................... 39
disclosure of fund expenses .............................................. 40
schedules of investments ................................................. 43
statements of assets and liabilities ..................................... 106
statements of operations ................................................. 110
statements of changes in net assets ...................................... 114
financial highlights ..................................................... 120
notes to financial statements ............................................ 130
report of independent registered public accounting firm .................. 147
notice to shareholders ................................................... 148
trustees and officers .................................................... 149
board approval of the existing advisory and sub-advisory agreements ...... 151
fund information ......................................................... 154
service providers & board of trustees .................................... 160
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This report and the financial statements contained herein are submitted for the
general information of HighMark Funds' shareholders. This report is not
authorized for distribution to prospective investors unless preceded or
accompanied by an effective prospectus.
Shares of HighMark Funds are not deposits or obligations of, or guaranteed by
Union Bank of California, N.A., or any of its subsidiaries or affiliates. Such
shares are also not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency. Investments in
shares of mutual funds involve risk, including the possible loss of principal.
SEI Investments Distribution Co. serves as Distributor for HighMark Funds and is
not affiliated with the Adviser of HighMark Funds, HighMark Capital Management,
Inc., or with Union Bank of California, N.A.
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TOP TEN HOLDINGS
COMPANY*,+ % OF
PORTFOLIO+
GENERAL ELECTRIC 3.9%
EXXON MOBIL 3.3
CITIGROUP 2.4
MICROSOFT 2.2
CISCO SYSTEMS 2.0
BANK OF AMERICA 1.9
JPMORGAN CHASE 1.8
U.S. TREASURY INFLATION INDEX NOTE,
3.000%, 07/15/12 1.7
AMERICAN INTERNATIONAL GROUP 1.7
VERIZON COMMUNICATIONS 1.7
FUND SECTORS
SECTOR+ % OF
PORTFOLIO+
FINANCIALS 15.2%
U.S. GOVERNMENT AGENCY OBLIGATIONS 14.5
INFORMATION TECHNOLOGY 13.3
CONSUMER DISCRETIONARY 9.1
INDUSTRIALS 8.8
HEALTH CARE 8.7
CONSUMER STAPLES 6.6
ENERGY 6.0
U.S. TREASURY OBLIGATIONS 4.0
REPURCHASE AGREEMENTS 3.4
UTILITIES 2.7
ASSET-BACKED SECURITIES 2.6
TELECOMMUNICATIONS 2.0
MATERIALS 2.0
FOREIGN GOVERNMENTS 1.1
* EXCLUDES SHORT-TERM FIXED INCOME SECURITIES.
+ EXCLUDES SECURITIES PURCHASED WITH CASH COLLATERAL RECEIVED FROM
SECURITIES LENDING.
BALANCED FUND (UNAUDITED)
PERFORMANCE
For the year ended July 31, 2007, HighMark Balanced Fund (the "Fund")
produced a total return of 11.47% (Fiduciary Shares). In comparison, for
the same period, the unmanaged S&P 500 Composite Index returned 16.13%,
the Lehman Brothers U.S. Aggregate Bond Index returned 5.56% and the
unmanaged blended index of 60% S&P 500 Composite Index and 40% Lehman
Brothers U.S. Aggregate Bond Index returned 11.89%.
FACTORS AFFECTING PERFORMANCE
The beginning of the fiscal period was marked by the strong performance of
the U.S. economy. Despite a weak housing market and the ongoing war in
Iraq, productivity was healthy, inflation was relatively low, job growth
remained steady and capital spending continued. However, the second half
of the Fund's reporting period brought concerns about sub-prime lending
practices and an Iran-Britain hostage crisis that resulted in a further
increase in oil prices.
The Fund's equity underperformance can largely be attributed to sector
weightings. The Fund primarily benefited from stock selection within the
energy and materials sectors, as well as sector selection in the
information technology sector. Exxon Mobil, one of the Fund's largest
holdings, performed well as international growth fueled oil prices.
However, solid performance within these sectors was dampened by the
consumer discretionary and consumer staples sectors. In the consumer
discretionary sector, Starbucks Corp. detracted from performance due to
slower sales and higher dairy prices.
For fixed-income investors, the Fund benefited early in the reporting
period from its overweight in mortgage-backed risk relative to treasuries,
but the Fund's exposure to interest rate risk was less than that of the
overall market. As interest rates declined, this exposure resulted in a
slight detraction from performance during the first half of the Fund's
reporting period. The Fund benefited from its lower interest rate risk
(shorter duration), but its relatively high corporate bond weighting was a
negative influence.
Slower GDP growth at the beginning of the second half of the Fund's
reporting period seemed to validate widespread market slowdown concerns.
After briefly resuming a healthy pace, sub-prime housing market issues
caused a flight to quality among investors, and a steep decline in both
corporate bonds and mortgaged-backed securities occurred at the end of the
Fund's fiscal period. As a result, the Fund's performance lagged behind
its blended benchmark for the reporting period.
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HIGHMARK BALANCED FUND
INVESTMENT OBJECTIVE
HIGHMARK BALANCED FUND SEEKS CAPITAL APPRECIATION AND INCOME, WITH A SECONDARY
INVESTMENT OBJECTIVE OF CONSERVATION OF CAPITAL.
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PORTFOLIO MANAGER
DAVID GOERZ
HIGHMARK CAPITAL MANAGEMENT, INC.
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PORTFOLIO MANAGER
KENNETH WEMER
HIGHMARK CAPITAL MANAGEMENT, INC.
[PHOTO OMITTED]
PORTFOLIO MANAGER
JACK MONTGOMERY
HIGHMARK CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK BALANCED
FUND VERSUS THE S&P 500 COMPOSITE INDEX, THE LEHMAN BROTHERS U.S. AGGREGATE BOND
INDEX, AN UNMANAGED BLENDED INDEX OF 60% S&P 500 COMPOSITE INDEX AND 40% THE
LEHMAN BROTHERS U.S. AGGREGATE BOND INDEX AND THE MORNINGSTAR MODERATE
ALLOCATION CATEGORY.
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
Morningstar
HighMark HighMark HighMark HighMark 60/40 Hybrid S&P 500 Lehman Brothers Moderate
Balanced Fund, Balanced Fund, Balanced Fund, Balanced Fund, of the following Composite U.S. Aggregate Allocation
Fiduciary Shares Class A Shares Class B Shares+ Class C Shares+ two Indexes: Index Bond Index Category
7/31/97 $10,000 $ 9,450 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
7/98 10,731 10,123 10,699 10,731 11,481 11,929 10,787 10,978
7/99 11,800 11,099 11,652 11,800 13,029 14,339 11,056 12,067
7/00 12,069 11,324 11,807 11,998 14,075 15,625 11,716 12,872
7/01 11,363 10,628 11,017 11,192 13,520 13,386 13,202 12,760
7/02 9,745 9,090 9,363 9,513 11,911 10,223 14,196 11,222
7/03 10,456 9,740 9,961 10,121 12,998 11,311 14,966 12,146
7/04 11,294 10,486 10,660 10,828 14,284 12,801 15,690 13,245
7/05 12,346 11,437 11,546 11,721 15,766 14,600 16,442 14,849
7/06 12,812 11,839 11,881 12,063 16,373 15,385 16,682 15,581
7/07 14,281 13,158 13,121 13,327 18,319 17,867 17,609 17,496
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ANNUALIZED ANNUALIZED ANNUALIZED ANNUALIZED
ONE YEAR 3 YEAR 5 YEAR 10 YEAR SINCE
RETURN RETURN RETURN RETURN INCEPTION
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Fiduciary Shares 11.47% 8.13% 7.94% 3.63% 7.65%
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Class A Shares 11.14% 7.86% 7.68% 3.37% 7.45%+
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Class A Shares with load* 5.01% 5.85% 6.47% 2.78% 7.08%+
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Class B Shares 10.44% 7.17% 6.98% 2.75%+ 7.10%+
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Class B Shares with load** 5.44% 6.29% 6.68% 2.75%+ 7.10%+
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Class C Shares 10.48% 7.17% 6.98% 2.91%+ 7.20%+
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Class C Shares with load*** 9.48% 7.17% 6.98% 2.91%+ 7.20%+
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+ The performance presented links the performance of Fiduciary Shares from
February 1, 1991 with the performance of Class A Shares on November 13,
1992, Class B Shares on February 2, 1998 and Class C Shares on November
30, 1999. Fiduciary Share performance has been adjusted for the CDSC
applicable to Class A, Class B and Class C Shares, as applicable, but does
not reflect the higher Rule 12b-1 fees and expenses applicable to these
Classes. With those adjustments, performance would be lower than that
shown.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 5.00%.
*** Reflects maximum CDSC of 1.00%.
Past performance is not predictive of future results. Returns shown in the
graph and the table do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares. The returns for certain periods reflect fee waivers and/or
reimbursements in effect for that period; absent fee waivers and
reimbursements, performance would have been lower. Performance presented
from February 1, 1991 (commencement of operations of Fiduciary Shares) to
November 13, 1992 (commencement of Class A Shares) to April 25, 1997
reflects the performance of the Stepstone Balanced Fund.
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TOP TEN HOLDINGS
COMPANY* % OF
PORTFOLIO*
EMCOR GROUP 1.1%
CHAPARRAL STEEL 1.1
ACUITY BRANDS 1.0
ISHARES RUSSELL 2000 VALUE INDEX FUND 1.0
ISHARES S&P SMALLCAP 600 VALUE INDEX FUND 0.9
URS 0.9
COMFORT SYSTEMS USA 0.9
WOODWARD GOVERNOR 0.8
PHILLIPS-VAN HEUSEN 0.8
T-3 ENERGY SERVICES 0.8
FUND SECTORS
SECTOR* % OF
PORTFOLIO*
INDUSTRIALS 20.1%
FINANCIALS 19.3
CONSUMER DISCRETIONARY 14.8
INFORMATION TECHNOLOGY 13.9
MATERIALS 7.8
HEALTH CARE 6.3
ENERGY 6.2
CONSUMER STAPLES 4.5
UTILITIES 3.8
REGISTERED INVESTMENT COMPANY 2.3
REPURCHASE AGREEMENT 0.5
TELECOMMUNICATIONS 0.5
* EXCLUDES SECURITIES PURCHASED WITH CASH COLLATERAL RECEIVED FROM
SECURITIES LENDING.
COGNITIVE VALUE FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ended July 31, 2007, HighMark Cognitive Value Fund
(the "Fund") produced a total return of 11.97% (Class M Shares). In
comparison, the unmanaged S&P SmallCap 600/Citigroup Value Index returned
12.96% over the same period.
FACTORS AFFECTING PERFORMANCE
The Fund employs a unique quantitative behavioral factor model. This model
attempts to identify stocks for which investors have overreacted or
underreacted to recent news, subsequently causing the stock's price to
deviate from the company's underlying fundamental value.
During the first half of the fiscal year, the Fund underperformed its
benchmark, as quantitative factors used by the Fund detracted from
performance.
In the second half of the fiscal year, the Fund outperformed its
benchmark. During this period, small-cap value stocks trailed both larger
capitalization stocks and growth stocks. This performance followed a
multi-year period in which small-caps outperformed other sectors. This
market bias away from smaller capitalization stocks negatively affected
micro-cap stocks in particular. The Fund is overweighted in micro-cap
stocks (stocks under $300 million in market capitalization), which
underperformed the broader small-cap universe in the spring of 2007. The
net result was minimally negative in the micro-cap space, but was more
than offset by the Fund's other quantitative factors during the latter
half of the fiscal year. However, overall, the Fund did underperform its
benchmark for the full reporting period.
Generally, the Fund attempts to neutralize sector bets in the small-cap
value funds with which it competes. At times, competitor sector weights
deviate from the Fund's benchmark weights. During the fiscal year,
deviations from the benchmark's weights were counterproductive and,
consequently, affected the Fund's performance in relation to the
benchmark. Underweights in the utility and information technology sectors
added to performance, while an underweight in industrials and an
overweight in the consumer discretionary sector detracted from
performance.
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HIGHMARK COGNITIVE VALUE FUND INVESTMENT OBJECTIVE
HIGHMARK COGNITIVE VALUE FUND SEEKS LONG-TERM CAPITAL APPRECIATION.
[PHOTO OMITTED]
TEAM LEADER
TOM MUDGE
BAILARD, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK COGNITIVE
VALUE FUND VERSUS THE S&P SMALLCAP 600/CITIGROUP VALUE INDEX AND THE MORNINGSTAR
SMALL VALUE CATEGORY.
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
HighMark HighMark HighMark HighMark S&P SmallCap Morningstar
Cognitive Value Cognitive Value Cognitive Value Cognitive Value 600/Citigroup Small Value
Fund, Class M Shares Fund, Fiduciary Shares Fund, Class A Shares+ Fund, Class C Shares+ Value Index Category
5/30/01 $10,000 $10,000 $ 9,450 $10,000 $10,000 $10,000
7/01 10,070 10,057 9,509 10,046 10,343 10,567
7/02 9,528 9,494 8,954 9,412 9,428 9,267
7/03 10,412 10,350 9,738 10,185 10,879 10,519
7/04 12,358 12,255 11,502 11,970 13,201 11,464
7/05 15,317 15,154 14,186 14,690 16,614 12,780
7/06 16,551 16,361 15,280 15,721 17,763 13,256
7/07 18,534 18,320 17,041 17,417 20,066 14,752
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ANNUALIZED ANNUALIZED ANNUALIZED
ONE YEAR 3 YEAR 5 YEAR SINCE
RETURN RETURN RETURN INCEPTION
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Fiduciary Shares 11.97% 14.33%+ 14.06%+ 10.32%+
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Class A Shares 11.52% 14.00%+ 13.74%+ 10.02%+
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Class A Shares with load* 5.37% 11.88%+ 12.46%+ 9.01%+
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Class C Shares 10.79% 13.33%+ 13.10%+ 9.41%+
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Class C Shares with load** 9.80% 13.33%+ 13.10%+ 9.41%+
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Class M Shares 11.98% 14.46% 14.23% 10.52%
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+ The performance presented links the performance of Class M Shares from May
30, 2001 with the performance of Class A and Class C Shares on April 3,
2006 and Fiduciary Shares on July 3, 2006. Class M Share performance has
been adjusted for the maximum sales charge/CDSC applicable to Class A and
Class C Shares, as applicable, but does not reflect the higher Rule 12b-1
fees and expenses applicable to these Classes. With those adjustments,
performance would be lower than that shown.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 1.00%.
Past performance is not predictive of future results. Returns shown in the
graph and the table do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares. The returns for certain periods reflect fee waivers and/or
reimbursements in effect for that period; absent fee waivers and
reimbursements, performance would have been lower.
On April 3, 2006, HighMark Funds acquired the assets and assumed the
identified liabilities of Bailard Cognitive Value Fund (see Note 9 in
notes to financial statements). The fiscal year end of Bailard Cognitive
Value Fund, the predecessor fund to HighMark Cognitive Value Fund, was
September 30. The fiscal year end of the successor HighMark Fund is July
31. Fiduciary Shares commenced operations on July 3, 2006. Class A and
Class C Shares commenced operations on April 3, 2006. Fiduciary, Class A
and Class C returns, from commencement of operations through July 31,
2007, can be found in the financial highlights section of this report. The
return for Class M Shares, from September 30, 2005 through July 31, 2007,
can be found in the financial highlights section of this report.
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TOP TEN HOLDINGS
% OF
COMPANY* PORTFOLIO*
CHEVRON 3.4%
PFIZER 3.3
VERIZON COMMUNICATIONS 3.1
PARKER HANNIFIN 3.0
NORTHROP GRUMMAN 2.8
EMC 2.6
GOLDMAN SACHS GROUP 2.4
CONOCOPHILLIPS 2.4
APPLIED MATERIALS 2.3
MORGAN STANLEY 2.3
FUND SECTORS
% OF
SECTOR* PORTFOLIO*
FINANCIALS 19.0%
INFORMATION TECHNOLOGY 18.2
INDUSTRIALS 12.5
HEALTH CARE 10.8
CONSUMER DISCRETIONARY 9.7
ENERGY 9.7
CONSUMER STAPLES 9.0
MATERIALS 4.6
TELECOMMUNICATIONS 3.5
UTILITIES 2.5
REPURCHASE AGREEMENT 0.5
* EXCLUDES SECURITIES PURCHASED WITH CASH COLLATERAL RECEIVED FROM
SECURITIES LENDING.
CORE EQUITY FUND (UNAUDITED)
PERFORMANCE
For the year ended July 31, 2007, HighMark Core Equity Fund (the "Fund")
produced a total return of 14.61% (Fiduciary Shares). In comparison, the
unmanaged S&P 500 Composite Index returned 16.13% over the same period.
FACTORS AFFECTING PERFORMANCE
The first six months of the fiscal period were marked by the strong
performance of the U.S. economy. Despite a weak housing market and the
ongoing war in Iraq, productivity was healthy, inflation was relatively
low, job growth remained steady and capital spending continued. The
economy slowed during the second half of the Fund's fiscal period, due
mainly to credit and mortgage concerns, but remained healthy overall.
The Fund performed well during the fiscal year, with the exception of the
month of July. In response to the widely reported liquidity crisis, hedge
fund managers began liquidating assets to meet margin calls and investor
redemptions. This activity caused stocks to move in a direction opposite
from what would normally be expected for value-tilted disciplines as
quantitative equity managers in particular suffered across the board. As a
result of these particular exposures, the Fund's performance was adversely
impacted, and the Fund underperformed its benchmark, the unmanaged S&P 500
Composite Index.
Even though the Fund is relatively sector neutral, certain minor industry
sector investments paid off, including an overweight in semiconductors and
the semi-equipment industry, as well as an underweight in the commercial
banking industry. Industry sector investments that hurt performance
included an overweight in diversified financial services and an
underweight in communications equipment.
CIGNA, EMC and International Business Machines contributed positively to
results, while Allstate and Lexmark International detracted from the
Fund's overall performance.
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HIGHMARK CORE EQUITY FUND INVESTMENT OBJECTIVE
HIGHMARK CORE EQUITY FUND SEEKS LONG-TERM CAPITAL APPRECIATION.
[PHOTO OMITTED]
PORTFOLIO MANAGER
DAVID GOERZ
HIGHMARK CAPITAL
MANAGEMENT, INC.
[PHOTO OMITTED]
PORTFOLIO MANAGER
RICHARD ROCKE
HIGHMARK CAPITAL
MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK CORE
EQUITY FUND VERSUS THE S&P 500 COMPOSITE INDEX AND THE MORNINGSTAR LARGE BLEND
CATEGORY.
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
HighMark Core HighMark Core HighMark Core HighMark Core S&P 500 Morningstar
Equity Fund, Equity Fund, Equity Fund, Equity Fund, Composite Large Blend
Fiduciary Shares Class A Shares+ Class B Shares+ Class C Shares+ Index Category
5/31/00 $10,000 $9,450 $10,000 $10,000 $10,000 $10,000
7/00 9,768 9,231 9,758 9,768 10,087 10,125
7/01 8,312 7,829 8,230 8,312 8,642 8,879
7/02 6,296 5,914 6,178 6,296 6,600 6,877
7/03 6,872 6,441 6,685 6,872 7,302 7,495
7/04 7,546 7,051 7,260 7,503 8,264 8,356
7/05 8,411 7,849 8,030 8,298 9,425 9,570
7/06 9,213 8,567 8,723 9,003 9,932 10,045
7/07 10,559 9,787 9,906 10,227 11,535 11,633
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ANNUALIZED ANNUALIZED ANNUALIZED
ONE YEAR 3 YEAR 5 YEAR SINCE
RETURN RETURN RETURN INCEPTION
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Fiduciary Shares 14.61% 11.85% 10.89% 0.76%
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Class A Shares 14.24% 11.55% 10.60% 0.49%+
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Class A Shares with load* 7.96% 9.45% 9.36% -0.30%+
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Class B Shares 13.57% 10.92% 9.90% -0.13%+
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Class B Shares with load** 8.57% 10.10% 9.63% -0.13%+
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Class C Shares 13.59% 10.87% 10.19%+ 0.31%+
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Class C Shares with load*** 12.59% 10.87% 10.19%+ 0.31%+
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+ The performance presented links the performance of Fiduciary Shares from
May 31, 2000 with the performance of Class A and Class B Shares on June
30, 2000 and Class C Shares on November 28, 2003. Fiduciary Share
performance has been adjusted for the maximum sales charge/CDSC applicable
to Class A, Class B and Class C Shares, as applicable, but does not
reflect the higher Rule 12b-1 fees and expenses applicable to these
Classes. With those adjustments, performance would be lower than that
shown.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 5.00%.
*** Reflects maximum CDSC of 1.00%.
Past performance is not predictive of future results. Returns shown in the
graph and the table do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares. The returns for certain periods reflect fee waivers and/or
reimbursements in effect for that period; absent fee waivers and
reimbursements, performance would have been lower.
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TOP TEN HOLDINGS
COMPANY* % OF
PORTFOLIO*
APPLE 4.1%
GOOGLE, CL A 4.0
CISCO SYSTEMS 3.3
HEWLETT-PACKARD 3.0
MICROSOFT 2.7
POWERSHARES QQQ 2.0
EMC 2.0
QUALCOMM 1.9
INTERNATIONAL BUSINESS MACHINES 1.9
RESEARCH IN MOTION 1.9
FUND SECTORS
SECTOR* % OF
PORTFOLIO*
INFORMATION TECHNOLOGY 81.6%
HEALTH CARE 10.0
REGISTERED INVESTMENT COMPANY 2.4
TELECOMMUNICATIONS 2.2
CONSUMER DISCRETIONARY 2.1
REPURCHASE AGREEMENT 1.0
INDUSTRIALS 0.7
* EXCLUDES SECURITIES PURCHASED WITH CASH COLLATERAL RECEIVED FROM
SECURITIES LENDING.
ENHANCED GROWTH FUND (UNAUDITED)
PERFORMANCE
For the year ended July 31, 2007, HighMark Enhanced Growth Fund (the
"Fund") produced a total return of 26.89% (Class M Shares). In comparison,
the unmanaged NASDAQ 100 Index returned 28.61% for the same period.
FACTORS AFFECTING PERFORMANCE
During the first half of the Fund's fiscal year, three large industry
groups in which the Fund has holdings posted mediocre returns. These
groups were the semiconductors, communication equipment and systems
software industries. Outside of the technology area, the most notable
laggard was the health care sector, which produced a very small gain. The
Fund's overweighting in this sector, in relation to its competitive
benchmark, detracted from relative performance at the end of 2006.
However, during the second half of the Fund's reporting period, the
large-cap growth area of the market had a strong showing, specifically as
it pertained to information technology stocks.
In a reversal from the first half of the fiscal year, the Fund's holdings
in the semiconductor, communications equipment and computer storage
sub-sectors of the market contributed positively to total return in the
second half. In the semiconductor sector, Nvidia was one of the strongest
performing stocks of the fiscal year. Furthermore, Research In Motion,
Juniper Networks and F5 Networks all performed well in the communications
equipment sector, and EMC was a solid performer in the computer storage
sector.
The Fund's holdings in the application software sector, as well as in the
Internet software and services sector, detracted from its total return. In
the application software sector, Intuit and Amdocs did not perform to
expectations, and Yahoo and Akamai Technologies underperformed in the
Internet software and services sector.
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HIGHMARK ENHANCED GROWTH FUND INVESTMENT OBJECTIVE
HIGHMARK ENHANCED GROWTH FUND SEEKS LONG-TERM CAPITAL APPRECIATION.
[PHOTO OMITTED]
TEAM LEADER
SONYA THADHANI
BAILARD, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK ENHANCED
GROWTH FUND VERSUS THE NASDAQ 100 INDEX AND THE MORNINGSTAR SPECIALTY -
TECHNOLOGY CATEGORY.
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
HighMark Enhanced Growth HighMark Enhanced Growth HighMark Enhanced Growth NASDAQ Morningstar Specialty -
Fund, Class M Shares Fund, Class A Shares+ Fund, Class C Shares+ 100 Index Technology Category
5/30/01 $10,000 $9,450 $10,000 $10,000 $10,000
7/01 9,320 8,799 9,303 9,465 8,836
7/02 5,490 5,158 5,426 5,413 6,185
7/03 7,180 6,711 7,025 7,196 7,020
7/04 7,840 7,292 7,595 7,910 7,651
7/05 8,886 8,223 8,522 9,100 8,530
7/06 8,139 7,488 7,745 8,595 8,297
7/07 10,328 9,461 9,725 11,054 10,575
- --------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED
ONE YEAR 3 YEAR 5 YEAR SINCE
RETURN RETURN RETURN INCEPTION
- --------------------------------------------------------------------------------
Class A Shares 26.34% 9.05%+ 12.91%+ 0.01%+
- --------------------------------------------------------------------------------
Class A Shares with load* 19.37% 7.01%+ 11.62%+ -0.91%+
- --------------------------------------------------------------------------------
Class C Shares 25.56% 8.60%+ 12.36%+ -0.46%+
- --------------------------------------------------------------------------------
Class C Shares with load** 24.56% 8.60%+ 12.36%+ -0.46%+
- --------------------------------------------------------------------------------
Class M Shares 26.89% 9.62% 13.47% 0.52%+
- --------------------------------------------------------------------------------
+ The performance presented links the performance of Class M Shares from May
30, 2001 with the performance of Class A and Class C Shares on April 3,
2006. Class M Share performance has been adjusted for the maximum sales
charge/CDSC applicable to Class A and Class C Shares, as applicable, but
does not reflect the higher Rule 12b-1 fees and expenses applicable to
these Classes. With those adjustments, performance would be lower than
that shown.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 1.00%.
Past performance is not predictive of future results. Returns shown in the
graph and the table do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares. The returns for certain periods reflect fee waivers and/or
reimbursements in effect for that period; absent fee waivers and
reimbursements, performance would have been lower.
On April 3, 2006, HighMark Funds acquired the assets and assumed the
identified liabilities of Bailard Enhanced Growth Fund (see Note 9 in
notes to financial statements). The fiscal year end of Bailard Enhanced
Growth Fund, the predecessor fund to HighMark Enhanced Growth Fund, was
September 30. The fiscal year end of the successor HighMark Fund is July
31. Class A and Class C Shares commenced operations on April 3, 2006.
Class A and Class C returns, from commencement of operations through July
31, 2007, can be found in the financial highlights section of this report.
The return for Class M Shares, from September 30, 2005 through July 31,
2007, can be found in the financial highlights section of this report.
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[MOUNTAIN RANGE GRAPHIC OMITTED]
TOP TEN HOLDINGS
COMPANY*,+ % OF
PORTFOLIO+
TOTAL 1.0%
ROYAL DUTCH SHELL, CL A 0.9
NOKIA ADR 0.8
NOVARTIS 0.8
NESTLE 0.8
UBS 0.7
ROCHE HOLDING 0.7
ING GROEP 0.7
E.ON 0.7
THYSSENKRUPP 0.7
FUND SECTORS
SECTOR+ % OF
PORTFOLIO+
FINANCIALS 25.8%
INDUSTRIALS 15.7
MATERIALS 12.2
CONSUMER DISCRETIONARY 11.9
ENERGY 9.1
CONSUMER STAPLES 5.0
HEALTH CARE 5.0
INFORMATION TECHNOLOGY 4.7
TELECOMMUNICATIONS 4.2
UTILITIES 3.3
REPURCHASE AGREEMENT 1.6
REGISTERED INVESTMENT COMPANY 1.5
* EXCLUDES SHORT-TERM FIXED INCOME SECURITIES.
+ EXCLUDES SECURITIES PURCHASED WITH CASH COLLATERAL RECEIVED FROM
SECURITIES LENDING.
INTERNATIONAL OPPORTUNITIES FUND (UNAUDITED)
PERFORMANCE
For the year ended July 31, 2007, HighMark International Opportunities
Fund (the "Fund") produced a total return of 29.48% (Class M Shares). In
comparison, the unmanaged MSCI All-Country World ex-US Index (Net)
returned 27.95% over the same period.
FACTORS AFFECTING PERFORMANCE
News headlines at the beginning of the Fund's fiscal year were not
encouraging. August 2006 saw a marked increase in geopolitical tensions
due to a nuclear missile test initiated by North Korea, Iran's refusal to
back down from its own nuclear projects and fighting between Israel and
Hezbollah. Oil prices climbed a volatile path and reached $78 per barrel
amid the political unrest. However, an improvement in supply, a relatively
mild hurricane season and easing geopolitical tensions helped oil prices
to end the third quarter of 2006 at less than $63 per barrel.
Additionally, the international markets staged an impressive fourth
quarter rally, capping off the fourth consecutive strong year for
developed and emerging markets.
The first quarter of 2007 saw global equity investors faced with a brief
but dramatic episode of market turbulence in China, prompting a general
reassessment of risk appetite. Later in the year, stock prices increased,
and the global rally continued. Underlying this entire period was the
increase in perceived risks due to the sub-prime housing market in the
U.S. Even with the dramatic growth of overseas markets, U.S. demand for
foreign products continued to play a crucial role in global growth.
The Fund outperformed its benchmark, the MSCI All-Country World ex-U.S.
Index, for the fiscal year. The Fund's success in country selection came
mainly from emerging markets. Turkey and Brazil consistently ranked at the
top of the Fund's models during much of the period and were joined by
Thailand and India by the end of the reporting period. Very few country
allocation decisions detracted from results - one of which was
underweighting technology-rich Taiwan. Security selection within markets
also played a role in the Fund's success for the period. This factor was
most apparent in the developed markets of Germany, France and Japan.
- --------------------------------------------------------------------------------
10 1.800.433.6884
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[MOUNTAIN RANGE GRAPHIC OMITTED]
HIGHMARK INTERNATIONAL OPPORTUNITIES FUND INVESTMENT OBJECTIVE
HIGHMARK INTERNATIONAL OPPORTUNITIES FUND SEEKS LONG-TERM CAPITAL APPRECIATION.
[PHOTO OMITTED]
TEAM LEADER
PETER HILL
BAILARD, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK
INTERNATIONAL OPPORTUNITIES FUND VERSUS THE MSCI ALL-COUNTRY WORLD EX-US INDEX
AND THE MORNINGSTAR FOREIGN LARGE BLEND CATEGORY.
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
HighMark HighMark HighMark HighMark MCSI Morningstar
International International International International All-Country Foreign
Opportunities Fund, Opportunities Fund, Opportunities Fund, Opportunities Fund, World Large
Class M Shares Fiduciary Shares+ Class A Shares+ Class C Shares+ ex-US Index Blend Category
7/31/97 $10,000 $10,000 $ 9,450 $10,000 $10,000 $10,000
7/98 11,158 11,138 10,501 11,057 9,955 9,880
7/99 11,372 11,333 10,657 11,165 11,047 10,890
7/00 12,516 12,450 11,680 12,175 12,213 11,957
7/01 9,481 9,414 8,812 9,138 9,429 9,142
7/02 8,096 8,024 7,492 7,731 7,969 7,658
7/03 8,953 8,859 8,250 8,470 8,648 8,253
7/04 11,100 10,964 10,184 10,406 10,797 10,241
7/05 14,068 13,870 12,854 13,066 13,430 12,662
7/06 18,003 17,750 16,401 16,560 16,735 15,596
7/07 23,311 22,950 21,158 21,204 21,412 19,276
- --------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED ANNUALIZED
ONE YEAR 3 YEAR 5 YEAR 10 YEAR SINCE
RETURN RETURN RETURN RETURN INCEPTION
- --------------------------------------------------------------------------------------------
Fiduciary Shares 29.30% 27.90%+ 23.37%+ 8.66%+ 9.26%+
- --------------------------------------------------------------------------------------------
Class A Shares 29.00% 27.59%+ 23.10%+ 8.39%+ 8.99%+
- --------------------------------------------------------------------------------------------
Class A Shares with load* 21.84% 25.24%+ 21.72%+ 7.77%+ 8.77%+
- --------------------------------------------------------------------------------------------
Class C Shares 28.04% 26.74%+ 22.36%+ 7.80%+ 8.43%+
- --------------------------------------------------------------------------------------------
Class C Shares with load** 27.04% 26.74%+ 22.36%+ 7.80%+ 8.43%+
- --------------------------------------------------------------------------------------------
Class M Shares 29.48% 28.06% 23.55% 8.83% 9.44%
- --------------------------------------------------------------------------------------------
+ The performance presented links the performance of Class M Shares from
September 4, 1979 with the performance of Class A and Class C Shares on
April 3, 2006 and Fiduciary Shares on April 4, 2006. Class M Share
performance has been adjusted for the maximum sales charge/CDSC applicable
to Class A and Class C Shares, as applicable, but does not reflect the
higher Rule 12b-1 fees and expenses applicable to these Classes. With
those adjustments, performance would be lower than that shown.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 1.00%.
Past performance is not predictive of future results. Returns shown in the
graph and the table do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares. The returns for certain periods reflect fee waivers and/or
reimbursements in effect for that period; absent fee waivers and
reimbursements, performance would have been lower.
On April 3, 2006, HighMark Funds acquired the assets and assumed the
identified liabilities of Bailard International Equity Fund (see Note 9 in
notes to financial statements). The fiscal year end of Bailard
International Equity Fund, the predecessor fund to HighMark International
Opportunities Fund, was September 30. The fiscal year end of the successor
HighMark Fund is July 31. Fiduciary Shares commenced operations on April
4, 2006. Class A and Class C Shares commenced operations on April 3, 2006.
Fiduciary, Class A and Class C returns, from commencement of operations
through July 31, 2007, can be found in the financial highlights section of
this report. The return for Class M Shares, from September 30, 2005
through July 31, 2007, can be found in the financial highlights section of
this report.
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TOP TEN HOLDINGS
COMPANY* % OF
PORTFOLIO*
EXXON MOBIL 4.8%
CISCO SYSTEMS 4.7
PROCTER & GAMBLE 4.0
GENERAL ELECTRIC 4.0
MICROSOFT 3.5
AMERICAN INTERNATIONAL GROUP 3.3
PEPSICO 2.5
GOOGLE, CL A 2.2
INTEL 2.2
GILEAD SCIENCES 1.9
FUND SECTORS
% OF
SECTOR* PORTFOLIO*
INFORMATION TECHNOLOGY 23.2%
CONSUMER STAPLES 13.9
HEALTH CARE 13.2
CONSUMER DISCRETIONARY 12.0
ENERGY 11.5
INDUSTRIALS 10.4
FINANCIALS 9.0
MATERIALS 2.9
UTILITIES 2.0
REPURCHASE AGREEMENT 1.1
TELECOMMUNICATIONS 0.8
* EXCLUDES SECURITIES PURCHASED WITH CASH COLLATERAL RECEIVED FROM
SECURITIES LENDING.
LARGE CAP GROWTH FUND (UNAUDITED)
PERFORMANCE
For the year ended July 31, 2007, HighMark Large Cap Growth Fund (the
"Fund") produced a total return of 14.50% (Fiduciary Shares). In
comparison, the unmanaged S&P 500/Citigroup Growth Index returned 16.46%
over the same period.
FACTORS AFFECTING PERFORMANCE
During the fiscal year, the U.S. economy remained strong in the face of a
weak housing market and the ongoing war in Iraq. Along with healthy
productivity and relatively low inflation, job growth remained steady and
capital spending continued. For the first time in six years, the growth
sector of the market outperformed the value sector.
On December 29, 2006, the Fund brought on a new portfolio management team
led by Kenneth Wemer and George Rokas of HighMark Capital Management, Inc.
Despite the strong market environment, the Fund underperformed its
benchmark. Relative underperformance can largely be attributed to sector
weightings. The Fund primarily benefited from stock selection within the
energy and materials sectors, as well as sector selection in the
information technology sector. Exxon Mobil outperformed as international
growth fueled oil prices, as did oil services company Schlumberger, as
high oil and gas prices drove continued exploration and drilling
activities within the industry. Lastly, the Fund's modest overweighting in
the technology sector contributed positively to performance, with strong
showings from Cisco Systems and Google. Intel also excelled due to
improved personal computer demand and market share gains in its chips.
However, solid performance within these sectors was overshadowed by the
negative performance of consumer discretionary and consumer staples
sectors. In the consumer discretionary sector, Macy's experienced higher
operating expenses and slower consumer spending, primarily due to the
housing slowdown and higher oil prices. Starbucks also detracted from
performance due to slower sales and higher dairy prices.
- --------------------------------------------------------------------------------
12 1.800.433.6884
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HIGHMARK LARGE CAP GROWTH FUND INVESTMENT OBJECTIVE
HIGHMARK LARGE CAP GROWTH FUND SEEKS LONG-TERM CAPITAL APPRECIATION THROUGH
INVESTMENTS IN EQUITY SECURITIES. THE PRODUCTION OF CURRENT INCOME IS AN
INCIDENTAL OBJECTIVE.
[PHOTO OMITTED]
PORTFOLIO MANAGER
KEN WEMER
HIGHMARK CAPITAL
MANAGEMENT, INC.
[PHOTO OMITTED]
PORTFOLIO MANAGER
GEORGE ROKAS
HIGHMARK CAPITAL
MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK LARGE CAP
GROWTH FUND VERSUS THE RUSSELL 1000 GROWTH INDEX, THE S&P 500/ CITIGROUP GROWTH
INDEX AND THE MORNINGSTAR LARGE GROWTH CATEGORY.
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
HighMark Large HighMark Large HighMark Large HighMark Large Russell 1000 S&P 500/ Morningstar
Cap Growth Fund, Cap Growth Fund, Cap Growth Fund, Cap Growth Fund, Growth Citigroup Large Growth
Fiduciary Shares Class A Shares Class B Shares+ Class C Shares+ Index Growth Index Category
7/31/97 $10,000 $ 9,450 $10,000 $10,000 $10,000 $10,000 $10,000
7/98 12,259 11,554 12,206 12,259 11,992 12,264 11,826
7/99 14,372 13,508 14,191 14,372 14,875 15,420 14,728
7/00 15,972 14,977 15,635 15,886 18,501 18,954 18,722
7/01 8,671 8,113 8,407 8,551 12,015 13,527 13,203
7/02 6,523 6,097 6,275 6,375 8,561 9,449 9,443
7/03 7,248 6,738 6,899 7,019 9,557 10,603 10,507
7/04 7,498 6,964 7,080 7,203 10,370 11,584 11,227
7/05 8,635 7,999 8,075 8,214 11,724 12,717 12,894
7/06 8,814 8,144 8,176 8,316 11,635 12,640 12,849
7/07 10,092 9,295 9,282 9,429 13,900 14,720 15,164
- --------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED ANNUALIZED
ONE YEAR 3 YEAR 5 YEAR 10 YEAR SINCE
RETURN RETURN RETURN RETURN INCEPTION
- --------------------------------------------------------------------------------------------
Fiduciary Shares 14.50% 10.41% 9.12% 0.09% 5.48%
- --------------------------------------------------------------------------------------------
Class A Shares 14.14% 10.10% 8.80% -0.17% 5.29%+
- --------------------------------------------------------------------------------------------
Class A Shares with load* 7.89% 8.05% 7.56% -0.73% 4.86%+
- --------------------------------------------------------------------------------------------
Class B Shares 13.53% 9.45% 8.14% -0.74%+ 4.84%+
- --------------------------------------------------------------------------------------------
Class B Shares with load** 8.53% 8.61% 7.85% -0.74%+ 4.84%+
- --------------------------------------------------------------------------------------------
Class C Shares 13.39% 9.40% 8.14% -0.58%+ 4.96%+
- --------------------------------------------------------------------------------------------
Class C Shares with load*** 12.39% 9.40% 8.14% -0.58%+ 4.96%+
- --------------------------------------------------------------------------------------------
+ The performance presented links the performance of Fiduciary Shares from
November 18, 1993 with the performance of Class A Shares on June 20, 1994,
Class B Shares on February 2, 1998 and Class C Shares on November 30,
1999. Fiduciary Share performance has been adjusted for the maximum sales
charge/CDSC applicable to Class A, Class B and Class C Shares, as
applicable, but does not reflect the higher Rule 12b-1 fees and expenses
applicable to these Classes. With those adjustments, performance would be
lower than that shown.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 5.00%.
*** Reflects maximum CDSC of 1.00%.
Past performance is not predictive of future results. Returns shown in the
graph and the table do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares. The returns for certain periods reflect fee waivers and/or
reimbursements in effect for that period; absent fee waivers and
reimbursements, performance would have been lower.
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[MOUNTAIN RANGE GRAPHIC OMITTED]
TOP TEN HOLDINGS
% OF
COMPANY*,+ PORTFOLIO+
EXXON MOBIL 5.3%
CITIGROUP 3.5
CHEVRON 3.1
JPMORGAN CHASE 3.0
PFIZER 2.9
VERIZON COMMUNICATIONS 2.3
AT&T 2.3
WELLS FARGO 2.3
CONOCOPHILLIPS 1.9
SPRINT NEXTEL 1.8
FUND SECTORS
% OF
SECTOR+ PORTFOLIO+
FINANCIALS 31.2%
ENERGY 14.3
INDUSTRIALS 9.7
CONSUMER DISCRETIONARY 8.2
HEALTH CARE 7.5
TELECOMMUNICATIONS 6.7
CONSUMER STAPLES 6.6
UTILITIES 5.2
MATERIALS 4.1
INFORMATION TECHNOLOGY 3.8
REPURCHASE AGREEMENT 2.7
* EXCLUDES SHORT-TERM FIXED INCOME SECURITIES.
+ EXCLUDES SECURITIES PURCHASED WITH CASH COLLATERAL RECEIVED FROM
SECURITIES LENDING.
LARGE CAP VALUE FUND (UNAUDITED)
PERFORMANCE
For the year ended July 31, 2007, HighMark Large Cap Value Fund (the
"Fund") produced a total return of 12.40% (Fiduciary Shares). In
comparison, the unmanaged Russell 1000 Value Index returned 13.47% over
the same period.
FACTORS AFFECTING PERFORMANCE
During the past fiscal year, mid- and large-cap stocks generally
outperformed small-cap stocks, and the growth sector outperformed the
value sector. The materials sector (especially metals and mining, as well
as chemical companies) and the technology sector (with major support
coming from computer hardware companies) dominated the broad market.
Stocks in the financial sector underperformed the broad market, especially
those with direct or derivative exposure to mortgages, which had the worst
showing, followed by real estate stocks.
The Fund is disciplined and maintains a broadly diversified portfolio of
large-cap stocks. Using a bottom-up style of stock selection, it evaluates
companies relative to their industry peers by measuring three broad
categories: value, management and momentum. Value is defined by somewhat
traditional ratios, comparing price to fundamental value. Management
indicates that the Fund looked for evidence that a company's executive
team emphasized earning power. Momentum helped the Fund determine when
stocks would begin rising toward full valuation. As the Fund searched for
opportunities, it kept a sharp eye on minimizing transaction costs, which
helped to maximize profits in its stock-selection effort.
The Fund's tilt toward value companies in a market that favored growth
companies made it difficult to outperform its benchmark. Attention to
momentum had a minimal impact. However, companies with evidence of
positive management performance provided a dependable source of return.
The Fund's stock-picking effort was most successful in the materials
sector, with Alcan, Southern Copper and Steel Dynamics among the top
performers. However, the financial sector did not meet expectations, with
lagging positions in Countrywide Financial, PMI Group and Washington
Mutual, among others.
- --------------------------------------------------------------------------------
14 1.800.433.6884
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[MOUNTAIN RANGE GRAPHIC OMITTED]
HIGHMARK LARGE CAP VALUE FUND INVESTMENT OBJECTIVE
HIGHMARK LARGE CAP VALUE FUND SEEKS TO PROVIDE LONG-TERM CAPITAL APPRECIATION.
[PHOTO OMITTED]
PORTFOLIO MANAGER
TED ARONSON
ARONSON+JOHNSON+ORTIZ, LP
[PHOTO OMITTED]
PORTFOLIO MANAGER
KEVIN JOHNSON
ARONSON+JOHNSON+ORTIZ, LP
[PHOTO OMITTED]
PORTFOLIO MANAGER
MARTHA ORTIZ
ARONSON+JOHNSON+ORTIZ, LP
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK LARGE CAP
VALUE FUND VERSUS THE RUSSELL 1000 VALUE INDEX AND THE MORNINGSTAR LARGE VALUE
CATEGORY.
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
HighMark HighMark HighMark HighMark Morningstar
Large Cap Value Large Cap Value Large Cap Value Large Cap Value Russell 1000 Large
Fund, Fiduciary Shares Fund, Class A Shares Fund, Class B Shares+ Fund, Class C Shares+ Value Index Value Category
7/31/97 $10,000 $ 9,450 $10,000 $10,000 $10,000 $10,000
7/98 11,079 10,442 11,031 11,079 11,771 10,970
7/99 12,656 11,898 12,493 12,656 13,535 12,319
7/00 11,432 10,725 11,181 11,374 12,859 11,939
7/01 11,100 10,379 10,752 10,935 13,983 13,153
7/02 8,402 7,831 8,067 8,204 11,572 10,656
7/03 9,012 8,389 8,584 8,726 12,816 11,561
7/04 10,843 10,065 10,232 10,401 15,082 13,329
7/05 13,158 12,191 12,301 12,514 17,952 15,435
7/06 14,582 13,473 13,508 13,748 20,032 16,702
7/07 16,390 15,102 15,048 15,309 22,733 19,090
- ---------------------------------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED ANNUALIZED
ONE YEAR 3 YEAR 5 YEAR 10 YEAR SINCE
RETURN RETURN RETURN RETURN INCEPTION
- ---------------------------------------------------------------------------------------------------------------------
Fiduciary Shares 12.40% 14.76% 14.30% 5.06% 11.36%
- ---------------------------------------------------------------------------------------------------------------------
Class A Shares 12.09% 14.48% 14.03% 4.80% 11.24%+
- ---------------------------------------------------------------------------------------------------------------------
Class A Shares with load* 5.90% 12.33% 12.75% 4.21% 10.97%+
- ---------------------------------------------------------------------------------------------------------------------
Class B Shares 11.40% 13.72% 13.28% 4.17%+ 10.95%+
- ---------------------------------------------------------------------------------------------------------------------
Class B Shares with load** 6.40% 12.94% 13.04% 4.17%+ 10.95%+
- ---------------------------------------------------------------------------------------------------------------------
Class C Shares 11.36% 13.75% 13.29% 4.35%+ 11.03%+
- ---------------------------------------------------------------------------------------------------------------------
Class C Shares with load*** 10.36% 13.75% 13.29% 4.35%+ 11.03%+
- ---------------------------------------------------------------------------------------------------------------------
+ The performance presented links the performance of Fiduciary Shares from
February 9, 1984 with the performance of Class A Shares on June 20, 1994,
Class B Shares on February 2, 1998 and Class C Shares on November 30,
1999. Fiduciary Share performance has been adjusted for the maximum sales
charge/CDSC applicable to Class A, Class B and Class C Shares, as
applicable, but does not reflect the higher Rule 12b-1 fees and expenses
applicable to these Classes. With those adjustments, performance would be
lower than that shown.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 5.00%.
*** Reflects maximum CDSC of 1.00%.
Past performance is not predictive of future results. Returns shown in the
graph and the table do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares. The returns for certain periods reflect fee waivers and/or
reimbursements in effect for that period; absent fee waivers and
reimbursements, performance would have been lower.
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TOP TEN HOLDINGS
% OF
COMPANY*,+ PORTFOLIO+
BLACK BOX 1.7%
CIBER 1.5
ASPEN INSURANCE HOLDINGS 1.5
REGIS 1.5
CMGI 1.4
KINDRED HEALTHCARE 1.4
GRAFTECH INTERNATIONAL 1.4
BRIGHAM EXPLORATION 1.4
STERIS 1.3
ANIXTER INTERNATIONAL 1.3
FUND SECTORS
% OF
SECTOR+ PORTFOLIO+
INFORMATION TECHNOLOGY 20.1%
FINANCIALS 16.3
CONSUMER DISCRETIONARY 15.0
INDUSTRIALS 15.0
HEALTH CARE 11.8
ENERGY 5.1
MATERIALS 4.9
REPURCHASE AGREEMENT 4.0
CONSUMER STAPLES 3.0
TELECOMMUNICATIONS 2.6
UTILITIES 2.2
* EXCLUDES SHORT-TERM FIXED INCOME SECURITIES.
+ EXCLUDES SECURITIES PURCHASED WITH CASH COLLATERAL RECEIVED FROM
SECURITIES LENDING.
SMALL CAP ADVANTAGE FUND (UNAUDITED)
PERFORMANCE
In the five months since its inception on March 1, 2007, HighMark Small
Cap Advantage Fund (the "Fund") produced a total return of -5.85%
(Fiduciary Shares) as of July 31, 2007. In comparison, the unmanaged
Russell 2000 Index returned -1.41% over the same period.
FACTORS AFFECTING PERFORMANCE
A number of unusual market events occurred over the course of the Fund's
reporting period. First, HighMark's small cap quantitative strategy
favored undervalued stocks, and the Russell 2000 Growth Index outperformed
the Russell 2000 Value Index by approximately 7.6% during the period.
These events made it difficult for funds that employ a value-based
investment process. Second, the Fund's quantitative strategy was
negatively impacted by increasing credit concerns that triggered a
liquidity squeeze on mortgage debt (sub-prime and Alt-A) exposure,
especially during the month of July. With credit increasingly difficult to
maintain, many hedge funds began to unwind leveraged positions that were
more liquid, and higher quality long-short quantitative equity strategies
using quantitative models were liquidated in order to meet margin calls
and redemptions. This liquidation caused stocks to move in precisely the
opposite direction from what can normally be expected. These unusual
macroeconomic events negatively impacted Fund performance.
Even though the Fund maintains relative sector neutrality, certain minor
industry sector investments paid off, including the overweight in the
health care equipment and supply industry and the underweight in the
construction and engineering industry. The industry sector investments
that hurt performance included the overweight in the airline industry and
the underweight in real estate investment trusts.
GrafTech International, one of the Fund's largest holdings, contributed to
the Fund's performance, as did Western Energy, which was acquired by one
of its competitors. However, the Fund was not immune to recent weakness in
the banking sector, as W Holding was forced to write-off a large
commercial loan, detracting from the Fund's performance.
- --------------------------------------------------------------------------------
16 1.800.433.6884
- --------------------------------------------------------------------------------
[MOUNTAIN RANGE GRAPHIC OMITTED]
HIGHMARK SMALL CAP ADVANTAGE FUND INVESTMENT OBJECTIVE
HIGHMARK SMALL CAP ADVANTAGE FUND SEEKS TO PROVIDE LONG-TERM CAPITAL
APPRECIATION.
[PHOTO OMITTED]
PORTFOLIO MANAGER
DAVID GOERZ
HIGHMARK CAPITAL
MANAGEMENT, INC.
[PHOTO OMITTED]
PORTFOLIO MANAGER
RICHARD ROCKE
HIGHMARK CAPITAL
MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK SMALL CAP
ADVANTAGE FUND VERSUS THE RUSSELL 2000 INDEX AND THE MORNINGSTAR SMALL BLEND
CATEGORY.
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
HighMark Small HighMark Small HighMark Small Morningstar
Cap Advantage Fund, Cap Advantage Fund, Cap Advantage Fund, Russell 2000 Small Blend
Fiduciary Shares Class A Shares Class C Shares Index Category
3/1/07 $10,000 $9,450 $10,000 $10,000 $10,000
7/07 9,415 8,892 9,400 9,861 10,039
- -------------------------------------------------------------------------------
CUMULATIVE
SINCE
INCEPTION+
- -------------------------------------------------------------------------------
Fiduciary Shares -5.85%
- -------------------------------------------------------------------------------
Class A Shares -5.90%
- -------------------------------------------------------------------------------
Class A Shares with load* -11.06%
- -------------------------------------------------------------------------------
Class C Shares -6.00%
- -------------------------------------------------------------------------------
Class C Shares with load** -6.94%
- -------------------------------------------------------------------------------
+ Commenced operations on March 1, 2007.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 1.00%.
Past performance is not predictive of future results. Returns shown in the
graph and the table do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares. The returns for certain periods reflect fee waivers and/or
reimbursements in effect for that period; absent fee waivers and
reimbursements, performance would have been lower.
- --------------------------------------------------------------------------------
WWW.HIGHMARKFUNDS.COM 17
- --------------------------------------------------------------------------------
[HIGHMARK FUNDS LOGO OMITTED](R)
[MOUNTAIN RANGE GRAPHIC OMITTED]
TOP TEN HOLDINGS
% OF
COMPANY*,+ PORTFOLIO+
OHIO CASUALTY 1.9%
SKYWORKS SOLUTIONS 1.7
GREY WOLF 1.6
ARVINMERITOR 1.3
AO SMITH 1.3
TECHNITROL 1.3
ZENITH NATIONAL INSURANCE 1.3
WEBSTER FINANCIAL 1.2
OIL STATES INTERNATIONAL 1.2
FIRSTMERIT 1.2
FUND SECTORS
% OF
SECTOR+ PORTFOLIO+
FINANCIALS 27.7%
CONSUMER DISCRETIONARY 17.2
INDUSTRIALS 17.0
INFORMATION TECHNOLOGY 14.0
MATERIALS 7.3
ENERGY 5.4
CONSUMER STAPLES 2.8
UTILITIES 2.8
HEALTH CARE 2.6
REPURCHASE AGREEMENT 2.4
TELECOMMUNICATIONS 0.8
* EXCLUDES SHORT-TERM FIXED INCOME SECURITIES.
+ EXCLUDES SECURITIES PURCHASED WITH CASH COLLATERAL RECEIVED FROM
SECURITIES LENDING.
SMALL CAP VALUE FUND (UNAUDITED)
PERFORMANCE
For the year ended July 31, 2007, HighMark Small Cap Value Fund (the
"Fund") produced a total return of 6.83% (Fiduciary Shares). In
comparison, the unmanaged Russell 2000 Value Index returned 7.67% for the
same period.
FACTORS AFFECTING PERFORMANCE
Equity markets performed exceedingly well during the first half of the
Fund's fiscal year. Large-cap shares briefly returned to prominence after
six years of small-cap dominance. However, small-cap stocks surged in the
fourth quarter to finish 2006 up more than 18%, beating the S&P 500
Composite Index of large-cap stocks by 2.2%. Small-cap value stocks
performed even better, and the Russell 2000 Value Index rose 23.5% in 2006
- the best performing segment of the U.S. stock market.
In the first quarter of 2007, stock markets posted modest gains despite
the emergence of problems with sub-prime lending in the housing sector.
Within the small-cap segment, value stocks underperformed growth stocks by
about 1%. Stocks posted solid gains in the second quarter of 2007, with
the Russell 2000 Index of small-cap stocks rising 4.4%.
The Fund underperformed its benchmark, the Russell 2000 Value Index, for
the reporting period, as the Fund's value-investing style fell from favor
for much of the latter half of the fiscal year. The market's rotation from
value to growth, especially in telecom and consumer staples, was partially
offset by positive sector selection in other areas, such as an overweight
in the materials sector relative to the benchmark.
The financials sector was one of the poorest performing sectors of the
market during the fiscal year, due mainly to sub-prime lending problems.
However, strong stock selection contributed positively to fund
performance. Ohio Casualty and LandAmerica Financial Group were among the
biggest contributors to Fund performance, and in the industrials sector,
Navistar was also a strong contributor. Higher fuel costs contributed to
the poor results of the transportation sector, with Group 1 Automotive and
Alaska Air Group slightly detracting from Fund performance.
- --------------------------------------------------------------------------------
18 1.800.433.6884
- --------------------------------------------------------------------------------
[MOUNTAIN RANGE GRAPHIC OMITTED]
HIGHMARK SMALL CAP VALUE FUND INVESTMENT OBJECTIVE
HIGHMARK SMALL CAP VALUE FUND SEEKS TO PROVIDE LONG-TERM CAPITAL APPRECIATION.
[PHOTO OMITTED]
TEAM LEADER
JOSEF LAKONISHOK
LSV ASSET MANAGEMENT
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK SMALL CAP
VALUE FUND VERSUS THE RUSSELL 2000 VALUE INDEX AND THE MORNINGSTAR SMALL VALUE
CATEGORY.
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
HighMark HighMark HighMark HighMark Morningstar
Small Cap Value Small Cap Value Small Cap Value Small Cap Value Russell 2000 Small Value
Fund, Fiduciary Shares Fund, Class A Shares Fund, Class B Shares Fund, Class C Shares+ Value Index Category
9/17/98 $10,000 $ 9,450 $10,000 $10,000 $10,000 $10,000
7/99 12,554 11,838 12,460 12,554 11,484 12,330
7/00 14,616 13,739 14,407 14,575 12,041 12,846
7/01 14,207 13,313 13,873 14,034 14,901 16,244
7/02 14,221 13,291 13,763 13,923 14,080 15,408
7/03 17,135 15,971 16,407 16,592 16,701 17,998
7/04 20,686 19,234 19,636 19,861 20,514 22,074
7/05 26,705 24,769 25,134 25,400 25,996 27,480
7/06 26,703 24,717 24,915 25,192 27,797 28,502
7/07 28,526 26,344 26,375 26,673 29,929 31,720
- -------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED
ONE YEAR 3 YEAR 5 YEAR SINCE
RETURN(1) RETURN RETURN INCEPTION
- -------------------------------------------------------------------------------
Fiduciary Shares 6.83% 11.31% 14.94% 12.55%
- -------------------------------------------------------------------------------
Class A Shares 6.58% 11.05% 14.66% 12.25%
- -------------------------------------------------------------------------------
Class A Shares with load* 0.74% 8.98% 13.37% 11.54%
- -------------------------------------------------------------------------------
Class B Shares 5.86% 10.34% 13.89% 11.56%
- -------------------------------------------------------------------------------
Class B Shares with load** 1.21% 9.51% 13.65% 11.56%
- -------------------------------------------------------------------------------
Class C Shares 5.88% 10.33% 13.89% 11.70%+
- -------------------------------------------------------------------------------
Class C Shares with load*** 4.95% 10.33% 13.89% 11.70%+
- -------------------------------------------------------------------------------
+ The performance presented links the performance of Fiduciary Shares from
September 17, 1998 with the performance of Class C Shares on November 30,
1999. Fiduciary Shares performance has been adjusted for the CDSC
applicable to Class C Shares but does not reflect the higher Rule 12b-1
fees and expenses applicable to this Class. With these adjustments,
performance would be lower than that shown.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 5.00%.
*** Reflects maximum CDSC of 1.00%.
Past performance is not predictive of future results. Returns shown in the
graph and the table do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares. The returns for certain periods reflect fee waivers and/or
reimbursements in effect for that period; absent fee waivers and
reimbursements, performance would have been lower.
- --------------------------------------------------------------------------------
WWW.HIGHMARKFUNDS.COM 19
- --------------------------------------------------------------------------------
[HIGHMARK FUNDS LOGO OMITTED](R)
[MOUNTAIN RANGE GRAPHIC OMITTED]
TOP TEN HOLDINGS
COMPANY* % OF
PORTFOLIO*
GENERAL ELECTRIC 4.9%
VERIZON COMMUNICATIONS 3.6
EXXON MOBIL 3.3
CHEVRON 3.2
CITIGROUP 3.2
MICROSOFT 2.8
JPMORGAN CHASE 2.4
ALTRIA GROUP 2.3
BERKSHIRE HATHAWAY, CL B 2.1
NEWS, CL A 2.1
FUND SECTORS
SECTOR* % OF
PORTFOLIO*
FINANCIALS 22.5%
INFORMATION TECHNOLOGY 13.8
INDUSTRIALS 13.0
ENERGY 12.2
CONSUMER DISCRETIONARY 11.6
CONSUMER STAPLES 9.2
HEALTH CARE 6.0
MATERIALS 4.3
TELECOMMUNICATIONS 3.6
UTILITIES 2.0
REPURCHASE AGREEMENT 1.4
REGISTERED INVESTMENT COMPANY 0.4
* EXCLUDES SECURITIES PURCHASED WITH CASH COLLATERAL RECEIVED FROM
SECURITIES LENDING.
VALUE MOMENTUM FUND (UNAUDITED)
PERFORMANCE
For the year ended July 31, 2007, HighMark Value Momentum Fund (the
"Fund") produced a total return of 16.38% (Fiduciary Shares). In
comparison, the unmanaged S&P 500 Composite Index returned 16.13% for the
same period.
FACTORS AFFECTING PERFORMANCE
The beginning of the fiscal year was marked by the strong performance of
the U.S. economy, although it slowed to a moderate growth rate. Despite a
weak housing market and the ongoing war in Iraq, productivity was healthy,
inflation was relatively low, job growth remained steady and capital
spending continued. Within the equity markets, large-cap stocks edged out
small- and mid-cap stocks for the first time in years. The materials and
technology sectors were the strongest performing sectors for the fiscal
period, while finance and health care were the weakest performers.
Concerns in the sub-prime market surfaced in the second half of the
reporting period, leading to even more moderate economic growth. Despite
these concerns, the Fund outperformed the S&P 500 Composite Index during
the period. The Fund continued its barbell approach: emphasizing
inexpensive, high quality, large-cap companies at one end and emphasizing
turnaround candidates suffering temporary problems at the other.
Primary drivers of Fund performance included overweighted positions in the
materials sector and underweighted positions in the health care sector.
Housing and housing-related industries were also overweighted, which
somewhat detracted from performance.
Overall characteristics of the Fund during the period remained consistent
with its history and traditional value parameters. Dividend yield for the
weighted average stock holdings of the Fund was 2.1% versus 1.8% for the
S&P 500 Composite Index, and its price-to-earnings ratio continued to fall
below the benchmark. However, the weighted average market cap of the
portfolio was above the weighted average market cap of the S&P 500
Composite Index at the end of the period.
- --------------------------------------------------------------------------------
20 1.800.433.6884
- --------------------------------------------------------------------------------
[MOUNTAIN RANGE GRAPHIC OMITTED]
HIGHMARK VALUE MOMENTUM FUND INVESTMENT OBJECTIVE
HIGHMARK VALUE MOMENTUM FUND SEEKS LONG-TERM CAPITAL GROWTH WITH A SECONDARY
OBJECTIVE OF CURRENT INCOME.
[PHOTO OMITTED]
TEAM LEADER
RICHARD EARNEST
HIGHMARK CAPITAL MANAGEMENT, INC.
[PHOTO OMITTED]
PORTFOLIO MANAGER
KEITH STRIBLING
HIGHMARK CAPITAL MANAGEMENT, INC.
[PHOTO OMITTED]
PORTFOLIO MANAGER
TODD LOWENSTEIN
HIGHMARK CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK VALUE
MOMENTUM FUND VERSUS THE S&P 500 COMPOSITE INDEX AND THE MORNINGSTAR LARGE VALUE
CATEGORY.
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
HighMark HighMark HighMark HighMark S&P 500 Morningstar
Value Momentum Value Momentum Value Momentum Value Momentum Composite Large Value
Fund, Fiduciary Shares Fund, Class A Shares Fund, Class B Shares+ Fund, Class C Shares+ Index Category
7/31/97 $10,000 $9,450 $10,000 $10,000 $10,000 $10,000
7/98 10,922 10,297 10,873 10,922 11,929 10,970
7/99 12,351 11,614 12,166 12,351 14,339 12,319
7/00 12,903 12,105 12,592 12,826 15,625 11,939
7/01 12,832 12,008 12,405 12,638 13,386 13,153
7/02 10,258 9,576 9,836 10,010 10,223 10,656
7/03 11,283 10,509 10,721 10,912 11,311 11,561
7/04 13,054 12,123 12,286 12,507 12,801 13,329
7/05 15,268 14,141 14,245 14,496 14,600 15,435
7/06 16,691 15,422 15,436 15,705 15,385 16,702
7/07 19,425 17,902 17,810 18,124 17,867 19,090
- ------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED ANNUALIZED
ONE YEAR 3 YEAR 5 YEAR 10 YEAR SINCE
RETURN RETURN RETURN RETURN INCEPTION
- ------------------------------------------------------------------------------------------
Fiduciary Shares 16.38% 14.17% 13.62% 6.87% 11.69%
- ------------------------------------------------------------------------------------------
Class A Shares 16.08% 13.87% 13.33% 6.60% 11.49%+
- ------------------------------------------------------------------------------------------
Class A Shares with load* 9.70% 11.75% 12.05% 6.00% 11.11%+
- ------------------------------------------------------------------------------------------
Class B Shares 15.38% 13.18% 12.61% 5.94%+ 11.10%+
- ------------------------------------------------------------------------------------------
Class B Shares with load** 10.38% 12.39% 12.36% 5.94%+ 11.10%+
- ------------------------------------------------------------------------------------------
Class C Shares 15.40% 13.16% 12.60% 6.13%+ 11.22%+
- ------------------------------------------------------------------------------------------
Class C Shares with load*** 14.40% 13.16% 12.60% 6.13%+ 11.22%+
- ------------------------------------------------------------------------------------------
+ The performance presented links the performance of Fiduciary Shares from
February 1, 1991 with the performance of Class A Shares on April 2, 1992,
Class B Shares on February 2, 1998 and Class C Shares on November 30,
1999. Fiduciary Share performance has been adjusted for the maximum sales
charge/CDSC applicable to Class A, Class B and Class C Shares, as
applicable, but does not reflect the higher Rule 12b-1 fees and expenses
applicable to these Classes. With those adjustments, performance would be
lower than that shown.
* Reflects 5.50% front-end sales charge.
** Reflects maximum CDSC of 5.00%.
*** Reflects maximum CDSC of 1.00%.
Past performance is not predictive of future results. Returns shown in the
graph and the table do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares. The returns for certain periods reflect fee waivers and/or
reimbursements in effect for that period; absent fee waivers and
reimbursements, performance would have been lower. Performance presented
from February 1, 1991 (commencement of operations of Fiduciary Shares) and
April 2, 1992, (commencement of operations of Class A Shares) to April 25,
1997 reflects the performance of the Stepstone Value Momentum Fund.
- --------------------------------------------------------------------------------
WWW.HIGHMARKFUNDS.COM 21
- --------------------------------------------------------------------------------
[HIGHMARK FUNDS LOGO OMITTED](R)
[MOUNTAIN RANGE GRAPHIC OMITTED]
FUND SECTORS
SECTOR % OF
PORTFOLIO
AFFILIATED EQUITY REGISTERED
INVESTMENT COMPANIES 86.9%
AFFILIATED FIXED INCOME REGISTERED INVESTMENT
COMPANIES 9.0
REGISTERED INVESTMENT COMPANY 2.1
REPURCHASE AGREEMENT 2.0
CAPITAL GROWTH ALLOCATION FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ending July 31, 2007, HighMark Capital Growth
Allocation Fund (the "Fund") returned 14.19% (Class A Shares without
load). In comparison, the Fund's unmanaged benchmark, an 80/15/5% blend of
the S&P 500 Composite Index, the Lehman Brothers U.S. Aggregate Bond Index
and the Citigroup Bond 3-Month Treasury Bill Index, respectively, returned
13.98% over the same period.
FACTORS AFFECTING PERFORMANCE
The first six months of the fiscal period were marked by the strong
performance of the U.S. economy. Despite many concerns, from a weak
housing market to higher oil prices and the ongoing war in Iraq,
productivity remained healthy, inflation was relatively low, job growth
remained steady and robust capital spending continued. Strong export
growth and modest weakness in the U.S. dollar bolstered earnings of U.S.
companies and boosted international equity returns. The U.S. Federal
Reserve made no adjustments to its target policy, interest rate over the
period, although the committee remains vigilant monitoring for possible
building inflation pressures.
Despite wide fluctuations in monthly data, Treasury 10-year bond yields
held steady for much of the fiscal year, ending the first half at 4.8% and
the second half at 4.7%. The basic materials sector led the equity market
higher throughout the entire period. Consumer discretionary and
information technology sectors performed well during the first six months,
while the energy and industrials sectors performed well in the last six
months. The health care sector consistently underperformed throughout the
entire period.
International stocks performed well, especially emerging market equities.
As a result, the Fund outperformed its benchmark for the fiscal year.
Asset allocation shifts added value as stocks outperformed bonds, and
tilts toward growth equities and an overweight in emerging markets also
contributed to performance. Volatility in the Fund was attributed to the
Chinese stock market correction early in 2007, which hit both
international and domestic markets, and credit market-and mortgage-related
concerns that recently impacted domestic fixed income and global equity
markets.
An overweight in the International Opportunities Fund within emerging
markets added value to the Fund over the period but was also a source of
some correction in mid-spring. The underlying funds that contributed the
greatest value were the Core Equity Fund during the first six months and
the International Opportunities Fund during the latter six months. The
Large Cap Growth Fund was the largest detractor from Fund performance
during the first six months, while the Core Equity Fund was the most
significant detractor in the latter half of the reporting period. The
Fund's fixed income strategies also added value with their higher quality
bias.
The Fund remained overweight to equities and underweight to bonds and held
short durations within its fixed income holdings. Within equities, the
Fund further increased its tactical exposure to international markets and
growth equities but remained neutral with respect to size and market
capitalization.
- --------------------------------------------------------------------------------
22 1.800.433.6884
- --------------------------------------------------------------------------------
[MOUNTAIN RANGE GRAPHIC OMITTED]
HIGHMARK CAPITAL GROWTH ALLOCATION FUND INVESTMENT OBJECTIVE
HIGHMARK CAPITAL GROWTH ALLOCATION FUND PRIMARILY SEEKS CAPITAL APPRECIATION.
[PHOTO OMITTED]
PORTFOLIO MANAGER
DAVID GOERZ
HIGHMARK CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK CAPITAL
GROWTH ALLOCATION FUND VERSUS THE S&P 500 COMPOSITE INDEX, THE LEHMAN BROTHERS
U.S. AGGREGATE BOND INDEX, THE CITIGROUP BOND 3-MONTH TREASURY BILL INDEX, AN
UNMANAGED BLENDED INDEX OF 80% S&P 500 COMPOSITE INDEX, 15% LEHMAN BROTHERS U.S.
AGGREGATE BOND INDEX AND 5% CITIGROUP BOND 3-MONTH TREASURY BILL INDEX AND THE
MORNINGSTAR LARGE BLEND CATEGORY.
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
HighMark Capital HighMark Capital HighMark Capital 80/15/5 Hybrid S&P 500 Lehman Brothers
Growth Allocation Growth Allocation Growth Allocation of the following Composite U.S. Aggregate
Fund, Fiduciary Shares++ Fund, Class A Shares Fund, Class C Shares three Indexes: Index Bond Index
10/12/04 $10,000 $ 9,450 $10,000 $10,000 $10,000 $10,000
7/05 11,122 10,511 11,059 10,972 11,159 10,226
7/06 11,715 11,071 11,563 11,494 11,759 10,375
7/07 13,399 12,642 13,111 13,101 13,656 10,952
Citigroup Bond Morningstar
3-Month Treasury Large
Bill Index Blend Category
10/12/04 $10,000 $10,000
7/05 10,192 11,268
7/06 10,613 11,827
7/07 11,150 13,697
- --------------------------------------------------------------------------------
ANNUALIZED
ONE YEAR SINCE
RETURN INCEPTION+
- --------------------------------------------------------------------------------
Fiduciary Shares 14.37%++ 11.01%++
- --------------------------------------------------------------------------------
Class A Shares 14.19% 10.94%
- --------------------------------------------------------------------------------
Class A Shares with load* 7.90% 8.73%
- --------------------------------------------------------------------------------
Class C Shares 13.39% 10.15%
- --------------------------------------------------------------------------------
Class C Shares with load** 12.39% 10.15%
- --------------------------------------------------------------------------------
+ Commenced operations on October 12, 2004.
++ Fiduciary Shares commenced operations on November 15, 2006. The
performance presented links the performance of Class A Shares from October
12, 2004 with performance of Fiduciary Shares on November 15, 2006. Class
A Share performance has been adjusted by removing the sales charge
applicable to Class A Shares because Class A Shares bear a sales charge
while Fiduciary Shares do not bear a sales charge, but the performance
otherwise has not been adjusted to reflect the fees and expenses
applicable to Fiduciary Shares. With those adjustments, performance would
be higher than that shown.
* Reflects 5.50% sales charge.
** Reflects maximum CDSC of 1.00%.
Past performance is not predictive of future results. Returns shown in the
graph and the table do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares. The returns for certain periods reflect fee waivers and/or
reimbursements in effect for that period; absent fee waivers and
reimbursements, performance would have been lower.
- --------------------------------------------------------------------------------
WWW.HIGHMARKFUNDS.COM 23
- --------------------------------------------------------------------------------
[HIGHMARK FUNDS LOGO OMITTED](R)
[MOUNTAIN RANGE GRAPHIC OMITTED]
FUND SECTORS
SECTOR % OF
PORTFOLIO
AFFILIATED EQUITY REGISTERED
INVESTMENT COMPANIES 97.7%
REGISTERED INVESTMENT COMPANY 2.3
DIVERSIFIED EQUITY ALLOCATION FUND (UNAUDITED)
PERFORMANCE
For the nine-month period ending July 31, 2007 (the Fund commenced
operations on November 15, 2006), HighMark Diversified Equity Allocation
Fund (the "Fund") produced a total return of 5.93% (Class A Shares without
load). In comparison, the unmanaged S&P 500 Composite Index returned 5.55%
over the same period.
FACTORS AFFECTING PERFORMANCE
Since the Fund's inception, the fiscal period was marked by the strong
performance of the U.S. economy. Despite many concerns, from a weak
housing market to higher oil prices and the ongoing war in Iraq,
productivity remained healthy, inflation was relatively low, job growth
remained steady and robust capital spending continued. Strong export
growth and modest weakness in the U.S. dollar bolstered earnings of U.S.
companies and boosted international equity returns. The U.S. Federal
Reserve made no adjustments to its target policy, interest rate over the
period, although the committee remains vigilant monitoring for possible
building inflation pressures.
Stocks modestly outperformed bonds, and despite wide fluctuations in
monthly data, Treasury 10-year bond yields held steady for much of the
period. The basic materials sector led the equity market higher during the
period, while the health care sector consistently underperformed for the
reporting period.
International stocks also performed well, and especially emerging market
equities. As a result, the Fund outperformed its benchmark since its date
of inception. The Fund's asset allocation shifts added value with tilts
toward growth equities and emerging markets, but small-cap exposure
detracted from the Fund's performance. Volatility in the Fund can be
attributed to the Chinese stock market correction in February, which hit
both international and domestic markets, as well as recent credit market-
and mortgage-related concerns that have impacted domestic fixed income and
global equity markets.
The underlying fund that contributed the most value during the period was
the International Opportunities Fund, while the Core Equity Fund detracted
most from performance. The Fund's tactical asset allocation tilts
contributed positively to performance, but specific security selection
within the underlying funds' investments detracted from performance.
The Fund increased its tactical exposure to international markets and
growth equities but remained neutral with respect to size and market
capitalization.
- --------------------------------------------------------------------------------
24 1.800.433.6884
- --------------------------------------------------------------------------------
[MOUNTAIN RANGE GRAPHIC OMITTED]
HIGHMARK DIVERSIFIED EQUITY ALLOCATION
FUND INVESTMENT OBJECTIVE
HIGHMARK DIVERSIFIED EQUITY ALLOCATION FUND SEEKS CAPITAL APPRECIATION.
[PHOTO OMITTED]
PORTFOLIO MANAGER
DAVID GOERZ
HIGHMARK CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK
DIVERSIFIED EQUITY ALLOCATION FUND VERSUS THE S&P 500 COMPOSITE INDEX AND THE
MORNINGSTAR LARGE GROWTH CATEGORY.
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
HighMark Diversified HighMark Diversified HighMark Diversified S&P 500 Morningstar
Equity Allocation Equity Allocation Equity Allocation Composite Large Growth
Fund, Fiduciary Shares Fund, Class A Shares Fund, Class C Shares Index Category
11/15/06 $10,000 $ 9,450 $10,000 $10,000 $10,000
7/07 10,609 10,010 10,545 10,549 10,887
- --------------------------------------------------------------------------------
CUMULATIVE
SINCE
INCEPTION+
- --------------------------------------------------------------------------------
Fiduciary Shares 6.10%
- --------------------------------------------------------------------------------
Class A Shares 5.93%
- --------------------------------------------------------------------------------
Class A Shares with load* 0.12%
- --------------------------------------------------------------------------------
Class C Shares 5.45%
- --------------------------------------------------------------------------------
Class C Shares with load** 4.45%
- --------------------------------------------------------------------------------
+ Commenced operations on November 15, 2006.
* Reflects 5.50% sales charge.
** Reflects maximum CDSC of 1.00%.
Past performance is not predictive of future results. Returns shown in the
graph and the table do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares. The returns for certain periods reflect fee waivers and/or
reimbursements in effect for that period; absent fee waivers and
reimbursements, performance would have been lower.
- --------------------------------------------------------------------------------
WWW.HIGHMARKFUNDS.COM 25
- --------------------------------------------------------------------------------
[HIGHMARK FUNDS LOGO OMITTED](R)
[MOUNTAIN RANGE GRAPHIC OMITTED]
FUND SECTORS
SECTOR % OF
PORTFOLIO
AFFILIATED EQUITY REGISTERED
INVESTMENT COMPANIES 67.5%
AFFILIATED FIXED INCOME
REGISTERED INVESTMENT COMPANIES 27.5
REPURCHASE AGREEMENT 3.3
REGISTERED INVESTMENT COMPANY 1.7
GROWTH & INCOME ALLOCATION FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ending July 31, 2007, Growth & Income Allocation Fund
(the "Fund") returned 12.10% (Class A Shares without load). In comparison,
the Fund's unmanaged benchmark, a 60/35/5% blend of the S&P 500 Composite
Index, the Lehman Brothers U.S. Aggregate Bond Index and the Citigroup
Bond 3-Month Treasury Bill Index, respectively, returned 11.86% over the
same period.
FACTORS AFFECTING PERFORMANCE
The first six months of the fiscal period were marked by the strong
performance of the U.S. economy. Despite many concerns, from a weak
housing market to higher oil prices and the ongoing war in Iraq,
productivity remained healthy, inflation was relatively low, job growth
remained steady and robust capital spending continued. Strong export
growth and modest weakness in the U.S. dollar bolstered earnings of U.S.
companies and boosted international equity returns. The U.S. Federal
Reserve made no adjustments to its target policy, interest rate over the
period, although the committee remains vigilant monitoring for possible
building inflation pressures.
Despite wide fluctuations in monthly data, Treasury 10-year bond yields
held steady for much of the fiscal year, ending the first half at 4.8% and
the second half at 4.7%. The basic materials sector led the equity market
higher throughout the entire period. The consumer discretionary and
information technology sectors also performed well during the first six
months, while the energy and industrials sectors performed well in the
latter six months. The health care sector consistently underperformed
throughout the reporting period.
International stocks performed well, especially emerging market equities.
As a result, the Fund outperformed its benchmark for the fiscal year.
Asset allocation shifts added value as stocks outperformed bonds, and
tilts toward growth equities and an overweight in emerging markets also
contributed to performance. Volatility in the Fund was attributed to the
Chinese stock market correction in early 2007, which hit both
international and domestic markets, as well as recent credit market- and
mortgage-related concerns that impacted domestic fixed income and global
equity markets.
An overweight in the International Opportunities Fund within emerging
markets added value to the Fund over the period but was also a source of
some correction in mid-spring. The underlying funds that contributed the
greatest value were the Core Equity Fund during the first six months, and
the International Opportunities during the latter half of the year. The
Large Cap Growth Fund was the largest detractor from Fund performance in
the first six months, while Core Equity detracted the most during the
latter half of the reporting period. The Fund's fixed income strategies
also added value with their higher quality bias.
The Fund remained overweight to equities and underweight to bonds and held
short durations within its fixed income holdings. Within equities, the
Fund further increased its tactical exposure to international markets and
growth equities, but remained neutral with respect to size and market
capitalization.
- --------------------------------------------------------------------------------
26 1.800.433.6884
- --------------------------------------------------------------------------------
[MOUNTAIN RANGE GRAPHIC OMITTED]
HIGHMARK GROWTH & INCOME ALLOCATION FUND INVESTMENT OBJECTIVE
HIGHMARK GROWTH & INCOME ALLOCATION FUND SEEKS CAPITAL APPRECIATION AND INCOME.
[PHOTO OMITTED]
PORTFOLIO MANAGER
DAVID GOERZ
HIGHMARK CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK GROWTH &
INCOME ALLOCATION FUND VERSUS THE S&P 500 COMPOSITE INDEX, THE LEHMAN BROTHERS
U.S. AGGREGATE BOND INDEX, THE CITIGROUP BOND 3-MONTH TREASURY BILL INDEX, AN
UNMANAGED BLENDED INDEX OF 60% S&P 500 COMPOSITE INDEX, 35% LEHMAN BROTHERS U.S.
AGGREGATE BOND INDEX AND 5% CITIGROUP BOND 3-MONTH TREASURY BILL INDEX AND THE
MORNINGSTAR MODERATE ALLOCATION CATEGORY.
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
HighMark Growth & HighMark Growth & HighMark Growth & 60/35/5 Hybrid S&P 500
Income Allocation Income Allocation Income Allocation of the Composite
Fund, Fiduciary Shares++ Fund, Class A Shares Fund, Class C Shares following three Indexes: Index
10/12/04 $10,000 $ 9,450 $10,000 $10,000 $10,000
7/05 10,885 10,286 10,820 10,786 11,159
7/06 11,365 10,740 11,219 11,216 11,759
7/07 12,765 12,040 12,485 12,546 13,656
Lehman Brothers Citigroup Bond Morningstar
U.S. Aggregate 3-Month Moderate Allocation
Bond Index Treasury Bill Index Category
10/12/04 $10,000 $10,000 $10,000
7/05 10,226 10,192 10,992
7/06 10,375 10,613 11,534
7/07 10,952 11,150 12,952
- --------------------------------------------------------------------------------
ANNUALIZED
ONE YEAR SINCE
RETURN INCEPTION+
- --------------------------------------------------------------------------------
Fiduciary Shares 12.32%++ 9.10%++
- --------------------------------------------------------------------------------
Class A Shares 12.10% 9.03%
- --------------------------------------------------------------------------------
Class A Shares with load* 5.91% 6.85%
- --------------------------------------------------------------------------------
Class C Shares 11.29% 8.25%
- --------------------------------------------------------------------------------
Class C Shares with load** 10.29% 8.25%
- --------------------------------------------------------------------------------
+ Commenced operations on October 12, 2004.
++ Fiduciary Shares commenced operations on November 15, 2006. The
performance presented links the performance of Class A Shares from October
12, 2004 with performance of Fiduciary Shares on November 15, 2006. Class
A Share perfomance has been adjusted by removing the sales charge
applicable to Class A Shares because Class A Shares bear a sales charge
while Fiduciary Shares do not bear a sales charge, but the performance
otherwise has not been adjusted to reflect the fees and expenses
applicable to Fiduciary Shares. With those adjustments, performance would
be higher than that shown.
* Reflects 5.50% sales charge.
** Reflects maximum CDSC of 1.00%.
Past performance is not predictive of future results. Returns shown in the
graph and the table do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares. The returns for certain periods reflect fee waivers and/or
reimbursements in effect for that period; absent fee waivers and
reimbursements, performance would have been lower.
- --------------------------------------------------------------------------------
WWW.HIGHMARKFUNDS.COM 27
- --------------------------------------------------------------------------------
[HIGHMARK FUNDS LOGO OMITTED](R)
[MOUNTAIN RANGE GRAPHIC OMITTED]
FUND SECTORS
SECTOR % OF
PORTFOLIO
AFFILIATED FIXED INCOME
REGISTERED INVESTMENT
COMPANIES 56.1%
AFFILIATED EQUITY REGISTERED
INVESTMENT COMPANIES 38.1
REPURCHASE AGREEMENT 4.9
REGISTERED INVESTMENT COMPANY 0.9
INCOME PLUS ALLOCATION FUND (UNAUDITED)
PERFORMANCE
For the fiscal year ending July 31, 2007, HighMark Income Plus Allocation
Fund (the "Fund") returned 8.40% (Class A Shares without load). In
comparison, the Fund's unmanaged benchmark, a 30/65/5% blend of the S&P
500 Composite Index, the Lehman Brothers U.S. Aggregate Bond Index and the
Citigroup Bond 3-Month Treasury Bill Index, respectively, returned 8.70%
over the same period.
FACTORS AFFECTING PERFORMANCE
The first six months of the fiscal period were marked by the strong
performance of the U.S. economy. Despite many concerns, from a weak
housing market to higher oil prices and the ongoing war in Iraq,
productivity remained healthy, inflation was relatively low, job growth
remained steady and robust capital spending continued. Strong export
growth and modest weakness in the U.S. dollar bolstered earnings of U.S.
companies and boosted international equity returns. The U.S. Federal
Reserve made no adjustments to its target policy, interest rate over the
period, although the committee remains vigilant monitoring for possible
building inflation pressures.
Despite wide fluctuations in monthly data, Treasury 10-year bond yields
held steady for much of the fiscal year, ending the first half at 4.8% and
the second half at 4.7%. The basic materials sector led the equity market
higher throughout the entire period. The consumer discretionary and
information technology sectors performed well during the first six months,
while the energy and industrials sectors performed well in the last six
months. The health care sector consistently underperformed throughout the
period.
International stocks also performed well, especially emerging market
equities. Despite this fact, the Fund slightly underperformed its
benchmarks for the fiscal year. Volatility in the Fund was attributed to
the Chinese stock market correction in early 2007, which hit both
international and domestic markets, as well as recent credit market- and
mortgage-related concerns.
An overweight in the International Opportunities Fund within emerging
markets added value to the Fund over the period but was also a source of
some correction in mid-spring. The underlying funds that contributed the
greatest value were the Core Equity Fund during the first half of the year
and the International Opportunities Fund during the last six months of the
year. The Large Cap Growth Fund detracted most from Fund performance
during the first six months, while the Core Equity Fund detracted most in
the latter half of the reporting period.
In the first six months of the fiscal year, the Fund was overweight in
bonds and short durations within its fixed income holdings and underweight
in equities. In the last six months of the fiscal year, the Fund was
overweight in equities and underweight in bonds.
- --------------------------------------------------------------------------------
28 1.800.433.6884
- --------------------------------------------------------------------------------
[MOUNTAIN RANGE GRAPHIC OMITTED]
HIGHMARK INCOME PLUS ALLOCATION FUND INVESTMENT OBJECTIVE
HIGHMARK INCOME PLUS ALLOCATION FUND PRIMARILY SEEKS INCOME AND SECONDARILY
SEEKS CAPITAL APPRECIATION.
[PHOTO OMITTED]
PORTFOLIO MANAGER
DAVID GOERZ
HIGHMARK CAPITAL
MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK INCOME
PLUS ALLOCATION FUND VERSUS THE S&P 500 COMPOSITE INDEX, THE LEHMAN BROTHERS
U.S. AGGREGATE BOND INDEX, THE CITIGROUP BOND 3-MONTH TREASURY BILL INDEX, AN
UNMANAGED BLENDED INDEX OF 30% S&P 500 COMPOSITE INDEX, 65% LEHMAN BROTHERS U.S.
AGGREGATE BOND INDEX AND 5% CITIGROUP BOND 3-MONTH TREASURY BILL INDEX AND THE
MORNINGSTAR CONSERVATIVE ALLOCATION CATEGORY.
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
HighMark Income HighMark Income HighMark Income 30/65/5 Hybrid S&P 500 Lehman Brothers
Plus Allocation Fund, Plus Allocation Fund, Plus Allocation Fund, of the following Composite U.S. Aggregate
Fiduciary Shares++ Class A Shares Class C Shares three Indexes: Index Bond Index
10/12/04 $10,000 $ 9,550 $10,000 $10,000 $10,000 $10,000
7/05 10,470 9,999 10,411 10,507 11,159 10,226
7/06 10,796 10,310 10,660 10,801 11,759 10,375
7/07 11,719 11,176 11,473 11,739 13,656 10,952
Citigroup Bond Morningstar
3-Month Treasury Conservative
Bill Index Allocation Category
10/12/04 $10,000 $10,000
7/05 10,192 10,581
7/06 10,613 10,954
7/07 11,150 11,830
- --------------------------------------------------------------------------------
ANNUALIZED
ONE YEAR SINCE
RETURN INCEPTION+
- --------------------------------------------------------------------------------
Fiduciary Shares 8.55%++ 5.83%++
- --------------------------------------------------------------------------------
Class A Shares 8.40% 5.77%
- --------------------------------------------------------------------------------
Class A Shares with load* 3.51% 4.05%
- --------------------------------------------------------------------------------
Class C Shares 7.63% 5.03%
- --------------------------------------------------------------------------------
Class C Shares with load** 6.63% 5.03%
- --------------------------------------------------------------------------------
+ Commenced operations on October 12, 2004.
++ Fiduciary Shares commenced operations on November 15, 2006. The
performance presented links the performance of Class A Shares from October
12, 2004 with performance of Fiduciary Shares on November 15, 2006. Class
A Share perfomance has been adjusted by removing the sales charge
applicable to Class A Shares because Class A Shares bear a sales charge
while Fiduciary Shares do not bear a sales charge, but the performance
otherwise has not been adjusted to reflect the fees and expenses
applicable to Fiduciary Shares. With those adjustments, performance would
be higher than that shown.
* Reflects 4.50% sales charge.
** Reflects maximum CDSC of 1.00%.
Past performance is not predictive of future results. Returns shown in the
graph and the table do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares. The returns for certain periods reflect fee waivers and/or
reimbursements in effect for that period; absent fee waivers and
reimbursements, performance would have been lower.
- --------------------------------------------------------------------------------
WWW.HIGHMARKFUNDS.COM 29
- --------------------------------------------------------------------------------
[HIGHMARK FUNDS LOGO OMITTED](R)
[MOUNTAIN RANGE GRAPHIC OMITTED]
TOP TEN HOLDINGS
HOLDING* % OF
PORTFOLIO*
FNMA
4.500%, 04/01/18 5.6%
U.S. TREASURY INFLATION
INDEX NOTE
3.000%, 07/15/12 5.2
U.S. TREASURY BOND
7.250%, 05/15/16 4.9
CITIBANK CREDIT CARD
MASTER TRUST,
SER 1999-2, CL A
5.875%, 03/10/11 2.9
FNMA
5.500%, 04/01/36 2.6
FHLMC GOLD
4.000%, 06/01/19 2.5
FHLMC GOLD
5.500%, 08/01/21 2.2
FNMA
5.500%, 11/01/33 2.1
FNMA
5.000%, 03/01/34 2.0
FNMA
4.500%, 07/01/20 1.9
FUND SECTORS
SECTOR* % OF
PORTFOLIO*
U.S. GOVERNMENT AGENCY OBLIGATIONS 43.5%
U.S. TREASURY OBLIGATIONS 12.1
FINANCIALS 10.2
ASSET-BACKED SECURITIES 10.1
CONSUMER DISCRETIONARY 5.8
UTILITIES 3.5
HEALTH CARE 2.4
TELECOMMUNICATION 2.2
ENERGY 2.1
FOREIGN GOVERNMENTS 2.1
INDUSTRIALS 1.9
INFORMATION TECHNOLOGY 1.9
REPURCHASE AGREEMENT 1.5
CONSUMER STAPLES 0.7
* EXCLUDES SECURITIES PURCHASED WITH CASH COLLATERAL RECEIVED FROM
SECURITIES LENDING.
BOND FUND (UNAUDITED)
PERFORMANCE
For the year ended July 31, 2007, HighMark Bond Fund (the "Fund") produced
a total return of 5.40% (Fiduciary Shares). In comparison, the unmanaged
Lehman Brothers U.S. Aggregate Bond Index returned 5.56% for the same
period.
FACTORS AFFECTING PERFORMANCE
During the past fiscal year, the bond market expected anywhere from one to
three cuts in the federal funds rate by the end of 2007. In fact, in each
of the last three years, the market continually under-estimated the level
of the federal funds rate, expecting the housing market, the trade
deficit, overextended consumers or some other disaster to cause a severe
economic slowdown or even recession. Meanwhile, the Federal Reserve was
consistent, both in its public comments and in the published minutes of
its meetings, stating that its predominant policy concern was the risk
that inflation would "fail to moderate as expected," meaning it had no
intention of lowering interest rates anytime soon. Slow GDP growth in the
first quarter of 2007 seemed to validate the slowdown scenario. After
briefly resuming a healthy pace in the second quarter of 2007, sub-prime
market concerns caused a flight to quality among investors, and steep
declines in both corporate bonds and mortgaged-backed securities also
occurred at the end of the Fund's fiscal period.
As a result, the Fund's performance lagged slightly behind its benchmark,
the Lehman Brothers U.S. Aggregate Bond Index, for the reporting period.
The Fund benefited from its lower interest rate risk (shorter duration),
but the relatively high corporate bond weighting had a negative influence
on Fund performance.
As of July 31, 2007, the Fund's average credit quality was AA+, compared
to AAA for the Fund's benchmark. The Fund's average weighted maturity was
6.3 years and the average duration was 4.4 years, compared to 7.1 years
and 4.8 years, respectively, for the Fund's benchmark.
- --------------------------------------------------------------------------------
30 1.800.433.6884
- --------------------------------------------------------------------------------
[MOUNTAIN RANGE GRAPHIC OMITTED]
HIGHMARK BOND FUND INVESTMENT OBJECTIVE
HIGHMARK BOND FUND SEEKS TOTAL RETURN THROUGH INVESTMENTS IN FIXED-INCOME
SECURITIES.
[PHOTO OMITTED]
TEAM LEADER
JACK MONTGOMERY
HIGHMARK CAPITAL
MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK BOND FUND
VERSUS THE LEHMAN BROTHERS U.S. AGGREGATE BOND INDEX AND THE MORNINGSTAR
INTERMEDIATE-TERM BOND CATEGORY.
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
HighMark HighMark HighMark HighMark Lehman Brothers Morningstar
Bond Fund, Bond Fund, Bond Fund, Bond Fund, U.S. Aggregate Intermediate-Term
Fiduciary Shares Class A Shares Class B Shares+ Class C Shares+ Bond Index Bond Category
7/31/97 $10,000 $ 9,775 $10,000 $10,000 $10,000 $10,000
7/98 10,741 10,505 10,741 10,741 10,787 10,692
7/99 10,913 10,665 10,913 10,913 11,056 10,838
7/00 11,443 11,187 11,443 11,443 11,716 11,327
7/01 12,900 12,614 12,813 12,900 13,202 12,668
7/02 13,428 13,122 13,201 13,428 14,196 13,279
7/03 14,302 13,952 13,926 14,302 14,966 14,077
7/04 14,971 14,575 14,443 14,907 15,690 14,712
7/05 15,622 15,180 14,922 15,445 16,442 15,353
7/06 15,791 15,294 14,931 15,505 16,682 15,522
7/07 16,644 16,075 15,593 16,220 17,609 16,280
- -----------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED ANNUALIZED
ONE YEAR 3 YEAR 5 YEAR 10 YEAR SINCE
RETURN RETURN RETURN RETURN INCEPTION
- -----------------------------------------------------------------------------------------------
Fiduciary Shares 5.40% 3.59% 4.39% 5.23% 7.65%
- -----------------------------------------------------------------------------------------------
Class A Shares 5.11% 3.32% 4.14% 5.10% 7.57%+
- -----------------------------------------------------------------------------------------------
Class A Shares with load* 2.70% 2.53% 3.68% 4.87% 7.47%+
- -----------------------------------------------------------------------------------------------
Class B Shares 4.43% 2.59% 3.39% 4.54%+ 7.35%+
- -----------------------------------------------------------------------------------------------
Class B Shares with load** -0.57% 1.67% 3.05% 4.54%+ 7.35%+
- -----------------------------------------------------------------------------------------------
Class C Shares 4.61% 2.85% 3.85%+ 4.95%+ 7.53%+
- -----------------------------------------------------------------------------------------------
Class C Shares with load*** 3.61% 2.85% 3.85%+ 4.95%+ 7.53%+
- -----------------------------------------------------------------------------------------------
+ The performance presented links the performance of Fiduciary Shares from
February 15, 1984 with the performance of Class A Shares on June 20, 1994,
Class B Shares on November 30, 2000 and Class C Shares on November 28,
2003. Fiduciary Share performance has been adjusted for the maximum sales
charge/CDSC applicable to Class A, Class B and Class C Shares, as
applicable, but does not reflect the higher Rule 12b-1 fees and expenses
applicable to these Classes. With those adjustments, performance would be
lower than that shown.
* Reflects 2.25% sales charge. Prior to December 1, 2005, the sales charge
was 3.25%.
** Reflects maximum CDSC of 5.00%.
*** Reflects maximum CDSC of 1.00%.
Past performance is not predictive of future results. Returns shown in the
graph and the table do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares. The returns for certain periods reflect fee waivers and/or
reimbursements in effect for that period; absent fee waivers and
reimbursements, performance would have been lower.
- --------------------------------------------------------------------------------
WWW.HIGHMARKFUNDS.COM 31
- --------------------------------------------------------------------------------
[HIGHMARK FUNDS LOGO OMITTED](R)
[MOUNTAIN RANGE GRAPHIC OMITTED]
TOP TEN HOLDINGS
HOLDING % OF
PORTFOLIO
LOS ANGELES, DEPARTMENT OF
WATER & POWER, SER A-A-1,
RB, MBIA INSURED
5.250%, 07/01/11 3.0%
M-S-R PUBLIC POWER AUTHORITY,
SAN JUAN PROJECT, SER I,
RB, MBIA INSURED
CALLABLE 07/01/11 @ 100
5.000%, 07/01/14 2.1
EASTERN MUNICIPAL WATER DISTRICT,
SER A, COP, FGIC INSURED
CALLABLE 07/01/11 @ 100
5.375%, 07/01/17 2.1
METROPOLITAN, WATER DISTRICT OF
SOUTHERN CALIFORNIA, SER A, RB
CALLABLE 07/01/11 @ 101
5.375%, 07/01/12 1.9
SAN MATEO, UNIFIED HIGH SCHOOL
DISTRICT, SER A, GO, FGIC INSURED
PREREFUNDED @ 100
5.375%, 09/01/11 1.9
EASTERN MUNICIPAL WATER DISTRICT,
SER A, COP, FGIC INSURED
CALLABLE 07/01/11 @ 100
5.375%, 07/01/16 1.8
CONTRA COSTA COUNTY, MERRITHEW
MEMORIAL HOSPITAL PROJECT,
COP, MBIA INSURED
PREREFUNDED @ 102
5.500%, 11/01/07 1.8
SAN MATEO COUNTY, TRANSIT DISTRICT,
SER A, RB, MBIA INSURED
5.250%, 06/01/16 1.8
LOS ANGELES, DEPARTMENT OF
WATER & POWER, SER A-A-1,
RB, MBIA INSURED
CALLABLE 07/01/11 @ 100
5.250%, 07/01/13 1.8
CALIFORNIA STATE, DEPARTMENT OF
TRANSPORTATION, FEDERAL HIGHWAY
GRANT ANTICIPATION BONDS,
SER A, RB, FGIC INSURED
5.000%, 02/01/14 1.7
FUND SECTORS
SECTOR % OF
PORTFOLIO
REVENUE BONDS 51.8%
GENERAL OBLIGATIONS 32.9
CERTIFICATES OF PARTICIPATION 12.5
TAX ALLOCATION 2.5
REGISTERED INVESTMENT COMPANY 0.3
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (UNAUDITED)
PERFORMANCE
For the year ended July 31, 2007, HighMark California Intermediate
Tax-Free Bond Fund (the "Fund") produced a total return of 3.24%
(Fiduciary Shares). In comparison, the unmanaged Lehman Brothers 7-Year
Municipal Bond Index returned 3.94% over the same period.
FACTORS AFFECTING PERFORMANCE
The Fund's fiscal period was marked by the strong performance of the U.S.
economy, although it slowed to a moderate growth rate in the second half
of the reporting period. Despite a weak housing market and the ongoing war
in Iraq, productivity was healthy, inflation was relatively low, job
growth remained steady and capital spending continued. During the period,
the Federal Open Market Committee left the federal funds rate - the rate
at which banks lend to each other - unchanged at its current level of
5.25%. This inactivity ended a series of Fed tightenings that started in
2004 with rates at 1%. Additionally, state credit quality improved and
strong revenues provided the financial flexibility to improve structural
budgets, as well as to finance deferred capital projects from years past.
In California, municipal bond issuance initially declined as higher tax
receipts reduced borrowing needs, before increasing significantly in the
second half of the Fund's fiscal year. California remained the largest
issuer of municipal bonds in the country. The period saw an increase in
refunding activity as the economy slowed and interest rates held steady.
Households continued to be the largest holders of municipal bonds,
followed by money market funds, mutual funds and property/casualty
companies. The largest sectors of issuance for the year were education,
followed by general purpose. For the period, the Fund underperformed its
benchmark, with the Fund's shorter duration relative to its benchmark
being the primary contributing factor.
- --------------------------------------------------------------------------------
32 1.800.433.6884
- --------------------------------------------------------------------------------
[MOUNTAIN RANGE GRAPHIC OMITTED]
HIGHMARK CALIFORNIA INTERMEDIATE
TAX-FREE BOND FUND INVESTMENT OBJECTIVE
HIGHMARK CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND SEEKS TO PROVIDE HIGH
CURRENT INCOME THAT IS EXEMPT FROM FEDERAL INCOME TAX AND STATE OF CALIFORNIA
PERSONAL INCOME TAX.
[PHOTO OMITTED]
TEAM LEADER
ROBERT BIGELOW
HIGHMARK CAPITAL
MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK CALIFORNIA
INTERMEDIATE TAX-FREE BOND FUND VERSUS THE LEHMAN BROTHERS 7-YEAR MUNICIPAL BOND
INDEX AND THE MORNINGSTAR MUNICIPAL CALIFORNIA INTERMEDIATE/SHORT CATEGORY.
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
HighMark California HighMark California HighMark California HighMark California
Intermediate Tax-Free Intermediate Tax-Free Intermediate Tax-Free Intermediate Tax-Free
Bond Fund, Fiduciary Shares Bond Fund, Class A Shares Bond Fund, Class B Shares+ Bond Fund, Class C Shares+
7/31/97 $10,000 $ 9,775 $10,000 $10,000
7/98 10,475 10,231 10,475 10,475
7/99 10,846 10,594 10,846 10,846
7/00 11,353 11,091 11,272 11,353
7/01 12,253 11,961 12,046 12,253
7/02 12,974 12,668 12,629 12,974
7/03 13,305 12,973 12,829 13,305
7/04 13,795 13,420 13,172 13,738
7/05 14,173 13,755 13,402 14,001
7/06 14,407 13,948 13,482 14,131
7/07 14,873 14,366 13,791 14,488
Lehman Brothers Morningstar
7-Year Municipal Municipal California
Bond Index Intermediate/Short Category
7/31/97 $10,000 $10,000
7/98 10,526 10,447
7/99 10,870 10,732
7/00 11,369 11,204
7/01 12,411 12,043
7/02 13,297 12,719
7/03 13,811 12,967
7/04 14,524 13,491
7/05 15,099 14,007
7/06 15,424 14,287
7/07 16,031 14,757
- -----------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED ANNUALIZED
ONE YEAR 3 YEAR 5 YEAR 10 YEAR SINCE
RETURN RETURN RETURN RETURN INCEPTION
- -----------------------------------------------------------------------------------------------
Fiduciary Shares 3.24% 2.54% 2.77% 4.05% 4.27%
- -----------------------------------------------------------------------------------------------
Class A Shares 3.00% 2.30% 2.55% 3.93% 4.17%
- -----------------------------------------------------------------------------------------------
Class A Shares with load* 0.73% 1.52% 2.08% 3.69% 4.00%
- -----------------------------------------------------------------------------------------------
Class B Shares 2.29% 1.54% 1.78% 3.27%+ 3.70%+
- -----------------------------------------------------------------------------------------------
Class B Shares with load** -2.66% 0.62% 1.43% 3.27%+ 3.70%+
- -----------------------------------------------------------------------------------------------
Class C Shares 2.52% 1.79% 2.23%+ 3.78%+ 4.07%+
- -----------------------------------------------------------------------------------------------
Class C Shares with load*** 1.53% 1.79% 2.23%+ 3.78%+ 4.07%+
- -----------------------------------------------------------------------------------------------
+ The performance presented links the performance of Fiduciary Shares from
October 15, 1993 with the performance of Class B Shares on November 30,
1999 and Class C Shares on November 28, 2003. Fiduciary Share performance
has been adjusted for the CDSC applicable to Class B Shares and Class C
Shares, as applicable, but does not reflect the higher Rule 12b-1 fees and
expenses applicable to these Classes. With those adjustments, performance
would be lower than that shown.
* Reflects 2.25% sales charge.
** Reflects maximum CDSC of 5.00%.
*** Reflects maximum CDSC of 1.00%.
Past performance is not predictive of future results. Returns shown in the
graph and the table do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares. The returns for certain periods reflect fee waivers and/or
reimbursements in effect for that period; absent fee waivers and
reimbursements, performance would have been lower. Performance presented
from October 15, 1993 (commencement of operations of Fiduciary and Class A
Shares) to April 25, 1997 reflects the performance of the Stepstone
California Intermediate Tax-Free Bond Fund.
- --------------------------------------------------------------------------------
WWW.HIGHMARKFUNDS.COM 33
- --------------------------------------------------------------------------------
[HIGHMARK FUNDS LOGO OMITTED](R)
[MOUNTAIN RANGE GRAPHIC OMITTED]
TOP TEN HOLDINGS
HOLDING % OF
PORTFOLIO
GEORGIA STATE, SER E, GO
5.250%, 02/01/09 3.6%
PHOENIX, GO
PREREFUNDED @ 101
5.000%, 07/01/09 3.4
SEATTLE, LIMITED TAX, SER B, GO
5.500%, 03/01/11 2.9
MILWAUKEE, METROPOLITAN
SEWAGE DISTRICT, SER A, GO
5.500%, 10/01/08 2.9
SAN RAMON VALLEY, UNIFIED SCHOOL
DISTRICT, GO, FSA INSURED
CALLABLE 08/01/14 @ 100
5.250%, 08/01/18 2.5
UTAH STATE, BOARD REGENTS
AUXILIARY & CAMPUS FACILITIES
REVENUE, SER A, RB,
MBIA INSURED
CALLABLE 04/01/15 @ 100
5.000%, 04/01/17 2.2
PIERCE COUNTY, GO,
AMBAC INSURED
CALLABLE 08/01/15 @ 100
5.125%, 08/01/16 2.1
KING COUNTY, SCHOOL DISTRICT
NO. 410, GO, FGIC INSURED
5.500%, 12/01/10 1.9
FLORIDA STATE, BOARD OF
EDUCATION, PUBLIC EDUCATION
CAPITAL OUTLAY, SER A, GO
5.000%, 06/01/08 1.8
TEXAS STATE, UNIVERSITY SYSTEMS,
REVENUE FINANCING SYSTEM,
RB, FSA INSURED
PREREFUNDED @ 100
4.800%, 03/15/10 1.7
FUND SECTORS
SECTOR % OF
PORTFOLIO
GENERAL OBLIGATIONS 62.5%
REVENUE BONDS 33.6
TAX ALLOCATION 1.6
REGISTERED INVESTMENT COMPANY 1.5
CERTIFICATES OF PARTICIPATION 0.8
NATIONAL INTERMEDIATE TAX-FREE BOND FUND (UNAUDITED)
PERFORMANCE
For the year ended July 31, 2007, HighMark National Intermediate Tax-Free
Bond Fund (the "Fund") produced a total return of 3.72% (Fiduciary
Shares). In comparison, the unmanaged Lehman Brothers 7-Year Municipal
Bond Index returned 3.94% for the same period.
FACTORS AFFECTING PERFORMANCE
The Fund's fiscal period was marked by the strong performance of the U.S.
economy, although it slowed to a moderate growth rate in the second half
of the reporting period. Despite a weak housing market and the ongoing war
in Iraq, productivity was healthy, inflation was relatively low, job
growth remained steady and capital spending continued. During the period,
the Federal Open Market Committee left the federal funds rate - the rate
banks lend to each other - unchanged at its current level of 5.25%. This
inactivity ended a series of Fed tightenings that started in 2004 with
rates at 1%. Additionally, state credit quality improved and strong
revenues provided financial flexibility to improve structural budgets, as
well as finance deferred capital projects from years past.
Municipal bond issuance initially declined as higher tax receipts reduced
borrowing needs, before increasing significantly is the second half of the
Fund's fiscal year. California remained the largest issuer of municipal
bonds in the country, followed by Texas. The period saw an increase in
refunding activity as the economy slowed and interest rates held steady.
Households continued to be the largest holders of municipal bonds,
followed by money market funds, mutual funds and property/casualty
companies. The largest sectors of issuance for the year were education,
followed by general purpose. For the period, the Fund underperformed its
benchmark, with the Fund's shorter duration relative to its benchmark as
the primary contributing factor.
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34 1.800.433.6884
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HIGHMARK NATIONAL INTERMEDIATE TAX-FREE BOND FUND INVESTMENT OBJECTIVE
HIGHMARK NATIONAL INTERMEDIATE TAX-FREE BOND FUND SEEKS TO PROVIDE HIGH CURRENT
INCOME THAT IS EXEMPT FROM FEDERAL INCOME TAX.
[PHOTO OMITTED]
TEAM LEADER
ROBERT BIGELOW
HIGHMARK CAPITAL
MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK NATIONAL
INTERMEDIATE TAX-FREE BOND FUND VERSUS THE LEHMAN BROTHERS 7-YEAR MUNICIPAL BOND
INDEX AND THE MORNINGSTAR MUNICIPAL NATIONAL INTERMEDIATE CATEGORY.
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
Morningstar
HighMark National HighMark National HighMark National Lehman Brothers Municipal
Intermediate Tax-Free Intermediate Tax-Free Intermediate Tax-Free 7-Year Municipal National
Bond Fund, Bond Fund, Bond Fund, Bond Intermediate
Fiduciary Shares+ Class A Shares+ Class C Shares++ Index Category
7/31/97 $10,000 $ 9,775 $10,000 $10,000 $10,000
7/98 10,405 10,138 10,371 10,526 10,486
7/99 10,624 10,326 10,564 10,870 10,692
7/00 10,969 10,635 10,880 11,369 11,014
7/01 11,865 11,483 11,747 12,411 11,984
7/02 12,508 12,064 12,341 13,297 12,606
7/03 12,846 12,362 12,646 13,811 12,883
7/04 13,254 12,724 12,999 14,524 13,450
7/05 13,575 13,000 13,408 15,099 13,958
7/06 13,838 13,220 13,575 15,424 14,202
7/07 14,353 13,665 13,963 16,031 14,664
- -----------------------------------------------------------------------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED ANNUALIZED
ONE YEAR 3 YEAR 5 YEAR 10 YEAR SINCE
RETURN RETURN RETURN RETURN INCEPTION
- -----------------------------------------------------------------------------------------------
Fiduciary Shares 3.72% 2.69% 2.79%+ 3.68%+ 4.84%+
- -----------------------------------------------------------------------------------------------
Class A Shares 3.37% 2.41% 2.53%+ 3.41%+ 4.58%+
- -----------------------------------------------------------------------------------------------
Class A Shares with load* 1.06% 1.62% 2.06%+ 3.17%+ 4.45%+
- -----------------------------------------------------------------------------------------------
Class C Shares 2.86% 2.42% 2.50%++ 3.40%++ 4.57%++
- -----------------------------------------------------------------------------------------------
Class C Shares with load** 1.87% 2.42% 2.50%++ 3.40%++ 4.57%++
- -----------------------------------------------------------------------------------------------
+ The performance presented links the performance of the UBOC Intermediate
Municipal Bond Fund, a common trust fund (the "Common Trust Fund"), for
the period prior to its consolidation with the HighMark National
Intermediate Tax-Free Bond Fund on October 18, 2002, as adjusted to
reflect the fees and expenses associated with the HighMark National
Intermediate Tax-Free Bond Fund. The Common Trust Fund was not registered
under the Investment Company Act of 1940, as amended, and therefore was
not subject to the investment restrictions, limitations, and
diversification requirements imposed by such Act and the Internal Revenue
Code of 1986, as amended. If the Common Trust Fund had been registered,
its performance may have been lower.
++ The performance presented links the performance of the Common Trust Fund
from February 17, 1989, with the performance of the Fiduciary Shares from
October 18, 2002 with the performance of Class C Shares on November 28,
2003. Fiduciary Share performance has been adjusted for the CDSC
applicable to Class C Shares but does not reflect the higher Rule 12b-1
fees and expenses applicable to this class. With those adjustments,
performance would be lower than that shown.
* Reflects 2.25% sales charge.
** Reflects maximum CDSC of 1.00%.
Past performance is not predictive of future results. Returns shown in the
graph and the table do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares. The returns for certain periods reflect fee waivers and/or
reimbursements in effect for that period; absent fee waivers and
reimbursements, performance would have been lower. Performance presented
from February 17, 1989 to October 18, 2002 (commencement of operations of
Fiduciary and Class A Shares) reflects the performance of the UBOC
Intermediate Municipal Bond Fund, a common trust fund.
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TOP TEN HOLDINGS
HOLDING* % OF
PORTFOLIO+
FNMA
6.000%, 05/15/08 3.6%
FHLMC
5.000%, 09/16/08 3.5%
FNMA
3.875%, 07/15/08 3.5%
CITIBANK CREDIT CARD MASTER
TRUST, SER 1999-2, CL A
5.875%, 03/10/11 2.7%
FNMA
5.500%, 08/01/15 2.5%
GNMA, CMO REMIC,
SER 25, CL AC
3.377%, 01/16/23 2.3%
U.S. TREASURY INFLATION
INDEX NOTE
3.875%, 01/15/09 2.3%
FNMA
6.000%, 05/01/16 2.0%
FHLMC GOLD
5.500%, 07/01/15 2.0%
FNMA
6.375%, 06/15/09 1.8%
FUND SECTORS
SECTOR+ % OF
PORTFOLIO+
U.S. GOVERNMENT AGENCY
OBLIGATIONS 47.7%
ASSET-BACKED SECURITIES 17.3
FINANCIALS 12.6
REPURCHASE AGREEMENT 5.4
UTILITIES 3.7
U.S. TREASURY OBLIGATIONS 3.2
CONSUMER DISCRETIONARY 2.8
HEALTH CARE 1.8
TELECOMMUNICATION 1.8
CONSUMER STAPLES 1.5
FOREIGN GOVERNMENTS 0.9
INFORMATION TECHNOLOGY 0.9
INDUSTRIALS 0.4
* EXCLUDES SHORT-TERM FIXED INCOME SECURITIES.
+ EXCLUDES SECURITIES PURCHASED WITH CASH COLLATERAL RECEIVED FROM
SECURITIES LENDING.
SHORT TERM BOND FUND (UNAUDITED)
PERFORMANCE
For the year ended July 31, 2007, HighMark Short Term Bond Fund (the
"Fund") produced a total return of 4.81% (Fiduciary Shares). In
comparison, the unmanaged Lehman Brothers 1-3 Year U.S. Government/Credit
Bond Index returned 5.34% for the same period.
FACTORS AFFECTING PERFORMANCE
During the past fiscal year, the bond market expected anywhere from one to
three cuts in the federal funds rate by the end of 2007. In fact, in each
of the last three years, the market continually underestimated the level
of the federal funds rate, expecting the housing market, the trade
deficit, overextended consumers or some other disaster to cause a severe
economic slowdown or even recession. Meanwhile, the Federal Reserve was
consistent, both in its public comments and in the published minutes of
its meetings, stating that its predominant policy concern was the risk
that inflation would "fail to moderate as expected," meaning it had no
intention of lowering interest rates anytime soon. Slow GDP growth in the
first quarter of 2007 seemed to validate the slowdown scenario. After
briefly resuming a healthy pace in the second quarter of 2007, sub-prime
market concerns caused a flight to quality among investors, and steep
declines in both corporate bonds and mortgaged-backed securities also
occurred at the end of the Fund's fiscal period.
As a result, the Fund's performance lagged behind its benchmark, the
Lehman Brothers 1-3 U.S. Government/Credit Index, for the reporting
period. The Fund benefited from its lower interest rate risk (shorter
duration), but the relatively high corporate bond weighting had a negative
influence on Fund performance.
As of July 31, 2007, the Fund's average credit quality was AA+, compared
to AAA for the Fund's benchmark. The Fund's average weighted maturity was
1.7 years and the average duration was 1.5 years, compared to 1.9 years
and 1.7 years, respectively, for the Fund's benchmark.
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36 1.800.433.6884
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HIGHMARK SHORT TERM BOND FUND INVESTMENT OBJECTIVE
HIGHMARK SHORT TERM BOND FUND SEEKS TOTAL RETURN THROUGH INVESTMENTS IN
FIXED-INCOME SECURITIES.
[PHOTO OMITTED]
TEAM LEADER
JACK MONTGOMERY
HIGHMARK CAPITAL
MANAGEMENT, INC.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN HIGHMARK SHORT TERM
BOND FUND VERSUS THE LEHMAN BROTHERS 1-3 YEAR U.S. GOVERNMENT/CREDIT BOND INDEX
AND THE MORNINGSTAR SHORT BOND CATEGORY.
[THE FOLLOWING TABLE WAS REPRESENTED AS A LINE GRAPH IN THE PRINTED MATERIAL.]
HighMark Short HighMark Short HighMark Short Lehman Brothers Morningstar
Term Bond Fund, Term Bond Fund, Term Bond Fund, 1-3 Year U.S. Government/ Short Bond
Fiduciary Shares Class A Shares Class C Shares+ Credit Bond Index Category
11/2/04 $10,000 $ 9,775 $10,000 $10,000 $10,000
7/05 10,034 9,792 10,028 10,045 10,063
7/06 10,306 10,033 10,226 10,346 10,306
7/07 10,801 10,478 10,648 10,898 10,782
- --------------------------------------------------------------------------------
ANNUALIZED
ONE YEAR SINCE
RETURN INCEPTION
- --------------------------------------------------------------------------------
Fiduciary Shares 4.81% 2.85%
- --------------------------------------------------------------------------------
Class A Shares 4.43% 2.56%
- --------------------------------------------------------------------------------
Class A Shares with load* 2.13% 1.71%
- --------------------------------------------------------------------------------
Class C Shares 4.12% 2.31%+
- --------------------------------------------------------------------------------
Class C Shares with load** 3.12% 2.31%+
- --------------------------------------------------------------------------------
+ The performance presented links the performance of the Fiduciary Shares
from November 2, 2004 with the performance of Class C Shares on November
29, 2004. Fiduciary Share performance has been adjusted for the CDSC
applicable to Class C Shares but does not reflect the higher Rule 12b-1
fees and expenses applicable to this Class. With these adjustments,
performance would be lower than that shown.
* Reflects 2.25% sales charge. Prior to December 1, 2005, the sales charge
was 3.25%.
** Reflects maximum CDSC of 1.00%.
Past performance is not predictive of future results. Returns shown in the
graph and the table do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares. The returns for certain periods reflect fee waivers and/or
reimbursements in effect for that period; absent fee waivers and
reimbursements, performance would have been lower.
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FUND SECTORS
CALIFORNIA TAX-FREE
MONEY MARKET FUND
SECTOR % OF
PORTFOLIO
REVENUE BONDS 69.6%
TAX EXEMPT COMMERCIAL PAPER 10.6
GENERAL OBLIGATIONS 7.0
CERTIFICATES OF PARTICIPATION 6.6
TAX AND REVENUE ANTICIPATION
NOTES 5.2
SPECIAL ASSESSMENTS 1.0
REGISTERED INVESTMENT COMPANIES 0.0
DIVERSIFIED MONEY
MARKET FUND
SECTOR % OF
PORTFOLIO
COMMERCIAL PAPER 81.7%
CERTIFICATES OF DEPOSIT 14.8
CORPORATE OBLIGATIONS 1.6
VARIABLE RATE DEMAND NOTES 1.3
REPURCHASE AGREEMENT 0.6
U.S. GOVERNMENT MONEY
MARKET FUND
SECTOR % OF
PORTFOLIO
REPURCHASE AGREEMENTS 67.1%
U.S. GOVERNMENT AGENCY
OBLIGATIONS 24.9
VARIABLE RATE DEMAND NOTES 8.0
100% U.S. TREASURY MONEY
MARKET FUND
SECTOR % OF
PORTFOLIO
U.S. TREASURY BILLS 86.1%
U.S. TREASURY NOTE 13.9
CALIFORNIA TAX-FREE MONEY MARKET FUND* (UNAUDITED)
PERFORMANCE
HighMark California Tax-Free Money Market Fund's (the "Fund") seven-day
effective yield as of July 31, 2007 was 3.53% (Fiduciary Shares). Using a
combined federal and California state income tax rate of 34.4%, the
seven-day effective yield is equivalent to a 5.38% taxable yield.
FACTORS AFFECTING PERFORMANCE
During the fiscal year, the Federal Reserve left short-term interest rates
unchanged at 5.25%. Economic growth continued to advance moderately
despite ongoing adjustments in the housing market and higher energy
prices. The Fed grew concerned that economic growth may slow but remained
more concerned that inflation would not moderate. Municipal note yields
increased slightly from 3.60% to 3.68%, reflecting the new issuance of
annual cash flow notes from municipal issuers. The Fund positioned itself
with a shorter weighted average maturity during the period, in which
variable rate notes outperformed fixed rate assets. California's long-term
rating from the three major rating agencies remained unchanged, at
A1/A+/A+ from January 2007.
As of July 31, 2007, the Fund's weighted average maturity was 22 days, up
from 14 days in January 2007.
* An investment in the HighMark Money Market Funds is neither insured nor
guaranteed by the U.S. Government. Although these Funds seek to maintain a
stable net asset value of $1.00, there can be no assurance that they will
be able to do so. Some or all of the income you receive from the
California Tax-Free Money Market Fund may be subject to certain state and
local taxes, and in some cases, to the federal alternative minimum tax.
** The seven-day effective yields, as of July 31, 2007, are as follows:
CLASS A CLASS S
SHARES SHARES
- --------------------------------------------------------------------------------
California Tax-Free Money Market Fund 3.27% 3.01%
- --------------------------------------------------------------------------------
38 1.800.433.6884
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TAXABLE MONEY MARKET FUNDS* (UNAUDITED)
PERFORMANCE
As of July 31, 2007, HighMark 100% U.S. Treasury Money Market Fund posted a
seven-day effective yield of 4.36% (Fiduciary Shares). Over the same period,
HighMark U.S. Government Money Market Fund produced a seven-day effective yield
of 4.94% (Fiduciary Shares), and as of July 31, 2007, HighMark Diversified Money
Market Fund had a seven-day effective yield of 5.00% (Fiduciary Shares).
FACTORS AFFECTING PERFORMANCE
With official monetary policy on hold throughout the period, the HighMark
Taxable Money Market Funds focused on monitoring the health of the economy with
special consideration given to the struggling U.S. automotive sector, softening
housing market and overall strength of consumer finances. Excess liquidity
increased in the world financial system, bidding asset prices up and driving
credit spreads narrower as investors put assets to work.
Technical factors dominated the short-term area of the U.S Treasury market.
Stronger U.S. tax receipts in April drove net borrowings and supply of new U.S.
Treasury issues lower than in the past. With the exception of the April 2007 and
June 2007 seasonal issuance of cash management bills, short-term issues traded
well below the 5.25% target Federal Funds rate for most of the year. HighMark
100% U.S. Treasury Fund focused on maintaining an average life close to or
shorter than its peer universe by purchasing securities to be responsive to
market changes, while providing adequate liquidity within the portfolio.
HighMark U.S. Government Fund's strategy remained constant throughout the year
as Government Agency paper continued to trade at a more expensive price than
both Treasury securities and overnight investments. This Fund's concentration in
repurchase agreements delivered yields that approximated the Federal Fund's
rate, with its weighted average life shorter than the universe of its peers.
Until recently, money market levels traded in a narrow range around the target
rate with widespread expectation that no changes to monetary policy would occur
through the end of calendar year 2007. With the yield curve somewhat inverted
for most of the year, HighMark Diversified Money Market Fund's strategy focused
on the short-term area of the market. Toward the end of July 2007, however,
credit problems previously thought to be limited to prior excesses in sub-prime
mortgage lending began to show. This situation led to a reevaluation of risk
across the fixed-income markets and a tightening of mortgage credit
availability. While the Fund invested in commercial paper, it avoided both
mortgage conduit commercial paper and programs with extension risks.
* An investment in the HighMark Money Market Funds is neither insured nor
guaranteed by the U.S. Government. Although these Funds seek to maintain a
stable net asset value of $1.00, there can be no assurance that they will
be able to do so. Some or all of the income you receive from the
California Tax-Free Money Market Fund may be subject to certain state and
local taxes, and in some cases, to the federal alternative minimum tax.
*** The seven-day effective yields, as of July 31, 2007, are as follows:
CLASS A CLASS B CLASS C CLASS S
SHARES SHARES SHARES SHARES
- --------------------------------------------------------------------------------
Diversified Money Market Fund 4.74% n/a n/a 4.49%
U.S. Government Money Market Fund 4.68% 3.95% 4.22% 4.42%
100% U.S. Treasury Money Market Fund 4.10% n/a n/a 3.84%
The yields reflect voluntary waivers in place with the Distributor; without such
waivers, yields would be lower (see Note 3 in notes to financial statements).
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DISCLOSURE OF FUND EXPENSES (UNAUDITED)
We believe it is important for you to understand the impact of fees regarding
your investment. All mutual funds have operating expenses. As a shareholder of a
mutual fund, you incur ongoing costs, which include costs for portfolio
management, administrative services, distribution fees and shareholder reports
(like this one), among others. Operating expenses, which are deducted from a
mutual fund's gross income, directly reduce the investment return of the mutual
fund. A mutual fund's expenses are expressed as a percentage of its average net
assets. This figure is known as the expense ratio. The following examples are
intended to help you understand the ongoing fees (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.
o ACTUAL FUND RETURN. This section helps you to estimate the actual expenses
after fee waivers that you paid over the period. The "Ending Account
Value" shown is derived from the Fund's actual return, and the fourth
column shows the dollar amount that would have been paid by an investor
who started with $1,000 in the Fund. You may use the information here,
together with the amount you invested, to estimate the expenses that you
paid over the period.
To do so, simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by
the number given for your Fund under the heading "Expenses Paid During
Period."
o HYPOTHETICAL 5% RETURN. This section is intended to help you compare your
Fund's costs with those of other mutual funds. It assumes that the Fund
had a return of 5% before expenses during the year, but that the expense
ratio is unchanged. In this case, because the return used is not the
Fund's actual return, the results do not apply to your investment. The
example is useful in making comparisons because the Securities and
Exchange Commission requires all mutual funds to calculate expenses based
on a 5% return. You can assess your Fund's costs by comparing this
hypothetical example with the hypothetical examples that appear in
shareholder reports of other mutual funds.
Please note that the expenses shown in the table are meant to highlight and help
you compare ONGOING costs only and do not reflect any transactional costs such
as sales charges (loads), and redemption fees, which are described in your
Fund's Prospectus. If these fees were applied to your account, your costs would
be higher.
BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
2/1/07 7/31/07 RATIOS PERIOD*
- --------------------------------------------------------------------------------
BALANCED FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ........... $1,000.00 $1,019.00 0.94% $ 4.71
Class A Shares ............. 1,000.00 1,017.80 1.20 6.00
Class B Shares ............. 1,000.00 1,014.70 1.79 8.94
Class C Shares ............. 1,000.00 1,014.90 1.79 8.94
HYPOTHETICAL 5% RETURN
Fiduciary Shares ........... 1,000.00 1,020.13 0.94 4.71
Class A Shares ............. 1,000.00 1,018.84 1.20 6.01
Class B Shares ............. 1,000.00 1,015.92 1.79 8.95
Class C Shares ............. 1,000.00 1,015.92 1.79 8.95
- --------------------------------------------------------------------------------
COGNITIVE VALUE FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ........... 1,000.00 990.90 0.94 4.64
Class A Shares ............. 1,000.00 988.60 1.34 6.61
Class C Shares ............. 1,000.00 985.50 1.95 9.60
Class M Shares ............. 1,000.00 990.10 0.94 4.64
HYPOTHETICAL 5% RETURN
Fiduciary Shares ........... 1,000.00 1,020.13 0.94 4.71
Class A Shares ............. 1,000.00 1,018.15 1.34 6.71
Class C Shares ............. 1,000.00 1,015.12 1.95 9.74
Class M Shares ............. 1,000.00 1,020.13 0.94 4.71
BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
2/1/07 7/31/07 RATIOS PERIOD*
- --------------------------------------------------------------------------------
CORE EQUITY FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ........... $1,000.00 $ 992.60 0.92% $ 4.55
Class A Shares ............. 1,000.00 990.40 1.18 5.82
Class B Shares ............. 1,000.00 988.30 1.78 8.78
Class C Shares ............. 1,000.00 988.40 1.78 8.78
HYPOTHETICAL 5% RETURN
Fiduciary Shares ........... 1,000.00 1,020.23 0.92 4.61
Class A Shares ............. 1,000.00 1,018.94 1.18 5.91
Class B Shares ............. 1,000.00 1,015.97 1.78 8.90
Class C Shares ............. 1,000.00 1,015.97 1.78 8.90
- --------------------------------------------------------------------------------
ENHANCED GROWTH FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Class A Shares ............. 1,000.00 1,083.10 1.35 6.97
Class C Shares ............. 1,000.00 1,080.00 1.90 9.80
Class M Shares ............. 1,000.00 1,085.90 0.94 4.86
HYPOTHETICAL 5% RETURN
Class A Shares ............. 1,000.00 1,018.10 1.35 6.76
Class C Shares ............. 1,000.00 1,015.37 1.90 9.49
Class M Shares ............. 1,000.00 1,020.13 0.94 4.71
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40 1.800.433.6884
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BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
2/1/07 7/31/07 RATIOS PERIOD*
- --------------------------------------------------------------------------------
INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ........... $1,000.00 $1,125.90 1.30% $ 6.85
Class A Shares ............. 1,000.00 1,125.00 1.51 7.96
Class C Shares ............. 1,000.00 1,119.90 2.21 11.62
Class M Shares ............. 1,000.00 1,127.10 1.20 6.33
HYPOTHETICAL 5% RETURN
Fiduciary Shares ........... 1,000.00 1,018.35 1.30 6.51
Class A Shares ............. 1,000.00 1,017.31 1.51 7.55
Class C Shares ............. 1,000.00 1,013.84 2.21 11.03
Class M Shares ............. 1,000.00 1,018.84 1.20 6.01
- --------------------------------------------------------------------------------
LARGE CAP GROWTH FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ........... 1,000.00 1,026.60 0.94 4.72
Class A Shares ............. 1,000.00 1,025.00 1.20 6.03
Class B Shares ............. 1,000.00 1,023.30 1.80 9.03
Class C Shares ............. 1,000.00 1,022.10 1.80 9.02
HYPOTHETICAL 5% RETURN
Fiduciary Shares ........... 1,000.00 1,020.13 0.94 4.71
Class A Shares ............. 1,000.00 1,018.84 1.20 6.01
Class B Shares ............. 1,000.00 1,015.87 1.80 9.00
Class C Shares ............. 1,000.00 1,015.87 1.80 9.00
- --------------------------------------------------------------------------------
LARGE CAP VALUE FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ........... 1,000.00 993.00 0.89 4.40
Class A Shares ............. 1,000.00 991.80 1.14 5.63
Class B Shares ............. 1,000.00 988.20 1.74 8.58
Class C Shares ............. 1,000.00 988.30 1.74 8.58
HYPOTHETICAL 5% RETURN
Fiduciary Shares ........... 1,000.00 1,020.38 0.89 4.46
Class A Shares ............. 1,000.00 1,019.14 1.14 5.71
Class B Shares ............. 1,000.00 1,016.17 1.74 8.70
Class C Shares ............. 1,000.00 1,016.17 1.74 8.70
- --------------------------------------------------------------------------------
SMALL CAP ADVANTAGE FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ........... 1,000.00 941.50 1.30 5.22(1)
Class A Shares ............. 1,000.00 941.00 1.56 6.26(1)
Class C Shares ............. 1,000.00 940.00 2.17 8.71(1)
HYPOTHETICAL 5% RETURN
Fiduciary Shares ........... 1,000.00 1,015.31 1.30 6.50
Class A Shares ............. 1,000.00 1,014.23 1.56 7.79
Class C Shares ............. 1,000.00 1,011.71 2.17 10.82
BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
2/1/07 7/31/07 RATIOS PERIOD*
- --------------------------------------------------------------------------------
SMALL CAP VALUE FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ........... $1,000.00 $ 937.80 1.34% $ 6.44
Class A Shares ............. 1,000.00 937.10 1.59 7.64
Class B Shares ............. 1,000.00 934.00 2.19 10.50
Class C Shares ............. 1,000.00 933.60 2.19 10.50
HYPOTHETICAL 5% RETURN
Fiduciary Shares ........... 1,000.00 1,018.15 1.34 6.71
Class A Shares ............. 1,000.00 1,016.91 1.59 7.95
Class B Shares ............. 1,000.00 1,013.93 2.19 10.94
Class C Shares ............. 1,000.00 1,013.93 2.19 10.94
- --------------------------------------------------------------------------------
VALUE MOMENTUM FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ........... 1,000.00 1,016.10 0.94 4.70
Class A Shares ............. 1,000.00 1,014.90 1.19 5.95
Class B Shares ............. 1,000.00 1,011.90 1.79 8.93
Class C Shares ............. 1,000.00 1,011.60 1.79 8.93
HYPOTHETICAL 5% RETURN
Fiduciary Shares ........... 1,000.00 1,020.13 0.94 4.71
Class A Shares ............. 1,000.00 1,018.89 1.19 5.96
Class B Shares ............. 1,000.00 1,015.92 1.79 8.95
Class C Shares ............. 1,000.00 1,015.92 1.79 8.95
- --------------------------------------------------------------------------------
CAPITAL GROWTH ALLOCATION FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ........... 1,000.00 1,017.50 0.31 1.55
Class A Shares ............. 1,000.00 1,016.50 0.56 2.80
Class C Shares ............. 1,000.00 1,012.70 1.26 6.29
HYPOTHETICAL 5% RETURN
Fiduciary Shares ........... 1,000.00 1,023.26 0.31 1.56
Class A Shares ............. 1,000.00 1,022.02 0.56 2.81
Class C Shares ............. 1,000.00 1,018.55 1.26 6.31
- --------------------------------------------------------------------------------
DIVERSIFIED EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ........... 1,000.00 1,020.60 0.31 1.55
Class A Shares ............. 1,000.00 1,019.00 0.56 2.80
Class C Shares ............. 1,000.00 1,016.10 1.26 6.30
HYPOTHETICAL 5% RETURN
Fiduciary Shares ........... 1,000.00 1,023.26 0.31 1.56
Class A Shares ............. 1,000.00 1,022.02 0.56 2.81
Class C Shares ............. 1,000.00 1,018.55 1.26 6.31
- --------------------------------------------------------------------------------
GROWTH & INCOME ALLOCATION FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ........... 1,000.00 1,019.60 0.29 1.45
Class A Shares ............. 1,000.00 1,018.70 0.55 2.75
Class C Shares ............. 1,000.00 1,014.80 1.25 6.24
HYPOTHETICAL 5% RETURN
Fiduciary Shares ........... 1,000.00 1,023.36 0.29 1.45
Class A Shares ............. 1,000.00 1,022.07 0.55 2.76
Class C Shares ............. 1,000.00 1,018.60 1.25 6.26
- --------------------------------------------------------------------------------
WWW.HIGHMARKFUNDS.COM 41
- --------------------------------------------------------------------------------
[HIGHMARK FUNDS LOGO OMITTED](R)
[MOUNTAIN RANGE GRAPHIC OMITTED]
DISCLOSURE OF FUND EXPENSES (UNAUDITED) (CONCLUDED)
BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
2/1/07 7/31/07 RATIOS PERIOD*
- --------------------------------------------------------------------------------
INCOME PLUS ALLOCATION FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ........... $1,000.00 $1,016.50 0.37% $ 1.85
Class A Shares ............. 1,000.00 1,015.30 0.62 3.10
Class C Shares ............. 1,000.00 1,011.80 1.32 6.58
HYPOTHETICAL 5% RETURN
Fiduciary Shares ........... 1,000.00 1,022.96 0.37 1.86
Class A Shares ............. 1,000.00 1,021.72 0.62 3.11
Class C Shares ............. 1,000.00 1,018.25 1.32 6.61
- --------------------------------------------------------------------------------
BOND FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ........... 1,000.00 1,018.30 0.74 3.70
Class A Shares ............. 1,000.00 1,017.30 1.00 5.00
Class B Shares ............. 1,000.00 1,013.90 1.68 8.39
Class C Shares ............. 1,000.00 1,015.20 1.42 7.10
HYPOTHETICAL 5% RETURN
Fiduciary Shares ........... 1,000.00 1,021.12 0.74 3.71
Class A Shares ............. 1,000.00 1,019.84 1.00 5.01
Class B Shares ............. 1,000.00 1,016.46 1.68 8.40
Class C Shares ............. 1,000.00 1,017.75 1.42 7.10
- --------------------------------------------------------------------------------
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ........... 1,000.00 1,013.50 0.50 2.50
Class A Shares ............. 1,000.00 1,012.30 0.74 3.69
Class B Shares ............. 1,000.00 1,008.70 1.44 7.17
Class C Shares ............. 1,000.00 1,009.90 1.19 5.93
HYPOTHETICAL 5% RETURN
Fiduciary Shares ........... 1,000.00 1,022.32 0.50 2.51
Class A Shares ............. 1,000.00 1,021.12 0.74 3.71
Class B Shares ............. 1,000.00 1,017.65 1.44 7.20
Class C Shares ............. 1,000.00 1,018.89 1.19 5.96
- --------------------------------------------------------------------------------
NATIONAL INTERMEDIATE TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ........... 1,000.00 1,014.50 0.28 1.40
Class A Shares ............. 1,000.00 1,013.30 0.53 2.65
Class C Shares ............. 1,000.00 1,010.80 0.97 4.84
HYPOTHETICAL 5% RETURN
Fiduciary Shares ........... 1,000.00 1,023.41 0.28 1.40
Class A Shares ............. 1,000.00 1,022.17 0.53 2.66
Class C Shares ............. 1,000.00 1,019.98 0.97 4.86
- --------------------------------------------------------------------------------
SHORT TERM BOND FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ........... 1,000.00 1,022.90 0.65 3.26
Class A Shares ............. 1,000.00 1,020.50 0.90 4.51
Class C Shares ............. 1,000.00 1,018.90 1.35 6.76
HYPOTHETICAL 5% RETURN
Fiduciary Shares ........... 1,000.00 1,021.57 0.65 3.26
Class A Shares ............. 1,000.00 1,020.33 0.90 4.51
Class C Shares ............. 1,000.00 1,018.10 1.35 6.76
BEGINNING ENDING NET EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
2/1/07 7/31/07 RATIOS PERIOD*
- --------------------------------------------------------------------------------
CALIFORNIA TAX-FREE MONEY MARKET FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ........... $1,000.00 $1,015.70 0.48% $ 2.40
Class A Shares ............. 1,000.00 1,014.50 0.72 3.60
Class S Shares ............. 1,000.00 1,013.20 0.98 4.89
HYPOTHETICAL 5% RETURN
Fiduciary Shares ........... 1,000.00 1,022.41 0.48 2.41
Class A Shares ............. 1,000.00 1,021.22 0.72 3.61
Class S Shares ............. 1,000.00 1,019.93 0.98 4.91
- --------------------------------------------------------------------------------
DIVERSIFIED MONEY MARKET FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ........... 1,000.00 1,024.30 0.52 2.61
Class A Shares ............. 1,000.00 1,023.10 0.77 3.86
Class S Shares ............. 1,000.00 1,021.90 1.03 5.16
HYPOTHETICAL 5% RETURN
Fiduciary Shares ........... 1,000.00 1,022.22 0.52 2.61
Class A Shares ............. 1,000.00 1,020.98 0.77 3.86
Class S Shares ............. 1,000.00 1,019.69 1.03 5.16
- --------------------------------------------------------------------------------
U.S. GOVERNMENT MONEY MARKET FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ........... 1,000.00 1,024.00 0.53 2.66
Class A Shares ............. 1,000.00 1,022.70 0.78 3.91
Class B Shares ............. 1,000.00 1,019.20 1.47 7.36
Class C Shares ............. 1,000.00 1,020.50 1.22 6.11
Class S Shares ............. 1,000.00 1,021.50 1.03 5.16
HYPOTHETICAL 5% RETURN
Fiduciary Shares ........... 1,000.00 1,022.17 0.53 2.66
Class A Shares ............. 1,000.00 1,020.93 0.78 3.91
Class B Shares ............. 1,000.00 1,017.50 1.47 7.35
Class C Shares ............. 1,000.00 1,018.74 1.22 6.11
Class S Shares ............. 1,000.00 1,019.69 1.03 5.16
- --------------------------------------------------------------------------------
100% U.S. TREASURY MONEY MARKET FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Fiduciary Shares ........... 1,000.00 1,022.20 0.52 2.61
Class A Shares ............. 1,000.00 1,021.00 0.77 3.86
Class S Shares ............. 1,000.00 1,019.70 1.03 5.16
HYPOTHETICAL 5% RETURN
Fiduciary Shares ........... 1,000.00 1,022.22 0.52 2.61
Class A Shares ............. 1,000.00 1,020.98 0.77 3.86
Class S Shares ............. 1,000.00 1,019.69 1.03 5.16
* Expenses are equal to the Fund's annualized expense ratio multiplied by
the average account value over the period, multiplied by 181/365 (to
reflect the one half year period).
(1) Expenses are equal to the Fund's annualized expense ratio multiplied by
the average account value over the period, multiplied by 151/365 (to
reflect the period since the Class commenced operations).
- --------------------------------------------------------------------------------
42 1.800.433.6884
- --------------------------------------------------------------------------------
[MOUNTAIN RANGE GRAPHIC OMITTED]
SCHEDULE OF INVESTMENTS
JULY 31, 2007
BALANCED FUND
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - 65.4%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 7.6%
Coach* 5,600 $ 255
Comcast, Cl A (A)* 11,608 305
Entravision Communications, Cl A (A)* 17,900 168
Hilton Hotels (A) 9,145 404
Kohl's (A)* 3,877 236
Lamar Advertising, Cl A (A) 7,200 429
News, Cl B 18,090 410
Nordstrom (A) 3,395 161
Staples (A) 7,830 180
Starbucks (A)* 4,750 127
Target (A) 4,780 289
Tiffany (A) 3,250 157
Walt Disney 5,710 188
-------
3,309
-------
CONSUMER STAPLES - 6.4%
Altria Group 5,860 389
Avon Products 3,155 114
Colgate-Palmolive 2,260 149
CVS Caremark (A) 12,550 442
Kellogg (A) 5,220 270
PepsiCo 7,035 462
Procter & Gamble 11,435 707
Wal-Mart Stores 5,615 258
-------
2,791
-------
ENERGY - 5.4%
Exxon Mobil 16,788 1,429
Occidental Petroleum 4,840 275
Suncor Energy 7,330 663
-------
2,367
-------
FINANCIALS - 11.9%
American Express 3,605 211
American International Group 11,532 740
Bank of America 17,480 829
Citigroup 22,042 1,027
Goldman Sachs Group (A) 1,010 190
JPMorgan Chase 17,503 770
Merrill Lynch 6,215 461
Wells Fargo 17,070 577
XL Capital, Cl A (A) 4,660 363
-------
5,168
-------
HEALTH CARE - 7.4%
Abbott Laboratories 7,265 368
Allergan 3,340 194
Charles River Laboratories
International (A)* 3,200 164
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
HEALTH CARE - (CONTINUED)
Eli Lilly 6,220 $ 337
Gilead Sciences* 7,630 284
GlaxoSmithKline ADR (A) 3,245 166
Johnson & Johnson 2,560 155
Medtronic 7,310 371
Merck 5,365 266
Novartis ADR (A) 5,920 319
Pfizer 7,030 165
Schering-Plough 6,020 172
WellPoint (A)* 3,145 236
-------
3,197
-------
INDUSTRIALS - 8.5%
Danaher 8,935 667
Emerson Electric 4,485 211
General Electric 43,595 1,690
Honeywell International 8,130 467
Rockwell Automation 5,525 387
United Technologies 3,750 274
-------
3,696
-------
INFORMATION TECHNOLOGY - 12.6%
Accenture, Cl A 7,450 314
Applied Materials (A) 9,975 220
Cisco Systems* 29,360 849
Citrix Systems* 7,150 259
Corning 11,170 266
EMC* 16,655 308
Intel 28,830 681
International Business Machines (A) 3,055 338
Intersil, Cl A 5,500 161
Maxim Integrated Products (A) 7,450 236
Microsoft 32,705 948
Oracle* 9,710 186
Qualcomm 3,910 163
Symantec* 12,525 240
Texas Instruments 8,570 301
-------
5,470
-------
MATERIALS - 2.0%
Alcoa 5,810 222
Praxair (A) 6,410 491
Weyerhaeuser 2,040 145
-------
858
-------
TELECOMMUNICATIONS - 1.7%
Verizon Communications (A) 17,210 734
-------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
WWW.HIGHMARKFUNDS.COM 43
- --------------------------------------------------------------------------------
[HIGHMARK FUNDS LOGO OMITTED](R)
[MOUNTAIN RANGE GRAPHIC OMITTED]
SCHEDULE OF INVESTMENTS
JULY 31, 2007
BALANCED FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Shares/Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
UTILITIES - 1.9%
Cleco (A) 15,790 $ 375
Exelon 2,070 145
ITC Holdings (A) 7,200 303
-------
823
-------
TOTAL COMMON STOCK
(Cost $23,089) 28,413
-------
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS - 13.4%
- --------------------------------------------------------------------------------
FHLMC Gold
6.500%, 11/01/09 $ 39 39
6.000%, 09/01/17 136 137
6.000%, 02/01/28 73 73
6.000%, 12/01/36 247 245
5.500%, 08/01/21 265 261
5.000%, 10/01/20 53 51
4.500%, 03/01/18 49 47
4.500%, 05/01/19 66 63
FHLMC, CMO REMIC, Ser 1626, Cl PT
6.000%, 12/15/08 40 40
FNMA
8.000%, 08/01/24 5 6
8.000%, 05/01/25 31 33
8.000%, 07/01/26 7 8
7.500%, 09/01/26 6 7
7.000%, 09/01/25 11 11
7.000%, 07/01/26 24 25
7.000%, 09/01/26 11 11
7.000%, 12/01/27 26 27
6.500%, 05/01/14 74 76
6.500%, 03/01/24 8 8
6.500%, 01/01/28 31 32
6.500%, 05/01/29 16 17
6.000%, 08/01/14 134 135
6.000%, 02/01/17 141 142
6.000%, 03/01/28 86 86
6.000%, 05/01/28 24 24
5.500%, 12/01/17 137 136
5.500%, 11/01/33 248 240
5.500%, 09/01/34 207 201
5.500%, 04/01/36 371 360
5.000%, 12/01/17 45 44
5.000%, 04/01/18 222 216
5.000%, 05/01/18 246 240
5.000%, 11/01/18 19 18
5.000%, 03/01/34 393 370
5.000%, 08/01/34 202 191
5.000%, 07/01/35 216 204
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS - (CONTINUED)
- --------------------------------------------------------------------------------
FNMA - (continued)
4.500%, 02/01/19 $ 152 $ 146
4.500%, 05/01/19 382 365
4.500%, 06/01/19 51 49
4.500%, 07/01/20 315 301
4.000%, 09/01/18 36 33
4.000%, 05/01/19 423 394
FNMA, CMO REMIC, Ser 2003-25, Cl CD
3.500%, 03/25/17 221 213
GNMA
7.500%, 05/15/24 13 13
7.500%, 09/15/25 11 12
7.500%, 09/15/26 13 13
7.500%, 01/15/27 11 11
7.000%, 02/15/26 25 26
7.000%, 08/15/26 14 15
7.000%, 10/15/27 31 32
7.000%, 03/15/29 38 40
6.500%, 09/15/08 14 14
6.500%, 06/15/23 6 6
6.500%, 04/15/26 13 13
6.500%, 05/15/28 27 28
6.500%, 01/15/29 42 42
6.000%, 11/15/08 17 16
6.000%, 02/15/29 142 143
6.000%, 04/15/29 65 65
-------
TOTAL U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED OBLIGATIONS
(Cost $5,921)
5,814
-------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - 10.1%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 1.5%
Comcast Cable
6.875%, 06/15/09 150 153
Time Warner
7.480%, 01/15/08 300 303
Time Warner Entertainment
8.375%, 03/15/23 175 202
-------
658
-------
CONSUMER STAPLES - 0.2%
Safeway
7.500%, 09/15/09 100 104
-------
ENERGY - 0.6%
Kinder Morgan
7.250%, 03/01/28 275 253
-------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
44 1.800.433.6884
- --------------------------------------------------------------------------------
[MOUNTAIN RANGE GRAPHIC OMITTED]
SCHEDULE OF INVESTMENTS
JULY 31, 2007
BALANCED FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
- --------------------------------------------------------------------------------
FINANCIALS - 3.3%
Associates
6.950%, 11/01/18 $ 175 $ 188
Citigroup
6.200%, 03/15/09 150 152
GE Global Insurance
7.750%, 06/15/30 200 231
HSBC Bank USA (A)
3.875%, 09/15/09 200 194
Morgan Stanley
6.750%, 04/15/11 200 207
U.S. Bancorp
6.875%, 09/15/07 200 200
Wachovia
3.625%, 02/17/09 175 171
Wells Fargo Bank
6.450%, 02/01/11 100 103
-------
1,446
-------
FOREIGN GOVERNMENTS - 1.1%
Hydro Quebec, Ser HY
8.400%, 01/15/22 150 191
Pemex Project Funding Master Trust
9.125%, 10/13/10 250 274
-------
465
-------
HEALTH CARE - 1.3%
HCA
7.875%, 02/01/11 200 192
Pharmacia
5.875%, 12/01/08 225 227
United Health Group
5.250%, 03/15/11 150 149
-------
568
-------
INDUSTRIALS - 0.3%
General Electric
5.000%, 02/01/13 150 147
-------
INFORMATION TECHNOLOGY - 0.7%
Cisco Systems
5.250%, 02/22/11 175 174
International Business Machines
6.500%, 01/15/28 100 106
-------
280
-------
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
- --------------------------------------------------------------------------------
TELECOMMUNICATION - 0.3%
Bell Atlantic of Maryland
8.000%, 10/15/29 $ 75 $ 84
New England Telephone & Telegraph
7.875%, 11/15/29 50 55
-------
139
-------
UTILITIES - 0.8%
Baltimore Gas & Electric, MTN, Ser G
5.780%, 10/01/08 150 150
Virginia Electric & Power, Ser A
4.750%, 03/01/13 200 191
-------
341
-------
TOTAL CORPORATE OBLIGATIONS
(Cost $4,521)
4,401
-------
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS - 4.0%
- --------------------------------------------------------------------------------
U.S. Treasury Bonds (A)
8.125%, 08/15/19 160 206
7.250%, 05/15/16 550 646
7.125%, 02/15/23 100 122
U.S. Treasury Inflation Index Note (A)
3.000%, 07/15/12 723 742
-------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $1,730)
1,716
-------
- -------------------------------------------------------------------------------
MASTER NOTE - 2.9%
- -------------------------------------------------------------------------------
Bear Stearns (B)
5.575%, 08/01/07 1,250 1,250
-------
TOTAL MASTER NOTE
(Cost $1,250)
1,250
-------
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - 2.6%
- --------------------------------------------------------------------------------
CenterPoint Energy Transition Bond Co. II,
Ser A, Cl A3
5.090%, 02/01/14 225 221
Citibank Credit Card Master Trust,
Ser 1999-2, Cl A
5.875%, 03/10/11 350 354
MBNA Credit Card Master Note Trust,
Ser 2005-A7, Cl A7
4.300%, 02/15/11 250 248
PG&E Energy Recovery Funding,
Ser 2005-2, Cl A2
5.030%, 03/25/14 200 199
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
WWW.HIGHMARKFUNDS.COM 45
- --------------------------------------------------------------------------------
[HIGHMARK FUNDS LOGO OMITTED](R)
[MOUNTAIN RANGE GRAPHIC OMITTED]
SCHEDULE OF INVESTMENTS
JULY 31, 2007
BALANCED FUND (CONCLUDED)
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - (CONTINUED)
- --------------------------------------------------------------------------------
TXU Electric Delivery Transition,
Ser 2004-1, Cl A3
5.290%, 05/15/18 $ 120 $ 118
-------
TOTAL ASSET-BACKED SECURITIES
(Cost $1,146)
1,140
-------
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 1.1%
- --------------------------------------------------------------------------------
FHLMC
4.500%, 01/15/14 100 $ 96
FNMA
5.000%, 04/15/15 200 197
3.250%, 11/15/07 200 199
-------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $499)
492
-------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 20.3%
- --------------------------------------------------------------------------------
Bank of America (B)
5.430%, dated 07/31/07, matures on
08/01/07, repurchase price $5,267,532
(collateralized by portions of various
corporate obligations, ranging in par
value from $1,926,251 - $13,723,430,
3.950% - 7.000%, 04/01/08 - 03/15/12,
total market value $5,530,332) 5,267 5,267
Bear Stearns (B)
5.450%, dated 07/31/07, matures on
08/01/07, repurchase price $1,000,024
(collateralized by portions of various
corporate obligations, ranging in par
value from $365,739 - $2,605,679,
0.000% - 6.100%, 01/25/33 - 09/25/37,
total market value $1,050,049) 1,000 1,000
Deutsche Bank Securities
5.120%, dated 07/31/07, matures
08/01/07, repurchase price $1,467,190
(collateralized by a U.S. Government
obligation, par value $1,223,000, 6.625%,
02/15/27, total market value $1,497,392) 1,467 1,467
Lehman Brothers (B)
5.425%, dated 07/31/07, matures on
08/01/07, repurchase price $1,100,166
(collateralized by a mortgage obligation,
par value $1,239,269, 6.020%, 10/20/46,
total market value $1,122,281) 1,100 1,100
-------
TOTAL REPURCHASE AGREEMENTS
(Cost $8,834)
8,834
-------
TOTAL INVESTMENTS - 119.8%
(Cost $46,990) $52,060
=======
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PERCENTAGES ARE BASED ON NET ASSETS OF $43,456 (000).
INDUSTRY CLASSIFICATIONS ARE UNAUDITED.
* NON-INCOME PRODUCING SECURITY.
+ NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING.
(A) THIS SECURITY OR PARTIAL POSITION OF THIS SECURITY IS ON LOAN AT JULY 31,
2007.THE TOTAL VALUE OF SECURITIES ON LOAN AT JULY 31, 2007 IS $8,267
(000).
(B) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES
LENDING.
ADR -- AMERICAN DEPOSITARY RECEIPT
CL -- CLASS
CMO -- COLLATERALIZED MORTGAGE OBLIGATION
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
MTN -- MEDIUM TERM NOTE
REMIC -- REAL ESTATE MORTGAGE INVESTMENT CONDUIT
SER -- SERIES
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
46 1.800.433.6884
- --------------------------------------------------------------------------------
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
COGNITIVE VALUE FUND
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - 96.8%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 14.7%
Aftermarket Technology* 23,600 $ 716
Alloy* 23,500 221
Avatar Holdings (A)* 4,000 260
Buckle 9,700 339
California Coastal Communities (A) 13,800 245
Cato, Cl A 21,300 440
DEB Shops (A) 17,400 451
DeVry 19,900 645
Dorman Products* 19,580 273
Dress Barn (A)* 26,900 489
Factory Card & Party Outlet (A)* 23,900 176
G-III Apparel Group (A)* 17,700 285
Harris Interactive* 48,300 216
Hayes Lemmerz International* 51,100 245
Insight Enterprises* 20,100 454
Interactive Data (A) 23,500 643
International Speedway, Cl A 7,300 350
Jack in the Box* 5,000 320
Keystone Automotive Industries* 7,300 341
Kirkland's (A)* 32,900 73
Lacrosse Footwear 20,100 359
Lakeland Industries* 22,185 296
Luby's* 75,600 758
McCormick & Schmick's
Seafood Restaurants (A)* 10,400 254
Movado Group 20,000 565
Navarre (A)* 77,100 308
PC Mall (A)* 26,800 357
Phillips-Van Heusen (A) 16,600 864
RC2* 12,000 425
Sauer-Danfoss (A) 18,200 496
Sonic Automotive, Cl A (A) 25,300 693
Stage Stores 12,750 227
Steiner Leisure* 7,000 293
Steven Madden (A) 11,800 333
Traffix 51,700 297
UniFirst (A) 7,000 263
Universal Electronics* 21,200 747
Virco Manufacturing* 47,900 314
Wolverine World Wide 26,400 714
World Wrestling Entertainment, Cl A 24,800 372
-----------
16,117
-----------
CONSUMER STAPLES - 4.5%
Casey's General Stores 18,900 471
Corn Products International 14,100 629
Flowers Foods 15,750 323
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
CONSUMER STAPLES - (CONTINUED)
Hain Celestial Group (A)* 11,300 $ 306
J&J Snack Foods 22,500 775
National Beverage (A)* 32,880 329
Oil-Dri Corp of America 17,600 294
Performance Food Group* 13,500 387
PriceSmart (A) 25,500 577
Schiff Nutrition International* 42,300 317
Seaboard 100 200
WD-40 (A) 10,800 358
-----------
4,966
-----------
ENERGY - 6.2%
Adams Resources & Energy 10,300 254
Basic Energy Services (A)* 23,200 488
General Maritime (A) 11,700 304
Global Industries* 17,800 461
Gulfmark Offshore (A)* 11,200 526
Input/Output (A)* 18,700 266
Lufkin Industries (A) 8,800 521
NATCO Group, Cl A* 9,900 458
Newpark Resources* 61,700 391
Plains Exploration & Production* 15,300 661
Rosetta Resources* 26,200 472
Royale Energy 81,000 311
SEACOR Holdings* 5,900 515
T-3 Energy Services* 23,900 829
World Fuel Services (A) 7,500 307
-----------
6,764
-----------
FINANCIALS - 19.3%
ACA Capital Holdings (A)* 24,800 145
Advanta, Cl B 8,700 223
Agree Realty REIT 16,000 466
AmCOMP* 22,500 189
Ameris Bancorp (A) 11,800 211
Amerisafe* 15,000 252
AmeriServ Financial (A)* 51,000 192
Argonaut Group (A) 22,200 611
Ashford Hospitality Trust REIT (A) 24,100 246
Bancorp (A)* 18,700 346
Bancorpsouth (A) 12,200 285
BancTrust Financial Group (A) 10,400 182
Bank of Granite 13,825 188
Bank of Marin Bancorp 7,700 245
BankUnited Financial, Cl A (A) 7,400 125
Banner (A) 10,500 321
Cash America International (A) 18,100 663
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
WWW.HIGHMARKFUNDS.COM 47
- --------------------------------------------------------------------------------
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
COGNITIVE VALUE FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
FINANCIALS - (CONTINUED)
CBL & Associates Properties REIT 8,900 $ 284
Centennial Bank Holdings (A)* 46,500 304
Central Pacific Financial (A) 8,800 248
Citizens (A)* 51,700 261
City Bank (A) 16,900 412
Community Trust Bancorp 8,500 244
Delphi Financial Group, Cl A 18,350 737
Downey Financial (A) 4,700 250
Entertainment Properties Trust REIT 8,300 370
FelCor Lodging Trust REIT 12,300 270
First Niagara Financial Group 16,800 216
FNB (A) 6,800 226
Hallmark Financial Services* 26,800 325
Hanmi Financial 22,000 319
Harleysville Group 20,500 574
Heritage Commerce 12,500 248
Intervest Bancshares 6,700 166
Kite Realty Group Trust REIT 18,100 289
Knight Capital Group, Cl A (A)* 16,200 229
Lakeland Bancorp (A) 18,400 205
LTC Properties REIT (A) 19,700 395
Mercer Insurance Group 15,300 304
MetroCorp Bancshares (A) 11,350 207
MicroFinancial 67,900 428
Mid-America Apartment
Communities REIT (A) 5,000 226
National Bankshares 9,400 187
National Health Investors REIT (A) 17,400 550
National Retail Properties REIT (A) 15,800 342
NewStar Financial (A)* 18,600 228
Nicholas Financial (A)* 20,400 196
NorthStar Realty Finance REIT (A) 24,900 251
Ocwen Financial (A)* 26,800 291
Odyssey Re Holdings 22,900 806
Patriot National Bancorp 10,400 211
Philadelphia Consolidated Holding* 7,500 271
PMC Commercial Trust REIT 17,600 255
Premierwest Bancorp (A) 23,100 283
Primus Guaranty (A)* 26,600 253
Procentury 18,600 260
Provident Bankshares (A) 9,900 284
PS Business Parks REIT (A) 6,000 307
Republic First Bancorp* 22,550 184
Rewards Network (A)* 43,300 163
Riverview Bancorp 20,500 289
Security Bank (A) 16,000 226
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
FINANCIALS - (CONTINUED)
Selective Insurance Group (A) 21,000 $ 431
Specialty Underwriters' Alliance* 26,100 192
Sterling Financial 6,800 154
SWS Group (A) 15,700 277
United America Indemnity, Cl A* 33,300 715
United Security Bancshares (A) 9,200 229
Western Alliance Bancorp (A)* 8,300 218
Whitney Holding (A) 16,200 405
-----------
21,085
-----------
HEALTH CARE - 6.3%
Allied Healthcare International* 100,000 260
Analogic 9,900 657
Cardiodynamics International* 142,702 76
Digirad (A)* 62,200 221
E-Z-EM* 17,900 263
Harvard Bioscience* 50,800 261
HealthTronics* 38,715 154
I-Trax (A)* 86,100 310
Integramed America* 23,750 282
Lannett* 47,000 259
Medical Staffing Network Holdings* 51,300 290
Memry* 118,700 175
Microtek Medical Holdings* 61,000 298
National Healthcare (A) 7,700 402
National Home Health Care 23,300 292
Osteotech* 40,900 293
Parexel International* 12,100 489
PDI* 24,000 264
Pediatric Services of America* 20,900 332
Res-Care* 14,300 278
Savient Pharmaceuticals (A)* 17,900 212
Synovis Life Technologies* 31,200 490
Varian* 5,200 313
-----------
6,871
-----------
INDUSTRIALS - 20.0%
ABM Industries (A) 11,500 289
Accuride* 25,700 363
Aceto 34,700 316
Acuity Brands 18,600 1,099
AirNet Systems* 78,700 270
Ampco-Pittsburgh 12,100 511
Apogee Enterprises 11,700 301
Applied Industrial Technologies 27,900 792
Arkansas Best (A) 7,800 281
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
48 1.800.433.6884
- --------------------------------------------------------------------------------
[MOUNTAIN RANGE GRAPHIC OMITTED]
SCHEDULE OF INVESTMENTS
JULY 31, 2007
COGNITIVE VALUE FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
INDUSTRIALS - (CONTINUED)
Atlas Air Worldwide Holdings (A)* 10,100 $ 548
Belden 10,400 570
CDI (A) 15,400 436
Champion Industries 33,900 223
Comfort Systems USA 75,100 972
Copart* 11,100 312
Curtiss-Wright (A) 10,500 457
EMCOR Group (A)* 33,600 1,206
Ennis 17,200 347
EnPro Industries* 16,700 658
Excel Maritime Carriers 16,500 640
First Consulting Group* 34,600 314
Gardner Denver (A)* 10,800 449
Genesee & Wyoming, Cl A* 11,600 298
Gorman-Rupp (A) 14,300 410
GP Strategies* 31,900 344
Hawk, Cl A* 23,000 336
Integrated Electrical Services (A)* 17,400 464
Interface, Cl A* 27,900 514
Kansas City Southern (A)* 10,900 376
Key Technology* 17,300 482
Lawson Products 8,400 295
Lennox International 20,300 777
Mueller Industries 19,100 704
North American Galvanizing & Coating (A)* 37,050 279
Regal-Beloit 12,100 614
Saia* 19,000 384
Steelcase, Cl A 38,600 672
Thomas & Betts* 9,400 581
Tredegar 20,600 378
URS* 20,700 1,020
Viad 10,100 363
Waste Industries USA 11,400 364
Woodward Governor (A) 15,370 888
-----------
21,897
-----------
INFORMATION TECHNOLOGY - 13.8%
3Com* 66,800 267
Advanced Energy Industries* 23,800 422
Aetrium* 73,700 332
Agilysys 15,600 300
Allied Motion Technologies* 45,800 302
Analysts International* 150,600 247
Arris Group* 18,900 280
Astro-Med 24,300 233
Authorize.Net Holdings* 17,100 296
AVX (A) 33,400 534
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - (CONTINUED)
Cirrus Logic (A)* 47,300 $ 344
Computer Task Group* 61,800 258
Convergys* 17,800 339
Cyberoptics* 21,700 271
DDi* 41,700 315
Dynamics Research* 26,800 350
EMS Technologies (A)* 15,700 345
Forrester Research (A)* 11,000 273
Greenfield Online (A)* 25,700 417
InFocus* 96,900 207
Intest* 64,100 263
KVH Industries (A)* 29,300 258
Littelfuse* 15,000 489
Mantech International, Cl A* 13,600 444
Mediware Information Systems* 31,600 222
Micros Systems* 4,900 261
MKS Instruments (A)* 20,200 459
Netscout Systems* 29,600 287
Network Engines* 130,400 286
NU Horizons Electronics (A)* 23,500 244
Park Electrochemical (A) 14,300 424
PC-Tel* 28,200 230
Pegasystems (A) 28,100 296
Performance Technologies* 48,200 245
Silicon Storage Technology* 76,700 278
Superior Essex (A)* 17,500 610
Sybase* 19,300 458
Technitrol 19,900 517
Tessco Technologies* 13,100 262
United Online 24,200 342
Varian Semiconductor Equipment
Associates* 13,500 635
Viasat* 9,500 272
Virage Logic (A)* 28,600 208
Westell Technologies, Cl A* 108,100 278
White Electronic Designs* 44,900 261
Zarlink Semiconductor (A) 136,000 204
-----------
15,065
-----------
MATERIALS - 7.8%
Arch Chemicals (A) 20,400 722
Cabot 6,200 250
Carpenter Technology 4,700 558
Chaparral Steel 14,100 1,185
Commercial Metals 17,400 537
Core Molding Technologies* 34,500 277
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
WWW.HIGHMARKFUNDS.COM 49
- --------------------------------------------------------------------------------
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[MOUNTAIN RANGE GRAPHIC OMITTED]
SCHEDULE OF INVESTMENTS
JULY 31, 2007
COGNITIVE VALUE FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Shares/Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
MATERIALS - (CONTINUED)
FMC 7,900 $ 704
HB Fuller (A) 24,300 671
ICO* 26,800 269
Innospec 23,200 639
Massey Energy 12,800 273
Metalico (A)* 55,400 460
Rock-Tenn, Cl A 11,200 344
RPM International 32,100 755
Spartech 15,000 331
Stepan 10,400 287
UFP Technologies* 49,800 246
-----------
8,508
-----------
TELECOMMUNICATIONS - 0.5%
Atlantic Tele-Network 9,986 291
USA Mobility (A) 10,000 239
-----------
530
-----------
UTILITIES - 3.7%
Allete (A) 11,500 504
Atmos Energy (A) 24,200 679
Avista 35,800 710
El Paso Electric* 23,300 542
Energen 5,200 275
Laclede Group (A) 21,400 633
Southern Union 24,541 758
-----------
4,101
-----------
TOTAL COMMON STOCK
(Cost $97,985) 105,904
-----------
- --------------------------------------------------------------------------------
MASTER NOTES - 4.6%
- --------------------------------------------------------------------------------
Bear Stearns (B)
5.575%, 08/01/07 $2,500 2,500
JPMorgan (B)
5.455%, 08/15/07 2,500 2,500
-----------
TOTAL MASTER NOTES
(Cost $5,000) 5,000
-----------
- --------------------------------------------------------------------------------
Description Shares/Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES - 2.3%
- --------------------------------------------------------------------------------
iShares Russell 2000
Value Index Fund ETF (A)* 14,200 $ 1,065
iShares S&P SmallCap 600
Value Index Fund ETF (A)* 13,700 1,022
Rydex S&P Smallcap 600
Pure Value ETF (A)* 10,500 418
-----------
TOTAL REGISTERED INVESTMENT COMPANIES
(Cost $1,937) 2,505
-----------
- --------------------------------------------------------------------------------
COMMERCIAL PAPER - 2.3%
- --------------------------------------------------------------------------------
Autobahn Funding (B) (C)
5.501%, 08/01/07 $2,500 2,500
-----------
TOTAL COMMERCIAL PAPER
(Cost $2,500) 2,500
-----------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATION - 2.3%
- --------------------------------------------------------------------------------
Liquid Funding LLC (B) (D)
5.350%, 11/30/07 2,500 2,499
-----------
TOTAL CORPORATE OBLIGATION
(Cost $2,499) 2,499
-----------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 17.5%
- --------------------------------------------------------------------------------
Bank of America (B)
5.430%, dated 07/31/07, matures on
08/01/07, repurchase price $9,610,376
(collateralized by portions of various
corporate obligations, ranging in par
value from $3,514,359 - $25,037,782,
3.950% - 7.000%, 04/01/08 - 03/15/12,
total market value $10,089,843) 9,609 9,609
Bear Stearns (B)
5.425%, dated 07/31/07, matures on
08/01/07, repurchase price $5,000,590
(collateralized by portions of various
corporate obligations, ranging in par
value from $1,828,695 - $13,028,397,
0.000% - 6.100%,01/25/33 - 09/25/37,
total market value $5,250,245) 5,000 5,000
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
50 1.800.433.6884
- --------------------------------------------------------------------------------
[MOUNTAIN RANGE GRAPHIC OMITTED]
SCHEDULE OF INVESTMENTS
JULY 31, 2007
COGNITIVE VALUE FUND (CONCLUDED)
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - (CONTINUED)
- --------------------------------------------------------------------------------
Bear Stearns (B)
5.450%, dated 07/31/07, matures on
08/01/07, repurchase price $4,000,494
(collateralized by portions of various
corporate obligations, ranging in par
value from $1,462,956 - $10,422,718,
0.000% - 6.100%, 01/25/33 - 09/25/37,
total market value $4,200,196) $4,000 $ 4,000
Deutsche Bank Securities
5.120%, dated 07/31/07, matures 08/01/07,
repurchase price $510,350 (collateralized
by a U.S. Governement obligation, par
value $530,000, 3.875%, 07/15/10, total
market value $521,326) 510 510
-----------
TOTAL REPURCHASE AGREEMENTS
(Cost $19,119) 19,119
-----------
TOTAL INVESTMENTS - 125.8%
(Cost $129,040) $ 137,527
===========
- --------------------------------------------------------------------------------
PERCENTAGES ARE BASED ON NET ASSETS OF $109,362 (000).
INDUSTRY CLASSIFICATIONS ARE UNAUDITED.
* NON-INCOME PRODUCING SECURITY.
+ NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING.
(A) THIS SECURITY OR PARTIAL POSITION OF THIS SECURITY IS ON LOAN AT JULY 31,
2007. THE TOTAL VALUE OF SECURITIES ON LOAN AT JULY 31, 2007 IS $27,171
(000).
(B) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES
LENDING.
(C) SECURITY SOLD WITHIN THE TERMS OF A PRIVATE PLACEMENT MEMORANDUM, EXEMPT
FROM REGISTRATION UNDER SECTION 3A-4, 4(2) OR 144A OF THE SECURITIES ACT
OF 1933 AS AMENDED, AND MAY BE SOLD ONLY TO THE DEALERS IN THAT PROGRAM OR
OTHER "ACCREDITED INVESTORS." THE VALUE OF THIS SECURITY AS OF JULY 31,
2007 WAS $2,500 (000) AND REPRESENTED 2.3% OF NET ASSETS.
(D) FLOATING RATE SECURITY. RATE DISCLOSED IS AS OF JULY 31, 2007.
CL -- CLASS
ETF -- EXCHANGE TRADED FUND
LLC -- LIMITED LIABILITY COMPANY
REIT -- REAL ESTATE INVESTMENT TRUST
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
WWW.HIGHMARKFUNDS.COM 51
- --------------------------------------------------------------------------------
[HIGHMARK FUNDS LOGO OMITTED](R)
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
CORE EQUITY FUND
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - 99.2%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 9.7%
Brunswick (A) 70,400 $ 1,968
Carnival (A) 12,900 572
Gannett 54,400 2,714
Home Depot 67,795 2,520
Johnson Controls 9,400 1,064
KB Home 12,700 404
Leggett & Platt 70,200 1,455
Liz Claiborne (A) 24,400 857
Ryland Group (A) 7,900 263
Target 12,800 775
Walt Disney 28,300 934
--------
13,526
--------
CONSUMER STAPLES - 9.0%
ConAgra Foods 65,700 1,665
Dean Foods 49,500 1,424
Estee Lauder, Cl A 9,500 428
Kimberly-Clark 27,305 1,837
Kroger (A) 44,500 1,155
Pepsi Bottling Group 77,200 2,583
Safeway 78,400 2,499
Wal-Mart Stores 21,000 965
--------
12,556
--------
ENERGY - 9.7%
BJ Services 19,900 520
Chevron 55,900 4,766
ConocoPhillips 40,930 3,309
Marathon Oil 31,800 1,755
Nabors Industries* 87,300 2,553
Valero Energy 8,700 583
--------
13,486
--------
FINANCIALS - 19.0%
Allstate (A) 57,000 3,030
American International Group 28,000 1,797
Assurant (A) 24,700 1,253
Bank of America 56,480 2,678
CIT Group 53,400 2,199
Citigroup 22,448 1,045
Goldman Sachs Group 18,110 3,411
JPMorgan Chase 58,420 2,571
MGIC Investment (A) 8,300 321
Morgan Stanley 49,600 3,168
National City (A) 22,400 658
Safeco (A) 23,300 1,362
Wells Fargo 14,500 490
XL Capital, Cl A 31,100 2,421
--------
26,404
--------
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
HEALTH CARE - 10.7%
Amgen* 17,700 $ 951
Cardinal Health 16,600 1,091
Charles River Laboratories
International* 8,000 409
CIGNA 11,000 568
Johnson & Johnson 25,700 1,555
King Pharmaceuticals* 113,500 1,931
McKesson 6,500 375
Mylan Laboratories 49,500 794
Pfizer 194,709 4,578
Quest Diagnostics (A) 12,700 704
Universal Health Services, Cl B 37,900 1,988
--------
14,944
--------
INDUSTRIALS - 12.4%
3M 16,300 1,450
General Electric 72,455 2,808
Honeywell International 5,300 305
L-3 Communications Holdings 6,000 585
Lockheed Martin 10,100 995
Northrop Grumman 52,160 3,969
Parker Hannifin 42,700 4,214
Ryder System 55,000 2,990
--------
17,316
--------
INFORMATION TECHNOLOGY - 18.2%
ADC Telecommunications (A)* 84,400 1,577
Affiliated Computer Services, Cl A* 18,400 987
Applied Materials 143,900 3,172
Computer Sciences* 31,600 1,760
EMC* 195,100 3,611
Intel 125,540 2,965
International Business Machines 23,360 2,585
Lexmark International, Cl A* 23,100 913
Microsoft 51,025 1,479
Molex 10,500 298
STMicroelectronics++ (A) 99,100 1,701
Symantec* 131,600 2,527
Teradyne (A)* 111,500 1,749
--------
25,324
--------
MATERIALS - 4.5%
Alcoa 46,840 1,789
Dow Chemical 31,200 1,357
Freeport-McMoRan Copper & Gold 13,400 1,259
International Paper 22,600 838
PPG Industries 14,000 1,068
--------
6,311
--------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
52 1.800.433.6884
- --------------------------------------------------------------------------------
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
CORE EQUITY FUND (CONCLUDED)
- --------------------------------------------------------------------------------
Description Shares/Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - 3.5%
Telefonos de Mexico, Cl L ADR 16,500 $ 564
Verizon Communications 101,900 4,343
--------
4,907
--------
UTILITIES - 2.5%
DTE Energy 37,800 1,753
NiSource 15,700 299
Pinnacle West Capital 25,200 945
Progress Energy (A) 11,400 498
--------
3,495
--------
TOTAL COMMON STOCK
(Cost $132,159) 138,269
--------
- --------------------------------------------------------------------------------
MASTER NOTES - 5.4%
- --------------------------------------------------------------------------------
Bear Stearns (B)
5.575%, 08/01/07 $ 5,000 5,000
JPMorgan (B)
5.455%, 08/15/07 2,500 2,500
--------
TOTAL MASTER NOTES
(Cost $7,500) 7,500
--------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATION - 1.8%
- --------------------------------------------------------------------------------
Liquid Funding LLC (B) (C)
5.399%, 06/11/08 2,500 2,500
--------
TOTAL CORPORATE OBLIGATION
(Cost $2,499) 2,500
--------
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 1.8%
- --------------------------------------------------------------------------------
Bank of America (B)
5.430%, dated
07/31/07, matures on 08/01/07,
repurchase price $1,753,706
(collateralized by portions of various
corporate obligations, ranging in par
value from $641,302 - $4,568,908,
3.950% - 7.000%, 04/01/08 - 03/15/12,
total market value $1,841,200) $ 1,753 $ 1,753
Deutsche Bank Securities
5.120%, dated 07/31/07, matures
08/01/07, repurchase price $755,894
(collateralized by a U.S. Government
obligation, par value $784,000, 3.875%,
07/15/10, total market value $771,170) 756 756
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $2,509) 2,509
--------
TOTAL INVESTMENTS - 108.2%
(Cost $144,667) $150,778
========
- --------------------------------------------------------------------------------
PERCENTAGES ARE BASED ON NET ASSETS OF $139,404 (000).
INDUSTRY CLASSIFICATIONS ARE UNAUDITED.
* NON-INCOME PRODUCING SECURITY.
+ NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING.
++ COMPANY IS DOMICILED OUTSIDE THE UNITED STATES. THE SECURITY'S FUNCTIONAL
CURRENCY IS THE UNITED STATES DOLLAR.
(A) THIS SECURITY OR PARTIAL POSITION OF THIS SECURITY IS ON LOAN AT JULY 31,
2007. THE TOTAL VALUE OF SECURITIES ON LOAN AT JULY 31, 2007 IS $11,186
(000).
(B) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES
LENDING.
(C) FLOATING RATE SECURITY. RATE DISCLOSED IS AS OF JULY 31, 2007.
ADR -- AMERICAN DEPOSITARY RECEIPT
CL -- CLASS
LLC -- LIMITED LIABILITY COMPANY
Futures -- A summary of the open futures contracts held by the Fund at July 31,
2007, is as follows:
TYPE OF NUMBER OF EXPIRATION UNREALIZED
CONTRACT CONTRACTS DATE DEPRECIATION (000)
- --------------------------------------------------------------------------------
S&P 500 Index 5 September 2007 $25
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
WWW.HIGHMARKFUNDS.COM 53
- --------------------------------------------------------------------------------
[HIGHMARK FUNDS LOGO OMITTED](R)
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
ENHANCED GROWTH FUND
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - 96.6%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 2.1%
Comcast, Cl A* 30,000 $ 788
Garmin (A)++ 18,400 1,544
IAC/InterActive* 18,250 524
--------
2,856
--------
HEALTH CARE - 10.0%
Alcon++ 6,800 928
Allergan 14,000 814
Amylin Pharmaceuticals (A)* 11,700 544
Applera Corp - Applied Biosystems
Group 7,000 219
Biogen Idec* 9,800 554
BioMarin Pharmaceuticals (A)* 50,000 903
Celgene (A)* 15,900 963
Cephalon (A)* 9,000 676
Cerner (A)* 14,100 745
Eli Lilly 16,500 892
Genentech* 4,000 298
Genzyme* 14,000 883
Gilead Sciences* 14,600 544
Hologic (A)* 9,000 466
Invitrogen (A)* 8,500 610
Medicines (A)* 27,000 430
MGI Pharma* 9,700 243
NuVasive (A)* 12,000 344
SuperGen (A)* 100,000 601
Teva Pharmaceutical Industries ADR* 7,500 315
Thermo Fisher Scientific* 17,000 888
Trizetto Group* 60,200 965
--------
13,825
--------
INDUSTRIALS - 0.7%
Monster Worldwide* 18,400 716
Superior Essex (A)* 7,000 244
--------
960
--------
INFORMATION TECHNOLOGY - 81.6%
Adobe Systems* 50,000 2,014
Advanced Energy Industries* 18,600 329
Advanced Micro Devices (A)* 30,150 408
Akamai Technologies* 25,050 851
Altera 53,000 1,230
Amdocs++* 34,900 1,263
Amkor Technology* 29,250 362
Analog Devices 29,800 1,056
Anixter International (A)* 4,550 376
Apple* 42,450 5,593
Applied Materials 85,000 1,873
Arrow Electronics* 14,000 535
ASML Holding++* 47,000 1,389
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK -(CONTINUED)+
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - (CONTINUED)
Autodesk* 10,000 $ 424
Automatic Data Processing 29,800 1,383
Avnet (A)* 20,100 761
BEA Systems* 41,400 513
Broadcom, Cl A* 50,000 1,640
Cadence Design Systems* 41,900 897
CDW* 8,000 673
Check Point Software Technologies* 28,500 694
Checkfree (A)* 16,900 623
Cisco Systems* 159,700 4,617
Citrix Systems* 10,000 362
Cognizant Technology Solutions, Cl A* 25,900 2,097
Cognos++* 17,600 706
CommScope* 7,400 403
Comverse Technology* 42,000 809
Corning 107,000 2,551
Dell* 35,400 990
eBay* 45,000 1,458
Electronic Arts* 28,000 1,362
EMC* 149,000 2,758
F5 Networks* 8,000 694
First Data 20,600 655
Fiserv* 14,000 692
Flextronics International* 62,000 693
Formfactor* 26,600 1,021
GigaMedia* 20,200 218
Google, Cl A* 10,800 5,508
Harris 9,150 502
Hewlett-Packard 90,400 4,161
Immersion (A)* 22,000 343
Intel 80,000 1,890
International Business Machines 23,250 2,573
Intersil, Cl A 32,300 945
Intevac* 16,000 260
Intuit* 21,750 623
Juniper Networks* 70,000 2,097
Kla-Tencor (A) 25,000 1,420
Lam Research* 25,900 1,498
Linear Technology (A) 33,000 1,176
Marvel Technology Group++* 95,000 1,710
Maxim Integrated Products 43,300 1,373
McAfee* 32,500 1,165
MEMC Electronic Materials* 32,050 1,965
Microchip Technology (A) 18,000 654
Microsoft 129,950 3,767
Motorola 45,350 770
National Semiconductor 34,300 891
Network Appliance* 39,700 1,125
Nokia ADR 85,600 2,452
Novellus Systems* 6,300 180
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
54 1.800.433.6884
- --------------------------------------------------------------------------------
[MOUNTAIN RANGE GRAPHIC OMITTED]
SCHEDULE OF INVESTMENTS
JULY 31, 2007
ENHANCED GROWTH FUND (CONCLUDED)
- --------------------------------------------------------------------------------
Description Shares/Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK -(CONTINUED)+
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - (CONTINUED)
Nvidia* 34,950 $ 1,599
ON Semiconductor* 30,500 361
Oracle* 118,800 2,271
Paychex 17,900 741
Qualcomm 63,900 2,661
Quality Systems (A) 13,900 538
Red Hat* 37,700 785
Research In Motion* 12,000 2,568
Salesforce.com* 15,750 612
Samsung Electronics GDR (C)* 3,000 996
SanDisk* 16,250 871
SAP ADR (A)* 25,400 1,370
Siliconware Precision Industries ADR (A)* 94,070 907
Symantec* 42,710 820
Taiwan Semiconductor
Manufacturing ADR* 95,762 972
Technitrol 10,000 260
Tellabs* 38,900 442
Tessera Technologies* 8,450 348
Texas Instruments 55,500 1,953
Varian Semiconductor Equipment
Associates* 14,700 691
VeriSign* 38,400 1,140
Wipro, ADR (A) 30,200 441
Xilinx 50,800 1,270
Yahoo!* 83,250 1,936
--------
112,574
--------
TELECOMMUNICATIONS - 2.2%
American Tower, Cl A* 26,800 1,116
Millicom International Cellular (A)* 8,950 719
NII Holdings* 14,900 1,252
--------
3,087
--------
TOTAL COMMON STOCK
(Cost $101,580) 133,302
--------
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES - 2.4%
- --------------------------------------------------------------------------------
iShares Dow Jones US
Pharmaceuticals Index (A) 10,000 525
Powershares QQQ (A) 58,200 2,762
--------
TOTAL REGISTERED INVESTMENT COMPANIES
(Cost $3,200) 3,287
--------
- --------------------------------------------------------------------------------
MASTER NOTE - 1.8%
- --------------------------------------------------------------------------------
Bear Stearns (B)
5.575%, 08/01/07 $ 2,500 2,500
--------
TOTAL MASTER NOTE
(Cost $2,500) 2,500
--------
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 11.6%
- --------------------------------------------------------------------------------
Bank of America (B)
5.430%, dated 07/31/07, matures on
08/01/07, repurchase price $4,626,476
(collateralized by portions of various
corporate obligations, ranging in par
value from $1,691,827 - $12,053,295,
3.950% - 7.000%, 04/01/08 - 03/15/12,
total market value $4,857,293) $ 4,626 $ 4,626
Bear Stearns (B)
5.425%, dated 07/31/07, matures on
08/01/07, repurchase price $5,000,590
(collateralized by portions of various
corporate obligations, ranging in par
value from $1,828,695 - $13,028,397,
0.000% - 6.100%, 01/25/33 - 09/25/37,
total market value $5,250,245) 5,000 5,000
Bear Stearns (B)
5.450%, dated 07/31/07, matures on
08/01/07, repurchase price $5,000,618
(collateralized by various corporate
obligations, ranging in par value from
$1,828,695 - $13,028,397, 0.000% -
6.100%, 01/25/33 - 09/25/37, total
market value $5,250,245) 5,000 5,000
Deutsche Bank Securities
5.120%, dated 07/31/07, matures
08/01/07, repurchase price $1,436,735
(collateralized by a U.S. Government
obligation, par value $1,490,000,
3.875, 07/15/10, total market value
$1,465,616) 1,437 1,437
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $16,063) 16,063
--------
TOTAL INVESTMENTS - 112.4%
(Cost $123,343) $155,152
========
- --------------------------------------------------------------------------------
PERCENTAGES ARE BASED ON NET ASSETS OF $138,047 (000).
INDUSTRY CLASSIFICATIONS ARE UNAUDITED.
* NON-INCOME PRODUCING SECURITY.
+ NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING.
++ COMPANY IS DOMICILED OUTSIDE THE UNITED STATES. THE SECURITY'S FUNCTIONAL
CURRENCY IS THE UNITED STATES DOLLAR.
(A) THIS SECURITY OR PARTIAL POSITION OF THIS SECURITY IS ON LOAN AT JULY 31,
2007. THE TOTAL VALUE OF SECURITIES ON LOAN AT JULY 31, 2007 IS $16,317
(000).
(B) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES
LENDING.
(C) SECURITY SOLD WITHIN THE TERMS OF A PRIVATE PLACEMENT MEMORANDUM, EXEMPT
FROM REGISTRATION UNDER SECTION 3A-4, 4(2) OR 144A OF THE SECURITIES ACT
OF 1933 AS AMENDED, AND MAY BE SOLD ONLY TO THE DEALERS IN THAT PROGRAM OR
OTHER "ACCREDITED INVESTORS." THE VALUE OF THIS SECURITY, AS OF JULY 31,
2007, WAS $996 (000) AND REPRESENTED 0.7% OF NET ASSETS.
ADR -- AMERICAN DEPOSITARY RECEIPT
CL -- CLASS
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
WWW.HIGHMARKFUNDS.COM 55
- --------------------------------------------------------------------------------
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - 96.7%
- --------------------------------------------------------------------------------
AUSTRALIA - 2.2%
Australia & New Zealand Banking
Group^ 21,000 $ 503
BHP Billiton^ 30,128 958
Commonwealth Bank of Australia^ 12,000 550
CSL^ 10,000 748
Incitec Pivot^ 7,000 448
Leighton Holdings^ 17,000 559
Lend Lease^ 25,000 393
Macquarie Bank (A)^ 12,000 827
QBE Insurance Group^ 30,000 757
Woolworths^ 35,000 806
WorleyParsons^ 23,000 657
Zinifex^ 30,000 495
-----------
7,701
-----------
AUSTRIA - 0.5%
Erste Bank der Oesterreichischen
Sparkassen^ 4,000 301
IMMOFINANZ*^ 10,000 126
OMV^ 4,330 269
Telekom Austria^ 9,000 219
Voestalpine^ 5,000 416
Wienerberger*^ 7,000 483
-----------
1,814
-----------
BELGIUM - 1.1%
Bekaert^ 3,000 429
Brederode^ 10,500 440
Delhaize Group^ 5,000 465
Groupe Bruxelles Lambert^ 4,730 575
InBev^ 6,400 515
KBC Groep^ 5,000 651
Umicore^ 3,000 680
-----------
3,755
-----------
BRAZIL - 2.1%
All America Latina Logistica 42,000 575
Banco Bradesco ADR (A) 42,064 1,095
Banco Itau Holding Financeira ADR (A) 21,000 961
Cia Vale do Rio Doce ADR 40,000 1,960
Cosan SA Industria e Comercio 20,000 338
Cyrela Brazil Realty 36,000 426
Gafisa* 18,000 286
Petroleo Brasileiro ADR (A) 26,000 1,687
-----------
7,328
-----------
CANADA - 1.4%
Agnico-Eagle Mines 5,300 226
Agrium 13,000 547
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)
- --------------------------------------------------------------------------------
CANADA - (CONTINUED)
Alcan 5,000 $ 487
Canadian Natural Resources 5,000 343
EnCana 5,000 306
HudBay Minerals* 16,000 392
Niko Resources 4,500 408
Potash Corp of Saskatchewan 11,000 884
Royal Bank of Canada (A) 6,000 304
Suncor Energy 3,000 271
Teck Cominco, Cl B 7,000 311
Toronto-Dominion Bank (A) 4,500 288
-----------
4,767
-----------
CZECH REPUBLIC - 0.1%
CEZ^ 10,500 546
-----------
DENMARK - 0.9%
AP Moeller - Maersk^ 70 924
Danske Bank^ 7,000 295
DSV^ 12,000 269
FLSmidth^ 4,000 352
Novo Nordisk^ 7,000 735
Vestas Wind Systems*^ 11,000 729
-----------
3,304
-----------
FINLAND - 1.3%
Metso^ 17,000 1,076
Nokia ADR 100,000 2,864
Sampo, Cl A^ 25,000 750
-----------
4,690
-----------
FRANCE - 9.3%
Air Liquide^ 5,000 647
Alcatel-Lucent^ 45,000 525
AXA^ 39,311 1,534
BNP Paribas^ 17,780 1,954
Bouygues^ 15,000 1,201
Cap Gemini^ 14,000 920
Carrefour^ 14,000 993
Cie Generale de
Geophysique-Veritas*^ 4,000 1,010
Compagnie Generale des
Etablissements Michelin*^ 5,000 660
Credit Agricole^ 15,100 577
Euler Hermes^ 4,500 663
Groupe Danone^ 14,000 1,018
L'Oreal^ 6,000 685
Lafarge^ 5,000 847
LVMH Moet Hennessy Louis Vuitton^ 6,000 670
Natixis (A)^ 22,260 493
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
56 1.800.433.6884
- --------------------------------------------------------------------------------
[MOUNTAIN RANGE GRAPHIC OMITTED]
SCHEDULE OF INVESTMENTS
JULY 31, 2007
INTERNATIONAL OPPORTUNITIES FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)
- --------------------------------------------------------------------------------
FRANCE - (CONTINUED)
Neopost (A)^ 2,800 $ 405
Nexans^ 7,000 1,227
PPR^ 6,000 1,046
Renault^ 6,000 867
Sanofi-Aventis^ 15,746 1,319
Sanofi-Aventis ADR 12,000 501
Schneider Electric (A)^ 6,000 800
Societe Generale^ 11,410 1,961
Societe Immobiliere de Location
pour l'Industrie et le Commerce*^ 2,200 355
Sodexho Alliance^ 17,000 1,122
Suez^ 20,000 1,052
Total^ 42,520 3,348
Unibail-Rodamco^ 2,611 616
Vallourec (A)^ 2,200 569
Veolia Environnement^ 15,750 1,170
Vinci^ 12,000 859
Vivendi*^ 25,500 1,083
-----------
32,697
-----------
GERMANY - 9.2%
Adidas^ 8,000 487
Allianz SE^ 9,590 2,039
BASF^ 10,000 1,293
Bayer^ 20,000 1,416
Bayerische Hypo-und Vereinsbank (A) 15,000 878
Beiersdorf^ 10,000 695
Celesio^ 9,000 541
Commerzbank^ 30,900 1,329
Continental^ 4,000 576
DaimlerChrysler^ 22,000 1,992
Deutsche Bank^ 12,400 1,679
Deutsche Post^ 15,000 438
Deutsche Telekom^ 41,860 722
E.ON^ 15,400 2,423
Fresenius Medical Care*^ 15,000 707
Henkel^ 6,000 294
Hypo Real Estate Holding^ 7,300 446
Infineon Technologies*^ 46,000 758
Lanxess^ 19,500 1,047
MAN^ 12,000 1,734
Metro^ 7,000 543
Muenchener Rueckversicherungs (A)^ 4,000 689
RWE^ 11,000 1,168
SAP^ 20,000 1,083
SGL Carbon*^ 23,333 1,186
Siemens^ 18,000 2,278
ThyssenKrupp^ 43,000 2,379
Volkswagen^ 8,000 1,442
-----------
32,262
-----------
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)
- --------------------------------------------------------------------------------
GREECE - 0.3%
Fourlis Holdings^ 15,000 $ 471
National Bank of Greece^ 11,100 649
-----------
1,120
-----------
HONG KONG - 5.2%
Angang Steel^ 400,000 1,104
Cheung Kong Holdings^ 25,000 351
China Coal Energy*^ 550,000 1,018
China Infrastructure
Machinery Holdings^ 350,000 779
China Life Insurance^ 170,000 733
China Merchants Holdings
International^ 110,000 534
China Mobile^ 110,000 1,264
China Netcom Group^ 100,000 255
China Oilfield Services^ 650,000 937
China Overseas Land & Investment^ 475,000 1,006
China Petroleum & Chemical^ 500,000 531
China Resources Enterprise^ 200,000 792
China Resources Power Holdings^ 340,000 868
China Shenhua Energy^ 227,000 891
China Water Affairs Group*^ 1,000,000 659
Chinese Estates Holdings^ 190,000 345
Citic Pacific^ 130,000 668
Esprit Holdings^ 40,000 535
Hang Lung Properties^ 248,000 912
Hong Kong Exchanges and Clearing^ 52,000 849
Lee & Man Paper Manufacturing^ 250,000 1,066
Li & Fung^ 79,400 275
Shenzhen Investment^ 700,000 598
Sinofert Holdings^ 1,000,000 690
Sun Hung Kai Properties^ 23,000 292
Vtech Holdings^ 40,000 354
-----------
18,306
-----------
HUNGARY - 0.5%
MOL Hungarian Oil and Gas*^ 4,000 616
OTP Bank^ 18,000 1,006
-----------
1,622
-----------
ICELAND - 0.2%
Kaupthing Bank^ 35,000 698
-----------
INDIA - 1.2%
Bharat Heavy Electricals^ 25,000 1,064
Bharti Airtel*^ 39,000 868
ICICI Bank ADR (A) 7,000 310
Jain Irrigation Systems^ 56,000 723
Larsen & Toubro^ 7,000 449
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
WWW.HIGHMARKFUNDS.COM 57
- --------------------------------------------------------------------------------
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[MOUNTAIN RANGE GRAPHIC OMITTED]
SCHEDULE OF INVESTMENTS
JULY 31, 2007
INTERNATIONAL OPPORTUNITIES FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)
- --------------------------------------------------------------------------------
INDIA - (CONTINUED)
Reliance Industries^ 13,000 $ 607
State Bank of India^ 2,000 80
-----------
4,101
-----------
INDONESIA - 0.6%
Bakrie and Brothers*^ 10,000,000 324
Bakrie Telecom*^ 7,000,000 331
Bank Rakyat Indonesia^ 420,000 280
Bumi Resources*^ 2,000,000 575
Ciputra Development*^ 2,412,500 236
Indocement Tunggal Prakarsa^ 400,000 277
Indofood Sukses Makmur^ 1,200,000 255
-----------
2,278
-----------
IRELAND - 0.5%
Allied Irish Banks^ 21,400 558
CRH^ 14,400 640
Irish Life & Permanent^ 20,700 495
-----------
1,693
-----------
ITALY - 2.3%
AEM (A)^ 132,000 436
Assicurazioni Generali^ 19,800 778
Capitalia^ 50,000 471
Enel^ 50,000 516
ENI^ 40,000 1,400
Fiat (A)^ 26,000 765
Intesa Sanpaolo^ 182,763 1,382
Italmobiliare^ 4,000 542
Saipem^ 11,000 393
STMicroelectronics^ 12,000 206
UniCredito Italiano^ 150,000 1,272
-----------
8,161
-----------
JAPAN - 15.0%
Asahi Glass^ 60,000 804
Astellas Pharma^ 15,000 616
Bridgestone^ 40,000 844
Canon^ 24,000 1,269
Daiichi Sankyo^ 25,000 691
Dowa Holdings*^ 50,000 597
FUJIFILM Holdings^ 19,000 832
Fukuoka Financial Group* 100,000 643
Hitachi Construction Machinery^ 22,000 873
Honda Motor^ 50,000 1,816
Ibiden^ 16,000 1,173
IHI*^ 200,000 763
Japan Steel Works*^ 60,000 955
Japan Tobacco^ 150 762
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)
- --------------------------------------------------------------------------------
JAPAN - (CONTINUED)
JFE Holdings^ 20,000 $ 1,372
Juki^ 90,000 779
Kyushu Electric Power^ 22,000 523
Makino Milling Machine^ 65,000 866
Makita^ 23,000 1,063
Marubeni^ 110,000 1,055
Matsushita Electric Industrial^ 53,000 969
Mitsubishi^ 35,000 1,034
Mitsubishi Electric^ 80,000 851
Mitsubishi Heavy Industries^ 160,000 1,124
Mitsui^ 45,000 1,058
Mitsui Engineering & Shipbuilding*^ 150,000 817
Mitsui Fudosan^ 50,000 1,306
Mitsui OSK Lines^ 100,000 1,562
Mizuho Financial Group^ 220 1,550
Mori Seiki^ 18,000 587
NGK Insulators^ 30,000 917
Nikon^ 25,000 792
Nintendo^ 3,000 1,447
Nippon Konpo Unyu Soko^ 40,000 534
Nippon Mining Holdings^ 76,500 769
Nippon Telegraph & Telephone^ 120 522
Nomura Holdings^ 35,000 665
NSK^ 65,000 623
ORIX*^ 4,000 960
Ricoh^ 30,000 650
Sharp^ 50,000 862
Shin-Etsu Chemical^ 12,000 886
Sony^ 20,000 1,068
Sumitomo^ 70,000 1,356
Sumitomo Mitsui Financial Group^ 110 994
Sumitomo Trust & Banking^ 60,000 507
Takeda Pharmaceutical^ 15,000 977
Teijin^ 120,000 652
Toho Pharmaceutical*^ 40,000 660
Tokai Carbon (A)^ 85,000 930
Tokuyama (A)^ 60,000 872
Tokyo Electron^ 15,000 1,081
Toray Industries^ 110,000 877
Toshiba^ 100,000 938
Toyota Motor^ 37,000 2,250
Yamaha Motor^ 26,000 732
-----------
52,675
-----------
LUXEMBURG - 0.4%
Millicom International Cellular (A)* 12,000 964
Tenaris^ 13,000 311
-----------
1,275
-----------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
58 1.800.433.6884
- --------------------------------------------------------------------------------
[MOUNTAIN RANGE GRAPHIC OMITTED]
SCHEDULE OF INVESTMENTS
JULY 31, 2007
INTERNATIONAL OPPORTUNITIES FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)
- --------------------------------------------------------------------------------
MALAYSIA - 0.8%
Digi.com^ 93,000 $ 579
Genting^ 320,000 731
IJM^ 117,000 292
Lafarge Malayan Cement^ 600,000 294
Sime Darby^ 184,000 536
Tanjong^ 97,000 493
--------
2,925
--------
MEXICO - 1.1%
America Movil, Ser L ADR 10,000 599
Carso Global Telecom, Cl A1* 82,000 366
Cemex ADR* 12,226 395
Empresas ICA Sociedad Controladora
ADR (A)* 5,000 378
Grupo Financiero Banorte, Cl O (A) 70,000 316
Grupo Mexico, Ser B 60,000 419
Grupo Televisa ADR 10,400 263
Telefonos de Mexico, Cl L ADR 12,000 410
Urbi Desarrollos Urbanos (A)* 50,000 211
Wal-Mart de Mexico, Ser V 104,200 379
--------
3,736
--------
NETHERLANDS - 5.6%
ABN AMRO Holding^ 30,000 1,480
Aegon^ 43,000 779
Akzo Nobel^ 7,000 576
Arcelor Mittal^ 34,625 2,117
ASML Holding*^ 17,000 501
Fortis^ 32,000 1,262
Fugro*^ 10,000 665
Heineken^ 18,000 1,141
ING Groep (A)^ 60,000 2,533
Koninklijke DSM (A)^ 10,000 517
Koninklijke KPN (A)*^ 43,000 665
Koninklijke Philips Electronics^ 20,020 809
Randstad Holding^ 6,000 388
Royal Dutch Shell, Cl A^ 68,000 2,648
Royal Dutch Shell, Cl A GBP^ 9,000 351
Royal Dutch Shell, Cl B GBP^ 28,733 1,136
Tele Atlas (A)*^ 20,000 565
TNT (A)^ 13,000 558
TomTom (A)*^ 10,000 646
Wolters Kluwer^ 15,000 439
--------
19,776
--------
NORWAY - 1.9%
DnB NOR^ 60,500 797
Norsk Hydro^ 52,500 2,022
Orkla*^ 40,000 752
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)
- --------------------------------------------------------------------------------
NORWAY - (CONTINUED)
ProSafe (A)*^ 35,000 $ 543
Statoil^ 38,000 1,124
Telenor^ 30,000 549
Yara International^ 35,000 931
--------
6,718
--------
PHILIPPINES - 1.1%
Ayala^ 14,040 162
Ayala Land^ 1,175,600 433
Banco de Oro-EPCI^ 350,000 507
Bank of the Philippine Islands^ 103,000 147
EEI*^ 2,600,000 273
Filinvest Land^ 6,200,000 256
Globe Telecom^ 13,100 377
Megaworld^ 5,500,000 458
Metropolitan Bank & Trust*^ 132,000 176
Paxys^ 500,000 193
Philippine Long Distance Telephone^ 5,600 319
SM Investments^ 58,391 519
--------
3,820
--------
POLAND - 0.5%
Bank Pekao^ 5,100 470
Cersanit Krasnystaw*^ 22,000 324
Ciech^ 7,500 393
KGHM Polska Miedz^ 5,000 222
Powszechna Kasa Oszczednosci
Bank Polski^ 19,000 401
--------
1,810
--------
PORTUGAL - 0.4%
Banco Comercial Portugues, Cl R^ 90,000 458
Banco Espirito Santo^ 6,000 141
Brisa-Auto Estradas de Portugal^ 8,000 108
Cimpor Cimentos de Portugal^ 16,000 158
Energias de Portugal^ 60,000 340
Portugal Telecom^ 25,000 350
--------
1,555
--------
RUSSIA - 0.4%
MMC Norilsk Nickel*^ 1,400 308
Mobile Telesystems ADR 5,000 320
Sberbank, Cl S^ 80,000 320
Unified Energy System GDR 2,500 346
--------
1,294
--------
SINGAPORE - 1.9%
CapitaLand^ 120,000 581
City Developments^ 30,000 294
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
INTERNATIONAL OPPORTUNITIES FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)
- --------------------------------------------------------------------------------
SINGAPORE - (CONTINUED)
DBS Group Holdings^ 45,000 $ 673
K-REIT Asia REIT^ 74,000 142
Keppel*^ 106,000 925
Keppel Land^ 73,000 396
SembCorp Industries^ 190,000 708
SembCorp Marine^ 176,000 653
Singapore Exchange^ 102,000 644
Singapore Technologies Engineering^ 200,000 481
Singapore Telecommunications^ 191,900 435
United Overseas Bank^ 38,000 556
UOL Group^ 100,000 349
--------
6,837
--------
SOUTH KOREA - 2.2%
Cheil Industries^ 9,000 521
Daewoo Engineering & Construction^ 19,000 567
Doosan Heavy Industries and
Construction^ 4,000 419
Doosan Infracore^ 12,000 476
Hyundai Engineering & Construction*^ 3,600 312
Hyundai Heavy Industries^ 1,700 656
Hyundai Securities^ 13,000 432
Hyundai Steel^ 10,000 720
Kookmin Bank*^ 4,000 349
Korea Investment Holdings^ 7,000 477
LG.Philips LCD*^ 10,000 466
Samsung Electronics^ 900 594
Samsung Heavy Industries^ 7,700 419
Shinhan Financial Group^ 5,000 338
Shinsegae^ 600 392
SK Energy* 2,130 364
SK Holdings^ 870 163
--------
7,665
--------
SPAIN - 2.4%
ACS Actividades Cons y Serv (A)^ 5,000 296
Banco Bilbao Vizcaya Argentaria^ 19,566 479
Banco Sabadell (A)*^ 50,000 538
Banco Santander Central Hispano (A) 58,000 1,104
Fomento de Construcciones y Contratas^ 5,000 450
Grifols^ 60,000 1,253
Grupo Ferrovial (A)^ 5,000 446
Iberdrola*^ 3,265 182
Inditex (A)^ 12,000 718
Indra Sistemas (A)^ 22,000 571
La Seda de Barcelona (A)^ 150,000 507
Mapfre (A)^ 70,000 324
Repsol YPF (A)^ 14,500 546
Telefonica (A)^ 40,000 936
--------
8,350
--------
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)
- --------------------------------------------------------------------------------
SWEDEN - 2.5%
Alfa Laval, Cl B^ 7,000 $ 440
Electrolux, Cl B^ 14,000 350
Getinge, Cl B^ 20,000 441
Hennes & Mauritz, Cl B^ 10,000 575
Investor, Cl B^ 32,000 828
JM^ 15,000 451
Munters*^ 27,000 455
Nordea Bank^ 40,000 644
Peab^ 17,000 517
Sandvik*^ 41,000 824
Skandinaviska Enskilda Banken, Cl A^ 14,000 479
SSAB Svenskt Stal, Cl A (A)^ 20,000 718
Swedbank^ 12,000 436
Telefonaktiebolaget LM Ericsson, Cl B^ 250,000 936
Volvo, Cl B*^ 40,000 735
--------
8,829
--------
SWITZERLAND - 6.2%
ABB^ 92,000 2,213
Compagnie Financiere Richemont, Cl A^ 10,000 627
Credit Suisse Group^ 24,977 1,629
Holcim^ 7,400 784
Julius Baer Holding^ 22,000 1,539
Lonza Group^ 11,000 1,036
Nestle^ 7,100 2,728
Novartis^ 53,002 2,859
Roche Holding^ 14,333 2,539
Swiss Reinsurance^ 12,500 1,073
Syngenta^ 6,000 1,132
UBS^ 46,974 2,601
Zurich Financial Services^ 3,698 1,078
--------
21,838
--------
THAILAND - 0.8%
Bangkok Bank*^ 120,000 449
Banpu^ 74,000 612
PTT*^ 70,000 643
Siam Cement^ 2,000 16
Thai Oil*^ 200,000 512
Total Access Communication* 400,000 539
--------
2,771
--------
TURKEY - 0.8%
Akbank TAS^ 44,999 301
Ford Otomotiv Sanayi^ 30,000 294
KOC Holding^ 91,770 416
Tupras Turkiye Petrol Rafine^ 15,000 366
Turk Sise ve Cam Fabrikalari^ 80,000 356
Turkiye Garanti Bankasi^ 100,000 680
Turkiye Is Bankasi^ 91,607 492
--------
2,905
--------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
60 1.800.433.6884
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
INTERNATIONAL OPPORTUNITIES FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)
- --------------------------------------------------------------------------------
UNITED KINGDOM - 13.8%
Anglo American^ 28,840 $ 1,675
Antofagasta^ 30,000 437
Arriva^ 25,000 397
AstraZeneca^ 24,085 1,245
Aviva^ 52,000 723
BAE Systems^ 150,000 1,272
Barclays^ 115,000 1,615
BG Group^ 57,000 927
BHP Billiton^ 60,000 1,761
BP^ 190,600 2,208
British Airways*^ 75,000 598
British American Tobacco^ 25,000 808
British Land REIT^ 35,000 873
BT Group^ 90,000 570
Chemring Group^ 15,000 580
Cobham^ 150,000 577
Diageo^ 44,000 899
Enterprise Inns^ 80,800 1,103
G4S^ 175,000 763
GKN^ 55,000 427
GlaxoSmithKline^ 71,044 1,798
HBOS^ 52,800 1,028
Henderson Group^ 156,000 490
HSBC Holdings^ 127,000 2,354
Imperial Chemical Industries^ 75,000 948
Imperial Tobacco Group^ 12,000 526
Informa^ 52,000 553
International Power^ 125,000 1,039
Intertek Group*^ 40,000 794
Investec^ 50,000 619
John Wood Group*^ 130,000 845
Johnson Matthey^ 15,000 515
Lloyds TSB Group^ 57,000 641
Man Group^ 120,000 1,365
Mitchells & Butlers^ 37,317 583
Next^ 17,000 649
Old Mutual^ 300,000 983
Persimmon^ 40,000 936
Prudential^ 46,000 633
Punch Taverns^ 18,000 417
Reckitt Benckiser^ 12,000 642
Rio Tinto (A)^ 22,500 1,663
Rolls-Royce Group^ 60,230 618
Royal Bank of Scotland Group^ 153,600 1,829
Scottish & Southern Energy^ 22,000 643
Tesco^ 170,000 1,396
Travis Perkins^ 15,000 571
Unilever^ 46,850 1,461
- --------------------------------------------------------------------------------
Description Shares/Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)
- --------------------------------------------------------------------------------
UNITED KINGDOM - (CONTINUED)
Vodafone Group^ 653,385 $ 1,964
WPP Group^ 43,000 616
--------
48,577
--------
TOTAL COMMON STOCK
(Cost $237,382) 340,199
--------
- --------------------------------------------------------------------------------
PREFERRED STOCK - 0.7%
- --------------------------------------------------------------------------------
GERMANY - 0.7%
Porsche^ 450 817
ProSiebenSat.1 Media (A)^ 27,000 997
Volkswagen^ 5,000 564
--------
TOTAL PREFERRED STOCK
(Cost $1,474) 2,378
--------
- --------------------------------------------------------------------------------
RIGHTS - 0.0%
- --------------------------------------------------------------------------------
SWEDEN - 0.0%
SSAB Svenskt Stal Abmanufactures,
Expires 08/23/07*^, Strike Price: $155 20,000 69
--------
TOTAL RIGHTS
(Cost $--) 69
--------
- --------------------------------------------------------------------------------
WARRANT - 0.0%
- --------------------------------------------------------------------------------
INDONESIA - 0.0%
Ciputra, Expires 11/30/09*,
Strike Price: $500 468,750 21
--------
TOTAL WARRANT
(Cost $--) 21
--------
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES - 1.5%
- --------------------------------------------------------------------------------
iShares FTSE Xinhua China 25 8,000 1,119
iShares MSCI Brazil Index Fund (A) 17,000 1,081
iShares MSCI Germany Index Fund (A) 18,000 573
iShares MSCI Mexico Index Fund* 18,000 1,058
iShares MSCI South Korea Index Fund (A)* 7,000 462
iShares MSCI United Kingdom Index Fund (A) 40,000 984
--------
TOTAL REGISTERED INVESTMENT COMPANIES
(Cost $5,106) 5,277
--------
- --------------------------------------------------------------------------------
MASTER NOTES - 2.9%
- --------------------------------------------------------------------------------
Bear Stearns (B)
5.575%, 08/01/07 $ 2,500 2,500
JPMorgan (B)
5.455%, 08/15/07 7,500 7,500
--------
TOTAL MASTER NOTES
(Cost $10,000) 10,000
--------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
INTERNATIONAL OPPORTUNITIES FUND (CONCLUDED)
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATION - 0.7%
- --------------------------------------------------------------------------------
Liquid Funding LLC (B) (C)
5.339%, 06/11/08 $ 2,500 $ 2,499
--------
TOTAL CORPORATE OBLIGATION
(Cost $2,499) 2,499
--------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 7.2%
- --------------------------------------------------------------------------------
Bank of America (B)
5.430%, dated 07/31/07, matures on 08/01/07,
repurchase price $9,484,970 (collateralized by
portions of various corporate obligations,
ranging in par value from $3,468,500 -
$24,711,065, 3.950% - 7.000%, 04/01/08 -
03/15/12, total market value $9,958,181) 9,484 9,484
Bear Stearns (B)
5.425%, dated 07/31/07, matures on 08/01/07,
repurchase price $5,000,596 (collateralized by
portions of various corporate obligations,
ranging in par value from $1,828,695 -
$13,028,397, 0.000% - 6.100%, 01/25/33 -
09/25/37, total market value $5,250,245) 5,000 5,000
Bear Stearns (B)
5.450%, dated 07/31/07, matures on 08/01/07,
repurchase price $5,000,618 (collateralized by
portions of various corporate obligations,
ranging in par value from $1,828,695 -
$13,028,397, 0.000% - 6.100%, 01/25/33 -
09/25/37, total market value $5,250,245) 5,000 5,000
Deutsche Bank Securities
5.120%, dated 07/31/07, matures 08/01/07,
repurchase price $5,689,930 (collateralized by
various U.S. Government obligations, ranging in
par value from $183,000 - 3,645,000, 0.000% -
11.750%, total market value $5,803,258) 5,689 5,689
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $25,173) 25,173
--------
TOTAL INVESTMENTS - 109.7%
(Cost $281,634) $385,616
========
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PERCENTAGES ARE BASED ON NET ASSETS OF $351,674 (000).
GEOGRAPHIC CLASSIFICATIONS ARE UNAUDITED.
* NON-INCOME PRODUCING SECURITY.
^ SECURITY FAIR VALUED USING METHODS DETERMINED IN GOOD FAITH BY THE
VALUATION COMMITTEE OF THE BOARD OF TRUSTEES. THE TOTAL VALUE OF THESE
SECURITIES AS OF JULY 31, 2007 IS $317,982 (000).
(A) THIS SECURITY OR PARTIAL POSITION OF THIS SECURITY IS ON LOAN AT JULY 31,
2007. THE TOTAL VALUE OF SECURITIES ON LOAN AT JULY 31, 2007 IS $30,666
(000).
(B) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES
LENDING.
(C) FLOATING RATE SECURITY. RATE DISCLOSED IS AS OF JULY 31, 2007.
ADR -- AMERICAN DEPOSITARY RECEIPT
CL -- CLASS
GBP -- GREAT BRITISH POUND
GDR -- GLOBAL DEPOSITARY RECEIPT
LLC -- LIMITED LIABILITY COMPANY
REIT -- REAL ESTATE INVESTMENT TRUST
SER -- SERIES
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
62 1.800.433.6884
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
LARGE CAP GROWTH FUND
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - 99.5%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 12.1%
Abercrombie & Fitch, Cl A 8,724 $ 610
Coach* 27,075 1,231
Entravision Communications, Cl A* 69,695 652
Harman International Industries 6,699 777
Hilton Hotels 30,153 1,333
International Game Technology 26,081 921
Kohl's* 18,950 1,152
Lamar Advertising, Cl A (A) 30,117 1,793
Las Vegas Sands (A)* 8,932 779
News, Cl A 82,938 1,752
Nordstrom 16,239 773
Staples 45,264 1,042
Starbucks* 36,721 980
Target 23,270 1,409
Tiffany (A) 15,241 735
-----------
15,939
-----------
CONSUMER STAPLES - 13.9%
Altria Group 27,073 1,800
Cadbury Schweppes ADR 18,633 927
Colgate-Palmolive 25,855 1,706
CVS Caremark (A) 47,962 1,688
PepsiCo 49,702 3,261
Procter & Gamble 86,038 5,322
Wal-Mart Stores 51,011 2,344
Walgreen 29,858 1,319
-----------
18,367
-----------
ENERGY - 11.6%
Chevron 25,419 2,167
Exxon Mobil 74,289 6,324
Occidental Petroleum 26,457 1,501
Schlumberger 23,079 2,186
Smith International (A) 32,521 1,997
XTO Energy 19,599 1,069
-----------
15,244
-----------
FINANCIALS - 9.1%
Aflac 15,281 796
American Express 22,956 1,344
American International Group 66,806 4,288
Bank of America 27,400 1,299
Citigroup 34,026 1,584
Goldman Sachs Group 2,855 538
Merrill Lynch 10,871 807
Wells Fargo 37,572 1,269
-----------
11,925
-----------
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
HEALTH CARE - 13.3%
Abbott Laboratories 33,261 $ 1,686
Allergan 30,104 1,750
Charles River Laboratories International* 13,623 697
Eli Lilly (A) 33,848 1,831
Gilead Sciences* 68,750 2,560
Johnson & Johnson 24,848 1,503
Medtronic 40,533 2,054
Merck 23,010 1,142
Novartis ADR 27,646 1,491
Schering-Plough 73,253 2,091
WellPoint* 9,947 747
-----------
17,552
-----------
INDUSTRIALS - 10.5%
Boeing 11,753 1,216
Danaher 16,878 1,261
Emerson Electric 18,866 888
Expeditors International Washington (A) 35,612 1,591
General Electric 136,750 5,300
Rockwell Automation 21,409 1,498
United Technologies 28,121 2,052
-----------
13,806
-----------
INFORMATION TECHNOLOGY - 23.3%
Adobe Systems* 28,797 1,160
Applied Materials 34,659 764
Automatic Data Processing 22,422 1,041
Broadcom, Cl A* 39,753 1,304
Cisco Systems* 215,724 6,237
Corning 42,800 1,020
F5 Networks* 10,576 917
Formfactor* 15,786 606
Google, Cl A* 5,731 2,923
Intel 120,271 2,841
Intersil, Cl A 23,901 699
Maxim Integrated Products 34,646 1,098
Microchip Technology 18,500 672
Microsoft 157,714 4,572
Network Appliance* 23,596 669
Oracle* 53,383 1,021
Paychex 26,994 1,117
Qualcomm 25,724 1,071
Texas Instruments 27,000 950
-----------
30,682
-----------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
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[HIGHMARK FUNDS LOGO OMITTED](R)
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
LARGE CAP GROWTH FUND (CONCLUDED)
- --------------------------------------------------------------------------------
Description Shares/Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
MATERIALS - 2.9%
Monsanto 31,313 $ 2,018
Praxair 24,333 1,865
-----------
3,883
-----------
TELECOMMUNICATIONS - 0.8%
Verizon Communications 25,610 1,092
-----------
UTILITIES - 2.0%
Cleco (A) 54,390 1,292
ITC Holdings (A) 31,436 1,322
-----------
2,614
-----------
TOTAL COMMON STOCK
(Cost $121,065) 131,104
-----------
- --------------------------------------------------------------------------------
MASTER NOTE - 0.9%
- --------------------------------------------------------------------------------
Bear Stearns (B)
5.575%, 08/01/07 $ 1,250 1,250
-----------
TOTAL MASTER NOTE
(Cost $1,250) 1,250
-----------
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 7.5%
- --------------------------------------------------------------------------------
Bank of America (B)
5.430%, dated 07/31/07, matures on
08/01/07, repurchase price $6,499,914
(collateralized by portions of various
corporate obligations, ranging in par
value from $2,376,914 - $16,934,139,
3.950% - 7.000%, 04/01/08 - 03/15/12,
total market value $6,824,199) $ 6,499 $ 6,499
Bear Stearns (B)
5.450%, dated 07/31/07, matures on
08/01/07, repurchase price $2,000,247
(collateralized by portions of various
corporate obligations, ranging in par
value from $731,478 - $5,211,359,
0.000% - 6.100%, 01/25/33 - 09/25/37,
total market value $2,100,098) 2,000 2,000
Deutsche Bank Securities
5.120%, dated 07/31/07, matures
08/01/07, repurchase price $1,410,473
(collateralized by a U.S. Treasury
obligation, par value $1,463,000,
3.875%, 07/15/10, total market
value $1,439,058) 1,410 1,410
-----------
TOTAL REPURCHASE AGREEMENTS
(Cost $9,909)
9,909
-----------
TOTAL INVESTMENTS - 107.9%
(Cost $132,224) $ 142,263
===========
- --------------------------------------------------------------------------------
PERCENTAGES ARE BASED ON NET ASSETS OF $131,816 (000).
INDUSTRY CLASSIFICATIONS ARE UNAUDITED.
* NON-INCOME PRODUCING SECURITY.
+ NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING.
(A) THIS SECURITY OR A PARTIAL POSITION OF THIS SECURITY IS ON LOAN AT JULY
31, 2007. THE TOTAL VALUE OF SECURITIES ON LOAN AT JULY 31, 2007 WAS
$9,452 (000).
(B) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES
LENDING.
ADR -- AMERICAN DEPOSITARY RECEIPT
CL -- CLASS
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
64 1.800.433.6884
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
LARGE CAP VALUE FUND
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - 98.4%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 8.3%
Big Lots (A)* 91,400 $ 2,364
Coach* 72,500 3,296
Darden Restaurants 37,000 1,575
DIRECTV Group* 135,800 3,043
Dollar Tree Stores* 30,100 1,152
EchoStar Communications, Cl A* 7,600 321
Hasbro 111,500 3,124
Jack in the Box (A)* 9,100 582
Kohl's* 21,800 1,326
Magna International, Cl A (A)* 19,200 1,684
Shaw Communications, Cl B 83,800 3,983
Time Warner 337,900 6,508
TRW Automotive Holdings* 80,900 2,659
-----------
31,617
-----------
CONSUMER STAPLES - 6.7%
ConAgra Foods 70,200 1,780
Corn Products International 14,900 665
General Mills 23,900 1,329
JM Smucker 29,600 1,652
Kroger (A) 136,000 3,531
NBTY* 36,500 1,589
Pepsi Bottling Group (A) 83,300 2,787
PepsiCo 55,800 3,662
Procter & Gamble 55,500 3,433
Reynolds American 24,000 1,468
Safeway 80,300 2,559
Tyson Foods, Cl A 47,000 1,001
-----------
25,456
-----------
ENERGY - 14.4%
Chevron 139,800 11,919
ConocoPhillips 87,344 7,061
Exxon Mobil 237,000 20,176
Holly 41,900 2,824
Marathon Oil 103,600 5,719
Sunoco 47,600 3,176
Valero Energy 59,000 3,953
-----------
54,828
-----------
FINANCIALS - 31.6%
Allstate 95,700 5,086
Assurant (A) 41,200 2,090
Axis Capital Holdings 80,300 2,959
Bank of America 90,400 4,287
Brookfield Asset Management, Cl A 84,150 2,957
Chubb 47,300 2,384
CIT Group 3,400 140
Citigroup 287,800 13,403
Comerica 51,700 2,723
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
FINANCIALS - (CONTINUED)
Countrywide Financial (A) 118,100 $ 3,327
Credicorp 15,200 978
Everest Re Group 26,300 2,584
Franklin Resources 11,800 1,503
Goldman Sachs Group 30,000 5,650
Jones Lang LaSalle 25,200 2,766
JPMorgan Chase 259,500 11,421
Keycorp 87,300 3,028
Lehman Brothers Holdings 48,500 3,007
Loews 99,800 4,731
Merrill Lynch 82,500 6,122
Morgan Stanley 91,500 5,844
PartnerRe 30,500 2,166
PMI Group 77,700 2,647
Principal Financial Group 29,200 1,647
Safeco (A) 45,100 2,637
Travelers 106,200 5,393
Wachovia 106,600 5,033
Washington Mutual 127,000 4,766
Wells Fargo 256,800 8,672
-----------
119,951
-----------
HEALTH CARE - 7.6%
Aetna 92,300 4,437
AmerisourceBergen (A) 66,300 3,123
Biovail* 32,200 615
Cardinal Health 22,100 1,453
Cigna 66,200 3,418
Invitrogen* 14,300 1,027
McKesson 41,700 2,409
Pfizer 467,900 11,000
WellPoint* 18,500 1,390
-----------
28,872
-----------
INDUSTRIALS - 9.8%
Boeing 17,700 1,831
Caterpillar 34,600 2,727
Cummins 24,400 2,896
Dun & Bradstreet 15,700 1,535
Eaton 15,500 1,506
General Electric 57,700 2,236
Goodrich 15,100 950
Honeywell International 34,900 2,007
Ingersoll-Rand, Cl A 61,600 3,100
Lockheed Martin 32,000 3,151
Norfolk Southern 62,300 3,351
Northrop Grumman 60,700 4,619
Parker Hannifin 43,100 4,253
W.W. Grainger 32,800 2,865
-----------
37,027
-----------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
LARGE CAP VALUE FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Shares/Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - 3.8%
Computer Sciences* 28,300 $ 1,576
Compuware (A)* 270,500 2,524
Ingram Micro, Cl A* 40,200 806
Microsoft 128,100 3,714
Oracle* 80,600 1,541
Symantec* 77,600 1,490
Tektronix (A) 61,600 2,023
Vishay Intertechnology (A)* 55,800 865
-----------
14,539
-----------
MATERIALS - 4.1%
Alcan 24,800 2,416
Ball 29,200 1,497
Dow Chemical 50,300 2,187
Gerdau Ameristeel (A) 89,600 1,177
Methanex (A) 78,800 1,953
NOVA Chemicals (A) 4,100 157
Nucor 39,200 1,968
Southern Copper (A) 37,800 4,260
-----------
15,615
-----------
TELECOMMUNICATIONS - 6.8%
AT&T (A) 226,832 8,883
Sprint Nextel 330,400 6,783
Telephone & Data Systems 17,300 1,149
Verizon Communications 208,500 8,886
-----------
25,701
-----------
UTILITIES - 5.3%
Alliant Energy 24,500 905
American Electric Power 33,900 1,474
Edison International 70,200 3,713
Energen (A) 34,400 1,820
FirstEnergy 73,000 4,435
Oneok 30,900 1,568
PG&E (A) 32,300 1,383
Public Service Enterprise Group 55,800 4,807
-----------
20,105
-----------
TOTAL COMMON STOCK
(Cost $342,409) 373,711
-----------
- --------------------------------------------------------------------------------
MASTER NOTES - 3.0%
- --------------------------------------------------------------------------------
Bear Stearns (B)
5.575%, 08/01/07 $ 6,250 6,250
JPMorgan (B)
5.455%, 08/15/07 5,000 5,000
-----------
TOTAL MASTER NOTES
(Cost $11,250) 11,250
-----------
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATION - 2.0%
- --------------------------------------------------------------------------------
Liquid Funding LLC (B) (C)
5.350%, 11/30/07 $ 7,500 $ 7,498
-----------
TOTAL CORPORATE OBLIGATION
(Cost $7,499)
7,498
-----------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 6.0%
- --------------------------------------------------------------------------------
Bank of America (B)
5.430%, dated 07/31/07, matures on
08/01/07, repurchase price $2,201,324
(collateralized by portions of various
corporate obligations, ranging in par
value from $804,989 - $5,735,081,
3.950% - 7.000%, 04/01/08 - 03/15/12,
total market value $2,311,150) 2,201 2,201
Bear Stearns (B)
5.425%, dated 07/31/07, matures on
08/01/07, repurchase price $5,000,590
(collateralized by portions of various
corporate obligations, ranging in par
value from $1,828,695 - $13,028,397,
0.000% - 6.100%, 01/25/33 - 09/25/37,
total market value $5,250,245) 5,000 5,000
Bear Stearns (B)
5.450%, dated 07/31/07, matures on
08/01/07, repurchase price $5,000,618
(collateralized by portions of various
corporate obligations, ranging in par
value from $1,828,695 - $13,028,397,
0.000% - 6.100%, 01/25/33 - 09/25/37,
total market value $5,250,245) 5,000 5,000
Deutsche Bank Securities
5.120%, dated 07/31/07, matures
08/01/07, repurchase price $10,410,735
(collateralized by a U.S. Treasury
obligation, par value $10,084,000,
5.250%, 02/15/29, total market
value $10,618,297) 10,409 10,409
-----------
TOTAL REPURCHASE AGREEMENTS
(Cost $22,610) 22,610
-----------
TOTAL INVESTMENTS - 109.4%
(Cost $383,768) $ 415,069
===========
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
66 1.800.433.6884
- --------------------------------------------------------------------------------
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
LARGE CAP VALUE FUND (CONCLUDED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PERCENTAGES ARE BASED ON NET ASSETS OF $379,445 (000).
INDUSTRY CLASSIFICATIONS ARE UNAUDITED.
+ NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING.
* NON-INCOME PRODUCING SECURITY.
(A) THIS SECURITY OR A PARTIAL POSITION OF THIS SECURITY IS ON LOAN AT JULY
31, 2007. THE TOTAL VALUE OF SECURITIES ON LOAN AT JULY 31, 2007 WAS
$28,932 (000).
(B) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES
LENDING.
(C) FLOATING RATE SECURITY. RATE DISCLOSED IS AS OF JULY 31, 2007.
CL -- CLASS
LLC -- LIMITED LIABILITY COMPANY
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------
[HIGHMARK FUNDS LOGO OMITTED](R)
[MOUNTAIN RANGE GRAPHIC OMITTED]
SCHEDULE OF INVESTMENTS
JULY 31, 2007
SMALL CAP ADVANTAGE FUND
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - 95.0%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 14.9%
American Greetings, Cl A 1,000 $ 25
Arctic Cat 15,300 277
Asbury Automotive Group (A) 3,100 69
Belo, Cl A 19,000 340
Bluegreen (A)* 14,200 120
Bob Evans Farms 2,200 71
Columbia Sportswear 600 38
Ethan Allen Interiors (A) 200 7
Finish Line, Cl A 7,200 49
Fred's 3,200 38
Furniture Brands International (A) 15,600 172
Hooker Furniture 6,100 124
Kellwood 8,600 221
Lifetime Brands (A) 13,000 252
Modine Manufacturing 10,700 274
Nautilus (A) 12,400 122
Pacific Sunwear of California* 6,400 115
PEP Boys-Manny Moe & Jack (A) 19,900 337
PF Chang's China Bistro (A)* 7,000 229
Regis 11,800 411
Rent-A-Center* 3,300 64
Ruby Tuesday (A) 11,700 260
Salem Communications, Cl A 12,700 108
Steak N Shake* 3,300 49
Timberland, Cl A* 2,400 57
Valuevision Media, Cl A (A)* 22,300 203
Warnaco Group* 2,900 105
------
4,137
------
CONSUMER STAPLES - 3.0%
Elizabeth Arden* 12,400 267
MGP Ingredients (A) 3,400 55
Performance Food Group* 6,200 178
Sanderson Farms 8,400 335
------
835
------
ENERGY - 5.0%
Alpha Natural Resources* 8,300 148
Brigham Exploration* 77,800 377
Callon Petroleum* 14,900 209
Grey Wolf* 27,000 200
Horizon Offshore (A)* 5,100 94
Hornbeck Offshore Services (A)* 1,600 69
Knightsbridge Tankers (A) 2,700 73
Oil States International* 5,000 219
Petroleum Development* 200 8
------
1,397
------
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
FINANCIALS - 16.2%
Amcore Financial (A) 9,000 $ 217
American Home Mortgage Investment REIT (A) 4,400 5
Anthracite Capital REIT (A) 32,500 306
Aspen Insurance Holdings 17,100 418
Asset Acceptance Capital 1,500 21
BankUnited Financial, Cl A (A) 14,700 248
Commerce Group (A) 8,900 256
Downey Financial (A) 3,900 207
Encore Capital Group* 12,300 127
First Bank of Puerto Rico (A) 28,600 263
Flagstar Bancorp 29,900 320
Great Southern Bancorp (A) 4,200 106
Infinity Property & Casualty 4,700 207
Luminent Mortgage Capital REIT (A) 44,100 323
MCG Capital (A) 5,400 78
Newcastle Investment REIT (A) 9,000 162
Odyssey Re Holdings 7,000 246
Pacific Capital Bancorp NA 9,200 192
Redwood Trust REIT (A) 6,400 184
Taylor Capital Group 3,300 90
Vineyard National Bancorp (A) 16,485 341
W Holding (A) 78,300 173
------
4,490
------
HEALTH CARE - 11.6%
Albany Molecular Research* 9,100 134
Apria Healthcare Group* 13,100 344
Aspect Medical Systems (A)* 9,500 129
Candela* 28,000 283
Conmed (A)* 4,400 123
Greatbatch* 11,000 341
Kindred Healthcare* 14,700 394
Martek Biosciences (A)* 13,600 349
Merit Medical Systems* 15,800 177
Par Pharmaceutical* 1,900 45
Perrigo (A) 16,800 313
RehabCare Group* 7,700 109
STERIS (A) 13,100 358
Varian (A)* 2,200 132
------
3,231
------
INDUSTRIALS - 14.8%
ABM Industries (A) 9,900 249
ABX Air* 9,100 66
American Woodmark (A) 6,600 198
AO Smith 3,100 151
Commercial Vehicle Group* 13,800 200
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
68 1.800.433.6884
- --------------------------------------------------------------------------------
[MOUNTAIN RANGE GRAPHIC OMITTED]
SCHEDULE OF INVESTMENTS
JULY 31, 2007
SMALL CAP ADVANTAGE FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
INDUSTRIALS - (CONTINUED)
Cubic 2,900 $ 80
Deluxe (A) 8,800 332
ExpressJet Holdings* 50,100 262
Federal Signal 20,100 270
Gibraltar Industries 6,400 124
GrafTech International* 24,900 386
Griffon (A)* 1,500 26
Labor Ready* 4,200 99
MTC Technologies* 13,200 288
Rush Enterprises, Cl A* 8,500 238
Saia* 17,100 346
Spherion* 35,700 315
United Stationers* 4,700 300
Wabash National 13,600 173
Werner Enterprises 1,200 23
-------
4,126
-------
INFORMATION TECHNOLOGY - 19.9%
Adaptec* 91,900 322
AMIS Holdings* 5,400 56
Amkor Technology (A)* 12,200 151
Anaren* 7,000 121
Anixter International* 4,300 355
Axcelis Technologies* 23,400 130
Black Box (A) 11,700 471
Brooks Automation* 12,600 221
Ciber* 55,500 421
CMGI* 249,700 394
Earthlink (A)* 45,000 313
EMS Technologies* 4,700 103
Gevity HR (A) 3,100 47
Imation 1,700 53
Insight Enterprises* 5,000 113
IXYS (A)* 26,800 255
JDA Software Group* 6,300 142
Kulicke & Soffa Industries (A)* 700 7
Methode Electronics 10,100 163
ON Semiconductor* 10,700 126
Plantronics 4,600 129
Progress Software* 10,400 315
RF Micro Devices (A)* 12,000 83
Silicon Storage Technology* 56,400 204
Startek 8,000 88
Sybase* 10,800 256
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - (CONTINUED)
SYNNEX* 8,900 $ 181
TriQuint Semiconductor* 3,800 17
United Online (A) 20,100 284
Utstarcom (A)* 5,700 18
-------
5,539
-------
MATERIALS - 4.8%
Buckeye Technologies (A)* 3,100 47
Georgia Gulf (A) 15,200 246
Headwaters (A)* 11,200 181
Mercer International* 11,700 102
NN 15,400 163
Olin (A) 8,700 181
Quanex (A) 600 27
Sensient Technologies 4,000 102
Worthington Industries (A) 13,800 286
-------
1,335
-------
TELECOMMUNICATIONS - 2.6%
Premiere Global Services* 8,800 103
SureWest Communications (A) 11,300 305
Syniverse Holdings* 16,000 215
USA Mobility 3,900 93
-------
716
-------
UTILITIES - 2.2%
Nicor 3,000 118
Westar Energy (A) 10,800 249
WGL Holdings 8,200 245
-------
612
-------
TOTAL COMMON STOCK
(Cost $28,664) 26,418
-------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------
[HIGHMARK FUNDS LOGO OMITTED](R)
[MOUNTAIN RANGE GRAPHIC OMITTED]
SCHEDULE OF INVESTMENTS
JULY 31, 2007
SMALL CAP ADVANTAGE FUND (CONCLUDED)
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 32.0%
- --------------------------------------------------------------------------------
Bank of America (B)
5.430%, dated 07/31/07, matures on
08/01/07, repurchase price $5,305,508
(collateralized by portions of various
corporate obligations, ranging in par
value from $1,940,139 - $13,822,369,
3.950% - 7.000%, 04/01/08 - 03/15/12,
total market value $5,570,203) $ 5,305 $ 5,305
Bear Stearns (B)
5.450%, dated 07/31/07, matures on
08/01/07, repurchase price $2,500,309
(collateralized by portions of various
corporate obligations, ranging in par
value from $914,348 - $6,514,199,
0.000% - 6.100%, 01/25/33 - 09/25/37,
total market value $2,625,122) 2,500 2,500
Deutsche Bank Securities
5.120%, dated 07/31/07, matures
08/01/07, repurchase price $1,095,449
(collateralized by a U.S. Treasury
obligation, par value $1,136,000,
3.875%, 07/15/10, total market
value $1,117,409) 1,095 1,095
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $8,900) 8,900
--------
TOTAL INVESTMENTS - 127.0%
(Cost $37,564) $ 35,318
========
- --------------------------------------------------------------------------------
PERCENTAGES ARE BASED ON NET ASSETS OF $27,820 (000).
INDUSTRY CLASSIFICATIONS ARE UNAUDITED.
* NON-INCOME PRODUCING SECURITY.
+ NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING.
(A) THIS SECURITY OR PARTIAL POSITION OF THIS SECURITY IS ON LOAN AT JULY 31,
2007. THE TOTAL VALUE OF SECURITIES ON LOAN AT JULY 31, 2007 IS $7,103
(000).
(B) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES
LENDING
CL -- CLASS
REIT -- REAL ESTATE INVESTMENT TRUST
Futures -- A summary of the open futures contracts held by the Fund at July 31,
2007, is as follows:
TYPE OF NUMBER OF EXPIRATION UNREALIZED
CONTRACT CONTRACTS DATE DEPRECIATION (000)
- --------------------------------------------------------------------
Russell 2000 Index 7 September 2007 $ 55
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
70 1.800.433.6884
- --------------------------------------------------------------------------------
[MOUNTAIN RANGE GRAPHIC OMITTED]
SCHEDULE OF INVESTMENTS
JULY 31, 2007
SMALL CAP VALUE FUND
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - 97.7%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 17.2%
American Axle & Manufacturing
Holdings 110,900 $ 2,684
American Greetings, Cl A 61,500 1,521
Arctic Cat (A) 109,238 1,979
ArvinMeritor (A) 182,100 3,611
Belo, Cl A 99,900 1,788
Blyth (A) 57,900 1,292
BorgWarner 18,700 1,617
CBRL Group (A) 38,300 1,472
Ethan Allen Interiors (A) 88,000 3,006
Furniture Brands International (A) 32,300 356
Handleman (A) 26,000 123
Hooker Furniture 11,844 240
Jackson Hewitt Tax Service (A) 40,900 1,112
Journal Communications, Cl A 291,300 3,085
K2* 30,000 438
Kellwood (A) 46,700 1,197
M/I Homes (A) 2,000 49
Modine Manufacturing 56,500 1,446
O'Charleys* 70,600 1,252
Polaris Industries (A) 64,700 3,194
Rent-A-Center (A)* 47,750 927
Rex Stores (A)* 65,200 1,326
Ruby Tuesday (A) 129,100 2,872
Ryland Group (A) 29,200 971
Sonic Automotive, Cl A (A) 72,400 1,984
Stage Stores 89,700 1,600
Standard Motor Products (A) 101,000 1,257
Stride Rite (A) 12,600 257
Talbots (A) 68,400 1,573
Tupperware Brands 79,000 2,055
Zale (A)* 8,800 187
------------
46,471
------------
CONSUMER STAPLES - 2.8%
Nash Finch (A) 34,700 1,398
Ruddick (A) 65,900 1,832
Seaboard 1,300 2,600
Universal 32,800 1,811
------------
7,641
------------
ENERGY - 5.4%
Grey Wolf* 568,400 4,212
Holly 19,500 1,314
Lufkin Industries (A) 43,900 2,599
Oil States International* 73,500 3,215
Swift Energy (A)* 28,500 1,218
Tesoro (A) 38,000 1,893
------------
14,451
------------
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
FINANCIALS - 27.7%
Advanta, Cl B (A) 122,700 $ 3,148
Anthracite Capital REIT (A) 149,300 1,403
Citizens Republic Bancorp (A) 138,901 2,236
City Holding 74,800 2,457
Commerce Group (A) 110,900 3,186
Community Bank System (A) 129,600 2,331
Community Trust Bancorp 30,400 872
Dime Community Bancshares (A) 75,700 847
Federal Agricultural Mortgage, Cl C (A) 63,000 1,763
Financial Federal (A) 97,700 2,770
First Charter (A) 47,375 873
First Indiana (A) 45,106 1,414
First Niagara Financial Group 88,400 1,137
FirstMerit (A) 175,200 3,211
Flagstar Bancorp (A) 82,600 884
Fremont General (A) 54,800 316
Greater Bay Bancorp 72,600 1,951
Harleysville Group (A) 59,900 1,678
Horace Mann Educators (A) 108,200 1,929
HRPT Properties Trust REIT (A) 251,400 2,351
Independent Bank 49,665 602
IndyMac Bancorp (A) 43,800 964
Integra Bank (A) 48,300 871
LandAmerica Financial Group (A) 25,600 1,961
Luminent Mortgage Capital REIT (A) 213,600 1,566
NBT Bancorp (A) 55,200 999
Newcastle Investment REIT (A) 58,100 1,046
Odyssey Re Holdings 57,100 2,010
Ohio Casualty 117,500 5,101
Old National Bancorp (A) 204,100 2,939
One Liberty Properties REIT (A) 68,700 1,362
Oriental Financial Group (A) 110,300 984
Presidential Life 60,400 985
Provident Bankshares 70,200 2,015
RAIT Financial Trust REIT (A) 38,200 396
RLI 27,400 1,589
Safety Insurance Group 44,100 1,469
Scottish Re Group (A)* 2,100 9
StanCorp Financial Group 45,800 2,151
United Bankshares (A) 76,300 2,125
Webster Financial (A) 77,100 3,351
Zenith National Insurance 84,300 3,402
------------
74,654
------------
HEALTH CARE - 2.6%
Alpharma, Cl A (A) 40,900 1,014
Apria Healthcare Group* 100,000 2,622
Datascope 53,200 1,830
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
SMALL CAP VALUE FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
HEALTH CARE - (CONTINUED)
Lumenis*^ 13 $ --
STERIS (A) 58,600 1,603
------------
7,069
------------
INDUSTRIALS - 17.0%
Alaska Air Group (A)* 33,700 786
Albany International, Cl A (A) 37,700 1,413
American Woodmark (A) 42,500 1,277
AO Smith (A) 74,000 3,593
Applied Industrial Technologies 57,000 1,618
Arkansas Best (A) 5,942 214
Crane 60,600 2,779
Deluxe 74,100 2,798
Ennis (A) 59,800 1,207
EnPro Industries (A)* 39,500 1,555
GATX 25,200 1,143
Griffon (A)* 68,300 1,200
IKON Office Solutions (A) 214,100 2,967
Kelly Services, Cl A (A) 93,800 2,331
Mesa Air Group (A)* 146,700 976
Mueller Industries 53,300 1,966
Mueller Water Products 59,157 781
NACCO Industries, Cl A (A) 13,100 1,723
PAM Transportation Services* 73,100 1,358
Regal-Beloit 38,500 1,953
Ryder System (A) 45,100 2,452
Saia* 69,700 1,410
Spherion* 130,900 1,156
Standex International 37,400 886
Timken (A) 59,400 1,984
United Rentals* 39,600 1,273
Walter Industries 35,800 895
YRC Worldwide (A)* 68,400 2,197
------------
45,891
------------
INFORMATION TECHNOLOGY - 14.0%
Aeroflex (A)* 140,500 1,971
Asyst Technologies (A)* 318,700 2,129
Axcelis Technologies* 345,500 1,917
Black Box (A) 9,123 367
Brocade Communications Systems* 134,600 947
Ciber* 121,000 918
CTS 114,100 1,454
Gerber Scientific* 96,700 1,004
Gevity HR 16,792 252
JDA Software Group* 71,245 1,611
Kemet (A)* 233,500 1,644
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY - (CONTINUED)
Mentor Graphics (A)* 164,500 $ 1,976
Methode Electronics (A) 141,200 2,283
MKS Instruments (A)* 130,600 2,965
Photronics* 71,300 1,000
Quantum (A)* 694,300 1,965
RF Micro Devices (A)* 325,800 2,261
Skyworks Solutions* 562,200 4,453
Technitrol 137,600 3,577
TriQuint Semiconductor* 206,700 914
United Online 150,700 2,128
------------
37,736
------------
MATERIALS - 7.4%
FMC 24,700 2,202
Glatfelter 87,600 1,176
HB Fuller (A) 46,000 1,271
Olin (A) 114,100 2,381
OM Group (A)* 24,600 1,192
Quanex (A) 59,550 2,683
Ryerson (A) 32,500 1,043
Schulman A 63,000 1,463
Schweitzer-Mauduit International 64,829 1,480
Sensient Technologies 77,300 1,963
Spartech (A) 120,100 2,648
Wellman (A) 117,300 323
------------
19,825
------------
TELECOMMUNICATIONS - 0.8%
Citizens Communications 1 --
Golden Telecom (A) 33,200 2,143
------------
2,143
------------
UTILITIES - 2.8%
Avista (A) 83,900 1,663
Nicor (A) 42,900 1,691
PNM Resources (A) 46,050 1,189
Unisource Energy (A) 52,600 1,601
Westar Energy 59,100 1,360
------------
7,504
------------
TOTAL COMMON STOCK
(Cost $246,447)
263,385
------------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
72 1.800.433.6884
- --------------------------------------------------------------------------------
[MOUNTAIN RANGE GRAPHIC OMITTED]
SCHEDULE OF INVESTMENTS
JULY 31, 2007
SMALL CAP VALUE FUND (CONCLUDED)
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MASTER NOTES - 8.3%
- --------------------------------------------------------------------------------
Bear Stearns (B)
5.575%, 08/01/07 $ 12,500 $ 12,500
JPMorgan (B)
5.455%, 08/15/07 10,000 10,000
------------
TOTAL MASTER NOTES
(Cost $22,500)
22,500
------------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - 2.8%
- --------------------------------------------------------------------------------
Liquid Funding LLC (B) (C)
5.350%, 11/30/07 5,000 4,999
Morgan Stanley Dean Witter (B) (C)
5.440%, 08/01/08 2,500 2,500
------------
TOTAL CORPORATE OBLIGATIONS
(Cost $7,499)
7,499
------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 23.3%
- --------------------------------------------------------------------------------
Bank of America (B)
5.430%, dated 07/31/07, matures on
08/01/07, repurchase price $5,697,022
(collateralized by portions of various
corporate obligations, ranging in par
value from $2,083,309 - $14,842,375,
3.950% - 7.000%, 04/01/08 - 03/15/12,
total market value $5,981,250) 5,696 5,696
Bear Stearns (B)
5.425%, dated 07/31/07, matures on
08/01/07, repurchase price $30,003,542
(collateralized by portions of various
corporate obligations, ranging in par
value from $10,972,170 - $78,170,384,
0.000% - 6.100%, 01/25/33 - 09/25/37,
total market value $31,501,467) 30,000 30,000
Bear Stearns (B)
5.450%, dated 07/31/07, matures on
08/01/07, repurchase price $20,002,472
(collateralized by portions of various
corporate obligations, ranging in par
value from $7,314,780 - $52,113,590,
0.000% - 6.100%, 01/25/33 - 09/25/37,
total market value $21,000,978) 20,000 20,000
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - (CONTINUED)
- --------------------------------------------------------------------------------
Deutsche Bank Securities
5.120%, dated 07/31/07, matures
08/01/07, repurchase price $6,598,168
(collateralized by various U.S. Government
obligations ranging in par value
$2,458,000 - $4,229,000,
3.750% - 4.625%, 05/15/08 - 02/29/12,
total market value $6,729,274) $ 6,597 $ 6,597
Lehman Brothers (B)
5.425%, dated 07/31/07, matures on
08/01/07, repurchase price $500,075
(collateralized by a mortgage
obligation, par value $563,304,
6.020%, 10/20/46, total market
value $510,128) 500 500
------------
TOTAL REPURCHASE AGREEMENTS
(Cost $62,793) 62,793
------------
TOTAL INVESTMENTS - 132.1%
(Cost $339,239) $ 356,177
============
- --------------------------------------------------------------------------------
PERCENTAGES ARE BASED ON NET ASSETS OF $269,572 (000).
INDUSTRY CLASSIFICATIONS ARE UNAUDITED.
+ NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING.
* NON-INCOME PRODUCING SECURITY.
^ SECURITY FAIR VALUED USING METHODS DETERMINED IN GOOD FAITH BY THE
VALUATION COMMITTEE OF THE BOARD OF TRUSTEES.
(A) THIS SECURITY OR PARTIAL POSITION OF THIS SECURITY IS ON LOAN AT JULY 31,
2007. THE TOTAL VALUE OF SECURITIES ON LOAN AT JULY 31, 2007 IS $76,537
(000).
(B) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES
LENDING.
(C) FLOATING RATE SECURITY. RATE DISCLOSED IS AS OF JULY 31, 2007.
CL -- CLASS
LLC -- LIMITED LIABILITY COMPANY
REIT -- REAL ESTATE INVESTMENT TRUST
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
VALUE MOMENTUM FUND
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - 98.1%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 11.6%
Autoliv 40,000 $ 2,237
Belo, Cl A (A) 151,250 2,707
Comcast, Cl A* 340,000 8,898
Harrah's Entertainment 25,000 2,117
Home Depot 100,000 3,717
Lee Enterprises (A) 125,100 2,203
Leggett & Platt (A) 120,000 2,488
Macy's (A) 65,000 2,345
News, Cl A 475,000 10,032
Pulte Homes (A) 200,000 3,868
Target (A) 45,000 2,726
Time Warner 325,000 6,259
Washington Post, Cl B 4,900 3,875
WCI Communities (A)* 60,000 530
Wyndham Worldwide* 70,000 2,355
----------
56,357
----------
CONSUMER STAPLES - 9.2%
Altria Group 170,000 11,300
Cadbury Schweppes ADR 155,000 7,708
Diageo ADR 41,400 3,381
Fomento Economico Mexicano ADR 90,000 3,332
Kraft Foods, Cl A 80,000 2,620
Nestle ADR 82,500 7,970
Universal 30,000 1,656
Wal-Mart Stores 142,700 6,557
----------
44,524
----------
ENERGY - 12.2%
Chevron 183,800 15,671
ConocoPhillips 96,000 7,761
Exxon Mobil 188,700 16,064
Halliburton (A) 110,000 3,962
Marathon Oil 90,000 4,968
Peabody Energy 45,000 1,902
Suncor Energy 30,000 2,714
Williams 200,000 6,450
----------
59,492
----------
FINANCIALS - 22.4%
Aflac 50,000 2,606
American International Group (A) 126,400 8,112
Bank of America 190,000 9,010
Bank of New York Mellon 154,245 6,563
Berkshire Hathaway, Cl B* 2,800 10,091
Citigroup 335,800 15,638
Genworth Financial, Cl A 95,000 2,899
Goldman Sachs Group (A) 25,000 4,709
Hanover Insurance Group 52,300 2,295
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
FINANCIALS - (CONTINUED)
JPMorgan Chase 270,000 $ 11,883
Marsh & McLennan (A) 246,100 6,780
MetLife (A) 40,000 2,409
Morgan Stanley 58,600 3,743
Prudential Financial (A) 55,000 4,875
Travelers 100,000 5,078
Washington Mutual 110,000 4,128
Wells Fargo 167,000 5,640
XL Capital, Cl A (A) 35,000 2,725
----------
109,184
----------
HEALTH CARE - 6.0%
Baxter International 90,000 4,734
Boston Scientific (A)* 135,000 1,775
Covidien (A) 67,500 2,764
GlaxoSmithKline ADR (A) 112,900 5,767
Merck 100,000 4,965
Pfizer 385,000 9,052
----------
29,057
----------
INDUSTRIALS - 13.0%
Avery Dennison (A) 77,000 4,723
Boeing 35,000 3,620
General Electric 615,000 23,837
Honeywell International 110,700 6,366
Insituform Technologies, Cl A (A)* 125,000 2,065
Masco (A) 90,000 2,449
Pitney Bowes 110,000 5,071
Tyco International 67,500 3,192
USG (A)* 115,000 4,774
Waste Management 193,000 7,340
----------
63,437
----------
INFORMATION TECHNOLOGY - 13.8%
Accenture, Cl A 175,000 7,373
Cisco Systems* 175,000 5,059
Corning 240,000 5,721
Diebold (A) 71,500 3,623
EMC* 156,700 2,900
First Data 140,000 4,451
Hewlett-Packard 90,000 4,143
International Business Machines (A) 81,500 9,018
Microsoft 465,300 13,489
Nokia ADR 205,000 5,871
Tyco Electronics (A) 67,500 2,418
Western Union 145,000 2,893
----------
66,959
----------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
74 1.800.433.6884
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
VALUE MOMENTUM FUND (CONCLUDED)
- --------------------------------------------------------------------------------
Description Shares/Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK - (CONTINUED)+
- --------------------------------------------------------------------------------
MATERIALS - 4.3%
Alcoa 85,000 $ 3,247
Ashland 42,000 2,565
Cabot 55,000 2,221
Dow Chemical 53,000 2,304
EI Du Pont de Nemours 50,000 2,336
Rio Tinto ADR 11,650 3,368
Weyerhaeuser 71,500 5,094
----------
21,135
----------
TELECOMMUNICATIONS - 3.6%
Verizon Communications (A) 410,000 17,474
----------
UTILITIES - 2.0%
Questar (A) 185,000 9,527
----------
TOTAL COMMON STOCK
(Cost $342,637) 477,146
----------
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 0.4%
- --------------------------------------------------------------------------------
Templeton Dragon Fund 74,000 2,063
----------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $650) 2,063
----------
- --------------------------------------------------------------------------------
MASTER NOTES - 5.2%
- --------------------------------------------------------------------------------
Bear Stearns (B)
5.575%, 08/01/07 $ 15,000 15,000
JPMorgan (B)
5.455%, 08/15/07 10,000 10,000
----------
TOTAL MASTER NOTES
(Cost $25,000) 25,000
----------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - 2.1%
- --------------------------------------------------------------------------------
Liquid Funding LLC (B) (C)
5.350%, 11/30/07 5,000 4,999
5.339%, 06/11/08 2,500 2,499
Morgan Stanley Dean Witter (B) (C)
5.440%, 11/30/07 2,500 2,500
----------
TOTAL CORPORATE OBLIGATIONS
(Cost $9,998) 9,998
----------
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 2.5%
- --------------------------------------------------------------------------------
Bank of America (B)
5.430%, dated 07/31/07, matures on
08/01/07, repurchase price $5,407,378
(collateralized by portions of various
corporate obligations, ranging in par
value from $1,977,391 - $14,087,770,
3.950% - 7.000%, 04/01/08 - 03/15/12,
total market value $5,677,156) $ 5,407 $ 5,407
Deutsche Bank Securities
5.120%, dated 07/31/07, matures
08/01/07, repurchase price $6,900,288
(collateralized by a U.S. Treasury
obligation, par value $6,906,000,
4.625%, 02/29/12, total market
value $7,038,243) 6,899 6,899
----------
TOTAL REPURCHASE AGREEMENTS
(Cost $12,306) 12,306
----------
TOTAL INVESTMENTS - 108.3%
(Cost $390,591) $ 526,513
==========
- --------------------------------------------------------------------------------
PERCENTAGES ARE BASED ON NET ASSETS OF $486,369 (000).
INDUSTRY CLASSIFICATIONS ARE UNAUDITED.
* NON-INCOME PRODUCING SECURITY.
+ NARROW INDUSTRIES ARE UTILIZED FOR COMPLIANCE PURPOSES, WHEREAS BROAD
SECTORS ARE UTILIZED FOR REPORTING.
(A) THIS SECURITY OR A PARTIAL POSITION OF THIS SECURITY IS ON LOAN AT JULY
31, 2007. THE TOTAL VALUE OF SECURITIES ON LOAN AT JULY 31, 2007 WAS
$38,386 (000).
(B) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES
LENDING.
(C) FLOATING RATE SECURITY. RATE DISCLOSED IS AS OF JULY 31, 2007.
ADR -- AMERICAN DEPOSITARY RECEIPT
CL -- CLASS
LLC -- LIMITED LIABILITY COMPANY
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
CAPITAL GROWTH ALLOCATION FUND
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AFFILIATED EQUITY REGISTERED INVESTMENT COMPANIES - 86.9%
- --------------------------------------------------------------------------------
HighMark Cognitive Value Fund,
Fiduciary Shares - 1.5% 91,722 $ 1,195
HighMark Core Equity Fund,
Fiduciary Shares - 22.8% 1,833,242 18,259
Highmark International Opportunities
Fund, Fiduciary Shares - 16.6% 1,334,042 13,247
HighMark Large Cap Growth Fund,
Fiduciary Shares - 12.7% 1,015,910 10,190
HighMark Large Cap Value Fund,
Fiduciary Shares - 7.5% 398,003 6,034
Highmark Small Cap Advantage Fund,
Fiduciary Shares - 7.3%* 308,759 5,814
HighMark Small Cap Value Fund,
Fiduciary Shares - 2.3% 107,067 1,826
HighMark Value Momentum Fund,
Fiduciary Shares - 16.2% 536,324 12,984
-----------
TOTAL AFFILIATED EQUITY REGISTERED
INVESTMENT COMPANIES
(Cost $64,678) 69,549
-----------
- --------------------------------------------------------------------------------
AFFILIATED FIXED INCOME REGISTERED
INVESTMENT COMPANIES - 9.0%
- --------------------------------------------------------------------------------
HighMark Bond Fund,
Fiduciary Shares - 1.6% 126,955 1,320
Highmark Short Term Bond Fund,
Fiduciary Shares - 7.4% 603,048 5,922
-----------
TOTAL AFFILIATED FIXED INCOME REGISTERED
INVESTMENT COMPANIES
(Cost $7,245) 7,242
-----------
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 2.1%
- --------------------------------------------------------------------------------
JPMorgan Small Cap Growth Fund,
Institutional Class 137,539 1,668
-----------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $1,709) 1,668
-----------
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 2.0%
- --------------------------------------------------------------------------------
Deutsche Bank Securities,
5.120%, dated 07/31/07, matures on
08/01/07, repurchase price $1,564,950
(collateralized by a U.S. Government
obligation, par value $1,304,000,
6.625%, 02/15/27, total market
value $1,596,565) $ 1,565 $ 1,565
-----------
TOTAL REPURCHASE AGREEMENT
(Cost $1,565) 1,565
-----------
TOTAL INVESTMENTS - 100.0%
(Cost $75,197) $ 80,024
===========
- --------------------------------------------------------------------------------
PERCENTAGES ARE BASED ON NET ASSETS OF $79,987 (000).
* NON-INCOME PRODUCING SECURITY.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
76 1.800.433.6884
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
DIVERSIFIED EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AFFILIATED EQUITY REGISTERED INVESTMENT COMPANIES - 98.0%
- --------------------------------------------------------------------------------
HighMark Cognitive Value Fund,
Fiduciary Shares - 1.7% 9,249 $ 120
HighMark Core Equity Fund,
Fiduciary Shares - 28.4% 200,704 1,999
Highmark International Opportunities
Fund, Fiduciary Shares - 20.6% 145,985 1,450
HighMark Large Cap Growth Fund,
Fiduciary Shares - 11.1% 77,624 779
HighMark Large Cap Value Fund,
Fiduciary Shares - 5.3% 24,674 374
Highmark Small Cap Advantage Fund,
Fiduciary Shares - 8.2%* 30,562 575
HighMark Small Cap Value Fund,
Fiduciary Shares - 2.5% 10,525 179
HighMark Value Momentum Fund,
Fiduciary Shares - 20.2% 58,717 1,422
-----------
TOTAL AFFILIATED EQUITY REGISTERED
INVESTMENT COMPANIES
(Cost $6,864) 6,898
-----------
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 2.3%
- --------------------------------------------------------------------------------
JPMorgan Small Cap Growth Fund,
Institutional Class 13,622 165
-----------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $169) 165
-----------
TOTAL INVESTMENTS - 100.3%
(Cost $7,033) $ 7,063
===========
- --------------------------------------------------------------------------------
PERCENTAGES ARE BASED ON NET ASSETS OF $7,040 (000).
* NON-INCOME PRODUCING SECURITY.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
GROWTH & INCOME ALLOCATION FUND
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AFFILIATED EQUITY REGISTERED INVESTMENT COMPANIES - 67.6%
- --------------------------------------------------------------------------------
HighMark Cognitive Value Fund,
Fiduciary Shares - 1.3% 68,499 $ 893
HighMark Core Equity Fund,
Fiduciary Shares - 16.8% 1,186,082 11,813
Highmark International Opportunities
Fund, Fiduciary Shares - 13.4% 954,161 9,475
HighMark Large Cap Growth Fund,
Fiduciary Shares - 10.2% 720,069 7,222
HighMark Large Cap Value Fund,
Fiduciary Shares - 6.3% 293,326 4,447
Highmark Small Cap Advantage Fund,
Fiduciary Shares - 5.9%* 222,485 4,189
HighMark Small Cap Value Fund,
Fiduciary Shares - 1.8% 72,803 1,241
HighMark Value Momentum Fund,
Fiduciary Shares - 11.9% 346,922 8,399
-----------
TOTAL AFFILIATED EQUITY REGISTERED
INVESTMENT COMPANIES
(Cost $43,956) 47,679
-----------
- --------------------------------------------------------------------------------
AFFILIATED FIXED INCOME REGISTERED
INVESTMENT COMPANIES - 27.6%
- --------------------------------------------------------------------------------
HighMark Bond Fund,
Fiduciary Shares - 11.6% 788,625 8,202
Highmark Short Term Bond Fund,
Fiduciary Shares - 16.0% 1,148,908 11,282
-----------
TOTAL AFFILIATED FIXED INCOME REGISTERED
INVESTMENT COMPANIES
(Cost $19,600) 19,484
-----------
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 1.7%
- --------------------------------------------------------------------------------
JPMorgan Small Cap Growth Fund,
Institutional Class 98,830 1,199
-----------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $1,227) 1,199
-----------
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 3.3%
- --------------------------------------------------------------------------------
Deutsche Bank Securities,
5.120%, dated 07/31/07, matures on
08/01/07, repurchase price $2,297,030
(collateralized by a U.S. Government
obligation, par value $1,988,000,
11.750%, 11/15/14, total market
value $2,342,988) $ 2,297 $ 2,297
-----------
TOTAL REPURCHASE AGREEMENT
(Cost $2,297) 2,297
-----------
TOTAL INVESTMENTS - 100.2%
(Cost $67,080) $ 70,659
===========
- --------------------------------------------------------------------------------
PERCENTAGES ARE BASED ON NET ASSETS OF $70,514 (000).
* NON-INCOME PRODUCING SECURITY.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
78 1.800.433.6884
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
INCOME PLUS ALLOCATION FUND
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AFFILIATED FIXED INCOME REGISTERED
INVESTMENT COMPANIES - 56.1%
- --------------------------------------------------------------------------------
HighMark Bond Fund,
Fiduciary Shares - 23.8% 214,192 $ 2,228
Highmark Short Term Bond Fund,
Fiduciary Shares - 32.3% 306,965 3,014
-----------
TOTAL AFFILIATED FIXED INCOME REGISTERED
INVESTMENT COMPANIES
(Cost $5,281) 5,242
-----------
- --------------------------------------------------------------------------------
AFFILIATED EQUITY REGISTERED INVESTMENT COMPANIES - 38.1%
- --------------------------------------------------------------------------------
HighMark Cognitive Value Fund,
Fiduciary Shares - 0.7% 4,784 62
HighMark Core Equity Fund,
Fiduciary Shares - 10.7% 99,984 996
Highmark International Opportunities
Fund, Fiduciary Shares - 4.2% 39,722 394
HighMark Large Cap Growth Fund,
Fiduciary Shares - 7.3% 68,242 685
HighMark Large Cap Value Fund,
Fiduciary Shares - 3.5% 21,603 328
Highmark Small Cap Advantage Fund,
Fiduciary Shares - 3.1%* 15,530 292
HighMark Small Cap Value Fund,
Fiduciary Shares - 1.0% 5,423 92
HighMark Value Momentum Fund,
Fiduciary Shares - 7.6% 29,251 708
-----------
TOTAL AFFILIATED EQUITY REGISTERED
INVESTMENT COMPANIES
(Cost $3,276) 3,557
-----------
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 0.9%
- --------------------------------------------------------------------------------
JPMorgan Small Cap Growth Fund,
Institutional Class 6,733 82
-----------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $84) 82
-----------
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 4.9%
- --------------------------------------------------------------------------------
Deutsche Bank Securities,
5.120%, dated 07/31/07, matures on
08/01/07, repurchase price $459,772
(collateralized by a U.S. Government
obligation, par value $477,000,
3.875%, 07/15/10, total market
value $469,194) $ 460 $ 460
-----------
TOTAL REPURCHASE AGREEMENT
(Cost $460) 460
-----------
TOTAL INVESTMENTS - 100.0%
(Cost $9,101) $ 9,341
===========
- --------------------------------------------------------------------------------
PERCENTAGES ARE BASED ON NET ASSETS OF $9,337 (000).
* NON-INCOME PRODUCING SECURITY.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
BOND FUND
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS - 42.1%
- --------------------------------------------------------------------------------
FHLMC Gold
6.500%, 11/01/09 $ 482 $ 485
6.000%, 10/01/09 652 652
6.000%, 06/01/13 1,288 1,302
6.000%, 09/01/13 1,188 1,201
6.000%, 09/01/17 3,075 3,098
6.000%, 11/01/17 904 910
6.000%, 12/01/36 7,288 7,234
5.500%, 03/01/17 892 886
5.500%, 08/01/21 8,555 8,450
5.000%, 10/01/20 1,634 1,586
5.000%, 07/01/35 4,935 4,643
4.500%, 05/01/19 2,047 1,956
4.500%, 07/01/19 5,937 5,675
4.500%, 04/01/20 802 767
4.000%, 04/01/18 4,734 4,426
4.000%, 06/01/19 10,367 9,659
FHLMC, CMO REMIC, Ser 1666, Cl J
6.250%, 01/15/24 2,000 2,043
FNMA
8.500%, 05/01/25 31 33
8.000%, 08/01/24 4 5
8.000%, 09/01/24 -- 1
8.000%, 07/01/26 39 41
8.000%, 06/01/30 20 21
7.500%, 12/01/26 267 280
7.000%, 02/01/09 128 128
7.000%, 12/01/10 418 420
7.000%, 05/01/30 42 43
6.500%, 12/01/07 19 19
6.500%, 04/01/14 724 740
6.500%, 03/01/24 72 73
6.500%, 05/01/26 69 71
6.500%, 01/01/28 32 32
6.500%, 03/01/28 40 41
6.500%, 04/01/28 179 183
6.500%, 01/01/29 886 905
6.500%, 06/01/29 958 977
6.500%, 07/01/29 481 491
6.500%, 08/01/29 204 208
6.500%, 05/01/30 674 688
6.000%, 05/01/09 10 10
6.000%, 09/01/10 51 51
6.000%, 05/01/11 60 61
6.000%, 01/01/12 42 42
6.000%, 03/01/13 94 95
6.000%, 08/01/14 3,326 3,356
6.000%, 05/01/16 880 887
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS - (CONTINUED)
- --------------------------------------------------------------------------------
FNMA - (continued)
6.000%, 10/01/16 $ 1,100 $ 1,108
6.000%, 11/01/17 2,435 2,454
6.000%, 12/01/27 88 88
6.000%, 07/01/28 527 526
6.000%, 08/01/28 148 148
6.000%, 10/01/28 330 330
6.000%, 12/01/28 2,230 2,227
5.500%, 01/01/17 579 575
5.500%, 02/01/17 382 379
5.500%, 12/01/17 2,944 2,921
5.500%, 11/01/33 8,322 8,078
5.500%, 04/01/35 3,812 3,691
5.500%, 04/01/36 10,401 10,071
5.000%, 01/01/09 465 461
5.000%, 11/01/17 3,787 3,693
5.000%, 12/01/17 1,424 1,389
5.000%, 02/01/18 4,172 4,066
5.000%, 11/01/18 592 577
5.000%, 03/01/34 8,143 7,681
5.000%, 08/01/34 4,025 3,796
5.000%, 07/01/35 5,411 5,090
4.500%, 04/01/18 22,653 21,684
4.500%, 08/01/18 2,561 2,451
4.500%, 07/01/20 7,831 7,485
FNMA, CMO REMIC, Ser 2003-25, Cl CD
3.500%, 03/25/17 4,870 4,678
GNMA
8.000%, 04/15/17 30 32
8.000%, 05/15/17 18 19
8.000%, 11/15/26 307 325
8.000%, 12/15/26 113 120
7.500%, 05/15/23 127 133
7.500%, 01/15/24 117 122
7.500%, 02/15/24 74 77
7.500%, 02/15/27 24 26
7.500%, 06/15/27 56 59
7.500%, 07/15/27 17 18
7.500%, 08/15/27 55 57
7.000%, 01/15/24 53 55
7.000%, 04/15/24 36 38
6.500%, 06/15/23 135 138
6.500%, 12/15/23 71 73
6.500%, 01/15/24 21 21
6.500%, 02/15/24 110 112
6.500%, 10/15/25 58 59
6.500%, 04/15/26 56 57
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
80 1.800.433.6884
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
BOND FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS - (CONTINUED)
- --------------------------------------------------------------------------------
GNMA - (continued)
6.500%, 01/15/29 $ 256 $ 262
6.500%, 05/15/29 834 853
6.500%, 06/15/29 69 70
6.000%, 07/15/28 72 72
6.000%, 08/15/28 133 134
6.000%, 09/15/28 550 553
-----------
TOTAL U.S. GOVERNMENT AGENCY MORTGAGE-
BACKED OBLIGATIONS
(Cost $167,341) 164,007
-----------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - 34.2%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 5.8%
Comcast Cable Communications
6.875%, 06/15/09 4,340 4,445
News America Holdings
7.750%, 02/01/24 1,000 1,091
Staples
7.125%, 08/15/07 4,000 4,002
Time Warner
7.480%, 01/15/08 7,100 7,167
Time Warner Entertainment
8.375%, 03/15/23 5,000 5,763
-----------
22,468
-----------
CONSUMER STAPLES - 0.7%
Safeway
7.500%, 09/15/09 2,468 2,568
-----------
ENERGY - 2.1%
ConocoPhillips
7.125%, 03/15/28 3,000 3,050
Kinder Morgan
7.250%, 03/01/28 5,600 5,152
-----------
8,202
-----------
FINANCIALS - 11.5%
Associates
6.950%, 11/01/18 4,000 4,290
Bank One
6.000%, 08/01/08 500 502
Citigroup
6.200%, 03/15/09 5,200 5,284
GE Global Insurance
7.750%, 06/15/30 5,000 5,767
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
- --------------------------------------------------------------------------------
FINANCIALS - (CONTINUED)
HSBC Bank USA (A)
3.875%, 09/15/09 $ 4,200 $ 4,073
John Hancock Financial Services
5.625%, 12/01/08 5,000 5,022
Liquid Funding LLC (B) (C)
5.350%, 11/30/07 2,500 2,499
5.339%, 06/11/08 2,500 2,500
Morgan Stanley
6.750%, 04/15/11 5,500 5,695
U.S. Bancorp
6.875%, 09/15/07 4,300 4,305
Wachovia
3.625%, 02/17/09 5,000 4,875
-----------
44,812
-----------
FOREIGN GOVERNMENTS - 2.1%
Hydro Quebec, Ser IO
8.050%, 07/07/24 1,125 1,416
Pemex Project Funding Master Trust
9.125%, 10/13/10 5,000 5,475
Province of Saskatchewan
9.375%, 12/15/20 1,000 1,349
-----------
8,240
-----------
HEALTH CARE - 2.4%
HCA
7.875%, 02/01/11 5,000 4,800
United Health Group
5.250%, 03/15/11 4,500 4,480
-----------
9,280
-----------
INDUSTRIALS - 1.9%
Continental Airlines, Ser 98-1B
6.748%, 03/15/17 2,452 2,378
General Electric
5.000%, 02/01/13 5,000 4,882
-----------
7,260
-----------
INFORMATION TECHNOLOGY - 1.9%
Cisco Systems
5.250%, 02/22/11 5,000 4,975
International Business Machines
6.500%, 01/15/28 2,500 2,646
-----------
7,621
-----------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
BOND FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
- --------------------------------------------------------------------------------
TELECOMMUNICATION - 2.3%
Bell Atlantic of Maryland
8.000%, 10/15/29 $ 2,980 $ 3,340
New England Telephone & Telegraph
7.875%, 11/15/29 4,925 5,451
---------
8,791
---------
UTILITIES - 3.5%
Arkansas Electric Cooperative
7.330%, 06/30/08 711 713
Baltimore Gas & Electric, MTN, Ser G
5.780%, 10/01/08 4,000 4,007
Consolidated Edison of New York, Ser G
7.000%, 03/01/29 1,250 1,285
Midamerican Energy Holdings, Ser D
5.000%, 02/15/14 400 384
Oklahoma Gas & Electric
6.650%, 07/15/27 2,500 2,635
Virginia Electric & Power, Ser A
4.750%, 03/01/13 5,000 4,770
---------
13,794
---------
TOTAL CORPORATE OBLIGATIONS
(Cost $131,787) 133,036
---------
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS - 12.1%
- --------------------------------------------------------------------------------
U.S. Treasury Bonds (A)
8.125%, 08/15/19 2,500 3,221
7.250%, 05/15/16 16,100 18,906
7.125%, 02/15/23 4,000 4,901
U.S. Treasury Inflation Index Note (A)
3.000%, 07/15/12 19,658 20,175
---------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $44,681) 47,203
---------
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - 10.2%
- --------------------------------------------------------------------------------
CenterPoint Energy Transition Bond Co. II,
Ser A, Cl A3
5.090%, 02/01/14 6,600 6,477
Citibank Credit Card Master Trust,
Ser 1999-2, Cl A
5.875%, 03/10/11 11,000 11,130
MBNA Credit Card Master Note Trust,
Ser 2000-L, Cl A
6.500%, 04/15/10 7,000 7,027
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - (CONTINUED)
- --------------------------------------------------------------------------------
MBNA Credit Card Master Note Trust,
Ser 2005-A7, Cl A7
4.300%, 02/15/11 $ 5,500 $ 5,451
PG&E Energy Recovery Funding,
Ser 2005-2, Cl A2
5.030%, 03/25/14 5,600 5,590
TXU Electric Delivery Transition Bond,
Ser 2004-1, Cl A3
5.290%, 05/15/18 4,000 3,939
---------
TOTAL ASSET-BACKED SECURITIES
(Cost $39,714) 39,614
---------
- --------------------------------------------------------------------------------
MASTER NOTES - 5.4%
- --------------------------------------------------------------------------------
Bank of America (B)
5.435%, 08/01/07 3,500 3,500
Bear Stearns (B)
5.575%, 08/01/07 12,500 12,500
JPMorgan (B)
5.455%, 08/15/07 5,000 5,000
---------
TOTAL MASTER NOTES
(Cost $21,000) 21,000
---------
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATION - 1.5%
- --------------------------------------------------------------------------------
FNMA
5.000%, 04/15/15 5,800 5,703
---------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATION
(Cost $5,851) 5,703
---------
- --------------------------------------------------------------------------------
COMMERCIAL PAPER - 0.7%
- --------------------------------------------------------------------------------
Autobahn Funding (B) (D)
5.501%, 08/01/07 2,905 2,905
---------
TOTAL COMMERCIAL PAPER
(Cost $2,905) 2,905
---------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 7.5%
- --------------------------------------------------------------------------------
Bank of America (B)
5.430%, dated 07/31/07, matures on
08/01/07, repurchase price $2,945,028
(collateralized by portions of various
corporate obligations, ranging in par
value from $1,076,984 - $7,672,893,
3.950% - 7.000%, 04/01/08 - 03/15/12,
total market value $3,092,058) 2,945 2,945
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
82 1.800.433.6884
- --------------------------------------------------------------------------------
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
BOND FUND (CONCLUDED)
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - (CONTINUED)
- --------------------------------------------------------------------------------
Bear Stearns (B)
5.450%, dated 07/31/07, matures on
08/01/07, repurchase price $5,000,618
(collateralized by portions of various
corporate obligations, ranging in par
value from $1,828,695 - $13,028,397,
0.000% - 6.100%, 01/25/33 - 09/25/37,
total market value $5,250,245) $ 5,000 $ 5,000
Deutsche Bank Securities
5.120%, dated 07/31/07, matures on
08/01/07, repurchase price $5,835,144
(collateralized by a U.S. Government
obligation, par value $6,003,000,
0.000%, 10/04/07, total market
value $5,951,614) 5,834 5,834
Lehman Brothers (B)
5.425%, dated 07/31/07, matures on
08/01/07, repurchase price $15,502,336
(collateralized by a mortgage obligation,
par value $17,462,427, 6.020%, 10/20/46,
total market value $15,813,960) 15,500 15,500
---------
TOTAL REPURCHASE AGREEMENTS
(Cost $29,279) 29,279
---------
TOTAL INVESTMENTS - 113.7%
(Cost $442,558) $ 442,747
=========
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PERCENTAGES ARE BASED ON NET ASSETS OF $389,357 (000).
INDUSTRY CLASSIFICATIONS ARE UNAUDITED.
(A) THIS SECURITY OR A PARTIAL POSITION OF THIS SECURITY IS ON LOAN AT JULY
31, 2007. THE TOTAL VALUE OF SECURITIES ON LOAN AT JULY 31, 2007 WAS
$48,365 (000).
(B) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES
LENDING.
(C) FLOATING RATE SECURITY. RATE DISCLOSED IS AS OF JULY 31, 2007.
(D) SECURITY SOLD WITHIN THE TERMS OF A PRIVATE PLACEMENT MEMORANDUM, EXEMPT
FROM REGISTRATION UNDER SECTION 3A-4, 4(2) OR 144A OF THE SECURITIES ACT
OF 1933 AS AMENDED, AND MAY BE SOLD ONLY TO THE DEALERS IN THAT PROGRAM OR
OTHER "ACCREDITED INVESTORS." THE VALUE OF THIS SECURITY, AS OF JULY 31,
2007, WAS $2,905 (000) AND REPRESENTED 0.7% OF NET ASSETS.
CL -- CLASS
CMO -- COLLATERALIZED MORTGAGE OBLIGATION
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
LLC -- LIMITED LIABILITY COMPANY
MTN -- MEDIUM TERM NOTE
REMIC -- REAL ESTATE MORTGAGE INVESTMENT CONDUIT
SER -- SERIES
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - 98.4%
- --------------------------------------------------------------------------------
CALIFORNIA - 98.4%
Atascadero, Unified School District,
Measure B, Capital Projects,
Ser A, COP, MBIA Insured
Callable 02/01/08 @ 101
5.200%, 08/01/08 $ 1,000 $ 1,016
Berryessa, Unified School District,
GO, MBIA Insured
5.375%, 03/01/12 460 492
Brentwood, Unified School District,
Ser B, GO, FGIC Insured
Callable 08/01/10 @ 101
4.850%, 08/01/14 410 427
Burlingame, Elementary School
District, GO, FSA Insured
5.250%, 07/15/16 795 872
California State, Department of
Transportation, Federal Highway
Grant Anticipation Bonds,
Ser A, RB, FGIC Insured
5.000%, 02/01/14 2,000 2,132
California State, Department of
Water Resources Power Supply,
Ser A, RB, AMBAC Insured
Callable 05/01/12 @ 101
5.500%, 05/01/15 1,225 1,321
California State, Department of
Water Resources, Central Valley
Project, Water System,
Ser W, RB, FSA Insured
5.500%, 12/01/14 1,315 1,453
California State, Department of
Water Resources, Central Valley
Project, Water System,
Ser Z, RB, FGIC Insured
5.000%, 12/01/12 1,000 1,061
California State, Educational Facilities
Authority, Loyola-Marymount
University, Ser A, RB, MBIA Insured
Callable 10/01/11 @ 101
4.500%, 10/01/12 1,560 1,605
California State, Educational Facilities
Authority, Stanford University,
Ser P, RB
5.250%, 12/01/13 800 866
California State, Educational Facilities
Authority, Stanford University,
Ser R, RB
5.000%, 11/01/11 610 641
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
California State, GO
6.250%, 04/01/08 $ 1,000 $ 1,017
California State, GO, FGIC Insured
4.500%, 09/01/10 1,000 1,024
California State, Public Works
Board Lease, Various University
of California Projects,
Ser A, RB, AMBAC Insured
Callable 12/01/07 @ 102
5.100%, 12/01/10 1,000 1,025
Chaffey, Unified High School District,
GO, FGIC Insured
5.000%, 08/01/15 1,000 1,076
Coast Community College,
GO, MBIA Insured
5.250%, 08/01/15 1,000 1,093
Contra Costa County, Merrithew
Memorial Hospital Project,
COP, MBIA Insured
Prerefunded @ 102 (A)
5.500%, 11/01/07 2,160 2,213
5.200%, 11/01/07 2,000 2,047
Contra Costa, Transportation Authority,
Sales Tax, Ser A, RB, FGIC Insured
6.000%, 03/01/09 1,000 1,036
Corona-Norca, Unified School District,
Election 2006, Ser A, GO, FSA Insured
5.000%, 08/01/17 500 540
Cupertino, Unified School District, GO,
FSA Insured
Callable 08/01/11 @ 100
5.250%, 08/01/13 595 628
East Bay, Municipal Utility District,
Water System Project,
RB, MBIA Insured
Prerefunded @ 100 (A)
5.250%, 06/01/11 1,750 1,846
Eastern Municipal Water District,
Ser A, COP, FGIC Insured
Callable 07/01/11 @ 100
5.375%, 07/01/16 2,120 2,236
5.375%, 07/01/17 2,410 2,539
5.250%, 07/01/12 300 316
5.250%, 07/01/13 1,000 1,053
El Camino, Community College, GO,
FSA Insured
Callable 08/01/15 @ 100
5.000%, 08/01/16 1,000 1,071
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
84 1.800.433.6884
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
Fallbrook, Unified High School District,
GO, FGIC Insured
5.375%, 09/01/12 $ 250 $ 269
Fremont, Unified High School District,
Ser B, ETM, GO
5.000%, 09/01/10 600 623
Fresno, Joint Powers Financing Authority,
Fresno City Hall, RB, AMBAC Insured
Callable 08/01/10 @ 100
4.600%, 08/01/11 500 512
Joshua Basin-Hi Desert Financing
Authority, Water District Project,
RB, AMBAC Insured
4.900%, 05/01/09 465 475
Kings River, Conservation District,
Pine Flat Power, Ser F, RB
4.625%, 01/01/11 500 513
Livermore-Amador Valley,
Water Management Authority,
Ser A, RB, AMBAC Insured
Callable 08/01/11 @ 100
5.250%, 08/01/14 750 792
5.000%, 08/01/13 400 419
Los Angeles Community College,
2003 Election, Ser E, GO FSA Insured
Callable 08/01/16 @ 100
5.000%, 08/01/17 1,000 1,072
Los Angeles County, Metropolitan
Transportation Authority, Sales Tax Project,
A-1st Senior, Ser B, RB, FSA Insured
5.250%, 07/01/11 1,550 1,636
Los Angeles County, Metropolitan
Transportation Authority, Sales Tax Project,
C-2nd Senior, Ser A, RB, AMBAC Insured
5.500%, 07/01/10 1,050 1,103
Los Angeles County, Metropolitan
Transportation Authority, Sales Tax Project,
C-2nd Senior, Ser A, RB, FGIC Insured
5.000%, 07/01/10 2,000 2,073
Los Angeles, Department of Water & Power,
Ser A-A-1, RB, MBIA Insured
5.250%, 07/01/10 1,710 1,786
5.250%, 07/01/11 3,485 3,682
Los Angeles, Department of Water & Power,
Ser A-A-1, RB, MBIA Insured
Callable 07/01/11 @ 100
5.250%, 07/01/13 2,025 2,136
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
Los Angeles, Department of Water & Power,
Ser B, RB, MBIA Insured
5.000%, 07/01/13 $ 430 $ 458
Los Angeles, Los Angeles County
Public Works, Ser A, RB
Prerefunded @ 101 (A)
5.500%, 10/01/07 1,225 1,241
Los Angeles, Ser A, GO, FGIC Insured
5.250%, 09/01/09 600 620
Los Angeles, Ser A, GO, MBIA Insured
5.250%, 09/01/11 250 264
Los Angeles, Ser B, GO, FSA Insured
Callable 09/01/15 @ 100
5.000%, 09/01/16 1,000 1,071
Los Angeles, Unified School District,
GO, MBIA Insured
5.500%, 07/01/12 755 813
Los Angeles, Unified School District,
Ser A, GO, FGIC Insured
6.000%, 07/01/11 1,385 1,497
Los Angeles, Unified School District,
Ser D, GO, FGIC Insured
Prerefunded @ 100 (A)
5.500%, 07/01/10 2,000 2,100
Los Angeles, Unified School District,
Ser E, GO, MBIA Insured
Prerefunded @ 100 (A)
5.500%, 07/01/12 1,390 1,497
Los Angeles, Waste Water Systems,
Ser C, RB, MBIA Insured
5.375%, 06/01/12 1,145 1,227
Los Gatos-Saratoga, Joint Unified
High School, Ser B, GO
Prerefunded @ 101 (A)
4.600%, 12/01/10 875 908
M-S-R Public Power Authority,
San Juan Project, Ser I, RB,
MBIA Insured
Callable 07/01/11 @ 100
5.000%, 07/01/14 2,440 2,546
Metropolitan, Water District of
Southern California, Ser A, RB
Callable 07/01/11 @ 101
5.375%, 07/01/12 2,185 2,336
Metropolitan, Water District of
Southern California, Waterworks
Project, Ser B, GO
4.000%, 03/01/11 1,000 1,011
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
Mountain View, Shoreline Regional Park
Community, Ser A, TA, MBIA Insured
Callable 09/07/07 @ 101
5.600%, 08/01/10 $ 500 $ 505
North Orange County, Community College
District, GO, MBIA Insured
5.000%, 08/01/15 1,000 1,076
Norwalk, La Mirada Unified School District,
Ser A, GO, FGIC Insured
Prerefunded @ 100 (A)
5.000%, 08/01/13 1,800 1,916
Oak Park, Unified School District,
GO, MBIA Insured
5.250%, 05/01/08 1,250 1,265
Orange County, Local Transportation
Authority, Measure M, Second
Senior, Ser A, RB, MBIA Insured
5.500%, 02/15/10 1,200 1,252
Paramount, Unified School District,
GO, FSA Insured
5.000%, 09/01/15 1,000 1,076
Port Oakland, Ser M, RB, FGIC Insured
Callable 11/01/12 @ 100
5.250%, 11/01/13 1,000 1,069
Redwood City, Elementary School
District, GO, FGIC Insured
5.500%, 08/01/10 1,140 1,200
5.500%, 08/01/14 900 991
Riverside County, Transportation
Commission, Sales Tax Revenue,
Ser A, RB, AMBAC Insured
5.750%, 06/01/09 740 768
Riverside, Community College,
GO, FSA Insured
Callable 08/01/15 @ 100
5.000%, 08/01/19 1,700 1,800
Sacramento, Municipal Utility District,
Electric, Ser C, ETM, RB, FGIC Insured
Callable 09/07/07 @ 100
5.750%, 11/15/08 570 571
Sacramento, Municipal Utility District,
Ser O, RB, MBIA Insured
5.250%, 08/15/10 500 523
Sacramento, Municipal Utility District,
Ser P, RB, FSA Insured
Callable 08/15/11 @ 100
5.250%, 08/15/13 1,585 1,677
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
Sacramento, Municipal Utility District,
Ser R, RB, MBIA Insured
5.000%, 08/15/15 $ 1,480 $ 1,592
Sacramento, Municipal Utility District,
Ser R, RB, MBIA Insured
Callable 08/15/13 @ 100
5.000%, 08/15/16 1,000 1,056
San Bernardino County, Community College
District, GO, FSA Insured
5.000%, 08/01/15 1,000 1,076
San Bernardino County, Transportation
Authority, Ser A, RB, FSA Insured
Callable 03/01/08 @ 101
5.000%, 03/01/09 1,000 1,018
San Bernardino County, Transportation
Authority, Ser A, RB, MBIA Insured
6.250%, 03/01/10 2,000 2,125
San Bernardino, Municipal Water
Department, Sewer Authority, COP,
FGIC Insured
4.500%, 02/01/09 1,025 1,038
San Bernardino, Municipal Water
Department, Sewer Authority, COP,
FGIC Insured
Callable 02/01/09 @ 101
5.000%, 02/01/11 1,130 1,162
San Diego County, Water Authority,
COP, FGIC Insured
5.250%, 05/01/16 1,310 1,430
San Diego, Public Facilities Financing
Authority, RB, MBIA Insured
Callable 08/01/12 @ 100
5.000%, 08/01/14 1,000 1,052
San Francisco City & County, Airport
Commission, International Airport,
Second Senior, Issue 20, RB,
MBIA Insured
Callable 05/01/08 @ 101
4.250%, 05/01/09 1,000 1,008
San Francisco City & County, Public Utilities
Commission, Water Revenue,
Ser A, RB, FSA Insured
5.000%, 11/01/10 1,000 1,042
5.000%, 11/01/11 1,500 1,577
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
86 1.800.433.6884
- --------------------------------------------------------------------------------
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND (CONCLUDED)
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
San Francisco City & County, Public Utilities
Commission, Water Revenue,
Ser B, RB, MBIA Insured
Callable 11/01/12 @ 100
5.000%, 11/01/15 $ 1,250 $ 1,318
San Francisco, Bay Area Rapid Transit,
RB, AMBAC Insured
Callable 07/01/11 @ 100
5.250%, 07/01/14 300 316
San Francisco, Bay Area Rapid Transit,
RB, AMBAC Insured
Prerefunded @ 100 (A)
5.250%, 07/01/11 850 898
San Joaquin County, Delta Community
College District, Election 2004,
Ser A, GO, FSA Insured
4.500%, 08/01/15 1,000 1,042
San Jose, Financing Authority,
Convention Center Project,
Ser F, RB, MBIA Insured
4.250%, 09/01/11 1,765 1,803
San Jose, Redevelopment Agency,
Merged Area Redevelopment
Project, TA, AMBAC Insured
Callable 08/01/08 @ 102
5.000%, 08/01/09 1,500 1,538
San Jose, Redevelopment Agency,
Merged Area Redevelopment
Project, TA, MBIA Insured
6.000%, 08/01/08 1,000 1,023
San Juan, Unified School District,
GO, FSA Insured
5.250%, 08/01/10 1,150 1,202
San Mateo County, Transit District,
Ser A, RB, MBIA Insured
5.250%, 06/01/16 2,000 2,200
San Mateo, Unified High School District,
Ser A, GO, FGIC Insured
Prerefunded @ 100 (A)
5.375%, 09/01/11 2,195 2,333
San Ramon Valley, Unified School District,
GO, FSA Insured
Callable 08/01/14 @ 100
5.250%, 08/01/18 1,250 1,347
Santa Ana, Community Redevelopment
Agency, Mainplace Project, Ser E,
ETM, RB
6.400%, 12/15/10 320 336
- --------------------------------------------------------------------------------
Description Par (000)/Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
Santa Maria, Joint Unified High School
District, Ser A, ETM, GO, FSA Insured
5.500%, 08/01/15 $ 510 $ 566
Solano County, Community College,
Ser A, GO, MBIA Insured
Prerefunded @ 100 (A)
5.000%, 08/01/13 1,865 1,985
South Placer, Waste Water Authority,
Ser A, RB, FGIC Insured
4.500%, 11/01/10 1,000 1,026
Southern California, Public Power
Authority, Ser A, RB, FSA Insured
5.375%, 01/01/09 1,610 1,648
Stockton, Unified School District,
Election 2005, GO, FSA Insured
5.000%, 08/01/16 645 696
Turlock, Irrigation District, Ser A, RB,
MBIA Insured
6.000%, 01/01/11 500 537
-----------
TOTAL MUNICIPAL BONDS
(Cost $119,011) 120,005
-----------
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 0.3%
- --------------------------------------------------------------------------------
BlackRock Liquidity Funds
California Money Market, 3.40% (B) 321,467 321
-----------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $322) 321
-----------
TOTAL INVESTMENTS - 98.7%
(Cost $119,333) $ 120,326
===========
- --------------------------------------------------------------------------------
PERCENTAGES ARE BASED ON NET ASSETS OF $121,937 (000).
(A) PREREFUNDED SECURITY -- THE MATURITY DATE SHOWN IS THE PREREFUNDED DATE.
(B) RATE SHOWN IS THE 7-DAY YIELD AS OF JULY 31, 2007.
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
COP -- CERTIFICATES OF PARTICIPATION
ETM -- ESCROWED TO MATURITY
FGIC -- FINANCIAL GUARANTY INSURANCE CORPORATION
FSA -- FINANCIAL SECURITY ASSURANCE
GO -- GENERAL OBLIGATION
MBIA -- MUNICIPAL BOND INVESTORS ASSURANCE
RB -- REVENUE BOND
SER -- SERIES
TA -- TAX ALLOCATION
The accompanying notes are an integral part of the financial statements.
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
NATIONAL INTERMEDIATE TAX-FREE BOND FUND
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - 98.0%
- --------------------------------------------------------------------------------
ALASKA - 0.8%
Anchorage, City of Anchorage Schools,
Ser B, GO, FGIC Insured
5.000%, 09/01/17 $ 500 $ 536
-----------
ARIZONA - 6.6%
Arizona State, Transportation Board
& Highway Revenue, Ser A, RB
Callable 07/01/12 @ 102
5.250%, 07/01/17 1,000 1,072
Phoenix, GO Prerefunded @ 101 (A)
5.000%, 07/01/09 2,370 2,447
Phoenix, Ser A, GO
6.250%, 07/01/17 1,000 1,176
-----------
4,695
-----------
CALIFORNIA - 14.3%
California State, Department of
Transportation, Federal Highway
Grant Anticipation Bonds, Ser A, RB,
FGIC Insured
5.000%, 02/01/14 1,000 1,066
California State, Department of
Water Resources, Central Valley Project,
Water System, Ser Z, RB, FGIC Insured
5.000%, 12/01/12 500 530
California State, Department of
Water Resources, Ser X, RB, FGIC Insured
5.500%, 12/01/15 600 668
California State, Educational Facilities
Authority, Loyola-Marymount University,
Ser A, RB, MBIA Insured
Callable 10/01/11 @ 101
4.500%, 10/01/12 1,000 1,029
California State, GO, FGIC Insured
5.750%, 02/01/11 1,000 1,066
Contra Costa, Water District, Ser E, RB,
AMBAC Insured
6.250%, 10/01/12 1,000 1,059
East Bay, Municipal Utility District,
Water System Project, RB, MBIA Insured
Prerefunded @ 100 (A)
5.250%, 06/01/11 800 844
Elsinore Valley, Municipal Water District,
COP, FGIC Insured
5.375%, 07/01/18 500 550
Los Angeles, Ser A, GO, MBIA Insured
5.250%, 09/01/12 375 401
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
San Jose, Redevelopment Agency,
ETM, TA, MBIA Insured
6.000%, 08/01/15 $ 330 $ 377
San Jose, Redeveopment Agency,
TA, MBIA Insured
6.000%, 08/01/15 670 764
San Ramon Valley, Unified School District,
GO, FSA Insured
Callable 08/01/14 @ 100
5.250%, 08/01/18 1,670 1,799
-----------
10,153
-----------
COLORADO - 0.5%
Regional Transportation District, Sales Tax,
Ser B, RB, AMBAC Insured
5.250%, 11/01/12 350 373
-----------
FLORIDA - 2.6%
Florida State, Board of Education,
Public Education Capital Outlay,
Ser A, GO
5.000%, 06/01/08 1,300 1,313
Jacksonville, Local Government, Sales Tax
Revenue, RB, FGIC Insured
5.500%, 10/01/13 500 543
-----------
1,856
-----------
GEORGIA - 5.1%
Atlanta, Water & Wastewater Revenue,
Ser A, RB, FGIC Insured
5.500%, 11/01/13 1,000 1,074
Georgia State, Ser E, GO
5.250%, 02/01/09 2,525 2,582
-----------
3,656
-----------
HAWAII - 6.1%
Hawaii County, Ser A, GO, FGIC Insured
Prerefunded @ 100 (A)
5.500%, 07/15/11 635 674
Hawaii State, Highway Revenue,
Ser B, RB, FSA Insured
5.000%, 07/01/15 1,000 1,067
Hawaii State, Ser CS, GO, MBIA Insured
5.000%, 04/01/08 1,000 1,008
Honolulu City & County, Ser A, GO,
FSA Insured
Prerefunded @ 100 (A)
5.375%, 09/01/11 1,000 1,058
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
88 1.800.433.6884
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
NATIONAL INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
Kauai County, Ser A, GO, MBIA Insured
Callable 08/01/11 @ 100
5.625%, 08/01/13 $ 440 $ 469
Kauai County, Ser A, GO, MBIA Insured
Prerefunded @ 100 (A)
5.625%, 08/01/11 60 64
-----------
4,340
-----------
IDAHO - 3.0%
Idaho State, Housing & Finance Authority,
Federal Highway Trust, RB, MBIA Insured
5.000%, 07/15/15 1,000 1,071
Twin Falls County, School District No. 411,
GO, MBIA Insured
5.000%, 09/15/16 1,000 1,074
-----------
2,145
-----------
ILLINOIS - 4.3%
Chicago, O'Hare International Airport,
2nd Lien, Ser C, RB, MBIA Insured
5.000%, 01/01/10 1,000 1,027
Cook County, Ser A, GO, FGIC Insured
Callable 11/15/08 @ 101
4.500%, 11/15/09 1,000 1,015
Du Page & Will Counties, Community
School District, Ser B, GO, FGIC Insured
5.000%, 12/30/07 1,000 1,005
-----------
3,047
-----------
MASSACHUSETTS - 6.0%
Massachusetts State, Consolidated Loan,
Ser C, GO
5.250%, 08/01/08 1,000 1,015
Massachusetts State, School Building
Authority, Ser A, RB, FSA Insured
5.000%, 08/15/14 1,000 1,063
Massachusetts State, Water Resources
Authority, Ser A, RB, MBIA Insured
5.250%, 08/01/15 1,000 1,084
5.250%, 08/01/16 1,000 1,089
-----------
4,251
-----------
NEVADA - 2.0%
Clark County, School District, Ser A, GO,
FSA Insured
Callable 12/15/12 @ 103
5.500%, 06/15/16 500 551
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
Las Vegas, Water District Revenue,
Ser B, GO, MBIA Insured
Callable 12/01/12 @ 100
5.250%, 06/01/14 $ 300 $ 319
Nevada State, Capital Improvements,
Ser A, GO, MBIA Insured
Callable 05/01/12 @ 100
5.000%, 11/01/16 500 522
-----------
1,392
-----------
NEW JERSEY - 3.1%
New Jersey State, Ser L, GO, AMBAC Insured
5.250%, 07/15/16 1,000 1,089
New Jersey State, Transportation Trust
Fund Authority, Ser C, ETM, RB,
MBIA Insured
5.250%, 06/15/15 1,000 1,086
-----------
2,175
-----------
NEW YORK - 3.0%
New York State Thruway Authority,
Highway & Board, Ser A, RB,
MBIA Insured
Callable 04/01/14 @ 100
5.000%, 04/01/18 1,000 1,054
New York State, Ser M, GO, FSA Insured
5.000%, 04/01/15 1,000 1,068
-----------
2,122
-----------
OREGON - 9.0%
Chemeketa, Community College District,
ETM, GO, FGIC Insured
5.500%, 06/01/12 1,060 1,135
Jackson County, Juvenile Services Center,
GO, FSA Insured
5.000%, 06/01/10 1,000 1,033
McMinnville, School District No. 40,
GO, FSA Insured
5.000%, 06/15/11 1,000 1,043
Washington County, School District
Authority, No. 15, GO, FSA Insured
5.000%, 06/15/14 1,000 1,064
Washington, Multnomah & Yamill Counties,
School District Authority, GO,
MBIA Insured
5.000%, 06/01/11 1,000 1,042
The accompanying notes are an integral part of the financial statements.
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
NATIONAL INTERMEDIATE TAX-FREE BOND FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
Yamhill County, School District Authority,
No. 29J, GO, FGIC Insured
5.250%, 06/15/16 $ 1,000 $ 1,091
-----------
6,408
-----------
PENNSYLVANIA - 3.3%
Pennsylvania State, First Ser, GO,
MBIA Insured
5.000%, 06/01/09 1,100 1,124
Pennsylvania State, Second Ser, GO
5.250%, 10/01/09 1,155 1,190
-----------
2,314
-----------
TENNESSEE - 1.4%
Johnson City, Water & Sewer System,
GO, FGIC Insured
5.250%, 06/01/08 1,000 1,012
-----------
TEXAS - 6.2%
Houston, Texas Utility System Revenue,
First Lien, Ser A, RB, FSA Insured
5.250%, 11/15/17 1,000 1,093
Lamar, Consolidated Independent
School District, Schoolhouse, GO,
PSF Insured
5.000%, 02/15/17 500 532
North East Independent School District,
School Building, Ser A, GO, PSF Insured
5.000%, 08/01/17 500 534
San Antonio, Water Revenue, RB,
FGIC Insured
5.000%, 05/15/17 1,000 1,070
Texas State, University Systems,
Revenue Financing System, RB,
FSA Insured
Prerefunded @ 100 (A)
4.800%, 03/15/10 1,170 1,199
-----------
4,428
-----------
UTAH - 2.2%
Utah State, Board Regents Auxiliary
& Campus Facilities Revenue,
Ser A, RB, MBIA Insured
Callable 04/01/15 @ 100
5.000%, 04/01/17 1,500 1,585
-----------
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
VIRGINIA - 1.4%
Virginia State, Northern Virginia
Transportation Board, Ser A, RB
Callable 09/07/07 @ 100.50
5.000%, 05/15/08 $ 1,000 $ 1,009
-----------
WASHINGTON - 14.2%
King & Snohomish Counties,
School District Authority, GO,
FGIC Insured
Callable 12/01/07 @ 100
5.250%, 12/01/09 1,125 1,130
King & Snohomish Counties,
School District Authority, GO,
FGIC Insured
Prerefunded @ 100 (A)
5.250%, 12/01/07 1,000 1,005
King County, School District No. 408,
GO, AMBAC Insured
6.000%, 12/01/08 1,000 1,029
King County, School District No. 410,
GO, FGIC Insured
5.500%, 12/01/10 1,285 1,352
Pierce County, GO, AMBAC Insured
Callable 08/01/15 @ 100
5.125%, 08/01/16 1,375 1,472
Seattle, Limited Tax, Ser B, ETM, GO
5.500%, 03/01/11 65 69
Seattle, Limited Tax, Ser B, GO
5.500%, 03/01/11 1,935 2,042
Seattle, Municipal Light & Power
Revenue Authority, Ser B, RB,
MBIA Insured
Callable 06/01/08 @ 101
4.750%, 06/01/09 1,000 1,018
Skagit County, School District No. 103,
GO, FGIC Insured
6.250%, 12/01/07 1,000 1,008
-----------
10,125
-----------
WISCONSIN - 2.9%
Milwaukee, Metropolitan Sewage District,
Ser A, GO
5.500%, 10/01/08 2,000 2,038
-----------
TOTAL MUNICIPAL BONDS
(Cost $69,128) 69,660
-----------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
90 1.800.433.6884
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
NATIONAL INTERMEDIATE TAX-FREE BOND FUND (CONCLUDED)
- --------------------------------------------------------------------------------
Description Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY - 1.5%
- --------------------------------------------------------------------------------
BlackRock Liquidity Funds
California Money Market, 3.40% (B) 1,026,223 $ 1,026
-----------
TOTAL REGISTERED INVESTMENT COMPANY
(Cost $1,026) 1,026
-----------
TOTAL INVESTMENTS - 99.5%
(Cost $70,154) $ 70,686
===========
- --------------------------------------------------------------------------------
PERCENTAGES ARE BASED ON NET ASSETS OF $71,061 (000).
GEOGRAPHIC CLASSIFICATIONS ARE UNAUDITED.
(A) PREREFUNDED SECURITY -- THE MATURITY DATE SHOWN IS THE PREREFUNDED DATE.
(B) RATE SHOWN IS THE 7-DAY YIELD AS OF JULY 31, 2007.
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
COP -- CERTIFICATES OF PARTICIPATION
ETM -- ESCROWED TO MATURITY
FGIC -- FINANCIAL GUARANTY INSURANCE CORPORATION
FSA -- FINANCIAL SECURITY ASSURANCE
GO -- GENERAL OBLIGATION
MBIA -- MUNICIPAL BOND INVESTORS ASSURANCE
PSF -- PRIORITY SOLIDARITY FUND
RB -- REVENUE BOND
SER -- SERIES
TA -- TAX ALLOCATION
The accompanying notes are an integral part of the financial statements.
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
SHORT TERM BOND FUND
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS - 34.8%
- --------------------------------------------------------------------------------
FHLMC 7 Year Balloon
3.500%, 08/01/10 $ 473 $ 452
FHLMC Gold
6.000%, 01/01/13 275 278
6.000%, 09/01/13 60 60
6.000%, 04/01/14 111 112
6.000%, 05/01/14 702 709
6.000%, 07/01/14 366 369
6.000%, 10/01/16 285 287
6.000%, 04/01/17 964 971
5.500%, 07/01/15 1,106 1,101
5.500%, 03/01/17 282 280
5.500%, 12/01/17 28 28
5.500%, 02/01/18 295 293
5.500%, 11/01/18 26 25
5.000%, 10/01/18 798 778
FHLMC, ARM
4.776%, 03/01/35 556 549
4.547%, 01/01/34 923 920
FHLMC, CMO REMIC, Ser 2722, Cl PA
4.000%, 02/15/21 188 187
FHLMC, CMO REMIC, Ser 2734, Cl JC
3.500%, 11/15/23 94 92
FHLMC, CMO REMIC, Ser 2743, Cl NL
3.000%, 05/15/23 309 304
FHLMC, CMO REMIC, Ser 2836, Cl QC
5.000%, 09/15/22 349 347
FHLMC, CMO REMIC, Ser 2844, Cl PQ
5.000%, 05/15/23 280 279
FNMA
8.000%, 06/01/30 8 9
8.000%, 11/01/30 5 5
6.500%, 06/01/16 125 128
6.500%, 07/01/16 90 92
6.500%, 11/01/16 81 83
6.500%, 01/01/17 85 87
6.500%, 02/01/17 33 34
6.500%, 04/01/17 118 121
6.500%, 07/01/17 99 101
6.000%, 04/01/16 439 442
6.000%, 05/01/16 1,103 1,111
6.000%, 06/01/16 55 55
6.000%, 08/01/16 92 92
6.000%, 10/01/16 220 222
5.500%, 07/01/14 434 432
5.500%, 09/01/14 676 672
5.500%, 08/01/15 1,430 1,423
5.500%, 12/01/16 117 116
5.500%, 01/01/17 859 853
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS -(CONTINUED)
- --------------------------------------------------------------------------------
FNMA - (continued)
5.500%, 09/01/17 $ 883 $ 876
5.500%, 10/01/17 172 171
5.500%, 11/01/17 308 306
5.500%, 12/01/17 162 161
5.500%, 02/01/18 20 20
5.500%, 04/01/18 42 42
5.500%, 10/01/18 56 56
5.000%, 07/01/14 102 100
5.000%, 05/01/18 49 47
5.000%, 06/01/18 183 179
FNMA, ARM
5.549%, 08/01/27 53 53
3.536%, 09/01/33 436 432
FNMA, CMO REMIC, Ser 45, Cl NM
4.500%, 06/25/24 480 475
GNMA, CMO REMIC, Ser 25, Cl AC
3.377%, 01/16/23 1,359 1,319
GNMA, CMO REMIC, Ser 51, Cl A
4.145%, 02/16/18 275 271
GNMA, CMO REMIC, Ser 77, Cl A
3.402%, 03/16/20 645 629
-------
TOTAL U.S. GOVERNMENT AGENCY MORTGAGE-
BACKED OBLIGATIONS
(Cost $19,777)
19,636
-------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - 26.1%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 2.8%
Comcast Cable Communication
6.200%, 11/15/08 300 303
News America Holdings
7.375%, 10/17/08 450 458
Time Warner Entertainment
7.250%, 09/01/08 300 306
Wal-Mart Stores
6.875%, 08/10/09 500 517
--------
1,584
--------
CONSUMER STAPLES - 1.5%
Kellogg
2.875%, 06/01/08 350 342
Procter & Gamble
6.875%, 09/15/09 500 517
--------
859
--------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
92 1.800.433.6884
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
SHORT TERM BOND FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
- --------------------------------------------------------------------------------
FINANCIALS - 12.4%
Associates
6.250%, 11/01/08 $ 40 $ 40
Bank of America
5.875%, 02/15/09 1,000 1,010
Bank One
6.000%, 08/01/08 350 352
Caterpillar Financial Services, MTN, Ser F
3.700%, 08/15/08 450 442
CIT Group
4.000%, 05/08/08 300 296
Citigroup
6.200%, 03/15/09 1,000 1,016
General Electric Capital, MTN, Ser A
4.250%, 01/15/08 500 498
Golden West Financial
4.125%, 08/15/07 205 205
HSBC Bank USA
3.875%, 09/15/09 1,000 970
John Deere Capital, MTN
3.375%, 10/01/07 300 299
John Hancock Financial Services
5.625%, 12/01/08 204 205
U.S. Bancorp
6.875%, 09/15/07 227 227
Wachovia
3.625%, 02/17/09 1,000 975
Wells Fargo
3.125%, 04/01/09 500 483
--------
7,018
--------
FOREIGN GOVERNMENTS - 0.9%
Quebec Province
5.000%, 07/17/09 500 500
--------
HEALTH CARE - 1.7%
United Health Group
3.300%, 01/30/08 500 496
Wellpoint
4.250%, 12/15/09 500 486
--------
982
--------
INDUSTRIALS - 0.4%
Raytheon
6.750%, 08/15/07 250 250
--------
INFORMATION TECHNOLOGY - 0.9%
International Business Machines
5.375%, 02/01/09 500 501
--------
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - (CONTINUED)
- --------------------------------------------------------------------------------
TELECOMMUNICATION - 1.8%
AT&T
4.125%, 09/15/09 $ 500 $ 488
Sprint Capital
6.125%, 11/15/08 500 503
--------
991
--------
UTILITIES - 3.7%
Carolina Power & Light
5.950%, 03/01/09 500 504
Consolidated Edison of New York, Ser 98-A
6.250%, 02/01/08 300 301
Dominion Resources
4.125%, 02/15/08 350 347
MidAmerican Energy Holdings, Ser B
7.520%, 09/15/08 500 511
Ohio Edison
4.000%, 05/01/08 400 396
--------
2,059
--------
TOTAL CORPORATE OBLIGATIONS
(Cost $14,780) 14,744
--------
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - 17.2%
- --------------------------------------------------------------------------------
Bank One Issuance Trust,
Ser 2003-A9, Cl A9
3.860%, 06/15/11 1,000 985
Bear Stearns Commercial Mortgage
CMO, Ser 2001-TOP4, Cl A1
5.060%, 11/15/16 308 306
CenterPoint Energy Transition Bond
Co. II, Ser A-1
4.840%, 02/01/09 360 359
Citibank Credit Card Issuance Trust,
Ser 2003-A3, Cl A3
3.100%, 03/10/10 705 696
Citibank Credit Card Issuance Trust,
Ser 2004-A4, Cl A4
3.200%, 08/24/09 200 200
Citibank Credit Card Master Trust,
Ser 1999-2, Cl A
5.875%, 03/10/11 1,500 1,518
Comed Transitional Funding Trust,
Ser 1998-1, Cl A7
5.740%, 12/25/10 500 501
Harley-Davidson Motorcycle Trust,
Ser 2005-2, Cl A2
4.070%, 02/15/12 925 914
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
SHORT TERM BOND FUND (CONCLUDED)
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - (CONTINUED)
- --------------------------------------------------------------------------------
MBNA Credit Card Master Note Trust,
Ser 2000-L, Cl A
6.500%, 04/15/10 $ 710 $ 713
MBNA Credit Card Master Note Trust,
Ser 2003-A11, Cl A11
3.650%, 03/15/11 725 713
MBNA Credit Card Master Note Trust,
Ser 2005-A7, Cl A7
4.300%, 02/15/11 590 585
Peco Energy Transition Trust,
Ser A, Cl A-1
6.520%, 12/31/10 500 518
PG&E Energy Recovery Funding Trust,
Ser 2005-1, Cl A2
3.870%, 06/25/11 490 484
TXU Electric Delivery Transition Trust,
Ser 2004-1, Cl A1
3.520%, 11/15/11 235 231
Washington Mutual CMO,
Ser 2005-8, Cl 1A8
5.500%, 10/25/35 463 461
Washington Mutual CMO,
Ser 2005-AR4, Cl A3
4.585%, 04/25/35 500 492
--------
TOTAL ASSET-BACKED SECURITIES
(Cost $9,678) 9,676
--------
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 12.4%
- --------------------------------------------------------------------------------
FHLMC
5.000%, 09/16/08 2,000 1,999
FNMA (A)
6.375%, 06/15/09 1,000 1,025
FNMA
6.000%, 05/15/08 2,000 2,012
3.875%, 07/15/08 2,000 1,978
--------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $7,033) 7,014
--------
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS - 3.2%
- --------------------------------------------------------------------------------
U.S. Treasury Inflation Index Note (A)
3.875%, 01/15/09 1,268 1,284
U.S. Treasury Note (A)
3.000%, 11/15/07 500 497
--------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $1,821) 1,781
--------
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 9.9%
- --------------------------------------------------------------------------------
Bank of America (B)
5.430%, dated 07/31/07, matures on
08/01/07, repurchase price $2,053,000
(collateralized by portions of various
corporate obligations, ranging in par
value from $750,773 - $5,348,828,
3.950% - 7.000%, 04/01/08 - 03/15/12,
total market value $2,155,496) $ 2,053 $ 2,053
Bear Stearns (B)
5.450%, dated 07/31/07, matures on
08/01/07, repurchase price $500,062
(collateralized by portions of various
corporate obligations, ranging in par
value from $182,870 - $1,302,840,
0.000% - 6.100%, 01/25/33 - 09/25/37,
total market value $525,024) 500 500
Deutsche Bank Securities,
5.120%, dated 07/31/07, matures on
08/01/07, repurchase price $3,009,809
(collateralized by a U.S. Government
obligation, par value $3,144,000, 0.000%,
01/24/08, total market value $3,070,273) 3,009 3,009
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $5,562) 5,562
--------
TOTAL INVESTMENTS - 103.6%
(Cost $58,651) $ 58,413
========
- --------------------------------------------------------------------------------
PERCENTAGES ARE BASED ON NET ASSETS OF $56,399 (000).
INDUSTRY CLASSIFICATIONS ARE UNAUDITED.
(A) THIS SECURITY OR PARTIAL POSITION OF THIS SECURITY IS ON LOAN AT JULY 31,
2007. THE TOTAL VALUE OF SECURITIES ON LOAN AT JULY 31, 2007 IS $2,231
(000).
(B) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES
LENDING.
ARM -- ADJUSTABLE RATE MORTGAGE
CL -- CLASS
CMO -- COLLATERALIZED MORTGAGE OBLIGATION
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
MTN -- MEDIUM TERM NOTE
REMIC -- REAL ESTATE MORTGAGE INVESTMENT CONDUIT
SER -- SERIES
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
CALIFORNIA TAX-FREE MONEY MARKET FUND
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - 98.1%
- --------------------------------------------------------------------------------
CALIFORNIA - 87.3%
ABAG, Multi-Family Housing Finance
Authority, Non-Profit, Episcopal Homes
Foundation, COP (A) (B) (C)
3.530%, 02/01/25 $ 5,550 $ 5,550
Alameda County, Industrial Development
Authority Revenue, Ettore Products
Company Project, Ser A, RB,
AMT (A) (B) (C)
3.710%, 12/01/30 4,000 4,000
California Communities Note Program,
Ser A-1, TRAN
4.500%, 06/30/08 6,000 6,045
California School Cash Reserve Program,
2007 - 2008, Ser A, TRAN
4.250%, 07/01/08 5,000 5,028
California State, Department of Water
& Power, Ser C-11, RB (A) (B) (C)
3.530%, 05/01/22 4,200 4,200
California State, Department of Water
& Power, Ser C-18, RB (A) (B) (C)
3.550%, 05/01/22 19,000 19,000
California State, Department of Water
& Power, Ser C-2, RB, AMBAC
Insured (A) (B) (C)
3.550%, 05/01/22 24,200 24,200
California State, Department of Water
& Power, Ser C-8, RB (A) (B) (C)
3.530%, 05/01/22 13,350 13,350
California State, Department of Water
& Power, Ser C-9, RB (A) (B) (C)
3.520%, 05/01/22 6,000 6,000
California State, Department of Water
& Power, Ser G-12, RB,
FGIC Insured (A) (B) (C)
3.550%, 05/01/18 13,900 13,900
California State, Department of Water
& Power, Ser G-3, RB,
FSA Insured (A) (B) (C)
3.540%, 05/01/16 8,480 8,480
California State, Department of Water
& Power, Ser G-6, RB,
FSA Insured (A) (B) (C)
3.540%, 05/01/17 6,100 6,100
California State, Department of Water
& Power, Ser G-8, RB,
MBIA Insured (A) (B) (C)
3.560%, 05/01/18 10,700 10,700
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
California State, Department of Water
& Power, Ser G-9, RB,
MBIA Insured (A) (B) (C)
3.540%, 05/01/18 $ 4,100 $ 4,100
California State, Department of Water,
TECP (C)
3.650%, 08/01/07 10,000 10,000
3.700%, 08/09/07 4,919 4,919
California State, Economic Recovery,
Ser C-11, RB (A) (B) (C)
3.550%, 07/01/23 12,980 12,980
California State, Educational Facilities
Authority, California Institute of
Technology, RB (A) (B)
3.540%, 01/01/24 19,000 19,000
California State, Educational Facilities
Authority, Pomona College,
Ser B, RB (A) (B)
3.540%, 07/01/54 2,500 2,500
California State, Housing Finance Agency,
Home Mortgage, Ser F, RB, AMT,
AMBAC Insured (A) (B)
3.700%, 02/01/33 200 200
California State, Housing Finance Agency,
Ser B, RB (A) (B)
3.560%, 02/01/35 18,400 18,400
California State, Kindergarten University,
Ser B-2, GO (A) (B) (C)
3.630%, 05/01/34 3,500 3,500
California State, Pollution Control Financing
Authority, Pacific Gas & Electric Project,
Ser C, RB (A) (B) (C)
3.620%, 11/01/26 5,000 5,000
California State, Ser B-1, GO (A) (B) (C)
3.540%, 05/01/40 15,750 15,750
California State, Ser B-5, GO (A) (B) (C)
3.530%, 05/01/40 20,900 20,900
California Statewide, Communities
Development Authority, Sweep Loan
Program, Ser A (A)
3.550%, 08/01/35 10,300 10,300
East Bay, TECP (C)
3.640%, 08/10/07 4,000 4,000
Grant, Joint Unified High School District,
School Facilities Funding Program, COP,
FSA Insured (A) (B)
3.530%, 06/01/27 3,000 3,000
3.530%, 06/01/35 3,000 3,000
3.530%, 06/01/41 3,000 3,000
The accompanying notes are an integral part of the financial statements.
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
CALIFORNIA TAX-FREE MONEY MARKET FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
Irvine County, Improvement Bond Act
of 1915, Special Public Assessment
District #85-7-I, FSA Insured (A) (B) (C)
3.580%, 09/02/11 $ 2,505 $ 2,505
Irvine County, Improvement Bond Act
of 1915, Special Public Assessment
District #89-10 (A) (B) (C)
3.580%, 09/02/15 3,400 3,400
Irvine, Public Facilities & Infrastructure
Authority, Capital Improvement Project,
RB (A) (B) (C)
3.580%, 11/01/10 5,800 5,800
Los Angeles County, Multi-Family Housing
Authority, Castaic Senior Apartments
Project, Ser C, RB, AMT, FNMA Insured
(A) (B) (C)
3.620%, 07/15/36 9,300 9,300
Los Angeles County, Regional Parks & Open
Spaces, Ser A, RB (B)
5.000%, 10/01/19 3,635 3,680
Los Angeles County, TRAN
4.500%, 06/30/08 5,000 5,039
Los Angeles, Department of Water & Power,
Sub-Ser B-4, RB (A) (B) (C)
3.580%, 07/01/35 4,200 4,200
Los Angeles, Multi-Family Housing Authority,
1984 Issue A, RB (A) (B)
3.500%, 07/01/14 3,000 3,000
Los Angeles, Multi-Family Housing Authority,
Fountain Park Project, RB, AMT (A) (B) (C)
3.600%, 04/15/33 11,000 11,000
Los Angeles, Multi-Family Housing Authority,
Fountain Park, Phase II, Ser B, RB, AMT,
FNMA Insured (A) (B) (C)
3.630%, 03/15/34 3,400 3,400
Los Angeles, TECP (C)
3.670%, 09/12/07 6,000 6,000
Los Angeles, Waste Water Authority,
Sub-Ser A, RB, FGIC Insured (A) (B)
3.530%, 12/01/31 6,000 6,000
Metropolitan, Water District of
Southern California, Ser C, RB (A) (B) (C)
3.530%, 07/01/28 9,900 9,900
Northern California, Ore Transmission,
Ser A, RB, FSA Insured (A) (B)
3.530%, 05/01/24 6,005 6,005
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
Northern California, Power Agency Revenue,
Hydroelectric, Ser 1-B, RB,
MBIA Insured (A) (B)
3.550%, 07/01/23 $ 14,550 $ 14,550
Northern California, TECP (C)
3.610%, 09/12/07 11,800 11,800
Oakland, Capital Equipment Project,
COP (A) (B) (C)
3.580%, 12/01/15 5,600 5,600
Ontario, Multi-Family Housing Authority,
Residential Park Centre Project, RB,
FHLMC Insured (A) (B) (C)
3.540%, 12/01/35 23,500 23,500
Orange County, Apartment Development
Revenue, WLCO LF Partners, Ser G-1,
RB, FNMA Insured (A) (B) (C)
3.540%, 11/15/28 4,100 4,100
Orange County, Apartment Development
Revenue, WLCO LF Partners, Ser G-2,
RB, FNMA Insured (A) (B) (C)
3.540%, 11/15/28 1,000 1,000
Orange County, Special Financing Authority,
Ser B, RB, AMBAC Insured (A) (B) (C)
3.530%, 11/01/14 1,500 1,500
Oxnard, Multi-Family Housing Authority,
Seawind Apartments Projects, Ser A, RB,
AMT, FNMA Insured (A) (B) (C)
3.650%, 12/01/20 3,175 3,175
Redondo Beach, Multi-Family Housing
Authority, McCandless Senior Housing
Project, Ser A, RB (A) (B) (C)
3.650%, 12/01/25 6,890 6,890
Riverside County, Public Facilities Authority,
Ser A, COP (A) (B) (C)
3.570%, 12/01/15 11,100 11,100
Sacramento, City Financing Authority,
Ser G, RB, AMBAC Insured (B) (C)
3.620%, 05/01/16 5,700 5,700
Sacramento, Unified School District,
COP, FSA Insured (A) (B) (C)
3.580%, 03/01/31 5,750 5,750
San Diego County & School District,
Ser A, TRAN
4.500%, 06/30/08 2,000 2,016
San Diego, Community College,
Election 2006, GO (D)
4.250%, 08/01/08 2,000 2,013
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
CALIFORNIA TAX-FREE MONEY MARKET FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
San Diego, Department of Water, TECP (C)
3.640%, 12/12/07 $ 2,000 $ 2,000
San Francisco City & County, Multi-Family
Housing, Orlando Cepeda Place, Ser D,
AMT, RB (A) (B) (C)
3.710%, 11/01/33 11,825 11,825
San Francisco City & County,
Redevelopment Authority, Fillmore
Housing Center Project, Ser A-1, RB,
FHLMC Insured (A) (B) (C)
3.550%, 12/01/17 11,900 11,900
San Gabriel, TECP (C)
3.710%, 08/10/07 3,100 3,100
Santa Clara County, El Camino Hospital
District Lease Authority, Valley Medical
Center Project, Ser A, RB (A) (B) (C)
3.570%, 08/01/15 7,400 7,400
Santa Clara County, El Camino Hospital,
Valley Medical Center Project, Ser B,
RB (A) (B) (C)
3.570%, 08/01/15 12,300 12,300
Simi Valley, Multi-Family Housing Authority,
Lincoln Wood Ranch, RB, FHLMC Insured
(A) (B) (C)
3.540%, 06/01/10 3,500 3,500
Turlock, Irrigation District Authority,
Capital Improvement and Refinancing
Authority Project, COP (A) (B) (C)
3.610%, 01/01/31 2,900 2,900
University of California, TECP (C)
3.620%, 08/06/07 10,000 10,000
3.650%, 09/12/07 6,600 6,600
3.650%, 10/17/07 5,000 5,000
Ventura County, TRAN
4.500%, 07/01/08 5,000 5,039
Vernon, Natural Gas Financing Authority,
Vernon Gas Project, Ser B, RB,
MBIA Insured (A) (B) (C)
3.530%, 08/01/21 8,485 8,485
----------
535,074
----------
LOUISIANA - 2.7%
Calcasieu Parish, Land Development,
Citgo Petroleum Corp Project, RB,
AMT (A) (B) (C)
3.740%, 07/01/26 6,000 6,000
3.740%, 12/01/24 10,200 10,200
----------
16,200
----------
- --------------------------------------------------------------------------------
Description Par (000)/Shares Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - (CONTINUED)
- --------------------------------------------------------------------------------
SOUTH CAROLINA - 2.8%
Florence County, Solid Waste, Roche
Carolina Inc., RB, AMT (A) (B) (C)
3.740%, 04/01/27 $ 12,650 $ 12,650
3.740%, 04/01/28 4,750 4,750
----------
17,400
----------
TEXAS - 5.3%
Gulf Coast, Industrial Development
Authority, Citgo Petroleum Corp
Project, RB, AMT (A) (B) (C)
3.740%, 04/01/26 9,900 9,900
3.740%, 02/01/32 12,000 12,000
Port Corpus Christi, Industrial
Development Authority, Citgo
Petroleum Corp Project, RB,
AMT (A) (B) (C)
3.740%, 08/01/28 10,700 10,700
----------
32,600
----------
TOTAL MUNICIPAL BONDS
(Cost $601,274)
601,274
----------
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANIES - 0.0%
- --------------------------------------------------------------------------------
BlackRock Liquidity Funds
California Money Market, 3.40% (E) 206,021 206
Goldman Sachs ILA Tax-Exempt
California Portfolio, 3.16% (E) 6,450 6
----------
TOTAL REGISTERED INVESTMENT COMPANIES
(Cost $212) 212
----------
TOTAL INVESTMENTS - 98.1%
(Cost $601,486) $ 601,486
==========
The accompanying notes are an integral part of the financial statements.
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
CALIFORNIA TAX-FREE MONEY MARKET FUND (CONCLUDED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PERCENTAGES ARE BASED ON NET ASSETS OF $613,022 (000).
GEOGRAPHIC CLASSIFICATIONS ARE UNAUDITED.
(A) FLOATING RATE SECURITY. RATE DISCLOSED IS AS OF JULY 31, 2007.
(B) PUT AND DEMAND FEATURE -- THE DATE REPORTED IS THE FINAL MATURITY, NOT THE
NEXT RESET OR PUT DATE.
(C) SECURITIES ARE HELD IN CONJUNCTION WITH A LETTER OF CREDIT OR A LIQUIDITY
AGREEMENT BY A MAJOR COMMERCIAL BANK OR FINANCIAL INSTITUTION.
(D) SECURITY PURCHASED ON A WHEN-ISSUED BASIS.
(E) RATE SHOWN IS THE 7-DAY YIELD AS OF JULY 31, 2007.
ABAG -- ASSOCIATION OF BAY AREA GOVERNMENTS
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
AMT -- ALTERNATIVE MINIMUM TAX
COP -- CERTIFICATES OF PARTICIPATION
FGIC -- FINANCIAL GUARANTY INSURANCE CORPORATION
FHLMC --FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
FSA -- FINANCIAL SECURITY ASSURANCE
GO -- GENERAL OBLIGATION
MBIA -- MUNICIPAL BOND INVESTORS ASSURANCE
RB -- REVENUE BOND
SER -- SERIES
TECP -- TAX-EXEMPT COMMERCIAL PAPER
TRAN -- TAX AND REVENUE ANTICIPATION NOTE
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
DIVERSIFIED MONEY MARKET FUND
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMERCIAL PAPER - DISCOUNTED * - 78.4%
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITY - DIVERSIFIED FINANCIAL ASSETS - 23.8%
Aquifer Funding LLC (A)
5.335%, 08/07/07 $ 75,000 $ 74,934
Bavaria Universal Funding Corp. (A)
5.324%, 08/15/07 65,000 64,866
5.351%, 10/18/07 26,680 26,375
5.351%, 10/22/07 40,540 40,052
Giro Balanced Funding Corp.
5.323%, 08/14/07 140,000 139,732
Greyhawk Funding LLC (A)
5.314%, 08/16/07 106,048 105,814
5.311%, 08/21/07 30,000 29,912
Quatro-PMX Funding Corp. (A)
5.345%, 08/20/07 20,000 19,944
5.354%, 08/22/07 55,230 55,058
Rhineland Funding Capital Corp. (A)
5.347%, 08/14/07 70,000 69,867
5.351%, 08/20/07 25,000 24,930
5.361%, 08/27/07 46,885 46,706
----------
698,190
----------
ASSET-BACKED SECURITY - GOVERNMENT - 4.7%
Govco LLC (A)
5.308%, 08/20/07 50,000 49,862
5.321%, 09/10/07 50,000 49,708
5.361%, 12/31/07 40,000 39,118
----------
138,688
----------
ASSET-BACKED SECURITY - TRADE RECEIVABLES - 24.7%
Apreco LLC (A)
5.326%, 08/10/07 70,000 69,908
5.321%, 08/15/07 15,000 14,969
5.335%, 09/10/07 50,000 49,707
Cedar Springs Capital Co. LLC (A)
5.326%, 08/13/07 36,976 36,911
5.324%, 08/24/07 20,000 19,932
5.340%, 08/28/07 47,986 47,796
5.351%, 10/17/07 35,000 34,605
CRC Funding LLC (A)
5.321%, 08/16/07 60,000 59,868
Falcon Asset Securitization Corp. LLC
5.329%, 09/28/07 75,000 74,362
Legacy Capital LLC (A)
5.324%, 08/13/07 125,000 124,780
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMERCIAL PAPER - DISCOUNTED * - (CONTINUED)
- --------------------------------------------------------------------------------
Park Avenue Receivables (A)
5.317%, 08/16/07 $ 55,278 $ 55,156
Ranger Funding Co. LLC (A)
5.310%, 08/31/07 65,000 64,714
5.331%, 09/05/07 70,000
69,641
----------
722,349
----------
BANKING - 18.5%
Bavaria TRR Corp., Guarantee:
Bayersche Hypo Vereinsbank (A)
5.312%, 08/09/07 50,185 50,126
5.312%, 08/10/07 60,000 59,921
KBC Financial Products
International Ltd. (A)
5.326%, 11/26/07 98,600 96,924
Long Lane Master Trust, Guarantee:
Bank of America (A)
5.313%, 08/10/07 20,051 20,024
5.325%, 08/27/07 30,000 29,885
Old Slip Funding Corp. LLC, Guarantee:
Bank of New York (A)
5.313%, 08/17/07 13,260 13,229
5.336%, 08/29/07 47,820 47,622
Societe Generale North America
5.380%, 08/01/07 140,000 140,000
Ticonderoga Funding LLC, Guarantee:
Bank of America (A)
5.307%, 08/17/07 85,000 84,801
----------
542,532
----------
FINANCIAL SERVICES - 4.8%
Countrywide Financial Corp.
5.470%, 08/01/07 140,000 140,000
----------
140,000
----------
MULTIPLE INDUSTRY - 1.9%
General Electric Capital Corp.
5.350%, 08/01/07 55,000 55,000
----------
55,000
----------
TOTAL COMMERCIAL PAPER - DISCOUNTED
(Cost $2,296,759)
2,296,759
----------
The accompanying notes are an integral part of the financial statements.
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
DIVERSIFIED MONEY MARKET FUND (CONTINUED)
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT - DOMESTIC - 7.5%
- --------------------------------------------------------------------------------
Charter One Bank N.A.
5.320%, 08/29/07 $ 36,000 $ 36,000
Citibank N.A.
5.320%, 09/13/07 50,000 50,000
5.320%, 10/30/07 90,000 90,000
Citizens Bank of Massachusetts
5.315%, 08/09/07 42,000 42,000
----------
TOTAL CERTIFICATES OF DEPOSIT - DOMESTIC
(Cost $218,000)
218,000
----------
- --------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT - YANKEE - 7.3%
- --------------------------------------------------------------------------------
Barclays Bank Plc NY
5.330%, 10/03/07 75,000 75,000
5.315%, 10/22/07 60,000 60,000
Deutsche Bank NY
5.350%, 01/30/08 30,000 29,976
Norinchukin Bank NY
5.320%, 08/20/07 50,000 50,000
----------
TOTAL CERTIFICATES OF DEPOSIT - YANKEE
(Cost $214,976)
214,976
----------
- --------------------------------------------------------------------------------
COMMERCIAL PAPER - INTEREST BEARING - 3.4%
- --------------------------------------------------------------------------------
BROKERAGE - 3.4%
Goldman Sachs Group Inc. (A) (B)
5.350%, 01/07/08 50,000 50,000
Goldman Sachs Group L.P. (A) (B)
5.470%, 07/11/08 50,000 50,000
----------
TOTAL COMMERCIAL PAPER - INTEREST BEARING
(Cost $100,000)
100,000
----------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - 1.6%
- --------------------------------------------------------------------------------
BANKING - 1.4%
Nationwide Building Society,
MTN (A) (C) (D)
5.370%, 07/03/08 40,000 40,000
----------
INSURANCE - 0.2%
Meridian Funding Co. LLC, MTN,
Guarantee: MBIA, (A) (B) (C) (D)
5.470%, 08/27/08 6,380 6,380
----------
TOTAL CORPORATE OBLIGATIONS
(Cost $46,380) 46,380
----------
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES - 1.3%
- --------------------------------------------------------------------------------
BANKING - 0.7%
Alaska State, Four Dam Pool,
Ser B, RB (C) (E) (F)
5.350%, 07/01/26 $ 7,400 $ 7,400
Holland-Sheltair Av Funding (C) (E) (F)
5.350%, 05/01/35 7,645 7,645
New Belgium Brewery Co. (C) (E) (F)
5.500%, 07/01/15 2,205 2,205
Washington State, Housing Finance
Community, Multi-Family Housing,
The Lodge at Eagle Ridge, Ser B,
RB (C) (E) (F)
5.340%, 08/01/41 4,065
4,065
----------
21,315
----------
INSURANCE - 0.6%
Connecticut State, Housing Finance
Authority, RB (C) (E) (F)
5.320%, 11/15/16 4,400 4,400
North Carolina State, Education Assistance
Authority, Student Loan, Ser A-5,
RB (C) (E) (F)
5.320%, 09/01/35 4,350 4,350
San Jose, California, Financing Authority
Lease Revenue, Hayes Mansion
Phase B, RB (C) (E) (F)
5.350%, 07/01/24 8,000
8,000
----------
16,750
----------
TOTAL VARIABLE RATE DEMAND NOTES
(Cost $38,065)
38,065
----------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 0.6%
- --------------------------------------------------------------------------------
Deutsche Bank Securities, Inc.
5.120%, dated 07/31/07, matures on
08/01/07, repurchase price $18,232,749
(collateralized by various U.S. Treasury
obligations, ranging in par value
$1,227,000 - $17,303,000, 0.000% -
4.000%, 08/02/07 - 08/31/07, total
market value $18,595,538) 18,230 18,230
----------
TOTAL REPURCHASE AGREEMENT
(Cost $18,230)
18,230
----------
TOTAL INVESTMENTS - 100.1%
(Cost $2,932,410) $2,932,410
==========
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
DIVERSIFIED MONEY MARKET FUND (CONCLUDED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PERCENTAGES ARE BASED ON NET ASSETS OF $2,929,937 (000).
INDUSTRY CLASSIFICATIONS ARE UNAUDITED.
* RATE SHOWN REPRESENTS THE MONEY MARKET EQUIVALENT YIELD TO MATURITY AT
PURCHASE.
(A) SECURITIES SOLD WITHIN THE TERMS OF A PRIVATE PLACEMENT MEMORANDUM, EXEMPT
FROM REGISTRATION UNDER SECTION 3A-4, 4(2) OR 144A OF THE SECURITIES ACT
OF 1933 AS AMENDED, AND MAY BE SOLD ONLY TO THE DEALERS IN THAT PROGRAM OR
OTHER "ACCREDITED INVESTORS." THE TOTAL VALUE OF SUCH SECURITIES AS OF
JULY 31, 2007, WAS $1,894,045 (000) AND REPRESENTED 64.6% OF NET ASSETS.
(B) SECURITY CONSIDERED ILLIQUID. THE TOTAL VALUE OF SUCH SECURITIES AS OF
JULY 31, 2007 WAS $106,380 (000) AND REPRESENTED 3.6% OF NET ASSETS.
(C) ADJUSTABLE RATE SECURITY -- THE RATE REFLECTED IS THE RATE IN EFFECT ON
JULY 31, 2007.
(D) EXTENDABLE SECURITY -- THE MATURITY DATE REFLECTS THE NEXT DATE ON WHICH
PRINCIPAL CAN BE RECOVERED.
(E) SECURITIES ARE HELD IN CONJUNCTION WITH A GUARANTEE/LETTER OF CREDIT
AND/OR A LIQUIDITY AGREEMENT BY A MAJOR COMMERCIAL BANK OR FINANCIAL
INSTITUTION.
(F) DEMAND FEATURE -- THE DATE REPORTED IS THE FINAL MATURITY, NOT THE DATE ON
WHICH PRINCIPAL COULD BE RECOVERED.
LLC -- LIMITED LIABILITY COMPANY
L.P. -- LIMITED PARTNERSHIP
LTD. -- LIMITED
MBIA -- MUNICIPAL BOND INVESTORS ASSURANCE
MTN -- MEDIUM TERM NOTE
N.A. -- NORTH AMERICA
NY -- NEW YORK
PLC -- PUBLIC LIABILITY COMPANY
RB -- REVENUE BOND
SER -- SERIES
The accompanying notes are an integral part of the financial statements.
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
U.S. GOVERNMENT MONEY MARKET FUND
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 25.0%
- --------------------------------------------------------------------------------
FHLB (A)
5.300%, 05/30/08 $ 18,760 $ 18,757
5.350%, 07/30/08 30,000 30,000
FHLB*
5.134%, 08/06/07 76,039 75,985
FHLMC
4.000%, 08/10/07 1,500 1,499
3.375%, 08/23/07 3,500 3,496
FNMA(A)
5.300%, 01/08/08 25,000 25,000
---------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $154,737) 154,737
---------
- --------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES - 8.0%
- --------------------------------------------------------------------------------
California, Milpitas Multi-Family Housing
Revenue, Crossing, Ser A, RB,
Guarantee: FNMA (B) (C)
5.320%, 08/15/33 4,800 4,800
California, Sacramento County,
Multi-Family Housing Development
Authority, Deer Park Apartments, RB,
Guarantee: FNMA (B) (C)
5.350%, 07/15/35 1,550 1,550
California, Sacramento County,
Multi-Family Housing Development
Authority, Natomas, RB,
Guarantee: FNMA (B) (C)
5.330%, 04/15/36 3,030 3,030
California, San Francisco, City & County
Redevelopment, Ser D, RB,
Guarantee: FNMA (B) (C)
5.320%, 06/15/34 12,250 12,250
California, Simi Valley, Mutli-Family
Housing Revenue, Parker Ranch, RB,
Guarantee: FNMA (B) (C)
5.350%, 07/15/36 1,850 1,850
California, Statewide Community
Development, Palms Apartments, Ser C,
RB, Guarantee: FNMA (B) (C)
5.330%, 05/15/35 4,555 4,555
New York State, Housing Finance
Agency Revenue, North End, Ser B,
RB, Guarantee: FNMA (B) (C)
5.340%, 11/15/36 2,500 2,500
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES - (CONTINUED)
- --------------------------------------------------------------------------------
New York State, Housing Finance
Agency Revenue, South Cove, Ser B,
RB, Guarantee: FHLMC (B) (C)
5.350%, 11/01/30 $ 1,100 $ 1,100
Pennsylvania, Montgomery County,
Redevelopment Authority,
Kingswood Apartments, Ser A,
RB, Guarantee: FNMA (B) (C)
5.320%, 08/15/31 8,005 8,005
Washington State, Housing Finance
Authority, Ballard Landmark, Ser B,
RB, Guarantee: FNMA (B) (C)
5.340%, 12/15/41 3,510 3,510
Washington State, Housing Finance
Authority, Bridgewood Project, Ser B,
RB, Guarantee: FNMA (B) (C)
5.340%, 09/01/34 3,695 3,695
Washington State, Housing Finance
Authority, Ranier Court Project, Ser B,
RB, Guarantee: FNMA (B) (C)
5.350%, 12/15/36 2,825 2,825
---------
TOTAL VARIABLE RATE DEMAND NOTES
(Cost $49,670) 49,670
---------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 67.2%
- --------------------------------------------------------------------------------
Barclays Capital, Inc.
5.250%, dated 07/31/07, matures on
08/01/07, repurchase price $30,004,375
(collateralized by a U.S. agency
obligation, par value $31,085,000,
0.000%, 11/19/07, total market
value $30,600,074) 30,000 30,000
Countrywide Securities Corp.
5.280%, dated 07/31/07, matures on
08/01/07, repurchase price $30,004,400
(collateralized by a U.S. agency
obligation, par value $30,604,000,
0.000%, 08/01/07, total market
value $30,600,940) 30,000 30,000
Credit Suisse Securities (USA) LLC
5.300%, dated 07/31/07, matures on
08/01/07, repurchase price $30,004,417
(collateralized by various U.S. agency
obligations, ranging in par value
$57,945,000 - $97,660,000, 0.000% -
0.001%, 12/27/32 - 06/13/33, total
market value $30,600,909) 30,000 30,000
The accompanying notes are an integral part of the financial statements.
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
U.S. GOVERNMENT MONEY MARKET FUND (CONCLUDED)
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - (CONTINUED)
- --------------------------------------------------------------------------------
Deutsche Bank Securities, Inc.
5.120%, dated 07/31/07, matures on
08/01/07, repurchase price $82,011,662
(collateralized by various U.S. Treasury
obligations, ranging in par value
$4,335,000 - $52,112,000, 3.375% -
4.625%, 11/15/06 - 11/15/16, total
market value $83,640,738) $ 82,000 $ 82,000
Deutsche Bank Securities, Inc.
5.290%, dated 07/31/07, matures on
08/01/07, repurchase price $154,624,690
(collateralized by various U.S. agency
obligations, ranging in par value
$350,000 - $50,000,000, 0.000% -
5.650%, 08/09/07 - 08/13/18, total
market value $157,697,646) 154,602 154,602
Goldman Sachs & Co.
5.230%, dated 07/31/07, matures on
08/01/07, repurchase price $30,004,358
(collateralized by various U.S. agency
obligations, ranging in par value
$105,000 - $8,223,000, 3.890% -
5.550%, 11/21/08 - 01/19/18, total
market value $30,600,894) 30,000 30,000
JPMorgan Securities, Inc.
5.160%, dated 07/31/07, matures on
08/01/07, repurchase price $30,004,300
(collateralized by various U.S. agency
obligations, ranging in par value
$5,000 - $3,000,000, 0.000% -
8.125%, 01/15/09 - 07/15/28, total
market value $30,600,487) 30,000 30,000
Merrill Lynch Government Securities, Inc.
5.240%, dated 07/31/07, matures on
08/01/07, repurchase price $30,004,367
(collateralized by various U.S. agency
obligations, ranging in par value
$63,000 - $18,930,000, 4.700% -
6.150%, 01/18/11 - 01/15/38, total
market value $30,603,549) 30,000 30,000
---------
TOTAL REPURCHASE AGREEMENTS
(Cost $416,602) 416,602
---------
TOTAL INVESTMENTS - 100.2%
(Cost $621,009) $ 621,009
=========
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PERCENTAGES ARE BASED ON NET ASSETS OF $619,504 (000).
INDUSTRY CLASSIFICATIONS ARE UNAUDITED.
* DISCOUNTED SECURITY -- RATE SHOWN REPRESENTS THE MONEY MARKET EQUIVALENT
YIELD TO MATURITY AT PURCHASE.
(A) SECURITY IS CALLABLE @ 100.
(B) ADJUSTABLE RATE SECURITY -- THE RATE SHOWN IS THE RATE IN EFFECT ON JULY
31, 2007.
(C) DEMAND FEATURE -- THE DATE REPORTED IS THE FINAL MATURITY, NOT THE DATE ON
WHICH PRINCIPAL COULD BE RECOVERED.
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
LLC -- LIMITED LIABILITY COMPANY
RB -- REVENUE BOND
SER -- SERIES
The accompanying notes are an integral part of the financial statements.
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SCHEDULE OF INVESTMENTS
JULY 31, 2007
100% U.S. TREASURY MONEY MARKET FUND
- --------------------------------------------------------------------------------
Description Par (000) Value (000)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. TREASURY BILLS* - 86.2%
- --------------------------------------------------------------------------------
U.S. Treasury Bills
4.830%, 08/02/07 $ 83,139 $ 83,128
4.742%, 08/16/07 86,709 86,541
4.986%, 08/23/07 23,454 23,384
4.797%, 09/06/07 222,896 221,850
4.741%, 09/20/07 128,297 127,473
4.959%, 10/18/07 75,000 74,215
---------
TOTAL U.S. TREASURY BILLS
(Cost $616,591) 616,591
---------
- --------------------------------------------------------------------------------
U.S. TREASURY NOTE - 13.9%
- --------------------------------------------------------------------------------
U.S. Treasury Note
3.000%, 11/15/07 100,000 99,451
---------
TOTAL U.S. TREASURY NOTE
(Cost $99,451) 99,451
---------
TOTAL INVESTMENTS - 100.1%
(Cost $716,042) $ 716,042
=========
- --------------------------------------------------------------------------------
PERCENTAGES ARE BASED ON NET ASSETS OF $714,996 (000).
* RATE SHOWN REPRESENTS THE BOND EQUIVALENT YIELD TO MATURITY AT DATE OF
PURCHASE.
The accompanying notes are an integral part of the financial statements.
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STATEMENTS OF ASSETS AND LIABILITIES (000)@
JULY 31, 2007
COGNITIVE CORE ENHANCED
BALANCED VALUE EQUITY GROWTH
FUND FUND FUND FUND
------------------ ---------------- ------------------ ------------------
ASSETS:
Investments, at Value+ ........................... $ 43,226* $ 118,408* $ 148,269* $ 139,089*
Repurchase Agreements, at Value+ ................. 8,834 19,119 2,509 16,063
Affiliated Investments, at Value++ ............... -- -- -- --
Cash ............................................. -- -- -- --
Accrued Income ................................... 170 109 116 52
Receivable for Fund Shares Sold .................. 104 121 365 88
Prepaid Expenses ................................. 3 5 7 6
Reclaims Receivable .............................. 4 -- 2 4
Deferred Compensation Asset ...................... 1 3 4 4
Receivable for Investments Sold .................. -- 625 -- 299
Margin Deposits .................................. -- -- 14 --
Unrealized Appreciation on Spot Contracts ........ -- -- -- --
------------------ ---------------- ------------------ ------------------
TOTAL ASSETS .................................. 52,342 138,390 151,286 155,605
------------------ ---------------- ------------------ ------------------
LIABILITIES:
Payable Upon Return of Securities Loaned ......... 8,617 28,608 11,753 17,126
Payable for Investments Purchased ................ 190 319 -- 303
Accrued Expenses# ................................ 43 101 124 129
Payable for Fund Shares Redeemed ................. 36 -- -- --
Variation Margin Payable ......................... -- -- 5 --
Foreign Currency, Due to Custodian ............... -- -- -- --
Due to Custodian ................................. -- -- -- --
------------------ ---------------- ------------------ ------------------
TOTAL LIABILITIES 8,886 29,028 11,882 17,558
------------------ ---------------- ------------------ ------------------
NET ASSETS ................................. $ 43,456 $ 109,362 $ 139,404 $ 138,047
================== ================ ================== ==================
NET ASSETS:
Paid-in Capital (unlimited authorized
-- no par value) .............................. $ 35,871 $ 89,504 $ 128,683 $ 113,503
Undistributed (Distributions in excess of)
Net Investment Income/(Accumulated
Net Investment Loss) .......................... -- 486 26 (222)
Accumulated Net Realized Gain (Loss) on
Investments, Investments in Affiliated Funds,
Written Options and Futures Contracts ......... 2,515 10,885 4,609 (7,043)
Net Unrealized Appreciation (Depreciation)
on Investments and Investments in
Affiliated Funds .............................. 5,070 8,487 6,111 31,809
Net Unrealized Depreciation on Futures
Contracts ..................................... -- -- (25) --
Net Unrealized Appreciation on Foreign Currency .. -- -- -- --
------------------ ---------------- ------------------ ------------------
NET ASSETS ................................. $ 43,456 $ 109,362 $ 139,404 $ 138,047
================== ================ ================== ==================
+ Cost of Investments and Repurchase Agreements .. $ 46,990 $ 129,040 $ 144,667 $ 123,343
++ Cost of Affiliated Investments ................. $ -- $ -- $ -- $ --
* Includes Market Value of Securities on Loan .... $ 8,267 $ 27,171 $ 11,186 $ 16,317
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- FIDUCIARY SHARES (A) .......... $ 14.95 $ 13.03 $ 9.96 N/A
================== ================ ================== ==================
($33,427,603 / ($2,270,438 / ($127,266,040 /
2,236,683 shares) 174,254 shares) 12,780,343 shares)
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A SHARES (A) ............ $ 14.92 $ 12.97 $ 9.93 $ 10.17
================== ================ ================== ==================
($7,358,790 / ($3,765,354 / ($8,664,153 / ($223,345 /
493,341 shares) 290,264 shares) 872,114 shares) 21,963 shares)
MAXIMUM OFFERING PRICE
PER SHARE -- CLASS A SHARES ...................... $ 15.79 $ 13.72 $ 10.51 $ 10.76
================== ================ ================== ==================
($14.92 / 94.5%) ($12.97 / 94.5%) ($9.93 / 94.5%) ($10.17 / 94.5%)
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS B SHARES (A) ............ $ 14.87 N/A $ 9.74 N/A
================== ================ ================== ==================
($2,277,160 / ($2,662,942 /
153,112 shares) 273,457 shares)
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS C SHARES (A) ............ $ 14.85 $ 12.89 $ 9.74 $ 10.12
================== ================ ================== ==================
($392,782 / ($30,692 / ($811,130 / ($5,831 /
26,455 shares) 2,381 shares) 83,310 shares) 576 shares)
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS M SHARES (A) ............ N/A $ 13.02 N/A $ 10.24
================== ================ ================== ==================
($103,295,355 / ($137,817,609 /
7,933,778 shares) 13,464,872 shares)
N/A NOT APPLICABLE
@ VALUES ARE PRESENTED IN THOUSANDS EXCEPT FOR PER SHARE DATA.
# SEE NOTE 3 IN NOTES TO FINANCIAL STATEMENTS FOR THE DETAIL OF AFFILIATED
PAYABLES.
(A) FIDUCIARY CLASS, CLASS A AND CLASS M HAVE POSSIBLE REDEMPTION AND EXCHANGE
FEES (SEE NOTE 2 IN NOTES TO FINANCIAL STATEMENTS). CLASS B AND CLASS C
HAVE CONTINGENT DEFERRED SALES CHARGES (SEE NOTE 3 IN NOTES TO FINANCIAL
STATEMENTS).
** COST OF FOREIGN CURRENCY IS $(113 (000)).
AMOUNTS DESIGNATED AS "--" ARE EITHER NOT APPLICABLE, $0 OR HAVE BEEN ROUNDED TO
$0.
The accompanying notes are an integral part of the financial statements.
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INTERNATIONAL LARGE CAP LARGE CAP
OPPORTUNITIES GROWTH VALUE
FUND FUND FUND
------------------ ------------------ --------------------
ASSETS:
Investments, at Value+ ........................... $ 360,443* $ 132,354* $ 392,459*
Repurchase Agreements, at Value+ ................. 25,173 9,909 22,610
Affiliated Investments, at Value++ ............... -- -- --
Cash ............................................. 332 -- --
Accrued Income ................................... 293 91 410
Receivable for Fund Shares Sold .................. 84 68 557
Prepaid Expenses ................................. 12 6 20
Reclaims Receivable .............................. 108 8 --
Deferred Compensation Asset ...................... 11 4 12
Receivable for Investments Sold .................. 5,362 396 2,445
Margin Deposits .................................. -- -- --
Unrealized Appreciation on Spot Contracts ........ 5 -- --
------------------ ------------------ --------------------
TOTAL ASSETS .................................. 391,823 142,836 418,513
------------------ ------------------ --------------------
LIABILITIES:
Payable Upon Return of Securities Loaned ......... 31,983 9,749 30,949
Payable for Investments Purchased ................ 7,603 1,043 7,458
Accrued Expenses# ................................ 449 121 359
Payable for Fund Shares Redeemed ................. 2 107 296
Variation Margin Payable ......................... -- -- --
Foreign Currency, Due to Custodian ............... 112** -- --
Due to Custodian ................................. -- -- 6
------------------ ------------------ --------------------
TOTAL LIABILITIES ............................. 40,149 11,020 39,068
------------------ ------------------ --------------------
NET ASSETS ................................. $ 351,674 $ 131,816 $ 379,445
================== ================== ====================
NET ASSETS:
Paid-in Capital (unlimited authorized
-- no par value) .............................. $ 231,943 $ 249,521 $ 328,272
Undistributed (Distributions in excess of) Net
Investment Income/(Accumulated Net
Investment Loss) .............................. 2,063 326 112
Accumulated Net Realized Gain (Loss) on
Investments, Investments in Affiliated
Funds, Written Options and Futures Contracts .. 13,673 (128,070) 19,760
Net Unrealized Appreciation (Depreciation) on
Investments, Investments in Affiliated Funds .. 103,982 10,039 31,301
Net Unrealized Depreciation on Futures
Contracts ..................................... -- -- --
Net Unrealized Appreciation on Foreign Currency .. 13 -- --
------------------ ------------------ --------------------
NET ASSETS ................................. $ 351,674 $ 131,816 $ 379,445
================== ================== ====================
+ Cost of Investments and Repurchase Agreements .. $ 281,634 $ 132,224 $ 383,768
++ Cost of Affiliated Investments ................. $ -- $ -- $ --
* Includes Market Value of Securities on Loan .... $ 30,666 $ 9,452 $ 28,932
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- FIDUCIARY SHARES (A) .......... $ 9.93 $ 10.03 $ 15.16
================== ================== ====================
($60,509,347 / ($110,599,977 / ($216,155,980 /
6,094,399 shares) 11,026,540 shares) 14,261,824 shares)
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A SHARES (A) ............ $ 9.90 $ 9.85 $ 15.19
================== ================== ====================
($14,531,550 / ($14,284,019 / ($153,045,390 /
1,468,519 shares) 1,449,588 shares) 10,076,553 shares)
MAXIMUM OFFERING PRICE
PER SHARE -- CLASS A SHARES ...................... $ 10.48 $ 10.42 $ 16.07
================== ================== ====================
($9.90 / 94.5%) ($9.85 / 94.5%) ($15.19 / 94.5%)
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS B SHARES (A) ............ N/A $ 9.23 $ 14.94
================== ================== ====================
($5,834,704 / ($2,502,181 /
632,402 shares) 167,480 shares)
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS C SHARES (A) ............ $ 9.81 $ 9.23 $ 14.90
================== ================== ====================
($3,159,048 / ($1,097,665 / ($7,741,688 /
321,929 shares) 118,897 shares) 519,415 shares)
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS M SHARES (A) ............ $ 9.93 N/A N/A
================== ================== ====================
($273,474,402 /
27,548,070 shares)
CAPITAL
SMALL CAP SMALL CAP VALUE GROWTH
ADVANTAGE VALUE MOMENTUM ALLOCATION
FUND FUND FUND FUND
------------------ ------------------ ------------------ ------------------
ASSETS:
Investments, at Value+ ...................... $ 26,418* $ 293,384* $ 514,207* $ 1,668
Repurchase Agreements, at Value+ ............ 8,900 62,793 12,306 1,565
Affiliated Investments, at Value++ .......... -- -- -- 76,791
Cash ........................................ -- -- -- --
Accrued Income .............................. 29 495 419 --
Receivable for Fund Shares Sold ............. 392 405 496 80
Prepaid Expenses ............................ 1 17 28 4
Reclaims Receivable ......................... -- 1 83 --
Deferred Compensation Asset ................. 1 9 15 2
Receivable for Investments Sold ............. 423 11,685 1,789 --
Margin Deposits ............................. 26 -- -- --
Unrealized Appreciation on Spot Contracts ... -- -- -- --
------------------ ------------------ ------------------ ------------------
TOTAL ASSETS ............................. 36,190 368,789 529,343 80,110
------------------ ------------------ ------------------ ------------------
LIABILITIES:
Payable Upon Return of Securities Loaned .... 7,805 86,195 40,405 --
Payable for Investments Purchased ........... 143 12,134 1,687 --
Accrued Expenses# ........................... 35 393 454 56
Payable for Fund Shares Redeemed ............ -- 495 428 67
Variation Margin Payable .................... 4 -- -- --
Foreign Currency, Due to Custodian .......... -- -- -- --
Due to Custodian ............................ 383 -- -- --
------------------ ------------------ ------------------ ------------------
TOTAL LIABILITIES ........................ 8,370 99,217 42,974 123
------------------ ------------------ ------------------ ------------------
NET ASSETS ............................ $ 27,820 $ 269,572 $ 486,369 $ 79,987
================== ================== ================== ==================
NET ASSETS:
Paid-in Capital (unlimited authorized
-- no par value) ......................... $ 29,823 $ 227,567 $ 294,095 $ 72,834
Undistributed (Distributions in excess of)
Net Investment Income/(Accumulated Net
Investment Loss) ......................... 72 1,192 35 --
Accumulated Net Realized Gain (Loss) on
Investments, Investments in Affiliated
Funds, Written Options and Futures
Contracts ................................ 226 23,875 56,317 2,326
Net Unrealized Appreciation (Depreciation)
on Investments, Investments in
Affiliated Funds ......................... (2,246) 16,938 135,922 4,827
Net Unrealized Depreciation on Futures
Contracts ................................ (55) -- -- --
Net Unrealized Appreciation on Foreign
Currency ................................. -- -- -- --
------------------ ------------------ ------------------ ------------------
NET ASSETS ............................ $ 27,820 $ 269,572 $ 486,369 $ 79,987
================== ================== ================== ==================
+ Cost of Investments and Repurchase
Agreements ............................... $ 37,564 $ 339,239 $ 390,591 $ 3,274
++ Cost of Affiliated Investments ............ $ -- $ -- $ -- $ 71,923
* Includes Market Value of Securities on
Loan ..................................... $ 7,103 $ 76,537 $ 38,386 $ --
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- FIDUCIARY SHARES (A) ..... $ 18.83 $ 17.05 $ 24.21 $ 25.72
================== ================== ================== ==================
($27,572,348 / ($178,804,841 / ($445,763,158 / ($769,922 /
1,463,929 shares) 10,488,015 shares) 18,414,456 shares) 29,934 shares)
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A SHARES (A) ....... $ 18.82 $ 16.68 $ 24.17 $ 25.72
================== ================== ================== ==================
($117,224 / ($59,511,603 / ($31,772,702 / ($49,072,573 /
6,229 shares) 3,568,844 shares) 1,314,462 shares) 1,908,204 shares)
MAXIMUM OFFERING PRICE
PER SHARE -- CLASS A SHARES ................. $ 19.92 $ 17.65 $ 25.58 $ 27.22
================== ================== ================== ==================
($18.82 / 94.5%) ($16.68 / 94.5%) ($24.17 / 94.5%) ($25.72 / 94.5%)
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS B SHARES (A) ....... N/A $ 15.85 $ 23.79 N/A
================== ================== ================== ==================
($10,987,454 / ($6,772,245 /
693,181 shares) 284,645 shares)
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS C SHARES (A) ....... $ 18.80 $ 15.76 $ 23.72 $ 25.42
================== ================== ================== ==================
($130,461 / ($20,268,076 / ($2,061,101 / ($30,144,183 /
6,939 shares) 1,285,851 shares) 86,880 shares) 1,185,727 shares)
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS M SHARES (A) ....... N/A N/A N/A N/A
================== ================== ================== ==================
The accompanying notes are an integral part of the financial statements.
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STATEMENTS OF ASSETS AND LIABILITIES (000)@
JULY 31, 2007
DIVERSIFIED GROWTH & INCOME
EQUITY INCOME PLUS
ALLOCATION ALLOCATION ALLOCATION BOND
FUND FUND FUND FUND
------------------ ------------------ ------------------ ------------------
ASSETS:
Investments, at Value+ ...................... $ 165 $ 1,199 $ 82 $ 413,468*
Repurchase Agreements, at Value+ ............ -- 2,297 460 29,279
Affiliated Investments, at Value++ .......... 6,898 67,163 8,799 --
Cash ........................................ -- -- -- --
Receivable for Fund Shares Sold ............. 4 58 -- 218
Receivable from Investment Adviser .......... 4 2 2 --
Prepaid Expenses ............................ -- 3 1 22
Deferred Compensation Asset ................. -- 2 -- 12
Accrued Income .............................. -- -- -- 4,325
Receivable for Investments Sold ............. -- -- -- --
------------------ ------------------ ------------------ ------------------
TOTAL ASSETS ............................. 7,071 70,724 9,344 447,324
------------------ ------------------ ------------------ ------------------
LIABILITIES:
Payable Upon Return of Securities Loaned .... -- -- -- 52,349
Due to Custodian ............................ 16 -- -- --
Payable for Fund Shares Redeemed ............ 6 162 -- 269
Accrued Expenses# ........................... 9 48 7 283
Payable for Investments Purchased. .......... -- -- -- 5,055
Interest Payable ............................ -- -- -- 11
Income Distribution Payable ................. -- -- -- --
------------------ ------------------ ------------------ ------------------
TOTAL LIABILITIES ........................ 31 210 7 57,967
------------------ ------------------ ------------------ ------------------
NET ASSETS ............................ $ 7,040 $ 70,514 $ 9,337 $ 389,357
================== ================== ================== ==================
NET ASSETS:
Paid-in Capital (unlimited authorized
-- no par value) ......................... $ 6,974 $ 65,359 $ 8,975 $ 396,552
Undistributed (Distributions in excess of)
Net Investment Income/(Accumulated Net
Investment Loss) ......................... -- 44 16 680
Accumulated Net Realized Gain (Loss) on
Investments and Investments in
Affiliated Funds ......................... 36 1,532 106 (8,064)
Net Unrealized Appreciation (Depreciation)
on Investments and Investments in
Affiliated Funds ......................... 30 3,579 240 189
------------------ ------------------ ------------------ ------------------
NET ASSETS ............................ $ 7,040 $ 70,514 $ 9,337 $ 389,357
================== ================== ================== ==================
+ Cost of Investments and Repurchase
Agreements at Value ..................... $ 169 $ 3,524 $ 544 $ 442,558
++ Cost of Affiliated Investments at Value ... $ 6,864 $ 63,556 $ 8,557 $ --
* Includes Market Value of Securities
on Loan ................................. $ -- $ -- $ -- $ 48,365
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- FIDUCIARY SHARES ......... $ 20.97 $ 24.23^ $ 21.85 $ 10.40
================== ================== ================== ==================
($183,106 / ($525 / ($103,085 / ($352,609,919 /
8,732 shares) 22 shares) 4,717 shares) 33,912,565 shares)
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A SHARES (A) ....... $ 20.94 $ 24.15 $ 21.86 $ 10.26
================== ================== ================== ==================
($4,870,674 / ($47,572,740 / ($5,458,826 / ($31,067,833 /
232,606 shares) 1,969,839 shares) 249,718 shares) 3,028,336 shares)
MAXIMUM OFFERING PRICE
PER SHARE -- CLASS A SHARES ................. $ 22.16 $ 25.56 $ 22.89 $ 10.50
================== ================== ================== ==================
($20.94 / 94.5%) ($24.15 / 94.5%) ($21.86 / 95.5%) ($10.26 / 97.75%)
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS B SHARES (A) ....... N/A N/A N/A $ 10.22
================== ================== ================== ==================
($5,577,506 /
545,862 shares)
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS C SHARES (A) ....... $ 20.85 $ 24.03 $ 21.73 $ 10.20
================== ================== ================== ==================
($1,985,812 / ($22,941,113 / ($3,775,108 / ($102,202 /
95,260 shares) 954,526 shares) 173,723 shares) 10,018 shares)
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS S SHARES ........... N/A N/A N/A N/A
================== ================== ================== ==================
^ NET ASSETS DIVIDED BY SHARES DO NOT CALCULATE TO THE STATED NAV BECAUSE
THESE AMOUNTS ARE SHOWN ROUNDED.
N/A NOT APPLICABLE
@ VALUES ARE PRESENTED IN THOUSANDS EXCEPT FOR PER SHARE DATA.
# SEE NOTE 3 IN NOTES TO FINANCIAL STATEMENTS FOR THE DETAIL OF AFFILIATED
PAYABLES.
(A) CLASS A HAS POSSIBLE REDEMPTION AND EXCHANGE FEES (SEE NOTE 2 IN NOTES TO
FINANCIAL STATEMENTS).
CLASS B AND CLASS C HAVE CONTINGENT DEFERRED SALES CHARGES (SEE NOTE 3 IN
NOTES TO FINANCIAL STATEMENTS).
AMOUNTS DESIGNATED AS "--" ARE EITHER NOT APPLICABLE, $0 OR HAVE BEEN ROUNDED TO
$0.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
108 1.800.433.6884
- --------------------------------------------------------------------------------
[MOUNTAIN RANGE GRAPHIC OMITTED]
CALIFORNIA NATIONAL CALIFORNIA
INTERMEDIATE INTERMEDIATE SHORT TERM TAX-FREE
TAX-FREE BOND TAX-FREE BOND BOND MONEY MARKET
FUND FUND FUND FUND
------------------ ------------------ ------------------ -------------------
ASSETS:
Investments, at Value+ ...................... $ 120,326 $ 70,686 $ 52,851* $ 601,486
Repurchase Agreements, at Value+ ............ -- -- 5,562 --
Affiliated Investments, at Value++ .......... -- -- -- --
Cash ........................................ -- -- -- --
Receivable for Fund Shares Sold ............. -- -- 4 --
Receivable from Investment Adviser .......... -- 1 -- --
Prepaid Expenses ............................ 7 4 3 28
Deferred Compensation Asset ................. 4 2 2 19
Accrued Income .............................. 1,703 929 523 2,225
Receivable for Investments Sold ............. -- -- 42 12,300
------------------ ------------------ ------------------ -------------------
TOTAL ASSETS ............................. 122,040 71,622 58,987 616,058
------------------ ------------------ ------------------ -------------------
LIABILITIES:
Payable Upon Return of Securities Loaned .... -- -- 2,553 --
Due to Custodian ............................ -- -- -- --
Payable for Fund Shares Redeemed ............ 28 -- -- --
Accrued Expenses# ........................... 75 24 35 377
Payable for Investments Purchased. .......... -- 534 -- 2,013
Interest Payable ............................ -- 3 -- --
Income Distribution Payable ................. -- -- -- 646
------------------ ------------------ ------------------ -------------------
TOTAL LIABILITIES ........................ 103 561 2,588 3,036
------------------ ------------------ ------------------ -------------------
NET ASSETS ............................ $ 121,937 $ 71,061 $ 56,399 $ 613,022
================== ================== ================== ===================
NET ASSETS:
Paid-in Capital (unlimited authorized
-- no par value) ......................... $ 120,746 $ 70,439 $ 56,730 $ 613,022
Undistributed (Distributions in excess of)
Net Investment Income/(Accumulated Net
Investment Loss) ......................... 87 56 45 --
Accumulated Net Realized Gain (Loss) on
Investments and Investments in
Affiliated Funds ......................... 111 34 (138) --
Net Unrealized Appreciation (Depreciation)
on Investments and Investments in
Affiliated Funds ......................... 993 532 (238) --
------------------ ------------------ ------------------ -------------------
NET ASSETS ............................ $ 121,937 $ 71,061 $ 56,399 $613,022
================== ================== ================== ===================
+ Cost of Investments and Repurchase
Agreements at Value ..................... $ 119,333 $ 70,154 $ 58,651 $ 601,486
++ Cost of Affiliated Investments at Value ... $ -- $ -- $ -- $ --
* Includes Market Value of Securities
on Loan ................................. $ -- $ -- $ 2,231 $ --
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- FIDUCIARY SHARES ......... $ 9.72 $ 10.84 $ 9.82 $ 1.00
================== ================== ================== ===================
($89,851,864 / ($67,896,340 / ($54,637,819 / ($226,583,414 /
9,240,523 shares) 6,264,261 shares) 5,566,344 shares) 226,595,749 shares)
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A SHARES (A) ....... $ 9.68 $ 10.83 $ 9.81 $ 1.00
================== ================== ================== ===================
($27,499,792 / ($3,158,605 / ($152,727 / ($329,718,457 /
2,840,664 shares) 291,560 shares) 15,576 shares) 329,717,306 shares)
MAXIMUM OFFERING PRICE
PER SHARE -- CLASS A SHARES ................. $ 9.90 $ 11.08 $ 10.04 N/A
================== ================== ================== ===================
($9.68 / 97.75%) ($10.83 / 97.75%) ($9.81 / 97.75%)
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS B SHARES (A) ....... $ 9.67 N/A N/A N/A
================== ================== ================== ===================
($4,326,084 /
447,223 shares)
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS C SHARES (A) ....... $ 9.66 $ 11.05 $ 9.91 N/A
================== ================== ================== ===================
($259,436 / $6,089 / ($1,608,434 /
26,858 shares) 551 shares) 162,370 shares)
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS S SHARES ........... N/A N/A N/A $ 1.00
================== ================== ================== ===================
($56,720,622 /
56,715,203 shares)
100%
DIVERSIFIED U.S. GOVERNMENT U.S. TREASURY
MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND
---------------------- -------------------- ---------------------
ASSETS:
Investments, at Value+ ...................... $ 2,914,180 $ 204,407 $ 716,042
Repurchase Agreements, at Value+ ............ 18,230 416,602 --
Affiliated Investments, at Value++ .......... -- -- --
Cash ........................................ -- -- --
Receivable for Fund Shares Sold ............. -- -- --
Receivable from Investment Adviser .......... -- -- --
Prepaid Expenses ............................ 156 33 40
Deferred Compensation Asset ................. 86 18 22
Accrued Income .............................. 4,608 608 636
Receivable for Investments Sold ............. -- -- --
---------------------- -------------------- ---------------------
TOTAL ASSETS ............................. 2,937,260 621,668 716,740
---------------------- -------------------- ---------------------
LIABILITIES:
Payable Upon Return of Securities Loaned .... -- -- --
Due to Custodian ............................ -- -- --
Payable for Fund Shares Redeemed ............ 26 4 --
Accrued Expenses# ........................... 1,776 379 512
Payable for Investments Purchased. .......... -- -- --
Interest Payable ............................ -- -- --
Income Distribution Payable ................. 5,521 1,781 1,232
---------------------- -------------------- ---------------------
TOTAL LIABILITIES ........................ 7,323 2,164 1,744
---------------------- -------------------- ---------------------
NET ASSETS ............................ $ 2,929,937 $ 619,504 $ 714,996
====================== ==================== =====================
NET ASSETS:
Paid-in Capital (unlimited authorized
-- no par value) ......................... $ 2,929,943 $ 619,540 $ 715,163
Undistributed (Distributions in excess of)
Net Investment Income/(Accumulated Net
Investment Loss) ......................... -- -- --
Accumulated Net Realized Gain (Loss) on
Investments and Investments in
Affiliated Funds ......................... (6) (36) (167)
Net Unrealized Appreciation (Depreciation)
on Investments and Investments in
Affiliated Funds ......................... -- -- --
---------------------- -------------------- ---------------------
NET ASSETS ............................ $ 2,929,937 $ 619,504 $ 714,996
====================== ==================== =====================
+ Cost of Investments and Repurchase
Agreements at Value ..................... $ 2,932,410 $ 621,009 $ 716,042
++ Cost of Affiliated Investments at Value ... $ -- $ -- $ --
* Includes Market Value of Securities
on Loan ................................. $ -- $ -- $ --
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- FIDUCIARY SHARES ......... $ 1.00 $ 1.00 $ 1.00
====================== ==================== =====================
($1,764,558,711 / ($456,801,435 / ($334,210,924 /
1,765,173,466 shares) 456,864,066 shares) 334,300,214 shares)
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A SHARES (A) ....... $ 1.00 $ 1.00 $ 1.00
====================== ==================== =====================
($792,969,380 / ($33,560,280 / ($151,880,154 /
793,027,331 shares) 33,566,309 shares) 151,904,730 shares)
MAXIMUM OFFERING PRICE
PER SHARE -- CLASS A SHARES ................. N/A N/A N/A
====================== ==================== =====================
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS B SHARES (A) ....... N/A $ 1.00 N/A
====================== ==================== =====================
($432,379 /
432,622 shares)
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS C SHARES (A) ....... N/A $ 1.00 N/A
====================== ==================== =====================
($28,992 /
28,992 shares)
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS S SHARES ........... $ 1.00 $ 1.00 $ 1.00
====================== ==================== =====================
($372,409,404 / ($128,680,821 / ($228,904,841 /
371,742,480 shares) 128,646,699 shares) 228,960,442 shares)
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
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[HIGHMARK FUNDS LOGO OMITTED](R)
[MOUNTAIN RANGE GRAPHIC OMITTED]
STATEMENTS OF OPERATIONS (000)
FOR THE YEAR OR PERIOD ENDED JULY 31, 2007
COGNITIVE CORE ENHANCED
BALANCED VALUE EQUITY GROWTH
FUND FUND FUND FUND
-------- --------- -------- --------
Interest Income ................................................. $ 780+ $ 192+ $ 81+ $ 139+
Income from Investments in Affiliated Funds ..................... -- -- -- --
Dividend Income ................................................. 601 1,524 2,585 637
Less: Foreign Taxes Withheld, Net of Reclaims ................... (2) -- (4) (30)
-------- --------- -------- --------
Total Investment Income ............................. 1,379 1,716 2,662 746
-------- --------- -------- --------
Expenses:
Investment Adviser Fee ....................................... 281 809 818 992
Shareholder Servicing Fees Fiduciary Shares .................. 91 8 317 --
Shareholder Servicing Fees Class A Shares .................... 18 6 15 --
Shareholder Servicing Fees Class B Shares .................... 7 -- 7 --
Administrative Fee ........................................... 70 162 205 198
Custodian Fees ............................................... 5 11 14 13
Trustees Fees ................................................ 2 4 6 5
Chief Compliance Officer Fees ................................ 1 2 3 3
Distribution Fees Class A Shares ............................. 18 6 15 --
Distribution Fees Class B Shares ............................. 21 -- 22 --
Distribution Fees Class C Shares ............................. 4 -- 6 --
Registration Fees ............................................ 12 4 12 4
Professional Fees ............................................ 10 21 25 24
Transfer Agent Fees .......................................... 9 21 26 25
Printing Fees ................................................ 6 9 16 11
Insurance Fees ............................................... 1 3 2 5
Miscellaneous Fees ........................................... 12 4 4 3
-------- --------- -------- --------
Total Expenses ...................................... 568 1,070 1,513 1,283
-------- --------- -------- --------
Less: Waivers and Reduction of Expenses
Investment Adviser Fees ............................. (20) -- (6) (1)
Shareholder Servicing Fees .......................... (44) (10) (174) --
Administrative Fees ................................. (12) (27) (34) (33)
Reduction of Expenses (1) ........................... (5) (12) (15) (14)
-------- --------- -------- --------
Total Waivers and Reduction of Expenses ...................... (81) (49) (229) (48)
-------- --------- -------- --------
Total Net Expenses ........................................... 487 1,021 1,284 1,235
-------- --------- -------- --------
Net Investment Income (Loss) .................................... 892 695 1,378 (489)
-------- --------- -------- --------
Net Realized Gain on Investments ................................ 3,125 12,716 15,877 2,546
Net Realized Gain on Investments in Affiliated Funds ............ -- -- -- --
Net Realized Loss on Foreign Currency Transactions .............. -- -- -- --
Net Realized Gain on Written Option Contracts (2) ............... -- -- -- --
Net Realized Gain (Loss) on Futures Contracts ................... -- -- 72 --
Change in Unrealized Appreciation (Depreciation)
on Investments ............................................... 1,166 (2,105) (19) 28,894
Change in Unrealized Appreciation (Depreciation)
on Investments in Affiliated Funds ........................... -- -- -- --
Change in Unrealized Appreciation (Depreciation)
on Foreign Currency Transactions ............................. -- -- -- --
Change in Unrealized Appreciation (Depreciation)
on Written Options ........................................... -- -- -- --
Change in Unrealized Appreciation (Depreciation)
on Futures Contracts ......................................... -- -- (25) --
-------- --------- -------- --------
Net Realized and Unrealized Gain (Loss) on Investments .......... 4,291 10,611 15,905 31,440
-------- --------- -------- --------
Increase (Decrease) in Net Assets Resulting from Operations ..... $ 5,183 $ 11,306 $ 17,283 $ 30,951
======== ========= ======== ========
AMOUNTS DESIGNATED AS "--" ARE EITHER NOT APPLICABLE, $0 OR HAVE BEEN ROUNDED TO
$0.
+ INCLUDES INCOME FROM SECURITIES LENDING PROGRAM (SEE NOTE 6 IN NOTES TO
FINANCIAL STATEMENTS).
(1) SEE NOTE 3 IN NOTES TO FINANCIAL STATEMENTS.
(2) SEE NOTE 8 IN NOTES TO FINANCIAL STATEMENTS.
(3) COMMENCED OPERATIONS ON MARCH 1, 2007.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
110 1.800.433.6884
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[MOUNTAIN RANGE GRAPHIC OMITTED]
INTERNATIONAL LARGE CAP LARGE CAP SMALL CAP
OPPORTUNITIES GROWTH VALUE ADVANTAGE
FUND FUND FUND FUND (3)
------------- --------- --------- ---------
Interest Income ................................................. $ 601+ $ 179+ $ 367+ $ 37+
Income from Investments in Affiliated Funds ..................... -- -- -- --
Dividend Income ................................................. 7,811 1,634 7,959 155
Less: Foreign Taxes Withheld, Net of Reclaims ................... (691) (6) (35) (1)
------------- --------- --------- ---------
Total Investment Income ............................. 7,721 1,807 8,291 191
------------- --------- --------- ---------
Expenses:
Investment Adviser Fee ....................................... 2,682 804 2,184 96
Shareholder Servicing Fees Fiduciary Shares .................. 80 276 502 25
Shareholder Servicing Fees Class A Shares .................... 19 38 383 --
Shareholder Servicing Fees Class B Shares .................... -- 17 8 --
Administrative Fee ........................................... 426 201 546 31
Custodian Fees ............................................... 112 13 36 1
Trustees Fees ................................................ 12 6 16 --
Chief Compliance Officer Fees ................................ 6 3 8 --
Distribution Fees Class A Shares ............................. 19 38 383 --
Distribution Fees Class B Shares ............................. -- 52 23 --
Distribution Fees Class C Shares ............................. 20 13 71 --
Registration Fees ............................................ 9 27 32 --
Professional Fees ............................................ 80 25 64 2
Transfer Agent Fees .......................................... 55 26 71 3
Printing Fees ................................................ 33 16 42 1
Insurance Fees ............................................... 6 2 11 --
Miscellaneous Fees ........................................... 25 3 9 1
------------- --------- --------- ---------
Total Expenses ...................................... 3,584 1,560 4,389 160
------------- --------- --------- ---------
Less: Waivers and Reduction of Expenses
Investment Adviser Fees ............................. (10) (7) (176) (8)
Shareholder Servicing Fees .......................... (77) (148) (370) (17)
Administrative Fees ................................. (71) (33) (91) (3)
Reduction of Expenses (1) ........................... (31) (15) (40) (2)
------------- --------- --------- ---------
Total Waivers and Reduction of Expenses ...................... (189) (203) (677) (30)
------------- --------- --------- ---------
Total Net Expenses ........................................... 3,395 1,357 3,712 130
------------- --------- --------- ---------
Net Investment Income (Loss) .................................... 4,326 450 4,579 61
------------- --------- --------- ---------
Net Realized Gain on Investments ................................ 13,973 17,228 35,741 238
Net Realized Gain on Investments in Affiliated Funds ............ -- -- -- --
Net Realized Loss on Foreign Currency Transactions .............. (71) -- -- --
Net Realized Gain on Written Option Contracts (2) ............... -- -- -- --
Net Realized Gain (Loss) on Futures Contracts ................... -- -- -- (1)
Change in Unrealized Appreciation (Depreciation)
on Investments ............................................... 53,732 329 (1,508) (2,246)
Change in Unrealized Appreciation (Depreciation)
on Investments in Affiliated Funds ........................... -- -- -- --
Change in Unrealized Appreciation (Depreciation)
on Foreign Currency Transactions ............................. 15 -- -- --
Change in Unrealized Appreciation (Depreciation)
on Written Options ........................................... -- -- -- --
Change in Unrealized Appreciation (Depreciation)
on Futures Contracts ......................................... -- -- -- (55)
------------- --------- --------- ---------
Net Realized and Unrealized Gain (Loss) on Investments .......... 67,649 17,557 34,233 (2,064)
------------- --------- --------- ---------
Increase (Decrease) in Net Assets Resulting from Operations ..... $ 71,975 $ 18,007 $ 38,812 $ (2,003)
============= ========= ========= =========
SMALL CAP VALUE CAPITAL GROWTH
VALUE MOMENTUM ALLOCATION
FUND FUND FUND
--------- -------- --------------
Interest Income ................................................. $ 669+ $ 541+ $ 71
Income from Investments in Affiliated Funds ..................... -- -- 989
Dividend Income ................................................. 6,715 11,291 --
Less: Foreign Taxes Withheld, Net of Reclaims ................... (2) (43) --
--------- -------- --------------
Total Investment Income ............................. 7,382 11,789 1,060
--------- -------- --------------
Expenses:
Investment Adviser Fee ....................................... 2,958 3,019 134
Shareholder Servicing Fees Fiduciary Shares .................. 484 1,153 1
Shareholder Servicing Fees Class A Shares .................... 168 82 107
Shareholder Servicing Fees Class B Shares .................... 33 18 --
Administrative Fee ........................................... 444 755 101
Custodian Fees ............................................... 30 50 7
Trustees Fees ................................................ 14 23 3
Chief Compliance Officer Fees ................................ 7 12 2
Distribution Fees Class A Shares ............................. 168 82 107
Distribution Fees Class B Shares ............................. 98 55 --
Distribution Fees Class C Shares ............................. 218 19 241
Registration Fees ............................................ 37 66 5
Professional Fees ............................................ 50 84 15
Transfer Agent Fees .......................................... 57 96 13
Printing Fees ................................................ 34 59 8
Insurance Fees ............................................... 1 7 1
Miscellaneous Fees ........................................... 8 12 1
--------- -------- --------------
Total Expenses ...................................... 4,809 5,592 746
--------- -------- --------------
Less: Waivers and Reduction of Expenses
Investment Adviser Fees ............................. (10) (8) (86)
Shareholder Servicing Fees .......................... (270) (524) (86)
Administrative Fees ................................. (74) (126) (17)
Reduction of Expenses (1) ........................... (32) (55) (7)
--------- -------- --------------
Total Waivers and Reduction of Expenses ...................... (386) (713) (196)
--------- -------- --------------
Total Net Expenses ........................................... 4,423 4,879 550
--------- -------- --------------
Net Investment Income (Loss) .................................... 2,959 6,910 510
--------- -------- --------------
Net Realized Gain on Investments ................................ 26,207 73,232 --
Net Realized Gain on Investments in Affiliated Funds ............ -- -- 2,748
Net Realized Loss on Foreign Currency Transactions .............. -- -- --
Net Realized Gain on Written Option Contracts (2) ............... -- 13 --
Net Realized Gain (Loss) on Futures Contracts ................... -- -- --
Change in Unrealized Appreciation (Depreciation)
on Investments ............................................... (10,685) (4,583) (41)
Change in Unrealized Appreciation (Depreciation)
on Investments in Affiliated Funds ........................... -- -- 4,341
Change in Unrealized Appreciation (Depreciation)
on Foreign Currency Transactions ............................. -- -- --
Change in Unrealized Appreciation (Depreciation)
on Written Options ........................................... -- (13) --
Change in Unrealized Appreciation (Depreciation)
on Futures Contracts ......................................... -- -- --
--------- -------- --------------
Net Realized and Unrealized Gain (Loss) on Investments .......... 15,522 68,649 7,048
--------- -------- --------------
Increase (Decrease) in Net Assets Resulting from Operations ..... $ 18,481 $ 75,559 $ 7,558
========= ======== ==============
The accompanying notes are an integral part of the financial statements.
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[HIGHMARK FUNDS LOGO OMITTED](R)
[MOUNTAIN RANGE GRAPHIC OMITTED]
STATEMENTS OF OPERATIONS (000)
FOR THE YEAR OR PERIOD ENDED JULY 31, 2007
DIVERSIFIED GROWTH & INCOME
EQUITY INCOME PLUS
ALLOCATION ALLOCATION ALLOCATION BOND
FUND (2) FUND FUND FUND
----------- ---------- ---------- --------
Income from Investments in Affiliated Funds ..................... $ 22 $ 1,252 $ 231 $ --
Interest Income ................................................. -- 107 18 22,352+
Dividend Income ................................................. -- -- -- 9
----------- ---------- ---------- --------
Total Investment Income ............................. 22 1,359 249 22,361
----------- ---------- ---------- --------
Expenses:
Investment Adviser Fee ....................................... 6 121 16 2,012
Shareholder Servicing Fees Fiduciary Shares .................. -- -- -- 905
Shareholder Servicing Fees Class A Shares .................... 5 106 12 85
Shareholder Servicing Fees Class B Shares .................... -- -- -- 16
Administrative Fee ........................................... 53 90 12 603
Custodian Fees ............................................... -- 6 1 40
Trustees Fees ................................................ -- 2 -- 19
Chief Compliance Officer Fees ................................ -- 1 -- 9
Distribution Fees Class A Shares ............................. 5 106 12 85
Distribution Fees Class B Shares ............................. -- -- -- 47
Distribution Fees Class C Shares ............................. 7 181 31 1
Distribution Fees Class S Shares ............................. -- -- -- --
Professional Fees ............................................ 1 13 5 86
Transfer Agent Fees .......................................... 1 12 2 75
Printing Fees ................................................ -- 7 1 47
Registration Fees ............................................ -- 4 1 32
Insurance Fees ............................................... -- 1 -- 7
Miscellaneous Fees ........................................... -- 1 -- 34
----------- ---------- ---------- --------
Total Expenses ...................................... 78 651 93 4,103
----------- ---------- ---------- --------
Less: Waivers and Reduction of Expenses
Investment Adviser Fees ............................. (6) (86) (9) (97)
Reimbursement from Investment Adviser ............... (46) -- -- --
Shareholder Servicing Fees .......................... (4) (84) (10) (719)
Administrative Fees ................................. (1) (15) (2) (101)
Reduction of Expenses (1) ........................... -- (7) (1) (44)
----------- ---------- ---------- --------
Total Waivers and Reduction of Expenses ...................... (57) (192) (22) (961)
----------- ---------- ---------- --------
Total Net Expenses ........................................... 21 459 71 3,142
----------- ---------- ---------- --------
Net Investment Income ........................................... 1 900 178 19,219
----------- ---------- ---------- --------
Net Realized Gain (Loss) on Investments ......................... -- -- -- 2,400
Net Realized Gain on Investments
in Affiliated Funds .......................................... 48 1,848 139 --
Change in Unrealized Appreciation (Depreciation)
on Investments ............................................... (4) (29) (2) (446)
Change in Unrealized Appreciation (Depreciation)
on Investments in Affiliated Funds ........................... 34 3,315 252 --
----------- ---------- ---------- --------
Net Realized and Unrealized Gain (Loss) on Investments .......... 78 5,134 389 1,954
----------- ---------- ---------- --------
Increase in Net Assets Resulting from Operations ................ $ 79 $ 6,034 $ 567 $ 21,173
=========== ========== ========== ========
AMOUNTS DESIGNATED AS "--" ARE EITHER NOT APPLICABLE, $0 OR HAVE BEEN ROUNDED TO
$0.
+ INCLUDES INCOME FROM SECURITIES LENDING PROGRAM (SEE NOTE 6 IN NOTES TO
FINANCIAL STATEMENTS).
(1) SEE NOTE 3 IN NOTES TO FINANCIAL STATEMENTS.
(2) COMMENCED OPERATIONS ON NOVEMBER 15, 2006.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
112 1.800.433.6884
- --------------------------------------------------------------------------------
[MOUNTAIN RANGE GRAPHIC OMITTED]
CALIFORNIA NATIONAL CALIFORNIA
INTERMEDIATE INTERMEDIATE SHORT TERM TAX-FREE
TAX-FREE BOND TAX-FREE BOND BOND MONEY MARKET
FUND FUND FUND FUND
------------- ------------- ---------- ------------
Income from Investments in Affiliated Funds ..................... $ -- $ -- $ -- $ --
Interest Income ................................................. 5,361 3,136 2,269+ 20,359
Dividend Income ................................................. 25 31 -- 8
------------- ------------- ---------- ------------
Total Investment Income ............................ 5,386 3,167 2,269 20,367
------------- ------------- ---------- ------------
Expenses:
Investment Adviser Fee ....................................... 646 375 190 1,717
Shareholder Servicing Fees Fiduciary Shares .................. 231 180 111 555
Shareholder Servicing Fees Class A Shares .................... 79 8 2 753
Shareholder Servicing Fees Class B Shares .................... 13 -- -- --
Administrative Fee ........................................... 194 112 71 858
Custodian Fees ............................................... 13 7 5 57
Trustees Fees ................................................ 6 3 2 26
Chief Compliance Officer Fees ................................ 3 2 1 13
Distribution Fees Class A Shares ............................. 79 8 2 753
Distribution Fees Class B Shares ............................. 37 -- -- --
Distribution Fees Class C Shares ............................. 3 -- 17 --
Distribution Fees Class S Shares ............................. -- -- -- 270
Professional Fees ............................................ 23 14 11 95
Transfer Agent Fees .......................................... 24 14 9 110
Printing Fees ................................................ 15 9 5 65
Registration Fees ............................................ 24 14 5 95
Insurance Fees ............................................... 2 1 1 8
Miscellaneous Fees ........................................... 23 15 19 26
------------- ------------- ---------- ------------
Total Expenses ...................................... 1,415 762 451 5,401
------------- ------------- ---------- ------------
Less: Waivers and Reduction of Expenses
Investment Adviser Fees ............................. (351) (371) (9) (434)
Reimbursement from Investment Adviser ............... -- -- -- --
Shareholder Servicing Fees .......................... (248) (150) (99) (1,046)
Administrative Fees ................................. (32) (19) (12) (143)
Reduction of Expenses (1) ........................... (14) (8) (5) (62)
------------- ------------- ---------- ------------
Total Waivers and Reduction of Expenses ...................... (645) (548) (125) (1,685)
------------- ------------- ---------- ------------
Total Net Expenses ........................................... 770 214 326 3,716
------------- ------------- ---------- ------------
Net Investment Income ........................................... 4,616 2,953 1,943 16,651
------------- ------------- ---------- ------------
Net Realized Gain (Loss) on Investments ......................... 193 50 (46) 1
Net Realized Gain on Investments
in Affiliated Funds .......................................... -- -- -- --
Change in Unrealized Appreciation (Depreciation)
on Investments ............................................... (669) (246) 258 --
Change in Unrealized Appreciation (Depreciation)
on Investments in Affiliated Funds ........................... -- -- -- --
------------- ------------- ---------- ------------
Net Realized and Unrealized Gain (Loss) on Investments .......... (476) (196) 212 1
------------- ------------- ---------- ------------
Increase in Net Assets Resulting from Operations ................ $ 4,140 $ 2,757 $ 2,155 $ 16,652
============= ============= ========== ============
DIVERSIFIED U.S. GOVERNMENT 100% U.S. TREASURY
MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND
------------ --------------- ------------------
Income from Investments in Affiliated Funds ..................... $ -- $ -- $ --
Interest Income ................................................. 155,842 30,698 37,412
Dividend Income ................................................. -- -- --
------------ --------------- ------------------
Total Investment Income ............................. 155,842 30,698 37,412
------------ --------------- ------------------
Expenses:
Investment Adviser Fee ....................................... 8,661 1,731 2,247
Shareholder Servicing Fees Fiduciary Shares .................. 4,258 1,069 898
Shareholder Servicing Fees Class A Shares .................... 1,935 79 331
Shareholder Servicing Fees Class B Shares .................... -- 2 --
Administrative Fee ........................................... 4,330 865 1,123
Custodian Fees ............................................... 289 58 75
Trustees Fees ................................................ 109 26 35
Chief Compliance Officer Fees ................................ 64 13 17
Distribution Fees Class A Shares ............................. 1,935 79 331
Distribution Fees Class B Shares ............................. -- 4 --
Distribution Fees Class C Shares ............................. -- 1 --
Distribution Fees Class S Shares ............................. 2,255 644 1,414
Professional Fees ............................................ 605 92 119
Transfer Agent Fees .......................................... 547 108 137
Printing Fees ................................................ 344 66 86
Registration Fees ............................................ 269 79 105
Insurance Fees ............................................... 47 9 13
Miscellaneous Fees ........................................... 63 61 16
------------ --------------- ------------------
Total Expenses ...................................... 25,711 4,986 6,947
------------ --------------- ------------------
Less: Waivers and Reduction of Expenses
Investment Adviser Fees ............................. (577) (162) (145)
Reimbursement from Investment Adviser ............... -- -- --
Shareholder Servicing Fees .......................... (4,955) (918) (983)
Administrative Fees ................................. (722) (144) (187)
Reduction of Expenses (1) ........................... (317) (63) (82)
------------ --------------- ------------------
Total Waivers and Reduction of Expenses ...................... (6,571) (1,287) (1,397)
------------ --------------- ------------------
Total Net Expenses ........................................... 19,140 3,699 5,550
------------ --------------- ------------------
Net Investment Income ........................................... 136,702 26,999 31,862
------------ --------------- ------------------
Net Realized Gain (Loss) on Investments ......................... 132 -- 9
Net Realized Gain on Investments
in Affiliated Funds .......................................... -- -- --
Change in Unrealized Appreciation (Depreciation)
on Investments ............................................... -- -- --
Change in Unrealized Appreciation (Depreciation)
on Investments in Affiliated Funds ........................... -- -- --
------------ --------------- ------------------
Net Realized and Unrealized Gain (Loss) on Investments .......... 132 -- 9
------------ --------------- ------------------
Increase in Net Assets Resulting from Operations ................ $ 136,834 $ 26,999 $ 31,871
============ =============== ==================
The accompanying notes are an integral part of the financial statements.
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[HIGHMARK FUNDS LOGO OMITTED](R)
[MOUNTAIN RANGE GRAPHIC OMITTED]
STATEMENTS OF CHANGES IN NET ASSETS (000)
FOR THE YEARS OR PERIODS ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
BALANCED COGNITIVE VALUE CORE EQUITY
FUND FUND FUND
-------------------- ------------------------------- ---------------------
2007 2006 2007 2006 (5) 2005 (6) 2007 2006
-------------------- ------------------------------- ---------------------
Investment Activities:
Net Investment Income (Loss) .................... $ 892 $ 1,006 $ 695 $ 384 $ 203 $ 1,378 $ 1,137
Net Realized Gain (Loss) on Investments ......... 3,125 2,442 12,716 9,616 11,222 15,877 10,112
Net Realized Loss on Foreign Currency
Transactions ................................. -- -- -- -- -- -- --
Net Realized Gain (Loss) on Futures Contracts ... -- 150 -- -- -- 72 (3)
Change in Unrealized Appreciation (Depreciation)
on Investments ............................... 1,166 (1,797) (2,105) (1,351) 1,276 (19) (1,170)
Change in Unrealized Appreciation (Depreciation)
on Foreign Currency Transactions ............. -- -- -- -- -- -- --
Change in Unrealized Appreciation (Depreciation)
on Futures Contracts ......................... -- -- -- -- -- (25) --
--------- --------- --------- --------- --------- --------- ---------
Net Increase (Decrease) in Net Assets Resulting
From Operations ................................. 5,183 1,801 11,306 8,649 12,701 17,283 10,076
--------- --------- --------- --------- --------- --------- ---------
Dividends and Distribution:
Net Investment Income:
Fiduciary Shares ............................. (737) (863) (20) -- -- (1,302) (1,110)
Class A Shares ............................... (130) (120) (14) -- -- (43) (24)
Class B Shares ............................... (33) (36) -- -- -- (12) (9)
Class C Shares ............................... (5) (4) -- -- -- (2) (1)
Class M Shares ............................... -- -- (458) (212) (159) -- --
Capital Gains:
Fiduciary Shares ............................. (1,064) -- (445) -- -- -- --
Class A Shares ............................... (190) -- (345) -- -- -- --
Class B Shares ............................... (78) -- -- -- -- -- --
Class C Shares ............................... (10) -- -- -- -- -- --
Class M Shares ............................... -- -- (10,512) (11,055) (7,505) -- --
--------- --------- --------- --------- --------- --------- ---------
Total Dividends and Distributions ......... (2,247) (1,023) (11,794) (11,267) (7,664) (1,359) (1,144)
--------- --------- --------- --------- --------- --------- ---------
Change in Net Assets ............................... 2,936 778 (488) (2,618) 5,037 15,924 8,932
--------- --------- --------- --------- --------- --------- ---------
Share Transactions: (1)
Fiduciary Shares: (2)
Proceeds from Shares Issued .................. 4,487 7,230 3,225 1,735 -- 22,209 15,592
Reinvestment of Dividends and Distributions .. 1,801 863 465 -- -- 424 278
Cost of Shares Redeemed ...................... (12,727) (30,376) (3,042) -- -- (21,238) (20,005)
--------- --------- --------- --------- --------- --------- ---------
Total Fiduciary Share Transactions ........ (6,439) (22,283) 648 1,735 -- 1,395 (4,135)
--------- --------- --------- --------- --------- --------- ---------
Class A Shares: (3)
Proceeds from Shares Issued .................. 1,080 592 3,617 492 -- 6,773 317
Reinvestment of Dividends and Distributions .. 306 116 356 -- -- 41 23
Cost of Shares Redeemed ...................... (1,530) (1,181) (359) -- -- (1,273) (858)
--------- --------- --------- --------- --------- --------- ---------
Total Class A Share Transactions .......... (144) (473) 3,614 492 -- 5,541 (518)
--------- --------- --------- --------- --------- --------- ---------
Class B Shares:
Proceeds from Shares Issued .................. -- 89 -- -- -- 10 21
Reinvestment of Dividends and Distributions .. 106 34 -- -- -- 11 9
Cost of Shares Redeemed ..................... (1,098) (858) -- -- -- (438) (588)
--------- --------- --------- --------- --------- --------- ---------
Total Class B Share Transactions .......... (992) (735) -- -- -- (417) (558)
--------- --------- --------- --------- --------- --------- ---------
Class C Shares: (4)
Proceeds from Shares Issued .................. 41 138 41 3 -- 571 42
Reinvestment of Dividends and Distributions .. 14 4 -- -- -- 2 1
Cost of Shares Redeemed ...................... (23) (145) (13) -- -- (108) (36)
--------- --------- --------- --------- --------- --------- ---------
Total Class C Share Transactions .......... 32 (3) 28 3 -- 465 7
--------- --------- --------- --------- --------- --------- ---------
Class M Shares:
Proceeds from Shares Issued .................. -- -- 7,225 6,195 8,617 -- --
Reinvestment of Dividends and Distributions .. -- -- 10,101 10,446 7,033 -- --
Cost of Shares Redeemed ...................... -- -- (5,632) (8,852) (7,565) -- --
--------- --------- --------- --------- --------- --------- ---------
Total Class M Share Transactions .......... -- -- 11,694 7,789 8,085 -- --
--------- --------- --------- --------- --------- --------- ---------
Net Increase (Decrease) in Net Assets From Share
Transactions .................................... (7,543) (23,494) 15,984 10,019 8,085 6,984 (5,204)
--------- --------- --------- --------- --------- --------- ---------
Redemption Fees .............................. -- -- -- -- -- -- --
Total Increase (Decrease) in Net Assets ... (4,607) (22,716) 15,496 7,401 13,122 22,908 3,728
--------- --------- --------- --------- --------- --------- ---------
Net Assets:
Beginning of Period ............................. 48,063 70,779 93,866 86,465 73,343 116,496 112,768
--------- --------- --------- --------- --------- --------- ---------
End of Period ................................... $ 43,456 $ 48,063 $ 109,362 $ 93,866 $ 86,465 $ 139,404 $ 116,496
========= ========= ========= ========= ========= ========= =========
Undistributed Net Investment Income
(Distributions in Excess of Net Investment
Income/ Accumulated Net Investment Loss) ......... $ -- $ -- $ 486 $ 187 $ 53 $ 26 $ 7
========= ========= ========= ========= ========= ========= =========
AMOUNTS DESIGNATED AS "--" ARE EITHER NOT APPLICABLE, $0 OR HAVE BEEN ROUNDED TO
$0.
* INCLUDES REALIZED GAINS OR REDEMPTIONS AS A RESULT OF AN IN-KIND
TRANSACTION (SEE NOTE 10 IN NOTES TO FINANCIAL STATEMENTS).
(1) FOR SHARE TRANSACTIONS, SEE NOTE 12 IN NOTES TO FINANCIAL STATEMENTS.
(2) FIDUCIARY SHARES COMMENCED OPERATIONS ON JULY 3, 2006 FOR THE COGNITIVE
VALUE FUND AND ON APRIL 4, 2006 FOR THE INTERNATIONAL OPPORTUNITIES FUND.
(3) CLASS A SHARES COMMENCED OPERATIONS ON APRIL 3, 2006 FOR THE COGNITIVE
VALUE, ENHANCED GROWTH AND INTERNATIONAL OPPORTUNITIES FUNDS.
(4) CLASS C SHARES COMMENCED OPERATIONS ON APRIL 3, 2006 FOR THE COGNITIVE
VALUE, ENHANCED GROWTH AND INTERNATIONAL OPPORTUNITIES FUNDS.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
114 1.800.433.6884
- --------------------------------------------------------------------------------
[MOUNTAIN RANGE GRAPHIC OMITTED]
ENHANCED GROWTH INTERNATIONAL OPPORTUNITIES
FUND FUND
----------------------------------- -----------------------------------
2007 2006 (5) 2005 (6) 2007 2006 (5) 2005 (6)
----------------------------------- -----------------------------------
Investment Activities:
Net Investment Income (Loss) ..................... $ (489) $ (499) $ 432 $ 4,326 $ 2,302 $ 1,823
Net Realized Gain (Loss) on Investments .......... 2,546 11,121 (563) 13,973 23,804 24,936
Net Realized Loss on Foreign Currency
Transactions .................................. -- -- -- (71) (2) --
Net Realized Gain (Loss) on Futures Contracts .... -- -- -- -- -- --
Change in Unrealized Appreciation
(Depreciation) on Investments ................. 28,894 (21,123) 11,338 53,732 4,009 18,479
Change in Unrealized Appreciation
(Depreciation) on Foreign Currency
Transactions .................................. -- -- -- 15 4 --
Change in Unrealized Appreciation
(Depreciation) on Futures Contracts ........... -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Net Increase (Decrease) in Net Assets Resulting
From Operations .................................. 30,951 (10,501) 11,207 71,975 30,117 45,238
--------- --------- --------- --------- --------- ---------
Dividends and Distribution:
Net Investment Income:
Fiduciary Shares .............................. -- -- -- (352) -- --
Class A Shares ................................ -- -- -- (86) -- --
Class B Shares ................................ -- -- -- -- -- --
Class C Shares ................................ -- -- -- (21) -- --
Class M Shares ................................ -- -- (1,056) (3,461) (3,254) (1,567)
Capital Gains:
Fiduciary Shares .............................. -- -- -- (2,072) -- --
Class A Shares ................................ -- -- -- (388) -- --
Class B Shares ................................ -- -- -- -- -- --
Class C Shares ................................ -- -- -- (160) -- --
Class M Shares ................................ -- -- -- (20,527) (4,193) --
--------- --------- --------- --------- --------- ---------
Total Dividends and Distributions .......... -- -- (1,056) (27,067) (7,447) (1,567)
--------- --------- --------- --------- --------- ---------
Change in Net Assets ................................ 30,951 (10,501) 10,151 44,908 22,670 43,671
--------- --------- --------- --------- --------- ---------
Share Transactions: (1)
Fiduciary Shares: (2)
Proceeds from Shares Issued ................... -- -- -- 42,891 13,738 --
Reinvestment of Dividends and Distributions ... -- -- -- 2,206 -- --
Cost of Shares Redeemed ....................... -- -- -- (3,367) -- --
--------- --------- --------- --------- --------- ---------
Total Fiduciary Share Transactions ......... -- -- -- 41,730 13,738 --
--------- --------- --------- --------- --------- ---------
Class A Shares: (3)
Proceeds from Shares Issued ................... 174 41 -- 12,272 2,063 --
Reinvestment of Dividends and Distributions ... -- -- -- 402 -- --
Cost of Shares Redeemed ....................... (1) -- -- (1,409) (125) --
--------- --------- --------- --------- --------- ---------
Total Class A Share Transactions ........... 173 41 -- 11,265 1,938 --
--------- --------- --------- --------- --------- ---------
Class B Shares:
Proceeds from Shares Issued ................... -- -- -- -- -- --
Reinvestment of Dividends and Distributions ... -- -- -- -- -- --
Cost of Shares Redeemed ....................... -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Total Class B Share Transactions ........... -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Class C Shares: (4)
Proceeds from Shares Issued ................... 8 -- -- 2,404 783 --
Reinvestment of Dividends and Distributions ... -- -- -- 153 -- --
Cost of Shares Redeemed ....................... (3) -- -- (398) (51) --
--------- --------- --------- --------- --------- ---------
Total Class C Share Transactions ........... 5 -- -- 2,159 732 --
--------- --------- --------- --------- --------- ---------
Class M Shares:
Proceeds from Shares Issued ................... 10,616 10,144 59,106 27,035 18,186 25,653
Reinvestment of Dividends and Distributions ... -- -- 974 20,931 6,487 1,190
Cost of Shares Redeemed ....................... (24,431) (8,204) (8,169) (14,596) (15,563) (59,261)
--------- --------- --------- --------- --------- ---------
Total Class M Share Transactions ........... (13,815) 1,940 51,911 33,370 9,110 (32,418)
--------- --------- --------- --------- --------- ---------
Net Increase (Decrease) in Net Assets From Share
Transactions ..................................... (13,637) 1,981 51,911 88,524 25,518 (32,418)
--------- --------- --------- --------- --------- ---------
Redemption Fees ............................... -- -- -- 3 2 --
Total Increase (Decrease) in Net Assets .... 17,314 (8,520) 62,062 133,435 48,190 11,253
--------- --------- --------- --------- --------- ---------
Net Assets:
Beginning of Period .............................. 120,733 129,253 67,191 218,239 170,049 158,796
--------- --------- --------- --------- --------- ---------
End of Period .................................... $ 138,047 $ 120,733 $ 129,253 $ 351,674 $ 218,239 $ 170,049
========= ========= ========= ========= ========= =========
Undistributed Net Investment Income
(Distributions in Excess of Net Investment
Income/Accumulated Net Investment Loss) .......... $ (222) $ (222) $ (296) $ 2,063 $ 1,536 $ 1,775
========= ========= ========= ========= ========= =========
LARGE CAP GROWTH LARGE CAP VALUE
FUND FUND
---------------------- ----------------------
2007 2006 2007 2006
---------------------- ----------------------
Investment Activities:
Net Investment Income (Loss) ........................ $ 450 $ 7 $ 4,579 $ 2,773
Net Realized Gain (Loss) on Investments ............. 17,228 18,947* 35,741 20,846
Net Realized Loss on Foreign Currency
Transactions ..................................... -- -- -- --
Net Realized Gain (Loss) on Futures Contracts ....... -- -- -- --
Change in Unrealized Appreciation
(Depreciation) on Investments .................... 329 (14,091) (1,508) 1,846
Change in Unrealized Appreciation
(Depreciation) on Foreign Currency
Transactions ..................................... -- -- -- --
Change in Unrealized Appreciation.
(Depreciation) on Futures Contracts .............. -- -- -- --
--------- --------- --------- ---------
Net Increase (Decrease) in Net Assets Resulting
From Operations ..................................... 18,007 4,863 38,812 25,465
--------- --------- --------- ---------
Dividends and Distribution:
Net Investment Income:
Fiduciary Shares ................................. (130) (256) (2,720) (1,782)
Class A Shares ................................... -- (8) (1,680) (1,018)
Class B Shares ................................... -- -- (20) (17)
Class C Shares ................................... -- -- (49) (25)
Class M Shares ................................... -- -- -- --
Capital Gains:
Fiduciary Shares ................................. -- -- -- --
Class A Shares ................................... -- -- -- --
Class B Shares ................................... -- -- -- --
Class C Shares ................................... -- -- -- --
Class M Shares ................................... -- -- -- --
--------- --------- --------- ---------
Total Dividends and Distributions ............. (130) (264) (4,469) (2,842)
--------- --------- --------- ---------
Change in Net Assets ................................... 17,877 4,599 34,343 22,623
--------- --------- --------- ---------
Share Transactions: (1)
Fiduciary Shares: (2)
Proceeds from Shares Issued ...................... 25,197 21,435 71,062 65,766
Reinvestment of Dividends and Distributions ...... 84 171 1,969 1,267
Cost of Shares Redeemed .......................... (32,829) (52,037)* (43,646) (35,365)
--------- --------- --------- ---------
Total Fiduciary Share Transactions ............ (7,548) (30,431) 29,385 31,668
--------- --------- --------- ---------
Class A Shares: (3)
Proceeds from Shares Issued ...................... 1,567 3,512 39,994 86,547
Reinvestment of Dividends and Distributions ...... -- 7 1,510 885
Cost of Shares Redeemed .......................... (5,192) (5,431) (37,602) (24,276)
--------- --------- --------- ---------
Total Class A Share Transactions .............. (3,625) (1,912) 3,902 63,156
--------- --------- --------- ---------
Class B Shares:
Proceeds from Shares Issued ...................... -- 137 150 186
Reinvestment of Dividends and Distributions ...... -- -- 16 14
Cost of Shares Redeemed .......................... (2,597) (2,055) (1,039) (1,503)
--------- --------- --------- ---------
Total Class B Share Transactions .............. (2,597) (1,918) (873) (1,303)
--------- --------- --------- ---------
Class C Shares: (4)
Proceeds from Shares Issued ...................... 238 179 2,145 2,057
Reinvestment of Dividends and Distributions ...... -- -- 45 24
Cost of Shares Redeemed .......................... (615) (313) (996) (1,192)
--------- --------- --------- ---------
Total Class C Share Transactions .............. (377) (134) 1,194 889
--------- --------- --------- ---------
Class M Shares:
Proceeds from Shares Issued ...................... -- -- -- --
Reinvestment of Dividends and Distributions ...... -- -- -- --
Cost of Shares Redeemed .......................... -- -- -- --
--------- --------- --------- ---------
Total Class M Share Transactions .............. -- -- -- --
--------- --------- --------- ---------
Net Increase (Decrease) in Net Assets From Share
Transactions ........................................ (14,147) (34,395) 33,608 94,410
--------- --------- --------- ---------
Redemption Fees .................................. -- -- -- 7
Total Increase (Decrease) in Net Assets ....... 3,730 (29,796) 67,951 117,040
--------- --------- --------- ---------
Net Assets:
Beginning of Period ................................. 128,086 157,882 311,494 194,454
--------- --------- --------- ---------
End of Period ....................................... $ 131,816 $ 128,086 $ 379,445 $ 311,494
========= ========= ========= =========
Undistributed Net Investment Income
(Distributions in Excess of Net Investment
Income/Accumulated Net Investment Loss) ............. $ 326 $ 6 $ 112 $ 2
========= ========= ========= =========
(5) FOR THE TEN MONTH PERIOD ENDED JULY 31, 2006. ON APRIL 3, 2006, HIGHMARK
FUNDS ACQUIRED THE ASSETS AND ASSUMED THE IDENTIFIED LIABILITIES OF
BAILARD COGNITIVE VALUE FUND, BAILARD ENHANCED GROWTH FUND AND BAILARD
INTERNATIONAL EQUITY FUND (THE "BAILARD FUNDS") (SEE NOTE 9 IN NOTES TO
FINANCIAL STATEMENTS). THE FISCAL YEAR END OF THE BAILARD FUNDS, THE
PREDECESSOR FUNDS TO HIGHMARK COGNITIVE VALUE FUND, HIGHMARK ENHANCED
GROWTH FUND AND HIGHMARK INTERNATIONAL OPPORTUNITIES FUND, WAS SEPTEMBER
30. THE FISCAL YEAR END OF THE SUCCESSOR HIGHMARK FUNDS IS JULY 31.
(6) FOR THE YEAR ENDED SEPTEMBER 30.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
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[HIGHMARK FUNDS LOGO OMITTED](R)
[MOUNTAIN RANGE GRAPHIC OMITTED]
STATEMENTS OF CHANGES IN NET ASSETS (000)
FOR THE YEARS OR PERIODS ENDED JULY 31
SMALL CAP ADVANTAGE SMALL CAP VALUE VALUE MOMENTUM
FUND FUND FUND
------------------- -------------------- --------------------
2007 (2) 2007 2006 2007 2006
------------------- -------------------- --------------------
Investment Activities:
Net Investment Income ........................................ $ 61 $ 2,959 $ 1,095 $ 6,910 $ 6,190
Net Realized Gain on Investments ............................. 238 26,207 36,674 73,232 41,274
Net Realized Gain on Investments in Affiliated Funds ......... -- -- -- -- --
Net Realized Gain on Written Option Contracts ................ -- -- -- 13 98
Net Realized Loss on Futures Contracts ....................... (1) -- -- -- --
Change in Unrealized Appreciation (Depreciation)
on Investments and Written Options ........................ (2,246) (10,685) (37,893) (4,596) (5,587)
Change in Unrealized Appreciation (Depreciation)
on Investments in Affiliated Funds ........................ -- -- -- -- --
Change in Unrealized Appreciation (Depreciation)
on Futures Contracts ...................................... (55) -- -- -- --
--------- --------- --------- --------- ---------
Net Increase (Decrease) in Net Assets Resulting From
Operations ................................................... (2,003) 18,481 (124) 75,559 41,975
--------- --------- --------- --------- ---------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares .......................................... -- (1,975) (634) (6,450) (5,796)
Class A Shares ............................................ -- (488) (219) (379) (322)
Class B Shares ............................................ -- (30) -- (52) (50)
Class C Shares ............................................ -- (72) -- (14) (7)
Capital Gains:
Fiduciary Shares .......................................... -- (22,034) (9,813) (43,692) (45,279)
Class A Shares ............................................ -- (7,488) (4,972) (3,126) (3,120)
Class B Shares ............................................ -- (1,616) (1,057) (725) (965)
Class C Shares ............................................ -- (2,582) (1,370) (172) (125)
--------- --------- --------- --------- ---------
Total Dividends and Distributions ...................... -- (36,285) (18,065) (54,610) (55,664)
--------- --------- --------- --------- ---------
Change in Net Assets ............................................ (2,003) (17,804) (18,189) 20,949 (13,689)
--------- --------- --------- --------- ---------
Share Transactions: (1)
Fiduciary Shares:
Proceeds from Shares Issued ............................... 30,700 75,694 72,844 59,373 57,731
Reinvestment of Dividends and Distributions ............... -- 21,292 9,562 46,664 47,477
Cost of Shares Redeemed ................................... (1,148) (70,159) (43,312) (113,573) (89,442)
--------- --------- --------- --------- ---------
Total Fiduciary Share Transactions ..................... 29,552 26,827 39,094 (7,536) 15,766
--------- --------- --------- --------- ---------
Class A Shares:
Proceeds from Shares Issued ............................... 126 19,351 38,819 5,109 4,201
Reinvestment of Dividends and Distributions ............... -- 6,346 4,525 3,160 3,038
Cost of Shares Redeemed ................................... -- (27,237) (28,565) (7,923) (5,073)
--------- --------- --------- --------- ---------
Total Class A Share Transactions ....................... 126 (1,540) 14,779 346 2,166
--------- --------- --------- --------- ---------
Class B Shares:
Proceeds from Shares Issued ............................... -- 88 256 234 110
Reinvestment of Dividends and Distributions ............... -- 1,526 985 755 978
Cost of Shares Redeemed ................................... -- (3,047) (2,645) (1,978) (2,718)
--------- --------- --------- --------- ---------
Total Class B Share Transactions ....................... -- (1,433) (1,404) (989) (1,630)
--------- --------- --------- --------- ---------
Class C Shares:
Proceeds from Shares Issued ............................... 145 5,834 4,444 680 483
Reinvestment of Dividends and Distributions ............... -- 2,487 1,251 163 105
Cost of Shares Redeemed ................................... -- (5,558) (6,251) (284) (315)
--------- --------- --------- --------- ---------
Total Class C Share Transactions ....................... 145 2,763 (556) 559 273
--------- --------- --------- --------- ---------
Net Increase (Decrease) in Net Assets From Share Transactions ... 29,823 26,617 51,913 (7,620) 16,575
--------- --------- --------- --------- ---------
Redemption Fees ........................................... -- 9 -- -- --
Total Increase (Decrease) in Net Assets ................ 27,820 8,822 33,724 13,329 2,886
--------- --------- --------- --------- ---------
Net Assets:
Beginning of Period .......................................... -- 260,750 227,026 473,040 470,154
--------- --------- --------- --------- ---------
End of Period ................................................ $ 27,820 $ 269,572 $ 260,750 $ 486,369 $ 473,040
========= ========= ========= ========= =========
Undistributed (Distributions in Excess of) Net Investment Income/
(Accumulated Net Investment Loss) ............................ $ 72 $ 1,192 $ 611 $ 35 $ 20
========= ========= ========= ========= =========
AMOUNTS DESIGNATED AS "--" ARE EITHER NOT APPLICABLE, $0 OR HAVE BEEN ROUNDED TO
$0.
(1) FOR SHARE TRANSACTIONS, SEE NOTE 12 IN NOTES TO FINANCIAL STATEMENTS.
(2) COMMENCED OPERATIONS ON MARCH 1, 2007.
(3) FIDUCIARY SHARES COMMENCED OPERATIONS ON NOVEMBER 15, 2006.
(4) COMMENCED OPERATIONS ON NOVEMBER 15, 2006.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
116 1.800.433.6884
- --------------------------------------------------------------------------------
[MOUNTAIN RANGE GRAPHIC OMITTED]
CAPITAL GROWTH DIVERSIFIED EQUITY GROWTH & INCOME
ALLOCATION ALLOCATION ALLOCATION
FUND FUND FUND
---------------------- ------------------ ---------------------
2007 (3) 2006 2007 (4) 2007 (3) 2006
---------------------- ------------------ ---------------------
Investment Activities:
Net Investment Income ................................ $ 510 $ 66 $ 1 $ 900 $ 237
Net Realized Gain on Investments ..................... -- -- -- -- --
Net Realized Gain on Investments in Affiliated
Funds ............................................. 2,748 825 48 1,848 640
Net Realized Gain on Written Option Contracts ........ -- -- -- -- --
Net Realized Loss on Futures Contracts ............... -- -- -- -- --
Change in Unrealized Appreciation (Depreciation)
on Investments and Written Options ................ (41) -- (4) (29) --
Change in Unrealized Appreciation (Depreciation)
on Investments in Affiliated Funds ................ 4,341 (24) 34 3,315 (149)
Change in Unrealized Appreciation (Depreciation)
on Futures Contracts .............................. -- -- -- -- --
--------- --------- --------- --------- ---------
Net Increase (Decrease) in Net Assets Resulting From
Operations ........................................... 7,558 867 79 6,034 728
--------- --------- --------- --------- ---------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares .................................. (5) -- (1) -- --
Class A Shares .................................... (655) (72) (11) (891) (188)
Class B Shares .................................... -- -- -- -- --
Class C Shares .................................... (261) (9) (1) (263) (35)
Capital Gains:
Fiduciary Shares .................................. (3) -- -- -- --
Class A Shares .................................... (531) (50) -- (481) (35)
Class B Shares .................................... -- -- -- -- --
Class C Shares .................................... (285) (25) -- (189) (17)
--------- --------- --------- --------- ---------
Total Dividends and Distributions .............. (1,740) (156) (13) (1,824) (275)
--------- --------- --------- --------- ---------
Change in Net Assets .................................... 5,818 711 66 4,210 453
--------- --------- --------- --------- ---------
Share Transactions: (1)
Fiduciary Shares:
Proceeds from Shares Issued ....................... 772 -- 184 101 --
Reinvestment of Dividends and Distributions ....... 8 -- 1 -- --
Cost of Shares Redeemed ........................... -- -- (3) (103) --
--------- --------- --------- --------- ---------
Total Fiduciary Share Transactions ............. 780 -- 182 (2) --
--------- --------- --------- --------- ---------
Class A Shares:
Proceeds from Shares Issued ....................... 22,759 23,251 5,174 19,192 24,075
Reinvestment of Dividends and Distributions ....... 1,050 105 3 1,237 195
Cost of Shares Redeemed ........................... (9,477) (1,957) (381) (7,317) (3,301)
--------- --------- --------- --------- ---------
Total Class A Share Transactions ............... 14,332 21,399 4,796 13,112 20,969
--------- --------- --------- --------- ---------
Class B Shares:
Proceeds from Shares Issued ....................... -- -- -- -- --
Reinvestment of Dividends and Distributions ....... -- -- -- -- --
Cost of Shares Redeemed ........................... -- -- -- -- --
--------- --------- --------- --------- ---------
Total Class B Share Transactions ............... -- -- -- -- --
--------- --------- --------- --------- ---------
Class C Shares:
Proceeds from Shares Issued ....................... 14,516 12,908 2,086 12,348 7,866
Reinvestment of Dividends and Distributions ....... 517 30 1 419 48
Cost of Shares Redeemed ........................... (3,594) (961) (91) (2,751) (896)
--------- --------- --------- --------- ---------
Total Class C Share Transactions ............... 11,439 11,977 1,996 10,016 7,018
--------- --------- --------- --------- ---------
Net Increase (Decrease) in Net Assets From Share
Transactions ......................................... 26,551 33,376 6,974 23,126 27,987
--------- --------- --------- --------- ---------
Redemption Fees ................................... -- -- -- -- --
Total Increase (Decrease) in Net Assets ........ 32,369 34,087 7,040 27,336 28,440
--------- --------- --------- --------- ---------
Net Assets:
Beginning of Period .................................. 47,618 13,531 -- 43,178 14,738
--------- --------- --------- --------- ---------
End of Period ........................................ $ 79,987 $ 47,618 $ 7,040 $ 70,514 $ 43,178
========= ========= ========= ========= =========
Undistributed (Distributions in Excess of) Net Investment
Income/(Accumulated Net Investment Loss) ............. $ -- $ -- $ -- $ 44 $ 18
========= ========= ========= ========= =========
INCOME PLUS
ALLOCATION BOND
FUND FUND
---------------------- ----------------------
2007 (3) 2006 2007 2006
---------------------- ----------------------
Investment Activities:
Net Investment Income ................................ $ 178 $ 84 $ 19,219 $ 21,262
Net Realized Gain on Investments ..................... -- -- 2,400 619
Net Realized Gain on Investments in Affiliated
Funds ............................................. 139 86 -- --
Net Realized Gain on Written Option Contracts ........ -- -- -- --
Net Realized Loss on Futures Contracts ............... -- -- -- --
Change in Unrealized Appreciation (Depreciation)
on Investments and Written Options ................ (2) -- (446) (17,315)
Change in Unrealized Appreciation (Depreciation)
on Investments in Affiliated Funds ................ 252 (45) -- --
Change in Unrealized Appreciation (Depreciation)
on Futures Contracts .............................. -- -- -- --
--------- --------- --------- ---------
Net Increase (Decrease) in Net Assets Resulting From
Operations ........................................... 567 125 21,173 4,566
--------- --------- --------- ---------
Dividends and Distributions to Shareholders:
Net Investment Income:
Fiduciary Shares .................................. (1) -- (17,191) (19,775)
Class A Shares .................................... (124) (61) (1,555) (1,829)
Class B Shares .................................... -- -- (246) (299)
Class C Shares .................................... (61) (19) (4) (2)
Capital Gains:
Fiduciary Shares .................................. -- -- -- --
Class A Shares .................................... (64) (2) -- --
Class B Shares .................................... -- -- -- --
Class C Shares .................................... (38) (1) -- --
--------- --------- --------- ---------
Total Dividends and Distributions .............. (288) (83) (18,996) (21,905)
--------- --------- --------- ---------
Change in Net Assets .................................... 279 42 2,177 (17,339)
--------- --------- --------- ---------
Share Transactions: (1)
Fiduciary Shares:
Proceeds from Shares Issued ....................... 104 -- 58,092 74,228
Reinvestment of Dividends and Distributions ....... -- -- 8,149 9,937
Cost of Shares Redeemed ........................... -- -- (111,610) (102,276)
--------- --------- --------- ---------
Total Fiduciary Share Transactions ............. 104 -- (45,369) (18,111)
--------- --------- --------- ---------
Class A Shares:
Proceeds from Shares Issued ....................... 2,545 2,410 1,445 1,333
Reinvestment of Dividends and Distributions ....... 132 41 1,166 1,273
Cost of Shares Redeemed ........................... (1,046) (1,009) (7,222) (9,841)
--------- --------- --------- ---------
Total Class A Share Transactions ............... 1,631 1,442 (4,611) (7,235)
--------- --------- --------- ---------
Class B Shares:
Proceeds from Shares Issued ....................... -- -- 32 104
Reinvestment of Dividends and Distributions ....... -- -- 206 241
Cost of Shares Redeemed ........................... -- -- (1,621) (1,217)
--------- --------- --------- ---------
Total Class B Share Transactions ............... -- -- (1,383) (872)
--------- --------- --------- ---------
Class C Shares:
Proceeds from Shares Issued ....................... 1,976 1,828 20 81
Reinvestment of Dividends and Distributions ....... 68 16 2 1
Cost of Shares Redeemed ........................... (458) (277) (10) (27)
--------- --------- --------- ---------
Total Class C Share Transactions ............... 1,586 1,567 12 55
--------- --------- --------- ---------
Net Increase (Decrease) in Net Assets From Share
Transactions ......................................... 3,321 3,009 (51,351) (26,163)
--------- --------- --------- ---------
Redemption Fees ................................... -- -- -- --
Total Increase (Decrease) in Net Assets ........ 3,600 3,051 (49,174) (43,502)
--------- --------- --------- ---------
Net Assets:
Beginning of Period .................................. 5,737 2,686 438,531 482,033
--------- --------- --------- ---------
End of Period ........................................ $ 9,337 $ 5,737 $ 389,357 $ 438,531
========= ========= ========= =========
Undistributed (Distributions in Excess of) Net Investment
Income/(Accumulated Net Investment Loss) ............. $ 16 $ 8 $ 680 $ 524
========= ========= ========= =========
The accompanying notes are an integral part of the financial statements.
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[HIGHMARK FUNDS LOGO OMITTED](R)
[MOUNTAIN RANGE GRAPHIC OMITTED]
STATEMENTS OF CHANGES IN NET ASSETS (000)
FOR THE YEARS ENDED JULY 31
CALIFORNIA INTERMEDIATE NATIONAL INTERMEDIATE SHORT TERM
TAX-FREE BOND TAX-FREE BOND BOND
FUND FUND FUND
----------------------- --------------------- --------------------
2007 2006 2007 2006 2007 2006
----------------------- --------------------- --------------------
Investment Activities:
Net Investment Income .............................. $ 4,616 $ 5,449 $ 2,953 $ 3,404 $ 1,943 $ 1,160
Net Realized Gain (Loss) on Investments ............ 193 676 50 486 (46) (25)
Change in Unrealized Appreciation (Depreciation)
on Investments ................................... (669) (3,922) (246) (2,346) 258 (236)
---------- ---------- -------- -------- -------- ---------
Net Increase in Net Assets Resulting From Operations .. 4,140 2,203 2,757 1,544 2,155 899
---------- ---------- -------- -------- -------- ---------
Dividends and Distributions:
Net Investment Income:
Fiduciary Shares ................................. (3,449) (3,682) (2,889) (3,337) (1,846) (1,049)
Class A Shares ................................... (1,103) (1,588) (119) (131) (34) (50)
Class B Shares ................................... (139) (166) -- -- -- --
Class C Shares ................................... (12) (25) (1) (2) (72) (70)
Class S Shares ................................... -- -- -- -- -- --
Capital Gains:
Fiduciary Shares ................................. (343) (993) (261) (657) -- --
Class A Shares ................................... (119) (475) (12) (30) -- --
Class B Shares ................................... (19) (61) -- -- -- --
Class C Shares ................................... (2) (9) -- -- -- --
---------- ---------- -------- -------- -------- ---------
Total Dividends and Distributions .............. (5,186) (6,999) (3,282) (4,157) (1,952) (1,169)
---------- ---------- -------- -------- -------- ---------
Change in Net Assets .................................. (1,046) (4,796) (525) (2,613) 203 (270)
---------- ---------- -------- -------- -------- ---------
Share Transactions: (1)
Fiduciary Shares:
Proceeds from Shares Issued ...................... 7,433 6,658 2,588 1,483 24,507 16,148
Reinvestment of Dividends and Distributions ...... 557 1,148 266 656 1,085 502
Cost of Shares Redeemed .......................... (12,614) (11,505) (9,864) (14,374) (7,634) (4,473)
---------- ---------- -------- -------- -------- ---------
Total Fiduciary Share Transactions ............. (4,624) (3,699) (7,010) (12,235) 17,958 12,177
---------- ---------- -------- -------- -------- ---------
Class A Shares:
Proceeds from Shares Issued ...................... 980 3,804 881 842 1,992 1,668
Reinvestment of Dividends and Distributions ...... 837 1,458 113 134 25 24
Cost of Shares Redeemed .......................... (11,578) (20,339) (728) (1,662) (2,981) (2,007)
---------- ---------- -------- -------- -------- ---------
Total Class A Share Transactions ............... (9,761) (15,077) 266 (686) (964) (315)
---------- ---------- -------- -------- -------- ---------
Class B Shares:
Proceeds from Shares Issued ...................... -- 16 -- -- -- --
Reinvestment of Dividends and Distributions ...... 115 166 -- -- -- --
Cost of Shares Redeemed .......................... (1,091) (1,002) -- -- -- --
---------- ---------- -------- -------- -------- ---------
Total Class B Share Transactions ............... (976) (820) -- -- -- --
---------- ---------- -------- -------- -------- ---------
Class C Shares:
Proceeds from Shares Issued ...................... 75 133 -- -- 75 2,880
Reinvestment of Dividends and Distributions ...... 12 26 1 2 3 2
Cost of Shares Redeemed .......................... (366) (518) (20) (25) (995) (354)
---------- ---------- -------- -------- -------- ---------
Total Class C Share Transactions ............... (279) (359) (19) (23) (917) 2,528
---------- ---------- -------- -------- -------- ---------
Class S Shares:
Proceeds from Shares Issued ...................... -- -- -- -- -- --
Reinvestment of Dividends ........................ -- -- -- -- -- --
Cost of Shares Redeemed .......................... -- -- -- -- -- --
---------- ---------- -------- -------- -------- ---------
Total Class S Share Transactions ............... -- -- -- -- -- --
---------- ---------- -------- -------- -------- ---------
Net Increase (Decrease) in Net Assets From Share
Transactions ....................................... (15,640) (19,955) (6,763) (12,944) 16,077 14,390
---------- ---------- -------- -------- -------- ---------
Redemption Fees -- -- -- -- -- --
Total Increase (Decrease) in Net Assets ........ (16,686) (24,751) (7,288) (15,557) 16,280 14,120
---------- ---------- -------- -------- -------- ---------
Net Assets:
Beginning of Period .............................. 138,623 163,374 78,349 93,906 40,119 25,999
---------- ---------- -------- -------- -------- ---------
End of Period .................................... $ 121,937 $ 138,623 $ 71,061 $ 78,349 $ 56,399 $ 40,119
========== ========== ======== ======== ======== =========
Undistributed Net Investment Income ................... $ 87 $ 174 $ 56 $ 112 $ 45 $ 45
========== ========== ======== ======== ======== =========
AMOUNTS DESIGNATED AS "--" ARE EITHER NOT APPLICABLE, $0 OR HAVE BEEN ROUNDED TO
$0.
(1) FOR SHARE TRANSACTIONS, SEE NOTE 12 IN NOTES TO FINANCIAL STATEMENTS.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
118 1.800.433.6884
- --------------------------------------------------------------------------------
[MOUNTAIN RANGE GRAPHIC OMITTED]
CALIFORNIA TAX-FREE DIVERSIFIED
MONEY MARKET MONEY MARKET
FUND FUND
----------------------- --------------------------
2007 2006 2007 2006
----------------------- --------------------------
Investment Activities:
Net Investment Income .............................. $ 16,651 $ 11,785 $ 136,702 $ 122,374
Net Realized Gain (Loss) on Investments ............ 1 5 132 (4)
Change in Unrealized Appreciation (Depreciation)
on Investments ................................... -- -- -- --
---------- ---------- ----------- -----------
Net Increase in Net Assets Resulting From Operations .. 16,652 11,790 136,834 122,370
---------- ---------- ----------- -----------
Dividends and Distributions:
Net Investment Income:
Fiduciary Shares ................................. (6,841) (5,027) (83,000) (80,087)
Class A Shares ................................... (8,534) (6,057) (35,768) (23,786)
Class B Shares ................................... -- -- -- --
Class C Shares ................................... -- -- -- --
Class S Shares ................................... (1,277) (700) (17,934) (18,501)
Capital Gains:
Fiduciary Shares ................................. -- -- -- --
Class A Shares ................................... -- -- -- --
Class B Shares ................................... -- -- -- --
Class C Shares ................................... -- -- -- --
---------- ---------- ----------- -----------
Total Dividends and Distributions .............. (16,652) (11,784) (136,702) (122,374)
---------- ---------- ----------- -----------
Change in Net Assets .................................. -- 6 132 (4)
---------- ---------- ----------- -----------
Share Transactions: (1)
Fiduciary Shares:
Proceeds from Shares Issued ...................... 641,908 538,460 4,525,094 5,610,560
Reinvestment of Dividends and Distributions ...... 1 25 19,336 14,690
Cost of Shares Redeemed .......................... (592,039) (550,493) (4,703,462) (5,819,885)
---------- ---------- ----------- -----------
Total Fiduciary Share Transactions ............. 49,870 (12,008) (159,032) (194,635)
---------- ---------- ----------- -----------
Class A Shares:
Proceeds from Shares Issued ...................... 483,968 538,589 894,427 854,366
Reinvestment of Dividends and Distributions ...... 8,529 6,054 35,491 23,518
Cost of Shares Redeemed .......................... (441,219) (534,337) (861,894) (709,417)
---------- ---------- ----------- -----------
Total Class A Share Transactions ............... 51,278 10,306 68,024 168,467
---------- ---------- ----------- -----------
Class B Shares:
Proceeds from Shares Issued ...................... -- -- -- --
Reinvestment of Dividends and Distributions ...... -- -- -- --
Cost of Shares Redeemed .......................... -- -- -- --
---------- ---------- ----------- -----------
Total Class B Share Transactions ............... -- -- -- --
---------- ---------- ----------- -----------
Class C Shares:
Proceeds from Shares Issued ...................... -- -- -- --
Reinvestment of Dividends and Distributions ...... -- -- -- --
Cost of Shares Redeemed .......................... -- -- -- --
---------- ---------- ----------- -----------
Total Class C Share Transactions ............... -- -- -- --
---------- ---------- ----------- -----------
Class S Shares:
Proceeds from Shares Issued ...................... 216,148 204,308 1,087,759 2,559,035
Reinvestment of Dividends ........................ 1,277 700 17,934 18,501
Cost of Shares Redeemed .......................... (201,457) (201,798) (1,197,714) (2,758,484)
---------- ---------- ----------- -----------
Total Class S Share Transactions ............... 15,968 3,210 (92,021) (180,948)
---------- ---------- ----------- -----------
Net Increase (Decrease) in Net Assets From Share
Transactions ....................................... 117,116 1,508 (183,029) (207,116)
---------- ---------- ----------- -----------
Redemption Fees -- -- -- --
Total Increase (Decrease) in Net Assets ........ 117,116 1,514 (182,897) (207,120)
---------- ---------- ----------- -----------
Net Assets:
Beginning of Period .............................. 495,906 494,392 3,112,834 3,319,954
---------- ---------- ----------- -----------
End of Period .................................... $ 613,022 $ 495,906 $ 2,929,93 $ 3,112,834
========== ========== =========== ===========
Undistributed Net Investment Income ................... $ -- $ 1 $ -- $ --
========== ========== =========== ===========
U.S. GOVERNMENT 100% U.S. TREASURY
MONEY MARKET MONEY MARKET
FUND FUND
--------------------------- --------------------------
2007 2006 2007 2006
--------------------------- --------------------------
Investment Activities:
Net Investment Income .............................. $ 26,999 $ 20,221 $ 31,862 $ 28,842
Net Realized Gain (Loss) on Investments ............ -- (1) 9 (18)
Change in Unrealized Appreciation (Depreciation)
on Investments ................................... -- -- -- --
------------ ----------- ----------- -----------
Net Increase in Net Assets Resulting From Operations .. 26,999 20,220 31,871 28,824
------------ ----------- ----------- -----------
Dividends and Distributions:
Net Investment Income:
Fiduciary Shares ................................. (20,510) (15,723) (16,054) (15,215)
Class A Shares ................................... (1,431) (1,152) (5,597) (5,056)
Class B Shares ................................... (23) (29) -- --
Class C Shares ................................... (3) (1) -- --
Class S Shares ................................... (5,032) (3,315) (10,211) (8,571)
Capital Gains:
Fiduciary Shares ................................. -- -- -- --
Class A Shares ................................... -- -- -- --
Class B Shares ................................... -- -- -- --
Class C Shares ................................... -- -- -- --
------------ ----------- ----------- -----------
Total Dividends and Distributions .............. (26,999) (20,220) (31,862) (28,842)
------------ ----------- ----------- -----------
Change in Net Assets .................................. -- -- 9 (18)
------------ ----------- ----------- -----------
Share Transactions: (1)
Fiduciary Shares:
Proceeds from Shares Issued ...................... 3,562,106 4,084,427 2,256,238 2,941,432
Reinvestment of Dividends and Distributions ...... 379 298 789 624
Cost of Shares Redeemed .......................... (3,612,255) (4,015,957) (2,314,729) (2,956,423)
------------ ----------- ----------- -----------
Total Fiduciary Share Transactions ............. (49,770) 68,768 (57,702) (14,367)
------------ ----------- ----------- -----------
Class A Shares:
Proceeds from Shares Issued ...................... 127,289 74,914 428,419 403,706
Reinvestment of Dividends and Distributions ...... 1,430 1,152 5,597 5,056
Cost of Shares Redeemed .......................... (127,913) (76,752) (459,648) (432,280)
------------ ----------- ----------- -----------
Total Class A Share Transactions ............... 806 (686) (25,632) (23,518)
------------ ----------- ----------- -----------
Class B Shares:
Proceeds from Shares Issued ...................... 42 138 -- --
Reinvestment of Dividends and Distributions ...... 22 27 -- --
Cost of Shares Redeemed .......................... (412) (563) -- --
------------ ----------- ----------- -----------
Total Class B Share Transactions ............... (348) (398) -- --
------------ ----------- ----------- -----------
Class C Shares:
Proceeds from Shares Issued ...................... 123 60 -- --
Reinvestment of Dividends and Distributions ...... 3 1 -- --
Cost of Shares Redeemed .......................... (158) -- -- --
------------ ----------- ----------- -----------
Total Class C Share Transactions ............... (32) 61 -- --
------------ ----------- ----------- -----------
Class S Shares:
Proceeds from Shares Issued ...................... 731,414 616,790 1,169,540 1,063,189
Reinvestment of Dividends ........................ 5,032 3,315 10,211 8,571
Cost of Shares Redeemed .......................... (700,791) (585,681) (1,182,674) (1,099,919)
------------ ----------- ----------- -----------
Total Class S Share Transactions ............... 35,655 34,424 (2,923) (28,159)
------------ ----------- ----------- -----------
Net Increase (Decrease) in Net Assets From Share
Transactions ....................................... (13,689) 102,169 (86,257) (66,044)
------------ ----------- ----------- -----------
Redemption Fees -- -- -- --
Total Increase (Decrease) in Net Assets ........ (13,689) 102,169 (86,248) (66,062)
------------ ----------- ----------- -----------
Net Assets:
Beginning of Period .............................. 633,193 531,024 801,244 867,306
------------ ----------- ----------- -----------
End of Period .................................... $ 619,504 $ 633,193 $ 714,996 $ 801,244
============ =========== =========== ===========
Undistributed Net Investment Income ................... $ -- $ -- $ -- $ --
============ =========== =========== ===========
The accompanying notes are an integral part of the financial statements.
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[HIGHMARK FUNDS LOGO OMITTED](R)
[MOUNTAIN RANGE GRAPHIC OMITTED]
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE YEARS OR PERIODS ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS
----------------------------- ----------------------
NET
ASSET NET REALIZED TOTAL
VALUE, NET AND UNREALIZED TOTAL NET FROM
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL DIVIDENDS AND REDEMPTION
OF PERIOD INCOME (LOSS)+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS FEES
- -----------------------------------------------------------------------------------------------------------------------------
- -------------
BALANCED FUND
- -------------
FIDUCIARY SHARES
2007 $ 14.06 $ 0.296 $ 1.300 $ 1.596 $ (0.301) $ (0.405) $(0.706) $ --
2006 13.81 0.257 0.258 0.515 (0.265) -- (0.265) --
2005 12.90 0.267 0.922 1.189 (0.279) -- (0.279) --
2004 12.10 0.171 0.796 0.967 (0.167) -- (0.167) --
2003 11.53 0.262 0.563 0.825 (0.255) -- (0.255) --
CLASS A SHARES
2007 $ 14.04 $ 0.260 $ 1.291 $ 1.551 $ (0.266) $ (0.405) $(0.671) $ --
2006 13.79 0.224 0.258 0.482 (0.232) -- (0.232) --
2005 12.88 0.228 0.929 1.157 (0.247) -- (0.247) --
2004 12.09 0.138 0.787 0.925 (0.135) -- (0.135) --
2003 11.51 0.227 0.581 0.808 (0.228) -- (0.228) --
CLASS B SHARES
2007 $ 14.00 $ 0.170 $ 1.282 $ 1.452 $ (0.177) $ (0.405) $(0.582) $ --
2006 13.75 0.138 0.259 0.397 (0.147) -- (0.147) --
2005 12.85 0.142 0.920 1.062 (0.162) -- (0.162) --
2004 12.06 0.054 0.791 0.845 (0.055) -- (0.055) --
2003 11.49 0.152 0.573 0.725 (0.155) -- (0.155) --
CLASS C SHARES
2007 $ 13.98 $ 0.171 $ 1.284 $ 1.455 $ (0.180) $ (0.405) $(0.585) $ --
2006 13.73 0.138 0.261 0.399 (0.149) -- (0.149) --
2005 12.84 0.142 0.910 1.052 (0.162) -- (0.162) --
2004 12.06 0.053 0.789 0.842 (0.062) -- (0.062) --
2003 11.49 0.154 0.571 0.725 (0.155) -- (0.155) --
- --------------------
COGNITIVE VALUE FUND
- --------------------
FIDUCIARY SHARES
2007 $ 13.03 $ 0.078 $ 1.475 $ 1.553 $ (0.059) $ (1.494) $(1.553) $ --
2006 (1) 13.38 0.011 (0.361) (0.350) -- -- -- --
CLASS A SHARES
2007 $ 13.02 $ 0.037 $ 1.461 $ 1.498 $ (0.054) $ (1.494) $(1.548) $ --
2006 (2) 13.53 0.029 (0.539) (0.510) -- -- -- --
CLASS C SHARES
2007 $ 12.98 $ (0.043) $ 1.447 $ 1.404 $ -- $ (1.494) $(1.494) $ --
2006 (2) 13.53 (0.013) (0.537) (0.550) -- -- -- --
CLASS M SHARES
2007 $ 13.02 $ 0.088 $ 1.465 $ 1.553 $ (0.059) $ (1.494) $(1.553) $ --
2006 (3) 13.59 0.056 1.155 1.211 (0.033) (1.748) (1.781) --
2005 (4) 12.79 0.03 2.08 2.11 (0.03) (1.28) (1.31) --
2004 (4) 10.56 0.01 2.22 2.23 -- -- -- --
2003 (4) 8.43 (0.01) 2.16 2.15 (0.01) (0.01) (0.02) --
2002 (4) 8.84 0.01 (0.41) (0.40) (0.01) -- (0.01) --
RATIO
OF EXPENSES
TO AVERAGE RATIO OF
NET NET NET ASSETS NET
ASSET ASSETS, RATIO EXCLUDING INVESTMENT
VALUE, END OF EXPENSES FEE WAIVERS INCOME (LOSS) PORTFOLIO
END TOTAL OF PERIOD TO AVERAGE AND REDUCTION TO AVERAGE TURNOVER
OF PERIOD RETURN** (000) NET ASSETS OF EXPENSES NET ASSETS RATE
- ------------------------------------------------------------------------------------------------------------
- -------------
BALANCED FUND
- -------------
FIDUCIARY SHARES
2007 $ 14.95 11.47% $ 33,427 0.94% 1.12% 1.99% 23%
2006 14.06 3.77 37,571 0.92 1.10 1.85 16
2005 13.81 9.32 59,278 0.95 1.19 2.00 57
2004 12.90 8.01 118,555 0.94 1.12 1.32 97
2003 12.10 7.30 115,067 0.94 1.12 2.29 55
CLASS A SHARES
2007 $ 14.92 11.14% $ 7,359 1.19% 1.37% 1.75% 23%
2006 14.04 3.52 7,065 1.17 1.34 1.61 16
2005 13.79 9.07 7,408 1.21 1.45 1.71 57
2004 12.88 7.66 7,172 1.19 1.37 1.07 97
2003 12.09 7.15 7,280 1.20 1.37 1.98 55
CLASS B SHARES
2007 $ 14.87 10.44% $ 2,277 1.79% 1.87% 1.15% 23%
2006 14.00 2.90 3,089 1.79 1.85 0.99 16
2005 13.75 8.31 3,759 1.86 1.95 1.07 57
2004 12.85 7.02 4,364 1.84 1.87 0.42 97
2003 12.06 6.39 4,235 1.85 1.87 1.33 55
CLASS C SHARES
2007 $ 14.85 10.48% $ 393 1.79% 1.87% 1.15% 23%
2006 13.98 2.92 338 1.79 1.85 0.99 16
2005 13.73 8.24 334 1.86 1.95 1.07 57
2004 12.84 6.99 327 1.84 1.87 0.42 97
2003 12.06 6.39 137 1.85 1.87 1.35 55
- --------------------
COGNITIVE VALUE FUND
- --------------------
FIDUCIARY SHARES
2007 $ 13.03 11.97% $ 2,270 0.94% 1.23% 0.58% 103%
2006 (1) 13.03 (2.62) 1,728 0.39* 0.39* 1.08* 76
CLASS A SHARES
2007 $ 12.97 11.52% $ 3,766 1.34% 1.48% 0.28% 103%
2006 (2) 13.02 (3.77) 483 0.94* 0.94* 0.67* 76
CLASS C SHARES
2007 $ 12.89 10.79% $ 31 1.97% 2.01% (0.32)% 103%
2006 (2) 12.98 (4.07) 3 1.86* 1.86* (0.29)* 76
CLASS M SHARES
2007 $ 13.02 11.98% $ 103,295 0.94% 0.97% 0.65% 103%
2006 (3) 13.02 10.13 91,652 1.00* 1.02* 0.51* 76
2005 (4) 13.59 17.14 86,500 1.09 1.09 0.25 59
2004 (4) 12.79 21.12 73,300 1.14 1.14 0.06 76
2003 (4) 10.56 25.55 77,100 1.17 1.17 (0.07) 65
2002 (4) 8.43 (4.55) 57,100 1.11 1.11 0.07 51
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* ANNUALIZED.
** TOTAL RETURN DOES NOT REFLECT ANY APPLICABLE SALES CHARGE. TOTAL RETURN IS
FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
+ PER SHARE AMOUNTS CALCULATED USING AVERAGE SHARES METHOD.
++ AMOUNT REPRESENTS LESS THAN $1,000.
(1) COMMENCED OPERATIONS ON JULY 3, 2006.
(2) COMMENCED OPERATIONS ON APRIL 3, 2006.
(3) FOR THE TEN MONTH PERIOD ENDED JULY 31, 2006. ON APRIL 3, 2006, HIGHMARK
FUNDS ACQUIRED THE ASSETS AND ASSUMED THE IDENTIFIED LIABILITIES OF
BAILARD COGNITIVE VALUE FUND, BAILARD ENHANCED GROWTH FUND AND BAILARD
INTERNATIONAL EQUITY FUND (THE "BAILARD FUNDS") (SEE NOTE 9 IN NOTES TO
FINANCIAL STATEMENTS). THE FISCAL YEAR END OF THE BAILARD FUNDS, THE
PREDECESSOR FUNDS TO HIGHMARK COGNITIVE VALUE FUND, HIGHMARK ENHANCED
GROWTH FUND AND HIGHMARK INTERNATIONAL OPPORTUNITIES FUND, WAS SEPTEMBER
30. THE FISCAL YEAR END OF THE SUCCESSOR HIGHMARK FUNDS IS JULY 31.
(4) FOR THE YEAR ENDED SEPTEMBER 30.
(5) COMMENCED OPERATIONS ON NOVEMBER 28, 2003.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
120 1.800.433.6884
- --------------------------------------------------------------------------------
[MOUNTAIN RANGE GRAPHIC OMITTED]
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS
----------------------------- ----------------------
NET
ASSET NET REALIZED TOTAL
VALUE, NET AND UNREALIZED TOTAL NET FROM
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL DIVIDENDS AND REDEMPTION
OF PERIOD INCOME (LOSS)+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS FEES
- -----------------------------------------------------------------------------------------------------------------------------
- ----------------
CORE EQUITY FUND
- ----------------
FIDUCIARY SHARES
2007 $ 8.78 $ 0.104 $ 1.178 $ 1.282 $(0.102) $ -- $(0.102) $ --
2006 8.10 0.088 0.680 0.768 (0.088) -- (0.088) --
2005 7.36 0.101 0.738 0.839 (0.099) -- (0.099) --
2004 6.73 0.029 0.630 0.659 (0.029) -- (0.029) --
2003 6.22 0.055 0.508 0.563 (0.053) -- (0.053) --
CLASS A SHARES
2007 $ 8.76 $ 0.072 $ 1.175 $ 1.247 $(0.077) $ -- $(0.077) $ --
2006 8.09 0.066 0.672 0.738 (0.068) -- (0.068) --
2005 7.34 0.076 0.751 0.827 (0.077) -- (0.077) --
2004 6.72 0.010 0.626 0.636 (0.016) -- (0.016) --
2003 6.21 0.037 0.512 0.549 (0.039) -- (0.039) --
CLASS B SHARES
2007 $ 8.61 $ 0.018 $ 1.152 $ 1.170 $(0.040) $ -- $(0.040) $ --
2006 7.95 0.014 0.671 0.685 (0.025) -- (0.025) --
2005 7.23 0.032 0.732 0.764 (0.044) -- (0.044) --
2004 6.66 (0.037) 0.609 0.572 (0.002) -- (0.002) --
2003 6.17 (0.001) 0.505 0.504 (0.014) -- (0.014) --
CLASS C SHARES
2007 $ 8.61 $ 0.013 $ 1.155 $ 1.168 $(0.038) $ -- $(0.038) $ --
2006 7.96 0.014 0.661 0.675 (0.025) -- (0.025) --
2005 7.24 0.030 0.735 0.765 (0.045) -- (0.045) --
2004 (5) 7.16 (0.030) 0.112 0.082 (0.002) -- (0.002) --
- --------------------
ENHANCED GROWTH FUND
- --------------------
CLASS A SHARES
2007 $ 8.05 $ (0.075) $ 2.195 $ 2.120 $ -- $ -- $ -- $ --
2006 (2) 9.29 (0.029) (1.211) (1.240) -- -- -- --
CLASS C SHARES
2007 $ 8.06 $ (0.133) $ 2.193 $ 2.060 $ -- $ -- $ -- $ --
2006 (2) 9.29 (0.025) (1.205) (1.230) -- -- -- --
CLASS M SHARES
2007 $ 8.07 $ (0.035) $ 2.205 $ 2.170 $ -- $ -- $ -- $ --
2006 (3) 8.78 (0.034) (0.676) (0.710) -- -- -- --
2005 (4) 7.89 0.03 0.94 0.97 (0.08) -- (0.08) --
2004 (4) 7.33 (0.07) 0.63 0.56 -- -- -- --
2003 (4) 4.80 (0.06) 2.59 2.53 -- -- -- --
2002 (4) 6.50 (0.08) (1.62) (1.70) -- -- -- --
RATIO
OF EXPENSES
TO AVERAGE RATIO OF
NET NET NET ASSETS NET
ASSET ASSETS, RATIO EXCLUDING INVESTMENT
VALUE, END OF EXPENSES FEE WAIVERS INCOME (LOSS) PORTFOLIO
END TOTAL OF PERIOD TO AVERAGE AND REDUCTION TO AVERAGE TURNOVER
OF PERIOD RETURN** (000) NET ASSETS OF EXPENSES NET ASSETS RATE
- ------------------------------------------------------------------------------------------------------------
- ----------------
CORE EQUITY FUND
- ----------------
FIDUCIARY SHARES
2007 $ 9.96 14.61% $ 127,266 0.91% 1.08% 1.05% 79%
2006 8.78 9.53 110,720 0.91 1.07 1.04 72
2005 8.10 11.47 106,413 0.93 1.18 1.31 101
2004 7.36 9.80 113,334 0.92 1.10 0.38 119
2003 6.73 9.15 115,045 0.92 1.09 0.89 71
CLASS A SHARES
2007 $ 9.93 14.24% $ 8,664 1.18% 1.34% 0.72% 79%
2006 8.76 9.15 2,749 1.17 1.34 0.79 72
2005 8.09 11.32 3,031 1.18 1.43 1.00 101
2004 7.34 9.47 3,657 1.17 1.35 0.13 119
2003 6.72 8.91 3,233 1.16 1.34 0.61 71
CLASS B SHARES
2007 $ 9.74 13.57% $ 2,663 1.78% 1.83% 0.19% 79%
2006 8.61 8.63 2,717 1.79 1.84 0.17 72
2005 7.95 10.60 3,044 1.83 1.93 0.42 101
2004 7.23 8.60 3,249 1.82 1.85 (0.52) 119
2003 6.66 8.20 3,093 1.82 1.84 (0.01) 71
CLASS C SHARES
2007 $ 9.74 13.59% $ 811 1.78% 1.83% 0.13% 79%
2006 8.61 8.50 310 1.79 1.84 0.17 72
2005 7.96 10.59 280 1.83 1.93 0.40 101
2004 (5) 7.24 1.14 277 1.83* 1.88* (0.60)* 119
- --------------------
ENHANCED GROWTH FUND
- --------------------
CLASS A SHARES
2007 $ 10.17 26.34% $ 223 1.35% 1.49% (0.77)% 40%
2006 (2) 8.05 (13.35) 39 1.35* 1.49* (1.10)* 53
CLASS C SHARES
2007 $ 10.12 25.56% $ 6 1.89% 1.92% (1.38)% 40%
2006 (2) 8.06 (13.24) --++ 1.47* 1.49* (0.87)* 53
CLASS M SHARES
2007 $ 10.24 26.89% $ 137,818 0.93% 0.97% (0.37)% 40%
2006 (3) 8.07 (8.09) 120,694 0.97* 0.98* (0.46)* 53
2005 (4) 8.78 12.24 129,300 1.00 1.00 0.37 8
2004 (4) 7.89 7.64 67,200 1.11 1.11 (0.84) 14
2003 (4) 7.33 52.71 75,000 1.15 1.15 (0.97) 62
2002 (4) 4.80 (26.15) 49,700 1.18 1.18 (1.09) 18
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
WWW.HIGHMARKFUNDS.COM 121
- --------------------------------------------------------------------------------
[HIGHMARK FUNDS LOGO OMITTED](R)
[MOUNTAIN RANGE GRAPHIC OMITTED]
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE YEARS OR PERIODS ENDED JULY 31 (UNLESS OTHERWISE INDICATED)
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS
----------------------------- ----------------------
NET
ASSET NET REALIZED TOTAL
VALUE, NET AND UNREALIZED TOTAL NET FROM
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL DIVIDENDS AND REDEMPTION
OF PERIOD INCOME (LOSS)+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS FEES
- ------------------------------------------------------------------------------------------------------------------------------
- --------------------------------
INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------
FIDUCIARY SHARES
2007 $ 8.53 $ 0.154 $ 2.203 $ 2.357 $ (0.128) $(0.829) $ (0.957) $ --
2006 (1) 8.69 0.073 (0.233) (0.160) -- -- -- --
CLASS A SHARES
2007 $ 8.52 $ 0.136 $ 2.194 $ 2.330 $ (0.121) $(0.829) $ (0.950) $ --
2006 (2) 8.63 0.052 (0.184) (0.132) -- -- -- 0.022
CLASS C SHARES
2007 $ 8.49 $ 0.056 $ 2.193 $ 2.249 $ (0.100) $(0.829) $ (0.929) $ --
2006 (2) 8.63 0.034 (0.174) (0.140) -- -- -- --
CLASS M SHARES
2007 $ 8.52 $ 0.139 $ 2.229 $ 2.368 $ (0.129) $(0.829) $ (0.958) $ --
2006 (3) 7.54 0.095 1.219 1.314 (0.146) (0.188) (0.334) --
2005 (4) 5.79 0.07 1.73 1.80 (0.05) -- (0.05) --
2004 (4) 4.79 0.05 1.00 1.05 (0.05) -- (0.05) --
2003 (4) 3.70 0.06 1.05 1.11 (0.02) --# (0.02) --
2002 (4) 4.27 0.03 (0.60) (0.57) -- -- -- --
- ---------------------
LARGE CAP GROWTH FUND
- ---------------------
FIDUCIARY SHARES
2007 $ 8.77 $ 0.040 $ 1.231 $ 1.271 $ (0.011) $ -- $ (0.011) $ --
2006 8.61 0.009 0.170 0.179 (0.019) -- (0.019) --
2005 7.50 0.042 1.094 1.136 (0.026) -- (0.026) --
2004 7.25 (0.012) 0.236 0.224 -- -- -- 0.026
2003 6.53 0.003 0.722 0.725 (0.005)++ -- (0.005) --
CLASS A SHARES
2007 $ 8.63 $ 0.014 $ 1.206 $ 1.220 $ -- $ -- $ -- $ --
2006 8.48 (0.013) 0.167 0.154 (0.004) -- (0.004) --
2005 7.39 0.022 1.076 1.098 (0.008) -- (0.008) --
2004 7.15 (0.031) 0.243 0.212 -- -- -- 0.028
2003 6.47 (0.014) 0.694 0.680 --++ -- -- --
CLASS B SHARES
2007 $ 8.13 $ (0.040) $ 1.140 $ 1.100 $ -- $ -- $ -- $ --
2006 8.03 (0.064) 0.164 0.100 -- -- -- --
2005 7.04 (0.027) 1.017 0.990 -- -- -- --
2004 6.86 (0.077) 0.231 0.154 -- -- -- 0.026
2003 6.24 (0.053) 0.673 0.620 -- -- -- --
CLASS C SHARES
2007 $ 8.14 $ (0.039) $ 1.129 $ 1.090 $ -- $ -- $ -- $ --
2006 8.04 (0.064) 0.164 0.100 -- -- -- --
2005 7.05 (0.027) 1.017 0.990 -- -- -- --
2004 6.87 (0.078) 0.227 0.149 -- -- -- 0.031
2003 6.24 (0.055) 0.685 0.630 -- -- -- --
RATIO
OF EXPENSES
TO AVERAGE RATIO OF
NET NET NET ASSETS NET
ASSET ASSETS, RATIO EXCLUDING INVESTMENT
VALUE, END OF EXPENSES FEE WAIVERS INCOME (LOSS) PORTFOLIO
END TOTAL OF PERIOD TO AVERAGE AND REDUCTION TO AVERAGE TURNOVER
OF PERIOD RETURN** (000) NET ASSETS OF EXPENSES NET ASSETS RATE
- ----------------------------------------------------------------------------------------------------------------
- --------------------------------
INTERNATIONAL OPPORTUNITIES FUND
- --------------------------------
FIDUCIARY SHARES
2007 $ 9.93 29.30% $ 60,509 1.26% 1.48% 1.65% 32%
2006 (1) 8.53 (1.84) 13,422 1.29* 1.34* 2.65* 48
CLASS A SHARES
2007 $ 9.90 29.00% $ 14,532 1.50% 1.74% 1.45% 32%
2006 (2) 8.52 (1.27) 1,952 1.69* 1.84* 1.88* 48
CLASS C SHARES
2007 $ 9.81 28.04% $ 3,159 2.18% 2.23% 0.61% 32%
2006 (2) 8.49 (1.62) 731 2.28* 2.33* 1.23* 48
CLASS M SHARES
2007 $ 9.93 29.48% $ 273,474 1.17% 1.21% 1.51% 32%
2006 (3) 8.52 17.96 202,134 1.25* 1.27* 1.41* 48
2005 (4) 7.54 31.32 170,000 1.45 1.45 1.13 74
2004 (4) 5.79 21.95 158,800 1.35 1.35 0.92 69
2003 (4) 4.79 30.12 114,000 1.37 1.37 1.38 39
2002 (4) 3.70 (13.35) 91,400 1.34 1.34 0.59 69
- ---------------------
LARGE CAP GROWTH FUND
- ---------------------
FIDUCIARY SHARES
2007 $ 10.03 14.50% $ 110,600 0.93% 1.09% 0.42% 88%
2006 8.77 2.07 103,454 0.89 1.07 0.10 68
2005 8.61 15.16 129,824 0.94 1.16 0.53 73
2004 7.50 3.45 137,682 0.94 1.13 (0.15) 93
2003 7.25 11.11 161,181 0.94 1.12 0.05 57
CLASS A SHARES
2007 $ 9.85 14.14% $ 14,284 1.19% 1.34% 0.15% 88%
2006 8.63 1.81 15,809 1.14 1.32 (0.15) 68
2005 8.48 14.86 17,377 1.19 1.41 0.29 73
2004 7.39 3.36 18,845 1.19 1.38 (0.40) 93
2003 7.15 10.51 18,858 1.20 1.37 (0.22) 57
CLASS B SHARES
2007 $ 9.23 13.53% $ 5,835 1.79% 1.84% (0.45)% 88%
2006 8.13 1.25 7,519 1.76 1.83 (0.77) 68
2005 8.03 14.06 9,259 1.84 1.91 (0.37) 73
2004 7.04 2.62 10,003 1.84 1.88 (1.05) 93
2003 6.86 9.94 10,558 1.85 1.87 (0.85) 57
CLASS C SHARES
2007 $ 9.23 13.39% $ 1,097 1.79% 1.84% (0.44)% 88%
2006 8.14 1.24 1,304 1.76 1.83 (0.77) 68
2005 8.04 14.04 1,422 1.84 1.91 (0.36) 73
2004 7.05 2.62 1,543 1.84 1.88 (1.05) 93
2003 6.87 10.10 1,223 1.85 1.87 (0.87) 57
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* ANNUALIZED.
** TOTAL RETURN DOES NOT REFLECT ANY APPLICABLE SALES CHARGE. TOTAL RETURN IS
FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
# AMOUNT REPRESENTS LESS THAN $0.01.
+ PER SHARE AMOUNTS CALCULATED USING AVERAGE SHARES METHOD.
++ FOR THE FIDUCIARY SHARES, REPRESENTS A $0.005 RETURN OF CAPITAL FOR TAX
PURPOSES. FOR CLASS A, REPRESENTS A $0.0002 RETURN OF CAPITAL FOR TAX
PURPOSES.
(1) COMMENCED OPERATIONS ON APRIL 4, 2006.
(2) COMMENCED OPERATIONS ON APRIL 3, 2006.
(3) FOR THE TEN MONTH PERIOD ENDED JULY 31, 2006. ON APRIL 3, 2006, HIGHMARK
FUNDS ACQUIRED THE ASSETS AND ASSUMED THE IDENTIFIED LIABILITIES OF
BAILARD COGNITIVE VALUE FUND, BAILARD ENHANCED GROWTH FUND AND BAILARD
INTERNATIONAL EQUITY FUND (THE "BAILARD FUNDS") (SEE NOTE 9 IN NOTES TO
FINANCIAL STATEMENTS). THE FISCAL YEAR END OF THE BAILARD FUNDS, THE
PREDECESSOR FUNDS TO HIGHMARK COGNITIVE VALUE FUND, HIGHMARK ENHANCED
GROWTH FUND AND HIGHMARK INTERNATIONAL OPPORTUNITIES FUND, WAS SEPTEMBER
30. THE FISCAL YEAR END OF THE SUCCESSOR HIGHMARK FUNDS IS JULY 31.
(4) FOR THE YEAR ENDED SEPTEMBER 30.
(5) COMMENCED OPERATIONS ON MARCH 1, 2007.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
122 1.800.433.6884
- --------------------------------------------------------------------------------
[MOUNTAIN RANGE GRAPHIC OMITTED]
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS
----------------------------- ----------------------
NET
ASSET NET REALIZED TOTAL
VALUE, NET AND UNREALIZED TOTAL NET FROM
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL DIVIDENDS AND REDEMPTION
OF PERIOD INCOME (LOSS)+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS FEES
- ------------------------------------------------------------------------------------------------------------------------------
- --------------------
LARGE CAP VALUE FUND
- --------------------
FIDUCIARY SHARES
2007 $ 13.67 $ 0.211 $ 1.483 $ 1.694 $ (0.204) $ -- $ (0.204) $ --
2006 12.49 0.161 1.182 1.343 (0.163) -- (0.163) --
2005 10.41 0.133 2.077 2.210 (0.130) -- (0.130) --
2004 8.74 0.100 1.670 1.770 (0.100) -- (0.100) --
2003 8.25 0.105 0.484 0.589 (0.099) -- (0.099) --
CLASS A SHARES
2007 $ 13.70 $ 0.171 $ 1.485 $ 1.656 $ (0.166) $ -- $ (0.166) $ --
2006 12.52 0.129 1.181 1.310 (0.131) -- (0.131) 0.001
2005 10.43 0.103 2.090 2.193 (0.103) -- (0.103) --
2004 8.76 0.075 1.671 1.746 (0.076) -- (0.076) --
2003 8.26 0.085 0.495 0.580 (0.080) -- (0.080) --
CLASS B SHARES
2007 $ 13.50 $ 0.082 $ 1.458 $ 1.540 $ (0.100) $ -- $ (0.100) $ --
2006 12.35 0.047 1.163 1.210 (0.060) -- (0.060) --
2005 10.31 0.029 2.052 2.081 (0.041) -- (0.041) --
2004 8.67 0.010 1.653 1.663 (0.023) -- (0.023) --
2003 8.19 0.032 0.488 0.520 (0.040) -- (0.040) --
CLASS C SHARES
2007 $ 13.47 $ 0.079 $ 1.452 $ 1.531 $ (0.101) $ -- $ (0.101) $ --
2006 12.32 0.046 1.166 1.212 (0.062) -- (0.062) --
2005 10.28 0.027 2.057 2.084 (0.044) -- (0.044) --
2004 8.65 0.010 1.649 1.659 (0.029) -- (0.029) --
2003 8.18 0.035 0.480 0.515 (0.045) -- (0.045) --
- ------------------------
SMALL CAP ADVANTAGE FUND
- ------------------------
FIDUCIARY SHARES
2007 (5) $ 20.00 $ 0.052 $ (1.222) $ (1.170) $ -- $ -- $ -- $ --
CLASS A SHARES
2007 (5) $ 20.00 $ 0.021 $ (1.201) $ (1.180) $ -- $ -- $ -- $ --
CLASS C SHARES
2007 (5) $ 20.00 $ (0.031) $ (1.169) $ (1.200) $ -- $ -- $ -- $ --
RATIO
OF EXPENSES
TO AVERAGE RATIO OF
NET NET NET ASSETS NET
ASSET ASSETS, RATIO EXCLUDING INVESTMENT
VALUE, END OF EXPENSES FEE WAIVERS INCOME (LOSS) PORTFOLIO
END TOTAL OF PERIOD TO AVERAGE AND REDUCTION TO AVERAGE TURNOVER
OF PERIOD RETURN** (000) NET ASSETS OF EXPENSES NET ASSETS RATE
- ----------------------------------------------------------------------------------------------------------------
- --------------------
LARGE CAP VALUE FUND
- --------------------
FIDUCIARY SHARES
2007 $ 15.16 12.40% $ 216,156 0.89% 1.08% 1.39% 84%
2006 13.67 10.82 168,092 0.92 1.08 1.23 81
2005 12.49 21.35 123,343 0.93 1.17 1.15 99
2004 10.41 20.32 87,181 0.93 1.12 1.00 86
2003 8.74 7.26 65,363 0.93 1.11 1.30 337
CLASS A SHARES
2007 $ 15.19 12.09% $ 153,045 1.14% 1.33% 1.13% 84%
2006 13.70 10.52 134,433 1.17 1.32 0.98 81
2005 12.52 21.12 62,537 1.18 1.42 0.89 99
2004 10.43 19.98 33,442 1.18 1.37 0.75 86
2003 8.76 7.12 29,036 1.18 1.36 1.05 337
CLASS B SHARES
2007 $ 14.94 11.40% $ 2,502 1.74% 1.83% 0.55% 84%
2006 13.50 9.81 3,042 1.79 1.84 0.36 81
2005 12.35 20.22 3,996 1.83 1.92 0.26 99
2004 10.31 19.20 3,640 1.83 1.87 0.10 86
2003 8.67 6.41 2,005 1.83 1.86 0.40 337
CLASS C SHARES
2007 $ 14.90 11.36% $ 7,742 1.74% 1.83% 0.53% 84%
2006 13.47 9.86 5,927 1.79 1.84 0.36 81
2005 12.32 20.31 4,578 1.83 1.92 0.23 99
2004 10.28 19.20 1,769 1.85 1.90 0.10 86
2003 8.65 6.36 168 1.83 1.86 0.43 337
- ------------------------
SMALL CAP ADVANTAGE FUND
- ------------------------
FIDUCIARY SHARES
2007 (5) $ 18.83 (5.85)% $ 27,572 1.30%* 1.60%* 0.61%* 26%
CLASS A SHARES
2007 (5) $ 18.82 (5.90)% $ 117 1.56%* 2.02%* 0.24%* 26%
CLASS C SHARES
2007 (5) $ 18.80 (6.00)% $ 131 2.17%* 2.62%* (0.35)%* 26%
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
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[HIGHMARK FUNDS LOGO OMITTED](R)
[MOUNTAIN RANGE GRAPHIC OMITTED]
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE YEARS OR PERIODS ENDED JULY 31
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS
----------------------------- ----------------------
NET
ASSET NET REALIZED TOTAL
VALUE, NET AND UNREALIZED TOTAL NET FROM
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL DIVIDENDS AND REDEMPTION
OF PERIOD INCOME (LOSS)+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS FEES
- ------------------------------------------------------------------------------------------------------------------------------
- --------------------
SMALL CAP VALUE FUND
- --------------------
FIDUCIARY SHARES
2007 $ 18.12 $ 0.215 $ 1.128 $ 1.343 $ (0.180) $(2.234) $ (2.414) $ 0.001
2006 19.55 0.115 (0.156) (0.041) (0.080) (1.309) (1.389) --
2005 16.05 0.078 4.474 4.552 (0.019) (1.033) (1.052) --
2004 13.53 0.037 2.758 2.795 (0.072) (0.203) (0.275) --
2003 11.25 0.074 2.227 2.301 (0.021) -- (0.021) --
CLASS A SHARES
2007 $ 17.77 $ 0.167 $ 1.109 $ 1.276 $ (0.133) $(2.234) $ (2.367) $ 0.001
2006 19.21 0.068 (0.145) (0.077) (0.054) (1.309) (1.363) --
2005 15.82 0.033 4.403 4.436 (0.013) (1.033) (1.046) --
2004 13.36 (0.005) 2.726 2.721 (0.058) (0.203) (0.261) --
2003 11.13 0.047 2.194 2.241 (0.011) -- (0.011) --
CLASS B SHARES
2007 $ 17.01 $ 0.058 $ 1.052 $ 1.110 $ (0.037) $(2.234) $ (2.271) $ 0.001
2006 18.51 (0.043) (0.148) (0.191) -- (1.309) (1.309) --
2005 15.36 (0.074) 4.263 4.189 (0.006) (1.033) (1.039) --
2004 13.03 (0.101) 2.658 2.557 (0.024) (0.203) (0.227) --
2003 10.93 (0.027) 2.127 2.100 -- -- -- --
CLASS C SHARES
2007 $ 16.94 $ 0.052 $ 1.056 $ 1.108 $ (0.055) $(2.234) $ (2.289) $ 0.001
2006 18.43 (0.044) (0.137) (0.181) -- (1.309) (1.309) --
2005 15.31 (0.076) 4.235 4.159 (0.006) (1.033) (1.039) --
2004 12.99 (0.111) 2.662 2.551 (0.028) (0.203) (0.231) --
2003 10.90 (0.026) 2.116 2.090 -- -- -- --
- -------------------
VALUE MOMENTUM FUND
- -------------------
FIDUCIARY SHARES
2007 $ 23.25 $ 0.343 $ 3.381 $ 3.724 $ (0.343) $(2.421) $ (2.764) $ --
2006 24.07 0.314 1.777 2.091 (0.311) (2.600) (2.911) --
2005 22.58 0.324 3.368 3.692 (0.340) (1.862) (2.202) --
2004 20.72 0.277 2.899 3.176 (0.284) (1.032) (1.316) --
2003 20.05 0.273 1.583 1.856 (0.264) (0.922) (1.186) --
CLASS A SHARES
2007 $ 23.22 $ 0.282 $ 3.373 $ 3.655 $ (0.284) $(2.421) $ (2.705) $ --
2006 24.04 0.255 1.780 2.035 (0.255) (2.600) (2.855) --
2005 22.56 0.266 3.360 3.626 (0.284) (1.862) (2.146) --
2004 20.71 0.221 2.890 3.111 (0.229) (1.032) (1.261) --
2003 20.04 0.225 1.584 1.809 (0.217) (0.922) (1.139) --
CLASS B SHARES
2007 $ 22.92 $ 0.136 $ 3.325 $ 3.461 $ (0.170) $(2.421) $ (2.591) $ --
2006 23.79 0.114 1.746 1.860 (0.130) (2.600) (2.730) --
2005 22.35 0.114 3.340 3.454 (0.152) (1.862) (2.014) --
2004 20.54 0.076 2.862 2.938 (0.096) (1.032) (1.128) --
2003 19.90 0.101 1.565 1.666 (0.104) (0.922) (1.026) --
CLASS C SHARES
2007 $ 22.86 $ 0.127 $ 3.330 $ 3.457 $ (0.176) $(2.421) $ (2.597) $ --
2006 23.74 0.110 1.742 1.852 (0.132) (2.600) (2.732) --
2005 22.32 0.107 3.331 3.438 (0.156) (1.862) (2.018) --
2004 20.51 0.077 2.862 2.939 (0.097) (1.032) (1.129) --
2003 19.87 0.102 1.563 1.665 (0.103) (0.922) (1.025) --
RATIO
OF EXPENSES
TO AVERAGE RATIO OF
NET NET NET ASSETS NET
ASSET ASSETS, RATIO EXCLUDING INVESTMENT
VALUE, END OF EXPENSES FEE WAIVERS INCOME (LOSS) PORTFOLIO
END TOTAL OF PERIOD TO AVERAGE AND REDUCTION TO AVERAGE TURNOVER
OF PERIOD RETURN** (000) NET ASSETS OF EXPENSES NET ASSETS RATE
- ----------------------------------------------------------------------------------------------------------------
- --------------------
SMALL CAP VALUE FUND
- --------------------
FIDUCIARY SHARES
2007 $ 17.05 6.83% $ 178,805 1.34% 1.48% 1.16% 46%
2006 18.12 (0.01) 164,131 1.32 1.49 0.62 35
2005 19.55 29.10 135,231 1.33 1.55 0.45 27
2004 16.05 20.72 101,687 1.32 1.50 0.23 20
2003 13.53 20.49 79,222 1.25 1.43 0.64 24
CLASS A SHARES
2007 $ 16.68 6.58% $ 59,512 1.59% 1.73% 0.91% 46%
2006 17.77 (0.21) 64,484 1.57 1.74 0.37 35
2005 19.21 28.78 54,885 1.58 1.80 0.19 27
2004 15.82 20.43 36,155 1.57 1.75 (0.02) 20
2003 13.36 20.16 23,436 1.48 1.66 0.41 24
CLASS B SHARES
2007 $ 15.85 5.86% $ 10,987 2.19% 2.23% 0.33% 46%
2006 17.01 (0.87) 13,145 2.18 2.24 (0.25) 35
2005 18.51 28.00 15,753 2.23 2.30 (0.45) 27
2004 15.36 19.68 14,079 2.22 2.25 (0.67) 20
2003 13.03 19.21 11,367 2.15 2.18 (0.24) 24
CLASS C SHARES
2007 $ 15.76 5.88% $ 20,268 2.19% 2.23% 0.30% 46%
2006 16.94 (0.82) 18,990 2.18 2.24 (0.25) 35
2005 18.43 27.89 21,157 2.23 2.30 (0.46) 27
2004 15.31 19.70 11,926 2.26 2.30 (0.73) 20
2003 12.99 19.17 3,473 2.13 2.16 (0.23) 24
- -------------------
VALUE MOMENTUM FUND
- -------------------
FIDUCIARY SHARES
2007 $ 24.21 16.38% $ 445,763 0.94% 1.08% 1.41% 19%
2006 23.25 9.32 434,080 0.93 1.08 1.35 21
2005 24.07 16.96 430,755 0.94 1.13 1.40 18
2004 22.58 15.69 389,658 0.92 1.11 1.25 20
2003 20.72 10.00 350,151 0.94 1.11 1.44 6
CLASS A SHARES
2007 $ 24.17 16.08% $ 31,773 1.19% 1.33% 1.15% 19%
2006 23.22 9.06 30,047 1.18 1.34 1.09 21
2005 24.04 16.64 28,799 1.18 1.38 1.15 18
2004 22.56 15.36 28,461 1.17 1.36 1.00 20
2003 20.71 9.74 27,208 1.19 1.36 1.18 6
CLASS B SHARES
2007 $ 23.79 15.38% $ 6,772 1.79% 1.83% 0.56% 19%
2006 22.92 8.36 7,471 1.80 1.84 0.49 21
2005 23.79 15.95 9,396 1.83 1.88 0.50 18
2004 22.35 14.59 9,208 1.82 1.86 0.35 20
2003 20.54 9.00 8,139 1.84 1.86 0.54 6
CLASS C SHARES
2007 $ 23.72 15.40% $ 2,061 1.79% 1.83% 0.53% 19%
2006 22.86 8.34 1,442 1.80 1.84 0.49 21
2005 23.74 15.90 1,204 1.84 1.88 0.47 18
2004 22.32 14.62 788 1.82 1.86 0.35 20
2003 20.51 9.01 776 1.84 1.86 0.54 6
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* ANNUALIZED.
** TOTAL RETURN DOES NOT REFLECT ANY APPLICABLE SALES CHARGE. TOTAL RETURN IS
FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
+ PER SHARE AMOUNTS CALCULATED USING AVERAGE SHARES METHOD.
++ PORTFOLIO TURNOVER INCLUDES THE PURCHASES AND SALES OF THE DIVERSIFIED
MONEY MARKET FUND. IF THESE TRANSACTIONS WERE NOT INCLUDED, PORTFOLIO
TURNOVER WOULD HAVE BEEN 4%, 7% AND 8% FOR THE CAPITAL GROWTH ALLOCATION
FUND, THE GROWTH & INCOME ALLOCATION FUND AND THE INCOME PLUS ALLOCATION
FUND, RESPECTIVELY.
# RATIOS DO NOT INCLUDE THE EXPENSES OF THE UNDERLYING FUNDS.
(1) COMMENCED OPERATIONS ON NOVEMBER 15, 2006.
(2) COMMENCED OPERATIONS ON OCTOBER 12, 2004.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
124 1.800.433.6884
- --------------------------------------------------------------------------------
[MOUNTAIN RANGE GRAPHIC OMITTED]
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS
----------------------------- ----------------------
NET
ASSET NET REALIZED TOTAL
VALUE, NET AND UNREALIZED TOTAL NET FROM
BEGINNING INVESTMENT GAIN ON FROM INVESTMENT CAPITAL DIVIDENDS AND REDEMPTION
OF PERIOD INCOME (LOSS)+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS FEES
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------
CAPITAL GROWTH ALLOCATION FUND
- ------------------------------
FIDUCIARY SHARES
2007 (1) $ 25.10 $ 0.140 $ 1.218 $ 1.358 $ (0.419) $(0.319) $ (0.738) $ --
CLASS A SHARES
2007 $ 23.17 $ 0.262 $ 3.002 $ 3.264 $ (0.395) $(0.319) $ (0.714) $ --
2006 22.16 0.112 1.066 1.178 (0.090) (0.078) (0.168) --
2005 (2) 20.00 0.082 2.157 2.239 (0.079) -- (0.079) --
CLASS C SHARES
2007 $ 22.97 $ 0.069 $ 2.989 $ 3.058 $ (0.289) $(0.319) $ (0.608) $ --
2006 22.07 (0.057) 1.063 1.006 (0.028) (0.078) (0.106) --
2005 (2) 20.00 (0.070) 2.185 2.115 (0.045) -- (0.045) --
- ----------------------------------
DIVERSIFIED EQUITY ALLOCATION FUND
- ----------------------------------
FIDUCIARY SHARES
2007 (1) $ 20.00 $ 0.239 $ 0.973 $ 1.212 $ (0.242) $ -- $ (0.242) $ --
CLASS A SHARES
2007 (1) $ 20.00 $ 0.042 $ 1.134 $ 1.176 $ (0.236) $ -- (0.236) $ --
CLASS C SHARES
2007 (1) $ 20.00 $ (0.119) $ 1.200 $ 1.081 $ (0.231) $ -- (0.231) $ --
- -------------------------------
GROWTH & INCOME ALLOCATION FUND
- -------------------------------
FIDUCIARY SHARES
2007 (1) $ 23.75 $ 0.035 $ 1.130 $ 1.165 $ (0.407) $(0.278) $ (0.685) $ --
CLASS A SHARES
2007 $ 22.26 $ 0.412 $ 2.258 $ 2.670 $ (0.502) $(0.278) $ (0.780) $ --
2006 21.61 0.259 0.688 0.947 (0.240) (0.057) (0.297) --
2005 (2) 20.00 0.193 1.570 1.763 (0.153) -- (0.153) --
CLASS C SHARES
2007 $ 22.18 $ 0.226 $ 2.261 $ 2.487 $ (0.359) $(0.278) $ (0.637) $ --
2006 21.55 0.103 0.688 0.791 (0.104) (0.057) (0.161) --
2005 (2) 20.00 0.052 1.587 1.639 (0.089) -- (0.089) --
- ---------------------------
INCOME PLUS ALLOCATION FUND
- ---------------------------
FIDUCIARY SHARES
2007 (1) $ 21.86 $ 0.409 $ 0.348 $ 0.757 $ (0.482) $(0.285) $ (0.767) $ --
CLASS A SHARES
2007 $ 20.95 $ 0.544 $ 1.199 $ 1.743 $ (0.548) $(0.285) $ (0.833) $ --
2006 20.73 0.434 0.205 0.639 (0.407) (0.012) (0.419) --
2005 (2) 20.00 0.320 0.617 0.937 (0.207) -- (0.207) --
CLASS C SHARES
2007 $ 20.85 $ 0.387 $ 1.193 $ 1.580 $ (0.415) $(0.285) $ (0.700) $ --
2006 20.66 0.308 0.183 0.491 (0.289) (0.012) (0.301) --
2005 (2) 20.00 0.230 0.591 0.821 (0.161) -- (0.161) --
RATIO
OF EXPENSES
TO AVERAGE RATIO OF
NET NET NET ASSETS NET
ASSET ASSETS, RATIO EXCLUDING INVESTMENT
VALUE, END OF EXPENSES FEE WAIVERS INCOME (LOSS) PORTFOLIO
END TOTAL OF PERIOD TO AVERAGE AND REDUCTION TO AVERAGE TURNOVER
OF PERIOD RETURN** (000) NET ASSETS# OF EXPENSES# NET ASSETS RATE
- ----------------------------------------------------------------------------------------------------------------
- ------------------------------
CAPITAL GROWTH ALLOCATION FUND
- ------------------------------
FIDUCIARY SHARES
2007 (1) $ 25.72 5.50% $ 770 0.31%* 0.70%* 0.75%* 16%
CLASS A SHARES
2007 $ 25.72 14.19% $ 49,073 0.57% 0.93% 1.03% 16%
2006 23.17 5.33 30,900 0.82 1.45 0.49 12
2005 (2) 22.16 11.21 8,957 0.82* 1.99* 0.48* 55++
CLASS C SHARES
2007 $ 25.42 13.39% $ 30,144 1.27% 1.43% 0.28% 16%
2006 22.97 4.56 16,718 1.53 1.95 (0.25) 12
2005 (2) 22.07 10.58 4,574 1.56* 2.44* (0.41)* 55++
- -----------------------------------
DIVERSIFIED EQUITY ALLOCATION FUND
- -----------------------------------
FIDUCIARY SHARES
2007 (1) $ 20.97 6.10% $ 183 0.33%* 3.37%* 1.67%* 10%
CLASS A SHARES
2007 (1) $ 20.94 5.93% $ 4,871 0.57%* 2.70%* 0.28%* 10%
CLASS C SHARES
2007 (1) $ 20.85 5.45% $ 1,986 1.29%* 2.93%* (0.81)%* 10%
- -------------------------------
GROWTH & INCOME ALLOCATION FUND
- -------------------------------
FIDUCIARY SHARES
2007 (1) $ 24.23 4.98% $ 1 0.31%* 0.67%* 0.21%* 13%
CLASS A SHARES
2007 $ 24.15 12.10% $ 47,572 0.55% 0.93% 1.72% 13%
2006 22.26 4.41 31,426 0.81 1.45 1.17 13
2005 (2) 21.61 8.84 10,158 0.79* 1.93* 1.15* 79++
CLASS C SHARES
2007 $ 24.03 11.29% $ 22,941 1.25% 1.43% 0.95% 13%
2006 22.18 3.68 11,752 1.52 1.96 0.47 13
2005 (2) 21.55 8.21 4,580 1.54* 2.36* 0.31* 79++
- ---------------------------
INCOME PLUS ALLOCATION FUND
- ---------------------------
FIDUCIARY SHARES
2007 (1) $ 21.85 3.52% $ 103 0.37%* 0.77%* 2.61%* 12%
CLASS A SHARES
2007 $ 21.86 8.40% $ 5,459 0.62% 0.97% 2.49% 12%
2006 20.95 3.11 3,651 0.87 1.83 2.07 26
2005 (2) 20.73 4.70 2,169 0.81* 5.30* 1.95* 94++
CLASS C SHARES
2007 $ 21.73 7.63% $ 3,775 1.32% 1.47% 1.78% 12%
2006 20.85 2.39 2,086 1.59 2.20 1.48 26
2005 (2) 20.66 4.12 517 1.56* 5.40* 1.40* 94++
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
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[HIGHMARK FUNDS LOGO OMITTED](R)
[MOUNTAIN RANGE GRAPHIC OMITTED]
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE YEARS OR PERIODS ENDED JULY 31
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS
----------------------------- ----------------------
NET
ASSET NET REALIZED TOTAL
VALUE, NET AND UNREALIZED TOTAL NET FROM
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL DIVIDENDS AND REDEMPTION
OF PERIOD INCOME+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS FEES
- -----------------------------------------------------------------------------------------------------------------------------
- ---------
BOND FUND
- ---------
FIDUCIARY SHARES
2007 $ 10.35 $ 0.505 $ 0.046 $ 0.551 $(0.501) $ -- $(0.501) $ --
2006 10.75 0.496 (0.384) 0.112 (0.512) -- (0.512) --
2005 10.79 0.483 (0.019) 0.464 (0.504) -- (0.504) --
2004 10.80 0.492 0.009 0.501 (0.511) -- (0.511) --
2003 10.68 0.566 0.124 0.690 (0.570) -- (0.570) --
CLASS A SHARES
2007 $ 10.22 $ 0.472 $ 0.044 $ 0.516 $(0.476) $ -- $(0.476) $ --
2006 10.63 0.463 (0.387) 0.076 (0.486) -- (0.486) --
2005 10.67 0.451 (0.013) 0.438 (0.478) -- (0.478) --
2004 10.68 0.459 0.015 0.474 (0.484) -- (0.484) --
2003 10.57 0.541 0.122 0.663 (0.553) -- (0.553) --
CLASS B SHARES
2007 $ 10.18 $ 0.400 $ 0.046 $ 0.446 $(0.406) $ -- $(0.406) $ --
2006 10.59 0.389 (0.383) 0.006 (0.416) -- (0.416) --
2005 10.64 0.371 (0.020) 0.351 (0.401) -- (0.401) --
2004 10.65 0.379 0.015 0.394 (0.404) -- (0.404) --
2003 10.54 0.449 0.127 0.576 (0.466) -- (0.466) --
CLASS C SHARES
2007 $ 10.17 $ 0.425 $ 0.039 $ 0.464 $(0.434) $ -- $(0.434) $ --
2006 10.57 0.423 (0.384) 0.039 (0.439) -- (0.439) --
2005 10.62 0.398 (0.018) 0.380 (0.430) -- (0.430) --
2004 (1) 10.80 0.288 (0.158) 0.130 (0.310) -- (0.310) --
- ------------------------------------------
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
- ------------------------------------------
FIDUCIARY SHARES
2007 $ 9.81 $ 0.361 $(0.047) $ 0.314 $(0.368) $ (0.036) $(0.404) $ --
2006 10.12 0.370 (0.208) 0.162 (0.372) (0.100) (0.472) --
2005 10.32 0.381 (0.099) 0.282 (0.382) (0.100) (0.482) --
2004 10.35 0.386 (0.006) 0.380 (0.390) (0.020) (0.410) --
2003 10.48 0.387 (0.119) 0.268 (0.386) (0.012) (0.398) --
CLASS A SHARES
2007 $ 9.77 $ 0.334 $(0.045) $ 0.289 $(0.343) $ (0.036) $(0.379) $ --
2006 10.08 0.344 (0.207) 0.137 (0.347) (0.100) (0.447) --
2005 10.28 0.354 (0.098) 0.256 (0.356) (0.100) (0.456) --
2004 10.31 0.358 (0.004) 0.354 (0.364) (0.020) (0.384) --
2003 10.44 0.371 (0.118) 0.253 (0.371) (0.012) (0.383) --
CLASS B SHARES
2007 $ 9.76 $ 0.266 $(0.044) $ 0.222 $(0.276) $ (0.036) $(0.312) $ --
2006 10.08 0.272 (0.214) 0.058 (0.278) (0.100) (0.378) --
2005 10.28 0.277 (0.096) 0.181 (0.281) (0.100) (0.381) --
2004 10.31 0.280 (0.004) 0.276 (0.286) (0.020) (0.306) --
2003 10.44 0.280 (0.113) 0.167 (0.285) (0.012) (0.297) --
CLASS C SHARES
2007 $ 9.75 $ 0.289 $(0.046) $ 0.243 $(0.297) $ (0.036) $(0.333) $ --
2006 10.06 0.296 (0.206) 0.090 (0.300) (0.100) (0.400) --
2005 10.27 0.302 (0.104) 0.198 (0.308) (0.100) (0.408) --
2004 (1) 10.50 0.209 (0.201) 0.008 (0.218) (0.020) (0.238) --
RATIO
OF EXPENSES
TO AVERAGE RATIO OF
NET NET NET ASSETS NET
ASSET ASSETS, RATIO EXCLUDING INVESTMENT
VALUE, END OF EXPENSES FEE WAIVERS INCOME PORTFOLIO
END TOTAL OF PERIOD TO AVERAGE AND REDUCTION TO AVERAGE TURNOVER
OF PERIOD RETURN** (000) NET ASSETS OF EXPENSES NET ASSETS RATE
- ------------------------------------------------------------------------------------------------------------
- ---------
BOND FUND
- ---------
FIDUCIARY SHARES
2007 $ 10.40 5.40% $ 352,610 0.74% 0.99% 4.81% 16%
2006 10.35 1.08 396,003 0.74 0.99 4.71 20
2005 10.75 4.35 429,614 0.75 1.04 4.44 11
2004 10.79 4.68 451,384 0.75 1.01 4.49 45
2003 10.80 6.51 505,755 0.74 0.99 5.15 58
CLASS A SHARES
2007 $ 10.26 5.11% $ 31,068 1.00% 1.24% 4.56% 16%
2006 10.22 0.75 35,511 0.99 1.24 4.45 20
2005 10.63 4.15 44,289 1.00 1.29 4.19 11
2004 10.67 4.47 47,039 1.00 1.26 4.24 45
2003 10.68 6.32 56,529 0.91 1.24 4.98 58
CLASS B SHARES
2007 $ 10.22 4.43% $ 5,577 1.68% 1.74% 3.87% 16%
2006 10.18 0.06 6,926 1.69 1.74 3.75 20
2005 10.59 3.32 8,093 1.73 1.79 3.46 11
2004 10.64 3.71 9,603 1.73 1.76 3.51 45
2003 10.65 5.49 12,157 1.72 1.74 4.14 58
CLASS C SHARES
2007 $ 10.20 4.61% $ 102 1.43% 1.49% 4.13% 16%
2006 10.17 0.39 91 1.43 1.49 4.10 20
2005 10.57 3.61 37 1.48 1.55 3.73 11
2004 (1) 10.62 1.21 13 1.53* 1.58* 3.99* 45
- ------------------------------------------
CALIFORNIA INTERMEDIATE TAX-FREE BOND FUND
- ------------------------------------------
FIDUCIARY SHARES
2007 $ 9.72 3.24% $ 89,852 0.49% 1.00% 3.67% 2%
2006 9.81 1.65 95,266 0.50 1.00 3.72 5
2005 10.12 2.74 102,059 0.50 1.07 3.69 6
2004 10.32 3.68 120,494 0.50 1.02 3.68 1
2003 10.35 2.55 139,051 0.49 1.02 3.65 3
CLASS A SHARES
2007 $ 9.68 3.00% $ 27,500 0.74% 1.25% 3.42% 2%
2006 9.77 1.40 37,472 0.75 1.25 3.47 5
2005 10.08 2.50 54,030 0.75 1.32 3.44 6
2004 10.28 3.44 62,762 0.75 1.27 3.43 1
2003 10.31 2.41 91,632 0.64 1.27 3.51 3
CLASS B SHARES
2007 $ 9.67 2.29% $ 4,326 1.44% 1.75% 2.72% 2%
2006 9.76 0.60 5,345 1.46 1.75 2.75 5
2005 10.08 1.75 6,357 1.50 1.81 2.69 6
2004 10.28 2.67 7,448 1.50 1.77 2.68 1
2003 10.31 1.58 9,652 1.49 1.77 2.65 3
CLASS C SHARES
2007 $ 9.66 2.52% $ 259 1.19% 1.50% 2.96% 2%
2006 9.75 0.93 540 1.22 1.50 3.00 5
2005 10.06 1.92 928 1.25 1.57 2.95 6
2004 (1) 10.27 0.07 548 1.25* 1.53* 3.00* 1
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* ANNUALIZED.
** TOTAL RETURN DOES NOT REFLECT ANY APPLICABLE SALES CHARGE. TOTAL RETURN IS
FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
+ PER SHARE AMOUNTS CALCULATED USING AVERAGE SHARES METHOD.
++ AMOUNT REPRESENTS LESS THAN $1,000.
(1) COMMENCED OPERATIONS ON NOVEMBER 28, 2003.
(2) COMMENCED OPERATIONS ON OCTOBER 18, 2002.
(3) COMMENCED OPERATIONS ON NOVEMBER 2, 2004.
(4) COMMENCED OPERATIONS ON NOVEMBER 29, 2004.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
126 1.800.433.6884
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DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS
----------------------------- ----------------------
NET
ASSET NET REALIZED TOTAL
VALUE, NET AND UNREALIZED TOTAL NET FROM
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL DIVIDENDS AND REDEMPTION
OF PERIOD INCOME+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS FEES
- -----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------
NATIONAL INTERMEDIATE TAX-FREE BOND FUND
- ----------------------------------------
FIDUCIARY SHARES
2007 $ 10.92 $ 0.433 $ (0.033) $ 0.400 $ (0.441) $ (0.039) $ (0.480) $ --
2006 11.25 0.442 (0.231) 0.211 (0.451) (0.090) (0.541) --
2005 11.52 0.459 (0.182) 0.277 (0.459) (0.088) (0.547) --
2004 11.61 0.474 (0.106) 0.368 (0.457) (0.001) (0.458) --
2003 (2) 11.56 0.357 0.040 0.397 (0.347) -- (0.347) --
CLASS A SHARES
2007 $ 10.92 $ 0.405 $ (0.042) $ 0.363 $ (0.414) $ (0.039) $ (0.453) $ --
2006 11.25 0.414 (0.230) 0.184 (0.424) (0.090) (0.514) --
2005 11.52 0.431 (0.182) 0.249 (0.431) (0.088) (0.519) --
2004 11.61 0.444 (0.104) 0.340 (0.429) (0.001) (0.430) --
2003 (2) 11.56 0.334 0.037 0.371 (0.321) -- (0.321) --
CLASS C SHARES
2007 $ 11.12 $ 0.360 $ (0.045) $ 0.315 $ (0.346) $ (0.039) $ (0.385) $ --
2006 11.44 0.368 (0.230) 0.138 (0.368) (0.090) (0.458) --
2005 11.54 0.381 (0.018) 0.363 (0.375) (0.088) (0.463) --
2004 (1) 11.78 0.343 (0.315) 0.028 (0.267) (0.001) (0.268) --
- --------------------
SHORT TERM BOND FUND
- --------------------
FIDUCIARY SHARES
2007 $ 9.76 $ 0.406 $ 0.055 $ 0.461 $ (0.401) $ -- $ (0.401) $ --
2006 9.84 0.346 (0.085) 0.261 (0.341) -- (0.341) --
2005 (3) 10.00 0.209 (0.176) 0.033 (0.193) -- (0.193) --
CLASS A SHARES
2007 $ 9.76 $ 0.365 $ 0.061 $ 0.426 $ (0.376) $ -- $ (0.376) $ --
2006 9.84 0.319 (0.082) 0.237 (0.317) -- (0.317) --
2005 (3) 10.00 0.214 (0.198) 0.016 (0.176) -- (0.176) --
CLASS C SHARES
2007 $ 9.84 $ 0.334 $ 0.066 $ 0.400 $ (0.330) $ -- $ (0.330) $ --
2006 9.92 0.277 (0.084) 0.193 (0.273) -- (0.273) --
2005 (4) 9.95 0.163 (0.093) 0.070 (0.100) -- (0.100) --
RATIO
OF EXPENSES
TO AVERAGE RATIO OF
NET NET NET ASSETS NET
ASSET ASSETS, RATIO EXCLUDING INVESTMENT
VALUE, END OF EXPENSES FEE WAIVERS INCOME PORTFOLIO
END TOTAL OF PERIOD TO AVERAGE AND REDUCTION TO AVERAGE TURNOVER
OF PERIOD RETURN** (000) NET ASSETS OF EXPENSES NET ASSETS RATE
- ------------------------------------------------------------------------------------------------------------
- ----------------------------------------
NATIONAL INTERMEDIATE TAX-FREE BOND FUND
- ----------------------------------------
FIDUCIARY SHARES
2007 $ 10.84 3.72% $ 67,896 0.28% 1.01% 3.95% 4%
2006 10.92 1.94 75,401 0.28 1.00 4.00 7
2005 11.25 2.42 90,137 0.28 1.07 4.01 14
2004 11.52 3.18 97,721 0.28 1.02 4.04 2
2003 (2) 11.61 3.42 72,718 0.28* 1.01* 3.85* 4
CLASS A SHARES
2007 $ 10.83 3.37% $ 3,159 0.53% 1.25% 3.70% 4%
2006 10.92 1.69 2,923 0.53 1.25 3.74 7
2005 11.25 2.17 3,719 0.53 1.32 3.76 14
2004 11.52 2.93 4,698 0.53 1.27 3.79 2
2003 (2) 11.61 3.20 2,674 0.53* 1.26* 3.59* 4
CLASS C SHARES
2007 $ 11.05 2.86% $ 6 0.97% 1.55% 3.22% 4%
2006 11.12 1.24 25 1.00 1.51 3.27 7
2005 11.44 3.15 50 1.03 1.59 3.30 14
2004 (1) 11.54 0.23 --++ 0.67* 0.67* 4.30* 2
- --------------------
SHORT TERM BOND FUND
- --------------------
FIDUCIARY SHARES
2007 $ 9.82 4.81% $ 54,638 0.65% 0.92% 4.13% 33%
2006 9.76 2.71 36,497 0.65 0.92 3.54 27
2005 (3) 9.84 0.34 24,545 0.65* 1.11* 2.86* 9
CLASS A SHARES
2007 $ 9.81 4.43% $ 153 0.91% 1.16% 3.72% 33%
2006 9.76 2.46 1,113 0.90 1.21 3.26 27
2005 (3) 9.84 0.17 1,439 0.91* 1.39* 2.93* 9
CLASS C SHARES
2007 $ 9.91 4.12% $ 1,608 1.36% 1.42% 3.37% 33%
2006 9.84 1.98 2,509 1.37 1.47 2.80 27
2005 (4) 9.92 0.61 15 1.38* 1.57* 2.43* 9
The accompanying notes are an integral part of the financial statements.
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FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE YEARS OR PERIODS ENDED JULY 31
DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS
--------------------------- --------------------
NET
ASSET NET REALIZED TOTAL
VALUE, NET AND UNREALIZED TOTAL NET FROM
BEGINNING INVESTMENT GAIN ON FROM INVESTMENT CAPITAL DIVIDENDS AND REDEMPTION
OF PERIOD INCOME+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS FEES
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------
CALIFORNIA TAX-FREE MONEY MARKET FUND
- -------------------------------------
FIDUCIARY SHARES
2007 $ 1.00 $ 0.031 $ -- $ 0.031 $ (0.031) $ -- $(0.031) $ --
2006 1.00 0.025 -- 0.025 (0.025) -- (0.025) --
2005 1.00 0.014 -- 0.014 (0.014) -- (0.014) --
2004 1.00 0.006 -- 0.006 (0.006) -- (0.006) --
2003 1.00 0.008 -- 0.008 (0.008) -- (0.008) --
CLASS A SHARES
2007 $ 1.00 $ 0.028 $ -- $ 0.028 $ (0.028) $ -- $(0.028) $ --
2006 1.00 0.023 -- 0.023 (0.023) -- (0.023) --
2005 1.00 0.012 -- 0.012 (0.012) -- (0.012) --
2004 1.00 0.003 -- 0.003 (0.003) -- (0.003) --
2003 1.00 0.006 -- 0.006 (0.006) -- (0.006) --
CLASS S SHARES
2007 $ 1.00 $ 0.026 $ -- $ 0.026 $ (0.026) $ -- $(0.026) $ --
2006 1.00 0.020 -- 0.020 (0.020) -- (0.020) --
2005 1.00 0.009 -- 0.009 (0.009) -- (0.009) --
2004 1.00 0.001 -- 0.001 (0.001) -- (0.001) --
2003 1.00 0.003 -- 0.003 (0.003) -- (0.003) --
- -----------------------------
DIVERSIFIED MONEY MARKET FUND
- -----------------------------
FIDUCIARY SHARES
2007 $ 1.00 $ 0.049 $ -- $ 0.049 $ (0.049) $ -- $(0.049) $ --
2006 1.00 0.039 -- 0.039 (0.039) -- (0.039) --
2005 1.00 0.019 -- 0.019 (0.019) -- (0.019) --
2004 1.00 0.006 -- 0.006 (0.006) -- (0.006) --
2003 1.00 0.010 -- 0.010 (0.010) -- (0.010) --
CLASS A SHARES
2007 $ 1.00 $ 0.046 $ -- $ 0.046 $ (0.046) $ -- $(0.046) $ --
2006 1.00 0.037 -- 0.037 (0.037) -- (0.037) --
2005 1.00 0.017 -- 0.017 (0.017) -- (0.017) --
2004 1.00 0.004 -- 0.004 (0.004) -- (0.004) --
2003 1.00 0.007 -- 0.007 (0.007) -- (0.007) --
CLASS S SHARES
2007 $ 1.00 $ 0.044 $ -- $ 0.044 $ (0.044) $ -- $(0.044) $ --
2006 1.00 0.033 0.001 0.034 (0.034) -- (0.034) --
2005 1.00 0.014 -- 0.014 (0.014) -- (0.014) --
2004 1.00 0.001 -- 0.001 (0.001) -- (0.001) --
2003 1.00 0.004 -- 0.004 (0.004) -- (0.004) --
RATIO
OF EXPENSES
TO AVERAGE RATIO OF
NET NET NET ASSETS NET
ASSET ASSETS, RATIO EXCLUDING INVESTMENT
VALUE, END OF EXPENSES FEE WAIVERS INCOME
END TOTAL OF PERIOD TO AVERAGE AND REDUCTION TO AVERAGE
OF PERIOD RETURN** (000) NET ASSETS OF EXPENSES NET ASSETS
- -----------------------------------------------------------------------------------------------------
- -------------------------------------
CALIFORNIA TAX-FREE MONEY MARKET FUND
- -------------------------------------
FIDUCIARY SHARES
2007 $ 1.00 3.13% $ 226,583 0.48% 0.79% 3.08%
2006 1.00 2.57 176,711 0.48 0.79 2.53
2005 1.00 1.46 188,716 0.45 0.82 1.44
2004 1.00 0.58 205,576 0.42 0.81 0.57
2003 1.00 0.81 253,367 0.42 0.79 0.80
CLASS A SHARES
2007 $ 1.00 2.87% $ 329,718 0.72% 1.04% 2.83%
2006 1.00 2.32 278,442 0.73 1.03 2.30
2005 1.00 1.21 268,133 0.70 1.07 1.19
2004 1.00 0.33 274,403 0.67 1.06 0.32
2003 1.00 0.56 271,089 0.67 1.04 0.55
CLASS S SHARES
2007 $ 1.00 2.61% $ 56,721 0.98% 1.09% 2.60%
2006 1.00 2.05 40,753 0.99 1.09 2.03
2005 1.00 0.90 37,543 1.00 1.12 0.92
2004 1.00 0.07 33,091 0.92 1.11 0.07
2003 1.00 0.29 43,870 0.94 1.09 0.29
- -----------------------------
DIVERSIFIED MONEY MARKET FUND
- -----------------------------
FIDUCIARY SHARES
2007 $ 1.00 4.98% $1,764,559 0.52% 0.78% 4.87%
2006 1.00 4.02 1,923,511 0.52 0.79 3.93
2005 1.00 1.94 2,118,149 0.53 0.81 1.91
2004 1.00 0.64 2,039,495 0.52 0.81 0.63
2003 1.00 1.00 1,880,002 0.53 0.80 1.01
CLASS A SHARES
2007 $ 1.00 4.72% $ 792,969 0.78% 1.03% 4.62%
2006 1.00 3.76 724,910 0.77 1.04 3.74
2005 1.00 1.69 556,443 0.78 1.06 1.67
2004 1.00 0.39 543,320 0.77 1.06 0.38
2003 1.00 0.75 634,443 0.78 1.05 0.76
CLASS S SHARES
2007 $ 1.00 4.47% $ 372,409 1.03% 1.08% 4.37%
2006 1.00 3.49 464,413 1.05 1.10 3.29
2005 1.00 1.39 645,362 1.08 1.11 1.37
2004 1.00 0.09 750,722 1.07 1.11 0.08
2003 1.00 0.45 985,564 1.08 1.10 0.47
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
* ANNUALIZED.
** TOTAL RETURN IS FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
+ PER SHARE AMOUNTS CALCULATED USING AVERAGE SHARES METHOD.
(1) COMMENCED OPERATIONS ON DECEMBER 1, 2005.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
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DIVIDENDS AND
INVESTMENT ACTIVITIES DISTRIBUTIONS
--------------------------- --------------------
NET
ASSET NET REALIZED TOTAL
VALUE, NET AND UNREALIZED TOTAL NET FROM
BEGINNING INVESTMENT GAIN (LOSS) ON FROM INVESTMENT CAPITAL DIVIDENDS AND REDEMPTION
OF PERIOD INCOME+ INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS FEES
- -------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------
U.S. GOVERNMENT MONEY MARKET FUND
- ---------------------------------
FIDUCIARY SHARES
2007 $ 1.00 $ 0.048 $ -- $ 0.048 $ (0.048) $ -- $ (0.048) $ --
2006 1.00 0.039 -- 0.039 (0.039) -- (0.039) --
2005 1.00 0.018 -- 0.018 (0.018) -- (0.018) --
2004 1.00 0.006 -- 0.006 (0.006) -- (0.006) --
2003 1.00 0.009 -- 0.009 (0.009) -- (0.009) --
CLASS A SHARES
2007 $ 1.00 $ 0.045 $ -- $ 0.045 $ (0.045) $ -- $ (0.045) $ --
2006 1.00 0.036 -- 0.036 (0.036) -- (0.036) --
2005 1.00 0.015 0.001 0.016 (0.016) -- (0.016) --
2004 1.00 0.003 -- 0.003 (0.003) -- (0.003) --
2003 1.00 0.007 -- 0.007 (0.007) -- (0.007) --
CLASS B SHARES
2007 $ 1.00 $ 0.038 $ -- $ 0.038 $ (0.038) $ -- $ (0.038) $ --
2006 1.00 0.028 0.001 0.029 (0.029) -- (0.029) --
2005 1.00 0.008 0.001 0.009 (0.009) -- (0.009) --
2004 1.00 0.001 -- 0.001 (0.001) -- (0.001) --
2003 1.00 0.001 -- 0.001 (0.001) -- (0.001) --
CLASS C SHARES
2007 $ 1.00 $ 0.041 $ -- $ 0.041 $ (0.041) $ -- $ (0.041) $ --
2006 (1) 1.00 0.025 (0.001) 0.024 (0.024) -- (0.024) --
CLASS S SHARES
2007 $ 1.00 $ 0.043 $ -- $ 0.043 $ (0.043) $ -- $ (0.043) $ --
2006 1.00 0.034 (0.001) 0.033 (0.033) -- (0.033) --
2005 1.00 0.014 (0.001) 0.013 (0.013) -- (0.013) --
2004 1.00 0.001 -- 0.001 (0.001) -- (0.001) --
2003 1.00 0.004 -- 0.004 (0.004) -- (0.004) --
- ------------------------------------
100% U.S. TREASURY MONEY MARKET FUND
- ------------------------------------
FIDUCIARY SHARES
2007 $ 1.00 $ 0.045 $ -- $ 0.045 $ (0.045) $ -- $ (0.045) $ --
2006 1.00 0.035 -- 0.035 (0.035) -- (0.035) --
2005 1.00 0.016 -- 0.016 (0.016) -- (0.016) --
2004 1.00 0.005 -- 0.005 (0.005) -- (0.005) --
2003 1.00 0.009 -- 0.009 (0.009) -- (0.009) --
CLASS A SHARES
2007 $ 1.00 $ 0.042 $ -- $ 0.042 $ (0.042) $ -- $ (0.042) $ --
2006 1.00 0.032 0.001 0.033 (0.033) -- (0.033) --
2005 1.00 0.014 -- 0.014 (0.014) -- (0.014) --
2004 1.00 0.002 -- 0.002 (0.002) -- (0.002) --
2003 1.00 0.006 -- 0.006 (0.006) -- (0.006) --
CLASS S SHARES
2007 $ 1.00 $ 0.040 $ -- $ 0.040 $ (0.040) $ -- $ (0.040) $ --
2006 1.00 0.030 -- 0.030 (0.030) -- (0.030) --
2005 1.00 0.011 -- 0.011 (0.011) -- (0.011) --
2004 1.00 0.001 -- 0.001 (0.001) -- (0.001) --
2003 1.00 0.004 -- 0.004 (0.004) -- (0.004) --
RATIO
OF EXPENSES
TO AVERAGE RATIO OF
NET NET NET ASSETS NET
ASSET ASSETS, RATIO EXCLUDING INVESTMENT
VALUE, END OF EXPENSES FEE WAIVERS INCOME
END TOTAL OF PERIOD TO AVERAGE AND REDUCTION TO AVERAGE
OF PERIOD RETURN** (000) NET ASSETS OF EXPENSES NET ASSETS
- -----------------------------------------------------------------------------------------------------
- ---------------------------------
U.S. GOVERNMENT MONEY MARKET FUND
- ---------------------------------
FIDUCIARY SHARES
2007 $ 1.00 4.90% $ 456,802 0.53% 0.79% 4.80%
2006 1.00 3.93 506,572 0.53 0.79 3.88
2005 1.00 1.86 437,804 0.53 0.82 1.83
2004 1.00 0.57 386,661 0.53 0.82 0.57
2003 1.00 0.92 570,998 0.53 0.80 0.91
CLASS A SHARES
2007 $ 1.00 4.64% $ 33,560 0.78% 1.04% 4.55%
2006 1.00 3.67 32,754 0.78 1.04 3.61
2005 1.00 1.61 33,440 0.78 1.07 1.55
2004 1.00 0.32 42,134 0.78 1.07 0.32
2003 1.00 0.67 34,513 0.78 1.05 0.68
CLASS B SHARES
2007 $ 1.00 3.91% $ 432 1.48% 1.54% 3.85%
2006 1.00 2.93 780 1.50 1.54 2.83
2005 1.00 0.87 1,178 1.51 1.57 0.79
2004 1.00 0.05 1,684 1.05 1.57 0.05
2003 1.00 0.12 2,255 1.32 1.55 0.11
CLASS C SHARES
2007 $ 1.00 4.16% $ 29 1.23% 1.29% 4.09%
2006 (1) 1.00 2.40 61 1.23* 1.29* 3.80*
CLASS S SHARES
2007 $ 1.00 4.38% $ 128,681 1.03% 1.09% 4.30%
2006 1.00 3.40 93,026 1.04 1.09 3.41
2005 1.00 1.31 58,602 1.08 1.12 1.38
2004 1.00 0.06 32,923 1.04 1.12 0.06
2003 1.00 0.38 61,240 1.07 1.10 0.42
- ------------------------------------
100% U.S. TREASURY MONEY MARKET FUND
- ------------------------------------
FIDUCIARY SHARES
2007 $ 1.00 4.56% $ 334,211 0.53% 0.78% 4.47%
2006 1.00 3.58 391,906 0.52 0.78 3.54
2005 1.00 1.65 406,281 0.53 0.82 1.60
2004 1.00 0.50 415,385 0.52 0.81 0.47
2003 1.00 0.89 528,462 0.53 0.80 0.88
CLASS A SHARES
2007 $ 1.00 4.30% $ 151,880 0.78% 1.03% 4.22%
2006 1.00 3.32 177,512 0.78 1.04 3.20
2005 1.00 1.40 201,034 0.78 1.07 1.39
2004 1.00 0.25 164,225 0.77 1.06 0.22
2003 1.00 0.64 186,891 0.78 1.05 0.65
CLASS S SHARES
2007 $ 1.00 4.04% $ 228,905 1.03% 1.08% 3.97%
2006 1.00 3.04 231,826 1.04 1.09 3.01
2005 1.00 1.09 259,991 1.08 1.12 1.09
2004 1.00 0.08 265,195 0.94 1.11 0.05
2003 1.00 0.36 383,537 1.06 1.10 0.40
The accompanying notes are an integral part of the financial statements.
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NOTES TO FINANCIAL STATEMENTS
JULY 31, 2007
1. ORGANIZATION
HighMark(R) Funds ("HighMark") was organized as a Massachusetts business trust
under a Declaration of Trust dated March 10, 1987.
HighMark is registered under the Investment Company Act of 1940 (the "1940
Act"), as amended, as an open-end investment company with twenty-two funds:
Balanced Fund, Cognitive Value Fund, Core Equity Fund, Enhanced Growth Fund,
International Opportunities Fund, Large Cap Growth Fund, Large Cap Value Fund,
Small Cap Advantage Fund, Small Cap Value Fund, Value Momentum Fund, Bond Fund,
California Intermediate Tax-Free Bond Fund, National Intermediate Tax-Free Bond
Fund and Short Term Bond Fund (collectively the "Non-Money Market Funds"),
Capital Growth Allocation Fund, Diversified Equity Allocation Fund, Growth &
Income Allocation Fund and Income Plus Allocation Fund (collectively the "Asset
Allocation Funds"), California Tax-Free Money Market Fund, Diversified Money
Market Fund, U.S. Government Money Market Fund and 100% U.S. Treasury Money
Market Fund (collectively the "Money Market Funds") the Non-Money Market Funds,
the Asset Allocation Funds and the Money Market Funds are collectively the
"Funds" and each is a "Fund". Pursuant to HighMark's multiple class plan, the
Funds may offer up to six classes of shares, Class A, Class B and Class C shares
(collectively called the "Retail Shares"), Fiduciary Shares, Class S Shares and
Class M Shares. The Funds' prospectuses provide a description of each Fund's
investment objectives, policies and strategies.
On January 31, 2004, the Class B Shares of the Funds were closed to purchases by
new and existing investors. Existing investors, however, may still exchange
shares and reinvest distributions in Class B Shares of the Funds.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Funds.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS -- The preparation
of financial statements in accordance with accounting principles generally
accepted in the United States of America requires management to make estimates
and assumptions which affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could differ from those
estimates and assumptions.
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 is used. Where
available, debt securities are priced based upon valuations provided by
independent, third-party pricing agents. These third-party pricing agents may
employ methodologies that utilize actual market transactions, broker-dealer
supplied valuations, or other electronic data processing techniques. Such
techniques generally consider such factors as security prices, yields,
maturities, call features, ratings and developments relating to specific
securities in arriving at valuations. Debt obligations with remaining maturities
of sixty days or less may be valued at their amortized cost, which approximates
market value. Prices for most securities held in the Funds are obtained daily
from 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.
Options for which the primary market is a national securities exchange are
valued at the last sale price on the exchange on which they are traded, or, in
the absence of any sale, at the closing bid price for long option positions and
the closing ask price for short option positions. Options not traded on a
national securities exchange are valued at the last quoted bid price for long
option positions and the closing ask price for short option positions.
Investments in registered investment companies are priced at the fund's daily
net asset value. The assets of each of the Asset Allocation Funds consist
primarily of the investments in underlying affiliated registered investment
companies, which are valued at their respective daily net asset values in
accordance with the above, Board-approved, pricing procedures.
Securities for which market prices are not readily available are valued in
accordance with the Funds' Fair Value Procedures established by HighMark's Board
of Trustees (the "Board"). The Funds' Fair Value Procedures are implemented
through a Fair Value Committee (the "Committee") designated by the Board. 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 has not been traded for a
significant amount of time; 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.
- --------------------------------------------------------------------------------
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For securities held by the International Opportunities Fund that principally
trade on a foreign market or exchange, a significant gap in time can exist
between the time of a particular security's last trade and the time at which the
Fund calculates its net asset value. The closing prices of securities may no
longer reflect their market value at the time the Fund calculates its net asset
value if an event that could materially affect the value of those securities (a
"Significant Event") has occurred between the time of the security's last close
and the time that the Fund calculates its net asset value. A Significant Event
may relate to a single issuer or to an entire market sector. If HighMark Capital
Management, Inc. (the "Adviser" or the "Administrator"), a wholly owned
subsidiary of Union Bank of California, N.A. (a wholly owned subsidiary of
UnionBanCal Corporation), or the sub-adviser of a Fund becomes aware of a
Significant Event that has occurred with respect to a security or group of
securities after the closing of the exchange or market on which the security or
securities principally trade, but before the time at which the Fund calculates
its net asset value, it shall request that a Committee meeting be called. In
addition, SEI Investments Global Funds Services (the "Sub-Administrator")
monitors price movements among certain selected indices, securities and/or
baskets of securities that may be an indicator that the closing prices received
earlier from markets may not reflect the market value at the time the Fund
calculates its net asset value. If price movements in a monitored index or
security exceed levels established by the Sub-Administrator and approved by the
Board, the Sub-Administrator notifies the Adviser or sub-adviser for any Fund
holding the relevant securities that such limits have been exceeded. In such
event, the Adviser or sub-adviser makes the determination whether a Committee
meeting should be called based on the information provided.
The International Opportunities Fund also uses a third-party fair valuation
vendor. The vendor provides a fair value for foreign securities held by the Fund
based on certain factors and methodologies (involving, generally, tracking
valuation correlations between the U.S. market and each non-U.S. security).
Values from the fair value vendor are applied in the event that there is a
movement in the U.S. market that exceeds a specific threshold that has been
established by the Committee. The Committee has also established a "confidence
interval" which is used to determine the level of historical correlation between
the value of a specific foreign security and movements in the U.S. market. In
the event that the threshold established by the Committee is exceeded on a
specific day, the Fund will value the non-U.S. securities in its portfolio that
exceed the applicable "confidence interval" based upon the adjusted prices
provided by the fair valuation vendor.
Investment securities held by the Money Market Funds are stated at amortized
cost, which approximates market value. Under this valuation method, purchase
discounts and premiums are accreted and amortized ratably to maturity and are
included in interest income.
FOREIGN CURRENCY TRANSLATION -- The books and records of the International
Opportunities Fund are maintained in U.S. dollars on the following basis:
(I) market value of investment securities, assets and liabilities at the
current rate of exchange; and
(II) purchases and sales of investment securities, income and expenses at the
relevant rates of exchange prevailing on the respective dates of such
transactions.
The Fund does not isolate the portion of gains and losses on investments in
equity securities that is due to changes in the foreign exchange rates from that
which is due to changes in market prices of equity securities. The Fund reports
certain foreign currency related transactions as components of realized gains
for financial reporting purposes, whereas such components are treated as
ordinary income for Federal income tax purposes.
FORWARD FOREIGN CURRENCY CONTRACTS -- The International Opportunities Fund may
enter into spot and forward foreign currency contracts as hedges against either
specific transactions, fund positions or anticipated fund positions. All
commitments are "marked-to-market" daily using the applicable foreign exchange
rate, and any resulting unrealized gains or losses are recorded. The
International Opportunities Fund realizes gains and losses at the time the spot
or forward contracts are extinguished. Unrealized gains or losses on outstanding
positions in spot and forward foreign currency contracts held at the close of
the period are recognized as ordinary income or loss for Federal income tax
purposes. The International Opportunities Fund could be exposed to risk if the
counterparties to the contracts are unable to meet the terms of the contract and
from unanticipated movements in the value of a foreign currency relative to the
U.S. dollar. Also, the risk exists that losses could exceed amounts disclosed on
the statement of assets and liabilities. As of July 31, 2007, the International
Opportunities Fund did not have any forward foreign currency contracts
outstanding.
SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are
accounted for on the date the security is purchased or sold (trade date). Costs
used in determining realized gains and losses on the sale of investment
securities are those of the specific securities sold adjusted for the accretion
and amortization of purchase discounts and premiums, if any, during the
respective holding periods. Interest income is recorded on the accrual basis;
dividend income is recorded on the ex-dividend date.
REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase
agreements are held by the custodian bank until
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2007
the respective agreements mature. Provisions of repurchase agreements and
procedures adopted by the Adviser, are designed to ensure that the market value
of the collateral is sufficient in the event of default by the counterparty. If
the counterparty defaults and the value of the collateral declines or if the
counterparty enters an insolvency proceeding, realization of the collateral by a
Fund may be delayed or limited.
OPTIONS TRANSACTIONS -- In order to produce incremental earnings and protect
gains or minimize losses, certain Funds, as described in their prospectuses, may
participate in options transactions including writing covered call options. A
risk in writing a covered call option is that a Fund gives up the opportunity of
profit if the market price of the underlying security increases. Also, certain
Funds may purchase call or put options with respect to securities that are
permitted investments, as described in the Funds' prospectuses. The risk in
purchasing options is limited to the premium paid. Counterparty risk is the risk
to the option buyer that the writer will not buy or sell the underlying as
agreed.
A Fund realizes a gain or loss upon the expiration of a written call or
purchased call or put option, respectively. When a written call option is closed
prior to expiration by being exercised, the proceeds on the sale are increased
by the amount of original premium received.
When a purchased call or put option is closed prior to expiration by being
exercised, the cost of investments purchased or sold, respectively, is increased
by the amount of original premium paid.
A Fund records unrealized depreciation when the underlying security's market
price rises (in case of a written call) and unrealized appreciation/depreciation
when the underlying security's market price changes (in case of a purchased call
or put) to the extent sufficient to cover the option premium and transaction
costs (see Note 8).
FUTURES CONTRACTS - The Core Equity Fund and the Small Cap Advantage Fund
utilized futures contracts during the year ended July 31, 2007. The Funds'
investments in futures contracts are designed to enable the Funds' to more
closely approximate the performance of their benchmark indices or are designed
for tactical hedging purposes. Initial margin deposits of cash or securities are
made upon entering into futures contracts. The contracts are marked to market
daily and the resulting changes in value are accounted for as unrealized gains
and losses. Variation margin payments are paid or received, depending upon
whether unrealized losses or gains are incurred. When the contract is closed,
the Fund records a realized gain or loss equal to the difference between the
proceeds from (or cost of) the closing transaction and the amount invested in
the contract.
Risks of entering into futures contracts include the possibility that there will
be a decrease in the price of the underlying securities. Second, it is possible
that a lack of liquidity for futures contracts could exist in the secondary
market, resulting in an inability to close a position prior to its maturity
date. Third, the futures contract involves the risk that the Fund could lose
more than the original margin deposit required to initiate a futures
transaction. Additionally, the risk exists that losses could exceed amounts
disclosed on the statement of assets and liabilities.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS -- Delivery and payment for
securities that have been purchased by a Fund on a when-issued or forward
commitment basis can take place up to a month or more after the trade date.
During the period, such securities are subject to market fluctuations and the
Fund may maintain, in a segregated account with its custodian, assets with a
market value equal to or greater than the amount of its purchase commitments.
These securities are recorded as an asset and are subject to changes in value
based upon changes in the general level of interest rates. Therefore, the
purchase of securities on a "when-issued" basis may increase the risk of
fluctuations in a Fund's net asset value.
DISCOUNTS AND PREMIUMS -- Discounts and premiums are accreted or amortized over
the life of each security and are recorded as interest income for each of the
Funds using a method that approximates the effective interest method.
CLASSES -- Class specific expenses are borne by that class. Income, non-class
specific expenses and realized/unrealized gains and losses are allocated to the
respective classes on the basis of the relative daily net assets.
ASSET ALLOCATION FUNDS -- In addition to the direct expenses borne by the
shareholders of the Asset Allocation Funds the shareholders also bear indirectly
a proportionate share of the underlying funds' expenses. Capital gain
distributions from the underlying funds are booked as realized gains.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment
income for the Money Market Funds are declared daily and paid monthly. Each of
the equity funds may declare and pay dividends from net investment income
periodically, each of the fixed income funds may declare dividends from net
investment income daily and pay monthly and the Asset Allocation Funds may
declare and pay dividends from net investment income quarterly. None of the
Funds has a targeted dividend rate and none of the Funds guarantees that it will
pay any dividends or other distributions. Any net realized capital gains, if
any, will be distributed at least annually by all Funds.
DEFERRED COMPENSATION PLAN -- Under the deferred compensation plan approved by
the Board, members of the Board who are not officers or employees of Union Bank
of California N.A. (the "Bank") or any subsidiary of the Bank (the "Trustees")
are permitted to defer a portion of their annual compensation. Deferred amounts
earn an approximate return
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132 1.800.433.6884
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as though equivalent dollar amounts had been invested in shares of Funds
selected by the Trustees, which has the same economic effect for the Trustees as
if the Trustees had invested the deferred amounts in such Funds.
The deferred compensation plan is not funded and obligations thereunder
represent general unsecured claims against the general assets of HighMark.
However, HighMark has elected to invest in shares of those Funds selected by the
Trustees in order to match the deferred compensation obligation.
REDEMPTION AND EXCHANGE FEES -- The redemption fee and the exchange fee are
designed to discourage short-term trading and any proceeds of the fees will be
recorded as an increase to paid-in capital of the applicable Fund.
CURRENT, EFFECTIVE OCTOBER 16, 2006
- --------------------------------------------------------------------------------
FIDUCIARY CLASS
-----------------------------------------
Cognitive Value 2% redemption and 30 days or less
exchange fees after purchase
International Opportunities 2% redemption and 30 days or less
exchange fees after purchase
Small Cap Advantage 2% redemption and 30 days or less
exchange fees after purchase
Small Cap Value 2% redemption and 30 days or less
exchange fees after purchase
CLASS A
-----------------------------------------
Cognitive Value 2% redemption and 30 days or less
exchange fees after purchase
International Opportunities 2% redemption and 30 days or less
exchange fees after purchase
Small Cap Advantage 2% redemption and 30 days or less
exchange fees after purchase
Small Cap Value 2% redemption and 30 days or less
exchange fees after purchase
CLASS M
-----------------------------------------
Cognitive Value 2% redemption and 30 days or less
exchange fees after purchase
International Opportunities 2% redemption and 30 days or less
exchange fees after purchase
EFFECTIVE DECEMBER 13, 2004 THROUGH OCTOBER 15, 2006
- --------------------------------------------------------------------------------
CLASS A
-----------------------------------------
Non-Money Market Funds
excluding the International 2% redemption and 5 days or less
Opportunities Fund* exchange fees after purchase
International Opportunities Fund**^ 2% redemption and 30 days or less
exchange fees after purchase
CLASS M
-----------------------------------------
Cognitive Value^ 2% redemption and 5 days or less
exchange fees after purchase
Enhanced Growth^ 2% redemption and 5 days or less
exchange fees after purchase
International Opportunities Fund**^ 2% redemption and 30 days or less
exchange fees after purchase
* Prior to December 13, 2004, the Large Cap Growth Fund imposed a 2%
redemption fee on the value of Class A Shares redeemed 30 days or less
after their purchase.
** Prior to April 3, 2006, the International Opportunities Fund imposed a 2%
redemption fee and a 2% exchange fee on shares redeemed or exchanged
within 31 days after purchase.
^ Effective April 3, 2006 through October 15, 2006.
For the year ended July 31, 2007, Core Equity Fund, International Opportunities
Fund, Large Cap Value Fund, Small Cap Advantage Fund, Small Cap Value Fund,
Capital Growth Allocation Fund and Growth & Income Allocation Fund received
redemption fees of $40, $2,695, $248, $2, $8,757, $107 and $40, respectively. A
Fund's redemption fees are allocated to all classes in that Fund based on
relative net assets.
3. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES
HighMark and the Adviser are parties to an Investment Advisory agreement. For
its services, the Adviser is entitled to receive a fee with respect to each
Fund, which is calculated daily and paid monthly, based on the daily net assets
of each Fund, at an annual rate of:
Balanced ................................... 0.60%
Cognitive Value ............................ 0.75% on the first $500 million
0.70% on assets over $500 million
Core Equity ................................ 0.60%
Enhanced Growth ............................ 0.75% on the first $500 million
0.70% on the next $500 million
0.65% on assets over $1 billion
International Opportunities ................ 0.95% on the first $250 million
0.90% on the next $250 million
0.85% on the next $500 million
0.80% on assets over $1 billion
Large Cap Growth ........................... 0.60%
Large Cap Value ............................ 0.60%
Small Cap Advantage ........................ 0.95%
Small Cap Value ............................ 1.00%
Value Momentum ............................. 0.60%
Capital Growth Allocation .................. 0.20%
Diversified Equity Allocation .............. 0.20%
Growth & Income Allocation ................. 0.20%
Income Plus Allocation ..................... 0.20%
Bond ....................................... 0.50%
California Intermediate Tax-Free Bond ...... 0.50%
National Intermediate Tax-Free Bond ........ 0.50%
Short Term Bond ............................ 0.40%
California Tax-Free Money Market ........... 0.30%
Diversified Money Market ................... 0.30%
U.S. Government Money Market ............... 0.30%
100% U.S. Treasury Money Market ............ 0.30%
The Adviser has contractually agreed to reduce its fees throughout the year
ended July 31, 2007 and for the period ending November 30, 2007 (except for
Class M Shares, for which it has agreed to reduce its fees for the period
beginning April 3, 2006 and ending on April 2, 2008), and to the extent
necessary, to reimburse the Funds, in order to limit the Funds from exceeding
certain expense limitations as follows:
FIDUCIARY CLASS A CLASS B CLASS C CLASS M CLASS S
SHARES SHARES SHARES SHARES SHARES SHARES
----------- ---------- --------- --------- --------- ---------
Balanced ................... 0.97% 1.22% n/a n/a n/a n/a
Cognitive Value ............ 1.23 1.48 n/a n/a 1.09% n/a
Core Equity ................ 0.95 1.20 n/a n/a n/a n/a
Enhanced Growth ............ 1.15 1.40 n/a n/a 1.00 n/a
International
Opportunities ............ 1.53 1.57+ n/a n/a 1.45 n/a
Large Cap Growth ........... 0.97 1.22 n/a n/a n/a n/a
Large Cap Value ............ 0.95 1.20 n/a n/a n/a n/a
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2007
FIDUCIARY CLASS A CLASS B CLASS C CLASS M CLASS S
SHARES SHARES SHARES SHARES SHARES SHARES
----------- ---------- --------- --------- --------- ---------
Small Cap Advantage ..... 1.32% 1.57% n/a n/a n/a n/a
Small Cap Value ......... 1.37 1.62 n/a n/a n/a n/a
Value Momentum .......... 0.97 1.22 n/a n/a n/a n/a
Capital Growth
Allocation ............ 1.35 1.60* n/a 2.30% n/a n/a
Diversified Equity
Allocation ............ 1.40 1.65* n/a 2.35 n/a n/a
Growth & Income
Allocation ............ 1.25 1.50* n/a 2.20 n/a n/a
Income Plus Allocation .. 1.20 1.45* n/a 2.15 n/a n/a
Bond .................... 0.77 1.02 n/a n/a n/a n/a
California Intermediate
Tax-Free Bond ......... 0.52 0.77 1.47% 1.22 n/a n/a
National Intermediate
Tax-Free Bond ......... 0.30 0.55 n/a 1.00 n/a n/a
Short Term Bond ......... 0.68 0.93 n/a n/a n/a n/a
California Tax-Free
Money Market .......... 0.55 0.80 n/a n/a n/a n/a
Diversified Money
Market ................ 0.55 0.80 n/a n/a n/a n/a
U.S. Government
Money Market .......... 0.55 0.80 n/a n/a n/a n/a
100% U.S. Treasury
Money Market .......... 0.55 0.80 n/a n/a n/a n/a
n/a -- Class is not subject to an expense limitation.
* Prior to November 7, 2006, the expense limitation for Class A Shares of
the Asset Allocation Funds was 1.23%
+ Prior to November 7, 2006, the expense limitation was 1.78%
Each Fund's total actual annual operating expense rate for the year ended July
31, 2007, was less than the amount shown for such Fund above due to additional
waivers/ reimbursements by the Administrator described below.
Effective April 3, 2006, the Adviser and Bailard, Inc. ("Bailard") entered into
an investment sub-advisory agreement relating to the Cognitive Value Fund, the
Enhanced Growth Fund and the International Opportunities Fund. Bailard is
entitled to receive a fee at the annual rate of 0.375% of the daily net assets
on the first $500 million and 0.35% on the daily net assets over $500 million of
the Cognitive Value Fund. Bailard is entitled to receive a fee at the annual
rate of 0.375% of the daily net assets on the first $500 million, 0.350% on the
daily net assets on the next $500 million and 0.325% on the daily net assets
over $1 billion of the Enhanced Growth Fund. Bailard is entitled to receive a
fee at the annual rate of 0.475% of the daily net assets on the first $250
million, 0.450% on the daily net assets on the next $250 million, 0.425% on the
daily net assets on the next $500 million and 0.400% on the daily net assets
over $1 billion of the International Opportunities Fund. Bailard's fee is paid
from the Adviser's fee.
Effective December 29, 2006, HighMark Capital Management became sole investment
adviser to the Large Cap Growth Fund. Prior to December 29, 2006, the Adviser
and Waddell & Reed Investment Management Company ("Waddell & Reed") were parties
to an investment sub-advisory agreement relating to the Large Cap Growth Fund.
Waddell & Reed was entitled to receive a fee at the annual rate of 0.30% of the
daily net assets of the Large Cap Growth Fund. Waddell & Reed's fee was paid
from the Adviser's fee.
Effective March 31, 2003, the Adviser and Aronson+Johnson +Ortiz, LP ("AJO")
entered into an investment sub-advisory agreement relating to the Large Cap
Value Fund. AJO is entitled to receive a fee at the annual rate of 0.30% of the
daily net assets of the Large Cap Value Fund. AJO's fee is paid from the
Adviser's fee.
Effective October 1, 2001, the Adviser and LSV Asset Management ("LSV") entered
into an investment sub-advisory agreement relating to the Small Cap Value Fund.
LSV is entitled to receive a fee at the annual rate of 0.65% of the daily net
assets on the first $50 million, 0.55% of the daily net assets on the next $50
million and 0.50% on the daily net assets over $100 million of the Small Cap
Value Fund. LSV's fee is paid from the Adviser's fee.
Effective December 1, 2005, the Administrator and HighMark are parties to an
Administrative Services Agreement dated December 1, 2005 (the "Agreement") under
which the Administrator provides the Funds with management and administrative
services for an annual fee of 0.15% of the first $10 billion of the daily net
assets of the Funds allocated to each Fund based on its respective net assets
and 0.145% of such daily net assets in excess of $10 billion, possibly subject
to certain minimum fees. The Administrator may voluntarily waive its fee,
subject to termination at any time by the Administrator, to the extent necessary
to limit the total operating expenses of a Fund. For the year ended July 31,
2007, the Administrator voluntarily waived such portion of its administrative
fee for all the Funds to reduce the annualized total expense ratio of each Fund
by 0.025%.
Effective December 1, 2005, pursuant to a separate agreement with the
Administrator, the Sub-Administrator performs sub-administration services on
behalf of each Fund, for which it receives a fee paid by the Administrator at
the annual rate of 0.04% of the first $10 billion of the daily net assets of the
Funds and 0.035% of such assets in excess of $10 billion. For the year ended
July 31, 2007, the Sub-Administrator earned sub-administration fees in the
amount of $3,194,019.
Effective December 1, 2005, the Administrator has agreed to absorb certain
transfer agency related and legal expenses on behalf of the Funds. The
Sub-Administrator has agreed to absorb these expenses on behalf of the
Administrator. These expenses are reflected on the statements of operations as
"Reduction of Expenses." This agreement does not apply to any new Funds or
classes of shares which commenced operations subsequent to December 1, 2005.
All transfer agency related expenses are allocated pro rata amongst all of the
Funds based on their respective net assets. Any transfer agency related expenses
in excess of the agreed upon amount are
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allocated pro rata amongst all of the Funds existing on December 1, 2005, based
on their respective net assets.
Certain officers of HighMark are also officers of the Adviser, the Adviser's
parent and the Sub-Administrator. Such officers, except for the Funds' Chief
Compliance Officer, are paid no fees by the Funds for serving as officers of
HighMark.
The independent Trustees receive quarterly retainer fees and fees and expenses
for each meeting of the Board attended which is paid by the Funds.
State Street Bank and Trust Company ("State Street") serves as the transfer
agent, dividend disbursing agent and shareholder servicing agent for the Funds.
State Street has sub-contracted such services to its affiliate, Boston Financial
Data Services.
SEI Investments Distribution Co. (the "Distributor") and HighMark are parties to
a distribution agreement dated February 15, 1997. No compensation is paid to the
Distributor for services rendered to the Fiduciary Shares under this agreement.
HighMark has adopted 12b-1 Plans (the "Plans") with respect to Class A, Class B,
Class C and Class S Shares that allow each Fund to pay distribution and service
fees to the Distributor as compensation for its services under the Plans. The
Distributor receives a distribution fee computed daily and paid monthly, at the
annual rate of 0.25% of the daily net assets attributable to each Fund's Class A
Shares, 0.75% of the daily net assets attributable to each Fund's Class B
Shares, 1.00% of the daily net assets attributable to each Fund's Class C Shares
(0.75% of the daily net assets of the Bond Fund, the California Intermediate
Tax-Free Bond Fund, the National Intermediate Tax-Free Bond Fund, the Short Term
Bond Fund and the U.S. Government Money Market Fund) and 0.55% of the daily net
assets attributable to each Fund's Class S Shares, which may be used by the
Distributor to provide compensation for sales support and distribution
activities. For the year ended July 31, 2007, the Distributor waived no
distribution fees.
HighMark has also adopted Shareholder Service Plans permitting payment of
compensation to service providers, that may include Union Bank of California,
N.A., or its affiliates, that have agreed to provide certain shareholder support
services for its customers who own Fiduciary, Class A, or Class B Shares. In
consideration for such services, a service provider is entitled to receive
compensation at the annual rate of up to 0.25% of the daily net assets of the
applicable class or classes of shares of the Funds. The service providers have
agreed to waive a portion of their fees for all Funds for the year ended July
31, 2007. For the year ended July 31, 2007, Union Bank of California, N.A. or
its affiliates earned shareholder servicing fees, net of waivers, from the Funds
in the amount of approximately $4,560,000.
The following fees are payable as of July 31, 2007:
INVESTMENT ADMINIS- SHAREHOLDER
ADVISER TRATIVE SERVICING CUSTODIAN
(000) (000) (000) (000)
---------- -------- ----------- ---------
Balanced ................... $ 20 $ 5 $ 6 $ --
Cognitive Value ............ 74 12 -- 1
Core Equity ................ 70 16 14 1
Enhanced Growth ............ 90 15 -- 1
International
Opportunities ........ 274 38 5 64
Large Cap Growth ........... 65 15 15 1
Large Cap Value ............ 174 42 48 3
Small Cap Advantage ........ 23 6 2 --
Small Cap Value ............ 245 32 35 2
Value Momentum ............. 254 54 62 4
Capital Growth
Allocation ........... -- 9 2 1
Diversified Equity
Allocation ........... -- 6 -- --
Growth & Income
Allocation ........... -- 8 2 1
Income Plus Allocation ..... -- 1 -- --
Bond ....................... 151 41 23 3
California Intermediate
Tax-Free Bond ........ 23 13 6 1
National Intermediate
Tax-Free Bond ........ -- 8 3 1
Short Term Bond ............ 15 6 1 --
California Tax-Free
Money Market ......... 103 67 24 6
Diversified Money
Market ............... 635 307 107 25
U.S. Government
Money Market ......... 134 64 21 5
100% U.S. Treasury
Money Market ......... 165 80 22 6
CHIEF
COMPLIANCE DEFERRED
TRUSTEES OFFICER COMPENSATION
(000) (000) (000)
-------- ---------- ------------
Balanced ................... $ -- $ -- $ 1
Cognitive Value ............ -- -- 3
Core Equity ................ -- 1 4
Enhanced Growth ............ -- 1 4
International
Opportunities ........ -- 1 11
Large Cap Growth ........... -- 1 4
Large Cap Value ............ -- 2 12
Small Cap Advantage ........ -- -- 1
Small Cap Value ............ -- 1 9
Value Momentum ............. 1 2 15
Capital Growth
Allocation ........... -- -- 2
Diversified Equity
Allocation ........... -- -- --
Growth & Income
Allocation ........... -- -- 2
Income Plus Allocation ..... -- -- --
Bond ....................... -- 1 12
California Intermediate
Tax-Free Bond ........ -- -- 4
National Intermediate
Tax-Free Bond ........ -- -- 2
Short Term Bond ............ -- -- 2
California Tax-Free
Money Market ......... 1 2 19
Diversified Money
Market ............... 3 11 86
U.S. Government
Money Market ......... 1 2 18
100% U.S. Treasury
Money Market ......... 1 3 22
Amounts designated as "-" are either $0 or have been rounded to $0.
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2007
A sales charge is imposed on purchases of Class A Shares at the following rates:
CLASS A
SHARES*
----------
Balanced ......................................................... 5.50%
Cognitive Value .................................................. 5.50
Core Equity ...................................................... 5.50
Enhanced Growth .................................................. 5.50
International Opportunities ...................................... 5.50
Large Cap Growth ................................................. 5.50
Large Cap Value .................................................. 5.50
Small Cap Advantage .............................................. 5.50
Small Cap Value .................................................. 5.50
Value Momentum ................................................... 5.50
Capital Growth Allocation ........................................ 5.50
Diversified Equity Allocation .................................... 5.50
Growth & Income Allocation ....................................... 5.50
Income Plus Allocation ........................................... 4.50
Bond ............................................................. 2.25
California Intermediate Tax-Free Bond ............................ 2.25
National Intermediate Tax-Free Bond .............................. 2.25
Short Term Bond .................................................. 2.25
* Maximum sales charge as a percentage of offering price. Lower sales
charges apply based on amount invested.
A contingent deferred sales charge ("CDSC") is imposed on certain redemptions of
Class B Shares. The CDSC varies depending on the number of years from the
purchase of Class B Shares until the redemption of such shares.
YEARS SINCE CONTINGENT DEFERRED
PURCHASE MADE SALES CHARGE
-------------------------------------------------
First ................... 5%
Second .................. 4%
Third ................... 3%
Fourth .................. 3%
Fifth ................... 2%
Sixth ................... 1%
Seventh and Following ... None
A CDSC of 1% is imposed when Class C Shares are redeemed within the first year
of purchase.
Union Bank of California, N.A. acts as custodian (the "Custodian") for the
Funds. The Custodian, as compensation for its services, receives a fee at the
annual rate of 0.01% of each Fund's daily net assets except for the
International Opportunities Fund which pays fees based on transactions and
assets. The Custodian plays no role in determining the investment policies of
the Funds or which securities are to be purchased or sold in the Funds.
4. INVESTMENT TRANSACTIONS
The purchases and sales (including maturities) of investment securities by the
Non-Money Market Funds, excluding short-term investments and U.S. government
securities, for the year or period ended July 31, 2007 are as follows:
INVESTMENT SECURITIES
-----------------------
PURCHASES SALES
(000) (000)
--------- -----------
Balanced .......................................... $ 7,926 $ 17,465
Cognitive Value ................................... 114,787 109,272
Core Equity ....................................... 111,986 105,761
Enhanced Growth ................................... 51,545 65,745
International Opportunities ....................... 155,233 90,371
Large Cap Growth .................................. 114,004 124,438
Large Cap Value ................................... 330,312 298,155
Small Cap Advantage ............................... 34,742 6,304
Small Cap Value ................................... 129,938 131,904
Value Momentum .................................... 92,025 148,818
Capital Growth Allocation ......................... 38,817 10,468
Diversified Equity Allocation ..................... 7,470 429
Growth & Income Allocation ........................ 31,421 7,357
Income Plus Allocation ............................ 4,064 901
Bond .............................................. 25,792 63,402
California Intermediate Tax-Free Bond ............. 2,305 17,201
National Intermediate Tax-Free Bond ............... 2,701 9,288
Short Term Bond ................................... 16,097 6,533
The purchases and sales (including maturities) of U.S. government securities by
the Non-Money Market Funds for the year ended July 31, 2007 are as follows:
U.S. GOVERNMENT SECURITIES
--------------------------
PURCHASES SALES
(000) (000)
----------- ---------
Balanced .......................................... $ 2,279 $ 1,793
Bond .............................................. 37,200 46,791
Short Term Bond.................................... 12,737 8,479
Investments made by the Asset Allocation Funds in other Funds are considered to
be investments in Affiliated Companies as defined under section 2(a)(3) of the
1940 Act. A summary of the investment and income activity in each Affiliated
Registered Investment Company's Fiduciary Shares for each Asset Allocation Fund
is as follows:
CAPITAL GROWTH ALLOCATION
- --------------------------------------------------------------------------------
INCOME
REALIZED FROM
GAINS AFFILIATED
AFFILIATED REGISTERED CONTRIBUTIONS WITHDRAWALS (LOSSES) INVESTMENTS
INVESTMENT COMPANY (000) (000) (000) (000)
- ------------------------ ------------- ----------- -------- ------------
Bond ................... $ 806 $ 390 $ (9) $ 44
Cognitive Value ........ 1,705 1,663 248 11
Core Equity ............ 6,477 247 52 154
Diversified Money
Market .............. 6,947 7,763 -- 14
International
Opportunities ....... 4,001 -- 926 157
Large Cap Growth ....... 4,616 -- (185) 8
Large Cap Value ........ 1,860 1,086 252 76
Short Term Bond ........ 3,218 764 (2) 201
Small Cap Advantage .... 6,200 -- -- --
Small Cap Growth+ ...... 600 2,667 -- 131
Small Cap Value ........ 2,252 3,105 447 40
Value Momentum ......... 5,373 546 1,019 153
--------- --------- -------- -------
TOTAL: $ 44,055 $ 18,231 $ 2,748 $ 989
========= ========= ======== =======
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136 1.800.433.6884
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DIVERSIFIED EQUITY ALLOCATION
- --------------------------------------------------------------------------------
INCOME
REALIZED FROM
GAINS AFFILIATED
AFFILIATED REGISTERED CONTRIBUTIONS WITHDRAWALS (LOSSES) INVESTMENTS
INVESTMENT COMPANY (000) (000) (000) (000)
- --------------------- ------------- ----------- -------- -----------
Cognitive Value ........ $ 245 $ 118 $ 1 $ 7
Core Equity ............ 2,029 7 -- 2
Diversified Money
Market .............. 1,020 1,020 -- --
International
Opportunities ....... 1,338 -- 19 3
Large Cap Growth ....... 760 -- -- --
Large Cap Value ........ 408 30 2 2
Small Cap Advantage .... 620 -- -- --
Small Cap Growth+ ...... -- -- -- --
Small Cap Value ........ 446 248 5 1
Value Momentum ......... 1,455 26 21 7
------- ------- ---- ----
TOTAL: $ 8,321 $ 1,449 $ 48 $ 22
======= ======= ==== ====
GROWTH & INCOME ALLOCATION
- --------------------------------------------------------------------------------
INCOME
REALIZED FROM
GAINS AFFILIATED
AFFILIATED REGISTERED CONTRIBUTIONS WITHDRAWALS (LOSSES) INVESTMENTS
INVESTMENT COMPANY (000) (000) (000) (000)
- --------------------- ------------- ----------- -------- -----------
Bond ................... $ 3,878 $ 668 $ 4 $ 327
Cognitive Value ........ 1,615 1,146 184 7
Core Equity ............ 3,623 -- -- 100
Diversified Money
Market .............. 7,678 9,603 -- 25
International
Opportunities ....... 2,658 -- 656 112
Large Cap Growth ....... 3,026 -- -- 6
Large Cap Value ........ 1,109 639 152 56
Short Term Bond ........ 5,105 613 (5) 391
Small Cap Advantage .... 4,450 -- -- --
Small Cap Growth+ ...... 372 2,006 (136) 98
Small Cap Value ........ 1,389 2,135 321 30
Value Momentum ......... 2,969 150 672 100
------- ------- ------ ------
TOTAL: $37,872 $16,960 $1,848 $1,252
======= ======= ====== ======
INCOME PLUS ALLOCATION
- --------------------------------------------------------------------------------
INCOME
REALIZED FROM
GAINS AFFILIATED
AFFILIATED REGISTERED CONTRIBUTIONS WITHDRAWALS (LOSSES) INVESTMENTS
INVESTMENT COMPANY (000) (000) (000) (000)
- --------------------- ------------- ----------- -------- -----------
Bond ................... $ 1,001 $ 125 $ -- $ 91
Cognitive Value ........ 126 115 17 --
Core Equity ............ 326 20 5 8
Diversified Money
Market .............. 1,550 1,849 -- 4
International
Opportunities ....... 94 20 31 5
Large Cap Growth ....... 265 -- -- 1
Large Cap Value ........ 66 47 9 4
Short Term Bond ........ 1,348 189 -- 106
Small Cap Advantage .... 310 -- -- --
Small Cap Growth+ ...... 16 140 (11) --
Small Cap Value ........ 163 220 29 3
Value Momentum ......... 265 25 59 9
------- ------ ----- -----
TOTAL: $ 5,530 $2,750 $ 139 $ 231
======= ====== ===== =====
+ HighMark Small Cap Growth closed on March 6, 2007.
Amounts designated as "--" are either $0 or have been rounded to $0.
5. FEDERAL INCOME TAXES
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 provision for Federal income taxes is
required.
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, the 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 in nature. To the extent these
differences are permanent, they are charged or credited to paid-in capital,
undistributed realized gains or undistributed net investment income or
accumulated net realized gain, as appropriate, in the period that the
differences arise. Permanent differences primarily attributable to net operating
losses, distribution reclasses, different treatment for gains and losses on
paydowns of mortgage- and asset-backed securities, reclassifications of
long-term capital gain distributions on Real Estate Investment Trust securities,
gains and losses on passive foreign investment companies and the classification
of gains and losses on foreign currency for tax purposes. The following
permanent differences have been reclassified to/from the following accounts:
UNDISTRIBUTED UNDISTRIBUTED
NET INVESTMENT NET REALIZED PAID-IN
INCOME GAIN CAPITAL
(000) (000) (000)
-------------- --------------- ------------
Balanced ................... $ 13 $ (13) $ --
Cognitive Value ............ 96 (96) --
Enhanced Growth ............ 489 -- (489)
International
Opportunities ........... 121 (121) --
Small Cap Advantage ........ 11 (11) --
Small Cap Value ............ 187 (187) --
Capital Growth
Allocation .............. 411 (411) --
Diversified Equity
Allocation .............. 12 (12) --
Growth & Income
Allocation .............. 280 (280) --
Income Plus
Allocation .............. 16 (16) --
Bond ....................... (67) 67 --
Short Term Bond ............ 9 (9) --
Amounts designated as "--" are $0.
These reclassifications have no effect on net assets or net asset value per
share of the Funds.
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2007
The tax character of dividends and distributions paid on a tax basis during the
years or periods ended July 31, 2007 and July 31, 2006 (unless otherwise
indicated) were as follows:
TAX-EXEMPT ORDINARY LONG-TERM
INCOME INCOME CAPITAL GAIN TOTAL
(000) (000) (000) (000)
---------- -------- ------------- --------
Balanced
2007 .............. $ -- $ 893 $ 1,354 $ 2,247
2006 .............. -- 1,015 8 1,023
Cognitive Value
2007 .............. -- 3,758 8,036 11,794
2006 (1) .......... -- 3,573 7,694 11,267
2005 (2) .......... -- 159 7,505 7,664
Core Equity
2007 .............. -- 1,359 -- 1,359
2006 .............. -- 1,144 -- 1,144
Enhanced Growth
2007 .............. -- -- -- --
2006 (1) .......... -- -- -- --
2005 (2) .......... -- 1,056 -- 1,056
International
Opportunities
2007 .............. -- 10,942 16,125 27,067
2006 (1) .......... -- 3,254 4,193 7,447
2005 (2) .......... -- 1,567 -- 1,567
Large Cap Growth
2007 .............. -- 130 -- 130
2006 .............. -- 264 -- 264
Large Cap Value
2007 .............. -- 4,469 -- 4,469
2006 .............. -- 2,842 -- 2,842
Small Cap Advantage
2007 (3) .......... -- -- -- --
Small Cap Value
2007 .............. -- 5,557 30,728 36,285
2006 .............. -- 853 17,212 18,065
Value Momentum
2007 .............. -- 6,895 47,715 54,610
2006 .............. -- 7,765 47,899 55,664
Capital Growth
Allocation
2007 .............. -- 901 839 1,740
2006 .............. -- 66 90 156
Diversified Equity
Allocation
2007 (4) .......... -- 9 4 13
Growth & Income
Allocation
2007 .............. -- 1,179 645 1,824
2006 .............. -- 226 49 275
Income Plus
Allocation
2007 .............. -- 203 85 288
2006 .............. -- 81 2 83
Bond
2007 .............. -- 18,996 -- 18,996
2006 .............. -- 21,905 -- 21,905
California
Intermediate
Tax-Free Bond
2007 .............. 4,686 17 483 5,186
2006 .............. 5,452 9 1,538 6,999
TAX-EXEMPT ORDINARY LONG-TERM
INCOME INCOME CAPITAL GAIN TOTAL
(000) (000) (000) (000)
---------- -------- ------------ --------
National
Intermediate
Tax-Free Bond
2007 .............. $ 2,999 $ 9 $ 274 $ 3,282
2006 .............. 3,449 21 687 4,157
Short Term Bond
2007 .............. -- 1,952 -- 1,952
2006 .............. -- 1,169 -- 1,169
California Tax-Free
Money Market
2007 .............. 16,563 89 -- 16,652
2006 .............. 11,661 123 -- 11,784
Diversified Money
Market
2007 .............. -- 136,702 -- 136,702
2006 .............. -- 122,374 -- 122,374
U.S. Government
Money Market
2007 .............. -- 26,999 -- 26,999
2006 .............. -- 20,220 -- 20,220
100% U.S. Treasury
Money Market
2007 .............. -- 31,862 -- 31,862
2006 .............. -- 28,842 -- 28,842
(1) For the ten month period ended July 31, 2006. On April 3, 2006, HighMark
Funds acquired the assets and assumed the identified liabilities of
Bailard Cognitive Value Fund, Bailard Enhanced Growth Fund and Bailard
International Equity Fund (the "Bailard Funds") (see Note 9 in notes to
financial statements). The fiscal year end of the Bailard Funds, the
predecessor funds to HighMark Cognitive Value Fund, HighMark Enhanced
Growth Fund and HighMark International Opportunities Fund, was September
30. The fiscal year end of the successor HighMark Funds is July 31.
(2) For the year ended September 30.
(3) Commenced operations on March 1, 2007.
(4) Commenced operations on November 15, 2006.
Amounts designated as "--" are either $0 or have been rounded to $0.
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138 1.800.433.6884
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As of July 31, 2007, the components of distributable earnings (accumulated
losses) on a tax basis were as follows:
TOTAL
DISTRIBUTABLE
UNDISTRIBUTED UNDISTRIBUTED UNDISTRIBUTED CAPITAL POST- UNREALIZED OTHER EARNINGS
ORDINARY TAX-EXEMPT LONG-TERM LOSS OCTOBER APPRECIATION TEMPORARY (ACCUMULATED
INCOME INCOME CAPITAL GAIN CARRYFORWARD LOSSES (DEPRECIATION) DIFFERENCES LOSSES)
(000) (000) (000) (000) (000) (000) (000) (000)
------------- ------------- ------------- ------------ ---------- -------------- ----------- -------------
Balanced ......... $ -- $ -- $ 2,763 $ -- $ -- $ 4,822 $ -- $ 7,585
Cognitive Value .. 5,682 -- 5,719 -- -- 8,457 -- 19,858
Core Equity ...... 27 -- 4,583 -- -- 6,111 -- 10,721
Enhanced Growth .. -- -- -- (6,425) -- 30,969 -- 24,544
International
Opportunities .. 6,177 -- 11,973 -- (39) 101,626 (6) 119,731
Large Cap Growth 325 -- -- (128,051) -- 10,021 -- (117,705)
Large Cap Value .. 112 -- 19,838 -- -- 31,223 -- 51,173
Small Cap
Advantage ...... 258 -- -- -- -- (2,261) -- (2,003)
Small Cap Value .. 5,048 -- 20,036 -- -- 16,921 -- 42,005
Value Momentum ... 2,109 -- 54,625 -- -- 135,540 -- 192,274
Capital Growth
Allocation ..... -- -- 2,337 -- -- 4,816 -- 7,153
Diversified
Equity
Allocation ..... -- -- 42 -- -- 24 -- 66
Growth & Income
Allocation ..... 44 -- 1,558 -- -- 3,553 -- 5,155
Income Plus
Allocation ..... 15 -- 122 -- -- 225 -- 362
Bond ............. 346 -- -- (7,862) -- 321 -- (7,195)
California
Intermediate
Tax-Free Bond .. -- 87 111 -- -- 993 -- 1,191
National
Intermediate
Tax-Free Bond .. -- 55 33 -- -- 534 -- 622
Short Term Bond .. 45 -- -- (99) (39) (238) -- (331)
California
Tax-Free Money
Market Fund .... -- 1,613 -- -- -- -- (1,613) --
Diversified Money
Market ......... 11,611 -- -- (6) -- -- (11,611) (6)
U.S. Government
Money Market ... 2,388 -- -- (36) -- -- (2,388) (36)
100% U.S.
Treasury
Money Market ... 2,598 -- -- (167) (1) -- (2,597) (167)
AMOUNTS DESIGNATED AS "--" ARE EITHER NOT APPLICABLE, $0 OR HAVE BEEN ROUNDED TO
$0.
Post-October losses represent losses realized on investment transactions from
November 1, 2006 through July 31, 2007, that, in accordance with Federal income
tax regulations, a Fund may elect to defer and treat as having arisen in the
following year.
For Federal income tax purposes, capital loss carryforwards represent net
realized losses of a Fund that may be carried forward for a maximum period of
eight years and applied against future net capital gains. At July 31, 2007, the
Funds had capital loss carryforwards available to offset future realized capital
gains through the indicated expiration dates:
EXPIRING JULY 31,
-----------------------------------------------------------------------------------------
2008 2009 2010 2011 2012 2013 2014 2015 TOTAL
(000) (000) (000) (000) (000) (000) (000) (000) (000)
------ ------ -------- ------- -------- -------- ------- ------- ---------
Enhanced Growth .................. $-- $-- $ -- $ -- $5,663 $762 $-- $-- $ 6,425
Large Cap Growth ................. -- -- 89,027 39,024 -- -- -- -- 128,051
Bond ............................. -- 60 -- 1,691 6,111 -- -- -- 7,862
Short Term Bond .................. -- -- -- -- -- -- 36 63 99
Diversified Money Market ......... -- 3 -- 1 -- 1 1 -- 6
U.S. Government Money Market ..... -- -- 19 15 -- 1 1 -- 36
100% U.S. Treasury Money Market .. -- -- -- 151 -- -- -- 16 167
AMOUNTS DESIGNATED AS "--" ARE EITHER NOT APPLICABLE, $0 OR HAVE BEEN ROUNDED TO
$0.
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2007
During the year ended July 31, 2007, capital loss carry-forwards that were
utilized to offset gains are as follows:
(000)
---------
Core Equity ........................................................ $ 11,335
Enhanced Growth .................................................... 2,032
Large Cap Growth ................................................... 17,201
Large Cap Value .................................................... 15,841
Bond ............................................................... 2,311
California Tax-Free Money Market ................................... 1
Diversified Money Market ........................................... 127
At July 31, 2007, the total cost of securities for Federal income tax purposes
and the aggregate gross unrealized appreciation and depreciation for securities
held by the Funds are as follows:
FEDERAL TAX
COST APPRECIATION DEPRECIATION TOTAL
(000) (000) (000) (000)
------------ ------------ ------------ ---------
Balanced ...................... $ 47,238 $ 5,771 $ (949) $ 4,822
Cognitive Value ............... 129,070 16,393 (7,936) 8,457
Core Equity ................... 144,667 13,364 (7,253) 6,111
Enhanced Growth ............... 124,183 35,543 (4,574) 30,969
International
Opportunities .............. 284,003 105,700 (4,087) 101,613
Large Cap Growth .............. 132,242 13,878 (3,857) 10,021
Large Cap Value ............... 383,846 45,891 (14,668) 31,223
Small Cap Advantage ........... 37,579 1,079 (3,340) (2,261)
Small Cap Value ............... 339,256 38,655 (21,734) 16,921
Value Momentum ................ 390,973 148,063 (12,523) 135,540
Capital Growth
Allocation ................. 75,208 5,747 (931) 4,816
Diversified Equity
Allocation ................. 7,039 166 (142) 24
Growth & Income
Allocation ................. 67,106 4,265 (712) 3,553
Income Plus
Allocation ................. 9,116 324 (99) 225
Bond .......................... 442,426 6,806 (6,485) 321
California Intermediate
Tax-Free Bond .............. 119,333 1,675 (682) 993
National Intermediate
Tax-Free Bond .............. 70,152 881 (347) 534
Short Term Bond ............... 58,651 101 (339) (238)
California Tax-Free
Money Market ............... 601,486 -- -- --
Diversified Money
Market ..................... 2,932,410 -- -- --
U.S. Government
Money Market ............... 621,009 -- -- --
100% U.S. Treasury
Money Market ............... 716,042 -- -- --
6. SECURITIES LENDING
The Custodian serves as the Funds' securities lending agent. Certain Funds lend
their securities to approved brokers to earn additional income and receive cash
and/or securities as collateral to secure the loans. The Custodian rebates to
the brokers certain negotiated amounts if cash is received as collateral for
securities on loan. Additionally, the Custodian receives fees for administering
the securities lending program for the Funds. For the year ended July 31, 2007,
these fees totaled $223,574. Such fees and rebates reduce the overall income the
Funds earned on securities purchased with cash collateral, which is reflected
net as a reduction to interest income in the statements of operations. The Funds
maintain collateral at not less than 100% of the value of loaned securities. If
cash collateral is received, a related liability is shown on the statements of
assets and liabilities. Although the risk of securities lending is mitigated by
the collateral, a Fund could experience a delay in recovering its securities and
a possible loss of income or value if the borrower fails to return them. The
market value of the securities on loan and collateral at July 31, 2007, and the
income generated from the program during the year ended July 31, 2007, with
respect to such loans are as follows:
MARKET VALUE MARKET INCOME RECEIVED
OF SECURITIES VALUE OF FROM SECURITIES
LOANED COLLATERAL LENDING
(000) (000) (000)
------------- ---------- ---------------
Balanced ...................... $ 8,267 $ 8,617 $ 10
Cognitive Value ............... 27,171 28,608 124
Core Equity ................... 11,186 11,753 28
Enhanced Growth ............... 16,317 17,126 65
International
Opportunities .............. 30,666 31,983 340
Large Cap Growth .............. 9,452 9,749 28
Large Cap Value ............... 28,932 30,949 103
Small Cap Advantage ........... 7,103 7,805 8
Small Cap Value ............... 76,537 86,195 242
Value Momentum ................ 38,386 40,405 139
Bond .......................... 48,365 52,349 54
Short Term Bond ............... 2,231 2,553 3
7. CONCENTRATION OF CREDIT RISK
The California Intermediate Tax-Free Bond Fund and the California Tax-Free Money
Market Fund invest in debt securities issued by the State of California. The
ability of the issuers of the securities held by these Funds to meet their
obligations may be affected by economic and political developments in that
state.
Each Fund may invest in securities of foreign issuers in various countries.
These investments may involve certain considerations and risks not typically
associated with investments in the United States, as a result of, among other
factors, the possibility of future political and economic developments and the
level of governmental supervision and regulation of securities markets in the
respective countries.
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140 1.800.433.6884
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8. OPTION CONTRACTS
Transactions in written covered call options during the year ended July 31, 2007
are summarized as follows:
VALUE MOMENTUM
---------------------
NUMBER OF
WRITTEN CALL OPTIONS TRANSACTIONS CONTRACTS PREMIUM
- --------------------------------- --------- ---------
Call Options Written and
Outstanding at beginning of period .................. 50 $ (12,600)
Call Options Expired During Period .................... (50) 12,600
---- ---------
Call Options Written and
Outstanding at End of Period ........................ -- $ --
==== =========
9. FUND REORGANIZATION
The Board of Directors of the Bailard Opportunity Fund Group, Inc. and the
stockholders of Bailard Cognitive Value Fund, Bailard Enhanced Growth Fund and
Bailard International Equity Fund (the "Reorganizing Funds") approved plans of
reorganization pursuant to which the assets and identified liabilities of each
of the Reorganizing Funds were transferred to the corresponding, similarly
managed series of HighMark Funds (shown below) in exchange for newly issued
Class M shares of the corresponding HighMark Fund. The consummation of the
reorganization took place on April 3, 2006.
REORGANIZING FUNDS HIGHMARK FUNDS
- --------------------------------------------------------------------------------
Bailard Cognitive Value Fund Cognitive Value Fund
Bailard Enhanced Growth Fund Enhanced Growth Fund
Bailard International Equity Fund International Opportunities Fund
The following information relates to the Reorganizing Funds immediately prior to
the consummation of the reorganization:
REORGANIZING SHARES FAIR VALUE COST OF UNREALIZED
FUNDS NET ASSETS ISSUED OF SECURITIES SECURITIES APPRECIATION
- -------------------------------------------------------------------------------------------
Bailard Cognitive
Value Fund $ 96,828,364 $ 7,123,827 $ 94,226,405 $ 77,615,271 $ 16,611,134
Bailard Enhanced
Growth Fund 136,944,149 14,778,883 135,030,712 104,146,040 30,884,672
Bailard
International
Equity Fund 200,631,520 23,542,424 197,380,613 134,187,807 63,192,806
The HighMark Funds listed above were created in anticipation of the
reorganization. The financial statements and financial highlights of the
Reorganizing Funds for certain periods prior to April 3, 2006 are included in
this report as part of the financial statements and financial highlights of the
HighMark Funds above.
10. IN-KIND TRANSACTION
During the year ended July 31, 2006, the Large Cap Growth Fund primarily
distributed securities in lieu of cash for shareholder redemptions. The
shareholders received a pro-rata portion of the Fund's holdings. The value of
the redemptions were as follows:
FIDUCIARY SHARES:
REALIZED
GAIN FUND
BY THE SHARES
DATE REDEMPTION SECURITIES CASH FUND REDEEMED
- -------- ------------ ------------ --------- ----------- ----------
01/13/06 $ 18,923,320 $ 18,480,548 $ 442,772 $ 5,097,422 2,002,468
Since this transaction was a non-taxable event to the Fund, these gains will
have no impact on the Fund's capital gains distributions in the current year.
This transaction was completed pursuant to procedures adopted by the Board.
These procedures are designed to minimize or eliminate any adverse tax
implications to the Funds and its shareholders.
11. OTHER (UNAUDITED)
At July 31, 2007, the percentage of total shares outstanding held by
shareholders of record (comprised of omnibus accounts held on behalf of several
individual shareholders) owning 10% or greater of the aggregate total shares
outstanding for each Fund is as follows:
NO. OF %
SHAREHOLDERS OWNERSHIP
------------ ---------
Balanced ............................................. 1 71%
Cognitive Value ...................................... 1 14
Core Equity .......................................... 2 63
Enhanced Growth ...................................... 1 14
International Opportunities .......................... 1 10
Large Cap Growth ..................................... 3 66
Large Cap Value ...................................... 1 17
Small Cap Advantage .................................. 3 84
Small Cap Value ...................................... 2 21
Value Momentum ....................................... 2 78
Capital Growth Allocation ............................ -- --
Diversified Equity Allocation ........................ 1 25
Growth & Income Allocation ........................... -- --
Income Plus Allocation ............................... -- --
Bond ................................................. 3 80
California Intermediate
Tax-Free Bond ...................................... 2 68
National Intermediate
Tax-Free Bond ...................................... 2 90
Short Term Bond ...................................... 4 76
California Tax-Free Money Market ..................... 2 91
Diversified Money Market ............................. 4 100
U.S. Government Money Market ......................... 2 93
100% U.S. Treasury Money Market ...................... 3 97
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2007
12. SHARES ISSUED AND REDEEMED (000)
Transactions in Fund shares are as follows for the years or period ended July 31
(unless otherwise indicated):
BALANCED COGNITIVE VALUE CORE EQUITY ENHANCED GROWTH
FUND FUND FUND FUND
-------------- --------------------------- --------------- ----------------------------
2007 2006 2007 2006 (4) 2005 (5) 2007 2006 2007 2006 (4) 2005 (5)
-------------- --------------------------- --------------- ----------------------------
Shares Issued and Redeemed:
Fiduciary Shares (1):
Issued ........................ 303 520 236 133 -- 2,248 1,839 -- -- --
Issued in Lieu of Cash
Distributions................ 121 62 36 -- -- 43 33 -- -- --
Redeemed ...................... (859) (2,202) (230) -- -- (2,121) (2,393) -- -- --
----- ------ ----- -------- -------- ------ ------ ------ -------- -------
Total Fiduciary Share
Transactions............... (435) (1,620) 42 133 -- 170 (521) -- -- --
----- ------ ----- -------- -------- ------ ------ ------ -------- -------
Class A Shares (2):
Issued ........................ 72 42 254 37 -- 685 38 17 5 --
Issued in Lieu of Cash
Distributions................ 21 8 27 -- -- 4 3 -- -- --
Redeemed ...................... (103) (84) (28) -- -- (131) (102) -- -- --
----- ------ ----- -------- -------- ------ ------ ------ -------- -------
Total Class A Share
Transactions............... (10) (34) 253 37 -- 558 (61) 17 5 --
----- ------ ----- -------- -------- ------ ------ ------ -------- -------
Class B Shares:
Issued ........................ -- 7 -- -- -- 1 3 -- -- --
Issued in Lieu of Cash
Distributions ............... 7 2 -- -- -- 1 1 -- -- --
Redeemed ...................... (75) (62) -- -- -- (44) (71) -- -- --
----- ------ ----- -------- -------- ------ ------ ------ -------- -------
Total Class B Share
Transactions............... (68) (53) -- -- -- (42) (67) -- -- --
----- ------ ----- -------- -------- ------ ------ ------ -------- -------
Class C Shares (3):
Issued ........................ 3 10 3 -- -- 58 5 1 -- --
Issued in Lieu of Cash
Distributions ............... 1 -- -- -- -- -- -- -- -- --
Redeemed ...................... (2) (10) (1) -- -- (11) (4) -- -- --
----- ------ ----- -------- -------- ------ ------ ------ -------- -------
Total Class C Share
Transactions............... 2 -- 2 -- -- 47 1 1 -- --
----- ------ ----- -------- -------- ------ ------ ------ -------- -------
Class M Shares:
Issued ........................ -- -- 538 471 662 -- -- 1,181 1,137 7,058
Issued in Lieu of Cash
Distributions ............... -- -- 775 876 550 -- -- -- -- 111
Redeemed ...................... -- -- (416) (674) (581) -- -- (2,669) (903) (962)
----- ------ ----- -------- -------- ------ ------ ------ -------- -------
Total Class M Share
Transactions .............. -- -- 897 673 631 -- -- (1,488) 234 6,207
----- ------ ----- -------- -------- ------ ------ ------ -------- -------
Net Increase (Decrease) in Share
Transactions .................... (511) (1,707) 1,194 843 631 733 (648) (1,470) 239 6,207
===== ====== ===== ======== ======== ====== ====== ====== ======== =======
AMOUNTS DESIGNATED AS "--" ARE EITHER NOT APPLICABLE, 0 OR HAVE BEEN ROUNDED
TO 0.
* INCLUDES REDEMPTIONS AS A RESULT OF AN IN-KIND TRANSACTION (SEE NOTE 10 IN
NOTES TO FINANCIAL STATEMENTS).
(1) FIDUCIARY SHARES COMMENCED OPERATIONS ON JULY 3, 2006 FOR COGNITIVE VALUE
FUND AND APRIL 4, 2006 FOR INTERNATIONAL OPPORTUNITIES FUND.
(2) CLASS A SHARES COMMENCED OPERATIONS ON APRIL 3, 2006 FOR COGNITIVE VALUE,
ENHANCED GROWTH AND INTERNATIONAL OPPORTUNITIES FUNDS.
(3) CLASS C SHARES COMMENCED OPERATIONS ON APRIL 3, 2006 FOR THE COGNITIVE
VALUE, ENHANCED GROWTH AND INTERNATIONAL OPPORTUNITIES FUNDS.
(4) FOR THE TEN MONTH PERIOD ENDED JULY 31, 2006. ON APRIL 3, 2006, HIGHMARK
FUNDS ACQUIRED THE ASSETS AND ASSUMED THE IDENTIFIED LIABILITIES OF
BAILARD COGNITIVE VALUE FUND, BAILARD ENHANCED GROWTH FUND AND BAILARD
INTERNATIONAL EQUITY FUND (THE "BAILARD FUNDS") (SEE NOTE 9 IN NOTES TO
FINANCIAL STATEMENTS). THE FISCAL YEAR END OF THE BAILARD FUNDS, THE
PREDECESSOR FUNDS TO HIGHMARK COGNITIVE VALUE FUND, HIGHMARK ENHANCED
GROWTH FUND AND HIGHMARK INTERNATIONAL OPPORTUNITIES FUND, WAS SEPTEMBER
30. THE FISCAL YEAR END OF THE SUCCESSOR HIGHMARK FUNDS IS JULY 31.
(5) FOR THE YEAR ENDED SEPTEMBER 30.
(6) COMMENCED OPERATIONS ON MARCH 1, 2007.
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INTERNATIONAL
OPPORTUNITIES LARGE CAP GROWTH LARGE CAP VALUE
FUND FUND FUND
----------------------------- ------------------- ----------------
2007 2006 (4) 2005 (5) 2007 2006 2007 2006
----------------------------- ------------------- ----------------
Shares Issued and Redeemed:
Fiduciary Shares (1):
Issued ...................... 4,618 1,574 -- 2,604 2,368 4,705 5,032
Issued in Lieu of Cash
Distributions ............. 252 -- -- 8 19 129 96
Redeemed .................... (349) -- -- (3,376) (5,671)* (2,867) (2,707)
------- -------- -------- ------- -------- ------- ------
Total Fiduciary Share
Transactions ............ 4,521 1,574 -- (764) (3,284) 1,967 2,421
------- -------- -------- ------- -------- ------- ------
Class A Shares (2):
Issued ...................... 1,346 244 -- 165 387 2,654 6,579
Issued in Lieu of Cash
Distributions ............. 46 -- -- -- 1 99 67
Redeemed .................... (153) (15) -- (547) (606) (2,488) (1,830)
------- -------- -------- ------- -------- ------- ------
Total Class A Share
Transactions ............ 1,239 229 -- (382) (218) 265 4,816
------- -------- -------- ------- -------- ------- ------
Class B Shares:
Issued ...................... -- -- -- -- 16 10 15
Issued in Lieu of Cash
Distribution .............. -- -- -- -- -- 1 1
Redeemed .................... -- -- -- (292) (244) (69) (114)
------- -------- -------- ------- -------- ------- ------
Total Class B Share
Transactions ............ -- -- -- (292) (228) (58) (98)
------- -------- -------- ------- -------- ------- ------
Class C Shares (3):
Issued ...................... 263 92 -- 28 21 145 160
Issued in Lieu of Cash
Distributions ............. 18 -- -- -- -- 3 2
Redeemed .................... (45) (6) -- (69) (38) (69) (94)
------- -------- -------- ------- -------- ------- ------
Total Class C Share
Transactions ............ 236 86 -- (41) (17) 79 68
------- -------- -------- ------- -------- ------- ------
Class M Shares:
Issued ...................... 3,005 2,206 4,025 -- -- -- --
Issued in Lieu of Cash
Distributions ............. 2,393 855 187 -- -- -- --
Redeemed .................... (1,561) (1,908) (9,076) -- -- -- --
------- -------- -------- ------- -------- ------- ------
Total Class M Share
Transactions ............ 3,837 1,153 (4,864) -- -- -- --
------- -------- -------- ------- -------- ------- ------
Net Increase (Decrease) in Share
Transactions .................. 9,833 3,042 (4,864) (1,479) (3,747) 2,253 7,207
======= ======== ======== ======= ======== ======= ======
SMALL CAP ADVANTAGE SMALL CAP VALUE
FUND FUND
------------------- -------------------
2007 (6) 2007 2006
------------------- -------------------
Shares Issued and Redeemed:
Fiduciary Shares (1):
Issued ...................... 1,519 4,040 3,969
Issued in Lieu of Cash
Distributions ............. -- 1,182 540
Redeemed .................... (55) (3,791) (2,368)
------- -------- --------
Total Fiduciary Share
Transactions ............ 1,464 1,431 2,141
------- -------- --------
Class A Shares (2):
Issued ...................... 6 1,073 2,089
Issued in Lieu of Cash
Distributions ............. -- 360 261
Redeemed .................... -- (1,493) (1,578)
------- -------- --------
Total Class A Share
Transactions ............ 6 (60) 772
------- -------- --------
Class B Shares:
Issued ...................... -- 5 14
Issued in Lieu of Cash
Distribution .............. -- 91 59
Redeemed .................... -- (176) (151)
------- -------- --------
Total Class B Share
Transactions ............ -- (80) (78)
------- -------- --------
Class C Shares (3):
Issued ...................... 7 338 253
Issued in Lieu of Cash
Distributions ............. -- 149 75
Redeemed .................... -- (322) (355)
------- -------- --------
Total Class C Share
Transactions ............ 7 165 (27)
------- -------- --------
Class M Shares:
Issued ...................... -- -- --
Issued in Lieu of Cash
Distributions ............. -- -- --
Redeemed .................... -- -- --
------- -------- --------
Total Class M Share
Transactions ............ -- -- --
------- -------- --------
Net Increase (Decrease) in Share
Transactions .................. 1,477 1,456 2,808
======= ======== ========
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JULY 31, 2007
12. SHARES ISSUED AND REDEEMED (000) (CONCLUDED)
Transactions in Fund Shares are as follows for the years or period ended
July 31:
CAPITAL GROWTH DIVERSIFIED EQUITY
VALUE MOMENTUM ALLOCATION ALLOCATION
FUND FUND FUND
--------------------- ------------------- ------------------
2007 2006 2007 (1) 2006 2007 (2)
--------------------- ------------------- ------------------
Shares Issued and Redeemed:
Fiduciary Shares:
Issued ................................... 2,438 2,487 30 -- 9
Issued in Lieu of Cash Distributions ..... 1,962 2,123 -- -- --
Redeemed ................................. (4,658) (3,836) -- -- --
------- ------- ------- ------ ------
Total Fiduciary Share Transactions .... (258) 774 30 -- 9
------- ------- ------- ------ ------
Class A Shares:
Issued ................................... 210 180 906 1,010 250
Issued in Lieu of Cash Distributions ..... 133 135 42 5 --
Redeemed ................................. (323) (219) (374) (85) (17)
------- ------- ------- ------ ------
Total Class A Share Transactions ...... 20 96 574 930 233
------- ------- ------- ------ ------
Class B Shares:
Issued ................................... 10 5 -- -- --
Issued in Lieu of Cash Distributions ..... 32 44 -- -- --
Redeemed ................................. (83) (118) -- -- --
------- ------- ------- ------ ------
Total Class B Share Transactions ...... (41) (69) -- -- --
------- ------- ------- ------ ------
Class C Shares:
Issued ................................... 29 21 580 561 99
Issued in Lieu of Cash Distributions ..... 7 5 21 1 --
Redeemed ................................. (12) (14) (143) (42) (4)
------- ------- ------- ------ ------
Total Class C Share Transactions ...... 24 12 458 520 95
------- ------- ------- ------ ------
Net Increase (Decrease) in Share Transactions .. (255) 813 1,062 1,450 337
======= ======= ======= ====== ======
NATIONAL INTERMEDIATE SHORT TERM CALIFORNIA TAX-FREE
TAX-FREE FOND BOND MONEY MARKET
FUND FUND FUND
--------------------- ------------------- -------------------
2007 2006 2007 2006 2007 2006
--------------------- ------------------- -------------------
Shares Issued and Redeemed:
Fiduciary Shares:
Issued ................................... 237 134 2,493 1,651 641,908 538,460
Issued in Lieu of Cash Distributions ..... 24 59 111 51 1 25
Redeemed ................................. (900) (1,298) (777) (457) (592,039) (550,493)
------- ------- ------- ------ -------- --------
Total Fiduciary Share Transactions .... (639) (1,105) 1,827 1,245 49,870 (12,008)
------- ------- ------- ------ -------- --------
Class A Shares:
Issued ................................... 80 75 203 170 483,968 538,589
Issued in Lieu of Cash Distributions ..... 10 12 3 2 8,529 6,054
Redeemed ................................. (66) (150) (304) (204) (441,219) (534,337)
------- ------- ------- ------ -------- --------
Total Class A Share Transactions ...... 24 (63) (98) (32) 51,278 10,306
------- ------- ------- ------ -------- --------
Class B Shares:
Issued ................................... -- -- -- -- -- --
Issued in Lieu of Cash Distributions ..... -- -- -- -- -- --
Redeemed ................................. -- -- -- -- -- --
------- ------- ------- ------ -------- --------
Total Class B Share Transactions ...... -- -- -- -- -- --
------- ------- ------- ------ -------- --------
Class C Shares:
Issued ................................... -- -- 7 289 -- --
Issued in Lieu of Cash Distributions ..... -- -- -- -- -- --
Redeemed ................................. (2) (2) (100) (36) -- --
------- ------- ------- ------ -------- --------
Total Class C Share Transactions ...... (2) (2) (93) 253 -- --
------- ------- ------- ------ -------- --------
Class S Shares:
Issued ................................... -- -- -- -- 216,148 204,308
Issued in Lieu of Cash Distributions ..... -- -- -- -- 1,277 700
Redeemed ................................. -- -- -- -- (201,457) (201,798)
------- ------- ------- ------ -------- --------
Total Class S Share Transactions ...... -- -- -- -- 15,968 3,210
------- ------- ------- ------ -------- --------
Net Increase (Decrease) in Share Transactions .. (617) (1,170) 1,636 1,466 117,116 1,508
======= ======= ======= ====== ======== ========
AMOUNTS DESIGNATED AS "--" ARE EITHER NOT APPLICABLE, 0 OR HAVE BEEN ROUNDED
TO 0.
(1) FIDUCIARY SHARES COMMENCED OPERATIONS ON NOVEMBER 15, 2006.
(2) COMMENCED OPERATIONS ON NOVEMBER 15, 2006.
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GROWTH & INCOME INCOME PLUS CALIFORNIA INTERMEDIATE
ALLOCATION ALLOCATION BOND TAX-FREE BOND
FUND FUND FUND FUND
----------------- --------------- ---------------- -----------------------
2007 (1) 2006 2007 (1) 2006 2007 2006 2007 2006
----------------- --------------- ---------------- -----------------------
Shares Issued and Redeemed:
Fiduciary Shares:
Issued ................................... 4 -- 5 -- 5,541 7,043 758 670
Issued in Lieu of Cash Distributions ..... -- -- -- -- 778 946 56 116
Redeemed ................................. (4) -- -- -- (10,660) (9,683) (1,284) (1,158)
------ ------ ------ ------ ------- ------ ------ ------
Total Fiduciary Share Transactions .... -- -- 5 -- (4,341) (1,694) (470) (372)
------ ------ ------ ------ ------- ------ ------ ------
Class A Shares:
Issued ................................... 811 1,083 117 116 140 128 100 383
Issued in Lieu of Cash Distributions ..... 52 9 6 2 113 123 86 147
Redeemed ................................. (305) (150) (48) (48) (699) (945) (1,181) (2,054)
------ ------ ------ ------ ------- ------ ------ ------
Total Class A Share Transactions ...... 558 942 75 70 (446) (694) (995) (1,524)
------ ------ ------ ------ ------- ------ ------ ------
Class B Shares:
Issued ................................... -- -- -- -- 3 10 -- 2
Issued in Lieu of Cash Distributions ..... -- -- -- 10 20 23 12 17
Redeemed ................................. -- -- -- -- (157) (117) (112) (102)
------ ------ ------ ------ ------- ------ ------ ------
Total Class B Share Transactions ...... -- -- -- -- (134) (84) (100) (83)
------ ------ ------ ------ ------- ------ ------ ------
Class C Shares:
Issued ................................... 522 356 92 86 2 8 8 14
Issued in Lieu of Cash Distributions ..... 18 2 3 2 -- -- 1 3
Redeemed ................................. (115) (41) (21) (13) (1) (3) (38) (54)
------ ------ ------ ------ ------- ------ ------ ------
Total Class C Share Transactions ...... 425 317 74 75 1 5 (29) (37)
------ ------ ------ ------ ------- ------ ------ ------
Net Increase (Decrease) in Share Transactions .. 983 1,259 154 145 (4,920) (2,467) (1,594) (2,016)
====== ====== ====== ====== ======= ====== ====== ======
DIVERSIFIED U.S. GOVERNMENT 100% U.S. TREASURY
MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND
----------------------- ----------------------- -----------------------
2007 2006 2007 2006 2007 2006
----------------------- ----------------------- -----------------------
Shares Issued and Redeemed:
Fiduciary Shares:
Issued ................................... 4,525,095 5,610,560 3,562,106 4,084,427 2,256,238 2,941,432
Issued in Lieu of Cash Distributions ..... 19,336 14,690 379 298 789 624
Redeemed ................................. (4,703,462) (5,819,885) (3,612,255) (4,015,957) (2,314,729) (2,956,423)
---------- ---------- ---------- ---------- ---------- ----------
Total Fiduciary Share Transactions .... (159,031) (194,635) (49,770) 68,768 (57,702) (14,367)
---------- ---------- ---------- ---------- ---------- ----------
Class A Shares:
Issued ................................... 894,427 854,366 127,289 74,914 428,419 403,706
Issued in Lieu of Cash Distributions ..... 35,491 23,518 1,430 1,152 5,597 5,056
Redeemed ................................. (861,894) (709,417) (127,913) (76,752) (459,648) (432,280)
---------- ---------- ---------- ---------- ---------- ----------
Total Class A Share Transactions ...... 68,024 168,467 806 (686) (25,632) (23,518)
---------- ---------- ---------- ---------- ---------- ----------
Class B Shares:
Issued ................................... -- -- 42 138 -- --
Issued in Lieu of Cash Distributions ..... -- -- 22 27 -- --
Redeemed ................................. -- -- (412) (563) -- --
---------- ---------- ---------- ---------- ---------- ----------
Total Class B Share Transactions ...... -- -- (348) (398) -- --
---------- ---------- ---------- ---------- ---------- ----------
Class C Shares:
Issued ................................... -- -- 123 60 -- --
Issued in Lieu of Cash Distributions ..... -- -- 3 1 -- --
Redeemed ................................. -- -- (158) -- -- --
---------- ---------- ---------- ---------- ---------- ----------
Total Class C Share Transactions ...... -- -- (32) 61 -- --
---------- ---------- ---------- ---------- ---------- ----------
Class S Shares:
Issued ................................... 1,087,759 2,559,035 731,414 616,790 1,169,540 1,063,189
Issued in Lieu of Cash Distributions ..... 17,934 18,501 5,032 3,315 10,211 8,571
Redeemed ................................. (1,197,714) (2,758,484) (700,791) (585,681) (1,182,674) (1,099,919)
---------- ---------- ---------- ---------- ---------- ----------
Total Class S Share Transactions ...... (92,021) (180,948) 35,655 34,424 (2,923) (28,159)
---------- ---------- ---------- ---------- ---------- ----------
Net Increase (Decrease) in Share Transactions .. (183,028) (207,116) (13,689) 102,169 (86,257) (66,044)
========== ========== ========== ========== ========== ==========
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NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
JULY 31, 2007
13. NEW ACCOUNTING PRONOUNCEMENTS
In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
interpretation 48 ("FIN 48"), "ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES". This
standard requires the evaluation as to whether a tax position taken or expected
to be taken on a tax return has a "more-likely-than-not" probability of being
sustained by the taxing authority and requires the measurement of those tax
positions meeting the more-likely-than-not criterion, based on the largest
benefit that is more than 50 percent likely of being realized upon ultimate
settlement. FIN 48 is effective as of the beginning of the first fiscal year
beginning after December 15, 2006. Upon adoption, companies must adjust their
financial statements to reflect only those tax positions that management
believes will more-likely-than-not be sustained as of the adoption date. The
Funds will not be required to adopt FIN 48 until the last business day of its
semi-annual reporting period, January 31, 2008. Based on the current ongoing
analysis, HighMark does not anticipate that the adoption of FIN 48 will have a
material impact to the Funds' financial statements upon adoption. However,
HighMark conclusions regarding FIN 48 may be subject to review and adjustment at
a later date based on factors including, but not limited to, further
implementation guidance, changes to tax laws, regulations and interpretations
thereof as well as the completion of the analysis.
In September 2006, the FASB issued STATEMENT ON FINANCIAL ACCOUNTING STANDARDS
NO. 157 (SFAS NO. 157), "FAIR VALUE MEASUREMENTS". This standard establishes a
single authoritative definition of fair value, sets out a framework for
measuring fair value and requires additional disclosures about fair value
measurements. SFAS No. 157 applies to fair value measurements already required
or permitted by existing standards. SFAS No. 157 is effective for fiscal years
beginning after November 15, 2007. The changes to current accounting principles
generally accepted in the United States of America from the application of this
Statement relate to the definition of fair value, the methods used to measure
fair value, and the expanded disclosures about fair value measurements. As of
July 31, 2007, the Funds do not believe the adoption of SFAS No. 157 will impact
the amounts reported in the financial statements, however, additional
disclosures may be required about the inputs used to develop the measurements
and the effect of certain of the measurements reported on the statement of
assets and liabilities.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF HIGHMARK FUNDS:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of HighMark Funds (the "Funds") comprising
Balanced Fund, Cognitive Value Fund, Core Equity Fund, Enhanced Growth Fund,
International Opportunities Fund, Large Cap Growth Fund, Large Cap Value Fund,
Small Cap Advantage Fund, Small Cap Value Fund, Value Momentum Fund, Capital
Growth Allocation Fund, Diversified Equity Allocation Fund, Growth & Income
Allocation Fund, Income Plus Allocation Fund, Bond Fund, California Intermediate
Tax-Free Bond Fund, National Intermediate Tax-Free Bond Fund, Short Term Bond
Fund, California Tax-Free Money Market Fund, Diversified Money Market Fund, U.S.
Government Money Market Fund and 100% U.S. Treasury Money Market Fund as of July
31, 2007, and the related statements of operations, the statements of changes in
net assets and the financial highlights for each of the periods presented. These
financial statements and financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The
statements of changes in net assets for the year ended September 30, 2005 and
the financial highlights for each period ending on or before September 30, 2005
of Cognitive Value Fund, Enhanced Growth Fund and International Opportunities
Fund were audited by other auditors whose report, dated November 11, 2005,
expressed an unqualified opinion on those financial statements and financial
highlights.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
The Funds are not required to have, nor were we engaged to perform, audits of
their internal control over financial reporting. Our audits included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing opinions on the effectiveness of the Funds'
internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. Our procedures
included confirmation of securities owned as of July 31, 2007, by correspondence
with the custodians and brokers; where replies were not received from brokers,
we performed other auditing procedures. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the funds constituting HighMark Funds as of July 31, 2007, the results of
their operations, the changes in their net assets and the financial highlights
for each of the periods presented in conformity with accounting principles
generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Princeton, New Jersey
September 26, 2007
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NOTICE TO SHAREHOLDERS (UNAUDITED)
For shareholders that do not have a July 31, 2007 tax year end, this notice is
for informational purposes only. For shareholders with a July 31, 2007 tax year
end, please consult your tax adviser as to the pertinence of this notice.
For the fiscal year ended July 31, 2007, each Fund is designating the following
items with regard to distributions paid during the year.
QUALIFIED
DIVIDENDS
AND QUALIFYING
CORPORATE DIVIDEND
15% RATE ORDINARY DIVIDENDS INCOME
LONG-TERM INCOME TAX EXEMPT RECEIVED (15% TAX U.S. QUALIFIED QUALIFIED
CAPITAL GAIN DISTRIBUTIONS INCOME DEDUCTION RATE FOR GOVERNMENT INTEREST SHORT-TERM
FUND DISTRIBUTION (TAX BASIS) DISTRIBUTIONS TOTAL (1) QDI) (2) INTEREST (3) INCOME CAPITAL GAIN
- ------------------------------------------------------------------------------------------------------------------------------------
Balanced ............. 60.25% 39.75% 0.00% 100.00% 39.64% 43.06% 6.09% 55.86% 0.00%
Cognitive Value ...... 68.14% 31.86% 0.00% 100.00% 23.68% 23.32% 0.00% 8.76% 100.00%
Core Equity .......... 0.00% 100.00% 0.00% 100.00% 100.00% 100.00% 0.00% 2.01% 0.00%
International
Opportunities (4).. 59.58% 40.42% 0.00% 100.00% 0.00% 37.22% 0.00% 2.27% 100.00%
Large Cap Growth ..... 0.00% 100.00% 0.00% 100.00% 100.00% 100.00% 0.00% 7.90% 0.00%
Large Cap Value ...... 0.00% 100.00% 0.00% 100.00% 100.00% 100.00% 0.00% 3.17% 0.00%
Small Cap Value ...... 84.68% 15.32% 0.00% 100.00% 64.41% 65.42% 0.00% 15.92% 100.00%
Value Momentum ....... 87.37% 12.63% 0.00% 100.00% 61.32% 73.63% 0.00% 3.19% 0.00%
Capital Growth
Allocation ........ 48.20% 51.80% 0.00% 100.00% 44.16% 65.39% 0.00% 4.91% 0.00%
Diversified Equity
Allocation ........ 31.78% 68.22% 0.00% 100.00% 100.00% 100.00% 0.00% 0.00% 0.00%
Growth & Income
Allocation ........ 35.37% 64.63% 0.00% 100.00% 25.74% 35.62% 2.42% 6.29% 100.00%
Income Plus
Allocation ........... 29.39% 70.61% 0.00% 100.00% 13.38% 12.23% 4.20% 5.99% 100.00%
Bond ................. 0.00% 100.00% 0.00% 100.00% 0.00% 0.00% 11.69% 99.86% 0.00%
California
Intermediate
Tax-Free Bond (5).. 9.32% 0.33% 90.35% 100.00% 0.00% 0.00% 0.00% 100.00% 0.00%
National
Intermediate
Tax-Free Bond ..... 8.31% 0.27% 91.42% 100.00% 0.00% 0.00% 0.00% 99.99% 0.00%
Short Term Bond ...... 0.00% 100.00% 0.00% 100.00% 0.00% 0.00% 4.29% 99.85% 0.00%
California Tax-Free
Money Market (5)... 0.00% 0.55% 99.45% 100.00% 0.00% 0.00% 0.51% 100.00% 0.00%
Diversified Money
Market U.S. Govt ..... 0.00% 100.00% 0.00% 100.00% 0.00% 0.00% 0.00% 99.47% 0.00%
Money Market ...... 0.00% 100.00% 0.00% 100.00% 0.00% 0.00% 2.76% 99.55% 0.00%
100% U.S. Treasury
Money Market (6)... 0.00% 100.00% 0.00% 100.00% 0.00% 0.00% 100.00% 99.40% 0.00%
- --------------------
(1) QUALIFYING DIVIDENDS REPRESENT DIVIDENDS WHICH QUALIFY FOR THE CORPORATE
DIVIDENDS RECEIVED DEDUCTION AND IS REFLECTED AS A PERCENTAGE OF "ORDINARY
INCOME DISTRIBUTIONS."
(2) THE PERCENTAGE IN THIS COLUMN REPRESENTS THE AMOUNT OF "QUALIFYING
DIVIDEND INCOME" AS CREATED BY THE JOBS AND GROWTH TAX RELIEF
RECONCILIATION ACT OF 2003 AND IS REFLECTED AS A PERCENTAGE OF "ORDINARY
INCOME DISTRIBUTIONS." IT IS THE INTENTION OF EACH OF THE AFOREMENTIONED
FUNDS TO DESIGNATE THE MAXIMUM AMOUNT PERMITTED BY THE LAW.
(3) "U.S. GOVERNMENT INTEREST" REPRESENTS THE AMOUNT OF INTEREST THAT WAS
DERIVED FROM DIRECT U.S. GOVERNMENT OBLIGATIONS AND DISTRIBUTED DURING THE
FISCAL YEAR. THIS AMOUNT IS REFLECTED AS A PERCENTAGE OF TOTAL ORDINARY
INCOME DISTRIBUTIONS (THE TOTAL OF SHORT-TERM CAPITAL GAIN AND NET
INVESTMENT INCOME DISTRIBUTIONS). GENERALLY, INTEREST FROM DIRECT U.S.
GOVERNMENT OBLIGATIONS IS EXEMPT FROM STATE INCOME TAX. HOWEVER, FOR
SHAREHOLDERS OF EACH FUND, EXCEPT FOR THE 100% U.S. TREASURY MONEY MARKET
FUND, WHO ARE RESIDENTS OF CALIFORNIA, CONNECTICUT AND NEW YORK, THE
STATUTORY THRESHHOLD REQUIREMENTS WERE NOT SATISFIED TO PERMIT EXEMPTION
OF THESE AMOUNTS FROM STATE INCOME.
(4) THE FUND INTENDS TO PASS THROUGH A FOREIGN TAX CREDIT TO THE SHAREHOLDERS.
FOR THE FISCAL YEAR ENDED 2007, THE TOTAL AMOUNT OF FOREIGN SOURCE INCOME
IS $5,032,127. THE TOTAL AMOUNT OF FOREIGN TAX TO BE PAID IS $178,593.
YOUR ALLOCABLE SHARE OF THE FOREIGN TAX CREDIT WILL BE REPORTED ON FORM
1099 DIV.
(5) FOR RESIDENTS OF CALIFORNIA: THE CALIFORNIA INTERMEDIATE TAX-FREE BOND
FUND AND THE CALIFORNIA TAX-FREE MONEY MARKET FUND MET THE QUARTERLY
DIVERSIFICATION TEST FOR THE FISCAL YEAR ENDED JULY 31, 2007.
(6) FOR RESIDENTS OF CALIFORNIA, CONNECTICUT AND NEW YORK: THE 100% U.S.
TREASURY MONEY MARKET FUND MET THE QUARTERLY DIVERSIFICATION TEST FOR THE
FISCAL YEAR ENDED JULY 31, 2007. ALL INCOME EARNED BY THE 100% U.S.
TREASURY MONEY MARKET FUND IS DESIGNATED TAX EXEMPT INCOME FOR STATE
INCOME TAX PURPOSES.
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TRUSTEES AND OFFICERS (UNAUDITED)
Information pertaining to the trustees and officers of HighMark Funds (the
"Trust") is set forth below. Trustees who are not deemed to be "interested
persons" of the Trust as defined in the Investment Company Act of 1940, as
amended, are referred to as "Independent Board Members." Trustees who are deemed
to be "interested persons" of the Trust are referred to as "Interested Board
Members." Currently, the Trust does not have any Interested Board Members. The
SAI includes additional information about Fund directors. The SAI is available
upon request, by calling 1-800-433-6884. The following trustees and officers
list is current as of September 26, 2007.
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TERM OF NUMBER OF PORTFOLIOS
OFFICE IN HIGHMARK
AND PRINCIPAL FUNDS OTHER
POSITION(S) LENGTH OF OCCUPATION(S) COMPLEX DIRECTORSHIPS
NAME, HELD WITH TIME DURING PAST OVERSEEN HELD BY
ADDRESS AND AGE THE TRUST SERVED 2 5 YEARS BY BOARD MEMBER 3 BOARD MEMBER 4
- ---------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT BOARD MEMBERS
- -------------------------
David Benkert Trustee Since 03/04 From April 1, 1992 to present, 22 None
50 Principal, Navigant Consulting,
Inc. (Financial Consulting --
Healthcare).
Thomas L. Braje Trustee, Vice Since 06/87 Prior to retirement in October 22 None
64 Chairman 1996, Vice President and Chief
Financial Officer of Bio Rad
Laboratories, Inc.
David A. Goldfarb Trustee Since 06/87 Partner, Goldfarb & Simens, 22 None
65 Certified Public Accountants.
Joseph C. Jaeger Trustee, Since 06/87 Prior to retirement in June 1998, 22 None
72 Chairman Senior Vice President and Chief
Financial Officer, Delta Dental
Plan of California.
Michael L. Noel Trustee Since 12/98 President, Noel Consulting Company 22 Avista Corp.
66 since 1998. Senior Advisor, Saber (AVA)
Partners (financial advisory firm)
since 2002. Member, Board of
Directors, Avista Corp. (utility
company), since January 2004.
Member, Board of Directors, SCAN
Health Plan, since 1997. From
April 1997 to December 1998,
Member of HighMark Funds Advisory
Board.
Robert M. Whitler Trustee Since 12/98 Prior to retirement in 1996, 22 None
68 Executive Vice President and Chief
Trust Officer of Union Bank of
California, N.A. From April 1997
to December 1998, Member of
HighMark Funds Advisory Board.
From April 1997 to April 2002,
Director, Current Income Shares,
Inc.(closed-end investment
company).
OFFICERS
- --------
Earle A. Malm II President Since 12/05 Chairman of the Board of the N/A N/A
350 California Street Adviser since February 2005.
San Francisco, CA President, Chief Executive Officer
94104 and Director of the Adviser since
57 October 2002. From January 2001 to
December 2002, President of NVMLI
(mort gage marketing). From
January 2001 to December 2001,
Vice Chairman and Advisor of Value
Click (internet technology).
James F. Volk, CPA Controller and Since 09/07 Senior Operations Officer, SEI N/A N/A
One Freedom Chief Financial Investments, Fund Accounting and
Valley Drive Officer Administration (1996-Present);
Oaks, PA 19456 Assistant Chief Accountant of the
44 U.S. Securities and Exchange
Commission's Division of
Investment Management (1993-1996).
- ----------
1 Each trustee may be contacted by writing to the Trustee c/o HighMark
Funds, One Freedom Valley Drive, Oaks, PA 19456.
2 Each trustee shall hold office during the lifetime of the Trust until the
election and qualification of his or her successor, or until he or she
sooner dies, resigns or is removed in accordance with the Trust's
Declaration of Trust. The president, treasurer and secretary shall hold
office for a one year term and until their respective successors are
chosen and qualified, or in each case until he or she sooner dies,
resigns, is removed, or becomes disqualified in accordance with the
Trust's by-laws.
3 The "HighMark Funds Complex" consists of all registered investment
companies for which HighMark Capital Management, Inc. serves as investment
adviser. As of July 31, 2007, the HighMark Funds Complex consisted of 22
Funds.
4 Directorships of companies required to report to the Securities and
Exchange Commission under the Securities Exchange Act of 1934 (i.e.,
"public companies") or other investment companies registered under the
1940 Act.
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OFFICERS (UNAUDITED) (CONCLUDED)
- ---------------------------------------------------------------------------------------------------------------------------------
TERM OF NUMBER OF PORTFOLIOS
OFFICE IN HIGHMARK
AND PRINCIPAL FUNDS OTHER
POSITION(S) LENGTH OF OCCUPATION(S) COMPLEX DIRECTORSHIPS
NAME, HELD WITH TIME DURING PAST OVERSEEN HELD BY
ADDRESS AND AGE THE TRUST SERVED 5 YEARS BY BOARD MEMBER 1 BOARD MEMBER 2
- ---------------------------------------------------------------------------------------------------------------------------------
Pamela O'Donnell Treasurer Since 12/05 Vice President and Director of N/A N/A
350 California Street Mutual Funds Administration since
San Francisco, CA 2003. Vice President of Operations
94104 and Client Service of the Adviser
43 from 2003 to 2005. Vice President
of Finance and Administration of
MiFund, Inc. from March 2000 to
May 2002.
Catherine Vacca Chief Since 9/04 Senior Vice President and Chief N/A N/A
350 California Street Compliance Compliance Officer of the Adviser
San Francisco, CA 94111 Officer since July 2004. From December
50 2002 to July 2004, Vice President
and Chief Compliance Officer,
Wells Fargo Funds Management, LLC.
From November 2000 to February
2002, Vice President and Head of
Fund Administration, Charles
Schwab & Co., Inc.
R. Gregory Knopf Vice President Since 9/04 Managing Director of the Adviser N/A N/A
445 S. Figueroa Street & Assistant since 1998.
Suite #306 Secretary
Los Angeles, CA 90071
57
Timothy D. Barto Vice President Since 03/00 Vice President and Assistant N/A N/A
One Freedom & Assistant Secretary of the Administrator
Valley Drive Secretary since December 1999. Vice
Oaks, PA 19456 President and Assistant Secretary
39 of the Distributor from 1999 to
2004.
Sofia A. Rosala Vice President Since 3/05 Vice President & Assistant N/A N/A
One Freedom & Assistant Secretary of SEI Investments
Valley Drive Secretary Global Funds Services (2005-2007).
Oaks, PA 19456 Compliance Officer of SEI
33 Investments (2001-2004).
James Ndiaye Vice President Since 3/05 Vice President & Assistant N/A N/A
One Freedom & Assistant Secretary of SEI Investments
Valley Drive Secretary Global Funds Services since 2005.
Oaks, PA 19456 Vice President, Deutsche Asset
34 Management (2003-2004). Associate,
Morgan, Lewis and Bockius LLP
(2000-2003).
Michael T. Pang Vice President Since 3/05 Vice President & Assistant N/A N/A
One Freedom & Assistant Secretary of SEI Investments
Valley Drive Secretary Global Funds Services since 2005.
Oaks, PA 19456 Counsel, Caledonian Bank & Trust's
35 Mutual Fund Group (2004-2005).
Counsel, Permal Asset Management
(2001-2004).
1 The "HighMark Funds Complex" consists of all registered investment
companies for which HighMark Capital Management, Inc. serves as investment
adviser. As of July 31, 2007, the HighMark Funds Complex consisted of 22
Funds.
2 Directorships of companies required to report to the Securities and
Exchange Commission under the Securities Exchange Act of 1934 (i.e.,
"public companies") or other investment companies registered under the
1940 Act.
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BOARD APPROVAL OF THE EXISTING ADVISORY AND
SUB-ADVISORY AGREEMENTS (UNAUDITED)
The Board of Trustees, which consists entirely of trustees who are not
"interested persons" (as defined in the Investment Company Act of 1940) of
HighMark, the Adviser or the sub-advisers of the Funds ("Independent Trustees"),
considers matters bearing on the advisory agreement between HighMark and the
Adviser (the "Investment Advisory Agreement") and the sub-advisory agreements
that relate to the Funds at most of its meetings throughout the year.
Once a year, usually in the summer, the Board of Trustees meets to extensively
review the Investment Advisory Agreement and the sub-advisory agreements (unless
with respect to any agreement it is still within the first year of its initial
term) to determine whether to approve the continuation of the agreements for an
additional one-year period. In connection with these annual determinations, the
Trustees receive materials that the Adviser and the Funds' sub-advisers believe
to be reasonably necessary for the Trustees to evaluate the agreements. These
materials generally include, among other items,
o information on the investment performance of the Funds and the
performance of peer groups of mutual funds and the Funds'
performance benchmarks,
o information on the Funds' advisory and sub-advisory fees and other
expenses, including information comparing the Funds' expenses to
those of peer groups of mutual funds and information about any
applicable expense caps and fee "breakpoints" (fee rates that
decline as Fund assets reach higher levels),
o sales and redemption data for the Funds,
o information about the profitability of the Adviser and the
sub-advisers with respect to their provision of services to the
Funds and
o information obtained through the completion of an informational
questionnaire sent to the Adviser and the sub-advisers by the
Trustees.
The Board of Trustees may also consider other material facts such as:
o the Adviser's and the sub-advisers' financial results and financial
condition,
o the size, education and experience of the Adviser's and each
sub-adviser's investment staff and their use of technology, external
research and trading cost measurement tools,
o the procedures employed to determine the value of the Funds' assets,
o the allocation of the Funds' brokerage, if any, including
allocations to brokers affiliated with the Adviser or any
sub-adviser and the use of "soft" commission dollars to pay for
research services for the Adviser and the sub-advisers,
o the Adviser's and the sub-advisers' resources devoted to, and record
of compliance with, the Funds' investment policies and restrictions,
policies on personal securities transactions and other compliance
policies and
o the economic outlook generally and for the mutual fund industry in
particular.
Throughout the process, the Trustees are afforded the opportunity to ask
questions of and request additional materials from the Adviser and the
sub-advisers. The Trustees also meet with, and ask questions of, representatives
of the Adviser and the sub-advisers, either in person or by conference
telephone. As a consequence of this process, the Trust has in the past removed
sub-advisers that have underperformed and has effected other changes in Fund
portfolio management.
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BOARD APPROVAL OF THE EXISTING ADVISORY AND
SUB-ADVISORY AGREEMENTS (UNAUDITED) (CONTINUED)
The Board of Trustees most recently approved the continuation of the Investment
Advisory Agreement with respect to all of the Funds and the sub-advisory
agreements that relate to each of the Funds that have sub-advisers (the
Investment Advisory Agreement, collectively with such sub-advisory agreements,
the "Agreements") at meetings held on June 28-29, 2007.
In considering whether to approve the continuation of the Agreements at the
meetings held on June 28-29, 2007, the Board of Trustees did not identify any
single factor as determinative. Matters considered by the Trustees in connection
with their approval of the Agreements included the following:
THE NATURE, EXTENT AND QUALITY OF THE SERVICES PROVIDED TO THE FUNDS UNDER THE
AGREEMENTS. The Trustees considered the nature, extent and quality of the
services provided by the Adviser, Bailard, Inc., Aronson+Johnson+Ortiz, LP and
LSV Asset Management (collectively, the "Managers") and their affiliates to the
Funds and the resources dedicated to the Funds by the Managers and their
affiliates. The Trustees considered not only the advisory services provided by
the Managers to the Funds, but also the monitoring and oversight services
provided by the Adviser with respect to the sub-advised Funds. For each Fund,
the Trustees also considered the benefits to shareholders of investing in a
mutual fund that is part of a family of funds offering a variety of investment
disciplines and providing for a variety of fund and shareholder services. After
reviewing these and related factors and discussions with Fund management, the
Trustees concluded, within the context of their overall conclusions regarding
each of the Agreements, that the nature, extent and quality of services provided
supported the renewal of the Agreements.
INVESTMENT PERFORMANCE OF THE FUNDS AND THE MANAGERS. As noted above, the
Trustees received information about the performance of the Funds over various
time periods, including information which compared the performance of the Funds
to the performance of peer groups of funds and the Funds' respective performance
benchmarks. In addition, the Trustees held various discussions with the Managers
about Fund performance, and such discussions with the Adviser occurred at each
regular board meeting throughout the year. With respect to each Fund, the Board
concluded that the Fund's performance supported the renewal of the Agreement(s)
relating to that Fund. In the case of each Fund that had performance that lagged
that of a relevant peer group for certain (although not necessarily all) periods
considered, the Board concluded that other factors relevant to performance
supported renewal of the Agreements. These factors varied from Fund to Fund, but
included one or more of the following: (1) that the Fund's performance, although
lagging in certain recent periods, was strong over the longer term; (2) that the
underperformance was attributable, to a significant extent, to investment
decisions by the Fund's Manager(s) that were reasonable and consistent with the
Fund's investment objective and policies; (3) that the Fund's performance was
competitive when compared to other relevant performance benchmarks or peer
groups; and (4) that the Fund's Manager(s) have taken or are taking steps
designed to help improve the Fund's investment performance. The Trustees also
noted that some Funds were recently formed and therefore performance comparisons
were unavailable or related to a time period that was too short for a comparison
to be meaningful. In addition, the Trustees noted that some of the Funds have
sub-advisers or portfolio managers who have been managing the Fund for a limited
period of time, and that the long-term investment performance of those Funds is
not entirely attributable to the current sub-adviser's or portfolio managers'
efforts. In such circumstances, the Trustees paid particular attention to the
Fund's investment performance during the period for which the current
sub-adviser or portfolio managers have managed the Fund. The Trustees also
considered each Manager's performance and reputation generally, the Funds'
performance as a fund family generally, and the historical responsiveness of the
Managers to Trustee concerns about performance and the willingness of the
Managers to take steps intended to improve performance. After reviewing these
and related factors and discussions with Fund management, the Trustees
concluded, within the context of their overall conclusions regarding each of the
Agreements, that the performance of the Funds and the Managers supported the
renewal of the Agreements.
THE COSTS OF THE SERVICES TO BE PROVIDED AND PROFITS TO BE REALIZED BY THE
MANAGERS AND THEIR AFFILIATES FROM THEIR RESPECTIVE RELATIONSHIPS WITH THE
FUNDS. The Trustees considered and had discussions with Fund management
regarding the fees charged
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to the Funds for advisory and sub-advisory services as well as the total expense
levels of the Funds. This information included comparisons of the Funds'
advisory fees and total expense levels to those of their peer groups and
information about the advisory fees charged by the Managers to other funds and
accounts with similar investment programs, if any. In considering the fees
charged to such other funds or accounts, the Trustees considered, among other
things, the differences between managing mutual funds as compared to other types
of accounts, including the additional resources required to manage mutual fund
assets effectively. In evaluating each Fund's advisory fees (and sub-advisory
fees, if any), the Trustees also took into account the demands, complexity and
quality of the investment management of such Fund. The Trustees also considered
any compensation received by the Managers and their affiliates from the Funds
for providing services other than advisory or sub-advisory services. The
Trustees reviewed information provided by the Managers as to the profitability
of the Managers' and their affiliates' relationships with the Funds, and
information about the allocation of expenses used to calculate profitability.
When reviewing profitability, the Trustees also considered information about the
performance of the relevant Funds, the expense levels of the Funds, and whether
the Managers had implemented breakpoints in their fee schedules and/or expense
caps with respect to such Funds. After reviewing these and related factors and
discussions with Fund management, the Trustees concluded, within the context of
their overall conclusions regarding each of the Agreements, that the advisory
fees charged to each of the Funds were fair and reasonable, and that the costs
of these services generally and the related profitability of the Managers and
their affiliates in respect of their relationships with the Funds supported the
renewal of the Agreements.
ECONOMIES OF SCALE. The Trustees considered the existence of any economies of
scale (i.e. decreasing per unit costs as a Fund increases in asset size) in the
provision of services by the Managers and whether those economies are shared
with the Funds through breakpoints in their investment advisory fees or other
means, such as expense waivers. The Trustees noted that at least one share class
in each of the Funds benefited from expense caps, and that some Funds had
multiple share classes that benefited from expense caps. In considering these
issues, the Trustees also took note of the costs of the services provided (both
on an absolute and a relative basis) and the profitability to the Managers and
their affiliates of their relationships with the Funds, as discussed above.
Finally, the Trustees noted the proposal by the Adviser to cease providing the
0.025% voluntary fee waiver currently in effect to all of the Funds effective as
of December 1, 2007. After reviewing these and related factors and discussions
with Fund management, the Trustees considered, within the context of their
overall conclusions regarding each of the Agreements, that the extent to which
any economies of scale are shared with the Funds supported the renewal of the
Agreements.
The Trustees also considered other factors, which included but were not limited
to the following:
o whether each Fund has operated in accordance with its investment
objective and the Fund's record of compliance with its investment
policies and restrictions, and the compliance programs of the Funds
and the Managers.
o the nature, quality, cost and extent of administrative, custody,
securities lending and shareholder services performed by the Adviser
and its affiliates, both under the applicable Agreement and under
other separate agreements with or with respect to HighMark.
o so-called "fallout benefits" to the Managers, such as the engagement
of affiliates of the Adviser to provide custody, securities lending,
administration and other services to the Funds, and the benefits of
investment research provided to the Managers by reason of brokerage
commissions generated by the Funds' securities transactions. The
Trustees considered the possible conflicts of interest associated
with these fallout and other benefits, and the reporting, disclosure
and other processes in place to disclose and monitor such possible
conflicts of interest.
Based on their evaluation of all factors that they deemed to be material,
including those factors described above, and assisted by the advice of
independent counsel, the Trustees concluded that the Agreements should be
continued with respect to the Funds through July 31, 2008.
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FUND INFORMATION
HighMark Funds is committed to managing our mutual funds in the best interests
of our shareholders. The Board of Trustees of HighMark Funds has delegated the
authority to vote proxies on behalf of the Funds that own voting securities to
the Adviser. The Board has authorized the Adviser to delegate proxy voting
authority with respect to a Fund to that Fund's sub-adviser. A description of
the proxy voting guidelines and policies that the Funds use to determine how to
vote proxies relating to portfolio securities is available (i) without charge,
upon request by calling our investor services desk at 1-800-433-6884; (ii) on
the SEC's website at http://www.sec.gov; and (iii) on HighMark Funds' website at
http://www.highmarkfunds.com. Information relating to how a Fund voted proxies
relating to portfolio securities during the most recent 12-month period ended
June 30 is available (i) without charge, upon request by calling our investor
services desk at 1-800-433-6884; (ii) on the SEC's website at
http://www.sec.gov; and (iii) on the HighMark Funds' website at
http://www.highmarkfunds.com. The Trust files its complete schedule of portfolio
holdings with the Securities and Exchange Commission for the first and third
quarters of each fiscal year on Form N-Q within sixty days after the end of the
period. The Funds' Forms N-Q are available (i) without charge upon request by
calling our investor services desk at 1-800-433-6884; (ii) on the Commission's
website at http://www.sec.gov; (iii) on the HighMark Funds' website at
http://www.highmarkfunds.com; and (iv) 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.
FIDUCIARY SHARES INFORMATION
FUND CUSIP TICKER FUND #
Balanced 431114792 HMBAX 491
Cognitive Value 431112390 HCLFX 2209
Core Equity 431112788 HMCFX 1627
Enhanced Growth 431112358 HEGFX 2210
International Opportunities 431112341 HIOFX 2211
Large Cap Growth 431114818 HMGRX 492
Large Cap Value 431114206 HMIEX 490
Small Cap Advantage 431112465 HSAFX 2214
Small Cap Value 431112101 HMSCX 148
Value Momentum 431114677 HMVMX 871
Capital Growth Allocation Fund 431112283 HGAFX 2198
Diversified Equity Allocation Fund 431112317 HEAFX 2195
Growth & Income Allocation Fund 431112325 HGIFX 2197
Income Plus Allocation Fund 431112333 HPAFX 2196
Bond 431114305 HMBDX 489
CA Intermediate Tax-Free Bond 431114644 HMITX 847
National Intermediate Tax-Free Bond 431112655 HMNTX 1600
Short Term Bond 431112549 HMSFX 1506
CA Tax-Free Money Market 431114842 HMCXX 487
Diversified Money Market 431114883 HMDXX 484
U.S. Government Money Market 431114701 HMGXX 485
100% U.S. Treasury Money Market 431114503 HMTXX 486
RETAIL SHARES INFORMATION
Balanced
Class A Shares 431114776 HMBRX 480
Class B Shares 431114545 HMBBX 452
Class C Shares 431112887 HMBCX 1760
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RETAIL SHARES INFORMATION (CONTINUED)
FUND CUSIP TICKER FUND #
Cognitive Value
Class A Shares 431112432 HCLAX 2203
Class C Shares 431112424 HCLCX 2206
Core Equity
Class A Shares 431112770 HCEAX 1626
Class B Shares 431112762 HCEBX 1628
Class C Shares 431112754 HCECX 1632
Enhanced Growth
Class A Shares 431112382 HEHAX 2204
Class C Shares 431112374 HEGCX 2207
International Opportunities
Class A Shares 431112481 HIOAX 2205
Class C Shares 431112473 HITCX 2208
Large Cap Growth
Class A Shares 431114768 HMRGX 481
Class B Shares 431114511 HMGBX 455
Class C Shares 431112879 HGRCX 1755
Large Cap Value
Class A Shares 431114784 HMERX 479
Class B Shares 431114537 HIEBX 457
Class C Shares 431112861 HIECX 1754
Small Cap Advantage
Class A Shares 431112457 HSAAX 2212
Class C Shares 431112440 HSCAX 2213
Small Cap Value
Class A Shares 431112200 HASVX 41
Class B Shares 431112309 HBSVX 123
Class C Shares 431112820 HSVCX 1756
Value Momentum
Class A Shares 431114628 HMVLX 870
Class B Shares 431114529 HVMBX 456
Class C Shares 431112812 HVMCX 1753
Capital Growth Allocation
Class A Shares 431112564 HMAAX 1494
Class C Shares 431112556 HMACX 1497
Diversified Equity Allocation
Class A Shares 431112275 HEAAX 2193
Class C Shares 431112291 HEACX 2194
Growth & Income Allocation
Class A Shares 431112580 HMRAX 1493
Class C Shares 431112572 HMRCX 1496
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FUND INFORMATION (CONCLUDED)
RETAIL SHARES INFORMATION (CONTINUED)
FUND CUSIP TICKER FUND #
Income Plus Allocation
Class A Shares 431112614 HMPAX 1495
Class C Shares 431112598 HMPCX 1498
Bond
Class A Shares 431114743 HMRBX 478
Class B Shares 431112747 HBDBX 1090
Class C Shares 431112648 HBDCX 1492
CA Intermediate Tax-Free Bond
Class A Shares 431114578 HMCIX 846
Class B Shares 431112796 HCABX 1761
Class C Shares 431112630 HCTCX 1491
National Intermediate Tax-Free Bond
Class A Shares 431112663 HMNFX 1598
Class C Shares 431112622 HNTCX 1490
Short Term Bond
Class A Shares 431112523 HMSAX 1505
Class C Shares 431112515 HMTCX 1470
CA Tax-Free Money Market
Class A Shares 431114859 HMAXX 476
Diversified Money Market
Class A Shares 431114800 HMVXX 473
U.S. Government Money Market
Class A Shares 431114602 HMUXX 474
Class B Shares 431114495 HGBXX 450
Class C Shares 431112531 HGTXX 1499
100% U.S. Treasury Money Market
Class A Shares 431114404 HMRXX 475
CLASS S SHARES INFORMATION
CA Tax-Free Money Market
Class S Shares 431112705 HCSXX 1727
Diversified Money Market
Class S Shares 431112408 HDSXX 1728
U.S. Government Money Market
Class S Shares 431112507 HGSXX 1729
100% U.S. Treasury Money Market
Class S Shares 431112606 HUSXX 1730
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CLASS M SHARES INFORMATION
FUND CUSIP TICKER FUND #
Cognitive Value
Class M Shares 431112416 HCLMX 2200
Enhanced Growth
Class M Shares 431112366 HEGMX 2201
International Opportunities
Class M Shares 431112499 HIOMX 2202
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NOTES
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158 1.800.433.6884
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NOTES
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SERVICE PROVIDERS & BOARD OF TRUSTEES
INVESTMENT ADVISER & ADMINISTRATOR
HighMark Capital Management, Inc.
350 California Street
San Francisco, CA 94104
SUB-ADVISERS
Cognitive Value Fund,
Enhanced Growth Fund and
International Opportunities Fund:
Bailard, Inc.
950 Tower Lane, Suite 1900
Foster City, CA 94404-2131
Large Cap Value Fund:
Aronson+Johnson+Ortiz, LP
230 South Broad Street, 20th Floor
Philadelphia, PA 19102
Small Cap Value Fund:
LSV Asset Management
One North Wacker Drive, Suite 4000
Chicago, IL 60606
CUSTODIAN
Union Bank of California, N.A.
350 California Street
San Francisco, CA 94104
DISTRIBUTOR
SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, PA 19456
LEGAL COUNSEL
Ropes & Gray LLP
One Embarcadero Center, Suite 2200
San Francisco, CA 94111
AUDITORS
Deloitte & Touche LLP
750 College Road
Princeton, NJ 08535
TRANSFER AGENT
State Street Bank and Trust Co.
PO Box 8416
Boston, MA 02266
BOARD OF TRUSTEES
Joseph C. Jaeger, Chairman
Thomas L. Braje, Vice Chairman
David Benkert
David A. Goldfarb
Michael L. Noel
Robert M. Whitler
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--------------------------------------------------------
TO LEARN MORE ABOUT HIGHMARK, VISIT US AT
WWW.HIGHMARKFUNDS.COM OR CALL:
INVESTOR SERVICES DESK
1.800.433.6884
INVESTMENT PROFESSIONAL SUPPORT DESK
1.800.455.5609
THANK YOU
FOR YOUR INVESTMENT.
[HIGHMARK FUNDS LOGO OMITTED](R)
------------------------------
Mutual Funds:
o are not FDIC insured
o have no bank guarantee
o may lose value
------------------------------
[HIGHMARK FUNDS LOGO OMITTED](R)
445 South Figueroa Street o Suite 306 o Los Angeles o California o 90071
WWW.HIGHMARKFUNDS.COM
HMK-AR-002-0500
84806 (07/07)
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics that applies to the registrant's
principle executive officer, principle financial officer, controller or
principle accounting officer and any person who performs a similar function.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a)(1) The registrant's board of trustees has determined that the registrant has
at least one audit committee financial expert serving on the audit committee.
(a)(2) The audit committee financial experts are David A. Goldfarb and Robert M.
Whitler and are independent as defined in Form N-CSR Item 3(a)(2).
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Fees billed by Deloitte & Touche LLP related to the Trust
Deloitte & Touche LLP billed the Trust aggregate fees for services rendered to
the Trust for the last two fiscal years as follows:
- ------------------ ----------------------------------------------------- -----------------------------------------------------
2007 2006
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
All fees and All fees and All other fees All fees and All fees and All other fees
services to the services to and services to services to the services to and services to
Trust that were service service Trust that were service service
pre-approved affiliates that affiliates that pre-approved affiliates that affiliates that
were did not require were did not require
pre-approved pre-approval pre-approved pre-approval
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(a) Audit $422,000 N/A N/A $389,500 N/A N/A
Fees (1)
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(b) Audit- $27,400 N/A N/A $25,200 N/A N/A
Related
Fees (2)
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(c) Tax $74,400 N/A N/A $68,000 N/A N/A
Fees (3)
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(d) All $ 0 N/A N/A $ 0 N/A N/A
Other
Fees
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
Notes:
(1) Audit fees include amounts related to the audit of the registrant's
annual financial statements and services normally provided by the
accountant in connection with statutory and regulatory filings.
(2) The above "Audit-Related Fees" were billed for three security count
verifications for the Funds as required under section (f) of Rule 17f-2
of the Investment Company Act of 1940 (the "Act").
(3) Tax fees represent fees paid for the review of Federal and state income
and excise tax returns for certain Funds within the Trust.
(e)(1) To the extent required by applicable law, the Trust's audit committee
approves, in advance, the engagement of all audit and non-audit
services rendered to the Trust by the Trust's independent registered
public accounting firm and all non-audit services rendered by the
Trust's independent registered public accounting firm to the investment
adviser and to certain of the investment adviser's affiliates;
provided, however, that the audit committee may implement policies and
procedures pursuant to which such services are pre-approved other than
by the full audit committee, subject to subsequent reporting of any
such pre-approvals to the audit committee (generally at the audit
committee's next regular meeting).
(e)(2) Percentage of fees billed applicable to non-audit services pursuant to
waiver of pre-approval requirement were as follows:
------------------------ ----------------- ----------------
2007 2006
------------------------ ----------------- ----------------
Audit-Related Fees 0% 0%
------------------------ ----------------- ----------------
Tax Fees 0% 0%
------------------------ ----------------- ----------------
All Other Fees 0% 0%
------------------------ ----------------- ----------------
(f) Hours expended as part of the financial statement audit were all by
Deloitte & Touche LLP employees.
(g) The aggregate non-audit fees and services billed by Deloitte & Touche
LLP for the last two fiscal years were $101,800 and $93,200 for 2007 and 2006,
respectively.
(h) Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to open-end management investment companies.
ITEM 6. SCHEDULE OF INVESTMENTS
Included as part of Item 1 above.
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.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's board of directors, in cases where
those changes were implemented after the Funds last provided disclosure in
response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A or this
Item.
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 second fiscal quarter of the period
covered by this report that have materially affected, or are reasonably likely
to materially affect, the registrant's internal control over financial
reporting.
ITEMS 12. EXHIBITS.
(a)(1) Code of Ethics attached hereto.
(a)(2) A separate certification for the principal executive officer and the
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), are filed
herewith.
(b) Officer certifications as required by Rule 30a-2(b) under the Investment
Company Act of 1940, as amended (17 CFR 270.30a-2(b)), also accompany this
filing as an Exhibit.
- --------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) HighMark Funds
By (Signature and Title)* /s/ Earle A. Malm II
--------------------
Earle A. Malm II, President
Date: October 2, 2007
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/ Earle A. Malm II
--------------------
Earle A. Malm II, President
Date: October 2, 2007
By (Signature and Title)* /s/ James F. Volk
-----------------
James F. Volk, Controller
and Chief Financial Officer
Date: October 2, 2007
* Print the name and title of each signing officer under his or her signature.