UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-CSR
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CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
INVESTMENT COMPANY ACT FILE NUMBER 811-0792
CNI CHARTER FUNDS
(Exact name of registrant as specified in charter)
--------
400 North Roxbury Drive
Beverly Hills, CA 90210
(Address of principal executive offices) (Zip code)
SEI Investments Distributors
1 Freedom Valley Drive
Oaks, PA 19456
(Name and address of agent for service)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 1-888-889-0799
DATE OF FISCAL YEAR END: SEPTEMBER 30, 2008
DATE OF REPORTING PERIOD: SEPTEMBER 30, 2008
ITEM 1. REPORTS TO STOCKHOLDERS.
(CNI CHARTER FUNDS(SM) LOGO)(LOGO)
(GRAPHIC)
2008 ANNUAL REPORT
September 30, 2008
This report and the financial statements contained herein are provided for the
general information of the shareholders of the CNI Charter Funds. This report is
not authorized for distribution to prospective investors in the CNI Charter
Funds unless preceded or accompanied by an effective prospectus. Please remember
that past performance is no guarantee of future results.
Shares of CNI Charter Funds are not deposits or obligations of any bank, are not
guaranteed by any bank, are not insured by the FDIC or any other agency and
involve investment risks, including the possible loss of the principal amount
invested.
TABLE OF CONTENTS
CNI Charter Funds Annual Report
2 Letter to Our Shareholders
4 Equity Funds Investment Adviser's Report
7 Equity Funds Overview
12 Fixed Income Funds Investment Adviser's Report
14 Fixed Income Funds Overview
18 Money Market Funds Investment Adviser's Report
20 Schedules of Investments
64 Statements of Assets & Liabilities
67 Statements of Operations
70 Statements of Changes in Net Assets
74 Financial Highlights
77 Notes to Financial Statements
85 Report of Independent Registered Public Accounting Firm
86 Trustees and Officers
89 Notice to Shareholders
90 Disclosure of Fund Expenses
92 Board Approval of Investment Advisory Agreements
The Funds file their complete schedules of portfolio holdings with the
Securities and Exchange Commission for the first and third quarters of each
fiscal year on Form N-Q within sixty days after the end of the period. The
Funds' Form N-Q is available on the Commission's website at http://www.sec.gov,
and may be reviewed and copied at the Commission's Public Reference Room in
Washington, DC. Information on the operation of the Public Reference Room may be
obtained by calling 1-800-SEC-0330. The most current Form N-Q is also available
on the Funds' website at www.cnicharterfunds.com and without charge, upon
request, by calling 1-888-889-0799.
A description of the policies and procedures that the Funds use to determine how
to vote proxies relating to the Funds' portfolio securities, and information on
how the Funds voted proxies relating to portfolio securities during the most
recent 12-month period ending June 30 is available (1) without charge, upon
request, by calling 1-888-889-0799, (2) on the Funds' website at
www.cnicharterfunds.com, and (3) on the Securities and Exchange Commission's
website at www.sec.gov.
CNI CHARTER FUNDS | PAGE 1
letter to our shareholders
SEPTEMBER 30, 2008
This annual report covers the CNI Charter Funds for the fiscal year ended
September 30, 2008. On the following pages, you will find the specific details
of each Fund's portfolio and investment performance.
Our unique philosophy and disciplined approach to capital market investment
continued to show well over the last twelve months. Despite significant turmoil
in the global financial markets and extreme price dislocations, strict adherence
to our underlying investment philosophy proved successful once again.
The past twelve months witnessed an otherwise innocuous slowdown in global
economic growth that was interrupted and exacerbated by a credit and liquidity
crisis of historic proportions. The financial markets virtually came to a halt
during the final weeks of this fiscal year (mid-September), demanding
significant and repeated intervention by the central banking authorities around
the world. Fears of a global financial meltdown, not seen since the Great
Depression, were further fueling a "flight to quality" in the investment markets
that pushed pricing to extreme levels. At one end of the spectrum, gold and
short-term U.S. Treasury bill prices were driven to all time highs, while
virtually all other asset classes were discarded. Consumer and investor
confidence hit all-time lows and drove risky-asset prices to extreme levels.
"AA"-rated debt spreads widened to junk bond levels. Stock prices plummeted
around the world, led by the emerging markets, which slid by 50-70% in a matter
of weeks.
During this period, the only safe havens were in the fixed income markets, as
equity, commodity, and other risky-asset prices tumbled:
Twelve-Month October 2007 -
Index Watch: September 2008
- ------------ --------------
EQUITIES:
S&P 500 Stock Index ................... - 22.0%
Russell 2000 Small Cap Index .......... - 14.5%
MSCI EAFE Index ....................... - 30.51%
Dow Jones AIG Commodity Index ......... - 3.7%
Twelve-Month October 2007 -
Index Watch: September 2008
- ------------ --------------
BONDS:
Barclays U.S. Government/Credit
Bond Index ......................... +2.4%
Barclays U.S. Aggregate Bond Index .... +3.7%
Barclays CA Intermediate Muni Index ... +2.5%
City National Asset Management, Inc.'s underlying investment philosophy is to
pursue the long-term goals and objectives specified for each of the Funds. With
an active yet disciplined style, all Funds are managed to achieve competitive
rates of return consistent with their respective, prescribed risk parameters.
CNI Charter Funds follow a disciplined investment process that begins with a
thorough assessment of the macroeconomic environment and the financial markets.
Our broad based research process takes advantage of the most advanced investment
technology, fundamental valuation, and quantitative tools to determine the most
attractive sectors and securities within each Fund's area of concentration. The
final step is to construct and continuously monitor precise portfolios that meet
the objectives of the specific Funds, without being swayed by short-term trends
and fads. This approach continued to serve shareholders well during the maturing
phase of this economic cycle encountered in the period ended September 30, 2008.
CNI CHARTER FUND PERFORMANCE AND HIGHLIGHTS
(ALL RETURNS LISTED REFER TO INSTITUTIONAL CLASS SHARES)
By adhering to our basic investment discipline and maintaining the appropriate
amount of risk control in the various portfolios, the Funds continued to provide
returns that are competitive in their respective investment arenas.
Although our equity funds dropped in value during the year ending September 30,
2008, two showed extremely well vis-a-vis their respective investment
benchmarks, outperforming by over 300 basis points.
CNI CHARTER FUNDS | PAGE 2
Our LARGE CAP GROWTH EQUITY FUND lost 16.4% over the twelve-month period, versus
a 19.4% loss for its S&P/Citigroup Growth Index benchmark. The LARGE CAP VALUE
EQUITY FUND lost 21.6% vis-a-vis a 24.5% loss for its S&P 500/Citigroup Value
Index benchmark. The RCB SMALL CAP VALUE EQUITY FUND was hardest hit during this
tumultuous period and showed a 35.0% drop in value.
Our newly minted MULTI-ASSET FUND, designed to buffer against the harmful
effects of a bear market did just that during the period, and showed a 9.8% drop
for the nine-month period ending September 30, 2008, since inception.
Our three, high-grade CNI Charter Bond Funds eked out positive returns for the
year. The GOVERNMENT BOND FUND led the pack by gaining 4.9%, while the
CALIFORNIA TAX-EXEMPT BOND FUND rose 1.4%, and the CORPORATE BOND FUND returned
0.04%. Only the HIGHYIELD BOND FUND showed a loss of 9.8% during the
twelve-month period in keeping with market averages for the junk bond sector.
Lastly, all three of the CNI Charter Money Market Funds produced steady,
consistent, and competitive returns. These returns were in line with their
respective investment mandates.
Please read the following pages carefully as they contain important information
on the assets and financial condition of the Funds. If you have any questions
about this report or the CNI Charter Funds, please call your investment
professional or (888) 889-0799.
Thank you for choosing CNI Charter Funds.
Sincerely,
/s/ Richard A. Weiss
Richard A. Weiss
PRESIDENT
CITY NATIONAL ASSET MANAGEMENT, INC.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. CERTAIN SHAREHOLDERS MAY BE
SUBJECT TO THE ALTERNATIVE MINIMUM TAX (AMT). FEDERAL INCOME TAX RULES APPLY TO
ANY CAPITAL GAIN DISTRIBUTIONS.
FUND EXPENSES HAVE BEEN WAIVED DURING THE PERIOD ON WHICH THE PERFORMANCE IS
BASED. WITHOUT WAIVERS, PERFORMANCE WOULD BE LOWER.
THIS INFORMATION MUST BE PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS. PLEASE
READ THE PROSPECTUS CAREFULLY BEFORE INVESTING.
INVESTING IN MUTUAL FUNDS INVOLVES RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
IN ADDITIONAL TO THE NORMAL RISKS ASSOCIATED WITH INVESTING, INVESTMENTS IN
SMALLER COMPANIES TYPICALLY EXHIBIT HIGHER VOLATILITY. AN INVESTMENT IN THE
FUNDS IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION
OR ANY OTHER GOVERNMENT AGENCY.
*NOT FDIC INSURED *NO BANK GUARANTEE *MAY LOSE VALUE
INTRODUCING THE CNI CHARTER OPPORTUNISTIC VALUE FUND
In turbulent markets, a disciplined approach to identifying and capitalizing on
fundamental valuation makes sense. The latest addition to the CNI Charter Fund
family, managed by SKBA Capital Management, LLC, is an equity fund that relies
on proven, value-based disciplines to uncover opportunities when prices deviate
from their underlying, true value. SKBA Capital Management, LLC is a registered
investment advisor with $582 million in assets under management and a strong
track record of proven investment success.
For more information about the Opportunistic Value Fund or other CNI Charter
Funds visit cnicharterfunds.com.
CNI CHARTER FUNDS | PAGE 3
investment adviser's report
SEPTEMBER 30, 2008
EQUITY FUNDS
For the fiscal year ending September 30, 2008, the U.S. equity market, as
measured by the S&P 500 Index, returned -22.0%. Equities responded to a market
that was hoping for an economic recovery by mid 2008, but instead was dealt a
global credit crisis and financial contagion. This poor performance finds the
market in an official bear market, ending the five-year bull market that
effectively started in March 2003. The housing market and the issue of sub-prime
mortgages continued to be the main culprit. Investors worried about the strength
of financial institutions burdened by this toxic debt. The concern also
reflected the impact weak financial institutions would have on the rest of the
economy. This concern evidenced itself in early January 2008, as the Federal
Reserve lowered interest rates 75 basis points in a surprise move, as the risk
to economic growth increased. The market continued to trade lower in March 2008
with JPMorgan Chase's government assisted takeover of Bear Stearns. This was
just the sign of things to come with respect to the actions of the Federal
Reserve in keeping the U.S. financial system, and de facto the global markets,
functioning. September brought increased price declines with the government's
takeover of Fannie Mae and Freddie Mac. These "Sunday Night Specials" continued
with Lehman Brothers' bankruptcy, followed closely by the Federal Reserve's loan
to American International Group, effectively taking control of the company.
Credit markets froze worldwide and the Federal Reserve was using every
conceivable vehicle to inject liquidity into the various credit markets. The
fiscal year ended with Congress failing to pass a $700 billion rescue package
putting further downside pressure on the markets. Ultimately, Congress passed
the legislation, but this action provided little relief to a market where fear
was the predominant sentiment.
EQUITY FUND PERFORMANCE
(ALL RETURNS FOR CNI CHARTER FUNDS REFER TO INSTITUTIONAL CLASS SHARES)
- The LARGE CAP VALUE EQUITY FUND fell 21.6% during the 12 months ending
September 30, 2008. This performance outperformed both the
S&P500/Citigroup Value Index return of -24.5% and the Lipper Large Cap
Value Funds Classification return of -23.8%. Norfolk Southern and CSX
gained 30.1% and 29.3%, respectively, as railroad companies benefited
by higher charges to customers and improved railway efficiencies. Rohm
& Haas, a chemical producer specializing in acrylic technology, gained
29.1% due to the announced purchase by Dow Chemical. Keycorp, the
provider of multi-line financial services in the U.S., lost 63.2% as
the company increased its loan loss reserve and continued to write
down sizeable loan losses. Constellation Energy, which distributes
electricity and gas, fell 71.0% due to the credit crisis and
investors' fear that it would not be able to find a partner for its
energy-trading business.
- The LARGE CAP GROWTH EQUITY FUND lost 16.4% during the 12 months
ending September 30, 2008. This performance outperformed both the
S&P500/Citigroup Growth Index return of -19.4% and the Lipper Large
Cap Growth Funds Classification return of -23.0%. Revenue for the
world's largest retailer, Wal-Mart Stores, increased during the weak
economy. The company gained 39.6% as it positioned itself as the
low-price leader. Genzyme, a company that focuses on treating genetic
disorders and other chronic debilitating diseases, gained 30.6% as its
core
CNI CHARTER FUNDS | PAGE 4
investment adviser's report
SEPTEMBER 30, 2008
products still show strong growth. SanDisk, a manufacturer of data
storage products, fell 52.3% as the prices for the company's memory
products continued to drop sharply. The global real estate service
firm, CB Richard Ellis, fell 52.0% as the real estate sales and
leasing activities dropped due to the troubled global credit markets.
- The RCB SMALL CAP VALUE FUND returned -35.0% during the 12 months
ending September 30, 2008. The Russell 2000 Value Index returned
-12.3%, the Russell 2000 Index returned -14.5%, and the Lipper Small
Cap Value Funds Classification returned -16.4%. This bear market has
caused liquidity driven selling which disproportionately affected the
price of several of our holdings. Performance was punished by some of
our more economically sensitive stocks in the consumer discretionary
sector, a sector which represents 23% of the Fund. An example is
LodgeNet Interactive, a provider of in-room movies, internet and games
for hotel properties, which declined 92% because of expectations of a
decline in hotel occupancy rates and the company's leverage risk.
Among the Fund's positive contributors was Ralcorp Holdings, a private
label food manufacturer, considered a defensive stock in this economic
environment. During the summer the company completed its acquisition
of Post cereals, which expands and enhances Ralcorp's product
offerings. The stock returned 22% for the period. While the markets
may be unstable, the Fund continues to focus on the long-term outlook
for the issuers that are in the portfolio.
- The OPPORTUNISTIC VALUE FUND declined 6.9% during the period from June
26, 2008 (Fund inception date) to September 30, 2008. This performance
was in line with the Russell 1000 Value Index return of -6.1% and the
S&P 500 Index return of -8.4% for the same period. Materials and
financials were bright spots in the Fund. Rohm and Haas announced it
would be acquired by Dow Chemical for a significant premium. Despite
its 50% return during the period, however, it was not the top
contributor to the strategy's overall performance. That honor goes to
International Bancshares. Other top contributors included HCC
Insurance, Capital One Financial and Nasdaq. Unit, Chesapeake and
ConocoPhilips were three detractors to overall performance during the
period. Consumer discretionary issues also detracted from the Fund's
performance. With valuations compressing significantly, long-term
attraction of stocks over alternative asset classes has increased. We
are reaching levels not experienced in years and intend to capitalize
on recent turmoil by purchasing exceptional franchises at bargain
basement prices.
- The MULTI-ASSET FUND declined 9.8% during the year ending September
30, 2008. This compares favorably to the Lipper Flexible Portfolio
Funds Classification return which declined 14.0% for the same period.
The Fund returns were negatively affected by exposure to the U.S.
equity market over the course of the year. Commodity investments
benefited returns during the first half of the year, as did
investments in international bonds which appreciated largely due to
favorable currency exposures. During the course of the year, the Fund
divested international equities which limited overall Fund declines.
The Fund ended the fiscal year with a large cash position that has
provided some stability during a period of extreme price volatility in
virtually every asset class.
CNI CHARTER FUNDS | PAGE 5
investment adviser's report
SEPTEMBER 30, 2008
EQUITY FUNDS
LOOKING FORWARD
Most economists believe the economy will experience negative real growth in the
third and fourth quarters of 2008 and possibly on into the first quarter of
2009. The most pessimistic forecasts expect this economic slowdown to be longer
than normal, possibly lasting through all of 2009. We are confident, though,
that the Federal Reserve's actions will dampen the magnitude of the economic
slowdown and remain hopeful that the market lows reached in October 2008 will be
the low water mark for this most recent bear run. Ultimately, these low price
levels represent a fantastic opportunity for future price returns. In this
historic period, as in all market environments, we will continue to apply our
disciplined investment approach with the objective of providing superior
investment results across the various strategies we manage.
Sincerely,
/s/ Brian L. Garbe
Brian L. Garbe
DIRECTOR OF RESEARCH
CITY NATIONAL ASSET MANAGEMENT, INC.
THIS MATERIAL REPRESENTS THE MANAGER'S ASSESSMENT OF THE PORTFOLIO AND MARKET
ENVIRONMENT AT A SPECIFIC POINT IN TIME AND SHOULD NOT BE RELIED UPON BY THE
READER AS RESEARCH OR INVESTMENT ADVICE.
CNI CHARTER FUNDS | PAGE 6
fund overview
SEPTEMBER 30, 2008
LARGE CAP VALUE EQUITY FUND
The Fund seeks to provide capital appreciation and moderate income consistent
with current returns available in the marketplace by investing in large U.S.
corporations and U.S. dollar denominated American Depositary Receipts of large
foreign corporations which are undervalued and whose market valuations compare
favorably relative to similar companies.
Comparison of Change in the Value of a $10,000 Investment in the CNI Large Cap
Value Equity Fund, Institutional Class or Class N Shares, versus the S&P 500/
Citigroup Value Index, and the Lipper Large Cap Value Funds Classification(1)
(PERFORMANCE GRAPH)
CNI Large Cap CNI Large Cap
Value Equity Fund, Value Equity Lipper Large Cap
Institutional Fund, Class N S&P 500/Citigroup Value Funds
Class Shares Shares+ Value Index Classification
------------------ ------------- ----------------- ----------------
1/14/00 $10,000 $10,000 $10,000 $10,000
9/30/00 $10,099 $10,094 $ 9,871 $10,463
9/30/01 $ 8,447 $ 8,410 $ 8,508 $ 9,710
9/30/02 $ 6,852 $ 6,814 $ 6,989 $ 7,957
9/30/03 $ 8,499 $ 8,433 $ 8,579 $ 9,745
9/30/04 $10,148 $10,036 $10,271 $11,393
9/30/05 $11,608 $11,455 $11,951 $12,987
9/30/06 $13,291 $13,087 $13,796 $14,584
9/30/07 $15,365 $15,081 $16,018 $16,742
9/30/08 $12,051 $11,806 $12,093 $12,757
(1) The performance in the above graph does not reflect the deduction of taxes
the shareholder will pay on Fund distributions or the redemptions of Fund
shares. Investment performance reflects fee waivers in effect. In the
absence of such waivers, total return would be reduced.
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund. Please note that one cannot invest directly in an
unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS
Ticker 1-Year 3-Year 5-Year Inception
Shares Symbol Return Return Return to Date
- ------ ------ ------ ------ ------ ---------
Institutional Class (1)## CNLIX -21.57% 1.26% 7.23% 2.16%
Class N (2) CVEAX -21.72% 1.01% 6.96% 1.92%
(1) Commenced operations on January 14, 2000.
(2) Commenced operations on April 13, 2000.
## The Fund's Institutional Class Shares are currently offered only to
accounts for which City National Bank serves as trustee or in a fiduciary
capacity.
+ Class N Shares' performance for the period prior to April 13, 2000 reflects
the performance of the Fund's Institutional Shares. The performance of the
Institutional Shares has not been adjusted to reflect the higher Rule 12b-1
Fees and expenses applicable to Class N Shares. If it had, performance
would have been lower than that shown.
Top Ten Holdings
% OF PORTFOLIO
--------------
JPMorgan Chase 3.9
AT&T 3.6
Wells Fargo 3.6
Verizon Communications 2.7
Bank of America 2.6
Procter & Gamble 2.0
Wal-Mart Stores 1.8
Pfizer 1.8
US Bancorp 1.7
Occidental Petroleum 1.7
CNI CHARTER FUNDS | PAGE 7
fund overview
SEPTEMBER 30, 2008
LARGE CAP GROWTH EQUITY FUND
The Fund seeks to provide capital appreciation by investing in large U.S.
corporations and U.S. dollar denominated American Depositary Receipts of large
foreign corporations with the potential for growth and that possess superior
management, strong market position, consistent records of increased earnings and
a strong operating and financial position.
Comparison of Change in the Value of a $10,000 Investment in the CNI Large Cap
Growth Equity Fund, Institutional Class or Class N Shares, versus the S&P 500/
Citigroup Growth Index, and the Lipper Large Cap Growth Funds Classification(1)
(PERFORMANCE GRAPH)
CNI Large Cap
Growth Equity Fund, CNI Large Cap Lipper Large Cap
Institutional Growth Equity Fund, S&P 500/Citigroup Growth Funds
Class Shares Class N Shares+ Growth Index Classification
------------------- ------------------- ----------------- ----------------
1/14/00 $10,000 $10,000 $10,000 $10,000
9/30/00 $ 9,370 $ 9,350 $ 9,764 $10,370
9/30/01 $ 6,360 $ 6,330 $ 5,950 $ 6,287
9/30/02 $ 5,250 $ 5,210 $ 4,538 $ 5,008
9/30/03 $ 6,379 $ 6,320 $ 5,717 $ 6,063
9/30/04 $ 6,774 $ 6,691 $ 6,202 $ 6,552
9/30/05 $ 7,489 $ 7,379 $ 6,709 $ 7,407
9/30/06 $ 7,833 $ 7,714 $ 7,138 $ 7,704
9/30/07 $ 9,001 $ 8,833 $ 8,336 $ 9,273
9/30/08 $ 7,525 $ 7,371 $ 6,715 $ 7,146
(1) The performance in the above graph does not reflect the deduction of taxes
the shareholder will pay on Fund distributions or the redemptions of Fund
shares. Investment performance reflects fee waivers in effect. In the
absence of such waivers, total return would be reduced.
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund. Please note that one cannot invest directly in an
unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS
Ticker 1-Year 3-Year 5-Year Inception
Shares Symbol Return Return Return to Date
- ------ ------ ------ ------ ------ ---------
Institutional Class (1)## CNGIX -16.40% 0.16% 3.36% -3.21%
Class N (2) CLEAX -16.55% -0.03% 3.12% -3.44%
(1) Commenced operations on January 14, 2000.
(2) Commenced operations on March 28, 2000.
## The Fund's Institutional Class Shares are currently offered only to
accounts for which City National Bank serves as trustee or in a fiduciary
capacity.
+ Class N Shares' performance for the period prior to March 28, 2000 reflects
the performance of the Fund's Institutional Shares. The performance of the
Institutional Shares has not been adjusted to reflect the higher Rule 12b-1
Fees and expenses applicable to Class N Shares. If it had, performance
would have been lower than that shown.
Top Ten Holdings
% OF PORTFOLIO
--------------
Exxon Mobil 5.8
Microsoft 3.9
Chevron 3.5
Johnson & Johnson 3.3
Wal-Mart Stores 2.9
Procter & Gamble 2.8
IBM 2.8
Qualcomm 2.6
Google 2.4
PepsiCo 2.4
CNI CHARTER FUNDS | PAGE 8
fund overview
SEPTEMBER 30, 2008
RCB SMALL CAP VALUE FUND
The Fund seeks to provide capital appreciation by investing primarily in smaller
U.S. corporations which are considered undervalued.
Comparison of Change in the Value of a $10,000 Investment in the CNI RCB Small
Cap Value Fund, Institutional Class, Class N or Class R Shares, versus the
Russell 2500 Value Index, the Russell 2000 Index, the Russell 2000 Value Index,
the Lipper Small Cap Value Funds Classification, and the Lipper Small Cap Core
Funds Classification(1)
(PERFORMANCE GRAPH)
CNI RCB Small
Cap Value Fund, CNI RCB Small CNI RCB Small Lipper Small Cap
Institutional Cap Value Fund, Cap Value Fund, Russell 2500 Russell 2000 Russell 2000 Value Funds
Class Shares Class N Shares+ Class R Shares Value Index Index Value Index Classification
--------------- --------------- --------------- ------------ ------------ ------------ ----------------
9/30/1998 $10,000 $10,000 $ 9,650 $10,000 $10,000 $10,000 $10,000
9/30/1999 $15,120 $15,120 $14,591 $10,840 $11,907 $10,583 $11,271
9/30/2000 $16,858 $16,858 $16,268 $12,547 $14,692 $12,208 $13,345
9/30/2001 $18,394 $18,394 $17,751 $12,863 $11,576 $12,893 $13,884
9/30/2002 $16,353 $16,331 $15,739 $12,783 $10,499 $12,704 $13,741
9/30/2003 $23,802 $23,715 $22,854 $16,778 $14,331 $16,727 $17,800
9/30/2004 $29,744 $29,559 $28,483 $20,898 $17,022 $21,019 $22,136
9/30/2005 $32,679 $32,381 $31,206 $25,353 $20,078 $24,750 $26,307
9/30/2006 $32,810 $32,437 $31,251 $28,175 $22,070 $28,217 $28,624
9/30/2007 $36,306 $35,802 $34,510 $30,651 $24,793 $29,934 $31,527
9/30/2008 $23,596 $23,213 $22,426 $25,810 $21,203 $26,267 $26,353
(1) The performance in the above graph does not reflect the deduction of taxes
the shareholder will pay on Fund distributions or the redemptions of Fund
shares. Investment performance reflects fee waivers in effect. In the
absence of such waivers, total return would be reduced.
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund. Please note that one cannot invest directly in an
unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS
Ticker 1-Year 3-Year 5-Year 10-Year Inception
Shares Symbol Return Return Return Return to Date
- ------ ------ ------ ------ ------ ------- ---------
Institutional Class (1)## RCBIX -35.01% -10.29% -0.17% 8.96% 3.48%
Class N (1) RCBAX -35.16% -10.50% -0.43% 8.79% 3.24%
Class R (2) RCBSX -35.02% -10.43% -0.38% 8.80% 8.80%
Class R with load RCBSX -37.29% -11.49% -1.08% 8.41% 8.41%
(1) Commenced operations on October 3, 2001.
(2) Commenced operations on September 30, 1998.
## The Fund's Institutional Class Shares are currently offered only to
accounts for which City National Bank serves as trustee or in a fiduciary
capacity.
+ The performance of the Institutional Class and Class N Shares for the
period prior to October 3, 2001 reflect the performance of the Class R
Shares of a predecessor mutual fund. The performance of the Class R Shares
has not been adjusted to reflect the expenses applicable to Institutional
and Class N Shares. Fees for the Institutional Class Shares are lower than
the fees for the Class R Shares; correspondingly, Institutional Class
performance would have been higher than that shown.
Top Ten Holdings
% OF PORTFOLIO
--------------
Central Garden & Pet 7.7
Alleghany 6.8
White Mountains Insurance Group 5.5
Ralcorp Holdings 5.3
Wendy's/Arby's Group 4.6
Fisher Communications 4.4
Annaly Capital Management 3.9
Exterran Holdings 3.5
United Online 3.5
Fair Isaac 3.4
CNI CHARTER FUNDS | PAGE 9
fund overview
SEPTEMBER 30, 2008
OPPORTUNISTIC VALUE FUND
The Fund seeks to achieve long-term capital appreciation by investing in a
diversified portfolio of equity securities which are undervalued.
Comparison of Change in the Value of a $10,000 Investment in the CNI
Opportunistic Value Fund, Institutional Class, Class E, or Class N Shares,
versus the Russell 1000 Value Index, the S&P 500 Index, and the Lipper Multi-Cap
Value Funds Classification(1)
(PERFORMANCE GRAPH)
CNI Opportunistic
Value Fund, CNI Opportunistic CNI Opportunistic Lipper Multi-Cap
Institutional Value Fund, Value Fund, Russell 1000 S&P 500 Value Funds
Class Shares Class E Shares Class N Shares Value Index Index Classification
----------------- ----------------- ----------------- ------------ ------- ----------------
3/31/04 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
9/30/04 $10,000 $10,026 $ 9,987 $10,244 $ 9,982 $10,051
9/30/05 $11,873 $11,933 $11,841 $11,953 $11,205 $11,613
9/30/06 $12,879 $12,964 $12,799 $13,701 $12,414 $12,876
9/30/07 $14,382 $14,523 $14,262 $15,680 $14,455 $14,633
9/30/08 $11,860 $11,985 $11,740 $11,986 $11,278 $10,990
(1) The performance in the above graph does not reflect the deduction of taxes
the shareholder will pay on Fund distributions or the redemptions of Fund
shares. Investment performance reflects fee waivers in effect. In the
absence of such waivers, total return would be reduced.
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund. Please note that one cannot invest directly in an
unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS
Ticker 1-Year 3-Year Inception
Shares Symbol Return+ Return+ to Date+
- ------ ------ ------- ------- ---------
Institutional Class (1)## OPVIX -17.54% -0.04% 3.86%
Class E (1) OPVEX -17.48% 0.14% 4.10%
Class N (1) OPVNX -17.68% -0.28% 3.63%
(1) Commenced operations on June 26, 2008.
## The Fund's Institutional Class Shares are currently offered only to
accounts for which City National Bank serves as trustee or in a fiduciary
capacity.
+ For periods prior to June 26, 2008 the performance data quoted above
represents past performance of an institutional account that converted into
Class N shares of the Fund (the "Predecessor Account"), adjusted to reflect
fees and expenses borne by the Fund. The Predecessor Account was not a
registered mutual fund so it was not subject to the same investment and tax
restrictions as the Fund. If it had been, the Predecessor Account's
performance may have been lower.The cumulative returns for the
Institutional Class, Class N and Class E shares, from their inception to
September 30, 2008, were -6.90%, -6.90% and -7.00, respectively.
Top Ten Holdings*
% OF PORTFOLIO
--------------
Nasdaq OMX Group 3.9
Cardinal Health 3.4
Quest Diagnostics 3.4
Unit 3.1
3M 3.1
Brookfield Asset Management 3.1
Tyco International 3.1
Johnson & Johnson 3.0
ConocoPhillips 3.0
Portland General Electric 2.9
* Excludes Cash Equivalents
CNI CHARTER FUNDS | PAGE 10
fund overview
SEPTEMBER 30, 2008
MULTI-ASSET FUND
The Fund seeks to generate a positive total return in excess of inflation in a
manner consistent with capital preservation in all market environments.
Comparison of Change in the Value of a $10,000 Investment in the CNI Multi-Asset
Fund, Institutional Class or Class N Shares, versus the Barclays U.S. TIPS
Index, a 60/40 hybrid of the following two indexes: the S&P 500 Index, and the
Barclays Intermediate U.S. Government/Credit Index, and a CPI +500 Basis Points
benchmark.
(PERFORMANCE GRAPH)
Lipper
CNI Multi- CNI Multi- 60/40 Hybrid Barclays Flexible
Asset Fund, Asset Fund, of the Intermediate Barclays CPI + 500 Portfolio
Institutional N Class following S&P 500 US Government/ US TIPS basic Funds
Class Shares Shares two indexes: Index Credit Index Index points Classification
------------- ----------- ------------ ------- -------------- -------- ---------- --------------
10/01/07 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
9/30/08 $ 9,016 $ 8,988 $ 8,686 $ 7,700 $10,316 $10,619 $11,016 $ 8,606
(1) The performance in the above graph does not reflect the deduction of taxes
the shareholder will pay on Fund distributions or the redemptions of Fund
shares. Investment performance reflects fee waivers in effect. In the
absence of such waivers, total return would be reduced.
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund. Please note that one cannot invest directly in an
unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS
Cumulative
Ticker Inception
Shares Symbol to Date
- ------ ------ ----------
Institutional Class (1)## CNLIX -9.84%
Class N (1) CVEAX -10.12%
(1) Commenced operations on October 1, 2007.
## The Fund's Institutional Class Shares are currently offered only to
accounts for which City National Bank serves as trustee or in a fiduciary
capacity.
Top Ten Holdings*
% OF PORTFOLIO
--------------
SPDR S&P 500 Fund 19.8
iShares Lehman TIPS Bond Fund 9.8
CNI Corporate Bond Fund, Institutional Class 8.2
U.S. Treasury Inflation Protection Security 7.9
CNI Government Bond Fund, Institutional Class 6.8
T. Rowe Price International Bond Fund 5.7
Powershares DB Agricultural Fund 5.2
Market Vectors Gold Miners Fund 4.2
iShares Lehman 1-3 Year T-Bill 3.7
PIMCO Commodity Real Return Strategy Fund 3.6
* Excludes Cash Equivalents
CNI CHARTER FUNDS | PAGE 11
investment adviser's report
SEPTEMBER 30, 2008
FIXED INCOME FUNDS
The credit markets were once again front and center during the third quarter of
2008, as investors worried about the severity and duration of the morphing
financial market and economic downturn. Indeed, bids for a wide array of credit
instruments (mortgage backed securities, corporate and municipal bonds) all but
vanished as investors re-evaluated risk. The yield curve has since steepened,
with shorter-term rates declining in the face of monetary policy changes and
importantly, yield spreads/premiums seem to be stabilizing.
During the fiscal year, City National Asset Management, Inc. altered its
strategy by moving to a more defensive posture in terms of duration and quality.
This strategy shift came on the heels of the liquidity crisis and unprecedented
government intervention. The Fed looks poised to continue to inject liquidity
into the markets as needed through the many new programs instituted this year.
BOND FUND PERFORMANCE
(ALL RETURNS FOR CNI CHARTER FUNDS REFER TO INSTITUTIONAL CLASS SHARES)
- The CORPORATE BOND FUND produced a total return of 0.04% for the last
12 months. For the same period, the Barclays Intermediate U.S.
Corporate Index returned -5.3%. The strategy of underweighting lower
quality issues in favor of higher quality issues fared well during
this period of slower economic growth. Furthermore, our conservative
maturity profile also enabled the Fund to outperform both the
benchmark and its peer group, as the Lipper Short/Intermediate
Investment Grade Objective was down 1.0%.
- The GOVERNMENT BOND FUND produced a total return of 4.9% for the last
12 months. For the same period, the Barclays Intermediate U.S.
Government Bond Index returned 7.5%. The Fund trailed the benchmark
due to its underweight in U.S. Treasuries and the flight to quality
during the credit crunch. We maintain our neutral maturity stance
versus the benchmark due to an uncertain economic environment. Active
sector allocation has helped the Fund to outperform its peer group
during this period as evidenced by the Lipper Short/Intermediate U.S.
Government Objective return of 4.6%.
- The CALIFORNIA TAX EXEMPT BOND FUND produced a total return of 1.4%
for the last 12 months. For the same period, the Barclays CA
Intermediate-Short Municipal Bond Index returned 3.6%. The past fiscal
year was a historically volatile one for the municipal asset class
which resulted in disparate returns. In general, the Fund was modestly
longer duration with more focus on insured issues than the Index.
During the period, longer maturity and insured issues underperformed
in the market. The Fund did fare better against its peer group, as the
Lipper California Short/Intermediate Municipal Fund Objective returned
0.3%.
- The HIGH YIELD BOND FUND produced a total return of -9.8% for the last
12 months. For the same period, the Citigroup High Yield Market Capped
Index returned -8.4%. The Fund's sector allocation helped relative
performance in an otherwise very difficult operating environment. The
Fund's relative performance vis-a-vis its peer group remained
competitive, as the Lipper High Current Yield Funds Objective returned
-11.0%.
CNI CHARTER FUNDS | PAGE 12
investment adviser's report
SEPTEMBER 30, 2008
STRATEGIES OUTLOOK FOR BOND FUNDS
As the fiscal year closed, fixed income investors were very focused on the
duration of the economic and financial market slowdown and the accessibility of
credit for corporate America and the public sector municipalities. While we do
feel that the macro outlook is not yet positive, many of the requisite signs are
pointing toward more positive territory. Indeed, factors such as looser monetary
policy bias, lower money market rates, and narrowing yield spreads are all
positive signs that the markets are finding a bottom. Against that backdrop, we
are also keeping a watchful eye on unemployment, the consumer and corporate
earnings momentum. There may still be more fallout ahead for the economy from
the continued weakness in residential housing and tighter credit markets. Given
this, we maintain our higher quality tilt along with a neutral duration bias
(vs. the indexes) until we see signs the economy is rebounding from its current
trajectory.
Sincerely,
/s/ Rodney J. Olea
Rodney J. Olea
DIRECTOR OF FIXED INCOME
CITY NATIONAL ASSET MANAGEMENT, INC.
THIS MATERIAL REPRESENTS THE MANAGER'S ASSESSMENT OF THE PORTFOLIO AND MARKET
ENVIRONMENT AT A SPECIFIC POINT IN TIME AND SHOULD NOT BE RELIED UPON BY THE
READER AS RESEARCH OR INVESTMENT ADVICE.
CNI CHARTER FUNDS | PAGE 13
fund overview
SEPTEMBER 30, 2008
CORPORATE BOND FUND
The Fund seeks to provide current income (as the primary component of a total
return, intermediate duration strategy) by investing in a diversified portfolio
of investment grade fixed income securities, primarily corporate bonds issued by
domestic and international companies denominated in U.S. dollars.
Comparison of Change in the Value of a $10,000 Investment in the CNI Corporate
Bond Fund, Institutional Class or Class N Shares, versus the Barclays
Intermediate U.S. Corporate Index, and Lipper Short/Intermediate Investment
Grade Debt Objective(1)
(PERFORMANCE GRAPH)
CNI Corporate Lipper Short/
Bond Fund, CNI Corporate Barclays Intermediate
Institutional Bond Fund, Intermediate U.S. Investment Grade
Class Shares Class N Shares+ Corporate Index Debt Objective
------------- --------------- ----------------- ----------------
1/14/00 $10,000 $10,000 $10,000 $10,000
9/30/00 $10,576 $10,593 $10,645 $10,562
9/30/01 $11,860 $11,872 $11,993 $11,728
9/30/02 $12,578 $12,548 $12,853 $12,374
9/30/03 $13,425 $13,359 $14,130 $12,973
9/30/04 $13,714 $13,625 $14,686 $13,240
9/30/05 $13,887 $13,749 $14,946 $13,419
9/30/06 $14,330 $14,151 $15,479 $13,840
9/30/07 $14,984 $14,760 $16,166 $14,434
9/30/08 $14,990 $14,744 $15,313 $14,293
(1) The performance in the above graph does not reflect the deduction of taxes
the shareholder will pay on Fund distributions or the redemptions of Fund
shares. Investment performance reflects fee waivers in effect. In the
absence of such waivers, total return would be reduced.
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund. Please note that one cannot invest directly in an
unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS
Ticker 1-Year 3-Year 5-Year Inception
Shares Symbol Return Return Return to Date
- ------ ------ ------ ------ ------ ---------
Institutional Class (1)## CNCIX 0.04% 2.58% 2.23% 4.76%
Class N (2) CCBAX -0.11% 2.36% 1.99% 4.56%
(1) Commenced operations on January 14, 2000.
(2) Commenced operations on April 13, 2000.
## The Fund's Institutional Class Shares are currently offered only to
accounts for which City National Bank serves as trustee or in a fiduciary
capacity.
+ Class N Shares' performance for the period prior to April 13, 2000 reflects
the performance of the Fund's Institutional Shares. The performance of the
Institutional Shares has not been adjusted to reflect the higher Rule 12b-1
Fees and expenses applicable to Class N Shares. If it had, performance
would have been lower than that shown.
Top Ten Holdings*
% OF PORTFOLIO
--------------
ING US Funding
2.570%, 10/07/08 3.1
Caterpillar
2.150%, 10/30/08 2.9
Toyota Motor Credit
4.350%, 12/15/10 2.7
General Electric Capital,
Ser A, MTN
6.000%, 06/15/12 2.1
Berkshire Hathaway Finance
4.125%, 01/15/10 2.1
Walt Disney, MTN
5.700%, 07/15/11 2.1
Bottling Group
4.625%, 11/15/12 2.0
Dexia Delaware
2.830%, 11/10/08 2.0
FHLMC
5.125%, 04/18/11 1.9
Anheuser Busch
7.500%, 03/15/12 1.7
* Excludes Cash Equivalents
CNI CHARTER FUNDS | PAGE 14
fund overview
SEPTEMBER 30, 2008
GOVERNMENT BOND FUND
The Fund seeks to provide current income (as the primary component of a total
return, intermediate duration strategy) by investing primarily in U.S.
government securities either issued or guaranteed by the U.S. government or its
agencies or instrumentalities.
Comparison of Change in the Value of a $10,000 Investment in the CNI Government
Bond Fund, Institutional Class or Class N Shares, versus the Barclays
Intermediate U.S. Government Bond Index, and the Lipper Short/Intermediate U.S.
Government Objective(1)
(PERFORMANCE GRAPH)
CNI Government Barclays Lipper Short/
Bond Fund, CNI Government Intermediate U.S. Intermediate
Institutional Bond Fund, Government U.S. Government
Class Shares Class N Shares+ Bond Index Objective
-------------- --------------- ----------------- ---------------
1/14/00 $10,000 $10,000 $10,000 $10,000
9/30/00 $10,564 $10,534 $10,659 $10,539
9/30/01 $11,796 $11,720 $12,031 $11,699
9/30/02 $12,685 $12,596 $13,046 $12,471
9/30/03 $13,025 $12,937 $13,502 $12,813
9/30/04 $13,130 $13,008 $13,760 $12,973
9/30/05 $13,317 $13,159 $13,940 $13,099
9/30/06 $13,702 $13,505 $14,432 $13,513
9/30/07 $14,392 $14,149 $15,279 $14,130
9/30/08 $15,093 $14,799 $16,427 $14,781
(1) The performance in the above graph does not reflect the deduction of taxes
the shareholder will pay on Fund distributions or the redemptions of Fund
shares. Investment performance reflects fee waivers in effect. In the
absence of such waivers, total return would be reduced.
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund. Please note that one cannot invest directly in an
unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS
Ticker 1-Year 3-Year 5-Year Inception
Shares Symbol Return Return Return to Date
- ------ ------ ------ ------ ------ ---------
Institutional Class (1)## CNBIX 4.87% 4.26% 2.99% 4.84%
Class N (2) CGBAX 4.59% 3.99% 2.73% 4.60%
(1) Commenced operations on January 14, 2000.
(2) Commenced operations on April 13, 2000.
## The Fund's Institutional Class Shares are currently offered only to
accounts for which City National Bank serves as trustee or in a fiduciary
capacity.
+ Class N Shares' performance for the period prior to April 13, 2000 reflects
the performance of the Fund's Institutional Shares. The performance of the
Institutional Shares has not been adjusted to reflect the higher Rule 12b-1
Fees and expenses applicable to Class N Shares. If it had, performance
would have been lower than that shown.
Top Ten Holdings*
% OF PORTFOLIO
--------------
U.S. Treasury Note
6.000%, 08/15/09 7.4
FFCB REMIC, Ser IA4, Cl 1
5.770%, 02/21/14 6.2
FNMA
6.250%, 02/01/11 5.9
GNMA REMIC, Ser 31, Cl PB
5.500%, 02/16/32 5.9
FHLMC REMIC, Ser R010, Cl AB
5.500%, 12/15/19 5.8
FFCB REMIC, Ser IA3, Cl 1
5.370%, 09/25/13 4.9
FFCB REMIC, Ser IA8, Cl 1
4.650%, 01/21/14 4.7
FNMA
6.625%, 09/15/09 4.1
FHLB
5.000%, 12/11/15 3.7
FHLB
5.250%, 10/14/11 3.6
* Excludes Cash Equivalents
CNI CHARTER FUNDS | PAGE 15
fund overview
SEPTEMBER 30, 2008
CALIFORNIA TAX EXEMPT BOND FUND
The Fund seeks to provide current income exempt from Federal and California
state income tax (as the primary component of a total return strategy) by
investing primarily in investment grade California municipal bonds and notes.
Comparison of Change in the Value of a $10,000 Investment in the CNI California
Tax Exempt Bond Fund, Institutional Class or Class N Shares, versus the Barclays
CA Intermediate-Short Municipal Index, and the Lipper CA Short/Intermediate
Municipal Debt Objective(1)
(PERFORMANCE GRAPH)
CNI California CNI California Lipper CA Short/
Tax-Exempt Bond Tax-Exempt Bond Barclays CA Intermediate
Fund, Institutional Fund, Class N Intermediate-Short Municipal Debt
Class Shares Shares+ Municipal Index Objective
------------------- --------------- ------------------ ----------------
1/14/00 $10,000 $10,000 $10,000 $10,000
9/30/00 $10,543 $10,532 $10,545 $10,449
9/30/01 $11,303 $11,277 $11,403 $11,132
9/30/02 $12,160 $12,112 $12,272 $11,810
9/30/03 $12,480 $12,399 $12,633 $12,051
9/30/04 $12,730 $12,627 $13,000 $12,238
9/30/05 $12,940 $12,803 $13,250 $12,627
9/30/06 $13,351 $13,163 $13,677 $13,018
9/30/07 $13,749 $13,534 $14,185 $13,357
9/30/08 $13,938 $13,685 $14,690 $13,395
(1) The performance in the above graph does not reflect the deduction of taxes
the shareholder will pay on Fund distributions or the redemptions of Fund
shares. Investment performance reflects fee waivers in effect. In the
absence of such waivers, total return would be reduced.
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund. Please note that one cannot invest directly in an
unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS
Ticker 1-Year 3-Year 5-Year Inception
Shares Symbol Return Return Return to Date
- ------ ------ ------ ------ ------ ---------
Institutional Class (1)## CNTIX 1.38% 2.51% 2.24% 3.88%
Class N (2) CCTEX 1.12% 2.25% 1.99% 3.67%
(1) Commenced operations on January 14, 2000.
(2) Commenced operations on April 13, 2000.
## The Fund's Institutional Class Shares are currently offered only to
accounts for which City National Bank serves as trustee or in a fiduciary
capacity.
+ Class N Shares' performance for the period prior to April 13, 2000 reflects
the performance of the Fund's Institutional Shares. The performance of the
Institutional Shares has not been adjusted to reflect the higher Rule 12b-1
Fees and expenses applicable to Class N Shares. If it had, performance
would have been lower than that shown.
Top Ten Holdings
% OF PORTFOLIO
--------------
Arizona School Facilities
Board, Ser C, COP, FSA
Callable 09/01/14 @ 100
5.000%, 09/01/15 2.3
Golden State, Tobacco
Settlement, Ser A-3, RB
Pre-Refunded @ 100
7.875%, 06/01/13 2.3
Escondido, Union School District,
Refunding & Financing Project,
COP, MBIA
4.750%, 07/01/19 2.2
California State, Public Works
Board Lease, Department of
Corrections-State Prisons Project,
Ser A, RB, AMBAC
5.250%, 12/01/13 1.8
North Orange County,
Community College District,
Ser A, GO, MBIA
Pre-Refunded @ 101
5.375%, 08/01/12 1.6
California State, Department
of Water Resources, Water
Systems Project J-2, RB
7.000%, 12/01/12 1.6
Los Angeles, Unified School
District, GO, MBIA
5.750%, 07/01/16 1.6
University of California,
Ser B, RB, AMBAC
Pre-Refunded @ 100
5.500%, 05/15/14 1.6
New York State, Local
Assistance Correction
Authority, Ser E, RB
6.000%, 04/01/14 1.6
California State, Health
Facilities Financing Authority,
Valley Care Project, Ser A, RB
Pre-Refunded @ 100
5.375%, 05/01/12 1.5
CNI CHARTER FUNDS | PAGE 16
fund overview
SEPTEMBER 30, 2008
HIGH YIELD BOND FUND
The Fund seeks to maximize total return by investing primarily in fixed income
securities rated below investment grade including corporate bonds and
debentures, convertible and preferred securities, and zero coupon
obligations. The Fund may also invest in fixed income securities rated below
investment grade issued by governments and agencies, both U.S. and foreign, and
in equity securities. The Fund seeks to invest in securities that offer a high
current yield as well as total return potential and diversifies across issuers,
industries and sectors to control risks.
Comparison of Change in the Value of a $10,000 Investment in the CNI High Yield
Bond Fund, Institutional Class or Class N Shares, versus the Citigroup High
Yield Market Capped Index and the Lipper High Current Yield Bond Funds
Objective(1)
(PERFORMANCE GRAPH)
CNI High Yield Lipper High
Bond Fund, CNI High Yield Citigroup High Current Yield
Institutional Bond Fund, Yield Market Bond Fund
Class Shares Class N Shares Capped Index Objective
-------------- -------------- -------------- -------------
1/14/00 $10,000 $10,000 $10,000 $10,000
9/30/00 $10,421 $10,394 $ 9,973 $ 9,905
9/30/01 $10,165 $10,109 $ 9,372 $ 9,103
9/30/02 $10,654 $10,563 $ 9,458 $ 8,951
9/30/03 $12,757 $12,611 $12,390 $11,258
9/30/04 $14,349 $14,142 $13,914 $12,543
9/30/05 $15,044 $14,784 $14,792 $13,341
9/30/06 $16,082 $15,756 $15,793 $14,249
9/30/07 $17,251 $16,852 $16,985 $15,257
9/30/08 $15,556 $15,150 $15,563 $13,580
(1) The performance in the above graph does not reflect the deduction of taxes
the shareholder will pay on Fund distributions or the redemptions of Fund
shares. Investment performance reflects fee waivers in effect. In the
absence of such waivers, total return would be reduced.
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund. Please note that one cannot invest directly in an
unmanaged index.
AVERAGE ANNUAL TOTAL RETURNS
Ticker 1-Year 3-Year 5-Year Inception
Shares Symbol Return Return Return to Date
- ------ ------ ------ ------ ------ ---------
Institutional Class (1)## CHYIX -9.83% 1.12% 4.05% 5.20%
Class N (1) CHBAX -10.10% 0.82% 3.74% 4.88%
(1) Commenced operations on January 14, 2000.
## The Fund's Institutional Class Shares are currently offered only to
accounts for which City National Bank serves as trustee or in a fiduciary
capacity.
Top Ten Holdings
% OF PORTFOLIO
--------------
Energy Future Holdings
10.875%, 11/01/17 1.5
El Paso
7.000%, 05/15/11 0.9
Charter Communications Holdings II
10.250%, 09/15/10 0.9
Whiting Petroleum
7.000%, 02/01/14 0.8
Qwest
7.625%, 06/15/15 0.8
Cablevision Systems, Ser B
8.000%, 04/15/12 0.8
Koppers Holdings
13.995%, 11/15/14 0.7
Allied Waste North America, Ser B
7.125%, 05/15/16 0.7
Southern States Cooperative
10.500%, 11/01/10 0.7
Allegheny Energy Supply
7.800%, 03/15/11 0.6
CNI CHARTER FUNDS | PAGE 17
investment adviser's report
SEPTEMBER 30, 2008
MONEY MARKET FUNDS
In last year's annual report, we reflected on the prepositioning of our Funds
for a slowing economy, the (as we now know) beginning effects of a credit
crisis, easing monetary policy, the ongoing housing crisis and its impact on
consumer spending. In 2008, these problems combined to cause a complete seizing
of the liquidity and credits markets. The failure of Lehman Brothers in
mid-September ignited a chain of events that left every asset class in a
complete standstill. The Federal Reserve (the "Fed") and Treasury took
unprecedented steps to restore confidence in the world financial system. The
impact of the credit crunch on the fixed income markets has been severe, with
September being one of the worst performing months on record for fixed income
assets (other than U.S. Treasuries, which benefited from a flight to safety even
at abnormally low yields.) Most municipal bond portfolios and taxable
(non-Treasury) bond portfolios had negative total returns of -1% to -3% during
September. However, since the end of the Funds' fiscal year, the massive flight
to quality eased as investors weighed the effects of the financial rescue plan
and fixed income asset prices began to normalize.
An area we are watching closely is overnight borrowing rates, specifically the
Libor (London Interbank Offered Rate). Libor is a benchmark for the valuation of
most money market instruments. Recent bank failures have made financial
institutions wary of lending to each other, except at highly elevated rates.
This caused a spike in Libor rates accompanied by sharply lower valuations for
commercial paper and other short-term credit instruments. This, along with the
collapse of Lehman Brothers and the failure of a major money market fund to
maintain the critical $1 a share level, precipitated a near-run on money market
funds, which in turn led the U.S. Treasury to offer a guarantee program for
these widely held vehicles. Our funds opted to participate in this program as an
extra layer of protection for our shareholders. The Treasury's goal, successful
so far, was to stem the outflow of funds from panicky money market fund
shareholders into Treasury obligations. As we go to press, we believe that the
worst of the credit and liquidity crisis tsunami is behind us. We may still
experience some dislocations in the credit markets, but with the successful
passage of the economic stabilization plan and the Treasury's Troubled Assets
Relief Program (TARP), we believe investor confidence will gradually return to
the markets as time passes.
- The PRIME MONEY MARKET FUND continued to emphasize high quality liquid
issuers as a way to weather the credit crunch felt in certain types of
asset-backed commercial paper (ABCP). With our strategy focusing
primarily on the highest quality and liquid issuers, the Fund fared
well during this period. Furthermore, we added short term agency debt
as a way to capture some of the flight to quality in the short-term
markets. That strategy played out well as those holdings appreciated
with the Fed ease and increased demand. We've also managed the average
portfolio maturity of the Fund to around 47 days in order to maintain
higher yielding holdings as a slight hedge against further Fed
movements.
- The GOVERNMENT MONEY MARKET FUND was positioned well for changes in
Fed policy and the slower economic growth environment. We have
maintained our maturity profile to over 40 days average portfolio
maturity in the Fund in order to benefit from higher yielding holdings
in the face of continued easing of monetary policy and lower rates.
- Our objective for the CALIFORNIA TAX EXEMPT MONEY MARKET FUND
continues to focus on the fundamental objective of safety and
liquidity. We have maintained a 34 day average portfolio maturity in
the fund by emphasizing high quality short term assets. Additionally,
we continue to watch the state of California very closely as the
economic slowdown takes hold. The size of the
CNI CHARTER FUNDS | PAGE 18
investment adviser's report
SEPTEMBER 30, 2008
state and the diverse nature of its economic makeup should help to
weather the slowdown and we remain confident in our positioning. We
will look to increase the average days to maturity as we see
opportunities in the supply and yields.
STRATEGIC OUTLOOK
Our outlook remains favorable for money market instruments due to the high
demand for liquid assets in these uncertain economic times. The Money Market
Funds are positioned well for a declining rate environment and slower economic
growth in coming quarters. Our focus on safety and liquidity remains a key
element as we have positioned ourselves for economic weakness. We will attempt
to maintain around a 50 day portfolio maturity in our Funds to protect against
reinvestment risk as we manage inflows, yields and supply available in the
marketplace. City National Asset Management, Inc. continues to monitor the
objectives of the Funds very closely and seek opportunities in the markets to
best serve our shareholders.
Sincerely,
/s/ Rodney J. Olea
Rodney J. Olea
DIRECTOR OF FIXED INCOME
CITY NATIONAL ASSET MANAGEMENT, INC.
THE ABOVE COMMENTARY EXPRESSES THE PORTFOLIO MANAGERS' VIEWS AS OF THE DATE
SHOWN AND SHOULD NOT BE RELIED UPON BY THE READER AS RESEARCH OR ADVICE
REGARDING ANY INVESTMENT. THESE VIEWS AND THE PORTFOLIO HOLDINGS ARE SUBJECT TO
CHANGE. THERE IS NO GUARANTEE THAT ANY FORECASTS MADE WILL COME TO PASS.
CNI CHARTER FUNDS | PAGE 19
schedule of investments
SEPTEMBER 30, 2008
LARGE CAP VALUE EQUITY FUND
SECTOR WEIGHTINGS (UNAUDITED)*:
(BAR CHART)
Financials 27.6%
Industrials 13.3%
Consumer Staples 10.7%
Healthcare 9.7%
Consumer Discretionary 8.9%
Information Technology 6.8%
Utilities 6.7%
Telecommunication Services 6.3%
Energy 4.4%
Materials 4.2%
Short-Term Investments 1.4%
* Percentages based on total investments.
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------- ------------ -----------
COMMON STOCK [98.9%]
AEROSPACE & DEFENSE [4.5%]
Goodrich 16,400 $ 682
Lockheed Martin 13,000 1,426
Northrop Grumman 17,000 1,029
Raytheon 25,200 1,349
-----------
TOTAL AEROSPACE & DEFENSE 4,486
===========
AIR FREIGHT & LOGISTICS [0.8%]
FedEx 9,600 759
===========
AUTO COMPONENTS [0.2%]
Johnson Controls 7,900 240
===========
BEVERAGES [3.2%]
Coca-Cola 24,700 1,306
Coca-Cola Enterprises 37,700 632
Molson Coors
Brewing, Cl B 15,400 720
Pepsi Bottling Group 17,300 505
-----------
TOTAL BEVERAGES 3,163
===========
CAPITAL MARKETS [3.5%]
Bank of New York Mellon 28,900 942
Goldman Sachs Group 11,200 1,434
Morgan Stanley 12,700 292
State Street 15,000 853
-----------
TOTAL CAPITAL MARKETS 3,521
===========
CHEMICALS [2.3%]
Dow Chemical 36,000 1,144
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------- ------------ -----------
EI Du Pont de Nemours 9,000 $ 363
PPG Industries 14,000 816
-----------
TOTAL CHEMICALS 2,323
===========
COMMERCIAL BANKS [7.2%]
BB&T 21,100 798
PNC Financial Services Group 14,300 1,068
US Bancorp 48,000 1,729
Wells Fargo 94,960 3,564
-----------
TOTAL COMMERCIAL BANKS 7,159
===========
COMMUNICATIONS EQUIPMENT [0.6%]
Corning 37,100 580
===========
COMPUTERS & PERIPHERALS [3.6%]
Hewlett-Packard 36,600 1,692
IBM 14,300 1,673
Lexmark International, Cl A* 5,800 189
-----------
TOTAL COMPUTERS & PERIPHERALS 3,554
===========
CONSTRUCTION & ENGINEERING [0.3%]
Fluor 5,800 323
===========
CONSUMER FINANCE [0.3%]
Capital One Financial 6,000 306
===========
CONTAINERS & PACKAGING [0.3%]
Ball 7,200 284
===========
DIVERSIFIED FINANCIAL SERVICES [6.8%]
Bank of America 75,896 2,656
CIT Group 36,400 253
JPMorgan Chase 83,200 3,886
-----------
TOTAL DIVERSIFIED FINANCIAL SERVICES 6,795
===========
DIVERSIFIED TELECOMMUNICATION SERVICES [6.3%]
AT&T 129,917 3,627
Verizon Communications 83,509 2,680
-----------
TOTAL DIVERSIFIED
TELECOMMUNICATION SERVICES 6,307
===========
ELECTRIC UTILITIES [3.7%]
Edison International 32,600 1,301
Entergy 9,300 828
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 20
schedule of investments
SEPTEMBER 30, 2008
LARGE CAP VALUE EQUITY FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------- ------------ -----------
FPL Group 13,000 $ 654
PPL 24,100 892
-----------
TOTAL ELECTRIC UTILITIES 3,675
===========
ELECTRICAL EQUIPMENT [0.4%]
Emerson Electric 10,200 416
===========
ELECTRONIC EQUIPMENT [0.4%]
Tyco Electronics 16,200 448
===========
FOOD & STAPLES RETAILING [3.5%]
Kroger 30,800 846
Safeway 21,400 508
SUPERVALU 14,200 308
Wal-Mart Stores 31,000 1,857
-----------
TOTAL FOOD & STAPLES RETAILING 3,519
===========
FOOD PRODUCTS [2.1%]
Archer-Daniels-Midland 22,400 491
ConAgra Foods 8,000 155
General Mills 13,200 907
Sara Lee 42,500 537
-----------
TOTAL FOOD PRODUCTS 2,090
===========
HEALTH EQUIPMENT & PROVIDERS [1.3%]
Baxter International 19,400 1,273
===========
HEALTH CARE PROVIDERS & SERVICES [2.7%]
Aetna 27,600 997
Cigna 19,500 663
McKesson 20,000 1,076
-----------
TOTAL HEALTH CARE PROVIDERS & SERVICES 2,736
===========
HOTELS, RESTAURANTS & LEISURE [0.8%]
Darden Restaurants 17,000 487
Wyndham Worldwide 17,100 268
-----------
TOTAL HOTELS, RESTAURANTS & LEISURE 755
===========
HOUSEHOLD DURABLES [0.7%]
Whirlpool 8,700 690
===========
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------- ------------ -----------
HOUSEHOLD PRODUCTS [2.0%]
Procter & Gamble 28,500 $ 1,986
===========
INDUSTRIAL CONGLOMERATES [1.8%]
General Electric 33,500 854
Tyco International 27,600 967
-----------
TOTAL INDUSTRIAL CONGLOMERATES 1,821
===========
INSURANCE [9.4%]
ACE 24,600 1,331
Aflac 9,600 564
Allstate 5,000 231
Assurant 9,600 528
Chubb 27,100 1,488
Hartford Financial Services Group 12,300 504
MetLife 23,806 1,333
Principal Financial Group 5,800 252
Prudential Financial 15,300 1,102
Reinsurance Group of America, Cl B* 1,132 54
Travelers 27,000 1,220
Unum Group 31,000 778
-----------
TOTAL INSURANCE 9,385
===========
LIFE SCIENCES TOOLS & SERVICES [0.8%]
PerkinElmer 32,000 799
===========
MACHINERY [1.9%]
Caterpillar 10,600 632
Eaton 8,400 472
Illinois Tool Works 9,700 431
Parker Hannifin 7,700 408
-----------
TOTAL MACHINERY 1,943
===========
MEDIA [4.4%]
CBS, Cl B 38,750 565
Comcast, Cl A 36,200 710
Omnicom Group 14,700 567
Time Warner 83,800 1,099
Viacom, Cl B* 15,000 372
Walt Disney 35,900 1,102
-----------
TOTAL MEDIA 4,415
===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 21
schedule of investments
SEPTEMBER 30, 2008
LARGE CAP VALUE EQUITY FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------- ------------ -----------
METALS & MINING [0.4%]
United States Steel 5,800 $ 450
===========
MULTILINE RETAIL [0.8%]
Target 15,500 760
===========
MULTI-UTILITIES [3.0%]
Dominion Resources 9,200 394
PG&E 24,100 902
Public Service Enterprise Group 32,100 1,053
Sempra Energy 13,700 691
-----------
TOTAL MULTI-UTILITIES 3,040
===========
OIL, GAS & CONSUMABLE FUELS [4.4%]
Chevron 20,240 1,670
ConocoPhillips 11,580 848
Marathon Oil 4,800 191
Occidental Petroleum 24,400 1,719
-----------
TOTAL OIL, GAS & CONSUMABLE FUELS 4,428
===========
PAPER & FOREST PRODUCTS [1.1%]
International Paper 24,500 641
MeadWestvaco 20,400 476
-----------
TOTAL PAPER & FOREST PRODUCTS 1,117
===========
PHARMACEUTICALS [5.0%]
Abbott Laboratories 14,200 818
Bristol-Myers Squibb 66,000 1,376
Merck 14,100 445
Pfizer 95,500 1,761
Wyeth 15,500 572
-----------
TOTAL PHARMACEUTICALS 4,972
===========
REAL ESTATE INVESTMENT TRUSTS [0.5%]
Host Hotels & Resorts 41,000 545
===========
ROAD & RAIL [3.6%]
CSX 31,400 1,714
Norfolk Southern 12,600 834
Union Pacific 14,500 1,032
-----------
TOTAL ROAD & RAIL 3,580
===========
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------- ------------ -----------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT [1.2%]
Intel 15,000 $ 281
Texas Instruments 44,900 965
-----------
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 1,246
===========
SOFTWARE [1.0%]
Microsoft 37,500 1,001
===========
SPECIALTY RETAIL [0.9%]
Best Buy 12,200 457
Sherwin-Williams 8,200 469
-----------
TOTAL SPECIALTY RETAIL 926
===========
TEXTILES, APPAREL & LUXURY GOODS [1.2%]
Nike, Cl B 17,900 1,198
-----------
TOTAL COMMON STOCK
(Cost $100,126) 99,014
===========
CASH EQUIVALENTS [1.4%]
Fidelity Institutional Domestic Money Market
Portfolio, Cl I, 2.660%** 194,735 195
Goldman Sachs Financial Square Funds -
Government Fund, 2.040%** 1,167,502 1,167
-----------
TOTAL CASH EQUIVALENTS
(Cost $1,362) 1,362
===========
TOTAL INVESTMENTS [100.3%]
(Cost $101,488) $ 100,376
===========
PERCENTAGES ARE BASED ON NET ASSETS OF $100,073 ($ THOUSANDS).
* NON-INCOME PRODUCING SECURITY.
** THE RATE REPORTED IS THE 7-DAY EFFECTIVE YIELD AS OF SEPTEMBER 30, 2008.
CL -- CLASS
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 22
schedule of investments
SEPTEMBER 30, 2008
LARGE CAP GROWTH EQUITY FUND
SECTOR WEIGHTINGS (UNAUDITED)*:
(BAR CHART)
Information Technology 23.4%
Energy 20.9%
Healthcare 15.7%
Consumer Staples 13.4%
Industrials 8.4%
Consumer Discretionary 7.9%
Financials 4.9%
Materials 2.5%
Short-Term Investments 2.4%
Utilities 0.5%
* Percentages based on total investments.
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------- ------------ -----------
COMMON STOCK [98.2%]
AEROSPACE & DEFENSE [2.7%]
Boeing 6,000 $ 344
L-3 Communications Holdings, Cl 3 3,000 295
Lockheed Martin 2,000 219
Precision Castparts 3,600 284
-----------
TOTAL AEROSPACE & DEFENSE 1,142
===========
AIR FREIGHT & LOGISTICS [0.6%]
Expeditors International of Washington 7,700 268
===========
AUTOMOBILES [0.5%]
Harley-Davidson 6,200 231
===========
BEVERAGES [3.4%]
Coca-Cola 7,600 402
PepsiCo 14,500 1,033
-----------
TOTAL BEVERAGES 1,435
===========
BIOTECHNOLOGY [4.9%]
Biogen Idec* 7,000 352
Celgene* 4,400 279
Genentech* 3,000 266
Genzyme - General Division* 6,500 526
Gilead Sciences* 14,400 656
-----------
TOTAL BIOTECHNOLOGY 2,079
===========
CAPITAL MARKETS [2.8%]
Franklin Resources 4,500 397
Goldman Sachs Group 3,400 435
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------- ------------ -----------
T Rowe Price Group 7,000 $ 376
-----------
TOTAL CAPITAL MARKETS 1,208
===========
CHEMICALS [1.2%]
Hercules 11,400 226
Monsanto 2,700 267
-----------
TOTAL CHEMICALS 493
===========
COMMERCIAL SERVICES & SUPPLIES [0.6%]
RR Donnelley & Sons 9,900 243
===========
COMMUNICATIONS EQUIPMENT [2.6%]
Qualcomm 25,500 1,096
===========
COMPUTERS & PERIPHERALS [5.2%]
Apple* 5,375 611
Hewlett-Packard 8,723 403
IBM 10,200 1,193
-----------
TOTAL COMPUTERS & PERIPHERALS 2,207
===========
CONSTRUCTION & ENGINEERING [0.9%]
Fluor 3,500 195
Jacobs Engineering Group* 3,700 201
-----------
TOTAL CONSTRUCTION & ENGINEERING 396
===========
DIVERSIFIED FINANCIAL SERVICES [1.0%]
CME Group, Cl A 1,200 446
===========
ELECTRIC UTILITIES [0.3%]
Edison International 3,100 124
===========
ENERGY EQUIPMENT & SERVICES [7.1%]
Baker Hughes 4,500 272
ENSCO International 10,300 594
National Oilwell Varco* 6,100 306
Noble 13,100 575
Schlumberger 11,300 882
Smith International 6,200 364
-----------
TOTAL ENERGY EQUIPMENT & SERVICES 2,993
===========
FOOD & STAPLES RETAILING [3.2%]
Sysco 3,300 102
Wal-Mart Stores 20,775 1,244
-----------
TOTAL FOOD & STAPLES RETAILING 1,346
===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 23
schedule of investments
SEPTEMBER 30, 2008
LARGE CAP GROWTH EQUITY FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------- ------------ -----------
FOOD PRODUCTS [1.8%]
General Mills 4,300 $ 296
Kellogg 8,700 488
-----------
TOTAL FOOD PRODUCTS 784
===========
HEALTH CARE EQUIPMENT & SUPPLIES [2.8%]
Bard (C.R.) 3,200 304
Stryker 9,300 579
Zimmer Holdings* 4,900 316
-----------
TOTAL HEALTH CARE EQUIPMENT & SUPPLIES 1,199
===========
HEALTH CARE PROVIDERS & SERVICES [2.7%]
Cardinal Health 4,600 227
DaVita* 3,400 194
McKesson 4,300 231
UnitedHealth Group 18,700 475
-----------
TOTAL HEALTH CARE PROVIDERS & SERVICES 1,127
===========
HOUSEHOLD PRODUCTS [4.7%]
Colgate-Palmolive 10,400 783
Procter & Gamble 17,202 1,199
-----------
TOTAL HOUSEHOLD PRODUCTS 1,982
===========
INDEPENDENT POWER PRODUCERS & ENERGY
TRADERS [0.2%]
AES* 7,600 89
===========
INSURANCE [0.9%]
Aflac 6,600 388
===========
INTERNET & CATALOG RETAIL [0.8%]
Amazon.Com* 4,400 320
===========
INTERNET SOFTWARE & SERVICES [4.7%]
eBay* 30,575 684
Google, Cl A* 2,600 1,041
Yahoo!* 15,000 260
-----------
TOTAL INTERNET SOFTWARE & SERVICES 1,985
===========
MACHINERY [2.9%]
Caterpillar 10,700 638
Cummins 4,100 179
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------- ------------ -----------
Danaher 4,100 $ 284
Manitowoc 7,900 123
-----------
TOTAL MACHINERY 1,224
===========
MEDIA [2.2%]
Comcast, Cl A 18,150 356
DIRECTV Group* 12,700 332
Omnicom Group 6,000 232
-----------
TOTAL MEDIA 920
===========
METALS & MINING [1.3%]
Freeport-McMoRan Copper & Gold 6,800 386
Nucor 4,200 166
-----------
TOTAL METALS & MINING 552
===========
MULTILINE RETAIL [0.5%]
Target 4,000 196
===========
OIL, GAS & CONSUMABLE FUELS [13.9%]
Anadarko Petroleum 2,200 107
Apache 3,300 344
Chevron 18,000 1,484
ConocoPhillips 5,600 410
EOG Resources 2,300 206
Exxon Mobil 32,000 2,485
Occidental Petroleum 8,200 578
XTO Energy 6,400 298
-----------
TOTAL OIL, GAS & CONSUMABLE FUELS 5,912
===========
PERSONAL PRODUCTS [0.4%]
Avon Products 4,300 179
===========
PHARMACEUTICALS [5.4%]
Johnson & Johnson 20,064 1,390
Pfizer 26,400 487
Wyeth 11,050 408
-----------
TOTAL PHARMACEUTICALS 2,285
===========
PROFESSIONAL SERVICES [0.7%]
Robert Half International 12,400 307
===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 24
schedule of investments
SEPTEMBER 30, 2008
LARGE CAP GROWTH EQUITY FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------- ------------ -----------
REAL ESTATE MANAGEMENT & DEVELOPMENT [0.2%]
CB Richard Ellis Group, Cl A* 5,100 $ 68
===========
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT [1.4%]
Broadcom, Cl A* 4,900 91
MEMC Electronic Materials* 6,500 184
Texas Instruments 14,400 310
-----------
TOTAL SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 585
===========
SOFTWARE [9.7%]
Adobe Systems* 4,900 193
Autodesk* 17,000 570
Citrix Systems* 8,275 209
Microsoft 62,180 1,660
Oracle* 43,265 879
Symantec* 31,300 613
-----------
TOTAL SOFTWARE 4,124
===========
SPECIALTY RETAIL [2.3%]
Autozonex* 2,500 308
Best Buy 9,200 345
GameStop, Cl A* 4,500 154
Lowe's 7,200 171
-----------
TOTAL SPECIALTY RETAIL 978
===========
TEXTILES, APPAREL & LUXURY GOODS [1.7%]
Coach* 18,100 453
Nike, Cl B 4,300 288
-----------
TOTAL TEXTILES, APPAREL & LUXURY GOODS 741
===========
TOTAL COMMON STOCK
(Cost $40,866) 41,652
===========
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------- ------------ -----------
CASH EQUIVALENTS [2.4%]
Fidelity Institutional Domestic Money Market
Portfolio, Cl I, 2.660%** 351,377 $ 351
Goldman Sachs Financial Square Funds -
Government Fund, 2.040%** 671,510 672
-----------
TOTAL CASH EQUIVALENTS
(Cost $1,023) 1,023
===========
TOTAL INVESTMENTS [100.6%]
(Cost $41,889) $ 42,675
===========
PERCENTAGES ARE BASED ON NET ASSETS OF $42,415 ($ THOUSANDS).
* NON-INCOME PRODUCING SECURITY.
** THE RATE REPORTED IS THE 7-DAY EFFECTIVE YIELD AS OF SEPTEMBER 30, 2008.
CL -- CLASS
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 25
schedule of investments
SEPTEMBER 30, 2008
RCB SMALL CAP VALUE FUND
SECTOR WEIGHTINGS (UNAUDITED)*:
(BAR CHART)
Consumer Discretionary 23.1%
Financials 22.8%
Consumer Staples 14.9%
Information Technology 10.0%
Materials 9.0%
Energy 7.2%
Industrials 7.0%
Telecommunication Services 2.2%
Healthcare 2.0%
Short-Term Investments 1.8%
* Percentages based on total investments.
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------- ------------ -----------
COMMON STOCK [99.6%]
BEVERAGES [2.0%]
PepsiAmericas 24,300 $ 503
===========
CHEMICALS [5.1%]
Nalco Holding 26,500 491
Spartech 81,200 804
-----------
TOTAL CHEMICALS 1,295
===========
COMMERCIAL SERVICES & SUPPLIES [2.0%]
PHH* 38,800 516
===========
DIVERSIFIED CONSUMER SERVICES [2.0%]
Coinstar* 16,000 512
===========
ENERGY EQUIPMENT & SERVICES [6.1%]
Exterran Holdings* 28,200 901
Global Industries* 92,700 644
-----------
TOTAL ENERGY EQUIPMENT & SERVICES 1,545
===========
FOOD PRODUCTS [5.4%]
Ralcorp Holdings* 20,000 1,348
===========
HOTELS, RESTAURANTS & LEISURE [4.7%]
Wendy's/Arby's Group, Cl A 225,100 1,184
===========
HOUSEHOLD PRODUCTS [10.2%]
Central Garden & Pet, Cl A* 330,400 1,966
Scotts Miracle-Gro, Cl A 25,000 591
-----------
TOTAL HOUSEHOLD PRODUCTS 2,557
===========
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------- ------------ -----------
INSURANCE [14.6%]
Alleghany* 4,794 $ 1,750
Conseco* 144,000 507
White Mountains Insurance Group 3,000 1,409
-----------
TOTAL INSURANCE 3,666
===========
INTERNET SOFTWARE & SERVICES [3.6%]
United Online 95,500 899
===========
LIFE SCIENCES TOOLS & SERVICES [2.0%]
PerkinElmer 20,100 502
===========
MACHINERY [5.0%]
Actuant, Cl A 19,900 502
Crane 16,000 475
IDEX 9,400 292
-----------
TOTAL MACHINERY 1,269
===========
MEDIA [14.4%]
Cox Radio, Cl A* 66,500 702
Fisher Communications 28,747 1,133
Liberty Media - Capital* 48,500 649
LodgeNet Interactive* 275,000 558
Virgin Media 73,100 577
-----------
TOTAL MEDIA 3,619
===========
METALS & MINING [1.6%]
Novamerican Steel* 253,300 395
===========
MULTILINE RETAIL [2.3%]
99 Cents Only Stores* 53,600 588
===========
OIL, GAS & CONSUMABLE FUELS [1.2%]
Edge Petroleum* 170,500 305
===========
REAL ESTATE INVESTMENT TRUSTS [8.6%]
Annaly Capital Management 75,000 1,009
Capital Trust, Cl A 38,000 589
Chimera Investment 89,500 556
-----------
TOTAL REAL ESTATE INVESTMENT TRUSTS 2,154
===========
SOFTWARE [6.6%]
Fair Isaac 37,500 865
PLATO Learning* 279,700 794
-----------
TOTAL SOFTWARE 1,659
===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 26
schedule of investments
SEPTEMBER 30, 2008
RCB SMALL CAP VALUE FUND (CONCLUDED)
SHARES/FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
WIRELESS TELECOMMUNICATION SERVICES [2.2%]
iPCS* 25,300 $ 563
===========
TOTAL COMMON STOCK
(Cost $31,828) 25,079
===========
REPURCHASE AGREEMENT [1.8%]
Morgan Stanley 1.750%, dated 09/30/08, to be
repurchased on 10/01/08, repurchase price
$470,538 (collateralized by a U.S.Treasury
Note, par value $429,405, 2.625%, 07/15/17;
with total market value $479,929) (A) $ 471 471
-----------
TOTAL REPURCHASE AGREEMENT
(Cost $471) 471
===========
WARRANTS [0.1%]
Novamerican Steel, Expires 03/07/11* 72,000 18
-----------
TOTAL WARRANTS
(Cost $103) 18
===========
TOTAL INVESTMENTS [101.5%]
(Cost $32,402) $ 25,568
===========
PERCENTAGES ARE BASED ON NET ASSETS OF $25,187 ($ THOUSANDS).
* NON-INCOME PRODUCING SECURITY.
(A) TRI-PARTY REPURCHASE AGREEMENT.
CL -- CLASS
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 27
schedule of investments
SEPTEMBER 30, 2008
OPPORTUNISTIC VALUE FUND
SECTOR WEIGHTINGS (UNAUDITED)*:
(BAR CHART)
Financials 18.5%
Healthcare 16.3%
Energy 13.4%
Information Technology 10.5%
Industrials 8.4%
Short-Term Investments 8.1%
Consumer Staples 7.4%
Consumer Discretionary 7.0%
Materials 5.2%
Utilities 4.0%
Telecommunication Services 1.2%
* Percentages based on total investments.
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------- ------------ -----------
COMMON STOCK [93.2%]
AUTOMOBILES [1.9%]
Honda Motor, ADR 28,000 $ 843
===========
CHEMICALS [1.2%]
Rohm & Haas 8,000 560
===========
COMMERCIAL BANKS [1.9%]
US Bancorp 24,400 879
===========
COMMUNICATIONS EQUIPMENT [2.4%]
Nokia, ADR 59,000 1,100
===========
COMPUTERS & PERIPHERALS [2.4%]
Dell* 65,000 1,071
===========
CONSUMER FINANCE [1.4%]
Capital One Financial 12,500 638
===========
CONTAINERS & PACKAGING [4.0%]
Packaging Corp of America 41,000 950
Sealed Air 40,000 880
-----------
TOTAL CONTAINERS & PACKAGING 1,830
===========
DIVERSIFIED FINANCIAL SERVICES [4.0%]
Nasdaq OMX Group* 58,500 1,788
===========
DIVERSIFIED TELECOMMUNICATION SERVICES [1.2%]
Windstream 50,000 547
===========
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------- ------------ -----------
ELECTRIC UTILITIES [3.0%]
Portland General Electric 56,600 $ 1,339
===========
ELECTRICAL EQUIPMENT [2.3%]
Baldor Electric 36,000 1,037
===========
ELECTRONIC EQUIPMENT [1.8%]
Tyco Electronics 30,000 830
===========
ENERGY EQUIPMENT & SERVICES [4.6%]
Exterran Holdings* 19,500 623
Unit* 29,000 1,445
-----------
TOTAL ENERGY EQUIPMENT & SERVICES 2,068
===========
FOOD & STAPLES RETAILING [4.8%]
Safeway 53,000 1,257
Walgreen 30,000 929
-----------
TOTAL FOOD & STAPLES RETAILING 2,186
===========
FOOD PRODUCTS [2.6%]
Del Monte Foods 153,600 1,198
===========
GAS UTILITIES [1.1%]
Atmos Energy 18,000 479
===========
HEALTH CARE EQUIPMENT & SUPPLIES [2.4%]
Covidien 20,000 1,075
===========
HEALTH CARE PROVIDERS & SERVICES [7.9%]
Cardinal Health 32,000 1,577
Patterson* 15,000 456
Quest Diagnostics 30,000 1,550
-----------
TOTAL HEALTH CARE PROVIDERS & SERVICES 3,583
===========
INDUSTRIAL CONGLOMERATES [6.2%]
3M 20,900 1,428
Tyco International 40,000 1,401
-----------
TOTAL INDUSTRIAL CONGLOMERATES 2,829
===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 28
schedule of investments
SEPTEMBER 30, 2008
OPPORTUNISTIC VALUE FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------- ------------ -----------
INSURANCE [8.3%]
Chubb 10,000 $ 549
Fidelity National Financial, Cl A 59,000 868
HCC Insurance Holdings 46,000 1,242
Unum Group 43,000 1,079
-----------
TOTAL INSURANCE 3,738
===========
IT SERVICES [1.5%]
Western Union 28,000 691
===========
LEISURE EQUIPMENT & PRODUCTS [1.1%]
Mattel 28,000 505
===========
MEDIA [4.1%]
DISH Network, Cl A* 35,000 735
Time Warner 84,700 1,110
-----------
TOTAL MEDIA 1,845
===========
OFFICE ELECTRONICS [0.8%]
Xerox 29,500 340
===========
OIL, GAS & CONSUMABLE FUELS [9.1%]
Chesapeake Energy 30,000 1,076
ConocoPhillips 18,500 1,355
Spectra Energy 48,000 1,143
Valero Energy 17,500 530
-----------
TOTAL OIL, GAS & CONSUMABLE FUELS 4,104
===========
PHARMACEUTICALS [6.2%]
Abbott Laboratories 9,000 518
Johnson & Johnson 20,000 1,386
ScheringPlough 49,000 905
-----------
TOTAL PHARMACEUTICALS 2,809
===========
REAL ESTATE MANAGEMENT & DEVELOPMENT [3.2%]
Brookfield Asset Management, Cl A 52,000 1,427
===========
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------- ------------ -----------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT [1.8%]
Applied Materials 54,000 $ 817
===========
TOTAL COMMON STOCK
(Cost $47,259) 42,156
===========
CASH EQUIVALENT [8.2%]
First American Prime Obligations Fund, Cl Y,
2.110%** 3,730,762 3,731
-----------
TOTAL CASH EQUIVALENT
(Cost $3,731) 3,731
===========
TOTAL INVESTMENTS [101.4%]
(Cost $50,990) $ 45,887
===========
PERCENTAGES ARE BASED ON NET ASSETS OF $45,246 ($ THOUSANDS).
* NON-INCOME PRODUCING SECURITY.
** THE RATE REPORTED IS THE 7-DAY EFFECTIVE YIELD AS OF SEPTEMBER 30, 2008.
ADR -- AMERICAN DEPOSITARY RECEIPT
CL -- CLASS
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 29
schedule of investments
SEPTEMBER 30, 2008
MULTI-ASSET FUND
TYPE OF SECURITY WEIGHTINGS (UNAUDITED)*:
(BAR CHART)
Exchange Traded Funds 43.0%
Affiliated Investment Funds 15.0%
Short-Term Investments 9.8%
Commercial Paper 9.5%
Registered Investment Company 9.3%
U.S. Treasury Obligation 7.9%
U.S. Government Agency Obligation 2.8%
Corporate Bond 2.7%
* Percentages based on total investments.
SHARES/FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
EXCHANGE TRADED FUNDS [44.3%]
iPath Dow Jones-AIG Commodity
Index Total Return Fund 2 $ 110
iShares Lehman 1-3 Year Treasury Bond Fund 13 1,052
iShares Lehman TIPS Bond Fund 27 2,759
Market Vectors Gold Miners Fund 35 1,177
Powershares DB Agricultural Fund 49 1,473
SPDR S&P 500 Fund, Ser 1 48 5,595
-----------
TOTAL EXCHANGE TRADED FUNDS
(Cost $14,428) 12,166
===========
AFFILIATED INVESTMENT FUNDS [15.5%]
CNI Corporate Bond Fund, Institutional Class 236 2,307
CNI Government Bond Fund, Institutional Class 186 1,934
-----------
TOTAL AFFILIATED INVESTMENT FUNDS
(Cost $4,355) 4,241
===========
REGISTERED INVESTMENT COMPANIES [9.6%]
PIMCO Commodity Real Return Strategy Fund 74 1,016
T. Rowe Price International Bond Fund 170 1,614
-----------
TOTAL REGISTERED INVESTMENT COMPANIES
(Cost $3,013) 2,630
===========
U.S. TREASURY OBLIGATION [8.1%]
U.S. Treasury Inflation Protection Security
0.875%, 04/15/10 $ 2,271 2,231
-----------
TOTAL U.S. TREASURY OBLIGATION
(Cost $2,292) 2,231
===========
FACE
AMOUNT (000)
DESCRIPTION /SHARES VALUE (000)
- --------------------------------------------------- ------------ -----------
U.S. GOVERNMENT AGENCY OBLIGATION [2.9%] FHLB
3.650%, 10/02/09 $ 800 $ 802
-----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATION
(Cost $800) 802
===========
CORPORATE BOND [2.8%]
FINANCIAL SERVICES [2.8%]
John Deere Capital, MTN
4.625%, 04/15/09 750 748
-----------
TOTAL CORPORATE BOND
(Cost $755) 748
===========
CASH EQUIVALENTS [10.1%]
AIM STIT-Treasury Portfolio, 0.800%* 3,010 3
Goldman Sachs Financial Square Funds -
Government Fund, 2.040%* 2,770,541 2,771
-----------
TOTAL CASH EQUIVALENT
(Cost $2,774) 2,774
===========
COMMERCIAL PAPER (A) [9.8%]
BANKS [3.3%]
Dexia Delaware
2.830%, 11/10/08 900 897
===========
INVESTMENT BANKER/BROKER DEALER [2.9%]
ING US Funding
2.570%, 10/07/08 800 800
===========
MACHINERY [3.6%]
Caterpillar (B)
2.150%, 10/30/08 1,000 998
===========
TOTAL COMMERCIAL PAPER
(Cost $2,695) 2,695
===========
TOTAL INVESTMENTS [103.1%]
(Cost $31,112) $ 28,287
===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 30
schedule of investments
SEPTEMBER 30, 2008
MULTI-ASSET FUND (CONCLUDED)
DESCRIPTION
PERCENTAGES ARE BASED ON NET ASSETS OF $27,449 ($ THOUSANDS).
* THE RATE REPORTED IS THE 7-DAY EFFECTIVE YIELD AS OF SEPTEMBER 30, 2008.
(A) RATE REPORTED IS THE EFFECTIVE YIELD AT TIME OF PURCHASE.
(B) SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF
1933. THESE SECURITIES ARE DEEMED LIQUID. THESE SECURITIES MAY BE RESOLD IN
TRANSACTIONS EXEMPT FROM REGISTRATION NORMALLY TO QUALIFIED INSTITUTIONS.
ON SEPTEMBER 30, 2008, THE VALUE OF THESE SECURITIES AMOUNTED TO $998
(000), REPRESENTING 3.6% OF THE NET ASSETS OF THE FUND.
FHLB -- FEDERAL HOME LOAN BANK
MTN -- MEDIUM TERM NOTE
SER -- SERIES
SPDR -- STANDARD & POOR'S DEPOSITORY RECEIPTS
TIPS -- TREASURY INFLATION PROTECTION SECURITIES
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 31
schedule of investments
SEPTEMBER 30, 2008
CORPORATE BOND FUND
ISSUER INDUSTRY WEIGHTINGS (UNAUDITED)*:
(BAR CHART)
Financials 34.1%
Industrials 27.0%
Banks 9.9%
U.S. Government Obligations 9.6%
Short-Term Investment 8.6%
Telephone 4.0%
Municipal Bonds 2.9%
Utilities 2.4%
U.S. Treasury Obligation 0.8%
Foreign Governments 0.7%
Mortgage-Backed Securities 0.0%
* Percentages based on total investments.
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
CORPORATE BONDS [69.6%]
AUTOMOTIVE [0.8%]
DaimlerChrysler
5.875%, 03/15/11 $ 570 $ 568
============ ===========
BANKS [7.9%]
Bank of America
5.300%, 03/15/17 1,000 831
Barclays Bank (A)
6.050%, 12/04/17 1,000 930
Deutsche Bank
7.500%, 04/25/09 500 502
7.250%, 10/15/11 500 500
Wachovia Bank
4.800%, 11/01/14 1,270 753
Wells Fargo Bank
7.550%, 06/21/10 1,000 1,034
4.625%, 08/09/10 1,000 996
-----------
TOTAL BANKS 5,546
===========
BEAUTY PRODUCTS [1.2%]
Avon Products
7.150%, 11/15/09 800 817
===========
COMMUNICATION & MEDIA [4.0%]
AOL Time Warner
6.750%, 04/15/11 415 414
Comcast Cable Communications
Holdings
8.375%, 03/15/13 440 461
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
News America Holdings
9.250%, 02/01/13 $ 450 $ 481
Walt Disney, MTN
5.700%, 07/15/11 1,395 1,437
-----------
TOTAL COMMUNICATION & MEDIA 2,793
===========
COMPUTER SYSTEM DESIGN & SERVICES [2.6%]
Cisco Systems
5.500%, 02/22/16 1,000 961
IBM, MTN
4.375%, 06/01/09 900 904
-----------
TOTAL COMPUTER SYSTEM DESIGN
& SERVICES 1,865
===========
DIVERSIFIED OPERATIONS [0.7%]
3M, MTN
4.375%, 08/15/13 500 505
===========
DRUGS [1.4%]
Abbott Laboratories
5.375%, 05/15/09 1,000 1,008
===========
ELECTRICAL SERVICES [2.4%]
American Electric Power
5.250%, 06/01/15 490 449
Iowa Electric Light & Power
6.000%, 10/01/08 200 200
WPS Resources
7.000%, 11/01/09 1,000 1,020
-----------
TOTAL ELECTRICAL SERVICES 1,669
===========
FINANCE AUTO LOANS [4.1%]
American Honda Finance,
MTN (A)
5.125%, 12/15/10 1,000 988
Toyota Motor Credit
4.350%, 12/15/10 1,800 1,862
-----------
TOTAL FINANCE AUTO LOANS 2,850
===========
FINANCIAL SERVICES [11.6%]
American General Finance, MTN
5.750%, 09/15/16 500 229
American General Finance,
Ser I, MTN
4.625%, 05/15/09 1,000 711
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 32
schedule of investments
SEPTEMBER 30, 2008
CORPORATE BOND FUND (CONTINUED)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
AXA Financial
7.750%, 08/01/10 $ 1,000 $ 1,025
Boeing Capital
6.500%, 02/15/12 930 988
CIT Group
5.400%, 03/07/13 1,000 557
General Electric Capital,
Ser A, MTN
6.875%, 11/15/10 250 251
6.000%, 06/15/12 1,540 1,486
HSBC Finance
5.250%, 04/15/15 1,250 1,140
John Deere Capital, MTN
4.625%, 04/15/09 750 749
National Rural Utilities,
Ser C, MTN
7.250%, 03/01/12 1,000 1,038
-----------
TOTAL FINANCIAL SERVICES 8,174
===========
FOOD, BEVERAGE & TOBACCO [6.0%]
Anheuser-Busch
7.500%, 03/15/12 1,190 1,220
Bottling Group
5.500%, 04/01/16 1,000 991
4.625%, 11/15/12 1,435 1,412
General Mills
6.000%, 02/15/12 560 571
-----------
TOTAL FOOD, BEVERAGE & TOBACCO 4,194
===========
FOREIGN GOVERNMENTS [0.6%]
United Mexican States, MTN
5.875%, 01/15/14 450 453
===========
INSURANCE [3.8%]
Aflac
6.500%, 04/15/09 1,150 1,161
Berkshire Hathaway Finance
4.125%, 01/15/10 1,475 1,481
-----------
TOTAL INSURANCE 2,642
===========
INVESTMENT BANKER/BROKER DEALER [11.3%]
Citigroup
5.850%, 08/02/16 1,000 844
5.500%, 02/15/17 250 192
Credit Suisse
5.500%, 08/15/13 1,250 1,160
Goldman Sachs Group
5.625%, 01/15/17 1,260 894
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
Jefferies Group
5.500%, 03/15/16 $ 665 $ 523
JPMorgan Chase
7.125%, 06/15/09 675 674
6.750%, 02/01/11 500 502
JPMorgan Chase, MTN (B)
7.330%, 06/28/09 1,000 1,021
Merrill Lynch, Ser C, MTN
4.250%, 02/08/10 1,275 1,212
Morgan Stanley
6.750%, 04/15/11 30 22
3.875%, 01/15/09 1,000 920
-----------
TOTAL INVESTMENT BANKER/BROKER DEALER 7,964
===========
PETROLEUM & FUEL PRODUCTS [2.1%]
ConocoPhillips
6.375%, 03/30/09 305 307
ConocoPhillips Canada Funding I
5.625%, 10/15/16 600 583
Duke Capital
5.500%, 03/01/14 625 596
-----------
TOTAL PETROLEUM & FUEL PRODUCTS 1,486
===========
RETAIL [4.1%]
Home Depot
5.250%, 12/16/13 1,000 921
Kohl's
6.300%, 03/01/11 1,000 1,020
Kroger
5.500%, 02/01/13 450 438
Target
5.875%, 07/15/16 500 492
-----------
TOTAL RETAIL 2,871
===========
TELEPHONES & TELECOMMUNICATIONS [4.0%]
BellSouth
4.200%, 09/15/09 1,000 986
Deutsche Telekom International
Finance
5.250%, 07/22/13 475 441
New Cingular Wireless Services
8.125%, 05/01/12 400 427
Verizon Communications
5.550%, 02/15/16 1,000 922
Verizon Global Funding
7.250%, 12/01/10 25 26
-----------
TOTAL TELEPHONES & TELECOMMUNICATIONS 2,802
===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 33
schedule of investments
SEPTEMBER 30, 2008
CORPORATE BOND FUND (CONTINUED)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
WASTE DISPOSAL [1.0%]
Waste Management
6.875%, 05/15/09 $ 735 $ 737
===========
TOTAL CORPORATE BONDS
(Cost $52,156) 48,944
===========
U.S. GOVERNMENT MORTGAGE-BACKED
OBLIGATIONS [7.0%]
FFCB REMIC, Ser IA4, Cl 1
5.770%, 02/21/14 858 871
FHLMC REMIC, Ser 2982,
Cl NB
5.500%, 02/15/29 450 459
FHLMC REMIC, Ser R004,
Cl A1
5.125%, 12/15/13 756 769
FHLMC REMIC, Ser R015,
Cl AN
3.750%, 02/15/13 856 846
FNMA REMIC, Ser 2002-56,
Cl MC
5.500%, 09/25/17 870 883
FNMA REMIC, Ser 2006-B1,
Cl AB
6.000%, 06/25/16 216 220
FNMA REMIC, Ser 2007-B1,
Cl BE
5.450%, 12/25/20 857 860
-----------
TOTAL U.S. GOVERNMENT MORTGAGE-
BACKED OBLIGATIONS
(Cost $4,871) 4,908
===========
MUNICIPAL BONDS [2.9%]
CALIFORNIA [1.4%]
California State, City of Industry,
Sales Tax Project, RB, MBIA
5.000%, 01/01/12 955 965
===========
WISCONSIN [1.5%]
De Pere, Unified School District,
GO, FGIC
Pre-Refunded @ 100 (C)
4.500%, 10/01/11 995 1,039
===========
TOTAL MUNICIPAL BONDS
(Cost $2,010) 2,004
===========
FACE
AMOUNT (000)
DESCRIPTION /SHARES VALUE (000)
- --------------------------------------------------- ------------ -----------
U.S. GOVERNMENT AGENCY OBLIGATIONS [2.5%]
FHLMC
5.500%, 09/15/11 $ 460 $ 487
5.125%, 04/18/11 1,250 1,306
-----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost$1,781) 1,793
===========
U.S. TREASURY OBLIGATION [0.8%]
U.S.Treasury Inflation Protection Security
2.000%, 01/15/14 595 594
-----------
TOTAL U.S. TREASURY OBLIGATION
(Cost $610) 594
===========
MORTGAGE-BACKED SECURITY [0.0%]
Residential Asset Mortgage Products, Ser
2003-RS5, Cl AI4
3.700%, 09/25/31 26 26
-----------
TOTAL MORTGAGE-BACKED SECURITY
(Cost $26) 26
===========
COMMERCIAL PAPER [8.0%]
BANKS [2.0%]
Dexia Delaware
2.830%, 11/10/08 1,400 1,396
===========
INVESTMENT BANKER/BROKER DEALER [3.1%]
ING US Funding
2.570%, 10/07/08 2,200 2,199
===========
MACHINERY [2.9%]
Caterpillar (A)
2.150%, 10/30/08 2,000 1,996
===========
TOTAL COMMERCIAL PAPER
(Cost $5,591) 5,591
===========
CASH EQUIVALENT [8.6%]
Goldman Sachs Financial Square Funds-Government
Fund,
2.040%* 6,025,662 6,026
-----------
TOTAL CASH EQUIVALENT
(Cost $6,026) 6,026
===========
TOTAL INVESTMENTS [99.4%]
(Cost $73,071) $ 69,886
===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 34
schedule of investments
SEPTEMBER 30, 2008
CORPORATE BOND FUND (CONCLUDED)
DESCRIPTION
PERCENTAGES ARE BASED ON NET ASSETS OF $70,317 ($ THOUSANDS).
* THE RATE REPORTED IS THE 7-DAY EFFECTIVE YIELD AS OF SEPTEMBER 30, 2008.
(A) SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF
1933. THESE SECURITIES ARE DEEMED LIQUID.THESE SECURITIES MAY BE RESOLD IN
TRANSACTIONS EXEMPT FROM REGISTRATION NORMALLY TO QUALIFIED INSTITUTIONS.
ON SEPTEMBER 30, 2008, THE VALUE OF THESE SECURITIES AMOUNTED TO $3,914
(000), REPRESENTING 5.6% OF THE NET ASSETS OF THE FUND.
(B) FLOATING RATE SECURITY -- THE RATE REPORTED IS THE RATE IN EFFECT ON
SEPTEMBER 30, 2008.
(C) PRE-REFUNDED SECURITY -- THE MATURITY DATE SHOWN IS THE PRE-REFUNDED DATE.
CL -- CLASS
FFCB -- FEDERAL FARM CREDIT BANK
FGIC -- FINANCIAL GUARANTY INSURANCE COMPANY
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
GO -- GENERAL OBLIGATION
MBIA -- MUNICIPAL BOND INSURANCE ASSOCIATION
MTN -- MEDIUM TERM NOTE
RB -- REVENUE BOND
REMIC -- REAL ESTATE MORTGAGE INVESTMENT CONDUIT
SER -- SERIES
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 35
schedule of investments
SEPTEMBER 30, 2008
GOVERNMENT BOND FUND
TYPE OF SECURITY WEIGHTINGS (UNAUDITED)*:
(BAR CHART)
U.S. Government Mortgage-Backed Obligations 62.9%
U.S. Government Agency Obligations 22.0%
U.S. Treasury Obligations 8.9%
Short-Term Investments 6.2%
* Percentages based on total investments.
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS [62.8%]
FFCB REMIC, Ser IA2, Cl 1
5.220%, 10/21/13 $ 1,281 $ 1,293
FFCB REMIC, Ser IA3, Cl 1
5.370%, 09/25/13 3,335 3,374
FFCB REMIC, Ser IA4, Cl 1
5.770%, 02/21/14 4,182 4,247
FFCB REMIC, Ser IA8, Cl 1
4.650%, 01/21/14 3,237 3,226
FHLMC REMIC, Ser R002, Cl AH
4.750%, 07/15/15 1,728 1,731
FHLMC REMIC, Ser R003, Cl AG
5.125%, 10/15/15 1,991 2,009
FHLMC REMIC, Ser R005, Cl AB
5.500%, 12/15/18 945 959
FHLMC REMIC, Ser R007, Cl AC
5.875%, 05/15/16 1,807 1,845
FHLMC REMIC, Ser R009, Cl AK
5.750%, 12/15/18 1,972 2,018
FHLMC REMIC, Ser R010, Cl AB
5.500%, 12/15/19 3,948 3,976
FHLMC REMIC, Ser R011, Cl AB
5.500%, 12/15/20 1,644 1,654
FHLMC REMIC, Ser R012, Cl AB
5.500%, 12/15/20 1,653 1,676
FHLMC REMIC, Ser R013, Cl AB
6.000%, 12/15/21 2,244 2,281
FHLMC REMIC, Ser R014, Cl AL
5.500%, 10/15/14 1,096 1,109
FHLMC REMIC, Ser R015, Cl AN
3.750%, 02/15/13 1,399 1,383
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
FHLMC REMIC, Ser R016, Cl AM
5.125%, 06/15/18 $ 1,474 $ 1,480
FNMA ARM (A)
4.549%, 03/01/34 704 706
FNMA REMIC, Ser 119, Cl DG
5.500%, 01/25/36 941 943
FNMA REMIC, Ser R009, Cl AJ
5.750%, 12/15/18 2,341 2,377
GNMA
8.000%, 08/15/22 12 13
7.500%, 06/15/24 7 7
7.500%, 05/15/26 6 6
7.500%, 04/15/32 31 34
7.000%, 12/15/16 15 15
6.000%, 01/15/29 13 13
GNMA ARM (A)
5.000%, 08/20/35 170 173
3.625%, 04/20/35 703 686
GNMA REMIC, Ser 31, Cl PB
5.500%, 02/16/32 3,986 4,041
-----------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED
OBLIGATIONS
(Cost $42,994) 43,275
===========
U.S. GOVERNMENT AGENCY OBLIGATIONS [22.0%]
FHLB
5.250%, 10/14/11 2,500 2,502
5.000%, 12/11/15 2,500 2,574
FNMA
7.125%, 06/15/10 2,000 2,131
6.625%, 09/15/09 2,750 2,835
6.250%, 02/01/11 3,870 4,048
5.500%, 03/15/11 1,000 1,053
-----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $14,976) 15,143
===========
U.S. TREASURY OBLIGATIONS [8.9%]
U.S.Treasury Note
6.000%, 08/15/09 4,950 5,123
4.500%, 02/28/11 880 931
4.250%, 08/15/13 45 48
-----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $6,119) 6,102
===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 36
schedule of investments
SEPTEMBER 30, 2008
GOVERNMENT BOND FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------- ------------ -----------
CASH EQUIVALENT [6.2%]
Goldman Sachs Financial Square Funds -
Government Fund, 2.040%* 4,298,006 $ 4,298
-----------
TOTAL CASH EQUIVALENT
(Cost $4,298) 4,298
===========
TOTAL INVESTMENTS [99.9%]
(Cost $68,387) $ 68,818
===========
PERCENTAGES ARE BASED ON NET ASSETS OF $68,858 ($ THOUSANDS).
* THE RATE REPORTED IS THE 7-DAY EFFECTIVE YIELD AS OF SEPTEMBER 30, 2008.
(A) FLOATING RATE SECURITY -- THE RATE REPORTED IS THE RATE IN EFFECT ON
SEPTEMBER 30, 2008.
ARM -- ADJUSTABLE RATE MORTGAGE
CL -- CLASS
FFCB -- FEDERAL FARM CREDIT BANK
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
REMIC -- REAL ESTATE MORTGAGE INVESTMENT CONDUIT
SER -- SERIES
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 37
schedule of investments
SEPTEMBER 30, 2008
CALIFORNIA TAX EXEMPT BOND FUND
ISSUER INDUSTRY WEIGHTINGS (UNAUDITED)*:
(BAR CHART)
Education 26.7%
General Revenue 22.9%
General Obligation 13.3%
Water 8.7%
Public Facilities 7.3%
Healthcare 6.5%
Industrial Development 6.2%
Utilities 2.6%
Transportation 1.7%
Short-Term Investment 1.5%
Equipment 0.9%
Airport 0.7%
Housing 0.7%
Power 0.3%
* Percentages based on total investments.
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
MUNICIPAL BONDS [97.2%]
ARIZONA [2.2%]
Arizona School Facilities Board, Ser C, COP, FSA
Callable 09/01/14 @ 100
5.000%, 09/01/15 $ 750 $ 794
===========
CALIFORNIA [82.5%]
Antelope Valley, Unified High School District,
Ser A, GO, MBIA Callable 08/01/12 @ 101
5.000%, 08/01/23 250 241
Azusa, Redevelopment Agency, Mortgage-Backed
Securities Program, Ser A, RB, ETM (A)
6.875%, 10/01/12 200 227
Bay Area, Infrastructure Financing
Authority, State Payment Acceleration
Project, RB, XLCA Callable 08/01/11 @ 100
5.000%, 08/01/14 500 512
Bay Area, Infrastructure Financing Authority,
State Payment Acceleration Project, RB, FGIC
Callable 08/01/14 @ 100
5.000%, 08/01/17 350 357
Big Bear Lake,Water Authority, RB, MBIA
6.000%, 04/01/11 200 209
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
Burbank, Public Financing Authority,
Golden State Redevelopment Project, Ser A,
TA, AMBAC Callable 12/01/13 @ 100
5.250%, 12/01/18 $ 100 $ 102
Burbank, Public Financing Authority, Golden
State Redevelopment Project, Ser A, TA, AMBAC
Pre-Refunded @ 100 (B)
5.250%, 12/01/13 75 82
California State, Department of Water
Resources,Water Systems Project J-2, RB
7.000%, 12/01/12 500 568
California State, Economic Recovery Authority,
Ser A, GO
5.250%, 01/01/11 500 525
California State, Educational Facilities
Authority, Pooled College & University
Projects, Ser A, RB
4.300%, 04/01/09 100 101
California State, Educational Facilities
Authority, Stanford University Project, Ser
T-4, RB
5.000%, 03/15/14 350 373
California State, GO Callable 02/01/12 @ 100
5.000%, 02/01/18 175 178
California State, GO Pre-Refunded @ 100 (B)
5.250%, 09/01/10 165 172
California State, GO Pre-Refunded @ 100 (B)
5.250%, 09/01/10 10 10
California State, GO Pre-Refunded @ 100 (B)
5.250%, 09/01/10 25 26
California State, GO Pre-Refunded @ 100 (B)
5.250%, 10/01/10 20 21
California State, GO Pre-Refunded @ 100 (B)
5.250%, 10/01/10 50 53
California State, GO Pre-Refunded @ 100 (B)
5.000%, 02/01/12 400 426
California State, GO Pre-Refunded @ 100 (B)
5.250%, 04/01/12 200 215
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 38
schedule of investments
SEPTEMBER 30, 2008
CALIFORNIA TAX EXEMPT BOND FUND (CONTINUED)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
California State, GO
5.000%, 04/01/10 $ 215 $ 223
California State, Health Facilities Financing
Authority, Cedars-Sinai Medical Center
Projects, Ser A, RB Pre-Refunded @ 101 (B)
6.250%, 12/01/09 490 516
California State, Health Facilities Financing
Authority,Valley Care Project, Ser A, RB
Pre-Refunded @ 100 (B)
5.375%, 05/01/12 500 539
California State, Infrastructure & Economic
Authority, Bay Area Toll Bridges Project, Ser
A, RB, FSA Pre-Refunded @ 100 (B)
5.250%, 07/01/13 125 136
California State, Infrastructure & Economic
Authority, Energy Efficiency Master Trust
Project, Ser A, RB
5.000%, 03/01/11 315 330
California State, Public Works Board Lease,
Department of Corrections Project, Ser B, RB,
MBIA Callable 11/03/08 @ 101
5.000%, 09/01/21 100 101
California State, Public Works Board Lease,
Department of Corrections-Administration
Project, Ser A, RB, AMBAC Callable 03/01/12
@100
5.250%, 03/01/18 155 159
California State, Public Works Board Lease,
Department of Corrections-State Prisons
Project, Ser A, RB, AMBAC
5.250%, 12/01/13 600 626
California State, Public Works Board Lease,
Department of General Services - Butterfield
Street Project, Ser A, RB
5.000%, 06/01/10 500 515
California State, Public Works Board Lease,
Department of Mental Health Project, Ser A,
RB
5.250%, 06/01/13 200 212
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
California State, Public Works Board Lease,
Various University Projects, Ser A, RB, MBIA
5.500%, 06/01/14 $ 250 $ 268
California Statewide, Communities Development
Authority, Irvine-UCI East Apartments
Project, RB Pre-Refunded @ 100 (B)
5.625%, 05/15/15 360 403
Carlsbad, Public Financing Authority, Municipal
Golf Course Project, Ser A, RB, AMBAC
4.500%, 09/01/16 350 361
Castaic Lake, Water Agency, Water Systems
Improvement Project, Ser A, COP, MBIA
7.000%, 08/01/13 300 344
Chaffey, Unified High School District, Ser B,
GO, FGIC Pre-Refunded @ 101 (B)
5.500%, 08/01/10 400 425
Coachella Valley, Water District Authority, Flood
Control Project, COP, AMBAC Callable 11/03/08
@ 101
5.000%, 10/01/11 250 253
Colton, Joint Unified School District, Election
2001 Project, Ser B, GO, FSA Callable
08/01/14 @ 100
5.250%, 08/01/19 250 259
Contra Costa County, Public Financing Authority,
Medical Center Project, Ser B, RB, MBIA
5.000%, 06/01/11 250 261
Corona, Public Financing Authority, City Hall
Project, Ser B, RB, MBIA Callable 09/01/12
@100
5.250%, 09/01/16 350 365
Culver City, Redevelopment Finance Authority,
TA, AMBAC
5.500%, 11/01/14 75 77
Dry Creek Joint Elementary School District,
Ser A, GO, FSA
3.000%, 08/01/11 200 182
East Bay, Regional Park District, GO
5.000%, 09/01/13 250 268
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 39
schedule of investments
SEPTEMBER 30, 2008
CALIFORNIA TAX EXEMPT BOND FUND (CONTINUED)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
Eastern California, Municipal Water District,
Ser A, COP, MBIA
5.000%, 07/01/14 $ 500 $ 532
Escondido, Union School District, Refunding &
Financing Project, COP, MBIA
4.750%, 07/01/19 735 754
Fresno, Unified School District, Election 2001
Project, Ser D, GO, MBIA Callable 08/01/13
@102
5.000%, 08/01/17 200 207
Fruitvale, School District, GO, FSA Callable
08/01/09 @ 102
5.000%, 08/01/19 200 202
Golden State Tobacco Securitization, Ser B, RB
Pre-Refunded @ 100 (B)
5.625%, 06/01/13 500 535
Golden State Tobacco Securitization, Ser B, RB
Pre-Refunded @ 100 (B)
5.500%, 06/01/13 500 533
Golden State,Tobacco Settlement, Ser A, RB
Callable 06/01/09 @ 100
5.000%, 06/01/19 250 227
Golden State,Tobacco Settlement, Ser A, RB,
AMBAC
Callable 06/01/10 @ 100
5.000%, 06/01/20 500 478
Golden State,Tobacco Settlement, Ser A-1, RB
Pre-Refunded @ 100 (B)
6.750%, 06/01/13 370 414
Golden State,Tobacco Settlement, Ser A-3, RB
Pre-Refunded @ 100 (B)
7.875%, 06/01/13 675 787
Golden State,Tobacco Settlement, Ser B, RB, FGIC
Pre-Refunded @ 100 (B)
5.500%, 06/01/13 100 107
Golden State,Tobacco Settlement, Ser B, RB
Pre-Refunded @ 100 (B)
5.600%, 06/01/10 170 177
Grossmont Unified High School District, GO, MBIA
Callable 08/01/15 @ 100
5.000%, 08/01/23 265 257
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
Hawthorne, School District, COP, FSA
Pre-Refunded @ 101 (B)
6.000%, 11/01/10 $ 485 $ 514
Indio, Public Financing Authority, Public
Capital Improvement Project, Ser B, RB, AMBAC
(C)
3.800%, 11/01/37 500 487
Kern, High School District, GO, ETM
7.100%, 08/01/12 290 332
Los Angeles County, Capital Asset Leasing, Ser
A, RB
3.250%, 06/01/10 310 312
Los Angeles, Municipal
Improvement Authority, Central Library Project,
RB, MBIA Callable 06/01/12 @ 100
5.500%, 06/01/18 500 518
Los Angeles, Ser A, GO, MBIA
4.000%, 09/01/09 250 254
Los Angeles, Unified School District, GO, MBIA
5.750%, 07/01/16 500 557
Los Angeles, Unified School District, Ser A-1,
GO, MBIA
Callable 07/01/14 @ 100
5.000%, 07/01/17 125 130
Los Angeles,Wastewater Systems
Authority, Sub-Ser B, RB, MBIA
5.000%, 06/01/10 500 518
Metropolitan Water District, Southern California
Waterworks Authority, RB
5.750%, 07/01/09 500 513
Metropolitan Water District, Southern California
Waterworks Authority, Ser A, RB, MBIA
5.250%, 07/01/11 200 212
Metropolitan Water District, Southern California
Waterworks Authority, Ser A, RB
5.750%, 07/01/21 280 308
North Orange County, Community College District,
Ser A, GO, MBIA
Pre-Refunded @ 101 (B)
5.375%, 08/01/12 525 571
Northern California,Transmission Resource
Authority, Ore Transmission Project, Ser A,
RB, MBIA
7.000%, 05/01/13 250 273
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 40
schedule of investments
SEPTEMBER 30, 2008
CALIFORNIA TAX EXEMPT BOND FUND (CONTINUED)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
Oakland, Redevelopment Agency,
Central District Redevelopment
Project, TA, AMBAC
5.500%, 02/01/14 $ 475 $ 502
Oakland, Ser A, GO, MBIA
Callable 01/15/13 @ 100
5.000%, 01/15/21 500 493
Oakley, Civic Center Project, COP
4.000%, 05/01/12 230 231
Oxnard, School District, Election
2006 Project, Ser A, GO, CIFG
6.750%, 08/01/11 300 329
Palm Springs, Financing Authority,
Public Capital Improvement
Lease Project, RB, AMBAC
Callable 04/01/17 @ 100
5.000%, 04/01/20 470 467
Pinole, Redevelopment Agency,
Pinole Vista Redevelopment
Project,TA, FSA
Callable 08/01/09 @ 101
5.250%, 08/01/14 100 102
Redwoods, Community College
District, 2004 Election Project,
Ser A, GO, MBIA
Callable 08/01/14 @ 100
5.000%, 08/01/23 420 398
Riverside,Water Authority, RB
Callable 11/03/08 @ 101
5.375%, 10/01/12 90 91
Riverside,Water Authority, RB
Pre-Refunded @ 101 (B)
5.375%, 10/01/08 10 10
Sacramento, City Unified School
District, Ser A, GO, FSA
4.250%, 07/01/09 75 76
San Diego, Unified School District,
Election 1998 Project, Ser E, GO, FSA
Callable 07/01/13 @ 101
5.250%, 07/01/16 100 107
San Diego, Unified School District,
Ser D, GO, FGIC
Callable 07/01/12 @ 100
5.000%, 07/01/27 500 525
San Francisco (City & County),
Airports Commission Authority,
Ser 27B, RB, FGIC
Callable 05/01/11 @ 100
5.250%, 05/01/12 250 259
San Francisco (City & County), GO
Callable 06/15/10 @ 102
5.000%, 06/15/11 235 248
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
San Francisco (City & County),
Ser R1, GO
5.000%, 06/15/14 $ 500 $ 533
San Jose, Unified School District,
Ser A, GO, FSA
Callable 08/01/11 @ 101
5.375%, 08/01/19 150 156
San Ysidro, School District,
Election 1997 Project, Ser C, GO, MBIA
6.000%, 08/01/11 205 221
Sanger, Unified School
District, GO, MBIA
5.350%, 08/01/15 250 256
Santa Margarita, Dana Point
Authority, Ser A, RB, AMBAC
Callable 08/01/14 @ 100
5.000%, 08/01/15 165 175
Santa Monica, Community
College District, 2004 Election
Project, Ser A, GO, MBIA
Pre-Refunded @ 100 (B)
5.000%, 05/01/15 400 433
Santa Monica, Public Financing
Authority, Public Safety
Facilities Project, RB
Callable 07/01/09 @ 101
5.250%, 07/01/14 100 102
Solano County, COP, MBIA
Pre-Refunded @ 100 (B)
5.250%, 11/01/12 100 108
Southern Kern, Unified School District,
Ser A, GO, FGIC
Callable 11/01/13 @ 100
4.500%, 11/01/18 220 220
Tamalpais, Unified High School
District, GO, MBIA
Callable 08/01/11 @ 101
4.875%, 08/01/17 100 102
University of California,
Ser B, RB, AMBAC
Pre-Refunded @ 100 (B)
5.500%, 05/15/14 500 551
University of California,
Ser Q, RB, FSA
Callable 09/01/11 @ 101
5.000%, 09/01/22 500 495
-----------
TOTAL CALIFORNIA 29,120
===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 41
schedule of investments
SEPTEMBER 30, 2008
CALIFORNIA TAX EXEMPT BOND FUND (CONTINUED)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
ILLINOIS [0.6%]
Illinois State, Civic Center
Authority, RB, FSA
Callable 12/15/10 @ 100
5.500%, 12/15/14 $ 200 $ 208
===========
MISSOURI [0.6%]
St Louis, Parking Facilities
Authority, Downtown Parking
Facilities Project, Sub-Ser A, RB
Pre-Refunded @ 100 (B)
6.000%, 02/01/12 200 218
===========
NEW JERSEY [1.0%]
New Jersey State,Turnpike
Authority, Ser C, RB, MBIA, ETM
6.500%, 01/01/16 315 354
===========
NEW MEXICO [1.1%]
Santa Fe, Educational Facilities
Authority, College of Santa Fe Project, RB
Pre-Refunded @ 100 (B)
5.750%, 10/01/14 350 384
===========
NEW YORK [1.6%]
New York State, Local Assistance
Correction Authority, Ser E, RB
6.000%, 04/01/14 500 547
===========
SOUTH CAROLINA [2.3%]
Columbia,Tourism Development
Fee Pledge Project, COP, AMBAC
Callable 06/01/13 @ 100
5.250%, 06/01/16 350 365
South Carolina, Jobs & Economic
Development Authority,
Palmetto Health Project, Ser C, RB
Pre-Refunded @ 100 (B)
6.875%, 08/01/13 400 456
-----------
TOTAL SOUTH CAROLINA 821
===========
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
TEXAS [0.3%]
San Angelo,Waterworks & Sewer
System Authority, Refunding & Improvements
Projects, RB, FSA
Callable 04/01/11 @ 100
5.250%, 04/01/19 $ 100 $ 102
===========
UTAH [0.4%]
Central Utah,Water Conservancy
District, Ser D, GO Pre-Refunded @ 100 (B)
4.600%, 04/01/09 140 142
===========
WASHINGTON [1.7%]
Clark County, GO, MBIA
Pre-Refunded @ 100 (B)
5.125%, 12/01/11 250 267
King County, NJB Properties
Project, Ser A, RB
5.000%, 12/01/14 325 344
-----------
TOTAL WASHINGTON 611
===========
WEST VIRGINIA [1.5%]
West Virginia State, Economic
Development Authority,
Correctional Juvenile Project,
Ser A, RB, MBIA
Callable 06/01/12 @ 101
5.500%, 06/01/17 500 517
===========
PUERTO RICO [1.4%]
Puerto Rico, Electric Power
Authority, Ser CC, RB, MBIA
Callable 11/03/08 @ 101
5.250%, 07/01/09 100 101
Puerto Rico, Highway &
Transportation Authority, RB, FSA
5.500%, 07/01/09 250 254
Puerto Rico, Municipal Finance
Agency, Ser A, RB, FSA
Callable 11/03/08 @ 101
5.250%, 07/01/10 130 131
-----------
TOTAL PUERTO RICO 486
===========
TOTAL MUNICIPAL BONDS
(Cost $34,785) 34,304
===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 42
schedule of investments
SEPTEMBER 30, 2008
CALIFORNIA TAX EXEMPT BOND FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------- ------------ -----------
CASH EQUIVALENT [1.5%]
Federated California Municipal
Money Market Fund, Cl I, 4.670%* 535,533 $ 535
-----------
TOTAL CASH EQUIVALENT
(Cost $536) 535
===========
TOTAL INVESTMENT [98.7%]
(Cost $35,321) $ 34,839
===========
PERCENTAGES ARE BASED ON NET ASSETS OF $35,311 ($ THOUSANDS).
* THE RATE REPORTED IS THE 7-DAY EFFECTIVE YIELD AS OF SEPTEMBER 30, 2008.
(A) SECURITIES ARE COLLATERALIZED UNDER AN AGREEMENT FROM FHLMC & FNMA.
(B) PRE-REFUNDED SECURITY -- THE MATURITY DATE SHOWN IS THE PRE-REFUNDED DATE.
(C) FLOATING RATE SECURITY -- THE RATE REPORTED IS THE RATE IN EFFECT ON
SEPTEMBER 30, 2008.
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
CIFG -- CDC IXIS FINANCIAL GUARANTEE
CL -- CLASS
COP -- CERTIFICATE OF PARTICIPATION
ETM -- ESCROW TO MATURITY
FGIC -- FINANCIAL GUARANTY INSURANCE COMPANY
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
FSA -- FINANCIAL SECURITY ASSISTANCE
GO -- GENERAL OBLIGATION
MBIA -- MUNICIPAL BOND INSURANCE ASSOCIATION
RB -- REVENUE BOND
SER -- SERIES
TA -- TAX ALLOCATION
XLCA -- XL CAPITAL ASSURANCE
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 43
schedule of investments
SEPTEMBER 30, 2008
HIGH YIELD BOND FUND
ISSUER INDUSTRY WEIGHTINGS (UNAUDITED)*:
(BAR CHART)
Industrials 68.3%
Gas Transmission 11.0%
Utilities 8.7%
Telecommunication Services 5.7%
Financials 3.6%
Transportation 2.1%
Short-Term Investments 0.4%
Common Stock 0.2%
* Percentages based on total investments.
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
CORPORATE BONDS [97.1%]
AEROSPACE & DEFENSE [2.1%]
BE Aerospace
8.500%, 07/01/18 $ 100 $ 97
DRS Technologies
6.625%, 02/01/16 100 101
Esterline Technologies
7.750%, 06/15/13 100 98
L-3 Communications
5.875%, 01/15/15 200 181
Sequa (A)
11.750%, 12/01/15 100 84
TransDigm (F)
7.750%, 07/15/14 100 94
-----------
TOTAL AEROSPACE & DEFENSE 655
===========
AIRLINES [0.4%]
DAE Aviation Holdings (A)
11.250%, 08/01/15 150 139
===========
APPAREL/TEXTILES [0.8%]
Hanesbrands (B)
6.508%, 12/15/14 100 83
Levi Strauss
9.750%, 01/15/15 100 83
Phillips-Van Heusen
7.250%, 02/15/11 75 74
-----------
TOTAL APPAREL/TEXTILES 240
===========
AUTO RENT & LEASE [1.3%]
Avis Budget Car Rental
7.750%, 05/15/16 100 62
H&E Equipment Services
8.375%, 07/15/16 100 74
Hertz
10.500%, 01/01/16 150 125
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
RSC Equipment Rental
9.500%, 12/01/14 $ 100 $ 76
United Rentals North America
6.500%, 02/15/12 100 84
-----------
TOTAL AUTO RENT & LEASE 421
===========
AUTOMOTIVE [1.1%]
General Motors
7.700%, 04/15/16 200 80
7.125%, 07/15/13 250 115
UCI Holdco (B)
11.708%, 12/15/13 184 140
-----------
TOTAL AUTOMOTIVE 335
===========
AUTOPARTS [1.0%]
Accuride
8.500%, 02/01/15 150 95
Asbury Automotive Group
7.625%, 03/15/17 100 64
Pep Boys
7.500%, 12/15/14 100 68
TRW Automotive (A)
7.250%, 03/15/17 100 79
-----------
TOTAL AUTOPARTS 306
===========
BEAUTY PRODUCTS [0.3%]
Chattem
7.000%, 03/01/14 100 94
===========
BROADCASTING & CABLE [6.5%]
Allbritton Communications
7.750%, 12/15/12 150 128
Atlantic Broadband Finance
9.375%, 01/15/14 100 88
Barrington Broadcasting Group
10.500%, 08/15/14 100 64
Bonten Media Acquisition (A)
9.000%, 06/01/15 150 88
Cablevision Systems, Ser B
8.000%, 04/15/12 250 235
Charter Communications Holdings II
10.250%, 09/15/10 300 270
CSC Holdings
7.625%, 07/15/18 100 87
DirecTV Holdings (A)
7.625%, 05/15/16 50 45
Echostar DBS
6.625%, 10/01/14 200 160
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 44
schedule of investments
SEPTEMBER 30, 2008
HIGH YIELD BOND FUND (CONTINUED)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
Fisher Communications
8.625%, 09/15/14 $ 150 $ 151
Kabel Deutschland
10.625%, 07/01/14 200 196
Local TV Finance (A)
9.250%, 06/15/15 100 65
Mediacom Capital
7.875%, 02/15/11 150 136
Newport Television (A)
13.000%, 03/15/17 100 71
Nexstar Finance Holdings (D)
11.375%, 04/01/13 128 106
Olympus Communications (C)
10.625%, 07/15/04 100 --
Quebecor Media
7.750%, 03/15/16 75 66
Videotron Ltee
6.875%, 01/15/14 100 95
-----------
TOTAL BROADCASTING & CABLE 2,051
===========
BUILDING & CONSTRUCTION [1.7%]
DR Horton
5.625%, 01/15/16 125 92
Esco (A)
8.625%, 12/15/13 50 49
Interline Brands
8.125%, 06/15/14 50 50
International Utility Structures (C)
10.750%, 02/01/08 100 1
KB Home
8.625%, 12/15/08 50 50
Nortek
8.500%, 09/01/14 200 114
Panolam Industries International
10.750%, 10/01/13 250 150
Ply Gem Industries (A)
11.750%, 06/15/13 50 43
-----------
TOTAL BUILDING & CONSTRUCTION 549
===========
BUSINESS SERVICES [1.0%]
Corrections
7.500%, 05/01/11 100 99
FTI Consulting
7.625%, 06/15/13 50 51
Geo Group
8.250%, 07/15/13 150 149
-----------
TOTAL BUSINESS SERVICES 299
===========
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
CHEMICALS [3.8%]
Airgas (A)
7.125%, 10/01/18 $ 100 $ 97
Basell (A)
8.375%, 08/15/15 200 94
Chemtura (F)
6.875%, 06/01/16 50 40
Georgia Gulf
9.500%, 10/15/14 150 92
Huntsman International
7.875%, 11/15/14 115 99
Innophos
8.875%, 08/15/14 100 100
Momentive Performance Materials
9.750%, 12/01/14 100 79
Mosaic (A)
7.375%, 12/01/14 75 78
Nalco
8.875%, 11/15/13 150 150
Nova Chemicals
6.500%, 01/15/12 150 134
Polymer Holdings (D) (E) (F)
18.387%, 07/15/14 250 144
Terra Capital, Ser B
7.000%, 02/01/17 100 95
-----------
TOTAL CHEMICALS 1,202
===========
CIRCUIT BOARDS [0.2%]
Viasystems
10.500%, 01/15/11 50 49
===========
COMMERCIAL SERVICES [2.3%]
ARAMARK
8.500%, 02/01/15 100 94
6.301%, 02/01/15 (B) 100 87
Iron Mountain
8.750%, 07/15/18 (F) 150 152
8.625%, 04/01/13 100 99
Mobile Mini
6.875%, 05/01/15 75 65
Mobile Services Group
9.750%, 08/01/14 150 140
Tube City IMS
9.750%, 02/01/15 100 89
-----------
TOTAL COMMERCIAL SERVICES 726
===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 45
schedule of investments
SEPTEMBER 30, 2008
HIGH YIELD BOND FUND (CONTINUED)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
COMPUTER SYSTEM DESIGN & SERVICES [0.4%]
Activant Solutions
9.500%, 05/01/16 $ 100 $ 74
Unisys
12.500%, 01/15/16 65 62
-----------
TOTAL COMPUTER SYSTEM DESIGN & SERVICES 136
===========
CONGLOMERATE [0.3%]
KAR Holdings
8.750%, 05/01/14 100 82
===========
CONSUMER PRODUCTS & SERVICES [4.8%]
Central Garden & Pet
9.125%, 02/01/13 100 77
Jarden
7.500%, 05/01/17 75 62
Johnsondiversey Holdings (D)
10.670%, 05/15/13 200 194
Johnsondiversey, Ser B
9.625%, 05/15/12 150 150
Libbey Glass (B)
9.928%, 06/01/11 100 92
MSX International (A)
12.500%, 04/01/12 100 65
Prestige Brands
9.250%, 04/15/12 90 85
Sealy Mattress
8.250%, 06/15/14 200 157
Sotheby's (A)
7.750%, 06/15/15 100 91
Southern States Cooperative (A)
10.500%, 11/01/10 200 202
Spectrum Brands
7.375%, 02/01/15 275 118
Steinway Musical Instruments (A)
7.000%, 03/01/14 100 87
Visant Holding
8.750%, 12/01/13 100 92
Yankee Acquisition, Ser B
9.750%, 02/15/17 50 29
-----------
TOTAL CONSUMER PRODUCTS & SERVICES 1,501
===========
CONTAINERS & PACKAGING [2.5%]
Crown Americas
7.750%, 11/15/15 150 146
Exopack Holding
11.250%, 02/01/14 100 84
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
Intertape Polymer US
8.500%, 08/01/14 $ 100 $ 84
Owens Brockway Glass Container
6.750%, 12/01/14 150 142
Plastipak Holdings (A)
8.500%, 12/15/15 100 85
Solo Cup
8.500%, 02/15/14 200 160
Stone Container Finance
7.375%, 07/15/14 100 77
-----------
TOTAL CONTAINERS & PACKAGING 778
===========
DIVERSIFIED OPERATIONS [0.8%]
Bombardier (A)
8.000%, 11/15/14 75 74
Trinity Industries
6.500%, 03/15/14 200 189
-----------
TOTAL DIVERSIFIED OPERATIONS 263
===========
EDUCATIONAL SERVICES [0.3%]
Education Management
10.250%, 06/01/16 50 40
8.750%, 06/01/14 60 50
-----------
TOTAL EDUCATIONAL SERVICES 90
===========
ELECTRIC UTILITIES [5.9%]
AES
8.000%, 10/15/17 100 90
8.000%, 06/01/20 (A) 50 44
Allegheny Energy Supply
7.800%, 03/15/11 200 199
Aquila
7.625%, 11/15/09 100 101
Calpine Generating (B) (C)
11.070%, 04/01/10 200 15
CMS Energy
6.875%, 12/15/15 150 137
Edison Mission Energy
7.000%, 05/15/17 150 135
Energy Future Holdings (A)
10.875%, 11/01/17 500 451
ESI Tractebel Acquisition, Ser B
7.990%, 12/30/11 47 47
Mirant North America
7.375%, 12/31/13 150 141
NRG Energy
7.375%, 02/01/16 100 90
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 46
schedule of investments
SEPTEMBER 30, 2008
HIGH YIELD BOND FUND (CONTINUED)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
PNM Resources
9.250%, 05/15/15 $ 100 $ 99
Reliant Energy
7.625%, 06/15/14 200 150
Sierra Pacific Resources
8.625%, 03/15/14 70 72
Teco Finance, MTN
6.572%, 11/01/17 100 91
-----------
TOTAL ELECTRIC UTILITIES 1,862
===========
ENERGY & POWER [0.2%]
VeraSun Energy
9.375%, 06/01/17 200 79
===========
ENTERTAINMENT & GAMING [9.8%]
AMC Entertainment
11.000%, 02/01/16 100 98
Buffalo Thunder Development Authority (A)
9.375%, 12/15/14 75 31
CCM Merger (A)
8.000%, 08/01/13 175 142
Choctaw Resort Development Enterprise (A)
7.250%, 11/15/19 188 141
Chukchansi Economic Development Authority (A)
8.000%, 11/15/13 150 120
Circus & Eldorado Joint Venture/Silver Legacy
Capital
10.125%, 03/01/12 150 127
Fontainebleau Las Vegas Holdings (A)
10.250%, 06/15/15 150 42
Gaylord Entertainment
8.000%, 11/15/13 100 87
Greektown Holdings (A) (C)
10.750%, 12/01/13 100 69
Herbst Gaming (C)
8.125%, 06/01/12 150 8
Indianapolis Downs & Capital (A)
11.000%, 11/01/12 100 68
Inn of the Mountain Gods Resort & Casino
12.000%, 11/15/10 150 102
Isle of Capri Casinos
7.000%, 03/01/14 200 134
Jacobs Entertainment
9.750%, 06/15/14 75 50
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
Mashantucket Western Pequot Tribe (A)
8.500%, 11/15/15 $ 170 $ 111
MGM Mirage
8.500%, 09/15/10 200 184
6.750%, 09/01/12 100 78
6.000%, 10/01/09 100 94
Mohegan Tribal Gaming Authority
7.125%, 08/15/14 150 107
MTR Gaming Group, Ser B
9.750%, 04/01/10 200 190
OED/Diamond Jo
8.750%, 04/15/12 100 91
Penn National Gaming
6.875%, 12/01/11 100 94
San Pasqual Casino (A)
8.000%, 09/15/13 100 90
Scientific Games
6.250%, 12/15/12 100 97
Seminole Hard Rock Entertainment (A) (B)
5.319%, 03/15/14 100 75
Seneca Gaming
7.250%, 05/01/12 100 87
Shingle Springs Tribal Gaming Authority (A)
9.375%, 06/15/15 100 72
Snoqualmie Entertainment Authority (A)(B)
6.875%, 02/01/14 100 72
Speedway Motorsports
6.750%, 06/01/13 100 94
Tunica-Biloxi Gaming Authority (A)
9.000%, 11/15/15 125 115
Waterford Gaming (A)
8.625%, 09/15/14 86 68
Wynn Las Vegas Capital
6.625%, 12/01/14 175 149
-----------
TOTAL ENTERTAINMENT & GAMING 3,087
===========
FINANCIAL SERVICES [1.2%]
Ford Motor Credit
7.375%, 10/28/09 200 161
7.375%, 02/01/11 100 66
GMAC
6.750%, 12/01/14 425 163
-----------
TOTAL FINANCIAL SERVICES 390
===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 47
schedule of investments
SEPTEMBER 30, 2008
HIGH YIELD BOND FUND (CONTINUED)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
FOOD, BEVERAGE & TOBACCO [2.5%]
Alliance One International
8.500%, 05/15/12 $ 100 $ 92
Beverages & More (A)
9.250%, 03/01/12 100 94
Chiquita Brands International
7.500%, 11/01/14 100 77
Constellation Brands
8.375%, 12/15/14 150 148
Del Monte
8.625%, 12/15/12 50 49
Land O' Lakes
8.750%, 11/15/11 100 101
Leiner Health Products (C)
11.000%, 06/01/12 100 5
Le-Nature's (A) (C)
9.000%, 06/15/13 150 23
National Beef Packing
10.500%, 08/01/11 100 100
Smithfield Foods, Ser B
8.000%, 10/15/09 100 97
-----------
TOTAL FOOD, BEVERAGE & TOBACCO 786
===========
GAS/NATURAL GAS [2.3%]
Colorado Interstate Gas
6.800%, 11/15/15 150 142
El Paso
7.000%, 05/15/11 275 275
7.000%, 06/15/17 150 134
Targa Resources
8.500%, 11/01/13 200 177
-----------
TOTAL GAS/NATURAL GAS 728
===========
INSURANCE [0.3%]
USI Holdings (A)(B)
6.679%, 11/15/14 125 95
===========
MACHINERY [1.5%]
Baldor Electric
8.625%, 02/15/17 125 119
Case New Holland
7.125%, 03/01/14 100 91
Terex (F)
8.000%, 11/15/17 75 68
7.375%, 01/15/14 100 91
Trimas
9.875%, 06/15/12 115 98
-----------
TOTAL MACHINERY 467
===========
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
MEDICAL PRODUCTS & SERVICES [2.4%]
Advanced Medical Optics
7.500%, 05/01/17 $ 100 $ 87
Bio-Rad Laboratories
7.500%, 08/15/13 100 100
Community Health Systems
8.875%, 07/15/15 150 142
DJO Finance
10.875%, 11/15/14 25 24
HCA
9.250%, 11/15/16 50 49
5.750%, 03/15/14 100 78
Tenet Healthcare
9.250%, 02/01/15 200 189
Vanguard Health Holding II
9.000%, 10/01/14 100 97
-----------
TOTAL MEDICAL PRODUCTS & SERVICES 766
===========
METALS & MINING [1.7%]
American Rock Salt
9.500%, 03/15/14 150 154
Freeport-McMoRan Copper & Gold
8.250%, 04/01/15 125 123
Noranda Aluminium Acquisition (B)
6.828%, 05/15/15 150 114
Novelis
7.250%, 02/15/15 150 131
-----------
TOTAL METALS & MINING 522
===========
MISCELLANEOUS BUSINESS SERVICES [1.5%]
Affinion Group
11.500%, 10/15/15 100 93
Carriage Services
7.875%, 01/15/15 200 176
Compagnie Generale de Geophysique
7.500%, 05/15/15 100 96
Lamar Media
6.625%, 08/15/15 100 83
MCBC Holdings (A) (B)
9.086%, 10/15/14 50 35
-----------
TOTAL MISCELLANEOUS BUSINESS SERVICES 483
===========
MISCELLANEOUS MANUFACTURING [3.1%]
AGY Holding
11.000%, 11/15/14 100 89
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 48
schedule of investments
SEPTEMBER 30, 2008
HIGH YIELD BOND FUND (CONTINUED)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
Altra Industrial Motion
9.000%, 12/01/11 $ 100 $ 103
Coleman Cable
9.875%, 10/01/12 100 90
Dresser-Rand Group
7.375%, 11/01/14 133 124
General Cable
7.125%, 04/01/17 100 90
Hawker Beechcraft Acquisition
9.750%, 04/01/17 75 67
8.500%, 04/01/15 100 91
Koppers Holdings (D)
13.995%, 11/15/14 250 224
MAAX (C)
9.750%, 06/15/12 175 3
Mueller Water Products (F)
7.375%, 06/01/17 100 79
-----------
TOTAL MISCELLANEOUS MANUFACTURING 960
===========
PAPER & RELATED PRODUCTS [3.3%]
Abitibi-Consolidated of Canada (A)
13.750%, 04/01/11 100 99
Appleton Papers, Ser B
9.750%, 06/15/14 100 77
Catalyst Paper
7.375%, 03/01/14 250 170
Cellu Tissue Holdings
9.750%, 03/15/10 100 92
Domtar
7.125%, 08/15/15 150 138
Georgia-Pacific
7.700%, 06/15/15 100 92
Newark Group
9.750%, 03/15/14 200 70
Norampac Industries
6.750%, 06/01/13 100 75
Smurfit Kappa Funding
7.750%, 04/01/15 150 125
Verso Paper Holdings
9.125%, 08/01/14 100 86
-----------
TOTAL PAPER & RELATED PRODUCTS 1,024
===========
PETROLEUM & FUEL PRODUCTS [11.2%]
Atlas Pipeline Partners
8.125%, 12/15/15 200 184
Chesapeake Energy
6.875%, 01/15/16 100 91
6.250%, 01/15/18 100 85
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
Cimarex Energy
7.125%, 05/01/17 $ 100 $ 92
Clayton Williams Energy
7.750%, 08/01/13 150 131
Comstock Resources
6.875%, 03/01/12 150 136
Copano Energy (A)
7.750%, 06/01/18 100 87
Dynegy Holdings
7.750%, 06/01/19 100 80
6.875%, 04/01/11 100 91
Forest Oil
8.000%, 12/15/11 100 100
Frontier Oil
6.625%, 10/01/11 150 142
Helix Energy Solutions Group (A)
9.500%, 01/15/16 100 93
Linn Energy (A)
9.875%, 07/01/18 100 87
MarkWest Energy Partners,
Ser B
8.500%, 07/15/16 150 142
Newfield Exploration
6.625%, 09/01/14 150 135
OPTI Canada
7.875%, 12/15/14 100 88
Pacific Energy Partners
7.125%, 06/15/14 100 98
Parker Drilling
9.625%, 10/01/13 150 145
Petroplus Finance (A)
7.000%, 05/01/17 150 125
Pioneer Natural Resources
5.875%, 07/15/16 100 86
Plains Exploration & Production
7.750%, 06/15/15 150 138
7.625%, 06/01/18 100 89
Pride International
7.375%, 07/15/14 100 96
Regency Energy Partners
8.375%, 12/15/13 65 59
Southern Star Central
6.750%, 03/01/16 100 92
Southwestern Energy (A)
7.500%, 02/01/18 100 97
Swift Energy
7.625%, 07/15/11 100 95
Tesoro
6.625%, 11/01/15 100 82
Whiting Petroleum
7.000%, 02/01/14 300 255
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 49
schedule of investments
SEPTEMBER 30, 2008
HIGH YIELD BOND FUND (CONTINUED)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
Williams
7.625%, 07/15/19 $ 50 $ 49
6.375%, 10/01/10 (A) 150 147
Williams Partners
7.250%, 02/01/17 100 93
-----------
TOTAL PETROLEUM & FUEL PRODUCTS 3,510
===========
PRINTING & PUBLISHING [2.0%]
Dex Media (D)
10.042%, 11/15/13 150 69
Dex Media West, Ser B
8.500%, 08/15/10 100 88
Idearc (F)
8.000%, 11/15/16 100 27
MediMedia USA (A)
11.375%, 11/15/14 50 49
R.H. Donnelley
11.750%, 05/15/15 (A) 168 103
6.875%, 01/15/13 3 1
Sheridan Group
10.250%, 08/15/11 150 134
Valassis Communications
8.250%, 03/01/15 100 69
Warner Music Group
7.375%, 04/15/14 100 74
-----------
TOTAL PRINTING & PUBLISHING 614
===========
RADIO [0.2%]
XM Satellite Radio Holdings (A)
13.000%, 08/01/13 100 59
===========
REAL ESTATE INVESTMENT TRUSTS [0.4%]
Host Marriott, Ser O
6.375%, 03/15/15 150 122
===========
RETAIL [3.8%]
ACE Hardware (A)
9.125%, 06/01/16 100 85
Autonation (A)
7.000%, 04/15/14 100 87
Buffets (C)
12.500%, 11/01/14 100 1
Claire's Stores
9.625%, 06/01/15 100 27
Ferrellgas Partners (A)
6.750%, 05/01/14 100 81
Group 1 Automotive
8.250%, 08/15/13 100 91
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
Inergy
8.250%, 03/01/16 $ 200 $ 184
Landry's Restaurants
9.500%, 12/15/14 100 90
Leslie's Poolmart
7.750%, 02/01/13 100 85
NPC International
9.500%, 05/01/14 100 82
Penske Auto Group
7.750%, 12/15/16 100 72
Rare Restaurant Group (A)
9.250%, 05/15/14 100 70
Sbarro
10.375%, 02/01/15 50 34
Sonic Automotive
8.625%, 08/15/13 70 48
Suburban Propane Partners
6.875%, 12/15/13 100 89
True Temper Sports
8.375%, 09/15/11 150 84
-----------
TOTAL RETAIL 1,210
===========
RUBBER & PLASTIC [0.6%]
Cooper Tire & Rubber
8.000%, 12/15/19 100 76
Cooper-Standard Automotive
8.375%, 12/15/14 50 32
Goodyear Tire & Rubber
9.000%, 07/01/15 98 97
-----------
TOTAL RUBBER & PLASTIC 205
===========
SEMI-CONDUCTORS [1.1%]
Amkor Technology
9.250%, 06/01/16 100 84
Flextronics International
6.250%, 11/15/14 100 84
Freescale Semiconductor
10.125%, 12/15/16 150 96
Sensata Technologies
8.000%, 05/01/14 100 85
-----------
TOTAL SEMI-CONDUCTORS 349
===========
STEEL & STEEL WORKS [1.6%]
AK Steel
7.750%, 06/15/12 150 144
ArcelorMittal USA
6.500%, 04/15/14 150 152
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 50
schedule of investments
SEPTEMBER 30, 2008
HIGH YIELD BOND FUND (CONTINUED)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
Gerdau Ameristeel
10.375%, 07/15/11 $ 100 $ 103
Ryerson (A)
12.000%, 11/01/15 75 64
Steel Dynamics
7.375%, 11/01/12 50 46
-----------
TOTAL STEEL & STEEL WORKS 509
===========
TELEPHONES & TELECOMMUNICATIONS [5.5%]
American Tower
7.125%, 10/15/12 150 148
Broadview Networks Holdings
11.375%, 09/01/12 100 77
Centennial Communications
10.125%, 06/15/13 100 99
8.125%, 02/01/14 50 49
Cincinnati Bell
8.375%, 01/15/14 150 130
Citizens Communications
7.125%, 03/15/19 150 119
Fairpoint Communications (A)
13.125%, 04/01/18 100 91
MetroPCS Wireless
9.250%, 11/01/14 100 93
Nordic Telephone (A)
8.875%, 05/01/16 50 46
Qwest
7.625%, 06/15/15 289 251
Radio One
8.875%, 07/01/11 100 82
Rogers Wireless
9.625%, 05/01/11 100 107
7.250%, 12/15/12 50 51
Sprint Capital
8.375%, 03/15/12 150 135
Time Warner Telecom Holdings
9.250%, 02/15/14 100 93
Virgin Media Finance
9.125%, 08/15/16 150 126
West
11.000%, 10/15/16 55 40
-----------
TOTAL TELEPHONES & TELECOMMUNICATIONS 1,737
===========
FACE
AMOUNT (000)
DESCRIPTION /SHARES VALUE (000)
- --------------------------------------------------- ------------ -----------
TRANSPORTATION SERVICES [2.1%]
Kansas City Southern Railway
8.000%, 06/01/15 $ 100 $ 98
Navios Maritime Holdings
9.500%, 12/15/14 100 92
Pegasus Solutions (A)
10.500%, 04/15/15 100 69
Ship Finance International
8.500%, 12/15/13 200 194
Stena
7.000%, 12/01/16 150 141
Swift Transportation (A)(B)
10.554%, 05/15/15 200 62
-----------
TOTAL TRANSPORTATION SERVICES 656
===========
WASTE DISPOSAL [1.3%]
Allied Waste North America, Ser B
7.125%, 05/15/16 225 210
Waste Services
9.500%, 04/15/14 100 98
WCA Waste
9.250%, 06/15/14 100 94
-----------
TOTAL WASTE DISPOSAL 402
===========
TOTAL CORPORATE BONDS
(Cost $ 36,885) 30,538
===========
COMMON STOCK [0.2%]
BROADCASTING & CABLE [0.2%]
Olympus* (E) (F) 8,500 9
Time Warner Cable, Cl A* 1,967 48
-----------
TOTAL BROADCASTING & CABLE 57
===========
BUILDING & CONSTRUCTION SUPPLIES [0.0%]
Dayton Superior* 149 --
===========
PAPER & FOREST PRODUCTS [0.0%]
Tembec* 5,625 14
===========
TOTAL COMMON STOCK
(Cost $221) 71
===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 51
schedule of investments
SEPTEMBER 30, 2008
HIGH YIELD BOND FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------- ------------ -----------
CASH EQUIVALENTS [0.4%]
Evergreen Select Money Market Fund,
Institutional Class, 2.790%** 53,112 $ 53
Fidelity Institutional Domestic Money Market
Portfolio, Cl I, 2.660%** 53,112 53
-----------
TOTAL CASH EQUIVALENTS
(Cost $106) 106
===========
TOTAL INVESTMENTS [97.7%]
(Cost $37,212) $ 30,715
===========
PERCENTAGES ARE BASED ON NET ASSETS OF $31,447 ($ THOUSANDS).
* NON-INCOME PRODUCING SECURITY.
** THE RATE REPORTED IS THE 7-DAY EFFECTIVE YIELD AS OF SEPTEMBER 30, 2008.
(A) SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF
1933. THESE SECURITIES ARE DEEMED LIQUID. THESE SECURITIES MAY BE RESOLD IN
TRANSACTIONS EXEMPT FROM REGISTRATION NORMALLY TO QUALIFIED INSTITUTIONS.
ON SEPTEMBER 30, 2008, THE VALUE OF THESE SECURITIES AMOUNTED TO $5,097
(000), REPRESENTING 16.2% OF THE NET ASSETS OF THE FUND.
(B) FLOATING RATE SECURITY -- THE RATE REPORTED IS THE RATE IN EFFECT ON
SEPTEMBER 30, 2008.
(C) IN DEFAULT ON INTEREST PAYMENTS. RATE SHOWN REPRESENTS THE LAST COUPON RATE
PRIOR TO DEFAULT.
(D) STEP BOND -- THE RATE REPORTED IS THE RATE IN EFFECT ON SEPTEMBER 30,
2008. THE COUPON ON A STEP BOND CHANGES ON A SPECIFIC DATE.
(E) SECURITY IS FAIR VALUED.
(F) SECURITY IS CONSIDERED ILLIQUID.
CL -- CLASS
MTN -- MEDIUM TERM NOTE
SER -- SERIES
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 52
schedule of investments
SEPTEMBER 30, 2008
PRIME MONEY MARKET FUND
TYPE OF SECURITY WEIGHTINGS (UNAUDITED)*:
(BAR CHART)
Commercial Paper 34.3%
Short-Term Investments 24.2%
Certificates of Deposit 19.8%
U.S. Government Agency Obligations 10.8%
Corporate Bonds 10.0%
Municipal Bond 0.9%
* Percentages are based on total investments.
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
COMMERCIAL PAPER (A) [34.3%]
BANKS [17.0%]
ANZ National International (B)
2.830%, 11/19/08 $ 50,000 $ 49,810
Bank of America (B)
2.970%, 03/11/09 50,000 50,000
Bayerische Landesbank
3.019%, 11/12/08 50,000 49,826
HSBC USA
2.634%, 10/08/08 50,000 49,975
Landesbank Baden-Wuerttemberg
2.983%, 10/29/08 50,000 49,885
UBS Finance Delaware
2.820%, 10/16/08 50,000 49,942
Wells Fargo Bank
2.570%, 10/27/08 50,000 50,000
Westpac Banking
2.933%, 01/02/09 40,000 40,000
-----------
TOTAL BANKS 389,438
===========
FINANCIAL SERVICES [8.7%]
AIG Funding
3.046%, 12/09/08 50,000 49,713
General Elelctric Capital
2.625%, 10/30/08 50,000 49,896
Rabobank USA Financial
2.678%, 12/03/08 50,000 49,767
Toyota Motor Credit
2.674%, 12/29/08 50,000 49,672
-----------
TOTAL FINANCIAL SERVICES 199,048
===========
SECURITY BROKERS & DEALERS [8.6%]
Citigroup Funding
3.149%, 03/03/09 50,000 49,341
ING US Funding
3.052%, 03/10/09 50,000 49,332
JPMorgan Chase
2.689%, 12/17/08 50,000 49,717
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
Morgan Stanley
2.763%, 10/28/08 $ 50,000 $ 49,897
-----------
TOTAL SECURITY BROKERS & DEALERS 198,287
===========
TOTAL COMMERCIAL PAPER
(Cost $786,773) 786,773
===========
U.S. GOVERNMENT AGENCY OBLIGATIONS [10.8%]
FHLB DN (C)
2.202%, 10/06/08 50,000 49,985
2.323%, 10/10/08 50,000 49,971
2.131%, 12/09/08 50,000 49,797
2.172%, 12/15/08 50,000 49,775
3.863%, 12/23/08 47,729 47,319
-----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $246,847) 246,847
===========
CORPORATE BONDS [10.1%]
BANKS [6.6%]
Barclays (D)
2.778%, 02/05/09 50,000 50,000
National Australian Bank,
MTN (B) (D)
3.009%, 02/19/09 50,000 50,000
US Bank, MTN (D)
2.588%, 06/15/09 50,000 50,000
-----------
TOTAL BANKS 150,000
===========
FINANCIAL SERVICES [2.9%]
American Honda,
MTN (B) (D)
2.924%, 02/05/09 35,000 35,000
John Deere Capital, MTN
4.625%, 04/15/09 32,000 32,229
-----------
TOTAL FINANCIAL SERVICES 67,229
===========
SECURITY BROKERS & DEALERS [0.6%]
Credit Suisse USA
3.875%, 01/15/09 13,041 13,056
===========
TOTAL CORPORATE BONDS
(Cost $230,285) 230,285
===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 53
schedule of investments
SEPTEMBER 30, 2008
PRIME MONEY MARKET FUND (CONTINUED)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
MUNICIPAL BOND [0.8%]
CALIFORNIA [0.8%]
County of Los Angeles
California, Ser C, RB, MBIA
3.836%, 06/30/09 $ 20,000 $ 19,438
-----------
TOTAL MUNICIPAL BOND
(Cost $19,438) 19,438
===========
CERTIFICATES OF DEPOSIT [19.8%]
Bank of Ireland
3.477%, 01/26/09 50,000 50,000
Bank of Nova Scotia
2.690%, 11/06/08 50,000 50,001
Banque Nationale de Paris
2.700%, 10/08/08 50,000 50,000
Calyon
3.130%, 02/18/09 50,000 50,004
Depfa Bank
3.140%, 02/19/09 50,000 50,002
Deutsche Bank
2.550%, 11/05/08 50,000 50,000
Dexia Credit
2.830%, 10/29/08 50,000 50,000
Natixis
3.050%, 01/06/09 50,000 50,000
Toronto Dominion Bank
2.610%, 10/20/08 53,500 53,504
-----------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $453,511) 453,511
===========
CASH EQUIVALENT [0.0%]
Goldman Sachs Financial
Square Funds - Government
Fund, 2.040%* 157,498 158
-----------
TOTAL CASH EQUIVALENT
(Cost $158) 158
===========
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
REPURCHASE AGREEMENTS (E) [24.2%]
Banc of America
1.400%, dated 09/30/08, repurchased on
10/01/08, repurchase price $125,004,861
(collateralized by U.S. Government agency
obligations, ranging in par value,
$10,523,000-$117,812,000, 2.311%-2.679%,
11/19/08-12/31/08; with total market value
$127,500,205) $ 125,000 $ 125,000
Barclays
1.500%, dated 09/30/08, repurchased on
10/01/08, repurchase price $178,307,429
(collateralized by a Freddie Mac
obligation, par value, $182,081,000,
5.815%, 03/17/23; with total market value
$181,866,119) 178,300 178,300
Deutsche Bank
2.000%, dated 09/30/08, repurchased on
10/01/08, repurchase price $125,006,944
(collateralized by U.S. Government agency
obligations, ranging in par value,
$16,304,000-$75,790,000, 0.514%-4.000%,
10/07/08-01/28/13; with total market value
$127,500,655) 125,000 125,000
JPMorgan Chase
1.500%, dated 09/30/08, repurchased on
10/01/08, repurchase price $125,005,208
(collateralized by U.S. Government agency
obligations, ranging in par value,
$15,795,000-$76,160,000, 2,922%-5.170%,
02/09/09-07/15/11; with total market value
$127,501,616) 125,000 125,000
-----------
TOTAL REPURCHASE AGREEMENTS
(Cost $553,300) 553,300
===========
TOTAL INVESTMENTS [100.0%]
(Cost $2,290,312) $ 2,290,312
===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 54
schedule of investments
SEPTEMBER 30, 2008
PRIME MONEY MARKET FUND (CONCLUDED)
DESCRIPTION
PERCENTAGES ARE BASED ON NET ASSETS OF $2,290,646 ($ THOUSANDS).
* THE RATE REPORTED IS THE 7-DAY EFFECTIVE YIELD AS OF SEPTEMBER 30, 2008.
(A) THE RATE REPORTED IS THE EFFECTIVE YIELD AT TIME OF PURCHASE.
(B) SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF
1933. THESE SECURITIES ARE DEEMED LIQUID.THESE SECURITIES MAY BE RESOLD IN
TRANSACTIONS EXEMPT FROM REGISTRATION NORMALLY TO QUALIFIED INSTITUTIONS.ON
SEPTEMBER 30, 2008,THE VALUE OF THESE SECURITIES AMOUNTED TO $184,810
(000), REPRESENTING 8.1% OF THE NET ASSETS OF THE FUND.
(C) ZERO COUPON SECURITY -- THE RATE REPORTED IS THE EFFECTIVE YIELD AT TIME OF
PURCHASE.
(D) FLOATING RATE SECURITY -- THE RATE REPORTED IS THE RATE IN EFFECT ON
SEPTEMBER 30, 2008.
(E) TRI-PARTY REPURCHASE AGREEMENT.
DN -- DISCOUNT NOTE
FHLB -- FEDERAL HOME LOAN BANK
MBIA -- MUNICIPAL BOND INSURANCE ASSOCIATION
MTN -- MEDIUM TERM NOTE
RB -- REVENUE BOND
SER -- SERIES
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 55
schedule of investments
SEPTEMBER 30, 2008
GOVERNMENT MONEY MARKET FUND
TYPE OF SECURITY WEIGHTINGS (UNAUDITED)*:
(BAR CHART)
U.S. Government Agency Obligations 66.9%
Repurchase Agreements 33.1%
* Percentages are based on total investments.
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
U.S. GOVERNMENT AGENCY OBLIGATIONS [67.8%]
FAMC DN (A)
2.092%, 10/14/08 $ 50,000 $ 49,963
FHLB
2.200%, 10/09/08 49,475 49,475
5.250%, 12/24/08 40,000 40,190
2.500%, 01/22/09 50,000 50,021
3.250%, 02/02/09 50,000 50,000
3.050%, 06/18/09 30,000 30,000
2.900%, 06/30/09 30,000 30,000
2.800%, 09/24/09 30,000 30,000
3.000%, 09/25/09 37,710 37,710
FHLB DN (A)
2.075%, 10/01/08 100,000 100,000
2.287%, 10/02/08 50,000 49,997
2.019%, 10/03/08 100,000 99,989
2.202%, 10/06/08 50,000 49,985
2.152%, 10/07/08 33,926 33,914
2.323%, 10/10/08 50,000 49,971
2.349%, 10/15/08 50,000 49,954
2.002%, 10/16/08 50,000 49,958
2.330%, 10/17/08 50,000 49,948
2.510%, 10/20/08 50,000 49,934
2.379%, 10/21/08 50,000 49,934
2.400%, 10/27/08 50,000 49,914
2.465%, 10/29/08 50,000 49,905
2.440%, 10/31/08 75,000 74,848
2.450%, 11/03/08 50,000 49,888
2.456%, 11/07/08 50,000 49,875
2.157%, 11/21/08 50,000 49,848
2.596%, 11/24/08 50,000 49,806
2.525%, 11/25/08 75,000 74,712
2.612%, 11/26/08 50,000 49,798
2.536%, 12/01/08 75,000 74,680
2.309%, 12/02/08 45,000 44,822
2.546%, 12/03/08 75,000 74,668
2.172%, 12/15/08 50,000 49,775
2.111%, 12/16/08 50,000 49,778
2.172%, 12/17/08 60,934 60,652
2.818%, 12/18/08 50,000 49,697
3.025%, 01/05/09 50,000 49,600
3.025%, 01/06/09 50,000 49,596
FHLMC, MTN
2.300%, 04/01/09 33,760 33,753
2.450%, 04/09/09 50,000 50,000
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
FHLMC DN (A)
2.410%, 10/22/08 $ 50,000 $ 49,930
3.522%, 11/10/08 50,000 49,810
FNMA DN (A)
2.411%, 10/06/08 50,000 49,983
2.411%, 10/07/08 50,000 49,980
2.412%, 10/08/08 50,000 49,977
2.371%, 10/28/08 50,000 49,912
-----------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS
(Cost $2,386,150) 2,386,150
===========
REPURCHASE AGREEMENTS (B) [33.6%]
Bank of America
1.400%, dated 09/30/08,
repurchased on 10/01/08,
repurchase price $250,009,722
(collateralized by U.S.
Government agency
obligations, ranging in
par value, $52,815,000-
$203,790,000, 2.500%-
2.906%, 01/05/09-03/17/09;
with total market value
$255,001,106) 250,000 250,000
Barclays
1.500%, dated 09/30/08,
repurchased on 10/01/08,
repurchase price $380,515,854
(collateralized by U.S.
Government agency
obligations, ranging in
par value, $60,620,000-
$250,000, 000,2.924%-
5.500%, 05/29/09-04/03/18;
with total market value
$388,110,389) 380,500 380,500
Deutsche Bank
2.000%, dated 09/30/08,
repurchased on 10/01/08,
repurchase price $225,012,500
(collateralized by U.S.
Government agency
obligations, ranging in
par value, $2,687,000-
$95,441,000, 0.348%-
5.000%, 10/20/08--01/30/14;
with total market value
$229,500,000) 225,000 225,000
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 56
schedule of investments
SEPTEMBER 30, 2008
GOVERNMENT MONEY MARKET FUND (CONCLUDED)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
JPMorgan Chase
1.500%, dated 09/30/08,
repurchased on 10/01/08,
repurchase price $125,005,208
(collateralized by U.S.
Government agency
obligations,ranging in
par value,$5,000-$50,138,000,
0.600%-9.375%, 10/15/18-
04/15/30; with total market
value $127,500,969) $ 125,000 $ 125,000
UBS Warburg
0.950%, dated 09/30/08,
repurchased on 10/01/08,
repurchase price $200,005,278
(collateralized by U.S.
Government agency
obligations, ranging in
par value, $44,881,000-
$155,340,000, 0.000%-
4.250%, 10/06/08-08/15/14;
with total market value
$204,002,957) 200,000 200,000
-----------
TOTAL REPURCHASE AGREEMENTS
(Cost $1,180,500) 1,180,500
===========
TOTAL INVESTMENTS [101.4%]
(Cost $3,566,650) $ 3,566,650
===========
PERCENTAGES ARE BASED ON NET ASSETS OF $3,516,356 ($ THOUSANDS).
(A) ZERO COUPON SECURITY. THE RATE REPORTED IS THE EFFECTIVE YIELD AT TIME OF
PURCHASE.
(B) TRI-PARTY REPURCHASE AGREEMENT.
DN -- DISCOUNT NOTE
FAMC -- FEDERAL AGRICULTURAL MORTGAGE CORPORATION
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
MTN -- MEDIUM TERM NOTE
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 57
schedule of investments
SEPTEMBER 30, 2008
CALIFORNIA TAX EXEMPT MONEY MARKET FUND
ISSUER INDUSTRY WEIGHTINGS (UNAUDITED)*:
(BAR CHART)
General Obligation 19.4%
Education 17.2%
General Revenue 14.3%
Industrial Development 10.9%
Water 10.4%
Power 9.9%
Utilities 6.7%
Transportation 5.1%
Healthcare 3.1%
Public Facilities 2.7%
Equipment 0.3%
* Percentages based on total investments.
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
MUNICIPAL BONDS [86.4%]
CALIFORNIA [76.3%]
ABAG, Finance Authority for
Non-Profit Corporations,
Public Policy Institute,
Ser A, RB (A) (B) (C)
8.000%, 11/01/31 $ 2,870 $ 2,870
ABAG, Finance Authority for
Non-Profit Corporations,
Ser C, COP (A) (B) (C)
5.050%, 10/01/27 7,820 7,820
ABAG, Finance Authority for
Non-Profit Corporations,
Ser D, COP (A) (B) (C)
5.050%, 10/01/27 6,310 6,310
Bay Area Toll Authority,
RB (B) (C)
7.750%, 04/01/45 5,000 5,000
California Educational
Facilities Authority,
Ser B, RB (B) (C)
7.000%, 01/01/54 6,000 6,000
California Infrastructure &
Economic Development
Bank, Ser A, RB (A) (B) (C)
3.950%, 07/01/38 9,900 9,900
California Infrastructure &
Economic Development
Bank, Ser C, RB (A) (B) (C)
7.050%, 07/01/34 6,000 6,000
California State, Bay Area Toll
Authority, San Francisco
Bay Area Project,
Ser A-1, RB (B) (C)
7.660%, 04/01/45 12,000 12,000
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
California State, Community
College Financing Authority,
Ser A,TRAN
3.500%, 06/30/09 $ 10,000 $ 10,128
California State, Daily
Kindergarten University
Project, Ser A-3,
GO (A) (B) (C)
6.250%, 05/01/34 5,000 5,000
California State, Daily
Kindergarten University
Project, Ser B-3,
GO (A) (B) (C)
5.050%, 05/01/34 1,200 1,200
California State, Department
of Water Resource & Power,
Ser B-4, RB (A) (B) (C)
5.000%, 05/01/22 11,900 11,900
California State, Department
of Water Resource & Power,
Ser C-15, RB (A) (B) (C)
7.000%, 05/01/22 5,000 5,000
California State, Department
of Water Resource & Power,
Ser C-7, RB, FSA (B) (C)
7.500%, 05/01/22 14,925 14,925
California State, Department
of Water Resource & Power,
Sub-Ser F-2, RB (A) (B) (C)
3.650%, 05/01/20 10,000 10,000
California State, Department
of Water Resource & Power,
Sub-Ser I-1, RB (A) (B) (C)
3.950%, 05/01/22 11,500 11,500
California State, Economic
Development Financing
Authority, KQED
Incorporated Project,
RB (A) (B) (C)
7.300%, 04/01/20 1,335 1,335
California State, Economic
Recovery Authority,
Ser C-1, GO (B) (C)
6.250%, 07/01/23 21,470 21,470
California State, Economic
Recovery Authority,
Ser C-16, GO, FSA (B) (C)
8.000%, 07/01/23 14,250 14,250
California State, Economic
Recovery Authority,
Ser C-4, GO (B) (C)
3.750%, 07/01/23 16,080 16,080
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 58
schedule of investments
SEPTEMBER 30, 2008
CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
California State, Educational
Facilities Authority, Chapman
University Project,
RB (A) (B) (C)
7.300%, 12/01/30 $ 1,000 $ 1,000
California State, Educational
Facilities Authority, Pitzer
College Project,
Ser B, RB (A) (B) (C)
7.000%, 04/01/45 3,215 3,215
California State, Educational
Facilities Authority,
University of San Francisco
Project, RB (A) (B) (C)
7.200%, 05/01/30 5,000 5,000
California State, GO
Pre-Refunded @ 100 (D)
5.100%, 02/01/09 6,000 6,063
California State, Infrastructure
& Economic Authority,
J Paul Getty Trust Project,
Ser B, RB (B) (C)
3.950%, 05/01/16 8,210 8,210
California State, Infrastructure
& Economic Authority,
J Paul Getty Trust Project,
Ser B, RB (B) (C)
3.750%, 04/01/33 13,425 13,425
California State, Infrastructure
& Economic Authority,
J Paul Getty Trust Project,
Ser D, RB (B) (C)
3.750%, 04/01/33 3,700 3,700
California State, Ser A-1,
GO (A) (B) (C)
6.250%, 05/01/33 5,000 5,000
California State, Ser A-2,
GO (A) (B) (C)
5.000%, 05/01/33 21,050 21,050
California State, Ser A-3,
GO (A) (B) (C)
5.050%, 05/01/33 11,100 11,100
California State, Ser B,
Sub-Ser B-6,
GO (A) (B) (C)
3.650%, 05/01/40 16,480 16,480
California State, Ser B,
Sub-Ser B-7,
GO (A) (B) (C)
3.650%, 05/01/40 18,175 18,175
California State, Ser B-1,
GO (A) (B) (C)
7.650%, 05/01/33 7,000 7,000
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
California State, Ser C-2,
GO (A) (B) (C)
7.850%, 05/01/33 $ 7,700 $ 7,700
California State, Sub-Ser B-3,
GO (A) (B) (C)
8.500%, 05/01/40 3,145 3,145
California State, Sub-Ser B-4,
GO (A) (B) (C)
8.000%, 05/01/40 6,880 6,880
California State, Weekly
Kindergarten University
Project, Ser A-7,
GO (A) (B) (C)
7.000%, 05/01/34 2,695 2,695
California State, Weekly
Kindergarten University
Project, Ser A-8,
GO (A) (B) (C)
6.500%, 05/01/34 20,600 20,600
California State, Weekly
Kindergarten University
Project, Ser B-5,
GO (A) (B) (C)
7.600%, 05/01/34 12,725 12,725
California Statewide,
Communities Development
Authority, Masters
College Project,
RB (A) (B) (C)
7.050%, 02/01/37 3,000 3,000
California Statewide,
Communities Development
Authority, Park Century
School Project,
RB (A) (B) (C)
7.050%, 11/01/32 4,000 4,000
East Bay, Municipal Utilities
District Authority, Sub-Ser A,
RB, FSA (B) (C)
7.800%, 06/01/25 10,310 10,310
East Bay, Municipal Utilities
District Authority, Sub-Ser
A-1, RB (B) (C)
8.500%, 06/01/38 10,000 10,000
East Bay, Municipal Utilities
District Authority, Sub-Ser
C1, RB (B) (C)
7.600%, 06/01/26 7,355 7,355
East Bay, Municipal Utilities
District Authority, Sub-Ser
C2, RB (B) (C)
8.000%, 06/01/26 5,000 5,000
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 59
schedule of investments
SEPTEMBER 30, 2008
CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
East Bay, Municipal Utilities
District Authority, Sub-Ser
C3, RB (B) (C)
8.000%, 06/01/26 $ 2,775 $ 2,775
Glendale, Police Building
Project, COP (B) (C)
7.750%, 06/01/30 13,800 13,800
Irvine, Ser B, RB (A) (B) (C)
4.250%, 09/02/30 1,382 1,382
Irvine Ranch,Water District,
Ser B, GO (A) (B) (C)
4.000%, 05/01/37 5,000 5,000
Irvine, Improvement Board,
Act 1915 Project, District
#03-19, Ser A,
SAB (A) (B) (C)
4.750%, 09/02/29 9,388 9,388
Irvine, Improvement Board,
Act 1915 Project, District
#04-20, Ser A, RB (A) (B) (C)
4.750%, 09/02/30 6,760 6,760
Irvine, Improvement Board,
Act 1915 Project, District
#05-21, Ser A, RB (A) (B) (C)
4.250%, 09/02/31 19,430 19,430
Irvine, Improvement Board,
Act 1915 Project, District
#07-22, Ser A, RB (A) (B) (C)
4.250%, 09/02/32 9,950 9,950
Irvine, Improvement Board,
Act 1915 Project, District
#87-8, SAB (A) (B) (C)
4.750%, 09/02/24 5,889 5,889
Irvine, Improvement Board,
Act 1915 Project, District
#89-10, SAB (A) (B) (C)
4.750%, 09/02/15 4,905 4,905
Irvine, Improvement Board,
Act 1915 Project, District
#97-17, SAB (A) (B) (C)
4.750%, 09/02/23 7,150 7,150
Kern County,TRAN
3.000%, 06/30/09 14,000 14,146
Los Angeles,TRAN
3.000%, 06/30/09 11,000 11,117
Los Angeles County, Ser
A,TRAN
3.000%, 06/30/09 20,000 20,210
Los Angeles Unified School
District, Ser A,TRAN
3.000%, 07/30/09 13,000 13,157
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
Los Angeles, Department of
Water & Power, Sub-Ser
B-1, RB (B) (C)
7.700%, 07/01/35 $ 7,000 $ 7,000
Los Angeles, Department of
Water & Power, Sub-Ser
B-2, RB (B) (C)
4.500%, 07/01/35 20,250 20,250
Los Angeles, Unified School
District, Ser A-1,TRAN
4.000%, 12/29/08 17,500 17,535
Los Angeles,Wastewater Systems
Authority, Sub-Ser F-2,
RB (A) (B) (C)
7.050%, 06/01/32 7,000 7,000
Los Angeles,Water & Power
Resource Authority, Power
System Project,
Sub-Ser A-7, RB (B) (C)
7.670%, 07/01/35 5,000 5,000
Los Angeles,Water & Power
Resource Authority, Sub-Ser
B-1, RB (B) (C)
6.000%, 07/01/34 3,500 3,500
Los Angeles,Water & Power
Resource Authority, Sub-Ser
B-2, RB (B) (C)
7.000%, 07/01/34 12,600 12,600
Los Angeles,Water & Power
Resource Authority, Sub-Ser
B-3, RB (B) (C)
3.750%, 07/01/34 19,850 19,850
Los Angeles,Water & Power
Resource Authority, Sub-Ser
B-6, RB (B) (C)
4.000%, 07/01/34 12,600 12,600
Metropolitan Water District
of Southern California,
Ser B-2, RB (B) (C)
6.250%, 07/01/28 1,900 1,900
Oakland, Capital Equipment
Project, COP (A) (B) (C)
7.780%, 12/01/15 3,300 3,300
Oakland-Alameda County,
Coliseum Project, Ser C-1,
RB (A) (B) (C)
7.750%, 02/01/25 15,000 15,000
Orange County, Sanitation
District Authority, Ser A,
COP (B) (C)
4.250%, 08/01/29 10,420 10,420
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 60
schedule of investments
SEPTEMBER 30, 2008
CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
Orange County, Sanitation
District Authority, Ser B,
COP (B) (C)
4.250%, 08/01/30 $ 10,240 $ 10,240
Orange County,Water District
Authority, Ser A,
COP (B) (C)
7.630%, 08/01/42 2,800 2,800
Pasadena, Public Financing
Authority, Rose Bowl
Refinancing & Improvement
Project, RB (A) (B) (C)
8.500%, 12/01/23 17,425 17,425
Riverside County, Public
Facilities Authority, Ser C,
COP (A) (B) (C)
7.700%, 12/01/15 13,500 13,500
Sacramento County, Sanitation
District Authority, Sub-Ser B,
RB (B) (C)
4.250%, 12/01/37 6,000 6,000
Sacramento County, Sanitation
District Authority, Sub-Ser E,
RB (A) (B) (C)
7.700%, 12/01/40 6,500 6,500
San Diego County, Museum
of Art Project, COP (A) (B) (C)
7.050%, 09/01/30 1,400 1,400
San Diego County, Regional
Transportation Commission,
Ser B, RB (B) (C)
7.250%, 04/01/38 13,650 13,650
San Diego County, Regional
Transportation Commission,
Ser C, RB (B) (C)
7.900%, 04/01/38 5,000 5,000
San Francisco (City & County),
Unified School District,
TRAN
4.000%, 11/14/08 4,000 4,003
San Francisco Bay, Area Transit
Financing Authority, RB,
FGIC Pre-Refunded @
101 (D)
5.500%, 07/01/09 5,000 5,200
San Jose, Redevelopment Agency,
Merged Area Redevelopment
Project, Ser A, RB (A) (B) (C)
7.630%, 07/01/26 7,450 7,450
Santa Clara County, Financing
Authority, Multiple Facilities
Projects, Ser M, RB (A) (B) (C)
7.300%, 05/15/35 17,105 17,105
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
Santa Clara County, Financing
Authority,VMC Facility
Replacement Project, Ser B,
RB (B) (C)
8.000%, 11/15/25 $ 13,475 $ 13,475
Santa Clara Valley,Transportation
Authority, Ser C, RB (B) (C)
7.720%, 04/01/36 8,000 8,000
Santa Clara Valley,Transportation
Authority, Ser D, RB (B) (C)
6.250%, 04/01/36 6,000 6,000
Santa Clara, Electric Authority,
Sub-Ser B, RB (A) (B) (C)
7.970%, 07/01/27 5,000 5,000
Santa Cruz County,TRAN
3.000%, 07/06/09 5,000 5,051
Southern California,
Metropolitan Water
District Authority, Ser A,
RB (B) (C)
7.720%, 07/01/25 3,600 3,600
Southern California,
Metropolitan Water
District Authority, Ser B,
RB (B) (C)
6.000%, 07/01/27 4,200 4,200
Southern California,
Metropolitan Water
District Authority, Ser C-1,
RB (B) (C)
6.250%, 07/01/30 5,700 5,700
Southern California,
Metropolitan Water
District Authority, Ser C-3,
RB (B) (C)
7.670%, 07/01/30 8,375 8,375
Southern California,
Metropolitan Water
District Authority,Water
Works Authorization Project,
Ser B, RB (B) (C)
6.000%, 07/01/28 10,135 10,135
Southern California, Public
Power Authority, Southern
Transmission Project, Ser A,
RB, FSA (B) (C)
8.500%, 07/01/23 6,000 6,000
State of California, GO
Pre-Refunded @ 101 (D)
5.000%, 08/01/09 1,000 1,038
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 61
schedule of investments
SEPTEMBER 30, 2008
CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONTINUED)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
Turlock, Irrigation District, Capital
Improvement & Refunding
Project, COP (A) (B) (C)
4.000%, 01/01/31 $ 4,760 $ 4,760
Tustin, Improvement Board Act,
Reassessment District No.
95-2-A, Ser A, SAB (A) (B) (C)
5.500%, 09/02/13 8,050 8,050
University of California,
Regents Medical Center,
Ser B-1, RB (B) (C)
4.000%, 05/15/32 4,660 4,660
University of California,
Regents Medical Center,
Ser B-2, RB (B) (C)
3.500%, 05/15/32 5,480 5,480
University of California,
Ser M, RB, FGIC
Pre-Refunded @ 101 (D)
5.125%, 09/01/09 7,850 8,181
Ventura County,TRAN
3.500%, 07/01/09 10,000 10,140
-----------
TOTAL CALIFORNIA 900,648
===========
CONNECTICUT [2.5%]
Connecticut State, Health &
Educational Facility Authority,
Yale University
Project, Ser V-1, RB (B) (C)
3.750%, 07/01/36 15,000 15,000
Connecticut State, Health &
Educational Facility Authority,
Yale University
Project, Ser X-2, RB (B) (C)
7.628%, 07/01/37 6,000 6,000
Connecticut State, Health &
Educational Facility Authority,
Yale University
Project, Ser Y-2, RB (B) (C)
3.750%, 07/01/35 8,850 8,850
-----------
TOTAL CONNECTICUT 29,850
===========
ILLINOIS [1.0%]
Illinois State, Development
Finance Authority, Museum
Contemporary Art Project,
RB (A) (B) (C)
7.950%, 02/01/29 2,300 2,300
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
Illinois State, Finance Authority,
Northwestern Memorial
Project, Sub-Ser B-1,
RB (B) (C)
4.250%, 08/15/38 $ 5,000 $ 5,000
Illinois State, Finance Authority,
Northwestern University
Project, Sub-Ser A,
RB (B) (C)
7.500%, 12/01/34 4,600 4,600
-----------
TOTAL ILLINOIS 11,900
===========
MASSACHUSETTS [2.4%]
Massachusetts State, Development
Finance Agency, Harvard
University Project, Ser B-2,
RB (B) (C)
7.450%, 07/15/36 8,000 8,000
Massachusetts State, Development
Finance Agency, Harvard
University Project, Ser HH,
RB (B) (C)
6.400%, 07/15/33 5,950 5,950
Massachusetts State, Health &
Educational Facilities
Authority,Tufts University
Project, Ser N-1,
RB (B) (C)
7.400%, 08/15/40 14,200 14,200
-----------
TOTAL MASSACHUSETTS 28,150
===========
MICHIGAN [0.5%]
University of Michigan, Ser B,
RB (B) (C)
7.750%, 04/01/28 6,000 6,000
===========
NEVADA [1.0%]
Clark County, School District,
Ser A, GO, FSA (B) (C)
4.350%, 06/15/21 11,995 11,995
===========
NEW HAMPSHIRE [0.4%]
New Hampshire Health &
Education Facilities Authority,
Ser A, RB (B) (C)
4.350%, 06/01/31 5,120 5,120
===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 62
schedule of investments
SEPTEMBER 30, 2008
CALIFORNIA TAX EXEMPT MONEY MARKET FUND (CONCLUDED)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------- ------------ -----------
NORTH CAROLINA [0.3%]
North Carolina State,
Educational Facilities Finance
Agency, Charlotte Day
School Project, RB (A) (B) (C)
7.250%, 08/01/20 $ 2,915 $ 2,915
===========
TEXAS [1.6%]
University of Texas, Ser A,
RB (B) (C)
7.680%, 08/15/13 4,695 4,695
University of Texas, Ser B,
RB (B) (C)
7.750%, 08/01/33 13,600 13,600
-----------
TOTAL TEXAS 18,295
===========
VIRGINIA [0.4%]
University of Virginia,
Ser A, RB (B) (C)
7.700%, 06/01/34 4,965 4,965
===========
TOTAL MUNICIPAL BONDS
(Cost $1,019,838) 1,019,838
===========
COMMERCIAL PAPER [3.9%]
California State, Regional
Authority
1.580%, 12/09/08 7,500 7,500
California State, Educational
Facilities Authority
1.820%, 10/02/08 13,000 13,000
Contra Costa, Water District
Authority, Ser A
1.250%, 10/14/08 10,150 10,150
San Diego County, Water
Authority
1.500%, 02/04/09 15,000 15,000
-----------
TOTAL COMMERCIAL PAPER
(Cost $45,650) 45,650
===========
TOTAL INVESTMENTS [90.3%]
(Cost $1,065,488) $ 1,065,488
===========
PERCENTAGES ARE BASED ON NET ASSETS OF $1,179,978 ($ THOUSANDS).
(A) SECURITIES ARE HELD IN CONJUNCTION WITH A LETTER OF CREDIT FROM A MAJOR
BANK OR FINANCIAL INSTITUTION.
(B) FLOATING RATE SECURITY -- THE RATE REPORTED IS THE RATE IN EFFECT ON
SEPTEMBER 30, 2008.
(C) PUT AND DEMAND FEATURE -- THE DATE REPORTED IS THE FINAL MATURITY, NOT THE
NEXT RESET OR PUT DATE.
(D) PRE-REFUNDED SECURITY -- THE MATURITY DATE SHOWN IS THE PRE-REFUNDED DATE.
ABAG -- ASSOCIATION OF BAY AREA GOVERNMENTS
COP -- CERTIFICATE OF PARTICIPATION
FSA -- FINANCIAL SECURITY ASSISTANCE
GO -- GENERAL OBLIGATION
RB -- REVENUE BOND
SAB -- SPECIAL ASSESSMENT BOND
SER -- SERIES
TRAN -- TAX & REVENUE ANTICIPATION NOTE
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 63
statements of assets and liabilities (000)
SEPTEMBER 30, 2008
Large Cap Large Cap RCB Small
Value Growth Cap Opportunistic
Equity Fund Equity Fund Value Fund Value Fund*
----------- ----------- ----------- -------------
ASSETS:
Cost of securities (including repurchase agreements) $ 101,488 $ 41,889 $ 32,402 $ 50,990
----------- ----------- ----------- -----------
Investments in securities, at value $ 100,376 $ 42,675 $ 25,097 $ 45,887
Repurchase agreements, at value -- -- 471 --
Receivable for investment securities sold 1,347 279 -- --
Income receivable 190 27 74 84
Receivable for capital shares sold 120 19 12 --
Deferred offering costs -- -- -- 18
Prepaid expenses 2 1 5 --
----------- ----------- ----------- -----------
Total Assets 102,035 43,001 25,659 45,989
----------- ----------- ----------- -----------
LIABILITIES:
Payable for investment securities purchased 1,350 282 207 718
Payable for capital shares redeemed 384 241 181 --
Payable for income distributions 141 23 -- --
Investment adviser fees payable 54 24 19 18
Shareholder servicing & distribution fees payable 24 12 52 --
Administrative fees payable 4 2 1 2
Accrued expenses 5 2 12 5
----------- ----------- ----------- -----------
Total Liabilities 1,962 586 472 743
----------- ----------- ----------- -----------
NET ASSETS $ 100,073 $ 42,415 $ 25,187 $ 45,246
----------- ----------- ----------- -----------
NET ASSETS
Paid-in Capital
(unlimited authorization--$0.01 par value) $ 103,310 $ 43,772 $ 32,249 $ 50,900
Undistributed (distribution in excess of) net investment
income (127) 10 436 174
Accumulated net realized loss on investments (1,998) (2,153) (664) (725)
Net unrealized appreciation (depreciation) on investments (1,112) 786 (6,834) (5,103)
----------- ----------- ----------- -----------
NET ASSETS $ 100,073 $ 42,415 $ 25,187 $ 45,246
----------- ----------- ----------- -----------
Institutional Class Shares ($Dollars):
Net Assets $88,361,319 $31,074,220 $ 1,742,290 $ 93
Total shares outstanding at end of year 10,710,529 4,208,734 106,125 10
Net asset value, offering and redemption price per share
(net assets / shares outstanding) $ 8.25 $ 7.38 $ 16.42 $ 9.31
Class N Shares ($Dollars):
Net Assets $11,711,726 $11,340,543 $ 4,261,677 $ 7,358
Total shares outstanding at end of year 1,421,895 1,551,973 264,081 790
Net asset value, offering and redemption price per share
(net assets / shares outstanding) $ 8.24 $ 7.31 $ 16.14 $ 9.31
Class E Shares ($Dollars):
Net Assets $ -- $ -- $ -- $45,238,633
Total shares outstanding at end of year -- -- -- 4,863,172
Net asset value, offering and redemption price per share
(net assets / shares outstanding) $ -- $ -- $ -- $ 9.30
Class R Shares ($Dollars):
Net Assets $ -- $ -- $19,183,221 $ --
Total shares outstanding at end of year -- -- 1,188,052 --
Net asset value and redemption price per share
(net assets / shares outstanding) $ -- $ -- $ 16.15 $ --
Maximum offering price per share
(net asset value / 96.50%) $ -- $ -- $ 16.74 $ --
* FUND COMMENCED OPERATIONS ON JUNE 26, 2008.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 64
statements of assets and liabilities (000)
SEPTEMBER 30, 2008
California
Multi-Asset Corporate Government Tax Exempt
Fund* Bond Fund Bond Fund Bond Fund
----------- ----------- ----------- -----------
ASSETS:
Cost of securities and affiliated investments $ 31,112 $ 73,071 $ 68,387 $ 35,321
----------- ----------- ----------- -----------
Investments in securities, at value $ 24,046 $ 69,886 $ 68,818 $ 34,839
Affiliated investments, at value 4,241 -- -- --
Receivable for capital shares sold 9 48 55 55
Income receivable 76 800 394 493
Prepaid expenses -- 1 1 --
----------- ----------- ----------- -----------
Total Assets 28,372 70,735 69,268 35,387
----------- ----------- ----------- -----------
LIABILITIES:
Payable for investment securities purchased 800 -- -- --
Payable for capital shares redeemed -- 182 216 6
Payable for income distributions 99 192 154 56
Investment adviser fees payable 12 24 18 4
Shareholder servicing & distribution fees payable 9 15 15 8
Administrative fees payable 1 3 3 1
Accrued expenses 2 2 4 1
----------- ----------- ----------- -----------
Total Liabilities 923 418 410 76
----------- ----------- ----------- -----------
NET ASSETS $ 27,449 $ 70,317 $ 68,858 $ 35,311
----------- ----------- ----------- -----------
NET ASSETS
Paid-in Capital
(unlimited authorization--$0.01 par value) $ 30,642 $ 74,043 $ 68,964 $ 35,887
Undistributed (distribution in excess of)
net investment income 1 1 (1) --
Accumulated net realized loss on investments (369) (542) (536) (94)
Net unrealized appreciation (depreciation) on investments (2,825) (3,185) 431 (482)
----------- ----------- ----------- -----------
NET ASSETS $ 27,449 $ 70,317 $ 68,858 $ 35,311
----------- ----------- ----------- -----------
Institutional Class Shares ($Dollars):
Net Assets $10,741,010 $69,709,403 $66,097,357 $34,261,353
Total shares outstanding at end of year 1,107,311 7,143,231 6,357,337 3,405,700
Net asset value, offering and redemption price per share
(net assets / shares outstanding) $ 9.70 $ 9.76 $ 10.40 $ 10.06
Class N Shares ($Dollars):
Net Assets $16,708,026 $ 607,658 $ 2,761,065 $ 1,049,307
Total shares outstanding at end of year 1,723,386 62,223 264,994 104,024
Net asset value, offering and redemption price per share
(net assets / shares outstanding) $ 9.69 $ 9.77 $ 10.42 $ 10.09
* FUND COMMENCED OPERATIONS ON OCTOBER 1, 2007.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 65
statements of assets and liabilities (000)
SEPTEMBER 30, 2008
California
Government Tax Exempt
High Yield Prime Money Money Market Money Market
Bond Fund Market Fund Fund Fund
----------- -------------- -------------- ------------
ASSETS:
Cost of securities (including repurchase agreements) $ 37,212 $ 2,290,312 $ 3,566,650 $ 1,065,488
----------- -------------- -------------- ------------
Investments in securities, at value $ 30,715 $ 1,737,012 $ 2,386,150 $ 1,065,488
Repurchase agreements, at value -- 553,300 1,180,500 --
Receivable for investment securities sold -- -- -- 43,110
Receivable for capital shares sold 3 -- -- --
Income receivable 835 4,380 3,182 4,635
Prepaid expenses -- 53 88 14
Cash 1 -- 178 68,417
----------- -------------- -------------- ------------
Total Assets 31,554 2,294,745 3,570,098 1,181,664
----------- -------------- -------------- ------------
LIABILITIES:
Payable for investment securities purchased -- -- 50,000 --
Payable for capital shares redeemed 3 -- -- --
Payable for income distributions 73 2,495 1,482 926
Investment adviser fees payable 17 490 694 189
Shareholder servicing & distribution fees payable 12 960 1,349 471
Administrative fees payable 1 87 119 44
Trustees' fees payable -- 3 6 2
Accrued expenses 1 64 92 54
----------- -------------- -------------- ------------
Total Liabilities 107 4,099 53,742 1,686
----------- -------------- -------------- ------------
NET ASSETS $ 31,447 $ 2,290,646 $ 3,516,356 $ 1,179,978
----------- -------------- -------------- ------------
NET ASSETS:
Paid-in Capital
(unlimited authorization--$0.01 par value) $ 39,241 $ 2,290,560 $ 3,516,341 $ 1,179,975
Undistributed (distribution in excess of) net investment
income 57 (1) (1) 2
Accumulated net realized gain (loss) on investments (1,354) 87 16 1
Net unrealized depreciation on investments (6,497) -- -- --
----------- -------------- -------------- ------------
NET ASSETS $ 31,447 $ 2,290,646 $ 3,516,356 $ 1,179,978
----------- -------------- -------------- ------------
Institutional Class Shares ($Dollars):
Net Assets $13,925,654 $ 532,930,545 $ 100,673,871 $157,426,904
Total shares outstanding at end of year 1,882,116 532,960,195 100,674,962 157,428,518
Net asset value, offering and redemption price per share
(net assets / shares outstanding) $ 7.40 $ 1.00 $ 1.00 $ 1.00
Class N Shares ($Dollars):
Net Assets $17,520,867 $1,123,900,212 $3,006,935,107 $880,793,647
Total shares outstanding at end of year 2,368,057 1,123,931,789 3,006,920,369 880,793,866
Net asset value, offering and redemption price per share
(net assets / shares outstanding) $ 7.40 $ 1.00 $ 1.00 $ 1.00
Class S Shares ($ Dollars):
Net Assets $ -- $ 633,815,136 $ 408,746,948 $141,757,614
Total shares outstanding at end of year -- 633,761,000 408,745,947 141,753,711
Net asset value and redemption price per share
(net assets / shares outstanding) $ -- $ 1.00 $ 1.00 $ 1.00
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 66
statements of operations
FOR THE YEAR/PERIOD ENDED SEPTEMBER 30, 2008
Large Cap Large Cap RCB Small
Value Growth Cap Opportunistic
Equity Fund Equity Fund Value Fund Value Fund
(000) (000) (000) (000)*
----------- ----------- ---------- -------------
INCOME:
Dividend Income $ 2,945 $ 712 $ 801 $ 259
Interest Income -- -- 84 --
Less: Foreign Taxes Withheld -- -- -- (1)
-------- ------- -------- --------
Total Investment Income 2,945 712 885 258
-------- ------- -------- --------
EXPENSES:
Investment Advisory Fee 705 347 353 61
Shareholder Servicing Fees--Institutional Class 249 100 12 --
Shareholder Servicing Fees--Class N(1) 70 68 32 --
Shareholder Servicing Fees--Class R(1) -- -- 151 --
Administration Fee 52 24 19 5
Transfer Agent Fees 8 4 33 1
Trustee Fees 3 2 1 --
Professional Fees 14 6 5 2
Printing Fees 5 2 6 4
Custody Fees 5 2 1 2
Registration Fees 3 2 2 2
Deferred Offering Costs -- -- -- 7
Insurance and Other Expenses 11 5 4 2
-------- ------- -------- --------
Total Expenses 1,125 562 619 86
-------- ------- -------- --------
Less,Waiver of:
Investment Advisory fees -- -- -- (1)
Shareholder Servicing Fees--Class R(1) -- -- (95) --
Transfer Agent Fees (8) (4) (3) (1)
-------- ------- -------- --------
Net Expenses 1,117 558 521 84
-------- ------- -------- --------
NET INVESTMENT INCOME 1,828 154 364 174
-------- ------- -------- --------
Net Realized Gain (Loss) from Securities Transactions (2,121) 229 53 (725)
Net Change in Unrealized Depreciation on Investments (27,129) (9,483) (18,035) (5,103)
-------- ------- -------- --------
NET DECREASE IN NET ASSETS FROM OPERATIONS $(27,422) $(9,100) $(17,618) $ (5,654)
======== ======= ======== ========
* FUND COMMENCED OPERATIONS ON JUNE 26, 2008.
(1) INCLUDES CLASS SPECIFIC DISTRIBUTION EXPENSES.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 67
statements of operations
FOR THE YEAR/PERIOD ENDED SEPTEMBER 30, 2008
California
Multi-Asset Corporate Government Tax Exempt
Fund Bond Fund Bond Fund Bond Fund
(000)* (000) (000) (000)
----------- --------- ---------- ----------
INCOME:
Interest Income $ 176 $ 3,299 $2,989 $1,223
Dividend Income 487 90 101 12
Income from Affiliated Investments 106 -- -- --
------- ------- ------ ------
Total Income 769 3,389 3,090 1,235
------- ------- ------ ------
EXPENSES:
Investment Advisory Fee 103 272 280 92
Shareholder Servicing Fees--Institutional Class 22 168 156 83
Shareholder Servicing Fees--Class N(1) 59 4 14 4
Administration Fee 9 31 30 16
Trustee Fees -- 2 2 1
Transfer Agent Fees 2 5 5 3
Professional Fees 3 9 8 4
Custody Fees 1 3 2 1
Printing Fees 1 3 3 1
Registration Fees 1 1 2 1
Deferred Offering Costs 94 -- -- --
Insurance and Other Expenses 2 5 5 3
------- ------- ------ ------
Total Expenses 297 503 507 209
------- ------- ------ ------
Less,Waiver of:
Investment Advisory Fees -- -- (39) (34)
Transfer Agent Fees (2) (5) (5) (3)
------- ------- ------ ------
Net Expenses 295 498 463 172
------- ------- ------ ------
NET INVESTMENT INCOME 474 2,891 2,627 1,063
------- ------- ------ ------
Net Realized Gain (Loss) from Securities Transactions (369) (66) 42 (52)
Net Change in Unrealized Appreciation (Depreciation) on
Investments (2,825) (3,019) 250 (573)
------- ------- ------ ------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $(2,720) $ (194) $2,919 $ 438
======= ======= ====== ======
* FUND COMMENCED OPERATIONS ON OCTOBER 1, 2007.
(1) INCLUDES CLASS SPECIFIC DISTRIBUTION EXPENSES.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 68
statements of operations
FOR THE YEAR ENDED SEPTEMBER 30, 2008
California
Government Tax Exempt
High Yield Prime Money Money Market Money Market
Bond Fund Market Fund Fund Fund
(000) (000) (000) (000)
---------- ----------- ------------ ------------
INCOME:
Interest Income $ 3,196 $ 80,601 $ 99,352 $ 26,086
Dividend Income 19 84 -- --
-------- -------- -------- --------
Total Income 3,215 80,685 99,352 26,086
-------- -------- -------- --------
EXPENSES:
Investment Advisory Fee 263 5,796 8,036 3,111
Shareholder Servicing Fees--Institutional Class 38 1,251 150 337
Shareholder Servicing Fees--Class N(1) 108 8,733 20,171 6,391
Shareholder Servicing Fees--Class S(1) -- 4,892 2,545 1,233
Administration Fee 16 1,055 1,407 523
Trustee Fees 1 61 86 31
Transfer Agent Fees 3 171 228 85
Professional Fees 4 272 387 153
Custody Fees 1 76 98 43
Printing Fees 2 85 116 51
Registration Fees 1 40 34 38
Insurance and Other Expenses 3 165 234 94
-------- -------- -------- --------
Total Expenses 440 22,597 33,492 12,090
-------- -------- -------- --------
Less Waiver of:
Investment Advisory Fees (29) -- -- (583)
Shareholder Servicing Fees--Class N(1) -- (3,158) (7,307) (2,298)
Shareholder Servicing Fees--Class S(1) -- (470) (243) (115)
Transfer Agent Fees (3) (171) (228) (85)
-------- -------- -------- --------
Net Expenses 408 18,798 25,714 9,009
-------- -------- -------- --------
NET INVESTMENT INCOME 2,807 61,887 73,638 17,077
-------- -------- -------- --------
Net Realized Gain (Loss) From Securities Transactions (526) 297 17 --
Net change in Unrealized Depreciation on Investments (5,822) -- -- --
-------- -------- -------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $ (3,541) $ 62,184 $ 73,655 $ 17,077
======== ======== ======== ========
(1) INCLUDES CLASS SPECIFIC DISTRIBUTION EXPENSES.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 69
statements of changes in net assets
FOR THE YEAR/PERIOD ENDED SEPTEMBER 30,
Large Cap Value Large Cap Growth
Equity Fund (000) Equity Fund (000)
------------------- ------------------
2008 2007 2008 2007
-------- -------- -------- -------
OPERATIONS:
Net Investment Income (Loss) $ 1,828 $ 2,036 $ 154 $ 252
Net Realized Gain (Loss) from Security Transactions (2,121) 5,793 229 1,288
Net Change in Unrealized Appreciation (Depreciation) on
Investments (27,129) 8,799 (9,483) 5,813
-------- -------- -------- -------
Net Increase (Decrease) in Net Assets Resulting from
Operations (27,422) 16,628 (9,100) 7,353
-------- -------- -------- -------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net Investment Income:
INSTITUTIONAL CLASS (1,637) (1,807) (138) (212)
CLASS N (190) (232) (14) (34)
CLASS R -- -- -- --
Realized Capital Gains:
INSTITUTIONAL CLASS (4,754) (4,815) -- --
CLASS N (735) (687) -- --
CLASS R -- -- -- --
-------- -------- -------- -------
Total Dividends and Distributions (7,316) (7,541) (152) (246)
-------- -------- -------- -------
CAPITAL SHARE TRANSACTIONS:(1)
INSTITUTIONAL CLASS:
Shares Issued 22,976 21,253 5,320 10,554
Shares Issued from Merger(2) -- -- -- 1,372
Shares Issued in Lieu of Dividends and Distributions 4,640 4,589 47 70
Shares Redeemed (18,936) (16,697) (13,229) (7,459)
-------- -------- -------- -------
Increase (Decrease) in Net Assets from Institutional
Class Share Transactions 8,680 9,145 (7,862) 4,537
-------- -------- -------- -------
CLASS N:
Shares Issued 623 4,148 909 3,787
Shares Issued from Merger(2) -- -- -- 1,547
Shares Issued in Lieu of Dividends and Distributions 660 728 9 23
Shares Redeemed (2,366) (1,944) (2,236) (2,359)
-------- -------- -------- -------
Increase (Decrease) in Net Assets from Class N Share
Transactions (1,083) 2,932 (1,318) 2,998
-------- -------- -------- -------
CLASS E:
Shares Issued -- -- -- --
Shares Redeemed -- -- -- --
-------- -------- -------- -------
Increase in Net Assets from Class E Share
Transactions -- -- -- --
-------- -------- -------- -------
CLASS R:
Shares Issued -- -- -- --
Shares Issued in Lieu of Dividends and Distributions -- -- -- --
Shares Redeemed -- -- -- --
-------- -------- -------- -------
Decrease in Net Assets from Class R Share
Transactions -- -- -- --
-------- -------- -------- -------
Net Increase (Decrease) in Net Assets from Share
Transactions 7,597 12,077 (9,180) 7,535
-------- -------- -------- -------
Total Increase (Decrease) in Net Assets (27,141) 21,164 (18,432) 14,642
-------- -------- -------- -------
NET ASSETS:
Beginning of Period 127,214 106,050 60,847 46,205
-------- -------- -------- -------
End of Period $100,073 $127,214 $ 42,415 $60,847
======== ======== ======== =======
Undistributed (Distributions in Excess of)
Net Investment Income $ (127) $ (5) $ 10 $ 7
-------- -------- -------- -------
* FUND COMMENCED OPERATIONS ON OCTOBER 1, 2007.
** FUND COMMENCED OPERATIONS ON JUNE 26, 2008.
(1) SEE NOTE 9 FOR SHARES ISSUED AND REDEEMED.
(2) SEE NOTE 8.
(3) INCLUDES SUBSCRIPTIONS AS A RESULT OF AN IN-KIND TRANSFER OF SECURITIES
(SEE NOTE 10).
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 70
RCB Small Cap Opportunistic Value Multi-Asset Corporate Bond
Value Fund (000) Fund (000) Fund (000) Fund (000)
- ------------------- ------------------- ----------- ------------------
2008 2007 2008** 2008* 2008 2007
- -------- -------- ------- ------- -------- -------
$ 364 $ (87) $ 174 $ 474 $ 2,891 $ 2,601
53 9,056 (725) (369) (66) (149)
(18,035) (1,504) (5,103) (2,825) (3,019) 209
- -------- -------- ------- ------- -------- -------
(17,618) 7,465 (5,654) (2,720) (194) 2,661
- -------- -------- ------- ------- -------- -------
-- (2) -- (205) (2,857) (2,546)
-- -- -- (268) (31) (49)
-- -- -- -- -- --
(1,426) (213) -- -- -- --
(1,567) (165) -- -- -- --
(6,612) (730) -- -- -- --
- -------- -------- ------- ------- -------- -------
(9,605) (1,110) -- (473) (2,888) (2,595)
- -------- -------- ------- ------- -------- -------
944 2,351 -- 13,719 23,936 14,720
-- -- -- -- -- --
1,255 188 -- 50 605 498
(6,104) (8,112) -- (1,732) (13,983) (8,362)
- -------- -------- ------- ------- -------- -------
(3,905) (5,573) -- 12,037 10,558 6,856
- -------- -------- ------- ------- -------- -------
111 620 8 20,655 39 214
-- -- -- -- -- --
1,250 136 -- 118 16 23
(2,424) (2,427) -- (2,168) (467) (528)
- -------- -------- ------- ------- -------- -------
(1,063) (1,671) 8 18,605 (412) (291)
- -------- -------- ------- ------- -------- -------
-- -- 50,892(3) -- -- --
-- -- -- -- -- --
- -------- -------- ------- ------- -------- -------
-- -- 50,892 -- -- --
- -------- -------- ------- ------- -------- -------
5,853 5,384 -- -- -- --
6,293 690 -- -- -- --
(14,527) (15,167) -- -- -- --
- -------- -------- ------- ------- -------- -------
(2,381) (9,093) -- -- -- --
- -------- -------- ------- ------- -------- -------
(7,349) (16,337) 50,900 30,642 10,146 6,565
- -------- -------- ------- ------- -------- -------
(34,572) (9,982) 45,246 27,449 7,064 6,631
- -------- -------- ------- ------- -------- -------
59,759 69,741 -- -- 63,253 56,622
- -------- -------- ------- ------- -------- -------
$ 25,187 $ 59,759 $45,246 $27,449 $ 70,317 $63,253
======== ======== ======= ======= ======== =======
$ 436 $ -- $ 174 $ 1 $ 1 $ 1
- -------- -------- ------- ------- -------- -------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 71
statements of changes in net assets
FOR THE YEAR ENDED SEPTEMBER 30,
California Tax
Government Exempt
Bond Fund (000) Bond Fund (000)
------------------- ------------------
2008 2007 2008 2007
-------- -------- -------- -------
OPERATIONS:
Net Investment Income $ 2,627 $ 2,087 $ 1,063 $ 951
Net Realized Gain (Loss) from Security Transactions 42 (168) (52) 1
Net Change in Unrealized Appreciation (Depreciation) on
Investments 250 413 (573) 14
-------- ------- ------- -------
Net Increase (Decrease) in Net Assets Resulting from
Operations 2,919 2,332 438 966
-------- ------- ------- -------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net Investment Income:
INSTITUTIONAL CLASS (2,532) (1,976) (1,041) (922)
CLASS N (107) (96) (22) (29)
Class S -- -- -- --
Realized Capital Gains:
INSTITUTIONAL CLASS -- -- -- --
CLASS N -- -- -- --
CLASS S -- -- -- --
-------- ------- ------- -------
Total Dividends and Distributions (2,639) (2,072) (1,063) (951)
-------- ------- ------- -------
CAPITAL SHARE TRANSACTIONS:(1)
INSTITUTIONAL CLASS:
Shares Issued 24,102 21,995 10,565 15,567
Shares Issued in Lieu of Dividends and Distributions 699 570 369 334
Shares Redeemed (11,579) (5,878) (9,859) (8,190)
-------- ------- ------- -------
Increase (Decrease) in Net Assets from Institutional
Class Share Transactions 13,222 16,687 1,075 7,711
-------- ------- ------- -------
CLASS N:
Shares Issued 780 1,002 776 58
Shares Issued in Lieu of Dividends and Distributions 44 30 4 5
Shares Redeemed (706) (194) (643) (273)
-------- ------- ------- -------
Increase (Decrease) in Net Assets from Class N Share
Transactions 118 838 137 (210)
-------- ------- ------- -------
CLASS S:
Shares Issued -- -- -- --
Shares Issued in Lieu of Dividends and Distributions -- -- -- --
Shares Redeemed -- -- -- --
-------- ------- ------- -------
Increase (Decrease) in Net Assets from Class S Share
Transactions -- -- -- --
-------- ------- ------- -------
Net Increase (Decrease) in Net Assets from Share
Transactions 13,340 17,525 1,212 7,501
-------- ------- ------- -------
Total Increase (Decrease) in Net Assets 13,620 17,785 587 7,516
-------- ------- ------- -------
NET ASSETS:
Beginning of Period 55,238 37,453 34,724 27,208
-------- ------- ------- -------
End of Period $ 68,858 $55,238 $35,311 $34,724
======== ======= ======= =======
Undistributed (Distribution in Excess of) Net Investment
Income $ (1) $ -- $ -- $ --
-------- ------- ------- -------
(1) SEE NOTE 9 FOR SHARES ISSUED AND REDEEMED.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 72
High Yield Prime Money Government Money California Tax Exempt
Bond Fund (000) Market Fund (000) Market Fund (000) Money Market Fund (000)
- ------------------- ------------------------ ------------------------- -------------------------
2008 2007 2008 2007 2008 2007 2008 2007
- -------- -------- ----------- ---------- ----------- ----------- ----------- -----------
$ 2,807 $ 2,936 $ 61,887 $ 73,660 $ 73,638 $ 106,410 $ 17,077 $ 22,975
(526) 427 297 192 17 (1) -- --
(5,822) (638) -- -- -- -- -- --
- ------- ------- ----------- ---------- ----------- ----------- ----------- -----------
(3,541) 2,725 62,184 73,852 73,655 106,409 17,077 22,975
- ------- ------- ----------- ---------- ----------- ----------- ----------- -----------
(1,258) (1,375) (14,508) (19,843) (1,571) (2,098) (2,286) (2,775)
(1,548) (1,505) (30,822) (33,868) (64,510) (92,518) (12,486) (17,180)
-- -- (16,569) (19,939) (7,574) (11,780) (2,303) (3,020)
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
- ------- ------- ----------- ---------- ----------- ----------- ----------- -----------
(2,806) (2,880) (61,899) (73,650) (73,655) (106,396) (17,075) (22,975)
- ------- ------- ----------- ---------- ----------- ----------- ----------- -----------
1,173 1,609 1,704,267 1,324,934 553,021 532,859 1,830,572 2,517,017
862 849 2,772 3,872 3 4 -- --
(2,455) (6,173) (1,612,805) (1,278,386) (500,209) (537,787) (1,762,382) (2,512,794)
- ------- ------- ----------- ---------- ----------- ----------- ----------- -----------
(420) (3,715) 94,234 50,420 52,815 (4,924) 68,190 4,223
- ------- ------- ----------- ---------- ----------- ----------- ----------- -----------
1,645 1,427 3,333,223 2,695,734 6,290,498 5,523,344 2,477,610 2,143,730
1,000 904 13,996 12,208 43,391 62,437 9,947 13,108
(1,689) (2,135) (3,093,998) (2,477,866) (5,618,090) (5,235,257) (2,302,084) (2,092,998)
- ------- ------- ----------- ---------- ----------- ----------- ----------- -----------
956 196 253,221 230,076 715,799 350,524 185,473 63,840
- ------- ------- ----------- ---------- ----------- ----------- ----------- -----------
-- -- 1,657,732 1,873,534 801,055 775,804 409,458 390,230
-- -- -- -- -- -- -- --
-- -- (1,644,197) (1,577,751) (713,370) (686,827) (446,618) (318,443)
- ------- ------- ----------- ---------- ----------- ----------- ----------- -----------
-- -- 13,535 295,783 87,685 88,977 (37,160) 71,787
- ------- ------- ----------- ---------- ----------- ----------- ----------- -----------
536 (3,519) 360,990 576,279 856,299 434,577 216,503 139,850
- ------- ------- ----------- ---------- ----------- ----------- ----------- -----------
(5,811) (3,674) 361,275 576,481 856,299 434,590 216,505 139,850
- ------- ------- ----------- ---------- ----------- ----------- ----------- -----------
37,258 40,932 1,929,371 1,352,890 2,660,057 2,225,467 963,473 823,623
- ------- ------- ----------- ---------- ----------- ----------- ----------- -----------
$31,447 $37,258 $ 2,290,646 $1,929,371 $ 3,516,356 $ 2,660,057 $ 1,179,978 $ 963,473
======= ======= =========== ========== =========== =========== =========== ===========
$ 57 $ 56 $ (1) $ 11 $ (1) $ 16 $ 2 $ --
- ------- ------- ----------- ---------- ----------- ----------- ----------- -----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 73
financial highlights
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE YEAR/PERIOD ENDED SEPTEMBER 30,
NET
NET REALIZED AND DISTRIBUTIONS NET
ASSET NET UNREALIZED DIVIDENDS FROM ASSET
VALUE INVESTMENT GAINS FROM NET REALIZED VALUE
BEGINNING INCOME (LOSSES) ON INVESTMENT CAPITAL END OF
OF PERIOD (LOSS)+ SECURITIES INCOME GAINS PERIOD
--------- ---------- ------------ ----------- ------------- ------
LARGE CAP VALUE EQUITY FUND
Institutional Class (commenced operations on January 14, 2000)
2008 $11.21 $ 0.16 $(2.48) $(0.15) $(0.49) $ 8.25
2007 10.36 0.19 1.38 (0.19) (0.53) 11.21
2006 9.54 0.13 1.21 (0.13) (0.39) 10.36
2005 8.77 0.10 1.13 (0.10) (0.36) 9.54
2004 7.41 0.08 1.36 (0.08) -- 8.77
Class N (commenced operations on April 13, 2000)
2008 $11.19 $ 0.13 $(2.46) $(0.13) $(0.49) $ 8.24
2007 10.35 0.16 1.37 (0.16) (0.53) 11.19
2006 9.53 0.11 1.20 (0.10) (0.39) 10.35
2005 8.76 0.09 1.12 (0.08) (0.36) 9.53
2004 7.41 0.05 1.36 (0.06) -- 8.76
LARGE CAP GROWTH EQUITY FUND
Institutional Class (commenced operations on January 14, 2000)
2008 $ 8.86 $ 0.03 $(1.48) $(0.03) $ -- $ 7.38
2007 7.75 0.05 1.10 (0.04) -- 8.86
2006 7.43 0.02 0.32 (0.02) -- 7.75
2005 6.76 0.04 0.67 (0.04) -- 7.43
2004 6.37 0.01 0.38 --## -- 6.76
Class N (commenced operations on March 28, 2000)
2008 $ 8.77 $ 0.01 $(1.46) $(0.01) $ -- $ 7.31
2007 7.68 0.01 1.10 (0.02) -- 8.77
2006 7.35 -- 0.33 --## -- 7.68
2005 6.69 0.02 0.67 (0.03) -- 7.35
2004 6.32 (0.01) 0.38 --## -- 6.69
RCB SMALL CAP VALUE FUND
Institutional Class (commenced operations on October 3, 2001)
2008 $30.79 $ 0.19 $(9.57) $ -- $(4.99) $16.42
2007 28.25 0.02 3.00 (0.01) (0.47) 30.79
2006 28.58 0.06 0.05 (0.07) (0.37) 28.25
2005 27.30 0.07 2.58 -- (1.37) 28.58
2004 21.92 0.06 5.40 -- (0.08) 27.30
Class N (commenced operations on October 3, 2001)
2008 $30.42 $ 0.15 $(9.44) $ -- $(4.99) $16.14
2007 27.98 (0.05) 2.96 -- (0.47) 30.42
2006 28.31 (0.01) 0.05 --## (0.37) 27.98
2005 27.13 0.00 2.55 -- (1.37) 28.31
2004 21.84 (0.02) 5.39 -- (0.08) 27.13
Class R (commenced operations on September 30, 1998)
2008 $30.38 $ 0.20 $(9.44) $ -- $(4.99) $16.15
2007 27.93 (0.05) 2.97 -- (0.47) 30.38
2006 28.27 (0.01) 0.04 --## (0.37) 27.93
2005 27.09 0.01 2.54 -- (1.37) 28.27
2004 21.81 (0.02) 5.38 -- (0.08) 27.09
OPPORTUNISTIC VALUE FUND
Institutional Class (commenced operations on June 26, 2008)
2008 $10.00 $ 0.05 $(0.74) $ -- $ -- $ 9.31
Class N (commenced operations on June 26, 2008)
2008 $10.00 $ 0.04 $(0.73) $ -- $ -- $ 9.31
Class E (commenced operations on June 26, 2008)
2008 $10.00 $ 0.04 $(0.74) $ -- $ -- $ 9.30
MULTI-ASSET FUND
Institutional Class (commenced operations on October 1, 2007)
2008 $11.00 $ 0.25 $(1.32) $(0.23) $ -- $ 9.70
Class N (commenced operations on October 1, 2007)
2008 $11.00 $ 0.23 $(1.33) $(0.21) $ -- $ 9.69
RATIO
OF EXPENSES
RATIO TO AVERAGE
NET RATIO OF NET NET ASSETS
ASSETS OF EXPENSES INVESTMENT (EXCLUDING
END OF TO AVERAGE INCOME (LOSS) WAIVERS & PORTFOLIO
TOTAL PERIOD NET ASSETS TO AVERAGE RECOVERED TURNOVER
RETURN+++ (000) (1)(2) NET ASSETS(1) FEES)(1) RATE
--------- -------- ----------- ------------- ----------- ---------
LARGE CAP VALUE EQUITY FUND
Institutional Class (commenced operations on January 14, 2000)
2008 (21.57)% $ 88,361 0.95% 1.64% 0.96% 36%
2007 15.60 110,024 0.96 1.73 0.97 24
2006 14.50 92,946 0.96 1.36 0.97 31
2005 14.39 42,974 0.96 1.12 0.97 34
2004 19.40 38,344 0.97 0.92 0.97 36
Class N (commenced operations on April 13, 2000)
2008 (21.72)% $ 11,712 1.20% 1.38% 1.21% 36%
2007 15.24 17,190 1.21 1.47 1.22 24
2006 14.24 13,104 1.21 1.13 1.22 31
2005 14.14 10,664 1.21 0.87 1.22 34
2004 19.01 6,281 1.22 0.64 1.22 36
LARGE CAP GROWTH EQUITY FUND
Institutional Class (commenced operations on January 14, 2000)
2008 (16.40)% $ 31,074 0.98% 0.35% 0.99% 26%
2007 14.91 45,784 0.99 0.52 1.00 30
2006 4.59 35,842 0.99 0.27 1.00 34
2005 10.55 34,164 0.98 0.57 1.00 27
2004 6.20 25,575 1.01 0.10 1.01 50
Class N (commenced operations on March 28, 2000)
2008 (16.55)% $ 11,341 1.23% 0.11% 1.24% 26%
2007 14.51 15,063 1.24 0.28 1.25 30
2006 4.55 10,363 1.24 0.03 1.25 34
2005 10.28 8,278 1.23 0.33 1.25 27
2004 5.87 5,223 1.26 (0.14) 1.26 50
RCB SMALL CAP VALUE FUND
Institutional Class (commenced operations on October 3, 2001)
2008 (35.01)% $ 1,742 1.19% 0.85% 1.20% 78%
2007 10.65 9,062 1.19 0.08 1.20 57
2006 0.40 13,435 1.20 0.20 1.21 66
2005 9.87 13,975 1.18 0.26 1.20 41
2004 24.97 8,955 1.21 0.23 1.20 40
Class N (commenced operations on October 3, 2001)
2008 (35.16)% $ 4,262 1.44% 0.70% 1.45% 78%
2007 10.37 9,753 1.44 (0.16) 1.45 57
2006 0.17 10,470 1.45 (0.04) 1.46 66
2005 9.55 12,754 1.43 0.01 1.45 41
2004 24.64 7,551 1.49 (0.07) 1.48 40
Class R (commenced operations on September 30, 1998)
2008 (35.02)% $ 19,183 1.23% 0.92% 1.55% 78%
2007 10.43 40,944 1.44 (0.17) 1.45 57
2006 0.14 45,836 1.45 (0.04) 1.46 66
2005 9.56 57,787 1.43 0.02 1.45 41
2004 24.63 36,473 1.49 (0.07) 1.48 40
OPPORTUNISTIC VALUE FUND
Institutional Class (commenced operations on June 26, 2008)
2008 (6.90)% $ -- 0.23%(3) 1.83% 0.23%(3) 5%
Class N (commenced operations on June 26, 2008)
2008 (6.90)% $ 7 1.20%(3) 1.50% 1.23%(3) 5%
Class E (commenced operations on June 26, 2008)
2008 (7.00)% $ 45,239 0.69%(3) 1.44% 0.70%(3) 5%
MULTI-ASSET FUND
Institutional Class (commenced operations on October 1, 2007)
2008 (9.84)% $ 10,741 1.29% 2.37% 1.30% 141%
Class N (commenced operations on October 1, 2007)
2008 (10.12)% $ 16,708 1.53% 2.22% 1.54% 141%
+ PER SHARE CALCULATIONS ARE BASED ON AVERAGE SHARES OUTSTANDING THROUGHOUT
THE PERIOD.
+++ RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED. FEE
WAIVERS ARE IN EFFECT; IF THEY HAD NOT BEEN IN EFFECT, PERFORMANCE WOULD
HAVE BEEN LOWER. TOTAL RETURN FIGURES DO NOT INCLUDE APPLICABLE SALES
LOADS. RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES THAT A
SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND
SHARES.
## AMOUNT REPRESENTS LESS THAN $0.01 PER SHARE.
(1) ANNUALIZED FOR PERIODS LESS THAN ONE YEAR.
(2) RATIO INCLUDES WAIVERS AND PREVIOUSLY WAIVED INVESTMENT ADVISORY FEES
RECOVERED.THE IMPACT OF THE RECOVERED FEES MAY CAUSE A HIGHER NET EXPENSE
RATIO.
(3) RATIO REFLECTS THE IMPACT OF THE INITIAL LOW LEVEL OF AVERAGE NET ASSETS
ASSOCIATED WITH COMMENCEMENT OF OPERATIONS.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 74
NET
NET REALIZED AND DISTRIBUTIONS NET
ASSET UNREALIZED DIVIDENDS FROM ASSET
VALUE NET GAINS (LOSSES) FROM NET REALIZED VALUE
BEGINNING INVESTMENT ON INVESTMENT CAPITAL END
OF PERIOD INCOME+ SECURITIES+ INCOME GAINS OF PERIOD
--------- ---------- -------------- ---------- ------------- ---------
CORPORATE BOND FUND
Institutional Class (commenced operations on January 14, 2000)
2008 $10.18 $0.43 $(0.41) $(0.44) $ -- $ 9.76
2007 10.17 0.45 -- (0.44) -- 10.18
2006 10.27 0.42 (0.10) (0.42) -- 10.17
2005 10.60 0.40 (0.27) (0.40) (0.06) 10.27
2004 10.89 0.41 (0.18) (0.41) (0.11) 10.60
Class N (commenced operations on April 13, 2000)
2008 $10.18 $0.41 $(0.41) $(0.41) $ -- $ 9.77
2007 10.17 0.42 0.01 (0.42) -- 10.18
2006 10.27 0.39 (0.10) (0.39) -- 10.17
2005 10.61 0.37 (0.28) (0.37) (0.06) 10.27
2004 10.89 0.37 (0.16) (0.38) (0.11) 10.61
GOVERNMENT BOND FUND
Institutional Class (commenced operations on January 14, 2000)
2008 $10.33 $0.42 $ 0.08 $(0.43) $ -- $10.40
2007 10.28 0.46 0.05 (0.46) -- 10.33
2006 10.40 0.41 (0.12) (0.41) -- 10.28
2005 10.62 0.31 (0.16) (0.31) (0.06) 10.40
2004 10.93 0.25 (0.17) (0.25) (0.14) 10.62
Class N (commenced operations on April 13, 2000)
2008 $10.35 $0.40 $ 0.07 $(0.40) $ -- $10.42
2007 10.30 0.44 0.04 (0.43) -- 10.35
2006 10.42 0.39 (0.12) (0.39) -- 10.30
2005 10.64 0.29 (0.17) (0.28) (0.06) 10.42
2004 10.95 0.23 (0.17) (0.23) (0.14) 10.64
CALIFORNIA TAX EXEMPT BOND FUND
Institutional Class (commenced operations on January 14, 2000)
2008 $10.24 $0.32 $(0.18) $(0.32) $ -- $10.06
2007 10.25 0.31 (0.01) (0.31) -- 10.24
2006 10.26 0.29 0.03 (0.29) (0.04) 10.25
2005 10.41 0.28 (0.11) (0.28) (0.04) 10.26
2004 10.60 0.27 (0.06) (0.27) (0.13) 10.41
Class N (commenced operations on April 13, 2000)
2008 $10.27 $0.30 $(0.18) $(0.30) $ -- $10.09
2007 10.27 0.28 -- (0.28) -- 10.27
2006 10.29 0.26 0.02 (0.26) (0.04) 10.27
2005 10.44 0.25 (0.11) (0.25) (0.04) 10.29
2004 10.62 0.24 (0.05) (0.24) (0.13) 10.44
HIGH YIELD BOND FUND
Institutional Class (commenced operations on January 14, 2000)
2008 $ 8.91 $0.64 $(1.47) $(0.68) $ -- $ 7.40
2007 8.96 0.70 (0.06) (0.69) -- 8.91
2006 9.04 0.68 (0.08) (0.68) -- 8.96
2005 9.31 0.71 (0.27) (0.71) -- 9.04
2004 8.95 0.72 0.36 (0.72) -- 9.31
Class N (commenced operations on January 14, 2000)
2008 $ 8.91 $0.62 $(1.47) $(0.66) $ -- $ 7.40
2007 8.96 0.68 (0.07) (0.66) -- 8.91
2006 9.04 0.65 (0.08) (0.65) -- 8.96
2005 9.31 0.69 (0.27) (0.69) -- 9.04
2004 8.95 0.70 0.35 (0.69) -- 9.31
RATIO
OF EXPENSES
RATIO TO AVERAGE
NET OF NET NET ASSETS
ASSETS RATIO INVESTMENT (EXCLUDING
END OF EXPENSES INCOME WAIVERS & PORTFOLIO
TOTAL OF PERIOD TO AVERAGE TO AVERAGE RECOVERED TURNOVER
RETURN+++ (000) NET ASSETS(1)(2) NET ASSETS(1) FEES)(1) RATE
--------- --------- ---------------- ------------- ----------- ---------
CORPORATE BOND FUND
Institutional Class (commenced operations on January 14, 2000)
2008 0.04% $69,709 0.73% 4.25% 0.74% 12%
2007 4.57 62,210 0.74 4.39 0.75 30
2006 3.19 55,290 0.75 4.14 0.75 25
2005 1.26 51,193 0.75 3.80 0.76 25
2004 2.15 47,080 0.75 3.82 0.79 57
Class N (commenced operations on April 13, 2000)
2008 (0.11)% $ 608 0.98% 4.02% 0.99% 12%
2007 4.30 1,043 0.99 4.13 1.00 30
2006 2.93 1,332 1.00 3.88 1.00 25
2005 0.91 1,530 1.00 3.55 1.01 25
2004 1.99 1,522 1.00 3.51 1.04 57
GOVERNMENT BOND FUND
Institutional Class (commenced operations on January 14, 2000)
2008 4.87% $66,097 0.70% 4.05% 0.77% 36%
2007 5.04 52,606 0.70 4.50 0.77 83
2006 2.89 35,671 0.70 4.04 0.78 62
2005 1.42 28,132 0.70 2.98 0.79 58
2004 0.81 20,901 0.70 2.39 0.81 169
Class N (commenced operations on April 13, 2000)
2008 4.59% $ 2,761 0.95% 3.80% 1.02% 36%
2007 4.77 2,632 0.95 4.25 1.02 83
2006 2.63 1,782 0.95 3.81 1.03 62
2005 1.16 554 0.95 2.70 1.04 58
2004 0.55 436 0.95 2.14 1.06 169
CALIFORNIA TAX EXEMPT BOND FUND
Institutional Class (commenced operations on January 14, 2000)
2008 1.38% $34,262 0.50% 3.13% 0.61% 55%
2007 2.98 33,802 0.50 3.04 0.62 43
2006 3.18 26,074 0.50 2.85 0.62 43
2005 1.65 22,768 0.50 2.70 0.63 54
2004 2.00 17,789 0.50 2.55 0.65 51
Class N (commenced operations on April 13, 2000)
2008 1.12% $ 1,049 0.75% 2.87% 0.86% 55%
2007 2.82 922 0.75 2.78 0.87 43
2006 2.81 1,134 0.75 2.59 0.87 43
2005 1.39 1,487 0.75 2.43 0.88 54
2004 1.84 2,439 0.75 2.29 0.90 51
HIGH YIELD BOND FUND
Institutional Class (commenced operations on January 14, 2000)
2008 (9.83)% $13,926 1.00% 7.72% 1.09% 20%
2007 7.27 17,137 1.00 7.73 1.10 26
2006 6.90 20,887 1.00 7.58 1.10 23
2005 4.85 22,588 1.00 7.71 1.11 46
2004 12.47 22,860 1.00 7.87 1.14 35
Class N (commenced operations on January 14, 2000)
2008 (10.10)% $17,521 1.30% 7.43% 1.39% 20%
2007 6.95 20,121 1.30 7.44 1.40 26
2006 6.58 20,045 1.30 7.28 1.40 23
2005 4.54 21,028 1.30 7.41 1.41 46
2004 12.14 20,655 1.30 7.56 1.44 35
+ PER SHARE CALCULATIONS ARE BASED ON THE AVERAGE SHARES OUTSTANDING
THROUGHOUT THE PERIOD.
+++ RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED. FEE
WAIVERS ARE IN EFFECT; IF THEY HAD NOT BEEN IN EFFECT, PERFORMANCE WOULD
HAVE BEEN LOWER. RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES THAT A
SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND
SHARES.
(1) ANNUALIZED FOR PERIODS LESS THAN ONE YEAR.
(2) RATIO INCLUDES WAIVERS AND PREVIOUSLY WAIVED INVESTMENT ADVISORY FEES
RECOVERED.THE IMPACT OF THE RECOVERED FEES MAY CAUSE A HIGHER NET EXPENSE
RATIO.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 75
financial highlights
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE YEAR ENDED SEPTEMBER 30,
RATIO
OF EXPENSES
RATIO TO AVERAGE
NET NET NET OF NET NET ASSETS
ASSET DIVIDENDS ASSET ASSETS RATIO INVESTMENT (EXCLUDING
VALUE NET FROM NET VALUE END OF EXPENSES INCOME WAIVERS &
BEGINNING INVESTMENT INVESTMENT END TOTAL OF PERIOD TO AVERAGE TO AVERAGE RECOVERED
OF PERIOD INCOME INCOME OF PERIOD RETURN+++ (000) NET ASSETS(1)(2) NET ASSETS(1) FEES)(1)
--------- ---------- ---------- --------- --------- ---------- ---------------- ------------- -----------
PRIME MONEY MARKET FUND
Institutional Class (commenced operations on March 23, 1998)
2008 $1.00 $0.030 $(0.030) $1.00 3.01% $ 532,931 0.58% 2.90% 0.58%
2007 1.00 0.047 (0.047) 1.00 4.85 438,639 0.59 4.74 0.60
2006 1.00 0.041 (0.041) 1.00 4.17 388,171 0.59 4.12 0.60
2005 1.00 0.021 (0.021) 1.00 2.10 332,393 0.60 2.05 0.61
2004 1.00 0.006 (0.006) 1.00 0.58 367,209 0.63 0.59 0.63
Class N (commenced operations on October 18, 1999)
2008 $1.00 $0.027 $(0.027) $1.00 2.78% $1,123,900 0.80% 2.65% 1.08%
2007 1.00 0.045 (0.045) 1.00 4.62 870,537 0.81 4.52 1.10
2006 1.00 0.039 (0.039) 1.00 3.94 640,366 0.81 3.95 1.10
2005 1.00 0.019 (0.019) 1.00 1.87 312,452 0.82 1.94 1.11
2004 1.00 0.004 (0.004) 1.00 0.36 201,058 0.85 0.35 1.13
Class S (commenced operations on October 26, 1999)
2008 $1.00 $0.025 $(0.025) $1.00 2.57% $ 633,815 1.00% 2.54% 1.08%
2007 1.00 0.043 (0.043) 1.00 4.41 620,195 1.01 4.32 1.10
2006 1.00 0.037 (0.037) 1.00 3.73 324,353 1.01 3.74 1.10
2005 1.00 0.017 (0.017) 1.00 1.67 203,502 1.02 1.70 1.11
2004 1.00 0.002 (0.002) 1.00 0.21 115,761 1.00 0.21 1.13
GOVERNMENT MONEY MARKET FUND
Institutional Class (commenced operations on April 3, 2000)
2008 $1.00 $0.027 $(0.027) $1.00 2.72% $ 100,674 0.59% 2.62% 0.59%
2007 1.00 0.047 (0.047) 1.00 4.77 47,858 0.60 4.67 0.61
2006 1.00 0.040 (0.040) 1.00 4.08 52,782 0.60 4.11 0.61
2005 1.00 0.020 (0.020) 1.00 2.05 32,039 0.61 1.97 0.62
2004 1.00 0.006 (0.006) 1.00 0.57 43,608 0.63 0.56 0.64
Class N (commenced operations on June 21, 1999)
2008 $1.00 $0.025 $(0.025) $1.00 2.49% $3,006,935 0.81% 2.40% 1.09%
2007 1.00 0.044 (0.044) 1.00 4.54 2,291,138 0.82 4.45 1.11
2006 1.00 0.038 (0.038) 1.00 3.86 1,940,602 0.82 3.78 1.11
2005 1.00 0.018 (0.018) 1.00 1.82 1,895,412 0.83 1.80 1.12
2004 1.00 0.004 (0.004) 1.00 0.35 1,857,676 0.85 0.35 1.14
Class S (commenced operations on October 6, 1999)
2008 $1.00 $0.023 $(0.023) $1.00 2.29% $ 408,747 1.02% 2.23% 1.09%
2007 1.00 0.042 (0.042) 1.00 4.33 321,061 1.02 4.24 1.11
2006 1.00 0.036 (0.036) 1.00 3.65 232,083 1.02 3.60 1.11
2005 1.00 0.016 (0.016) 1.00 1.62 227,905 1.03 1.61 1.12
2004 1.00 0.002 (0.002) 1.00 0.20 263,086 1.00 0.21 1.14
CALIFORNIA TAX EXEMPT MONEY MARKET FUND
Institutional Class (commenced operations on April 3, 2000)
2008 $1.00 $0.018 $(0.018) $1.00 1.80% $ 157,427 0.55% 1.69% 0.61%
2007 1.00 0.030 (0.030) 1.00 3.01 89,237 0.55 2.97 0.62
2006 1.00 0.026 (0.026) 1.00 2.62 85,014 0.55 2.60 0.62
2005 1.00 0.015 (0.015)* 1.00 1.51 73,211 0.55 1.46 0.63
2004 1.00 0.005 (0.005) 1.00 0.52 79,413 0.55 0.51 0.65
Class N (commenced operations on June 21, 1999)
2008 $1.00 $0.016 $(0.016) $1.00 1.57% $ 880,794 0.78% 1.47% 1.11%
2007 1.00 0.027 (0.027) 1.00 2.78 695,318 0.78 2.73 1.12
2006 1.00 0.024 (0.024) 1.00 2.39 631,478 0.78 2.36 1.12
2005 1.00 0.013 (0.013)* 1.00 1.28 569,671 0.78 1.25 1.13
2004 1.00 0.003 (0.003) 1.00 0.29 505,029 0.78 0.29 1.15
Class S (commenced operations on November 12, 1999)
2008 $1.00 $0.014 $(0.014) $1.00 1.37% $ 141,757 0.98% 1.40% 1.11%
2007 1.00 0.025 (0.025) 1.00 2.57 178,918 0.98 2.55 1.12
2006 1.00 0.022 (0.022) 1.00 2.18 107,131 0.98 2.17 1.12
2005 1.00 0.011 (0.011)* 1.00 1.08 88,182 0.98 1.09 1.13
2004 1.00 0.002 (0.002) 1.00 0.15 33,520 0.91 0.15 1.15
* INCLUDES A REALIZED CAPITAL GAIN DISTRIBUTION OF LESS THAN $0.001.
+++ RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED. FEE
WAIVERS ARE IN EFFECT; IF THEY HAD NOT BEEN IN EFFECT, PERFORMANCE WOULD
HAVE BEEN LOWER. RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES THAT A
SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND
SHARES.
(1) ANNUALIZED FOR PERIODS LESS THAN ONE YEAR.
(2) RATIO INCLUDES WAIVERS AND PREVIOUSLY WAIVED INVESTMENT ADVISORY FEES
RECOVERED. THE IMPACT OF THE RECOVERED FEES MAY CAUSE A HIGHER NET EXPENSE
RATIO.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
CNI CHARTER FUNDS | PAGE 76
notes to financial statements
SEPTEMBER 30, 2008
1. ORGANIZATION:
CNI Charter Funds, a Delaware statutory trust (the "Trust"), is registered under
the Investment Company Act of 1940, as amended, as an open-end management
investment company with 17 portfolios. The financial statements included herein
are those of the Large Cap Value Equity Fund, Large Cap Growth Equity Fund, RCB
Small Cap Value Fund, Opportunistic Value Fund (collectively, the "Equity
Funds"); Corporate Bond Fund, Government Bond Fund, California Tax Exempt Bond
Fund, High Yield Bond Fund (collectively, the "Fixed Income Funds"); Prime Money
Market Fund, Government Money Market Fund, California Tax Exempt Money Market
Fund (collectively, the "Money Market Funds"); and Multi-Asset Fund (each a
"Fund," collectively, the "Funds"). The Equity and Fixed Income Funds and the
Multi-Asset Fund are registered to offer Institutional and Class N Shares; in
addition, the Opportunistic Value Fund is registered to offer Class E Shares and
the RCB Small Cap Value Fund is registered to offer Class R Shares. The Money
Market Funds are registered to offer Institutional, Class N and Class S
Shares. The assets of each Fund are segregated, and a shareholder's interest is
limited to the Fund in which shares are held. The Funds' prospectuses provide
descriptions of each Fund's investment objectives, policies and strategies.
Class N and Institutional Class shares of the Multi-Asset Fund commenced
operations on October 1, 2007.
Class E, Class N and Institutional Class shares of the Opportunistic Value Fund
commenced operations on June 26, 2008.
Effective January 31, 2008, Class A shares of the Funds were redesignated as
Class N shares. There were no changes to the rights, fees or expenses of the
Class A shares or services provided to Class A shareholders in connection with
the change in designation to Class N.
On April 5, 2005, the Board of Trustees of CNI Charter Funds (the "Trust")
approved the reorganization of the AHA Limited Maturity Fixed Income Fund, AHA
Full Maturity Fixed Income Fund, AHA Balanced Fund, AHA Diversified Equity Fund,
and AHA Socially Responsible Equity Fund series of AHA Investment Funds, Inc.
(the "Predecessor AHA Funds") into newly established corresponding series of the
Trust (the "AHA Funds"). The reorganization was approved by shareholders of the
Predecessor AHA Funds and was effective on October 3, 2005. Class N and
Institutional Class shares of the AHA Funds are offered through separate
prospectuses. To request a prospectus for the AHA Funds, shareholders can call
1-800-445-1341 or write to CNI Charter Funds, c/o SEI Investments Distribution
Co., One Freedom Valley Drive, Oaks, Pennsylvania 19456.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies followed by the
Funds.
USE OF ESTIMATES - The preparation of financial statements in conformity with
accounting principles generally accepted in the U.S. requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of increases and decreases in
net assets from operations during the reporting period. Actual results could
differ from those estimates.
SECURITY VALUATION - Securities listed on a securities exchange, market or
automated quotation system for which quotations are readily available (except
for securities traded on NASDAQ) are valued at the last quoted sale price on the
primary exchange or market (foreign or domestic) on which they are traded, or,
if there is no such reported sale, at the most recent quoted bid price. For
securities traded on NASDAQ, the NASDAQ Official Closing Price is used. If
available, debt securities are priced based upon valuations provided by
independent, third-party pricing agents. Such values generally reflect the last
reported sales price if the security is actively traded. The third-party pricing
agents may also value debt securities at an evaluated bid price by employing
methodologies that utilize actual market transactions, broker-supplied
valuations, or other methodologies designed to identify the market value for
such securities. Debt obligations with remaining maturities of sixty days or
less may be valued at their amortized cost, which approximates market value. The
prices for foreign securities are reported in local currency and converted to
U.S. dollars using currency exchange rates. Prices for most securities held in
the Funds are provided daily by recognized independent pricing agents. If a
security price cannot be obtained from an independent, third-party pricing
agent, the Funds seek to obtain a bid price from at least one independent
broker.
Securities for which market prices are not "readily available" are valued in
accordance with Fair Value Procedures established by the Funds' Board of
Trustees. The Funds' Fair Value Procedures are implemented through a Fair Value
Committee (the "Committee") designated by the Funds' Board of Trustees. Some of
the more common reasons that may necessitate that a security be valued using
Fair Value Procedures include: the security's trading has been halted or
suspended; the security has been de-listed from a national exchange; the
security's primary trading market is temporarily closed at a time when under
normal conditions it would be open; for international securities, market events
occur after the close of the foreign markets that make closing prices not
representative of fair value; or the security's primary pricing source is not
able or
CNI CHARTER FUNDS | PAGE 77
notes to financial statements
SEPTEMBER 30, 2008
willing to provide a price. When a security is valued in accordance with the
Fair Value Procedures, the Committee will determine the value after taking into
consideration relevant information reasonably available to the Committee.
SECURITY TRANSACTIONS AND RELATED INCOME - Security transactions are accounted
for on the trade date of the security purchase or sale. Costs used in
determining net realized capital gains and losses on the sale of securities are
those of the specific securities sold. Interest income is recognized on the
accrual basis and dividend income is recognized on the ex-dividend date.
Purchase discounts and premiums on securities held by the Funds are accreted and
amortized to maturity using the scientific method, except for the Money Market
funds which use a straight line basis.
REPURCHASE AGREEMENTS - Securities pledged as collateral for repurchase
agreements are held by each Fund's custodian bank until maturity of the
repurchase agreements. Provisions of the agreements and procedures adopted by
the investment adviser require that the market value of the collateral,
including accrued interest thereon, is sufficient in the event of default by the
counterparty. The Funds also invest in tri-party repurchase agreements.
Securities held as collateral for tri-party repurchase agreements are maintained
by the broker's custodian bank in a segregated account until maturity of the
repurchase agreement. Provisions of the agreements require that the market value
of the collateral, including accrued interest thereon, is sufficient in the
event of default. If the counterparty defaults and the value of the collateral
declines or if the counterparty enters into an insolvency proceeding,
realization of the collateral by the Fund may be delayed or limited.
TBA TRANSACTIONS - The Funds may engage in "to be announced" ("TBA") security
transactions. Such transactions involve a commitment by the Funds to purchase or
sell securities for a predetermined price or yield, with payment and delivery
taking place beyond the customary settlement period. The Funds record TBA
securities on the trade date and maintain security positions such that
sufficient liquid assets will be available to make payments for the securities
purchased.
EXPENSE ALLOCATION - Common expenses incurred by the Funds are allocated among
the Funds (i) based upon relative average daily net assets, (ii) as incurred on
a specific identification basis, or (iii) equally among the Funds, depending on
the nature of the expenditure.
CLASSES - Class-specific expenses are borne by that class. Income, non
class-specific expenses, and realized and unrealized gains/losses are allocated
to the respective class on the basis of relative net asset value each day.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends from net investment
income are declared daily and paid to shareholders monthly for the Fixed Income
and Money Market Funds. Dividends from net investment income are declared and
paid quarterly for the Large Cap Value Equity, Large Cap Growth Equity,
Opportunistic Value and Multi-Asset Funds. For the RCB Small Cap Value Fund,
dividends from net investment income are declared and paid annually.
Distributions from net realized capital gains are distributed to shareholders at
least annually.
DEFERRED OFFERING COSTS - All offering costs incurred with the start up of a
Fund are being amortized on a straight line basis over a period of twelve months
from commencement of operations. As of September 30, 2008, the remaining amount
still to be amortized for the Opportunistic Value Fund was $17,740. The
Multi-Asset Fund was fully amortized as of the fiscal year end.
3. ADMINISTRATION, TRANSFER AGENT, DISTRIBUTION AND SHAREHOLDER SERVICES
AGREEMENTS:
Pursuant to an administration agreement dated April 1, 1999, as amended April 1,
2008, (the "Agreement"), SEI Investments Global Funds Services (the
"Administrator"), a wholly owned subsidiary of SEI Investments Company, acts as
the Trust's administrator. Under the terms of the Agreement, the Administrator
is entitled to receive an annual fee of 0.065% of aggregate average daily net
assets of the Trust not exceeding $2.5 billion, 0.045% of aggregate average
daily net assets of the Trust exceeding $2.5 billion but not exceeding $5
billion, 0.025% of aggregate average daily net assets of the Trust exceeding $5
billion but not exceeding $7.5 billion, and 0.02% of aggregate average daily net
assets of the Trust exceeding $7.5 billion. Each Fund is subject to a minimum
annual fee of $90,000, which may be reduced at the sole discretion of the
Administrator.
The Trust has adopted a Rule 12b-1 Distribution Plan ("the Plan") with respect
to Class N, Class S and Class R Shares that allows each Fund to pay distribution
and servicing fees. SEI Investments Distribution Co. (the "Distributor")
receives a distribution fee, computed daily and paid monthly, at the annual rate
of 0.50% of the average daily net assets of the Class N Shares and Class S
Shares of the Money Market Funds and 0.25% of the Class N Shares of the Equity
Funds, Fixed Income Funds and the Multi-Asset Fund and the Class R Shares of the
RCB Small Cap Value Fund, with the exception of 0.30% charged to the Class N
Shares of the High Yield Bond Fund, which may be used by the Distributor to
provide compensation for sales support and distribution-related activities.
The Trust and the Distributor are parties to a distribution agreement dated
April 1, 1999.
CNI CHARTER FUNDS | PAGE 78
SEI Institutional Transfer Agency, a division of SEI Investments Fund Management
Corporation (the "Transfer Agent"), serves as transfer agent for the Trust and
provides services at an annual rate of $15,000 per share class. The Transfer
Agent has agreed to waive these fees. The Class R shares of the RCB Small Cap
Value Fund began paying the sub-transfer agent, Citigroup Fund Services, LLC,
fees commencing February 1, 2008.
U.S. Bank, N.A. (the "Custodian") serves as custodian for the Trust. The
Custodian plays no role in determining the investment policies of the Trust or
which securities are to be purchased or sold by the Trust.
The Trust has entered into Shareholder Servicing Agreements that permit payment
of compensation to City National Bank ("CNB") and its affiliates, which provide
certain shareholder support for their customers who own Institutional Class,
Class N, Class S or Class R Shares. In consideration for such services, a
shareholder servicing fee is charged at the annual rate of up to 0.25% of each
Fund's average daily net assets. CNB has agreed to voluntarily waive portions of
its shareholder servicing fees with respect to certain Funds. For the year ended
September 30, 2008, CNB received Shareholder Servicing fees from the Trust in
the amount of $13,281,818.
Certain officers of the Trust are also officers of City National Asset
Management, Inc. ("CNAM, Inc." or the "Adviser") or the Administrator. Such
officers are paid no fees by the Trust for serving as officers of the Trust.
4. INVESTMENT ADVISORY FEES AND OTHER AGREEMENTS:
CNAM, Inc., a wholly owned subsidiary of CNB, serves as the investment manager
for the Funds. Under the terms of the current agreement, the Adviser receives an
annual fee equal to 0.62% of the average daily net assets of the Large Cap Value
Equity Fund, 0.65% of the average daily net assets of the Large Cap Growth
Equity Fund, 0.85% of the average net assets of the RCB Small Cap Value Fund,
0.50% of the average daily net assets of the Opportunistic Value Fund, 0.50% of
the average daily net assets of the Multi-Asset Fund, 0.40% of the average daily
net assets of the Corporate Bond Fund, 0.43% of the average daily net assets of
the Government Bond Fund, 0.27% of the average daily net assets of the
California Tax Exempt Bond Fund, 0.75% of the average daily net assets of the
High Yield Bond Fund, 0.25% of the average daily net assets of the Prime Money
Market Fund, 0.26% of the average daily net assets of the Government Money
Market Fund, and 0.27% of the average daily net assets of the California Tax
Exempt Money Market Fund.
REED, CONNER & BIRDWELL, LLC acts as the investment sub-adviser with respect to
the RCB Small Cap Value Fund.
HALBIS CAPITAL MANAGEMENT (USA), INC. acts as the investment sub-adviser with
respect to the High Yield Bond Fund.
SKBA Capital Management, LLC acts as the investment sub-adviser with respect to
the Opportunistic Value Fund.
Sub-adviser fees are paid by the Adviser.
The Adviser has voluntarily agreed to limit its fees or reimburse expenses to
the extent necessary to keep operating expenses at or below certain percentages
of the Funds' respective average daily net assets. The voluntary expense
limitations (expressed as percentages of average daily net assets) are as
follows:
Large Cap Large Cap RCB
Value Growth Small Cap Opportunistic
Equity Equity Value Value
Fund Fund Fund Fund
---------- --------- ---------- -------------
Institutional Class 1.00% 1.05% 1.24% 1.00%
Class N 1.25% 1.30% 1.49% 1.25%
Class E -- -- -- 0.75%
Class R -- -- 1.49% --
California
Multi- Corporate Government Tax Exempt
Asset Bond Bond Bond
Fund Fund Fund Fund
------ --------- ---------- ----------
Institutional Class 1.75% 0.75% 0.70% 0.50%
Class N 2.00% 1.00% 0.95% 0.75%
California
High Yield Prime Government Tax Exempt
Bond Money Market Money Market Money Market
Fund Fund Fund Fund
---------- ------------ ------------ --------------
Institutional Class 1.00% 0.63% 0.63% 0.55%
Class N 1.30% 0.85% 0.85% 0.78%
Class S -- 1.05% 1.05% 0.98%
Any fee reductions or expense reimbursements may be repaid to the Adviser within
three years after occurrence, subject to certain restrictions and only if such
repayments do not cause the Funds' expense ratios, at the time of repayment, to
exceed the amounts shown in the preceding table.
As of September 30, 2008, fees which were previously waived by the Adviser which
may be subject to possible future reimbursement to the Adviser were as follows:
Potential
Amount of
Recovery
Fund (000) Expiration
- ---- ---------- ----------
Opportunistic Value $ 1 2011
Government Bond 23 2009
31 2010
39 2011
California Tax Exempt Bond 28 2009
34 2010
34 2011
High Yield Bond 38 2009
35 2010
29 2011
California Tax Exempt Money Market 516 2009
494 2010
583 2011
CNI CHARTER FUNDS | PAGE 79
notes to financial statements
SEPTEMBER 30, 2008
5. INVESTMENT TRANSACTIONS:
The cost of security purchases and proceeds from the sale and maturities of
securities, other than temporary investments in short-term securities for the
year ended September 30, 2008, were as follows for the Equity Funds, Multi-Asset
Fund and Fixed Income Funds:
Purchases Sales & Maturities
-------------------- -------------------
U.S. Gov't Other U.S. Gov't Other
Fund (000) (000) (000) (000)
---- ---------- ------- ---------- -------
Large Cap Value Equity $ -- $44,026 $ -- $39,702
Large Cap Growth Equity -- 13,483 -- 22,194
RCB Small Cap Value -- 31,661 -- 45,179
Opportunistic Value -- 50,049 -- 2,064
Multi-Asset 4,361 42,970 2,141 20,790
Corporate Bond 3,786 5,330 1,859 5,637
Government Bond 34,806 -- 20,779 1,305
California Tax Exempt Bond -- 19,589 -- 17,928
High Yield Bond -- 7,492 -- 6,602
6. FEDERAL TAX INFORMATION:
It is each Fund's intention to continue to qualify as a regulated investment
company for Federal income tax purposes and distribute all of its taxable income
and net capital gains. Accordingly, no provisions for Federal income taxes are
required.
Management has analyzed the Funds' tax position taken on federal income tax
returns for all open tax years and has concluded that as of September 30, 2008,
no provision for income tax would be required in the Funds' financial
statements. The Funds' federal and state income and federal excise tax returns
for tax years for which the applicable statutes of limitations have not expired
are subject to examination by the Internal Revenue Service and state departments
of revenue.
The Funds may be subject to taxes imposed by countries in which they invest,
with respect to their investments in issuers existing or operating in such
countries. Such taxes are generally based on income earned. The Funds accrue
such taxes when the related income is earned.
The timing and characterization of certain income and capital gains
distributions are determined annually in accordance with Federal tax
regulations, which may differ from accounting principles generally accepted in
the United States of America. As a result, net investment income (loss) and net
realized gain (loss) on investment transactions for a reporting period may
differ significantly from distributions during such period. These book/tax
differences may be temporary or permanent. To the extent these differences are
permanent in nature, they are charged or credited to undistributed net
investment income (loss), accumulated net realized gain (loss), or
paid-in-capital, as appropriate, in the period that the differences arise.
Accordingly, the following permanent difference, primarily attributable to REIT
adjustments, corporate action adjustments, the realized gains (losses) on
paydowns and the timing of distributions, have been reclassified to/from the
following accounts:
Increase Increase
(Decrease) (Decrease)
Undistributed Accumulated
Net Investment Net Realized
Income (Loss) Gain (Loss)
Fund (000) (000)
- ---- -------------- ------------
Large Cap Value Equity $(123) $123
Large Cap Growth Equity 1 (1)
RCB Small Cap Value 72 (72)
Corporate Bond (3) 3
Government Bond 11 (11)
These reclassifications had no effect on the net assets or net asset value per
share.
The tax character of dividends and distributions declared during the years ended
September 30, 2008 and September 30, 2007 are shown below:
Tax Long-term
Exempt Ordinar Capital
Income Income Gain Total
Fund (000) (000) (000) (000)
- ---- ----------- -------- --------- -------------
Large Cap Value Equity
2008 $ -- $ 1,827 $5,489 $ 7,316
2007 -- 2,039 5,502 7,541
Large Cap Growth Equity
2008 -- 152 -- 152
2007 -- 246 -- 246
RCB Small Cap Value
2008 -- 3,067 6,538 9,605
2007 -- 2 1,108 1,110
Opportunistic Value
2008 -- -- -- --
Multi-Asset
2008 -- 473 -- 473
Corporate Bond
2008 -- 2,888 -- 2,888
2007 -- 2,595 -- 2,595
Government Bond
2008 -- 2,639 -- 2,639
2007 -- 2,072 -- 2,072
California Tax Exempt Bond
2008 1,063 -- -- 1,063
2007 950 1 -- 951
High Yield Bond
2008 -- 2,806 -- 2,806
2007 -- 2,880 -- 2,880
Prime Money Market
2008 -- 61,899 -- 61,899
2007 -- 73,650 -- 73,650
Government Money Market
2008 -- 73,655 -- 73,655
2007 -- 106,396 -- 106,396
California Tax Exempt
Money Market
2008 17,064 11 -- 17,075
2007 22,975 -- -- 22,975
CNI CHARTER FUNDS | PAGE 80
As of September 30, 2008, the components of Distributable Earnings/(Accumulated
Losses) on a tax basis were as follows:
Undistributed Undistributed Capital Post- Unrealized Other Total
Tax-Exempt Ordinary Loss October Appreciation Temporary Distributable Earnings
Income Income Carryforwards Losses (Depreciation) Differences (Accumulated Losses)
Fund (000) (000) (000) (000) (000) (000) (000)
- ---- ------------- ------------- ------------- -------- -------------- ----------- ----------------------
Large Cap Value Equity $ -- $ 330 $ -- $(1,918) $(1,192) $ (457) $ (3,237)
Large Cap Growth Equity -- 46 (2,153) -- 786 (36) (1,357)
RCB Small Cap Value -- 439 -- (635) (6,866) -- (7,062)
Opportunistic Value -- 174 -- (725) (5,103) -- (5,654)
Multi-Asset -- 182 -- (362) (2,832) (181) (3,193)
Corporate Bond -- 243 (451) (90) (3,185) (243) (3,726)
Government Bond -- 215 (535) -- 430 (216) (106)
California Tax Exempt Bond 93 -- (42) (52) (482) (93) (576)
High Yield Bond -- 283 (789) (563) (6,497) (228) (7,794)
Prime Money Market -- 3,639 -- -- -- (3,553) 86
Government Money Market -- 3,846 -- -- -- (3,831) 15
California Tax Exempt
Money Market 2,581 -- -- -- -- (2,578) 3
For tax purposes, the losses in the Funds can be carried forward for a maximum
of eight years to offset any future net realized capital gains. At September 30,
2008, the breakdown of capital loss carryforwards is as follows:
Expiring September 30,
-------------------------------------------------
2010 2011 2012 2013 2014 2015 2016
Fund (000) (000) (000) (000) (000) (000) (000) Total
- ---- ----- ------- ----- ----- ----- ----- ----- -----
Large Cap Growth Equity 82 1,844 227 -- -- -- -- 2,153
Corporate Bond -- -- -- -- 64 271 116 451
Government Bond -- -- -- -- 59 374 102 535
California Tax Exempt Bond -- -- -- -- -- 35 7 42
High Yield Bond -- 521 -- -- 268 -- -- 789
During the year ended September 30, 2008,the following Funds had utilized
capital loss carryforwards to offset capital gains amounting to:
Amount
Fund (000)
---------
Large Cap Growth Equity $224
High Yield Bond 37
Prime Money Market 210
Post-October losses represent losses realized on investments and foreign
currency transactions from November 1, 2007 through September 30, 2008 that, in
accordance with Federal income tax regulations, the Funds have elected to defer
and treat as having arisen in the following fiscal year.
The aggregate gross unrealized appreciation on securities, the aggregate gross
unrealized depreciation on securities and the net unrealized
appreciation/(depreciation) for tax purposes at September 30, 2008 for each of
the Equity and Fixed Income Funds and Multi-Asset Fund were as follows:
Aggregate Aggregate Net
Gross Gross Unrealized
Federal Unrealized Unrealized Appreciation
Tax Cost Appreciation Depreciation (Depreciation)
Fund (000) (000) (000) (000)
- ---- -------- ------------- ------------ --------------
Large Cap Value Equity $101,568 $9,855 $(11,047) $(1,192)
Large Cap Growth Equity 41,889 5,234 (4,448) 786
RCB Small Cap Value 32,434 3,869 (10,735) (6,866)
Opportunistic Value 50,990 1,575 (6,678) (5,103)
Multi Asset 31,119 13 (2,845) (2,832)
Corporate Bond 73,071 298 (3,483) (3,185)
Government Bond 68,388 451 (21) 430
California Tax Exempt Bond 35,321 158 (640) (482)
High Yield Bond 37,212 82 (6,579) (6,497)
At September 30, 2008, the Money Market Funds' cost of secu- rities for Federal
income tax purposes approximates the cost located in the Schedule of
Investments.
7. CONCENTRATION OF CREDIT RISK
In the normal course of business, the Funds enter into contracts that provide
general indemnifications.The Funds' maximum exposure under these arrangements is
dependent on future claims that may be made against the Funds and, therefore,
cannot be established; however, based on experience, the risk of loss from such
claim is considered remote.
The Multi-Asset Fund may invest in exchange-traded notes ("ETNs") as a
non-principal investment strategy. ETNs are unsecured debt obligations of
investment banks which are traded on exchanges and the returns of which are
linked to the performance of market indexes. In addition to trading ETNs on
exchanges, investors may redeem ETNs directly with the issuer on a weekly basis,
typically in a minimum amount of 50,000 units, or hold the ETNs until maturity.
ETNs are riskier than ordinary unsecured debt securities and have no principal
protection.The Fund will generally invest in ETNs which are linked to
commodities indexes.The Fund's investment in an ETN may be influenced by many
unpredictable factors, including highly volatile commodities prices, changes in
supply and demand relationships, weather, agriculture, trade, changes in
interest rates, and monetary and other governmental policies, action and
inaction. Investing in ETNs is not equivalent to investing directly in index
components or the relevant index itself. Because ETNs are debt securities, they
possess credit risk; if the issuer has financial difficulties or goes bankrupt,
the investor may not receive the return it was promised.
CNI CHARTER FUNDS | PAGE 81
notes to financial statements
SEPTEMBER 30, 2008
CALIFORNIA TAX EXEMPT FUNDS - SPECIFIC RISKS
The ability of issuers to pay interest on, and repay principal of, California
municipal securities may be affected by economic and political developments in
the State of California.
Certain securities are backed by letters of credit from various financial
institutions and financial guaranty assurance agencies. These letters of credit
enhance the credit quality of the individual securities; however, if any of the
financial institutions or financial guaranty assurance agencies' credit quality
should deteriorate, it could cause the individual security's credit quality to
change. Additionally, if any of the Funds concentrate their letters of credit in
any one financial institution, the risk of credit quality deterioration
increases.
8. FUND MERGER
On April 15, 2007, the assets of the Technology Growth Fund were reorganized
into the Large Cap Growth Fund. In this merger, 635,779 shares of the Technology
Growth Fund were exchanged for 351,181 shares of the Large Cap Growth Fund in a
tax-free exchange.
The value of the Technology Growth Fund on April 15, 2007 was $2,920,545. Upon
the business combination of such Funds on April 15, 2007, the value of the
Technology Growth Fund, which included accumulated realized losses of
$1,428,382, and unrealized appreciation of $335,437, combined with the Large Cap
Growth Fund was $56,094,352.
9. CAPITAL SHARES ISSUED AND REDEEMED:
Capital share activity for the years ended September 30, 2008 and September 30,
2007 were as follows:
Large Cap Value Large Cap Growth RCB Small Cap Opportunistic
Equity Fund (000) Equity Fund (000) Value Fund (000) Value Fund (000)
----------------- ----------------- ---------------- ----------------
2008 2007 2008 2007 2008 2007 2008
-------- ------ ------- ------- ------ ------- ----------------
CAPITAL SHARES ISSUED
AND REDEEMED:
INSTITUTIONAL CLASS:
Shares Issued 2,441 1,943 638 1,265 43 74 --
Shares Issued from merger(1) -- -- -- 164 -- -- --
Shares Issued in Lieu of
Dividends and Distributions 469 433 6 8 55 6 --
Shares Redeemed (2,015) (1,531) (1,601) (893) (286) (262) --
------ ------ ------ ----- ---- ---- -----
Net Institutional
Class Transactions 895 845 (957) 544 (188) (182) --
====== ====== ====== ====== ==== ==== =====
CLASS N:
Shares Issued 66 379 107 461 4 20 1(2)
Shares Issued from merger(1) -- -- -- 187 -- -- --
Shares Issued in Lieu of
Dividends and Distributions 66 69 1 3 55 5 --
Shares Redeemed (246) (179) (274) (283) (116) (78) --
------ ------ ------ ----- ---- ---- -----
Net Class N Transactions (114) 269 (166) 368 (57) (53) 1
====== ====== ====== ====== ==== ==== =====
CLASS E:
Shares Issued -- -- -- -- -- -- 4,863(2)
Shares Redeemed -- -- -- -- -- -- --
------ ------ ------ ----- ---- ---- -----
Net Class E Transactions -- -- -- -- -- -- 4,863
====== ====== ====== ====== ==== ==== =====
CLASS R:
Shares Issued -- -- -- -- 264 171 --
Shares Issued in Lieu of
Dividends and Distributions -- -- -- -- 280 23 --
Shares Redeemed -- -- -- -- (704) (487) --
------ ------ ------ ----- ---- ---- -----
Net Class R Transactions -- -- -- -- (160) (293) --
====== ====== ====== ====== ==== ==== =====
CNI CHARTER FUNDS | PAGE 82
9. CAPITAL SHARES ISSUED AND REDEEMED (CONTINUED):
California
Multi-Asset Corporate Bond Government Bond Tax Exempt Bond
Fund (000) Fund (000) Fund (000) Fund (000)
----------- -------------- --------------- ---------------
2008 2008 2007 2008 2007 2008 2007
----------- ------ ----- ------ ------ ------ ------
CAPITAL SHARES ISSUED
AND REDEEMED:
INSTITUTIONAL CLASS:
Shares Issued 1,269 2,342 1,450 2,308 2,138 1,027 1,526
Shares Issued in Lieu of
Dividends and
Distributions 5 59 49 67 55 36 33
Shares Redeemed (167) (1,372) (824) (1,109) (572) (958) (803)
----- ----- ----- ----- ----- ----- -----
Net Institutional
Class Transactions 1,107 1,029 675 1,266 1,621 105 756
===== ====== ===== ===== ===== ===== =====
CLASS N:
Shares Issued 1,916 4 21 74 97 76 6
Shares Issued in Lieu of
Dividends and
Distributions 11 2 2 4 3 -- 1
Shares Redeemed (204) (46) (52) (67) (19) (62) (27)
----- ----- ----- ----- ----- ----- -----
Net Class N Transactions 1,723 (40) (29) 11 81 14 (20)
===== ====== ===== ===== ===== ===== =====
California
High-Yield Prime Government Tax Exempt
Bond Money Market Money Market Money Market
Fund (000) Fund (000) Fund (000) Fund (000)
----------- ----------------------- ----------------------- -----------------------
2008 2007 2008 2007 2008 2007 2008 2007
---- ---- ---------- ---------- ---------- ---------- ---------- ----------
CAPITAL SHARES ISSUED
AND REDEEMED:
INSTITUTIONAL CLASS:
Shares Issued 142 177 1,704,267 1,324,934 553,021 532,859 1,830,572 2,517,017
Shares Issued in Lieu of
Dividends and
Distributions 104 94 2,772 3,872 3 4 -- --
Shares Redeemed (288) (679) (1,612,805) (1,278,386) (500,209) (537,787) (1,762,382) (2,512,794)
---- ---- ---------- ---------- ---------- ---------- ---------- ----------
Net Institutional
Class Transactions (42) (408) 94,234 50,420 52,815 (4,924) 68,190 4,223
==== ==== ========== ========== ========== ========== ========== ==========
CLASS N:
Shares Issued 193 157 3,333,223 2,695,734 6,290,498 5,523,344 2,477,610 2,143,730
Shares Issued in Lieu of
Dividends and
Distributions 121 100 13,996 12,208 43,391 62,437 9,947 13,108
Shares Redeemed (205) (236) (3,093,998) (2,477,866) (5,618,090) (5,235,257) (2,302,084) (2,092,998)
---- ---- ---------- ---------- ---------- ---------- ---------- ----------
Net Class N Transactions 109 21 253,221 230,076 715,799 350,524 185,473 63,840
==== ==== ========== ========== ========== ========== ========== ==========
CLASS S:
Shares Issued -- -- 1,657,732 1,873,534 801,055 775,804 409,458 390,230
Shares Redeemed -- -- (1,644,197) (1,577,751) (713,370) (686,827) (446,618) (318,443)
---- ---- ---------- ---------- ---------- ---------- ---------- ----------
Net Class S Transactions -- -- 13,535 295,783 87,685 88,977 (37,160) 71,787
==== ==== ========== ========== ========== ========== ========== ==========
(1) SEE NOTE 8 IN THE NOTES TO FINANCIAL STATEMENTS.
(2) INCLUDES SUBSCRIPTIONS AS A RESULT OF IN-KIND TRANSFERS OF SECURITIES (SEE
NOTE 10).
AMOUNTS DESIGNATED AS "--" ARE EITHER 0 OR HAVE BEEN ROUNDED TO 0.
CNI CHARTER FUNDS | PAGE 83
notes to financial statements
SEPTEMBER 30, 2008
10. IN-KIND TRANSACTIONS
During the year ended September 30, 2008, the Opportunistic Value Fund issued
shares of beneficial interest in exchange for securities. The securities were
transferred at their current value on June 26, 2008 as follows:
Shares Value
Issued ($ Thousands)
- ------- -------------
579,800 $5,979
11. RECENT ACCOUNTING PRONOUNCEMENTS
In September 2006, FASB issued Statement on Financial Accounting Standards
(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 financial statements issued
for fiscal years beginning after November 15, 2007 and interim periods within
those fiscal years. The changes to current generally accepted accounting
principles 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 September 30, 2008, 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 in the financial statements for a fiscal period.
12. SUBSEQUENT EVENT
The CNI Charter Funds Board of Trustees approved the participation by the Prime
Money Market Fund, Government Money Market Fund and California Money Market Fund
(each, a "Fund," and collectively, the "Funds") in the U.S. Department of the
Treasury's Temporary Guarantee Program for Money Market Funds (the "Program").
The Program insures shares held by money market fund investors as of the close
of business on September 19, 2008 against loss in the event that a money market
fund liquidates its holdings and shareholders receive less than $1.00 per share.
The guarantee is triggered if the money market fund's net asset value per share
falls below $0.995. Participation by a Fund in the Program does not reflect a
decision by the Fund to liquidate, and the Trust, in consultation with the
Funds' investment adviser, City National Asset Management, Inc., views the
liquidation of each Fund as unlikely. The Program covers shareholders of each
Fund for amounts they held in the Fund as of the close of business on September
19, 2008. New accounts opened since September 19, 2008 and any increase in the
number of shares held by a shareholder after the close of business on September
19, 2008 will not be guaranteed. If shares held by a shareholder as of the close
of business on September 19, 2008 are sold before the guarantee is called upon,
then the guarantee will only cover the lesser of the number of shares held by
that shareholder as of September 19, 2008, or the number of shares held by that
shareholder on the date the guarantee is called upon. If a shareholder closes
its account after September 19, 2008, new investments by that shareholder in the
Fund will not be guaranteed. Guarantee payments under the Program will not
exceed the amount available to all participating money market funds within the
U.S. Department of the Treasury's Exchange Stabilization Fund ("ESF") on the
date of payment. Currently, ESF assets are approximately $50 billion.
The Program is designed to address temporary dislocations in the credit
markets. The Program will operate through December 18, 2008. After the initial
term, the Secretary of the Treasury has the option to extend the Program up to
the close of business on September 18, 2009. Participation in the initial three
months of the Program requires a payment to the U.S. Department of the Treasury
in the amount of 0.01% of the net asset value of each Fund as of September 19,
2008. This expense will be borne by each Fund and will not be subject to any
expense limitation currently in effect. If the Program is extended, each Fund
will consider whether to participate, and there is no assurance that each Fund
will continue to participate in the Program. Participation in any extensions of
the Program will require an additional payment by each Fund. Additional
information about the Program is available on the U.S. Department of the
Treasury's website at www.ustreas.gov.
CNI CHARTER FUNDS | PAGE 84
report of independent registered public accounting firm
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF CNI CHARTER FUNDS:
We have audited the accompanying statements of assets and liabilities of the CNI
Charter Funds comprised of the Large Cap Value Equity Fund, Large Cap Growth
Equity Fund, RCB Small Cap Value Fund, Opportunistic Value Fund, Corporate Bond
Fund, Government Bond Fund, California Tax Exempt Bond Fund, High Yield Bond
Fund, Multi-Asset Fund, Prime Money Market Fund, Government Money Market Fund,
and California Tax Exempt Money Market Fund (collectively, "the Funds"),
including the schedules of investments, as of September 30, 2008 and the related
statements of operations for the year or period then ended, and the changes in
net assets for each of the years or periods in the two-year period then ended,
and financial highlights for each of the years or periods in the five-year
period then ended. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of September 30, 2008, by correspondence with the custodian
and broker or by other appropriate audit procedures when replies from brokers
were not received. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
CNI Charter Funds as of September 30, 2008, the results of their operations for
the year or period then ended, the changes in their net assets for each of the
years or periods in the two-year period then ended, and the financial highlights
for each of the years or periods in the five-year period then ended, in
conformity with U.S. generally accepted accounting principles.
/s/ KPMG LLP
NOVEMBER 24, 2008
CNI CHARTER FUNDS | PAGE 85
trustees and officers (UNAUDITED)
SEPTEMBER 30, 2008
Information pertaining to the Trustees and Officers of the Trust is set forth
below as of September 30, 2008. Trustees who are not deemed to be "interested
persons" of the Trust as defined in the Investment Company Act of 1940 are
referred to as "Independent Trustees."Trustees who are deemed to be "interested
persons" of the Trust are referred to as "Interested Trustees."The Trust's
Statement of Additional Information ("SAI") includes additional information
about the Trustees and Officers.The SAI may be obtained without charge by
calling 1-888-889-0799.
TERM OF
OFFICE NUMBER OF
AND PORTFOLIOS IN OTHER
NAME POSITION(S) LENGTH OF FUND COMPLEX DIRECTORSHIPS
ADDRESS, HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY
AND AGE(1) TRUST SERVED(2) DURING PAST FIVE YEARS BOARD MEMBER(3) TRUSTEE(4)
- --------------------- ----------- ---------- ------------------------------------------- --------------- -------------
INTERESTED TRUSTEE
Vernon C. Kozlen* Trustee Since President and Chief Executive Officer, CNI 17 None
Age: 65 May 2007 Charter Funds (2000-2007). Executive Vice
President and Director of Asset Management
Development, CNB (1996-2007). Director,
Reed, Conner & Birdwell LLC (2000-present),
and Convergent Capital Management, LLC
(2003-present). Chairman of the Board,
CNAM, Inc. (2001-2005). Chairman of the
Board, City National Securities, Inc.
(1999-2005). Director, CNAM, Inc.
(2001-2006), and City National Securities,
Inc. (1999-2006).
INDEPENDENT TRUSTEES
Irwin G. Barnet, Esq. Trustee Since 1999 Attorney and partner, Reed Smith LLP, a law 17 None
Age: 70 firm (2003-present).Attorney and principal,
Crosby, Heafey, Roach & May P.C., a law
firm (2000-2002 ). Attorney and principal,
Sanders, Barnet, Goldman, Simons & Mosk, a
law firm (1980-2000).
Victor Meschures Trustee Since 1999 Certified Public Accountant, Meschures, 17 None
Age: 70 Campeas,Thompson, Snyder and Pariser, LLP,
an accounting firm (1964-present).
William R. Sweet Trustee Since 1999 Retired. Executive Vice President, Union 17 None
Age: 71 Bank of California (1985-1996).
James Wolford Trustee Since 1999 Chief Financial Officer, Bixby Land 17 None
Age: 54 Company, a real estate company
(2004-present). Regional Financial Officer,
AIMCO, a real estate investment trust
(2004). Chief Financial Officer, DBM Group,
a direct mail marketing company
(2001-2004). Senior Vice President and Chief
Operating Officer, Forecast Commercial Real
Estate Service, Inc. (2000-2001). Senior
Vice President and Chief Financial Officer,
Bixby Ranch Company (1985-2000).
CNI CHARTER FUNDS | PAGE 86
TERM OF
OFFICE
AND
NAME POSITION LENGTH OF
ADDRESS, HELD WITH TIME PRINCIPAL OCCUPATION(S)
AND AGE TRUST SERVED(2) DURING PAST FIVE YEARS
- ------------------------ ----------------- --------- --------------------------------------------------------
OFFICERS
Timothy D. Barto Vice President Since Attorney, Vice President and Assistant Secretary of SEI
SEI Investments and Assistant 2000 Investments (1999-Present).Vice President and Assistant
One Freedom Valley Drive Secretary Secretary of Administrator (1999-Present). Officer of
Oaks, PA 19456 various investment companies administered by
Age: 40 Administrator (1999-2004).Assistant Secretary of the
Distributor (2003-2004).Vice President of the
Distributor (1999-2004).
Eric Kleinschmidt Controller and Since Director of Fund Accounting, SEI Investments
SEI Investments Chief Operating 2005 (2004-Present). Manager of Fund Accounting, SEI
One Freedom Valley Drive Officer Investments (1999-2004).
Oaks, PA 19456
Age: 40
Valerie Y. Lewis Vice President Since Chief Compliance Officer, CNAM, Inc. (August,
City National Bank and Chief 2005 2005-present). Fund Boards Specialist - Assistant
400 N. Roxbury Drive Compliance Secretary, Capital Research and Management and Company
Beverly Hills, CA 90210 Officer Capital International, Inc. (1999-2005).
Age: 52
James Ndiaye Vice President Since Attorney, SEI Investments Company (2004-present).Vice
SEI Investments and Assistant 2005 President, Deutsche Asset Management
One Freedom Valley Drive Secretary (2003-2004).Associate, Morgan Lewis & Bockius LLP
Oaks, PA 19456 (2000-2003).Assistant Vice President, ING Variable
Age: 40 Annuities Group (1999-2000).
Michael T. Pang Vice President Since Attorney, SEI Investments Company (2005-present).
SEI Investments and Assistant 2005 Counsel, Caledonian Bank & Trust's Mutual Funds Group
One Freedom Valley Drive Secretary (2004-2005). Counsel, Permal Asset Management
Oaks, PA 19456 (2001-2004).Associate, Schulte, Roth & Zabel's
Age: 36 Investment Management Group (2000-2001).
- ----------
(1) Each trustee may be contacted by writing to the Trustee c/o CNI Charter
Funds, One Freedom Valley Drive, Oaks, PA 19456.
(2) Each trustee shall hold office during the lifetime of this Trust until he
or she dies, resigns, is declared bankrupt or incompetent by a court of
appropriate jurisdiction, or is removed, or, if sooner, until the next
meeting of shareholders is called for the purpose of electing trustees and
until the election and qualification of his or her successor in accordance
with the Trust's Declaration of Trust. The president, treasurer and
secretary shall hold office until their respective successors are chosen or
qualified, or until their removal or resignation, or in each case until he
or she sooner dies, resigns, is removed, or becomes disqualified in
accordance with the Trust's by-laws.
(3) The "Fund Complex" consists of all series of the Trust. As of September 30,
2008, the Fund Complex consisted of 17 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.
* Mr. Kozlen is an "interested person" of the Trust, as defined in the 1940
Act, by virtue of his position with CNB, the parent company of CNAM, Inc.,
until March 2007.
CNI CHARTER FUNDS | PAGE 87
trustees and officers (UNAUDITED) (CONTINUED)
SEPTEMBER 30, 2008
TERM OF
OFFICE
AND
NAME POSITION LENGTH OF
ADDRESS, HELD WITH TIME PRINCIPAL OCCUPATION(S)
AND AGE TRUST SERVED DURING PAST FIVE YEARS
- ------------------------ ----------------- --------- --------------------------------------------------------
OFFICERS (CONCLUDED)
Rodney J. Olea Vice President Since Senior Vice President, CNAM, Inc. (2001-present). Senior
City National Bank 2000 Vice President and Director of Fixed Income, CNB
400 N. Roxbury Drive (1994-present).
Beverly Hills, CA 90210
Age: 43
Joseph Gallo Vice President Since Attorney for SEI Investments since 2007. Associate
SEI Investments and Secretary 2008 Counsel at ICMA-RC from 2004 to 2007. Assistant
One Freedom Valley Drive Secretary of The Vantage Trust Company in 2007.
Oaks, PA 19456 Assistant Secretary of The Vantagepoint Funds from 2006
Age: 35 to 2007. Investigator, U.S. Department of Labor from
2002 to 2004.
Timothy G. Solberg Vice President Since Managing Director and Chief Investment Officer, CCM
CCM Advisors, LLC and Assistant 2005 Advisors (2001-present); Director of Marketing and
190 S. LaSalle Street Secretary Client Services, Hewitt Investment Group, a Division of
Suite 2800 Hewitt Associates LLC (1989-2001).
Chicago, IL 60603
Age: 55
Susan Rudzinski Vice President Since Compliance Director, Convergent Capital Management, LLC
CCM Advisors, LLC May (2006-present); Self-employed Investment Advisory
190 S. LaSalle Street 2007 Compliance and Operations Consultant (2005-2006);
Suite 2800 Manager,Affiliate Contracts, The Burridge Group LLC
Chicago, IL 60603 (2003-2004).
Age: 45
Richard A. Weiss President Since President, CNAM, Inc. (2001-present). Executive Vice
City National Bank and Chief 2008 President and Chief Investment Officer, CNB
400 N. Roxbury Drive Executive Officer (1999-present). Director, City National Securities
Beverly Hills, CA 90210 (April 2003-present). Executive Vice President and Chief
Age: 48 Investment Officer. Sanwa Bank California (1994-1999).
CNI CHARTER FUNDS | PAGE 88
notice to shareholders (UNAUDITED)
SEPTEMBER 30, 2008
For shareholders that do not have a September 30, 2008 taxable year end, this
notice is for informational purposes only. For shareholders with a September 30,
2008 taxable year end, please consult your tax advisor as to the pertinence of
this notice.
For California income tax purposes, for the fiscal year ended September 30,
2008, each of the California Tax Exempt Bond Fund and California Tax Exempt
Money Market Fund is designating 82.82% and 93.28%, respectively, of its
distributions paid from net investment income as exempt-interest dividends under
Section 17145 of the California Revenue and Taxation Code.
For Federal income tax purposes, for the fiscal year ended September 30, 2008
each Fund is designating the following items with regard to distributions paid
during the year:
(E)
DIVIDENDS
(A) (B) QUALIFYING
LONG TERM ORDINARY (C) (D) FOR CORPORATE
CAPITAL GAIN INCOME TAX EXEMPT TOTAL DIVIDENDS REC.
DISTRIBUTIONS DISTRIBUTIONS INTEREST DISTRIBUTIONS DEDUCTION (1)
------------- ------------- ---------- ------------- --------------
Large Cap Value Equity Fund 75.34% 24.66% 0.00% 100.00% 100.00%
Large Cap Growth Equity Fund 0.00% 100.00% 0.00% 100.00% 100.00%
RCB Small Cap Value Fund 68.07% 31.93% 0.00% 100.00% 21.13%
Opportunistic Value Fund 0.00% 0.00% 0.00% 0.00% 0.00%
Multi-Asset Fund 0.00% 100.00% 0.00% 100.00% 0.82%
Corporate Bond Fund 0.00% 100.00% 0.00% 100.00% 0.00%
Government Bond Fund 0.00% 100.00% 0.00% 100.00% 0.00%
California Tax Exempt Bond Fund 0.00% 0.00% 100.00% 100.00% 0.00%
High Yield Bond Fund 0.00% 100.00% 0.00% 100.00% 0.00%
Prime Money Market Fund 0.00% 100.00% 0.00% 100.00% 0.00%
Government Money Market Fund 0.00% 100.00% 0.00% 100.00% 0.00%
California Tax Exempt Money
Market Fund 0.00% 0.07% 99.93% 100.00% 0.00%
(F)
QUALIFYING
DIVIDEND (G) (H) (I)
INCOME U.S. INTEREST SHORT -TERM
(15% RATE GOVERNMENT RELATED CAPITAL GAIN
FOR QDI) (2) INTEREST (3) DIVIDENDS (4) DIVIDENDS (5)
------------ ------------ ------------- -------------
Large Cap Value Equity Fund 100.00% 0.00% 0.00% 0.00%
Large Cap Growth Equity Fund 100.00% 0.00% 0.00% 0.00%
RCB Small Cap Value Fund 22.03% 0.00% 7.81% 100.00%
Opportunistic Value Fund 0.00% 0.00% 0.00% 0.00%
Multi-Asset Fund 19.73% 29.64% 22.85% 0.00%
Corporate Bond Fund 0.00% 3.39% 96.70% 0.00%
Government Bond Fund 0.00% 27.34% 96.84% 0.00%
California Tax Exempt Bond Fund 0.00% 0.00% 0.00% 0.00%
High Yield Bond Fund 0.00% 0.00% 99.40% 0.00%
Prime Money Market Fund 0.00% 3.54% 99.86% 0.00%
Government Money Market Fund 0.00% 40.27% 99.99% 0.00%
California Tax Exempt Money
Market Fund 0.00% 0.00% 0.06% 0.00%
(1) "DIVIDENDS RECEIVED DEDUCTION" REPRESENT DIVIDENDS WHICH QUALIFY FOR THE
CORPORATE DIVIDENDS RECEIVED DEDUCTION.
(2) "QUALIFYING DIVIDEND INCOME" REPRESENT QUALIFYING DIVIDENDS AS CREATED BY
THE JOBS AND GROWTH TAX RELIEF RECONCILIATION ACT OF 2003. IT IS THE
INTENTION OF THE FUND TO DESIGNATE THE MAX AMOUNT PERMITTED BY LAW.
(3) "U.S. GOVERNMENT INTEREST" REPRESENT 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 ORDINARY INCOME.
GENERALLY, INTEREST FROM DIRECT U.S. GOVERNMENT OBLIGATIONS IS EXEMPT FROM
STATE INCOME TAX. HOWEVER, FOR SHAREHOLDERS WHO ARE RESI- DENTS OF
CALIFORNIA, CONNECTICUT OR NEW YORK, THE STATUTORY THRESHOLD REQUIREMENTS
WERE NOT SATISFIED TO PERMIT EXEMPTION OF THESE AMOUNTS FROM STATE INCOME.
(4) "INTEREST RELATED DIVIDENDS" REPRESENT QUALIFYING INTEREST THAT IS EXEMPT
FROM U.S. WITHHOLDING TAX WHEN PAID TO FOREIGN INVESTORS AS CREATED BY THE
AMERICAN JOBS CREATION ACT OF 2004. THIS PROVISION OF THE INTERNAL REVENUE
CODE WILL BE EXPIRING FOR YEARS BEGINNING AFTER JANUARY 1, 2010.
(5) "SHORT-TERM CAPITAL GAIN DIVIDENDS" REPRESENT QUALIFYING SHORT-TERM CAPITAL
GAIN THAT IS EXEMPT FROM U.S. WITHHOLDING TAX WHEN PAID TO FOREIGN
INVESTORS AS CREATED BY THE AMERICAN JOBS CREATION ACT OF 2004. THIS
PROVISION OF THE INTERNAL REVENUE CODE WILL BE EXPIRING FOR YEARS BEGINNING
AFTER JANUARY 1, 2010.
ITEMS (A), (B), (C) AND (D) ARE BASED ON THE PERCENTAGE OF EACH FUND'S TOTAL
DISTRIBUTION.
ITEMS (E) AND (F) ARE BASED ON THE PERCENTAGE OF "ORDINARY INCOME
DISTRIBUTIONS."
ITEM (G) IS BASED ON THE PERCENTAGE OF GROSS INCOME OF EACH FUND.
ITEM (H) IS BASED ON THE PERCENTAGE OF NET INVESTMENT INCOME DISTRIBUTIONS.
ITEM (I) IS BASED ON THE PERCENTAGE OF SHORT-TERM CAPITAL GAIN DISTRIBUTIONS.
CNI CHARTER FUNDS | PAGE 89
disclosure of fund expenses (UNAUDITED)
All mutual funds have operating expenses. As a shareholder of a Fund, your
investment is affected by these ongoing costs, which include (among others)
costs for portfolio management, administrative services, class-specific
distribution fees and shareholder reports like this one. It is important for you
to understand the impact of these costs on your investment returns.
Operating expenses such as these are deducted from the Fund's gross income and
directly reduce your final investment return. These expenses are expressed as a
percentage of the Fund's average net assets; this percentage is known as the
Fund's expense ratio.
The following examples use the expense ratio and are intended to help you
understand the ongoing costs (in dollars) of investing in your Fund and to
compare these costs with those of other mutual funds. The examples are based on
an investment of $1,000 made at the beginning of the period shown and held for
the entire period.
The table below illustrates your Fund's costs in two ways:
ACTUAL FUND RETURN. This section helps you to estimate the actual expenses that
your Fund incurred over the period. The "Expenses Paid During Period" column
shows the actual dollar expense cost incurred by a $1,000 investment in the
Fund, and the "Ending Account Value" number is derived from deducting that
expense cost from the Fund's gross investment return.
You can use this information, together with the actual amount you invested in
the Fund, to estimate the expenses you paid over that period. Simply divide your
actual account value by $1,000 to arrive at a ratio (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply that ratio by the number
shown for your Fund under "Expenses Paid During Period."
HYPOTHETICAL 5% RETURN. This section helps you compare your Fund's costs with
those of other mutual funds. It assumes that the Fund had an annual 5% return
before expenses during the year, but that the expense ratio (Column 3) for the
period is unchanged. This example is useful in making comparisons because the
Securities and Exchange Commission requires all mutual funds to make this 5%
calculation. You can assess your Fund's comparative cost by comparing the
hypothetical result for your Fund in the "Expenses Paid During Period" column
with those that appear in the same charts in the shareholder reports for other
funds.
NOTE: Because the return is set at 5% for comparison purposes - NOT your Fund's
actual return - the account values shown do not apply to your specific
investment.
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
4/1/08 9/30/08 RATIOS PERIOD*
--------- --------- ---------- --------
LARGE CAP VALUE FUND
ACTUAL FUND RETURN
Institutional Class $1,000.00 $ 911.80 0.95% $ 4.54
Class N 1,000.00 910.50 1.20% 5.73
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,020.25 0.95% $ 4.80
Class N 1,000.00 1,019.00 1.20% 6.06
LARGE CAP GROWTH FUND
ACTUAL FUND RETURN
Institutional Class $1,000.00 $ 911.90 0.98% $ 4.68
Class N 1,000.00 911.00 1.23% 5.88
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,020.10 0.98% $ 4.95
Class N 1,000.00 1,018.85 1.23% 6.21
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
4/1/08 9/30/08 RATIOS PERIOD*
--------- --------- ---------- --------
RCB SMALL CAP VALUE FUND
ACTUAL FUND RETURN
Institutional Class $1,000.00 $ 864.70 1.20% $5.59
Class N 1,000.00 863.60 1.46% 6.80
Class R 1,000.00 865.50 1.09% 5.08
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,019.00 1.20% $6.06
Class N 1,000.00 1,017.70 1.46% 7.36
Class R 1,000.00 1,019.55 1.09% 5.50
OPPORTUNISTIC VALUE FUND(1)
ACTUAL FUND RETURN
Institutional Class $1,000.00 $ 931.00 0.23% $0.58+
Class N 1,000.00 931.00 1.20% 3.04+
Class E 1,000.00 930.00 0.69% 1.75+
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,018.75 0.23% $1.16
Class N 1,000.00 1,019.00 1.20% 6.06
Class E 1,000.00 1,021.55 0.69% 3.49
(1) Commenced operations June 26, 2008.
* Expenses are equal to the Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 183/366 (to reflect
the one-half year period).
+ Expenses are equal to the Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 96/366 (to reflect the
period from the Fund's commencement through September 30, 2008).
CNI CHARTER FUNDS | PAGE 90
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
4/1/08 9/30/08 RATIOS PERIOD*
--------- --------- ---------- --------
MULTI-ASSET FUND
ACTUAL FUND RETURN
Institutional Class $1,000.00 $ 923.50 1.25% $6.01
Class N 1,000.00 921.50 1.49% 7.16
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,018.75 1.25% $6.31
Class N 1,000.00 1,017.55 1.49% 7.52
CORPORATE BOND FUND
ACTUAL FUND RETURN
Institutional Class $1,000.00 $ 964.60 0.73% $3.59
Class N 1,000.00 963.50 0.98% $4.81
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,021.35 0.73% $3.69
Class N 1,000.00 1,020.10 0.98% 4.95
GOVERNMENT BOND FUND
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,004.90 0.70% $3.51
Class N 1,000.00 1,003.60 0.95% 4.76
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,021.50 0.70% $3.54
Class N 1,000.00 1,020.25 0.95% 4.80
CALIFORNIA TAX-EXEMPT BOND FUND
ACTUAL FUND RETURN
Institutional Class $1,000.00 $ 996.90 0.50% $2.50
Class N 1,000.00 995.70 0.75% 3.74
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,022.50 0.50% $2.53
Class N 1,000.00 1,021.25 0.75% 3.79
HIGH YIELD BOND FUND
ACTUAL FUND RETURN
Institutional Class $1,000.00 $ 940.10 1.00% $4.85
Class N 1,000.00 938.70 1.30% 6.30
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,020.00 1.00% $5.05
Class N 1,000.00 1,018.50 1.30% 6.56
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
4/1/08 9/30/08 RATIOS PERIOD*
--------- --------- ---------- --------
PRIME MONEY MARKET FUND
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,010.70 0.58% $2.92
Class N 1,000.00 1,009.50 0.80% 4.02
Class S 1,000.00 1,008.50 1.00% 5.02
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,022.10 0.58% $2.93
Class N 1,000.00 1,021.00 0.80% 4.04
Class S 1,000.00 1,020.00 1.00% 5.05
GOVERNMENT MONEY MARKET FUND
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,009.10 0.59% $2.96
Class N 1,000.00 1,008.00 0.81% 4.07
Class S 1,000.00 1,007.00 1.01% 5.07
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,022.05 0.59% $2.98
Class N 1,000.00 1,020.95 0.81% 4.09
Class S 1,000.00 1,019.95 1.01% 5.10
CALIFORNIA TAX EXEMPT MONEY MARKET FUND
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,006.80 0.55% $2.76
Class N 1,000.00 1,005.70 0.78% 3.91
Class S 1,000.00 1,004.60 0.98% 4.91
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,022.25 0.55% $2.78
Class N 1,000.00 1,021.10 0.78% 3.94
Class S 1,000.00 1,020.10 0.98% 4.95
* Expenses are equal to the Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 183/366 (to reflect
the one-half year period).
CNI CHARTER FUNDS | PAGE 91
Board Approval of Advisory and Sub-Advisory Agreements
(UNAUDITED)
The Board of Trustees of CNI Charter Funds (the "Trust") is comprised of five
Trustees, four of whom are independent of the Trust's investment advisers and
sub-advisers (the "Independent Trustees"). During the six months ended September
30, 2008, the Board and the Independent Trustees approved renewal of the Trust's
advisory agreement (the "Management Agreement") with City National Asset
Management, Inc. ("CNAM"); renewal of CNAM's sub-advisory agreement (the "RCB
Agreement") with Reed, Conner & Birdwell, LLC ("RCB") with respect to the RCB
Small Cap Value Fund (the "RCB Fund"); renewal of CNAM's sub-advisory agreement
(the "Halbis Agreement") with Halbis Capital Management (USA), Inc. ("Halbis")
with respect to the High Yield Bond Fund; amendment of the Management Agreement
to add the new Opportunistic Value Fund series of the Trust; and approval of a
new sub-advisory agreement (the "SKBA Agreement") between CNAM and SKBA Capital
Management, LLC ("SKBA") with respect to the Opportunistic Value Fund. The RCB
Agreement, the Halbis Agreement and the SKBA Agreements are collectively
referred to below as the "Sub-Advisory Agreements" and the Management Agreement
and Sub-Advisory Agreements are referred to below as the "Agreements."
GENERAL INFORMATION
The following information summarizes the Board's considerations associated with
its review of the Agreements. In connection with their deliberations, the Board
considered such information and factors as they believed, in light of the legal
advice furnished to them and their own business judgment, to be relevant. The
Agreements were considered separately for each relevant investment portfolio of
the Trust (each a "Fund"), although the Board took into account the common
interests of all the relevant Funds in its review. As described below, the Board
considered the nature, quality and extent of the various investment advisory and
administrative services performed by CNAM, RCB and Halbis and to be performed by
SKBA. In considering these matters, the Independent Trustees discussed the
approval of the Agreements with management and in private sessions with counsel
at which no representatives of CNAM, RCB, Halbis or SKBA were present.
The Board reviewed extensive materials regarding investment results of CNAM,
RCB, Halbis, and SKBA and advisory fee and expense comparisons, financial
information with respect to each entity, descriptions of various functions such
as compliance monitoring and portfolio trading practices, and information about
the personnel providing investment management and administrative services to the
Funds. They also took into account information they received at past Board
meetings with respect to these matters.
In deciding to approve the Agreements, the Board and the Independent Trustees
did not identify a single factor as controlling and this summary does not
describe all of the matters considered. However, the Board and the Independent
Trustees concluded that each of the various factors referred to below favored
such approval.
CNAM
NATURE, EXTENT AND QUALITY OF SERVICES
In reviewing the services provided by CNAM, the Board considered a variety of
matters, including the background, education and experience of its key portfolio
management and operational personnel; its overall financial strength and
stability; its resources and efforts to retain, attract and motivate capable
personnel to serve the Funds; and the overall general quality and depth of its
organization. The Board also took into account the experience, capability and
integrity of its senior management; its investment philosophy and processes,
including sub-adviser oversight processes; its brokerage, trading and soft
dollar practices; its disaster recovery and contingency planning; and its
commitment and systems in place with regard to compliance with applicable laws
and regulations.
INVESTMENT PERFORMANCE*
The Board assessed the performance of each Fund compared with its respective
benchmark and the average of all funds in its respective peer group category
(each, a "universe") selected by Lipper, Inc. and iMoneyNet, Inc. (for the money
market funds only) for the one-, two-, three- and five-year and since inception
periods ended June 30, 2008 (one-, three- and six-months and since inception
periods with respect to the Multi-Asset Fund, which commenced operations on
October 1, 2007). The Board also reviewed the performance of each Fund compared
with the average performance of all funds in its respective "bank channel"
universe, which includes only those funds in the Fund's Lipper universe that are
distributed through
CNI CHARTER FUNDS | PAGE 92
Board Approval of Advisory and Sub-Advisory Agreements
(UNAUDITED) (CONTINUED)
institutional and retail bank channels. The Board made the following
observations in reviewing the Funds' performance:
- - The annualized total returns of the PRIME MONEY MARKET FUND AND CALIFORNIA
TAX EXEMPT MONEY MARKET FUND were slightly below but near the average
returns of the relevant Lipper institutional money market fund universes,
iMoneyNet institutional fund universes, and bank channel universes for all
periods.
- - The annualized total returns of the GOVERNMENT MONEY MARKET FUND were below
the average returns of the relevant Lipper institutional money market fund
universe and near or above the average returns of the relevant iMoneyNet
institutional fund universe and bank channel universe for all periods
except for the period since inception (for which period the Fund's returns
were below all measures).
- - The annualized total returns of the LARGE CAP GROWTH EQUITY FUND were above
the average returns of the Lipper large cap growth fund universe and bank
channel universe and the S&P 500/Citigroup Growth Index returns for the
two- and three-year and since inception periods, above the Lipper large cap
growth fund universe and the S&P 500/Citigroup Growth Index returns and
below the bank channel universe returns for the one-year period, and below
all those measures for the five-year period.
- - The annualized total returns of the LARGE CAP VALUE EQUITY FUND were above
the average returns of the S&P 500/Citigroup Value Index returns and below
the Lipper large cap value funds universe and the bank channel universe
returns for the one- and two-year periods, above those measures (except the
Index) for the three- and five-year periods, and below those measures for
the period since inception.
- - The annualized total returns of the RCB SMALL CAP VALUE FUND were below the
Lipper small cap core funds universe average returns, Russell 2000 Index
returns and bank channel universe average returns for the one-, two-,
three- and five-year periods, but were above all those measures for the
period since inception.
- - The annualized total returns of the MULTI-ASSET FUND were above the Lipper
flexible portfolio funds universe and bank channel universe returns for the
one-, three- and six-month periods and the period since inception and below
a blended index comprised of 60% in the S&P 500 Index and 40% in the
Barclays Intermediate Government/Credit Index (the "Blended Index"), CPI
plus 500 basis points benchmark and the Barclays US Treasury Inflation
Protected Securities Index for all periods (except the Barclays Index for
the 3-month period and the Blended Index for the since inception period).
- - The annualized total returns of the CORPORATE BOND FUND were above the
average returns of the Lipper short/intermediate investment-grade universe,
the bank channel universe, and the Barclays Intermediate US Corporate Index
returns for the one-, two- and three- year periods and above all measures
except for the Index for the five-year and since inception periods.
- - The annualized total returns of the GOVERNMENT BOND FUND were above the
average returns of the Lipper short/intermediate US government universe and
the bank channel universe and below the Barclays US Government Bond Index
returns for all periods.
- - The annualized total returns of the CALIFORNIA TAX EXEMPT BOND FUND were
above the average returns of the Lipper California short/intermediate debt
universe and the bank channel universe and below the Barclays California
Intermediate-Short Municipal Index returns for all periods.
- - The annualized total returns of the HIGH YIELD BOND FUND were above the
average returns of the Lipper high current yield bond fund universe and the
bank channel universe and below the Citigroup Bond High-Yield Market Index
returns for the one-, two-, three- and five-year periods and above all
measures for the period since inception.
The Board concluded that CNAM continued to provide high quality management and
oversight services to the Funds. They noted that the investment results of the
Funds were generally good during the past year and, in most cases, during
previous periods; that in the instances where some of the Funds had below
average short-term performance results their longer term results were good; that
the results for the Money Market Funds compared to their peer groups were
acceptable given the special services and investment focuses of those Funds; and
that consideration of returns of market indexes needed to take into account that
indexes do not reflect the expenses of operating mutual funds.
CNI CHARTER FUNDS | PAGE 93
Board Approval of Advisory and Sub-Advisory Agreements
(UNAUDITED) (CONTINUED)
With respect to the Opportunistic Value Fund, the Board noted that CNAM intended
to delegate all active portfolio management with respect to the Fund to SKBA.
The Board considered the performance returns of SKBA's Value Opportunity
composite, which SKBA managed using substantially the same investment strategies
as it would use with respect to the Opportunistic Value Fund, subject to CNAM's
oversight. The Board noted that the annual returns of the Value Opportunity
composite for the one- and three-year periods ending December 31, 2007 were
lower than the returns for the S&P 500 Index, the Russell 1000 Value Index, the
Lipper large cap value funds universe average, the bank channel universe
average, and the average of a peer group of 40 funds included in the Lipper
universe that were expected to be most similar to the Fund based on factors
including minimum investments and asset size (the "Peer Group"). The Trustees
noted, however, that the Value Opportunity composite returns were higher than
the returns of the S&P 500 Index, Lipper universe and bank channel universe for
the five-year period, and above all measures for the seven-year, ten-year and
since-inception periods ending December 31, 2007 (except for the Russell 1000
Index for the since-inception period). The Board concluded that CNAM would
likely be able to provide high quality management and oversight services to the
Opportunistic Value Fund.
ADVISORY FEES AND FUND EXPENSES
The Board reviewed information regarding the advisory fees charged by CNAM and
the total expenses of each of the Funds compared to those of the funds included
in the relevant Lipper and bank channel universes, and concluded that the
advisory fees and expenses of the Funds continued to be reasonable.
The Board observed that the actual investment advisory fees (net of fee waivers)
paid by the California Tax-Exempt Money Market Fund, California Tax-Exempt Bond
Fund and Multi-Asset Fund were below the relevant Lipper averages, and the fees
paid by the other Funds were within the middle 60% of all funds in the relevant
Lipper universe (except for the Government Money Market Fund and the High Yield
Bond Fund, which were in the highest 20% of the funds in the relevant Lipper
universes). With respect to the Government Money Market Fund, the Board noted
the substantial demands on CNAM's portfolio management staff described below.
With respect to the High Yield Bond Fund, the Board observed that the average
credit quality of the Fund's holdings is higher than the average credit quality
of other high yield bond funds, and that highly specialized expertise and
continuous monitoring is required to maintain such high average credit quality.
As the Funds represent CNAM's sole investment advisory clients, the Board was
not able to compare the fees charged to the Funds by CNAM with fees charged to
other institutional clients of CNAM.
With respect to the total expenses of the Funds, the Board considered that total
expenses (before fee waivers) as of June 30, 2008 were below the averages for
relevant Lipper fund universes (except for the Prime Money Market Fund,
California Tax-Exempt Money Market Fund, Government Money Market Fund and
Multi-Asset Fund, each of which were within the middle 60% of funds in its
Lipper universe). The Board noted that the Money Market Funds offered unique
features such as automatic sweep functions, late cut-off times for investment,
and no minimum transaction size requirements, and as a result had high levels of
activity and considerable asset volatility, which created substantial demands on
CNAM's portfolio management staff. With respect to the Multi-Asset Fund, the
Board observed that the Fund had commenced operations on October 1, 2007 and
that the assets of the Fund were relatively low.
With respect to the Opportunistic Value Fund, the Trustees noted that CNAM's
proposed annual investment advisory fee was below the average advisory fee of
the funds in each of the Peer Group, the Lipper universe and the bank channel
universe. In considering total expenses, the Trustees noted that the estimated
expense ratios for all classes of the Fund were lower than the average total
expense ratios of the funds in the Lipper universe and the bank channel
universe.
The Board considered information prepared by CNAM relating to its costs and
profits with respect to the Funds, noting that because the Trust is CNAM's sole
client, all of CNAM's costs are allocable to the Trust. The Board also
considered the benefits received by CNAM and its affiliates as a result of
CNAM's relationship with the Funds, including investment advisory fees paid to
CNAM, fees paid to City National Bank and City National Securities, Inc. for
providing certain shareholder servicing and sub-distribution services to the
Trust, and the intangible benefits of any favorable publicity arising in
connection with the Funds' performance. They also noted that although there were
no advisory fee breakpoints,
CNI CHARTER FUNDS | PAGE 94
Board Approval of Advisory and Sub-Advisory Agreements
(UNAUDITED) (CONTINUED)
based on CNAM's operations significant economies of scale were not likely to be
realized until the asset levels of most of the Funds were significantly higher
than their current levels.
CONCLUSIONS
Based on their review, including their consideration of each of the factors
referred to above, the Board and the Independent Trustees concluded that the
compensation payable to CNAM pursuant to the Management Agreement is fair and
reasonable in light of the nature and quality of the services being provided by
CNAM to the respective Funds and their shareholders, and that renewal of the
Management Agreement was in the best interest of the Funds and their
shareholders. With respect to the Opportunistic Value Fund, the Board and the
Independent Trustees concluded that the compensation proposed to be paid to CNAM
by the Fund pursuant to the Management Agreement is fair and reasonable in light
of the nature and quality of the services to be provided by CNAM to the Fund and
its shareholders, and that approval of the amended Management Agreement was in
the best interest of the Fund and its shareholders.
RCB
NATURE, EXTENT AND QUALITY OF SERVICES
In reviewing the services provided by RCB to the RCB Fund, the Board considered
a variety of matters, including the background, education and experience of its
key portfolio management and operational personnel; its overall financial
strength and stability; its resources and related efforts to retain, attract and
motivate capable personnel to serve the RCB Fund; and the overall general
quality and depth of its organization. The Board also reviewed RCB's investment
philosophy and processes as well as its brokerage and trading practices.
INVESTMENT PERFORMANCE
The Board's observations regarding the RCB Fund's performance are described
above. The Board noted that although the RCB Fund had underperformed relative to
the Lipper small cap core funds universe average returns and Russell 2000 Index
returns for the short-term periods, the RCB Fund's long-term performance was
good, and the Board determined to continue to monitor the performance of the RCB
Fund.
ADVISORY FEES AND FUND EXPENSES
The Board reviewed information regarding the advisory fees charged by RCB and
observed that the fees charged by RCB were low compared to the fees it charged
to other institutional clients. They noted that CNAM pays RCB's sub-advisory
fees out of CNAM's advisory fee. Although RCB's fee schedule has no breakpoints,
they also noted that the asset levels of the RCB Fund were not so substantial
that they would lead to significant economies of scale.
The Board considered information prepared by RCB relating to its costs and
profits with respect to the RCB Fund, as well as the methodologies used to
determine and allocate such costs to its management of the Fund. The Board also
considered the benefits received by RCB and its affiliates as a result of RCB's
relationship with the Fund, including the sub-advisory fees paid to RCB, fees
paid to CNAM as the Fund's adviser, fees paid to City National Bank and City
National Securities, Inc. for providing certain shareholder servicing and
sub-distribution services to the Trust, and the intangible benefits of any
favorable publicity arising in connection with the RCB Fund's performance.
CONCLUSIONS
Based on their review, including their consideration of each of the factors
referred to above, the Board and the Independent Trustees concluded that the
compensation payable to RCB pursuant to the RCB Agreement is fair and reasonable
in light of the nature and quality of the services being provided by RCB to the
RCB Fund and its shareholders, and that renewal of the RCB Agreement was in the
best interest of the Fund and its shareholders.
HALBIS
NATURE, EXTENT AND QUALITY OF SERVICES
In reviewing the services provided by Halbis to the High Yield Bond Fund, the
Board considered a variety of matters, including the background, education and
experience of its key portfolio management and operational personnel; its
overall financial strength and stability; its resources and related efforts to
retain, attract and motivate capable personnel to serve the High Yield Bond
Fund; and the overall general quality and
CNI CHARTER FUNDS | PAGE 95
Board Approval of Advisory and Sub-Advisory Agreements
(UNAUDITED) (CONCLUDED)
depth of its organization. The Board also reviewed Halbis' investment philosophy
and processes as well as its brokerage and trading practices.
INVESTMENT PERFORMANCE
The Board's observations regarding the High Yield Bond Fund's performance are
described above. As indicated above, the Board and the Independent Trustees
concluded that Halbis continued to provide high quality services to the High
Yield Bond Fund.
ADVISORY FEES AND FUND EXPENSES
The Board reviewed information regarding the advisory fees charged by Halbis and
observed that the fees charged by Halbis were low compared to its standard fee
schedule. They also noted that CNAM pays Halbis' sub-advisory fees out of CNAM's
advisory fee.
The Board considered information prepared by Halbis relating to its revenues
with respect to the High Yield Bond Fund as well as the benefits received by
Halbis as a result of Halbis' relationship with the Funds, including fees paid
to Halbis as the Fund's sub-adviser and the intangible benefits of any favorable
publicity arising in connection with the High Yield Bond Fund's performance.
CONCLUSIONS
Based on their review, including their consideration of each of the factors
referred to above, the Board and the Independent Trustees concluded that the
compensation payable to Halbis pursuant to the Halbis Agreement is fair and
reasonable in light of the nature and quality of the services being provided by
Halbis to the High Yield Bond Fund and its shareholders, and that renewal of the
Halbis Agreement was in the best interest of the Fund and its shareholders.
SKBA
NATURE, EXTENT AND QUALITY OF SERVICES
In reviewing the services to be provided by SKBA to the Opportunistic Value
Fund, the Board considered a variety of matters, including the background,
education and experience of its key portfolio management and operational
personnel; its overall financial strength and stability; its resources and
related efforts to retain, attract and motivate capable personnel to serve the
Opportunistic Value Fund; and the overall general quality and depth of its
organization. The Board also reviewed SKBA's investment philosophy and processes
as well as its brokerage and trading practices.
INVESTMENT PERFORMANCE
The Board's observations regarding SKBA's Value Opportunity composite
performance are described above. As indicated above, the Board and the
Independent Trustees concluded that SKBA would likely provide high quality
services to the Opportunistic Value Fund.
ADVISORY FEES AND FUND EXPENSES
With respect to SKBA's proposed advisory fees, the Trustees made the same
observations they had made in reviewing CNAM's advisory fee with respect to the
Fund. They also noted that SKBA's proposed advisory fee with respect to the
Opportunistic Value Fund was higher than SKBA's fees with respect to the other
series of the Trust for which it serves as sub-adviser. The Trustees considered,
however, that SKBA had agreed to implement expense caps for all classes of the
Fund, and that any reimbursement of Fund expenses in excess of the caps would be
SKBA's responsibility. They also noted that CNAM pays SKBA's sub-advisory fees
out of CNAM's advisory fee.
The Board considered information prepared by SKBA relating to its costs and
profits with respect to the Opportunistic Value Fund, as well as the
methodologies used to determine and allocate such costs to its management of the
Fund. The Board also considered the benefits to be received by SKBA as a result
of SKBA's relationship with the Opportunistic Value Fund, including fees paid to
SKBA as the Fund's sub-adviser and the intangible benefits of any favorable
publicity arising in connection with the Fund's performance.
CONCLUSIONS
Based on their review, including their consideration of each of the factors
referred to above, the Board and the Independent Trustees concluded that the
compensation proposed to be paid to SKBA pursuant to the SKBA Agreement is fair
and reasonable in light of the nature and quality of the services to be provided
by SKBA to the Opportunistic Value Fund and its shareholders, and that approval
of the SKBA Agreement would be in the best interest of the Fund and its
shareholders.
* PRIOR TO OCTOBER 31, 2008, THE "BARCLAYS" INDEXES WERE NAMED THE "LEHMAN"
INDEXES.
CNI CHARTER FUNDS | PAGE 96
(GRPHIC)
THANK YOU
for your investment with CNI Charter Funds. We value the trust you have placed
in us to help you achieve your financial goals.
(GRAPHIC)
For more information on CNI Charter Funds, including charges and expenses,
please call 1-888-889-0799 for a free prospectus. Read it carefully before you
invest or send money.
(CNI CHARTER FUNDS(SM) LOGO) (LOGO)
CNI-AR-001-0700
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer and principal
accounting officer.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a)(1) The registrant's board of trustees has determined that the registrant has
at least one audit committee financial expert serving on the audit committee.
(a)(2) The audit committee financial experts are William R. Sweet and James R.
Wolford. Messrs. Sweet and Wolford are independent as defined in Form N-CSR Item
3(a)(2).
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Fees billed by KPMG LLP related to the Trust
KPMG LLP billed the Trust aggregate fees for services rendered to the Trust for
the last two fiscal years as follows:
- ------------------ ----------------------------------------------------- -----------------------------------------------------
2008 2007
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
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 $315,000 N/A N/A $278,000 N/A N/A
Fees(1)
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(b) Audit- N/A N/A N/A N/A N/A N/A
Related
Fees
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(c) Tax
Fees $66,400 N/A N/A $66,075 N/A N/A
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(d) All N/A N/A N/A N/A N/A N/A
Other
Fees
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
Notes:
(1) Audit fees include amounts related to the audit of the registrant's
annual financial statements and services normally provided by the
accountant in connection with statutory and regulatory filings.
(e)(1) The audit committee's pre-approval policies and procedures described
in paragraph (c)(7) of Rule 2-01 of Regulation S-X are as follows.
PRE-APPROVAL OF AUDIT AND PERMITTED NON-AUDIT SERVICES PROVIDED TO
THE TRUST
The Audit Committee pre-approves all audit services and permissible
non-audit services (e.g., tax services) to be provided to the Trust by
the Trust's independent accountant (the "Accountant"), including the
fees therefor. The Audit Committee may delegate to one or more of its
members the authority to grant pre-approvals. In connection with such
delegation, the Audit Committee is required to establish pre-approval
policies and procedures, including the requirement that the decisions
of any member to whom authority is delegated be presented to the full
Committee at each of its scheduled meetings.
Pre-approval for a permitted non-audit service is not required if: (1)
the aggregate amount of all such non-audit services is not more than
5% of the total revenues paid by the Trust to the Accountant in the
fiscal year in which the non-audit services are provided; (2) such
services were not recognized by the Trust at the time of the
engagement to be non-audit services; and (3) such services are
promptly brought to the attention of the Audit Committee and approved
prior to the completion of the audit by the Committee or by one or
more members of the Committee to whom authority to grant such
approvals has been delegated by the Committee.
Additionally, the Audit Committee is required to pre-approve the
Accountant's engagements for non-audit services with the Trust's
investment advisers and any of their affiliates that provide ongoing
services to the Trust in accordance with the foregoing paragraph, if
the engagement relates directly to the operations and financial
reporting of the Trust, unless the aggregate amount of all services
provided constitutes no more than 5% of the total amount of revenues
paid to the Accountant by the Trust, the investment adviser and any
affiliate of the investment adviser that provides ongoing services to
the Trust during the fiscal year in which the services are provided
that would have to be pre-approved by the Committee pursuant to this
paragraph (without regard to this exception).
(e)(2) Percentage of fees billed applicable to non-audit services pursuant to
waiver of pre-approval requirement were as follows:
---------------------------- ----------------- ----------------
2008 2007
---------------------------- ----------------- ----------------
Audit-Related Fees N/A N/A
---------------------------- ----------------- ----------------
Tax Fees N/A N/A
---------------------------- ----------------- ----------------
All Other Fees N/A N/A
---------------------------- ----------------- ----------------
(f) Not Applicable
(g) The aggregate non-audit fees and services billed by KPMG LLP for the
last two fiscal years were $66,400 and $66,075 for 2008 and 2007,
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 the report to shareholders filed under Item 1 of this
report.
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 to open-end management investment companies.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT COMPANY AND
AFFILIATED PURCHASERS.
Not applicable to open-end management investment companies.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
CNI Charter Funds (the "Fund") has adopted the following procedures by which
shareholders may recommend nominees to the Fund's Board of Trustees. The Fund
has a Nominating Committee comprised solely of persons who are not considered
"interested persons" of the Fund within the meaning of the Investment Company
Act of 1940. The Committee periodically reviews such issues as the Board's
composition, responsibilities, committees, compensation and other relevant
issues, and recommends any appropriate changes to the full Board of Trustees.
While the Committee normally is able to identify from its own
resources an ample number of qualified candidates, it will consider shareholder
suggestions of persons to be considered as nominees to fill future vacancies on
the Board, so long as the shareholder or shareholder group submitting a proposed
nominee: (a) beneficially owns more than 5% of the Fund's voting shares and has
held such shares continuously for two years, and (b) is not an adverse holder.
No eligible shareholder or shareholder group may submit more than one
independent Board member nominee each year. Such suggestions must be sent in
writing to the Fund 's Secretary, and must be accompanied by the shareholder's
contact information, the nominee's contact information and number of Fund shares
owned by the nominee, all information regarding the nominee that would be
required to be disclosed in solicitations of proxies for elections of directors
required under the Securities Exchange Act of 1934, and a notarized letter from
the nominee stating his or her intention to serve as a nominee and be named in
the Fund's proxy statement, if so designated by the Committee and the Board of
Trustees.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The certifying officers, whose certifications are included herewith, have
evaluated the registrant's disclosure controls and procedures within 90 days of
the filing date of this report. In their opinion, based on their evaluation, the
registrant's disclosure controls and procedures are adequately designed, and are
operating effectively to ensure, that information required to be disclosed by
the registrant in the reports it files or submits under the Securities Exchange
Act of 1934 is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission's rules and forms.
(b) There were no significant changes in the registrant's internal control over
financial reporting that occurred during the registrant's last fiscal half-year
that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEMS 12. EXHIBITS.
(a)(1) Code of Ethics attached hereto.
(a)(2) Separate certifications for the principal executive officer and the
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), are filed
herewith.
(b) Officer certifications as required by Rule 30a-2(b) under the Investment
Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany this filing
as an Exhibit.
- --------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) CNI Charter Funds
By (Signature and Title)* /S/ Richard A. Weiss
-------------------------
Richard A. Weiss,
President & CEO
Date November 24, 2008
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/ Richard A. Weiss
-------------------------
Richard A. Weiss,
President & CEO
Date November 24, 2008
By (Signature and Title)* /s/ Eric Kleinschmidt
-------------------------
Eric Kleinschmidt,
Controller and COO
Date November 24, 2008
* Print the name and title of each signing officer under his or her signature.