UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-07897
----------------------------------------------
THE MUNDER FRAMLINGTON FUNDS TRUST
------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
480 PIERCE STREET
BIRMINGHAM, MICHIGAN 48009
------------------------------------------------------------------------------
(Address of principal executive offices)(Zip code)
(Name and Address of Agent for Service) Copy to:
STEPHEN SHENKENBERG JANE KANTER
480 PIERCE STREET DECHERT LLP
BIRMINGHAM, MICHIGAN 48009 1775 I STREET, N.W.
WASHINGTON, D.C. 20006
Registrant's telephone number, including area code: (248) 647-9200
Date of fiscal year end: June 30
Date of reporting period: June 30, 2003
ITEM 1: REPORT TO SHAREHOLDER
ANNUAL REPORT
JUNE 30, 2003
MUNDER HEALTHCARE FUND
Class A, B, C, K & Y Shares
FAMILY OF FUNDS
(covered in separate annual reports)
<Table>
LARGE-CAP EQUITY INTERNATIONAL
Multi-Season Growth International Growth
Index 500 International Equity
Large-Cap Value International Bond
Emerging Markets
MID- TO MICRO-CAP
EQUITY TAXABLE INCOME
MidCap Select Bond
Small Company Growth Intermediate Bond
Small-Cap Value U.S. Government Income
Micro-Cap Equity
TAX-FREE INCOME
NICHE/SECTOR EQUITY Michigan Tax-Free Bond
NetNet(R) Tax-Free Bond
Future Technology Tax-Free Short & Intermediate Bond
Healthcare
Power Plus(R) MONEY MARKET
Real Estate Equity Cash Investment
Investment Tax-Free Money Market
HYBRID
Balanced
---------------------------
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EDELIVERY
---------------------------
</Table>
(MUNDER FUNDS LOGO)
THE MUNDER FUNDS LETTER TO SHAREHOLDERS
DEAR FELLOW MUNDER FUND SHAREHOLDERS:
The past year has been a difficult one for all of us who have assets invested
in the stock market. The S&P 500(R) Index barely eked out a positive 0.25%
return for the 12 months ending June 30. In terms of calendar quarters, the S&P
500(R) moved from a gut-wrenching low of -17.28% for the three months ended
September 30, 2002 to a high of 15.40% for the quarter ended June 30, 2003. In
contrast, the bond market provided a positive return in each calendar quarter,
with the Lehman Brothers Aggregate Bond Index posting a 10.40% return for the
year ending June 30.
At Munder Capital Management, the investment advisor for The Munder Funds, we
strive to provide the shareholders of each of our equity, fixed income and money
market funds with a disciplined approach to investing, based on sound investment
principles rather than the day-to-day fluctuations of the financial markets.
Framlington Overseas Investment Management Limited, the U.K.-based sub-advisor
to the Fund and an affiliate of Munder Capital, adheres to a similar investment
philosophy. Also like Munder Capital, Framlington employs a team approach to the
management of portfolios, with Framlington's portfolio managers assisted by a
worldwide network of research analysts.
On the following pages, you will find information and commentary on the
relative and absolute performance of the Fund. If you have any questions about
your current investments or any of The Munder Funds, please call your financial
advisor. You may also contact the Funds at 1-800-4MUNDER or through our Web site
at www.munder.com. Thank you for your confidence in The Munder Funds. We value
the opportunity to work with you toward meeting your investment objectives.
Very Truly Yours,
-s- James C. Robinson
James C. Robinson, President
President, The Munder Funds
Chairman and CEO, Munder Capital Management
TABLE OF
CONTENTS
- --------------------------------------------------------------------------------
<Table>
II Management's Discussion of Fund Performance
IV Hypothetical and Total Returns
1 Portfolio of Investments
8 Statement of Assets and Liabilities
10 Statement of Operations
11 Statements of Changes in Net Assets
12 Statements of Changes in Net Assets -- Capital Stock
Activity
14 Financial Highlights
19 Notes to Financial Statements
36 Report of Ernst & Young LLP, Independent Auditors
</Table>
- --------------------------------------------------------------------------------
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY ANY BANK AND
ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
FEDERAL RESERVE BOARD,
OR ANY OTHER AGENCY. ALL MUTUAL FUND SHARES INVOLVE CERTAIN RISKS, INCLUDING
POSSIBLE LOSS OF PRINCIPAL.
i
MANAGEMENT'S DISCUSSION OF
FUND PERFORMANCE
- --------------------------------------------------------------------------------
THE PERFORMANCE DATA CONTAINED IN THE FOLLOWING COMMENTARY IS BASED ON CLASS Y
SHARES OF THE FUND AND THE PERFORMANCE FOR OTHER CLASSES OF SHARES WILL DIFFER.
THE RETURNS FOR THE FUND DO NOT REFLECT THE DEDUCTION OF TAXES THAT A
SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR UPON REDEMPTION OF FUND SHARES.
PLEASE NOTE THAT ANY INDEX AGAINST WHICH THE FUND IS COMPARED IS NOT AN ACTUAL
FUND AND NO EXPENSES ARE NETTED AGAINST ITS RETURNS. YOU CANNOT INVEST DIRECTLY
IN AN INDEX. THE RETURNS FOR THE FUND ARE REPORTED AFTER THE DEDUCTION OF ALL
EXPENSES. FUND HOLDINGS ARE SUBJECT TO CHANGE. A COMPLETE LIST OF FUND HOLDINGS
AS OF JUNE 30, 2003 IS CONTAINED IN THE PORTFOLIO OF INVESTMENTS INCLUDED IN
THIS REPORT.
FUND MANAGERS: The Munder Healthcare Fund Team
The Fund generated a 9.93% return for the year ended June 30, 2003, compared
to the 7.34% return for the Russell 2000 Healthcare Index and the 9.86% median
return for the Lipper universe of health/biotechnology mutual funds. The Fund
has earned above-median returns for the one-month, three-month, six-month,
nine-month, one-year and five-year time periods ended June 30.
Although the Fund's holdings span a range of market capitalizations, the Fund
has a smaller-cap bias. It is therefore greatly influenced by developments in
the small- to mid-cap segment of the healthcare sector, as reflected in the
performance of the Russell 2000 Healthcare Index. During the first half of the
12-month period ended June 30, the Fund struggled, as did the stocks in the
Russell 2000 Healthcare Index. During those six months, the Fund posted a
- -11.27% return, compared to the -16.45% return for the Russell 2000 Healthcare
Index. One factor helping to boost the performance of the Fund during that
period was the sale of the Fund's position in Tenet Healthcare before the
company was investigated for boosting its profits on high cost patients by
aggressive interpretation of reimbursement rules.
The second half of the year ended June 30 was much more positive for
small-cap healthcare stocks and for the Fund. The Fund generated a return of
23.90% for the period, more than offsetting the negative return posted during
the first half of the year. The Russell 2000 Healthcare Index had a 28.49%
return for this same six-month period. During this period, the Fund's relative
performance was held back by the lower returns from its holdings in the services
sector of the Fund. The Fund's exposure to generic drug manufacturers and
specialty drugs had a more positive impact on returns. The performance of the
Fund picked up, especially in April and May, as the biotechnology sector posted
strong positive returns. Given the strong advances in the biotechnology sector,
some of the larger positions were reduced. At the same time, we increased our
holdings in some smaller-cap medical device stocks, including Given Imaging
Ltd., Cyberonics, Inc. and RITA Medical Systems, Inc. Given Imaging Ltd. has
developed a proprietary wireless imagining system for viewing the
gastrointestinal tract. Cyberonics, Inc. provides an implantable medical device
for the treatment of epilepsy and other neurological diseases. RITA Medical
Systems, Inc. offers minimally invasive products to treat cancerous or benign
tumors.
ii
[This Page Intentionally Left Blank]
iii
HYPOTHETICAL AND TOTAL RETURNS
- --------------------------------------------------------------------------------
The following graph represents the performance of the Munder Healthcare Fund
(the "Fund") since the inception of its oldest class of shares, Class Y shares.
The chart following the line graph sets forth performance information and the
growth of a hypothetical $10,000 investment for each class of shares offered by
the Fund. Differing sales charges and expenses of classes not shown in the line
graph will have an effect on performance. In addition, the information contained
in the chart and table does not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or upon the redemption of Fund
shares. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Investment return
and principal value of any investment will fluctuate so that an investor's
shares, upon redemption, may be worth more or less than original cost. Average
annual total returns are historical in nature and measure net investment income
and capital gain or loss from portfolio investments assuming reinvestment of
dividends.
MUNDER HEALTHCARE FUND
CLASS Y SHARE HYPOTHETICAL
----------------------------------------------------------------
A HYPOTHETICAL ILLUSTRATION OF A $10,000 INITIAL INVESTMENT
(GRAPHIC IMAGE)
<Table>
<Caption>
LIPPER
RUSSELL 2000 HEALTH/BIOTECHNOLOGY
CLASS Y MSCI WORLD INDEX# HEALTHCARE INDEX# FUNDS AVERAGE**
------- ----------------- ----------------- --------------------
12/31/96 10000 10000 10000 10000
11020 10122 10535 10533
10590 10240 10200 10526
9610 10040 9163 9789
9030 10370 8738 9803
10290 11012 10098 10805
6/30/97 10890 11563 10392 11428
11120 12097 10481 11776
11120 11290 10657 11463
12340 11905 11884 12494
11699 11280 11246 12115
11649 11482 10988 12151
11639 11623 11029 12159
11848 11949 10817 12461
12598 12759 11704 13139
12948 13300 11983 13569
12938 13432 11743 13684
12138 13265 10799 13208
6/30/98 11839 13582 10786 13488
11100 13562 9948 13271
8381 11755 7594 11133
9810 11966 8963 12587
10240 13050 9624 13124
10810 13827 10109 13794
11788 14505 11388 14917
12131 14824 11462 15085
10839 14431 10252 14444
10324 15035 10130 14560
10112 15630 10153 13976
10374 15061 10541 13966
6/30/99 10606 15766 11295 14587
10839 15720 11338 14708
11314 15695 10982 15104
11394 15544 10765 14237
11101 16354 10293 14800
12645 16817 11440 15676
16399 18181 13453 17174
19932 17141 15488 18842
27500 17189 22610 22810
24200 18378 15533 20748
23140 17603 14957 20522
22717 17159 14619 20762
6/30/00 28822 17739 18410 24684
28973 17242 17874 23993
33252 17806 20562 26622
34918 16861 21109 27762
33590 16581 20328 27215
28732 15576 18092 25881
30671 15830 19690 27204
28930 16137 18993 25076
25657 14775 18007 24216
21120 13807 15855 21306
23451 14832 17751 23080
25233 14648 17751 24059
6/30/01 26476 14191 19028 24232
24124 14004 17172 23551
23193 13334 16710 23179
19837 12161 14710 21925
21908 12395 15228 22929
23203 13131 15785 24229
24165 13215 16548 24062
21732 12816 15150 22592
20335 12707 14018 21935
21142 13271 15080 22441
19163 12825 14593 20998
18199 12854 13794 20228
6/30/02 16905 12077 12318 18486
15400 11060 10726 17859
15400 11083 10526 17615
14385 9866 10103 16896
14841 10596 10311 17617
15732 11169 11017 18017
14997 10630 10291 17271
14925 10309 9922 17232
13952 10133 9536 16822
14532 10105 10092 17486
15579 11008 11157 18455
17744 11642 12930 20090
6/30/03 18583 11848 13222 20648
</Table>
iv
- --------------------------------------------------------------------------------
<Table>
<Caption>
GROWTH OF A $10,000 INVESTMENT SINCE INCEPTION
------------------------------------------------------------------------
MSCI RUSSELL 2000 LIPPER HEALTH/
CLASS AND WITH WITHOUT WORLD HEALTHCARE BIOTECHNOLOGY
INCEPTION DATE LOAD LOAD INDEX# INDEX# FUNDS AVERAGE**
- ----------------------------------------------------------------------------------------------
CLASS A
(2/14/97) $15,307* $16,201 $11,705 $12,551 $19,604
CLASS B
(1/31/97) N/A $15,847 $11,705 $12,551 $19,604
CLASS C
(1/13/97) N/A $16,772 $11,848 $13,222 $20,648
CLASS K
(4/1/97) N/A $19,341 $11,801 $14,431 $21,094
CLASS Y
(12/31/96) N/A $18,583 $11,848 $13,222 $20,648
</Table>
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS
-----------------------------------------------------------------------------------
ONE ONE FIVE FIVE SINCE SINCE
CLASS AND YEAR YEAR YEARS YEARS INCEPTION INCEPTION
INCEPTION DATE W/LOAD W/OUT LOAD W/LOAD W/OUT LOAD W/LOAD W/OUT LOAD
- ---------------------------------------------------------------------------------------------------------
CLASS A
(2/14/97) 3.58%* 9.62% 7.91%* 9.14% 6.91%* 7.86%
CLASS B
(1/31/97) 3.86%+ 8.86% 8.05%+ 8.34% N/A 7.44%
CLASS C
(1/13/97) 7.80%+ 8.80% N/A 8.31% N/A 8.33%
CLASS K
(4/1/97) N/A 9.63% N/A 9.13% N/A 11.13%
CLASS Y
(12/31/96) N/A 9.93% N/A 9.43% N/A 10.00%
</Table>
- ------------
* Reflects the deduction of the maximum sales charge of 5.50% for Class A
shares.
+ Based on the declining contingent deferred sales charge (CDSC) schedule
described in the prospectus.
# The Morgan Stanley Capital International (MSCI) World Index is an unmanaged
index that measures the common stock price movement in developed countries.
The Russell 2000 Healthcare Index is an unmanaged index that measures the
performance of those Russell 2000 companies (the bottom 2,000 based on
capitalization of the 3,000 largest capitalized U.S. publicly traded
companies) within the healthcare sector. Index since inception comparative
returns for Class A, Class B, Class C, Class K, and Class Y shares of the
Fund are as of 2/1/97, 2/1/97, 1/1/97, 4/1/97, and 1/1/97, respectively.
** The Lipper Health/Biotechnology Funds Average represents the average
performance of a universe of mutual funds that have been in existence since
the Fund's inception and are categorized by Lipper Analytical Services, Inc.
under the same investment objective as the Fund. Lipper since inception
comparative returns for Class A, Class B, Class C, Class K, and Class Y
shares of the Fund are as of 2/1/97, 2/1/97, 1/1/97, 4/1/97 and 1/1/97,
respectively.
v
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vi
MUNDER HEALTHCARE FUND
Portfolio of Investments, June 30, 2003
- --------------------------------------------------------------------------------
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------
COMMON STOCKS -- 99.0%
BIOTECHNOLOGY -- 35.2%
19,000 Abgenix, Inc.+ $ 199,310
400,000 Acambis Plc+ 2,439,682
44,000 Actelion Ltd.+ 2,936,372
10,000 Adolor Corporation+ 122,700
88,000 Alexion Pharmaceuticals, Inc.+ 1,500,400
56,500 Amgen, Inc.+ 3,753,860
120,000 Amylin Pharmaceuticals, Inc.+ 2,626,800
40,000 Aphton Corporation+ 329,600
123,400 Cambridge Antibody Technology Group Plc+ 1,070,832
84,000 Celgene Corporation+ 2,553,600
17,500 Cell Genesys, Inc.+ 151,200
100,000 Cell Therapeutics, Inc.+ 973,000
200,000 Cellegy Pharmaceuticals, Inc.+ 1,006,000
421,800 Celltech Group Plc+ 2,391,374
63,200 Cephalon, Inc.+ 2,601,312
106,000 CV Therapeutics, Inc.+ 3,143,960
300,000 Dendreon Corporation+ 1,782,000
137,855 DOV Pharmaceutical, Inc.+ 1,585,333
300,000 Dyax Corporation+ 1,224,000
371,075 Exelixis, Inc.+ 2,575,260
18,512 Genentech, Inc.+ 1,335,085
59,500 Gilead Sciences, Inc.+ 3,307,010
55,000 ICOS Corporation+ 2,021,250
7,300 ILEX Oncology, Inc.+ 141,693
165,000 Inspire Pharmaceuticals, Inc.+ 1,782,000
106,425 InterMune, Inc.+ 1,714,507
500,000 Introgen Therapeutics, Inc.+ 2,725,000
271,000 Isis Pharmaceuticals, Inc.+ 1,436,300
15,000 Kosan Biosciences, Inc.+ 88,500
468,250 La Jolla Pharmaceutical Company+ 1,531,178
290,525 Lexicon Genetics, Inc.+ 1,949,423
30,281 Martek Biosciences Corporation+ 1,300,266
109,500 Medicines Company+ 2,156,055
7,500 Myriad Genetics, Inc.+ 102,075
145,935 Neurochem, Inc.+ 1,506,981
60,200 Neurocrine Biosciences, Inc.+ 3,006,388
125,730 NPS Pharmaceuticals, Inc.+ 3,060,268
76,000 OSI Pharmaceuticals, Inc.+ 2,447,960
414,475 POZEN, Inc.+ 4,550,935
</Table>
See Notes to Financial Statements.
1
MUNDER HEALTHCARE FUND
Portfolio of Investments, June 30, 2003 (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
BIOTECHNOLOGY (CONTINUED)
17,000 Protein Design Labs, Inc.+ $ 237,660
150,000 Telik, Inc.+ 2,410,500
43,375 Trimeris, Inc.+ 1,981,370
190,000 Vicuron Pharmaceuticals, Inc.+ 2,694,200
374,850 XOMA Ltd.+ 1,997,950
------------
80,451,149
------------
BIOTECHNOLOGY - TOOLS -- 3.1%
35,817 Bio-Rad Laboratories, Inc.+ 1,982,471
455,200 Discovery Partners International+ 2,021,088
71,000 Fisher Scientific International, Inc.+ 2,477,900
125,000 Orchid Biosciences, Inc.+ 150,000
270,000 Transgenomic, Inc.+ 513,000
------------
7,144,459
------------
DRUGS & DRUG DELIVERY -- 18.1%
30,000 Allergan, Inc. 2,313,000
50,000 American Pharmaceutical Partners, Inc.+ 1,695,000
19,059 Atrix Laboratories, Inc.+ 419,107
50,000 Biovail Corporation+ 2,353,000
80,000 CIMA Labs, Inc.+ 2,151,200
30,000 Connetics Corporation+ 449,100
62,500 Forest Laboratories, Inc.+ 3,421,875
250,000 Galen Holdings Plc 2,150,837
165,000 GlaxoSmithKline Plc+ 3,335,471
110,000 K-V Pharmaceutical Company, Class A+ 3,058,000
35,000 Medicis Pharmaceutical Corporation, Class A+ 1,984,500
70,000 Mylan Laboratories, Inc. 2,433,900
200,000 Nektar Therapeutics+ 1,846,000
130,000 Pfizer, Inc. 4,439,500
50,000 Pharmaceutical Resources, Inc.+ 2,433,000
186,650 SangStat Medical Corporation+ 2,443,249
76,000 Teva Pharmaceutical Industries Ltd., ADR 4,326,680
------------
41,253,419
------------
MEDICAL DEVICES -- 22.3%
52,000 Advanced Neuromodulation Systems, Inc.+ 2,692,040
443,475 AeroGen, Inc.+ 243,911
140,000 American Medical Systems Holdings, Inc.+ 2,361,800
410,250 Axis-Shield Plc+ 1,253,472
</Table>
See Notes to Financial Statements.
2
- --------------------------------------------------------------------------------
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------
MEDICAL DEVICES (CONTINUED)
65,000 Biomet, Inc. $ 1,862,900
40,000 Biosite Diagnostics, Inc.+ 1,924,000
45,000 Boston Scientific Corporation+ 2,749,500
50,000 Cochlear Ltd.+ 1,084,392
57,500 Cyberonics, Inc.+ 1,236,825
177,500 Cytyc Corporation+ 1,867,300
215,700 Endocardial Solutions, Inc.+ 1,320,084
186,000 Endocare, Inc.+ 762,600
150,000 EPIX Medical, Inc.+ 2,122,500
107,083 Given Imaging Ltd.+ 904,851
560,000 Gyrus Group Plc+ 1,804,968
100,000 Integra LifeSciences Holdings+ 2,638,000
165,000 Kyphon, Inc.+ 2,494,800
289,350 MedSource Technologies, Inc.+ 1,229,737
55,000 Medtronic, Inc. 2,638,350
35,470 Nobel Biocare Holding AG+ 2,373,677
56,585 Regeneration Technologies, Inc.+ 752,015
60,000 ResMed, Inc.+ 2,352,000
400,000 RITA Medical Systems, Inc.+ 1,400,000
59,700 SurModics, Inc.+ 1,820,850
178,925 TheraSense, Inc.+ 1,789,250
70,000 Wilson Greatbatch Technologies, Inc.+ 2,527,000
132,650 Wright Medical Group, Inc.+ 2,520,350
50,000 Zimmer Holdings, Inc.+ 2,252,500
------------
50,979,672
------------
MEDICAL SERVICES -- 20.3%
91,162 Accredo Health, Inc.+ 1,987,332
60,000 AdvancePCS+ 2,293,800
40,000 AmerisourceBergen Corporation 2,774,000
37,000 Anthem, Inc.+ 2,854,550
150,000 Caremark Rx, Inc.+ 3,852,000
50,454 Centene Corporation+ 1,962,661
87,744 Community Health Systems, Inc.+ 1,692,582
80,000 CTI Molecular Imaging, Inc.+ 1,512,800
72,000 HCA, Inc. 2,306,880
260,425 HealthStream, Inc.+ 671,896
55,000 Henry Schein, Inc.+ 2,878,700
74,475 ICON Plc, ADR+ 2,369,794
83,145 Laboratory Corporation of America Holdings+ 2,506,822
</Table>
See Notes to Financial Statements.
3
MUNDER HEALTHCARE FUND
Portfolio of Investments, June 30, 2003 (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
MEDICAL SERVICES (CONTINUED)
100,000 Omnicare, Inc. $ 3,379,000
60,000 Pediatrix Medical Group, Inc.+ 2,139,000
85,000 Pharmaceutical Product Development, Inc.+ 2,442,050
100,000 Select Medical Corporation+ 2,483,000
25,503 The Advisory Board Company+ 1,033,381
120,000 United Surgical Partners International, Inc.+ 2,710,800
50,000 UnitedHealth Group, Inc. 2,512,500
379 WebMD Corporation+ 4,105
------------
46,367,653
------------
TOTAL COMMON STOCKS
(Cost $259,243,271) 226,196,352
------------
WARRANTS -- 0.0%#
(Cost $0)
BIOTECHNOLOGY -- 0.0%#
2,400 AVANT Immunotherapeutics, Inc., expires 8/21/03,
(exercise price: $6.00)+ 288
------------
<Caption>
PRINCIPAL
AMOUNT
- ----------
REPURCHASE AGREEMENT -- 1.0%
(Cost $2,151,000)
$2,151,000 Agreement with State Street Bank and Trust
Company,
0.980% dated 06/30/2003, to be repurchased at
$2,151,059 on 07/01/2003, collateralized by
$1,960,000 FNMA, 5.250% maturing 4/15/2007
(value $2,195,200) 2,151,000
------------
</Table>
See Notes to Financial Statements.
4
- --------------------------------------------------------------------------------
<Table>
<Caption>
VALUE
- -----------------------------------------------------------------------------------
TOTAL INVESTMENTS
(Cost $261,394,271) 100.0% $228,347,640
OTHER ASSETS AND LIABILITIES (NET) 0.0# 55,001
----- ------------
NET ASSETS 100.0% $228,402,641
===== ============
</Table>
- ------------
+ Non-income producing security.
# Amount represents less than 0.1% of net assets.
ABBREVIATIONS:
ADR -- American Depositary Receipt
FNMA -- Federal National Mortgage Association
See Notes to Financial Statements.
5
MUNDER HEALTHCARE FUND
Portfolio of Investments, June 30, 2003 (continued)
- --------------------------------------------------------------------------------
At June 30, 2003 the country diversification of the Munder Healthcare Fund was
as follows:
<Table>
<Caption>
% OF
NET ASSETS VALUE
----------------------------
COMMON STOCK:
United States....................................... 84.0% $191,896,019
United Kingdom...................................... 6.3 14,446,635
Switzerland......................................... 2.3 5,310,048
Israel.............................................. 2.3 5,231,531
Canada.............................................. 1.7 3,859,981
Ireland............................................. 1.0 2,369,795
Bermuda............................................. 0.9 1,997,951
Australia........................................... 0.5 1,084,392
----- ------------
TOTAL COMMON STOCKS................................. 99.0 226,196,352
WARRANTS
United States....................................... 0.0# 288
REPURCHASE AGREEMENT................................ 1.0 2,151,000
----- ------------
TOTAL INVESTMENTS................................... 100.0 228,347,640
OTHER ASSETS AND LIABILITIES (NET).................. 0.0# 55,001
----- ------------
NET ASSETS.......................................... 100.0% $228,402,641
===== ============
</Table>
- ------------
# Amount represents less than 0.1% of net assets.
See Notes to Financial Statements.
6
[This Page Intentionally Left Blank]
7
MUNDER HEALTHCARE FUND
Statement of Assets and Liabilities, June 30, 2003
- --------------------------------------------------------------------------------
<Table>
ASSETS:
Investments, at value
See accompanying schedule:
Securities.............................................. $226,196,640
Repurchase agreement.................................... 2,151,000
------------
Total Investments........................................... 228,347,640
Cash........................................................ 313
Foreign currency, at value.................................. 312,566
Interest receivable......................................... 59
Dividends receivable........................................ 28,823
Receivable for securities sold.............................. 1,320,656
Receivable for Fund shares sold............................. 172,652
Prepaid expenses and other assets........................... 41,736
------------
Total Assets.......................................... 230,224,445
------------
LIABILITIES:
Payable for Fund shares redeemed............................ 682,401
Payable for securities purchased............................ 319,636
Transfer agency/record keeping fees payable................. 191,770
Investment advisory fees payable............................ 190,654
Distribution fees payable................................... 143,872
Trustees' fees and expenses payable......................... 29,768
Administration fees payable................................. 24,994
Custody fees payable........................................ 14,848
Shareholder servicing fees payable.......................... 38
Accrued expenses and other payables......................... 223,823
------------
Total Liabilities..................................... 1,821,804
------------
NET ASSETS.................................................. $228,402,641
============
Investments, at cost........................................ $261,394,271
============
Foreign currency, at cost................................... $ 312,566
============
</Table>
See Notes to Financial Statements.
8
- --------------------------------------------------------------------------------
<Table>
NET ASSETS CONSIST OF:
Accumulated net investment loss............................. $ (70,284)
Accumulated net realized loss on investments sold........... (180,539,486)
Net unrealized depreciation of investments.................. (33,045,208)
Par value................................................... 13,353
Paid-in capital in excess of par value...................... 442,044,266
-------------
NET ASSETS.................................................. $ 228,402,641
=============
NET ASSETS:
Class A Shares.............................................. $ 67,455,731
=============
Class B Shares.............................................. $ 104,007,445
=============
Class C Shares.............................................. $ 49,725,200
=============
Class K Shares.............................................. $ 183,632
=============
Class Y Shares.............................................. $ 7,030,633
=============
SHARES OUTSTANDING:
Class A Shares.............................................. 3,816,941
=============
Class B Shares.............................................. 6,177,844
=============
Class C Shares.............................................. 2,956,155
=============
Class K Shares.............................................. 10,410
=============
Class Y Shares.............................................. 391,901
=============
CLASS A SHARES:
Net asset value and redemption price per share.............. $17.67
=============
Maximum sales charge........................................ 5.50%
Maximum offering price per share............................ $18.70
=============
CLASS B SHARES:
Net asset value and offering price per share*............... $16.84
=============
CLASS C SHARES:
Net asset value and offering price per share*............... $16.82
=============
CLASS K SHARES:
Net asset value, offering price and redemption price per
share..................................................... $17.64
=============
CLASS Y SHARES:
Net asset value, offering price and redemption price per
share..................................................... $17.94
=============
</Table>
- ------------
* Redemption price per share is equal to net asset value per share less any
applicable contingent deferred sales charge ("CDSC").
See Notes to Financial Statements.
9
MUNDER HEALTHCARE FUND
Statement of Operations, Year Ended June 30, 2003
- --------------------------------------------------------------------------------
<Table>
INVESTMENT INCOME:
Interest.................................................... $ 26,113
Dividends(a)................................................ 229,429
-------------
Total Investment Income............................... 255,542
-------------
EXPENSES:
Distribution and shareholder servicing fees:
Class A Shares............................................ 152,084
Class B Shares............................................ 924,050
Class C Shares............................................ 461,001
Shareholder servicing fees:
Class K Shares............................................ 544
Investment advisory fees.................................... 2,051,062
Transfer agency/record keeping fees......................... 1,011,172
Printing, mailing and solicitation fees..................... 320,514
Administration fees......................................... 278,594
Custody fees................................................ 109,123
Legal and audit fees........................................ 62,503
Registration and filing fees................................ 49,109
Trustees' fees and expenses................................. 23,825
Other....................................................... 22,340
-------------
Total Expenses........................................ 5,465,921
Fees waived by transfer agent............................... (44,024)
-------------
Net Expenses................................................ 5,421,897
-------------
NET INVESTMENT LOSS......................................... (5,166,355)
-------------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON
INVESTMENTS:
Net realized loss from:
Security transactions..................................... (123,259,445)
Foreign currency-related transactions..................... (64,856)
Net change in unrealized appreciation/(depreciation) of:
Securities................................................ 139,883,135
Foreign currency-related transactions..................... 885
-------------
Net realized and unrealized gain on investments............. 16,559,719
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $ 11,393,364
=============
</Table>
- ------------
(a) Net of foreign withholding taxes of $16,164.
See Notes to Financial Statements.
10
MUNDER HEALTHCARE FUND
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED YEAR ENDED
JUNE 30, 2003 JUNE 30, 2002
------------------------------
Net investment loss............................... $ (5,166,355) $ (7,964,001)
Net realized loss on investments sold............. (123,324,301) (54,863,012)
Net change in unrealized
appreciation/(depreciation) of investments...... 139,884,020 (117,755,722)
------------- -------------
Net increase/(decrease) in net assets resulting
from operations................................. 11,393,364 (180,582,735)
Net increase/(decrease) in net assets from Fund
share transactions:
Class A Shares.................................. (17,036,338) (29,774,431)
Class B Shares.................................. (20,554,405) (26,523,054)
Class C Shares.................................. (14,259,951) (18,271,698)
Class K Shares.................................. (233,512) (232,208)
Class Y Shares.................................. 353,229 (186,732)
------------- -------------
Net decrease in net assets........................ (40,337,613) (255,570,858)
NET ASSETS:
Beginning of year................................. 268,740,254 524,311,112
------------- -------------
End of year....................................... $ 228,402,641 $ 268,740,254
============= =============
Accumulated net investment loss................... $ (70,284) $ (25,592)
============= =============
</Table>
See Notes to Financial Statements.
11
MUNDER HEALTHCARE FUND
Statements of Changes in Net Assets -- Capital Stock Activity
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED YEAR ENDED
JUNE 30, 2003 JUNE 30, 2002
------------------------------
AMOUNT
CLASS A SHARES:
Sold................................................. $ 20,760,264 $ 48,511,146
Proceeds received in merger.......................... 2,371,060 --
Redeemed............................................. (40,167,662) (78,285,577)
------------ ------------
Net decrease......................................... $(17,036,338) $(29,774,431)
============ ============
CLASS B SHARES:
Sold................................................. $ 5,318,800 $ 23,398,083
Proceeds received in merger.......................... 3,683,550 --
Redeemed............................................. (29,556,755) (49,921,137)
------------ ------------
Net decrease......................................... $(20,554,405) $(26,523,054)
============ ============
CLASS C SHARES:
Sold................................................. $ 2,582,300 $ 14,172,774
Proceeds received in merger.......................... 1,416,290 --
Redeemed............................................. (18,258,541) (32,444,472)
------------ ------------
Net decrease......................................... $(14,259,951) $(18,271,698)
============ ============
CLASS K SHARES:
Sold................................................. $ 20 $ 123,185
Proceeds received in merger.......................... 204 --
Redeemed............................................. (233,736) (355,393)
------------ ------------
Net decrease......................................... $ (233,512) $ (232,208)
============ ============
CLASS Y SHARES:
Sold................................................. $ 619,853 $ 550,018
Proceeds received in merger.......................... 96,960 --
Redeemed............................................. (363,584) (736,750)
------------ ------------
Net increase/(decrease).............................. $ 353,229 $ (186,732)
============ ============
</Table>
See Notes to Financial Statements.
12
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED YEAR ENDED
JUNE 30, 2003 JUNE 30, 2002
------------------------------
SHARES
CLASS A SHARES:
Shares authorized ($0.001 par value)................. Unlimited Unlimited
=========== ===========
Sold................................................. 1,404,022 2,343,490
Issued in exchange for proceeds received in merger... 155,085 --
Redeemed............................................. (2,776,561) (3,926,402)
----------- -----------
Net decrease......................................... (1,217,454) (1,582,912)
=========== ===========
CLASS B SHARES:
Shares authorized ($0.001 par value)................. Unlimited Unlimited
=========== ===========
Sold................................................. 374,090 1,164,615
Issued in exchange for proceeds received in merger... 252,649 --
Redeemed............................................. (2,158,389) (2,607,371)
----------- -----------
Net decrease......................................... (1,531,650) (1,442,756)
=========== ===========
CLASS C SHARES:
Shares authorized ($0.001 par value)................. Unlimited Unlimited
=========== ===========
Sold................................................. 183,736 703,177
Issued in exchange for proceeds received in merger... 97,194 --
Redeemed............................................. (1,331,937) (1,687,013)
----------- -----------
Net decrease......................................... (1,051,007) (983,836)
=========== ===========
CLASS K SHARES:
Shares authorized ($0.001 par value)................. Unlimited Unlimited
=========== ===========
Sold................................................. 2 5,860
Issued in exchange for proceeds received in merger... 13 --
Redeemed............................................. (16,741) (17,854)
----------- -----------
Net decrease......................................... (16,726) (11,994)
=========== ===========
CLASS Y SHARES:
Shares authorized ($0.001 par value)................. Unlimited Unlimited
=========== ===========
Sold................................................. 41,044 26,883
Issued in exchange for proceeds received in merger... 6,247 --
Redeemed............................................. (22,887) (36,380)
----------- -----------
Net increase/(decrease).............................. 24,404 (9,497)
=========== ===========
</Table>
See Notes to Financial Statements.
13
MUNDER HEALTHCARE FUND(a)
Financial Highlights, For a Share Outstanding Throughout Each Period
- --------------------------------------------------------------------------------
<Table>
<Caption>
A SHARES
------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
6/30/03(C) 6/30/02(C) 6/30/01(C) 6/30/00(C) 6/30/99(C)
------------------------------------------------------------------
Net asset value, beginning of period..... $ 16.11 $ 25.31 $ 28.35 $ 10.46 $11.82
------- ------- -------- ------- ------
INCOME/(LOSS) FROM INVESTMENT OPERATIONS:
Net investment loss...................... (0.29) (0.32) (0.35) (0.22) (0.13)
Net realized and unrealized gain/(loss)
on investments.......................... 1.85 (8.88) (1.93) 18.11 (1.13)
------- ------- -------- ------- ------
Total from investment operations......... 1.56 (9.20) (2.28) 17.89 (1.26)
------- ------- -------- ------- ------
LESS DISTRIBUTIONS:
Distributions from net realized gains.... -- -- (0.55) -- (0.08)
Distributions in excess of net realized
gains................................... -- -- (0.21) -- (0.02)
------- ------- -------- ------- ------
Total distributions...................... -- -- (0.76) -- (0.10)
------- ------- -------- ------- ------
Net asset value, end of period........... $ 17.67 $ 16.11 $ 25.31 $ 28.35 $10.46
======= ======= ======== ======= ======
TOTAL RETURN(B).......................... 9.62% (36.28)% (8.38)% 171.03% (10.69)%
======= ======= ======== ======= ======
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)..... $67,456 $81,129 $167,514 $79,441 $3,382
Ratio of operating expenses to average
net assets.............................. 2.14% 1.63% 1.55% 1.61% 1.61%
Ratio of net investment loss to average
net assets.............................. (2.02)% (1.54)% (1.28)% (1.01)% (1.27)%
Portfolio turnover rate.................. 46% 38% 45% 60% 49%
Ratio of operating expenses to average
net assets without expense waivers
and/or reimbursements................... 2.17% 1.72% 1.55% 1.63% 1.92%
</Table>
- ------------
(a) The Munder Healthcare Fund Class A Shares and Class B Shares commenced
operations on February 14, 1997 and January 31, 1997, respectively.
(b) Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges.
(c) Per share numbers have been calculated using the average shares method.
See Notes to Financial Statements.
14
- --------------------------------------------------------------------------------
<Table>
<Caption>
B SHARES
- ------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
6/30/03(C) 6/30/02(C) 6/30/01(C) 6/30/00(C) 6/30/99(C)
- ------------------------------------------------------------------
$ 15.47 $ 24.48 $ 27.64 $ 10.27 $11.69
-------- -------- -------- -------- ------
(0.39) (0.45) (0.53) (0.37) (0.21)
1.76 (8.56) (1.87) 17.74 (1.11)
-------- -------- -------- -------- ------
1.37 (9.01) (2.40) 17.37 (1.32)
-------- -------- -------- -------- ------
-- -- (0.55) -- (0.08)
-- -- (0.21) -- (0.02)
-------- -------- -------- -------- ------
-- -- (0.76) -- (0.10)
-------- -------- -------- -------- ------
$ 16.84 $ 15.47 $ 24.48 $ 27.64 $10.27
======== ======== ======== ======== ======
8.86% (36.78)% (9.04)% 169.13% (11.40)%
======== ======== ======== ======== ======
$104,007 $119,253 $224,080 $102,859 $6,682
2.89% 2.38% 2.30% 2.36% 2.36%
(2.77)% (2.29)% (2.03)% (1.75)% (2.02)%
46% 38% 45% 60% 49%
2.92% 2.47% 2.30% 2.38% 2.67%
</Table>
See Notes to Financial Statements.
15
MUNDER HEALTHCARE FUND(a)
Financial Highlights, For a Share Outstanding Throughout Each Period
(continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
C SHARES
---------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
6/30/03(C) 6/30/02(C) 6/30/01(C) 6/30/00(C) 6/30/99(C)
---------------------------------------------------------------
Net asset value, beginning of period....... $ 15.45 $ 24.46 $ 27.62 $ 10.27 $11.69
---------- -------- -------- -------- ------
INCOME/(LOSS) FROM INVESTMENT OPERATIONS:
Net investment loss........................ (0.39) (0.45) (0.53) (0.40) (0.21)
Net realized and unrealized gain/(loss) on
investments............................... 1.76 (8.56) (1.87) 17.75 (1.11)
---------- -------- -------- -------- ------
Total from investment operations........... 1.37 (9.01) (2.40) 17.35 (1.32)
---------- -------- -------- -------- ------
LESS DISTRIBUTIONS:
Dividends from net realized gains.......... -- -- (0.55) -- (0.08)
Distributions in excess of net realized
gains..................................... -- -- (0.21) -- (0.02)
---------- -------- -------- -------- ------
Total distributions........................ -- -- (0.76) -- (0.10)
---------- -------- -------- -------- ------
Net asset value, end of period............. $ 16.82 $ 15.45 $ 24.46 $ 27.62 $10.27
========== ======== ======== ======== ======
TOTAL RETURN(B)............................ 8.80% (36.77)% (9.05)% 168.94% (11.40)%
========== ======== ======== ======== ======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL
DATA:
Net assets, end of period (in 000's)....... $ 49,725 $ 61,925 $122,087 $ 77,156 $1,652
Ratio of operating expenses to average net
assets.................................... 2.89% 2.38% 2.30% 2.36% 2.36%
Ratio of net investment loss to average net
assets.................................... (2.77)% (2.29)% (2.03)% (1.75)% (2.02)%
Portfolio turnover rate.................... 46% 38% 45% 60% 49%
Ratio of operating expenses to average net
assets without expense waivers and/or
reimbursements............................ 2.92% 2.47% 2.30% 2.38% 2.67%
</Table>
- ------------
(a) The Munder Healthcare Fund Class C Shares and Class K Shares commenced
operations on January 13, 1997 and April 1, 1997, respectively.
(b) Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges.
(c) Per share numbers have been calculated using the average shares method.
See Notes to Financial Statements.
16
- --------------------------------------------------------------------------------
<Table>
<Caption>
K SHARES
- ----------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
6/30/03(C) 6/30/02(C) 6/30/01(C) 6/30/00(C) 6/30/99(C)
- ----------------------------------------------------------------------
$ 16.09 $25.29 $28.31 $10.44 $11.80
---------- ------ ------ ------ ------
(0.29) (0.32) (0.34) (0.19) (0.13)
1.84 (8.88) (1.92) 18.06 (1.13)
---------- ------ ------ ------ ------
1.55 (9.20) (2.26) 17.87 (1.26)
---------- ------ ------ ------ ------
-- -- (0.55) -- (0.08)
-- -- (0.21) -- (0.02)
---------- ------ ------ ------ ------
-- -- (0.76) -- (0.10)
---------- ------ ------ ------ ------
$ 17.64 $16.09 $25.29 $28.31 $10.44
========== ====== ====== ====== ======
9.63% (36.35)% (8.32)% 170.91% (10.70)%
========== ====== ====== ====== ======
$ 184 $ 437 $ 990 $ 387 $ 60
2.14% 1.63% 1.55% 1.61% 1.61%
(2.02)% (1.54)% (1.28)% (1.01)% (1.27)%
46% 38% 45% 60% 49%
2.17% 1.72% 1.55% 1.63% 1.92%
</Table>
See Notes to Financial Statements.
17
MUNDER HEALTHCARE FUND(A)
Financial Highlights, For a Share Outstanding Throughout Each Period
(continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
Y SHARES
-------------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
6/30/03(C) 6/30/02(C) 6/30/01(C) 6/30/00(C) 6/30/99(C)
-------------------------------------------------------------------
Net asset value, beginning of period.... $16.32 $25.57 $28.56 $ 10.50 $ 11.84
------ ------ ------ ------- -------
INCOME/(LOSS) FROM INVESTMENT
OPERATIONS:
Net investment loss..................... (0.26) (0.27) (0.29) (0.13) (0.11)
Net realized and unrealized gain/(loss)
on investments......................... 1.88 (8.98) (1.94) 18.19 (1.13)
------ ------ ------ ------- -------
Total from investment operations........ 1.62 (9.25) (2.23) 18.06 (1.24)
------ ------ ------ ------- -------
LESS DISTRIBUTIONS:
Distributions from net realized gains... -- -- (0.55) -- (0.08)
Distributions in excess of net realized
gains.................................. -- -- (0.21) -- (0.02)
------ ------ ------ ------- -------
Total distributions..................... -- -- (0.76) -- (0.10)
------ ------ ------ ------- -------
Net asset value, end of period.......... $17.94 $16.32 $25.57 $ 28.56 $ 10.50
====== ====== ====== ======= =======
TOTAL RETURN(B)......................... 9.93% (36.15)% (8.14)% 171.74% (10.42)%
====== ====== ====== ======= =======
RATIOS TO AVERAGE NET
ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's).... $7,031 $5,997 $9,640 $15,989 $ 5,303
Ratio of operating expenses to average
net assets............................. 1.89% 1.38% 1.30% 1.36% 1.36%
Ratio of net investment loss to average
net assets............................. (1.77)% (1.29)% (1.03)% (0.76)% (1.03)%
Portfolio turnover rate................. 46% 38% 45% 60% 49%
Ratio of operating expenses to average
net assets without expense waivers
and/or reimbursements.................. 1.92% 1.47% 1.30% 1.38% 1.67%
</Table>
- ------------
(a) The Munder Healthcare Fund Class Y Shares commenced operations on December
31, 1996.
(b) Total return represents aggregate total return for the period indicated.
(c) Per share numbers have been calculated using the average shares method.
See Notes to Financial Statements.
18
MUNDER HEALTHCARE FUND
Notes to Financial Statements, June 30, 2003
- --------------------------------------------------------------------------------
1. ORGANIZATION
As of June 30, 2003, the Munder Funds (sometimes referred to as the "Funds")
consisted of 32 portfolios, each of which is a series of Munder Series Trust
("MST"), The Munder Funds, Inc. ("MFI"), The Munder Framlington Funds Trust
("MFFT") or The Munder @Vantage Fund ("@Vantage"). Information presented in
these financial statements pertains only to the Munder Healthcare Fund (the
"Fund"), a series of MFFT. MFFT is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as an open-end management investment
company, and was organized as a Massachusetts business trust on October 30,
1996. The Fund is classified as a diversified management investment company
under the 1940 Act.
The Fund offers 5 classes of shares -- Class A, Class B, Class C, Class K and
Class Y Shares. Financial statements for the other Munder Funds are presented in
separate reports.
On October 31, 2002, the Fund changed its name from Munder Framlington
Healthcare Fund to Munder Healthcare Fund.
On May 9, 2003, the Fund acquired all of the assets of the Munder
Bio(Tech)(2) Fund, a series of MFI, and assumed all liabilities of the Munder
Bio(Tech)(2) Fund in a tax-free exchange of shares of the Fund and the
subsequent liquidation of the Munder Bio(Tech)(2) Fund. The Agreement and Plan
of Reorganization was approved by the shareholders of the Munder Bio(Tech)(2)
Fund at a Special Meeting of the Shareholders held on May 7, 2003.
<Table>
Number of Shares outstanding of Munder Bio(Tech)(2) Fund prior to merger
Class A................................................... 604,602
Class B................................................... 958,527
Class II.................................................. 367,631
Class K................................................... 51
Class Y................................................... 24,484
</Table>
<Table>
Number of Shares issued of the Fund for shares of Munder Bio(Tech)(2)
Fund.
Class A................................................... 155,085
Class B................................................... 252,649
Class C................................................... 97,194
Class K................................................... 13
Class Y................................................... 6,247
Unrealized depreciation immediately prior to acquisition of
all assets and assumption of all liabilities of Munder
Bio(Tech)(2) Fund......................................... $(1,540,555)
</Table>
There were no undistributed income or gain amounts unpaid prior to the merger of
the Munder Bio(Tech)(2) Fund.
19
MUNDER HEALTHCARE FUND
Notes to Financial Statements, June 30, 2003 (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
PRIOR TO MERGER AFTER MERGER
-------------------------------
Net assets of Munder Bio(Tech)(2) Fund
Class A...................................... $ 2,371,060 $ --
Class B...................................... 3,683,550 --
Class II..................................... 1,416,290 --
Class K...................................... 204 --
Class Y...................................... 96,960 --
Net assets of the Fund
Class A...................................... $56,619,612 $58,990,672
Class B...................................... 87,962,523 91,646,073
Class C...................................... 42,919,169 44,335,459
Class K...................................... 171,561 171,765
Class Y...................................... 5,975,960 6,072,920
</Table>
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
increases and decreases in net assets resulting from operations during the
reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies followed by the Fund
in the preparation of its financial statements:
Security Valuation: Securities are valued at the last quoted sales price on
the primary market or exchange where such securities are traded, except for
securities traded on the NASDAQ, which are valued at the NASDAQ official close
price ("NOCP"). Unlisted securities, or securities for which the last quoted
sales price or a NOCP is not available, are valued at the mean of the most
recently quoted bid and asked prices. Restricted securities, and securities and
assets for which market quotations are not readily available, are valued at fair
value by a pricing committee, under the guidelines approved by the Board of
Trustees. Portfolio securities that are primarily traded on foreign securities
exchanges are generally valued at the last sale price of such securities on
their respective exchanges, except when an occurrence subsequent to the time a
value was so established is likely to have changed such value. In such an event,
the fair value of those securities will be determined through the consideration
of other factors by or in accordance with guidelines approved by the Board of
Trustees. Debt securities with remaining maturities of 60 days or less at the
time of purchase are valued on an amortized cost basis, which approximates
current market value, unless the Board of Trustees determines that such
valuation does not constitute fair value at that time.
20
MUNDER HEALTHCARE FUND
Notes to Financial Statements, June 30, 2003 (continued)
- --------------------------------------------------------------------------------
Foreign Currency: The books and records of the Fund are maintained in U.S.
dollars. Foreign currencies, investment securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollars
at the exchange rates prevailing at the end of each business day. Purchases and
sales of investment securities and items of income and expense denominated in
foreign currencies are translated on the respective dates of such transactions.
Unrealized gains and losses resulting from changes in foreign currency
exchange rates on all assets and liabilities denominated in foreign currencies
other than investment securities are included in the net change in unrealized
appreciation/(depreciation) of foreign currency-related transactions.
Unrealized gains and losses resulting from changes in foreign currency
exchange rates on investment securities denominated in foreign currencies are
included in the net change in unrealized appreciation/(depreciation) of
securities. Net realized gains and losses from foreign currency-related
transactions include foreign currency gains and losses between trade date and
settlement date on investment security, foreign currency and foreign interest
and dividend income transactions. The portion of foreign currency gains and
losses related to fluctuation in exchange rates between the initial purchase
trade date and subsequent sale trade date of securities denominated in foreign
currencies is included in realized gains and losses from security transactions.
Forward Foreign Currency Exchange Contracts and Spot Contracts: The Fund may
engage in forward foreign currency exchange and spot contracts in an effort to
facilitate transactions in foreign securities and to reduce exposure to foreign
currency exchange rates. Forward foreign currency exchange contracts and spot
contracts are marked to market daily based on the underlying exchange rates of
the contracts. The change in market value is recorded as unrealized appreciation
or depreciation from foreign currency-related transactions. When the contract is
closed, the Fund records a realized gain or loss from foreign currency-related
transactions equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.
The use of forward foreign currency exchange and spot contracts does not
eliminate fluctuations in the underlying prices of the Fund's securities, but it
does establish a rate of exchange that can be achieved in the future. Although
forward foreign currency exchange and spot contracts limit the risk of loss due
to a decline in the value of the hedged currency, they also limit any potential
gain that might result should the value of the currency increase. In addition,
the Fund could be exposed to risks if the counterparties to the contracts are
unable to meet the terms of their contracts.
21
MUNDER HEALTHCARE FUND
Notes to Financial Statements, June 30, 2003 (continued)
- --------------------------------------------------------------------------------
Repurchase Agreements: The Fund may engage in repurchase agreement
transactions. Under the terms of a typical repurchase agreement, the Fund takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Fund to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Fund's holding period.
This arrangement results in a fixed rate of return that is not subject to market
fluctuations during the Fund's holding period. The value of the collateral is at
least equal, at all times, to the total amount of the repurchase obligations,
including interest. In the event of counterparty default, the Fund has the right
to use the collateral to satisfy the terms of the repurchase agreement. However,
there could be potential loss to the Fund in the event the Fund is delayed or
prevented from exercising its right to dispose of the collateral securities,
including the risk of a possible decline in the value of the collateral
securities during the period in which the Fund seeks to assert its rights.
Munder Capital Management (the "Advisor") reviews the value of the collateral
and the creditworthiness of those banks and dealers with which the Fund enters
into repurchase agreements to evaluate potential risks.
Security Transactions, Net Investment Income and Gains and Losses: For
purposes of financial statement presentation, security transactions are recorded
on a trade date basis. The cost of investments sold is determined by use of the
specific identification method for both financial reporting and income tax
purposes. Interest income is recorded on the accrual basis. Dividends are
recorded on the ex-dividend date. Certain dividends from foreign securities are
recorded as soon as the Fund is informed of the ex-dividend date if such
information is obtained subsequent to the ex-dividend date. General expenses of
the Munder Funds are allocated to the Fund based upon the relevant driver of
such expenses. General expenses, income and realized and unrealized gains and
losses of the Fund are then prorated among the share classes based on the
relative average net assets of each class.
Fees Waived by Transfer Agent: The transfer agent has contractually agreed to
waive, for the period of its contract with the Fund, a portion of the fee it
charges the Fund. The amount of the waiver is equal to the servicing fee it
collects from Fund shareholders with account balances below a specified minimum.
For the year ending June 30, 2003, such waivers were $44,024 and are reflected
as fees waived by transfer agent in the accompanying Statement of Operations.
Short-Term Trading (Redemption) Fees: Class A, Class B and Class C Shares of
the Fund held less than sixty (60) days are subject to a short-term trading fee
equal to 2.0% of the proceeds of redeemed shares. The fee, which is retained by
the Fund, is accounted for as an addition to paid-in capital.
22
MUNDER HEALTHCARE FUND
Notes to Financial Statements, June 30, 2003 (continued)
- --------------------------------------------------------------------------------
These fees (if any) are shown in the accompanying Statements of Changes in Net
Assets as shareholder transaction fees.
Dividends and Distributions to Shareholders: Dividends from net investment
income are declared and paid annually (if available) by the Fund. The Fund's net
realized capital gains (including net short-term capital gains), if any, are
declared and distributed at least annually. Distributions to shareholders are
recorded on the ex-dividend date.
Income dividends and capital gain distributions are determined in accordance
with income tax regulations, which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments of
income and gains on various investment securities held by the Fund, timing
differences and differing characterization of distributions made by the Fund as
a whole.
As determined on June 30, 2003, permanent differences resulting primarily
from different book and tax accounting for net operating losses and currency
gains and losses were reclassified at year-end. The following reclassifications
had no effect on net investment income, net assets or net asset value per share.
<Table>
<Caption>
UNDISTRIBUTED ACCUMULATED
NET INVESTMENT NET REALIZED PAID-IN
INCOME/(LOSS) GAIN/(LOSS) CAPITAL
- -------------------------------------------
$5,121,663 $(2,475,028) $(2,646,635)
</Table>
Federal Income Taxes: The Fund intends to continue to qualify as a regulated
investment company by complying with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute
substantially all of its earnings to its shareholders. Therefore, no Federal
income or excise tax provision is required.
3. INVESTMENT ADVISOR, SUB-ADVISOR, ADMINISTRATOR AND OTHER RELATED PARTY
TRANSACTIONS
For its advisory services, the Advisor is entitled to receive a fee, computed
daily and payable monthly, based on the average daily net assets of the Fund at
an annual rate of 1.00% based on assets up to $250 million and 0.75% based on
assets exceeding $250 million.
The Advisor is also the administrator for the Munder Funds. In its capacity
as administrator, the Advisor is entitled to receive from the Fund a fee,
computed daily and payable monthly, based on the aggregate average daily net
assets of all of the portfolios of MFI, MFFT, @Vantage and MST, with the
exception of the following portfolios of MST: Munder S&P(R) MidCap Index Equity
Fund, Munder S&P(R) SmallCap Index Equity Fund, Munder
23
MUNDER HEALTHCARE FUND
Notes to Financial Statements, June 30, 2003 (continued)
- --------------------------------------------------------------------------------
Institutional Government Money Market Fund and Munder Institutional Money Market
Fund. The following fee schedule became effective on June 1, 2003:
<Table>
<Caption>
AGGREGATE NET ASSETS FEE
- ---------------------------------------------------------------------
First $2.8 billion.......................................... 0.1477%
Next $2.2 billion........................................... 0.1377%
Next $5.0 billion........................................... 0.1357%
Next $2.5 billion........................................... 0.0867%
Thereafter.................................................. 0.0767%
</Table>
Prior to June 1, 2003, the fee schedule in effect was as follows:
<Table>
<Caption>
AGGREGATE NET ASSETS FEE
- --------------------------------------------------------------------
First $2.8 billion.......................................... 0.141%
Next $2.2 billion........................................... 0.131%
Next $5.0 billion........................................... 0.129%
Next $2.5 billion........................................... 0.080%
Thereafter.................................................. 0.070%
</Table>
In its capacity as administrator, the Advisor is also entitled to receive a
fee from the remaining Munder Funds based on their aggregate average daily net
assets.
For the period from June 1, 2002 through May 31, 2003, the Advisor had agreed
to limit to $3.9 million the total amount it could receive in the aggregate from
the Munder Funds for its services as administrator, after payment of
sub-administration fees to the Munder Funds' sub-administrators. For the period
from June 1, 2003 through May 31, 2004, the Advisor has reduced that limit to
$3.4 million. For the year ended June 30, 2003, the Advisor earned $278,594
before payment of sub-administration fees and $68,484 after payment of
sub-administration fees for its administrative services to the Fund. During the
year ended June 30, 2003, the Fund paid an effective rate of 0.1363% for
administrative services.
Pursuant to a sub-advisory agreement with the Advisor, Framlington Overseas
Investment Management Limited (the "Sub-Advisor") provides sub-advisory services
to the Fund and is responsible for its management, including all decisions
regarding purchases and sales of portfolio securities. For its services with
regard to the Fund, the Advisor pays the Sub-Advisor a monthly fee equal on an
annual basis to 40% of the net advisory revenues earned by the Advisor with
respect to the Fund. The Advisor indirectly owns a 49% interest in the
Sub-Advisor.
Comerica Inc. ("Comerica"), through its wholly-owned subsidiary Comerica
Bank, owns approximately 98% of the Advisor. Comerica Bank provides
24
MUNDER HEALTHCARE FUND
Notes to Financial Statements, June 30, 2003 (continued)
- --------------------------------------------------------------------------------
certain sub-transfer agency and related services to the Fund. As compensation
for the sub-transfer agency and related services provided to the Fund, Comerica
Bank receives a fee of 0.01% of the aggregate average daily net assets of the
Fund beneficially owned by Comerica Bank and its customers. Comerica Bank earned
$402 for its sub-transfer agency and other related services provided to the Fund
for the year ended June 30, 2003.
Each Director/Trustee of MST, MFI and MFFT is paid an aggregate fee for
services provided as a Board member of MST, MFI and MFFT. The fee consists of a
$68,000 annual retainer ($90,000 for the Chairman) for services in such
capacity, plus out-of-pocket expenses related to attendance at Board and
Committee meetings. Each Trustee of @Vantage is paid an annual retainer of
$4,000 for services provided as a Board member plus out-of-pocket expenses
related to attendance at Board and Committee meetings. A Board member who is
Chairman of a committee (Audit Committee, Board Process and Compliance Oversight
Committee, and/or Nominating Committee) also receives an annual retainer of
$3,000 for such service. Directors/Trustees may elect to defer all or a portion
of the fees earned under a deferred compensation plan. Under this plan, amounts
deferred are valued as if they are invested in one or more of the Munder Funds
selected by the Director/Trustee. These amounts are not, however, actually
invested in shares of the Munder Funds, and the obligations of MST, MFI, MFFT
and @Vantage to make payments of deferred amounts are unsecured general
obligations of the Munder Funds. No officer, director or employee of the
Advisor, Sub-Advisor, Comerica or any of Comerica's affiliates receives any
compensation from MST, MFI, MFFT or @Vantage.
4. DISTRIBUTION AND SERVICE PLAN
The Fund has a Distribution and Service Plan (the "Plan") with respect to the
Class A, Class B, Class C and Class K Shares, that was adopted pursuant to Rule
12b-1 under the 1940 Act except with respect to Class K Shares. Under the Plan,
service fees are collected from the Fund primarily to pay securities dealers and
other financial institutions and organizations (collectively, the "Service
Organizations") who provide shareholder services for the Fund. The Plan also
permits payments with respect to Class B and Class C Shares to be made by the
Fund to the Distributor or directly to other service providers in connection
with the distribution of Fund shares to investors and provision of certain
shareholder services (which include but are not limited to the payment of
compensation, including compensation to Service Organizations to obtain various
distribution-related services for the Fund).
25
MUNDER HEALTHCARE FUND
Notes to Financial Statements, June 30, 2003 (continued)
- --------------------------------------------------------------------------------
The maximum rates, as a percentage of average daily net assets, payable under
the Plan are as follows:
<Table>
<Caption>
CLASS A CLASS B CLASS C CLASS K
SHARES SHARES SHARES SHARES
12b-1 FEES 12b-1 FEES 12b-1 FEES SERVICE FEES
- ---------------------------------------------------
0.25% 1.00% 1.00% 0.25%
</Table>
No payments are made under the Plan with regard to Class Y Shares.
Comerica Securities, Inc. ("Comerica Securities"), a wholly-owned subsidiary
of Comerica Bank, and Comerica Bank are among the Service Organizations who may
receive fees from the Fund under the Plan. For the year ended June 30, 2003, the
Fund paid $49 to Comerica Securities and $459 to Comerica Bank for shareholder
services provided to Class A, Class B, Class C and Class K shareholders.
5. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities other than short-
term investments and U.S. Government securities were $96,255,893 and
$160,862,691 respectively, for the year ended June 30, 2003.
At June 30, 2003, aggregate gross unrealized appreciation for all securities
for which there was an excess of value over tax cost was $36,785,219 and
aggregate gross unrealized depreciation for all securities for which there was
an excess of tax cost over value was $70,047,843 and net depreciation for
Federal income tax purposes was $33,262,624. At June 30, 2003, aggregate cost
for Federal income tax purposes was $261,610,264.
6. INDUSTRY CONCENTRATION
The Fund primarily invests in companies providing healthcare and medical
services. The values of these companies are particularly vulnerable to rapidly
changing technology, extensive government regulation and relatively high risks
of obsolescence caused by scientific and technological advances.
7. REVOLVING LINE OF CREDIT
Effective December 18, 2002, the Munder Funds renewed a one-year revolving
line of credit with State Street Bank and Trust Company in which the Fund, and
other Munder Funds, participate. Borrowings under the line may not exceed the
lesser of $75,000,000 or 15% of the value of the total assets of the Fund.
Interest is payable on outstanding borrowings at the Federal Funds Rate plus
0.50%. Additionally, the line of credit includes an annual commitment fee equal
to 0.10% per annum through December 17, 2003 on the daily amount of the unused
commitment. During the year ended June 30,
26
MUNDER HEALTHCARE FUND
Notes to Financial Statements, June 30, 2003 (continued)
- --------------------------------------------------------------------------------
2003, the Fund did not utilize the revolving line of credit. For the year ended
June 30, 2003 total commitment fees for the Fund were $4,998.
8. DISTRIBUTIONS TO SHAREHOLDERS
At June 30, 2003, the components of distributable earnings on a tax basis
were as follows:
<Table>
<Caption>
POST OCTOBER UNREALIZED
LOSS/CAPITAL APPRECIATION/
LOSS CARRYOVER (DEPRECIATION) TOTAL
- ---------------------------------------------------
$ (180,369,554) $(33,261,201) $(213,630,755)
</Table>
The differences between book and tax distributable earnings are primarily due
to wash sales.
9. INCOME TAX INFORMATION
As determined at June 30, 2003, the Fund had available for Federal income tax
purposes, $132,990,259 of unused capital losses of which $3,121,589 and
$129,868,670 expire in 2010 and 2011, respectively. In addition, $2,475,702 of
the losses expiring in 2010, may be further limited as these amounts were
acquired in the reorganization with the Munder Bio(Tech)(2) Fund that occurred
on May 9, 2003.
Certain capital and net foreign currency losses realized after October 31
within the taxable year may be deferred and treated as occurring on the first
day of the following tax year. The Fund has elected to defer net capital and
currency losses arising between November 1, 2002 and June 30, 2003 of
$47,333,234 and $46,061, respectively.
10. SHAREHOLDER MEETING RESULTS (UNAUDITED)
A Special Meeting of Shareholders ("Merger Special Meeting") of the Munder
Bio(Tech)(2) Fund, a series of MFI, was held on April 23, 2003. The Merger
Special Meeting was adjourned to another date in order to permit shareholders
further time to respond to the solicitation of proxies. The Merger Special
Meeting reconvened on April 28, 2003, and was further adjourned twice until
April 30, 2003 and again until May 7, 2003. On May 7, 2003, the Merger Special
Meeting reconvened for the last time. The purpose of the Merger Special Meeting
was to seek the approval or disapproval from the shareholders of the Munder
Bio(Tech)(2) Fund of an Agreement and Plan of Reorganization providing for the
acquisition of all of the assets of the Munder Bio(Tech)(2) Fund by the Fund and
the assumption of all liabilities of the Munder Bio(Tech)(2) Fund by the Fund in
exchange for shares of the Fund and
27
MUNDER HEALTHCARE FUND
Notes to Financial Statements, June 30, 2003 (continued)
- --------------------------------------------------------------------------------
the subsequent liquidation of the Munder Bio(Tech)(2) Fund. The Agreement and
Plan of Reorganization was approved by shareholders. The results of the vote
were 1,171,708.623 votes For, 60,589.519 votes Against, 36,062.260 Abstentions
and 570,859.000 Broker Non-Votes.
A Special Meeting of Shareholders ("Special Meeting") of the Fund, a series
of MFFT, was held on April 28, 2003. The Special Meeting was adjourned to
another date in order to permit shareholders further time to respond to the
solicitation of proxies. The Special Meeting reconvened on May 28, 2003, was
further adjourned, and reconvened again on June 12, 2003. The purpose of the
Special Meeting was to ask shareholders to consider the following proposals,
which were more fully described in the Proxy Statement dated February 21, 2003.
PROPOSAL 1
The purpose of this proposal was to elect the Munder Funds Board of
Directors/Trustees. The shareholders of the Fund together with the other
shareholders of MFFT approved the proposal, as did the shareholders of MFI, MFT
and St. Clair Funds, Inc. The names of the Directors/Trustees and the results of
the election for MFFT are as set forth below.
<Table>
<Caption>
NOMINEES: NO. OF SHARES
- ------------------------------------------------------------------------------
David J. Brophy............................. Affirmative 14,806,954.364
Withhold 231,323.019
TOTAL 15,038,277.383
Joseph E. Champagne......................... Affirmative 14,805,566.487
Withhold 232,710.896
TOTAL 15,038,277.383
Thomas D. Eckert............................ Affirmative 14,808,518.392
Withhold 229,758.991
TOTAL 15,038,277.383
Charles W. Elliott.......................... Affirmative 14,804,709.045
Withhold 233,568.338
TOTAL 15,038,277.383
John Engler................................. Affirmative 14,777,527.236
Withhold 260,750.147
TOTAL 15,038,277.383
Michael T. Monahan.......................... Affirmative 14,807,993.874
Withhold 230,283.509
TOTAL 15,038,277.383
Arthur T. Porter............................ Affirmative 14,807,638.630
Withhold 230,638.753
TOTAL 15,038,277.383
John Rakolta, Jr............................ Affirmative 14,804,882.994
Withhold 233,394.389
TOTAL 15,038,277.383
</Table>
28
MUNDER HEALTHCARE FUND
Notes to Financial Statements, June 30, 2003 (continued)
- --------------------------------------------------------------------------------
PROPOSAL 2
The purpose of this proposal was to seek approval of an Agreement and Plan of
Reorganization and Redomiciliation ("Reorganization Agreement"), pursuant to
which the Fund would be reorganized with and into a corresponding series of MST.
The proposal did not receive a sufficient number of total votes by
shareholders of the Fund to pass. The results of the votes are as set forth
below.
<Table>
<Caption>
NO. OF SHARES
--------------
For........................................................ 4,870,102.541
Against.................................................... 281,813.399
Abstain.................................................... 222,689.865
Broker Non-votes........................................... 5,089,992.000
TOTAL...................................................... 10,464,597.805
</Table>
PROPOSAL 3
The purpose of this proposal was to ask shareholders to amend or eliminate
certain fundamental investment restrictions of the Fund. None of the proposals
was intended to materially alter the investment risk associated with the Fund or
change the way in which it was managed. No part of the proposal received a
sufficient number of total votes by shareholders of the Fund to pass. The
results of the votes are as set forth below.
PROPOSAL 3.A -- DIVERSIFICATION
<Table>
<Caption>
NO. OF SHARES
--------------
For........................................................ 4,831,086.310
Against.................................................... 292,962.284
Abstain.................................................... 250,557.211
Broker Non-votes........................................... 5,089,992.000
TOTAL...................................................... 10,464,597.805
</Table>
PROPOSAL 3.B -- BORROWING
<Table>
<Caption>
NO. OF SHARES
--------------
For........................................................ 4,759,009.965
Against.................................................... 354,968.021
Abstain.................................................... 260,627.819
Broker Non-votes........................................... 5,089,992.000
TOTAL...................................................... 10,464,597.805
</Table>
29
MUNDER HEALTHCARE FUND
Notes to Financial Statements, June 30, 2003 (continued)
- --------------------------------------------------------------------------------
PROPOSAL 3.C -- SENIOR SECURITIES
<Table>
<Caption>
NO. OF SHARES
--------------
For........................................................ 4,772,684.391
Against.................................................... 338,022.057
Abstain.................................................... 263,899.357
Broker Non-votes........................................... 5,089,992.000
TOTAL...................................................... 10,464,597.805
</Table>
PROPOSAL 3.D -- UNDERWRITING SECURITIES
<Table>
<Caption>
NO. OF SHARES
--------------
For........................................................ 4,790,517.869
Against.................................................... 330,549.070
Abstain.................................................... 253,538.866
Broker Non-votes........................................... 5,089,992.000
TOTAL...................................................... 10,464,597.805
</Table>
PROPOSAL 3.E -- REAL ESTATE
<Table>
<Caption>
NO. OF SHARES
--------------
For........................................................ 4,799,251.931
Against.................................................... 328,019.072
Abstain.................................................... 247,334.802
Broker Non-votes........................................... 5,089,992.000
TOTAL...................................................... 10,464,597.805
</Table>
PROPOSAL 3.F -- MAKING LOANS
<Table>
<Caption>
NO. OF SHARES
--------------
For........................................................ 4,732,079.781
Against.................................................... 376,853.179
Abstain.................................................... 265,672.845
Broker Non-votes........................................... 5,089,992.000
TOTAL...................................................... 10,464,597.805
</Table>
PROPOSAL 3.G -- CONCENTRATION OF INVESTMENTS
<Table>
<Caption>
NO. OF SHARES
--------------
For........................................................ 4,812,600.763
Against.................................................... 307,193.275
Abstain.................................................... 254,811.767
Broker Non-votes........................................... 5,089,992.000
TOTAL...................................................... 10,464,597.805
</Table>
30
MUNDER HEALTHCARE FUND
Notes to Financial Statements, June 30, 2003 (continued)
- --------------------------------------------------------------------------------
PROPOSAL 3.H -- COMMODITIES
<Table>
<Caption>
NO. OF SHARES
--------------
For........................................................ 4,759,741.045
Against.................................................... 354,834.104
Abstain.................................................... 260,030.656
Broker Non-votes........................................... 5,089,992.000
TOTAL...................................................... 10,464,597.805
</Table>
PROPOSAL 3.I -- PLEDGING, MORTGAGING AND HYPOTHECATING FUND ASSETS
<Table>
<Caption>
NO. OF SHARES
--------------
For........................................................ 4,748,054.817
Against.................................................... 359,260.324
Abstain.................................................... 267,290.664
Broker Non-votes........................................... 5,089,992.000
TOTAL...................................................... 10,464,597.805
</Table>
PROPOSAL 3.K -- INVESTMENTS FOR CONTROL
<Table>
<Caption>
NO. OF SHARES
--------------
For........................................................ 4,782,180.171
Against.................................................... 322,656.744
Abstain.................................................... 269,768.890
Broker Non-votes........................................... 5,089,992.000
TOTAL...................................................... 10,464,597.805
</Table>
PROPOSAL 3.O -- MARGIN ACTIVITIES AND SHORT SELLING
<Table>
<Caption>
NO. OF SHARES
--------------
For........................................................ 4,755,290.592
Against.................................................... 365,792.347
Abstain.................................................... 253,522.866
Broker Non-votes........................................... 5,089,992.000
TOTAL...................................................... 10,464,597.805
</Table>
PROPOSAL 3.P -- REVERSE REPURCHASE AGREEMENTS
<Table>
<Caption>
NO. OF SHARES
--------------
For........................................................ 4,756,394.177
Against.................................................... 359,698.612
Abstain.................................................... 258,513.016
Broker Non-votes........................................... 5,089,992.000
TOTAL...................................................... 10,464,597.805
</Table>
31
MUNDER HEALTHCARE FUND
Notes to Financial Statements, June 30, 2003 (continued)
- --------------------------------------------------------------------------------
11. DIRECTORS/TRUSTEES AND OFFICERS (UNAUDITED)
Information about the Directors/Trustees and executive officers of the Munder
Funds, including their business addresses, ages and principal occupations during
the past five years, and other current directorships of publicly traded
companies or funds, are set forth in the table below. A Director/Trustee is
deemed to be a "Non-Interested Director/Trustee" to the extent the
Director/Trustee is not an "interested person" of the Munder Funds (as that term
is defined in Section 2(a)(19) of the 1940 Act).
<Table>
<Caption>
NUMBER OF
PORTFOLIOS
TERM OF IN FUND
OFFICE(1) PRINCIPAL COMPLEX OTHER
POSITION(S) WITH AND LENGTH OF OCCUPATION(S) OVERSEEN DIRECTORSHIPS
THE MUNDER TIME DURING BY DIRECTOR/ HELD BY
NAME, ADDRESS AND AGE FUNDS SERVED(2) PAST 5 YEARS TRUSTEE DIRECTOR/TRUSTEE
- ------------------------------------------------------------------------------------------------------------
NON-INTERESTED
DIRECTORS/TRUSTEES
Charles W. Elliott Director/Trustee Indefinite Consultant, 32 None
c/o The Munder Funds and Chairman since 11/89 self- employed
480 Pierce Street (since 7/95);
Suite 300 Senior Advisor
Birmingham, MI 48009 to President,
Age 71 Western
Michigan
University
(7/95 to
12/98).
John Rakolta, Jr. Director/Trustee Indefinite Chairman and 32 None
c/o The Munder Funds and Vice since 2/93 Chief Executive
480 Pierce Street Chairman Officer,
Suite 300 Walbridge
Birmingham, MI 48009 Aldinger
Age 56 Company
(construction
company) (since
1991).
David J. Brophy Director/Trustee Indefinite Professor of 32 None
c/o The Munder Funds since 5/93 Finance,
480 Pierce Street University of
Suite 300 Michigan-
Birmingham, MI 48009 Business School
Age 67 (since 8/66).
Joseph E. Champagne Director/Trustee Indefinite Vice President, 32 None
c/o The Munder Funds since 11/89 Macomb College
480 Pierce Street (since 2001);
Suite 300 Dean, Macomb
Birmingham, MI 48009 College (since
Age 65 9/97).
</Table>
32
MUNDER HEALTHCARE FUND
Notes to Financial Statements, June 30, 2003 (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
NUMBER OF
PORTFOLIOS
TERM OF IN FUND
OFFICE(1) PRINCIPAL COMPLEX OTHER
POSITION(S) WITH AND LENGTH OF OCCUPATION(S) OVERSEEN DIRECTORSHIPS
THE MUNDER TIME DURING BY DIRECTOR/ HELD BY
NAME, ADDRESS AND AGE FUNDS SERVED(2) PAST 5 YEARS TRUSTEE DIRECTOR/TRUSTEE
- ------------------------------------------------------------------------------------------------------------
Thomas D. Eckert Director/Trustee Indefinite Director, 32 None
c/o The Munder Funds since 2/93 President and
480 Pierce Street Chief Executive
Suite 300 Officer,
Birmingham, MI 48009 Capital
Age 55 Automotive REIT
(real estate
investment
trust
specializing in
retail
automotive
properties)
(since 10/97).
John Engler Director/Trustee Indefinite President of 32 Universal Forest
c/o The Munder Funds since 2/03 State and Local Products, Inc.
480 Pierce Street Government/Vice (manufacturer
Suite 300 President of and distributor
Birmingham, MI 48009 Government of lumber
Age 54 Solutions for products) (since
North America, 1/03); Northwest
Electronic Data Airlines (since
Systems Corp. 4/03).
(computer
services)
(since 1/03);
Governor of the
State of
Michigan (1/91
to 1/03).
Arthur T. Porter Director/Trustee Indefinite President and 32 None
3990 John R. since 2/01 Chief Executive
Detroit, MI 48201 Officer of the
Age 47 Detroit Medical
Center (since
3/99);
Professor with
Tenure and
Chairman of
Radiation
Oncology of
Wayne State
University
School of
Medicine (3/91
to 3/99).
</Table>
33
MUNDER HEALTHCARE FUND
Notes to Financial Statements, June 30, 2003 (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
NUMBER OF
PORTFOLIOS
TERM OF IN FUND
OFFICE(1) PRINCIPAL COMPLEX OTHER
POSITION(S) WITH AND LENGTH OF OCCUPATION(S) OVERSEEN DIRECTORSHIPS
THE MUNDER TIME DURING BY DIRECTOR/ HELD BY
NAME, ADDRESS AND AGE FUNDS SERVED(2) PAST 5 YEARS TRUSTEE DIRECTOR/TRUSTEE
- ------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE
Michael T. Monahan(3) Director/Trustee Indefinite President of 32 CMS Energy
3707 West Maple Rd. since 8/00 Monahan Corporation
Suite 102 Enterprises, (energy company)
Bloomfield Hills, MI 48301 LLC (consulting (since 12/02);
Age 64 company) (since Guilford Mills,
6/99); Chairman Inc. (supplier
of Munder of automotive
Capital textile
Management products) (since
(investment 10/02).
advisor) (10/99
to 12/00);
Chairman and
Chief Executive
Officer of
Munder Capital
Management
(10/99 to
12/99);
President of
Comerica
Incorporated
(bank holding
company) (6/92
to 6/99).
</Table>
<Table>
- ----------------------------------------------------------------------------------------------------------
(1) A Director/Trustee may serve until his death, resignation, removal or retirement. Pursuant to the
Fund's By-Laws, any Director/Trustee shall retire as Director/Trustee at the end of the calendar year
in which he attains the age of 75 years.
(2) Length of time served is measured from the earliest date of service as a Director/Trustee of any of
the Munder Funds or their predecessors.
(3) Mr. Monahan is an "interested person" of the Fund as defined in the 1940 Act. Mr. Monahan owns stock
in Comerica.
</Table>
34
MUNDER HEALTHCARE FUND
Notes to Financial Statements, June 30, 2003 (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
TERM OF
OFFICE(1)
AND LENGTH OF
POSITION(S) WITH TIME
NAME, ADDRESS AND AGE THE TRUST SERVED(2) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
- --------------------------------------------------------------------------------------------------------
OFFICERS
James C. Robinson President through 2/04; Chairman and Chief Executive Officer of
480 Pierce Street since 5/00 Munder Capital Management (investment
Suite 300 advisor) (since 1/00); Chief Investment
Birmingham, MI 48009 Officer/Fixed Income of Munder Capital
Age 42 Management (1/90 to 1/00).
Stephen J. Shenkenberg Vice President through 2/04; General Counsel of Munder Capital
480 Pierce Street and Secretary since 8/00 Management (investment advisor) (since
Suite 300 7/00); Deputy General Counsel of Strong
Birmingham, MI 48009 Capital Management, Inc. (investment
Age 45 advisor) (12/92 to 7/00).
Peter K. Hoglund Vice President through 2/04; Chief Administration Officer of Munder
480 Pierce Street since 2/01 Capital Management (investment advisor)
Suite 300 (since 5/00); Associate of Heartland
Birmingham, MI 48009 Industrial Partners (a private equity
Age 37 group) (10/99 to 5/00); Sr. Portfolio
Manager of Munder Capital Management (1/98
to 10/99).
Cherie Ugorowski Treasurer through 2/04; Controller of Munder Capital Management
480 Pierce Street since 8/01 (investment advisor) (since 6/01);
Suite 300 Corporate Accounting Manager,
Birmingham, MI 48009 DaimlerChrysler Corporation (automotive
Age 34 manufacturer) (9/99 to 6/01); Manager,
Audit and Business Advisory Practice,
Arthur Andersen LLP (5/95 to 9/99).
- --------------------------------------------------------------------------------------------------------
(1) The officers are elected annually by the Board.
(2) Length of time served is measured from the earliest date of service as an officer of any of the
Munder Funds or their predecessors.
</Table>
The Statement of Additional Information for the Fund includes additional
information about Directors/Trustees and is available, without charge, upon
request, by calling (800) 438-5789.
35
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Shareholders of Munder Healthcare Fund and
Board of Trustees of The Munder Framlington Funds Trust
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Munder Healthcare Fund (formerly Munder
Framlington Healthcare Fund, the portfolio comprising The Munder Framlington
Funds Trust) (the "Fund") as of June 30, 2003, and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the five years in the period then ended. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of June 30, 2003 by correspondence with the
custodian and brokers or by other appropriate auditing procedures where 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
Munder Healthcare Fund portfolio of The Munder Framlington Funds Trust at June
30, 2003, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then ended, in
conformity with accounting principles generally accepted in the United States.
-s- Ernst & Young LLP
Boston, Massachusetts
August 14, 2003
36
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37
BOARD OF TRUSTEES
Charles W. Elliott, Chairman
John Rakolta, Jr., Vice Chairman
David J. Brophy
Joseph E. Champagne
Thomas D. Eckert
John Engler
Michael T. Monahan
Arthur T. Porter
OFFICERS
James C. Robinson, President
Peter K. Hoglund, Vice President
Stephen J. Shenkenberg, Vice President and Secretary
Mary Ann Shumaker, Assistant Secretary
Melanie Mayo West, Assistant Secretary
Cherie N. Ugorowski, Treasurer
David W. Rumph, Assistant Treasurer
Bradford E. Smith, Assistant Treasurer
INVESTMENT ADVISOR & ADMINISTRATOR
Munder Capital Management
Munder Capital Center
480 Pierce Street
Birmingham, MI 48009
SUB-ADVISOR
Framlington Overseas Investment Management Limited
155 Bishopsgate
London, England EC2M 3XJ
TRANSFER AGENT
PFPC, Inc.
4400 Computer Drive
Westborough, MA 01581
SUB-ADMINISTRATOR & CUSTODIAN
State Street Bank & Trust Company
225 Franklin Street
Boston, MA 02110
DISTRIBUTOR & SUB-ADMINISTRATOR
Funds Distributor, Inc./BISYS Fund Services, Inc.
60 State Street
Boston, MA 02109
LEGAL COUNSEL
Dechert LLP
1775 I Street, N.W.
Washington, D.C. 20006
INDEPENDENT AUDITORS
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116
ANNHC603
ITEM 2. CODE OF ETHICS.
Not required.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not required.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not required.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
INVESTMENT COMPANIES.
Not applicable.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) Within 90 days of the filing date of this Form N-CSR, James C.
Robinson, the registrant's President and Principal Executive Officer,
and Peter K. Hoglund, the registrant's Vice President and Principal
Financial Officer, reviewed the registrant's disclosure controls and
procedures as defined in Rule 30a-3(c) of under the Investment Company
Act of 1940 (the "Procedures") and evaluated their effectiveness. Based
on their review, Mr. Robinson and Mr. Hoglund determined that the
Procedures adequately ensure that information required to be disclosed
by the registrant in periodic reports filed under the Securities and
Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods required by the Securities and Exchange
Commission.
(b) There were no significant changes in the registrant's internal control
over financial reporting (as defined in Rule 30a-3(d) under the
Investment Company Act of 1940) that occurred during the registrant's
second fiscal half-year that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over
financial reporting.
ITEM 10. EXHIBITS
(a)(1) Not required.
(a)(2) The certifications required by Rule 30a-2 of the Investment Company Act
of 1940 are attached hereto.
(b) The certifications required by Rule 30a-2(b) of the Investment Company
Act of 1940 and Section 906 of the Sarbanes-Oxley Act of 2002 are
attached hereto.
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.
THE MUNDER FRAMLINGTON FUNDS TRUST
By: /s/ James C. Robinson
---------------------
James C. Robinson
President
Date: September 8, 2003
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: /s/ James C. Robinson
---------------------
James C. Robinson
President and Principal Executive Officer
Date: September 8, 2003
By: /s/ Peter K. Hoglund
--------------------
Peter K. Hoglund
Vice President and Principal Financial Officer
Date: September 8, 2003