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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 811-05547
---------------------------------------------
Laudus Trust
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
3435 Stelzer Road, Columbus, Ohio 43219-8006
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
BISYS Fund Services, 3435 Stelzer Road, Columbus, Ohio 43219-8006
- -------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (614) 470-8000
---------------------------
Date of fiscal year end: March 31, 2005
-------------------
Date of reporting period: March 31, 2005
------------------
Form N-CSR is to be used by management investment companies to file reports
with the Commission not later than 10 days after the transmission to
stockholders of any report that is required to be transmitted to stockholders
under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).
The Commission may use the information provided on Form N-CSR in its regulatory,
disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form
N-CSR, and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. Section 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
Include a copy of the report transmitted to stockholders pursuant to
Rule 30e-1 under the Act (17 CFR 270.30e-1).
ANNUAL REPORT (LAUDUS FUNDS LOGO)
March 31, 2005
COMMAND PERFORMANCE (TM)
U.S. EQUITY FUNDS
Laudus Rosenberg U.S. Large Capitalization Fund
Laudus Rosenberg U.S. Large Capitalization Growth Fund
Laudus Rosenberg U.S. Discovery Fund
Laudus Rosenberg U.S. Small Capitalization Fund
INTERNATIONAL EQUITY FUNDS
Laudus Rosenberg International Equity Fund
Laudus Rosenberg International Small Capitalization Fund
LONG/SHORT EQUITY FUNDS
Laudus Rosenberg U.S. Large/Mid Capitalization Long/Short Equity Fund
Laudus Rosenberg Global Long/Short Equity Fund
Laudus Rosenberg Value Long/Short Equity Fund
Each of the Funds is a series of Laudus Trust, which is an open-end management
investment company offering diversified portfolios with different investment
objectives and strategies.
Charles Schwab Investment Management, Inc. is the Investment Adviser to the
Funds and AXA Rosenberg Investment Management LLC is the Sub-adviser.
Table of Contents
1 PRESIDENT'S MESSAGE
2 MANAGEMENT'S DISCUSSION
7 PERFORMANCE AND FUND FACTS
21 FUND EXPENSES
23 FINANCIAL STATEMENTS AND NOTES
137 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
139 TRUSTEES AND OFFICERS OF LAUDUS TRUST
141 DEFINITIONS,TERMS AND OTHER INFORMATION
NOTICE ABOUT DUPLICATE MAILINGS
In order to reduce expenses of the Laudus Trust incurred in connection with the
mailing of prospectuses, prospectus supplements, semi-annual reports and annual
reports to multiple shareholders at the same address, Laudus Trust may in the
future deliver one copy of a prospectus, prospectus supplement, semi-annual
report or annual report to a single investor sharing a street address or post
office box with other investors, provided that all such investors have the same
last name or are believed to be members of the same family. This process, called
"householding," will continue indefinitely unless you instruct us otherwise. If
you share an address with another investor and wish to receive your own
prospectus, prospectus supplements, semi-annual reports and annual reports,
please call the Trust toll-free at 800.447.3332.
Each of the Funds is a series of the Laudus Trust (the "Trust"), an open-end
management investment company offering multiple portfolios with different
investment objectives and strategies. Except as explicitly described otherwise,
the investment objective and policies of each of the Funds may be changed
without shareholder approval. The Funds are advised by Charles Schwab Investment
Management, Inc. ("CSIM"). AXA Rosenberg Investment Management LLC ("AXA
Rosenberg") acts as Sub-adviser to the Funds. The Funds are distributed by
Laudus Distributor, Inc.
President's Message
I'm pleased to report that just one year after forming the
Laudus Funds Group, and despite the equity market's recent
volatility, all but one of the nine Laudus Rosenberg Funds
outperformed their respective benchmarks over the 12-month
period. Not only that, but the Laudus Rosenberg
International Small Capitalization Fund was honored with
Standard & Poor's/Business Week Excellence in Fund
Management Award for 2005 in the foreign, team-managed fund
category.
I speak for all of the Laudus Funds Group when I say we are
proud of the performance of our family of funds over the
last year and pleased with the recognition we've received
for delivering that performance.
By offering Laudus Funds to retail investors and registered
investment advisors, we provide you with access to Fund
managers who take a disciplined, institutional style
approach that is designed to benefit shareholders.
Investing in international small-cap companies, for
example, takes a great deal of research that isn't readily
available to most investors and is time-consuming for
advisors to identify and monitor. Our fund managers do that
for you.
We continually evaluate the potential of new products to
meet the needs of both our retail and advisor clients. To
this end, on May 2, 2005, we launched the Laudus Rosenberg
U.S. Large Capitalization Value Fund to provide you with a
choice for the large-cap value portion of your portfolio.
This Fund is designed to deliver capital appreciation
through investing in large-cap value stocks.
We also remain committed to seeking out ways to increase
the value we offer our shareholders. Effective May 2, 2005
the Institutional Shares minimum for all Laudus Funds was
reduced from $1,000,000 to $50,000, making the lower-cost
Institutional Shares available to a broader audience of
investors who meet the reduced minimum.
I want to remind you that your trust is very important to
us and we will do all we can to maintain it. Thank you for
investing with us.
Sincerely,
/s/ Jana D. Thompson
Investors should consider carefully information contained in the prospectus,
including investment objectives, risks, charges and expenses. You can request a
prospectus by calling 800-447-3332. Please read the prospectus carefully before
investing.
(PHOTO OF JANA D. THOMPSON)
JANA D. THOMPSON is
President and CEO of
Laudus Funds. Prior to
joining Charles Schwab
& Co., Inc. in 2000,
Jana enjoyed a 16-year
career in asset
management and client
services.
Laudus Funds Annual Report 1
Management's Discussion for the year ended March 31, 2005
U.S. MARKET OVERVIEW
U.S. equity markets rose during the 12 months ending March 31, 2005, with
strongest performance coming in the last three months of 2004 when the S&P 500
Index gained 9.23%. For the full twelve month period, the S&P 500 was up 6.69%.
Mid-cap stocks turned in the best performance over the period, followed by
small-cap stocks, with the large-cap sector posting smaller increases. Overall,
value outperformed growth for the period in both large- and small-cap sectors.
With spiking crude oil prices in the headlines all year long, it was no surprise
that the Energy sector turned in the best performance for the period, followed
by the Utilities and Materials sectors. The Financial sector turned in the worst
performance, but Technology was a close second in terms of overall decline.
There were a number of other issues that dogged the market during the course of
the year, primarily slowing economic growth, disappointing job creation,
inflation fears, and interest rate increases. The Federal Reserve raised its
short-term interest rate target seven times during the year. On the plus side,
the U.S. economy continued steady, if slowing, growth, and corporate earnings
showed healthy increases over the period.
U.S. EQUITY FUNDS PERFORMANCE
In contrast to 2003, investors appeared to be increasing their focus on earnings
as the reporting period unfolded. Evidence of this behavior is the fact that
stocks with higher trading activity and growth characteristics, which typically
deliver inferior earnings, underperformed the broad market during this period.
Given our emphasis on selecting stocks that will produce greater earnings
relative to price than the benchmark, this was a more favorable investment
environment.
While the reward to earnings is the biggest driver of our relative performance
over time, our portfolios have exposures to risk characteristics and industries
that also have an impact on performance. These active exposures are a by-product
of trading off the return opportunities identified by our stock selection models
with the risk of deviating from the benchmark on these dimensions.
TOTAL RETURNS are for the year ended 3/31/05. For performance details see pages
7-10.
<Table>
<Caption>
LAUDUS ROSENBERG U.S. LARGE CAPITALIZATION FUND(1)
- ---------------------------------------------------
AXLIX AXLVX Russell
1000(R)
Institutional shares Investor shares Index
9.66% 9.22% 7.24%
<Caption>
LAUDUS ROSENBERG U.S. LARGE CAPITALIZATION GROWTH FUND(1)
- ---------------------------------------------------------
Russell
REDIX REFIX 1000(R)
Institutional shares Investor shares Growth Index
3.42% 3.14% 1.16%
<Caption>
LAUDUS ROSENBERG U.S. DISCOVERY FUND(1,2)
- ---------------------------------------------------------
RDISX RDIVX Russell
Institutional shares Investor shares 2500(TM) Index
9.98% 9.70% 8.21%
</Table>
<Table>
<Caption>
LAUDUS ROSENBERG U.S. SMALL CAPITALIZATION FUND(1,2)
- -------------------------------------------------------------------
(closed to new investors)
USCIX LIFUX BRSCX Russell
2000(R)
Institutional shares Adviser shares Investor shares Index
9.36% 9.12% 9.00% 5.41%
</Table>
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE PERFORMANCE DATA QUOTED
REPRESENTS PAST PERFORMANCE, AND CURRENT RETURNS MAY BE LOWER OR HIGHER. THE
PERFORMANCE INFORMATION DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A
SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
THE INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. TO
OBTAIN PERFORMANCE INFORMATION CURRENT TO THE MOST RECENT MONTH END, VISIT
WWW.LAUDUSFUNDS.COM.
Total returns include change in share price and reinvestment of distributions.
Total returns reflect the waiver of a portion of a Fund's advisory fees for
certain periods since the inception date. In such instances, and without the
waiver of fees, total returns would have been lower.
Investors cannot invest directly in any index.
(1) Equity securities (stocks) are more volatile and carry more risk than other
forms of investments, including investments in high-grade fixed income
securities. The net asset value per share of this Fund will fluctuate as the
value of the securities in the portfolio changes. Common stocks, and funds
investing in common stocks, generally provide greater return potential when
compared with other types of investments.
(2) Small capitalization funds typically carry additional risks since smaller
companies generally have experienced a greater degree of market volatility.
LAUDUS ROSENBERG U.S. LARGE CAPITALIZATION FUND The U.S. Large Capitalization
Fund Institutional Shares were up 9.66%, outperforming the Russell 1000(R) Index
benchmark return of 7.24% for the reporting period.
From a performance attribution view, active exposure to risk factors,
industries, and residual stock selection all had positive contribution for the
year, with risk factor and industry exposures providing similar contributions,
while
2 Laudus Funds Annual Report
Management's Discussion continued
residual stock specific contributions were somewhat smaller.
The Fund's positions in lower Price-to-Book and Price-to-Earnings stocks, and an
overweight to price momentum (Relative Strength), were the largest contributors
to active performance among risk factors, while a slight Growth overweight and
higher Earnings Variation were the largest detractors.
Among industries, overweight positions in Healthcare & Hospitals and Integrated
Oil, along with underweight positions in IT Hardware, provided the best
contributions. Overweight holdings in Miscellaneous Finance stocks and
underweight positions in the Software industry detracted from return versus the
benchmark, but to a lesser extent.
LAUDUS ROSENBERG U.S. LARGE CAPITALIZATION GROWTH FUND The U.S. Large
Capitalization Growth Fund Institutional Shares were up 3.42%, outperforming the
Russell 1000 Growth(R) Index benchmark return of 1.16% for the reporting period.
From a performance attribution view, active exposure to risk factors,
industries, and residual stock selection all had positive contribution for the
year, with risk factor exposures providing the largest outperformance, followed
by stock specific contributions and then risk factor exposures.
The Fund's positions in lower Price-to-Book and Price-to-Earnings stocks, and an
overweight to price momentum (Relative Strength), were the largest contributors
to active performance among risk factors, while higher Earnings Variation and
lower Trading Activity were the largest detractors.
Among industries, underweight positions in IT Hardware and Drugs &
Pharmaceuticals provided the best
contributions. Overweight holdings in Construction & Homebuilding and
underweight positions in Biotechnology detracted from active performance.
LAUDUS ROSENBERG U.S. DISCOVERY FUND The U.S. Discovery Fund Institutional
Shares were up 9.98%, outperforming the Russell 2500(R) Index benchmark return
of 8.21% for the reporting period.
From a performance attribution view, active exposure to risk factors,
industries, and residual stock selection all had positive contribution for the
year, with risk factor exposures providing the largest outperformance, followed
by industry exposures. Residual stock specific contribution provided a smaller
positive contribution.
The Fund's lower Price-to-Book and Price-to-Earnings and lower Financial
Leverage exposures were the largest contributors to active performance among
risk factors, while higher Earnings Variation and lower Trading Activity were
the largest detractors.
Among industries, underweight positions in IT Hardware combined with greater
than benchmark weights in Oil Distribution and Land & Water Transportation
provided the largest contributions. Underweight in REITs and Software stocks
detracted the most from active performance.
LAUDUS ROSENBERG U.S. SMALL CAPITALIZATION FUND The U.S. Small Capitalization
Fund Institutional Shares were up 9.36%, outperforming the Russell 2000(R) Index
benchmark return of 5.41% for the reporting period.
From a performance attribution view, active exposure to risk factors,
industries, and residual stock selection all had positive contribution for the
fiscal year, with risk factor exposures providing the largest outperformance,
followed by residual stock selection. Industry exposures also provided
significant alpha over the year, but to a lesser extent than other exposures.
The Fund's lower Price-to-Book and Price-to-Earnings and lower Financial
Leverage exposures were the largest contributors to active performance among
risk factors, while higher Earnings Variation and lower Trading Activity were
the largest detractors.
Among industries, underweight positions in IT Hardware combined with
greater-than-benchmark weight in Land & Water Transportation stocks provided the
largest contributions. Underweighting in REITs and Software stocks detracted the
most from active performance.
INTERNATIONAL EQUITY MARKET OVERVIEW
After a weak start at the beginning of 2004, global equity markets ended the
calendar year up strongly. The year-end rally carried into the first quarter of
2005 with most global markets hitting twelve-month highs in dollar-denominated
returns in the month of March. Global equity markets performed well over this
period with many regional indexes posting strong returns. International
small-and mid-cap stocks also performed well, as global small-cap indexes posted
double-digit returns.
Laudus Funds Annual Report 3
Management's Discussion continued
The stories for the year were the rally in the commodity sector and the
continuing increase in U.S. interest rates, which began in June 2004.
Commodity-related industry groups such as Oil Services and Integrated Oil, along
with Basic Materials, provided the best overall returns. A global increase in
merger and acquisition activity also has helped support the equity markets.
Value stocks continued their multi-year rally and outperformed their growth
peers in most markets. The weakness in the dollar over the past year has helped
dollar-based returns but recent dollar strength has muted some full-year
returns. Record high oil prices, higher commodity prices, increasing interest
rates along with rising consumer prices all helped push the market lower, with
global sentiment becoming more restrained by the end of the first quarter of
2005.
After a positive start at the beginning of 2005, the European continent has
shown signs of continuing poor economic performance. Increasing unemployment
levels in both France and Germany, the appreciation of the Euro, and rising oil
prices have contributed to a weak economic outlook for the continent as a whole.
Japan has produced a mixed economic picture for the first part of the year,
although revised economic data for Q4 2004 has increased confidence that Japan
is finally moving out of recession. Japan's proximity to the fast-growing
Chinese economy also should continue to provide a boost to economic activity.
INTERNATIONAL EQUITY FUNDS PERFORMANCE
While the reward to earnings is the biggest driver of our relative performance
over time, our portfolios have exposures to risk characteristics and industries
that will also have an impact on performance. These active exposures are a
by-product of trading off the return opportunities identified by our stock
selection models with the risk of deviating from the benchmark on these
dimensions.
TOTAL RETURNS below are for the year ended 3/31/05. For performance details see
pages 11-14.
<Table>
<Caption>
LAUDUS ROSENBERG INTERNATIONAL EQUITY FUND(1)
- -------------------------------------------------
MSCI-
REQIX RIEIX EAFE(R)
Institutional shares Investor shares Index
14.36% 13.79% 15.49%
<Caption>
LAUDUS ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND(1,2)
- -------------------------------------------------------------
ICSIX RISIX NGSCexUS(R)
Institutional shares Investor shares Index
26.52% 26.16% 24.48%
</Table>
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE PERFORMANCE DATA QUOTED
REPRESENTS PAST PERFORMANCE, AND CURRENT RETURNS MAY BE LOWER OR HIGHER. THE
PERFORMANCE INFORMATION DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A
SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
THE INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. TO
OBTAIN PERFORMANCE INFORMATION CURRENT TO THE MOST RECENT MONTH END, VISIT
WWW.LAUDUSFUNDS.COM.
Total returns include change in share price and reinvestment of distributions.
Total returns reflect the waiver of a portion of a Fund's advisory fees for
certain periods since the inception date. In such instances, and without the
waiver of fees, total returns would have been lower.
Investors cannot invest directly in any index.
(1) International investing involves increased risk and volatility.
(2) Small capitalization funds typically carry additional risks since smaller
companies generally have experienced a greater degree of market volatility.
LAUDUS ROSENBERG INTERNATIONAL EQUITY FUND The International Equity Fund
Institutional Shares were up 14.36%, underperforming the MSCI EAFE(R) Index
benchmark return of 15.49% for the reporting period.
From a performance attribution view, active exposure to risk had a positive
contribution for the fiscal year, while residual stock selection detracted from
the year's overall performance. Among risk factors, the Fund's below-benchmark
Price-to-Book and higher Dividend Yield profile were the largest contributions
to active performance, followed closely by a slightly smaller overall
capitalization than the benchmark.
Among industry groups, overweight positions in Construction Materials and
Homebuilding were positive contributors to returns, which helped offset an
underweight in the Retail industry, the largest detractor from active
performance.
LAUDUS ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND The International
Small Capitalization Fund Institutional Shares were up 26.52%, outperforming the
Nomura Global Small Cap World ex US (NGSCexUS(R)) Index benchmark return of
24.48% for the reporting period. In contrast to 2003, investor focus shifted
towards earnings and fundamental value when compared with the previous year, and
this sentiment towards value helped boost the Fund's performance.
From a performance attribution view, active exposure to risk factors and stock
selection had positive contributions for the year. The Fund's
lower-than-benchmark Price-to-
4 Laudus Funds Annual Report
Management's Discussion continued
Book profile and higher exposure to Relative Strength (a measure of price
momentum) made the largest positive contributions to active performance among
risk factors. The largest offsetting factor was the below-benchmark Beta.
Among industry groups, an overweight position in Basic Minerals and Materials
and underweighting IT Hardware were the largest positive contributors to
returns. An underweight position in Banks and Credit Institutions was the
largest detractor from active performance. With the large number of holdings in
the portfolio, no single stock was a major contributor to returns but
incremental positive performance by a large number of stocks contributed to
outperformance for the full fiscal year.
LONG/SHORT EQUITY FUNDS PERFORMANCE
TOTAL RETURNS below are for the year ended 3/31/05. For performance details see
pages 15-20.
<Table>
<Caption>
LAUDUS ROSENBERG U.S. LARGE/ MID CAPITALIZATION LONG/ SHORT
EQUITY FUND(1)
- -------------------------------------------------------------
90-Day
SSMNX RMNIX Treasury Bills
Institutional shares Investor shares (T-Bills)
5.93% 5.52% 1.86%
<Caption>
LAUDUS ROSENBERG GLOBAL LONG/ SHORT EQUITY FUND(2)
- -------------------------------------------------------------
90-Day
MSMNX RMSIX Treasury Bills
Institutional shares Investor shares (T-Bills)
2.83% 2.50% 1.86%
<Caption>
LAUDUS ROSENBERG VALUE LONG/ SHORT EQUITY FUND(3)
- -------------------------------------------------------------
90-Day
BMNIX BRMIX Treasury Bills
Institutional shares Investor shares (T-Bills)
6.48% 6.12% 1.86%
</Table>
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE PERFORMANCE DATA QUOTED
REPRESENTS PAST PERFORMANCE, AND CURRENT RETURNS MAY BE LOWER OR HIGHER. THE
PERFORMANCE INFORMATION DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A
SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
THE INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. TO
OBTAIN PERFORMANCE INFORMATION CURRENT TO THE MOST RECENT MONTH END, VISIT
WWW.LAUDUSFUNDS.COM.
Total returns include change in share price and reinvestment of distributions.
Total returns reflect the waiver of a portion of a Fund's advisory fees for
certain periods since the inception date. In such instances, and without the
waiver of fees, total returns would have been lower.
Investments in long/short funds are more volatile and risky than some other
forms of investments. Since they have both long and short portfolios, an
investment will involve risks associated with twice the number of investment
decisions made for a typical stock fund. These types of funds typically have a
high portfolio turnover that could increase transaction costs and cause short-
term capital gains to be realized. While it may be the intent of the Manager to
take long positions in stocks that outperform the market and short positions in
stocks that underperform the market, there is no assurance that the Manager will
be successful.
The Funds may sell a security short by borrowing it from a third party and
selling it at the then-current market price. The Funds are obligated to buy the
security on a later date so it can return the security to the lender. Short
sales involve the risk that the Fund will incur a loss by subsequently buying a
security at a higher price than the price at which the Fund previously sold the
security short. Moreover, because the Fund's loss on a short sale arises from
increases in the value of the security sold short, the extent of such loss is
theoretically unlimited.
The Funds use the return that an investor could achieve through an investment in
3-month U.S. Treasury Bills as a benchmark against which to measure the Fund's
performance. AXA Rosenberg attempts to achieve returns for the Fund's
shareholders which exceed the benchmark. An investment in the Fund is different
from an investment in 3-month U.S. Treasury Bills because, among other
differences, U.S. Treasury Bills are backed by the full faith and credit of the
U.S. Government, U.S. Treasury Bills have a fixed rate of return, investors in
U.S. Treasury Bills do not risk losing their investment, and an investment in
the Fund is more volatile than an investment in U.S. Treasury Bills.
(1) Mid capitalization stocks typically carry additional risk, since smaller
companies generally have higher risk of failure and, historically, their
stocks have experienced a greater degree of volatility.
(2) International investing involves increased risk and volatility.
(3) Value-based investments are subject to the risk that the broad market may
not recognize their value.
LAUDUS ROSENBERG U.S. LARGE/MID CAPITALIZATION LONG/SHORT EQUITY FUND The U.S.
Large/Mid Capitalization Long/Short Equity Fund Institutional Shares were up
5.93% for the reporting period, outperforming the benchmark, 90-day T-bills,
which returned 1.86%. The period was favorable to our investment process as the
Fund saw positive returns from both the risk profile and industry exposures, as
well as from residual stock selection. When all elements contribute positively,
we feel confident the market is rewarding earnings and our philosophy of buying
risk-adjusted future earnings at attractive prices.
In this climate, the Fund's exposure to low Price-to-Book and Price-to-Earnings
stocks helped, as did the exposure to high Relative Strength stocks. The Fund
maintained a virtually zero exposure to Beta over the course of the year, which
is an explicit goal. The best performing industries for the Fund were net long
positions in energy-related areas, as well as net short positions in IT
Laudus Funds Annual Report 5
Management's Discussion continued
Hardware and Drugs & Pharmaceuticals. The top individual stock contributor was a
long position in Burlington Northern, while a long position in Pfizer was the
worst contributor.
LAUDUS ROSENBERG GLOBAL LONG/SHORT EQUITY FUND The Global Long/Short Equity Fund
Institutional shares were up 2.83%, outperforming the 90-day T-Bills benchmark
return of 1.86% for the reporting period.
As discussed in the prospectus, the Fund invests in several sub-strategies, each
of which is unique. While we expect each of the sub-strategies to have overall
positive returns individually, we generally do not expect all of them to be
positive at the same time. This builds diversification into the Global
Long/Short Fund and is designed to reduce the overall volatility of the returns.
Since these sub-strategies have different views and select from different
markets, looking at an overall profile can be misleading. But, on this basis,
the Fund earned positive returns from exposure to stocks with lower Price-
to-Book and Price-to-Earnings, as well as those with higher-than-average
Relative Strength. Industry contributions came from long positions in basic
industries such as Energy, Materials, and Transports, as well as net short
positions in IT Hardware and Drugs & Pharmaceuticals. The top individual stock
contributor was a long position in Seaboard, a marine shipping firm, while a
long position in Biogen was the worst contributor.
LAUDUS ROSENBERG VALUE LONG/SHORT EQUITY FUND The Value Long/Short Equity Fund
Institutional Shares were up 6.48%, outperforming the 90-day T-bills benchmark
return of 1.86% for the reporting period.
The period was favorable not only to our investment process, but also to the
kinds of "value" stocks the Fund tends to own. The returns over the period were
attributable largely to the risk composition of the Fund's holdings, especially
the Fund's owning lower Price-to-Book and Price-to-Earnings stocks with
higher-then-average Relative Strength. The Fund also benefited from a
below-market Beta and from holding firms with lower Financial Leverage, which
may be an outcome of the Federal Reserve's raising interest rates.
The Fund's risk composition is not explicitly targeted, but results from the
balance between seeking performance and controlling risk. Industry contributions
were spread among long positions in basic and intermediate-goods industries such
as Energy, Materials, and Transports, as well as net short positions in IT
Hardware and Drugs & Pharmaceuticals. A net short position in REITs hurt as
these vehicles did well amid rising rates. Top performer was a short position in
Krispy Kreme Doughnuts, while a long position in Omnicare was the worst
contributor.
Nothing in this report represents a recommendation of a security by the
investment advisor.
6 Laudus Funds Annual Report
Performance and Fund Facts
Laudus Rosenberg U.S. Large Capitalization Fund as of 3/31/05
<Table>
<Caption>
PERFORMANCE OF A HYPOTHETICAL PERFORMANCE OF A HYPOTHETICAL
$1 MILLION INVESTMENT IN INSTITUTIONAL SHARES(1) $10,000 INVESTMENT IN INVESTOR SHARES(1)
- ----------------------------------------------------------- -----------------------------------------------------------
</Table>
<Table>
<Caption>
INSTITUTIONAL SHARES RUSSELL 1000(R) INDEX
-------------------- ---------------------
- ----------------------------------------------------------- -----------------------------------------------------------
6/19/02 1.0000 1.0000
3/03 0.8322 0.8580
3/04 1.1013 1.1701
3/05 1.2076 1.2548
</Table>
<Table>
<Caption>
INVESTOR SHARES RUSSELL 1000(R) INDEX
--------------- ---------------------
7/31/02 10.000 10.000
3/03 9.358 9.419
3/04 12.342 12.846
3/05 13.480 13.775
</Table>
AVERAGE ANNUAL TOTAL RETURNS(1)
- ------------------------------------------------------------
<Table>
<Caption>
CLASS
AND
INCEPTION SINCE INCEPTION
DATE 1-YEAR INSTITUTIONAL INVESTOR
Institutional
(6/19/02) 9.66% 7.02%
Investor (7/31/02) 9.22% 11.85%
Russell 1000(R) Index 7.24% 7.28% 10.03%
</Table>
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE PERFORMANCE DATA QUOTED
REPRESENTS PAST PERFORMANCE, AND CURRENT RETURNS MAY BE LOWER OR HIGHER. THE
PERFORMANCE INFORMATION DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A
SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
THE INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. TO
OBTAIN PERFORMANCE INFORMATION CURRENT TO THE MOST RECENT MONTH END, VISIT
WWW.LAUDUSFUNDS.COM.
Investors cannot invest directly in any index.
(1) Total returns include change in share price and reinvestment of
distributions. Total returns reflect the waiver of a portion of a Fund's
advisory fees for certain periods since the inception date. In such
instances, and without the waiver of fees, total returns would have been
lower.
<Table>
<Caption>
Institutional Investor
FUND OVERVIEW(2) Shares Shares
- -------------------------------------------------------------
Initial Investment $1 million $2,500
Inception Date 6/19/02 7/31/02
Total Net Assets ($ x 1,000) $44,559 $2,786
Ticker Symbol AXLIX AXLVX
Cusip 51855Q101 51855Q853
NAV $11.79 $11.81
Expense Ratio(3) 0.99% 1.35%
</Table>
<Table>
<Caption>
FUND CHARACTERISTICS(2)
- --------------------------------------------------------
Number of Securities 213
Median Market Capitalization (Wtd., $ x $21,960
1,000,000)
Portfolio Turnover (One year trailing) 127.89%
Price to Earnings (P/E) 17.54
Price to Book (P/B) 2.51
Price to Cash Flow 11.83
Beta 0.9
Return on Equity 15.90%
Five-Year Earnings Growth 16.44%
<Caption>
TOP EQUITY HOLDINGS(2) % of Net Assets
- --------------------------------------------------------
Citigroup, Inc. 3.8%
Johnson & Johnson 3.8%
IBM Corp. 3.3%
Bank of America Corp. 3.3%
ChevronTexaco Corp. 3.0%
ConocoPhillips 2.7%
UnitedHealth Group, Inc. 2.7%
Exxon Mobil Corp. 2.7%
Dell, Inc. 2.6%
General Electric Co. 2.6%
TOTAL 30.5%
PORTFOLIO COMPOSITION(2) % of Net Assets
- --------------------------------------------------------
</Table>
SECTOR WEIGHTINGS
[PIE GRAPH]
<Table>
Financials 22.5
Consumer Discretionary 16.2
Information Technology 13.7
Health Care 12.2
Energy 11.3
Industrials 9.3
Consumer Staples 5.1
Materials 4.9
Utilities 3.1
Telecommunications Services 1.7
</Table>
(2) Portfolio holdings are subject to change and may not represent current or
future holdings.
(3) Reflects contractual limitations by Manager to waive its management fee
and/or bear certain expenses.
Laudus Funds Annual Report 7
Performance and Fund Facts
Laudus Rosenberg U.S. Large Capitalization Growth Fund as of 3/31/05
<Table>
<Caption>
PERFORMANCE OF A HYPOTHETICAL PERFORMANCE OF A HYPOTHETICAL
$1 MILLION INVESTMENT IN INSTITUTIONAL SHARES(1) $10,000 INVESTMENT IN INVESTOR SHARES(1)
- ----------------------------------------------------------- -----------------------------------------------------------
</Table>
<Table>
<Caption>
INSTITUTIONAL SHARES RUSSELL 1000(R) GROWTH INDEX
-------------------- ----------------------------
- ----------------------------------------------------------- -----------------------------------------------------------
6/7/00 1.0000 1.0000
3/01 0.7729 0.6007
3/02 0.7859 0.5887
3/03 0.6077 0.4312
3/04 0.8072 0.5699
3/05 0.8348 0.5765
</Table>
<Table>
<Caption>
INVESTOR SHARES RUSSELL 1000(R) GROWTH INDEX
--------------- ----------------------------
8/15/03 10.000 10.000
3/04 11.450 11.284
3/05 11.810 11.415
</Table>
AVERAGE ANNUAL TOTAL RETURNS(1)
- ------------------------------------------------------------
<Table>
<Caption>
CLASS AND
INCEPTION SINCE INCEPTION
DATE 1-YEAR 3-YEAR INSTITUTIONAL INVESTOR
Institutional
(6/7/00) 3.42% 2.03% -3.68%
Investor (8/15/03) 3.14% n/a 10.76%
Russell 1000(R)
Growth Index 1.16% -0.69% -9.82% 8.48%
</Table>
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE PERFORMANCE DATA QUOTED
REPRESENTS PAST PERFORMANCE, AND CURRENT RETURNS MAY BE LOWER OR HIGHER. THE
PERFORMANCE INFORMATION DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A
SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
THE INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. TO
OBTAIN PERFORMANCE INFORMATION CURRENT TO THE MOST RECENT MONTH END, VISIT
WWW.LAUDUSFUNDS.COM.
Investors cannot invest directly in any index.
(1) Total returns include change in share price and reinvestment of
distributions. Total returns reflect the waiver of a portion of a Fund's
advisory fees for certain periods since the inception date. In such
instances, and without the waiver of fees, total returns would have been
lower.
<Table>
<Caption>
Institutional Investor
FUND OVERVIEW(2) Shares Shares
- -------------------------------------------------------------
Initial Investment $1 million $2,500
Inception Date 6/7/00 8/15/03
Total Net Assets ($ x 1,000) $5,056 $1,894
Ticker Symbol REDIX REFIX
Cusip 51855Q200 51855Q846
NAV $8.07 $8.15
Expense Ratio(3) 0.99% 1.32%
</Table>
<Table>
<Caption>
FUND CHARACTERISTICS(2)
- --------------------------------------------------------
Number of Securities 237
Median Market Capitalization (Wtd., $ x $43,799
1,000,000)
Portfolio Turnover (One year trailing) 77.81%
Price to Earnings (P/E) 19.69
Price to Book (P/B) 3.54
Price to Cash Flow 13.89
Beta 0.96
Return on Equity 20.88%
Five-Year Earnings Growth 18.46%
<Caption>
TOP EQUITY HOLDINGS(2) % of Net Assets
- --------------------------------------------------------
Johnson & Johnson 4.0%
Pfizer, Inc. 2.9%
Procter & Gamble Co. 2.7%
Microsoft Corp. 2.6%
IBM Corp. 2.4%
Dell, Inc. 2.2%
Intel Corp. 2.1%
Wal-Mart Stores, Inc. 1.8%
UnitedHealth Group, Inc. 1.8%
Cisco Systems, Inc. 1.7%
TOTAL 24.2%
PORTFOLIO COMPOSITION(2) % of Net Assets
- --------------------------------------------------------
</Table>
SECTOR WEIGHTINGS
<Table>
Health Care 21.8
Consumer Discretionary 19.8
Information Technology 19.2
Industrials 11.1
Consumer Staples 10.0
Financials 9.5
Materials 4.2
Energy 2.5
Telecommunications Services 1.0
Utilities 0.9
</Table>
(2) Portfolio holdings are subject to change and may not represent current or
future holdings.
(3) Reflects contractual limitations by Manager to waive its management fee
and/or bear certain expenses.
8 Laudus Funds Annual Report
Performance and Fund Facts
Laudus Rosenberg U.S. Discovery Fund as of 3/31/05
<Table>
<Caption>
PERFORMANCE OF A HYPOTHETICAL PERFORMANCE OF A HYPOTHETICAL
$1 MILLION INVESTMENT IN INSTITUTIONAL SHARES(1) $10,000 INVESTMENT IN INVESTOR SHARES(1)
- ----------------------------------------------------------- -----------------------------------------------------------
</Table>
<Table>
<Caption>
INSTITUTIONAL SHARES RUSSELL 2500(TM) INDEX
-------------------- ----------------------
- ----------------------------------------------------------- -----------------------------------------------------------
9/4/01 1.0000 1.0000
3/02 1.1125 1.0862
3/03 0.9586 0.8255
3/04 1.4945 1.3261
3/05 1.6437 1.4350
</Table>
<Table>
<Caption>
INVESTOR SHARES RUSSELL 2500(TM) INDEX
--------------- ----------------------
10/3/01 10.000 10.000
3/02 11.834 12.175
3/03 10.178 9.253
3/04 15.799 14.864
3/05 17.331 16.085
</Table>
AVERAGE ANNUAL TOTAL RETURNS(1)
- ------------------------------------------------------------
<Table>
<Caption>
CLASS AND
INCEPTION SINCE INCEPTION
DATE 1-YEAR 3-YEAR INSTITUTIONAL INVESTOR
Institutional
(9/4/01) 9.98% 13.89% 14.94%
Investor (10/3/01) 9.70% 13.56% 17.06%
Russell 2500(TM)
Index 8.21% 9.73% 10.64% 14.57%
</Table>
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE PERFORMANCE DATA QUOTED
REPRESENTS PAST PERFORMANCE, AND CURRENT RETURNS MAY BE LOWER OR HIGHER. THE
PERFORMANCE INFORMATION DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A
SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
THE INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. TO
OBTAIN PERFORMANCE INFORMATION CURRENT TO THE MOST RECENT MONTH END, VISIT
WWW.LAUDUSFUNDS.COM.
Investors cannot invest directly in any index.
(1) Total returns include change in share price and reinvestment of
distributions. Total returns reflect the waiver of a portion of a Fund's
advisory fees for certain periods since the inception date. In such
instances, and without the waiver of fees, total returns would have been
lower.
<Table>
<Caption>
Institutional Investor
FUND OVERVIEW(2) Shares Shares
- -------------------------------------------------------------
Initial Investment $1 million $2,500
Inception Date 9/4/01 10/3/01
Total Net Assets ($ x 1,000) $256,444 $58,284
Ticker Symbol RDISX RDIVX
Cusip 51855Q309 51855Q838
NAV $15.96 $15.88
Expense Ratio(3) 1.14% 1.49%
</Table>
<Table>
<Caption>
FUND CHARACTERISTICS(2)
- --------------------------------------------------------
Number of Securities 905
Median Market Capitalization (Wtd., $ x $1,862
1,000,000)
Portfolio Turnover (One year trailing) 62.60%
Price to Earnings (P/E) 17.32
Price to Book (P/B) 1.95
Price to Cash Flow 10.53
Beta 1.00
Return on Equity 12.16%
Five-Year Earnings Growth 19.73%
<Caption>
TOP EQUITY HOLDINGS(2) % of Net Assets
- --------------------------------------------------------
Cognizant Tech Solutions 1.3%
Harris Corp. 1.0%
Triad Hospitals, Inc. 1.0%
Crown Castle International 1.0%
Storage Technology 1.0%
Edwards Lifescience Corp. 1.0%
Lam Research Corp. 0.9%
Invitrogen Corp. 0.9%
Grant Prideco, Inc. 0.9%
HCC Insurance Holdings 0.9%
TOTAL 9.9%
PORTFOLIO COMPOSITION(2) % of Net Assets
- --------------------------------------------------------
</Table>
SECTOR WEIGHTINGS
<Table>
Consumer Discretionary 21.4
Financials 18.8
Industrials 18.1
Information Technology 10.8
Health Care 10.6
Materials 7.3
Energy 5.8
Consumer Staples 2.9
Utilities 2.9
Telecommunications Services 1.4
</Table>
(2) Portfolio holdings are subject to change and may not represent current or
future holdings.
(3) Reflects contractual limitations by Manager to waive its management fee
and/or bear certain expenses.
Laudus Funds Annual Report 9
Performance and Fund Facts
Laudus Rosenberg U.S. Small Capitalization Fund as of 3/31/05
PERFORMANCE OF A HYPOTHETICAL
$1 MILLION INVESTMENT IN INSTITUTIONAL SHARES(1)
- ----------------------------------------
(LINE GRAPH)
<Table>
<Caption>
INSTITUTIONAL SHARES RUSSELL 2000(R) INDEX
-------------------- ---------------------
3/31/95 1.0000 1.0000
3/96 1.3568 1.3615
3/97 1.6218 1.4311
3/98 2.3508 2.0323
3/99 1.8675 1.7020
3/00 2.4531 2.3367
3/01 2.4222 1.9785
3/02 3.0016 2.2552
3/03 2.4883 1.6470
3/04 3.9024 2.6893
3/05 4.2677 2.8443
</Table>
PERFORMANCE OF A HYPOTHETICAL
$100,000 INVESTMENT IN ADVISER SHARES(1)
- ----------------------------------------
(LINE GRAPH)
<Table>
<Caption>
ADVISER SHARES RUSSELL 2000(R) INDEX
-------------- ---------------------
1/21/97 1.0000 1.0000
3/98 1.3980 1.3036
3/99 1.1086 1.0917
3/00 1.4523 1.4988
3/01 1.4315 1.2691
3/02 1.7695 1.4466
3/03 1.4625 1.0564
3/04 2.2892 1.7308
3/05 2.4980 1.8244
</Table>
PERFORMANCE OF A HYPOTHETICAL
$10,000 INVESTMENT IN INVESTOR SHARES(1)
- ----------------------------------------
(LINE GRAPH)
<Table>
<Caption>
INVESTOR SHARES RUSSELL 2000(R) INDEX
--------------- ---------------------
10/22/96 10.000 10.000
3/97 10.684 9.857
3/98 15.430 13.998
3/99 12.228 11.723
3/00 16.026 16.095
3/01 15.783 13.628
3/02 19.492 15.533
3/03 16.096 11.344
3/04 25.174 18.585
3/05 27.440 19.591
</Table>
AVERAGE ANNUAL TOTAL RETURNS(1)
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
CLASS AND INCEPTION DATE 1-YEAR 5-YEAR 10-YEAR INSTITUTIONAL ADVISER INVESTOR
Institutional (2/22/89) 9.36% 11.71% 15.62% 14.33%
Adviser (1/21/97) 9.12% 11.46% n/a 11.83%
Investor (10/22/96) 9.00% 11.36% n/a 12.71%
Russell 2000(R) Index 5.41% 4.01% 10.43% 10.55% 8.46% 7.61%
</Table>
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE PERFORMANCE DATA QUOTED
REPRESENTS PAST PERFORMANCE, AND CURRENT RETURNS MAY BE LOWER OR HIGHER. THE
PERFORMANCE INFORMATION DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A
SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
THE INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. TO
OBTAIN PERFORMANCE INFORMATION CURRENT TO THE MOST RECENT MONTH END, VISIT
WWW.LAUDUSFUNDS.COM.
Small capitalization funds typically carry additional risks since smaller
companies generally have experienced a greater degree of market volatility.
Investors cannot invest directly in any index.
(1) Total returns include change in share price and reinvestment of
distributions. Total returns reflect the waiver of a portion of a Fund's
advisory fees for certain periods since the inception date. In such
instances, and without the waiver of fees, total returns would have been
lower.
<Table>
<Caption>
Institutional Adviser Investor
FUND OVERVIEW(2) Shares Shares Shares
- --------------------------------------------------------------
Initial Investment $1 million $100,000 $2,500
Inception Date 2/22/89 1/21/97 10/22/96
Total Net Assets ($ x $948,225 $41,104 $297,927
1,000)
Ticker Symbol USCIX LIFUX BRSCX
Cusip 51855Q408 51855Q739 51855Q820
NAV $13.50 $13.38 $13.30
Expense Ratio 1.09% 1.31% 1.43%
</Table>
<Table>
<Caption>
FUND CHARACTERISTICS(2)
- --------------------------------------------------------
Number of Securities 776
Median Market Capitalization (Wtd., $ x $901
1,000,000)
Portfolio Turnover (One year trailing) 68.09%
Price to Earnings (P/E) 16.91
Price to Book (P/B) 1.77
Price to Cash Flow 10.02
Beta 0.99
Return on Equity 11.11%
Five-Year Earnings Growth 19.13%
<Caption>
TOP EQUITY HOLDINGS(2) % of Net Assets
- --------------------------------------------------------
General Maritime Corp. 1.3%
Ralcorp Holdings, Inc. 1.1%
Cleveland-Cliffs, Inc. 1.1%
Great Lakes Chemical Corp. 1.1%
Walter Inds, Inc. 1.0%
Overseas Shipholding Group 1.0%
Hercules, Inc. 0.9%
Aviall, Inc. 0.9%
MPS Group, Inc. 0.9%
Invacare Corp. 0.9%
TOTAL 10.2%
PORTFOLIO COMPOSITION(2) % of Net Assets
- --------------------------------------------------------
</Table>
SECTOR WEIGHTINGS
<Table>
Industrials 19.3
Consumer Discretionary 18.5
Financials 18.3
Information Technology 11.1
Health Care 10.6
Materials 9.3
Energy 6.0
Consumer Staples 4.0
Utilities 2.5
Telecommunications Services 0.4
</Table>
(2) Portfolio holdings are subject to change and may not represent current or
future holdings.
10 Laudus Funds Annual Report
Performance and Fund Facts
Laudus Rosenberg International Equity Fund as of 3/31/05
PERFORMANCE OF A HYPOTHETICAL
$1 MILLION INVESTMENT IN INSTITUTIONAL SHARES(1)
- ------------------------------------------------------------
(LINE GRAPH)
<Table>
<Caption>
INSTITUTIONAL SHARES MSCI-EAFE INDEX
-------------------- ---------------
6/7/00 1.0000 1.0000
3/01 0.8150 0.7628
3/02 0.7468 0.7010
3/03 0.5925 0.5394
3/04 0.9113 0.8531
3/05 1.0422 0.9852
</Table>
PERFORMANCE OF A HYPOTHETICAL
$10,000 INVESTMENT IN INVESTOR SHARES(1)
- ------------------------------------------------------------
(LINE GRAPH)
<Table>
<Caption>
INVESTOR SHARES MSCI-EAFE
--------------- ---------
12/5/00 10.000 10.000
3/01 9.053 8.684
3/02 8.254 7.980
3/03 6.543 6.141
3/04 10.050 9.711
3/05 11.436 11.216
</Table>
AVERAGE ANNUAL TOTAL RETURNS(1)
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE INCEPTION
CLASS AND INCEPTION DATE 1-YEAR 3-YEAR INSTITUTIONAL INVESTOR
Institutional (6/7/00) 14.36% 11.75% 0.86%
Investor (12/5/00) 13.79% 11.48% 3.16%
MSCI EAFE(R) Index 15.49% 12.06% -0.31% 2.69%
</Table>
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE PERFORMANCE DATA QUOTED
REPRESENTS PAST PERFORMANCE, AND CURRENT RETURNS MAY BE LOWER OR HIGHER. THE
PERFORMANCE INFORMATION DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A
SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
THE INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. TO
OBTAIN PERFORMANCE INFORMATION CURRENT TO THE MOST RECENT MONTH END, VISIT
WWW.LAUDUSFUNDS.COM.
International investing involves increased risk and volatility.
Investors cannot invest directly in any index.
(1) Total returns include change in share price and reinvestment of
distributions. Total returns reflect the waiver of a portion of a Fund's
advisory fees for certain periods since the inception date. In such
instances, and without the waiver of fees, total returns would have been
lower.
<Table>
<Caption>
Institutional Investor
FUND OVERVIEW(2) Shares Shares
- -------------------------------------------------------------
Initial Investment $1 million $2,500
Inception Date 6/7/00 12/5/00
Total Net Assets ($ x 1,000) $16,094 $12,491
Ticker Symbol REQIX RIEIX
Cusip 51855Q507 51855Q812
NAV $9.63 $9.61
Expense Ratio(3) 1.34% 1.72%
</Table>
<Table>
<Caption>
FUND CHARACTERISTICS(2)
- --------------------------------------------------------
Number of Securities 330
Median Market Capitalization (Wtd., $ x $27,387
1,000,000)
Portfolio Turnover (One year trailing) 52.06%
Price to Earnings (P/E) 14.65
Price to Book (P/B) 1.57
Price to Cash Flow 7.34
Beta 0.97
Return on Equity 11.44%
Five-Year Earnings Growth 5.54%
<Caption>
TOP EQUITY HOLDINGS(2) % of Net Assets
- --------------------------------------------------------
Shell Trans & Trading 2.1%
Roche Holding AG 2.0%
Vodafone Group Plc 1.7%
Royal Bank of Scotland 1.6%
ENI SpA 1.6%
Total SA 1.6%
ING Groep NV 1.5%
BNP Paribas SA 1.4%
Barclays Plc 1.4%
Deutsche Telekom AG 1.4%
TOTAL 16.3%
</Table>
(2) Portfolio holdings are subject to change and may not represent current or
future holdings.
(3) Reflects contractual limitations by Manager to waive its management fee
and/or bear certain expenses.
Laudus Funds Annual Report 11
Performance and Fund Facts continued
Laudus Rosenberg International Equity Fund as of 3/31/05
PORTFOLIO COMPOSITION(1) % of Net Assets
- ------------------------------------------------------------
SECTOR WEIGHTINGS
<Table>
Consumer Discretionary 14.8
Consumer Staples 5.5
Energy 11.8
Financials 29.2
Health Care 6.6
Industrials 7.2
Information Technology 1.5
Materials 9.5
Telecommunications Services 8.2
Utilities 5.7
</Table>
PORTFOLIO COMPOSITION(1) % of Net Assets
- ------------------------------------------------------------
COUNTRY WEIGHTINGS
<Table>
United Kingdom 25.9
Japan 21.5
France 9.4
Switzerland 8.6
Germany 6.1
Australia 5.1
Spain 3.8
Italy 3.8
Netherlands 2.8
Sweden 2.6
Hong Kong 1.8
Denmark 1.7
Finland 1.6
Other Countries 5.3
</Table>
(1) Portfolio holdings are subject to change and may not represent current or
future holdings.
12 Laudus Funds Annual Report
Performance and Fund Facts
Laudus Rosenberg International Small Capitalization Fund as of 3/31/05
<Table>
<Caption>
PERFORMANCE OF A HYPOTHETICAL PERFORMANCE OF A HYPOTHETICAL
$1 MILLION INVESTMENT IN INSTITUTIONAL SHARES(1) $10,000 INVESTMENT IN INVESTOR SHARES(1)
- ----------------------------------------------------------- -----------------------------------------------------------
</Table>
<Table>
<Caption>
INSTITUTIONAL SHARES NGSCEXUS INDEX
-------------------- --------------
- ----------------------------------------------------------- -----------------------------------------------------------
9/23/96 1.0000 1.0000
3/97 1.0130 0.9912
3/98 1.0384 0.9958
3/99 0.9467 0.8832
3/00 1.2500 1.0700
3/01 1.1152 0.8999
3/02 1.0617 0.8602
3/03 1.0049 0.7864
3/04 1.7823 1.4171
3/05 2.2550 1.7641
</Table>
<Table>
<Caption>
INVESTOR SHARES NGSCEXUS INDEX
--------------- --------------
10/29/96 10.000 10.000
3/97 10.090 9.909
3/98 10.312 9.955
3/99 9.367 8.830
3/00 12.315 10.697
3/01 10.951 8.996
3/02 10.394 8.599
3/03 9.820 7.862
3/04 17.372 14.167
3/05 21.916 17.635
</Table>
AVERAGE ANNUAL TOTAL RETURNS(1)
- ------------------------------------------------------------
<Table>
<Caption>
CLASS AND
INCEPTION SINCE INCEPTION
DATE 1-YEAR 5-YEAR INSTITUTIONAL INVESTOR
Institutional
(9/23/96) 26.52% 12.52% 10.02%
Investor (10/29/96) 26.16% 12.22% 9.77%
NGSCexUS 24.48% 10.52% 6.89% 6.97%
</Table>
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE PERFORMANCE DATA QUOTED
REPRESENTS PAST PERFORMANCE, AND CURRENT RETURNS MAY BE LOWER OR HIGHER. THE
PERFORMANCE INFORMATION DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A
SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
THE INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. TO
OBTAIN PERFORMANCE INFORMATION CURRENT TO THE MOST RECENT MONTH END, VISIT
WWW.LAUDUSFUNDS.COM.
International investing involves increased risk and volatility.
Small capitalization funds typically carry additional risks since smaller
companies generally have experienced a greater degree of market volatility.
Investors cannot invest directly in any index.
(1) Total returns include change in share price and reinvestment of
distributions. Total returns reflect the waiver of a portion of a Fund's
advisory fees for certain periods since the inception date. In such
instances, and without the waiver of fees, total returns would have been
lower.
<Table>
<Caption>
Institutional Investor
FUND OVERVIEW(2) Shares Shares
- -------------------------------------------------------------
Initial Investment $1 million $2,500
Inception Date 9/23/96 10/29/96
Total Net Assets ($ x 1,000) $270,646 $355,766
Ticker Symbol ICSIX RISIX
Cusip 51855Q606 51855Q796
NAV $16.89 $16.73
Expense Ratio(3) 1.49% 1.83%
</Table>
<Table>
<Caption>
FUND CHARACTERISTICS(2)
- --------------------------------------------------------
Number of Securities 1036
Median Market Capitalization (Wtd., $ x $1,027
1,000,000)
Portfolio Turnover (One year trailing) 59.70%
Price to Earnings (P/E) 18.16
Price to Book (P/B) 1.28
Price to Cash Flow 6.68
Beta 0.89
Return on Equity 7.35%
Five-Year Earnings Growth 4.96%
<Caption>
TOP EQUITY HOLDINGS(2) % of Net Assets
- --------------------------------------------------------
Fresenius AG 0.9%
Fondairia-SAI Spa 0.9%
Ciments Francais 0.8%
Gambro AB 0.8%
Outokumpu Oyj 0.8%
Ats Voest-Alpine AG 0.7%
Inmobiliaria Colonial 0.7%
Swiss Life Holdings 0.7%
Fred Olsen Energy 0.7%
Air France-KLM 0.7%
TOTAL 7.7%
</Table>
(2) Portfolio holdings are subject to change and may not represent current or
future holdings.
(3) Reflects contractual limitations by Manager to waive its management fee
and/or bear certain expenses.
Laudus Funds Annual Report 13
Performance and Fund Facts continued
Laudus Rosenberg International Small Capitalization Fund as of 3/31/05
PORTFOLIO COMPOSITION(1) % of Net Assets
- ------------------------------------------------------------
SECTOR WEIGHTINGS
<Table>
Industrials 22.4
Consumer Discretionary 22.0
Financials 17.3
Materials 13.8
Consumer Staples 6.9
Energy 6.1
Health Care 4.3
Information Technology 3.5
Utilities 2.9
Telecommunications Services 0.8
</Table>
PORTFOLIO COMPOSITION(1) % of Net Assets
- ------------------------------------------------------------
COUNTRY WEIGHTINGS
<Table>
Japan 15.2
United Kingdom 12.1
France 9.3
Italy 8.0
Switzerland 7.2
Canada 6.8
Germany 6.1
Australia 5.6
Spain 5.2
Finland 4.1
Hong Kong 3.6
Denmark 3.4
Sweden 3.2
Other Countries 10.2
</Table>
(1) Portfolio holdings are subject to change and may not represent current or
future holdings.
14 Laudus Funds Annual Report
Performance and Fund Facts
Laudus Rosenberg U.S. Large/Mid Capitalization
Long/Short Equity Fund as of 3/31/05
<Table>
<Caption>
PERFORMANCE OF A HYPOTHETICAL PERFORMANCE OF A HYPOTHETICAL
$1 MILLION INVESTMENT IN INSTITUTIONAL SHARES(1) $10,000 INVESTMENT IN INVESTOR SHARES(1)
- ----------------------------------------------------------- -----------------------------------------------------------
</Table>
<Table>
<Caption>
INSTITUTIONAL SHARES 90-DAY T-BILLS
-------------------- --------------
- ----------------------------------------------------------- -----------------------------------------------------------
10/19/98 1.0000 1.0000
3/99 1.0514 1.0201
3/00 1.1546 1.0705
3/01 1.0994 1.1324
3/02 1.2005 1.1670
3/03 1.3554 1.1848
3/04 1.2718 1.1962
3/05 1.3472 1.2184
</Table>
<Table>
<Caption>
INVESTOR SHARES 90-DAY T-BILLS
--------------- --------------
11/11/98 10.000 10.000
3/99 10.471 10.169
3/00 11.454 10.672
3/01 10.875 11.289
3/02 11.849 11.634
3/03 13.329 11.811
3/04 12.468 11.925
3/05 13.156 12.146
</Table>
AVERAGE ANNUAL TOTAL RETURNS(1)
- ------------------------------------------------------------
<Table>
<Caption>
CLASS AND
INCEPTION SINCE INCEPTION
DATE 1-YEAR 5-YEAR INSTITUTIONAL INVESTOR
Institutional
(10/19/98) 5.93% 3.13% 4.73%
Investor (11/11/98) 5.52% 2.81% 4.39%
90 day T-bills 1.86% 2.65% 3.11% 3.09%
</Table>
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE PERFORMANCE DATA QUOTED
REPRESENTS PAST PERFORMANCE, AND CURRENT RETURNS MAY BE LOWER OR HIGHER. THE
PERFORMANCE INFORMATION DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A
SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
THE INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. TO
OBTAIN PERFORMANCE INFORMATION CURRENT TO THE MOST RECENT MONTH END, VISIT
WWW.LAUDUSFUNDS.COM.
Investments in long/short funds are more volatile and risky than some other
forms of investments. Since they have both long and short portfolios, an
investment will involve risks associated with twice the number of investment
decisions made for a typical stock fund. These types of Funds typically have a
high portfolio turnover that could increase transaction costs and cause
short-term capital gains to be realized. While it may be the intent of the
Manager to take long positions in stocks that outperform the market and short
positions in stocks that underperform the market, there is no assurance that the
Manager will be successful.
The Fund uses the return that an investor could achieve through an investment in
3-month U.S. Treasury Bills as a benchmark against which to measure the Fund's
performance. AXA Rosenberg attempts to achieve returns for the Fund's
shareholders which exceed the benchmark. An investment in the Fund is different
from an investment in 3-month U.S. Treasury Bills because, among other
differences, U.S. Treasury Bills are backed by the full faith and credit of the
U.S. Government, U.S. Treasury Bills have a fixed rate of return, investors in
U.S. Treasury Bills do not risk losing their investment, and an investment in
the Fund is more volatile than an investment in U.S. Treasury Bills.
(1) Total returns include change in share price and reinvestment of
distributions. Total returns reflect the waiver of a portion of a Fund's
advisory fees for certain periods since the inception date. In such
instances, and without the waiver of fees, total returns would have been
lower.
<Table>
<Caption>
Institutional Investor
FUND OVERVIEW(2) Shares Shares
- -------------------------------------------------------------
Initial Investment $1 million $2,500
Inception Date 10/19/98 11/11/98
Total Net Assets ($ x 1,000) $12,312 $12,824
Ticker Symbol SSMNX RMNIX
Cusip 51855Q804 51855Q770
NAV $11.44 $11.46
Expense Ratio(3) 2.94% 3.26%
Expense Ratio(4) 1.24% 1.61%
</Table>
<Table>
<Caption>
FUND CHARACTERISTICS(2) Long Short
- ----------------------------------------------------------
Number of Securities 91 86
Median Market Capitalization $16,611 $14,027
(Wtd., $ x 1,000,000)
Portfolio Turnover (One year 180.14% 166.97%
trailing)
Price to Earnings (P/E) 15.16 32.47
Price to Book (P/B) 2.23 3.47
Price to Cash Flow 10.02 16.58
Beta 0.88 0.92
Return on Equity 16.61% 11.35%
Five-Year Earnings Growth 21.40% 8.41%
</Table>
(2) Portfolio holdings are subject to change and may not represent current or
future holdings.
(3) Reflects contractual limitations by Manager to waive its management fee
and/or bear certain expenses. This amount includes interest expense and
dividend expense on securities sold short.
(4) Reflects contractual limitations by Manager to waive its management fee
and/or bear certain expenses, exclusive of nonrecurring account fees,
extraordinary expenses, interest expense, and dividends on securities sold
short.
Laudus Funds Annual Report 15
Performance and Fund Facts continued
Laudus Rosenberg U.S. Large/Mid Capitalization
Long/Short Equity Fund as of 3/31/05
<Table>
<Caption>
TOP EQUITY HOLDINGS(1) % of Net Assets
Long
- -------------------------------------------------------------
Bank of America Corp. 4.5%
IBM Corp. 4.2%
Occidental Petroleum Corp. 3.9%
Prudential Financial, Inc. 3.8%
Burlington North Santa Fe 3.3%
Aetna, Inc. 3.1%
UnitedHealth Group, Inc. 3.0%
Citigroup, Inc. 2.1%
Wellpoint, Inc. 2.0%
Raytheon Co. 2.0%
TOTAL 31.9%
TOP EQUITY HOLDINGS(1) % of Net Assets Short
- -------------------------------------------------------------
HCA the Health Care Co. -3.4%
Wal-Mart Stores, Inc. -3.1%
Coca Cola Co. -2.7%
Fifth Third Bancorp -2.6%
Oracle Corp. -2.3%
Amgen, Inc. -2.2%
Kimberly-Clark Corp. -2.1%
Paychex, Inc. -2.1%
Kohl's Corp. -2.1%
Ups, Inc., Class B -2.0%
TOTAL -24.6%
</Table>
PORTFOLIO COMPOSITION(1) % of Net Assets
- ------------------------------------------------------------
SECTOR WEIGHTINGS--LONG POSITIONS
<Table>
Financials 22.6
Information Technology 14.7
Consumer Discretionary 14.4
Industrials 13.3
Health Care 10.4
Energy 9.4
Materials 6.0
Consumer Staples 4.5
Utilities 4.1
Telecommunications Services 0.6
</Table>
PORTFOLIO COMPOSITION(1) % of Net Assets
- ------------------------------------------------------------
SECTOR WEIGHTINGS--SHORT POSITIONS
<Table>
Financials 23.0
Consumer Discretionary 17.7
Information Technology 16.5
Health Care 16.3
Industrials 8.7
Consumer Staples 6.3
Utilities 5.6
Materials 3.8
Energy 2.1
</Table>
(1) Portfolio holdings are subject to change and may not represent current or
future holdings.
16 Laudus Funds Annual Report
Performance and Fund Facts
Laudus Rosenberg Global Long/Short Equity Fund as of 3/31/05
<Table>
<Caption>
PERFORMANCE OF A HYPOTHETICAL PERFORMANCE OF A HYPOTHETICAL
$1 MILLION INVESTMENT IN INSTITUTIONAL SHARES(1) $10,000 INVESTMENT IN INVESTOR SHARES(1)
- ----------------------------------------------------------- -----------------------------------------------------------
</Table>
<Table>
<Caption>
INSTITUTIONAL SHARES 90-DAY T-BILLS
-------------------- --------------
- ----------------------------------------------------------- -----------------------------------------------------------
9/29/00 1.0000 1.0000
3/01 0.9644 1.0287
3/02 1.0821 1.0601
3/03 1.2655 1.0763
3/04 1.2047 1.0866
3/05 1.2388 1.1068
</Table>
<Table>
<Caption>
INVESTOR SHARES 90-DAY T-BILLS
--------------- --------------
8/23/01 10.000 10.000
3/02 10.358 10.168
3/03 12.075 10.323
3/04 11.462 10.423
3/05 11.748 10.616
</Table>
AVERAGE ANNUAL TOTAL RETURNS(1)
- ------------------------------------------------------------
<Table>
<Caption>
CLASS AND
INCEPTION SINCE INCEPTION
DATE 1-YEAR 3-YEAR INSTITUTIONAL INVESTOR
Institutional
(9/29/00) 2.83% 4.61% 4.87%
Investor (8/23/01) 2.50% 4.29% 4.57%
90 day T-bills 1.86% 1.46% 2.28% 1.68%
</Table>
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE PERFORMANCE DATA QUOTED
REPRESENTS PAST PERFORMANCE, AND CURRENT RETURNS MAY BE LOWER OR HIGHER. THE
PERFORMANCE INFORMATION DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A
SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
THE INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. TO
OBTAIN PERFORMANCE INFORMATION CURRENT TO THE MOST RECENT MONTH END, VISIT
WWW.LAUDUSFUNDS.COM.
Investments in long/short funds are more volatile and risky than some other
forms of investments. Since they have both long and short portfolios, an
investment will involve risks associated with twice the number of investment
decisions made for a typical stock fund. These types of Funds typically have a
high portfolio turnover that could increase transaction costs and cause
short-term capital gains to be realized. While it may be the intent of the
Manager to take long positions in stocks that outperform the market and short
positions in stocks that underperform the market, there is no assurance that the
Manager will be successful.
The Fund uses the return that an investor could achieve through an investment in
3-month U.S. Treasury Bills as a benchmark against which to measure the Fund's
performance. AXA Rosenberg attempts to achieve returns for the Fund's
shareholders which exceed the benchmark. An investment in the Fund is different
from an investment in 3-month U.S. Treasury Bills because, among other
differences, U.S. Treasury Bills are backed by the full faith and credit of the
U.S. Government, U.S. Treasury Bills have a fixed rate of return, investors in
U.S. Treasury Bills do not risk losing their investment, and an investment in
the Fund is more volatile than an investment in U.S. Treasury Bills.
International investing involves increased risk and volatility.
(1) Total returns include change in share price and reinvestment of
distributions. Total returns reflect the waiver of a portion of a Fund's
advisory fees for certain periods since the inception date. In such
instances, and without the waiver of fees, total returns would have been
lower.
<Table>
<Caption>
Institutional Investor
FUND OVERVIEW(2) Shares Shares
- -------------------------------------------------------------
Initial Investment $1 million $2,500
Inception Date 9/29/00 8/23/01
Total Net Assets ($ x 1,000) $15,140 $6,094
Ticker Symbol MSMNX RMSIX
Cusip 51855Q879 51855Q754
NAV $11.62 $11.49
Expense Ratio(3) 3.82% 4.26%
Expense Ratio(4) 1.99% 2.34%
</Table>
<Table>
<Caption>
FUND CHARACTERISTICS(2) Long Short
- -----------------------------------------------------------
Number of Securities 684 590
Median Market Capitalization $7,679 $7,354
(Wtd., $ x 1,000,000)
Portfolio Turnover (One year 152.24% 150.83%
trailing)
Price to Earnings (P/E) 18.42 31.21
Price to Book (P/B) 2.14 3.03
Price to Cash Flow 10.43 13.66
Beta 1.02 1.02
Return on Equity 12.69% 10.16%
Five-Year Earnings Growth 13.66% 6.33%
</Table>
(2) Portfolio holdings are subject to change and may not represent current or
future holdings.
(3) Reflects contractual limitations by Manager to waive its management fee
and/or bear certain expenses. This amount includes interest expense and
dividend expense on securities sold short.
(4) Reflects contractual limitations by Manager to waive its management fee
and/or bear certain expenses, exclusive of nonrecurring account fees,
extraordinary expenses, interest expense and dividends on securities sold
short.
Laudus Funds Annual Report 17
Performance and Fund Facts continued
Laudus Rosenberg Global Long/Short Equity Fund as of 3/31/05
<Table>
<Caption>
TOP EQUITY HOLDINGS(1) % of Net Assets Long
- -------------------------------------------------------------
UnitedHealth Group, Inc. 1.2%
Johnson & Johnson 1.1%
Marvell Tech Group Ltd. 1.0%
IBM Corp. 0.9%
Bank of America Corp. 0.9%
Avon Products, Inc. 0.8%
J.C. Penney Co., Inc. 0.7%
Aetna, Inc. 0.7%
General Electric Co. 0.7%
Fedex Corp. 0.7%
TOTAL 8.7%
TOP EQUITY HOLDINGS(1) % of Net Assets Short
- -------------------------------------------------------------
Coca Cola Co. -1.5%
Wal-Mart Stores, Inc. -1.2%
Schlumberger Ltd. -1.0%
Automatic Data Products -0.9%
Fifth Third Bancorp -0.8%
Paychex, Inc. -0.7%
Kohl's Corp. -0.7%
Progressive Corp.-Ohio -0.6%
Intuit, Inc. -0.6%
Linear Technology Corp. -0.6%
TOTAL -8.6%
</Table>
PORTFOLIO COMPOSITION(1) % of Net Assets
- ------------------------------------------------------------
SECTOR WEIGHTINGS--LONG HOLDINGS
<Table>
Financials 19.4
Consumer Discretionary 18.4
Industrials 15.1
Health Care 10.8
Information Technology 8.7
Energy 7.6
Consumer Staples 6.6
Materials 6.3
Utilities 4.9
Telecommunications Services 2.2
</Table>
PORTFOLIO COMPOSITION(1) % of Net Assets
- ------------------------------------------------------------
COUNTRY WEIGHTINGS--LONG HOLDINGS
<Table>
United States 72.7
United Kingdom 9.4
France 4.1
Germany 3.1
Italy 2.6
Switzerland 1.9
Spain 1.7
Sweden 1.0
Norway 0.9
Finland 0.8
Netherlands 0.7
Denmark 0.4
Belgium 0.4
Austria 0.3
</Table>
PORTFOLIO COMPOSITION(1) % of Net Assets
- ------------------------------------------------------------
SECTOR WEIGHTINGS--SHORT POSITIONS
<Table>
Financials 22.5
Consumer Discretionary 22.3
Health Care 15.5
Information Technology 13.7
Industrials 9.3
Consumer Staples 6.2
Utilities 4.3
Materials 4.1
Energy 1.2
Telecommunications Services 0.9
</Table>
PORTFOLIO COMPOSITION(1) % of Net Assets
- ------------------------------------------------------------
COUNTRY WEIGHTINGS--SHORT POSITIONS
<Table>
United States 71.7
United Kingdom 10.3
France 3.1
Germany 2.5
Italy 2.5
Netherlands 2.0
Switzerland 1.7
Finland 1.5
Belgium 1.3
Denmark 0.9
Austria 0.8
Spain 0.5
Sweden 0.5
Norway 0.4
Ireland 0.3
</Table>
(1) Portfolio holdings are subject to change and may not represent current or
future holdings.
18 Laudus Funds Annual Report
Performance and Fund Facts
Laudus Rosenberg Value Long/Short Equity Fund as of 3/31/05
<Table>
<Caption>
PERFORMANCE OF A HYPOTHETICAL PERFORMANCE OF A HYPOTHETICAL
$1 MILLION INVESTMENT IN INSTITUTIONAL SHARES(1) $10,000 INVESTMENT IN INVESTOR SHARES(1)
- ----------------------------------------------------------- -----------------------------------------------------------
</Table>
<Table>
<Caption>
INSTITUTIONAL SHARES 90-DAY T-BILLS
-------------------- --------------
- ----------------------------------------------------------- -----------------------------------------------------------
12/16/97 1.0000 1.0000
3/98 0.9970 1.0151
3/99 0.9241 1.0636
3/00 0.7936 1.1162
3/01 0.9202 1.1807
3/02 1.0447 1.2168
3/03 1.2219 1.2354
3/04 1.1508 1.2472
3/05 1.2254 1.2704
</Table>
<Table>
<Caption>
INVESTOR SHARES 90-DAY T-BILLS
--------------- --------------
12/18/97 10.000 10.000
3/98 9.960 10.151
3/99 9.197 10.636
3/00 7.872 11.162
3/01 9.091 11.807
3/02 10.295 12.168
3/03 11.998 12.354
3/04 11.285 12.472
3/05 11.976 12.704
</Table>
AVERAGE ANNUAL TOTAL RETURNS(1)
- ------------------------------------------------------------
<Table>
<Caption>
CLASS AND
INCEPTION SINCE INCEPTION
DATE 1-YEAR 5-YEAR INSTITUTIONAL INVESTOR
Institutional
(12/16/97) 6.48% 9.08% 2.83%
Investor (12/18/97) 6.12% 8.75% 2.50%
90 day T-bills 1.86% 2.65% 3.34% 3.34%
</Table>
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE PERFORMANCE DATA QUOTED
REPRESENTS PAST PERFORMANCE, AND CURRENT RETURNS MAY BE LOWER OR HIGHER. THE
PERFORMANCE INFORMATION DOES NOT REFLECT THE DEDUCTION OF TAXES THAT A
SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
THE INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. TO
OBTAIN PERFORMANCE INFORMATION CURRENT TO THE MOST RECENT MONTH END, VISIT
WWW.LAUDUSFUNDS.COM.
Investments in long/short funds are more volatile and risky than some other
forms of investments. Since they have both long and short portfolios, an
investment will involve risks associated with twice the number of investment
decisions made for a typical stock fund. These types of Funds typically have a
high portfolio turnover that could increase transaction costs and cause
short-term capital gains to be realized. While it may be the intent of the
Manager to take long positions in stocks that outperform the market and short
positions in stocks that underperform the market, there is no assurance that the
Manager will be successful.
The Fund uses the return that an investor could achieve through an investment in
3-month U.S. Treasury Bills as a benchmark against which to measure the Fund's
performance. AXA Rosenberg attempts to achieve returns for the Fund's
shareholders which exceed the benchmark. An investment in the Fund is different
from an investment in 3-month U.S. Treasury Bills because, among other
differences, U.S. Treasury Bills are backed by the full faith and credit of the
U.S. Government, U.S. Treasury Bills have a fixed rate of return, investors in
U.S. Treasury Bills do not risk losing their investment, and an investment in
the Fund is more volatile than an investment in U.S. Treasury Bills.
(1) Total returns include change in share price and reinvestment of
distributions. Total returns reflect the waiver of a portion of a Fund's
advisory fees for certain periods since the inception date. In such
instances, and without the waiver of fees, total returns would have been
lower.
<Table>
<Caption>
Institutional Investor
FUND OVERVIEW(2) Shares Shares
- -------------------------------------------------------------
Initial Investment $1 million $2,500
Inception Date 12/16/97 12/18/97
Total Net Assets ($ x 1,000) $102,974 $34,930
Ticker Symbol BMNIX BRMIX
Cusip 51855Q861 51855Q762
NAV $10.51 $10.41
Expense Ratio(3) 2.98% 3.30%
Expense Ratio(4) 1.74% 2.06%
</Table>
<Table>
<Caption>
FUND CHARACTERISTICS(2) Long Short
- -----------------------------------------------------------
Number of Securities 677 508
Median Market Capitalization $2,065 $2,160
(Wtd., $ x 1,000,000)
Portfolio Turnover (One year 111.19% 127.18%
trailing)
Price to Earnings (P/E) 17.50 92.04
Price to Book (P/B) 1.95 2.74
Price to Cash Flow 10.09 17.81
Beta 1.04 1.16
Return on Equity 12.20% 2.95%
Five-Year Earnings Growth 19.53% 6.34%
</Table>
(2) Portfolio holdings are subject to change and may not represent current or
future holdings.
(3) Reflects contractual limitations by Manager to waive its management fee
and/or bear certain expenses. This amount includes interest expense and
dividend expense on securities sold short.
(4) Reflects contractual limitations by Manager to waive its management fee
and/or bear certain expenses, exclusive of nonrecurring account fees,
extraordinary expenses, interest expense, and dividends on securities sold
short.
Laudus Funds Annual Report 19
Performance and Fund Facts continued
Laudus Rosenberg Value Long/Short Equity Fund as of 3/31/05
<Table>
<Caption>
TOP EQUITY HOLDINGS(1) % of Net Assets Long
- -------------------------------------------------------------
Pulte Homes, Inc. 0.9%
Harris Corp. 0.8%
Verisign, Inc. 0.8%
Telephone & Data Systems 0.8%
General Maritime Corp. 0.7%
Cognizant Tech Solutions 0.7%
Parexel International 0.7%
Marvell Tech Group Ltd. 0.7%
Ryland Group, Inc. 0.7%
Nisource, Inc. 0.7%
TOTAL 7.5%
TOP EQUITY HOLDINGS(1) % of Net Assets Short
- -------------------------------------------------------------
Mercury Interactive Corp. -1.0%
El Paso Corp. -0.8%
DTE Energy Co. -0.8%
National Semiconductor Corp. -0.8%
Prologis -0.8%
Whole Foods Market, Inc. -0.8%
Kinder Morgan, Inc. -0.7%
Carmax, Inc. -0.7%
DPL, Inc. -0.7%
Plum Creek Timber Co., Inc. -0.7%
TOTAL -7.8%
</Table>
PORTFOLIO COMPOSITION(1) % of Net Assets
- ------------------------------------------------------------
SECTOR WEIGHTINGS--LONG HOLDINGS
<Table>
Consumer Discretionary 23.2
Financials 20.3
Industrials 17.4
Health Care 11.5
Information Technology 11.0
Materials 5.0
Consumer Staples 3.7
Energy 3.6
Utilities 2.9
Telecommunications Services 1.4
</Table>
PORTFOLIO COMPOSITION(1) % of Net Assets
- ------------------------------------------------------------
SECTOR WEIGHTINGS--SHORT POSITIONS
<Table>
Financials 24.6
Consumer Discretionary 20.2
Information Technology 15.7
Health Care 14.2
Industrials 12.4
Utilities 5.4
Materials 4.0
Consumer Staples 2.9
Telecommunications Services 0.6
</Table>
(1) Portfolio holdings are subject to change and may not represent current or
future holdings.
20 Laudus Funds Annual Report
Fund Expenses (Unaudited)
EXAMPLES FOR A $1,000 INVESTMENT
As a fund shareholder, you incur two types of costs: transaction costs, such as
redemption fees; and, ongoing costs, such as management fees, transfer agent and
shareholder services fees, and other fund expenses.
The expense examples below are intended to help you understand your ongoing cost
(in dollars) of investing in a fund and to compare this cost with the ongoing
cost of investing in other mutual funds. These examples are based on an
investment of $1,000 invested for six-months beginning October 1, 2004 and held
through March 31, 2005.
ACTUAL RETURN lines in the table below provide information about actual account
values and actual expenses. You may use this information, together with the
amount you invested, to estimate the expenses that you paid over the period. To
do so, simply divide your account value by $1,000 (for example, an $8,600
account value / $1,000 = 8.6), then multiply the result by the number given for
your fund or share class under the heading entitled "Expenses Paid During
Period."
HYPOTHETICAL RETURN lines in the table below provide information about
hypothetical account values and hypothetical expenses based on a fund's share
classes' actual expense ratios and an assumed return of 5% per year before
expenses. Because the return used is not an actual return, it may not be used to
estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the
fund and other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only, and do not reflect any transactional costs, such as
redemption fees. If these transactional costs were included, your costs would
have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES
EXPENSE RATIO(1) ACCOUNT VALUE ACCOUNT VALUE PAID DURING PERIOD (2)
(Annualized) at 10/1/04 at 3/31/05 10/1/04 - 3/31/05
- ---------------------------------------------------------------------------------------------------------------------------------
LAUDUS ROSENBERG U.S. LARGE CAPITALIZATION FUND
Institutional Shares 0.99%
Actual Return $1,000.00 $1,107.70 $ 5.20
Hypothetical 5% Return $1,000.00 $1,020.00 $ 4.99
Investor Shares 1.37%
Actual Return $1,000.00 $1,105.30 $ 7.19
Hypothetical 5% Return $1,000.00 $1,018.10 $ 6.89
- ---------------------------------------------------------------------------------------------------------------------------------
LAUDUS ROSENBERG U.S. LARGE CAPITALIZATION
GROWTH FUND
Institutional Shares 0.99%
Actual Return $1,000.00 $1,057.10 $ 5.08
Hypothetical 5% Return $1,000.00 $1,020.00 $ 4.99
Investor Shares 1.34%
Actual Return $1,000.00 $1,055.40 $ 6.87
Hypothetical 5% Return $1,000.00 $1,018.25 $ 6.74
- ---------------------------------------------------------------------------------------------------------------------------------
LAUDUS ROSENBERG U.S. DISCOVERY FUND
Institutional Shares 1.14%
Actual Return $1,000.00 $1,120.40 $ 6.03
Hypothetical 5% Return $1,000.00 $1,019.25 $ 5.74
Investor Shares 1.50%
Actual Return $1,000.00 $1,118.40 $ 7.92
Hypothetical 5% Return $1,000.00 $1,017.45 $ 7.54
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Based on the most recent six-month expense ratio; may differ from the
expense ratio provided in Financial Highlights.
(2) Expenses for each fund or share class are equal to that fund's or share
class' annualized expense ratio, multiplied by the average account value for
the hypothetical account over the period, multiplied by 182 days of the
period, and divided by 365 days of the fiscal year.
Laudus Funds Annual Report 21
<Table>
<Caption>
BEGINNING ENDING EXPENSES
EXPENSE RATIO(1) ACCOUNT VALUE ACCOUNT VALUE PAID DURING PERIOD (2)
(Annualized) at 10/1/04 at 3/31/05 10/1/04 - 3/31/05
- ---------------------------------------------------------------------------------------------------------------------------------
LAUDUS ROSENBERG U.S. SMALL CAPITALIZATION FUND
Institutional Shares 1.10%
Actual Return $1,000.00 $1,109.70 $ 5.79
Hypothetical 5% Return $1,000.00 $1,019.45 $ 5.54
Adviser Shares 1.28%
Actual Return $1,000.00 $1,108.10 $ 6.73
Hypothetical 5% Return $1,000.00 $1,018.50 $ 6.44
Investor Shares 1.45%
Actual Return $1,000.00 $1,107.00 $ 7.62
Hypothetical 5% Return $1,000.00 $1,017.70 $ 7.29
- ---------------------------------------------------------------------------------------------------------------------------------
LAUDUS ROSENBERG INTERNATIONAL EQUITY FUND
Institutional Shares 1.34%
Actual Return $1,000.00 $1,147.70 $ 7.18
Hypothetical 5% Return $1,000.00 $1,018.25 $ 6.74
Investor Shares 1.72%
Actual Return $1,000.00 $1,146.00 $ 9.20
Hypothetical 5% Return $1,000.00 $1,016.36 $ 8.65
- ---------------------------------------------------------------------------------------------------------------------------------
LAUDUS ROSENBERG INTERNATIONAL SMALL CAPITALIZATION
FUND
Institutional Shares 1.49%
Actual Return $1,000.00 $1,253.50 $ 8.37
Hypothetical 5% Return $1,000.00 $1,017.50 $ 7.49
Investor Shares 1.84%
Actual Return $1,000.00 $1,250.70 $10.32
Hypothetical 5% Return $1,000.00 $1,015.76 $ 9.25
- ---------------------------------------------------------------------------------------------------------------------------------
LAUDUS ROSENBERG U.S. LARGE/MID CAPITALIZATION
LONG/SHORT EQUITY FUND
Institutional Shares 2.99%
Actual Return $1,000.00 $1,070.20 $15.43
Hypothetical 5% Return $1,000.00 $1,010.02 $14.98
Investor Shares 3.29%
Actual Return $1,000.00 $1,068.00 $16.96
Hypothetical 5% Return $1,000.00 $1,008.53 $16.47
- ---------------------------------------------------------------------------------------------------------------------------------
LAUDUS ROSENBERG GLOBAL LONG/SHORT EQUITY FUND
Institutional Shares 3.43%
Actual Return $1,000.00 $1,039.40 $17.44
Hypothetical 5% Return $1,000.00 $1,007.83 $17.17
Investor Shares 3.81%
Actual Return $1,000.00 $1,037.00 $19.35
Hypothetical 5% Return $1,000.00 $1,005.93 $19.05
- ---------------------------------------------------------------------------------------------------------------------------------
LAUDUS ROSENBERG VALUE LONG/SHORT EQUITY FUND
Institutional Shares 2.98%
Actual Return $1,000.00 $1,042.70 $15.18
Hypothetical 5% Return $1,000.00 $1,010.07 $14.93
Investor Shares 3.34%
Actual Return $1,000.00 $1,041.00 $17.00
Hypothetical 5% Return $1,000.00 $1,008.28 $16.72
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
(1) Based on the most recent six-month expense ratio; may differ from the
expense ratio provided in Financial Highlights.
(2) Expenses for each fund or share class are equal to that fund's or share
class' annualized expense ratio, multiplied by the average account value for
the hypothetical account over the period, multiplied by 182 days of the
period, and divided by 365 days of the fiscal year.
22 Laudus Funds Annual Report
Financial Statements
Statement of Portfolio Investments
LAUDUS ROSENBERG U.S. LARGE CAPITALIZATION FUND as of 3/31/05
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK - 99.2%
AGRICULTURE, FOOD & BEVERAGE - 0.7%
6,600 Archer-Daniels-Midland Co. ....... $ 162,228
4,700 Pepsi Bottling Group, Inc. ....... 130,895
2,200 PepsiAmericas, Inc. .............. 49,852
-----------
342,975
-----------
AUTOS - 1.2%
2,200 Autoliv, Inc. .................... 104,830
1,800 BorgWarner, Inc. ................. 87,624
5,000 PACCAR, Inc. ..................... 361,950
-----------
554,404
-----------
BANKS & CREDIT INSTITUTIONS - 8.8%
35,000 Bank of America Corp. ............ 1,543,500
1,600 Bank of Hawaii Corp. ............. 72,416
18,100 Bank of New York Co., Inc. ....... 525,805
3,500 Comerica, Inc. ................... 192,780
3,000 Doral Financial Corp. ............ 65,670
2,900 Independence Community Bank
Corp............................ 113,100
14,200 National City Corp. .............. 475,700
8,900 PNC Financial Services Group...... 458,172
700 Sovereign Bancorp, Inc. .......... 15,512
6,500 SunTrust Banks, Inc. ............. 468,455
300 U.S. Bancorp...................... 8,646
1,800 UnionBanCal Corp. ................ 110,250
900 Wachovia Corp. ................... 45,819
1,100 Wells Fargo & Co. ................ 65,780
-----------
4,161,605
-----------
BASIC MINERALS & METALS - 1.9%
400 Harsco Corp. ..................... 23,844
1,300 IPSCO, Inc. ...................... 66,300
4,800 Nucor Corp. ...................... 276,288
3,100 Phelps Dodge Corp. ............... 315,363
900 Precision Castparts Corp. ........ 69,309
3,300 United States Steel Corp. ........ 167,805
-----------
918,909
-----------
BEER, LIQUOR & TOBACCO - 2.2%
11,900 Altria Group, Inc. ............... 778,141
4,900 UST, Inc. ........................ 253,330
-----------
1,031,471
-----------
BIOTECHNOLOGY - 0.2%
1,600 Invitrogen Corp. *................ 110,720
-----------
CELLULAR & WIRELESS - 1.7%
5,700 Nextel Partners, Inc., Class A
*............................... 125,172
2,000 NII Holdings, Inc. *.............. 115,000
17,200 SBC Communications, Inc. ......... 407,468
1,900 Telephone & Data Systems, Inc. ... 155,040
-----------
802,680
-----------
CHEMICALS & RUBBER - 1.8%
2,700 Agrium, Inc. ..................... 49,275
2,200 Cabot Corp. ...................... 73,546
1,000 Dow Chemical Co. ................. 49,850
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, CHEMICALS & RUBBER continued
1,700 Eastman Chemical Co. ............. $ 100,300
2,500 Methanex Corp. ................... 48,575
2,200 NOVA Chemicals Corp. ............. 94,490
2,800 PPG Industries, Inc. ............. 200,256
3,300 RPM International, Inc. .......... 60,324
4,000 Sherwin-Williams Co. ............. 175,960
-----------
852,576
-----------
COMMERCIAL AIRCRAFT & COMPONENTS - 0.5%
5,300 Rockwell Collins, Inc. ........... 252,227
-----------
CONSTRUCTION & HOMEBUILDING - 1.7%
2,533 D.R. Horton, Inc. ................ 74,065
1,100 Hovnanian Enterprises, Inc., Class
A *............................. 56,100
1,200 KB HOME........................... 140,952
1,170 M.D.C. Holdings, Inc. ............ 81,491
3,100 Pulte Homes, Inc. ................ 228,252
1,600 Ryland Group, Inc. ............... 99,232
1,700 Toll Brothers, Inc. *............. 134,045
-----------
814,137
-----------
CONSTRUCTION MATERIALS - 0.3%
2,900 Vulcan Materials Co. ............. 164,807
-----------
CONSUMER DURABLES - 0.5%
2,900 Brunswick Corp. .................. 135,865
1,600 Polaris Industries, Inc. ......... 112,368
-----------
248,233
-----------
DRUGS & PHARMACEUTICALS - 0.4%
200 Dade Behring Holdings, Inc. *..... 11,786
7,600 Pfizer, Inc. ..................... 199,652
-----------
211,438
-----------
ELECTRIC UTILITIES - 2.7%
800 Alliant Energy Corp. ............. 21,424
4,900 Constellation Energy Group,
Inc. ........................... 253,330
8,900 Edison International.............. 309,008
900 PG&E Corp. ....................... 30,690
7,300 TXU Corp. ........................ 581,299
2,800 Westar Energy, Inc. .............. 60,592
1,500 Xcel Energy, Inc. ................ 25,770
-----------
1,282,113
-----------
FINANCIAL INVESTMENTS - 2.8%
2,800 American Capital Strategies
Ltd. ........................... 87,948
33,800 General Electric Co. ............. 1,218,828
-----------
1,306,776
-----------
FOREST PRODUCTS & PAPER - 0.7%
300 Bemis Co., Inc. .................. 9,336
1,300 Louisiana-Pacific Corp. .......... 32,682
4,400 Weyerhaeuser Co. ................. 301,400
-----------
343,418
-----------
FURNITURE & HOUSEHOLD ITEMS - 0.2%
4,700 Hasbro, Inc. ..................... 96,115
-----------
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 23
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg U.S. Large Capitalization Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK continued
GAS & OTHER PUBLIC UTILITIES - 0.4%
8,700 NiSource, Inc. ................... $ 198,273
-----------
GOVERNMENT AIRCRAFT & DEFENSE - 1.3%
2,000 Boeing Co. ....................... 116,920
200 General Dynamics Corp. ........... 21,410
11,300 Raytheon Co. ..................... 437,310
300 Textron, Inc. .................... 22,386
-----------
598,026
-----------
HEALTH CARE & HOSPITAL - 5.0%
9,400 Aetna, Inc. ...................... 704,530
3,500 Health Net, Inc. *................ 114,485
5,300 Humana, Inc. *.................... 169,282
1,800 Triad Hospitals, Inc. *........... 90,180
13,400 UnitedHealth Group, Inc. ......... 1,278,092
-----------
2,356,569
-----------
INFORMATION & SERVICES - 2.6%
2,500 CheckFree Corp. *................. 101,900
300 Laureate Education, Inc. *........ 12,837
1,700 Moody's Corp. .................... 137,462
1,600 Pharmaceutical Product
Development, Inc. *............. 77,520
15,800 Prudential Financial, Inc. ....... 906,920
-----------
1,236,639
-----------
INSTRUMENTS - 5.8%
1,900 Bausch & Lomb, Inc. .............. 139,270
700 Beckman Coulter, Inc. ............ 46,515
3,100 C.R. Bard, Inc. .................. 211,048
500 Cooper Cos., Inc. ................ 36,450
2,200 Edwards Lifesciences Corp. *...... 95,084
26,700 Johnson & Johnson................. 1,793,172
5,800 Johnson Controls, Inc. ........... 323,408
3,900 PerkinElmer, Inc. ................ 80,457
400 Respironics, Inc. *............... 23,308
-----------
2,748,712
-----------
INSURANCE - 5.5%
7,400 ACE Ltd. ......................... 305,398
2,900 Allstate Corp. ................... 156,774
3,200 Ambac Financial Group, Inc. ...... 239,200
1,000 American International Group,
Inc. ........................... 55,410
5,000 Chubb Corp. ...................... 396,350
1,500 Everest Re Group Ltd. ............ 127,665
2,810 Fidelity National Financial,
Inc. ........................... 92,561
1,800 Hartford Financial Services Group,
Inc............................. 123,408
2,100 HCC Insurance Holdings, Inc. ..... 75,936
1,200 MetLife, Inc. .................... 46,920
5,850 Old Republic International
Corp. .......................... 136,247
3,000 PacifiCare Health Systems, Inc.
*............................... 170,760
2,700 Radian Group, Inc. ............... 128,898
1,100 StanCorp Financial Group, Inc. ... 93,258
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, INSURANCE continued
7,100 UnumProvident Corp. .............. $ 120,842
2,200 W. R. Berkley Corp. .............. 109,120
1,800 WellPoint, Inc. *................. 225,630
-----------
2,604,377
-----------
INTEGRATED OIL COS. - 8.9%
24,400 ChevronTexaco Corp. .............. 1,422,765
12,000 ConocoPhillips.................... 1,294,080
21,300 Exxon Mobil Corp. ................ 1,269,480
2,600 Occidental Petroleum Corp. ....... 185,042
-----------
4,171,367
-----------
IT HARDWARE - 3.1%
2,100 Amphenol Corp., Class A........... 77,784
5,400 Crown Castle International Corp.
*............................... 86,724
4,600 Harris Corp. ..................... 150,190
3,500 Intel Corp. ...................... 81,305
4,100 Lam Research Corp. *.............. 118,326
7,500 Marvell Technology Group Ltd. *... 287,550
41,500 Motorola, Inc. ................... 621,255
400 Research In Motion Ltd. *......... 30,568
200 The DIRECTV Group, Inc. *......... 2,884
-----------
1,456,586
-----------
LAND & WATER TRANSPORTATION - 1.4%
11,200 Burlington Northern Santa Fe
Corp. .......................... 604,016
1,600 CNF, Inc. ........................ 74,864
-----------
678,880
-----------
MAINFRAME & MINICOMPUTERS - 2.6%
32,300 Dell, Inc. *...................... 1,240,966
-----------
METAL PRODUCTS & MACHINERY - 2.2%
1,500 Ball Corp. ....................... 62,220
2,600 Black & Decker Corp. ............. 205,374
978 Caterpillar, Inc. ................ 89,428
900 Cummins, Inc. .................... 63,315
400 Graco, Inc. ...................... 16,144
4,500 Rockwell Automation, Inc. ........ 254,880
1,900 Timken Co. ....................... 51,946
3,400 Tyco International Ltd. .......... 114,920
1,600 United Technologies Corp. ........ 162,656
-----------
1,020,883
-----------
MISCELLANEOUS FINANCE - 5.5%
2,800 A.G. Edwards, Inc. ............... 125,440
700 Chicago Mercantile Exchange....... 135,821
40,100 Citigroup, Inc. .................. 1,802,094
1,200 Goldman Sachs Group, Inc. ........ 131,988
1,200 JPMorgan Chase & Co. ............. 41,520
6,000 Merrill Lynch & Co., Inc. ........ 339,600
1,600 Raymond James Financial, Inc. .... 48,480
-----------
2,624,943
-----------
</Table>
See the accompanying notes to the financial statements.
24 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg U.S. Large Capitalization Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK continued
OIL & COAL RESOURCES - 1.4%
4,200 Chesapeake Energy Corp. .......... $ 92,148
800 Kerr-McGee Corp. ................. 62,664
800 Noble Energy, Inc. ............... 54,416
400 Peabody Energy Corp. ............. 18,544
1,900 PetroKazakhstan, Inc., Class A.... 76,323
1,100 Ultra Petroleum Corp. *........... 55,880
9,600 XTO Energy, Inc. ................. 315,264
-----------
675,239
-----------
OIL DISTRIBUTION - 0.7%
2,300 Ashland, Inc. .................... 155,181
2,600 Questar Corp. .................... 154,050
-----------
309,231
-----------
OIL DRILLING & SERVICES - 0.9%
4,200 Grant Prideco, Inc. *............. 101,472
2,767 National-Oilwell, Inc. *.......... 129,231
100 Noble Corp. ...................... 5,621
1,300 Pride International, Inc. *....... 32,292
1,700 Tidewater, Inc. .................. 66,062
1,600 Transocean, Inc. *................ 82,336
-----------
417,014
-----------
PHOTOOPTICAL, MICROS & OFFICE MACHINERY - 0.5%
2,200 Diebold, Inc. .................... 120,670
3,100 Storage Technology Corp. *........ 95,480
-----------
216,150
-----------
PUBLISHING, BROADCASTING & CINEMA - 2.3%
3,400 Quebecor World, Inc. ............. 80,104
2,600 The Walt Disney Co. .............. 74,698
13,600 Time Warner, Inc. *............... 238,680
8,100 Viacom, Inc., Class A............. 283,824
12,200 Viacom, Inc., Class B............. 424,926
-----------
1,102,232
-----------
REAL ESTATE DEVELOPMENT - 0.1%
1,800 The Brink's Co. .................. 62,280
-----------
REAL ESTATE INVESTMENT TRUSTS - 0.9%
700 CBL & Associates Properties,
Inc. ........................... 50,057
5,800 HRPT Properties Trust............. 69,078
3,700 iStar Financial, Inc. ............ 152,366
1,300 SL Green Realty Corp. ............ 73,086
4,000 Trizec Properties, Inc. .......... 76,000
-----------
420,587
-----------
RESTAURANTS, HOTELS & THEATERS - 1.9%
16,300 McDonald's Corp. ................. 507,582
8,000 YUM! Brands, Inc. ................ 414,480
-----------
922,062
-----------
RETAIL - 6.7%
1,200 Abercrombie & Fitch Co., Class
A............................... 68,688
3,800 American Eagle Outfitters,
Inc. ........................... 112,290
2,700 AutoNation, Inc. *................ 51,138
3,400 Borders Group, Inc. .............. 90,508
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, RETAIL continued
1,400 Caremark Rx, Inc. *............... $ 55,692
4,400 Chico's FAS, Inc. *............... 124,344
1,000 CVS Corp. ........................ 52,620
5,900 Federated Department Stores,
Inc. ........................... 375,476
27,600 Home Depot, Inc. ................. 1,055,424
3,200 J.C. Penney Co., Inc. ............ 166,144
2,200 Limited Brands, Inc. ............. 53,460
2,200 Neiman Marcus Group, Inc., Class
A............................... 201,322
5,900 Office Depot, Inc. *.............. 130,862
3,300 SUPERVALU, Inc. .................. 110,055
7,600 TJX Cos., Inc. ................... 187,188
6,600 Toys "R" Us, Inc. *............... 170,016
900 UGI Corp. ........................ 40,878
1,600 Urban Outfitters, Inc. *.......... 76,752
600 Wal-Mart Stores, Inc. ............ 30,066
-----------
3,152,923
-----------
SOAPS & COSMETICS - 1.7%
6,700 Avon Products, Inc. .............. 287,698
4,900 Clorox Co. ....................... 308,651
3,000 Estee Lauder Cos., Inc., Class
A............................... 134,940
1,100 Procter & Gamble Co. ............. 58,300
-----------
789,589
-----------
SOFTWARE - 7.4%
933 Activision, Inc. *................ 13,813
6,193 Adobe Systems, Inc. .............. 415,984
6,800 Autodesk, Inc. ................... 202,368
3,800 Cognizant Technology Solutions
Corp., Class A *................ 175,560
5,600 Computer Sciences Corp. *......... 256,760
13,100 Electronic Data Systems Corp. .... 270,777
2,300 First American Corp. ............. 75,762
17,300 International Business Machines
Corp............................ 1,580,874
500 Macromedia, Inc. *................ 16,750
11,700 Microsoft Corp. .................. 282,789
7,100 VeriSign, Inc. *.................. 203,770
-----------
3,495,207
-----------
TEXTILES & APPAREL - 1.4%
5,810 Coach, Inc. *..................... 329,020
3,500 Liz Claiborne, Inc. .............. 140,455
2,200 NIKE, Inc., Class B............... 183,282
100 Polo Ralph Lauren Corp. .......... 3,880
-----------
656,637
-----------
WHOLESALE - 0.7%
3,600 Arrow Electronics, Inc. *......... 91,260
2,200 Hughes Supply, Inc. .............. 65,450
2,600 W.W. Grainger, Inc. .............. 161,902
-----------
318,612
-----------
TOTAL COMMON STOCK (COST
$39,879,508).................... 46,968,588
-----------
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 25
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg U.S. Large Capitalization Fund
<Table>
<Caption>
PRINCIPAL VALUE
- -----------------------------------------------------------
REPURCHASE AGREEMENT - 1.4%
$646,000 State Street Bank dated 3/31/05,
due 4/1/05 at 0.75% with a
maturity value of $646,013
(Fully collateralized by a
Fannie Mae security)............ $ 646,000
-----------
TOTAL REPURCHASE AGREEMENT (COST
$646,000)....................... 646,000
-----------
TOTAL INVESTMENTS (COST
$40,525,508) (a) - 100.6%....... 47,614,588
NET OTHER ASSETS (LIABILITIES) -
(0.6)%.......................... (269,399)
-----------
NET ASSETS - 100.0%............... $47,345,189
===========
</Table>
- ---------------
* Non-income producing securities.
(a) The aggregate cost for federal income tax purposes is $40,553,467 and
differs from value by net unrealized appreciation of securities as follows:
<Table>
Unrealized appreciation.................... $7,690,238
Unrealized depreciation.................... (629,117)
----------
Net unrealized appreciation................ $7,061,121
==========
</Table>
See the accompanying notes to the financial statements.
26 Laudus Funds Annual Report
Financial Statements
Statement of Portfolio Investments
LAUDUS ROSENBERG U.S. LARGE CAPITALIZATION GROWTH FUND as of 3/31/05
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK - 98.9%
AGRICULTURE, FOOD & BEVERAGE - 2.5%
1,700 Coca-Cola Co. ...................... $ 70,839
500 Pepsi Bottling Group, Inc. ......... 13,925
300 PepsiAmericas, Inc. ................ 6,798
1,500 PepsiCo, Inc. ...................... 79,545
----------
171,107
----------
AIRLINES - 0.8%
600 FedEx Corp. ........................ 56,370
----------
AUTOS - 0.4%
200 BorgWarner, Inc. ................... 9,736
200 Oshkosh Truck Corp. ................ 16,398
----------
26,134
----------
BANKS & CREDIT INSTITUTIONS - 3.3%
1,000 American Express Co. ............... 51,370
400 Bank of America Corp. .............. 17,640
500 Bank of New York Co., Inc. ......... 14,525
100 Capital One Financial Corp. ........ 7,477
400 Doral Financial Corp. .............. 8,756
400 Fifth Third Bancorp................. 17,192
200 First Marblehead Corp. *............ 11,506
300 Freddie Mac......................... 18,960
700 MBNA Corp. ......................... 17,185
500 Mellon Financial Corp. ............. 14,270
400 SLM Corp. .......................... 19,936
300 TCF Financial Corp. ................ 8,145
500 U.S. Bancorp........................ 14,410
200 Westcorp............................ 8,450
----------
229,822
----------
BASIC MINERALS & METALS - 1.1%
500 Alcoa, Inc. ........................ 15,195
400 Nucor Corp. ........................ 23,024
300 Phelps Dodge Corp. ................. 30,519
200 Southern Peru Copper Corp. ......... 11,092
----------
79,830
----------
BEER, LIQUOR & TOBACCO - 1.0%
600 Altria Group, Inc. ................. 39,234
700 Anheuser-Busch Cos., Inc. .......... 33,173
----------
72,407
----------
BIOTECHNOLOGY - 2.0%
1,200 Amgen, Inc. *....................... 69,852
400 Genentech, Inc. *................... 22,644
900 Gilead Sciences, Inc. *............. 32,220
200 Invitrogen Corp. *.................. 13,840
----------
138,556
----------
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK continued
CELLULAR & WIRELESS - 1.0%
900 Nextel Communications, Inc., Class A
*................................. $ 25,578
600 Nextel Partners, Inc., Class A *.... 13,176
300 NII Holdings, Inc. *................ 17,250
200 Telephone & Data Systems, Inc. ..... 16,320
----------
72,324
----------
CHEMICALS & RUBBER - 0.3%
300 Dow Chemical Co. ................... 14,955
200 Sherwin-Williams Co. ............... 8,798
----------
23,753
----------
COMMERCIAL AIRCRAFT & COMPONENTS - 0.3%
500 Rockwell Collins, Inc. ............. 23,795
----------
COMMUNICATIONS UTILITIES - 1.0%
200 Google, Inc., Class A *............. 36,102
1,000 Yahoo!, Inc. *...................... 33,900
----------
70,002
----------
CONSTRUCTION & HOMEBUILDING - 2.6%
300 Centex Corp. ....................... 17,181
533 D.R. Horton, Inc. .................. 15,585
200 Hovnanian Enterprises, Inc., Class A
*................................. 10,200
200 KB HOME............................. 23,492
300 Lennar Corp., Class A............... 17,004
260 M.D.C. Holdings, Inc. .............. 18,109
500 Pulte Homes, Inc. .................. 36,815
400 Ryland Group, Inc. ................. 24,808
200 Toll Brothers, Inc. *............... 15,770
----------
178,964
----------
CONSTRUCTION MATERIALS - 0.4%
8 Eagle Materials, Inc. .............. 648
29 Eagle Materials, Inc., Class B...... 2,285
200 Florida Rock Industries, Inc. ...... 11,764
200 Vulcan Materials Co. ............... 11,366
----------
26,063
----------
CONSUMER DURABLES - 1.3%
400 Brunswick Corp. .................... 18,740
800 Harley-Davidson, Inc. .............. 46,208
400 Polaris Industries, Inc. ........... 28,092
----------
93,040
----------
DRUGS & PHARMACEUTICALS - 6.5%
1,400 Abbott Laboratories................. 65,268
600 Bristol-Myers Squibb Co. ........... 15,276
300 Dade Behring Holdings, Inc. *....... 17,679
900 Eli Lilly & Co. .................... 46,890
300 Forest Laboratories, Inc. *......... 11,085
200 Genzyme Corp. *..................... 11,448
800 Merck & Co., Inc. .................. 25,896
7,800 Pfizer, Inc. ....................... 204,906
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 27
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg U.S. Large Capitalization Growth Fund
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, DRUGS & PHARMACEUTICALS continued
1,300 Schering-Plough Corp. .............. $ 23,595
700 Wyeth............................... 29,526
----------
451,569
----------
ELECTRIC UTILITIES - 0.8%
700 Constellation Energy Group, Inc. ... 36,190
600 PG&E Corp. ......................... 20,460
----------
56,650
----------
FINANCIAL INVESTMENTS - 1.2%
300 American Capital Strategies Ltd. ... 9,423
2,000 General Electric Co. ............... 72,120
----------
81,543
----------
FOREST PRODUCTS & PAPER - 2.1%
1,300 3M Co. ............................. 111,397
200 Kimberly-Clark Corp. ............... 13,146
900 Louisiana-Pacific Corp. ............ 22,626
----------
147,169
----------
FURNITURE & HOUSEHOLD ITEMS - 0.1%
200 Ethan Allen Interiors, Inc. ........ 6,400
----------
GAS & OTHER PUBLIC UTILITIES - 0.2%
200 NiSource, Inc. ..................... 4,558
400 Waste Management, Inc. ............. 11,540
----------
16,098
----------
GOVERNMENT AIRCRAFT & DEFENSE - 1.7%
1,300 Boeing Co. ......................... 75,998
200 General Dynamics Corp. ............. 21,410
300 United Defense Industries, Inc. .... 22,026
----------
119,434
----------
HEALTH CARE & HOSPITAL - 3.7%
600 Aetna, Inc. ........................ 44,970
300 Coventry Health Care, Inc. *........ 20,442
900 Humana, Inc. *...................... 28,746
400 Laboratory Corp. of America Holdings
*................................. 19,280
100 Quest Diagnostics, Inc. ............ 10,513
200 Triad Hospitals, Inc. *............. 10,020
1,290 UnitedHealth Group, Inc. ........... 123,040
----------
257,011
----------
INFORMATION & SERVICES - 1.6%
300 CheckFree Corp. *................... 12,228
300 Covance, Inc. *..................... 14,283
400 Equifax, Inc. ...................... 12,276
400 Moody's Corp. ...................... 32,344
300 Pharmaceutical Product Development,
Inc. *............................ 14,535
300 Prudential Financial, Inc. ......... 17,220
200 West Corp. *........................ 6,400
----------
109,286
----------
COMMON STOCK continued
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
INSTRUMENTS - 8.1%
300 Bausch & Lomb, Inc. ................ $ 21,990
500 Baxter International, Inc. ......... 16,990
300 Beckman Coulter, Inc. .............. 19,935
300 Becton, Dickinson & Co. ............ 17,526
600 Boston Scientific Corp. *........... 17,574
300 C.R. Bard, Inc. .................... 20,424
300 Edwards Lifesciences Corp. *........ 12,966
300 Guidant Corp. ...................... 22,170
4,100 Johnson & Johnson................... 275,356
300 Johnson Controls, Inc. ............. 16,728
1,100 Medtronic, Inc. .................... 56,045
400 PerkinElmer, Inc. .................. 8,252
400 St. Jude Medical, Inc. *............ 14,400
300 Stryker Corp. ...................... 13,383
400 Waters Corp. *...................... 14,316
200 Zimmer Holdings, Inc. *............. 15,562
----------
563,617
----------
INSURANCE - 4.5%
600 ACE Ltd. ........................... 24,762
400 AFLAC, Inc. ........................ 14,904
200 Ambac Financial Group, Inc. ........ 14,950
1,700 American International Group,
Inc. ............................. 94,197
1,300 Aon Corp. .......................... 29,692
300 Fidelity National Financial,
Inc. ............................. 9,882
200 HCC Insurance Holdings, Inc. ....... 7,232
500 Marsh & McLennan Cos., Inc. ........ 15,210
300 PacifiCare Health Systems, Inc. *... 17,076
300 Radian Group, Inc. ................. 14,322
200 Unitrin, Inc. ...................... 9,080
200 W. R. Berkley Corp. ................ 9,920
200 WellChoice, Inc. *.................. 10,662
300 WellPoint, Inc. *................... 37,605
----------
309,494
----------
INTEGRATED OIL COS. - 0.5%
300 ConocoPhillips...................... 32,352
----------
IT HARDWARE - 8.0%
400 Amphenol Corp., Class A............. 14,816
300 Analog Devices, Inc. ............... 10,842
1,500 Applied Materials, Inc. *........... 24,375
300 Avocent Corp. *..................... 7,698
6,500 Cisco Systems, Inc. *............... 116,285
1,000 Corning, Inc. *..................... 11,130
600 Crown Castle International Corp.
*................................. 9,636
600 Harris Corp. ....................... 19,590
6,400 Intel Corp. ........................ 148,672
500 Lam Research Corp. *................ 14,430
300 Maxim Integrated Products, Inc. .... 12,261
4,700 Motorola, Inc. ..................... 70,359
1,500 QUALCOMM, Inc. ..................... 54,975
1,500 Texas Instruments, Inc. ............ 38,235
----------
553,304
----------
</Table>
See the accompanying notes to the financial statements.
28 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg U.S. Large Capitalization Growth Fund
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK continued
LAND & WATER TRANSPORTATION - 0.8%
200 CNF, Inc. .......................... $ 9,358
300 J.B. Hunt Transport Services,
Inc. ............................. 13,131
500 United Parcel Service, Inc., Class
B................................. 36,370
----------
58,859
----------
MAINFRAME & MINICOMPUTERS - 2.9%
1,200 Apple Computer, Inc. *.............. 50,004
3,900 Dell, Inc. *........................ 149,838
----------
199,842
----------
METAL PRODUCTS & MACHINERY - 2.9%
300 Ball Corp. ......................... 12,444
300 Black & Decker Corp. ............... 23,697
400 Caterpillar, Inc. .................. 36,576
300 Energizer Holdings, Inc. *.......... 17,940
200 Illinois Tool Works, Inc. .......... 17,906
400 Rockwell Automation, Inc. .......... 22,656
300 Timken Co. ......................... 8,202
600 Tyco International Ltd. ............ 20,280
400 United Technologies Corp. .......... 40,664
----------
200,365
----------
MISCELLANEOUS FINANCE - 1.4%
200 A.G. Edwards, Inc. ................. 8,960
200 Chicago Mercantile Exchange......... 38,806
200 Goldman Sachs Group, Inc. .......... 21,998
100 Legg Mason, Inc. ................... 7,814
400 Morgan Stanley...................... 22,900
----------
100,478
----------
OIL & COAL RESOURCES - 2.0%
400 Anadarko Petroleum Corp. ........... 30,440
200 Apache Corp. ....................... 12,246
300 Burlington Resources, Inc. ......... 15,021
800 Chesapeake Energy Corp. ............ 17,552
200 CONSOL Energy, Inc. ................ 9,404
300 Newfield Exploration Co. *.......... 22,278
933 XTO Energy, Inc. ................... 30,640
----------
137,581
----------
OIL DRILLING & SERVICES - 1.5%
700 Baker Hughes, Inc. ................. 31,143
600 Grant Prideco, Inc. *............... 14,496
400 Halliburton Co. .................... 17,300
300 National-Oilwell, Inc. *............ 14,010
200 Smith International, Inc. .......... 12,546
300 Tidewater, Inc. .................... 11,658
----------
101,153
----------
PHOTOOPTICAL, MICROS & OFFICE MACHINERY - 0.9%
1,682 EMC Corp. *......................... 20,722
1,000 NCR Corp. *......................... 33,740
200 Storage Technology Corp. *.......... 6,160
----------
60,622
----------
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK continued
PUBLISHING, BROADCASTING & CINEMA - 2.0%
400 American Greetings Corp., Class A... $ 10,192
1,000 Liberty Media Corp., Class A *...... 10,370
200 McGraw-Hill Cos., Inc. ............. 17,450
100 Omnicom Group....................... 8,852
1,500 The Walt Disney Co. ................ 43,095
2,200 Time Warner, Inc. *................. 38,610
300 Viacom, Inc., Class B............... 10,449
----------
139,018
----------
REAL ESTATE DEVELOPMENT - 0.1%
300 The Brink's Co. .................... 10,380
----------
RESTAURANTS, HOTELS & THEATERS - 1.6%
300 CBRL Group, Inc. ................... 12,390
400 Darden Restaurants, Inc. ........... 12,272
800 McDonald's Corp. ................... 24,912
400 Starbucks Corp. *................... 20,664
800 YUM! Brands, Inc. .................. 41,448
----------
111,686
----------
RETAIL - 9.8%
300 Abercrombie & Fitch Co., Class A.... 17,172
600 American Eagle Outfitters, Inc. .... 17,730
300 Best Buy Co., Inc. ................. 16,203
200 Borders Group, Inc. ................ 5,324
600 Chico's FAS, Inc. *................. 16,956
300 CVS Corp. .......................... 15,786
1,000 eBay, Inc. *........................ 37,260
400 Foot Locker, Inc. .................. 11,720
1,600 Gap, Inc. .......................... 34,944
3,000 Home Depot, Inc. ................... 114,720
300 Kohl's Corp. *...................... 15,489
400 Limited Brands, Inc. ............... 9,720
700 Lowe's Cos., Inc. .................. 39,963
300 Nordstrom, Inc. .................... 16,614
1,300 Office Depot, Inc. *................ 28,834
500 Staples, Inc. ...................... 15,715
400 SUPERVALU, Inc. .................... 13,340
800 Target Corp. ....................... 40,016
1,300 TJX Cos., Inc. ..................... 32,019
300 Urban Outfitters, Inc. *............ 14,391
2,500 Wal-Mart Stores, Inc. .............. 125,275
900 Walgreen Co. ....................... 39,978
----------
679,169
----------
SOAPS & COSMETICS - 5.2%
1,100 Avon Products, Inc. ................ 47,234
300 Clorox Co. ......................... 18,897
400 Colgate-Palmolive Co. .............. 20,868
500 Estee Lauder Cos., Inc., Class A.... 22,490
1,200 Gillette Co. ....................... 60,576
3,600 Procter & Gamble Co. ............... 190,800
----------
360,865
----------
SOFTWARE - 8.3%
800 Activision, Inc. *.................. 11,840
700 Adobe Systems, Inc. ................ 47,019
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 29
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg U.S. Large Capitalization Growth Fund
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, SOFTWARE continued
800 Autodesk, Inc. ..................... $ 23,808
500 Automatic Data Processing, Inc. .... 22,475
335 Cognizant Technology Solutions
Corp., Class A *.................. 15,477
300 Electronic Arts, Inc. *............. 15,534
800 First Data Corp. ................... 31,448
1,800 International Business Machines
Corp.............................. 164,484
7,400 Microsoft Corp. .................... 178,858
3,100 Oracle Corp. *...................... 38,688
600 Symantec Corp. *.................... 12,798
500 VeriSign, Inc. *.................... 14,350
----------
576,779
----------
TEXTILES & APPAREL - 1.5%
600 Coach, Inc. *....................... 33,978
500 NIKE, Inc., Class B................. 41,655
200 Polo Ralph Lauren Corp. ............ 7,760
200 Reebok International Ltd. .......... 8,860
200 Timberland Co., Class A *........... 14,186
----------
106,439
----------
WHOLESALE - 1.0%
200 Arrow Electronics, Inc. *........... 5,070
400 Cardinal Health, Inc. .............. 22,320
400 Hughes Supply, Inc. ................ 11,900
500 Sysco Corp. ........................ 17,900
200 W.W. Grainger, Inc. ................ 12,454
----------
69,644
----------
TOTAL COMMON STOCK (COST
$6,300,903)....................... 6,878,974
----------
</Table>
<Table>
<Caption>
PRINCIPAL VALUE
- ------------------------------------------------------------
REPURCHASE AGREEMENT - 0.9%
$59,374 Bear Stearns dated 3/31/05, due
4/1/05 at 2.63% with a maturity
value of $59,378 (Fully
collateralized by U.S. Treasury
Notes)............................ $ 59,374
----------
TOTAL REPURCHASE AGREEMENT (COST
$59,374).......................... 59,374
----------
TOTAL INVESTMENTS (COST $6,360,277)
(a) - 99.8%....................... 6,938,348
NET OTHER ASSETS
(LIABILITIES) - 0.2%.............. 11,053
----------
NET ASSETS - 100.0%................. $6,949,401
==========
</Table>
- ---------------
* Non-income producing security.
(a) The aggregate cost for federal income tax purposes is $6,494,871 and differs
from value by net unrealized appreciation of securities as follows:
<Table>
Unrealized appreciation..................... $ 747,021
Unrealized depreciation..................... (303,544)
---------
Net unrealized appreciation................. $ 443,477
=========
</Table>
See the accompanying notes to the financial statements.
30 Laudus Funds Annual Report
Financial Statements
Statement of Portfolio Investments
LAUDUS ROSENBERG U.S. DISCOVERY FUND as of 3/31/05
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK - 98.5%
AGRICULTURE, FOOD & BEVERAGE - 1.7%
2,422 Alico, Inc. *................... $ 127,639
3,221 Andersons, Inc. ................ 99,851
5,000 Cagle's, Inc., Class A *........ 46,000
48,300 Chiquita Brands International,
Inc. ......................... 1,293,474
3,400 Diedrich Coffee, Inc. *......... 16,881
34,250 Flowers Foods, Inc. ............ 966,193
900 Glacier Water Services, Inc.
*............................. 22,770
133 J & J Snack Foods Corp. ........ 6,228
11,300 Lance, Inc. .................... 181,591
8,200 National Beverage Corp. ........ 66,830
2,300 Omega Protein Corp. *........... 15,686
59,600 PepsiAmericas, Inc. ............ 1,350,536
15,900 Ralcorp Holdings, Inc. ......... 752,865
250 Seaboard Corp. ................. 268,250
1,000 Seneca Foods Corp., Class B *... 17,400
100 Zapata Corp. *.................. 7,295
------------
5,239,489
------------
AIRLINES - 0.5%
400 Air Methods Corp. *............. 3,188
6,500 AirNet Systems, Inc. *.......... 30,745
32,800 Alaska Air Group, Inc. *........ 965,632
14,338 MAIR Holdings, Inc. *........... 127,895
23,480 Mesa Air Group, Inc. *.......... 164,360
3,800 Offshore Logistics, Inc. *...... 126,616
------------
1,418,436
------------
AUTOS - 1.3%
26,000 Autoliv, Inc. .................. 1,238,900
12,400 BorgWarner, Inc. ............... 603,632
300 Collins Industries, Inc. ....... 1,620
18,700 Modine Manufacturing Co. ....... 548,471
14,800 Oshkosh Truck Corp. ............ 1,213,452
4,000 R&B, Inc. *..................... 53,040
7,200 Sypris Solutions, Inc. ......... 77,184
26,200 TRW Automotive Holdings Corp.
*............................. 509,066
------------
4,245,365
------------
BANKS & CREDIT INSTITUTIONS - 6.8%
10,600 Advanta Corp., Class A.......... 220,480
200 AmericanWest Bancorp *.......... 3,854
4,606 AmeriServ Financial, Inc. *..... 25,840
1,200 Anchor BanCorp Wisconsin,
Inc. ......................... 33,732
1,400 Auburn National Bancorporation,
Inc........................... 31,927
9,200 Banco Latinoamericano de
Exportaciones, SA............. 188,048
1,600 Bank of Hawaii Corp. ........... 72,416
2,700 BankUnited Financial Corp.,
Class A *..................... 72,522
5,800 Banner Corp. ................... 156,426
1,060 Berkshire Bancorp, Inc. ........ 21,257
4,100 Berkshire Hills Bancorp,
Inc. ......................... 138,375
1,700 BNCCORP, Inc. *................. 24,096
300 Britton & Koontz Capital
Corp. ........................ 5,505
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, BANKS & CREDIT
INSTITUTIONS continued
8 Camco Financial Corp. .......... $ 112
2,500 Capital Crossing Bank *......... 82,250
8,000 Capitol Bancorp Ltd. ........... 242,000
1,300 Carver Bancorp, Inc. ........... 24,310
450 CCF Holding Co. ................ 8,496
15 Central Virginia Bankshares,
Inc. ......................... 420
1,600 Centrue Financial Corp. *....... 44,000
448 CFS Bancorp, Inc. .............. 6,133
100 Citizens First Bancorp, Inc. ... 2,234
12,000 Colonial BancGroup, Inc. ....... 246,240
44,900 Commercial Federal Corp. ....... 1,241,485
220 Community Bank Shares of
Indiana, Inc.................. 4,641
100 Community Bankshares, Inc. ..... 1,825
800 Community Financial Corp. ...... 17,956
3,364 Community West Bancshares....... 41,041
2,432 Consumer Portfolio Services,
Inc. *........................ 11,990
7 Cooperative Bankshares, Inc. ... 119
800 Cornerstone Bancorp, Inc. ...... 25,600
400 Corus Bankshares, Inc. ......... 19,076
1,800 Cowlitz Bancorp *............... 20,700
80,500 Doral Financial Corp. .......... 1,762,144
2,500 EFC Bancorp, Inc. .............. 63,875
440 Elmira Savings Bank, FSB........ 13,561
7,600 Federal Agricultural Mortgage
Corp., Class C................ 132,924
800 First Bancorp of Indiana,
Inc. ......................... 15,600
700 First Bancshares, Inc. ......... 14,525
1,000 First BancTrust Corp. .......... 12,175
2,190 First Bank of Delaware *........ 6,789
5,634 First Charter Corp. ............ 127,272
2,500 First Citizens BancShares, Inc.,
Class A....................... 365,950
1,300 First Defiance Financial
Corp. ........................ 33,800
1,800 First Federal Bancshares of
Arkansas, Inc................. 42,624
2,500 First Federal Bankshares,
Inc. ......................... 54,575
600 First Franklin Corp. ........... 10,800
300 First Keystone Financial,
Inc. ......................... 6,495
3,600 First M&F Corp. ................ 122,868
23,800 First Marblehead Corp. *........ 1,369,214
300 First Mariner Bancorp *......... 5,316
17,359 First Place Financial Corp. .... 317,670
1,300 First West Virginia Bancorp,
Inc. ......................... 27,820
100 FirstFed Bancorp, Inc. ......... 825
600 FirstFed Financial Corp. *...... 30,606
100 Flag Financial Corp. ........... 1,488
700 FMS Financial Corp. ............ 13,804
400 Glen Burnie Bancorp............. 8,400
600 GS Financial Corp. ............. 11,394
1,800 Guaranty Federal Bancshares,
Inc. ......................... 40,590
100 Habersham Bancorp............... 2,300
499 Harleysville Savings Financial
Corp.......................... 9,356
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 31
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg U.S. Discovery Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, BANKS & CREDIT
INSTITUTIONS continued
2,150 HF Financial Corp. ............. $ 44,613
16,900 Hibernia Corp., Class A......... 540,969
1,300 HMN Financial, Inc. ............ 40,300
2,100 Horizon Bancorp................. 60,900
64,340 Independence Community Bank
Corp.......................... 2,509,259
7,300 Integra Bank Corp. ............. 161,622
1,600 Intervest Bancshares Corp. *.... 28,800
12,600 Irwin Financial Corp. .......... 290,052
3,647 ITLA Capital Corp. *............ 182,204
200 Long Island Financial Corp. .... 7,392
1,613 LSB Corp. ...................... 28,615
315 LSB Financial Corp. ............ 8,113
3,169 MAF Bancorp, Inc. .............. 131,640
3,600 Matrix Bancorp, Inc. *.......... 45,000
5,200 Medallion Financial Corp. ...... 47,528
1,000 Meta Financial Group, Inc. ..... 22,402
2,201 MidWestOne Financial Group,
Inc. ......................... 38,518
2,260 National Mercantile Bancorp *... 30,166
1,000 New Hampshire Thrift Bancshares,
Inc........................... 16,324
900 Northrim BanCorp, Inc. ......... 22,500
800 Northway Financial, Inc. ....... 27,600
3,000 Pacific Mercantile Bancorp *.... 40,920
500 Park Bancorp, Inc. ............. 15,138
653 Parkvale Financial Corp. ....... 18,153
540 Peoples Bancorp of North
Carolina...................... 9,612
400 Peoples BancTrust Co., Inc. .... 6,800
5,010 PFF Bancorp, Inc. .............. 138,276
1,000 Pinnacle Bancshares, Inc. ...... 14,650
2,000 Pocahontas Bancorp, Inc. ....... 31,900
1,500 Premier Financial Bancorp, Inc.
*............................. 16,823
2,100 Princeton National Bancorp,
Inc. ......................... 63,000
1,000 Provident Bancorp, Inc. ........ 12,240
37,700 Provident Bankshares Corp. ..... 1,242,592
5,185 Provident Financial Holdings,
Inc. ......................... 154,202
2,200 PSB Bancorp, Inc. .............. 34,782
35,800 R & G Financial Corp., Class
B............................. 1,115,886
10,670 Republic Bancorp, Inc. ......... 144,472
210 Republic Bancorp, Inc., Class
A............................. 4,665
3,290 Republic First Bancorp, Inc.
*............................. 47,310
600 River Valley Bancorp............ 12,825
41,860 Silicon Valley Bancshares *..... 1,844,351
100 Simmons First National Corp.,
Class A....................... 2,482
49,000 South Financial Group, Inc. .... 1,496,460
100 South Street Financial Corp. ... 971
21,321 Sterling Bancshares, Inc. ...... 302,758
973 Sterling Financial Corp. *...... 34,736
600 TCF Financial Corp. ............ 16,290
1,150 Team Financial, Inc. ........... 16,531
1,100 Teche Holding Co. .............. 40,425
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, BANKS & CREDIT
INSTITUTIONS continued
1,900 Timberland Bancorp, Inc. ....... $ 42,085
5,585 UMB Financial Corp. ............ 317,898
800 Union Bankshares Corp. ......... 25,616
600 Union Community Bancorp......... 9,674
200 United Bancshares, Inc. ........ 3,062
16,963 United Community Financial
Corp. ........................ 188,120
584 United Financial Corp. ......... 14,191
325 Unity Bancorp, Inc. ............ 3,900
11,380 W Holding Co., Inc. ............ 114,597
2,730 Wainwright Bank & Trust Co. .... 32,897
6,900 Walter Industries, Inc. ........ 293,595
2,445 Washington Banking Co. ......... 44,499
3,465 Washington Federal, Inc. ....... 80,769
4,700 Washington Savings Bank,
F.S.B. ....................... 54,849
26,700 Westcorp........................ 1,128,075
5,569 WFS Financial, Inc. *........... 240,302
2,502 WSFS Financial Corp. ........... 131,505
1,800 WVS Financial Corp. ............ 30,330
400 Yardville National Bancorp...... 13,048
------------
21,592,645
------------
BASIC MINERALS & METALS - 3.6%
12,600 Brush Engineered Materials, Inc.
*............................. 239,778
26,700 Cleveland-Cliffs, Inc. ......... 1,945,629
27,800 Commercial Metals Co. .......... 942,142
3,744 Gibraltar Industries, Inc. ..... 82,143
1,100 Harsco Corp. ................... 65,571
1,000 Insteel Industries, Inc. *...... 15,020
4,500 L.B. Foster Co., Class A *...... 40,658
20,200 Lone Star Technologies, Inc.
*............................. 796,486
31,900 Maverick Tube Corp. *........... 1,037,069
3,200 Northwest Pipe Co. *............ 79,008
21,800 NS Group, Inc. *................ 684,738
17,000 Nucor Corp. .................... 978,520
10,952 Olympic Steel, Inc. *........... 195,822
44,400 Oregon Steel Mills, Inc. *...... 1,021,200
1,650 Quanex Corp. ................... 87,978
8,100 Reliance Steel & Aluminum
Co. .......................... 324,081
8,000 Roanoke Electric Steel Corp. ... 165,440
9,800 Ryerson Tull, Inc. ............. 124,166
15,700 Southern Peru Copper Corp. ..... 870,722
40,400 Steel Dynamics, Inc. ........... 1,391,780
8,800 Steel Technologies, Inc. ....... 211,112
------------
11,299,063
------------
BIOTECHNOLOGY - 0.9%
16,890 Harvard Bioscience, Inc. *...... 65,702
41,243 Invitrogen Corp. *.............. 2,854,016
------------
2,919,718
------------
</Table>
See the accompanying notes to the financial statements.
32 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg U.S. Discovery Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK continued
CELLULAR & WIRELESS - 1.3%
400 Nextel Partners, Inc., Class A
*............................. $ 8,784
9,600 NII Holdings, Inc. *............ 552,000
26,000 Telephone & Data Systems,
Inc. ......................... 2,121,600
10,800 U.S. Cellular Corp. *........... 492,804
28,709 USA Mobility, Inc. *............ 930,172
------------
4,105,360
------------
CHEMICALS & RUBBER - 2.0%
19,000 A. Schulman, Inc. .............. 330,980
3,901 American Pacific Corp. *........ 28,282
24,200 Arch Chemicals, Inc. ........... 688,974
1,300 Bairnco Corp. .................. 14,976
7,600 Cytec Industries, Inc. ......... 412,300
6,700 Eastman Chemical Co. ........... 395,300
3,600 FMC Corp. *..................... 192,420
11,800 Georgia Gulf Corp. ............. 542,564
53,300 Great Lakes Chemical Corp. ..... 1,711,996
84,200 Hercules, Inc. *................ 1,219,216
34,400 Hexcel Corp. *.................. 533,544
2,200 LESCO, Inc. *................... 31,900
3,200 LSB Industries, Inc. *.......... 23,552
9,000 RPM International, Inc. ........ 164,520
4,600 Stepan Co. ..................... 108,146
400 Synalloy Corp. *................ 4,080
------------
6,402,750
------------
COMMERCIAL AIRCRAFT & COMPONENTS - 0.1%
7,500 Sequa Corp., Class A *.......... 388,875
------------
COMMUNICATIONS UTILITIES - 0.6%
1,900 Atlantic Tele-Network, Inc. .... 60,838
16,400 Audible, Inc. *................. 221,728
12,100 CT Communications, Inc. ........ 127,413
13,000 D&E Communications, Inc. ....... 118,690
157,200 EarthLink, Inc. *............... 1,414,800
1,500 Hector Communications Corp. .... 32,250
------------
1,975,719
------------
CONSTRUCTION & HOMEBUILDING - 2.8%
6,600 Beazer Homes USA, Inc. ......... 329,076
9,500 Brookfield Homes Corp. ......... 400,995
2 Cavco Industries, Inc. *........ 48
33,800 Granite Construction, Inc. ..... 887,926
39,800 Hovnanian Enterprises, Inc.,
Class A *..................... 2,029,800
8,200 Insituform Technologies, Inc.,
Class A *..................... 118,982
1,700 KB HOME......................... 199,682
29,920 M.D.C. Holdings, Inc. .......... 2,083,928
1,400 M/I Homes, Inc. ................ 68,502
1,200 Meritage Corp. *................ 70,704
200 Pulte Homes, Inc. .............. 14,726
15,800 Ryland Group, Inc. ............. 979,916
2,600 Sterling Construction Co., Inc.
*............................. 18,200
12,100 Technical Olympic USA, Inc. .... 365,420
5,000 Toll Brothers, Inc. *........... 394,250
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, CONSTRUCTION &
HOMEBUILDING continued
14,500 Willbros Group, Inc. *.......... $ 292,900
5,400 William Lyon Homes, Inc. *...... 414,180
------------
8,669,235
------------
CONSTRUCTION MATERIALS - 0.7%
4,300 Ameron International Corp. ..... 154,800
18,200 Compass Minerals International,
Inc........................... 463,190
376 Devcon International Corp. *.... 5,095
4,000 Eagle Materials, Inc. .......... 323,760
200 ElkCorp......................... 7,692
2,550 Florida Rock Industries,
Inc. ......................... 149,991
5,500 Martin Marietta Materials,
Inc. ......................... 307,560
22,000 MDU Resources Group, Inc. ...... 607,640
3,100 Oil-Dri Corp. of America........ 57,350
4,076 Rock of Ages Corp. ............. 26,902
26,000 U.S. Concrete, Inc. *........... 163,020
2,700 United States Lime & Minerals,
Inc. * ....................... 42,525
------------
2,309,525
------------
CONSUMER DURABLES - 0.7%
1,700 Arctic Cat, Inc. ............... 46,002
1,504 Boston Acoustics, Inc. ......... 21,635
23,000 Brunswick Corp. ................ 1,077,551
16,200 Coachmen Industries, Inc. ...... 220,320
900 Marine Products Corp. .......... 15,129
4,300 Polaris Industries, Inc. ....... 301,989
11,661 Spartan Motors, Inc. ........... 117,193
16,638 Universal Electronics, Inc. *... 280,849
------------
2,080,668
------------
DRUGS & PHARMACEUTICALS - 1.4%
25,600 Alpharma, Inc., Class A......... 315,392
44,867 Dade Behring Holdings, Inc. *... 2,644,012
5,900 E-Z-EM, Inc. ................... 70,328
33,600 First Horizon Pharmaceutical
Corp. * ...................... 567,168
8,600 Immucor, Inc. *................. 259,634
400 Lifecore Biomedical, Inc. *..... 7,108
1,100 Matrixx Initiatives, Inc. *..... 12,419
13,600 Nature's Sunshine Products,
Inc. ......................... 233,512
800 Polydex Pharmaceuticals Ltd.
*............................. 3,984
1,500 United-Guardian, Inc. .......... 11,235
21,000 Weider Nutrition International,
Inc. *........................ 127,890
------------
4,252,682
------------
ELECTRIC UTILITIES - 2.4%
83,400 Alliant Energy Corp. ........... 2,233,452
800 Central Vermont Public Service
Corp.......................... 17,984
2,100 CMS Energy Corp. *.............. 27,384
38,100 Duquesne Light Holdings,
Inc. ......................... 682,752
52,500 El Paso Electric Co. *.......... 997,500
3,000 Green Mountain Power Corp. ..... 87,900
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 33
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg U.S. Discovery Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, ELECTRIC UTILITIES continued
300 Hawaiian Electric Industries,
Inc. ......................... $ 7,656
10,132 Pinnacle West Capital Corp. .... 430,711
23,700 PNM Resources, Inc. ............ 632,316
9,400 UIL Holdings Corp. ............. 476,110
84,700 Westar Energy, Inc. ............ 1,832,908
------------
7,426,673
------------
FINANCIAL INVESTMENTS - 1.0%
3,375 Aaron Rents, Inc. .............. 67,500
28,600 American Capital Strategies
Ltd. ......................... 898,325
1,700 California First National
Bancorp....................... 21,250
300 Capital Southwest Corp. ........ 23,730
162 Cherokee, Inc. ................. 5,424
4,100 Choice Hotels International,
Inc. ......................... 253,995
12,700 Electro Rent Corp. *............ 170,434
4,700 ePlus, Inc. *................... 54,849
2,866 G-III Apparel Group Ltd. *...... 23,215
18,480 MCG Capital Corp. .............. 284,315
25,310 Price Communications Corp. *.... 442,925
57 Shenandoah Telecommunications
Co............................ 1,767
100 SurModics, Inc. *............... 3,191
4,500 TC Pipelines LP................. 161,325
17,800 Universal Compression Holdings,
Inc. *........................ 674,086
8,300 Willis Lease Finance Corp. *.... 68,475
------------
3,154,806
------------
FOREST PRODUCTS & PAPER - 0.6%
9,500 Chesapeake Corp. ............... 199,690
2,700 CSS Industries, Inc. ........... 98,685
1,699 DSG International Ltd. *........ 7,756
42,600 Louisiana-Pacific Corp. ........ 1,070,964
400 Lydall, Inc. *.................. 4,440
3,700 Nashua Corp. *.................. 32,190
3,400 Packaging Dynamics Corp. ....... 47,566
1,100 Rock-Tenn Co., Class A.......... 14,630
6,700 Universal Forest Products,
Inc. ......................... 260,295
------------
1,736,216
------------
FURNITURE & HOUSEHOLD ITEMS - 1.6%
8,400 A.T. Cross Co., Class A *....... 49,560
6,400 Acuity Brands, Inc. ............ 172,800
3,000 Aldila, Inc. ................... 50,703
1,500 American Biltrite, Inc. *....... 16,875
600 American Locker Group, Inc. *... 3,240
1,800 Atlantis Plastics, Inc., Class A
*............................. 42,750
5,900 AZZ, Inc. *..................... 107,085
7,150 Bassett Furniture Industries,
Inc. ......................... 140,855
11,900 Central Garden & Pet Co. *...... 521,934
150 Channell Commercial Corp. *..... 1,130
1,400 Chase Corp. .................... 22,008
1,200 Chromcraft Revington, Inc. *.... 16,464
9,200 Communications Systems, Inc. ... 104,880
6,400 Congoleum Corp., Class A *...... 33,920
2,600 Flexsteel Industries, Inc. ..... 42,926
8,199 GameTech International, Inc. ... 24,351
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, FURNITURE & HOUSEHOLD
ITEMS continued
200 Genlyte Group, Inc. *........... $ 17,994
19,060 Griffon Corp. *................. 408,075
100 Hasbro, Inc. ................... 2,045
7,200 Jacuzzi Brands, Inc. *.......... 70,272
28,067 JAKKS Pacific, Inc. *........... 602,598
47,500 K2, Inc. *...................... 653,125
7,200 Kimball International, Inc.,
Class B....................... 104,400
1,400 Knape & Vogt Manufacturing
Co. .......................... 17,497
7,000 Lamson & Sessions Co. *......... 69,650
6,800 Movado Group, Inc. ............. 125,800
3,400 National Presto Industries,
Inc. ......................... 137,020
2,100 Patrick Industries, Inc. *...... 21,651
4,800 Preformed Line Products Co. .... 143,952
55,300 Steelcase, Inc., Class A........ 763,140
600 The Rowe Cos. *................. 2,376
20,400 Tredegar Corp. ................. 343,944
2,783 Vermont Teddy Bear Co., Inc.
*............................. 14,889
5,400 Yankee Candle Co., Inc. *....... 171,180
------------
5,021,089
------------
GAS & OTHER PUBLIC UTILITIES - 0.6%
1,614 American Ecology Corp. ......... 19,094
13,300 Atmos Energy Corp. ............. 359,100
17,700 California Water Service
Group......................... 590,648
7,209 Duratek, Inc. *................. 143,820
1,200 ONEOK, Inc. .................... 36,984
1,100 RGC Resources, Inc. ............ 28,710
2,700 SJW Corp. ...................... 94,851
5,500 South Jersey Industries,
Inc. ......................... 310,200
11,670 Waste Industries USA, Inc. ..... 162,213
------------
1,745,620
------------
GOVERNMENT AIRCRAFT & DEFENSE - 0.2%
2,700 Allied Defense Group, Inc. *.... 66,123
1,000 Benthos, Inc. *................. 17,150
11,000 EDO Corp. ...................... 330,550
1,800 Lowrance Electronics, Inc. ..... 43,758
625 Orbit International Corp. *..... 5,725
2,600 Todd Shipyards Corp. ........... 49,192
------------
512,498
------------
HEALTH CARE & HOSPITAL - 2.4%
9,300 Allied Healthcare International,
Inc. *........................ 58,125
4,400 American Shared Hospital
Services...................... 23,980
8,900 Health Net, Inc. *.............. 291,119
200 HealthTronics, Inc. *........... 2,152
73,100 Humana, Inc. *.................. 2,334,814
25,600 Kindred Healthcare, Inc. *...... 898,560
8,600 MedCath Corp. *................. 251,980
200 MEDTOX Scientific, Inc. *....... 1,600
1,950 National Dentex Corp. *......... 38,415
2,191 National Home Health Care
Corp. ........................ 25,372
300 Option Care, Inc. .............. 6,177
</Table>
See the accompanying notes to the financial statements.
34 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg U.S. Discovery Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, HEALTH CARE & HOSPITAL continued
3,600 Pediatric Services of America,
Inc. *........................ $ 44,424
17,800 RehabCare Group, Inc. *......... 511,038
60,900 Triad Hospitals, Inc. *......... 3,051,090
------------
7,538,846
------------
INFORMATION & SERVICES - 4.5%
900 Ablest, Inc. *.................. 6,570
18,100 ABM Industries, Inc. ........... 348,063
100 Almost Family, Inc. *........... 1,329
5,800 Ambassadors Groups, Inc. ....... 193,836
2,343 Ambassadors International,
Inc. ......................... 32,875
3,400 American Dental Partners, Inc.
*............................. 75,585
24,400 American Retirement Corp. *..... 354,776
4,900 Angelica Corp. ................. 137,200
11,600 Bluegreen Corp. *............... 149,060
14,600 Carriage Services, Inc. *....... 81,322
250 Cass Information Systems,
Inc. ......................... 9,625
39,812 Century Business Services, Inc.
*............................. 163,229
44,574 CheckFree Corp. *............... 1,816,837
16,100 Cornell Cos., Inc. *............ 202,860
19,371 Discovery Partners International
*............................. 61,987
3,300 Ecology & Environment, Inc. .... 23,364
300 Exponent, Inc. *................ 7,167
2,500 Forrester Research, Inc. *...... 35,200
19,200 Heidrick & Struggles
International, Inc. *......... 705,984
100 Horizon Health Corp. *.......... 4,250
13,900 Hudson Highland Group, Inc. *... 237,551
5,800 Jones Lang LaSalle, Inc. *...... 270,570
18,700 Kelly Services, Inc., Class A... 538,373
7,400 Kendle International, Inc. *.... 85,100
36,300 Korn/Ferry International *...... 690,789
1,500 Labor Ready, Inc. *............. 27,975
15,500 Laureate Education, Inc. *...... 663,245
7,400 Layne Christensen Co. *......... 127,798
7,800 Mac-Gray Corp. *................ 65,910
13,100 MAXIMUS, Inc. .................. 438,719
16,700 Metal Management, Inc. ......... 428,856
5,700 Michael Baker Corp. *........... 125,685
3,700 Monro Muffler Brake, Inc. *..... 95,497
86,200 MPS Group, Inc. *............... 905,962
9,260 National Technical Systems, Inc.
*............................. 39,818
6,900 Navigant International, Inc.
*............................. 94,254
23,597 NCO Group, Inc. *............... 461,321
4,100 Nobel Learning Communities, Inc.
*............................. 34,235
3,500 Opinion Research Corp. *........ 24,535
14,000 PAREXEL International Corp. *... 329,000
9,268 Pharmaceutical Product
Development, Inc. *........... 449,035
7,986 RCM Technologies, Inc. *........ 40,249
32,600 Resources Connection, Inc. *.... 682,318
22,850 Schnitzer Steel Industries,
Inc., Class A................. 770,731
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, INFORMATION & SERVICES continued
1,575 Security National Financial
Corp., Class A *.............. $ 5,591
613 SRI/Surgical Express, Inc. *.... 2,973
6,800 Steiner Leisure Ltd. *.......... 222,292
26,800 TeleTech Holdings, Inc. *....... 346,256
29,900 URS Corp. *..................... 859,625
4,600 Vertrue, Inc. *................. 163,024
7,600 Volt Information Sciences, Inc.
*............................. 183,540
6,500 West Corp. *.................... 208,000
------------
14,029,946
------------
INSTRUMENTS - 5.3%
5,400 Allied Healthcare Products, Inc.
*............................. 34,884
28,472 American Medical Systems
Holdings, Inc. *.............. 489,149
1,300 American Science & Engineering,
Inc. *........................ 58,123
23,200 Armor Holdings, Inc. *.......... 860,488
1,300 Arrow International, Inc. ...... 44,655
23,600 ArthroCare Corp. *.............. 672,600
400 Atrion Corp. ................... 19,454
800 Badger Meter, Inc. ............. 21,200
37,800 Bausch & Lomb, Inc. ............ 2,770,740
1,300 Beckman Coulter, Inc. .......... 86,385
3,813 Bio-Logic Systems Corp. *....... 25,852
3,700 Bio-Rad Laboratories, Inc.,
Class A *..................... 180,227
30,700 Checkpoint Systems, Inc. *...... 518,216
800 Clinical Data, Inc. ............ 13,120
400 CNS, Inc. ...................... 7,120
2,100 Compex Technologies, Inc. *..... 10,521
19,048 CONMED Corp. *.................. 573,726
3,529 Cooper Cos., Inc. .............. 257,264
10,883 Datascope Corp. ................ 332,802
3,300 DJ Orthopedics, Inc. *.......... 82,665
69,700 Edwards Lifesciences Corp. *.... 3,012,433
100 Embrex, Inc. *.................. 1,172
400 Enpath Medical, Inc. *.......... 3,248
14,500 Esterline Technologies Corp.
*............................. 500,975
8,900 Frequency Electronics, Inc. .... 94,874
11,800 Haemonetics Corp. *............. 497,488
11,297 Integra LifeSciences Holdings
*............................. 397,880
23,900 Invacare Corp. ................. 1,066,657
1,600 Iridex Corp. *.................. 7,938
1,300 K-Tron International, Inc. *.... 39,572
1,100 Kewaunee Scientific Corp. ...... 8,184
10,300 LeCroy Corp. *.................. 176,439
1,166 Mesa Laboratories, Inc. ........ 16,095
7,500 Mine Safety Appliances Co. ..... 290,550
6,602 Misonix, Inc. *................. 39,612
2,100 MOCON, Inc. .................... 19,060
9,292 Molecular Devices Corp. *....... 176,548
17,060 MTS Systems Corp. .............. 495,252
1,800 New Brunswick Scientific Co.,
Inc. *........................ 9,864
100 Nmt Medical, Inc. *............. 820
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 35
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg U.S. Discovery Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, INSTRUMENTS continued
2,000 O.I. Corp. *.................... $ 21,500
7,100 Oakley, Inc. ................... 91,022
4,600 OYO Geospace Corp. *............ 91,080
5,400 Perceptron, Inc. *.............. 42,660
70,900 PerkinElmer, Inc. .............. 1,462,667
3,610 Respironics, Inc. *............. 210,355
600 Schmitt Industries, Inc. *...... 4,290
2,200 Span-America Medical Systems,
Inc........................... 22,572
13,400 Teleflex, Inc. ................. 685,812
6,066 Thoratec Corp. *................ 74,127
2,000 Vicon Industries, Inc. *........ 6,500
4,000 Vital Signs, Inc. .............. 159,560
------------
16,785,997
------------
INSURANCE - 5.4%
9,600 American National Insurance
Co. .......................... 1,016,640
9,286 American Physicians Capital,
Inc. *........................ 318,231
3,800 American Safety Insurance
Holdings Ltd. *............... 56,620
24,500 AmerUs Group Co. ............... 1,157,625
65,200 CNA Financial Corp. *........... 1,829,512
8,800 Commerce Group, Inc. ........... 545,424
2,000 Crawford & Co., Class B......... 14,300
13,600 Delphi Financial Group, Inc.,
Class A....................... 584,800
133 Donegal Group, Inc. ............ 2,187
1,400 FBL Financial Group, Inc., Class
A............................. 39,200
1,400 FPIC Insurance Group, Inc. *.... 45,010
2,600 Great American Financial
Resources, Inc................ 44,044
77,000 HCC Insurance Holdings, Inc. ... 2,784,320
1,279 Kansas City Life Insurance
Co. .......................... 62,364
30,815 Max Re Capital Ltd. ............ 725,077
26,101 Meadowbrook Insurance Group,
Inc. *........................ 137,030
400 Merchants Group, Inc. .......... 9,740
4,611 Midland Co. .................... 145,293
28,700 National Financial Partners
Corp. ........................ 1,142,260
767 National Western Life Insurance
Co., Class A *................ 131,111
3,200 NYMAGIC, Inc. .................. 75,840
200 Ohio Casualty Corp. *........... 4,596
46,100 PacifiCare Health Systems, Inc.
*............................. 2,624,012
13,500 Presidential Life Corp. ........ 219,780
2,900 RTW, Inc. *..................... 30,450
12,300 Scottish Re Group Ltd. ......... 276,996
12,300 Selective Insurance Group,
Inc. ......................... 568,629
14,400 StanCorp Financial Group,
Inc. ......................... 1,220,832
3,544 State Auto Financial Corp. ..... 94,341
24,100 The Phoenix Companies, Inc. .... 307,998
5,700 UICI............................ 138,225
3,380 Unico American Corp. *.......... 33,797
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, INSURANCE continued
6,800 United Fire & Casualty Co. ..... $ 230,044
8,100 W. R. Berkley Corp. ............ 401,760
------------
17,018,088
------------
IT HARDWARE - 5.0%
4,500 American Technical Ceramics
Corp. *....................... 35,910
69,100 Amphenol Corp., Class A......... 2,559,464
48,046 Avocent Corp. *................. 1,232,860
2,500 Blonder Tongue Laboratories,
Inc. *........................ 9,050
4,191 Cobra Electronics Corp. *....... 31,642
188,400 Crown Castle International Corp.
*............................. 3,025,704
25,303 Digi International, Inc. *...... 347,157
6,923 EMS Technologies, Inc. *........ 94,153
24,233 Energy Conversion Devices, Inc.
*............................. 550,816
500 Espey Manufacturing &
Electronics Corp.............. 13,175
200 Globecomm Systems, Inc. *....... 1,190
99,800 Harris Corp. ................... 3,258,470
4,100 inTEST Corp. *.................. 17,056
103,083 Lam Research Corp. *............ 2,974,975
100 MEMC Electronic Materials, Inc.
*............................. 1,345
1,600 Merrimac Industries, Inc. *..... 14,320
17,130 Microsemi Corp. *............... 279,048
8,000 Peak International Ltd. *....... 30,400
1,800 Photronics, Inc. *.............. 32,580
200 Semitool, Inc. *................ 2,040
900 Simclar, Inc. *................. 3,960
400 Sparton Corp. *................. 3,732
5,400 Stoneridge, Inc. *.............. 65,934
35,386 Symmetricom, Inc. *............. 392,431
17,808 ViaSat, Inc. *.................. 332,832
24,300 Virage Logic Corp. *............ 266,328
1,300 Woodhead Industries, Inc. ...... 17,680
------------
15,594,252
------------
LAND & WATER TRANSPORTATION - 2.6%
3,976 Alexander & Baldwin, Inc. ...... 163,811
8,100 Celadon Group, Inc. *........... 150,255
5,300 CNF, Inc. ...................... 247,987
5,700 Covenant Transport, Inc., Class
A *........................... 100,320
2,190 EGL, Inc. *..................... 49,932
21,000 General Maritime Corp. *........ 1,017,240
3,700 Hub Group, Inc., Class A *...... 231,879
100 International Shipholding Corp.
*............................. 1,520
2,830 Knightsbridge Tankers Ltd. ..... 110,257
1,350 Marten Transport Ltd. *......... 28,796
5,300 Nordic American Tanker Shipping
Ltd........................... 251,485
17,225 Overnite Corp. ................. 551,028
32,300 Overseas Shipholding Group,
Inc. ......................... 2,031,992
18,500 Ryder Systems, Inc. ............ 771,450
</Table>
See the accompanying notes to the financial statements.
36 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg U.S. Discovery Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, LAND & WATER
TRANSPORTATION continued
6,797 SCS Transportation, Inc. *...... $ 126,356
31,200 Teekay Shipping Corp. .......... 1,402,440
300 Transport Corp. of America, Inc.
*............................. 2,646
6,300 U.S. Xpress Enterprises, Inc.,
Class A *..................... 103,005
300 USA Truck, Inc. *............... 6,885
45,300 Werner Enterprises, Inc. ....... 880,179
------------
8,229,463
------------
METAL PRODUCTS & MACHINERY - 4.6%
2,300 Acme United Corp. .............. 32,200
3,100 Alamo Group, Inc. .............. 76,694
2,800 Allied Motion Technologies, Inc.
*............................. 20,804
4,600 Astec Industries, Inc. *........ 101,430
3,300 Baldor Electric Co. ............ 85,173
1,700 Blount International, Inc. *.... 28,866
5,500 Bonso Electronics International,
Inc........................... 24,310
6,500 Cummins, Inc. .................. 457,275
1,800 Eastern Co. .................... 39,780
5,500 Energizer Holdings, Inc. *...... 328,900
5,600 EnerSys *....................... 73,360
22,800 EnPro Industries, Inc. *........ 627,000
8,700 ESCO Technologies, Inc. *....... 699,045
3,206 Evans & Sutherland Computer
Corp. *....................... 17,633
400 Federal Screw Works............. 8,850
6,300 Gehl Co. *...................... 168,273
10,800 Gerber Scientific, Inc. *....... 78,624
15,100 Graco, Inc. .................... 609,436
2,600 Greenbrier Cos., Inc. .......... 91,234
2,693 Hardinge, Inc. ................. 36,221
6,700 Hawk Corp., Class A *........... 68,340
2,200 International Aluminum Corp. ... 73,062
41,900 Kennametal, Inc. ............... 1,989,831
2,900 L.S. Starrett Co., Class A...... 56,260
49,300 Lennox International, Inc. ..... 1,080,656
1,000 Lincoln Electric Holdings,
Inc. ......................... 30,080
1,400 Material Sciences Corp. *....... 18,830
2,300 Mestek, Inc. *.................. 51,865
1,000 NCI Building Systems, Inc. *.... 38,600
1,200 P & F Industries, Inc. *........ 18,072
300 Peerless Manufacturing Co. *.... 4,332
4,400 Powell Industries, Inc. *....... 81,488
2,085 Q.E.P. Co., Inc. *.............. 29,711
31,100 Regal-Beloit Corp. ............. 895,369
7,250 Rimage Corp. *.................. 143,913
12,200 Robbins & Myers, Inc. .......... 268,522
4,600 Rofin-Sinar Technologies, Inc.
*............................. 147,844
1,200 Sauer-Danfoss, Inc. ............ 27,156
3,700 SL Industries, Inc. *........... 51,689
12,900 Standard Motor Products,
Inc. ......................... 150,930
6,100 Standex International Corp. .... 166,530
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, METAL PRODUCTS &
MACHINERY continued
1,700 Tecumseh Products Co., Class B.. $ 66,530
200 Tennant Co. .................... 7,738
1,900 Thomas Industries, Inc. ........ 75,316
84,700 Timken Co. ..................... 2,315,697
14,300 Toro Co. ....................... 1,265,550
1,400 Twin Disc, Inc. ................ 34,657
200 Velcro Industries N.V. ......... 2,646
5,500 Water Pik Technologies, Inc.
*............................. 108,350
9,600 Woodward Governor Co. .......... 688,320
25,700 York International Corp. ....... 1,006,926
------------
14,569,918
------------
MISCELLANEOUS FINANCE - 1.4%
22,900 A.G. Edwards, Inc. ............. 1,025,920
29,600 Affiliated Managers Group, Inc.
*............................. 1,836,088
3,900 Cohen & Steers, Inc. ........... 64,350
41,130 Knight Trading Group, Inc.,
Class A *..................... 396,493
2,833 Maxcor Financial Group, Inc. ... 33,257
16,500 Raymond James Financial,
Inc. ......................... 499,950
4,400 Stifel Financial Corp. *........ 95,920
19,200 SWS Group, Inc. ................ 307,776
------------
4,259,754
------------
OIL & COAL RESOURCES - 3.2%
1,400 Barnwell Industries, Inc. ...... 74,270
14,200 Berry Petroleum Co., Class A.... 730,590
14,700 Callon Petroleum Co. *.......... 228,438
21,300 Carrizo Oil & Gas, Inc. *....... 361,887
1,700 Castle Energy Corp. ............ 19,975
43,100 Chesapeake Energy Corp. ........ 945,614
22,100 Comstock Resources, Inc. *...... 635,154
19,000 CONSOL Energy, Inc. ............ 893,380
12,800 Energy Partners Ltd. *.......... 332,416
7,100 Forest Oil Corp. *.............. 287,550
2,200 Houston Exploration Co. *....... 125,290
563 Isramco, Inc. *................. 4,909
7,700 KCS Energy, Inc. *.............. 118,272
14,100 Meridian Resource Corp. *....... 72,756
3,100 Noble Energy, Inc. ............. 210,862
5,100 Patina Oil & Gas Corp. ......... 204,000
600 Penn Virginia Corp. ............ 27,540
6,500 Petrohawk Energy Corp. *........ 68,120
10,100 Remington Oil & Gas Corp. *..... 318,352
4,455 Resource America, Inc., Class
A............................. 156,125
10,800 Southwestern Energy Co. *....... 613,008
12,800 Stone Energy Corp. *............ 621,696
14,200 Swift Energy Co. *.............. 403,848
900 Tel Offshore Trust.............. 7,353
53,500 Ultra Petroleum Corp. *......... 2,717,801
------------
10,179,206
------------
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 37
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg U.S. Discovery Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK continued
OIL DISTRIBUTION - 1.3%
900 Adams Resources & Energy,
Inc. ......................... $ 18,765
20,100 Ashland, Inc. .................. 1,356,147
21,900 Frontier Oil Corp. ............. 794,094
7,200 Premcor, Inc. .................. 429,696
10,200 Questar Corp. .................. 604,350
25,300 Tesoro Petroleum Corp. *........ 936,606
------------
4,139,658
------------
OIL DRILLING & SERVICES - 2.8%
4,500 Dawson Geophysical Co. *........ 108,900
116,900 Grant Prideco, Inc. *........... 2,824,304
5,400 Lufkin Industries, Inc. ........ 260,766
3,100 NATCO Group, Inc., Class A *.... 33,697
25,013 National-Oilwell, Inc. *........ 1,168,100
31,600 Newpark Resources, Inc. *....... 186,124
2,300 Oceaneering International, Inc.
*............................. 86,250
9,600 Oil States International, Inc.
*............................. 197,280
5,300 Pride International, Inc. *..... 131,652
3,500 TETRA Technologies, Inc. *...... 99,540
64,200 Tidewater, Inc. ................ 2,494,812
15,400 Todco, Class A *................ 397,936
500 Unit Corp. *.................... 22,585
4,700 Veritas DGC, Inc. *............. 140,812
31,100 W-H Energy Services, Inc. *..... 744,223
------------
8,896,981
------------
PHOTOOPTICAL, MICROS & OFFICE MACHINERY - 1.9%
40,200 Diebold, Inc. .................. 2,204,970
1,200 Global Payment Technologies,
Inc. *........................ 7,536
3,900 Interphase Corp. *.............. 24,843
13,100 M-Systems Flash Disk Pioneers
Ltd. *........................ 288,724
5,100 PAR Technology Corp. *.......... 79,407
4,300 Printronix, Inc. ............... 69,230
8,182 SafeNet, Inc. *................. 239,814
100 SBS Technologies, Inc. *........ 1,115
98,000 Storage Technology Corp. *...... 3,018,401
12,556 X-Rite, Inc. ................... 188,842
------------
6,122,882
------------
PUBLISHING, BROADCASTING & CINEMA - 1.6%
64,500 American Greetings Corp., Class
A............................. 1,643,460
4,900 Bowne & Co., Inc. .............. 73,696
3,100 Cadmus Communications Corp. .... 43,769
8,500 Consolidated Graphics, Inc. *... 447,100
810 Image Entertainment, Inc. *..... 4,431
5,500 John H. Harland Co. ............ 188,980
16,500 Media General, Inc., Class A.... 1,020,525
2,500 Outlook Group Corp. ............ 18,325
2,700 Point.360 *..................... 9,369
16,900 Reader's Digest Association,
Inc. ......................... 292,539
18,200 Regent Communications, Inc. *... 97,370
26,923 Scholastic Corp. *.............. 993,189
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, PUBLISHING, BROADCASTING &
CINEMA continued
2,600 Tufco Technologies, Inc. *...... $ 16,770
5,800 World Wrestling Entertainment,
Inc. ......................... 69,600
------------
4,919,123
------------
REAL ESTATE DEVELOPMENT - 0.7%
800 AMREP Corp. .................... 19,600
3,801 Avatar Holdings, Inc. *......... 178,077
2,300 ILX Resorts, Inc. .............. 23,529
500 J.W. Mays, Inc. *............... 8,440
500 Levitt Corp., Class A........... 12,820
600 Patriot Transportation Holding,
Inc. *........................ 31,242
60,207 Stewart Enterprises, Inc., Class
A *........................... 370,273
996 Tarragon Corp. *................ 20,109
36,300 The Brink's Co. ................ 1,255,980
7,900 United Capital Corp. *.......... 193,076
------------
2,113,146
------------
REAL ESTATE INVESTMENT TRUSTS - 5.0%
8,400 Bedford Property Investors,
Inc. ......................... 183,372
46,000 Brandywine Realty Trust......... 1,306,400
19,064 Capital Automotive REIT......... 631,400
23,700 CBL & Associates Properties,
Inc. ......................... 1,694,787
3,900 Commercial NET Lease Realty..... 71,955
12,000 CRT Properties, Inc. ........... 261,360
17,900 Entertainment Properties
Trust......................... 741,597
37,700 Friedman, Billings, Ramsey
Group, Inc., Class A.......... 598,299
203,500 HRPT Properties Trust........... 2,423,685
100 Investors Real Estate Trust..... 933
7,400 LTC Properties, Inc. ........... 128,390
7,700 Mission West Properties,
Inc. ......................... 81,620
700 National Health Investors,
Inc. ......................... 18,186
3,500 National Health Realty, Inc. ... 65,100
9,600 One Liberty Properties, Inc. ... 179,136
6,324 Origen Financial, Inc. ......... 43,699
16,800 Parkway Properties, Inc. ....... 784,560
4,500 Pennsylvania Real Estate
Investment Trust.............. 181,440
2,500 Presidential Realty Corp., Class
B............................. 22,500
7,200 PS Business Parks, Inc. ........ 290,160
27,100 Reckson Associates Realty
Corp. ........................ 831,970
5,500 Sizeler Property Investors,
Inc. ......................... 65,230
45,400 SL Green Realty Corp. .......... 2,552,388
112,400 Trizec Properties, Inc. ........ 2,135,600
200 Urstadt Biddle Properties....... 3,120
2,100 Windrose Medical Properties
Trust......................... 28,791
23,800 Winston Hotels, Inc. ........... 278,460
------------
15,604,138
------------
</Table>
See the accompanying notes to the financial statements.
38 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg U.S. Discovery Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK continued
RESTAURANTS, HOTELS & THEATERS - 3.3%
1,300 Ark Restaurants Corp. .......... $ 42,739
7,700 Aztar Corp. *................... 219,912
100 Benihana, Inc. *................ 1,490
48,039 CBRL Group, Inc. ............... 1,984,011
500 Champps Entertainment, Inc. *... 4,484
122 Checkers Drive-In Restaurants,
Inc. *........................ 1,612
3,500 CKE Restaurants, Inc. *......... 55,475
25,600 Darden Restaurants, Inc. ....... 785,408
11,600 Dave & Buster's, Inc. *......... 216,920
4,700 Dover Motorsports, Inc. ........ 23,735
5,700 Famous Dave's of America, Inc.
*............................. 80,256
1,800 Frisch's Restaurants, Inc. ..... 46,782
17,200 Interstate Hotels & Resorts,
Inc. *........................ 82,904
14,962 Isle of Capri Casinos, Inc. *... 397,091
4,600 J. Alexander's Corp. *.......... 33,350
15,000 Jack in the Box, Inc. *......... 556,500
24,600 Landry's Restaurants, Inc. ..... 711,432
12,400 Lone Star Steakhouse & Saloon,
Inc........................... 358,422
7,000 Luby's, Inc. *.................. 54,250
23,300 Marcus Corp. ................... 477,650
300 Max & Erma's Restaurants, Inc.
*............................. 3,960
3,200 Monarch Casino & Resort, Inc.
*............................. 63,680
24,600 Movie Gallery, Inc. ............ 705,528
2,900 Nathan's Famous, Inc. *......... 24,505
6,000 Orient- Express Hotels Ltd.,
Class A....................... 156,600
300 Papa John's International, Inc.
*............................. 10,416
5,518 Rubio's Restaurants, Inc. *..... 55,180
26,600 Ryan's Restaurant Group, Inc.
*............................. 386,498
5,100 Sands Regent *.................. 51,510
1,900 Star Buffet, Inc. .............. 14,041
36,300 Station Casinos, Inc. .......... 2,452,064
13,200 Vail Resorts, Inc. *............ 333,300
16,200 Worldwide Restaurant Concepts,
Inc. *........................ 82,620
------------
10,474,325
------------
RETAIL - 6.5%
53,200 Aeropostale, Inc. *............. 1,742,300
76,734 American Eagle Outfitters,
Inc. ......................... 2,267,489
996 Arden Group, Inc., Class A...... 70,696
9,700 Blair Corp. .................... 319,809
7,600 Books-A-Million, Inc. .......... 69,160
86,500 Borders Group, Inc. ............ 2,302,629
7,700 Burlington Coat Factory
Warehouse Corp................ 220,990
6,200 Cato Corp., Class A............. 199,950
78,300 Charming Shoppes, Inc. *........ 636,579
100 Chico's FAS, Inc. *............. 2,826
787 Coldwater Creek, Inc. *......... 14,544
7,400 Conn's, Inc. *.................. 139,120
2,900 Cost-U-Less, Inc. *............. 32,364
9,400 Dress Barn, Inc. *.............. 171,268
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, RETAIL continued
12,090 EZCORP, Inc., Class A *......... $ 160,555
8,500 Finlay Enterprises, Inc. *...... 112,285
100 Foodarama Supermarkets, Inc. *.. 3,489
14,400 Foot Locker, Inc. .............. 421,920
10,200 GameStop Corp., Class A *....... 226,032
4,163 GameStop Corp., Class B *....... 92,835
2,746 Goody's Family Clothing,
Inc. ......................... 24,796
1,400 Gottschalks, Inc. *............. 14,490
10,195 GSI Commerce, Inc. *............ 137,938
17,500 Guess?, Inc. *.................. 239,750
5,600 Hastings Entertainment, Inc.
*............................. 37,352
17,800 Insight Enterprises, Inc. *..... 312,568
8,700 Jo-Ann Stores, Inc. *........... 244,383
6,700 Lithia Motors, Inc., Class A.... 171,587
31,400 Longs Drug Stores Corp. ........ 1,074,508
9,500 PC Mall, Inc. *................. 117,990
16,000 Retail Ventures, Inc. *......... 145,760
2,400 Ruddick Corp. .................. 55,560
800 Rush Enterprises, Inc., Class B
*............................. 13,488
300 S&K Famous Brands, Inc. *....... 4,883
7,700 Shoe Carnival, Inc. *........... 134,750
16,900 ShopKo Stores, Inc. *........... 375,518
2,001 Sport Chalet, Inc. *............ 27,116
18,184 Stage Store, Inc. *............. 698,084
16,400 Stein Mart, Inc. *.............. 369,000
25,700 SUPERVALU, Inc. ................ 857,095
1,600 Syms Corp. *.................... 21,200
11,600 Systemax, Inc. *................ 63,104
6,700 The Bon-Ton Stores, Inc. ....... 121,203
400 The Buckle, Inc. ............... 13,964
6,600 The Children's Place Retail
Stores, Inc. *................ 315,150
25,300 The Men's Wearhouse, Inc. *..... 1,067,913
54,800 Toys "R" Us, Inc. *............. 1,411,648
7,600 Trans World Entertainment Corp.
*............................. 111,948
4,600 UGI Corp. ...................... 208,932
47,003 Urban Outfitters, Inc. *........ 2,254,734
1,100 Village Super Market, Inc.,
Class A....................... 45,529
8,000 Weis Markets, Inc. ............. 294,960
20,600 Zale Corp. *.................... 612,232
------------
20,805,973
------------
SOAPS & COSMETICS - 0.3%
1,300 Chattem, Inc. *................. 57,811
4,900 CPAC, Inc. ..................... 26,215
23,400 Elizabeth Arden, Inc. *......... 555,516
10,300 Parlux Fragrances, Inc. *....... 222,995
------------
862,537
------------
SOFTWARE - 5.6%
86,908 Activision, Inc. *.............. 1,286,238
21,750 American Software, Inc., Class
A............................. 141,158
16,918 Autodesk, Inc. ................. 503,480
81,500 Borland Software Corp. *........ 661,780
6,529 Cerner Corp. *.................. 342,838
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 39
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg U.S. Discovery Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, SOFTWARE continued
43,100 CIBER, Inc. *................... $ 313,337
86,700 Cognizant Technology Solutions
Corp., Class A *.............. 4,005,540
4,600 Computer Task Group, Inc. *..... 18,308
25,200 Covansys Corp. *................ 375,858
2,174 CSP, Inc. *..................... 18,522
8,719 Dendrite International, Inc.
*............................. 122,415
10,970 Edgewater Technology, Inc. *.... 45,855
13,300 eFunds Corp. *.................. 296,856
43,900 First American Corp. ........... 1,446,066
433 First Consulting Group, Inc.
*............................. 2,252
859 HMS Holdings Corp. *............ 6,357
24,601 Hyperion Solutions Corp. *...... 1,085,150
21,400 IDX Systems Corp. *............. 743,222
5,767 infoUSA, Inc. .................. 60,611
33,680 Internet Security Systems, Inc.
*............................. 616,344
1,100 Manatron, Inc. *................ 10,021
100 ManTech International Corp.,
Class A *..................... 2,307
4,900 Marchex, Inc., Class B *........ 91,336
11,667 Moldflow Corp. *................ 186,555
5,361 NetManage, Inc. *............... 35,436
1,250 NWH, Inc. ...................... 18,500
300 Omtool Ltd. *................... 2,130
7,800 Pegasus Solutions, Inc. *....... 92,196
77,600 Perot Systems Corp., Class A
*............................. 1,042,944
10,200 Phoenix Technologies Ltd. *..... 97,104
13,700 Redback Networks, Inc. *........ 81,926
1,000 S1 Corp. *...................... 6,940
8,700 Source Interlink Cos., Inc. *... 97,875
1,400 SPSS, Inc. *.................... 24,346
29,900 Sykes Enterprises, Inc. *....... 205,413
53,200 Take-Two Interactive Software,
Inc. *........................ 2,080,120
5,600 TechTeam Global, Inc. *......... 61,768
28,700 THQ, Inc. *..................... 807,618
900 Tripos, Inc. *.................. 3,735
5,000 TriZetto Group, Inc. *.......... 46,550
4,500 TSR, Inc. ...................... 36,315
5,900 Tyler Technologies, Inc. *...... 44,899
13,400 Ulticom, Inc. *................. 149,142
28,799 Witness Systems, Inc. *......... 505,422
------------
17,822,785
------------
TEXTILES & APPAREL - 2.5%
10,700 Ashworth, Inc. *................ 121,873
2,500 Coach, Inc. *................... 141,575
3,100 Culp, Inc. *.................... 18,290
7,366 Cutter & Buck, Inc. ............ 103,271
400 Decorator Industries, Inc. ..... 3,740
6,900 Haggar Corp. ................... 139,311
1,100 Hallwood Group, Inc. *.......... 143,000
900 Hampshire Group Ltd. *.......... 35,955
11,800 Hartmarx Corp. *................ 112,572
1,174 K-Swiss, Inc., Class A.......... 38,777
9,600 Kenneth Cole Productions,
Inc. ......................... 279,744
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, TEXTILES & APPAREL continued
18,000 Liz Claiborne, Inc. ............ $ 722,340
2,900 McRae Industries, Inc., Class
A............................. 33,002
19,000 Phillips-Van Heusen Corp. ...... 506,160
36,700 Polo Ralph Lauren Corp. ........ 1,423,960
3,800 Reebok International Ltd. ...... 168,340
29,400 Russell Corp. .................. 531,552
3,472 Saucony, Inc., Class A.......... 78,814
17,800 Stride Rite Corp. .............. 236,740
2,000 Superior Uniform Group, Inc. ... 27,360
5,464 Tandy Brands Accessories,
Inc. ......................... 81,796
21,900 Timberland Co., Class A *....... 1,553,368
72,100 Tommy Hilfiger Corp. *.......... 843,570
23,100 Wolverine World Wide, Inc. ..... 495,033
------------
7,840,143
------------
WHOLESALE - 1.8%
400 ADDvantage Technologies Group,
Inc. *........................ 1,692
1,300 Agilysys, Inc. ................. 25,558
3,880 All American Semiconductor, Inc.
*............................. 18,740
5,550 Applied Industrial Technologies,
Inc........................... 150,960
7,429 Aristotle Corp. *............... 53,786
35,700 Arrow Electronics, Inc. *....... 904,995
16,900 Aviall, Inc. *.................. 473,200
12,800 Beacon Roofing Supply, Inc. *... 280,128
2,100 Coast Distribution System,
Inc. ......................... 13,692
1,600 Delta Apparel, Inc. ............ 47,360
11,500 Department 56, Inc. *........... 200,790
2,050 DXP Enterprises, Inc. *......... 10,455
15,400 Enesco Group, Inc. *............ 102,410
3,000 First Aviation Services, Inc.
*............................. 14,100
5,314 GTSI Corp. *.................... 51,546
17,000 Hughes Supply, Inc. ............ 505,750
10,100 Huttig Building Products, Inc.
*............................. 110,393
9,000 IKON Office Solutions, Inc. .... 89,010
4,400 Industrial Distribution Group,
Inc. *........................ 39,380
5,503 Insurance Auto Auctions, Inc.
*............................. 153,259
3,500 Lawson Products, Inc. .......... 163,800
1,000 Lazare Kaplan International,
Inc. *........................ 11,410
200 LKQ Corp. *..................... 4,014
5,569 Manchester Technologies, Inc.
*............................. 31,353
2,500 NACCO Industries, Inc., Class
A............................. 254,850
14,200 Nash Finch Co. ................. 539,458
6,514 Navarre Corp. *................. 51,786
200 Noland Co. ..................... 9,476
200 Park-Ohio Holdings Corp. *...... 3,748
11,000 Pomeroy IT Solutions, Inc. *.... 163,900
2,600 Richardson Electronics Ltd. .... 26,702
1,100 Spartan Stores, Inc. *.......... 11,704
2,940 TESSCO Technologies, Inc. *..... 44,394
5,400 Valley National Gases, Inc. .... 88,452
12,300 Ventiv Health, Inc. *........... 282,900
</Table>
See the accompanying notes to the financial statements.
40 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg U.S. Discovery Fund
<Table>
<Caption>
SHARES OR
PRINCIPAL VALUE
- -----------------------------------------------------------
COMMON STOCK, WHOLESALE continued
100 Watsco, Inc., Class B........... $ 4,225
20,900 WESCO International, Inc. *..... 585,200
------------
5,524,576
------------
TOTAL COMMON STOCK (COST
$274,534,909)................. 309,828,169
------------
REPURCHASE AGREEMENT - 1.8%
$5,725,000 State Street Bank dated 3/31/05,
due 4/1/05 at 1.75% with a
maturity value of $5,725,278
(Fully collateralized by a
Fannie Mae security).......... 5,725,000
------------
TOTAL REPURCHASE AGREEMENT (COST
$5,725,000)................... 5,725,000
------------
TOTAL INVESTMENTS (COST
$280,259,909) (a) - 100.3%.... 315,553,169
NET OTHER ASSETS (LIABILITIES) -
(0.3)%........................ (824,788)
------------
NET ASSETS - 100.0%............. $314,728,381
============
</Table>
- ---------------
* Non-income producing security.
(a) The aggregate cost for federal income tax purposes is $280,386,212 and
differs from value by net unrealized appreciation of securities as follows:
<Table>
Unrealized appreciation................... $44,125,448
Unrealized depreciation................... (8,958,491)
-----------
Net unrealized appreciation............... $35,166,957
===========
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 41
Financial Statements
Statement of Portfolio Investments
LAUDUS ROSENBERG U.S. SMALL CAPITALIZATION FUND as of 3/31/05
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK - 99.4%
AGRICULTURE, FOOD & BEVERAGE - 2.9%
31,555 Andersons, Inc. ............. $ 978,205
237,300 Chiquita Brands
International, Inc. ....... 6,354,894
15,837 Diedrich Coffee, Inc. *...... 78,631
196,950 Flowers Foods, Inc. ......... 5,555,960
2,800 Glacier Water Services, Inc.
*.......................... 70,840
8,254 J & J Snack Foods Corp. ..... 386,535
156,800 Lance, Inc. ................. 2,519,776
69,800 National Beverage Corp. ..... 568,870
18,900 Omega Protein Corp. *........ 128,898
307,500 Ralcorp Holdings, Inc. ...... 14,560,124
4,580 Seaboard Corp. .............. 4,914,340
400 Seneca Foods Corp., Class B
*.......................... 6,960
16,100 Zapata Corp. *............... 1,174,495
--------------
37,298,528
-------------
AIRLINES - 0.7%
13,144 Air Methods Corp. *.......... 104,758
95,200 AirNet Systems, Inc. *....... 450,296
257,500 Alaska Air Group, Inc. *..... 7,580,799
101,530 MAIR Holdings, Inc. *........ 905,648
8,200 Offshore Logistics, Inc. *... 273,224
--------------
9,314,725
-------------
AUTOS - 0.2%
13,893 Aftermarket Technology Corp.
*.......................... 229,235
97,900 R&B, Inc. *.................. 1,298,154
22,464 Supreme Industries, Inc.,
Class A.................... 140,849
57,807 Sypris Solutions, Inc. ...... 619,691
--------------
2,287,929
-------------
BANKS & CREDIT INSTITUTIONS - 8.3%
45,449 1st Source Corp. ............ 969,427
177,331 Advanta Corp., Class A....... 3,688,485
5,400 American Community
Bancshares, Inc. (a)....... 76,680
15,497 AmeriServ Financial, Inc.
*.......................... 86,938
8,986 Anchor BanCorp Wisconsin,
Inc. ...................... 252,596
100 Auburn National
Bancorporation, Inc. ...... 2,281
755 Bancorp Rhode Island,
Inc. ...................... 28,237
4,398 BankUnited Financial Corp.,
Class A *.................. 118,130
77,871 Banner Corp. ................ 2,100,181
20,100 Berkshire Bancorp, Inc. ..... 403,085
50,600 Berkshire Hills Bancorp,
Inc. ...................... 1,707,750
16,761 BNCCORP, Inc. *.............. 237,570
301 BOE Financial Services of
Virginia, Inc. ............ 10,008
5,473 Britton & Koontz Capital
Corp. ..................... 100,424
6,000 Camden National Corp. ....... 212,100
24,619 Capital Crossing Bank *...... 809,965
22,600 Carver Bancorp, Inc. ........ 422,620
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, BANKS & CREDIT
INSTITUTIONS continued
8,016 Cascade Financial Corp. ..... $ 148,296
300 Central Bancorp, Inc. ....... 8,115
10,100 Centrue Financial Corp. *.... 277,750
19,642 CFS Bancorp, Inc. ........... 268,899
4,375 Colony Bankcorp, Inc. (a).... 140,656
380,600 Commercial Federal Corp. .... 10,523,589
1,030 Community Bank Shares of
Indiana, Inc. ............. 21,728
100 Community Bankshares, Inc. .. 1,825
1,900 Community Capital Corp. ..... 44,213
92 Community Central Bank
Corp. ..................... 1,449
2,175 Community Financial Corp. ... 48,818
10,800 Community West Bancshares.... 131,760
38,827 Consumer Portfolio Services,
Inc. *..................... 191,417
289 Cooperative Bankshares,
Inc. ...................... 4,913
8,600 Corus Bankshares, Inc. ...... 410,134
36,907 Cowlitz Bancorp *............ 424,431
2,073 Crescent Banking Co. ........ 52,468
4,236 Dearborn Bancorp, Inc. *..... 112,254
19,679 Desert Community Bank........ 549,044
2,089 ECB Bancorp, Inc. ........... 63,715
4,000 EFC Bancorp, Inc. ........... 102,200
9,909 Elmira Savings Bank, FSB..... 305,395
91,800 Federal Agricultural Mortgage
Corp., Class C (a)......... 1,605,582
11,810 FFLC Bancorp, Inc. .......... 489,170
5,500 FFW Corp. ................... 99,688
9,557 Fidelity Southern Corp. ..... 160,558
2,646 First Bancorp of Indiana,
Inc. ...................... 51,597
11,301 First Bancshares, Inc. ...... 234,496
12,550 First BancTrust Corp. ....... 152,796
2,819 First Bank of Delaware *..... 8,739
85,130 First Charter Corp. ......... 1,923,087
64,226 First Citizens BancShares,
Inc., Class A.............. 9,401,401
641 First Defiance Financial
Corp. ..................... 16,666
14,584 First Federal Bancshares of
Arkansas, Inc. ............ 345,349
1,050 First Federal Bancshares,
Inc. ...................... 25,821
5,999 First Federal Bankshares,
Inc. ...................... 130,958
1,753 First Indiana Corp. ......... 42,423
64,400 First Marblehead Corp. *..... 3,704,932
5,093 First Mariner Bancorp *...... 90,248
59,056 First Place Financial
Corp. ..................... 1,080,725
4,000 First Regional Bancorp *
(a)........................ 251,960
300 First West Virginia Bancorp,
Inc. ...................... 6,420
400 FirstBank NW Corp. .......... 11,200
8,426 FirstFed Bancorp, Inc. ...... 69,515
71,400 FirstFed Financial Corp. *... 3,642,114
80 FMS Financial Corp. ......... 1,578
300 Glen Burnie Bancorp.......... 6,300
1,900 Great Pee Dee Bancorp,
Inc. ...................... 28,405
8,200 GS Financial Corp. .......... 155,718
</Table>
See the accompanying notes to the financial statements.
42 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg U.S. Small Capitalization Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, BANKS & CREDIT
INSTITUTIONS continued
2,642 Guaranty Federal Bancshares,
Inc. ...................... $ 59,577
25,078 Habersham Bancorp............ 576,794
23,406 HF Financial Corp. .......... 485,675
9,400 Hingham Institution for
Savings.................... 385,400
16,930 HMN Financial, Inc. ......... 524,830
6,123 Horizon Bancorp.............. 177,567
14,818 Integra Bank Corp. .......... 328,071
45,140 Intervest Bancshares Corp.
*.......................... 812,520
2,509 ITLA Capital Corp. *......... 125,350
2,100 Lincoln Bancorp.............. 38,840
4,459 Long Island Financial
Corp. ..................... 164,805
3,698 LSB Financial Corp. ......... 95,242
12,169 Massbank Corp. .............. 460,597
12,393 Matrix Bancorp, Inc. *....... 154,913
300 Mayflower Co-operative Bank.. 4,554
22,929 Medallion Financial Corp. ... 209,571
2,400 Meta Financial Group,
Inc. ...................... 53,765
100 MetroCorp Bancshares,
Inc. ...................... 2,252
3,400 MFB Corp. ................... 98,090
14,119 MidWestOne Financial Group,
Inc. ...................... 247,083
100 MutualFirst Financial,
Inc. ...................... 2,290
11,016 National Mercantile Bancorp
*.......................... 147,042
10,030 New Hampshire Thrift
Bancshares, Inc. .......... 163,730
13,650 North Valley Bancorp......... 258,668
14,700 Northway Financial, Inc. .... 507,150
43,897 Pacific Mercantile Bancorp
*.......................... 598,755
12,608 Park Bancorp, Inc. .......... 381,707
1,900 Parkvale Financial Corp. .... 52,820
11,990 Patriot National Bancorp,
Inc. ...................... 218,818
2,466 PennFed Financial Services,
Inc. ...................... 36,595
1,414 Peoples Bancorp of North
Carolina................... 25,169
900 Peoples Bancorp, Inc. ....... 18,045
7,300 Peoples BancTrust Co.,
Inc. ...................... 124,100
3,000 Peoples Community Bancorp.... 71,250
1,197 Peoples Financial Corp. ..... 21,815
1,600 Pinnacle Bancshares, Inc. ... 23,440
19,597 Pocahontas Bancorp, Inc. .... 312,572
2,200 Premier Financial Bancorp,
Inc. *..................... 24,673
327 Princeton National Bancorp,
Inc. ...................... 9,810
23,500 Provident Bancorp, Inc. ..... 287,640
46,266 Provident Bankshares
Corp. ..................... 1,524,927
6,353 Provident Financial Holdings,
Inc. ...................... 188,938
44,625 PSB Bancorp, Inc. ........... 705,521
8,250 QCR Holdings, Inc. .......... 174,900
203,800 R & G Financial Corp., Class
B.......................... 6,352,446
59,294 Republic Bancorp, Inc. ...... 802,841
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, BANKS & CREDIT
INSTITUTIONS continued
36,683 Republic Bancorp, Inc., Class
A.......................... $ 814,908
4,519 Republic First Bancorp, Inc.
*.......................... 64,983
95,355 Silicon Valley Bancshares
*.......................... 4,201,341
393 South Street Financial
Corp. ..................... 3,814
14,700 Southern Missouri Bancorp,
Inc. ...................... 232,995
16,937 Southside Bancshares,
Inc. ...................... 352,967
88,793 Sterling Financial Corp. *... 3,169,910
16,178 Team Financial, Inc. ........ 232,559
3,900 Teche Holding Co. ........... 143,325
10,066 TF Financial Corp. (a)....... 288,985
20,500 Timberland Bancorp, Inc. .... 454,075
145,500 UMB Financial Corp. ......... 8,281,859
300 Union Community Bancorp...... 4,837
11,288 United Bancshares, Inc. ..... 172,819
17,280 United Community Financial
Corp. ..................... 191,635
3,687 United Financial Corp. ...... 89,594
17,335 Unity Bancorp, Inc. ......... 208,020
47,442 Wainwright Bank & Trust
Co. ....................... 571,676
305,100 Walter Industries, Inc.
(a)........................ 12,982,004
6,298 Washington Banking Co. ...... 114,624
10,700 Washington Savings Bank,
F.S.B...................... 124,869
4,964 Wells Financial Corp. *...... 151,402
188,300 Westcorp..................... 7,955,674
10,114 WSFS Financial Corp. ........ 531,592
252 WVS Financial Corp. ......... 4,246
--------------
108,182,863
-------------
BASIC MINERALS & METALS - 4.2%
197,000 Cleveland-Cliffs, Inc. ...... 14,355,389
10,633 Insteel Industries, Inc. *
(a)........................ 159,708
62,500 L.B. Foster Co., Class A *... 564,688
295,400 Maverick Tube Corp. *........ 9,603,454
43,927 Northwest Pipe Co. *......... 1,084,558
160,000 NS Group, Inc. *............. 5,025,600
110,983 Olympic Steel, Inc. * (a).... 1,984,376
79,200 Oregon Steel Mills, Inc. *... 1,821,600
60,150 Quanex Corp. ................ 3,207,198
14,300 Reliance Steel & Aluminum
Co. ....................... 572,143
14,542 Roanoke Electric Steel
Corp. ..................... 300,729
242,476 Ryerson Tull, Inc. (a)....... 3,072,171
325,649 Steel Dynamics, Inc. ........ 11,218,607
38,528 Steel Technologies, Inc. .... 924,287
--------------
53,894,508
-------------
BIOTECHNOLOGY - 0.1%
174,531 Harvard Bioscience, Inc. *... 678,926
-------------
CELLULAR & WIRELESS - 0.3%
104,753 USA Mobility, Inc. *......... 3,393,997
-------------
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 43
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg U.S. Small Capitalization Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK continued
CHEMICALS & RUBBER - 3.4%
354,582 A. Schulman, Inc. ........... $ 6,176,818
77,136 American Pacific Corp. *..... 559,236
232,700 Arch Chemicals, Inc. ........ 6,624,969
16,400 Bairnco Corp. ............... 188,928
13,400 Georgia Gulf Corp. .......... 616,132
423,800 Great Lakes Chemical
Corp. ..................... 13,612,456
805,600 Hercules, Inc. *............. 11,665,088
32,300 Hexcel Corp. *............... 500,973
26,379 LESCO, Inc. *................ 382,496
41,400 LSB Industries, Inc. *....... 304,704
2,800 NewMarket Corp. *............ 52,080
19,200 Stepan Co. .................. 451,392
1,000 Synalloy Corp. *............. 10,200
278,400 Terra Industries, Inc. *
(a)........................ 2,160,384
--------------
43,305,856
-------------
COMMERCIAL AIRCRAFT & COMPONENTS - 0.0%
2 Ladish Co., Inc. *........... 24
700 Sequa Corp., Class A *....... 36,295
--------------
36,319
-------------
COMMUNICATIONS UTILITIES - 1.0%
27,300 Atlantic Tele-Network,
Inc. ...................... 874,146
86,218 Audible, Inc. *.............. 1,165,667
12,476 CT Communications, Inc. ..... 131,372
35,160 D&E Communications, Inc. .... 321,011
1,107,599 EarthLink, Inc. *............ 9,968,392
19,500 Hector Communications
Corp. ..................... 419,250
10,400 Newtek Business Services,
Inc. *..................... 39,104
23,427 Zoom Technologies, Inc. *.... 66,064
--------------
12,985,006
-------------
CONSTRUCTION & HOMEBUILDING - 2.2%
51,693 Beazer Homes USA, Inc. (a)... 2,577,413
139,300 Brookfield Homes Corp. ...... 5,879,853
346,300 Granite Construction,
Inc. ...................... 9,097,302
51,246 Insituform Technologies,
Inc., Class A *............ 743,579
49,800 Sterling Construction Co.,
Inc. *..................... 348,600
38,691 Technical Olympic USA,
Inc. ...................... 1,168,468
219,400 Willbros Group, Inc. *....... 4,431,880
53,200 William Lyon Homes, Inc. *... 4,080,440
--------------
28,327,535
-------------
CONSTRUCTION MATERIALS - 0.6%
46,200 Ameron International
Corp. ..................... 1,663,200
170,200 Compass Minerals
International, Inc. ....... 4,331,590
6,600 Continental Materials Corp. *
(a)........................ 198,000
3,200 Devcon International Corp.
*.......................... 43,363
1,100 Oil-Dri Corp. of America..... 20,350
63,629 Rock of Ages Corp. .......... 419,951
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, CONSTRUCTION
MATERIALS continued
225,190 U.S. Concrete, Inc. *........ $ 1,411,941
4,802 United States Lime &
Minerals, Inc. *........... 75,632
--------------
8,164,027
-------------
CONSUMER DURABLES - 0.3%
5,222 Arctic Cat, Inc. ............ 141,307
33,513 Boston Acoustics, Inc. ...... 482,085
126,100 Coachmen Industries, Inc. ... 1,714,960
47,782 Spartan Motors, Inc. ........ 480,209
59,791 Universal Electronics, Inc.
*.......................... 1,009,272
--------------
3,827,833
-------------
DRUGS & PHARMACEUTICALS - 3.0%
398,600 Alpharma, Inc., Class A...... 4,910,752
1,300 BioSource International, Inc.
*.......................... 9,464
115,048 Bone Care International, Inc.
*.......................... 2,984,345
95,100 E-Z-EM, Inc. ................ 1,133,592
309,088 First Horizon Pharmaceutical
Corp. *.................... 5,217,405
238,148 Immucor, Inc. *.............. 7,189,689
17,900 Lifecore Biomedical, Inc.
*.......................... 318,083
39,061 Matrixx Initiatives, Inc.
*.......................... 440,999
1,200 Natural Alternative
International, Inc. *...... 8,100
127,260 Nature's Sunshine Products,
Inc. ...................... 2,185,054
6,991 Polydex Pharmaceuticals Ltd.
*.......................... 34,815
39,733 United Therapeutics Corp.
*.......................... 1,815,599
276,566 Ventana Medical Systems, Inc.
*.......................... 10,360,163
257,400 Weider Nutrition
International, Inc. *...... 1,567,566
--------------
38,175,626
-------------
ELECTRIC UTILITIES - 1.6%
64,500 Central Vermont Public
Service Corp. ............. 1,449,960
305,200 Duquesne Light Holdings,
Inc. ...................... 5,469,184
145,800 El Paso Electric Co. *....... 2,770,200
400 Florida Public Utilities
Co. ....................... 7,520
4,000 Green Mountain Power Corp. .. 117,200
200 Maine & Maritimes Corp. ..... 5,050
76,050 PNM Resources, Inc. ......... 2,029,014
137,800 UIL Holdings Corp. .......... 6,979,570
79,600 Westar Energy, Inc. ......... 1,722,544
--------------
20,550,242
-------------
FINANCIAL INVESTMENTS - 1.3%
213,475 Aaron Rents, Inc. ........... 4,269,500
36,031 California First National
Bancorp.................... 450,388
100 Capital Southwest Corp. ..... 7,910
700 Cherokee, Inc. .............. 23,436
65,256 Electro Rent Corp. * (a)..... 875,736
25,869 ePlus, Inc. *................ 301,891
</Table>
See the accompanying notes to the financial statements.
44 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg U.S. Small Capitalization Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, FINANCIAL INVESTMENTS continued
51,014 G-III Apparel Group Ltd. *... $ 413,213
170,452 MCG Capital Corp. ........... 2,622,404
303,605 Price Communications Corp.
*.......................... 5,313,087
2,277 Shenandoah Telecommunications
Co. ....................... 70,587
1,000 ShoLodge, Inc. *............. 3,875
39,800 Universal Compression
Holdings, Inc. *........... 1,507,226
65,325 Willis Lease Finance Corp.
*.......................... 538,931
--------------
16,398,184
-------------
FOREST PRODUCTS & PAPER - 1.0%
7,500 Chesapeake Corp. ............ 157,650
58,100 CSS Industries, Inc. ........ 2,123,555
3,100 DSG International Ltd. *..... 14,152
115,104 Louisiana-Pacific Corp. ..... 2,893,715
1,700 Nashua Corp. *............... 14,790
2,100 Schweitzer-Mauduit
International, Inc. ....... 70,455
202,130 Universal Forest Products,
Inc. ...................... 7,852,750
--------------
13,127,067
-------------
FURNITURE & HOUSEHOLD ITEMS - 3.9%
58,500 A.T. Cross Co., Class A *.... 345,150
178,400 Acuity Brands, Inc. ......... 4,816,800
28,668 Aldila, Inc. ................ 484,518
26,200 American Biltrite, Inc. *.... 294,750
16,100 American Locker Group, Inc.
*.......................... 86,940
4,300 Atlantis Plastics, Inc.,
Class A *.................. 102,125
103,716 Bassett Furniture Industries,
Inc. ...................... 2,043,205
164,299 Central Garden & Pet Co. *... 7,206,155
3,197 Channell Commercial Corp. *.. 24,073
8,700 Chase Corp. ................. 136,764
12,200 Chromcraft Revington, Inc.
*.......................... 167,384
59,900 Communications Systems,
Inc. ...................... 682,860
29,847 Flexsteel Industries,
Inc. ...................... 492,774
27,554 GameTech International,
Inc. ...................... 81,835
65,200 Genlyte Group, Inc. *........ 5,866,044
185,160 Griffon Corp. *.............. 3,964,276
293,403 JAKKS Pacific, Inc. *........ 6,299,362
2,771 Juno Lighting, Inc. ......... 104,741
450,047 K2, Inc. *................... 6,188,146
196,518 Kimball International, Inc.,
Class B.................... 2,849,511
1,490 Knape & Vogt Manufacturing
Co. ....................... 18,622
166,800 Movado Group, Inc. .......... 3,085,800
6,000 National Presto Industries,
Inc. ...................... 241,800
21,164 Patrick Industries, Inc. *... 218,201
965 Preformed Line Products
Co. ....................... 28,940
2,500 Summa Industries............. 22,250
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, FURNITURE & HOUSEHOLD
ITEMS continued
3,793 Vermont Teddy Bear Co., Inc.
*.......................... $ 20,293
164,600 West Pharmaceutical Services,
Inc. ...................... 3,933,940
--------------
49,807,259
-------------
GAS & OTHER PUBLIC UTILITIES - 0.9%
2,235 American Ecology Corp. ...... 26,440
1,502 Artesian Resources Corp.,
Class A.................... 39,142
15,100 California Water Service
Group...................... 503,887
8,696 Casella Waste Systems, Inc.,
Class A *.................. 115,048
1,300 Chesapeake Utilities
Corp. ..................... 34,580
21,819 Duratek, Inc. *.............. 435,289
2,500 RGC Resources, Inc. ......... 65,250
12,500 SJW Corp. ................... 439,125
172,300 South Jersey Industries,
Inc. ...................... 9,717,720
12,982 Waste Industries USA,
Inc. ...................... 180,450
--------------
11,556,931
-------------
GOVERNMENT AIRCRAFT & DEFENSE - 0.2%
7,400 Allied Defense Group, Inc.
*.......................... 181,226
1,900 Benthos, Inc. *.............. 32,585
41,000 EDO Corp. ................... 1,232,049
3,878 Lowrance Electronics,
Inc. ...................... 94,274
5,185 Orbit International Corp.
*.......................... 47,495
46,980 Todd Shipyards Corp. ........ 888,862
--------------
2,476,491
-------------
HEALTH CARE & HOSPITAL - 1.6%
73,230 Allied Healthcare
International, Inc. *...... 457,688
47,400 American Shared Hospital
Services................... 258,330
297,043 Kindred Healthcare, Inc. *... 10,426,208
75,952 MedCath Corp. *.............. 2,225,394
4,500 MEDTOX Scientific, Inc. *.... 36,000
56,400 National Dentex Corp. *...... 1,111,080
1,200 National Healthcare Corp. ... 41,052
63,292 National Home Health Care
Corp. ..................... 732,921
64,837 Option Care, Inc. ........... 1,334,994
3,300 Pediatric Services of
America, Inc. *............ 40,722
128,400 RehabCare Group, Inc. *...... 3,686,364
66,219 Res-Care, Inc. *............. 828,400
200 SunLink Health Systems, Inc.
*.......................... 1,230
--------------
21,180,383
-------------
INFORMATION & SERVICES - 6.8%
800 Ablest, Inc. *............... 5,840
14,141 Almost Family, Inc. *........ 187,934
19,350 Ambassadors International,
Inc. ...................... 271,500
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 45
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg U.S. Small Capitalization Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, INFORMATION &
SERVICES continued
38,000 American Dental Partners,
Inc. *..................... $ 844,778
113,800 American Retirement Corp. *.. 1,654,652
43,400 Angelica Corp. .............. 1,215,200
252,300 Bluegreen Corp. *............ 3,242,055
146,100 Carriage Services, Inc. *
(a)........................ 813,777
90,122 Century Business Services,
Inc. *..................... 369,500
63,400 Cornell Cos., Inc. *......... 798,840
222,214 Discovery Partners
International *............ 711,085
11,300 Ecology & Environment,
Inc. ...................... 80,004
52,600 Exponent, Inc. *............. 1,256,614
137,881 Forrester Research, Inc. *... 1,941,364
101,152 Healthcare Services Group,
Inc. ...................... 2,452,936
186,502 Heidrick & Struggles
International, Inc. *...... 6,857,678
32,919 Horizon Health Corp. *....... 1,399,058
223,895 Kelly Services, Inc., Class
A.......................... 6,445,937
143,100 Kendle International, Inc.
*.......................... 1,645,650
5,500 Kforce, Inc. *............... 60,445
1,200 Korn/Ferry International *... 22,836
60,520 Layne Christensen Co. *...... 1,045,180
4,800 Mac-Gray Corp. *............. 40,560
1,000 MAXIMUS, Inc. ............... 33,490
229,200 Metal Management, Inc. ...... 5,885,856
57,630 Michael Baker Corp. *........ 1,270,742
11,550 Monro Muffler Brake, Inc.
*.......................... 298,106
1,081,800 MPS Group, Inc. *............ 11,369,717
4,606 National Technical Systems,
Inc. *..................... 19,806
131,019 Navigant International, Inc.
*.......................... 1,789,720
301,439 NCO Group, Inc. *............ 5,893,132
4,450 Nobel Learning Communities,
Inc. *..................... 37,158
69,616 Opinion Research Corp. *..... 488,008
294,572 PAREXEL International Corp.
*.......................... 6,922,441
90,000 Pre-Paid Legal Services, Inc.
(a)........................ 3,045,600
89,084 RCM Technologies, Inc. *..... 448,983
106,450 Schnitzer Steel Industries,
Inc., Class A.............. 3,590,559
34,846 Security National Financial
Corp., Class A *........... 123,703
3,500 SRI/Surgical Express, Inc.
*.......................... 16,975
171,258 Steiner Leisure Ltd. *....... 5,598,424
150,263 TeleTech Holdings, Inc. *.... 1,941,398
150,400 The Brink's Co. ............. 5,203,840
9,624 Vertrue, Inc. * (a).......... 341,075
8,700 Volt Information Sciences,
Inc. *..................... 210,105
--------------
87,892,261
-------------
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK continued
INSTRUMENTS - 6.6%
78,652 Allied Healthcare Products,
Inc. *..................... $ 508,092
274,344 American Medical Systems
Holdings, Inc. *........... 4,713,230
2,932 American Science &
Engineering, Inc. *........ 131,090
287,100 Armor Holdings, Inc. *....... 10,648,539
24,200 ArthroCare Corp. *........... 689,700
12,305 Atrion Corp. ................ 598,441
4,400 Badger Meter, Inc. .......... 116,600
56,234 Bio-Logic Systems Corp. *.... 381,263
460,242 Checkpoint Systems, Inc. *... 7,768,885
2,299 CNS, Inc. ................... 40,922
6,730 Compex Technologies, Inc. *
(a)........................ 33,717
334,211 CONMED Corp. *............... 10,066,435
75,872 Cooper Cos., Inc. ........... 5,531,069
145,114 Datascope Corp. ............. 4,437,586
8,000 DJ Orthopedics, Inc. *....... 200,400
8,346 Enpath Medical, Inc. *....... 67,770
129,720 Esterline Technologies Corp.
*.......................... 4,481,826
10,100 Frequency Electronics,
Inc. ...................... 107,666
239,700 Haemonetics Corp. *.......... 10,105,752
1,709 Integra LifeSciences Holdings
*.......................... 60,191
254,700 Invacare Corp. .............. 11,367,262
3,400 Iridex Corp. *............... 16,867
25,210 K-Tron International, Inc.
*.......................... 767,392
26,326 Kewaunee Scientific Corp. ... 195,865
23,112 LeCroy Corp. *............... 395,909
1,700 Mesa Laboratories, Inc. ..... 23,467
205,200 Mine Safety Appliances
Co. ....................... 7,949,448
66,972 Misonix, Inc. *.............. 401,832
28,185 MTS Systems Corp. ........... 818,211
49,388 New Brunswick Scientific Co.,
Inc. *..................... 270,646
29,264 O.I. Corp. *................. 314,588
26,434 OYO Geospace Corp. *......... 523,393
17,098 Perceptron, Inc. *........... 135,074
20,966 Schmitt Industries, Inc. *
(a)........................ 149,907
27,300 Span-America Medical Systems,
Inc. ...................... 280,098
17,040 Thoratec Corp. *............. 208,229
44,100 Vicon Industries, Inc. *..... 143,325
--------------
84,650,687
-------------
INSURANCE - 4.5%
2,186 American National Insurance
Co. ....................... 231,497
11,203 American Physicians Capital,
Inc. *..................... 383,927
76,900 American Safety Insurance
Holdings Ltd. *............ 1,145,810
91,500 AmerUs Group Co. ............ 4,323,375
53,751 Argonaut Group, Inc. *....... 1,140,596
175,500 Commerce Group, Inc. ........ 10,877,490
</Table>
See the accompanying notes to the financial statements.
46 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg U.S. Small Capitalization Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, INSURANCE continued
1,600 Crawford & Co., Class B...... $ 11,440
238,750 Delphi Financial Group, Inc.,
Class A.................... 10,266,250
44,700 FBL Financial Group, Inc.,
Class A.................... 1,251,600
83,400 FPIC Insurance Group, Inc.
*.......................... 2,681,310
84,200 Great American Financial
Resources, Inc. ........... 1,426,348
15,400 Horace Mann Educators
Corp. ..................... 273,196
28,738 Independence Holding Co. .... 518,146
305,307 Max Re Capital Ltd. ......... 7,183,874
2,700 Merchants Group, Inc. ....... 65,745
46,686 Midland Co. ................. 1,471,076
3,400 National Financial Partners
Corp. ..................... 135,320
19,997 National Western Life
Insurance Co., Class A *... 3,418,287
3,800 NYMAGIC, Inc. ............... 90,060
57,171 Ohio Casualty Corp. *........ 1,313,790
35,917 Presidential Life Corp. ..... 584,729
41,130 RTW, Inc. *.................. 431,865
16,900 SCPIE Holdings, Inc. *....... 186,407
95,013 Selective Insurance Group,
Inc. ...................... 4,392,451
6,383 State Auto Financial
Corp. ..................... 169,915
90,500 UICI......................... 2,194,625
6,276 Unico American Corp. *....... 62,754
7,600 United American Healthcare
Corp. *.................... 43,852
47,178 United Fire & Casualty
Co. ....................... 1,596,032
--------------
57,871,767
-------------
IT HARDWARE - 2.9%
300 Advanced Power Technology,
Inc. *..................... 2,130
2,998 Allen Organ Co., Class B..... 193,386
5,300 American Technical Ceramics
Corp. *.................... 42,294
29,100 Amtech Systems, Inc. *....... 91,665
7,400 Blonder Tongue Laboratories,
Inc. *..................... 26,788
63,985 Cobra Electronics Corp. *.... 483,087
6,452 Comtech Telecommunications
Corp. *.................... 336,149
247,704 Digi International, Inc. *
(a)........................ 3,398,499
38,201 Diodes, Inc. * (a)........... 1,036,393
131,819 EMS Technologies, Inc. *..... 1,792,738
228,934 Energy Conversion Devices,
Inc. * (a)................. 5,203,670
11,000 Espey Manufacturing &
Electronics Corp. ......... 289,850
45,900 Globecomm Systems, Inc. *.... 273,105
70,769 inTEST Corp. *............... 294,399
34,300 Merrimac Industries, Inc.
*.......................... 306,985
353,478 Microsemi Corp. *............ 5,758,157
23,700 Park Electrochemical
Corp. ..................... 480,162
115,201 Peak International Ltd. *.... 437,764
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, IT HARDWARE continued
188,506 Photronics, Inc. *........... $ 3,411,959
21,800 RF Monolithics, Inc. *....... 99,408
42,827 Semitool, Inc. *............. 436,835
3,185 Sparton Corp. *.............. 29,716
3,837 SpectraLink Corp. ........... 54,178
98,456 Spectrum Control, Inc. *..... 735,466
500 Stoneridge, Inc. *........... 6,105
519,566 Symmetricom, Inc. *.......... 5,761,988
37,900 Teledyne Technologies, Inc.
*.......................... 1,186,270
1,000 Trident Microsystems, Inc.
*.......................... 17,680
168,157 ViaSat, Inc. *............... 3,142,854
178,818 Virage Logic Corp. *......... 1,959,845
3,189 Woodhead Industries, Inc. ... 43,370
--------------
37,332,895
-------------
LAND & WATER TRANSPORTATION - 3.5%
2,800 B & H Ocean Carriers Ltd.
*.......................... 57,456
102,938 Celadon Group, Inc. *........ 1,909,500
8,958 Covenant Transport, Inc.,
Class A *.................. 157,661
327,477 EGL, Inc. *.................. 7,466,476
346,600 General Maritime Corp. *..... 16,789,303
3,900 Hub Group, Inc., Class A *... 244,413
4,400 Maritrans, Inc. ............. 83,820
7,537 Marten Transport Ltd. *...... 160,764
3,500 Nordic American Tanker
Shipping Ltd. (a).......... 166,075
195,800 Overseas Shipholding Group,
Inc. ...................... 12,317,778
5,585 SCS Transportation, Inc. *... 103,825
755 Transport Corp. of America,
Inc. *..................... 6,659
68,757 U.S. Xpress Enterprises,
Inc., Class A *............ 1,124,177
77,669 USA Truck, Inc. *............ 1,782,504
45,111 Yellow Roadway Corp. *....... 2,640,798
--------------
45,011,209
-------------
METAL PRODUCTS & MACHINERY - 5.1%
100 Alamo Group, Inc. ........... 2,474
54,816 Allied Motion Technologies,
Inc. *..................... 407,283
15,084 Astec Industries, Inc. *..... 332,602
3,300 Blount International, Inc.
*.......................... 56,034
37,306 Bonso Electronics
International, Inc. ....... 164,893
6,600 Chicago Rivet & Machine
Co. ....................... 205,260
900 Eastern Co. ................. 19,890
4,300 EnerSys *.................... 56,330
187,600 EnPro Industries, Inc. *..... 5,159,000
34,900 ESCO Technologies, Inc. *.... 2,804,215
68,251 Evans & Sutherland Computer
Corp. *.................... 375,381
4,827 Federal Screw Works.......... 106,797
14,149 Flanders Corp. *............. 159,601
44,700 Gehl Co. *................... 1,193,937
187,500 Gerber Scientific, Inc. *.... 1,365,000
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 47
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg U.S. Small Capitalization Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, METAL PRODUCTS &
MACHINERY continued
500 Greenbrier Cos., Inc. ....... $ 17,545
85,092 Hardinge, Inc. .............. 1,144,487
14,000 Hawk Corp., Class A *........ 142,800
37,000 International Aluminum
Corp. ..................... 1,228,770
236,900 Kennametal, Inc. ............ 11,250,380
509,700 Lennox International,
Inc. ...................... 11,172,624
9,100 P & F Industries, Inc. *..... 137,046
800 Peerless Manufacturing Co.
*.......................... 11,552
93 Powell Industries, Inc. *.... 1,722
9,388 Q.E.P. Co., Inc. *........... 133,779
42,200 Rayovac Corp. *.............. 1,755,520
183,000 Regal-Beloit Corp. .......... 5,268,570
13,898 Rofin-Sinar Technologies,
Inc. *..................... 446,682
35,600 SL Industries, Inc. *........ 497,332
124,100 Standard Motor Products,
Inc. ...................... 1,451,970
80,200 Standex International
Corp. ..................... 2,189,460
98,200 Tecumseh Products Co., Class
B.......................... 3,843,057
142,600 Thomas Industries, Inc. ..... 5,652,664
31,500 Twin Disc, Inc. ............. 779,783
3,500 Water Pik Technologies, Inc.
*.......................... 68,950
57,890 Woodward Governor Co. ....... 4,150,713
51,300 York International Corp. .... 2,009,934
--------------
65,764,037
-------------
MISCELLANEOUS FINANCE - 0.8%
102,000 Affiliated Managers Group,
Inc. *..................... 6,327,060
100,100 Knight Trading Group, Inc.,
Class A *.................. 964,964
49,768 Maxcor Financial Group,
Inc. ...................... 584,227
45,300 Stifel Financial Corp. *..... 987,540
82,600 SWS Group, Inc. ............. 1,324,078
--------------
10,187,869
-------------
OIL & COAL RESOURCES - 3.8%
6,800 Barnwell Industries, Inc. ... 360,740
109,800 Berry Petroleum Co., Class
A.......................... 5,649,210
119,500 Cabot Oil & Gas Corp. ....... 6,590,425
14,900 Callon Petroleum Co. *....... 231,546
152,481 Carrizo Oil & Gas, Inc. *.... 2,590,652
58,913 Castle Energy Corp. ......... 692,228
172,700 Comstock Resources, Inc. *... 4,963,398
3,400 Eastern American Natural Gas
Trust...................... 90,440
107,100 Edge Petroleum Corp. *....... 1,773,576
229,500 Energy Partners Ltd. *....... 5,960,115
1,000 Houston Exploration Co. *.... 56,950
10,725 Isramco, Inc. *.............. 93,522
212,000 KCS Energy, Inc. *........... 3,256,320
94,900 Magnum Hunter Resources, Inc.
*.......................... 1,528,839
42,900 Meridian Resource Corp. *.... 221,364
133,000 Penn Virginia Corp. ......... 6,104,700
6,600 Prime Energy, Inc. *......... 130,687
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, OIL & COAL RESOURCES continued
10,100 Range Resources Corp. ....... $ 235,936
155,400 Resource America, Inc., Class
A.......................... 5,445,993
114,800 Swift Energy Co. *........... 3,264,912
2,600 Tel Offshore Trust (a)....... 21,242
--------------
49,262,795
-------------
OIL DISTRIBUTION - 0.5%
9,300 Adams Resources & Energy,
Inc. ...................... 193,905
179,000 Frontier Oil Corp. .......... 6,490,540
--------------
6,684,445
-------------
OIL DRILLING & SERVICES - 2.0%
55,678 Dawson Geophysical Co. *
(a)........................ 1,347,408
34,273 Lufkin Industries, Inc. ..... 1,655,043
20,000 McDermott International, Inc.
*.......................... 378,600
153,900 NATCO Group, Inc., Class A
*.......................... 1,672,893
130,700 Newpark Resources, Inc. *.... 769,823
30,500 Oceaneering International,
Inc. *..................... 1,143,750
109,300 Oil States International,
Inc. *..................... 2,246,115
11,550 TETRA Technologies, Inc. *... 328,482
154,200 Todco, Class A *............. 3,984,528
19,000 Unit Corp. *................. 858,230
345,100 Veritas DGC, Inc. *.......... 10,339,196
26,500 W-H Energy Services, Inc.
*.......................... 634,145
--------------
25,358,213
-------------
PHOTOOPTICAL, MICROS & OFFICE MACHINERY -
0.7%
2,212 Dataram Corp. *.............. 10,388
5,372 Delphax Technologies, Inc.
*.......................... 17,405
200 Global Payment Technologies,
Inc. *..................... 1,256
2,384 Interphase Corp. *........... 15,186
59,300 M-Systems Flash Disk Pioneers
Ltd. *..................... 1,306,972
98,500 PAR Technology Corp. *....... 1,533,645
67,977 Printronix, Inc. ............ 1,094,430
102,185 RadiSys Corp. *.............. 1,446,940
120,067 SafeNet, Inc. *.............. 3,519,163
9,518 SBS Technologies, Inc. *..... 106,126
16,805 X-Rite, Inc. ................ 252,747
--------------
9,304,258
-------------
PUBLISHING, BROADCASTING & CINEMA - 1.2%
112,300 American Greetings Corp.,
Class A.................... 2,861,404
5,900 Catalina Marketing Corp. .... 152,810
114,000 Consolidated Graphics, Inc.
*.......................... 5,996,400
20,279 Emak Worldwide, Inc. *....... 209,888
24,800 John H. Harland Co. ......... 852,128
17,800 Media General, Inc., Class
A.......................... 1,100,930
29,553 Outlook Group Corp. ......... 216,623
</Table>
See the accompanying notes to the financial statements.
48 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg U.S. Small Capitalization Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, PUBLISHING, BROADCASTING &
CINEMA continued
10,109 Regent Communications, Inc.
*.......................... $ 54,083
118,531 Scholastic Corp. *........... 4,372,609
17,815 Tufco Technologies, Inc. *... 114,907
--------------
15,931,782
-------------
REAL ESTATE DEVELOPMENT - 0.8%
34,825 AMREP Corp. ................. 853,213
29,009 Avatar Holdings, Inc. *...... 1,359,071
11,000 ILX Resorts, Inc. (a)........ 112,530
17,100 J.W. Mays, Inc. *............ 288,648
13,800 Levitt Corp., Class A........ 353,832
4,236 Patriot Transportation
Holding, Inc. *............ 220,569
938,605 Stewart Enterprises, Inc.,
Class A *.................. 5,772,420
30,829 Tarragon Corp. * (a)......... 622,438
5,700 United Capital Corp. *....... 139,308
--------------
9,722,029
-------------
REAL ESTATE INVESTMENT TRUSTS - 2.8%
63,300 Bedford Property Investors,
Inc. ...................... 1,381,839
7,300 Boykin Lodging Co. *......... 69,569
382,700 Brandywine Realty Trust...... 10,868,680
29,114 Capital Automotive REIT...... 964,256
34,900 Commercial NET Lease Realty.. 643,905
54,400 Crescent Real Estate Equities
Co. ....................... 888,896
71,900 CRT Properties, Inc. ........ 1,565,982
600 Entertainment Properties
Trust...................... 24,858
137,600 LTC Properties, Inc. ........ 2,387,360
58,400 Mission West Properties,
Inc. ...................... 619,040
3,300 MortgageIT Holdings, Inc. ... 52,635
34,800 National Health Investors,
Inc. ...................... 904,104
10,200 National Health Realty,
Inc. ...................... 189,720
16,900 One Liberty Properties,
Inc. ...................... 315,354
67,600 Origen Financial, Inc. ...... 467,116
107,200 Parkway Properties, Inc. .... 5,006,240
117,900 Pennsylvania Real Estate
Investment Trust........... 4,753,728
1,000 Presidential Realty Corp.,
Class B.................... 9,000
26,400 Sizeler Property Investors,
Inc. ...................... 313,104
93,601 Trizec Properties, Inc. ..... 1,778,419
2,600 Windrose Medical Properties
Trust...................... 35,646
263,300 Winston Hotels, Inc. ........ 3,080,610
--------------
36,320,061
-------------
RESTAURANTS, HOTELS & THEATERS - 3.0%
38,200 Ark Restaurants Corp. ....... 1,255,863
3,915 Champps Entertainment, Inc.
*.......................... 35,106
70,168 Checkers Drive-In
Restaurants, Inc. *........ 926,919
214,800 CKE Restaurants, Inc. *...... 3,404,580
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, RESTAURANTS, HOTELS &
THEATERS continued
139,800 Dave & Buster's, Inc. *...... $ 2,614,260
12,000 Dover Motorsports, Inc. ..... 60,600
146,650 Famous Dave's of America,
Inc. *..................... 2,064,832
26,500 Frisch's Restaurants,
Inc. ...................... 688,735
116,900 Interstate Hotels & Resorts,
Inc. *..................... 563,458
20,200 J. Alexander's Corp. *....... 146,450
261,100 Landry's Restaurants,
Inc. ...................... 7,551,012
210,900 Lone Star Steakhouse &
Saloon, Inc. .............. 6,096,065
16,900 Marcus Corp. ................ 346,450
4,833 Max & Erma's Restaurants,
Inc. *..................... 63,796
11,800 Monarch Casino & Resort, Inc.
*.......................... 234,820
196,505 Movie Gallery, Inc. ......... 5,635,763
33,838 Nathan's Famous, Inc. *...... 285,931
29,838 Papa John's International,
Inc. *..................... 1,035,975
24,004 Rubio's Restaurants, Inc.
*.......................... 240,040
108,051 Ryan's Restaurant Group, Inc.
*.......................... 1,569,981
39,782 Sands Regent * (a)........... 401,798
7,500 Star Buffet, Inc. ........... 55,425
800 Total Entertainment
Restaurant Corp. *......... 9,112
147,400 Vail Resorts, Inc. *......... 3,721,850
1,100 Worldwide Restaurant
Concepts, Inc. *........... 5,610
--------------
39,014,431
-------------
RETAIL - 5.5%
70,350 Aeropostale, Inc. *.......... 2,303,963
1,665 Bebe Stores, Inc. ........... 56,527
66,100 Blair Corp. ................. 2,179,317
32,410 Books-A-Million, Inc. ....... 294,931
193,300 Burlington Coat Factory
Warehouse Corp. ........... 5,547,710
300 Cash America International,
Inc. ...................... 6,579
885,605 Charming Shoppes, Inc. *..... 7,199,968
38,049 Cost-U-Less, Inc. *.......... 424,627
23,403 Dress Barn, Inc. *........... 426,403
107,491 EZCORP, Inc., Class A *...... 1,427,480
52,371 Finlay Enterprises, Inc. *... 691,821
200 Foodarama Supermarkets, Inc.
*.......................... 6,978
22,300 Gottschalks, Inc. *.......... 230,805
56,319 GSI Commerce, Inc. *......... 761,996
46,905 Hastings Entertainment, Inc.
*.......................... 312,856
36,800 Haverty Furniture Cos.,
Inc. ...................... 561,200
251,141 Insight Enterprises, Inc.
*.......................... 4,410,036
158,800 Jo-Ann Stores, Inc. *........ 4,460,692
160,400 Longs Drug Stores Corp. ..... 5,488,888
17,575 PC Mall, Inc. * (a).......... 218,282
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 49
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg U.S. Small Capitalization Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, RETAIL continued
164,200 Retail Ventures, Inc. *...... $ 1,495,862
47,400 REX Stores Corp. *........... 668,340
174,900 Ruddick Corp. ............... 4,048,935
6,000 Rush Enterprises, Inc., Class
A *........................ 94,080
12,100 Rush Enterprises, Inc., Class
B *........................ 204,006
4,000 S&K Famous Brands, Inc. *.... 65,100
421 Shoe Carnival, Inc. *........ 7,368
241,700 ShopKo Stores, Inc. *........ 5,370,574
35,900 Sport Chalet, Inc. *......... 486,481
146,719 Stage Store, Inc. *.......... 5,632,542
119,924 Stein Mart, Inc. *........... 2,698,290
7,200 Syms Corp. *................. 95,400
18,200 Systemax, Inc. *............. 99,008
63,768 The Bon-Ton Stores, Inc. .... 1,153,563
169,800 Trans World Entertainment
Corp. *.................... 2,501,154
17,092 Village Super Market, Inc.,
Class A.................... 707,438
33,900 Weis Markets, Inc. .......... 1,249,893
257,100 Zale Corp. *................. 7,641,011
--------------
71,230,104
-------------
SOAPS & COSMETICS - 0.2%
39,200 Cascade International, Inc. *
(a),(b).................... 0
4,919 Chattem, Inc. *.............. 218,748
35,610 CPAC, Inc. .................. 190,514
5,224 Elizabeth Arden, Inc. *...... 124,018
84,383 Parlux Fragrances, Inc. *
(a)........................ 1,826,891
--------------
2,360,171
-------------
SOFTWARE - 6.8%
245,300 American Software, Inc.,
Class A.................... 1,591,997
4,332 Ansoft Corp. *............... 116,877
172,279 ANSYS, Inc. *................ 5,893,665
36,184 Applix, Inc. *............... 218,009
41,386 Black Box Corp. ............. 1,548,250
618,386 Borland Software Corp. *..... 5,021,294
652,600 CIBER, Inc. *................ 4,744,402
52,800 Computer Task Group, Inc.
*.......................... 210,144
226,790 Covansys Corp. *............. 3,382,573
16,272 CSP, Inc. *.................. 138,637
122,490 Dendrite International, Inc.
*.......................... 1,719,760
111,194 Edgewater Technology, Inc.
*.......................... 464,791
164,578 eFunds Corp. *............... 3,673,381
12,003 EuroWeb International Corp.
*.......................... 39,010
54,835 First Consulting Group, Inc.
*.......................... 285,142
100 HMS Holdings Corp. *......... 740
2,260 Hyperion Solutions Corp. *... 99,689
251,800 IDX Systems Corp. *.......... 8,745,013
49,451 Infocrossing, Inc. * (a)..... 783,304
200 Inforte Corp. *.............. 1,080
42,410 infoUSA, Inc. ............... 445,729
105 Innotrac Corp. *............. 923
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, SOFTWARE continued
219,593 Internet Security Systems,
Inc. *..................... $ 4,018,552
118,953 Keynote Systems, Inc. *...... 1,411,972
100 Kronos, Inc. *............... 5,111
45,439 Manatron, Inc. *............. 413,949
48,122 Marchex, Inc., Class B *
(a)........................ 896,994
15,394 Micros Systems, Inc. *....... 565,114
77,950 Moldflow Corp. *............. 1,246,421
97,797 NetManage, Inc. *............ 646,438
4,571 NetScout Systems, Inc. *..... 20,341
26,832 NWH, Inc. ................... 397,114
1,624 Omtool Ltd. *................ 11,530
89,462 Parametric Technology Corp.
*.......................... 500,093
300 PDF Solutions, Inc. *........ 4,200
163,432 Pegasus Solutions, Inc. *.... 1,931,766
715,100 Perot Systems Corp., Class A
*.......................... 9,610,943
32,274 Phoenix Technologies Ltd.
*.......................... 307,248
173,739 PLATO Learning, Inc. *....... 1,355,164
29,062 Quality Systems, Inc. ....... 1,230,485
122,800 Redback Networks, Inc. *..... 734,344
21,242 S1 Corp. *................... 147,419
300 Segue Software, Inc. *....... 1,593
27 SI International, Inc. *..... 746
45,327 Source Interlink Cos., Inc.
*.......................... 509,929
27,668 SPSS, Inc. *................. 481,147
287,945 Sykes Enterprises, Inc. *.... 1,978,182
171,126 Take-Two Interactive
Software, Inc. *........... 6,691,027
2,922 TALX Corp. .................. 53,064
27,087 TechTeam Global, Inc. *...... 298,770
200,299 THQ, Inc. *.................. 5,636,414
170,900 Tier Technologies, Inc.,
Class B *.................. 1,259,533
700 Tripos, Inc. *............... 2,905
3,094 TriZetto Group, Inc. *....... 28,805
51,100 TSR, Inc. ................... 412,377
18,600 Tyler Technologies, Inc. *... 141,546
115,854 Ulticom, Inc. *.............. 1,289,455
242,016 Witness Systems, Inc. *...... 4,247,381
--------------
87,612,482
-------------
TEXTILES & APPAREL - 1.8%
30,366 Ashworth, Inc. *............. 345,869
1,100 Culp, Inc. *................. 6,490
12,900 Cutter & Buck, Inc. ......... 180,858
74,600 Deckers Outdoor Corp. *
(a)........................ 2,666,204
67,090 Haggar Corp. ................ 1,354,547
13,200 Hallwood Group, Inc. *....... 1,716,000
33,676 Hampshire Group Ltd. *....... 1,345,356
600 Hartmarx Corp. *............. 5,724
19,200 Jaclyn, Inc. *............... 79,488
24,400 McRae Industries, Inc., Class
A.......................... 277,672
235,900 Phillips-Van Heusen Corp. ... 6,284,376
85,600 Russell Corp. ............... 1,547,648
14,720 Saucony, Inc., Class A....... 334,144
</Table>
See the accompanying notes to the financial statements.
50 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg U.S. Small Capitalization Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, TEXTILES & APPAREL continued
2,600 Superior Uniform Group,
Inc. ...................... $ 35,568
100 Tandy Brands Accessories,
Inc. ...................... 1,497
549,700 Tommy Hilfiger Corp. *....... 6,431,490
--------------
22,612,931
-------------
WHOLESALE - 2.4%
27,342 All American Semiconductor,
Inc. *..................... 132,062
6,000 Anixter International *...... 216,900
11,400 Applied Industrial
Technologies, Inc. ........ 310,080
20,838 Aristotle Corp. *............ 150,867
408,600 Aviall, Inc. *............... 11,440,800
10,000 Coast Distribution System,
Inc. ...................... 65,200
22,800 Delta Apparel, Inc. ......... 674,880
149,850 Department 56, Inc. *........ 2,616,381
3,193 DXP Enterprises, Inc. *...... 16,284
29,900 Enesco Group, Inc. *......... 198,835
8,200 First Aviation Services, Inc.
*.......................... 38,540
79,595 GTSI Corp. *................. 772,072
129,305 Handleman Co. ............... 2,451,623
97,800 Industrial Distribution
Group, Inc. *.............. 875,310
49,747 Insurance Auto Auctions, Inc.
*.......................... 1,385,454
5,900 Lazare Kaplan International,
Inc. *..................... 67,319
74,664 Manchester Technologies, Inc.
*.......................... 420,358
40,400 NACCO Industries, Inc., Class
A.......................... 4,118,376
27,349 Navarre Corp. * (a).......... 217,425
6,798 Noland Co. (a)............... 322,089
774 Park-Ohio Holdings Corp. *... 14,505
88,579 Pomeroy IT Solutions, Inc.
*.......................... 1,319,827
21,086 Richardson Electronics
Ltd. ...................... 216,553
13,484 Spartan Stores, Inc. *....... 143,470
20,091 TESSCO Technologies, Inc. *.. 303,374
13,600 Valley National Gases,
Inc. ...................... 222,768
90,416 Ventiv Health, Inc. *........ 2,079,568
3,300 Watsco, Inc., Class B........ 139,425
--------------
30,930,345
-------------
TOTAL COMMON STOCK (COST
$980,445,313).............. 1,280,025,007
-------------
</Table>
<Table>
<Caption>
SHARES OR
PRINCIPAL VALUE
- -----------------------------------------------------------
REPURCHASE AGREEMENT - 0.7%
$ 9,053,000 State Street Bank dated
3/31/05, due 4/1/05 at
1.75% with a maturity value
of $9,053,440 (Fully
collateralized by a Fannie
Mae security).............. $ 9,053,000
-------------
TOTAL REPURCHASE AGREEMENT
(COST $9,053,000).......... 9,053,000
-------------
SECURITIES HELD AS COLLATERAL FOR SECURITIES
LENDING - 1.8%
23,181,539 Pool of various Securities
for Laudus Rosenberg U.S.
Small Capitalization
Fund -- (See note
2 -- Securities Lending)
(c)........................ 23,181,539
-------------
TOTAL SECURITIES HELD AS
COLLATERAL FOR SECURITIES
LENDING (COST
$23,181,539)............... 23,181,539
-------------
TOTAL INVESTMENTS (COST
$1,012,679,852) (d) --
101.9%..................... 1,312,259,546
NET OTHER ASSETS
(LIABILITIES) -- (1.9)%.... (25,003,553)
-------------
NET ASSETS -- 100.0%......... $1,287,255,993
==============
</Table>
- ---------------
* Non-income producing security.
(a) All or a portion of this security was on loan as of March 31, 2005 (See note
2 -- Securities Lending).
(b) Bankrupt security/delisted; fair-valued by Management.
(c) As of March 31, 2005, the cash collateral received from securities on loan
was invested in the following securities:
<Table>
INVESTMENT VEHICLE SHARES VALUE
---------------------------- ---------- -----------
AIM Liquid Assets Portfolio 8,587,899 $8,587,899
AIM Prime Assets Portfolio 6,400,781 6,400,781
AIM Treasury Portfolio 2,081,599 2,081,599
Janus Money Market Fund 1,111,259 1,111,259
Reserve Primary Fund --
Class 8 5,000,000 5,000,000
Scudder Money Market Series
Fund 1 1
-----------
Total Invested Balance $23,181,539
===========
</Table>
- ---------------
(d) The aggregate cost for federal income tax purposes is $1,013,623,745, and
differs from value by net unrealized appreciation of securities as follows:
<Table>
Unrealized appreciation.................. $330,569,679
Unrealized depreciation.................. (31,933,878)
------------
Net unrealized appreciation.............. $298,635,801
============
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 51
Financial Statements
Statement of Portfolio Investments
LAUDUS ROSENBERG INTERNATIONAL EQUITY FUND as of 3/31/05
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK - 92.7%
AUSTRALIA - 4.7%
Agriculture, Food & Beverage - 0.1%
4,158 Australian Agricultural Co.,
Ltd. .......................... $ 5,597
2,683 Coca-Cola Amatil Ltd. ........... 17,807
2,736 Great Southern Plantations
Ltd. .......................... 8,148
1,034 Ridley Corp., Ltd. .............. 1,192
3,794 Timbercorp Ltd. ................. 6,339
-----------
39,083
-----------
Airlines - 0.1%
11,015 Qantas Airways Ltd. ............. 30,248
-----------
Banks & Credit Institutions - 1.9%
1,069 Adelaide Bank Ltd. .............. 9,096
9,356 Australia & New Zealand Banking
Group Ltd. .................... 149,234
6,415 Commonwealth Bank of Australia... 173,483
4,710 National Australia Bank Ltd. .... 103,291
8,703 Westpac Banking Corp. ........... 128,114
-----------
563,218
-----------
Basic Minerals & Metals - 1.0%
8,612 BHP Billiton Ltd. ............... 119,046
4,777 BlueScope Steel Ltd. ............ 32,149
2,645 Downer EDI Ltd. ................. 10,660
3,192 Iluka Resources Ltd. ............ 14,025
2,672 Rio Tinto Ltd. .................. 93,301
8,989 Smorgon Steel Group Ltd. ........ 9,318
5,171 Ticor Ltd. ...................... 5,600
-----------
284,099
-----------
Beer, Liquor & Tobacco - 0.1%
4,511 Lion Nathan Ltd. ................ 25,299
-----------
Construction & Homebuilding - 0.0%
3,633 Sunland Group Ltd. .............. 5,621
-----------
Construction Materials - 0.0%
1,453 Adelaide Brighton Ltd. .......... 1,900
-----------
Electric Utilities - 0.1%
3,387 Australian Gas Light Co.,
Ltd. .......................... 37,204
-----------
Forest Products & Paper - 0.1%
5,555 Amcor Ltd. ...................... 30,767
-----------
Government Aircraft & Defense - 0.0%
2,722 Austal Ltd. *.................... 3,895
-----------
Information & Services - 0.0%
3,327 AWB Ltd. ........................ 11,839
-----------
Instruments - 0.1%
2,086 Ansell Ltd. ..................... 15,878
-----------
Insurance - 0.3%
8,489 Insurance Australia Group
Ltd. .......................... 41,633
3,200 SunCorp.-Metway Ltd. ............ 48,096
-----------
89,729
-----------
Oil & Coal Resources - 0.3%
1,074 MacArthur Coal Ltd. ............. 5,566
9,512 Oil Search Ltd. ................. 17,806
5,958 Santos Ltd. ..................... 41,480
1,470 Washington H. Soul Pattinson &
Co., Ltd. ..................... 11,007
-----------
75,859
-----------
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, AUSTRALIA continued
Oil Distribution - 0.1%
1,725 Caltex Australia Ltd. ........... $ 20,683
-----------
Publishing, Broadcasting & Cinema - 0.1%
5,179 Austereo Group Ltd. ............. 6,811
452 John Fairfax Holdings Ltd. ...... 1,462
3,581 Village Roadshow Ltd. *.......... 7,091
-----------
15,364
-----------
Restaurants, Hotels & Theaters - 0.0%
2,193 Amalgamated Holdings Ltd. ....... 7,125
-----------
Retail - 0.2%
6,758 Coles Myer Ltd. ................. 49,192
-----------
Soaps & Cosmetics - 0.0%
11 Campbell Brothers Ltd. .......... 80
-----------
Wholesale - 0.2%
295 Alesco Corp., Ltd. .............. 1,848
5,242 Boral Ltd. ...................... 24,736
963 Crane Group Ltd. ................ 6,257
826 Sims Group Ltd. ................. 10,798
-----------
43,639
-----------
1,350,722
-----------
AUSTRIA - 0.6%
Basic Minerals & Metals - 0.1%
480 voestalpine AG................... 37,155
-----------
Oil Distribution - 0.5%
420 OMV AG........................... 133,789
-----------
170,944
-----------
BELGIUM - 1.7%
Banks & Credit Institutions - 1.4%
1,200 Fortis........................... 34,279
12,600 Fortis........................... 360,426
-----------
394,705
-----------
Gas & Other Public Utilities - 0.3%
21 Distrigaz........................ 92,713
-----------
487,418
-----------
DENMARK - 0.7%
Agriculture, Food & Beverage - 0.1%
533 Danisco A/S...................... 36,171
-----------
Consumer Durables - 0.2%
1,800 NKT Holding A/S.................. 62,489
-----------
Information & Services - 0.4%
1,200 ISS A/S.......................... 97,763
-----------
196,423
-----------
FINLAND - 1.5%
Airlines - 0.0%
1,001 Finnair Oyj...................... 8,170
-----------
Basic Minerals & Metals - 0.3%
3,200 Outokumpu Oyj.................... 57,351
2,034 Rautaruukki Oyj.................. 27,439
-----------
84,790
-----------
Cellular & Wireless - 0.2%
3,000 Elisa Corp. ..................... 51,076
-----------
</Table>
See the accompanying notes to the financial statements.
52 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg International Equity Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, FINLAND continued
Chemicals & Rubber - 0.2%
3,000 Kemira Oyj....................... $ 46,592
-----------
Electric Utilities - 0.5%
8,800 Fortum Oyj....................... 171,782
-----------
Forest Products & Paper - 0.0%
2,069 M-real Oyj, Class B.............. 12,262
-----------
Land & Water Transportation - 0.2%
2,700 Finnlines Oyj.................... 48,530
-----------
Wholesale - 0.1%
665 Orion Oyj, Class A............... 10,164
271 Orion Oyj, Class B............... 4,163
-----------
14,327
-----------
437,529
-----------
FRANCE - 8.7%
Airlines - 0.2%
2,700 Air France-KLM................... 48,670
-----------
Autos - 0.6%
2,700 PSA Peugeot Citroen.............. 172,014
-----------
Banks & Credit Institutions - 2.7%
5,800 BNP Paribas...................... 411,950
3,200 Societe Generale................. 333,333
-----------
745,283
-----------
Basic Minerals & Metals - 0.0%
280 Nexans SA........................ 11,608
-----------
Chemicals & Rubber - 0.5%
2,100 Compagnie Generale des
Etablissements Michelin, Class
B.............................. 138,373
-----------
Construction Materials - 0.5%
2,450 Compagnie de Saint-Gobain........ 149,655
-----------
Financial Investments - 0.2%
270 Societe Fonciere Financiere et de
Participations (FFP)........... 57,443
-----------
Furniture & Household Items - 0.1%
600 Plastic Omnium SA................ 35,090
-----------
Government Aircraft & Defense - 0.2%
1,500 Thales SA........................ 62,714
-----------
Instruments - 0.2%
600 Bacou-Dalloz..................... 57,158
-----------
Insurance - 0.1%
595 CNP Assurances................... 42,260
-----------
Integrated Oil Cos. - 1.6%
1,920 Total SA......................... 450,406
-----------
Land & Water Transportation - 0.0%
15 Geodis *......................... 1,686
-----------
Metal Products & Machinery - 0.1%
850 Valeo SA......................... 37,935
-----------
Publishing, Broadcasting & Cinema - 1.2%
11,000 Vivendi Universal SA *........... 337,818
-----------
Retail - 0.1%
530 Rallye SA........................ 29,536
-----------
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, FRANCE continued
Textiles & Apparel - 0.4%
1,500 Christian Dior SA................ $ 109,658
-----------
2,487,307
-----------
GERMANY - 5.6%
Autos - 0.7%
4,200 DaimlerChrysler AG............... 188,701
-----------
Cellular & Wireless - 1.4%
19,600 Deutsche Telekom AG *............ 392,540
-----------
Chemicals & Rubber - 2.2%
5,000 BASF AG.......................... 355,127
8,000 Bayer AG......................... 265,128
-----------
620,255
-----------
Drugs & Pharmaceuticals - 0.6%
2,667 Degussa AG....................... 114,730
900 Merck KGaA *..................... 64,929
-----------
179,659
-----------
Gas & Other Public Utilities - 0.0%
69 Contigas Deutsche Energie AG..... 8,690
-----------
Instruments - 0.2%
600 Fresenius AG..................... 67,459
-----------
Metal Products & Machinery - 0.1%
842 Salzgitter AG.................... 18,144
-----------
Miscellaneous Finance - 0.4%
1,400 Deutsche Bank AG................. 121,088
-----------
Soaps & Cosmetics - 0.0%
100 Fuchs Petrolub AG................ 9,073
-----------
1,605,609
-----------
GREECE - 0.1%
Banks & Credit Institutions - 0.1%
120 Bank of Greece................... 15,760
-----------
HONG KONG - 1.6%
Autos - 0.0%
5,000 Johnson Electric Holdings
Ltd. .......................... 4,520
-----------
Banks & Credit Institutions - 0.2%
30,500 BOC Hong Kong (Holdings) Ltd. ... 56,117
-----------
Cellular & Wireless - 0.0%
3,000 SmarTone Telecommunications
Holdings Ltd. ................. 3,308
-----------
Construction & Homebuilding - 0.0%
24,000 Paul Y.-ITC Construction Holdings
Ltd. .......................... 7,693
-----------
Electric Utilities - 0.2%
500 CLP Holdings Ltd. ............... 2,846
9,500 HongKong Electric Holdings
Ltd. .......................... 42,267
-----------
45,113
-----------
IT Hardware - 0.0%
1,000 ASM Pacific Technology Ltd. ..... 4,308
-----------
Land & Water Transportation - 0.2%
5,000 Hutchison Whampoa Ltd. .......... 42,472
6,000 Orient Overseas International
Ltd. .......................... 28,925
-----------
71,397
-----------
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 53
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg International Equity Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, HONG KONG continued
Miscellaneous Finance - 0.1%
3,000 Guoco Group Ltd. ................ $ 30,195
11,000 Sun Hung Kai & Co., Ltd. ........ 3,244
-----------
33,439
-----------
Real Estate Development - 0.7%
6,000 Allied Group Ltd. *.............. 8,885
10,000 Hang Lung Group Ltd. ............ 17,501
23,188 Hang Lung Properties Ltd. ....... 33,596
5,000 Henderson Investment Ltd. ....... 6,924
4,000 Hong Kong Ferry (Holdings) Co.,
Ltd. .......................... 4,795
14,400 Hopson Development Holdings
Ltd............................ 7,939
5,500 Kerry Properties Ltd. ........... 12,023
6,000 MTR Corp., Ltd. ................. 9,232
6,400 New World China Land Ltd. *...... 2,318
6,000 Swire Pacific Ltd., Class A...... 47,504
13,000 Wheelock & Co., Ltd. ............ 18,668
-----------
169,385
-----------
Wholesale - 0.2%
3,500 Esprit Holdings Ltd. ............ 23,896
2,000 Jardine Matheson Holdings
Ltd. .......................... 34,800
5,940 Tan Chong International Ltd. .... 1,150
-----------
59,846
-----------
455,126
-----------
ITALY - 3.5%
Banks & Credit Institutions - 1.1%
40,000 Banca Intesa S.p.A. ............. 203,784
7,920 SanPaolo IMI S.p.A. ............. 124,342
-----------
328,126
-----------
Communications Utilities - 0.4%
30,000 Telecom Italia S.p.A. ........... 114,044
-----------
Construction Materials - 0.2%
743 Italmobiliare S.p.A. ............ 50,416
-----------
Electric Utilities - 0.1%
9,119 C.I.R. S.p.A. -- Compagnie
Industriali Riunite............ 26,962
7,558 Cofide S.p.A. -- Compagnia
Finanziaria de Benedetti....... 9,332
-----------
36,294
-----------
Integrated Oil Cos. - 1.6%
17,500 Eni S.p.A. ...................... 455,558
-----------
Textiles & Apparel - 0.1%
2,000 Benetton Group S.p.a............. 19,339
-----------
1,003,777
-----------
JAPAN - 20.0%
Agriculture, Food & Beverage - 0.2%
2,000 Kinki Coca-Cola Bottling Co.,
Ltd. .......................... 21,485
400 Kirin Beverage Corp. ............ 10,172
2,000 Mikuni Coca-Cola Bottling Co.,
Ltd. .......................... 20,662
-----------
52,319
-----------
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, JAPAN continued
Autos - 1.7%
12,000 Fuji Heavy Industries Ltd. ...... $ 58,788
3,600 Honda Motor Co., Ltd. ........... 180,740
2,000 Topre Corp. ..................... 16,324
6,000 Toyota Motor Corp. .............. 223,822
-----------
479,674
-----------
Banks & Credit Institutions - 2.8%
400 Acom Co., Ltd. .................. 27,113
5,000 Bank of Yokohama Ltd. ........... 30,572
2,000 Chugoku Bank Ltd. ............... 25,206
6,000 Daishi Bank Ltd. ................ 27,206
2,000 Joyo Bank Ltd. .................. 10,789
2,000 Kagoshima Bank Ltd. ............. 16,492
10,000 Mitsui Trust Holdings, Inc. ..... 99,663
18 Mizuho Financial Group, Inc. .... 85,322
3,000 San-in Godo Bank Ltd. ........... 30,151
5,000 Shiga Bank Ltd. ................. 34,031
2,000 Shizuoka Bank Ltd. .............. 20,251
23 Sumitomo Mitsui Financial Group,
Inc. .......................... 156,115
9,000 Sumitomo Trust & Banking Co.,
Ltd. .......................... 58,816
1,100 Takefuji Corp. .................. 74,252
22 UFJ Holdings, Inc. .............. 116,006
-----------
811,985
-----------
Basic Minerals & Metals - 1.3%
1,700 JFE Holdings, Inc. .............. 47,522
50,000 Kobe Steel Ltd. ................. 88,351
61,000 Nippon Steel Corp. .............. 154,553
17,000 Nisshin Steel Co., Ltd. ......... 44,662
2,700 Tokyo Steel Manufacturing Co.,
Ltd. .......................... 39,379
-----------
374,467
-----------
Beer, Liquor & Tobacco - 0.7%
2,000 Asahi Breweries Ltd. ............ 25,972
10 Japan Tobacco, Inc. ............. 111,257
7,000 Kirin Brewery Co., Ltd. ......... 68,390
-----------
205,619
-----------
Cellular & Wireless - 0.2%
9 KDDI Corp. ...................... 44,680
-----------
Chemicals & Rubber - 1.2%
7,000 Bridgestone Corp. ............... 128,991
14,000 Dainippon Ink & Chemicals,
Inc. .......................... 38,351
32,000 Mitsubishi Chemical Corp. ....... 102,318
3,000 Mitsui Chemicals, Inc. .......... 16,801
1,000 Nippon Shokubai Co., Ltd. ....... 9,069
3,000 Sakai Chemical Industry Co.,
Ltd. .......................... 13,884
2,000 Toyo Tire & Rubber Co., Ltd. .... 6,713
6,000 Yokohama Rubber Co., Ltd. ....... 23,841
-----------
339,968
-----------
Communications Utilities - 0.5%
33 Nippon Telegraph & Telephone
Corp. ......................... 144,699
-----------
Construction & Homebuilding - 0.9%
600 Chudenko Corp. .................. 10,294
3,000 Daiwa House Industry Co.,
Ltd. .......................... 34,555
2,000 Kyudenko Corp. .................. 12,752
</Table>
See the accompanying notes to the financial statements.
54 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg International Equity Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, JAPAN continued
Construction & Homebuilding continued
3,000 Maeda Corp. ..................... $ 17,249
3,000 Maeda Road Construction Co.,
Ltd. .......................... 24,850
2,000 Nippo Corp. ..................... 14,491
10,000 Sekisui House Ltd. .............. 107,050
2,000 Taikisha Ltd. ................... 27,805
2,000 Yurtec Corp. .................... 11,967
-----------
261,013
-----------
Construction Materials - 0.5%
10,000 Asahi Glass Co., Ltd. ........... 105,647
2,000 NGK Spark Plug Co., Ltd. ........ 20,737
2,000 Sekisui Jushi Corp. ............. 13,276
-----------
139,660
-----------
Consumer Durables - 0.6%
3,100 Pioneer Corp. ................... 55,908
6,000 Yamaha Motor Co., Ltd. .......... 102,936
-----------
158,844
-----------
Drugs & Pharmaceuticals - 0.1%
200 Cawachi Ltd. .................... 8,508
2,000 Nippon Shinyaku Co., Ltd. ....... 16,922
200 Torii Pharmaceutical Co.,
Ltd. .......................... 4,647
-----------
30,077
-----------
Electric Utilities - 1.6%
2,800 Chubu Electric Power Co.,
Inc. .......................... 67,408
2,800 Kansai Electric Power Co.,
Inc. .......................... 56,283
4,700 Kyushu Electric Power Co.,
Inc. .......................... 100,187
6,200 Tohoku Electric Power Co.,
Inc. .......................... 115,178
4,300 Tokyo Electric Power Co.,
Inc. .......................... 104,525
-----------
443,581
-----------
Information & Services - 0.1%
2,000 Aichi Toyota Motor Co., Ltd. .... 36,462
-----------
Instruments - 0.0%
1,000 Hitachi Medical Corp. ........... 14,099
-----------
Insurance - 0.5%
13,000 Mitsui Sumitomo Insurance Co.,
Ltd. .......................... 119,474
3,000 Nisshin Fire & Marine Insurance
Co., Ltd. ..................... 11,640
-----------
131,114
-----------
IT Hardware - 1.3%
25,000 Hitachi, Ltd. ................... 155,666
3,000 Japan Radio Co., Ltd. *.......... 11,051
13,000 Matsushita Electric Industrial
Co., Ltd. ..................... 192,034
4,000 Toshiba TEC Corp. ............... 19,372
-----------
378,123
-----------
Land & Water Transportation - 1.1%
7 Central Japan Railway Co. ....... 60,079
16 East Japan Railway Co. .......... 86,163
10,000 Kawasaki Kisen Kaisha Ltd. ...... 69,185
2,000 Nippon Yusen Kabushiki Kaisha.... 12,079
23 West Japan Railway Co. .......... 93,969
-----------
321,475
-----------
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, JAPAN continued
Metal Products & Machinery - 0.7%
2,000 Amada Co., Ltd. ................. $ 12,341
1,000 Komatsu Ltd. .................... 7,536
28,000 Mitsubishi Heavy Industries
Ltd. .......................... 74,608
700 Nitto Kogyo Corp. ............... 7,454
700 Sega Sammy Holdings, Inc. ....... 42,670
3,000 Toyo Seikan Kaisha Ltd. ......... 55,843
-----------
200,452
-----------
Oil Distribution - 1.1%
10,000 Cosmo Oil Co., Ltd. ............. 32,442
16,000 Nippon Mining Holdings, Inc. .... 88,108
18,000 Nippon Oil Corp. ................ 128,066
6,000 Showa Shell Sekiyu K.K........... 58,340
-----------
306,956
-----------
Photooptical, Micros & Office Machinery - 0.7%
4,600 Fuji Photo Film Co., Ltd. ....... 168,587
1,100 Glory Ltd. ...................... 20,527
-----------
189,114
-----------
Restaurants, Hotels & Theaters - 0.7%
300 Daiichikosho Co., Ltd. .......... 7,741
1,900 Heiwa Corp. ..................... 32,330
2,000 Kinki Nippon Tourist Co.,
Ltd. .......................... 5,909
1,300 Nintendo Co., Ltd. .............. 142,202
300 Sankyo Co., Ltd. ................ 14,557
6 Taito Corp. ..................... 7,685
-----------
210,424
-----------
Retail - 0.7%
2,200 Aeon Co., Ltd. .................. 37,249
3,000 Ito-Yokado Co., Ltd. ............ 120,045
4,000 Uny Co., Ltd. ................... 48,168
-----------
205,462
-----------
Soaps & Cosmetics - 0.2%
2,000 Kao Corp. ....................... 46,092
-----------
Software - 0.5%
200 Fujitsu Business Systems Ltd. ... 2,844
23,000 Fujitsu Ltd. .................... 138,482
600 TKC Corp. ....................... 10,097
-----------
151,423
-----------
Textiles & Apparel - 0.1%
700 World Co., Ltd. ................. 25,393
-----------
5,703,175
-----------
LUXEMBURG - 0.6%
Basic Minerals & Metals - 0.6%
7,200 Arcelor.......................... 164,972
-----------
NETHERLANDS - 2.6%
Agriculture, Food & Beverage - 0.6%
2,600 Unilever NV...................... 177,402
-----------
Commercial Aircraft & Components - 0.4%
4,200 European Aeronautic Defence &
Space Co. ..................... 125,873
-----------
Insurance - 1.6%
14,500 ING Groep NV..................... 439,085
-----------
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 55
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg International Equity Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, NETHERLANDS continued
Integrated Oil Cos. - 0.0%
53 Royal Dutch Petroleum Co. ....... $ 3,177
-----------
745,537
-----------
NEW ZEALAND - 0.2%
Agriculture, Food & Beverage - 0.0%
724 Sanford Ltd. .................... 2,271
-----------
Airlines - 0.0%
8,299 Air New Zealand Ltd. *........... 8,934
-----------
Banks & Credit Institutions - 0.0%
3,992 Fisher & Paykel Appliances
Holdings Ltd. ................. 8,453
-----------
Construction Materials - 0.2%
4,440 Fletcher Building Ltd. .......... 21,020
-----------
Electric Utilities - 0.0%
2,263 Contact Energy Ltd. ............. 10,487
-----------
Publishing, Broadcasting & Cinema - 0.0%
3,177 Independent Newspapers Ltd. ..... 13,590
-----------
64,755
-----------
NORWAY - 1.4%
Oil & Coal Resources - 1.4%
1,611 Norsk Hydro ASA.................. 133,434
16,000 Statoil ASA...................... 273,660
-----------
407,094
-----------
PORTUGAL - 0.6%
Cellular & Wireless - 0.2%
4,000 Portugal Telecom, SGPS, SA....... 46,995
-----------
Electric Utilities - 0.4%
45,000 Electricidade de Portugal SA..... 125,741
-----------
172,736
-----------
SINGAPORE - 0.7%
Agriculture, Food & Beverage - 0.0%
28,000 Golden Agri-Resources Ltd. *..... 8,319
-----------
Airlines - 0.1%
4,000 Singapore Airlines Ltd. ......... 28,861
4,000 Singapore Airport Terminal
Services Ltd. ................. 5,093
-----------
33,954
-----------
Banks & Credit Institutions - 0.0%
3,000 Hong Leong Finance Ltd. ......... 6,366
-----------
Communications Utilities - 0.3%
44,000 Singapore Telecommunications
Ltd. .......................... 68,828
-----------
Information & Services - 0.0%
6,000 Singapore Technologies
Engineering Ltd. .............. 9,313
-----------
IT Hardware - 0.0%
3,000 WBL Corp., Ltd. ................. 6,112
-----------
Oil Distribution - 0.0%
5,000 Singapore Petroleum Co., Ltd. ... 12,430
-----------
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, SINGAPORE continued
Real Estate Development - 0.3%
14,000 Ascott Group Ltd. ............... $ 4,584
19,000 CapitaLand Ltd. ................. 27,072
3,000 Jardine Cycle & Carriage Ltd. ... 21,282
-----------
52,938
-----------
Restaurants, Hotels & Theaters - 0.0%
9,000 Hotel Properties Ltd. ........... 8,185
-----------
206,445
-----------
SPAIN - 3.6%
Banks & Credit Institutions - 0.9%
20,000 Banco Santander Central Hispano
SA............................. 244,074
-----------
Communications Utilities - 0.1%
1,800 Telefonica SA.................... 31,441
-----------
Construction & Homebuilding - 0.6%
1,768 Abengoa SA....................... 19,439
1,000 Acciona SA....................... 90,455
994 Fomento de Construcciones y
Contratas SA................... 50,938
1,229 Obrascon Huarte Lain SA.......... 14,104
-----------
174,936
-----------
Electric Utilities - 0.9%
11,200 Endesa SA........................ 252,547
-----------
Integrated Oil Cos. - 1.1%
11,900 Repsol YPF SA.................... 315,811
-----------
1,018,809
-----------
SWEDEN - 2.4%
Banks & Credit Institutions - 1.2%
33,000 Nordea Bank AB................... 335,004
-----------
Cellular & Wireless - 0.8%
40,000 TeliaSonera AB................... 238,528
-----------
Health Care & Hospital - 0.3%
5,999 Gambro AB, Class A............... 82,193
-----------
Metal Products & Machinery - 0.1%
600 AB Skf, Class B.................. 28,155
-----------
683,880
-----------
SWITZERLAND - 8.0%
Agriculture, Food & Beverage - 0.0%
52 Barry Callebaut AG *............. 12,445
-----------
Airlines - 0.0%
30 Swissair Group * (a)............. 0
-----------
Chemicals & Rubber - 0.6%
1,500 Ciba Specialty Chemicals AG...... 97,407
823 Syngenta AG...................... 86,243
-----------
183,650
-----------
Construction Materials - 0.2%
824 Holcim Ltd. ..................... 50,848
-----------
Drugs & Pharmaceuticals - 3.0%
5,600 Novartis AG...................... 262,170
5,400 Roche Holding AG................. 580,820
-----------
842,990
-----------
</Table>
See the accompanying notes to the financial statements.
56 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg International Equity Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, SWITZERLAND continued
Electric Utilities - 0.1%
4 Centralschweizerische
Kraftwerke..................... $ 15,102
-----------
Furniture & Household Items - 0.8%
7,200 Compagnie Financiere Richemont
AG, Class A.................... 226,831
-----------
Instruments - 0.1%
99 Leica Geosystems AG *............ 27,825
-----------
Insurance - 1.3%
500 Swiss Life Holding *............. 75,426
1,700 Zurich Financial Services AG..... 299,379
-----------
374,805
-----------
Metal Products & Machinery - 0.8%
15,000 ABB Ltd. *....................... 93,507
191 Saurer AG *...................... 12,579
150 Sulzer AG........................ 64,812
400 Unaxis Holding AG................ 56,381
-----------
227,279
-----------
Miscellaneous Finance - 1.1%
1,674 Credit Suisse Group.............. 72,120
3,000 UBS AG........................... 254,216
-----------
326,336
-----------
Retail - 0.0%
107 Charles Voegele Holding AG....... 6,419
-----------
2,294,530
-----------
UNITED KINGDOM - 23.9%
Agriculture, Food & Beverage - 0.8%
23,000 Unilever plc..................... 227,301
-----------
Banks & Credit Institutions - 5.0%
40,000 Barclays plc..................... 408,911
24,000 HBOS plc......................... 374,143
10,200 HSBC Holdings plc................ 161,323
14,400 Royal Bank of Scotland Group
plc............................ 458,223
-----------
1,402,600
-----------
Basic Minerals & Metals - 0.3%
2,899 Bodycote International plc....... 9,477
77,000 Corus Group plc *................ 78,570
-----------
88,047
-----------
Beer, Liquor & Tobacco - 1.4%
21,600 British American Tobacco plc..... 380,809
1,400 SABMiller plc.................... 21,918
-----------
402,727
-----------
Cellular & Wireless - 2.3%
76,000 O2 plc *......................... 171,255
180,000 Vodafone Group plc............... 477,882
-----------
649,137
-----------
Chemicals & Rubber - 0.2%
14,000 Imperial Chemical Industries
plc............................ 70,766
-----------
Commercial Aircraft & Components - 0.2%
13,139 Rolls-Royce Group plc *.......... 60,580
656,950 Rolls-Royce Group plc, Class B
*.............................. 1,241
-----------
61,821
-----------
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, UNITED KINGDOM continued
Communications Utilities - 1.2%
90,000 BT Group plc..................... $ 349,483
-----------
Construction & Homebuilding - 1.5%
5,400 Barratt Developments plc......... 67,295
2,873 Bellway plc...................... 47,774
9,000 George Wimpey plc................ 74,829
1,426 Mowlem plc....................... 5,416
5,600 Persimmon plc.................... 79,946
12,000 Taylor Woodrow plc............... 69,386
4,000 Westbury plc..................... 35,600
2,000 Wilson Bowden plc................ 43,952
-----------
424,198
-----------
Construction Materials - 0.4%
11,000 Hanson plc....................... 104,032
-----------
Drugs & Pharmaceuticals - 1.1%
600 AstraZeneca plc.................. 23,650
9,600 GlaxoSmithKline plc.............. 220,042
7,200 Shire Pharmaceuticals plc........ 82,243
-----------
325,935
-----------
Electric Utilities - 0.7%
46,000 Centrica plc *................... 200,573
-----------
Financial Investments - 0.1%
2,553 3i Group plc..................... 32,394
-----------
Forest Products & Paper - 1.3%
15,600 Anglo American plc............... 369,948
-----------
Gas & Other Public Utilities - 0.1%
1,976 Severn Trent plc................. 34,165
-----------
Information & Services - 0.1%
2,115 RAC plc.......................... 37,088
-----------
Insurance - 1.7%
28,000 Aviva plc........................ 335,973
30,000 Friends Provident plc............ 100,480
24,539 Old Mutual plc................... 62,366
-----------
498,819
-----------
Integrated Oil Cos. - 3.2%
29,000 BP plc........................... 300,571
66,000 Shell Transport & Trading Co.,
plc............................ 592,392
-----------
892,963
-----------
Land & Water Transportation - 0.0%
428 Arriva plc....................... 4,246
-----------
Miscellaneous Finance - 0.6%
80,000 Legal & General Group plc........ 171,199
-----------
Oil & Coal Resources - 0.5%
7,500 Xstrata plc...................... 143,138
-----------
Restaurants, Hotels & Theaters - 1.0%
16,000 Hilton Group plc................. 91,004
9,599 InterContinental Hotels Group
plc............................ 112,004
877 Luminar plc...................... 8,203
3,500 Whitbread plc.................... 61,606
-----------
272,817
-----------
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 57
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg International Equity Fund
<Table>
<Caption>
SHARES OR
PRINCIPAL VALUE
- -----------------------------------------------------------
COMMON STOCK, UNITED KINGDOM continued
Retail - 0.2%
12,000 Somerfield plc................... $ 47,561
-----------
6,810,958
-----------
TOTAL COMMON STOCK (COST
$22,896,483)................... 26,483,506
-----------
RIGHTS - 0.0%
HONG KONG - 0.0%
Real Estate Development - 0.0%
28,200 New World China Land Ltd. ....... 90
-----------
TOTAL RIGHTS (COST $0)........... 90
-----------
REPURCHASE AGREEMENT - 6.3%
UNITED STATES - 6.3%
$1,815,000 State Street Bank dated 3/31/05,
due 4/1/05 at 1.05% with a
maturity value of $1,815,053
(Fully collateralized by a
Fannie Mae security)........... 1,815,000
-----------
TOTAL REPURCHASE AGREEMENT (COST
$1,815,000).................... 1,815,000
-----------
TOTAL INVESTMENTS (COST
$24,711,483) (b) -- 99.0%...... 28,298,596
NET OTHER ASSETS (LIABILITIES) --
1.0%........................... 286,599
-----------
NET ASSETS -- 100.0%............. $28,585,195
===========
</Table>
- ---------------
* Non-income producing security.
(a) Bankrupt security/delisted; fair-valued by management.
(b) The aggregate cost for federal income tax purposes is $24,800,593 and
differs from value by net unrealized appreciation of securities as follows:
<Table>
Unrealized appreciation.................... $3,592,438
Unrealized depreciation.................... (94,435)
----------
Net unrealized appreciation................ $3,498,003
==========
</Table>
See the accompanying notes to the financial statements.
58 Laudus Funds Annual Report
Financial Statements
Statement of Portfolio Investments
LAUDUS ROSENBERG INTERNATIONAL SMALL CAPITALIZATION FUND as of 3/31/05
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK - 97.6%
AUSTRALIA - 5.1%
Agriculture, Food & Beverage - 0.2%
213,855 Great Southern Plantations
Ltd. ........................ $ 636,897
274,416 Ridley Corp., Ltd. ............ 316,289
210,586 Timbercorp Ltd. ............... 351,862
------------
1,305,048
------------
Autos - 0.0%
4,084 AP Eagers Ltd. *............... 22,904
------------
Banks & Credit Institutions - 0.2%
57,805 Adelaide Bank Ltd. ............ 491,866
86,000 Bendigo Bank Ltd. ............. 631,991
------------
1,123,857
------------
Basic Minerals & Metals - 0.5%
250,000 Croesus Mining NL.............. 90,892
227,120 Downer EDI Ltd. ............... 915,340
6,678 Energy Resources of Australia
Ltd. ........................ 49,075
147,493 GRD NL......................... 236,173
191,105 Iluka Resources Ltd. .......... 839,671
68,879 Macmahon Holdings Ltd. *....... 25,042
73,311 Resolute Mining Ltd. *......... 78,827
725,621 Smorgon Steel Group Ltd. ...... 752,148
58,024 Sons of Gwalia Ltd. * (a)...... 0
56,912 Straits Resources Ltd. *....... 85,847
150,235 Ticor Ltd. .................... 162,700
------------
3,235,715
------------
Beer, Liquor & Tobacco - 0.2%
203,857 Lion Nathan Ltd. .............. 1,143,280
------------
Chemicals & Rubber - 0.0%
9,600 Symex Holdings Ltd. ........... 11,139
7,914 Wattyl Ltd. ................... 19,590
------------
30,729
------------
Communications Utilities - 0.0%
91,973 Commander Communications
Ltd. ........................ 163,635
------------
Construction & Homebuilding - 0.1%
216,563 Sunland Group Ltd. ............ 335,045
------------
Construction Materials - 0.0%
100,418 Adelaide Brighton Ltd. ........ 131,277
------------
Electric Utilities - 0.1%
124,258 Energy Developments Ltd. ...... 363,333
------------
Financial Investments - 0.1%
23,024 Australian Wealth Management
Ltd. *....................... 18,523
83,891 Coates Hire Ltd. .............. 301,756
------------
320,279
------------
Forest Products & Paper - 0.2%
326,036 PaperlinX Ltd. ................ 1,034,042
------------
Government Aircraft & Defense - 0.0%
154,152 Austal Ltd. *.................. 220,602
------------
Health Care & Hospital - 0.1%
63,519 Ramsay Health Care Ltd. *...... 360,652
------------
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, AUSTRALIA continued
Information & Services - 0.2%
270,752 AWB Ltd. ...................... $ 963,426
7,510 Programmed Maintenance Services
Ltd. ........................ 18,416
10,000 S8 Ltd. ....................... 16,090
121,250 Spotless Group Ltd. ........... 478,344
------------
1,476,276
------------
Instruments - 0.2%
140,176 Ansell Ltd. ................... 1,066,983
26,229 Vision Systems Ltd. ........... 23,739
------------
1,090,722
------------
Insurance - 0.1%
174,803 Promina Group Ltd. ............ 667,982
------------
Land & Water Transportation - 0.2%
155,172 Adsteam Marine Ltd. ........... 216,060
25,122 Integrated Group Ltd. ......... 41,781
111,827 Toll Holdings Ltd. ............ 1,209,324
------------
1,467,165
------------
Oil & Coal Resources - 0.8%
42,839 Centennial Coal Co., Ltd. ..... 158,069
131,260 MacArthur Coal Ltd. ........... 680,293
267,064 Oil Search Ltd. ............... 499,942
395,757 Santos Ltd. ................... 2,755,243
129,916 Washington H. Soul Pattinson &
Co., Ltd. ................... 972,807
------------
5,066,354
------------
Oil Distribution - 0.1%
69,304 Caltex Australia Ltd. ......... 830,958
------------
Oil Drilling & Services - 0.0%
165,055 Roc Oil Co., Ltd. *............ 229,821
------------
Publishing, Broadcasting & Cinema - 0.5%
96,260 APN News & Media Ltd. ......... 379,756
321,754 Austereo Group Ltd. ........... 423,118
231,661 John Fairfax Holdings Ltd. .... 749,063
10,000 Prime Television Ltd. ......... 23,593
44,629 Seven Network Ltd. ............ 268,587
49,890 Southern Cross Broadcasting
Australia) Ltd. ............. 513,666
145,756 Ten Network Holdings Ltd. ..... 407,026
186,929 Village Roadshow Ltd. *........ 370,174
------------
3,134,983
------------
Real Estate Development - 0.0%
6,146 Central Equity Ltd. *.......... 10,792
10,156 Villa World Ltd. .............. 11,470
------------
22,262
------------
Restaurants, Hotels & Theaters - 0.1%
102,791 Amalgamated Holdings Ltd. ..... 333,959
------------
Retail - 0.1%
19,437 Brazin Ltd. ................... 33,379
8,647 Colorado Group Ltd. ........... 39,464
219,554 David Jones Ltd. .............. 337,974
52,242 Miller's Retail Ltd. .......... 37,179
------------
447,996
------------
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 59
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg International Small Capitalization Fund
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, AUSTRALIA continued
Soaps & Cosmetics - 0.0%
309 Campbell Brothers Ltd. ........ $ 2,249
------------
Software - 0.1%
179,225 Baycorp Advantage Ltd. ........ 415,919
77,214 Volante Group Ltd. ............ 81,231
------------
497,150
------------
Wholesale - 1.0%
31,224 Alesco Corp., Ltd. ............ 195,642
275,723 Aristocrat Leisure Ltd. ....... 2,171,250
132,249 Australian Pharmaceutical
Industries Ltd. ............. 292,582
358,482 Boral Ltd. .................... 1,691,555
51,910 Crane Group Ltd. .............. 337,302
156,243 GWA International Ltd. ........ 337,205
48,384 Housewares International
Ltd. ........................ 75,229
5,123 Queensland Cotton Holdings
Ltd. ........................ 19,497
79,332 Sigma Co., Ltd. ............... 535,123
75,050 Sims Group Ltd. ............... 981,129
------------
6,636,514
------------
31,694,789
------------
AUSTRIA - 1.3%
Banks & Credit Institutions - 0.1%
4,145 Investkredit Bank AG........... 683,345
------------
Basic Minerals & Metals - 1.2%
20,090 Boehler-Uddeholm AG............ 2,748,328
59,400 voestalpine AG................. 4,597,972
------------
7,346,300
------------
Construction & Homebuilding - 0.0%
503 Allgemeine
Baugesellschaft -- A. Porr AG
*............................ 79,918
------------
Furniture & Household Items - 0.0%
16,800 Head NV *...................... 60,917
------------
8,170,480
------------
BELGIUM - 2.2%
Chemicals & Rubber - 0.1%
21,000 Tessenderlo Chemie NV.......... 913,210
------------
Construction & Homebuilding - 0.2%
2,924 Compagnie Francois d'
Entreprises CFE) *........... 1,155,251
------------
Financial Investments - 0.1%
74,402 Econocom Group................. 652,700
------------
Gas & Other Public Utilities - 0.7%
865 Distrigaz...................... 3,818,887
------------
Information & Services - 0.0%
10,543 Solvus SA *.................... 221,016
------------
Land & Water Transportation - 0.4%
66,600 Compagnie Maritime Belge SA.... 2,543,029
------------
Metal Products & Machinery - 0.3%
86,630 Ion Beam Applications.......... 738,580
54,739 Picanol *...................... 1,316,115
------------
2,054,695
------------
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, BELGIUM continued
Real Estate Development - 0.4%
2,800 Cofinimmo...................... $ 453,057
53,824 Intervest Offices *............ 1,713,828
1,550 Wereldhave Belgium *........... 126,910
------------
2,293,795
------------
Restaurants, Hotels & Theaters - 0.0%
9,253 Quick Restaurants SA........... 183,391
------------
13,835,974
------------
CANADA - 6.7%
Agriculture, Food & Beverage - 0.2%
15,600 Canada Bread Co., Ltd. ........ 706,213
19,700 Saputo, Inc. .................. 588,631
------------
1,294,844
------------
Airlines - 0.1%
300 CHC Helicopter Corp., Class
A............................ 13,762
17,300 Transat A.T., Inc., Class B
*............................ 363,202
------------
376,964
------------
Basic Minerals & Metals - 1.1%
15,200 Agnico-Eagle Mines Ltd. ....... 221,747
13,800 Calfrac Well Services Ltd. *... 371,734
11,800 Cameco Corp. .................. 522,483
6,400 Falconbridge Ltd. ............. 229,582
34,256 IPSCO, Inc. ................... 1,760,297
311,000 Kinross Gold Corp. *........... 1,891,937
76,100 Russel Metals, Inc. ........... 1,013,325
23,300 Teck Cominco Ltd., Class B..... 863,748
------------
6,874,853
------------
Beer, Liquor & Tobacco - 0.1%
30,000 Rothmans, Inc. ................ 594,867
------------
Biotechnology - 0.1%
40,400 QLT, Inc. *.................... 517,251
------------
Chemicals & Rubber - 0.5%
85,600 Methanex Corp. ................ 1,649,242
34,700 NOVA Chemicals Corp. .......... 1,481,673
------------
3,130,915
------------
Communications Utilities - 0.2%
53,200 Cogeco Cable, Inc. ............ 1,099,310
------------
Drugs & Pharmaceuticals - 0.3%
66,800 Axcan Pharma, Inc. *........... 1,125,250
64,300 Patheon, Inc. *................ 600,562
------------
1,725,812
------------
Electric Utilities - 0.3%
39,900 ATCO Ltd., Class I............. 2,118,920
------------
Forest Products & Paper - 0.4%
79,600 Intertape Polymer Group, Inc.
*............................ 610,562
49,100 Norbord, Inc. ................. 499,989
34,700 West Fraser Timber Co.,
Ltd. ........................ 1,457,007
------------
2,567,558
------------
Furniture & Household Items - 0.1%
700 Dorel Industries, Inc., Class B
*............................ 22,924
49,400 Royal Group Technologies Ltd.
*............................ 522,643
------------
545,567
------------
</Table>
See the accompanying notes to the financial statements.
60 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg International Small Capitalization Fund
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, CANADA continued
Health Care & Hospital - 0.0%
1,700 TLC Vision Corp. *............. $ 16,061
------------
Insurance - 0.3%
237 E-L Financial Corp., Ltd. ..... 75,516
1,000 Fairfax Financial Holdings
Ltd. ........................ 149,341
94,300 Kingsway Financial Services,
Inc. ........................ 1,456,765
------------
1,681,622
------------
IT Hardware - 0.3%
600 ATI Technologies, Inc. *....... 10,355
116,700 Celestica, Inc. *.............. 1,568,411
------------
1,578,766
------------
Land & Water Transportation - 0.1%
48,800 CP Ships Ltd. ................. 690,545
------------
Metal Products & Machinery - 0.3%
161,500 Linamar Corp. ................. 1,748,688
------------
Oil & Coal Resources - 0.4%
428 Paramount Energy Trust......... 6,102
55,700 PetroKazakhstan, Inc., Class
A............................ 2,244,390
------------
2,250,492
------------
Oil Distribution - 0.5%
57,000 ShawCor Ltd. .................. 848,039
266,300 Sherritt International Corp.
*............................ 2,179,088
------------
3,027,127
------------
Publishing, Broadcasting & Cinema - 0.8%
59,300 Alliance Atlantis
Communications, Inc., Class B
*............................ 1,468,960
25,200 Astral Media, Inc. ............ 706,312
1,300 CHUM Ltd., Class B............. 35,459
2,800 Cinram International, Inc. .... 59,409
100 Quebecor Inc., Class B......... 2,566
23,500 Quebecor World, Inc. .......... 550,667
700 Torstar Corp., Class B......... 14,262
99,000 Transcontinental, Inc., Class
A............................ 2,112,808
------------
4,950,443
------------
Real Estate Investment Trusts - 0.2%
46,300 BPO Properties Ltd. ........... 1,517,374
------------
Restaurants, Hotels & Theaters - 0.0%
13,600 Intrawest Corp. ............... 259,893
------------
Retail - 0.2%
9,800 Canadian Tire Corp., Ltd.,
Class A...................... 462,115
2,000 Empire Co., Ltd., Class A...... 56,205
27,100 Hudson's Bay Co. .............. 292,985
4,600 Reitmans (Canada) Ltd., Class
A............................ 104,558
33,600 Sears Canada, Inc. ............ 617,929
------------
1,533,792
------------
Soaps & Cosmetics - 0.1%
35,600 CCL Industries, Inc., Class
B............................ 748,870
------------
Software - 0.1%
70,700 CGI Group, Inc. *.............. 447,043
38,400 Geac Computer Corp., Ltd. *.... 342,152
------------
789,195
------------
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, CANADA continued
Wholesale - 0.0%
6,800 Canfor Corp. *................. $ 91,277
------------
41,731,006
------------
CHINA - 0.6%
Banks & Credit Institutions - 0.1%
240,000 Industrial & Commercial Bank of
China (Asia) Ltd. ........... 323,104
------------
Beer, Liquor & Tobacco - 0.1%
362,000 Beijing Enterprises Holdings
Ltd. ........................ 517,517
------------
Chemicals & Rubber - 0.1%
1,406,000 Sinopec Shanghai Petrochemical
Co., Ltd., Class H........... 572,362
------------
Construction & Homebuilding - 0.2%
533,000 Shanghai Industrial Holdings
Ltd. ........................ 1,127,594
------------
Construction Materials - 0.0%
100,000 Zhejiang Glass Co., Ltd., Class
H *.......................... 28,207
------------
Electric Utilities - 0.0%
374,000 Sinopec Kantons Holdings Ltd.
*............................ 53,707
------------
Land & Water Transportation - 0.1%
2,040,000 China National Aviation Co.,
Ltd. *....................... 447,269
994,000 GZI Transportation Ltd. ....... 315,430
900,000 Sichuan Expressway Co., Ltd.,
Class H *.................... 122,318
715,000 Sinotrans Ltd., Class H........ 206,267
670,000 Tianjin Development Holdings
Ltd. ........................ 274,895
------------
1,366,179
------------
Metal Products & Machinery - 0.0%
16,000 Beiren Printing Machinery
Holdings Ltd., Class H *..... 5,026
------------
3,993,696
------------
DENMARK - 3.5%
Agriculture, Food & Beverage - 0.6%
19,800 Danisco A/S.................... 1,343,673
5,435 Harboes Bryggeri A/S, Class
B............................ 2,152,306
150 Hedegaard A/S *................ 14,497
------------
3,510,476
------------
Chemicals & Rubber - 0.1%
26,100 Auriga Industries A/S, Class
B............................ 623,792
------------
Construction & Homebuilding - 0.0%
1,300 Monberg & Thorsen A/S, Class B
*............................ 100,694
------------
Consumer Durables - 0.5%
98,570 NKT Holding A/S................ 3,421,972
------------
Financial Investments - 0.2%
118,450 Foras Holding A/S.............. 1,498,138
------------
Furniture & Household Items - 0.4%
80,058 A/S Schouw & Co. *............. 2,150,820
300 KOMPAN A/S, Class B............ 65,289
------------
2,216,109
------------
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 61
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg International Small Capitalization Fund
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, DENMARK continued
Information & Services - 0.4%
17,500 ISS A/S........................ $ 1,425,718
16,700 PER Aarsleff A/S, Class B...... 1,019,678
------------
2,445,396
------------
Insurance - 0.0%
3,200 Codan A/S...................... 163,009
------------
Land & Water Transportation - 0.1%
3,525 DFDS A/S *..................... 214,617
15,100 Mols-Linien A/S *.............. 684,902
------------
899,519
------------
Publishing, Broadcasting & Cinema - 0.0%
534 VT Holding..................... 35,679
------------
Real Estate Development - 0.8%
27,650 Jeudan A/S *................... 1,924,629
1,246,200 Keops A/S...................... 1,076,147
23,756 Nordicom A/S *................. 1,118,963
------------
4,119,739
------------
Wholesale - 0.4%
44,288 Dantherm Holding A/S *......... 818,975
11,400 DLH A/S, Class B *............. 1,006,316
3,330 Nowaco Group A/S *............. 412,459
4,050 Sanistal A/S, Class B *........ 379,409
------------
2,617,159
------------
21,651,682
------------
FINLAND - 4.2%
Agriculture, Food & Beverage - 0.4%
164,000 HK Ruokatalo Oyj, Class A *.... 1,935,330
13,978 Lannen Tehtaat Oyj *........... 247,064
165,000 Raisio Group plc, Class V...... 506,082
------------
2,688,476
------------
Airlines - 0.5%
350,000 Finnair Oyj.................... 2,856,623
------------
Basic Minerals & Metals - 1.2%
268,200 Outokumpu Oyj.................. 4,806,714
163,000 Rautaruukki Oyj................ 2,198,924
------------
7,005,638
------------
Beer, Liquor & Tobacco - 0.2%
49,000 Olvi Oyj, Class A *............ 1,035,162
------------
Cellular & Wireless - 0.6%
231,300 Elisa Corp. ................... 3,937,968
------------
Chemicals & Rubber - 0.5%
184,000 Kemira Oyj..................... 2,857,663
------------
Financial Investments - 0.1%
78,000 Rakentajain Konevuokraamo Oyj,
Class B...................... 690,346
------------
Forest Products & Paper - 0.1%
128,500 M-real Oyj, Class B............ 761,541
------------
Furniture & Household Items - 0.0%
7,526 Uponor Oyj..................... 158,454
------------
Land & Water Transportation - 0.1%
16,382 Birka Line AB, Class A *....... 338,524
------------
Metal Products & Machinery - 0.4%
105,500 Wartsila Oyj, Class B.......... 2,797,099
------------
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, FINLAND continued
Miscellaneous Finance - 0.0%
29,700 Norvestia Oyj, Class B......... $ 237,387
------------
Real Estate Development - 0.1%
188,800 Technopolis Oyj................ 858,806
------------
26,223,687
------------
FRANCE - 9.1%
Agriculture, Food & Beverage - 1.3%
54,187 Bongrain SA.................... 3,774,722
216 Evialis *...................... 9,747
126,700 Provimi SA *................... 3,016,667
652 Sucriere de Pithiviers Le
Vieil........................ 491,051
------------
7,292,187
------------
Airlines - 0.7%
244,800 Air France-KLM................. 4,412,789
------------
Banks & Credit Institutions - 0.0%
1,923 Caisse Regionale de Credit
Agricole Mutuel d'Ille-et-
Villaine *................... 219,931
815 Caisse Regionale du Credit
Agricole Mutuel Loire Haute-
Loire........................ 61,752
------------
281,683
------------
Basic Minerals & Metals - 0.9%
40,800 Eramet SLN..................... 4,135,995
34,899 Nexans SA...................... 1,446,868
------------
5,582,863
------------
Construction & Homebuilding - 0.6%
31,400 Eiffage........................ 3,631,992
------------
Construction Materials - 0.8%
51,600 Ciments Francais............... 4,982,689
1,467 SA des Ciments Vicat........... 183,032
------------
5,165,721
------------
Electric Utilities - 0.0%
91 Compagnie Parisienne de
Chauffage Urbain SA.......... 10,558
------------
Financial Investments - 0.7%
16 Paris Orleans et Cie., SA...... 4,200
19,440 Societe Fonciere Financiere et
de Participations (FFP)...... 4,135,902
------------
4,140,102
------------
Forest Products & Paper - 0.2%
3,181 Exacompta Clairefontaine....... 694,541
66,273 Otor........................... 404,818
------------
1,099,359
------------
Furniture & Household Items - 0.1%
500 Plastic Omnium SA.............. 29,242
4,800 Smoby SA....................... 477,230
------------
506,472
------------
</Table>
See the accompanying notes to the financial statements.
62 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg International Small Capitalization Fund
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, FRANCE continued
Information & Services - 0.2%
800,495 A Novo *....................... $ 1,290,047
738 Groupe ONET.................... 274,314
------------
1,564,361
------------
Instruments - 0.9%
39,800 Bacou-Dalloz................... 3,791,510
19,100 Guerbet........................ 2,023,095
------------
5,814,605
------------
Land & Water Transportation - 0.6%
7,141 Bollore Investissement *....... 658,935
29,600 Geodis *....................... 3,327,615
------------
3,986,550
------------
Metal Products & Machinery - 0.5%
24,000 Groupe Finuchem................ 360,262
56,400 Valeo SA....................... 2,517,124
------------
2,877,386
------------
Oil Distribution - 0.0%
733 Esso S.A.F..................... 125,749
------------
Real Estate Development - 0.2%
28,450 Bail Investissement Fonciere... 1,283,031
------------
Restaurants, Hotels & Theaters - 0.5%
15,935 Compagnie des Alpes............ 1,305,757
347,830 Euro Disney S.C.A. *........... 58,767
136,477 Groupe Flo *................... 1,191,939
23,000 Sodexho Alliance SA............ 768,520
------------
3,324,983
------------
Retail - 0.6%
68,400 Rallye SA...................... 3,811,853
------------
Software - 0.3%
13,000 Cap Gemini SA *................ 454,486
34,514 UbiSoft Entertainment SA *..... 1,349,269
------------
1,803,755
------------
56,715,999
------------
GERMANY - 5.9%
Beer, Liquor & Tobacco - 0.0%
5,955 Sektkellerei Schloss Wachenheim
AG........................... 80,490
------------
Construction & Homebuilding - 0.6%
58,800 Bilfinger Berger AG............ 2,926,856
17,410 Hochtief AG.................... 557,752
------------
3,484,608
------------
Construction Materials - 0.5%
54,630 Dyckerhoff AG *................ 3,111,916
------------
Drugs & Pharmaceuticals - 0.2%
14,080 Merck KGaA *................... 1,015,779
------------
Financial Investments - 0.0%
64,247 Bankgesellschaft Berlin AG *... 225,446
------------
Government Aircraft & Defense - 0.4%
41,700 Rheinmetall AG *............... 2,224,715
------------
Health Care & Hospital - 0.1%
61,514 Marseille-Kliniken AG.......... 885,807
------------
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, GERMANY continued
Instruments - 0.9%
51,200 Fresenius AG................... $ 5,756,540
------------
Insurance - 0.2%
51,800 Wuerttembergische
Lebensversicherung AG........ 1,168,705
------------
Metal Products & Machinery - 1.5%
57,000 Deutz AG *..................... 278,540
44,170 Duerr AG *..................... 912,746
43,168 Gildemeister AG *.............. 312,494
91,500 IWKA AG........................ 2,253,490
6,090 KSB AG......................... 1,127,074
3,588 Kuehnle Kopp Kausch AG......... 106,319
2,200 R. Stahl AG.................... 39,972
43,300 REpower Systems AG............. 799,101
150,000 Salzgitter AG.................. 3,232,220
------------
9,061,956
------------
Real Estate Development - 0.6%
95,588 Fraport AG..................... 3,929,414
2,800 Stodiek Europa Immobilien AG... 27,438
------------
3,956,852
------------
Restaurants, Hotels & Theaters - 0.0%
9,897 Sixt AG........................ 183,935
------------
Retail - 0.5%
74,434 Hornbach Baumarkt
Aktiengesellschaft........... 3,263,936
------------
Soaps & Cosmetics - 0.4%
30,500 Fuchs Petrolub AG.............. 2,767,214
------------
37,187,899
------------
GREECE - 0.1%
Banks & Credit Institutions - 0.1%
5,056 Bank of Greece................. 664,001
------------
HONG KONG - 3.1%
Agriculture, Food & Beverage - 0.0%
66,000 First Pacific Co., Ltd. *...... 20,944
45,000 Lam Soon (Hong Kong) Ltd. ..... 17,021
708,000 Vedan International (Holdings)
Ltd. ........................ 126,179
------------
164,144
------------
Banks & Credit Institutions - 0.3%
1,066,000 Asia Financial Holdings
Ltd. ........................ 300,692
998,000 International Bank of Asia
Ltd. ........................ 406,271
308,000 JCG Holdings Ltd. ............. 290,255
285,000 Liu Chong Hing Bank Ltd. ...... 434,844
97,800 Wing Lung Bank Ltd. ........... 724,156
------------
2,156,218
------------
Cellular & Wireless - 0.0%
12,500 SmarTone Telecommunications
Holdings Ltd. ............... 13,783
------------
Communications Utilities - 0.0%
164,000 I-CABLE Communications Ltd. ... 59,402
------------
Construction & Homebuilding - 0.1%
1,194,000 Paul Y.-ITC Construction
Holdings Ltd. ............... 382,724
------------
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 63
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg International Small Capitalization Fund
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, HONG KONG continued
Financial Investments - 0.2%
58,500 Asia Satellite
Telecommunications Holdings
Ltd. ........................ $ 111,759
825,281 Chinese Estates Holdings
Ltd. ........................ 756,571
349,600 HKR International Ltd. ........ 223,001
84,000 Peregrine Investment Holdings
Ltd. * (a)................... 0
------------
1,091,331
------------
Furniture & Household Items - 0.0%
178,000 EganaGoldpfeil Holdings
Ltd. ........................ 40,396
------------
Instruments - 0.0%
50,000 Arts Optical International
Holdings Ltd. *.............. 18,912
268,000 Moulin International Holdings
Ltd. ........................ 192,426
------------
211,338
------------
IT Hardware - 0.1%
161,500 ASM Pacific Technology Ltd. ... 695,750
102,000 Truly International Holdings
Ltd. ........................ 140,589
16,000 Vtech Holdings Ltd. ........... 22,258
------------
858,597
------------
Land & Water Transportation - 0.3%
171,000 NWS Holdings Ltd. ............. 241,174
376,000 Orient Overseas International
Ltd. ........................ 1,812,664
------------
2,053,838
------------
Miscellaneous Finance - 0.1%
29,000 Guoco Group Ltd. .............. 291,884
8,000 Kowloon Development Co., Ltd.
*............................ 9,180
509,000 Sun Hung Kai & Co., Ltd. ...... 150,102
------------
451,166
------------
Publishing, Broadcasting & Cinema - 0.0%
34,000 eSun Holdings Ltd. *........... 9,046
------------
Real Estate Development - 1.3%
179,000 Allied Group Ltd. *............ 265,080
166,000 Allied Properties (H.K.) Ltd.
*............................ 110,676
278,000 Chevalier International
Holdings Ltd. *.............. 324,360
4,000 China Motor Bus Co., Ltd. ..... 33,080
1,000 Hang Lung Group Ltd. .......... 1,750
498,500 Henderson China Holdings
Ltd. ........................ 303,599
294,280 Hong Kong Ferry (Holdings) Co.,
Ltd. ........................ 352,788
125,600 Hopson Development Holdings
Ltd. *....................... 69,247
673,500 Kerry Properties Ltd. ......... 1,472,325
78,000 Miramar Hotel & Investment Co.,
Ltd. ........................ 120,010
1,171,800 New World China Land Ltd. *.... 424,437
1,964,000 Sino Land Co., Ltd. ........... 1,775,301
600,000 Tai Cheung Holdings Ltd. ...... 296,179
235,000 Tian An China Investments Co.,
Ltd. *....................... 65,534
241,820 Tomson Group Ltd. *............ 65,886
612,000 Wheelock & Co., Ltd. .......... 878,842
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, HONG KONG continued
Real Estate Development continued
1,274,000 Wheelock Properties Ltd. ...... $ 628,886
249,500 Wing On Co. International
Ltd. ........................ 340,692
------------
7,528,672
------------
Restaurants, Hotels & Theaters - 0.5%
180,000 Harbour Centre Development
Ltd. ........................ 291,947
915,847 Hongkong & Shanghai Hotels
Ltd. ........................ 845,468
684,000 Shangri-La Asia Ltd. .......... 999,775
1,881,000 Star Cruises Ltd *............. 489,060
1,126,000 Star Cruises Ltd. *............ 295,961
------------
2,922,211
------------
Retail - 0.1%
603,453 Bossini International Holdings
Ltd. ........................ 137,723
743,000 Glorious Sun Enterprises
Ltd. ........................ 316,754
------------
454,477
------------
Software - 0.1%
949,000 Digital China Holdings Ltd.
*............................ 292,024
1,690,280 SUNeVision Holdings Ltd. ...... 307,744
------------
599,768
------------
Wholesale - 0.0%
1,236,000 Tan Chong International
Ltd. ........................ 239,297
------------
19,236,408
------------
IRELAND - 0.9%
Construction & Homebuilding - 0.2%
80,000 Abbey plc *.................... 946,143
------------
Oil & Coal Resources - 0.6%
2,535,000 Dragon Oil plc *............... 4,217,093
------------
Software - 0.1%
147,432 Iona Technologies plc *........ 613,150
------------
5,776,386
------------
ITALY - 7.8%
Agriculture, Food & Beverage - 0.0%
88,414 La Doria S.p.A. *.............. 305,078
------------
Banks & Credit Institutions - 0.2%
112,000 Banca Popolare di Milano Scrl
(BPM)........................ 1,073,508
1,532 Banco di Sardegna S.p.A. ...... 29,846
------------
1,103,354
------------
Construction & Homebuilding - 0.1%
67,039 Vianini Lavori S.p.A. ......... 612,503
------------
Construction Materials - 1.0%
95,311 Buzzi Unicem S.p.A. ........... 1,480,254
58,000 Italcementi S.p.A. ............ 978,426
51,402 Italmobiliare S.p.A. .......... 3,487,858
42,914 Targetti Sankey S.p.A. *....... 323,484
------------
6,270,022
------------
Consumer Durables - 0.3%
455,895 De'Longhi S.p.A. .............. 1,863,420
------------
</Table>
See the accompanying notes to the financial statements.
64 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg International Small Capitalization Fund
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, ITALY continued
Electric Utilities - 1.4%
1,296,000 C.I.R. S.p.A. -- Compagnie
Industriali Riunite.......... $ 3,831,877
1,255,039 Cofide S.p.A. -- Compagnia
Finanziaria de Benedetti..... 1,549,552
1,503,000 Edison S.p.A. *................ 3,070,696
------------
8,452,125
------------
Gas & Other Public Utilities - 0.0%
8,446 ACSM Como S.p.A. *............. 25,850
------------
Information & Services - 0.0%
80,544 Trevi Finanziaria S.p.A. ...... 174,081
------------
Instruments - 0.0%
36,000 Gefran S.p.A. *................ 250,780
------------
Insurance - 0.9%
195,300 Fondiaria-Sai S.p.A. .......... 5,436,845
------------
Metal Products & Machinery - 0.5%
25,500 Biesse S.p.A. *................ 133,890
409,000 Danieli & Co S.p.A. ........... 2,859,768
------------
2,993,658
------------
Miscellaneous Finance - 0.1%
96,539 Mittel S.p.A. ................. 455,444
------------
Oil Distribution - 1.0%
1,003,728 Cam Finanziaria S.p.A. *....... 3,006,853
258,000 ERG S.p.A. .................... 3,544,214
------------
6,551,067
------------
Publishing, Broadcasting & Cinema - 0.6%
114,113 Monrif S.p.A. *................ 189,832
6,696,000 Telecom Italia Media S.p.A.
*............................ 3,750,749
------------
3,940,581
------------
Real Estate Development - 0.4%
38,250 IPI S.p.A. *................... 276,893
569,955 Risanamento S.p.A. *........... 1,925,924
------------
2,202,817
------------
Restaurants, Hotels & Theaters - 0.4%
868,500 Cremonini S.p.A. .............. 2,672,299
------------
Retail - 0.2%
280,000 Stefanel S.p.A. ............... 1,189,956
------------
Soaps & Cosmetics - 0.1%
104,000 Mirato S.p.A. ................. 889,374
------------
Textiles & Apparel - 0.6%
290,000 Benetton Group S.p.A. ......... 2,804,118
5,335 Linificio e Canapificio
Nazionale S.p.A. *........... 23,990
174,231 Vincenzo Zucchi S.p.A.......... 868,392
------------
3,696,500
------------
49,085,754
------------
JAPAN - 14.7%
Agriculture, Food & Beverage - 0.7%
17,000 Dydo Drinco, Inc. ............. 562,640
15,000 Fuji Foods, Inc. .............. 56,096
6,000 Fujicco Co., Ltd. ............. 88,631
2,000 Kenko Mayonnaise Co., Ltd. .... 9,667
10,000 Kinki Coca-Cola Bottling Co.,
Ltd. ........................ 107,423
181,000 Marudai Food Co., Ltd. ........ 489,052
201,000 Morinaga & Co., Ltd. .......... 537,453
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, JAPAN continued
Agriculture, Food & Beverage continued
132,000 Morinaga Milk Industry Co.,
Ltd. ........................ $ 582,498
23,000 Nichiro Corp. ................. 41,502
14,000 Nichiwa Sangyo Co., Ltd. ...... 44,241
257,000 Nippon Suisan Kaisha Ltd. ..... 872,204
42,000 Nissin Sugar Manufacturing Co.,
Ltd. ........................ 107,199
57,000 Pokka Corp. ................... 314,417
5,000 Riken Vitamin Co., Ltd. ....... 138,837
16,000 Rokko Butter Co., Ltd. ........ 48,616
14,000 S Foods, Inc. ................. 103,665
9,500 S&B Foods, Inc. ............... 79,315
1,000 Semba Tohka Industries Co.,
Ltd. ........................ 3,412
9,000 Showa Sangyo Co., Ltd. ........ 25,496
19,000 Tokatsu Foods Co., Ltd. ....... 80,825
32,000 Yokohama Reito Co., Ltd. ...... 250,411
------------
4,543,600
------------
Autos - 0.5%
2,000 Chuo Malleable Iron Co.,
Ltd. ........................ 6,975
58,500 EXEDY Corp. ................... 983,385
3,000 Fuji Univance Corp. ........... 16,099
3,000 Hirata Technical Co., Ltd. .... 20,138
1,100 Imasen Electric Industrial Co.,
Ltd. ........................ 9,256
13,500 Kanto Auto Works Ltd. ......... 191,090
3,000 Kikuchi Co., Ltd. ............. 32,564
18,700 Kyokuto Kaihatsu Kogyo Co.,
Ltd. ........................ 229,030
3,000 Meiwa Industry Co., Ltd. ...... 13,042
11,000 Mitsuba Corp. ................. 90,193
6,000 Murakami Corp. ................ 47,233
47,000 Nippon Seiki Co., Ltd. ........ 578,712
122,000 Nissan Diesel Motor Co.,
Ltd. ........................ 549,776
3,000 Nissan Shatai Co., Ltd. ....... 22,438
2,000 Pacific Industrial Co.,
Ltd. ........................ 10,060
1,000 Sumitomo Wiring Systems
Ltd. ........................ 21,223
11,000 Technol Eight Co., Ltd. ....... 35,583
6,000 Tokai Rika Co., Ltd. .......... 96,372
6,000 U-Shin Ltd. ................... 51,272
9,600 Unipres Corp. ................. 84,188
24,700 Yorozu Corp. .................. 246,169
------------
3,334,798
------------
Banks & Credit Institutions - 0.8%
1,400 Aichi Bank Ltd. ............... 150,916
3,900 Bank of Okinawa Ltd. .......... 136,369
24,000 Central Finance Co., Ltd. ..... 105,909
60,600 Chiba Kogyo Bank Ltd. *........ 503,678
8,700 Credia Co., Ltd. .............. 244,016
176,000 Eighteenth Bank Ltd. .......... 875,394
127,000 Japan Asia Investment Co.,
Ltd. ........................ 561,621
8,000 Kagawa Bank Ltd. .............. 47,868
7,200 Kita-Nippon Bank Ltd. ......... 370,232
75,000 Nishi-Nippon City Bank Ltd. ... 321,849
38,000 Osaka Securities Finance Co.,
Ltd. ........................ 149,215
19,100 Pocket Card Co., Ltd. *........ 356,964
85,000 Shinki Co., Ltd. .............. 756,545
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 65
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg International Small Capitalization Fund
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, JAPAN continued
Banks & Credit Institutions continued
19,000 Taiko Bank Ltd. ............... $ 56,133
11,000 Tochigi Bank Ltd. ............. 70,961
4,600 Tokyo Tomin Bank Ltd. ......... 123,429
16,000 Tomato Bank Ltd. .............. 43,530
------------
4,874,629
------------
Basic Minerals & Metals - 0.8%
74,000 Araya Industrial Co., Ltd. .... 196,485
118,000 Kurimoto Ltd. ................. 368,474
121,000 Mitsubishi Cable Industries
Ltd. *....................... 149,327
150,000 Nakayama Steel Works Ltd. ..... 633,881
13,000 Nichia Steel Works Ltd. ....... 67,334
69,000 Nittetsu Mining Co., Ltd. ..... 287,070
81,000 Ryobi Ltd. .................... 369,559
193,000 Sanyo Special Steel Co.,
Ltd. ........................ 507,040
106,000 Shinko Wire Co., Ltd. ......... 183,340
12,000 Showa Electric Wire & Cable
Co., Ltd. ................... 16,604
8,000 Sumitomo Pipe & Tube Co.,
Ltd. ........................ 36,799
60,000 Toho Zinc Co., Ltd. ........... 176,702
1,000 Tohoku Steel Co., Ltd. ........ 8,321
10,000 Tokyo Steel Manufacturing Co.,
Ltd. ........................ 145,849
127,000 Toyo Kohan Co., Ltd. .......... 569,933
24,000 Yamato Kogyo Co., Ltd. ........ 292,595
170,000 Yodogawa Steel Works Ltd. ..... 998,129
------------
5,007,442
------------
Beer, Liquor & Tobacco - 0.1%
173,000 Mercian Corp. ................. 443,175
105,000 Oenon Holdings, Inc. .......... 329,843
------------
773,018
------------
Chemicals & Rubber - 1.1%
104,000 Asahi Denka Co., Ltd. ......... 1,078,310
24,000 Asahipen Corp. ................ 47,794
3,000 Atomix Co., Ltd. .............. 15,426
3,000 Cemedine Co., Ltd. ............ 12,201
40,000 Kanto Denka Kogyo Co., Ltd. ... 149,589
231,000 Kureha Chemical Industry Co.,
Ltd. ........................ 1,002,094
2,000 Manac, Inc. ................... 11,200
22,000 Nippon Fine Chemical Co.,
Ltd. ........................ 116,829
147,000 Nippon Soda Co., Ltd. ......... 474,149
132,000 Nippon Synthetic Chemical
Industry Co., Ltd. .......... 389,978
110,000 Sakai Chemical Industry Co.,
Ltd. ........................ 509,069
12,000 SEC Corp. ..................... 38,145
38,000 Sekisui Plastics Co., Ltd. .... 145,662
1,000 Showa Tansan Co., Ltd. ........ 3,599
9,300 SOFT99 Corp. .................. 196,069
1,000 Taoka Chemical Co., Ltd. ...... 3,076
4,000 Tigers Polymer Corp. .......... 26,739
98,000 Toagosei Co., Ltd. ............ 361,911
5,000 Tohcello Co., Ltd. ............ 29,824
204,000 Tokai Carbon Co., Ltd. *....... 865,894
7,000 Tokyo Printing Ink
Manufacturing Co., Ltd. ..... 24,607
276,000 Toyo Tire & Rubber Co.,
Ltd. ........................ 926,365
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, JAPAN continued
Chemicals & Rubber continued
57,000 Tsutsunaka Plastic Industry
Co., Ltd. ................... $ 300,028
17,000 Unitika Ltd. *................. 19,867
------------
6,748,425
------------
Construction & Homebuilding - 1.5%
20,000 Asahi Kogyosha Co., Ltd. ...... 74,794
91,000 Asanuma Corp. ................. 246,728
1,400 C-Cube Corp. .................. 5,746
10,000 Dai-Dan Co., Ltd. ............. 74,701
63,000 Daiho Corp. ................... 159,620
9,000 Daiichi Kensetsu Corp. ........ 76,991
176,000 Fujita Corp. *................. 232,012
58,000 Fukuda Corp. .................. 405,610
9,000 Hibiya Engineering Ltd. ....... 80,610
28,000 Higashi Nihon House Co., Ltd.
*............................ 58,115
27,000 Hitachi Plant Engineering &
Construction Co., Ltd. ...... 136,313
8,400 Japan Foundation Engineering
Co., Ltd. ................... 50,419
8,000 Kaneshita Construction Co.,
Ltd. ........................ 64,473
5,000 Kawada Construction Co.,
Ltd. ........................ 24,308
3,000 Kitano Construction Corp. ..... 7,152
2,000 Koatsu Kogyo Co., Ltd. ........ 7,984
7,000 Kodensha Co., Ltd. ............ 24,935
95,000 Kyudenko Corp. ................ 605,740
130,000 Maeda Corp. ................... 747,476
119,000 Maeda Road Construction Co.,
Ltd. ........................ 985,733
43,000 Mitsui Home Co., Ltd. ......... 239,202
47,600 NEC System Integration &
Construction Ltd. ........... 471,728
52,000 Nippo Corp. ................... 376,776
9,000 Nippon Densetsu Kogyo Co.,
Ltd. ........................ 53,852
4,000 Nippon Dentsu Co., Ltd. ....... 14,361
109,000 Nippon Road Co., Ltd. ......... 285,340
13,000 Ohmoto Gumi Co., Ltd. ......... 101,973
17,000 Oki Wintech Co., Ltd. ......... 93,456
1,000 Oriental Construction Co.,
Ltd. ........................ 5,161
11,300 Raito Kogyo Co., Ltd. ......... 48,915
22,000 Sanyo Engineering &
Construction, Inc. .......... 139,865
3,000 Seibu Electric Industry Co.,
Ltd. ........................ 16,857
8,000 Sekisui House Ltd. ............ 85,639
17,100 Shinnihon Corp. ............... 119,905
4,900 Sho-Bond Corp. *............... 48,102
24,000 Taihei Dengyo Kaisha Ltd. ..... 155,946
48,000 Taikisha Ltd. ................. 667,315
4,000 Taisei Oncho Co., Ltd. ........ 20,194
77,000 Taisei Rotec Corp. ............ 179,254
4,000 Takasago Thermal Engineering
Co., Ltd. ................... 28,796
63,000 Takuma Co., Ltd. .............. 525,393
600 Techno Ryowa Ltd. ............. 4,140
217,000 Tekken Corp. .................. 419,961
2,000 Toko Electric Corp. ........... 10,097
15,000 Tokyo Energy & Systems,
Inc. ........................ 86,668
60,000 Toshiba Plant Systems &
Services Corp. .............. 324,794
</Table>
See the accompanying notes to the financial statements.
66 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg International Small Capitalization Fund
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, JAPAN continued
Construction & Homebuilding continued
24,000 Totetsu Kogyo Co., Ltd. ....... $ 109,275
6,400 Tsuchiya Home Co., Ltd. ....... 21,301
11,000 Tsukishima Kikai Co., Ltd. .... 98,111
1,900 Yokogawa Construction Co.,
Ltd. ........................ 8,615
15,000 Yondenko Corp. ................ 90,454
50,000 Yurtec Corp. .................. 299,177
59,000 Zenitaka Corp. ................ 143,970
------------
9,364,053
------------
Construction Materials - 0.5%
12,000 Alinco, Inc. .................. 53,852
66,000 Bunka Shutter Co., Ltd. ....... 326,421
57,000 DC Co., Ltd. .................. 193,446
66,000 Ishizuka Glass Co., Ltd. ...... 193,138
10,000 Japan Steel Tower Co., Ltd. ... 50,673
2,000 Kawagishi Bridge Works Co.,
Ltd. ........................ 10,284
24,000 Komai Tekko, Inc. ............. 89,304
3,000 Kunimine Industries Co.,
Ltd. ........................ 12,341
3,000 Mitani Sekisan Co., Ltd. ...... 16,296
14,000 Mitsubishi Plastics, Inc. ..... 41,885
160,000 Nihon Yamamura Glass Co.,
Ltd. ........................ 427,823
4,000 Nippon Concrete Industries Co.,
Ltd. ........................ 13,874
2,000 Nippon Hume Corp. ............. 7,031
264,000 Nitto Boseki Co., Ltd. ........ 567,689
21,000 Okabe Co., Ltd. ............... 135,275
1,000 Sankyo Rikagaku Co., Ltd. ..... 9,443
24,000 Sekisui Jushi Corp. ........... 159,312
59,000 Shinagawa Refractories Co.,
Ltd. ........................ 204,095
1,000 Takada Kiko Co., Ltd. ......... 6,713
6,000 Takahashi Curtain Wall
Corp. ....................... 21,653
5,000 Takigami Steel Construction
Co., Ltd. ................... 41,604
60,000 Yokogawa Bridge Corp. ......... 449,327
6,000 Yotai Refractories Co.,
Ltd. ........................ 21,036
------------
3,052,515
------------
Consumer Durables - 0.2%
14,000 Cleanup Corp. ................. 143,848
19,000 Sun Wave Corp. ................ 75,496
24,600 Tohoku Pioneer Corp. .......... 430,545
43,000 Zojirushi Corp. ............... 304,731
------------
954,620
------------
Drugs & Pharmaceuticals - 0.1%
1,000 Fujirebio, Inc. ............... 15,754
3,000 Kaken Pharmaceutical Co.,
Ltd. ........................ 20,755
43,000 Nikken Chemicals Co., Ltd. .... 141,109
35,000 Nippon Shinyaku Co., Ltd. ..... 296,138
15,000 Nissui Pharmaceutical Co.,
Ltd. ........................ 103,076
10,000 Torii Pharmaceutical Co.,
Ltd. ........................ 232,330
------------
809,162
------------
Electric Utilities - 0.1%
16,905 Okinawa Electric Power Co.,
Inc. *....................... 757,058
------------
Financial Investments - 0.4%
3,000 Daiwa Kosho Lease Co., Ltd. ... 16,464
20,800 Nishio Rent All Co., Ltd. ..... 286,836
16,000 Ricoh Leasing Co., Ltd. ....... 418,100
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, JAPAN continued
Financial Investments continued
3,000 Sankyo Frontier Co., Ltd. ..... $ 22,859
17,500 Sanyo Electric Credit Co.,
Ltd. ........................ 404,941
17,000 Suntelephone Co., Ltd. ........ 123,972
74,000 Tokyo Leasing Co., Ltd. ....... 893,176
10,000 Wakita & Co., Ltd. ............ 100,037
------------
2,266,385
------------
Forest Products & Paper - 0.1%
400 Comany, Inc. .................. 4,955
7,000 Daio Paper Corp. .............. 62,435
41,000 Mitsubishi Paper Mills Ltd.
*............................ 64,781
2,000 Nankai Plywood Co., Ltd. ...... 12,304
93,000 Nice Corp. .................... 325,186
2,000 Nihon Decoluxe Co., Ltd. ...... 14,024
78,000 Tomoku Co., Ltd. .............. 217,315
------------
701,000
------------
Furniture & Household Items - 0.2%
30,000 Itoki Crebio Corp. ............ 155,946
2,000 Koito Industries Ltd. ......... 10,079
2,100 Kuwayama Corp. ................ 15,609
71,000 Mizuno Corp. .................. 339,865
30,500 Roland Corp. .................. 573,157
16,600 Tachikawa Corp. ............... 113,295
1,000 Tasaki Shinju Co., Ltd. ....... 4,675
------------
1,212,626
------------
Gas & Other Public Utilities - 0.0%
3,000 Hiroshima Gas Co., Ltd. ....... 10,518
18,000 Keiyo Gas Co., Ltd. ........... 88,687
9,000 Otaki Gas Co., Ltd. ........... 38,454
------------
137,659
------------
Health Care & Hospital - 0.0%
950 SRL, Inc. ..................... 14,566
------------
Information & Services - 0.2%
7,000 Aichi Toyota Motor Co.,
Ltd. ........................ 127,618
4,000 Asia Air Survey Co., Ltd. ..... 22,737
1,000 Chodai Co., Ltd. .............. 5,002
21,600 CTI Engineering Co., Ltd. ..... 177,307
8 Eight Consultants Co., Ltd. ... 33,957
14,800 Eikoh, Inc. ................... 138,369
2,000 Gifu Hino Motor Co., Ltd. ..... 20,999
4,000 Ichishin Co., Ltd. ............ 15,520
7,000 Johnan Academic Preparatory
Institute, Inc. ............. 41,558
3,000 Keiiyu Co., Ltd. .............. 40,361
6,000 Kitamura Co., Ltd. ............ 52,786
4,800 Nihon Jumbo Co., Ltd. ......... 42,633
5,000 Original Engineering
Consultants Co., Ltd. ....... 24,308
5,000 Subaru Enterprise Co., Ltd. ... 18,652
2,600 Sumisho Auto Leasing Corp. .... 110,845
1,500 Tanabe Management Consulting
Co., Ltd. ................... 10,195
3,000 Toyo TEC Co., Ltd. ............ 24,682
2,000 Toyota Corolla Gifu Co.,
Ltd. ........................ 33,096
1,000 UP, Inc. ...................... 6,965
16,100 Wesco, Inc. ................... 67,134
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 67
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg International Small Capitalization Fund
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, JAPAN continued
Information & Services continued
2,000 With us Corp. ................. $ 7,386
19,900 Yellow Hat Ltd. ............... 198,330
------------
1,220,440
------------
Instruments - 0.5%
13,000 Aichi Tokei Denki Co., Ltd. ... 44,241
31,700 Espec Corp. ................... 336,679
10,200 Fukuda Denshi Co., Ltd. ....... 431,993
16,000 Furuno Electric Co., Ltd. ..... 152,132
6,200 Goodman Co., Ltd. *............ 130,133
42,000 Hitachi Medical Corp. ......... 592,147
40,000 Horiba Ltd. ................... 742,333
15,000 Kawasumi Laboratories, Inc. ... 110,649
27,000 NEOMAX Co., Ltd. .............. 638,650
10,000 Nippon Antenna Co., Ltd. ...... 93,493
5,000 Nippon Tungsten Co., Ltd. ..... 14,304
3,000 Nireco Corp. .................. 23,280
1,000 Rion Co., Ltd. ................ 5,142
------------
3,315,176
------------
Insurance - 0.0%
42,000 Nisshin Fire & Marine Insurance
Co., Ltd. ................... 162,958
------------
IT Hardware - 0.5%
1,100 Aiphone Co., Ltd. ............. 18,203
4,800 Airtech Japan Ltd. ............ 48,467
7,200 Aoi Electronics Co., Ltd. ..... 113,762
1,000 Daishinku Corp. ............... 4,011
3,000 Diamond Electric Manufacturing
Co., Ltd. ................... 14,080
2,100 Fuji Electric Industry Co.,
Ltd. ........................ 19,653
20,700 Fujitsu Frontech Ltd. ......... 258,944
800 Hosiden Corp. ................. 8,975
200 Internix, Inc. ................ 1,849
177,000 Japan Radio Co., Ltd. *........ 652,001
3,000 Komatsu Electronic Metals Co.,
Ltd. ........................ 29,310
6,800 Kuramoto Seisakusho Co., Ltd.
*............................ 55,946
115,000 Makino Milling Machine Co.,
Ltd. ........................ 650,477
8,000 Matsuo Electric Co., Ltd. ..... 18,399
8,300 Micronics Japan Co., Ltd. ..... 107,087
6,100 Mimasu Semiconductor Industry
Co., Ltd. ................... 92,333
7,000 Nihon Dengi Co., Ltd. ......... 48,691
5,000 Nippon Kodoshi Corp. .......... 42,726
800 S.E.S. Co., Ltd. .............. 4,435
26,000 Shin-Etsu Polymer Co., Ltd. ... 193,493
8,700 Shinkawa Ltd. ................. 184,639
100,000 Toko, Inc. .................... 287,958
500 Tokyo Cathode Laboratory Co.,
Ltd. ........................ 8,695
3,000 Y.A.C. Co., Ltd. *............. 21,288
29,600 Yamaichi Electronics Co.,
Ltd. ........................ 361,975
13,200 Yamatake Corp. ................ 161,668
------------
3,409,065
------------
Land & Water Transportation - 0.4%
3,000 Chuo Warehouse Co., Ltd. ...... 35,368
2,000 Daiwa Logistics Co., Ltd. ..... 16,829
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, JAPAN continued
Land & Water Transportation continued
8,000 Isewan Terminal Service Co.,
Ltd. ........................ $ 45,625
6,000 Japan Oil Transportation Co.,
Ltd. ........................ 19,353
8,400 K.R.S. Corp. .................. 133,508
3,000 Kanda Corp. ................... 13,042
3,000 Kawanishi Warehouse Co.,
Ltd. ........................ 23,336
51,000 Kawasaki Kinkai Kisen Kaisha
Ltd. ........................ 226,963
54,000 Maruzen Showa Unyu Co.,
Ltd. ........................ 195,886
8,000 Meiko Trans Co., Ltd. ......... 71,803
108,000 Nissin Corp. .................. 364,510
99,000 Senko Co., Ltd. ............... 387,818
52,000 Sumitomo Warehouse Co., Ltd. .. 313,575
5,000 Tokyo Kisen Co., Ltd. ......... 31,320
8,100 Yusen Air & Sea Service Co.,
Ltd. ........................ 357,442
------------
2,236,378
------------
Mainframe & Minicomputers - 0.0%
12,700 Japan Digital Laboratory Co.,
Ltd. ........................ 146,639
------------
Metal Products & Machinery - 1.5%
24,000 Aida Engineering Ltd. ......... 140,688
30,000 Amada Co., Ltd. ............... 185,116
25,000 Asahi Diamond Industrial Co.,
Ltd. ........................ 151,458
20,000 CKD Corp. ..................... 137,248
29,600 Corona Corp. .................. 476,268
130,000 Daifuku Co., Ltd. ............. 963,819
9,400 Dainichi Co., Ltd. ............ 64,155
200 DMW Corp. ..................... 9,349
1,400 Freund Corp. .................. 10,497
3,000 Fuji Seiko Ltd. ............... 14,585
123,000 Fujitec Co., Ltd. ............. 642,829
103,000 Hokkai Can Co., Ltd. .......... 323,560
5,000 Hokuetsu Industries Co.,
Ltd. ........................ 10,985
3,000 Hosokawa Micron Corp. *........ 28,244
13,000 Ishikawajima Transport
Machinery Co., Ltd. ......... 40,716
145,000 Japan Steel Works Ltd. ........ 311,799
38,000 Kato Works Co., Ltd. .......... 116,530
62,000 Kioritz Corp. *................ 180,273
5,000 Koken Ltd. .................... 39,080
19,500 Maezawa Industries, Inc. ...... 114,856
17,000 Max Co., Ltd. ................. 196,606
151,000 Meidensha Corp. ............... 402,347
114,500 Mori Seiki Co., Ltd. .......... 1,215,011
2,000 Nakano Refrigerators Co.,
Ltd. ........................ 19,260
3,000 Nihon Kaiheiki Industry Co.,
Ltd. ........................ 23,364
39,000 Nippon Sharyo Ltd. ............ 106,105
107,000 Nippon Thompson Co., Ltd. ..... 738,276
9,000 Nissei Plastic Industrial Co.,
Ltd. ........................ 73,542
10,000 Nissin Electric Co., Ltd. ..... 32,255
18,900 Nitto Kogyo Corp. ............. 201,263
5,000 Okuma Corp. ................... 25,757
43,000 Organo Corp. .................. 205,834
5,100 Piolax, Inc. .................. 113,720
2,000 Sanso Electric Co., Ltd. ...... 17,240
86,000 Sanyo Denki Co., Ltd. ......... 456,694
133,000 Shinmaywa Industries Ltd. ..... 616,754
51,000 Sinko Kogyo Co., Ltd. ......... 145,428
</Table>
See the accompanying notes to the financial statements.
68 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg International Small Capitalization Fund
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, JAPAN continued
Metal Products & Machinery continued
41,000 Sintokogio Ltd. ............... $ 298,224
80,000 Takaoka Electric Manufacturing
Co., Ltd. ................... 169,035
200 Thk Co., Ltd. ................. 4,048
2,000 Toami Corp. ................... 37,191
6,000 Toso Co., Ltd. ................ 17,895
19,000 Toyo Engineering Works Ltd. ... 39,968
35,000 Toyoda Machine Works Ltd. ..... 350,785
400 Zuiko Corp. ................... 3,740
------------
9,472,397
------------
Miscellaneous Finance - 0.0%
4,300 Daiko Clearing Services
Corp. ....................... 35,177
24,000 Marusan Securities Co.,
Ltd. ........................ 174,794
------------
209,971
------------
Oil & Coal Resources - 0.1%
70,000 Kanto Natural Gas Development
Co., Ltd. ................... 468,586
------------
Oil Distribution - 0.3%
93,100 Itochu Enex Co., Ltd. ......... 665,871
102,000 Iwatani International Corp. ... 276,552
44,000 Kamei Corp. ................... 473,074
41,000 San-Ai Oil Co., Ltd. .......... 192,810
10,000 Sinanen Co., Ltd. ............. 54,039
159,000 Toa Oil Co., Ltd. ............. 298,794
33,000 Uehara Sei Shoji Co., Ltd. .... 200,542
------------
2,161,682
------------
Photooptical, Micros & Office Machinery - 0.2%
18,000 Amano Corp. ................... 202,113
15,000 Fujicopian Co., Ltd. .......... 36,462
25,000 King Jim Co., Ltd. ............ 163,145
5,000 Ricoh Elemex Corp. ............ 34,826
12,600 Riso Kagaku Corp. ............. 501,833
46,000 Star Micronics Co., Ltd. ...... 423,616
------------
1,361,995
------------
Publishing, Broadcasting & Cinema - 0.2%
490 Asahi Broadcasting Corp. ...... 47,873
1,000 Broadcasting System of Niigata,
Inc. (BSN)................... 8,601
1,900 Chubu-Nippon Broadcasting Co.,
Ltd. ........................ 26,113
30,000 Gakken Co., Ltd. .............. 82,741
1,000 Hiraga Co., Ltd. .............. 7,760
8,000 RKB Mainichi Broadcasting
Corp. ....................... 76,290
2,000 Sanko Sangyo Co., Ltd. ........ 17,913
139,000 Toei Co., Ltd. ................ 827,814
4,100 Tokyo Lithmatic Corp. ......... 56,770
------------
1,151,875
------------
Real Estate Development - 0.2%
4,000 Aoki Marine Co., Ltd. ......... 13,388
14,000 Cowboy Co., Ltd. .............. 47,120
7,000 Hosoda Corp. .................. 35,013
112,000 HUNET, Inc. ................... 184,293
14,000 Joint Corp. ................... 350,786
4,000 Kowa Spinning Co., Ltd. ....... 23,934
4,700 Kyoritsu Maintenance Co.,
Ltd. ........................ 100,187
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, JAPAN continued
Real Estate Development continued
28,700 Nisshin Fudosan Co., Ltd. ..... $ 340,772
23,000 Recruit Cosmos Co., Ltd. ...... 81,713
17,000 Sankei Building Co., Ltd. ..... 117,614
66,500 Towa Real Estate Development
Co., Ltd. *.................. 236,257
------------
1,531,077
------------
Real Estate Investment Trusts - 0.0%
65 Pacific Management Corp. *..... 215,127
------------
Restaurants, Hotels & Theaters - 1.1%
700 ABILIT Corp. .................. 21,793
1,650 Aeon Fantasy Co., Ltd. ........ 40,263
72,900 Capcom Co., Ltd. .............. 713,597
44,250 Colowide Co., Ltd. ............ 347,513
23,100 Daisyo Corp. .................. 287,238
17,400 Denny's Japan Co., Ltd. ....... 327,795
23,800 Doutor Coffee Co., Ltd. ....... 442,801
6,000 Friendly Corp. ................ 28,553
20,000 Gourmet Kineya Co., Ltd. ...... 177,450
5,000 Green House Co., Ltd. ......... 109,854
36,500 H.I.S. Co., Ltd. *............. 837,766
10,500 Horipro, Inc. ................. 107,003
82,000 Kinki Nippon Tourist Co.,
Ltd. ........................ 242,259
500 Marche Corp. .................. 5,095
6,600 Matsuya Foods Co., Ltd. ....... 141,922
9,000 MOS Food Services, Inc. ....... 132,947
54,000 Royal Co., Ltd. ............... 661,369
255 Shidax Corp. .................. 206,222
460 Taito Corp. ................... 589,192
33,800 Tecmo Ltd. .................... 327,066
169,000 Tokyo Dome Corp. .............. 1,019,120
------------
6,766,818
------------
Retail - 0.8%
50,400 Aoki International Co.,
Ltd. ........................ 667,695
12,700 Aucnet, Inc. .................. 263,594
6,000 Blue Grass Co., Ltd. .......... 61,144
9,200 Charle Co., Ltd. .............. 70,101
25,300 Chiyoda Co., Ltd. ............. 418,907
12,000 Daiwa Co., Ltd. ............... 29,394
3 Digital Garage, Inc. *......... 10,546
10,000 Hanshin Department Store
Ltd. ........................ 65,445
10,600 Haruyama Trading Co., Ltd. .... 163,519
3,000 Hasegawa Co., Ltd. ............ 9,677
210 Impress Holdings, Inc. *....... 237,565
67,000 Izumiya Co., Ltd. ............. 482,330
4,400 Jeans Mate Corp. .............. 53,355
16,400 Konaka Co., Ltd. .............. 217,573
163,000 Matsuzakaya Co., Ltd. ......... 917,407
1,600 Ministop Co., Ltd. ............ 27,749
2,000 Nagano Tokyu Department Store
Co., Ltd. ................... 5,797
62,000 Parco Co., Ltd. ............... 417,932
10,000 Poplar Co., Ltd. .............. 132,760
100 Right On Co., Ltd. ............ 3,805
300 RIO Chain Co., Ltd. ........... 3,001
9,000 Senshukai Co., Ltd. ........... 78,254
8,500 Simree Co., Ltd. .............. 38,225
3,200 Three F Co., Ltd. ............. 27,973
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 69
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg International Small Capitalization Fund
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, JAPAN continued
Retail continued
2,000 Tokyo Derica Co., Ltd. ........ $ 14,024
77,000 Tokyu Store Chain Co., Ltd. ... 380,105
800 U Store Co., Ltd. ............. 7,188
1,100 Xebio Co., Ltd. ............... 30,030
------------
4,835,095
------------
Soaps & Cosmetics - 0.1%
85 Aderans Co., Ltd. ............. 1,808
195 Dr. Ci:Labo Co., Ltd. ......... 419,315
62,000 Sunstar, Inc. ................. 241,717
------------
662,840
------------
Software - 0.3%
2,000 Asahi Intelligence Service Co.,
Ltd. ........................ 20,942
3,000 Creo Co., Ltd. ................ 18,512
22,900 Fujitsu Business Systems
Ltd. ........................ 325,644
300 INES Corp. .................... 2,967
1,400 Information Development Co.,
Ltd. ........................ 7,893
8,000 Intec, Inc. ................... 77,711
5,000 Japan Process Development Co.,
Ltd. ........................ 48,616
6,700 Saison Information Systems Co.,
Ltd. ........................ 111,813
200 Sumisho Electronics Co.,
Ltd. ........................ 2,309
33,400 TKC Corp. ..................... 562,080
23,000 Tsuzuki Denki Co., Ltd. ....... 92,464
78,000 Uchida Yoko Co., Ltd. *........ 379,208
14,600 Zuken, Inc. *.................. 143,052
------------
1,793,211
------------
Textiles & Apparel - 0.4%
62,000 Atsugi Co., Ltd. .............. 87,528
207,000 Daiwabo Co., Ltd. ............. 336,743
2,000 Fuji Corp. .................... 17,390
5,000 Fujix Ltd. .................... 33,470
17,000 Ichikawa Co., Ltd. ............ 73,111
11,000 Japan Wool Textile Co.,
Ltd. ........................ 77,646
10,000 Jichodo Co., Ltd. ............. 76,851
5,000 King Co., Ltd. ................ 17,203
334,000 Kurabo Industries Ltd. ........ 877,469
53,000 Lapine Co., Ltd. .............. 107,526
5,000 Morishita Co., Ltd. ........... 50,486
7,000 Nippon Felt Co., Ltd. ......... 39,594
84,000 Seiren Co., Ltd. .............. 704,450
17,000 Tokyo Soir Co., Ltd. .......... 67,549
4,000 Yagi Corp. .................... 21,503
------------
2,588,519
------------
Wholesale - 0.8%
47,000 Best Denki Co., Ltd. .......... 191,146
14,500 Daiwabo Information System Co.,
Ltd. ........................ 205,516
11,000 Denkyosha Co., Ltd. ........... 103,871
14,500 Furusato Industries Ltd. ...... 152,510
1,000 Inaba Denki Sangyo Co.,
Ltd. ........................ 29,450
15,000 Inabata & Co., Ltd. ........... 128,179
60,000 Joshin Denki Co., Ltd. ........ 241,212
24,000 Kanaden Corp. ................. 149,663
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, JAPAN continued
Wholesale continued
1,600 Kato Sangyo Co., Ltd. ......... $ 23,246
110,000 Laox Co., Ltd. ................ 340,407
17,800 Marubun Corp. ................. 162,091
18,000 Mitani Corp. .................. 135,135
14,000 Nagahori Corp. ................ 48,168
21,000 Nissho Electronics Corp. ...... 159,620
15,100 Onoken Co., Ltd. .............. 235,761
24,400 Paltac Corp. .................. 407,654
8,600 Ryosan Co., Ltd. .............. 225,935
10,800 Ryoyo Electro Corp. ........... 157,012
19,000 Sanshin Electronics Co.,
Ltd. ........................ 163,070
21,200 Satori Electric Co., Ltd. *.... 304,244
27,000 Sekido Co., Ltd. .............. 52,253
2,000 Shinden Co., Ltd. ............. 8,676
21,000 Shinko Shoji Co., Ltd. ........ 191,230
1,000 Soda Nikka Co., Ltd. .......... 3,394
11,100 Sofmap Co., Ltd. *............. 51,889
5,000 Somar Corp. ................... 18,605
15,000 Takachiho Electric Co.,
Ltd. ........................ 178,104
1,400 Takachiho Koheki Co., Ltd. .... 13,874
28,000 Takihyo Co., Ltd. ............. 158,901
5,000 Tokiwa Yakuhin Co., Ltd. ...... 22,205
7,000 Totech Corp. .................. 40,576
10,000 Trusco Nakayama Corp. ......... 177,637
2,500 Tsuzuki Densan Co., Ltd. ...... 15,146
3,000 Yagi & Co., Ltd. .............. 37,865
3,000 Yokohama Maruuo Co., Ltd. ..... 19,690
56,000 Yuasa Funashoku Co., Ltd. ..... 143,979
------------
4,697,914
------------
92,959,319
------------
MALAYSIA - 0.0%
Real Estate Development - 0.0%
24,000 Rekapacific Berhad * (a)....... 0
------------
NETHERLANDS - 1.1%
Basic Minerals & Metals - 0.2%
32,565 Mittal Steel Co., NV *......... 1,038,606
------------
Furniture & Household Items - 0.2%
131,494 Samas Groep NV *............... 1,110,822
------------
Information & Services - 0.2%
22,464 Koninklijke BAM Groep NV....... 1,328,384
------------
Land & Water Transportation - 0.1%
16,571 Koninklijke Frans Maas Groep NV
*............................ 608,404
------------
Metal Products & Machinery - 0.2%
35,997 Koninklijke Nedschroef Holding
NV *......................... 1,132,158
------------
Wholesale - 0.2%
51,500 Univar NV...................... 1,705,423
------------
6,923,797
------------
NEW ZEALAND - 0.6%
Agriculture, Food & Beverage - 0.1%
101,057 Sanford Ltd. .................. 317,014
------------
</Table>
See the accompanying notes to the financial statements.
70 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg International Small Capitalization Fund
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, NEW ZEALAND continued
Airlines - 0.2%
571,863 Air New Zealand Ltd. *......... $ 615,643
------------
Banks & Credit Institutions - 0.0%
137,503 Fisher & Paykel Appliances
Holdings Ltd. ............... 291,158
------------
Biotechnology - 0.0%
14,716 Rubicon Ltd. *................. 10,492
------------
Chemicals & Rubber - 0.0%
74,683 Nuplex Industries Ltd. ........ 264,629
------------
Construction Materials - 0.3%
296,852 Fletcher Building Ltd. ........ 1,405,297
------------
Electric Utilities - 0.0%
14,328 TrustPower Ltd. ............... 53,119
------------
Financial Investments - 0.0%
3,020 Hellaby Holdings Ltd. *........ 13,586
------------
Forest Products & Paper - 0.0%
26,211 Tenon Ltd. *................... 78,299
------------
Health Care & Hospital - 0.0%
18,147 Metlifecare Ltd. .............. 50,458
------------
Land & Water Transportation - 0.0%
15,801 Mainfreight Ltd. .............. 29,853
34,075 Toll NZ Ltd. *................. 74,097
17,143 Tourism Holdings Ltd. *........ 21,633
------------
125,583
------------
Miscellaneous Finance - 0.0%
162,279 Tower Ltd. *................... 204,784
------------
Publishing, Broadcasting & Cinema - 0.0%
8,491 Independent Newspapers Ltd. ... 36,322
------------
Retail - 0.0%
4,064 Hallenstein Glasson Holdings
Ltd. *....................... 11,474
91,003 Warehouse Group Ltd. .......... 257,576
------------
269,050
------------
3,735,434
------------
NORWAY - 1.1%
Financial Investments - 0.2%
117,000 Kvaerner ASA *................. 1,398,945
------------
Land & Water Transportation - 0.2%
29,400 Stolt-Nielsen SA *............. 1,056,918
------------
Oil Drilling & Services - 0.7%
236,000 Fred Olsen Energy ASA *........ 4,466,299
------------
6,922,162
------------
PORTUGAL - 0.1%
Forest Products & Paper - 0.1%
446,874 Corticeira Amorim, S.G.P.S., SA
*............................ 679,511
------------
SINGAPORE - 1.9%
Agriculture, Food & Beverage - 0.1%
1,815,000 Asia Food & Properties Ltd.
*............................ 533,727
1,193,000 Golden Agri-Resources Ltd. *... 354,435
------------
888,162
------------
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, SINGAPORE continued
Airlines - 0.1%
668,000 Singapore Airport Terminal
Services Ltd. ............... $ 850,543
------------
Autos - 0.0%
242,000 Hong Leong Asia Ltd. *......... 152,598
------------
Banks & Credit Institutions - 0.1%
250,000 Hong Leong Finance Ltd. ....... 530,528
------------
Commercial Aircraft & Components - 0.1%
548,000 SIA Engineering Co. ........... 774,171
------------
Financial Investments - 0.1%
109,000 Metro Holdings Ltd. ........... 32,053
111,750 Overseas Union Enterprise
Ltd. ........................ 552,212
------------
584,265
------------
Health Care & Hospital - 0.0%
115,000 Raffles Medical Group Ltd. *... 35,909
------------
Information & Services - 0.0%
25,000 United Engineers Ltd. ......... 26,678
------------
IT Hardware - 0.1%
179,000 GP Industries Ltd. ............ 126,981
171,160 WBL Corp., Ltd. ............... 348,692
------------
475,673
------------
Land & Water Transportation - 0.1%
69,000 Neptune Orient Lines Ltd. ..... 153,956
172,000 Samudera Shipping Line Ltd. ... 53,186
168,000 SBS Transit Ltd. *............. 234,282
314,000 Singapore Shipping Corp., Ltd.
*............................ 79,961
------------
521,385
------------
Miscellaneous Finance - 0.0%
47,000 UOB-Kay Hian Holdings Ltd. *... 29,637
------------
Oil Distribution - 0.1%
294,000 Singapore Petroleum Co.,
Ltd. ........................ 730,856
------------
Photooptical, Micros & Office Machinery - 0.1%
208,000 Brilliant Manufacturing Ltd.... 61,165
32,300 Creative Technology Ltd. ...... 311,387
------------
372,552
------------
Real Estate Development - 0.9%
1,255,550 Ascott Group Ltd. ............. 411,082
940,000 CapitaLand Ltd. ............... 1,339,356
7,000 Fraser and Neave Ltd. ......... 64,512
204,000 Jardine Cycle & Carriage
Ltd. ........................ 1,447,158
359,000 Keppel Land Ltd. .............. 500,637
109,000 Singapore Land Ltd. ........... 353,574
594,000 United Industrial Corp.,
Ltd. ........................ 381,762
133,000 Wheelock Properties (S)
Ltd. ........................ 202,407
------------
4,700,488
------------
Restaurants, Hotels & Theaters - 0.1%
25,000 Bonvests Holdings Ltd. *....... 8,867
331,000 Hotel Properties Ltd. ......... 301,037
1,286,000 Raffles Holdings Ltd. ......... 506,821
348,000 Stamford Land Corp., Ltd. ..... 50,640
------------
867,365
------------
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 71
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg International Small Capitalization Fund
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, SINGAPORE continued
Retail - 0.0%
26,000 Robinson & Co., Ltd. .......... $ 96,950
5,000 Wearnes International (1994)
Ltd. ........................ 3,547
------------
100,497
------------
11,641,307
------------
SPAIN - 5.5%
Basic Minerals & Metals - 0.1%
54,391 Cie Automotive SA.............. 904,820
------------
Chemicals & Rubber - 0.1%
245,000 La Seda de Barcelona SA, Class
B *.......................... 754,640
------------
Construction & Homebuilding - 1.2%
381,000 Abengoa SA..................... 4,189,098
128,961 Obrascon Huarte Lain SA........ 1,479,941
361,610 Uralita SA *................... 1,983,253
------------
7,652,292
------------
Forest Products & Paper - 0.1%
653 Grupo Empresarial Ence SA...... 19,782
144,278 Papeles y Cartones de Europa
SA........................... 781,919
------------
801,701
------------
Information & Services - 0.3%
65,600 Dinamia Capital Privado.
Sociedad de Capital Riesgo
SA........................... 1,332,564
76,000 Funespana SA................... 760,553
------------
2,093,117
------------
Instruments - 0.1%
46,594 Indo Internacional SA.......... 369,996
------------
Metal Products & Machinery - 0.0%
538 Sociedad Espanola del
Acumulador Tudor SA *........ 5,279
------------
Real Estate Development - 2.1%
107,200 Corporacion Financiera Alba
SA........................... 4,359,388
92,400 Inmobiliaria Colonial.......... 4,506,877
232,000 Inmobiliaria Urbis SA.......... 3,497,609
18,143 TESTA, Inmuebles en Renta SA... 410,283
------------
12,774,157
------------
Restaurants, Hotels & Theaters - 1.3%
95,000 NH Hoteles SA.................. 1,224,787
329,000 Sol Melia SA................... 3,916,667
1,197,000 TelePizza SA................... 2,613,537
------------
7,754,991
------------
Wholesale - 0.2%
52,138 Pescanova SA................... 1,233,250
------------
34,344,243
------------
SWEDEN - 3.5%
Basic Minerals & Metals - 0.4%
510,000 Boliden AB *................... 2,353,334
------------
Commercial Aircraft & Components - 0.6%
213,000 Saab AB........................ 3,492,944
------------
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, SWEDEN continued
Financial Investments - 0.5%
840,000 Bure Equity AB *............... $ 251,647
116,000 Ratos AB, Class B.............. 3,005,736
1,952 Vostok Nafta Investment Ltd.
*............................ 36,029
------------
3,293,412
------------
Furniture & Household Items - 0.1%
84,975 Midway Holding AB, Class B *... 415,030
------------
Health Care & Hospital - 0.7%
360,000 Gambro AB, Class A............. 4,932,416
------------
Information & Services - 0.2%
73,550 Studsvik AB *.................. 963,339
------------
Metal Products & Machinery - 0.2%
45,800 SSAB Svenskt Stal AB, Class
B............................ 1,098,961
------------
Miscellaneous Finance - 0.1%
55,956 Luxonen SA *................... 595,851
------------
Real Estate Development - 0.1%
32,200 Wihlborgs Fastigheter AB *..... 747,487
------------
Software - 0.2%
658,000 Intentia International AB,
Class B *.................... 1,522,802
------------
Wholesale - 0.4%
113,400 Axfood AB...................... 2,777,360
------------
22,192,936
------------
SWITZERLAND - 7.1%
Agriculture, Food & Beverage - 0.3%
1,186 Barry Callebaut AG *........... 283,838
1,335 Bell Holding AG *.............. 1,284,709
------------
1,568,547
------------
Banks & Credit Institutions - 0.2%
698 Graubuendner Kantonalbank...... 491,921
1,865 St. Galler Kantonalbank........ 490,542
------------
982,463
------------
Basic Minerals & Metals - 0.1%
19,067 Swiss Steel AG................. 470,316
------------
Communications Utilities - 0.1%
8,000 Ascom Holding AG *............. 135,582
125,000 Mobilezone Holding AG *........ 570,518
------------
706,100
------------
Construction & Homebuilding - 0.1%
1,290 Zschokke Holding SA *.......... 722,439
------------
Construction Materials - 0.0%
433 Vetropack Holding AG........... 309,519
------------
Electric Utilities - 0.2%
1,103 Compagnie vaudoise
d'electricite CVE), Class
B............................ 1,110,496
------------
Financial Investments - 0.1%
3,000 Private Equity Holding AG *.... 87,591
2,599 Sustainable Performance Group
*............................ 674,881
------------
762,472
------------
Furniture & Household Items - 0.1%
8,200 Quadrant AG *.................. 868,915
------------
</Table>
See the accompanying notes to the financial statements.
72 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg International Small Capitalization Fund
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, SWITZERLAND continued
Instruments - 0.4%
4,439 Harwanne Compagnie de
participations industielles
et financieres SA............ $ 896,440
5,680 Leica Geosystems AG *.......... 1,596,443
------------
2,492,883
------------
Insurance - 2.2%
86,400 Baloise Holding AG, Class R.... 4,168,135
19,000 Helvetia Patria Holding........ 2,947,479
29,700 Swiss Life Holding *........... 4,480,292
1,283 Waadt Versicherungen Holding... 2,684,623
------------
14,280,529
------------
Land & Water Transportation - 0.2%
29,771 Jungfraubahn Holding AG........ 1,111,511
------------
Metal Products & Machinery - 1.7%
304 AFG Arbonia-Forster Holding
AG........................... 84,168
880 Bucher Industries AG........... 299,018
204 Conzzeta Holding AG............ 248,175
2,048 Feintool International Holding
AG........................... 475,530
1,830 Gurit-Heberlein AG............. 1,370,312
2,117 Industrieholding Cham AG....... 539,507
50,100 Saurer AG *.................... 3,299,649
5,040 SIG Holding AG................. 1,082,507
5,080 Sulzer AG...................... 2,194,983
8,620 Unaxis Holding AG.............. 1,215,001
------------
10,808,850
------------
Real Estate Development - 0.6%
37,600 PSP Swiss Property AG *........ 1,577,314
14,821 Unique Zurich Airport *........ 1,989,562
------------
3,566,876
------------
Restaurants, Hotels & Theaters - 0.2%
4,860 Moevenpick Holding AG *........ 1,398,590
------------
Retail - 0.2%
16,699 Charles Voegele Holding AG..... 1,001,744
------------
Wholesale - 0.4%
1,292 Also Holding................... 455,273
574 Daetwyler Holding AG........... 1,458,718
588 Eichhof Holding AG............. 661,062
150 Metraux Services Holding SA.... 19,079
------------
2,594,132
------------
44,756,382
------------
UNITED KINGDOM - 11.5%
Agriculture, Food & Beverage - 0.0%
36,000 Uniq plc....................... 101,359
------------
Basic Minerals & Metals - 0.9%
580,802 Avocet Mining plc *............ 943,840
20,000 Bodycote International plc..... 65,380
4,220,000 Corus Group plc *.............. 4,306,042
10,000 Hill & Smith Holdings plc *.... 30,706
------------
5,345,968
------------
Construction & Homebuilding - 2.2%
285,600 Barratt Developments plc....... 3,559,138
192,500 Bellway plc.................... 3,200,997
48,000 Ben Bailey plc *............... 421,761
245,310 George Wimpey plc.............. 2,039,576
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, UNITED KINGDOM continued
Construction & Homebuilding continued
20,800 McCarthy & Stone plc........... $ 259,406
167,000 Mowlem plc..................... 634,285
131,819 Taylor Woodrow plc............. 762,204
141,409 Wilson Bowden plc.............. 3,107,626
------------
13,984,993
------------
Construction Materials - 0.1%
175,000 Pilkington plc................. 391,858
------------
Financial Investments - 0.1%
78,352 Hitachi Capital UK plc......... 344,967
64,030 Vp plc......................... 222,625
------------
567,592
------------
Gas & Other Public Utilities - 0.0%
17,437 Shanks Group plc............... 46,623
------------
Information & Services - 1.6%
150,214 Autologic Holdings plc......... 737,999
156,000 Benfield Group plc............. 749,476
38,529 Capital & Regional plc......... 505,993
24,513 Davis Service Group plc........ 202,418
1,053,000 First Choice Holidays plc...... 3,437,307
14,719 Incepta Group plc.............. 16,563
138,000 Interior Services Group plc.... 501,975
196,000 RAC plc........................ 3,436,971
408,512 Sygen International plc........ 278,203
------------
9,866,905
------------
Instruments - 0.4%
321,000 Senior plc..................... 266,888
508,000 Whatman plc *.................. 2,351,808
------------
2,618,696
------------
Insurance - 0.2%
171,000 Friends Provident plc.......... 572,736
133,000 Royal & Sun Alliance Insurance
Group plc.................... 197,285
581,344 SVB Holdings plc............... 274,628
------------
1,044,649
------------
Land & Water Transportation - 0.1%
80,000 Arriva plc..................... 793,636
------------
Metal Products & Machinery - 0.7%
275,614 Alumasc Group plc.............. 885,365
362,472 Charter plc *.................. 1,849,312
600,000 Fenner plc..................... 1,598,609
------------
4,333,286
------------
Oil & Coal Resources - 0.4%
131,000 Dana Petroleum plc *........... 1,352,799
198,629 Paladin Resources plc.......... 685,918
152,000 UK Coal plc.................... 347,537
------------
2,386,254
------------
Oil Drilling & Services - 0.7%
540,000 Abbot Group plc................ 2,219,346
124,812 Expro International Group
plc.......................... 1,015,824
120,169 Hunting plc.................... 533,620
173,743 Venture Production plc *....... 875,757
------------
4,644,547
------------
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 73
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg International Small Capitalization Fund
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, UNITED KINGDOM continued
Real Estate Development - 0.2%
16,000 Ashtenne Holdings plc *........ $ 139,889
134,218 Slough Estates plc............. 1,236,395
------------
1,376,284
------------
Restaurants, Hotels & Theaters - 2.5%
74,906 De Vere Group plc.............. 754,429
119,200 Greene King plc................ 2,925,886
1,176 Luminar plc.................... 11,000
71,000 Millennium & Copthorne Hotels
plc.......................... 528,599
284,000 Punch Taverns plc.............. 3,692,144
42,000 Regent Inns plc *.............. 69,284
3,308,000 Sportech plc *................. 750,099
31,619 Urbium plc..................... 448,107
184,800 Whitbread plc.................. 3,252,796
139,000 Wolverhampton & Dudley
Breweries plc................ 2,954,876
------------
15,387,220
------------
Retail - 0.5%
385,110 Kleeneze plc................... 1,055,176
534,087 Somerfield plc................. 2,116,829
------------
3,172,005
------------
Soaps & Cosmetics - 0.2%
116,134 Body Shop International plc.... 437,798
209,000 McBride plc.................... 598,317
------------
1,036,115
------------
Software - 0.6%
4,788,000 Dimension Data Holdings plc
*............................ 2,963,039
854,000 InTechnology plc *............. 796,697
------------
3,759,736
------------
Textiles & Apparel - 0.0%
10,000 Cosalt plc..................... 62,735
------------
Wholesale - 0.1%
77,413 Fayrewood plc.................. 187,239
210,282 Nichols plc *.................. 668,550
------------
855,789
------------
71,776,250
------------
TOTAL COMMON STOCK (COST
$536,563,700)................ 611,899,102
------------
PREFERRED STOCK - 0.1%
GERMANY - 0.1%
Wholesale - 0.1%
15,207 Jungheinrich AG................ 320,172
------------
TOTAL PREFERRED STOCK (COST
$317,359).................... 320,172
------------
RIGHTS - 0.0%
HONG KONG - 0.0%
Real Estate Development - 0.0%
1,420,200 New World China Land Ltd. ..... 4,552
------------
TOTAL RIGHTS (COST $0)......... 4,552
------------
</Table>
<Table>
<Caption>
PRINCIPAL VALUE
- ------------------------------------------------------------
REPURCHASE AGREEMENT - 2.2%
UNITED STATES - 2.2%
$13,576,000 State Street Bank dated 3/31/05
due 4/1/05 at 1.75% with a
maturity value of $13,576,660
(Fully collateralized by a
Fannie Mae security)......... $ 13,576,000
------------
TOTAL REPURCHASE AGREEMENT
(COST $13,576,000)........... 13,576,000
------------
TOTAL INVESTMENTS (COST
$550,457,059) (b) - 99.9%.... 625,799,826
NET OTHER ASSETS
(LIABILITIES) - 0.1%......... 612,361
------------
NET ASSETS -- 100.0%........... $626,412,187
============
</Table>
- ---------------
* Non-income producing security.
(a) Bankrupt security/delisted; fair-valued by management.
(b) The aggregate cost for federal income tax purposes is $551,418,566 and
differs from value by net unrealized appreciation of securities as follows:
<Table>
Unrealized appreciation................... $82,876,816
Unrealized depreciation................... (8,495,556)
-----------
Net unrealized appreciation............... $74,381,260
===========
</Table>
FORWARD CURRENCY EXCHANGE CONTRACTS
<Table>
<Caption>
CONTRACT UNREALIZED
DELIVERY AMOUNT APPRECIATION/
DATE (LOCAL CURRENCY) DEPRECIATION
-------- ---------------- -------------
Receive Swiss Francs
in Exchange for
1,085,414 U.S.
Dollars 4/1/05 1,300,000 $ 5,282
Receive Danish Krones
in Exchange for
260,870 U.S. Dollars 4/1/05 1,500,000 810
Receive Euro in
Exchange for
4,534,600 U.S.
Dollars 4/1/05 3,500,000 14,163
Receive Singapore
Dollars in Exchange
for 500,000
Australian Dollars 4/1/05 636,250 (1,006)
Receive Hong Kong
Dollars in Exchange
for 400,000 U.S.
Dollars 4/4/05 3,119,480 (15)
-------
$19,234
=======
</Table>
See the accompanying notes to the financial statements.
74 Laudus Funds Annual Report
Financial Statements
Statement of Portfolio Investments
LAUDUS ROSENBERG U.S. LARGE/MID CAPITALIZATION LONG/SHORT EQUITY FUND (a) as of
3/31/05
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK - 94.3%
AGRICULTURE, FOOD & BEVERAGE - 0.8%
1,300 Archer-Daniels-Midland Co. ...... $ 31,954
300 Kellogg Co. ..................... 12,981
5,200 Pepsi Bottling Group, Inc. ...... 144,820
-----------
189,755
-----------
BANKS & CREDIT INSTITUTIONS - 8.9%
25,700 Bank of America Corp. ........... 1,133,370
1,700 Comerica, Inc. .................. 93,636
6,200 Freddie Mac...................... 391,840
13,300 National City Corp. ............. 445,550
7,800 Sovereign Bancorp, Inc. ......... 172,848
-----------
2,237,244
-----------
BASIC MINERALS & METALS - 2.1%
4,000 Nucor Corp. ..................... 230,240
1,000 Phelps Dodge Corp. .............. 101,730
3,800 United States Steel Corp. ....... 193,230
-----------
525,200
-----------
BEER, LIQUOR & TOBACCO - 1.2%
4,700 Altria Group, Inc. .............. 307,333
-----------
CELLULAR & WIRELESS - 0.5%
1,600 Telephone & Data Systems,
Inc. .......................... 130,560
-----------
CHEMICALS & RUBBER - 1.1%
6,000 Sherwin-Williams Co. ............ 263,940
-----------
CONSTRUCTION & HOMEBUILDING - 2.3%
10,666 D.R. Horton, Inc. ............... 311,874
3,700 Pulte Homes, Inc. ............... 272,431
-----------
584,305
-----------
CONSTRUCTION MATERIALS - 0.8%
3,600 Vulcan Materials Co. ............ 204,588
-----------
ELECTRIC UTILITIES - 2.8%
400 Constellation Energy Group,
Inc. .......................... 20,680
9,700 Edison International............. 336,784
10,500 PG&E Corp. ...................... 358,050
-----------
715,514
-----------
FOREST PRODUCTS & PAPER - 1.7%
6,400 Weyerhaeuser Co. ................ 438,400
-----------
FURNITURE & HOUSEHOLD ITEMS - 0.7%
5,700 Leggett & Platt, Inc. ........... 164,616
-----------
GAS & OTHER PUBLIC UTILITIES - 1.0%
11,300 NiSource, Inc. .................. 257,527
-----------
GOVERNMENT AIRCRAFT & DEFENSE - 2.0%
12,800 Raytheon Co. .................... 495,360
-----------
HEALTH CARE & HOSPITAL - 6.1%
10,400 Aetna, Inc. ..................... 779,480
7,900 UnitedHealth Group, Inc. ........ 753,502
-----------
1,532,982
-----------
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK continued
INFORMATION & SERVICES - 5.3%
5,500 Accenture Ltd., Class A *........ $ 132,825
2,900 Moody's Corp. ................... 234,494
16,800 Prudential Financial, Inc. ...... 964,320
-----------
1,331,639
-----------
INSTRUMENTS - 3.1%
800 C.R. Bard, Inc. ................. 54,464
185 DENTSPLY International, Inc. .... 10,066
5,300 Johnson & Johnson................ 355,948
6,400 Johnson Controls, Inc. .......... 356,864
-----------
777,342
-----------
INSURANCE - 8.1%
9,000 ACE Ltd. ........................ 371,430
2,500 Ambac Financial Group, Inc. ..... 186,875
470 Cincinnati Financial Corp. ...... 20,497
1,900 Everest Re Group Ltd. ........... 161,709
2,800 Lincoln National Corp. .......... 126,392
5,000 Loews Corp. ..................... 367,700
3,000 MGIC Investment Corp. ........... 185,010
1,900 Radian Group, Inc. .............. 90,706
1,200 UnumProvident Corp. ............. 20,424
4,000 WellPoint, Inc. *................ 501,400
-----------
2,032,143
-----------
INTEGRATED OIL COS. - 4.3%
1,700 Exxon Mobil Corp. ............... 101,320
13,800 Occidental Petroleum Corp. ...... 982,146
-----------
1,083,466
-----------
IT HARDWARE - 2.2%
9,300 Marvell Technology Group Ltd.
*.............................. 356,562
4,000 Motorola, Inc. .................. 59,880
9,800 The DIRECTV Group, Inc. *........ 141,316
-----------
557,758
-----------
LAND & WATER TRANSPORTATION - 3.3%
15,600 Burlington Northern Santa Fe
Corp. ......................... 841,308
-----------
MAINFRAME & MINICOMPUTERS - 1.0%
6,600 Dell, Inc. *..................... 253,572
-----------
METAL PRODUCTS & MACHINERY - 0.8%
2,600 Black & Decker Corp. ............ 205,374
-----------
MISCELLANEOUS FINANCE - 4.2%
1,200 Chicago Mercantile Exchange...... 232,836
11,700 Citigroup, Inc. ................. 525,798
5,400 Merrill Lynch & Co., Inc. ....... 305,640
-----------
1,064,274
-----------
OIL & COAL RESOURCES - 3.3%
5,600 Anadarko Petroleum Corp. ........ 426,160
12,300 XTO Energy, Inc. ................ 403,932
-----------
830,092
-----------
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 75
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg U.S. Large/Mid Capitalization Long/Short Equity Fund (a)
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK continued
OIL DISTRIBUTION - 0.1%
500 Questar Corp. ................... $ 29,625
-----------
OIL DRILLING & SERVICES - 1.7%
1,800 Baker Hughes, Inc. .............. 80,082
600 Nabors Industries Ltd. *......... 35,484
4,300 Noble Corp. ..................... 241,703
1,100 Smith International, Inc. ....... 69,003
-----------
426,272
-----------
PUBLISHING, BROADCASTING & CINEMA - 0.8%
400 McGraw-Hill Cos., Inc. .......... 34,900
100 The Walt Disney Co. ............. 2,873
6,400 Time Warner, Inc. *.............. 112,320
700 Viacom, Inc., Class A............ 24,528
600 Viacom, Inc., Class B............ 20,898
-----------
195,519
-----------
REAL ESTATE INVESTMENT TRUSTS - 2.2%
11,200 Equity Office Properties Trust... 337,456
5,200 iStar Financial, Inc. ........... 214,136
-----------
551,592
-----------
RESTAURANTS, HOTELS & THEATERS - 1.0%
7,500 McDonald's Corp. ................ 233,550
500 YUM! Brands, Inc. ............... 25,905
-----------
259,455
-----------
RETAIL - 8.1%
3,200 Abercrombie & Fitch Co., Class
A.............................. 183,168
9,100 Caremark Rx, Inc. *.............. 361,998
6,000 Chico's FAS, Inc. *.............. 169,560
6,600 Federated Department Stores,
Inc. .......................... 420,024
5,200 Home Depot, Inc. ................ 198,848
4,000 Nordstrom, Inc. ................. 221,520
1,900 Office Depot, Inc. *............. 42,142
2,800 SUPERVALU, Inc. ................. 93,380
13,724 TJX Cos., Inc. .................. 338,022
-----------
2,028,662
-----------
SOAPS & COSMETICS - 0.4%
2,500 Estee Lauder Cos., Inc., Class
A.............................. 112,450
-----------
SOFTWARE - 9.8%
6,288 Adobe Systems, Inc. ............. 422,365
6,900 Autodesk, Inc. .................. 205,344
4,600 Cognizant Technology Solutions
Corp., Class A *............... 212,520
5,600 Computer Sciences Corp. *........ 256,760
15,000 Electronic Data Systems Corp. ... 310,050
11,500 International Business Machines
Corp. ......................... 1,050,870
-----------
2,457,909
-----------
</Table>
<Table>
<Caption>
SHARES OR
PRINCIPAL VALUE
- -----------------------------------------------------------
COMMON STOCK continued
TEXTILES & APPAREL - 1.9%
7,800 Coach, Inc. *.................... $ 441,714
600 Liz Claiborne, Inc. ............. 24,078
-----------
465,792
-----------
WHOLESALE - 0.7%
2,700 W.W. Grainger, Inc. ............. 168,129
-----------
TOTAL COMMON STOCK (COST
$19,892,738)................... 23,719,697
-----------
REPURCHASE AGREEMENT - 5.1%
$1,276,426 Bear Stearns dated 3/31/05, due
4/1/05 at 2.63% with a maturity
value of $1,276,520 (Fully
collateralized by a U.S.
Treasury Bill)................. 1,276,426
-----------
TOTAL REPURCHASE AGREEMENT (COST
$1,276,426).................... 1,276,426
-----------
TOTAL INVESTMENTS (COST
$21,169,164) (b) -- 99.4%...... 24,996,123
NET OTHER ASSETS (LIABILITIES) --
0.6%........................... 139,864
-----------
NET ASSETS -- 100.0%............. $25,135,987
===========
</Table>
- ---------------
* Non-income producing security.
(a) All long positions are pledged as collateral for securities sold short.
(b) The aggregate cost for federal tax purposes is $21,303,849 and differs from
value by net unrealized appreciation of securities as follows:
<Table>
Unrealized appreciation.................... $3,928,747
Unrealized depreciation.................... (236,473)
----------
Net unrealized appreciation................ $3,692,274
==========
</Table>
See the accompanying notes to the financial statements.
76 Laudus Funds Annual Report
Financial Statements
Statement of Securities Sold Short
LAUDUS ROSENBERG U.S. LARGE/MID CAPITALIZATION LONG/SHORT EQUITY FUND as of
3/31/05
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK - 94.5%
AGRICULTURE, FOOD & BEVERAGE - 3.4%
16,100 Coca-Cola Co. ..................... $ 670,887
8,800 Coca-Cola Enterprises, Inc. ....... 180,576
-----------
851,463
-----------
AIRLINES - 0.7%
12,800 Southwest Airlines Co. ............ 182,272
-----------
AUTOS - 0.2%
1,300 General Motors Acceptance Corp. ... 38,207
-----------
BANKS & CREDIT INSTITUTIONS - 6.4%
7,400 American Express Co. .............. 380,138
11,400 E*TRADE Financial Corp. ........... 136,800
15,000 Fifth Third Bancorp................ 644,700
9,400 New York Community Bancorp, Inc. .. 170,704
6,082 Northern Trust Corp. .............. 264,202
-----------
1,596,544
-----------
BASIC MINERALS & METALS - 1.5%
1,700 Freeport-McMoRan Copper & Gold,
Inc., Class B.................... 67,337
7,200 Newmont Mining Corp. .............. 304,200
-----------
371,537
-----------
BIOTECHNOLOGY - 3.0%
9,700 Amgen, Inc. *...................... 564,637
5,300 Celgene Corp. *.................... 180,465
-----------
745,102
-----------
COMMUNICATIONS UTILITIES - 0.6%
5,500 Cablevision Systems Corp. *........ 154,275
-----------
DRUGS & PHARMACEUTICALS - 5.6%
4,500 Allergan, Inc. .................... 312,615
7,700 Eli Lilly & Co. ................... 401,170
2,500 Hospira, Inc. *.................... 80,675
12,600 Schering-Plough Corp. ............. 228,690
3,300 Sepracor, Inc. *................... 189,453
4,800 Wyeth.............................. 202,464
-----------
1,415,067
-----------
ELECTRIC UTILITIES - 2.7%
5,700 Dominion Resources, Inc. .......... 424,251
5,800 DTE Energy Co. .................... 263,784
-----------
688,035
-----------
FINANCIAL INVESTMENTS - 0.8%
5,600 CIT Group, Inc. ................... 212,800
-----------
FOREST PRODUCTS & PAPER - 2.1%
8,200 Kimberly-Clark Corp. .............. 538,986
-----------
FURNITURE & HOUSEHOLD ITEMS - 2.3%
10,500 International Game Technology...... 279,930
13,400 Newell Rubbermaid, Inc. ........... 293,996
-----------
573,926
-----------
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK continued
GAS & OTHER PUBLIC UTILITIES - 2.5%
28,600 El Paso Corp. ..................... $ 302,588
3,000 Kinder Morgan, Inc. ............... 227,100
5,400 Williams Cos., Inc. ............... 101,574
-----------
631,262
-----------
HEALTH CARE & HOSPITAL - 4.2%
15,800 HCA, Inc. ......................... 846,406
17,700 Tenet Healthcare Corp. *........... 204,081
-----------
1,050,487
-----------
INFORMATION & SERVICES - 3.6%
4,900 Apollo Group, Inc., Class A *...... 362,894
16,300 Paychex, Inc. ..................... 534,966
-----------
897,860
-----------
INSTRUMENTS - 1.7%
9,800 St. Jude Medical, Inc. *........... 352,800
800 Zimmer Holdings, Inc. *............ 62,248
-----------
415,048
-----------
INSURANCE - 6.4%
2,300 American International Group,
Inc. ............................ 127,443
13,100 Marsh & McLennan Cos., Inc. ....... 398,502
5,100 Progressive Corp. ................. 467,976
11,500 St. Paul Cos., Inc. ............... 422,395
5,100 Willis Group Holdings Ltd. ........ 188,037
-----------
1,604,353
-----------
IT HARDWARE - 6.9%
12,800 Altera Corp. *..................... 253,184
6,300 Comverse Technology, Inc. *........ 158,886
6,600 KLA-Tencor Corp. *................. 303,666
12,400 Linear Technology Co. ............. 475,044
1,100 Maxim Integrated Products, Inc. ... 44,957
8,977 Microchip Technology, Inc. ........ 233,492
11,300 National Semiconductor Corp. ...... 232,893
1,200 Xilinx, Inc. ...................... 35,076
-----------
1,737,198
-----------
LAND & WATER TRANSPORTATION - 2.0%
6,800 United Parcel Service, Inc., Class
B................................ 494,632
-----------
METAL PRODUCTS & MACHINERY - 0.8%
2,900 Deere & Co. ....................... 194,677
-----------
MISCELLANEOUS FINANCE - 2.9%
3,000 Bear Stearns Companies, Inc. ...... 299,700
7,300 Morgan Stanley..................... 417,925
-----------
717,625
-----------
OIL DRILLING & SERVICES - 3.9%
11,300 Halliburton Co. ................... 488,725
7,000 Schlumberger Ltd. ................. 493,360
-----------
982,085
-----------
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 77
Financial Statements--Statement of Securities Sold Short continued
Laudus Rosenberg U.S. Large/Mid Capitalization Long/Short Equity Fund
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK continued
PHOTOOPTICAL, MICROS & OFFICE MACHINERY - 0.8%
1,000 EMC Corp. *........................ $ 12,320
1,100 Lexmark International, Inc., Class
A *.............................. 87,967
3,900 Network Appliance, Inc. *.......... 107,874
-----------
208,161
-----------
PUBLISHING, BROADCASTING & CINEMA - 2.9%
2,200 Interpublic Group of Cos., Inc.
*................................ 27,016
3,400 Knight-Ridder, Inc. ............... 228,650
5,600 New York Times Co., Class A........ 204,848
200 Omnicom Group...................... 17,704
37,700 Sirius Satellite Radio, Inc. *..... 211,874
1,100 Univision Communications, Inc.,
Class A *........................ 30,459
-----------
720,551
-----------
REAL ESTATE INVESTMENT TRUSTS - 4.6%
2,300 Avalonbay Communities, Inc. ....... 153,847
8,600 Equity Residential................. 277,006
4,100 General Growth Properties, Inc. ... 139,810
11,200 Host Marriott Corp. ............... 185,472
6,800 Plum Creek Timber Co. ............. 242,760
4,000 ProLogis........................... 148,400
-----------
1,147,295
-----------
RESTAURANTS, HOTELS & THEATERS - 0.3%
1,700 Starbucks Corp. *.................. 87,822
-----------
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK continued
RETAIL - 12.0%
3,510 Amazon.com, Inc. *................. $ 120,288
9,700 Bed Bath & Beyond, Inc. *.......... 354,438
6,000 Family Dollar Stores, Inc. ........ 182,160
10,200 Kohl's Corp. *..................... 526,626
27,100 Kroger Co. *....................... 434,413
7,800 May Department Stores Co. ......... 288,756
4,300 Tiffany & Co. ..................... 148,436
15,600 Wal-Mart Stores, Inc. ............. 781,716
2,000 Whole Foods Market, Inc. .......... 204,260
-----------
3,041,093
-----------
SOFTWARE - 7.7%
9,800 Automatic Data Processing, Inc. ... 440,510
7,300 Electronic Arts, Inc. *............ 377,994
8,100 Intuit, Inc. *..................... 354,537
9,000 Microsoft Corp. ................... 217,530
46,500 Oracle Corp. *..................... 580,320
-----------
1,970,891
-----------
TEXTILES & APPAREL - 1.0%
5,800 Cintas Corp. ...................... 239,598
-----------
WHOLESALE - 1.0%
6,600 McKesson Corp. .................... 249,150
-----------
TOTAL SECURITIES SOLD SHORT
(PROCEEDS $23,969,459) -- 94.5%.. $23,758,002
===========
</Table>
- ---------------
* Non-income producing security.
See the accompanying notes to the financial statements.
78 Laudus Funds Annual Report
Financial Statements
Statement of Portfolio Investments
LAUDUS ROSENBERG GLOBAL LONG/SHORT EQUITY FUND (a) as of 3/31/05
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK - 86.1%
AUSTRIA - 0.2%
Oil Distribution - 0.2%
163 OMV AG............................. $ 51,923
-----------
BELGIUM - 0.6%
Banks & Credit Institutions - 0.1%
600 Fortis............................. 17,163
-----------
Basic Minerals & Metals - 0.1%
137 Umicore............................ 13,941
-----------
Financial Investments - 0.1%
300 Almancora Comm. Va................. 27,293
-----------
Retail - 0.3%
900 Delhaize Group..................... 61,818
-----------
120,215
-----------
DENMARK - 0.3%
Agriculture, Food & Beverage - 0.1%
308 Danisco A/S........................ 20,902
-----------
Information & Services - 0.2%
519 ISS A/S............................ 42,282
-----------
63,184
-----------
FINLAND - 0.7%
Cellular & Wireless - 0.2%
2,000 Elisa Corp. ....................... 34,051
-----------
Chemicals & Rubber - 0.1%
738 Kemira Oyj......................... 11,462
-----------
Electric Utilities - 0.2%
2,700 Fortum Oyj......................... 52,705
-----------
Forest Products & Paper - 0.1%
1,698 M-real Oyj, Class B................ 10,063
822 Metso Oyj.......................... 14,764
-----------
24,827
-----------
Metal Products & Machinery - 0.1%
829 Wartsila Oyj, Class B.............. 21,979
-----------
145,024
-----------
FRANCE - 3.1%
Airlines - 0.1%
1,315 Air France-KLM..................... 23,704
-----------
Banks & Credit Institutions - 0.5%
800 Societe Generale................... 83,333
-----------
Construction Materials - 0.3%
900 Compagnie de Saint-Gobain.......... 54,975
43 SA des Ciments Vicat............... 5,365
-----------
60,340
-----------
Financial Investments - 0.1%
81 Societe Fonciere Financiere et de
Participations (FFP)............. 17,233
-----------
Gas & Other Public Utilities - 0.3%
2,011 Veolia Environnement............... 71,508
-----------
Information & Services - 0.2%
6,000 Havas SA........................... 35,090
-----------
Insurance - 0.2%
663 CNP Assurances..................... 47,090
-----------
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, FRANCE continued
Land & Water Transportation - 0.2%
400 Bollore Investissement *........... $ 36,910
-----------
Metal Products & Machinery - 0.1%
500 Valeo SA........................... 22,315
-----------
Publishing, Broadcasting & Cinema - 0.3%
2,400 Vivendi Universal SA *............. 73,706
-----------
Restaurants, Hotels & Theaters - 0.1%
920 Sodexho Alliance SA................ 30,741
-----------
Retail - 0.3%
120 Galeries Lafayette SA.............. 35,995
449 Rallye SA.......................... 25,022
-----------
61,017
-----------
Software - 0.1%
800 Cap Gemini SA *.................... 27,968
-----------
Textiles & Apparel - 0.3%
900 Christian Dior SA.................. 65,795
-----------
656,750
-----------
GERMANY - 2.0%
Basic Minerals & Metals - 0.2%
2,205 ThyssenKrupp AG.................... 45,622
-----------
Chemicals & Rubber - 0.3%
400 Bayer AG........................... 13,256
715 Linde AG........................... 49,223
-----------
62,479
-----------
Drugs & Pharmaceuticals - 0.2%
971 Degussa AG......................... 41,771
-----------
Electric Utilities - 0.2%
1,200 Energie Baden-Wuerttemberg AG *.... 52,199
-----------
Financial Investments - 0.1%
6,544 Bankgesellschaft Berlin AG *....... 22,963
-----------
Gas & Other Public Utilities - 0.4%
1,200 RWE AG............................. 72,754
-----------
Instruments - 0.1%
228 Fresenius AG....................... 25,635
-----------
Metal Products & Machinery - 0.1%
2,000 MG Technologies AG *............... 25,681
-----------
Miscellaneous Finance - 0.4%
800 Deutsche Bank AG................... 69,193
-----------
418,297
-----------
ITALY - 2.3%
Banks & Credit Institutions - 1.3%
16,000 Banca Intesa S.p.A. ............... 81,514
12,682 Banca Monte dei Paschi di Siena
S.p.A. .......................... 42,771
27,000 Banca Nazionale del Lavoro S.p.A.
*................................ 87,023
2,492 Banca Popolare di Milano Scrl
(BPM)............................ 23,886
12,000 Capitalia S.p.A. .................. 62,656
-----------
297,850
-----------
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 79
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg Global Long/Short Equity Fund (a)
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, ITALY continued
Electric Utilities - 0.4%
12,000 C.I.R. S.p.A. -- Compagnie
Industriali Riunite.............. $ 35,480
20,673 Edison S.p.A. *.................... 42,236
-----------
77,716
-----------
Gas & Other Public Utilities - 0.2%
8,574 Snam Rete Gas S.p.A. .............. 47,860
-----------
Insurance - 0.2%
1,191 Fondiaria-Sai S.p.A. .............. 33,156
-----------
Publishing, Broadcasting & Cinema - 0.2%
72,000 Telecom Italia Media S.p.A. *...... 40,331
-----------
496,913
-----------
NETHERLANDS - 0.3%
Land & Water Transportation - 0.3%
2,100 TPG NV............................. 59,907
-----------
NORWAY - 0.6%
Oil & Coal Resources - 0.6%
761 Norsk Hydro ASA.................... 63,031
4,000 Statoil ASA........................ 68,415
-----------
131,446
-----------
SPAIN - 1.4%
Construction & Homebuilding - 0.4%
2,100 ACS, Actividades de Construccion y
Servicios SA..................... 52,128
753 Fomento de Construcciones y
Contratas SA..................... 38,588
-----------
90,716
-----------
Integrated Oil Cos. - 0.4%
3,187 Repsol YPF SA...................... 84,579
-----------
Oil Distribution - 0.1%
400 Compania Espanola de Petroleos SA
CEPSA)........................... 16,225
-----------
Real Estate Development - 0.3%
800 Corporacion Financiera Alba SA..... 32,533
338 Inmobiliaria Colonial.............. 16,486
712 TESTA, Inmuebles en Renta SA....... 16,101
-----------
65,120
-----------
Restaurants, Hotels & Theaters - 0.1%
1,114 Sol Melia SA....................... 13,262
-----------
Wholesale - 0.1%
600 Compania de Distribucion Integral
Logista SA....................... 31,098
-----------
301,000
-----------
SWEDEN - 0.7%
Banks & Credit Institutions - 0.3%
6,000 Nordea Bank AB..................... 60,910
-----------
Commercial Aircraft & Components - 0.0%
604 Saab AB............................ 9,905
-----------
Health Care & Hospital - 0.2%
3,021 Gambro AB, Class A................. 41,391
-----------
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, SWEDEN continued
Wholesale - 0.2%
1,800 Axfood AB.......................... $ 44,085
-----------
156,291
-----------
SWITZERLAND - 1.3%
Agriculture, Food & Beverage - 0.0%
22 Barry Callebaut AG *............... 5,265
-----------
Chemicals & Rubber - 0.5%
436 Ciba Specialty Chemicals AG........ 28,314
1,473 Clariant AG........................ 25,520
519 Syngenta AG........................ 54,387
-----------
108,221
-----------
Construction Materials - 0.1%
386 Holcim Ltd. ....................... 23,819
-----------
Furniture & Household Items - 0.2%
1,200 Compagnie Financiere Richemont AG,
Class A.......................... 37,805
-----------
Information & Services - 0.0%
22 Kuoni Reisen Holding............... 9,764
-----------
Insurance - 0.4%
130 Swiss Life Holding *............... 19,611
833 Swiss Re........................... 59,859
-----------
79,470
-----------
Metal Products & Machinery - 0.1%
82 Unaxis Holding AG.................. 11,558
-----------
275,902
-----------
UNITED KINGDOM - 7.0%
Basic Minerals & Metals - 0.1%
27,776 Corus Group plc *.................. 28,342
-----------
Beer, Liquor & Tobacco - 0.8%
4,800 British American Tobacco plc....... 84,624
1,400 Gallaher Group plc................. 19,973
3,500 SABMiller plc...................... 54,794
-----------
159,391
-----------
Cellular & Wireless - 0.3%
25,000 O2 plc *........................... 56,334
-----------
Chemicals & Rubber - 0.2%
9,713 Imperial Chemical Industries plc... 49,096
-----------
Commercial Aircraft & Components - 0.2%
8,923 Rolls-Royce Group plc *............ 41,141
-----------
Communications Utilities - 0.3%
9,000 BT Group plc....................... 34,949
10,000 Cable & Wireless plc............... 24,423
-----------
59,372
-----------
Construction & Homebuilding - 0.7%
2,700 Barratt Developments plc........... 33,647
773 Bellway plc........................ 12,854
773 Berkeley Group Holdings plc *...... 11,839
2,274 George Wimpey plc.................. 18,907
1,688 Persimmon plc...................... 24,098
6,000 Taylor Woodrow plc................. 34,692
565 Wilson Bowden plc.................. 12,417
-----------
148,454
-----------
</Table>
See the accompanying notes to the financial statements.
80 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg Global Long/Short Equity Fund (a)
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, UNITED KINGDOM continued
Construction Materials - 0.1%
8,109 Pilkington plc..................... $ 18,158
-----------
Drugs & Pharmaceuticals - 0.1%
2,760 Shire Pharmaceuticals plc.......... 31,527
-----------
Forest Products & Paper - 0.4%
3,200 Anglo American plc................. 75,887
-----------
Gas & Other Public Utilities - 0.2%
745 Pennon Group plc................... 13,740
1,981 Severn Trent plc................... 34,251
-----------
47,991
-----------
Information & Services - 0.3%
1,207 Davis Service Group plc............ 9,967
8,000 First Choice Holidays plc.......... 26,115
1,050 RAC plc............................ 18,412
-----------
54,494
-----------
Insurance - 0.6%
7,000 Aviva plc.......................... 83,993
10,791 Friends Provident plc.............. 36,143
-----------
120,136
-----------
Land & Water Transportation - 0.2%
1,203 Arriva plc......................... 11,934
1,881 Exel plc........................... 30,141
-----------
42,075
-----------
Miscellaneous Finance - 0.2%
22,674 Legal & General Group plc.......... 48,522
-----------
Oil & Coal Resources - 0.6%
10,000 BG Group plc....................... 77,710
3,000 Xstrata plc........................ 57,255
-----------
134,965
-----------
Publishing, Broadcasting & Cinema - 0.1%
3,000 United Business Media plc.......... 30,158
-----------
Real Estate Development - 0.5%
2,739 British Land Co., plc.............. 41,612
1,664 Hammerson plc...................... 26,145
1,783 Land Securities Group plc.......... 43,563
-----------
111,320
-----------
Restaurants, Hotels & Theaters - 0.7%
7,889 Hilton Group plc................... 44,871
3,571 InterContinental Hotels Group
plc.............................. 41,668
1,784 Whitbread plc...................... 31,401
1,000 Wolverhampton & Dudley Breweries
plc.............................. 21,258
-----------
139,198
-----------
Retail - 0.4%
3,500 Associated British Foods plc....... 49,800
8,000 Somerfield plc..................... 31,708
-----------
81,508
-----------
1,478,069
-----------
UNITED STATES - 65.6%
Agriculture, Food & Beverage - 1.5%
200 Alico, Inc. *...................... 10,540
2,200 Archer-Daniels-Midland Co. ........ 54,076
200 Cagle's, Inc., Class A *........... 1,840
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, UNITED STATES continued
Agriculture, Food & Beverage continued
500 Chiquita Brands International,
Inc. ............................ $ 13,390
450 Flowers Foods, Inc. ............... 12,695
300 Hansen Natural Corp. *............. 18,021
497 Lance, Inc. ....................... 7,987
200 Omega Protein Corp. *.............. 1,364
1,800 Pepsi Bottling Group, Inc. ........ 50,130
900 PepsiAmericas, Inc. ............... 20,394
200 Ralcorp Holdings, Inc. ............ 9,470
100 Seaboard Corp. .................... 107,299
300 Seneca Foods Corp., Class B *...... 5,220
-----------
312,426
-----------
Airlines - 0.8%
400 Alaska Air Group, Inc. *........... 11,776
1,500 FedEx Corp. ....................... 140,925
400 MAIR Holdings, Inc. *.............. 3,568
500 Mesa Air Group, Inc. *............. 3,500
900 SkyWest, Inc. ..................... 16,731
-----------
176,500
-----------
Autos - 0.5%
700 Autoliv, Inc. ..................... 33,355
600 BorgWarner, Inc. .................. 29,208
400 Modine Manufacturing Co. .......... 11,732
400 PACCAR, Inc. ...................... 28,956
120 R&B, Inc. *........................ 1,591
-----------
104,842
-----------
Banks & Credit Institutions - 3.1%
700 Advanta Corp., Class A............. 14,560
4,100 Bank of America Corp. ............. 180,811
3,400 Bank of New York Co., Inc. ........ 98,770
200 Carver Bancorp, Inc. .............. 3,740
1,000 Comerica, Inc. .................... 55,080
600 Commercial Federal Corp. .......... 16,590
300 Community West Bancshares.......... 3,660
1,100 Doral Financial Corp. ............. 24,079
200 Federal Agricultural Mortgage
Corp., Class C................... 3,498
240 First Bank of Delaware *........... 744
100 First Citizens BancShares, Inc.,
Class A.......................... 14,638
200 First Federal Bancshares, Inc. .... 4,918
300 First Mariner Bancorp *............ 5,316
100 First Place Financial Corp. ....... 1,830
100 Habersham Bancorp.................. 2,300
300 Horizon Bancorp.................... 8,700
900 Independence Community Bank
Corp. ........................... 35,100
200 Intervest Bancshares Corp. *....... 3,600
210 LSB Financial Corp. ............... 5,409
300 Medallion Financial Corp. ......... 2,742
1,400 PNC Financial Services Group,
Inc. ............................ 72,072
415 Provident Bankshares Corp. ........ 13,678
400 R&G Financial Corp., Class B....... 12,468
440 Republic First Bancorp, Inc. *..... 6,327
300 Silicon Valley Bancshares *........ 13,218
600 Sovereign Bancorp, Inc. ........... 13,296
500 Sterling Bancshares, Inc. ......... 7,100
200 Timberland Bancorp, Inc. .......... 4,430
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 81
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg Global Long/Short Equity Fund (a)
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, UNITED STATES continued
Banks & Credit Institutions continued
337 United Community Financial
Corp. ........................... $ 3,737
400 Westcorp........................... 16,900
400 WFS Financial, Inc. *.............. 17,260
-----------
666,571
-----------
Basic Minerals & Metals - 0.9%
100 Carpenter Technology Corp. ........ 5,941
500 Lone Star Technologies, Inc. *..... 19,715
200 Nucor Corp. ....................... 11,512
100 Olympic Steel, Inc. *.............. 1,788
600 Phelps Dodge Corp. ................ 61,038
500 Precision Castparts Corp. ......... 38,505
300 Reliance Steel & Aluminum Co. ..... 12,003
700 Steel Dynamics, Inc. .............. 24,115
400 United States Steel Corp. ......... 20,340
-----------
194,957
-----------
Beer, Liquor & Tobacco - 0.4%
1,200 Altria Group, Inc. ................ 78,468
1,100 Star Scientific, Inc. *............ 5,819
-----------
84,287
-----------
Biotechnology - 0.7%
200 ABIOMED, Inc. *.................... 2,116
900 Celgene Corp. *.................... 30,645
2,175 Gilead Sciences, Inc. *............ 77,865
500 Harvard Bioscience, Inc. *......... 1,945
500 Invitrogen Corp. *................. 34,600
-----------
147,171
-----------
Cellular & Wireless - 1.1%
1,600 Nextel Partners, Inc., Class A *... 35,136
900 SBC Communications, Inc. .......... 21,321
4,000 Sprint Corp. ...................... 91,000
800 Telephone & Data Systems, Inc. .... 65,280
400 USA Mobility, Inc. *............... 12,960
-----------
225,697
-----------
Chemicals & Rubber - 1.2%
500 A. Schulman, Inc. ................. 8,710
400 Arch Chemicals, Inc. .............. 11,388
100 Bairnco Corp. ..................... 1,152
400 Georgia Gulf Corp. ................ 18,392
700 Great Lakes Chemical Corp. ........ 22,484
1,400 Hercules, Inc. *................... 20,272
1,000 Hexcel Corp. *..................... 15,510
1,100 Lyondell Chemical Co. ............. 30,712
900 Rohm & Haas Co. ................... 43,200
1,600 Sherwin-Williams Co. .............. 70,384
1,300 Terra Industries, Inc. *........... 10,088
-----------
252,292
-----------
Communications Utilities - 0.6%
100 Atlantic Tele-Network, Inc. ....... 3,202
200 Hector Communications Corp. ....... 4,300
3,600 Yahoo!, Inc. *..................... 122,040
-----------
129,542
-----------
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, UNITED STATES continued
Construction & Homebuilding - 1.1%
200 Chemed Corp. ...................... $ 15,296
1,200 D. R. Horton, Inc. ................ 35,088
500 Hovnanian Enterprises, Inc., Class
A *.............................. 25,500
800 Lennar Corp., Class A.............. 45,344
390 M.D.C. Holdings, Inc. ............. 27,164
800 Pulte Homes, Inc. ................. 58,904
800 Willbros Group, Inc. *............. 16,160
-----------
223,456
-----------
Construction Materials - 0.0%
400 U.S. Concrete, Inc. *.............. 2,508
-----------
Consumer Durables - 0.4%
900 Brunswick Corp. ................... 42,165
300 Coachmen Industries, Inc. ......... 4,080
400 Harman International Industries,
Inc. ............................ 35,384
-----------
81,629
-----------
Drugs & Pharmaceuticals - 1.2%
500 Abbott Laboratories................ 23,310
200 Alpharma, Inc., Class A............ 2,464
300 Bone Care International, Inc. *.... 7,782
1,100 Dade Behring Holdings, Inc. *...... 64,823
400 First Horizon Pharmaceutical Corp.
*................................ 6,752
1,200 Genzyme Corp. *.................... 68,688
1,200 Immucor, Inc. *.................... 36,228
300 Lifecore Biomedical, Inc. *........ 5,331
400 Matrixx Initiatives, Inc. *........ 4,516
700 United Therapeutics Corp. *........ 31,987
400 Weider Nutrition International,
Inc. *........................... 2,436
-----------
254,317
-----------
Electric Utilities - 1.7%
2,200 Constellation Energy Group,
Inc. ............................ 113,740
100 Duke Energy Corp. ................. 2,801
100 Green Mountain Power Corp. ........ 2,930
2,100 PG&E Corp. ........................ 71,610
1,300 TXU Corp. ......................... 103,519
1,200 Westar Energy, Inc. ............... 25,968
2,000 Xcel Energy, Inc. ................. 34,360
-----------
354,928
-----------
Financial Investments - 1.1%
700 Aaron Rents, Inc., Class A......... 12,432
100 California First National
Bancorp.......................... 1,250
600 Choice Hotels International,
Inc. ............................ 37,170
300 Electro Rent Corp. *............... 4,026
185 ePlus, Inc. *...................... 2,159
4,000 General Electric Co. .............. 144,240
600 MCG Capital Corp. ................. 9,231
200 Shenandoah Telecommunications
Co. ............................. 6,200
400 SurModics, Inc. *.................. 12,764
200 Universal Compression Holdings,
Inc. *........................... 7,574
200 Willis Lease Finance Corp. *....... 1,650
-----------
238,696
-----------
</Table>
See the accompanying notes to the financial statements.
82 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg Global Long/Short Equity Fund (a)
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, UNITED STATES continued
Forest Products & Paper - 1.0%
200 Buckeye Technologies, Inc. *....... $ 2,160
300 Chesapeake Corp. .................. 6,306
300 CSS Industries, Inc. .............. 10,965
1,400 Louisiana-Pacific Corp. ........... 35,196
200 Nashua Corp. *..................... 1,740
800 Universal Forest Products, Inc. ... 31,080
1,800 Weyerhaeuser Co. .................. 123,300
-----------
210,747
-----------
Furniture & Household Items - 0.8%
300 A. T. Cross Co., Class A *......... 1,770
2,100 Acuity Brands, Inc. ............... 56,700
200 American Biltrite, Inc. *.......... 2,250
200 American Locker Group, Inc. *...... 1,080
200 Chase Corp. ....................... 3,144
300 Communications Systems, Inc. ...... 3,420
200 Congoleum Corp., Class A *......... 1,060
300 Genlyte Group, Inc. *.............. 26,991
1,100 Griffon Corp. *.................... 23,551
100 JAKKS Pacific, Inc. *.............. 2,147
200 Juno Lighting, Inc. ............... 7,560
600 K2, Inc. *......................... 8,250
300 Lamson & Sessions Co. *............ 2,985
300 Mikohn Gaming Corp. *.............. 3,768
800 Movado Group, Inc. ................ 14,800
700 Steelcase, Inc., Class A........... 9,660
-----------
169,136
-----------
Gas & Other Public Utilities - 0.5%
300 California Water Service Group..... 10,011
100 Casella Waste Systems, Inc., Class
A *.............................. 1,323
300 Clean Harbors, Inc. *.............. 5,502
400 Duratek, Inc. *.................... 7,980
3,800 NiSource, Inc. .................... 86,602
200 Waste Industries USA, Inc. ........ 2,780
-----------
114,198
-----------
Government Aircraft & Defense - 0.8%
200 I.D. Systems, Inc. *............... 2,216
300 Innovative Solutions & Support,
Inc. *........................... 9,525
200 LaBarge, Inc. *.................... 2,618
2,100 Raytheon Co. ...................... 81,270
700 Textron, Inc. ..................... 52,234
200 Todd Shipyards Corp. .............. 3,784
300 United Industrial Corp. ........... 8,886
-----------
160,533
-----------
Health Care & Hospital - 2.8%
2,000 Aetna, Inc. ....................... 149,900
1,100 Coventry Health Care, Inc. *....... 74,954
900 Humana, Inc. *..................... 28,746
600 Kindred Healthcare, Inc. *......... 21,060
400 Medcath Corp. *.................... 11,720
300 National Dentex Corp. *............ 5,910
300 National Home Health Care Corp. ... 3,474
700 RehabCare Group, Inc. *............ 20,097
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, UNITED STATES continued
Health Care & Hospital continued
700 Triad Hospitals, Inc. *............ $ 35,070
2,600 UnitedHealth Group, Inc. .......... 247,988
-----------
598,919
-----------
Information & Services - 3.2%
200 Ablest, Inc. *..................... 1,460
600 ABM Industries, Inc. .............. 11,538
300 Angelica Corp. .................... 8,400
700 Bluegreen Corp. *.................. 8,995
900 Brink's Co. ....................... 31,140
300 Butler International, Inc. *....... 1,464
300 Carriage Services, Inc. *.......... 1,671
220 Cass Information Systems, Inc. .... 8,470
1,700 Checkfree Corp. *.................. 69,292
300 Cornell Cos., Inc. *............... 3,780
700 Covance, Inc. *.................... 33,327
400 Dun & Bradstreet Corp. *........... 24,580
200 Ecology and Environment, Inc.,
Class A.......................... 1,416
300 Exponent, Inc. *................... 7,167
300 Forrester Research, Inc. *......... 4,224
600 Heidrick & Struggles International,
Inc. *........................... 22,062
200 Hudson Highland Group, Inc. *...... 3,418
500 Jones Lang LaSalle, Inc. *......... 23,325
300 Kendle International, Inc. *....... 3,450
500 Kforce, Inc. *..................... 5,495
700 Labor Ready, Inc. *................ 13,055
600 Laureate Education, Inc. *......... 25,674
500 Layne Christensen Co. *............ 8,635
200 MAXIMUS, Inc. ..................... 6,698
200 Metal Management, Inc. ............ 5,136
200 Michael Baker Corp. *.............. 4,410
450 Monro Muffler Brake, Inc. *........ 11,615
1,000 Moody's Corp. ..................... 80,860
600 MPS Group, Inc. *.................. 6,306
200 National Technical Systems, Inc.
*................................ 860
580 NCO Group, Inc. *.................. 11,339
200 Nobel Learning Communities, Inc.
*................................ 1,670
400 Opinion Research Corp. *........... 2,804
1,300 Parexel International Corp. *...... 30,550
600 Per-Se Technologies, Inc. *........ 9,210
500 Pharmaceutical Product............. 24,225
Development, Inc. *
100 Pre-Paid Legal Services, Inc. ..... 3,384
2,000 Prudential Financial, Inc. ........ 114,800
300 RCM Technologies, Inc. *........... 1,512
400 Register.com, Inc. *............... 2,348
600 Robert Half International, Inc. ... 16,176
300 Steiner Leisure Ltd. *............. 9,807
1,700 TeleTech Holdings, Inc. *.......... 21,964
-----------
687,712
-----------
Instruments - 4.0%
200 Allied Healthcare Products, Inc.
*................................ 1,292
1,100 American Medical Systems Holdings,
Inc. *........................... 18,898
200 American Science & Engineering,
Inc. *........................... 8,942
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 83
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg Global Long/Short Equity Fund (a)
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, UNITED STATES continued
Instruments continued
600 Armor Holdings, Inc. *............. $ 22,254
300 ArthroCare Corp. *................. 8,550
200 Atrion Corp. ...................... 9,727
600 Bausch & Lomb, Inc. ............... 43,980
700 C.R. Bard, Inc. ................... 47,656
100 Checkpoint Systems, Inc. *......... 1,688
600 Conmed Corp. *..................... 18,072
438 Cooper Cos., Inc. ................. 31,930
400 Cyberonics, Inc. *................. 17,668
700 Datascope Corp. ................... 21,406
300 DJ Orthopedics, Inc. *............. 7,515
1,000 Edwards Lifesciences Corp. *....... 43,220
500 Esterline Technologies Corp. *..... 17,275
300 Integra LifeSciences Holdings *.... 10,566
1,200 Invacare Corp. .................... 53,556
3,400 Johnson & Johnson.................. 228,344
1,400 Johnson Controls, Inc. ............ 78,064
100 K-Tron International, Inc. *....... 3,044
100 Kewaunee Scientific Corp. ......... 744
300 LoJack Corp. *..................... 4,131
2,100 Medtronic, Inc. ................... 106,995
300 Mesa Laboratories, Inc. ........... 4,141
300 Natus Medical, Inc. *.............. 2,508
1,300 PerkinElmer, Inc. ................. 26,819
200 Thermo Electron Corp. *............ 5,058
600 Thoratec Corp. *................... 7,332
-----------
851,375
-----------
Insurance - 3.3%
1,800 ACE Ltd. .......................... 74,286
1,900 Allstate Corp. .................... 102,714
300 Ambac Financial Group, Inc. ....... 22,425
300 American Safety Insurance Holdings
Ltd. *........................... 4,470
500 AmerUs Group Co. .................. 23,625
1,050 Cincinnati Financial Corp. ........ 45,791
800 Everest Re Group Ltd. ............. 68,088
500 Fpic Insurance Group, Inc. *....... 16,075
200 Great American Financial Resources,
Inc. ............................ 3,388
900 HCC Insurance Holdings, Inc. ...... 32,544
1,000 Lincoln National Corp. ............ 45,140
400 Loews Corp. ....................... 29,416
600 Max Re Capital Ltd. ............... 14,118
700 MBIA, Inc. ........................ 36,596
200 Merchants Group, Inc. ............. 4,870
100 National Western Life Insurance
Co., Class A *................... 17,094
500 PacifiCare Health Systems, Inc.
*................................ 28,460
600 Radian Group, Inc. ................ 28,644
800 SAFECO Corp. ...................... 38,968
200 Selective Insurance Group, Inc. ... 9,246
3,100 UnumProvident Corp. ............... 52,762
100 WellPoint, Inc. *.................. 12,535
-----------
711,255
-----------
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, UNITED STATES continued
Integrated Oil Cos. - 0.4%
200 ConocoPhillips..................... $ 21,568
300 Murphy Oil Corp. .................. 29,619
600 Occidental Petroleum Corp. ........ 42,702
-----------
93,889
-----------
IT Hardware - 3.3%
600 Amphenol Corp., Class A............ 22,224
700 Avocent Corp. *.................... 17,962
600 Cobra Electronics Corp. *.......... 4,530
800 Comverse Technology, Inc. *........ 20,176
1,800 Crown Castle International Corp.
*................................ 28,908
1,006 Digi International, Inc. *......... 13,802
200 DIRECTV Group, Inc. *.............. 2,884
400 EFJ, Inc. *........................ 3,292
100 EMS Technologies, Inc. *........... 1,360
800 Energy Conversion Devices, Inc.
*................................ 18,184
200 Espey Manufacturing & Electronics
Corp. ........................... 5,270
800 Evergreen Solar, Inc. *............ 5,656
2,600 Harris Corp. ...................... 84,890
600 L-3 Communications Holdings,
Inc. ............................ 42,612
1,100 Lam Research Corp. *............... 31,746
5,300 Marvell Technology Group Ltd. *.... 203,202
200 Merrimac Industries, Inc. *........ 1,790
700 Microsemi Corp. *.................. 11,403
9,200 Motorola, Inc. .................... 137,724
300 Park Electrochemical Corp. ........ 6,078
500 Photronics, Inc. *................. 9,050
200 RF Monolithics, Inc. *............. 912
300 Semitool, Inc. *................... 3,060
200 Sparton Corp. *.................... 1,866
300 ViaSat, Inc. *..................... 5,607
900 Virage Logic Corp. *............... 9,864
-----------
694,052
-----------
Land & Water Transportation - 0.6%
400 Celadon Group, Inc. *.............. 7,420
1,200 CNF, Inc. ......................... 56,148
300 EGL, Inc. *........................ 6,840
500 General Maritime Corp. *........... 24,220
675 Marten Transport Ltd. *............ 14,398
400 U.S. Xpress Enterprises, Inc.,
Class A *........................ 6,540
700 Werner Enterprises, Inc. .......... 13,601
-----------
129,167
-----------
Mainframe & Minicomputers - 0.6%
3,000 Apple Computer, Inc. *............. 125,010
300 Dell, Inc. *....................... 11,526
-----------
136,536
-----------
Metal Products & Machinery - 2.1%
1,000 American Standard Cos., Inc. ...... 46,480
1,000 Black & Decker Corp. .............. 78,990
200 Bonso Electronics International,
Inc. ............................ 884
200 Chicago Rivet & Machine Co. ....... 6,220
200 Eastern Co. ....................... 4,420
300 ESCO Technologies, Inc. *.......... 24,105
500 Gerber Scientific, Inc. *.......... 3,640
300 Greenbrier Cos., Inc. ............. 10,527
300 Kennametal, Inc. .................. 14,247
</Table>
See the accompanying notes to the financial statements.
84 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg Global Long/Short Equity Fund (a)
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, UNITED STATES continued
Metal Products & Machinery continued
500 MagneTek, Inc. *................... $ 2,665
100 P & F Industries, Inc. *........... 1,506
100 Regal-Beloit Corp. ................ 2,879
200 Robbins & Myers, Inc. ............. 4,402
1,200 Rockwell Automation, Inc. ......... 67,968
300 SL Industries, Inc. *.............. 4,191
200 Standard Motor Products, Inc. ..... 2,340
100 Standex International Corp. ....... 2,730
500 Tecumseh Products Co., Class B..... 19,568
600 Timken Co. ........................ 16,404
3,300 Tyco International Ltd. ........... 111,539
108 Velcro Industries NV............... 1,429
600 York International Corp. .......... 23,508
-----------
450,642
-----------
Miscellaneous Finance - 1.7%
1,000 A.G. Edwards, Inc. ................ 44,800
400 Affiliated Managers Group, Inc.
*................................ 24,812
400 BlackRock, Inc., Class A........... 29,972
200 Chicago Mercantile Exchange........ 38,806
2,500 Citigroup, Inc. ................... 112,351
200 Franklin Resources, Inc. .......... 13,730
483 Knight Trading Group, Inc., Class A
*................................ 4,656
600 Legg Mason, Inc. .................. 46,884
900 Raymond James Financial, Inc. ..... 27,270
533 Stifel Financial Corp. *........... 11,619
300 SWS Group, Inc. ................... 4,809
-----------
359,709
-----------
Oil & Coal Resources - 1.9%
1,100 Anadarko Petroleum Corp. .......... 83,710
300 Callon Petroleum Co. *............. 4,662
300 Chesapeake Energy Corp. ........... 6,582
500 Comstock Resources, Inc. *......... 14,370
300 Delta Petroleum Corp. *............ 4,362
300 Edge Petroleum Corp. *............. 4,968
1,000 Magnum Hunter Resources, Inc. *.... 16,110
300 Meridian Resource Corp. *.......... 1,548
200 Noble Energy, Inc. ................ 13,604
200 Peabody Energy Corp. .............. 9,272
200 Petrohawk Energy Corp. *........... 2,096
900 Plains Exploration & Product Co.
*................................ 31,410
800 Resource America, Inc., Class A.... 28,036
400 Southwestern Energy Co. *.......... 22,704
400 Tri-Valley Corp. *................. 3,160
500 Ultra Petroleum Corp. *............ 25,400
3,732 XTO Energy, Inc. .................. 122,559
-----------
394,553
-----------
Oil Distribution - 0.6%
1,300 Ashland, Inc. ..................... 87,711
600 Questar Corp. ..................... 35,550
100 Sunoco, Inc. ...................... 10,352
-----------
133,613
-----------
Oil Drilling & Services - 3.5%
200 Atwood Oceanics, Inc. *............ 13,308
1,800 Baker Hughes, Inc. ................ 80,082
600 Cal Dive International, Inc. *..... 27,180
400 Dawson Geophysical Co. *........... 9,680
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, UNITED STATES continued
Oil Drilling & Services continued
2,800 Grant Prideco, Inc. *.............. $ 67,648
2,300 Grey Wolf, Inc. *.................. 15,134
2,100 Halliburton Co. ................... 90,825
1,000 McDermott International, Inc. *.... 18,930
1,000 Nabors Industries Ltd. *........... 59,140
1,772 National-Oilwell, Inc. *........... 82,752
300 Newpark Resources *................ 1,767
1,700 Noble Corp. ....................... 95,557
300 Pioneer Drilling Co. *............. 4,131
1,800 Transocean, Inc. *................. 92,628
300 Unit Corp. *....................... 13,551
600 Veritas DGC, Inc. *................ 17,976
400 W-H Energy Services, Inc. *........ 9,572
800 Weatherford International Ltd. *... 46,352
-----------
746,213
-----------
Photooptical, Micros & Office Machinery - 0.7%
600 Diebold, Inc. ..................... 32,910
1,700 Eastman Kodak Co. ................. 55,335
900 EMC Corp. *........................ 11,088
300 PAR Technology Corp. *............. 4,671
200 Printronix, Inc. .................. 3,220
1,000 Storage Technology Corp. *......... 30,800
210 Wells-Gardner Electronics Corp.
*................................ 1,006
300 X-Rite, Inc. ...................... 4,512
-----------
143,542
-----------
Publishing, Broadcasting & Cinema - 0.6%
500 Bowne & Co., Inc. ................. 7,520
400 Central European Media Enterprises
Ltd., Class A *.................. 19,784
300 Champion Industries, Inc. ......... 1,230
400 Image Entertainment, Inc. *........ 2,188
200 Outlook Group Corp. ............... 1,466
600 Paxar Corp. *...................... 12,804
1,300 Reader's Digest Association,
Inc. ............................ 22,503
500 Regent Communications, Inc. *...... 2,675
400 Scholastic Corp. *................. 14,756
2,500 Sirius Satellite Radio, Inc. *..... 14,050
1,100 Time Warner, Inc. *................ 19,305
200 Tufco Technologies, Inc. *......... 1,290
200 Viacom, Inc. ...................... 7,008
100 XM Satellite Radio Holdings, Inc.,
Class A *........................ 3,150
-----------
129,729
-----------
Real Estate Development - 0.1%
200 Amrep Corp. ....................... 4,900
200 ILX Resorts, Inc. ................. 2,046
100 J.W. Mays, Inc. *.................. 1,688
100 Patriot Transportation Holding,
Inc. *........................... 5,207
1,500 Stewart Enterprises, Inc., Class A
*................................ 9,225
300 Tarragon Corp. *................... 6,057
-----------
29,123
-----------
Real Estate Investment Trusts - 1.3%
300 Bedford Property Investors,
Inc. ............................ 6,549
300 CBL & Associates Properties,
Inc. ............................ 21,453
400 Commercial NET Lease Realty........ 7,380
300 Correctional Properties Trust...... 7,575
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 85
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg Global Long/Short Equity Fund (a)
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, UNITED STATES continued
Real Estate Investment Trusts continued
2,600 HRPT Properties Trust.............. $ 30,966
2,200 iStar Financial, Inc. ............. 90,596
300 Mission West Properties............ 3,180
300 National Health Investors, Inc. ... 7,794
300 One Liberty Properties, Inc. ...... 5,598
300 Parkway Properties, Inc. .......... 14,010
300 Pennsylvania Real Estate Investment
Trust............................ 12,096
200 Presidential Realty Corp., Class
B................................ 1,800
500 SL Green Realty Corp. ............. 28,110
2,000 Trizec Properties, Inc. ........... 38,000
200 Windrose Medical Properties
Trust............................ 2,742
400 Winston Hotels, Inc. .............. 4,680
-----------
282,529
-----------
Restaurants, Hotels & Theaters - 1.0%
200 Ark Restaurants Corp. ............. 6,575
300 Century Casinos, Inc. *............ 2,721
1,700 CKE Restaurants, Inc. *............ 26,945
100 Darden Restaurants, Inc. .......... 3,068
200 Dave & Buster's, Inc. *............ 3,740
600 Famous Dave's of America, Inc. *... 8,448
200 Frisch's Restaurants, Inc. ........ 5,198
1,200 Hilton Hotels Corp. ............... 26,820
400 Interstate Hotels & Resorts, Inc.
*................................ 1,928
1,000 Landry's Restaurants, Inc. ........ 28,920
300 Lone Star Steakhouse & Saloon,
Inc. ............................ 8,672
600 Marcus Corp. ...................... 12,300
600 Monarch Casino & Resort, Inc. *.... 11,940
200 Nathan's Famous, Inc. *............ 1,690
300 Rubio's Restaurants, Inc. *........ 3,000
200 Star Buffet, Inc. ................. 1,478
300 Starbucks Corp. *.................. 15,498
500 Station Casinos, Inc. ............. 33,775
-----------
202,716
-----------
Retail - 6.1%
1,300 7-Eleven, Inc. *................... 31,226
1,200 Abercrombie & Fitch Co., Class A... 68,688
800 Aeropostale, Inc. *................ 26,200
2,300 American Eagle Outfitters, Inc. ... 67,965
200 Blair Corp. ....................... 6,594
500 Books-A-Million, Inc. ............. 4,550
1,200 Borders Group, Inc. ............... 31,944
1,800 Caremark Rx, Inc. *................ 71,604
800 Charming Shoppes *................. 6,504
2,900 Chico's FAS, Inc. *................ 81,954
400 Children's Place Retail Stores,
Inc. *........................... 19,100
200 Collegiate Pacific, Inc. .......... 2,210
1,800 CVS Corp. ......................... 94,716
800 eBay, Inc. *....................... 29,808
300 EZCORP, Inc., Class A *............ 3,984
1,300 Federated Department Stores,
Inc. ............................ 82,732
300 Gottschalks, Inc. *................ 3,105
1,000 GSI Commerce, Inc. *............... 13,530
600 Guess?, Inc. *..................... 8,220
300 Hastings Entertainment, Inc. *..... 2,001
1,400 Home Depot, Inc. .................. 53,536
3,000 J.C. Penney Co., Inc. ............. 155,759
</Table>
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, UNITED STATES continued
Retail continued
400 Longs Drug Stores Corp. ........... $ 13,688
1,700 Nordstrom, Inc. ................... 94,146
2,000 Office Depot, Inc. *............... 44,360
300 Overstock.com, Inc. *.............. 12,897
200 PC Mall, Inc. *.................... 2,484
300 Retail Ventures, Inc. *............ 2,733
200 Rush Enterprises, Inc., Class B
*................................ 3,372
100 S&K Famous Brands, Inc. *.......... 1,628
200 Shoe Carnival, Inc. *.............. 3,500
300 Stage Store, Inc. *................ 11,517
400 Stamps.com, Inc. *................. 6,640
700 Stein Mart, Inc. *................. 15,750
1,200 Supervalu, Inc. ................... 40,020
2,500 TJX Cos., Inc. .................... 61,575
2,300 Toys R US, Inc. *.................. 59,248
700 UGI Corp. ......................... 31,794
100 Urban Outfitters, Inc. *........... 4,797
300 Varsity Group, Inc. *.............. 2,100
-----------
1,278,179
-----------
Soaps & Cosmetics - 1.1%
4,100 Avon Products, Inc. ............... 176,054
200 CPAC, Inc. ........................ 1,070
900 Elizabeth Arden, Inc. *............ 21,366
700 Estee Lauder Cos., Inc., Class A... 31,486
200 Parlux Fragrances, Inc. *.......... 4,330
-----------
234,306
-----------
Software - 4.9%
600 Activision, Inc. *................. 8,880
1,200 Adobe Systems, Inc. ............... 80,604
700 Allscripts Healthcare Solution,
Inc. *........................... 10,010
400 American Software, Inc., Class A... 2,596
200 Ansoft Corp. *..................... 5,396
300 Applix, Inc. *..................... 1,808
3,200 Autodesk, Inc. .................... 95,232
200 Cerner Corp. *..................... 10,502
1,000 Ciber, Inc. *...................... 7,270
2,600 Cognizant Technology Solutions
Corp. *.......................... 120,120
1,100 Computer Sciences Corp. *.......... 50,435
400 Dendrite International, Inc. *..... 5,616
300 Edgewater Technology, Inc. *....... 1,254
3,100 Electronic Data Systems Corp. ..... 64,077
400 First Consulting Group, Inc. *..... 2,080
101 HMS Holdings Corp. *............... 747
500 Hyperion Solutions Corp. *......... 22,055
200 Infocrossing, Inc. *............... 3,168
2,200 International Business Machines
Corp. ........................... 201,035
365 JDA Software Group, Inc. *......... 5,125
300 Keynote Systems, Inc. *............ 3,561
800 Macromedia, Inc. *................. 26,800
300 Moldflow Corp. *................... 4,797
200 Netmanage, Inc. *.................. 1,322
400 NetScout Systems, Inc. *........... 1,780
300 Niku Corp. *....................... 5,415
200 NWH, Inc. ......................... 2,960
400 PDF Solutions, Inc. *.............. 5,600
</Table>
See the accompanying notes to the financial statements.
86 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg Global Long/Short Equity Fund (a)
<Table>
<Caption>
SHARES VALUE
- ------------------------------------------------------------
COMMON STOCK, UNITED STATES continued
Software continued
1,000 Perot Systems Corp., Class A *..... $ 13,440
800 Phoenix Technologies Ltd. *........ 7,616
500 Radiant Systems, Inc. *............ 4,900
300 Redback Networks, Inc. *........... 1,794
300 SPSS, Inc. *....................... 5,217
300 Stellent, Inc. *................... 2,523
400 SYKES Enterprises, Inc. *.......... 2,748
700 Take-Two Interactive Software, Inc.
*................................ 27,370
300 TALX Corp. ........................ 5,448
200 TechTeam Global, Inc. *............ 2,206
600 THQ, Inc. *........................ 16,884
100 Tier Technologies, Inc., Class B
*................................ 737
1,300 TriZetto Group, Inc. *............. 12,103
300 TSR, Inc. ......................... 2,421
200 Ulticom, Inc. *.................... 2,226
400 Ultimate Software Group, Inc. *.... 6,392
400 Verint Systems, Inc. *............. 13,976
3,000 VeriSign, Inc. *................... 86,100
300 Websense, Inc. *................... 16,140
1,200 Wind River Systems, Inc. *......... 18,096
800 Witness Systems, Inc. *............ 14,040
-----------
1,012,622
-----------
Textiles & Apparel - 1.4%
600 Ashworth, Inc. *................... 6,834
2,300 Coach, Inc. *...................... 130,249
300 Deckers Outdoor Corp. *............ 10,722
700 DHB Industries, Inc. *............. 6,160
300 Dixie Group, Inc. *................ 4,746
200 Haggar Corp. ...................... 4,038
200 Hallwood Group, Inc. *............. 26,000
200 Hampshire Group Ltd. *............. 7,990
700 Liz Claiborne, Inc. ............... 28,091
800 Polo Ralph Lauren Corp. ........... 31,040
700 Quiksilver, Inc. *................. 20,321
400 Saucony, Inc., Class A............. 9,080
200 Tandy Brands Accessories, Inc. .... 2,994
200 Timberland Co., Class A *.......... 14,186
-----------
302,451
-----------
Wholesale - 1.0%
447 Aristotle Corp. *.................. 3,236
1,200 Arrow Electronics, Inc. *.......... 30,420
700 Aviall, Inc. *..................... 19,600
200 Bell Microproducts, Inc. *......... 1,496
300 Cantel Medical Corp. *............. 8,688
300 Delta Apparel, Inc. ............... 8,880
300 Department 56, Inc. *.............. 5,238
300 Enesco Group, Inc. *............... 1,995
</Table>
<Table>
<Caption>
SHARES OR
PRINCIPAL VALUE
- ------------------------------------------------------------
COMMON STOCK, UNITED STATES continued
Wholesale continued
200 GTSI Corp. *....................... $ 1,940
400 Handleman Co. ..................... 7,584
100 Hughes Supply, Inc. ............... 2,975
1,000 Patterson Cos., Inc. *............. 49,950
300 Pomeroy IT Solutions, Inc. *....... 4,470
200 Scansource, Inc. *................. 10,366
200 Ventiv Health, Inc. *.............. 4,600
600 W.W. Grainger, Inc. ............... 37,362
700 WESCO International, Inc. *........ 19,600
-----------
218,400
-----------
13,925,665
-----------
TOTAL COMMON STOCK
(COST $15,222,026)............... 18,280,586
-----------
RIGHTS - 0.0%
GERMANY - 0.0%
Electric Utilities - 0.0%
1,200 Energie Baden-Wuerttemberg AG...... 187
-----------
TOTAL RIGHTS (COST $0)............. 187
-----------
REPURCHASE AGREEMENT - 18.9%
UNITED STATES - 18.9%
$4,017,826 Bear Stearns dated 3/31/05, due
4/1/05 at 2.63% with a maturity
value of $4,018,120 (Fully
collateralized by U.S. Treasury
Bills)........................... 4,017,826
-----------
TOTAL REPURCHASE AGREEMENT (COST
$4,017,826)...................... 4,017,826
-----------
TOTAL INVESTMENTS (COST
$19,239,852) (b) -- 105.0%....... 22,298,599
NET OTHER ASSETS
(LIABILITIES) -- (5.0)%.......... (1,065,180)
-----------
NET ASSETS -- 100.0%............... $21,233,419
===========
</Table>
- ---------------
* Non-income producing security.
(a) All long positions are pledged as collateral for securities sold short.
(b) The aggregate cost for federal income tax purposes is $19,351,864 and
differs from value by net unrealized appreciation of securities as follows:
<Table>
Unrealized appreciation.................... $3,156,032
Unrealized depreciation.................... (209,297)
----------
Net unrealized appreciation................ $2,946,735
==========
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 87
Financial Statements
Statement of Securities Sold Short
LAUDUS ROSENBERG GLOBAL LONG/SHORT EQUITY FUND as of 3/31/05
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK - 84.7%
AUSTRIA - 0.2%
Electric Utilities - 0.2%
200 Oesterreichische
Elektrizitaetswirtschafts AG,
Class A......................... $ 45,488
-----------
BELGIUM - 1.4%
Beer, Liquor & Tobacco - 0.2%
1,114 InBev............................. 39,105
-----------
Drugs & Pharmaceuticals - 0.2%
691 UCB SA............................ 33,524
-----------
Electric Utilities - 0.4%
180 Electrabel SA..................... 80,965
-----------
Financial Investments - 0.3%
900 Groupe Bruxelles Lambert SA....... 82,288
-----------
Wholesale - 0.3%
2,000 Agfa Gevaert NV................... 70,155
-----------
306,037
-----------
DENMARK - 0.6%
Beer, Liquor & Tobacco - 0.2%
800 Carlsberg A/S, Class B............ 39,775
-----------
Drugs & Pharmaceuticals - 0.3%
1,299 H. Lundbeck A/S................... 31,613
729 Novo-Nordisk A/S, Class B......... 40,696
-----------
72,309
-----------
Instruments - 0.1%
396 William Demant Holding A/S *...... 19,827
-----------
131,911
-----------
FINLAND - 0.3%
Forest Products & Paper - 0.2%
2,100 UPM-Kymmene Oyj................... 46,670
-----------
Software - 0.1%
496 Tietoenator Oyj................... 16,999
-----------
63,669
-----------
FRANCE - 2.2%
Beer, Liquor & Tobacco - 0.2%
300 Pernod Ricard..................... 41,992
-----------
Chemicals & Rubber - 0.3%
300 L'Air Liquide SA.................. 55,326
-----------
Communications Utilities - 0.2%
1,500 Publicis Groupe................... 46,163
-----------
Construction & Homebuilding - 0.2%
1,021 Autoroutes du Sud de la France.... 51,923
-----------
Publishing, Broadcasting & Cinema - 0.2%
1,366 JC Decaux SA *.................... 37,387
1,152 Societe Television Francaise 1.... 36,532
-----------
73,919
-----------
Real Estate Development - 0.1%
100 Unibail........................... 11,885
-----------
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, FRANCE continued
Retail - 0.3%
600 Pinault-Printemps-Redoute SA...... $ 64,333
-----------
Soaps & Cosmetics - 0.2%
400 L'Oreal SA........................ 32,101
-----------
Software - 0.3%
1,200 Dassault Systemes SA.............. 56,769
-----------
Wholesale - 0.2%
575 Essilor International SA.......... 41,662
-----------
476,073
-----------
GERMANY - 1.8%
Autos - 0.7%
2,000 Bayerische Motoren Werke (BMW)
AG.............................. 90,948
1,200 Volkswagen AG..................... 57,268
-----------
148,216
-----------
Drugs & Pharmaceuticals - 0.4%
569 Altana AG......................... 36,161
600 Schering AG....................... 40,004
-----------
76,165
-----------
Insurance - 0.1%
2,000 MLP AG............................ 29,242
-----------
IT Hardware - 0.2%
4,000 Infineon Technologies AG *........ 38,366
-----------
Miscellaneous Finance - 0.2%
600 Deutsche Boerse AG................ 45,267
-----------
Wholesale - 0.2%
466 Celesio AG........................ 38,034
-----------
375,290
-----------
IRELAND - 0.6%
Airlines - 0.3%
8,000 Ryanair Holdings plc *............ 62,798
-----------
Banks & Credit Institutions - 0.3%
2,315 Anglo Irish Bank Corp., plc....... 58,068
-----------
120,866
-----------
ITALY - 1.8%
Autos - 0.2%
10,000 IFIL -- Finanziaria di
Partecipazioni S.p.A............ 44,383
-----------
Banks & Credit Institutions - 0.3%
3,808 Mediobanca S.p.A. ................ 66,268
-----------
Furniture & Household Items - 0.1%
1,824 Bulgari S.p.A. ................... 21,738
-----------
Insurance - 0.8%
3,128 Alleanza Assicurazioni S.p.A. .... 40,938
1,200 Assicurazioni Generali S.p.A. .... 38,833
3,997 Mediolanum S.p.A. ................ 27,350
2,700 Riunione Adriatica di Sicurta
S.p.A. ......................... 63,689
-----------
170,810
-----------
Publishing, Broadcasting & Cinema - 0.2%
6,000 Gruppo Editoriale L'Espresso
S.p.A. ......................... 37,722
-----------
</Table>
See the accompanying notes to the financial statements.
88 Laudus Funds Annual Report
Financial Statements--Statement of Securities Sold Short continued
Laudus Rosenberg Global Long/Short Equity Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, ITALY continued
Restaurants, Hotels & Theaters - 0.2%
3,000 Autogrill S.p.A. *................ $ 44,994
-----------
385,915
-----------
NETHERLANDS - 0.9%
Banks & Credit Institutions - 0.0%
81 ABN AMRO Holding NV............... 2,015
-----------
Cellular & Wireless - 0.3%
8,000 Koninklijke (Royal) KPN NV........ 71,741
-----------
Financial Investments - 0.2%
2,744 Reed Elsevier NV.................. 41,475
-----------
IT Hardware - 0.2%
2,028 ASML Holding NV *................. 34,343
-----------
Miscellaneous Finance - 0.2%
1,200 Euronext NV....................... 42,810
-----------
192,384
-----------
NORWAY - 1.1%
Banks & Credit Institutions - 0.3%
6,000 DNB NOR ASA....................... 61,526
-----------
Forest Products & Paper - 0.2%
2,000 Norske Skogindustrier ASA......... 40,067
-----------
Insurance - 0.0%
990 Storebrand ASA.................... 9,015
-----------
Real Estate Development - 0.3%
6,000 Telenor ASA....................... 54,162
-----------
Wholesale - 0.3%
1,800 Orkla ASA......................... 66,135
-----------
230,905
-----------
SPAIN - 1.2%
Banks & Credit Institutions - 0.8%
2,100 Abertis Infraestructuras SA....... 47,571
4,500 Banco Bilbao Vizcaya Argentaria
SA.............................. 73,456
900 Banco Popular Espanol SA.......... 58,367
-----------
179,394
-----------
Metal Products & Machinery - 0.2%
1,334 Zardoya Otis SA................... 35,784
-----------
Retail - 0.2%
1,533 Industria de Diseno Textil SA..... 45,964
-----------
261,142
-----------
SWEDEN - 0.4%
Autos - 0.3%
1,500 Volvo AB, Class B................. 66,554
-----------
Communications Utilities - 0.1%
1,127 Eniro AB.......................... 13,361
-----------
79,915
-----------
SWITZERLAND - 0.4%
Furniture & Household Items - 0.2%
1,400 Swatch Group AG................... 39,114
-----------
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, SWITZERLAND continued
Information & Services - 0.2%
52 SGS SA............................ $ 37,607
-----------
76,721
-----------
UNITED KINGDOM - 7.4%
Agriculture, Food & Beverage - 0.3%
3,000 Cadbury Schweppes plc............. 30,073
4,000 Tate & Lyle plc................... 40,173
-----------
70,246
-----------
Airlines - 0.2%
15,000 Hays plc.......................... 37,698
-----------
Autos - 0.2%
6,000 GKN plc........................... 28,770
4,845 Tomkins plc....................... 24,192
-----------
52,962
-----------
Banks & Credit Institutions - 1.2%
6,000 Bradford & Bingley plc............ 34,863
2,096 Cattles plc....................... 13,387
1,000 Intermediate Capital Group plc.... 20,200
9,000 Lloyds TSB Group plc.............. 81,290
2,700 Provident Financial plc........... 36,122
3,600 Standard Chartered plc............ 64,761
-----------
250,623
-----------
Basic Minerals & Metals - 0.3%
1,200 Antofagasta plc................... 28,934
1,800 Lonmin plc........................ 33,468
-----------
62,402
-----------
Beer, Liquor & Tobacco - 0.2%
1,797 Imperial Tobacco Group plc........ 47,165
-----------
Electric Utilities - 0.4%
7,363 National Grid Transco plc......... 68,210
1,600 Viridian Group plc................ 22,917
-----------
91,127
-----------
Financial Investments - 0.4%
2,863 Burberry Group plc................ 22,154
6,000 Reed Elsevier plc................. 62,187
-----------
84,341
-----------
Furniture & Household Items - 0.1%
2,000 Brambles Industries plc........... 11,451
-----------
Information & Services - 0.9%
4,116 Capita Group plc.................. 29,244
2,100 Intertek Group plc................ 30,694
6,000 Michael Page International plc.... 21,995
12,000 Rentokil Initial plc.............. 36,734
6,000 Taylor Nelson Sofres plc.......... 25,170
5,000 Yell Group plc.................... 44,688
-----------
188,525
-----------
Instruments - 0.2%
5,000 Smith & Nephew plc................ 47,004
-----------
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 89
Financial Statements--Statement of Securities Sold Short continued
Laudus Rosenberg Global Long/Short Equity Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, UNITED KINGDOM continued
Insurance - 0.6%
900 Investec plc...................... $ 26,445
2,000 Jardine Lloyd Thompson Group
plc............................. 14,474
7,000 Prudential plc.................... 66,931
4,000 St. James's Place Capital plc..... 18,518
-----------
126,368
-----------
IT Hardware - 0.1%
12,000 ARM Holdings plc.................. 23,866
-----------
Miscellaneous Finance - 0.3%
6,000 Amvescap plc...................... 37,840
611 ICAP plc.......................... 3,169
1,568 London Stock Exchange plc......... 13,444
-----------
54,453
-----------
Publishing, Broadcasting & Cinema - 0.6%
4,732 British Sky Broadcasting Group
plc............................. 51,906
2,665 Daily Mail & General Trust, Class
A............................... 36,258
1,579 Emap plc.......................... 24,765
1,746 Johnston Press plc................ 17,981
-----------
130,910
-----------
Restaurants, Hotels & Theaters - 0.1%
6,000 Rank Group plc.................... 31,037
-----------
Retail - 0.8%
421 Carpetright plc................... 7,892
15,000 Dixons Group plc.................. 43,296
3,000 GUS plc........................... 51,642
6,000 Kesa Electricals plc.............. 34,268
10,000 William Morrison Supermarkets
plc............................. 37,036
-----------
174,134
-----------
Software - 0.3%
6,000 Misys plc......................... 25,113
7,881 Sage Group plc.................... 29,970
-----------
55,083
-----------
Wholesale - 0.2%
4,000 Electrocomponents plc............. 18,707
6,000 Premier Farnell plc............... 19,246
-----------
37,953
-----------
1,577,348
-----------
UNITED STATES - 64.4%
Agriculture, Food & Beverage - 2.3%
200 Bridgford Foods Corp. *........... 1,798
200 Coca-Cola Bottling Co. ........... 10,462
7,600 Coca-Cola Co. .................... 316,692
900 Coca-Cola Enterprises, Inc. ...... 18,468
2,000 Kellogg Co. ...................... 86,540
600 Monterey Gourmet Foods, Inc. *.... 1,920
200 Penford Corp. .................... 3,250
1,639 Tootsie Roll Industries, Inc. .... 49,162
-----------
488,292
-----------
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, UNITED STATES continued
Airlines - 0.8%
2,500 Airtran Holdings, Inc. *.......... $ 22,625
600 America West Holdings Corp., Class
B *............................. 3,258
1,300 JetBlue Airways Corp. *........... 24,752
2,500 Northwest Airlines Corp. *........ 16,725
6,700 Southwest Airlines Co. ........... 95,408
-----------
162,768
-----------
Autos - 0.6%
200 American Axle & Manufacturing
Holdings, Inc................... 4,900
1,900 Dana Corp. ....................... 24,301
1,500 General Motors Corp. ............. 44,085
700 Gentex Corp. ..................... 22,330
600 Lear Corp. ....................... 26,616
300 Tenneco Automotive, Inc. *........ 3,738
-----------
125,970
-----------
Banks & Credit Institutions - 3.5%
1,400 American Express Co. ............. 71,918
1,350 Astoria Financial Corp. .......... 34,155
1,100 Capital One Financial Corp. ...... 82,247
400 Capitol Federal Financial......... 13,856
600 CharterMac........................ 12,900
500 Citizens Banking Corp. ........... 14,680
1,400 Commerce Bancorp, Inc. ........... 45,458
4,000 E*Trade Financial Corp. *......... 48,000
300 Encore Capital Group, Inc. *...... 4,365
100 F.N.B. Corp. ..................... 1,915
3,900 Fifth Third Bancorp............... 167,622
1,100 Hudson City Bancorp, Inc. ........ 40,205
200 Hudson United Bancorp............. 7,050
300 Midwest Banc Holding, Inc. ....... 5,973
3,800 New York Community Bancorp, Inc... 69,008
1,100 Northern Trust Corp. ............. 47,784
500 Ocwen Financial Corp. *........... 4,035
1,764 Old National Bancorp.............. 35,809
5 Park National Corp. .............. 563
1,785 Valley National Bancorp........... 46,017
-----------
753,560
-----------
Basic Minerals & Metals - 0.8%
600 Alcoa, Inc. ...................... 18,234
400 American Superconductor Corp. *... 3,992
800 Apex Silver Mines Ltd. *.......... 12,816
300 Encore Wire Corp. *............... 3,060
1,100 Freeport-McMoRan Copper & Gold,
Inc............................. 43,571
1,200 Hecla Mining Co. *................ 6,576
1,600 Newmont Mining Corp. ............. 67,600
1,200 Stillwater Mining Co. *........... 11,820
-----------
167,669
-----------
Beer, Liquor & Tobacco - 0.5%
2,300 Anheuser-Busch Cos., Inc. ........ 108,997
-----------
Biotechnology - 1.7%
800 Alexion Pharmaceuticals, Inc. *... 17,332
1,600 Amgen, Inc. *..................... 93,136
</Table>
See the accompanying notes to the financial statements.
90 Laudus Funds Annual Report
Financial Statements--Statement of Securities Sold Short continued
Laudus Rosenberg Global Long/Short Equity Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, UNITED STATES continued
Biotechnology continued
200 Anika Therapeutics, Inc. *........ $ 2,560
1,200 Applera Corp. -- Celera Genomics
Group *......................... 12,300
800 ARIAD Pharmaceuticals, Inc. *..... 4,480
900 Avigen, Inc. *.................... 2,511
200 BioCryst Pharmaceuticals, Inc.
*............................... 922
630 BioMarin Pharmaceuticals, Inc.
*............................... 3,245
400 Digene Corp. *.................... 8,300
500 Dyax Corp. *...................... 1,610
4,300 Human Genome Sciences, Inc. *..... 39,646
800 ICOS Corp. *...................... 17,968
800 ImClone Systems, Inc. *........... 27,600
500 InterMune, Inc. *................. 5,500
600 Kosan Biosciences, Inc. *......... 2,460
2,500 Millennium Pharmaceuticals, Inc.
*............................... 21,050
800 Myriad Genetics, Inc. *........... 14,712
700 Nabi Biopharmaceuticals *......... 8,736
400 Neopharm, Inc. *.................. 3,108
600 Neurocrine Biosciences, Inc. *.... 22,836
400 Noven Pharmaceuticals, Inc. *..... 6,784
600 Onyx Pharmaceuticals, Inc. *...... 18,810
500 Seattle Genetics, Inc. *.......... 2,570
1,500 Telik, Inc. *..................... 22,620
-----------
360,796
-----------
Cellular & Wireless - 0.0%
300 Boston Communications Group, Inc.
* .............................. 2,136
-----------
Chemicals & Rubber - 0.6%
600 BioSphere Medical, Inc. *......... 2,370
700 Cabot Microelectronics Corp. *.... 21,966
500 Goodyear Tire & Rubber Co. *...... 6,675
700 MacDermid, Inc. .................. 22,750
400 Scotts Miracle-Gro Co., Class A
*............................... 28,092
700 Valspar Corp. .................... 32,578
300 WD-40 Co. ........................ 9,747
-----------
124,178
-----------
Communications Utilities - 0.8%
2,100 Cablevision Systems New York
Group, Class A *................ 58,905
2,700 EchoStar Communications Corp.,
Class A......................... 78,975
3,400 Mediacom Communications Corp. *... 22,236
600 Net2Phone, Inc. *................. 966
-----------
161,082
-----------
Construction & Homebuilding - 0.2%
1,500 Champion Enterprises, Inc. *...... 14,100
900 Fleetwood Enterprises, Inc. *..... 7,830
400 MasTec, Inc. *.................... 3,284
300 Matrix Service Co. *.............. 1,305
300 Modtech Holdings, Inc. *.......... 2,550
200 Orleans Homebuilders, Inc. ....... 3,678
200 Palm Harbor Homes, Inc. *......... 3,252
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, UNITED STATES continued
Construction & Homebuilding continued
2,000 Quanta Services, Inc. *........... $ 15,260
-----------
51,259
-----------
Consumer Durables - 0.1%
1,200 Maytag Corp. ..................... 16,764
-----------
Drugs & Pharmaceuticals - 4.1%
300 Able Laboratories, Inc. *......... 7,038
1,800 Adolor Corp. *.................... 17,892
1,900 Alkermes, Inc. *.................. 19,722
900 Allergan, Inc. ................... 62,523
1,400 Amylin Pharmaceuticals, Inc. *.... 24,486
500 Chiron Corp. *.................... 17,530
100 Cubist Pharmaceuticals, Inc. *.... 1,062
1,700 CuraGen Corp. *................... 7,072
1,200 CV Therapeutics, Inc. *........... 24,432
700 Discovery Laboratories, Inc. *.... 3,941
300 Dov Pharmaceutical, Inc. *........ 4,104
2,200 Eli Lilly & Co. .................. 114,620
400 Emisphere Technologies, Inc. *.... 1,468
700 Enzo Biochem, Inc. *.............. 10,094
600 EPIX Pharmaceuticals, Inc. *...... 4,200
1,000 Guilford Pharmaceuticals, Inc.
*............................... 2,300
1,900 Hospira, Inc. *................... 61,313
700 ImmunoGen, Inc. *................. 3,661
1,300 Immunomedics, Inc. *.............. 3,159
1,500 Inspire Pharmaceuticals, Inc. *... 12,240
2,200 Isis Pharmaceuticals, Inc. *...... 8,514
500 Kos Pharmaceuticals, Inc. *....... 20,840
2,600 Merck & Co., Inc. ................ 84,162
901 Neose Technologies, Inc. *........ 2,325
406 Neurogen Corp. *.................. 2,874
2,000 NPS Pharmaceuticals, Inc. *....... 25,240
600 Pain Therapeutics, Inc. *......... 3,048
800 Penwest Pharmaceuticals Co. *..... 9,888
600 Pharmacyclics, Inc. *............. 4,818
500 POZEN, Inc. *..................... 2,605
2,700 Protein Design Labs, Inc. *....... 43,173
200 Santarus, Inc. *.................. 972
6,300 Schering-Plough Corp. ............ 114,345
800 Sciclone Pharmaceuticals, Inc.
*............................... 2,272
1,600 Tanox, Inc. *..................... 15,360
1,200 Transkaryotic Therapies, Inc. *... 29,958
2,400 Vertex Pharmaceuticals, Inc. *.... 22,464
1,700 Wyeth............................. 71,706
100 Zymogenetics, Inc. *.............. 1,526
-----------
868,947
-----------
Electric Utilities - 1.6%
5,600 AES Corp. *....................... 91,728
1,700 Allegheny Energy, Inc. *.......... 35,122
1,700 Centerpoint Energy, Inc. ......... 20,451
1,300 Dominion Resources, Inc. ......... 96,759
600 DPL, Inc. ........................ 15,000
400 DTE Energy Co. ................... 18,192
1,600 Sierra Pacific Resources *........ 17,200
600 Southern Co. ..................... 19,098
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 91
Financial Statements--Statement of Securities Sold Short continued
Laudus Rosenberg Global Long/Short Equity Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, UNITED STATES continued
Electric Utilities continued
2,100 TECO Energy, Inc. ................ $ 32,928
-----------
346,478
-----------
Financial Investments - 0.8%
300 Acacia Research -- Acacia
Technologies *.................. 1,698
1,400 CapitalSource, Inc. *............. 32,200
1,200 CIT Group, Inc. .................. 45,600
600 Digital Theater Systems, Inc. *... 10,866
1,700 InterDigital Communications Corp.
* .............................. 26,044
1,900 Marvel Enterprises, Inc. *........ 38,000
400 Rent-A-Center, Inc. *............. 10,924
-----------
165,332
-----------
Forest Products & Paper - 1.0%
300 Avery Dennison Corp. ............. 18,579
1,300 Bowater, Inc. .................... 48,971
4,900 Graphic Packaging Corp. *......... 21,609
1,700 Kimberly-Clark Corp. ............. 111,741
1,000 Playtex Products, Inc. *.......... 9,000
-----------
209,900
-----------
Furniture & Household Items - 0.8%
700 Alliance Gaming Corp. *........... 6,713
300 Constar International, Inc. *..... 1,698
900 Herman Miller, Inc. .............. 27,108
3,000 International Game Technology..... 79,980
600 Leapfrog Enterprises, Inc. *...... 6,810
600 Rogers Corp. *.................... 24,000
200 Russ Berrie & Co., Inc. .......... 3,830
500 Select Comfort Corp. *............ 10,220
300 Tempur-Pedic International, Inc.
*............................... 5,598
300 Virco Manufacturing Corp. *....... 2,304
-----------
168,261
-----------
Gas & Other Public Utilities - 1.3%
8,400 El Paso Corp. .................... 88,872
1,200 Kinder Morgan, Inc. .............. 90,840
400 SEMCO Energy, Inc. ............... 2,300
800 Stericycle, Inc. *................ 35,360
2,100 Waste Management, Inc. ........... 60,585
-----------
277,957
-----------
Government Aircraft & Defense - 0.1%
400 Kaman Corp., Class A.............. 4,980
400 Microvision, Inc. *............... 2,332
300 SiRF Technology Holdings, Inc.
*............................... 3,348
300 Sturm Ruger & Co., Inc. .......... 2,079
-----------
12,739
-----------
Health Care & Hospital - 1.8%
600 AMERIGROUP Corp. *................ 21,936
100 Apria Healthcare Group, Inc. *.... 3,210
1,100 Array Biopharma, Inc. *........... 7,711
400 Hanger Orthopedic Group, Inc. *... 2,380
2,400 HCA, Inc. ........................ 128,568
1,500 Health Management Associates,
Inc., Class A................... 39,270
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, UNITED STATES continued
Health Care & Hospital continued
500 Lincare Holdings, Inc. *.......... $ 22,115
1,000 OCA, Inc *........................ 4,250
500 Odyssey Healthcare, Inc. *........ 5,880
300 Quest Diagnostics, Inc. .......... 31,539
400 Specialty Laboratories, Inc. *.... 3,820
6,000 Tenet Healthcare Corp. *.......... 69,180
900 VCA Antech, Inc. *................ 18,207
700 VistaCare, Inc., Class A *........ 14,329
-----------
372,395
-----------
Information & Services - 3.2%
700 Administaff, Inc. ................ 10,220
300 Advisory Board Co. *.............. 13,110
900 Apollo Group, Inc., Class A *..... 66,654
300 Arena Pharmaceuticals, Inc. *..... 1,515
500 Career Education Corp. *.......... 17,130
1,400 Ceridian Corp. *.................. 23,870
600 Certegy, Inc. .................... 20,772
500 Charles River Laboratories
International, Inc. *........... 23,520
300 Clark, Inc. ...................... 4,644
600 Deluxe Corp. ..................... 23,916
2,000 DeVry, Inc. *..................... 37,840
1,700 Education Management Corp. *...... 47,515
1,200 Exact Sciences Corp. *............ 4,284
3,200 Exelixis, Inc. *.................. 21,696
600 Gene Logic, Inc. *................ 1,884
900 IMS Health, Inc. ................. 21,951
200 Intersections, Inc. *............. 2,910
200 iPayment Holdings, Inc. *......... 8,440
1,300 Iron Mountain, Inc. *............. 37,492
400 LCC International, Inc., Class A
*............................... 1,684
900 Maxygen, Inc. *................... 7,722
300 Medical Staffing Network Holdings,
Inc. *.......................... 1,983
300 Netratings, Inc. *................ 4,575
4,400 Paychex, Inc. .................... 144,408
800 Princeton Review, Inc. *.......... 4,408
2,200 Regeneron Pharmaceuticals, Inc.
*............................... 11,242
600 Syntroleum Corp. *................ 7,344
1,200 Total System Services, Inc. ...... 29,988
1,300 Viad Corp. ....................... 34,970
1,100 Weight Watchers International,
Inc. * ......................... 47,278
-----------
684,965
-----------
Instruments - 3.3%
300 Abaxis, Inc. *.................... 2,655
100 Aksys Ltd. *...................... 317
4,400 Applera Corp. -- Applied
Biosystems Group................ 86,856
65 Aspect Medical Systems, Inc. *.... 1,403
700 Cepheid, Inc. *................... 6,769
500 Cholestech Corp. *................ 5,040
1,300 Ciphergen Biosystems, Inc. *...... 3,601
500 Closure Medical Corp. *........... 13,350
1,300 Conceptus, Inc. *................. 10,140
</Table>
See the accompanying notes to the financial statements.
92 Laudus Funds Annual Report
Financial Statements--Statement of Securities Sold Short continued
Laudus Rosenberg Global Long/Short Equity Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, UNITED STATES continued
Instruments continued
300 Daxor Corp. *..................... $ 6,630
700 Encore Medical Corp. *............ 3,766
700 Formfactor, Inc. *................ 15,848
400 I-Flow Corp. *.................... 6,332
500 ICU Medical, Inc. *............... 17,750
1,000 IDEXX Laboratories, Inc. *........ 54,160
500 Illumina, Inc. *.................. 4,040
900 Ixia *............................ 16,011
500 Kyphon, Inc. *.................... 12,585
400 LifeCell Corp. *.................. 3,560
700 Luminex Corp *.................... 5,271
200 Measurement Specialties, Inc. *... 4,600
300 Merit Medical Systems, Inc. *..... 3,597
600 Micro Therapeutics, Inc. *........ 2,316
1,200 Millipore Corp. *................. 52,080
700 North American Scientific, Inc.
*............................... 2,562
1,000 OraSure Technologies, Inc. *...... 7,360
204 Possis Medical, Inc. *............ 1,707
400 Spectranetics Corp. *............. 2,080
3,600 St. Jude Medical, Inc. *.......... 129,601
700 Staar Surgical Co. *.............. 2,737
900 Tektronix, Inc. .................. 22,077
600 ThermoGenesis Corp. *............. 3,000
400 Utah Medical Products, Inc. ...... 8,800
1,800 Varian Medical Systems, Inc. *.... 61,704
500 Varian, Inc. *.................... 18,945
300 Wright Medical Group, Inc. *...... 7,200
1,200 Zimmer Holdings, Inc. *........... 93,372
-----------
699,822
-----------
Insurance - 1.8%
600 American International Group,
Inc. ........................... 33,246
1,000 ChoicePoint, Inc. *............... 40,110
114 Citizens, Inc. *.................. 656
600 Danielson Holding Corp. *......... 10,350
200 Hilb Rogal & Hobbs Co. (HRH)...... 7,160
2,600 Marsh & McLennan Cos., Inc. ...... 79,092
700 NDCHealth Corp. .................. 11,186
1,500 Progressive Corp. ................ 137,640
600 RenaissanceRe Holdings Ltd. ...... 28,020
100 St. Paul Travelers Cos., Inc. .... 3,673
900 Willis Group Holdings Ltd. ....... 33,183
-----------
384,316
-----------
IT Hardware - 4.8%
300 Advanced Energy Industries, Inc.
*............................... 2,901
4,300 Altera Corp. *.................... 85,054
300 Brooktrout, Inc. *................ 3,375
1,100 Centillium Communications, Inc.
*............................... 2,816
2,700 Cirrus Logic, Inc. *.............. 12,204
300 COMARCO, Inc. *................... 2,595
700 CommScope, Inc. *................. 10,472
1,600 Cypress Semiconductor Corp. *..... 20,160
400 Ditech Communications Corp. *..... 4,988
500 DSP Group, Inc. *................. 12,880
1,100 Emulex Corp. *.................... 20,724
1,800 Foundry Networks, Inc. *.......... 17,820
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, UNITED STATES continued
IT Hardware continued
400 Helix Technology Corp. ........... $ 6,188
400 Hutchinson Technology, Inc. *..... 13,912
300 Ibis Technology Corp. *........... 660
400 Integrated Circuit Systems, Inc.
*............................... 7,648
600 Intergrated Silicon Solution, Inc.
*............................... 4,020
900 Jabil Circuit, Inc. *............. 25,668
400 KEMET Corp. *..................... 3,100
2,200 Kla-Tencor Corp. *................ 101,222
500 Kopin Corp. *..................... 1,535
1,800 Lattice Semiconductor Corp. *..... 9,666
3,500 Linear Technology Corp. .......... 134,086
3,800 LSI Logic Corp. *................. 21,242
1,800 Maxim Integrated Products,
Inc. ........................... 73,566
500 Micrel, Inc. *.................... 4,610
2,824 Microchip Technology, Inc. ....... 73,452
6,000 National Semiconductor Corp. ..... 123,660
300 Parlex Corp. *.................... 1,905
1,100 Pericom Semiconductor Corp. *..... 9,427
2,200 PMC -- Sierra, Inc. *............. 19,360
1,100 Rambus, Inc. *.................... 16,577
2,500 Semtech Corp. *................... 44,675
3,700 Teradyne, Inc. *.................. 54,020
300 Universal Display Corp. *......... 2,097
1,700 Visteon Corp. .................... 9,707
300 Vyyo, Inc. *...................... 2,229
2,000 Xilinx, Inc. ..................... 58,460
-----------
1,018,681
-----------
Land & Water Transportation - 0.4%
1,300 United Parcel Service, Inc., Class
B............................... 94,562
-----------
Mainframe & Minicomputers - 0.0%
1,000 Cray, Inc. *...................... 2,550
800 Omnicell, Inc. *.................. 5,768
-----------
8,318
-----------
Metal Products & Machinery - 0.8%
500 Aaon, Inc. *...................... 8,230
600 Briggs & Stratton Corp. .......... 21,846
300 Bucyrus International, Inc., Class
A............................... 11,718
300 CUNO, Inc. *...................... 15,417
300 Environmental Tectonics Corp. *... 1,557
600 Fedders Corp. .................... 1,668
700 Federal Signal Corp. ............. 10,619
1,700 FuelCell Energy, Inc. *........... 16,966
600 Global Power Equipment Group, Inc.
* .............................. 5,748
300 Lindsay Manufacturing Co. ........ 5,724
400 Littelfuse, Inc. *................ 11,460
500 Maxwell Technologies, Inc. *...... 4,585
1,100 Plug Power, Inc. *................ 7,260
700 SPX Corp. ........................ 30,296
200 Transtechnology Corp. *........... 1,550
500 Varian Semiconductor Equipment
Associates, Inc. *.............. 19,005
-----------
173,649
-----------
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 93
Financial Statements--Statement of Securities Sold Short continued
Laudus Rosenberg Global Long/Short Equity Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, UNITED STATES continued
Miscellaneous Finance - 1.6%
2,700 Ameritrade Holding Corp. *........ $ 27,567
900 Federated Investors, Inc., Class
B............................... 25,479
700 IndyMac Bancorp, Inc. ............ 23,800
4,200 Instinet Group, Inc. *............ 24,696
2,200 Investment Technology Group, Inc.
* .............................. 38,500
2,300 Janus Capital Group, Inc. ........ 32,085
700 Jefferies Group, Inc. ............ 26,376
1,200 Morgan Stanley.................... 68,700
1,400 Waddell & Reed Financial, Inc.,
Class A......................... 27,636
1,600 WP Stewart & Co., Ltd. ........... 36,256
-----------
331,095
-----------
Oil & Coal Resources - 0.2%
200 Clayton Williams Energy, Inc. *... 5,180
500 Energen Corp. .................... 33,300
-----------
38,480
-----------
Oil Drilling & Services - 1.4%
900 BJ Services Co. .................. 46,692
600 Cooper Cameron Corp. *............ 34,326
3,100 Schlumberger Ltd. ................ 218,488
-----------
299,506
-----------
Photooptical, Micros & Office Machinery - 0.9%
600 Echelon Corp. *................... 4,104
700 Fargo Electronics, Inc. *......... 10,269
2,600 Immersion Corp. *................. 15,600
300 Interlink Electronics, Inc. *..... 1,944
1,000 Lexmark International, Inc. *..... 79,970
2,300 Maxtor Corp. *.................... 12,236
1,900 McData Corp., Class B *........... 6,631
600 Nam Tai Electronics, Inc. ........ 15,960
4,300 Western Digital Corp. *........... 54,825
-----------
201,539
-----------
Publishing, Broadcasting & Cinema - 2.9%
100 aQuantive, Inc. *................. 1,107
1,700 Crown Media Holdings, Inc., Class
A *............................. 15,317
900 Dow Jones & Co., Inc. ............ 33,633
2,000 EW Scripps Co., Class A........... 97,500
200 Fisher Communications, Inc. *..... 10,342
2,400 Interpublic Group of Cos., Inc.
*............................... 29,472
1,100 Journal Register Co. *............ 18,370
700 Knight-Ridder, Inc. .............. 47,075
100 McClatchy Co., Class A............ 7,416
1,700 New York Times Co., Class A....... 62,186
900 Omnicom Group, Inc. .............. 79,668
300 Pixar *........................... 29,265
91 Salem Communications Corp., Class
A *............................. 1,875
1,300 Sinclair Broadcast Group, Inc.,
Class A......................... 10,439
1,600 Univision Communications, Inc.,
Class A *....................... 44,304
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, UNITED STATES continued
Publishing, Broadcasting & Cinema continued
700 Valassis Communications, Inc.,
Class A *....................... $ 24,472
120 Washington Post Co., Class B...... 107,280
700 Young Broadcasting, Inc., Class A
*............................... 6,048
-----------
625,769
-----------
Real Estate Development - 0.3%
800 Forest City Enterprises, Inc.,
Class A......................... 51,040
500 Tejon Ranch Co. *................. 22,300
-----------
73,340
-----------
Real Estate Investment Trusts - 3.5%
200 Alexander's, Inc. *............... 48,300
800 Arden Realty, Inc. ............... 27,080
500 Avalonbay Communities, Inc. ...... 33,445
700 BRE Properties, Inc., Class A..... 24,710
200 Camden Property Trust............. 9,406
700 CarrAmerica Realty Corp. ......... 22,085
1,000 Catellus Development Corp. ....... 26,650
800 CenterPoint Properties Trust...... 32,800
900 Duke Realty Corp. ................ 26,865
1,600 Equity Residential................ 51,536
300 Essex Property Trust, Inc. ....... 20,682
2,700 General Growth Properties,
Inc. ........................... 92,070
2,900 Host Marriott Corp. .............. 48,024
600 Mills Corp. ...................... 31,740
2,400 Plum Creek Timber Co., Inc. ...... 85,680
600 Post Properties, Inc. ............ 18,624
1,400 ProLogis.......................... 51,940
300 Saul Centers, Inc. ............... 9,600
600 Shurgard Storage Centers, Inc.,
Class A......................... 24,588
2,400 United Dominion Realty Trust,
Inc. ........................... 50,088
200 Weingarten Realty Investors....... 6,902
-----------
742,815
-----------
Restaurants, Hotels & Theaters - 0.9%
900 Applebee's International, Inc. ... 24,804
1,200 ARAMARK Corp., Class B............ 31,536
100 Brinker International, Inc. *..... 3,622
900 Cheesecake Factory, Inc. *........ 31,905
300 Cosi, Inc. *...................... 2,040
2,200 Magna Entertainment Corp. *....... 13,508
400 Multimedia Games, Inc. *.......... 3,104
200 Nevada Gold & Casinos, Inc. *..... 2,560
600 Pinnacle Entertainment, Inc. *.... 10,020
1,100 Ruby Tuesday, Inc. ............... 26,719
2,000 Westwood One, Inc. *.............. 40,700
-----------
190,518
-----------
Retail - 6.7%
1,400 1-800-FLOWERS.COM, Inc., Class A
*............................... 10,598
900 99 Cents Only Stores *............ 11,853
2,800 Amazon.Com, Inc. *................ 95,956
600 AnnTaylor Stores Corp. *.......... 15,354
3,400 Bed Bath & Beyond, Inc. *......... 124,236
1,500 Best Buy Co., Inc. ............... 81,015
</Table>
See the accompanying notes to the financial statements.
94 Laudus Funds Annual Report
Financial Statements--Statement of Securities Sold Short continued
Laudus Rosenberg Global Long/Short Equity Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, UNITED STATES continued
Retail continued
2,200 Carmax, Inc. *.................... $ 69,300
300 Christopher & Banks Corp. ........ 5,280
300 Cost Plus, Inc. *................. 8,064
200 Design Within Reach, Inc. *....... 3,147
1,100 Dollar Tree Stores, Inc. *........ 31,603
1,800 Family Dollar Stores, Inc. ....... 54,648
100 Gaiam, Inc. *..................... 554
300 Great Atlantic & Pacific Tea Co.
*............................... 4,470
400 Group 1 Automotive, Inc. *........ 10,520
600 Kirkland's, Inc. *................ 6,636
2,700 Kohl's Corp. *.................... 139,401
200 Kroger Co. *...................... 3,206
1,900 Lowe's Cos., Inc. ................ 108,471
416 May Department Stores Co. ........ 15,400
300 Pier 1 Imports, Inc. ............. 5,469
300 Price Smart, Inc. *............... 2,202
900 Ross Stores, Inc. ................ 26,226
1,800 Saks, Inc. ....................... 32,490
1,100 Sharper Image Corp. *............. 18,271
2,100 Target Corp. ..................... 105,042
3,000 Tiffany & Co. .................... 103,560
500 Tweeter Home Entertainment Group,
Inc. *.......................... 2,785
800 ValueVision Media, Inc., Class A
*............................... 9,896
5,200 Wal-Mart Stores, Inc. ............ 260,571
300 Whitehall Jewellers, Inc. *....... 2,130
400 Whole Foods Market, Inc. ......... 40,852
500 Wilsons the Leather Experts, Inc.
*............................... 2,385
-----------
1,411,591
-----------
Soaps & Cosmetics - 0.5%
2,200 Colgate-Palmolive Co. ............ 114,774
-----------
Software - 5.1%
600 Affiliated Computer Services,
Inc., Class A *................. 31,944
1,100 AMICAS, Inc. *.................... 4,048
4,300 Automatic Data Processing,
Inc. ........................... 193,284
2,900 BEA Systems, Inc. *............... 23,113
200 Blackboard, Inc. *................ 3,488
80 Citrix Systems, Inc. *............ 1,906
300 CoStar Group, Inc. *.............. 11,055
1,400 Electronic Arts, Inc. *........... 72,492
200 Fair Isaac Corp. ................. 6,888
2,300 First Data Corp. ................. 90,413
1,000 Fiserv, Inc. *.................... 39,800
1,100 GTECH Holdings Corp. ............. 25,883
800 Harris Interactive, Inc. *........ 3,688
4,300 Identix, Inc. *................... 21,715
300 Imergent, Inc. *.................. 2,943
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, UNITED STATES continued
Software continued
3,100 Intuit, Inc. *.................... $ 135,686
300 Jupitermedia Corp. *.............. 4,653
200 Kanbay International, Inc. *...... 4,092
500 Manhattan Associates, Inc. *...... 10,185
700 Mercury Interactive Corp. *....... 33,166
300 MicroStrategy, Inc., Class A *.... 16,281
400 Mobius Management Systems, Inc.
* .............................. 2,620
1,100 National Instruments Corp. ....... 29,755
500 NAVTEQ *.......................... 21,675
9,000 Oracle Corp. *.................... 112,320
300 PC-Tel, Inc. *.................... 2,208
1,100 Reynolds & Reynolds Co., Class
A............................... 29,766
200 SS&C Technologies, Inc. .......... 4,560
1,600 Sungard Data Systems, Inc. *...... 55,200
1,700 SupportSoft, Inc. *............... 8,976
300 Tripos, Inc. *.................... 1,245
6,500 Unisys Corp. *.................... 45,890
50 WebEx Communications, Inc. *...... 1,080
-----------
1,052,018
-----------
Textiles & Apparel - 1.0%
3,200 Cintas Corp. ..................... 132,192
800 Columbia Sportswear Co. *......... 42,584
400 Gymboree Corp. *.................. 5,016
200 Kellwood Co. ..................... 5,758
400 Mohawk Industries, Inc. *......... 33,720
-----------
219,270
-----------
Wholesale - 1.7%
300 Action Performance Cos., Inc. .... 3,969
1,200 AmerisourceBergen Corp. .......... 68,748
2,000 Cardinal Health, Inc. ............ 111,600
500 D&K Healthcare Resources, Inc. ... 4,185
200 Express Scripts, Inc. *........... 17,438
400 IMPCO Technologies, Inc. *........ 2,150
1,600 Ingram Micro, Inc. *.............. 26,672
1,000 McKesson Corp. ................... 37,750
900 OfficeMax, Inc. .................. 30,150
700 Priority Healthcare Corp., Class B
*............................... 15,141
200 Sysco Corp. ...................... 7,160
700 Tech Data Corp. *................. 25,942
-----------
350,905
-----------
13,661,413
-----------
TOTAL SECURITIES SOLD SHORT
(PROCEEDS
$17,928,626) -- 84.7%........... $17,985,077
===========
</Table>
- ---------------
* Non-income producing security.
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 95
Financial Statements
Statement of Portfolio Investments
LAUDUS ROSENBERG VALUE LONG/SHORT EQUITY FUND (a) as of 3/31/05
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------
COMMON STOCK - 89.9%
AGRICULTURE, FOOD & BEVERAGE - 2.3%
300 Cagle's, Inc., Class A *...... $ 2,760
14,200 Chiquita Brands International,
Inc. ....................... 380,276
700 Diedrich Coffee, Inc. *....... 3,476
17,850 Flowers Foods, Inc. .......... 503,549
1,800 J & J Snack Foods Corp. ...... 84,294
2,891 Lance, Inc. .................. 46,458
6,800 National Beverage Corp. ...... 55,420
2,400 Omega Protein Corp. *......... 16,368
10,000 Pepsi Bottling Group, Inc. ... 278,500
21,900 PepsiAmericas, Inc. .......... 496,254
5,700 Ralcorp Holdings, Inc. ....... 269,895
800 Seaboard Corp. ............... 858,399
3,200 Seneca Foods Corp., Class B
*........................... 55,680
3,200 Tasty Baking Co. ............. 26,848
900 Zapata Corp. *................ 65,655
------------
3,143,832
------------
AIRLINES - 0.6%
400 Air Methods Corp. *........... 3,188
3,900 AirNet Systems, Inc. *........ 18,447
10,300 Alaska Air Group, Inc. *...... 303,232
4,700 MAIR Holdings, Inc. *......... 41,924
11,300 Mesa Air Group, Inc. *........ 79,100
20,800 SkyWest, Inc. ................ 386,672
------------
832,563
------------
AUTOS - 1.2%
2,100 Aftermarket Technology Corp.
*........................... 34,650
15,300 Autoliv, Inc. ................ 729,045
10,800 BorgWarner, Inc. ............. 525,744
8,700 Modine Manufacturing Co. ..... 255,171
2,300 R&B, Inc. *................... 30,498
2,221 Sypris Solutions, Inc. ....... 23,809
5,900 TRW Automotive Holdings Corp.
*........................... 114,637
------------
1,713,554
------------
BANKS & CREDIT INSTITUTIONS - 5.0%
18,352 Advanta Corp., Class A........ 381,722
100 Ameriana Bancorp.............. 1,330
16,700 Bank of Hawaii Corp. ......... 755,841
300 BankUnited Financial Corp.,
Class A *................... 8,058
5,700 Berkshire Bancorp, Inc. ...... 114,308
1,000 Berkshire Hills Bancorp,
Inc. ....................... 33,750
200 Britton & Koontz Capital
Corp. ...................... 3,670
200 Carver Bancorp, Inc. ......... 3,740
200 Central Bancorp, Inc. ........ 5,410
200 Centrue Financial Corp. *..... 5,500
500 CFS Bancorp, Inc. ............ 6,845
7,600 Commercial Federal Corp. ..... 210,140
200 Consumer Portfolio Services,
Inc. *...................... 986
100 Cowlitz Bancorp *............. 1,150
22,700 Doral Financial Corp. ........ 496,903
</Table>
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------
COMMON STOCK, BANKS & CREDIT
INSTITUTIONS continued
2,800 Federal Agricultural Mortgage
Corp., Class C.............. $ 48,972
500 Fidelity Southern Corp. ...... 8,400
200 First Bancshares, Inc. ....... 4,150
5,500 First Charter Corp. .......... 124,245
500 First Citizens BancShares,
Inc., Class A............... 73,190
100 First Federal Bankshares,
Inc. ....................... 2,183
21 First M&F Corp. .............. 717
99 First Niles Financial,
Inc. ....................... 1,509
1,845 First Place Financial
Corp. ...................... 33,764
3,600 FirstFed Financial Corp. *.... 183,636
100 Flagstar Bancorp, Inc. ....... 1,955
750 Horizon Bancorp............... 21,750
19,849 Independence Community Bank
Corp. ...................... 774,110
2,300 Intervest Bancshares Corp.
*........................... 41,400
2,187 ITLA Capital Corp. *.......... 109,263
100 Lincoln Bancorp............... 1,850
1,365 LSB Financial Corp. .......... 35,156
600 NBC Capital Corp. ............ 14,508
3,000 North Central Bancshares,
Inc. ....................... 121,500
1,000 Northrim BanCorp, Inc. ....... 25,000
400 Northway Financial, Inc. ..... 13,800
1,200 PennFed Financial Services,
Inc. ....................... 17,808
100 Pinnacle Bancshares, Inc. .... 1,465
11,000 Provident Bankshares Corp. ... 362,560
900 Provident Financial Holdings,
Inc. ....................... 26,766
3,800 PSB Bancorp, Inc. ............ 60,078
12,600 R & G Financial Corp., Class
B........................... 392,742
393 River Valley Bancorp.......... 8,400
12,300 Silicon Valley Bancshares *... 541,937
1,824 Simmons First National Corp.,
Class A..................... 45,272
1,000 Sovereign Bancorp, Inc. ...... 22,160
400 Sterling Bancshares, Inc. .... 5,680
26,900 TCF Financial Corp. .......... 730,334
300 Tower Financial Corp. *....... 4,313
3,400 Union Bankshares Corp. ....... 108,868
2,500 United Community Financial
Corp. ...................... 27,725
1,559 Unity Bancorp, Inc. .......... 18,708
12,599 W Holding Co., Inc. .......... 126,872
4,392 Wainwright Bank & Trust
Co. ........................ 52,924
1,350 Washington Savings Bank,
F.S.B....................... 15,755
8,900 Westcorp...................... 376,025
5,000 WFS Financial, Inc. *......... 215,750
------------
6,832,553
------------
BASIC MINERALS & METALS - 1.2%
3,500 Brush Engineered Materials,
Inc. *...................... 66,605
600 Cleveland-Cliffs, Inc. ....... 43,722
100 L.B. Foster Co., Class A *.... 904
11,800 Maverick Tube Corp. *......... 383,618
</Table>
See the accompanying notes to the financial statements.
96 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg Value Long/Short Equity Fund (a)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------
COMMON STOCK, BASIC MINERALS &
METALS continued
6,200 NS Group, Inc. *.............. $ 194,742
4,300 Olympic Steel, Inc. *......... 76,884
12,200 Oregon Steel Mills, Inc. *.... 280,600
400 Reliance Steel & Aluminum
Co. ........................ 16,004
400 Roanoke Electric Steel
Corp. ...................... 8,272
13,000 Ryerson Tull, Inc. ........... 164,710
100 Southern Peru Copper Corp. ... 5,546
10,800 Steel Dynamics, Inc. ......... 372,060
600 Steel Technologies, Inc. ..... 14,394
------------
1,628,061
------------
BEER, LIQUOR & TOBACCO - 0.0%
900 Brown-Forman Corp., Class B... 49,275
------------
BIOTECHNOLOGY - 0.6%
10,900 Harvard Bioscience, Inc. *.... 42,401
10,401 Invitrogen Corp. *............ 719,749
------------
762,150
------------
CELLULAR & WIRELESS - 0.9%
12,800 Telephone & Data Systems,
Inc. ....................... 1,044,480
7,030 USA Mobility, Inc. *.......... 227,772
------------
1,272,252
------------
CHEMICALS & RUBBER - 2.0%
6,000 A. Schulman, Inc. ............ 104,520
500 American Pacific Corp. *...... 3,625
5,400 Arch Chemicals, Inc. ......... 153,738
2,900 Bairnco Corp. ................ 33,408
19,200 Cabot Corp. .................. 641,856
1,100 Cytec Industries, Inc. ....... 59,675
4,400 Great Lakes Chemical Corp. ... 141,328
18,500 Hercules, Inc. *.............. 267,880
10,400 Hexcel Corp. *................ 161,304
100 LESCO, Inc. *................. 1,450
21,300 Sherwin-Williams Co. ......... 936,987
900 Stepan Co. ................... 21,159
29,500 Terra Industries, Inc. *...... 228,920
------------
2,755,850
------------
COMMERCIAL AIRCRAFT & COMPONENTS - 0.0%
600 Sequa Corp., Class A *........ 31,110
------------
COMMUNICATIONS UTILITIES - 0.8%
10,200 AsiaInfo Holdings, Inc. *..... 51,204
2,900 Atlantic Tele-Network,
Inc. ....................... 92,858
5,550 Audible, Inc. *............... 75,036
3,200 CT Communications, Inc. ...... 33,696
659 D&E Communications, Inc. ..... 6,017
48,600 EarthLink, Inc. *............. 437,400
2,300 Golden Telecom, Inc. ......... 58,880
2,100 Hector Communications
Corp. ...................... 45,150
400 Lynch Interactive Corp. *..... 9,600
200 Playboy Enterprises, Inc.,
Class A *................... 2,396
</Table>
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------
COMMON STOCK, COMMUNICATIONS
UTILITIES continued
22,500 Premiere Global Services, Inc.
*........................... $ 254,700
------------
1,066,937
------------
CONSTRUCTION & HOMEBUILDING - 3.2%
400 Brookfield Homes Corp. ....... 16,884
1,200 D.R. Horton, Inc. ............ 35,088
1,300 Granite Construction, Inc. ... 34,151
11,800 Hovnanian Enterprises, Inc.,
Class A *................... 601,800
1,200 Insituform Technologies, Inc.,
Class A *................... 17,412
11,000 Lennar Corp., Class A......... 623,480
7,376 M.D.C. Holdings, Inc. ........ 513,738
16,300 Pulte Homes, Inc. ............ 1,200,169
15,400 Ryland Group, Inc. ........... 955,108
100 Sterling Construction Co.,
Inc. *...................... 700
3,500 Technical Olympic USA,
Inc. ....................... 105,700
6,300 Willbros Group, Inc. *........ 127,260
1,600 William Lyon Homes, Inc. *.... 122,720
------------
4,354,210
------------
CONSTRUCTION MATERIALS - 0.2%
1,400 Ameron International Corp. ... 50,400
100 Compass Minerals
International, Inc. ........ 2,545
800 Continental Materials Corp.
*........................... 24,000
800 Eagle Materials, Inc. ........ 64,752
2,300 ElkCorp....................... 88,458
8,000 U.S. Concrete, Inc. *......... 50,160
------------
280,315
------------
CONSUMER DURABLES - 1.2%
17,000 Brunswick Corp. .............. 796,450
2,500 Coachmen Industries, Inc. .... 34,000
5,400 Harman International
Industries, Inc. ........... 477,684
4,000 Polaris Industries, Inc. ..... 280,920
1,300 Spartan Motors, Inc. ......... 13,065
900 Thor Industries, Inc. ........ 26,919
1,300 Universal Electronics, Inc.
*........................... 21,944
1,500 Winnebago Industries, Inc. ... 47,400
------------
1,698,382
------------
DRUGS & PHARMACEUTICALS - 1.6%
18,900 Alpharma, Inc., Class A....... 232,848
2,800 BioSource International, Inc.
*........................... 20,384
5,300 Bone Care International, Inc.
*........................... 137,482
12,167 Dade Behring Holdings, Inc.
*........................... 717,001
3,300 E-Z-EM, Inc. ................. 39,336
9,900 First Horizon Pharmaceutical
Corp. *..................... 167,112
15,062 Immucor, Inc. *............... 454,722
1,327 Lifecore Biomedical, Inc. *... 23,581
1,300 Matrixx Initiatives, Inc. *... 14,677
13,500 Nature's Sunshine Products,
Inc. ....................... 231,795
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 97
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg Value Long/Short Equity Fund (a)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------
COMMON STOCK, DRUGS &
PHARMACEUTICALS continued
11,400 Theragenics Corp. *........... $ 39,216
2,917 United Therapeutics Corp. *... 133,292
100 United-Guardian, Inc. ........ 749
7,300 Weider Nutrition
International, Inc. *....... 44,457
------------
2,256,652
------------
ELECTRIC UTILITIES - 1.7%
10,900 Alliant Energy Corp. ......... 291,902
19,800 Central Vermont Public Service
Corp. ...................... 445,104
9,600 CMS Energy Corp. *............ 125,184
1,200 Florida Public Utilities
Co. ........................ 22,560
1,600 Green Mountain Power Corp. ... 46,880
1,600 Maine & Maritimes Corp. ...... 40,400
1,000 Unitil Corp. ................. 25,550
21,300 Westar Energy, Inc. .......... 460,932
54,400 Xcel Energy, Inc. ............ 934,592
------------
2,393,104
------------
FINANCIAL INVESTMENTS - 1.3%
34,675 Aaron Rents, Inc. ............ 693,499
2,500 American Capital Strategies
Ltd. ....................... 78,525
3,197 California First National
Bancorp..................... 39,963
7,400 Choice Hotels International,
Inc. ....................... 458,430
1,500 Electro Rent Corp. *.......... 20,130
3,569 ePlus, Inc. *................. 41,650
14,700 MCG Capital Corp. ............ 226,160
300 ShoLodge, Inc. *.............. 1,163
700 TC Pipelines LP............... 25,095
4,800 Universal Compression
Holdings, Inc. *............ 181,776
3,400 Willis Lease Finance Corp.
*........................... 28,050
------------
1,794,441
------------
FOREST PRODUCTS & PAPER - 1.1%
5,600 Bemis Co., Inc. .............. 174,272
600 Chesapeake Corp. ............. 12,612
1,800 CSS Industries, Inc. ......... 65,790
2,900 DSG International Ltd. *...... 13,239
3,600 Glatfelter.................... 53,100
33,800 Louisiana-Pacific Corp. ...... 849,731
4,100 Schweitzer-Mauduit
International, Inc. ........ 137,555
6,588 Universal Forest Products,
Inc. ....................... 255,944
------------
1,562,243
------------
FURNITURE & HOUSEHOLD ITEMS - 2.6%
100 A.T. Cross Co., Class A *..... 590
24,700 Acuity Brands, Inc. .......... 666,899
1,000 American Biltrite, Inc. *..... 11,250
1,800 American Locker Group, Inc.
*........................... 9,720
2,000 AZZ, Inc. *................... 36,300
4,000 Bassett Furniture Industries,
Inc. ....................... 78,800
7,000 Central Garden & Pet Co. *.... 307,020
</Table>
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------
COMMON STOCK, FURNITURE & HOUSEHOLD
ITEMS continued
3,500 Channell Commercial Corp. *... $ 26,355
1,600 Chase Corp. .................. 25,152
100 Chromcraft Revington, Inc.
*........................... 1,372
4,100 Communications Systems,
Inc. ....................... 46,740
2,600 Congoleum Corp., Class A *.... 13,780
16,280 Griffon Corp. *............... 348,555
300 Hasbro, Inc. ................. 6,135
2,400 Hooker Furniture Corp. ....... 45,336
9,000 JAKKS Pacific, Inc. *......... 193,230
14,600 K2, Inc. *.................... 200,750
19,397 Kimball International, Inc.,
Class B..................... 281,257
20,600 Movado Group, Inc. ........... 381,100
700 RC2 Corp. *................... 23,800
500 Stanley Furniture Company,
Inc. ....................... 23,640
17,500 Steelcase, Inc., Class A...... 241,500
3,300 Tredegar Corp. ............... 55,638
18,200 Yankee Candle Co., Inc. *..... 576,940
------------
3,601,859
------------
GAS & OTHER PUBLIC UTILITIES - 0.9%
3,000 California Water Service
Group....................... 100,110
7,600 Casella Waste Systems, Inc.,
Class A *................... 100,548
298 Duratek, Inc. *............... 5,945
41,700 NiSource, Inc. ............... 950,343
3,900 SJW Corp. .................... 137,007
100 Southwest Water Co. .......... 1,043
------------
1,294,996
------------
GOVERNMENT AIRCRAFT & DEFENSE - 0.0%
1,300 Aerosonic Corp. *............. 5,720
200 Benthos, Inc. *............... 3,430
1,300 Lowrance Electronics, Inc. ... 31,603
------------
40,753
------------
HEALTH CARE & HOSPITAL - 2.6%
1,000 Allied Healthcare
International, Inc. *....... 6,250
200 American Shared Hospital
Services.................... 1,090
24,400 Health Net, Inc. *............ 798,124
23,900 Humana, Inc. *................ 763,366
10,500 Kindred Healthcare, Inc. *.... 368,550
10,000 Manor Care, Inc. ............. 363,600
3,000 MedCath Corp. *............... 87,900
112 Medical Resources, Inc.
(b)(c)...................... 0
2,800 MEDTOX Scientific, Inc. *..... 22,400
5,700 National Home Health Care
Corp. ...................... 66,006
600 Pediatric Services of America,
Inc. *...................... 7,404
5,700 RehabCare Group, Inc. *....... 163,647
6,400 Res-Care, Inc. *.............. 80,064
</Table>
See the accompanying notes to the financial statements.
98 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg Value Long/Short Equity Fund (a)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------
COMMON STOCK, HEALTH CARE &
HOSPITAL continued
17,800 Triad Hospitals, Inc. *....... $ 891,780
------------
3,620,181
------------
INFORMATION & SERVICES - 6.2%
2,100 Ablest, Inc. *................ 15,330
10,800 ABM Industries, Inc. ......... 207,684
500 Almost Family, Inc. *......... 6,645
7,400 American Retirement Corp. *... 107,596
3,500 Angelica Corp. ............... 98,000
700 Bluegreen Corp. *............. 8,995
7,600 Capital Senior Living Corp.
*........................... 42,636
2,000 Carriage Services, Inc. *..... 11,140
440 Cass Information Systems,
Inc. ....................... 16,940
300 Century Business Services,
Inc. *...................... 1,230
14,729 CheckFree Corp. *............. 600,354
5,400 Cornell Cos., Inc. *.......... 68,040
12,000 Corrections Corp. of America
*........................... 463,200
10,400 Discovery Partners
International *............. 33,280
4,300 Dun & Bradstreet Corp. *...... 264,235
2,200 Ecology & Environment,
Inc. ....................... 15,576
600 Equifax, Inc. ................ 18,414
9,200 Exponent, Inc. *.............. 219,788
4,900 Forrester Research, Inc. *.... 68,992
9,750 Healthcare Services Group,
Inc. ....................... 236,438
5,800 Heidrick & Struggles
International, Inc. *....... 213,266
3,000 Horizon Health Corp. *........ 127,500
3,600 Hudson Highland Group, Inc.
*........................... 61,524
2,060 Kelly Services, Inc., Class
A........................... 59,307
5,100 Kendle International, Inc.
*........................... 58,650
900 Kforce, Inc. *................ 9,891
7,700 Korn/Ferry International *.... 146,531
2,100 Labor Ready, Inc. *........... 39,165
14,700 Laureate Education, Inc. *.... 629,013
14,000 Layne Christensen Co. *....... 241,780
6,700 MAXIMUS, Inc. ................ 224,383
9,200 Metal Management, Inc. ....... 236,256
800 Michael Baker Corp. *......... 17,640
8,850 Monro Muffler Brake, Inc. *... 228,419
31,100 MPS Group, Inc. *............. 326,861
1,300 National Technical Systems,
Inc. *...................... 5,590
3,100 Navigant International, Inc.
*........................... 42,346
10,044 NCO Group, Inc. *............. 196,360
5,100 Opinion Research Corp. *...... 35,751
41,500 PAREXEL International Corp.
*........................... 975,251
1,300 Per-Se Technologies, Inc. *... 19,955
15,800 Pharmaceutical Product
Development, Inc. *......... 765,510
6,800 Pre-Paid Legal Services,
Inc. ....................... 230,112
400 RCM Technologies, Inc. *...... 2,016
300 Refac *....................... 1,233
8,600 Register.com, Inc. *.......... 50,482
</Table>
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------
COMMON STOCK, INFORMATION &
SERVICES continued
6,700 Resources Connection, Inc.
*........................... $ 140,231
5,992 Schnitzer Steel Industries,
Inc., Class A............... 202,110
14,000 TeleTech Holdings, Inc. *..... 180,880
11,300 URS Corp. *................... 324,875
1,700 Vertrue, Inc. *............... 60,248
9,500 Volt Information Sciences,
Inc. *...................... 229,425
------------
8,587,074
------------
INSTRUMENTS - 4.6%
5,200 American Medical Systems
Holdings, Inc. *............ 89,336
12,400 Armor Holdings, Inc. *........ 459,916
845 Arrow International, Inc. .... 29,026
7,700 ArthroCare Corp. *............ 219,450
7,000 Badger Meter, Inc. ........... 185,500
11,000 Bausch & Lomb, Inc. .......... 806,299
150 Bio-Logic Systems Corp. *..... 1,017
5,200 Bio-Rad Laboratories, Inc.,
Class A *................... 253,292
900 Bruker BioSciences Corp. *.... 3,168
10,200 Checkpoint Systems, Inc. *.... 172,176
9,219 CONMED Corp. *................ 277,676
7,963 Cooper Cos., Inc. ............ 580,503
16,300 Datascope Corp. .............. 498,454
6,900 DJ Orthopedics, Inc. *........ 172,845
18,500 Edwards Lifesciences Corp.
*........................... 799,570
1,300 Embrex, Inc. *................ 15,236
8,200 Esterline Technologies Corp.
*........................... 283,310
2,100 Frequency Electronics,
Inc. ....................... 22,386
3,800 Integra LifeSciences Holdings
*........................... 133,836
6,500 Invacare Corp. ............... 290,095
2,300 K-Tron International, Inc.
*........................... 70,012
1,840 Kewaunee Scientific Corp. .... 13,690
1,200 LeCroy Corp. *................ 20,556
100 Mesa Laboratories, Inc. ...... 1,380
4,990 Molecular Devices Corp. *..... 94,810
37,800 PerkinElmer, Inc. ............ 779,814
592 Raven Industries, Inc. ....... 12,089
1,800 Span-America Medical Systems,
Inc. ....................... 18,468
600 Thoratec Corp. *.............. 7,332
500 Vicon Industries, Inc. *...... 1,625
------------
6,312,867
------------
INSURANCE - 5.1%
2,900 American National Insurance
Co. ........................ 307,110
2,000 American Physicians Capital,
Inc. *...................... 68,540
4,900 American Safety Insurance
Holdings Ltd. *............. 73,010
2,700 AmerUs Group Co. ............. 127,575
18,200 Aon Corp. .................... 415,688
20,300 CNA Financial Corp. *......... 569,618
11,600 Crawford & Co., Class B....... 82,940
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 99
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg Value Long/Short Equity Fund (a)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------
COMMON STOCK, INSURANCE continued
3,200 Delphi Financial Group, Inc.,
Class A..................... $ 137,600
9,500 Everest Re Group Ltd. ........ 808,545
27,460 Fidelity National Financial,
Inc. ....................... 904,532
10,400 FPIC Insurance Group, Inc.
*........................... 334,360
22,000 HCC Insurance Holdings,
Inc. ....................... 795,520
3,300 Max Re Capital Ltd. .......... 77,649
700 National Western Life
Insurance Co., Class A *.... 119,658
800 NYMAGIC, Inc. ................ 18,960
10,500 Old Republic International
Corp. ...................... 244,545
13,400 PacifiCare Health Systems,
Inc. *...................... 762,728
13,800 Radian Group, Inc. ........... 658,812
100 RTW, Inc. *................... 1,050
400 Selective Insurance Group,
Inc. ....................... 18,492
25,300 The Phoenix Companies,
Inc. ....................... 323,334
7,000 UnumProvident Corp. .......... 119,140
------------
6,969,406
------------
IT HARDWARE - 4.6%
100 American Technical Ceramics
Corp. *..................... 798
19,500 Amphenol Corp., Class A....... 722,280
8,000 Avocent Corp. *............... 205,280
7,700 Cobra Electronics Corp. *..... 58,135
2,591 Cohu, Inc. ................... 41,326
47,000 Crown Castle International
Corp. *..................... 754,820
9,100 CTS Corp. .................... 118,300
5,912 Digi International, Inc. *.... 81,113
11,150 Diodes, Inc. *................ 302,500
1,800 EMS Technologies, Inc. *...... 24,480
7,600 Energy Conversion Devices,
Inc. *...................... 172,748
600 Espey Manufacturing &
Electronics Corp. .......... 15,810
5,200 Globecomm Systems, Inc. *..... 30,940
34,200 Harris Corp. ................. 1,116,629
2,400 inTEST Corp. *................ 9,984
22,806 Lam Research Corp. *.......... 658,181
25,100 Marvell Technology Group Ltd.
*........................... 962,334
800 Merrimac Industries, Inc. *... 7,160
900 Microsemi Corp. *............. 14,661
575 Optical Cable Corp. *......... 2,984
6,300 Park Electrochemical Corp. ... 127,638
4,200 Peak International Ltd. *..... 15,960
10,300 Photronics, Inc. *............ 186,430
2,100 Semitool, Inc. *.............. 21,420
6,300 SpectraLink Corp. ............ 88,956
2,225 Spectrum Control, Inc. *...... 16,621
1,000 Stoneridge, Inc. *............ 12,210
600 Supertex, Inc. *.............. 10,986
16,129 Symmetricom, Inc. *........... 178,871
1,600 Trans-Lux Corp. .............. 11,280
6,981 Trident Microsystems, Inc.
*........................... 123,424
</Table>
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------
COMMON STOCK, IT HARDWARE continued
7,700 ViaSat, Inc. *................ $ 143,913
7,800 Virage Logic Corp. *.......... 85,488
2,700 Woodhead Industries, Inc. .... 36,720
------------
6,360,380
------------
LAND & WATER TRANSPORTATION - 3.4%
3,800 Celadon Group, Inc. *......... 70,490
15,600 CNF, Inc. .................... 729,924
8,000 EGL, Inc. *................... 182,400
21,000 General Maritime Corp. *...... 1,017,239
19,575 Marten Transport Ltd. *....... 417,535
8,400 Overseas Shipholding Group,
Inc. ....................... 528,444
9,200 Ryder Systems, Inc. .......... 383,640
20,000 Teekay Shipping Corp. ........ 899,000
8,496 U.S. Xpress Enterprises, Inc.,
Class A *................... 138,910
6,400 USA Truck, Inc. *............. 146,880
6,700 Werner Enterprises, Inc. ..... 130,181
------------
4,644,643
------------
METAL PRODUCTS & MACHINERY - 2.5%
400 Astec Industries, Inc. *...... 8,820
2,900 Blount International, Inc.
*........................... 49,242
1,200 Bonso Electronics
International, Inc. ........ 5,304
5,700 Crown Holdings, Inc. *........ 88,692
2,800 Cummins, Inc. ................ 196,980
1,500 EnerSys *..................... 19,650
300 Evans & Sutherland Computer
Corp. *..................... 1,650
200 Gehl Co. *.................... 5,342
5,300 Gerber Scientific, Inc. *..... 38,584
700 Hardinge, Inc. ............... 9,415
1,600 International Aluminum
Corp. ...................... 53,136
9,600 Kennametal, Inc. ............. 455,904
100 L.S. Starrett Co., Class A.... 1,940
14,400 Lennox International, Inc. ... 315,648
5,000 Lincoln Electric Holdings,
Inc. ....................... 150,400
12,100 MagneTek, Inc. *.............. 64,493
5,200 Material Sciences Corp. *..... 69,940
7,100 NCI Building Systems, Inc.
*........................... 274,060
700 P & F Industries, Inc. *...... 10,542
1,098 Powell Industries, Inc. *..... 20,335
2,125 Q.E.P. Co., Inc. *............ 30,281
8,900 Regal-Beloit Corp. ........... 256,231
4,500 Robbins & Myers, Inc. ........ 99,045
3,200 Standard Motor Products,
Inc. ....................... 37,440
5,600 Standex International
Corp. ...................... 152,880
209 Tecumseh Products Co., Class
B........................... 8,179
100 Tennant Co. .................. 3,869
21,700 Timken Co. ................... 593,278
1,100 Toro Co. ..................... 97,350
200 Twin Disc, Inc. .............. 4,951
7,700 York International Corp. ..... 301,686
------------
3,425,267
------------
</Table>
See the accompanying notes to the financial statements.
100 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg Value Long/Short Equity Fund (a)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------
COMMON STOCK continued
MISCELLANEOUS FINANCE - 1.7%
17,800 A.G. Edwards, Inc. ........... $ 797,440
8,600 Affiliated Managers Group,
Inc. *...................... 533,458
2,800 Cohen & Steers, Inc. ......... 46,200
6,800 Knight Trading Group, Inc.,
Class A *................... 65,552
20,600 Raymond James Financial,
Inc. ....................... 624,180
7,866 Stifel Financial Corp. *...... 171,479
4,600 SWS Group, Inc. .............. 73,738
------------
2,312,047
------------
OIL & COAL RESOURCES - 1.7%
6,500 Carrizo Oil & Gas, Inc. *..... 110,435
28,900 Chesapeake Energy Corp. ...... 634,066
4,300 Denbury Resources, Inc. *..... 151,489
5,900 Energy Partners Ltd. *........ 153,223
11,800 Magnum Hunter Resources, Inc.
*........................... 190,098
15,600 Meridian Resource Corp. *..... 80,496
9,899 Resource America, Inc., Class
A........................... 346,910
12,500 Ultra Petroleum Corp. *....... 635,000
------------
2,301,717
------------
OIL DISTRIBUTION - 0.5%
1,600 Ashland, Inc. ................ 107,952
1,300 Questar Corp. ................ 77,025
4,500 Sunoco, Inc. ................. 465,840
------------
650,817
------------
OIL DRILLING & SERVICES - 1.7%
1,700 Dawson Geophysical Co. *...... 41,140
29,100 Grant Prideco, Inc. *......... 703,056
554 Gulf Island Fabrication,
Inc. ....................... 12,997
1,400 Lufkin Industries, Inc. ...... 67,606
600 NATCO Group, Inc., Class A
*........................... 6,522
1,756 National-Oilwell, Inc. *...... 82,005
20,700 Newpark Resources, Inc. *..... 121,923
9,900 Oceaneering International,
Inc. *...................... 371,250
200 Oil States International, Inc.
*........................... 4,110
14,600 Tidewater, Inc. .............. 567,356
4,200 Todco, Class A *.............. 108,528
9,800 W-H Energy Services, Inc. *... 234,514
------------
2,321,007
------------
PHOTOOPTICAL, MICROS & OFFICE MACHINERY -
1.4%
1,000 Dataram Corp. *............... 4,696
14,500 Diebold, Inc. ................ 795,325
100 Global Payment Technologies,
Inc. *...................... 628
398 Interphase Corp. *............ 2,535
5,500 M-Systems Flash Disk Pioneers
Ltd. *...................... 121,220
3,300 PAR Technology Corp. *........ 51,381
10,400 Printronix, Inc. ............. 167,440
1,100 SBS Technologies, Inc. *...... 12,265
25,100 Storage Technology Corp. *.... 773,080
</Table>
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------
COMMON STOCK, PHOTOOPTICAL, MICROS & OFFICE
MACHINERY continued
1,000 X-Rite, Inc. ................. $ 15,040
------------
1,943,610
------------
PUBLISHING, BROADCASTING & CINEMA - 1.5%
22,300 American Greetings Corp.,
Class A..................... 568,204
1,300 Bowne & Co., Inc. ............ 19,552
1,100 Cadmus Communications Corp. .. 15,531
3,500 Central European Media
Enterprises Ltd., Class A
*........................... 173,110
2,800 Consolidated Graphics, Inc.
*........................... 147,280
1,700 Image Entertainment, Inc. *... 9,299
900 John H. Harland Co. .......... 30,924
5,200 Outlook Group Corp. .......... 38,116
36,700 Reader's Digest Association,
Inc. ....................... 635,277
11,954 Regent Communications, Inc.
*........................... 63,954
8,627 Scholastic Corp. *............ 318,250
1,600 Thomas Nelson, Inc. .......... 37,840
3,700 World Wrestling Entertainment,
Inc. ....................... 44,400
------------
2,101,737
------------
REAL ESTATE DEVELOPMENT - 1.0%
800 AMREP Corp. .................. 19,600
2,555 Avatar Holdings, Inc. *....... 119,702
7,500 Florida East Coast Industries,
Inc. ....................... 318,600
1,500 ILX Resorts, Inc. ............ 15,345
2,700 J.W. Mays, Inc. *............. 45,576
4,100 Patriot Transportation
Holding, Inc. *............. 213,487
4,900 Stewart Enterprises, Inc.,
Class A *................... 30,135
300 Tarragon Corp. *.............. 6,057
18,900 The Brink's Co. .............. 653,940
------------
1,422,442
------------
REAL ESTATE INVESTMENT TRUSTS - 5.5%
2,000 Bedford Property Investors,
Inc. ....................... 43,660
5,400 Boykin Lodging Co. *.......... 51,462
14,700 Brandywine Realty Trust....... 417,480
8,100 Capital Automotive REIT....... 268,272
7,300 CBL & Associates Properties,
Inc. ....................... 522,023
4,400 Correctional Properties
Trust....................... 111,100
32,000 Friedman, Billings, Ramsey
Group, Inc., Class A........ 507,840
16,400 Hospitality Properties
Trust....................... 662,232
56,800 HRPT Properties Trust......... 676,488
20,500 iStar Financial, Inc. ........ 844,190
5,600 LTC Properties, Inc. ......... 97,160
6,400 Mission West Properties,
Inc. ....................... 67,840
500 National Health Investors,
Inc. ....................... 12,990
200 National Health Realty,
Inc. ....................... 3,720
22,800 New Plan Excel Realty Trust... 572,508
3,200 One Liberty Properties,
Inc. ....................... 59,712
1,800 Origen Financial, Inc. ....... 12,438
5,200 Parkway Properties, Inc. ..... 242,840
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 101
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg Value Long/Short Equity Fund (a)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------
COMMON STOCK, REAL ESTATE INVESTMENT
TRUSTS continued
8,200 Pennsylvania Real Estate
Investment Trust............ $ 330,624
4,600 PS Business Parks, Inc. ...... 185,380
18,900 Senior Housing Properties
Trust....................... 315,252
1,800 Sizeler Property Investors,
Inc. ....................... 21,348
12,800 SL Green Realty Corp. ........ 719,616
34,000 Trizec Properties, Inc. ...... 646,000
1,602 Urstadt Biddle Properties,
Class A..................... 24,431
4,300 Windrose Medical Properties
Trust....................... 58,953
7,500 Winston Hotels, Inc. ......... 87,750
------------
7,563,309
------------
RESTAURANTS, HOTELS & THEATERS - 2.1%
15,152 CBRL Group, Inc. ............. 625,778
18,300 CKE Restaurants, Inc. *....... 290,055
5,400 Dave & Buster's, Inc. *....... 100,980
1,500 Dover Motorsports, Inc. ...... 7,575
5,000 Famous Dave's of America, Inc.
*........................... 70,400
4,900 Frisch's Restaurants, Inc. ... 127,351
8,400 Interstate Hotels & Resorts,
Inc. *...................... 40,488
400 J. Alexander's Corp. *........ 2,900
2,000 Jack in the Box, Inc. *....... 74,200
9,400 Landry's Restaurants, Inc. ... 271,848
6,100 Lone Star Steakhouse & Saloon,
Inc. ....................... 176,321
4,700 Luby's, Inc. *................ 36,425
9,900 Marcus Corp. ................. 202,950
800 Max & Erma's Restaurants, Inc.
*........................... 10,560
4,900 Movie Gallery, Inc. .......... 140,532
100 Nathan's Famous, Inc. *....... 845
1,100 Orient- Express Hotels Ltd.,
Class A..................... 28,710
21,000 Penn National Gaming, Inc.
*........................... 616,980
63 Ryan's Restaurant Group, Inc.
*........................... 915
301 Sands Regent *................ 3,040
3,400 Total Entertainment Restaurant
Corp. *..................... 38,726
2,600 WestCoast Hospitality Corp.
*........................... 18,070
1,300 Worldwide Restaurant Concepts,
Inc. *...................... 6,630
------------
2,892,279
------------
RETAIL - 5.6%
200 1-800 CONTACTS, Inc. *........ 4,174
19,000 Aeropostale, Inc. *........... 622,250
12,200 American Eagle Outfitters,
Inc. ....................... 360,510
100 AutoNation, Inc. *............ 1,894
3,000 Blair Corp. .................. 98,910
24,300 Borders Group, Inc. .......... 646,866
2,300 Brown Shoe Co., Inc. ......... 78,821
30,900 Charming Shoppes, Inc. *...... 251,217
27,300 Chico's FAS, Inc. *........... 771,498
206 Dress Barn, Inc. *............ 3,753
4,500 EZCORP, Inc., Class A *....... 59,760
</Table>
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------
COMMON STOCK, RETAIL continued
4,800 Finish Line, Inc., Class A.... $ 111,120
2,600 Finlay Enterprises, Inc. *.... 34,346
100 Foodarama Supermarkets, Inc.
*........................... 3,489
3,900 Foot Locker, Inc. ............ 114,270
12,200 GameStop Corp., Class A *..... 270,352
200 Gottschalks, Inc. *........... 2,070
1,300 GSI Commerce, Inc. *.......... 17,589
9,400 Guess?, Inc. *................ 128,780
6,300 Haverty Furniture Cos.,
Inc. ....................... 96,075
11,100 Insight Enterprises, Inc. *... 194,916
10,400 Longs Drug Stores Corp. ...... 355,888
4,300 MarineMax, Inc. *............. 134,074
3,500 Neiman Marcus Group, Inc.,
Class A..................... 320,285
26,400 Office Depot, Inc. *.......... 585,552
2,619 PC Mall, Inc. *............... 32,528
1,600 Retail Ventures, Inc. *....... 14,576
1,700 REX Stores Corp. *............ 23,970
1,700 Rush Enterprises, Inc., Class
B *......................... 28,662
100 S&K Famous Brands, Inc. *..... 1,628
2,000 Shoe Carnival, Inc. *......... 35,000
1,000 ShopKo Stores, Inc. *......... 22,220
4,000 Sport Chalet, Inc. *.......... 54,204
4,600 Stage Store, Inc. *........... 176,594
5,300 Stamps.com, Inc. *............ 87,980
3,900 SUPERVALU, Inc. .............. 130,065
2,700 Systemax, Inc. *.............. 14,688
2,000 The Bon-Ton Stores, Inc. ..... 36,180
2,800 The Buckle, Inc. ............. 97,748
2,200 The Children's Place Retail
Stores, Inc. *.............. 105,050
7,500 The Men's Wearhouse, Inc. *... 316,575
32,500 Toys "R" Us, Inc. *........... 837,200
5,500 Trans World Entertainment
Corp. *..................... 81,015
2,200 UGI Corp. .................... 99,924
100 Urban Outfitters, Inc. *...... 4,797
1,500 Village Super Market, Inc.,
Class A..................... 62,085
1,300 Weis Markets, Inc. ........... 47,931
3,300 Zale Corp. *.................. 98,076
------------
7,677,155
------------
SOAPS & COSMETICS - 0.6%
600 CPAC, Inc. ................... 3,210
2,747 Elizabeth Arden, Inc. *....... 65,214
15,400 Estee Lauder Cos., Inc., Class
A........................... 692,692
100 Parlux Fragrances, Inc. *..... 2,165
------------
763,281
------------
SOFTWARE - 5.1%
35,230 Activision, Inc. *............ 521,404
7,800 American Software, Inc., Class
A........................... 50,622
400 Ansoft Corp. *................ 10,792
4,228 Applix, Inc. *................ 25,474
31,100 Autodesk, Inc. ............... 925,536
22,600 Borland Software Corp. *...... 183,512
400 Captaris, Inc. *.............. 1,620
8,500 Cerner Corp. *................ 446,335
13,100 CIBER, Inc. *................. 95,237
</Table>
See the accompanying notes to the financial statements.
102 Laudus Funds Annual Report
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg Value Long/Short Equity Fund (a)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------
COMMON STOCK, SOFTWARE continued
21,600 Cognizant Technology Solutions
Corp., Class A *............ $ 997,919
700 Computer Task Group, Inc. *... 2,786
1,700 Covansys Corp. *.............. 25,356
2,000 Dendrite International, Inc.
*........................... 28,080
4,100 Edgewater Technology, Inc.
*........................... 17,138
700 First American Corp. ......... 23,058
8,900 First Consulting Group, Inc.
*........................... 46,280
8,748 Hyperion Solutions Corp. *.... 385,874
400 infoUSA, Inc. ................ 4,204
6,175 Internet Security Systems,
Inc. *...................... 113,003
1,400 JDA Software Group, Inc. *.... 19,656
4,810 Keynote Systems, Inc. *....... 57,095
2,800 Macromedia, Inc. *............ 93,800
1,200 Marchex, Inc., Class B *...... 22,368
600 Moldflow Corp. *.............. 9,594
1,200 MRO Software, Inc. *.......... 16,836
3,339 NetManage, Inc. *............. 22,071
9,000 NetScout Systems, Inc. *...... 40,050
900 NWH, Inc. .................... 13,320
7,500 Pegasus Solutions, Inc. *..... 88,650
17,400 Perot Systems Corp., Class A
*........................... 233,856
100 Phoenix Technologies Ltd. *... 952
5,800 PLATO Learning, Inc. *........ 45,240
11,000 Redback Networks, Inc. *...... 65,780
2,500 S1 Corp. *.................... 17,350
7,900 Source Interlink Cos., Inc.
*........................... 88,875
5,077 SPSS, Inc. *.................. 88,289
3,400 Stellent, Inc. *.............. 28,594
9,000 Sykes Enterprises, Inc. *..... 61,830
15,900 Take-Two Interactive Software,
Inc. *...................... 621,690
300 TechTeam Global, Inc. *....... 3,309
2,700 THQ, Inc. *................... 75,978
5,500 Tier Technologies, Inc., Class
B *......................... 40,535
3,600 Tripos, Inc. *................ 14,940
1,000 TriZetto Group, Inc. *........ 9,310
3,200 TSR, Inc. .................... 25,824
10,200 Tyler Technologies, Inc. *.... 77,622
2,600 Ulticom, Inc *................ 28,938
38,444 VeriSign, Inc. *.............. 1,103,342
1,200 Verity, Inc. *................ 11,340
9,642 Witness Systems, Inc. *....... 169,217
------------
7,100,481
------------
TEXTILES & APPAREL - 2.3%
5,128 Ashworth, Inc. *.............. 58,408
3,500 Coach, Inc. *................. 198,205
</Table>
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------
COMMON STOCK, TEXTILES & APPAREL continued
3,800 Culp, Inc. *.................. $ 22,420
98 Haggar Corp. ................. 1,979
600 Hallwood Group, Inc. *........ 78,000
100 Hampshire Group Ltd. *........ 3,995
6,400 Kenneth Cole Productions,
Inc. ....................... 186,496
19,400 Liz Claiborne, Inc. .......... 778,522
800 McRae Industries, Inc., Class
A........................... 9,104
19,900 Phillips-Van Heusen Corp. .... 530,136
3,100 Polo Ralph Lauren Corp. ...... 120,280
5,600 Russell Corp. ................ 101,248
6,700 Saucony, Inc., Class A........ 152,090
5,000 Stride Rite Corp. ............ 66,500
4,600 Tandy Brands Accessories,
Inc. ....................... 68,862
6,800 Timberland Co., Class A *..... 482,324
21,700 Tommy Hilfiger Corp. *........ 253,890
------------
3,112,459
------------
WHOLESALE - 1.8%
600 ADDvantage Technologies Group,
Inc. *...................... 2,538
1,500 All American Semiconductor,
Inc. *...................... 7,245
8,900 Anixter International *....... 321,735
7,400 Applied Industrial
Technologies, Inc. ......... 201,280
28,000 Arrow Electronics, Inc. *..... 709,799
1,100 Beacon Roofing Supply, Inc.
*........................... 24,074
1,314 Bell Microproducts, Inc. *.... 9,829
7,000 Delta Apparel, Inc. .......... 207,200
5,300 Department 56, Inc. *......... 92,538
5,100 Enesco Group, Inc. *.......... 33,915
100 GTSI Corp. *.................. 970
18,800 Hughes Supply, Inc. .......... 559,300
3,600 Insurance Auto Auctions, Inc.
*........................... 100,260
1,500 LKQ Corp. *................... 30,105
200 Noland Co. ................... 9,476
600 Nu Horizons Electronics Corp.
*........................... 4,290
1,300 Pomeroy IT Solutions, Inc.
*........................... 19,370
3,500 Spartan Stores, Inc. *........ 37,240
2,030 TIMCO Aviation Services, Inc.
*........................... 264
2,900 Ventiv Health, Inc. *......... 66,700
1,400 Watsco, Inc., Class B......... 59,150
------------
2,497,278
------------
TOTAL COMMON STOCK (COST
$101,301,565)............... 123,944,529
------------
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 103
Financial Statements--Statement of Portfolio Investments continued
Laudus Rosenberg Value Long/Short Equity Fund (a)
<Table>
<Caption>
PRINCIPAL VALUE
- ----------------------------------------------------------
REPURCHASE AGREEMENT - 10.3%
$14,181,492 Bear Stearns dated 3/31/05,
due 4/1/05 at 2.63% with a
maturity value of
$14,182,528 (Fully
collateralized by a U.S.
Treasury securities)........ $ 14,181,492
------------
TOTAL REPURCHASE AGREEMENT
(COST $14,181,492).......... 14,181,492
------------
TOTAL INVESTMENTS (COST
$115,483,057)
(d) - 100.2%................ 138,126,021
NET OTHER ASSETS
(LIABILITIES) - (0.2)%...... (222,147)
------------
NET ASSETS - 100.0%........... $137,903,874
============
</Table>
- ---------------
* Non-income producing security.
(a) All long positions are pledged as collateral for securities sold short.
(b) Bankrupt Security/delisted; fair-valued by Management.
(c) Restricted Security. Additional information regarding this security is as
follows:
<Table>
<Caption>
ACQUISITION PERCENT OF
DATE COST VALUE NET ASSETS
December 14, 2001 $0 $0 0%
</Table>
(d) The aggregate cost for federal income tax purposes is $115,777,936 and
differs from value by net unrealized appreciation of securities as follows:
<Table>
Unrealized appreciation................... $24,724,472
Unrealized depreciation................... (2,376,387)
-----------
Net unrealized appreciation............... $22,348,085
===========
</Table>
See the accompanying notes to the financial statements.
104 Laudus Funds Annual Report
Financial Statements
Statement of Securities Sold Short
LAUDUS ROSENBERG VALUE LONG/SHORT EQUITY FUND as of 3/31/05
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK - 90.2%
AGRICULTURE, FOOD & BEVERAGE - 1.6%
1,600 Bridgford Foods Corp. *.......... $ 14,384
16,900 Charles River Laboratories
International, Inc. *.......... 794,976
972 Coca-Cola Bottling Co. .......... 50,845
15,100 Coca-Cola Enterprises, Inc. ..... 309,852
143 Farmer Brothers Co. ............. 3,425
19,200 Monterey Pasta Co. *............. 61,440
3,200 Penford Corp. ................... 52,000
30,385 Tootsie Roll Industries, Inc. ... 911,550
------------
2,198,472
------------
AIRLINES - 1.2%
32,700 AirTran Holdings, Inc. *......... 295,935
10,500 America West Holdings Corp.,
Class B *...................... 57,015
17,300 Continental Airlines, Inc., Class
B *............................ 208,292
13,100 ExpressJet Holdings, Inc. *...... 149,471
10,880 Frontier Airlines, Inc. *........ 114,022
30,800 JetBlue Airways Corp. *.......... 586,432
31,300 Northwest Airlines Corp. *....... 209,397
------------
1,620,564
------------
AUTOS - 1.9%
15,400 American Axle & Manufacturing
Holdings, Inc. ................ 377,300
51,100 Dana Corp. ...................... 653,569
18,245 Gentex Corp. .................... 582,016
17,300 Lear Corp. ...................... 767,428
900 Quantum Fuel Systems Technologies
Worldwide, Inc. *.............. 4,167
14,800 Tenneco Automotive, Inc. *....... 184,408
------------
2,568,888
------------
BANKS & CREDIT INSTITUTIONS - 5.9%
32,800 AmeriCredit Corp. *.............. 768,832
31,100 Astoria Financial Corp. ......... 786,830
8,300 Capitol Federal Financial........ 287,512
16,700 CharterMac....................... 359,050
25,400 Commerce Bancorp, Inc. .......... 824,738
53,100 E*TRADE Financial Corp. ......... 637,200
4,400 Encore Capital Group, Inc. *..... 64,020
16,600 F.N.B. Corp. .................... 317,890
18,153 Hudson City Bancorp, Inc. ....... 663,492
16,400 Hudson United Bancorp............ 578,100
700 Midwest Banc Holdings, Inc. ..... 13,937
45,800 New York Community Bancorp,
Inc. .......................... 831,728
14,200 Ocwen Financial Corp. *.......... 114,594
18,800 Old National Bancorp............. 381,640
1,600 TNS, Inc. *...................... 28,720
28,770 Valley National Bancorp.......... 741,691
16,200 Webster Financial Corp. ......... 735,642
------------
8,135,616
------------
BASIC MINERALS & METALS - 1.1%
11,200 American Superconductor Corp.
*.............................. 111,776
18,400 Apex Silver Mines Ltd. *......... 294,768
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, BASIC MINERALS & METALS continued
7,000 Century Aluminum Co. *........... $ 211,820
4,700 Encore Wire Corp. *.............. 47,940
11,900 Freeport-McMoRan Copper & Gold,
Inc., Class B.................. 471,359
40,800 Hecla Mining Co. *............... 223,584
2,100 Meridian Gold, Inc. *............ 35,364
15,500 Stillwater Mining Co. *.......... 152,675
------------
1,549,286
------------
BEER, LIQUOR & TOBACCO - 0.5%
14,600 DIMON, Inc. ..................... 91,250
4,300 Molson Coors Brewing Co., Class
B.............................. 331,831
2,900 Standard Commercial Corp. ....... 53,940
9,500 Star Scientific, Inc. *.......... 50,255
8,861 Vector Group Ltd. ............... 136,282
------------
663,558
------------
BIOTECHNOLOGY - 1.6%
19,800 Alexion Pharmaceuticals, Inc.
*.............................. 428,967
4,000 Anika Therapeutics, Inc. *....... 51,200
200 Applera Corp.- Celera Genomics
Group *........................ 2,050
11,500 ARIAD Pharmaceuticals, Inc. *.... 64,400
18,707 Avigen, Inc. *................... 52,193
400 BioCryst Pharmaceuticals, Inc.
*.............................. 1,844
17,200 Cell Genesys, Inc. *............. 77,916
2,393 CYTOGEN Corp. *.................. 13,855
9,400 Dyax Corp. *..................... 30,268
57,700 Human Genome Sciences, Inc. *.... 531,994
4,300 ICOS Corp. *..................... 96,578
10,700 Intermune, Inc. *................ 117,700
7,300 Kosan Biosciences, Inc. *........ 29,930
13,700 Lexicon Genetics, Inc. *......... 70,007
16,300 Myriad Genetics, Inc. *.......... 299,757
3,200 Neurocrine Biosciences, Inc. *... 121,792
1,300 Novavax, Inc. *.................. 1,833
5,400 Onyx Pharmaceuticals, Inc. *..... 169,290
12,700 Seattle Genetics, Inc. *......... 65,278
100 Telik, Inc. *.................... 1,508
------------
2,228,360
------------
CELLULAR & WIRELESS - 0.0%
7,100 Boston Communications Group, Inc.
*.............................. 50,552
------------
CHEMICALS & RUBBER - 1.7%
9,100 BioSphere Medical, Inc. *........ 35,945
8,800 Cabot Microelectronics Corp. *... 276,144
24,900 Goodyear Tire & Rubber Co. *..... 332,415
10,400 MacDermid, Inc. ................. 338,000
7,060 North American Scientific, Inc.
*.............................. 25,840
7,500 Scotts Co., Class A *............ 526,725
12,400 Valspar Corp. ................... 577,096
6,800 WD-40 Co. ....................... 220,932
------------
2,333,097
------------
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 105
Financial Statements--Statement of Securities Sold Short continued
Laudus Rosenberg Value Long/Short Equity Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK continued
COMMUNICATIONS UTILITIES - 1.3%
33,633 Cablevision Systems Corp. *...... $ 943,406
44,500 Citizens Communications Co. ..... 575,830
19,600 Level 3 Communications, Inc. *... 40,376
24,700 Mediacom Communications Corp. *.. 161,538
12,900 Net2Phone, Inc. *................ 20,769
17,100 Time Warner Telecom, Inc., Class
A *............................ 67,887
------------
1,809,806
------------
CONSTRUCTION & HOMEBUILDING - 0.3%
9,700 Champion Enterprises, Inc. *..... 91,180
7,500 MasTec, Inc. *................... 61,575
5,000 Modtech Holdings, Inc. *......... 42,500
200 Orleans Homebuilders, Inc. ...... 3,678
29,200 Quanta Services, Inc. *.......... 222,796
------------
421,729
------------
CONSTRUCTION MATERIALS - 0.0%
7,600 Nanophase Technologies Corp. *... 43,548
------------
CONSUMER DURABLES - 0.8%
28,600 Maytag Corp. .................... 399,542
10,900 Whirlpool Corp. ................. 738,257
------------
1,137,799
------------
DRUGS & PHARMACEUTICALS - 5.3%
7,200 Able Laboratories, Inc. *........ 168,912
23,400 Adolor Corp. *................... 232,596
34,900 Alkermes, Inc. *................. 362,262
23,112 Amylin Pharmaceuticals, Inc. *... 404,229
3,700 AtheroGenics, Inc. *............. 48,433
600 Cellegy Pharmaceuticals, Inc.
*.............................. 972
5,800 Cubist Pharmaceuticals, Inc. *... 61,596
17,300 CuraGen Corp. *.................. 71,968
37,100 CV Therapeutics, Inc. *.......... 755,357
19,600 Dendreon Corp. *................. 106,820
100 DepoMed, Inc. *.................. 394
8,200 Discovery Laboratories, Inc. *... 46,166
5,300 DOV Pharmaceutical, Inc. *....... 72,504
8,300 Emisphere Technologies, Inc. *... 30,461
9,277 Enzo Biochem, Inc. *............. 133,774
6,800 Epix Pharmaceuticals, Inc. *..... 47,600
2,484 Guilford Pharmaceuticals, Inc.
*.............................. 5,713
23,200 Hospira, Inc. *.................. 748,664
2,300 Idenix Pharmaceuticals, Inc. *... 45,655
1,504 ImmunoGen, Inc. *................ 7,866
1,800 Immunomedics, Inc. *............. 4,374
15,500 Indevus Pharmaceuticals, Inc.
*.............................. 43,090
16,700 Inspire Pharmaceuticals, Inc.
*.............................. 136,272
68,000 Isis Pharmaceuticals, Inc. *..... 263,160
7,400 Kos Pharmaceuticals, Inc. *...... 308,432
6,600 Medicis Pharmaceutical Corp.,
Class A........................ 197,868
9,100 Neose Technologies, Inc. *....... 23,478
74 Neurogen Corp. *................. 524
38,100 NPS Pharmaceuticals, Inc. *...... 480,822
10,200 Pain Therapeutics, Inc. *........ 51,816
12,200 Par Pharmaceutical Cos., Inc.
*.............................. 407,968
13,735 Penwest Pharmaceuticals Co. *.... 169,765
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, DRUGS & PHARMACEUTICALS continued
2,300 Pharmacyclics, Inc. *............ $ 18,469
2,200 Protein Design Labs, Inc. *...... 35,178
3,300 Santarus, Inc. *................. 16,038
300 SciClone Pharmaceuticals, Inc.
*.............................. 852
5 Tanox, Inc. *.................... 48
21,800 Transkaryotic Therapies, Inc.
*.............................. 544,237
32,300 Vertex Pharmaceuticals, Inc. *... 302,328
18,182 Vicuron Pharmaceuticals, Inc.
*.............................. 286,548
16,900 Watson Pharmaceuticals, Inc. *... 519,337
7,009 ZymoGenetics, Inc. *............. 106,957
------------
7,269,503
------------
ELECTRIC UTILITIES - 3.2%
9,700 Allegheny Energy, Inc. *......... 200,402
63,500 CenterPoint Energy, Inc. ........ 763,905
40,400 DPL, Inc. ....................... 1,010,000
24,600 DTE Energy Co. .................. 1,118,808
2,200 Otter Tail Corp. ................ 55,088
34,500 Sierra Pacific Resources *....... 370,875
55,900 TECO Energy, Inc. ............... 876,512
------------
4,395,590
------------
FINANCIAL INVESTMENTS - 1.5%
7,400 Acacia Research -- Acacia
Technologies *................. 41,884
5,000 CapitalSource, Inc. *............ 115,000
6,028 Digital Theater systems, Inc.
*.............................. 109,167
27,300 Hanover Compressor Co. *......... 329,511
20,600 InterDigital Communications Corp.
*.............................. 315,592
27 Macrovision Corp. *.............. 615
25,400 Marvel Enterprises, Inc. *....... 508,000
22,700 Rent-A-Center, Inc. *............ 619,937
900 Royal Gold, Inc. ................ 16,497
------------
2,056,203
------------
FOREST PRODUCTS & PAPER - 0.8%
10,200 Bowater, Inc. ................... 384,234
200 Caraustar Industries, Inc. *..... 2,580
27,200 Graphic Packaging Corp. *........ 119,952
10,700 Sealed Air Corp. *............... 555,758
------------
1,062,524
------------
FURNITURE & HOUSEHOLD ITEMS - 1.8%
18,200 Alliance Gaming Corp. *.......... 174,538
4,800 Constar International, Inc. *.... 27,168
400 Global-Tech Appliances, Inc. *... 2,792
24,168 Herman Miller, Inc. ............. 727,940
900 Kinetic Concepts, Inc. *......... 53,685
23,700 Leapfrog Enterprises, Inc. *..... 268,995
33,800 Pactiv Corp. *................... 789,230
400 Research Frontiers, Inc. *....... 2,080
5,400 Rogers Corp. *................... 216,000
2,900 Russ Berrie & Co., Inc. ......... 55,535
200 Select Comfort Corp. *........... 4,088
7,700 Tempur-Pedic International, Inc.
*.............................. 143,682
4,400 Virco Manufacturing Corp. *...... 33,792
------------
2,499,525
------------
</Table>
See the accompanying notes to the financial statements.
106 Laudus Funds Annual Report
Financial Statements--Statement of Securities Sold Short continued
Laudus Rosenberg Value Long/Short Equity Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK continued
GAS & OTHER PUBLIC UTILITIES - 1.9%
107,500 El Paso Corp. ................... $ 1,137,350
13,500 Kinder Morgan, Inc. ............. 1,021,950
10,600 SEMCO Energy, Inc. .............. 60,950
7,736 Stericycle, Inc. *............... 341,931
------------
2,562,181
------------
GOVERNMENT AIRCRAFT & DEFENSE - 0.2%
8,200 Kaman Corp., Class A............. 102,090
2,984 KVH Industries, Inc. *........... 27,184
6,300 Microvision, Inc. *.............. 36,729
4,106 Sirf Technology Holdings, Inc.
*.............................. 45,823
7,500 Sturm, Ruger & Co., Inc. ........ 51,975
------------
263,801
------------
HEALTH CARE & HOSPITAL - 2.1%
7,487 American Healthways, Inc. *...... 247,221
14,000 AMERIGROUP Corp. *............... 511,840
26,200 Array BioPharma, Inc. *.......... 183,662
578 Bio-Reference Labs, Inc. *....... 8,046
19,000 Lincare Holdings, Inc. *......... 840,370
2,500 Odyssey Healthcare, Inc. *....... 29,400
5,100 Specialty Laboratories, Inc. *... 48,705
81,700 Tenet Healthcare Corp. *......... 942,001
1,400 U.S. Physical Therapy, Inc. *.... 19,572
800 VCA Antech, Inc. *............... 16,184
4,700 VistaCare, Inc., Class A *....... 96,209
------------
2,943,210
------------
INFORMATION & SERVICES - 6.4%
7,300 Administaff, Inc. ............... 106,580
11,000 Arbitron, Inc. .................. 471,900
38 Arena Pharmaceuticals, Inc. *.... 192
19,000 Certegy, Inc. ................... 657,780
4,500 Clark, Inc. ..................... 69,660
300 Concorde Career Colleges, Inc.
*.............................. 5,100
26,800 Corinthian Colleges, Inc. *...... 421,296
900 deCODE genetics, Inc. *.......... 5,130
12,000 Deluxe Corp. .................... 478,320
40,300 DeVry, Inc. *.................... 762,476
21,000 Education Management Corp. *..... 586,950
7,900 Exact Sciences Corp. *........... 28,203
31,500 Exelixis, Inc. *................. 213,570
15,400 FTI Consulting, Inc. *........... 317,856
3,000 Hewitt Associates, Inc. *........ 79,800
2,600 Intersections, Inc. *............ 37,830
3,800 iPayment Holdings, Inc. *........ 160,360
26,450 Iron Mountain, Inc. *............ 762,817
8,800 LCC International, Inc., Class A
*.............................. 37,048
24,700 Maxygen, Inc. *.................. 211,926
4,600 Medical Staffing Network
Holdings, Inc. *............... 30,406
5,200 NetRatings, Inc. *............... 79,300
14,682 PRG-Schultz International, Inc.
*.............................. 73,557
5,953 Princeton Review, Inc. *......... 32,801
9,600 RAE Systems, Inc. *.............. 29,472
25,500 Regeneron Pharmaceuticals, Inc.
*.............................. 130,305
96,400 Service Corp. International *.... 721,072
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, INFORMATION & SERVICES continued
5,400 Strayer Education, Inc. ......... $ 611,928
11,500 Syntroleum Corp. *............... 140,760
7,000 The Advisory Board Co. *......... 305,900
100 The Corporate Executive Board
Co. ........................... 6,395
4,800 Total System Services, Inc. ..... 119,952
8,800 Universal Technical Institute,
Inc. *......................... 323,840
7,900 Viad Corp. ...................... 212,510
15,200 Weight Watchers International,
Inc. *......................... 653,296
------------
8,886,288
------------
INSTRUMENTS - 4.3%
6,895 Abaxis, Inc. *................... 61,021
1,600 Aksys Ltd. *..................... 5,072
42,800 Applera Corp. ................... 844,871
500 ATS Medical, Inc. *.............. 1,825
3,400 Caliper Life Sciences, Inc. *.... 21,930
16,174 Cepheid, Inc. *.................. 156,403
8,200 Cholestech Corp. *............... 82,656
16,100 Ciphergen Biosystems, Inc. *..... 44,597
3,000 Closure Medical Corp. *.......... 80,100
14,444 Cognex Corp. .................... 359,367
22,700 Conceptus, Inc. *................ 177,060
300 Daxor Corp. *.................... 6,630
9,400 FEI Co. *........................ 217,610
11,078 FormFactor, Inc. *............... 250,806
7,400 I-Flow Corp. *................... 117,142
12,450 IDEXX Laboratories, Inc. *....... 674,292
10,809 Illumina, Inc. *................. 87,337
24,600 Input/Output, Inc. *............. 158,670
7,805 Ixia *........................... 138,851
9,491 Kyphon, Inc. *................... 238,888
9,500 LifeCell Corp. *................. 84,550
9,900 Luminex Corp. *.................. 74,547
3,900 Measurement Specialties, Inc.
*.............................. 89,700
201 Merit Medical Systems, Inc. *.... 2,410
15,800 Millipore Corp. *................ 685,720
17,700 Orasure Technologies, Inc. *..... 130,272
11,400 OrthoLogic Corp. *............... 57,684
6,000 Photon Dynamics, Inc. *.......... 114,360
6,288 Possis Medical, Inc. *........... 52,631
9,100 Regeneration Technologies, Inc.
*.............................. 93,821
4,400 Rita Medical Systems, Inc. *..... 13,156
4,700 SonoSite, Inc. *................. 122,106
2,400 Spectranetics Corp. *............ 12,480
7,900 STAAR Surgical Co. *............. 30,889
16,100 ThermoGenesis Corp. *............ 80,500
200 TriPath Imaging, Inc. *.......... 1,408
1,000 Utah Medical Products, Inc. ..... 22,000
2,800 Varian Medical Systems, Inc. *... 95,984
3,974 Varian, Inc. *................... 150,575
10,300 Wright Medical Group, Inc. *..... 247,200
------------
5,887,121
------------
INSURANCE - 1.6%
1,900 Arch Capital Group Ltd. *........ 76,076
1,500 Brown & Brown, Inc. ............. 69,135
800 ChoicePoint, Inc. *.............. 32,088
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 107
Financial Statements--Statement of Securities Sold Short continued
Laudus Rosenberg Value Long/Short Equity Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, INSURANCE continued
1,931 Citizens, Inc. *................. $ 11,103
2,500 CorVel Corp. *................... 53,300
4,800 Danielson Holding Corp. *........ 82,800
11,800 Hilb, Rogal & Hamilton Co. ...... 422,440
400 Markel Corp. *................... 138,084
17,100 RenaissanceRe Holdings Ltd. ..... 798,570
1,100 Transatlantic Holdings, Inc. .... 72,842
12,700 U.S.I. Holdings Corp. *.......... 149,606
8,500 Willis Group Holdings Ltd. ...... 313,395
------------
2,219,439
------------
IT HARDWARE - 5.3%
15,000 Advanced Energy Industries, Inc.
*.............................. 145,050
300 Atheros Communications *......... 3,081
1,680 Avici Systems, Inc. *............ 7,222
36,320 Axcelis Technologies, Inc. *..... 265,136
5,600 California Micro Devices Corp.
*.............................. 28,280
600 Centillium Communications, Inc.
*.............................. 1,536
1,120 Cherokee International Corp. *... 7,829
30,245 Cirrus Logic, Inc. *............. 136,707
1,600 Color Kinetics, Inc. *........... 16,128
200 COMARCO, Inc. *.................. 1,730
19,800 CommScope, Inc. *................ 296,208
17,100 Cypress Semiconductor Corp. *.... 215,460
1,900 Daktronics, Inc. *............... 41,135
11,200 Ditech Communications Corp. *.... 139,664
10,300 DSP Group, Inc. *................ 265,328
12,900 ESS Technology, Inc. *........... 67,983
141 Exar Corp. *..................... 1,889
9,385 Helix Technology Corp. .......... 145,186
10,100 Hutchinson Technology, Inc. *.... 351,278
350 Ibis Technology Corp. *.......... 770
20,189 Integrated Circuit Systems, Inc.
*.............................. 386,014
12,700 Integrated Silicon Solution, Inc.
*.............................. 85,090
6,200 Kulicke & Soffa Industries, Inc.
*.............................. 38,998
13,500 Mattson Technology, Inc. *....... 107,190
2,600 Metalink Ltd. *.................. 11,544
11,696 Micrel, Inc. *................... 107,837
4,000 Micro Linear Corp. *............. 20,200
17,074 Microchip Technology, Inc. ...... 444,095
51,900 National Semiconductor Corp. .... 1,069,660
12,400 NVIDIA Corp. *................... 294,624
900 Parlex Corp. *................... 5,715
16,300 Pericom Semiconductor Corp. *.... 139,691
23,700 PMC-Sierra, Inc. *............... 208,560
39,900 Rambus, Inc. *................... 601,293
18,900 RF Micro Devices, Inc. *......... 98,658
38,000 Semtech Corp. *.................. 679,060
47,500 Teradyne, Inc. *................. 693,500
200 Universal Display Corp. *........ 1,398
5,800 Vyyo, Inc. *..................... 43,094
14,400 Westell Technologies, Inc. *..... 79,344
------------
7,253,165
------------
LAND & WATER TRANSPORTATION - 0.0%
300 GulfMark Offshore, Inc. *........ 7,773
------------
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK continued
MAINFRAME & MINICOMPUTERS - 0.1%
27,415 Cray, Inc. *..................... $ 69,908
7,923 Omnicell, Inc. *................. 57,125
------------
127,033
------------
METAL PRODUCTS & MACHINERY - 2.9%
3,400 Aaon, Inc. *..................... 55,964
6,100 AGCO Corp. *..................... 111,325
7,501 American Power Conversion
Corp. ......................... 195,851
7,700 Briggs & Stratton Corp. ......... 280,357
4,800 Bucyrus International, Inc.,
Class A........................ 187,488
6,234 CUNO, Inc. *..................... 320,365
500 Environmental Tectonics Corp.
*.............................. 2,595
11,000 Fedders Corp. ................... 30,580
17,100 Federal Signal Corp. ............ 259,407
27,000 FuelCell Energy, Inc. *.......... 269,460
13,200 Global Power Equipment Group,
Inc. *......................... 126,456
3,400 Intevac, Inc. *.................. 32,062
500 Lindsay Manufacturing Co. ....... 9,540
8,200 Littlefuse, Inc. *............... 234,930
3,817 Maxwell Technologies, Inc. *..... 35,002
1,300 Paragon Technologies, Inc. *..... 11,388
200 Paul Mueller Co. ................ 5,225
1,000 Peerless Manufacturing Co. *..... 14,440
18,800 Plug Power, Inc. *............... 124,080
17,300 SPX Corp. ....................... 748,744
200 TransTechnology Corp. *.......... 1,550
12,115 Trinity Industries, Inc. ........ 341,280
1,200 Ultralife Batteries, Inc. *...... 20,544
100 Wilson Greatbatch Technologies,
Inc. *......................... 1,824
11,500 Zebra Technologies Corp., Class A
*.............................. 546,135
------------
3,966,592
------------
MISCELLANEOUS FINANCE - 2.3%
39,338 Ameritrade Holding Corp. *....... 401,641
9,000 eSPEED, Inc., Class A *.......... 82,800
21,200 IndyMac Bancorp, Inc. ........... 720,800
56,900 Janus Capital Group, Inc. ....... 793,755
16,400 Jefferies Group, Inc. ........... 617,952
2,127 Ladenburg Thalmann Financial
Services, Inc. *............... 1,446
14,500 W.P. Stewart & Co., Ltd. ........ 328,570
8,100 Waddell & Reed Financial, Inc.,
Class A........................ 159,894
1,700 Westwood Holdings Group, Inc. ... 32,266
------------
3,139,124
------------
OIL & COAL RESOURCES - 0.0%
1,300 Clayton Williams Energy, Inc.
*.............................. 33,670
------------
OIL DISTRIBUTION - 0.2%
400 Cheniere Energy, Inc. *.......... 25,804
5,882 Headwaters, Inc. *............... 193,047
------------
218,851
------------
PHOTOOPTICAL, MICROS & OFFICE MACHINERY - 1.4%
22,100 Adaptec, Inc. *.................. 105,859
3,300 Avid Technology, Inc. *.......... 178,596
20,084 Electronics for Imaging, Inc.
*.............................. 358,299
</Table>
See the accompanying notes to the financial statements.
108 Laudus Funds Annual Report
Financial Statements--Statement of Securities Sold Short continued
Laudus Rosenberg Value Long/Short Equity Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, PHOTOOPTICAL, MICROS & OFFICE
MACHINERY continued
4,200 Fargo Electronics, Inc. *........ $ 61,614
8,500 Immersion Corp. *................ 51,000
4,900 Interlink Electronics, Inc. *.... 31,752
5,400 LaserCard Corp. *................ 26,892
7,500 Maxtor Corp. *................... 39,900
4,100 Metrologic Instruments, Inc. *... 92,168
800 Mobility Electronics, Inc. *..... 5,592
12,644 Nam Tai Electronics, Inc. ....... 336,330
60 Qualstar Corp. *................. 245
50,200 Western Digital Corp. *.......... 640,050
------------
1,928,297
------------
PUBLISHING, BROADCASTING & CINEMA - 2.1%
17,600 aQuantive, Inc. *................ 194,832
5,400 Crown Media Holdings, Inc., Class
A *............................ 48,654
18,100 Dex Media, Inc. ................. 373,765
11,800 Dow Jones & Co., Inc. ........... 440,966
2,300 Fisher Communications, Inc. *.... 118,933
19,200 Journal Register Co. *........... 320,640
300 McClatchy Co., Class A........... 22,248
1,500 Meredith Corp. .................. 70,125
8,810 Pixar *.......................... 859,416
2,100 Quixote Corp. ................... 45,507
54 Salem Communications Corp., Class
A *............................ 1,112
17,200 Sinclair Broadcast Group, Inc.,
Class A........................ 138,116
4,400 Valassis Communications, Inc.
*.............................. 153,824
6,300 Young Broadcasting, Inc., Class A
*.............................. 54,432
------------
2,842,570
------------
REAL ESTATE DEVELOPMENT - 0.7%
10,900 Forest City Enterprises, Inc.,
Class A........................ 695,420
800 Griffin Land & Nurseries, Inc.
*.............................. 20,800
5,400 Reading International, Inc. *.... 38,070
4,700 Tejon Ranch Co. *................ 209,620
------------
963,910
------------
REAL ESTATE INVESTMENT TRUSTS - 10.2%
16,400 Arden Realty, Inc. .............. 555,140
11,800 Avalonbay Communities, Inc. ..... 789,302
14,700 BRE Properties, Inc., Class A.... 518,910
12,900 Camden Property Trust............ 606,687
17,800 CarrAmerica Realty Corp. ........ 561,590
26,600 Catellus Development Corp. ...... 708,890
16,700 CenterPoint Properties Trust..... 684,700
4,300 Duke Realty Corp. ............... 128,355
8,500 Essex Property Trust, Inc. ...... 585,990
14,500 Federal Realty Investment
Trust.......................... 701,075
21,200 General Growth Properties,
Inc. .......................... 722,920
25,700 Health Care Property Investors,
Inc. .......................... 603,179
10,900 Health Care REIT, Inc. .......... 348,800
200 Healthcare Realty Trust, Inc. ... 7,288
44,300 Host Marriott Corp. ............. 733,608
300 Liberty Property Trust........... 11,715
27,800 Plum Creek Timber Co. ........... 992,460
13,400 Post Properties, Inc. ........... 415,936
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, REAL ESTATE INVESTMENT
TRUSTS continued
28,400 ProLogis......................... $ 1,053,639
15,500 Shurgard Storage Centers, Inc.,
Class A........................ 635,190
5,900 Sun Communities, Inc. ........... 211,220
7,900 Tanger Factory Outlet Centers,
Inc. .......................... 173,800
15,700 The Mills Corp. ................. 830,530
3,700 Town & Country Trust............. 97,865
37,300 United Dominion Realty Trust,
Inc. .......................... 778,451
22,900 Ventas, Inc. .................... 571,584
1,000 Weingarten Realty Investors...... 34,510
------------
14,063,334
------------
RESTAURANTS, HOTELS & THEATERS - 2.2%
22,300 Applebee's International,
Inc. .......................... 614,588
7,800 Buca, Inc. *..................... 48,976
220 Champps Entertainment, Inc. *.... 1,973
2,230 Cosi, Inc. *..................... 15,164
27,500 Krispy Kreme Doughnuts, Inc. *... 209,825
1,000 Lakes Entertainment, Inc. *...... 18,000
13,600 Magna Entertainment Corp., Class
A *............................ 83,504
8,500 Multimedia Games, Inc. *......... 65,960
2,900 Nevada Gold & Casinos, Inc. *.... 37,120
800 Outback Steakhouse, Inc. ........ 36,632
14,100 Pinnacle Entertainment, Inc. *... 235,470
13,000 Regal Entertainment Group, Class
A.............................. 273,390
22,900 Ruby Tuesday, Inc. .............. 556,241
24,643 The Cheesecake Factory, Inc. *... 873,594
1,300 Westwood One, Inc. *............. 26,455
------------
3,096,892
------------
RETAIL - 5.9%
8,000 1-800-FLOWERS.COM, Inc., Class A
*.............................. 60,560
16,900 99 Cents Only Stores *........... 222,573
23,800 AnnTaylor Stores Corp. *......... 609,042
2,500 Cache, Inc. *.................... 33,875
32,400 Carmax, Inc. *................... 1,020,600
400 Charlotte Russe Holding, Inc.
*.............................. 5,168
2,700 Cost Plus, Inc. *................ 72,576
1,600 Design Within Reach, Inc. *...... 25,176
17,300 Family Dollar Stores, Inc. ...... 525,228
4,100 Gaiam, Inc. *.................... 22,714
4,900 Great Atlantic & Pacific Tea Co.
*.............................. 73,010
6,600 Group 1 Automotive, Inc. *....... 173,580
6,400 J. Jill Group, Inc. *............ 88,064
4,600 Kirkland's, Inc. *............... 50,876
538 Mothers Work, Inc. *............. 7,441
8,300 Pathmark Stores, Inc. *.......... 52,373
21,200 Payless ShoeSource, Inc. *....... 334,748
8,100 PETCO Animal Supplies, Inc. *.... 298,161
700 PETsMART, Inc. .................. 20,125
32,600 Pier 1 Imports, Inc. ............ 594,298
6,200 PriceSmart, Inc. *............... 45,508
31,609 Ross Stores, Inc. ............... 921,086
46,900 Saks, Inc. ...................... 846,545
4,200 Sharper Image Corp. *............ 69,762
22,600 Tiffany & Co. ................... 780,152
6,600 ValueVision Media, Inc., Class A
*.............................. 81,642
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 109
Financial Statements--Statement of Securities Sold Short continued
Laudus Rosenberg Value Long/Short Equity Fund
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, RETAIL continued
4,700 Whitehall Jewellers, Inc. *...... $ 33,370
10,300 Whole Foods Market, Inc. ........ 1,051,939
------------
8,120,192
------------
SOAPS & COSMETICS - 0.1%
600 Katy Industries, Inc. *.......... 2,280
21,300 Playtex Products, Inc. *......... 191,700
------------
193,980
------------
SOFTWARE - 6.1%
15,000 AMICAS, Inc. *................... 55,200
2,400 Blackboard, Inc. *............... 41,856
7,800 CACI International, Inc., Class A
*.............................. 430,794
19,500 Citrix Systems, Inc. *........... 464,490
6,000 CoStar Group, Inc. *............. 221,100
19,700 CSG Systems International, Inc.
*.............................. 320,913
1,400 Digital River, Inc. *............ 43,624
8,600 Fair Isaac Corp. ................ 296,184
31,500 GTECH Holdings Corp. ............ 741,195
15,900 Harris Interactive, Inc. *....... 73,299
115,725 Identix, Inc. *.................. 584,411
3,800 Imergent, Inc. *................. 37,278
6,500 Jupitermedia Corp. *............. 100,815
2,700 Kanbay International, Inc. *..... 55,242
900 Manhattan Associates, Inc. *..... 18,333
27,800 Mercury Interactive Corp. *...... 1,317,164
1,400 Merge Technologies, Inc. *....... 24,570
4,300 MicroStrategy, Inc., Class A *... 233,361
18,797 National Instruments Corp. ...... 508,459
13,400 NAVTEQ *......................... 580,890
2,600 Netiq Corp. *.................... 29,718
7,700 PC-Tel, Inc. *................... 56,672
25,000 Reynolds & Reynolds Co., Class
A.............................. 676,500
8,200 Secure Computing Corp. *......... 70,274
7,900 SM&A *........................... 65,254
8,000 Sohu.com, Inc. *................. 140,640
4,700 SS&C Technologies, Inc. ......... 107,160
</Table>
<Table>
<Caption>
SHARES VALUE
- -----------------------------------------------------------
COMMON STOCK, SOFTWARE continued
12,600 SupportSoft, Inc. *.............. $ 66,528
2,900 Syntel, Inc. .................... 51,330
6,200 Tradestation Group, Inc. *....... 37,448
5,686 Transaction Systems Architects,
Inc. *......................... 131,631
76,800 Unisys Corp. *................... 542,208
11,600 WebEx Communications, Inc. *..... 250,444
------------
8,374,985
------------
TEXTILES & APPAREL - 1.2%
19,400 Cintas Corp. .................... 801,414
6,003 Columbia Sportswear Co. *........ 319,540
9,500 Kellwood Co. .................... 273,505
6,000 Mossimo, Inc. *.................. 20,640
4,600 Oxford Industries, Inc. ......... 168,314
11,100 The Gymboree Corp. *............. 139,194
------------
1,722,607
------------
WHOLESALE - 2.5%
1,100 Accredo Health, Inc. *........... 48,851
5,600 Action Performance Companies,
Inc. .......................... 74,088
11,300 AmerisourceBergen Corp. ......... 647,377
2,606 D & K Healthcare Resources,
Inc. .......................... 21,812
208 Express Scripts, Inc. *.......... 18,136
13,839 Henry Schein, Inc. *............. 495,990
21,400 Ingram Micro, Inc., Class A *.... 356,738
24,700 OfficeMax, Inc. ................. 827,450
10,700 Performance Food Group Co. *..... 296,176
18,300 Tech Data Corp. *................ 678,198
------------
3,464,816
------------
TOTAL SECURITIES SOLD SHORT
(PROCEEDS $128,373,538) --
90.2%.......................... $124,324,451
============
</Table>
- ---------------
* Non-income producing security.
See the accompanying notes to the financial statements.
110 Laudus Funds Annual Report
(This Page Intentionally Left Blank)
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 111
Financial Statements
Statements of Assets and Liabilities as of 3/31/05
<Table>
<Caption>
LAUDUS LAUDUS
ROSENBERG ROSENBERG LAUDUS
U.S. LARGE U.S. LARGE ROSENBERG
CAPITALIZATION CAPITALIZATION GROWTH U.S. DISCOVERY
FUND FUND FUND
------------------------- --------------------- ----------------
ASSETS:
Total Investments, at cost(1)........... $40,525,508 $6,360,277 $280,259,909
=========== ========== ============
Investments, at value(1)................ $46,968,588 $6,878,974 $309,828,169
Repurchase agreements, at amortized
cost................................... 646,000 59,374 5,725,000
----------- ---------- ------------
Total Investments...................... 47,614,588 6,938,348 315,553,169
----------- ---------- ------------
Deposits with broker and custodian bank
for securities sold short.............. -- -- --
Cash.................................... 150 -- 43
Foreign currency, at value(2)........... -- -- --
Unrealized gain on foreign currency
contracts.............................. -- -- --
Dividends and interest receivable....... 53,338 5,431 324,598
Receivable for redemption fees.......... -- -- 1,950
Receivable for securities sold short.... -- -- --
Receivable for investments sold......... 115,615 -- 153,580
Reclaims receivable..................... -- -- --
Receivable from Manager................. -- 4,013 --
Prepaid expenses........................ 15,726 15,317 18,104
----------- ---------- ------------
Total Assets........................... 47,799,417 6,963,109 316,051,444
----------- ---------- ------------
LIABILITIES:
Securities sold short, proceeds......... $ -- $ -- $ --
=========== ========== ============
Securities sold short................... -- -- --
Unrealized loss on foreign currency
contracts.............................. -- -- --
Payable to custodian.................... -- -- --
Payable for investments purchased....... 384,861 6,982 800,651
Payable for return of collateral
received for securities loaned......... -- -- --
Accrued expenses and other liabilities:
Manager fees........................... 49,565 3,716 380,628
Transfer agent fees.................... 1,637 1,126 6,235
Distribution and shareholder service
fees................................... 471 404 11,195
Trustee's fees......................... 869 96 6,032
Other accrued expenses................. 16,825 1,384 118,322
----------- ---------- ------------
Total Liabilities...................... 454,228 13,708 1,323,063
----------- ---------- ------------
NET ASSETS.............................. $47,345,189 $6,949,401 $314,728,381
=========== ========== ============
NET ASSETS CONSIST OF:
Capital................................. $38,236,425 $7,466,838 $277,549,812
Undistributed net investment
income/(loss).......................... 106,524 4,721 --
Accumulated net realized gains/(losses)
on investments......................... 1,913,160 (1,100,229) 1,885,309
Net unrealized
appreciation/(depreciation) on
investments............................ 7,089,080 578,071 35,293,260
----------- ---------- ------------
NET ASSETS.............................. $47,345,189 $6,949,401 $314,728,381
=========== ========== ============
INSTITUTIONAL SHARES:
Net Assets.............................. $44,559,265 $5,055,899 $256,444,279
Shares Outstanding...................... 3,779,808 626,173 16,065,545
Net Asset Value, Offering Price and
Redemption Price per Share............. $ 11.79 $ 8.07 $ 15.96
=========== ========== ============
ADVISER SHARES:
Net Assets.............................. $ -- $ -- $ --
Shares Outstanding...................... -- -- --
Net Asset Value, Offering Price and
Redemption Price per Share............. $ -- $ -- $ --
=========== ========== ============
INVESTOR SHARES:
Net Assets.............................. $ 2,785,924 $1,893,502 $ 58,284,102
Shares Outstanding...................... 235,894 232,262 3,669,523
Net Asset Value, Offering Price and
Redemption Price per Share............. $ 11.81 $ 8.15 $ 15.88
=========== ========== ============
</Table>
(1) Includes securities on loan of $22,865,038 for the Laudus Rosenberg U.S.
Small Capitalization Fund.
(2) Foreign currency at cost for Laudus Rosenberg International Equity Fund,
Laudus Rosenberg International Small Capitalization Fund, and Laudus
Rosenberg Global Long/Short Equity Fund was $100,218, $21,526,371 and
($3,851) respectively.
See the accompanying notes to the financial statements.
112 Laudus Funds Annual Report
Financial Statements--Statements of Assets and Liabilities continued
<Table>
<Caption>
LAUDUS LAUDUS LAUDUS
LAUDUS ROSENBERG ROSENBERG ROSENBERG
ROSENBERG LAUDUS INTERNATIONAL U.S. LARGE/MID GLOBAL
U.S. SMALL ROSENBERG SMALL CAPITALIZATION LONG/SHORT
CAPITALIZATION INTERNATIONAL CAPITALIZATION LONG/SHORT EQUITY
FUND EQUITY FUND FUND EQUITY FUND FUND
-------------- ------------- -------------- -------------- -----------
ASSETS:
Total Investments, at cost (1).......... $1,012,679,852 $24,711,483 $550,457,059 $21,169,164 $19,239,852
============== =========== ============ =========== ===========
Total Investments, at value (1)......... $1,303,206,546 $26,483,596 $612,223,826 $23,719,697 $18,280,773
Repurchase agreements, at amortized
cost................................... 9,053,000 1,815,000 13,576,000 1,276,426 4,017,826
-------------- ----------- ------------ ----------- -----------
Total Investments...................... 1,312,259,546 28,298,596 625,799,826 24,996,123 22,298,599
-------------- ----------- ------------ ----------- -----------
Deposits with broker and custodian bank
for securities sold short.............. -- -- -- 23,910,799 16,690,585
Cash.................................... 5,299 928 135 -- --
Foreign currency, at value (2).......... -- 99,287 15,424,381 -- --
Unrealized gain on foreign currency
contracts.............................. -- -- 20,255 -- --
Dividends and interest receivable....... 1,074,249 132,685 1,408,647 54,504 44,613
Receivable for capital shares issued.... 98 6,072 24,879 2,544 2
Receivable for securities sold short.... -- -- -- 49,491 403,080
Receivable for investments sold......... 2,600,791 84,323 8,805,664 192,272 115,004
Reclaims receivable..................... -- 5,693 42,265 -- 6,357
Receivable from Manager................. -- 2,943 -- -- --
Prepaid expenses........................ 64,060 16,871 39,713 11,189 9,377
-------------- ----------- ------------ ----------- -----------
Total Assets........................... 1,316,004,043 28,647,398 651,565,765 49,216,922 39,567,617
-------------- ----------- ------------ ----------- -----------
LIABILITIES:
Securities sold short, proceeds......... $ -- $ -- $ -- $23,969,459 $17,928,626
============== =========== ============ =========== ===========
Securities sold short................... -- -- -- 23,758,002 17,985,077
Unrealized loss on foreign currency
contract............................... -- -- 1,021 -- --
Payable to custodian.................... -- -- -- -- 3,476
Payable for investments purchased....... 2,523,947 17,392 24,003,769 243,836 277,050
Payable for return of collateral
received for securities loaned......... 23,181,539 -- -- -- --
ACCRUED EXPENSES AND OTHER LIABILITIES:
Manager fees........................... 2,537,730 15,043 724,039 33,535 33,551
Transfer agent fees.................... 38,348 2,263 26,624 2,714 2,058
Distribution fees...................... 60,859 2,615 75,091 2,668 1,070
Trustee's fees......................... 26,554 449 11,175 451 401
Other accrued expenses................. 379,073 24,441 311,859 39,729 31,515
-------------- ----------- ------------ ----------- -----------
Total Liabilities...................... 28,748,050 62,203 25,153,578 24,080,935 18,334,198
-------------- ----------- ------------ ----------- -----------
NET ASSETS.............................. $1,287,255,993 $28,585,195 $626,412,187 $25,135,987 $21,233,419
============== =========== ============ =========== ===========
NET ASSETS CONSIST OF:
Capital................................. $ 920,478,646 $27,344,578 $537,290,011 $25,686,765 $20,797,829
Undistributed net investment
income/(loss).......................... -- 47,419 540,842 -- (7,726)
Accumulated net realized gains/(losses)
on investments......................... 67,197,653 (2,392,542) 13,290,211 (4,589,194) (2,560,069)
Net unrealized
appreciation/(depreciation) on
investments............................ 299,579,694 3,585,740 75,291,123 4,038,416 3,003,385
-------------- ----------- ------------ ----------- -----------
NET ASSETS.............................. $1,287,255,993 $28,585,195 $626,412,187 $25,135,987 $21,233,419
============== =========== ============ =========== ===========
INSTITUTIONAL SHARES:
Net Assets.............................. $ 948,225,230 $16,094,018 $270,645,894 $12,312,344 $15,139,816
Shares Outstanding...................... 70,220,310 1,671,934 16,020,366 1,076,645 1,303,123
Net Asset Value, Offering Price and
Redemption Price per Share............. $ 13.50 $ 9.63 $ 16.89 $ 11.44 $ 11.62
============== =========== ============ =========== ===========
ADVISER SHARES:
Net Assets.............................. $ 41,103,648 $ -- $ -- $ -- $ --
Shares Outstanding...................... 3,071,456 -- -- -- --
Net Asset Value, Offering Price and
Redemption Price per Share............. $ 13.38 $ -- $ -- $ -- $ --
============== =========== ============ =========== ===========
INVESTOR SHARES:
Net Assets.............................. $ 297,927,115 $12,491,177 $355,766,293 $12,823,643 $ 6,093,603
Shares Outstanding...................... 22,398,138 1,299,496 21,258,840 1,118,777 530,431
Net Asset Value, Offering Price and
Redemption Price per Share............. $ 13.30 $ 9.61 $ 16.73 $ 11.46 $ 11.49
============== =========== ============ =========== ===========
<Caption>
LAUDUS
ROSENBERG
VALUE
LONG/SHORT
EQUITY FUND
------------
ASSETS:
Total Investments, at cost (1).......... $115,483,057
============
Total Investments, at value (1)......... $123,944,529
Repurchase agreements, at amortized
cost................................... 14,181,492
------------
Total Investments...................... 138,126,021
------------
Deposits with broker and custodian bank
for securities sold short.............. 124,829,370
Cash.................................... --
Foreign currency, at value (2).......... --
Unrealized gain on foreign currency
contracts.............................. --
Dividends and interest receivable....... 224,166
Receivable for capital shares issued.... 1,256
Receivable for securities sold short.... 490,271
Receivable for investments sold......... 77,104
Reclaims receivable..................... --
Receivable from Manager................. --
Prepaid expenses........................ 20,887
------------
Total Assets........................... 263,769,075
------------
LIABILITIES:
Securities sold short, proceeds......... $128,373,538
============
Securities sold short................... 124,324,451
Unrealized loss on foreign currency
contract............................... --
Payable to custodian.................... --
Payable for investments purchased....... 1,084,128
Payable for return of collateral
received for securities loaned......... --
ACCRUED EXPENSES AND OTHER LIABILITIES:
Manager fees........................... 280,028
Transfer agent fees.................... 4,899
Distribution fees...................... 6,797
Trustee's fees......................... 2,458
Other accrued expenses................. 162,440
------------
Total Liabilities...................... 125,865,201
------------
NET ASSETS.............................. $137,903,874
============
NET ASSETS CONSIST OF:
Capital................................. $171,419,043
Undistributed net investment
income/(loss).......................... --
Accumulated net realized gains/(losses)
on investments......................... (60,207,220)
Net unrealized
appreciation/(depreciation) on
investments............................ 26,692,051
------------
NET ASSETS.............................. $137,903,874
============
INSTITUTIONAL SHARES:
Net Assets.............................. $102,973,787
Shares Outstanding...................... 9,796,856
Net Asset Value, Offering Price and
Redemption Price per Share............. $ 10.51
============
ADVISER SHARES:
Net Assets.............................. $ --
Shares Outstanding...................... --
Net Asset Value, Offering Price and
Redemption Price per Share............. $ --
============
INVESTOR SHARES:
Net Assets.............................. $ 34,930,087
Shares Outstanding...................... 3,356,300
Net Asset Value, Offering Price and
Redemption Price per Share............. $ 10.41
============
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 113
Financial Statements
Statements of Operations for the year ended 3/31/05
<Table>
<Caption>
LAUDUS
LAUDUS ROSENBERG
ROSENBERG U.S. LARGE LAUDUS
U.S. LARGE CAPITALIZATION ROSENBERG
CAPITALIZATION GROWTH U.S. DISCOVERY
FUND FUND FUND
-------------- -------------- --------------
INVESTMENT INCOME:
Dividends(1).......................... $ 878,812 $ 99,148 $ 2,473,525
Interest.............................. 529 1,110 38,258
Securities lending.................... -- -- --
---------- -------- -----------
Total investment income............... 879,341 100,258 2,511,783
---------- -------- -----------
EXPENSES:
Manager fees.......................... 338,700 49,494 1,670,914
Administration fees................... 27,074 3,955 108,440
Distribution and shareholder service
fees (Investor Shares).............. 3,005 4,181 38,410
Service fees (Adviser Shares)......... -- -- --
Professional fees..................... 16,346 6,169 68,615
Custodian fees........................ 67,831 3,508 150,346
Interest expense...................... -- -- --
Fund accounting fees.................. 43,404 43,638 54,787
Registration and filing fees.......... 25,700 26,551 33,778
Transfer agent fees................... 15,512 18,585 36,774
Trustees' fees........................ 4,835 1,116 17,164
Trustee Retirement Plan............... 3,223 471 21,387
Dividend expense for securities sold
short............................... -- -- --
Other expenses........................ 13,786 2,709 73,387
---------- -------- -----------
Total expenses before
waivers/reimbursements............ 559,416 160,377 2,274,002
Less expenses waived/reimbursed by
the Manager....................... (108,272) (89,616) (103,889)
---------- -------- -----------
Net expenses........................ 451,144 70,761 2,170,113
---------- -------- -----------
NET INVESTMENT INCOME/(LOSS).......... 428,197 29,497 341,670
---------- -------- -----------
REALIZED AND UNREALIZED GAINS/(LOSSES)
ON INVESTMENTS
Net realized gains/(losses) on
securities and foreign currency
transactions........................ 2,535,289 (125,007) 2,091,732
Net realized gains/(losses) on
securities sold short............... -- -- --
Change in unrealized
appreciation/(depreciation) on
investments......................... 1,367,953 322,230 16,673,803
---------- -------- -----------
NET REALIZED AND UNREALIZED
GAINS/(LOSSES) ON INVESTMENTS....... 3,903,242 197,223 18,765,535
---------- -------- -----------
CHANGE IN NET ASSETS RESULTING FROM
OPERATIONS............................ $4,331,439 $226,720 $19,107,205
========== ======== ===========
</Table>
(1 )Net of foreign withholding tax for Laudus Rosenberg International Equity
Fund, Laudus Rosenberg International Small Capitalization Fund, and Laudus
Rosenberg Global Long/Short Equity Fund of $46,654, $631,045, and $16,820
respectively.
114 Laudus Funds Annual Report
See the accompanying notes to the financial statements.
Financial Statements--Statements of Operations continued
<Table>
<Caption>
LAUDUS LAUDUS
LAUDUS ROSENBERG ROSENBERG
ROSENBERG LAUDUS INTERNATIONAL U.S. LARGE/MID
U.S. SMALL ROSENBERG SMALL CAPITALIZATION
CAPITALIZATION INTERNATIONAL CAPITALIZATION LONG/SHORT
FUND EQUITY FUND FUND EQUITY FUND
-------------- ------------- ------------------- --------------
INVESTMENT INCOME:
Dividends (1).......................... $ 15,793,977 $ 402,908 $ 5,161,323 $ 377,381
Interest............................... 96,594 7,052 172,459 357,820
Securities lending..................... 433,414 -- -- --
------------ ---------- ----------- -----------
Total investment income................ 16,323,985 409,960 5,333,782 735,201
------------ ---------- ----------- -----------
EXPENSES:
Manager fees........................... 11,444,184 149,977 2,650,943 257,543
Administration fees.................... 762,324 10,347 152,925 15,525
Distribution and shareholder service
fees (Investor Shares)................. 678,376 14,406 373,320 24,607
Service fees (Adviser Shares).......... 86,756 -- -- --
Professional fees...................... 389,868 5,287 116,493 6,684
Custodian fees......................... 336,767 169,893 755,893 12,237
....................................... -- -- -- --
Fund accounting fees................... 44,550 85,989 142,092 42,952
Registration and filing fees........... 69,696 27,657 43,934 29,681
Transfer agent fees.................... 444,913 19,506 180,894 26,006
Trustees' fees......................... 99,842 -- 23,188 1,925
Trustee Retirement Plan................ 87,858 1,944 42,506 1,708
Dividend expense for securities sold
short 1................................ -- -- -- 433,845
Other expenses......................... 433,491 4,975 126,475 10,204
------------ ---------- ----------- -----------
Total expenses before
waivers/reimbursements............... 14,878,625 489,981 4,608,663 862,917
Less expenses waived/reimbursed by
the Manager.......................... -- (231,815) (152,631) (73,659)
------------ ---------- ----------- -----------
Net expenses......................... 14,878,625 258,166 4,456,032 789,258
------------ ---------- ----------- -----------
NET INVESTMENT INCOME/(LOSS)........... 1,445,360 151,794 877,750 (54,057)
------------ ---------- ----------- -----------
REALIZED AND UNREALIZED GAINS/(LOSSES)
ON INVESTMENTS
Net realized gains/(losses) on
securities and foreign currency
transactions........................... 150,828,583 1,113,542 18,811,743 2,334,582
Net realized gains/(losses) on
securities sold short.................. -- -- -- (2,390,941)
Change in unrealized
appreciation/(depreciation) on
investments............................ (36,465,193) 1,376,163 49,970,266 1,367,755
------------ ---------- ----------- -----------
NET REALIZED AND UNREALIZED
GAINS/(LOSSES) ON INVESTMENTS.......... 114,363,390 2,489,705 68,782,009 1,311,396
------------ ---------- ----------- -----------
CHANGE IN NET ASSETS RESULTING FROM
OPERATIONS............................. $115,808,750 $2,641,499 $69,659,759 $ 1,257,339
============ ========== =========== ===========
<Caption>
LAUDUS LAUDUS
ROSENBERG ROSENBERG
GLOBAL VALUE
LONG/SHORT LONG/SHORT
EQUITY EQUITY
FUND FUND
----------- ------------
INVESTMENT INCOME:
Dividends (1).......................... $ 275,284 $ 1,555,110
Interest............................... 247,416 1,431,173
Securities lending..................... -- --
----------- ------------
Total investment income................ 522,700 2,986,283
----------- ------------
EXPENSES:
Manager fees........................... 285,300 1,655,625
Administration fees.................... 11,446 66,352
Distribution and shareholder service
fees (Investor Shares)................. 14,869 61,916
Service fees (Adviser Shares).......... -- --
Professional fees...................... 8,869 34,390
Custodian fees......................... 21,029 44,404
....................................... 29,536 --
Fund accounting fees................... 100,775 57,147
Registration and filing fees........... 28,715 35,973
Transfer agent fees.................... 22,495 52,118
Trustees' fees......................... 1,906 7,395
Trustee Retirement Plan................ 1,445 9,384
Dividend expense for securities sold
short 1................................ 323,491 1,366,379
Other expenses......................... 7,541 40,839
----------- ------------
Total expenses before
waivers/reimbursements............... 857,417 3,431,922
Less expenses waived/reimbursed by
the Manager.......................... (104,929) (65,684)
----------- ------------
Net expenses......................... 752,488 3,366,238
----------- ------------
NET INVESTMENT INCOME/(LOSS)........... (229,788) (379,955)
----------- ------------
REALIZED AND UNREALIZED GAINS/(LOSSES)
ON INVESTMENTS
Net realized gains/(losses) on
securities and foreign currency
transactions........................... 2,065,218 22,479,931
Net realized gains/(losses) on
securities sold short.................. (2,265,019) (14,670,756)
Change in unrealized
appreciation/(depreciation) on
investments............................ 835,304 (941,013)
----------- ------------
NET REALIZED AND UNREALIZED
GAINS/(LOSSES) ON INVESTMENTS.......... 635,503 6,868,162
----------- ------------
CHANGE IN NET ASSETS RESULTING FROM
OPERATIONS............................. $ 405,715 $ 6,488,207
=========== ============
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 115
Financial Statements
Statements of Changes in Net Assets
<Table>
<Caption>
LAUDUS
LAUDUS ROSENBERG
ROSENBERG U.S. LARGE
U.S. LARGE CAPITALIZATION
CAPITALIZATION GROWTH
FUND FUND
-------------------------- --------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2005 2004 2005 2004
----------- ----------- ----------- -----------
OPERATIONS:
Net investment income/(loss)........... $ 428,197 $ 192,006 $ 29,497 $ 39,506
Net realized gains/(losses) from
investments............................ 2,535,289 1,139,080 (125,007) 399,742
Change in unrealized
appreciation/(depreciation) from
investments............................ 1,367,953 6,511,687 322,230 1,083,100
----------- ----------- ----------- -----------
Change in net assets resulting from
operations............................ 4,331,439 7,842,773 226,720 1,522,348
----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Institutional Shares.................. (377,788) (145,000) (24,040) (35,148)
Adviser Shares........................ -- -- -- --
Investor Shares....................... (7,542) -- (4,158) (9,852)
----------- ----------- ----------- -----------
(385,330) (145,000) (28,198) (45,000)
----------- ----------- ----------- -----------
Net realized gains on investments
Institutional Shares.................. (343,706) -- -- --
Adviser Shares........................ -- -- -- --
Investor Shares....................... (9,148) -- -- --
----------- ----------- ----------- -----------
(352,854) -- -- --
----------- ----------- ----------- -----------
Change in net assets resulting from
distributions......................... (738,184) (145,000) (28,198) (45,000)
----------- ----------- ----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued
Institutional Shares.................. 2,968,344 26,303,426 4,317,988 640,366
Adviser Shares........................ -- -- -- --
Investor Shares(1).................... 2,321,290 935,221 1,084,265 3,381,507
----------- ----------- ----------- -----------
5,289,634 27,238,647 5,402,253 4,021,873
----------- ----------- ----------- -----------
Distributions reinvested
Institutional Shares.................. 521,743 106,059 4,821 4,949
Adviser Shares........................ -- -- -- --
Investor Shares....................... 16,117 -- 4,144 9,778
----------- ----------- ----------- -----------
537,860 106,059 8,965 14,727
----------- ----------- ----------- -----------
Value of shares redeemed
Institutional Shares.................. (6,720,579) (4,165,958) (4,415,905) (143,935)
Adviser Shares........................ -- -- -- --
Investor Shares....................... (246,026) (1,132,001) (729,570) (3,172,036)
----------- ----------- ----------- -----------
(6,966,605) (5,297,959) (5,145,475) (3,315,971)
----------- ----------- ----------- -----------
Change in net assets from capital
transactions.......................... (1,139,111) 22,046,747 265,743 720,629
----------- ----------- ----------- -----------
Change in net assets.................... 2,454,144 29,744,520 464,265 2,197,977
NET ASSETS:
Beginning of period.................... 44,891,045 15,146,525 6,485,136 4,287,159
----------- ----------- ----------- -----------
End of period.......................... $47,345,189 $44,891,045 $ 6,949,401 $ 6,485,136
=========== =========== =========== ===========
Undistributed net investment
income/(loss).......................... $ 106,524 $ 63,657 $ 4,721 $ 3,422
=========== =========== =========== ===========
</Table>
(1) For the year ended March 31, 2004, these amounts include $328,770,
$1,685,314, $2,661,232, $0, and $144,247, respectively, of net assets
transferred from merger of Class A, B and C.
See the accompanying notes to the financial statements.
116 Laudus Funds Annual Report
Financial Statements--Statements of Changes in Net Assets continued
<Table>
<Caption>
LAUDUS ROSENBERG LAUDUS ROSENBERG
U.S. DISCOVERY FUND U.S. SMALL CAPITALIZATION FUND
----------------------------- ---------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2005 2004 2005 2004
------------ ------------ -------------- --------------
OPERATIONS:
Net investment income/(loss)........... $ 341,670 $ 272,983 $ 1,445,360 $ 3,699,265
Net realized gains/(losses) from
investments............................ 2,091,732 3,757,728 150,828,583 109,687,466
Change in unrealized
appreciation/(depreciation) from
investments............................ 16,673,803 17,708,984 (36,465,193) 302,417,738
------------ ------------ -------------- --------------
Change in net assets resulting from
operations............................ 19,107,205 21,739,695 115,808,750 415,804,469
------------ ------------ -------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Institutional Shares.................. (497,171) (227,632) (2,204,683) (2,738,101)
Adviser Shares........................ -- -- -- (61,018)
Investor Shares....................... (25,025) -- -- (366,164)
------------ ------------ -------------- --------------
(522,196) (227,632) (2,204,683) (3,165,283)
------------ ------------ -------------- --------------
Net Realized Gains on investments
Institutional Shares.................. (2,267,336) (657,949) (107,378,123) (12,762,114)
Adviser Shares........................ -- -- (4,547,584) (648,398)
Investor Shares....................... (191,970) (27,064) (32,261,234) (3,678,754)
------------ ------------ -------------- --------------
(2,459,306) (685,013) (144,186,941) (17,089,266)
------------ ------------ -------------- --------------
Change in net assets resulting from
distributions......................... (2,981,502) (912,645) (146,391,624) (20,254,549)
------------ ------------ -------------- --------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued
Institutional Shares.................. 155,501,124 64,824,794 153,900,191 295,160,488
Adviser Shares........................ -- -- 6,390,720 17,905,946
Investor Shares (1)................... 57,871,754 4,886,800 67,774,260 91,491,056
------------ ------------ -------------- --------------
213,372,878 69,711,594 228,065,171 404,557,490
------------ ------------ -------------- --------------
Distributions reinvested
Institutional Shares.................. 2,763,979 885,580 105,539,726 14,680,519
Adviser Shares........................ -- -- 3,355,703 546,416
Investor Shares....................... 216,323 26,026 28,286,080 3,748,227
------------ ------------ -------------- --------------
2,980,302 911,606 137,181,509 18,975,162
------------ ------------ -------------- --------------
Value of shares redeemed
Institutional Shares.................. (15,094,664) (5,950,504) (243,438,336) (140,629,196)
Adviser Shares........................ -- -- (11,572,652) (15,236,682)
Investor Shares....................... (3,313,776) (5,421,878) (63,211,612) (41,688,029)
------------ ------------ -------------- --------------
(18,408,440) (11,372,382) (318,222,600) (197,553,907)
------------ ------------ -------------- --------------
Change in net assets from capital
transactions.......................... 197,944,740 59,250,818 47,024,080 225,978,745
------------ ------------ -------------- --------------
Change in net assets.................... 214,070,443 80,077,868 16,441,206 621,528,665
NET ASSETS:
Beginning of period.................... 100,657,938 20,580,070 1,270,814,787 649,286,122
------------ ------------ -------------- --------------
End of period.......................... $314,728,381 $100,657,938 $1,287,255,993 $1,270,814,787
============ ============ ============== ==============
Undistributed net investment
income/(loss).......................... $ -- $ 8,100 $ -- $ --
============ ============ ============== ==============
<Caption>
LAUDUS ROSENBERG
INTERNATIONAL EQUITY FUND
---------------------------
YEAR ENDED YEAR ENDED
MARCH 31, MARCH 31,
2005 2004
----------- -----------
OPERATIONS:
Net investment income/(loss)........... $ 151,794 $ 99,583
Net realized gains/(losses) from
investments............................ 1,113,542 596,943
Change in unrealized
appreciation/(depreciation) from
investments............................ 1,376,163 3,224,167
----------- -----------
Change in net assets resulting from
operations............................ 2,641,499 3,920,693
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Institutional Shares.................. (69,286) (95,999)
Adviser Shares........................ -- --
Investor Shares....................... (20,846) (24,001)
----------- -----------
(90,132) (120,000)
----------- -----------
Net Realized Gains on investments
Institutional Shares.................. -- --
Adviser Shares........................ -- --
Investor Shares....................... -- --
----------- -----------
-- --
----------- -----------
Change in net assets resulting from
distributions......................... (90,132) (120,000)
----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued
Institutional Shares.................. 13,795,042 2,839,168
Adviser Shares........................ -- --
Investor Shares (1)................... 11,035,677 5,527,391
----------- -----------
24,830,719 8,366,559
----------- -----------
Distributions reinvested
Institutional Shares.................. 69,286 12,844
Adviser Shares........................ -- --
Investor Shares....................... 20,846 24,000
----------- -----------
90,132 36,844
----------- -----------
Value of shares redeemed
Institutional Shares.................. (9,404,551) (2,639,311)
Adviser Shares........................ -- --
Investor Shares....................... (2,277,154) (3,171,694)
----------- -----------
(11,681,705) (5,811,005)
----------- -----------
Change in net assets from capital
transactions.......................... 13,239,146 2,592,398
----------- -----------
Change in net assets.................... 15,790,513 6,393,091
NET ASSETS:
Beginning of period.................... 12,794,682 6,401,591
----------- -----------
End of period.......................... $28,585,195 $12,794,682
=========== ===========
Undistributed net investment
income/(loss).......................... $ 47,419 $ 32,254
=========== ===========
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 117
Financial Statements
Statements of Changes in Net Assets continued
<Table>
<Caption>
LAUDUS
ROSENBERG
INTERNATIONAL
SMALL
CAPITALIZATION
FUND
----------------------------
YEAR ENDED YEAR ENDED
MARCH 31, MARCH 31,
2005 2004
------------ ------------
OPERATIONS:
Net investment income/(loss)........... $ 877,750 $ 411,266
Net realized gains/(losses) from
investments............................ 18,811,743 16,047,432
Change in unrealized
appreciation/(depreciation) from
investments............................ 49,970,266 27,962,501
------------ ------------
Change in net assets resulting from
operations............................ 69,659,759 44,421,199
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Institutional Shares.................. (391,031) (375,451)
Adviser Shares........................ -- --
Investor Shares....................... (208,630) (419,507)
------------ ------------
(599,661) (794,958)
------------ ------------
Net realized gains on investments
Institutional Shares.................. (5,437,032) --
Adviser Shares........................ -- --
Investor Shares....................... (6,811,538) --
------------ ------------
(12,248,570) --
------------ ------------
Change in net assets resulting from
distributions......................... (12,848,231) (794,958)
------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued
Institutional Shares.................. 211,092,897 45,655,846
Adviser Shares........................ -- --
Investor Shares(1).................... 317,506,524 107,637,853
------------ ------------
528,599,421 153,293,699
------------ ------------
Distributions reinvested
Institutional Shares.................. 5,659,036 373,024
Adviser Shares........................ -- --
Investor Shares....................... 6,658,840 392,356
------------ ------------
12,317,876 765,380
------------ ------------
Value of shares redeemed
Institutional Shares.................. (41,730,026) (17,488,573)
Adviser Shares........................ -- --
Investor Shares....................... (82,747,971) (64,509,072)
------------ ------------
(124,477,997) (81,997,645)
------------ ------------
Change in net assets from capital
transactions.......................... 416,439,300 72,061,434
------------ ------------
Change in net assets.................... 473,250,828 115,687,675
NET ASSETS:
Beginning of period.................... 153,161,359 37,473,684
------------ ------------
End of period.......................... $626,412,187 $153,161,359
============ ============
Undistributed net investment
income/(loss).......................... $ 540,842 $ 303,989
============ ============
</Table>
(1) For the year ended March 31, 2004, these amounts include $675,984,
$1,027,288, $877,099, and $3,224,089 respectively, of net assets transferred
from merger of Class A, B and C.
See the accompanying notes to the financial statements.
118 Laudus Funds Annual Report
Financial Statements--Statements of Changes in Net Assets continued
<Table>
<Caption>
LAUDUS ROSENBERG
U.S. LARGE/MID CAPITALIZATION LAUDUS ROSENBERG
LONG/SHORT EQUITY FUND GLOBAL LONG/SHORT EQUITY FUND
------------------------------ ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2005 2004 2005 2004
------------ ------------- ------------ -------------
OPERATIONS:
Net investment income/(loss)........... $ (54,057) $ (236,828) $ (229,788) $ (278,630)
Net realized gains/(losses) from
investments............................ (56,359) (2,883,851) (199,801) (949,522)
Change in unrealized
appreciation/(depreciation) from
investments............................ 1,367,755 168,285 835,304 (8,337)
----------- ------------ ----------- ------------
Change in net assets resulting from
operations............................ 1,257,339 (2,952,394) 405,715 (1,236,489)
----------- ------------ ----------- ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Institutional Shares.................. -- -- -- --
Adviser Shares........................ -- -- -- --
Investor Shares....................... -- -- -- --
----------- ------------ ----------- ------------
-- -- -- --
----------- ------------ ----------- ------------
Net realized gains on investments
Institutional Shares.................. -- -- -- --
Adviser Shares........................ -- -- -- --
Investor Shares....................... -- -- -- --
----------- ------------ ----------- ------------
-- -- -- --
----------- ------------ ----------- ------------
Change in net assets resulting from
distributions......................... -- -- -- --
----------- ------------ ----------- ------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued
Institutional Shares.................. 1,739,704 7,920,308 4,768,663 889,684
Adviser Shares........................ -- -- -- --
Investor Shares (1)................... 9,325,305 13,626,544 3,302,678 9,802,774
----------- ------------ ----------- ------------
11,065,009 21,546,852 8,071,341 10,692,458
----------- ------------ ----------- ------------
Distributions reinvested
Institutional Shares.................. -- -- -- --
Adviser Shares........................ -- -- -- --
Investor Shares....................... -- -- -- --
----------- ------------ ----------- ------------
-- -- -- --
----------- ------------ ----------- ------------
Value of shares redeemed
Institutional Shares................... (10,458,623) (12,488,156) (2,528,093) (1,200,772)
Adviser Shares......................... -- -- -- --
Investor Shares........................ (5,824,603) (20,608,921) (5,776,482) (10,630,055)
----------- ------------ ----------- ------------
(16,283,226) (33,097,077) (8,304,575) (11,830,827)
----------- ------------ ----------- ------------
Change in net assets from capital
transactions........................... (5,218,217) (11,550,225) (233,234) (1,138,369)
----------- ------------ ----------- ------------
Change in net assets.................... (3,960,878) (14,502,619) 172,481 (2,374,858)
NET ASSETS:
Beginning of period.................... 29,096,865 43,599,484 21,060,938 23,435,796
----------- ------------ ----------- ------------
End of period.......................... $25,135,987 $ 29,096,865 $21,233,419 $ 21,060,938
=========== ============ =========== ============
Undistributed net investment
income/(loss).......................... $ -- $ -- $ (7,726) $ (3,044)
=========== ============ =========== ============
<Caption>
LAUDUS ROSENBERG
VALUE LONG/SHORT EQUITY FUND
-----------------------------
YEAR ENDED YEAR ENDED
MARCH 31, MARCH 31,
2005 2004
------------ ------------
OPERATIONS:
Net investment income/(loss)........... $ (379,955) $ (666,158)
Net realized gains/(losses) from
investments............................ 7,809,175 (15,565,330)
Change in unrealized
appreciation/(depreciation) from
investments............................ (941,013) 8,090,528
------------ ------------
Change in net assets resulting from
operations............................ 6,488,207 (8,140,960)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Institutional Shares.................. -- --
Adviser Shares........................ -- --
Investor Shares....................... -- --
------------ ------------
-- --
------------ ------------
Net realized gains on investments
Institutional Shares.................. -- --
Adviser Shares........................ -- --
Investor Shares....................... -- --
------------ ------------
-- --
------------ ------------
Change in net assets resulting from
distributions......................... -- --
------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued
Institutional Shares.................. 55,855,567 27,701,314
Adviser Shares........................ -- --
Investor Shares (1)................... 27,679,659 54,856,336
------------ ------------
83,535,226 82,557,650
------------ ------------
Distributions reinvested
Institutional Shares.................. -- --
Adviser Shares........................ -- --
Investor Shares....................... -- --
------------ ------------
-- --
------------ ------------
Value of shares redeemed
Institutional Shares................... (53,731,082) (19,401,150)
Adviser Shares......................... -- --
Investor Shares........................ (28,010,140) (60,287,393)
------------ ------------
(81,741,222) (79,688,543)
------------ ------------
Change in net assets from capital
transactions........................... 1,794,004 2,869,107
------------ ------------
Change in net assets.................... 8,282,211 (5,271,853)
NET ASSETS:
Beginning of period.................... 129,621,663 134,893,516
------------ ------------
End of period.......................... $137,903,874 $129,621,663
============ ============
Undistributed net investment
income/(loss).......................... $ -- $ --
============ ============
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 119
Financial Statements
Statements of Changes in Net Assets continued
<Table>
<Caption>
LAUDUS ROSENBERG LAUDUS ROSENBERG
U.S. LARGE U.S. LARGE
CAPITALIZATION CAPITALIZATION
FUND GROWTH FUND
------------------------ ------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2005 2004 2005 2004
---------- ---------- ---------- ----------
SHARES SOLD:
Institutional.......................... 273,900 2,704,343 527,132 84,689
Adviser................................ -- -- -- --
Investor(1)............................ 202,406 97,056 137,256 464,048
-------- --------- -------- --------
476,306 2,801,399 664,388 548,737
-------- --------- -------- --------
ISSUED UPON REINVESTMENT OF
DISTRIBUTIONS:
Institutional.......................... 45,290 10,287 590 667
Adviser................................ -- -- -- --
Investor............................... 1,394 -- 502 1,302
-------- --------- -------- --------
46,684 10,287 1,092 1,969
-------- --------- -------- --------
SHARES REDEEMED:
Institutional.......................... (597,178) (404,698) (540,385) (20,723)
Adviser................................ -- -- -- --
Investor............................... (21,732) (123,660) (92,319) (425,533)
-------- --------- -------- --------
(618,910) (528,358) (632,704) (446,256)
-------- --------- -------- --------
CHANGE IN SHARES:
Institutional.......................... (277,988) 2,309,932 (12,663) 64,633
Adviser................................ -- -- -- --
Investor............................... 182,068 (26,402) 45,439 39,817
-------- --------- -------- --------
(95,920) 2,283,328 32,776 104,450
======== ========= ======== ========
</Table>
(1) For the year ended March 31, 2004 these amounts include 32,335, 227,704,
201,796, 0, and 19,321, respectively, of shares transferred from merger of
Class A, B, and C.
See the accompanying notes to the financial statements.
120 Laudus Funds Annual Report
Financial Statements--Statements of Changes in Net Assets continued
<Table>
<Caption>
LAUDUS ROSENBERG LAUDUS ROSENBERG LAUDUS ROSENBERG
U.S. DISCOVERY U.S. SMALL CAPITALIZATION INTERNATIONAL EQUITY
FUND FUND FUND
------------------------- --------------------------- -------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2005 2004 2005 2004 2005 2004
---------- ---------- ----------- ----------- ---------- ----------
SHARES SOLD:
Institutional.......................... 10,223,633 5,114,634 11,285,927 25,130,029 1,559,874 419,994
Adviser................................ -- -- 474,733 1,536,674 -- --
Investor 1............................. 3,695,403 377,738 5,051,312 7,824,786 1,213,144 766,676
---------- --------- ----------- ----------- ---------- ---------
13,919,036 5,492,372 16,811,972 34,491,489 2,773,018 1,186,670
---------- --------- ----------- ----------- ---------- ---------
ISSUED UPON REINVESTMENT OF
DISTRIBUTIONS:
Institutional.......................... 175,938 66,039 7,783,166 1,164,197 7,547 1,675
Adviser................................ -- -- 249,495 43,643 -- --
Investor............................... 13,823 1,945 2,114,057 300,580 2,271 3,121
---------- --------- ----------- ----------- ---------- ---------
189,761 67,984 10,146,718 1,508,420 9,818 4,796
---------- --------- ----------- ----------- ---------- ---------
SHARES REDEEMED:
Institutional.......................... (1,002,866) (457,469) (17,904,388) (11,491,635) (1,067,184) (395,366)
Adviser................................ -- -- (866,952) (1,280,895) -- --
Investor............................... (215,766) (413,423) (4,729,392) (3,509,136) (256,233) (435,588)
---------- --------- ----------- ----------- ---------- ---------
(1,218,632) (870,892) (23,500,732) (16,281,666) (1,323,417) (830,954)
---------- --------- ----------- ----------- ---------- ---------
NET INCREASE/(DECREASE):
Institutional.......................... 9,396,705 4,723,204 1,164,705 14,802,591 500,237 26,303
Adviser................................ -- -- (142,724) 299,422 -- --
Investor............................... 3,493,460 (33,740) 2,435,977 4,616,230 959,182 334,209
---------- --------- ----------- ----------- ---------- ---------
12,890,165 4,689,464 3,457,958 19,718,243 1,459,419 360,512
========== ========= =========== =========== ========== =========
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 121
Financial Statements
Statements of Changes in Net Assets continued
<Table>
<Caption>
LAUDUS
ROSENBERG
INTERNATIONAL
SMALL
CAPITALIZATION
FUND
------------------------
YEAR ENDED YEAR ENDED
MARCH 31, MARCH 31,
2005 2004
---------- ----------
SHARES SOLD:
Institutional.......................... 13,305,599 3,917,771
Investor(1)............................ 20,410,262 9,217,902
---------- ----------
33,715,861 13,135,673
---------- ----------
ISSUED UPON REINVESTMENT OF
DISTRIBUTIONS:
Institutional.......................... 375,019 30,576
Investor............................... 445,110 32,372
---------- ----------
820,129 62,948
---------- ----------
SHARES REDEEMED:
Institutional.......................... (2,707,597) (1,496,471)
Investor............................... (5,580,312) (5,414,467)
---------- ----------
(8,287,909) (6,910,938)
---------- ----------
CHANGE IN SHARES:
Institutional.......................... 10,973,021 2,451,876
Investor............................... 15,275,060 3,835,807
---------- ----------
26,248,081 6,287,683
========== ==========
</Table>
(1) For the year ended March 31, 2004 these amounts include 57,790, 96,158,
78,457 and 330,032, respectively, of shares transferred from merger of Class
A, B, and C.
See the accompanying notes to the financial statements.
122 Laudus Funds Annual Report
Financial Statements--Statements of Changes in Net Assets continued
<Table>
<Caption>
LAUDUS ROSENBERG LAUDUS ROSENBERG LAUDUS ROSENBERG
U.S. LARGE/MID CAPITALIZATION GLOBAL LONG/SHORT VALUE LONG/SHORT
LONG/SHORT EQUITY FUND EQUITY FUND EQUITY FUND
----------------------------- ------------------------- -------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2005 2004 2005 2004 2005 2004
------------ ------------ ---------- ---------- ---------- ----------
SHARES SOLD:
Institutional.......................... 161,528 728,022 422,609 78,942 5,516,270 2,834,103
Adviser................................
Investor (1)........................... 860,959 1,235,350 293,687 872,153 2,748,797 5,601,695
---------- ---------- -------- ---------- ---------- ----------
1,022,487 1,963,372 716,296 951,095 8,265,067 8,435,798
---------- ---------- -------- ---------- ---------- ----------
ISSUED UPON REINVESTMENT OF
DISTRIBUTIONS:
Institutional.......................... -- -- -- -- -- --
Adviser................................
Investor............................... -- -- -- -- -- --
---------- ---------- -------- ---------- ---------- ----------
-- -- -- -- -- --
---------- ---------- -------- ---------- ---------- ----------
SHARES REDEEMED:
Institutional.......................... (973,807) (1,162,243) (228,087) (107,341) (5,394,490) (1,975,481)
Adviser................................
Investor............................... (542,390) (1,888,520) (524,213) (953,173) (2,867,557) (6,205,118)
---------- ---------- -------- ---------- ---------- ----------
(1,516,197) (3,050,763) (752,300) (1,060,514) (8,262,047) (8,180,599)
---------- ---------- -------- ---------- ---------- ----------
NET INCREASE/(DECREASE):
Institutional.......................... (812,279) (434,221) 194,522 (28,399) 121,780 858,622
Adviser................................
Investor............................... 318,569 (653,170) (230,526) (81,020) (118,760) (603,423)
---------- ---------- -------- ---------- ---------- ----------
(493,710) (1,087,391) (36,004) (109,419) 3,020 255,199
========== ========== ======== ========== ========== ==========
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 123
Financial Statements
Financial Highlights as of 3/31/05
<Table>
<Caption>
INVESTMENT ACTIVITIES LESS DIVIDENDS FROM
------------------------------------------- ------------------------
NET REALIZED NET
NET ASSET AND UNREALIZED TOTAL REALIZED
VALUE, NET GAINS FROM NET GAINS
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT INVESTMENT ON TOTAL
OF PERIOD INCOME/(LOSS) INVESTMENTS ACTIVITIES INCOME INVESTMENTS DIVIDENDS
--------- ------------- -------------- ---------- ---------- ----------- -------------
INSTITUTIONAL SHARES
U.S. LARGE CAPITALIZATION
FUND
For the Year Ended March 31,
2005........................ $10.92 $ 0.11(6) $ 0.94 $ 1.05 $(0.09) $(0.09) $(0.18)
For the Year Ended March 31,
2004........................ 8.28 0.06(6) 2.62 2.68 (0.04) -- (0.04)
June 19, 2002 to March 31,
2003 (1).................... 10.00 0.05(6) (1.73) (1.68) (0.04) -- (0.04)
U.S. LARGE CAPITALIZATION
GROWTH FUND
For the Year Ended March 31,
2005........................ 7.84 0.04(6) 0.23 0.27 (0.04) -- (0.04)
For the Year Ended March 31,
2004........................ 5.95 0.06(6) 1.89 1.95 (0.06) -- (0.06)
For the Year Ended March 31,
2003........................ 7.77 0.07(6) (1.83) (1.76) (0.06) -- (0.06)
For the Year Ended March 31,
2002........................ 7.70 0.06 0.07 0.13 (0.06) -- (0.06)
June 7, 2000 to March 31,
2001 (1).................... 10.00 0.04 (2.31) (2.27) (0.03) -- (0.03)
U.S. DISCOVERY FUND
For the Year Ended March 31,
2005........................ 14.71 0.03(6) 1.44 1.47 (0.04) (0.18) (0.22)
For the Year Ended March 31,
2004........................ 9.55 0.06(6) 5.26 5.32 (0.04) (0.12) (0.16)
For the Year Ended March 31,
2003........................ 11.10 0.04(6) (1.57) (1.53) (0.02) -- (0.02)
September 4, 2001 to March
31, 2002 (1)................ 10.00 0.02 1.10 1.12 (0.02) -- (0.02)
U.S. SMALL CAPITALIZATION
FUND
For the Year Ended March 31,
2005........................ 13.82 0.03(6) 1.27 1.30 (0.03) (1.59) (1.62)
For the Year Ended March 31,
2004........................ 8.98 0.05 5.03 5.08 (0.04) (0.20) (0.24)
For the Year Ended March 31,
2003........................ 11.18 0.03(6) (1.93) (1.90) (0.03) (0.27) (0.30)
For the Year Ended March 31,
2002........................ 9.57 0.03(6) 2.17 2.20 (0.04) (0.55) (0.59)
For the Year Ended March 31,
2001........................ 10.06 0.03(6) (0.16) (0.13) (0.03) (0.33) (0.36)
INTERNATIONAL EQUITY FUND
For the Year Ended March 31,
2005........................ 8.46 0.09(6) 1.12 1.21 (0.04) -- (0.04)
For the Year Ended March 31,
2004........................ 5.56 0.08(6) 2.90 2.98 (0.08) -- (0.08)
For the Year Ended March 31,
2003........................ 7.09 0.08(6) (1.55) (1.47) (0.07) -- (0.07)
For the Year Ended March 31,
2002........................ 8.14 0.07(6) (0.76) (0.69) (0.36) -- (0.36)
June 7, 2000 to March 31,
2001 (1).................... 10.00 0.28 (2.14) (1.86) -- -- --
INTERNATIONAL SMALL
CAPITALIZATION FUND
For the Year Ended March 31,
2005........................ 13.94 0.08(6) 3.53 3.61 (0.04) (0.62) (0.66)
For the Year Ended March 31,
2004........................ 7.92 0.07(6) 6.04 6.11 (0.09) -- (0.09)
For the Year Ended March 31,
2003........................ 8.48 0.09(6) (0.56) (0.47) (0.11) -- (0.11)
For the Year Ended March 31,
2002........................ 9.13 0.15(6) (0.61) (0.46) (0.19) --(7) (0.19)
For the Year Ended March 31,
2001........................ 11.81 0.11 (1.28) (1.17) (0.16) (1.35) (1.51)
U.S. LARGE/MID CAPITALIZATION
LONG/SHORT EQUITY FUND
For the Year Ended March 31,
2005........................ 10.80 (0.01)(6) 0.65 0.64 -- -- --
For the Year Ended March 31,
2004........................ 11.51 (0.06)(6) (0.65) (0.71) -- -- --
For the Year Ended March 31,
2003........................ 10.22 --(6),(7) 1.31 1.31 (0.03) -- (0.03)
For the Year Ended March 31,
2002........................ 9.61 0.18(6) 0.69 0.87 (0.26) -- (0.26)
For the Year Ended March 31,
2001........................ 11.05 0.53(6) (1.12) (0.59) (0.85) -- (0.85)
GLOBAL LONG/SHORT EQUITY FUND
For the Year Ended March 31,
2005........................ 11.30 (0.12)(6) 0.44 0.32 -- -- --
For the Year Ended March 31,
2004........................ 11.87 (0.12)(6) (0.45) (0.57) -- -- --
For the Year Ended March 31,
2003........................ 10.15 (0.03)(6) 1.73 1.70 -- -- --
For the Year Ended March 31,
2002........................ 9.43 0.16 0.96 1.12 (0.40) -- (0.40)
September 29, 2000 to March
31, 2001 (1)................ 10.00 0.22 (0.58) (0.36) (0.11) (0.10) (0.21)
VALUE LONG/SHORT EQUITY FUND
For the Year Ended March 31,
2005........................ 9.87 (0.03)(6) 0.67 0.64 -- -- --
For the Year Ended March 31,
2004........................ 10.48 (0.05)(6) (0.56) (0.61) -- -- --
For the Year Ended March 31,
2003........................ 8.96 (0.02)(6) 1.54 1.52 -- -- --
For the Year Ended March 31,
2002........................ 8.11 0.13(6) 0.94 1.07 (0.22) -- (0.22)
For the Year Ended March 31,
2001........................ 7.42 0.34(6) 0.78 1.12 (0.43) -- (0.43)
</Table>
- ---------------
(1) From commencement of operations.
(2) Not annualized for periods less than one year.
(3) Annualized for periods less than one year.
(4) Includes interest expense and dividend expense on securities sold short.
(5) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
(6) Calculated based on the average shares outstanding during the period.
(7) Amount less than $0.005.
(8) Exclusive of nonrecurring account fees, extraordinary expenses, interest
expense, and dividends on securities sold short.
(9) The ratios of Expenses before Waiver/Reimbursements and Expenses Net of
Waivers/Reimbursements have been adjusted from 3.57% and 2.78%,
respectively, to more appropriately reflect expenses incurred for the
period.
See the accompanying notes to the financial statements.
124 Laudus Funds Annual Report
Financial Statements--Financial Highlights continued
<Table>
<Caption>
RATIOS/SUPPLEMENTAL DATA
-----------------------------
NET NET INVESTMENT
NET ASSET ASSETS, INCOME/(LOSS)
VALUE, END OF NET OF
REDEMPTION END OF TOTAL PERIOD WAIVERS/
FEES PERIOD RETURN(2) (000'S) REIMBURSEMENTS(3)
---------- ----------- ----------- --------- -----------------
INSTITUTIONAL SHARES
U.S. Large Capitalization Fund
For the Year Ended March 31, 2005....... $ -- $11.79 9.66% $44,559 0.96%
For the Year Ended March 31, 2004....... --(7) 10.92 32.33 44,301 0.62
June 19, 2002 to March 31, 2003 (1)..... -- 8.28 (16.78) 14,479 0.80
U.S. LARGE CAPITALIZATION GROWTH FUND
For the Year Ended March 31, 2005....... --(7) 8.07 3.42 5,056 0.53
For the Year Ended March 31, 2004....... --(7) 7.84 32.84 5,006 0.80
For the Year Ended March 31, 2003....... -- 5.95 (22.68) 3,418 1.03
For the Year Ended March 31, 2002....... -- 7.77 1.69 4,297 0.76
June 7, 2000 to March 31, 2001 (1)...... -- 7.70 (22.71) 3,910 0.59
U.S. DISCOVERY FUND
For the Year Ended March 31, 2005....... --(7) 15.96 9.98 256,444 0.23
For the Year Ended March 31, 2004....... --(7) 14.71 55.90 98,077 0.49
For the Year Ended March 31, 2003....... -- 9.55 (13.83) 18,589 0.38
September 4, 2001 to March 31, 2002
(1).................................... -- 11.10 11.25 2,980 0.38
U.S. SMALL CAPITALIZATION FUND
For the Year Ended March 31, 2005....... --(7) 13.50 9.36 948,225 0.20
For the Year Ended March 31, 2004....... --(7) 13.82 56.83 954,275 0.45
For the Year Ended March 31, 2003....... -- 8.98 (17.10) 487,020 0.33
For the Year Ended March 31, 2002....... -- 11.18 23.92 482,205 0.33
For the Year Ended March 31, 2001....... -- 9.57 (1.26) 408,148 0.26
INTERNATIONAL EQUITY FUND
For the Year Ended March 31, 2005....... --(7) 9.63 14.36 16,094 0.96
For the Year Ended March 31, 2004....... 0.01 8.46 53.81 9,914 1.12
For the Year Ended March 31, 2003....... 0.01 5.56 (20.66) 6,368 1.24
For the Year Ended March 31, 2002....... -- 7.09 (8.36) 7,882 0.94
June 7, 2000 to March 31, 2001 (1)...... -- 8.14 (18.50) 9,071 4.20
INTERNATIONAL SMALL CAPITALIZATION FUND
For the Year Ended March 31, 2005....... --(7) 16.89 26.52 270,646 0.50
For the Year Ended March 31, 2004....... --(7) 13.94 77.37 70,382 0.65
For the Year Ended March 31, 2003....... 0.02 7.92 (5.36) 20,562 1.09
For the Year Ended March 31, 2002....... -- 8.48 (4.80) 28,027 1.71
For the Year Ended March 31, 2001....... -- 9.13 (10.78) 41,951 0.99
U.S. LARGE/MID CAPITALIZATION LONG/
SHORT EQUITY FUND
For the Year Ended March 31, 2005....... --(7) 11.44 5.93 12,312 (0.13)
For the Year Ended March 31, 2004....... --(7) 10.80 (6.17) 20,404 (0.57)
For the Year Ended March 31, 2003....... 0.01 11.51 12.90 26,736 0.01
For the Year Ended March 31, 2002....... -- 10.22 9.20 10,037 1.87
For the Year Ended March 31, 2001....... -- 9.61 (4.79) 11,855 5.19
GLOBAL LONG/SHORT EQUITY FUND
For the Year Ended March 31, 2005....... -- 11.62 2.83 15,140 (1.04)
For the Year Ended March 31, 2004....... --(7) 11.30 (4.80) 12,527 (1.11)
For the Year Ended March 31, 2003....... 0.02 11.87 16.95 13,491 (0.28)
For the Year Ended March 31, 2002....... -- 10.15 12.21 10,514 1.67
September 29, 2000 to March 31, 2001
(1).................................... -- 9.43 (3.56) 14,924 4.59
VALUE LONG/SHORT EQUITY FUND
For the Year Ended March 31, 2005....... --(7) 10.51 6.48 102,974 (0.28)
For the Year Ended March 31, 2004....... --(7) 9.87 (5.82) 95,541 (0.46)
For the Year Ended March 31, 2003....... -- 10.48 16.96 92,356 (0.15)
For the Year Ended March 31, 2002....... -- 8.96 13.53 69,629 1.61
For the Year Ended March 31, 2001....... -- 8.11 15.96 61,923 4.56
<Caption>
RATIOS/SUPPLEMENTAL DATA
---------------------------------------------------------------------------------
EXPENSES EXPENSES EXPENSES
BEFORE NET OF NET OF PORTFOLIO
WAIVERS/ WAIVERS/ WAIVERS/ TURNOVER
REIMBURSEMENTS(3),(4) REIMBURSEMENTS(3),(4) REIMBURSEMENTS(3),(8) RATE(5)
--------------------- --------------------- --------------------- ---------
INSTITUTIONAL SHARES
U.S. Large Capitalization Fund
For the Year Ended March 31, 2005....... 1.23% 0.99% 0.99% 127.89%
For the Year Ended March 31, 2004....... 1.47 1.00 1.00 141.50
June 19, 2002 to March 31, 2003 (1)..... 2.73 0.99 0.99 100.79
U.S. LARGE CAPITALIZATION GROWTH FUND
For the Year Ended March 31, 2005....... 2.34 0.99 0.99 77.81
For the Year Ended March 31, 2004....... 2.59 0.80 0.80 177.43
For the Year Ended March 31, 2003....... 4.55 0.75 0.75 68.73
For the Year Ended March 31, 2002....... 3.81 0.75 0.75 111.54
June 7, 2000 to March 31, 2001 (1)...... 2.90 0.75 0.75 88.81
U.S. DISCOVERY FUND
For the Year Ended March 31, 2005....... 1.20 1.14 1.14 62.60
For the Year Ended March 31, 2004....... 1.46 1.14 1.14 93.08
For the Year Ended March 31, 2003....... 3.71 1.15 1.15 98.65
September 4, 2001 to March 31, 2002
(1).................................... 9.02 1.15 1.15 78.02
U.S. SMALL CAPITALIZATION FUND
For the Year Ended March 31, 2005....... 1.09 1.09 1.09 68.09
For the Year Ended March 31, 2004....... 1.13 1.13 1.13 75.65
For the Year Ended March 31, 2003....... 1.29 1.15 1.15 70.83
For the Year Ended March 31, 2002....... 1.29 1.15 1.15 101.08
For the Year Ended March 31, 2001....... 1.25 1.15 1.15 128.79
INTERNATIONAL EQUITY FUND
For the Year Ended March 31, 2005....... 2.69 1.34 1.34 52.06
For the Year Ended March 31, 2004....... 4.32 1.35 1.35 107.02
For the Year Ended March 31, 2003....... 5.30 1.35 1.35 138.85
For the Year Ended March 31, 2002....... 4.13 1.35 1.35 132.84
June 7, 2000 to March 31, 2001 (1)...... 3.48 1.35 1.35 86.18
INTERNATIONAL SMALL CAPITALIZATION FUND
For the Year Ended March 31, 2005....... 1.55 1.49 1.49 59.70
For the Year Ended March 31, 2004....... 1.94 1.47 1.47 102.50
For the Year Ended March 31, 2003....... 2.60 1.50 1.50 129.34
For the Year Ended March 31, 2002....... 2.24 1.50 1.50 147.52
For the Year Ended March 31, 2001....... 1.93 1.50 1.50 148.53
U.S. LARGE/MID CAPITALIZATION LONG/
SHORT EQUITY FUND
For the Year Ended March 31, 2005....... 3.23 2.94 1.24 180.14
For the Year Ended March 31, 2004....... 3.22 2.82 1.25 189.35
For the Year Ended March 31, 2003....... 3.59 2.67 1.25 185.66
For the Year Ended March 31, 2002....... 2.84 1.95 1.25 313.22
For the Year Ended March 31, 2001....... 2.67 2.12 1.25 399.02
GLOBAL LONG/SHORT EQUITY FUND
For the Year Ended March 31, 2005....... 4.38 3.82 1.99 152.24
For the Year Ended March 31, 2004....... 3.69(9) 2.91(9) 1.81 175.85
For the Year Ended March 31, 2003....... 4.04 2.50 1.50 189.09
For the Year Ended March 31, 2002....... 3.19 1.93 1.50 231.34
September 29, 2000 to March 31, 2001
(1).................................... 3.19 2.15 1.50 216.10
VALUE LONG/SHORT EQUITY FUND
For the Year Ended March 31, 2005....... 3.04 2.98 1.74 111.19
For the Year Ended March 31, 2004....... 2.88 2.77 1.75 76.36
For the Year Ended March 31, 2003....... 2.72 2.42 1.74 209.95
For the Year Ended March 31, 2002....... 2.49 2.18 1.75 126.45
For the Year Ended March 31, 2001....... 3.05 2.72 1.84 129.80
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 125
Financial Statements
Financial Highlights as of 3/31/05
<Table>
<Caption>
INVESTMENT ACTIVITIES LESS DIVIDENDS FROM
------------------------------------------- ------------------------
NET REALIZED NET
NET ASSET AND UNREALIZED TOTAL REALIZED
VALUE, NET GAINS FROM NET GAINS
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT INVESTMENT ON TOTAL
OF PERIOD INCOME/(LOSS) INVESTMENTS ACTIVITIES INCOME INVESTMENTS DIVIDENDS
--------- ------------- -------------- ---------- ---------- ----------- -------------
ADVISER SHARES
U.S. SMALL CAPITALIZATION
FUND
For the Year Ended March 31,
2005........................ $13.71 $ --(6),(7) $ 1.26 $ 1.26 $ -- $(1.59) $(1.59)
For the Year Ended March 31,
2004........................ 8.91 0.02 5.00 5.02 (0.02) (0.20) (0.22)
For the Year Ended March 31,
2003........................ 11.12 0.01(6) (1.93) (1.92) (0.02) (0.27) (0.29)
For the Year Ended March 31,
2002........................ 9.53 --(6) 2.17 2.17 (0.03) (0.55) (0.58)
For the Year Ended March 31,
2001........................ 10.02 0.01(6) (0.16) (0.15) (0.01) (0.33) (0.34)
INVESTOR SHARES
U.S. LARGE CAPITALIZATION
FUND
For the Year Ended March 31,
2005........................ 10.96 0.08(6) 0.93 1.01 (0.07) (0.09) (0.16)
For the Year Ended March 31,
2004........................ 8.31 0.02(6) 2.63 2.65 -- -- --
July 31, 2002 to March 31,
2003 (1).................... 8.88 0.05(6) (0.62) (0.57) -- -- --
U.S. LARGE CAPITALIZATION
GROWTH FUND
For the Year Ended March 31,
2005........................ 7.92 0.02(6) 0.23 0.25 (0.02) -- (0.02)
August 15, 2003 to March 31,
2004 (1).................... 6.95 0.09(6) 0.92 1.01 (0.04) -- (0.04)
U.S. DISCOVERY FUND
For the Year Ended March 31,
2005........................ 14.66 (0.05)(6) 1.47 1.42 (0.02) (0.18) (0.20)
For the Year Ended March 31,
2004........................ 9.53 0.01(6) 5.24 5.25 -- (0.12) (0.12)
For the Year Ended March 31,
2003........................ 11.08 0.02(6) (1.57) (1.55) -- -- --
October 3, 2001 to March 31,
2002 (1).................... 9.38 -- 1.72 1.72 (0.02) -- (0.02)
U.S. SMALL CAPITALIZATION
FUND
For the Year Ended March 31,
2005........................ 13.65 (0.02)(6) 1.26 1.24 -- (1.59) (1.59)
For the Year Ended March 31,
2004........................ 8.88 0.01 4.98 4.99 (0.02) (0.20) (0.22)
For the Year Ended March 31,
2003........................ 11.08 --(6),(7) (1.92) (1.92) (0.01) (0.27) (0.28)
For the Year Ended March 31,
2002........................ 9.50 --(6) 2.15 2.15 (0.02) (0.55) (0.57)
For the Year Ended March 31,
2001........................ 10.00 (0.01)(6) (0.14) (0.15) (0.02) (0.33) (0.35)
INTERNATIONAL EQUITY FUND
For the Year Ended March 31,
2005........................ 8.47 0.06(6) 1.11 1.17 (0.03) -- (0.03)
For the Year Ended March 31,
2004........................ 5.57 0.03(6) 2.95 2.98 (0.08) -- (0.08)
For the Year Ended March 31,
2003........................ 7.05 0.07(6) (1.54) (1.47) (0.02) -- (0.02)
For the Year Ended March 31,
2002........................ 8.13 0.05(6) (0.78) (0.73) (0.35) -- (0.35)
December 5, 2000 to March 31,
2001 (1).................... 8.98 0.27 (1.12) (0.85) -- -- --
INTERNATIONAL SMALL
CAPITALIZATION FUND
For the Year Ended March 31,
2005........................ 13.83 0.03(6) 3.51 3.54 (0.02) (0.62) (0.64)
For the Year Ended March 31,
2004........................ 7.87 0.03(6) 6.01 6.04 (0.08) -- (0.08)
For the Year Ended March 31,
2003........................ 8.43 0.08(6) (0.57) (0.49) (0.09) -- (0.09)
For the Year Ended March 31,
2002........................ 9.09 0.07(6) (0.55) (0.48) (0.18) --(7) (0.18)
For the Year Ended March 31,
2001........................ 11.77 0.08 (1.29) (1.21) (0.12) (1.35) (1.47)
U.S. LARGE/MID CAPITALIZATION
LONG/SHORT EQUITY FUND
For the Year Ended March 31,
2005........................ 10.86 (0.04)(6) 0.64 0.60 -- -- --
For the Year Ended March 31,
2004........................ 11.61 (0.10)(6) (0.65) (0.75) -- -- --
For the Year Ended March 31,
2003........................ 10.34 (0.05)(6) 1.33 1.28 (0.02) -- (0.02)
For the Year Ended March 31,
2002........................ 9.73 0.10(6) 0.76 0.86 (0.25) -- (0.25)
For the Year Ended March 31,
2001........................ 10.99 0.50(6) (1.10) (0.60) (0.66) -- (0.66)
GLOBAL LONG/SHORT EQUITY FUND
For the Year Ended March 31,
2005........................ 11.21 (0.17)(6) 0.43 0.26 -- -- --
For the Year Ended March 31,
2004........................ 11.81 (0.17)(6) (0.43) (0.60) -- -- --
For the Year Ended March 31,
2003........................ 10.13 (0.09)(6) 1.75 1.66 -- -- --
August 23, 2001 to March 31,
2002 (1).................... 10.19 0.01(6) 0.32 0.33 (0.39) -- (0.39)
VALUE LONG/SHORT EQUITY FUND
For the Year Ended March 31,
2005........................ 9.81 (0.06)(6) 0.66 0.60 -- -- --
For the Year Ended March 31,
2004........................ 10.43 (0.09)(6) (0.53) (0.62) -- -- --
For the Year Ended March 31,
2003........................ 8.95 (0.05)(6) 1.53 1.48 -- -- --
For the Year Ended March 31,
2002........................ 8.10 0.09(6) 0.96 1.05 (0.20) -- (0.20)
For the Year Ended March 31,
2001........................ 7.41 0.31(6) 0.78 1.09 (0.40) -- (0.40)
</Table>
- ---------------
(1) From commencement of operations.
(2) Not annualized for periods less than one year.
(3) Annualized for periods less than one year.
(4) Includes interest expense and dividend expense on securities sold short.
(5) Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
(6) Calculated based on the average shares outstanding during the period.
(7) Amount less than $0.005.
(8) Exclusive of nonrecurring account fees, extraordinary expenses, interest
expense, and dividends on securities sold short.
(9) The ratios of Expenses before Waivers/Reimbursements and Expenses Net of
Waivers/Reimbursements have been adjusted from 3.89% and 3.11%,
respectively, to more appropriately reflect expenses incurred for the
period.
See the accompanying notes to the financial statements.
126 Laudus Funds Annual Report
Financial Statements--Financial Highlights continued
<Table>
<Caption>
RATIOS/SUPPLEMENTAL DATA
-----------------------------
NET NET INVESTMENT
NET ASSET ASSETS, INCOME/(LOSS)
VALUE, END OF NET OF
REDEMPTION END OF TOTAL PERIOD WAIVERS/
FEES PERIOD RETURN(2) (000'S) REIMBURSEMENTS(3)
---------- ----------- ----------- --------- -----------------
ADVISER SHARES
U.S. SMALL CAPITALIZATION FUND
For the Year Ended March 31, 2005....... $ --(7) $13.38 9.12% $41,104 (0.01)%
For the Year Ended March 31, 2004....... --(7) 13.71 56.53 44,059 0.19
For the Year Ended March 31, 2003....... -- 8.91 (17.35) 25,973 0.07
For the Year Ended March 31, 2002....... -- 11.12 23.61 17,695 0.05
For the Year Ended March 31, 2001....... -- 9.53 (1.43) 8,137 0.07
INVESTOR SHARES
U.S. Large Capitalization Fund
For the Year Ended March 31, 2005....... -- 11.81 9.22 2,786 0.69
For the Year Ended March 31, 2004....... --(7) 10.96 31.89 590 0.24
July 31, 2002 to March 31, 2003 (1)..... -- 8.31 (6.42) 666 0.87
U.S. Large Capitalization Growth Fund
For the Year Ended March 31, 2005....... --(7) 8.15 3.14 1,894 0.21
August 15, 2003 to March 31, 2004 (1)... --(7) 7.92 14.50 1,479 1.12
U.S. DISCOVERY FUND
For the Year Ended March 31, 2005....... --(7) 15.88 9.70 58,284 (0.30)
For the Year Ended March 31, 2004....... --(7) 14.66 55.22 2,581 0.04
For the Year Ended March 31, 2003....... -- 9.53 (13.99) 104 0.20
October 3, 2001 to March 31, 2002 (1)... -- 11.08 18.34 98 0.03
U.S. SMALL CAPITALIZATION FUND
For the Year Ended March 31, 2005....... --(7) 13.30 9.00 297,927 (0.15)
For the Year Ended March 31, 2004....... --(7) 13.65 56.40 272,481 0.11
For the Year Ended March 31, 2003....... -- 8.88 (17.42) 136,293 (0.02)
For the Year Ended March 31, 2002....... -- 11.08 23.50 108,449 (0.05)
For the Year Ended March 31, 2001....... -- 9.50 (1.52) 65,217 (0.13)
INTERNATIONAL EQUITY FUND
For the Year Ended March 31, 2005....... --(7) 9.61 13.79 12,491 0.65
For the Year Ended March 31, 2004....... 0.02 8.47 53.61 2,881 0.45
For the Year Ended March 31, 2003....... 0.01 5.57 (20.73) 17 1.06
For the Year Ended March 31, 2002....... -- 7.05 (8.83) 18 0.64
December 5, 2000 to March 31, 2001
(1).................................... -- 8.13 (9.47) 24 25.10
INTERNATIONAL SMALL CAPITALIZATION FUND
For the Year Ended March 31, 2005....... --(7) 16.73 26.16 355,766 0.20
For the Year Ended March 31, 2004....... --(7) 13.83 76.91 82,780 0.28
For the Year Ended March 31, 2003....... 0.02 7.87 (5.53) 16,834 0.99
For the Year Ended March 31, 2002....... -- 8.43 (5.08) 6,334 0.79
For the Year Ended March 31, 2001....... -- 9.09 (11.08) 1,731 0.67
U.S. LARGE/MID CAPITALIZATION LONG/
SHORT
EQUITY FUND
For the Year Ended March 31, 2005....... --(7) 11.46 5.52 12,824 (0.33)
For the Year Ended March 31, 2004....... --(7) 10.86 (6.46) 8,693 (0.93)
For the Year Ended March 31, 2003....... 0.01 11.61 12.49 16,251 (0.45)
For the Year Ended March 31, 2002....... -- 10.34 8.96 471 0.99
For the Year Ended March 31, 2001....... -- 9.73 (5.06) 24 4.90
GLOBAL LONG/SHORT EQUITY FUND
For the Year Ended March 31, 2005....... 0.02 11.49 2.50 6,094 (1.57)
For the Year Ended March 31, 2004....... --(7) 11.21 (5.08) 8,533 (1.50)
For the Year Ended March 31, 2003....... 0.02 11.81 16.58 9,474 (0.80)
August 23, 2001 to March 31, 2002 (1)... -- 10.13 3.58 7 0.22
VALUE LONG/SHORT EQUITY FUND
For the Year Ended March 31, 2005....... --(7) 10.41 6.12 34,930 (0.55)
For the Year Ended March 31, 2004....... --(7) 9.81 (5.94) 34,081 (0.90)
For the Year Ended March 31, 2003....... -- 10.43 16.54 38,473 (0.43)
For the Year Ended March 31, 2002....... -- 8.95 13.24 5,355 1.05
For the Year Ended March 31, 2001....... -- 8.10 15.49 3,952 4.23
<Caption>
RATIOS/SUPPLEMENTAL DATA
---------------------------------------------------------------------------------
EXPENSES EXPENSES
BEFORE NET OF EXPENSES PORTFOLIO
WAIVERS/ WAIVERS/ NET OF WAIVERS/ TURNOVER
REIMBURSEMENTS(3),(4) REIMBURSEMENTS(3),(4) REIMBURSEMENTS(3),(8) RATE(5)
--------------------- --------------------- --------------------- ---------
ADVISER SHARES
U.S. SMALL CAPITALIZATION FUND
For the Year Ended March 31, 2005....... 1.31% 1.31% 1.31% 68.09%
For the Year Ended March 31, 2004....... 1.40 1.40 1.40 75.65
For the Year Ended March 31, 2003....... 1.54 1.40 1.40 70.83
For the Year Ended March 31, 2002....... 1.53 1.39 1.39 101.08
For the Year Ended March 31, 2001....... 1.45 1.35 1.35 128.79
INVESTOR SHARES
U.S. Large Capitalization Fund
For the Year Ended March 31, 2005....... 1.58 1.35 1.35 127.89
For the Year Ended March 31, 2004....... 1.51 1.25 1.25 141.50
July 31, 2002 to March 31, 2003 (1)..... 3.05 1.25 1.25 100.79
U.S. Large Capitalization Growth Fund
For the Year Ended March 31, 2005....... 2.68 1.32 1.32 77.81
August 15, 2003 to March 31, 2004 (1)... 2.72 1.11 1.39 177.43
U.S. DISCOVERY FUND
For the Year Ended March 31, 2005....... 1.55 1.49 1.49 62.60
For the Year Ended March 31, 2004....... 1.63 1.40 1.40 93.08
For the Year Ended March 31, 2003....... 6.18 1.40 1.40 98.65
October 3, 2001 to March 31, 2002 (1)... 10.26 1.40 1.40 78.02
U.S. SMALL CAPITALIZATION FUND
For the Year Ended March 31, 2005....... 1.43 1.43 1.43 68.09
For the Year Ended March 31, 2004....... 1.47 1.47 1.47 75.65
For the Year Ended March 31, 2003....... 1.63 1.49 1.49 70.83
For the Year Ended March 31, 2002....... 1.65 1.51 1.51 101.08
For the Year Ended March 31, 2001....... 1.53 1.43 1.43 128.79
INTERNATIONAL EQUITY FUND
For the Year Ended March 31, 2005....... 2.96 1.72 1.72 52.06
For the Year Ended March 31, 2004....... 4.46 1.59 1.59 107.02
For the Year Ended March 31, 2003....... 5.27 1.60 1.60 138.85
For the Year Ended March 31, 2002....... 4.27 1.60 1.60 132.84
December 5, 2000 to March 31, 2001
(1).................................... 4.09 1.60 1.60 86.18
INTERNATIONAL SMALL CAPITALIZATION FUND
For the Year Ended March 31, 2005....... 1.88 1.83 1.83 59.70
For the Year Ended March 31, 2004....... 2.18 1.75 1.75 102.50
For the Year Ended March 31, 2003....... 2.93 1.78 1.78 129.34
For the Year Ended March 31, 2002....... 2.67 1.78 1.78 147.52
For the Year Ended March 31, 2001....... 2.24 1.81 1.81 148.53
U.S. LARGE/MID CAPITALIZATION LONG/
SHORT
EQUITY FUND
For the Year Ended March 31, 2005....... 3.55 3.26 1.61 180.14
For the Year Ended March 31, 2004....... 3.51 3.12 1.55 189.35
For the Year Ended March 31, 2003....... 3.91 3.07 1.54 185.66
For the Year Ended March 31, 2002....... 3.42 2.42 1.56 313.22
For the Year Ended March 31, 2001....... 2.96 2.41 1.54 399.02
GLOBAL LONG/SHORT EQUITY FUND
For the Year Ended March 31, 2005....... 4.80 4.27 2.34 152.24
For the Year Ended March 31, 2004....... 4.01(9) 3.23(9) 2.14 175.85
For the Year Ended March 31, 2003....... 4.42 2.92 1.80 189.09
August 23, 2001 to March 31, 2002 (1)... 4.43 2.34 1.75 231.34
VALUE LONG/SHORT EQUITY FUND
For the Year Ended March 31, 2005....... 3.37 3.30 2.06 111.19
For the Year Ended March 31, 2004....... 3.18 3.06 2.05 76.36
For the Year Ended March 31, 2003....... 2.97 2.69 2.02 209.95
For the Year Ended March 31, 2002....... 2.79 2.48 2.04 126.45
For the Year Ended March 31, 2001....... 3.37 3.04 2.16 129.80
</Table>
See the accompanying notes to the financial statements.
Laudus Funds Annual Report 127
Financial Statements
Notes to Financial Statements as of 03/31/05
1. ORGANIZATION.
Laudus Trust, (the "Trust") was established as a Massachusetts business trust
under the laws of Massachusetts on April 1, 1988. The Trust is an open-end
diversified management investment company consisting of eleven portfolios, nine
of which were operational as of March 31, 2005 (individually, a "Fund" and
collectively the "Funds");
Laudus Rosenberg U.S. Large Capitalization Fund,
Laudus Rosenberg U.S. Large Capitalization Growth
Fund,
Laudus Rosenberg U.S. Discovery Fund,
Laudus Rosenberg U.S. Small Capitalization Fund,
Laudus Rosenberg International Equity Fund,
Laudus Rosenberg International Small Capitalization
Fund,
Laudus Rosenberg U.S. Large/Mid Capitalization
Long/Short Equity Fund,
Laudus Rosenberg Global Long/Short Equity Fund,
Laudus Rosenberg Value Long/Short Equity Fund.
On July 16, 2004 Laudus Rosenberg European Fund was liquidated. As of March 31,
2005, the Laudus Rosenberg U.S. Large Capitalization Value Fund and Laudus
Rosenberg U.S. Long/Short Equity Fund were not operational. As of October 15,
2004, the Laudus Rosenberg U.S. Small Capitalization Fund was closed to new
investors.
Each Fund is authorized to issue an unlimited number of Institutional Shares and
Investor Shares of no par value, and the Laudus Rosenberg U.S. Small
Capitalization Fund is also authorized to issue an unlimited number of Adviser
Shares of no par value. Each class of shares generally has identical rights and
preferences, except that each class is subject to different eligibility
conditions, bear different distribution and sub-transfer agent expenses, and has
separate voting rights on matters pertaining solely to that class of shares.
Under the Funds' organizational documents, its officers and trustees are
indemnified against certain liabilities arising out of the performance of their
duties to the Funds. In addition, in the normal course of business, the Funds
enter into contracts with their vendors and others that provide for general
indemnifications. The Funds' maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Funds.
However, based on experience, the Funds expect that risk of loss to be remote.
2. SIGNIFICANT ACCOUNTING POLICIES.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts and disclosures in
the financial statements. Actual amounts could differ from those estimates. The
following is a summary of significant accounting policies followed by the Trust
in the preparation of its financial statements.
SECURITY VALUATION
Each Fund uses approved pricing services to provide values for its portfolio
securities. Current market values are generally determined by the approved
pricing services as follows: securities traded on stock exchanges are valued at
the last-quoted sales price on the exchange on which such securities are
primarily traded (closing values), or, lacking any sales, at the mean between
the bid and ask prices; securities traded in the over-the-counter market are
valued at the last sales price that day, or, if there are no sales that day, at
the mean between the bid and ask prices. In addition, securities that are
primarily traded on foreign exchanges are generally valued at the preceding
closing values of such securities on their respective exchanges with these
values then translated into U.S. dollars at the current exchange rate. Foreign
securities are fair valued if a movement in the U.S. market exceeds a specific
threshold that has been established using the guideline adopted by a fund's
Board of Trustees. The fund uses a third party vendor to provide the fair
valuation based on certain factors and methodologies including tracking
valuation correlations between the U.S. market and each non-U.S. security.
Securities may be fair valued pursuant to procedures approved by the Funds'
Board of Trustees when approved pricing services do not provide a value for a
security, a furnished price appears manifestly incorrect or events occur prior
to the close of the New York Stock Exchange that materially affect the furnished
price. The Board of Trustees regularly reviews fair value determinations made by
the Funds pursuant to the procedures.
128 Laudus Funds Annual Report
Financial Statements--Notes to Financial Statements continued
SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Changes in holdings of portfolio securities are reflected no later than on the
first business day following the trade date. However, for financial reporting
purposes, portfolio security transactions are reported on trade date. Net
realized gains or losses from sales of securities are determined on the specific
identification cost method. Interest income and expenses are recognized on the
accrual basis. Dividend income less foreign taxes withheld (if any) is recorded
on the ex-dividend date. Interest income is recorded as earned and includes
premium amortization and discount accretion.
FOREIGN CURRENCY TRANSACTIONS
The accounting records of the Funds are maintained in U.S. dollars. All monetary
items denominated in foreign currencies are translated to U.S. dollars based
upon the prevailing exchange rate at the close of each business day. Net
realized gains and losses on foreign currency transactions represent net gains
and losses from currency gains and losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amount of net investment income accrued and the U.S. dollar amount actually
received. Further, the effects of changes in foreign currency exchange rates on
investments in securities are not segregated in the Statement of Operations from
the effects of changes in market prices of those securities, but are included
with the net realized gain or loss and unrealized appreciation or depreciation
on investments.
FORWARD FOREIGN CURRENCY CONTRACTS
Forward foreign currency contracts are valued at the daily exchange rate of the
underlying currency. The forward foreign currency contracts are adjusted by the
daily exchange rate of the underlying currency and any gains or losses are
recorded for financial statement purposes as unrealized appreciation or
depreciation until the contractual settlement date. Gains or losses from the
purchase or sale of forward foreign currency contracts are recorded as realized
on the settlement date.
FOREIGN SECURITIES
The Laudus Rosenberg International Equity Fund, Laudus Rosenberg International
Small Capitalization Fund, and Laudus Rosenberg Global Long/Short Equity Fund
pursue their respective objectives by investing in foreign securities.
Investments in securities of foreign issuers involve certain risks that are less
significant for investments in securities of U.S. issuers. These include risks
of adverse changes in foreign economic, political, regulatory and other
conditions, changes in currency exchange rates or exchange control regulations
(including currency blockage). The Funds may be unable to obtain and enforce
judgments against foreign entities, and issuers of foreign securities are
subject to different, and often less comprehensive, accounting, reporting and
disclosure requirements than domestic issuers. Also the securities of some
foreign companies may be less liquid and at times more volatile than securities
of comparable U.S. companies.
REAL ESTATE INVESTMENT TRUSTS
Several Funds own shares of real estate investment trusts ("REITs") which report
information on the source of their distributions annually. Certain distributions
received from REITs during the year, which are known to be a return of capital,
are recorded as a reduction to the cost of the individual REIT.
REPURCHASE AGREEMENTS
In a repurchase agreement, a Fund buys a security from another party (usually a
financial institution) with the agreement that the security will be sold back in
the future. The date, price and other conditions are all specified when the
agreement is created.
The Funds' repurchase agreements are currently fully collateralized by U.S.
Government Securities. All collateral is held by the Funds' Custodian (or, with
tri-party agreements, the agent's bank) and is monitored daily to ensure that
its market value is at least equal to the repurchase price under the agreement.
SHORT SALES
The Laudus Rosenberg U.S. Large/Mid Capitalization Long/Short Equity Fund,
Laudus Rosenberg Global Long/Short Equity Fund and Laudus Rosenberg Value
Long/Short Equity Fund are authorized to engage in short sales. Short sales are
transactions in which a Fund sells a security it does not own, in anticipation
of a decline in the market value of that security. To complete such a
transaction, the Fund must borrow the security to deliver to the buyer upon the
short sale; the Fund is then
Laudus Funds Annual Report 129
Financial Statements--Notes to Financial Statements continued
obligated to replace the security borrowed by purchasing the security at current
market value sometime in the future. The Fund will incur a loss if the price of
the security increases between the date of the short sale and the date on which
the Fund replaces the borrowed security. The Fund will realize a gain if the
price of the security declines between those dates. The potential for losses
associated with short positions is much greater than the original value of the
securities sold short and may exceed the market value of securities sold short
recorded in the Statement of Assets and Liabilities. Until the Fund replaces the
borrowed security, the Fund will maintain a segregated account at the Custodian
Bank with cash, U.S. Government Securities and/or securities held long by the
portfolio to sufficiently cover its short position on a daily basis. The
collateral for the securities sold short includes the Deposits with Broker and
Custodian Bank as shown in the Statement of Assets and Liabilities and the
securities held long as shown in the Statement of Portfolio Investments.
Interest accrued or dividends paid on Securities Sold Short are recorded as an
expense on the Fund's records.
SECURITIES LENDING
Under the Securities Lending Program, securities held by the Laudus Rosenberg
U.S. Small Capitalization Fund are loaned by State Street Bank, as agent, to
certain brokers (the "Borrowers"). The Borrowers provide cash or U.S. Government
securities as collateral against loans in an amount at least equal to 100% of
the market value of the loaned securities.
At March 31, 2005, the value of securities loaned amounted to $22,865,038
against which cash collateral of $23,181,539 was received. The cash collateral
is invested in various money market portfolios. A portion of the income
generated upon investment of the collateral is remitted to the Borrowers, and
the remainder is allocated between the Laudus Rosenberg U.S. Small
Capitalization Fund and State Street Bank in its capacity as lending agent.
Securities lending fee income, net of related expenses, is recorded as earned.
The Laudus Rosenberg U.S. Small Capitalization Fund bears the risk of loss with
respect to the investment of the cash collateral.
EXPENSE, INVESTMENT INCOME AND GAIN/LOSS ALLOCATION
Expenses directly attributable to a Fund are charged to that Fund; expenses not
directly attributable to a Fund are allocated proportionately among each Fund
within the Trust in relation to the net assets of each Fund or on another
reasonable basis. Expenses specific to a class are charged to that class.
Expenses other than class specific expenses are allocated daily to each class
based upon the proportion of relative net assets or another reasonable basis.
The investment income and expenses of the Fund (other than class specific
expenses charged to a class) and realized and unrealized gains and losses on
investments of the Fund are allocated to each class of shares based upon
relative net assets on the date income is earned, or expenses and realized and
unrealized gains and losses are incurred.
DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Dividends and distributions are made annually on a tax basis, which may
differ from distribution amounts determined under accounting principles
generally accepted in the United States of America. These differences are
primarily due to differing treatments for foreign currency transactions, REITs,
and wash sales for book and tax purposes.
FEDERAL INCOME TAXES
It is the Funds' policy to comply with the requirements of the Internal Revenue
Code under Subchapter M, applicable to regulated investments companies, and to
distribute substantially all of its taxable income, including any net realized
gain on investments, to its shareholders. Therefore, no provisions are made for
federal income taxes.
3. MANAGEMENT, ADMINISTRATION, FUND ACCOUNTING, DISTRIBUTION AND SHAREHOLDER
SERVICE AGREEMENTS.
The Trust's Board of Trustees oversees the general conduct of the Trust and the
Funds.
Charles Schwab Investment Management, Inc. ("CSIM" or the "Manager") is the
investment adviser of the Funds and manages the Funds' business, subject to the
supervision of the Board of Trustees. AXA Rosenberg Invest-
130 Laudus Funds Annual Report
Financial Statements--Notes to Financial Statements continued
ment Management LLC ("AXA Rosenberg"), the Funds' sub-adviser, provides
day-to-day portfolio management services to the Funds, subject to the
supervision of CSIM.
The Funds pay CSIM an advisory fee for these services on a monthly basis.
CSIM -- and not the Funds -- pays a portion of the advisory fees it receives to
AXA Rosenberg in return for its services.
The table below sets forth the advisory fee payable to CSIM by each Fund.
<Table>
<Caption>
Agreement Rate*
- ------------------------------------------------------------
Laudus Rosenberg
U.S. Large Capitalization
Fund............................ 1st $1 billion-0.75%
Over $1 billion-0.70%
Over $2 billion-0.675%
Laudus Rosenberg
U.S. Large Capitalization Growth
Fund............................ 1st $1 billion-0.75%
Over $1 billion-0.70%
Over $2 billion-0.675%
Laudus Rosenberg
U.S. Discovery Fund............. 1st $1 billion-0.90%
Over $1 billion-0.85%
Laudus Rosenberg
U.S. Small Capitalization
Fund............................ 0.90%
Laudus Rosenberg
International Equity Fund....... 1st $1 billion-0.85%
Over $1 billion-0.80%
Over $2 billion-0.775%
Laudus Rosenberg
International Small
Capitalization Fund............. 1st $500 million-1.00%
Over $500 million-0.95%
Laudus Rosenberg
U.S. Large/Mid Capitalization
Long/Short Equity Fund......... 1st $500 million-1.00%
Over $500 million-0.95%
Laudus Rosenberg
Global Long/Short Equity Fund... 1st $500 million-1.50%
Over $500 million-1.45%
Laudus Rosenberg
Value Long/Short Equity Fund.... 1st $500 million-1.50%
Over $500 million-1.45%
* The advisory fee payable to CSIM varies based on fund
assets.
</Table>
Affiliated broker/dealers received $21,849 for the year ended March 31, 2005,
for brokerage fees on the execution of portfolio trades.
CSIM has contractually agreed, until at least March 31, 2007, to waive its
management fee and bear certain expenses and fees of each Fund. As such, CSIM
further agrees to reimburse the Funds to limit the annual expenses, exclusive of
nonrecurring account fees, extraordinary expenses, interest expense, dividends
on securities sold short, service fees, subtransfer agency and subaccounting
fees and distribution and shareholder services fees as follows:
<Table>
Laudus Rosenberg U.S. Large Capitalization
Fund........................................ 0.99%
Laudus Rosenberg U.S. Large Capitalization
Growth Fund................................. 0.99%
Laudus Rosenberg U.S. Discovery Fund.......... 1.14%
Laudus Rosenberg U.S. Small Capitalization
Fund........................................ 1.14%
Laudus Rosenberg International Equity Fund.... 1.34%
Laudus Rosenberg International Small
Capitalization Fund......................... 1.49%
Laudus Rosenberg U.S. Large/Mid Capitalization
Long/Short Equity Fund...................... 1.24%
Laudus Rosenberg Global Long/Short Equity
Fund........................................ 1.99%
Laudus Rosenberg Value Long/Short Equity
Fund........................................ 1.74%
</Table>
Any amounts waived or reimbursed in a particular fiscal year will be subject to
repayment through the next two fiscal years, to the extent that the repayment
will not cause the Fund's net expenses to exceed the current limit (as stated in
CSIM's contractual undertaking) during the respective year. As of the year ended
March 31, 2005, the balance of recoupable expenses is as follows:
<Table>
<Caption>
Expires Expires
3/31/06 3/31/07
- ------------------------------------------------------------
Laudus Rosenberg U.S. Large
Capitalization Fund................... $33,231 $108,272
Laudus Rosenberg U.S. Large
Capitalization Growth Fund............ 18,090 89,616
Laudus Rosenberg U.S. Discovery Fund.... 17,836 103,889
Laudus Rosenberg International Equity
Fund.................................. 34,256 231,815
Laudus Rosenberg International Small
Capitalization Fund................... 45,582 152,631
Laudus Rosenberg U.S. Large/Mid
Capitalization Long/Short Equity
Fund.................................. 21,271 73,659
Laudus Rosenberg Global Long/Short
Equity Fund........................... 47,220 104,929
Laudus Rosenberg Value Long/Short Equity
Fund.................................. 6,288 65,684
</Table>
BISYS Fund Services Ohio, Inc. ("BISYS" or the "Administrator"), a wholly-owned
subsidiary of The BISYS Group, Inc., serves as the Trust's administrator and
assists the Trust in all aspects of its administration and operation. The
Administrator is entitled to a complex level fee, computed and paid monthly,
based upon the following schedule: 0.00% of average daily net assets of the
Trust from $0 to $25 million, 0.09% of average daily net assets from $25 million
to $500 million, 0.07% on
Laudus Funds Annual Report 131
Financial Statements--Notes to Financial Statements continued
the next $500 million of average daily net assets, and 0.04% of average daily
net assets over $1 billion.
BISYS also serves the Funds as fund accountant and transfer agent. Under the
terms of separate agreements, BISYS is entitled to receive a fixed fee per Fund
for accounting and a per account fee, subject to a minimum charge, for transfer
agent services, including reimbursement of certain expenses. BISYS may, from
time to time, perform additional services for which it will receive additional
fees.
The Trust has adopted Distribution and Shareholder Service Plans with respect to
its Investor Shares pursuant to Rule 12b-1 under the 1940 Act. The Investor
Shares of the Funds are sold on a continuous basis, by the Trust's Distributor,
Laudus Distributor, Inc. (the "Distributor"), an indirect wholly-owned
subsidiary of The BISYS Group, Inc. Under the Distribution and Shareholder
Service Plans, the Funds pay the Distributor for expenses primarily intended to
result in the sale of the Investor Shares. The annual Distribution and
Shareholder Service Fee consists of up to 0.25% of the respective average daily
net assets of the Investor Shares. In addition, the Trustees have authorized
each Fund to pay up to 0.15% of its average daily net assets attributable to
Investor Shares for sub-transfer and sub-accounting services in connection with
such shares.
Various service organizations act as servicing agents of the Adviser Shares of
the Laudus Rosenberg U.S. Small Capitalization Fund. Such shares are subject to
an annual Service Fee of up to 0.25% of the average daily net assets
attributable to such shares in accordance with a Service Plan adopted by the
Trust. In addition, the Trustees have authorized the Fund to pay up to 0.05% of
its average daily net assets attributable to Adviser Shares for sub-transfer
services in connection with such shares.
Interested Trustees and officers of the Trust do not receive compensation from
the Trust. Prior to February 2, 2004, the Trust paid each Independent Trustee
aggregate compensation of $45,540 per year plus an additional fee for each
meeting attended. The Trust did not pay any pension or retirement benefits for
its Trustees. Currently the Trust pays each Independent Trustee aggregate
compensation of $55,000 per year. This sum includes a quarterly retainer fee of
$8,788 and an additional $3,790 for each regular meeting attended.
In addition, a retirement plan has been instituted for all of the Independent
Trustees of the Trust and Trustees of the Laudus Variable Insurance Trust (the
"Retirement Plan"). Under the terms of the Retirement Plan, upon retirement or
other termination from service from the Trust and Laudus Variable Insurance
Trust (other than termination for cause), a retiring Independent Trustee who has
served as Independent Trustee for at least five years shall be paid a lump sum
cash payment (the "Retirement Payment"). The Retirement Payment shall be equal
to $10,000 for each year that the Trustee has served as an Independent Trustee
of the Trust and the Laudus Variable Insurance Trust, including years of service
prior to the adoption of the Retirement Plan. However, beginning April 1, 2005,
each Independent Trustee is permitted to make a one-time election to have the
$10,000 attributable to service for the coming year adjusted up or down at the
end of each subsequent year based on the unweighted average performance of
Institutional Shares of each Fund of the Trust and Class 2 Shares of the sole
series of the Laudus Variable Insurance Trust that is in operation for all of
such year. Each Independent Trustee also was given the opportunity to make a
one-time election to have previously accrued benefits fluctuate beginning April
1, 2005 based on performance of the Funds as described in the previous sentence.
As a result, the amount of the Retirement Payment payable to any Independent
Trustee may increase or decrease based upon performance of the Funds. The
portion of the total Retirement Payment owed to an Independent Trustee upon his
or her retirement that is payable by any Fund will be determined based on the
relative net assets of the Funds of the Trust and the sole series of the Laudus
Variable Insurance Trust in operation on the date of the Independent Trustee's
retirement.
4. EARLY REDEMPTION FEE.
For the Funds, certain shares purchased on or after July 30, 2001, that were
redeemed or exchanged in less than 30 days, are assessed a fee of 2% of the
current net asset value of the shares. The fee, which is applied to shares
redeemed or exchanged in the order in which they are purchased, is retained by
the Fund and is intended to limit short-term trading in the Funds, or to the
extent short-term trading persists, to impose the costs of that
132 Laudus Funds Annual Report
Financial Statements--Notes to Financial Statements continued
activity on the shareholders who engage in it. Such amounts are included in the
proceeds from shares issued, on the Statement of Changes in Net Assets. For the
year ended March 31, 2005, early redemption fees assessed were as follows:
<Table>
<Caption>
Early
Redemption
Fees
- -----------------------------------------------------------
Laudus Rosenberg U.S. Large Capitalization
Fund........................................ $ --
Laudus Rosenberg U.S. Large Capitalization
Growth Fund................................. 232
Laudus Rosenberg U.S. Discovery Fund.......... 5,073
Laudus Rosenberg U.S. Small Capitalization
Fund........................................ 3,916
Laudus Rosenberg International Equity Fund.... 6,090
Laudus Rosenberg International Small
Capitalization Fund......................... 56,880
Laudus Rosenberg U.S. Large/Mid Capitalization
Long/Short Equity Fund...................... 2,453
Laudus Rosenberg Global Long/Short Equity
Fund........................................ 9,377
Laudus Rosenberg Value Long/Short Equity
Fund........................................ 9,330
</Table>
5. SECURITY PURCHASES AND SALES.
For the year ended March 31, 2005, purchases and sales of securities (excluding
short-term securities) were as follows:
<Table>
<Caption>
Purchases Sales
- ------------------------------------------------------------
Laudus Rosenberg U.S. Large
Capitalization Fund.......... $ 57,661,727 $ 59,369,669
Laudus Rosenberg U.S. Large
Capitalization Growth Fund... 5,332,212 5,070,546
Laudus Rosenberg U.S. Discovery
Fund......................... 305,418,513 114,814,785
Laudus Rosenberg U.S. Small
Capitalization Fund.......... 861,916,188 951,791,446
Laudus Rosenberg International
Equity Fund.................. 20,462,101 8,631,147
Laudus Rosenberg International
Small Capitalization Fund.... 553,151,406 155,604,086
Laudus Rosenberg U.S. Large/
Mid Capitalization Long/Short
Equity Fund.................. 43,214,772 47,875,691
Laudus Rosenberg Global Long/
Short Equity Fund............ 27,201,433 30,271,513
Laudus Rosenberg Value Long/
Short Equity Fund............ 113,253,497 119,471,837
</Table>
6. LINE OF CREDIT.
The custodian has established a loan agreement for a maximum amount of 10% of
total net assets for the Laudus Rosenberg Value Long/Short Equity Fund for
temporary purposes. In addition, the Laudus Rosenberg U.S. Large Capitalization
Fund, Laudus Rosenberg U.S. Large Capitalization Growth Fund, Laudus Rosenberg
U.S. Discovery Fund, Laudus Rosenberg U.S. Small Capitalization Fund, Laudus
Rosenberg International Equity Fund, and Laudus Rosenberg International Small
Capitalization Fund had access to a committed line of credit up to a maximum of
$20,000,000, as established by the Fund's custodian. On June 15, 2004, the
committed line of credit maximum changed to $35,000,000. Interest is calculated
based on the market rates at the time of borrowing. A commitment fee of 0.09%
per annum will be incurred on the unused portion of the line of credit, which is
allocated to the applicable Funds based on net assets. There were no borrowings
on the line of credit for the year ended March 31, 2005.
Laudus Funds Annual Report 133
Financial Statements--Notes to Financial Statements continued
7. FEDERAL INCOME TAXES.
RECLASSIFICATIONS
Permanent book and tax basis differences will result in reclassifications to
capital accounts such as net operating losses, disposition of partnership
interests, and equalization payments. As of March 31, 2005, the following
reclassifications have been made to increase/(decrease) such accounts with
offsetting adjustments made to capital:
<Table>
<Caption>
Accumulated
Net Realized
Gains/(Losses)
Accumulated on Investments
Net Investment and Securities
Income/(Loss) Sold Short
- ---------------------------------------------------------------------------------------------
Laudus Rosenberg
U.S. Large Capitalization Fund............................ $ -- $ --
Laudus Rosenberg
U.S. Large Capitalization Growth Fund..................... -- --
Laudus Rosenberg
U.S. Discovery Fund....................................... 172,426 (172,426)
Laudus Rosenberg
U.S. Small Capitalization Fund............................ 759,323 (759,323)
Laudus Rosenberg
International Equity Fund................................. (46,497) 124,976
Laudus Rosenberg
International Small Capitalization Fund................... (41,236) 41,236
Laudus Rosenberg
U.S. Large/Mid Capitalization Long/Short Equity Fund...... 54,057 (11,148)
Laudus Rosenberg
Global Long/Short Equity Fund............................. 225,106 16,439
Laudus Rosenberg
Value Long/Short Equity Fund.............................. 379,955 (32,754)
</Table>
The tax character of distributions paid during the fiscal year ended March 31,
2005 was as follows:
<Table>
<Caption>
Ordinary Long-Term Total Taxable Total
Income Capital Gains Distributions Distributions Paid
- ------------------------------------------------------------------------------------------------------------------------
Laudus Rosenberg U.S. Large Capitalization Fund........ $ 385,330 $ 352,834 $ 738,184 $ 738,184
Laudus Rosenberg U.S. Large Capitalization Growth
Fund................................................... 28,198 -- 28,198 28,198
Laudus Rosenberg U.S. Discovery Fund................... 1,592,905 1,388,597 2,981,502 2,981,502
Laudus Rosenberg U.S. Small Capitalization Fund........ 2,204,683 144,186,941 146,391,624 146,391,624
Laudus Rosenberg International Equity Fund............. 90,132 -- 90,132 90,132
Laudus Rosenberg International Small Capitalization
Fund................................................... 5,709,267 7,138,964 12,848,231 12,848,231
Laudus Rosenberg U.S. Large/Mid Capitalization
Long/Short Equity Fund................................. -- -- -- --
Laudus Rosenberg Global Long/Short Equity Fund......... -- -- -- --
Laudus Rosenberg Value Long/Short Equity Fund.......... -- -- -- --
</Table>
The tax character of distributions paid during the fiscal year ended March 31,
2004 was as follows:
<Table>
<Caption>
Total
Ordinary Long-Term Total Taxable Distributions
Income Capital Gains Distributions Paid
- ----------------------------------------------------------------------------------------------------------------------
Laudus Rosenberg U.S. Large Capitalization Fund........... $ 145,000 $ -- $ 145,000 $ 145,000
Laudus Rosenberg U.S. Large Capitalization Growth Fund.... 45,000 -- 45,000 45,000
Laudus Rosenberg U.S. Discovery Fund...................... 732,029 180,616 912,645 912,645
Laudus Rosenberg U.S. Small Capitalization Fund........... 3,165,283 17,089,266* 20,254,549 20,254,549
</Table>
134 Laudus Funds Annual Report
Financial Statements--Notes to Financial Statements continued
<Table>
<Caption>
Total
Ordinary Long-Term Total Taxable Distributions
Income Capital Gains Distributions Paid
- ----------------------------------------------------------------------------------------------------------------------
Laudus Rosenberg International Equity Fund................ 120,000 -- 120,000 120,000
Laudus Rosenberg International Small Capitalization
Fund...................................................... 794,958 -- 794,958 794,958
Laudus Rosenberg European Fund............................ 150,000 -- 150,000 150,000
Laudus Rosenberg U.S. Large/Mid Capitalization Long/Short
Equity Fund............................................... -- -- -- --
Laudus Rosenberg Global Long/Short Equity Fund............ -- -- -- --
Laudus Rosenberg Value Long/Short Equity Fund............. -- -- -- --
* The Fund's net long-term capital gains distribution designated for federal income tax purposes differs from the
amount on the Statement of Changes due to the utilization of earnings and profit distributed to shareholders upon
redemption of shares. As such, the total amount designated for federal income tax purposes for long-term capital
gains is $17,352,076.
</Table>
As of March 31, 2005, the following is the net capital loss carry forward, which
is available to offset future realized gains.
<Table>
<Caption>
Expires
----------------------------------------------------------------------------------------------
2006 2007 2008 2009 2010 2011 2012 2013
----------------------------------------------------------------------------------------------
Laudus Rosenberg
U.S. Large Capitalization
Fund......................... $ -- $-- $ -- $ -- $ -- $ -- $ -- $ --
Laudus Rosenberg
U.S. Large Capitalization
Growth Fund................... -- -- -- -- 320,412 451,611 -- 193,612
Laudus Rosenberg
U.S. Discovery Fund........... -- -- -- -- -- -- -- --
Laudus Rosenberg
U.S. Small Capitalization
Fund.......................... -- -- -- -- -- -- -- --
Laudus Rosenberg
International Equity Fund..... 282,014 -- 7,313 -- 300,427 1,715,777 -- --
Laudus Rosenberg
International Small
Capitalization Fund........... -- -- -- -- -- -- -- --
Laudus Rosenberg
U.S. Large/Mid Capitalization
Long/Short Equity Fund........ -- -- 429,084 -- 659,336 -- 2,980,970 385,119
Laudus Rosenberg
Global Long/Short Equity
Fund.......................... -- -- -- -- 397,465 -- 1,873,304 177,288
Laudus Rosenberg
Value Long/Short Equity
Fund.......................... -- -- 27,982,004 11,040,106 -- -- 20,890,231 --
<Caption>
Expires
-----------
Total
-----------
Laudus Rosenberg
U.S. Large Capitalization
Fund......................... $ --
Laudus Rosenberg
U.S. Large Capitalization
Growth Fund................... 965,635
Laudus Rosenberg
U.S. Discovery Fund........... --
Laudus Rosenberg
U.S. Small Capitalization
Fund.......................... --
Laudus Rosenberg
International Equity Fund..... 2,305,531
Laudus Rosenberg
International Small
Capitalization Fund........... --
Laudus Rosenberg
U.S. Large/Mid Capitalization
Long/Short Equity Fund........ 4,454,509
Laudus Rosenberg
Global Long/Short Equity
Fund.......................... 2,448,057
Laudus Rosenberg
Value Long/Short Equity
Fund.......................... 59,912,341
</Table>
Net capital losses incurred after October 31 and within the taxable year are
deemed to arise on the first business day of the Funds' next taxable year. For
the year ended March 31, 2005, the Funds deferred to April 1, 2005 post October
capital losses of:
<Table>
<Caption>
Capital Losses Currency Losses
- ---------------------------------------------------------------------------------------------------
Laudus Rosenberg U.S. Large Capitalization Fund............. $ -- $ --
Laudus Rosenberg U.S. Large Capitalization Growth Fund...... -- --
Laudus Rosenberg U.S. Discovery Fund........................ -- --
Laudus Rosenberg U.S. Small Capitalization Fund............. -- --
Laudus Rosenberg International Equity Fund.................. -- 39,214
Laudus Rosenberg International Small Capitalization Fund.... -- 33,397
Laudus Rosenberg U.S. Large/Mid Capitalization Long/Short
Equity Fund................................................. -- --
Laudus Rosenberg Global Long/Short Equity Fund.............. -- 7,726
Laudus Rosenberg Value Long/Short Equity Fund............... -- --
</Table>
Laudus Funds Annual Report 135
Financial Statements--Notes to Financial Statements continued
As of March 31, 2005, the components of distributable earnings/accumulated
(losses) on a tax basis were as follows:
<Table>
<Caption>
Undistributed
Undistributed Long-Term Accumulated Total
Ordinary Capital Accumulated Capital and Unrealized Accumulated
Income Gains Earnings Other Losses Appreciation Losses
- -----------------------------------------------------------------------------------------------------------------------
Laudus Rosenberg U.S. Large
Capitalization Fund........ $ 106,524 $1,941,119 $ 2,047,643 $ -- $ 7,061,121 $ 9,108,764
Laudus Rosenberg U.S. Large
Capitalization Growth Fund... 4,721 -- 4,721 (965,635) 443,477 (517,437)
Laudus Rosenberg U.S.
Discovery Fund............... -- 2,011,612 2,011,612 -- 35,166,957 37,178,569
Laudus Rosenberg U.S. Small
Capitalization Fund.......... 2,130,225 66,011,321 68,141,546 -- 298,635,801 366,777,347
Laudus Rosenberg
International Equity Fund.... 88,732 -- 88,732 (2,344,745) 3,496,630 1,240,617
Laudus Rosenberg
International Small
Capitalization Fund.......... 7,496,766 7,348,637 14,845,403 (33,397) 74,310,170 89,122,176
Laudus Rosenberg U.S. Large/
Mid Capitalization Long/Short
Equity Fund.................. -- -- -- (4,454,509) 3,903,731 (550,778)
Laudus Rosenberg Global Long/
Short Equity Fund............ -- -- -- (2,455,783) 2,891,373 435,590
Laudus Rosenberg Value Long/
Short Equity Fund............ -- -- -- (59,912,341) 26,397,172 (33,515,169)
</Table>
The difference between book basis and tax basis unrealized
appreciation/(depreciation) is attributable primarily to: tax deferral of losses
on wash sales, the realization for tax purposes of unrealized gains/(losses) on
certain derivative instruments, the difference between book and tax amortization
methods for premium and market discount, return of capital adjustments from
REITs, and unrealized gains/(losses) on investments in passive foreign
investment companies.
136 Laudus Funds Annual Report
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of Laudus Trust
In our opinion, the accompanying statements of assets and liabilities, including
the statements of portfolio investments and statements of securities sold short,
and the related statements of operations and of changes in net assets and the
financial highlights present fairly, in all material respects, the financial
position of Laudus Rosenberg U.S. Large Capitalization Fund, Laudus Rosenberg
U.S. Large Capitalization Growth Fund, Laudus Rosenberg U.S. Discovery Fund,
Laudus Rosenberg U.S. Small Capitalization Fund, Laudus Rosenberg International
Equity Fund, Laudus Rosenberg International Small Capitalization Fund, Laudus
Rosenberg U.S. Large/Mid Capitalization Long/Short Equity Fund, Laudus Rosenberg
Global Long/Short Equity Fund, and Laudus Rosenberg Value Long/Short Equity Fund
(the "Funds") at March 31, 2005, the results of each of their operations for the
year then ended, the changes in each of their net assets for each of the two
years in the period then ended, and the financial highlights for each of the
periods presented, in conformity with accounting principles generally accepted
in the United States of America. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audits to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities and securities sold short at March 31, 2005 by
correspondence with the custodians and brokers, provide a reasonable basis for
our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
May 27, 2005
Laudus Funds Annual Report 137
OTHER TAX INFORMATION (UNAUDITED)
For corporate shareholders, the following percentage of the total ordinary
income dividends paid during the fiscal year ended March 31, 2005, qualify for
the corporate dividends received deduction for the following Funds:
<Table>
<Caption>
Dividends Received
Deduction
- ---------------------------------------------------------------------------------
Laudus Rosenberg U.S. Large Capitalization Fund............. 100.00%
Laudus Rosenberg U.S. Large Capitalization Growth Fund...... 100.00%
Laudus Rosenberg U.S. Discovery Fund........................ 52.37%
Laudus Rosenberg U.S. Small Capitalization Fund............. 100.00%
Laudus Rosenberg International Equity Fund.................. 0.00%
Laudus Rosenberg International Small Capitalization Fund.... 0.00%
Laudus Rosenberg U.S. Large/Mid Capitalization Long/Short
Equity Fund................................................. 0.00%
Laudus Rosenberg Global Long/Short Equity Fund.............. 0.00%
Laudus Rosenberg Value Long/Short Equity Fund............... 0.00%
</Table>
The Laudus Rosenberg International Equity Fund, Laudus Rosenberg International
Small Capitalization Fund, and Laudus Rosenberg Global Long/Short Equity Fund
may elect to pass on the benefits of the foreign tax credit $28,602, $524,718
and $0 respectively, to its shareholders for the year ended March 31, 2005.
For the fiscal year March 31, 2005, certain dividends paid by the Funds may be
subject to maximum tax rate of 15% as provided for by the Jobs and Growth Tax
Relief Reconciliation Act of 2003. The Funds intend to designate the maximum
allowable as taxed at a maximum rate of 15%. Complete information will be
reported in conjunction with your 2005 Form 1099-DIV.
For the year ended March 31, 2005, the following Funds paid qualified dividend
income of:
<Table>
<Caption>
Qualified
Dividend Income
- ------------------------------------------------------------------------------
Laudus Rosenberg U.S. Large Capitalization Fund............. $ 385,330
Laudus Rosenberg U.S. Large Capitalization Growth Fund...... 28,198
Laudus Rosenberg U.S. Discovery Fund........................ 831,028
Laudus Rosenberg U.S. Small Capitalization Fund............. 2,204,683
Laudus Rosenberg International Equity Fund.................. 136,786
Laudus Rosenberg International Small Capitalization Fund.... 6,340,312
Laudus Rosenberg U.S. Large/Mid Capitalization Long/Short
Equity Fund................................................. --
Laudus Rosenberg Global Long/Short Equity Fund.............. --
Laudus Rosenberg Value Long/Short Equity Fund............... --
</Table>
138 Laudus Funds Annual Report
Trustees and Officers of Laudus Trust as of 3/31/05
<Table>
<Caption>
INTERESTED TRUSTEE
- ------------------------------------------------------------------------------------------------------------------
Name, Address* and
Age of Trustee; (Term Number of
of Office** and Portfolios in
Length of Principal Occupation(s) Fund Complex
Time Served) During Past Five Years Overseen Other Directorships Held by Trustee
- ------------------------------------------------------------------------------------------------------------------
Jeffrey M. Lyons(##) Executive Vice President, Active 10(#) Mr. Lyons is also a Trustee of the
50 Trader, Charles Schwab & Co., Inc., Laudus Variable Insurance Trust.
(since 1/04) July 2004 to present. Executive Vice
President, Asset Management Products
& Services, Charles Schwab & Co.,
Inc., September 2001 to July 2004.
Prior to September 2001, Mr. Lyons
was Executive Vice President, Mutual
Funds, Charles Schwab & Co., Inc.
INDEPENDENT TRUSTEES
- ------------------------------------------------------------------------------------------------------------------
Mariann Byerwalter(+) Chairman of JDN Corporate Advisory 63(***) Ms. Byerwalter is also a Trustee of
44 LLC. From 1996 to 2001, Ms. each portfolio of the Laudus Variable
(since 1/04) Byerwalter was the Vice President for Insurance Trust, The Charles Schwab
Business Affairs and Chief Financial Family of Funds, Schwab Investments,
Officer of Stanford University and, Schwab Annuity Portfolios and Schwab
in 2001, Special Adviser to the Capital Trust (consisting of 53
President of Stanford University. portfolios). She is on the Board of
Stanford University, America First
Companies, Omaha, NE (venture
capital/fund management), Redwood
Trust, Inc. (mortgage finance),
Stanford Hospitals and Clinics, SRI
International (research), PMI Group,
Inc. (mortgage insurance), Lucile
Packard Children's Hospital and
Pacific Life Insurance Company.
- ------------------------------------------------------------------------------------------------------------------
William A. Hasler(+) Dean Emeritus, Haas Schools of 63(***) Mr. Hasler is also a Trustee of each
63 Business, University of California, portfolio of the Laudus Variable
(since 1/04) Berkeley (higher education). Mr. Insurance Trust, The Charles Schwab
Hasler served as Dean until August Family of Funds, Schwab Investments,
1998. Schwab Annuity Portfolios and Schwab
Capital Trust (consisting of 53
portfolios). He is on the Board of
Directors of Aphton Corporation (bio-
pharmaceuticals), Mission West
Properties (commercial real estate),
TOUSA (home building), Stratex
Networks (a network equipment
corporation) and Solectron
Corporation where he is also
Non-Executive Chairman
(manufacturing). Mr. Hasler is also a
Public Governor and member of the
Executive Committee for the Pacific
Stock & Options Exchange.
- ------------------------------------------------------------------------------------------------------------------
Nils H. Hakansson(+) Sylvan C. Coleman Professor of 10(#) Mr. Hakansson is also a Trustee of
67 Finance and Accounting, Emeritus Haas the Laudus Variable Insurance Trust.
(since 3/90) School of Business, University of
California, Berkeley, July 1969 to
January 2003.
</Table>
(*) The mailing address of each of the Trustees is c/o Laudus Trust, 3435
Stelzer Road, Columbus, OH 43219.
(**) There is no stated term of office for the Trustees of the Trust.
(***) This includes 53 Schwab Funds, 9 series of the Trust and the sole series
of the Laudus Variable Insurance Trust.
(#) This includes 9 series of the Trust and the sole series of the Laudus
Variable Insurance Trust.
(##) Mr. Lyons is an "interested person," as defined in the 1940 Act, because
he is an officer and employee of Charles Schwab & Co.
(+) Member of the Audit Committee.
The Statement of Additional Information includes additional information about
Fund Trustees and is available, without charge, upon written request, or by
calling toll-free 1.866.452.8387.
Laudus Funds Annual Report 139
Trustees and Officers of Laudus Trust continued
OFFICERS OF LAUDUS TRUST
<Table>
<Caption>
- -------------------------------------------------------------------------------------------------------------------
Name, Address* and
Age of Officer (Term of
Office** and Length of Time Position with
Served) the Trust Principal Occupation(s) During Past Five Years
- -------------------------------------------------------------------------------------------------------------------
Jana Thompson, 46 President and Chief Senior Vice President, Charles Schwab & Co., Inc. and CSIM,
(1/04-present) Executive Officer February 2004 to present; Vice President, Charles Schwab &
Co., Inc., 2000 to February 2004.
- -------------------------------------------------------------------------------------------------------------------
Randall Fillmore, 44 Chief Compliance Senior Vice President, Institutional Compliance and Chief
(9/04-present) Officer Compliance Officer, CSIM, September 2004 to present; Vice
President, Charles Schwab & Co., Inc., and CSIM, 2002 to
2003; Vice President of Internal Audit, Charles Schwab &
Co., Inc., 2000 to 2002. Prior to 2000, with
PricewaterhouseCoopers.
- -------------------------------------------------------------------------------------------------------------------
Jeffrey Mortimer, 41 Vice President and Senior Vice President and Chief Investment Officer,
(6/04-present) Chief Investment equities, CSIM, May 2004 to present; Vice President CSIM,
Officer 1999 to May 2004.
- -------------------------------------------------------------------------------------------------------------------
Bill Thomas, 42 Vice President Senior Vice President, Charles Schwab & Co., Inc., Asset
(6/04-present) Management Products and Services and Fund Administration,
May 2000 to present; Managing Director, Scudder Kemper
Investments, 1997 to 2000.
- -------------------------------------------------------------------------------------------------------------------
Alison Baur, 40 Chief Legal Officer Vice President, Charles Schwab & Co., Inc. since June 1999;
(1/04-present) Associate General Counsel, Charles Schwab & Co., Inc. since
2003; Senior Corporate Counsel, Charles Schwab & Co., Inc.,
June 1999 to 2003; Chief Legal Officer & Secretary,
Excelsior Funds, 2001 to 2004; Chief Legal Officer,
Excelsior Directional Hedge Fund and Excelsior Private
Equity Funds, 2001 to 2004.
- -------------------------------------------------------------------------------------------------------------------
David Rosenberg, 40 Vice President Vice President, Investment Administration, CSIM, December
(6/04-present) 2001 to Present; Director of Investment Management, CSIM,
1998 to December 2001.
- -------------------------------------------------------------------------------------------------------------------
Daniel Kern, 43 Assistant Treasurer Vice President, Investment Operations, CSIM, December 2004
(3/05-present) to present; Vice President, Internal Audit, Charles Schwab
Corporation, January 2003 to December 2004. Prior to January
2003, Managing Director and Principal, Montgomery Asset
Management.
- -------------------------------------------------------------------------------------------------------------------
Alice Schulman, 55 Clerk Vice President & Assistant Secretary, CSIM, 2003 to present;
(1/04-present) Assistant Secretary, The Charles Schwab Bank, N.A., 2003 to
present; Assistant Secretary, Schwab Funds, 2000 to present;
Director, Project Management, CSIM, 2000 to 2003;
Consultant, 1998 to 2000.
- -------------------------------------------------------------------------------------------------------------------
Troy Sheets, 33 Chief Financial Officer Vice President of Financial Services, BISYS Fund Services,
(9/02-present) 2002 to present; Senior Manager, KPMG LLP, 2000 to 2002;
Manager, KPMG LLP, 1998 to 2000.
- -------------------------------------------------------------------------------------------------------------------
Elizabeth Lawrence, 41 Vice President Senior Vice President, BISYS Fund Services, 2001 to present;
(9/02-present) Vice President and Senior Manager, Client Services and
Operations, PFPC, Inc., May 2000 to 2001; Director of Client
Services, PFPC, Inc., 1997 to May 2000.
- -------------------------------------------------------------------------------------------------------------------
Alaina V. Metz, 37 Assistant Clerk Chief Administrative Officer, BISYS Fund Services, 1995 to
(6/99-present) present.
</Table>
(*) The mailing address of each of the officers is c/o Laudus Trust, 3435
Stelzer Road, Columbus, OH 43219.
(**) There is no stated term of office for the officers of the Trust.
140 Laudus Funds Annual Report
Definitions, Terms and Other Information
90 DAY T-BILL is a short-term discounted, government debt instrument of 90 days
or less, issued in $10,000 denominations that pay its face value at maturity.
The government issues Treasury bills weekly.
ALPHA is a measure of a fund's risk-adjusted return. Alpha can be used to
directly measure the value added or subtracted by a fund's manager. It is
calculated by measuring the difference between a fund's actual returns and its
expected performance given its level of market risk as measured by beta.
BETA is a measure of the volatility of a stock relative to the overall market. A
beta of less than one indicates lower historical risk than the market; a beta of
more than one indicates higher historical risk than the market.
GDP, OR GROSS DOMESTIC PRODUCT, is the market value of the goods and services
produced by labor and property in the United States.
MORGAN STANLEY CAPITAL INTERNATIONAL EUROPE, AUSTRALASIA, FAR EAST INDEX
(MSCI-EAFE(R)) is an international, unmanaged, weighted stock market index that
includes over 1,000 securities listed on the stock exchanges of 21 developed
market countries from Europe, Australia, and the Far East.
NOMURA GLOBAL SMALL CAP INDEX EXCLUDING THE U.S. (NGSCEXUS) is an unmanaged
index that represents the performance of companies in the lowest 15% by market
capitalization in 22 developed markets other than the U.S.
PRICE EARNINGS RATIO is the price of a stock divided by its historical earnings
per share.
PRICE TO BOOK compares the stock's market value to the value of the total assets
less the total liabilities.
PRICE TO CASH FLOW is the price of a stock dividend by its reported cash flow
per share.
RELATIVE STRENGTH is the rate that a stock falls relative to other stocks in a
falling market or rises relative to other stocks in a rising market.
RETURN ON EQUITY represents the amount earned on a company's common stock
investment for a given period, calculated by dividing common stock equity into
net income for the period after preferred stock dividends but before common
stock dividends.
RUSSELL 1000(R) GROWTH INDEX measures the performance of those Russell 1000
companies with higher price-to-book ratios and higher forecasted growth values.
RUSSELL 1000(R) INDEX measures the performance of the 1,000 largest companies in
the Russell 3000 Index, which represents approximately 92% of the total market
capitalization of the Russell 3000 Index.
RUSSELL 2000(R) INDEX measures the performance of the 2,000 smallest companies
in the Russell 3000 Index, which represents approximately 8% of the total market
capitalization of the Russell 3000 Index.
RUSSELL 2500(TM) INDEX measures the performance of the 2,500 smallest companies
in the Russell 3000 Index, which represents approximately 17% of the total
market capitalization of the Russell 3000 Index.
PROXY VOTING
A description of the policies and procedures that the Funds use to determine how
to vote proxies relating to portfolio securities is available without charge,
upon request by visiting www.laudusfunds.com, the Securities and Exchange
Commission's website at http://www.sec.gov, or by contacting Laudus Funds at
866.452.8387.
Information regarding how the Funds voted proxies relating to portfolio
securities during the most recent 12-month period ended June 30 is available
without charge, upon request by visiting www.laudusfunds.com, or the Securities
and Exchange Commission's website at www.sec.gov.
QUARTERLY DISCLOSURE OF PORTFOLIO HOLDINGS
The Funds file their complete schedule of portfolio holdings with the SEC for
the first and third quarters of each fiscal year on Form N-Q. The Funds' Forms
N-Q are available on the SEC's website at www.sec.gov and may be reviewed and
copied at the SEC's Public Reference Room in Washington, DC. Call 1-800-SEC-0330
for information on the operation of the Public Reference Room. The information
filed on a fund's most recent Form N-Q is also available at www.laudusfunds.com.
Laudus Funds Annual Report 141
(This Page Intentionally Left Blank)
142 Laudus Funds Annual Report
(This Page Intentionally Left Blank)
Laudus Funds Annual Report 143
(This Page Intentionally Left Blank)
144 Laudus Funds Annual Report
(LAUDUS FUNDS LOGO)
COMMAND PERFORMANCE(TM)
FOR MORE INFORMATION ABOUT THE FUNDS:
<Table>
MANAGER INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Charles Schwab Investment Management, Inc. PricewaterhouseCoopers LLP
101 Montgomery Street 333 Market Street
San Francisco, California 94104 San Francisco, California 94105-2119
SUB-ADVISER LEGAL COUNSEL
AXA Rosenberg Investment Management LLC Morgan, Lewis & Bockius LLP
4 Orinda Way, Building E 1701 Market Street
Orinda, California 94563 Philadelphia, Pennsylvania 19103
ADMINISTRATOR,TRANSFER AGENT AND SHAREHOLDER SERVICES
DIVIDEND PAYING AGENT 1.866.452.8387 Institutional Shares
BISYS Fund Services Ohio, Inc. 1.866.452.8387 Registered Investment Professionals
3435 Stelzer Road 1.800.447.3332 Investor and Adviser Shares
Columbus, Ohio 43219
www.laudusfunds.com
CUSTODIANS OF ASSETS
Custodial Trust Company
101 Carnegie Center
Princeton, New Jersey 08540
State Street Bank and Trust Company
Mutual Funds Division
Boston, Massachusetts 02102
</Table>
This report is for the information of the shareholders of the Laudus Trust. Its
use in connection with any offering of the Trust's shares is authorized only in
case of concurrent or prior delivery of the current prospectus.
2005-3054-BAR
ITEM 2. CODE OF ETHICS.
Disclose whether, as of the end of the period covered by the report, the
registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant or a
third party. If the registrant has not adopted such a code of ethics,
explain why it has not done so.
THE REGISTRANT HAS ADOPTED A CODE OF ETHICS THAT APPLIES TO THE
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICER, PRINCIPAL FINANCIAL OFFICER,
PRINCIPAL ACCOUNTING OFFICER OR CONTROLLER, OR PERSONS PERFORMING SIMILAR
FUNCTIONS. THIS CODE OF ETHICS IS INCLUDED AS EXHIBIT 12 (A)(1).
The registrant must briefly describe the nature of any amendment, during
the period covered by the report, to a provision of its code of ethics that
applies to the registrant's principal executive officer, principal
financial officer, principal accounting officer or controller, or persons
performing similar functions, regardless of whether these individuals are
employed by the registrant or a third party, and that relates to any
element of the code of ethics definition enumerated in paragraph (b) of
this Item. The registrant must file a copy of any such amendment as an
exhibit pursuant to Item 12(a)(1), unless the registrant has elected to
satisfy paragraph (f) of this Item by posting its code of ethics on its
website pursuant to paragraph (f)(2) of this Item, or by undertaking to
provide its code of ethics to any person without charge, upon request,
pursuant to paragraph (f)(3) of this Item.
If the registrant has, during the period covered by the report, granted a
waiver, including an implicit waiver, from a provision of the code of
ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions, regardless of whether these
individuals are employed by the registrant or a third party, that relates
to one or more items set forth in paragraph (b) of this Item, the
registrant must briefly describe the nature of the waiver, the name of the
person to whom the waiver was granted, and the date of the waiver.
DURING THE PERIOD COVERED BY THE REPORT, WITH RESPECT TO THE REGISTRANT'S
CODE OF ETHICS THAT APPLIES TO ITS PRINCIPAL EXECUTIVE OFFICER, PRINCIPAL
FINANCIAL OFFICER, PRINCIPAL ACCOUNTING OFFICER OR CONTROLLER, OR PERSONS
PERFORMING SIMILAR FUNCTIONS; THERE HAVE BEEN NO AMENDMENTS TO, NOR ANY
WAIVERS GRANTED FROM, A PROVISION THAT RELATES TO ANY ELEMENT OF THE CODE
OF ETHICS DEFINITION ENUMERATED IN PARAGRAPH (B) OF THIS ITEM 2.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant's board of directors has
determined that the registrant either:
(i) Has at least one audit committee financial expert serving
on its audit committee; or
(ii) Does not have an audit committee financial expert serving
on its audit committee.
(2) If the registrant provides the disclosure required by
paragraph (a)(1)(i) of this Item, it must disclose the name of the
audit committee financial expert and whether that person is
"independent." In order to be considered "independent" for
purposes of this Item, a member of an audit committee may not,
other than in his or her capacity as a member of the audit
committee, the board of directors, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory,
or other compensatory fee from the issuer; or
(ii) Be an "interested person" of the investment company as
defined in Section 2(a)(19) of the Act (15 U.S.C.
80a-2(a)(19)).
(3) If the registrant provides the disclosure required by
paragraph (a)(1)(ii) of this Item, it must explain why it does not
have an audit committee financial expert.
3(a)(1) THE REGISTRANT'S BOARD OF DIRECTORS HAS DETERMINED THAT THE REGISTRANT
HAS AT LEAST ONE AUDIT COMMITTEE FINANCIAL EXPERT SERVING ON ITS AUDIT
COMMITTEE.
3(a)(2) THE AUDIT COMMITTEE FINANCIAL EXPERT IS NILS H. HAKANSSON, WHO IS
"INDEPENDENT" FOR PURPOSES OF THIS ITEM 3 OF FORM N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Disclose, under the caption Audit Fees, the aggregate fees billed
for each of the last two fiscal years for professional services rendered by the
principal accountant for the audit of the registrant's annual financial
statements or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for those fiscal
years.
2004: $254,650 2005: $237,605
(b) Disclose, under the caption Audit-Related Fees, the aggregate fees
billed in each of the last two fiscal years for assurance and related services
by the principal accountant that are reasonably related to the performance of
the audit of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
2004: NONE 2005: NONE
(c) Disclose, under the caption Tax Fees, the aggregate fees billed in
each of the last two fiscal years for professional services rendered by the
principal accountant for tax compliance, tax advice, and tax planning.
Registrants shall describe the nature of the services comprising the fees
disclosed under this category.
2004: $69,075 2005: $65,365
FEES FOR ARE FOR PREPARATION AND REVIEW OF TAX RETURNS AND
REVIEW OF EXCISE DISTRIBUTIONS.
(d) Disclose, under the caption All Other Fees, the aggregate fees
billed in each of the last two fiscal years for products and services provided
by the principal accountant, other than the services reported in paragraphs (a)
through (c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
2004: NONE 2005: NONE
(e) (1) Disclose the audit committee's pre-approval policies and
procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
REGISTRANT'S AUDIT COMMITTEE MEETS WITH THE PRINCIPAL
ACCOUNTANTS AND MANAGEMENT TO REVIEW AND PRE-APPROVE ALL AUDIT
SERVICES TO BE PROVIDED BY THE PRINCIPAL ACCOUNTANTS. THE AUDIT
COMMITTEE SHALL PRE-APPROVE ALL AUDITING SERVICES AND
PERMISSIBLE NON-AUDIT SERVICES (E.G., TAX SERVICES) TO BE
PROVIDED TO THE FUNDS BY THE AUDITOR, INCLUDING THE FEES
THEREFOR AND HAS NOT ADOPTED PRE-APPROVAL POLICIES AND
PROCEDURES AS DESCRIBED IN RULE 2-01(C)(7)(I)(B) OF REG. S-X.
(2) Disclose the percentage of services described in each of
paragraphs (b) through (d) of this Item that were approved by the audit
committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
2004: 0% 2005: 0%
(f) If greater than 50 percent, disclose the percentage of hours
expended on the principal accountant's engagement to audit the registrant's
financial statements for the most recent fiscal year that were attributed to
work performed by persons other than the principal accountant's full-time,
permanent employees.
2004: 0% 2005: 0%
(g) Disclose the aggregate non-audit fees billed by the registrant's
accountant for services rendered to the registrant, and rendered to the
registrant's investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the adviser that provides ongoing services to the registrant for
each of the last two fiscal years of the registrant.
2004: $69,075 2005: $65,365
(h) Disclose whether the registrant's audit committee of the board of
directors has considered whether the provision of nonaudit services that were
rendered to the registrant's investment adviser (not including any subadviser
whose role is primarily portfolio management and is subcontracted with or
overseen by another investment adviser), and any entity controlling, controlled
by, or under common control with the investment adviser that provides ongoing
services to the registrant that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the
principal accountant's independence.
NOT APPLICABLE.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
(a) If the registrant is a listed issuer as defined in Rule 10A-3
under the Exchange Act (17CFR 240.10A-3), state whether or not
the registrant has a separately-designated standing audit
committee established in accordance with Section 3(a)(58)(A)
of the Exchange Act (15 U.S.C. 78c(a)(58)(A)). If the
registrant has such a committee, however designated, identify
each committee member. If the entire board of directors is
acting as the registrant's audit committee as specified in
Section 3(a)(58)(B) of the Exchange Act (15 U.S.C.
78c(a)(58)(B)), so state.
(b) If applicable, provide the disclosure required by Rule
10A-3(d) under the Exchange Act (17CFR 240.10A-3(d)) regarding
an exemption from the listing standards for all audit
committees.
NOT APPLICABLE FOR TRUST - NOT A LISTED REGISTRANT.
ITEM 6. SCHEDULE OF INVESTMENTS.
File Schedule I - Investments in securities of unaffiliated issuers as of the
close of the reporting period as set forth in Section 210.12-12 of Regulation
S-X, unless the schedule is included as part of the report to shareholders filed
under Item 1 of this Form.
NOT APPLICABLE - COMPLETE SCHEDULE OF INVESTMENTS IS INCLUDED IN ITEM 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual
report on this Form N-CSR must, unless it invests exclusively in non-voting
securities, describe the policies and procedures that it uses to determine how
to vote proxies relating to portfolio securities, including the procedures that
the company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules
thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment adviser, or any other third party, that the company uses, or that are
used on the company's behalf, to determine how to vote proxies relating to
portfolio securities.
NOT APPLICABLE - DISCLOSURE ONLY REQUIRED FOR CLOSED-END FUNDS.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
If the registrant is a closed-end management investment company that is filing
an annual report on this Form N-CSR, provide the information specified in
paragraphs (a) and (b) of this Item with respect to portfolio managers.
NOT APPLICABLE - DISCLOSURE ONLY REQUIRED FOR CLOSED-END FUNDS.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
If the registrant is a closed-end management investment company, provide the
information specified in paragraph (b) of this Item with respect to any purchase
made by or on behalf of the registrant or any "affiliated purchaser," as defined
in Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of shares
or other units of any class of the registrant's equity securities that is
registered by the registrant pursuant to Section 12 of the Exchange Act (15
U.S.C. 781).
NOT APPLICABLE - DISCLOSURE ONLY REQUIRED FOR CLOSED-END FUNDS AND AFFILIATED
PURCHASERS.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Describe any material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors, where those changes
were implemented after the registrant last provided disclosure in response to
the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR 240.14a-101), or
this Item.
NO MATERIAL CHANGES.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive
and principal financial officers, or persons performing similar functions,
regarding the effectiveness of the registrant's disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Act (17 CFR 270.30a-3(c))) as
of a date within 90 days of the filing date of the report that includes the
disclosure required by this paragraph, based on the evaluation of these controls
and procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30a-3(b)) and
Rules 13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240.13a-15(b) or
240.15d-15(b)).
THE REGISTRANT'S PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER
HAVE CONCLUDED, BASED ON THEIR EVALUATION OF THE REGISTRANT'S DISCLOSURE
CONTROLS AND PROCEDURES AS CONDUCTED WITHIN 90 DAYS OF THE FILING DATE OF THIS
REPORT, THAT THESE DISCLOSURE CONTROLS AND PROCEDURES ARE REASONABLY EFFECTIVE
TO ENSURE THAT INFORMATION REQUIRED TO BE DISCLOSED BY THE REGISTRANT ON FORM
N-CSR IS (I) ACCUMULATED AND COMMUNICATED TO THE INVESTMENT COMPANY'S
MANAGEMENT, INCLUDING ITS CERTIFYING OFFICERS, TO ALLOW TIMELY DECISIONS
REGARDING REQUIRED DISCLOSURE; AND (II) RECORDED, PROCESSED, SUMMARIZED AND
REPORTED WITHIN THE TIME PERIODS SPECIFIED IN THE SECURITIES AND EXCHANGE
COMMISSION'S RULES AND FORMS.
(b) Disclose any change in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that
occurred during the second fiscal quarter of the period covered by this report
that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
THERE WERE NO CHANGES IN THE REGISTRANT'S INTERNAL CONTROL OVER FINANCIAL
REPORTING THAT OCCURRED DURING THE SECOND FISCAL QUARTER OF THE PERIOD COVERED
BY THIS REPORT THAT HAVE MATERIALLY AFFECTED OR ARE REASONABLY LIKELY TO
MATERIALLY AFFECT, THE REGISTRANT'S INTERNAL CONTROL OVER FINANCIAL REPORTING.
ITEM 12. EXHIBITS.
(a) File the exhibits listed below as part of this Form. Letter or
number the exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of
the disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit. THE CODE OF ETHICS
THAT IS THE SUBJECT OF THE DISCLOSURE REQUIRED BY ITEM 2 IS ATTACHED HERETO.
(a)(2) A separate certification for each principal executive officer
and principal financial officer of the registrant as required by Rule 30a-2(a)
under the Act (17 CFR 270.30a-2). CERTIFICATIONS PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002 ARE ATTACHED HERETO.
(a)(3) Any written solicitation to purchase securities under Rule 23c-1
under the Act (17 CFR 270.23c-1) sent or given during the period covered by the
report by or on behalf of the registrant to 10 or more persons. NOT APPLICABLE.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange
Act, provide the certifications required by rule 30a-2(b) under the Act as an
exhibit. A certification furnished pursuant to this paragraph will not be deemed
"filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to
the liability of that section. Such certification will not be deemed to be
incorporated by reference into any filing under the Securities Act of 1933 or
the Exchange Act, except to the extent that the registrant incorporates it by
reference. CERTIFICATIONS PURSUANT TO 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.
(Registrant) Laudus Trust
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By (Signature and Title)* /s/Troy A. Sheets, CFO
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Date June 6, 2005
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Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/Troy A. Sheets, CFO
----------------------------
Date June 6, 2005
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By (Signature and Title)* /s/Jana D. Thompson, President
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Date June 6, 2005
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* Print the name and title of each signing officer under his or her signature.