UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-CSR
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CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-7527
Turner Funds
(Exact name of registrant as specified in charter)
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1205 Westlakes Drive Suite 100
Berwyn, PA 19312
(Address of principal executive offices) (Zip code)
Turner Funds
P.O. Box 219805
Kansas City, MO 64121-9805
(Name and address of agent for service)
Registrant's telephone number, including area code: 1-800-224-6312
Date of fiscal year end: September 30, 2003
Date of reporting period: September 30, 2003
Item 1. Reports to Stockholders.
[LOGO OMITTED] ANNUAL REPORT
September 30, 2003
GROWTH FUNDS
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Turner Disciplined Large Cap
Growth Fund
Turner Large Cap Growth
Opportunities Fund
Turner Midcap Growth Fund
Turner Small Cap Growth Fund
Turner Micro Cap Growth Fund
VALUE FUNDS
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Turner Large Cap Value Fund
Turner Core Value Fund
Turner Small Cap Value Fund
Turner Small Cap Value
Opportunities Fund
CORE FUNDS
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Turner Small Cap Equity Fund
SECTOR/SPECIALTY FUNDS
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Turner Technology Fund
Turner Concentrated Growth Fund
Turner New Enterprise Fund
Turner Financial Services Fund
Turner Healthcare & Biotechnology Fund
Turner Tax Managed U.S. Equity Fund
Turner Strategic Value and High Income Fund
FIXED INCOME FUNDS
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Turner Core Fixed Income Fund
Turner Total Return Fixed Income Fund
Turner High Yield Fund
Turner Ultra Short Duration Fixed Income Fund
Turner Short Duration Fixed Income Fund
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CONTENTS
1 Letter to Shareholders
6 Total returns of Turner Funds
14 Investment review:
Turner Disciplined Large Cap
Growth Fund
15 Investment review:
Turner Large Cap Growth
Opportunities Fund
16 Investment review:
Turner Midcap Growth Fund
17 Investment review:
Turner Small Cap Growth Fund
18 Investment review:
Turner Micro Cap Growth Fund
19 Investment review:
Turner Large Cap Value Fund
20 Investment review:
Turner Core Value Fund
21 Investment review:
Turner Small Cap Value Fund
22 Investment review:
Turner Small Cap Value
Opportunities Fund
23 Investment review:
Turner Small Cap Equity Fund
24 Investment review:
Turner Technology Fund
25 Investment review:
Turner Concentrated Growth Fund
26 Investment review:
Turner New Enterprise Fund
27 Investment review:
Turner Financial Services Fund
28 Investment review:
Turner Healthcare & Biotechnology Fund
29 Investment review:
Turner Tax Managed U.S. Equity Fund
30 Investment review:
Turner Strategic Value and High Income Fund
31 Investment review:
Turner Core Fixed Income Fund
32 Investment review:
Turner Total Return Fixed Income Fund
33 Investment review:
Turner High Yield Fund
34 Investment review:
Turner Ultra Short Duration Fixed Income Fund
35 Investment review:
Turner Short Duration Fixed Income Fund
36 Financial Statements
132 Notes to Financial Statements
141 Report of Independent Auditors
142 Notice to Shareholders
143 Trustees and Officers of the Trust
TURNER FUNDS
The Turner Funds currently offer a series of twenty two no-load mutual funds to
individual and institutional investors. The minimum initial investment in a
Turner Fund for regular accounts is $2,500 and $2,000 for individual retirement
accounts. The minimum amount for subsequent investments is $50.
Turner Investment Management, LLC, an affiliate of Turner Investment Partners,
serves as the investment adviser for the Small Cap Equity and Small Cap Value
Opportunities Funds. Turner Investment Partners, Inc., based in Berwyn,
Pennsylvania, serves as the investment adviser for the remaining Funds. Turner
Investment Partners, Inc., founded in 1990, invests more than $10 billion in
equity, fixed-income, and balanced portfolios on behalf of individuals and
institutions.
Clover Capital Management, Inc., based in Pittsford, New York, serves as the
investment sub-adviser to the Large Cap Value, Core Value and Small Cap Value
Funds and the Core Fixed Income Fund.
SHAREHOLDER SERVICES
Turner Funds shareholders receive annual and semiannual reports, quarterly
account statements and a quarterly newsletter. Shareholders who have questions
about their accounts may call a toll-free telephone number, 1-800-224-6312,
visit our website, www.turnerinvestments.com. Or they may write to Turner Funds,
P.O. Box 219805, Kansas City, Missouri 64121-9805.
LETTER TO SHAREHOLDERS
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September 2003
TO OUR SHAREHOLDERS
What a difference a year makes. That variation of a lyric from a Dinah
Washington ballad seems an appropriate theme for this letter reporting on the
performance of the stock and bond markets in the 12-month period ended September
30, 2003. The reason: it aptly summarizes the sharply differing results for the
period compared with the previous 12 months.
Of course, when it comes to the capital markets, very little ever remains
static. As J.P. Morgan famously pointed out at the turn of the last century,
"Markets will fluctuate." But the changes in performance patterns of the stock
and bond markets (and our own Turner Funds) in the past 12 months have been
especially dramatic and noteworthy.
BEFORE: A BEAR MARKET GROWLED
Twelve months ago, stocks were mired in the worst bear market in modern times,
en route to recording a third consecutive year of losses. Market sentiment was
extremely skittish: investors were wary of stocks and skeptical that corporate
earnings, the economy, and the stock market would pick up soon. As a result, for
the 12-month period ended September 30, 2002, the bellwether S&P 500 Index sank
20.49%, a showing that was more than 30 percentage points below the average
annual return since 1926. And all of our stock funds posted losses.
Bonds, on the other hand, benefited from the pain that the stock market was
dishing out. Investors sought refuge in the relative stability and positive
returns of fixed income. Falling interest rates, a reflection of a lackluster
economy, boosted bond prices. As a result, for that same 12-month period, the
Lehman Aggregate Bond Index gained 8.56%, a return that was more than one
percentage point above its 10-year annualized average. And our own bond funds
had soundly positive returns.
Now, fast-forward to the most recent 12 months, and one can only marvel at the
difference.
Just about everything came up positive for the stock market in the period. The
S&P 500 Index rose 24.39%, or 14 percentage points better than the long-term
average. All 10 market sectors recorded gains: sector returns of the Russell
3000 Index, a broad-based index of large, mid-sized, and small stocks, ranged
from technology's 54.93% to consumer staples' 3.53%. Market sentiment underwent
a complete sea change; optimism about stocks now prevailed, mainly because of
good news about the economy (which grew at a 3.1% annual rate in the second
quarter) and corporate earnings (which exceeded the consensus expectations of
Wall Street analysts). And all of our stock funds generated double-digit
returns.
As stocks got hot, bonds, in contrast, cooled down considerably, especially from
July onward. Interest rates rose at maturities of five to 30 years, helping to
depress bond prices. The bond market seemed less of a refuge as it dawned on
investors that rates would rise in anticipation of a strengthening economy, that
Treasuries were richly valued, and that government bonds would come under
pressure as their supply increased to finance the federal-budget deficit. In
response, investors pulled money from bond funds in great dollops (a total of
$23 billion in July and August alone, according to the Investment Company
Institute). Overall, the Lehman Aggregate Bond Index returned 5.40%, about
one-third less than it had in the previous 12 months. And our bond funds, with
the notable exceptions of the Turner High Yield Fund and the Turner Total Return
Fixed Income Fund, produced gains ranging from just 1% to 3%.
AFTER: A BULL MARKET BOOSTS OUR STOCK FUNDS
Yes, a year has indeed made quite a difference in the fortunes of our Funds. But
just as we didn't make excuses when our stock funds were in the red 12 months
ago, we will refrain from gloating now, when our stock funds' results are much
improved. Making excuses or gloating is neither our style nor our inclination.
Instead, we choose to simply tell you how our Funds did . . . and the reasons
behind that performance. Our commitment to you has always included candor in
both good times and bad, so once again this letter will tell it the way it seems
to us to be, for better or worse, for our growth funds, sector/specialty funds,
value funds, core funds, and bond funds.
Historically, our growth and sector/specialty funds have tended to outperform in
a flat or rising stock market. That is precisely what they did in the past 12
months, as the market was generally in ascendance (stocks generated gains in
eight of the 12 months). Also, the Funds were helped by a resurgence in growth
stocks (the Russell 3000 Growth Index returned 26.94%, or 2.05 percentage points
more than its value counterpart did). Also, I hasten to point out that our
growth and sector/specialty funds did well in no small part because we remained
true to our growth-investment process, which is based on the principle that
TURNER FUNDS 2003 ANNUAL REPORT | 1
LETTER TO SHAREHOLDERS (continued)
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earnings expectations drive stock prices over time. Since last October companies
with good earnings prospects have been rewarded with higher stock prices. In
contrast, earnings prospects didn't seem to matter much previously, in the bear
market that persisted from March 2000 to September 2002; valuations were
all-important then.
Our investment process led us to generally emphasize semiconductor,
semiconductor-capital-equipment, brokerage, credit-card, and
telecommunications-equipment stocks, which were in industries and sectors in
which earnings expectations were high and which performed relatively well.
Conversely, for the same reason, we avoided the major pharmaceutical and
insurance stocks, which lagged.
MAJOR SECTORS, MAJOR RETURNS
In our five growth funds geared to specific market-capitalization segments,
performance was enhanced by strong returns in the major sectors, which represent
significant weightings in the growth indices. As you may know, these five Funds
are "sector neutral" or "sector diversified," i.e., their sector weightings
closely resemble those of their indices. So it's extremely difficult for those
Funds to outperform if their holdings in the four major sectors -- consumer
discretionary/ services, technology, health-care, and financial services --
don't do well, since those sectors have a huge impact on the total return of the
indices.
Our seven sector/specialty funds also benefited from good stock selection. They
generally emphasized stocks with strong prospective earnings power that beat
their corresponding index sectors and the indices as a whole.
Our four value funds produced positive returns, ranging from 21.61% to 37.29%.
Those gains were excellent on an absolute basis, but fell somewhat short of
their benchmarks, due to subpar returns in a few key holdings early in the
period.
Our core fund that invests in both growth and value stocks, the Turner Small Cap
Equity Fund, reaped strong returns in both its growth and value holdings. Stocks
in the consumer-discretionary/services, materials/processing, producer-durables,
and financial-services sectors were particular standouts.
OUR BOND FUNDS' RESULTS DETERIORATE
The difference a year made in our bond funds' results was that they generally
slipped. Those results were delivered against a backdrop of a corporate-bond
rally, one of the big stories in the period. Investment-grade corporate bonds
gained 11.12%, while high yield bonds (also known as junk, or non-
investment-grade, bonds) soared 29.98%, as measured by the Lehman U.S.
Corporate Bond Index and the Lehman Brothers U.S. Corporate High Yield Bond
Index. Corporates were attractive because of their diminished credit risk (a
consequence of a stabilizing economy) and relatively attractive yields (a yield
spread versus Treasuries as large as 2.70 percentage points). In terms of
quality, low outperformed high by a huge margin: low-rated BBB maturities gained
15.53%, compared with high-rated AAA maturities' 4.92%. Also, yields of all but
the shortest maturities increased; consequently, prices of securities in the
two- to five-year segment of the maturity spectrum (which are less
price-sensitive than longer-maturity securities are but offer the cushion of
relatively competitive yields) held up reasonably well. (Bond prices move
inversely to yields.)
In light of those developments, funds with sizable weightings in corporate
bonds, low average credit quality, and short- and intermediate-term durations
tended to perform best in the period. For their part, our bond funds are geared
to short and intermediate durations -- which was to their advantage at a time
when rates were on the rise. But with the exceptions of the Turner Core Fixed
Income Fund and the Turner High Yield Fund, they weren't heavily invested in
corporate securities -- which was to their disadvantage. The High Yield Fund
performed with special distinction in absolute terms, returning 21.61%. In all
cases, our bond funds' higher average credit quality detracted from results.
(Most of our bond funds expressly emphasize high quality because it has provided
a measure of protection when the market has turned ugly in the past.)
Also, our four investment-grade bond funds' ownership of mortgage-backed
securities was a liability; mortgages underperformed due to escalating
prepayment risk and the volatility of interest rates throughout the period. On
the plus side, the Funds' results were by and large enhanced by relatively light
holdings in Treasuries, which suffered a performance shortfall of 2.15
percentage points versus the bond market as a whole.
WE INVEST YOUR MONEY LIKE IT'S OURS
In closing, we want you to know that we are grateful for having had the
opportunity to serve you in the topsy-turvy period just ended. Be assured that,
as has been our practice from the outset, we will invest your money as if it
were our own -- because in a sense, it
2 | TURNER FUNDS 2003 ANNUAL REPORT
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September 2003
is; the money of our own investing teams is in our Funds as well. So we are
dedicated to giving your (and our) money the importance it deserves. As we see
it, our primary mission is to maximize over time the return on the money you
have entrusted to us, so as to help you meet your investment goals for saving
for retirement, financing your children's education, increasing your income, or
maintaining your financial independence.
Whether or not the degree of difference in the capital markets' performance will
be as great going forward as it has been in the past 12 months is at best a
subject for informed conjecture. But what we can say with certainty is that the
capital markets will remain unpredictable and fluctuate and that we will do our
best to adapt to whatever differences materialize in the next 12 months and
beyond. We look forward to reporting to you in future letters about how well we
in fact fared in dealing with those differences.
/S/ BOB TURNER
Bob Turner
CHAIRMAN AND CHIEF INVESTMENT OFFICER -- GROWTH EQUITIES TURNER INVESTMENT
PARTNERS, ADVISER TO THE TURNER FUNDS
[PHOTO OMITTED]
BOB TURNER
TURNER FUNDS 2003 ANNUAL REPORT | 3
LETTER TO SHAREHOLDERS (continued)
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LIPPER INC. PERFORMANCE RANKINGS OF MUTUAL FUNDS WITH AT LEAST THREE YEARS OF
HISTORY Periods ending September 30, 2003
ONE TWO THREE FOUR
YEAR YEARS YEARS YEARS
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MULTI CAP GROWTH FUNDS
TURNER CONCENTRATED
GROWTH FUND
Ranking versus competitors 41/409 134/364 273/289 163/196
Percentile ranking 10 37 94 83
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INTERMEDIATE INVESTMENT
GRADE DEBT FUNDS
TURNER CORE
FIXED INCOME FUND
Ranking versus competitors 389/411 180/359 160/301 100/264
Percentile ranking 95 50 53 38
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FINANCIAL-SERVICES FUNDS
TURNER FINANCIAL SERVICES FUND
Ranking versus competitors 11/115 18/107 70/94 28/74
Percentile ranking 10 17 74 38
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HIGH CURRENT YIELD FUNDS
TURNER HIGH YIELD FUND
Ranking versus competitors 272/395 334/362 308/323 268/282
Percentile ranking 69 92 95 95
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LARGE CAP GROWTH FUNDS
TURNER DISCIPLINED LARGE CAP GROWTH
Ranking versus competitors 28/649 160/578 376/513 --
Percentile ranking 4 28 73 --
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TURNER LARGE CAP GROWTH OPPORTUNITIES
Ranking versus competitors 20/649 70/578 365/513 186/383
Percentile ranking 3 12 71 49
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MID-CAP GROWTH FUNDS
TURNER MIDCAP
GROWTH FUND
Ranking versus competitors 34/497 103/444 269/368 134/275
Percentile ranking 7 23 73 49
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MID-CAP VALUE FUNDS
TURNER CORE VALUE FUND
Ranking versus competitors 163/210 131/165 50/113 74/106
Percentile ranking 78 79 44 70
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FIVE SEVEN 10
YEARS YEARS YEARS
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MULTI CAP GROWTH FUNDS
TURNER CONCENTRATED
GROWTH FUND
Ranking versus competitors -- -- --
Percentile ranking -- -- --
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INTERMEDIATE INVESTMENT
GRADE DEBT FUNDS
TURNER CORE
FIXED INCOME FUND
Ranking versus competitors 107/222 53/155 21/93
Percentile ranking 48 34 23
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FINANCIAL-SERVICES FUNDS
TURNER FINANCIAL SERVICES FUND
Ranking versus competitors 14/55 7/24 --
Percentile ranking 25 29 --
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HIGH CURRENT YIELD FUNDS
TURNER HIGH YIELD FUND
Ranking versus competitors 218/238 -- --
Percentile ranking 92 -- --
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LARGE CAP GROWTH FUNDS
TURNER DISCIPLINED LARGE CAP GROWTH
Ranking versus competitors -- -- --
Percentile ranking -- -- --
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TURNER LARGE CAP GROWTH OPPORTUNITIES
Ranking versus competitors 102/335 -- --
Percentile ranking 30 -- --
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MID-CAP GROWTH FUNDS
TURNER MIDCAP
GROWTH FUND
Ranking versus competitors 17/233 -- --
Percentile ranking 7 -- --
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MID-CAP VALUE FUNDS
TURNER CORE VALUE FUND
Ranking versus competitors 71/91 43/58 16/30
Percentile ranking 78 74 53
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4 | TURNER FUNDS 2003 ANNUAL REPORT
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September 2003
ONE TWO THREE FOUR
YEAR YEARS YEARS YEARS
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MULTI-CAP VALUE FUNDS
TURNER LARGE CAP VALUE FUND
Ranking versus competitors 248/458 330/409 275/314 189/261
Percentile ranking 54 81 88 72
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SCIENCE AND TECHNOLOGY FUNDS
TURNER TECHNOLOGY FUND
Ranking versus competitors 60/341 99/317 235/266 67/122
Percentile ranking 18 31 88 55
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TURNER NEW ENTERPRISE FUND
Ranking versus competitors 18/341 13/317 115/266 --
Percentile ranking 5 4 43 --
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SHORT-INTERMEDIATE
U.S. GOVERNMENT FUNDS
TURNER SHORT DURATION
FIXED INCOME FUND
Ranking versus competitors 48/76 68/75 72/75 63/70
Percentile ranking 63 91 96 90
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SMALL-CAP GROWTH FUNDS
TURNER MICRO CAP GROWTH FUND
Ranking versus competitors 293/465 56/419 23/361 3/289
Percentile ranking 63 13 6 1
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TURNER SMALL CAP GROWTH FUND
Ranking versus competitors 42/465 103/419 231/361 165/289
Percentile ranking 9 25 64 57
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SMALL-CAP VALUE FUNDS
TURNER SMALL CAP VALUE FUND
Ranking versus competitors 125/212 184/189 103/153 37/130
Percentile ranking 59 97 67 28
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ULTRA-SHORT
OBLIGATIONS FUNDS
TURNER ULTRA SHORT DURATION
FIXED INCOME FUND
Ranking versus competitors 41/53 25/42 25/39 14/30
Percentile ranking 77 60 64 47
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Source: Lipper Inc.
FIVE SEVEN 10
YEARS YEARS YEARS
- ----------------------------------------------------------------------------------------------------------
MULTI-CAP VALUE FUNDS
TURNER LARGE CAP VALUE FUND
Ranking versus competitors 116/222 -- --
Percentile ranking 52 -- --
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SCIENCE AND TECHNOLOGY FUNDS
TURNER TECHNOLOGY FUND
Ranking versus competitors -- -- --
Percentile ranking -- -- --
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TURNER NEW ENTERPRISE
Ranking versus competitors -- -- --
Percentile ranking -- -- --
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SHORT-INTERMEDIATE
U.S. GOVERNMENT FUNDS
TURNER SHORT DURATION
FIXED INCOME FUND
Ranking versus competitors 46/67 44/60 --
Percentile ranking 69 73 --
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SMALL-CAP GROWTH FUNDS
TURNER MICRO CAP GROWTH FUND
Ranking versus competitors 1/250 -- --
Percentile ranking 1 -- --
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TURNER SMALL CAP GROWTH FUND
Ranking versus competitors 87/250 57/148 --
Percentile ranking 35 39 --
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SMALL-CAP VALUE FUNDS
TURNER SMALL CAP VALUE FUND
Ranking versus competitors 26/109 7/56 --
Percentile ranking 24 13 --
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ULTRA-SHORT
OBLIGATIONS FUNDS
TURNER ULTRA SHORT DURATION
FIXED INCOME FUND
Ranking versus competitors 9/28 10/21 --
Percentile ranking 32 48 --
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Source: Lipper Inc.
TURNER FUNDS 2003 ANNUAL REPORT | 5
PERFORMANCE
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TOTAL RETURNS OF TURNER FUNDS
Through September 30, 2003
Year
Three to One Three
Fund Name/Index Month Date Year Years
GROWTH
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TURNER DISCIPLINED LARGE CAP
GROWTH FUND 5.48 24.19 32.01 (22.20)
Russell Top 200 Growth Index 3.12 15.15 22.82 (19.51)
S&P 500 Index 2.64 14.72 24.39 (10.13)
INCEPTION DATE: 6/14/00
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TURNER LARGE CAP GROWTH
OPPORTUNITIES FUND 9.61 35.12 41.88 (21.68)
Russell Top 200 Growth Index 3.12 15.15 22.82 (19.51)
S&P 500 Index 2.64 14.72 24.39 (10.13)
INCEPTION DATE: 1/31/97
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TURNER MIDCAP GROWTH FUND --
CLASS I SHARES(1) 10.02 32.83 41.80 (22.78)
Russell Midcap Growth Index 7.16 27.24 38.89 (17.28)
INCEPTION DATE: 10/1/96
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TURNER SMALL CAP GROWTH FUND(1) 13.39 40.48 49.60 (15.40)
Russell 2000 Growth Index 10.47 31.82 41.72 (12.67)
INCEPTION DATE: 2/7/94
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TURNER MICRO CAP GROWTH FUND(1) 11.90 29.43 29.15 0.95
Russell 2000 Growth Index 10.47 31.82 41.72 (12.67)
INCEPTION DATE: 2/27/98
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(Annualized) Total
Five Ten Since Assets
Fund Name/Index Years Years inception ($mil)
GROWTH
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TURNER DISCIPLINED LARGE CAP
GROWTH FUND N/A N/A (20.89) $79.42
Russell Top 200 Growth Index n/a n/a (19.08)
S&P 500 Index n/a n/a (9.81)
INCEPTION DATE: 6/14/00
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TURNER LARGE CAP GROWTH
OPPORTUNITIES FUND 0.25 N/A 5.82 $3.55
Russell Top 200 Growth Index (3.93) n/a 2.24
S&P 500 Index 1.00 n/a 5.16
INCEPTION DATE: 1/31/97
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TURNER MIDCAP GROWTH FUND --
CLASS I SHARES(1) 10.84 N/A 13.56 $773.79
Russell Midcap Growth Index 4.49 n/a 5.66
INCEPTION DATE: 10/1/96
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TURNER SMALL CAP GROWTH FUND(1) 8.50 N/A 14.15 $192.79
Russell 2000 Growth Index 2.75 n/a 4.05
INCEPTION DATE: 2/7/94
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TURNER MICRO CAP GROWTH FUND(1) 38.14 N/A 33.24 $253.84
Russell 2000 Growth Index 2.75 n/a (2.40)
INCEPTION DATE: 2/27/98
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Year
Three to One Three
Fund Name/Index Month Date Year Years
VALUE
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TURNER LARGE CAP VALUE FUND 4.41 14.95 22.72 (5.89)
Russell 1000 Value Index 2.06 13.87 24.37 (2.01)
INCEPTION DATE: 10/31/97
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TURNER CORE VALUE FUND(1) 5.54 15.23 21.61 5.96
Russell Midcap Value Index 5.94 19.83 28.30 6.63
Russell 3000 Index 3.43 16.57 25.92 (9.68)
INCEPTION DATE: 12/6/91
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TURNER SMALL CAP VALUE FUND(1) 11.22 24.53 26.66 9.06
Russell 2000 Value Index 7.72 25.49 31.66 11.07
INCEPTION DATE: 2/28/96
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TURNER SMALL CAP VALUE
OPPORTUNITIES FUND(1) 14.59 30.06 37.29 N/A
Russell 2000 Value Index 7.72 25.49 31.66 n/a
INCEPTION DATE: 3/4/02
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(Annualized) Total
Five Ten Since Assets
Fund Name/Index Years Years inception ($mil)
VALUE
- ----------------------------------------------------------------------------------------------------------------------------
TURNER LARGE CAP VALUE FUND 4.73 N/A 2.81 $4.79
Russell 1000 Value Index 4.00 n/a 4.48
INCEPTION DATE: 10/31/97
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TURNER CORE VALUE FUND(1) 7.50 11.13 10.89 $46.67
Russell Midcap Value Index 8.42 11.43 13.70
Russell 3000 Index 1.93 9.68 12.64
INCEPTION DATE: 12/6/91
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TURNER SMALL CAP VALUE FUND(1) 15.41 N/A 13.45 $394.95
Russell 2000 Value Index 10.84 n/a 11.23
INCEPTION DATE: 2/28/96
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TURNER SMALL CAP VALUE
OPPORTUNITIES FUND(1) N/A N/A 16.57 $5.74
Russell 2000 Value Index n/a n/a 3.58
INCEPTION DATE: 3/4/02
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6 | TURNER FUNDS 2003 ANNUAL REPORT
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Year
Three to One Three
Fund Name/Index Month Date Year Years
CORE FUNDS
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TURNER SMALL CAP EQUITY FUND(1) 11.65 25.98 32.04 N/A
Russell 2000 Index 9.08 28.58 36.50 n/a
INCEPTION DATE: 3/4/02
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SPECIALTY
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TURNER TECHNOLOGY FUND(1)(2) 20.14 58.51 75.25 (40.99)
Pacific Stock Exchange Technology
100 Index 9.71 34.82 60.32 (15.75)
Goldman Sachs Technology
Composite Index 11.39 35.71 65.98 (27.73)
INCEPTION DATE: 6/30/99
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TURNER CONCENTRATED
GROWTH FUND 11.62 46.84 50.12 (32.25)
S&P 500 Index 2.64 14.72 24.39 (10.13)
NASDAQ 100 Index 8.53 32.63 56.87 (28.46)
INCEPTION DATE: 6/30/99
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TURNER NEW ENTERPRISE FUND 14.81 66.92 91.19 (29.75)
NASDAQ Composite Index 10.22 34.21 53.09 (21.06)
INCEPTION DATE: 6/30/00
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TURNER FINANCIAL
SERVICES FUND(2) 10.75 27.82 35.95 (1.45)
S&P 500 Financials Index 4.22 17.16 25.87 (2.38)
INCEPTION DATE: 5/22/96
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TURNER HEALTHCARE &
BIOTECHNOLOGY FUND(1)(2) 6.21 27.04 25.23 N/A
S&P 500 Healthcare Index (4.67) 6.10 11.45 n/a
INCEPTION DATE: 2/28/01
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TURNER TAX MANAGED U.S.
EQUITY FUND 5.37 21.08 27.82 N/A
After Taxes (Pre-Liquidation)(3) 5.37 21.08 27.82 n/a
After Taxes (Post-Liquidation)(3) 3.49 13.70 18.08 n/a
S&P 500 Index 2.64 14.72 24.39 n/a
Russell 1000 Growth Index 3.91 17.51 25.92 n/a
INCEPTION DATE: 2/28/01
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TURNER STRATEGIC VALUE AND
HIGH INCOME FUND 8.94 23.42 N/A N/A
S&P 500 Index 2.64 14.72 n/a n/a
INCEPTION DATE: 10/31/02
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(Annualized) Total
Five Ten Since Assets
Fund Name/Index Years Years inception ($mil)
CORE FUNDS
- ----------------------------------------------------------------------------------------------------------------------------
TURNER SMALL CAP EQUITY FUND(1) N/A N/A 13.95 $12.56
Russell 2000 Index n/a n/a 1.37
INCEPTION DATE: 3/4/02
- ----------------------------------------------------------------------------------------------------------------------------
SPECIALTY
- ----------------------------------------------------------------------------------------------------------------------------
TURNER TECHNOLOGY FUND(1)(2) N/A N/A (7.43) $19.70
Pacific Stock Exchange Technology
100 Index n/a n/a (0.86)
Goldman Sachs Technology
Composite Index n/a n/a (13.57)
INCEPTION DATE: 6/30/99
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TURNER CONCENTRATED
GROWTH FUND N/A N/A (3.38) $47.00
S&P 500 Index n/a n/a (5.93)
NASDAQ 100 Index n/a n/a (12.39)
INCEPTION DATE: 6/30/99
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TURNER NEW ENTERPRISE FUND N/A N/A (22.65) $13.47
NASDAQ Composite Index n/a n/a (21.47)
INCEPTION DATE: 6/30/00
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TURNER FINANCIAL
SERVICES FUND(2) 9.92 N/A 12.26 $17.31
S&P 500 Financials Index 7.81 n/a 12.57
INCEPTION DATE: 5/22/96
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TURNER HEALTHCARE &
BIOTECHNOLOGY FUND(1)(2) N/A N/A 8.46 $14.85
S&P 500 Healthcare Index n/a n/a (7.25)
INCEPTION DATE: 2/28/01
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TURNER TAX MANAGED U.S.
EQUITY FUND N/A N/A (8.10) $5.53
After Taxes (Pre-Liquidation)(3) n/a n/a (8.10)
After Taxes (Post-Liquidation)(3) n/a n/a (6.39)
S&P 500 Index n/a n/a (6.69)
Russell 1000 Growth Index n/a n/a (10.07)
INCEPTION DATE: 2/28/01
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TURNER STRATEGIC VALUE AND
HIGH INCOME FUND N/A N/A 28.57 $0.44
S&P 500 Index n/a n/a 14.33
INCEPTION DATE: 10/31/02
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TURNER FUNDS 2003 ANNUAL REPORT | 7
PERFORMANCE (continued)
- -------------------------------------------------------------------------------
Year
Three to One Three
Fund Name/Index Month Date Year Years
FIXED INCOME
- --------------------------------------------------------------------------------------------------------------------------------
TURNER CORE FIXED INCOME FUND (0.43) 2.00 3.37 8.01
Lehman Aggregate Bond Index (0.14) 3.77 5.40 8.94
INCEPTION DATE: 12/6/91
- --------------------------------------------------------------------------------------------------------------------------------
TURNER TOTAL RETURN FIXED
INCOME FUND (5.41) (6.82) (6.39) 3.85
Lehman Aggregate Bond Index (0.14) 3.77 5.40 8.94
INCEPTION DATE: 6/30/99
- --------------------------------------------------------------------------------------------------------------------------------
TURNER HIGH YIELD FUND 2.59 14.99 21.61 (5.14)
Merrill Lynch High Yield,
Cash Pay Index 2.53 20.20 28.22 6.63
INCEPTION DATE: 2/27/98
- --------------------------------------------------------------------------------------------------------------------------------
TURNER ULTRA SHORT DURATION
FIXED INCOME FUND --
CLASS I SHARES 1.12 1.02 1.40 3.79
Merrill Lynch 3-Month
U.S. Treasury Bill Index 0.25 0.89 1.32 2.90
INCEPTION DATE: 3/1/94
- --------------------------------------------------------------------------------------------------------------------------------
TURNER SHORT DURATION FIXED
INCOME FUND-- CLASS I SHARES 0.89 1.43 2.15 5.35
Lehman 1-3 Year U.S. Government
Bond Index 0.39 1.86 2.80 6.39
INCEPTION DATE: 3/1/94
- --------------------------------------------------------------------------------------------------------------------------------
(Annualized) Total
Five Ten Since Assets
Fund Name/Index Years Years inception ($mil)
FIXED INCOME
- -----------------------------------------------------------------------------------------------------------------------------
TURNER CORE FIXED INCOME FUND 5.82 6.55 7.30 $43.39
Lehman Aggregate Bond Index 6.62 6.92 7.39
INCEPTION DATE: 12/6/91
- -----------------------------------------------------------------------------------------------------------------------------
TURNER TOTAL RETURN FIXED
INCOME FUND N/A N/A 4.46 $0.27
Lehman Aggregate Bond Index n/a n/a 8.10
INCEPTION DATE: 6/30/99
- -----------------------------------------------------------------------------------------------------------------------------
TURNER HIGH YIELD FUND (1.38) N/A (2.56) $9.41
Merrill Lynch High Yield,
Cash Pay Index 4.95 n/a 4.14
INCEPTION DATE: 2/27/98
- -----------------------------------------------------------------------------------------------------------------------------
TURNER ULTRA SHORT DURATION
FIXED INCOME FUND --
CLASS I SHARES 4.60 N/A 5.39 $462.57
Merrill Lynch 3-Month
U.S. Treasury Bill Index 3.83 n/a 4.27
INCEPTION DATE: 3/1/94
- -----------------------------------------------------------------------------------------------------------------------------
TURNER SHORT DURATION FIXED
INCOME FUND-- CLASS I SHARES 4.98 N/A 5.81 $252.77
Lehman 1-3 Year U.S. Government
Bond Index 5.64 n/a 6.14
INCEPTION DATE: 3/1/94
- -----------------------------------------------------------------------------------------------------------------------------
Returns less than one year are cumulative. The Turner Funds are distributed by
Turner Investment Distributor, Inc., Berwyn, PA 19312.
A free prospectus, which contains detailed information, including fees and
expenses, and the risks associated with investing in these funds, can be
obtained by calling (800) 224-6312. Read the prospectus carefully before
investing. The performance data quoted represents past performance and the
principal value and investment return will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost. Past
performance is no guarantee of future results. Returns shown, unless otherwise
indicated, are total returns, with dividends and income reinvested. Returns
spanning more than one year are annualized. Fee waivers are in effect; if they
had not been in effect, performance would have been lower. The indices mentioned
are unmanaged statistical composites of stock market performance. Investing in
an index is not possible.
(1) Investing in technology and science companies and small and mid
capitalization companies may subject the funds to specific inherent risks,
including above-average price fluctuations.
(2) Funds that take a focus or sector specific approach are subject to greater
risk from downturns affecting a specific issuer or industry.
(3) After-tax returns are shown using the highest individual federal income tax
rates in effect at the time of each distribution. They do not reflect the
impact of state and local taxes. Your after-tax return depends on your
individual tax situation, and may differ from the figures presented here.
If you own fund shares in a tax-deferred account such as an IRA or 401(K)
plan, this information does not apply to your investment because these
accounts are not subject to current taxes. After-returns for most funds are
calculated using the tax liability implied by each fund's declared
distributions. However, the exact tax characteristics of many distributions
are not known until after the close of the year. For certain funds,
conservative estimates are used based on fund history until final amounts
become available.
8 | TURNER FUNDS 2003 ANNUAL REPORT
- --------------------------------------------------------------------------------
September 2003
HOW OUR GROWTH FUNDS PERFORMED IN THE PAST 12 MONTHS
The past 12-month period was characterized by strong returns in growth stocks
and our five growth funds. Our growth funds generally benefited from rallies in
two major growth sectors, technology and consumer discretionary/services, which
account for about 40% or more of these Funds' weightings.
TURNER DISCIPLINED LARGE CAP GROWTH FUND
Small stocks performed best among all capitalization segments of the market, but
the Turner Disciplined Large Cap Growth Fund more than held its own. The Fund
gained 32.01%, beating the Russell Top 200 Growth Index's 22.82% rise by 9.19
percentage points. Much of that outperformance can be attributed to big gains in
the health-care, technology, and financial-services sectors. The Fund's
consumer-staples holdings fared less well, underperforming its corresponding
index sector markedly.
TURNER LARGE CAP GROWTH OPPORTUNITIES FUND
Discerning stock selection powered the Turner Large Cap Growth Opportunities
Fund to a 41.88% return. The Fund outperformed its index, the Russell Top 200
Growth Index, by 19.06 percentage points. Nine of the Fund's 10 sector
investments returned more than their index sectors did. Investments in the
technology, health-care, consumer-discretionary/services, and financial-services
sectors contributed the most to results. The Fund's utilities/communication
holdings were the sole detractor from performance.
TURNER MICRO CAP GROWTH FUND
In a robust period of performance for small-cap stocks, the Turner Micro Cap
Growth Fund produced a double-digit gain, 29.15%, but it fell short of the
benchmark, the Russell 2000 Growth Index, which soared 41.72%. Underperformance
in the tech sector -- a gain of 37%, compared with an 86% return by the index's
tech sector -- accounted for most of the Fund's performance deficiency.
Financial-services and consumer-discretionary/ services stocks added the most
value.
TURNER MIDCAP GROWTH FUND
Over time mid-cap stocks have returned more than large-cap stocks but less than
small-cap stocks. That was also true for mid-cap stocks in the short term, in
the past 12 months: the Russell Midcap Growth Index was up 38.89%, a result that
was ahead of the large-cap indexes but behind the small-cap indices. For its
part, the Turner Midcap Growth Fund, Class I Shares advanced 41.80%, a
performance advantage of 2.91 percentage points over the Russell Midcap Growth
Index. Good returns in the producer-durables, consumer-discretionary/services,
and technology sectors more than compensated for subpar returns in the
autos/transportation and utilities/communication sectors. Tech stocks were the
Fund's biggest gainer, up 91%.
TURNER SMALL CAP GROWTH FUND
Although the Turner Small Cap Growth Fund benefited from the rally in small-cap
stocks, it also helped itself with admirable stock selection: seven of the
Fund's 10 sector positions beat their index-sector counterparts. As a result the
Fund gained 49.60%, outdistancing the Russell 2000 Growth Index by 7.88
percentage points. The Fund's consumer-discretionary/ services stocks performed
best in relative terms, rising 63% versus 29% for the index sector, while its
utilities/communication holdings detracted most from performance.
TURNER FUNDS 2003 ANNUAL REPORT | 9
- --------------------------------------------------------------------------------
HOW OUR SPECIALTY/SECTOR FUNDS PERFORMED IN THE PAST 12 MONTHS
A stock market that favored growth stocks after breaking forcefully out of a
two-and-a-half year slump helped enhance the performance of our seven
specialty/sector funds in the past 12 months. Those Funds tend to be "growthier"
than our more diversified growth funds, and all seven of them returned more than
20% and outperformed their indices.
TURNER CONCENTRATED GROWTH FUND
The Turner Concentrated Growth Fund contains a select few stocks -- 15 to 30 --
that Turner thinks have the most return potential of all holdings in its other
growth-stock funds. The Fund's holdings in aggregate realized considerable
return potential: the Fund gained 50.12%, outperforming the S&P 500 Index's
24.39% gain by 25.73 percentage points. Technology stocks, a 40% weighting, were
largely responsible for the Fund's performance edge: they gained 97%, compared
with a 60% advance for the index sector. Consumer-discretionary/services stocks
diminished results the most.
TURNER FINANCIAL SERVICES FUND
The Turner Financial Services Fund capitalized on the strong performance of the
financial-services sector in the period. The S&P 500 Financials Index climbed
25.87%, and the Turner Financial Services Fund did even better, returning
35.95%, a margin of outperformance of 10.08 percentage points.
Investment-management, credit-card, financial-transaction-processing,
diversified financial-services, and banking stocks did well. Positions in
insurance and mortgage stocks impaired results.
TURNER HEALTHCARE & BIOTECHNOLOGY FUND
Health-care stocks underperformed the broad market averages during the period;
the S&P 500 Healthcare Index rose 11.45% -- which would normally constitute a
respectable 12-month return but which was deficient in light of the market's
robust rally. Investors were wary of health-care stocks for several reasons: a
lack of pricing power in many industry segments, a shortage of new drugs
approved and introduced, negative earnings surprises by a few previously
fast-growing companies, and uncertainty over the outcome of government efforts
to revamp the entire health-care system and alter reimbursement rules. The
Turner Healthcare & Biotechnology Fund, however, held many of the health-care
stocks that performed strongest. The Fund gained 25.23%, beating the S&P 500
Healthcare Index by 13.78 percentage points. Top-performing holdings included
medical-device, specialty-pharmaceutical, and biotechnology stocks. Dragging
down results were positions in hospital-management and
medical-diagnostic-services stocks.
TURNER NEW ENTERPRISE FUND
Triple-digit returns in technology and financial-services stocks, many of them
with small and mid-sized capitalizations, drove the Turner New Enterprise Fund
to a 91.19% gain. That return exceeded the NASDAQ Composite Index's 53.09%
result by 38.10 percentage points. Technology stocks accounted for 48% of the
Fund's holdings and gained 112%, and financial-services stocks amounted to an 8%
weighting and soared 157%. Health-care stocks had an adverse impact on results,
especially early in the period. Altogether, five of the Fund's 10 sector
positions beat their corresponding index sectors.
TURNER STRATEGIC VALUE AND HIGH INCOME FUND
Small-cap value stocks and high yield bonds proved a winning combination for our
newest fund, the Turner Strategic Value and High Income Fund, in its first 11
months of operation. The Fund is a balanced investment composed of the holdings
of the Turner Small Cap Value Opportunities Fund and the Turner High Yield Fund.
Both components contributed gains of more than 20%, and altogether the Fund
recorded a 28.57% return, surpassing the benchmark S&P 500 Index's 14.33% by
14.24 percentage points (cumula
10 | TURNER FUNDS 2003 ANNUAL REPORT
- --------------------------------------------------------------------------------
September 2003
tive since inception of October 31, 2002). Winners included materials
/processing, financial-services, health-care, and consumer-staples
holdings among small-cap stocks, and B-rated holdings among high yield bonds in
defensive or cyclical industries such as telecommunications, packaging, and
utilities.
TURNER TAX MANAGED U.S. EQUITY FUND
Good stock selection led the Turner Tax Managed U.S. Equity Fund to a 27.82%
gain, trumping the S&P 500 Index by 3.43 percentage points. Eight of the Fund's
10 sector positions outperformed their index sectors. Big gains in two major
sectors, technology and health-care, which accounted for 29% of the portfolio,
furnished most of the Fund's extra return. Good absolute but relatively weak
returns in the financial-services sector, a 21% weighting, subtracted from
results.
TURNER TECHNOLOGY FUND
The big story in the stock market was the Lazarus-like resurrection of
technology stocks, which, after annualized losses of more than 30% over the
previous three years, had been left for dead by some investors. Based on
positive earnings surprises by a few bellwether tech companies and a new-found
optimism that the economy and capital spending for tech products and services
would ultimately pick up, the Goldman Sachs Technology Composite Index climbed
65.98% in the past 12 months. The Turner Technology Fund, in comparison, rose
75.25% to outpace the index by 9.27 percentage points. Semiconductor,
telecommunications, software, data-networking, and financial-transaction-
processing stocks did especially well. Internet-related stocks lagged.
TURNER FUNDS 2003 ANNUAL REPORT | 11
- --------------------------------------------------------------------------------
HOW OUR VALUE AND CORE FUNDS PERFORMED IN THE PAST 12 MONTHS
Value stocks, although registering double-digit gains, trailed growth stocks in
the period. The shortfall was most pronounced in the small-cap and mid-cap
segments. The small-cap Russell 2000 Value Index, for instance, lagged its
growth counterpart by 10.06 percentage points. Overall, value's relative
weakness tempered the performance of our five value and core funds. Our
small-cap value and core funds generated higher returns than our larger-cap
value funds did.
TURNER CORE VALUE FUND
The Turner Core Value Fund climbed 21.61%, versus a 24.89% gain for the Russell
3000 Value Index. Hurting performance was a 12% position in utility stocks and a
5% position in health-care stocks; they suffered sharp losses in two holdings
early in the period. Those losses were critical, accounting for much of the
Fund's performance gap to the index. The Fund's materials stocks were a positive
catalyst to results, up 46%.
TURNER LARGE CAP VALUE FUND
The Turner Large Cap Value Fund advanced 22.72%, compared with 24.37% for the
Russell 1000 Value Index. The Fund had a cyclical bent, with overweightings in
industrial and utility stocks, among others. That cyclical orientation proved
premature, as cyclical stocks lagged early in the period and contributed
negatively to the Fund's performance. Making positive contributions were
technology, consumer-discretionary/services, and energy stocks. As the period
progressed, the Fund's relative performance improved.
TURNER SMALL CAP EQUITY FUND
With outperforming investments in six of 10 market sectors, the Turner Small Cap
Equity Fund gained 32.04%. That return lagged the Russell 2000 Index's 36.50%
advance. The Fund is invested in both growth and value stocks, and its growth
holdings produced the highest returns. The greatest degree of outperformance was
supplied by financial-services and consumer-staples stocks, which represented
24% of all holdings. A 13% weighting in technology stocks produced a gain of
57%, but that gain failed to match the index tech sector's 85% gain. Our tech
holdings had below-average valuations, in a period in which tech shares with the
most lofty valuations tended to make the biggest score.
TURNER SMALL CAP VALUE FUND
From a slow start at the beginning of the period, the Turner Small Cap Value
Fund significantly improved its performance in the second half. For the entire
12 months, the Fund was up 26.66%, compared with a 31.66% gain for the Russell
2000 Value Index. Technology and health-care holdings, a 22% weighting, led the
way, with gains in excess of 70%. Performance was held back by losses in
utilities and materials stocks.
TURNER SMALL CAP VALUE OPPORTUNITIES FUND
The Turner Small Cap Value Opportunities Fund, introduced in March 2002,
continued to build on its strong initial performance. The Fund capitalized on
the robust rally in small-cap stocks, which tend to do well in the first phases
of an economic recovery, to rise 37.29% and outdo the Russell 2000 Value Index
by 5.63 percentage points. A 46% position in materials/ processing,
consumer-staples, and financial-services stocks added the most value to
performance. Consumer-discretionary/services and technology stocks produced
subpar returns. The biggest gain came from the Fund's position in health-care
stocks, which soared 101%.
12 | TURNER FUNDS 2003 ANNUAL REPORT
- --------------------------------------------------------------------------------
September 2003
HOW OUR BOND FUNDS PERFORMED IN THE PAST 12 MONTHS
After several years of providing a haven from the pain of owning stocks, the
bond market turned less hospitable in the past 12 months. As had been widely
anticipated, interest rates, which had fallen to levels last seen in the
Eisenhower administration, finally rose at all but the shortest maturities,
sending bond prices downward in most sectors. In fact, the corporate sector was
the sole domestic source of fixed-income outperformance. Four of our five bond
funds produced returns that were more modest than those in previous periods
since 2000.
TURNER CORE FIXED INCOME FUND
The Turner Core Fixed Income Fund was up 3.37%, trailing the Lehman Aggregate
Bond Index's 5.40% return. Three aspects of the Fund diluted performance: a
sizable loss in a health-care security, a high average credit quality (AA) at a
time when low quality did best, and a barbelled portfolio construction, i.e.,
investments are heavily weighted at the short and long ends of the maturity
spectrum and light in the middle -- a disadvantage because the yield curve
steepened instead of flattened. Corporate holdings aided results.
TURNER HIGH YIELD FUND
High yield bonds turned in a stellar performance, with the Merrill Lynch High
Yield, Cash Pay Index rising 28.22%. Credit quality had collapsed during the
previous 12 months, resulting in high yield spreads versus investment-grade
bonds widening to 10 percentage points. Then, as investors anticipated a
stronger economy, high yield bonds rallied powerfully, shrinking spreads to less
than five percentage points by September 2003. For its part, the Turner High
Yield Fund gained 21.61%. High yield returns were inversely correlated with
credit-rating quality, and the Fund's 31% weighting in securities with the
highest noninvestment-grade rating, BB, hurt relative results.
TURNER SHORT DURATION FIXED INCOME FUND
The Turner Short Duration Fixed Income Fund, Class I Shares recorded a 2.15%
gain contrasting with the Lehman 1-3 Year U.S. Government Bond Index's 2.80%
rise. Two portfolio characteristics eroded performance. One, a high average
credit quality (Agency, a higher rating than AAA) backfired in a period in which
lower-quality securities performed three times as well. And two, a 60% weighting
in mortgage-backed securities underperformed due to increased prepayment risk.
Mortgages were hurt for much of the period by a refinancing boom, which resulted
in the redemption of the securities supporting mortgage loans at an unfavorable
time. An 11% weighting in corporate securities added value.
TURNER TOTAL RETURN FIXED INCOME FUND
The Turner Total Return Fixed Income Fund lost 6.39%, in comparison with the
Lehman Aggregate Bond Index's 5.40% gain. The Fund suffered from a lack of
exposure to corporate securities, which outperformed, and an overexposure to
mortgage-backed securities, which underperformed. Also, the Fund's results were
significantly harmed by an ill-timed move into longer-term securities that are
the most sensitive to interest rates, just as intermediate and long-term rates
were starting to rise. For instance, the benchmark 10-year Treasury yield rose
from a 45-year low of 3.11% in mid-June to 3.94% at the end of September: the
Fund's level of income wasn't sufficient to prevent the resulting decline in
bond prices from translating into a negative return.
TURNER ULTRA SHORT DURATION FIXED INCOME FUND
The Turner Ultra Short Duration Fixed Income Fund, Class IShares gained 1.40%,
outperforming the Merrill Lynch 3-Month U.S. Treasury Bill Index's 1.32% result
by 0.08 percentage point. An average duration that was slightly longer than that
of the index proved a distinct plus at a time when very short-term rates fell;
the six-month Treasury yield, for instance, dropped from 1.50% last October to
1.00% at the end of the period. The Fund's return was dented by an emphasis on
mortgage-backed securities, which earned subpar returns. Even so, the short-term
mortgages the Fund held did provide some price protection late in the period,
when even short rates weren't immune to the overall upward trend in yields.
TURNER FUNDS 2003 ANNUAL REPORT | 13
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER DISCIPLINED LARGE CAP GROWTH FUND
- --------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner Disciplined Large Cap Growth Fund seeks long-term capital
appreciation. It invests primarily in common stocks and equity securities of
U.S. companies with very large market capitalizations that Turner believes have
strong earnings growth potential.
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
[BAR GRAPH OMITTED, PLOT POINTS FOLLOWS]
25.3% Healthcare
24.7% Technology
22.0% Consumer discretionary/services
10.1% Consumer staples
10.0% Financial services
2.3% Producer durables
1.7% Materials & Processing
1.6% Automotive/transportation1
..2% Utilities/communications
0.7% Energy
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2002
M L -----------------------------------
A A | |
R R | |
K G | |
E E | | X
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| |
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A | |
P | |
I | |
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A | |
L -----------------------------------
I | |
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A S | |
T M | |
I A | |
O L | |
N L -----------------------------------
VALUE GROWTH
INVESTMENT STYLE
[] Ticker symbol TSGEX
[] CUSIP #87252R839
[] Top 10 holdings
(1) General Electric
(2) Pfizer
(3) Microsoft
(4) Intel
(5) Wal-Mart Stores
(6) Cisco Systems
(7) Amgen
(8) Wyeth
(9) Procter & Gamble
(10) Coca-Cola
[] % in 10 largest holdings 46.3%
[] Number of holdings 52
[] Price/earnings ratio 22.9
[] Weighted average market capitalization $116.58 billion
[] % of holdings with positive earnings surprises 87%
[] % of holdings with negative earnings surprises 13%
[] Net assets $79 million
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER DISCIPLINED LARGE CAP GROWTH FUND:
JUNE 30, 2000-SEPTEMBER 30, 2003*
[LINE GRAPH OMITTED, PLOT POINTS FOLLOWS]
TURNER DISCIPLINED LARGE CAP GROWTH FUND RUSSELL TOP 200 GROWTH INDEX RUSSELL 1000
6/30/00 $10000 $10000 $10000
SEP 00 9655 9304 9462
SEP 01 4626 5183 5143
SEP 02 3445 3950 3986
SEP 03 4548 4852 5019
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than its original cost. The performance in the above graph does not reflect the
deduction of taxes the shareholder will pay on fund distributions or the
redemptions of fund shares.
The inception date of the Turner Disciplined Large Cap Growth Fund is June 14,
2000.
ANNUALIZED TOTAL RETURNS
Periods ending September 30, 2003
- --------------------------------------------------------------------------------
PAST ONE YEAR PAST THREE YEARS SINCE INCEPTION
32.01% (22.20)% (20.89)%
14 | TURNER FUNDS 2003 ANNUAL REPORT
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER LARGE CAP GROWTH OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner Large Cap Growth Opportunities Fund seeks capital appreciation. It
invests primarily in common stocks and other equity securities of U.S. companies
with very large market capitalizations that Turner believes have strong earnings
growth potential.
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
[BAR GRAPH OMITTED, PLOT POINTS FOLLOWS]
36.0% TECHNOLOGY
22.9% CONSUMER DISCRETIONARY/SERVICES
19.6% HEALTHCARE
11.4% FINANCIAL SERVICES
3.7% ENERGY
3.5% PRODUCER DURABLES
1.7% UTILITIES/COMMUNICATION
1.1% CONSUMER STAPLES
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2003
M L -----------------------------------
A A | |
R R | |
K G | |
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A | |
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VALUE GROWTH
INVESTMENT STYLE
[] Ticker symbol TLCGX
[] CUSIP #900297870
[] Top 10 holdings
(1) Microsoft
(2) Intel
(3) Pfizer
(4) Wal-Mart Stores
(5) Cisco Systems
(6) Nokia ADR
(7) General Electric
(8) Amgen
(9) EMC
(10) Micron Technology
[] % in 10 largest holdings 31.4%
[] Number of holdings 66
[] Price/earnings ratio25.0
[] Weighted average market capitalization $77.53 billion
[] % of holdings with positive earnings surprises 79%
[] % of holdings with negative earnings surprises 21%
[] Net assets $4 million
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER LARGE CAP GROWTH
OPPORTUNITIES FUND:
JANUARY 31, 1997-SEPTEMBER 30, 2003*
[LINE GRAPH OMITTED, PLOT POINTS FOLLOWS]
TURNER LARGE CAP GROWTH RUSSELL TOP 200
OPPORTUNITIES FUND GROWTH INDEX S&P 500 INDEX
1/31/97 $ 10000 $ 10000 $ 10000
SEP 97 12279.8 12013 12202.3
SEP 98 14399.3 14165.7 13306.7
SEP 99 20586.6 19018.9 17005.9
SEP 00 30363.2 22233.1 19264.3
SEP 01 14055.1 12386 14136.1
SEP 02 10279.9 9439.4 11239.6
SEP 03 14585.2 11593.5 13981
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than its original cost. The performance in the above graph does not reflect the
deduction of taxes the shareholder will pay on fund distributions or the
redemptions of fund shares.
The inception date of the Turner Large Cap Growth Opportunities Fund is January
31, 1997.
(1) Returns prior to August 17, 2002, represent performance of the Mercury
Select Growth Fund, Class I.
ANNUALIZED TOTAL RETURNS(1)
Periods ending September 30, 2003
- --------------------------------------------------------------------------------
PAST ONE PAST THREE PAST FIVE SINCE
YEAR YEARS YEARS INCEPTION
41.88% (21.68)% 0.25% 5.82%
TURNER FUNDS 2003 ANNUAL REPORT | 15
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER MIDCAP GROWTH FUND
- --------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner Midcap Growth Fund seeks capital appreciation. It invests primarily
in a diversified portfolio of common stocks with medium market capitalizations
at the time of purchase that Turner believes offer strong earnings growth
potential. The Fund's economic-sector weightings approximate the sector
weightings of the Russell Midcap Growth Index.
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS::
[BAR GRAPH OMITTED, PLOT POINTS FOLLOWS]
25.9% CONSUMER DISCRETIONARY/SERVICES
20.8% HEALTHCARE
19.3% TECHNOLOGY
11.9% FINANCIAL SERVICES
6.8% PRODUCER DURABLES
4.1% MATERIALS/PROCESSING
2.4% ENERGY
2.3% CONSUMER STAPLES
2.2% UTILITIES/COMMUNICATION
1.8% AUTOMOTIVE/TRANSPORTATION
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2003
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VALUE GROWTH
INVESTMENT STYLE
[] Ticker symbol TMGFX, Class I Shares
[] CUSIP #900297409, Class I Shares
[] Top 10 holdings
(1) CDW
(2) Lam Research
(3) Kla-Tencor
(4) Electronic Arts
(5) Patterson Dental
(6) Chiron
(7) Fiserv
(8) Corning
(9) Sungard Data Systems
(10)Starbucks
[] % in 10 largest holdings 12.5%
[] Number of holdings 137
[] Price/earnings ratio 22.8
[] Weighted average market capitalization $4.43 billion
[] % of holdings with positive earnings surprises 77.7%
[] % of holdings with negative earnings surprises 19.3%
[] Net assets $774 million, Class I Shares
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER MIDCAP GROWTH FUND, CLASS I SHARES:
OCTOBER 31, 1996-SEPTEMBER 30, 2003*
[LINE GRAPH OMITTED, PLOT POINTS FOLLOWS]
TURNER MID CAP GROWTH FUND, CLASS I RUSSELL MIDCAP GROWTH INDEX
10/31/96 $10000 $10000
SEP 97 14248.5 13119
SEP 98 14425.2 11889.7
SEP 99 26552.4 16311.5
SEP 00 52401.2 26158.8
SEP 01 21484.5 12616.4
SEP 02 17015.7 10660.8
SEP 03 24128.3 14806.9
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than its original cost. The performance in the above graph does not reflect the
deduction of taxes the shareholder will pay on fund distributions or the
redemptions of fund shares. The inception date of the Turner Midcap Growth Fund
(Class I Shares) is October 1, 1996.
** Class II Shares were offered beginning on September 24, 2001. Class II
Shares' performance for the periods prior to September 24, 2001 reflects the
performance of the Fund's Class I Shares. The performance of the Class I Shares
has not been adjusted to reflect the higher internal operating expenses of the
Class II Shares. If it had, performance would have been lower than shown.
ANNUALIZED TOTAL RETURNS
Periods ending September 30, 2003
- --------------------------------------------------------------------------------
PAST PAST PAST SINCE
ONE YEAR THREE YEARS FIVE YEARS INCEPTION
Class I Shares 41.80% (22.78)% 10.84% 13.56%
Class II Shares 41.11% (22.50)%** 10.86%** 13.41%**
16 | TURNER FUNDS 2003 ANNUAL REPORT
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER SMALL CAP GROWTH FUND
- --------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner Small Cap Growth Fund seeks capital appreciation. It invests
primarily in a diversified portfolio of common stocks with small market
capitalizations at the time of purchase that Turner believes offer strong
earnings growth potential. The Fund's economic-sector weightings approximate the
sector weightings of the Russell 2000 Growth Index.
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
[BAR GRAPH OMITTED, PLOT POINTS FOLLOWS]
23.2% TECHNOLOGY
22.9% HEALTHCARE
21.0% CONSUMER DISCRETIONARY/SERVICES
12.7% FINANCIAL SERVICES
6.8% PRODUCER DURABLES
3.8% AUTOMOTIVE/TRANSPORTATION
3.5% MATERIALS & PROCESSING
2.7% ENERGY
1.7% UTILITIES/COMMUNICATION
1.4% CONSUMER STAPLES
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2003
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VALUE GROWTH
INVESTMENT STYLE
[] Ticker symbol TSCEX
[] CUSIP #900297300
[] Top 10 holdings
(1) MGI Pharma
(2) Dade Behring Holdings
(3) Gen-Probe
(4) Immucor
(5) Inamed
(6) Visx
(7) Micromuse
(8) Winnebago Industries
(9) Integrated Device Technology
(10) KV Pharmaceutical, Cl A
[] % in 10 largest holdings 12.2%
[] Number of holdings 146
[] Price/earnings ratio 20.40
[] Weighted average market capitalization $0.96 billion
[] % of holdings with positive earnings surprises 76.6%
[] % of holdings with negative earnings surprises 18.4%
[] Net assets $193 million
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER SMALL CAP GROWTH FUND:
FEBRUARY 28, 1994-SEPTEMBER 30, 2003*
TURNER SMALL CAP GROWTH FUND RUSSELL 2000 GROWTH INDEX
2/28/94 $ 10000 $ 10000
SEP 94 10303.2 9618.09
SEP 95 15812.4 12328.5
SEP 96 24102.8 13883.1
SEP 97 28113.5 17124.8
SEP 98 23362.3 12872.7
SEP 99 37178.8 17073.1
SEP 00 58025 22136.9
SEP 01 29122.7 12708.8
SEP 02 23484.6 10400.9
SEP 03 35132.9 14740.2
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than its original cost. The performance in the above graph does not reflect the
deduction of taxes the shareholder will pay on fund distributions or the
redemptions of fund shares. The inception date of the Turner Small Cap Growth
Fund is February 7, 1994.
ANNUALIZED TOTAL RETURNS
Periods ending September 30, 2003
- --------------------------------------------------------------------------------
PAST ONE PAST THREE PAST FIVE SINCE
YEAR YEARS YEARS INCEPTION
49.60% (15.40)% 8.50% 14.15%
TURNER FUNDS 2003 ANNUAL REPORT | 17
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER MICRO CAP GROWTH FUND
- --------------------------------------------------------------------------------
The Turner Micro Cap Growth Fund seeks capital appreciation. It invests
primarily in common stocks and other equity securities of U.S. companies with
very small market capitalizations that Turner believes have strong earnings
growth potential. Micro cap companies are defined for this purpose as companies
with market capitalizations of companies included in the lower end of the
Russell 2000 Growth Index particularly those under $500 million. The Fund's
economic-sector weightings approximate the sector weightings of the Russell 2000
Growth Index.
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
[BAR GRAPH OMITTED, PLOT POINTS FOLLOWS]
22.4% TECHNOLOGY
21.1% HEALTHCARE
18.5% CONSUMER DISCRETIONARY/SERVICES
12.7% FINANCIAL SERVICES
6.3% ENERGY
4.8% PRODUCER DURABLES
1.9% UTILITIES/COMMUNICATION
1.6% MATERIALS/PROCESSING
1.4% AUTOMOTIVE/TRANSPORTATION
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2003
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VALUE GROWTH
INVESTMENT STYLE
[] Ticker symbol TMCGX
[] CUSIP #872524301
[] Top 10 holdings
(1) Tractor Supply
(2) Oxford Industries
(3) Salix Pharmaceuticals
(4) Patina Oil & Gas
(5) Evergreen Resources
(6) ESCO Technologies
(7) EDO
(8) Icon ADR
(9) NAM TAI Electronics
(10) Jos. A. Bank Clothiers
[] % in 10 largest holdings 16.5%
[] Number of holdings 132
[] Price/earnings ratio 17.6
[] Weighted average market capitalization $0.52 billion
[] % of holdings with positive earnings surprises 67.2%
[] % of holdings with negative earnings surprises 29.5%
[] Net assets $254 million
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER MICRO CAP GROWTH FUND:
FEBRUARY 28, 1998-SEPTEMBER 30, 2003*
[LINE GRAPH OMITTED, PLOT POINTS FOLLOWS]
TURNER MICRO CAP GROWTH FUND RUSSELL 2000 GROWTH INDEX
2/28/98 $10000 $10000
SEP 98 9882 7625
SEP 99 21093 10113
SEP 00 48308 13113
SEP 01 38535 7528
SEP 02 38489 6161
SEP 03 49709 8731
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than its original cost. The performance in the above graph does not reflect the
deduction of taxes the shareholder will pay on fund distributions or the
redemptions of fund shares. The inception date of the Turner Micro Cap Growth
Fund is February 27, 1998.
ANNUALIZED TOTAL RETURNS
Periods ending September 30, 2003
- --------------------------------------------------------------------------------
PAST ONE PAST THREE PAST FIVE SINCE
YEAR YEARS YEARS INCEPTION
29.15% 0.95% 38.14% 33.24%
18 | TURNER FUNDS 2003 ANNUAL REPORT
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER LARGE CAP VALUE FUND
- --------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner Large Cap Value Fund seeks long-term total return. The Fund invests
primarily in common stocks and other equity securities of U.S. companies with
large market capitalizations that the Sub-Adviser, Clover Capital Management,
believes have low valuations and attractive dividend yields relative to the
market or to their own trading history. Large cap companies are defined for this
purpose as companies with market capitalizations at the time of purchase in the
range of those market capitalizations of companies included in the S&P 500
Index. In selecting specific securities for the Fund, Clover seeks to identify
companies whose stock is out-of-favor with investors.
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
[BAR GRAPH OMITTED, PLOT POINTS FOLLOWS
30.8% FINANCIAL SERVICES
14.6% CONSUMER DISCRETIONARY/SERVICES
11.2% TECHNOLOGY
7.4% INDUSTRIALS
7.3% ENERGY
7.2% HEALTHCARE
6.1% MATERIALS/PROCESSING
5.4% UTILITIES/COMMUNICATION
4.3% TELECOMMUNICATIONS
3.9% CONSUMER STAPLES
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2003
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VALUE GROWTH
INVESTMENT STYLE
[] Ticker symbol TLCVX
[] CUSIP #87252R706
[] Top 10 holdings
(1) Citigroup
(2) Exxon Mobil
(3) PNC Financial Services Group
(4) Abercrombie & Fitch, Cl A
(5) CSX
(6) Wells Fargo
(7) Merrill Lynch
(8) Morgan Stanley
(9) Mellon Financial
(10) Verizon Communications
[] % in 10 largest holdings 24.6%
[] Number of holdings 84
[] Price/earnings ratio 14.4
[] Weighted average market capitalization $50.80 billion
[] Net assets $5 million
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER LARGE CAP VALUE FUND:
OCTOBER 31, 1997-SEPTEMBER 30, 2003*
[LINE GRAPH OMITTED, PLOT POINTS FOLLOWS]
TURNER LARGE CAP VALUE FUND S&P 500 INDEX RUSSELL 1000 VALUE INDEX
10/31/97 $10000 $10000 $10000
SEP 98 9347 11283 10657
SEP 99 11793 14419 12652
SEP 00 14133 16334 13779
SEP 01 11947 11986 12551
SEP 02 9598 9530 10424
SEP 03 11779 11855 12964
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than its original cost. The performance in the above graph does not reflect the
deduction of taxes the shareholder will pay on fund distributions or the
redemptions of fund shares. The inception date of the Turner Large Cap Value
Fund is October 31, 1997.
ANNUALIZED TOTAL RETURNS
Periods ending September 30, 2003
- --------------------------------------------------------------------------------
PAST ONE YEAR PAST THREE YEARS PAST FIVE YEARS SINCE INCEPTION
22.72% (5.89)% 4.73% 2.81%
TURNER FUNDS 2003 ANNUAL REPORT | 19
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER CORE VALUE FUND
- --------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner Core Value Fund seeks long-term total return. The Fund invests
primarily in common stocks and other equity securities of U.S. companies with
medium and small market capitalizations that the Sub-Adviser, Clover Capital
Management, believes are undervalued relative to the market or their historic
valuation. Midcap companies are defined for this purpose as companies with
market capitalizations at the time of purchase in the range of those market
capitalizations of companies included in the Russell Midcap Index. The Fund will
invest in securities of companies operating in a broad range of industries based
primarily on value characteristics such as price-cash flow, price-earnings and
price-book value ratios. In selecting specific securities for the Fund, Clover
seeks to identify companies whose stock is out-of-favor with investors.
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
[BAR GRAPH OMITTED, PLOT POINTS FOLLOWS]
28.2% FINANCIAL SERVICES
15.7% CONSUMER DISCRETIONARY/SERVICES
12.5% TECHNOLOGY
12.3% UTILITIES/COMMUNICATION
6.8% INDUSTRIALS
6.5% CONSUMER STAPLES
6.2% HEALTHCARE
5.9% MATERIALS/PROCESSING
4.6% ENERGY
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2003
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VALUE GROWTH
INVESTMENT STYLE
[] Ticker symbol CCEVX
[] CUSIP #87252R102
[] Top 10 holdings
(1) Jones Apparel Group
(2) Prudential Financial
(3) Federated Department Stores
(4) Kroger
(5) CMS Energy
(6) Akzo Nobel ADR
(7) eFunds
(8) CVS
(9) Pioneer Natural Resources
(10)Brunswick
[] % in 10 largest holdings 25.8%
[] Number of holdings 57
[] Price/earnings ratio 12.7
[] Weighted average market capitalization $6.67 billion
[] Net assets $47 million
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER CORE VALUE FUND:
SEPTEMBER 30, 1993-SEPTEMBER 30, 2003*
[LINE GRAPH OMITTED, PLOT POINTS FOLLOWS]
TURNER CORE VALUE FUND RUSSELL MIDCAP VALUE INDEX RUSSELL 3000 INDEX RUSSELL 3000 VALUE INDEX
SEP 93 $10000 $10000 $10000 $10000
SEP 94 12087 10102 10255 9978
SEP 95 15157 12602 13261 12644
SEP 96 16832 14586 15783 14854
SEP 97 21281 20457 21886 21144
SEP 98 20004 19698 22900 21560
SEP 99 21230 21534 28927 25363
SEP 00 24132 24333 34188 27735
SEP 01 25218 24323 24646 25522
SEP 02 23612 22995 20008 21466
SEP 03 28714 29503 25194 26809
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than its original cost. The performance in the above graph does not reflect the
deduction of taxes the shareholder will pay on fund distributions or the
redemptions of fund shares. The inception date of the Turner Core Value Fund is
December 6, 1991.
ANNUALIZED TOTAL RETURNS
Periods ending September 30, 2003
- --------------------------------------------------------------------------------
PAST ONE PAST THREE PAST FIVE PAST TEN
YEAR YEARS YEARS YEARS
21.61% 5.96% 7.50% 11.13%
20 | TURNER FUNDS 2003 ANNUAL REPORT
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER SMALL CAP VALUE FUND
- --------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner Small Cap Value Fund seeks long-term total return. The Fund invests
primarily in common stocks and other equity securities of U.S. companies with
small market capitalizations that the Sub-Adviser, Clover Capital Management,
believes are undervalued relative to the market or to their historical
valuation. Small cap companies are defined for this purpose as companies with
market capitalizations at the time of purchase in the range of those market
capitalizations of companies included in the Russell 2000 Value Index. The Fund
will invest in securities of companies operating in a broad range of industries
based primarily on value characteristics such as price-cash flow, price-earnings
and price-book value ratios. In selecting specific securities for the Fund,
Clover seeks to identify companies whose stock is out-of-favor with investors.
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
[BAR GRAPH OMITTED, PLOT POINTS FOLLOWS]
26.1% FINANCIAL SERVICES
16.0% CONSUMER DISCRETIONARY/SERVICES
14.4% TECHNOLOGY
10.6% INDUSTRIALS
9.2% HEALTHCARE
7.0% UTILITIES/COMMUNICATIONS
5.8% MATERIALS/PROCESSING
4.0% ENERGY
3.6% CONSUMER STAPLES
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2003
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VALUE GROWTH
INVESTMENT STYLE
[] Ticker symbol TCSVX
[] CUSIP #87252R300
[] Top 10 holdings
(1) Service International
(2) CMS Energy
(3) Maxtor
(4) Smithfield Foods
(5) Barnes & Noble
(6) Arthur J. Gallagher
(7) FelCor Lodging Trust
(8) Key Energy Services
(9) American Financial Group
(10) Cabot Oil & Gas
[] % in 10 largest holdings 14.0%
[] Number of holdings 142
[] Price/earnings ratio 14.6
[] Weighted average market capitalization $1.10 million
[] Net assets $395 million
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER SMALL CAP VALUE FUND:
FEBRUARY 29, 1996-SEPTEMBER 30, 2003*
[LINE GRAPH OMITTED, PLOT POINTS FOLLOWS]
TURNER SMALL CAP VALUE FUND RUSSELL 2000 INDEX RUSSELL 2000 VALUE INDEX
2/29/96 $10000 $10000 $10000
SEP 96 10838 10752 10785
SEP 97 16169 14320 15385
SEP 98 12733 11596 13417
SEP 99 15511 13808 14199
SEP 00 20101 17037 16381
SEP 01 22543 13424 17299
SEP 02 20584 12175 17047
SEP 03 26072 16619 22444
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than its original cost. The performance in the above graph does not reflect the
deduction of taxes the shareholder will pay on fund distributions or the
redemptions of fund shares.
The inception date of the Turner Small Cap Value Fund is February 28, 1996.
ANNUALIZED TOTAL RETURNS
Periods ending September 30, 2003
- --------------------------------------------------------------------------------
PAST ONE PAST THREE PAST FIVE SINCE
YEAR YEARS YEARS INCEPTION
26.66% 9.06% 15.41% 13.45%
TURNER FUNDS 2003 ANNUAL REPORT | 21
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER SMALL CAP VALUE OPPORTUNITIES FUND
- --------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner Small Cap Value Opportunities Fund seeks long-term capital growth. It
invests primarily in equity securities of small capitalization companies that
the Adviser believes have the potential for growth and that appear to be trading
below their perceived value. Small capitalization companies are defined for this
purpose as companies with market capitalization at the time of purchase that is
within the range of capitalization represented in the Russell 2000 Value Index.
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
[BAR GRAPH OMITTED, PLOT POINTS FOLLOWS]
26.9% FINANCIAL SERVICES
14.4% CONSUMER DISCRETIONARY/SERVICES
10.9% MATERIALS/PROCESSING
8.7% TECHNOLOGY
7.1% HEALTHCARE
6.6% PRODUCER DURABLES
6.5% AUTOMOTIVE & TRANSPORTATION
5.0% UTILITIES/COMMUNICATIONS
3.5% CONSUMER STAPLES
2.3% ENERGY
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2003
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VALUE GROWTH
INVESTMENT STYLE
[] Ticker symbol TSVOX
[] CUSIP #87252R607
[] Top 10 holdings
(1) Intergraph
(2) Brink's
(3) Interstate Bakeries
(4) Griffon
(5) Kindred Healthcare
(6) Lousiana-Pacific
(7) BSB Bancorp
(8) FNB
(9) FTD, Cl A
(10) First Niagara Financial Group
[] % in 10 largest holdings 22.3%
[] Number of holdings 72
[] Price/earnings ratio 14.4
[] Weighted average market capitalization $0.94 billion
[] Net assets $6 million
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER SMALL CAP VALUE OPPORTUNITIES FUND:
MARCH 31, 2002-SEPTEMBER 30, 2003*
[LINE GRAPH OMITTED, PLOT POINTS FOLLOWS]
TURNER SMALL CAP VALUE OPPORTUNITIES FUND FRANK RUSSELL 2000 VALUE INDEX
3/31/02 $10000 $10000
SEP 02 8737 7705
SEP 03 11995 10144
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than its original cost. The performance in the above graph does not reflect the
deduction of taxes the shareholder will pay on fund distributions or the
redemptions of fund shares. The inception date of the Turner Small Cap Value
Opportunities Fund is March 4, 2002.
ANNUALIZED TOTAL RETURNS
Periods ending September 30, 2003
- --------------------------------------------------------------------------------
PAST ONE YEAR SINCE INCEPTION
37.29% 16.57%
22 | TURNER FUNDS 2003 ANNUAL REPORT
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER SMALL CAP EQUITY FUND
- --------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner Small Cap Equity Fund seeks long-term capital growth. It invests
primarily in equity securities of small capitalization companies that the
Adviser believes have the potential for long-term growth and that are
attractively priced. Small capitalization companies are defined for this purpose
as companies that have a market capitalization at the time of purchase that is
within the range of market capitalization represented in the Russell 2000 Index.
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
[BAR GRAPH OMITTED, PLOT POINTS FOLLOWS]
18.8% FINANCIAL SERVICES
16.5% CONSUMER DISCRETIONARY/SERVICES
11.8% TECHNOLOGY
11.3% HEALTHCARE
10.1% MATERIALS/PROCESSING
6.1% AUTOMOTIVE/TRANSPORTATION
5.1% CONSUMER STAPLES
4.5% UTILITIES/COMMUNICATION
3.6% ENERGY
3.6% PRODUCER DURABLES
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2003
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K G | |
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VALUE GROWTH
INVESTMENT STYLE
[] Ticker symbol TSEIX
[] CUSIP #87252R714
[] Top 10 holdings
(1) Lousiana-Pacific
(2) Intergraph
(3) Brink's
(4) Interstate Bakeries
(5) Griffon
(6) FNB
(7) Analogic
(8) Scottish Re Group
(9) Golden Star Resources
(10) China Yuchai International
[] % in 10 largest holdings 21.7%
[] Number of holdings 78 n Price/earnings ratio 16.2
[] Weighted average market capitalization $0.97 billion
[] Net assets $13 million
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER SMALL CAP EQUITY FUND:
MARCH 31, 2002-SEPTEMBER 30, 2003*
[LINE GRAPH OMITTED, PLOT POINTS FOLLOWS]
TURNER SMALL CAP EQUITY FUND FRANK RUSSELL 2000 INDEX
3/31/02 $10000 $10000
SEP 02 8789 7203
SEP 03 11605 9833
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than its original cost. The performance in the above graph does not reflect the
deduction of taxes the shareholder will pay on fund distributions or the
redemptions of fund shares. The inception date of the Turner Small Cap Equity
Fund is March 4, 2002.
ANNUALIZED TOTAL RETURN
Periods ending September 30, 2003
- --------------------------------------------------------------------------------
PAST ONE YEAR SINCE INCEPTION
32.04% 13.95%
TURNER FUNDS 2003 ANNUAL REPORT | 23
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER TECHNOLOGY FUND
- --------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner Technology Fund seeks long-term capital appreciation. It invests in
common stock of companies that develop new technologies and that may experience
exceptional growth in sales and earnings driven technology related products and
services. Stock selection will not be based on company size, but rather on an
assessment of a company's fundamental prospects. The Fund's holdings will be
concentrated in the technology sector, and will range from small companies
developing new technologies to large, established firms with a history of
developing and marketing such technologies.
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
[BAR GRAPH OMITTED, PLOT POINTS FOLLOWS]
100.0% Technology
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2003
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VALUE GROWTH
INVESTMENT STYLE
[] Ticker symbol TTECX
[] CUSIP #87252R870
[] Top 10 holdings
(1) Microsoft
(2) Texas Instruments
(3) Nokia ADR
(4) Corning
(5) Micron Technology
(6) Cisco Systems
(7) eBay
(8) Intel
(9) CDW
(10) Applied Materials
[] % in 10 largest holdings 31.2%
[] Number of holdings 47
[] Price/earnings ratio 33.5
[] Weighted average market capitalization $36.74 billion
[] % of holdings with positive earnings surprises 69.2%
[] % of holdings with negative earnings surprises 28.5%
[] Net assets $20 million
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER TECHNOLOGY FUND:
JUNE 30, 1999-SEPTEMBER 30, 2003*
[LINE GRAPH OMITTED, PLOT POINTS FOLLOWS]
TURNER TECHNOLOGY FUND PACIFIC EXCHANGE TECHNOLOGY 100 INDEX GOLDMAN SACHS TECHNOLOGY COMPOSITE INDEX
6/30/99 $10000 $10000 $10000
SEP 99 14060 10467 10523
SEP 00 35059 17345 14251
SEP 01 6619 8652 4972
SEP 02 4110 6470 3240
MAR 03 7202 10372 5378
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than its original cost. The performance in the above graph does not reflect the
deduction of taxes the shareholder will pay on fund distributions or the
redemptions of fund shares.
The inception date of the Turner Technology Fund is June 30, 1999.
ANNUALIZED TOTAL RETURNS
Periods ending September 30, 2003
- --------------------------------------------------------------------------------
PAST ONE YEAR PAST THREE YEARS SINCE INCEPTION
75.25% (40.99)% (7.43)%
24 | TURNER FUNDS 2003 ANNUAL REPORT
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER CONCENTRATED GROWTH FUND
- --------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner Concentrated Growth Fund seeks long-term capital appreciation. It
invests in common stock and other equity securities of companies, regardless of
their market capitalization, that Turner believes have strong earnings
potential. The Fund will contain a total of 15-30 stocks representing Turner's
favorite investment ideas. While it will not concentrate its investments in any
one industry, the Fund may, from time to time, have a significant exposure to
one or more sectors of the economy such as the technology sector. In addition,
the Fund's adviser may invest up to 25% of the Fund's assets in cash or cash
equivalent securities in instances where it believes that appropriate buying
opportunities are not available.
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
[BAR GRAPH OMITTED, PLOT POINTS FOLLOWS]
52.8% Technology
22.9% Consumer discretionary/services
9.8% Financial services
4.9% Producer durables
4.2% Healthcare
3.9% Energy
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2003
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VALUE GROWTH
INVESTMENT STYLE
[] Ticker symbol TTOPX
[] CUSIP #87252R862
[] Top 10 holdings
(1) Nokia ADR
(2) Applied Materials
(3) Taiwan Semiconductor Manufacturing ADR
(4) eBay
(5) STMicroelectronics, NY Shares
(6) Texas Instruments
(7) Micron Technology
(8) Charles Schwab
(9) InterActive
(10) Morgan Stanley
[] % in 10 largest holdings 44.7%
[] Number of holdings 29
[] Price/earnings ratio 28.8
[] Weighted average market capitalization $37.68 billion
[] % of holdings with positive earnings surprises 74.8%
[] % of holdings with negative earnings surprises 25.2%
[] Net assets $47 million
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER CONCENTRATED GROWTH FUND:
JUNE 30, 1999-SEPTEMBER 30, 2003*
Turner Concentrated Growth Fund S&P 500 Composite Index NASDAQ 100 Index
6/30/99 $10000 $10000 $10000
Sep 99 13990 9376 10485
Sep 00 27782 10622 15553
Sep 01 8223 7794 5092
Sep 02 5754 6197 3631
Sepr 03 8638 7709 5696
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than its original cost. The performance in the above graph does not reflect the
deduction of taxes the shareholder will pay on fund distributions or the
redemptions of fund shares.
The inception date of the Turner Concentrated Growth Fund is June 30, 1999.
ANNUALIZED TOTAL RETURNS
Periods ending September 30, 2003
- --------------------------------------------------------------------------------
PAST ONE YEAR PAST THREE YEARS SINCE INCEPTION
50.12% (32.25)% (3.38)%
TURNER FUNDS 2003 ANNUAL REPORT | 25
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER NEW ENTERPRISE FUND
- --------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner New Enterprise Fund seeks long-term capital appreciation. The Fund
invests primarily in companies with projected strong earnings growth across a
variety of industries and sectors where new products and services are being
developed and marketed. Turner strives to find leading companies in rapidly
growing industries such as business services, computer and digital products,
financial services, Internet-related companies, medical technology, retail, and
telecommunications. Companies that have the potential for rapid earnings growth
because of management changes, new products, or changes in the economy also may
be attractive investments for the Fund.
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
[BAR GRAPH OMITTED, PLOT POINTS FOLLOWS]
48.7% Technology
16.8% Consumer discretionary/services
12.2% Financial services
7.4% Healthcare
6.5% Producer durables
4.2% Automotive/transportation
1.8% Consumer staples
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2003
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VALUE GROWTH
[] Ticker symbol TBTBX
[] CUSIP #87252R797
[] Top 10 holdings
(1) China Yuchai International
(2) TTM Technologies
(3) eBay
(4) SEI Investments
(5) Omnivision Technologies
(6) Visx
(7) Enterasys Networks
(8) Micromuse
(9) Sonus Networks
(10) F5 Networks
[] % in 10 largest holdings 31.0%
[] Number of holdings 43
[] Price/earnings ratio 29.0
[] Weighted average market capitalization $8.81 billion
[] % of holdings with positive earnings surprises 83.9%
[] % of holdings with negative earnings surprises 10.5%
[] Net assets $13 million
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER NEW ENTERPRISE FUND:
JUNE 30, 2000-SEPTEMBER 30, 2003*
[LINE GRAPH OMITTED, PLOT POINTS FOLLOWS]
TURNER NEW ENTERPRISE FUND NASDAQ COMPOSITE INDEX
6/30/00 $10000 $10000
SEP 00 12520 9264
SEP 01 3290 3792
SEP 02 2270 2976
MAR 03 4340 4556
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than its original cost. The performance in the above graph does not reflect the
deduction of taxes the shareholder will pay on fund distributions or the
redemptions of fund shares. The inception date of the Turner New Enterprise Fund
is June 30, 2000.
ANNUALIZED TOTAL RETURNS
Periods ending September 30, 2003
- --------------------------------------------------------------------------------
PAST ONE YEAR PAST THREE YEARS SINCE INCEPTION
91.19% (29.75)% (22.65)%
26 | TURNER FUNDS 2003 ANNUAL REPORT
INVESTMENT REVIEW
TURNER FINANCIAL SERVICES FUND
- --------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner Financial Services Fund seeks long-term capital appreciation. It
invests in common stocks and other equity securities of U.S. financial services
companies, including banks, brokerage houses, insurance companies and investment
advisory companies, that the Adviser believes have above average growth
potential or that are undervalued. The Adviser also invests in financial
services companies that it believes to be potential merger or acquisition
targets. The Fund's holdings will be concentrated in the financial services
industry.
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
[BAR GRAPH OMITTED, PLOT POINTS FOLLOWS]
98.8% Financial services
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2003
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VALUE GROWTH
[] Ticker symbol TFFIX
[] CUSIP #87252R698
[] Top 10 holdings
(1) Citigroup
(2) Wells Fargo
(3) Lehman Brothers Holdings
(4) Goldman Sachs Group
(5) American International Group
(6) Golden West Financial
(7) American Express
(8) Morgan Stanley
(9) SEI Investments
(10) Investors Financial Services
[] % in 10 largest holdings 41.9%
[] Number of holdings 34
[] Price/earnings ratio 15.3
[] Weighted average market capitalization $34.41 billion
[] % of holdings with positive earnings surprises 87.0%
[] % of holdings with negative earnings surprises 13.0%
[] Net assets $17 million
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER FINANCIAL SERVICES FUND:
MAY 31, 1996-SEPTEMBER 30, 2003*
[LINE GRAPH OMITTED, PLOT POINTS FOLLOWS]
TURNER FINANCIAL SERVICES FUND S&P 500 FINANCIALS INDEX
5/31/96 $10000 $10000
SEP 96 10752 10939
SEP 97 16893 17212
SEP 98 14579 16772
SEP 99 17684 19625
SEP 00 24439 26264
SEP 01 19326 22736
SEP 02 17204 19412
SEP 03 23389 24434
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than its original cost. The performance in the above graph does not reflect the
deduction of taxes the shareholder will pay on fund distributions or the
redemptions of fund shares. The inception date of the Turner Financial Services
Fund is May 22, 1996.
(1) Returns prior to November 12, 2001, represent performance of the Titan
Financial Services Fund.
ANNUALIZED TOTAL RETURNS(1)
Periods ending September 30, 2003
- --------------------------------------------------------------------------------
PAST ONE PAST THREE PAST FIVE SINCE
YEAR YEARS YEARS INCEPTION
35.95% (1.45)% 9.92% 12.26%
TURNER FUNDS 2003 ANNUAL REPORT | 27
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER HEALTHCARE & BIOTECHNOLOGY FUND
- --------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner Healthcare & Biotechnology Fund seeks long-term capital appreciation.
It invests in equity securities issued by healthcare and biotechnology companies
that are traded in the United States. Healthcare companies include
pharmaceutical companies, companies involved in research and development of
pharmaceutical products and services, companies involved in the operation of
health care facilities, and other companies involved in the design, manufacture,
or sale of health care-related products or services. Biotechnology companies are
engaged in the research, development, and manufacture of various
biotechnological products, services, and processes; manufacture and/or
distribute biotechnological and biomedical products, including devices and
instruments; provide or benefit significantly from scientific and technological
advances in biotechnology; or provide processes or services instead of, or in
addition to, products. The Fund's holdings will be concentrated in the
healthcare industry.
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
[BAR GRAPH OMITTED, PLOT POINTS FOLLOWS]
96.0% Healthcare & biotechnology
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2003
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VALUE GROWTH
INVESTMENT STYLE
[] Ticker symbol THBCX
[] CUSIP #87252R755
[] Top 10 holdings
(1) Wyeth
(2) Pfizer
(3) Bristol-Myers Squibb
(4) Abbott Laboratories
(5) Pharmaceutical Resources
(6) Amgen
(7) Patterson Dental
(8) Anthem
(9) Mid Atlantic Medical Services
(10) Zimmer Holdings
[] % in 10 largest holdings 47.1%
[] Number of holdings 39
[] Price/earnings ratio 18.9
[] Weighted average market capitalization $34.25 billion
[] % of holdings with positive earnings surprises 89.1%
[] % of holdings with negative earnings surprises 7.7%
[] Net assets $15 million
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER HEALTHCARE & BIOTECHNOLOGY FUND:
FEBRUARY 28, 2001-SEPTEMBER 30, 2003*
[LINE GRAPH OMITTED, PLOT POINTS FOLLOWS]
TURNER HEALTHCARE & BIOTECHNOLOGY FUND S&P 500 HEALTH CARE INDEX
2/28/01 $10000 $10000
SEP 01 11151 9467
SEP 02 9851 7393
SEP 03 12336 8239
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than its original cost. The performance in the above graph does not reflect the
deduction of taxes the shareholder will pay on fund distributions or the
redemptions of fund shares. The inception date of the Turner Healthcare &
Biotechnology Fund is February 28, 2001.
ANNUALIZED TOTAL RETURNS
Periods ending September 30, 2003
- --------------------------------------------------------------------------------
PAST ONE YEAR SINCE INCEPTION
25.23% 8.46%
28 | TURNER FUNDS 2003 ANNUAL REPORT
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER TAX MANAGED U.S. EQUITY FUND
- --------------------------------------------------------------------------------
FUND OBJECTIVE
The Tax Managed U.S. Equity Fund seeks long-term capital appreciation while
attempting to minimize the impact of taxes on the returns earned by
shareholders. The Fund's tax-sensitive investment strategy is intended to lead
to lower distributions of income and realized capital gains than funds managed
without regard to federal income tax consequences. It expects to employ a number
of strategies to minimize taxable distribution to shareholders. In selecting
companies, Turner typically invests for the long term and chooses securities
that it believes offer strong opportunities for long-term growth of capital.
When deciding to sell a security, Turner considers the negative tax impact of
realized capital gains and, if applicable, the positive tax impact of realized
capital losses. However, Turner may sell a security at a realized gain if it
determines that the potential tax cost is outweighed by the risk of owning the
security, or if more attractive investment opportunities are available.
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
[BAR GRAPH OMITTED, PLOT POINTS FOLLOWS]
21.3% Financial services
17.1% Consumer discretionary/services
15.0% Technology
14.5% Healthcare
7.3% Utilities/communications
7.2% Consumer staples
4.8% Energy
4.2% Producer durables
4.1% Materials/processing
2.6% Automotive/transportation
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2003
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VALUE GROWTH
INVESTMENT STYLE
[] Ticker symbol TTMEX
[] CUSIP #87252R748
[] Top 10 holdings
(1) Citigroup
(2) Wal-Mart Stores
(3) Pfizer
(4) American International Group
(5) Intel
(6) General Electric
(7) Procter & Gamble
(8) Cisco Systems
(9) Comcast, Cl A
(10) American Express
[] % in 10 largest holdings 23.4%
[] Number of holdings 102
[] Price/earnings ratio 20.1
[] Weighted average market capitalization $68.16 billion
[] % of holdings with positive earnings surprises 86.8%
[] % of holdings with negative earnings surprises 13.2%
[] Net assets $6 million
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER TAX MANAGED U.S. EQUITY FUND:
FEBRUARY 28, 2001-SEPTEMBER 30, 2003*
[LINE GRAPH OMITTED, PLOT POINTS FOLLOWS]
TURNER TAX MANAGED US EQUITY FUND S&P 500 COMPOSITE INDEX
2/28/01 $10000 $10000
SEP 01 8181 8459
SEP 02 6291 6726
SEP 03 8041 8366
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than its original cost. The performance in the above graph does not reflect the
deduction of taxes the shareholder will pay on fund distributions or the
redemptions of fund shares. The inception date of the Turner Tax Managed U.S.
Equity Fund is February 28, 2001.
ANNUALIZED TOTAL RETURNS
Periods ending September 30, 2003
- --------------------------------------------------------------------------------
PAST ONE YEAR SINCE INCEPTION
27.82% (8.10)%
TURNER FUNDS 2003 ANNUAL REPORT | 29
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER STRATEGIC VALUE AND HIGH INCOME FUND
- --------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner Strategic Value and High Income Fund seeks total return through a
combination of long-term capital growth and high current income. The Fund is a
"fund of funds", which means that it invests substantially all of its assets in
shares of other Turner Funds rather than in individual securities. As a fund of
funds, the Fund pursues its goal by investing substantially all of its assets in
shares of the Turner Small Cap Equity Fund, the Turner Small Cap Value
Opportunities Fund, the Turner High Yield Fund and the Turner Ultra Short
Duration Fixed Income Fund. As a result, the investment performance of the Fund
is directly related to the performance of the underlying funds. As of September
30, 2003 the Turner Strategic Value and High Income Fund was investing 50% of
its assets in each of the Small Cap Value Opportunities Fund and High Yield
Fund.
- --------------------------------------------------------------------------------
CURRENT INVESTMENT WEIGHTINGS:
[BAR GRAPH OMITTED, PLOT POINTS FOLLOWS]
51.0% Turner Small Cap Value Opportunities Fund
49.1% Turner High Yield Fund
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2003
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VALUE GROWTH
INVESTMENT STYLE
[] Ticker symbol TSVIX
[] CUSIP #900297862
[] 2 holdings
(1) Turner Small Cap Value Opportunities Fund, Cl II
(2) Turner High Yield Fund, Cl I
[] % in 2 holdings 100.0%
[] Number of holdings 2
[] Net assets $443 thousand
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER STRATEGIC VALUE AND HIGH
INCOME FUND:
OCTOBER 31, 2002-SEPTEMBER 30, 2003*
[LINE GRAPH OMITTED, PLOT POINTS FOLLOWS]
TURNER STRATEGIC VALUE & HIGH INCOME FUND S&P 500 COMPOSITE INDEX
10/31/02 $10000 $10000
SEP 03 12860 11434
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than its original cost. The performance in the above graph does not reflect the
deduction of taxes the shareholder will pay on fund distributions or the
redemptions of fund shares. The inception date of the Turner Strategic Value and
High Income Fund is October 31, 2002.
CUMULATIVE TOTAL RETURNS
Periods ending September 30, 2003
- --------------------------------------------------------------------------------
SINCE INCEPTION
28.57%
30 | TURNER FUNDS 2003 ANNUAL REPORT
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER CORE FIXED INCOME FUND
- --------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner Core Fixed Income Fund seeks high current income consistent with
reasonable risk to capital. The Fund invests primarily in U.S. government
obligations and other investment grade fixed income securities, including
corporate debt obligations and mortgage- and asset-backed securities. In
selecting investments for the Fund, the Sub-Adviser, Clover Capital Management,
chooses fixed income securities of issuers that it believes will offer
attractive income potential with an acceptable level of risk. Clover will invest
in fixed income obligations of different types and maturities depending on its
current assessment of the relative market values of the sectors in which the
Fund invests. Clover does not attempt to forecast interest rate changes.
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
[BAR GRAPH OMITTED, PLOT POINTS FOLLOWS]
38.7% Corporate bonds
32.2% Mortgage-backed securities
19.7% Treasury securities
6.1% Agency debt
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2003
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VALUE GROWTH
INVESTMENT STYLE
[] Ticker symbol TCFIX
[] CUSIP #87252R201
[] Top 10 holdings
(1) FHLMC CMO/REMIC Ser 2522, Cl PB, 4.750%, 11/15/14
(2) U.S. Treasury Bonds, 7.500%, 11/15/16
(3) FNMA Pool #254759, 4.500%, 06/01/18
(4) U.S. Treasury Bonds, 7.250%, 05/15/16
(5) SLMA, 6.470%, 10/03/22
(6) Wal-Mart Stores, 6.875%, 08/10/09
(7) U.S. Treasury Notes, 3.250%, 08/15/08
(8) Natural Fuel Gas, Ser D, MTN, 6.303%, 05/27/08
(9) FNMA CMO/REMIC Ser 2003-41, Cl XT, 4.500%, 07/25/15
(10) Emerson Electric, 7.125%, 08/15/10
[] % in 10 largest holdings 41.2%
[] Number of holdings 56
[] Average effective duration 4.9 years
[] Average maturity 6.34 years
[] Average yield to maturity 3.8%
[] Average credit quality AA3
[] Net assets $43 million
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER CORE FIXED INCOME FUND:
SEPTEMBER 30, 1993-SEPTEMBER 30, 2003*
[LINE GRAPH OMITTED, PLOT POINTS FOLLOWS]
TURNER CORE FIXED INCOME FUND LEHMAN US AGGREGATE BOND INDEX
SEP 93 $10000 $10000
SEP 94 9730 9678
SEP 95 11075 11040
SEP 96 11649 11578
SEP 97 12771 12706
SEP 98 14217 14167
SEP 99 13964 14115
SEP 00 14971 15102
SEP 01 16766 17057
SEP 02 18250 18524
SEP 03 18865 19524
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than its original cost. The performance in the above graph does not reflect the
deduction of taxes the shareholder will pay on fund distributions or the
redemptions of fund shares. The inception date of the Turner Core Fixed Income
Fund is December 6, 1991.
ANNUALIZED TOTAL RETURNS
Periods ending September 30, 2003
- --------------------------------------------------------------------------------
PAST ONE PAST THREE PAST FIVE PAST TEN
YEAR YEARS YEARS YEARS
3.37% 8.01% 5.82% 6.55%
TURNER FUNDS 2003 ANNUAL REPORT | 31
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER TOTAL RETURN FIXED INCOME FUND
- --------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner Total Return Fixed Income Fund seeks current income and capital
appreciation, an objective that emphasizes total return rather than just yield
alone. It invests in investment-grade fixed-income securities, including U.S.
government, corporate, mortgage-backed and asset-backed securities.
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
[BAR GRAPH OMITTED, PLOT POINTS FOLLOWS]
17.5% Treasury securities
16.4% Consumer discretion
16.2% Financial services
9.0% Material & processing
6.8% Mortgage-backed securities
5.5% Automotive & transportation
5.3% Producer durables
3.8% Utilities/communications
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2003
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VALUE GROWTH
INVESTMENT STYLE
[] Ticker symbol THQFX
[] CUSIP #87252R847
[] Top 10 holdings
(1) U.S. Treasury Notes, 3.250%, 08/15/08
(2) Goldman Sachs Mortgage Securities II, Ser 1998-C1, Cl A1, 6.060%,
10/18/30
(3) Goldman Sachs, 5.700%, 09/01/12
(4) General Motors Acceptance, 6.125%, 09/15/06
(5) International Lease Finance, 5.875%, 05/01/13
(6) John Deere Capital, 5.100%, 01/15/13
(7) General Electric, 5.000%, 02/01/13
(8) Dow Chemical, 5.250%, 05/14/04
(9) SLM, Ser A, MTN, 5.000%, 10/01/13
(10) Nextel Communications, 9.500%, 02/01/11
[] % in 10 largest holdings 65.6%
[] Number of holdings 15
[] Average effective duration 3.84 years
[] Average maturity 5.13 years
[] Average yield to maturity 3.9%
[] Average credit quality AA+
[] Convexity 0.06
[] Net assets $268 thousand
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER TOTAL RETURN FIXED INCOME FUND:
JUNE 30, 1999-SEPTEMBER 30, 2003*
[LINE GRAPH OMITTED, PLOT POINTS FOLLOWS]
TURNER TOTAL RETURN FIXED INCOME FUND LEHMAN AGGREGATE BOND INDEX
6/30/99 $10000 $10000
SEP 99 10047 10068
SEP 00 10748 10772
SEP 01 12024 12167
SEP 02 12859 13214
SEP 03 12037 13927
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than its original cost. The performance in the above graph does not reflect the
deduction of taxes the shareholder will pay on fund distributions or the
redemptions of fund shares. The inception date of the Turner Total Return Fixed
Income Fund is June 30, 1999.
ANNUALIZED TOTAL RETURNS
Periods ending September 30, 2003
- --------------------------------------------------------------------------------
PAST ONE YEAR PAST THREE YEARS SINCE INCEPTION
(6.39)% 3.85% 4.46%
32 | TURNER FUNDS 2003 ANNUAL REPORT
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER HIGH YIELD FUND
- --------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner High Yield Fund seeks high current income and capital appreciation.
It invests primarily in fixed income securities rated below investment grade.
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
[BAR GRAPH OMITTED, PLOT POINTS FOLLOWS]
19.1% Utilities and communications
19.0% Materials and processing
11.6% Consumer discretion
10.2% Automotive and transportation
10.1% Energy
6.3% Real estate
6.2% Healthcare
4.0% Producer durables
3.5% Consumer staples
1.8% Financial services
1.1% Miscellaneous
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2003
M L -----------------------------------
A A | |
R R | |
K G | |
E E | |
T | |
| |
C -----------------------------------
A | |
P | |
I | |
T | |
A | |
L -----------------------------------
I | |
Z | |
A S | |
T M | X |
I A | |
O L | |
N L -----------------------------------
VALUE GROWTH
INVESTMENT STYLE
[] Ticker symbol PCSHX
[] CUSIP #872524707
[] Top 10 holdings
(1) Freeport-McMoRan Copper & Gold, 10.125%, 02/01/10
(2) United Auto Group, 9.625%, 03/15/12
(3) Argosy Gaming, 9.000%, 09/01/11
(4) Stena, 9.625%, 12/01/12
(5) Case New Holland, 9.250%, 08/01/11
(6) Crown Euro Holdings, 9.500%, 03/01/11
(7) Echostar DBS, 9.375%, 02/01/09
(8) Medex, 8.875%, 05/15/13
(9) Nextel Communications, 9.500%, 02/01/11
(10) Sequa, 9.000%, 08/01/09
[] % in 10 largest holdings 22.5%
[] Number of holdings 67
[] Average effective duration 3.64 years
[] Average maturity 7.1 years
[] Average yield to maturity 7.57%
[] Average credit quality BB
[] Net assets $9 million
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER HIGH YIELD FUND:
FEBRUARY 28, 1998-SEPTEMBER 30, 2003*
[LINE GRAPH OMITTED, PLOT POINTS FOLLOWS]
TURNER HIGH YIELD BOND FUND MERRILL LYNCH HIGH YIELD, CASH PAY INDEX
2/28/98 $10000 $10000
SEP 98 9278 9895
SEP 99 10080 10265
SEP 00 10137 10391
SEP 01 7739 10045
SEP 02 7116 9825
SEP 03 8635 12598
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than its original cost. The performance in the above graph does not reflect the
deduction of taxes the shareholder will pay on fund distributions or the
redemptions of fund shares.
The inception date of the Turner High Yield Fund is February 27, 1998.
ANNUALIZED TOTAL RETURNS
Periods ending September 30, 2003
- --------------------------------------------------------------------------------
PAST ONE PAST THREE PAST FIVE SINCE
YEAR YEARS YEARS INCEPTION
21.61% (5.14)% (1.38)% (2.56)%
TURNER FUNDS 2003 ANNUAL REPORT | 33
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER ULTRA SHORT DURATION FIXED INCOME FUND
- --------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner Ultra Short Duration Fixed Income Fund seeks to produce maximum total
return consistent with the preservation of capital and investment prudence. It
invests primarily in high-grade securities issued or guaranteed by the U.S.
government or its agencies. The Fund seeks to limit fluctuations in principal
and reduce interest-rate risk by maintaining an average effective duration no
greater than that of a one-year Treasury note.
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
[BAR GRAPH OMITTED, PLOT POINTS FOLLOWS]
78.6% MORTGAGE-BACKED SECURITIES
6.2% AGENCY SECURITIES
2.2% ASSET-BACKED SECURITIES
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2003
M L -----------------------------------
A A | |
R R | |
K G | |
E E | |
T | |
| |
C -----------------------------------
A | |
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A | |
L -----------------------------------
I | |
Z | |
A S | |
T M | X |
I A | |
O L | |
N L -----------------------------------
VALUE GROWTH
INVESTMENT STYLE
[] Ticker symbol TSDOX, Class I Shares
[] CUSIP #872524103, Class I Shares
[] Top 10 holdings
(1) FHLMC CMO/REMIC, Ser 2463, Cl PE, 6.000%, 03/15/28
(2) FHLMC CMO/REMIC, Ser 2407, Cl DF, 6.000%, 05/15/25
(3) FHLMC CMO/REMIC, Ser 2586, Cl XG, 4.000%, 12/15/32
(4) FHLMC CMO/REMIC, Ser 2527, Cl LU, 3.790%, 12/15/28
(5) FHLMC CMO/REMIC, Ser 2370, Cl GC, 6.000%, 07/15/27
(6) FNMA CMO/REMIC, Ser 2001-4, Cl PB, 7.000%, 04/25/20
(7) FNMA CMO/REMIC, Ser 2002-82, Cl PC, 6.000%, 02/25/29
(8) FHLMC CMO/REMIC, Ser 2527, Cl LT, 3.870%, 12/15/28
(9) FHLMC CMO/REMIC, Ser 2586, Cl WA, 4.000%, 12/15/32
(10) FHLMC CMO/REMIC, Ser 2416, Cl PN, 6.000%, 11/15/28
[] % in 10 largest holdings 36.5%
[] Number of holdings 93
[] Average effective duration 0.6 years
[] Average maturity 0.72 years
[] Average yield to maturity 2.04%
[] Average credit quality Agency
[] Convexity (0.15)
[] Net assets $463 million, Class I Shares
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER ULTRA SHORT DURATION FIXED INCOME
FUND, CLASS I SHARES:
MARCH 31, 1994-SEPTEMBER 30, 2003*
[LINE GRAPH OMITTED, PLOT POINTS FOLLOWS]
TURNER ULTRA SHORT DURATION FIXED INCOME FUND, CLASS I MERRILL LYNCH 3-MONTH U.S. TREASURY BILL INDEX
3/1/94 $10000 $10000
SEP 94 10231 10235
SEP 95 10935 10837
SEP 96 11704 11431
SEP 97 12428 12047
SEP 98 13201 12693
SEP 99 13906 13289
SEP 00 14788 14058
SEP 01 15836 14824
SEP 02 16304 15120
MAR 03 16532 15320
* These figures represent past performance, which is no guarantee
of future results. The investment return and principal value of an investment
will fluctuate, so an investor's shares, when redeemed, may be worth more or
less than its original cost. The performance in the above graph does not reflect
the deduction of taxes the share- holder will pay on fund distributions or the
redemptions of fund shares. The inception date of the Turner Ultra Short
Duration Fixed Income Fund (Class I Shares) is March 1, 1994.
** Class II Shares were offered beginning on February 27, 1998. Class II Shares'
performance for the periods prior to February 27, 1998 reflects the performance
of the Fund's Class I Shares. The performance of the Class I Shares has not been
adjusted to reflect the higher internal operating expenses of the Class II
Shares. If it had, performance would have been lower than shown.
ANNUALIZED TOTAL RETURNS
Periods ending September 30, 2003
- --------------------------------------------------------------------------------
PAST ONE PAST THREE PAST FIVE SINCE
YEAR YEARS YEARS INCEPTION
Class I Shares 1.40% 3.79% 4.60% 5.39%
Class II Shares 1.15% 3.53% 4.31% 5.21%**
34 | TURNER FUNDS 2003 ANNUAL REPORT
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER SHORT DURATION FIXED INCOME FUND
- --------------------------------------------------------------------------------
FUND OBJECTIVE
The Turner Short Duration Fixed Income Fund seeks to produce maximum total
return consistent with the preservation of capital and investment prudence. It
invests primarily in high-grade securities issued or guaranteed by the U.S.
government or its agencies. The Fund seeks to limit fluctuations in principal
and reduce interest rate risk by maintaining an average effective duration no
greater than that of a three-year Treasury Bill.
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS:
[BAR GRAPH OMITTED, PLOT POINTS FOLLOWS]
58.4% MORTGAGE-BACKED SECURITIES
10.1% TREASURY SECURITIES
7.3% AGENCY DEBT
6.6% FINANCIAL SERVICES
4.2% ASSET-BACKED SECURITIES
2.1% MATERIALS & PROCESSING
1.5% UTILITIES/COMMUNICATIONS
1.0% AUTOMOTIVE & TRANSPORTATION
0.1% CONSUMER DISCRETIONARY
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2003
M L -----------------------------------
A A | |
R R | |
K G X | |
E E | |
T | |
| |
C -----------------------------------
A | |
P | |
I | |
T | |
A | |
L -----------------------------------
I | |
Z | |
A S | |
T M | |
I A | |
O L | |
N L -----------------------------------
VALUE GROWTH
INVESTMENT STYLE
[] Ticker symbol TSDGX, Class I Shares
[] CUSIP #872524202, Class I Shares
[] Top 10 holdings
(1) U.S. Treasury Notes, 2.375%, 08/15/06
(2) FHLMC CMO/REMIC Ser 2416, Cl PN, 6.000%, 11/15/28
(3) FHLMC CMO/REMIC Ser 2590, Cl UL, 3.750%, 03/15/32
(4) SLMA, 1.320%, 09/15/05
(5) FHLMC CMO/REMIC Ser 2515, Cl ED, 5.000%, 03/15/17
(6) FNMA, 2.750%, 11/21/06
(7) FNMA CMO/REMIC Ser 2001-68, Cl JL, 5.500%, 05/25/23
(8) FNMA CMO/REMIC Ser 2003-33, Cl PC, 4.500%, 03/25/27
(9) FHLB, Ser DU07, 2.840%, 02/28/07
(10) U.S. Treasury Notes, 4.750%, 11/15/08
[] % in 10 largest holdings 33.6%
[] Number of holdings 113
[] Average effective duration 1.43 years
[] Average maturity 1.66 years
[] Average yield to maturity 2.39%
[] Average credit quality Agency
[] Convexity (0.15)
[] Net assets $253 million, Class I Shares
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE TURNER SHORT DURATION FIXED INCOME FUND,
CLASS I SHARES:
MARCH 31, 1994-SEPTEMBER 30, 2003*
[LINE GRAPH OMITTED, PLOT POINTS FOLLOWS]
TURNER SHORT DURATION FIXED INCOME FUND, CLASS I LEHMAN 1-3 YEAR GOVERNMENT BOND INDEX
3/1/94 $10000 $10000
SEP 94 10089 10049
SEP 95 10976 10871
SEP 96 11637 11488
SEP 97 12463 12279
SEP 98 13469 13253
SEP 99 13858 13676
SEP 00 14690 14475
SEP 01 16063 16019
SEP 02 16817 16956
MAR 03 17178 17431
* These figures represent past performance, which is no guarantee of future
results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than its original cost. The performance in the above graph does not reflect the
deduction of taxes the shareholder will pay on fund distributions or the
redemptions of fund shares. The inception date of the Turner Short Duration
Fixed Income Fund (Class I Shares) is March 1, 1994.
** Class II Shares were offered beginning on April 28, 1999. Class II Shares'
performance for the periods prior to April 28, 1999 reflects the performance of
the Fund's Class I Shares. The performance of the Class I Shares has not been
adjusted to reflect the higher internal operating expenses of the Class II
Shares. If it had, performance would have been lower than shown.
ANNUALIZED TOTAL RETURNS
Periods ending September 30, 2003
- --------------------------------------------------------------------------------
PAST ONE PAST THREE PAST FIVE SINCE
YEAR YEARS YEARS INCEPTION
Class I Shares 2.15% 5.35% 4.98% 5.81%
Class II Shares 1.79% 5.10% 5.96%** 6.20%**
TURNER FUNDS 2003 ANNUAL REPORT | 35
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER DISCIPLINED LARGE CAP GROWTH FUND
September 30, 2003
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--99.2%
- --------------------------------------------------------------------------------
ACCOUNTING/TAX PREPARATION/BOOKKEEPING/
PAYROLL SERVICES--1.2%
- --------------------------------------------------------------------------------
Paychex 27,730 $ 941
-------
Total Accounting/tax preparation/
bookkeeping/payroll services 941
-------
- --------------------------------------------------------------------------------
ADVERTISING & RELATED SERVICES--1.8%
- --------------------------------------------------------------------------------
AOL Time Warner* 95,120 1,437
-------
Total Advertising & related services 1,437
-------
- --------------------------------------------------------------------------------
BASIC CHEMICAL MANUFACTURING--0.7%
- --------------------------------------------------------------------------------
Air Products & Chemicals 12,400 559
-------
Total Basic chemical manufacturing 559
-------
- --------------------------------------------------------------------------------
BEVERAGE MANUFACTURING--4.8%
- --------------------------------------------------------------------------------
Coca-Cola 47,720 2,050
PepsiCo 38,870 1,782
-------
Total Beverage manufacturing 3,832
-------
- --------------------------------------------------------------------------------
CABLE NETWORKS & PROGRAM DISTRIBUTION--2.7%
- --------------------------------------------------------------------------------
Comcast, Cl A* 31,790 982
InterActive* 34,760 1,149
-------
Total Cable networks &
program distribution 2,131
-------
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT
MANUFACTURING--6.1%
- --------------------------------------------------------------------------------
Cisco Systems* 151,360 2,957
Motorola 51,700 619
Nokia ADR 79,030 1,233
-------
Total Communications equipment
manufacturing 4,809
-------
- --------------------------------------------------------------------------------
COMPUTER & PERIPHERAL EQUIPMENT
MANUFACTURING--1.0%
- --------------------------------------------------------------------------------
EMC* 60,190 760
-------
Total Computer & peripheral
equipment manufacturing 760
-------
- --------------------------------------------------------------------------------
DATA PROCESSING SERVICES--1.0%
- --------------------------------------------------------------------------------
First Data 19,200 767
-------
Total Data processing services 767
-------
Value
Shares (000)
- --------------------------------------------------------------------------------
DEEP SEA, COASTAL & GREAT LAKES
WATER TRANSPORTATION--1.2%
- --------------------------------------------------------------------------------
Carnival 29,650 $ 975
-------
Total Deep sea, coastal &
great lakes water transportation 975
-------
- --------------------------------------------------------------------------------
DEPARTMENT STORES--4.1%
- --------------------------------------------------------------------------------
Wal-Mart Stores 58,240 3,253
-------
Total Department stores 3,253
-------
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT MANUFACTURING--7.8%
- --------------------------------------------------------------------------------
General Electric 207,400 6,183
-------
Total Electrical equipment
manufacturing 6,183
-------
- --------------------------------------------------------------------------------
ELECTRONIC SHOPPING & MAIL-ORDER HOUSES--1.0%
- --------------------------------------------------------------------------------
eBay* 14,960 801
-------
Total Electronic shopping &
mail-order houses 801
-------
- --------------------------------------------------------------------------------
ELECTRONICS & APPLIANCE STORES--0.8%
- --------------------------------------------------------------------------------
Best Buy* 13,360 635
-------
Total Electronics & appliance stores 635
-------
- --------------------------------------------------------------------------------
GROCERY & RELATED PRODUCT WHOLESALERS--0.9%
- --------------------------------------------------------------------------------
Sysco 22,300 729
-------
Total Grocery & related
product wholesalers 729
-------
- --------------------------------------------------------------------------------
HOME FURNISHINGS STORES--1.3%
- --------------------------------------------------------------------------------
Bed Bath & Beyond* 27,250 1,040
-------
Total Home furnishings stores 1,040
-------
- --------------------------------------------------------------------------------
INFORMATION SERVICES--1.4%
- --------------------------------------------------------------------------------
Yahoo!* 30,570 1,082
-------
Total Information services 1,082
-------
- --------------------------------------------------------------------------------
INSURANCE CARRIERS--3.1%
- --------------------------------------------------------------------------------
American International Group 26,980 1,557
UnitedHealth Group 18,240 918
-------
Total Insurance carriers 2,475
-------
36 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER DISCIPLINED LARGE CAP GROWTH FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
Medical equipment & supplies
manufacturing--0.9%
- --------------------------------------------------------------------------------
Boston Scientific* 11,680 $ 745
-------
Total Medical equipment &
supplies manufacturing 745
-------
- --------------------------------------------------------------------------------
Mining support activities--0.7%
- --------------------------------------------------------------------------------
Halliburton 22,900 555
Total Mining support activities 555
-------
- --------------------------------------------------------------------------------
Navigational/measuring/medical/
control instruments manufacturing--1.8%
- --------------------------------------------------------------------------------
Medtronic 30,310 1,422
-------
Total Navigational/measuring/
medical/control instruments
manufacturing 1,422
-------
- --------------------------------------------------------------------------------
Nondepository credit intermediation--1.4%
- --------------------------------------------------------------------------------
American Express 25,080 1,130
Total Nondepository credit
intermediation 1,130
-------
- --------------------------------------------------------------------------------
Other electrical equipment &
component manufacturing--0.9%
- --------------------------------------------------------------------------------
Corning* 76,480 720
-------
Total Other electrical equipment &
component manufacturing 720
-------
- --------------------------------------------------------------------------------
Pharmaceutical & medicine
manufacturing--20.0%
- --------------------------------------------------------------------------------
Abbott Laboratories 38,100 1,621
Amgen* 44,620 2,881
Bristol-Myers Squibb 38,900 998
Gilead Sciences* 13,160 736
Pfizer 194,947 5,923
Teva Pharmaceutical
Industries ADR 20,170 1,153
Wyeth 55,930 2,578
-------
Total Pharmaceutical & medicine
manufacturing 15,890
-------
Value
Shares (000)
- --------------------------------------------------------------------------------
SCHEDULED AIR TRANSPORTATION--1.6%
- --------------------------------------------------------------------------------
Southwest Airlines 71,500 $ 1,266
-------
Total Scheduled air transportation 1,266
-------
- --------------------------------------------------------------------------------
SCIENTIFIC R&D SERVICES--1.3%
- --------------------------------------------------------------------------------
Genentech* 12,770 1,023
-------
Total Scientific r&d services 1,023
-------
- --------------------------------------------------------------------------------
SECURITY & COMMODITY CONTRACTS
INTERMEDIATION & BROKERAGE--4.4%
- --------------------------------------------------------------------------------
Charles Schwab 106,230 1,265
Goldman Sachs Group 11,370 954
Morgan Stanley 25,700 1,297
-------
Total Security & commodity
contracts intermediation & brokerage 3,516
-------
- --------------------------------------------------------------------------------
SEMICONDUCTOR & OTHER ELECTRONIC
COMPONENT MANUFACTURING--12.8%
- --------------------------------------------------------------------------------
Analog Devices* 23,060 877
Applied Materials* 102,120 1,853
Intel 138,690 3,815
Micron Technology* 73,800 990
Texas Instruments 49,580 1,130
Tyco International 39,300 803
Xilinx* 25,340 723
-------
Total Semiconductor & other
electronic component manufacturing 10,191
-------
- --------------------------------------------------------------------------------
SOAP, CLEANERS & TOILET PREPARATION
MANUFACTURING--4.3%
- --------------------------------------------------------------------------------
Colgate-Palmolive 16,450 919
Procter & Gamble 27,010 2,507
-------
Total Soap, cleaners & toilet
preparation manufacturing 3,426
-------
- --------------------------------------------------------------------------------
SOFTWARE PUBLISHERS--7.3%
- --------------------------------------------------------------------------------
Electronic Arts* 8,680 801
Microsoft 178,480 4,960
-------
Total Software publishers 5,761
-------
TURNER FUNDS 2003 ANNUAL REPORT | 37
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER DISCIPLINED LARGE CAP GROWTH FUND
Shares/Face Value
Amount (000) (000)
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS--0.9%
- --------------------------------------------------------------------------------
Nortel Networks 181,790 $ 745
---------
Total Telecommunications 745
---------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $70,690) 78,799
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT--1.6%
- --------------------------------------------------------------------------------
ABN-Amro (A)
1.040%, dated 09/30/03, matures
10/01/03, repurchase price
$1,288,707 (collateralized by
U.S. Government obligations,
total market value $1,315,069) $ 1,289 1,289
- --------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $1,289) 1,289
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--100.8%
(COST $71,979) 80,088
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET--(0.8)%
- --------------------------------------------------------------------------------
Payable due to investment adviser (30)
Payable due to administrator (9)
Other assets and liabilities, net (633)
- --------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES, NET (672)
- --------------------------------------------------------------------------------
Value
(000)
- --------------------------------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------------------------------
Portfolio capital of Class I Shares
(unlimited authorization -- no par value)
based on 17,206,477 outstanding shares
of beneficial interest $105,725
Undistributed net investment income 19
Accumulated net realized loss
on investments (34,437)
Net unrealized appreciation
on investments 8,109
- --------------------------------------------------------------------------------
TOTAL NET ASSETS--100% $79,416
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS I SHARES $4.62
- --------------------------------------------------------------------------------
* Non-income producing security
(A) Tri-party repurchase agreement
ADR - American depository receipt
Cl - Class
The accompanying notes are an integral part of the financial statements.
38 | TURNER FUNDS 2003 ANNUAL REPORT
SCHEDULE OF INVESTMENTS
TURNER LARGE CAP GROWTH OPPORTUNITIES FUND
September 30, 2003
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--100.1%
- --------------------------------------------------------------------------------
ACCOUNTING/TAX PREPARATION/BOOKKEEPING/
PAYROLL SERVICES--1.2%
- --------------------------------------------------------------------------------
Paychex 1,220 $ 41
-----
Total Accounting/tax preparation/
bookkeeping/payroll services 41
-----
- --------------------------------------------------------------------------------
ADVERTISING & RELATED SERVICES--1.4%
- --------------------------------------------------------------------------------
AOL Time Warner* 3,300 50
-----
Total Advertising & related services 50
-----
- --------------------------------------------------------------------------------
CABLE NETWORKS & PROGRAM DISTRIBUTION--4.4%
- --------------------------------------------------------------------------------
Comcast, Cl A* 1,950 60
EchoStar Communications, Cl A* 980 38
InterActive* 1,720 57
-----
Total Cable networks & program
distribution 155
-----
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT
MANUFACTURING--6.3%
- --------------------------------------------------------------------------------
Cisco Systems* 5,200 101
Motorola 2,400 29
Nokia ADR 5,900 92
-----
Total Communications equipment
manufacturing 222
-----
- --------------------------------------------------------------------------------
COMPUTER & PERIPHERAL EQUIPMENT
MANUFACTURING--2.0%
- --------------------------------------------------------------------------------
EMC* 5,720 72
-----
Total Computer & peripheral
equipment manufacturing 72
-----
- --------------------------------------------------------------------------------
COMPUTER SYSTEMS DESIGN &
RELATED SERVICES--1.2%
- --------------------------------------------------------------------------------
Sungard Data Systems* 1,660 44
-----
Total Computer systems design &
related services 44
-----
- --------------------------------------------------------------------------------
DAIRY PRODUCT MANUFACTURING--1.1%
- --------------------------------------------------------------------------------
Dean Foods* 1,300 40
-----
Total Dairy product manufacturing 40
-----
Value
Shares (000)
- --------------------------------------------------------------------------------
DATA PROCESSING SERVICES--3.5%
- --------------------------------------------------------------------------------
Affiliated Computer Services, Cl A* 930 $ 45
First Data 1,000 40
Fiserv* 1,060 39
-----
Total Data processing services 124
-----
- --------------------------------------------------------------------------------
DEEP SEA, COASTAL & GREAT LAKES
WATER TRANSPORTATION--1.1%
- --------------------------------------------------------------------------------
Carnival 1,200 39
-----
Total Deep sea, coastal & great lakes
water transportation 39
-----
- --------------------------------------------------------------------------------
DEPARTMENT STORES--3.0%
- --------------------------------------------------------------------------------
Wal-Mart Stores 1,892 106
-----
Total Department stores 106
-----
- --------------------------------------------------------------------------------
DRY CLEANING & LAUNDRY SERVICES--1.1%
- --------------------------------------------------------------------------------
Cintas 1,080 40
-----
Total Dry cleaning & laundry services 40
-----
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT MANUFACTURING--2.5%
- --------------------------------------------------------------------------------
General Electric 3,000 89
-----
Total Electrical equipment
manufacturing 89
-----
- --------------------------------------------------------------------------------
ELECTRONIC SHOPPING & MAIL-ORDER HOUSES--1.6%
- --------------------------------------------------------------------------------
eBay* 1,060 57
-----
Total Electronic shopping &
mail-order houses 57
-----
- --------------------------------------------------------------------------------
ELECTRONICS & APPLIANCE STORES--2.0%
- --------------------------------------------------------------------------------
Best Buy* 770 37
CDW 590 34
-----
Total Electronics & appliance stores 71
-----
- --------------------------------------------------------------------------------
EMPLOYMENT SERVICES--1.1%
- --------------------------------------------------------------------------------
Manpower 1,060 39
-----
Total Employment services 39
-----
TURNER FUNDS 2003 ANNUAL REPORT | 39
FINANCIAL STATEMENTS
SCHEDULE OF INVESTMENTS
TURNER LARGE CAP GROWTH OPPORTUNITIES FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
INDUSTRIAL MACHINERY MANUFACTURING--2.1%
- --------------------------------------------------------------------------------
Kla-Tencor* 700 $ 36
Lam Research* 1,760 39
-----
Total Industrial machinery manufacturing 75
-----
- --------------------------------------------------------------------------------
INFORMATION SERVICES--2.5%
- --------------------------------------------------------------------------------
Juniper Networks* 2,800 42
Yahoo!* 1,270 45
-----
Total Information services 87
-----
- --------------------------------------------------------------------------------
INSURANCE CARRIERS--2.8%
- --------------------------------------------------------------------------------
American International Group 980 57
Anthem* 620 44
-----
Total Insurance carriers 101
-----
- --------------------------------------------------------------------------------
LIMITED-SERVICE EATING PLACES--1.6%
- --------------------------------------------------------------------------------
Starbucks* 1,940 56
-----
Total Limited-service eating places 56
-----
- --------------------------------------------------------------------------------
MEDICAL EQUIPMENT & SUPPLIES
MANUFACTURING--3.0%
- --------------------------------------------------------------------------------
Boston Scientific* 920 59
Zimmer Holdings* 880 48
-----
Total Medical equipment & supplies
manufacturing 107
-----
- --------------------------------------------------------------------------------
MINING SUPPORT ACTIVITIES--1.5%
- --------------------------------------------------------------------------------
Halliburton 2,240 54
-----
Total Mining support activities 54
-----
- --------------------------------------------------------------------------------
NATURAL GAS DISTRIBUTION--1.3%
- --------------------------------------------------------------------------------
Williams 4,780 45
-----
Total Natural gas distribution 45
-----
- --------------------------------------------------------------------------------
NAVIGATIONAL/MEASURING/MEDICAL/
CONTROL INSTRUMENTS MANUFACTURING--1.3%
- --------------------------------------------------------------------------------
Medtronic 1,000 47
-----
Total Navigational/measuring/medical/
control instruments manufacturing 47
-----
Value
Shares (000)
- --------------------------------------------------------------------------------
NONDEPOSITORY CREDIT INTERMEDIATION--1.4%
- --------------------------------------------------------------------------------
American Express 1,090 $ 49
-----
Total Nondepository credit intermediation 49
-----
- --------------------------------------------------------------------------------
OFFICES OF PHYSICIANS--1.0%
- --------------------------------------------------------------------------------
Caremark Rx* 1,500 34
-----
Total Offices of physicians 34
-----
- --------------------------------------------------------------------------------
OTHER ELECTRICAL EQUIPMENT & COMPONENT
MANUFACTURING--1.3%
- --------------------------------------------------------------------------------
Corning* 4,910 46
-----
Total Other electrical equipment &
component manufacturing 46
-----
- --------------------------------------------------------------------------------
PHARMACEUTICAL & MEDICINE
MANUFACTURING--12.0%
- --------------------------------------------------------------------------------
Abbott Laboratories 850 36
Amgen* 1,360 88
Bristol-Myers Squibb 1,400 36
Gilead Sciences* 670 37
Pfizer 4,467 136
Teva Pharmaceutical Industries ADR 730 42
Wyeth 1,100 51
-----
Total Pharmaceutical & medicine
manufacturing 426
-----
- --------------------------------------------------------------------------------
PIPELINE TRANSPORTATION OF NATURAL GAS--0.9%
- --------------------------------------------------------------------------------
El Paso 4,200 31
-----
Total Pipeline transportation
of natural gas 31
-----
- --------------------------------------------------------------------------------
SCIENTIFIC R&D SERVICES--1.2%
- --------------------------------------------------------------------------------
Genentech* 520 42
-----
Total Scientific r&d services 42
-----
- --------------------------------------------------------------------------------
SECURITY & COMMODITY CONTRACTS
INTERMEDIATION & BROKERAGE--2.5%
- --------------------------------------------------------------------------------
Charles Schwab 2,500 30
Goldman Sachs Group 720 60
-----
Total Security & commodity contracts
intermediation & brokerage 90
-----
40 | TURNER FUNDS 2003 ANNUAL REPORT
SCHEDULE OF INVESTMENTS
TURNER LARGE CAP GROWTH OPPORTUNITIES FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
SEMICONDUCTOR & OTHER ELECTRONIC COMPONENT MANUFACTURING--15.9%
- --------------------------------------------------------------------------------
Analog Devices* 1,210 $ 46
Applied Materials* 2,650 48
Intel 5,100 140
LSI Logic* 3,900 35
Micron Technology* 5,270 71
Sanmina-SCI* 4,310 42
STMicroelectronics, NY Shares 2,200 53
Taiwan Semiconductor
Manufacturing ADR* 4,480 48
Texas Instruments 2,200 50
Xilinx* 1,150 33
------
Total Semiconductor & other electronic
component manufacturing 566
------
- --------------------------------------------------------------------------------
SOFTWARE PUBLISHERS--10.8%
- --------------------------------------------------------------------------------
Electronic Arts* 600 55
Mercury Interactive* 850 39
Microsoft 8,900 247
Siebel Systems* 4,490 44
------
Total Software publishers 385
------
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS--1.4%
- --------------------------------------------------------------------------------
Nortel Networks 12,450 51
------
Total Telecommunications 51
------
- --------------------------------------------------------------------------------
TRAVELER ACCOMMODATION--2.1%
- --------------------------------------------------------------------------------
MGM Mirage* 1,000 37
Starwood Hotels &
Resorts Worldwide 1,050 36
------
Total Traveler accommodation 73
------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $3,178) 3,554
- --------------------------------------------------------------------------------
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT--2.3%
- --------------------------------------------------------------------------------
Morgan Stanley (A)
0.750%, dated 09/30/03, matures
10/01/03, repurchase price
$81,100 (collateralized by
U.S. Government obligations,
total market value $82,841) $81 $ 81
- --------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $81) 81
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--102.4%
(COST $3,259) $3,635
- --------------------------------------------------------------------------------
* Non-income producing security
(A) Tri-party repurchase agreement
ADR - American depository receipt
Cl - Class
Percentages are based on net assets of $3,551,041.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2003 ANNUAL REPORT | 41
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER MIDCAP GROWTH FUND
September 30, 2003
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--97.5%
- --------------------------------------------------------------------------------
ADVERTISING & RELATED SERVICES--0.6%
- --------------------------------------------------------------------------------
Interpublic Group# 340,900 $ 4,814
-------
Total Advertising & related services 4,814
-------
- --------------------------------------------------------------------------------
AGRICULTURE, CONSTRUCTION & MINING
MACHINERY MANUFACTURING--0.5%
- --------------------------------------------------------------------------------
Smith International* 99,500 3,580
-------
Total Agriculture, construction &
mining machinery manufacturing 3,580
-------
- --------------------------------------------------------------------------------
ARCHITECTURAL, ENGINEERING &
RELATED SERVICES--1.2%
- --------------------------------------------------------------------------------
Fluor 143,770 5,367
Tetra Tech* 186,980 3,723
-------
Total Architectural, engineering &
related services 9,090
-------
- --------------------------------------------------------------------------------
BAKERIES & TORTILLA MANUFACTURING--0.4%
- --------------------------------------------------------------------------------
Flowers Foods 124,710 2,843
-------
Total Bakeries & tortilla manufacturing 2,843
-------
- --------------------------------------------------------------------------------
BASIC CHEMICAL MANUFACTURING--0.6%
- --------------------------------------------------------------------------------
Air Products & Chemicals 99,290 4,478
-------
Total Basic chemical manufacturing 4,478
-------
- --------------------------------------------------------------------------------
BOILER, TANK & SHIPPING CONTAINER
MANUFACTURING--0.5%
- --------------------------------------------------------------------------------
Crown Holdings* 559,950 3,780
-------
Total Boiler, tank & shipping
container manufacturing 3,780
-------
- --------------------------------------------------------------------------------
CLOTHING STORES--0.8%
- --------------------------------------------------------------------------------
Chico's FAS*# 207,990 6,373
-------
Total Clothing stores 6,373
-------
- --------------------------------------------------------------------------------
COMMERCIAL/INDUSTRIAL EQUIPMENT
RENTAL & LEASING--1.0%
- --------------------------------------------------------------------------------
Comverse Technology* 508,830 7,612
-------
Total Commercial/industrial
equipment rental & leasing 7,612
-------
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT
MANUFACTURING--1.2%
- --------------------------------------------------------------------------------
Polycom* 340,480 $ 5,655
Western Wireless, Cl A* 207,300 3,864
-------
Total Communications equipment
manufacturing 9,519
-------
- --------------------------------------------------------------------------------
COMPUTER & PERIPHERAL EQUIPMENT
MANUFACTURING--1.5%
- --------------------------------------------------------------------------------
Integrated Device Technology* 539,048 6,695
Network Appliance* 258,490 5,307
-------
Total Computer & peripheral
equipment manufacturing 12,002
-------
- --------------------------------------------------------------------------------
COMPUTER SYSTEMS DESIGN &
RELATED SERVICES--2.0%
- --------------------------------------------------------------------------------
Checkfree* 168,460 3,369
Enterasys Networks* 743,760 2,975
Sungard Data Systems* 350,660 9,226
-------
Total Computer systems design &
related services 15,570
-------
- --------------------------------------------------------------------------------
CUT & SEW APPAREL MANUFACTURING--0.4%
- --------------------------------------------------------------------------------
Quiksilver* 209,800 3,346
-------
Total Cut & sew apparel manufacturing 3,346
-------
- --------------------------------------------------------------------------------
DAIRY PRODUCT MANUFACTURING--0.7%
- --------------------------------------------------------------------------------
Dean Foods* 175,760 5,454
-------
Total Dairy product manufacturing 5,454
-------
- --------------------------------------------------------------------------------
DATA PROCESSING SERVICES--2.5%
- --------------------------------------------------------------------------------
Ceridian* 237,640 4,425
Fair Isaac 86,360 5,092
Fiserv* 277,870 10,067
-------
Total Data processing services 19,584
-------
- --------------------------------------------------------------------------------
DEEP SEA, COASTAL & GREAT LAKES
WATER TRANSPORTATION--0.6%
- --------------------------------------------------------------------------------
Royal Caribbean Cruises 172,150 4,839
-------
Total Deep sea, coastal & great
lakes water transportation 4,839
-------
42 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER MIDCAP GROWTH FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
DEPARTMENT STORES--1.7%
- --------------------------------------------------------------------------------
Dollar Tree Stores* 224,160 $ 7,509
Family Dollar Stores 132,200 5,274
---------
Total Department stores 12,783
---------
- --------------------------------------------------------------------------------
DEPOSITORY CREDIT INTERMEDIATION--1.0%
- --------------------------------------------------------------------------------
Silicon Valley Bancshares* 117,280 3,241
Sovereign Bancorp 259,970 4,822
---------
Total Depository credit intermediation 8,063
---------
- --------------------------------------------------------------------------------
DRUGS & DRUGGISTS' SUNDRIES WHOLESALE--2.0%
- --------------------------------------------------------------------------------
Henry Schein* 159,425 9,039
Medicis Pharmaceutical, Cl A# 111,960 6,561
---------
Total Drugs & druggists' sundries wholesale 15,600
---------
- --------------------------------------------------------------------------------
DRY CLEANING & LAUNDRY SERVICES--0.6%
- --------------------------------------------------------------------------------
Cintas 121,700 4,483
---------
Total Dry cleaning & laundry services 4,483
---------
- --------------------------------------------------------------------------------
ELECTRIC POWER GENERATION,
TRANSMISSION & DISTRIBUTION--0.6%
- --------------------------------------------------------------------------------
AES* 662,000 4,912
---------
Total Electric power generation,
transmission & distribution 4,912
---------
- --------------------------------------------------------------------------------
ELECTRONICS & APPLIANCE STORES--1.7%
- --------------------------------------------------------------------------------
CDW 226,230 13,063
---------
Total Electronics & appliance stores 13,063
---------
- --------------------------------------------------------------------------------
EMPLOYMENT SERVICES--1.0%
- --------------------------------------------------------------------------------
Manpower 206,750 7,670
---------
Total Employment services 7,670
---------
- --------------------------------------------------------------------------------
ENGINE, TURBINE & POWER TRANSMISSION
EQUIPMENT MANUFACTURING--0.7%
- --------------------------------------------------------------------------------
Cummins 121,000 5,376
---------
Total Engine, turbine & power transmission
equipment manufacturing 5,376
---------
- --------------------------------------------------------------------------------
FULL-SERVICE RESTAURANTS--0.5%
- --------------------------------------------------------------------------------
Cheesecake Factory* 109,400 3,957
---------
Total Full-service restaurants 3,957
---------
Value
Shares (000)
- --------------------------------------------------------------------------------
GENERAL FREIGHT TRUCKING--0.4%
- --------------------------------------------------------------------------------
Swift Transportation* 143,690 $ 3,260
---------
Total General freight trucking 3,260
---------
- --------------------------------------------------------------------------------
GENERAL MEDICAL & SURGICAL HOSPITALS--0.9%
- --------------------------------------------------------------------------------
Community Health Systems* 155,800 3,381
Universal Health Services, Cl B* 74,600 3,689
---------
Total General medical & surgical hospitals 7,070
---------
- --------------------------------------------------------------------------------
HEALTH & PERSONAL CARE STORES--2.0%
- --------------------------------------------------------------------------------
NBTY* 175,780 4,104
Omnicare 158,530 5,717
Rite Aid*# 1,043,800 5,386
---------
Total Health & personal care stores 15,207
---------
- --------------------------------------------------------------------------------
HOME FURNISHINGS STORES--0.4%
- --------------------------------------------------------------------------------
Cost Plus* 82,100 3,031
---------
Total Home furnishings stores 3,031
---------
- --------------------------------------------------------------------------------
INDUSTRIAL MACHINERY MANUFACTURING--3.8%
- --------------------------------------------------------------------------------
Kla-Tencor* 215,770 11,091
Lam Research* 515,420 11,417
Novellus Systems* 199,300 6,726
---------
Total Industrial machinery manufacturing 29,234
---------
- --------------------------------------------------------------------------------
INFORMATION SERVICES--2.2%
- --------------------------------------------------------------------------------
CNET Networks* 760,530 5,384
DoubleClick* 541,930 5,837
Juniper Networks* 410,190 6,120
---------
Total Information services 17,341
---------
- --------------------------------------------------------------------------------
INSURANCE CARRIERS--2.8%
- --------------------------------------------------------------------------------
Aetna 110,900 6,768
Axis Capital Holdings* 145,000 3,618
Mid Atlantic Medical Services* 149,490 7,688
Radian Group 84,370 3,746
---------
Total Insurance carriers 21,820
---------
- --------------------------------------------------------------------------------
JEWELRY, LUGGAGE & LEATHER GOODS STORES--0.6%
- --------------------------------------------------------------------------------
Tiffany 133,600 4,987
---------
Total Jewelry, luggage & leather goods stores 4,987
---------
TURNER FUNDS 2003 ANNUAL REPORT | 43
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER MIDCAP GROWTH FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
LIMITED-SERVICE EATING PLACES--1.2%
- --------------------------------------------------------------------------------
Starbucks* 319,490 $ 9,201
---------
Total Limited-service eating places 9,201
---------
- --------------------------------------------------------------------------------
MACHINERY, EQUIPMENT & SUPPLIES
WHOLESALE--0.6%
- --------------------------------------------------------------------------------
Fastenal 117,974 4,459
---------
Total Machinery, equipment &
supplies wholesale 4,459
---------
- --------------------------------------------------------------------------------
MANAGEMENT, SCIENTIFIC & TECHNICAL
CONSULTING SERVICES--0.7%
- --------------------------------------------------------------------------------
Monster Worldwide* 225,195 5,670
---------
Total Management, scientific &
technical consulting services 5,670
---------
- --------------------------------------------------------------------------------
MEDICAL EQUIPMENT & SUPPLIES
MANUFACTURING--3.1%
- --------------------------------------------------------------------------------
Inamed* 53,380 3,921
Steris* 162,850 3,749
Varian Medical Systems* 131,740 7,572
Zimmer Holdings* 159,420 8,784
---------
Total Medical equipment &
supplies manufacturing 24,026
---------
- --------------------------------------------------------------------------------
METAL ORE MINING--1.4%
- --------------------------------------------------------------------------------
Freeport-McMoRan Copper &
Gold, Cl B# 177,070 5,861
Phelps Dodge* 109,860 5,141
---------
Total Metal ore mining 11,002
---------
- --------------------------------------------------------------------------------
MOTION PICTURE & VIDEO INDUSTRIES--0.7%
- --------------------------------------------------------------------------------
Pixar*# 81,799 5,445
---------
Total Motion picture &
video industries 5,445
---------
- --------------------------------------------------------------------------------
MOTOR VEHICLE MANUFACTURING--0.6%
- --------------------------------------------------------------------------------
Navistar International*# 124,640 4,647
---------
Total Motor vehicle manufacturing 4,647
---------
Value
Shares (000)
- --------------------------------------------------------------------------------
NATURAL GAS DISTRIBUTION--0.7%
- --------------------------------------------------------------------------------
Williams 596,480 $ 5,619
---------
Total Natural gas distribution 5,619
---------
- --------------------------------------------------------------------------------
NAVIGATIONAL/MEASURING/MEDICAL/
CONTROL INSTRUMENTS MANUFACTURING--2.0%
- --------------------------------------------------------------------------------
Dentsply International 80,122 3,593
Fisher Scientific International* 199,720 7,927
Visx*# 189,300 3,606
---------
Total Navigational/measuring/
medical/control instruments
manufacturing 15,126
---------
- --------------------------------------------------------------------------------
NONDEPOSITORY CREDIT INTERMEDIATION--0.6%
- --------------------------------------------------------------------------------
Providian Financial* 412,720 4,866
---------
Total Nondepository credit
intermediation 4,866
---------
- --------------------------------------------------------------------------------
OFFICES OF PHYSICIANS--1.0%
- --------------------------------------------------------------------------------
Caremark Rx* 325,950 7,367
---------
Total Offices of physicians 7,367
---------
- --------------------------------------------------------------------------------
OIL & GAS EXTRACTION--1.2%
- --------------------------------------------------------------------------------
Chesapeake Energy# 366,530 3,951
XTO Energy 250,200 5,252
---------
Total Oil & gas extraction 9,203
---------
- --------------------------------------------------------------------------------
OTHER ELECTRICAL EQUIPMENT &
COMPONENT MANUFACTURING--1.8%
- --------------------------------------------------------------------------------
Ciena* 811,010 4,793
Corning* 1,001,840 9,437
---------
Total Other electrical equipment &
component manufacturing 14,230
---------
- --------------------------------------------------------------------------------
OTHER FINANCIAL INVESTMENT ACTIVITIES--1.6%
- --------------------------------------------------------------------------------
Investors Financial Services# 189,470 5,950
SEI Investments 210,224 6,832
---------
Total Other financial
investment activities 12,782
---------
44 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER MIDCAP GROWTH FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
OTHER GENERAL PURPOSE MACHINERY
MANUFACTURING--0.7%
- --------------------------------------------------------------------------------
SPX* 124,940 $ 5,657
---------
Total Other general purpose
machinery manufacturing 5,657
---------
- --------------------------------------------------------------------------------
OTHER LEATHER & ALLIED PRODUCT
MANUFACTURING--0.7%
- --------------------------------------------------------------------------------
Coach* 99,330 5,423
-------
Total Other leather & allied product
manufacturing 5,423
-------
- --------------------------------------------------------------------------------
OTHER MISCELLANEOUS MANUFACTURING--3.2%
- --------------------------------------------------------------------------------
International Game Technology 267,580 7,533
Leapfrog Enterprises*# 201,260 7,648
Marvel Enterprises* 295,060 6,565
WMS Industries* 129,140 2,926
---------
Total Other miscellaneous
manufacturing 24,672
---------
- --------------------------------------------------------------------------------
OUTPATIENT CARE CENTERS--0.5%
- --------------------------------------------------------------------------------
Coventry Health Care* 71,800 3,787
---------
Total Outpatient care centers 3,787
---------
- --------------------------------------------------------------------------------
PHARMACEUTICAL & MEDICINE
MANUFACTURING--5.5%
- --------------------------------------------------------------------------------
Allergan 65,840 5,184
Chiron*# 197,910 10,230
Invitrogen*# 107,640 6,242
Neurocrine Biosciences* 101,807 5,041
Pharmaceutical Resources* 123,260 8,409
Taro Pharmaceuticals Industries* 69,750 3,931
Watson Pharmaceuticals* 77,030 3,211
---------
Total Pharmaceutical & medicine
manufacturing 42,248
---------
- --------------------------------------------------------------------------------
PIPELINE TRANSPORTATION OF NATURAL GAS--0.7%
- --------------------------------------------------------------------------------
Kinder Morgan 93,790 5,066
---------
Total Pipeline transportation
of natural gas 5,066
---------
Value
Shares (000)
- --------------------------------------------------------------------------------
PROFESSIONAL & COMMERCIAL EQUIPMENT &
SUPPLY WHOLESALE--1.7%
- --------------------------------------------------------------------------------
Lexar Media* 146,500 $ 2,496
Patterson Dental* 182,160 10,489
---------
Total Professional & commercial
equipment & supply wholesale 12,985
---------
- --------------------------------------------------------------------------------
PROFESSIONAL, SCIENTIFIC &
TECHNICAL SERVICES--0.4%
- --------------------------------------------------------------------------------
Alliance Data Systems* 116,850 3,085
---------
Total Professional, scientific &
technical services 3,085
---------
- --------------------------------------------------------------------------------
RADIO & TELEVISION BROADCASTING--1.5%
- --------------------------------------------------------------------------------
Univision Communications,
Cl A*# 185,090 5,910
Westwood One* 185,130 5,589
---------
Total Radio & television broadcasting 11,499
---------
- --------------------------------------------------------------------------------
SCIENTIFIC R&D SERVICES--2.0%
- --------------------------------------------------------------------------------
Celgene*# 200,300 8,679
Gen-Probe* 74,700 4,046
Idec Pharmaceuticals* 74,777 2,479
---------
Total Scientific r&d services 15,204
---------
- --------------------------------------------------------------------------------
SECURITY & COMMODITY CONTRACTS
INTERMEDIATION & BROKERAGE--3.1%
- --------------------------------------------------------------------------------
Ameritrade Holding* 669,830 7,536
Bear Stearns 75,750 5,666
Jefferies Group 107,120 3,080
Legg Mason 102,900 7,429
---------
Total Security & commodity contracts
intermediation & brokerage 23,711
---------
- --------------------------------------------------------------------------------
SEMICONDUCTOR & OTHER ELECTRONIC
COMPONENT MANUFACTURING--9.9%
- --------------------------------------------------------------------------------
Agere Systems, Cl A*# 1,807,560 5,549
Celestica*# 252,320 4,002
Cymer* 153,520 6,325
Cypress Semiconductor*# 239,970 4,243
Fairchild Semiconductor
International* 304,860 5,055
TURNER FUNDS 2003 ANNUAL REPORT | 45
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
TURNER MIDCAP GROWTH FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
LSI Logic* 495,790 $ 4,457
Marvell Technology Group* 104,300 3,937
Micron Technology* 558,320 7,493
Molex 221,900 6,344
National Semiconductor* 183,010 5,909
PMC - Sierra* 372,894 4,919
RF Micro Devices*# 557,670 5,181
Sanmina-SCI* 756,490 7,338
Skyworks Solutions* 396,860 3,611
Vishay Intertechnology* 152,430 2,671
-------
Total Semiconductor & other
electronic component
manufacturing 77,034
-------
- --------------------------------------------------------------------------------
SERVICES TO BUILDINGS & DWELLINGS--0.9%
- --------------------------------------------------------------------------------
Ecolab 279,060 7,046
-------
Total Services to buildings & dwellings 7,046
-------
- --------------------------------------------------------------------------------
SOFTWARE PUBLISHERS--7.7%
- --------------------------------------------------------------------------------
BEA Systems* 647,500 7,802
Citrix Systems* 241,300 5,328
Cognos* 124,860 3,873
Electronic Arts* 116,530 10,748
Macromedia* 148,686 3,679
Mercury Interactive* 121,720 5,527
Red Hat* 283,539 2,864
Siebel Systems* 613,400 5,962
Take-Two Interactive Software*# 146,590 5,009
VeriSign* 638,080 8,595
-------
Total Software publishers 59,387
-------
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS--1.4%
- --------------------------------------------------------------------------------
Sonus Networks* 1,080,100 7,485
Time Warner Telecom, Cl A* 321,604 2,978
-------
Total Telecommunications 10,463
-------
- --------------------------------------------------------------------------------
TRAVELER ACCOMMODATION--2.3%
- --------------------------------------------------------------------------------
Marriott International, Cl A 108,810 4,682
MGM Mirage* 142,210 5,198
Starwood Hotels & Resorts
Worldwide 232,640 8,096
-------
Total Traveler accommodation 17,976
-------
Shares/Face Value
Amount (000) (000)
- --------------------------------------------------------------------------------
WASTE TREATMENT & DISPOSAL--0.7%
- --------------------------------------------------------------------------------
Allied Waste Industries* 467,710 $ 5,051
-------
Total Waste treatment & disposal 5,051
-------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $632,816) 754,678
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WARRANTS--0.0%
- --------------------------------------------------------------------------------
MicroStrategy, Expires 06/24/07* 1,550 --
- --------------------------------------------------------------------------------
TOTAL WARRANTS
(COST $0) --
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENT HELD AS COLLATERAL
FOR LOANED SECURITIES--8.7%
- --------------------------------------------------------------------------------
Boston Global Investment Trust--
Quality Portfolio 67,383,600 67,384
-------
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT HELD AS
COLLATERAL FOR LOANED SECURITIES
(COST $67,384 67,384
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT--2.4%
- --------------------------------------------------------------------------------
ABN-Amro (A)
1.04%, dated 09/30/03, matures
10/01/03, repurchase price
$18,444,164 (collateralized by
U.S. Government obligations,
total market value $18,812,512) $18,444 18,444
- --------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $18,444) 18,444
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--108.6%
(COST $718,644) 840,506
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET--(8.6)%
- --------------------------------------------------------------------------------
Obligation to return securities lending
collateral (67,384)
Payable due to investment adviser (490)
Payable due to administrator (93)
Other assets and liabilities, net 1,672
- --------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES, NET (66,295)
- --------------------------------------------------------------------------------
46 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER MIDCAP GROWTH FUND
Value
(000)
- --------------------------------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------------------------------
Portfolio capital of Class I Shares
(unlimited authorization -- no par value)
based on 39,594,213 outstanding shares
of beneficial interest $1,343,751
Portfolio capital of Class II Shares
(unlimited authorization -- no par value)
based on 21,850 outstanding shares
of beneficial interest 385
Accumulated net realized loss
on investments (691,787)
Net unrealized appreciation
on investments 121,862
- --------------------------------------------------------------------------------
TOTAL NET ASSETS--100% $774,211
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS I SHARES
($773,787,842 / 39,594,213 SHARES) $19.54
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS II SHARES
($422,975 / 21,850 SHARES) $19.36
- --------------------------------------------------------------------------------
* Non-income producing security
# Security fully or partially on loan at September 30, 2003 (see note 10 in
notes to financial statements). The total value of securities on loan at
September 30, 2003, was $62,255,411.
(A) Tri-party repurchase agreement
Cl - Class Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2003 ANNUAL REPORT | 47
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
TURNER SMALL CAP GROWTH FUND
September 30, 2003
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--99.8%
- --------------------------------------------------------------------------------
ACTIVITIES RELATED TO CREDIT INTERMEDIATION--0.6%
- --------------------------------------------------------------------------------
iDine Rewards Network* 69,710 $ 1,133
-------
Total Activities related to credit
intermediation 1,133
-------
- --------------------------------------------------------------------------------
ADVERTISING & RELATED SERVICES--0.6%
- --------------------------------------------------------------------------------
aQuantive* 125,090 1,158
-------
Total Advertising & related services 1,158
-------
- --------------------------------------------------------------------------------
ARCHITECTURAL, ENGINEERING &
RELATED SERVICES--1.4%
- --------------------------------------------------------------------------------
Plexus* 77,650 1,207
Tetra Tech* 74,080 1,475
-------
Total Architectural, engineering &
related services 2,682
-------
- --------------------------------------------------------------------------------
AUTOMOTIVE PARTS, ACCESSORIES & TIRE STORES--0.5%
- --------------------------------------------------------------------------------
PEP Boys 62,110 950
-------
Total Automotive parts, accessories &
tire stores 950
-------
- --------------------------------------------------------------------------------
BAKERIES & TORTILLA MANUFACTURING--0.7%
- --------------------------------------------------------------------------------
American Italian Pasta, Cl A*# 33,709 1,304
-------
Total Bakeries & tortilla manufacturing 1,304
-------
- --------------------------------------------------------------------------------
BASIC CHEMICAL MANUFACTURING--0.7%
- --------------------------------------------------------------------------------
Airgas 76,450 1,361
-------
Total Basic chemical manufacturing 1,361
-------
- --------------------------------------------------------------------------------
BUSINESS SUPPORT SERVICES--0.5%
- --------------------------------------------------------------------------------
Portfolio Recovery Associates*# 38,010 966
-------
Total Business support services 966
-------
- --------------------------------------------------------------------------------
COMMERCIAL & SERVICE INDUSTRY
MACHINERY MANUFACTURING--0.7%
- --------------------------------------------------------------------------------
Imax* 166,800 1,318
-------
Total Commercial & service industry
machinery manufacturing 1,318
-------
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMERCIAL/INDUSTRIAL EQUIPMENT
RENTAL & LEASING--0.7%
- --------------------------------------------------------------------------------
United Rentals* 65,680 $1,057
Westell Technologies, Cl A* 31,020 232
-------
Total Commercial/industrial equipment
rental & leasing 1,289
-------
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT
MANUFACTURING--0.5%
- --------------------------------------------------------------------------------
Western Wireless, Cl A* 49,400 921
-------
Total Communications equipment
manufacturing 921
-------
- --------------------------------------------------------------------------------
COMMUNITY CARE FACILITIES FOR THE ELDERLY--0.3%
- --------------------------------------------------------------------------------
Genesis Health Ventures* 26,860 651
-------
Total Community care facilities for
the elderly 651
-------
- --------------------------------------------------------------------------------
COMPUTER & PERIPHERAL EQUIPMENT
MANUFACTURING--1.3%
- --------------------------------------------------------------------------------
Integrated Device Technology* 168,840 2,097
Silicon Storage Technology* 43,470 380
-------
Total Computer & peripheral
equipment manufacturing 2,477
-------
- --------------------------------------------------------------------------------
COMPUTER SYSTEMS DESIGN &
RELATED SERVICES--2.2%
- --------------------------------------------------------------------------------
Avid Technology* 33,860 1,789
Enterasys Networks* 306,440 1,226
Manhattan Associates* 48,150 1,247
-------
Total Computer systems design &
related services 4,262
-------
- --------------------------------------------------------------------------------
CONSUMER GOODS RENTAL--0.7%
- --------------------------------------------------------------------------------
Hollywood Entertainment* 81,680 1,389
-------
Total Consumer goods rental 1,389
-------
- --------------------------------------------------------------------------------
CUT & SEW APPAREL MANUFACTURING--0.8%
- --------------------------------------------------------------------------------
Quiksilver* 100,910 1,610
-------
Total Cut & sew apparel manufacturing 1,610
-------
48 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER SMALL CAP GROWTH FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
DATA PROCESSING SERVICES--1.7%
- --------------------------------------------------------------------------------
Documentum* 72,970 $ 1,555
Global Payments 45,580 1,641
-------
Total Data processing services 3,196
-------
- --------------------------------------------------------------------------------
DEPOSITORY CREDIT INTERMEDIATION--5.7%
- --------------------------------------------------------------------------------
Boston Private Financial Holdings 64,870 1,528
Community First Bankshares 39,090 1,033
East-West Bancorp 41,396 1,770
Netbank 128,370 1,598
Southwest Bancorp of Texas# 35,140 1,283
UCBH Holdings 31,220 944
United Bankshares 44,960 1,346
Wintrust Financial 40,820 1,538
-------
Total Depository credit intermediation 11,040
-------
- --------------------------------------------------------------------------------
ELECTRONIC SHOPPING & MAIL-ORDER HOUSES--1.6%
- --------------------------------------------------------------------------------
1-800-flowers.com, Cl A* 143,920 1,082
Overture Services* 75,020 1,988
-------
Total Electronic shopping &
mail-order houses 3,070
-------
- --------------------------------------------------------------------------------
ELECTRONICS & APPLIANCE STORES--1.0%
- --------------------------------------------------------------------------------
Insight Enterprises* 59,330 903
Ultimate Electronics*# 99,150 941
-------
Total Electronics & appliance stores 1,844
-------
- --------------------------------------------------------------------------------
EMPLOYMENT SERVICES--0.9%
- --------------------------------------------------------------------------------
MPS Group* 191,740 1,726
-------
Total Employment services 1,726
-------
- --------------------------------------------------------------------------------
ENGINE, TURBINE & POWER TRANSMISSION EQUIPMENT MANUFACTURING--0.6%
- --------------------------------------------------------------------------------
China Yuchai International 64,890 1,150
-------
Total Engine, turbine & power
transmission equipment
manufacturing 1,150
-------
- --------------------------------------------------------------------------------
HEALTH & PERSONAL CARE STORES--0.7%
- --------------------------------------------------------------------------------
NBTY* 61,230 1,430
-------
Total Health & personal care stores 1,430
-------
Value
Shares (000)
- --------------------------------------------------------------------------------
HOME FURNISHINGS STORES--0.7%
- --------------------------------------------------------------------------------
Cost Plus* 36,860 $1,361
-------
Total Home furnishings stores 1,361
-------
- --------------------------------------------------------------------------------
HOME HEALTH CARE SERVICES--0.4%
- --------------------------------------------------------------------------------
Option Care* 60,200 723
-------
Total Home health care services 723
-------
- --------------------------------------------------------------------------------
INDUSTRIAL MACHINERY MANUFACTURING--1.9%
- --------------------------------------------------------------------------------
Asyst Technologies* 94,380 1,328
Entegris* 37,060 419
Varian Semiconductor
Equipment Associates* 50,810 1,903
-------
Total Industrial machinery
manufacturing 3,650
-------
- --------------------------------------------------------------------------------
INFORMATION SERVICES--3.3%
- --------------------------------------------------------------------------------
CNET Networks* 234,670 1,662
eSpeed, Cl A* 51,290 1,160
Ipass* 37,970 892
Looksmart* 263,960 829
Mindspeed Technologies* 156,470 843
Valueclick* 113,190 952
-------
Total Information services 6,338
-------
- --------------------------------------------------------------------------------
INSURANCE CARRIERS--1.7%
- --------------------------------------------------------------------------------
Direct General* 42,980 1,078
Platinum Underwriters Holdings 46,520 1,307
Scottish Re Group 34,840 841
-------
Total Insurance carriers 3,226
-------
- --------------------------------------------------------------------------------
LAWN & GARDEN EQUIPMENT &
SUPPLIES STORES--0.6%
- --------------------------------------------------------------------------------
Tractor Supply* 32,780 1,076
-------
Total Lawn & garden equipment &
supplies stores 1,076
-------
- --------------------------------------------------------------------------------
LIMITED-SERVICE EATING PLACES--0.6%
- --------------------------------------------------------------------------------
Panera Bread, Cl A* 28,280 1,158
-------
Total Limited-service eating places 1,158
-------
TURNER FUNDS 2003 ANNUAL REPORT | 49
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
TURNER SMALL CAP GROWTH FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
MANAGEMENT, SCIENTIFIC & TECHNICAL CONSULTING SERVICES--3.6%
- --------------------------------------------------------------------------------
Advisory Board*# 40,420 $ 1,837
DiamondCluster International* 168,230 1,139
Kroll* 77,620 1,444
Pacer International* 84,470 1,683
SM&A* 73,830 850
-------
Total Management, scientific &
technical consulting services 6,953
-------
- --------------------------------------------------------------------------------
MEDICAL EQUIPMENT & SUPPLIES
MANUFACTURING--3.7%
- --------------------------------------------------------------------------------
Cooper 46,790 1,907
Inamed* 31,770 2,333
Sybron Dental Specialties* 78,510 1,968
Wright Medical Group* 36,790 930
-------
Total Medical equipment & supplies
manufacturing 7,138
-------
- --------------------------------------------------------------------------------
MOTOR VEHICLE BODY & TRAILER
MANUFACTURING--1.1%
- --------------------------------------------------------------------------------
Winnebago Industries# 47,430 2,114
-------
Total Motor vehicle body & trailer
manufacturing 2,114
-------
- --------------------------------------------------------------------------------
NAVIGATIONAL/MEASURING/MEDICAL/
CONTROL INSTRUMENTS MANUFACTURING--1.7%
- --------------------------------------------------------------------------------
Cognex 30,850 811
Newport* 15,400 217
Visx* 121,740 2,319
-------
Total Navigational/measuring/medical/
control instruments manufacturing 3,347
-------
- --------------------------------------------------------------------------------
NURSING CARE FACILITIES--0.5%
- --------------------------------------------------------------------------------
Beverly Enterprises* 157,910 935
-------
Total Nursing care facilities 935
-------
- --------------------------------------------------------------------------------
OIL & GAS EXTRACTION--2.6%
- --------------------------------------------------------------------------------
Patina Oil & Gas 28,890 1,047
Southwestern Energy* 65,890 1,193
Tom Brown* 61,650 1,584
Ultra Petroleum* 89,710 1,251
-------
Total Oil & gas extraction 5,075
-------
Value
Shares (000)
- --------------------------------------------------------------------------------
OTHER ELECTRICAL EQUIPMENT &
COMPONENT MANUFACTURING--1.6%
- --------------------------------------------------------------------------------
FuelCell Energy*# 113,860 $ 1,332
Wilson Greatbatch Technologies* 49,120 1,771
-------
Total Other electrical equipment &
component manufacturing 3,103
-------
- --------------------------------------------------------------------------------
OTHER FINANCIAL INVESTMENT ACTIVITIES--0.6%
- --------------------------------------------------------------------------------
Affiliated Managers Group* 19,120 1,201
-------
Total Other financial investment activities 1,201
-------
- --------------------------------------------------------------------------------
OTHER FOOD MANUFACTURING--0.5%
- --------------------------------------------------------------------------------
Hercules* 88,110 998
-------
Total Other food manufacturing 998
-------
- --------------------------------------------------------------------------------
OTHER GENERAL PURPOSE MACHINERY
MANUFACTURING--1.4%
- --------------------------------------------------------------------------------
Clarcor 23,500 917
Cuno*# 25,090 983
IDEX# 23,130 843
-------
Total Other general purpose machinery
manufacturing 2,743
-------
- --------------------------------------------------------------------------------
OTHER HEAVY CONSTRUCTION--0.5%
- --------------------------------------------------------------------------------
Dycom Industries* 50,470 1,029
-------
Total Other heavy construction 1,029
-------
- --------------------------------------------------------------------------------
OTHER INVESTMENT POOLS & FUNDS--0.5%
- --------------------------------------------------------------------------------
Ventas 61,480 1,053
-------
Total Other investment pools & funds 1,053
-------
- --------------------------------------------------------------------------------
OTHER MISCELLANEOUS MANUFACTURING--3.2%
- --------------------------------------------------------------------------------
Alliance Gaming* 64,750 1,313
K2* 81,610 1,212
Marvel Enterprises* 82,330 1,832
Scientific Games, Cl A* 158,690 1,811
-------
Total Other miscellaneous manufacturing 6,168
-------
- --------------------------------------------------------------------------------
OTHER MISCELLANEOUS STORE RETAILERS--0.8%
- --------------------------------------------------------------------------------
Petco Animal Supplies* 47,640 1,486
-------
Total Other miscellaneous store retailers 1,486
-------
50 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER SMALL CAP GROWTH FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
OTHER NONMETALLIC MINERAL PRODUCT
MANUFACTURING--0.6%
- --------------------------------------------------------------------------------
Cabot Microelectronics*# 21,940 $ 1,223
-------
Total Other nonmetallic mineral
product manufacturing 1,223
-------
- --------------------------------------------------------------------------------
OTHER SPECIAL TRADE CONTRACTORS--0.6%
- --------------------------------------------------------------------------------
Chicago Bridge & Iron, NY Shares 38,860 1,055
-------
Total Other special trade contractors 1,055
-------
- --------------------------------------------------------------------------------
OUTPATIENT CARE CENTERS--2.2%
- --------------------------------------------------------------------------------
Amsurg*# 48,400 1,597
Select Medical* 34,800 1,002
Sierra Health Services* 77,490 1,592
-------
Total Outpatient care centers 4,191
-------
- --------------------------------------------------------------------------------
PAINT, COATING & ADHESIVE MANUFACTURING--0.6%
- --------------------------------------------------------------------------------
Ferro 50,510 1,079
-------
Total Paint, coating & adhesive
manufacturing 1,079
-------
- --------------------------------------------------------------------------------
PHARMACEUTICAL & MEDICINE
MANUFACTURING--10.7%
- --------------------------------------------------------------------------------
Alkermes* 108,320 1,486
Columbia Laboratories* 84,360 1,019
Dade Behring Holdings* 113,970 3,220
Immucor* 93,390 2,517
KV Pharmaceutical, Cl A* 89,910 2,023
MGI Pharma* 95,310 3,742
NPS Pharmaceuticals*# 72,360 2,015
OSI Pharmaceuticals* 31,180 1,012
Penwest Pharmaceuticals* 55,130 1,185
Salix Pharmaceuticals* 57,660 1,111
United Therapeutics* 60,886 1,375
-------
Total Pharmaceutical & medicine
manufacturing 20,705
-------
- --------------------------------------------------------------------------------
PROFESSIONAL & COMMERCIAL EQUIPMENT &
SUPPLY WHOLESALE--0.6%
- --------------------------------------------------------------------------------
Lexar Media* 69,540 1,185
-------
Total Professional & commercial
equipment & supply wholesale 1,185
-------
Value
Shares (000)
- --------------------------------------------------------------------------------
REMEDIATION & OTHER WASTE
MANAGEMENT SERVICES--0.5%
- --------------------------------------------------------------------------------
Stake Technology* 96,870 $ 897
-------
Total Remediation & other waste
management services 897
-------
- --------------------------------------------------------------------------------
SCHEDULED AIR TRANSPORTATION--0.7%
- --------------------------------------------------------------------------------
Airtran Holdings* 81,900 1,372
-------
Total Scheduled air transportation 1,372
-------
- --------------------------------------------------------------------------------
SCIENTIFIC R&D SERVICES--2.5%
- --------------------------------------------------------------------------------
Gen-Probe* 50,310 2,725
Medicines* 77,550 2,017
-------
Total Scientific r&d services 4,742
-------
- --------------------------------------------------------------------------------
SECURITY & COMMODITY CONTRACTS
INTERMEDIATION & BROKERAGE--1.6%
- --------------------------------------------------------------------------------
Investment Technology Group* 51,370 985
Jefferies Group 37,700 1,084
Knight Trading Group* 93,300 1,068
-------
Total Security & commodity contracts
intermediation & brokerage 3,137
-------
- --------------------------------------------------------------------------------
SEMICONDUCTOR & OTHER ELECTRONIC
COMPONENT MANUFACTURING--10.6%
- --------------------------------------------------------------------------------
Aeroflex* 118,910 1,052
ATMI* 64,350 1,626
Cymer* 32,140 1,324
Formfactor* 47,170 1,020
Integrated Circuit Systems* 41,330 1,242
Micrel* 150,610 1,836
O2Micro International* 65,560 947
Omnivision Technologies*# 30,110 1,272
Power Integrations* 31,940 1,062
Power-One* 124,450 1,281
RF Micro Devices*# 148,230 1,377
Skyworks Solutions* 185,670 1,690
TTM Technologies* 133,140 1,901
Vitesse Semiconductor* 260,950 1,670
Zoran* 61,660 1,202
-------
Total Semiconductor & other electronic
component manufacturing 20,502
-------
TURNER FUNDS 2003 ANNUAL REPORT | 51
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER SMALL CAP GROWTH FUND
Value
Shares (000)
- -----------------------------------------------------------
SOFTWARE PUBLISHERS--8.5%
- -----------------------------------------------------------
Akamai Technologies*# 223,770 $ 960
Altiris* 42,820 1,125
Ascential Software* 74,927 1,388
F5 Networks*# 77,300 1,487
Filenet* 61,120 1,227
Macromedia* 61,550 1,523
Micromuse* 271,110 2,218
MicroStrategy, Cl A*# 38,380 1,766
Openwave Systems*# 223,520 943
SkillSoft ADR* 207,763 1,548
Take-Two Interactive Software* 37,860 1,293
Verint Systems* 43,540 932
----------
Total Software publishers 16,410
----------
- -----------------------------------------------------------
STEEL PRODUCT MANUFACTURING FROM
PURCHASED STEEL--0.6%
- -----------------------------------------------------------
Steel Dynamics*# 74,340 1,125
----------
Total Steel product manufacturing
from purchased steel 1,125
----------
- -----------------------------------------------------------
TELECOMMUNICATIONS--3.3%
- -----------------------------------------------------------
Commonwealth Telephone
Enterprises*# 26,680 1,071
Inet Technologies* 13,220 171
Sonus Networks* 261,810 1,814
Tekelec* 122,060 1,905
Wireless Facilities* 112,170 1,335
----------
Total Telecommunications 6,296
----------
- -----------------------------------------------------------
TRAVEL ARRANGEMENT & RESERVATION SERVICES--0.3%
- -----------------------------------------------------------
Pegasus Solutions* 47,600 658
----------
Total Travel arrangement &
reservation services 658
----------
- -----------------------------------------------------------
TOTAL COMMON STOCK
(COST $159,194) 192,379
- -----------------------------------------------------------
- -----------------------------------------------------------
WARRANTS--0.0%
- -----------------------------------------------------------
MicroStrategy, Expires 06/24/07* 4,419 1
- -----------------------------------------------------------
TOTAL WARRANTS
(COST $0) 1
- -----------------------------------------------------------
Value
Shares (000)
- -----------------------------------------------------------
SHORT-TERM INVESTMENT HELD AS COLLATERAL
FOR LOANED SECURITIES--7.9%
- -----------------------------------------------------------
Boston Global Investment Trust--
Quality Portfolio 15,226,660 $15,227
----------
- -----------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT HELD AS
COLLATERAL FOR LOANED SECURITIES
(COST $15,227) 15,227
- -----------------------------------------------------------
- -----------------------------------------------------------
TOTAL INVESTMENTS--107.7%
(COST $174,421) 207,607
- -----------------------------------------------------------
- -----------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET--(7.7)%
- -----------------------------------------------------------
Obligation to return securities lending
collateral (15,227)
Payable due to investment adviser (129)
Payable due to administrator (24)
Other assets and liabilities, net 564
- -----------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES, NET (14,816)
- -----------------------------------------------------------
- -----------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------
Portfolio capital of Class I Shares (unlimited
authorization -- no par value)
based on 10,210,217 outstanding shares
of beneficial interest 343,008
Accumulated net realized loss
on investments (183,403)
Net unrealized appreciation
on investments 33,186
- -----------------------------------------------------------
TOTAL NET ASSETS--100% $192,791
- -----------------------------------------------------------
- -----------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS I SHARES $18.88
- -----------------------------------------------------------
* Non-income producing security
# Security fully or partially on loan at September 30, 2003 (see Note 10 in
notes to financial statements). The total value of securities on loan at
September 30, 2003, was $14,331,968.
ADR - American depository receipt
Cl - Class
The accompanying notes are an integral part of the financial statements.
52 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER MICRO CAP GROWTH FUND
September 30, 2003
Value
Shares (000)
- ----------------------------------------------------------
COMMON STOCK--90.8%
- ----------------------------------------------------------
AGENCIES & OTHER INSURANCE
RELATED ACTIVITIES--1.1%
- ----------------------------------------------------------
LabOne* 116,000 $ 2,706
--------
Total Agencies & other insurance
related activities 2,706
--------
- ----------------------------------------------------------
AGRICULTURE, CONSTRUCTION & MINING
MACHINERY MANUFACTURING--0.9%
- ----------------------------------------------------------
Joy Global* 81,850 1,285
Lone Star Technologies* 82,850 1,118
--------
Total Agriculture, construction &
mining machinery manufacturing 2,403
--------
- ----------------------------------------------------------
BASIC CHEMICAL MANUFACTURING--0.9%
- ----------------------------------------------------------
Tetra Technologies* 110,370 2,276
-----
Total Basic chemical manufacturing 2,276
- ----------------------------------------------------------
BEER/WINE/DISTILLED ALCOHOLIC
BEVERAGE WHOLESALE--0.6%
- ----------------------------------------------------------
Central European Distribution*# 54,270 1,484
--------
Total Beer/wine/distilled alcoholic
beverage wholesale 1,484
--------
- ----------------------------------------------------------
BUSINESS SUPPORT SERVICES--1.5%
- ----------------------------------------------------------
Icon ADR* 98,340 3,725
--------
Total Business support services 3,725
--------
- ----------------------------------------------------------
CLOTHING STORES--3.4%
- ----------------------------------------------------------
Cache*# 108,770 2,219
Casual Male Retail Group* 145,670 1,077
Goody's Family Clothing 54,940 542
Jos. A. Bank Clothiers* 77,130 3,391
Mothers Work* 45,321 1,375
--------
Total Clothing stores 8,604
--------
- ----------------------------------------------------------
COMMERCIAL/INDUSTRIAL EQUIPMENT
RENTAL & LEASING--0.9%
- ----------------------------------------------------------
Audiocodes* 208,630 1,565
Network Equipment Technologies* 89,090 815
--------
Total Commercial/industrial
equipment rental & leasing 2,380
--------
Value
Shares (000)
- ----------------------------------------------------------
COMMUNICATIONS EQUIPMENT
MANUFACTURING--1.0%
- ----------------------------------------------------------
Comtech Telecommunications* 55,200 $ 1,320
Trimble Navigation*# 51,510 1,192
--------
Total Communications equipment
manufacturing 2,512
--------
- ----------------------------------------------------------
COMPUTER & PERIPHERAL EQUIPMENT
MANUFACTURING--2.1%
- ----------------------------------------------------------
Advanced Digital Information* 107,040 1,501
Hutchinson Technology* 71,890 2,379
Komag*# 86,336 1,513
--------
Total Computer & peripheral
equipment manufacturing 5,393
--------
- ----------------------------------------------------------
COMPUTER SYSTEMS DESIGN &
RELATED SERVICES--5.2%
- ----------------------------------------------------------
Anteon International* 92,940 2,844
Digital River* 65,100 1,780
Enterasys Networks* 309,190 1,237
IMPAC Medical Systems* 80,858 1,447
Ixia* 96,370 1,043
Quality Systems* 33,920 1,364
Radisys* 63,130 1,139
SafeNet* 26,530 958
Sapient* 386,130 1,386
--------
Total Computer systems design &
related services 13,198
--------
- ----------------------------------------------------------
CUT & SEW APPAREL MANUFACTURING--2.2%
- ----------------------------------------------------------
Oxford Industries 87,750 5,634
--------
Total Cut & sew apparel
manufacturing 5,634
--------
- ----------------------------------------------------------
DEPOSITORY CREDIT INTERMEDIATION--8.8%
- ----------------------------------------------------------
BankAtlantic Bancorp, Cl A 182,960 2,607
Bankunited Financial, Cl A* 110,070 2,320
Boston Private Financial
Holdings# 97,240 2,291
Commercial Capital Bancorp* 126,540 1,978
FirstFed Financial* 37,920 1,498
IberiaBank 21,490 1,131
Independent Bank 58,615 1,716
Nara Bancorp 63,030 1,080
TURNER FUNDS 2003 ANNUAL REPORT | 53
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER MICRO CAP GROWTH FUND
Value
Shares (000)
- ----------------------------------------------------------
PFF Bancorp 67,368 $ 2,148
R&G Financial, Cl B 96,730 2,824
Seacoast Financial Services 86,140 1,784
Sterling Financial* 34,761 979
--------
Total Depository credit intermediation 22,356
--------
- ----------------------------------------------------------
EMPLOYMENT SERVICES--0.5%
- ----------------------------------------------------------
Gevity HR 92,300 1,355
--------
Total Employment services 1,355
--------
- ----------------------------------------------------------
ENGINE, TURBINE & POWER TRANSMISSION
EQUIPMENT MANUFACTURING--0.9%
- ----------------------------------------------------------
China Yuchai International 132,590 2,349
--------
Total Engine, turbine & power
transmission equipment
manufacturing 2,349
--------
- ----------------------------------------------------------
FOOTWEAR MANUFACTURING--0.2%
- ----------------------------------------------------------
Shoe Carnival* 30,390 435
--------
Total Footwear manufacturing 435
--------
- ----------------------------------------------------------
FULL-SERVICE RESTAURANTS--0.7%
- ----------------------------------------------------------
Rare Hospitality International* 67,825 1,690
--------
Total Full-service restaurants 1,690
--------
- ----------------------------------------------------------
HOME HEALTH CARE SERVICES--1.1%
- ----------------------------------------------------------
Dynacq International*# 74,310 1,345
Intuitive Surgical* 82,509 1,376
--------
Total Home health care services 2,721
--------
- ----------------------------------------------------------
HVAC & COMMERCIAL REFRIGERATION
EQUIPMENT MANUFACTURING--0.9%
- ----------------------------------------------------------
Engineered Support Systems 37,500 2,269
--------
Total Hvac & commercial refrigeration
equipment manufacturing 2,269
--------
- ----------------------------------------------------------
INDUSTRIAL MACHINERY MANUFACTURING--1.1%
- ----------------------------------------------------------
ChipPAC, Cl A* 315,210 1,856
Mattson Technology* 103,280 936
--------
Total Industrial machinery
manufacturing 2,792
--------
Value
Shares (000)
- ----------------------------------------------------------
INFORMATION SERVICES--2.5%
- ----------------------------------------------------------
Autobytel* 110,730 $ 1,054
Centillium Communications* 264,540 1,870
FindWhat.com*# 51,990 899
SupportSoft* 229,750 2,571
--------
Total Information services 6,394
--------
- ----------------------------------------------------------
INSURANCE CARRIERS--3.0%
- ----------------------------------------------------------
American Physicians Capital* 44,130 1,226
ProAssurance* 131,170 3,388
Triad Guaranty* 60,950 2,991
--------
Total Insurance carriers 7,605
--------
- ----------------------------------------------------------
JEWELRY, LUGGAGE & LEATHER GOODS STORES--1.0%
- ----------------------------------------------------------
Friedman's, Cl A 177,700 2,479
--------
Total Jewelry, luggage &
leather goods stores 2,479
--------
- ----------------------------------------------------------
LAWN & GARDEN EQUIPMENT & SUPPLIES
STORES--2.9%
- ----------------------------------------------------------
Tractor Supply* 221,450 7,266
--------
Total Lawn & garden equipment &
supplies stores 7,266
--------
- ----------------------------------------------------------
MANAGEMENT, SCIENTIFIC & TECHNICAL
CONSULTING SERVICES--1.6%
- ----------------------------------------------------------
Charles River Associates* 53,620 1,530
Navigant Consulting* 84,360 1,038
Right Management Consultants* 1 --
SM&A* 127,070 1,463
--------
Total Management, scientific &
technical consulting services 4,031
--------
- ----------------------------------------------------------
MEDICAL EQUIPMENT & SUPPLIES
MANUFACTURING--5.0%
- ----------------------------------------------------------
Advanced Neuromodulation
Systems*# 55,635 2,220
Alaris Medical Systems* 112,630 1,870
Align Technology*# 151,054 1,890
Exactech* 37,540 614
Hanger Orthopedic Group* 172,540 2,648
Merit Medical Systems* 112,786 2,492
Sola International* 63,090 1,009
--------
Total Medical equipment &
supplies manufacturing 12,743
--------
54 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER MICRO CAP GROWTH FUND
Value
Shares (000)
- ----------------------------------------------------------
MINING SUPPORT ACTIVITIES--0.6%
- ----------------------------------------------------------
Oceaneering International* 68,510 $ 1,611
--------
Total Mining support activities 1,611
--------
- ----------------------------------------------------------
MOTOR VEHICLE PARTS MANUFACTURING--1.5%
- ----------------------------------------------------------
ESCO Technologies* 84,670 3,833
--------
Total Motor vehicle parts manufacturing 3,833
--------
- ----------------------------------------------------------
NAVIGATIONAL/MEASURING/MEDICAL/
CONTROL INSTRUMENTS MANUFACTURING--4.0%
- ----------------------------------------------------------
Aclara BioSciences* 228,700 906
Credence Systems* 78,760 906
EDO 184,050 3,727
Herley Industries* 71,970 1,261
Schick Technologies*# 126,670 1,032
Sensytech* 73,520 1,156
Vital Images*# 66,090 1,237
--------
Total Navigational/measuring/medical/
control instruments manufacturing 10,225
--------
- ----------------------------------------------------------
NONDEPOSITORY CREDIT INTERMEDIATION--0.9%
- ----------------------------------------------------------
Cash America International 68,760 1,128
United PanAm Financial* 72,290 1,258
--------
Total Nondepository credit intermediation 2,386
--------
- ----------------------------------------------------------
NONFERROUS PRODUCTION & PROCESSING--0.3%
- ----------------------------------------------------------
Encore Wire* 47,942 633
--------
Total Nonferrous production & processing 633
--------
- ----------------------------------------------------------
OIL & GAS EXTRACTION--5.2%
- ----------------------------------------------------------
Brigham Exploration* 335,750 2,283
Denbury Resources* 96,000 1,186
Evergreen Resources*# 149,160 4,027
Patina Oil & Gas 127,585 4,624
Southwestern Energy* 56,560 1,024
--------
Total Oil & gas extraction 13,144
--------
- ----------------------------------------------------------
OTHER ELECTRICAL EQUIPMENT & COMPONENT
MANUFACTURING--0.9%
- ----------------------------------------------------------
General Cable* 72,400 576
Ultralife Batteries* 111,630 1,602
--------
Total Other electrical equipment &
component manufacturing 2,178
--------
Value
Shares (000)
- ----------------------------------------------------------
OTHER GENERAL PURPOSE MACHINERY
MANUFACTURING--0.3%
- ----------------------------------------------------------
JLG Industries 69,010 $ 795
--------
Total Other general purpose machinery
manufacturing 795
--------
- ----------------------------------------------------------
OTHER MISCELLANEOUS MANUFACTURING--0.4%
- ----------------------------------------------------------
K2* 70,530 1,047
--------
Total Other miscellaneous manufacturing 1,047
--------
- ----------------------------------------------------------
OTHER MISCELLANEOUS STORE RETAILERS--0.3%
- ----------------------------------------------------------
Brookstone* 37,890 751
--------
Total Other miscellaneous store retailers 751
--------
- ----------------------------------------------------------
OUTPATIENT CARE CENTERS--2.3%
- ----------------------------------------------------------
Amsurg*# 63,940 2,109
LCA-Vision* 97,470 1,321
Sierra Health Services* 119,580 2,457
--------
Total Outpatient care centers 5,887
--------
- ----------------------------------------------------------
PHARMACEUTICAL & MEDICINE
MANUFACTURING--6.8%
- ----------------------------------------------------------
Able Laboratories*# 77,790 1,456
Acambis ADR*# 25,750 1,333
Caraco Pharm Labs*# 192,500 1,858
Columbia Laboratories* 182,940 2,210
Immucor* 124,510 3,356
Penwest Pharmaceuticals* 71,040 1,527
Salix Pharmaceuticals* 281,590 5,423
--------
Total Pharmaceutical & medicine
manufacturing 17,163
--------
- ----------------------------------------------------------
PLASTICS PRODUCT MANUFACTURING--0.9%
- ----------------------------------------------------------
Jarden* 58,670 2,215
--------
Total Plastics product manufacturing 2,215
--------
- ----------------------------------------------------------
PROFESSIONAL & COMMERCIAL EQUIPMENT &
SUPPLY WHOLESALE--1.2%
- ----------------------------------------------------------
Neoware Systems*# 128,237 2,189
Sigma Designs* 104,100 894
--------
Total Professional & commercial
equipment & supply wholesale 3,083
--------
TURNER FUNDS 2003 ANNUAL REPORT | 55
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER MICRO CAP GROWTH FUND
Value
Shares (000)
- ----------------------------------------------------------
RAIL TRANSPORTATION--0.5%
- ----------------------------------------------------------
Genesee & Wyoming, Cl A* 51,625 $ 1,224
--------
Total Rail transportation 1,224
--------
- ----------------------------------------------------------
REMEDIATION & OTHER WASTE
MANAGEMENT SERVICES--0.6%
- ----------------------------------------------------------
Metal Management* 28,750 561
Stake Technology* 108,200 1,002
--------
Total Remediation & other waste
management services 1,563
--------
- ----------------------------------------------------------
SCIENTIFIC R&D SERVICES--1.0%
- ----------------------------------------------------------
Inveresk Research Group* 131,490 2,610
--------
Total Scientific r&d services 2,610
--------
- ----------------------------------------------------------
SEMICONDUCTOR & OTHER ELECTRONIC
COMPONENT MANUFACTURING--5.2%
- ----------------------------------------------------------
Aeroflex* 240,710 2,130
Artisan Components* 45,220 760
Formfactor* 58,460 1,264
Innovex* 168,260 1,674
Integrated Silicon Solutions* 46,790 466
NAM TAI Electronics# 127,930 3,471
Planar Systems* 78,060 1,674
White Electronic Designs* 92,180 991
Zoran* 41,154 803
--------
Total Semiconductor & other electronic
component manufacturing 13,233
--------
- ----------------------------------------------------------
SOCIAL ASSISTANCE--0.8%
- ----------------------------------------------------------
Providence Service* 128,200 2,026
--------
Total Social assistance 2,026
--------
- ----------------------------------------------------------
SOFTWARE PUBLISHERS--3.2%
- ----------------------------------------------------------
Altiris*# 101,290 2,662
Ansys* 69,420 2,467
Evolving Systems* 47,680 561
MicroStrategy, Cl A*# 31,670 1,457
Progress Software* 47,960 1,031
--------
Total Software publishers 8,178
--------
Value
Shares (000)
- ----------------------------------------------------------
SPORTING GOODS/HOBBY/
MUSICAL INSTRUMENT STORES--0.5%
- ----------------------------------------------------------
Hancock Fabrics# 77,750 $ 1,227
--------
Total Sporting goods/hobby/musical
instrument stores 1,227
--------
- ----------------------------------------------------------
STEEL PRODUCT MANUFACTURING FROM
PURCHASED STEEL--0.7%
- ----------------------------------------------------------
Maverick Tube* 106,740 1,657
--------
Total Steel product manufacturing
from purchased steel 1,657
--------
- ----------------------------------------------------------
TELECOMMUNICATIONS--1.2%
- ----------------------------------------------------------
Alamosa Holdings*# 449,590 1,686
Primus Telecommunications*# 196,030 1,323
--------
Total Telecommunications 3,009
--------
- ----------------------------------------------------------
TRAVELER ACCOMMODATION--0.4%
- ----------------------------------------------------------
MTR Gaming Group* 127,040 1,101
--------
Total Traveler accommodation 1,101
--------
- ----------------------------------------------------------
WASTE TREATMENT & DISPOSAL--0.8%
- ----------------------------------------------------------
Casella Waste Systems, Cl A* 171,929 2,135
--------
Total Waste treatment & disposal 2,135
--------
- ----------------------------------------------------------
WATER, SEWAGE & OTHER SYSTEMS--0.3%
- ----------------------------------------------------------
Artesian Resources, Cl A 28,197 712
--------
Total Water, sewage & other systems 712
--------
- ----------------------------------------------------------
TOTAL COMMON STOCK
(COST $177,519) 230,426
- ----------------------------------------------------------
- ----------------------------------------------------------
SHORT-TERM INVESTMENT HELD AS COLLATERAL
FOR LOANED SECURITIES--10.2%
- ----------------------------------------------------------
Boston Global Investment Trust--
Quality Portfolio 25,892,140 25,892
- ----------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT HELD
AS COLLATERAL FOR LOANED SECURITIES
(COST $25,892) 25,892
- ----------------------------------------------------------
56 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER MICRO CAP GROWTH FUND
Face Amount Value
(000) (000)
- -----------------------------------------------------------
REPURCHASE AGREEMENT--7.0%
- -----------------------------------------------------------
ABN-Amro (A)
1.040%, dated 09/30/03, matures
10/01/03, repurchase price
17,769,102 (collateralized by
U.S. Government obligations,
total market value $18,125,007) $17,769 $ 17,769
- -----------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $17,769) 17,769
- -----------------------------------------------------------
- -----------------------------------------------------------
TOTAL INVESTMENTS--108.0%
(COST $221,180) 274,087
- -----------------------------------------------------------
- -----------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET--(8.0)%
- -----------------------------------------------------------
Obligation to return securities lending
collateral (25,892)
Payable due to investment adviser (187)
Payable due to administrator (30)
Other assets and liabilities, net 5,862
- -----------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES, NET (20,247)
- -----------------------------------------------------------
- -----------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------
Portfolio capital of Class I Shares (unlimited
authorization -- no par value)
based on 6,134,828 outstanding shares
of beneficial interest 199,187
Accumulated net investment loss (1)
Accumulated net realized gain
on investments 1,747
Net unrealized appreciation
on investments 52,907
- -----------------------------------------------------------
TOTAL NET ASSETS--100% $253,840
- -----------------------------------------------------------
- -----------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS I SHARES $41.38
- -----------------------------------------------------------
* Non-income producing security
# Security fully or partially on loan at September 30, 2003 (see note 10 in
notes to financial statements). The total value of securities on loan at
September 30, 2003, was $24,514,123.
(A) Tri-party repurchase agreement
ADR - American depository receipt
Cl - Class
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2003 ANNUAL REPORT | 57
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER LARGE CAP VALUE FUND
September 30, 2003
Value
Shares (000)
- ----------------------------------------------------------
COMMON STOCK--98.7%
- ----------------------------------------------------------
AEROSPACE PRODUCT & PARTS
MANUFACTURING--1.1%
- ----------------------------------------------------------
Honeywell International 1,950 $ 51
--------
Total Aerospace product &
parts manufacturing 51
--------
- ----------------------------------------------------------
AGENCIES & OTHER INSURANCE
RELATED ACTIVITIES--1.0%
- ----------------------------------------------------------
AON 2,100 44
Medco Health Solutions* 102 2
--------
Total Agencies & other insurance
related activities 46
--------
- ----------------------------------------------------------
ALUMINA & ALUMINUM PRODUCTION &
PROCESSING--1.2%
- ----------------------------------------------------------
Alcan 1,500 57
--------
Total Alumina & aluminum
production & processing 57
--------
- ----------------------------------------------------------
BASIC CHEMICAL MANUFACTURING--0.5%
- ----------------------------------------------------------
E.I. du Pont de Nemours 650 26
--------
Total Basic chemical manufacturing 26
--------
- ----------------------------------------------------------
CABLE NETWORKS & PROGRAM DISTRIBUTION--0.9%
- ----------------------------------------------------------
Comcast, Cl A* 1,500 44
--------
Total Cable networks &
program distribution 44
--------
- ----------------------------------------------------------
CLOTHING STORES--3.2%
- ----------------------------------------------------------
Abercrombie & Fitch, Cl A* 4,200 116
American Eagle Outfitters* 2,600 39
--------
Total Clothing stores 155
--------
- ----------------------------------------------------------
COMMERCIAL & SERVICE INDUSTRY
MACHINERY MANUFACTURING--0.8%
- ----------------------------------------------------------
Bausch & Lomb 900 40
--------
Total Commercial & service industry
machinery manufacturing 40
--------
Value
Shares (000)
- ----------------------------------------------------------
COMMUNICATIONS EQUIPMENT
MANUFACTURING--0.8%
- ----------------------------------------------------------
Nokia ADR 2,400 $ 38
--------
Total Communications equipment
manufacturing 38
--------
- ----------------------------------------------------------
COMPUTER & PERIPHERAL EQUIPMENT
MANUFACTURING--1.8%
- ----------------------------------------------------------
Dell* 1,100 37
International Business Machines 200 18
Lexmark International* 500 31
--------
Total Computer & peripheral
equipment manufacturing 86
--------
- ----------------------------------------------------------
COMPUTER SYSTEMS DESIGN &
RELATED SERVICES--1.0%
- ----------------------------------------------------------
Sungard Data Systems* 1,900 50
--------
Total Computer systems design &
related services 50
--------
- ----------------------------------------------------------
CONVERTED PAPER PRODUCT MANUFACTURING--1.3%
- ----------------------------------------------------------
Smurfit-Stone Container* 4,075 61
--------
Total Converted paper product
manufacturing 61
--------
- ----------------------------------------------------------
COURIERS--0.9%
- ----------------------------------------------------------
United Parcel Service, Cl B 700 45
--------
Total Couriers 45
--------
- ----------------------------------------------------------
CUT & SEW APPAREL MANUFACTURING--0.4%
- ----------------------------------------------------------
Jones Apparel Group 700 21
--------
Total Cut & sew apparel manufacturing 21
--------
- ----------------------------------------------------------
DEPOSITORY CREDIT INTERMEDIATION--15.1%
- ----------------------------------------------------------
Bank of America 650 51
Bank of New York 1,450 42
Citigroup 3,700 168
Mellon Financial 3,250 98
PNC Financial Services Group 2,575 123
Roslyn Bancorp 2,400 56
Wachovia 1,850 76
Wells Fargo 2,150 111
--------
Total Depository credit intermediation 725
--------
58 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER LARGE CAP VALUE FUND
Value
Shares (000)
- ----------------------------------------------------------
ELECTRIC POWER GENERATION, TRANSMISSION &
DISTRIBUTION--2.9%
- ----------------------------------------------------------
CMS Energy 5,700 $ 42
Energy East 1,750 39
Xcel Energy 3,650 57
--------
Total Electric power generation,
transmission & distribution 138
--------
- ----------------------------------------------------------
ELECTRICAL EQUIPMENT MANUFACTURING--1.0%
- ----------------------------------------------------------
General Electric 1,600 48
--------
Total Electrical equipment manufacturing 48
--------
- ----------------------------------------------------------
ELECTRICAL GOODS WHOLESALE--0.8%
- ----------------------------------------------------------
Avnet* 2,200 36
--------
Total Electrical goods wholesale 36
--------
- ----------------------------------------------------------
ELECTRONICS & APPLIANCE STORES--1.8%
- ----------------------------------------------------------
RadioShack 3,000 85
--------
Total Electronics & appliance stores 85
--------
- ----------------------------------------------------------
FOOTWEAR MANUFACTURING--1.1%
- ----------------------------------------------------------
Reebok International 1,650 55
--------
Total Footwear manufacturing 55
--------
- ----------------------------------------------------------
FRUIT & VEGETABLE PRESERVING & SPECIALTY
FOOD MANUFACTURING--0.8%
- ----------------------------------------------------------
H.J. Heinz 1,050 36
--------
Total Fruit & vegetable preserving &
specialty food manufacturing 36
--------
- ----------------------------------------------------------
HEALTH & PERSONAL CARE STORES--2.2%
- ----------------------------------------------------------
CVS 1,700 53
Omnicare 1,450 52
--------
Total Health & personal care stores 105
--------
- ----------------------------------------------------------
HOUSEHOLD APPLIANCE MANUFACTURING--1.3%
- ----------------------------------------------------------
Maytag 2,400 60
--------
Total Household appliance manufacturing 60
--------
Value
Shares (000)
- ----------------------------------------------------------
INSURANCE CARRIERS--6.7%
- ----------------------------------------------------------
Ace 2,000 $ 66
Allstate 1,450 53
American International Group 1,075 62
Metlife 1,700 48
MGIC Investment 850 44
Prudential Financial 1,300 49
--------
Total Insurance carriers 322
--------
- ----------------------------------------------------------
LIMITED-SERVICE EATING PLACES--0.8%
- ----------------------------------------------------------
McDonald's 1,700 40
--------
Total Limited-service eating places 40
--------
- ----------------------------------------------------------
MEDICAL EQUIPMENT & SUPPLIES
MANUFACTURING--0.7%
- ----------------------------------------------------------
Baxter International 1,100 32
--------
Total Medical equipment & supplies
manufacturing 32
--------
- ----------------------------------------------------------
MOTION PICTURE & SOUND
RECORDING INDUSTRIES--1.0%
- ----------------------------------------------------------
Walt Disney 2,300 46
--------
Total Motion picture & sound
recording industries 46
--------
- ----------------------------------------------------------
MOTION PICTURE & VIDEO INDUSTRIES--1.7%
- ----------------------------------------------------------
Clear Channel Communications 2,100 81
--------
Total Motion picture & video industries 81
--------
- ----------------------------------------------------------
MOTOR VEHICLE MANUFACTURING--1.0%
- ----------------------------------------------------------
General Motors 1,150 47
--------
Total Motor vehicle manufacturing 47
--------
- ----------------------------------------------------------
NATURAL GAS DISTRIBUTION--2.6%
- ----------------------------------------------------------
KeySpan 2,200 77
Sempra Energy 1,600 47
--------
Total Natural gas distribution 124
--------
TURNER FUNDS 2003 ANNUAL REPORT | 59
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER LARGE CAP VALUE FUND
Value
Shares (000)
- ----------------------------------------------------------
NEWSPAPER/PERIODICAL/BOOK/
DATABASE PUBLISHERS--0.9%
- ----------------------------------------------------------
Knight-Ridder 650 $ 43
--------
Total Newspaper/periodical/book/
database publishers 43
--------
- ----------------------------------------------------------
NONDEPOSITORY CREDIT INTERMEDIATION--1.2%
- ----------------------------------------------------------
Providian Financial* 4,800 57
--------
Total Nondepository credit intermediation 57
--------
- ----------------------------------------------------------
OIL & GAS EXTRACTION--1.0%
- ----------------------------------------------------------
Houston Exploration* 1,400 49
--------
Total Oil & gas extraction 49
--------
- ----------------------------------------------------------
OTHER ELECTRICAL EQUIPMENT &
COMPONENT MANUFACTURING--1.0%
- ----------------------------------------------------------
Emerson Electric 900 47
--------
Total Other electrical equipment &
component manufacturing 47
--------
- ----------------------------------------------------------
OTHER FINANCIAL INVESTMENT ACTIVITIES--1.0%
- ----------------------------------------------------------
Janus Capital Group 3,400 48
--------
Total Other financial investment activities 48
--------
- ----------------------------------------------------------
OTHER INVESTMENT POOLS & FUNDS--1.1%
- ----------------------------------------------------------
FelCor Lodging Trust 4,900 51
--------
Total Other investment pools & funds 51
--------
- ----------------------------------------------------------
OTHER PERSONAL SERVICES--1.2%
- ----------------------------------------------------------
Cendant* 3,000 56
--------
Total Other personal services 56
--------
- ----------------------------------------------------------
OUTPATIENT CARE CENTERS--1.4%
- ----------------------------------------------------------
Humana* 3,650 66
--------
Total Outpatient care centers 66
--------
- ----------------------------------------------------------
PETROLEUM & COAL PRODUCTS
MANUFACTURING--6.3%
- ----------------------------------------------------------
BP ADR 2,100 89
Exxon Mobil 4,100 150
Marathon Oil 2,250 64
--------
Total Petroleum & coal products
manufacturing 303
--------
Value
Shares (000)
- ----------------------------------------------------------
PHARMACEUTICAL & MEDICINE
MANUFACTURING--3.2%
- ----------------------------------------------------------
Johnson & Johnson 1,100 $ 54
Merck 850 43
Pfizer 1,900 58
--------
Total Pharmaceutical & medicine
manufacturing 155
--------
- ----------------------------------------------------------
PULP, PAPER & PAPERBOARD MILLS--2.0%
- ----------------------------------------------------------
International Paper 1,300 51
MeadWestvaco 1,800 46
--------
Total Pulp, paper & paperboard mills 97
--------
- ----------------------------------------------------------
RAIL TRANSPORTATION--2.3%
- ----------------------------------------------------------
CSX 3,800 111
--------
Total Rail transportation 111
--------
- ----------------------------------------------------------
SECURITY & COMMODITY CONTRACTS
INTERMEDIATION & BROKERAGE--4.9%
- ----------------------------------------------------------
Goldman Sachs Group 275 23
Merrill Lynch 2,000 107
Morgan Stanley 2,100 106
--------
Total Security & commodity contracts
intermediation & brokerage 236
--------
- ----------------------------------------------------------
SEMICONDUCTOR & OTHER ELECTRONIC
COMPONENT MANUFACTURING--6.9%
- ----------------------------------------------------------
Analog Devices* 425 16
Flextronics International* 4,100 58
Micron Technology* 5,800 78
National Semiconductor* 1,750 57
Taiwan Semiconductor
Manufacturing ADR* 4,914 53
Vishay Intertechnology* 3,900 68
--------
Total Semiconductor & other electronic
component manufacturing 330
--------
- ----------------------------------------------------------
SHOE STORES--0.5%
- ----------------------------------------------------------
Foot Locker 1,500 24
--------
Total Shoe stores 24
--------
60 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER LARGE CAP VALUE FUND
Shares/Face Value
Amount (000) (000)
- ----------------------------------------------------------
SOAP, CLEANERS & TOILET PREPARATION
MANUFACTURING--2.0%
- ----------------------------------------------------------
Gillette 1,550 $ 50
Procter & Gamble 500 46
--------
Total Soap, cleaners & toilet
preparation manufacturing 96
--------
- ----------------------------------------------------------
STEEL PRODUCT MANUFACTURING FROM
PURCHASED STEEL--1.1%
- ----------------------------------------------------------
Nucor 1,200 55
--------
Total Steel product manufacturing
from purchased steel 55
--------
- ----------------------------------------------------------
TELECOMMUNICATIONS--4.3%
- ----------------------------------------------------------
AT&T 2,300 50
SBC Communications 2,800 62
Verizon Communications 2,900 94
--------
Total Telecommunications 206
--------
- ----------------------------------------------------------
TOTAL COMMON STOCK
(COST $4,666) 4,730
- ----------------------------------------------------------
- ----------------------------------------------------------
RIGHTS--0.0%
- ----------------------------------------------------------
Seagate* 425 --
- ----------------------------------------------------------
TOTAL RIGHTS
(COST $0) --
- ----------------------------------------------------------
- ----------------------------------------------------------
REPURCHASE AGREEMENT--1.9%
- ----------------------------------------------------------
Morgan Stanley (A)
0.750%, dated 09/30/03, matures
10/01/03, repurchase price
$88,921 (collateralized by
U.S. Government obligations,
total market value $90,830) $89 89
- ----------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $89) 89
- ----------------------------------------------------------
- ----------------------------------------------------------
TOTAL INVESTMENTS--100.6%
(COST $4,755) 4,819
- ----------------------------------------------------------
Value
(000)
- -----------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET--(0.6)%
- -----------------------------------------------------------
Payable due to investment adviser $ (1)
Payable due to administrator (1)
Other assets and liabilities, net (25)
- -----------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES, NET (27)
- -----------------------------------------------------------
- -----------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------
Portfolio capital of Class I Shares (unlimited
authorization -- no par value)
based on 501,229 outstanding shares
of beneficial interest 5,638
Accumulated net realized loss
on investments (910)
Net unrealized appreciation
on investments 64
- -----------------------------------------------------------
TOTAL NET ASSETS--100% $4,792
- -----------------------------------------------------------
- -----------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS I SHARES $9.56
- -----------------------------------------------------------
* Non-income producing security
(A) Tri-party repurchase agreement
ADR - American depository receipt
Cl - Class
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2003 ANNUAL REPORT | 61
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER CORE VALUE FUND
September 30, 2003
Value
Shares (000)
- ----------------------------------------------------------
COMMON STOCK--98.8%
- ----------------------------------------------------------
AGENCIES & OTHER INSURANCE
RELATED ACTIVITIES--1.1%
- ----------------------------------------------------------
Arthur J. Gallagher 17,500 $ 495
--------
Total Agencies & other insurance
related activities 495
--------
- ----------------------------------------------------------
ANIMAL SLAUGHTERING & PROCESSING--1.3%
- ----------------------------------------------------------
ConAgra Foods 28,000 595
--------
Total Animal slaughtering & processing 595
--------
- ----------------------------------------------------------
BASIC CHEMICAL MANUFACTURING--2.6%
- ----------------------------------------------------------
Akzo Nobel ADR 38,000 1,191
--------
Total Basic chemical manufacturing 1,191
--------
- ----------------------------------------------------------
CLOTHING STORES--1.1%
- ----------------------------------------------------------
American Eagle Outfitters* 34,000 505
--------
Total Clothing stores 505
--------
- ----------------------------------------------------------
COAL MINING--1.7%
- ----------------------------------------------------------
Massey Energy 59,000 785
--------
Total Coal mining 785
--------
- ----------------------------------------------------------
COMPUTER & PERIPHERAL EQUIPMENT
MANUFACTURING--1.7%
- ----------------------------------------------------------
Maxtor* 65,000 791
--------
Total Computer & peripheral
equipment manufacturing 791
--------
- ----------------------------------------------------------
COMPUTER SYSTEMS DESIGN &
RELATED SERVICES--0.9%
- ----------------------------------------------------------
BISYS Group* 31,000 408
--------
Total Computer systems design &
related services 408
--------
- ----------------------------------------------------------
CUT & SEW APPAREL MANUFACTURING--3.0%
- ----------------------------------------------------------
Jones Apparel Group 47,000 1,407
--------
Total Cut & sew apparel manufacturing 1,407
--------
- ----------------------------------------------------------
DATA PROCESSING SERVICES--2.5%
- ----------------------------------------------------------
eFunds* 96,000 1,186
--------
Total Data processing services 1,186
--------
Value
Shares (000)
- ----------------------------------------------------------
DEPARTMENT STORES--2.7%
- ----------------------------------------------------------
Federated Department Stores 30,000 $ 1,257
--------
Total Department stores 1,257
--------
- ----------------------------------------------------------
DEPOSITORY CREDIT INTERMEDIATION--8.0%
- ----------------------------------------------------------
Banknorth Group 29,000 818
Commerce Bancshares 13,781 603
Hibernia, Cl A 46,000 932
PNC Financial Services Group 10,000 476
Sovereign Bancorp 50,000 927
--------
Total Depository credit intermediation 3,756
--------
- ----------------------------------------------------------
ELECTRIC POWER GENERATION, TRANSMISSION &
DISTRIBUTION--10.1%
- ----------------------------------------------------------
CMS Energy 162,500 1,198
NiSource 25,000 499
Puget Energy 38,500 864
SCANA 33,000 1,130
Xcel Energy 65,000 1,005
--------
Total Electric power generation,
transmission & distribution 4,696
--------
- ----------------------------------------------------------
ELECTRONICS & APPLIANCE STORES--2.2%
- ----------------------------------------------------------
RadioShack 36,500 1,037
--------
Total Electronics & appliance stores 1,037
--------
- ----------------------------------------------------------
FOOTWEAR MANUFACTURING--2.1%
- ----------------------------------------------------------
Reebok International 30,000 1,003
--------
Total Footwear manufacturing 1,003
--------
- ----------------------------------------------------------
FURNITURE & HOME FURNISHING WHOLESALE--1.0%
- ----------------------------------------------------------
United Stationers* 12,500 471
--------
Total Furniture & home
furnishing wholesale 471
--------
- ----------------------------------------------------------
GENERAL FREIGHT TRUCKING--1.9%
- ----------------------------------------------------------
Yellow* 30,000 896
--------
Total General freight trucking 896
--------
- ----------------------------------------------------------
GENERAL MEDICAL & SURGICAL HOSPITALS--1.2%
- ----------------------------------------------------------
Triad Hospitals* 18,500 560
--------
Total General medical & surgical hospitals 560
--------
62 | TURNER FUNDS 2003 ANNUAL REPORT
<page>
STATEMENT OF NET ASSETS
TURNER CORE VALUE FUND
Value
Shares (000)
- ----------------------------------------------------------
GROCERY STORES--2.7%
- ----------------------------------------------------------
Kroger* 70,000 $ 1,251
--------
Total Grocery stores 1,251
--------
- ----------------------------------------------------------
HEALTH & PERSONAL CARE STORES--2.5%
- ----------------------------------------------------------
CVS 38,000 1,180
--------
Total Health & personal care stores 1,180
--------
- ----------------------------------------------------------
INFORMATION SERVICES--1.6%
- ----------------------------------------------------------
D&B* 18,000 748
--------
Total Information services 748
--------
- ----------------------------------------------------------
INSURANCE CARRIERS--13.6%
- ----------------------------------------------------------
Aflac 15,000 485
AMBAC Financial Group 12,000 768
HCC Insurance Holdings 23,000 669
Mercury General 14,000 627
Prudential Financial 34,000 1,270
Radian Group 18,500 821
Safeco 31,000 1,093
Travelers Property Casualty, Cl B 40,000 635
--------
Total Insurance carriers 6,368
--------
- ----------------------------------------------------------
MEDICAL & DIAGNOSTIC LABORATORIES--2.5%
- ----------------------------------------------------------
Quest Diagnostics* 19,000 1,152
--------
Total Medical & diagnostic laboratories 1,152
--------
- ----------------------------------------------------------
MEDICAL EQUIPMENT & SUPPLIES
MANUFACTURING--1.2%
- ----------------------------------------------------------
Baxter International 20,000 581
--------
Total Medical equipment & supplies
manufacturing 581
--------
- ----------------------------------------------------------
MOTOR VEHICLE PARTS MANUFACTURING--1.1%
- ----------------------------------------------------------
Delphi 55,000 498
--------
Total Motor vehicle parts manufacturing 498
--------
- ----------------------------------------------------------
NATURAL GAS DISTRIBUTION--2.3%
- ----------------------------------------------------------
KeySpan 30,000 1,052
--------
Total Natural gas distribution 1,052
--------
Value
Shares (000)
- ----------------------------------------------------------
NAVIGATIONAL/MEASURING/MEDICAL/
CONTROL INSTRUMENTS MANUFACTURING--1.7%
- ----------------------------------------------------------
Thermo Electron* 37,000 $ 803
--------
Total Navigational/measuring/medical/
control instruments manufacturing 803
--------
- ----------------------------------------------------------
NONDEPOSITORY CREDIT INTERMEDIATION--2.8%
- ----------------------------------------------------------
Countrywide Credit Industry 7,500 587
Freddie Mac 13,500 707
--------
Total Nondepository credit intermediation 1,294
--------
- ----------------------------------------------------------
OIL & GAS EXTRACTION--2.5%
- ----------------------------------------------------------
Pioneer Natural Resources* 46,000 1,171
--------
Total Oil & gas extraction 1,171
--------
- ----------------------------------------------------------
OTHER MISCELLANEOUS MANUFACTURING--1.1%
- ----------------------------------------------------------
Callaway Golf 35,000 499
--------
Total Other miscellaneous manufacturing 499
--------
- ----------------------------------------------------------
PESTICIDE, FERTILIZER & OTHER AGRICULTURE
CHEMICAL MANUFACTURING--1.6%
- ----------------------------------------------------------
Agrium# 61,000 766
--------
Total Pesticide, fertilizer & other
agriculture chemical manufacturing 766
--------
- ----------------------------------------------------------
PETROLEUM & COAL PRODUCTS
MANUFACTURING--2.0%
- ----------------------------------------------------------
Valero Energy 25,000 957
--------
Total Petroleum & coal products
manufacturing 957
--------
- ----------------------------------------------------------
PHARMACEUTICAL & MEDICINE
MANUFACTURING--1.3%
- ----------------------------------------------------------
SICOR* 31,000 598
--------
Total Pharmaceutical & medicine
manufacturing 598
--------
- ----------------------------------------------------------
PROFESSIONAL & COMMERCIAL EQUIPMENT &
SUPPLY WHOLESALE--1.5%
- ----------------------------------------------------------
Ingram Micro, Cl A* 54,000 705
--------
Total Professional & commercial
equipment & supply wholesale 705
--------
TURNER FUNDS 2003 ANNUAL REPORT | 63
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER CORE VALUE FUND
Value
Shares (000)
- ----------------------------------------------------------
SECURITY & COMMODITY CONTRACTS
INTERMEDIATION & BROKERAGE--2.8%
- ----------------------------------------------------------
E*Trade Group* 51,000 $ 472
Merrill Lynch 15,500 830
--------
Total Security & commodity contracts
intermediation & brokerage 1,302
--------
- ----------------------------------------------------------
SEMICONDUCTOR & OTHER ELECTRONIC
COMPONENT MANUFACTURING--2.3%
- ----------------------------------------------------------
LSI Logic* 58,100 522
Solectron* 95,000 556
--------
Total Semiconductor & other electronic
component manufacturing 1,078
--------
- ----------------------------------------------------------
SHIP & BOAT BUILDING--2.5%
- ----------------------------------------------------------
Brunswick 45,000 1,156
--------
Total Ship & boat building 1,156
--------
- ----------------------------------------------------------
SOFTWARE PUBLISHERS--1.8%
- ----------------------------------------------------------
Compuware* 159,500 855
--------
Total Software publishers 855
--------
- ----------------------------------------------------------
WASTE TREATMENT & DISPOSAL--2.3%
- ----------------------------------------------------------
Republic Services 46,500 1,053
--------
Total Waste treatment & disposal 1,053
--------
- ----------------------------------------------------------
TOTAL COMMON STOCK
(COST $39,821) 46,106
- ----------------------------------------------------------
- ----------------------------------------------------------
SHORT-TERM INVESTMENT HELD AS COLLATERAL
FOR LOANED SECURITIES--1.6%
- ----------------------------------------------------------
Boston Global Investment Trust--
Quality Portfolio 744,900 745
--------
- ----------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT HELD AS
COLLATERAL FOR LOANED SECURITIES
(COST $745) 745
- ----------------------------------------------------------
Face Amount Value
(000) (000)
- -----------------------------------------------------------
REPURCHASE AGREEMENT--1.5%
- -----------------------------------------------------------
Morgan Stanley (A)
0.750%, dated 09/30/03, matures
10/01/03, repurchase price
$690,027 (collateralized by
U.S. Government obligations,
total market value $704,838) $690 $ 690
- -----------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $690) 690
- -----------------------------------------------------------
- -----------------------------------------------------------
TOTAL INVESTMENTS--101.9%
(COST $41,256) 47,541
- -----------------------------------------------------------
- -----------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET--(1.9)%
- -----------------------------------------------------------
Obligation to return securities lending
collateral (745)
Payable due to investment adviser (30)
Payable due to administrator (6)
Other assets and liabilities, net (87)
- -----------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES, NET (868)
- -----------------------------------------------------------
- -----------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------
Portfolio capital of Class I Shares
(unlimited authorization -- no par value)
based on 3,290,627 outstanding shares
of beneficial interest 39,528
Accumulated net realized gain
on investments 860
Net unrealized appreciation
on investments 6,285
- -----------------------------------------------------------
TOTAL NET ASSETS--100% $46,673
- -----------------------------------------------------------
- -----------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS I SHARES $14.18
- -----------------------------------------------------------
* Non-income producing security
# Security fully or partially on loan at September 30, 2003 (see note 10 in
notes to financial statements). The total value of the security on loan at
September 30, 2003, was $719,688.
(A) Tri-party repurchase agreement
ADR - American depository receipt
Cl - Class
The accompanying notes are an integral part of the financial statements.
64 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER SMALL CAP VALUE FUND
September 30, 2003
Value
Shares (000)
- ----------------------------------------------------------
COMMON STOCK--97.6%
- ----------------------------------------------------------
ACCOUNTING/TAX PREPARATION/
BOOKKEEPING/PAYROLL SERVICES--0.5%
- ----------------------------------------------------------
NCO Group* 82,000 $ 1,925
--------
Total Accounting/tax preparation/
bookkeeping/payroll services 1,925
--------
- ----------------------------------------------------------
AGENCIES & OTHER INSURANCE
RELATED ACTIVITIES--1.4%
- ----------------------------------------------------------
Arthur J. Gallagher 197,000 5,571
--------
Total Agencies & other insurance
related activities 5,571
--------
- ----------------------------------------------------------
AGRICULTURE, CONSTRUCTION & MINING
MACHINERY MANUFACTURING--0.7%
- ----------------------------------------------------------
AGCO* 171,175 2,934
--------
Total Agriculture, construction &
mining machinery manufacturing 2,934
--------
- ----------------------------------------------------------
APPAREL, PIECE GOODS & NOTIONS WHOLESALE--1.2%
- ----------------------------------------------------------
Men's Wearhouse* 184,150 4,723
--------
Total Apparel, piece goods &
notions wholesale 4,723
--------
- ----------------------------------------------------------
ARCHITECTURAL, ENGINEERING &
RELATED SERVICES--0.4%
- ----------------------------------------------------------
Washington Group International* 63,000 1,698
--------
Total Architectural, engineering &
related services 1,698
--------
- ----------------------------------------------------------
AUTOMOBILE DEALERS--0.5%
- ----------------------------------------------------------
United Auto Group* 83,000 1,909
--------
Total Automobile dealers 1,909
--------
- ----------------------------------------------------------
AUTOMOTIVE EQUIPMENT RENTAL & LEASING--0.5%
- ----------------------------------------------------------
Ryder System 64,750 1,898
--------
Total Automotive equipment
rental & leasing 1,898
--------
- ----------------------------------------------------------
BASIC CHEMICAL MANUFACTURING--0.4%
- ----------------------------------------------------------
Arch Chemicals 74,600 1,552
--------
Total Basic chemical manufacturing 1,552
--------
Value
Shares (000)
- ----------------------------------------------------------
BOOK, PERIODICAL & MUSIC STORES--1.5%
- ----------------------------------------------------------
Barnes & Noble* 227,200 $ 5,773
--------
Total Book, periodical & music stores 5,773
--------
- ----------------------------------------------------------
CHEMICAL MANUFACTURING--0.3%
- ----------------------------------------------------------
Georgia Gulf 43,925 1,026
--------
Total Chemical manufacturing 1,026
--------
- ----------------------------------------------------------
CLOTHING STORES--2.4%
- ----------------------------------------------------------
American Eagle Outfitters* 211,000 3,136
Burlington Coat
Factory Warehouse 47,625 891
Charlotte Russe Holding* 148,000 1,523
Charming Shoppes* 295,000 1,684
Wet Seal, Cl A* 235,350 2,365
--------
Total Clothing stores 9,599
--------
- ----------------------------------------------------------
COAL MINING--0.5%
- ----------------------------------------------------------
Massey Energy 155,000 2,061
--------
Total Coal mining 2,061
--------
- ----------------------------------------------------------
COMMERCIAL/INDUSTRIAL EQUIPMENT
RENTAL & LEASING--1.0%
- ----------------------------------------------------------
United Rentals* 248,100 3,992
--------
Total Commercial/industrial equipment
rental & leasing 3,992
--------
- ----------------------------------------------------------
COMMUNICATIONS EQUIPMENT
MANUFACTURING--1.8%
- ----------------------------------------------------------
Anadigics*# 246,550 1,171
Checkpoint Systems* 119,600 1,890
Nice Systems ADR* 217,400 4,130
--------
Total Communications equipment
manufacturing 7,191
--------
- ----------------------------------------------------------
COMMUNITY CARE FACILITIES FOR
THE ELDERLY--0.9%
- ----------------------------------------------------------
Genesis Health Ventures* 150,000 3,637
--------
Total Community care facilities
for the elderly 3,637
--------
TURNER FUNDS 2003 ANNUAL REPORT | 65
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER SMALL CAP VALUE FUND
Value
Shares (000)
- ----------------------------------------------------------
COMPUTER & PERIPHERAL EQUIPMENT
MANUFACTURING--2.7%
- ----------------------------------------------------------
Iomega* 165,000 $ 1,838
Maxtor*# 507,686 6,178
Western Digital* 203,700 2,626
--------
Total Computer & peripheral
equipment manufacturing 10,642
--------
- ----------------------------------------------------------
COMPUTER SYSTEMS DESIGN &
RELATED SERVICES--1.9%
- ----------------------------------------------------------
Carreker* 320,000 2,576
Ciber* 304,800 2,316
Computer Horizons* 279,700 1,035
Eclipsys* 90,000 1,439
--------
Total Computer systems design &
related services 7,366
--------
- ----------------------------------------------------------
CONVERTED PAPER PRODUCT MANUFACTURING--1.3%
- ----------------------------------------------------------
Playtex Products* 540,900 3,224
Smurfit-Stone Container* 130,000 1,947
--------
Total Converted paper product
manufacturing 5,171
--------
- ----------------------------------------------------------
CUT & SEW APPAREL MANUFACTURING--1.9%
- ----------------------------------------------------------
Ashworth* 579,100 4,013
Tommy Hilfiger* 291,600 3,473
--------
Total Cut & sew apparel manufacturing 7,486
--------
- ----------------------------------------------------------
DATA PROCESSING SERVICES--1.4%
- ----------------------------------------------------------
Acxiom* 237,900 3,749
eFunds* 136,400 1,685
--------
Total Data processing services 5,434
--------
- ----------------------------------------------------------
DEATH CARE SERVICES--1.8%
- ----------------------------------------------------------
Service International* 1,537,600 7,027
--------
Total Death care services 7,027
--------
- ----------------------------------------------------------
DEEP SEA, COASTAL & GREAT LAKES
WATER TRANSPORTATION--0.5%
- ----------------------------------------------------------
Overseas Shipholding Group# 70,000 1,809
--------
Total Deep sea, coastal & great lakes
water transportation 1,809
--------
Value
Shares (000)
- ----------------------------------------------------------
DEPARTMENT STORES--0.4%
- ----------------------------------------------------------
ShopKo Stores* 112,100 $ 1,681
--------
Total Department stores 1,681
--------
- ----------------------------------------------------------
DEPOSITORY CREDIT INTERMEDIATION--9.2%
- ----------------------------------------------------------
Bancorpsouth 90,150 1,974
Bay View Capital* 797,750 4,842
Colonial BancGroup 208,800 3,015
Community First Bankshares 81,850 2,163
FirstMerit 150,700 3,728
Hibernia, Cl A 95,050 1,926
Hudson United Bancorp 48,000 1,688
New York Community Bancorp 132,200 4,166
Roslyn Bancorp# 71,000 1,667
Sterling Bancshares 216,300 2,581
Sterling Financial* 76,246 2,146
Trustmark 95,500 2,591
Webster Financial 93,000 3,709
--------
Total Depository credit intermediation 36,196
--------
- ----------------------------------------------------------
ELECTRIC POWER GENERATION,
TRANSMISSION & DISTRIBUTION--5.6%
- ----------------------------------------------------------
Alliant Energy 77,000 1,694
Avista 211,000 3,288
Calpine*# 744,400 3,640
CMS Energy 896,500 6,607
Northeast Utilities 141,400 2,534
Reliant Resources* 686,000 3,512
Sierra Pacific Resources*# 216,550 1,050
--------
Total Electric power generation,
transmission & distribution 22,325
--------
- ----------------------------------------------------------
EMPLOYMENT SERVICES--0.5%
- ----------------------------------------------------------
Heidrick & Struggles International* 110,300 1,867
--------
Total Employment services 1,867
--------
- ----------------------------------------------------------
ENGINE, TURBINE & POWER TRANSMISSION
EQUIPMENT MANUFACTURING--0.6%
- ----------------------------------------------------------
Briggs & Stratton 38,675 2,273
--------
Total Engine, turbine & power
transmission equipment
manufacturing 2,273
--------
66 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER SMALL CAP VALUE FUND
Value
Shares (000)
- ----------------------------------------------------------
FOOTWEAR MANUFACTURING--0.9%
- ----------------------------------------------------------
Vans* 326,200 $ 3,556
--------
Total Footwear manufacturing 3,556
--------
- ----------------------------------------------------------
FOUNDRIES--0.7%
- ----------------------------------------------------------
Intermet 671,800 2,889
--------
Total Foundries 2,889
--------
- ----------------------------------------------------------
FRUIT & TREE NUT FARMING--0.6%
- ----------------------------------------------------------
Chiquita Brands International* 144,600 2,559
--------
Total Fruit & tree nut farming 2,559
--------
- ----------------------------------------------------------
FRUIT & VEGETABLE PRESERVING & SPECIALTY
FOOD MANUFACTURING--1.5%
- ----------------------------------------------------------
Smithfield Foods* 307,000 5,894
--------
Total Fruit & vegetable preserving &
specialty food manufacturing 5,894
--------
- ----------------------------------------------------------
GENERAL FREIGHT TRUCKING--1.5%
- ----------------------------------------------------------
Celadon Group* 186,625 2,398
USF 113,550 3,574
--------
Total General freight trucking 5,972
--------
- ----------------------------------------------------------
GENERAL MEDICAL & SURGICAL HOSPITALS--0.9%
- ----------------------------------------------------------
Province Healthcare* 271,000 3,509
--------
Total General medical &
surgical hospitals 3,509
--------
- ----------------------------------------------------------
HEALTH & PERSONAL CARE STORES--0.7%
- ----------------------------------------------------------
NBTY* 117,000 2,732
--------
Total Health & personal care stores 2,732
--------
- ----------------------------------------------------------
HOUSEHOLD APPLIANCE MANUFACTURING--1.2%
- ----------------------------------------------------------
Helen of Troy* 191,150 4,630
--------
Total Household appliance manufacturing 4,630
--------
- ----------------------------------------------------------
HVAC & COMMERCIAL REFRIGERATION
EQUIPMENT MANUFACTURING--0.4%
- ----------------------------------------------------------
Lennox International 111,000 1,622
--------
Total Hvac & commercial refrigeration
equipment manufacturing 1,622
--------
Value
Shares (000)
- ----------------------------------------------------------
INFORMATION SERVICES--1.3%
- ----------------------------------------------------------
Earthlink* 245,200 $ 2,018
Hooper Holmes 220,000 1,463
S1* 308,700 1,559
--------
Total Information services 5,040
--------
- ----------------------------------------------------------
INSURANCE CARRIERS--7.1%
- ----------------------------------------------------------
American Financial Group 241,800 5,259
American Physicians Capital* 85,100 2,364
Delphi Financial Group, Cl A 55,000 2,559
FPIC Insurance Group*# 207,700 3,130
HCC Insurance Holdings 121,650 3,538
Ohio Casualty*# 174,000 2,523
Phoenix 394,700 4,559
Scottish Re Group 71,400 1,724
Triad Guaranty* 52,000 2,552
--------
Total Insurance carriers 28,208
--------
- ----------------------------------------------------------
MEDICAL EQUIPMENT & SUPPLIES
MANUFACTURING--2.1%
- ----------------------------------------------------------
Conmed* 78,000 1,610
Oakley*# 455,000 4,550
Vital Signs 70,000 2,051
--------
Total Medical equipment &
supplies manufacturing 8,211
--------
- ----------------------------------------------------------
MINING SUPPORT ACTIVITIES--1.9%
- ----------------------------------------------------------
Hanover Compressor* 204,700 2,027
Key Energy Services* 561,400 5,417
--------
Total Mining support activities 7,444
--------
- ----------------------------------------------------------
NATURAL GAS DISTRIBUTION--0.3%
- ----------------------------------------------------------
SEMCO Energy 225,650 1,038
--------
Total Natural gas distribution 1,038
--------
- ----------------------------------------------------------
NAVIGATIONAL/MEASURING/MEDICAL/
CONTROL INSTRUMENTS MANUFACTURING--1.1%
- ----------------------------------------------------------
FEI* 138,500 3,233
Molecular Devices* 56,850 990
--------
Total Navigational/measuring/medical/
control instruments manufacturing 4,223
--------
TURNER FUNDS 2003 ANNUAL REPORT | 67
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER SMALL CAP VALUE FUND
Value
Shares (000)
- ----------------------------------------------------------
NONDEPOSITORY CREDIT INTERMEDIATION--1.5%
- ----------------------------------------------------------
Advanta, Cl B 217,000 $ 2,335
Providian Financial* 310,000 3,655
--------
Total Nondepository credit intermediation 5,990
--------
- ----------------------------------------------------------
NONFERROUS PRODUCTION & PROCESSING--0.2%
- ----------------------------------------------------------
Wolverine Tube* 208,850 883
--------
Total Nonferrous production & processing 883
--------
- ----------------------------------------------------------
NONSCHEDULED AIR TRANSPORTATION--0.8%
- ----------------------------------------------------------
CNF 103,300 3,311
--------
Total Nonscheduled air transportation 3,311
--------
- ----------------------------------------------------------
OFFICE FURNITURE (INCLUDING FIXTURES)
MANUFACTURING--0.5%
- ----------------------------------------------------------
Furniture Brands International* 79,000 1,904
--------
Total Office furniture (including fixtures)
manufacturing 1,904
--------
- ----------------------------------------------------------
OFFICE SUPPLIES, STATIONERY & GIFT STORES--0.4%
- ----------------------------------------------------------
School Specialty*# 60,000 1,693
--------
Total Office supplies, stationery &
gift stores 1,693
--------
- ----------------------------------------------------------
OFFICES OF DENTISTS--0.4%
- ----------------------------------------------------------
Orthodontic Centers
of America*# 200,000 1,576
--------
Total Offices of dentists 1,576
--------
- ----------------------------------------------------------
OIL & GAS EXTRACTION--1.6%
- ----------------------------------------------------------
Cabot Oil & Gas 189,050 4,915
Magnum Hunter Resources* 202,000 1,614
--------
Total Oil & gas extraction 6,529
--------
- ----------------------------------------------------------
OTHER ELECTRICAL EQUIPMENT &
COMPONENT MANUFACTURING--1.2%
- ----------------------------------------------------------
GrafTech International* 357,550 2,861
Rayovac* 144,000 2,102
--------
Total Other electrical equipment &
component manufacturing 4,963
--------
Value
Shares (000)
- ----------------------------------------------------------
OTHER FABRICATED METAL PRODUCT
MANUFACTURING--0.4%
- ----------------------------------------------------------
Timken 100,000 $ 1,524
--------
Total Other fabricated metal product
manufacturing 1,524
--------
- ----------------------------------------------------------
OTHER FINANCIAL INVESTMENT ACTIVITIES--1.2%
- ----------------------------------------------------------
BKF Capital Group* 51,900 1,253
Westwood Holdings Group 87,050 1,478
WP Stewart 92,800 1,940
--------
Total Other financial investment activities 4,671
--------
- ----------------------------------------------------------
OTHER GENERAL PURPOSE MACHINERY
MANUFACTURING--1.7%
- ----------------------------------------------------------
Flowserve* 99,000 2,010
Stewart & Stevenson Services 319,100 4,793
--------
Total Other general purpose
machinery manufacturing 6,803
--------
- ----------------------------------------------------------
OTHER INVESTMENT POOLS & FUNDS--4.0%
- ----------------------------------------------------------
FelCor Lodging Trust 534,000 5,532
HRPT Properties Trust 422,850 3,865
LTC Properties 229,050 2,652
US Restaurant Properties 227,550 3,698
--------
Total Other investment pools & funds 15,747
--------
- ----------------------------------------------------------
OTHER MISCELLANEOUS MANUFACTURING--0.5%
- ----------------------------------------------------------
Callaway Golf 130,050 1,856
--------
Total Other miscellaneous manufacturing 1,856
--------
- ----------------------------------------------------------
OTHER PROFESSIONAL/SCIENTIFIC/
TECHNICAL SERVICE--2.6%
- ----------------------------------------------------------
Dendrite International*# 280,500 4,261
IDX Systems* 111,450 2,577
VCA Antech*# 151,000 3,556
--------
Total Other professional/scientific/
technical service 10,394
--------
- ----------------------------------------------------------
OUTPATIENT CARE CENTERS--0.4%
- ----------------------------------------------------------
Curative Health Services* 93,000 1,662
--------
Total Outpatient care centers 1,662
--------
68 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER SMALL CAP VALUE FUND
Value
Shares (000)
- ----------------------------------------------------------
PHARMACEUTICAL & MEDICINE
MANUFACTURING--0.3%
- ----------------------------------------------------------
Alpharma, Cl A 70,000 $ 1,302
--------
Total Pharmaceutical & medicine
manufacturing 1,302
--------
- ----------------------------------------------------------
PRINTING & RELATED SUPPORT ACTIVITIES--0.3%
- ----------------------------------------------------------
Cadmus Communications 115,850 1,306
--------
Total Printing & related support activities 1,306
--------
- ----------------------------------------------------------
PROFESSIONAL & COMMERCIAL EQUIPMENT &
SUPPLY WHOLESALE--0.6%
- ----------------------------------------------------------
Stamps.com* 397,500 2,313
--------
Total Professional & commercial
equipment & supply wholesale 2,313
--------
- ----------------------------------------------------------
PULP, PAPER & PAPERBOARD MILLS--3.0%
- ----------------------------------------------------------
Buckeye Technologies* 319,650 2,906
Caraustar Industries* 300,750 2,625
Chesapeake 110,200 2,484
Wausau-Mosinee Paper 331,650 4,049
--------
Total Pulp, paper & paperboard mills 12,064
--------
- ----------------------------------------------------------
RADIO & TELEVISION BROADCASTING--1.2%
- ----------------------------------------------------------
Cumulus Media, Cl A* 157,000 2,677
Hearst-Argyle Television* 78,500 1,900
--------
Total Radio & television broadcasting 4,577
--------
- ----------------------------------------------------------
RUBBER PRODUCT MANUFACTURING--0.8%
- ----------------------------------------------------------
Cooper Tire & Rubber 194,750 3,091
--------
Total Rubber product manufacturing 3,091
--------
- ----------------------------------------------------------
SCHEDULED AIR TRANSPORTATION--0.5%
- ----------------------------------------------------------
Alaska Air Group* 68,175 1,897
--------
Total Scheduled air transportation 1,897
--------
- ----------------------------------------------------------
SCIENTIFIC R&D SERVICES--0.4%
- ----------------------------------------------------------
Discovery Partners International* 248,650 1,472
--------
Total Scientific r&d services 1,472
--------
Value
Shares (000)
- ----------------------------------------------------------
SECURITY & COMMODITY CONTRACTS
INTERMEDIATION & brokerage--2.1%
- ----------------------------------------------------------
Raymond James Financial 73,050 $ 2,655
SoundView Technology Group* 303,880 2,990
SWS Group 129,000 2,543
--------
Total Security & commodity contracts
intermediation & brokerage 8,188
--------
- ----------------------------------------------------------
SEMICONDUCTOR & OTHER ELECTRONIC
COMPONENT MANUFACTURING--4.0%
- ----------------------------------------------------------
Arrow Electronics* 162,000 2,979
ATI Technologies*# 278,000 4,128
Fairchild Semiconductor
International* 150,000 2,487
Integrated Silicon Solutions* 330,000 3,284
Marvell Technology Group* 38,700 1,461
Methode Electronics, Cl A 130,500 1,541
--------
Total Semiconductor & other
electronic component
manufacturing 15,880
--------
- ----------------------------------------------------------
SHOE STORES--0.5%
- ----------------------------------------------------------
Foot Locker 122,000 1,976
--------
Total Shoe stores 1,976
--------
- ----------------------------------------------------------
SOFTWARE PUBLISHERS--1.0%
- ----------------------------------------------------------
THQ* 248,000 4,072
--------
Total Software publishers 4,072
--------
- ----------------------------------------------------------
STEEL PRODUCT MANUFACTURING FROM
PURCHASED STEEL--0.5%
- ----------------------------------------------------------
AK Steel Holding* 928,400 1,857
--------
Total Steel product manufacturing
from purchased steel 1,857
--------
- ----------------------------------------------------------
TELECOMMUNICATIONS--1.0%
- ----------------------------------------------------------
PTEK Holdings* 466,350 3,801
--------
Total Telecommunications 3,801
--------
- ----------------------------------------------------------
TOTAL COMMON STOCK
(COST $361,430) 385,595
- ----------------------------------------------------------
TURNER FUNDS 2003 ANNUAL REPORT | 69
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER SMALL CAP VALUE FUND
Shares/Face Value
Amount (000) (000)
- -----------------------------------------------------------
SHORT-TERM INVESTMENT HELD AS COLLATERAL
FOR LOANED SECURITIES--4.2%
- -----------------------------------------------------------
Boston Global Investment Trust--
Quality Portfolio 16,512,900 $ 16,513
---------
- -----------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT HELD AS
COLLATERAL FOR LOANED SECURITIES
(COST $16,513) 16,513
- -----------------------------------------------------------
- -----------------------------------------------------------
REPURCHASE AGREEMENT--3.5%
- -----------------------------------------------------------
ABN-Amro (A)
1.040%, dated 09/30/03, matures
10/01/03, repurchase price
$13,839,072 (collateralized by
U.S. Government obligations,
total market value $14,115,623) $13,839 13,839
- -----------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $13,839) 13,839
- -----------------------------------------------------------
- -----------------------------------------------------------
TOTAL INVESTMENTS--105.3%
(COST $391,782) 415,947
- -----------------------------------------------------------
- -----------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET--(5.3)%
- -----------------------------------------------------------
Obligation to return securities lending
collateral (16,513)
Payable due to investment adviser (287)
Payable due to administrator (48)
Other assets and liabilities, net (4,153)
- -----------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES, NET (21,001)
- -----------------------------------------------------------
Value
(000)
- -----------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------
Portfolio capital of Class I Shares (unlimited
authorization -- no par value)
based on 20,536,587 outstanding shares
of beneficial interest $437,140
Accumulated net realized loss
on investments (66,359)
Net unrealized appreciation
on investments 24,165
- -----------------------------------------------------------
TOTAL NET ASSETS--100% $394,946
- -----------------------------------------------------------
- -----------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS I SHARES $19.23
- -----------------------------------------------------------
* Non-income producing security
# Security fully or partially on loan at September 30, 2003 (see note 10 in
notes to financial statements). The total value of securities on loan at
September 30, 2003, was $14,824,406.
(A) Tri-party repurchase agreement
ADR - American depository receipt
Cl - Class
The accompanying notes are an integral part of the financial statements.
70 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER SMALL CAP VALUE OPPORTUNITIES FUND
September 30, 2003
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--92.0%
- --------------------------------------------------------------------------------
ARCHITECTURAL & STRUCTURAL METALS
MANUFACTURING--2.4%
- --------------------------------------------------------------------------------
Griffon* 7,790 $ 140
------
Total Architectural & structural
metals manufacturing 140
------
- --------------------------------------------------------------------------------
AUTOMOTIVE PARTS, ACCESSORIES &
TIRE STORES--1.0%
- --------------------------------------------------------------------------------
CSK Auto* 3,900 60
------
Total Automotive parts, accessories &
tire stores 60
------
- --------------------------------------------------------------------------------
BAKERIES & TORTILLA MANUFACTURING--2.6%
- --------------------------------------------------------------------------------
Interstate Bakeries 9,860 148
------
Total Bakeries & tortilla manufacturing 148
------
- --------------------------------------------------------------------------------
CHEMICAL MANUFACTURING--1.1%
- --------------------------------------------------------------------------------
Solutia 15,550 62
------
Total Chemical manufacturing 62
------
- --------------------------------------------------------------------------------
COMPUTER SYSTEMS DESIGN &
RELATED SERVICES--2.8%
- --------------------------------------------------------------------------------
Intergraph* 6,905 161
------
Total Computer systems design &
related services 161
------
- --------------------------------------------------------------------------------
DEEP SEA, COASTAL & GREAT LAKES
WATER TRANSPORTATION--1.2%
- --------------------------------------------------------------------------------
Alexander & Baldwin 2,560 72
------
Total Deep sea, coastal & great lakes
water transportation 72
------
- --------------------------------------------------------------------------------
DEPOSITORY CREDIT INTERMEDIATION--9.8%
- --------------------------------------------------------------------------------
BankAtlantic Bancorp, Cl A 5,670 81
BSB Bancorp 4,200 116
First Niagara Financial Group 7,060 107
FNB 3,340 115
People's Bank 1,940 58
Sterling Financial* 2,980 84
------
Total Depository credit intermediation 561
------
Value
Shares (000)
- --------------------------------------------------------------------------------
ELECTRICAL CONTRACTORS--0.5%
- --------------------------------------------------------------------------------
EMCOR Group* 630 $ 27
------
Total Electrical contractors 27
------
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT MANUFACTURING--1.0%
- --------------------------------------------------------------------------------
C&D Technologies 2,900 55
------
Total Electrical equipment manufacturing 55
------
- --------------------------------------------------------------------------------
ELECTRONIC SHOPPING & MAIL-ORDER HOUSES--1.9%
- --------------------------------------------------------------------------------
FTD, Cl A* 4,810 108
------
Total Electronic shopping &
mail-order houses 108
------
- --------------------------------------------------------------------------------
ENGINE, TURBINE & POWER TRANSMISSION
EQUIPMENT MANUFACTURING--1.7%
- --------------------------------------------------------------------------------
China Yuchai International 5,610 99
------
Total Engine, turbine & power transmission
equipment manufacturing 99
------
- --------------------------------------------------------------------------------
FABRIC MILLS--1.7%
- --------------------------------------------------------------------------------
Albany International, Cl A 3,110 96
------
Total Fabric mills 96
------
- --------------------------------------------------------------------------------
FOOTWEAR MANUFACTURING--1.3%
- --------------------------------------------------------------------------------
Wolverine World Wide 3,910 76
------
Total Footwear manufacturing 76
------
- --------------------------------------------------------------------------------
FULL-SERVICE RESTAURANTS--0.7%
- --------------------------------------------------------------------------------
Red Robin Gourmet Burgers* 1,560 40
------
Total Full-service restaurants 40
------
- --------------------------------------------------------------------------------
GAMBLING INDUSTRIES--1.0%
- --------------------------------------------------------------------------------
Isle of Capri Casinos* 2,890 57
------
Total Gambling industries 57
------
- --------------------------------------------------------------------------------
HOME FURNISHINGS STORES--1.1%
- --------------------------------------------------------------------------------
Linens 'N Things* 2,620 62
------
Total Home furnishings stores 62
------
TURNER FUNDS 2003 ANNUAL REPORT | 71
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER SMALL CAP VALUE OPPORTUNITIES FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
INFORMATION SERVICES--1.8%
- --------------------------------------------------------------------------------
eSpeed, Cl A* 1,440 $ 33
Interactive Data* 4,560 72
------
Total Information services 105
------
- --------------------------------------------------------------------------------
INSURANCE CARRIERS--8.9%
- --------------------------------------------------------------------------------
Allmerica Financial* 3,350 80
American Financial Group 3,960 86
Ceres Group* 22,670 91
IPC Holdings 1,660 58
PMA Capital, Cl A 7,380 92
Scottish Re Group 4,250 103
------
Total Insurance carriers 510
------
- --------------------------------------------------------------------------------
INVESTIGATION & SECURITY SERVICES--2.6%
- --------------------------------------------------------------------------------
Brink's 8,535 148
------
Total Investigation & security services 148
------
- --------------------------------------------------------------------------------
METAL ORE MINING--1.0%
- --------------------------------------------------------------------------------
Golden Star Resources*# 13,190 55
------
Total Metal ore mining 55
------
- --------------------------------------------------------------------------------
MINING SUPPORT ACTIVITIES--1.0%
- --------------------------------------------------------------------------------
Pride International* 3,350 57
------
Total Mining support activities 57
------
- --------------------------------------------------------------------------------
MISCELLANEOUS NONDURABLE
GOODS WHOLESALE--1.0%
- --------------------------------------------------------------------------------
Source Interlink* 6,060 57
------
Total Miscellaneous nondurable
goods wholesale 57
------
- --------------------------------------------------------------------------------
MOTOR VEHICLE BODY & TRAILER
MANUFACTURING--1.3%
- --------------------------------------------------------------------------------
Wabash National* 4,730 75
------
Total Motor vehicle body &
trailer manufacturing 75
------
- --------------------------------------------------------------------------------
MOTOR VEHICLE PARTS MANUFACTURING--0.6%
- --------------------------------------------------------------------------------
IMPCO Technologies* 5,250 38
------
Total Motor vehicle parts manufacturing 38
------
Value
Shares (000)
- --------------------------------------------------------------------------------
NATURAL GAS DISTRIBUTION--0.9%
- --------------------------------------------------------------------------------
AGL Resources 1,860 $ 52
------
Total Natural gas distribution 52
------
- --------------------------------------------------------------------------------
NAVIGATIONAL/MEASURING/MEDICAL/
CONTROL INSTRUMENTS MANUFACTURING--5.6%
- --------------------------------------------------------------------------------
Analogic 1,710 82
DaVita* 1,100 35
Image Sensing Systems* 2,050 15
Measurement Specialties* 6,770 91
United Industrial 6,210 99
------
Total Navigational/measuring/medical/
control instruments manufacturing 322
------
- --------------------------------------------------------------------------------
NEWSPAPER/PERIODICAL/BOOK/
DATABASE PUBLISHERS--1.5%
- --------------------------------------------------------------------------------
R.H. Donnelley* 2,135 86
------
Total Newspaper/periodical/book/
database publishers 86
------
- --------------------------------------------------------------------------------
NONDEPOSITORY CREDIT INTERMEDIATION--1.0%
- --------------------------------------------------------------------------------
United PanAm Financial* 3,190 56
------
Total Nondepository credit intermediation 56
------
- --------------------------------------------------------------------------------
NURSING CARE FACILITIES--2.4%
- --------------------------------------------------------------------------------
Kindred Healthcare* 3,630 136
------
Total Nursing care facilities 136
------
- --------------------------------------------------------------------------------
OIL & GAS EXTRACTION--1.3%
- --------------------------------------------------------------------------------
Chesapeake Energy 7,120 77
------
Total Oil & gas extraction 77
------
- --------------------------------------------------------------------------------
OTHER ELECTRICAL EQUIPMENT &
COMPONENT MANUFACTURING--2.5%
- --------------------------------------------------------------------------------
GrafTech International* 10,660 85
Rayovac* 3,840 56
------
Total Other electrical equipment &
component manufacturing 141
------
- --------------------------------------------------------------------------------
OTHER FABRICATED METAL PRODUCT
MANUFACTURING--0.9%
- --------------------------------------------------------------------------------
Watts Industries, Cl A 2,980 52
------
Total Other fabricated metal
product manufacturing 52
------
72 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER SMALL CAP VALUE OPPORTUNITIES FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
OTHER INVESTMENT POOLS & FUNDS--4.7%
- --------------------------------------------------------------------------------
Alexandria Real Estate Equities 1,580 $ 76
Capital Automotive REIT 1,920 58
Pan Pacific Retail Properties 1,350 58
Regency Centers 2,030 75
------
Total Other investment pools & funds 267
------
- --------------------------------------------------------------------------------
OTHER WOOD PRODUCT MANUFACTURING--2.2%
- --------------------------------------------------------------------------------
Louisiana-Pacific* 9,240 127
------
Total Other wood product manufacturing 127
------
- --------------------------------------------------------------------------------
OUTPATIENT CARE CENTERS--1.3%
- --------------------------------------------------------------------------------
Sierra Health Services* 3,660 75
------
Total Outpatient care centers 75
------
- --------------------------------------------------------------------------------
PHARMACEUTICAL & MEDICINE
MANUFACTURING--2.8%
- --------------------------------------------------------------------------------
Caraco Pharm Labs* 5,170 50
Dade Behring Holdings* 1,950 55
Immucor* 2,180 59
------
Total Pharmaceutical & medicine
manufacturing 164
------
- --------------------------------------------------------------------------------
PIPELINE TRANSPORTATION OF NATURAL GAS--0.8%
- --------------------------------------------------------------------------------
Western Gas Resources 1,220 46
------
Total Pipeline transportation of natural gas 46
------
- --------------------------------------------------------------------------------
PLASTICS PRODUCT MANUFACTURING--2.2%
- --------------------------------------------------------------------------------
Applied Films* 1,760 52
Jarden* 1,930 73
------
Total Plastics product manufacturing 125
------
- --------------------------------------------------------------------------------
PROFESSIONAL, SCIENTIFIC &
TECHNICAL SERVICES--0.8%
- --------------------------------------------------------------------------------
Alliance Data Systems* 1,800 48
------
Total Professional, scientific &
technical services 48
------
- --------------------------------------------------------------------------------
PULP, PAPER & PAPERBOARD MILLS--1.1%
- --------------------------------------------------------------------------------
Temple-Inland 1,270 62
------
Total Pulp, paper & paperboard mills 62
------
Value
Shares (000)
- --------------------------------------------------------------------------------
SEMICONDUCTOR & OTHER ELECTRONIC
COMPONENT MANUFACTURING--2.1%
- --------------------------------------------------------------------------------
Amphenol, Cl A* 1,720 $ 89
Semtech* 1,840 34
------
Total Semiconductor & other electronic
component manufacturing 123
------
- --------------------------------------------------------------------------------
SOFTWARE PUBLISHERS--1.1%
- --------------------------------------------------------------------------------
MSC.Software* 8,710 63
------
Total Software publishers 63
------
- --------------------------------------------------------------------------------
SUGAR & CONFECTIONERY PRODUCT
MANUFACTURING--0.9%
- --------------------------------------------------------------------------------
Imperial Sugar* 5,060 51
------
Total Sugar & confectionery
product manufacturing 51
------
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS--3.3%
- --------------------------------------------------------------------------------
Alamosa Holdings* 26,980 101
NII Holdings, Cl B* 1,460 87
------
Total Telecommunications 188
------
- --------------------------------------------------------------------------------
TRAVELER ACCOMMODATION--1.0%
- --------------------------------------------------------------------------------
Kerzner International* 1,620 58
------
Total Traveler accommodation 58
------
- --------------------------------------------------------------------------------
TRUCK TRANSPORTATION--1.6%
- --------------------------------------------------------------------------------
Laidlaw International* 9,120 90
------
Total Truck transportation 90
------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $4,924) 5,278
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENT HELD AS COLLATERAL
FOR LOANED SECURITIES--1.1%
- --------------------------------------------------------------------------------
Boston Global Investment Trust--
Quality Portfolio 65,000 65
------
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT HELD AS
COLLATERAL FOR LOANED SECURITIES
(COST $65) 65
- --------------------------------------------------------------------------------
TURNER FUNDS 2003 ANNUAL REPORT | 73
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER SMALL CAP VALUE OPPORTUNITIES FUND
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT--8.8%
- --------------------------------------------------------------------------------
Morgan Stanley (A)
0.750%, dated 09/30/03, matures
10/01/03, repurchase price
$507,139 (collateralized by
U.S. Government obligations,
total market value $518,025) $ 507 $ 507
- --------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $507) 507
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--101.9%
(COST $5,496) 5,850
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET--(1.9)%
- --------------------------------------------------------------------------------
Obligation to return securities lending
collateral (65)
Payable due to investment adviser (1)
Payable due to administrator (1)
Payable to distributor (1)
Other assets and liabilities, net (42)
- --------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES, NET (110)
- --------------------------------------------------------------------------------
Value
(000)
- --------------------------------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------------------------------
Portfolio capital of Class II Shares
(unlimited authorization -- no par value)
based on 451,144 outstanding shares
of beneficial interest $ 5,332
Accumulated net realized gain
on investments 54
Net unrealized appreciation
on investments 354
- --------------------------------------------------------------------------------
TOTAL NET ASSETS--100% $ 5,740
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS II SHARES $ 12.72
- --------------------------------------------------------------------------------
* Non-income producing security
# Security fully or partially on loan at September 30, 2003 (see note 10 in
notes to financial statements). The total value of the security on loan at
September 30, 2003, was $54,210.
(A) Tri-party repurchase agreement
Cl - Class
REIT - Real Estate Investment Trust
The accompanying notes are an integral part of the financial statements.
74 | TURNER FUNDS 2003 ANNUAL REPORT
SCHEDULE OF INVESTMENTS
TURNER SMALL CAP EQUITY FUND
September 30, 2003
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--86.5%
- --------------------------------------------------------------------------------
ARCHITECTURAL & STRUCTURAL METALS
MANUFACTURING--1.9%
- --------------------------------------------------------------------------------
Griffon* 13,570 $ 244
------
Total Architectural & structural
metals manufacturing 244
------
- --------------------------------------------------------------------------------
AUTOMOTIVE PARTS, ACCESSORIES & TIRE STORES--0.9%
- --------------------------------------------------------------------------------
CSK Auto* 7,610 117
------
Total Automotive parts, accessories &
tire stores 117
------
- --------------------------------------------------------------------------------
BAKERIES & TORTILLA MANUFACTURING--2.3%
- --------------------------------------------------------------------------------
Interstate Bakeries 19,070 286
------
Total Bakeries & tortilla manufacturing 286
------
- --------------------------------------------------------------------------------
BASIC CHEMICAL MANUFACTURING--1.6%
- --------------------------------------------------------------------------------
Aceto 4,000 56
Church & Dwight 4,170 146
------
Total Basic chemical manufacturing 202
------
- --------------------------------------------------------------------------------
CHILD DAY CARE SERVICES--0.6%
- --------------------------------------------------------------------------------
Bright Horizons Family Solutions* 2,000 80
------
Total Child day care services 80
------
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT
MANUFACTURING--0.9%
- --------------------------------------------------------------------------------
Viasat* 6,430 115
------
Total Communications equipment
manufacturing 115
------
- --------------------------------------------------------------------------------
COMPUTER SYSTEMS DESIGN &
RELATED SERVICES--4.4%
- --------------------------------------------------------------------------------
Intergraph* 14,305 333
JDA Software Group* 6,880 102
Seachange International* 9,150 115
------
Total Computer systems design &
related services 550
------
Value
Shares (000)
- --------------------------------------------------------------------------------
DEEP SEA, COASTAL & GREAT LAKES WATER
TRANSPORTATION--1.1%
- --------------------------------------------------------------------------------
Alexander & Baldwin 5,060 $ 142
------
Total Deep sea, coastal & great lakes
water transportation 142
------
- --------------------------------------------------------------------------------
DEPOSITORY CREDIT INTERMEDIATION--5.3%
- --------------------------------------------------------------------------------
BankAtlantic Bancorp, Cl A 9,765 139
First Niagara Financial Group 12,310 186
FNB 6,970 241
People's Bank 3,440 103
------
Total Depository credit intermediation 669
------
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT MANUFACTURING--0.9%
- --------------------------------------------------------------------------------
C&D Technologies 5,870 111
------
Total Electrical equipment manufacturing 111
------
- --------------------------------------------------------------------------------
ENGINE, TURBINE & POWER TRANSMISSION
EQUIPMENT MANUFACTURING--1.6%
- --------------------------------------------------------------------------------
China Yuchai International 11,520 204
------
Total Engine, turbine & power
transmission equipment
manufacturing 204
------
- --------------------------------------------------------------------------------
FABRIC MILLS--1.2%
- --------------------------------------------------------------------------------
Albany International, Cl A 4,930 152
------
Total Fabric mills 152
------
- --------------------------------------------------------------------------------
FOOTWEAR MANUFACTURING--1.9%
- --------------------------------------------------------------------------------
K-Swiss, Cl A 2,790 100
Wolverine World Wide 6,930 135
------
Total Footwear manufacturing 235
------
- --------------------------------------------------------------------------------
FULL-SERVICE RESTAURANTS--0.7%
- --------------------------------------------------------------------------------
Red Robin Gourmet Burgers* 3,230 82
------
Total Full-service restaurants 82
------
- --------------------------------------------------------------------------------
GAMBLING INDUSTRIES--0.9%
- --------------------------------------------------------------------------------
Isle of Capri Casinos* 5,980 118
------
Total Gambling industries 118
------
TURNER FUNDS 2003 ANNUAL REPORT | 75
FINANCIAL STATEMENTS
SCHEDULE OF INVESTMENTS
TURNER SMALL CAP EQUITY FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
HEALTH & PERSONAL CARE STORES--1.7%
- --------------------------------------------------------------------------------
Accredo Health* 5,470 $ 153
NBTY* 2,690 63
------
Total Health & personal care stores 216
------
- --------------------------------------------------------------------------------
HOME FURNISHINGS STORES--1.0%
- --------------------------------------------------------------------------------
Linens 'N Things* 5,180 123
------
Total Home furnishings stores 123
------
- --------------------------------------------------------------------------------
INFORMATION SERVICES--2.7%
- --------------------------------------------------------------------------------
eSpeed, Cl A* 8,330 188
Interactive Data* 9,220 146
------
Total Information services 334
------
- --------------------------------------------------------------------------------
INSURANCE CARRIERS--4.8%
- --------------------------------------------------------------------------------
IPC Holdings 3,580 125
PMA Capital, Cl A 11,920 150
Scottish Re Group 8,810 213
Selective Insurance Group 4,010 119
------
Total Insurance carriers 607
------
- --------------------------------------------------------------------------------
INVESTIGATION & SECURITY SERVICES--2.5%
- --------------------------------------------------------------------------------
Brink's 18,005 313
------
Total Investigation & security services 313
------
- --------------------------------------------------------------------------------
MANAGEMENT, SCIENTIFIC & TECHNICAL
CONSULTING SERVICES--0.7%
- --------------------------------------------------------------------------------
Corporate Executive Board* 1,840 86
------
Total Management, scientific &
technical consulting services 86
------
- --------------------------------------------------------------------------------
METAL ORE MINING--1.7%
- --------------------------------------------------------------------------------
Golden Star Resources*# 50,590 211
------
Total Metal ore mining 211
------
- --------------------------------------------------------------------------------
MINING SUPPORT ACTIVITIES--1.1%
- --------------------------------------------------------------------------------
Rowan* 5,390 132
------
Total Mining support activities 132
------
Value
Shares (000)
- --------------------------------------------------------------------------------
MISCELLANEOUS NONDURABLE GOODS
WHOLESALE--0.9%
- --------------------------------------------------------------------------------
Source Interlink* 12,570 $ 118
------
Total Miscellaneous nondurable
goods wholesale 118
------
- --------------------------------------------------------------------------------
MOTOR VEHICLE BODY & TRAILER
MANUFACTURING--1.3%
- --------------------------------------------------------------------------------
Wabash National* 10,200 163
------
Total Motor vehicle body &
trailer manufacturing 163
------
- --------------------------------------------------------------------------------
NATURAL GAS DISTRIBUTION--1.3%
- --------------------------------------------------------------------------------
AGL Resources 5,880 166
------
Total Natural gas distribution 166
------
- --------------------------------------------------------------------------------
NAVIGATIONAL/MEASURING/MEDICAL/
CONTROL INSTRUMENTS MANUFACTURING--3.8%
- --------------------------------------------------------------------------------
Analogic 4,520 217
Igen International* 2,550 147
United Industrial 6,980 111
------
Total Navigational/measuring/medical/
control instruments manufacturing 475
------
- --------------------------------------------------------------------------------
NEWSPAPER/PERIODICAL/BOOK/
DATABASE PUBLISHERS--1.4%
- --------------------------------------------------------------------------------
R.H. Donnelley* 4,275 173
------
Total Newspaper/periodical/book/
database publishers 173
------
- --------------------------------------------------------------------------------
NONDEPOSITORY CREDIT INTERMEDIATION--0.9%
- --------------------------------------------------------------------------------
Cash America International 7,160 117
------
Total Nondepository credit intermediation 117
------
- --------------------------------------------------------------------------------
NURSING CARE FACILITIES--1.4%
- --------------------------------------------------------------------------------
Kindred Healthcare* 4,810 180
------
Total Nursing care facilities 180
------
- --------------------------------------------------------------------------------
OIL & GAS EXTRACTION--2.3%
- --------------------------------------------------------------------------------
Chesapeake Energy 14,840 160
Range Resources* 19,090 131
------
Total Oil & gas extraction 291
------
76 | TURNER FUNDS 2003 ANNUAL REPORT
SCHEDULE OF INVESTMENTS
TURNER SMALL CAP EQUITY FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
OTHER ELECTRICAL EQUIPMENT &
COMPONENT MANUFACTURING--3.1%
- --------------------------------------------------------------------------------
GrafTech International* 21,580 $ 173
Rayovac* 8,080 118
Wilson Greatbatch Technologies* 2,680 96
------
Total Other electrical equipment &
component manufacturing 387
------
- --------------------------------------------------------------------------------
OTHER INVESTMENT POOLS & FUNDS--3.2%
- --------------------------------------------------------------------------------
Alexandria Real Estate Equities 2,590 125
Capital Automotive REIT 3,880 118
Regency Centers 4,150 153
------
Total Other investment pools & funds 396
------
- --------------------------------------------------------------------------------
OTHER MISCELLANEOUS MANUFACTURING--1.1%
- --------------------------------------------------------------------------------
WMS Industries* 6,050 137
------
Total Other miscellaneous manufacturing 137
------
- --------------------------------------------------------------------------------
OTHER WOOD PRODUCT MANUFACTURING--2.9%
- --------------------------------------------------------------------------------
Louisiana-Pacific* 26,290 362
------
Total Other wood product manufacturing 362
------
- --------------------------------------------------------------------------------
OUTPATIENT CARE CENTERS--1.2%
- --------------------------------------------------------------------------------
Sierra Health Services* 7,190 148
------
Total Outpatient care centers 148
------
- --------------------------------------------------------------------------------
PHARMACEUTICAL & MEDICINE
MANUFACTURING--3.9%
- --------------------------------------------------------------------------------
Bradley Pharmaceuticals* 2,370 65
Dade Behring Holdings* 4,240 120
Discovery Laboratories*# 8,370 60
ICN Pharmaceuticals 5,170 89
Immucor* 5,760 155
------
Total Pharmaceutical & medicine
manufacturing 489
------
- --------------------------------------------------------------------------------
PLASTICS PRODUCT MANUFACTURING--2.1%
- --------------------------------------------------------------------------------
Applied Films* 3,720 110
Jarden* 3,990 151
------
Total Plastics product manufacturing 261
------
- --------------------------------------------------------------------------------
Value
Shares (000)
- --------------------------------------------------------------------------------
PROFESSIONAL, SCIENTIFIC &
TECHNICAL SERVICES--0.9%
- --------------------------------------------------------------------------------
Alliance Data Systems* 4,430 $ 117
------
Total Professional, scientific &
technical services 117
------
- --------------------------------------------------------------------------------
RADIO & TELEVISION BROADCASTING--0.9%
- --------------------------------------------------------------------------------
Emmis Communications, Cl A* 5,710 115
------
Total Radio & television broadcasting 115
------
- --------------------------------------------------------------------------------
REMEDIATION & OTHER WASTE
MANAGEMENT SERVICES--0.7%
- --------------------------------------------------------------------------------
Stake Technology* 9,480 88
------
Total Remediation & other waste
management services 88
------
- --------------------------------------------------------------------------------
SCHEDULED AIR TRANSPORTATION--0.8%
- --------------------------------------------------------------------------------
Frontier Airlines* 6,330 104
------
Total Scheduled air transportation 104
------
- --------------------------------------------------------------------------------
SCIENTIFIC R&D SERVICES--1.1%
- --------------------------------------------------------------------------------
Genencor International* 4,670 73
Human Genome Sciences* 4,270 59
------
Total Scientific r&d services 132
------
- --------------------------------------------------------------------------------
SEMICONDUCTOR & OTHER ELECTRONIC
COMPONENT MANUFACTURING--1.9%
- --------------------------------------------------------------------------------
Amphenol, Cl A* 3,190 166
Semtech* 3,730 69
------
Total Semiconductor & other electronic
component manufacturing 235
------
- --------------------------------------------------------------------------------
SOFTWARE PUBLISHERS--2.3%
- --------------------------------------------------------------------------------
Informatica* 20,440 152
MSC.Software* 18,410 133
------
Total Software publishers 285
------
- --------------------------------------------------------------------------------
SUGAR & CONFECTIONERY PRODUCT
MANUFACTURING--0.9%
- --------------------------------------------------------------------------------
Imperial Sugar* 10,930 109
------
Total Sugar & confectionery
product manufacturing 109
------
TURNER FUNDS 2003 ANNUAL REPORT | 77
FINANCIAL STATEMENTS
SCHEDULE OF INVESTMENTS
TURNER SMALL CAP EQUITY FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS--2.9%
- --------------------------------------------------------------------------------
Alamosa Holdings* 49,470 $ 185
NII Holdings, Cl B* 3,030 181
------
Total Telecommunications 366
------
- --------------------------------------------------------------------------------
TRUCK TRANSPORTATION--0.9%
- --------------------------------------------------------------------------------
Laidlaw International* 11,720 115
------
Total Truck transportation 115
------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $9,455) 10,858
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENT HELD AS COLLATERAL
FOR LOANED SECURITIES--2.5%
- --------------------------------------------------------------------------------
Boston Global Investment Trust--
Quality Portfolio 320,100 320
------
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT HELD AS
COLLATERAL FOR LOANED SECURITIES
(COST $320) 320
- --------------------------------------------------------------------------------
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT--7.3%
- --------------------------------------------------------------------------------
Morgan Stanley (A)
0.750%, dated 09/30/03, matures
10/01/03, repurchase price
$912,054 (collateralized by
U.S. Government obligations,
total market value $931,630) $912 $ 912
- --------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $912) 912
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--96.3%
(COST $10,687) $12,090
- --------------------------------------------------------------------------------
* Non-income producing security
# Security fully or partially on loan at September 30, 2003 (see note 10 in
notes to financial statements). The total value of securities on loan at
September 30, 2003, was $271,293.
(A) Tri-party repurchase agreement
Cl - Class
REIT - Real Estate Investment Trust
Percentages are based on net assets of $12,557,222.
The accompanying notes are an integral part of the financial statements.
78 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER TECHNOLOGY FUND
September 30, 2003
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--101.6%
- --------------------------------------------------------------------------------
ADVERTISING & RELATED SERVICES--1.9%
- --------------------------------------------------------------------------------
AOL Time Warner* 24,580 $ 371
------
Total Advertising & related services 371
------
- --------------------------------------------------------------------------------
ARCHITECTURAL, ENGINEERING &
RELATED SERVICES--1.9%
- --------------------------------------------------------------------------------
Plexus* 24,620 383
------
Total Architectural, engineering &
related services 383
------
- --------------------------------------------------------------------------------
CABLE NETWORKS & PROGRAM DISTRIBUTION--2.5%
- --------------------------------------------------------------------------------
InterActive* 14,750 487
------
Total Cable networks &
program distribution 487
------
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT
MANUFACTURING--6.8%
- --------------------------------------------------------------------------------
Cisco Systems* 30,580 598
Nokia ADR 47,440 740
------
Total Communications equipment
manufacturing 1,338
------
- --------------------------------------------------------------------------------
COMPUTER & PERIPHERAL EQUIPMENT
MANUFACTURING--3.9%
- --------------------------------------------------------------------------------
EMC* 27,780 351
Integrated Device Technology* 34,130 424
------
Total Computer & peripheral
equipment manufacturing 775
------
- --------------------------------------------------------------------------------
COMPUTER SYSTEMS DESIGN &
RELATED SERVICES--1.5%
- --------------------------------------------------------------------------------
Enterasys Networks* 75,220 301
------
Total Computer systems design &
related services 301
------
- --------------------------------------------------------------------------------
DATA PROCESSING SERVICES--3.6%
- --------------------------------------------------------------------------------
Affiliated Computer Services, Cl A* 6,970 339
Fiserv* 10,210 370
------
Total Data processing services 709
------
Value
Shares (000)
- --------------------------------------------------------------------------------
ELECTRONIC SHOPPING & MAIL-ORDER HOUSES--3.0%
- --------------------------------------------------------------------------------
eBay* 11,010 $ 589
------
Total Electronic shopping &
mail-order houses 589
------
- --------------------------------------------------------------------------------
ELECTRONICS & APPLIANCE STORES--2.9%
- --------------------------------------------------------------------------------
CDW 9,810 566
------
Total Electronics & appliance stores 566
------
- --------------------------------------------------------------------------------
INDUSTRIAL MACHINERY MANUFACTURING--3.5%
- --------------------------------------------------------------------------------
Kla-Tencor* 5,300 272
Lam Research* 18,640 413
------
Total Industrial machinery manufacturing 685
------
- --------------------------------------------------------------------------------
INFORMATION SERVICES--4.0%
- --------------------------------------------------------------------------------
CNET Networks* 47,630 337
Yahoo!* 12,660 448
------
Total Information services 785
------
- --------------------------------------------------------------------------------
MANAGEMENT, SCIENTIFIC & TECHNICAL
CONSULTING SERVICES--1.1%
- --------------------------------------------------------------------------------
Monster Worldwide* 8,880 224
------
Total Management, scientific &
technical consulting services 224
------
- --------------------------------------------------------------------------------
OTHER ELECTRICAL EQUIPMENT &
COMPONENT MANUFACTURING--5.5%
- --------------------------------------------------------------------------------
Ciena* 70,390 416
Corning* 69,920 659
------
Total Other electrical equipment &
component manufacturing 1,075
------
- --------------------------------------------------------------------------------
OTHER FINANCIAL INVESTMENT ACTIVITIES--2.4%
- --------------------------------------------------------------------------------
SEI Investments 14,300 465
------
Total Other financial investment activities 465
------
- --------------------------------------------------------------------------------
SECURITY & COMMODITY CONTRACTS
INTERMEDIATION & BROKERAGE--2.3%
- --------------------------------------------------------------------------------
Charles Schwab 37,680 449
------
Total Security & commodity contracts
intermediation & brokerage 449
------
TURNER FUNDS 2003 ANNUAL REPORT | 79
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER TECHNOLOGY FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
SEMICONDUCTOR & OTHER ELECTRONIC
COMPONENT MANUFACTURING--40.2%
- --------------------------------------------------------------------------------
Agere Systems, Cl A*# 115,510 $ 355
AMIS Holdings* 25,000 462
Applied Materials* 28,650 520
Celestica* 26,920 427
Fairchild Semiconductor
International* 24,440 405
Intel 21,050 579
Micron Technology* 48,010 644
O2Micro International* 22,450 324
Omnivision Technologies* 7,800 329
PMC - Sierra* 32,220 425
RF Micro Devices*# 36,370 338
Sanmina-SCI* 46,090 447
Sigmatel*# 20,000 412
Skyworks Solutions* 44,510 405
STMicroelectronics, NY Shares 16,240 391
Taiwan Semiconductor
Manufacturing ADR* 26,150 283
Texas Instruments 32,580 743
Vitesse Semiconductor* 68,300 437
------
Total Semiconductor & other
electronic component
manufacturing 7,926
------
- --------------------------------------------------------------------------------
SOFTWARE PUBLISHERS--10.4%
- --------------------------------------------------------------------------------
Akamai Technologies*# 62,850 270
BEA Systems* 34,280 413
Microsoft 33,570 933
Siebel Systems* 45,170 439
------
Total Software publishers 2,055
------
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS--4.2%
- --------------------------------------------------------------------------------
Nortel Networks 106,120 435
Sonus Networks* 58,000 402
------
Total Telecommunications 837
------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $18,385) 20,020
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WARRANTS--0.0%
- --------------------------------------------------------------------------------
MicroStrategy, Expires 06/24/07* 3,426 1
- --------------------------------------------------------------------------------
TOTAL WARRANTS
(COST $0) 1
- --------------------------------------------------------------------------------
Value
Shares (000)
- --------------------------------------------------------------------------------
Short-term investment held as collateral
for loaned securities--5.4%
- --------------------------------------------------------------------------------
Boston Global Investment Trust--
Quality Portfolio 1,054,300 $ 1,054
-------
- --------------------------------------------------------------------------------
Total Short-term investment held as
collateral for loaned securities
(Cost $1,054) 1,054
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Investments--107.0%
(Cost $19,439) 21,075
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Other assets and liabilities, net--(7.0)%
- --------------------------------------------------------------------------------
Obligation to return securities lending
collateral (1,054)
Payable due to investment adviser (15)
Payable due to administrator (2)
Other assets and liabilities, net (308)
- --------------------------------------------------------------------------------
Total Other assets and liabilities, net (1,379)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net assets:
- --------------------------------------------------------------------------------
Portfolio capital of Class I Shares
(unlimited authorization -- no par value)
based on 3,706,565 outstanding shares
of beneficial interest 151,112
Accumulated net realized loss
on investments (133,052)
Net unrealized appreciation
on investments 1,636
- --------------------------------------------------------------------------------
Total net assets--100% $19,696
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net asset value, offering and redemption
price per share--Class I Shares $5.31
- --------------------------------------------------------------------------------
* Non-income producing security
# Security fully or partially on loan at September 30, 2003 (see note 10 in
notes to financial statements). The total value of securities on loan at
September 30, 2003, was $967,603.
ADR - American depository receipt
Cl - Class
The accompanying notes are an integral part of the financial statements.
80 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER CONCENTRATED GROWTH FUND
September 30, 2003
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--99.0%
- --------------------------------------------------------------------------------
ADVERTISING & RELATED SERVICES--4.0%
- --------------------------------------------------------------------------------
AOL Time Warner* 125,660 $ 1,899
------
Total Advertising & related services 1,899
------
- --------------------------------------------------------------------------------
CABLE NETWORKS & PROGRAM DISTRIBUTION--4.3%
- --------------------------------------------------------------------------------
InterActive* 61,500 2,033
------
Total Cable networks & program
distribution 2,033
------
- --------------------------------------------------------------------------------
COMMERCIAL/INDUSTRIAL EQUIPMENT
RENTAL & LEASING--3.8%
- --------------------------------------------------------------------------------
Comverse Technology* 120,960 1,809
------
Total Commercial/industrial equipment
rental & leasing 1,809
------
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT
MANUFACTURING--5.8%
- --------------------------------------------------------------------------------
Nokia ADR 175,380 2,736
------
Total Communications equipment
manufacturing 2,736
------
- --------------------------------------------------------------------------------
COMPUTER & PERIPHERAL EQUIPMENT
MANUFACTURING--3.6%
- --------------------------------------------------------------------------------
EMC* 136,010 1,718
------
Total Computer & peripheral
equipment manufacturing 1,718
------
- --------------------------------------------------------------------------------
ELECTRONIC SHOPPING & MAIL-ORDER HOUSES--4.9%
- --------------------------------------------------------------------------------
eBay* 43,000 2,301
------
Total Electronic shopping &
mail-order houses 2,301
------
- --------------------------------------------------------------------------------
INFORMATION SERVICES--4.2%
- --------------------------------------------------------------------------------
Yahoo!* 55,690 1,970
------
Total Information services 1,970
------
- --------------------------------------------------------------------------------
OTHER ELECTRICAL EQUIPMENT &
COMPONENT MANUFACTURING--4.3%
- --------------------------------------------------------------------------------
Ciena* 181,830 1,075
Corning* 102,370 964
------
Total Other electrical equipment &
component manufacturing 2,039
------
Value
Shares (000)
- --------------------------------------------------------------------------------
PHARMACEUTICAL & MEDICINE
MANUFACTURING--4.3%
- --------------------------------------------------------------------------------
Amgen* 30,990 $ 2,001
------
Total Pharmaceutical & medicine
manufacturing 2,001
------
- --------------------------------------------------------------------------------
PIPELINE TRANSPORTATION OF NATURAL GAS--3.9%
- --------------------------------------------------------------------------------
El Paso 250,540 1,829
------
Total Pipeline transportation
of natural gas 1,829
------
- --------------------------------------------------------------------------------
SECURITY & COMMODITY CONTRACTS
INTERMEDIATION & BROKERAGE--9.9%
- --------------------------------------------------------------------------------
Charles Schwab 173,050 2,061
Goldman Sachs Group 6,500 545
Morgan Stanley 40,140 2,026
------
Total Security & commodity contracts
intermediation & brokerage 4,632
------
- --------------------------------------------------------------------------------
SEMICONDUCTOR & OTHER ELECTRONIC COMPONENT MANUFACTURING--28.4%
- --------------------------------------------------------------------------------
Advanced Micro Devices* 100,240 1,114
Applied Materials* 127,620 2,315
LSI Logic* 102,040 917
Micron Technology* 163,740 2,197
STMicroelectronics, NY Shares 93,840 2,257
Taiwan Semiconductor
Manufacturing ADR* 212,490 2,301
Texas Instruments 98,980 2,257
------
Total Semiconductor & other
electronic component
manufacturing 13,358
------
- --------------------------------------------------------------------------------
SOFTWARE PUBLISHERS--9.6%
- --------------------------------------------------------------------------------
BEA Systems* 97,350 1,173
Microsoft 59,850 1,663
Siebel Systems* 170,350 1,656
------
Total Software publishers 4,492
------
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS--2.4%
- --------------------------------------------------------------------------------
Sonus Networks* 160,190 1,110
------
Total Telecommunications 1,110
------
TURNER FUNDS 2003 ANNUAL REPORT | 81
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER CONCENTRATED GROWTH FUND
Shares/Face Value
Amount (000) (000)
- --------------------------------------------------------------------------------
TRAVELER ACCOMMODATION--3.1%
- --------------------------------------------------------------------------------
MGM Mirage* 39,890 $ 1,458
------
Total Traveler accommodation 1,458
------
- --------------------------------------------------------------------------------
WASTE TREATMENT & DISPOSAL--2.5%
- --------------------------------------------------------------------------------
Allied Waste Industries* 106,910 1,155
------
Total Waste treatment & disposal 1,155
------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $45,526) 46,540
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WARRANTS--0.0%
- --------------------------------------------------------------------------------
MicroStrategy, Expires 06/24/07* 166 --
- --------------------------------------------------------------------------------
TOTAL WARRANTS
(COST $0) --
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT--8.0%
- --------------------------------------------------------------------------------
ABN-Amro (A)
1.040%, dated 09/30/03, matures
10/01/03, repurchase price
$3,736,540 (collateralized by
U.S. Government obligations,
total market value $3,811,220) $3,736 3,736
- --------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $3,736) 3,736
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--107.0%
(COST $49,262) 50,276
- --------------------------------------------------------------------------------
Value
(000)
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET--(7.0)%
- --------------------------------------------------------------------------------
Payable for investment securities purchased $ (4,969)
Payable due to investment adviser (52)
Payable due to administrator (6)
Other assets and liabilities, net 1,755
- --------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES, NET (3,272)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------------------------------
Portfolio capital of Class I Shares
(unlimited authorization -- no par value)
based on 7,772,518 outstanding shares
of beneficial interest 206,549
Accumulated net realized loss
on investments (160,559)
Net unrealized appreciation
on investments 1,014
- --------------------------------------------------------------------------------
TOTAL NET ASSETS--100% $47,004
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION $6.05
PRICE PER SHARE--CLASS I SHARES
- --------------------------------------------------------------------------------
* Non-income producing security
(A) Tri-party repurchase agreement
ADR - American depository receipt
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
82 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER NEW ENTERPRISE FUND
September 30, 2003
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--97.0%
- --------------------------------------------------------------------------------
COMMERCIAL/INDUSTRIAL EQUIPMENT
RENTAL & LEASING--2.2%
- --------------------------------------------------------------------------------
Comverse Technology* 20,200 $ 302
------
Total Commercial/industrial equipment
rental & leasing 302
------
- --------------------------------------------------------------------------------
COMPUTER & PERIPHERAL EQUIPMENT
MANUFACTURING--4.6%
- --------------------------------------------------------------------------------
Integrated Device Technology* 27,830 345
Maxtor* 22,900 279
------
Total Computer & peripheral
equipment manufacturing 624
------
- --------------------------------------------------------------------------------
COMPUTER SYSTEMS DESIGN &
RELATED SERVICES--3.0%
- --------------------------------------------------------------------------------
Enterasys Networks* 101,090 404
------
Total Computer systems design &
related services 404
------
- --------------------------------------------------------------------------------
DATA PROCESSING SERVICES--2.6%
- --------------------------------------------------------------------------------
Fiserv* 9,580 347
------
Total Data processing services 347
------
- --------------------------------------------------------------------------------
ELECTRONIC SHOPPING & MAIL-ORDER HOUSES--3.4%
- --------------------------------------------------------------------------------
eBay* 8,500 455
------
Total Electronic shopping &
mail-order houses 455
------
- --------------------------------------------------------------------------------
ENGINE, TURBINE & POWER TRANSMISSION
EQUIPMENT MANUFACTURING--4.1%
- --------------------------------------------------------------------------------
China Yuchai International 31,480 558
------
Total Engine, turbine & power
transmission equipment
manufacturing 558
------
- --------------------------------------------------------------------------------
HEALTH & PERSONAL CARE STORES--1.8%
- --------------------------------------------------------------------------------
NBTY* 10,220 239
------
Total Health & personal care stores 239
------
Value
Shares (000)
- --------------------------------------------------------------------------------
INDUSTRIAL MACHINERY MANUFACTURING--2.7%
- --------------------------------------------------------------------------------
Lam Research* 16,160 $ 358
------
Total Industrial machinery manufacturing 358
------
- --------------------------------------------------------------------------------
INFORMATION SERVICES--10.7%
- --------------------------------------------------------------------------------
Autobytel* 36,220 345
CNET Networks* 48,410 343
Juniper Networks* 11,040 165
Mindspeed Technologies* 31,190 168
Sina* 6,210 222
Yahoo!* 5,580 197
------
Total Information services 1,440
------
- --------------------------------------------------------------------------------
MANAGEMENT, SCIENTIFIC & TECHNICAL
CONSULTING SERVICES--0.8%
- --------------------------------------------------------------------------------
Genio Group* 18,000 101
------
Total Management, scientific & technical
consulting services 101
------
- --------------------------------------------------------------------------------
NAVIGATIONAL/MEASURING/MEDICAL/CONTROL INSTRUMENTS MANUFACTURING--3.0%
- --------------------------------------------------------------------------------
Visx* 21,290 406
------
Total Navigational/measuring/medical/
control instruments manufacturing 406
------
- --------------------------------------------------------------------------------
NONDEPOSITORY CREDIT INTERMEDIATION--4.2%
- --------------------------------------------------------------------------------
American Express 7,890 355
Providian Financial* 17,270 204
------
Total Nondepository credit intermediation 559
------
- --------------------------------------------------------------------------------
OTHER ELECTRICAL EQUIPMENT &
COMPONENT MANUFACTURING--4.9%
- --------------------------------------------------------------------------------
Ciena* 59,050 349
Corning* 33,580 316
------
Total Other electrical equipment &
component manufacturing 665
------
- --------------------------------------------------------------------------------
OTHER FINANCIAL INVESTMENT ACTIVITIES--3.3%
- --------------------------------------------------------------------------------
SEI Investments 13,580 441
------
Total Other financial investment activities 441
------
TURNER FUNDS 2003 ANNUAL REPORT | 83
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER NEW ENTERPRISE FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
OTHER MISCELLANEOUS MANUFACTURING--2.0%
- --------------------------------------------------------------------------------
Marvel Enterprises* 12,390 $ 276
------
Total Other miscellaneous manufacturing 276
------
- --------------------------------------------------------------------------------
PHARMACEUTICAL & MEDICINE
MANUFACTURING--4.3%
- --------------------------------------------------------------------------------
Amgen* 5,170 334
Teva Pharmaceutical Industries ADR 4,310 246
------
Total Pharmaceutical & medicine
manufacturing 580
------
- --------------------------------------------------------------------------------
SECURITY & COMMODITY CONTRACTS
INTERMEDIATION & BROKERAGE--2.1%
- --------------------------------------------------------------------------------
Ameritrade Holding* 25,200 283
------
Total Security & commodity contracts
intermediation & brokerage 283
------
- --------------------------------------------------------------------------------
SEMICONDUCTOR & OTHER ELECTRONIC
COMPONENT MANUFACTURING--22.3%
- --------------------------------------------------------------------------------
Applied Materials* 15,130 275
ASML Holding, NY Shares* 17,930 235
Integrated Circuit Systems* 8,360 251
LSI Logic* 26,450 238
Micron Technology* 16,470 221
Omnivision Technologies* 9,620 406
PMC - Sierra* 19,005 251
RF Micro Devices* 33,010 307
Sigmatel* 14,270 294
TTM Technologies* 36,860 526
------
Total Semiconductor & other electronic
component manufacturing 3,004
------
- --------------------------------------------------------------------------------
SOFTWARE PUBLISHERS--10.3%
- --------------------------------------------------------------------------------
Citrix Systems* 15,610 345
F5 Networks* 18,830 362
Micromuse* 45,200 370
VeriSign* 22,950 309
------
Total Software publishers 1,386
------
Shares/Face Value
Amount (000) (000)
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS--4.7%
- --------------------------------------------------------------------------------
Sonus Networks* 53,260 $ 369
Tekelec* 16,770 262
------
Total Telecommunications 631
------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $12,345) 13,059
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT--5.8%
- --------------------------------------------------------------------------------
Morgan Stanley (A)
0.750%, dated 09/30/03, matures
10/01/03, repurchase price
$787,910 (collateralized by
U.S. Government obligations,
total market value $804,822) $788 788
- --------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $788) 788
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--102.8%
(COST $13,133) 13,847
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET--(2.8)%
- --------------------------------------------------------------------------------
Payable due to investment adviser (10)
Payable due to administrator (2)
Other assets and liabilities, net (367)
- --------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES, NET (379)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------------------------------
Portfolio capital of Class I Shares
(unlimited authorization -- no par value)
based on 3,101,018 outstanding shares
of beneficial interest 21,973
Accumulated net realized loss
on investments (9,219)
Net unrealized appreciation
on investments 714
- --------------------------------------------------------------------------------
TOTAL NET ASSETS--100% $13,468
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS I SHARES $4.34
- --------------------------------------------------------------------------------
* Non-income producing security
(A) Tri-party repurchase agreement
ADR - American depository receipt
The accompanying notes are an integral part of the financial statements.
84 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER FINANCIAL SERVICES FUND
September 30, 2003
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--98.9%
- --------------------------------------------------------------------------------
ACCOUNTING/TAX PREPARATION/
BOOKKEEPING/PAYROLL SERVICES--2.8%
- --------------------------------------------------------------------------------
Paychex 14,480 $ 491
---------
Total Accounting/tax preparation/
bookkeeping/payroll services 491
---------
- --------------------------------------------------------------------------------
DATA PROCESSING SERVICES--4.3%
- --------------------------------------------------------------------------------
Affiliated Computer Services, Cl A* 5,050 246
First Data 12,430 497
---------
Total Data processing services 743
---------
- --------------------------------------------------------------------------------
DEPOSITORY CREDIT INTERMEDIATION--33.7%
- --------------------------------------------------------------------------------
BankAtlantic Bancorp, Cl A 22,470 320
Citigroup 17,940 816
Citizens South Banking 30,480 451
First Tennessee National 8,720 370
Golden West Financial 8,000 716
Northern Trust 9,720 413
Silicon Valley Bancshares* 12,850 355
Southwest Bancorp of Texas 14,480 529
Sovereign Bancorp 29,410 546
Wells Fargo 15,775 812
Zions Bancorporation 9,020 504
---------
Total Depository credit intermediation 5,832
---------
- --------------------------------------------------------------------------------
INSURANCE CARRIERS--11.0%
- --------------------------------------------------------------------------------
American International Group 12,614 728
Axis Capital Holdings* 13,200 329
Principal Financial Group 8,470 262
Radian Group 13,260 589
---------
Total Insurance carriers 1,908
---------
- --------------------------------------------------------------------------------
NONDEPOSITORY CREDIT INTERMEDIATION--12.5%
- --------------------------------------------------------------------------------
American Express 15,810 712
Capital One Financial 7,150 408
CapitalSource* 31,010 543
MBNA 21,710 495
---------
Total Nondepository credit intermediation 2,158
---------
Shares/Face Value
Amount (000) (000)
- --------------------------------------------------------------------------------
OTHER FINANCIAL INVESTMENT ACTIVITIES--12.1%
- --------------------------------------------------------------------------------
Affiliated Managers Group* 5,580 $ 351
Investors Financial Services 21,100 663
National Financial Partners* 15,310 413
SEI Investments 20,440 664
---------
Total Other financial investment activities 2,091
---------
- --------------------------------------------------------------------------------
PROFESSIONAL, SCIENTIFIC &
TECHNICAL SERVICES--2.1%
- --------------------------------------------------------------------------------
Alliance Data Systems* 13,910 367
---------
Total Professional, scientific &
technical services 367
---------
- --------------------------------------------------------------------------------
SECURITY & COMMODITY CONTRACTS
INTERMEDIATION & BROKERAGE--20.4%
- --------------------------------------------------------------------------------
Ameritrade Holding* 35,340 397
Charles Schwab 39,400 469
Goldman Sachs Group 8,840 742
Lehman Brothers Holdings 11,100 767
Morgan Stanley 13,530 683
Raymond James Financial 13,130 477
---------
Total Security & commodity contracts
intermediation & brokerage 3,535
---------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $15,433) 17,125
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT--1.8%
- --------------------------------------------------------------------------------
Morgan Stanley (A)
0.750%, dated 09/30/03, matures
10/01/03, repurchase price
$303,484 (collateralized by
U.S. Government obligations,
total market value $309,998) $303 303
- --------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $303) 303
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--100.7%
(COST $15,736) 17,428
- --------------------------------------------------------------------------------
TURNER FUNDS 2003 ANNUAL REPORT | 85
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER FINANCIAL SERVICES FUND
Value
(000)
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET--(0.7)%
- --------------------------------------------------------------------------------
Payable due to investment adviser $ (17)
Payable due to administrator (2)
Other assets and liabilities, net (100)
- --------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES, NET (119)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------------------------------
Portfolio capital of Class I Shares
(unlimited authorization -- no par value)
based on 1,272,790 outstanding shares
of beneficial interest 14,617
Accumulated net realized gain
on investments 1,000
Net unrealized appreciation
on investments 1,692
- --------------------------------------------------------------------------------
TOTAL NET ASSETS--100% $17,309
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS I SHARES $13.60
- --------------------------------------------------------------------------------
* Non-income producing security
(A) Tri-party repurchase agreement
Cl - Class
The accompanying notes are an integral part of the financial statements.
86 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER HEALTHCARE & BIOTECHNOLOGY FUND
September 30, 2003
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--95.8%
- --------------------------------------------------------------------------------
ADMINISTRATION OF HUMAN
RESOURCE PROGRAMS--3.1%
- --------------------------------------------------------------------------------
Express Scripts* 7,420 $ 454
---------
Total Administration of human
resource programs 454
---------
- --------------------------------------------------------------------------------
BUSINESS SUPPORT SERVICES--1.7%
- --------------------------------------------------------------------------------
Icon ADR* 6,570 249
---------
Total Business support services 249
---------
- --------------------------------------------------------------------------------
DRUGS & DRUGGISTS' SUNDRIES WHOLESALE--1.8%
- --------------------------------------------------------------------------------
Henry Schein* 4,830 274
---------
Total Drugs & druggists' sundries wholesale 274
---------
- --------------------------------------------------------------------------------
GENERAL MEDICAL & SURGICAL HOSPITALS--2.3%
- --------------------------------------------------------------------------------
Universal Health Services, Cl B* 7,110 351
---------
Total General medical & surgical hospitals 351
---------
- --------------------------------------------------------------------------------
HEALTH & PERSONAL CARE STORES--1.4%
- --------------------------------------------------------------------------------
Omnicare 5,910 213
---------
Total Health & personal care stores 213
---------
- --------------------------------------------------------------------------------
INSURANCE CARRIERS--13.2%
- --------------------------------------------------------------------------------
Aetna 7,570 462
Anthem* 8,190 584
Mid Atlantic Medical Services* 10,450 538
UnitedHealth Group 7,460 375
---------
Total Insurance carriers 1,959
---------
- --------------------------------------------------------------------------------
MEDICAL EQUIPMENT &
SUPPLIES MANUFACTURING--11.1%
- --------------------------------------------------------------------------------
Boston Scientific* 5,380 343
Inamed* 3,140 231
Steris* 13,300 306
Varian Medical Systems* 5,280 303
Zimmer Holdings* 8,400 463
---------
Total Medical equipment &
supplies manufacturing 1,646
---------
Value
Shares (000)
- --------------------------------------------------------------------------------
NAVIGATIONAL/MEASURING/MEDICAL/CONTROL INSTRUMENTS MANUFACTURING--8.1%
- --------------------------------------------------------------------------------
Dentsply International 4,850 $ 217
Fisher Scientific International* 7,370 293
Medtronic 8,100 380
Schick Technologies* 5,150 42
Visx* 14,580 278
---------
Total Navigational/measuring/medical/
control instruments manufacturing 1,210
---------
- --------------------------------------------------------------------------------
OFFICES OF PHYSICIANS--1.1%
- --------------------------------------------------------------------------------
Caremark Rx* 7,170 162
---------
Total Offices of physicians 162
---------
- --------------------------------------------------------------------------------
OTHER ELECTRICAL EQUIPMENT &
COMPONENT MANUFACTURING--1.4%
- --------------------------------------------------------------------------------
Wilson Greatbatch Technologies* 5,660 204
---------
Total Other electrical equipment &
component manufacturing 204
---------
- --------------------------------------------------------------------------------
OUTPATIENT CARE CENTERS--2.3%
- --------------------------------------------------------------------------------
Coventry Health Care* 6,410 338
---------
Total Outpatient care centers 338
---------
- --------------------------------------------------------------------------------
PHARMACEUTICAL & MEDICINE
MANUFACTURING--42.1%
- --------------------------------------------------------------------------------
Abbott Laboratories 17,780 757
Able Laboratories* 6,620 124
Allergan 1,700 134
Amgen* 9,260 598
Bristol-Myers Squibb 31,620 811
Chiron* 5,560 287
Immucor* 3,820 103
Invitrogen* 7,580 440
KV Pharmaceutical, Cl A* 15,300 344
Pfizer 27,020 821
Pharmaceutical Resources* 10,250 699
Teva Pharmaceutical Industries ADR 2,610 149
Wyeth 21,280 981
---------
Total Pharmaceutical &
medicine manufacturing 6,248
---------
TURNER FUNDS 2003 ANNUAL REPORT | 87
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER HEALTHCARE & BIOTECHNOLOGY FUND
Shares/Face Value
Amount (000) (000)
- --------------------------------------------------------------------------------
PROFESSIONAL & COMMERCIAL
EQUIPMENT & SUPPLY WHOLESALE--4.0%
- --------------------------------------------------------------------------------
Patterson Dental* 10,320 $ 594
---------
Total Professional & commercial
equipment & supply wholesale 594
---------
- --------------------------------------------------------------------------------
SCIENTIFIC R&D SERVICES--2.2%
- --------------------------------------------------------------------------------
Genentech* 2,700 216
Idec Pharmaceuticals* 3,520 117
---------
Total Scientific r&d services 333
---------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $12,511) 14,235
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT--2.1%
- --------------------------------------------------------------------------------
Morgan Stanley (A)
0.750%, dated 09/30/03, matures
10/01/03, repurchase price
$303,734 (collateralized by
U.S. Government obligations,
total market value $310,254) $304 304
- --------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $304) 304
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--97.9%
(COST $12,815) 14,539
- --------------------------------------------------------------------------------
Value
(000)
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET--2.1%
- --------------------------------------------------------------------------------
Payable due to investment adviser $ (11)
Payable due to administrator (2)
Payable to shareholder servicing agent (3)
Other assets and liabilities, net 330
- --------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES, NET 314
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------------------------------
Portfolio capital of Class II Shares
(unlimited authorization -- no par value)
based on 1,206,323 outstanding shares
of beneficial interest 13,223
Accumulated net realized loss
on investments (94)
Net unrealized appreciation
on investments 1,724
- --------------------------------------------------------------------------------
TOTAL NET ASSETS--100% $14,853
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS II SHARES $12.31
- --------------------------------------------------------------------------------
* Non-income producing security
(A) Tri-party repurchase agreement
ADR - American depository receipt
Cl - Class
The accompanying notes are an integral part of the financial statements.
88 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER TAX MANAGED U.S. EQUITY FUND
September 30, 2003
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--98.2%
- --------------------------------------------------------------------------------
ACCOUNTING/TAX PREPARATION/
BOOKKEEPING/PAYROLL SERVICES--1.2%
- --------------------------------------------------------------------------------
Paychex 1,960 $ 67
---------
Total Accounting/tax preparation/
bookkeeping/payroll services 67
---------
- --------------------------------------------------------------------------------
ADVERTISING & RELATED SERVICES--1.2%
- --------------------------------------------------------------------------------
AOL Time Warner* 4,470 68
---------
Total Advertising & related services 68
---------
- --------------------------------------------------------------------------------
AGRICULTURE, CONSTRUCTION &
MINING MACHINERY MANUFACTURING--0.8%
- --------------------------------------------------------------------------------
Caterpillar 650 45
---------
Total Agriculture, construction & mining
machinery manufacturing 45
---------
- --------------------------------------------------------------------------------
BASIC CHEMICAL MANUFACTURING--1.2%
- --------------------------------------------------------------------------------
Air Products & Chemicals 1,540 69
---------
Total Basic chemical manufacturing 69
---------
- --------------------------------------------------------------------------------
BEVERAGE MANUFACTURING--2.8%
- --------------------------------------------------------------------------------
Coca-Cola 2,020 87
PepsiCo 1,490 68
---------
Total Beverage manufacturing 155
---------
- --------------------------------------------------------------------------------
BUILDING MATERIAL & SUPPLIES DEALERS--1.1%
- --------------------------------------------------------------------------------
Home Depot 1,960 62
---------
Total Building material & supplies dealers 62
---------
- --------------------------------------------------------------------------------
CABLE NETWORKS & PROGRAM DISTRIBUTION--3.5%
- --------------------------------------------------------------------------------
Comcast, Cl A* 3,185 99
EchoStar Communications, Cl A* 1,000 38
InterActive* 1,730 57
---------
Total Cable networks &
program distribution 194
---------
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT
MANUFACTURING--4.7%
- --------------------------------------------------------------------------------
Cisco Systems* 5,070 99
Ericsson Telephone ADR 2,700 40
Motorola 2,280 27
Value
Shares (000)
- --------------------------------------------------------------------------------
Nokia ADR 4,300 $ 67
Western Wireless, Cl A* 1,420 27
---------
Total Communications equipment
manufacturing 260
---------
- --------------------------------------------------------------------------------
COMPUTER & PERIPHERAL EQUIPMENT
MANUFACTURING--2.1%
- --------------------------------------------------------------------------------
Dell* 1,480 50
EMC* 5,100 64
---------
Total Computer & peripheral
equipment manufacturing 114
---------
- --------------------------------------------------------------------------------
COMPUTER SYSTEMS DESIGN &
RELATED SERVICES--0.6%
- --------------------------------------------------------------------------------
Sungard Data Systems* 1,300 34
---------
Total Computer systems design &
related services 34
---------
- --------------------------------------------------------------------------------
DAIRY PRODUCT MANUFACTURING--0.5%
- --------------------------------------------------------------------------------
Dean Foods* 950 29
---------
Total Dairy product manufacturing 29
---------
- --------------------------------------------------------------------------------
DATA PROCESSING SERVICES--2.0%
- --------------------------------------------------------------------------------
Affiliated Computer Services, Cl A* 700 34
First Data 1,330 53
Fiserv* 670 25
---------
Total Data processing services 112
---------
- --------------------------------------------------------------------------------
DEEP SEA, COASTAL & GREAT LAKES
WATER TRANSPORTATION--0.7%
- --------------------------------------------------------------------------------
Carnival 1,140 37
---------
Total Deep sea, coastal & great lakes
water transportation 37
---------
- --------------------------------------------------------------------------------
DEPARTMENT STORES--2.8%
- --------------------------------------------------------------------------------
Wal-Mart Stores 2,770 155
---------
Total Department stores 155
---------
- --------------------------------------------------------------------------------
DEPOSITORY CREDIT INTERMEDIATION--6.7%
- --------------------------------------------------------------------------------
Citigroup 4,290 195
Golden West Financial 480 43
TURNER FUNDS 2003 ANNUAL REPORT | 89
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER TAX MANAGED U.S. EQUITY FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
Northern Trust 1,220 $ 52
Wells Fargo 1,580 81
---------
Total Depository credit intermediation 371
---------
- --------------------------------------------------------------------------------
ELECTRIC POWER GENERATION,
TRANSMISSION & DISTRIBUTION--0.8%
- --------------------------------------------------------------------------------
AES* 6,160 46
---------
Total Electric power generation,
transmission & distribution 46
---------
- --------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT MANUFACTURING--2.5%
- --------------------------------------------------------------------------------
General Electric 4,570 136
---------
Total Electrical equipment manufacturing 136
---------
- --------------------------------------------------------------------------------
ELECTRONIC SHOPPING & MAIL-ORDER HOUSES--0.8%
- --------------------------------------------------------------------------------
eBay* 780 42
---------
Total Electronic shopping &
mail-order houses 42
---------
- --------------------------------------------------------------------------------
ELECTRONICS & APPLIANCE STORES--0.5%
- --------------------------------------------------------------------------------
Best Buy* 570 27
---------
Total Electronics & appliance stores 27
---------
- --------------------------------------------------------------------------------
EMPLOYMENT SERVICES--0.5%
- --------------------------------------------------------------------------------
Manpower 680 25
---------
Total Employment services 25
---------
- --------------------------------------------------------------------------------
GENERAL MEDICAL & SURGICAL HOSPITALS--0.5%
- --------------------------------------------------------------------------------
HCA 740 27
---------
Total General medical & surgical hospitals 27
---------
- --------------------------------------------------------------------------------
GROCERY & RELATED PRODUCT WHOLESALERS--0.8%
- --------------------------------------------------------------------------------
Sysco 1,310 43
---------
Total Grocery & related product wholesalers 43
---------
- --------------------------------------------------------------------------------
GROCERY STORES--0.6%
- --------------------------------------------------------------------------------
Safeway* 1,370 31
---------
Total Grocery stores 31
---------
Value
Shares (000)
- --------------------------------------------------------------------------------
INDUSTRIAL MACHINERY MANUFACTURING--1.1%
- --------------------------------------------------------------------------------
Kla-Tencor* 710 $ 36
Novellus Systems* 800 27
---------
Total Industrial machinery manufacturing 63
---------
- --------------------------------------------------------------------------------
INFORMATION SERVICES--0.9%
- --------------------------------------------------------------------------------
Yahoo!* 1,400 50
---------
Total Information services 50
---------
- --------------------------------------------------------------------------------
INSURANCE CARRIERS--4.2%
- --------------------------------------------------------------------------------
American International Group 2,560 147
Anthem* 700 50
UnitedHealth Group 670 34
---------
Total Insurance carriers 231
---------
- --------------------------------------------------------------------------------
LIMITED-SERVICE EATING PLACES--0.5%
- --------------------------------------------------------------------------------
Starbucks* 990 29
---------
Total Limited-service eating places 29
---------
- --------------------------------------------------------------------------------
MANAGEMENT, SCIENTIFIC & TECHNICAL
CONSULTING SERVICES--0.6%
- --------------------------------------------------------------------------------
Monster Worldwide* 1,300 33
---------
Total Management, scientific &
technical consulting services 33
---------
- --------------------------------------------------------------------------------
MEDICAL EQUIPMENT & SUPPLIES
MANUFACTURING--1.5%
- --------------------------------------------------------------------------------
Boston Scientific* 850 54
St. Jude Medical* 550 30
---------
Total Medical equipment &
supplies manufacturing 84
---------
- --------------------------------------------------------------------------------
METAL ORE MINING--0.6%
- --------------------------------------------------------------------------------
Phelps Dodge* 720 34
---------
Total Metal ore mining 34
---------
- --------------------------------------------------------------------------------
MINING SUPPORT ACTIVITIES--1.0%
- --------------------------------------------------------------------------------
Halliburton 2,400 58
---------
Total Mining support activities 58
---------
90 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER TAX MANAGED U.S. EQUITY FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
NATURAL GAS DISTRIBUTION--0.9%
- --------------------------------------------------------------------------------
Williams 5,070 $ 48
---------
Total Natural gas distribution 48
---------
- --------------------------------------------------------------------------------
NAVIGATIONAL/MEASURING/MEDICAL/CONTROL INSTRUMENTS MANUFACTURING--1.6%
- --------------------------------------------------------------------------------
Danaher 550 40
Medtronic 1,060 50
---------
Total Navigational/measuring/medical/
control instruments manufacturing 90
---------
- --------------------------------------------------------------------------------
NONDEPOSITORY CREDIT INTERMEDIATION--3.4%
- --------------------------------------------------------------------------------
American Express 2,150 97
MBNA 2,870 66
Providian Financial* 2,310 27
---------
Total Nondepository credit intermediation 190
---------
- --------------------------------------------------------------------------------
OFFICES OF PHYSICIANS--0.5%
- --------------------------------------------------------------------------------
Caremark Rx* 1,300 29
---------
Total Offices of physicians 29
---------
- --------------------------------------------------------------------------------
OIL & GAS EXTRACTION--2.3%
- --------------------------------------------------------------------------------
Apache 812 56
Pogo Producing 500 23
XTO Energy 2,400 50
---------
Total Oil & gas extraction 129
---------
- --------------------------------------------------------------------------------
OTHER ELECTRICAL EQUIPMENT &
COMPONENT MANUFACTURING--0.7%
- --------------------------------------------------------------------------------
Corning* 4,300 41
---------
Total Other electrical equipment &
component manufacturing 41
---------
- --------------------------------------------------------------------------------
OTHER FINANCIAL INVESTMENT ACTIVITIES--0.5%
- --------------------------------------------------------------------------------
SEI Investments 770 25
---------
Total Other financial investment activities 25
---------
- --------------------------------------------------------------------------------
OTHER GENERAL PURPOSE MACHINERY
MANUFACTURING--0.9%
- --------------------------------------------------------------------------------
SPX* 1,050 48
---------
Total Other general purpose
machinery manufacturing 48
---------
Value
Shares (000)
- --------------------------------------------------------------------------------
OTHER LEATHER & ALLIED PRODUCT
MANUFACTURING--0.7%
- --------------------------------------------------------------------------------
Coach* 700 $ 38
---------
Total Other leather & allied product
manufacturing 38
---------
- --------------------------------------------------------------------------------
OTHER MISCELLANEOUS MANUFACTURING--1.0%
- --------------------------------------------------------------------------------
3M 780 54
---------
Total Other miscellaneous manufacturing 54
---------
- --------------------------------------------------------------------------------
PHARMACEUTICAL & MEDICINE
MANUFACTURING--8.6%
- --------------------------------------------------------------------------------
Abbott Laboratories 930 40
Amgen* 910 59
Bristol-Myers Squibb 1,050 27
Gilead Sciences* 850 47
Medimmune* 1,300 43
Pfizer 4,970 151
Teva Pharmaceutical
Industries ADR 1,000 57
Wyeth 1,150 53
---------
Total Pharmaceutical & medicine
manufacturing 477
---------
- --------------------------------------------------------------------------------
PIPELINE TRANSPORTATION OF NATURAL GAS--1.4%
- --------------------------------------------------------------------------------
El Paso 4,300 32
Kinder Morgan 820 44
---------
Total Pipeline transportation of
natural gas 76
---------
- --------------------------------------------------------------------------------
SCHEDULED AIR TRANSPORTATION--1.8%
- --------------------------------------------------------------------------------
AMR* 2,480 28
Ryanair Holdings ADR* 1,730 70
---------
Total Scheduled air transportation 98
---------
- --------------------------------------------------------------------------------
SCIENTIFIC R&D SERVICES--1.0%
- --------------------------------------------------------------------------------
Genentech* 680 54
---------
Total Scientific r&d services 54
---------
- --------------------------------------------------------------------------------
SECURITY & COMMODITY CONTRACTS
INTERMEDIATION & BROKERAGE--4.2%
- --------------------------------------------------------------------------------
Charles Schwab 6,360 76
Goldman Sachs Group 940 79
Morgan Stanley 1,510 76
---------
Total Security & commodity contracts
intermediation & brokerage 231
---------
TURNER FUNDS 2003 ANNUAL REPORT | 91
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER TAX MANAGED U.S. EQUITY FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
SEMICONDUCTOR & OTHER ELECTRONIC COMPONENT MANUFACTURING--9.5%
- --------------------------------------------------------------------------------
Analog Devices* 1,180 $ 45
Applied Materials* 3,420 62
Intel 5,360 147
Micron Technology* 3,090 42
Molex 700 20
National Semiconductor* 1,450 47
Sanmina-SCI* 2,300 22
Texas Instruments 1,810 41
Tyco International 3,460 71
Xilinx* 990 28
---------
Total Semiconductor & other electronic
component manufacturing 525
---------
- --------------------------------------------------------------------------------
SOAP, CLEANERS & TOILET PREPARATION
MANUFACTURING--2.5%
- --------------------------------------------------------------------------------
Colgate-Palmolive 610 34
Procter & Gamble 1,140 106
---------
Total Soap, cleaners & toilet preparation
manufacturing 140
---------
- --------------------------------------------------------------------------------
SOFTWARE PUBLISHERS--1.2%
- --------------------------------------------------------------------------------
Electronic Arts* 480 44
Mercury Interactive* 500 23
---------
Total Software publishers 67
---------
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS--3.8%
- --------------------------------------------------------------------------------
CenturyTel 1,410 48
Citizens Communications* 2,250 25
Nortel Networks 11,000 45
Vodafone Group ADR 4,460 90
---------
Total Telecommunications 208
---------
Shares/Face Value
Amount (000) (000)
- --------------------------------------------------------------------------------
TRAVELER ACCOMMODATION--1.4%
- --------------------------------------------------------------------------------
MGM Mirage* 820 $ 30
Starwood Hotels & Resorts Worldwide 1,300 45
---------
Total Traveler accommodation 75
---------
- --------------------------------------------------------------------------------
WASTE TREATMENT & DISPOSAL--0.5%
- --------------------------------------------------------------------------------
Allied Waste Industries* 2,560 28
---------
Total Waste treatment & disposal 28
---------
- --------------------------------------------------------------------------------
WATER, SEWAGE & OTHER SYSTEMS--0.5%
- --------------------------------------------------------------------------------
Philadelphia Suburban 1,160 28
---------
Total Water, sewage & other systems 28
---------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $4,553) 5,430
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT--4.9%
- --------------------------------------------------------------------------------
Morgan Stanley (A)
0.750%, dated 09/30/03, matures
10/01/03, repurchase price
$271,176 (collateralized by
U.S. Government obligations,
total market value $276,996) $271 271
- --------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $271) 271
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--103.1%
(COST $4,824) 5,701
- --------------------------------------------------------------------------------
92 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER TAX MANAGED U.S. EQUITY FUND
Value
(000)
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET--(3.1)%
- --------------------------------------------------------------------------------
Receivable from investment adviser $ 1
Payable due to administrator (1)
Payable to shareholder servicing agent (1)
Other assets and liabilities, net (172)
- --------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES, NET (173)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------------------------------
Portfolio capital of Class II Shares
(unlimited authorization -- no par value)
based on 687,969 outstanding shares
of beneficial interest 7,372
Accumulated net realized loss
on investments (2,721)
Net unrealized appreciation
on investments 877
- --------------------------------------------------------------------------------
TOTAL NET ASSETS--100% $5,528
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS II SHARES $8.04
- --------------------------------------------------------------------------------
* Non-income producing security
(A) Tri-party repurchase agreement
ADR - American depository receipt
Cl - Class
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2003 ANNUAL REPORT | 93
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER STRATEGIC VALUE AND HIGH INCOME FUND
September 30, 2003
Value
Shares (000)
- --------------------------------------------------------------------------------
EQUITY FUND--51.0%
- --------------------------------------------------------------------------------
Turner Small Cap Value
Opportunities Fund, Cl II 17,783 $ 226
- --------------------------------------------------------------------------------
TOTAL EQUITY FUND
(COST $210) 226
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FIXED INCOME FUND--49.5%
- --------------------------------------------------------------------------------
Turner High Yield Fund, Cl I 43,659 219
- --------------------------------------------------------------------------------
TOTAL FIXED INCOME FUND
(COST $213) 219
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--100.5%
(COST $423) 445
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET--(0.5)%
- --------------------------------------------------------------------------------
Receivable from investment adviser 3
Other assets and liabilities, net (5)
- --------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES, NET (2)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------------------------------
Portfolio capital of Class I Shares
(unlimited authorization -- no par value)
based on 35,230 outstanding shares
of beneficial interest 422
Accumulated net realized loss
on investments (1)
Net unrealized appreciation
on investments 22
- --------------------------------------------------------------------------------
TOTAL NET ASSETS--100% $443
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS I SHARES $12.58
- --------------------------------------------------------------------------------
Cl - Class
The accompanying notes are an integral part of the financial statements.
94 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER CORE FIXED INCOME FUND
September 30, 2003
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS--38.2%
- --------------------------------------------------------------------------------
COSMETICS & TOILETRIES--3.2%
- --------------------------------------------------------------------------------
Dial
7.000%, 08/15/06 $1,250 $ 1,398
---------
Total Cosmetics & toiletries 1,398
---------
- --------------------------------------------------------------------------------
DATA PROCESSING SERVICES--4.4%
- --------------------------------------------------------------------------------
First Data
4.700%, 11/01/06 1,000 1,069
First Data,
Ser D, MTN
5.800%, 12/15/08 750 834
---------
Total Data processing services 1,903
---------
- --------------------------------------------------------------------------------
ELECTRICAL PRODUCTS & SERVICES--8.3%
- --------------------------------------------------------------------------------
Emerson Electric
7.125%, 08/15/10 1,250 1,480
Public Service Company of Colorado
4.375%, 10/01/08 1,000 1,036
Scana,
Ser B, MTN
5.810%, 10/23/08 1,000 1,101
---------
Total Electrical products & services 3,617
---------
- --------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO--4.3%
- --------------------------------------------------------------------------------
Sysco
7.250%, 04/15/07 405 468
7.160%, 04/15/27 500 599
6.500%, 06/15/05 750 810
---------
Total Food, beverage & tobacco 1,877
---------
- --------------------------------------------------------------------------------
GAS/NATURAL GAS--4.6%
- --------------------------------------------------------------------------------
Air Products & Chemicals,
Ser E, MTN
7.340%, 06/15/26 250 294
ChevronTexaco
8.110%, 12/01/04 160 167
Natural Fuel Gas,
Ser D, MTN
6.303%, 05/27/08 1,350 1,507
---------
Total Gas/natural gas 1,968
---------
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
MANUFACTURING--1.8%
- --------------------------------------------------------------------------------
Thermo Electron
7.625%, 10/30/08 $ 665 $ 776
---------
Total Manufacturing 776
---------
- --------------------------------------------------------------------------------
PETROLEUM & FUEL PRODUCTS--5.4%
- --------------------------------------------------------------------------------
Pioneer Natural Resources
8.875%, 04/15/05 1,250 1,347
7.200%, 01/15/28 450 475
XTO Energy
7.500%, 04/15/12 475 528
---------
Total Petroleum & fuel products 2,350
---------
- --------------------------------------------------------------------------------
RETAIL--3.7%
- --------------------------------------------------------------------------------
Wal-Mart Stores
6.875%, 08/10/09 1,350 1,586
---------
Total Retail 1,586
---------
- --------------------------------------------------------------------------------
TRUCKING--2.5%
- --------------------------------------------------------------------------------
Roadway
8.250%, 12/01/08 925 1,079
---------
Total Trucking 1,079
---------
- --------------------------------------------------------------------------------
TOTAL CORPORATE OBLIGATIONS
(COST $15,163) 16,554
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. GOVERNMENT MORTGAGE-
BACKED OBLIGATIONS--31.8%
- --------------------------------------------------------------------------------
FHLMC
Pool #277449
8.500%, 09/01/09 1 1
FHLMC CMO/REMIC
Ser 1546, Cl H
7.000%, 12/15/22 182 185
Ser 1561, Cl H
6.500%, 05/15/08 750 779
Ser 2522, Cl PB
4.750%, 11/15/14 2,500 2,588
TURNER FUNDS 2003 ANNUAL REPORT | 95
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER CORE FIXED INCOME FUND
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
FNMA
Pool #254759
4.500%, 06/01/18 $1,926 $ 1,944
Pool #369214
5.000%, 04/01/09 175 179
Pool #535301
6.500%, 04/01/15 231 244
Pool #694431
5.000%, 03/01/18 854 876
FNMA CMO/REMIC
Ser 1994-17, Cl H
6.000%, 02/25/09 504 535
Ser 2003-41, Cl XT
4.500%, 07/25/15 1,500 1,507
GNMA
Pool #13125
8.000%, 10/15/06 6 7
Pool #187899
8.000%, 05/15/17 18 20
Pool #196477
10.000%, 04/15/10 28 31
Pool #202886
8.000%, 03/15/17 58 64
Pool #221235
8.500%, 07/15/17 22 24
Pool #331786
8.000%, 08/15/22 36 39
Pool #376400
6.500%, 02/15/24 227 240
Pool #439478
7.000%, 01/15/27 255 271
Pool #457921
5.500%, 12/15/28 408 420
Pool #462622
6.500%, 03/15/28 471 495
Pool #533974
6.500%, 05/15/32 267 280
Pool #570400
6.500%, 09/15/31 601 631
Pool #781029
6.500%, 05/15/29 162 170
Pool #781096
6.500%, 12/15/28 735 773
Pool #781231
7.000%, 12/15/30 386 411
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
Pool #781276
6.500%, 04/15/31 $ 588 $ 618
Pool #781328
7.000%, 09/15/31 436 464
- --------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT MORTGAGE-
BACKED OBLIGATIONS (COST $13,614) 13,796
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS--19.4%
- --------------------------------------------------------------------------------
U.S. Treasury Bonds
7.500%, 11/15/16 1,500 1,958
7.250%, 05/15/16 1,450 1,854
7.250%, 08/15/22 900 1,166
6.375%, 08/15/27 450 537
U.S. Treasury Notes
6.125%, 08/15/07 500 570
4.750%, 11/15/08 750 817
3.250%, 08/15/08 1,500 1,531
- --------------------------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATIONS
(COST $7,779) 8,433
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS--6.0%
- --------------------------------------------------------------------------------
FNMA, MTN
6.920%, 03/19/07 555 640
Private Export Funding
6.620%, 10/01/05 250 275
SLMA (A)
6.470%, 10/03/22 5,065 1,673
- --------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS (COST $2,390) 2,588
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT--3.2%
- --------------------------------------------------------------------------------
ABN-Amro (B)
1.040%, dated 09/30/03, matures
10/01/03, repurchase price
$1,403,012 (collateralized by
U.S. Government obligations,
total market value $1,431,031) 1,403 1,403
- --------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $1,403) 1,403
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--98.6%
(COST $40,349) 42,774
- --------------------------------------------------------------------------------
96 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER CORE FIXED INCOME FUND
Value
(000)
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET--1.4%
- --------------------------------------------------------------------------------
Payable due to investment adviser $ (12)
Payable due to administrator (5)
Other assets and liabilities, net 634
- --------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES, NET 617
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------------------------------
Portfolio capital of Class I Shares
(unlimited authorization -- no par value)
based on 4,172,767 outstanding shares
of beneficial interest 41,340
Distributions in excess of
net investment income (2)
Accumulated net realized loss
on investments (372)
Net unrealized appreciation
on investments 2,425
- --------------------------------------------------------------------------------
TOTAL NET ASSETS--100% $43,391
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS I SHARES $10.40
- --------------------------------------------------------------------------------
(A) Zero coupon bond -- the rate reported is the effective yield at time of
purchase.
(B) Tri-party repurchase agreement
Cl - Class
CMO - Collateralized mortgage obligation
FHLMC - Federal home loan mortgage corporation
FNMA - Federal national mortgage association
GNMA - Government national mortgage association
MTN - Medium term note
REMIC - Real estate mortgage investment conduit
Ser - Series
SLMA - Student loan marketing association
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2003 ANNUAL REPORT | 97
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER TOTAL RETURN FIXED INCOME FUND
September 30, 2003
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS--60.8%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--4.1%
- --------------------------------------------------------------------------------
Sequa
9.000%, 08/01/09 $10 $ 11
---------
Total Aerospace & defense 11
---------
- --------------------------------------------------------------------------------
AUTOMOTIVE & TRUCK PARTS--6.0%
- --------------------------------------------------------------------------------
General Motors Acceptance
6.125%, 09/15/06 15 16
---------
Total Automotive & truck parts 16
---------
- --------------------------------------------------------------------------------
BROADCASTING, NEWSPAPERS & ADVERTISING--4.0%
- --------------------------------------------------------------------------------
Houghton Mifflin
9.875%, 02/01/13 10 11
---------
Total Broadcasting,
newspapers & advertising 11
---------
- --------------------------------------------------------------------------------
CHEMICAL MANUFACTURING--5.6%
- --------------------------------------------------------------------------------
Dow Chemical
5.250%, 05/14/04 15 15
---------
Total Chemical manufacturing 15
---------
- --------------------------------------------------------------------------------
CONSUMER PRODUCTS--4.1%
- --------------------------------------------------------------------------------
Central Garden & Pet
9.125%, 02/01/13 10 11
---------
Total Consumer products 11
---------
- --------------------------------------------------------------------------------
FINANCIAL SERVICES--11.6%
- --------------------------------------------------------------------------------
Goldman Sachs
5.700%, 09/01/12 15 16
SLM,
Ser A, MTN
5.000%, 10/01/13 15 15
---------
Total Financial services 31
---------
- --------------------------------------------------------------------------------
LEASING & RENTALS--6.0%
- --------------------------------------------------------------------------------
International Lease Finance
5.875%, 05/01/13 15 16
---------
Total Leasing & rentals 16
---------
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
MACHINERY--5.6%
- --------------------------------------------------------------------------------
John Deere Capital
5.100%, 01/15/13 $15 $ 15
---------
Total Machinery 15
---------
- --------------------------------------------------------------------------------
MISCELLANEOUS MANUFACTURING--5.6%
- --------------------------------------------------------------------------------
General Electric
5.000%, 02/01/13 15 15
---------
Total Miscellaneous manufacturing 15
---------
- --------------------------------------------------------------------------------
RETAIL--4.1%
- --------------------------------------------------------------------------------
JC Penney
8.000%, 03/01/10 10 11
---------
Total Retail 11
---------
- --------------------------------------------------------------------------------
TELEPHONES & TELECOMMUNICATIONS--4.1%
- --------------------------------------------------------------------------------
Nextel Communications
9.500%, 02/01/11 10 11
---------
Total Telephones & telecommunications 11
---------
- --------------------------------------------------------------------------------
TOTAL CORPORATE OBLIGATIONS
(COST $155) 163
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS--19.0%
- --------------------------------------------------------------------------------
U.S. Treasury Notes
3.250%, 08/15/08 50 51
- --------------------------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATIONS
(COST $49) 51
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--7.5%
- --------------------------------------------------------------------------------
MORTGAGE RELATED--7.5%
- --------------------------------------------------------------------------------
Goldman Sachs Mortgage Securities II,
Ser 1998-C1, Cl A1
6.060%, 10/18/30 19 20
---------
- --------------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(COST $19) 20
- --------------------------------------------------------------------------------
98 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER TOTAL RETURN FIXED INCOME FUND
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT--21.3%
- --------------------------------------------------------------------------------
Morgan Stanley (A)
0.750%, dated 09/30/03, matures
10/01/03, repurchase price
$56,615 (collateralized by
U.S. Government obligations,
total market value $57,830) $57 $ 57
- --------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $57) 57
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--108.6%
(COST $280) 291
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET--(8.6)%
- --------------------------------------------------------------------------------
Receivable from investment adviser 1
Payable for capital shares redeemed (20)
Other assets and liabilities, net (4)
- --------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES, NET (23)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------------------------------
Portfolio capital of Class I Shares
(unlimited authorization -- no par value)
based on 30,780 outstanding shares
of beneficial interest 384
Undsitributed net investment income 10
Accumulated net realized loss
on investments (137)
Net unrealized appreciation
on investments 11
- --------------------------------------------------------------------------------
TOTAL NET ASSETS--100% $268
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS I SHARES $8.71
- --------------------------------------------------------------------------------
(A) Tri-party repurchase agreement
Cl - Class
MTN - Medium term note
Ser - Series
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2003 ANNUAL REPORT | 99
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER HIGH YIELD FUND
September 30, 2003
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS--89.4%
- --------------------------------------------------------------------------------
AEROSPACE & DEFENSE--3.3%
- --------------------------------------------------------------------------------
Sequa
9.000%, 08/01/09 $190 $ 208
Vought Aircraft Industries (A)
8.000%, 07/15/11 100 102
---------
Total Aerospace & defense 310
---------
- --------------------------------------------------------------------------------
AUTOMOTIVE & TRUCK PARTS--1.1%
- --------------------------------------------------------------------------------
Tenneco Automotive (A)
10.250%, 07/15/13 100 108
---------
Total Automotive & truck parts 108
---------
- --------------------------------------------------------------------------------
BROADCASTING, NEWSPAPERS & ADVERTISING--4.4%
- --------------------------------------------------------------------------------
CBD Media (A)
8.625%, 06/01/11 100 106
Dex Media West (A)
9.875%, 08/15/13 100 113
Houghton Mifflin
9.875%, 02/01/13 90 96
Mediacom Broadband
11.000%, 07/15/13 100 105
---------
Total Broadcasting, newspapers &
advertising 420
---------
- --------------------------------------------------------------------------------
BUILDING & CONSTRUCTION--2.2%
- --------------------------------------------------------------------------------
K. Hovnanian Enterprises#
8.875%, 04/01/12 150 160
Koppers (A)
9.875%, 10/15/13 45 47
---------
Total Building & construction 207
---------
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES--1.1%
- --------------------------------------------------------------------------------
Wackenhut Corrections (A)
8.250%, 07/15/13 100 104
---------
Total Commercial services 104
---------
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
CONSUMER PRODUCTS--4.8%
- --------------------------------------------------------------------------------
Central Garden & Pet
9.125%, 02/01/13 $190 $ 207
Jarden
9.750%, 05/01/12 100 108
Rayovac (A)
8.500%, 10/01/13 130 134
---------
Total Consumer products 449
---------
- --------------------------------------------------------------------------------
CONTAINERS & PACKAGING--5.5%
- --------------------------------------------------------------------------------
Crown Euro Holdings (A)
9.500%, 03/01/11 200 215
Owens-Brockway Glass Container
8.750%, 11/15/12 100 107
Silgan Holdings
9.000%, 06/01/09 190 197
---------
Total Containers & packaging 519
---------
- --------------------------------------------------------------------------------
COSMETICS & TOILETRIES--1.6%
- --------------------------------------------------------------------------------
Chattem, Ser B
8.875%, 04/01/08 150 150
---------
Total Cosmetics & toiletries 150
---------
- --------------------------------------------------------------------------------
ELECTRICAL PRODUCTS & SERVICES--3.3%
- --------------------------------------------------------------------------------
AES
9.500%, 06/01/09 100 103
Fisher Scientific International (A)
8.000%, 09/01/13 100 106
PG&E (A)
6.875%, 07/15/08 100 105
---------
Total Electrical products & services 314
---------
- --------------------------------------------------------------------------------
ENTERTAINMENT--4.0%
- --------------------------------------------------------------------------------
Argosy Gaming
9.000%, 09/01/11 200 218
Aztar
9.000%, 08/15/11 150 162
---------
Total Entertainment 380
---------
100 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER HIGH YIELD FUND
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
FINANCIAL SERVICES--1.7%
- --------------------------------------------------------------------------------
Western Financial
9.625%, 05/15/12 $150 $ 162
---------
Total Financial services 162
---------
- --------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO--3.4%
- --------------------------------------------------------------------------------
Del Monte (A)
8.625%, 12/15/12 150 164
Stater Brothers Holdings
10.750%, 08/15/06 150 157
---------
Total Food, beverage & tobacco 321
---------
- --------------------------------------------------------------------------------
GAS/NATURAL GAS--2.8%
- --------------------------------------------------------------------------------
Semco Energy (A)
7.125%, 05/15/08 100 101
Williams
8.625%, 06/01/10 150 159
---------
Total Gas/natural gas 260
---------
- --------------------------------------------------------------------------------
HOTELS & LODGING--3.4%
- --------------------------------------------------------------------------------
Felcor Lodging
10.000%, 09/15/08 150 161
John Q. Hammons Hotels, Ser B
8.875%, 05/15/12 150 163
---------
Total Hotels & lodging 324
---------
- --------------------------------------------------------------------------------
MACHINERY--2.3%
- --------------------------------------------------------------------------------
Case New Holland (A)
9.250%, 08/01/11 200 215
---------
Total Machinery 215
---------
- --------------------------------------------------------------------------------
MEDICAL PRODUCTS & SERVICES--3.4%
- --------------------------------------------------------------------------------
Bio-Rad Laboratories (A)
7.500%, 08/15/13 100 105
Medex (A)
8.875%, 05/15/13 200 211
---------
Total Medical products & services 316
---------
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
METALS--3.8%
- --------------------------------------------------------------------------------
Century Aluminum
11.750%, 04/15/08 $125 $ 134
Freeport-McMoRan Copper & Gold
10.125%, 02/01/10 200 223
---------
Total Metals 357
---------
- --------------------------------------------------------------------------------
PAPER & RELATED PRODUCTS--2.8%
- --------------------------------------------------------------------------------
Georgia-Pacific
9.500%, 12/01/11 150 166
Tembec Industries
7.750%, 03/15/12 100 94
---------
Total Paper & related products 260
---------
- --------------------------------------------------------------------------------
PETROLEUM & FUEL PRODUCTS--8.3%
- --------------------------------------------------------------------------------
Chesepeake Energy
8.125%, 04/01/11 100 108
Comstock Resources
11.250%, 05/01/07 70 76
Grant Prideco, Ser B
9.625%, 12/01/07 40 44
Premcor Refining
7.500%, 06/15/15 150 150
Tesoro Petroleum
9.625%, 04/01/12 100 100
Tom Brown
7.250%, 09/15/13 40 41
Universal Compression
7.250%, 05/15/10 100 103
Vintage Petroleum
8.625%, 02/01/09 150 155
---------
Total Petroleum & fuel products 777
---------
- --------------------------------------------------------------------------------
REAL ESTATE--2.8%
- --------------------------------------------------------------------------------
Forest City Enterprises
7.625%, 06/01/15 150 156
LNR Property (A)
7.625%, 07/15/13 100 103
---------
Total Real estate 259
---------
TURNER FUNDS 2003 ANNUAL REPORT | 101
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER HIGH YIELD FUND
Shares/Face Value
Amount (000) (000)
- --------------------------------------------------------------------------------
RETAIL--4.5%
- --------------------------------------------------------------------------------
Ferrellgas Partners
8.750%, 06/15/12 $150 $ 160
Group 1 Automotive (A)
8.250%, 08/15/13 100 108
JC Penney
8.000%, 03/01/10 140 154
---------
Total Retail 422
---------
- --------------------------------------------------------------------------------
TELEPHONES & TELECOMMUNICATIONS--8.2%
- --------------------------------------------------------------------------------
Echostar DBS
9.375%, 02/01/09 200 213
Nextel Communications
9.500%, 02/01/11 190 210
Rogers Cantel
9.375%, 06/01/08 100 105
Time Warner
9.750%, 07/15/08 100 98
Triton PCS#
8.750%, 11/15/11 150 150
---------
Total Telephones & telecommunications 776
---------
- --------------------------------------------------------------------------------
TRANSPORTATION--7.8%
- --------------------------------------------------------------------------------
Laidlaw International (A)
10.750%, 06/15/11 150 161
Stena
9.625%, 12/01/12 200 217
TFM
10.250%, 06/15/07 130 134
United Auto Group
9.625%, 03/15/12 200 219
---------
Total Transportation 731
---------
- --------------------------------------------------------------------------------
WASTE TREATMENT & DISPOSAL--2.9%
- --------------------------------------------------------------------------------
Allied Waste North America, Ser B
10.000%, 08/01/09 100 108
Casella Waste Systems
9.750%, 02/01/13 150 164
---------
Total Waste treatment & disposal 272
---------
- --------------------------------------------------------------------------------
TOTAL CORPORATE OBLIGATIONS
(COST $7,891) 8,413
- --------------------------------------------------------------------------------
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
PREFERRED STOCK--2.2%
- --------------------------------------------------------------------------------
Crown Castle International PIK* 62 $ 7
Granite Broadcasting* 1,600 117
Pegasus Satellite* 3 --
Sinclair Broadcast Group 2,005 85
- --------------------------------------------------------------------------------
TOTAL PREFERRED STOCK
(COST $164) 209
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCK--0.0%
- --------------------------------------------------------------------------------
Chiquita Brands Escrow* 110,000 --
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $0) --
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR LOANED SECURITIES--3.5%
- --------------------------------------------------------------------------------
Boston Global Investment Trust--
Quality Portfolio 329,290 329
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT HELD
AS COLLATERAL FOR LOANED SECURITIES
(COST $329) 329
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT--6.5%
- --------------------------------------------------------------------------------
Morgan Stanley (B)
0.750%, dated 09/30/03, matures
10/01/03, repurchase price
$605,254 (collateralized by
U.S. Government obligations,
total market value $618,245) $605 605
- --------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $605) 605
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--101.6%
(COST $8,989) 9,556
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET--(1.6)%
- --------------------------------------------------------------------------------
Obligation to return
securities lending collateral (329)
Payable due to investment adviser (2)
Payable due to administrator (1)
Other assets and liabilities, net 184
- --------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES, NET (148)
- --------------------------------------------------------------------------------
102 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER HIGH YIELD FUND
Value
(000)
- --------------------------------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------------------------------
Portfolio capital of Class I Shares
(unlimited authorization -- no par value)
based on 1,872,834 outstanding shares
of beneficial interest $24,648
Undistributed net investment income 1
Accumulated net realized loss
on investments (15,808)
Net unrealized appreciation
on investments 567
- --------------------------------------------------------------------------------
TOTAL NET ASSETS--100% $9,408
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION $5.02
PRICE PER SHARE--CLASS I SHARES
- --------------------------------------------------------------------------------
* Non-income producing security
# Security fully or partially on loan at September 30, 2003 (see note 10 in
notes to financial statements). The total value of securities on loan at
September 30, 2003, was $308,058.
(A) Security sold within the terms of a private placement memorandum, exempt
from registration under section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in the program or other
"accredited investors".
(B) Tri-party repurchase agreement
PIK - Payment-in-kind
Ser - Series
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2003 ANNUAL REPORT | 103
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER ULTRA SHORT DURATION FIXED INCOME FUND
September 30, 2003
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
U.S. GOVERNMENT MORTGAGE-
BACKED OBLIGATIONS--77.9%
- --------------------------------------------------------------------------------
FHLMC
Pool #E64944
7.000%, 07/01/11 $ 626 $ 665
Pool #184967
7.750%, 08/01/08 74 78
FHLMC CMO/REMIC
Ser 1106, Cl E
7.500%, 07/15/06 9 9
Ser 1377, Cl F (A)
1.625%, 09/15/07 587 588
Ser 1515, Cl G
6.500%, 02/15/08 319 324
Ser 1544, Cl L (A)
2.470%, 07/15/08 339 338
Ser 1608, Cl GA
9.000%, 06/15/21 858 870
Ser 161, Cl F
9.500%, 06/15/06 11 11
Ser 1832, Cl E
6.500%, 07/15/10 6,186 6,359
Ser 2114, Cl PE
6.000%, 11/15/23 730 730
Ser 2153, Cl CD
6.000%, 03/15/16 3,290 3,314
Ser 2280, Cl PC
6.000%, 06/15/27 793 793
Ser 2299, Cl K
6.000%, 05/15/25 14 14
Ser 2303, Cl TD
6.500%, 05/15/30 9,496 9,748
Ser 2317, Cl DC
6.050%, 12/15/11 154 153
Ser 2317, Cl DN
6.050%, 12/15/11 127 127
Ser 2367, Cl PJ
6.000%, 03/15/27 3,085 3,112
Ser 2368, Cl D
6.000%, 10/15/29 1,751 1,758
Ser 2370, Cl GC
6.000%, 07/15/27 17,362 17,480
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
Ser 2388, Cl LQ
6.000%, 04/15/27 $ 930 $ 934
Ser 2407, Cl DF
6.000%, 05/15/25 20,997 21,166
Ser 2416, Cl PN
6.000%, 11/15/28 10,000 10,560
Ser 2439, Cl LT
5.750%, 06/15/25 5,000 5,079
Ser 2440, Cl OG
6.500%, 12/15/30 10,000 10,548
Ser 2441, Cl HC
6.500%, 09/15/28 8,499 8,618
Ser 2456, Cl CU
5.500%, 03/15/26 2,886 2,889
Ser 2463, Cl PE
6.000%, 03/15/28 25,000 26,189
Ser 2488, Cl GC
6.000%, 09/15/28 522 532
Ser 2496, Cl PJ
5.000%, 07/15/12 6,453 6,515
Ser 2502, Cl FP (A)
1.770%, 05/15/31 1,008 1,009
Ser 2517, Cl TL
4.500%, 04/15/26 5,000 5,060
Ser 2527, Cl LT
3.870%, 12/15/28 12,816 12,924
Ser 2527, Cl LU
3.790%, 12/15/28 19,453 19,610
Ser 2574, Cl A
4.500%, 12/15/10 404 405
Ser 2575, Cl LM
4.500%, 05/15/32 4,878 4,850
Ser 2577, Cl PM
3.000%, 03/15/21 10,000 10,050
Ser 2586, Cl WA
4.000%, 12/15/32 11,394 11,513
Ser 2586, Cl XG
4.000%, 12/15/32 20,324 20,673
Ser 2590, Cl UL
3.750%, 03/15/32 7,410 7,514
Ser 2594, Cl YA
4.000%, 04/15/23 7,148 7,299
104 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER ULTRA SHORT DURATION FIXED INCOME FUND
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
Ser 2628, Cl PT
3.000%, 12/15/21 $ 3,000 $ 3,003
Ser 2649, Cl PJ
3.500%, 06/15/33 8,015 8,093
FNMA
Pool #190054
7.000%, 10/01/13 1,046 1,108
Pool #190107
6.000%, 11/01/03 9 9
Pool #50984
6.000%, 02/01/04 37 38
Pool #704214
7.500%, 12/01/27 5,611 6,019
FNMA CMO/REMIC
Ser 1992-182, Cl PZ
7.000%, 02/25/20 410 410
Ser 1993-173, Cl F (A)
1.625%, 09/25/08 92 92
Ser 1993-46, Cl FA (A)
1.575%, 05/25/22 226 226
Ser 1993-80, Cl FA (A)
3.770%, 05/25/23 1,014 1,036
Ser 1996-32, Cl PM
6.500%, 04/25/25 6,785 6,913
Ser 1999-15, Cl C
6.250%, 01/25/27 286 286
Ser 2001-28, Cl A
6.000%, 02/25/29 4,262 4,335
Ser 2001-4, Cl PB
7.000%, 04/25/20 16,230 16,866
Ser 2001-68, Cl A
6.000%, 07/25/29 5,787 5,836
Ser 2002-67, Cl AM
5.000%, 11/25/15 6,368 6,631
Ser 2002-70, Cl QL
4.500%, 12/25/17 7,000 7,081
Ser 2002-82, Cl PC
6.000%, 02/25/29 12,935 13,537
Ser 2002-9, Cl PB
6.000%, 11/25/14 1,860 1,898
Ser 2003-33, Cl AM
4.250%, 05/25/33 4,099 4,178
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
Ser 2003-33, Cl PC
4.500%, 03/25/27 $ 3,000 $ 3,058
Ser 2003-34, Cl AD
4.000%, 01/25/32 3,905 3,944
Ser 2003-46, Cl PA
4.000%, 06/25/10 10,072 10,321
Ser 2003-47, Cl PB
4.000%, 08/25/26 3,000 3,068
Ser 2003-54, Cl PB
4.000%, 09/25/17 5,000 5,136
GNMA
Pool #780769
7.500%, 04/15/13 7,282 7,775
Pool #8103 (A)
4.375%, 02/20/16 105 109
GNMA ARM
Pool #8287 (A)
5.625%, 11/20/17 112 117
Pool #8297 (A)
5.625%, 12/20/17 189 198
Pool #8321 (A)
4.375%, 02/20/18 439 456
Pool #8333 (A)
4.375%, 03/20/18 291 302
Pool #8345 (A)
4.375%, 04/20/18 157 163
Pool #8366 (A)
4.375%, 06/20/18 175 180
Pool #8404 (A)
5.750%, 09/20/18 10 11
Pool #8405 (A)
5.750%, 09/20/18 110 113
Pool #8462 (A)
4.375%, 02/20/19 17 17
Pool #8489 (A)
4.375%, 04/20/19 197 205
GNMA CMO/REMIC
Ser 2002-58, Cl FA (A)
1.420%, 02/17/30 1,896 1,898
- --------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT
MORTGAGE-BACKED OBLIGATIONS
(COST $361,287) 365,074
- --------------------------------------------------------------------------------
TURNER FUNDS 2003 ANNUAL REPORT | 105
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER ULTRA SHORT DURATION FIXED INCOME FUND
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS--6.2%
- --------------------------------------------------------------------------------
FHLB, Ser DU07
2.840%, 02/28/07 $6,000 $ 6,017
FHLMC, MTN
3.375%, 04/08/08 2,850 2,868
3.200%, 05/21/08 5,000 5,013
2.125%, 06/16/10 (B) 2,500 2,488
FNMA
3.150%, 05/28/08 5,000 5,011
2.750%, 11/21/06 7,500 7,517
- --------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $28,937) 28,914
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--2.5%
- --------------------------------------------------------------------------------
AUTOMOTIVE--1.2%
- --------------------------------------------------------------------------------
Americredit Automobile Receivables Trust,
Ser 2000-D, Cl A4 (A)
1.330%, 09/12/07 444 445
Ser 2001-A, Cl A4 (A)
1.360%, 12/12/07 5,209 5,212
---------
Total Automotive 5,657
---------
- --------------------------------------------------------------------------------
CREDIT CARDS--0.4%
- --------------------------------------------------------------------------------
Saks Credit Card Master Trust,
Ser 2001-2, Cl A (A)
1.360%, 12/15/09 2,000 2,011
---------
Total Credit cards 2,011
---------
MORTGAGE RELATED--0.9%
- --------------------------------------------------------------------------------
CIT Equipment Collateral,
Ser 2002-VT1, Cl A2
2.900%, 06/21/04 146 146
Goldman Sachs Mortgage Securities II,
Ser 1998-C1, Cl A1
6.060%, 10/18/30 577 609
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
Prudential Home Mortgage Securities,
Ser 1993-29, Cl A11
6.750%, 08/25/08 $1,067 $ 1,066
Residential Funding Mortgage Securities,
Ser 1992-S39, Cl A8
7.500%, 11/25/07 155 154
Salomon Brothers Mortgage Securities VII,
Ser 2003-NBC1, Cl AV4 (A)
5.252%, 03/25/33 2,287 2,374
---------
Total Mortgage related 4,349
---------
- --------------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(COST $11,924) 12,017
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT--13.0%
- --------------------------------------------------------------------------------
ABN-Amro (C)
1.040%, dated 09/30/03, matures
10/01/03, repurchase price
$60,831,949 (collateralized by
U.S. Government obligations,
total market value $62,046,796) 60,830 60,830
- --------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $60,830) 60,830
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--99.6%
(COST $462,978) 466,835
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET--0.4%
- --------------------------------------------------------------------------------
Receivable from investment adviser 46
Payable due to administrator (56)
Payable to shareholder servicing agent (2)
Other assets and liabilities, net 1,708
- --------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES, NET 1,696
- --------------------------------------------------------------------------------
106 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER ULTRA SHORT DURATION FIXED INCOME FUND
Value
(000)
- --------------------------------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------------------------------
Portfolio capital of Class I Shares
(unlimited authorization -- no par value)
based on 45,501,628 outstanding shares
of beneficial interest $465,488
Portfolio capital of Class II Shares
(unlimited authorization -- no par value)
based on 584,289 outstanding shares
of beneficial interest 5,923
Distributions in excess of
net investment income (185)
Accumulated net realized loss
on investments (6,552)
Net unrealized appreciation
on investments 3,857
- --------------------------------------------------------------------------------
TOTAL NET ASSETS--100% $468,531
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS I SHARES
($462,566,934 / 45,501,628 SHARES) $10.17
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS II SHARES
($5,964,136 / 584,289 SHARES) $10.21
- --------------------------------------------------------------------------------
(A) Variable rate security -- the rate reflected is the rate in effect on
September 30, 2003.
(B) Delayed interest (step-bonds) -- the interest rate disclosed represents the
effective yield at time of purchase.
(C) Tri-party repurchase agreement
ARM - Adjustable rate mortgage
Cl - Class
CMO - Collateralized mortgage obligation
FHLB - Federal home loan bank
FHLMC - Federal home loan mortgage corporation
FNMA - Federal national mortgage association
GNMA - Government national mortgage association
MTN - Medium term note
REMIC - Real estate mortgage investment conduit
Ser - Series
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2003 ANNUAL REPORT | 107
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER SHORT DURATION FIXED INCOME FUND
September 30, 2003
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS--56.1%
- --------------------------------------------------------------------------------
FHLMC
Pool #C66916
7.000%, 05/01/32 $ 1,321 $ 1,394
Pool #D94598
6.500%, 04/01/21 738 772
Pool #E85642
5.500%, 10/01/16 819 847
Pool #G10288
6.000%, 09/01/09 123 128
Pool #G10446
6.500%, 02/01/11 188 199
Pool #G30085
7.500%, 10/01/17 717 769
Pool #M90771
5.000%, 12/01/07 2,841 2,919
FHLMC CMO/REMIC
Ser 1093, Cl F
7.500%, 06/15/06 61 61
Ser 1515, Cl G
6.500%, 02/15/08 701 713
Ser 1538, Cl J
6.500%, 06/15/08 160 175
Ser 161, Cl F
9.500%, 06/15/06 283 284
Ser 2280, Cl PC
6.000%, 06/15/27 221 221
Ser 2317, Cl DC
6.050%, 12/15/11 84 84
Ser 2395, Cl GX
6.000%, 04/15/29 776 788
Ser 2412, Cl BK
5.500%, 08/15/27 576 580
Ser 2416, Cl PN
6.000%, 11/15/28 10,000 10,560
Ser 2502, Cl CA
4.250%, 12/15/12 1,400 1,416
Ser 2502, Cl FP (A)
1.770%, 05/15/31 756 757
Ser 2509, Cl EA
4.000%, 12/15/12 2,726 2,764
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
Ser 2515, Cl ED
5.000%, 03/15/17 $ 7,517 $ 7,834
Ser 2541, Cl MC
6.000%, 01/15/29 3,461 3,624
Ser 2577, Cl PM
3.000%, 03/15/21 5,000 5,025
Ser 2581, Cl PW
3.000%, 04/15/16 3,000 3,017
Ser 2583, Cl ND
4.250%, 12/15/10 4,373 4,425
Ser 2586, Cl XG
4.000%, 12/15/32 5,081 5,168
Ser 2590, Cl QY
3.750%, 04/15/28 3,686 3,780
Ser 2590, Cl UL
3.750%, 03/15/32 9,310 9,441
Ser 2628, Cl PT
3.000%, 12/15/21 5,000 5,006
Ser 2649, Cl PJ
3.500%, 06/15/33 4,814 4,860
FNMA
Pool #250477
6.000%, 01/01/11 102 107
Pool #303096
7.500%, 12/01/09 298 318
Pool #313429
7.000%, 03/01/12 789 839
Pool #334593
7.000%, 05/01/24 50 54
Pool #6222
9.000%, 04/01/16 96 105
Pool #647567
6.000%, 06/01/17 1,218 1,271
Pool #704214
7.500%, 12/01/27 3,177 3,408
Pool #8245
8.000%, 12/01/08 162 173
FNMA CMO/REMIC
Ser G93-31, Cl PK
6.650%, 06/25/21 114 114
Ser 1991-133, Cl Z
8.000%, 09/25/06 470 495
108 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER SHORT DURATION FIXED INCOME FUND
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
Ser 1991-72, Cl G
8.000%, 07/25/06 $ 51 $ 54
Ser 1993-18, Cl PK
6.500%, 02/25/08 711 779
Ser 1993-202, Cl PH
6.500%, 02/25/22 439 442
Ser 1993-80, Cl FA (A)
3.770%, 05/25/23 1,558 1,592
Ser 1994-27, Cl PJ
6.500%, 06/25/23 689 735
Ser 1997-81, Cl PC
5.000%, 04/18/27 1,353 1,384
Ser 1999-15, Cl C
6.250%, 01/25/27 184 184
Ser 1999-15, Cl PC
6.000%, 09/25/18 135 143
Ser 2001-28, Cl A
6.000%, 02/25/29 2,043 2,078
Ser 2001-41, Cl BA
6.000%, 06/25/28 389 392
Ser 2001-6, Cl AD
5.750%, 11/25/28 970 983
Ser 2001-68, Cl JL
5.500%, 05/25/23 7,000 7,310
Ser 2002-36, Cl HP
6.500%, 12/25/29 812 826
Ser 2002-37, Cl AC
6.000%, 04/25/29 7 7
Ser 2002-48, Cl GC
5.000%, 08/25/25 5,000 5,033
Ser 2002-60, Cl F1 (A)
1.520%, 06/25/32 3,351 3,361
Ser 2002-72, Cl A
5.000%, 10/25/15 2,362 2,412
Ser 2003-30, Cl MB
4.000%, 03/25/33 3,000 2,937
Ser 2003-33, Cl PC
4.500%, 03/25/27 7,000 7,136
Ser 2003-42, Cl CA
4.000%, 05/25/33 4,311 4,401
Ser 2003-47, Cl PB
4.000%, 08/25/26 3,000 3,068
Ser 2003-7, Cl PA
4.500%, 03/25/20 2,000 2,055
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
GNMA
Pool #2707
5.500%, 01/20/14 $ 33 $ 34
Pool #2802
5.500%, 07/20/14 25 26
Pool #2843
5.500%, 11/20/14 443 462
Pool #344233
8.000%, 02/15/23 333 363
Pool #345123
8.000%, 12/15/23 481 525
Pool #351122
6.500%, 07/15/08 112 119
Pool #357343
6.500%, 10/15/08 57 61
Pool #462486
6.500%, 01/15/13 215 228
Pool #569337
6.500%, 04/15/22 228 241
Pool #578189
6.000%, 02/15/32 118 122
Pool #68224
8.000%, 06/15/12 290 316
Pool #780322
8.000%, 11/15/22 400 437
Pool #780327
8.000%, 11/15/17 172 188
Pool #780769
7.500%, 04/15/13 3,000 3,203
Pool #814
8.000%, 08/20/17 388 422
Pool #8426 (A)
5.625%, 11/20/18 64 67
GNMA CMO/REMIC
Ser 2002-13, Cl A
6.000%, 10/16/30 2,642 2,716
Ser 2002-17, Cl A
6.000%, 08/20/25 883 891
Ser 2002-58, Cl FA (A)
1.420%, 02/17/30 948 949
- --------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT
MORTGAGE-BACKED OBLIGATIONS
(COST $141,551) 143,177
- --------------------------------------------------------------------------------
TURNER FUNDS 2003 ANNUAL REPORT | 109
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER SHORT DURATION FIXED INCOME FUND
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS--10.8%
- --------------------------------------------------------------------------------
FHLB, Ser 7T09
4.650%, 12/04/09 $ 1,250 $ 1,256
Ser DU07
2.840%, 02/28/07 6,250 6,268
FHLMC
2.500%, 09/26/06 1,000 1,004
FHLMC, MTN (B)
2.125%, 06/16/10 2,500 2,488
FNMA
2.750%, 11/21/06 7,500 7,517
SLMA (A)
1.320%, 09/15/05 9,000 9,018
- --------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $27,548) 27,551
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS--10.1%
- --------------------------------------------------------------------------------
U.S. Treasury Notes
4.750%, 11/15/08 5,000 5,446
2.375%, 08/15/06 15,000 15,208
2.000%, 08/31/05 5,000 5,054
- --------------------------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATIONS
(COST $25,496) 25,708
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS--7.8%
- --------------------------------------------------------------------------------
AUTOMOTIVE & TRUCK PARTS--1.0%
- --------------------------------------------------------------------------------
General Motors Acceptance
6.125%, 09/15/06 2,500 2,656
---------
Total Automotive & truck parts 2,656
---------
CHEMICAL MANUFACTURING--1.2%
- --------------------------------------------------------------------------------
Dow Chemical
5.250%, 05/14/04 3,000 3,053
---------
Total Chemical manufacturing 3,053
---------
- --------------------------------------------------------------------------------
ELECTRICAL PRODUCTS & SERVICES--2.4%
- --------------------------------------------------------------------------------
Honeywell
7.000%, 03/15/07 2,000 2,277
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
National Rural Utilities,
Ser C, MTN#
6.500%, 03/01/07 $3,500 $ 3,916
---------
Total Electrical products & services 6,193
---------
- --------------------------------------------------------------------------------
FINANCIAL SERVICES--2.7%
- --------------------------------------------------------------------------------
American General Finance,
Ser F, MTN
5.875%, 07/14/06 1,975 2,158
Banc One
2.625%, 06/30/08 1,500 1,454
Credit Suisse First Boston
4.625%, 01/15/08 1,500 1,580
Morgan Stanley
6.500%, 11/01/05 1,475 1,612
---------
Total Financial services 6,804
---------
- --------------------------------------------------------------------------------
LEASING & RENTALS--0.4%
- --------------------------------------------------------------------------------
International Leasing Finance
2.950%, 05/23/06 1,000 1,011
---------
Total Leasing & rentals 1,011
---------
- --------------------------------------------------------------------------------
PAINT, COATING & ADHESIVE MANUFACTURING--0.1%
- --------------------------------------------------------------------------------
Sherwin-Williams
6.850%, 02/01/07 240 272
---------
Total Paint, coating & adhesive
manufacturing 272
---------
- --------------------------------------------------------------------------------
TOTAL CORPORATE OBLIGATIONS
(COST $19,846) 19,989
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--6.4%
- --------------------------------------------------------------------------------
AUTOMOTIVE--0.7%
- --------------------------------------------------------------------------------
Americredit Automobile Receivables Trust,
Ser 2001-A, Cl A4 (A)
1.360%, 12/12/07 1,796 1,797
---------
Total Automotive 1,797
---------
- --------------------------------------------------------------------------------
110 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENT OF NET ASSETS
TURNER SHORT DURATION FIXED INCOME FUND
Face Amount Value
(000) (000)
- --------------------------------------------------------------------------------
CREDIT CARDS--1.7%
- --------------------------------------------------------------------------------
Citibank Credit Card Issuance Trust,
Ser 2001-A6, Cl A6
5.650%, 06/16/08 $1,875 $ 2,038
Discover Card Master Trust I,
Ser 2000-9, Cl A
6.350%, 07/15/08 150 164
Saks Credit Card Master Trust,
Ser 2001-2, Cl A (A)
1.360%, 12/15/09 2,000 2,011
---------
Total Credit cards 4,213
---------
- --------------------------------------------------------------------------------
MORTGAGE RELATED--3.1%
- --------------------------------------------------------------------------------
CIT Equipment Collateral,
Ser 2002-VT1, Cl A2
2.900%, 06/21/04 80 80
Countrywide Home Loans,
Ser 1999-3, Cl A2
6.050%, 04/25/29 1,634 1,640
Goldman Sachs Mortgage Securities II,
Ser 1998-C1, Cl A1
6.060%, 10/18/30 600 632
Morgan Stanley Capital I,
Ser 1998-XL1, Cl A2
6.450%, 06/03/30 2,865 3,075
Residential Funding Mortgage Securities,
Ser 1992-S39, Cl A8
7.500%, 11/25/07 154 155
Salomon Brothers Mortgage Securities VII,
Ser 2003-NBC1, Cl AV4 (A)
5.252%, 03/25/33 2,287 2,374
---------
Total Mortgage related 7,956
---------
- --------------------------------------------------------------------------------
OTHER--0.9%
- --------------------------------------------------------------------------------
Peco Energy Transition Trust,
Ser 1999-A, Cl A6
6.050%, 03/01/09 125 138
Ser 1999-A, Cl A7
6.130%, 03/01/09 1,875 2,104
---------
Total Other 2,242
---------
- --------------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(COST $15,674) 16,208
- --------------------------------------------------------------------------------
Shares/Face Value
Amount (000) (000)
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENT HELD AS COLLATERAL FOR LOANED SECURITIES--0.2%
- --------------------------------------------------------------------------------
Boston Global Investment Trust--
Quality Portfolio 575,000 $575
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT HELD AS COLLATERAL
FOR LOANED SECURITIES (COST $575) 575
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT--8.6%
- --------------------------------------------------------------------------------
ABN-Amro (C)
1.040%, dated 09/30/03, matures
10/01/03, repurchase price
$21,921,360 (collateralized by
U.S. Government obligations,
total market value
$22,359,894) $21,921 21,921
- --------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $21,921) 21,921
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--100.0%
(COST $252,611) 255,129
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET--0.0%
- --------------------------------------------------------------------------------
Obligation to return securities
lending collateral (575)
Receivable from investment adviser 19
Payable due to administrator (30)
Payable to shareholder servicing agent (1)
Other assets and liabilities, net 476
- --------------------------------------------------------------------------------
TOTAL OTHER ASSETS AND LIABILITIES, NET (111)
- --------------------------------------------------------------------------------
TURNER FUNDS 2003 ANNUAL REPORT | 111
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS
TURNER SHORT DURATION FIXED INCOME FUND
Value
(000)
- --------------------------------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------------------------------
Portfolio capital of Class I Shares
(unlimited authorization -- no par value)
based on 24,934,697 outstanding shares
of beneficial interest $ 252,515
Portfolio capital of Class II Shares
(unlimited authorization -- no par value)
based on 222,341 outstanding shares
of beneficial interest 1,959
Distributions in excess of
net investment income (22)
Accumulated net realized loss
on investments (1,952)
Net unrealized appreciation
on investments 2,518
- --------------------------------------------------------------------------------
TOTAL NET ASSETS--100% $255,018
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS I SHARES
($252,771,754 / 24,934,697 SHARES) $10.14
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE--CLASS II SHARES
($2,245,921 / 222,341 SHARES) $10.10
- --------------------------------------------------------------------------------
# Security fully or partially on loan at September 30, 2003 (see note 10 in
notes to financial statements). The total value of the security on loan at
September 30, 2003, was $559,365.
(A) Variable rate security -- the rate reflected is the rate in effect on
September 30, 2003.
(B) Delayed interest (step-bonds) - the interest rate disclosed represents
the effective yield at time of purchase.
(C) Tri-party repurchase agreement
Cl - Class
CMO - Collateralized mortgage obligation
FHLMC - Federal home loan mortgage corporation
FHLB - Federal home loan bank
FNMA - Federal national mortgage association
GNMA - Government national mortgage association
MTN - Medium term note
REMIC - Real estate mortgage investment conduit
Ser - Series
SLMA - Student loan marketing association
The accompanying notes are an integral part of the financial statements.
112 | TURNER FUNDS 2003 ANNUAL REPORT
STATEMENTS OF ASSETS AND LIABILITIES (000)
Turner
Large Cap Growth Turner
Opportunities Small Cap
Fund Equity Fund
------------------------------------------------------
09/30/03 09/30/03
- -------------------------------------------------------------------------------------------------------------------------------
Assets:
- -------------------------------------------------------------------------------------------------------------------------------
Investment securities at cost $ 3,259 $10,687
===============================================================================================================================
Investment securities at value $ 3,635 $12,090
Receivable for investment securities sold 201 435
Receivable for capital shares sold 49 692
Receivable for dividend and interest income 1 5
Receivable due from investment adviser -- 3
- -------------------------------------------------------------------------------------------------------------------------------
Total assets 3,886 13,225
===============================================================================================================================
Liabilities:
Payable for investment securities purchased 275 309
Payable for capital shares redeemed 49 20
Other accrued expenses 7 16
Payable due to investment adviser 3 --
Payable due to administrator 1 1
Payable due to distributor(1) -- 2
Obligation to return securities lending collateral -- 320
- -------------------------------------------------------------------------------------------------------------------------------
Total liabilities 335 668
- -------------------------------------------------------------------------------------------------------------------------------
Total net assets $ 3,551 $12,557
===============================================================================================================================
Net assets:
Portfolio capital, Class I Shares $ 16,790 $ --
Portfolio capital, Class II Shares -- 10,421
Accumulated net realized gain (loss) on investments (13,615) 733
Net unrealized appreciation on investments 376 1,403
- -------------------------------------------------------------------------------------------------------------------------------
Total net assets $ 3,551 $12,557
===============================================================================================================================
Outstanding shares of beneficial interest:(2)
Class I Shares(3) 379,599 n/a
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, offering and redemption
price per share, Class I Shares $ 9.35 n/a
===============================================================================================================================
Outstanding shares of beneficial interest:(2)
Class II Shares(3) n/a 1,023,162
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, offering and redemption
price per share, Class II Shares n/a $ 12.27
===============================================================================================================================
(1) Attributable to Class II Shares only.
(2) Unlimited authorization-- no par value.
(3) Shares have not been rounded.
Amounts designated as "--" are either $0 or have been rounded to $0
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2003 ANNUAL REPORT 113
FINANCIAL STATEMENTS
STATEMENTS OF OPERATIONS (000)
Turner
Turner Large Cap
Disciplined Growth Turner Turner Turner
Large Cap Opportunities Midcap Small Cap Micro Cap
Growth Fund Fund Growth Fund Growth Fund Growth Fund
- ---------------------------------------------------------------------------------------------------------------------------------
year ended year ended year ended year ended year ended
9/30/03 9/30/03 9/30/03 9/30/03 9/30/03
- ---------------------------------------------------------------------------------------------------------------------------------
Investment Income:
Dividend $ 523 $ 13 $ 1,374 $ 543 $ 733
Interest 7 1 101 35 250
Securities lending 1 1 264 174 163
Foreign taxes withheld (2) -- (3) (2) (5)
- ---------------------------------------------------------------------------------------------------------------------------------
Total Investment Income 529 15 1,736 750 1,141
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment advisory fees 408 23 4,551 1,614 1,932
Administrator fees 98 4 875 233 279
Transfer agent fees 33 21 1,118 229 352
Printing fees 25 1 226 57 72
Custodian fees 20 7 111 49 40
Professional fees 18 (11) 154 39 49
Registration fees 14 1 144 41 44
Trustee fees 3 -- 22 6 7
Distribution fees(1) -- -- 1 -- --
Shareholder service fees(1) -- -- 1 -- --
Insurance and other fees 40 -- 32 10 13
- ---------------------------------------------------------------------------------------------------------------------------------
Total expenses 659 46 7,235 2,278 2,788
Less:
Investment advisory fees waived (149) (3) -- (153) (26)
Reimbursements from adviser -- -- -- -- --
Directed brokerage -- (5) (229) (107) (58)
- ---------------------------------------------------------------------------------------------------------------------------------
Net expenses 510 38 7,006 2,018 2,704
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 19 (23) (5,270) (1,268) (1,563)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from
securities sold 5,005 347 70,989 21,681 17,304
Net change in unrealized
appreciation of
investment securities 13,660 724 145,875 45,503 37,172
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
on investments 18,665 1,071 216,864 67,184 54,476
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting
from operations $18,684 $1,048 $211,594 $65,916 $52,913
=================================================================================================================================
STATEMENTS OF OPERATIONS (000)
Turner Turner Turner Turner
Large Cap Core Value Small Cap Small Cap Value
Value Fund Fund Value Fund Opportunities Fund
- -------------------------------------------------------------------------------------------------------------------------
year ended year ended year ended year ended
9/30/03 9/30/03 9/30/03 9/30/03
- -------------------------------------------------------------------------------------------------------------------------
Investment Income:
Dividend $ 88 $ 685 $ 5,007 $ 18
Interest 1 15 100 1
Securities lending 1 1 177 1
Foreign taxes withheld -- (8) -- --
- -------------------------------------------------------------------------------------------------------------------------
Total Investment Income 90 693 5,284 20
- -------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment advisory fees 33 329 3,290 17
Administrator fees 6 64 559 3
Transfer agent fees 27 57 598 27
Printing fees 2 17 173 1
Custodian fees 4 9 55 12
Professional fees 1 12 110 --
Registration fees 1 11 108 --
Trustee fees -- 2 15 --
Distribution fees(1) -- -- -- 4
Shareholder service fees(1) -- -- -- --
Insurance and other fees 1 3 24 --
- -------------------------------------------------------------------------------------------------------------------------
Total expenses 75 504 4,932 64
Less:
Investment advisory fees waived (24) -- -- (17)
Reimbursements from adviser -- -- -- (22)
Directed brokerage -- -- -- (1)
- -------------------------------------------------------------------------------------------------------------------------
Net expenses 51 504 4,932 24
- -------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 39 189 352 (4)
- -------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from
securities sold (265) 2,570 (43,910) 129
Net change in unrealized
appreciation of
investment securities 1,138 6,105 126,137 420
- -------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
on investments 873 8,675 82,227 549
- -------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting
from operations $ 912 $8,864 $ 82,579 $545
=========================================================================================================================
STATEMENTS OF OPERATIONS (000)
Turner
Turner Turner Concentrated
Small Cap Technology Growth
Equity Fund Fund Fund
- ---------------------------------------------------------------------------------------
year ended year ended year ended
9/30/03 9/30/03 9/30/03
- ---------------------------------------------------------------------------------------
Investment Income:
Dividend $ 91 $ 8 $ 105
Interest 6 -- 8
Securities lending 1 17 1
Foreign taxes withheld -- (1) --
- ---------------------------------------------------------------------------------------
Total Investment Income 98 24 114
- ---------------------------------------------------------------------------------------
Expenses:
Investment advisory fees 87 94 379
Administrator fees 13 22 50
Transfer agent fees 36 83 75
Printing fees 3 5 12
Custodian fees 22 10 18
Professional fees 3 3 8
Registration fees 1 4 10
Trustee fees -- 1 1
Distribution fees(1) 23 -- --
Shareholder service fees(1) -- -- --
Insurance and other fees 1 1 2
- ---------------------------------------------------------------------------------------
Total expenses 189 223 555
Less:
Investment advisory fees waived (63) (20) (86)
Reimbursements from adviser -- -- --
Directed brokerage (4) (34) (43)
- ---------------------------------------------------------------------------------------
Net expenses 122 169 426
- ---------------------------------------------------------------------------------------
Net investment income (loss) (24) (145) (312)
- ---------------------------------------------------------------------------------------
Net realized gain (loss) from
securities sold 922 5,352 11,689
Net change in unrealized
appreciation of
investment securities 1,619 2,787 2,298
- ---------------------------------------------------------------------------------------
Net realized and unrealized gain
on investments 2,541 8,139 13,987
- ---------------------------------------------------------------------------------------
Net increase in net assets resulting
from operations $2,517 $7,994 $13,675
=======================================================================================
(1) Attributable to Class II Shares only.
Amounts designated as "--" are either $0 or have been rounded to $0
The accompanying notes are an integral part of the financial statements.
114 & 115 TURNER FUNDS 2003 ANNUAL REPORT
FINANCIAL STATEMENTS
STATEMENTS OF OPERATIONS (000)
Turner Turner
Turner Turner Healthcare & Tax Managed
New Enterprise Financial Services Biotechnology U.S. Equity
Fund Fund Fund Fund
- ----------------------------------------------------------------------------------------------------------------------------------
year ended year ended year ended year ended
9/30/03 9/30/03 9/30/03 9/30/03
- ----------------------------------------------------------------------------------------------------------------------------------
Investment Income:
Dividend $ 3 $ 168 $ 29 $ 46
Interest 2 4 5 1
Securities lending 7 1 1 1
Foreign taxes withheld -- (1) -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Total Investment Income 12 172 35 48
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment advisory fees 54 168 84 39
Administrator fees 9 19 17 8
Transfer agent fees 41 44 43 37
Custodian fees 10 -- 7 10
Printing fees 2 5 4 2
Professional fees 1 6 3 1
Registration fees 1 2 2 1
Trustee fees -- -- -- --
Shareholder service fees(1) -- -- 29 13
Insurance and other fees -- 1 1 1
- ----------------------------------------------------------------------------------------------------------------------------------
Total expenses 118 245 190 112
Less:
Investment advisory fees waived (38) (43) (18) (39)
Reimbursements from adviser -- -- -- (7)
Directed brokerage (11) (1) (1) --
- ----------------------------------------------------------------------------------------------------------------------------------
Net expenses 69 201 171 66
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (57) (29) (136) (18)
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from
securities sold 2,039 1,106 1,068 91
Net realized loss from written option
contracts -- -- -- --
Net change in unrealized appreciation
(depreciation) of investment
securities 1,041 3,052 1,770 1,212
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments 3,080 4,158 2,838 1,303
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations $3,023 $4,129 $2,702 $1,285
==================================================================================================================================
STATEMENTS OF OPERATIONS (000)
Turner Turner Turner
Strategic Value and Core Fixed Total Return Turner
High Income Income Fixed Income High Yield
Fund Fund Fund Fund
- ---------------------------------------------------------------------------------------------------------------------------------
10/31/02(2) thru year ended year ended year ended
9/30/03 9/30/03 9/30/03 9/30/03
- ---------------------------------------------------------------------------------------------------------------------------------
Investment Income:
Dividend $ 4* $ -- $ -- $ 10
Interest -- 2,139 84 785
Securities lending -- 17 1 1
Foreign taxes withheld -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total Investment Income 4 2,156 85 796
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment advisory fees -- 193 19 52
Administrator fees -- 62 6 14
Transfer agent fees 24 62 23 27
Custodian fees -- 9 4 6
Printing fees -- 17 2 3
Professional fees -- 12 1 2
Registration fees -- 9 2 2
Trustee fees -- 2 -- --
Shareholder service fees(1) -- -- -- --
Insurance and other fees -- 8 3 2
- ---------------------------------------------------------------------------------------------------------------------------------
Total expenses 24 374 60 108
Less:
Investment advisory fees waived -- (38) (19) (37)
Reimbursements from adviser (24) -- (24) --
Directed brokerage -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Net expenses -- 336 17 71
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 4 1,820 68 725
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from
securities sold (1)* (236) (100) 231
Net realized loss from written option
contracts -- -- (34) --
Net change in unrealized appreciation
(depreciation) of investment
securities 22* (114) (19) 889
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments 21 (350) (153) 1,120
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations $25 $1,470 $(85) $1,845
=================================================================================================================================
STATEMENTS OF OPERATIONS (000)
Turner Ultra Turner
Short Duration Short Duration
Fixed Income Fixed Income
Fund Fund
- -----------------------------------------------------------------------------------
year ended year ended
9/30/03 9/30/03
- -----------------------------------------------------------------------------------
Investment Income:
Dividend $ 1 $ 2
Interest 6,627 5,946
Securities lending 1 1
Foreign taxes withheld -- --
- -----------------------------------------------------------------------------------
Total Investment Income 6,629 5,949
- -----------------------------------------------------------------------------------
Expenses:
Investment advisory fees 1,393 723
Administrator fees 805 418
Transfer agent fees 646 357
Custodian fees 89 45
Printing fees 215 112
Professional fees 158 81
Registration fees 89 48
Trustee fees 26 14
Shareholder service fees(1) 27 16
Insurance and other fees 18 10
- -----------------------------------------------------------------------------------
Total expenses 3,466 1,824
Less:
Investment advisory fees waived (1,155) (623)
Reimbursements from adviser -- --
Directed brokerage -- --
- -----------------------------------------------------------------------------------
Net expenses 2,311 1,201
- -----------------------------------------------------------------------------------
Net investment income (loss) 4,318 4,748
- -----------------------------------------------------------------------------------
Net realized gain (loss) from
securities sold (232) 1,172
Net realized loss from written option
contracts -- --
Net change in unrealized appreciation
(depreciation) of investment
securities 2,667 (128)
- -----------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments 2,435 1,044
- -----------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations $6,753 $5,792
===================================================================================
(1) Attributable to Class II Shares only.
(2) Commenced operations on October 31, 2002.
* Dividend income, net realized loss from securities sold and net unrealized
appreciation of investment securities are attributable to the underlying
investments in affiliated investment companies.
Amounts designated as "--" are either $0 or have been rounded to $0
The accompanying notes are an integral part of the financial statements.
116 & 117 TURNER FUNDS 2003 ANNUAL REPORT
FINANCIAL STATEMENTS
STATEMENTS OF CHANGES IN NET ASSETS (000)
Turner Turner Turner
Disciplined Large Large Cap Growth Midcap
Cap Growth Fund Opportunities Fund Growth Fund
- --------------------------------------------------------------------------------------------------------------------------------
year year year year year year
ended ended ended ended ended ended
9/30/03 9/30/02 9/30/03 9/30/02 9/30/03 9/30/02
- --------------------------------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income (loss) $ 19 $ 3 $ (23) $ (57) $ (5,270) $ (5,767)
Net realized gain (loss) on
securities sold 5,005 (19,562) 347 (2,674) 70,989 (182,105)
Net change in unrealized
appreciation (depreciation)
of investments 13,660 1,526 724 1,182 145,875 19,092
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets resulting
from operations 18,684 (18,033) 1,048 (1,549) 211,594 (168,780)
- --------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
Net investment income
Class I Shares (3) -- -- -- -- --
Realized capital gains
Class I Shares -- -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions (3) -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Class I Shares
Proceeds from shares issued 45,621 70,230 2,060 3,377(1) 383,552 904,489
Proceeds from shares issued in lieu
of cash distributions 3 -- -- -- -- --
Cost of shares redeemed (44,860) (45,274) (4,404) (6,757)(1) (382,529) (770,265)
- --------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class I Shares transactions 764 24,956 (2,344) (3,380) 1,023 134,224
- --------------------------------------------------------------------------------------------------------------------------------
Class II Shares
Proceeds from shares issued -- -- -- -- 281 148
Cost of shares redeemed -- -- -- -- (33) (14)
- --------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from
Class II Shares transactions -- -- -- -- 248 134
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from capital share transactions 764 24,956 (2,344) (3,380) 1,271 134,358
- --------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease)
in net assets 19,445 6,923 (1,296) (4,929) 212,865 (34,422)
- --------------------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of year 59,971 53,048 4,847 9,776 561,346 595,768
- --------------------------------------------------------------------------------------------------------------------------------
End of year $ 79,416 $ 59,971 $3,551 $ 4,847 $774,211 $ 561,346
================================================================================================================================
Shares issued and redeemed:
Class I Shares
Issued 11,156 15,959 264 399(2) 23,309 47,107
Issued in lieu of cash distributions 1 -- -- -- -- --
Redeemed (11,102) (10,085) (619) (804)(2) (24,432) (40,620)
- --------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Class I Shares 55 5,874 (355) (405) (1,123) 6,487
- --------------------------------------------------------------------------------------------------------------------------------
Class II Shares
Issued -- -- -- -- 17 8
Redeemed -- -- -- -- (2) (1)
- --------------------------------------------------------------------------------------------------------------------------------
Increase in Class II Shares -- -- -- -- 15 7
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares 55 5,874 (355) (405) (1,108) 6,494
================================================================================================================================
STATEMENTS OF CHANGES IN NET ASSETS (000)
Turner Turner
Small Cap Micro Cap
Growth Fund Growth Fund
- -------------------------------------------------------------------------------------------------------------
year year year year
ended ended ended ended
9/30/03 9/30/02 9/30/03 9/30/02
- -------------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income (loss) $ (1,268) $ (2,258) $ (1,563) $ (1,827)
Net realized gain (loss) on
securities sold 21,681 (51,922) 17,304 (11,169)
Net change in unrealized
appreciation (depreciation)
of investments 45,503 27,180 37,172 8,142
- -------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets resulting
from operations 65,916 (27,000) 52,913 (4,854)
- -------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
Net investment income
Class I Shares -- -- -- --
Realized capital gains
Class I Shares -- -- -- --
- -------------------------------------------------------------------------------------------------------------
Total distributions -- -- -- --
- -------------------------------------------------------------------------------------------------------------
Capital share transactions:
Class I Shares
Proceeds from shares issued 99,160 115,569 99,782 101,795
Proceeds from shares issued in lieu
of cash distributions -- -- -- --
Cost of shares redeemed (116,466) (186,264) (76,985) (78,821)
- -------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class I Shares transactions (17,306) (70,695) 22,797 22,974
- -------------------------------------------------------------------------------------------------------------
Class II Shares
Proceeds from shares issued -- -- -- --
Cost of shares redeemed -- -- -- --
- -------------------------------------------------------------------------------------------------------------
Increase in net assets from
Class II Shares transactions -- -- -- --
- -------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from capital share transactions (17,306) (70,695) 22,797 22,974
- -------------------------------------------------------------------------------------------------------------
Total increase (decrease)
in net assets 48,610 (97,695) 75,710 18,120
- -------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of year 144,181 241,876 178,130 160,010
- -------------------------------------------------------------------------------------------------------------
End of year $192,791 $144,181 $253,840 $178,130
=============================================================================================================
Shares issued and redeemed:
Class I Shares
Issued 6,123 6,604 2,849 2,683
Issued in lieu of cash distributions -- -- -- --
Redeemed (7,335) (10,641) (2,273) (2,111)
- -------------------------------------------------------------------------------------------------------------
Increase (decrease) in Class I Shares (1,212) (4,037) 576 572
- -------------------------------------------------------------------------------------------------------------
Class II Shares
Issued -- -- -- --
Redeemed -- -- -- --
- -------------------------------------------------------------------------------------------------------------
Increase in Class II Shares -- -- -- --
- -------------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares (1,212) (4,037) 576 572
=============================================================================================================
STATEMENTS OF CHANGES IN NET ASSETS (000)
Turner Turner
Large Cap Core Value
Value Fund Fund
- --------------------------------------------------------------------------------------------------------
year year year year
ended ended ended ended
9/30/03 9/30/02 9/30/03 9/30/02
- --------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income (loss) $ 39 $ 56 $ 189 $ 272
Net realized gain (loss) on
securities sold (265) (475) 2,570 (153)
Net change in unrealized
appreciation (depreciation)
of investments 1,138 (634) 6,105 (3,873)
- --------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets resulting
from operations 912 (1,053) 8,864 (3,754)
- --------------------------------------------------------------------------------------------------------
Distributions to shareholders:
Net investment income
Class I Shares (39) (55) (189) (280)
Realized capital gains
Class I Shares -- -- -- (7,197)
- --------------------------------------------------------------------------------------------------------
Total distributions (39) (55) (189) (7,477)
- --------------------------------------------------------------------------------------------------------
Capital share transactions:
Class I Shares
Proceeds from shares issued 642 870 15,143 19,609
Proceeds from shares issued in lieu
of cash distributions 37 53 178 6,897
Cost of shares redeemed (1,015) (712) (20,894) (13,419)
- --------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class I Shares transactions (336) 211 (5,573) 13,087
- --------------------------------------------------------------------------------------------------------
Class II Shares
Proceeds from shares issued -- -- -- --
Cost of shares redeemed -- -- -- --
- --------------------------------------------------------------------------------------------------------
Increase in net assets from
Class II Shares transactions -- -- -- --
- --------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from capital share transactions (336) 211 (5,573) 13,087
- --------------------------------------------------------------------------------------------------------
Total increase (decrease)
in net assets 537 (897) 3,102 1,856
- --------------------------------------------------------------------------------------------------------
Net assets:
Beginning of year 4,255 5,152 43,571 41,715
- --------------------------------------------------------------------------------------------------------
End of year $4,792 $4,255 $46,673 $43,571
========================================================================================================
Shares issued and redeemed:
Class I Shares
Issued 71 88 1,199 1,391
Issued in lieu of cash distributions 4 6 14 492
Redeemed (116) (73) (1,643) (972)
- --------------------------------------------------------------------------------------------------------
Increase (decrease) in Class I Shares (41) 21 (430) 911
- --------------------------------------------------------------------------------------------------------
Class II Shares
Issued -- -- -- --
Redeemed -- -- -- --
- --------------------------------------------------------------------------------------------------------
Increase in Class II Shares -- -- -- --
- --------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares (41) 21 (430) 911
========================================================================================================
(1) Includes subscriptions of $200,636 of Class B; and redemptions of $28,961 of
Class A, $188,500 of Class B and $3,259 of Class C of the Mercury Select Growth
Fund (see Note 9).
(2) Includes subscriptions of 71,962 shares of Class B; and redemptions of
19,834 shares of Class A, 73,170 shares of Class B and 2,345 shares of Class C
at each respective NAV of the Mercury Select Growth Fund (see Note 9).
Amounts designated as "--" are either $0 or have been rounded to $0
The accompanying notes are an integral part of the financial statements.
118 & 119 TURNER FUNDS 2003 ANNUAL REPORT
FINANCIAL STATEMENTS
STATEMENTS OF CHANGES IN NET ASSETS (000)
Turner Turner Turner
Small Cap Small Cap Value Small Cap
Value Fund Opportunities Fund Equity Fund
- ---------------------------------------------------------------------------------------------------------------------------------
year year year 3/4/02(1) year 3/4/02(1)
ended ended ended thru ended thru
9/30/03 9/30/02 9/30/03 9/30/02 9/30/03 9/30/02
- ---------------------------------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income (loss) $ 352 $ 1,462 $ (4) $ 1 $ (24) $ (1)
Net realized gain (loss) on
securities sold (43,910) (19,253) 129 (71) 922 (159)
Net change in unrealized appreciation
(depreciation) of investments 126,137 (80,240) 420 (66) 1,619 (216)
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets resulting
from operations 82,579 (98,031) 545 (136) 2,517 (376)
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
Net investment income
Class I Shares (315) (1,431) -- -- -- --
Class II Shares -- -- (1) -- (6) --
Realized capital gains
Class I Shares -- -- -- -- -- --
Class II Shares -- -- -- -- -- --
Return of capital
Class I Shares (109) -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions (424) (1,431) (1) -- (6) --
- ---------------------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Class I Shares
Proceeds from shares issued 144,143 676,750 -- -- -- --
Proceeds from fund merger (note 9) -- -- -- -- -- --
Proceeds from shares issued in lieu
of cash distributions 389 1,241 -- -- -- --
Cost of shares redeemed (296,317) (292,117) -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from Class I Shares transactions (151,785) 385,874 -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Class II Shares
Proceeds from shares issued -- -- 5,909 1,791 8,457 7,943
Proceeds from shares issued in
lieu of cash distributions -- -- 1 -- 6 --
Cost of shares redeemed -- -- (1,627) (742) (5,677) (307)
- ---------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from
Class II Shares transactions -- -- 4,283 1,049 2,786 7,636
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from capital share transactions (151,785) 385,874 4,283 1,049 2,786 7,636
- ---------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease)
in net assets (69,630) 286,412 4,827 913 5,297 7,260
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of year/period 464,576 178,164 913 -- 7,260 --
- ---------------------------------------------------------------------------------------------------------------------------------
End of year/period $394,946 $464,576 $5,740 $ 913 $12,557 $7,260
=================================================================================================================================
Shares issued and redeemed:
Class I Shares
Issued 8,838 35,765 -- -- -- --
Issued in connection with
fund merger (note 9) -- -- -- -- -- --
Issued in lieu of cash distributions 26 64 -- -- -- --
Redeemed (18,889) (15,941) -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Class I Shares (10,025) 19,888 -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Class II Shares
Issued -- -- 500 169 825 811
Issued in lieu of cash distributions -- -- -- -- 1 --
Redeemed -- -- (147) (71) (583) (31)
- ---------------------------------------------------------------------------------------------------------------------------------
Increase in Class II Shares -- -- 353 98 243 780
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares (10,025) 19,888 353 98 243 780
=================================================================================================================================
STATEMENTS OF CHANGES IN NET ASSETS (000)
Turner Turner Turner
Technology Concentrated New
Fund Growth Fund Enterprise Fund
- --------------------------------------------------------------------------------------------------------------------------------
year year year year year year
ended ended ended ended ended ended
9/30/03 9/30/02 9/30/03 9/30/02 9/30/03 9/30/02
- --------------------------------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income (loss) $ (145) $ (213) $ (312) $ (18) $ (57) $ (60)
Net realized gain (loss) on
securities sold 5,352 (14,159) 11,689 (26,527) 2,039 (2,041)
Net change in unrealized appreciation
(depreciation) of investments 2,787 7,594 2,298 12,049 1,041 617
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets resulting
from operations 7,994 (6,778) 13,675 (14,496) 3,023 (1,484)
- --------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
Net investment income
Class I Shares -- -- -- -- -- --
Class II Shares -- -- -- -- -- --
Realized capital gains
Class I Shares -- -- -- -- -- --
Class II Shares -- -- -- -- -- --
Return of capital
Class I Shares -- -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions -- -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Class I Shares
Proceeds from shares issued 10,933 16,193 17,521 34,709 13,046 3,773
Proceeds from fund merger (note 9) -- -- -- -- -- --
Proceeds from shares issued in lieu
of cash distributions -- -- -- -- -- --
Cost of shares redeemed (10,893) (22,900) (13,374) (47,834) (5,799) (5,235)
- --------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets
from Class I Shares transactions 40 (6,707) 4,147 (13,125) 7,247 (1,462)
- --------------------------------------------------------------------------------------------------------------------------------
Class II Shares
Proceeds from shares issued -- -- -- -- -- --
Proceeds from shares issued in
lieu of cash distributions -- -- -- -- -- --
Cost of shares redeemed -- -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from
Class II Shares transactions -- -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from capital share transactions 40 (6,707) 4,147 (13,125) 7,247 (1,462)
- --------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease)
in net assets 8,034 (13,485) 17,822 (27,621) 10,270 (2,946)
- --------------------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of year/period 11,662 25,147 29,182 56,803 3,198 6,144
- --------------------------------------------------------------------------------------------------------------------------------
End of year/period $19,696 $ 11,662 $47,004 $29,182 $13,468 $3,198
================================================================================================================================
Shares issued and redeemed:
Class I Shares
Issued 2,520 2,572 3,316 5,314 3,150 838
Issued in connection with
fund merger (note 9) -- -- -- -- -- --
Issued in lieu of cash distributions -- -- -- -- -- --
Redeemed (2,659) (3,876) (2,791) (7,930) (1,455) (1,299)
- --------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Class I Shares (139) (1,304) 525 (2,616) 1,695 (461)
- --------------------------------------------------------------------------------------------------------------------------------
Class II Shares
Issued -- -- -- -- -- --
Issued in lieu of cash distributions -- -- -- -- -- --
Redeemed -- -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Increase in Class II Shares -- -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares (139) (1,304) 525 (2,616) 1,695 (461)
================================================================================================================================
STATEMENTS OF CHANGES IN NET ASSETS (000)
Turner
Financial
Services Fund
- --------------------------------------------------------------------------------------
year 11/1/01 5/1/01
ended thru thru
9/30/03 9/30/02(2) 10/31/01(2)
- --------------------------------------------------------------------------------------
Investment activities:
Net investment income (loss) $ (29) $ (56) $ (119)
Net realized gain (loss) on
securities sold 1,106 253 (57)
Net change in unrealized appreciation
(depreciation) of investments 3,052 (1,857) (3,048)
- --------------------------------------------------------------------------------------
Net increase (decrease) in
net assets resulting
from operations 4,129 (1,660) (3,224)
- --------------------------------------------------------------------------------------
Distributions to shareholders:
Net investment income
Class I Shares -- -- --
Class II Shares -- -- --
Realized capital gains
Class I Shares (136) (5,061) --
Class II Shares -- -- --
Return of capital
Class I Shares -- -- --
- --------------------------------------------------------------------------------------
Total distributions (136) (5,061) --
- --------------------------------------------------------------------------------------
Capital share transactions:
Class I Shares
Proceeds from shares issued 3,947 1,422 787
Proceeds from fund merger (note 9) 129 451 --
Proceeds from shares issued in lieu
of cash distributions -- 4,396 --
Cost of shares redeemed (2,909) (2,953) (5,350)
- --------------------------------------------------------------------------------------
Increase (decrease) in net assets
from Class I Shares transactions 1,167 3,316 (4,563)
- --------------------------------------------------------------------------------------
Class II Shares
Proceeds from shares issued -- -- --
Proceeds from shares issued in
lieu of cash distributions -- -- --
Cost of shares redeemed -- -- --
- --------------------------------------------------------------------------------------
Increase in net assets from
Class II Shares transactions -- -- --
- --------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from capital share transactions 1,167 3,316 (4,563)
- --------------------------------------------------------------------------------------
Total increase (decrease)
in net assets 5,160 (3,405) (7,787)
- --------------------------------------------------------------------------------------
Net assets:
Beginning of year/period 12,149 15,554 23,341
- --------------------------------------------------------------------------------------
End of year/period $17,309 $12,149 $15,554
======================================================================================
Shares issued and redeemed:
Class I Shares
Issued 305 116 40
Issued in connection with
fund merger (note 9) -- 37 --
Issued in lieu of cash distributions 12 358 --
Redeemed (246) (242) (288)
- --------------------------------------------------------------------------------------
Increase (decrease) in Class I Shares 71 269 (248)
- --------------------------------------------------------------------------------------
Class II Shares
Issued -- -- --
Issued in lieu of cash distributions -- -- --
Redeemed -- -- --
- --------------------------------------------------------------------------------------
Increase in Class II Shares -- -- --
- --------------------------------------------------------------------------------------
Net increase (decrease) in shares 71 269 (248)
======================================================================================
(1) Commencement of operations.
(2) Reflects operating history of a predecessor mutual fund (see Note 9).
Amounts designated as "--" are either $0 or have been rounded to $0
The accompanying notes are an integral part of the financial statements.
120 & 121 TURNER FUNDS 2003 ANNUAL REPORT
FINANCIAL STATEMENT
STATEMENTS OF CHANGES IN NET ASSETS (000)
Turner Turner Turner
Healthcare & Tax Managed Strategic Value and
Biotechnology U.S. Equity High Income
Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------------------------
year year year year 10/31/02(1)
ended ended ended ended thru
9/30/03 9/30/02 9/30/03 9/30/02 9/30/03
- ------------------------------------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income (loss) $ (136) $ (96) $ (18) $ (21) $ 4*
Net realized gain (loss) on
securities sold and written option
contracts 1,068 (1,146) 91 (2,293) (1)*
Net change in unrealized appreciation
(depreciation) of investments 1,770 (112) 1,212 819 22*
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 2,702 (1,354) 1,285 (1,495) 25
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
Net investment income
Class I Shares -- -- -- -- (4)
Class II Shares -- -- -- -- --
Realized capital gains
Class I Shares -- -- -- -- --
Class II Shares -- (11) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total distributions -- (11) -- -- (4)
- ------------------------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Class I Shares
Proceeds from shares issued -- -- -- -- 912
Proceeds from shares issued in
lieu of cash distributions -- -- -- -- 4
Cost of shares redeemed -- -- -- -- (494)
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class I Shares transactions -- -- -- -- 422
- ------------------------------------------------------------------------------------------------------------------------------------
Class II Shares
Proceeds from shares issued 6,326 13,506 1,071 3,168 --
Proceeds from shares issued in
lieu of cash distributions -- 11 -- -- --
Cost of shares redeemed (3,463) (4,056) (1,575) (3,875) --
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class II Shares transactions 2,863 9,461 (504) (707) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from capital share transactions 2,863 9,461 (504) (707) 422
- ------------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease)
in net assets 5,565 8,096 781 (2,202) 443
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of year/period 9,288 1,192 4,747 6,949 --
- ------------------------------------------------------------------------------------------------------------------------------------
End of year/period $14,853 $ 9,288 $5,528 $ 4,747 $443
====================================================================================================================================
Shares issued and redeemed:
Class I Shares
Issued -- -- -- -- 75
Issued in lieu of cash distributions -- -- -- -- --
Redeemed -- -- -- -- (40)
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Class I Shares -- -- -- -- 35
- ------------------------------------------------------------------------------------------------------------------------------------
Class II Shares
Issued 592 1,219 157 383 --
Issued in lieu of cash distributions -- 1 -- -- --
Redeemed (331) (382) (223) (479) --
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Class II Shares 261 838 (66) (96) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares 261 838 (66) (96) 35
====================================================================================================================================
Turner
Turner Core Total Return Turner
Fixed Income Fixed Income High Yield
Fund Fund Fund
- ----------------------------------------------------------------------------------------------------------------------------
year year year year year year
ended ended ended ended ended ended
9/30/03 9/30/02 9/30/03 9/30/02 9/30/03 9/30/02
- ----------------------------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income (loss) $ 1,820 $ 1,861 $ 68 $ 312 $ 725 $ 1,548
Net realized gain (loss) on
securities sold and written option
contracts (236) 188 (134) 325 231 (5,339)
Net change in unrealized appreciation
(depreciation) of investments (114) 1,193 (19) (205) 889 2,823
- ----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 1,470 3,242 (85) 432 1,845 (968)
- ----------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
Net investment income
Class I Shares (1,934) (1,895) (80) (316) (709) (1,563)
Class II Shares -- -- -- -- -- --
Realized capital gains
Class I Shares (108) -- (231) (296) -- --
Class II Shares -- -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
Total distributions (2,042) (1,895) (311) (612) (709) (1,563)
- ----------------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Class I Shares
Proceeds from shares issued 28,705 46,590 92 5,035 4,524 716
Proceeds from shares issued in
lieu of cash distributions 1,908 1,787 303 605 99 435
Cost of shares redeemed (29,574) (40,874) (8,124) (2,878) (5,783) (3,165)
- ----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class I Shares transactions 1,039 7,503 (7,729) 2,762 (1,160) (2,014)
- ----------------------------------------------------------------------------------------------------------------------------
Class II Shares
Proceeds from shares issued -- -- -- -- -- --
Proceeds from shares issued in
lieu of cash distributions -- -- -- -- -- --
Cost of shares redeemed -- -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class II Shares transactions -- -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from capital share transactions 1,039 7,503 (7,729) 2,762 (1,160) (2,014)
- ----------------------------------------------------------------------------------------------------------------------------
Total increase (decrease)
in net assets 467 8,850 (8,125) 2,582 (24) (4,545)
- ----------------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of year/period 42,924 34,074 8,393 5,811 9,432 13,977
- ----------------------------------------------------------------------------------------------------------------------------
End of year/period $43,391 $42,924 $ 268 $8,393 $9,408 $ 9,432
============================================================================================================================
Shares issued and redeemed:
Class I Shares
Issued 2,758 4,589 8 500 960 135
Issued in lieu of cash distributions 183 175 31 61 21 86
Redeemed (2,836) (4,037) (831) (290) (1,226) (650)
- ----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Class I Shares 105 727 (792) 271 (245) (429)
- ----------------------------------------------------------------------------------------------------------------------------
Class II Shares
Issued -- -- -- -- -- --
Issued in lieu of cash distributions -- -- -- -- -- --
Redeemed -- -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in Class II Shares -- -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares 105 727 (792) 271 (245) (429)
============================================================================================================================
Turner Ultra Turner
Short Duration Short Duration
Fixed Income Fixed Income
Fund Fund
- --------------------------------------------------------------------------------------------------------
year year year year
ended ended ended ended
9/30/03 9/30/02 9/30/03 9/30/02
- --------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income (loss) $ 4,318 $ 5,191 $ 4,748 $ 4,502
Net realized gain (loss) on
securities sold and written option
contracts (232) 755 1,172 1,466
Net change in unrealized appreciation
(depreciation) of investments 2,667 581 (128) 1,047
- --------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 6,753 6,527 5,792 7,015
- --------------------------------------------------------------------------------------------------------
Distributions to shareholders:
Net investment income
Class I Shares (10,253) (5,810) (6,947) (4,648)
Class II Shares (172) (126) (139) (297)
Realized capital gains
Class I Shares (630) -- (1,892) --
Class II Shares (12) -- (60) --
- --------------------------------------------------------------------------------------------------------
Total distributions (11,067) (5,936) (9,038) (4,945)
- --------------------------------------------------------------------------------------------------------
Capital share transactions:
Class I Shares
Proceeds from shares issued 432,951 555,771 148,936 281,024
Proceeds from shares issued in
lieu of cash distributions 10,488 5,632 8,702 4,567
Cost of shares redeemed (446,668) (185,486) (165,718) (91,996)
- --------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class I Shares transactions (3,229) 375,917 (8,080) 193,595
- --------------------------------------------------------------------------------------------------------
Class II Shares
Proceeds from shares issued 19,631 85,748 5,134 3,665
Proceeds from shares issued in
lieu of cash distributions 149 84 194 277
Cost of shares redeemed (22,615) (83,068) (11,350) (3,776)
- --------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class II Shares transactions (2,835) 2,764 (6,022) 166
- --------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from capital share transactions (6,064) 378,681 (14,102) 193,761
- --------------------------------------------------------------------------------------------------------
Total increase (decrease)
in net assets (10,378) 379,272 (17,348) 195,831
- --------------------------------------------------------------------------------------------------------
Net assets:
Beginning of year/period 478,909 99,637 272,366 76,535
- --------------------------------------------------------------------------------------------------------
End of year/period $468,531 $ 478,909 $255,018 $272,366
========================================================================================================
Shares issued and redeemed:
Class I Shares
Issued 42,479 54,413 14,645 27,690
Issued in lieu of cash distributions 1,031 551 857 450
Redeemed (43,959) (18,165) (16,343) (9,097)
- --------------------------------------------------------------------------------------------------------
Increase (decrease) in Class I Shares (449) 36,799 (841) 19,043
- --------------------------------------------------------------------------------------------------------
Class II Shares
Issued 1,914 8,365 508 362
Issued in lieu of cash distributions 15 8 19 28
Redeemed (2,210) (8,103) (1,124) (374)
- --------------------------------------------------------------------------------------------------------
Increase (decrease) in Class II Shares (281) 270 (597) 16
- --------------------------------------------------------------------------------------------------------
Net increase (decrease) in shares (730) 37,069 (1,438) 19,059
========================================================================================================
<FN>
* Dividend income, net realized loss from securities sold and net unrealized appreciation
of investments are attributable to the underlying investments in affiliated investment companies.
(1) Commencement of operations.
Amounts designated as "--" are either $0 or have been rounded to $0
The accompanying notes are an integral part of the financial statements.
</FN>
122 & 123 TURNER FUNDS 2003 ANNUAL REPORT
<page>
FINANCIAL STATEMENTS
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
Realized and
Net asset unrealized Dividends Distributions
value, Net gains from net from Net asset
beginning investment (losses) on investment capital value, end
of period income (loss) investments income gains of period
- ------------------------------------------------------------------------------------------------------------------------------------
Turner Disciplined Large Cap Growth Fund -- Class I Shares
- ----------------------------------------------------------
2003 $ 3.50 -- 1.12 --* -- $ 4.62
2002 $ 4.70 -- (1.20) -- -- $ 3.50
2001 $ 9.81 -- (5.11) -- -- $ 4.70
2000 (1) $10.00 -- (0.19) -- -- $ 9.81
- --------------------------------------------------------------
Turner Large Cap Growth Opportunities Fund-- Class I Shares(2)
- --------------------------------------------------------------
2003 $ 6.59 (0.06) 2.82 -- -- $ 9.35
2002 $ 9.01 (0.08) (2.34) -- -- $ 6.59
2001 $26.20 (0.10)(3) (11.63) -- (5.46) $ 9.01
2000 $18.90 (0.16) 8.94 -- (1.48) $26.20
1999 $13.22 (0.08) 5.76 -- -- $18.90
- --------------------------------------------
Turner Midcap Growth Fund -- Class I Shares
- --------------------------------------------
2003 $13.78 (0.14) (3) 5.90 -- -- $19.54
2002 $17.40 (0.14) (3.48) -- -- $13.78
2001 $46.52 (0.16) (25.89) -- (3.07) $17.40
2000 $25.53 (0.10) 23.79 -- (2.70) $46.52
1999 $13.87 (0.06) 11.72 -- -- $25.53
- --------------------------------------------
Turner Midcap Growth Fund -- Class II Shares
- --------------------------------------------
2003 $13.72 (0.23) (3) 5.87 -- -- $19.36
2002 $17.41 (0.22) (3) (3.47) -- -- $13.72
2001 (5) $17.30 -- 0.11 -- -- $17.41
- ----------------------------------------------
Turner Small Cap Growth Fund -- Class I Shares
- ----------------------------------------------
2003 $12.62 (0.12) 6.38 -- -- $18.88
2002 $15.65 (0.20) (2.83) -- -- $12.62
2001 $44.79 (0.04) (18.63) -- (10.47) $15.65
2000 $34.20 (0.12) 17.89 -- (7.18) $44.79
1999 $21.49 (0.26) 12.97 -- -- $34.20
- ----------------------------------------------
Turner Micro Cap Growth Fund -- Class I Shares
- ----------------------------------------------
2003 $32.04 (0.25) 9.59 -- -- $41.38
2002 $32.08 (0.33) 0.29(6) -- -- $32.04
2001 $45.92 (0.12) (9.02) -- (4.70) $32.08
2000 $21.09 (0.18) 26.52 -- (1.51) $45.92
1999 (7) $ 9.88 (0.05) 11.26 -- -- $21.09
Ratio of net
Net Ratio of Ratio of total investment
assets end net expenses expenses income (loss) Portfolio
Total of period to average to average to average turnover
return (000) net assets++ net assets net assets++ rate+++
- ------------------------------------------------------------------------------------------------------------------------------------
Turner Disciplined Large Cap Growth Fund -- Class I Shares
- ----------------------------------------------------------
2003 32.01% $ 79,416 0.75% 0.97% 0.03% 201.35%
2002 (25.53)% $ 59,971 0.65% 0.90% -- % 272.99%
2001 (52.09)% $ 53,048 0.74% 1.03% (0.14)% 376.49%
2000 (1) (1.90)%+ $ 4,656 0.75% 3.35% (0.14)% 128.14%
- --------------------------------------------------------------
Turner Large Cap Growth Opportunities Fund-- Class I Shares(2)
- --------------------------------------------------------------
2003 41.88% $ 3,551 1.25% 1.53% (0.77)% 282.15%
2002 (26.86)% $ 4,847 1.26%(4) 5.98%(4) (0.71)% 391.98%
2001 (53.71)% $ 9,776 1.25%(4) 3.49%(4) (0.69)% 400.04%
2000 47.49% $ 41,555 0.84%(4) 1.37%(4) (0.71)% 131.19%
1999 42.97% $ 8,459 1.00% 2.41% (0.47)% 370.71%
- --------------------------------------------
Turner Midcap Growth Fund -- Class I Shares
- --------------------------------------------
2003 41.80% $ 773,788 1.15% 1.18% (0.87)% 208.80%
2002 (20.80)% $ 561,244 1.05% 1.16% (0.81)% 259.62%
2001 (59.00)% $ 595,761 1.04% 1.12% (0.77)% 335.57%
2000 97.35% $ 1,203,756 1.03% 1.07% (0.68)% 306.97%
1999 84.07% $ 148,830 1.03% 1.08% (0.53)% 290.79%
- --------------------------------------------
Turner Midcap Growth Fund -- Class II Shares
- --------------------------------------------
2003 41.11% $ 423 1.65% 1.68% (1.36)% 208.80%
2002 (21.19)% $ 102 1.55% 1.66% (1.25)% 259.62%
2001 (5) 0.64%+ $ 7 1.54% 1.95% (1.04)% 335.57%
- ----------------------------------------------
Turner Small Cap Growth Fund -- Class I Shares
- ----------------------------------------------
2003 49.60% $ 192,791 1.25% 1.41% (0.79)% 187.95%
2002 (19.36)% $ 144,181 1.25% 1.40% (0.99)% 188.34%
2001 (49.81)% $ 241,876 1.25% 1.40% (0.96)% 176.11%
2000 56.07% $ 528,928 1.25% 1.27% (0.93)% 203.01%
1999 59.14% $ 254,077 1.25% 1.31% (0.98)% 223.61%
- ----------------------------------------------
Turner Micro Cap Growth Fund -- Class I Shares
- ----------------------------------------------
2003 29.15% $ 253,840 1.40% 1.44% (0.81)% 147.77%
2002 (0.12)% $ 178,130 1.31% 1.42% (0.88)% 88.89%
2001 (20.23)% $ 160,010 1.25% 1.40% (0.50)% 121.96%
2000 129.02% $ 187,107 1.25% 1.35% (0.79)% 179.08%
1999 (7) 113.46% $ 12,963 0.90% 2.86% (0.47)% 239.32%
<FN>
* Amount represents less than $0.01 per share.
+ Returns are for the period indicated and have not been annualized.
++ Inclusive of directed brokerage arrangements, waivers and reimbursements.
+++ Excludes effect of in-kind transfers and mergers.
(1) Commenced operations on June 14, 2000. All ratios for the period have been annualized.
(2) The information set forth in this table for the periods prior to August 17, 2002, is the
financial data of the Mercury Select Growth Fund, Class I Shares.
From the period June 19, 2000, to August 17, 2002, the Mercury Select Growth
Fund operated as a "feeder" fund that seeks to achieve its investment objective
by investing all of its assets in the "master" portfolio, a mutual fund that has
the same investment objective as the Fund. All investments are made at the
master level. This stucture is sometimes called a "master/feeder" structure.
Prior to June 19, 2000, the Fund operated as a stand-alone investment company
called the Turner Large Cap Growth Equity Fund.
(3) Based on average shares outstanding.
(4) Expense ratios include the Mercury Select Growth Fund's, Class I Shares
portion of the master's allocated expenses.
(5) Commenced operations on September 24, 2001. All ratios for the period have been annualized.
(6) The amount shown for a share outstanding throughout the period does not accord with
the aggregate net losses on investments for the period because of the sales and
repurchases of fund shares in relation to fluctuating market value of the investments of the Fund.
(7) On January 25, 1999 shareholders of the Alpha Select Turner Micro Cap Growth Fund (the "Fund")
approved a tax-free reorganization under which all assets and liabilities of the Fund were
transferred to the Turner Micro Cap Growth Fund.
</FN>
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
124 & 125 TURNER FUNDS 2003 ANNUAL REPORT
<page>
FINANCIAL STATEMENTS
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
Realized and
Net asset Net unrealized Dividends Distributions
value, investment gains from net from Net asset
beginning income (losses) on investment capital value, end
of period (loss) investments income gains of period
- ------------------------------------------------------------------------------------------------------------------------------------
Turner Large Cap Value Fund -- Class I Shares
- ---------------------------------------------
2003 $ 7.86 0.08 1.70 (0.08) -- $ 9.56
2002 $ 9.89 0.10 (2.03) (0.10) -- $ 7.86
2001 (1) $12.44 0.11 (1.93) (0.11) (0.62) $ 9.89
2000 $11.43 0.08 2.06 (0.09) (1.04) $12.44
1999 $ 9.21 0.13 2.27 (0.13) (0.05) $11.43
- -----------------------------------------
Turner Core Value Fund -- Class I Shares
- -----------------------------------------
2003 (2) $11.71 0.05 2.47 (0.05) -- $14.18
2002 $14.85 0.08 (0.61) (0.08) (2.53) $11.71
2001 (3) $14.23 0.05 0.59 (0.02) -- $14.85
2000 $15.92 0.05 1.79 (0.07) (3.46) $14.23
1999 $15.85 0.21 0.74 (0.21) (0.67) $15.92
- ---------------------------------------------
Turner Small Cap Value Fund -- Class I Shares
- ---------------------------------------------
2003 $15.20 0.01 4.04 (0.02)(4) -- $19.23
2002 $16.69 0.06 (1.50) (0.05) -- $15.20
2001(5) $16.36 0.10 1.67 (0.05) (1.39) $16.69
2000 $13.71 (0.02) 3.91 -- (1.24) $16.36
1999 $11.49 (0.01) 2.48 -- (0.25) $13.71
- ------------------------------------------------------------
Turner Small Cap Value Opportunities Fund -- Class II Shares
- ------------------------------------------------------------
2003 $ 9.27 (0.01) 3.47 (0.01) -- $12.72
2002 (6) $10.00 -- (0.73) -- -- $ 9.27
- -----------------------------------------------
Turner Small Cap Equity Fund -- Class II Shares
- -----------------------------------------------
2003 $ 9.30 (0.02) 3.00 (0.01) -- $12.27
2002 (6) $10.00 -- (0.70) -- -- $ 9.30
- ----------------------------------------
Turner Technology Fund -- Class I Shares
- ----------------------------------------
2003 $ 3.03 (0.04) 2.32 -- -- $ 5.31
2002 $ 4.88 (0.06) (1.79) -- -- $ 3.03
2001 $32.69 (0.15) (23.42) -- (4.24) $ 4.88
2000 $14.06 (0.16) 20.33 -- (1.54) $32.69
1999 (7) $10.00 (0.02) 4.08 -- -- $14.06
- -------------------------------------------------
Turner Concentrated Growth Fund -- Class I Shares
- -------------------------------------------------
2003 $ 4.03 (0.04) 2.06 -- -- $ 6.05
2002 $ 5.76 -- (1.73) -- -- $ 4.03
2001 $24.74 (0.09) (14.96) -- (3.93) $ 5.76
2000 $13.99 (0.11) 13.06 -- (2.20) $24.74
1999 (7) $10.00 (0.02) 4.01 -- -- $13.99
Ratio of net
Net Ratio of Ratio of total investment
assets end net expenses expenses income (loss) Portfolio
Total of period to average to average to average turnover
return (000) net assets++ net assets net assets++ rate+++
- ------------------------------------------------------------------------------------------------------------------------------------
Turner Large Cap Value Fund -- Class I Shares
- ---------------------------------------------
2003 22.72% $ 4,792 1.15% 1.70% 0.89% 58.63%
2002 (19.66)% $ 4,255 0.95% 1.54% 1.06% 70.30%
2001 (1) (15.47)% $ 5,152 0.95% 3.56% 1.00% 121.20%
2000 19.84% $ 5,163 0.95% 3.98% 0.75% 153.58%
1999 26.17% $ 2,725 0.95% 4.13% 1.20% 92.26%
- -----------------------------------------
Turner Core Value Fund -- Class I Shares
- -----------------------------------------
2003 (2) 21.61% $ 46,673 1.13% 1.13% 0.43% 66.61%
2002 (6.37)% $ 43,571 1.10% 1.13% 0.56% 103.36%
2001 (3) 4.50% $ 41,715 1.10% 1.16% 0.30% 128.18%
2000 13.67% $ 45,657 1.10% 1.11% 0.34% 90.15%
1999 6.13% $ 59,602 0.95% 0.95% 1.21% 98.85%
- ---------------------------------------------
Turner Small Cap Value Fund -- Class I Shares
- ---------------------------------------------
2003 26.66% $394,946 1.27% 1.27% 0.08% 52.21%
2002 (8.69)% $464,576 1.26% 1.26% 0.31% 37.60%
2001(5) 12.15% $178,164 1.28% 1.28% 0.37% 120.40%
2000 29.59% $ 36,254 1.40% 1.47% (0.11)% 85.80%
1999 21.82% $ 16,494 1.40% 1.72% (0.10)% 79.93%
- ------------------------------------------------------------
Turner Small Cap Value Opportunities Fund -- Class II Shares
- ------------------------------------------------------------
2003 37.29% $ 5,740 1.40% 3.64% (0.26)% 245.12%
2002 (6) (7.30)%+ $ 913 1.45% 6.18% 0.08% 141.81%
- -----------------------------------------------
Turner Small Cap Equity Fund -- Class II Shares
- -----------------------------------------------
2003 32.04% $ 12,557 1.32% 2.05% (0.26)% 287.39%
2002 (6) (7.00)%+ $ 7,260 1.35% 3.02% (0.07)% 86.94%
- ----------------------------------------
Turner Technology Fund -- Class I Shares
- ----------------------------------------
2003 75.25% $ 19,696 1.13% 1.49% (0.97)% 523.75%
2002 (37.91)% $ 11,662 0.88% 1.43% (0.84)% 734.40%
2001 (81.12)% $ 25,147 1.21% 1.58% (1.10)% 727.24%
2000 149.35% $169,353 1.35% 1.67% (1.10)% 1,340.92%
1999 (7) 40.60%+ $ 8,296 1.35% 3.89% (0.87)% 317.32%
- -------------------------------------------------
Turner Concentrated Growth Fund -- Class I Shares
- -------------------------------------------------
2003 50.12% $ 47,004 1.23% 1.60% (0.90)% 762.18%
2002 (30.03)% $ 29,182 0.30% 1.17% (0.03)% 1,182.61%
2001 (70.40)% $ 56,803 1.05% 1.32% (0.76)% 1,117.77%
2000 98.58% $246,621 1.26% 1.62% (0.90)% 1,590.94%
1999 (7) 39.90%+ $ 16,112 1.35% 2.55% (0.87)% 369.11%
<FN>
+ Returns are for the period indicated and have not been annualized.
++ Inclusive of directed brokerage arrangements, waivers and reimbursements.
+++ Excludes effect of in-kind transfers and mergers.
(1) On April 30, 2001, shareholders of the Clover Max Cap Value Fund approved a change in the adviser
from Clover Capital Management, Inc. to Turner Investment Partners, Inc., with Clover Capital
becoming the Fund's sub-adviser. In connection with the change in adviser, the Fund changed
its name to the Turner Large Cap Value Fund effective May 1, 2001.
(2) Effective April 15, 2003, the Board of Trustees of Turner Funds approved a resolution to change
the name of the Turner Midcap Value Fund to the Turner Core Value Fund and to change its principal
investment strategy to a "core" approach.
(3) On April 30, 2001, shareholders of the Clover Equity Value Fund approved a change in the adviser
from Clover Capital Management, Inc. to Turner Investment Partners, Inc., with Clover Capital
becoming the Fund's sub-adviser. In connection with the change in adviser, the Fund changed its
name to the Turner Midcap Value Fund effective May 1, 2001.
(4) Includes return of capital of $0.004.
(5) On April 30, 2001, shareholders of the Clover Small Cap Value Fund approved a change in the adviser
from Clover Capital Management, Inc. to Turner Investment Partners, Inc., with Clover Capital
becoming the Fund's sub-adviser. In connection with the change in adviser, the Fund changed its
name to the Turner Small Cap Value Fund effective May 1, 2001.
(6) Commenced operations on March 4, 2002. All ratios for the period have been annualized.
(7) Commenced operations on June 30, 1999. All ratios for the period have been annualized.
</FN>
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
126 & 127 TURNER FUNDS 2003 ANNUAL REPORT
<page>
FINANCIAL STATEMENTS
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
Realized and
Net asset Net unrealized Dividends Distributions
value, investment gains from net from Net asset
beginning income (losses) on investment capital value, end
of period (loss) investments income gains of period
- ------------------------------------------------------------------------------------------------------------------------------------
Turner New Enterprise Fund -- Class I Shares
- --------------------------------------------
2003 $ 2.27 (0.02) 2.09 -- -- $ 4.34
2002 $ 3.29 (0.04) (0.98) -- -- $ 2.27
2001 (1) $12.52 (0.03) (9.20) -- -- $ 3.29
2000 (2) $10.00 (0.01) 2.53 -- -- $12.52
- ---------------------------------------------------
Turner Financial Services Fund-- Class I Shares (3)
- ---------------------------------------------------
2003 $10.11 (0.02) 3.62 -- (0.11) $13.60
2002 $16.67 (0.02) (1.12) -- (5.42) $10.11
2001 (4) $19.76 (0.13) (2.96) -- -- $16.67
2001 $17.19 (0.14) 3.30 -- (0.59) $19.76
2000 $18.01 (0.17) (0.65) -- -- $17.19
1999 $19.61 (0.10) (0.31) -- (1.19) $18.01
- ---------------------------------------------------------
Turner Healthcare & Biotechnology Fund -- Class II Shares
- ---------------------------------------------------------
2003 $ 9.83 (0.11) 2.59 -- -- $12.31
2002 $11.15 (0.10) (1.20) -- (0.02) $ 9.83
2001 (5) $10.00 (0.03) 1.18 -- -- $11.15
- -----------------------------------------------------
Turner Tax Managed U.S. Equity Fund-- Class II Shares
- -----------------------------------------------------
2003 $ 6.29 (0.03) 1.78 -- -- $ 8.04
2002 $ 8.18 (0.03) (1.86) -- -- $ 6.29
2001 (5) $10.00 -- (1.82) -- -- $ 8.18
- ----------------------------------------------------------------
Turner Strategic Value and High Income Fund-- Class I Shares (6)
- ----------------------------------------------------------------
2003 (7) $10.00 0.25 2.58 (0.25) -- $12.58
- -----------------------------------------------
Turner Core Fixed Income Fund -- Class I Shares
- -----------------------------------------------
2003 $10.55 0.45 (0.10) (0.47) (0.03) $10.40
2002 $10.20 0.52 0.35 (0.52) -- $10.55
2001 (8) $ 9.62 0.54 0.58 (0.54) -- $10.20
2000 $ 9.50 0.54 0.12 (0.54) -- $ 9.62
1999 $10.41 0.53 (0.71) (0.53) (0.20) $ 9.50
- -------------------------------------------------------
Turner Total Return Fixed Income Fund -- Class I Shares
- -------------------------------------------------------
2003 (9) $10.19 0.18(11) (0.79) (0.53) (0.34) $ 8.71
2002 $10.53 0.50 0.18 (0.50) (0.52) $10.19
2001 $ 9.98 0.61 0.55 (0.61) -- $10.53
2000 $ 9.91 0.59 0.07 (0.59) -- $ 9.98
1999 (10) $10.00 0.14 (0.09) (0.14) -- $ 9.91
Ratio of net
Ratio of Ratio of total investment
Net assets net expenses expenses income (loss) Portfolio
Total end of to average to average to average turnover
return period (000) net assets++ net assets net assets++ rate+++
- ------------------------------------------------------------------------------------------------------------------------------------
Turner New Enterprise Fund -- Class I Shares
- --------------------------------------------
2003 91.19% $ 13,468 1.16% 1.99% (0.95)% 451.37%
2002 (31.00)% $ 3,198 0.98% 2.04% (0.92)% 754.09%
2001 (1) (73.72)% $ 6,144 1.28% 3.13% (1.04)% 758.98%
2000 (2) 25.20%+ $ 13,750 1.35% 2.87% (0.83)% 83.02%
- ---------------------------------------------------
Turner Financial Services Fund-- Class I Shares (3)
- ---------------------------------------------------
2003 35.95% $ 17,309 1.50% 1.82% (0.22)% 139.02%
2002 (12.48)% $ 12,149 1.40% 2.16% (0.40)% 170.97%
2001 (4) (15.64)%+ $ 15,554 2.29% 2.33% (1.19)% 51.65%
2001 18.20% $ 23,341 2.11% 2.11% (0.59)% 109.74%
2000 (4.55)% $ 25,892 2.14% 2.14% (0.91)% 180.47%
1999 (0.15)% $ 30,797 2.06% 2.06% (0.62)% 205.86%
- ---------------------------------------------------------
Turner Healthcare & Biotechnology Fund -- Class II Shares
- ---------------------------------------------------------
2003 25.23% $ 14,853 1.47% 1.63% (1.16)% 274.37%
2002 (11.66)% $ 9,288 1.87% 2.33% (1.44)% 202.30%
2001 (5) 11.50%+ $ 1,192 1.50% 13.70% (0.79)% 95.24%
- -----------------------------------------------------
Turner Tax Managed U.S. Equity Fund-- Class II Shares
- -----------------------------------------------------
2003 27.82% $ 5,528 1.25% 2.14% (0.34)% 187.08%
2002 (23.11)% $ 4,747 1.25% 1.91% (0.33)% 313.38%
2001 (5) (18.20)%+ $ 6,949 1.25% 5.35% (0.20)% 91.38%
- ----------------------------------------------------------------
Turner Strategic Value and High Income Fund-- Class I Shares (6)
- ----------------------------------------------------------------
2003 (7) 28.57%+ $ 443 0.25% 21.93% 3.27% 396.69%
- -----------------------------------------------
Turner Core Fixed Income Fund -- Class I Shares
- -----------------------------------------------
2003 3.37% $ 43,391 0.78% 0.87% 4.25% 45.87%
2002 8.85% $ 42,924 0.75% 0.87% 5.03% 49.30%
2001 (8) 11.99% $ 34,074 0.75% 1.01% 5.50% 34.05%
2000 7.21% $ 31,486 0.75% 1.02% 5.72% 42.40%
1999 (1.78)% $ 32,729 0.75% 0.97% 5.40% 28.47%
- -------------------------------------------------------
Turner Total Return Fixed Income Fund -- Class I Shares
- -------------------------------------------------------
2003 (9) (6.39)% $ 268 0.45% 1.57% 1.78% 956.00%
2002 6.95% $ 8,393 0.45% 1.28% 4.84% 291.12%
2001 11.87% $ 5,811 0.45% 1.58% 5.95% 203.83%
2000 6.97% $ 13,975 0.45% 1.46% 6.07% 140.02%
1999 (10) 0.48%+ $ 10,009 0.45% 1.99% 5.67% 39.70%
<FN>
+ Returns are for the period indicated and have not been annualized.
++ Inclusive of directed brokerage arrangements, waivers and reimbursements.
+++ Excludes effect of in-kind transfers and mergers.
(1) On May 18, 2001, the Board of Trustees of Turner Funds approved resolutions to change the name
of the B2B E-Commerce Fund to the Turner New Enterprise Fund and to change a non-fundamental
investment policy of the Fund to be consistent with the Turner New Enterprise Fund's investment objectives.
(2) Commenced operations on June 30, 2000. All ratios for the period have been annualized.
(3) On November 12, 2001, the Titan Financial Services Fund (the "Titan Fund") exchanged all of its assets
and liabilities for shares of the Turner Financial Services Fund. The Titan Fund is the accounting
survivor in this transaction, and as a result, the accounting history and operating results for the periods
prior to November 12, 2001 and have been carried forward in these financial highlights.
(4) For the six month period ended October 31, 2001. All ratios for the period have been annualized.
The Titan Fund changed its fiscal year end from April 30 to October 31.
(5) Commenced operations on February 28, 2001. All ratios for the period have been annualized.
(6) The Turner Strategic Value and High Income Fund and its shareholders
indirectly bear a pro rata share of the expenses of the underlying Turner Funds. The expense ratios do not
include such expenses. Recognition of net investment income is affected by the timing of the declaration
of dividends by the Turner Funds in which the Turner Strategic Value and High Income Fund invest.
(7) Commenced operations on October 31, 2002. All ratios for the period have been annualized.
(8) On April 30, 2001, shareholders of the Clover Fixed Income Fund approved a change in the adviser from
Clover Capital Management, Inc. to Turner Investment Partners, Inc., with Clover Capital becoming the Fund's
sub-adviser. In connection with the change in adviser the Fund changed its name to the Turner Core Fixed
Income Fund effective May 1, 2001.
(9) Effective October 31, 2002 the Turner Total Return Fixed Income Fund changed
its principal investment strategy to a "core" approach.
(10) Commenced operations on June 30, 1999. All ratios for the period have been annualized.
(11) Based on average shares outstanding.
</FN>
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
128 & 129 TURNER FUNDS 2003 ANNUAL REPORT
<page>
FINANCIAL STATEMENTS
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
Realized and
Net asset unrealized Dividends Distributions
value, Net gains from net from Net asset
beginning investment (losses) on investment capital value, end
of period income investments income gains of period
- ------------------------------------------------------------------------------------------------------------------------------------
Turner High Yield Fund -- Class I Shares
- ----------------------------------------
2003 $ 4.45 0.37 0.56 (0.36) -- $ 5.02
2002 (1) $ 5.49 0.64 (1.04) (0.64) -- $ 4.45
2001 $ 8.10 0.78 (2.61) (0.78) -- $ 5.49
2000 $ 8.82 0.79 (0.72) (0.79) -- $ 8.10
1999 (2) $ 8.91 0.83 (0.09) (0.83) -- $ 8.82
- ---------------------------------------------------------------
Turner Ultra Short Duration Fixed Income Fund -- Class I Shares
- ---------------------------------------------------------------
2003 $10.23 0.08(3) 0.06 (0.19) (0.01) $10.17
2002 $10.22 0.25 0.05 (0.29) -- $10.23
2001 $10.05 0.54 0.15 (0.52) -- $10.22
2000 $10.05 0.61 0.01 (0.62) -- $10.05
1999 (4) $10.09 0.54 (0.02) (0.56) -- $10.05
- ----------------------------------------------------------------
Turner Ultra Short Duration Fixed Income Fund -- Class II Shares
- ----------------------------------------------------------------
2003 $10.27 0.05(3) 0.07 (0.17) (0.01) $10.21
2002 $10.26 0.25 0.02 (0.26) -- $10.27
2001 $10.09 0.50 0.17 (0.50) -- $10.26
2000 $10.10 0.57 0.02 (0.60) -- $10.09
1999 (4) $10.11 0.47 0.02 (0.50) -- $10.10
- ---------------------------------------------------------
Turner Short Duration Fixed Income Fund -- Class I Shares
- ---------------------------------------------------------
2003 $10.24 0.17(3) 0.05 (0.25) (0.07) $10.14
2002 $10.16 0.35 0.12 (0.39) -- $10.24
2001 $ 9.82 0.57 0.32 (0.55) -- $10.16
2000 $ 9.84 0.58 (0.01) (0.59) -- $ 9.82
1999 (5) $10.25 0.55 (0.27) (0.55) (0.14) $ 9.84
- ----------------------------------------------------------
Turner Short Duration Fixed Income Fund -- Class II Shares
- ----------------------------------------------------------
2003 $10.21 0.14(3) 0.04 (0.22) (0.07) $10.10
2002 $10.12 0.32 0.13 (0.36) -- $10.21
2001 $ 9.78 0.54 0.33 (0.53) -- $10.12
2000 $ 9.80 0.58 (0.02) (0.58) -- $ 9.78
1999 (6) $ 9.95 0.68 (0.13) (0.70) -- $ 9.80
Ratio of net
Ratio of Ratio of total investment
Net assets net expenses expenses income Portfolio
Total end of to average to average to average turnover
return period (000) net assets++ net assets net assets++ rate
- ------------------------------------------------------------------------------------------------------------------------------------
Turner High Yield Fund -- Class I Shares
- ----------------------------------------
2003 21.61% $ 9,408 0.76% 1.16% 7.71% 241.14%
2002 (1) (8.05)% $ 9,432 0.68% 1.47% 12.78% 171.13%
2001 (23.66)% $ 13,977 0.68% 1.38% 11.18% 85.80%
2000 0.56% $ 32,560 0.68% 1.04% 8.94% 76.00%
1999 (2) 8.65% $ 41,922 0.68% 1.14% 9.11% 96.98%
- ---------------------------------------------------------------
Turner Ultra Short Duration Fixed Income Fund -- Class I Shares
- ---------------------------------------------------------------
2003 1.40% $ 462,567 0.41% 0.62% 0.78% 222.09%
2002 2.95% $ 470,021 0.36% 0.60% 2.27% 71.47%
2001 7.09% $ 93,531 0.36% 0.87% 5.09% 118.53%
2000 6.34% $ 30,365 0.36% 1.25% 6.15% 140.55%
1999 (4) 5.34% $ 3,207 0.00% 6.53% 5.50% 154.33%
- ----------------------------------------------------------------
Turner Ultra Short Duration Fixed Income Fund -- Class II Shares
- ----------------------------------------------------------------
2003 1.15% $ 5,964 0.66% 0.87% 0.51% 222.09%
2002 2.69% $ 8,888 0.61% 0.85% 2.11% 71.47%
2001 6.82% $ 6,106 0.61% 1.10% 5.19% 118.53%
2000 6.00% $ 8,934 0.61% 1.48% 5.72% 140.55%
1999 (4) 5.00% $ 3,155 0.23% 6.76% 5.13% 154.33%
- ---------------------------------------------------------
Turner Short Duration Fixed Income Fund -- Class I Shares
- ---------------------------------------------------------
2003 2.15% $ 252,772 0.41% 0.62% 1.65% 200.20%
2002 4.69% $ 264,010 0.36% 0.60% 3.27% 177.71%
2001 9.35% $ 68,405 0.36% 0.72% 5.65% 103.92%
2000 6.00% $ 42,092 0.36% 0.74% 5.94% 136.01%
1999 (5) 2.89% $ 38,687 0.24% 1.31% 6.21% 257.98%
- ----------------------------------------------------------
Turner Short Duration Fixed Income Fund -- Class II Shares
- ----------------------------------------------------------
2003 1.79% $ 2,246 0.66% 0.87% 1.41% 200.20%
2002 4.53% $ 8,356 0.61% 0.85% 3.21% 177.71%
2001 9.10% $ 8,130 0.61% 0.96% 5.40% 103.92%
2000 5.92% $ 6,479 0.61% 0.95% 5.90% 136.01%
1999 (6) 5.64%+ $ 87 0.48% 0.95% 5.71% 257.98%
<FN>
+ Returns are for the period indicated and have not been annualized.
++ Inclusive of waivers and reimbursements.
(1) The information set forth in this table for the periods prior to May 1, 2002, is the financial data
of the Penn Capital Strategic High Yield Bond Fund (see Note 9). Effective May 1, 2002, Turner Investment
Partners, Inc. became the Fund's adviser. (2) On January 25, 1999, shareholders of the Alpha Select Penn
Capital Strategic High Yield Bond Fund approved a tax-free reorganization under which all assets and
liabilities of the Fund were transferred to the Penn Capital Strategic High Yield Bond Fund.
(3) Based on average shares outstanding.
(4) On May 24, 1999 shareholders of the Alpha Select Turner Short Duration Government Funds-One Year Portfolio
(the "Fund") approved a tax-free reorganization under which all assets and liabilities of the Fund were
transferred to the TIP Turner Short Duration Government Funds-One Year Portfolio.
(5) On January 25, 1999 shareholders of the Alpha Select Turner Short Duration Government Funds-Three Year
Portfolio (the "Fund") approved a tax-free reorganization under which all assets and liabilities of the Fund were
transferred to the TIPTurner Short Duration Government Funds-Three Year Portfolio.
(6) Commenced operations on April 28, 1999. All ratios for the period have been annualized.
</FN>
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
130 & 131 TURNER FUNDS 2003 ANNUAL REPORT
<page>
NOTES TO FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS
September 30, 2003
1. ORGANIZATION:
Turner Funds (the "Trust"), a Massachusetts business trust, is registered under
the Investment Company Act of 1940, as amended, as an open-end management
investment company with 22 active portfolios. The financial statements included
herein are those of the Turner Disciplined Large Cap Growth Fund (the
"Disciplined Large Cap Growth Fund"), the Turner Large Cap Growth Opportunities
Fund (the "Large Cap Growth Opportunities Fund"), the Turner Midcap Growth Fund
(the "Midcap Growth Fund"), the Turner Small Cap Growth Fund (the "Small Cap
Growth Fund"), the Turner Micro Cap Growth Fund (the "Micro Cap Growth Fund"),
the Turner Large Cap Value Fund (the "Large Cap Value Fund"), the Turner Core
Value Fund (the "Core Value Fund"), the Turner Small Cap Value Fund (the "Small
Cap Value Fund"), the Turner Small Cap Value Opportunities Fund (the "Small Cap
Value Opportunities Fund"), the Turner Small Cap Equity Fund, (the "Small Cap
Equity Fund"), the Turner Technology Fund (the "Technology Fund"), the Turner
Concentrated Growth Fund (the "Concentrated Growth Fund"), the Turner New
Enterprise Fund (the "New Enterprise Fund"), the Turner Financial Services Fund
(the "Financial Services Fund"), the Turner Healthcare & Biotechnology Fund (the
"Healthcare & Biotechnology Fund"), the Turner Tax Managed U.S. Equity Fund (the
"Tax Managed U.S. Equity Fund"), the Turner Strategic Value and High Income Fund
(the "Strategic Value and High Income Fund"), the Turner Core Fixed Income Fund
(the "Core Fixed Income Fund"), the Turner Total Return Fixed Income Fund (the
"Total Return Fixed Income Fund"), the Turner High Yield Fund (the "High Yield
Fund"), the Turner Ultra Short Duration Fixed Income Fund (the "Ultra Short
Duration Fixed Income Fund"), and the Turner Short Duration Fixed Income Fund
(the "Short Duration Fixed Income Fund"), each a "Fund" and collectively the
"Funds".
On September 12, 2003, the Board of Trustees (the "Board") of the Turner Funds
unanimously voted to close and liquidate the Total Return Fixed Income Fund
effective November 30, 2003.
Each Fund is registered as a diversified portfolio of the Trust with the
exception of the Disciplined Large Cap Growth Fund, the Large Cap Growth
Opportunities Fund, the Concentrated Growth Fund, the Financial Services Fund,
the Healthcare & Biotechnology Fund and the Tax Managed U.S. Equity Fund.
The Funds are registered to offer different classes of shares: Class I Shares,
Class II Shares, or both. The assets of each Fund are segregated, and a
shareholder's interest is limited to the Fund in which shares are held. The
Funds' prospectus provides a description of each Fund's investment objectives,
policies, and strategies along with information on the classes of shares
currently being offered.
As of September 30, 2003, the Turner International Opportunities Fund and the
Turner International Discovery Fund are also registered as diversified
portfolios of the Trust, but have not yet commenced operations.
The Micro Cap Growth Fund and the Total Return Fixed Income Fund were closed to
new investors as of March 7, 2000, and October 31, 2003, respectively. Effective
January 31, 2003 and June 23, 2003, the Small Cap Value Fund and the Small Cap
Growth Fund re-opened to new investors, respectively.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of the significant accounting policies followed by
the Funds.
USE OF ESTIMATES--The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities at the date of the financial statements, and the
reported amounts of income and expenses during the reported period. Actual
results could differ from those estimates.
SECURITY VALUATION--Investments in equity securities which are traded on a
national exchange (or reported on the NASDAQ national market system) are
stated at the last quoted sales price if readily available for such equity
securities on each business day; other equity securities traded in the
over-the-counter market and listed equity securities for which no sale was
reported on that date are stated at the last quoted bid price. Short-term
debt securities with maturities of 60 days or less are carried at amortized
cost, which approximates market value. Other debt securities are carried at
fair market value as determined pursuant to guidelines established by the
Board. Debt securities for which market quotations are readily available are
valued on the basis of the last reported sales price, or, if no sales are
reported, the mean between representative bid and asked quotations. Debt
securities for which market quotations are not readily available may be
valued with reference to securities whose prices are more readily obtainable
and whose durations are comparable to the securities being valued. Subject to
the foregoing, other securities for which market quotations are not readily
available are valued at fair value as determined in good faith by the Board.
The assets of the Strategic Value and High Income Fund consist of investments
in underlying affiliated investment companies, which are valued at their
respective daily net asset values.
SECURITY TRANSACTIONS AND RELATED INCOME--Security transactions are accounted
for on the date the security is purchased or sold (trade date). Dividend
income is recognized on the ex-dividend date, and interest income is
recognized on the accrual basis subject to the recognition of certain gains
and losses on mortgage- and asset-backed securities. Costs used in
determining realized gains and losses on the sales of investment securities
are those of the specific securities sold during the respective holding
period.
132 TURNER FUNDS 2003 ANNUAL REPORT
<page>
Securities purchased on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date. Such securities are included in
the portfolio and are subject to market fluctuations during this period. On
the date of the commitment to purchase or sell, the Funds designate specific
assets with a current value at least equal to the amount of the commitment to
be used for settling the commitment.
Certain Funds may enter into options on futures contracts for the purpose of
managing exposure to changing interest rates and securities prices. When a
Fund writes or purchases an option, an amount equal to the premium received
or paid by the Fund is recorded as a liability or an asset and is
subsequently adjusted to the current market value of the option written or
purchased. Premiums received or paid from writing or purchasing options,
which expire unexcerised, are treated by the Fund on the expiration date as
realized gains or losses. The difference between the premium and the amount
paid or received on effecting a closing purchase or sale transaction,
including brokerage commissions, is also treated as a realized gain or loss.
If an option is exercised, the premium paid or received is added to the cost
of the purchase or proceeds from the sale in determining whether the Fund has
realized a gain or a loss on investment transactions. There were no option
contracts open as of September 30, 2003.
Written option transactions entered into during the year ended September 30,
2003 for the Total Return Fixed Income Fund were as follows:
# OF CONTRACTS PREMIUM (000)
-------------- -------------
Balance at the beginning of year -- $ --
Written 43 32,922
Closing buys (43) (32,922)
--------- ----------
Balance at the end of year -- $ --
========= ==========
REPURCHASE AGREEMENTS--Securities pledged as collateral for repurchase
agreements are held by the custodian bank until the respective agreements
mature. Provisions of the repurchase agreements ensure that the market value
of the collateral, including accrued interest thereon, is not less than 102%.
In the event of default of the counterparty and the value of the collateral
declines or if the counterparty enters an insolvency proceeding, realization
of the collateral by the Funds may be delayed or limited.
EXPENSES--Expenses that are specifically attributed to one of the Funds are
charged to that Fund. Certain other expenses of the Funds are prorated among
the Funds on the basis of relative daily net assets. Other common expenses of
the Trust are allocated among the Funds on the basis of relative daily net
assets. In addition to the Funds' direct expenses, shareholders of the
Strategic Value and High Income Fund also bear a proportionate share of the
underlying funds' expenses.
CLASSES--Class specific expenses are borne by that class. Income, non-class
specific expenses and realized/unrealized gains and losses are allocated to
the respective classes on the basis of the relative daily net assets.
DIVIDENDS AND DISTRIBUTIONS--The Disciplined Large Cap Growth, Large Cap
Growth Opportunities, Midcap Growth, Small Cap Growth, Micro Cap Growth,
Small Cap Value Opportunities, Small Cap Equity, Technology, Concentrated
Growth, New Enterprise, Financial Services, Healthcare & Biotechnology and
Tax Managed U.S. Equity Funds declare and distribute net investment income,
if any, annually, as a dividend to shareholders. The Large Cap Value, Core
Value, Small Cap Value and Strategic Value and High Income Funds declare and
distribute net investment income, if any, quarterly, as a dividend to
shareholders. The Core Fixed Income, Total Return Fixed Income, High Yield,
Ultra Short Duration Fixed Income and Short Duration Fixed Income Funds
declare net investment income daily and distribute it monthly, as a dividend
to shareholders. Any net realized capital gains on sales of securities for
all Funds are distributed to shareholders at least annually.
RECLASSIFICATIONS--Certain reclassifications have been made in the prior year
financial statements to conform to the current year.
3. TRANSACTIONS WITH AFFILIATES:
Certain officers of the Trust are also officers of Turner Investment Partners,
Inc. ("Turner") and SEI Investments Global Funds Services ("SEI") and/or SEI
Investments Distribution Co. Such officers are paid no fees by the Trust for
serving as officers and trustees of the Trust.
The Trust has entered into an agreement with the SEI Investments Distribution
Co., an affiliate of SEI, to act as an agent in placing repurchase agreements
for the Funds. For its services, SEI Investments Distribution Co. received
$73,388 for the year ended September 30, 2003. Effective October 24, 2003, this
Agreement was discontinued.
Certain Funds effect trades through Turner Investment Distributors, Inc., the
distributor for the Funds, for security purchases and sales transactions.
Commissions paid on those trades from the Trust for the year ended September 30,
2003 were $5,625,287.
4. ADMINISTRATION, SHAREHOLDER SERVICING, AND DISTRIBUTION AGREEMENTS:
Turner provides administrative services to the Funds under an Administration
Agreement with the Trust. For its services, Turner receives an annual fee of
0.15% of the aggregate average daily net assets of the Trust up to $2 billion,
0.12% assets over $2 billion. Under a separate Sub-Administration Agreement
between Turner and SEI, SEI provides sub-administrative services to the Funds.
For the year ended September 30, 2003, SEI was paid $1,909,006 by Turner.
TURNER FUNDS 2003 ANNUAL REPORT 133
<page>
NOTES TO FINANCIAL STATEMENTS
Turner Investment Distributors, Inc., (the "Distributor") a broker dealer
subsidiary of Turner, provides distribution services to the Funds under a
Distribution Agreement. The Distributor also provides shareholder servicing
services to the Funds under a Shareholder Servicing Plan and Agreement effective
October 1, 2001.
The Disciplined Large Cap Growth, Large Cap Growth Opportunities, Midcap Growth,
Large Cap Value, Small Cap Value, Small Cap Value Opportunities, Small Cap
Equity, Concentrated Growth, Healthcare & Biotechnology, Tax Managed U.S.
Equity, High Yield, Ultra Short Duration Fixed Income and Short Duration Fixed
Income Funds have adopted a Distribution and Shareholder Service Plan for their
Class II Shares (the "Class II Plan"). Under the Class II Plan, a Plan adopted
pursuant to Rule 12b-1 under the Investment Company Act of 1940, the Distributor
is entitled to receive aggregate fees not exceeding 0.75% of each Fund's Class
II Shares' average daily net assets in return for providing a broad range of
distribution services. Currently, the Distributor receives aggregate fees of
0.25% of each Fund's Class II Shares' average daily net assets. In addition,
under the Class II Plan, the Distributor is entitled to receive aggregate fees
not exceeding 0.25% of each Fund's Class II Shares' average daily net assets in
return for providing a broad range of shareholder services.
DST Systems, Inc. serves as the transfer agent and dividend disbursing agent for
the Funds under a transfer agency agreement with the Trust. The Funds reimburse
Turner for amounts paid to third parties that provide sub-transfer agency and
other administrative services to the Funds.
Some Funds directed certain portfolio trades to brokers who paid a portion of
their expenses (Directed Brokerage). Under this arrangement, the following Funds
had expenses reduced by the amounts shown below. The effect on the Funds'
expense ratios, as a percentage of the average net assets of the Fund on an
annualized basis, for the year ended September 30, 2003, was as follows:
FUND RATIO AMOUNT
- ---- -------- ------------
Large Cap Growth Opportunities Fund 0.17% $ 5,345
Midcap Growth Fund 0.04% 228,655
Small Cap Growth Fund 0.07% 107,057
Micro Cap Growth Fund 0.03% 57,861
Small Cap Value Opportunities Fund 0.03% 580
Small Cap Equity Fund 0.05% 4,190
Technology Fund 0.23% 34,133
Concentrated Growth Fund 0.12% 42,671
New Enterprise Fund 0.18% 10,995
Financial Services Fund 0.00% 635
Healthcare & Biotechnology Fund 0.01% 1,258
Tax Managed U.S. Equity Fund 0.01% 332
Effective January 2003, this arrangement was discontinued.
5. INVESTMENT ADVISORY AGREEMENT:
The Trust and Turner are parties to an Investment Advisory Agreement dated April
28, 1996 under which Turner receives a fee, that is calculated daily and paid
monthly, based on the average daily net assets of certain Funds. Pursuant to an
Advisory Agreement dated February 28, 2002, Turner Investment Management, LLC,
an affiliate of Turner serves as the investment adviser for the Small Cap Value
Opportunities and Small Cap Equity Funds. Clover Capital Management, Inc. serves
as investment sub-adviser to the Large Cap Value, Core Value, Small Cap Value
and Core Fixed Income Funds.
For its services, Turner and Turner Investment Management, LLC receive annual
fees, which are calculated daily and paid monthly, based on average daily net
assets. Turner and Turner Investment Management, LLC have agreed to waive all or
a portion of their fees and to reimburse expenses in order to limit operating
expenses to a specified percentage of the average daily net assets of certain
Funds on an annualized basis. These waivers and reimbursements may be terminated
at any time. Accordingly, the advisory fee and expense caps for certain funds
are as follows:
TOTAL
ADVISORY EXPENSE
FEES CAP
----- ------
Disciplined Large Cap Growth Fund 0.60% 0.75%
Large Cap Growth Opportunities Fund 0.75 1.25
Midcap Growth Fund 0.75 1.25(1)
Small Cap Growth Fund 1.00 1.25
Micro Cap Growth Fund 1.00 1.40
Large Cap Value Fund 0.74 1.25(2)
Core Value Fund 0.74 1.25(3)
Small Cap Value Fund 0.85 1.40
Small Cap Value Opportunities Fund 0.95 1.45
Small Cap Equity Fund (4) 0.85 N/A
Tax Managed U.S. Equity Fund 0.75 1.25
Strategic Value and High Income Fund 0.10 0.25(5)
Core Fixed Income Fund 0.45 0.80(6)
Total Return Fixed Income Fund 0.50 0.45
High Yield Fund 0.55 0.80(7)
Ultra Short Duration Fixed Income Fund 0.25 0.41(1)(8)
Short Duration Fixed Income Fund 0.25 0.41(1)(8)
(1) REPRESENTS MAXIMUM EXPENSE RATIO FOR CLASS I SHARES WHERE FUNDS OFFER BOTH
CLASS I SHARES AND CLASS II SHARES.
(2) EFFECTIVE FEBRUARY 1, 2003, THE BOARD AGREED TO INCREASE THE CONTRACTUAL
TOTAL EXPENSE CAP FROM 0.95% TO 1.25%.
(3) EFFECTIVE FEBRUARY 1, 2003, THE BOARD AGREED TO INCREASE THE CONTRACTUAL
TOTAL EXPENSE CAP FROM 1.10% TO 1.25%.
(4) TURNER MANAGEMENT, LLC HAS CONTRACTUALLY AGREED TO REDUCE THE ADVISORY FEE
BY 0.10% FROM 0.95% TO 0.85% AND TO KEEP "OTHER" EXPENSES FROM EXCEEDING
0.25% THROUGH JANUARY 31, 2004.
(5) EFFECTIVE FEBRUARY 1, 2003, THE BOARD AGREED TO DECREASE THE CONTRACTUAL
TOTAL EXPENSE CAP FROM 0.50% TO 0.25%.
(6) EFFECTIVE FEBRUARY 1, 2003, THE BOARD AGREED TO INCREASE THE CONTRACTUAL
TOTAL EXPENSE CAP FROM 0.75% TO 0.80%.
(7) EFFECTIVE FEBRUARY 1, 2003, THE BOARD AGREED TO INCREASE THE CONTRACTUAL
TOTAL EXPENSE CAP FROM 0.68% TO 0.80%.
(8) EFFECTIVE FEBRUARY 1, 2003, THE BOARD AGREED TO INCREASE THE CONTRACTUAL
TOTAL EXPENSE CAP FROM 0.36% TO 0.41%.
134 TURNER FUNDS 2003 ANNUAL REPORT
For the remaining Funds, the advisory fee is comprised of a base fee and a
performance adjustment that increases or decreases the total fee depending upon
the performance of the Fund relative to the Fund's performance benchmark. The
Fund's base fee is accrued daily and paid monthly, based on average net assets
during the performance period. The performance period consists of the current
month plus the previous 11 months.
The performance adjustment is calculated and paid monthly by comparing the
Fund's performance to that of the Fund's performance benchmark over the 12-month
period. The annual performance adjustment is multiplied by the average net
assets of the Fund over the entire performance period, which is then multiplied
by a fraction, the numerator of which is the number of days in the month and the
denominator of which is 365 (366 in leap years). The resulting amount is then
added to (in the case of overperformance) or subtracted from (in the case of
underperformance) the base fee.
In cases where the advisory fee is comprised of a base fee and a performance
adjustment, Turner has voluntarily agreed to waive all or a portion of their
fees and to reimburse expenses in order to keep such Fund's "other expenses"
(excluding distribution fees) from exceeding a specified percentage of the
average daily net assets of the Fund on an annualized basis. Accordingly, the
base advisory fee, annual adjustment rate, over/under performance relative to
the benchmark threshold, and other expense cap are as follows:
BASE ANNUAL OTHER
ADVISORY ADJUSTMENT BENCHMARK EXPENSES
FEE RATE THRESHOLD(1) CAP
------ ---------- ------------ --------
Technology Fund 1.10% +/-0.40% +/-2.00% 0.50%
Concentrated Growth Fund 1.10 +/-0.40 +/-2.50 0.25
New Enterprise Fund 1.10 +/-0.40 +/-2.50 0.25
Financial Services Fund 1.00 +/-0.25 +/-3.00 0.40
Healthcare &
Biotechnology Fund 1.00 +/-0.25 +/-3.00 0.75
(1) SEE THE FUND'S PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION FOR MORE
INFORMATION REGARDING THE FUND'S PERFORMANCE BENCHMARK.
During the year ended September 30, 2003, the Fund's advisory fees were adjusted
in accordance with the policy described above:
BASE NET ADVISER
ADVISER PERFORMANCE FEE BEFORE
FEE ADJUSTMENT WAIVERS
------ ---------- -------
Technology Fund $187,632 $(93,813) $93,819**
Concentrated Growth Fund 442,592 (64,238) 378,354*
New Enterprise Fund 54,681 (768) 53,913**
Financial Services Fund 136,778 31,167 167,945*
Healthcare &
Biotechnology Fund 94,073 (9,975) 84,098**
* INCLUDES AN ADDITIONAL $34,622 AND $20,145 WORTH OF FEES, DUE TO A CHANGE IN
THE PERFORMANCE FEE CALCULATION FOR THE CONCENTRATED GROWTH AND FINANCIAL
SERVICES FUNDS, RESPECTIVELY. THESE AMOUNTS HAVE BEEN WAIVED BY TURNER.
** REFLECTS A REDUCTION IN FEES OF $24,293, $14,022 AND $47,693 DUE TO A CHANGE
IN THE PERFORMANCE FEE CALCULATION FOR THE TECHNOLOGY, NEW ENTERPRISE AND
HEALTHCARE & BIOTECHNOLOGY FUNDS, RESPECTIVELY.
6. INVESTMENT TRANSACTIONS:
The cost of security purchases and the proceeds from security sales, other than
short-term investments, for the year ended September 30, 2003, were as follows
(000):
PURCHASES SALES
FUND (000) (000)
- ---- --------- -----
Disciplined Large Cap
Growth Fund $136,283 $135,310
Large Cap Growth
Opportunities Fund 8,905 11,126
Midcap Growth Fund 1,257,931 1,277,033
Small Cap Growth Fund 298,194 313,397
Micro Cap Growth Fund 281,843 257,731
Large Cap Value Fund 2,542 2,806
Core Value Fund 28,841 31,268
Small Cap Value Fund 199,843 342,448
Small Cap Value
Opportunities Fund 8,322 4,499
Small Cap Equity Fund 26,029 24,672
Technology Fund 77,797 77,285
Concentrated Growth Fund 264,849 261,216
New Enterprise Fund 33,123 26,345
Financial Services Fund 19,557 18,362
Healthcare & Biotechnology Fund 32,909 30,453
Tax Managed U.S. Equity Fund 9,678 10,270
Strategic Value and
High Income Fund 918 496
High Yield Fund 20,669 21,889
PURCHASES (000) SALES (000)
FUND GOV'T OTHER GOV'T OTHER
- ---- ----- ----- ----- -----
Core Fixed
Income Fund $ 14,061 $ 7,245 $ 12,820 $ 5,514
Total Return Fixed
Income Fund 13,199 383 16,643 508
Ultra Short Duration
Fixed Income Fund 357,099 734 334,125 16,227
Short Duration Fixed
Income Fund 349,060 22,543 319,721 27,484
TURNER FUNDS 2003 ANNUAL REPORT 135
NOTES TO FINANCIAL STATEMENTS
7. FEDERAL TAX POLICIES AND INFORMATION:
Each of the Funds is classified as a separate taxable entity for Federal income
tax purposes. Each of the Funds intends to continue to qualify as a separate
"regulated investment company" under the Internal Revenue Code and make the
requisite distributions to shareholders that will be sufficient to relieve it
from Federal income tax and Federal excise tax. Therefore, no Federal tax
provision is required. To the extent that distributions from net investment
income and net realized capital gains exceed amounts reported in the financial
statements, such amounts are reported separately.
The amounts of distributions from net investment income and net realized capital
gains are determined in accordance with Federal income tax regulations, which
may differ from those amounts determined under accounting principles generally
accepted in the United States of America. These book/tax differences are either
temporary or permanent in nature. These differences are primarily due to wash
sales. The character of distributions made during the year from net investment
income or net realized gains, and the timing of distributions where the fiscal
year in which the amounts are distributed may differ from the year that the
income or realized gains (losses) were recorded by the Fund. To the extent these
differences are permanent, adjustments are made to the appropriate equity
accounts in the period that the differences arise.
Accordingly, the following permanent differences have been reclassified to/from
the following accounts (000):
UNDISTRIBUTED ACCUMULATED
FUND NET INVESTMENT INCOME NET REALIZED GAIN PAID-IN-CAPITAL
- ---- --------------------- ----------------- ---------------
Large Cap Growth Opportunities Fund $ 25 $ -- $ (25)
Midcap Growth Fund 5,270 -- (5,270)
Small Cap Growth Fund 1,277 -- (1,277)
Micro Cap Growth Fund 1,562 -- (1,562)
Small Cap Value Fund 109 -- (109)
Small Cap Value Opportunities Fund 4 (4) --
Small Cap Equity Fund 30 (30) --
Technology Fund 145 -- (145)
Concentrated Growth Fund 312 -- (312)
New Enterprise Fund 57 -- (57)
Financial Services Fund 26 (26) --
Healthcare & Biotechnology Fund 136 -- (136)
Tax Managed U.S. Equity Fund 18 -- (18)
Core Fixed Income Fund 113 (113) --
Total Return Fixed Income Fund 2 (2) --
Ultra Short Duration Fixed Income Fund 5,945 (5,945) --
Short Duration Fixed Income Fund 2,418 (2,418) --
136 TURNER FUNDS 2003 ANNUAL REPORT
The tax character of dividends and distributions paid during the periods ended
September 30, 2003 and September 30, 2002 (unless otherwise noted) were as
follows (000):
ORDINARY LONG-TERM RETURN OF
INCOME CAPITAL GAIN CAPITAL TOTAL
---------- -------------- ----------- -------
Disciplined Large Cap Growth Fund
2003 $ 3 $ -- $-- $ 3
2002 -- -- -- --
Large Cap Value Fund
2003 39 -- -- 39
2002 55 -- -- 55
Core Value Fund
2003 189 -- -- 189
2002 1,674 5,803 -- 7,477
Small Cap Value Fund
2003 315 -- 109 424
2002 1,431 -- -- 1,431
Small Cap Value Opportunities Fund
2003 1 -- -- 1
2002 -- -- -- --
Small Cap Equity Fund
2003 6 -- -- 6
2002 -- -- -- --
Financial Services Fund
2003 -- 136 -- 136
2002(1) 17 5,044 -- 5,061
2001(2) -- -- -- --
Healthcare & Biotechnology Fund
2003 -- -- -- --
2002 11 -- -- 11
Strategic Value and High Income Fund
2003(3) 4 -- -- 4
Core Fixed Income Fund
2003 1,934 108 -- 2,042
2002 1,895 -- -- 1,895
Total Return Fixed Income Fund
2003 153 158 -- 311
2002 603 9 -- 612
High Yield Fund
2003 709 -- -- 709
2002 1,563 -- -- 1,563
Ultra Short Duration Fixed Income Fund
2003 10,584 483 -- 11,067
2002 5,936 -- -- 5,936
Short Duration Fixed Income Fund
2003 8,475 563 -- 9,038
2002 4,945 -- -- 4,945
(1) FROM THE PERIOD NOVEMBER 1, 2001 THROUGH SEPTEMBER 30, 2002.
(2) FROM THE PERIOD MAY 1, 2001 THROUGH OCTOBER 31, 2001. THE TITAN FINANCIAL
SERVICES FUND CHANGED ITS FISCAL YEAR END FROM APRIL 30 TO OCTOBER 31.
(3) COMMENCED OPERATIONS ON OCTOBER 31, 2002.
TURNER FUNDS 2003 ANNUAL REPORT 137
NOTES TO FINANCIAL STATEMENTS
As of September 30, 2003, the components of distributable earnings (accumulated
losses) on a tax basis were as follows (000):
TOTAL
DISTRIBUTABLE
UNDISTRIBUTED UNDISTRIBUTED CAPITAL POST- OTHER EARNINGS
ORDINARY LONG-TERM LOSS OCTOBER UNREALIZED TEMPORARY (ACCUMULATED
INCOME CAPITAL GAIN CARRYFORWARD LOSSES APPRECIATION DIFFERENCES LOSSES)
------------- ------------ ------------ ------- ------------ ----------- ------------
Disciplined Large Cap Growth Fund $ 19 $ -- $ (33,893) $ -- $ 7,565 $ -- $ (26,309)
Large Cap Growth Opportunities Fund -- -- (13,569) -- 330 -- (13,239)
Midcap Growth Fund -- -- (690,557) -- 120,632 -- (569,925)
Small Cap Growth Fund -- -- (183,242) -- 33,025 -- (150,217)
Micro Cap Growth Fund -- 2,024 -- -- 52,630 (1) 54,653
Large Cap Value Fund 7 -- (673) (236) 63 (7) (846)
Core Value Fund 16 1,166 -- -- 5,979 (16) 7,145
Small Cap Value Fund -- -- (53,641) (12,658) 24,105 -- (42,194)
Small Cap Value Opportunities Fund 65 -- -- -- 343 -- 408
Small Cap Equity Fund 582 166 -- -- 1,388 -- 2,136
Technology Fund -- -- (133,052) -- 1,636 -- (131,416)
Concentrated Growth Fund -- -- (160,332) -- 787 -- (159,545)
New Enterprise Fund -- -- (9,219) -- 714 -- (8,505)
Financial Services Fund 1,039 93 -- -- 1,560 -- 2,692
Healthcare & Biotechnology Fund -- -- (94) -- 1,724 -- 1,630
Tax Managed U.S. Equity Fund -- -- (2,689) -- 845 -- (1,844)
Strategic Value and High Income Fund 7 -- -- -- 16 (2) 21
Core Fixed Income Fund 147 -- (6) (360) 2,418 (148) 2,051
Total Return Fixed Income Fund 12 -- (7) (129) 11 (3) (116)
High Yield Fund 42 -- (15,805) -- 565 (42) (15,240)
Ultra Short Duration Fixed Income Fund 541 -- -- (5,825) 3,130 (726) (2,880)
Short Duration Fixed Income Fund 497 -- -- (1,176) 1,741 (518) 544
Post-October losses represent losses realized on investment transactions from
November 1, 2002 through September 30, 2003 that, in accordance with Federal
income tax regulations, a Fund may elect to defer and treat as having arisen in
the following year. For Federal income tax purposes, capital loss carryforwards
may be carried forward and applied against future capital gains.
At September 30, 2003, the Funds had capital loss carryforwards available to
offset future realized capital gains through the indicated expiration
dates (000):
EXPIRING SEPTEMBER 30,
---------------------------------------------------------------------------------------
2007 2008 2009 2010 2011 TOTAL
------------------------------------------------------------------ ------------------
Disciplined Large Cap Growth Fund $ -- $ -- $ 468 $ 18,287 $ 15,138 $ 33,893
Large Cap Growth Opportunities Fund -- -- 2,029 8,526 3,014 13,569
Midcap Growth Fund -- -- 44,477 516,580 129,500 690,557
Small Cap Growth Fund -- -- 26,939 130,308 25,995 183,242
Large Cap Value Fund -- -- 65 320 288 73
Small Cap Value Fund -- -- -- 2,255 51,386 53,641
Technology Fund -- -- 16,482 108,584 7,986 133,052
Concentrated Growth Fund -- -- 14,953 132,529 12,850 160,332
New Enterprise Fund -- -- 1,651 7,183 385 9,219
Healthcare & Biotechnology Fund -- -- -- -- 94 94
Tax Managed U.S. Equity Fund -- -- -- 870 1,819 2,689
Core Fixed Income Fund -- -- -- -- 6 6
Total Return Fixed Income Fund -- -- -- -- 7 7
High Yield Fund 1,140 2,916 2,590 4,590 4,569 15,805
138 TURNER FUNDS 2003 ANNUAL REPORT
During the year ended September 30, 2003, the Microcap Growth Fund utilized
capital loss carryforwards of $5,961,448 to offset capital gains.
At September 30, 2003, the total cost of securities for Federal income tax
purposes and the aggregate gross unrealized appreciation and depreciation for
the securities held by the Funds were as follows (000):
NET
FEDERAL UNREALIZED UNREALIZED UNREALIZED
FUND TAX COST APPRECIATION DEPRECIATION APPRECIATION
- --- -------- ------------ ------------ ------------
Disciplined Large Cap Growth Fund $ 72,523 $ 9,864 $ (2,299) $ 7,565
Large Cap Growth Opportunities Fund 3,305 431 (101) 330
Midcap Growth Fund 719,874 132,408 (11,776) 120,632
Small Cap Growth Fund 174,582 36,977 (3,952) 33,025
Micro Cap Growth Fund 221,457 57,968 (5,338) 52,630
Large Cap Value Fund 4,756 440 (377) 63
Core Value Fund 41,562 7,712 (1,733) 5,979
Small Cap Value Fund 391,842 58,045 (33,940) 24,105
Small Cap Value Opportunities Fund 5,507 455 (112) 343
Small Cap Equity Fund 10,702 1,645 (257) 1,388
Technology Fund 19,439 2,481 (845) 1,636
Concentrated Growth Fund 49,489 2,703 (1,916) 787
New Enterprise Fund 13,133 1,261 (547) 714
Financial Services Fund 15,868 1,904 (344) 1,560
Healthcare & Biotechnology Fund 12,815 1,961 (237) 1,724
Tax Managed U.S. Equity Fund 4,856 903 (58) 845
Strategic Value and High Income Fund 429 19 (3) 16
Core Fixed Income Fund 40,356 2,504 (86) 2,418
Total Return Fixed Income Fund 280 11 -- 11
High Yield Fund 8,991 580 (15) 565
Ultra Short Duration Fixed Income Fund 463,705 4,143 (1,013) 3,130
Short Duration Fixed Income Fund 253,388 2,888 (1,147) 1,741
8. CONCENTRATIONS/RISKS:
Certain Funds invest a high percentage of their assets in specific sectors of
the market in order to achieve a potentially greater investment return. As a
result, the Funds may be more susceptible to economic, political, and regulatory
developments in a particular sector of the market, positive or negative, and may
experience increased volatility on the Fund's net asset value and magnified
effect on the total return.
9. FUND MERGERS/REORGANIZATIONS:
On November 12, 2001, all the assets and liabilities of the Professionally
Managed Portfolios - Titan Financial Services Fund (the "Titan Fund") were
transferred into the Turner Financial Services Fund. Under the Plan of
Reorganization, 1,277,621 shares of the Turner Financial Services Fund were
issued for net assets of $15,606,228 (including unrealized appreciation of
$1,419,384) of the Titan Financial Services Fund in a tax-free exchange. The
value of the Turner Financial Services Fund was $450,959 which included
undistributed net investment income of $3,155, accumulated gains of $25,016 and
unrealized losses of $2,281. Under the Plan of Reorganization, the Titan Fund is
the accounting survivor, and the financial reporting subsequent to November 12,
2001 reflects the performance and accounting history of the Titan Fund.
On August 17, 2002, the Mercury Select Growth Fund reorganized into the Turner
Large Cap Growth Opportunities Fund. This reorganization was accomplished in two
steps. The Mercury Select Growth Fund historically invested all of its assets in
the corresponding portfolio of Mercury Master Trust in a "master/feeder"
structure. The Mercury Select Growth Fund received a distribution of all of the
assets and liabilities of the Mercury Master Trust in return for the Mercury
Select Growth Fund's interests in the master portfolio in a "redemption-in-kind"
transaction. Immediately after
TURNER FUNDS 2003 ANNUAL REPORT 139
NOTES TO FINANCIAL STATEMENTS
this redemption, the Mercury Select Growth Fund Class I, A, B and C transferred
all of its assets and liabilities to the Turner Large Cap Growth Opportunities
Fund Class I. Under the Agreement and Plan of Reorganization, 710,025 shares of
the Turner Large Cap Growth Opportunities Fund were issued for net assets of
$5,852,119 (including unrealized appreciation of $13,903) of the Mercury Select
Growth Fund in a tax-free exchange. The value of the Turner Large Cap Growth
Opportunities Fund was $5,852,119, which included unrealized gains of $13,903.
The financial reporting prior to August 17, 2002 reflects the performance and
accounting history of the Mercury Select Growth Fund.
In a tax-free reorganization, the Penn Capital Strategic High Yield Bond Fund
(part of the Turner Funds) transferred all of its assets and liabilities into
the Turner High Yield Fund on May 1, 2002.
10. LOANS OF PORTFOLIO SECURITIES:
The Funds may lend securities in their portfolio pursuant to a securities
lending agreement ("Lending Agreement") with Goldman Sachs & Co. Unless
otherwise agreed, security loans made pursuant to the Lending Agreement are
required at all times to be secured by collateral equal to at least 100% of the
market value of the securities loaned. Cash collateral received is invested
pursuant to the terms approved by the board of trustees. All such investments
are made at the risk of the Funds and, as such, the Funds are liable for
investment losses. The Funds are receiving an annual fee for their participation
in the Lending Agreement.
In the event of bankruptcy of the borrower, realization/ retention of the
collateral may be subject to legal proceedings.
Cash collateral received in connection with securities lending is invested in
Boston Global Investment Trust -- Quality Portfolio.
140 TURNER FUNDS 2003 ANNUAL REPORT
REPORT OF INDEPENDENT AUDITORS
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES
TURNER FUNDS:
We have audited the accompanying statements of net assets of Turner Disciplined
Large Cap Growth Fund, Turner Midcap Growth Fund, Turner Small Cap Growth Fund,
Turner Micro Cap Growth Fund, Turner Large Cap Value Fund, Turner Core Value
Fund, Turner Small Cap Value Fund, Turner Small Cap Value Opportunities Fund,
Turner Technology Fund, Turner Concentrated Growth Fund, Turner New Enterprise
Fund, Turner Financial Services Fund, Turner Healthcare & Biotechnology Fund,
Turner Tax Managed U.S. Equity Fund, Turner Strategic Value and High Income
Fund, Turner Core Fixed Income Fund, Turner Total Return Fixed Income Fund,
Turner High Yield Fund, Turner Ultra Short Duration Fixed Income Fund and Turner
Short Duration Fixed Income Fund and the statements of assets and liabilities,
including the schedule of investments, of Turner Large Cap Growth Opportunities
Fund and Turner Small Cap Equity Fund, (collectively, the "Turner Funds") as of
September 30, 2003, and the related statements of operations, the statements of
changes in net assets, and the financial highlights for the periods presented
therein, except for the financial statements and financial highlights for the
periods ending prior to October 31, 2001 for the Turner Financial Services Fund
and the financial highlights for the years ended September 30, 2001 and
September 30, 2000 for the Turner Large Cap Growth Opportunities Fund. These
financial statements and financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
statements and financial highlights for the periods ending prior to October 31,
2001 for the Turner Financial Services Fund and the financial highlights for the
years ended September 30, 2001 and September 30, 2000 for the Turner Large Cap
Growth Opportunities Fund were audited by other auditors whose reports dated
June 14, 2001 and November 13, 2001, respectively, expressed unqualified
opinions on those financial statements and financial highlights.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of September 30, 2003, by correspondence with the custodian and brokers
or by other appropriate auditing procedures where replies from brokers were not
received. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Turner Funds at September 30, 2003, the results of their operations, the changes
in their net assets and their financial highlights for each of the periods
presented therein, except for the financial statements and financial highlights
for the periods ending prior to October 31, 2001 for the Turner Financial
Services Fund and the financial highlights for the years ended September 30,
2001 and September 30, 2000 for the Turner Large Cap Growth Opportunities Fund
which were audited by other auditors, in conformity with accounting principles
generally accepted in the United States.
/S/ERNST & YOUNG LLP
Philadelphia, Pennsylvania
November 13, 2003
TURNER FUNDS 2003 ANNUAL REPORT 141
NOTICE TO SHAREHOLDERS (Unaudited)
For shareholders that do not have a September 30, 2003 tax year end, this notice
is for informational purposes only. For shareholders with a September 30, 2003
year end, please consult your tax advisor as to the pertinance of this notice.
For the fiscal year ended September 30, 2003, each Fund is designating the
following items with regard to distributions paid during the year.
DIVIDENDS
LONG LONG QUALIFYING
TERM TERM FOR
(20% RATE) (15% RATE) QUALIFIED CORPORATE
CAPITAL CAPITAL 5-YEAR ORDINARY TAX- DIVIDENDS QUALIFYING
GAIN GAIN GAIN INCOME EXEMPT TOTAL RECEIVABLE DIVIDENDS
DISTRIBUTION DISTRIBUTION DISTRIBUTION DISTRIBUTIONS INTEREST DISTRIBUTIONS DEDUCTION(1) INCOME(2)
------------ ------------ ------------ ------------- -------- ------------- ------------ ---------
Disciplined Large Cap
Growth Fund 0.00% 0.00% 0.00% 100.00% 0.00% 100.00% 100.00% 19.60%
Large Cap Growth
Opportunities Fund 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Midcap Growth Fund 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Small Cap Growth Fund 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Micro Cap Growth Fund 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Large Cap Value Fund 0.00% 0.00% 0.00% 100.00% 0.00% 100.00% 99.83% 68.95%
Core Value Fund 0.00% 0.00% 0.00% 100.00% 0.00% 100.00% 83.43% 69.67%
Small Cap Value Fund 0.00% 0.00% 0.00% 100.00% 0.00% 100.00% 100.00% 58.86%
Small Cap Value
Opportunities Fund 0.00% 0.00% 0.00% 100.00% 0.00% 100.00% 9.28% 3.77%
Small Cap Equity Fund 0.00% 0.00% 0.00% 100.00% 0.00% 100.00% 14.37% 7.29%
Technology Fund 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Concentrated Growth Fund 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
New Enterprise Fund Fund 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Financial Services Fund 100.00% 0.00% 0.00% 0.00% 0.00% 100.00% 0.00% 0.00%
Healthcare &
Biotechnology Fund 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Tax Managed U.S.
Equity Fund 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Strategic Value and
High Income Fund 0.00% 0.00% 0.00% 100.00% 0.00% 100.00% 0.00% 0.00%
Core Fixed Income Fund 4.24% 0.00% 1.01% 94.75% 0.00% 100.00% 0.00% 0.00%
Total Return Fixed
Income Fund 48.01% 0.00% 0.00% 51.99% 0.00% 100.00% 0.00% 0.00%
High Yield Fund 0.00% 0.00% 0.00% 100.00% 0.00% 100.00% 0.00% 0.00%
Ultra Short Duration
Fixed Income Fund 4.36% 0.00% 0.00% 95.64% 0.00% 100.00% 0.00% 0.00%
Short Duration
Fixed Income Fund 6.21% 0.00% 0.00% 93.79% 0.00% 100.00% 0.00% 0.00%
<FN>
(1) Qualifying dividends represent dividends which qualify for the corporate dividends received deduction and is
reflected as a percentage of "Ordinary Income Distributions".
(2) The percentage in this column represents the amount of "Qualifying Dividend Income" as created by the Jobs and
Growth Tax Relief Reconciliation Act of 2003 and is reflected as a percentage of "Ordinary Income Distribuions".
It is the intention of each of the aforementioned Funds to designate the maximum amount permitted by law.
</FN>
142 TURNER FUNDS 2003 ANNUAL REPORT
TRUSTEES AND OFFICERS OF THE TRUST (Unaudited)
TERM OF
OFFICE NUMBER OF
AND PORTFOLIOS IN
POSITION LENGTH COMPLEX OTHER
HELD WITH OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN DIRECTORSHIPS
NAME, ADDRESS, AND AGE THE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE HELD
- ------------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE*
- ------------------------------------------------------------------------------------------------------------------------------------
Robert E. Turner Trustee Trustee Chairman and Chief Investment Officer - 22 ACP Funds,
1205 Westlakes Drive since 1996 Growth Equities of Turner since 1990. Bradley University,
Suite 100 Episcopal Academy,
Berwyn, PA 19312 Westlakes
(47) Institutional
Portfolios
- ------------------------------------------------------------------------------------------------------------------------------------
*Mr. Turner is deemed to be an "Interested Trustee" by virtue of his relationship with Turner Investment Partners, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
NON-INTERESTED TRUSTEES
- ------------------------------------------------------------------------------------------------------------------------------------
Alfred C. Salvato Trustee Trustee Treasurer, Thomas Jefferson University 22 Alpha Select
13 Fountain Court since 1996 Health Care Pension Fund since 1995, and Funds
Cherry Hill, NJ 08034 Assistant Treasurer, 1988-1995.
(45)
- ------------------------------------------------------------------------------------------------------------------------------------
Janet F. Sansone Trustee Trustee Self-employed. Consultant since 1999. 22 N/A
1023 North Pitt Street since 1997 Senior Vice President of Human Resources
Alexandria, VA 22314-1525 of Frontier Corporation (telecommunica-
(58) tions company), (1993-1999).
- ------------------------------------------------------------------------------------------------------------------------------------
Dr. John T. Wholihan Trustee Trustee Professor and Dean, Loyola Marymount 22 TDK Mediactive
1 LMU Boulevard since 1996 University, since 1984. Director, TDK
Los Angeles, CA 90045-8395 Mediactive.
(65)
- ------------------------------------------------------------------------------------------------------------------------------------
EXECUTIVE OFFICERS
- ------------------------------------------------------------------------------------------------------------------------------------
Stephen J. Kneeley President President Chief Executive Officer of Turner, N/A N/A
1205 Westlakes Drive and Chief and Chief President of Turner, Chief Operating
Suite 100 Executive Executive Officer of Turner, 1990-2001, TID Director.
Berwyn, PA 19312 Officer Officer
(40) since 1997
- ------------------------------------------------------------------------------------------------------------------------------------
John H. Grady, Jr. Executive Vice Chief Legal Officer of Turner since N/A N/A
1205 Westlakes Drive Vice President February 2001, Chief Operating Officer
Suite 100 President & & and General Counsel from February 2001
Berwyn, PA 19312 Secretary Secretary to August 2003. TID President and Chief
(42) since 2001 Operating Officer since September 2001.
Partner, Morgan, Lewis & Bockius LLP
(October 1995-January 2001).
- ------------------------------------------------------------------------------------------------------------------------------------
Brian M. Ferko Vice Vice TID Vice President, Director of Mutual N/A N/A
1205 Westlakes Drive President & President & Fund Administration and Operations for
Suite 100 Assistant Assistant the Turner Funds since 1997. Relationship
Berwyn, PA 19312 Secretary Secretary Manager, SEI Investments (1995-1997).
(32) since 2000
- ------------------------------------------------------------------------------------------------------------------------------------
Todd B. Cipperman Vice Vice Vice President and Assistant Secretary of N/A N/A
SEI Investments, President President SEI Investments since 1995. Previously,
One Freedom and and Associate, Dewey Ballantine, 1994-1995.
Valley Drive Assistant Assistant Associate, Winston and Strawn, 1991-1994.
Oaks, PA 19456 Secretary Secretary
(36) since 1996
- ------------------------------------------------------------------------------------------------------------------------------------
Peter Golden Controller Controller Director of Fund Accounting of SEI N/A N/A
SEI Investments, and Chief and Chief Investments since June 2001. Previously,
One Freedom Financial Financial Vice President of Fund Administration, J.P.
Valley Drive Officer Officer Morgan Chase & Co., March 2000 to April
Oaks, PA 19456 since 2001 2001; Vice President, Fund and Pension
(39) Accounting, Chase Manhattan Bank, June
1997 to March 2000.
- ------------------------------------------------------------------------------------------------------------------------------------
TURNER FUNDS 2003 ANNUAL REPORT 143
TERM OF
OFFICE NUMBER OF
AND PORTFOLIOS IN
POSITION LENGTH COMPLEX OTHER
HELD WITH OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN DIRECTORSHIPS
NAME, ADDRESS, AND AGE THE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE HELD
- ------------------------------------------------------------------------------------------------------------------------------------
EXECUTIVE OFFICERS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
Lydia A. Gavalis Vice Vice Vice President and Assistant Secretary of SEI N/A N/A
SEI Investments, President President Investments since 1998. Assistant General
One Freedom and and Counsel and Director of Arbitration,
Valley Drive Assistant Assistant Philadelphia Stock Exchange, 1989-1998.
Oaks, PA 19456 Secretary Secretary
(39) since 1999
- ------------------------------------------------------------------------------------------------------------------------------------
William E. Zitelli, Jr. Vice Vice Vice President and Assistant Secretary of SEI N/A N/A
SEI Investments, President President Investments since August 2000. Vice
One Freedom and and President, Merrill Lynch & Co. Asset
Valley Drive Assistant Assistant Management Group (1998-2000). Associate at
Oaks, PA 19456 Secretary Secretary Pepper Hamilton LLP (1997-1998). Associate
(35) since 2000 at Reboul, MacMurray, Hewitt, Maynard &
Kristol (1994-1997).
- ------------------------------------------------------------------------------------------------------------------------------------
Timothy D. Barto Vice Vice Vice President and Assistant Secretary of SEI N/A N/A
SEI Investments, President President Investments since December 1999. Associate
One Freedom and and at Dechert Price & Rhoads (1997-1999).
Valley Drive Assistant Assistant Associate at Richter, Miller & Finn
Oaks, PA 19456 Secretary Secretary (1994-1997).
(35) since 2000
- ------------------------------------------------------------------------------------------------------------------------------------
Christine M. McCullough Vice Vice Vice President and Assistant Secretary of SEI N/A N/A
SEI Investments, President President Investments since December 1999. Associate
One Freedom and and at White and Williams LLP (1991-1999).
Valley Drive Assistant Assistant Associate at Montgomery, McCracken, Walker
Oaks, PA 19456 Secretary Secretary & Rhoads (1990-1991).
(42) since 2000
- ------------------------------------------------------------------------------------------------------------------------------------
Brian McNally Vice Vice Deputy General Counsel for Turner since N/A N/A
1205 Westlakes Drive President President 2002. Previously Assistant General Counsel
Suite 100 since 2002 with Bank of America (September 1997-
Berwyn, PA 19312 July 2002).
(45)
- ------------------------------------------------------------------------------------------------------------------------------------
John Canning Vice Vice Assistant Director of Mutual Fund N/A N/A
1205 Westlakes Drive President President Administration and Operations since 2000.
Suite 100 since 2002 Previously Implementations Analyst with
Berwyn, PA 19312 SEI Investments (December 1998-
(32) December 2000). Transfer Agent Manager
with Pilgrim Baxter and Associates
(February 1998-December 1998).
Account Director with SEI Investments
(July 1993-February 1998).
- ------------------------------------------------------------------------------------------------------------------------------------
Antoinette Robbins Vice Vice Director of Compliance for Turner since N/A N/A
1205 Westlakes Drive President President 2002. Previously Senior Gift Planning Officer
Suite 100 since 2002 with American Civil Liberties Union (May
Berwyn, PA 19312 2001-August 2001). Assistant Vice President,
(40) Consultants, Inc. (March 1996-May 2001).
- ------------------------------------------------------------------------------------------------------------------------------------
144 TURNER FUNDS 2003 ANNUAL REPORT
TURNER FUNDS
TURNER FUNDS TRUSTEES
ALFRED C. SALVATO
Treasurer
Thomas Jefferson University Health Care Pension Fund
JANET F. SANSONE
Consultant
ROBERT E. TURNER
Chairman and Chief Investment Officer -
Growth Equities
Turner Investment Partners, Inc.
DR. JOHN T. WHOLIHAN
Professor and Dean, College of Business
Loyola Marymount University
INVESTMENT ADVISERS
TURNER INVESTMENT PARTNERS, INC.
TURNER INVESTMENT MANAGEMENT, LLC
Berwyn, Pennsylvania
DISTRIBUTOR
TURNER INVESTMENT DISTRIBUTORS, INC.
Berwyn, Pennsylvania
ADMINISTRATOR
TURNER INVESTMENT PARTNERS, INC.
Berwyn, Pennsylvania
LEGAL COUNSEL
MORGAN, LEWIS & BOCKIUS LLP
Philadelphia, Pennsylvania
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
THIS REPORT WAS PREPARED FOR SHAREHOLDERS OF THE TURNER FUNDS. IT MAY BE
DISTRIBUTED TO OTHERS ONLY IF PRECEDED OR ACCOMPANIED BY A TURNER FUNDS'
PROSPECTUS, WHICH CONTAINS DETAILED INFORMATION. ALL TURNER FUNDS ARE OFFERED BY
PROSPECTUS ONLY.
TURNER
FUNDS
TURNER FUNDS
P.O. Box 219805
Kansas City, MO 64121-9805
Telephone: 1-800-224-6312
Email:# mutualfunds@turnerinvestments.com
Web Site: www.turnerinvestments.com
TUR-AR-001-0300
Item 2. Code of Ethics.
The registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer and principal
accounting officer.
Item 3. Audit Committee Financial Expert.
The Board of Trustees of the Turner Funds has determined that the Board's Audit
Committee does not have an "audit committee financial expert," as the Securities
and Exchange Commission has defined that term. After carefully considering all
of the factors involved in the definition of "audit committee financial expert,"
the Board determined that none of the members of the audit committee met all
five qualifications in the definition, although some members of the Audit
Committees met some of the qualifications. The Board also determined that while
the Audit Committee members have general financial expertise, given the size and
types of the Turner Funds and in light of the nature of the accounting and
valuation issues they have presented over the past several years, it did not
appear that the Audit Committee members lacked any necessary skill to serve on
the Audit Committee.
Item 4. Principal Accountant Fees and Services.
Not applicable - only effective for annual reports for periods ending on or
after December 15, 2003.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. (Reserved)
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. (Reserved)
Item 9. Controls and Procedures.
(a) The certifying officers, whose certifications are included herewith, have
evaluated the registrant's disclosure controls and procedures within 90 days of
the filing date of this report. In their opinion, based on their evaluation, the
registrant's disclosure controls and procedures are adequately designed, and are
operating effectively to ensure, that information required to be disclosed by
the registrant in the reports it files or submits under the Securities Exchange
Act of 1934 is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission's rules and forms.
(b) There were no significant changes in the registrant's internal control over
financial reporting that occurred during the registrant's last fiscal half-year
that has materially affected, or is reasonably likely to materially affect, the
registrants internal control over financial reporting.
Items 10. Exhibits.
(a)(1) Code of Ethics attached hereto.
(a)(2) A separate certification for the principal executive officer and the
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), are filed
herewith.
(b) Officer certifications as required by Rule 30a-2(b) under the Investment
Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany this filing
as an Exhibit.
SIGNATURES
Pursuant to the requirements of the securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Turner Funds
By (Signature and Title)* /s/ Stephen J. Kneeley
-------------------------------------
Stephen J. Kneeley, President and CEO
Date 11/20/03
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/ Stephen J. Kneeley
-------------------------------------
Stephen J. Kneeley, President and CEO
Date 11/20/03
By (Signature and Title)* /s/ Peter J. Golden
-------------------------------------
Peter J. Golden, Controller and CFO
Date 11/20/03
* Print the name and title of each signing officer under his or her signature.