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 811-07527
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, 2007
DATE OF REPORTING PERIOD: SEPTEMBER 30, 2007
ITEM 1. REPORTS TO STOCKHOLDERS.
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[TURNER FUNDS LOGO] ANNUAL REPORT
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September 30, 2007
Turner Concentrated Growth Fund
Turner Core Growth Fund
Turner Emerging Growth Fund
Turner International Core Growth Fund
Turner Large Cap Growth Fund
Turner Large Cap Value Fund
Turner Midcap Equity Fund
Turner Midcap Growth Fund
Turner New Enterprise Fund
Turner Small Cap Equity Fund
Turner Small Cap Growth Fund
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CONTENTS
2 Letter to shareholders
6 Total returns of Turner Funds
8 Investment review:
Turner Concentrated Growth Fund
9 Investment review:
Turner Core Growth Fund
10 Investment review:
Turner Emerging Growth Fund
11 Investment review:
Turner International Core Growth Fund
12 Investment review:
Turner Large Cap Growth Fund
13 Investment review:
Turner Large Cap Value Fund
14 Investment review:
Turner Midcap Equity Fund
15 Investment review:
Turner Midcap Growth Fund
16 Investment review:
Turner New Enterprise Fund
17 Investment review:
Turner Small Cap Equity Fund
18 Investment review:
Turner Small Cap Growth Fund
19 Financial statements
54 Notes to financial statements
61 Report of independent registered public
accounting firm
62 Notice to shareholders
63 Trustees and officers of the Trust
64 Disclosure of fund expenses
TURNER FUNDS
As of September 30, 2007, the Turner Funds offered a series of 11 mutual funds
to individual and institutional investors. The minimum initial investment for
Institutional Class Shares in a Turner Fund is $250,000 ($25,000 for Turner
Large Cap Value Fund) for regular accounts and $100,000 ($10,000 for Turner
Large Cap Value Fund) for individual retirement accounts. The minimum initial
investment for Investor Class Shares and Retirement Class Shares is $2,500 for
regular accounts and $2,000 for individual retirement accounts.
Turner Investment Partners, Inc., based in Berwyn, Pennsylvania, serves as the
investment adviser for the Funds (other than the Turner Small Cap Equity Fund
and Turner Midcap Equity Fund). Turner Investment Partners, Inc., founded in
1990, manages about $27 billion in stock investments. Turner Investment
Management LLC, a subsidiary of Turner Investment Partners, Inc., serves as the
investment adviser for the Turner Small Cap Equity Fund and Turner Midcap Equity
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, may
visit our website, www.turnerinvestments.com, or may write to Turner Funds, P.O.
Box 219805, Kansas City, Missouri 64121-9805.
TURNER FUNDS 2007 ANNUAL REPORT | 1
LETTER TO SHAREHOLDERS
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TO OUR SHAREHOLDERS
The 12 months ended September 30, 2007 were very good months indeed for the
Turner Funds: 10 of our 11 funds outperformed their benchmarks.
It might be tempting to gloat a bit about such a broad-based record of
outperformance, but less brash and more experienced investment managers know
it's a temptation that best remains unconsummated.
For one thing, in money management, hubris inevitably is succeeded by humility.
Investment performance can take on certain dismaying vestiges of the Old
Testament pattern of years of great plenty followed by years of famine. That is,
no investment manager, no matter how good he or she may be, outperforms all the
time. So we think it's prudent to not blow our own horn too loudly over our
results of the last 12 months.
RESULTS WERE AS EXPECTED
For another thing, our funds, most of them growth funds, delivered the kind of
performance that we -- and perhaps you -- expected. Our eight growth funds tend
to do best when growth investing is in favor. And growth investing was
definitely in favor over the past 12 months: the broad-based Russell 3000 Growth
Index soared 19.31% -- a performance premium of 5.58 percentage points over the
Russell 3000 Value Index.
It's often joked that economists have predicted five of the last three
recessions. Like economists, we had been steadfast in maintaining that growth
stocks were due for a run of outperformance -- even as value continued to widen
its performance lead over growth in year after year of this decade.
For almost seven long years, growth was the bridesmaid to value's bride. Even
when the bear market ended in late 2002 and the bull market picked up force in
2003, value somewhat atypically continued to beat growth. Value benefited from a
streak of exceptional earnings: the companies in the S&P 500 Index reported
double-digit earnings increases for a record 19 straight quarters, a streak that
didn't end until the first quarter of 2007. With earnings so robust, investors
saw little point in paying up for growth companies, which had richer share
valuations than their value counterparts did.
VALUE'S RUN COULDN'T LAST
But as the late economist Herbert Stein once observed, in a principle he called
Stein's Rule: "If something can't go on forever, it won't last." The persistent,
chronic magnitude of underperformance of growth stocks couldn't go on forever.
For instance, the Russell growth indexes lagged the Russell value indexes by 12
percentage points or more annualized over the five-year period ended in 2005 --
the biggest performance gap in modern times. And that DIDN'T last.
So finally we got it right about growth in the past 12 months. As we see it,
growth returned to favor in no small part because of the deceleration in
earnings growth: as corporate earnings growth dipped below 10% in 2007 and as
companies with above-average growth rates became more scarce, investors
gravitated to bona fide growth stocks. We believe this shift to growth investing
is only in its early stages. Cycles of outperformance for both growth and value
tend to keep going for a while: the past four cycles of outperformance for
large-cap growth stocks since 1969, for example, have lasted an average of 37
months. (Of course, past performance is no guarantee of future results.)
Against an improved backdrop for growth investing, our eight growth funds
flourished: they outperformed their indexes by margins ranging from 2.51 to
18.78 percentage points. Also, one of our two core funds, the Turner Midcap
Equity Fund, which invests in mid-sized growth AND value stocks, and our value
fund, the Turner Large Cap Value Fund, which employs a proprietary quantitative
model to pick stocks, beat their benchmarks as well. So, mindful of the
principle that an investment manager should cultivate a discreet sense of
humility when performance is good because there will almost certainly be times
when performance isn't as good, we will say no more and simply let the results
speak for themselves.
Here are the specific returns for each of our funds and their benchmarks during
the past 12 months. (Please call 1.800.224.6312 or visit our Web site at
WWW.TURNERINVESTMENTS.COM for the most recent month-end performance
information.)
2 | TURNER FUNDS 2007 ANNUAL REPORT
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September 30, 2007
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TOTAL RETURNS
12-month period ended September 30, 2007
TURNER CONCENTRATED GROWTH FUND (TTOPX) 33.16%
S&P 500 Index 16.44
NASDAQ 100 Index** 27.02
Russell 1000 Growth Index 19.35
TURNER CORE GROWTH FUND,
INSTITUTIONAL CLASS (TTMEX) 24.00
S&P 500 Index** 16.44
Russell 1000 Growth Index 19.35
TURNER EMERGING GROWTH FUND (TMCGX) 25.08
Russell 2000 Growth Index 18.94
TURNER INTERNATIONAL CORE GROWTH FUND
(TICGX) 22.10*
MSCI World Growth ex-U.S. Index 17.05*
TURNER LARGE CAP GROWTH FUND,
INSTITUTIONAL CLASS (TSGEX) 21.86
Russell Top 200 Growth Index 18.68
Russell 1000 Growth Index 19.35
TURNER LARGE CAP VALUE FUND (TLVFX) 15.91
Russell 1000 Value Index 14.44
TURNER MIDCAP EQUITY FUND,
INVESTOR CLASS (TMCFX) 6.10*
Russell Midcap Index 5.90*
TURNER MIDCAP GROWTH FUND,
INVESTOR CLASS (TMGFX) 29.24
Russell Midcap Growth Index 21.22
TURNER NEW ENTERPRISE FUND (TBTBX) 39.30
NASDAQ Composite Index 20.52
TURNER SMALL CAP EQUITY FUND (TSEIX) 10.14
Russell 2000 Index 12.34
TURNER SMALL CAP GROWTH FUND (TSCEX) 26.02
Russell 2000 Growth Index 18.94
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* The return is for the period from the fund's inception, on January 31,
2007, to September 30, 2007.
** In one year effective September 30, 2008, we intend to remove this
benchmark based on our view that the remaining benchmarks are more
appropriate.
For more details on the performance of all 11 of our funds, please see the
INVESTMENT REVIEW beginning on page 8.
STOCKS CLIMB A WALL OF WORRY
To those with a bearish mindset, the market environment in which our funds
earned those returns wasn't exactly spilling over with promise.
If, as an old Wall Street cliche has it, bull markets climb a wall of worry,
there were plenty of big, formidable stones in the wall for this market to
scramble over during the 12-month period. Stones like the housing slump in which
the inventory of unsold homes reached a record 4.6 million, a 10-month supply at
the current sales rate. Continued subprime-mortgage problems that rattled
financial-services companies in the U.S. and abroad and in a few prominent cases
wiped out their profits entirely. Oil prices that hit an all-time high of
$83.90, which helped to depress consumer spending. A dollar that was at its
lowest point in a decade in relation to a broad range of currencies. And last
but not least, an economy whose growth rate was markedly slowing and in danger
of slipping below 2% annually by the end of the period.
But in spite of all that, the stock market, as represented by the S&P 500 Index,
generated a 16.44% gain during the period -- performance six percentage points
above the long-term average.
Among the reasons why the market rose: the Federal Reserve in September cut its
short-term interest rate aggressively, by one-half percentage point, to 4.75%.
In previous months, market pundits were divided over whether the Fed believed
all the credit-related problems from the housing and subprime-mortgage markets
were serious enough to justify a rate cut. But as it became clearer that the
credit problems WERE having wide-ranging economic repercussions, the Fed
responded with its first rate reduction in four years, which helped to bolster
investor psychology and helped the stock market to end the period with a strong
finishing kick.
PROFITS EXCEED EXPECTATIONS
In our view, there were other reasons for the market's good results: the global
money supply increased by about 10% annually, providing the means (or
"liquidity," to use a now-fashionable financial buzzword) for gains in stocks;
inflation eased to below 2% annually; corporate profits continue to beat Wall
Street expectations and as of the second quarter were still above the long-term
average of 7.6%; and investors perceived that the current economic expansion
could have a ways to go, by historical standards (expansions typically last
about 10 years, and this one began in 2002).
As for the near-term outlook, we think the stock market can draw strength from
the sustained growth of the global economy (4.9% growth is forecast in 2008 by
the International Monetary Fund), which should help to fortify corporate
earnings in the U.S. and abroad. We think profit growth may again hit the low
double digits in early 2008. As long as earnings stay reasonably healthy, we
think the stock market is in little danger of morphing from a bull to a bear
over the next six months at least. In our analysis, the housing slump and
subprime-loan malaise won't likely be severe enough to tip the economy into a
recession and the stock market into bearish territory.
TURNER FUNDS 2007 ANNUAL REPORT | 3
LETTER TO SHAREHOLDERS (continued)
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In this decade, the financial press has lavishly chronicled how small-cap stocks
have been the market's superstars. Actually, the small-cap hoopla has been
somewhat misdirected: it's MID-CAP stocks that have performed best: for the
eight-year period ended September 30, 2007, the Russell Midcap Index has
returned an annualized 11.58%, compared with the small-cap Russell 2000 Index's
9.60% annualized gain. In any case, we think the mid-cap and large-cap segments
appear likely to produce the best relative performance going forward. We believe
the mid-cap segment in particular remains a sweet spot. In general, mid-cap
companies are still small enough to grow at superior rates, but they're not so
small that they're dependent on just one or two products or major customers.
HOW OUR FUNDS ARE POSITIONED
In anticipation of a generally positive outlook for the stock market, we have
positioned our funds in this manner:
Our growth funds, as always, hold stocks that we think have superior earnings
power. All of our growth funds own stocks of companies whose earnings prospects
over the next 12 months in aggregate exceed those of their indexes by 20% or
more, based on Wall Street analysts' consensus forecasts compiled by I/B/E/S.
Our growth funds currently favor shares of companies in the Internet, gaming,
consulting, transaction-processing, investment-exchange, energy-services,
specialty-pharmaceutical, biotechnology, semiconductor, data-networking, and
wireless industries.
Our core and value funds, as always, own stocks that we think have either
undervalued assets or strong prospective earnings power. They have overweighted
positions in the technology sector and cyclical sectors such as
materials/processing, autos/transportation, and producer durables, which should
benefit from a prolonged economic expansion.
We can't guarantee that the results we will next report six months from now will
be as good as the recent returns. But we do guarantee that we will do our best
for you (and for us, inasmuch as our portfolio managers' own money is invested
in our funds) to achieve performance that's as good as we can possibly make it.
And we thank you for entrusting us with your money, which we realize is largely
irreplaceable. We will continue to do our utmost to be worthy of your trust.
/s/ Bob Turner
Bob Turner
CHAIRMAN AND CHIEF INVESTMENT OFFICER
TURNER INVESTMENT PARTNERS
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE VIEWS EXPRESSED ARE
THOSE OF TURNER INVESTMENT PARTNERS AS OF SEPTEMBER 30, 2007, AND ARE NOT
INTENDED AS A FORECAST OR INVESTMENT RECOMMENDATIONS. THE INDEXES MENTIONED ARE
NOT AVAILABLE FOR INVESTMENT.
[PHOTO OMITTED]
BOB TURNER
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4 | TURNER FUNDS 2007 ANNUAL REPORT
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September 30, 2007
LIPPER INC. PERFORMANCE RANKINGS OF MUTUAL FUNDS WITH AT LEAST THREE YEARS OF
HISTORY
Periods ending September 30, 2007
ONE TWO THREE FOUR FIVE SEVEN TEN
YEAR YEARS YEARS YEARS YEARS YEARS YEARS
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MULTI-CAP GROWTH FUNDS
TURNER CONCENTRATED
GROWTH FUND
Ranking versus competitors 43/518 50/442 42/416 169/380 55/349 226/241 --
Percentile ranking 8 11 10 44 16 94 --
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LARGE-CAP GROWTH FUNDS
TURNER CORE GROWTH FUND,
INSTITUTIONAL CLASS SHARES
Ranking versus competitors 147/728 71/679 6/621 7/568 5/519 -- --
Percentile ranking 20 10 1 1 1 -- --
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TURNER LARGE CAP GROWTH FUND,
INSTITUTIONAL CLASS SHARES
Ranking versus competitors 246/728 297/679 307/621 364/568 109/519 332/399 --
Percentile ranking 34 44 49 64 21 83 --
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MID-CAP GROWTH FUNDS
TURNER MIDCAP GROWTH FUND,
INVESTOR CLASS SHARES
Ranking versus competitors 151/609 185/552 114/485 165/443 43/392 205/277 6/162
Percentile ranking 25 34 24 37 11 74 4
RETIREMENT CLASS SHARES
Ranking versus competitors 157/609 209/552 139/485 202/443 65/392 -- --
Percentile ranking 26 38 29 46 17 -- --
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SCIENCE AND TECHNOLOGY FUNDS
TURNER NEW ENTERPRISE FUND
Ranking versus competitors 2/278 13/270 2/254 7/242 7/232 41/185 --
Percentile ranking 1 5 1 3 3 22 --
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SMALL-CAP GROWTH FUNDS
TURNER EMERGING GROWTH FUND
Ranking versus competitors 186/586 174/531 48/469 2/431 30/388 15/287 --
Percentile ranking 32 33 10 1 8 5 --
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TURNER SMALL CAP EQUITY FUND
Ranking versus competitors 545/586 444/531 416/469 198/431 206/388 -- --
Percentile ranking 93 84 89 46 53 -- --
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TURNER SMALL CAP GROWTH FUND
Ranking versus competitors 163/586 116/531 190/469 125/431 39/388 184/287 67/169
Percentile ranking 28 22 41 29 10 64 40
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Source: Lipper Inc.
Total return is ranking criteria. Past performance is no guarantee of future
results.
TURNER FUNDS 2007 ANNUAL REPORT | 5
PERFORMANCE
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TOTAL RETURNS OF TURNER FUNDS
Through September 30, 2007
CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA QUOTED.
PLEASE CALL (800) 224-6312 OR VISIT OUR WEBSITE AT WWW.TURNERINVESTMENTS.COM FOR
THE MOST RECENT MONTH-END PERFORMANCE INFORMATION.
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.
THE HOLDINGS AND SECTOR WEIGHTINGS OF THE FUNDS ARE SUBJECT TO CHANGE. FORWARD
EARNINGS PROJECTIONS ARE NOT PREDICTORS OF STOCK PRICE OR INVESTMENT
PERFORMANCE, AND DO NOT REPRESENT PAST PERFORMANCE. THERE IS NO GUARANTEE THAT
THE FORWARD EARNINGS PROJECTIONS WILL ACCURATELY PREDICT THE ACTUAL EARNINGS
EXPERIENCE OF ANY OF THE COMPANIES INVOLVED, AND THERE IS NO GUARANTEE THAT
OWNING SECURITIES OF COMPANIES WITH RELATIVELY HIGH PRICE-TO-EARNINGS RATIOS
WILL CAUSE THE PORTFOLIO TO OUTPERFORM ITS BENCHMARK OR INDEX.
THE TURNER FUNDS ARE DISTRIBUTED BY SEI INVESTMENTS DISTRIBUTION COMPANY, OAKS,
PA 19456. THE INVESTOR SHOULD CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES
AND EXPENSES CAREFULLY BEFORE INVESTING. THIS AND OTHER INFORMATION CAN BE FOUND
IN THE PROSPECTUS. 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.
Year (Annualized) Total
Six to One Three Five Ten Since net assets
Fund name/index months date year years years years inception ($mil)
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TURNER CONCENTRATED
GROWTH FUND 25.09% 26.82% 33.16% 20.25% 20.22% N/A 4.56% $ 61.40
S&P 500 Index 8.44 9.13 16.44 13.14 15.45 n/a 2.95
NASDAQ 100 Index 18.23 19.43 27.02 14.47 20.65 n/a (0.90)
Russell 1000 Growth Index 11.35 12.68 19.35 12.20 13.84 n/a (0.52)
INCEPTION DATE: 6/30/99
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TURNER CORE GROWTH FUND --
INSTITUTIONAL CLASS SHARES 15.49 17.37 24.00 17.91 18.16 N/A 5.79 237.78
INVESTOR CLASS SHARES** 15.38 17.27 23.68 N/A N/A N/A 15.31 37.54
S&P 500 Index 8.44 9.13 16.44 13.14 15.45 n/a 5.01
Russell 1000 Growth Index 11.35 12.68 19.35 12.20 13.84 n/a 2.19
INCEPTION DATE: 2/28/01
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TURNER EMERGING GROWTH FUND(1) 11.60 14.88 25.08 18.86 21.79 N/A 27.55 638.04
Russell 2000 Growth Index 6.71 9.35 18.94 14.10 18.70 n/a 3.96
INCEPTION DATE: 2/27/98
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TURNER INTERNATIONAL CORE
GROWTH FUND 19.94 N/A N/A N/A N/A N/A 22.10* 2.41
MSCI World Growth ex-U.S. Index 12.52 n/a n/a n/a n/a n/a 17.05*
INCEPTION DATE: 1/31/07
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TURNER LARGE CAP GROWTH FUND --
INSTITUTIONAL CLASS SHARES 15.50 16.90 21.86 12.20 14.30 N/A (5.10) 37.81
INVESTOR CLASS SHARES*** 15.33 N/A N/A N/A N/A N/A 14.36* 0.09
Russell Top 200 Growth Index 12.53 12.51 18.68 10.61 11.98 n/a (4.52)
Russell 1000 Growth Index 11.35 12.68 19.35 12.20 13.84 n/a (3.34)
INCEPTION DATE: 6/14/00
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TURNER LARGE CAP VALUE FUND 6.63 8.89 15.91 N/A N/A N/A 15.64 0.84
Russell 1000 Value Index 4.67 5.96 14.44 n/a n/a n/a 17.06
INCEPTION DATE: 10/10/05
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6 | TURNER FUNDS 2007 ANNUAL REPORT
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Year (Annualized) Total
Six to One Three Five Ten Since net assets
Fund name/index months date year years years years inception ($mil)
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TURNER MIDCAP EQUITY FUND --
INSTITUTIONAL CLASS SHARES 5.22% N/A N/A N/A N/A N/A 6.80%* $ --
INVESTOR CLASS SHARES 4.74 N/A N/A N/A N/A N/A 6.10* 0.53
Russell Midcap Index 4.89 n/a n/a n/a n/a n/a 5.90*
INCEPTION DATE: 1/31/07
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TURNER MIDCAP GROWTH FUND(1) --
INVESTOR CLASS SHARES 18.40 22.25% 29.24% 19.38% 20.98% 11.96% 14.54 1,340.17
RETIREMENT CLASS SHARES**** 18.28 22.02 28.86 18.86 20.42 N/A 12.29 6.21
Russell Midcap Growth Index 9.03 13.35 21.22 17.01 20.39 7.47 9.37
INCEPTION DATE: 10/1/96
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TURNER NEW ENTERPRISE FUND(1) 27.67 28.24 39.30 24.49 30.89 N/A (1.87) 70.14
NASDAQ Composite Index 11.98 12.48 20.52 13.35 18.93 n/a (4.65)
INCEPTION DATE: 6/30/00
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TURNER SMALL CAP EQUITY FUND(1) 1.11 3.59 10.14 10.26 17.16 N/A 13.78 65.29
Russell 2000 Index 1.19 3.16 12.34 13.36 18.75 n/a 10.75
INCEPTION DATE: 3/4/02
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TURNER SMALL CAP GROWTH FUND(1) 10.56 14.67 26.02 15.63 21.18 8.12 14.39 317.93
Russell 2000 Growth Index 6.71 9.35 18.94 14.10 18.70 3.65 6.92
INCEPTION DATE: 2/7/94
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(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.
* Returns of less than one year are cumulative and are not annualized.
** Commenced operations on August 1, 2005.
*** Commenced operations on January 31, 2007.
**** Commenced operations on September 24, 2001.
Amounts designated as "--" are rounded to $0 ($mil).
EXPENSE RATIO+
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Gross Net
expense expense
ratio ratio
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TURNER CONCENTRATED
GROWTH FUND
Investor Class Shares 1.96% 1.59%
TURNER CORE GROWTH FUND
Institutional Class Shares 1.20% 0.69%
Investor Class Shares 1.45% 0.94%
TURNER EMERGING GROWTH FUND
Investor Class Shares 1.54% 1.40%
TURNER INTERNATIONAL
CORE GROWTH FUND
Institutional Class Shares 1.40% 1.10%
TURNER LARGE CAP GROWTH FUND
Institutional Class Shares 1.16% 0.69%
Investor Class Shares 1.41% 0.94%
Gross Net
expense expense
ratio ratio
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TURNER LARGE CAP VALUE FUND
Institutional Class Shares 7.71% 0.69%
TURNER MIDCAP EQUITY FUND
Institutional Class Shares 1.00% 0.90%
Investor Class Shares 1.25% 1.15%
TURNER MIDCAP GROWTH FUND
Investor Class Shares 1.28% 1.18%
Retirement Class Shares 1.53% 1.43%
TURNER NEW ENTERPRISE FUND
Investor Class Shares 2.16% 1.61%
TURNER SMALL CAP EQUITY FUND
Investor Class Shares 1.81% 1.45%
TURNER SMALL CAP GROWTH FUND
Investor Class Shares 1.55% 1.25%
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+ These expense ratios are based on the most recent prospectus and may
differ from those shown in the financial highlights.
TURNER FUNDS 2007 ANNUAL REPORT | 7
INVESTMENT REVIEW
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TURNER CONCENTRATED GROWTH FUND
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FUND PROFILE
SEPTEMBER 30, 2007
o Ticker symbol TTOPX
o CUSIP #87252R862
o Top five holdings+++
(1) Cisco Systems
(2) Applied Materials
(3) Apple
(4) Google, Cl A
(5) Nvidia
o % in five largest holdings 19.8%+
o Number of holdings 28
o Price/earnings ratio 24.8
o Weighted average market capitalization $57.14 billion
o % of holdings with positive earnings surprises 80.2%
o % of holdings with negative earnings surprises 12.6%
o Net assets $61 million
[CHART]
MARKET CAPITALIZATION [ ] [ ] [X]
SMALL <---> LARGE [ ] [ ] [ ]
[ ] [ ] [ ]
VALUE <---> GROWTH
INVESTMENT STYLE
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GROWTH OF A $10,000 INVESTMENT IN THE
TURNER CONCENTRATED GROWTH FUND:
JUNE 30, 1999-SEPTEMBER 30, 2007*
[LINE GRAPH]
Initial Investment Date 6/30/99 SEP 99 SEP 00 SEP 01 SEP 02 SEP 03 SEP 04 SEP 05 SEP 06 SEP 07
------- ------ ------ ------ ------ ------ ------ ------ ------ ------
TURNER CONCENTRATED GROWTH FUND $10,000 $13,990 $27,782 $8,223 $5,754 $8,638 $8,310 $10,137 $10,850 $14,448
S&P 500 Index $10,000 $ 9,376 $10,622 $7,794 $6,197 $7,709 $8,778 $ 9,853 $10,916 $12,711
NASDAQ 100 Index $10,000 $10,485 $15,553 $5,092 $3,631 $5,696 $6,190 $ 7,044 $ 7,308 $ 9,283
Russell 1000 Growth Ind $10,000 $ 9,633 $11,890 $6,464 $5,009 $6,307 $6,780 $ 7,567 $ 8,024 $ 9,577
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AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING SEPTEMBER 30, 2007)
ONE THREE FIVE SINCE
YEAR YEARS YEARS INCEPTION
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TURNER CONCENTRATED GROWTH FUND 33.16% 20.25% 20.22% 4.56%
S&P 500 Index 16.44% 13.14% 15.45% 2.95%
NASDAQ 100 Index** 27.02% 14.47% 20.65% (0.90)%
Russell 1000 Growth Index 19.35% 12.20% 13.84% (0.52)%
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+:
[BAR CHART]
Information technology 43.0%
Cash equivalents/short-term investments++ 19.8%
Health care 14.3%
Industrials 7.3%
Materials 6.0%
Telecommunication services 3.2%
Financials 3.2%
Consumer discretionary 3.2%
MANAGER'S DISCUSSION AND ANALYSIS
The Turner Concentrated Growth Fund (TTOPX) contains a select few stocks --
15-30 -- that Turner thinks have the greatest return potential. The fund's
investment strategy favors stocks of companies with the strongest growth
prospects and a short-term catalyst for price appreciation. That strategy worked
well in the 12-month period ended September 30: the fund gained 33.16%,
outperforming the S&P 500 Index by 16.72 percentage points.
The fund's margin of outperformance was due mainly to major positions in the
consumer-discretionary, health-care, and materials sectors, amounting to a 24%
weighting; Internet, gaming, biotechnology, specialty-pharmaceutical, and metals
stocks performed with special distinction. A 1% weighting in conglomerate stocks
detracted the most from results.
- --------------------------------------------------------------------------------
* 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 their original cost. The performance in the above graph and
table 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 was June 30, 1999.
** The NASDAQ 100 Index tracks NASDAQ's largest companies across major
industry groups, including computer hardware and software, telecommu-
nications, retail/wholesale and biotechnology.
+ Percentages based on total investments.
++ Cash equivalents include short-term investments held as collateral for
securities lending activity. Please see Note 10 in Notes to Financial
Statements for more detailed information.
+++ Cash equivalents and short-term investments are not being considered a
holding for top 5 holdings, but are counted in number of holdings.
8 | TURNER FUNDS 2007 ANNUAL REPORT
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER CORE GROWTH FUND
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2007
o Ticker symbol TTMEX
Institutional Class Shares
o CUSIP #900297847
Institutional Class Shares
o Top five holdings++
(1) General Electric
(2) Cisco Systems
(3) Google, Cl A
(4) Intel
(5) CME Group
o % in five largest holdings 15.4%+
o Number of holdings 72
o Price/earnings ratio 21.9
o Weighted average market capitalization $71.99 billion
o % of holdings with positive earnings surprises 79.9%
o % of holdings with negative earnings surprises 18.6%
o Net assets $238 million, Institutional Class Shares
[CHART]
MARKET CAPITALIZATION [ ] [ ] [X]
SMALL <---> LARGE [ ] [ ] [ ]
[ ] [ ] [ ]
VALUE <---> GROWTH
INVESTMENT STYLE
- --------------------------------------------------------------------------------
GROWTH OF A $250,000 INVESTMENT IN THE
TURNER CORE GROWTH FUND, INSTITUTIONAL CLASS SHARES:
FEBRUARY 28, 2001-SEPTEMBER 30, 2007*,**
[LINE GRAPH]
Initial Investment Date 2/28/01 SEP. 01 SEP. 02 SEP. 03 SEP. 04 SEP. 05 SEP. 06 SEP. 07
-------- -------- ------- ------- ------- ------- ------- -------
TURNER CORE GROWTH FUND, INSTITUTIONAL
CLASS SHARES $250,000 $204,530 $157,263 $201,014 $221,015 $273,263 $292,145 $362,260
S&P 500 Index $250,000 $211,479 $168,147 $209,158 $238,168 $267,343 $296,190 $344,883
Russell 10000 Growth Index $250,000 $194,671 $150,851 $189,951 $204,216 $227,906 $241,671 $288,434
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING SEPTEMBER 30, 2007)
ONE THREE FIVE SINCE
YEAR YEARS YEARS INCEPTION
- ---------------------------------------------------------------------------------------------
TURNER CORE GROWTH FUND, INSTITUTIONAL CLASS SHARES 24.00% 17.91% 18.16% 5.79%**
TURNER CORE GROWTH FUND, INVESTOR CLASS SHARES 23.68% -- -- 15.31%***
S&P 500 Index 16.44% 13.14% 15.45% 5.01%**
Russell 1000 Growth Index 19.35% 12.20% 13.84% 2.19%**
- ---------------------------------------------------------------------------------------------
SECTOR WEIGHTINGS+:
[BAR CHART]
Information technology 22.4%
Financials 17.4%
Health care 11.4%
Energy 10.6%
Industrials 9.7%
Consumer discretionary 8.7%
Consumer staples 8.4%
Telecommunication services 6.3%
Materials 2.3%
Cash equivalents 2.1%
Utilities 0.7%
MANAGER'S DISCUSSION AND ANALYSIS
Good stock selection in seven of 10 market sectors led to the Turner Core Growth
Fund, Institutional Class (TTMEX) gaining 24.00% in the 12-month period ended
September 30. As a result the fund outperformed the S&P 500 Index by 7.56
percentage points and the Russell 1000 Growth Index by 4.65 percentage points.
Contributing the most to results were consumer-discretionary, energy,
health-care, and utilities shares, which accounted for 31% of the portfolio;
Internet, gaming, energy-services, biotechnology, and telecommunications
holdings especially added value. Information-technology and consumer-staples
shares, a 31% weighting, were the primary detractors from performance;
semiconductor, wireless, and food-retailing stocks produced positive but weak
relative returns.
- --------------------------------------------------------------------------------
* 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 their original cost. The performance in the above graph and
table does not reflect the deduction of taxes the shareholder will pay on
fund distributions or the redemptions of fund shares. On February 25,
2005, the Constellation TIP Core Growth Fund reorganized into the Turner
Core Growth Fund. Performance of the Institutional and Investor Class
Shares will differ due to differences in fees.
** The inception date of the Turner Core Growth Fund (Institutional Class
Shares) was February 28, 2001. Index returns are based on Institutional
Class Shares inception date.
*** The inception date of the Turner Core Growth Fund (Investor Class Shares)
was August 1, 2005.
+ Percentages based on total investments.
++ Cash equivalents and short-term investments are not being considered a
holding for top 5 holdings, but are counted in number of holdings.
Amounts designated as "--" are not applicable.
TURNER FUNDS 2007 ANNUAL REPORT | 9
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER EMERGING GROWTH FUND
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2007
o Ticker symbol TMCGX
o CUSIP #872524301
o Top five holdings+++
(1) Deckers Outdoor
(2) Oceaneering
International
(3) Terra Industries
(4) RTI International Metals
(5) Bucyrus International, Cl A
o % in five largest holdings 10.1%+
o Number of holdings 111
o Price/earnings ratio 20.0
o Weighted average market capitalization $1.32 billion
o % of holdings with positive earnings surprises 71.2%
o % of holdings with negative earnings surprises 25.4%
o Net assets $638 million
[CHART]
MARKET CAPITALIZATION [ ] [ ] [ ]
SMALL <---> LARGE [ ] [ ] [ ]
[ ] [ ] [X]
VALUE <---> GROWTH
INVESTMENT STYLE
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE
TURNER EMERGING GROWTH FUND:
FEBRUARY 27, 1998-SEPTEMBER 30, 2007*
[LINE GRAPH]
Initial Investment Date 2/27/98 SEP. 98 SEP. 99 SEP. 00 SEP. 01 SEP. 02 SEP. 03 SEP. 04 SEP. 05 SEP. 06 SEP. 07
------- ------- ------- ------- ------- ------- ------- ------ ------- ------- -------
TURNER EMERGING GROWTH FUND $10,000 $9,882 $21,093 $48,308 $38,535 $38,489 $49,709 $61,410 $78,544 $82,432 $103,105
Russell 2000 Growth Index $10,000 $7,625 $10,113 $13,113 $ 7,528 $ 6,161 $ 8,731 $ 9,772 $11,528 $12,206 $ 14,518
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING SEPTEMBER 30, 2007)
ONE THREE FIVE SINCE
YEAR YEARS YEARS INCEPTION
- --------------------------------------------------------------------------------
TURNER EMERGING GROWTH FUND 25.08% 18.86% 21.79% 27.55%
Russell 2000 Growth Index 18.94% 14.10% 18.70% 3.96%
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+:
[BAR CHART]
Cash equivalents/short-term investments++ 24.3%
Industrials 17.4%
Health care 13.7%
Energy 11.9%
Information technology 11.0%
Consumer discretionary 7.3%
Materials 5.2%
Financials 4.8%
Telecommunication services 3.2%
Consumer staples 1.0%
Utilities 0.2%
MANAGER'S DISCUSSION AND ANALYSIS
The Turner Emerging Growth Fund (TMCGX) rose 25.08% in the 12 months ended
September 30. That return outpaced its benchmark, the Russell 2000 Growth Index,
by 6.14 percentage points.
Stock selection was good: eight of the fund's 10 market sector positions
outperformed their corresponding index sectors. Energy, health-care, and
materials holdings, a 31% weighting, contributed the most. Oil-services,
biotechnology, and metals stocks were especially strong. Consumer-discretionary
stocks, a 7% weighting, were the primary detractor from performance. Laggards
included consulting, footwear, and online-gaming shares.
- --------------------------------------------------------------------------------
* 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 their original cost. The performance in the above graph and
table 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 Emerging Growth Fund was February 27, 1998.
+ Percentages based on total investments.
++ Cash equivalents include short-term investments held as collateral for
securities lending activity. Please see Note 10 in Notes to Financial
Statements for more detailed information.
+++ Cash equivalents and short-term investments are not being considered a
holding for top 5 holdings, but are counted in number of holdings.
10 | TURNER FUNDS 2007 ANNUAL REPORT
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER INTERNATIONAL CORE GROWTH FUND
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2007
o Ticker symbol TICGX
o CUSIP #900297771
o Top five holdings++
(1) Alstom
(2) ABB
(3) Bayer
(4) CNH Global
(5) Siliconware
Precision Industries
o % in five largest holdings 11.5%+
o Number of holdings 64
o Price/earnings ratio 18.7
o Weighted average market capitalization $40.79 billion
o % of holdings with positive earnings surprises 59.8%
o % of holdings with negative earnings surprises 13.9%
o Net assets $2 million
[CHART]
MARKET CAPITALIZATION [ ] [ ] [X]
SMALL <---> LARGE [ ] [ ] [ ]
[ ] [ ] [ ]
VALUE <---> GROWTH
INVESTMENT STYLE
- --------------------------------------------------------------------------------
GROWTH OF A $250,000 INVESTMENT IN THE
TURNER INTERNATIONAL CORE GROWTH FUND:
JANUARY 31, 2007-SEPTEMBER 30, 2007*
[LINE GRAPH]
Initial Investment Date 1/31/07 FEB. 07 MAR. 07 APR. 07 MAY 07 JUN. 07 JUL. 07 AUG. 07 SEP. 07
------- ------- ------- ------- ------ ------- -------- -------- --------
TURNER INTERNATIONAL CORE GROWTH FUND $250,000 $247,750 $254,489 $265,483 $271,987 $274,734 $274,734 $275,970 $305,250
MSCI World Growth ex-U.S. Index $250,000 $251,975 $260,089 $271,506 $278,158 $278,993 $276,956 $274,408 $292,625
- --------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURNS (PERIOD ENDING SEPTEMBER 30, 2007)
SINCE
INCEPTION
- --------------------------------------------------------------------------------
TURNER INTERNATIONAL CORE GROWTH FUND 22.10%**
MSCI World Growth ex-U.S. Index 17.05%**
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+:
[BAR CHART]
Industrials 17.8%
Materials 16.1%
Financials 14.2%
Information technology 13.9%
Consumer staples 10.3%
Health care 7.4%
Consumer discretionary 6.1%
Telecommunication services 5.3%
Utilities 3.4%
Energy 3.1%
Cash equivalents 2.4%
MANAGER'S DISCUSSION AND ANALYSIS
In its first eight months, the Turner International Core Growth Fund (TICGX)
gained 22.10%. As a result the fund outperformed its benchmark, the MSCI World
Growth ex-U.S. Index, by 5.05 percentage points.
Nine of 10 market sector positions contributed to the fund's results.
Contributing the most were consumer-discretionary, health-care, and
information-technology shares, which accounted for 27% of the portfolio;
Internet, gaming, biotechnology, semiconductor-capital-equipment, software, and
wireless-communications holdings especially added value. Industrials shares, an
18% weighting, were the primary detractors from performance, with airline and
tire stocks providing lackluster relative returns.
- --------------------------------------------------------------------------------
* 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 their original cost. The performance in the above graph and
table 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 International Core Growth Fund was January 31, 2007.
** Cumulative return, not annualized.
+ Percentages based on total investments.
++ Cash equivalents are not being considered a holding for top 5 holdings,
but are counted in number of holdings.
TURNER FUNDS 2007 ANNUAL REPORT | 11
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER LARGE CAP GROWTH FUND
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2007
o Ticker symbol TSGEX
Institutional Class Shares
o CUSIP #87252R839
Institutional Class Shares
o Top five holdings+++
(1) Cicso Systems
(2) Intel
(3) Google, Cl A
(4) PepsiCo
(5) Apple
o % in five largest holdings 18.1%+
o Number of holdings 49
o Price/earnings ratio 22.3
o Weighted average market capitalization $79.63 billion
o % of holdings with positive earnings surprises 83.3%
o % of holdings with negative earnings surprises 13.3%
o Net assets $38 million, Institutional Class Shares
[CHART]
MARKET CAPITALIZATION [ ] [ ] [X]
SMALL <---> LARGE [ ] [ ] [ ]
[ ] [ ] [ ]
VALUE <---> GROWTH
INVESTMENT STYLE
- --------------------------------------------------------------------------------
GROWTH OF A $250,000 INVESTMENT IN THE
TURNER LARGE CAP GROWTH FUND,
INSTITUTIONAL CLASS SHARES:
JUNE 14, 2000-SEPTEMBER 30, 2007*,**
[LINE GRAPH]
Initial Investment Date 6/14/00 SEP. 00 SEP. 01 SEP. 02 SEP. 03 SEP. 04 SEP. 05 SEP. 06 SEP. 07
-------- -------- ------- ------- ------- ------- ------- ------- -------
TURNER LARGE CAP GROWTH FUND,
INSTITUTIONAL CLASS SHARES $250,000 $245,248 $117,498 $ 87,501 $115,510 $120,870 $135,483 $140,089 $170,713
Russell Top 200 Growth Index $250,000 $238,641 $132,947 $101,319 $124,440 $131,819 $142,075 $150,315 $178,379
Russell 1000 Growth Index $250,000 $242,266 $131,696 $102,051 $128,503 $138,153 $154,179 $163,491 $195,127
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING SEPTEMBER 30, 2007)
ONE THREE FIVE SINCE
YEAR YEARS YEARS INCEPTION
- ---------------------------------------------------------------------------------------------
TURNER LARGE CAP GROWTH FUND, INSTITUTIONAL CLASS SHARES 21.86% 12.20% 14.30% (5.10)%**
TURNER LARGE CAP GROWTH FUND, INVESTOR CLASS SHARES -- -- -- 14.36%***
Russell Top 200 Growth Index 18.68% 10.61% 11.98% (4.52)%**
Russell 1000 Growth Index 19.35% 12.20% 13.84% (3.34)%**
- ---------------------------------------------------------------------------------------------
SECTOR WEIGHTINGS+:
[BAR CHART]
Information technology 28.0%
Cash equivalents/short-term investments++ 19.1%
Health care 14.1%
Consumer discretionary 10.1%
Consumer staples 8.3%
Financials 6.1%
Energy 5.6%
Industrials 5.4%
Materials 2.0%
Telecommunication services 1.3%
MANAGER'S DISCUSSION AND ANALYSIS
Substantial outperformance by holdings in three major sectors -- consumer
discretionary, health care, and information-technology -- enhanced the
performance of the Turner Large Cap Growth Fund, Institutional Class (TSGEX) in
the 12-month period ended September 30. The fund gained 21.86%, beating the
Russell Top 200 Growth Index by 3.18 percentage points.
Those three sectors accounted for 52% of the fund's investments. Internet,
gaming, biotechnology, pharmaceutical, software, and wireless-communications
stocks made large contributions to results. Consumer-staples shares, which
accounted for 8% of the portfolio, underperformed their index counterparts
markedly; weak performers included diversified-consumer-products and
food-retailing stocks.
- --------------------------------------------------------------------------------
* 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 their original cost. The performance in the above graph and
table does not reflect the deduction of taxes the shareholder will pay on
fund distributions or the redemptions of fund shares. Performance of the
Institutional and Investor Class Shares will differ due to differences in
fees.
** The inception date of the Turner Large Cap Growth Fund (Institutional
Class Shares) was June 14, 2000. Index returns are based on Institutional
Class Shares inception date.
*** The inception date of the Turner Large Cap Growth Fund (Investor Class
Shares) was January 31, 2007. Cumulative return, not annualized.
+ Percentages based on total investments.
++ Cash equivalents include short-term investments held as collateral for
securities lending activity. Please see Note 10 in Notes to Financial
Statements for more detailed information.
+++ Cash equivalents are not being considered a holding for top 5 holdings,
but are counted in number of holdings.
Amounts designated as "--" are not applicable.
12 | TURNER FUNDS 2007 ANNUAL REPORT
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER LARGE CAP VALUE FUND
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2007
o Ticker symbol TLVFX
o CUSIP #900297821
o Top five holdings++
(1) Exxon Mobil
(2) General Electric
(3) AT&T
(4) Citigroup
(5) Chevron
o % in five largest holdings 19.1%+
o Number of holdings 80
o Price/earnings ratio 14.3
o Weighted average market capitalization $111.89 billion
o % of holdings with positive earnings surprises 73.6%
o % of holdings with negative earnings surprises 24.8%
o Net assets $0.8 million
[CHART]
MARKET CAPITALIZATION [X] [ ] [ ]
SMALL <---> LARGE [ ] [ ] [ ]
[ ] [ ] [ ]
VALUE <---> GROWTH
INVESTMENT STYLE
- --------------------------------------------------------------------------------
GROWTH OF A $25,000 INVESTMENT IN THE
TURNER LARGE CAP VALUE FUND:
OCTOBER 10, 2005-SEPTEMBER 30, 2007*
[LINE GRAPH]
Initial Investment Date 10/10/05 DEC. 05 MAR. 06 JUN. 06 SEP. 06 DEC. 06 MAR. 07 JUN. 07 SEP. 07
-------- ------- ------- ------- ------- ------- ------- ------- -------
TURNER LARGE CAP VALUE FUND $10,000 $10,427 $11,040 $11,010 $11,493 $12,234 $12,493 $13,301 $13,323
Russell 1000 Value Index $10,000 $10,532 $11,157 $11,222 $11,920 $12,874 $13,034 $13,676 $13,643
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING SEPTEMBER 30, 2007)
ONE SINCE
YEAR INCEPTION
- --------------------------------------------------------------------------------
TURNER LARGE CAP VALUE FUND 15.91% 15.64%
Russell 1000 Value Index 14.44% 17.06%
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+:
[BAR CHART]
Financials 28.0%
Energy 13.8%
Industrials 11.3%
Health care 9.4%
Utilities 8.2%
Consumer staples 7.8%
Consumer discretionary 6.9%
Information technology 6.9%
Telecommunication services 4.0%
Materials 2.3%
Cash equivalents 1.4%
MANAGER'S DISCUSSION AND ANALYSIS
In the 12 months ended September 30, the Turner Large Cap Value Fund (TLVFX)
gained 15.91%. That return exceeded the Russell 1000 Value Index's 14.44% gain
by 1.47 percentage points.
The fund is invested in large-cap value stocks that rank highly in a proprietary
quantitative model. The model did a good job of stock picking: eight of the
fund's 10 market sector investments outperformed their corresponding index
sectors. Financial-services, health-care, and materials stocks, a 40% weighting,
enhanced performance to the greatest degree; diversified financial,
pharmaceutical, and metals stocks did best. Hurting results the most were
information-technology and consumer-discretionary stocks, which represented 14%
of the portfolio; semiconductor, software, and retailing shares were significant
detractors.
- --------------------------------------------------------------------------------
* 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 their original cost. The performance in the above graph and
table 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 was October 10, 2005.
+ Percentages based on total investments.
++ Cash equivalents are not being considered a holding for top 5 holdings,
but are counted in number of holdings.
TURNER FUNDS 2007 ANNUAL REPORT | 13
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER MIDCAP EQUITY FUND
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2007
o Ticker symbol TMCFX,
Investor Class Shares
o CUSIP #900297797,
Investor Class Shares
o Top five holdings++
(1) iShares Russell
Midcap Index Fund
(2) ON Semiconductor
(3) NII Holdings
(4) Roper Industries
(5) Arch Capital Group
o % in five largest holdings 10.7%+
o Number of holdings 76
o Price/earnings ratio 17.5
o Weighted average market capitalization $4.98 billion
o % of holdings with positive earnings surprises 77.3%
o % of holdings with negative earnings surprises 22.7%
o Net assets $0.5 million, Investor Class Shares
[CHART]
MARKET CAPITALIZATION [ ] [ ] [ ]
SMALL <---> LARGE [ ] [X] [ ]
[ ] [ ] [ ]
VALUE <---> GROWTH
INVESTMENT STYLE
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE
TURNER MIDCAP EQUITY FUND,
INVESTOR CLASS SHARES:
JANUARY 31, 2007-SEPTEMBER 30, 2007*
[LINE GRAPH]
Initial Investment Date 1/31/07 FEB. 07 MAR. 07 APR. 07 MAY 07 JUN. 07 JUL. 07 AUG. 07 SEP. 07
------- ------- ------- ------- ------ ------- ------- ------- -------
TURNER MIDCAP EQUITY FUND,
INVESTOR CLASS SHARES $10,000 $ 9,970 $10,130 $10,520 $11,010 $10,860 $10,410 $10,260 $10,610
Russell Midcap Index $10,000 $10,016 $10,096 $10,481 $10,876 $10,631 $10,236 $10,253 $10,590
- --------------------------------------------------------------------------------
CUMULATIVE TOTAL RETURNS (PERIOD ENDING SEPTEMBER 30, 2007)
SINCE
INCEPTION
- ------------------------------------------------------------------------------
TURNER MIDCAP EQUITY FUND, INSTITUTIONAL CLASS SHARES 6.80%**
TURNER MIDCAP EQUITY FUND, INVESTOR CLASS SHARES 6.10%**
Russell Midcap Index 5.90%**
- ------------------------------------------------------------------------------
SECTOR WEIGHTINGS+:
[BAR CHART]
Information technology 19.1%
Industrials 17.6%
Financials 13.1%
Consumer discretionary 10.8%
Health care 9.3%
Materials 7.2%
Energy 6.7%
Consumer staples 4.6%
Telecommunication services 4.3%
Cash equivalents 3.8%
Utilities 3.5%
MANAGER'S DISCUSSION AND ANALYSIS
In its first eight months of operation, the Turner Midcap Equity Fund, Investor
Class (TMCFX) returned 6.10%, a performance that edged the Russell Midcap Index
by 0.20 percentage point.
The fund's performance was enhanced by strong returns in consumer-staples,
energy, financial-services, and industrials stocks, with a combined weighting of
42%. Bottling, brewery, energy-technology, financial-transaction-processing, and
industrial-products stocks were the big gainers. Weak relative returns in the
consumer-discretionary and health-care sectors, which accounted for 20% of the
portfolio, impaired results the most. Consumer-products, pharmaceutical, and
medical-device holdings recorded poor relative returns.
- --------------------------------------------------------------------------------
* 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 their original cost. The performance in the above graph and
table 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 Equity Fund was January 31, 2007. Performance of the
Institutional and Investor Class Shares will differ due to differences in
fees.
** Cumulative return, not annualized.
+ Percentages based on total investments.
++ Cash equivalents are not being considered a holding for top 5 holdings,
but are counted in number of holdings.
14 | TURNER FUNDS 2007 ANNUAL REPORT
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER MIDCAP GROWTH FUND
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2007
o Ticker symbol TMGFX,
Investor Class Shares
o CUSIP #900297409,
Investor Class Shares
o Top five holdings+++
(1) NII Holdings
(2) Precision Castparts
(3) VeriSign
(4) Juniper Networks
(5) Broadcom, Cl A
o % in five largest holdings 10.6%+
o Number of holdings 92
o Price/earnings ratio 24.3
o Weighted average market capitalization $10.80 billion
o % of holdings with positive earnings surprises 85.3%
o % of holdings with negative earnings surprises 10.6%
o Net assets $1 billion, Investor Class Shares
[CHART]
MARKET CAPITALIZATION [ ] [ ] [ ]
SMALL <---> LARGE [ ] [ ] [X]
[ ] [ ] [ ]
VALUE <---> GROWTH
INVESTMENT STYLE
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE
TURNER MIDCAP GROWTH FUND, INVESTOR CLASS SHARES:
SEPTEMBER 30, 1997-SEPTEMBER 30, 2007*,**
[LINE GRAPH]
Initial Investment Date 9/30/97 SEP. 98 SEP. 99 SEP. 00 SEP. 01 SEP. 02 SEP. 03 SEP. 04 SEP. 05 SEP. 06 SEP. 07
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
TURNER MIDCAP GROWTH FUND,
INVESTOR CLASS SHARES $10,000 $10,124 $18,635 $36,777 $15,078 $11,942 $16,934 $18,190 $22,871 $23,946 $30,947
Russell Midcap Growth Index $10,000 $ 9,063 $12,434 $19,940 $ 9,617 $ 8,126 $11,287 $12,831 $15,843 $16,957 $20,555
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING SEPTEMBER 30, 2007)
ONE THREE FIVE TEN SINCE
YEAR YEARS YEARS YEARS INCEPTION
- ---------------------------------------------------------------------------------------------------
TURNER MIDCAP GROWTH FUND, INVESTOR CLASS SHARES 29.24% 19.38% 20.98% 11.96% 14.54%**
TURNER MIDCAP GROWTH FUND, RETIREMENT CLASS SHARES 28.86% 18.86% 20.42% -- 12.29%***
Russell Midcap Growth Index 21.22% 17.01% 20.39% 7.47% 9.37%**
- ---------------------------------------------------------------------------------------------------
SECTOR WEIGHTINGS+:
[BAR CHART]
Information technology 26.2%
Consumer discretionary 15.1%
Industrials 12.4%
Health care 11.5%
Energy 10.3%
Financials 6.8%
Cash equivalents/short-term investments++ 5.7%
Telecommunication services 3.8%
Consumer staples 3.8%
Materials 3.8%
Utilities 0.6%
MANAGER'S DISCUSSION AND ANALYSIS
In the 12-month period ended September 30, the Turner Midcap Growth Fund,
Investor Class (TMGFX) returned 29.24%, a result that outdistanced the Russell
Midcap Growth Index by 8.02 percentage points.
Performance was enhanced by good relative returns in seven of the fund's 10
market sector positions and the strong showing of mid-cap growth stocks as an
asset class. The fund's consumer-discretionary, energy, and materials stocks,
with a combined weighting of 29%, performed best. Internet, gaming, e-commerce,
oil-services, and industrial-parts stocks were big gainers. Weak relative
returns in the information-technology sector, which accounted for 26% of the
portfolio, detracted most from results. Data-networking and semiconductor stocks
were among the poorest performers.
- --------------------------------------------------------------------------------
* 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 their original cost. The performance in the above graph and
table does not reflect the deduction of taxes the shareholder will pay on
fund distributions or the redemptions of fund shares. Performance of the
Investor and Retirement Class Shares will differ due to differences in
fees.
** The inception date of the Turner Midcap Growth Fund (Investor Class
Shares) was October 1, 1996. Index returns are based on Investor Class
Shares inception date.
*** The inception date of the Turner Midcap Growth Fund (Retirement Class
Shares) was September 24, 2001.
+ Percentages based on total investments.
++ Cash equivalents include short-term investments held as collateral for
securities lending activity. Please see Note 10 in Notes to Financial
Statements for more detailed information.
+++ Cash equivalents and short-term investments are not being considered a
holding for top 5 holdings, but are counted in number of holdings.
Amounts designated as "--" are not applicable.
TURNER FUNDS 2007 ANNUAL REPORT | 15
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER NEW ENTERPRISE FUND
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2007
o Ticker symbol TBTBX
o CUSIP #87252R797
o Top five holdings+++
(1) Research In Motion
(2) Monsanto
(3) Apple
(4) Google, Cl A
(5) Broadcom, Cl A
o % in five largest holdings 15.7%+
o Number of holdings 44
o Price/earnings ratio 29.7
o Weighted average market capitalization $30.85 billion
o % of holdings with positive earnings surprises 84.3%
o % of holdings with negative earnings surprises 9.5%
o Net assets $70 million
[CHART]
MARKET CAPITALIZATION [ ] [ ] [ ]
SMALL <---> LARGE [ ] [ ] [X]
[ ] [ ] [ ]
VALUE <---> GROWTH
INVESTMENT STYLE
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE
TURNER NEW ENTERPRISE FUND:
JUNE 30, 2000-SEPTEMBER 30, 2007*
[LINE GRAPH]
Initial Investment Date 6/30/00 SEP. 00 SEP. 01 SEP. 02 SEP. 03 SEP. 04 SEP. 05 SEP. 06 SEP. 07
------- -------- ------- ------- ------- ------- ------- ------- -------
TURNER NEW ENTERPRISE FUND $10,000 $12,520 $3,290 $2,270 $4,340 $4,521 $5,861 $6,261 $8,722
NASDAQ Composite Index $10,000 $ 9,264 $3,792 $2,976 $4,556 $4,862 $5,552 $5,875 $7,081
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING SEPTEMBER 30, 2007)
ONE THREE FIVE SINCE
YEAR YEARS YEARS INCEPTION
- --------------------------------------------------------------------------------
TURNER NEW ENTERPRISE FUND 39.30% 24.49% 30.89% (1.87)%
NASDAQ Composite Index 20.52% 13.35% 18.93% (4.65)%
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+:
[BAR CHART]
Information technology 45.8%
Cash equivalents/short-term investments++ 19.5%
Health care 11.3%
Consumer discretionary 10.4%
Financials 6.0%
Materials 3.3%
Telecommunication services 2.6%
Industrials 1.1%
MANAGER'S DISCUSSION AND ANALYSIS
Good stock selection in all seven of its market sector investments powered the
39.30% advance of the Turner New Enterprise Fund (TBTBX) in the 12 months ended
September 30. The fund's return exceeded that of the NASDAQ Composite Index by
18.78 percentage points.
Returns in the information-technology and consumer-discretionary sectors, a 56%
weighting, exceeded those of their corresponding index sectors and provided much
of the fund's margin of outperformance. Semiconductor, virtualization-software,
telecommunications, gaming, Internet, e-commerce, and business-services stocks
led the way. Adding the least to performance was a 3% position in
telecommunication-services stocks, with wireless-phone shares recording
lackluster relative returns.
- --------------------------------------------------------------------------------
* 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 their original cost. The performance in the above graph and
table 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 was June 30, 2000.
+ Percentages based on total investments.
++ Cash equivalents include short-term investments held as collateral for
securities lending activity. Please see Note 10 in Notes to Financials for
more detailed information.
+++ Cash equivalents and short-term investments are not being considered a
holding for top 5 holdings, but are counted in number of holdings.
16 | TURNER FUNDS 2007 ANNUAL REPORT
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER SMALL CAP EQUITY FUND
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2007
o Ticker symbol TSEIX
o CUSIP #87252R714
o Top five holdings+++
(1) Teledyne Technologies
(2) Wright Express
(3) Kirby
(4) Semtech
(5) Barnes Group
o % in five largest holdings 7.7%+
o Number of holdings 103
o Price/earnings ratio 18.6
o Weighted average market capitalization $1.38 billion
o % of holdings with positive earnings surprises 74.0%
o % of holdings with negative earnings surprises 23.3%
o Net assets $65 million
[CHART]
MARKET CAPITALIZATION [ ] [ ] [ ]
SMALL <---> LARGE [ ] [ ] [ ]
[ ] [X] [ ]
VALUE <---> GROWTH
INVESTMENT STYLE
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE
TURNER SMALL CAP EQUITY FUND:
MARCH 4, 2002-SEPTEMBER 30, 2007*
[LINE GRAPH]
Initial Investment Date 3/4/02 SEP. 02 SEP. 03 SEP. 04 SEP. 05 SEP. 06 SEP. 07
------ ------- ------- ------- ------- ------- -------
TURNER SMALL CAP EQUITY FUND $10,000 $9,299 $12,278 $15,317 $17,671 $18,639 $20,529
Russell 2000 Index $10,000 $7,485 $10,217 $12,134 $14,313 $15,732 $17,674
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING SEPTEMBER 30, 2007)
ONE THREE FIVE SINCE
YEAR YEARS YEARS INCEPTION
- --------------------------------------------------------------------------------
TURNER SMALL CAP EQUITY FUND 10.14% 10.26% 17.16% 13.78%
Russell 2000 Index 12.34% 13.36% 18.75% 10.75%
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+:
[BAR CHART]
Information technology 21.4%
Financials 14.8%
Industrials 14.0%
Consumer discretionary 12.7%
Health care 12.3%
Materials 6.8%
Cash equivalents/short-term investments++ 6.3%
Energy 5.2%
Utilities 2.8%
Consumer staples 2.5%
Telecommunication services 1.2%
MANAGER'S DISCUSSION AND ANALYSIS
The Turner Small Cap Equity Fund (TSEIX) returned 10.14% in the 12-month period
ended September 30. That was a commendable return by historical standards, but
not good enough to outperform the benchmark Russell 2000 Index, which gained
12.34%.
The fund is invested in both growth and value stocks in the 10 market sectors,
most of which registered positive returns. However, the fund's value holdings,
especially in the energy and consumer-staples sectors, fared poorly. Indeed,
energy, consumer-staples, and health-care holdings, a 20% weighting, were the
biggest drags on performance. Three of the fund's 10 sector positions --
consumer discretionary, financial services, and industrials, constituting 42% of
the portfolio -- beat their corresponding index sectors; consulting, publishing,
day-care, brokerage, financial-software, and defense-electronics stocks were
standouts.
- --------------------------------------------------------------------------------
* 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 their original cost. The performance in the above graph and
table 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 was March 4, 2002.
+ Percentages based on total investments.
++ Cash equivalents include short-term investments held as collateral for
securities lending activity. Please see Note 10 in Notes to Financial
Statements for more detailed information.
+++ Cash equivalents and short-term investments are not being considered a
holding for top 5 holdings, but are counted in number of holdings.
TURNER FUNDS 2007 ANNUAL REPORT | 17
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
TURNER SMALL CAP GROWTH FUND
- --------------------------------------------------------------------------------
FUND PROFILE
SEPTEMBER 30, 2007
o Ticker symbol TSCEX
o CUSIP #900297300
o Top five holdings+++
(1) Alexion Pharmaceuticals
(2) Anadigics
(3) Actuant, Cl A
(4) Micros Systems
(5) Concur Technologies
o % in five largest holdings 5.6%+
o Number of holdings 120
o Price/earnings ratio 21.4
o Weighted average market capitalization $1.87 billion
o % of holdings with positive earnings surprises 83.4%
o % of holdings with negative earnings surprises 14.4%
o Net assets $318 million
[CHART]
MARKET CAPITALIZATION [ ] [ ] [ ]
SMALL <---> LARGE [ ] [ ] [ ]
[ ] [ ] [X]
VALUE <---> GROWTH
INVESTMENT STYLE
- --------------------------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT IN THE
TURNER SMALL CAP GROWTH FUND:
SEPTEMBER 30, 1997-SEPTEMBER 30, 2007*
[LINE GRAPH]
Initial Investment Date 9/30/97 SEP. 98 SEP. 99 SEP. 00 SEP. 01 SEP. 02 SEP. 03 SEP. 04 SEP. 05 SEP. 06 SEP. 07
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
TURNER SMALL CAP GROWTH FUND $10,000 $8,310 $13,225 $20,640 $10,359 $8,353 $12,497 $14,119 $16,337 $17,324 $21,831
Russell 2000 Growth Index $10,000 $7,517 $ 9,970 $12,927 $ 7,421 $6,074 $ 8,607 $ 9,634 $11,365 $12,033 $14,312
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (PERIODS ENDING SEPTEMBER 30, 2007)
ONE THREE FIVE TEN SINCE
YEAR YEARS YEARS YEARS INCEPTION
- --------------------------------------------------------------------------------
TURNER SMALL CAP GROWTH FUND 26.02% 15.63% 21.18% 8.12% 14.39%
Russell 2000 Growth Index 18.94% 14.10% 18.70% 3.65% 6.92%
- --------------------------------------------------------------------------------
SECTOR WEIGHTINGS+:
[BAR CHART]
Cash equivalents/short-term investments++ 27.6%
Information technology 19.4%
Health care 14.6%
Consumer discretionary 11.4%
Industrials 10.4%
Financials 5.0%
Materials 4.8%
Energy 3.9%
Consumer staples 1.5%
Telecommunication services 0.8%
Utilities 0.6%
MANAGER'S DISCUSSION AND ANALYSIS
The Turner Small Cap Growth Fund (TSCEX) produced favorable relative returns in
seven of the 10 market sectors in which it was invested in the 12-month period
ended September 30. That powered the fund to a 26.02% gain, outperforming the
Russell 2000 Growth Index by 7.08 percentage points.
The fund's best relative performers were consumer-discretionary,
information-technology, health-care, and materials stocks, a 50% weighting.
Winners included Internet, gaming, e-commerce, biotechnology, pharmaceutical,
medical-device, mining, and industrial-services shares. Industrials and
financial-services stocks, a 15% weighting, were the biggest drags on
performance; semiconductor-capital-equipment, asset-management, and
investment-banking shares were among the laggards.
- --------------------------------------------------------------------------------
* 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 their original cost. The performance in the above graph and
table 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 was February 7, 1994.
+ Percentages based on total investments.
++ Cash equivalents include short-term investments held as collateral for
securities lending activity. Please see Note 10 in Notes to Financial
Statements for more detailed information.
+++ Cash equivalents and short-term investments are not being considered a
holding for top 5 holdings, but are counted in number of holdings.
18 | TURNER FUNDS 2007 ANNUAL REPORT
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER CONCENTRATED GROWTH FUND
September 30, 2007
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--97.5%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--3.8%
- --------------------------------------------------------------------------------
Coach* 49,770 $ 2,353
------------
Total Consumer discretionary 2,353
------------
- --------------------------------------------------------------------------------
FINANCIALS--3.9%
- --------------------------------------------------------------------------------
CME Group 4,060 2,385
------------
Total Financials 2,385
------------
- --------------------------------------------------------------------------------
HEALTH CARE--17.4%
- --------------------------------------------------------------------------------
Allergan 28,030 1,807
Baxter International 39,870 2,244
Gilead Sciences* 54,890 2,243
Shire ADR 26,940 1,993
St. Jude Medical* 54,480 2,401
------------
Total Health care 10,688
------------
- --------------------------------------------------------------------------------
INDUSTRIALS--8.9%
- --------------------------------------------------------------------------------
ABB ADR # 69,170 1,814
Deere 13,870 2,058
First Solar* 13,340 1,571
------------
Total Industrials 5,443
------------
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--52.3%
- --------------------------------------------------------------------------------
Apple* 19,130 2,937
Applied Materials 142,890 2,958
Broadcom, Cl A* 71,970 2,623
Cisco Systems* 101,900 3,374
Google, Cl A* 4,910 2,785
Intel 99,970 2,585
Juniper Networks* 59,100 2,164
Nokia ADR 48,270 1,831
Nvidia* 75,210 2,726
Research In Motion* 23,190 2,285
SanDisk* 36,870 2,031
VeriSign* 59,870 2,020
VMware, Cl A* # 21,260 1,807
------------
Total Information technology 32,126
------------
- --------------------------------------------------------------------------------
MATERIALS--7.3%
- --------------------------------------------------------------------------------
Monsanto 27,220 2,334
Nucor 35,700 2,123
------------
Total Materials 4,457
------------
Value
Shares (000)
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--3.9%
- --------------------------------------------------------------------------------
NII Holdings* 29,490 $ 2,423
------------
Total Telecommunication services 2,423
------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $50,985) 59,875
================================================================================
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENT HELD AS COLLATERAL
FOR LOANED SECURITIES--4.2%
- --------------------------------------------------------------------------------
Boston Global Investment Trust --
Enhanced Portfolio (1) 2,573,200 2,573
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT HELD
AS COLLATERAL FOR LOANED SECURITIES
(COST $2,573) 2,573
================================================================================
- --------------------------------------------------------------------------------
CASH EQUIVALENT--19.9%
- --------------------------------------------------------------------------------
BlackRock TempCash Fund,
Institutional Shares,
5.360%** 12,244,717 12,245
- --------------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(COST $12,245) 12,245
================================================================================
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--121.6%
(COST $65,803) $ 74,693
================================================================================
Percentages are based on Net Assets of $61,401.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2007.
*** This number has been rounded to the nearest thousand.
+ More narrow industries are utilized for compliance purposes, whereas broad
sectors are utilized for reporting purposes.
# Security fully or partially on loan at September 30, 2007. The total value
of securities on loan at September 30, 2007, was $2,527,693.
(1) A private placement security. Units are non-transferable but may be
redeemed at the NAV. The Fund lends securities in its 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 of the Lending
Agreement in the Boston Global Investment Trust -- Enhanced Portfolio, a
pooled investment fund. All such investments are made at the risk of the
Fund. As such, the Fund is liable for the investment losses. The Fund
receives an annual fee for its participation in the Lending Agreement
based on projected lending activity.
ADR -- American Depositary Receipt
Cl -- Class
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2007 ANNUAL REPORT | 19
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER CORE GROWTH FUND
September 30, 2007
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--95.4%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--8.5%
- --------------------------------------------------------------------------------
Amazon.com* 33,210 $ 3,094
Coach* 55,280 2,613
Expedia* 58,530 1,866
GameStop, Cl A* 34,380 1,937
Goodyear Tire & Rubber* 72,810 2,214
Guess ? 40,590 1,990
Johnson Controls 15,150 1,789
Las Vegas Sands* 24,340 3,248
Target 27,370 1,740
Wynn Resorts 18,310 2,885
------------
Total Consumer discretionary 23,376
------------
- --------------------------------------------------------------------------------
CONSUMER STAPLES--8.2%
- --------------------------------------------------------------------------------
Bunge 18,860 2,027
Coca-Cola 113,570 6,527
CVS Caremark 154,640 6,128
Hansen Natural* 37,510 2,126
PepsiCo 78,370 5,741
------------
Total Consumer staples 22,549
------------
- --------------------------------------------------------------------------------
ENERGY--10.3%
- --------------------------------------------------------------------------------
Cameron International* 55,980 5,166
Consol Energy 90,200 4,203
Marathon Oil 55,460 3,162
Schlumberger 46,350 4,867
Southwestern Energy* 44,940 1,881
Williams 131,940 4,494
XTO Energy 74,206 4,589
------------
Total Energy 28,362
------------
- --------------------------------------------------------------------------------
FINANCIALS--17.0%
- --------------------------------------------------------------------------------
Aflac 94,820 5,409
American Express 81,860 4,860
Charles Schwab 205,010 4,428
CME Group 11,340 6,661
Franklin Resources 23,220 2,961
Goldman Sachs Group 25,930 5,620
IntercontinentalExchange* 32,880 4,994
Northern Trust 27,230 1,804
Nymex Holdings 36,700 4,778
T. Rowe Price Group 94,890 5,284
------------
Total Financials 46,799
------------
Value
Shares (000)
- --------------------------------------------------------------------------------
HEALTH CARE--11.1%
- --------------------------------------------------------------------------------
Allergan 48,210 $ 3,108
Baxter International 71,110 4,002
Celgene* 38,240 2,727
Gilead Sciences* 98,390 4,021
Intuitive Surgical* 4,910 1,130
Medco Health Solutions* 30,790 2,783
Schering-Plough 111,630 3,531
Shire ADR 34,290 2,537
St. Jude Medical* 85,090 3,750
Thermo Fisher Scientific* 50,490 2,914
------------
Total Health care 30,503
------------
- --------------------------------------------------------------------------------
INDUSTRIALS--9.4%
- --------------------------------------------------------------------------------
C.H. Robinson Worldwide 55,170 2,995
Deere 22,440 3,331
General Electric 262,710 10,876
Precision Castparts 23,820 3,525
Roper Industries 35,880 2,350
Sunpower, Cl A* 34,780 2,880
------------
Total Industrials 25,957
------------
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--21.8%
- --------------------------------------------------------------------------------
Apple* 42,260 6,489
Applied Materials 140,070 2,899
Broadcom, Cl A* 84,510 3,080
Cisco Systems* 270,020 8,940
F5 Networks* 43,060 1,601
Google, Cl A* 14,240 8,078
Intel 259,840 6,719
Kla-Tencor 63,060 3,517
Mastercard, Cl A 28,370 4,198
Nokia ADR 64,160 2,434
Paychex 70,040 2,872
Research In Motion* 25,090 2,473
Salesforce.com* 29,800 1,529
VeriFone Holdings* 25,420 1,127
VeriSign* 60,170 2,030
VMware, Cl A* 24,020 2,042
------------
Total Information technology 60,028
------------
20 | TURNER FUNDS 2007 ANNUAL REPORT
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER CORE GROWTH FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
MATERIALS--2.3%
- --------------------------------------------------------------------------------
Monsanto 49,150 $ 4,214
Nucor 33,200 1,975
------------
Total Materials 6,189
------------
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--6.1%
- --------------------------------------------------------------------------------
America Movil ADR, Ser L 62,340 3,990
China Mobile ADR 41,870 3,435
NII Holdings* 68,810 5,652
Rogers Communications, Cl B 82,380 3,751
------------
Total Telecommunication services 16,828
------------
- --------------------------------------------------------------------------------
UTILITIES--0.7%
- --------------------------------------------------------------------------------
NRG Energy* 45,150 1,909
------------
Total Utilities 1,909
------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $214,295) 262,500
================================================================================
- --------------------------------------------------------------------------------
CASH EQUIVALENT--2.0%
- --------------------------------------------------------------------------------
BlackRock TempCash Fund,
Institutional Shares, 5.360%** 5,565,586 5,566
- --------------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(COST $5,566) 5,566
================================================================================
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--97.4%
(COST $219,861) $ 268,066
================================================================================
Percentages are based on Net Assets of $275,319.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2007.
*** This number has been rounded to the nearest thousand.
ADR -- American Depositary Receipt
Cl -- Class
Ser -- Series
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2007 ANNUAL REPORT | 21
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER EMERGING GROWTH FUND
September 30, 2007
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--86.6%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--8.4%
- --------------------------------------------------------------------------------
California Pizza Kitchen* 241,830 $ 4,249
Deckers Outdoor* 166,080 18,236
DG FastChannel* 45,995 1,084
Genesco* 128,330 5,920
Great Wolf Resorts* 248,286 3,069
New Oriental Education &
Technology Group ADR* 54,570 3,632
Spartan Motors # 404,455 6,807
Universal Electronics* 178,920 5,815
Volcom* # 104,890 4,460
------------
Total Consumer discretionary 53,272
------------
- --------------------------------------------------------------------------------
CONSUMER STAPLES--1.2%
- --------------------------------------------------------------------------------
Andersons # 79,900 3,837
Boston Beer, Cl A* # 78,904 3,839
------------
Total Consumer staples 7,676
------------
- --------------------------------------------------------------------------------
ENERGY--13.6%
- --------------------------------------------------------------------------------
Bolt Technology* 87,980 2,874
Carrizo Oil & Gas* # 127,940 5,739
Dawson Geophysical* # 82,820 6,419
ION Geophysical* # 354,730 4,906
Lufkin Industries 81,040 4,459
NATCO Group, Cl A* # 171,095 8,854
Oceaneering International* 211,070 15,999
Penn Virginia 190,740 8,389
PetroHawk Energy* # 530,454 8,710
StealthGas 143,010 2,464
T-3 Energy Services* 121,040 5,161
Tetra Technologies* 67,264 1,422
W-H Energy Services* 155,800 11,490
------------
Total Energy 86,886
------------
- --------------------------------------------------------------------------------
FINANCIALS--5.5%
- --------------------------------------------------------------------------------
American Physicians Capital 133,760 5,211
Boston Private Financial
Holdings # 133,080 3,705
Genesis Lease ADR 262,550 6,532
Harleysville Group 96,680 3,092
Value
Shares (000)
- --------------------------------------------------------------------------------
IBERIABANK # 57,480 $ 3,026
Meadowbrook Insurance Group* 334,740 3,016
National Interstate 54,100 1,666
Navigators Group* # 107,460 5,830
Preferred Bank # 81,945 3,224
------------
Total Financials 35,302
------------
- --------------------------------------------------------------------------------
HEALTH CARE--15.7%
- --------------------------------------------------------------------------------
Air Methods* # 91,982 4,250
Alexion Pharmaceuticals* 187,050 12,186
Align Technology* # 229,060 5,802
Array Biopharma* 213,370 2,396
Arthrocare* 45,890 2,565
Cepheid* # 30,838 703
Cypress Bioscience* # 221,720 3,035
HMS Holdings* 70,480 1,734
Hologic* # 183,520 11,195
Icon ADR* # 128,010 6,532
InterMune* # 173,840 3,326
Kendle International* # 155,730 6,467
MWI Veterinary Supply* # 100,310 3,787
Northstar Neuroscience* # 243,380 2,716
Omnicell* 226,030 6,451
Omrix Biopharmaceuticals* # 36,020 1,272
Parexel International* 233,427 9,634
PharmaNet Development Group* 170,130 4,939
Phase Forward* 158,910 3,180
Progenics Pharmaceuticals* # 85,750 1,896
XenoPort* # 123,170 5,795
------------
Total Health care 99,861
------------
- --------------------------------------------------------------------------------
INDUSTRIALS--19.9%
- --------------------------------------------------------------------------------
AAR* # 232,100 7,042
Barnes Group 185,000 5,905
Bucyrus International, Cl A 177,280 12,929
CBIZ* # 563,340 4,479
Clean Harbors* 62,250 2,771
COMSYS IT Partners* # 198,380 3,335
Copa Holdings, Cl A 79,980 3,203
EDO # 39,820 2,230
EnPro Industries* 158,980 6,455
22 | TURNER FUNDS 2007 ANNUAL REPORT
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER EMERGING GROWTH FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
Genesee & Wyoming, Cl A* # 107,335 $ 3,096
Hardinge 129,120 4,497
Heico # 133,150 6,572
HUB Group, Cl A* 201,514 6,052
Hurco* # 51,143 2,765
Huron Consulting Group* # 69,280 5,031
II-VI* # 130,130 4,493
Kaman 133,890 4,627
Kenexa* # 132,730 4,086
Ladish* 197,790 10,974
LMI Aerospace* # 184,940 4,281
Middleby* # 112,520 7,262
Perini* 82,710 4,626
Powell Industries* 69,570 2,636
Titan International # 103,740 3,311
Triumph Group 56,300 4,600
------------
Total Industrials 127,258
------------
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--12.5%
- --------------------------------------------------------------------------------
Actuate* # 864,320 5,575
Advanced Analogic
Technologies* # 429,240 4,567
Anadigics* 104,320 1,886
Ansys* 276,860 9,460
Authorize.Net Holdings* # 196,130 3,458
BluePhoenix Solutions* # 162,420 2,990
Chordiant Software* 281,932 3,908
comScore* # 134,950 3,644
Comtech Group* # 190,650 3,472
Comtech Telecommunications* 100,365 5,369
Diodes* 129,277 4,150
EPIQ Systems* # 129,010 2,428
Interactive Intelligence* # 66,574 1,265
Novatel* # 139,240 5,465
Novatel Wireless* 138,340 3,133
Quality Systems # 189,610 6,945
Rackable Systems* 190,430 2,470
Rofin-Sinar Technologies* 46,580 3,270
ShoreTel* # 176,320 2,525
The9 ADR* # 114,450 3,947
------------
Total Information technology 79,927
------------
Value
Shares (000)
- --------------------------------------------------------------------------------
MATERIALS--5.9%
- --------------------------------------------------------------------------------
Buckeye Technologies* 113,230 $ 1,714
Haynes International* 65,910 5,627
RTI International Metals* 167,097 13,244
Terra Industries* 454,490 14,208
Zoltek* # 65,100 2,840
------------
Total Materials 37,633
------------
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--3.7%
- --------------------------------------------------------------------------------
Dobson Communications, Cl A* 865,780 11,073
NTELOS Holdings # 190,350 5,608
PAETEC Holding* 553,040 6,896
------------
Total Telecommunication services 23,577
------------
- --------------------------------------------------------------------------------
UTILITIES--0.2%
- --------------------------------------------------------------------------------
Artesian Resources, Cl A 57,705 1,096
------------
Total Utilities 1,096
------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $373,359) 552,488
================================================================================
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY--1.5%
- --------------------------------------------------------------------------------
iShares Russell 2000 Growth
Index Fund # 112,390 9,569
- --------------------------------------------------------------------------------
TOTAL REGISTERED INVESTMENT
COMPANY (COST $8,692) 9,569
================================================================================
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENT HELD AS COLLATERAL
FOR LOANED SECURITIES--16.2%
- --------------------------------------------------------------------------------
Boston Global Investment Trust --
Enhanced Portfolio (1) 103,501,570 103,502
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT HELD
AS COLLATERAL FOR LOANED SECURITIES
(COST $103,502) 103,502
================================================================================
TURNER FUNDS 2007 ANNUAL REPORT | 23
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER EMERGING GROWTH FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
CASH EQUIVALENT--11.5%
- --------------------------------------------------------------------------------
BlackRock TempCash Fund,
Institutional Shares,
5.360%** 73,597,042 $ 73,597
- --------------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(COST $73,597) 73,597
================================================================================
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--115.8%
(COST $559,150) $ 739,156
================================================================================
Percentages are based on Net Assets of $638,037.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2007.
*** This number has been rounded to the nearest thousand.
# Security fully or partially on loan at September 30, 2007. The total value
of securities on loan at September 30, 2007, was $99,591,564.
(1) A private placement security. Units are non-transferable but may be
redeemed at the NAV. The Fund lends securities in its 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 of the Lending
Agreement in the Boston Global Investment Trust -- Enhanced Portfolio, a
pooled investment fund. All such investments are made at the risk of the
Fund. As such, the Fund is liable for the investment losses. The Fund
receives an annual fee for its participation in the Lending Agreement
based on projected lending activity.
ADR -- American Depositary Receipt
Cl -- Class
The accompanying notes are an integral part of the financial statements.
24 | TURNER FUNDS 2007 ANNUAL REPORT
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER INTERNATIONAL CORE GROWTH FUND
September 30, 2007
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--96.9%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--6.1%
- --------------------------------------------------------------------------------
Esprit Holdings 1,650 $ 26
Galaxy Entertainment Group* 26,120 29
Garmin 260 31
Parkson Retail Group 3,400 31
Swatch Group 90 29
------------
Total Consumer discretionary 146
------------
- --------------------------------------------------------------------------------
CONSUMER STAPLES--10.3%
- --------------------------------------------------------------------------------
Beiersdorf 430 32
British American Tobacco 990 36
Coca Cola Hellenic Bottling ADR 320 19
Diageo 1,470 32
L'Oreal 220 29
Nestle 100 45
SABMiller 890 25
Shiseido 1,350 30
------------
Total Consumer staples 248
------------
- --------------------------------------------------------------------------------
ENERGY--3.1%
- --------------------------------------------------------------------------------
BG Group 2,040 36
Cie Generale de
Geophysique-Veritas* 120 39
------------
Total Energy 75
------------
- --------------------------------------------------------------------------------
FINANCIALS--14.1%
- --------------------------------------------------------------------------------
Arch Capital Group* 440 33
Deutsche Boerse 340 46
Julius Baer Holding 560 42
MF Global* 1,500 43
Mitsubishi Estate 1,310 37
Singapore Exchange 2,980 26
Standard Bank Group 2,900 42
Standard Chartered 1,130 37
Unibanco - Uniao de
Bancos Brasileiros 2,480 33
------------
Total Financials 339
------------
- --------------------------------------------------------------------------------
HEALTH CARE--7.3%
- --------------------------------------------------------------------------------
Alcon 220 32
CSL 490 47
Novo Nordisk, Cl B 260 31
Value
Shares (000)
- --------------------------------------------------------------------------------
Shire 1,350 $ 33
Smith & Nephew 2,710 33
------------
Total Health care 176
------------
- --------------------------------------------------------------------------------
INDUSTRIALS--17.6%
- --------------------------------------------------------------------------------
ABB 2,160 57
Alstom 280 57
CNH Global 900 55
DryShips 380 35
Kuehne & Nagel International* 320 31
McDermott International* 620 34
Mitsui OSK Lines 2,650 43
Rolls-Royce Group 4,520 48
Siemens AG 270 37
Suntech Power Holdings ADR* 710 28
------------
Total Industrials 425
------------
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--13.8%
- --------------------------------------------------------------------------------
ASML Holding* 1,530 51
Baidu.com ADR* 90 26
InnoLux Display 6,460 28
MediaTek 2,772 50
Nintendo 60 31
Nokia 560 21
Research In Motion* 510 50
Siliconware Precision Industries 22,932 52
Sina* 480 23
------------
Total Information technology 332
------------
- --------------------------------------------------------------------------------
MATERIALS--16.0%
- --------------------------------------------------------------------------------
Agnico-Eagle Mines 830 41
Akzo Nobel 440 36
ArcelorMittal 600 48
Bayer 690 55
Cia Vale do Rio Doce ADR 1,380 47
First Quantum Minerals 350 34
Potash Corp. of Saskatchewan 420 44
Syngenta 200 43
Wacker Chemie 160 38
------------
Total Materials 386
------------
TURNER FUNDS 2007 ANNUAL REPORT | 25
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER INTERNATIONAL CORE GROWTH FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--5.2%
- --------------------------------------------------------------------------------
America Movil, Ser L 13,990 $ 45
China Mobile 2,450 40
Rogers Communications, Cl B 910 41
------------
Total Telecommunication services 126
------------
- --------------------------------------------------------------------------------
UTILITIES--3.4%
- --------------------------------------------------------------------------------
International Power 4,480 41
Veolia Environnement 470 41
------------
Total Utilities 82
------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $1,931) 2,335
================================================================================
- --------------------------------------------------------------------------------
CASH EQUIVALENT--2.4%
- --------------------------------------------------------------------------------
BlackRock TempCash Fund,
Institutional Shares, 5.360%** 56,602 57
- --------------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(COST $57) 57
================================================================================
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--99.3%
(COST $1,988) $ 2,392
================================================================================
Percentages are based on Net Assets of $2,409.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2007.
*** This number has been rounded to the nearest thousand.
ADR -- American Depositary Receipt
Cl -- Class
Ser -- Series
The accompanying notes are an integral part of the financial statements.
26 | TURNER FUNDS 2007 ANNUAL REPORT
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER LARGE CAP GROWTH FUND
September 30, 2007
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--98.9%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--12.3%
- --------------------------------------------------------------------------------
Amazon.com* 8,820 $ 822
Coach* 14,480 685
Expedia* 12,870 410
Johnson Controls 5,360 633
Las Vegas Sands* 5,240 699
Target 7,740 492
Wynn Resorts 5,840 920
------------
Total Consumer discretionary 4,661
------------
- --------------------------------------------------------------------------------
CONSUMER STAPLES--10.2%
- --------------------------------------------------------------------------------
Bunge # 4,150 446
Coca-Cola 20,790 1,195
CVS Caremark 22,800 903
PepsiCo 17,880 1,310
------------
Total Consumer staples 3,854
------------
- --------------------------------------------------------------------------------
ENERGY--6.9%
- --------------------------------------------------------------------------------
Marathon Oil 8,040 458
National Oilwell Varco* 2,530 366
Schlumberger 10,600 1,113
XTO Energy 10,840 670
------------
Total Energy 2,607
------------
- --------------------------------------------------------------------------------
FINANCIALS--7.4%
- --------------------------------------------------------------------------------
American Express 11,550 686
CME Group 1,385 814
Franklin Resources 3,320 423
Goldman Sachs Group 4,090 886
------------
Total Financials 2,809
------------
- --------------------------------------------------------------------------------
HEALTH CARE--17.2%
- --------------------------------------------------------------------------------
Allergan 9,480 611
Baxter International 15,760 887
Celgene* 8,390 598
Gilead Sciences* 22,700 928
Medco Health Solutions* 7,320 662
Schering-Plough 23,640 748
Shire ADR # 8,820 652
St. Jude Medical* 15,810 697
Thermo Fisher Scientific* 12,700 733
------------
Total Health care 6,516
------------
Value
Shares (000)
- --------------------------------------------------------------------------------
INDUSTRIALS--6.6%
- --------------------------------------------------------------------------------
Deere 5,690 $ 844
Expeditors International
Washington 12,870 609
General Electric 25,410 1,052
------------
Total Industrials 2,505
------------
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--34.2%
- --------------------------------------------------------------------------------
Apple* 8,320 1,277
Applied Materials 33,230 688
Broadcom, Cl A* 24,900 907
Cisco Systems* 68,020 2,252
Google, Cl A* 3,070 1,742
Intel 70,110 1,813
Juniper Networks* 18,140 664
Kla-Tencor 14,180 791
Nokia ADR 14,560 552
Nvidia* 11,935 433
Research In Motion* 8,440 832
SanDisk* 11,370 627
VMware, Cl A* # 4,600 391
------------
Total Information technology 12,969
------------
- --------------------------------------------------------------------------------
MATERIALS--2.5%
- --------------------------------------------------------------------------------
Monsanto 6,590 565
Nucor 6,300 375
------------
Total Materials 940
------------
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--1.6%
- --------------------------------------------------------------------------------
NII Holdings* 7,430 610
------------
Total Telecommunication services 610
------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $30,906) 37,471
================================================================================
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENT HELD AS
COLLATERAL FOR LOANED SECURITIES--2.5%
- --------------------------------------------------------------------------------
Boston Global Investment Trust --
Enhanced Portfolio (1) 954,100 954
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT HELD
AS COLLATERAL FOR LOANED SECURITIES
(COST $954) 954
================================================================================
TURNER FUNDS 2007 ANNUAL REPORT | 27
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER LARGE CAP GROWTH FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
CASH EQUIVALENT--20.9%
- --------------------------------------------------------------------------------
BlackRock TempCash Fund,
Institutional Shares, 5.360%** 7,923,032 $ 7,923
- --------------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(COST $7,923) 7,923
================================================================================
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--122.3%
(COST $39,783) $ 46,348
================================================================================
Percentages are based on Net Assets of $37,901.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2007.
*** This number has been rounded to the nearest thousand.
+ More narrow industries are utilized for compliance purposes, whereas broad
sectors are utilized for reporting purposes.
# Security fully or partially on loan at September 30, 2007. The total value
of securities on loan at September 30, 2007, was $946,504.
(1) A private placement security. Units are non-transferable but may be
redeemed at the NAV. The Fund lends securities in its 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 of the Lending
Agreement in the Boston Global Investment Trust -- Enhanced Portfolio, a
pooled investment fund. All such investments are made at the risk of the
Fund. As such, the Fund is liable for the investment losses. The Fund
receives an annual fee for its participation in the Lending Agreement
based on projected lending activity.
ADR -- American Depositary Receipt
Cl -- Class
The accompanying notes are an integral part of the financial statements.
28 | TURNER FUNDS 2007 ANNUAL REPORT
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER LARGE CAP VALUE FUND
September 30, 2007
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--98.4%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--6.9%
- --------------------------------------------------------------------------------
GameStop, Cl A* 200 $ 11
Johnson Controls 60 7
McDonald's 160 9
News, Cl A 190 4
Target 140 9
Walt Disney 280 10
Whirlpool 90 8
------------
Total Consumer discretionary 58
------------
- --------------------------------------------------------------------------------
CONSUMER STAPLES--7.8%
- --------------------------------------------------------------------------------
Coca-Cola 110 6
Constellation Brands, Cl A* 230 6
CVS Caremark 160 6
Loews 110 9
Pepsi Bottling Group 240 9
Procter & Gamble 120 8
Smithfield Foods* 250 8
Wal-Mart Stores 290 13
------------
Total Consumer staples 65
------------
- --------------------------------------------------------------------------------
ENERGY--13.8%
- --------------------------------------------------------------------------------
Chevron 220 21
ConocoPhillips 170 15
Devon Energy 160 13
Exxon Mobil 530 49
Grant Prideco* 130 7
National Oilwell Varco* 70 10
------------
Total Energy 115
------------
- --------------------------------------------------------------------------------
FINANCIALS--27.9%
- --------------------------------------------------------------------------------
Aflac 210 12
American Financial Group 300 9
American International Group 100 7
Ameriprise Financial 180 11
AON 180 8
BlackRock, Cl A 50 9
Citigroup 540 25
HCC Insurance Holdings 310 9
JPMorgan Chase 370 17
Legg Mason 120 10
Loews 180 9
MetLife 160 11
Morgan Stanley 140 9
Value
Shares (000)
- --------------------------------------------------------------------------------
Northern Trust 170 $ 11
Principal Financial Group 170 11
Prudential Financial 100 10
Reinsurance Group of America 160 9
State Street 150 10
T. Rowe Price Group 210 12
Travelers 200 10
Unum Group 390 9
Wells Fargo 150 5
------------
Total Financials 233
------------
- --------------------------------------------------------------------------------
HEALTH CARE--9.5%
- --------------------------------------------------------------------------------
Express Scripts* 190 11
Humana* 110 8
Johnson & Johnson 120 8
Medco Health Solutions* 80 7
Pfizer 760 18
Shire ADR 160 12
UnitedHealth Group 150 7
Wyeth 170 8
------------
Total Health care 79
------------
- --------------------------------------------------------------------------------
INDUSTRIALS--11.2%
- --------------------------------------------------------------------------------
Cummins 50 6
Dun & Bradstreet 80 8
Flowserve 90 7
General Electric 870 36
Paccar 50 4
Raytheon 110 7
Steelcase, Cl A 400 7
Textron 220 14
Union Pacific 40 5
------------
Total Industrials 94
------------
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--6.9%
- --------------------------------------------------------------------------------
Automatic Data Processing 180 8
Hewlett-Packard 150 8
International Business Machines 60 7
ON Semiconductor* 470 6
Texas Instruments 280 10
Total System Services 340 10
Varian Semiconductor
Equipment Associates* 170 9
------------
Total Information technology 58
------------
TURNER FUNDS 2007 ANNUAL REPORT | 29
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER LARGE CAP VALUE FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
MATERIALS--2.3%
- --------------------------------------------------------------------------------
Albemarle 230 $ 10
Ball 170 9
------------
Total Materials 19
------------
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--4.0%
- --------------------------------------------------------------------------------
AT&T 660 28
Verizon Communications 120 5
------------
Total Telecommunication services 33
------------
- --------------------------------------------------------------------------------
UTILITIES--8.1%
- --------------------------------------------------------------------------------
Allegheny Energy* 200 10
Centerpoint Energy 480 8
Exelon 110 8
FPL Group 150 9
Northeast Utilities 300 9
PPL 160 7
Public Service Enterprise Group 100 9
Questar 150 8
------------
Total Utilities 68
------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $748) 822
================================================================================
- --------------------------------------------------------------------------------
CASH EQUIVALENT--1.5%
- --------------------------------------------------------------------------------
BlackRock TempCash Fund,
Institutional Shares, 5.360%** 11,918 12
- --------------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(COST $12) 12
================================================================================
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--99.9%
(COST $760) $ 834
================================================================================
Percentages are based on Net Assets of $835.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2007.
*** This number has been rounded to the nearest thousand.
+ More narrow industries are utilized for compliance purposes, whereas broad
sectors are utilized for reporting purposes.
ADR -- American Depositary Receipt
Cl -- Class
The accompanying notes are an integral part of the financial statements.
30 | TURNER FUNDS 2007 ANNUAL REPORT
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER MIDCAP EQUITY FUND
September 30, 2007
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--93.2%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--10.9%
- --------------------------------------------------------------------------------
Columbia Sportswear 80 $ 4
Dollar Tree Stores* 90 4
DreamWorks Animation SKG, Cl A* 250 8
Goodyear Tire & Rubber* 180 5
Hanesbrands* 170 5
Jarden* 120 4
O'Reilly Automotive* 180 6
PetSmart 210 7
R.H. Donnelley* 80 5
Saks 290 5
Sally Beauty Holdings* 610 5
------------
Total Consumer discretionary 58
------------
- --------------------------------------------------------------------------------
CONSUMER STAPLES--4.5%
- --------------------------------------------------------------------------------
Herbalife 180 8
Molson Coors Brewing, Cl B 80 8
PepsiAmericas 260 8
------------
Total Consumer staples 24
------------
- --------------------------------------------------------------------------------
ENERGY--6.8%
- --------------------------------------------------------------------------------
Acergy ADR 130 4
Cameron International* 90 8
Exterran Holdings* 100 8
FMC Technologies* 140 8
Range Resources 190 8
------------
Total Energy 36
------------
- --------------------------------------------------------------------------------
FINANCIALS--9.9%
- --------------------------------------------------------------------------------
Alexandria Real Estate Equities 30 3
Arch Capital Group* 130 10
Everest Re Group 80 9
Hanover Insurance Group 130 6
IntercontinentalExchange* 60 9
Markel* 10 5
NASDAQ Stock Market* 170 6
Rayonier 110 5
------------
Total Financials 53
------------
- --------------------------------------------------------------------------------
HEALTH CARE--9.2%
- --------------------------------------------------------------------------------
Cephalon* 70 5
Charles River Laboratories
International* 140 8
Cubist Pharmaceuticals* 200 4
Health Net* 100 5
Value
Shares (000)
- --------------------------------------------------------------------------------
Henry Schein* 130 $ 8
IMS Health 180 6
Pediatrix Medical Group* 130 8
Respironics* 100 5
------------
Total Health care 49
------------
- --------------------------------------------------------------------------------
INDUSTRIALS--17.7%
- --------------------------------------------------------------------------------
AerCap Holdings* 290 7
Brink's 120 7
Carlisle 160 8
Chicago Bridge & Iron GDR,
NY Shares 160 7
Corrections Corp. of America* 140 4
Covanta Holding* 390 10
Harsco 160 9
Lincoln Electric Holdings 110 8
Manitowoc 180 8
Republic Services, Cl A 280 9
Roper Industries 150 10
Ryder System 140 7
------------
Total Industrials 94
------------
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--19.2%
- --------------------------------------------------------------------------------
Alliance Data Systems* 30 2
Amphenol, Cl A 210 8
Check Point Software Technologies* 320 8
Factset Research Systems 110 8
Fidelity National
Information Services 140 6
Global Payments 150 7
Harris 140 8
Hewitt Associates, Cl A* 190 7
Intersil, Cl A 150 5
McAfee* 170 6
Novell* 720 5
ON Semiconductor* 850 11
Tech Data* 190 8
Trimble Navigation* 180 7
Verigy* 250 6
------------
Total Information technology 102
------------
- --------------------------------------------------------------------------------
MATERIALS--7.1%
- --------------------------------------------------------------------------------
Carpenter Technology 40 5
Celanese, Ser A 190 7
Nalco Holding 280 8
Pactiv* 130 4
TURNER FUNDS 2007 ANNUAL REPORT | 31
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER MIDCAP EQUITY FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
Sigma-Aldrich 180 $ 9
Titanium Metals* 150 5
------------
Total Materials 38
------------
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--4.3%
- --------------------------------------------------------------------------------
NII Holdings* 120 10
SBA Communications, Cl A* 260 9
Telephone & Data Systems 60 4
------------
Total Telecommunication services 23
------------
- --------------------------------------------------------------------------------
UTILITIES--3.6%
- --------------------------------------------------------------------------------
Allegheny Energy* 150 8
MDU Resources Group 160 4
National Fuel Gas 140 7
------------
Total Utilities 19
------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $471) 496
================================================================================
- --------------------------------------------------------------------------------
REGISTERED INVESTMENT COMPANY--3.4%
- --------------------------------------------------------------------------------
iShares Russell Midcap
Index Fund 160 18
- --------------------------------------------------------------------------------
TOTAL REGISTERED INVESTMENT
COMPANY (COST $17) 18
================================================================================
- --------------------------------------------------------------------------------
CASH EQUIVALENT--3.8%
- --------------------------------------------------------------------------------
BlackRock TempCash Fund,
Institutional Shares, 5.360%** 20,431 20
- --------------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(COST $20) 20
================================================================================
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--100.4%
(COST $508) $ 534
================================================================================
Percentages are based on Net Assets of $532.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2007.
*** This number has been rounded to the nearest thousand.
ADR -- American Depositary Receipt
Cl -- Class
GDR -- Global Depositary Receipt
NY -- New York
Ser -- Series
The accompanying notes are an integral part of the financial statements.
32 | TURNER FUNDS 2007 ANNUAL REPORT
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER MIDCAP GROWTH FUND
September 30, 2007
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--97.0%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--15.5%
- --------------------------------------------------------------------------------
Apollo Group, Cl A* 271,560 $ 16,334
Central European
Media Enterprises, Cl A* 42,500 3,898
Coach* 471,330 22,280
CROCS* 104,000 6,994
Expedia* 428,180 13,650
Focus Media Holding ADR* 197,202 11,442
GameStop, Cl A* 382,550 21,557
Garmin # 116,020 13,853
Goodyear Tire & Rubber* 363,940 11,067
Guess ? 383,237 18,790
J Crew Group* 198,500 8,238
priceline.com* 72,720 6,454
Under Armour, Cl A* 134,965 8,073
WMS Industries* 432,105 14,303
Wynn Resorts 155,897 24,563
Zumiez* 169,559 7,523
------------
Total Consumer discretionary 209,019
------------
- --------------------------------------------------------------------------------
CONSUMER STAPLES--3.9%
- --------------------------------------------------------------------------------
Hansen Natural* 287,870 16,316
Pepsi Bottling Group 358,936 13,342
WM Wrigley Jr. 355,030 22,804
------------
Total Consumer staples 52,462
------------
- --------------------------------------------------------------------------------
ENERGY--10.7%
- --------------------------------------------------------------------------------
Cameron International* 220,510 20,351
Diamond Offshore Drilling 142,700 16,166
National Oilwell Varco* 169,360 24,473
Quicksilver Resources* # 288,880 13,592
Range Resources 486,385 19,776
Southwestern Energy* 394,490 16,509
Weatherford International* 225,230 15,131
Williams 512,590 17,459
------------
Total Energy 143,457
------------
- --------------------------------------------------------------------------------
FINANCIALS--7.0%
- --------------------------------------------------------------------------------
Affiliated Managers Group* 79,050 10,080
AON 161,490 7,236
IntercontinentalExchange* 144,770 21,991
Northern Trust 217,326 14,402
Value
Shares (000)
- --------------------------------------------------------------------------------
Nymex Holdings # 120,710 $ 15,714
T. Rowe Price Group 456,802 25,439
------------
Total Financials 94,862
------------
- --------------------------------------------------------------------------------
HEALTH CARE--11.8%
- --------------------------------------------------------------------------------
Alexion Pharmaceuticals* 215,020 14,009
Allergan 318,120 20,509
BioMarin Pharmaceuticals* 176,503 4,395
Dentsply International 242,950 10,116
Express Scripts* 360,600 20,129
Health Net* 169,100 9,140
Henry Schein* 130,779 7,957
Hologic* 170,530 10,402
Intuitive Surgical* 75,090 17,271
Kinetic Concepts* 143,640 8,084
Laboratory Corp. of
America Holdings* 31,000 2,425
Shire ADR 220,870 16,340
St. Jude Medical* 417,820 18,413
------------
Total Health care 159,190
------------
- --------------------------------------------------------------------------------
INDUSTRIALS--12.8%
- --------------------------------------------------------------------------------
AGCO* 144,890 7,356
Ametek 286,290 12,373
C.H. Robinson Worldwide 343,952 18,673
Corrections Corp. of America* 134,042 3,508
Cummins 61,260 7,835
First Solar* 123,930 14,592
Harsco 259,660 15,390
McDermott International* 192,280 10,399
Oshkosh Truck 147,320 9,129
Precision Castparts 202,670 29,991
Roper Industries 268,380 17,579
Shaw Group* 190,300 11,056
SPX 117,300 10,857
Stericycle* 53,358 3,050
------------
Total Industrials 171,788
------------
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--26.9%
- --------------------------------------------------------------------------------
Activision* 641,940 13,859
Altera 521,420 12,556
Atheros Communications* 219,036 6,564
Broadcom, Cl A* 707,410 25,778
TURNER FUNDS 2007 ANNUAL REPORT | 33
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER MIDCAP GROWTH FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
Cavium Networks* 261,349 $ 8,494
Citrix Systems* 387,620 15,629
Electronic Arts* 335,930 18,809
F5 Networks* 607,180 22,581
Foundry Networks* 552,836 9,824
Intersil, Cl A 481,530 16,098
Juniper Networks* 709,935 25,991
Kla-Tencor 305,320 17,031
Mastercard, Cl A 105,520 15,614
Nvidia* 641,140 23,235
Omniture* 238,540 7,232
ON Semiconductor* 529,166 6,646
Paychex 437,710 17,946
Salesforce.com* 247,170 12,685
Sina* 213,460 10,214
Varian Semiconductor
Equipment Associates* # 371,760 19,897
VeriFone Holdings* # 424,755 18,829
VeriSign* 795,024 26,824
VistaPrint* # 275,860 10,309
------------
Total Information technology 362,645
------------
- --------------------------------------------------------------------------------
MATERIALS--3.9%
- --------------------------------------------------------------------------------
Air Products & Chemicals 174,940 17,102
Mosaic* 131,380 7,032
Owens-Illinois* 497,040 20,602
Steel Dynamics 155,860 7,279
------------
Total Materials 52,015
------------
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--3.9%
- --------------------------------------------------------------------------------
Crown Castle International* 356,950 14,503
NII Holdings* 467,759 38,426
------------
Total Telecommunication services 52,929
------------
- --------------------------------------------------------------------------------
UTILITIES--0.6%
- --------------------------------------------------------------------------------
NRG Energy* 180,680 7,641
------------
Total Utilities 7,641
------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $962,747) 1,306,008
================================================================================
Value
Shares (000)
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENT HELD AS COLLATERAL
FOR LOANED SECURITIES--2.7%
- --------------------------------------------------------------------------------
Boston Global Investment Trust --
Enhanced Portfolio (1) 36,854,400 $ 36,854
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT HELD
AS COLLATERAL FOR LOANED SECURITIES
(COST $36,854) 36,854
================================================================================
- --------------------------------------------------------------------------------
CASH EQUIVALENT--3.2%
- --------------------------------------------------------------------------------
BlackRock TempCash Fund,
Institutional Shares,
5.360%** 42,611,759 42,612
- --------------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(COST $42,612) 42,612
================================================================================
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--102.9%
(COST $1,042,213) $ 1,385,474
================================================================================
Percentages are based on Net Assets of $1,346,384.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2007.
*** This number has been rounded to the nearest thousand.
# Security fully or partially on loan at September 30, 2007. The total value
of securities on loan at September 30, 2007, was $35,810,891.
+ More narrow industries are utilized for compliance purposes, whereas broad
sectors are utilized for reporting purposes.
(1) A private placement security. Units are non-transferable but may be
redeemed at the NAV. The Fund lends securities in its 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 of the Lending
Agreement in the Boston Global Investment Trust -- Enhanced Portfolio, a
pooled investment fund. All such investments are made at the risk of the
Fund. As such, the Fund is liable for the investment losses. The Fund
receives an annual fee for its participation in the Lending Agreement
based on projected lending activity.
ADR -- American Depositary Receipt
Cl -- Class
The accompanying notes are an integral part of the financial statements.
34 | TURNER FUNDS 2007 ANNUAL REPORT
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER NEW ENTERPRISE FUND
September 30, 2007
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--76.5%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--9.9%
- --------------------------------------------------------------------------------
Amazon.com* 14,170 $ 1,320
Expedia* 39,490 1,259
Focus Media Holding ADR* 16,080 933
Guess ? 26,990 1,323
priceline.com* # 9,180 815
Under Armour, Cl A* # 10,930 654
WMS Industries* # 19,670 651
------------
Total Consumer discretionary 6,955
------------
- --------------------------------------------------------------------------------
FINANCIALS--5.7%
- --------------------------------------------------------------------------------
CME Group 2,100 1,234
IntercontinentalExchange* 8,920 1,355
Nymex Holdings # 10,880 1,416
------------
Total Financials 4,005
------------
- --------------------------------------------------------------------------------
HEALTH CARE--10.7%
- --------------------------------------------------------------------------------
Alexion Pharmaceuticals* 24,080 1,569
Allergan 12,000 774
BioMarin Pharmaceuticals* 39,950 995
Gilead Sciences* 29,680 1,213
Intuitive Surgical* 4,030 927
KV Pharmaceutical, Cl A* # 26,840 767
Shire ADR 16,900 1,250
------------
Total Health care 7,495
------------
- --------------------------------------------------------------------------------
INDUSTRIALS--1.1%
- --------------------------------------------------------------------------------
First Solar* 6,490 764
------------
Total Industrials 764
------------
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--43.5%
- --------------------------------------------------------------------------------
Apple* 13,600 2,088
Broadcom, Cl A* 52,270 1,905
Cavium Networks* # 36,170 1,175
Ciena* 30,120 1,147
Cisco Systems* 52,130 1,726
Citrix Systems* 33,730 1,360
Value
Shares (000)
- --------------------------------------------------------------------------------
Electronic Arts* 18,180 $ 1,018
F5 Networks* 39,380 1,465
Foundry Networks* 49,220 875
Google, Cl A* 3,540 2,008
Intersil, Cl A # 36,280 1,213
Juniper Networks* 40,680 1,489
Kla-Tencor 17,440 973
Nvidia* 35,295 1,279
Omniture* # 52,060 1,578
Research In Motion* 22,900 2,257
Semtech* 67,020 1,373
Sina* # 23,520 1,125
Varian Semiconductor
Equipment Associates* 19,185 1,027
VeriFone Holdings* # 20,020 887
VeriSign* 54,300 1,832
VistaPrint* # 18,800 703
------------
Total Information technology 30,503
------------
- --------------------------------------------------------------------------------
MATERIALS--3.1%
- --------------------------------------------------------------------------------
Monsanto 25,410 2,178
------------
Total Materials 2,178
------------
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--2.5%
- --------------------------------------------------------------------------------
NII Holdings* 21,270 1,747
------------
Total Telecommunication services 1,747
------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $43,524) 53,647
================================================================================
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENT HELD AS COLLATERAL
FOR LOANED SECURITIES--11.6%
- --------------------------------------------------------------------------------
Boston Global Investment Trust --
Enhanced Portfolio (1) 8,127,700 8,128
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT HELD
AS COLLATERAL FOR LOANED SECURITIES
(COST $8,128) 8,128
================================================================================
TURNER FUNDS 2007 ANNUAL REPORT | 35
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER NEW ENTERPRISE FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
CASH EQUIVALENT--6.9%
- --------------------------------------------------------------------------------
BlackRock TempCash Fund,
Institutional Shares, 5.360%** 4,838,220 $ 4,838
- --------------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(COST $4,838) 4,838
================================================================================
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--95.0%
(COST $56,490) $ 66,613
================================================================================
Percentages are based on Net Assets of $70,145.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2007.
*** This number is rounded to the nearest thousand.
+ More narrow industries are utilized for compliance purposes, whereas broad
sectors are utilized for reporting purposes.
# Security fully or partially on loan at September 30, 2007. The total value
of securities on loan at September 30, 2007, was $7,790,791.
(1) A private placement security. Units are non-transferable but may be
redeemed at the NAV. The Fund lends securities in its 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 of the Lending
Agreement in the Boston Global Investment Trust--Enhanced Portfolio, a
pooled investment fund. All such investments are made at the risk of the
Fund. As such, the Fund is liable for the investment losses. The Fund
receives an annual fee for its participation in the Lending Agreement
based on projected lending activity.
ADR--American Depositary Receipt
Cl--Class
The accompanying notes are an integral part of the financial statements.
36 | TURNER FUNDS 2007 ANNUAL REPORT
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER SMALL CAP EQUITY FUND
September 30, 2007
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--98.5%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--13.3%
- --------------------------------------------------------------------------------
Bob Evans Farms 23,030 $ 695
Bright Horizons Family
Solutions* 18,820 806
Brown Shoe 20,560 399
Cabela's* 25,850 611
Callaway Golf 53,100 850
Entravision
Communications, Cl A* 54,380 501
Lions Gate Entertainment* 54,110 558
Maidenform Brands* 22,270 354
Movado Group 19,410 620
PEP Boys-Manny Moe & Jack 55,020 772
Smith & Wesson Holding* # 43,390 828
Spartan Motors 35,070 590
Tenneco* 19,400 602
WMS Industries* 15,560 515
------------
Total Consumer discretionary 8,701
------------
- --------------------------------------------------------------------------------
CONSUMER STAPLES--2.6%
- --------------------------------------------------------------------------------
BJ's Wholesale Club* 27,440 910
Longs Drug Stores 16,100 800
------------
Total Consumer staples 1,710
------------
- --------------------------------------------------------------------------------
ENERGY--5.5%
- --------------------------------------------------------------------------------
Arena Resources* 12,900 845
Bill Barrett* 10,000 394
Lufkin Industries 7,710 424
Penn Virginia 16,450 724
Petroleum Development* 14,550 645
Trico Marine Services* 19,070 568
------------
Total Energy 3,600
------------
- --------------------------------------------------------------------------------
FINANCIALS--15.5%
- --------------------------------------------------------------------------------
Advanta, Cl B 20,470 561
BioMed Realty Trust 21,660 522
Boston Private Financial Holdings 15,150 422
Delphi Financial Group, Cl A 19,985 808
Employers Holdings 32,720 674
FCStone Group* 19,035 614
GFI Group* 9,250 797
Investment Technology Group* 16,620 714
IPC Holdings 21,090 608
Value
Shares (000)
- --------------------------------------------------------------------------------
Mid-America Apartment
Communities 8,240 $ 411
Phoenix 44,690 631
Pico Holdings* 11,380 473
Potlatch 17,450 786
ProAssurance* 13,121 707
Strategic Hotels & Resorts 35,120 723
SVB Financial Group* 14,230 674
------------
Total Financials 10,125
------------
- --------------------------------------------------------------------------------
HEALTH CARE--13.0%
- --------------------------------------------------------------------------------
Amedisys* 15,280 587
Analogic # 14,236 908
BioMarin Pharmaceuticals* 36,420 907
Cubist Pharmaceuticals* 22,510 476
Haemonetics* 10,970 542
inVentiv Health* 20,810 912
Kendle International* 16,990 706
Martek Biosciences* 18,430 535
Omrix Biopharmaceuticals* 13,050 461
Owens & Minor 14,840 565
Perrigo 26,620 568
Psychiatric Solutions* 17,420 684
STERIS 22,080 603
------------
Total Health care 8,454
------------
- --------------------------------------------------------------------------------
INDUSTRIALS--14.7%
- --------------------------------------------------------------------------------
AAR* 22,480 682
Aecom Technology* 21,170 740
Barnes Group 30,000 958
Duff & Phelps, Cl A* 9,180 168
EDO 11,750 658
EnerSys* 33,110 588
FTI Consulting* 15,830 796
Interface, Cl A 27,570 498
Kaydon # 13,470 700
Kirby* 23,110 1,020
RBC Bearings* 21,110 810
Regal-Beloit 8,780 421
Republic Airways Holdings* 16,100 341
Teledyne Technologies* 22,370 1,194
------------
Total Industrials 9,574
------------
TURNER FUNDS 2007 ANNUAL REPORT | 37
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER SMALL CAP EQUITY FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--22.5%
- --------------------------------------------------------------------------------
Agilysys 39,880 $ 674
Ariba* 38,860 419
Arris Group* 42,020 519
Bankrate* 11,430 527
Checkpoint Systems* 22,940 605
Cirrus Logic* 71,090 455
Cogent* 14,320 225
Comtech Telecommunications* 13,930 745
ECI Telecom* 47,140 469
Electro Scientific Industries* 26,650 639
FEI* 22,850 718
Foundry Networks* 36,700 652
Macrovision* 25,720 633
Microsemi* 19,540 545
Nice Systems ADR* 20,280 727
PMC - Sierra* # 80,790 678
Progress Software* 26,140 792
S1* 73,170 662
Semtech* 48,620 996
Trina Solar ADR* 5,710 325
Verigy* 32,510 803
Wright Express* 29,840 1,089
Zoran* 40,080 810
------------
Total Information technology 14,707
------------
- --------------------------------------------------------------------------------
MATERIALS--7.1%
- --------------------------------------------------------------------------------
Arch Chemicals 11,820 554
Compass Minerals International 27,490 936
Haynes International* 6,060 517
Kaiser Aluminum 8,250 582
Koppers Holdings 13,220 510
Minerals Technologies 4,970 333
PAN American Silver* 18,300 529
Zoltek* # 15,740 687
------------
Total Materials 4,648
------------
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--1.3%
- --------------------------------------------------------------------------------
PAETEC Holding* 65,810 821
------------
Total Telecommunication services 821
------------
- --------------------------------------------------------------------------------
UTILITIES--3.0%
- --------------------------------------------------------------------------------
Allete 8,810 395
El Paso Electric* 22,530 521
Value
Shares (000)
- --------------------------------------------------------------------------------
ITC Holdings 9,770 $ 484
New Jersey Resources 10,770 534
------------
Total Utilities 1,934
------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $58,890) 64,274
================================================================================
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENT HELD AS COLLATERAL
FOR LOANED SECURITIES--4.6%
- --------------------------------------------------------------------------------
Boston Global Investment Trust --
Enhanced Portfolio (1) 3,012,200 3,012
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT HELD
AS COLLATERAL FOR LOANED SECURITIES
(COST $3,012) 3,012
================================================================================
- --------------------------------------------------------------------------------
CASH EQUIVALENT--2.0%
- --------------------------------------------------------------------------------
BlackRock TempCash Fund,
Institutional Shares, 5.360%** 1,309,341 1,309
- --------------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(COST $1,309) 1,309
================================================================================
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--105.1%
(COST $63,211) $ 68,595
================================================================================
Percentages are based on Net Assets of $65,292.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2007.
*** This number is rounded to the nearest thousand.
# Security fully or partially on loan at September 30, 2007. The total value
of securities on loan at September 30, 2007, was $2,857,766.
(1) A private placement security. Units are non-transferable but may be
redeemed at the NAV. The Fund lends securities in its 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 of the Lending
Agreement in the Boston Global Investment Trust -- Enhanced Portfolio, a
pooled investment fund. All such investments are made at the risk of the
Fund. As such, the Fund is liable for the investment losses. The Fund
receives an annual fee for its participation in the Lending Agreement
based on projected lending activity.
ADR -- American Depositary Receipt
Cl -- Class
The accompanying notes are an integral part of the financial statements.
38 | TURNER FUNDS 2007 ANNUAL REPORT
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER SMALL CAP GROWTH FUND
September 30, 2007
Value
Shares (000)
- --------------------------------------------------------------------------------
COMMON STOCK--98.5%+
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--15.5%
- --------------------------------------------------------------------------------
Cooper Tire & Rubber 99,280 $ 2,422
Fossil* 78,310 2,926
Gmarket ADR 23,880 560
GSI Commerce* # 111,340 2,962
Gymboree* 28,520 1,005
Iconix Brand Group* # 73,120 1,739
Interactive Data 129,470 3,651
J Crew Group* # 62,120 2,578
Life Time Fitness* # 65,750 4,033
McCormick & Schmick's
Seafood Restaurants* 92,680 1,745
New Oriental Education &
Technology Group ADR* 22,740 1,513
priceline.com* # 40,280 3,575
Red Robin Gourmet Burgers* # 39,695 1,703
Sotheby's 58,250 2,784
Tempur-Pedic International # 77,500 2,771
Under Armour, Cl A* # 43,220 2,585
Volcom* # 68,670 2,920
WMS Industries* 133,600 4,422
Zumiez* # 77,160 3,424
------------
Total Consumer discretionary 49,318
------------
- --------------------------------------------------------------------------------
CONSUMER STAPLES--2.0%
- --------------------------------------------------------------------------------
Chattem* 44,180 3,116
Flowers Foods 153,685 3,350
------------
Total Consumer staples 6,466
------------
- --------------------------------------------------------------------------------
ENERGY--5.3%
- --------------------------------------------------------------------------------
Alon USA Energy # 71,180 2,404
Arena Resources* # 33,860 2,218
Core Laboratories* 25,450 3,242
Goodrich Petroleum* # 69,380 2,199
USEC* 97,130 996
W-H Energy Services* 44,850 3,308
Willbros Group* # 70,210 2,387
------------
Total Energy 16,754
------------
Value
Shares (000)
- --------------------------------------------------------------------------------
FINANCIALS--6.8%
- --------------------------------------------------------------------------------
DiamondRock Hospitality 134,960 $ 2,350
Digital Realty Trust 98,700 3,888
Frontier Financial # 73,930 1,725
Greenhill # 57,693 3,522
Investment Technology Group* 69,170 2,973
MarketAxess Holdings* # 125,060 1,876
SVB Financial Group* # 43,210 2,046
Waddell & Reed Financial, Cl A 125,620 3,395
------------
Total Financials 21,775
------------
- --------------------------------------------------------------------------------
HEALTH CARE--19.9%
- --------------------------------------------------------------------------------
Alexion Pharmaceuticals* 82,100 5,349
AMERIGROUP* 55,400 1,910
Array Biopharma* 119,200 1,339
BioMarin Pharmaceuticals* 133,260 3,318
Cepheid* 52,060 1,187
Chemed # 42,880 2,665
Healthways* # 39,940 2,156
Hologic* # 63,340 3,864
Icon ADR* 45,480 2,321
Immucor* 102,370 3,660
InterMune* # 60,020 1,148
inVentiv Health* 67,540 2,960
Inverness Medical
Innovations* # 53,600 2,965
KV Pharmaceutical, Cl A* # 110,830 3,170
Kyphon* 27,070 1,895
MGI Pharma* 71,990 2,000
NuVasive* 78,590 2,824
Parexel International* 87,210 3,599
Perrigo 109,840 2,345
Progenics Pharmaceuticals* 67,480 1,492
Sunrise Senior Living* 62,320 2,204
Trizetto Group* 69,140 1,211
United Therapeutics* 40,600 2,701
West Pharmaceutical Services 75,910 3,162
XenoPort* 37,990 1,787
------------
Total Health care 63,232
------------
TURNER FUNDS 2007 ANNUAL REPORT | 39
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER SMALL CAP GROWTH FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
INDUSTRIALS--14.2%
- --------------------------------------------------------------------------------
Actuant, Cl A # 71,490 $ 4,645
Aecom Technology* 83,820 2,928
Astec Industries* 35,850 2,060
DryShips # 25,620 2,328
FTI Consulting* 59,130 2,975
Geo Group* # 79,480 2,353
Horizon Lines, Cl A # 82,070 2,506
HUB Group, Cl A* 72,680 2,183
Huron Consulting Group* 47,540 3,452
JA Solar Holdings ADR* # 60,380 2,714
Orbital Sciences* 35,040 779
Perini* 45,950 2,570
Regal-Beloit 43,260 2,072
TransDigm Group* 37,660 1,721
Triumph Group 39,010 3,187
Wabtec 33,570 1,257
Waste Connections* 72,630 2,307
Woodward Governor 48,130 3,003
------------
Total Industrials 45,040
------------
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--26.4%
- --------------------------------------------------------------------------------
Advent Software* # 59,360 2,788
Anadigics* # 284,300 5,140
Ansys* 44,740 1,529
Atheros Communications* 96,290 2,886
Blackboard* 81,140 3,719
Brightpoint* 136,890 2,055
Cavium Networks* # 109,858 3,570
comScore* 63,040 1,702
Comtech Group* 108,220 1,971
Concur Technologies* # 143,990 4,539
Data Domain* # 76,650 2,372
FARO Technologies* 11,640 514
Flir Systems* 56,960 3,155
Formfactor* 48,980 2,173
Foundry Networks* 226,240 4,020
Intermec* # 89,270 2,332
Value
Shares (000)
- --------------------------------------------------------------------------------
Itron* # 28,400 $ 2,643
MasTec* 144,100 2,028
Micros Systems* 71,310 4,640
Net 1 UEPS Technologies* # 105,700 2,872
Omniture* # 145,807 4,421
ON Semiconductor* 270,160 3,393
Quality Systems # 52,220 1,913
Semtech* 202,442 4,146
Silicon Laboratories* 66,140 2,762
Synchronoss Technologies* # 44,280 1,862
Take-Two Interactive Software* # 111,630 1,907
The9 ADR* # 39,050 1,347
Ultimate Software Group* 72,200 2,520
VistaPrint* # 78,860 2,947
------------
Total Information technology 83,866
------------
- --------------------------------------------------------------------------------
MATERIALS--6.5%
- --------------------------------------------------------------------------------
Century Aluminum* 61,220 3,223
Greif, Cl A 40,370 2,450
H.B. Fuller # 107,380 3,187
Hercules 137,910 2,899
Silgan Holdings 58,760 3,158
Terra Industries* 97,080 3,035
Zoltek* # 62,310 2,718
------------
Total Materials 20,670
------------
- --------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--1.1%
- --------------------------------------------------------------------------------
Time Warner Telecom, Cl A* 152,150 3,343
------------
Total Telecommunication services 3,343
------------
- --------------------------------------------------------------------------------
UTILITIES--0.8%
- --------------------------------------------------------------------------------
ITC Holdings 53,630 2,657
------------
Total Utilities 2,657
------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $259,732) 313,121
================================================================================
40 | TURNER FUNDS 2007 ANNUAL REPORT
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
TURNER SMALL CAP GROWTH FUND
Value
Shares (000)
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENT HELD AS COLLATERAL
FOR LOANED SECURITIES--35.6%
- --------------------------------------------------------------------------------
Boston Global Investment Trust --
Enhanced Portfolio (1) 112,994,260 $ 112,994
- --------------------------------------------------------------------------------
TOTAL SHORT-TERM INVESTMENT HELD
AS COLLATERAL FOR LOANED SECURITIES
(COST $112,994) 112,994
================================================================================
- --------------------------------------------------------------------------------
CASH EQUIVALENT--2.1%
- --------------------------------------------------------------------------------
BlackRock TempCash Fund,
Institutional Shares, 5.360%** 6,782,714 6,783
- --------------------------------------------------------------------------------
TOTAL CASH EQUIVALENT
(COST $6,783) 6,783
================================================================================
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS--136.2%
(COST $379,509) $ 432,898
================================================================================
Percentages are based on Net Assets of $317,930.***
* Non-income producing security.
** Rate shown is the 7-day effective yield as of September 30, 2007.
*** This number has been rounded to the nearest thousand.
+ More narrow industries are utilized for compliance purposes, whereas broad
sectors are utilized for reporting purposes.
# Security fully or partially on loan at September 30, 2007. The total value
of securities on loan at September 30, 2007, was $108,496,623.
(1) A private placement security. Units are non-transferable but may be
redeemed at the NAV. The Fund lends securities in its 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 of the Lending
Agreement in the Boston Global Investment Trust--Enhanced Portfolio, a
pooled investment fund. All such investments are made at the risk of the
Fund. As such, the Fund is liable for the investment losses. The Fund
receives an annual fee for its participation in the Lending Agreement
based on projected lending activity.
ADR--American Depositary Receipt
Cl--Class
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2007 ANNUAL REPORT | 41
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES (000)
September 30, 2007
Turner Turner Turner
Concentrated Core Turner International
Growth Growth Emerging Core Growth
Fund Fund Growth Fund Fund
- -----------------------------------------------------------------------------------------------------------------------------------
Assets:
- -----------------------------------------------------------------------------------------------------------------------------------
Investment securities, at cost $ 65,803 $ 219,861 $ 559,150 $ 1,988
Foreign currency, at cost -- -- -- 5
===================================================================================================================================
Investment securities, at value $ 74,693* $ 268,066 $ 739,156* $ 2,392
Foreign currency, at value -- -- -- 5
Receivable for investment securities sold 1,430 1,393 8,488 16
Receivable for capital shares sold 299 7,117 508 --
Receivable from investment adviser -- -- -- 12
Receivable for dividend income 57 262 490 3
- -----------------------------------------------------------------------------------------------------------------------------------
Total assets 76,479 276,838 748,642 2,428
===================================================================================================================================
Liabilities:
Payable for investment securities purchased 12,429 1,089 5,892 5
Obligation to return securities lending collateral 2,573 -- 103,502 --
Payable due to investment adviser 33 102 504 --
Payable due to shareholder servicing 22 7 128 --
Payable due to administrator 5 9 73 --
Payable for capital shares redeemed -- 265 428 --
Payable due to Chief Compliance Officer -- 1 13 --
Payable due to distributor -- -- -- --
Other accrued expenses 16 46 65 14
- -----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 15,078 1,519 110,605 19
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets $ 61,401 $ 275,319 $ 638,037 $ 2,409
===================================================================================================================================
*Includes market value of securities on loan $ 2,528 $ -- $ 99,592 $ --
===================================================================================================================================
Net assets:
Portfolio capital of Institutional Class Shares $ -- $ 199,790 $ -- $ 2,035
Portfolio capital of Investor Class Shares 201,319 31,126 388,081 --
Portfolio capital of Retirement Class Shares -- -- -- --
Undistributed net investment income 6 530 3,186 4
Accumulated net realized gain (loss) on investments (148,814) (4,332) 66,764 (34)
Net unrealized appreciation on investments 8,890 48,205 180,006 404
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets $ 61,401 $ 275,319 $ 638,037 $ 2,409
===================================================================================================================================
Outstanding shares of beneficial interest(1)
Institutional Class Shares(2) -- 16,522,412 -- 197,288
- -----------------------------------------------------------------------------------------------------------------------------------
Outstanding shares of beneficial interest(1)
Investor Class Shares(2) 6,067,016 2,619,924 9,959,218 --
- -----------------------------------------------------------------------------------------------------------------------------------
Outstanding shares of beneficial interest(1)
Retirement Class Shares(2) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets -- Institutional Class Shares(2) $ -- $ 237,778,131 $ -- $ 2,408,729
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets -- Investor Class Shares(2) $ 61,400,576 $ 37,541,248 $ 638,036,770 $ --
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets -- Retirement Class Shares(2) $ -- $ -- $ -- $ --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per share --
Institutional Class Shares $ -- $ 14.39 $ -- $ 12.21
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per share --
Investor Class Shares $ 10.12 $ 14.33 $ 64.06 $ --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per share --
Retirement Class Shares $ -- $ -- $ -- $ --
===================================================================================================================================
Turner Turner Turner Turner
Large Cap Large Cap Midcap Midcap
Growth Fund Value Fund Equity Fund Growth Fund
- -----------------------------------------------------------------------------------------------------------------------------------
Assets:
- -----------------------------------------------------------------------------------------------------------------------------------
Investment securities, at cost $ 39,783 $ 760 $ 508 $ 1,042,213
Foreign currency, at cost -- -- -- --
===================================================================================================================================
Investment securities, at value $ 46,348* $ 834 $ 534 $ 1,385,474*
Foreign currency, at value -- -- -- --
Receivable for investment securities sold 122 -- 7 30,167
Receivable for capital shares sold 167 -- -- 3,444
Receivable from investment adviser 4 2 -- --
Receivable for dividend income 34 1 -- 542
- -----------------------------------------------------------------------------------------------------------------------------------
Total assets 46,675 837 541 1,419,627
===================================================================================================================================
Liabilities:
Payable for investment securities purchased 7,795 -- 8 33,046
Obligation to return securities lending collateral 954 -- -- 36,854
Payable due to investment adviser -- -- -- 740
Payable due to shareholder servicing -- -- -- 264
Payable due to administrator 3 -- -- 151
Payable for capital shares redeemed 5 -- -- 1,990
Payable due to Chief Compliance Officer -- -- -- 20
Payable due to distributor -- -- -- 4
Other accrued expenses 17 2 1 174
- -----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 8,774 2 9 73,243
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets $ 37,901 $ 835 $ 532 $ 1,346,384
===================================================================================================================================
*Includes market value of securities on loan $ 947 $ -- $ -- $ 35,811
===================================================================================================================================
Net assets:
Portfolio capital of Institutional Class Shares $ 46,756 $ 675 $ -- $ --
Portfolio capital of Investor Class Shares 84 -- 527 1,282,778
Portfolio capital of Retirement Class Shares -- -- -- 4,588
Undistributed net investment income 42 5 -- 201
Accumulated net realized gain (loss) on investments (15,546) 81 (21) (284,444)
Net unrealized appreciation on investments 6,565 74 26 343,261
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets $ 37,901 $ 835 $ 532 $ 1,346,384
===================================================================================================================================
Outstanding shares of beneficial interest(1)
Institutional Class Shares(2) 5,574,814 64,947 12 --
- -----------------------------------------------------------------------------------------------------------------------------------
Outstanding shares of beneficial interest(1)
Investor Class Shares(2) 12,902 -- 50,100 37,531,019
- -----------------------------------------------------------------------------------------------------------------------------------
Outstanding shares of beneficial interest(1)
Retirement Class Shares(2) -- -- -- 178,838
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets -- Institutional Class Shares(2) $ 37,813,934 $ 835,057 $ 133 $ --
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets -- Investor Class Shares(2) $ 87,298 $ -- $ 531,474 $ 1,340,172,035
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets -- Retirement Class Shares(2) $ -- $ -- $ -- $ 6,212,012
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per share --
Institutional Class Shares $ 6.78 $ 12.86 $ 10.68+ $ --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per share --
Investor Class Shares $ 6.77 $ -- $ 10.61 $ 35.71
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per share --
Retirement Class Shares $ -- $ -- $ -- $ 34.74
===================================================================================================================================
Turner Turner Turner
New Enterprise Small Cap Small Cap
Fund Equity Fund Growth Fund
- -----------------------------------------------------------------------------------------------------------------------
Assets:
- -----------------------------------------------------------------------------------------------------------------------
Investment securities, at cost $ 56,490 $ 63,211 $ 379,509
Foreign currency, at cost -- -- --
=======================================================================================================================
Investment securities, at value $ 66,613* $ 68,595* $ 432,898*
Foreign currency, at value -- -- --
Receivable for investment securities sold 948 1,688 5,075
Receivable for capital shares sold 13,156 121 674
Receivable from investment adviser -- -- --
Receivable for dividend income 22 40 133
- -----------------------------------------------------------------------------------------------------------------------
Total assets 80,739 70,444 438,780
=======================================================================================================================
Liabilities:
Payable for investment securities purchased 2,291 1,993 7,356
Obligation to return securities lending collateral 8,128 3,012 112,994
Payable due to investment adviser 38 51 185
Payable due to shareholder servicing 13 13 95
Payable due to administrator 6 8 36
Payable for capital shares redeemed 102 49 138
Payable due to Chief Compliance Officer -- -- 5
Payable due to distributor -- -- --
Other accrued expenses 16 26 41
- -----------------------------------------------------------------------------------------------------------------------
Total liabilities 10,594 5,152 120,850
- -----------------------------------------------------------------------------------------------------------------------
Net assets $ 70,145 $ 65,292 $ 317,930
=======================================================================================================================
*Includes market value of securities on loan $ 7,791 $ 2,858 $ 108,497
=======================================================================================================================
Net assets:
Portfolio capital of Institutional Class Shares $ -- $ -- $ --
Portfolio capital of Investor Class Shares 69,980 51,223 317,914
Portfolio capital of Retirement Class Shares -- -- --
Undistributed net investment income 28 12 345
Accumulated net realized gain (loss) on investments (9,986) 8,673 (53,718)
Net unrealized appreciation on investments 10,123 5,384 53,389
- -----------------------------------------------------------------------------------------------------------------------
Net assets $ 70,145 $ 65,292 $ 317,930
=======================================================================================================================
Outstanding shares of beneficial interest(1)
Institutional Class Shares(2) -- -- --
- -----------------------------------------------------------------------------------------------------------------------
Outstanding shares of beneficial interest(1)
Investor Class Shares(2) 8,046,810 3,770,827 9,640,885
- -----------------------------------------------------------------------------------------------------------------------
Outstanding shares of beneficial interest(1)
Retirement Class Shares(2) -- -- --
- -----------------------------------------------------------------------------------------------------------------------
Net Assets -- Institutional Class Shares(2) $ -- $ -- $ --
- -----------------------------------------------------------------------------------------------------------------------
Net Assets -- Investor Class Shares(2) $ 70,144,755 $ 65,291,542 $ 317,929,641
- -----------------------------------------------------------------------------------------------------------------------
Net Assets -- Retirement Class Shares(2) $ -- $ -- $ --
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per share --
Institutional Class Shares $ -- $ -- $ --
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per share --
Investor Class Shares $ 8.72 $ 17.31 $ 32.98
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per share --
Retirement Class Shares $ -- $ -- $ --
=======================================================================================================================
(1) Unlimited authorization -- par value $0.00001.
(2) Shares and Net Assets have not been rounded.
+ Difference in net asset value recalculation and net asset value stated is
caused by rounding differences.
Amounts designated as "--" are either not applicable, $0 or have been
rounded to $0.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2007 ANNUAL REPORT | 42 & 43
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS (000)
Turner Turner Turner
Concentrated Core Turner International
Growth Growth Emerging Core Growth
Fund Fund Growth Fund Fund
----------------------------------------------------------
year ended year ended year ended 1/31/07 (3) thru
9/30/07 9/30/07 9/30/07 9/30/07
- -----------------------------------------------------------------------------------------------------------------------
Investment Income:
Dividend $ 180 $ 1,907 $ 4,991 $ 26
Securities lending 18 7 481 --
Foreign taxes withheld (1) (28) -- (3)
- -----------------------------------------------------------------------------------------------------------------------
Total Investment income 197 1,886 5,472 23
- -----------------------------------------------------------------------------------------------------------------------
Expenses:
Investment advisory fees 315 1,283 6,060 10
Shareholder service fees (1) 59 70 1,019 --
Shareholder service fees (2) -- -- -- --
Distribution fees (1) -- -- -- --
Distribution fees (2) -- -- -- --
Administrator fees 53 247 878 2
Chief Compliance Officer fees 2 11 37 --
Transfer agent fees 53 100 450 20
Custodian fees 27 50 110 16
Printing fees 8 48 121 1
Professional fees 7 35 113 --
Registration fees 5 12 71 --
Trustees' fees 3 13 51 --
Insurance and other fees 3 11 54 3
- -----------------------------------------------------------------------------------------------------------------------
Total expenses 535 1,880 8,964 52
Less:
Investment advisory fee waiver (120) (472) (472) (10)
Fees paid indirectly (4) (9) (1) (9) --
Administrator fee waiver -- (167) -- --
Reimbursements of other operating expenses -- -- -- (30)
Distribution fee waiver -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------
Net expenses 406 1,240 8,483 12
- -----------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (209) 646 (3,011) 11
- -----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from securities sold 7,682 (1,620) 71,394 (34)
Net realized loss on foreign currency transactions -- -- -- (7)
Net change in unrealized appreciation (depreciation)
on investments, foreign currencies, and
translation of other assets and liabilities
denominated in foreign currencies 3,552 39,771 65,475 404
- -----------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments
and foreign currency transactions 11,234 38,151 136,869 363
- -----------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $11,025 $38,797 $133,858 $374
=======================================================================================================================
- --------------------------------------------------------------------------------
Turner Turner Turner Turner
Large Cap Large Cap Midcap Midcap
Growth Fund Value Fund Equity Fund Growth Fund
---------------------------------------------------------
year ended year ended 1/31/07 (3) thru year ended
9/30/07 9/30/07 9/30/07 9/30/07
- ----------------------------------------------------------------------------------------------------------------------
Investment Income:
Dividend $ 221 $ 14 $ 2 $ 6,078
Securities lending 2 -- -- 298
Foreign taxes withheld (2) -- -- (1)
- ----------------------------------------------------------------------------------------------------------------------
Total Investment income 221 14 2 6,375
- ----------------------------------------------------------------------------------------------------------------------
Expenses:
Investment advisory fees 143 5 2 8,799
Shareholder service fees (1) -- -- 1 1,966
Shareholder service fees (2) -- -- -- 13
Distribution fees (1) -- -- -- --
Distribution fees (2) -- -- -- 13
Administrator fees 35 1 -- 1,700
Chief Compliance Officer fees 2 -- -- 72
Transfer agent fees 76 26 40 1,001
Custodian fees 20 6 10 226
Printing fees 6 1 -- 240
Professional fees 5 -- -- 222
Registration fees 3 1 -- 138
Trustees' fees 2 -- -- 98
Insurance and other fees 2 -- 1 103
- ----------------------------------------------------------------------------------------------------------------------
Total expenses 294 40 54 14,591
Less:
Investment advisory fee waiver (127) (5) (2) (755)
Fees paid indirectly (4) -- -- -- (26)
Administrator fee waiver -- -- -- --
Reimbursements of other operating expenses -- (30) (49) --
Distribution fee waiver -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------
Net expenses 167 5 3 13,810
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 54 9 (1) (7,435)
- ----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from securities sold 755 81 (21) 133,836
Net realized loss on foreign currency transactions -- -- -- --
Net change in unrealized appreciation (depreciation)
on investments, foreign currencies, and
translation of other assets and liabilities
denominated in foreign currencies 4,190 19 26 178,581
- ----------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments
and foreign currency transactions 4,945 100 5 312,417
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $4,999 $109 $ 4 $304,982
======================================================================================================================
Turner Turner Turner
New Enterprise Small Cap Small Cap
Fund Equity Fund Growth Fund
------------------------------------------
year ended year ended year ended
9/30/07 9/30/07 9/30/07
- ----------------------------------------------------------------------------------------------------------------------
Investment Income:
Dividend $ 65 $ 447 $ 1,334
Securities lending 9 66 424
Foreign taxes withheld -- -- --
- ----------------------------------------------------------------------------------------------------------------------
Total Investment income 74 513 1,758
- ----------------------------------------------------------------------------------------------------------------------
Expenses:
Investment advisory fees 258 717 2,951
Shareholder service fees (1) 43 121 504
Shareholder service fees (2) -- -- --
Distribution fees (1) -- 68 --
Distribution fees (2) -- -- --
Administrator fees 37 109 428
Chief Compliance Officer fees 2 5 18
Transfer agent fees 63 71 209
Custodian fees 18 58 60
Printing fees 7 14 63
Professional fees 5 14 56
Registration fees 3 10 33
Trustees' fees 2 7 24
Insurance and other fees 1 5 24
- ----------------------------------------------------------------------------------------------------------------------
Total expenses 439 1,199 4,370
Less:
Investment advisory fee waiver (104) (104) (671)
Fees paid indirectly (4) (13) (1) (11)
Administrator fee waiver -- -- --
Reimbursements of other operating expenses -- -- --
Distribution fee waiver -- (68) --
- ----------------------------------------------------------------------------------------------------------------------
Net expenses 322 1,026 3,688
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (248) (513) (1,930)
- ----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) from securities sold 3,615 9,940 38,846
Net realized loss on foreign currency transactions -- -- --
Net change in unrealized appreciation (depreciation)
on investments, foreign currencies, and
translation of other assets and liabilities
denominated in foreign currencies 5,954 (1,650) 28,720
- ----------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments
and foreign currency transactions 9,569 8,290 67,566
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $9,321 $ 7,777 $65,636
======================================================================================================================
(1) Attributable to Investor Class Shares only.
(2) Attributable to Retirement Class Shares only.
(3) Commencement of operations.
(4) See Note 4 in Notes to Financial Statements.
Amounts designated as "--" are either not applicable, $0 or have been
rounded to $0.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2007 ANNUAL REPORT | 44 & 45
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (000)
Turner Concentrated
Growth Fund
------------------------
year ended year ended
9/30/07 9/30/06
- ------------------------------------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income (loss) $ (209) $ (367)
Net realized gain (loss) from securities sold 7,682 103
Net realized loss on foreign currency transactions -- --
Net change in unrealized appreciation (depreciation) on investments,
foreign currencies, and translation of other assets and
liabilities denominated in foreign currencies 3,552 1,947
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 11,025 1,683
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income
Institutional Class Shares -- --
Investor Class Shares -- --
Realized capital gains
Institutional Class Shares -- --
Investor Class Shares -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Institutional Class Shares
Proceeds from shares issued -- --
Proceeds from shares issued in lieu of cash distributions -- --
Cost of shares redeemed -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Institutional Class Shares transactions -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Investor Class Shares
Proceeds from shares issued 30,295 17,480
Proceeds from shares issued in lieu of cash distributions -- --
Cost of shares redeemed (18,099) (11,762)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Investor Class Shares transactions 12,196 5,718
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from capital share transactions 12,196 5,718
- ------------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 23,221 7,401
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of period 38,180 30,779
- ------------------------------------------------------------------------------------------------------------------------------------
End of period $ 61,401 $ 38,180
====================================================================================================================================
Undistributed net investment income $ 6 $ --
====================================================================================================================================
Shares issued and redeemed:
Institutional Class Shares
Issued -- --
Issued in lieu of cash distributions -- --
Redeemed -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in Institutional Class Shares -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Investor Class Shares
Issued 3,178 2,225
Issued in lieu of cash distributions -- --
Redeemed (2,136) (1,534)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in Investor Class Shares 1,042 691
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in share transactions 1,042 691
====================================================================================================================================
- --------------------------------------------------------------------------------
Turner Core Turner Emerging
Growth Fund Growth Fund
- ------------------------------------------------------------------------------------------------------------------------------------
year ended year ended year ended year ended
9/30/07 9/30/06 9/30/07 9/30/06
- ------------------------------------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income (loss) $ 646 $ 478 $ (3,011) $ (3,209)
Net realized gain (loss) from securities sold (1,620) (1,095) 71,394 50,190
Net realized loss on foreign currency transactions -- -- -- --
Net change in unrealized appreciation (depreciation) on investments,
foreign currencies, and translation of other assets and
liabilities denominated in foreign currencies 39,771 4,497 65,475 (22,616)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 38,797 3,880 133,858 24,365
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income
Institutional Class Shares (444) (162) -- --
Investor Class Shares (52) (1) -- --
Realized capital gains
Institutional Class Shares -- -- -- --
Investor Class Shares -- -- (50,964) (29,515)
- ------------------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions (496) (163) (50,964) (29,515)
- ------------------------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Institutional Class Shares
Proceeds from shares issued 147,804 40,388 -- --
Proceeds from shares issued in lieu of cash distributions 444 109 -- --
Cost of shares redeemed (14,649) (12,778) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Institutional Class Shares
transactions 133,599 27,719 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Investor Class Shares
Proceeds from shares issued 13,619 24,928 84,795 147,890
Proceeds from shares issued in lieu of cash distributions 52 1 50,559 28,983
Cost of shares redeemed (5,605) (1,870) (145,438) (108,604)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Investor Class Shares transactions 8,066 23,059 (10,084) 68,269
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from capital share transactions 141,665 50,778 (10,084) 68,269
- ------------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 179,966 54,495 72,810 63,119
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of period 95,353 40,858 565,227 502,108
- ------------------------------------------------------------------------------------------------------------------------------------
End of period $ 275,319 $ 95,353 $ 638,037 $ 565,227
====================================================================================================================================
Undistributed net investment income $ 530 $ 380 $ 3,186 $ --
====================================================================================================================================
Shares issued and redeemed:
Institutional Class Shares
Issued 11,444 3,530 -- --
Issued in lieu of cash distributions 36 10 -- --
Redeemed (1,132) (1,103) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in Institutional Class Shares 10,348 2,437 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Investor Class Shares
Issued 1,038 2,182 1,420 2,589
Issued in lieu of cash distributions 4 -- 898 533
Redeemed (439) (165) (2,458) (1,916)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in Investor Class Shares 603 2,017 (140) 1,206
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in share transactions 10,951 4,454 (140) 1,206
====================================================================================================================================
Turner International Turner Large Cap
Core Growth Fund Growth Fund
- ------------------------------------------------------------------------------------------------------------------------------------
1/31/07(1) thru year ended year ended
9/30/07 9/30/07 9/30/06
- ------------------------------------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income (loss) $ 11 $ 54 $ 80
Net realized gain (loss) from securities sold (34) 755 7,523
Net realized loss on foreign currency transactions (7) -- --
Net change in unrealized appreciation (depreciation) on investments,
foreign currencies, and translation of other assets and
liabilities denominated in foreign currencies 404 4,190 (5,052)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 374 4,999 2,551
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income
Institutional Class Shares -- (66) (109)
Investor Class Shares -- -- --
Realized capital gains
Institutional Class Shares -- -- --
Investor Class Shares -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions -- (66) (109)
- ------------------------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Institutional Class Shares
Proceeds from shares issued 2,035 19,850 21,806
Proceeds from shares issued in lieu of cash distributions -- 54 106
Cost of shares redeemed -- (6,530) (47,869)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Institutional Class Shares transactions 2,035 13,374 (25,957)
- ------------------------------------------------------------------------------------------------------------------------------------
Investor Class Shares
Proceeds from shares issued -- 86 --
Proceeds from shares issued in lieu of cash distributions -- -- --
Cost of shares redeemed -- (2) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Investor Class Shares transactions -- 84 --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from capital share transactions 2,035 13,458 (25,957)
- ------------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 2,409 18,391 (23,515)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of period -- 19,510 43,025
- ------------------------------------------------------------------------------------------------------------------------------------
End of period $ 2,409 $ 37,901 $ 19,510
====================================================================================================================================
Undistributed net investment income $ 4 $ 42 $ 54
====================================================================================================================================
Shares issued and redeemed:
Institutional Class Shares
Issued 197 3,159 3,911
Issued in lieu of cash distributions -- 9 19
Redeemed -- (1,089) (8,386)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in Institutional Class Shares 197 2,079 (4,456)
- ------------------------------------------------------------------------------------------------------------------------------------
Investor Class Shares
Issued -- 13 --
Issued in lieu of cash distributions -- -- --
Redeemed -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in Investor Class Shares -- 13 --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in share transactions 197 2,092 (4,456)
====================================================================================================================================
(1) Commencement of Operations.
Amounts designated as "--" are either not applicable, $0, or have been rounded
to $0.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2007 ANNUAL REPORT | 46 & 47
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (000)
Turner Large Cap Turner Midcap
Value Fund Equity Fund
--------------------------------------------
year ended 10/10/05(1) 1/31/07(1) thru
9/30/07 thru 9/30/06 9/30/07
- ----------------------------------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income (loss) $ 9 $ 7 $ (1)
Net realized gain (loss) from securities sold 81 12 (21)
Net change in unrealized appreciation (depreciation) on investments 19 55 26
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations 109 74 4
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income
Institutional Class Shares (9) (2) --
Investor Class Shares -- -- --
Retirement Class Shares -- -- --
Realized capital gains
Institutional Class Shares (12) -- --
Investor Class Shares -- -- --
Retirement Class Shares -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions (21) (2) --
- ----------------------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Institutional Class Shares
Proceeds from shares issued 230 506 --
Proceeds from shares issued in lieu of cash distributions 21 2 --
Cost of shares redeemed (84) -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from Institutional Class Shares transactions 167 508 --
- ----------------------------------------------------------------------------------------------------------------------------------
Investor Class Shares
Proceeds from shares issued -- -- 629
Proceeds from shares issued upon reorganization of the
Technology Fund into the New Enterprise Fund -- -- --
Proceeds from shares issued in lieu of cash distributions -- -- --
Cost of shares redeemed -- -- (101)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Investor Class Shares transactions -- -- 528
- ----------------------------------------------------------------------------------------------------------------------------------
Retirement Class Shares
Proceeds from shares issued -- -- --
Proceeds from shares issued in lieu of cash distributions -- -- --
Cost of shares redeemed -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from Retirement Class Shares transactions -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from capital share transactions 167 508 528
- ----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 255 580 532
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of period 580 -- --
- ----------------------------------------------------------------------------------------------------------------------------------
End of period $ 835 $ 580 $ 532
==================================================================================================================================
Undistributed net investment income $ 5 $ 5 $ --
==================================================================================================================================
Shares issued and redeemed:
Institutional Class Shares
Issued 19 51 --
Issued in lieu of cash distributions 2 -- --
Redeemed (7) -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in Institutional Class Shares 14 51 --
- ----------------------------------------------------------------------------------------------------------------------------------
Investor Class Shares
Issued -- -- 60
Issued upon reorganization of the Technology Fund into the New Enterprise Fund -- -- --
Issued in lieu of cash distributions -- -- --
Redeemed -- -- (10)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in Investor Class Shares -- -- 50
- ----------------------------------------------------------------------------------------------------------------------------------
Retirement Class Shares
Issued -- -- --
Issued in lieu of cash distributions -- -- --
Redeemed -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in Retirement Class Shares -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in share transactions 14 51 50
==================================================================================================================================
- --------------------------------------------------------------------------------
Turner Midcap Turner New
Growth Fund Enterprise Fund
--------------------------------------------------
year ended year ended year ended year ended
9/30/07 9/30/06 9/30/07 9/30/06
- ------------------------------------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income (loss) $ (7,435) $ (3,286) $ (248) $ (184)
Net realized gain (loss) from securities sold 133,836 76,426 3,615 (1,292)
Net change in unrealized appreciation (depreciation) on investments 178,581 (35,031) 5,954 560
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations 304,982 38,109 9,321 (916)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income
Institutional Class Shares -- -- -- --
Investor Class Shares -- -- -- --
Retirement Class Shares -- -- -- --
Realized capital gains
Institutional Class Shares -- -- -- --
Investor Class Shares -- -- -- --
Retirement Class Shares -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Institutional Class Shares
Proceeds from shares issued -- -- -- --
Proceeds from shares issued in lieu of cash distributions -- -- -- --
Cost of shares redeemed -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from Institutional Class Shares transactions -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Investor Class Shares
Proceeds from shares issued 327,209 405,746 50,438 24,113
Proceeds from shares issued upon reorganization of the
Technology Fund into the New Enterprise Fund -- -- -- 10,445
Proceeds from shares issued in lieu of cash distributions -- -- -- --
Cost of shares redeemed (404,010) (286,382) (13,654) (18,746)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Investor Class Shares transactions (76,801) 119,364 36,784 15,812
- ------------------------------------------------------------------------------------------------------------------------------------
Retirement Class Shares
Proceeds from shares issued 4,134 1,595 -- --
Proceeds from shares issued in lieu of cash distributions -- -- -- --
Cost of shares redeemed (1,576) (986) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from Retirement Class Shares transactions 2,558 609 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from capital share transactions (74,243) 119,973 36,784 15,812
- ------------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 230,739 158,082 46,105 14,896
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of period 1,115,645 957,563 24,040 9,144
- ------------------------------------------------------------------------------------------------------------------------------------
End of period $1,346,384 $1,115,645 $ 70,145 $ 24,040
====================================================================================================================================
Undistributed net investment income $ 201 $ -- $ 28 $ --
====================================================================================================================================
Shares issued and redeemed:
Institutional Class Shares
Issued -- -- -- --
Issued in lieu of cash distributions -- -- -- --
Redeemed -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in Institutional Class Shares -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Investor Class Shares
Issued 10,387 14,224 6,123 3,566
Issued upon reorganization of the Technology Fund into the New Enterprise Fund -- -- -- 1,675
Issued in lieu of cash distributions -- -- -- --
Redeemed (13,149) (10,145) (1,917) (2,960)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in Investor Class Shares (2,762) 4,079 4,206 2,281
- ------------------------------------------------------------------------------------------------------------------------------------
Retirement Class Shares
Issued 140 57 -- --
Issued in lieu of cash distributions -- -- -- --
Redeemed (52) (37) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in Retirement Class Shares 88 20 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in share transactions (2,674) 4,099 4,206 2,281
====================================================================================================================================
Turner Small Cap Turner Small Cap
Equity Fund Growth Fund
--------------------------------------------------
year ended year ended year ended year ended
9/30/07 9/30/06 9/30/07 9/30/06
- ------------------------------------------------------------------------------------------------------------------------------------
Investment activities:
Net investment income (loss) $ (513) $ (300) $ (1,930) $ (2,093)
Net realized gain (loss) from securities sold 9,940 5,261 38,846 39,786
Net change in unrealized appreciation (depreciation) on investments (1,650) (1,840) 28,720 (21,999)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations 7,777 3,121 65,636 15,694
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income
Institutional Class Shares -- -- -- --
Investor Class Shares -- -- -- --
Retirement Class Shares -- -- -- --
Realized capital gains
Institutional Class Shares -- -- -- --
Investor Class Shares (5,701) -- -- --
Retirement Class Shares -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions (5,701) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Capital share transactions:
Institutional Class Shares
Proceeds from shares issued -- -- -- --
Proceeds from shares issued in lieu of cash distributions -- -- -- --
Cost of shares redeemed -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from Institutional Class Shares transactions -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Investor Class Shares
Proceeds from shares issued 7,445 21,402 80,195 114,978
Proceeds from shares issued upon reorganization of the
Technology Fund into the New Enterprise Fund -- -- -- --
Proceeds from shares issued in lieu of cash distributions 5,671 -- -- --
Cost of shares redeemed (31,240) (10,896) (76,172) (139,550)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Investor Class Shares transactions (18,124) 10,506 4,023 (24,572)
- ------------------------------------------------------------------------------------------------------------------------------------
Retirement Class Shares
Proceeds from shares issued -- -- -- --
Proceeds from shares issued in lieu of cash distributions -- -- -- --
Cost of shares redeemed -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from Retirement Class Shares transactions -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from capital share transactions (18,124) 10,506 4,023 (24,572)
- ------------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (16,048) 13,627 69,659 (8,878)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets:
Beginning of period 81,340 67,713 248,271 257,149
- ------------------------------------------------------------------------------------------------------------------------------------
End of period $ 65,292 $ 81,340 $ 317,930 $ 248,271
====================================================================================================================================
Undistributed net investment income $ 12 $ -- $ 345 $ 10
====================================================================================================================================
Shares issued and redeemed:
Institutional Class Shares
Issued -- -- -- --
Issued in lieu of cash distributions -- -- -- --
Redeemed -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in Institutional Class Shares -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Investor Class Shares
Issued 430 1,231 2,703 4,244
Issued upon reorganization of the Technology Fund into the New Enterprise Fund -- -- -- --
Issued in lieu of cash distributions 336 -- -- --
Redeemed (1,796) (647) (2,547) (5,180)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in Investor Class Shares (1,030) 584 156 (936)
- ------------------------------------------------------------------------------------------------------------------------------------
Retirement Class Shares
Issued -- -- -- --
Issued in lieu of cash distributions -- -- -- --
Redeemed -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in Retirement Class Shares -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in share transactions (1,030) 584 156 (936)
====================================================================================================================================
(1) Commencement of Operations.
Amounts designated as "--" are either not applicable, $0, or have been
rounded to $0.
The accompanying notes are an integral part of the financial statements.
TURNER FUNDS 2007 ANNUAL REPORT | 48 & 49
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
Realized and
Net asset Net unrealized Total Dividends Distributions
value, investment gains from from net from Total
beginning income (losses) on investment investment capital dividends and
of period (loss) investments operations income gains distributions
- ------------------------------------------------------------------------------------------------------------------------------------
Turner Concentrated Growth Fund -- Investor Class Shares
- --------------------------------------------------------
2007 $ 7.60 (0.05)(3) 2.57 2.52 -- -- --
2006 $ 7.10 (0.08)(3) 0.58 0.50 -- -- --
2005 $ 5.82 (0.02) 1.30 1.28 -- -- --
2004 $ 6.05 (0.07) (0.16) (0.23) -- -- --
2003 $ 4.03 (0.04) 2.06 2.02 -- -- --
- -----------------------------------------------------
Turner Core Growth Fund -- Institutional Class Shares
- -----------------------------------------------------
2007 $11.65 0.02 2.77 2.79 (0.05) -- (0.05)
2006 $10.93 0.06 0.69 0.75 (0.03) -- (0.03)
2005(6) $ 8.84 0.02 2.07 2.09 -- -- --
2004 $ 8.04 (0.03) 0.83 0.80 -- -- --
2003 $ 6.29 (0.03) 1.78 1.75 -- -- --
- ------------------------------------------------
Turner Core Growth Fund -- Investor Class Shares
- ------------------------------------------------
2007 $11.61 0.02 2.73 2.75 (0.03) -- (0.03)
2006 $10.93 0.07 0.64 0.71 (0.03) -- (0.03)
2005(2)(6) $10.58 -- 0.35 0.35 -- -- --
- ----------------------------------------------------
Turner Emerging Growth Fund -- Investor Class Shares
- ----------------------------------------------------
2007 $55.97 (0.30)(3) 13.61 13.31 -- (5.22) (5.22)
2006 $56.46 (0.32)(3) 3.02 2.70 -- (3.19) (3.19)
2005 $50.02 (0.46)(3) 13.35 12.89 -- (6.45) (6.45)
2004 $41.38 (0.39) 10.04 9.65 -- (1.01) (1.01)
2003 $32.04 (0.25) 9.59 9.34 -- -- --
- -------------------------------------------------------------------
Turner International Core Growth Fund -- Institutional Class Shares
- -------------------------------------------------------------------
2007(5) $10.00 0.07 (3) 2.14 2.21 -- -- --
- ----------------------------------------------------------
Turner Large Cap Growth Fund -- Institutional Class Shares
- ----------------------------------------------------------
2007 $ 5.58 0.01 (3) 1.21 1.22 (0.02) -- (0.02)
2006 $ 5.41 0.01 (3) 0.17 0.18 (0.01) -- (0.01)
2005 $ 4.83 0.01 (3) 0.57 0.58 --* -- --
2004 $ 4.62 -- 0.21 0.21 --* -- --
2003 $ 3.50 -- 1.12 1.12 --* -- --
- -----------------------------------------------------
Turner Large Cap Growth Fund -- Investor Class Shares
- -----------------------------------------------------
2007(5) $ 5.92 0.01 (3) 0.84 0.85 -- -- --
- ---------------------------------------------------------
Turner Large Cap Value Fund -- Institutional Class Shares
- ---------------------------------------------------------
2007 $11.44 0.14 (3) 1.65 1.79 (0.15) (0.22) (0.37)
2006 (4) $10.00 0.16 (3) 1.33 1.49 (0.05) -- (0.05)
Net Ratio of
Net asset assets end net expenses
value, end Total of period to average
of period return (000) net assets++
- ---------------------------------------------------------------------------------------------------
Turner Concentrated Growth Fund -- Investor Class Shares
- --------------------------------------------------------
2007 $10.12 33.16% $ 61,401 1.11%
2006 $ 7.60 7.04% $ 38,180 1.59%
2005 $ 7.10 21.99% $ 30,779 1.15%
2004 $ 5.82 (3.80)% $ 39,109 1.42%
2003 $ 6.05 50.12% $ 47,004 1.23%
- -----------------------------------------------------
Turner Core Growth Fund -- Institutional Class Shares
- -----------------------------------------------------
2007 $14.39 24.00% $ 237,778 0.68%
2006 $11.65 6.91% $ 71,935 0.59%
2005 (6) $10.93 23.64% $ 40,857 0.69% (1)
2004 $ 8.84 9.95% $ 5,080 1.25%
2003 $ 8.04 27.82% $ 5,528 1.25%
- ------------------------------------------------
Turner Core Growth Fund -- Investor Class Shares
- ------------------------------------------------
2007 $14.33 23.68% $ 37,541 0.94%
2006 $11.61 6.52% $ 23,418 0.94%
2005 (2)(6) $10.93 3.31%+ $ 1 0.83%
- ----------------------------------------------------
Turner Emerging Growth Fund -- Investor Class Shares
- ----------------------------------------------------
2007 $64.06 25.08% $ 638,037 1.40%
2006 $55.97 4.95% $ 565,227 1.40%
2005 $56.46 27.90% $ 502,108 1.40%
2004 $50.02 23.54% $ 366,692 1.40%
2003 $41.38 29.15% $ 253,840 1.40%
- -------------------------------------------------------------------
Turner International Core Growth Fund -- Institutional Class Shares
- -------------------------------------------------------------------
2007 (5) $12.21 22.10%+ $ 2,409 1.10%
- ----------------------------------------------------------
Turner Large Cap Growth Fund -- Institutional Class Shares
- ----------------------------------------------------------
2007 $ 6.78 21.86% $ 37,814 0.70%
2006 $ 5.58 3.40% $ 19,510 0.75%
2005 $ 5.41 12.09% $ 43,025 0.75%
2004 $ 4.83 4.64% $ 67,991 0.75%
2003 $ 4.62 32.01% $ 79,416 0.75%
- -----------------------------------------------------
Turner Large Cap Growth Fund -- Investor Class Shares
- -----------------------------------------------------
2007 (5) $ 6.77 14.36%+ $ 87 0.94%
- ---------------------------------------------------------
Turner Large Cap Value Fund -- Institutional Class Shares
- ---------------------------------------------------------
2007 $12.86 15.91% $ 835 0.65%
2006 (4) $11.44 14.92%+ $ 580 0.59%
Ratio of total Ratio of net
expenses investment
to average income (loss) Portfolio
net assets to average turnover
net assets++ rate+++
- -------------------------------------------------------------------------------------------
Turner Concentrated Growth Fund -- Investor Class Shares
- --------------------------------------------------------
2007 1.46% (0.57)% 219.62%
2006 1.79% (1.01)% 250.81%
2005 1.41% (0.57)% 329.52%
2004 1.57% (0.99)% 498.78%
2003 1.60% (0.90)% 762.18%
- -----------------------------------------------------
Turner Core Growth Fund -- Institutional Class Shares
- -----------------------------------------------------
2007 1.06% 0.42% 102.71%
2006 1.20% 0.77% 123.67%
2005 (6) 1.60% 0.46% 136.36%
2004 1.97% (0.27)% 104.00%
2003 2.14% (0.34)% 187.00%
- ------------------------------------------------
Turner Core Growth Fund -- Investor Class Shares
- ------------------------------------------------
2007 1.31% 0.15% 102.71%
2006 1.43% 0.23% 123.67%
2005 (2)(6) 2.50% 0.33% 136.36%
- ----------------------------------------------------
Turner Emerging Growth Fund -- Investor Class Shares
- ----------------------------------------------------
2007 1.48% (0.50)% 87.53%
2006 1.44% (0.57)% 77.87%
2005 1.44% (0.90)% 73.50%
2004 1.42% (0.85)% 122.45%
2003 1.44% (0.81)% 147.77%
- -------------------------------------------------------------------
Turner International Core Growth Fund -- Institutional Class Shares
- -------------------------------------------------------------------
2007 (5) 4.63% 0.99% 111.08%
- ----------------------------------------------------------
Turner Large Cap Growth Fund -- Institutional Class Shares
- ----------------------------------------------------------
2007 1.23% 0.23% 118.85%
2006 1.16% 0.26% 194.17%
2005 1.10% 0.16% 154.66%
2004 0.94% 0.11% 165.94%
2003 0.97% 0.03% 201.35%
- -----------------------------------------------------
Turner Large Cap Growth Fund -- Investor Class Shares
- -----------------------------------------------------
2007 (5) 1.51% 0.13% 118.85%
- ---------------------------------------------------------
Turner Large Cap Value Fund -- Institutional Class Shares
- ---------------------------------------------------------
2007 5.25% 1.15% 270.76%
2006 (4) 7.71% 1.52% 251.67%
* Amount represents less than $0.01 per share.
+ Total return is for the period indicated and has not been annualized.
++ Inclusive of fees paid indirectly, waivers and/or reimbursements.
+++ Excludes effect of in-kind transfers and mergers.
(1) For the period October 1, 2004 through February 25, 2005, the total
expense cap was 1.25%. Effective February 26, 2005, the total expense cap
was changed to 0.59%.
(2) Commenced operations on August 1, 2005. All ratios for the period have
been annualized.
(3) Based on average shares outstanding.
(4) Commenced operations on October 10, 2005. All ratios for the period have
been annualized.
(5) Commenced operations on January 31, 2007. All ratios for the period have
been annualized.
(6) Effective February 25, 2005, the Constellation TIP Core Growth Fund
reorganized with and into a newly-created series of the Turner Funds, the
Turner Core Growth Fund.
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 2007 ANNUAL REPORT | 50 & 51
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
Net asset Net Realized and Total Dividends Distributions Tax
value, investment unrealized from from net from Return Total
beginning income gains on investment investment capital of dividends and
of period (loss) investments operations income gains Capital distributions
- -----------------------------------------------------------------------------------------------------------------------------------
Turner Midcap Equity Fund -- Institutional Class Shares
- -------------------------------------------------------
2007 (3) $10.00 0.04 (1)(2) 0.64 0.68 -- -- -- --
- --------------------------------------------------
Turner Midcap Equity Fund -- Investor Class Shares
- --------------------------------------------------
2007 (3) $10.00 (0.02)(1) 0.63 0.61 -- -- -- --
- --------------------------------------------------
Turner Midcap Growth Fund -- Investor Class Shares
- --------------------------------------------------
2007 $27.63 (0.20)(1) 8.28 8.08 -- -- -- --
2006 $26.39 (0.08)(1) 1.32 1.24 -- -- -- --
2005 $20.99 (0.19)(1) 5.59 5.40 -- -- -- --
2004 $19.54 (0.18)(1) 1.63 1.45 -- -- -- --
2003 $13.78 (0.14)(1) 5.90 5.76 -- -- -- --
- ----------------------------------------------------
Turner Midcap Growth Fund -- Retirement Class Shares
- ----------------------------------------------------
2007 $26.96 (0.30)(1) 8.08 7.78 -- -- -- --
2006 $25.89 (0.23)(1) 1.30 1.07 -- -- -- --
2005 $20.69 (0.30)(1) 5.50 5.20 -- -- -- --
2004 $19.36 (0.28)(1) 1.61 1.33 -- -- -- --
2003 $13.72 (0.23)(1) 5.87 5.64 -- -- -- --
- ---------------------------------------------------
Turner New Enterprise Fund -- Investor Class Shares
- ---------------------------------------------------
2007 $ 6.26 (0.07)(1) 2.53 2.46 -- -- -- --
2006 $ 5.86 (0.07)(1) 0.47 (2) 0.40 -- -- -- --
2005 $ 4.52 (0.03) 1.37 1.34 -- -- -- --
2004 $ 4.34 (0.06) 0.24 (2) 0.18 -- -- -- --
2003 $ 2.27 (0.02) 2.09 2.07 -- -- -- --
- -----------------------------------------------------
Turner Small Cap Equity Fund -- Investor Class Shares
- -----------------------------------------------------
2007 $16.94 (0.12)(1) 1.79 1.67 -- (1.30) -- (1.30)
2006 $16.06 (0.07)(1) 0.95 0.88 -- -- -- --
2005 $13.92 (0.11)(1) 2.25 2.14 -- -- -- --
2004 $12.27 (0.02) 2.95 2.93 -- (1.23) (0.05) (1.28)
2003 $ 9.30 (0.02) 3.00 2.98 (0.01) -- -- (0.01)
- -----------------------------------------------------
Turner Small Cap Growth Fund -- Investor Class Shares
- -----------------------------------------------------
2007 $26.17 (0.20)(1) 7.01 6.81 -- -- -- --
2006 $24.68 (0.21)(1) 1.70 1.49 -- -- -- --
2005 $21.33 (0.01) 3.36 3.35 -- -- -- --
2004 $18.88 (0.19) 2.64 2.45 -- -- -- --
2003 $12.62 (0.12) 6.38 6.26 -- -- -- --
Ratio of net
Net Ratio of Ratio of total investment
Net asset assets end net expenses expenses income (loss) Portfolio
value, end Total of period to average to average to average turnover
of period return (000) net assets++ net assets net assets++ rate+++
- --------------------------------------------------------------------------------------------------------------------------------
Turner Midcap Equity Fund -- Institutional Class Shares
- -------------------------------------------------------
2007 (3) $ 10.68 6.80%+ $ -- 0.90% 31.25% 0.60% 97.57%
- --------------------------------------------------
Turner Midcap Equity Fund -- Investor Class Shares
- --------------------------------------------------
2007 (3) $ 10.61 6.10%+ $ 532 1.15% 22.26% (0.26)% 97.57%
- --------------------------------------------------
Turner Midcap Growth Fund -- Investor Class Shares
- --------------------------------------------------
2007 $ 35.71 29.24% $ 1,340,172 1.18% 1.24% (0.63)% 155.27%
2006 $ 27.63 4.70% $ 1,113,201 1.18% 1.18% (0.30)% 134.55%
2005 $ 26.39 25.73% $ 955,730 1.20% 1.20% (0.78)% 151.63%
2004 $ 20.99 7.42% $ 857,899 1.16% 1.16% (0.84)% 167.17%
2003 $ 19.54 41.80% $ 773,788 1.15% 1.18% (0.87)% 208.80%
- ----------------------------------------------------
Turner Midcap Growth Fund -- Retirement Class Shares
- ----------------------------------------------------
2007 $ 34.74 28.86% $ 6,212 1.49% 1.56% (0.98)% 155.27%
2006 $ 26.96 4.13% $ 2,444 1.68% 1.68% (0.83)% 134.55%
2005 $ 25.89 25.13% $ 1,833 1.70% 1.70% (1.28)% 151.63%
2004 $ 20.69 6.87% $ 1,395 1.66% 1.66% (1.35)% 167.17%
2003 $ 19.36 41.11% $ 423 1.65% 1.68% (1.36)% 208.80%
- ---------------------------------------------------
Turner New Enterprise Fund -- Investor Class Shares
- ---------------------------------------------------
2007 $ 8.72 39.30% $ 70,145 1.27% 1.73% (0.98)% 173.48%
2006 $ 6.26 6.83% $ 24,040 1.61% 2.06% (1.02)% 234.62%
2005 $ 5.86 29.65% $ 9,144 1.36% 1.87% (1.14)% 226.82%
2004 $ 4.52 4.15% $ 10,805 1.18% 1.51% (0.83)% 382.08%
2003 $ 4.34 91.19% $ 13,468 1.16% 1.99% (0.95)% 451.37%
- -----------------------------------------------------
Turner Small Cap Equity Fund -- Investor Class Shares
- -----------------------------------------------------
2007 $ 17.31 10.14% $ 65,292 1.36% 1.59% (0.70)% 156.55%
2006 $ 16.94 5.48% $ 81,340 1.24% 1.70% (0.39)% 143.43%
2005 $ 16.06 15.37% $ 67,713 1.43% 1.67% (0.71)% 170.22%
2004 $ 13.92 24.75% $ 29,171 1.35% 1.94% (0.25)% 221.99%
2003 $ 12.27 32.04% $ 12,557 1.32% 2.05% (0.26)% 287.39%
- -----------------------------------------------------
Turner Small Cap Growth Fund -- Investor Class Shares
- -----------------------------------------------------
2007 $ 32.98 26.02% $ 317,930 1.25% 1.48% (0.65)% 134.34%
2006 $ 26.17 6.04% $ 248,271 1.25% 1.42% (0.79)% 154.27%
2005 $ 24.68 15.71% $ 257,149 1.25% 1.44% (0.91)% 152.96%
2004 $ 21.33 12.98% $ 237,213 1.25% 1.41% (0.95)% 151.02%
2003 $ 18.88 49.60% $ 192,791 1.25% 1.41% (0.79)% 187.95%
+ Total return is for the period indicated and has not been annualized.
++ Inclusive of fees paid indirectly, waivers and/or reimbursements.
+++ Excludes effect of in-kind transfers and mergers.
(1) Based on average shares outstanding.
(2) 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.
(3) Commenced operations on January 31, 2007. All ratios for the period have
been annualized.
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 2007 ANNUAL REPORT | 52 & 53
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
September 30, 2007
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 eleven active portfolios as of September 30, 2007. The
financial statements included herein are those of the Turner Concentrated Growth
Fund (the "Concentrated Growth Fund"), the Turner Core Growth Fund (the "Core
Growth Fund"), the Turner Emerging Growth Fund (the "Emerging Growth Fund"), the
Turner International Core Growth Fund (the "International Core Growth Fund"),
the Turner Large Cap Growth Fund (the "Large Cap Growth Fund"), the Turner Large
Cap Value Fund (the "Large Cap Value Fund"), the Turner Midcap Equity Fund (the
"Midcap Equity Fund"), the Turner Midcap Growth Fund (the "Midcap Growth Fund"),
the Turner New Enterprise Fund (the "New Enterprise Fund"), the Turner Small Cap
Equity Fund (the "Small Cap Equity Fund") and the Turner Small Cap Growth Fund
(the "Small Cap Growth Fund"), each a "Fund" and collectively the "Funds." The
Large Cap Value Fund commenced operations on October 10, 2005. The International
Core Growth Fund and the Midcap Equity Fund commenced operations on January 31,
2007.
Each Fund is registered as a diversified portfolio of the Trust with the
exception of the Large Cap Growth Fund and the Concentrated Growth Fund, each of
which are non-diversified.
The Funds are registered to offer different classes of shares: Institutional
Class Shares, Investor Class Shares, Retirement Class Shares, or a combination
of the three. 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.
On September 27, 2006, the assets of the Turner Technology Fund (the "Technology
Fund") were reorganized into the New Enterprise Fund. Under the Agreement and
Plan of Reorganization, 1,589,625 shares of the Technology Fund were exchanged
for 1,674,572 shares of the New Enterprise Fund in a tax-free exchange.
Upon the business combination of such Funds on September 27, 2006, the net
assets of the Technology Fund, which included paid-in-capital of $137,747,073,
accumulated realized losses of $129,088,165 and unrealized gains of $1,786,570,
combined with the New Enterprise Fund were $24,141,573. The aggregate net assets
of the Technology and New Enterprise Funds immediately before the reorganization
were $10,445,478 and $13,696,095, respectively.
The Emerging Growth, Small Cap Equity and Small Cap Growth Funds were closed to
new investors on March 7, 2000, May 1, 2005 and July 31, 2004, 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 generally accepted accounting principles in the United States of
America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements
and the reported amounts of increases and decreases in net assets from
operations during the reporting period. Actual results could differ from
those estimates.
SECURITY VALUATION--Securities listed on a securities exchange, market or
automated quotation system for which quotations are readily available
(except for securities traded on NASDAQ) are valued at the last quoted
sale price on the primary exchange or market (foreign or domestic) on
which they are traded, or, if there is no such reported sale, at the most
recent quoted bid price. For securities traded on NASDAQ, the NASDAQ
Official Closing Price will be used. The prices for foreign securities are
reported in local currency and converted to U.S. dollars using currency
exchange rates. Prices for most securities held in the Funds are provided
daily by recognized independent pricing agents. If a security price cannot
be obtained from an independent, third-party pricing agent, the Funds seek
to obtain a bid price from at least one independent broker.
Securities for which market prices are not "readily available" are valued
in accordance with Fair Value Procedures established by the Board of
Trustees (the "Board"). The Funds' Fair Value Procedures are implemented
through a Fair Value Committee (the "Committee") designated by the Board.
Some of the more common reasons that may necessitate that a security be
valued using Fair Value Procedures include: the security's trading has
been halted or suspended; the security has been delisted from a national
exchange; the security's primary trading market is temporarily closed at a
time when under normal conditions it would be open; the security has not
been traded for an extended period of time; the security's primary pricing
source is not able or willing to provide a price; or trading of the
security is subject to local government-imposed restrictions. When a
security is valued in accordance with the Fair Value Procedures, the
Committee will determine the value after taking into consideration
relevant information reasonably available to the Committee.
For securities that principally trade on a foreign market or exchange, a
significant gap in time can exist between the time of a particular
security's last trade and the time at which a Fund calculates its net
asset value. The closing prices of such securities may no longer reflect
their market value at the time the Fund
54 | TURNER FUNDS 2007 ANNUAL REPORT
- --------------------------------------------------------------------------------
calculates net asset value if an event that could materially affect the
value of those securities (a "Significant Event") has occurred between the
time of the security's last close and the time that the Fund calculates
net asset value. A Significant Event may relate to a single issuer or to
an entire market sector. If the Adviser of the Fund becomes aware of a
Significant Event that has occurred with respect to a security or group of
securities after the closing of the exchange or market on which the
security or securities principally trade, but before the time at which the
Fund calculates net asset value, it may request that a Committee meeting
be called. In addition, the Fund's Administrator monitors price movements
among certain selected indices, securities and/or baskets of securities
that may be an indicator that the closing prices received earlier from
foreign exchanges or markets may not reflect market value at the time the
Fund calculates net asset value. If price movements in a monitored index
or security exceed levels established by the Administrator and approved by
the Committee, the Administrator notifies the Adviser for any Fund holding
the relevant securities that such limits have been exceeded. In such
event, the Adviser makes the determination whether a Committee meeting
should be called based on the information provided.
The Fund uses FT Interactive Data Corp. ("FT") as a third party fair
valuation vendor. FT provides a fair value for foreign securities in the
International Core Growth Fund based on certain factors and methodologies
(involving, generally, tracking valuation correlations between the U.S.
market and each non-U.S. security) applied by FT in the event that there
is a movement in the U.S. market that exceeds a specific threshold
established by the Committee. The Committee establishes a "confidence
interval" which is used to determine the level of correlation between the
value of a foreign security and movements in the U.S. market before a
particular security is fair valued when the threshold is exceeded. In the
event that the threshold established by the Committee is exceeded on a
specific day, the International Core Growth Fund values its non-U.S.
securities that exceed the applicable "confidence interval" based upon the
fair values provided by FT. In such event, it is not necessary to hold a
Committee meeting. In the event that the Adviser believes that the fair
values provided by FT are not reliable, the Adviser contacts the
International Core Growth Fund's Administrator and may request that a
meeting of the Committee be held.
If a local market in which the International Core Growth Fund owns
securities is closed for one or more days or a portion of a day, the
International Core Growth Fund shall value all securities held in that
corresponding currency based on the fair value prices provided by FT using
the predetermined confidence interval discussed above.
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. 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.
FOREIGN CURRENCY TRANSLATION--The books and records of the International
Core Growth Fund are maintained in U.S. dollars. Investment securities and
other assets and liabilities denominated in a foreign currency are
translated into U.S. dollars on the date of valuation. The International
Core Growth Fund does not isolate that portion of realized or unrealized
gains and losses resulting from changes in the foreign exchange rate from
fluctuations arising from changes in the market prices of the securities.
These gains and losses are included in net realized and unrealized gains
and losses on investments on the Statements of Operations. Net realized
and unrealized gains and losses on foreign currency transactions represent
net foreign exchange gains or losses from foreign currency exchange
contracts, disposition of foreign currencies, currency gains or losses
realized between trade and settlement dates on securities transactions and
the difference between the amount of the investment income and foreign
withholding taxes recorded on the International Core Growth Fund's books
and the U.S. dollar equivalent amounts actually received or paid.
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.
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 Funds declare and distribute net
investment income, if any, annually, as a dividend to shareholders. Any
net realized capital gains on sales of securities for all Funds are
distributed to shareholders at least annually.
3. TRANSACTIONS WITH AFFILIATES:
Certain officers and trustees of the Trust are also officers or employees of
Turner Investment Partners, Inc. ("Turner") or SEI Global Funds Services
("SEI"), the Trust's sub-administrator. With the exception of the Trust's Chief
Compliance Officer, such officers are paid no fees by the Trust for serving as
officers and trustees of the Trust.
SEI Investments Distribution Co. (the "Distributor") provides distribution
services to the Funds under a
TURNER FUNDS 2007 ANNUAL REPORT | 55
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Distribution Agreement. Prior to January 1, 2006, Constellation Investment
Distribution Company, Inc. provided distribution services to the Funds.
4. ADMINISTRATION, SHAREHOLDER SERVICING, DISTRIBUTION AND TRANSFER AGENT
AGREEMENTS:
Turner provides administrative services to the Funds under Administration
Agreements 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
and 0.12% of the aggregate average daily net assets of the Trust over $2
billion. Prior to February 1, 2007, Turner had contractually agreed to limit its
administrator fee in the Core Growth Fund, Institutional Class Shares to 0.05%
through January 31, 2007. Effective February 1, 2007, Turner has discontinued
this arrangement. Under a separate Sub-Administration Agreement between Turner
and SEI, SEI provides sub-administrative services to the Trust. For the year
ended September 30, 2007, SEI was paid $1,023,738 by Turner.
The Funds have adopted a Distribution Plan for Investor Class and Retirement
Class Shares (the "Distribution Plan") under which firms, including the
Distributor, that provide distribution services may receive compensation. Under
the Distribution Plan, which was adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended, the Distributor is entitled to
receive aggregate fees for distribution services not exceeding seventy-five
basis points (0.75%) of the Fund's average daily net assets attributable to
Investor Class or Retirement Class Shares that are subject to the arrangement in
return for providing a broad range of distribution services. Currently, the
Retirement Class Shares of the Midcap Growth Fund pay the Distributor 0.25% in
distribution fees.
The Funds have also adopted Shareholder Services Plans (the "Shareholder
Services Plans"). Under the Shareholder Services Plans, Service Providers are
entitled to receive aggregate fees for shareholder services not exceeding
twenty-five basis points (0.25%) of each Fund's average daily net assets
attributable to Investor Class and Retirement Class Shares that are subject to
the arrangement in return for providing shareholder services. Currently,
Investor Class Shares of the Concentrated Growth Fund, Core Growth Fund,
Emerging Growth Fund, Large Cap Growth Fund, Midcap Equity Fund, Midcap Growth
Fund, New Enterprise Fund, Small Cap Equity Fund, and Small Cap Growth Fund, and
Retirement Class Shares of the Midcap Growth Fund pay 0.25% in shareholder
servicing fees.
DST Systems, Inc. serves as the transfer agent and dividend disbursing agent for
the Funds under a transfer agency agreement with the Trust. The following Funds
reimbursed Turner for amounts paid to third parties that provide sub-transfer
agency and other administrative services to the Funds during the year ended
September 30, 2007:
AMOUNT
-----------
Concentrated Growth Fund $ 16,246
Core Growth Fund 30,999
Emerging Growth Fund 343,142
International Core Growth Fund --
Large Cap Growth Fund 27,758
Large Cap Value Fund --
Midcap Equity Fund --
Midcap Growth Fund 644,976
New Enterprise Fund 4,863
Small Cap Equity Fund 36,542
Small Cap Growth Fund 135,928
The Funds may earn cash management credits which can be used to offset transfer
agent expenses. During the year ended September 30, 2007, the following Funds
earned cash management credits which were used to offset transfer agent
expenses. These amounts are labeled as "Fees Paid Indirectly" on the Statements
of Operations.
AMOUNT
-----------
Concentrated Growth Fund $ 8,552
Core Growth Fund 847
Emerging Growth Fund 8,765
International Core Growth Fund 61
Large Cap Growth Fund 396
Large Cap Value Fund 166
Midcap Equity Fund 114
Midcap Growth Fund 26,487
New Enterprise Fund 13,016
Small Cap Equity Fund 1,414
Small Cap Growth Fund 11,284
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
Amended and Restated Advisory Agreement dated November 17, 2006, Turner
Investment Management LLC, an affiliate of Turner, serves as the investment
adviser for the Small Cap Equity Fund and Midcap Equity Fund.
For their 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 contractually 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 through January 31, 2008. Accordingly, the
advisory fee and expense caps for certain Funds are as follows:
56 | TURNER FUNDS 2007 ANNUAL REPORT
- --------------------------------------------------------------------------------
ADVISORY FEES TOTAL EXPENSE CAP(8)
------------- ----------------------
Core Growth Fund 0.75% 0.69%(1),(3)
Emerging Growth Fund 1.00 1.40
International Core Growth Fund 0.85 1.10
Large Cap Growth Fund 0.60 0.69(1)(4)
Large Cap Value Fund 0.60 0.69(5)
Midcap Equity Fund 0.75 0.90(1)
Midcap Growth Fund 0.75 1.18(2)(6)
Small Cap Equity Fund 0.95 1.45(7)
Small Cap Growth Fund 1.00 1.25
(1) REPRESENTS MAXIMUM EXPENSE CAP FOR INSTITUTIONAL CLASS SHARES WHERE FUNDS
OFFER BOTH INSTITUTIONAL CLASS SHARES AND INVESTOR CLASS SHARES.
(2) REPRESENTS MAXIMUM EXPENSE CAP FOR INVESTOR CLASS SHARES WHERE FUNDS OFFER
BOTH INVESTOR CLASS SHARES AND RETIREMENT CLASS SHARES.
(3) PRIOR TO FEBRUARY 1, 2007, THE MAXIMUM EXPENSE CAP FOR THE FUND WAS 0.59%.
PRIOR TO THE REORGANIZATION OF THE CONSTELLATION TIP CORE GROWTH FUND ON
FEBRUARY 25, 2005, THE MAXIMUM EXPENSE CAP FOR THE FUND WAS 1.25%.
(4) PRIOR TO FEBRUARY 1, 2007, THE MAXIMUM EXPENSE CAP FOR THE FUND WAS 0.75%.
(5) PRIOR TO FEBRUARY 1, 2007, THE MAXIMUM EXPENSE CAP FOR THE FUND WAS 0.59%.
(6) PRIOR TO FEBRUARY 1, 2007, THE MAXIMUM EXPENSE CAP FOR THE FUND WAS 1.25%.
(7) PRIOR TO FEBRUARY 1, 2007, THE MAXIMUM EXPENSE CAP FOR THE FUND WAS 1.20%.
PRIOR TO DECEMBER 1, 2005, THE MAXIMUM EXPENSE CAP FOR THE FUND WAS 1.45%.
(8) TURNER INVESTMENT PARTNERS, INC. HAS CONTRACTUALLY AGREED TO WAIVE FUND
EXPENSES TO KEEP THE NET TOTAL OPERATING EXPENSES FOR THE CORE GROWTH
FUND, EMERGING GROWTH FUND, INTERNATIONAL CORE GROWTH FUND, LARGE CAP
GROWTH FUND, LARGE CAP VALUE FUND, MIDCAP EQUITY FUND, MIDCAP GROWTH FUND,
AND THE SMALL CAP GROWTH FUND FROM EXCEEDING 0.69%, 1.40%, 1.10%, 0.69%,
0.69%, 0.90%, 1.18%, AND 1.25%, RESPECTIVELY, THROUGH JANUARY 31, 2008.
TURNER INVESTMENT MANAGEMENT LLC HAS CONTRACTUALLY AGREED TO WAIVE FUND
EXPENSES TO KEEP THE NET TOTAL OPERATING EXPENSES FOR THE SMALL CAP EQUITY
FUND FROM EXCEEDING 1.45% THROUGH JANUARY 31, 2008.
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 (1.10% for all Funds) is accrued daily and paid monthly, based
on the Fund's average net assets during the current month.
The performance adjustment is calculated and paid monthly by comparing the
Fund's performance to that of the Fund's performance benchmark over the current
month plus the previous 11 months (the "performance period"). The annual
performance adjustment rate 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 Fund's 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
-------- ---------- ------------ ---------
Concentrated Growth Fund 1.10% +/-0.40% +/-2.50% 0.25%
New Enterprise Fund 1.10 +/-0.40 +/-2.50 0.25
(1) SEE THE FUND'S PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION FOR MORE
INFORMATION REGARDING THE FUNDS' PERFORMANCE BENCHMARK.
During the year ended September 30, 2007, the Funds' advisory fees, before
waivers, were adjusted in accordance with the policy described above:
NET
BASE ADVISER
ADVISER PERFORMANCE FEE BEFORE
FEE ADJUSTMENT WAIVERS
-------- ----------- -----------
Concentrated Growth Fund $403,049 $(87,908) $315,141
New Enterprise Fund 279,022 (20,812) 258,210
6. REDEMPTION FEES:
Sales or exchanges out of the Core Growth Fund, Large Cap Value Fund, New
Enterprise Fund and the Small Cap Equity Fund, within 90 days of purchase are
not currently subject to a redemption fee of 2.00%, but may be in the future.
The Funds will provide notice to shareholders before they implement the
redemption fee.
7. INVESTMENT TRANSACTIONS:
The cost of security purchases and the proceeds from security sales, other than
short-term investments, for the year ended September 30, 2007 were as follows
(000):
PURCHASES SALES
(000) (000)
---------- -----------
Concentrated Growth Fund $ 92,770 $ 81,994
Core Growth Fund 301,660 171,712
Emerging Growth Fund 466,258 541,072
International Core Growth Fund 3,897 1,931
Large Cap Growth Fund 41,932 28,649
Large Cap Value Fund 2,160 2,009
Midcap Equity Fund 873 363
Midcap Growth Fund 1,799,838 1,902,702
New Enterprise Fund 65,532 45,051
Small Cap Equity Fund 115,264 137,526
Small Cap Growth Fund 388,104 386,183
TURNER FUNDS 2007 ANNUAL REPORT | 57
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
8. 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.
The amounts of dividends from net investment income and distributions from net
realized capital gains, if any, 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, REIT adjustments and net operating losses. The
character and timing of dividends from net investment income and distributions
from net realized gains distributed during the fiscal year 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 during the fiscal year ended September 30, 2007 (000):
UNDISTRIBUTED
NET ACCUMULATED
INVESTMENT NET REALIZED PAID-IN
FUND INCOME GAIN/(LOSS) CAPITAL
- ---- ------------- ------------ --------
Concentrated Growth Fund $ 215 $ -- $ (215)
Emerging Growth Fund 6,197 (2,769) (3,428)
International Core Growth Fund (7) 7 --
Midcap Equity Fund 1 -- (1)
Midcap Growth Fund 7,636 (27) (7,609)
New Enterprise Fund 276 -- (276)
Small Cap Equity Fund 525 (470) (55)
Small Cap Growth Fund 2,265 (39) (2,226)
These reclassifications have no effect on net assets or net asset value per
share.
The tax character of dividends and distributions declared during the years ended
September 30, 2007 and September 30, 2006 were as follows (000):
ORDINARY LONG-TERM
INCOME CAPITAL GAIN TOTAL
-------- ------------ ---------
Core Growth Fund
2007 $ 496 $ -- $ 496
2006 163 -- 163
Emerging Growth Fund
2007 $ -- $ 50,964 $ 50,964
2006 8,774 20,741 29,515
Large Cap Growth Fund
2007 $ 66 $ -- $ 66
2006 109 -- 109
Large Cap Value Fund
2007 $ 21 $ -- $ 21
2006* 2 -- 2
Small Cap Equity Fund
2007 $ 128 $ 5,573 $ 5,701
2006 -- -- --
* PERIOD FROM INCEPTION OCTOBER 10, 2005 THROUGH SEPTEMBER 30, 2006.
58 | TURNER FUNDS 2007 ANNUAL REPORT
- --------------------------------------------------------------------------------
As of September 30, 2007, 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)
------------- ------------- ------------ ------- ------------ ----------- -------------
Concentrated Growth Fund $ -- $ -- $(148,814) $ -- $ 8,890 $ 6 $(139,918)
Core Growth Fund 530 -- (2,605) (1,111) 47,589 -- 44,403
Emerging Growth Fund 2,911 67,356 -- -- 179,208 481 249,956
International Core Growth Fund 4 -- -- (31) 401 -- 374
Large Cap Growth Fund 41 -- (15,534) -- 6,553 1 (8,939)
Large Cap Value Fund 46 40 -- -- 74 -- 160
Midcap Equity Fund -- -- -- (19) 24 -- 5
Midcap Growth Fund -- -- (284,254) -- 343,070 202 59,018
New Enterprise Fund -- -- (9,902) -- 10,040 27 165
Small Cap Equity Fund 3,122 5,838 -- -- 5,096 13 14,069
Small Cap Growth Fund -- -- (53,609) -- 53,282 343 16
Post-October losses represent losses realized on investment transactions from
November 1, 2006 through September 30, 2007 that, in accordance with Federal
income tax regulations, a Fund may elect to defer and treat as having arisen in
the following year. For Federal income tax purposes, capital loss carryforwards
may be carried forward and applied against future capital gains.
At September 30, 2007, the Funds had capital loss carryforwards available to
offset future realized capital gains through the indicated expiration dates
(000):
EXPIRING SEPTEMBER 30,
-------------------------------------------------------------------
2009 2010 2011 2013 2014 2015 TOTAL
------- --------- --------- ----- ----- ----- ---------
Concentrated Growth Fund $ 3,435 $ 132,529 $ 12,850 $ -- $ -- $ -- $ 148,814
Core Growth Fund -- -- 1,578 -- 200 827 2,605
Large Cap Growth Fund -- 396 15,138 -- -- -- 15,534
Midcap Growth Fund -- 154,754 129,500 -- -- -- 284,254
New Enterprise Fund -- 9,269 386 247 -- -- 9,902
Small Cap Growth Fund -- 27,615 25,994 -- -- -- 53,609
During the year ended September 30, 2007, the Concentrated Growth Fund, Large
Cap Growth Fund, Midcap Growth Fund, New Enterprise Fund, and the Small Cap
Growth Fund utilized capital loss carryforwards of $7,618,820, $718,537,
$132,793,380, $2,181,351, $38,612,061 respectively, to offset capital gains.
At September 30, 2007, 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
- ---- ----------- ------------ ------------ ------------
Concentrated Growth Fund $ 65,803 $ 9,042 $ (152) $ 8,890
Core Growth Fund 220,477 48,776 (1,187) 47,589
Emerging Growth Fund 559,948 187,002 (7,794) 179,208
International Core Growth Fund 1,991 403 (2) 401
Large Cap Growth Fund 39,795 6,663 (110) 6,553
Large Cap Value Fund 760 88 (14) 74
Midcap Equity Fund 510 39 (15) 24
Midcap Growth Fund 1,042,404 349,750 (6,680) 343,070
New Enterprise Fund 56,573 10,291 (251) 10,040
Small Cap Equity Fund 63,499 7,143 (2,047) 5,096
Small Cap Growth Fund 379,616 58,149 (4,867) 53,282
TURNER FUNDS 2007 ANNUAL REPORT | 59
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
9. 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.
The Funds enter into contracts that contain a variety of indemnifications. The
Funds' maximum exposure under these arrangements is unknown. However, the Funds
have not had prior claims or losses pursuant to these contracts and expect the
risk of loss to be remote.
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 of the Lending Agreement in the Boston Global Investment
Trust -- Enhanced Portfolio, a pooled investment fund. All such investments are
made at the risk of the Funds and, as such, the Funds are liable for investment
losses. The Funds receive an annual fee for their participation in the Lending
Agreement based on projected lending activity.
In the event of bankruptcy of the borrower, realization/ retention of the
collateral may be subject to legal proceedings.
11. NEW ACCOUNTING PRONOUNCEMENTS:
In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB
interpretation 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes." This
standard defines the threshold for recognizing the benefits of tax-return
positions in the financial statements as "more-likely-than-not" to be sustained
by the taxing authority and requires measurement of a tax position meeting the
more-likely-than-not criterion, based on the largest benefit that is more than
50 percent likely to be realized. FIN 48 is effective as of the beginning of the
first fiscal year beginning after December 15, 2006. At adoption, companies must
adjust their financial statements to reflect only those tax positions that are
more-likely-than-not to be sustained as of the adoption date. Based on its
analysis, management has determined that the adoption of FIN 48 will not have a
material impact to the Funds' financial statements upon adoption. The
International Core Growth Fund and the Midcap Equity Fund adopted FIN 48 and
management has determined that the adoption of FIN 48 did not have a material
impact to the financial statements of the International Core Growth Fund and the
Midcap Equity Fund, respectively. However, management's conclusions regarding
FIN 48 may be subject to review and adjustment at a later date based on factors
including, but not limited to, further implementation guidance expected from the
FASB, and on-going analyses of and changes to tax laws, regulations and
interpretations thereof.
In September 2006, the FASB issued Statement on Financial Accounting Standards
("SFAS") No. 157, "Fair Value Measurements." This standard establishes a single
authoritative definition of fair value, sets out a framework for measuring fair
value and requires additional disclosures about fair value measurements. SFAS
No. 157 applies to fair value measurements already required or permitted by
existing standards. SFAS No. 157 is effective for financial statements issued
for fiscal years beginning after November 15, 2007 and interim periods within
those fiscal years. The changes to current generally accepted accounting
principles from the application of this Statement relate to the definition of
fair value, the methods used to measure fair value, and the expanded disclosures
about fair value measurements. As of September 30, 2007 the Funds do not believe
the adoption of SFAS No. 157 will impact the financial statement amounts,
however, additional disclosures may be required about the inputs used to develop
the measurements and the effect of certain of the measurements on changes in net
assets for the period.
60 | TURNER FUNDS 2007 ANNUAL REPORT
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
THE BOARD OF TRUSTEES AND SHAREHOLDERS
TURNER FUNDS:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of the Turner Concentrated Growth Fund, Turner
Core Growth Fund, Turner Emerging Growth Fund, Turner International Core Growth
Fund, Turner Large Cap Growth Fund, Turner Large Cap Value Fund, Turner Midcap
Equity Fund, Turner Midcap Growth Fund, Turner New Enterprise Fund, Turner Small
Cap Equity Fund, and Turner Small Cap Growth Fund, (collectively, the Funds), as
of September 30, 2007, and the related statements of operations for the year
then ended, the changes in net assets and the financial highlights for each of
the years or periods in the three-year period then ended and the financial
highlights for each of the years in the four-year period then ended for the
Turner Core Growth 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 highlights of the Turner Small Cap Equity Fund, Turner New
Enterprise Fund, Turner Concentrated Growth Fund, Turner Large Cap Growth Fund,
Turner Midcap Growth Fund, Turner Small Cap Growth Fund, Turner Emerging Growth
Fund, for the years or periods ended September 30, 2004 and prior, and the
financial highlights of the Turner Core Growth Fund for the year ended September
30, 2003 were audited by other auditors. Those auditors expressed unqualified
opinions on those financial highlights in their reports dated November 3, 2004
and November 13, 2003, respectively.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements 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, 2007, by correspondence with the custodian
and brokers. As to securities purchased or sold but not yet received or
delivered, we performed other appropriate auditing procedures. 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 each
of the aforementioned funds of the Turner Funds as of September 30, 2007, the
results of their operations for the year then ended, the changes in their net
assets in each of the years in the two-year period then ended, and their
financial highlights for the periods indicated in the paragraph above, in
conformity with U.S. generally accepted accounting principles.
/s/ KPMG LLP
Philadelphia, Pennsylvania
November 21, 2007
TURNER FUNDS 2007 ANNUAL REPORT | 61
NOTICE TO SHAREHOLDERS (Unaudited)
- --------------------------------------------------------------------------------
For shareholders that do not have a September 30th, 2007 tax year end, this
notice is for informational purposes only. For shareholders with a September
30th, 2007 year end, please consult your tax advisor as to the pertinance of
this notice. For the fiscal year ended September 30th, 2007, each portfolio is
designating the following items with regard to distributions paid during the
year.
DIVIDENDS
LONG QUALIFYING
TERM FOR
(15% RATE) CORPORATE QUALIFYING
CAPITAL ORDINARY DIVIDENDS QUALIFYING QUALIFYING SHORT-TERM
GAIN INCOME TOTAL RECEIVABLE DIVIDEND INTEREST CAPITAL
DISTRIBUTION DISTRIBUTIONS DISTRIBUTIONS DEDUCTION(1) INCOME(2) INCOME(3) GAIN(4)
------------ ------------- ------------- ------------ ---------- ---------- ----------
Turner Concentrated
Growth Fund ................ 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Turner Core
Growth Fund ................ 0.00% 100.00% 100.00% 100.00% 100.00% 0.00% 0.00%
Turner Emerging
Growth Fund ................ 100.00% 0.00% 100.00% 0.00% 0.00% 0.00% 0.00%
Turner International
Core Growth Fund* .......... 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Turner Large Cap
Growth Fund ................ 0.00% 100.00% 100.00% 100.00% 100.00% 0.00% 0.00%
Turner Large Cap
Value Fund ................. 0.99% 99.01% 100.00% 39.45% 38.65% 0.00% 100.00%
Turner Midcap
Equity Fund ................ 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Turner Midcap
Growth Fund ................ 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Turner New
Enterprise Fund ............ 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Turner Small Cap
Equity Fund ................ 97.75% 2.25% 100.00% 10.72% 10.44% 0.00% 100.00%
Turner Small Cap
Growth Fund ................ 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
(1) Qualifying dividends represent dividends which qualify for the corporate
dividends received deduction and are 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.
(3) The percentage in this column represents the amount of "Qualifying
Interest Income" as created by the American Jobs Creation Act of 2004 and
is reflected as a percentage of net investment income distributions that
is exempt from U.S. withholding tax when paid to foreign investors.
(4) The percentage in this column represents the amount of "Qualifying
Short-Term Capital Gain" as created by the American Jobs Creation Act of
2004 and is reflected as a percentage of short-term capital gain
distributions that is exempt from U.S. withholding tax when paid to
foreign investors.
* The Turner International Core Growth Fund intends to pass through a
foreign tax credit to shareholders. For fiscal year ended 2007 the total
amount of foreign source income is $23,391. The total amount of foreign
tax paid is $2,406. Your allocable share of the foreign tax credit will be
reported on Form 1099-DIV.
The information reported herein may differ from the information and
distributions taxable to the Shareholders for the calendar year ending December
31, 2007. Complete information will be computed and reported in conjunction with
your 2006 Form 1099-DIV.
62 | TURNER FUNDS 2007 ANNUAL REPORT
TRUSTEES AND OFFICERS OF THE TRUST
- --------------------------------------------------------------------------------
TERM OF NUMBER OF
OFFICE PORTFOLIOS IN
POSITION AND LENGTH COMPLEX OTHER
HELD WITH OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN DIRECTORSHIPS
NAME, ADDRESS, AND AGE THE FUND SERVED(2) DURING PAST 5 YEARS BY TRUSTEE HELD
- ------------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE*
- ------------------------------------------------------------------------------------------------------------------------------------
Robert E. Turner Trustee Trustee Chairman and Chief Investment Officer 11 Bradley University,
1205 Westlakes Drive since 1996 of Turner since 1990. The Crossroads
Suite 100 School, City Team
Berwyn, PA 19312 Ministries
(51)
- ------------------------------------------------------------------------------------------------------------------------------------
*Mr. Turner is deemed to be an "Interested Trustee" by virtue of his relationship with Turner Investment Partners, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
NON-INTERESTED TRUSTEES(1)
- ------------------------------------------------------------------------------------------------------------------------------------
Alfred C. Salvato Trustee Trustee Associate Vice President and 11 N/A
(49) since 1996 Treasurer, Thomas Jefferson University
since 2003, Treasurer since 1995.
- ------------------------------------------------------------------------------------------------------------------------------------
Janet F. Sansone Trustee Trustee Self-employed. Consultant since 1999. 11 N/A
(62) since 1996 Senior Vice President of Human
Resources of Frontier Corporation
(telecommunications company),
(1993-1999).
- ------------------------------------------------------------------------------------------------------------------------------------
Dr. John T. Wholihan Trustee Trustee Professor and Dean, Loyola Marymount 11 AACSB
(69) since 1996 University, since 1984. International
- ------------------------------------------------------------------------------------------------------------------------------------
EXECUTIVE OFFICERS
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas R. Trala, Jr. President President Chief Operating Officer of Turner N/A N/A
1205 Westlakes Drive since 2004 since 2004 and Chief Financial Officer
Suite 100 since 1995.
Berwyn, PA 19312
(40)
- ------------------------------------------------------------------------------------------------------------------------------------
Michael Lawson Controller Controller Director, SEI Investments since July N/A N/A
SEI Investments, and Chief and Chief 2005. Manager, SEI Investments from
One Freedom Financial Financial April 1995 to February 1998 and
Valley Drive Officer Officer November 1998 to July 2005.
Oaks, PA 19456 since 2005
(46)
- ------------------------------------------------------------------------------------------------------------------------------------
Brian McNally Vice Vice General Counsel and Chief Compliance N/A N/A
1205 Westlakes Drive President, President Officer of Turner Investment Partners,
Suite 100 Chief since 2002 Inc. Previously Assistant General
Berwyn, PA 19312 Compliance Chief Counsel with Bank of America
(49) Officer and Compliance (September 1997-July 2002); Associate
Secretary Officer and at Kirkpatrick & Lockhart LLP
Secretary (1995-1997); Senior Litigation
since 2004 Counsel, U.S. Securities & Exchange
Commission (1990-1995).
- ------------------------------------------------------------------------------------------------------------------------------------
Calvin Fisher Vice Vice Director, Mutual Fund Administration N/A N/A
1205 Westlakes Drive President President (since 2005); Manager, Mutual Fund
Suite 100 and and Administration (2001-2005).
Berwyn, PA 19312 Assistant Assistant
(34) Secretary Secretary
since 2006
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Each non interested trustee may be contacted by writing to Turner Funds
1205 Westlakes Drive Suite 100 Berwyn, PA 19312 Attn: Brian F. McNally
(2) Each trustee serves until his/her respective successor has been duly
elected and qualified. Each officer serves a 1 year term.
The Trust's Statement of Additional Information ("SAI") includes additional
information about the Trustees and Officers.
The SAI may be obtained without charge by calling 1-800-224-6312.
TURNER FUNDS 2007 ANNUAL REPORT | 63
DISCLOSURE OF FUND EXPENSES (Unaudited)
- --------------------------------------------------------------------------------
All mutual funds have operating expenses. As a shareholder of a mutual fund,
your investment is affected by these ongoing costs, which include (among others)
costs for portfolio management, distribution (12b-1) and/or shareholder services
and other expenses. It is important for you to understand the impact of these
costs on your investment returns. Operating expenses such as these are deducted
from a mutual fund's gross income and directly reduce its final investment
return. These expenses are expressed as a percentage of a mutual fund's average
net assets; this percentage is known as a mutual fund's expense ratio.
The following examples use the expense ratio and are intended to help you
understand the ongoing costs (in dollars) of investing in your Fund and to
compare these costs with those of other mutual funds. The examples are based on
an investment of $1,000 made at the beginning of the period shown and held for
the entire period.
The table below illustrates your Fund's costs in two ways:
o ACTUAL FUND RETURN. This section helps you to estimate the actual expenses
after fee waivers that your Fund incurred over the period. The "Expenses Paid
During Period" column shows the actual dollar expense cost incurred by a $1,000
investment in the Fund, and the "Ending Account Value" number is derived from
deducting that expense cost from the Fund's gross investment return.
You can use this information, together with the actual amount you invested in
the Fund, to estimate the expenses you paid over that period. Simply divide your
actual account value by $1,000 to arrive at a ratio (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply that ratio by the number
shown for your Fund under "Expenses Paid During Period."
o HYPOTHETICAL 5% RETURN. This section helps you compare your Fund's costs with
those of other mutual funds. It provides information about hypothetical account
values and expenses based on the Fund's actual expense ratio (column 3) and an
assumed rate of return of 5% per year before expenses, which is not the Fund's
actual return. This section is useful in making comparisons because the
Securities and Exchange Commission requires all mutual funds to make this 5%
calculation. You can assess your Fund's comparative cost by comparing the
hypothetical result for your Fund in the "Expenses Paid During Period" column
with those that appear in the same charts in the shareholder reports for other
mutual funds.
NOTE: Because the return is set at 5% for comparison purposes -- NOT your Fund's
actual return -- the hypothetical account values and expenses may not be used to
estimate your actual ending account balance or expenses you paid for the period.
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
4/1/07 9/30/07 RATIOS PERIOD*
- -----------------------------------------------------------------------------------------------------------------------------
Turner Concentrated Growth Fund - Investor Class Shares
- -----------------------------------------------------------------------------------------------------------------------------
Actual Fund Return $ 1,000.00 $ 1,250.90 1.27% $ 7.17
Hypothetical 5% Return 1,000.00 1,018.70 1.27 6.43
- -----------------------------------------------------------------------------------------------------------------------------
Turner Core Growth Fund - Institutional Class Shares
- -----------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,154.90 0.69 3.73
Hypothetical 5% Return 1,000.00 1,021.61 0.69 3.50
- -----------------------------------------------------------------------------------------------------------------------------
Turner Core Growth Fund - Investor Class Shares
- -----------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,153.80 0.94 5.08
Hypothetical 5% Return 1,000.00 1,020.36 0.94 4.76
- -----------------------------------------------------------------------------------------------------------------------------
Turner Emerging Growth Fund - Investor Class Shares
- -----------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,116.00 1.40 7.43
Hypothetical 5% Return 1,000.00 1,018.05 1.40 7.08
- -----------------------------------------------------------------------------------------------------------------------------
Turner International Core Growth Fund - Institutional Class Shares
- -----------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,199.40 1.10 6.06
Hypothetical 5% Return 1,000.00 1,019.55 1.10 5.57
- -----------------------------------------------------------------------------------------------------------------------------
Turner Large Cap Growth Fund - Institutional Class Shares
- -----------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,155.00 0.69 3.73
Hypothetical 5% Return 1,000.00 1,021.61 0.69 3.50
- -----------------------------------------------------------------------------------------------------------------------------
Turner Large Cap Growth Fund - Investor Class Shares
- -----------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,153.30 0.94 5.07
Hypothetical 5% Return 1,000.00 1,020.36 0.94 4.76
- -----------------------------------------------------------------------------------------------------------------------------
Turner Large Cap Value Fund - Institutional Class Shares
- -----------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,066.30 0.69 3.57
Hypothetical 5% Return 1,000.00 1,021.61 0.69 3.50
- -----------------------------------------------------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
4/1/07 9/30/07 RATIOS PERIOD*
- -----------------------------------------------------------------------------------------------------------------------------
Turner Midcap Equity Fund - Institutional Class Shares
- -----------------------------------------------------------------------------------------------------------------------------
Actual Fund Return $ 1,000.00 $ 1,052.20 0.90% $ 4.63
Hypothetical 5% Return 1,000.00 1,020.56 0.90 4.56
- -----------------------------------------------------------------------------------------------------------------------------
Turner Midcap Equity Fund - Investor Class Shares
- -----------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,047.40 1.15 5.90
Hypothetical 5% Return 1,000.00 1,019.30 1.15 5.82
- -----------------------------------------------------------------------------------------------------------------------------
Turner Midcap Growth Fund - Investor Class Shares
- -----------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,184.00 1.17 6.41
Hypothetical 5% Return 1,000.00 1,019.20 1.17 5.92
- -----------------------------------------------------------------------------------------------------------------------------
Turner Midcap Growth Fund - Retirement Class Shares
- -----------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,182.80 1.42 7.77
Hypothetical 5% Return 1,000.00 1,017.95 1.42 7.18
- -----------------------------------------------------------------------------------------------------------------------------
Turner New Enterprise Fund - Investor Class Shares
- -----------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,276.70 1.30 7.42
Hypothetical 5% Return 1,000.00 1,018.55 1.30 6.58
- -----------------------------------------------------------------------------------------------------------------------------
Turner Small Cap Equity Fund - Investor Class Shares
- -----------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,011.10 1.45 7.31
Hypothetical 5% Return 1,000.00 1,017.80 1.45 7.33
- -----------------------------------------------------------------------------------------------------------------------------
Turner Small Cap Growth Fund - Investor Class Shares
- -----------------------------------------------------------------------------------------------------------------------------
Actual Fund Return 1,000.00 1,105.60 1.25 6.60
Hypothetical 5% Return 1,000.00 1,018.80 1.25 6.33
- -----------------------------------------------------------------------------------------------------------------------------
* Expenses are equal to the Fund's annualized expense ratio multiplied by
the average account value over the period, multiplied by 183/365 (to
reflect the one-half year period from 4/1/07 - 9/30/07).
64 | TURNER FUNDS 2007 ANNUAL REPORT
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TURNER FUNDS 2007 ANNUAL REPORT | 65
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66 | TURNER FUNDS 2007 ANNUAL REPORT
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TURNER FUNDS 2007 ANNUAL REPORT | 67
- --------------------------------------------------------------------------------
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
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
SEI INVESTMENTS DISTRIBUTION COMPANY
Oaks, Pennsylvania
ADMINISTRATOR
TURNER INVESTMENT PARTNERS, INC.
Berwyn, Pennsylvania
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
KPMG 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.
The Funds file their complete schedules of portfolio holdings with the
Securities and Exchange Commission (the "Commission") for the first and third
quarters of each fiscal year on Form N-Q within sixty days after the end of the
period. The Funds' Forms N-Q are available on the Commission's website at
http://www.sec.gov, and may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
The Board of Trustees of the Turner Funds has delegated responsibility for
decisions regarding proxy voting for securities held by each Fund to Turner
Investment Management LLC ("TIM") (with respect to the Small Cap Equity Fund and
Midcap Equity Fund only) and to Turner Investment Partners, Inc. (with respect
to each other Fund). TIM and Turner Investment Partners, Inc., will vote such
proxies in accordance with their respective proxy policies and procedures, which
are included in Appendix B to the SAI. The Board of Trustees will periodically
review each Fund's proxy voting record.
A description of the policies and procedures that the Funds use to determine how
to vote proxies relating to portfolio securities, as well as information
relating to how the Fund voted proxies relating to portfolio securities during
the most recent 12-month period ended June 30, is available (i) via the Funds'
website, www.turnerinvestments.com and (ii) on the Commission's website at
http://www.sec.gov.
68 | TURNER FUNDS 2007 ANNUAL REPORT
[TURNER FUNDS LOGO]
----------------------------------------
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-002-0304
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 possessed
all five attributes in the definition, although some members of the Audit
Committees possessed some of the attributes. The Board also determined that the
Audit Committee members have general financial expertise, and given the size and
types of the Turner Funds and in light of the nature of the accounting and
valuation issues 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.
Fees billed by KPMG LLP ("KPMG") Related to the Trust
KPMG billed the Trust aggregate fees for services rendered to the Trust for the
last two fiscal years as follows:
- ------------------ ----------------------------------------------------- -----------------------------------------------------
2007 2006
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
All fees and All fees and All other fees All fees and All fees and All other fees
services to the services to and services to services to the services to and services to
Trust that were service service Trust that were service service
pre-approved affiliates that affiliates that pre-approved affiliates that affiliates that
were did not require were did not require
pre-approved pre-approval pre-approved pre-approval
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(a) Audit $214,500 N/A N/A $186,000 N/A N/A
Fees (1)
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(b) Audit-Related N/A N/A N/A N/A N/A N/A
Fees
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(c) Tax Fees $48,400 N/A N/A N/A N/A N/A
(2)
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(d) All N/A $35,307 N/A N/A N/A N/A
Other
Fees (3)
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
Notes:
(1) Audit fees include fees related to the audit of the registrant's annual
financial statements and services normally provided by the accountant
in connection with statutory and regulatory filings.
(2) Tax fees for 2007 consist of tax compliance services for the Trust.
These services primarily included review of federal income tax returns
and excise tax returns, as well as services relating to excise tax
distribution requirements.
(3) All Other Fees consist of fees for services provided in connection with
an assessment of the advisor's anti-money laundering program.
(e)(1) The audit committee does not have pre-approval policies and procedures.
Instead, the audit committee approves on a case-by-case basis each audit or
non-audit service before the accountant is engaged by the registrant.
(e)(2) Percentage of fees billed applicable to non-audit services pursuant to
waiver of pre-approval requirement were as follows:
---------------------------- ----------------- ----------------
2007 2006
---------------------------- ----------------- ----------------
Audit-Related Fees 0.00% 0.00%
---------------------------- ----------------- ----------------
Tax Fees 0.00% 0.00%
---------------------------- ----------------- ----------------
All Other Fees 0.00% 0.00%
---------------------------- ----------------- ----------------
(f) Not applicable.
(g) The aggregate non-audit fees and services billed by KPMG for the last
two fiscal years were $83,707 and $0 for 2007 and 2006, respectively, as
described above.
(h) The registrant's Audit Committee has considered whether the provision
of non-audit services that were rendered to the registrant's investment adviser
and any entity controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant that were
not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X
is compatible with maintaining the principal accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to open-end management investment companies.
ITEM 6. SCHEDULE OF INVESTMENTS.
Schedule of Investments is included as part of the Report to Shareholders filed
under Item 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to open-end management investment companies.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to open-end management investment companies.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable to open-end management investment companies.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant's Board of Trustees since the registrant's
last proxy solicitation.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial
officer, concluded that the registrant's disclosure controls and procedures (as
defined in Rule 30a-3(c) under the Investment Company Act of 1940) were
effective as of a date within 90 days of the filing date of this report (the
"Evaluation Date"), based on their evaluation of the effectiveness of the
registrant's disclosure controls and procedures required by Rule 30a-3(b) under
the Investment Company Act of 1940 and Rule 13a-15(b) or 15d-15(b) under the
Securities Exchange Act of 1934.
(b) There were no significant changes in the registrant's internal control
over financial reporting that occurred during the registrant's last fiscal
quarter that have materially affected, or are reasonably likely to materially
affect, the registrant's internal control over financial reporting.
ITEMS 12. EXHIBITS.
(a)(1) Code of Ethics attached hereto.
(a)(2) A separate certification for the principal executive officer and the
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), are filed
herewith.
(b) Officer certifications as required by Rule 30a-2(b) under the
Investment Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany
this filing as an Exhibit.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Turner Funds
By (Signature and Title) /s/ Thomas R. Trala, Jr.
-------------------------------
Thomas R. Trala, Jr., President
Date: December 5, 2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title) /s/ Thomas R. Trala, Jr.
-------------------------------
Thomas R. Trala, Jr., President
Date: December 5, 2007
By (Signature and Title) /s/ Michael Lawson
------------------------------
Michael Lawson, Controller and
Chief Financial Officer
Date: December 5, 2007